Exhibit 10.1

 

$175,000,000

 

REVOLVING CREDIT AGREEMENT

 

dated as of September 1, 2005,

 

among

 

D 56, INC.,
DEPARTMENT 56 RETAIL, INC.,
TIME TO CELEBRATE, INC.
and
LENOX, INCORPORATED,
as Borrowers,

 

DEPARTMENT 56, INC.,
and
THE OTHER GUARANTORS PARTY HERETO,
as Guarantors,

 

THE LENDERS PARTY HERETO,

 

UBS SECURITIES LLC,
as Arranger and Co-Syndication Agent,

 

UBS AG, STAMFORD BRANCH,
as Issuing Bank and Administrative Agent,

 

UBS LOAN FINANCE LLC,
as Swingline Lender,

 

JPMORGAN CHASE BANK, N.A.,
as Collateral Agent and Co-Syndication Agent,

 

and

 

WELLS FARGO FOOTHILL, LLC and BANK OF AMERICA, N.A.,

as Co-Documentation Agents

 

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

 

TABLE OF CONTENTS

 

ARTICLE I. DEFINITIONS

 

 

 

 

 

SECTION 1.01 Defined Terms

 

 

SECTION 1.02 Classification of Loans and Borrowings
[a05-15805_1ex10d1.htm#Section1_02_055113]

 

 

SECTION 1.03 Terms Generally [a05-15805_1ex10d1.htm#Section1_03_055203]

 

 

SECTION 1.04 Accounting Terms; GAAP [a05-15805_1ex10d1.htm#Section1_04_055207]

 

 

 

 

 

ARTICLE II . THE CREDITS [a05-15805_1ex10d1.htm#Articleii__055210]

 

 

 

 

 

SECTION 2.01 Commitments [a05-15805_1ex10d1.htm#Section2_01_055213]

 

 

SECTION 2.02 Loans [a05-15805_1ex10d1.htm#Section2_02Loans_055217]

 

 

SECTION 2.03 Borrowing Procedure [a05-15805_1ex10d1.htm#Section2_03_055220]

 

 

SECTION 2.04 Evidence of Debt; Repayment of Loans
[a05-15805_1ex10d1.htm#Section2_04_055223]

 

 

SECTION 2.05 Fees [a05-15805_1ex10d1.htm#Section2_05_055226]

 

 

SECTION 2.06 Interest on Loans and Default Compensation
[a05-15805_1ex10d1.htm#Section2_06_055228]

 

 

SECTION 2.07 Termination and Reduction of Commitments
[a05-15805_1ex10d1.htm#Section2_07_055232]

 

 

SECTION 2.08 Interest Elections [a05-15805_1ex10d1.htm#Section2_08_050533]

 

 

SECTION 2.09 [Intentionally Omitted] [a05-15805_1ex10d1.htm#Section2_09_055256]

 

 

SECTION 2.10 Mandatory Prepayments of Loans.
[a05-15805_1ex10d1.htm#Section2_10_055258]

 

 

SECTION 2.11 Alternate Rate of Interest
[a05-15805_1ex10d1.htm#Section2_11_055303]

 

 

SECTION 2.12 Increased Costs [a05-15805_1ex10d1.htm#Section2_12_055308]

 

 

SECTION 2.13 Breakage Payments [a05-15805_1ex10d1.htm#Section2_13_055311]

 

 

SECTION 2.14 Payments Generally; Pro Rata Treatment; Sharing of Set-offs
[a05-15805_1ex10d1.htm#Section2_14_055314]

 

 

SECTION 2.15 Taxes [a05-15805_1ex10d1.htm#Section2_15_055317]

 

 

SECTION 2.16 Mitigation Obligations; Replacement of Lenders
[a05-15805_1ex10d1.htm#Section2_16_055321]

 

 

SECTION 2.17 Swingline Loans [a05-15805_1ex10d1.htm#Section2_17_055324]

 

 

SECTION 2.18 Letters of Credit [a05-15805_1ex10d1.htm#Section2_18_055327]

 

 

SECTION 2.19 Determination of Borrowing Base
[a05-15805_1ex10d1.htm#Section2_19_055329]

 

 

 

 

 

ARTICLE III . REPRESENTATIONS AND WARRANTIES
[a05-15805_1ex10d1.htm#Articleiii_RepresentationsAndWarr_050616]

 

 

 

 

 

SECTION 3.01 Organization; Powers [a05-15805_1ex10d1.htm#Section3_01_050621]

 

 

SECTION 3.02 Authorization; Enforceability
[a05-15805_1ex10d1.htm#Section3_02_050623]

 

 

SECTION 3.03 Governmental Approvals; No Conflicts
[a05-15805_1ex10d1.htm#Section3_03_050625]

 

 

SECTION 3.04 Financial Statements [a05-15805_1ex10d1.htm#Section3_04_050642]

 

 

SECTION 3.05 Properties [a05-15805_1ex10d1.htm#Section3_05_050705]

 

 

SECTION 3.06 Equity Interests and Subsidiaries
[a05-15805_1ex10d1.htm#Section3_06_050718]

 

 

SECTION 3.07 Litigation; Compliance with Laws
[a05-15805_1ex10d1.htm#Section3_07_050723]

 

 

SECTION 3.08 Agreements [a05-15805_1ex10d1.htm#Section3_08_050735]

 

 

SECTION 3.09 Federal Reserve Regulations
[a05-15805_1ex10d1.htm#Section3_09_050739]

 

 

SECTION 3.10 Investment Company Act; Public Utility Holding Company Act
[a05-15805_1ex10d1.htm#Section3_10_050743]

 

 

SECTION 3.11 Use of Proceeds [a05-15805_1ex10d1.htm#Section3_11_050745]

 

 

SECTION 3.12 Taxes [a05-15805_1ex10d1.htm#Section3_12_050747]

 

 

 

i

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

 

SECTION 3.13 No Material Misstatements
[a05-15805_1ex10d1.htm#Section3_13_050825]

 

 

SECTION 3.14 Labor Matters [a05-15805_1ex10d1.htm#Section3_14_050823]

 

 

SECTION 3.15 Solvency [a05-15805_1ex10d1.htm#Section3_15_050821]

 

 

SECTION 3.16 Employee Benefit Plans [a05-15805_1ex10d1.htm#Section3_16_050819]

 

 

SECTION 3.17 Environmental Matters [a05-15805_1ex10d1.htm#Section3_17_050831]

 

 

SECTION 3.18 Insurance [a05-15805_1ex10d1.htm#Section3_18_050844]

 

 

SECTION 3.19 Security Documents [a05-15805_1ex10d1.htm#Section3_19_050856]

 

 

SECTION 3.20 Acquisition Documents; Representations and Warranties in Agreement
[a05-15805_1ex10d1.htm#Section3_20_050907]

 

 

SECTION 3.21 Anti-Terrorism Law [a05-15805_1ex10d1.htm#Section3_21_050910]

 

 

SECTION 3.22 Location of Material Inventory
[a05-15805_1ex10d1.htm#Section3_22_050923]

 

 

SECTION 3.23 Accuracy of Borrowing Base
[a05-15805_1ex10d1.htm#Section3_23_050926]

 

 

SECTION 3.24 Post-Audit Asset Dispositions
[a05-15805_1ex10d1.htm#Section3_24_050928]

 

 

 

 

 

ARTICLE IV . CONDITIONS TO CREDIT EXTENSIONS
[a05-15805_1ex10d1.htm#Articleiv_ConditionsToCreditExten_050945]

 

 

 

 

 

SECTION 4.01 Conditions to Initial Credit Extension
[a05-15805_1ex10d1.htm#Section4_01_050949]

 

 

SECTION 4.02 Conditions to All Credit Extensions
[a05-15805_1ex10d1.htm#Section4_02_051055]

 

 

 

 

 

ARTICLE V . AFFIRMATIVE COVENANTS
[a05-15805_1ex10d1.htm#Articlev_AffirmativeCovenants_051107]

 

 

 

 

 

SECTION 5.01 Financial Statements, Reports, etc.
[a05-15805_1ex10d1.htm#Section5_01_051113] 

 

 

SECTION 5.02 Litigation and Other Notices
[a05-15805_1ex10d1.htm#Section5_02_051138]

 

 

SECTION 5.03 Existence; Businesses and Properties
[a05-15805_1ex10d1.htm#Section5_03_051217]

 

 

SECTION 5.04 Insurance [a05-15805_1ex10d1.htm#Section5_04_051232]

 

 

SECTION 5.05 Obligations and Taxes [a05-15805_1ex10d1.htm#Section5_05_051250]

 

 

SECTION 5.06 Employee Benefits [a05-15805_1ex10d1.htm#Section5_06_051255]

 

 

SECTION 5.07 Maintaining Records; Access to Properties and Inspections
[a05-15805_1ex10d1.htm#Section5_07_051258]

 

 

SECTION 5.08 Use of Proceeds [a05-15805_1ex10d1.htm#Section5_08_051325]

 

 

SECTION 5.09 Compliance with Environmental Laws; Environmental Reports
[a05-15805_1ex10d1.htm#Section5_09_051327]

 

 

SECTION 5.10 Reserved [a05-15805_1ex10d1.htm#Section5_10_051330]

 

 

SECTION 5.11 Additional Collateral; Additional Guarantors
[a05-15805_1ex10d1.htm#Section5_11_051333]

 

 

SECTION 5.12 Security Interests; Further Assurances
[a05-15805_1ex10d1.htm#Section5_12_051542]

 

 

SECTION 5.13 Information Regarding Collateral
[a05-15805_1ex10d1.htm#Section5_13_051653]

 

 

SECTION 5.14 Borrowing Base-Related Reports
[a05-15805_1ex10d1.htm#Section5_14_051844]

 

 

SECTION 5.15 Borrowing Base Verification; Inventory Appraisals
[a05-15805_1ex10d1.htm#Section5_15_051900]

 

 

 

 

 

ARTICLE VI . NEGATIVE COVENANTS
[a05-15805_1ex10d1.htm#Articlevi_NegativeCovenants_051901]

 

 

 

 

 

SECTION 6.01 Indebtedness [a05-15805_1ex10d1.htm#Section6_01_121421]

 

 

SECTION 6.02 Liens [a05-15805_1ex10d1.htm#Section6_02Liens_051920]

 

 

SECTION 6.03 Sale and Leaseback Transactions
[a05-15805_1ex10d1.htm#Section6_03_052021]

 

 

SECTION 6.04 Investment, Loan and Advances
[a05-15805_1ex10d1.htm#Section6_04_052033]

 

 

SECTION 6.05 Mergers, Consolidations, Sales of Assets and Acquisitions
[a05-15805_1ex10d1.htm#Section6_05_052053]

 

 

SECTION 6.06 Dividends [a05-15805_1ex10d1.htm#Section6_06_121444]

 

 

SECTION 6.07 Transactions with Affiliates
[a05-15805_1ex10d1.htm#Section6_07_052122]

 

 

SECTION 6.08 Financial Covenants [a05-15805_1ex10d1.htm#Section6_08_052127]

 

 

 

ii

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

 

SECTION 6.09 Limitation on Modifications of Indebtedness; Modifications of
Certificate of Incorporation, or Other Constitutive Documents, By-laws and
Certain Other Agreements, etc [a05-15805_1ex10d1.htm#Section6_09_052434]

 

 

SECTION 6.10 Limitation on Certain Restrictions on Subsidiaries
[a05-15805_1ex10d1.htm#Section6_10_052449]

 

 

SECTION 6.11 Limitation on Issuance of Capital Stock
[a05-15805_1ex10d1.htm#Section6_11_052451]

 

 

SECTION 6.12 Limitation on Creation of Subsidiaries
[a05-15805_1ex10d1.htm#Section6_12_052510]

 

 

SECTION 6.13 Business [a05-15805_1ex10d1.htm#Section6_13_052517]

 

 

SECTION 6.14 Limitation on Accounting Changes
[a05-15805_1ex10d1.htm#Section6_14_052526]

 

 

SECTION 6.15 Fiscal Year [a05-15805_1ex10d1.htm#Section6_15_052528]

 

 

SECTION 6.16 No Negative Pledges [a05-15805_1ex10d1.htm#Section6_16_052538]

 

 

SECTION 6.17 Lease Obligations [a05-15805_1ex10d1.htm#Section6_17_052542]

 

 

SECTION 6.18 Anti-Terrorism Law; Anti-Money Laundering
[a05-15805_1ex10d1.htm#Section6_18_052550]

 

 

SECTION 6.19 Embargoed Person [a05-15805_1ex10d1.htm#Section6_19_052554]

 

 

SECTION 6.20 Inactive Subsidiaries [a05-15805_1ex10d1.htm#Section6_20_052557]

 

 

 

 

 

ARTICLE VII . GUARANTEE [a05-15805_1ex10d1.htm#Articlevii_Guarantee_052558]

 

 

 

 

 

SECTION 7.01 The Guarantee [a05-15805_1ex10d1.htm#Section7_01_052601]

 

 

SECTION 7.02 Obligations Unconditional
[a05-15805_1ex10d1.htm#Section7_02_052618]

 

 

SECTION 7.03 Reinstatement [a05-15805_1ex10d1.htm#Section7_03_052630]

 

 

SECTION 7.04 Subrogation; Subordination
[a05-15805_1ex10d1.htm#Section7_04_052646]

 

 

SECTION 7.05 Remedies [a05-15805_1ex10d1.htm#Section7_05_052648]

 

 

SECTION 7.06 Instrument for the Payment of Money
[a05-15805_1ex10d1.htm#Section7_06_052650]

 

 

SECTION 7.07 Continuing Guarantee [a05-15805_1ex10d1.htm#Section7_07_052653]

 

 

SECTION 7.08 General Limitation on Guarantee Obligations
[a05-15805_1ex10d1.htm#Section7_08_052659]

 

 

 

 

 

ARTICLE VIII . EVENTS OF DEFAULT
[a05-15805_1ex10d1.htm#Articleviii_EventsOfDefault_052701]

 

 

 

 

 

ARTICLE IX . COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
[a05-15805_1ex10d1.htm#Articleix_CollateralAccountApplic_052749]

 

 

 

 

 

SECTION 9.01 Collateral Account [a05-15805_1ex10d1.htm#Section9_01_052754]

 

 

SECTION 9.02 Application of Proceeds [a05-15805_1ex10d1.htm#Section9_02_052800]

 

 

 

 

 

ARTICLE X . THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
[a05-15805_1ex10d1.htm#Articlex_TheAdministrativeAgentAn_052830]

 

 

 

 

 

SECTION 10.01 Appointment [a05-15805_1ex10d1.htm#Section10_01_052833]

 

 

SECTION 10.02 Administrative Agent and the Collateral Agent in their Individual
Capacities [a05-15805_1ex10d1.htm#Section10_02_052836]

 

 

SECTION 10.03 Exculpatory Provisions [a05-15805_1ex10d1.htm#Section10_03_052838]

 

 

SECTION 10.04 Reliance by Agents [a05-15805_1ex10d1.htm#Section10_04_052851]

 

 

SECTION 10.05 Delegation of Duties [a05-15805_1ex10d1.htm#Section10_05_052855]

 

 

SECTION 10.06 Successor Administrative Agent
[a05-15805_1ex10d1.htm#Section10_06_052908]

 

 

SECTION 10.07 Non-Reliance on Agents and Other Lenders
[a05-15805_1ex10d1.htm#Section10_07_052911]

 

 

SECTION 10.08 No Other Administrative Agent or the Collateral Agent
[a05-15805_1ex10d1.htm#Section10_08_052924]

 

 

SECTION 10.09 Indemnification [a05-15805_1ex10d1.htm#Section10_09_052926]

 

 

SECTION 10.10 Additional Loans [a05-15805_1ex10d1.htm#Section10_10_052928]

 

 

 

iii

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

 

ARTICLE XI . MISCELLANEOUS
[a05-15805_1ex10d1.htm#Articlexi_Miscellaneous_052948]

 

 

 

 

 

SECTION 11.01 Notices [a05-15805_1ex10d1.htm#Section11_01_052951]

 

 

SECTION 11.02 Waivers; Amendment [a05-15805_1ex10d1.htm#Section11_02_122547]

 

 

SECTION 11.03 Expenses; Indemnity [a05-15805_1ex10d1.htm#Section11_03_062110]

 

 

SECTION 11.04 Successors and Assigns [a05-15805_1ex10d1.htm#Section11_04_121513]

 

 

SECTION 11.05 Survival of Agreement [a05-15805_1ex10d1.htm#Section11_05_062206]

 

 

SECTION 11.06 Counterparts; Integration; Effectiveness; Electronic Execution
[a05-15805_1ex10d1.htm#Section11_06_062209]

 

 

SECTION 11.07 Severability [a05-15805_1ex10d1.htm#Section11_07_062213]

 

 

SECTION 11.08 Right of Setoff [a05-15805_1ex10d1.htm#Section11_08_062227]

 

 

SECTION 11.09 Governing Law; Jurisdiction; Consent to Service of Process
[a05-15805_1ex10d1.htm#Section11_09_062229]

 

 

SECTION 11.10 Waiver of Jury Trial [a05-15805_1ex10d1.htm#Section11_10_062236]

 

 

SECTION 11.11 Headings [a05-15805_1ex10d1.htm#Section11_11_062237]

 

 

SECTION 11.12 Confidentiality [a05-15805_1ex10d1.htm#Section11_12_062240]

 

 

SECTION 11.13 Interest Rate Limitation
[a05-15805_1ex10d1.htm#Section11_13_062304]

 

 

SECTION 11.14 Lender Addendum [a05-15805_1ex10d1.htm#Section11_14_062306]

 

 

SECTION 11.15 USA PATRIOT Act Notice [a05-15805_1ex10d1.htm#Section11_15_062308]

 

 

 

iv

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

 

ANNEXES

 

 

 

 

 

Annex I

 

Applicable Margin

 

 

 

SCHEDULES

 

 

 

 

 

Schedule 1.01(a)

 

Mortgaged Real Property

Schedule 1.01(b)

 

Refinancing Indebtedness To Be Repaid

Schedule 1.01(c)

 

Subsidiary Guarantors

Schedule 2.18

 

Existing Letters of Credit

Schedule 3.03

 

Governmental Approvals; Compliance with Laws

Schedule 3.05(b)

 

Real Property

Schedule 3.05(c)

 

Intellectual Property Licenses

Schedule 3.06(a)

 

Subsidiaries

Schedule 3.06(c)

 

Corporate Organizational Chart

Schedule 3.08(c)

 

Material Agreements

Schedule 3.17

 

Environmental Matters

Schedule 3.18

 

Insurance

Schedule 3.19(b)

 

Trademarks

Schedule 3.19(c)

 

Patents

Schedule 3.19(d)

 

Copyrights

Schedule 3.20

 

List of Acquisition Documents

Schedule 3.22

 

Location of Material Inventory

Schedule 4.01(g)

 

Local Counsel

Schedule 4.01(n)

 

Landlord Access Agreements

Schedule 4.01(o)(iii)

 

Title Insurance Amounts

Schedule 6.01(b)

 

Existing Indebtedness

Schedule 6.02(c)

 

Existing Liens

Schedule 6.04(b)

 

Existing Investments

 

 

 

EXHIBITS

 

 

 

 

 

Exhibit A-1

 

Form of Administrative Questionnaire

Exhibit A-2

 

Form of Compliance Certificate

Exhibit A-3

 

Form of LC Request

Exhibit A-4

 

Form of Lender Addendum

Exhibit B

 

Form of Assignment and Acceptance

Exhibit C

 

Form of Borrowing Request

Exhibit D

 

Form of Interest Election Request

Exhibit E

 

Form of Joinder Agreement

Exhibit F

 

Form of Landlord Lien Waiver and Access Agreement

Exhibit G

 

Form of Mortgage

Exhibit H-1

 

Form of Revolving Note

Exhibit H-2

 

Form of Swingline Note

Exhibit I-1

 

Form of Perfection Certificate

Exhibit I-2

 

Form of Perfection Certificate Supplement

Exhibit J

 

Form of Security Agreement

 

v

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

 

Exhibit K-1

 

Form of Opinion of Company Counsel

Exhibit K-2

 

Form of Opinion of Local Counsel

Exhibit L

 

Form of Intercompany Note

Exhibit M

 

Form of Solvency Certificate

Exhibit N

 

Form of Borrowing Base Certificate

 

vi

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

 

REVOLVING CREDIT AGREEMENT

 

This REVOLVING CREDIT AGREEMENT (this “Agreement”) dated as of September 1,
2005, among D 56, INC., a Minnesota corporation (“D 56”), DEPARTMENT 56 RETAIL,
INC., a Minnesota corporation (“D 56 Retail”), TIME TO CELEBRATE, INC., a
Minnesota corporation (“TTC”), LENOX, INCORPORATED, a New Jersey corporation
(“Lenox” and, together with D 56, D 56 Retail and TTC, “Borrowers” and each
individually, a “Borrower”), DEPARTMENT 56, INC., a Delaware corporation
(“Holdings”), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given to it in Article I),
the Lenders (as defined herein), UBS SECURITIES LLC, as sole arranger and
co-syndication agent (in such respective capacities, “Arranger” and
“Co-Syndication Agent”), JPMORGAN CHASE BANK, N.A., as collateral agent and
co-syndication agent for the Secured Parties (as defined herein) (in such
respective capacities, “Collateral Agent” and “Co-Syndication Agent”), WELLS
FARGO FOOTHILL, LLC and BANK OF AMERICA, N.A., as co-documentation agents (in
such capacity, “Co-Documentation Agents”), UBS LOAN FINANCE LLC, as swingline
lender (in such capacity, “Swingline Lender”), UBS AG, STAMFORD BRANCH, as
issuing bank and as administrative agent for the Lenders and the Secured Parties
(in such respective capacities, “Issuing Bank,” and “Administrative Agent”).

 

WITNESSETH:

 

WHEREAS, Holdings has entered into a stock purchase agreement, dated as of
July 21, 2005 (as amended, supplemented or otherwise modified from time to time
in accordance with the provisions hereof and thereof, the “Acquisition
Agreement”), with Brown-Forman Corporation (“Seller”), a Delaware corporation,
to acquire (the “Acquisition”) all of the issued and outstanding common shares
of Lenox (the “Acquired Business”).

 

WHEREAS, Borrowers have requested the Lenders to extend credit in the form of
Revolving Loans at any time and from time to time prior to the Revolving
Maturity Date, in an aggregate principal amount at any time outstanding not in
excess of $175,000,000, of which no more than $105,000,000 may be drawn on the
Closing Date.

 

WHEREAS, Borrowers have requested the Swingline Lender to make Swingline Loans,
at any time and from time to time prior to the Revolving Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of $20,000,000.

 

WHEREAS, Borrowers have requested the Issuing Bank to issue letters of credit,
in an aggregate face amount at any time outstanding not in excess of
$20,000,000, to support payment obligations incurred in the ordinary course of
business by each Borrower and their Subsidiaries.

 

WHEREAS, the proceeds of the Loans are to be used in accordance with
Section 3.11.

 

NOW, THEREFORE, the Lenders are willing to extend such credit to Borrowers and
the Issuing Bank is willing to issue letters of credit for the account of
Borrowers on the terms and subject to the conditions set forth herein. 
Accordingly, the parties hereto agree as follows:

 

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

 

ARTICLE I.

DEFINITIONS

 

SECTION 1.01  DEFINED TERMS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SPECIFIED BELOW:

 

“ABR”, when used in reference to any Loan or Borrowing, is used when such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“ABR Borrowing” shall mean a Borrowing comprised of ABR Revolving Loans.

 

“ABR Revolving Borrowing” shall mean a Borrowing comprised of ABR Revolving
Loans.

 

“ABR Revolving Loan” shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

 

“Accounting Changes” shall have meaning assigned to such term in Section 1.04.

 

“Account Debtor” shall mean any Person who may become obligated to another
Person under, with respect to, or on account of, an Account.

 

“Accounts” shall mean all “accounts,” as such term is defined in the UCC as in
effect on the date hereof in the State of New York, in which such Person now or
hereafter has rights.

 

“Acquired Business” shall have the meaning assigned to such term in the first
recital hereto.

 

“Acquisition” shall have the meaning assigned to such term in the first recital
hereto.

 

“Acquisition Agreement” shall have the meaning assigned to such term in the
first recital hereto.

 

“Acquisition Consideration” shall mean the purchase consideration for any
Permitted Acquisition and all other payments paid to or for the benefit of the
seller by Holdings, Borrowers or any of their Subsidiaries in exchange for, or
as part of, or in connection with, any Permitted Acquisition, whether paid in
cash or by exchange of Equity Interests or of assets or otherwise and whether
payable at or prior to the consummation of such Permitted Acquisition or
deferred for payment at any future time, whether or not any such future payment
is subject to the occurrence of any contingency, and includes any and all
payments representing the purchase price and any assumptions of Indebtedness,
“earn-outs” and other agreements to make any payment the amount of which is, or
the terms of payment of which are, in any respect subject to or contingent upon
the revenues, income, cash flow or profits (or the like) of any Person or
business; provided, that, if the amount of any consideration that is a portion
of Acquisition Consideration is contingent and is not otherwise stated or
determinable, Holdings, Borrowers or

 

2

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

 

any of their Subsidiaries may use the maximum reasonable anticipated amount of
such consideration as of the date of determination of the Acquisition
Consideration for purposes of determining compliance with clause (x) of the
definition of Permitted Acquisition.

 

“Acquisition Documents” shall mean the collective reference to the Acquisition
Agreement and all other agreements, instruments and documents entered into in
connection with the Acquisition.

 

“Adjusted LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, (a) an interest rate per annum (rounded upward, if
necessary, to the next 1/100 of 1%) determined by the Administrative Agent to be
equal to the LIBOR Rate for such Eurodollar Borrowing in effect for such
Interest Period divided by (b) 1 minus the Statutory Reserves (if any) for such
Eurodollar Borrowing for such Interest Period.

 

“Administrative Agent” shall have the meaning assigned to such term in the
preamble hereto and includes each other Person appointed as the successor
pursuant to Article X.

 

“Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(b).

 

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A-1, or such other form as may be supplied from time to time by
the Administrative Agent.

 

“Affiliate” shall mean, when used with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified;
provided, however, that, for purposes of Section 6.07, the term “Affiliate”
shall also include any Person that directly or indirectly owns more than 10% of
any class of Equity Interests of the Person specified or that is an executive
officer or director of the Person specified.

 

“Agents” shall mean the Arranger, Co-Documentation Agents, Co-Syndication
Agents, Administrative Agent and the Collateral Agent.

 

“Agreement” shall have the meaning assigned to such term in the preamble hereto.

 

“Alternate Advance Rate Period” shall mean the period beginning August 1 and
ending October 31 of each year until the Revolving Maturity Date.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum (rounded upward,
if necessary, to the next 1/100 of 1%) equal to the greater of (a) the Base Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 0.50%.  If the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms of the definition thereof, the Alternate Base Rate
shall be determined without regard to clause (b) of the preceding sentence until
the circumstances giving rise to such inability no longer exist.  Any change in
the Alternate Base Rate due to a change in the Base Rate or the

 

3

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

 

Federal Funds Effective Rate shall be effective on the effective date of such
change in the Base Rate or the Federal Funds Effective Rate, respectively.

 

“Anti-Terrorism Laws” shall have the meaning assigned to such term in
Section 3.21.

 

“Applicable Fee” shall mean, for any day, with respect to any Revolving Loan,
the applicable percentage set forth in Annex I under the caption “Applicable
Fee”.

 

“Applicable Margin” shall mean, for any day, with respect to any Revolving Loan,
the applicable percentage set forth in Annex I under the appropriate caption.

 

“Arranger” shall have the meaning assigned to such term in the preamble hereto.

 

“Asset Sale” shall mean (a) any conveyance, sale, lease, sublease, assignment,
transfer or other disposition (including by way of merger or consolidation and
including any sale and leaseback transaction) of any Property (including stock
of any Subsidiary of Holdings by the holder thereof) by Holdings, Borrowers or
any of their Subsidiaries to any Person other than Borrowers or any Subsidiary
Guarantor (excluding (i) Inventory sold in the ordinary course of business,
(ii) any sale or discount, in each case without recourse, of accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof, (iii) disposals of obsolete, uneconomical,
negligible, worn out or surplus Property in the ordinary course of business or
(iv) sales of Cash Equivalents and marketable securities) and (b) any issuance
or sale by any Subsidiary of Holdings (other than Borrowers) of its Equity
Interests to any Person (other than to Borrowers or any Subsidiary Guarantor).

 

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent, in the
form of Exhibit B, or such other form as shall be approved by the Administrative
Agent.

 

“Attributable Indebtedness” shall mean, when used with respect to any sale and
leaseback transaction, as at the time of determination, the present value
(discounted at a rate equivalent to Borrowers’ then-current weighted average
cost of funds for borrowed money as at the time of determination, compounded on
a semi-annual basis) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in any such sale and leaseback
transaction.

 

“Base Rate” shall mean, for any day, a rate per annum that is equal to the
corporate base rate of interest established by the Administrative Agent from
time to time; each change in the Base Rate shall be effective on the date such
change is announced as being effective.  The corporate base rate is not
necessarily the lowest rate charged by the Administrative Agent to its
customers.

 

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.

 

“Borrower” and “Borrowers” each shall have the meaning assigned to such terms in
the preamble hereto.

 

4

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

 

“Borrowing” shall mean (a) Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Revolving Loans, as to
which a single Interest Period is in effect, or (b) a Swingline Loan.

 

“Borrowing Availability” shall mean at any time the lesser of (a) the Borrowing
Base at such time and (b) the aggregate amount of the Lenders’ Revolving
Commitments at such time, in each case, less the aggregate Revolving Exposure of
all Lenders at such time.

 

“Borrowing Base” shall mean at any time, subject to adjustment as provided in
Section 2.19, an amount equal to the sum of, without duplication:

 

(A)           THE BOOK VALUE OF ELIGIBLE ACCOUNTS OF BORROWERS MULTIPLIED BY THE
ADVANCE RATE OF 85%, PLUS

 

(B)           THE LESSER OF (I) THE ADVANCE RATE OF 65% OF THE COST OF ELIGIBLE
INVENTORY OF BORROWERS, OR (II) THE ADVANCE RATE OF 85% OF THE NET RECOVERY COST
PERCENTAGE MULTIPLIED BY THE COST OF ELIGIBLE INVENTORY OF BORROWERS; PROVIDED
THAT DURING THE ALTERNATE ADVANCE RATE PERIOD, THE ADVANCE RATES IN (I) AND
(II) OF THIS CLAUSE (B) SHALL BE 70% AND 90%, RESPECTIVELY, MINUS

 

(C)           A RESERVE IN THE AMOUNT OF THE CURRENT DERIVATIVE EXPOSURE OR SUCH
OTHER AMOUNT AS THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT MAY REASONABLY
DETERMINE IN RESPECT OF SUCH EXPOSURE, MINUS

 

(D)           EFFECTIVE IMMEDIATELY UPON NOTIFICATION THEREOF TO BORROWERS BY
THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, ANY RESERVES ESTABLISHED FROM
TIME TO TIME BY THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT IN THE EXERCISE
OF ITS REASONABLE CREDIT JUDGMENT;

 

Subject to the relevant terms and provisions set forth in this Agreement,
including, without limitation, Section 11.02, the Administrative Agent or the
Collateral Agent at all times shall be entitled to reduce or increase the
advance rates and standards of eligibility under this Agreement, in each case in
its commercially reasonable discretion.

 

The Borrowing Base at any time shall be determined by reference to the most
recent Borrowing Base Certificate theretofore delivered to the Collateral Agent
and the Administrative Agent with such adjustments as the Administrative Agent
or the Collateral Agent deem appropriate in their reasonable credit judgment to
assure that the Borrowing Base is calculated in accordance with the terms of
this Agreement.

 

“Borrowing Base Certificate” shall mean an Officers’ Certificate from Borrowers,
substantially in the form of, and containing the information prescribed by,
Exhibit N, delivered to the Administrative Agent and the Collateral Agent
setting forth Borrowers’ calculation of the Borrowing Base.

 

“Borrowing Request” shall mean a request by a Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C, or such other
form as shall be approved by the Administrative Agent.

 

5

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

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Revolving
Loan, the term “Business Day” shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.

 

“Capital Expenditures” shall mean, with respect to any Person, for any period,
the aggregate amount of all expenditures by such Person and its Subsidiaries
during that period for fixed or capital assets that, in accordance with GAAP,
are or should be classified as capital expenditures in the consolidated balance
sheet of such Person and its Consolidated Subsidiaries.

 

“Capital Lease Obligations” of any Person shall mean the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) Property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Cash Equivalents” shall mean, as to any Person:  (a) securities issued, or
directly, unconditionally and fully guaranteed or insured, by the United States
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having maturities of
not more than one year from the date of acquisition by such Person;
(b) securities issued, or directly, unconditionally and fully guaranteed or
insured, by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Ratings Group or Moody’s Investors Services, Inc.; (c) time
deposits and certificates of deposit or bankers’ acceptance of any Lender or any
commercial bank having, or which is the principal banking subsidiary of a bank
holding company organized under the laws of the United States, any state thereof
or the District of Columbia having, capital and surplus aggregating in excess of
$500.0 million and a rating of “A” (or such other similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) with maturities of not more than
one year from the date of acquisition by such Person; (d) repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (c) above, which repurchase obligations are
secured by a valid perfected security interest in the underlying securities;
(e) commercial paper issued by any Person incorporated in the United States
rated at least A-1 or the equivalent thereof by Standard & Poor’s Rating Service
or at least P-1 or the equivalent thereof by Moody’s Investors Service, Inc.,
and in each case maturing not more than one year after the date of acquisition
by such Person; (f) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (a) through
(e) above; (g) variable rate preferred securities issued by issuers rated AA- or
better by Standard & Poor’s Rating Service or Aa3 or better by Moody’s Investors
Service, Inc. and otherwise reasonably acceptable to the Administrative Agent;
and (h) demand deposit accounts maintained in the ordinary course of business.

 

“Casualty Event” shall mean, with respect to any Property (including Real
Property) of any Person, any loss of title with respect to such Property or any
loss of or damage to or

 

6

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

 

destruction of, or any condemnation or other taking (including by any
Governmental Authority) of, such Property for which such Person or any of its
Subsidiaries receives insurance proceeds or proceeds of a condemnation award or
other compensation.  “Casualty Event” shall include but not be limited to any
taking of all or any part of any Real Property of any Person or any part
thereof, in or by condemnation or other eminent domain proceedings pursuant to
any law, or by reason of the temporary requisition of the use or occupancy of
all or any part of any Real Property of any Person or any part thereof by any
Governmental Authority, civil or military.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.

 

A “Change in Control” shall be deemed to have occurred if:  (a) Holdings at any
time ceases to own 100% of the capital stock of any Borrower; (b) at any time a
change of control occurs under and as defined in any documentation relating to
any Material Indebtedness; (c) any “Person” or “group” (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause such Person or group shall be deemed to have
“beneficial ownership” of all securities that any such Person or group has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of Voting Stock representing more
than 25% of the voting power of the total outstanding Voting Stock of Holdings;
or (d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Holdings
(together with any new directors whose election to such Board of Directors or
whose nomination for election was approved by a vote of 66 2/3% of the directors
of Holdings then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of Holdings.

 

“Change in Law” shall mean (a) the adoption of any law, treaty, order, rule or
regulation after the date of this Agreement, (b) any change in any law, treaty,
order, rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by any
Lender or Issuing Bank (or for purposes of Section 2.12(b), by any lending
office of such Lender or by such Lender’s or Issuing Bank’s holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this
Agreement.

 

“Charges” shall have the meaning assigned to such term in Section 11.13.

 

“Chattel Paper” shall mean all “chattel paper,” as such term is defined in the
UCC as in effect on the date hereof in the State of New York, in which any
Person now or hereafter has rights.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or Swingline Commitment.

 

7

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

 

“Closing Date” shall mean the date of the initial Credit Extension hereunder.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

 

“Collateral” shall mean, collectively, all of the Security Agreement Collateral,
the Mortgaged Real Property and all other Property of whatever kind and nature
pledged as collateral under any Security Document.

 

“Collateral Agent” shall have the meaning assigned to such term in the preamble
hereto.

 

“Collateral Agent Fee” shall have the meaning ascribed to such term in
Section 2.05(b)(ii).

 

“Commercial Letter of Credit” shall mean any letter of credit or similar
instrument issued for the account of a Borrower for the benefit of such Borrower
or any of its Subsidiaries, for the purpose of providing the primary payment
mechanism in connection with the purchase of materials, goods or services by
such Borrower or any of its Subsidiaries in the ordinary course of their
businesses.

 

“Commitment” shall mean, with respect to any Lender, such Lender’s Revolving
Commitment, LC Commitment or Swingline Commitment.

 

“Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a).

 

“Commitments” shall mean the aggregate sum of each Lender’s Commitment.

 

“Companies” shall mean Holdings and its Subsidiaries; and “Company” shall mean
any one of them.

 

“Compliance Certificate” shall mean a certificate of a Financial Officer
substantially in the form of Exhibit A-2.

 

“Consolidated Companies” shall mean Holdings and its Consolidated Subsidiaries.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period, adjusted, in each case only to the extent (and in the same
proportion) deducted or excluded in determining such Consolidated Net Income
(and with respect to the portion of Consolidated Net Income attributable to any
Subsidiary of Holdings only if a corresponding amount would be permitted at the
date of determination to be distributed to Holdings by such Subsidiary without
prior approval (or with prior approval that has already been obtained), pursuant
to the terms of its organizational documents and all agreements, instruments,
judgments, decrees, orders, statutes, rules and regulations applicable to such
Subsidiary or its stockholders), by (x) adding thereto (i) the amount of
Consolidated Interest Expense, (ii) provision for taxes based on income taxes
(including without duplication, and to the extent included in GAAP, any foreign
withholding taxes, single business or unitary taxes or other similar state
taxes) and including franchise taxes, (iii) amortization expense,
(iv) depreciation expense, (v) all other non-cash items (excluding any non-cash
charge that results in an accrual or a reserve for cash charges in any future
period), (vi) severance payments paid to former

 

8

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

 

employees after the Closing Date and prior to December 31, 2006 in an aggregate
amount not to exceed $8,500,000, (vii) nonrecurring fees and expenses in
connection with the Transactions incurred after the Closing Date and prior to
December 31, 2006 in an aggregate amount not to exceed $1,000,000,
(viii) expenses incurred in connection with retail store closings after the
Closing Date and prior to December 31, 2006 in an aggregate amount not to exceed
$2,500,000 and (ix) expenses incurred in connection with facility consolidations
after the Closing Date and prior to December 31, 2006 in an aggregate amount not
to exceed $11,000,000, and (y) subtracting the aggregate amount of all non-cash
items, determined on a consolidated basis, to the extent such items increased
Consolidated Net Income for such period.  Consolidated EBITDA shall be
calculated on a Pro Forma Basis to give effect to the Acquisition and any other
Permitted Acquisition and Asset Sales consummated during the fiscal period of
Holdings ended on the Test Period thereof as if each such Permitted Acquisition
had been effected on the first day of such period and as if each such Asset Sale
had been consummated on the day prior to the first day of such period. 
Notwithstanding the foregoing, to the extent that results from any of the months
set forth below are included in any applicable test period, “Consolidated
EBITDA” for such months shall be deemed equal to the amounts set forth below:

 

August 2004

 

$

6,500,000

 

September 2004

 

$

13,500,000

 

October 2004

 

$

15,500,000

 

November 2004

 

$

10,600,000

 

December 2004

 

$

9,600,000

 

January 2005

 

$

(4,300,000

)

February 2005

 

$

(1,200,000

)

March 2005

 

$

1,800,000

 

April 2005

 

$

3,200,000

 

May 2005

 

$

(5,600,000

)

June 2005

 

$

3,500,000

 

July 2005

 

$

3,500,000

 

 

“Consolidated Indebtedness” shall mean, as at any date of determination, without
duplication, the aggregate amount of all Indebtedness (but including in any
event the then outstanding principal amount of all Loans, all Capital Lease
Obligations and all LC Exposure) of Holdings and its Consolidated Subsidiaries
on a consolidated basis as determined in accordance with GAAP.

 

“Consolidated Interest Coverage Ratio” shall mean, for any Test Period, the
ratio of (x) Consolidated EBITDA for such Test Period to (y) Consolidated
Interest Expense for such Test Period.

 

“Consolidated Interest Expense” shall mean, for any period, without duplication,
the total consolidated interest expense of Holdings and its Consolidated
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof and including amortization of debt discount and deferred
financing costs, capitalized interest, interest paid in kind, commitment fees,
letter of credit fees and net amounts payable under Hedging Agreements)
determined in accordance with GAAP plus, without duplication, (a) the portion of
Capital Lease Obligations of Holdings and its Consolidated Subsidiaries
representing the interest factor for

 

9

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such period, (b) imputed interest on Attributable Indebtedness, (c) cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than Holdings or a Wholly Owned Subsidiary) in connection
with Indebtedness incurred by such plan or trust, (d) all interest paid or
payable with respect to discontinued operations, (e) the product of (i) all
dividend payments on any series of any Preferred Stock, if any, of any
Subsidiary of Holdings (other than any Preferred Stock, if any, held by Holdings
or a Wholly Owned Subsidiary), multiplied by (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of Holdings and its Subsidiaries,
expressed as a decimal and (f) all interest on any Indebtedness of the type
described in clause (f) or (k) of the definition of “Indebtedness” with respect
to Holdings or any of its Subsidiaries.  Notwithstanding the foregoing, to the
extent that results from any of the months set forth below are included in any
applicable test period, “Consolidated Interest Expense” for such months shall be
deemed equal to the amounts set forth below:

 

August 2004

 

$

1,100,000

 

September 2004

 

$

1,200,000

 

October 2004

 

$

1,200,000

 

November 2004

 

$

1,100,000

 

December 2004

 

$

900,000

 

January 2005

 

$

700,000

 

February 2005

 

$

700,000

 

March 2005

 

$

800,000

 

April 2005

 

$

800,000

 

May 2005

 

$

900,000

 

June 2005

 

$

1,000,000

 

July 2005

 

$

1,000,000

 

 

“Consolidated Net Income” shall mean, for any period, the consolidated net
income of Holdings and its Consolidated Subsidiaries determined in accordance
with GAAP, but excluding in any event (a) after-tax extraordinary gains or
extraordinary losses; (b) after-tax gains or losses realized from (i) the
acquisition of any securities, or the extinguishment or conversion of any
Indebtedness or Equity Interest, of Holdings or any of its Subsidiaries or
(ii) any sales of assets (other than Inventory in the ordinary course of
business); (c) net earnings or loss of any other Person (other than a Subsidiary
of Holdings) in which Holdings or any Consolidated Subsidiary has an ownership
interest, except (in the case of any such net earnings) to the extent such net
earnings shall have actually been received by Holdings or such Consolidated
Subsidiary (subject to the limitation in clause (d) below) in the form of cash
dividends or distributions; (d) the net income of any Consolidated Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by such Consolidated Subsidiary of its net income is not at the time of
determination permitted without approval under applicable law or regulation or
under such Consolidated Subsidiary’s organizational documents or any agreement
or instrument applicable to such Consolidated Subsidiary or its stockholders;
(e) gains or losses from the cumulative effect of any change in accounting
principles; (f) earnings resulting from any reappraisal, revaluation or write-up
of assets; and (g) the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary of Holdings or any Consolidated Subsidiary or is merged
into or

 

10

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

 

consolidated with Holdings or any Consolidated Subsidiary or that Person’s
assets are acquired by Holdings or such Consolidated Subsidiary (other than
pursuant to the Acquisition).

 

“Consolidated Subsidiary” shall mean, as to any Person, all Subsidiaries of such
Person which are consolidated with such Person for financial reporting purposes
in accordance with GAAP.

 

“Contested Collateral Lien Conditions” shall mean, with respect to any Permitted
Lien of the type described in paragraphs (a), (b) and (f) of Section 6.02, the
following conditions:

 

(a)           the applicable Loan Party shall be contesting such Lien in good
faith;

 

(b)           to the extent such Lien is in an amount in excess of $100,000, in
the aggregate with all other such Liens, the Administrative Agent and Collateral
Agent shall have established a Reserve (to the extent of such Lien on Accounts
or Inventory) with respect thereto or obtained a bond in an amount sufficient to
pay and discharge such Lien and the Administrative Agent’s or Collateral Agent’s
reasonable estimate of all interest and penalties related thereto; and

 

(c)           such Lien shall in all respects be subject and subordinate in
priority to the Lien and security interest created and evidenced by the Security
Documents, except if and to the extent that the law or regulation creating,
permitting or authorizing such Lien provides that such Lien is or must be
superior to the Lien and security interest created and evidenced by the Security
Documents.

 

“Contingent Obligation” shall mean, as to any Person, any obligation, agreement,
understanding or arrangement of such Person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (a) to purchase any such primary obligation
or any Property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or to maintain the net worth or solvency of the primary obligor; (c) to
purchase Property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation; (d) with respect to bankers’
acceptances and letters of credit, until a reimbursement obligation arises; or
(e) otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term “Contingent
Obligation” shall not include endorsements of instruments for deposit or
collection in the ordinary course of business or any product warranties for
deposit or collection in the ordinary course of business.  The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable, whether severally or jointly,
pursuant to the terms of the instrument evidencing such Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.

 

11

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“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms “Controlling” and “Controlled” shall have meanings correlative thereto.

 

“Cost” shall mean, as determined by the Administrative Agent and the Collateral
Agent in good faith, with respect to Inventory, the lower of (a) landed cost
computed on a first-in first-out basis in accordance with GAAP or (b) market
value; provided, that for purposes of the calculation of the Borrowing Base,
(i) the Cost of the Inventory shall not include: (A) the portion of the cost of
Inventory equal to the profit earned by any Affiliate on the sale thereof to a
Borrower or (B) write-ups or write-downs in cost with respect to currency
exchange rates, and (ii) notwithstanding anything to the contrary contained
herein, the cost of the Inventory shall be computed in the same manner and
consistent with the most recent Inventory Appraisal which has been received and
approved by the Administrative Agent and the Collateral Agent in its reasonable
discretion.

 

“Co-Documentation Agents” shall have the meaning assigned to such term in the
preamble hereto.

 

“Co-Syndication Agent” shall have the meaning assigned to such term in the
preamble hereto.

 

“Credit Extension” shall mean, as the context may require, (i) the making of a
Loan by a Lender or (ii) the issuance of any Letter of Credit, or the amendment,
extension or renewal of any existing Letter of Credit, by the Issuing Bank;
provided that “Credit Extensions” shall not include conversions and
continuations of outstanding Loans.

 

“Current Derivative Exposure” shall mean, as of any date of determination, 100%
of the aggregate mark-to-market exposure then owing by any Borrower under Lender
Hedging Agreements, determined by all Lenders that are counterparties to each
Lender Hedging Agreement, in good faith and in a commercially reasonable manner,
based on net termination values and calculated as if such Lender Hedging
Agreements were terminated as of such determination date and a payment were due
thereunder to the Lender or its Affiliates and furnished to the Administrative
Agent and the Collateral Agent on a bi-monthly basis (or more frequently, in the
commercially reasonable discretion of the Administrative Agent and the
Collateral Agent).

 

“D 56” shall have the meaning assigned to such term in the preamble hereto.

 

“Debt Issuance” shall mean the incurrence by Holdings, a Borrower or any of
their Subsidiaries of any Indebtedness after the Closing Date (other than as
permitted by Section 6.01).

 

“Default” shall mean any event, occurrence or condition which is, or upon
notice, lapse of time or both would constitute, an Event of Default.

 

“Deposit Account Control Agreement” shall have the meaning assigned to such term
in the Security Agreement.

 

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“Disqualified Capital Stock” shall mean any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Final Maturity Date, (b) is convertible
into or exchangeable (unless at the sole option of the issuer thereof) for
(i) debt securities or (ii) any Equity Interests referred to in (a) above, in
each case at any time prior to the first anniversary of the Final Maturity Date,
or (c) contains any repurchase obligation which may come into effect prior to
payment in full of all Obligations.

 

“Dividend” with respect to any Person shall mean that such Person has declared
or paid a dividend or returned any equity capital to its stockholders or
authorized or made any other distribution, payment or delivery of Property
(other than common stock of such Person) or cash to its stockholders as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock outstanding (or any
options or warrants issued by such Person with respect to its capital stock), or
set aside any funds for any of the foregoing purposes, or shall have permitted
any of its Subsidiaries to purchase or otherwise acquire for a consideration any
shares of any class of the capital stock of such Person outstanding (or any
options or warrants issued by such Person with respect to its capital stock). 
Without limiting the foregoing, “Dividends” with respect to any Person shall
also include all payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.

 

“Documents” shall mean all “documents,” as such term is defined in the UCC as in
effect on the date hereof in the State of New York, in which any Person now or
hereafter has rights.

 

“Dollars” or “$” shall mean lawful money of the United States.

 

“Eligible Accounts” shall have the meaning assigned to such term in
Section 2.19(a).

 

“Eligible In-Transit Inventory” shall mean, as of any date of determination,
without duplication of other Eligible Inventory, Inventory (a) which has been
shipped from any location for receipt by a Borrower within sixty (60) days of
the date of determination, but which has not yet been received by a Borrower,
(b) for which the purchase order is in the name of, and title has passed to, a
Borrower, (c) which is fully insured on terms satisfactory to the Administrative
Agent and the Collateral Agent and has been fully paid for or is subject to
payment terms which are not overdue, (d) which is subject to a first priority
Lien in favor of the Administrative Agent (except for any possessory lien upon
such goods in the possession of a freight carrier or shipping company securing
only the freight charges for the transportation of such goods to Borrowers),
(e) as to which the Administrative Agent (or an agent acting on its behalf
pursuant to a customs broker agreement in form and substance satisfactory to the
Administrative Agent and the Collateral Agent) has control over the Documents
which evidence ownership of the subject Inventory, and (f) which otherwise is
not excluded from the definition of Eligible Inventory.

 

“Eligible Inventory” shall have the meaning assigned to such term in
Section 2.19(b).

 

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“Embargoed Person” shall have the meaning assigned to such term in Section 6.19.

 

“Environment” shall mean ambient air, surface water and groundwater (including,
without limitation, potable water, navigable water and wetlands), the land
surface or subsurface strata, natural resources, the workplace or as otherwise
defined in any Environmental Law.

 

“Environmental Claim” shall mean any claim, notice, demand, order, action, suit,
proceeding or other communication in each case alleging liability for
investigation, remediation, removal, cleanup, response, corrective action,
damages to natural resources, personal injury, Property damage, fines, penalties
or other costs resulting from, related to or arising out of (i) the presence,
Release or threatened Release in or into the Environment of Hazardous Material
at any location or (ii) any violation of Environmental Law, and shall include,
without limitation, any claim seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from, related to or
arising out of the presence, Release or threatened Release of Hazardous Material
or alleged injury or threat of injury to health, safety, the Environment.

 

“Environmental Law” shall mean any and all applicable present and future
treaties, laws, statutes, ordinances, regulations, rules, decrees, orders,
judgments, consent orders, consent decrees or other binding requirements, and
the common law, relating to protection of public health or the Environment, the
Release or threatened Release of Hazardous Material, natural resources or
natural resource damages, or occupational safety or health.

 

“Environmental Permit” shall mean any permit, license, approval, consent or
other authorization required by or from a Governmental Authority under
Environmental Law.

 

“Equity Interest” shall mean, with respect to any Person, any and all shares,
interests, participations or other equivalents, including membership interests
(however designated, whether voting or non-voting), of equity of such Person,
including, if such Person is a partnership, partnership interests (whether
general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the Closing Date, but excluding debt securities
convertible or exchangeable into such equity.

 

“Equity Issuance” shall mean, without duplication, any issuance or sale by
Holdings or a Borrower (other than to Holdings) after the Closing Date of
(a) any Equity Interests (including any Equity Interests issued upon exercise of
any warrant or option) or any warrants or options to purchase Equity Interests
or (b) any other security or instrument representing an Equity Interest (or the
right to obtain any Equity Interest) in the issuing or selling Person; provided,
however, that an Equity Issuance shall not include any such sale or issuance by
Holdings of not more than an aggregate amount of 5.0% of the shares of its
capital stock (including capital stock issued upon exercise of any warrant or
option or warrants or options to purchase its capital stock but excluding
Disqualified Capital Stock), in each case, to directors, officers or employees
of any Company.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.

 

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“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with a Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

 

“ERISA Event” shall mean (a) any “reportable event,” as such term is defined in
Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a
Plan (other than an event for which the 30-day notice period is waived by
regulation); (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived, the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any Plan or the
failure to make any required contribution to a Multiemployer Plan; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by any Company or any of its ERISA Affiliates from the PBGC or a
plan administrator of any notice relating to the intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan, or the occurrence of
any event or condition which could reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (f) the incurrence by any Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by any Company or its ERISA Affiliates of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the making of any
amendment to any Plan which could result in the imposition of a lien or the
posting of a bond or other security; and (i) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could result in liability to any Company.

 

“Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Revolving
Loans.

 

“Eurodollar Revolving Borrowing” shall mean a Borrowing comprised of Eurodollar
Revolving Loans.

 

“Eurodollar Revolving Loan” shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.

 

“Event of Default” shall have the meaning assigned to such term in Article VIII.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of Borrowers hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States, or by the
jurisdiction under the laws of which such recipient

 

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is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, and (b) in the case
of a Foreign Lender (other than an assignee pursuant to a request by a Borrower
under Section 2.16), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender’s failure to comply with Section 2.15(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from such Borrower with respect to such withholding tax pursuant to
Section 2.15(a) (it being understood and agreed, for the avoidance of doubt,
that any withholding tax imposed on a Foreign Lender as a result of a Change in
Law or regulation or interpretation thereof occurring after the time such
Foreign Lender became a party to this Agreement shall not be an Excluded Tax).

 

“Executive Order” shall have the meaning assigned to such term in Section 3.21.

 

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.

 

“Fee Letter” shall mean the confidential Fee Letter, dated July 21, 2005, among
Holdings, UBS Loan Finance LLC and UBS Securities LLC.

 

“Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the
Collateral Agent Fees, the LC Participation Fees and the Fronting Fees.

 

“Final Maturity Date” shall mean September 1, 2010.

 

“Financial Officer” of any Person shall mean the Chief Financial Officer,
principal accounting officer, Treasurer or Controller of such Person.

 

“FIRREA” shall mean the Federal Institutions Reform, Recovery and Enforcement
Act of 1989.

 

“Foreign Lender” shall mean any Lender that is not, for United States federal
income tax purposes, (i) a citizen or resident of the United States, (ii) a
corporation or entity treated as a corporation created or organized in or under
the laws of the United States, or any political subdivision thereof, (iii) an
estate the income of which is subject to U.S. federal income taxation regardless
of its source or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust and one or
more United States Persons have the authority to control all substantial
decisions of such trust.

 

“Foreign Plan” shall mean any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by any Company with
respect to employees employed outside the United States.

 

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“Foreign Subsidiary” shall mean a Subsidiary that is organized under the laws of
a jurisdiction other than the United States or any state thereof or the District
of Columbia.

 

“Fronting Fees” shall have the meaning assigned to such term in Section 2.05(c).

 

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis.

 

“Governmental Authority” shall mean any federal, state, local or foreign court,
central bank or governmental agency, authority, instrumentality or regulatory
body.

 

“Governmental Real Property Disclosure Requirements” shall mean any Requirement
of Law of any Governmental Authority requiring notification of the buyer,
lessee, mortgagee, assignee or other transferee of any Real Property, facility,
establishment or business, or notification, registration or filing to or with
any Governmental Authority, in connection with the sale, lease, mortgage,
assignment or other transfer (including, without limitation, any transfer of
control) of any Real Property, facility, establishment or business, of the
actual or threatened presence or Release in or into the Environment, or the use,
disposal or handling of Hazardous Material on, at, under or near the Real
Property, facility, establishment or business to be sold, leased, mortgaged,
assigned or transferred.

 

“Guaranteed Obligations” shall have the meaning assigned to such term in
Section 7.01.

 

“Guarantees” shall mean the guarantees issued pursuant to Article VII by
Holdings and the Subsidiary Guarantors.

 

“Guarantors” shall mean Holdings and the Subsidiary Guarantors.

 

“Hazardous Materials” shall mean the following:  hazardous substances; hazardous
wastes; polychlorinated biphenyls (“PCBs”) or any substance or compound
containing PCBs; asbestos or any asbestos-containing materials in any form or
condition; radon or any other radioactive materials including any source,
special nuclear or by-product material; petroleum, crude oil or any fraction
thereof; and any other pollutant or contaminant or hazardous, toxic or dangerous
chemicals, wastes, materials, compounds, constituents or substances, as all such
terms are used in their broadest sense and defined by or under any Environmental
Laws.

 

“Hedging Agreement” shall mean any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement,
entered into for the purpose of hedging a Borrower’s exposure to interest or
exchange rates, loan credit exchange, security or currency valuations or
commodity prices and not for speculative purposes.

 

“Holdings” shall have the meaning assigned to such term in the preamble hereto.

 

“Inactive Subsidiaries” shall mean each of Axis Holdings Corporation, TD56
Holdings, Inc., Department 56 Trading Co., Ltd., D56 Canada Holding, Inc.,
Department 56 Minnesota, LLC, BrowndaleTanley Limited, Department 56 Canada Co.
and Samuel Kirk & Son, Inc.

 

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“Indebtedness” of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or advances; (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments;
(c) all obligations of such Person upon which interest charges are customarily
paid or accrued; (d) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such Person;
(e) all obligations of such Person issued or assumed as the deferred purchase
price of Property or services (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business on normal trade terms
and not overdue by more than 90 days); (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on Property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed;
(g) all Capital Lease Obligations, Purchase Money Obligations and synthetic
lease obligations of such Person; (h) all obligations of such Person in respect
of Hedging Agreements to the extent required to be reflected on a balance sheet
of such Person; (i) all Attributable Indebtedness of such Person; (j) all
obligations for the reimbursement of any obligor in respect of letters of
credit, letters of guaranty, bankers’ acceptances and similar credit
transactions; and (k) all Contingent Obligations of such Person in respect of
Indebtedness or obligations of others of the kinds referred to in clauses
(a) through (j) above.  The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent that terms of such Indebtedness provide that such Person is
liable therefor.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Indemnitee” shall have the meaning assigned to such term in Section 11.03(b).

 

“Information” shall have the meaning assigned to such term in Section 11.12.

 

“Instruments” shall mean all “instruments,” as such term is defined in the UCC
as in effect on the date hereof in the State of New York, in which any Person
now or hereafter has rights.

 

“Intellectual Property” shall have the meaning assigned to such term in
Section 3.05(c).

 

“Intercreditor Agreement” shall mean that certain Intercreditor Agreement dated
September 1, 2005, by and between Holdings, Borrowers, Guarantors, the
Administrative Agent and the Term Loan Agent.

 

“Interest Election Request” shall mean a request by a Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.08(b), substantially
in the form of Exhibit D.

 

“Interest Payment Date” shall mean (a) with respect to any ABR Revolving Loan
(other than a Swingline Loan), the last day of each March, June, September and
December to occur during the period that such Loan is outstanding and the Final
Maturity Date of such Loan, (b) with respect to any Eurodollar Revolving Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurodollar Revolving Loan with an Interest
Period of more than three months’ duration, each day prior to the last day of
such

 

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Interest Period that occurs at intervals of three months duration after the
first day of such Interest Period, and (c) with respect to any Swingline Loan,
the day that such Loan is required to be repaid.

 

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as a Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing; provided, however, that an Interest Period shall be limited to seven
days to the extent required under Section 2.03(d).

 

“Inventory” shall mean all “inventory,” as such term is defined in the UCC as in
effect on the date hereof in the State of New York, wherever located, in which
any Person now or hereafter has rights.

 

“Inventory Appraisal” shall mean (a) on the Closing Date, the appraisals
prepared by Hilco Appraisal Services, LLC, dated June 21, 2005 with respect to
Inventory of D56 and dated June 26, 2005 with respect to Inventory of Lenox, and
(b) thereafter, the most recent inventory appraisal conducted by an independent
appraisal firm and delivered pursuant to Section 5.15 hereof.

 

“Investments” shall have the meaning assigned to such term in Section 6.04.

 

“Issuing Bank” shall mean, as the context may require, (a) UBS AG, Stamford
Branch, with respect to Letters of Credit issued by it; (b) JPMorgan Chase Bank,
N.A. (including as successor by merger to Bank One, NA) with respect to Letters
of Credit issued by it; or (c) any other Lender that may become an Issuing Bank
pursuant to Section 2.18(i) or 2.18(k), with respect to Letters of Credit issued
by such Lender; or (c) collectively, all of the foregoing.

 

“Joinder Agreement” shall mean that certain joinder agreement substantially in
the form of Exhibit E.

 

“Landlord Lien Waiver and Access Agreement” shall mean the Landlord Lien Waiver
and Access Agreement, substantially in the form of Exhibit F, or such other
landlord lien waiver and access agreement reasonably satisfactory in form and
substance to the Administrative Agent and the Collateral Agent.

 

“LC Collateral Account” shall mean a collateral account in the form of a deposit
account established and maintained by the Administrative Agent for the benefit
of the Secured Parties, in accordance with the provisions of Section 9.01.

 

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“LC Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.18.

 

“LC Disbursement” shall mean a payment or disbursement made by the Issuing Bank
pursuant to a Letter of Credit.

 

“LC Exposure” shall mean at any time the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all LC Disbursements that have not yet been reimbursed at
such time.  The LC Exposure of any Revolving Lender at any time shall mean its
Pro Rata Percentage of the aggregate LC Exposure at such time.

 

“LC Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

 

“LC Request” shall mean a request by a Borrower in accordance with the terms of
Section 2.18(b) and substantially in the form of Exhibit A-3, or such other form
as shall be approved by the Administrative Agent.

 

“Leases” shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, access
agreements and any other agreements of a similar nature (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.

 

“Lender Addendum” shall mean with respect to any Lender on the Closing Date, a
lender addendum in the form of Exhibit A-4¸ to be executed and delivered by such
Lender on the Closing Date as provided in Section 11.14.

 

“Lender Affiliate” shall mean with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in commercial loans and is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such advisor.

 

“Lender Hedging Agreement” shall mean any Hedging Agreement between a Borrower
and any Person (or affiliate of such Person) that was a Lender or an Affiliate
of such lender at the time it entered into such Hedging Agreement whether or not
such Person has ceased to be a Lender under this Agreement.

 

“Lenders” shall mean (a) the financial institutions that have become a party
hereto pursuant to a Lender Addendum (other than any such financial institution
that has ceased to be a party hereto pursuant to an Assignment and Acceptance)
and (b) any financial institution that has become a party hereto pursuant to an
Assignment and Acceptance.  Unless the context clearly indicates otherwise, the
term “Lenders” shall include the Swingline Lender.

 

“Lenox” shall have the meaning assigned to such term in the preamble hereto.

 

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“Letter of Credit” shall mean any (i) Standby Letter of Credit and
(ii) Commercial Letter of Credit, in each case, issued or to be issued by an
Issuing Bank for the account of a Borrower pursuant to Section 2.18.

 

“Letter of Credit Expiration Date” shall mean the date which is fifteen (15)
days prior to the Revolving Maturity Date.

 

“Leverage Ratio” shall mean, at any date of determination, the ratio of
Consolidated Indebtedness (but specifically excluding the guaranties referenced
in Section 6.01(k))on such date to Consolidated EBITDA for the Test Period then
most recently ended.

 

“LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period therefor, the rate per annum determined by the Administrative
Agent to be the arithmetic mean (rounded to the nearest 1/100 of 1%) of the
offered rates for deposits in Dollars with a term comparable to such Interest
Period that appears on the Telerate British Bankers Assoc. Interest Settlement
Rates Page (as defined below) at approximately 11:00 a.m., London, England time,
on the second full Business Day preceding the first day of such Interest Period;
provided, however, that (i) if no comparable term for an Interest Period is
available, the LIBOR Rate shall be determined using the weighted average of the
offered rates for the two terms most nearly corresponding to such Interest
Period and (ii) if there shall at any time no longer exist a Telerate British
Bankers Assoc. Interest Settlement Rates Page, “LIBOR Rate” shall mean, with
respect to each day during each Interest Period pertaining to Eurodollar
Borrowings comprising part of the same Borrowing, the rate per annum equal to
the rate at which the Administrative Agent is offered deposits in Dollars at
approximately 11:00 a.m., London, England time, two Business Days prior to the
first day of such Interest Period in the London interbank market for delivery on
the first day of such Interest Period for the number of days comprised therein
and in an amount comparable to its portion of the amount of such Eurodollar
Borrowing to be outstanding during such Interest Period.  “Telerate British
Bankers Assoc. Interest Settlement Rates Page” shall mean the display designated
as Page 3750 on the Telerate System Incorporated Service (or such other page as
may replace such page on such service for the purpose of displaying the rates at
which Dollar deposits are offered by leading banks in the London interbank
deposit market).

 

“Lien” shall mean, with respect to any Property, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, claim, charge, assignment, hypothecation,
security interest or encumbrance of any kind, any other type of preferential
arrangement in respect of such Property or any filing of any financing statement
under the UCC or any other similar notice of Lien under any similar notice or
recording statute of any Governmental Authority, including any easement,
right-of-way or other encumbrance on title to Real Property, in each of the
foregoing cases whether voluntary or imposed by law, and any agreement to give
any of the foregoing; (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such Property; and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

 

“Loan Documents” shall mean this Agreement, any Borrowing Base Certificate, the
Letters of Credit, the Notes (if any), the Security Documents, the Fee Letter
(except for the

 

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provisions thereof governing payment of fees to the Term Loan Agents), the
Intercreditor Agreement and each Lender Hedging Agreement.

 

“Loan Parties” shall mean Holdings, Borrowers and the Subsidiary Guarantors.

 

“Loans” shall mean advances made to or at the instructions of a Borrower
pursuant to Article II hereof and may constitute a Revolving Loan or a Swingline
Loan.

 

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

 

“Material Adverse Effect” shall mean (a) a material adverse effect on the
business, Property, results of operations, prospects or condition, financial or
otherwise, or material agreements of Borrowers and their Subsidiaries, taken as
a whole; (b) material impairment of the ability of the Loan Parties to fully and
timely perform any of their obligations under any Loan Document; (c) material
impairment of the rights of or benefits or remedies available to the Lenders,
the Administrative Agent or the Collateral Agent under any Loan Document; or
(d) a material adverse effect on the Collateral or the Liens in favor of the
Administrative Agent (for its benefit and for the benefit of the other Secured
Parties) on the Collateral or the priority of such Liens.

 

“Material Indebtedness” shall mean (a) the Term Loan Indebtedness and (b) any
other Indebtedness (other than the Loans and Letters of Credit), or obligations
in respect of one or more Hedging Agreements, of any Loan Party evidencing an
aggregate outstanding principal amount exceeding $3.0 million.  For purposes of
determining Material Indebtedness, the “principal amount” of the obligations of
such Loan Party in respect of any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that such
Loan Party would be required to pay if such Hedging Agreement were terminated at
such time.

 

“Maximum Rate” shall have the meaning assigned to such term in Section 11.13.

 

“Mortgage” shall mean an agreement, including, but not limited to, a mortgage,
deed of trust or any other document, creating and evidencing a Lien on a
Mortgaged Real Property, which shall be in substantially in the form of
Exhibit G, with such schedules and including such provisions as shall be
necessary to conform such document to applicable local law or as shall be
customary under applicable local law.

 

“Mortgaged Real Property” shall mean (a) each Real Property identified on
Schedule 1.01(a) hereto and (b) each Real Property, if any, which shall be
subject to a Mortgage delivered after the Closing Date pursuant to
Section 5.11(d).

 

“Multiemployer Plan” shall mean a multiemployer plan within the meaning of
Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any Company or any
ERISA Affiliate is then making or accruing an obligation to make contributions;
(b) to which any Company or any ERISA Affiliate has within the preceding five
plan years made contributions; or (c) with respect to which any Company could
incur liability.

 

“Net Cash Proceeds” shall mean:

 

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(E)           WITH RESPECT TO ANY ASSET SALE, THE CASH PROCEEDS RECEIVED BY ANY
LOAN PARTY (INCLUDING CASH PROCEEDS SUBSEQUENTLY RECEIVED (AS AND WHEN RECEIVED
BY ANY LOAN PARTY) IN RESPECT OF NONCASH CONSIDERATION INITIALLY RECEIVED) NET
OF (I) SELLING EXPENSES (INCLUDING REASONABLE BROKERS’ FEES OR COMMISSIONS,
LEGAL, ACCOUNTING AND OTHER PROFESSIONAL AND TRANSACTIONAL FEES, TRANSFER AND
SIMILAR TAXES AND THE LOAN PARTIES’ GOOD FAITH ESTIMATE OF INCOME TAXES PAID OR
PAYABLE IN CONNECTION WITH SUCH SALE); (II) AMOUNTS PROVIDED AS A RESERVE, IN
ACCORDANCE WITH GAAP, AGAINST ANY LIABILITIES UNDER ANY INDEMNIFICATION
OBLIGATIONS ASSOCIATED WITH SUCH ASSET SALE (PROVIDED THAT, TO THE EXTENT AND AT
THE TIME ANY SUCH AMOUNTS ARE RELEASED FROM SUCH RESERVE, SUCH AMOUNTS SHALL
CONSTITUTE NET CASH PROCEEDS); (III) THE LOAN PARTIES’ GOOD FAITH ESTIMATE OF
PAYMENTS REQUIRED TO BE MADE WITH RESPECT TO UNASSUMED LIABILITIES RELATING TO
THE ASSETS SOLD WITHIN 90 DAYS OF SUCH ASSET SALE (PROVIDED THAT, TO THE EXTENT
SUCH CASH PROCEEDS ARE NOT USED TO MAKE PAYMENTS IN RESPECT OF SUCH UNASSUMED
LIABILITIES WITHIN 90 DAYS OF SUCH ASSET SALE, SUCH CASH PROCEEDS SHALL
CONSTITUTE NET CASH PROCEEDS); AND (IV) THE PRINCIPAL AMOUNT, PREMIUM OR
PENALTY, IF ANY, INTEREST AND OTHER AMOUNTS ON ANY INDEBTEDNESS FOR BORROWED
MONEY WHICH IS SECURED BY A SENIOR LIEN ON THE ASSET SOLD IN SUCH ASSET SALE AND
WHICH IS REPAID WITH SUCH PROCEEDS (OTHER THAN ANY SUCH INDEBTEDNESS ASSUMED BY
THE PURCHASER OF SUCH ASSET);

 

(F)            WITH RESPECT TO ANY DEBT ISSUANCE OR EQUITY ISSUANCE, THE CASH
PROCEEDS THEREOF, NET OF CUSTOMARY FEES, COMMISSIONS, COSTS AND OTHER EXPENSES
INCURRED IN CONNECTION THEREWITH; AND

 

(G)           WITH RESPECT TO ANY CASUALTY EVENT, THE CASH INSURANCE PROCEEDS,
CONDEMNATION AWARDS AND OTHER COMPENSATION RECEIVED IN RESPECT THEREOF, NET OF
ALL REASONABLE COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE COLLECTION OF
SUCH PROCEEDS, AWARDS OR OTHER COMPENSATION IN RESPECT OF SUCH CASUALTY EVENT.

 

“Net Current Assets” shall mean current assets (other than cash, cash
equivalents and tax-related current assets) of the Acquired Business as of the
Closing Date, minus current liabilities (other than tax-related current
liabilities) of the Acquired Business as of the Closing Date.

 

“Net Recovery Cost Percentage” shall mean the fraction, expressed as a
percentage, (a) the numerator of which is the amount equal to the recovery on
the aggregate amount of the Inventory at such time on a “net orderly liquidation
value” basis as set forth in the most recent Inventory Appraisal received by the
Administrative Agent and the Collateral Agent in accordance with Section 5.15,
net of operating expenses, liquidation expenses and commissions reasonably
anticipated in the disposition of such assets, and (b) the denominator of which
is the original Cost of the aggregate amount of the Eligible Inventory subject
to appraisal.

 

“Non-Swept Accounts” shall have the meaning assigned to such term in
Section 2.04(f) hereto.

 

“Notes” shall mean any notes evidencing the Revolving Loans or Swingline Loans
issued pursuant to this Agreement, if any, substantially in the form of
Exhibit H-1 or H-2, as the case may be.

 

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“Obligations” shall mean (a) obligations of Borrowers and any and all of the
other Loan Parties from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by Borrowers and any and all of
the other Loan Parties under this Agreement in respect of any Letter of Credit,
when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of Borrowers and any and all of the
other Loan Parties under this Agreement and the other Loan Documents, (b) the
due and punctual performance of all covenants, agreements, obligations and
liabilities of Borrowers and each Loan Party under or pursuant to this Agreement
and the other Loan Documents, (c) the due and punctual payment and performance
of all obligations of Borrowers and any and all of the other Loan Parties under
each Lender Hedging Agreement  and (d) the due and punctual payment and
performance of all obligations in respect of overdrafts and related liabilities
owed to any Lender, any Affiliate of a Lender, the Administrative Agent or the
Collateral Agent arising from treasury, depositary and cash management services
or in connection with any automated clearinghouse transfer of funds.  All
Obligations of Borrowers hereunder and each other Loan Document shall be the
joint and several obligations of each Borrower.

 

“OFAC” shall have the meaning assigned to such term in Section 3.21.

 

“Officers’ Certificate” shall mean a certificate executed by the Chairman of the
Board (if an officer), the Chief Executive Officer, the President, one of the
Financial Officers, each in his or her official (and not individual) capacity.

 

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or Property taxes, charges or similar levies
(including interest, fines, penalties and additions to tax) arising from any
payment made or required to be made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.

 

“Participant” shall have the meaning assigned to such term in Section 11.04(d).

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

 

“Perfection Certificate” shall mean a certificate in the form of Exhibit I-1 or
any other form approved by the Administrative Agent, as the same shall be
supplemented from time to time by a Perfection Certificate Supplement or
otherwise.

 

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“Perfection Certificate Supplement” shall mean a certificate supplement in the
form of Exhibit I-2 or any other form approved by the Administrative Agent.

 

“Permitted Acquisition” shall mean, with respect to Borrowers or any Subsidiary
Guarantor, any transaction or series of related transactions for the direct or
indirect (a) acquisition of all or substantially all of the Property of any
other Person, or of any business or division of any other Person;
(b) acquisition of in excess of 50% of the Equity Interests of any other Person,
or otherwise causing any other Person to become a subsidiary of such Person; or
(c) merger or consolidation or any other combination with any other Person;
provided, that, in the event of any merger or consolidation involving a
Borrower, a Borrower shall be the surviving entity, if each of the following
conditions are met:

 

(i)            no Default then exists or would result therefrom;

 

(ii)           after giving effect to such acquisition on a Pro Forma Basis,
(A) Borrowers shall be in compliance with all covenants set forth in
Section 6.08 as of the most recent Test Period (assuming, for purposes of
Section 6.08, that such acquisition, and all other Permitted Acquisitions
consummated since the first day of the relevant Test Period for each of the
financial covenants set forth in Section 6.08 ending on or prior to the date of
such acquisition, had occurred on the first day of such relevant Test Period),
and (B) the Loan Parties can reasonably be expected to remain in compliance with
such covenants through the Final Maturity Date and to have sufficient cash
liquidity to conduct their business and pay their respective debts and other
liabilities as they come due;

 

(iii)          no Company shall, in connection with any such acquisition, assume
or remain liable with respect to any Indebtedness or other liability (including
any material tax or ERISA liability) of the related seller, except (A) to the
extent permitted under Section 6.01, and (B) obligations of the seller incurred
in the ordinary course of business and necessary or desirable to the continued
operation of the underlying properties, and any other such liabilities or
obligations not permitted to be assumed or otherwise supported by any Company
hereunder shall be paid in full or released as to the assets being so acquired
on or before the consummation of such acquisition;

 

(iv)          the acquired Person shall be engaged in a business of a same or
substantially similar type as that conducted by Borrowers and the Subsidiaries
on the Closing Date and the Property acquired in connection with any such
acquisition shall be made subject to the Lien of the Security Documents and
shall be free and clear of any Liens, other than Permitted Liens;

 

(v)           the Property acquired in connection with any such acquisition
shall be made subject to the Lien of the Security Documents on terms reasonably
satisfactory to the Administrative Agent and the Collateral Agent, and shall be
free and clear of any Liens, other than Permitted Liens, and the Administrative
Agent and the Collateral Agent shall have received all opinions, certificates,
lien search results and other documents reasonably requested by the
Administrative Agent and the Collateral Agent;

 

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(vi)          at the time such Permitted Acquisition is made, (A) average
Borrowing Availability for the 30 days prior to the date that such Permitted
Acquisition closes shall be not less than $35.0 million and (B) projected
average Borrowing Availability (exclusive of any Accounts and Inventory of the
acquired Person) for the 30 days beginning on the date that such Permitted
Acquisition closes shall be not less than $35.0 million based on projections
presented by Borrowers to the Administrative Agent and reasonably satisfactory
to the Administrative Agent;

 

(vii)         the board of directors or other similar governing body of the
acquired Person shall not have indicated publicly its opposition to the
consummation of such acquisition;

 

(viii)        with respect to any acquisition involving Acquisition
Consideration of more than $1.0 million, Borrowers shall have provided the
Administrative Agent and the Lenders with (A) historical financial statements
for the last three fiscal years of the Person or business to be acquired
(audited if available without undue cost or delay) and unaudited financial
statements thereof for the most recent interim period which are available,
(B) reasonably detailed projections for the succeeding five years pertaining to
the Person or business to be acquired, (C) a reasonably detailed description of
all material information relating thereto and copies of all material
documentation pertaining to such acquisition, and (D) all such other information
and data relating to such acquisition or the Person or business to be acquired
as may be reasonably requested by the Administrative Agent or the Required
Lenders;

 

(ix)           Borrowers shall have delivered to the Administrative Agent and
the Collateral Agent and the Lenders an Officers’ Certificate certifying that
(A) such acquisition complies with this definition (which shall have attached
thereto reasonably detailed backup data and calculations showing such
compliance), and (B) such acquisition could not reasonably be expected to result
in a Material Adverse Effect; and

 

(x)            the aggregate amount of the Acquisition Consideration for all
Permitted Acquisitions during the term of this Agreement shall not exceed $30.0
million; provided that any Equity Interests constituting all or a portion of
such Acquisition Consideration shall not have a cash dividend requirement on or
prior to the Revolving Maturity Date.

 

“Permitted Liens” shall have the meaning assigned to such term in Section 6.02.

 

“Person” shall mean any natural Person, corporation, business trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.

 

“Plan” shall mean any “employee pension benefit plan” as such term is defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA which is maintained or contributed to by any Company or its ERISA
Affiliate or with respect to which any Company could incur liability (including,
without limitation, under Section 4069 of ERISA).

 

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“Preferred Stock” shall mean, with respect to any Person, any and all preferred
or preference Equity Interests (however designated) of such Person whether now
outstanding or issued after the Issue Date.

 

“Prior Lien” shall have the meaning assigned to such term in the applicable
Security Document.

 

“Pro Forma Basis” shall mean on a basis in accordance with GAAP and Regulation
S-X under the Securities Act and otherwise reasonably satisfactory to the
Administrative Agent.

 

“Property” shall mean any right, title or interest in or to property or assets
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible and including Equity Interests or other ownership interests of any
Person and whether now in existence or owned or hereafter entered into or
acquired, including, without limitation, all Real Property.

 

“Pro Rata Percentage” of any Revolving Lender at any time shall mean the
percentage of the total Revolving Commitment represented by such Lender’s
Revolving Commitment.

 

“Purchase Money Obligation” shall mean, for any Person, the obligations of such
Person in respect of Indebtedness incurred for the purpose of financing all or
any part of the purchase price of any Property (including Equity Interests of
any Person) or the cost of installation, construction or improvement of any
Property or assets and any refinancing thereof; provided, however, that such
Indebtedness is incurred within 90 days after such acquisition of such Property
by such Person.

 

“Qualified Capital Stock” of any Person shall mean any capital stock of such
Person that is not Disqualified Capital Stock.

 

“Real Property” shall mean, collectively, all right, title and interest
(including any leasehold estate) in and to any and all parcels of or interests
in real Property owned, leased or operated by any Person, whether by lease,
license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other Property and rights incidental to the ownership, lease or operation
thereof.

 

“Refinancing” shall mean the repayment in full and the termination of any
commitment to make extensions of credit under all of the outstanding
indebtedness of Holdings and Borrowers and their respective Subsidiaries listed
on Schedule 1.01(b).

 

“Register” shall have the meaning assigned to such term in Section 11.04(c).

 

“Regulation D” shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

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“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Related Parties” shall mean, with respect to any person, such person’s
Affiliates and the partners, directors, officers, employees, agents and advisors
of such person and of such person’s Affiliates.

 

“Release” shall mean any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.

 

“Required Lenders” shall mean, at any time, Lenders having at least a majority
of the Revolving Commitments or, if the Revolving Commitments have been
terminated, a majority of the sum of Revolving Exposure.

 

“Requirements of Law” shall mean, collectively, any and all requirements of any
Governmental Authority including any and all laws, ordinances, rules,
regulations or similar statutes or case law.

 

“Reserves” shall mean reserves established against the Borrowing Base that the
Administrative Agent or the Collateral Agent may, in their reasonable credit
judgment, establish from time to time.

 

“Response” shall mean (a) “response” as such term is defined in CERCLA, 42
U.S.C. § 9601(24), and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to: (i) clean up, remove, treat, abate or in
any other way address any Hazardous Material in the environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in connection
with, or as a precondition to, clause (i) or (ii) above.

 

“Responsible Officer” of any corporation shall mean any executive officer or
Financial Officer of such corporation and any other officer or similar official
thereof with responsibility for the administration of the obligations of such
corporation in respect of this Agreement.

 

“Revolving Availability Period” shall mean the period from and including the
Closing Date to but excluding the earlier of the Revolving Maturity Date and the
date of termination of the Revolving Commitments.

 

“Revolving Borrowing” shall mean a Borrowing comprised of Revolving Loans.

 

“Revolving Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make Revolving Loans hereunder up to the amount set
forth on Schedule I to the Lender Addendum executed and delivered by such
Lender, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.07 and (b) reduced or

 

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increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 11.04.  The aggregate amount of the Lenders’ Revolving
Commitments on the Closing Date is $175.0 million.

 

“Revolving Credit Priority Collateral” shall have the meaning provided to such
term in the Intercreditor Agreement.

 

“Revolving Exposure” shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Revolving Loans of
such Lender, plus the aggregate amount at such time of such Lender’s LC
Exposure, plus the aggregate amount at such of such Lender’s Swingline Exposure.

 

“Revolving Lender” shall mean a Lender with a Revolving Commitment.

 

“Revolving Loan” shall mean a Loan made by the Lenders to a Borrower pursuant to
Section 2.01(b).

 

“Revolving Maturity Date” shall mean September 1, 2010.

 

“Sarbanes-Oxley Act” shall mean the United States Sarbanes-Oxley Act of 2002, as
amended, and all rules and regulations promulgated thereunder.

 

“Secured Parties” shall mean, collectively, the Administrative Agent, the
Collateral Agent, each other Agent, the Issuing Bank, the Lenders and each party
to a Lender Hedging Agreement if at the date of entering into such Lender
Hedging Agreement such Person (if it is an Affiliate of a Lender rather than a
Lender) executes and delivers to the Administrative Agent a letter agreement in
form and substance acceptable to the Administrative Agent pursuant to which such
Person (i) appoints the Administrative Agent as its agent under the applicable
Loan Documents and (ii) agrees to be bound by the provisions of Section 9.02 and
the Security Agreement.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Security Agreement” shall mean a Security Agreement substantially in the form
of Exhibit J among the Loan Parties and the Administrative Agent for the benefit
of the Secured Parties.

 

“Security Agreement Collateral” shall mean all Property pledged or granted as
collateral pursuant to the Security Agreement delivered on the Closing Date or
thereafter pursuant to Section 5.11.

 

“Security Documents” shall mean the Security Agreement, the Mortgages, the
Perfection Certificate and each other security document or pledge agreement
delivered in accordance with applicable local or foreign law to grant a valid,
perfected security interest in any Property, and all UCC or other financing
statements or instruments of perfection required by this Agreement, the Security
Agreement or any Mortgage to be filed with respect to the security interests in
Property and fixtures created pursuant to the Security Agreement or any Mortgage

 

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and any other document or instrument utilized to pledge as collateral for the
Obligations any Property of whatever kind or nature.

 

“Seller” has the meaning assigned to such term in the first recital hereto.

 

“Specified Dated Account” shall mean an Account of a specific Account Debtor
pursuant to dating terms provided by Borrowers in the ordinary course of
business consistent with past practices where such specific Account Debtor and
dating terms are acceptable to the Administrative Agent and the Collateral
Agent.

 

“Standby Letter of Credit”  shall mean any standby letter of credit or similar
instrument issued for the purpose of supporting (a) workers’ compensation
liabilities of a Borrower or any of its Subsidiaries, (b) the obligations of
third-party insurers of a Borrower or any of its Subsidiaries arising by virtue
of the laws of any jurisdiction requiring third-party insurers to obtain such
letters of credit, or (c) performance, payment, deposit or surety obligations of
a Borrower or any of its Subsidiaries if required by law or governmental rule or
regulation or in accordance with custom and practice in the industry.

 

“Statutory Reserves” shall mean, for any Interest Period for any Eurodollar
Borrowing, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the United States Federal
Reserve System in New York City with deposits exceeding one billion dollars
against “Eurodollar liabilities” (as such term is used in Regulation D). 
Eurodollar Borrowings shall be deemed to constitute Eurodollar liabilities and
to be subject to such reserve requirements without benefit of or credit for
proration, exceptions or offsets which may be available from time to time to any
Lender under Regulation D.

 

“Subsidiary” shall mean, with respect to any Person (the “parent”) at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled or
held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more Subsidiaries of the parent or by the parent and one or more
Subsidiaries of the parent.  Unless otherwise set forth herein, reference in
this Agreement to “Subsidiary” shall mean Borrowers’ direct and indirect
Subsidiaries.

 

“Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(c),
and each other Subsidiary that is or becomes a party to this Agreement pursuant
to Section 5.11, other than a Foreign Subsidiary.

 

“Supermajority Lenders” shall mean at any time, Lenders having at least 66 2/3%
of the Revolving Commitments or, if the Revolving Commitments have been
terminated, at least 66 2/3% of the Revolving Exposure.

 

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“Survey” shall mean a survey of any Mortgaged Real Property (and all
improvements thereon) (i) prepared by a surveyor or engineer licensed to perform
surveys in the state where such Mortgaged Real Property is located, (ii) dated
(or redated) not earlier than six months prior to the date of delivery thereof
unless there shall have occurred within six months prior to such date of
delivery any exterior construction on the site of such Mortgaged Real Property,
in which event such survey shall be dated (or redated) after the completion of
such construction or if such construction shall not have been completed as of
such date of delivery, not earlier than 20 days prior to such date of delivery,
(iii) certified by the surveyor (in a manner reasonably acceptable to the
Administrative Agent) to the Administrative Agent, the Collateral Agent and the
Title Company, (iv) complying in all respects with the minimum detail
requirements of the American Land Title Association as such requirements are in
effect on the date of preparation of such survey and (v) sufficient for the
Title Company to remove all standard survey exceptions from the title insurance
policy (or commitment) relating to such Mortgaged Real Property and issue the
endorsements of the type required by Section 4.01(o)(iii).

 

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
loans pursuant to Section 2.17, as the same may be reduced from time to time
pursuant to Section 2.07 or Section 2.17.

 

“Swingline Exposure” shall mean at any time the aggregate principal amount at
such time of all outstanding Swingline Loans.  The Swingline Exposure of any
Revolving Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.

 

“Swingline Lender” shall have the meaning assigned to such term in the preamble
hereto.

 

“Swingline Loan” shall mean any Loan made by the Swingline Lender pursuant to
Section 2.17.

 

“Tax Return” shall mean all returns, statements, filings, attachments and other
documents or certifications required to be filed in respect of Taxes.

 

“Taxes” shall mean (i) any and all present or future taxes, duties, levies,
fees, imposts, assessments, deductions, withholdings or other charges, whether
computed on a separate, consolidated, unitary, combined or other basis and any
and all liabilities (including interest, fines, penalties or additions to tax)
with respect to the foregoing, and (ii) any transferee, successor, joint and
several, contractual or other liability (including, without limitation,
liability pursuant to Treasury Regulation §1.1502-6 (or any similar provision of
state, local or non-U.S. law)) in respect of any item described in clause (i).

 

“Term Loan Agent” shall mean the Administrative Agent as such term is defined in
the Term Loan Agreement.

 

“Term Loan Agreement” shall mean that certain Term Loan Agreement dated as of
September 1, 2005 by and among Borrowers, Holdings, Guarantors, the lenders
party thereto, UBS Securities, LLC, as sole arranger and syndication agent and
UBS AG, Stamford Branch, as administrative agent and collateral agent.

 

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“Term Loan Documents” shall mean the Loan Documents, as such term is defined in
the Term Loan Agreement.

 

“Term Loan Indebtedness” shall mean all Indebtedness and other obligations of
the Loan Parties under the Term Loan Documents.

 

“Term Loan Priority Collateral” shall have the meaning provided to such term in
the Intercreditor Agreement.

 

“Test Period” shall mean, at any time, the four consecutive fiscal quarters of
Holdings then last ended (in each case taken as one accounting period).

 

“Title Company” shall mean any title insurance company as shall be retained by a
Borrower and reasonably acceptable to the Administrative Agent.

 

“Title Policy” shall have the meaning assigned to such term in Section 4.01(o).

 

“Transaction Documents” shall mean the Acquisition Documents, the Loan Documents
and the Term Loan Documents.

 

“Transactions” shall mean, collectively, the transactions to occur on or prior
to the Closing Date pursuant to the Transaction Documents, including (a) the
consummation of the Acquisition; (b) the execution and delivery of the Loan
Documents and the initial borrowings hereunder; (c) the execution and delivery
of the Term Loan Documents and the incurrence of the Term Loan Indebtedness
thereunder; (d) the Refinancing; and (e) the payment of all fees and expenses to
be paid on or prior to the Closing Date and owing in connection with the
foregoing.

 

“Treasury Regulation” means the regulations promulgated under the Code.

 

“Type,” when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBOR Rate or the Alternate Base Rate.

 

“UCC” shall mean the Uniform Commercial Code as in effect in the applicable
state or jurisdiction.

 

“Voting Stock” shall mean any class or classes of capital stock of Holdings
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors of
Holdings.

 

“Wholly Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100%
of whose capital stock (other than directors’ qualifying shares) is at the time
owned by such Person and/or one or more Wholly Owned Subsidiaries of such Person
and (b) any partnership, association, joint venture, limited liability company
or other entity in which such Person and/or one or more Wholly Owned
Subsidiaries of such Person have a 100% equity interest at such time.

 

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“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02  CLASSIFICATION OF LOANS AND BORROWINGS.  FOR PURPOSES OF THIS
AGREEMENT, LOANS MAY BE CLASSIFIED AND REFERRED TO BY CLASS (E.G., A “REVOLVING
LOAN”) OR BY TYPE (E.G., A “EURODOLLAR LOAN”) OR BY CLASS AND TYPE (E.G., A
“EURODOLLAR REVOLVING LOAN”).  BORROWINGS ALSO MAY BE CLASSIFIED AND REFERRED TO
BY CLASS (E.G., A “REVOLVING BORROWING”) OR BY TYPE (E.G., A “EURODOLLAR
BORROWING”) OR BY CLASS AND TYPE (E.G., A “EURODOLLAR REVOLVING BORROWING”).

 

SECTION 1.03  TERMS GENERALLY.  THE DEFINITIONS OF TERMS HEREIN SHALL APPLY
EQUALLY TO THE SINGULAR AND PLURAL FORMS OF THE TERMS DEFINED.  WHENEVER THE
CONTEXT MAY REQUIRE, ANY PRONOUN SHALL INCLUDE THE CORRESPONDING MASCULINE,
FEMININE AND NEUTER FORMS.  THE WORDS “INCLUDE”, “INCLUDES” AND “INCLUDING”
SHALL BE DEEMED TO BE FOLLOWED BY THE PHRASE “WITHOUT LIMITATION”.  THE WORD
“WILL” SHALL BE CONSTRUED TO HAVE THE SAME MEANING AND EFFECT AS THE WORD
“SHALL”.  UNLESS THE CONTEXT REQUIRES OTHERWISE (A) ANY DEFINITION OF OR
REFERENCE TO ANY LOAN DOCUMENT, AGREEMENT, INSTRUMENT OF OTHER DOCUMENT HEREIN
SHALL BE CONSTRUED AS REFERRING TO SUCH AGREEMENT, INSTRUMENT OR OTHER DOCUMENT
AS FROM TIME TO TIME AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED (SUBJECT TO ANY
RESTRICTIONS ON SUCH AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS SET FORTH HEREIN),
(B) ANY REFERENCE HEREIN TO ANY PERSON SHALL BE CONSTRUED TO INCLUDE SUCH
PERSON’S SUCCESSORS AND ASSIGNS, (C) THE WORDS “HEREIN”, “HEREOF” AND
“HEREUNDER”, AND WORDS OF SIMILAR IMPORT, SHALL BE CONSTRUED TO REFER TO THIS
AGREEMENT IN ITS ENTIRETY AND NOT TO ANY PARTICULAR PROVISION HEREOF, (D) ALL
REFERENCES HEREIN TO ARTICLES, SECTIONS, EXHIBITS AND SCHEDULES SHALL BE
CONSTRUED TO REFER TO ARTICLES AND SECTIONS OF, AND EXHIBITS AND SCHEDULES TO,
THIS AGREEMENT, AND (F) THE WORDS “ASSET” AND “PROPERTY” SHALL BE CONSTRUED TO
HAVE THE SAME MEANING AND EFFECT AND TO REFER TO ANY AND ALL TANGIBLE AND
INTANGIBLE ASSETS AND PROPERTIES, INCLUDING CASH, SECURITIES, ACCOUNTS AND
CONTRACT RIGHTS.

 

SECTION 1.04  ACCOUNTING TERMS; GAAP.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, ALL FINANCIAL STATEMENTS TO BE DELIVERED PURSUANT TO THIS AGREEMENT
SHALL BE PREPARED IN ACCORDANCE WITH GAAP AS IN EFFECT FROM TIME TO TIME AND ALL
TERMS OF AN ACCOUNTING OR FINANCIAL NATURE SHALL BE CONSTRUED IN ACCORDANCE WITH
GAAP, AS IN EFFECT ON THE DATE HEREOF UNLESS AGREED TO BY BORROWERS AND THE
REQUIRED LENDERS.  IN THE EVENT THAT ANY “ACCOUNTING CHANGE” (AS DEFINED BELOW)
SHALL OCCUR AND SUCH CHANGE RESULTS IN A CHANGE IN THE METHOD OF CALCULATION OF
FINANCIAL COVENANTS, STANDARDS OR TERMS IN THIS AGREEMENT, THEN THE BORROWERS
AND THE ADMINISTRATIVE AGENT AGREE TO ENTER INTO NEGOTIATIONS IN ORDER TO AMEND
SUCH PROVISIONS OF THIS AGREEMENT SO AS TO EQUITABLY REFLECT SUCH ACCOUNTING
CHANGES WITH THE DESIRED RESULT THAT THE CRITERIA FOR EVALUATING THE BORROWERS’
FINANCIAL CONDITION SHALL BE THE SAME AFTER SUCH ACCOUNTING CHANGES AS IF SUCH
ACCOUNTING CHANGES HAD NOT BEEN MADE.  UNTIL SUCH TIME AS SUCH AN AMENDMENT
SHALL HAVE BEEN EXECUTED AND DELIVERED BY BORROWERS AND THE REQUIRED LENDERS,
ALL FINANCIAL COVENANTS, STANDARDS AND TERMS IN THIS AGREEMENT SHALL CONTINUE TO
BE CALCULATED OR CONSTRUED AS IF SUCH ACCOUNTING CHANGES HAD NOT OCCURRED. 
“ACCOUNTING CHANGES” REFERS TO CHANGES IN ACCOUNTING PRINCIPLES REQUIRED BY THE
PROMULGATION OF ANY RULE, REGULATION, PRONOUNCEMENT OR OPINION BY THE FINANCIAL
ACCOUNTING STANDARDS BOARD OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS OR, IF APPLICABLE, THE SECURITIES AND EXCHANGE COMMISSION (OR
SUCCESSORS THERETO OR AGENCIES WITH SIMILAR FUNCTIONS).

 

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ARTICLE II.
 
THE CREDITS

 

SECTION 2.01  COMMITMENTS.  SUBJECT TO THE TERMS AND CONDITIONS AND RELYING UPON
THE REPRESENTATIONS AND WARRANTIES HEREIN SET FORTH, EACH LENDER AGREES,
SEVERALLY AND NOT JOINTLY TO MAKE REVOLVING LOANS TO BORROWERS, AT ANY TIME AND
FROM TIME TO TIME AFTER THE CLOSING DATE UNTIL THE EARLIER OF ONE BUSINESS DAY
PRIOR TO THE REVOLVING MATURITY DATE AND THE TERMINATION OF THE COMMITMENT OF
SUCH LENDER IN ACCORDANCE WITH THE TERMS HEREOF, IN AN AGGREGATE PRINCIPAL
AMOUNT AT ANY TIME OUTSTANDING THAT WILL NOT RESULT IN SUCH LENDER’S REVOLVING
EXPOSURE EXCEEDING THE LESSER OF (A) SUCH LENDER’S REVOLVING COMMITMENT AND
(B) SUCH LENDER’S PRO RATA PERCENTAGE MULTIPLIED BY THE BORROWING BASE THEN IN
EFFECT.

 

Within the limits set forth above and subject to the terms, conditions and
limitations set forth herein, Borrowers may borrow, pay or prepay and reborrow
Revolving Loans.

 

SECTION 2.02  LOANS.  (A)  EACH LOAN (OTHER THAN SWINGLINE LOANS) SHALL BE MADE
AS PART OF A BORROWING CONSISTING OF LOANS MADE BY THE LENDERS RATABLY IN
ACCORDANCE WITH THEIR APPLICABLE COMMITMENTS; PROVIDED THAT THE FAILURE OF ANY
LENDER TO MAKE ANY LOAN SHALL NOT IN ITSELF RELIEVE ANY OTHER LENDER OF ITS
OBLIGATION TO LEND HEREUNDER (IT BEING UNDERSTOOD, HOWEVER, THAT NO LENDER SHALL
BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER TO MAKE ANY LOAN REQUIRED TO
BE MADE BY SUCH OTHER LENDER).  EXCEPT FOR LOANS DEEMED MADE PURSUANT TO
SECTION 2.02(F), LOANS (OTHER THAN SWINGLINE LOANS) COMPRISING ANY BORROWING
SHALL BE IN AN AGGREGATE PRINCIPAL AMOUNT THAT IS (I) IN THE CASE OF ABR
REVOLVING LOANS, INTEGRAL MULTIPLES OF $500,000 AND NOT LESS THAN $500,000 OR
(B) IN THE CASE OF EURODOLLAR REVOLVING LOANS, AN INTEGRAL MULTIPLE OF $500,000
AND NOT LESS THAN $1.0 MILLION OR (II) EQUAL TO THE REMAINING AVAILABLE BALANCE
OF THE APPLICABLE REVOLVING COMMITMENTS.

 

(B)           SUBJECT TO SECTIONS 2.11 AND 2.12, EACH BORROWING SHALL BE
COMPRISED ENTIRELY OF ABR REVOLVING LOANS OR EURODOLLAR REVOLVING LOANS AS
BORROWERS MAY REQUEST PURSUANT TO SECTION 2.03.  EACH LENDER MAY AT ITS OPTION
MAKE ANY EURODOLLAR REVOLVING LOAN BY CAUSING ANY DOMESTIC OR FOREIGN BRANCH OR
AFFILIATE OF SUCH LENDER TO MAKE SUCH LOAN; PROVIDED THAT ANY EXERCISE OF SUCH
OPTION SHALL NOT AFFECT THE OBLIGATION OF BORROWERS TO REPAY SUCH LOAN IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.  BORROWINGS OF MORE THAN ONE TYPE
MAY BE OUTSTANDING AT THE SAME TIME; PROVIDED FURTHER THAT BORROWERS SHALL NOT
BE ENTITLED TO REQUEST ANY BORROWING THAT, IF MADE, WOULD RESULT IN MORE THAN
FIFTEEN EURODOLLAR BORROWINGS OUTSTANDING HEREUNDER AT ANY ONE TIME.  FOR
PURPOSES OF THE FOREGOING, BORROWINGS HAVING DIFFERENT INTEREST PERIODS,
REGARDLESS OF WHETHER THEY COMMENCE ON THE SAME DATE, SHALL BE CONSIDERED
SEPARATE BORROWINGS.

 

(C)           EXCEPT WITH RESPECT TO LOANS MADE PURSUANT TO SECTION 2.02(F),
EACH LENDER SHALL MAKE EACH LOAN (OTHER THAN SWINGLINE LOANS) TO BE MADE BY IT
HEREUNDER ON THE PROPOSED DATE THEREOF BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE
FUNDS TO SUCH ACCOUNT IN NEW YORK CITY AS THE ADMINISTRATIVE AGENT MAY DESIGNATE
NOT LATER THAN 2:00 P.M., NEW YORK CITY TIME, AND THE ADMINISTRATIVE AGENT SHALL
PROMPTLY CREDIT THE AMOUNTS SO RECEIVED TO AN ACCOUNT AS DIRECTED BY BORROWERS
IN THE APPLICABLE BORROWING REQUEST MAINTAINED WITH THE ADMINISTRATIVE AGENT OR,
IF

 

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A BORROWING SHALL NOT OCCUR ON SUCH DATE BECAUSE ANY CONDITION PRECEDENT HEREIN
SPECIFIED SHALL NOT HAVE BEEN MET, RETURN THE AMOUNTS SO RECEIVED TO THE
RESPECTIVE LENDERS.

 

(D)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM A
LENDER PRIOR TO THE DATE OF ANY BORROWING THAT SUCH LENDER WILL NOT MAKE
AVAILABLE TO THE ADMINISTRATIVE AGENT SUCH LENDER’S PORTION OF SUCH BORROWING,
THE ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH PORTION
AVAILABLE TO THE ADMINISTRATIVE AGENT ON THE DATE OF SUCH BORROWING IN
ACCORDANCE WITH PARAGRAPH (C) ABOVE, AND THE ADMINISTRATIVE AGENT MAY, IN
RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE TO BORROWERS ON SUCH DATE A
CORRESPONDING AMOUNT.  IF THE ADMINISTRATIVE AGENT SHALL HAVE SO MADE FUNDS
AVAILABLE THEN, TO THE EXTENT THAT SUCH LENDER SHALL NOT HAVE MADE SUCH PORTION
AVAILABLE TO THE ADMINISTRATIVE AGENT, SUCH LENDER AND BORROWERS SEVERALLY AGREE
TO REPAY TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND SUCH CORRESPONDING
AMOUNT TOGETHER WITH INTEREST THEREON, FOR EACH DAY FROM THE DATE SUCH AMOUNT IS
MADE AVAILABLE TO BORROWERS UNTIL THE DATE SUCH AMOUNT IS REPAID TO THE
ADMINISTRATIVE AGENT AT (I) IN THE CASE OF BORROWERS, THE INTEREST RATE
APPLICABLE AT THE TIME TO THE LOANS COMPRISING SUCH BORROWING AND (II) IN THE
CASE OF SUCH LENDER, A RATE DETERMINED BY THE ADMINISTRATIVE AGENT TO REPRESENT
ITS COST OF OVERNIGHT OR SHORT-TERM FUNDS (WHICH DETERMINATION SHALL BE
CONCLUSIVE ABSENT MANIFEST ERROR).  IF SUCH LENDER SHALL REPAY TO THE
ADMINISTRATIVE AGENT SUCH CORRESPONDING AMOUNT, SUCH AMOUNT SHALL CONSTITUTE
SUCH LENDER’S LOAN AS PART OF SUCH BORROWING FOR PURPOSES OF THIS AGREEMENT.

 

(E)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, BORROWERS
SHALL NOT BE ENTITLED TO REQUEST, OR TO ELECT TO CONVERT OR CONTINUE, ANY
BORROWING IF THE INTEREST PERIOD REQUESTED WITH RESPECT THERETO WOULD END AFTER
THE REVOLVING MATURITY DATE.

 

(F)            IF THE ISSUING BANK SHALL NOT HAVE RECEIVED FROM BORROWERS THE
PAYMENT REQUIRED TO BE MADE BY SECTION 2.18(E) WITHIN THE TIME SPECIFIED IN SUCH
SECTION, THE ISSUING BANK WILL PROMPTLY NOTIFY THE ADMINISTRATIVE AGENT OF THE
LC DISBURSEMENT AND THE ADMINISTRATIVE AGENT WILL PROMPTLY NOTIFY EACH REVOLVING
LENDER OF SUCH LC DISBURSEMENT AND ITS PRO RATA PERCENTAGE THEREOF.  EACH
REVOLVING LENDER SHALL PAY BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO
THE ADMINISTRATIVE AGENT ON SUCH DATE (OR, IF SUCH REVOLVING LENDER SHALL HAVE
RECEIVED SUCH NOTICE LATER THAN 12:00 (NOON), NEW YORK CITY TIME, ON ANY DAY,
NOT LATER THAN 11:00 A.M., NEW YORK CITY TIME, ON THE IMMEDIATELY FOLLOWING
BUSINESS DAY), AN AMOUNT EQUAL TO SUCH LENDER’S PRO RATA PERCENTAGE OF SUCH LC
DISBURSEMENT (IT BEING UNDERSTOOD THAT SUCH AMOUNT SHALL BE DEEMED TO CONSTITUTE
AN ABR REVOLVING LOAN OF SUCH LENDER, AND SUCH PAYMENT SHALL BE DEEMED TO HAVE
REDUCED THE LC EXPOSURE), AND THE ADMINISTRATIVE AGENT WILL PROMPTLY PAY TO THE
ISSUING BANK AMOUNTS SO RECEIVED BY IT FROM THE REVOLVING LENDERS.  THE
ADMINISTRATIVE AGENT WILL PROMPTLY PAY TO THE ISSUING BANK ANY AMOUNTS RECEIVED
BY IT FROM BORROWERS PURSUANT TO SECTION 2.18(E) PRIOR TO THE TIME THAT ANY
REVOLVING LENDER MAKES ANY PAYMENT PURSUANT TO THIS PARAGRAPH (F); ANY SUCH
AMOUNTS RECEIVED BY THE ADMINISTRATIVE AGENT THEREAFTER WILL BE PROMPTLY
REMITTED BY THE ADMINISTRATIVE AGENT TO THE REVOLVING LENDERS THAT SHALL HAVE
MADE SUCH PAYMENTS AND TO THE ISSUING BANK, AS THEIR INTERESTS MAY APPEAR.  IF
ANY REVOLVING LENDER SHALL NOT HAVE MADE ITS PRO RATA PERCENTAGE OF SUCH LC
DISBURSEMENT AVAILABLE TO THE ADMINISTRATIVE AGENT AS PROVIDED ABOVE, SUCH
LENDER AND BORROWERS SEVERALLY AGREE TO PAY INTEREST ON SUCH AMOUNT, FOR EACH
DAY FROM AND INCLUDING THE DATE SUCH AMOUNT IS REQUIRED TO BE PAID IN ACCORDANCE
WITH THIS PARAGRAPH (F) TO BUT EXCLUDING THE DATE SUCH AMOUNT IS PAID, TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE ISSUING BANK AT (I) IN THE CASE OF
BORROWERS, A RATE

 

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PER ANNUM EQUAL TO THE INTEREST RATE APPLICABLE TO REVOLVING LOANS PURSUANT TO
SECTION 2.06(A), AND (II) IN THE CASE OF SUCH LENDER, FOR THE FIRST SUCH DAY,
THE FEDERAL FUNDS EFFECTIVE RATE, AND FOR EACH DAY THEREAFTER, THE ALTERNATE
BASE RATE.

 

SECTION 2.03  BORROWING PROCEDURE.  TO REQUEST A REVOLVING BORROWING, BORROWERS
SHALL NOTIFY THE ADMINISTRATIVE AGENT OF SUCH REQUEST BY TELEPHONE (PROMPTLY
CONFIRMED BY TELECOPY) (I) IN THE CASE OF A EURODOLLAR BORROWING, NOT LATER THAN
12:00 NOON, NEW YORK CITY TIME, THREE BUSINESS DAYS BEFORE THE DATE OF THE
PROPOSED BORROWING OR (II) IN THE CASE OF AN ABR BORROWING, (OTHER THAN
SWINGLINE LOANS), NOT LATER THAN 12:00 NOON, NEW YORK CITY TIME, ON THE BUSINESS
DAY OF THE PROPOSED BORROWING.  EACH SUCH TELEPHONIC BORROWING REQUEST SHALL BE
IRREVOCABLE AND SHALL BE CONFIRMED PROMPTLY BY HAND DELIVERY OR TELECOPY TO THE
ADMINISTRATIVE AGENT OF A WRITTEN BORROWING REQUEST IN A FORM APPROVED BY THE
ADMINISTRATIVE AGENT AND SIGNED BY BORROWERS.  EACH SUCH TELEPHONIC AND WRITTEN
BORROWING REQUEST SHALL SPECIFY THE FOLLOWING INFORMATION IN COMPLIANCE WITH
SECTION 2.02:

 

(A)           THE AGGREGATE AMOUNT OF SUCH BORROWING;

 

(B)           THE DATE OF SUCH BORROWING, WHICH SHALL BE A BUSINESS DAY;

 

(C)           WHETHER SUCH BORROWING IS TO BE AN ABR BORROWING OR A EURODOLLAR
BORROWING;

 

(D)           IN THE CASE OF A EURODOLLAR BORROWING, THE INITIAL INTEREST PERIOD
TO BE APPLICABLE THERETO, WHICH SHALL BE A PERIOD CONTEMPLATED BY THE DEFINITION
OF THE TERM “INTEREST PERIOD”; PROVIDED THAT UNTIL THE EARLIER OF (I) THE DATE
ON WHICH THE ADMINISTRATIVE AGENT SHALL HAVE NOTIFIED BORROWER THAT THE PRIMARY
SYNDICATION OF THE COMMITMENTS HAS BEEN COMPLETED AND (II) THE DATE WHICH IS 30
DAYS AFTER THE CLOSING DATE, THE INTEREST PERIOD SHALL BE SEVEN DAYS;

 

(E)           THE LOCATION AND NUMBER OF THE ACCOUNT TO WHICH FUNDS ARE TO BE
DISBURSED, WHICH SHALL COMPLY WITH THE REQUIREMENTS OF SECTION 2.02; AND

 

(F)            THAT THE CONDITIONS SET FORTH IN SECTION 4.02 (B)-(E) ARE
SATISFIED AS OF THE DATE OF THE NOTICE.

 

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then Borrowers shall be
deemed to have selected an Interest Period of one month’s duration (subject to
the proviso in clause (d) above).  Promptly following receipt of a Borrowing
Request in accordance with this Section 2.03, the Administrative Agent shall
advise each Lender of the details thereof and of the amount of such Lender’s
Loan to be made as part of the requested Borrowing.

 

SECTION 2.04  EVIDENCE OF DEBT; REPAYMENT OF LOANS.  (A)  BORROWERS HEREBY
UNCONDITIONALLY PROMISE TO PAY (I) TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT
OF EACH REVOLVING LENDER, THE THEN UNPAID PRINCIPAL AMOUNT OF EACH REVOLVING
LOAN OF SUCH LENDER ON THE REVOLVING MATURITY DATE AND (II) TO THE SWINGLINE
LENDER THE THEN UNPAID PRINCIPAL AMOUNT OF EACH SWINGLINE LOAN ON THE EARLIER OF
THE REVOLVING MATURITY DATE AND THE FIRST DATE AFTER SUCH

 

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SWINGLINE LOAN IS MADE THAT IS THE 15TH OR LAST DAY OF A CALENDAR MONTH AND IS
AT LEAST TWO BUSINESS DAYS AFTER SUCH SWINGLINE LOAN IS MADE; PROVIDED THAT ON
EACH DATE THAT A REVOLVING BORROWING IS MADE, BORROWERS SHALL REPAY ALL
SWINGLINE LOANS THAT WERE OUTSTANDING ON THE DATE SUCH BORROWING WAS REQUESTED.

 

(B)           EACH LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL PRACTICE
AN ACCOUNT OR ACCOUNTS EVIDENCING THE INDEBTEDNESS OF BORROWERS TO SUCH LENDER
RESULTING FROM EACH LOAN MADE BY SUCH LENDER FROM TIME TO TIME, INCLUDING THE
AMOUNTS OF PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDER FROM TIME TO
TIME UNDER THIS AGREEMENT.

 

(C)           THE ADMINISTRATIVE AGENT SHALL MAINTAIN ACCOUNTS IN WHICH IT WILL
RECORD (I) THE AMOUNT OF EACH LOAN MADE HEREUNDER, THE TYPE AND CLASS THEREOF
AND THE INTEREST PERIOD APPLICABLE THERETO; (II) THE AMOUNT OF ANY PRINCIPAL OR
INTEREST DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM BORROWERS TO EACH
LENDER HEREUNDER; AND (III) THE AMOUNT OF ANY SUM RECEIVED BY THE ADMINISTRATIVE
AGENT HEREUNDER FOR THE ACCOUNT OF THE LENDERS AND EACH LENDER’S SHARE THEREOF.

 

(D)           THE ENTRIES MADE IN THE ACCOUNTS MAINTAINED PURSUANT TO PARAGRAPHS
(B) AND (C) ABOVE SHALL BE PRIMA FACIE EVIDENCE OF THE EXISTENCE AND AMOUNTS OF
THE OBLIGATIONS THEREIN RECORDED; PROVIDED THAT THE FAILURE OF ANY LENDER OR THE
ADMINISTRATIVE AGENT TO MAINTAIN SUCH ACCOUNTS OR ANY ERROR THEREIN SHALL NOT IN
ANY MANNER AFFECT THE OBLIGATIONS OF BORROWERS TO REPAY THE LOANS IN ACCORDANCE
WITH THEIR TERMS.

 

(E)           ANY LENDER MAY REQUEST THAT LOANS OF ANY CLASS MADE BY IT BE
EVIDENCED BY A PROMISSORY NOTE.  IN SUCH EVENT, BORROWERS SHALL PREPARE, EXECUTE
AND DELIVER TO SUCH LENDER A PROMISSORY NOTE PAYABLE TO THE ORDER OF SUCH LENDER
(OR, IF REQUESTED BY SUCH LENDER, TO SUCH LENDER AND ITS REGISTERED ASSIGNS) IN
THE FORM OF EXHIBIT H-1 OR H-2, AS THE CASE MAY BE.  THEREAFTER, THE LOANS
EVIDENCED BY SUCH PROMISSORY NOTE AND INTEREST THEREON SHALL AT ALL TIMES
(INCLUDING AFTER ASSIGNMENT PURSUANT TO SECTION 11.04) BE REPRESENTED BY ONE OR
MORE PROMISSORY NOTES IN SUCH FORM PAYABLE TO THE ORDER OF THE PAYEE NAMED
THEREIN (OR, IF SUCH PROMISSORY NOTE IS A REGISTERED NOTE, TO SUCH PAYEE AND ITS
REGISTERED ASSIGNS).

 

(F)            WITHIN 45 DAYS AFTER THE CLOSING DATE, BORROWERS AND THE OTHER
LOAN PARTIES SHALL ESTABLISH, AND THEREAFTER SHALL MAINTAIN IN PLACE, THE CASH
MANAGEMENT SYSTEM DESCRIBED IN THIS SECTION 2.04(F).  ALL FUNDS RECEIVED AT ANY
TIME BY EACH BORROWER AND EACH OTHER LOAN PARTY, WHETHER FROM SALES OF INVENTORY
OR COLLECTIONS OF ACCOUNTS IN THE ORDINARY COURSE OF BUSINESS, FROM NET CASH
PROCEEDS OR OTHERWISE, SHALL BE DEPOSITED IN ONE OR MORE COLLECTION ACCOUNTS
OVER WHICH THE ADMINISTRATIVE AGENT SHALL HAVE COMPLETE DOMINION AND CONTROL AND
WHICH SHALL BE SUBJECT TO A DEPOSIT ACCOUNT CONTROL AGREEMENT AMONG SUCH
BORROWER OR LOAN PARTY, THE ADMINISTRATIVE AGENT AND THE BANK AT WHICH SUCH
ACCOUNT IS MAINTAINED, EXCEPT THAT (X) THE LOAN PARTIES MAY MAINTAIN A BANK
ACCOUNT OR ACCOUNTS IN CANADA (WHICH SHALL BE USED FOR DEPOSITING PAYMENTS
RECEIVED FROM CANADIAN CUSTOMERS IN CANADIAN DOLLARS) WHICH ARE NOT SUBJECT TO
SUCH A DEPOSIT ACCOUNT CONTROL AGREEMENT; PROVIDED, THAT, THE AGGREGATE AMOUNTS
HELD IN ALL SUCH CANADIAN BANK ACCOUNTS SHALL NOT AT ANY TIME EXCEED THE
CANADIAN DOLLAR EQUIVALENT OF $250,000 AND (Y) THE LOAN PARTIES MAY MAINTAIN
BANK ACCOUNTS IN THE UNITED STATES WHICH ARE NOT SUBJECT TO SUCH A DEPOSIT
ACCOUNT CONTROL AGREEMENT; PROVIDED THAT, THE AGGREGATE AMOUNTS HELD IN ALL SUCH
UNITED STATES BANK ACCOUNTS SHALL NOT AT ANY TIME EXCEED $5,000,000
(COLLECTIVELY, THE

 

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“NON-SWEPT ACCOUNTS”).  EACH DEPOSIT ACCOUNT CONTROL AGREEMENT COVERING A
COLLECTION ACCOUNT SHALL PROVIDE THAT ALL FUNDS ON DEPOSIT IN SUCH ACCOUNT SHALL
BE TRANSFERRED ON A DAILY BASIS TO AN ACCOUNT OF THE ADMINISTRATIVE AGENT.  SUCH
TRANSFERRED FUNDS SHALL BE APPLIED ON A DAILY BASIS BY THE ADMINISTRATIVE AGENT
TO THE REPAYMENT OF ANY OUTSTANDING SWINGLINE LOANS AND, THEREAFTER, TO ANY
OUTSTANDING REVOLVING LOANS, IN EACH CASE WITHOUT A REDUCTION IN THE
COMMITMENTS.  EXCEPT FOR (I) PAYROLL AND OTHER FIDUCIARY ACCOUNTS AND (II) OTHER
ACCOUNTS WHICH DO NOT HOLD MORE THAN $250,000 IN THE AGGREGATE, ALL DISBURSEMENT
ACCOUNTS AND ALL OTHER BANK ACCOUNTS, INCLUDING, WITHOUT LIMITATION, ALL
CANADIAN ACCOUNTS AND ALL NON-SWEPT ACCOUNTS, OF EACH BORROWER AND EACH OTHER
LOAN PARTY SHALL BE SUBJECT TO A DEPOSIT ACCOUNT CONTROL AGREEMENT WHICH SHALL
PROVIDE FOR THE DAILY TRANSFER OF ALL FUNDS ON DEPOSIT THEREIN IF AN EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND THE ADMINISTRATIVE AGENT SHALL
HAVE SENT A NOTICE DIRECTING THE BANK AT WHICH SUCH ACCOUNT IS MAINTAINED TO
BEGIN MAKING SUCH DAILY TRANSFERS (WHICH NOTICE MAY BE SENT BY THE
ADMINISTRATIVE AGENT ONLY IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING).

 

SECTION 2.05  FEES.  (A)  COMMITMENT FEE.  BORROWERS AGREE TO PAY TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH LENDER A COMMITMENT FEE (A
“COMMITMENT FEE”), EQUAL TO THE APPLICABLE FEE PER ANNUM ON THE AVERAGE DAILY
UNUSED AMOUNT OF EACH COMMITMENT OF SUCH LENDER DURING THE PERIOD FROM AND
INCLUDING THE CLOSING DATE TO BUT EXCLUDING THE DATE ON WHICH SUCH COMMITMENT
TERMINATES.  ACCRUED COMMITMENT FEES SHALL BE PAYABLE IN ARREARS ON THE LAST DAY
OF MARCH, JUNE, SEPTEMBER AND DECEMBER OF EACH YEAR AND ON THE DATE ON WHICH THE
REVOLVING COMMITMENTS TERMINATE, COMMENCING ON THE FIRST SUCH DATE TO OCCUR
AFTER THE DATE HEREOF.  ALL COMMITMENT FEES SHALL BE COMPUTED ON THE BASIS OF A
YEAR OF 360 DAYS AND SHALL BE PAYABLE FOR THE ACTUAL NUMBER OF DAYS ELAPSED
(INCLUDING THE FIRST DAY BUT EXCLUDING THE LAST DAY).  FOR PURPOSES OF COMPUTING
COMMITMENT FEES, A REVOLVING COMMITMENT OF A LENDER SHALL BE DEEMED TO BE USED
TO THE EXTENT OF THE OUTSTANDING REVOLVING LOANS AND LC EXPOSURE OF SUCH LENDER
(AND THE SWINGLINE EXPOSURE OF SUCH LENDER SHALL BE DISREGARDED FOR SUCH
PURPOSE).

 

(B)           ADMINISTRATIVE AGENT FEES; COLLATERAL AGENT FEES.  (I)  BORROWERS
AGREE TO PAY TO THE ADMINISTRATIVE AGENT, FOR ITS OWN ACCOUNT, THE APPLICABLE
ADMINISTRATIVE AGENCY FEES SET FORTH IN THE FEE LETTER OR SUCH OTHER FEES
PAYABLE IN THE AMOUNTS AND AT THE TIMES SEPARATELY AGREED UPON BETWEEN BORROWERS
AND THE ADMINISTRATIVE AGENT (THE “ADMINISTRATIVE AGENT FEES”).

 

(II)           BORROWERS AGREE TO PAY TO THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT, EACH FOR ITS OWN ACCOUNT, THE APPLICABLE AGENCY FEE SET FORTH
IN THE FEE LETTER OR SUCH OTHER FEES PAYABLE IN THE AMOUNTS AND AT THE TIMES
SEPARATELY AGREED UPON BETWEEN BORROWER AND THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT, AS THE CASE MAY BE (THE “COLLATERAL AGENT FEES”).

 

(C)           LC AND FRONTING FEES.  BORROWERS AGREE TO PAY (I) TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH REVOLVING LENDER A PARTICIPATION
FEE (“LC PARTICIPATION FEE”) WITH RESPECT TO ITS PARTICIPATIONS IN LETTERS OF
CREDIT, WHICH SHALL ACCRUE AT A RATE EQUAL TO THE APPLICABLE MARGIN FROM TIME TO
TIME USED TO DETERMINE THE INTEREST RATE ON EURODOLLAR REVOLVING LOANS PURSUANT
TO SECTION 2.06 ON THE AVERAGE DAILY AMOUNT OF SUCH LENDER’S LC EXPOSURE
(EXCLUDING ANY PORTION THEREOF ATTRIBUTABLE TO UNREIMBURSED LC DISBURSEMENTS)
DURING THE PERIOD FROM AND INCLUDING THE CLOSING DATE TO BUT EXCLUDING THE LATER
OF THE DATE ON WHICH SUCH LENDER’S REVOLVING COMMITMENT TERMINATES AND THE DATE
ON WHICH SUCH LENDER CEASES TO HAVE ANY LC EXPOSURE,

 

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AND (II) TO THE ISSUING BANK A FRONTING FEE (“FRONTING FEE”), WHICH SHALL ACCRUE
AT THE RATE OF 0.25% PER ANNUM ON THE AVERAGE DAILY AMOUNT OF THE LC EXPOSURE
(EXCLUDING ANY PORTION THEREOF ATTRIBUTABLE TO UNREIMBURSED LC DISBURSEMENTS)
DURING THE PERIOD FROM AND INCLUDING THE CLOSING DATE TO BUT EXCLUDING THE LATER
OF THE DATE OF TERMINATION OF THE REVOLVING COMMITMENTS AND THE DATE ON WHICH
THERE CEASES TO BE ANY LC EXPOSURE, AS WELL AS THE ISSUING BANK’S STANDARD FEES
WITH RESPECT TO THE ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION OF ANY LETTER OF
CREDIT OR PROCESSING OF DRAWINGS THEREUNDER.  LC PARTICIPATION FEES AND FRONTING
FEES ACCRUED THROUGH AND INCLUDING THE LAST DAY OF MARCH, JUNE, SEPTEMBER AND
DECEMBER OF EACH YEAR SHALL BE PAYABLE ON THE THIRD BUSINESS DAY FOLLOWING SUCH
LAST DAY, COMMENCING ON THE FIRST SUCH DATE TO OCCUR AFTER THE CLOSING DATE;
PROVIDED THAT ALL SUCH FEES SHALL BE PAYABLE ON THE DATE ON WHICH THE REVOLVING
COMMITMENTS TERMINATE AND ANY SUCH FEES ACCRUING AFTER THE DATE ON WHICH THE
REVOLVING COMMITMENTS TERMINATE SHALL BE PAYABLE ON DEMAND.  ANY OTHER FEES
PAYABLE TO THE ISSUING BANK PURSUANT TO THIS PARAGRAPH SHALL BE PAYABLE WITHIN
10 DAYS AFTER DEMAND.  ALL LC PARTICIPATION FEES AND FRONTING FEES SHALL BE
COMPUTED ON THE BASIS OF A YEAR OF 360 DAYS AND SHALL BE PAYABLE FOR THE ACTUAL
NUMBER OF DAYS ELAPSED (INCLUDING THE FIRST DAY BUT EXCLUDING THE LAST DAY). 
DURING AN EVENT OF DEFAULT, THE LC PARTICIPATION FEE SHALL BE INCREASED TO A PER
ANNUM RATE EQUAL TO 2% PLUS THE OTHERWISE APPLICABLE RATE WITH RESPECT THERETO.

 

(D)           ALL FEES SHALL BE PAID ON THE DATES DUE, IN IMMEDIATELY AVAILABLE
FUNDS, TO THE ADMINISTRATIVE AGENT FOR DISTRIBUTION, IF AND AS APPROPRIATE,
AMONG THE LENDERS, EXCEPT THAT THE FRONTING FEES SHALL BE PAID DIRECTLY TO THE
ISSUING BANK.  ONCE PAID, NONE OF THE FEES SHALL BE REFUNDABLE UNDER ANY
CIRCUMSTANCES.

 

SECTION 2.06  INTEREST ON LOANS AND DEFAULT COMPENSATION.  (A)  SUBJECT TO THE
PROVISIONS OF SECTION 2.06(C), THE LOANS COMPRISING EACH ABR BORROWING,
INCLUDING EACH SWINGLINE LOAN, SHALL BEAR INTEREST AT A RATE PER ANNUM EQUAL TO
THE ALTERNATE BASE RATE PLUS THE APPLICABLE MARGIN IN EFFECT FROM TIME TO TIME.

 

(B)           SUBJECT TO THE PROVISIONS OF SECTION 2.06, THE LOANS COMPRISING
EACH EURODOLLAR BORROWING SHALL BEAR INTEREST AT A RATE PER ANNUM EQUAL TO THE
ADJUSTED LIBOR RATE FOR THE INTEREST PERIOD IN EFFECT FOR SUCH BORROWING PLUS
THE APPLICABLE MARGIN IN EFFECT FROM TIME TO TIME.

 

(C)           NOTWITHSTANDING THE FOREGOING, DURING AN EVENT OF DEFAULT, ALL
OBLIGATIONS SHALL, AT THE DISCRETION OF THE ADMINISTRATIVE AGENT OR REQUIRED
LENDERS UPON NOTICE THEREOF TO THE BORROWERS, BEAR INTEREST, AFTER AS WELL AS
BEFORE JUDGMENT, AT A PER ANNUM RATE EQUAL TO (I) IN THE CASE OF PRINCIPAL OF
ANY LOAN, 2% PLUS THE RATE OTHERWISE APPLICABLE TO SUCH LOAN AS PROVIDED IN THE
PRECEDING PARAGRAPHS OF THIS SECTION 2.06 OR (II) IN THE CASE OF ANY OTHER
AMOUNT, 2% PLUS THE RATE APPLICABLE TO ABR REVOLVING LOANS AS PROVIDED IN
PARAGRAPH (A) OF THIS SECTION 2.06.

 

(D)           ACCRUED INTEREST ON EACH LOAN SHALL BE PAYABLE IN ARREARS ON EACH
INTEREST PAYMENT DATE FOR SUCH LOAN AND, IN THE CASE OF REVOLVING LOANS, UPON
TERMINATION OF THE REVOLVING COMMITMENTS; PROVIDED THAT (I) INTEREST ACCRUED
PURSUANT TO PARAGRAPH (C) OF THIS SECTION 2.06 SHALL BE PAYABLE ON DEMAND
(PROVIDED THAT, ABSENT DEMAND, SUCH INTEREST SHALL BE PAYABLE ON EACH INTEREST
PAYMENT DATE AND UPON TERMINATION OF THE REVOLVING COMMITMENTS), (II) IN THE
EVENT OF ANY REPAYMENT OR PREPAYMENT OF ANY LOAN (OTHER THAN A PREPAYMENT OF AN
ABR REVOLVING LOAN PRIOR TO THE END OF THE REVOLVING AVAILABILITY PERIOD),
ACCRUED INTEREST ON THE

 

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PRINCIPAL AMOUNT REPAID OR PREPAID SHALL BE PAYABLE ON THE DATE OF SUCH
REPAYMENT OR PREPAYMENT AND (III) IN THE EVENT OF ANY CONVERSION OF ANY
EURODOLLAR REVOLVING LOAN PRIOR TO THE END OF THE CURRENT INTEREST PERIOD
THEREFOR, ACCRUED INTEREST ON SUCH LOAN SHALL BE PAYABLE ON THE EFFECTIVE DATE
OF SUCH CONVERSION.

 

(E)           ALL INTEREST HEREUNDER SHALL BE COMPUTED ON THE BASIS OF A YEAR OF
360 DAYS, EXCEPT THAT INTEREST COMPUTED BY REFERENCE TO THE ALTERNATE BASE RATE
SHALL BE COMPUTED ON THE BASIS OF A YEAR OF 365 DAYS (OR 366 DAYS IN A LEAP
YEAR), AND IN EACH CASE SHALL BE PAYABLE FOR THE ACTUAL NUMBER OF DAYS ELAPSED
(INCLUDING THE FIRST DAY BUT EXCLUDING THE LAST DAY).  THE APPLICABLE ALTERNATE
BASE RATE OR ADJUSTED LIBOR RATE SHALL BE DETERMINED BY THE ADMINISTRATIVE AGENT
IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT AND SUCH DETERMINATION SHALL
BE CONCLUSIVE ABSENT MANIFEST ERROR.

 

SECTION 2.07  TERMINATION AND REDUCTION OF COMMITMENTS.  (A)   THE REVOLVING
COMMITMENTS, THE SWINGLINE COMMITMENT, AND THE LC COMMITMENT SHALL AUTOMATICALLY
TERMINATE ON THE REVOLVING MATURITY DATE.

 

(B)           BORROWERS MAY AT ANY TIME TERMINATE, OR FROM TIME TO TIME REDUCE,
THE COMMITMENTS OF ANY CLASS; PROVIDED THAT (I) EACH REDUCTION OF THE
COMMITMENTS OF ANY CLASS SHALL BE IN AN AMOUNT THAT IS AN INTEGRAL MULTIPLE OF
$1.0 MILLION AND NOT LESS THAN $5.0 MILLION AND (II) THE REVOLVING COMMITMENTS
SHALL NOT BE TERMINATED OR REDUCED IF, AFTER GIVING EFFECT TO ANY CONCURRENT
PREPAYMENT OF THE REVOLVING LOANS IN ACCORDANCE WITH SECTION 2.10, THE SUM OF
THE REVOLVING EXPOSURES WOULD EXCEED THE AGGREGATE AMOUNT OF REVOLVING
COMMITMENTS.

 

(C)           BORROWERS SHALL NOTIFY THE ADMINISTRATIVE AGENT OF ANY ELECTION TO
TERMINATE OR REDUCE THE COMMITMENTS UNDER PARAGRAPH (B) OF THIS SECTION 2.07 AT
LEAST THREE BUSINESS DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH TERMINATION OR
REDUCTION, SPECIFYING SUCH ELECTION AND THE EFFECTIVE DATE THEREOF.  PROMPTLY
FOLLOWING RECEIPT OF ANY NOTICE, THE ADMINISTRATIVE AGENT SHALL ADVISE THE
LENDERS OF THE CONTENTS THEREOF.  EACH NOTICE DELIVERED BY BORROWERS PURSUANT TO
THIS SECTION 2.07 SHALL BE IRREVOCABLE.  ANY TERMINATION OR REDUCTION OF THE
COMMITMENTS OF ANY CLASS SHALL BE PERMANENT.  EACH REDUCTION OF THE COMMITMENTS
OF ANY CLASS SHALL BE MADE RATABLY AMONG THE LENDERS IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENTS OF SUCH CLASS.

 

SECTION 2.08  INTEREST ELECTIONS.  (A)  EACH REVOLVING BORROWING INITIALLY SHALL
BE OF THE TYPE SPECIFIED IN THE APPLICABLE BORROWING REQUEST AND, IN THE CASE OF
A EURODOLLAR BORROWING, SHALL HAVE AN INITIAL INTEREST PERIOD AS SPECIFIED IN
SUCH BORROWING REQUEST.  THEREAFTER, BORROWERS MAY ELECT TO CONVERT SUCH
BORROWING TO A DIFFERENT TYPE OR TO CONTINUE SUCH BORROWING AND, IN THE CASE OF
A EURODOLLAR BORROWING, MAY ELECT INTEREST PERIODS THEREFOR, ALL AS PROVIDED IN
THIS SECTION 2.08.  BORROWERS MAY ELECT DIFFERENT OPTIONS WITH RESPECT TO
DIFFERENT PORTIONS OF THE AFFECTED BORROWING, IN WHICH CASE EACH SUCH PORTION
SHALL BE ALLOCATED RATABLY AMONG THE LENDERS HOLDING THE LOANS COMPRISING SUCH
BORROWING, AND THE LOANS COMPRISING EACH SUCH PORTION SHALL BE CONSIDERED A
SEPARATE BORROWING.  NOTWITHSTANDING ANYTHING TO THE CONTRARY, BORROWERS SHALL
NOT BE ENTITLED TO REQUEST ANY CONVERSION OR CONTINUATION THAT, IF MADE, WOULD
RESULT IN MORE THAN FIFTEEN EURODOLLAR BORROWINGS OUTSTANDING HEREUNDER AT ANY
ONE TIME.  THIS SECTION 2.08 SHALL NOT APPLY TO SWINGLINE BORROWINGS, WHICH MAY
NOT BE CONVERTED OR CONTINUED.

 

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(B)           TO MAKE AN ELECTION PURSUANT TO THIS SECTION 2.08, BORROWERS SHALL
NOTIFY THE ADMINISTRATIVE AGENT OF SUCH ELECTION BY TELEPHONE OR BY EMAIL OF A
SCANNED AND DULY EXECUTED INTEREST ELECTION REQUEST BY THE TIME THAT A BORROWING
REQUEST WOULD BE REQUIRED UNDER SECTION 2.03 IF BORROWERS WERE REQUESTING A
REVOLVING BORROWING OF THE TYPE RESULTING FROM SUCH ELECTION TO BE MADE ON THE
EFFECTIVE DATE OF SUCH ELECTION.  EACH SUCH TELEPHONIC INTEREST ELECTION REQUEST
SHALL BE IRREVOCABLE AND SHALL BE CONFIRMED PROMPTLY BY HAND DELIVERY OR
TELECOPY TO THE ADMINISTRATIVE AGENT OF A WRITTEN INTEREST ELECTION REQUEST
SUBSTANTIALLY IN THE FORM OF EXHIBIT D.

 

(C)           EACH TELEPHONIC AND WRITTEN INTEREST ELECTION REQUEST SHALL
SPECIFY THE FOLLOWING INFORMATION IN COMPLIANCE WITH SECTION 2.02:

 

(I)            THE BORROWING TO WHICH SUCH INTEREST ELECTION REQUEST APPLIES
AND, IF DIFFERENT OPTIONS ARE BEING ELECTED WITH RESPECT TO DIFFERENT PORTIONS
THEREOF, THE PORTIONS THEREOF TO BE ALLOCATED TO EACH RESULTING BORROWING (IN
WHICH CASE THE INFORMATION TO BE SPECIFIED PURSUANT TO CLAUSES (III) AND
(IV) BELOW SHALL BE SPECIFIED FOR EACH RESULTING BORROWING);

 

(II)           THE EFFECTIVE DATE OF THE ELECTION MADE PURSUANT TO SUCH INTEREST
ELECTION REQUEST, WHICH SHALL BE A BUSINESS DAY;

 

(III)          WHETHER THE RESULTING BORROWING IS TO BE AN ABR BORROWING OR A
EURODOLLAR BORROWING; AND

 

(IV)          IF THE RESULTING BORROWING IS A EURODOLLAR BORROWING, THE INTEREST
PERIOD TO BE APPLICABLE THERETO AFTER GIVING EFFECT TO SUCH ELECTION, WHICH
SHALL BE A PERIOD CONTEMPLATED BY THE DEFINITION OF THE TERM “INTEREST PERIOD”;
PROVIDED THAT UNTIL THE EARLIER OF (I) THE DATE ON WHICH THE ADMINISTRATIVE
AGENT SHALL HAVE NOTIFIED BORROWERS THAT THE PRIMARY SYNDICATION OF THE
COMMITMENTS HAS BEEN COMPLETED AND (II) THE DATE WHICH IS 30 DAYS AFTER THE
CLOSING DATE, THE INTEREST PERIOD SHALL BE SEVEN DAYS.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then Borrowers shall be deemed to have selected
an Interest Period of one month’s duration (subject to the proviso in clause
(iv) above).

 

(D)           PROMPTLY FOLLOWING RECEIPT OF AN INTEREST ELECTION REQUEST, THE
ADMINISTRATIVE AGENT SHALL ADVISE EACH LENDER OF THE DETAILS THEREOF AND OF SUCH
LENDER’S PORTION OF EACH RESULTING BORROWING.

 

(E)           IF AN INTEREST ELECTION REQUEST WITH RESPECT TO A EURODOLLAR
BORROWING IS NOT TIMELY DELIVERED PRIOR TO THE END OF THE INTEREST PERIOD
APPLICABLE THERETO, THEN, UNLESS SUCH BORROWING IS REPAID AS PROVIDED HEREIN, AT
THE END OF SUCH INTEREST PERIOD SUCH BORROWING SHALL BE CONVERTED TO AN ABR
BORROWING.  NOTWITHSTANDING ANY CONTRARY PROVISION HEREOF, IF AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING AND THE ADMINISTRATIVE AGENT, AT THE
REQUEST OF THE REQUIRED LENDERS, SO NOTIFIES BORROWERS, THEN, AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF SUCH EVENT OF DEFAULT (I) NO
OUTSTANDING BORROWING MAY BE CONVERTED TO OR CONTINUED AS A EURODOLLAR BORROWING
AND (II) UNLESS REPAID, EACH EURODOLLAR BORROWING SHALL BE CONVERTED TO AN ABR
BORROWING AT THE END OF THE INTEREST PERIOD APPLICABLE THERETO.

 

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SECTION 2.09  [INTENTIONALLY OMITTED]

 

SECTION 2.10  MANDATORY PREPAYMENTS OF LOANS.

 

(A)           REVOLVING LOAN PREPAYMENTS.

 

(I)            IN THE EVENT OF THE TERMINATION OF ALL THE REVOLVING COMMITMENTS,
BORROWERS SHALL, ON THE DATE OF SUCH TERMINATION, REPAY OR PREPAY ALL ITS
OUTSTANDING REVOLVING BORROWINGS AND ALL OUTSTANDING SWINGLINE LOANS AND REPLACE
ALL OUTSTANDING LETTERS OF CREDIT AND/OR DEPOSIT AN AMOUNT EQUAL TO 105% OF THE
LC EXPOSURE IN THE LC COLLATERAL ACCOUNT.

 

(II)           IN THE EVENT OF ANY PARTIAL REDUCTION OF THE REVOLVING
COMMITMENTS, THEN (X) AT OR PRIOR TO THE EFFECTIVE DATE OF SUCH REDUCTION, THE
ADMINISTRATIVE AGENT SHALL NOTIFY BORROWERS AND THE REVOLVING LENDERS OF THE SUM
OF THE REVOLVING EXPOSURES AFTER GIVING EFFECT THERETO AND (Y) IF THE SUM OF THE
REVOLVING EXPOSURES WOULD EXCEED THE AGGREGATE AMOUNT OF REVOLVING COMMITMENTS
AFTER GIVING EFFECT TO SUCH REDUCTION, THEN BORROWERS SHALL, ON THE DATE OF SUCH
REDUCTION, FIRST, REPAY OR PREPAY ALL SWINGLINE LOANS, SECOND, REPAY OR PREPAY
REVOLVING BORROWINGS AND THIRD, REPLACE OR CASH COLLATERALIZE OUTSTANDING
LETTERS OF CREDIT IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 2.18(J)
IN AN AMOUNT SUFFICIENT TO ELIMINATE SUCH EXCESS.

 

(III)          EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 10.10, IN THE
EVENT THAT THE SUM OF ALL LENDERS’ REVOLVING EXPOSURES EXCEEDS THE BORROWING
BASE THEN IN EFFECT, THE BORROWERS SHALL, WITHOUT NOTICE OR DEMAND, IMMEDIATELY
APPLY AN AMOUNT EQUAL TO SUCH EXCESS TO PREPAY THE LOANS AND ANY INTEREST
ACCRUED THEREON, IN ACCORDANCE WITH THIS SECTION 2.10(A)(III).  THE BORROWERS
SHALL, FIRST, REPAY OR PREPAY REVOLVING BORROWINGS AND SECOND, REPLACE OR CASH
COLLATERALIZE OUTSTANDING LETTERS OF CREDIT IN ACCORDANCE WITH THE PROCEDURES
SET FORTH IN SECTION 2.18(J) IN AN AMOUNT SUFFICIENT TO ELIMINATE SUCH EXCESS.

 

(IV)          IN THE EVENT THAT THE SUM OF ALL LENDERS’ REVOLVING EXPOSURES
EXCEEDS THE REVOLVING COMMITMENTS THEN IN EFFECT, THE BORROWERS SHALL, WITHOUT
NOTICE OR DEMAND, IMMEDIATELY FIRST, REPAY OR PREPAY REVOLVING BORROWINGS AND,
SECOND, REPLACE OR CASH COLLATERALIZE OUTSTANDING LETTERS OF CREDIT IN
ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 2.18(J) IN AN AMOUNT
SUFFICIENT TO ELIMINATE SUCH EXCESS.

 

(V)           IN THE EVENT THAT THE AGGREGATE LC EXPOSURE EXCEEDS THE LC
COMMITMENT THEN IN EFFECT, THE BORROWERS SHALL, WITHOUT NOTICE OR DEMAND,
IMMEDIATELY REPLACE OR CASH COLLATERALIZE OUTSTANDING LETTERS OF CREDIT IN
ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 2.18(J) IN AN AMOUNT
SUFFICIENT TO ELIMINATE SUCH EXCESS.

 

(B)           ASSET SALES.  NOT LATER THAN ONE BUSINESS DAY FOLLOWING THE
RECEIPT OF ANY NET CASH PROCEEDS OF ANY ASSET SALE, BORROWERS SHALL, AND SHALL
CAUSE THEIR SUBSIDIARIES TO, APPLY 100% OF THE NET CASH PROCEEDS RECEIVED WITH
RESPECT THERETO TO MAKE PREPAYMENTS IN ACCORDANCE WITH SECTION 2.10(F); PROVIDED
THAT, PRIOR TO THE REPAYMENT IN FULL OF THE TERM LOAN INDEBTEDNESS, ONLY NET
CASH PROCEEDS FROM ASSET SALES OF REVOLVING CREDIT PRIORITY COLLATERAL SHALL BE
SUBJECT TO THE PROVISIONS OF THIS SECTION 2.10(B).

 

(C)           DEBT ISSUANCE AND PREFERRED EQUITY ISSUANCE.  UPON ANY DEBT
ISSUANCE OR EQUITY ISSUANCE OF EQUITY INTERESTS (OTHER THAN COMMON EQUITY
INTERESTS OF HOLDINGS) AFTER THE CLOSING

 

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DATE AND AFTER THE REPAYMENT IN FULL OF THE TERM LOAN INDEBTEDNESS, BORROWERS
SHALL MAKE PREPAYMENTS IN ACCORDANCE WITH SECTION 2.10(F) IN AN AGGREGATE
PRINCIPAL AMOUNT EQUAL TO 100% OF THE NET CASH PROCEEDS OF SUCH DEBT ISSUANCE OR
EQUITY ISSUANCE.

 

(D)           COMMON EQUITY ISSUANCE.  UPON ANY EQUITY ISSUANCE OF COMMON EQUITY
INTERESTS OF HOLDINGS AFTER THE CLOSING DATE AND AFTER THE REPAYMENT IN FULL OF
THE TERM LOAN INDEBTEDNESS, BORROWERS SHALL MAKE PREPAYMENTS IN ACCORDANCE WITH
SECTION 2.10(F) IN AN AGGREGATE PRINCIPAL AMOUNT EQUAL TO 75% OF THE NET CASH
PROCEEDS OF SUCH EQUITY ISSUANCE.

 

(E)           CASUALTY EVENTS.  NOT LATER THAN ONE BUSINESS DAY FOLLOWING THE
RECEIPT OF ANY NET CASH PROCEEDS FROM A CASUALTY EVENT, BORROWERS SHALL, AND
SHALL CAUSE THEIR SUBSIDIARIES TO, APPLY AN AMOUNT EQUAL TO 100% OF SUCH NET
CASH PROCEEDS TO MAKE PREPAYMENTS IN ACCORDANCE WITH SECTION 2.10(F); PROVIDED
THAT, PRIOR TO THE REPAYMENT IN FULL OF THE TERM LOAN INDEBTEDNESS, ONLY NET
CASH PROCEEDS FROM CASUALTY EVENTS OF REVOLVING CREDIT PRIORITY COLLATERAL SHALL
BE SUBJECT TO THE PROVISIONS OF THIS SECTION 2.10(E).

 

(F)            APPLICATION OF PREPAYMENTS.

 

(I)            PRIOR TO ANY MANDATORY PREPAYMENT OF BORROWINGS HEREUNDER (OTHER
THAN PREPAYMENTS UNDER SECTION 2.10(A)), BORROWERS SHALL SELECT THE BORROWING OR
BORROWINGS TO BE PREPAID AND SHALL SPECIFY SUCH SELECTION IN THE NOTICE OF SUCH
PREPAYMENT PURSUANT TO SECTION 2.10(G).  SUBJECT TO SECTION 9.02 AND SO LONG AS
NO DEFAULT SHALL THEN EXIST AND BE CONTINUING, ALL MANDATORY PREPAYMENTS SHALL
BE APPLIED AS FOLLOWS: FIRST, TO FEES AND REIMBURSABLE EXPENSES OF AGENTS THEN
DUE AND PAYABLE PURSUANT TO THE LOAN DOCUMENTS; SECOND, TO INTEREST THEN DUE AND
PAYABLE ON ALL LOANS; THIRD, TO THE PRINCIPAL BALANCE OF THE SWINGLINE LOAN
UNTIL THE SAME HAS BEEN REPAID IN FULL; FOURTH, TO THE OUTSTANDING PRINCIPAL
BALANCE OF REVOLVING CREDIT ADVANCES UNTIL THE SAME HAS BEEN PAID IN FULL,
INCLUDING ACCOMPANYING ACCRUED INTEREST AND CHARGES UNDER SECTIONS 2.12, 2.13
AND 2.15 (BORROWERS MAY ELECT WHICH OF ANY EURODOLLAR BORROWINGS IS TO BE
PREPAID); FIFTH, TO CASH COLLATERALIZE ALL LC EXPOSURES PLUS ANY ACCRUED AND
UNPAID FEES WITH RESPECT THERETO (TO BE HELD AND APPLIED IN ACCORDANCE WITH
SECTION 2.18(J) HEREOF); SIXTH, TO ALL OTHER OBLIGATIONS PRO RATA IN ACCORDANCE
WITH THE AMOUNTS THAT SUCH LENDER CERTIFIES IS OUTSTANDING; AND, SEVENTH,
RETURNED TO BORROWERS OR TO SUCH PARTY AS OTHERWISE REQUIRED BY LAW.  SUCH
MANDATORY PREPAYMENTS OF THE REVOLVING LOANS SHALL NOT CAUSE A CORRESPONDING
REDUCTION IN THE REVOLVING COMMITMENTS OF THE LENDERS.

 

(II)           AMOUNTS TO BE APPLIED PURSUANT TO THIS SECTION 2.10 TO THE
PREPAYMENT OF REVOLVING LOANS SHALL BE APPLIED FIRST TO REDUCE OUTSTANDING ABR
REVOLVING LOANS.  ANY AMOUNTS REMAINING AFTER SUCH APPLICATION SHALL BE APPLIED
TO PREPAY EURODOLLAR REVOLVING LOANS.  NOTWITHSTANDING THE FOREGOING, SO LONG AS
NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, IF THE AMOUNT OF ANY
PREPAYMENT OF LOANS REQUIRED UNDER THIS SECTION 2.10 SHALL BE IN EXCESS OF THE
AMOUNT OF THE ABR REVOLVING LOANS AT THE TIME OUTSTANDING, ONLY THE PORTION OF
THE AMOUNT OF SUCH PREPAYMENT AS IS EQUAL TO THE AMOUNT OF SUCH OUTSTANDING ABR
REVOLVING LOANS SHALL BE IMMEDIATELY PREPAID AND, AT THE ELECTION OF BORROWERS,
THE BALANCE OF SUCH REQUIRED PREPAYMENT SHALL BE PREPAID IMMEDIATELY, TOGETHER
WITH ANY AMOUNTS OWING TO THE LENDERS UNDER SECTION 2.13.

 

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(G)           NOTICE OF PREPAYMENT.  BORROWERS SHALL NOTIFY THE ADMINISTRATIVE
AGENT (AND, IN THE CASE OF PREPAYMENT OF A SWINGLINE LOAN, THE SWINGLINE LENDER)
BY TELEPHONE (CONFIRMED BY TELECOPY) OR BY EMAIL OF A SCANNED AND DULY EXECUTED
NOTICE OF ANY MANDATORY PREPAYMENT HEREUNDER (I) IN THE CASE OF PREPAYMENT OF A
EURODOLLAR BORROWING, NOT LATER THAN 11:00 A.M., NEW YORK CITY TIME, THREE
BUSINESS DAYS BEFORE THE DATE OF PREPAYMENT, (II) IN THE CASE OF PREPAYMENT OF
AN ABR BORROWING, NOT LATER THAN 11:00 A.M., NEW YORK CITY TIME, ON THE DATE OF
PREPAYMENT OR (III) IN THE CASE OF PREPAYMENT OF A SWINGLINE LOAN, NOT LATER
THAN 11:00 A.M., NEW YORK CITY TIME, ON THE DATE OF PREPAYMENT.  EACH SUCH
NOTICE SHALL BE IRREVOCABLE AND SHALL SPECIFY THE PREPAYMENT DATE, THE PRINCIPAL
AMOUNT OF EACH BORROWING OR PORTION THEREOF TO BE PREPAID AND, IN THE CASE OF A
MANDATORY PREPAYMENT, A REASONABLY DETAILED CALCULATION OF THE AMOUNT OF SUCH
PREPAYMENT.  PROMPTLY FOLLOWING RECEIPT OF ANY SUCH NOTICE (OTHER THAN A NOTICE
RELATING SOLELY TO SWINGLINE LOANS), THE ADMINISTRATIVE AGENT SHALL ADVISE THE
LENDERS OF THE CONTENTS THEREOF.  EACH PARTIAL PREPAYMENT OF ANY BORROWING SHALL
BE IN AN AMOUNT THAT WOULD BE PERMITTED IN THE CASE OF AN ADVANCE OF A BORROWING
OF THE SAME TYPE AS PROVIDED IN SECTION 2.02, EXCEPT AS NECESSARY TO APPLY FULLY
THE REQUIRED AMOUNT OF A MANDATORY PREPAYMENT.  EACH PREPAYMENT OF A BORROWING
SHALL BE APPLIED RATABLY TO THE LOANS INCLUDED IN THE PREPAID BORROWING. 
PREPAYMENTS SHALL BE ACCOMPANIED BY ACCRUED INTEREST TO THE EXTENT REQUIRED BY
SECTION 2.06.

 

SECTION 2.11  ALTERNATE RATE OF INTEREST.  IF PRIOR TO THE COMMENCEMENT OF ANY
INTEREST PERIOD FOR A EURODOLLAR BORROWING:

 

(A)           THE ADMINISTRATIVE AGENT DETERMINES (WHICH DETERMINATION SHALL BE
CONCLUSIVE ABSENT MANIFEST ERROR) THAT ADEQUATE AND REASONABLE MEANS DO NOT
EXIST FOR ASCERTAINING THE ADJUSTED LIBOR RATE FOR SUCH INTEREST PERIOD; OR

 

(B)           THE ADMINISTRATIVE AGENT IS ADVISED BY THE REQUIRED LENDERS THAT
THE ADJUSTED LIBOR RATE FOR SUCH INTEREST PERIOD WILL NOT ADEQUATELY AND FAIRLY
REFLECT THE COST TO SUCH LENDERS OF MAKING OR MAINTAINING THEIR LOANS INCLUDED
IN SUCH BORROWING FOR SUCH INTEREST PERIOD;

 

then the Administrative Agent shall give notice thereof to Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

 

SECTION 2.12  INCREASED COSTS.  (A)  IF ANY CHANGE IN LAW SHALL:

 

(I)            IMPOSE, MODIFY OR DEEM APPLICABLE ANY RESERVE, SPECIAL DEPOSIT OR
SIMILAR REQUIREMENT AGAINST ASSETS OF, DEPOSITS WITH OR FOR THE ACCOUNT OF, OR
CREDIT EXTENDED BY, ANY LENDER (EXCEPT ANY SUCH RESERVE REQUIREMENT REFLECTED IN
THE ADJUSTED LIBOR RATE) OR THE ISSUING BANK; OR

 

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(II)           IMPOSE ON ANY LENDER OR THE ISSUING BANK OR THE LONDON INTERBANK
MARKET ANY OTHER CONDITION AFFECTING THIS AGREEMENT OR EURODOLLAR REVOLVING
LOANS MADE BY SUCH LENDER OR ANY LETTER OF CREDIT OR PARTICIPATION THEREIN;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Revolving Loan (or of maintaining
its obligation to make any such Loan) or to increase the cost to such Lender or
the Issuing Bank of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by such Lender
or the Issuing Bank hereunder (whether of principal, interest or otherwise),
then Borrowers will pay to Administrative Agent for the account of such Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

 

(B)           IF ANY LENDER OR THE ISSUING BANK DETERMINES THAT ANY CHANGE IN
LAW AFFECTING SUCH LENDER OR ANY LENDING OFFICE OF SUCH LENDER OR SUCH LENDER’S
HOLDING COMPANY, IF ANY,  REGARDING CAPITAL REQUIREMENTS HAS OR WOULD HAVE THE
EFFECT OF REDUCING THE RATE OF RETURN ON SUCH LENDER’S OR THE ISSUING BANK’S
CAPITAL OR ON THE CAPITAL OF SUCH LENDER’S OR THE ISSUING BANK’S HOLDING
COMPANY, IF ANY, AS A CONSEQUENCE OF THIS AGREEMENT, THE COMMITMENTS OF SUCH
LENDER OR ISSUING BANK OR THE LOANS MADE BY, OR PARTICIPATIONS IN LETTERS OF
CREDIT HELD BY, SUCH LENDER, OR THE LETTERS OF CREDIT ISSUED BY THE ISSUING
BANK, TO A LEVEL BELOW THAT WHICH SUCH LENDER OR THE ISSUING BANK OR SUCH
LENDER’S OR THE ISSUING BANK’S HOLDING COMPANY COULD HAVE ACHIEVED BUT FOR SUCH
CHANGE IN LAW (TAKING INTO CONSIDERATION SUCH LENDER’S OR THE ISSUING BANK’S
POLICIES AND THE POLICIES OF SUCH LENDER’S OR THE ISSUING BANK’S HOLDING COMPANY
WITH RESPECT TO CAPITAL ADEQUACY), THEN FROM TIME TO TIME BORROWERS WILL PAY TO
SUCH LENDER OR THE ISSUING BANK, AS THE CASE MAY BE, SUCH ADDITIONAL AMOUNT OR
AMOUNTS AS WILL COMPENSATE SUCH LENDER OR THE ISSUING BANK OR SUCH LENDER’S OR
THE ISSUING BANK’S HOLDING COMPANY FOR ANY SUCH REDUCTION SUFFERED.

 

(C)           A CERTIFICATE OF A LENDER OR THE ISSUING BANK SETTING FORTH THE
AMOUNT OR AMOUNTS NECESSARY TO COMPENSATE SUCH LENDER OR THE ISSUING BANK OR ITS
HOLDING COMPANY, AS THE CASE MAY BE, AS SPECIFIED IN PARAGRAPH (A) OR (B) OF
THIS SECTION 2.12 SHALL BE DELIVERED TO BORROWERS AND SHALL BE CONCLUSIVE ABSENT
MANIFEST ERROR.  BORROWERS SHALL PAY ADMINISTRATIVE AGENT FOR THE ACCOUNT OF
SUCH LENDER OR THE ISSUING BANK, AS THE CASE MAY BE, THE AMOUNT SHOWN AS DUE ON
ANY SUCH CERTIFICATE WITHIN 10 DAYS AFTER RECEIPT THEREOF.

 

(D)           FAILURE OR DELAY ON THE PART OF ANY LENDER OR THE ISSUING BANK TO
DEMAND COMPENSATION PURSUANT TO THIS SECTION 2.12 SHALL NOT CONSTITUTE A WAIVER
OF SUCH LENDER’S OR THE ISSUING BANK’S RIGHT TO DEMAND SUCH COMPENSATION;
PROVIDED THAT BORROWERS SHALL NOT BE REQUIRED TO COMPENSATE A LENDER OR THE
ISSUING BANK PURSUANT TO THIS SECTION 2.12 FOR ANY INCREASED COSTS INCURRED OR
REDUCTIONS SUFFERED MORE THAN SIX MONTHS PRIOR TO THE DATE THAT SUCH LENDER OR
THE ISSUING BANK, AS THE CASE MAY BE, NOTIFIES BORROWERS OF THE CHANGE IN LAW
GIVING RISE TO SUCH INCREASED COSTS OR REDUCTIONS AND OF SUCH LENDER’S OR THE
ISSUING BANK’S INTENTION TO CLAIM COMPENSATION THEREFOR (EXCEPT THAT, IF THE
CHANGE IN LAW GIVING RISE TO SUCH INCREASED COSTS OR REDUCTIONS IS RETROACTIVE,
THEN THE SIX-MONTH PERIOD REFERRED TO ABOVE SHALL BE EXTENDED TO INCLUDE THE
PERIOD OF RETROACTIVE EFFECT THEREOF).

 

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SECTION 2.13  BREAKAGE PAYMENTS.  IN THE EVENT OF (A) THE PAYMENT OR PREPAYMENT,
WHETHER OPTIONAL OR MANDATORY, OF ANY PRINCIPAL OF ANY EURODOLLAR REVOLVING LOAN
OTHER THAN ON THE LAST DAY OF AN INTEREST PERIOD APPLICABLE THERETO (INCLUDING
AS A RESULT OF AN EVENT OF DEFAULT), (B) THE CONVERSION OF ANY EURODOLLAR
REVOLVING LOAN OTHER THAN ON THE LAST DAY OF THE INTEREST PERIOD APPLICABLE
THERETO, (C) THE FAILURE TO BORROW, CONVERT, CONTINUE OR PREPAY ANY REVOLVING
LOAN ON THE DATE SPECIFIED IN ANY NOTICE DELIVERED PURSUANT HERETO OR (D) THE
ASSIGNMENT OF ANY EURODOLLAR REVOLVING LOAN OTHER THAN ON THE LAST DAY OF THE
INTEREST PERIOD APPLICABLE THERETO AS A RESULT OF A REQUEST BY BORROWERS
PURSUANT TO SECTION 2.16, THEN, IN ANY SUCH EVENT, BORROWERS SHALL COMPENSATE
EACH LENDER FOR THE LOSS, COST AND EXPENSE ATTRIBUTABLE TO SUCH EVENT.  IN THE
CASE OF A EURODOLLAR REVOLVING LOAN, SUCH LOSS, COST OR EXPENSE TO ANY LENDER
SHALL BE DEEMED TO INCLUDE AN AMOUNT DETERMINED BY SUCH LENDER TO BE THE EXCESS,
IF ANY, OF (I) THE AMOUNT OF INTEREST WHICH WOULD HAVE ACCRUED ON THE PRINCIPAL
AMOUNT OF SUCH LOAN HAD SUCH EVENT NOT OCCURRED, AT THE ADJUSTED LIBOR RATE THAT
WOULD HAVE BEEN APPLICABLE TO SUCH LOAN, FOR THE PERIOD FROM THE DATE OF SUCH
EVENT TO THE LAST DAY OF THE THEN CURRENT INTEREST PERIOD THEREFOR (OR, IN THE
CASE OF A FAILURE TO BORROW, CONVERT OR CONTINUE, FOR THE PERIOD THAT WOULD HAVE
BEEN THE INTEREST PERIOD FOR SUCH LOAN), OVER (II) THE AMOUNT OF INTEREST WHICH
WOULD ACCRUE ON SUCH PRINCIPAL AMOUNT FOR SUCH PERIOD AT THE INTEREST RATE WHICH
SUCH LENDER WOULD BID WERE IT TO BID, AT THE COMMENCEMENT OF SUCH PERIOD, FOR
DOLLAR DEPOSITS OF A COMPARABLE AMOUNT AND PERIOD FROM OTHER BANKS IN THE
EURODOLLAR MARKET.  A CERTIFICATE OF ANY LENDER SETTING FORTH ANY AMOUNT OR
AMOUNTS THAT SUCH LENDER IS ENTITLED TO RECEIVE PURSUANT TO THIS SECTION 2.13
SHALL BE DELIVERED TO BORROWERS AND ADMINISTRATIVE AGENT AND SHALL BE CONCLUSIVE
AND BINDING ABSENT MANIFEST ERROR.  BORROWERS SHALL PAY ADMINISTRATIVE AGENT FOR
THE ACCOUNT OF SUCH LENDER THE AMOUNT SHOWN AS DUE ON ANY SUCH CERTIFICATE
WITHIN 10 DAYS AFTER RECEIPT THEREOF.

 

SECTION 2.14  PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.  (A)   BORROWERS SHALL MAKE EACH PAYMENT REQUIRED TO BE MADE BY THEM
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT (WHETHER OF PRINCIPAL, INTEREST, FEES
OR REIMBURSEMENT OF LC DISBURSEMENTS, OR OF AMOUNTS PAYABLE UNDER SECTION 2.12,
2.13 OR 2.15, OR OTHERWISE) ON OR BEFORE THE TIME EXPRESSLY REQUIRED HEREUNDER
OR UNDER SUCH OTHER LOAN DOCUMENT FOR SUCH PAYMENT (OR, IF NO SUCH TIME IS
EXPRESSLY REQUIRED, PRIOR TO 2:00 P.M., NEW YORK CITY TIME), ON THE DATE WHEN
DUE, IN IMMEDIATELY AVAILABLE FUNDS, WITHOUT SETOFF, DEDUCTION OR COUNTERCLAIM. 
ANY AMOUNTS RECEIVED AFTER SUCH TIME ON ANY DATE MAY, IN THE DISCRETION OF THE
ADMINISTRATIVE AGENT, BE DEEMED TO HAVE BEEN RECEIVED ON THE NEXT SUCCEEDING
BUSINESS DAY FOR PURPOSES OF CALCULATING INTEREST THEREON.  ALL SUCH PAYMENTS
SHALL BE MADE TO THE ADMINISTRATIVE AGENT AT ITS OFFICES AT 677 WASHINGTON
BOULEVARD, STAMFORD, CONNECTICUT, EXCEPT PAYMENTS TO BE MADE DIRECTLY TO THE
ISSUING BANK OR SWINGLINE LENDER AS EXPRESSLY PROVIDED HEREIN AND EXCEPT THAT
PAYMENTS PURSUANT TO SECTIONS 2.12, 2.13, 2.15 AND 11.03 SHALL BE MADE TO THE
ADMINISTRATIVE AGENT FOR THE BENEFIT OF TO THE PERSONS ENTITLED THERETO AND
PAYMENTS PURSUANT TO OTHER LOAN DOCUMENTS SHALL BE MADE TO THE ADMINISTRATIVE
AGENT FOR THE BENEFIT OF THE PERSONS SPECIFIED THEREIN.  THE ADMINISTRATIVE
AGENT SHALL DISTRIBUTE ANY SUCH PAYMENTS RECEIVED BY IT FOR THE ACCOUNT OF ANY
OTHER PERSON TO THE APPROPRIATE RECIPIENT PROMPTLY FOLLOWING RECEIPT THEREOF. 
IF ANY PAYMENT UNDER ANY LOAN DOCUMENT SHALL BE DUE ON A DAY THAT IS NOT A
BUSINESS DAY, THE DATE FOR PAYMENT SHALL BE EXTENDED TO THE NEXT SUCCEEDING
BUSINESS DAY, AND, IN THE CASE OF ANY PAYMENT ACCRUING INTEREST, INTEREST
THEREON SHALL BE PAYABLE FOR THE PERIOD OF SUCH EXTENSION.  ALL PAYMENTS UNDER
EACH LOAN DOCUMENT SHALL BE MADE IN DOLLARS.

 

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(B)           IF AT ANY TIME INSUFFICIENT FUNDS ARE RECEIVED BY AND AVAILABLE TO
THE ADMINISTRATIVE AGENT TO PAY FULLY ALL AMOUNTS OF PRINCIPAL, UNREIMBURSED LC
DISBURSEMENTS, INTEREST AND FEES THEN DUE HEREUNDER, SUCH FUNDS SHALL BE APPLIED
(I) FIRST, TOWARDS PAYMENT OF INTEREST AND FEES THEN DUE HEREUNDER, RATABLY
AMONG THE PARTIES ENTITLED THERETO IN ACCORDANCE WITH THE AMOUNTS OF INTEREST
AND FEES THEN DUE TO SUCH PARTIES, AND (II) SECOND, TOWARDS PAYMENT OF PRINCIPAL
AND UNREIMBURSED LC DISBURSEMENTS THEN DUE HEREUNDER, RATABLY AMONG THE PARTIES
ENTITLED THERETO IN ACCORDANCE WITH THE AMOUNTS OF PRINCIPAL AND UNREIMBURSED LC
DISBURSEMENTS THEN DUE TO SUCH PARTIES.

 

(C)           IF ANY LENDER SHALL, BY EXERCISING ANY RIGHT OF SETOFF OR
COUNTERCLAIM OR OTHERWISE, OBTAIN PAYMENT IN RESPECT OF ANY PRINCIPAL OF OR
INTEREST ON ANY OF ITS REVOLVING LOANS, OR PARTICIPATIONS IN LC DISBURSEMENTS OR
SWINGLINE LOANS RESULTING IN SUCH LENDER RECEIVING PAYMENT OF A GREATER
PROPORTION OF THE AGGREGATE AMOUNT OF ITS REVOLVING LOANS AND PARTICIPATIONS IN
LC DISBURSEMENTS AND SWINGLINE LOANS AND ACCRUED INTEREST THEREON THAN THE
PROPORTION RECEIVED BY ANY OTHER LENDER, THEN THE LENDER RECEIVING SUCH GREATER
PROPORTION SHALL PURCHASE (FOR CASH AT FACE VALUE) PARTICIPATIONS IN THE
REVOLVING LOANS AND PARTICIPATIONS IN LC DISBURSEMENTS AND SWINGLINE LOANS OF
OTHER LENDERS TO THE EXTENT NECESSARY SO THAT THE BENEFIT OF ALL SUCH PAYMENTS
SHALL BE SHARED BY THE LENDERS RATABLY IN ACCORDANCE WITH THE AGGREGATE AMOUNT
OF PRINCIPAL OF AND ACCRUED INTEREST ON THEIR RESPECTIVE REVOLVING LOANS AND
PARTICIPATIONS IN LC DISBURSEMENTS AND SWINGLINE LOANS; PROVIDED THAT (I) IF ANY
SUCH PARTICIPATIONS ARE PURCHASED AND ALL OR ANY PORTION OF THE PAYMENT GIVING
RISE THERETO IS RECOVERED, SUCH PARTICIPATIONS SHALL BE RESCINDED AND THE
PURCHASE PRICE RESTORED TO THE EXTENT OF SUCH RECOVERY, WITHOUT INTEREST, AND
(II) THE PROVISIONS OF THIS PARAGRAPH SHALL NOT BE CONSTRUED TO APPLY TO ANY
PAYMENT MADE BY BORROWERS PURSUANT TO AND IN ACCORDANCE WITH THE EXPRESS TERMS
OF THIS AGREEMENT OR ANY PAYMENT OBTAINED BY A LENDER AS CONSIDERATION FOR THE
ASSIGNMENT OF OR SALE OF A PARTICIPATION IN ANY OF ITS LOANS OR PARTICIPATIONS
IN LC DISBURSEMENTS TO ANY ASSIGNEE OR PARTICIPANT, OTHER THAN TO BORROWERS OR
ANY SUBSIDIARY OR AFFILIATE THEREOF (AS TO WHICH THE PROVISIONS OF THIS
PARAGRAPH SHALL APPLY).  EACH BORROWER CONSENTS TO THE FOREGOING AND AGREES, TO
THE EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THAT ANY LENDER
ACQUIRING A PARTICIPATION PURSUANT TO THE FOREGOING ARRANGEMENTS MAY EXERCISE
AGAINST BORROWERS RIGHTS OF SETOFF AND COUNTERCLAIM WITH RESPECT TO SUCH
PARTICIPATION AS FULLY AS IF SUCH LENDER WERE A DIRECT CREDITOR OF BORROWERS IN
THE AMOUNT OF SUCH PARTICIPATION.

 

(D)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM
BORROWERS PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO THE ADMINISTRATIVE
AGENT FOR THE ACCOUNT OF THE LENDERS OR THE ISSUING BANK HEREUNDER THAT
BORROWERS WILL NOT MAKE SUCH PAYMENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT
BORROWERS HAVE MADE SUCH PAYMENT ON SUCH DATE IN ACCORDANCE HEREWITH AND MAY, IN
RELIANCE UPON SUCH ASSUMPTION, DISTRIBUTE TO THE LENDERS OR THE ISSUING BANK, AS
THE CASE MAY BE, THE AMOUNT DUE.  IN SUCH EVENT, IF BORROWERS HAVE NOT IN FACT
MADE SUCH PAYMENT, THEN EACH OF THE LENDERS OR THE ISSUING BANK, AS THE CASE MAY
BE, SEVERALLY AGREES TO REPAY TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND
THE AMOUNT SO DISTRIBUTED TO SUCH LENDER OR ISSUING BANK WITH INTEREST THEREON,
FOR EACH DAY FROM AND INCLUDING THE DATE SUCH AMOUNT IS DISTRIBUTED TO IT TO BUT
EXCLUDING THE DATE OF PAYMENT TO THE ADMINISTRATIVE AGENT, AT THE GREATER OF THE
FEDERAL FUNDS EFFECTIVE RATE AND A RATE DETERMINED BY THE ADMINISTRATIVE AGENT
IN ACCORDANCE WITH BANKING INDUSTRY RULES ON INTERBANK COMPENSATION.

 

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(E)           IF ANY LENDER SHALL FAIL TO MAKE ANY PAYMENT REQUIRED TO BE MADE
BY IT PURSUANT TO SECTION 2.02(C), 2.02(F), 2.14(D), 2.17(D), 2.18(D) OR
11.03(D), THEN THE ADMINISTRATIVE AGENT MAY, IN ITS DISCRETION (NOTWITHSTANDING
ANY CONTRARY PROVISION HEREOF), APPLY ANY AMOUNTS THEREAFTER RECEIVED BY THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF SUCH LENDER TO SATISFY SUCH LENDER’S
OBLIGATIONS UNDER SUCH SECTIONS UNTIL ALL SUCH UNSATISFIED OBLIGATIONS ARE FULLY
PAID.

 

SECTION 2.15  TAXES.  (A)  ANY AND ALL PAYMENTS BY OR ON ACCOUNT OF ANY
OBLIGATION OF BORROWERS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT SHALL BE MADE
WITHOUT SET-OFF, COUNTERCLAIM OR OTHER DEFENSE AND FREE AND CLEAR OF AND WITHOUT
DEDUCTION OR WITHHOLDING FOR ANY AND ALL INDEMNIFIED TAXES; PROVIDED THAT IF A
BORROWER SHALL BE REQUIRED BY LAW TO DEDUCT ANY INDEMNIFIED TAXES FROM SUCH
PAYMENTS, THEN (I) THE SUM PAYABLE SHALL BE INCREASED AS NECESSARY SO THAT AFTER
MAKING ALL REQUIRED DEDUCTIONS (INCLUDING DEDUCTIONS OR WITHHOLDINGS APPLICABLE
TO ADDITIONAL SUMS PAYABLE UNDER THIS SECTION 2.15) THE ADMINISTRATIVE AGENT,
LENDER OR ISSUING BANK (AS THE CASE MAY BE) RECEIVES AN AMOUNT EQUAL TO THE SUM
IT WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS OR WITHHOLDINGS BEEN MADE,
(II) SUCH BORROWER SHALL MAKE SUCH DEDUCTIONS OR WITHHOLDINGS AND (III) SUCH
BORROWER SHALL PAY THE FULL AMOUNT DEDUCTED OR WITHHELD TO THE RELEVANT
GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(B)           IN ADDITION, BORROWERS SHALL PAY ANY OTHER TAXES TO THE RELEVANT
GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(C)           BORROWERS SHALL INDEMNIFY AND PAY THE ADMINISTRATIVE AGENT, EACH
LENDER AND THE ISSUING BANK, WITHIN 10 BUSINESS DAYS AFTER WRITTEN DEMAND
THEREFOR, FOR THE FULL AMOUNT OF ANY INDEMNIFIED TAXES OR OTHER TAXES PAID BY
THE ADMINISTRATIVE AGENT, SUCH LENDER OR THE ISSUING BANK, AS THE CASE MAY BE,
ON OR WITH RESPECT TO ANY PAYMENT BY OR ON ACCOUNT OF ANY OBLIGATION OF
BORROWERS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT (INCLUDING INDEMNIFIED
TAXES OR OTHER TAXES IMPOSED OR ASSERTED ON OR ATTRIBUTABLE TO AMOUNTS PAYABLE
UNDER THIS SECTION 2.15) AND ANY PENALTIES, INTEREST AND REASONABLE EXPENSES
ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH INDEMNIFIED TAXES
OR OTHER TAXES WERE CORRECTLY OR LEGALLY IMPOSED OR ASSERTED BY THE RELEVANT
GOVERNMENTAL AUTHORITY.  A CERTIFICATE AS TO THE AMOUNT OF SUCH PAYMENT OR
LIABILITY DELIVERED TO A BORROWER BY A LENDER OR THE ISSUING BANK, OR BY THE
ADMINISTRATIVE AGENT ON ITS OWN BEHALF OR ON BEHALF OF A LENDER OR THE ISSUING
BANK, SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.

 

(D)           AS SOON AS PRACTICABLE AFTER ANY PAYMENT OF INDEMNIFIED TAXES OR
OTHER TAXES BY A BORROWER TO A GOVERNMENTAL AUTHORITY, SUCH BORROWER SHALL
DELIVER TO THE ADMINISTRATIVE AGENT THE ORIGINAL OR A CERTIFIED COPY OF A
RECEIPT ISSUED BY SUCH GOVERNMENTAL AUTHORITY EVIDENCING SUCH PAYMENT, A COPY OF
THE RETURN REPORTING SUCH PAYMENT OR OTHER EVIDENCE OF SUCH PAYMENT REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(E)           ANY FOREIGN LENDER THAT IS ENTITLED TO AN EXEMPTION FROM OR
REDUCTION OF WITHHOLDING TAX UNDER THE LAW OF THE JURISDICTION IN WHICH A
BORROWER IS LOCATED, OR ANY TREATY TO WHICH SUCH JURISDICTION IS A PARTY, WITH
RESPECT TO PAYMENTS UNDER THIS AGREEMENT SHALL DELIVER TO BORROWERS (WITH A COPY
TO THE ADMINISTRATIVE AGENT), AT THE TIME OR TIMES PRESCRIBED BY APPLICABLE LAW,
SUCH PROPERLY COMPLETED AND EXECUTED DOCUMENTATION PRESCRIBED BY APPLICABLE LAW
OR REASONABLY REQUESTED BY BORROWERS AS WILL PERMIT SUCH PAYMENTS TO BE MADE
WITHOUT WITHHOLDING OR AT A REDUCED RATE.  IN THE CASE OF A U.S. BORROWER, EACH
FOREIGN LENDER EITHER (1) (I) AGREES TO FURNISH

 

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EITHER U.S. INTERNAL REVENUE SERVICE FORM W-8ECI OR U.S. INTERNAL REVENUE
SERVICE FORM W-8BEN (OR SUCCESSOR FORM) AND (II) AGREES (FOR THE BENEFIT OF
BORROWERS AND THE ADMINISTRATIVE AGENT), TO THE EXTENT IT MAY LAWFULLY DO SO AT
SUCH TIMES, UPON REASONABLE REQUEST BY BORROWERS OR THE ADMINISTRATIVE AGENT, TO
PROVIDE A NEW FORM W-8ECI OR FORM W-8BEN (OR SUCCESSOR FORM) UPON THE EXPIRATION
OR OBSOLESCENCE OF ANY PREVIOUSLY DELIVERED FORM TO RECONFIRM ANY COMPLETE
EXEMPTION FROM, OR ANY ENTITLEMENT TO A REDUCTION IN, U.S. FEDERAL WITHHOLDING
TAX WITH RESPECT TO ANY INTEREST PAYMENT HEREUNDER OR (2) IN THE CASE OF ANY
SUCH FOREIGN LENDER THAT IS NOT A “BANK” WITHIN THE MEANING OF
SECTION 881(C)(3)(A) OF THE CODE, (I) AGREES TO FURNISH EITHER (A) A “NON-BANK
CERTIFICATE” IN A FORM ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND THE BORROWERS
AND TWO ACCURATE AND COMPLETE ORIGINAL SIGNED COPIES OF INTERNAL REVENUE SERVICE
FORM W-8BEN (OR SUCCESSOR FORM) OR (B) AN INTERNAL REVENUE FORM W-8ECI (OR
SUCCESSOR FORM), CERTIFYING (IN EACH CASE) TO SUCH FOREIGN LENDER’S LEGAL
ENTITLEMENT TO AN EXEMPTION OR REDUCTION FROM U.S. FEDERAL WITHHOLDING TAX WITH
RESPECT TO ALL INTEREST PAYMENTS HEREUNDER AND (II) AGREES (FOR THE BENEFIT OF
BORROWERS AND THE ADMINISTRATIVE AGENT) TO THE EXTENT IT MAY LAWFULLY DO SO AT
SUCH TIMES, UPON REASONABLE REQUEST BY BORROWERS OR THE ADMINISTRATIVE AGENT, TO
PROVIDE A NEW FORM W-8BEN OR W-8ECI (OR SUCCESSOR FORM) UPON THE EXPIRATION OR
OBSOLESCENCE OF ANY PREVIOUSLY DELIVERED FORM TO RECONFIRM ANY COMPLETE
EXEMPTION FROM, OR ANY ENTITLEMENT TO A REDUCTION IN, U.S. FEDERAL WITHHOLDING
TAX WITH RESPECT TO ANY INTEREST PAYMENT HEREUNDER.

 

(F)            IF THE ADMINISTRATIVE AGENT OR A LENDER (OR AN ASSIGNEE)
DETERMINES IN ITS REASONABLE DISCRETION THAT IT HAS RECEIVED A REFUND OF ANY
INDEMNIFIED TAXES OR OTHER TAXES AS TO WHICH IT HAS BEEN INDEMNIFIED BY
BORROWERS OR WITH RESPECT TO WHICH A BORROWER HAS PAID ADDITIONAL AMOUNTS
PURSUANT TO THIS SECTION 2.15, IT SHALL PAY OVER SUCH REFUND TO BORROWERS (BUT
ONLY TO THE EXTENT OF INDEMNITY PAYMENTS MADE, OR ADDITIONAL AMOUNTS PAID, BY
SUCH BORROWER UNDER THIS SECTION 2.15 WITH RESPECT TO THE INDEMNIFIED TAXES OR
THE OTHER TAXES GIVING RISE TO SUCH REFUND), NET OF ALL OUT-OF-POCKET EXPENSES
OF THE ADMINISTRATIVE AGENT OR SUCH LENDER (OR ASSIGNEE) AND WITHOUT INTEREST
(OTHER THAN ANY INTEREST PAID BY THE RELEVANT GOVERNMENTAL AUTHORITY WITH
RESPECT TO SUCH REFUND); PROVIDED, HOWEVER, THAT BORROWERS, UPON THE REQUEST OF
THE ADMINISTRATIVE AGENT OR SUCH LENDER (OR ASSIGNEE), AGREE TO REPAY THE AMOUNT
PAID OVER TO BORROWERS (PLUS ANY PENALTIES, INTEREST OR OTHER CHARGES IMPOSED BY
THE RELEVANT GOVERNMENTAL AUTHORITY) TO THE ADMINISTRATIVE AGENT OR SUCH LENDER
(OR ASSIGNEE) IN THE EVENT THE ADMINISTRATIVE AGENT OR SUCH LENDER (OR ASSIGNEE)
IS REQUIRED TO REPAY SUCH REFUND TO SUCH GOVERNMENTAL AUTHORITY.  NOTHING
CONTAINED IN THIS SECTION 2.15(F) SHALL REQUIRE THE ADMINISTRATIVE AGENT OR ANY
LENDER (OR ASSIGNEE) TO MAKE AVAILABLE ITS TAX RETURNS OR ANY OTHER INFORMATION
WHICH IT DEEMS CONFIDENTIAL TO BORROWERS OR ANY OTHER PERSON.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY, IN NO EVENT WILL ANY LENDER BE REQUIRED TO PAY ANY
AMOUNT TO BORROWERS THE PAYMENT OF WHICH WOULD PLACE SUCH LENDER IN A LESS
FAVORABLE NET AFTER-TAX POSITION THAN SUCH LENDER WOULD HAVE BEEN IN HAD THE
ADDITIONAL AMOUNTS GIVING RISE TO SUCH REFUND OF ANY INDEMNIFIED TAXES OR OTHER
TAXES NEVER BEEN PAID IN THE FIRST PLACE.

 

SECTION 2.16  MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

 

(A)           MITIGATION OF OBLIGATIONS.  IF ANY LENDER REQUESTS COMPENSATION
UNDER SECTION 2.12, OR REQUIRES BORROWERS TO PAY ANY ADDITIONAL AMOUNT TO ANY
LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO
SECTION 2.15, THEN SUCH LENDER SHALL USE REASONABLE EFFORTS TO DESIGNATE A
DIFFERENT LENDING OFFICE FOR FUNDING OR BOOKING ITS LOANS HEREUNDER OR TO ASSIGN
ITS RIGHTS AND OBLIGATIONS HEREUNDER TO ANOTHER OF ITS OFFICES, BRANCHES OR

 

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AFFILIATES, IF, IN THE REASONABLE JUDGMENT OF SUCH LENDER, SUCH DESIGNATION OR
ASSIGNMENT (I) WOULD ELIMINATE OR REDUCE AMOUNTS PAYABLE PURSUANT TO
SECTION 2.12 OR 2.15, AS THE CASE MAY BE, IN THE FUTURE AND (II) WOULD NOT
SUBJECT SUCH LENDER TO ANY UNREIMBURSED COST OR EXPENSE AND WOULD NOT OTHERWISE
BE DISADVANTAGEOUS TO SUCH LENDER.  EACH BORROWER HEREBY AGREES TO PAY ALL
REASONABLE COSTS AND EXPENSES INCURRED BY ANY LENDER IN CONNECTION WITH ANY SUCH
DESIGNATION OR ASSIGNMENT.

 

(B)           REPLACEMENT OF LENDERS.  IF ANY LENDER REQUESTS COMPENSATION UNDER
SECTION 2.12, OR IF BORROWERS ARE REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY
LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO
SECTION 2.15, OR IF ANY LENDER DEFAULTS IN ITS OBLIGATION TO FUND LOANS
HEREUNDER, OR IF BORROWERS EXERCISE THEIR REPLACEMENT RIGHTS UNDER
SECTION 11.02(C)  THEN BORROWERS MAY, AT THEIR SOLE EXPENSE AND EFFORT, UPON
NOTICE TO SUCH LENDER AND THE ADMINISTRATIVE AGENT, REQUIRE SUCH LENDER TO
ASSIGN AND DELEGATE, WITHOUT RECOURSE (IN ACCORDANCE WITH AND SUBJECT TO THE
RESTRICTIONS CONTAINED IN SECTION 11.04), ALL OF ITS INTERESTS, RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO AN ASSIGNEE
SELECTED BY BORROWERS THAT SHALL ASSUME SUCH OBLIGATIONS (WHICH ASSIGNEE MAY BE
ANOTHER LENDER, IF A LENDER ACCEPTS SUCH ASSIGNMENT); PROVIDED THAT
(I) BORROWERS SHALL HAVE RECEIVED THE PRIOR WRITTEN CONSENT OF THE
ADMINISTRATIVE AGENT (AND, IF A REVOLVING COMMITMENT IS BEING ASSIGNED, THE
ISSUING BANK AND SWINGLINE LENDER), WHICH CONSENT SHALL NOT UNREASONABLY BE
WITHHELD OR DELAYED, (II) SUCH LENDER SHALL HAVE RECEIVED PAYMENT OF AN AMOUNT
EQUAL TO THE OUTSTANDING PRINCIPAL OF ITS LOANS AND PARTICIPATIONS IN LC
DISBURSEMENTS AND SWINGLINE LOANS, ACCRUED INTEREST THEREON, ACCRUED FEES AND
ALL OTHER AMOUNTS PAYABLE TO IT HEREUNDER, FROM THE ASSIGNEE (TO THE EXTENT OF
SUCH OUTSTANDING PRINCIPAL AND ACCRUED INTEREST AND FEES) OR BORROWERS (IN THE
CASE OF ALL OTHER AMOUNTS) AND (III) IN THE CASE OF ANY SUCH ASSIGNMENT
RESULTING FROM A CLAIM FOR COMPENSATION UNDER SECTION 2.12 OR PAYMENTS REQUIRED
TO BE MADE PURSUANT TO SECTION 2.15, SUCH ASSIGNMENT WILL RESULT IN A MATERIAL
REDUCTION IN SUCH COMPENSATION OR PAYMENTS.  A LENDER SHALL NOT BE REQUIRED TO
MAKE ANY SUCH ASSIGNMENT AND DELEGATION IF, PRIOR THERETO, AS A RESULT OF A
WAIVER BY SUCH LENDER OR OTHERWISE, THE CIRCUMSTANCES ENTITLING BORROWERS TO
REQUIRE SUCH ASSIGNMENT AND DELEGATION CEASE TO APPLY.

 

SECTION 2.17  SWINGLINE LOANS.

 

(A)           SWINGLINE COMMITMENT.  SUBJECT TO THE TERMS AND CONDITIONS SET
FORTH HEREIN, THE SWINGLINE LENDER AGREES TO MAKE SWINGLINE LOANS TO BORROWERS
FROM TIME TO TIME DURING THE REVOLVING AVAILABILITY PERIOD, IN AN AGGREGATE
PRINCIPAL AMOUNT AT ANY TIME OUTSTANDING THAT WILL NOT RESULT IN THE AGGREGATE
PRINCIPAL AMOUNT OF OUTSTANDING SWINGLINE LOANS EXCEEDING $20.0 MILLION, AND
PROVIDED THAT AFTER MAKING A SWINGLINE LOAN, THE SUM OF THE TOTAL REVOLVING
EXPOSURES SHALL NOT EXCEED THE LESSER OF (A) THE TOTAL REVOLVING COMMITMENTS AND
(B) THE BORROWING BASE THEN IN EFFECT; PROVIDED THAT THE SWINGLINE LENDER SHALL
NOT BE REQUIRED TO MAKE A SWINGLINE LOAN TO REFINANCE AN OUTSTANDING SWINGLINE
LOAN.  WITHIN THE FOREGOING LIMITS AND SUBJECT TO THE TERMS AND CONDITIONS SET
FORTH HEREIN, BORROWERS MAY BORROW, REPAY AND REBORROW SWINGLINE LOANS.

 

(B)           SWINGLINE LOANS.  TO REQUEST A SWINGLINE LOAN, BORROWERS SHALL
NOTIFY THE ADMINISTRATIVE AGENT OF SUCH REQUEST BY TELEPHONE (CONFIRMED BY
TELECOPY), NOT LATER THAN 2:00 P.M., NEW YORK CITY TIME, ON THE DAY OF A
PROPOSED SWINGLINE LOAN.  EACH SUCH NOTICE SHALL BE IRREVOCABLE AND SHALL
SPECIFY THE REQUESTED DATE (WHICH SHALL BE A BUSINESS DAY), THE ACCOUNT TO

 

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WHICH SUCH SWINGLINE LOAN IS DEPOSITED AND AMOUNT OF THE REQUESTED SWINGLINE
LOAN.  THE ADMINISTRATIVE AGENT WILL PROMPTLY ADVISE THE SWINGLINE LENDER OF ANY
SUCH NOTICE RECEIVED FROM BORROWERS.  THE SWINGLINE LENDER SHALL MAKE EACH
SWINGLINE LOAN AVAILABLE TO BORROWERS BY MEANS OF A CREDIT TO THE ACCOUNT OF
BORROWERS DIRECTED BY BORROWERS IN THE APPLICABLE REQUEST FOR THE SWINGLINE
LOANS (OR, IN THE CASE OF A SWINGLINE LOAN MADE TO FINANCE THE REIMBURSEMENT OF
AN LC DISBURSEMENT AS PROVIDED IN SECTION 2.18(E), BY REMITTANCE TO THE ISSUING
BANK) BY 3:00 P.M., NEW YORK CITY TIME, ON THE REQUESTED DATE OF SUCH SWINGLINE
LOAN.  BORROWERS SHALL NOT REQUEST A SWINGLINE LOAN IF AT THE TIME OF AND
IMMEDIATELY AFTER GIVING EFFECT TO SUCH REQUEST A DEFAULT HAS OCCURRED AND IS
CONTINUING.  SWINGLINE LOANS SHALL BE MADE IN MINIMUM AMOUNTS OF $100,000 AND
INTEGRAL MULTIPLES OF $100,000 ABOVE SUCH AMOUNT.

 

(C)           PREPAYMENT.  BORROWERS SHALL HAVE THE RIGHT AT ANY TIME AND FROM
TIME TO TIME TO REPAY ANY SWINGLINE LOAN, IN WHOLE OR IN PART, UPON GIVING
WRITTEN OR TELECOPY NOTICE (OR TELEPHONE NOTICE PROMPTLY CONFIRMED BY WRITTEN,
OR TELECOPY NOTICE) TO THE SWINGLINE LENDER AND TO THE ADMINISTRATIVE AGENT
BEFORE 1:00 P.M., NEW YORK CITY TIME ON THE DATE OF REPAYMENT AT THE SWINGLINE
LENDER’S ADDRESS FOR NOTICES SPECIFIED IN THE SWINGLINE LENDER’S ADMINISTRATIVE
QUESTIONNAIRE.  ALL PRINCIPAL PAYMENTS OF SWINGLINE LOANS SHALL BE ACCOMPANIED
BY ACCRUED INTEREST ON THE PRINCIPAL AMOUNT BEING REPAID TO THE DATE OF PAYMENT.

 

(D)           PARTICIPATIONS.  THE SWINGLINE LENDER MAY BY WRITTEN NOTICE GIVEN
TO THE ADMINISTRATIVE AGENT NOT LATER THAN 12:00 NOON, NEW YORK CITY TIME, ON
ANY BUSINESS DAY REQUIRE THE REVOLVING LENDERS TO ACQUIRE PARTICIPATIONS ON SUCH
BUSINESS DAY IN ALL OR A PORTION OF THE SWINGLINE LOANS OUTSTANDING; PROVIDED,
THAT, THE SWINGLINE LENDER SHALL REQUIRE THAT THE REVOLVING LENDERS ACQUIRE
PARTICIPATIONS IN ALL OF THE SWINGLINE LOANS OUTSTANDING AT LEAST ONCE WEEKLY. 
SUCH NOTICE SHALL SPECIFY THE AGGREGATE AMOUNT OF SWINGLINE LOANS IN WHICH
REVOLVING LENDERS WILL PARTICIPATE.  PROMPTLY UPON RECEIPT OF SUCH NOTICE, THE
ADMINISTRATIVE AGENT WILL GIVE NOTICE THEREOF TO EACH REVOLVING LENDER,
SPECIFYING IN SUCH NOTICE SUCH LENDER’S PRO RATA PERCENTAGE OF SUCH SWINGLINE
LOAN OR LOANS.  EACH REVOLVING LENDER HEREBY ABSOLUTELY AND UNCONDITIONALLY
AGREES, UPON RECEIPT OF NOTICE AS PROVIDED ABOVE, TO PAY TO THE ADMINISTRATIVE
AGENT, FOR THE ACCOUNT OF THE SWINGLINE LENDER, SUCH LENDER’S PRO RATA
PERCENTAGE OF SUCH SWINGLINE LOAN OR LOANS.  EACH REVOLVING LENDER ACKNOWLEDGES
AND AGREES THAT ITS OBLIGATION TO ACQUIRE PARTICIPATIONS IN SWINGLINE LOANS
PURSUANT TO THIS PARAGRAPH IS ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE
AFFECTED BY ANY CIRCUMSTANCE WHATSOEVER, INCLUDING THE OCCURRENCE AND
CONTINUANCE OF A DEFAULT OR REDUCTION OR TERMINATION OF THE COMMITMENTS, AND
THAT EACH SUCH PAYMENT SHALL BE MADE WITHOUT ANY OFFSET, ABATEMENT, WITHHOLDING
OR REDUCTION WHATSOEVER (PROVIDED THAT SUCH PAYMENT SHALL NOT CAUSE SUCH
LENDER’S REVOLVING EXPOSURE TO EXCEED SUCH LENDER’S REVOLVING COMMITMENT).  EACH
REVOLVING LENDER SHALL COMPLY WITH ITS OBLIGATION UNDER THIS PARAGRAPH BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS, IN THE SAME MANNER AS PROVIDED IN
SECTION 2.02(F) WITH RESPECT TO LOANS MADE BY SUCH LENDER (AND SECTION 2.02
SHALL APPLY, MUTATIS MUTANDIS, TO THE PAYMENT OBLIGATIONS OF THE REVOLVING
LENDERS), AND THE ADMINISTRATIVE AGENT SHALL PROMPTLY PAY TO THE SWINGLINE
LENDER THE AMOUNTS SO RECEIVED BY IT FROM THE REVOLVING LENDERS.  THE
ADMINISTRATIVE AGENT SHALL NOTIFY BORROWERS OF ANY PARTICIPATIONS IN ANY
SWINGLINE LOAN ACQUIRED PURSUANT TO THIS PARAGRAPH, AND THEREAFTER PAYMENTS IN
RESPECT OF SUCH SWINGLINE LOAN SHALL BE MADE TO THE ADMINISTRATIVE AGENT AND NOT
TO THE SWINGLINE LENDER.  ANY AMOUNTS RECEIVED BY THE SWINGLINE LENDER FROM
BORROWERS (OR OTHER PARTY ON BEHALF OF A BORROWER) IN RESPECT OF A SWINGLINE
LOAN AFTER RECEIPT BY THE SWINGLINE LENDER OF THE PROCEEDS OF A SALE OF
PARTICIPATIONS THEREIN SHALL BE PROMPTLY REMITTED TO

 

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THE ADMINISTRATIVE AGENT; ANY SUCH AMOUNTS RECEIVED BY THE ADMINISTRATIVE AGENT
SHALL BE PROMPTLY REMITTED BY THE ADMINISTRATIVE AGENT TO THE REVOLVING LENDERS
THAT SHALL HAVE MADE THEIR PAYMENTS PURSUANT TO THIS PARAGRAPH AND TO THE
SWINGLINE LENDER, AS THEIR INTERESTS MAY APPEAR.  THE PURCHASE OF PARTICIPATIONS
IN A SWINGLINE LOAN PURSUANT TO THIS PARAGRAPH SHALL NOT RELIEVE BORROWERS OF
ANY DEFAULT IN THE PAYMENT THEREOF.

 

SECTION 2.18  LETTERS OF CREDIT.

 

(A)           GENERAL.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN,
BORROWERS MAY REQUEST THE ISSUANCE OF LETTERS OF CREDIT FOR BORROWERS’ ACCOUNT
OR THE ACCOUNT OF A SUBSIDIARY IN A FORM REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT AND THE ISSUING BANK, AT ANY TIME AND FROM TIME TO TIME
DURING THE REVOLVING AVAILABILITY PERIOD (PROVIDED THAT THE APPLICABLE BORROWER
SHALL BE A CO-APPLICANT WITH RESPECT TO EACH LETTER OF CREDIT ISSUED FOR THE
ACCOUNT OF OR IN FAVOR OF A SUBSIDIARY).  IN THE EVENT OF ANY INCONSISTENCY
BETWEEN THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THE TERMS AND CONDITIONS
OF ANY FORM OF LETTER OF CREDIT APPLICATION OR OTHER AGREEMENT SUBMITTED BY
BORROWERS TO, OR ENTERED INTO BY BORROWERS WITH, THE ISSUING BANK RELATING TO
ANY LETTER OF CREDIT, THE TERMS AND CONDITIONS OF THIS AGREEMENT SHALL CONTROL. 
THE LETTERS OF CREDIT ISSUED BY JPMORGAN CHASE BANK, N.A. SET FORTH ON
SCHEDULE 2.18 SHALL, ON THE CLOSING DATE, BE DEEMED ISSUED HEREUNDER AND SHALL
CONSTITUTE LETTERS OF CREDIT.

 

(B)           REQUEST FOR ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS.  TO REQUEST THE ISSUANCE OF A LETTER OF CREDIT OR THE AMENDMENT,
RENEWAL OR EXTENSION OF AN OUTSTANDING LETTER OF CREDIT, BORROWERS SHALL HAND
DELIVER OR TELECOPY (OR TRANSMIT BY ELECTRONIC COMMUNICATION, IF ARRANGEMENTS
FOR DOING SO HAVE BEEN APPROVED BY THE ISSUING BANK) AN LC REQUEST TO THE
ISSUING BANK AND THE ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M. ON THE THIRD
BUSINESS DAY PRECEDING THE REQUESTED DATE OF ISSUANCE, AMENDMENT, RENEWAL OR
EXTENSION, OR SUCH LATER DATE AND TIME AS IS ACCEPTABLE TO THE ISSUING BANK.  A
REQUEST FOR AN INITIAL ISSUANCE OF A LETTER OF CREDIT SHALL SPECIFY IN FORM AND
DETAIL SATISFACTORY TO THE ISSUING BANK:  (I) THE PROPOSED ISSUANCE DATE OF THE
REQUESTED LETTER OF CREDIT (WHICH SHALL BE A BUSINESS DAY); (II) THE AMOUNT
THEREOF; (III) THE EXPIRY DATE THEREOF; (IV) THE NAME AND ADDRESS OF THE
BENEFICIARY THEREOF; (V) THE DOCUMENTS TO BE PRESENTED BY SUCH BENEFICIARY IN
CASE OF ANY DRAWING THEREUNDER; (VI) THE FULL TEXT OF ANY CERTIFICATE TO BE
PRESENTED BY SUCH BENEFICIARY IN CASE OF ANY DRAWING THEREUNDER; AND (VII) SUCH
OTHER MATTERS AS THE ISSUING BANK MAY REQUIRE.  A REQUEST FOR AN AMENDMENT,
RENEWAL OR EXTENSION OF ANY OUTSTANDING LETTER OF CREDIT SHALL SPECIFY IN FORM
AND DETAIL SATISFACTORY TO THE ISSUING BANK (I) THE LETTER OF CREDIT TO BE
AMENDED, RENEWED OR EXTENDED; (II) THE PROPOSED DATE OF AMENDMENT, RENEWAL OR
EXTENSION THEREOF (WHICH SHALL BE A BUSINESS DAY); (III) THE NATURE OF THE
PROPOSED AMENDMENT, RENEWAL OR EXTENSION; AND (IV) SUCH OTHER MATTERS AS THE
ISSUING BANK MAY REQUIRE.  IF REQUESTED BY THE ISSUING BANK, BORROWERS ALSO
SHALL SUBMIT A LETTER OF CREDIT APPLICATION ON THE ISSUING BANK’S STANDARD FORM
IN CONNECTION WITH ANY REQUEST FOR A LETTER OF CREDIT.  A LETTER OF CREDIT SHALL
BE ISSUED, AMENDED, RENEWED OR EXTENDED ONLY IF (AND UPON ISSUANCE, AMENDMENT,
RENEWAL OR EXTENSION OF EACH LETTER OF CREDIT BORROWERS SHALL BE DEEMED TO
REPRESENT AND WARRANT THAT), AFTER GIVING EFFECT TO SUCH ISSUANCE, AMENDMENT,
RENEWAL OR EXTENSION (I) THE LC EXPOSURE SHALL NOT EXCEED $20.0 MILLION AND
(II) THE TOTAL REVOLVING EXPOSURES SHALL NOT EXCEED THE LESSER OF (A) THE TOTAL
REVOLVING COMMITMENTS AND (B) THE TOTAL BORROWING BASE THEN IN EFFECT.  UNLESS
THE ISSUING BANK SHALL AGREE OTHERWISE, NO LETTER OF CREDIT SHALL BE IN AN
INITIAL AMOUNT LESS THAN $100,000, IN THE CASE OF A COMMERCIAL LETTER OF CREDIT,
OR $500,000, IN THE CASE OF A STANDBY LETTER OF CREDIT.

 

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(C)           EXPIRATION DATE.  EACH LETTER OF CREDIT SHALL EXPIRE AT OR PRIOR
TO THE CLOSE OF BUSINESS ON THE EARLIER OF (I) IN THE CASE OF A STANDBY LETTER
OF CREDIT, (X) THE DATE WHICH IS ONE YEAR AFTER THE DATE OF THE ISSUANCE OF SUCH
STANDBY LETTER OF CREDIT (OR, IN THE CASE OF ANY RENEWAL OR EXTENSION THEREOF,
ONE YEAR AFTER SUCH RENEWAL OR EXTENSION) AND (Y) THE LETTER OF CREDIT
EXPIRATION DATE AND (II) IN THE CASE OF A COMMERCIAL LETTER OF CREDIT, (X) THE
DATE THAT IS ONE YEAR AFTER THE DATE OF ISSUANCE OF SUCH COMMERCIAL LETTER OF
CREDIT (OR, IN THE CASE OF ANY RENEWAL OR EXTENSION THEREOF, ONE YEAR AFTER SUCH
RENEWAL OR EXTENSION) AND (Y) THE LETTER OF CREDIT EXPIRATION DATE.

 

(D)           PARTICIPATIONS.  BY THE ISSUANCE OF A LETTER OF CREDIT (OR AN
AMENDMENT TO A LETTER OF CREDIT INCREASING THE AMOUNT THEREOF) AND WITHOUT ANY
FURTHER ACTION ON THE PART OF THE ISSUING BANK OR THE LENDERS, THE ISSUING BANK
HEREBY GRANTS TO EACH REVOLVING LENDER, AND EACH REVOLVING LENDER HEREBY
ACQUIRES FROM THE ISSUING BANK, A PARTICIPATION IN SUCH LETTER OF CREDIT EQUAL
TO SUCH LENDER’S PRO RATA PERCENTAGE OF THE AGGREGATE AMOUNT AVAILABLE TO BE
DRAWN UNDER SUCH LETTER OF CREDIT.  IN CONSIDERATION AND IN FURTHERANCE OF THE
FOREGOING, EACH REVOLVING LENDER HEREBY ABSOLUTELY AND UNCONDITIONALLY AGREES TO
PAY TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE ISSUING BANK, SUCH
LENDER’S PRO RATA PERCENTAGE OF EACH LC DISBURSEMENT MADE BY THE ISSUING BANK
AND NOT REIMBURSED BY BORROWERS ON THE DATE DUE AS PROVIDED IN PARAGRAPH (E) OF
THIS SECTION 2.18, OR OF ANY REIMBURSEMENT PAYMENT REQUIRED TO BE REFUNDED TO
BORROWERS FOR ANY REASON.  EACH LENDER ACKNOWLEDGES AND AGREES THAT ITS
OBLIGATION TO ACQUIRE PARTICIPATIONS PURSUANT TO THIS PARAGRAPH IN RESPECT OF
LETTERS OF CREDIT IS ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE AFFECTED BY ANY
CIRCUMSTANCE WHATSOEVER, INCLUDING ANY AMENDMENT, RENEWAL OR EXTENSION OF ANY
LETTER OF CREDIT OR THE OCCURRENCE AND CONTINUANCE OF A DEFAULT OR REDUCTION OR
TERMINATION OF THE COMMITMENTS, AND THAT EACH SUCH PAYMENT SHALL BE MADE WITHOUT
ANY OFFSET, ABATEMENT, WITHHOLDING OR REDUCTION WHATSOEVER.

 

(E)           REIMBURSEMENT.  IF THE ISSUING BANK SHALL MAKE ANY LC DISBURSEMENT
IN RESPECT OF A LETTER OF CREDIT, BORROWERS SHALL REIMBURSE SUCH LC DISBURSEMENT
BY PAYING TO THE ISSUING BANK AN AMOUNT EQUAL TO SUCH LC DISBURSEMENT NOT LATER
THAN 2:00 P.M., NEW YORK CITY TIME, ON THE DATE THAT SUCH LC DISBURSEMENT IS
MADE, IF BORROWERS SHALL HAVE RECEIVED NOTICE OF SUCH LC DISBURSEMENT PRIOR TO
11:00 A.M., NEW YORK CITY TIME, ON SUCH DATE, OR, IF SUCH NOTICE HAS NOT BEEN
RECEIVED BY BORROWERS PRIOR TO SUCH TIME, ON SUCH DATE, THEN NOT LATER THAN
2:00 P.M., NEW YORK CITY TIME ON (I) THE BUSINESS DAY THAT BORROWERS RECEIVE
SUCH NOTICE, IF SUCH NOTICE IS RECEIVED PRIOR TO 11:00 A.M., NEW YORK CITY TIME,
ON THE DAY OF RECEIPT, OR (II) THE BUSINESS DAY IMMEDIATELY FOLLOWING THE DAY
THAT BORROWERS RECEIVE SUCH NOTICE, IF SUCH NOTICE IS NOT RECEIVED PRIOR TO SUCH
TIME ON THE DAY OF RECEIPT; PROVIDED THAT BORROWERS MAY, SUBJECT TO THE
CONDITIONS TO BORROWING SET FORTH HEREIN, REQUEST IN ACCORDANCE WITH
SECTION 2.03 OR 2.17 THAT SUCH PAYMENT BE FINANCED WITH AN ABR REVOLVING
BORROWING IN AN EQUIVALENT AMOUNT AND, TO THE EXTENT SO FINANCED, BORROWERS’
OBLIGATION TO MAKE SUCH PAYMENT SHALL BE DISCHARGED AND REPLACED BY THE
RESULTING ABR REVOLVING BORROWING.  IF BORROWERS FAIL TO MAKE SUCH PAYMENT WHEN
DUE, THE ISSUING BANK SHALL NOTIFY THE ADMINISTRATIVE AGENT AND THE
ADMINISTRATIVE AGENT SHALL NOTIFY EACH REVOLVING LENDER OF THE APPLICABLE LC
DISBURSEMENT, THE PAYMENT THEN DUE FROM BORROWERS IN RESPECT THEREOF AND SUCH
LENDER’S PRO RATA PERCENTAGE THEREOF.  PROMPTLY FOLLOWING RECEIPT OF SUCH
NOTICE, EACH REVOLVING LENDER SHALL PAY TO THE ADMINISTRATIVE AGENT ITS PRO RATA
PERCENTAGE OF THE UNREIMBURSED LC DISBURSEMENT IN THE SAME MANNER AS PROVIDED IN
SECTION 2.02(F) WITH RESPECT TO LOANS MADE BY SUCH LENDER, AND THE
ADMINISTRATIVE AGENT SHALL PROMPTLY PAY TO THE ISSUING BANK THE AMOUNTS SO
RECEIVED BY IT FROM THE REVOLVING LENDERS.  PROMPTLY

 

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FOLLOWING RECEIPT BY THE ADMINISTRATIVE AGENT OF ANY PAYMENT FROM BORROWERS
PURSUANT TO THIS PARAGRAPH, THE ADMINISTRATIVE AGENT SHALL, TO THE EXTENT THAT
REVOLVING LENDERS HAVE MADE PAYMENTS PURSUANT TO THIS PARAGRAPH TO REIMBURSE THE
ISSUING BANK, DISTRIBUTE SUCH PAYMENT TO SUCH LENDERS AND THE ISSUING BANK AS
THEIR INTERESTS MAY APPEAR.  ANY PAYMENT MADE BY A REVOLVING LENDER PURSUANT TO
THIS PARAGRAPH TO REIMBURSE THE ISSUING BANK FOR ANY LC DISBURSEMENT (OTHER THAN
THE FUNDING OF ABR REVOLVING LOANS AS CONTEMPLATED ABOVE) SHALL NOT CONSTITUTE A
LOAN AND SHALL NOT RELIEVE BORROWERS OF ITS OBLIGATION TO REIMBURSE SUCH LC
DISBURSEMENT.

 

(F)            OBLIGATIONS ABSOLUTE.  THE OBLIGATION OF BORROWERS TO REIMBURSE
LC DISBURSEMENTS AS PROVIDED IN PARAGRAPH (E) OF THIS SECTION 2.18 SHALL BE
ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PERFORMED STRICTLY IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT UNDER ANY AND ALL CIRCUMSTANCES
WHATSOEVER AND IRRESPECTIVE OF (I) ANY LACK OF VALIDITY OR ENFORCEABILITY OF ANY
LETTER OF CREDIT OR THIS AGREEMENT, OR ANY TERM OR PROVISION THEREIN, (II) ANY
DRAFT OR OTHER DOCUMENT PRESENTED UNDER A LETTER OF CREDIT PROVING TO BE FORGED,
FRAUDULENT OR INVALID IN ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR
INACCURATE IN ANY RESPECT, (III) PAYMENT BY THE ISSUING BANK UNDER A LETTER OF
CREDIT AGAINST PRESENTATION OF A DRAFT OR OTHER DOCUMENT THAT DOES NOT COMPLY
WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (IV) ANY OTHER EVENT OR CIRCUMSTANCE
WHATSOEVER, WHETHER OR NOT SIMILAR TO ANY OF THE FOREGOING, THAT MIGHT, BUT FOR
THE PROVISIONS OF THIS SECTION 2.18, CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE
OF, OR PROVIDE A RIGHT OF SETOFF AGAINST, THE OBLIGATIONS OF BORROWERS
HEREUNDER.  NEITHER THE ADMINISTRATIVE AGENT, ANY OTHER AGENT, THE LENDERS NOR
THE ISSUING BANK, NOR ANY OF THEIR AFFILIATES, SHALL HAVE ANY LIABILITY OR
RESPONSIBILITY BY REASON OF OR IN CONNECTION WITH THE ISSUANCE OR TRANSFER OF
ANY LETTER OF CREDIT OR ANY PAYMENT OR FAILURE TO MAKE ANY PAYMENT THEREUNDER
(IRRESPECTIVE OF ANY OF THE CIRCUMSTANCES REFERRED TO IN THE PRECEDING
SENTENCE), OR ANY ERROR, OMISSION, INTERRUPTION, LOSS OR DELAY IN TRANSMISSION
OR DELIVERY OF ANY DRAFT, NOTICE OR OTHER COMMUNICATION UNDER OR RELATING TO ANY
LETTER OF CREDIT (INCLUDING ANY DOCUMENT REQUIRED TO MAKE A DRAWING THEREUNDER),
ANY ERROR IN INTERPRETATION OF TECHNICAL TERMS OR ANY CONSEQUENCE ARISING FROM
CAUSES BEYOND THE CONTROL OF THE ISSUING BANK; PROVIDED THAT THE FOREGOING SHALL
NOT BE CONSTRUED TO EXCUSE THE ISSUING BANK FROM LIABILITY TO BORROWERS TO THE
EXTENT OF ANY DIRECT DAMAGES (AS OPPOSED TO CONSEQUENTIAL DAMAGES, CLAIMS IN
RESPECT OF WHICH ARE HEREBY WAIVED BY BORROWERS TO THE EXTENT PERMITTED BY
APPLICABLE LAW) SUFFERED BY BORROWERS THAT ARE CAUSED BY THE ISSUING BANK’S
FAILURE TO EXERCISE CARE WHEN DETERMINING WHETHER DRAFTS AND OTHER DOCUMENTS
PRESENTED UNDER A LETTER OF CREDIT COMPLY WITH THE TERMS THEREOF.  THE PARTIES
HERETO EXPRESSLY AGREE THAT, IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT ON THE PART OF THE ISSUING BANK (AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION), THE ISSUING BANK SHALL BE DEEMED TO HAVE EXERCISED CARE
IN EACH SUCH DETERMINATION.  IN FURTHERANCE OF THE FOREGOING AND WITHOUT
LIMITING THE GENERALITY THEREOF, THE PARTIES AGREE THAT, WITH RESPECT TO
DOCUMENTS PRESENTED WHICH APPEAR ON THEIR FACE TO BE IN SUBSTANTIAL COMPLIANCE
WITH THE TERMS OF A LETTER OF CREDIT, THE ISSUING BANK MAY, IN ITS SOLE
DISCRETION, EITHER ACCEPT AND MAKE PAYMENT UPON SUCH DOCUMENTS WITHOUT
RESPONSIBILITY FOR FURTHER INVESTIGATION, REGARDLESS OF ANY NOTICE OR
INFORMATION TO THE CONTRARY, OR REFUSE TO ACCEPT AND MAKE PAYMENT UPON SUCH
DOCUMENTS IF SUCH DOCUMENTS ARE NOT IN STRICT COMPLIANCE WITH THE TERMS OF SUCH
LETTER OF CREDIT.

 

(G)           DISBURSEMENT PROCEDURES.  THE ISSUING BANK SHALL, PROMPTLY
FOLLOWING ITS RECEIPT THEREOF, EXAMINE ALL DOCUMENTS PURPORTING TO REPRESENT A
DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT.  THE ISSUING BANK SHALL PROMPTLY
NOTIFY THE ADMINISTRATIVE AGENT AND BORROWERS BY

 

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TELEPHONE (CONFIRMED BY TELECOPY) OF SUCH DEMAND FOR PAYMENT AND WHETHER THE
ISSUING BANK HAS MADE OR WILL MAKE AN LC DISBURSEMENT THEREUNDER; PROVIDED THAT
ANY FAILURE TO GIVE OR DELAY IN GIVING SUCH NOTICE SHALL NOT RELIEVE BORROWERS
OF ITS OBLIGATION TO REIMBURSE THE ISSUING BANK AND THE REVOLVING LENDERS WITH
RESPECT TO ANY SUCH LC DISBURSEMENT (OTHER THAN WITH RESPECT TO THE TIMING OF
SUCH REIMBURSEMENT OBLIGATION SET FORTH IN SECTION 2.18(E)).

 

(H)           INTERIM INTEREST.  IF THE ISSUING BANK SHALL MAKE ANY LC
DISBURSEMENT, THEN, UNLESS BORROWERS SHALL REIMBURSE SUCH LC DISBURSEMENT IN
FULL ON THE DATE SUCH LC DISBURSEMENT IS MADE, THE UNPAID AMOUNT THEREOF SHALL
BEAR INTEREST, FOR EACH DAY FROM AND INCLUDING THE DATE SUCH LC DISBURSEMENT IS
MADE TO BUT EXCLUDING THE DATE THAT BORROWERS REIMBURSE SUCH LC DISBURSEMENT, AT
THE RATE PER ANNUM THEN APPLICABLE TO ABR REVOLVING LOANS; PROVIDED THAT, IF
BORROWERS FAIL TO REIMBURSE SUCH LC DISBURSEMENT WHEN DUE PURSUANT TO PARAGRAPH
(E) OF THIS SECTION 2.18, THEN SECTION 2.06(C) SHALL APPLY.  INTEREST ACCRUED
PURSUANT TO THIS PARAGRAPH SHALL BE FOR THE ACCOUNT OF THE ISSUING BANK, EXCEPT
THAT INTEREST ACCRUED ON AND AFTER THE DATE OF PAYMENT BY ANY REVOLVING LENDER
PURSUANT TO PARAGRAPH (E) OF THIS SECTION 2.18 TO REIMBURSE THE ISSUING BANK
SHALL BE FOR THE ACCOUNT OF SUCH LENDER TO THE EXTENT OF SUCH PAYMENT.

 

(I)            RESIGNATION OR REMOVAL OF THE ISSUING BANK.  THE ISSUING BANK MAY
RESIGN AS ISSUING BANK HEREUNDER AT ANY TIME UPON AT LEAST 30 DAYS’ PRIOR NOTICE
TO THE LENDERS, THE ADMINISTRATIVE AGENT AND BORROWERS.  THE ISSUING BANK MAY BE
REPLACED AT ANY TIME BY WRITTEN AGREEMENT AMONG BORROWERS, THE ADMINISTRATIVE
AGENT, THE REPLACED ISSUING BANK AND THE SUCCESSOR ISSUING BANK.  ONE OR MORE
LENDERS MAY BE APPOINTED AS ADDITIONAL ISSUING BANKS IN ACCORDANCE WITH
SUBSECTION (K) BELOW.  THE ADMINISTRATIVE AGENT SHALL NOTIFY THE LENDERS OF ANY
SUCH REPLACEMENT OF THE ISSUING BANK OR ANY SUCH ADDITIONAL ISSUING BANK.  AT
THE TIME ANY SUCH RESIGNATION OR REPLACEMENT SHALL BECOME EFFECTIVE, BORROWERS
SHALL PAY ALL UNPAID FEES ACCRUED FOR THE ACCOUNT OF THE REPLACED ISSUING BANK
PURSUANT TO SECTION 2.05(C).  FROM AND AFTER THE EFFECTIVE DATE OF ANY SUCH
RESIGNATION OR REPLACEMENT OR ADDITION, AS APPLICABLE, (I) THE SUCCESSOR OR
ADDITIONAL ISSUING BANK SHALL HAVE ALL THE RIGHTS AND OBLIGATIONS OF THE ISSUING
BANK UNDER THIS AGREEMENT WITH RESPECT TO LETTERS OF CREDIT TO BE ISSUED
THEREAFTER AND (II) REFERENCES HEREIN TO THE TERM “ISSUING BANK” SHALL BE DEEMED
TO REFER TO SUCH SUCCESSOR OR SUCH ADDITION OR TO ANY PREVIOUS ISSUING BANK, OR
TO SUCH SUCCESSOR OR SUCH ADDITIONAL ISSUING BANK AND ALL PREVIOUS ISSUING
BANKS, AS THE CONTEXT SHALL REQUIRE.  AFTER THE RESIGNATION OR REPLACEMENT OF AN
ISSUING BANK HEREUNDER, THE REPLACED ISSUING BANK SHALL REMAIN A PARTY HERETO
AND SHALL CONTINUE TO HAVE ALL THE RIGHTS AND OBLIGATIONS OF AN ISSUING BANK
UNDER THIS AGREEMENT WITH RESPECT TO LETTERS OF CREDIT ISSUED BY IT PRIOR TO
SUCH RESIGNATION OR REPLACEMENT, BUT SHALL NOT BE REQUIRED TO ISSUE ADDITIONAL
LETTERS OF CREDIT.  IF AT ANY TIME THERE IS MORE THAN ONE ISSUING BANK
HEREUNDER, BORROWERS MAY, IN THEIR DISCRETION, SELECT WHICH ISSUING BANK IS TO
ISSUE ANY PARTICULAR LETTER OF CREDIT.

 

(J)            CASH COLLATERALIZATION.  IF ANY EVENT OF DEFAULT SHALL OCCUR AND
BE CONTINUING, ON THE BUSINESS DAY THAT BORROWERS RECEIVE NOTICE FROM THE
ADMINISTRATIVE AGENT, COLLATERAL AGENT OR THE REQUIRED LENDERS (OR, IF THE
MATURITY OF THE LOANS HAS BEEN ACCELERATED, REVOLVING LENDERS WITH LC EXPOSURE
REPRESENTING GREATER THAN 50% OF THE TOTAL LC EXPOSURE) DEMANDING THE DEPOSIT OF
CASH COLLATERAL PURSUANT TO THIS PARAGRAPH, BORROWERS SHALL DEPOSIT IN THE LC
COLLATERAL ACCOUNT, IN THE NAME OF THE ADMINISTRATIVE AGENT OR THE COLLATERAL
AGENT, AS APPLICABLE FOR THE BENEFIT OF THE SECURED PARTIES, AN AMOUNT IN CASH
EQUAL TO 105% OF THE LC EXPOSURE AS OF SUCH DATE PLUS ANY ACCRUED AND UNPAID
INTEREST THEREON; PROVIDED THAT THE OBLIGATION TO DEPOSIT SUCH

 

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CASH COLLATERAL SHALL BECOME EFFECTIVE IMMEDIATELY, AND SUCH DEPOSIT SHALL
BECOME IMMEDIATELY DUE AND PAYABLE, WITHOUT DEMAND OR OTHER NOTICE OF ANY KIND,
UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT WITH RESPECT TO BORROWERS DESCRIBED
IN CLAUSE (G) OR (H) OF ARTICLE VIII.  EACH SUCH DEPOSIT SHALL BE HELD BY THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT AS COLLATERAL FOR THE PAYMENT AND
PERFORMANCE OF THE OBLIGATIONS OF BORROWERS UNDER THIS AGREEMENT.  THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, AS APPLICABLE, SHALL HAVE
EXCLUSIVE DOMINION AND CONTROL, INCLUDING THE EXCLUSIVE RIGHT OF WITHDRAWAL,
OVER SUCH ACCOUNT.  OTHER THAN ANY INTEREST EARNED ON THE INVESTMENT OF SUCH
DEPOSITS, WHICH INVESTMENTS SHALL BE MADE AT THE OPTION AND SOLE DISCRETION OF
THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, AS APPLICABLE, AND AT THE RISK
AND EXPENSE OF BORROWERS, SUCH DEPOSITS SHALL NOT BEAR INTEREST.  INTEREST OR
PROFITS, IF ANY, ON SUCH INVESTMENTS SHALL ACCUMULATE IN SUCH ACCOUNT.  MONEYS
IN SUCH ACCOUNT SHALL BE APPLIED BY ADMINISTRATIVE AGENT AND THE COLLATERAL
AGENT TO REIMBURSE THE ISSUING BANK FOR LC DISBURSEMENTS FOR WHICH IT HAS NOT
BEEN REIMBURSED AND, TO THE EXTENT NOT SO APPLIED, SHALL BE HELD FOR THE
SATISFACTION OF THE REIMBURSEMENT OBLIGATIONS OF BORROWERS FOR THE LC EXPOSURE
AT SUCH TIME OR, IF THE MATURITY OF THE LOANS HAS BEEN ACCELERATED (BUT SUBJECT
TO THE CONSENT OF REVOLVING LENDERS WITH LC EXPOSURE REPRESENTING GREATER THAN
50% OF THE TOTAL LC EXPOSURE), BE APPLIED TO SATISFY OTHER OBLIGATIONS OF
BORROWERS UNDER THIS AGREEMENT.  IF BORROWERS ARE REQUIRED TO PROVIDE AN AMOUNT
OF CASH COLLATERAL HEREUNDER AS A RESULT OF THE OCCURRENCE OF AN EVENT OF
DEFAULT, SUCH AMOUNT PLUS ANY ACCRUED INTEREST OR REALIZED PROFITS OF SUCH
AMOUNTS (TO THE EXTENT NOT APPLIED AS AFORESAID) SHALL BE RETURNED TO BORROWERS
WITHIN THREE BUSINESS DAYS AFTER ALL EVENTS OF DEFAULT HAVE BEEN CURED OR
WAIVED.  IF BORROWERS ARE REQUIRED TO PROVIDE AN AMOUNT OF SUCH COLLATERAL
HEREUNDER PURSUANT TO SECTION 2.10(A), SUCH AMOUNT PLUS ANY ACCRUED INTEREST OR
REALIZED PROFITS ON ACCOUNT OF SUCH AMOUNT (TO THE EXTENT NOT APPLIED AS
AFORESAID) SHALL BE RETURNED TO BORROWERS AS AND TO THE EXTENT THAT, AFTER
GIVING EFFECT TO SUCH RETURN, BORROWERS WOULD REMAIN IN COMPLIANCE WITH
SECTION 2.10(A) AND NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING.

 

(K)           ADDITIONAL ISSUING BANKS.  BORROWERS MAY, AT ANY TIME AND FROM
TIME TO TIME WITH THE CONSENT OF THE ADMINISTRATIVE AGENT (WHICH CONSENT SHALL
NOT BE UNREASONABLY WITHHELD) AND SUCH LENDER, DESIGNATE ONE OR MORE ADDITIONAL
LENDERS TO ACT AS AN ISSUING BANK UNDER THE TERMS OF THIS AGREEMENT.  ANY LENDER
DESIGNATED AS AN ISSUING BANK PURSUANT TO THIS PARAGRAPH (K) SHALL BE DEEMED (IN
ADDITION TO BEING A LENDER) TO BE THE ISSUING BANK WITH RESPECT TO LETTERS OF
CREDIT ISSUED OR TO BE ISSUED BY SUCH LENDER, AND ALL REFERENCES HEREIN AND IN
THE OTHER LOAN DOCUMENTS TO THE TERM “ISSUING BANK” SHALL, WITH RESPECT TO SUCH
LETTERS OF CREDIT, BE DEEMED TO REFER TO SUCH LENDER IN ITS CAPACITY AS ISSUING
BANK, AS THE CONTEXT SHALL REQUIRE.

 

(L)            THE ISSUING BANK SHALL BE UNDER NO OBLIGATION TO ISSUE ANY LETTER
OF CREDIT IF:

 

(I)            ANY ORDER, JUDGMENT OR DECREE OF ANY GOVERNMENTAL AUTHORITY OR
ARBITRATOR SHALL BY ITS TERMS PURPORT TO ENJOIN OR RESTRAIN THE ISSUING BANK
FROM ISSUING SUCH LETTER OF CREDIT, OR ANY LAW APPLICABLE TO THE ISSUING BANK OR
ANY REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF LAW) FROM ANY
GOVERNMENTAL AUTHORITY WITH JURISDICTION OVER THE ISSUING BANK SHALL PROHIBIT,
OR REQUEST THAT THE ISSUING BANK REFRAIN FROM, THE ISSUANCE OF LETTERS OF CREDIT
GENERALLY OR SUCH LETTER OF CREDIT IN PARTICULAR OR SHALL IMPOSE UPON THE
ISSUING BANK WITH RESPECT TO SUCH LETTER OF CREDIT ANY RESTRICTION, RESERVE OR
CAPITAL REQUIREMENT (FOR WHICH THE ISSUING BANK IS NOT OTHERWISE COMPENSATED
HEREUNDER) NOT IN EFFECT ON THE CLOSING DATE, OR SHALL IMPOSE UPON THE ISSUING
BANK ANY UNREIMBURSED LOSS,

 

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COST OR EXPENSE WHICH WAS NOT APPLICABLE ON THE CLOSING DATE AND WHICH THE
ISSUING BANK IN GOOD FAITH DEEMS MATERIAL TO IT; OR

 

(II)           THE ISSUANCE OF SUCH LETTER OF CREDIT WOULD VIOLATE ONE OR MORE
POLICIES OF THE ISSUING BANK.

 

(M)          THE ISSUING BANK SHALL BE UNDER NO OBLIGATION TO AMEND ANY LETTER
OF CREDIT IF (I) THE ISSUING BANK WOULD HAVE NO OBLIGATION AT SUCH TIME TO ISSUE
SUCH LETTER OF CREDIT IN ITS AMENDED FORM UNDER THE TERMS HEREOF, OR (II) THE
BENEFICIARY OF SUCH LETTER OF CREDIT DOES NOT ACCEPT THE PROPOSED AMENDMENT TO
SUCH LETTER OF CREDIT.

 

SECTION 2.19  DETERMINATION OF BORROWING BASE.

 

(A)   ELIGIBLE ACCOUNTS.  ON ANY DATE OF DETERMINATION OF THE BORROWING BASE,
ALL OF THE ACCOUNTS OWNED BY EACH BORROWER AND REFLECTED IN THE MOST RECENT
BORROWING BASE CERTIFICATE DELIVERED BY THE BORROWERS TO THE ADMINISTRATIVE
AGENT AND THE COLLATERAL AGENT SHALL BE “ELIGIBLE ACCOUNTS” FOR THE PURPOSES OF
THIS AGREEMENT, EXCEPT ANY ACCOUNT TO WHICH ANY OF THE EXCLUSIONARY CRITERIA SET
FORTH BELOW APPLIES.  IN ADDITION, THE ADMINISTRATIVE AGENT OR THE COLLATERAL
AGENT SHALL HAVE THE RIGHT FROM TIME TO TIME IN THEIR REASONABLE CREDIT JUDGMENT
TO ESTABLISH, MODIFY OR ELIMINATE RESERVES AGAINST ELIGIBLE ACCOUNTS, TO ADJUST
ANY OF THE CRITERIA SET FORTH BELOW AND TO ESTABLISH NEW CRITERIA WITH RESPECT
TO ELIGIBLE ACCOUNTS, SUBJECT TO THE APPROVAL OF THE SUPERMAJORITY LENDERS IN
THE CASE OF ANY ADJUSTMENT OF CRITERIA OR ESTABLISHMENT OF NEW CRITERIA WHICH
HAVE THE EFFECT OF MAKING MORE CREDIT AVAILABLE.  ELIGIBLE ACCOUNTS SHALL NOT
INCLUDE ANY OF THE FOLLOWING ACCOUNTS:

 

(I)            ANY ACCOUNT IN WHICH THE ADMINISTRATIVE AGENT, ON BEHALF OF THE
SECURED PARTIES, DOES NOT HAVE A PERFECTED, FIRST PRIORITY AND, OTHER THAN THE
SECOND PRIORITY LIEN SECURING THE TERM LOAN INDEBTEDNESS, EXCLUSIVE LIEN;

 

(II)           ANY ACCOUNT THAT IS NOT OWNED BY A BORROWER;

 

(III)          ANY ACCOUNT DUE FROM AN ACCOUNT DEBTOR THAT IS NOT DOMICILED IN
THE UNITED STATES OR CANADA (OTHER THAN THE PROVINCES OF QUEBEC, NEWFOUNDLAND,
NUNAVUT AND THE NORTHWEST TERRITORIES) AND (IF NOT A NATURAL PERSON) ORGANIZED
UNDER THE LAWS OF THE UNITED STATES OR CANADA (OTHER THAN THE PROVINCES OF
QUEBEC, NEWFOUNDLAND, NUNAVUT AND THE NORTHWEST TERRITORIES) OR ANY POLITICAL
SUBDIVISION THEREOF (OTHER THAN THE PROVINCES OF QUEBEC, NEWFOUNDLAND, NUNAVUT
AND THE NORTHWEST TERRITORIES);

 

(IV)          ANY ACCOUNT THAT IS PAYABLE IN ANY CURRENCY OTHER THAN DOLLARS OR
CANADIAN DOLLARS; PROVIDED, THAT, NOT MORE THAN THE CANADIAN DOLLAR EQUIVALENT
OF $6,000,000 OF ACCOUNTS PAYABLE IN CANADIAN DOLLARS SHALL BE ELIGIBLE
ACCOUNTS; PROVIDED, FURTHER, THAT THE BORROWING BASE CERTIFICATE SHALL SET FORTH
THE U.S. DOLLAR EQUIVALENT OF SUCH CANADIAN DOLLAR ELIGIBLE ACCOUNTS AND THE
METHODOLOGY FOR CALCULATING SUCH U.S. DOLLAR EQUIVALENT SHALL BE ACCEPTABLE TO
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT;

 

(V)           ANY ACCOUNT THAT DOES NOT ARISE FROM THE SALE OF GOODS OR THE
PERFORMANCE OF SERVICES BY SUCH BORROWER IN THE ORDINARY COURSE OF ITS BUSINESS;

 

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(VI)                              ANY ACCOUNT THAT DOES NOT COMPLY WITH ALL
APPLICABLE LEGAL REQUIREMENTS, INCLUDING, WITHOUT LIMITATION, ALL LAWS, RULES,
REGULATIONS AND ORDERS OF ANY GOVERNMENTAL AUTHORITY;

 

(VII)                           ANY ACCOUNT (A) TO THE EXTENT THAT BORROWERS’
RIGHT TO RECEIVE PAYMENT IS NOT ABSOLUTE OR IS CONTINGENT UPON THE FULFILLMENT
OF ANY CONDITION WHATSOEVER UNLESS SUCH CONDITION IS SATISFIED OR (B) AS TO
WHICH BORROWERS ARE NOT ABLE TO BRING SUIT OR OTHERWISE ENFORCE ITS REMEDIES
AGAINST THE ACCOUNT DEBTOR THROUGH JUDICIAL OR ADMINISTRATIVE PROCESS OR
(C) THAT REPRESENTS A PROGRESS BILLING CONSISTING OF AN INVOICE FOR GOODS SOLD
OR USED OR SERVICES RENDERED PURSUANT TO A CONTRACT UNDER WHICH THE ACCOUNT
DEBTOR’S OBLIGATION TO PAY THAT INVOICE IS SUBJECT TO THE BORROWERS’ COMPLETION
OF FURTHER PERFORMANCE UNDER SUCH CONTRACT OR IS SUBJECT TO THE EQUITABLE LIEN
OF A SURETY BOND ISSUER;

 

(VIII)                        TO THE EXTENT THAT ANY DEFENSE, COUNTERCLAIM,
SETOFF OR DISPUTE IS ASSERTED AS TO SUCH ACCOUNT, IT BEING UNDERSTOOD THAT THE
REMAINING BALANCE OF THE ACCOUNT SHALL BE ELIGIBLE;

 

(IX)                                ANY ACCOUNT THAT IS NOT A TRUE AND CORRECT
STATEMENT OF BONA FIDE INDEBTEDNESS INCURRED IN THE AMOUNT OF THE ACCOUNT FOR
MERCHANDISE SOLD TO OR SERVICES RENDERED AND ACCEPTED BY THE APPLICABLE ACCOUNT
DEBTOR;

 

(X)                                   ANY ACCOUNT WITH RESPECT TO WHICH AN
INVOICE OR OTHER ELECTRONIC TRANSMISSION CONSTITUTING A REQUEST FOR PAYMENT,
REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT IN
FORM AND SUBSTANCE, HAS NOT BEEN SENT ON A TIMELY BASIS TO THE APPLICABLE
ACCOUNT DEBTOR ACCORDING TO THE NORMAL INVOICING AND TIMING PROCEDURES OF
BORROWERS;

 

(XI)                                ANY ACCOUNT THAT ARISES FROM A SALE TO ANY
DIRECTOR, OFFICER, OTHER EMPLOYEE OR AFFILIATE OF A BORROWER, OR TO ANY ENTITY
THAT HAS ANY COMMON OFFICER OR DIRECTOR WITH ANY BORROWER;

 

(XII)                             TO THE EXTENT A BORROWER OR ANY SUBSIDIARY IS
LIABLE FOR GOODS SOLD OR SERVICES RENDERED BY THE APPLICABLE ACCOUNT DEBTOR TO
SUCH BORROWER OR ANY SUBSIDIARY BUT ONLY TO THE EXTENT OF THE POTENTIAL OFFSET;

 

(XIII)                          ANY ACCOUNT THAT ARISES WITH RESPECT TO GOODS
THAT ARE DELIVERED ON A BILL-AND-HOLD, CASH-ON-DELIVERY BASIS OR PLACED ON
CONSIGNMENT, GUARANTEED SALE OR OTHER TERMS BY REASON OF WHICH THE PAYMENT BY
THE ACCOUNT DEBTOR IS OR MAY BE CONDITIONAL;

 

(XIV)                         ANY ACCOUNT THAT IS IN DEFAULT; PROVIDED THAT,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AN ACCOUNT SHALL BE DEEMED IN
DEFAULT UPON THE OCCURRENCE OF ANY OF THE FOLLOWING:

 

(a)                                  any Account other than a Specified Dated
Account not paid within 120 days following its original invoice date or that is
more than 60 days past due according to its original terms of sale, or any
Specified Dated Account that is more than 40 days past due according to its
original terms of sale; or

 

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(b)                                 the Account Debtor obligated upon such
Account suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or

 

(c)                                  a petition is filed by or against any
Account Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership, insolvency
relief or other law or laws for the relief of debtors;

 

(XV)                            ANY ACCOUNT THAT IS THE OBLIGATION OF AN ACCOUNT
DEBTOR (OTHER THAN AN INDIVIDUAL) IF 50% OR MORE OF THE DOLLAR AMOUNT OF ALL
ACCOUNTS OWING BY THAT ACCOUNT DEBTOR ARE INELIGIBLE UNDER THE OTHER CRITERIA
SET FORTH IN THIS SECTION 2.19(A);

 

(XVI)                         ANY ACCOUNT AS TO WHICH ANY OF THE REPRESENTATIONS
OR WARRANTIES IN THE LOAN DOCUMENTS ARE UNTRUE;

 

(XVII)                      TO THE EXTENT SUCH ACCOUNT IS EVIDENCED BY A
JUDGMENT, INSTRUMENT OR CHATTEL PAPER;

 

(XVIII)                   TO THE EXTENT SUCH ACCOUNT EXCEEDS ANY CREDIT LIMIT
ESTABLISHED BY THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT, IN THEIR
REASONABLE CREDIT JUDGMENT, FOLLOWING PRIOR NOTICE OF SUCH LIMIT BY THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT TO THE BORROWERS;

 

(XIX)                           THAT PORTION OF ANY ACCOUNT (A) IN RESPECT OF
WHICH THERE HAS BEEN, OR SHOULD HAVE BEEN, ESTABLISHED BY A BORROWER A CONTRA
ACCOUNT, WHETHER IN RESPECT OF CONTRACTUAL ALLOWANCES WITH RESPECT TO SUCH
ACCOUNT, AUDIT ADJUSTMENT, ANTICIPATED DISCOUNTS OR OTHERWISE, OR (B) WHICH IS
DUE FROM AN ACCOUNT DEBTOR TO WHOM A BORROWER OWES A TRADE PAYABLE, BUT ONLY TO
THE EXTENT OF SUCH TRADE PAYABLE OR (C) WHICH A BORROWER KNOWS IS SUBJECT TO THE
EXERCISE BY AN ACCOUNT DEBTOR OF ANY RIGHT OF RESCISSION, SET-OFF, RECOUPMENT,
COUNTERCLAIM OR DEFENSE;

 

(XX)                              ANY ACCOUNT ACQUIRED AS PART OF A PERMITTED
ACQUISITION UNLESS AND UNTIL THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SHALL BE SATISFIED AS TO ITS ELIGIBILITY; OR

 

(XXI)                           ANY ACCOUNT ON WHICH THE ACCOUNT DEBTOR IS A
GOVERNMENTAL AUTHORITY, UNLESS THE APPLICABLE BORROWER HAS ASSIGNED ITS RIGHTS
TO PAYMENT OF SUCH ACCOUNT TO THE ADMINISTRATIVE AGENT, ON BEHALF OF THE SECURED
PARTIES, PURSUANT TO THE ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED, IN THE
CASE OF A FEDERAL GOVERNMENTAL AUTHORITY, AND PURSUANT TO APPLICABLE LAW, IF
ANY, IN THE CASE OF ANY OTHER GOVERNMENTAL AUTHORITY, AND SUCH ASSIGNMENT HAS
BEEN ACCEPTED AND ACKNOWLEDGED BY THE APPROPRIATE GOVERNMENT OFFICERS.

 

(B)                                 ELIGIBLE INVENTORY.  ON ANY DATE OF
DETERMINATION OF THE BORROWING BASE, ALL OF THE INVENTORY OWNED BY EACH BORROWER
AND REFLECTED IN THE MOST RECENT BORROWING BASE CERTIFICATE DELIVERED BY THE
BORROWERS TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT SHALL BE
“ELIGIBLE INVENTORY” FOR THE PURPOSES OF THIS AGREEMENT, EXCEPT ANY INVENTORY TO
WHICH ANY OF THE EXCLUSIONARY CRITERIA SET FORTH BELOW APPLIES.  IN ADDITION,
THE ADMINISTRATIVE AGENT OR THE

 

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COLLATERAL AGENT SHALL HAVE THE RIGHT FROM TIME TO TIME IN THEIR REASONABLE
CREDIT JUDGMENT TO ESTABLISH, MODIFY OR ELIMINATE RESERVES AGAINST ELIGIBLE
INVENTORY, TO ADJUST ANY OF THE CRITERIA SET FORTH BELOW AND TO ESTABLISH NEW
CRITERIA WITH RESPECT TO ELIGIBLE INVENTORY, SUBJECT TO THE APPROVAL OF THE
SUPERMAJORITY LENDERS IN THE CASE OF ANY ADJUSTMENT OF CRITERIA OR ESTABLISHMENT
OF NEW CRITERIA WHICH HAVE THE EFFECT OF MAKING MORE CREDIT AVAILABLE.  ELIGIBLE
INVENTORY SHALL NOT INCLUDE ANY INVENTORY THAT:

 

(I)                                     THE ADMINISTRATIVE AGENT, ON BEHALF OF
SECURED PARTIES, DOES NOT HAVE A PERFECTED, FIRST PRIORITY AND, OTHER THAN THE
SECOND PRIORITY LIEN SECURING THE TERM LOAN INDEBTEDNESS, EXCLUSIVE LIEN UPON;

 

(II)                                  (A) IS STORED AT A LOCATION WHERE THE
AGGREGATE VALUE OF INVENTORY EXCEEDS $250,000 UNLESS THE ADMINISTRATIVE AGENT
AND THE COLLATERAL AGENT HAVE GIVEN THEIR PRIOR CONSENT THERETO AND UNLESS
EITHER (X) A REASONABLY SATISFACTORY LANDLORD LIEN WAIVER AND ACCESS AGREEMENT
HAS BEEN DELIVERED TO THE ADMINISTRATIVE AGENT, OR (Y) RESERVES REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT HAVE BEEN
ESTABLISHED WITH RESPECT THERETO OR (B) IS STORED WITH A BAILEE OR WAREHOUSEMAN
WHERE THE AGGREGATE VALUE OF INVENTORY EXCEEDS $250,000 UNLESS EITHER (X) A
REASONABLY SATISFACTORY, ACKNOWLEDGED BAILEE WAIVER LETTER HAS BEEN RECEIVED BY
THE ADMINISTRATIVE AGENT OR (Y) RESERVES REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT HAVE BEEN ESTABLISHED WITH RESPECT
THERETO, OR (C) IS LOCATED AT AN OWNED LOCATION SUBJECT TO A MORTGAGE IN FAVOR
OF A LENDER OTHER THAN THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT WHERE
THE AGGREGATE VALUE OF INVENTORY EXCEEDS $250,000 UNLESS EITHER (X) A REASONABLY
SATISFACTORY MORTGAGEE WAIVER HAS BEEN DELIVERED TO THE ADMINISTRATIVE AGENT OR
(Y) RESERVES REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT HAVE BEEN ESTABLISHED WITH RESPECT THERETO;

 

(III)                               IS PLACED ON CONSIGNMENT, UNLESS A VALID
CONSIGNMENT AGREEMENT WHICH IS REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT
AND THE COLLATERAL AGENT IS IN PLACE WITH RESPECT TO SUCH INVENTORY;

 

(IV)                              IS IN TRANSIT, UNLESS SUCH INVENTORY
CONSTITUTES ELIGIBLE IN-TRANSIT INVENTORY;

 

(V)                                 IS COVERED BY A NEGOTIABLE DOCUMENT OF TITLE
(OTHER THAN ELIGIBLE IN-TRANSIT INVENTORY), UNLESS SUCH DOCUMENT HAS BEEN
DELIVERED TO THE ADMINISTRATIVE AGENT WITH ALL NECESSARY ENDORSEMENTS, FREE AND
CLEAR OF ALL LIENS EXCEPT THOSE IN FAVOR OF THE ADMINISTRATIVE AGENT AND THE
LENDERS AND LANDLORDS, CARRIERS, BAILEES AND WAREHOUSEMEN IF CLAUSE (II) ABOVE
HAS BEEN COMPLIED WITH;

 

(VI)                              IS TO BE RETURNED TO SUPPLIERS;

 

(VII)                           IS OBSOLETE, UNSALABLE, SHOPWORN, DAMAGED OR
UNFIT FOR SALE;

 

(VIII)                        CONSISTS OF DISPLAY ITEMS OR PACKING OR SHIPPING
MATERIALS, MANUFACTURING SUPPLIES, WORK-IN-PROCESS INVENTORY OR REPLACEMENT
PARTS;

 

(IX)                                IS NOT OF A TYPE HELD FOR SALE IN THE
ORDINARY COURSE OF BORROWERS’ BUSINESS;

 

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(X)                                   BREACHES ANY OF THE REPRESENTATIONS OR
WARRANTIES PERTAINING TO INVENTORY SET FORTH IN THE LOAN DOCUMENTS;

 

(XI)                                CONSISTS OF HAZARDOUS MATERIAL OR GOODS THAT
CAN BE TRANSPORTED OR SOLD ONLY WITH LICENSES THAT ARE NOT READILY AVAILABLE;

 

(XII)                             IS NOT COVERED BY CASUALTY INSURANCE
MAINTAINED AS REQUIRED BY SECTION 5.04; OR

 

(XIII)                          IS ACQUIRED AS PART OF A PERMITTED ACQUISITION
UNLESS AND UNTIL THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT SHALL BE
SATISFIED AS TO ITS ELIGIBILITY.

 

ARTICLE III.
 
REPRESENTATIONS AND WARRANTIES

 

Each Loan Party represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders (with references to
the Companies being references thereto after giving effect to the Transactions
unless otherwise expressly stated) that:

 

SECTION 3.01  ORGANIZATION; POWERS.  EACH COMPANY (A) IS DULY ORGANIZED AND
VALIDLY EXISTING UNDER THE LAWS OF THE JURISDICTION OF ITS ORGANIZATION, (B) HAS
ALL REQUISITE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS NOW CONDUCTED AND
TO OWN AND LEASE ITS PROPERTY AND (C) IS QUALIFIED AND IN GOOD STANDING (TO THE
EXTENT SUCH CONCEPT IS APPLICABLE IN THE APPLICABLE JURISDICTION) TO DO BUSINESS
IN EVERY JURISDICTION WHERE SUCH QUALIFICATION IS REQUIRED, EXCEPT IN SUCH
JURISDICTIONS WHERE THE FAILURE TO SO QUALIFY OR BE IN GOOD STANDING,
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN
A MATERIAL ADVERSE EFFECT.

 

SECTION 3.02  AUTHORIZATION; ENFORCEABILITY.  THE TRANSACTIONS TO BE ENTERED
INTO BY EACH LOAN PARTY ARE WITHIN SUCH LOAN PARTY’S POWERS AND HAVE BEEN DULY
AUTHORIZED BY ALL NECESSARY ACTION.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND
DELIVERED BY EACH LOAN PARTY AND CONSTITUTES, AND EACH OTHER LOAN DOCUMENT TO
WHICH ANY LOAN PARTY IS TO BE A PARTY, WHEN EXECUTED AND DELIVERED BY SUCH LOAN
PARTY, WILL CONSTITUTE, A LEGAL, VALID AND BINDING OBLIGATION OF SUCH LOAN
PARTY, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS, SUBJECT TO APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS AFFECTING
CREDITORS’ RIGHTS GENERALLY AND SUBJECT TO GENERAL PRINCIPLES OF EQUITY,
REGARDLESS OF WHETHER CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW.

 

SECTION 3.03  GOVERNMENTAL APPROVALS; NO CONFLICTS.  EXCEPT AS SET FORTH ON
SCHEDULE 3.03, THE TRANSACTIONS (A) DO NOT REQUIRE ANY CONSENT OR APPROVAL OF,
REGISTRATION OR FILING WITH, OR ANY OTHER ACTION BY, ANY GOVERNMENTAL AUTHORITY,
EXCEPT (I) SUCH AS HAVE BEEN OBTAINED OR MADE AND ARE IN FULL FORCE AND EFFECT,
(II) FILINGS NECESSARY TO PERFECT LIENS CREATED UNDER THE LOAN DOCUMENTS AND
(III) CONSENTS, APPROVALS, REGISTRATIONS, FILINGS OR ACTIONS THE FAILURE OF
WHICH TO OBTAIN OR PERFORM COULD NOT REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT, (B) WILL NOT VIOLATE THE CHARTER, BY-LAWS OR OTHER
ORGANIZATIONAL DOCUMENTS OF ANY COMPANY OR ANY ORDER OF ANY GOVERNMENTAL
AUTHORITY, (C) WILL NOT VIOLATE, RESULT IN A DEFAULT OR REQUIRE ANY CONSENT OR
APPROVAL UNDER ANY APPLICABLE LAW OR REGULATION, INDENTURE, AGREEMENT OR OTHER
INSTRUMENT BINDING UPON ANY COMPANY OR ITS ASSETS, OR GIVE RISE TO A RIGHT
THEREUNDER TO

 

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REQUIRE ANY PAYMENT TO BE MADE BY ANY COMPANY, EXCEPT FOR VIOLATIONS, DEFAULTS
OR THE CREATION OF SUCH RIGHTS THAT COULD NOT REASONABLY BE EXPECTED TO RESULT
IN A MATERIAL ADVERSE EFFECT, AND (D) WILL NOT RESULT IN THE CREATION OR
IMPOSITION OF ANY LIEN ON ANY PROPERTY OF ANY COMPANY, EXCEPT LIENS CREATED
UNDER THE LOAN DOCUMENTS AND PERMITTED LIENS.

 

SECTION 3.04  FINANCIAL STATEMENTS.  (A)  HOLDINGS AND BORROWERS HAVE HERETOFORE
FURNISHED TO THE LENDERS (I) THE AUDITED CONSOLIDATED BALANCE SHEETS AND THE
RELATED STATEMENTS OF INCOME, STOCKHOLDERS’ EQUITY AND CASH FLOWS OF HOLDINGS
AND ITS CONSOLIDATED SUBSIDIARIES AS OF AND FOR THE FISCAL YEARS ENDED
JANUARY 1, 2005 AND JANUARY 3, 2004, AUDITED BY AND ACCOMPANIED BY THE OPINION
OF DELOITTE & TOUCHE LLP, INDEPENDENT PUBLIC ACCOUNTANTS, (II) THE UNAUDITED
CONSOLIDATED BALANCE SHEETS AND THE RELATED STATEMENTS OF INCOME AND CASH FLOWS
OF HOLDINGS AND ITS CONSOLIDATED SUBSIDIARIES AS OF AND FOR THE FISCAL QUARTER
ENDED APRIL 2, 2005, AND (III) THE UNAUDITED CONSOLIDATED AND CONSOLIDATING
BALANCE SHEETS AND THE RELATED STATEMENTS OF INCOME OF HOLDINGS AND ITS
CONSOLIDATED SUBSIDIARIES AS OF AND FOR EACH OF THE FISCAL MONTHS ENDING MAY 28,
2005, JULY 2, 2005 AND JULY 30, 2005.  SUCH FINANCIAL STATEMENTS HAVE BEEN
PREPARED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED AND PRESENT FAIRLY AND
ACCURATELY THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND CASH FLOWS OF
HOLDINGS AND ITS CONSOLIDATED SUBSIDIARIES AS OF SUCH DATES AND FOR SUCH PERIODS
SUBJECT TO YEAR-END ADJUSTMENTS FOR INTERIM FINANCIAL STATEMENTS.

 

(B)                                 HOLDINGS AND BORROWERS HAVE HERETOFORE
FURNISHED TO THE LENDERS: AUDITED CONSOLIDATED BALANCE SHEETS AND THE RELATED
STATEMENTS OF INCOME, STOCKHOLDERS’ EQUITY AND CASH FLOWS OF THE ACQUIRED
BUSINESS AND ITS CONSOLIDATED SUBSIDIARIES AS OF AND FOR THE FISCAL YEARS ENDED
APRIL 30, 2005 AND APRIL 30, 2004, AUDITED BY AND ACCOMPANIED BY THE OPINION OF
PRICEWATERHOUSE COOPERS, INDEPENDENT PUBLIC ACCOUNTANTS.  SUCH FINANCIAL
STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED AND
PRESENT FAIRLY AND ACCURATELY, IN ALL MATERIAL RESPECTS, THE FINANCIAL CONDITION
AND RESULTS OF OPERATIONS AND CASH FLOWS OF THE ACQUIRED BUSINESS AND ITS
CONSOLIDATED SUBSIDIARIES AS OF SUCH DATES AND FOR SUCH PERIODS.

 

(C)                                  EXCEPT AS SET FORTH IN THE FINANCIAL
STATEMENTS DESCRIBED IN SECTION 3.04(A) AND 3.04(B) OR THE SCHEDULES HERETO, AS
OF THE CLOSING DATE, THERE ARE NO LIABILITIES OF ANY COMPANY OF ANY KIND,
WHETHER ACCRUED, CONTINGENT, ABSOLUTE, DETERMINED, DETERMINABLE OR OTHERWISE,
WHICH IF UNPAID COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT, AND THERE IS NO EXISTING CONDITION, SITUATION OR SET OF CIRCUMSTANCES
WHICH COULD REASONABLY BE EXPECTED TO RESULT IN SUCH A LIABILITY, OTHER THAN
LIABILITIES UNDER THE LOAN DOCUMENTS AND THE TERM LOAN DOCUMENTS.

 

(D)                                 HOLDINGS AND BORROWERS HAVE HERETOFORE
DELIVERED TO THE LENDERS UNAUDITED PRO FORMA CONSOLIDATED AND CONSOLIDATING
BALANCE SHEETS AND STATEMENTS OF INCOME, AS WELL AS PRO FORMA EBITDA, AS OF AND
FOR THE TWELVE-MONTH PERIOD ENDED JULY 31, 2005, AFTER GIVING EFFECT TO THE
TRANSACTIONS AS IF THEY HAD OCCURRED ON SUCH DATE.  SUCH PRO FORMA FINANCIAL
STATEMENTS HAVE BEEN PREPARED IN GOOD FAITH BY THE LOAN PARTIES, BASED ON THE
ASSUMPTIONS STATED THEREIN (WHICH ASSUMPTIONS ARE BELIEVED BY THE LOAN PARTIES
ON THE DATE HEREOF AND ON THE CLOSING DATE TO BE REASONABLE), ARE BASED ON THE
BEST INFORMATION AVAILABLE TO THE LOAN PARTIES AS OF THE DATE OF DELIVERY
THEREOF, ACCURATELY REFLECT ALL ADJUSTMENTS REQUIRED TO BE MADE TO GIVE EFFECT
TO THE TRANSACTIONS, AND IN ACCORDANCE WITH REGULATION S-X UNDER THE SECURITIES
ACT, AND PRESENT FAIRLY ON A PRO FORMA BASIS THE ESTIMATED CONSOLIDATED AND
CONSOLIDATING FINANCIAL POSITION AND RESULTS

 

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OF OPERATIONS OF HOLDINGS AND BORROWERS (INCLUDING THE ACQUIRED BUSINESS) AS OF
AND FOR SUCH DATES, ASSUMING THAT THE TRANSACTIONS HAD ACTUALLY OCCURRED AT SUCH
DATES, IT BEING RECOGNIZED BY LENDERS, HOWEVER, THAT PROJECTIONS AS TO FUTURE
EVENTS ARE NOT TO BE VIEWED AS FACTS AND THAT THE ACTUAL RESULTS DURING THE
PERIOD OR PERIODS COVERED BY SAID PROJECTIONS MAY DIFFER FROM THE PROJECTED
RESULTS.

 

(E)                                  SINCE APRIL 30, 2005 WITH RESPECT TO LENOX
AND ITS SUBSIDIARIES AND SINCE JANUARY 1, 2005 WITH RESPECT TO HOLDINGS AND ITS
SUBSIDIARIES, THERE HAS BEEN NO EVENT, CHANGE OR OCCURRENCE THAT, INDIVIDUALLY
OR IN THE AGGREGATE, HAS HAD OR COULD REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.

 

SECTION 3.05  PROPERTIES.  (A)  EACH COMPANY HAS GOOD TITLE TO, OR VALID
LEASEHOLD INTERESTS IN, ALL ITS PROPERTY MATERIAL TO ITS BUSINESS, EXCEPT FOR
MINOR IRREGULARITIES OR DEFICIENCIES IN TITLE THAT, INDIVIDUALLY OR IN THE
AGGREGATE, DO NOT INTERFERE WITH ITS ABILITY TO CONDUCT ITS BUSINESS AS
CURRENTLY CONDUCTED OR TO UTILIZE SUCH PROPERTY FOR ITS INTENDED PURPOSE.  TITLE
TO ALL SUCH PROPERTY HELD BY SUCH COMPANY IS FREE AND CLEAR OF ALL LIENS EXCEPT
FOR PERMITTED LIENS.  THE PROPERTY OF THE COMPANIES, TAKEN AS A WHOLE, (I) IS IN
GOOD OPERATING ORDER, CONDITION AND REPAIR (ORDINARY WEAR AND TEAR EXCEPTED)
(EXCEPT TO THE EXTENT THAT THE FAILURE TO BE IN SUCH CONDITION COULD NOT
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT) AND
(II) CONSTITUTES ALL THE PROPERTY WHICH IS REQUIRED FOR THE BUSINESS AND
OPERATIONS OF THE COMPANIES AS PRESENTLY CONDUCTED.

 

(B)                                 SCHEDULE 3.05(B) CONTAINS A TRUE AND
COMPLETE LIST OF EACH INTEREST IN REAL PROPERTY OWNED BY ANY COMPANY AS OF THE
DATE HEREOF AND DESCRIBES THE TYPE OF INTEREST THEREIN HELD BY SUCH COMPANY. 
SCHEDULE 3.05(B) CONTAINS A TRUE AND COMPLETE LIST OF EACH REAL PROPERTY LEASED,
SUBLEASED OR OTHERWISE OCCUPIED OR UTILIZED BY ANY COMPANY, AS LESSEE,
SUBLESSEE, FRANCHISEE OR LICENSEE, AS OF THE DATE HEREOF AND DESCRIBES THE TYPE
OF INTEREST THEREIN HELD BY SUCH COMPANY AND WHETHER SUCH LEASE, SUBLEASE OR
OTHER INSTRUMENT REQUIRES THE CONSENT OF THE LANDLORD THEREUNDER OR OTHER
PARTIES THERETO TO THE TRANSACTIONS.

 

(C)                                  EXCEPT FOR THOSE AGREEMENTS LISTED IN
SCHEDULE 3.05(C), AT LEAST ONE LOAN PARTY OWNS, OR IS LICENSED TO USE, ALL
PATENTS, PATENT APPLICATIONS, TRADEMARKS, TRADE NAMES, SERVICE MARKS,
COPYRIGHTS, TECHNOLOGY, TRADE SECRETS, PROPRIETARY INFORMATION, DOMAIN NAMES,
KNOW-HOW AND PROCESSES NECESSARY FOR THE CONDUCT OF ITS BUSINESS AS CURRENTLY
CONDUCTED (THE “INTELLECTUAL PROPERTY”), EXCEPT FOR THOSE THE FAILURE TO OWN OR
LICENSE WHICH, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.  WITH RESPECT TO THOSE LICENSE
AGREEMENTS LISTED IN SCHEDULE 3.05(C), EACH LOAN PARTY IS USING COMMERCIALLY
REASONABLE EFFORTS TO OBTAIN A CONSENT FROM EACH THIRD-PARTY LICENSOR LISTED
THEREIN TO BECOME THE LICENSEE OF THE APPLICABLE LICENSE AGREEMENT.  NO CLAIM
HAS BEEN ASSERTED AND IS PENDING BY ANY PERSON CHALLENGING OR QUESTIONING THE
USE OF ANY SUCH INTELLECTUAL PROPERTY OR THE VALIDITY OR EFFECTIVENESS OF ANY
SUCH INTELLECTUAL PROPERTY, NOR DOES ANY LOAN PARTY KNOW OF ANY VALID BASIS FOR
ANY SUCH CLAIM.  THE USE OF SUCH INTELLECTUAL PROPERTY BY EACH LOAN PARTY DOES
NOT INFRINGE THE RIGHTS OF ANY PERSON, EXCEPT FOR SUCH CLAIMS AND INFRINGEMENTS
THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT.

 

(D)                                 (I) NO COMPANY HAS RECEIVED ANY NOTICE OF,
NOR HAS ANY KNOWLEDGE OF, THE OCCURRENCE OR PENDENCY OR CONTEMPLATION OF ANY
CASUALTY EVENT AFFECTING ALL OR ANY PORTION OF THE PROPERTY

 

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AND (II) NO MORTGAGE ENCUMBERS IMPROVED REAL PROPERTY THAT IS LOCATED IN AN AREA
THAT HAS BEEN IDENTIFIED BY THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT AS AN
AREA HAVING SPECIAL FLOOD HAZARDS AND WITH RESPECT TO WHICH FLOOD INSURANCE HAS
BEEN MADE AVAILABLE UNDER THE NATIONAL FLOOD INSURANCE ACT OF 1968.

 

SECTION 3.06  EQUITY INTERESTS AND SUBSIDIARIES.  (A)  SCHEDULE 3.06(A) SETS
FORTH A LIST OF (I) ALL THE SUBSIDIARIES AND THEIR JURISDICTION OF ORGANIZATION
AS OF THE CLOSING DATE AND (II) THE NUMBER OF SHARES OF EACH CLASS OF ITS EQUITY
INTERESTS AUTHORIZED, AND THE NUMBER OUTSTANDING (AND THE RECORD HOLDER OF SUCH
EQUITY INTERESTS), ON THE CLOSING DATE AND THE NUMBER OF SHARES COVERED BY ALL
OUTSTANDING OPTIONS, WARRANTS, RIGHTS OF CONVERSION OR PURCHASE AND SIMILAR
RIGHTS AT THE CLOSING DATE.  ALL EQUITY INTERESTS OF EACH COMPANY (OTHER THAN
HOLDINGS) ARE DULY AND VALIDLY ISSUED AND ARE FULLY PAID AND NON-ASSESSABLE AND,
EXCEPT AS SET FORTH ON SCHEDULE 3.06(A), ARE OWNED BY HOLDINGS OR BORROWERS,
DIRECTLY OR INDIRECTLY THROUGH WHOLLY OWNED SUBSIDIARIES AND ALL EQUITY
INTERESTS OF BORROWERS ARE OWNED DIRECTLY BY HOLDINGS.  EACH LOAN PARTY IS THE
RECORD AND BENEFICIAL OWNER OF, AND HAS GOOD AND MARKETABLE TITLE TO, THE EQUITY
INTERESTS PLEDGED BY IT UNDER THE SECURITY AGREEMENT, FREE OF ANY AND ALL LIENS,
RIGHTS OR CLAIMS OF OTHER PERSONS, EXCEPT THE SECURITY INTEREST CREATED BY THE
SECURITY AGREEMENT AND THE SECOND PRIORITY SECURITY INTEREST SECURING THE TERM
LOAN INDEBTEDNESS, AND THERE ARE NO OUTSTANDING WARRANTS, OPTIONS OR OTHER
RIGHTS TO PURCHASE, OR SHAREHOLDER, VOTING TRUST OR SIMILAR AGREEMENTS
OUTSTANDING WITH RESPECT TO, OR PROPERTY THAT IS CONVERTIBLE INTO, OR THAT
REQUIRES THE ISSUANCE OR SALE OF, ANY SUCH EQUITY INTERESTS.

 

(B)                                 NO CONSENT OF ANY PERSON INCLUDING ANY OTHER
GENERAL OR LIMITED PARTNER, ANY OTHER MEMBER OF A LIMITED LIABILITY COMPANY, ANY
OTHER SHAREHOLDER OR ANY OTHER TRUST BENEFICIARY IS NECESSARY OR DESIRABLE IN
CONNECTION WITH THE CREATION, PERFECTION OR FIRST PRIORITY STATUS OF THE
SECURITY INTEREST OF THE ADMINISTRATIVE AGENT IN ANY EQUITY INTERESTS PLEDGED TO
THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SECURED PARTIES UNDER THE
SECURITY AGREEMENT OR THE EXERCISE BY THE ADMINISTRATIVE AGENT OF THE VOTING OR
OTHER RIGHTS PROVIDED FOR IN THE SECURITY AGREEMENT OR THE EXERCISE OF REMEDIES
IN RESPECT THEREOF.

 

(C)                                  AN ACCURATE ORGANIZATION CHART, SHOWING THE
OWNERSHIP STRUCTURE OF HOLDINGS, BORROWERS AND EACH SUBSIDIARY ON THE CLOSING
DATE, AND AFTER GIVING EFFECT TO THE TRANSACTION, IS SET FORTH ON
SCHEDULE 3.06(C).

 

SECTION 3.07  LITIGATION; COMPLIANCE WITH LAWS.  (A)  THERE ARE NO ACTIONS,
SUITS OR PROCEEDINGS AT LAW OR IN EQUITY BY OR BEFORE ANY GOVERNMENTAL AUTHORITY
NOW PENDING OR, TO THE KNOWLEDGE OF ANY COMPANY, THREATENED AGAINST OR AFFECTING
ANY COMPANY OR ANY BUSINESS, PROPERTY OR RIGHTS OF ANY SUCH PERSON (I) THAT
INVOLVE ANY LOAN DOCUMENT OR THE TRANSACTIONS OR (II) AS TO WHICH THERE IS A
REASONABLE POSSIBILITY OF AN ADVERSE DETERMINATION AND THAT, IF ADVERSELY
DETERMINED, COULD REASONABLY BE EXPECTED, INDIVIDUALLY OR IN THE AGGREGATE, TO
RESULT IN A MATERIAL ADVERSE EFFECT.

 

(B)                                 EXCEPT FOR MATTERS COVERED BY SECTION 3.17,
NO COMPANY OR ANY OF ITS PROPERTY IS IN VIOLATION OF, NOR WILL THE CONTINUED
OPERATION OF THEIR PROPERTY AS CURRENTLY CONDUCTED VIOLATE, ANY REQUIREMENTS OF
LAW (INCLUDING ANY ZONING OR BUILDING ORDINANCE, CODE OR APPROVAL OR ANY
BUILDING PERMITS) OR ANY RESTRICTIONS OF RECORD OR AGREEMENTS AFFECTING THE REAL
PROPERTY OR IS IN DEFAULT WITH RESPECT TO ANY JUDGMENT, WRIT, INJUNCTION, DECREE
OR ORDER OF ANY GOVERNMENTAL

 

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AUTHORITY, WHERE SUCH VIOLATION OR DEFAULT COULD REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.08  AGREEMENTS.  (A)  NO COMPANY IS A PARTY TO ANY AGREEMENT OR
INSTRUMENT OR SUBJECT TO ANY CORPORATE OR OTHER CONSTITUTIONAL RESTRICTION THAT
HAS RESULTED OR COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT.

 

(B)                                 NO COMPANY IS IN DEFAULT IN ANY MANNER UNDER
ANY PROVISION OF ANY INDENTURE OR OTHER AGREEMENT OR INSTRUMENT EVIDENCING
INDEBTEDNESS, OR ANY OTHER AGREEMENT OR INSTRUMENT TO WHICH IT IS A PARTY OR BY
WHICH IT OR ANY OF ITS PROPERTY ARE OR MAY BE BOUND, WHERE SUCH DEFAULT COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(C)                                  SCHEDULE 3.08(C) ACCURATELY AND COMPLETELY
LISTS ALL MATERIAL AGREEMENTS (OTHER THAN LEASES OF REAL PROPERTY SET FORTH ON
SCHEDULE 3.05(B)) TO WHICH ANY COMPANY IS A PARTY WHICH ARE IN EFFECT ON THE
DATE HEREOF IN CONNECTION WITH THE OPERATION OF THE BUSINESS CONDUCTED THEREBY
AND BORROWERS HAVE DELIVERED TO THE ADMINISTRATIVE AGENT COMPLETE AND CORRECT
COPIES OF ALL SUCH MATERIAL AGREEMENTS, INCLUDING ANY AMENDMENTS, SUPPLEMENTS OR
MODIFICATIONS WITH RESPECT THERETO.

 

SECTION 3.09  FEDERAL RESERVE REGULATIONS.  (A)  NO COMPANY IS ENGAGED
PRINCIPALLY, OR AS ONE OF ITS IMPORTANT ACTIVITIES, IN THE BUSINESS OF EXTENDING
CREDIT FOR THE PURPOSE OF BUYING OR CARRYING MARGIN STOCK.

 

(B)                                 NO PART OF THE PROCEEDS OF ANY LOAN OR ANY
LETTER OF CREDIT WILL BE USED, WHETHER DIRECTLY OR INDIRECTLY, AND WHETHER
IMMEDIATELY, INCIDENTALLY OR ULTIMATELY, FOR ANY PURPOSE THAT ENTAILS A
VIOLATION OF, OR THAT IS INCONSISTENT WITH, THE PROVISIONS OF THE REGULATIONS OF
THE BOARD, INCLUDING REGULATION T, U OR X.  THE PLEDGE OF THE SECURITY AGREEMENT
COLLATERAL PURSUANT TO THE SECURITY AGREEMENT DOES NOT VIOLATE SUCH REGULATIONS.

 

SECTION 3.10  INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.  NO
COMPANY IS (A) AN “INVESTMENT COMPANY” OR A COMPANY “CONTROLLED” BY AN
“INVESTMENT COMPANY,” AS DEFINED IN, OR SUBJECT TO REGULATION UNDER, THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED, OR (B) A “HOLDING COMPANY,” AN
“AFFILIATE” OF A “HOLDING COMPANY” OR A “SUBSIDIARY COMPANY” OF A “HOLDING
COMPANY,” AS DEFINED IN, OR SUBJECT TO REGULATION UNDER, THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, AS AMENDED.

 

SECTION 3.11  USE OF PROCEEDS.  ON THE CLOSING DATE, BORROWERS WILL USE THE
PROCEEDS OF THE REVOLVING LOANS, NOT TO EXCEED $105,000,000, TO FINANCE A
PORTION OF THE ACQUISITION CONSIDERATION AND THE REFINANCING AND TO PAY RELATED
FEES, COMMISSIONS AND EXPENSES IN CONNECTION THEREWITH.  AFTER THE CLOSING DATE,
BORROWERS WILL USE THE PROCEEDS OF THE REVOLVING LOANS FOR WORKING CAPITAL AND
GENERAL CORPORATE PURPOSES.

 

SECTION 3.12  TAXES.  EACH COMPANY HAS (A) TIMELY FILED OR CAUSED TO BE TIMELY
FILED ALL FEDERAL TAX RETURNS AND ALL MATERIAL, STATE, LOCAL AND FOREIGN TAX
RETURNS OR MATERIALS REQUIRED TO HAVE BEEN FILED BY IT AND ALL SUCH TAX RETURNS
ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AND HAS (B) DULY AND TIMELY PAID
OR CAUSED TO BE DULY AND TIMELY PAID ALL TAXES (WHETHER OR NOT SHOWN ON ANY TAX
RETURN) DUE AND PAYABLE BY IT AND ALL ASSESSMENTS RECEIVED BY IT, EXCEPT TAXES
(I) THAT ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND FOR
WHICH SUCH

 

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COMPANY SHALL HAVE SET ASIDE ON ITS BOOKS ADEQUATE RESERVES IN ACCORDANCE WITH
GAAP OR (II) WHICH COULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL
ADVERSE EFFECT; PROVIDED THAT ANY SUCH CONTEST OF TAXES WITH RESPECT TO
COLLATERAL SHALL ALSO SATISFY THE CONTESTED COLLATERAL LIEN CONDITIONS.  EACH
COMPANY HAS MADE ADEQUATE PROVISION IN ACCORDANCE WITH GAAP FOR ALL TAXES NOT
YET DUE AND PAYABLE.  EACH COMPANY IS UNAWARE OF ANY PROPOSED OR PENDING TAX
ASSESSMENTS, DEFICIENCIES OR AUDITS THAT COULD BE REASONABLY EXPECTED TO,
INDIVIDUALLY OR IN THE AGGREGATE, RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.13  NO MATERIAL MISSTATEMENTS.  NO INFORMATION, REPORT, FINANCIAL
STATEMENT, EXHIBIT OR SCHEDULE FURNISHED BY OR ON BEHALF OF ANY COMPANY TO THE
ADMINISTRATIVE AGENT OR ANY LENDER IN CONNECTION WITH THE NEGOTIATION OF ANY
LOAN DOCUMENT OR INCLUDED THEREIN OR DELIVERED PURSUANT THERETO CONTAINED,
CONTAINS OR WILL CONTAIN ANY MATERIAL MISSTATEMENT OF FACT OR OMISSION, OMITS OR
WILL OMIT TO STATE ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN,
IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE, ARE OR WILL BE MADE,
NOT MISLEADING AS OF THE DATE SUCH INFORMATION IS DATED OR CERTIFIED; PROVIDED
THAT TO THE EXTENT ANY SUCH INFORMATION, REPORT, FINANCIAL STATEMENT, EXHIBIT OR
SCHEDULE WAS BASED UPON OR CONSTITUTES A FORECAST OR PROJECTION, EACH COMPANY
REPRESENTS ONLY THAT IT ACTED IN GOOD FAITH AND UTILIZED REASONABLE ASSUMPTIONS
AND DUE CARE IN THE PREPARATION OF SUCH INFORMATION, REPORT, FINANCIAL
STATEMENT, EXHIBIT OR SCHEDULE.

 

SECTION 3.14  LABOR MATTERS.  AS OF THE DATE HEREOF AND THE CLOSING DATE, THERE
ARE NO STRIKES, LOCKOUTS OR SLOWDOWNS AGAINST ANY COMPANY PENDING OR, TO THE
KNOWLEDGE OF ANY COMPANY, THREATENED.  THE HOURS WORKED BY AND PAYMENTS MADE TO
EMPLOYEES OF ANY COMPANY HAVE NOT BEEN IN VIOLATION OF THE FAIR LABOR STANDARDS
ACT OR ANY OTHER APPLICABLE FEDERAL, STATE, LOCAL OR FOREIGN LAW DEALING WITH
SUCH MATTERS IN ANY MANNER WHICH COULD REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.  ALL PAYMENTS DUE FROM ANY COMPANY, OR FOR WHICH ANY
CLAIM MAY BE MADE AGAINST ANY COMPANY, ON ACCOUNT OF WAGES AND EMPLOYEE HEALTH
AND WELFARE INSURANCE AND OTHER BENEFITS, HAVE BEEN PAID OR ACCRUED AS A
LIABILITY ON THE BOOKS OF SUCH COMPANY EXCEPT WHERE THE FAILURE TO DO SO COULD
NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.  THE
CONSUMMATION OF THE TRANSACTIONS WILL NOT GIVE RISE TO ANY RIGHT OF TERMINATION
OR RIGHT OF RENEGOTIATION ON THE PART OF ANY UNION UNDER ANY COLLECTIVE
BARGAINING AGREEMENT TO WHICH ANY COMPANY IS BOUND.

 

SECTION 3.15  SOLVENCY.  IMMEDIATELY AFTER THE CONSUMMATION OF THE TRANSACTIONS
TO OCCUR ON THE CLOSING DATE AND IMMEDIATELY FOLLOWING THE MAKING OF EACH LOAN
AND AFTER GIVING EFFECT TO THE APPLICATION OF THE PROCEEDS OF EACH LOAN TAKING
INTO ACCOUNT RIGHTS OF CONTRIBUTION AGAINST OR REIMBURSEMENT FROM OTHER LOAN
PARTIES, (A) THE FAIR VALUE OF THE ASSETS OF EACH LOAN PARTY (INDIVIDUALLY AND
ON A CONSOLIDATED BASIS WITH ITS SUBSIDIARIES) WILL EXCEED ITS DEBTS AND
LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE; (B) THE PRESENT FAIR
SALEABLE VALUE OF THE PROPERTY OF EACH LOAN PARTY (INDIVIDUALLY AND ON A
CONSOLIDATED BASIS WITH ITS SUBSIDIARIES) WILL BE GREATER THAN THE AMOUNT THAT
WILL BE REQUIRED TO PAY THE PROBABLE LIABILITY OF ITS DEBTS AND OTHER
LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND OTHER
LIABILITIES BECOME ABSOLUTE AND MATURED; (C) EACH LOAN PARTY (INDIVIDUALLY AND
ON A CONSOLIDATED BASIS WITH ITS SUBSIDIARIES) WILL BE ABLE TO PAY ITS DEBTS AND
LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND
LIABILITIES BECOME ABSOLUTE AND MATURED; AND (D) EACH LOAN PARTY (INDIVIDUALLY
AND ON A CONSOLIDATED BASIS WITH ITS SUBSIDIARIES) WILL NOT HAVE UNREASONABLY
SMALL CAPITAL WITH

 

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WHICH TO CONDUCT ITS BUSINESS IN WHICH IT IS ENGAGED AS SUCH BUSINESS IS NOW
CONDUCTED AND IS PROPOSED TO BE CONDUCTED FOLLOWING THE CLOSING DATE.

 

SECTION 3.16  EMPLOYEE BENEFIT PLANS.   (A)  EACH COMPANY AND ITS ERISA
AFFILIATES IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE APPLICABLE
PROVISIONS OF ERISA AND THE CODE AND THE REGULATIONS AND PUBLISHED
INTERPRETATIONS THEREUNDER.  NO ERISA EVENT HAS OCCURRED OR IS REASONABLY
EXPECTED TO OCCUR THAT, WHEN TAKEN TOGETHER WITH ALL OTHER SUCH ERISA EVENTS,
COULD REASONABLY BE EXPECTED TO RESULT IN MATERIAL LIABILITY OF ANY COMPANY OR
ANY OF ITS ERISA AFFILIATES OR THE IMPOSITION OF A LIEN ON ANY OF THE ASSETS OF
A COMPANY.  THE PRESENT VALUE OF ALL ACCUMULATED BENEFIT OBLIGATIONS OF ALL
UNDERFUNDED PLANS (BASED ON THE ASSUMPTIONS USED FOR PURPOSES OF STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS NO. 87) DID NOT, AS OF THE DATE OF THE MOST
RECENT FINANCIAL STATEMENTS REFLECTING SUCH AMOUNTS, EXCEED BY MORE THAN
$250,000 THE FAIR MARKET VALUE OF THE ASSETS OF ALL SUCH UNDERFUNDED PLANS. 
USING ACTUARIAL ASSUMPTIONS AND COMPUTATION METHODS CONSISTENT WITH SUBPART 1 OF
SUBTITLE E OF TITLE IV OF ERISA, THE AGGREGATE LIABILITIES OF EACH COMPANY OR
ITS ERISA AFFILIATES TO ALL MULTIEMPLOYER PLANS IN THE EVENT OF A COMPLETE
WITHDRAWAL THEREFROM, AS OF THE CLOSE OF THE MOST RECENT FISCAL YEAR OF EACH
SUCH MULTIEMPLOYER PLAN, COULD NOT REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.

 

(B)                                 NONE OF THE COMPANIES HAS ANY FOREIGN PLANS.

 

SECTION 3.17  ENVIRONMENTAL MATTERS.  (A)  EXCEPT AS SET FORTH IN SCHEDULE 3.17
OR EXCEPT AS, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED
TO RESULT IN A MATERIAL ADVERSE EFFECT:

 

(1)                                  THE COMPANIES AND THEIR BUSINESSES,
OPERATIONS AND REAL PROPERTY ARE AND IN THE LAST SIX YEARS HAVE BEEN IN
COMPLIANCE WITH, AND THE COMPANIES HAVE NO LIABILITY UNDER, ENVIRONMENTAL LAW;

 

(2)                                  THE COMPANIES HAVE OBTAINED ALL
ENVIRONMENTAL PERMITS REQUIRED FOR THE CONDUCT OF THEIR BUSINESSES AND
OPERATIONS, AND THE OWNERSHIP, OPERATION AND USE OF THEIR ASSETS, UNDER
ENVIRONMENTAL LAW, ALL SUCH ENVIRONMENTAL PERMITS ARE VALID AND IN GOOD STANDING
AND, UNDER THE CURRENTLY EFFECTIVE BUSINESS PLAN OF THE COMPANIES, NO
EXPENDITURES OR OPERATIONAL ADJUSTMENTS ARE EXPECTED TO BE REQUIRED IN ORDER TO
RENEW OR MODIFY SUCH ENVIRONMENTAL PERMITS DURING THE NEXT FIVE YEARS EXCEPT AS
MAY BE NEEDED IN THE ORDINARY AND NORMAL COURSE OF BUSINESS;

 

(3)                                  THERE HAS BEEN NO RELEASE OR THREATENED
RELEASE OF HAZARDOUS MATERIAL ON, AT, UNDER OR FROM ANY REAL PROPERTY OR
FACILITY PRESENTLY OR FORMERLY OWNED, LEASED OR OPERATED BY THE COMPANIES OR
THEIR PREDECESSORS IN INTEREST THAT COULD RESULT IN LIABILITY OF THE COMPANIES
UNDER ENVIRONMENTAL LAW;

 

(4)                                  THERE IS NO ENVIRONMENTAL CLAIM PENDING OR,
TO THE KNOWLEDGE OF THE COMPANIES, THREATENED AGAINST THE COMPANIES, OR RELATING
TO THE REAL PROPERTY CURRENTLY OR FORMERLY OWNED, LEASED OR OPERATED BY THE
COMPANIES OR RELATING TO THE OPERATIONS OF THE COMPANIES, AND THERE ARE NO
ACTIONS, ACTIVITIES, CIRCUMSTANCES, CONDITIONS, EVENTS OR INCIDENTS THAT COULD
REASONABLY BE EXPECTED TO FORM THE BASIS OF SUCH AN ENVIRONMENTAL CLAIM; AND

 

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(5)                                  NO PERSON WITH AN INDEMNITY OR CONTRIBUTION
OBLIGATION TO THE COMPANIES RELATING TO COMPLIANCE WITH OR LIABILITY UNDER
ENVIRONMENTAL LAW IS IN DEFAULT WITH RESPECT TO SUCH OBLIGATION.

 

(B)                                 EXCEPT AS SET FORTH IN SCHEDULE 3.17:

 

(1)                                  NO COMPANY IS OBLIGATED TO PERFORM ANY
ACTION OR OTHERWISE INCUR ANY EXPENSE UNDER ENVIRONMENTAL LAW PURSUANT TO ANY
ORDER, DECREE, JUDGMENT OR AGREEMENT BY WHICH IT IS BOUND OR HAS ASSUMED BY
CONTRACT OR AGREEMENT, AND NO COMPANY IS CONDUCTING OR FINANCING ANY RESPONSE
PURSUANT TO ANY ENVIRONMENTAL LAW WITH RESPECT TO ANY REAL PROPERTY OR ANY OTHER
LOCATION EXCEPT AS, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT;

 

(2)                                  NO REAL PROPERTY OR FACILITY OWNED,
OPERATED OR LEASED BY THE COMPANIES AND, TO THE KNOWLEDGE OF THE COMPANIES, NO
REAL PROPERTY OR FACILITY FORMERLY OWNED, OPERATED OR LEASED BY THE COMPANIES OR
ANY OF THEIR PREDECESSORS IN INTEREST IS (I) LISTED OR PROPOSED FOR LISTING ON
THE NATIONAL PRIORITIES LIST PROMULGATED PURSUANT TO CERCLA OR (II) LISTED ON
THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY INFORMATION
SYSTEM PROMULGATED PURSUANT TO CERCLA OR (III) INCLUDED ON ANY SIMILAR LIST
MAINTAINED BY ANY GOVERNMENTAL AUTHORITY INCLUDING, WITHOUT LIMITATION, ANY SUCH
LIST RELATING TO PETROLEUM EXCEPT AS, INDIVIDUALLY OR IN THE AGGREGATE, COULD
NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT;

 

(3)                                  NO LIEN HAS BEEN RECORDED OR, TO THE
KNOWLEDGE OF ANY COMPANY, THREATENED UNDER ANY ENVIRONMENTAL LAW WITH RESPECT TO
ANY REAL PROPERTY OR ASSETS OF THE COMPANIES;

 

(4)                                  THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL
NOT REQUIRE ANY NOTIFICATION, REGISTRATION, FILING, REPORTING, DISCLOSURE,
INVESTIGATION, REMEDIATION OR CLEANUP PURSUANT TO ANY GOVERNMENTAL REAL PROPERTY
DISCLOSURE REQUIREMENTS OR ANY OTHER ENVIRONMENTAL LAW EXCEPT WHERE THE FAILURE
TO PROVIDE OR PERFORM ANY OF THE FOREGOING COULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT; AND

 

(5)                                  THE COMPANIES HAVE MADE AVAILABLE TO
LENDERS ALL MATERIAL REPORTS AND ASSESSMENTS IN THE POSSESSION, CUSTODY OR
CONTROL OF, OR OTHERWISE REASONABLY AVAILABLE TO, THE COMPANIES CONCERNING
COMPLIANCE WITH OR LIABILITY UNDER ENVIRONMENTAL LAW INCLUDING, WITHOUT
LIMITATION, THOSE CONCERNING THE EXISTENCE OF HAZARDOUS MATERIAL AT REAL
PROPERTY OR FACILITIES CURRENTLY OR FORMERLY OWNED, OPERATED, LEASED OR USED BY
THE COMPANIES EXCEPT AS, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY
BE EXPECTED TO REVEAL OR RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.18  INSURANCE.  SCHEDULE 3.18 SETS FORTH A TRUE, COMPLETE AND CORRECT
DESCRIPTION OF ALL INSURANCE MAINTAINED BY EACH COMPANY AS OF THE CLOSING DATE. 
AS OF EACH SUCH DATE, SUCH INSURANCE IS IN FULL FORCE AND EFFECT AND ALL
PREMIUMS HAVE BEEN DULY PAID.  EACH

 

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COMPANY HAS INSURANCE IN SUCH AMOUNTS AND COVERING SUCH RISKS AND LIABILITIES AS
ARE IN ACCORDANCE WITH NORMAL INDUSTRY PRACTICE.

 

SECTION 3.19  SECURITY DOCUMENTS.  (A)  THE SECURITY AGREEMENT IS EFFECTIVE TO
CREATE IN FAVOR OF THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SECURED
PARTIES, A LEGAL, VALID AND ENFORCEABLE SECURITY INTEREST IN AND LIEN ON THE
SECURITY AGREEMENT COLLATERAL AND, WHEN (I) FINANCING STATEMENTS AND OTHER
FILINGS IN APPROPRIATE FORM ARE FILED IN THE OFFICES SPECIFIED ON SCHEDULE 6 TO
THE PERFECTION CERTIFICATE AND (II) UPON THE TAKING OF POSSESSION OR CONTROL BY
THE ADMINISTRATIVE AGENT OF THE SECURITY AGREEMENT COLLATERAL WITH RESPECT TO
WHICH A SECURITY INTEREST MAY BE PERFECTED ONLY BY POSSESSION OR CONTROL (WHICH
POSSESSION OR CONTROL SHALL BE GIVEN TO THE ADMINISTRATIVE AGENT TO THE EXTENT
POSSESSION OR CONTROL BY THE ADMINISTRATIVE AGENT IS REQUIRED BY THE SECURITY
AGREEMENT), THE LIEN CREATED BY THE SECURITY AGREEMENT SHALL CONSTITUTE A FULLY
PERFECTED LIEN ON, AND SECURITY INTEREST IN, ALL RIGHT, TITLE AND INTEREST OF
THE GRANTORS THEREUNDER IN THE SECURITY AGREEMENT COLLATERAL (OTHER THAN SUCH
SECURITY AGREEMENT COLLATERAL IN WHICH A SECURITY INTEREST CANNOT BE PERFECTED
UNDER THE UCC AS IN EFFECT AT THE RELEVANT TIME IN THE RELEVANT JURISDICTION),
IN EACH CASE SUBJECT TO NO LIENS OTHER THAN PERMITTED LIENS.

 

(B)                                 TO THE EXTENT THAT THE FEDERAL TRADEMARK
LAWS OF THE UNITED STATES ARE APPLICABLE TO SECURITY INTERESTS IN TRADEMARKS,
THE PROPER FILING AND RECORDATION OF THE SECURITY AGREEMENT OR A SHORT FORM
THEREOF IN THE UNITED STATES PATENT AND TRADEMARK OFFICE AGAINST ALL U.S.
REGISTERED TRADEMARKS AND TRADEMARK APPLICATIONS (OTHER THAN INTENT-TO-USE
TRADEMARK APPLICATIONS) SET FORTH ON SCHEDULE 3.19(B) (“TRADEMARKS”) WITHIN
THREE (3) MONTHS OF THE DATE OF EXECUTION THEREOF WILL RENDER THE ADMINISTRATIVE
AGENT’S LIEN ON, AND SECURITY INTEREST IN, FOR THE BENEFIT OF THE SECURED
PARTIES, THE APPLICABLE LOAN PARTY’S RIGHT TITLE AND INTEREST IN SUCH TRADEMARKS
FULLY PERFECTED AND EFFECTIVE AGAINST SUBSEQUENT PURCHASERS OF SUCH TRADEMARKS,
IN EACH CASE SUBJECT TO NO LIENS OTHER THAN PERMITTED LIENS.

 

(C)                                  TO THE EXTENT THAT THE FEDERAL PATENT LAWS
OF THE UNITED STATES ARE APPLICABLE TO SECURITY INTERESTS IN PATENTS, THE PROPER
FILING AND RECORDING OF THE SECURITY AGREEMENT OR A SHORT FORM THEREOF AT THE
UNITED STATES PATENT AND TRADEMARK OFFICE AGAINST THE U.S. PATENTS AND PATENT
APPLICATIONS SET FORTH ON SCHEDULE 3.19(C) (“PATENTS”) WITHIN THREE (3) MONTHS
OF THE DATE OF EXECUTION THEREOF WILL RENDER THE ADMINISTRATIVE AGENT’S LIEN ON,
AND SECURITY INTEREST IN, FOR THE BENEFIT OF THE SECURED PARTIES, THE APPLICABLE
LOAN PARTY’S RIGHT, TITLE AND INTEREST IN SUCH PATENTS FULLY PERFECTED AND
EFFECTIVE AGAINST SUBSEQUENT PURCHASERS OF SUCH PATENTS, IN EACH CASE SUBJECT TO
NO LIENS OTHER THAN PERMITTED LIENS.

 

(D)                                 TO THE EXTENT THAT THE FEDERAL COPYRIGHT
LAWS OF THE UNITED STATES ARE APPLICABLE TO SECURITY INTERESTS IN COPYRIGHTS,
THE PROPER FILING AND RECORDING OF THE SECURITY AGREEMENT OR A SHORT FORM
THEREOF AT THE UNITED STATES COPYRIGHT OFFICE AGAINST THE U.S. REGISTERED
COPYRIGHTS SET FORTH ON SCHEDULE 3.19(D) (“COPYRIGHTS”) WITHIN ONE (1) MONTH OF
THE DATE OF EXECUTION THEREOF WILL RENDER THE ADMINISTRATIVE AGENT’S LIEN ON,
AND SECURITY INTEREST IN, FOR THE BENEFIT OF THE SECURED PARTIES, THE APPLICABLE
LOAN PARTY’S RIGHT, TITLE AND INTEREST IN SUCH COPYRIGHTS FULLY PERFECTED AND
EFFECTIVE AGAINST SUBSEQUENT TRANSFEREES OF SUCH COPYRIGHTS, IN EACH CASE
SUBJECT TO NO LIENS OTHER THAN PERMITTED LIENS.

 

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(E)                                  EACH MORTGAGE EXECUTED AND DELIVERED AS OF
THE CLOSING DATE IS, OR, TO THE EXTENT ANY MORTGAGE IS DULY EXECUTED AND
DELIVERED THEREAFTER BY THE RELEVANT LOAN PARTY, WILL BE, EFFECTIVE TO CREATE,
IN FAVOR OF THE ADMINISTRATIVE AGENT, FOR ITS BENEFIT AND THE BENEFIT OF THE
SECURED PARTIES, A LEGAL, VALID AND ENFORCEABLE SECOND PRIORITY LIEN ON AND
SECURITY INTEREST IN ALL OF THE LOAN PARTIES’ RIGHT, TITLE AND INTEREST IN AND
TO THE MORTGAGED REAL PROPERTIES THEREUNDER AND THE PROCEEDS THEREOF (JUNIOR
ONLY TO THE LIEN SECURING THE TERM LOAN INDEBTEDNESS), AND WHEN THE MORTGAGES
ARE FILED IN THE OFFICES SPECIFIED ON SCHEDULE 1.01(A), (OR, IN THE CASE OF ANY
MORTGAGE EXECUTED AND DELIVERED AFTER THE DATE THEREOF IN ACCORDANCE WITH THE
PROVISIONS OF SECTIONS 5.11 AND 5.12, WHEN SUCH MORTGAGE IS FILED IN THE OFFICES
SPECIFIED IN THE LOCAL COUNSEL OPINION DELIVERED WITH RESPECT THERETO IN
ACCORDANCE WITH THE PROVISIONS OF SECTIONS 5.11 AND 5.12) THE MORTGAGES SHALL
CONSTITUTE FULLY PERFECTED LIENS ON, AND SECURITY INTERESTS IN, ALL RIGHT, TITLE
AND INTEREST OF THE LOAN PARTIES IN THE MORTGAGED REAL PROPERTIES AND THE
PROCEEDS THEREOF, IN EACH CASE PRIOR AND SUPERIOR IN RIGHT TO ANY OTHER PERSON,
OTHER THAN THE LIEN SECURING THE TERM LOAN INDEBTEDNESS AND OTHER LIENS
REASONABLY ACCEPTABLE TO ADMINISTRATIVE AGENT.

 

(F)                                    EACH SECURITY DOCUMENT DELIVERED PURSUANT
TO SECTIONS 5.11 AND 5.12 WILL, UPON EXECUTION AND DELIVERY THEREOF, BE
EFFECTIVE TO CREATE IN FAVOR OF THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE
SECURED PARTIES, A LEGAL, VALID AND ENFORCEABLE SECURITY INTEREST IN AND LIEN ON
ALL OF THE LOAN PARTIES’ RIGHT, TITLE AND INTEREST IN AND TO THE COLLATERAL
THEREUNDER, AND WHEN ALL APPROPRIATE FILINGS OR RECORDINGS ARE MADE IN THE
APPROPRIATE OFFICES AS MAY BE REQUIRED UNDER APPLICABLE LAW, SUCH SECURITY
DOCUMENT WILL CONSTITUTE A FULLY PERFECTED LIEN ON, AND SECURITY INTEREST IN,
ALL RIGHT, TITLE AND INTEREST OF THE LOAN PARTIES IN SUCH COLLATERAL, IN EACH
CASE SUBJECT TO NO LIENS OTHER THAN THE APPLICABLE PERMITTED LIENS.

 

SECTION 3.20  ACQUISITION DOCUMENTS; REPRESENTATIONS AND WARRANTIES IN
AGREEMENT.  (A)  SCHEDULE 3.20 LISTS (I) EACH EXHIBIT, SCHEDULE, ANNEX OR OTHER
ATTACHMENT TO THE ACQUISITION AGREEMENT AND (II) EACH AGREEMENT, CERTIFICATE,
INSTRUMENT, LETTER OR OTHER DOCUMENT CONTEMPLATED BY THE ACQUISITION AGREEMENT
OR ANY ITEM REFERRED TO IN CLAUSE (I) TO BE ENTERED INTO, EXECUTED OR DELIVERED
OR TO BECOME EFFECTIVE IN CONNECTION WITH THE ACQUISITION.  THE LENDERS HAVE
BEEN FURNISHED TRUE AND COMPLETE COPIES OF EACH ACQUISITION DOCUMENT TO THE
EXTENT EXECUTED AND DELIVERED ON OR PRIOR TO THE CLOSING DATE.

 

(B)                                 ALL REPRESENTATIONS AND WARRANTIES OF EACH
COMPANY SET FORTH IN THE ACQUISITION AGREEMENT WERE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS AS OF THE TIME SUCH REPRESENTATIONS AND WARRANTIES WERE MADE
AND SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE CLOSING DATE AS
IF SUCH REPRESENTATIONS AND WARRANTIES WERE MADE ON AND AS OF SUCH DATE, UNLESS
STATED TO RELATE TO A SPECIFIC EARLIER DATE, IN WHICH CASE SUCH REPRESENTATIONS
AND WARRANTIES SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF SUCH
EARLIER DATE.

 

SECTION 3.21  ANTI-TERRORISM LAW.  (A)  NO LOAN PARTY AND, TO THE KNOWLEDGE OF
THE LOAN PARTIES, NONE OF THEIR AFFILIATES IS IN VIOLATION OF ANY REQUIREMENT OF
LAW RELATING TO TERRORISM OR MONEY LAUNDERING (“ANTI-TERRORISM LAWS”), INCLUDING
EXECUTIVE ORDER NO. 13224 ON TERRORIST FINANCING, EFFECTIVE SEPTEMBER 24, 2001
(THE “EXECUTIVE ORDER”), AND THE UNITING AND STRENGTHENING AMERICA BY PROVIDING
APPROPRIATE TOOLS REQUIRED TO INTERCEPT AND OBSTRUCT TERRORISM ACT OF 2001,
PUBLIC LAW 107-56.

 

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(B)                                 NO LOAN PARTY AND TO THE KNOWLEDGE OF THE
LOAN PARTIES, NO AFFILIATE OR BROKER OR OTHER AGENT OF ANY LOAN PARTY ACTING OR
BENEFITING IN ANY CAPACITY IN CONNECTION WITH THE LOANS IS ANY OF THE FOLLOWING:

 

(I)                                     A PERSON THAT IS LISTED IN THE ANNEX TO,
OR IS OTHERWISE SUBJECT TO THE PROVISIONS OF, THE EXECUTIVE ORDER;

 

(II)                                  A PERSON OWNED OR CONTROLLED BY, OR ACTING
FOR OR ON BEHALF OF, ANY PERSON THAT IS LISTED IN THE ANNEX TO, OR IS OTHERWISE
SUBJECT TO THE PROVISIONS OF, THE EXECUTIVE ORDER;

 

(III)                               A PERSON WITH WHICH ANY LENDER IS PROHIBITED
FROM DEALING OR OTHERWISE ENGAGING IN ANY TRANSACTION BY ANY ANTI-TERRORISM LAW;

 

(IV)                              A PERSON THAT COMMITS, THREATENS OR CONSPIRES
TO COMMIT OR SUPPORTS “TERRORISM” AS DEFINED IN THE EXECUTIVE ORDER; OR

 

(V)                                 A PERSON THAT IS NAMED AS A “SPECIALLY
DESIGNATED NATIONAL AND BLOCKED PERSON” ON THE MOST CURRENT LIST PUBLISHED BY
THE U.S. TREASURY DEPARTMENT OFFICE OF FOREIGN ASSETS CONTROL (“OFAC”) AT ITS
OFFICIAL WEBSITE OR ANY REPLACEMENT WEBSITE OR OTHER REPLACEMENT OFFICIAL
PUBLICATION OF SUCH LIST.

 

(C)                                  NO LOAN PARTY AND, TO THE KNOWLEDGE OF THE
LOAN PARTIES, NO BROKER OR OTHER AGENT OF ANY LOAN PARTY ACTING IN ANY CAPACITY
IN CONNECTION WITH THE LOANS (I) CONDUCTS ANY BUSINESS OR ENGAGES IN MAKING OR
RECEIVING ANY CONTRIBUTION OF FUNDS, GOODS OR SERVICES TO OR FOR THE BENEFIT OF
ANY PERSON DESCRIBED IN PARAGRAPH (B) ABOVE, (II) DEALS IN, OR OTHERWISE ENGAGES
IN ANY TRANSACTION RELATING TO, ANY PROPERTY OR INTERESTS IN PROPERTY BLOCKED
PURSUANT TO THE EXECUTIVE ORDER, OR (III) ENGAGES IN OR CONSPIRES TO ENGAGE IN
ANY TRANSACTION THAT EVADES OR AVOIDS, OR HAS THE PURPOSE OF EVADING OR
AVOIDING, OR ATTEMPTS TO VIOLATE, ANY OF THE PROHIBITIONS SET FORTH IN ANY
ANTI-TERRORISM LAW.

 

SECTION 3.22  LOCATION OF MATERIAL INVENTORY.  SCHEDULE 3.22 SETS FORTH ALL
LOCATIONS IN THE UNITED STATES WHERE THE AGGREGATE VALUE OF INVENTORY OWNED BY
THE LOAN PARTIES EXCEEDS $250,000.

 

SECTION 3.23  ACCURACY OF BORROWING BASE.  AT THE TIME ANY BORROWING BASE
CERTIFICATE IS DELIVERED PURSUANT TO THIS AGREEMENT, EACH ACCOUNT AND EACH ITEM
OF INVENTORY INCLUDED IN THE CALCULATION OF THE BORROWING BASE SATISFIES ALL OF
THE CRITERIA STATED HEREIN (OR OF WHICH BORROWERS HAVE HEREAFTER BEEN NOTIFIED
BY THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT UNDER SECTION 2.19) TO BE
AN ELIGIBLE ACCOUNT AND AN ITEM OF ELIGIBLE INVENTORY, RESPECTIVELY.

 

SECTION 3.24  POST-AUDIT ASSET DISPOSITIONS.  AS OF THE CLOSING DATE, BORROWERS
AND THEIR SUBSIDIARIES HAVE NOT DISPOSED OF ASSETS (OTHER THAN INVENTORY SOLD IN
THE ORDINARY COURSE OF THEIR BUSINESS) WHICH ARE SET FORTH IN THE INVENTORY
APPRAISAL AND WHICH HAVE AN AGGREGATE FAIR MARKET VALUE OF MORE THAN $250,000.

 

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ARTICLE IV.
 
CONDITIONS TO CREDIT EXTENSIONS

 

SECTION 4.01  CONDITIONS TO INITIAL CREDIT EXTENSION.  THE OBLIGATION OF EACH
LENDER AND, IF APPLICABLE, EACH ISSUING BANK TO FUND THE INITIAL CREDIT
EXTENSION REQUESTED TO BE MADE BY IT SHALL BE SUBJECT TO THE PRIOR OR CONCURRENT
SATISFACTION OF EACH OF THE CONDITIONS PRECEDENT SET FORTH IN THIS SECTION 4.01.

 

(A)                                  LOAN DOCUMENTS.  ALL LEGAL MATTERS INCIDENT
TO THIS AGREEMENT, THE CREDIT EXTENSIONS HEREUNDER AND THE OTHER LOAN DOCUMENTS
SHALL BE REASONABLY SATISFACTORY TO THE LENDERS, TO THE ISSUING BANK AND TO THE
ADMINISTRATIVE AGENT AND THERE SHALL HAVE BEEN DELIVERED TO THE ADMINISTRATIVE
AGENT AN EXECUTED COUNTERPART OF EACH OF THE LOAN DOCUMENTS, INCLUDING THIS
AGREEMENT, THE SECURITY AGREEMENT, THE INTERCREDITOR AGREEMENT, EACH MORTGAGE,
THE PERFECTION CERTIFICATE AND EACH OTHER APPLICABLE LOAN DOCUMENT.

 

(B)                                 CORPORATE DOCUMENTS.  THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED:

 

(I)                                     A CERTIFICATE OF THE SECRETARY OR
ASSISTANT SECRETARY OF EACH LOAN PARTY DATED THE CLOSING DATE AND CERTIFYING
(A) THAT ATTACHED THERETO IS A TRUE AND COMPLETE COPY OF THE CERTIFICATE OR
ARTICLES OF INCORPORATION OR OTHER CONSTITUTIVE DOCUMENTS, INCLUDING ALL
AMENDMENTS THERETO CERTIFIED AS OF A RECENT DATE BY THE SECRETARY OF STATE OF
THE STATE OF ITS ORGANIZATION, (B) THAT ATTACHED THERETO IS A TRUE AND COMPLETE
COPY OF THE BY-LAWS OF SUCH LOAN PARTY AS IN EFFECT ON THE CLOSING DATE AND AT
ALL TIMES SINCE A DATE PRIOR TO THE DATE OF THE RESOLUTIONS DESCRIBED IN CLAUSE
(C) BELOW, (C) THAT ATTACHED THERETO IS A TRUE AND COMPLETE COPY OF RESOLUTIONS
DULY ADOPTED BY THE BOARD OF DIRECTORS OF SUCH LOAN PARTY AUTHORIZING THE
EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS TO WHICH SUCH PERSON
IS A PARTY AND, IN THE CASE OF BORROWERS, THE BORROWINGS HEREUNDER, AND THAT
SUCH RESOLUTIONS HAVE NOT BEEN MODIFIED, RESCINDED OR AMENDED AND ARE IN FULL
FORCE AND EFFECT, (D) AS TO THE INCUMBENCY AND SPECIMEN SIGNATURE OF EACH
OFFICER EXECUTING ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT DELIVERED IN
CONNECTION HEREWITH ON BEHALF OF SUCH LOAN PARTY (TOGETHER WITH A CERTIFICATE OF
ANOTHER OFFICER AS TO THE INCUMBENCY AND SPECIMEN SIGNATURE OF THE SECRETARY OR
ASSISTANT SECRETARY EXECUTING THE CERTIFICATE IN THIS CLAUSE (I);

 

(II)                                  A LONG FORM CERTIFICATE AS TO THE GOOD
STANDING (IN SUCH JURISDICTIONS WHERE SUCH CERTIFICATES ARE ISSUED AND, IN
JURISDICTIONS WHERE A LONG FORM CERTIFICATE OF GOOD STANDING IS NOT ISSUED, A
SHORT FORM CERTIFICATE OF GOOD STANDING) OF EACH LOAN PARTY AS OF A RECENT DATE,
FROM SUCH SECRETARY OF STATE; AND

 

(III)                               SUCH OTHER DOCUMENTS AS THE LENDERS, THE
ISSUING BANK OR THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.

 

(C)                                  OFFICERS’ CERTIFICATE.  THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED A CERTIFICATE, DATED THE CLOSING DATE AND SIGNED BY
THE CHIEF EXECUTIVE OFFICER AND THE CHIEF FINANCIAL OFFICER OF EACH BORROWER (OR
IN THE CASE OF LENOX, THE CHIEF FINANCIAL OFFICER AND ANOTHER OFFICER),
CONFIRMING COMPLIANCE WITH THE CONDITIONS PRECEDENT SET FORTH IN PARAGRAPHS (F),
(I), (J)

 

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AND (K) OF THIS SECTION 4.01, CLAUSES (II), (III) AND (V) OF PARAGRAPH (D) OF
THIS SECTION 4.01 AND PARAGRAPHS (B), (C), (D) AND (E) OF SECTION 4.02.

 

(D)                                 FINANCINGS AND OTHER TRANSACTIONS, ETC.

 

(I)                                     THE LENDERS SHALL BE SATISFIED WITH THE
FORM AND SUBSTANCE OF THE TRANSACTION DOCUMENTS (INCLUDING FAIRNESS OPINIONS,
EMPLOYMENT AGREEMENTS, INDEMNITY AGREEMENTS AND COMFORT LETTERS, IF ANY, RELATED
TO THE ACQUISITION).

 

(II)                                  THE TOTAL DEBT FINANCING REQUIREMENTS FOR
THE TRANSACTION SHALL NOT EXCEED $205.0 MILLION AND THE TRANSACTIONS SHALL HAVE
BEEN CONSUMMATED OR SHALL BE CONSUMMATED SIMULTANEOUSLY ON THE CLOSING DATE, IN
EACH CASE IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH THE TERMS HEREOF AND THE
TERMS OF THE TRANSACTION DOCUMENTS (AND WITHOUT THE WAIVER OR AMENDMENT OF ANY
SUCH TERMS NOT APPROVED BY THE ADMINISTRATIVE AGENT AND BORROWERS SHALL HAVE
DELIVERED COPIES OF EXECUTED ACQUISITION DOCUMENTS, CERTIFIED BY EACH BORROWER’S
CHIEF FINANCIAL OFFICER AS CURRENT).

 

(III)                               BORROWER SHALL HAVE RECEIVED NOT LESS THAN
$100.0 MILLION FROM THE PROCEEDS OF THE TERM LOAN INDEBTEDNESS AND THE TERM LOAN
AGREEMENT SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE LENDERS AND COPIES
OF THE EXECUTED TERM LOAN DOCUMENTS SHALL HAVE BEEN DELIVERED TO THE
ADMINISTRATIVE AGENT.

 

(IV)                              THE LENDERS SHALL BE SATISFIED WITH THE
CAPITALIZATION, THE TERMS AND CONDITIONS OF ANY EQUITY ARRANGEMENTS AND THE
CORPORATE OR OTHER ORGANIZATIONAL STRUCTURE OF THE COMPANIES (AFTER GIVING
EFFECT TO THE TRANSACTIONS).

 

(V)                                 THE REFINANCING SHALL HAVE BEEN CONSUMMATED
IN FULL TO THE SATISFACTION OF THE LENDERS WITH ALL LIENS IN FAVOR OF THE
EXISTING LENDERS BEING UNCONDITIONALLY RELEASED; THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED A “PAY-OFF” LETTER WITH RESPECT TO ALL DEBT BEING REFINANCED IN
THE REFINANCING; THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED FROM ANY PERSON
HOLDING ANY LIEN SECURING ANY SUCH DEBT, SUCH UCC TERMINATION STATEMENTS,
MORTGAGE RELEASES, RELEASES OF ASSIGNMENTS OF LEASES AND RENTS AND OTHER
INSTRUMENTS, IN EACH CASE IN PROPER FORM FOR RECORDING, AS THE ADMINISTRATIVE
AGENT SHALL HAVE REASONABLY REQUESTED TO RELEASE AND TERMINATE OF RECORD THE
LIENS SECURING SUCH DEBT.

 

(E)                                  FINANCIAL STATEMENTS; PRO FORMA BALANCE
SHEET; PROJECTIONS.  THE LENDERS SHALL HAVE RECEIVED AND SHALL BE REASONABLY
SATISFIED WITH THE FORM AND SUBSTANCE OF THE FINANCIAL STATEMENTS DESCRIBED IN
SECTION 3.04 AND WITH THE FORECASTS OF THE BORROWING BASE AND THE FINANCIAL
PERFORMANCE OF HOLDINGS AND BORROWERS AND THEIR RESPECTIVE SUBSIDIARIES.

 

(F)                                    INDEBTEDNESS AND MINORITY INTERESTS. 
AFTER GIVING EFFECT TO THE TRANSACTIONS AND THE OTHER TRANSACTIONS CONTEMPLATED
HEREBY, NO COMPANY SHALL HAVE OUTSTANDING ANY INDEBTEDNESS FOR BORROWED MONEY,
PREFERRED STOCK OR MINORITY INTERESTS OTHER THAN (I) THE LOANS AND EXTENSIONS OF
CREDIT HEREUNDER, (II) THE LOANS AND EXTENSIONS OF CREDIT UNDER THE TERM LOAN
CREDIT AGREEMENT (III) THE CAPITAL LEASE OBLIGATIONS AND OTHER INDEBTEDNESS
LISTED ON SCHEDULE 6.01, AND (IV) INDEBTEDNESS OWED TO BORROWERS OR ANY
GUARANTOR.

 

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(G)                                 OPINIONS OF COUNSEL.  THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED, ON BEHALF OF ITSELF, THE OTHER AGENTS, THE ARRANGER,
THE LENDERS AND THE ISSUING BANK, A FAVORABLE WRITTEN OPINION OF (I) DORSEY &
WHITNEY LLP, SPECIAL COUNSEL FOR THE LOAN PARTIES, SUBSTANTIALLY TO THE EFFECT
SET FORTH IN EXHIBIT K-1, AND (II) EACH LOCAL COUNSEL LISTED ON
SCHEDULE 4.01(G), SUBSTANTIALLY TO THE EFFECT SET FORTH IN EXHIBIT K-2, IN EACH
CASE (A) DATED THE CLOSING DATE, (B) ADDRESSED TO THE AGENTS, THE ISSUING BANK
AND THE LENDERS AND (C) COVERING SUCH OTHER MATTERS RELATING TO THE LOAN
DOCUMENTS AND THE TRANSACTIONS AS THE ADMINISTRATIVE AGENT SHALL REASONABLY
REQUEST, AND (III) A COPY OF EACH LEGAL OPINION, IF ANY, DELIVERED UNDER THE
OTHER TRANSACTION DOCUMENTS, AND BORROWERS SHALL USE THEIR BEST EFFORTS TO
DELIVER RELIANCE LETTERS FROM THE PARTY DELIVERING SUCH OPINION AUTHORIZING THE
AGENTS, LENDERS AND THE ISSUING BANK TO RELY THEREON AS IF SUCH OPINION WERE
ADDRESSED TO THEM.

 

(H)                                 SOLVENCY CERTIFICATE AND OTHER REPORTS. 
(I)  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED ALL AUDITS, REPORTS AND
OPINIONS OF APPRAISERS, CONSULTANTS OR OTHER ADVISORS RETAINED BY IT TO REVIEW
THE COLLATERAL, BUSINESS, OPERATION OR CONDITION OF BORROWERS AND THEIR
SUBSIDIARIES GIVING EFFECT TO THE TRANSACTIONS, AND SHALL BE SATISFIED WITH SUCH
AUDITS, REPORTS AND OPINIONS.

 

(II)                                  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A SOLVENCY CERTIFICATE IN THE FORM OF EXHIBIT M, DATED THE CLOSING DATE
AND SIGNED BY THE CHIEF FINANCIAL OFFICER OF EACH BORROWER.

 

(I)                                     REQUIREMENTS OF LAW.  THE LENDERS SHALL
BE SATISFIED THAT THE TRANSACTIONS SHALL BE IN FULL COMPLIANCE WITH ALL MATERIAL
REQUIREMENTS OF LAW, INCLUDING WITHOUT LIMITATION REGULATIONS T, U AND X OF THE
BOARD.  THE LENDERS SHALL HAVE RECEIVED REASONABLY SATISFACTORY EVIDENCE OF
COMPLIANCE WITH ALL APPLICABLE REQUIREMENTS OF LAW, INCLUDING ALL APPLICABLE
ENVIRONMENTAL LAWS AND REGULATIONS.

 

(J)                                     CONSENTS.  THE LENDERS SHALL BE
SATISFIED THAT ALL REQUISITE GOVERNMENTAL AUTHORITIES AND THIRD PARTIES SHALL
HAVE APPROVED OR CONSENTED TO THE TRANSACTIONS, AND THERE SHALL BE NO
GOVERNMENTAL OR JUDICIAL ACTION, ACTUAL OR THREATENED, THAT HAS OR WOULD HAVE,
SINGLY OR IN THE AGGREGATE, A REASONABLE LIKELIHOOD OF RESTRAINING, PREVENTING
OR IMPOSING BURDENSOME CONDITIONS ON THE TRANSACTIONS OR THE OTHER TRANSACTIONS
CONTEMPLATED HEREBY.

 

(K)                                  LITIGATION.  THERE SHALL BE NO LITIGATION,
PUBLIC OR PRIVATE, OR ADMINISTRATIVE PROCEEDINGS, GOVERNMENTAL INVESTIGATION OR
OTHER LEGAL OR REGULATORY DEVELOPMENTS, ACTUAL OR THREATENED, THAT, SINGLY OR IN
THE AGGREGATE, COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT, OR COULD MATERIALLY AND ADVERSELY AFFECT THE ABILITY OF HOLDINGS,
BORROWERS AND THE SUBSIDIARIES TO FULLY AND TIMELY PERFORM THEIR RESPECTIVE
OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS, OR THE ABILITY OF THE PARTIES TO
CONSUMMATE THE FINANCINGS CONTEMPLATED HEREBY OR THE OTHER TRANSACTIONS.

 

(L)                                     SOURCES AND USES.  THE SOURCES AND USES
OF THE LOANS SHALL BE AS SET FORTH IN SECTION 3.11.

 

(M)                               FEES.  THE ARRANGER, COLLATERAL AGENT AND
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED ALL FEES AND OTHER AMOUNTS DUE AND
PAYABLE ON OR PRIOR TO THE CLOSING DATE, INCLUDING, TO THE EXTENT INVOICED,
REIMBURSEMENT OR PAYMENT OF ALL OUT-OF-POCKET EXPENSES (INCLUDING THE

 

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REASONABLE LEGAL FEES AND EXPENSES OF WINSTON & STRAWN LLP, SPECIAL COUNSEL TO
THE ADMINISTRATIVE AGENT, AND THE REASONABLE FEES AND EXPENSES OF ANY LOCAL
COUNSEL, APPRAISERS, CONSULTANTS AND OTHER ADVISORS) REQUIRED TO BE REIMBURSED
OR PAID BY BORROWERS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT.

 

(N)                                 PERSONAL PROPERTY REQUIREMENTS.  THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED:

 

(I)                                     ALL CERTIFICATES, AGREEMENTS OR
INSTRUMENTS REPRESENTING OR EVIDENCING THE PLEDGED SECURITIES AND THE PLEDGED
NOTES (EACH AS DEFINED IN THE SECURITY AGREEMENT) ACCOMPANIED BY INSTRUMENTS OF
TRANSFER AND STOCK POWERS ENDORSED IN BLANK SHALL HAVE BEEN DELIVERED TO THE
ADMINISTRATIVE AGENT;

 

(II)                                  ALL OTHER CERTIFICATES, AGREEMENTS,
INCLUDING CONTROL AGREEMENTS, OR INSTRUMENTS NECESSARY TO PERFECT THE
ADMINISTRATIVE AGENT’S SECURITY INTEREST IN ALL CHATTEL PAPER, ALL INSTRUMENTS
AND ALL INVESTMENT PROPERTY OF EACH LOAN PARTY (AS EACH SUCH TERM IS DEFINED IN
THE SECURITY AGREEMENT AND TO THE EXTENT REQUIRED BY SECTION 3.4 OF THE SECURITY
AGREEMENT);

 

(III)                               UCC FINANCING STATEMENTS IN APPROPRIATE FORM
FOR FILING UNDER THE UCC, FILINGS WITH THE UNITED STATES PATENT, TRADEMARK AND
COPYRIGHT OFFICES AND SUCH OTHER DOCUMENTS UNDER APPLICABLE REQUIREMENTS OF LAW
IN EACH JURISDICTION AS MAY BE NECESSARY OR APPROPRIATE OR, IN THE OPINION OF
THE ADMINISTRATIVE AGENT, DESIRABLE TO PERFECT THE LIENS CREATED, OR PURPORTED
TO BE CREATED, BY THE SECURITY DOCUMENTS.

 

(IV)                              CERTIFIED COPIES OF UCC, TAX AND JUDGMENT LIEN
SEARCHES, BANKRUPTCY AND PENDING LAWSUIT SEARCHES OR EQUIVALENT REPORTS OR
SEARCHES, EACH OF A RECENT DATE LISTING ALL EFFECTIVE FINANCING STATEMENTS, LIEN
NOTICES OR COMPARABLE DOCUMENTS THAT NAME ANY LOAN PARTY AS DEBTOR AND THAT ARE
FILED IN THOSE STATE AND COUNTY JURISDICTIONS IN WHICH ANY PROPERTY OF ANY LOAN
PARTY IS LOCATED AND THE STATE AND COUNTY JURISDICTIONS IN WHICH ANY LOAN PARTY
IS ORGANIZED OR MAINTAINS ITS PRINCIPAL PLACE OF BUSINESS AND SUCH OTHER
SEARCHES THAT THE ADMINISTRATIVE AGENT DEEMS NECESSARY OR APPROPRIATE, NONE OF
WHICH ENCUMBER THE COLLATERAL COVERED OR INTENDED TO BE COVERED BY THE SECURITY
DOCUMENTS (OTHER THAN PERMITTED LIENS);

 

(V)                                 WITH RESPECT TO EACH REAL PROPERTY SET FORTH
ON SCHEDULE 4.01(N), SUCH LOAN PARTY SHALL HAVE OBTAINED A LANDLORD LIEN WAIVER
AND ACCESS AGREEMENT OR, IF APPLICABLE, A BAILEE LETTER OR OTHER APPROPRIATE
WAIVER AND ACCESS AGREEMENT;

 

(VI)                              A CUSTOMS BROKER AGREEMENT IN FORM AND
SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT WITH
RESPECT TO THE DOCUMENTS COVERING ELIGIBLE IN-TRANSIT INVENTORY; AND

 

(VII)                           EVIDENCE ACCEPTABLE TO THE ADMINISTRATIVE AGENT
OF PAYMENT BY THE LOAN PARTIES OF ALL APPLICABLE RECORDING TAXES, FEES, CHARGES,
COSTS AND EXPENSES REQUIRED FOR THE RECORDING OF THE SECURITY DOCUMENTS.

 

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(O)                                 REAL PROPERTY REQUIREMENTS.  THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED:

 

(I)                                     A MORTGAGE ENCUMBERING EACH MORTGAGED
REAL PROPERTY IN FAVOR OF ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE SECURED
PARTIES, DULY EXECUTED AND ACKNOWLEDGED BY EACH LOAN PARTY THAT IS THE OWNER OF
OR HOLDER OF ANY INTEREST IN SUCH MORTGAGED REAL PROPERTY, AND OTHERWISE IN FORM
FOR RECORDING IN THE RECORDING OFFICE OF EACH POLITICAL SUBDIVISION WHERE EACH
SUCH MORTGAGED REAL PROPERTY IS SITUATED, TOGETHER WITH SUCH CERTIFICATES,
AFFIDAVITS, QUESTIONNAIRES OR RETURNS AS SHALL BE REQUIRED IN CONNECTION WITH
THE RECORDING OR FILING THEREOF TO CREATE A LIEN UNDER APPLICABLE LAW, AND SUCH
UCC-1 FINANCING STATEMENTS, ALL OF WHICH SHALL BE IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT, AND ANY OTHER INSTRUMENTS
NECESSARY TO GRANT A MORTGAGE LIEN UNDER THE LAWS OF ANY APPLICABLE
JURISDICTION;

 

(II)                                  WITH RESPECT TO EACH MORTGAGED REAL
PROPERTY, SUCH CONSENTS, APPROVALS, AMENDMENTS, SUPPLEMENTS OR OTHER INSTRUMENTS
AS NECESSARY OR REQUIRED TO CONSUMMATE THE TRANSACTIONS OR AS SHALL REASONABLY
BE DEEMED NECESSARY BY THE ADMINISTRATIVE AGENT IN ORDER FOR THE OWNER OR HOLDER
OF THE FEE OR LEASEHOLD INTEREST CONSTITUTING SUCH MORTGAGED REAL PROPERTY TO
GRANT THE LIEN CONTEMPLATED BY THE MORTGAGE WITH RESPECT TO SUCH MORTGAGED REAL
PROPERTY;

 

(III)                               WITH RESPECT TO EACH MORTGAGE, A POLICY (OR
COMMITMENT TO ISSUE A POLICY) OF TITLE INSURANCE INSURING (OR COMMITTING TO
INSURE) THE LIEN OF SUCH MORTGAGE AS A VALID SECOND MORTGAGE LIEN ON THE
MORTGAGED REAL PROPERTY AND FIXTURES DESCRIBED THEREIN (JUNIOR ONLY TO THE LIEN
SECURING THE TERM LOAN INDEBTEDNESS) IN THE AMOUNT SET FORTH ON
SCHEDULE 4.01(O)(III) HERETO WITH RESPECT TO SUCH MORTGAGED REAL PROPERTY WHICH
POLICIES (OR COMMITMENTS) (EACH, A “TITLE POLICY”) SHALL (A) BE ISSUED BY THE
TITLE COMPANY, (B) TO THE EXTENT NECESSARY, INCLUDE SUCH REINSURANCE
ARRANGEMENTS (WITH PROVISIONS FOR DIRECT ACCESS, IF NECESSARY) AS SHALL BE
REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT, (C) CONTAIN A “TIE-IN” OR
“CLUSTER” ENDORSEMENT (IF AVAILABLE UNDER APPLICABLE LAW) (I.E., POLICIES WHICH
INSURE AGAINST LOSSES REGARDLESS OF LOCATION OR ALLOCATED VALUE OF THE INSURED
PROPERTY UP TO A STATED MAXIMUM COVERAGE AMOUNT), (D) HAVE BEEN SUPPLEMENTED BY
SUCH ENDORSEMENTS (OR WHERE SUCH ENDORSEMENTS ARE NOT AVAILABLE, OPINIONS OF
SPECIAL COUNSEL, ARCHITECTS OR OTHER PROFESSIONALS REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT TO THE EXTENT THAT SUCH OPINIONS CAN BE OBTAINED AT A COST
WHICH IS REASONABLE WITH RESPECT TO THE VALUE OF THE MORTGAGED REAL PROPERTY
SUBJECT TO SUCH MORTGAGE) AS SHALL BE REASONABLY REQUESTED BY THE ADMINISTRATIVE
AGENT (INCLUDING, WITHOUT LIMITATION, ENDORSEMENTS ON MATTERS RELATING TO USURY,
FIRST LOSS, LAST DOLLAR, ZONING, CONTIGUITY, REVOLVING CREDIT, DOING BUSINESS,
NON-IMPUTATION, PUBLIC ROAD ACCESS, SURVEY, VARIABLE RATE, ENVIRONMENTAL LIEN
AND SO-CALLED COMPREHENSIVE COVERAGE OVER COVENANTS AND RESTRICTIONS), AND
(E) CONTAIN NO EXCEPTIONS TO TITLE OTHER THAN EXCEPTIONS REASONABLY ACCEPTABLE
TO THE ADMINISTRATIVE AGENT;

 

(IV)                              WITH RESPECT TO EACH MORTGAGED REAL PROPERTY,
SUCH AFFIDAVITS, CERTIFICATES, INFORMATION (INCLUDING FINANCIAL DATA) AND
INSTRUMENTS OF INDEMNIFICATION (INCLUDING, WITHOUT LIMITATION, A SO-CALLED “GAP”
INDEMNIFICATION) AS SHALL BE REQUIRED TO INDUCE THE TITLE COMPANY TO ISSUE THE
TITLE POLICIES (OR COMMITMENT) AND ENDORSEMENTS CONTEMPLATED IN SUBPARAGRAPH
(III) ABOVE;

 

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(V)                                 EVIDENCE REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT OF PAYMENT BY BORROWERS OF ALL TITLE POLICY PREMIUMS,
SEARCH AND EXAMINATION CHARGES, AND RELATED CHARGES, MORTGAGE RECORDING TAXES,
FEES, CHARGES, COSTS AND EXPENSES REQUIRED FOR THE RECORDING OF THE MORTGAGES
AND ISSUANCE OF THE TITLE POLICIES REFERRED TO SUBPARAGRAPH (III) ABOVE;

 

(VI)                              WITH RESPECT TO EACH REAL PROPERTY OR
MORTGAGED REAL PROPERTY, COPIES OF ALL LEASES IN WHICH BORROWERS OR ANY
SUBSIDIARY HOLDS THE LESSOR’S INTEREST OR OTHER AGREEMENTS RELATING TO
POSSESSORY INTERESTS, IF ANY.  TO THE EXTENT ANY OF THE FOREGOING AFFECT ANY
MORTGAGED REAL PROPERTY, SUCH AGREEMENT SHALL BE SUBORDINATE TO THE LIEN OF THE
MORTGAGE TO BE RECORDED AGAINST SUCH MORTGAGED REAL PROPERTY, EITHER EXPRESSLY
BY ITS TERMS OR PURSUANT TO A SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT, AND SHALL OTHERWISE BE ACCEPTABLE TO THE ADMINISTRATIVE AGENT;

 

(VII)                           WITH RESPECT TO EACH MORTGAGED REAL PROPERTY,
BORROWERS AND EACH SUBSIDIARY SHALL HAVE MADE ALL NOTIFICATION, REGISTRATIONS
AND FILINGS, TO THE EXTENT REQUIRED BY, AND IN ACCORDANCE WITH, ALL GOVERNMENTAL
REAL PROPERTY DISCLOSURE REQUIREMENTS APPLICABLE TO SUCH MORTGAGED REAL
PROPERTY; AND

 

(VIII)                        WITHIN SIXTY (60) DAYS AFTER THE CLOSING DATE,
SURVEYS WITH RESPECT TO EACH MORTGAGED REAL PROPERTY.

 

(P)                                 INSURANCE.  THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED A COPY OF, OR A CERTIFICATE AS TO COVERAGE UNDER, THE INSURANCE
POLICIES REQUIRED BY SECTION 5.04 AND THE APPLICABLE PROVISIONS OF THE SECURITY
DOCUMENTS, EACH OF WHICH SHALL BE ENDORSED OR OTHERWISE AMENDED TO INCLUDE A
“STANDARD” OR “NEW YORK” LENDER’S LOSS PAYABLE ENDORSEMENT AND TO NAME THE
ADMINISTRATIVE AGENT AS ADDITIONAL INSURED, IN FORM AND SUBSTANCE SATISFACTORY
TO THE ADMINISTRATIVE AGENT.

 

(Q)                                 BORROWING BASE CERTIFICATE.  THE COLLATERAL
AGENT AND THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A BORROWING BASE
CERTIFICATE, DATED AS OF THE CLOSING DATE.

 

(R)                                    TAKE-OVER AUDIT.  WITHIN FIVE (5) DAYS
PRIOR TO THE CLOSING DATE, THE ADMINISTRATIVE AGENT’S AND COLLATERAL AGENT’S
STAFF SHALL HAVE CONDUCTED A SUPPLEMENTAL “TAKE-OVER AUDIT” WHICH SUPPORTS AND
CONFIRMS (I) THE CALCULATION OF THE INITIAL BORROWING BASE, (II) NO MATERIAL
CHANGE IN THE PROCEDURES SINCE THE DELIVERY OF THE INVENTORY APPRAISAL, (III) NO
MATERIAL CHANGE IN SALES, INVENTORY TURN OR THE LEVEL OF INVENTORY SINCE THE
DELIVERY OF THE INVENTORY APPRAISAL AND (IV) THE ACCURACY OF ALL REPRESENTATIONS
AND WARRANTIES SET FORTH HEREIN.

 

(S)                                  USA PATRIOT ACT.  THE LENDERS SHALL HAVE
RECEIVED, SUFFICIENTLY IN ADVANCE OF THE CLOSING DATE, ALL DOCUMENTATION AND
OTHER INFORMATION REQUIRED BY BANK REGULATORY AUTHORITIES UNDER APPLICABLE “KNOW
YOUR CUSTOMER” AND ANTI-MONEY LAUNDERING RULES AND REGULATIONS, INCLUDING
WITHOUT LIMITATION, THE UNITED STATES PATRIOT ACT (TITLE III OF PUB. L. 107-56
(SIGNED INTO LAW OCTOBER 26, 2001)) INCLUDING, WITHOUT LIMITATION, THE
INFORMATION DESCRIBED IN SECTION 11.15.

 

SECTION 4.02  CONDITIONS TO ALL CREDIT EXTENSIONS.  THE OBLIGATION OF EACH
LENDER AND EACH ISSUING BANK TO MAKE ANY CREDIT EXTENSION (INCLUDING THE INITIAL
CREDIT EXTENSION) SHALL BE SUBJECT TO, AND TO THE SATISFACTION OF, EACH OF THE
CONDITIONS PRECEDENT SET FORTH BELOW.

 

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(A)                                  NOTICE.  THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED A BORROWING REQUEST AS REQUIRED BY SECTION 2.03 (OR SUCH NOTICE
SHALL HAVE BEEN DEEMED GIVEN IN ACCORDANCE WITH SECTION 2.03) IF LOANS ARE BEING
REQUESTED OR, IN THE CASE OF THE ISSUANCE, AMENDMENT, EXTENSION OR RENEWAL OF A
LETTER OF CREDIT, THE ISSUING BANK AND THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A NOTICE REQUESTING THE ISSUANCE, AMENDMENT, EXTENSION OR RENEWAL OF
SUCH LETTER OF CREDIT AS REQUIRED BY SECTION 2.18(B) OR, IN THE CASE OF THE
BORROWING OF A SWINGLINE LOAN, THE SWINGLINE LENDER AND THE ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED A NOTICE REQUESTING SUCH SWINGLINE LOAN AS REQUIRED BY
SECTION 2.17(B).

 

(B)                                 NO DEFAULT.  BORROWERS AND EACH OTHER LOAN
PARTY SHALL BE IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL THE TERMS AND
PROVISIONS SET FORTH HEREIN AND IN EACH OTHER LOAN DOCUMENT ON ITS PART TO BE
OBSERVED OR PERFORMED, AND, AT THE TIME OF AND IMMEDIATELY AFTER SUCH CREDIT
EXTENSION, NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING ON SUCH DATE OR
AFTER GIVING EFFECT TO THE CREDIT EXTENSION REQUESTED TO BE MADE ON SUCH DATE;
PROVIDED, THAT, IF THE CONDITIONS SET FORTH IN THIS SECTION 4.02(B) ARE NOT
SATISFIED, EACH LENDER AND EACH ISSUING BANK SHALL CONTINUE TO BE OBLIGATED TO
MAKE CREDIT EXTENSIONS UNLESS AND UNTIL SUCH TIME AS THE ADMINISTRATIVE AGENT OR
THE REQUIRED LENDERS ELECT TO CEASE MAKING CREDIT EXTENSIONS AS A RESULT
THEREOF.

 

(C)                                  REPRESENTATIONS AND WARRANTIES.  EACH OF
THE REPRESENTATIONS AND WARRANTIES MADE BY ANY LOAN PARTY SET FORTH IN
ARTICLE III HEREOF OR IN ANY OTHER LOAN DOCUMENT SHALL BE TRUE AND CORRECT IN
ALL MATERIAL RESPECTS (EXCEPT THAT ANY REPRESENTATION AND WARRANTY THAT IS
QUALIFIED AS TO “MATERIALITY” OR “MATERIAL ADVERSE EFFECT” SHALL BE TRUE AND
CORRECT IN ALL RESPECTS) ON AND AS OF THE DATE OF SUCH CREDIT EXTENSION WITH THE
SAME EFFECT AS THOUGH MADE ON AND AS OF SUCH DATE, EXCEPT TO THE EXTENT SUCH
REPRESENTATIONS AND WARRANTIES EXPRESSLY RELATE TO AN EARLIER DATE.

 

(D)                                 NO MATERIAL ADVERSE EFFECT.  THERE HAS BEEN
NO EVENT, CONDITION AND/OR CONTINGENCY THAT HAS HAD OR IS REASONABLE LIKELY TO
HAVE A MATERIAL ADVERSE EFFECT.

 

(E)                                  NO LEGAL BAR.  NO ORDER, JUDGMENT OR DECREE
OF ANY GOVERNMENTAL AUTHORITY SHALL PURPORT TO RESTRAIN ANY LENDER FROM MAKING
ANY LOANS TO BE MADE BY IT.  NO INJUNCTION OR OTHER RESTRAINING ORDER SHALL HAVE
BEEN ISSUED, SHALL BE PENDING OR NOTICED WITH RESPECT TO ANY ACTION, SUIT OR
PROCEEDING SEEKING TO ENJOIN OR OTHERWISE PREVENT THE CONSUMMATION OF, OR TO
RECOVER ANY DAMAGES OR OBTAIN RELIEF AS A RESULT OF, THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR THE MAKING OF LOANS HEREUNDER.

 

Each of the delivery of a Borrowing Request or notice requesting the issuance,
amendment, extension or renewal of a Letter of Credit and the acceptance by
Borrowers of the proceeds of such Credit Extension shall constitute a
representation and warranty by Borrowers and each other Loan Party that on the
date of such Credit Extension (both immediately before and after giving effect
to such Credit Extension and the application of the proceeds thereof) the
conditions contained in this Section 4.02 have been satisfied.  Borrowers shall
provide such information (including calculations in reasonable detail of the
covenants in Section 6.08) as the Administrative Agent may reasonably request to
confirm that the conditions in this Section 4.02 have been satisfied.

 

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ARTICLE V.
 
AFFIRMATIVE COVENANTS

 

Each Loan Party covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full and all
Letters of Credit have been canceled or have expired or been fully cash
collateralized and all amounts drawn thereunder have been reimbursed in full,
unless the Required Lenders shall otherwise consent in writing, each Loan Party
will, and will cause each of its Subsidiaries to:

 

SECTION 5.01  FINANCIAL STATEMENTS, REPORTS, ETC.  IN THE CASE OF HOLDINGS AND
BORROWERS, FURNISH TO THE ADMINISTRATIVE AGENT AND EACH LENDER:

 

(A)                                  ANNUAL REPORTS.  WITHIN 90 DAYS AFTER THE
END OF EACH FISCAL YEAR (BUT NO LATER THAN THE DATE ON WHICH HOLDINGS IS
REQUIRED TO FILE A FORM 10-K UNDER THE EXCHANGE ACT), (I) THE CONSOLIDATED
BALANCE SHEET OF HOLDINGS AS OF THE END OF SUCH FISCAL YEAR AND RELATED
CONSOLIDATED STATEMENTS OF INCOME, CASH FLOWS AND STOCKHOLDERS’ EQUITY FOR SUCH
FISCAL YEAR, AND NOTES THERETO, ALL PREPARED IN ACCORDANCE WITH REGULATION S-X
UNDER THE SECURITIES ACT AND ACCOMPANIED BY AN OPINION OF DELOITTE & TOUCHE LLP
OR OTHER INDEPENDENT PUBLIC ACCOUNTANTS OF RECOGNIZED NATIONAL STANDING
SATISFACTORY TO THE ADMINISTRATIVE AGENT OR ONE OF THE “BIG 4” ACCOUNTING FIRMS
(WHICH OPINION SHALL NOT BE QUALIFIED AS TO SCOPE OR CONTAIN ANY GOING CONCERN
OR OTHER QUALIFICATION), STATING THAT SUCH FINANCIAL STATEMENTS FAIRLY PRESENT,
IN ALL MATERIAL RESPECTS, THE CONSOLIDATED FINANCIAL CONDITION, RESULTS OF
OPERATIONS, CASH FLOWS AND CHANGES IN STOCKHOLDERS’ EQUITY OF THE CONSOLIDATED
COMPANIES AS OF THE END OF AND FOR SUCH FISCAL YEAR IN ACCORDANCE WITH GAAP
CONSISTENTLY APPLIED, (II) A MANAGEMENT REPORT IN A FORM REASONABLY SATISFACTORY
TO THE ADMINISTRATIVE AGENT SETTING FORTH, ON A CONSOLIDATING BASIS, THE
FINANCIAL CONDITION, RESULTS OF OPERATIONS AND CASH FLOWS OF EACH OF THE
DEPARTMENT 56 BUSINESS AND THE LENOX BUSINESS AS OF THE END OF AND FOR SUCH
FISCAL YEAR, AS COMPARED TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
CASH FLOWS OF SUCH BUSINESS AS OF THE END OF AND FOR THE PREVIOUS FISCAL YEAR
AND ITS BUDGETED RESULTS OF OPERATIONS AND CASH FLOWS, AND (III) A MANAGEMENT’S
DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR
SUCH FISCAL YEAR, AS COMPARED TO THE PREVIOUS FISCAL YEAR;

 

(B)                                 QUARTERLY REPORTS.  WITHIN 45 DAYS AFTER THE
END OF EACH OF THE FIRST THREE FISCAL QUARTERS OF EACH FISCAL YEAR (BUT NO LATER
THAN THE DATE ON WHICH HOLDINGS IS REQUIRED TO FILE A FORM 10-Q UNDER THE
EXCHANGE ACT), (I) THE CONSOLIDATED BALANCE SHEET OF HOLDINGS AS OF THE END OF
SUCH FISCAL QUARTER AND RELATED CONSOLIDATED STATEMENT OF INCOME FOR SUCH FISCAL
QUARTER AND THE RELATED CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE
THEN ELAPSED PORTION OF THE FISCAL YEAR, IN COMPARATIVE FORM WITH THE
CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE COMPARABLE PERIODS IN
THE PREVIOUS FISCAL YEAR, AND NOTES THERETO, ALL PREPARED IN ACCORDANCE WITH
REGULATION S-X UNDER THE SECURITIES ACT AND ACCOMPANIED BY A CERTIFICATE OF A
FINANCIAL OFFICER STATING THAT SUCH FINANCIAL STATEMENTS FAIRLY PRESENT, IN ALL
MATERIAL RESPECTS, THE CONSOLIDATED FINANCIAL CONDITION, RESULTS OF OPERATIONS
AND CASH FLOWS OF THE CONSOLIDATED COMPANIES

 

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AS OF THE DATE AND FOR THE PERIODS SPECIFIED IN ACCORDANCE WITH GAAP
CONSISTENTLY APPLIED, AND ON A BASIS CONSISTENT WITH AUDITED FINANCIAL
STATEMENTS REFERRED TO IN SECTION 5.01(A), SUBJECT TO NORMAL YEAR-END AUDIT
ADJUSTMENTS, (II) A MANAGEMENT REPORT IN A FORM REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT SETTING FORTH, ON A CONSOLIDATING BASIS, THE FINANCIAL
CONDITION, RESULTS OF OPERATIONS AND CASH FLOWS OF EACH OF THE DEPARTMENT 56
BUSINESS AND THE LENOX BUSINESS AS OF THE END OF AND FOR SUCH FISCAL QUARTER AND
FOR THE THEN ELAPSED PORTION OF THE FISCAL YEAR, AS COMPARED TO THE FINANCIAL
CONDITION, RESULTS OF OPERATIONS AND CASH FLOWS OF SUCH BUSINESS AS OF THE END
OF SUCH FISCAL QUARTER AND FOR THE COMPARABLE PERIODS IN THE PREVIOUS FISCAL
YEAR AND ITS BUDGETED RESULTS OF OPERATIONS AND CASH FLOWS, AND (III) A
MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR SUCH FISCAL QUARTER AND THE THEN ELAPSED PORTION OF THE FISCAL
YEAR, AS COMPARED TO THE COMPARABLE PERIODS IN THE PREVIOUS FISCAL YEAR;

 

(C)                                  MONTHLY REPORTS.  WITHIN 30 DAYS (40 DAYS
FOR THE MONTH ENDING JANUARY 31 OF EACH YEAR) AFTER THE END OF THE FIRST TWO
MONTHS OF EACH FISCAL QUARTER, (I) THE CONSOLIDATED STATEMENT OF INCOME OF
HOLDINGS FOR SUCH MONTH AND THE CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS
FOR THE THEN ELAPSED PORTION OF THE FISCAL YEAR, IN COMPARATIVE FORM WITH THE
CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE COMPARABLE PERIODS IN
THE PREVIOUS FISCAL YEAR, ACCOMPANIED BY A CERTIFICATE OF A FINANCIAL OFFICER
STATING THAT SUCH FINANCIAL STATEMENTS FAIRLY PRESENT, IN ALL MATERIAL RESPECTS,
THE CONSOLIDATED RESULTS OF OPERATIONS AND CASH FLOWS OF THE CONSOLIDATED
COMPANIES AS OF THE DATE AND FOR THE PERIODS SPECIFIED IN ACCORDANCE WITH GAAP
CONSISTENTLY APPLIED, SUBJECT TO NORMAL YEAR-END AUDIT ADJUSTMENTS, AND (II) A
MANAGEMENT REPORT IN A FORM REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT
SETTING FORTH, ON A CONSOLIDATING BASIS, THE RESULTS OF OPERATIONS AND CASH
FLOWS OF EACH OF THE DEPARTMENT 56 BUSINESS AND THE LENOX BUSINESS FOR SUCH
MONTH AND FOR THE THEN ELAPSED PORTION OF THE FISCAL YEAR, AS COMPARED TO THE
RESULTS OF OPERATIONS AND CASH FLOWS OF SUCH BUSINESS FOR THE COMPARABLE PERIODS
IN THE PREVIOUS FISCAL YEAR AND ITS BUDGETED RESULTS OF OPERATIONS AND CASH
FLOWS;

 

(D)                                 FINANCIAL OFFICER’S CERTIFICATE.  (I) 
CONCURRENTLY WITH ANY DELIVERY OF FINANCIAL STATEMENTS UNDER PARAGRAPHS (A),
(B) OR (C) ABOVE, A CERTIFICATE OF A FINANCIAL OFFICER CERTIFYING THAT NO
DEFAULT HAS OCCURRED OR, IF SUCH A DEFAULT HAS OCCURRED, SPECIFYING THE NATURE
AND EXTENT THEREOF AND ANY CORRECTIVE ACTION TAKEN OR PROPOSED TO BE TAKEN WITH
RESPECT THERETO; (II) CONCURRENTLY WITH ANY DELIVERY OF FINANCIAL STATEMENTS
UNDER SUB-PARAGRAPH (A) OR (B) ABOVE, A COMPLIANCE CERTIFICATE; AND (III) IN THE
CASE OF PARAGRAPH (A) ABOVE, A REPORT OF THE ACCOUNTING FIRM OPINING ON OR
CERTIFYING SUCH FINANCIAL STATEMENTS STATING THAT IN THE COURSE OF ITS REGULAR
AUDIT OF THE FINANCIAL STATEMENTS OF HOLDINGS AND ITS SUBSIDIARIES, WHICH AUDIT
WAS CONDUCTED IN ACCORDANCE WITH GAAP, SUCH ACCOUNTING FIRM OBTAINED NO
KNOWLEDGE THAT ANY DEFAULT HAS OCCURRED OR, IF IN THE OPINION OF SUCH ACCOUNTING
FIRM SUCH A DEFAULT HAS OCCURRED, SPECIFYING THE NATURE AND EXTENT THEREOF;

 

(E)                                  FINANCIAL OFFICER’S CERTIFICATE REGARDING
COLLATERAL.  CONCURRENTLY WITH ANY DELIVERY OF FINANCIAL STATEMENTS UNDER
PARAGRAPH (A) ABOVE, A PERFECTION CERTIFICATE SUPPLEMENT IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.13(B);

 

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(F)                                    PUBLIC REPORTS.  PROMPTLY AFTER THE SAME
BECOME PUBLICLY AVAILABLE, COPIES OF ALL PERIODIC AND OTHER REPORTS, PROXY
STATEMENTS AND OTHER MATERIALS FILED BY ANY COMPANY WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR ANY GOVERNMENTAL AUTHORITY SUCCEEDING TO ANY OR ALL OF
THE FUNCTIONS OF SAID COMMISSION, OR WITH ANY NATIONAL SECURITIES EXCHANGE, OR
DISTRIBUTED TO HOLDERS OF ITS INDEBTEDNESS PURSUANT TO THE TERMS OF THE
DOCUMENTATION GOVERNING SUCH INDEBTEDNESS (OR ANY TRUSTEE, AGENT OR OTHER
REPRESENTATIVE THEREFOR), AS THE CASE MAY BE;

 

(G)                                 MANAGEMENT LETTERS.  PROMPTLY AFTER THE
RECEIPT THEREOF BY ANY COMPANY, A COPY OF ANY “MANAGEMENT LETTER” RECEIVED BY
ANY SUCH PERSON FROM ITS CERTIFIED PUBLIC ACCOUNTANTS AND THE MANAGEMENT’S
RESPONSES THERETO;

 

(H)                                 BUDGETS.  NO LATER THAN THE FIRST DAY OF
EACH FISCAL YEAR OF HOLDINGS AND BORROWERS, A BUDGET IN FORM REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT (INCLUDING BUDGETED STATEMENTS OF
INCOME BY EACH OF THE DEPARTMENT 56 BUSINESS AND THE LENOX BUSINESS AND SOURCES
AND USES OF CASH AND BALANCE SHEETS) PREPARED BY EACH OF HOLDINGS AND BORROWERS,
RESPECTIVELY, FOR (I) EACH FISCAL MONTH OF SUCH FISCAL YEAR PREPARED IN DETAIL
AND (II) EACH OF THE TWO YEARS IMMEDIATELY FOLLOWING SUCH FISCAL YEAR PREPARED
IN SUMMARY FORM, IN EACH CASE, OF HOLDINGS, BORROWERS AND THEIR RESPECTIVE
SUBSIDIARIES, WITH APPROPRIATE PRESENTATION AND DISCUSSION OF THE PRINCIPAL
ASSUMPTIONS UPON WHICH SUCH BUDGETS ARE BASED, ACCOMPANIED BY THE STATEMENT OF A
FINANCIAL OFFICER OF EACH OF HOLDINGS AND BORROWERS TO THE EFFECT THAT THE
BUDGET OF HOLDINGS AND BORROWERS, RESPECTIVELY, IS A REASONABLE ESTIMATE FOR THE
PERIOD COVERED THEREBY;

 

(I)                                     ANNUAL MEETINGS WITH LENDERS.  WITHIN
120 DAYS AFTER THE CLOSE OF EACH FISCAL YEAR OF HOLDINGS, HOLDINGS AND BORROWERS
SHALL, AT THE REQUEST OF THE ADMINISTRATIVE AGENT OR REQUIRED LENDERS, HOLD A
MEETING (AT A MUTUALLY AGREEABLE LOCATION AND TIME) WITH ALL LENDERS WHO CHOOSE
TO ATTEND SUCH MEETING AT WHICH MEETING SHALL BE REVIEWED THE FINANCIAL RESULTS
OF THE PREVIOUS FISCAL YEAR AND THE FINANCIAL CONDITION OF THE COMPANIES AND THE
BUDGETS PRESENTED FOR THE CURRENT FISCAL YEAR OF THE COMPANIES; AND

 

(J)                                     OTHER INFORMATION.  PROMPTLY, FROM TIME
TO TIME, SUCH OTHER INFORMATION REGARDING THE OPERATIONS, BUSINESS AFFAIRS AND
FINANCIAL CONDITION OF ANY COMPANY, OR COMPLIANCE WITH THE TERMS OF ANY LOAN
DOCUMENT, AS THE ADMINISTRATIVE AGENT OR ANY LENDER MAY REASONABLY REQUEST.

 

SECTION 5.02  LITIGATION AND OTHER NOTICES.  FURNISH TO THE ADMINISTRATIVE AGENT
AND EACH LENDER PROMPT WRITTEN NOTICE OF THE FOLLOWING:

 

(A)                                  ANY DEFAULT, SPECIFYING THE NATURE AND
EXTENT THEREOF AND THE CORRECTIVE ACTION (IF ANY) TAKEN OR PROPOSED TO BE TAKEN
WITH RESPECT THERETO;

 

(B)                                 THE FILING OR COMMENCEMENT OF, OR ANY THREAT
OR NOTICE OF INTENTION OF ANY PERSON TO FILE OR COMMENCE, ANY ACTION, SUIT OR
PROCEEDING, WHETHER AT LAW OR IN EQUITY BY OR BEFORE ANY GOVERNMENTAL AUTHORITY,
(I) AGAINST ANY COMPANY OR ANY AFFILIATE THEREOF

 

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THAT COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT OR
(II) WITH RESPECT TO ANY LOAN DOCUMENT;

 

(C)                                  ANY DEVELOPMENT THAT HAS RESULTED IN, OR
COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT;

 

(D)                                 THE OCCURRENCE OF A CASUALTY EVENT AND WILL
ENSURE THAT THE NET CASH PROCEEDS OF ANY SUCH EVENT (WHETHER IN THE FORM OF
INSURANCE PROCEEDS, CONDEMNATION AWARDS OR OTHERWISE) ARE COLLECTED AND APPLIED
IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THIS AGREEMENT AND THE SECURITY
DOCUMENTS;

 

(E)                                  (I) THE INCURRENCE OF ANY MATERIAL LIEN
(OTHER THAN PERMITTED LIENS) ON, OR CLAIM ASSERTED AGAINST ANY OF THE COLLATERAL
OR (II) THE OCCURRENCE OF ANY OTHER EVENT WHICH COULD MATERIALLY AFFECT THE
VALUE OF THE COLLATERAL; AND

 

(F)                                    ANY THREATENED INDICTMENT BY ANY
GOVERNMENTAL AUTHORITY OF ANY LOAN PARTY, AS TO WHICH ANY LOAN PARTY RECEIVES
KNOWLEDGE OR NOTICE, UNDER ANY CRIMINAL OR CIVIL PROCEEDINGS AGAINST ANY LOAN
PARTY PURSUANT TO WHICH STATUTE OR PROCEEDINGS THE PENALTIES OR REMEDIES SOUGHT
OR AVAILABLE INCLUDE FORFEITURE OF (I) ANY OF THE COLLATERAL HAVING A VALUE IN
EXCESS OF $500,000 OR (II) ANY OTHER PROPERTY OF ANY LOAN PARTY WHICH IS
NECESSARY OR MATERIAL TO THE CONDUCT OF ITS BUSINESS.

 

SECTION 5.03  EXISTENCE; BUSINESSES AND PROPERTIES.  (A)  DO OR CAUSE TO BE DONE
ALL THINGS NECESSARY TO PRESERVE, RENEW AND KEEP IN FULL FORCE AND EFFECT ITS
LEGAL EXISTENCE, EXCEPT AS OTHERWISE EXPRESSLY PERMITTED UNDER SECTION 6.05 OR,
IN THE CASE OF ANY SUBSIDIARY, WHERE THE FAILURE TO PERFORM SUCH OBLIGATIONS,
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN
A MATERIAL ADVERSE EFFECT.

 

(B)                                 DO OR CAUSE TO BE DONE ALL THINGS NECESSARY
TO OBTAIN, PRESERVE, RENEW, EXTEND AND KEEP IN FULL FORCE AND EFFECT THE RIGHTS,
LICENSES, PERMITS, FRANCHISES, AUTHORIZATIONS, PATENTS, COPYRIGHTS, TRADEMARKS
AND TRADE NAMES MATERIAL TO THE CONDUCT OF ITS BUSINESS; MAINTAIN AND OPERATE
SUCH BUSINESS IN SUBSTANTIALLY THE MANNER IN WHICH IT IS PRESENTLY CONDUCTED AND
OPERATED; COMPLY WITH ALL APPLICABLE REQUIREMENTS OF LAW (INCLUDING ANY AND ALL
ZONING, BUILDING, ENVIRONMENTAL LAW, ORDINANCE, CODE OR APPROVAL OR ANY BUILDING
PERMITS OR ANY RESTRICTIONS OF RECORD OR AGREEMENTS AFFECTING THE REAL PROPERTY)
AND DECREES AND ORDERS OF ANY GOVERNMENTAL AUTHORITY, WHETHER NOW IN EFFECT OR
HEREAFTER ENACTED, EXCEPT WHERE THE FAILURE TO COMPLY, INDIVIDUALLY OR IN THE
AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT; PAY AND PERFORM ITS OBLIGATIONS UNDER ALL LEASES AND TRANSACTION
DOCUMENTS; AND AT ALL TIMES MAINTAIN AND PRESERVE ALL PROPERTY MATERIAL TO THE
CONDUCT OF SUCH BUSINESS AND KEEP SUCH PROPERTY IN GOOD REPAIR, WORKING ORDER
AND CONDITION AND FROM TIME TO TIME MAKE, OR CAUSE TO BE MADE, ALL NEEDFUL AND
PROPER REPAIRS, RENEWALS, ADDITIONS, IMPROVEMENTS AND REPLACEMENTS THERETO
NECESSARY IN ORDER THAT THE BUSINESS CARRIED ON IN CONNECTION THEREWITH MAY BE
PROPERLY CONDUCTED AT ALL TIMES; PROVIDED THAT NOTHING IN THIS
SECTION 5.03(B) SHALL PREVENT (I) SALES OF ASSETS, CONSOLIDATIONS OR MERGERS BY
OR INVOLVING ANY COMPANY IN ACCORDANCE WITH SECTION 6.05; (II) THE WITHDRAWAL BY
ANY COMPANY OF ITS QUALIFICATION AS A FOREIGN CORPORATION IN ANY JURISDICTION
WHERE SUCH WITHDRAWAL, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT; OR (III) THE ABANDONMENT BY ANY
COMPANY OF ANY

 

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RIGHTS, FRANCHISES, LICENSES, TRADEMARKS, TRADENAMES, COPYRIGHTS OR PATENTS THAT
SUCH PERSON REASONABLY DETERMINES ARE NOT USEFUL TO ITS BUSINESS.

 

SECTION 5.04  INSURANCE.  (A)  KEEP ITS INSURABLE PROPERTY ADEQUATELY INSURED AT
ALL TIMES BY FINANCIALLY SOUND AND REPUTABLE INSURERS (PROVIDED THAT BORROWERS
SHALL NOT BE DEEMED TO BREACH THIS PROVISION IF, AFTER THEIR INSURER BECOMES
UNSOUND OR IRREPUTABLE, BORROWERS PROMPTLY AND DILIGENTLY OBTAIN ADEQUATE
INSURANCE FROM AN ALTERNATIVE CARRIER); MAINTAIN SUCH OTHER INSURANCE, TO SUCH
EXTENT AND AGAINST SUCH RISKS, INCLUDING FIRE AND OTHER RISKS INSURED AGAINST BY
EXTENDED COVERAGE, AS IS CUSTOMARY WITH COMPANIES IN THE SAME OR SIMILAR
BUSINESSES OPERATING IN THE SAME OR SIMILAR LOCATIONS, INCLUDING PUBLIC
LIABILITY INSURANCE AGAINST CLAIMS FOR PERSONAL INJURY OR DEATH OR PROPERTY
DAMAGE OCCURRING UPON, IN, ABOUT OR IN CONNECTION WITH THE USE OF ANY PROPERTY
OWNED, OCCUPIED OR CONTROLLED BY IT; AND MAINTAIN SUCH OTHER INSURANCE AS MAY BE
REQUIRED BY LAW; AND, WITH RESPECT TO THE COLLATERAL, OTHERWISE MAINTAIN ALL
INSURANCE COVERAGE REQUIRED UNDER EACH APPLICABLE SECURITY DOCUMENT, SUCH
POLICIES TO BE IN SUCH FORM AND AMOUNTS AND HAVING SUCH COVERAGE AS MAY BE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT, IT
BEING AGREED THAT THE LEVELS OF INSURANCE IN PLACE ON THE CLOSING DATE, ABSENT A
MATERIAL CHANGE IN THE PROPERTY OF THE LOAN PARTIES, SHALL BE SATISFACTORY TO
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT SO LONG AS APPROPRIATE STEPS
ARE TAKEN TO ASSURE THAT SUCH INSURANCE COVERAGE IS ALSO OBTAINED FOR ANY FUTURE
SUBSIDIARIES.

 

(B)                                 ALL SUCH INSURANCE SHALL (I) PROVIDE THAT NO
CANCELLATION, MATERIAL REDUCTION IN AMOUNT OR MATERIAL CHANGE IN COVERAGE
THEREOF SHALL BE EFFECTIVE UNTIL AT LEAST 30 DAYS AFTER RECEIPT BY THE
ADMINISTRATIVE AGENT OF WRITTEN NOTICE THEREOF, (II) NAME THE ADMINISTRATIVE
AGENT AS MORTGAGEE (IN THE CASE OF PROPERTY INSURANCE) OR ADDITIONAL INSURED (IN
THE CASE OF LIABILITY INSURANCE) OR LOSS PAYEE (IN THE CASE OF CASUALTY
INSURANCE), AS APPLICABLE, (III) IF REASONABLY REQUESTED BY THE ADMINISTRATIVE
AGENT OR THE COLLATERAL AGENT, INCLUDE A BREACH OF WARRANTY CLAUSE AND (IV) BE
REASONABLY SATISFACTORY IN ALL OTHER RESPECTS TO THE ADMINISTRATIVE AGENT AND
THE COLLATERAL AGENT.

 

(C)                                  NOTIFY THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT IMMEDIATELY WHENEVER ANY SEPARATE INSURANCE CONCURRENT IN FORM
OR CONTRIBUTING IN THE EVENT OF LOSS WITH THAT REQUIRED TO BE MAINTAINED UNDER
THIS SECTION 5.04 IS TAKEN OUT BY ANY COMPANY; AND PROMPTLY DELIVER TO THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT A DUPLICATE ORIGINAL COPY OF SUCH
POLICY OR POLICIES.

 

(D)                                 OBTAIN FLOOD INSURANCE IN SUCH TOTAL AMOUNT
AS THE ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS MAY FROM TIME TO TIME
REQUIRE, IF AT ANY TIME THE AREA IN WHICH ANY IMPROVEMENTS LOCATED ON ANY REAL
PROPERTY COVERED BY A MORTGAGE IS DESIGNATED A “FLOOD HAZARD AREA” IN ANY FLOOD
INSURANCE RATE MAP PUBLISHED BY THE FEDERAL EMERGENCY MANAGEMENT AGENCY (OR ANY
SUCCESSOR AGENCY), AND OTHERWISE COMPLY WITH THE NATIONAL FLOOD INSURANCE
PROGRAM AS SET FORTH IN THE FLOOD DISASTER PROTECTION ACT OF 1975, AS AMENDED
FROM TIME TO TIME.

 

(E)                                  DELIVER TO THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT AND THE LENDERS A REPORT OF A REPUTABLE INSURANCE BROKER WITH
RESPECT TO SUCH INSURANCE AND SUCH SUPPLEMENTAL REPORTS WITH RESPECT THERETO AS
THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT MAY FROM TIME TO TIME
REASONABLY REQUEST.

 

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SECTION 5.05  OBLIGATIONS AND TAXES.  (A)  PAY ITS INDEBTEDNESS AND OTHER
OBLIGATIONS PROMPTLY AND IN ACCORDANCE WITH THEIR TERMS AND PAY AND DISCHARGE
PROMPTLY WHEN DUE ALL TAXES, ASSESSMENTS AND GOVERNMENTAL CHARGES OR LEVIES
IMPOSED UPON IT OR UPON ITS INCOME OR PROFITS OR IN RESPECT OF ITS PROPERTY,
BEFORE THE SAME SHALL BECOME DELINQUENT OR IN DEFAULT, AS WELL AS ALL LAWFUL
CLAIMS FOR LABOR, MATERIALS AND SUPPLIES OR OTHERWISE THAT, IF UNPAID, MIGHT
GIVE RISE TO A LIEN OTHER THAN A PERMITTED LIEN UPON SUCH PROPERTIES OR ANY PART
THEREOF; PROVIDED THAT SUCH PAYMENT AND DISCHARGE SHALL NOT BE REQUIRED WITH
RESPECT TO ANY SUCH TAX, ASSESSMENT, CHARGE, LEVY OR CLAIM SO LONG AS THE
VALIDITY OR AMOUNT THEREOF SHALL BE CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS AND THE APPLICABLE COMPANY SHALL HAVE SET ASIDE ON ITS BOOKS
ADEQUATE RESERVES WITH RESPECT THERETO IN ACCORDANCE WITH GAAP AND SUCH CONTEST
OPERATES TO SUSPEND COLLECTION OF THE CONTESTED OBLIGATION, TAX, ASSESSMENT OR
CHARGE AND ENFORCEMENT OF A LIEN OTHER THAN A PERMITTED LIEN AND, IN THE CASE OF
COLLATERAL, THE APPLICABLE COMPANY SHALL HAVE OTHERWISE COMPLIED WITH THE
CONTESTED COLLATERAL LIEN CONDITIONS.

 

(B)                                 TIMELY AND CORRECTLY FILE ALL MATERIAL TAX
RETURNS REQUIRED TO BE FILED BY IT.

 

SECTION 5.06  EMPLOYEE BENEFITS.  (A)  WITH RESPECT TO EACH PLAN, COMPLY IN ALL
MATERIAL RESPECTS WITH THE APPLICABLE PROVISIONS OF ERISA AND THE CODE AND
(B) FURNISH TO THE ADMINISTRATIVE AGENT (X) AS SOON AS POSSIBLE AFTER, AND IN
ANY EVENT WITHIN 10 DAYS AFTER ANY RESPONSIBLE OFFICER OF THE COMPANIES OR THEIR
ERISA AFFILIATES OR ANY ERISA AFFILIATE KNOWS OR HAS REASON TO KNOW THAT, ANY
ERISA EVENT HAS OCCURRED THAT, ALONE OR TOGETHER WITH ANY OTHER ERISA EVENT
COULD REASONABLY BE EXPECTED TO RESULT IN LIABILITY OF THE COMPANIES OR THEIR
ERISA AFFILIATES IN AN AGGREGATE AMOUNT EXCEEDING $500,000 OR THE IMPOSITION OF
A LIEN, A STATEMENT OF A FINANCIAL OFFICER OF HOLDINGS SETTING FORTH DETAILS AS
TO SUCH ERISA EVENT AND THE ACTION, IF ANY, THAT THE COMPANIES PROPOSE TO TAKE
WITH RESPECT THERETO, AND (Y) UPON REQUEST BY THE ADMINISTRATIVE AGENT, COPIES
OF:  (I) EACH SCHEDULE B (ACTUARIAL INFORMATION) TO THE ANNUAL REPORT (FORM 5500
SERIES) FILED BY ANY COMPANY OR ANY ERISA AFFILIATE WITH THE INTERNAL REVENUE
SERVICE WITH RESPECT TO EACH PLAN; (II) THE MOST RECENT ACTUARIAL VALUATION
REPORT FOR EACH PLAN; (III) ALL NOTICES RECEIVED BY ANY COMPANY OR ANY ERISA
AFFILIATE FROM A MULTIEMPLOYER PLAN SPONSOR OR ANY GOVERNMENTAL AGENCY
CONCERNING AN ERISA EVENT; AND (IV) SUCH OTHER DOCUMENTS OR GOVERNMENTAL REPORTS
OR FILINGS RELATING TO ANY PLAN (OR EMPLOYEE BENEFIT PLAN SPONSORED OR
CONTRIBUTED TO BY ANY COMPANY) AS THE ADMINISTRATIVE AGENT SHALL REASONABLY
REQUEST.

 

SECTION 5.07  MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS.  KEEP
PROPER BOOKS OF RECORD AND ACCOUNT IN WHICH FULL, TRUE AND CORRECT ENTRIES IN
CONFORMITY WITH GAAP AND ALL REQUIREMENTS OF LAW ARE MADE OF ALL DEALINGS AND
TRANSACTIONS IN RELATION TO ITS BUSINESS AND ACTIVITIES.  KEEP PROPER RECORDS OF
INTERCOMPANY ACCOUNTS WITH FULL, TRUE AND CORRECT ENTRIES REFLECTING ALL
PAYMENTS RECEIVED AND PAID (INCLUDING, WITHOUT LIMITATION, FUNDS RECEIVED BY
BORROWERS FROM SWEPT DEPOSIT ACCOUNTS OF THE OTHER COMPANIES).  UPON REASONABLE
PRIOR NOTICE, EACH LOAN PARTY WILL PERMIT ANY REPRESENTATIVES DESIGNATED BY THE
ADMINISTRATIVE AGENT, COLLATERAL AGENT OR ANY LENDER TO VISIT AND INSPECT THE
FINANCIAL RECORDS AND THE PROPERTY OF SUCH LOAN PARTY AT REASONABLE TIMES AND AS
OFTEN AS REASONABLY REQUESTED AND TO MAKE EXTRACTS FROM AND COPIES OF SUCH
FINANCIAL RECORDS, AND PERMIT ANY REPRESENTATIVES DESIGNATED BY THE
ADMINISTRATIVE AGENT, COLLATERAL AGENT OR ANY LENDER TO DISCUSS THE AFFAIRS,
FINANCES AND CONDITION OF ANY LOAN PARTY WITH THE OFFICERS THEREOF AND
INDEPENDENT ACCOUNTANTS THEREFOR.

 

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SECTION 5.08  USE OF PROCEEDS.  USE THE PROCEEDS OF THE LOANS AND REQUEST THE
ISSUANCE OF LETTERS OF CREDIT ONLY FOR THE PURPOSES SET FORTH IN SECTION 3.11.

 

SECTION 5.09  COMPLIANCE WITH ENVIRONMENTAL LAWS; ENVIRONMENTAL
REPORTS.  (A)  COMPLY, AND CAUSE ALL LESSEES AND OTHER PERSONS OCCUPYING REAL
PROPERTY OWNED, OPERATED OR LEASED BY ANY COMPANY TO COMPLY, IN ALL MATERIAL
RESPECTS WITH ALL ENVIRONMENTAL LAWS AND ENVIRONMENTAL PERMITS APPLICABLE TO ITS
OPERATIONS AND REAL PROPERTY; OBTAIN AND RENEW ALL MATERIAL ENVIRONMENTAL
PERMITS APPLICABLE TO ITS OPERATIONS AND REAL PROPERTY; AND CONDUCT ANY RESPONSE
REQUIRED BY A GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH ENVIRONMENTAL LAWS;
PROVIDED THAT NO COMPANY SHALL BE REQUIRED TO UNDERTAKE ANY RESPONSE TO THE
EXTENT THAT ITS OBLIGATION TO DO SO IS BEING CONTESTED IN GOOD FAITH AND BY
PROPER PROCEEDINGS AND APPROPRIATE RESERVES ARE BEING MAINTAINED WITH RESPECT TO
SUCH CIRCUMSTANCES IN ACCORDANCE WITH GAAP.

 

(B)                                 IF A DEFAULT CAUSED BY REASON OF A BREACH OF
SECTION 3.17 OR 5.09(A) SHALL HAVE OCCURRED AND BE CONTINUING FOR MORE THAN 20
DAYS WITHOUT THE COMPANIES COMMENCING ACTIVITIES REASONABLY LIKELY TO CURE SUCH
DEFAULT, AT THE WRITTEN REQUEST OF THE REQUIRED LENDERS THROUGH THE
ADMINISTRATIVE AGENT, PROVIDE TO THE LENDERS WITHIN 45 DAYS AFTER SUCH REQUEST,
AT BORROWERS’ EXPENSE, AN ENVIRONMENTAL ASSESSMENT REPORT REGARDING THE MATTERS
WHICH ARE THE SUBJECT OF SUCH DEFAULT, INCLUDING WHERE APPROPRIATE, ANY SOIL
AND/OR GROUNDWATER SAMPLING, PREPARED BY AN ENVIRONMENTAL CONSULTING FIRM AND IN
THE FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND
INDICATING THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AND THE ESTIMATED COST
OF ANY COMPLIANCE OR RESPONSE TO ADDRESS THEM.

 

SECTION 5.10  RESERVED.

 

SECTION 5.11  ADDITIONAL COLLATERAL; ADDITIONAL GUARANTORS.  (A)  SUBJECT TO
THIS SECTION 5.11, WITH RESPECT TO ANY PROPERTY ACQUIRED AFTER THE CLOSING DATE
BY BORROWERS OR ANY OTHER LOAN PARTY THAT IS INTENDED TO BE SUBJECT TO THE LIEN
CREATED BY ANY OF THE SECURITY DOCUMENTS BUT IS NOT SO SUBJECT (BUT, IN ANY
EVENT, EXCLUDING ANY PROPERTY DESCRIBED IN PARAGRAPH (B) OF THIS SUBSECTION)
PROMPTLY (AND IN ANY EVENT WITHIN 30 DAYS AFTER THE ACQUISITION THEREOF PROVIDED
THE ADMINISTRATIVE AGENT HAS PROVIDED ALL JOINDER AGREEMENTS TO THE APPLICABLE
SECURITY DOCUMENTS NECESSARY FOR THE LOAN PARTIES TO COMPLY HEREWITH): 
(I) EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT SUCH AMENDMENTS OR
SUPPLEMENTS TO THE RELEVANT SECURITY DOCUMENTS OR SUCH OTHER DOCUMENTS AS THE
ADMINISTRATIVE AGENT SHALL DEEM NECESSARY OR ADVISABLE TO GRANT TO THE
ADMINISTRATIVE AGENT, FOR ITS BENEFIT AND FOR THE BENEFIT OF THE OTHER SECURED
PARTIES, A LIEN ON SUCH PROPERTY SUBJECT TO NO LIENS OTHER THAN PERMITTED LIENS,
AND (II) TAKE ALL ACTIONS NECESSARY TO CAUSE SUCH LIEN TO BE DULY PERFECTED TO
THE EXTENT REQUIRED BY SUCH SECURITY DOCUMENT IN ACCORDANCE WITH ALL APPLICABLE
REQUIREMENTS OF LAW, INCLUDING, WITHOUT LIMITATION, THE FILING OF FINANCING
STATEMENTS IN SUCH JURISDICTIONS AS MAY BE REASONABLY REQUESTED BY THE
ADMINISTRATIVE AGENT.  BORROWERS SHALL OTHERWISE TAKE SUCH ACTIONS AND EXECUTE
AND/OR DELIVER TO THE ADMINISTRATIVE AGENT SUCH DOCUMENTS AS THE ADMINISTRATIVE
AGENT SHALL REQUIRE TO CONFIRM THE VALIDITY, PERFECTION AND PRIORITY OF THE LIEN
OF THE SECURITY DOCUMENTS AGAINST SUCH AFTER-ACQUIRED PROPERTIES OR ASSETS.

 

(B)                                 WITH RESPECT TO ANY PERSON THAT IS OR
BECOMES A WHOLLY OWNED SUBSIDIARY (OTHER THAN ANY FOREIGN SUBSIDIARY THAT IS NOT
A DIRECT SUBSIDIARY OF A LOAN PARTY) PROMPTLY (AND IN ANY EVENT WITHIN 30 DAYS
AFTER SUCH PERSON BECOMES A SUBSIDIARY) (I) DELIVER TO THE ADMINISTRATIVE

 

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AGENT THE CERTIFICATES, IF ANY, REPRESENTING THE EQUITY INTERESTS OF SUCH
SUBSIDIARY (PROVIDED THAT WITH RESPECT TO ANY FIRST-TIER FOREIGN SUBSIDIARY OF A
BORROWER OR A SUBSIDIARY ORGANIZED IN A STATE OF THE UNITED STATES, IN NO EVENT
SHALL MORE THAN 66% OF THE EQUITY INTERESTS OF ANY FOREIGN SUBSIDIARY BE SUBJECT
TO ANY LIEN OR PLEDGED UNDER ANY SECURITY DOCUMENT IF SUCH PLEDGE WOULD HAVE A
MATERIAL ADVERSE TAX IMPACT ON BORROWERS (DETERMINED AT THE REASONABLE
DISCRETION OF THE ADMINISTRATIVE AGENT)), TOGETHER WITH UNDATED STOCK POWERS OR
OTHER APPROPRIATE INSTRUMENTS OF TRANSFER EXECUTED AND DELIVERED IN BLANK BY A
DULY AUTHORIZED OFFICER OF SUCH SUBSIDIARY’S PARENT, AS THE CASE MAY BE, AND ALL
INTERCOMPANY NOTES OWING FROM SUCH SUBSIDIARY TO ANY LOAN PARTY TOGETHER WITH
INSTRUMENTS OF TRANSFER EXECUTED AND DELIVERED IN BLANK BY A DULY AUTHORIZED
OFFICER OF SUCH SUBSIDIARY, AND (II) CAUSE SUCH NEW SUBSIDIARY (OTHER THAN ANY
FOREIGN SUBSIDIARY IF SUCH PLEDGE WOULD HAVE A MATERIAL ADVERSE TAX IMPACT ON
BORROWERS (DETERMINED AT THE REASONABLE DISCRETION OF THE ADMINISTRATIVE AGENT)
(A) TO EXECUTE A JOINDER AGREEMENT OR SUCH COMPARABLE DOCUMENTATION AND A
JOINDER AGREEMENT TO THE SECURITY AGREEMENT IN THE FORM ANNEXED THERETO WHICH IS
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT, AND
(B) TO TAKE ALL ACTIONS NECESSARY OR ADVISABLE IN THE OPINION OF THE
ADMINISTRATIVE AGENT TO CAUSE THE LIEN CREATED BY THE SECURITY AGREEMENT TO BE
DULY PERFECTED TO THE EXTENT REQUIRED BY SUCH AGREEMENT IN ACCORDANCE WITH ALL
APPLICABLE REQUIREMENTS OF LAW, INCLUDING, WITHOUT LIMITATION, THE FILING OF
FINANCING STATEMENTS IN SUCH JURISDICTIONS AS MAY BE REASONABLY REQUESTED BY THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT.

 

(C)                                  EACH LOAN PARTY WILL PROMPTLY GRANT TO THE
ADMINISTRATIVE AGENT, WITHIN 60 DAYS OF THE ACQUISITION THEREOF, A SECURITY
INTEREST IN AND MORTGAGE LIEN ON EACH OWNED OR LEASED REAL PROPERTY OF SUCH LOAN
PARTY AS IS ACQUIRED BY SUCH LOAN PARTY AFTER THE CLOSING DATE AND THAT,
TOGETHER WITH ANY IMPROVEMENTS THEREON, INDIVIDUALLY HAS A FAIR MARKET VALUE OF
AT LEAST $1.0 MILLION, AS ADDITIONAL SECURITY FOR THE OBLIGATIONS (UNLESS THE
SUBJECT PROPERTY IS ALREADY MORTGAGED TO A THIRD PARTY TO THE EXTENT PERMITTED
BY SECTION 6.02).  SUCH MORTGAGES SHALL BE GRANTED PURSUANT TO DOCUMENTATION
REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE ADMINISTRATIVE AGENT AND
SHALL CONSTITUTE VALID AND ENFORCEABLE PERFECTED LIENS SUBJECT ONLY TO PERMITTED
LIENS.  THE MORTGAGES OR INSTRUMENTS RELATED THERETO SHALL BE DULY RECORDED OR
FILED IN SUCH MANNER AND IN SUCH PLACES AS ARE REQUIRED BY LAW TO ESTABLISH,
PERFECT, PRESERVE AND PROTECT THE LIENS IN FAVOR OF THE ADMINISTRATIVE AGENT
REQUIRED TO BE GRANTED PURSUANT TO THE MORTGAGES AND ALL TAXES, FEES AND OTHER
CHARGES PAYABLE IN CONNECTION THEREWITH SHALL BE PAID IN FULL.  SUCH LOAN PARTY
SHALL OTHERWISE TAKE SUCH ACTIONS AND EXECUTE AND/OR DELIVER TO THE
ADMINISTRATIVE AGENT SUCH DOCUMENTS AS THE ADMINISTRATIVE AGENT SHALL REQUIRE,
TO CONFIRM THE VALIDITY, PERFECTION AND PRIORITY OF THE LIEN OF ANY EXISTING
MORTGAGE OR NEW MORTGAGE AGAINST SUCH AFTER-ACQUIRED REAL PROPERTY (INCLUDING,
WITHOUT LIMITATION, A TITLE POLICY, A SURVEY AND LOCAL COUNSEL OPINION (IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT) IN RESPECT OF
SUCH MORTGAGE).

 

SECTION 5.12  SECURITY INTERESTS; FURTHER ASSURANCES.  PROMPTLY, UPON THE
REASONABLE REQUEST OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR ANY
LENDER, AT BORROWERS’ EXPENSE, EXECUTE, ACKNOWLEDGE AND DELIVER, OR CAUSE THE
EXECUTION, ACKNOWLEDGMENT AND DELIVERY OF, AND THEREAFTER REGISTER, FILE OR
RECORD, OR CAUSE TO BE REGISTERED, FILED OR RECORDED, IN AN APPROPRIATE
GOVERNMENTAL OFFICE, ANY DOCUMENT OR INSTRUMENT SUPPLEMENTAL TO OR CONFIRMATORY
OF THE SECURITY DOCUMENTS OR OTHERWISE DEEMED BY THE ADMINISTRATIVE AGENT OR THE
COLLATERAL AGENT REASONABLY NECESSARY OR DESIRABLE FOR THE CONTINUED VALIDITY,
PERFECTION AND PRIORITY OF THE LIENS ON THE COLLATERAL COVERED THEREBY SUPERIOR
TO AND PRIOR TO THE RIGHTS OF ALL

 

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THIRD PERSONS OTHER THAN THE HOLDERS OF PERMITTED LIENS AND SUBJECT TO NO OTHER
LIENS EXCEPT AS PERMITTED BY THE APPLICABLE SECURITY DOCUMENT, OR OBTAIN ANY
CONSENTS, INCLUDING, WITHOUT LIMITATION, LANDLORD OR SIMILAR LIEN WAIVERS AND
CONSENTS, AS MAY BE NECESSARY OR APPROPRIATE IN CONNECTION THEREWITH.  DELIVER
OR CAUSE TO BE DELIVERED TO THE ADMINISTRATIVE AGENT FROM TIME TO TIME SUCH
OTHER DOCUMENTATION, CONSENTS, AUTHORIZATIONS, APPROVALS AND ORDERS IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT AS THE
ADMINISTRATIVE AGENT SHALL REASONABLY DEEM NECESSARY TO PERFECT OR MAINTAIN THE
LIENS ON THE COLLATERAL PURSUANT TO THE SECURITY DOCUMENTS.  UPON THE EXERCISE
BY THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR THE LENDERS OF ANY POWER,
RIGHT, PRIVILEGE OR REMEDY PURSUANT TO ANY LOAN DOCUMENT WHICH REQUIRES ANY
CONSENT, APPROVAL, REGISTRATION, QUALIFICATION OR AUTHORIZATION OF ANY
GOVERNMENTAL AUTHORITY EXECUTE AND DELIVER ALL APPLICATIONS, CERTIFICATIONS,
INSTRUMENTS AND OTHER DOCUMENTS AND PAPERS THAT THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT OR THE LENDERS MAY BE SO REQUIRED TO OBTAIN.  IF THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR THE REQUIRED LENDERS DETERMINE
THAT THEY ARE REQUIRED BY LAW OR REGULATION TO HAVE APPRAISALS PREPARED IN
RESPECT OF THE REAL PROPERTY OF ANY LOAN PARTY CONSTITUTING COLLATERAL,
BORROWERS SHALL PROVIDE TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
APPRAISALS THAT SATISFY THE APPLICABLE REQUIREMENTS OF THE REAL ESTATE APPRAISAL
REFORM AMENDMENTS OF FIRREA AND ARE OTHERWISE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT.

 

SECTION 5.13  INFORMATION REGARDING COLLATERAL.  (A)  FURNISH TO THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT 30 DAYS PRIOR WRITTEN NOTICE (IN
THE FORM OF AN OFFICER’S CERTIFICATE), CLEARLY DESCRIBING ANY OF THE FOLLOWING
CHANGES (I) IN ANY LOAN PARTY’S CORPORATE NAME OR IN ANY TRADE NAME USED TO
IDENTIFY IT IN THE CONDUCT OF ITS BUSINESS OR IN THE OWNERSHIP OF ITS
PROPERTIES, (II) IN THE LOCATION OF ANY LOAN PARTY’S CHIEF EXECUTIVE OFFICE, ITS
PRINCIPAL PLACE OF BUSINESS, ANY OFFICE IN WHICH IT MAINTAINS BOOKS OR RECORDS
RELATING TO COLLATERAL OWNED BY IT OR ANY OFFICE OR FACILITY AT WHICH COLLATERAL
OWNED BY IT IS LOCATED (INCLUDING THE ESTABLISHMENT OF ANY SUCH NEW OFFICE OR
FACILITY), (III) IN ANY LOAN PARTY’S IDENTITY OR CORPORATE STRUCTURE, (IV) IN
ANY LOAN PARTY’S FEDERAL TAXPAYER IDENTIFICATION NUMBER OR (V) IN ANY LOAN
PARTY’S JURISDICTION OF ORGANIZATION.  BORROWERS AGREE NOT TO EFFECT OR PERMIT
ANY CHANGE REFERRED TO IN THE PRECEDING SENTENCE UNLESS ALL FILINGS HAVE BEEN
MADE UNDER THE UCC OR OTHERWISE THAT ARE REQUIRED IN ORDER FOR THE
ADMINISTRATIVE AGENT TO CONTINUE AT ALL TIMES FOLLOWING SUCH CHANGE TO HAVE A
VALID, LEGAL AND PERFECTED SECURITY INTEREST IN ALL THE COLLATERAL.  BORROWERS
AGREE TO PROVIDE TO THE ADMINISTRATIVE AGENT SUCH OTHER INFORMATION IN
CONNECTION WITH SUCH CHANGES AS THE ADMINISTRATIVE AGENT AND THE COLLATERAL
AGENT MAY REASONABLY REQUEST.  BORROWERS ALSO AGREE PROMPTLY TO NOTIFY THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT IF ANY MATERIAL PORTION OF THE
COLLATERAL IS SUBJECT TO A CASUALTY EVENT.

 

(B)                                 EACH YEAR, AT THE TIME OF DELIVERY OF ANNUAL
FINANCIAL STATEMENTS WITH RESPECT TO THE PRECEDING FISCAL YEAR PURSUANT TO
PARAGRAPH (A) OF SECTION 5.01, DELIVER TO THE ADMINISTRATIVE AGENT (I) A
PERFECTION CERTIFICATE SUPPLEMENT SETTING FORTH ANY CHANGES TO THE INFORMATION
REQUIRED PURSUANT TO THE PERFECTION CERTIFICATE OR CONFIRMING THAT THERE HAS
BEEN NO CHANGE IN SUCH INFORMATION SINCE THE DATE OF THE PERFECTION CERTIFICATE
DELIVERED ON THE CLOSING DATE OR THE DATE OF THE MOST RECENTLY DELIVERED
PERFECTION CERTIFICATE SUPPLEMENT PURSUANT TO THIS SECTION 5.13(B) AND (II) A
CERTIFICATE OF A FINANCIAL OFFICER AND THE CHIEF LEGAL OFFICER OF THE LOAN
PARTIES CERTIFYING THAT ALL UCC FINANCING STATEMENTS (INCLUDING FIXTURE FILINGS,
AS APPLICABLE) OR OTHER APPROPRIATE FILINGS, RECORDINGS OR REGISTRATIONS,
INCLUDING ALL REFILINGS, RERECORDINGS AND REREGISTRATIONS, CONTAINING A
DESCRIPTION OF THE COLLATERAL HAVE BEEN FILED OF RECORD IN EACH

 

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GOVERNMENTAL, MUNICIPAL OR OTHER APPROPRIATE OFFICE IN EACH JURISDICTION
NECESSARY TO PROTECT AND PERFECT THE SECURITY INTERESTS AND LIENS UNDER THE
SECURITY DOCUMENTS FOR A PERIOD OF NOT LESS THAN 18 MONTHS AFTER THE DATE OF
SUCH CERTIFICATE (EXCEPT AS NOTED THEREIN WITH RESPECT TO ANY CONTINUATION
STATEMENTS TO BE FILED WITHIN SUCH PERIOD).

 

SECTION 5.14  BORROWING BASE-RELATED REPORTS.  BORROWERS SHALL DELIVER OR CAUSE
TO BE DELIVERED (AT THE EXPENSE OF THE BORROWERS) TO THE COLLATERAL AGENT AND
THE ADMINISTRATIVE AGENT THE FOLLOWING:

 

(A)                                  IN NO EVENT LESS FREQUENTLY THAN 20 DAYS
AFTER THE END OF EACH MONTH FOR THE MONTH MOST RECENTLY ENDED, A BORROWING BASE
CERTIFICATE FROM THE BORROWERS ACCOMPANIED BY SUCH SUPPORTING DETAIL AND
DOCUMENTATION AS SHALL BE REQUESTED BY THE ADMINISTRATIVE AGENT OR THE
COLLATERAL AGENT IN THEIR REASONABLE CREDIT JUDGMENT; PROVIDED, HOWEVER, THAT,
DURING THE MONTHS OF DECEMBER AND JANUARY, IF AT ANY TIME THE OUTSTANDING AMOUNT
OF REVOLVING LOANS AND SWING LINE LOANS EXCEEDS $35.0 MILLION, BORROWERS SHALL
DELIVER A BORROWING BASE CERTIFICATE ON THE 15TH DAY AND ON THE LAST DAY OF SUCH
MONTHS AS OF THE DATE THAT IS TWO WEEKS PRIOR TO SUCH DATE OF DELIVERY;

 

(B)                                 UPON REQUEST BY THE ADMINISTRATIVE AGENT AND
THE COLLATERAL AGENT, AND IN NO EVENT LESS FREQUENTLY THAN 30 DAYS AFTER THE END
OF (I) EACH MONTH, A MONTHLY TRIAL BALANCE SHOWING ACCOUNTS OUTSTANDING AGED
FROM STATEMENT DATE AS FOLLOWS: 1 TO 30 DAYS, 31 TO 60 DAYS, 61 TO 90 DAYS AND
91 DAYS OR MORE, ACCOMPANIED BY A COMPARISON TO THE PRIOR MONTH’S TRIAL BALANCE
AND SUCH SUPPORTING DETAIL AND DOCUMENTATION AS SHALL BE REQUESTED BY THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT IN THEIR REASONABLE CREDIT JUDGMENT
AND (II) EACH MONTH, A SUMMARY OF INVENTORY BY LOCATION AND TYPE ACCOMPANIED BY
SUCH SUPPORTING DETAIL AND DOCUMENTATION AS SHALL BE REQUESTED BY THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT IN THEIR REASONABLE CREDIT JUDGMENT
(IN EACH CASE, TOGETHER WITH A COPY OF ALL OR ANY PART OF SUCH DELIVERY
REQUESTED BY ANY LENDER IN WRITING AFTER THE CLOSING DATE);

 

(C)                                  ON THE DATE ANY BORROWING BASE CERTIFICATE
IS DELIVERED PURSUANT TO SECTION 5.14(A) OR AT SUCH MORE FREQUENT INTERVALS AS
THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT MAY REQUEST FROM TIME TO TIME
(TOGETHER WITH A COPY OF ALL OR ANY PART OF SUCH DELIVERY REQUESTED BY ANY
LENDER IN WRITING AFTER THE CLOSING DATE), A COLLATERAL REPORT WITH RESPECT TO
THE BORROWERS, ACCOMPANIED BY SUCH SUPPORTING DETAIL AND DOCUMENTATION AS SHALL
BE REQUESTED BY THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT IN THEIR
REASONABLE CREDIT JUDGMENT;

 

(D)                                 AT THE TIME OF DELIVERY OF EACH OF THE
FINANCIAL STATEMENTS DELIVERED PURSUANT TO SECTIONS 5.01(A) AND (B), A
RECONCILIATION OF THE ACCOUNTS TRIAL BALANCE AND QUARTER-END INVENTORY REPORTS
OF BORROWERS TO THE GENERAL LEDGER OF SUCH BORROWER, IN EACH CASE, ACCOMPANIED
BY SUCH SUPPORTING DETAIL AND DOCUMENTATION AS SHALL BE REQUESTED BY THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT IN THEIR REASONABLE CREDIT
JUDGMENT;

 

(E)                                  AT THE TIME OF DELIVERY OF EACH OF THE
FINANCIAL STATEMENTS DELIVERED PURSUANT TO SECTIONS 5.01(A) AND (B), A LIST OF
ANY APPLICATIONS FOR THE REGISTRATION OF ANY

 

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PATENT, TRADEMARK OR COPYRIGHT WITH THE UNITED STATES PATENT AND TRADEMARK
OFFICE, THE UNITED STATES COPYRIGHT OFFICE OR ANY SIMILAR OFFICE OR AGENCY WHICH
ANY LOAN PARTY HAS FILED IN THE PRIOR FISCAL QUARTER; AND

 

(F)                                    SUCH OTHER REPORTS, STATEMENTS AND
RECONCILIATIONS WITH RESPECT TO THE BORROWING BASE OR COLLATERAL OF ANY OR ALL
LOAN PARTIES AS THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT SHALL FROM TIME
TO TIME REQUEST IN THEIR REASONABLE CREDIT JUDGMENT.

 

The delivery of each certificate and report or any other information delivered
pursuant to this Section 5.14 shall constitute a representation and warranty by
each Borrower that the statements and information contained therein are true and
correct in all material respects on and as of such date.

 

SECTION 5.15  BORROWING BASE VERIFICATION; INVENTORY APPRAISALS.  ANY OF THE
ADMINISTRATIVE AGENT’S AND COLLATERAL AGENT’S OFFICERS, DESIGNATED EMPLOYEES OR
AGENTS SHALL HAVE THE RIGHT, AT ANY REASONABLE TIME OR TIMES ON PRIOR NOTICE TO
THE BORROWER, IN THE NAME OF THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT,
AS APPLICABLE, TO VERIFY THE VALIDITY, AMOUNT OR ANY OTHER MATTER RELATING TO
ACCOUNTS OR INVENTORY BY MAIL, TELEPHONE, ELECTRONIC COMMUNICATION, PERSONAL
INSPECTION OR OTHERWISE AND TO CONDUCT FIELD AUDITS OF THE FINANCIAL AFFAIRS AND
COLLATERAL OF THE LOAN PARTIES.  BORROWERS SHALL COOPERATE FULLY WITH THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT IN AN EFFORT TO FACILITATE AND
PROMPTLY CONCLUDE ANY SUCH VERIFICATION PROCESS.  THE LOAN PARTIES SHALL
COOPERATE FULLY WITH THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT AND THEIR
AGENTS DURING ALL COLLATERAL FIELD AUDITS, WHICH SHALL BE AT BORROWERS’ EXPENSE
AND SHALL BE CONDUCTED (I) DURING THE FIRST TWELVE MONTHS FOLLOWING THE CLOSING
DATE, THREE TIMES AND (II) DURING EACH SUCCESSIVE TWELVE MONTH PERIOD FOLLOWING
THE CLOSING DATE, TWO TIMES, AND INVENTORY APPRAISALS, WHICH SHALL BE AT
BORROWERS’ EXPENSE AND SHALL BE CONDUCTED TWO TIMES DURING ANY YEAR, EXCEPT THAT
FOR THE YEAR 2007 AND EACH YEAR THEREAFTER IF THERE WERE NO REVOLVING LOANS OR
SWINGLINE LOANS OUTSTANDING ON DECEMBER 31 OF THE PRIOR YEAR THEN ONLY ONE
INVENTORY APPRAISAL SHALL BE CONDUCTED DURING SUCH YEAR, OR IN THE CASE OF BOTH
FIELD AUDITS AND INVENTORY APPRAISALS, FOLLOWING THE OCCURRENCE AND DURING THE
CONTINUATION OF AN EVENT OF DEFAULT, MORE FREQUENTLY AT THE ADMINISTRATIVE
AGENT’S OR THE COLLATERAL AGENT’S REASONABLE REQUEST.

 

ARTICLE VI.
 
NEGATIVE COVENANTS

 

Each Loan Party covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been canceled or have expired or been fully cash
collateralized and all amounts drawn thereunder have been reimbursed in full,
unless the Required Lenders shall otherwise consent in writing, no Loan Party
will, nor will they cause or permit any Subsidiaries to:

 

SECTION 6.01  INDEBTEDNESS.  INCUR, CREATE, ASSUME OR PERMIT TO EXIST, DIRECTLY
OR INDIRECTLY, ANY INDEBTEDNESS, EXCEPT:

 

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(A)                                  INDEBTEDNESS INCURRED PURSUANT TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS;

 

(B)                                 (I) INDEBTEDNESS ACTUALLY OUTSTANDING ON THE
CLOSING DATE AND LISTED ON SCHEDULE 6.01(B) OR (II) REFINANCINGS OR RENEWALS
THEREOF; PROVIDED THAT (A) ANY SUCH REFINANCING INDEBTEDNESS IS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT GREATER THAN THE AGGREGATE PRINCIPAL AMOUNT OF THE
INDEBTEDNESS BEING RENEWED OR REFINANCED, PLUS THE AMOUNT OF ANY PREMIUMS
REQUIRED TO BE PAID THEREON AND FEES AND EXPENSES ASSOCIATED THEREWITH, (B) SUCH
REFINANCING INDEBTEDNESS HAS A LATER OR EQUAL FINAL MATURITY AND LONGER OR EQUAL
WEIGHTED AVERAGE LIFE THAN THE INDEBTEDNESS BEING RENEWED OR REFINANCED AND
(C) THE COVENANTS, EVENTS OF DEFAULT, SUBORDINATION AND OTHER PROVISIONS THEREOF
(INCLUDING ANY GUARANTEES THEREOF) SHALL BE, IN THE AGGREGATE, NO LESS FAVORABLE
TO THE LENDERS THAN THOSE CONTAINED IN THE INDEBTEDNESS BEING RENEWED OR
REFINANCED;

 

(C)                                  INDEBTEDNESS OF BORROWERS UNDER HEDGING
AGREEMENTS;

 

(D)                                 TO THE EXTENT RECORDED IN THE COMPANIES’
INTERCOMPANY ACCOUNT LEDGERS, INTERCOMPANY INDEBTEDNESS OF THE COMPANIES
OUTSTANDING TO THE EXTENT PERMITTED BY SECTION 6.04(E);

 

(E)                                  INDEBTEDNESS OF THE BORROWERS AND THEIR
SUBSIDIARIES ORGANIZED IN A STATE WITHIN THE UNITED STATES IN RESPECT OF
PURCHASE MONEY OBLIGATIONS AND CAPITAL LEASE OBLIGATIONS AND REFINANCINGS OR
RENEWALS THEREOF (OTHER THAN REFINANCINGS FUNDED WITH INTERCOMPANY ADVANCES), IN
AN AGGREGATE AMOUNT NOT TO EXCEED $10.0 MILLION AT ANY TIME OUTSTANDING;

 

(F)                                    INDEBTEDNESS IN RESPECT OF WORKERS’
COMPENSATION CLAIMS, SELF-INSURANCE OBLIGATIONS, PERFORMANCE BONDS, SURETY
APPEAL OR SIMILAR BONDS AND COMPLETION GUARANTEES PROVIDED BY A COMPANY IN THE
ORDINARY COURSE OF ITS BUSINESS;

 

(G)                                 CONTINGENT OBLIGATIONS OF ANY LOAN PARTY IN
RESPECT OF INDEBTEDNESS OTHERWISE PERMITTED UNDER SECTION 6.01;

 

(H)                                 INDEBTEDNESS IN RESPECT OF TAXES,
ASSESSMENTS OR GOVERNMENTAL CHARGES TO THE EXTENT THAT PAYMENT THEREOF SHALL NOT
AT THE TIME BE REQUIRED TO BE MADE IN ACCORDANCE WITH SECTION 5.05;

 

(I)                                     INDEBTEDNESS IN RESPECT OF NETTING
SERVICES AND OVERDRAFT PROTECTIONS IN CONNECTION WITH DEPOSIT ACCOUNTS, IN EACH
CASE IN THE ORDINARY COURSE OF BUSINESS;

 

(J)                                     THE TERM LOAN INDEBTEDNESS;

 

(K)                                  UNSECURED GUARANTIES BY HOLDINGS, BORROWERS
OR ANY OF THEIR SUBSIDIARIES IN RESPECT OF THE OBLIGATIONS UNDER THAT CERTAIN
CONSIGNMENT AGREEMENT, DATED AS OF AUGUST 5, 1998 (AS AMENDED), AMONG LENOX,
SOVEREIGN BANK AND SOVEREIGN PRECIOUS METALS, LLC, SUCCESSOR IN INTEREST TO
BANKBOSTON, N.A. OR ANY AGREEMENT THAT REPLACES SUCH CONSIGNMENT AGREEMENT, IN
AN AMOUNT NOT TO EXCEED $15.0 MILLION IN THE AGGREGATE AT ANY TIME OUTSTANDING;
AND

 

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(L)                                     OTHER UNSECURED INDEBTEDNESS (NOT OF THE
TYPE COVERED IN CLAUSES (A) – (K) ABOVE) OF ANY COMPANY NOT TO EXCEED $25.0
MILLION IN THE AGGREGATE PRINCIPAL AMOUNT AT ANY TIME OUTSTANDING.

 

SECTION 6.02  LIENS.  CREATE, INCUR, ASSUME OR PERMIT TO EXIST, DIRECTLY OR
INDIRECTLY, ANY LIEN ON ANY PROPERTY NOW OWNED OR HEREAFTER ACQUIRED BY IT OR ON
ANY INCOME OR REVENUES OR RIGHTS IN RESPECT OF ANY THEREOF, EXCEPT (THE
“PERMITTED LIENS”):

 

(A)                                  INCHOATE LIENS FOR TAXES, ASSESSMENTS OR
GOVERNMENTAL CHARGES OR LEVIES NOT YET DUE AND PAYABLE OR DELINQUENT AND LIENS
FOR TAXES, ASSESSMENTS OR GOVERNMENTAL CHARGES OR LEVIES, WHICH (I) ARE BEING
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS FOR WHICH ADEQUATE RESERVES
HAVE BEEN ESTABLISHED IN ACCORDANCE WITH GAAP, WHICH PROCEEDINGS (OR ORDERS
ENTERED IN CONNECTION WITH SUCH PROCEEDINGS) HAVE THE EFFECT OF PREVENTING THE
FORFEITURE OR SALE OF THE PROPERTY OR ASSETS SUBJECT TO ANY SUCH LIEN, OR
(II) IN THE CASE OF ANY SUCH CHARGE OR CLAIM WHICH HAS OR MAY BECOME A LIEN
AGAINST ANY OF THE COLLATERAL, SUCH LIEN AND THE CONTEST THEREOF SHALL SATISFY
THE CONTESTED COLLATERAL LIEN CONDITIONS;

 

(B)                                 LIENS IN RESPECT OF PROPERTY OF ANY COMPANY
IMPOSED BY LAW, WHICH WERE INCURRED IN THE ORDINARY COURSE OF BUSINESS AND DO
NOT SECURE INDEBTEDNESS FOR BORROWED MONEY, SUCH AS CARRIERS’, WAREHOUSEMEN’S,
MATERIALMEN’S, LANDLORDS’, WORKMEN’S, SUPPLIERS’, REPAIRMEN’S AND MECHANICS’
LIENS AND OTHER SIMILAR LIENS ARISING IN THE ORDINARY COURSE OF BUSINESS, AND
(I) WHICH DO NOT IN THE AGGREGATE MATERIALLY DETRACT FROM THE VALUE OF THE
PROPERTY OF THE COMPANIES, TAKEN AS A WHOLE, AND DO NOT MATERIALLY IMPAIR THE
USE THEREOF IN THE OPERATION OF THE BUSINESS OF THE COMPANIES, TAKEN AS A WHOLE,
(II) WHICH DO NOT PERTAIN TO INDEBTEDNESS THAT IS DUE AND PAYABLE OR WHICH
PERTAIN TO LIENS THAT ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS FOR WHICH ADEQUATE RESERVES HAVE BEEN ESTABLISHED IN ACCORDANCE WITH
GAAP, WHICH PROCEEDINGS (OR ORDERS ENTERED IN CONNECTION WITH SUCH PROCEEDINGS)
HAVE THE EFFECT OF PREVENTING THE FORFEITURE OR SALE OF THE PROPERTY OR ASSETS
SUBJECT TO ANY SUCH LIEN, AND (III) IN THE CASE OF ANY SUCH LIEN WHICH HAS OR
MAY BECOME A LIEN AGAINST ANY OF THE COLLATERAL, SUCH LIEN AND THE CONTEST
THEREOF SHALL SATISFY THE CONTESTED COLLATERAL LIEN CONDITIONS;

 

(C)                                  LIENS IN EXISTENCE ON THE CLOSING DATE AND
SET FORTH ON SCHEDULE 6.02(C); PROVIDED THAT (I) THE AGGREGATE PRINCIPAL AMOUNT
OF THE INDEBTEDNESS, IF ANY, SECURED BY SUCH LIENS DOES NOT INCREASE; AND
(II) SUCH LIENS DO NOT ENCUMBER ANY PROPERTY OTHER THAN THE PROPERTY SUBJECT
THERETO ON THE CLOSING DATE;

 

(D)                                 EASEMENTS, RIGHTS-OF-WAY, RESTRICTIONS
(INCLUDING ZONING RESTRICTIONS), COVENANTS, ENCROACHMENTS, PROTRUSIONS AND OTHER
SIMILAR CHARGES OR ENCUMBRANCES, AND MINOR TITLE DEFICIENCIES ON OR WITH RESPECT
TO ANY REAL PROPERTY, IN EACH CASE WHETHER NOW OR HEREAFTER IN EXISTENCE, NOT
(I) SECURING INDEBTEDNESS, (II) INDIVIDUALLY OR IN THE AGGREGATE MATERIALLY
IMPAIRING THE VALUE OR MARKETABILITY OF SUCH REAL PROPERTY AND
(III) INDIVIDUALLY OR IN THE AGGREGATE MATERIALLY INTERFERING WITH THE CONDUCT
OF THE BUSINESS OF THE COMPANIES AT SUCH REAL PROPERTY;

 

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(E)                                  LIENS ARISING OUT OF JUDGMENTS OR AWARDS
NOT RESULTING IN A DEFAULT AND IN RESPECT OF WHICH SUCH COMPANY SHALL IN GOOD
FAITH BE PROSECUTING AN APPEAL OR PROCEEDINGS FOR REVIEW IN RESPECT OF WHICH
THERE SHALL BE SECURED A SUBSISTING STAY OF EXECUTION PENDING SUCH APPEAL OR
PROCEEDINGS; PROVIDED THAT THE AGGREGATE AMOUNT OF ALL SUCH JUDGMENTS OR AWARDS
(AND ANY CASH AND THE FAIR MARKET VALUE OF ANY PROPERTY SUBJECT TO SUCH LIENS)
DOES NOT EXCEED $1.0 MILLION AT ANY TIME OUTSTANDING;

 

(F)                                    LIENS (OTHER THAN ANY LIEN IMPOSED BY
ERISA) (I) IMPOSED BY LAW OR DEPOSITS MADE IN CONNECTION THEREWITH IN THE
ORDINARY COURSE OF BUSINESS IN CONNECTION WITH WORKERS’ COMPENSATION,
UNEMPLOYMENT INSURANCE AND OTHER TYPES OF SOCIAL SECURITY, (II) INCURRED IN THE
ORDINARY COURSE OF BUSINESS TO SECURE THE PERFORMANCE OF TENDERS, STATUTORY
OBLIGATIONS (OTHER THAN EXCISE TAXES), SURETY, STAY, CUSTOMS AND APPEAL BONDS,
STATUTORY BONDS, BIDS, LEASES, GOVERNMENT CONTRACTS, TRADE CONTRACTS,
PERFORMANCE AND RETURN OF MONEY BONDS AND OTHER SIMILAR OBLIGATIONS (EXCLUSIVE
OF OBLIGATIONS FOR THE PAYMENT OF BORROWED MONEY) OR (III) ARISING BY VIRTUE OF
DEPOSITS MADE IN THE ORDINARY COURSE OF BUSINESS TO SECURE LIABILITY FOR
PREMIUMS TO INSURANCE CARRIERS; PROVIDED THAT (W) WITH RESPECT TO CLAUSES (I),
(II) AND (III) HEREOF, SUCH LIENS ARE FOR AMOUNTS NOT YET DUE AND PAYABLE OR
DELINQUENT OR, TO THE EXTENT SUCH AMOUNTS ARE SO DUE AND PAYABLE, SUCH AMOUNTS
ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS FOR WHICH ADEQUATE
RESERVES HAVE BEEN ESTABLISHED IN ACCORDANCE WITH GAAP, WHICH PROCEEDINGS FOR
ORDERS ENTERED IN CONNECTION WITH SUCH PROCEEDINGS HAVE THE EFFECT OF PREVENTING
THE FORFEITURE OR SALE OF THE PROPERTY OR ASSETS SUBJECT TO ANY SUCH LIEN, (X)
TO THE EXTENT SUCH LIENS ARE NOT IMPOSED BY LAW, SUCH LIENS SHALL IN NO EVENT
ENCUMBER ANY PROPERTY OTHER THAN CASH AND CASH EQUIVALENTS WHICH HAVE BEEN
DEPOSITED WITH SUCH LIENHOLDER OR HAS OTHERWISE BEEN SUBORDINATED TO THE LIENS
SECURING THE OBLIGATIONS HEREUNDER PURSUANT TO A LANDLORD LIEN WAIVER AND ACCESS
AGREEMENT, (Y) IN THE CASE OF ANY SUCH LIEN AGAINST ANY OF THE COLLATERAL, SUCH
LIEN AND THE CONTEST THEREOF SHALL SATISFY THE CONTESTED COLLATERAL LIEN
CONDITIONS AND (Z) THE AGGREGATE AMOUNT OF DEPOSITS AT ANY TIME PURSUANT TO
CLAUSE (II) AND (III) SHALL NOT EXCEED $250,000 IN THE AGGREGATE;

 

(G)                                 LEASES OR SUBLEASES WITH RESPECT TO THE
ASSETS OR PROPERTIES OF ANY COMPANY, IN EACH CASE ENTERED INTO IN THE ORDINARY
COURSE OF SUCH COMPANY’S BUSINESS SO LONG AS SUCH LEASES ARE SUBORDINATE IN ALL
RESPECTS TO THE LIENS GRANTED AND EVIDENCED BY THE SECURITY DOCUMENTS AND DO
NOT, INDIVIDUALLY OR IN THE AGGREGATE, (I) INTERFERE IN ANY MATERIAL RESPECT
WITH THE ORDINARY CONDUCT OF THE BUSINESS OF ANY COMPANY OR (II) MATERIALLY
IMPAIR THE USE (FOR ITS INTENDED PURPOSES) OR THE VALUE OF THE PROPERTY SUBJECT
THERETO;

 

(H)                                 LIENS ARISING OUT OF CONDITIONAL SALE, TITLE
RETENTION, CONSIGNMENT OR SIMILAR ARRANGEMENTS FOR THE SALE OF GOODS ENTERED
INTO BY ANY COMPANY IN THE ORDINARY COURSE OF BUSINESS IN ACCORDANCE WITH THE
PAST PRACTICES OF SUCH COMPANY;

 

(I)                                     LIENS ARISING PURSUANT TO PURCHASE MONEY
OBLIGATIONS OR CAPITAL LEASE OBLIGATIONS INCURRED PURSUANT TO SECTION 6.01(E);
PROVIDED THAT (I) THE INDEBTEDNESS SECURED BY ANY SUCH LIEN (INCLUDING
REFINANCINGS THEREOF) DOES NOT EXCEED 100% OF THE COST OF THE PROPERTY BEING
ACQUIRED OR LEASED AT THE TIME OF THE INCURRENCE OF SUCH INDEBTEDNESS AND
(II) ANY SUCH LIENS ATTACH ONLY TO THE PROPERTY BEING FINANCED PURSUANT

 

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TO SUCH PURCHASE MONEY OBLIGATIONS OR CAPITAL LEASE OBLIGATIONS AND DO NOT
ENCUMBER ANY OTHER PROPERTY OF ANY COMPANY;

 

(J)                                     BANKERS’ LIENS, RIGHTS OF SETOFF AND
OTHER SIMILAR LIENS EXISTING SOLELY WITH RESPECT TO CASH AND CASH EQUIVALENTS ON
DEPOSIT IN ONE OR MORE ACCOUNTS MAINTAINED BY ANY COMPANY, IN EACH CASE GRANTED
IN THE ORDINARY COURSE OF BUSINESS IN FAVOR OF THE BANK OR BANKS WITH WHICH SUCH
ACCOUNTS ARE MAINTAINED, SECURING AMOUNTS OWING TO SUCH BANK WITH RESPECT TO
CASH MANAGEMENT AND OPERATING ACCOUNT ARRANGEMENTS, INCLUDING THOSE INVOLVING
POOLED ACCOUNTS AND NETTING ARRANGEMENTS; PROVIDED THAT IN NO CASE SHALL ANY
SUCH LIENS SECURE (EITHER DIRECTLY OR INDIRECTLY) THE REPAYMENT OF ANY
INDEBTEDNESS;

 

(K)                                  LIENS GRANTED PURSUANT TO THE SECURITY
DOCUMENTS;

 

(L)                                     LICENSES OR SUBLICENSES OF INTELLECTUAL
PROPERTY GRANTED BY ANY COMPANY IN THE ORDINARY COURSE OF BUSINESS AND NOT
INTERFERING IN ANY MATERIAL RESPECT WITH THE ORDINARY CONDUCT OF THE BUSINESS OF
SUCH COMPANY;

 

(M)                               LIENS ATTACHING SOLELY TO CASH EARNEST MONEY
DEPOSITS IN CONNECTION WITH ANY LETTER OF INTENT OR PURCHASE AGREEMENT IN
CONNECTION WITH A PERMITTED ACQUISITION;

 

(N)                                 LIENS IN FAVOR OF CUSTOMS AND REVENUES
AUTHORITIES WHICH SECURE PAYMENT OF CUSTOMS DUTIES IN CONNECTION WITH THE
IMPORTATION OF GOODS TO THE EXTENT REQUIRED BY LAW;

 

(O)                                 LIENS DEEMED TO EXIST IN CONNECTION WITH
SET-OFF RIGHTS IN THE ORDINARY COURSE OF BORROWERS’ AND THEIR SUBSIDIARIES’
BUSINESS;

 

(P)                                 REPLACEMENT, EXTENSION OR RENEWAL OF ANY
LIEN PERMITTED HEREIN IN THE SAME PROPERTY PREVIOUSLY SUBJECT THERETO PROVIDED
THE UNDERLYING INDEBTEDNESS IS PERMITTED TO BE REPLACED, EXTENDED AND RENEWED
UNDER SECTION 6.01(B);

 

(Q)                                 THE FILING OF FINANCING STATEMENTS SOLELY AS
A PRECAUTIONARY MEASURE IN CONNECTION WITH OPERATING LEASES OR THE FILING OF
FINANCING STATEMENTS REGARDING CONSIGNMENT OF GOODS; AND

 

(R)                                    THE FOLLOWING LIENS SECURING THE TERM
LOAN INDEBTEDNESS: (I) WITH RESPECT TO THE TERM LOAN PRIORITY COLLATERAL, FIRST
PRIORITY LIENS SENIOR TO THE LIENS SECURING THE OBLIGATIONS AND (II) WITH
RESPECT TO THE REVOLVING CREDIT PRIORITY COLLATERAL, SECOND PRIORITY LIENS
JUNIOR TO THE LIENS SECURING THE OBLIGATIONS;

 

provided, however, that no Liens (other than Liens permitted under
Section 6.02(r)(ii)) shall be permitted to exist, directly or indirectly, on any
Pledged Securities or Pledged Notes (each as defined in the Security Agreement).

 

SECTION 6.03  SALE AND LEASEBACK TRANSACTIONS.  ENTER INTO ANY ARRANGEMENT,
DIRECTLY OR INDIRECTLY, WITH ANY PERSON WHEREBY IT SHALL SELL OR TRANSFER ANY
PROPERTY, REAL OR PERSONAL, USED OR USEFUL IN ITS BUSINESS, WHETHER NOW OWNED OR
HEREAFTER ACQUIRED, AND THEREAFTER RENT OR LEASE SUCH PROPERTY OR OTHER PROPERTY
WHICH IT INTENDS TO USE FOR SUBSTANTIALLY THE SAME

 

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PURPOSE OR PURPOSES AS THE PROPERTY BEING SOLD OR TRANSFERRED UNLESS (I) THE
SALE OF SUCH PROPERTY IS PERMITTED BY SECTION 6.05 AND (II) ANY LIENS ARISING IN
CONNECTION WITH ITS USE OF SUCH PROPERTY ARE PERMITTED BY SECTION 6.02.

 

SECTION 6.04  INVESTMENT, LOAN AND ADVANCES.  DIRECTLY OR INDIRECTLY, LEND MONEY
OR CREDIT OR MAKE ADVANCES TO ANY PERSON, OR PURCHASE OR ACQUIRE ANY STOCK,
OBLIGATIONS OR SECURITIES OF, OR ANY OTHER INTEREST IN, OR MAKE ANY CAPITAL
CONTRIBUTION TO, ANY OTHER PERSON, OR PURCHASE OR OWN A FUTURES CONTRACT OR
OTHERWISE BECOME LIABLE FOR THE PURCHASE OR SALE OF CURRENCY OR OTHER
COMMODITIES AT A FUTURE DATE IN THE NATURE OF A FUTURES CONTRACT (ALL OF THE
FOREGOING, COLLECTIVELY, “INVESTMENTS”), EXCEPT THAT THE FOLLOWING SHALL BE
PERMITTED:

 

(A)                                  THE COMPANIES MAY CONSUMMATE THE
TRANSACTIONS IN ACCORDANCE WITH THE PROVISIONS OF THE TRANSACTION DOCUMENTS;

 

(B)                                 INVESTMENTS OUTSTANDING ON THE CLOSING DATE
AND IDENTIFIED ON SCHEDULE 6.04(B);

 

(C)                                  THE COMPANIES MAY (I) ACQUIRE AND HOLD
ACCOUNTS RECEIVABLES OWING TO ANY OF THEM IF CREATED OR ACQUIRED IN THE ORDINARY
COURSE OF BUSINESS AND PAYABLE OR DISCHARGEABLE IN ACCORDANCE WITH CUSTOMARY
TERMS, (II) ACQUIRE AND HOLD CASH AND CASH EQUIVALENTS, (III) ENDORSE NEGOTIABLE
INSTRUMENTS FOR COLLECTION IN THE ORDINARY COURSE OF BUSINESS, (IV) MAKE LEASE,
UTILITY AND OTHER SIMILAR DEPOSITS IN THE ORDINARY COURSE OF BUSINESS; OR
(V) MAKE PREPAYMENTS AND DEPOSITS TO SUPPLIERS IN THE ORDINARY COURSE OF
BUSINESS;

 

(D)                                 BORROWERS MAY ENTER INTO HEDGING AGREEMENTS;

 

(E)                                  ANY LOAN PARTY (OTHER THAN HOLDINGS) MAY
MAKE INTERCOMPANY LOANS AND ADVANCES TO ANY OTHER LOAN PARTY (OTHER THAN
HOLDINGS); PROVIDED THAT SUCH LOAN SHALL SIMULTANEOUSLY BE RECORDED ON SUCH LOAN
PARTY’S LEDGERS AS AN INTERCOMPANY LOAN, EVIDENCED BY A PROMISSORY NOTES AND
SHALL BE PLEDGED (AND DELIVERED) BY SUCH LOAN PARTY THAT IS THE LENDER OF SUCH
INTERCOMPANY LOAN AS COLLATERAL PURSUANT TO THE SECURITY AGREEMENT, PROVIDED
FURTHER THAT (I) NO LOAN PARTY MAY MAKE LOANS TO ANY FOREIGN SUBSIDIARY PURSUANT
TO THIS PARAGRAPH (E) AND (II) ANY LOANS MADE PURSUANT TO THIS PARAGRAPH
(E) SHALL BE SUBORDINATED TO THE OBLIGATIONS OF THE LOAN PARTIES PURSUANT TO AN
INTERCOMPANY NOTE IN SUBSTANTIALLY THE FORM OF EXHIBIT L;

 

(F)                                    BORROWERS AND THE SUBSIDIARIES MAY MAKE
LOANS AND ADVANCES (INCLUDING PAYROLL, RELOCATION, TRAVEL AND ENTERTAINMENT
RELATED ADVANCES) IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICES TO THEIR RESPECTIVE EMPLOYEES (OTHER THAN ANY LOANS OR ADVANCES TO ANY
DIRECTOR OR EXECUTIVE OFFICER (OR EQUIVALENT THEREOF) THAT WOULD BE IN VIOLATION
OF SECTION 402 OF THE SARBANES-OXLEY ACT);

 

(G)                                 BORROWERS AND THE SUBSIDIARIES MAY SELL OR
TRANSFER AMOUNTS AND ACQUIRE ASSETS TO THE EXTENT PERMITTED BY SECTION 6.05;

 

(H)                                 BORROWERS MAY ESTABLISH (I) WHOLLY OWNED
SUBSIDIARIES TO THE EXTENT PERMITTED BY SECTION 6.12 AND (II) NON-WHOLLY OWNED
SUBSIDIARIES AND/OR JOINT VENTURES

 

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TO THE EXTENT THAT INVESTMENTS IN SUCH NON-WHOLLY OWNED SUBSIDIARIES AND/OR
JOINT VENTURES SHALL NOT EXCEED $2.5 MILLION AT ANY TIME OUTSTANDING, AFTER
TAKING INTO ACCOUNT AMOUNTS RETURNED IN CASH (INCLUDING UPON DISPOSITION);

 

(I)                                     INVESTMENTS (OTHER THAN AS DESCRIBED IN
SECTION 6.04(E)) (I) BY A BORROWER IN ANY SUBSIDIARY GUARANTOR, (II) BY ANY
COMPANY IN A BORROWER OR ANY SUBSIDIARY GUARANTOR, (III) BY HOLDINGS IN A
BORROWER AND (IV) BY A SUBSIDIARY GUARANTOR IN ANOTHER SUBSIDIARY GUARANTOR;

 

(J)                                     INVESTMENTS IN SECURITIES OF TRADE
CREDITORS OR CUSTOMERS IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH
SUCH COMPANY’S PAST PRACTICES THAT ARE RECEIVED IN SETTLEMENT OF BONA FIDE
DISPUTES OR PURSUANT TO ANY PLAN OF REORGANIZATION OR LIQUIDATION OR SIMILAR
ARRANGEMENT UPON THE BANKRUPTCY OR INSOLVENCY OF SUCH TRADE CREDITORS OR
CUSTOMERS;

 

(K)                                  INVESTMENTS MADE BY A BORROWER OR ANY
SUBSIDIARY AS A RESULT OF CONSIDERATION RECEIVED IN CONNECTION WITH AN ASSET
SALE MADE IN COMPLIANCE WITH SECTION 6.05;

 

(L)                                     EARNEST MONEY REQUIRED IN CONNECTION
WITH AND TO THE EXTENT PERMITTED BY PERMITTED ACQUISITIONS;

 

(M)                               LOAN PARTIES MAY HOLD INVESTMENTS TO THE
EXTENT SUCH INVESTMENTS REFLECT AN INCREASE IN THE VALUE OF INVESTMENTS
OTHERWISE PERMITTED UNDER THIS SECTION 6.04 HEREOF;

 

(N)                                 INVESTMENTS IN DEPOSIT ACCOUNTS OPENED IN
THE ORDINARY COURSE OF BUSINESS PROVIDED SUCH DEPOSIT ACCOUNTS ARE SUBJECT TO
DEPOSIT ACCOUNT CONTROL AGREEMENTS IF REQUIRED HEREUNDER;

 

(O)                                 ANY LOAN PARTY MAY CAPITALIZE OR FORGIVE ANY
INDEBTEDNESS OWED TO IT BY OTHER LOAN PARTIES (EXCEPT THAT BORROWERS SHALL NOT
FORGIVE INTERCOMPANY LOANS MADE TO ANY OTHER LOAN PARTY);

 

(P)                                 THE LOAN PARTIES MAY MAINTAIN AN EXECUTIVE
DEFERRED COMPENSATION PROGRAM AND ACQUIRE, MAINTAIN AND SELL READILY MARKETABLE
SECURITIES AS PART OF SUCH PROGRAM, WHICH SECURITIES MAY CONSIST OF STOCKS,
BONDS AND MUTUAL FUNDS, BUT NOT TO EXCEED $5.0 MILLION IN THE AGGREGATE AT ANY
TIME; AND

 

(Q)                                 OTHER INVESTMENTS NOT EXCEEDING $1,000,000
AT ANY TIME OUTSTANDING (PLUS ANY APPRECIATION IN THE VALUE OF ANY SUCH
INVESTMENT OCCURRING AFTER SUCH INVESTMENT IS ACQUIRED).

 

SECTION 6.05  MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND ACQUISITIONS.  WIND
UP, LIQUIDATE OR DISSOLVE ITS AFFAIRS OR ENTER INTO ANY TRANSACTION OF MERGER OR
CONSOLIDATION, OR CONVEY, SELL, LEASE OR OTHERWISE DISPOSE OF (OR AGREE TO DO
ANY OF THE FOREGOING AT ANY FUTURE TIME) ALL OR ANY PART OF ITS PROPERTY OR
ASSETS, OR PURCHASE OR OTHERWISE ACQUIRE (IN ONE OR A SERIES OF

 

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RELATED TRANSACTIONS) ANY PART OF THE PROPERTY OR ASSETS OF ANY PERSON (OR AGREE
TO DO ANY OF THE FOREGOING AT ANY FUTURE TIME), EXCEPT THAT:

 

(A)                                  CAPITAL EXPENDITURES BY BORROWERS AND THE
SUBSIDIARIES SHALL BE PERMITTED TO THE EXTENT PERMITTED BY SECTION 6.08(E);

 

(B)                                 (I) PURCHASES OR OTHER ACQUISITIONS OF
INVENTORY, MATERIALS, EQUIPMENT AND INTANGIBLE ASSETS IN THE ORDINARY COURSE OF
BUSINESS SHALL BE PERMITTED, (II) SUBJECT TO SECTION 2.10(B), SALES OF USED,
WORN OUT, OBSOLETE OR SURPLUS PROPERTY BY ANY COMPANY IN THE ORDINARY COURSE OF
BUSINESS AND THE ABANDONMENT OR OTHER ASSET SALE OF INTELLECTUAL PROPERTY THAT
IS, IN THE REASONABLE JUDGMENT OF BORROWERS, NO LONGER ECONOMICALLY PRACTICABLE
TO MAINTAIN OR USEFUL IN THE CONDUCT OF THE BUSINESS OF THE COMPANIES AS
CURRENTLY BEING CONDUCTED SHALL BE PERMITTED AND (III) SUBJECT TO
SECTION 2.10(B), THE SALE, LEASE OR OTHER DISPOSAL OF ANY ASSETS IN AN ARM’S
LENGTH TRANSACTION SHALL BE PERMITTED; PROVIDED THAT THE AGGREGATE CONSIDERATION
RECEIVED IN RESPECT OF ALL ASSET SALES PURSUANT TO THIS CLAUSE (B)(III) SHALL
NOT EXCEED $1.0 MILLION IN ANY FOUR CONSECUTIVE FISCAL QUARTERS OF BORROWERS;

 

(C)                                  INVESTMENTS IN CONNECTION WITH ANY SUCH
TRANSACTION MAY BE MADE TO THE EXTENT PERMITTED BY SECTION 6.04;

 

(D)                                 BORROWERS AND THE SUBSIDIARIES MAY SELL CASH
EQUIVALENTS AND USE CASH FOR PURPOSES THAT ARE OTHERWISE PERMITTED BY THE TERMS
OF THIS AGREEMENT IN THE ORDINARY COURSE OF BUSINESS;

 

(E)                                  BORROWERS AND THE SUBSIDIARIES MAY LEASE
(AS LESSEE OR LESSOR) REAL OR PERSONAL PROPERTY AND MAY GUARANTY SUCH LEASE, IN
EACH CASE, IN THE ORDINARY COURSE OF BUSINESS AND IN ACCORDANCE WITH THE
APPLICABLE SECURITY DOCUMENTS;

 

(F)                                    THE TRANSACTIONS SHALL BE PERMITTED AS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS;

 

(G)                                 BORROWERS AND THE SUBSIDIARIES MAY
CONSUMMATE PERMITTED ACQUISITIONS;

 

(H)                                 (I) ANY LOAN PARTY MAY TRANSFER OR LEASE
PROPERTY TO, OR ACQUIRE OR LEASE PROPERTY FROM, ANY LOAN PARTY; PROVIDED, THAT
ANY SUCH LEASE OF ANY OF THE MORTGAGED REAL PROPERTY SHALL BE MADE EXPRESSLY
SUBORDINATED TO THE APPLICABLE MORTGAGE, AND (II) ANY LOAN PARTY (OTHER THAN
HOLDINGS) MAY BE MERGED INTO ANY OTHER LOAN PARTY (OTHER THAN HOLDINGS);
PROVIDED, THAT, IN ANY MERGER INVOLVING A BORROWER, A BORROWER SHALL BE THE
SURVIVING CORPORATION; PROVIDED THAT THE LIENS ON THE COLLATERAL GRANTED IN
FAVOR OF THE ADMINISTRATIVE AGENT UNDER THE SECURITY DOCUMENTS SHALL BE
MAINTAINED;

 

(I)                                     ANY SUBSIDIARY OF A BORROWER MAY
DISSOLVE, LIQUIDATE OR WIND UP ITS AFFAIRS AT ANY TIME; PROVIDED THAT SUCH
DISSOLUTION, LIQUIDATION OR WINDING UP, AS APPLICABLE, COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; AND

 

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(J)                                     DISCOUNTS OR FORGIVENESS OF ACCOUNTS
RECEIVABLE IN THE ORDINARY COURSE OF BUSINESS OR IN CONNECTION WITH COLLECTION
OR COMPROMISE THEREOF SHALL BE PERMITTED PROVIDED THE ACCOUNT DEBTOR IS NOT AN
AFFILIATE; AND

 

(K)                                  PERMITTED LIENS (TO THE EXTENT CONSTITUTING
A CONVEYANCE OF PROPERTY) SHALL BE PERMITTED.

 

To the extent the Required Lenders waive the provisions of this Section 6.05
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 6.05, such Collateral (unless sold to a Company) shall
be sold free and clear of the Liens created by the Security Documents, and the
Administrative Agent and the Collateral Agent shall take all actions deemed
appropriate in order to effect the foregoing.

 

SECTION 6.06  DIVIDENDS.  AUTHORIZE, DECLARE OR PAY, DIRECTLY OR INDIRECTLY, ANY
DIVIDENDS WITH RESPECT TO ANY COMPANY, EXCEPT THAT:

 

(A)                                  ANY SUBSIDIARY OF A BORROWER (I) MAY PAY
CASH DIVIDENDS TO SUCH BORROWER OR ANY WHOLLY OWNED SUBSIDIARY OF SUCH BORROWER
AND (II) IF SUCH SUBSIDIARY IS NOT A WHOLLY OWNED SUBSIDIARY OF SUCH BORROWER,
MAY PAY CASH DIVIDENDS TO ITS SHAREHOLDERS GENERALLY SO LONG AS SUCH BORROWER OR
ITS SUBSIDIARY WHICH OWNS THE EQUITY INTEREST OR INTERESTS IN THE SUBSIDIARY
PAYING SUCH DIVIDENDS RECEIVES AT LEAST ITS PROPORTIONATE SHARE THEREOF (BASED
UPON ITS RELATIVE HOLDINGS OF EQUITY INTERESTS IN THE SUBSIDIARY PAYING SUCH
DIVIDENDS AND TAKING INTO ACCOUNT THE RELATIVE PREFERENCES, IF ANY, OF THE
VARIOUS CLASSES OF EQUITY INTERESTS IN SUCH SUBSIDIARY);

 

(B)                                 SO LONG AS NO DEFAULT EXISTS OR WOULD RESULT
THEREFROM, BORROWERS MAY PAY DIVIDENDS TO HOLDINGS FOR THE PURPOSE OF ENABLING
HOLDINGS TO, AND HOLDINGS MAY, REPURCHASE OUTSTANDING SHARES OF ITS COMMON STOCK
(OR OPTIONS TO PURCHASE SUCH COMMON STOCK) FOLLOWING THE DEATH, DISABILITY,
RETIREMENT OR TERMINATION OF EMPLOYMENT OF EMPLOYEES, OFFICERS OR DIRECTORS OF
ANY COMPANY; PROVIDED THAT (I) ALL AMOUNTS USED TO EFFECT SUCH REPURCHASES ARE
OBTAINED BY HOLDINGS FROM A SUBSTANTIALLY CONCURRENT ISSUANCE OF ITS COMMON
STOCK (OR OPTIONS TO PURCHASE SUCH COMMON STOCK) TO OTHER EMPLOYEES, MEMBERS OF
MANAGEMENT, EXECUTIVE OFFICERS OR DIRECTORS OF ANY COMPANY OR (II) TO THE EXTENT
THE PROCEEDS USED TO EFFECT ANY REPURCHASE PURSUANT TO THIS CLAUSE (II) ARE NOT
OBTAINED AS DESCRIBED IN PRECEDING CLAUSE (I), THE AGGREGATE AMOUNT OF DIVIDENDS
PAID BY HOLDINGS TO ITS STOCKHOLDERS PURSUANT TO THIS PARAGRAPH (B) (EXCLUSIVE
OF AMOUNTS PAID AS DESCRIBED PURSUANT TO PRECEDING CLAUSE (I)) SHALL NOT EXCEED
$1.0 MILLION IN ANY FISCAL YEAR OF HOLDINGS;

 

(C)                                  BORROWERS MAY PAY CASH DIVIDENDS TO
HOLDINGS FOR THE PURPOSE OF PAYING, SO LONG AS ALL PROCEEDS THEREOF ARE PROMPTLY
USED BY HOLDINGS TO PAY, ITS FRANCHISE TAXES AND OPERATING EXPENSES INCURRED IN
THE ORDINARY COURSE OF BUSINESS AND OTHER CORPORATE OVERHEAD COSTS AND EXPENSES
(INCLUDING LEGAL AND ACCOUNTING EXPENSES AND SIMILAR EXPENSES AND CUSTOMARY FEES
TO NON-OFFICER DIRECTORS OF HOLDINGS);

 

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(D)                                 BORROWERS AND SUBSIDIARIES MAY PAY CASH
DIVIDENDS TO HOLDINGS FOR THE PURPOSE OF PAYING, SO LONG AS ALL PROCEEDS THEREOF
ARE PROMPTLY USED BY HOLDINGS TO PAY, ITS INCOME TAX WHEN AND AS DUE; AND

 

(E)                                  ON THE CLOSING DATE, D 56 MAY PAY A CASH
DIVIDEND IN THE AMOUNT OF THE ACQUISITION CONSIDERATION TO EFFECT THE
ACQUISITION.

 

SECTION 6.07  TRANSACTIONS WITH AFFILIATES.  ENTER INTO, DIRECTLY OR INDIRECTLY,
ANY TRANSACTION OR SERIES OF RELATED TRANSACTIONS, WHETHER OR NOT IN THE
ORDINARY COURSE OF BUSINESS, WITH ANY AFFILIATE OF ANY COMPANY (OTHER THAN
BETWEEN OR AMONG BORROWERS AND THEIR WHOLLY-OWNED SUBSIDIARIES), OTHER THAN IN
THE ORDINARY COURSE OF BUSINESS AND ON TERMS AND CONDITIONS SUBSTANTIALLY AS
FAVORABLE TO SUCH COMPANY AS WOULD REASONABLY BE OBTAINED BY SUCH COMPANY AT
THAT TIME IN A COMPARABLE ARM’S-LENGTH TRANSACTION WITH A PERSON OTHER THAN AN
AFFILIATE, EXCEPT THAT:

 

(A)                                  DIVIDENDS MAY BE PAID TO THE EXTENT
PROVIDED IN SECTION 6.06;

 

(B)                                 LOANS MAY BE MADE AND OTHER TRANSACTIONS MAY
BE ENTERED INTO BETWEEN AND AMONG ANY COMPANY AND ITS AFFILIATES TO THE EXTENT
PERMITTED BY SECTIONS 6.01 AND 6.04;

 

(C)                                  CUSTOMARY FEES MAY BE PAID TO NON-OFFICER
DIRECTORS OF HOLDINGS AND CUSTOMARY INDEMNITIES MAY BE PROVIDED TO ALL DIRECTORS
OF HOLDINGS; AND

 

(D)                                 THE TRANSACTIONS MAY BE EFFECTED.

 

SECTION 6.08  FINANCIAL COVENANTS.

 

(A)                                  MAXIMUM LEVERAGE RATIO.  PERMIT THE
LEVERAGE RATIO, FOR ANY TEST PERIOD ENDING ON OR ABOUT THE DATES SET FORTH IN
THE TABLE BELOW, TO EXCEED THE RATIO SET FORTH OPPOSITE SUCH PERIOD IN THE TABLE
BELOW:

 

Test Period

 

Leverage Ratio

 

Four fiscal quarters ending December 31, 2005

 

2.9 to 1.0

 

Four fiscal quarters ending March 31, 2006

 

3.3 to 1.0

 

Four fiscal quarters ending June 30, 2006

 

3.7 to 1.0

 

Four fiscal quarters ending September 30, 2006

 

4.0 to 1.0

 

Four fiscal quarters ending December 31, 2006

 

2.0 to 1.0

 

Four fiscal quarters ending March 31, 2007

 

2.0 to 1.0

 

Four fiscal quarters ending June 30, 2007

 

2.6 to 1.0

 

Four fiscal quarters ending September 30, 2007

 

2.8 to 1.0

 

Four fiscal quarters ending December 31, 2007

 

2.0 to 1.0

 

Each period of four fiscal quarters thereafter

 

2.0 to 1.0

 

 

(B)                                 MINIMUM INTEREST COVERAGE RATIO.  PERMIT THE
CONSOLIDATED INTEREST COVERAGE RATIO, FOR ANY TEST PERIOD ENDING ON OR ABOUT THE
DATES SET FORTH IN THE TABLE BELOW, TO BE LESS THAN THE RATIO SET FORTH OPPOSITE
SUCH PERIOD IN THE TABLE BELOW:

 

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Test Period

 

Interest Coverage
Ratio

 

Four fiscal quarters ending December 31, 2005

 

2.35 to 1.0

 

Four fiscal quarters ending March 31, 2006

 

2.35 to 1.0

 

Four fiscal quarters ending June 30, 2006

 

2.75 to 1.0

 

Four fiscal quarters ending September 30, 2006

 

2.90 to 1.0

 

Four fiscal quarters ending December 31, 2006

 

3.00 to 1.0

 

Four fiscal quarters ending March 31, 2007

 

3.35 to 1.0

 

Four fiscal quarters ending June 30, 2007

 

3.60 to 1.0

 

Four fiscal quarters ending September 30, 2007

 

3.75 to 1.0

 

Four fiscal quarters ending December 31, 2007

 

3.75 to 1.0

 

Each period of four fiscal quarters thereafter

 

3.75 to 1.0

 

 

(C)                                  LIMITATION ON CAPITAL EXPENDITURES.  PERMIT
THE AGGREGATE AMOUNT OF CAPITAL EXPENDITURES MADE IN ANY TEST PERIOD ENDING ON
OR ABOUT THE DATES SET FORTH IN THE TABLE BELOW, TO EXCEED THE AMOUNT SET FORTH
OPPOSITE SUCH PERIOD BELOW:

 

Test Period

 

Amount

 

 

 

(in millions)

 

Closing Date - December 31, 2005

 

$

5.7

 

Four fiscal quarters ending December 31, 2006

 

$

14.0

 

Four fiscal quarters ending December 31, 2007

 

$

14.0

 

Four fiscal quarters ending December 31, 2008

 

$

14.0

 

Four fiscal quarters ending December 31, 2009

 

$

14.0

 

Four fiscal quarters ending December 31, 2010

 

$

14.0

 

 

provided, however, that (x) if the aggregate amount of Capital Expenditures
described in clause (c) above for any test period shall be less than the amount
permitted in clause (c) above for such test period (before giving effect to any
carryover), then 50% of the shortfall may be added to the amount of Capital
Expenditures permitted in clause (c) above for the immediately succeeding (but
not any other) fiscal year and (y) in determining whether any amount is
available for carryover, the amount expended in any fiscal year shall first be
deemed to be from the amount allocated to such year before any carryover.

 

SECTION 6.09  LIMITATION ON MODIFICATIONS OF INDEBTEDNESS; MODIFICATIONS OF
CERTIFICATE OF INCORPORATION, OR OTHER CONSTITUTIVE DOCUMENTS, BY-LAWS AND
CERTAIN OTHER AGREEMENTS, ETC.  (I) AMEND OR MODIFY, OR PERMIT THE AMENDMENT OR
MODIFICATION OF, ANY PROVISION OF EXISTING INDEBTEDNESS OR OF ANY AGREEMENT
(INCLUDING ANY PURCHASE AGREEMENT, INDENTURE, LOAN AGREEMENT OR SECURITY
AGREEMENT) RELATING THERETO OTHER THAN ANY AMENDMENTS OR MODIFICATIONS TO
INDEBTEDNESS WHICH DO NOT IN ANY WAY MATERIALLY ADVERSELY AFFECT THE INTERESTS
OF THE LENDERS AND ARE OTHERWISE PERMITTED UNDER SECTION 6.01(B); OR (II) AMEND
OR MODIFY, OR PERMIT THE AMENDMENT OR MODIFICATION OF, THE TERM LOAN DOCUMENTS
EXCEPT AS PERMITTED UNDER THE INTERCREDITOR AGREEMENT OR (III) AMEND OR MODIFY,
OR PERMIT THE AMENDMENT OR MODIFICATION OF, ANY OTHER TRANSACTION DOCUMENT, IN
EACH CASE EXCEPT FOR AMENDMENTS OR MODIFICATIONS WHICH ARE NOT IN ANY WAY
ADVERSE IN ANY MATERIAL RESPECT TO THE INTERESTS OF THE LENDERS; OR (IV) AMEND,
MODIFY OR CHANGE ITS ARTICLES OF INCORPORATION OR OTHER CONSTITUTIVE DOCUMENTS
(INCLUDING BY THE

 

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FILING OR MODIFICATION OF ANY CERTIFICATE OF DESIGNATION) OR BY-LAWS, OR ANY
AGREEMENT ENTERED INTO BY IT, WITH RESPECT TO ITS CAPITAL STOCK (INCLUDING ANY
SHAREHOLDERS’ AGREEMENT), OR ENTER INTO ANY NEW AGREEMENT WITH RESPECT TO ITS
CAPITAL STOCK, OTHER THAN ANY AMENDMENTS, MODIFICATIONS, AGREEMENTS OR CHANGES
PURSUANT TO THIS CLAUSE (IV) OR ANY SUCH NEW AGREEMENTS PURSUANT TO THIS CLAUSE
(IV) WHICH DO NOT IN ANY WAY MATERIALLY ADVERSELY AFFECT IN ANY MATERIAL RESPECT
THE INTERESTS OF THE LENDERS; PROVIDED THAT HOLDINGS MAY ISSUE SUCH CAPITAL
STOCK AS IS NOT PROHIBITED BY SECTION 6.11 OR ANY OTHER PROVISION OF THIS
AGREEMENT AND MAY AMEND ARTICLES OF INCORPORATION OR OTHER CONSTITUTIVE
DOCUMENTS TO AUTHORIZE ANY SUCH CAPITAL STOCK.

 

SECTION 6.10  LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.  DIRECTLY OR
INDIRECTLY, CREATE OR OTHERWISE CAUSE OR SUFFER TO EXIST OR BECOME EFFECTIVE ANY
ENCUMBRANCE OR RESTRICTION ON THE ABILITY OF ANY SUBSIDIARY TO (A) PAY DIVIDENDS
OR MAKE ANY OTHER DISTRIBUTIONS ON ITS CAPITAL STOCK OR ANY OTHER INTEREST OR
PARTICIPATION IN ITS PROFITS OWNED BY A BORROWER OR ANY OTHER SUBSIDIARY OF A
BORROWER, OR PAY ANY INDEBTEDNESS OWED TO A BORROWER OR ANY OTHER SUBSIDIARY OF
A BORROWER, (B) MAKE LOANS OR ADVANCES TO A BORROWER OR ANY OTHER SUBSIDIARY OF
A BORROWER OR (C) TRANSFER ANY OF ITS PROPERTIES TO A BORROWER OR ANY OTHER
SUBSIDIARY OF A BORROWER, EXCEPT FOR SUCH ENCUMBRANCES OR RESTRICTIONS EXISTING
UNDER OR BY REASON OF (I) APPLICABLE LAW; (II) THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; (III) THE TERM LOAN DOCUMENTS, (IV) CUSTOMARY PROVISIONS RESTRICTING
SUBLETTING OR ASSIGNMENT OF ANY LEASE GOVERNING A LEASEHOLD INTEREST OF A
BORROWER OR ANY OTHER SUBSIDIARY OF A BORROWER; (V) CUSTOMARY PROVISIONS
RESTRICTING ASSIGNMENT OF ANY AGREEMENT ENTERED INTO BY A BORROWER OR ANY OTHER
SUBSIDIARY OF A BORROWER IN THE ORDINARY COURSE OF BUSINESS; (VI) ANY HOLDER OF
A LIEN PERMITTED BY SECTION 6.02 MAY RESTRICT THE TRANSFER OF THE ASSET OR
ASSETS SUBJECT THERETO; (VII) RESTRICTIONS WHICH ARE NOT MORE RESTRICTIVE THAN
THOSE CONTAINED IN THIS AGREEMENT CONTAINED IN ANY DOCUMENTS GOVERNING ANY
INDEBTEDNESS INCURRED AFTER THE CLOSING DATE IN ACCORDANCE WITH THE PROVISIONS
OF THIS AGREEMENT; (VIII) CUSTOMARY RESTRICTIONS AND CONDITIONS CONTAINED IN ANY
AGREEMENT RELATING TO THE SALE OF ANY PROPERTY PERMITTED UNDER SECTION 6.05
PENDING THE CONSUMMATION OF SUCH SALE; (IX) ANY AGREEMENT IN EFFECT AT THE TIME
SUCH SUBSIDIARY BECOMES A SUBSIDIARY OF BORROWER, SO LONG AS SUCH AGREEMENT WAS
NOT ENTERED INTO IN CONTEMPLATION OF SUCH PERSON BECOMING A SUBSIDIARY OF A
BORROWER; OR (X) IN THE CASE OF ANY JOINT VENTURE WHICH IS NOT A LOAN PARTY IN
RESPECT OF ANY MATTERS REFERRED TO IN CLAUSES (B) AND (C) ABOVE, RESTRICTIONS IN
SUCH PERSON’S ORGANIZATIONAL OR GOVERNING DOCUMENTS OR PURSUANT TO ANY JOINT
VENTURE AGREEMENT OR STOCKHOLDERS AGREEMENTS SOLELY TO THE EXTENT OF THE EQUITY
INTERESTS OF OR ASSETS HELD IN THE SUBJECT JOINT VENTURE OR OTHER ENTITY.

 

SECTION 6.11  LIMITATION ON ISSUANCE OF CAPITAL STOCK.  (A)  WITH RESPECT TO
HOLDINGS, ISSUE ANY EQUITY INTEREST THAT IS NOT QUALIFIED CAPITAL STOCK.

 

(B)                                 BORROWERS WILL NOT, AND WILL NOT PERMIT ANY
SUBSIDIARY, TO ISSUE ANY EQUITY INTEREST OF ANY SUBSIDIARY (INCLUDING BY WAY OF
SALES OF TREASURY STOCK) OR ANY OPTIONS OR WARRANTS TO PURCHASE, OR SECURITIES
CONVERTIBLE INTO, EQUITY INTEREST OF ANY SUBSIDIARY, EXCEPT (I) FOR STOCK
SPLITS, STOCK DIVIDENDS AND ADDITIONAL EQUITY INTERESTS ISSUANCES WHICH DO NOT
DECREASE THE PERCENTAGE OWNERSHIP OF A BORROWER OR ANY SUBSIDIARIES IN ANY CLASS
OF THE EQUITY INTEREST OF SUCH SUBSIDIARY; (II) SUBSIDIARIES OF A BORROWER
FORMED AFTER THE CLOSING DATE PURSUANT TO SECTION 6.12 MAY ISSUE EQUITY
INTERESTS TO A BORROWER OR THE SUBSIDIARY OF A BORROWER WHICH IS TO OWN SUCH
STOCK; AND (III) A BORROWER MAY ISSUE COMMON STOCK THAT IS QUALIFIED CAPITAL
STOCK TO HOLDINGS.  ALL EQUITY INTERESTS ISSUED IN ACCORDANCE WITH THIS
SECTION 6.11(B) SHALL, TO THE

 

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EXTENT REQUIRED BY THIS AGREEMENT OR THE SECURITY AGREEMENT, BE DELIVERED TO THE
ADMINISTRATIVE AGENT FOR PLEDGE PURSUANT TO THE SECURITY AGREEMENT.

 

SECTION 6.12  LIMITATION ON CREATION OF SUBSIDIARIES.  ESTABLISH, CREATE OR
ACQUIRE ANY ADDITIONAL SUBSIDIARIES; PROVIDED THAT A BORROWER MAY ESTABLISH OR
CREATE ONE OR MORE WHOLLY OWNED SUBSIDIARIES OF A BORROWER OR ONE OF ITS WHOLLY
OWNED SUBSIDIARIES WITHOUT CONSENT SO LONG AS (A) 100% OF THE EQUITY INTEREST OF
ANY NEW SUBSIDIARY IS, UPON THE CREATION OR ESTABLISHMENT OF ANY SUCH NEW
SUBSIDIARY (OR, IN THE CASE OF FOREIGN SUBSIDIARIES IF SUCH PLEDGE WOULD HAVE A
MATERIAL ADVERSE TAX IMPACT ON A BORROWER (DETERMINED AT THE REASONABLE
DISCRETION OF THE ADMINISTRATIVE AGENT), 66%), PLEDGED AND DELIVERED TO THE
ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SECURED PARTIES UNDER THE SECURITY
AGREEMENT; (B) UPON THE CREATION OR ESTABLISHMENT OF ANY SUCH NEW WHOLLY OWNED
SUBSIDIARY (OTHER THAN A FOREIGN SUBSIDIARY IF SUCH ACTIONS WOULD HAVE A
MATERIAL ADVERSE TAX IMPACT ON A BORROWER (DETERMINED AT THE REASONABLE
DISCRETION OF THE ADMINISTRATIVE AGENT)), SUCH SUBSIDIARY BECOMES A PARTY TO THE
APPLICABLE SECURITY DOCUMENTS AND SHALL BECOME A SUBSIDIARY GUARANTOR HEREUNDER
AND EXECUTE A JOINDER AGREEMENT AND THE OTHER LOAN DOCUMENTS ALL IN ACCORDANCE
WITH SECTION 5.11(B) ABOVE.

 

SECTION 6.13  BUSINESS.  (A)  WITH RESPECT TO HOLDINGS, ENGAGE IN ANY BUSINESS
ACTIVITIES OR HAVE ANY ASSETS OR LIABILITIES, OTHER THAN (I) ITS OWNERSHIP OF
THE EQUITY INTERESTS OF BORROWERS, (II) OBLIGATIONS UNDER THE LOAN DOCUMENTS AND
THE TERM LOAN DOCUMENTS AND (III) ACTIVITIES AND ASSETS INCIDENTAL TO THE
FOREGOING CLAUSES (I) AND (II).

 

(B)                                 WITH RESPECT TO BORROWERS AND THE
SUBSIDIARIES, ENGAGE (DIRECTLY OR INDIRECTLY) IN ANY BUSINESS OTHER THAN THOSE
BUSINESSES IN WHICH BORROWERS AND ITS SUBSIDIARIES ARE ENGAGED ON THE CLOSING
DATE (OR WHICH ARE SUBSTANTIALLY RELATED THERETO OR ARE REASONABLE EXTENSIONS
THEREOF).

 

SECTION 6.14  LIMITATION ON ACCOUNTING CHANGES.  MAKE OR PERMIT, ANY CHANGE IN
ACCOUNTING POLICIES OR REPORTING PRACTICES, WITHOUT THE CONSENT OF THE REQUIRED
LENDERS, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED, EXCEPT
CHANGES THAT, IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT OR ARE REQUIRED BY GAAP.

 

SECTION 6.15  FISCAL YEAR.  CHANGE ITS FISCAL YEAR END TO A DATE OTHER THAN ON
OR ABOUT DECEMBER 31.

 

SECTION 6.16  NO NEGATIVE PLEDGES.  DIRECTLY OR INDIRECTLY ENTER INTO OR ASSUME
ANY AGREEMENT (OTHER THAN THIS AGREEMENT PROHIBITING THE CREATION OR ASSUMPTION
OF ANY LIEN UPON ITS PROPERTIES OR ASSETS, WHETHER NOW OWNED OR HEREAFTER
ACQUIRED, EXCEPT FOR PROPERTY SUBJECT TO PURCHASE MONEY SECURITY INTERESTS,
OPERATING LEASES AND CAPITAL LEASES.

 

SECTION 6.17  LEASE OBLIGATIONS.  CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY
OBLIGATIONS AS LESSEE FOR THE RENTAL OR HIRE OF REAL OR PERSONAL PROPERTY OF ANY
KIND UNDER LEASES OR AGREEMENTS TO LEASE HAVING AN ORIGINAL TERM OF ONE YEAR OR
MORE THAT WOULD CAUSE THE DIRECT AND CONTINGENT LIABILITIES OF BORROWERS AND
THEIR SUBSIDIARIES, ON A CONSOLIDATED BASIS, IN RESPECT OF ALL SUCH OBLIGATIONS
TO EXCEED $20.0 MILLION PAYABLE IN ANY PERIOD OF 12 CONSECUTIVE MONTHS.

 

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SECTION 6.18  ANTI-TERRORISM LAW; ANTI-MONEY LAUNDERING.

 

(A)                                  DIRECTLY OR INDIRECTLY, (I) KNOWINGLY
CONDUCT ANY BUSINESS OR ENGAGE IN MAKING OR RECEIVING ANY CONTRIBUTION OF FUNDS,
GOODS OR SERVICES TO OR FOR THE BENEFIT OF ANY PERSON DESCRIBED IN SECTION 3.21,
(II) KNOWINGLY DEAL IN, OR OTHERWISE ENGAGE IN ANY TRANSACTION RELATING TO, ANY
PROPERTY OR INTERESTS IN PROPERTY BLOCKED PURSUANT TO THE EXECUTIVE ORDER OR ANY
OTHER ANTI-TERRORISM LAW, OR (III) KNOWINGLY ENGAGE IN OR CONSPIRE TO ENGAGE IN
ANY TRANSACTION THAT EVADES OR AVOIDS, OR HAS THE PURPOSE OF EVADING OR
AVOIDING, OR ATTEMPTS TO VIOLATE, ANY OF THE PROHIBITIONS SET FORTH IN ANY
ANTI-TERRORISM LAW (AND THE LOAN PARTIES SHALL DELIVER TO THE LENDERS ANY
CERTIFICATION OR OTHER EVIDENCE REQUESTED FROM TIME TO TIME BY ANY LENDER IN ITS
REASONABLE DISCRETION, CONFIRMING THE LOAN PARTIES’ COMPLIANCE WITH THIS
SECTION 6.18).

 

(B)                                 CAUSE OR PERMIT ANY OF THE FUNDS OF SUCH
LOAN PARTY THAT ARE USED TO REPAY THE LOANS TO BE DERIVED FROM ANY UNLAWFUL
ACTIVITY WITH THE RESULT THAT THE MAKING OF THE LOANS WOULD BE IN VIOLATION OF
ANY REQUIREMENT OF LAW.

 

SECTION 6.19  EMBARGOED PERSON.  CAUSE OR PERMIT (A) ANY OF THE FUNDS OR
PROPERTIES OF THE LOAN PARTIES THAT ARE USED TO REPAY THE LOANS TO CONSTITUTE
PROPERTY OF, OR BE BENEFICIALLY OWNED DIRECTLY OR INDIRECTLY BY, ANY PERSON
SUBJECT TO SANCTIONS OR TRADE RESTRICTIONS UNDER UNITED STATES LAW (“EMBARGOED
PERSON” OR “EMBARGOED PERSONS”) THAT IS IDENTIFIED ON (1) THE “LIST OF SPECIALLY
DESIGNATED NATIONALS AND BLOCKED PERSONS” MAINTAINED BY OFAC AND/OR ON ANY OTHER
SIMILAR LIST MAINTAINED BY OFAC PURSUANT TO ANY AUTHORIZING STATUTE INCLUDING,
BUT NOT LIMITED TO, THE INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT, 50 U.S.C.
§§ 1701 ET SEQ., THE TRADING WITH THE ENEMY ACT, 50 U.S.C. APP. 1 ET SEQ., AND
ANY EXECUTIVE ORDER OR REQUIREMENT OF LAW PROMULGATED THEREUNDER, WITH THE
RESULT THAT THE INVESTMENT IN THE LOAN PARTIES (WHETHER DIRECTLY OR INDIRECTLY)
IS PROHIBITED BY A REQUIREMENT OF LAW, OR THE TERM LOANS MADE BY THE LENDERS
WOULD BE IN VIOLATION OF A REQUIREMENT OF LAW, OR (2) THE EXECUTIVE ORDER, ANY
RELATED ENABLING LEGISLATION OR ANY OTHER SIMILAR EXECUTIVE ORDERS OR (B) ANY
EMBARGOED PERSON TO HAVE ANY DIRECT OR INDIRECT INTEREST, OF ANY NATURE
WHATSOEVER IN THE LOAN PARTIES, WITH THE RESULT THAT THE INVESTMENT IN THE LOAN
PARTIES (WHETHER DIRECTLY OR INDIRECTLY) IS PROHIBITED BY A REQUIREMENT OF LAW
OR THE TERM LOANS ARE IN VIOLATION OF A REQUIREMENT OF LAW.

 

SECTION 6.20  INACTIVE SUBSIDIARIES.  CAUSE OR PERMIT ANY OF THE INACTIVE
SUBSIDIARIES TO BECOME ACTIVE, CONDUCT BUSINESS OR HOLD ASSETS IN AN AMOUNT
EXCEEDING $250,000 IN THE AGGREGATE.

 

ARTICLE VII.
 
GUARANTEE

 

SECTION 7.01  THE GUARANTEE.  THE GUARANTORS HEREBY JOINTLY AND SEVERALLY
GUARANTEE AS A PRIMARY OBLIGOR AND NOT AS A SURETY TO EACH SECURED PARTY AND
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS THE PROMPT PAYMENT IN FULL WHEN DUE
(WHETHER AT STATED MATURITY, BY ACCELERATION OR OTHERWISE) OF THE PRINCIPAL OF
AND INTEREST (INCLUDING ANY INTEREST, FEES, COSTS OR CHARGES THAT WOULD ACCRUE
BUT FOR THE PROVISIONS OF THE TITLE 11 OF THE UNITED STATES CODE AFTER ANY
BANKRUPTCY OR INSOLVENCY PETITION UNDER TITLE 11 OF THE UNITED STATES CODE) ON
THE LOANS MADE BY THE LENDERS TO, AND THE NOTES HELD BY EACH LENDER OF,
BORROWERS, AND ALL OTHER OBLIGATIONS

 

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FROM TIME TO TIME OWING TO THE SECURED PARTIES BY ANY LOAN PARTY UNDER ANY LOAN
DOCUMENT OR LENDER HEDGING AGREEMENT RELATING TO THE LOANS, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS THEREOF (SUCH OBLIGATIONS BEING HEREIN
COLLECTIVELY CALLED THE “GUARANTEED OBLIGATIONS”).  THE GUARANTORS HEREBY
JOINTLY AND SEVERALLY AGREE THAT IF ANY BORROWER OR OTHER GUARANTOR(S) SHALL
FAIL TO PAY IN FULL WHEN DUE (WHETHER AT STATED MATURITY, BY ACCELERATION OR
OTHERWISE) ANY OF THE GUARANTEED OBLIGATIONS, THE GUARANTORS WILL PROMPTLY PAY
THE SAME, WITHOUT ANY DEMAND OR NOTICE WHATSOEVER, AND THAT IN THE CASE OF ANY
EXTENSION OF TIME OF PAYMENT OR RENEWAL OF ANY OF THE GUARANTEED OBLIGATIONS,
THE SAME WILL BE PROMPTLY PAID IN FULL WHEN DUE (WHETHER AT EXTENDED MATURITY,
BY ACCELERATION OR OTHERWISE) IN ACCORDANCE WITH THE TERMS OF SUCH EXTENSION OR
RENEWAL.

 

SECTION 7.02  OBLIGATIONS UNCONDITIONAL.  THE OBLIGATIONS OF THE GUARANTORS
UNDER SECTION 7.01 SHALL CONSTITUTE A GUARANTY OF PAYMENT AND ARE ABSOLUTE,
IRREVOCABLE AND UNCONDITIONAL, JOINT AND SEVERAL, IRRESPECTIVE OF THE VALUE,
GENUINENESS, VALIDITY, REGULARITY OR ENFORCEABILITY OF THE GUARANTEED
OBLIGATIONS OF BORROWERS UNDER THIS AGREEMENT, THE NOTES, IF ANY, OR ANY OTHER
AGREEMENT OR INSTRUMENT REFERRED TO HEREIN OR THEREIN, OR ANY SUBSTITUTION,
RELEASE OR EXCHANGE OF ANY OTHER GUARANTEE OF OR SECURITY FOR ANY OF THE
GUARANTEED OBLIGATIONS, AND, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
IRRESPECTIVE OF ANY OTHER CIRCUMSTANCE WHATSOEVER THAT MIGHT OTHERWISE
CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OR DEFENSE OF A SURETY OR GUARANTOR
(EXCEPT FOR PAYMENT IN FULL).  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
IT IS AGREED THAT THE OCCURRENCE OF ANY ONE OR MORE OF THE FOLLOWING SHALL NOT
ALTER OR IMPAIR THE LIABILITY OF THE GUARANTORS HEREUNDER WHICH SHALL REMAIN
ABSOLUTE, IRREVOCABLE AND UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES AS
DESCRIBED ABOVE:

 

(A)                                  THE GENUINENESS, VALIDITY, REGULARITY,
ENFORCEABILITY OR ANY FUTURE AMENDMENT OF, OR CHANGE IN, THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT TO WHICH A
BORROWER IS OR MAY BECOME A PARTY;

 

(B)                                 THE ABSENCE OF ANY ACTION TO ENFORCE THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE WAIVER OR CONSENT BY ADMINISTRATIVE
AGENT AND LENDERS WITH RESPECT TO ANY OF THE PROVISIONS THEREOF;

 

(C)                                  THE EXISTENCE, VALUE OR CONDITION OF, OR
FAILURE TO PERFECT ITS LIEN AGAINST, ANY SECURITY FOR THE OBLIGATIONS OR ANY
ACTION, OR THE ABSENCE OF ANY ACTION, BY ADMINISTRATIVE AGENT AND LENDERS IN
RESPECT THEREOF (INCLUDING THE RELEASE OF ANY SUCH SECURITY);

 

(D)                                 THE INSOLVENCY OF A BORROWER OR ANY OTHER
GUARANTOR;

 

(E)                                  AT ANY TIME OR FROM TIME TO TIME, WITHOUT
NOTICE TO THE GUARANTORS, THE TIME FOR ANY PERFORMANCE OF OR COMPLIANCE WITH ANY
OF THE GUARANTEED OBLIGATIONS SHALL BE EXTENDED, OR SUCH PERFORMANCE OR
COMPLIANCE SHALL BE WAIVED;

 

(F)                                    ANY OF THE ACTS MENTIONED IN ANY OF THE
PROVISIONS OF THIS AGREEMENT OR THE NOTES, IF ANY, OR ANY OTHER AGREEMENT OR
INSTRUMENT REFERRED TO HEREIN OR THEREIN SHALL BE DONE OR OMITTED;

 

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(G)                                 THE MATURITY OF ANY OF THE GUARANTEED
OBLIGATIONS SHALL BE ACCELERATED, OR ANY OF THE GUARANTEED OBLIGATIONS SHALL BE
AMENDED IN ANY RESPECT, OR ANY RIGHT UNDER THE LOAN DOCUMENTS OR ANY OTHER
AGREEMENT OR INSTRUMENT REFERRED TO HEREIN OR THEREIN SHALL BE AMENDED OR WAIVED
IN ANY RESPECT OR ANY OTHER GUARANTEE OF ANY OF THE GUARANTEED OBLIGATIONS OR
ANY SECURITY THEREFOR SHALL BE RELEASED OR EXCHANGED IN WHOLE OR IN PART OR
OTHERWISE DEALT WITH;

 

(H)                                 ANY LIEN OR SECURITY INTEREST GRANTED TO, OR
IN FAVOR OF, ISSUING BANK OR ANY LENDER OR AGENT AS SECURITY FOR ANY OF THE
GUARANTEED OBLIGATIONS SHALL FAIL TO BE PERFECTED;

 

(I)                                     THE RELEASE OF A BORROWER OR ANY OTHER
GUARANTOR; OR

 

(J)                                     ANY OTHER ACTION OR CIRCUMSTANCES THAT
MIGHT OTHERWISE CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OR DEFENSE OF A SURETY
OR GUARANTOR (OTHER THAN INDEFEASIBLE PAYMENT IN FULL IN CASH OF ALL OBLIGATIONS
AND THE TERMINATION OF ALL COMMITMENTS).

 

The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that any Secured Party
exhaust any right, power or remedy or proceed against a Borrower under this
Agreement or the Notes, if any, or any other agreement or instrument referred to
herein or therein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.  The Guarantors waive any and
all notice of the creation, renewal, extension, waiver, termination or accrual
of any of the Guaranteed Obligations and notice of or proof of reliance by any
Secured Party upon this Guarantee or acceptance of this Guarantee, and the
Guaranteed Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred in reliance upon this Guarantee, and all
dealings between Borrowers and the Secured Parties shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee.  This Guarantee shall be construed as a continuing, absolute,
irrevocable and unconditional guarantee of payment without regard to any right
of offset with respect to the Guaranteed Obligations at any time or from time to
time held by Secured Parties, and the obligations and liabilities of the
Guarantors hereunder shall not be conditioned or contingent upon the pursuit by
the Secured Parties or any other Person at any time of any right or remedy
against Borrowers or against any other Person which may be or become liable in
respect of all or any part of the Guaranteed Obligations or against any
collateral security or guarantee therefor or right of offset with respect
thereto.  This Guarantee shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon the Guarantors and the
successors and assigns thereof, and shall inure to the benefit of the Lenders,
and their respective successors and assigns, notwithstanding that from time to
time during the term of this Agreement there may be no Guaranteed Obligations
outstanding.

 

SECTION 7.03  REINSTATEMENT.  THE OBLIGATIONS OF THE GUARANTORS UNDER THIS
ARTICLE VII SHALL BE AUTOMATICALLY REINSTATED IF AND TO THE EXTENT THAT FOR ANY
REASON ANY PAYMENT BY OR ON BEHALF OF A BORROWER OR OTHER LOAN PARTY IN RESPECT
OF THE GUARANTEED OBLIGATIONS IS RESCINDED OR MUST BE OTHERWISE RESTORED BY ANY
HOLDER OF ANY OF THE GUARANTEED OBLIGATIONS, WHETHER AS A RESULT OF ANY
PROCEEDINGS IN BANKRUPTCY OR REORGANIZATION OR OTHERWISE.  THE GUARANTORS
JOINTLY AND SEVERALLY AGREE THAT THEY WILL INDEMNIFY EACH SECURED PARTY ON
DEMAND FOR ALL REASONABLE

 

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COSTS AND EXPENSES (INCLUDING REASONABLE FEES OF COUNSEL) INCURRED BY SUCH
SECURED PARTY IN CONNECTION WITH SUCH RESCISSION OR RESTORATION, INCLUDING ANY
SUCH COSTS AND EXPENSES INCURRED IN DEFENDING AGAINST ANY CLAIM ALLEGING THAT
SUCH PAYMENT CONSTITUTED A PREFERENCE, FRAUDULENT TRANSFER OR SIMILAR PAYMENT
UNDER ANY BANKRUPTCY, INSOLVENCY OR SIMILAR LAW, OTHER THAN ANY COSTS OR
EXPENSES RESULTING FROM THE BAD FAITH OR WILLFUL MISCONDUCT OF SUCH SECURED
PARTY.

 

SECTION 7.04  SUBROGATION; SUBORDINATION.  EACH GUARANTOR HEREBY AGREES THAT
UNTIL THE INDEFEASIBLE PAYMENT AND SATISFACTION IN FULL IN CASH OF ALL
GUARANTEED OBLIGATIONS AND THE EXPIRATION AND TERMINATION OF THE COMMITMENTS OF
THE LENDERS UNDER THIS AGREEMENT IT SHALL NOT EXERCISE ANY RIGHT OR REMEDY
ARISING BY REASON OF ANY PERFORMANCE BY IT OF ITS GUARANTEE IN SECTION 7.01,
WHETHER BY SUBROGATION OR OTHERWISE, AGAINST A BORROWER OR ANY OTHER GUARANTOR
OF ANY OF THE GUARANTEED OBLIGATIONS OR ANY SECURITY FOR ANY OF THE GUARANTEED
OBLIGATIONS.  THE PAYMENT OF ANY AMOUNTS DUE WITH RESPECT TO ANY INDEBTEDNESS OF
BORROWERS OR ANY OTHER GUARANTOR NOW OR HEREAFTER OWING TO ANY GUARANTOR OR
BORROWERS BY REASON OF ANY PAYMENT BY SUCH GUARANTOR UNDER THE GUARANTEE IN THIS
ARTICLE VII IS HEREBY SUBORDINATED TO THE PRIOR INDEFEASIBLE PAYMENT IN FULL IN
CASH OF THE GUARANTEED OBLIGATIONS.  IN ADDITION, ANY INDEBTEDNESS OF THE
GUARANTORS NOW OR HEREAFTER HELD BY ANY GUARANTOR IS HEREBY SUBORDINATED IN
RIGHT OF PAYMENT IN FULL IN CASH TO THE GUARANTEED OBLIGATIONS.  EACH GUARANTOR
AGREES THAT IT WILL NOT DEMAND, SUE FOR OR OTHERWISE ATTEMPT TO COLLECT ANY SUCH
INDEBTEDNESS OF BORROWERS TO SUCH GUARANTOR UNTIL THE OBLIGATIONS SHALL HAVE
BEEN INDEFEASIBLY PAID IN FULL IN CASH.  IF, NOTWITHSTANDING THE FOREGOING
SENTENCE, ANY GUARANTOR SHALL PRIOR TO THE INDEFEASIBLE PAYMENT IN FULL IN CASH
OF THE GUARANTEED OBLIGATIONS COLLECT, ENFORCE OR RECEIVE ANY AMOUNTS IN RESPECT
OF SUCH INDEBTEDNESS, SUCH AMOUNTS SHALL BE COLLECTED, ENFORCED AND RECEIVED BY
SUCH GUARANTOR AS TRUSTEE FOR THE SECURED PARTIES AND BE PAID OVER TO
ADMINISTRATIVE AGENT ON ACCOUNT OF THE GUARANTEED OBLIGATIONS WITHOUT AFFECTING
IN ANY MANNER THE LIABILITY OF SUCH GUARANTOR UNDER THE OTHER PROVISIONS OF THE
GUARANTY CONTAINED HEREIN.

 

SECTION 7.05  REMEDIES.  THE GUARANTORS JOINTLY AND SEVERALLY AGREE THAT, AS
BETWEEN THE GUARANTORS AND THE LENDERS, THE OBLIGATIONS OF BORROWERS UNDER THIS
AGREEMENT AND THE NOTES, IF ANY, MAY BE DECLARED TO BE FORTHWITH DUE AND PAYABLE
AS PROVIDED IN ARTICLE XI (AND SHALL BE DEEMED TO HAVE BECOME AUTOMATICALLY DUE
AND PAYABLE IN THE CIRCUMSTANCES PROVIDED IN SAID ARTICLE XI) FOR PURPOSES OF
SECTION 7.01, NOTWITHSTANDING ANY STAY, INJUNCTION OR OTHER PROHIBITION
PREVENTING SUCH DECLARATION (OR SUCH OBLIGATIONS FROM BECOMING AUTOMATICALLY DUE
AND PAYABLE) AS AGAINST BORROWERS AND THAT, IN THE EVENT OF SUCH DECLARATION (OR
SUCH OBLIGATIONS BEING DEEMED TO HAVE BECOME AUTOMATICALLY DUE AND PAYABLE),
SUCH OBLIGATIONS (WHETHER OR NOT DUE AND PAYABLE BY BORROWERS) SHALL FORTHWITH
BECOME DUE AND PAYABLE BY THE GUARANTORS FOR PURPOSES OF SECTION 7.01.

 

SECTION 7.06  INSTRUMENT FOR THE PAYMENT OF MONEY.  EACH GUARANTOR HEREBY
ACKNOWLEDGES THAT THE GUARANTEE IN THIS ARTICLE VII CONSTITUTES AN INSTRUMENT
FOR THE PAYMENT OF MONEY, AND CONSENTS AND AGREES THAT ANY LENDER OR AGENT, AT
ITS SOLE OPTION, IN THE EVENT OF A DISPUTE BY SUCH GUARANTOR IN THE PAYMENT OF
ANY MONEYS DUE HEREUNDER, SHALL HAVE THE RIGHT TO BRING A MOTION-ACTION UNDER
NEW YORK CPLR SECTION 3213.

 

SECTION 7.07  CONTINUING GUARANTEE.  THE GUARANTEE IN THIS ARTICLE VII IS A
CONTINUING GUARANTEE OF PAYMENT, AND SHALL APPLY TO ALL GUARANTEED OBLIGATIONS
WHENEVER ARISING.

 

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SECTION 7.08  GENERAL LIMITATION ON GUARANTEE OBLIGATIONS.  IN ANY ACTION OR
PROCEEDING INVOLVING ANY STATE CORPORATE LAW, OR ANY STATE, FEDERAL OR FOREIGN
BANKRUPTCY, INSOLVENCY, REORGANIZATION OR OTHER LAW AFFECTING THE RIGHTS OF
CREDITORS GENERALLY, IF THE OBLIGATIONS OF ANY GUARANTOR UNDER SECTION 7.01
WOULD OTHERWISE BE HELD OR DETERMINED TO BE VOID, VOIDABLE, INVALID OR
UNENFORCEABLE, OR SUBORDINATED TO THE CLAIMS OF ANY OTHER CREDITORS, ON ACCOUNT
OF THE AMOUNT OF ITS LIABILITY UNDER SECTION 7.01, THEN, NOTWITHSTANDING ANY
OTHER PROVISION TO THE CONTRARY, THE AMOUNT OF SUCH LIABILITY SHALL, WITHOUT ANY
FURTHER ACTION BY SUCH GUARANTOR, ANY LOAN PARTY OR ANY OTHER PERSON, BE
AUTOMATICALLY LIMITED AND REDUCED TO THE HIGHEST AMOUNT THAT IS VALID AND
ENFORCEABLE AND NOT SUBORDINATED TO THE CLAIMS OF OTHER CREDITORS AS DETERMINED
IN SUCH ACTION OR PROCEEDING.

 

ARTICLE VIII.
 
EVENTS OF DEFAULT

 

In case of the happening of any of the following events (“Events of Default”):

 

(A)                                  DEFAULT SHALL BE MADE IN THE PAYMENT OF ANY
PRINCIPAL OF ANY LOAN OR THE REIMBURSEMENT WITH RESPECT TO ANY LC DISBURSEMENT
WHEN AND AS THE SAME SHALL BECOME DUE AND PAYABLE, WHETHER AT THE DUE DATE
THEREOF OR AT A DATE FIXED FOR PREPAYMENT THEREOF OR BY ACCELERATION THEREOF OR
OTHERWISE;

 

(B)                                 DEFAULT SHALL BE MADE IN THE PAYMENT OF ANY
INTEREST ON ANY LOAN OR ANY FEE OR ANY OTHER AMOUNT (OTHER THAN AN AMOUNT
REFERRED TO IN (A) ABOVE) DUE UNDER ANY LOAN DOCUMENT, WHEN AND AS THE SAME
SHALL BECOME DUE AND PAYABLE, AND SUCH DEFAULT SHALL CONTINUE UNREMEDIED FOR A
PERIOD OF THREE (3) BUSINESS DAYS;

 

(C)                                  ANY REPRESENTATION OR WARRANTY MADE OR
DEEMED MADE IN OR IN CONNECTION WITH ANY LOAN DOCUMENT OR THE BORROWINGS OR
ISSUANCES OF LETTERS OF CREDIT HEREUNDER, OR ANY REPRESENTATION, WARRANTY,
STATEMENT OR INFORMATION CONTAINED IN ANY REPORT, CERTIFICATE, FINANCIAL
STATEMENT OR OTHER INSTRUMENT FURNISHED IN CONNECTION WITH OR PURSUANT TO ANY
LOAN DOCUMENT, SHALL PROVE TO HAVE BEEN FALSE OR MISLEADING IN ANY MATERIAL
RESPECT WHEN SO MADE, DEEMED MADE OR FURNISHED; IT BEING RECOGNIZED BY LENDERS,
HOWEVER, THAT PROJECTIONS AS TO FUTURE EVENTS ARE NOT TO BE VIEWED AS FACTS AND
THAT THE ACTUAL RESULTS DURING THE PERIOD OR PERIODS COVERED BY SAID PROJECTIONS
MAY DIFFER FROM THE PROJECTED RESULTS;

 

(D)                                 (I) DEFAULT SHALL BE MADE IN THE DUE
OBSERVANCE OR PERFORMANCE BY ANY COMPANY OF ANY COVENANT, CONDITION OR AGREEMENT
CONTAINED IN SECTION 5.02, 5.03(A) OR 5.08 OR IN ARTICLE VI OR (II) DEFAULT
SHALL BE MADE IN THE DUE OBSERVANCE OR PERFORMANCE BY ANY COMPANY OF ANY
COVENANT, CONDITION OR AGREEMENT CONTAINED IN SECTION 5.07, 5.14 OR 5.15 AND
SUCH DEFAULT SHALL CONTINUE UNREMEDIED OR SHALL NOT BE WAIVED FOR A PERIOD OF 5
BUSINESS DAYS;

 

(E)                                  DEFAULT SHALL BE MADE IN THE DUE OBSERVANCE
OR PERFORMANCE BY ANY COMPANY OF ANY COVENANT, CONDITION OR AGREEMENT CONTAINED
IN ANY LOAN DOCUMENT (OTHER THAN THOSE SPECIFIED IN (A), (B) OR (D) ABOVE) AND
SUCH DEFAULT SHALL CONTINUE

 

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UNREMEDIED OR SHALL NOT BE WAIVED FOR A PERIOD OF 20 DAYS AFTER WRITTEN NOTICE
THEREOF FROM THE ADMINISTRATIVE AGENT OR ANY LENDER TO BORROWERS;

 

(F)                                    AN “EVENT OF DEFAULT” UNDER, AND AS
DEFINED IN THE TERM LOAN CREDIT AGREEMENT, SHALL OCCUR OR ANY COMPANY SHALL
(I) FAIL TO PAY ANY PRINCIPAL OR INTEREST, REGARDLESS OF AMOUNT, DUE IN RESPECT
OF ANY INDEBTEDNESS (OTHER THAN THE OBLIGATIONS), WHEN AND AS THE SAME SHALL
BECOME DUE AND PAYABLE, OR (II) FAIL TO OBSERVE OR PERFORM ANY OTHER TERM,
COVENANT, CONDITION OR AGREEMENT CONTAINED IN ANY AGREEMENT OR INSTRUMENT
EVIDENCING OR GOVERNING ANY SUCH INDEBTEDNESS IF THE EFFECT OF ANY FAILURE
REFERRED TO IN CLAUSES (I) AND (II) IS TO CAUSE, OR TO PERMIT THE HOLDER OR
HOLDERS OF SUCH INDEBTEDNESS OR A TRUSTEE ON ITS OR THEIR BEHALF (WITH OR
WITHOUT THE GIVING OF NOTICE, THE LAPSE OF TIME OR BOTH) TO CAUSE, SUCH
INDEBTEDNESS TO BECOME DUE PRIOR TO ITS STATED MATURITY OR BECOME SUBJECT TO A
MANDATORY OFFER TO PURCHASE BY THE OBLIGOR; PROVIDED THAT IT SHALL NOT
CONSTITUTE AN EVENT OF DEFAULT PURSUANT TO THIS PARAGRAPH (F) UNLESS THE
AGGREGATE AMOUNT OF ALL SUCH INDEBTEDNESS REFERRED TO IN CLAUSES (I) AND
(II) EXCEEDS $2.5 MILLION AT ANY ONE TIME;

 

(G)                                 AN INVOLUNTARY PROCEEDING SHALL BE COMMENCED
OR AN INVOLUNTARY PETITION SHALL BE FILED IN A COURT OF COMPETENT JURISDICTION
SEEKING (I) RELIEF IN RESPECT OF ANY COMPANY, OR OF A SUBSTANTIAL PART OF THE
PROPERTY OR ASSETS OF ANY COMPANY, UNDER TITLE 11 OF THE UNITED STATES CODE, AS
NOW CONSTITUTED OR HEREAFTER AMENDED, OR ANY OTHER FEDERAL, STATE OR FOREIGN
BANKRUPTCY, INSOLVENCY, RECEIVERSHIP OR SIMILAR LAW; (II) THE APPOINTMENT OF A
RECEIVER, TRUSTEE, CUSTODIAN, SEQUESTRATOR, CONSERVATOR OR SIMILAR OFFICIAL FOR
ANY COMPANY OR FOR A SUBSTANTIAL PART OF THE PROPERTY OR ASSETS OF ANY COMPANY;
OR (III) THE WINDING-UP OR LIQUIDATION OF ANY COMPANY; AND, IN ANY SUCH CASE,
SUCH PROCEEDING OR PETITION SHALL CONTINUE UNDISMISSED FOR 60 DAYS OR AN ORDER
OR DECREE APPROVING OR ORDERING ANY OF THE FOREGOING SHALL BE ENTERED;

 

(H)                                 ANY COMPANY SHALL (I) VOLUNTARILY COMMENCE
ANY PROCEEDING OR FILE ANY PETITION SEEKING RELIEF UNDER TITLE 11 OF THE UNITED
STATES CODE, AS NOW CONSTITUTED OR HEREAFTER AMENDED, OR ANY OTHER FEDERAL,
STATE OR FOREIGN BANKRUPTCY, INSOLVENCY, RECEIVERSHIP OR SIMILAR LAW;
(II) CONSENT TO THE INSTITUTION OF, OR FAIL TO CONTEST IN A TIMELY AND
APPROPRIATE MANNER, ANY PROCEEDING OR THE FILING OF ANY PETITION DESCRIBED IN
(G) ABOVE; (III) APPLY FOR OR CONSENT TO THE APPOINTMENT OF A RECEIVER, TRUSTEE,
CUSTODIAN, SEQUESTRATOR, CONSERVATOR OR SIMILAR OFFICIAL FOR ANY COMPANY OR FOR
A SUBSTANTIAL PART OF THE PROPERTY OR ASSETS OF ANY COMPANY; (IV) FILE AN ANSWER
ADMITTING THE MATERIAL ALLEGATIONS OF A PETITION FILED AGAINST IT IN ANY SUCH
PROCEEDING; (V) MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS;
(VI) BECOME UNABLE (AFTER TAKING INTO ACCOUNT ALL RIGHTS OF CONTRIBUTION), ADMIT
IN WRITING ITS INABILITY OR FAIL GENERALLY TO PAY ITS DEBTS AS THEY BECOME DUE;
(VII) TAKE ANY ACTION FOR THE PURPOSE OF EFFECTING ANY OF THE FOREGOING; OR
(VIII) WIND UP OR LIQUIDATE, EXCEPT AS EXPRESSLY ALLOWED UNDER SECTION 6.05(I);

 

(I)                                     ONE OR MORE JUDGMENTS FOR THE PAYMENT OF
MONEY IN AN AGGREGATE AMOUNT IN EXCESS OF $2.5 MILLION SHALL BE RENDERED AGAINST
ANY COMPANY OR ANY COMBINATION THEREOF AND THE SAME SHALL REMAIN UNDISCHARGED
FOR A PERIOD OF 30 CONSECUTIVE DAYS DURING WHICH EXECUTION SHALL NOT BE
EFFECTIVELY STAYED, OR ANY ACTION SHALL BE LEGALLY

 

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TAKEN BY A JUDGMENT CREDITOR TO LEVY UPON ASSETS OR PROPERTIES OF ANY COMPANY TO
ENFORCE ANY SUCH JUDGMENT;

 

(J)                                     AN ERISA EVENT SHALL HAVE OCCURRED THAT,
IN THE OPINION OF THE REQUIRED LENDERS, WHEN TAKEN TOGETHER WITH ALL OTHER SUCH
ERISA EVENTS THAT HAVE OCCURRED, COULD REASONABLY BE EXPECTED TO RESULT IN
LIABILITY OF ANY COMPANY AND ITS ERISA AFFILIATES IN AN AGGREGATE AMOUNT
EXCEEDING $2.5 MILLION OR THE IMPOSITION OF A LIEN ON ANY ASSETS OF A COMPANY;

 

(K)                                  ANY SECURITY INTEREST AND LIEN PURPORTED TO
BE CREATED BY ANY SECURITY DOCUMENT SHALL CEASE TO BE IN FULL FORCE AND EFFECT,
OR SHALL CEASE TO GIVE THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE SECURED
PARTIES, THE LIENS, RIGHTS, POWERS AND PRIVILEGES PURPORTED TO BE CREATED AND
GRANTED UNDER SUCH SECURITY DOCUMENTS (INCLUDING A PERFECTED FIRST PRIORITY
SECURITY INTEREST IN AND LIEN ON, ALL OF THE COLLATERAL THEREUNDER (EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN SUCH SECURITY DOCUMENT)) IN FAVOR OF THE
ADMINISTRATIVE AGENT, OR SHALL BE ASSERTED BY A BORROWER OR ANY OTHER LOAN PARTY
NOT TO BE, A VALID, PERFECTED, FIRST PRIORITY (EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS AGREEMENT OR SUCH SECURITY DOCUMENT) SECURITY INTEREST IN OR
LIEN ON THE COLLATERAL COVERED THEREBY;

 

(L)                                     THE GUARANTEES SHALL CEASE TO BE IN FULL
FORCE AND EFFECT, UNLESS IN CONNECTION WITH THE SALE, MERGER OR DISSOLUTION OF A
GUARANTOR TO THE EXTENT PERMITTED UNDER SECTION 6.05 HEREOF;

 

(M)                               ANY LOAN DOCUMENT OR ANY MATERIAL PROVISIONS
THEREOF SHALL AT ANY TIME AND FOR ANY REASON BE DECLARED BY A COURT OF COMPETENT
JURISDICTION TO BE NULL AND VOID, OR A PROCEEDING SHALL BE COMMENCED BY ANY LOAN
PARTY OR ANY OTHER PERSON, OR BY ANY GOVERNMENTAL AUTHORITY, SEEKING TO
ESTABLISH THE INVALIDITY OR UNENFORCEABILITY THEREOF (EXCLUSIVE OF QUESTIONS OF
INTERPRETATION OF ANY PROVISION THEREOF), OR ANY LOAN PARTY SHALL REPUDIATE OR
DENY THAT IT HAS ANY LIABILITY OR OBLIGATION FOR THE PAYMENT OF PRINCIPAL OR
INTEREST OR OTHER OBLIGATIONS PURPORTED TO BE CREATED UNDER ANY LOAN DOCUMENT;

 

(N)                                 THERE SHALL HAVE OCCURRED A CHANGE IN
CONTROL;

 

(O)                                 ANY LOAN PARTY SHALL BE PROHIBITED OR
OTHERWISE RESTRAINED FROM CONDUCTING THE BUSINESS THERETOFORE CONDUCTED BY IT IN
ANY MANNER THAT HAS OR COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL
ADVERSE EFFECT BY VIRTUE OF ANY DETERMINATION, RULING, DECISION, DECREE OR ORDER
OF ANY COURT OR GOVERNMENTAL AUTHORITY OF COMPETENT JURISDICTION; OR

 

(P)                                 THE INDICTMENT BY ANY GOVERNMENTAL AUTHORITY
OF ANY LOAN PARTY AS TO WHICH ANY LOAN PARTY OR ADMINISTRATIVE AGENT RECEIVES
NOTICE AS TO WHICH THERE IS A REASONABLE POSSIBILITY OF AN ADVERSE
DETERMINATION, IN THE GOOD FAITH DETERMINATION OF ADMINISTRATIVE AGENT, UNDER
ANY CRIMINAL STATUTE, OR COMMENCEMENT OF CRIMINAL OR CIVIL PROCEEDINGS AGAINST
ANY LOAN PARTY PURSUANT TO WHICH STATUTE OR PROCEEDINGS THE PENALTIES OR
REMEDIES SOUGHT OR AVAILABLE INCLUDE FORFEITURE OF (I) ANY OF THE COLLATERAL
HAVING A

 

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VALUE IN EXCESS OF $1.0 MILLION OR (II) ANY OTHER PROPERTY OF ANY LOAN PARTY
WHICH IS NECESSARY OR MATERIAL TO THE CONDUCT OF ITS BUSINESS;

 

then, and in every such event (other than an event with respect to Holdings or
Borrowers described in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to Borrowers, take either or
both of the following actions, at the same or different times:  (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of Borrowers accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by Borrowers and the Guarantors,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to Holdings or Borrowers
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of
Borrowers accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by
Borrowers and the Guarantors, anything contained herein or in any other Loan
Document to the contrary notwithstanding.

 

ARTICLE IX.
 
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS

 

SECTION 9.01  COLLATERAL ACCOUNT.

 

(I)                                     THE ADMINISTRATIVE AGENT IS HEREBY
AUTHORIZED TO ESTABLISH AND MAINTAIN AT ONE OF ITS OFFICES IN THE NAME OF THE
ADMINISTRATIVE AGENT AND PURSUANT TO A DEPOSIT ACCOUNT CONTROL AGREEMENT, ONE
RESTRICTED DEPOSIT ACCOUNT DESIGNATED “BORROWER LC COLLATERAL ACCOUNT”.  EACH
LOAN PARTY SHALL DEPOSIT INTO THE LC COLLATERAL ACCOUNT FROM TIME TO TIME THE
CASH COLLATERAL REQUIRED TO BE DEPOSITED UNDER SECTION 2.18(J) HEREOF.

 

(II)                                  THE BALANCE FROM TIME TO TIME IN SUCH LC
COLLATERAL ACCOUNT SHALL CONSTITUTE PART OF THE COLLATERAL AND SHALL NOT
CONSTITUTE PAYMENT OF THE OBLIGATIONS UNTIL APPLIED AS HEREINAFTER PROVIDED. 
NOTWITHSTANDING ANY OTHER PROVISION HEREOF TO THE CONTRARY, ALL AMOUNTS HELD IN
THE LC COLLATERAL ACCOUNT SHALL CONSTITUTE COLLATERAL SECURITY FIRST FOR THE
LIABILITIES IN RESPECT OF LETTERS OF CREDIT OUTSTANDING FROM TIME TO TIME AND
SECOND FOR THE OTHER OBLIGATIONS HEREUNDER UNTIL SUCH TIME AS ALL LETTERS OF
CREDIT SHALL HAVE BEEN TERMINATED AND ALL OF THE LIABILITIES IN RESPECT OF
LETTERS OF CREDIT HAVE BEEN PAID IN FULL.

 

SECTION 9.02  APPLICATION OF PROCEEDS.  SUBJECT TO THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT, THE PROCEEDS RECEIVED BY THE ADMINISTRATIVE AGENT IN
RESPECT OF ANY SALE OF, COLLECTION FROM OR OTHER REALIZATION UPON ALL OR ANY
PART OF THE COLLATERAL PURSUANT TO THE EXERCISE BY THE ADMINISTRATIVE AGENT OF
ITS REMEDIES SHALL BE APPLIED, TOGETHER WITH ANY OTHER SUMS THEN

 

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HELD BY THE ADMINISTRATIVE AGENT PURSUANT TO THIS AGREEMENT, PROMPTLY BY THE
ADMINISTRATIVE AGENT AS FOLLOWS:

 

(A)                                  FIRST, TO THE PAYMENT OF THE REASONABLE
COSTS AND EXPENSES, FEES, COMMISSIONS AND TAXES OF SUCH SALE, COLLECTION OR
OTHER REALIZATION INCURRED OR DUE TO THE ADMINISTRATIVE AGENT, THE COLLATERAL
AGENT AND THEIR AGENTS AND COUNSEL, AND ALL EXPENSES, LIABILITIES AND ADVANCES
MADE OR INCURRED BY THE ADMINISTRATIVE AGENT IN CONNECTION THEREWITH, TOGETHER
WITH INTEREST ON EACH SUCH AMOUNT AT THE HIGHEST RATE THEN IN EFFECT UNDER THIS
AGREEMENT FROM AND AFTER THE DATE SUCH AMOUNT IS DUE, OWING OR UNPAID UNTIL PAID
IN FULL;

 

(B)                                 SECOND, TO THE PAYMENT OF ALL OTHER
REASONABLE COSTS AND EXPENSES OF SUCH SALE, COLLECTION OR OTHER REALIZATION
INCLUDING, WITHOUT LIMITATION, COSTS AND EXPENSES AND ALL COSTS, LIABILITIES AND
ADVANCES MADE OR INCURRED BY THE OTHER SECURED PARTIES IN CONNECTION THEREWITH,
TOGETHER WITH INTEREST ON EACH SUCH AMOUNT AT THE HIGHEST RATE THEN IN EFFECT
UNDER THIS AGREEMENT FROM AND AFTER THE DATE SUCH AMOUNT IS DUE, OWING OR UNPAID
UNTIL PAID IN FULL;

 

(C)                                  THIRD, WITHOUT DUPLICATION OF AMOUNTS
APPLIED PURSUANT TO CLAUSES (A) AND (B) ABOVE, TO THE INDEFEASIBLE PAYMENT IN
FULL IN CASH, OF ALL OBLIGATIONS CONSTITUTING ACCRUED INTEREST OR FEES, PAYABLE
TO THE LENDERS HEREUNDER, EQUALLY AND RATABLY AS SET FORTH BELOW;

 

(D)                                 FOURTH, WITHOUT DUPLICATION OF AMOUNTS
APPLIED PURSUANT TO CLAUSES (A) AND (B) ABOVE, TO THE INDEFEASIBLE PAYMENT IN
FULL IN CASH OF THE OUTSTANDING PRINCIPAL AMOUNT OF THE SWINGLINE LOANS;

 

(E)                                  FIFTH, WITHOUT DUPLICATION OF AMOUNTS
APPLIED PURSUANT TO CLAUSES (A) AND (B) ABOVE, TO THE INDEFEASIBLE PAYMENT IN
FULL IN CASH, OF ALL OBLIGATIONS CONSTITUTING PRINCIPAL OF THE REVOLVING LOANS;

 

(F)                                    SIXTH, WITHOUT DUPLICATION OF AMOUNTS
APPLIED PURSUANT TO CLAUSES (A) AND (B), TO THE CASH COLLATERALIZATION OF THE
OUTSTANDING LETTERS OF CREDIT OBLIGATIONS;

 

(G)                                 SEVENTH, TO THE INDEFEASIBLE PAYMENT IN FULL
IN CASH OF ANY OBLIGATIONS DUE TO ANY LENDER UNDER A LENDER HEDGING AGREEMENT
PERMITTED BY THIS AGREEMENT;

 

(H)                                 EIGHTH, TO THE PAYMENT OF ALL OTHER
OBLIGATIONS; AND

 

(I)                                     NINTH, THE BALANCE, IF ANY, TO THE
PERSON LAWFULLY ENTITLED THERETO (INCLUDING THE APPLICABLE LOAN PARTY OR ITS
SUCCESSORS OR ASSIGNS).

 

In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) except for payments on Swing Loans, each of the Lenders
shall receive an amount equal to its pro rata share (based on the proportion
that its then outstanding Revolving Loans, Letters of Credit Obligations and
obligations outstanding under the Lender Hedging Agreements permitted by this
Agreement bears to the aggregate then outstanding Revolving Loans, Letters of
Credit Obligations, and

 

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obligations outstanding under the Lender Hedging Agreements) of amounts
available to be applied pursuant to clauses “Third”, “Fourth” “Fifth” and
“Sixth” above

 

ARTICLE X.
 
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

 

SECTION 10.01  APPOINTMENT.  (A)  EACH LENDER HEREBY IRREVOCABLY DESIGNATES AND
APPOINTS THE ADMINISTRATIVE AGENT AS THE AGENT OF SUCH LENDER UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND EACH LENDER IRREVOCABLY AUTHORIZES
THE ADMINISTRATIVE AGENT, IN SUCH CAPACITY, TO TAKE SUCH ACTIONS ON ITS BEHALF
UNDER THE PROVISIONS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND TO
EXERCISE SUCH POWERS AS ARE EXPRESSLY DELEGATED TO THE ADMINISTRATIVE AGENT BY
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, TOGETHER WITH SUCH
ACTIONS AND POWERS AS ARE REASONABLY INCIDENTAL THERETO.

 

(B)                                 EACH LENDER HEREBY IRREVOCABLY DESIGNATES
AND APPOINTS THE COLLATERAL AGENT AS THE AGENT OF SUCH LENDER UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND EACH LENDER IRREVOCABLY AUTHORIZES
THE COLLATERAL AGENT, IN SUCH CAPACITY, TO TAKE SUCH ACTIONS ON ITS BEHALF UNDER
THE PROVISIONS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND TO EXERCISE
SUCH POWERS AS ARE EXPRESSLY DELEGATED TO THE COLLATERAL AGENT BY THE TERMS OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, TOGETHER WITH SUCH ACTIONS AND
POWERS AS ARE REASONABLY INCIDENTAL THERETO.

 

SECTION 10.02  ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT IN THEIR INDIVIDUAL
CAPACITIES.  EACH PERSON SERVING AS THE ADMINISTRATIVE AGENT OR THE COLLATERAL
AGENT HEREUNDER SHALL HAVE THE SAME RIGHTS AND POWERS IN ITS CAPACITY AS A
LENDER AS ANY OTHER LENDER AND MAY EXERCISE THE SAME AS THOUGH IT WERE NOT THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, AS APPLICABLE, AND SUCH PERSON AND
ITS AFFILIATES MAY ACCEPT DEPOSITS FROM, LEND MONEY TO, ACT AS THE FINANCIAL
ADVISOR OR IN ANY OTHER ADVISORY CAPACITY FOR, AND GENERALLY ENGAGE IN ANY KIND
OF BUSINESS WITH, A BORROWER OR ANY SUBSIDIARY OR OTHER AFFILIATE THEREOF AS IF
IT WERE NOT THE ADMINISTRATIVE AGENT HEREUNDER OR COLLATERAL AGENT, AS
APPLICABLE, AND WITHOUT ANY DUTY TO ACCOUNT THEREFOR TO THE LENDERS.  THE
LENDERS HEREBY ACKNOWLEDGE THAT THE ADMINISTRATIVE AGENT IS ALSO ACTING AS THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT UNDER THE TERM LOAN DOCUMENTS.

 

SECTION 10.03  EXCULPATORY PROVISIONS.  NEITHER THE ADMINISTRATIVE AGENT NOR THE
COLLATERAL AGENT SHALL HAVE ANY DUTIES OR OBLIGATIONS EXCEPT THOSE EXPRESSLY SET
FORTH IN THE LOAN DOCUMENTS.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
(A) THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT, SHALL NOT BE SUBJECT TO
ANY FIDUCIARY OR OTHER IMPLIED DUTIES, REGARDLESS OF WHETHER A DEFAULT HAS
OCCURRED AND IS CONTINUING, (B) THE ADMINISTRATIVE AGENT AND THE COLLATERAL
AGENT SHALL NOT HAVE ANY DUTY TO TAKE ANY DISCRETIONARY ACTION OR EXERCISE ANY
DISCRETIONARY POWERS, EXCEPT DISCRETIONARY RIGHTS AND POWERS EXPRESSLY
CONTEMPLATED BY THE LOAN DOCUMENTS THAT THE ADMINISTRATIVE AGENT OR THE
COLLATERAL AGENT, AS APPLICABLE, IS REQUIRED TO EXERCISE IN WRITING BY THE
REQUIRED LENDERS (OR SUCH OTHER NUMBER OR PERCENTAGE OF THE LENDERS AS SHALL BE
NECESSARY UNDER THE CIRCUMSTANCES AS PROVIDED IN SECTION 11.02); PROVIDED, THAT,
NEITHER THE ADMINISTRATIVE AGENT NOR THE COLLATERAL AGENT SHALL BE REQUIRED TO
TAKE ANY ACTION THAT, IN ITS JUDGMENT OR THE JUDGMENT OF ITS COUNSEL, MAY EXPOSE
SUCH AGENT TO LIABILITY OR THAT IS

 

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CONTRARY TO ANY LOAN DOCUMENT OR APPLICABLE REQUIREMENTS OF LAW, AND (C) EXCEPT
AS EXPRESSLY SET FORTH IN THE LOAN DOCUMENTS, THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT SHALL NOT HAVE ANY DUTY TO DISCLOSE, AND SHALL NOT BE LIABLE
FOR THE FAILURE TO DISCLOSE, ANY INFORMATION RELATING TO BORROWERS OR ANY OF
THEIR AFFILIATES THAT IS COMMUNICATED TO OR OBTAINED BY THE BANK SERVING AS
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, AS APPLICABLE, OR ANY OF ITS
RESPECTIVE AFFILIATES IN ANY CAPACITY.  THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT SHALL NOT BE LIABLE FOR ANY ACTION TAKEN OR NOT TAKEN BY IT
WITH THE CONSENT OR AT THE REQUEST OF THE REQUIRED LENDERS (OR SUCH OTHER NUMBER
OR PERCENTAGE OF THE LENDERS AS SHALL BE NECESSARY, OR AS SUCH AGENT SHALL
BELIEVE IN GOOD FAITH SHALL BE NECESSARY, UNDER THE CIRCUMSTANCES AS PROVIDED IN
SECTION 11.02) OR IN THE ABSENCE OF ITS OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.  THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT SHALL NOT BE
DEEMED TO HAVE KNOWLEDGE OF ANY DEFAULT UNLESS AND UNTIL WRITTEN NOTICE THEREOF
IS GIVEN TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT BY BORROWERS OR A
LENDER, AND THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT SHALL NOT BE
RESPONSIBLE FOR OR HAVE ANY DUTY TO ASCERTAIN OR INQUIRE INTO (I) ANY STATEMENT,
WARRANTY OR REPRESENTATION MADE IN OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, (II) THE CONTENTS OF ANY CERTIFICATE, REPORT OR OTHER
DOCUMENT DELIVERED HEREUNDER OR THEREUNDER OR IN CONNECTION HEREWITH OR
THEREWITH, (III) THE PERFORMANCE OR OBSERVANCE OF ANY OF THE COVENANTS,
AGREEMENTS OR OTHER TERMS OR CONDITIONS SET FORTH HEREIN OR THEREIN OR THE
OCCURRENCE OF ANY DEFAULT, (IV) THE VALIDITY, ENFORCEABILITY, EFFECTIVENESS OR
GENUINENESS OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER AGREEMENT,
INSTRUMENT OR DOCUMENT, OR (V) THE SATISFACTION OF ANY CONDITION SET FORTH IN
ARTICLE IV OR ELSEWHERE IN ANY LOAN DOCUMENT, OTHER THAN TO CONFIRM RECEIPT OF
ITEMS EXPRESSLY REQUIRED TO BE DELIVERED TO THE ADMINISTRATIVE AGENT OR THE
COLLATERAL AGENT, AS APPLICABLE.  WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE USE OF THE TERM “AGENT” IN THIS AGREEMENT WITH REFERENCE TO THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT IS NOT INTENDED TO CONNOTE ANY
FIDUCIARY OR OTHER IMPLIED (OR EXPRESS) OBLIGATIONS ARISING UNDER AGENCY
DOCTRINE OF ANY APPLICABLE LAW.  INSTEAD, SUCH TERM US USED MERELY AS A MATTER
OF MARKET CUSTOM AND IS INTENDED TO CREATE OR REFLECT ONLY AN ADMINISTRATIVE
RELATIONSHIP BETWEEN INDEPENDENT CONTRACTING PARTIES.

 

SECTION 10.04  RELIANCE BY AGENTS.  THE AGENTS SHALL BE ENTITLED TO RELY UPON,
AND SHALL NOT INCUR ANY LIABILITY FOR RELYING UPON, ANY NOTICE, REQUEST,
CERTIFICATE, CONSENT, STATEMENT, INSTRUMENT, DOCUMENT OR OTHER WRITING
(INCLUDING ANY ELECTRONIC MESSAGE, INTERNET OR INTRANET WEBSITE POSTING OR OTHER
DISTRIBUTION) BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN SIGNED, SENT OR
OTHERWISE AUTHENTICATED BY THE PROPER PERSON.  THE AGENTS ALSO MAY RELY UPON ANY
STATEMENT MADE TO IT ORALLY OR BY TELEPHONE AND BELIEVED BY IT TO HAVE BEEN MADE
BY THE PROPER PERSON, AND SHALL NOT INCUR ANY LIABILITY FOR RELYING THEREON.  IN
DETERMINING COMPLIANCE WITH ANY CONDITION HEREUNDER TO THE MAKING OF A LOAN OR
OTHER CREDIT EXTENSION, THAT BY ITS TERMS MUST BE FULFILLED TO THE SATISFACTION
OF A LENDER, THE ADMINISTRATIVE AGENT MAY PRESUME THAT SUCH CONDITION IS
SATISFACTORY TO SUCH LENDER UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
NOTICE TO THE CONTRARY FROM SUCH LENDER PRIOR TO THE MAKING OF SUCH LOAN OR
OTHER CREDIT EXTENSION.  THE AGENTS MAY CONSULT WITH LEGAL COUNSEL (WHO MAY BE
COUNSEL FOR BORROWERS), INDEPENDENT ACCOUNTANTS AND OTHER EXPERTS SELECTED BY
IT, AND SHALL NOT BE LIABLE FOR ANY ACTION TAKEN OR NOT TAKEN BY IT IN
ACCORDANCE WITH THE ADVICE OF ANY SUCH COUNSEL, ACCOUNTANTS OR EXPERTS.

 

SECTION 10.05  DELEGATION OF DUTIES.  EACH OF THE ADMINISTRATIVE AGENT AND THE
COLLATERAL AGENT MAY PERFORM ANY AND ALL OF ITS DUTIES AND EXERCISE ITS RIGHTS
AND POWERS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT BY OR THROUGH ANY ONE OR
MORE SUB-AGENTS

 

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APPOINTED BY THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, AS APPLICABLE. 
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT AND ANY SUCH RESPECTIVE
SUB-AGENT MAY PERFORM ANY AND ALL OF ITS DUTIES AND EXERCISE ITS RIGHTS AND
POWERS BY OR THROUGH THEIR RESPECTIVE RELATED PARTIES.  THE EXCULPATORY
PROVISIONS OF THIS ARTICLE SHALL APPLY TO ANY SUCH SUB-AGENT AND TO THE RELATED
PARTIES OF EACH OF THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT AND ANY
SUCH SUB-AGENT, AND SHALL APPLY TO THEIR RESPECTIVE ACTIVITIES IN CONNECTION
WITH THE SYNDICATION OF THE CREDIT FACILITIES PROVIDED FOR HEREIN AS WELL AS
ACTIVITIES OF THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT.

 

SECTION 10.06  SUCCESSOR ADMINISTRATIVE AGENT.  THE ADMINISTRATIVE AGENT AND/OR
COLLATERAL AGENT MAY RESIGN AS SUCH AT ANY TIME UPON AT LEAST 30 DAYS’ PRIOR
NOTICE TO THE LENDERS, THE ISSUING BANK AND BORROWERS.  UPON ANY SUCH
RESIGNATION, THE REQUIRED LENDERS SHALL HAVE THE RIGHT, IN CONSULTATION WITH
BORROWERS, TO APPOINT A SUCCESSOR FROM AMONG THE LENDERS.  IF NO SUCCESSOR SHALL
HAVE BEEN SO APPOINTED BY THE REQUIRED LENDERS AND SHALL HAVE ACCEPTED SUCH
APPOINTMENT WITHIN 30 DAYS AFTER THE RETIRING ADMINISTRATIVE AGENT AND/OR
COLLATERAL AGENT, AS APPLICABLE, GIVES NOTICE OF ITS RESIGNATION, THEN THE
RETIRING ADMINISTRATIVE AGENT AND/OR COLLATERAL AGENT, AS APPLICABLE MAY, ON
BEHALF OF THE LENDERS AND THE ISSUING BANK, APPOINT A SUCCESSOR ADMINISTRATIVE
AGENT AND/OR COLLATERAL AGENT, AS APPLICABLE, WHICH SUCCESSOR SHALL BE A
COMMERCIAL BANKING INSTITUTION ORGANIZED UNDER THE LAWS OF THE UNITED STATES (OR
ANY STATE THEREOF) OR A UNITED STATES BRANCH OR AGENCY OF A COMMERCIAL BANKING
INSTITUTION, AND HAVING COMBINED CAPITAL AND SURPLUS OF AT LEAST $250.0 MILLION;
PROVIDED, HOWEVER, THAT IF SUCH RETIRING ADMINISTRATIVE AGENT AND/OR COLLATERAL
AGENT, AS APPLICABLE IS UNABLE TO FIND A COMMERCIAL BANKING INSTITUTION WHICH IS
WILLING TO ACCEPT SUCH APPOINTMENT AND WHICH MEETS THE QUALIFICATIONS SET FORTH
ABOVE, THE RETIRING ADMINISTRATIVE AGENT’S AND/OR COLLATERAL AGENT’S RESIGNATION
SHALL NEVERTHELESS THEREUPON BECOME EFFECTIVE, AND THE LENDERS SHALL ASSUME AND
PERFORM ALL OF THE DUTIES OF THE ADMINISTRATIVE AGENT AND/OR COLLATERAL AGENT,
AS APPLICABLE HEREUNDER UNTIL SUCH TIME, IF ANY, AS THE REQUIRED LENDERS APPOINT
A SUCCESSOR ADMINISTRATIVE AGENT AND/OR COLLATERAL AGENT, AS APPLICABLE.

 

Upon the acceptance of its appointment as Administrative Agent and/or Collateral
Agent, as applicable, hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent and/or Collateral Agent, as applicable, and the
retiring Administrative Agent and/or Collateral Agent, as applicable, shall be
discharged from its duties and obligations hereunder.  The fees payable by
Borrowers to a successor Administrative Agent and/or Collateral Agent, as
applicable, shall be the same as those payable to its predecessor unless
otherwise agreed between Borrowers and such successor.  After the Administrative
Agent’s and/or Collateral Agent’s resignation hereunder, the provisions of this
Article X and Section 11.03 shall continue in effect for the benefit of such
retiring Administrative Agent and/or Collateral Agent, as applicable, its
respective sub-agents and their respective Affiliates in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent and/or Collateral Agent, as applicable.

 

SECTION 10.07  NON-RELIANCE ON AGENTS AND OTHER LENDERS.  EACH LENDER
ACKNOWLEDGES THAT IT HAS, INDEPENDENTLY AND WITHOUT RELIANCE UPON THE AGENTS OR
ANY OTHER LENDER AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT HAS DEEMED
APPROPRIATE, MADE ITS OWN CREDIT ANALYSIS AND DECISION TO ENTER INTO THIS
AGREEMENT.  EACH LENDER ALSO ACKNOWLEDGES

 

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THAT IT WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON THE AGENTS OR ANY OTHER
LENDER AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT SHALL FROM TIME TO TIME
DEEM APPROPRIATE, CONTINUE TO MAKE ITS OWN DECISIONS IN TAKING OR NOT TAKING
ACTION UNDER OR BASED UPON THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR RELATED
AGREEMENT OR ANY DOCUMENT FURNISHED HEREUNDER OR THEREUNDER.

 

SECTION 10.08  NO OTHER ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT.  THE
LENDERS IDENTIFIED IN THIS AGREEMENT, THE CO-SYNDICATION AGENTS AND THE
CO-DOCUMENTATION AGENTS SHALL NOT HAVE ANY RIGHT, POWER, OBLIGATION, LIABILITY,
RESPONSIBILITY OR DUTY UNDER THIS AGREEMENT OTHER THAN THOSE APPLICABLE TO ALL
LENDERS.  WITHOUT LIMITING THE FOREGOING, NEITHER THE CO-SYNDICATION AGENTS NOR
THE CO-DOCUMENTATION AGENTS SHALL HAVE OR BE DEEMED TO HAVE A FIDUCIARY
RELATIONSHIP WITH ANY LENDER.  EACH LENDER HEREBY MAKES THE SAME ACKNOWLEDGMENTS
WITH RESPECT TO THE CO-SYNDICATION AGENTS AND THE CO-DOCUMENTATION AGENTS AS IT
MAKES WITH RESPECT TO THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT OR ANY
OTHER LENDER IN THIS ARTICLE X.  NOTWITHSTANDING THE FOREGOING, THE PARTIES
HERETO ACKNOWLEDGE THAT THE CO-SYNDICATION AGENTS AND THE CO-DOCUMENTATION
AGENTS HOLD SUCH TITLES IN NAME ONLY, AND THAT SUCH TITLES CONFER NO ADDITIONAL
RIGHTS OR OBLIGATIONS RELATIVE TO THOSE CONFERRED ON ANY LENDER HEREUNDER.

 

SECTION 10.09  INDEMNIFICATION.  THE LENDERS SEVERALLY AGREE TO INDEMNIFY EACH
AGENT IN ITS CAPACITY AS SUCH (TO THE EXTENT NOT REIMBURSED BY THE BORROWERS OR
THE GUARANTORS AND WITHOUT LIMITING THE OBLIGATION OF THE BORROWERS OR THE
GUARANTORS TO DO SO), RATABLY ACCORDING TO THEIR RESPECTIVE OUTSTANDING LOANS
AND COMMITMENTS IN EFFECT ON THE DATE ON WHICH INDEMNIFICATION IS SOUGHT UNDER
THIS SECTION 10.09 (OR, IF INDEMNIFICATION IS SOUGHT AFTER THE DATE UPON WHICH
ALL COMMITMENTS SHALL HAVE TERMINATED AND THE LOANS SHALL HAVE BEEN PAID IN
FULL, RATABLY IN ACCORDANCE WITH SUCH OUTSTANDING LOANS AND COMMITMENTS AS IN
EFFECT IMMEDIATELY PRIOR TO SUCH DATE), FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND WHATSOEVER THAT MAY AT ANY TIME
(WHETHER BEFORE OR AFTER THE PAYMENT OF THE LOANS) BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST SUCH AGENT IN ANY WAY RELATING TO OR ARISING OUT OF, THE
COMMITMENTS, THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY DOCUMENTS
CONTEMPLATED BY OR REFERRED TO HEREIN OR THEREIN OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR ANY ACTION TAKEN OR OMITTED BY SUCH AGENT
UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING; PROVIDED THAT NO LENDER SHALL
BE LIABLE FOR THE PAYMENT OF ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS THAT ARE FOUND BY A FINAL AND NONAPPEALABLE DECISION OF A COURT OF
COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH AGENT’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.  THE AGREEMENTS IN THIS SECTION 10.09 SHALL SURVIVE THE
PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER.

 

SECTION 10.10  ADDITIONAL LOANS.  ADMINISTRATIVE AGENT SHALL NOT MAKE (AND SHALL
PROHIBIT THE ISSUING BANK AND SWINGLINE LENDER, AS APPLICABLE, FROM MAKING) ANY
REVOLVING LOANS OR PROVIDE ANY LETTERS OF CREDIT TO BORROWERS ON BEHALF OF
LENDERS INTENTIONALLY AND WITH ACTUAL KNOWLEDGE THAT SUCH REVOLVING LOANS,
SWINGLINE LOANS, OR LETTERS OF CREDIT WOULD CAUSE THE AGGREGATE AMOUNT OF THE
REVOLVING EXPOSURE TO EXCEED THE BORROWING BASE OF BORROWERS, WITHOUT THE PRIOR
CONSENT OF ALL LENDERS, EXCEPT, THAT, ADMINISTRATIVE AGENT MAY MAKE (OR CAUSE TO
BE MADE) SUCH ADDITIONAL REVOLVING LOANS OR SWINGLINE LOANS OR PROVIDE SUCH
ADDITIONAL LETTERS OF CREDIT ON BEHALF OF LENDERS, INTENTIONALLY AND WITH ACTUAL
KNOWLEDGE THAT SUCH LOANS OR LETTERS OF CREDIT WILL CAUSE THE TOTAL OUTSTANDING
REVOLVING EXPOSURE TO EXCEED THE BORROWING BASE, AS ADMINISTRATIVE AGENT MAY
DEEM NECESSARY OR ADVISABLE IN ITS DISCRETION, PROVIDED, THAT:

 

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(A) THE TOTAL PRINCIPAL AMOUNT OF THE ADDITIONAL REVOLVING LOANS, SWINGLINE
LOANS, OR ADDITIONAL LETTERS OF CREDIT TO BORROWERS WHICH ADMINISTRATIVE AGENT
MAY MAKE OR PROVIDE (OR CAUSE TO BE MADE OR PROVIDED) AFTER OBTAINING SUCH
ACTUAL KNOWLEDGE THAT THE REVOLVING EXPOSURE EQUALS OR EXCEEDS THE BORROWING
BASE SHALL NOT EXCEED THE AMOUNT EQUAL TO $10.0 MILLION OUTSTANDING AT ANY TIME
AND SHALL NOT CAUSE THE REVOLVING EXPOSURE TO EXCEED THE REVOLVING COMMITMENTS
OF ALL OF THE LENDERS OR THE REVOLVING EXPOSURE OF A LENDER TO EXCEED SUCH
LENDER’S REVOLVING COMMITMENT, (B) WITHOUT THE CONSENT OF ALL LENDERS,
ADMINISTRATIVE AGENT SHALL NOT MAKE ANY SUCH ADDITIONAL REVOLVING LOANS,
SWINGLINE LOANS, OR LETTERS OF CREDIT MORE THAN SIXTY (60) DAYS FROM THE DATE OF
THE FIRST SUCH ADDITIONAL REVOLVING LOANS, SWINGLINE LOANS, OR LETTERS OF CREDIT
AND (C) THE REQUIRED LENDERS MAY AT ANY TIME PROSPECTIVELY REVOKE THE
ADMINISTRATIVE AGENT’S AUTHORIZATION TO MAKE SUCH ADDITIONAL REVOLVING LOANS,
SWINGLINE LOANS OR LETTERS OF CREDIT.  EACH LENDER SHALL BE OBLIGATED TO PAY
ADMINISTRATIVE AGENT THE AMOUNT OF ITS PRO RATA PERCENTAGE OF ANY SUCH
ADDITIONAL REVOLVING LOANS, SWINGLINE LOANS, OR LETTERS OF CREDIT PROVIDED THAT
ADMINISTRATIVE AGENT IS ACTING IN ACCORDANCE WITH THE TERMS OF THIS
SECTION 10.10.

 

ARTICLE XI.
 
MISCELLANEOUS

 

SECTION 11.01  NOTICES.   (A)  EXCEPT IN THE CASE OF NOTICES AND OTHER
COMMUNICATIONS EXPRESSLY PERMITTED TO BE GIVEN BY TELEPHONE (AND EXCEPT AS
PROVIDED IN PARAGRAPH (B) BELOW), ALL NOTICES AND OTHER COMMUNICATIONS PROVIDED
FOR HEREIN SHALL BE IN WRITING AND SHALL BE DELIVERED BY HAND OR OVERNIGHT
COURIER SERVICE, MAILED BY CERTIFIED OR REGISTERED MAIL OR SENT BY TELECOPY, AS
FOLLOWS:

 

(I)                                     IF TO ANY LOAN PARTY, TO HOLDINGS AT:

 

Department 56, Inc.

One Village Place

6436 City West Parkway

Eden Prairie, MN 55344

Attention:  Timothy J. Schugel, CFO

Telecopy No.: 952-943-4495

 

(II)                                  IF TO THE ADMINISTRATIVE AGENT, TO IT AT:

 

UBS AG, Stamford Branch

677 Washington Boulevard

Stamford, Connecticut 06901

Attention:  Vladimira Holeckova

Telecopy No.:  203-719-4176

 

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with a copy to:

 

Winston & Strawn LLP

200 Park Avenue

New York, New York 10166

Attention: William D. Brewer

Telecopy No.: (212) 294-4700

 

(III)                               IF TO THE COLLATERAL AGENT, TO IT AT:

 

JPMorgan Chase Bank, N.A.

111 East Wisconsin Avenue, Floor 15

Mail Code WI 1-2061

Milwaukee, WI 53202

Attention:  Monica Stariha

Telecopy No.: 414-977-6666

 

with a copy to the Administrative Agent as set
forth in Section 11.01(b) above and its counsel

 

(IV)                              IF TO A LENDER, TO IT AT ITS ADDRESS (OR
TELECOPY NUMBER) SET FORTH IN ITS ADMINISTRATIVE QUESTIONNAIRE.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopy shall be deemed to have been given when sent if confirmation of
delivery is received (except that, if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of business on
the next business day for the recipient).  Notices delivered through electronic
communications shall be effective as provided in paragraph (b) below.

 

(B)                                 ELECTRONIC COMMUNICATIONS.  NOTICES AND
OTHER COMMUNICATIONS TO THE LENDERS HEREUNDER MAY (SUBJECT TO SECTION 11.01(D))
BE DELIVERED OR FURNISHED BY ELECTRONIC COMMUNICATION (INCLUDING E-MAIL AND
INTERNET OR INTRANET WEBSITES) PURSUANT TO PROCEDURES APPROVED BY THE
ADMINISTRATIVE AGENT; PROVIDED, THAT THE FOREGOING SHALL NOT APPLY TO NOTICES TO
ANY LENDER PURSUANT TO ARTICLE II IF SUCH LENDER HAS NOTIFIED THE ADMINISTRATIVE
AGENT THAT IT IS INCAPABLE OF RECEIVING NOTICES UNDER SUCH ARTICLE BY ELECTRONIC
COMMUNICATION.  THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR BORROWERS MAY,
IN THEIR DISCRETION, AGREE TO ACCEPT NOTICES AND OTHER COMMUNICATIONS TO IT
HEREUNDER BY ELECTRONIC COMMUNICATIONS PURSUANT TO PROCEDURES APPROVED BY IT
(INCLUDING AS SET FORTH IN SECTION 11.01(D)); PROVIDED, THAT APPROVAL OF SUCH
PROCEDURES MAY BE LIMITED TO PARTICULAR NOTICES OR COMMUNICATIONS; PROVIDED,
FURTHER, THAT, UNLESS THE COLLATERAL AGENT OTHERWISE AGREES, BORROWING BASE
CERTIFICATES AND COLLATERAL REPORTS SHALL NOT BE DELIVERED OR FURNISHED BY
ELECTRONIC COMMUNICATION IN PDF FORMAT.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided, that if such

 

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notice or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next business day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website shall
be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor.

 

(C)                                  CHANGE OF ADDRESS, ETC.  ANY PARTY HERETO
MAY CHANGE ITS ADDRESS OR TELECOPY NUMBER FOR NOTICES AND OTHER COMMUNICATIONS
HEREUNDER BY NOTICE TO THE OTHER PARTIES HERETO.

 

(D)                                 POSTING.   EACH LOAN PARTY HEREBY AGREES
THAT IT WILL PROVIDE TO THE ADMINISTRATIVE AGENT ALL INFORMATION, DOCUMENTS AND
OTHER MATERIALS THAT IT IS OBLIGATED TO FURNISH TO THE ADMINISTRATIVE AGENT
PURSUANT TO THIS AGREEMENT AND ANY OTHER LOAN DOCUMENT, INCLUDING ALL NOTICES,
REQUESTS, FINANCIAL STATEMENTS, FINANCIAL AND OTHER REPORTS, CERTIFICATES AND
OTHER INFORMATION MATERIALS, BUT EXCLUDING ANY SUCH COMMUNICATION THAT
(I) RELATES TO A REQUEST FOR A NEW, OR A CONVERSION OF AN EXISTING, BORROWING OR
OTHER EXTENSION OF CREDIT (INCLUDING ANY ELECTION OF AN INTEREST RATE OR
INTEREST PERIOD RELATING THERETO), (II) RELATES TO THE PAYMENT OF ANY PRINCIPAL
OR OTHER AMOUNT DUE UNDER THIS AGREEMENT PRIOR TO THE SCHEDULED DATE THEREFOR,
(III) PROVIDES NOTICE OF ANY DEFAULT UNDER THIS AGREEMENT OR (IV) IS REQUIRED TO
BE DELIVERED TO SATISFY ANY CONDITION PRECEDENT TO THE EFFECTIVENESS OF THIS
AGREEMENT AND/OR ANY BORROWING OR OTHER CREDIT EXTENSION HEREUNDER (ALL SUCH
NON-EXCLUDED COMMUNICATIONS, COLLECTIVELY, THE “COMMUNICATIONS”), BY
TRANSMITTING THE COMMUNICATIONS IN AN ELECTRONIC/SOFT MEDIUM IN A FORMAT
REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AT SUCH E-MAIL ADDRESS(ES)
PROVIDED TO BORROWERS FROM TIME TO TIME OR IN SUCH OTHER FORM, INCLUDING HARD
COPY DELIVERY THEREOF, AS THE ADMINISTRATIVE AGENT SHALL REQUIRE.  IN ADDITION,
EACH LOAN PARTY AGREES TO CONTINUE TO PROVIDE THE COMMUNICATIONS TO THE
ADMINISTRATIVE AGENT IN THE MANNER SPECIFIED IN THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR IN SUCH OTHER FORM, INCLUDING HARD COPY DELIVERY THEREOF, AS THE
ADMINISTRATIVE AGENT SHALL REQUIRE.  NOTHING IN THIS SECTION 11.01 SHALL
PREJUDICE THE RIGHT OF THE AGENTS, ANY LENDER OR ANY LOAN PARTY TO GIVE ANY
NOTICE OR OTHER COMMUNICATION PURSUANT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY OTHER MANNER SPECIFIED IN THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR AS ANY SUCH AGENT SHALL REQUIRE.

 

To the extent consented to by the Administrative Agent in writing from time to
time, Administrative Agent agrees that receipt of the Communications by the
Administrative Agent at its e-mail address(es) provided to Borrowers shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of the Loan Documents; provided, that Borrowers shall also deliver
to the Administrative Agent an executed original of each Compliance Certificate
required to be delivered hereunder.

 

Each Loan Party further agrees that Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
Intralinks or a substantially similar electronic transmission system (the
“Platform”).  The Platform is provided “as is” and “as available.”  The Agents
do not warrant the accuracy or completeness of the Communications, or the
adequacy of the Platform and expressly disclaim liability for errors or
omissions in the communications.  No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
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any Agent in connection with the Communications or the Platform.  In no event
shall the Administrative Agent, the Collateral Agent or any of their Related
Parties have any liability to the Loan Parties, any Lender or any other person
for damages of any kind, including direct or indirect, special, incidental or
consequential damages, losses or expenses (whether in tort, contract or
otherwise) arising out of any Loan Party’s or the Administrative Agent’s or the
Collateral Agent’s transmission of communications through the Internet, except
to the extent the liability of such person is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from such
person’s gross negligence or willful misconduct.

 

SECTION 11.02  WAIVERS; AMENDMENT.  (A)  NO FAILURE OR DELAY BY THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING BANK OR ANY LENDER IN
EXERCISING ANY RIGHT OR POWER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT SHALL
OPERATE AS A WAIVER THEREOF, NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY
SUCH RIGHT OR POWER, OR ANY ABANDONMENT OR DISCONTINUANCE OF STEPS TO ENFORCE
SUCH A RIGHT OR POWER, PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE
EXERCISE OF ANY OTHER RIGHT OR POWER.  THE RIGHTS AND REMEDIES OF THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING BANK AND THE LENDERS
HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS ARE CUMULATIVE AND ARE NOT
EXCLUSIVE OF ANY RIGHTS OR REMEDIES THAT THEY WOULD OTHERWISE HAVE.  NO WAIVER
OF ANY PROVISION OF ANY LOAN DOCUMENT OR CONSENT TO ANY DEPARTURE BY ANY LOAN
PARTY THEREFROM SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE
PERMITTED BY PARAGRAPH (B) OF THIS SECTION 11.02, AND THEN SUCH WAIVER OR
CONSENT SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE PURPOSE FOR
WHICH GIVEN.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE MAKING OF A
LOAN OR ISSUANCE OF A LETTER OF CREDIT SHALL NOT BE CONSTRUED AS A WAIVER OF ANY
DEFAULT, REGARDLESS OF WHETHER THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT,
ANY LENDER OR THE ISSUING BANK MAY HAVE HAD NOTICE OR KNOWLEDGE OF SUCH DEFAULT
AT THE TIME.

 

(B)                                 NEITHER THIS AGREEMENT NOR ANY OTHER LOAN
DOCUMENT NOR ANY PROVISION HEREOF OR THEREOF MAY BE WAIVED, AMENDED OR MODIFIED
EXCEPT, IN THE CASE OF THIS AGREEMENT, PURSUANT TO AN AGREEMENT OR AGREEMENTS IN
WRITING ENTERED INTO BY BORROWERS AND THE REQUIRED LENDERS OR, IN THE CASE OF
ANY OTHER LOAN DOCUMENT, PURSUANT TO AN AGREEMENT OR AGREEMENTS IN WRITING
ENTERED INTO BY THE ADMINISTRATIVE AGENT AND THE LOAN PARTY OR LOAN PARTIES THAT
ARE PARTIES THERETO, IN EACH CASE WITH THE WRITTEN CONSENT OF THE REQUIRED
LENDERS; PROVIDED THAT NO SUCH AMENDMENT, WAIVER OR CONSENT SHALL, UNLESS IN
WRITING AND SIGNED BY ALL THE LENDERS DO ANY OF THE FOLLOWING: (I) INCREASE THE
DOLLAR AMOUNT OF THE COMMITMENT OF ANY LENDER, (II) REDUCE OR FORGIVE THE
PRINCIPAL AMOUNT OF ANY LOAN OR LC DISBURSEMENT OR REDUCE THE RATE OF INTEREST
THEREON (OTHER THAN TO WAIVE DEFAULT INTEREST UNDER SECTION 2.06(C) TO THE
EXTENT A WAIVER OF THE UNDERLYING DEFAULT GIVING RISE TO SUCH DEFAULT INTEREST
DOES NOT REQUIRE A VOTE OF ALL LENDERS), OR REDUCE OR FORGIVE ANY FEES PAYABLE
HEREUNDER, (III) POSTPONE THE MATURITY OF ANY LOAN, OR THE REQUIRED DATE OF
REIMBURSEMENT OF ANY LC DISBURSEMENT, OR ANY DATE FOR THE PAYMENT OF ANY
INTEREST OR FEES PAYABLE HEREUNDER, OR REDUCE THE AMOUNT OF, WAIVE OR EXCUSE ANY
SUCH PAYMENT, OR POSTPONE THE SCHEDULED DATE OF EXPIRATION OF ANY COMMITMENT OR
POSTPONE THE SCHEDULED DATE OF EXPIRATION OF ANY LETTER OF CREDIT BEYOND THE
REVOLVING MATURITY DATE, (IV) CHANGE SECTION 2.14(B) OR (C) IN A MANNER THAT
WOULD ALTER THE PRO RATA SHARING OF PAYMENTS OR SET-OFFS REQUIRED THEREBY OR
CHANGE SECTION 9.02, (V) CHANGE THE PERCENTAGE SET FORTH IN THE DEFINITION OF
“REQUIRED LENDERS”, “SUPERMAJORITY LENDERS” OR ANY OTHER PROVISION OF ANY LOAN
DOCUMENT (INCLUDING THIS SECTION 11.02) SPECIFYING THE NUMBER OR PERCENTAGE OF
LENDERS (OR LENDERS OF ANY CLASS) REQUIRED TO WAIVE, AMEND OR MODIFY ANY RIGHTS
THEREUNDER OR MAKE ANY DETERMINATION OR GRANT ANY CONSENT THEREUNDER, WITHOUT
THE WRITTEN CONSENT OF EACH LENDER (OR EACH LENDER OF SUCH

 

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CLASS, AS THE CASE MAY BE), (VI) RELEASE HOLDINGS OR ANY SUBSIDIARY GUARANTOR
FROM ITS GUARANTEE (EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE VII), OR LIMIT ITS
LIABILITY IN RESPECT OF SUCH GUARANTEE, (VII) RELEASE ALL OR SUBSTANTIALLY ALL
OF THE COLLATERAL FROM THE LIENS OF THE SECURITY DOCUMENTS OR ALTER THE RELATIVE
PRIORITIES OF THE OBLIGATIONS ENTITLED TO THE LIENS OF THE SECURITY DOCUMENTS
(EXCEPT IN CONNECTION WITH SECURING ADDITIONAL OBLIGATIONS EQUALLY AND RATABLY
WITH THE OTHER OBLIGATIONS), OR (VIII) CHANGE ANY PROVISIONS OF ANY LOAN
DOCUMENT IN A MANNER THAT BY ITS TERMS ADVERSELY AFFECTS THE RIGHTS IN RESPECT
OF PAYMENTS DUE TO LENDERS HOLDING LOANS OF ANY CLASS DIFFERENTLY THAN THOSE
HOLDING LOANS OF ANY OTHER CLASS, WITHOUT THE WRITTEN CONSENT OF LENDERS HOLDING
A MAJORITY IN INTEREST OF THE OUTSTANDING LOANS AND UNUSED COMMITMENTS OF EACH
AFFECTED CLASS; PROVIDED, FURTHER, THAT (1) NO SUCH AGREEMENT SHALL AMEND,
MODIFY OR OTHERWISE AFFECT THE RIGHTS OR DUTIES OF THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE ISSUING BANK OR THE SWINGLINE LENDER WITHOUT THE PRIOR
WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING
BANK OR THE SWINGLINE LENDER, AS THE CASE MAY BE, (2) ANY WAIVER, AMENDMENT OR
CONSENT THAT ADJUSTS THE ELIGIBILITY CRITERIA OR CREATES NEW ELIGIBILITY
CRITERIA FOR ELIGIBLE ACCOUNTS OR ELIGIBLE INVENTORY WHICH, IN EACH CASE, HAS
THE EFFECT OF MAKING MORE CREDIT AVAILABLE SHALL REQUIRE THE CONSENT OF
SUPERMAJORITY LENDERS AND (3) ANY WAIVER, AMENDMENT OR CONSENT THAT INCREASES IN
ADVANCE RATES FOR THE BORROWING BASE SHALL REQUIRE THE CONSENT OF LENDERS HAVING
AT LEAST 80% OF THE REVOLVING COMMITMENTS.  NOTWITHSTANDING THE FOREGOING, ANY
PROVISION OF THIS AGREEMENT MAY BE AMENDED BY AN AGREEMENT IN WRITING ENTERED
INTO BY BORROWERS, THE REQUIRED LENDERS AND THE ADMINISTRATIVE AGENT (AND, IF
THEIR RIGHTS OR OBLIGATIONS ARE AFFECTED THEREBY, THE ISSUING BANK AND THE
SWINGLINE LENDER) IF (X) BY THE TERMS OF SUCH AGREEMENT THE COMMITMENT OF EACH
LENDER NOT CONSENTING TO THE AMENDMENT PROVIDED FOR THEREIN SHALL TERMINATE UPON
THE EFFECTIVENESS OF SUCH AMENDMENT AND (Y) AT THE TIME SUCH AMENDMENT BECOMES
EFFECTIVE, EACH LENDER NOT CONSENTING THERETO RECEIVES PAYMENT IN FULL OF THE
PRINCIPAL OF AND INTEREST ACCRUED ON EACH LOAN MADE BY IT AND ALL OTHER AMOUNTS
OWING TO IT OR ACCRUED FOR ITS ACCOUNT UNDER THIS AGREEMENT.

 

(C)                                  IF, IN CONNECTION WITH ANY PROPOSED CHANGE,
WAIVER, DISCHARGE OR TERMINATION OF THE PROVISIONS OF THIS AGREEMENT THAT
REQUIRES UNANIMOUS APPROVAL OF ALL LENDERS AS CONTEMPLATED BY
SECTION 11.02(B) (OTHER THAN CLAUSE (III) OF SUCH SECTION), THE CONSENT OF THE
SUPERMAJORITY LENDERS IS OBTAINED BUT THE CONSENT OF ONE OR MORE OF SUCH OTHER
LENDERS WHOSE CONSENT IS REQUIRED IS NOT OBTAINED, THEN BORROWERS SHALL HAVE THE
RIGHT TO REPLACE ALL, BUT NOT LESS THAN ALL, OF SUCH NON-CONSENTING LENDER OR
LENDERS (SO LONG AS ALL NON-CONSENTING LENDERS ARE SO REPLACED) WITH ONE OR MORE
PERSONS PURSUANT TO SECTION 2.16 SO LONG AS AT THE TIME OF SUCH REPLACEMENT EACH
SUCH NEW LENDER CONSENTS TO THE PROPOSED CHANGE, WAIVER, DISCHARGE OR
TERMINATION; PROVIDED, HOWEVER, THAT BORROWERS SHALL NOT HAVE THE RIGHT TO
REPLACE A LENDER SOLELY AS A RESULT OF THE EXERCISE OF SUCH LENDER’S RIGHTS (AND
THE WITHHOLDING OF ANY REQUIRED CONSENT BY SUCH LENDER) PURSUANT TO CLAUSE
(III) OF SECTION 11.02(B); PROVIDED FURTHER THAT EACH REPLACED LENDER RECEIVES
PAYMENT IN FULL OF THE PRINCIPAL OF AND INTEREST ACCRUED ON EACH LOAN MADE BY IT
AND ALL OTHER AMOUNTS OWING TO IT OR ACCRUED FOR ITS ACCOUNT UNDER THIS
AGREEMENT.

 

SECTION 11.03  EXPENSES; INDEMNITY.  (A)  THE LOAN PARTIES AGREE, JOINTLY AND
SEVERALLY, TO PAY ALL REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING BUT NOT
LIMITED TO EXPENSES INCURRED IN CONNECTION WITH DUE DILIGENCE AND TRAVEL,
COURIER, REPRODUCTION, PRINTING AND DELIVERY EXPENSES) INCURRED BY THE
ADMINISTRATIVE AGENT, COLLATERAL AGENT, THE SWINGLINE LENDER AND ISSUING BANK IN
CONNECTION WITH THE SYNDICATION OF THE CREDIT FACILITIES PROVIDED FOR HEREIN AND
THE PREPARATION, EXECUTION AND DELIVERY, AND ADMINISTRATION OF THIS AGREEMENT
AND THE OTHER LOAN

 

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DOCUMENTS, INCLUDING ANY INVENTORY APPRAISAL, OR IN CONNECTION WITH ANY
AMENDMENTS, MODIFICATIONS, ENFORCEMENT COSTS, WORK-OUT COSTS, DOCUMENTARY TAXES
OR WAIVERS OF THE PROVISIONS HEREOF OR THEREOF (WHETHER OR NOT THE TRANSACTIONS
HEREBY OR THEREBY CONTEMPLATED SHALL BE CONSUMMATED) OR INCURRED BY THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT OR ANY LENDER IN CONNECTION WITH
THE WORK-OUT, ENFORCEMENT OR PROTECTION OF ITS RIGHTS IN CONNECTION WITH THIS
AGREEMENT (INCLUDING PURSUANT TO SECTION 5.15 OF THIS AGREEMENT) AND THE OTHER
LOAN DOCUMENTS OR IN CONNECTION WITH THE LOANS MADE OR LETTERS OF CREDIT ISSUED
HEREUNDER, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF COUNSEL FOR THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT, AND, IN CONNECTION WITH ANY SUCH
ENFORCEMENT OR PROTECTION, OR WORK-OUT, THE FEES, CHARGES AND DISBURSEMENTS OF
ANY OTHER COUNSEL FOR THE AGENTS OR ANY LENDER.

 

(B)                                 THE LOAN PARTIES AGREE, JOINTLY AND
SEVERALLY, TO INDEMNIFY THE AGENTS, EACH LENDER, THE ISSUING BANK AND THE
SWINGLINE LENDER, EACH AFFILIATE OF ANY OF THE FOREGOING PERSONS AND EACH OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, TRUSTEES, EMPLOYEES AND AGENTS (EACH SUCH
PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND TO HOLD EACH INDEMNITEE
HARMLESS FROM, ALL REASONABLE OUT-OF-POCKET COSTS AND ANY AND ALL LOSSES,
CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING REASONABLE COUNSEL
FEES, CHARGES, EXPENSES AND DISBURSEMENTS, INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE ARISING OUT OF, IN ANY WAY CONNECTED WITH, OR AS A RESULT OF (I) THE
TRANSACTIONS, (II) ANY ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE LOANS OR
ISSUANCE OF LETTERS OF CREDIT, (III) ANY CLAIM, LITIGATION, INVESTIGATION OR
PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER OR NOT ANY INDEMNITEE IS A
PARTY THERETO, OR (III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OR THREATENED
RELEASE OF HAZARDOUS MATERIALS, ON, UNDER OR FROM ANY PROPERTY OWNED, LEASED OR
OPERATED BY ANY COMPANY, OR ANY ENVIRONMENTAL CLAIM RELATED IN ANY WAY TO ANY
COMPANY; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE
AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL
AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE, BAD FAITH
OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

 

(C)                                  THE PROVISIONS OF THIS SECTION 11.03 SHALL
REMAIN OPERATIVE AND IN FULL FORCE AND EFFECT REGARDLESS OF THE EXPIRATION OF
THE TERM OF THIS AGREEMENT, THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY, THE REPAYMENT OF ANY OF THE LOANS, THE EXPIRATION OF THE COMMITMENTS,
THE EXPIRATION OF ANY LETTER OF CREDIT, THE INVALIDITY OR UNENFORCEABILITY OF
ANY TERM OR PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
INVESTIGATION MADE BY OR ON BEHALF OF THE AGENTS, THE ISSUING BANK OR ANY
LENDER.  ALL AMOUNTS DUE UNDER THIS SECTION 11.03 SHALL BE PAYABLE ON WRITTEN
DEMAND THEREFOR ACCOMPANIED BY REASONABLE DOCUMENTATION WITH RESPECT TO ANY
REIMBURSEMENT, INDEMNIFICATION OR OTHER AMOUNT REQUESTED.

 

(D)                                 TO THE EXTENT THAT A BORROWER FAILS TO PAY
ANY AMOUNT REQUIRED TO BE PAID BY IT TO THE AGENTS, THE ISSUING BANK OR THE
SWINGLINE LENDER UNDER PARAGRAPH (A) OR (B) OF THIS SECTION 11.03, EACH LENDER
SEVERALLY AGREES TO PAY TO THE AGENTS, THE ISSUING BANK OR THE SWINGLINE LENDER,
AS THE CASE MAY BE, SUCH LENDER’S PRO RATA SHARE (DETERMINED AS OF THE TIME THAT
THE APPLICABLE UNREIMBURSED EXPENSE OR INDEMNITY PAYMENT IS SOUGHT) OF SUCH
UNPAID AMOUNT; PROVIDED THAT THE UNREIMBURSED EXPENSE OR INDEMNIFIED LOSS,
CLAIM, DAMAGE, LIABILITY OR RELATED EXPENSE, AS THE CASE MAY BE, WAS INCURRED BY
OR ASSERTED AGAINST ANY OF THE AGENTS, THE ISSUING BANK OR THE SWINGLINE LENDER
IN ITS CAPACITY AS SUCH.  FOR PURPOSES HEREOF, A LENDER’S “PRO RATA SHARE” SHALL
BE DETERMINED BASED UPON ITS SHARE OF THE SUM OF THE TOTAL REVOLVING EXPOSURE
AND UNUSED COMMITMENTS AT THE TIME.

 

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(E)                                  TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE REQUIREMENTS OF LAW, NO LOAN PARTY SHALL ASSERT, AND EACH LOAN PARTY
HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNITEE, ON ANY THEORY OF LIABILITY, FOR
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR
ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY LOAN OR OTHER
CREDIT EXTENSION OR THE USE OF THE PROCEEDS THEREOF.  NO INDEMNITEE REFERRED TO
IN PARAGRAPH (B) ABOVE SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY
UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT
THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS
IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

SECTION 11.04  SUCCESSORS AND ASSIGNS.  (A)  THE PROVISIONS OF THIS AGREEMENT
SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY (INCLUDING ANY AFFILIATE OF
THE ISSUING BANK THAT ISSUES ANY LETTER OF CREDIT), EXCEPT THAT BORROWERS MAY
NOT ASSIGN OR OTHERWISE TRANSFER ANY OF THEIR RIGHTS OR OBLIGATIONS HEREUNDER
WITHOUT THE PRIOR WRITTEN CONSENT OF EACH LENDER (AND ANY ATTEMPTED ASSIGNMENT
OR TRANSFER BY A BORROWER WITHOUT SUCH CONSENT SHALL BE NULL AND VOID).  NOTHING
IN THIS AGREEMENT, EXPRESSED OR IMPLIED, SHALL BE CONSTRUED TO CONFER UPON ANY
PERSON (OTHER THAN THE PARTIES HERETO, THEIR RESPECTIVE SUCCESSORS AND ASSIGNS
PERMITTED HEREBY (INCLUDING ANY AFFILIATE OF THE ISSUING BANK THAT ISSUES ANY
LETTER OF CREDIT) AND, TO THE EXTENT EXPRESSLY CONTEMPLATED HEREBY, THE
AFFILIATES OF EACH OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE
LENDERS) ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR CLAIM UNDER OR BY REASON OF
THIS AGREEMENT.

 

(B)                                 ANY LENDER MAY ASSIGN TO ONE OR MORE BANKS,
INSURANCE COMPANIES, INVESTMENT COMPANIES OR FUNDS OR OTHER INSTITUTIONS (OTHER
THAN BORROWERS, HOLDINGS OR ANY AFFILIATE OR SUBSIDIARY THEREOF) ALL OR A
PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING ALL OR A
PORTION OF ITS COMMITMENT AND THE LOANS AT THE TIME OWING TO IT); PROVIDED THAT
(I) EXCEPT IN THE CASE OF AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF A LENDER OR
A LENDER AFFILIATE, BORROWERS (EXCEPT (I) AFTER THE OCCURRENCE AND DURING THE
CONTINUATION OF A DEFAULT OR EVENT OF DEFAULT OR (II) PRIOR TO THE COMPLETION OF
THE PRIMARY SYNDICATION (AS DETERMINED BY ARRANGER) OF THE COMMITMENTS AND THE
LOANS BY THE ARRANGER) AND THE ADMINISTRATIVE AGENT (AND, IN THE CASE OF AN
ASSIGNMENT OF ALL OR A PORTION OF A REVOLVING COMMITMENT OR ANY LENDER’S
OBLIGATIONS IN RESPECT OF ITS LC EXPOSURE OR SWINGLINE EXPOSURE, THE ISSUING
BANK AND THE SWINGLINE LENDER) MUST GIVE THEIR PRIOR WRITTEN CONSENT TO SUCH
ASSIGNMENT (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED),
(II) EXCEPT IN THE CASE OF AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF A LENDER
OR A LENDER AFFILIATE, ANY ASSIGNMENT MADE IN CONNECTION WITH THE PRIMARY
SYNDICATION OF THE COMMITMENT AND LOANS BY THE ARRANGER OR AN ASSIGNMENT OF THE
ENTIRE REMAINING AMOUNT OF THE ASSIGNING LENDER’S COMMITMENTS OR LOANS, THE
AMOUNT OF THE COMMITMENT OR LOANS OF THE ASSIGNING LENDER SUBJECT TO EACH SUCH
ASSIGNMENT (DETERMINED AS OF THE DATE THE ASSIGNMENT AND ACCEPTANCE WITH RESPECT
TO SUCH ASSIGNMENT IS DELIVERED TO THE ADMINISTRATIVE AGENT) SHALL NOT BE LESS
THAN IN THE CASE OF REVOLVING COMMITMENTS AND REVOLVING LOANS, $5.0 MILLION
UNLESS EACH OF THE BORROWERS AND THE ADMINISTRATIVE AGENT OTHERWISE CONSENT,
(III) EACH PARTIAL ASSIGNMENT SHALL BE MADE AS AN ASSIGNMENT OF A PROPORTIONATE
PART OF ALL THE ASSIGNING LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT,
EXCEPT THAT THIS CLAUSE (III) SHALL NOT BE CONSTRUED TO PROHIBIT THE ASSIGNMENT
OF A PROPORTIONATE PART OF ALL THE ASSIGNING LENDER’S RIGHTS AND OBLIGATIONS IN
RESPECT OF ONE CLASS OF COMMITMENTS

 

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OR LOANS, (IV) THE PARTIES TO EACH ASSIGNMENT SHALL EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT AN ASSIGNMENT AND ACCEPTANCE, TOGETHER WITH A PROCESSING
AND RECORDATION FEE OF $3,500, AND (V) THE ASSIGNEE, IF IT SHALL NOT BE A
LENDER, SHALL DELIVER TO THE ADMINISTRATIVE AGENT AN ADMINISTRATIVE
QUESTIONNAIRE; AND PROVIDED, FURTHER THAT ANY CONSENT OF BORROWERS OTHERWISE
REQUIRED UNDER THIS PARAGRAPH SHALL NOT BE REQUIRED IF A DEFAULT OR AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING.  SUBJECT TO ACCEPTANCE AND RECORDING
THEREOF PURSUANT TO PARAGRAPH (D) OF THIS SECTION 11.04, FROM AND AFTER THE
EFFECTIVE DATE SPECIFIED IN EACH ASSIGNMENT AND ACCEPTANCE THE ASSIGNEE
THEREUNDER SHALL BE A PARTY HERETO AND, TO THE EXTENT OF THE INTEREST ASSIGNED
BY SUCH ASSIGNMENT AND ACCEPTANCE, HAVE THE RIGHTS AND OBLIGATIONS OF A LENDER
UNDER THIS AGREEMENT (PROVIDED THAT ANY LIABILITY OF BORROWERS TO SUCH ASSIGNEE
UNDER SECTION 2.12, 2.13 OR 2.15 SHALL BE LIMITED TO THE AMOUNT, IF ANY, THAT
WOULD HAVE BEEN PAYABLE THEREUNDER BY BORROWERS IN THE ABSENCE OF SUCH
ASSIGNMENT, EXCEPT TO THE EXTENT ANY SUCH AMOUNTS ARE ATTRIBUTABLE TO A CHANGE
IN LAW OCCURRING AFTER THE DATE OF SUCH ASSIGNMENT), AND THE ASSIGNING LENDER
THEREUNDER SHALL, TO THE EXTENT OF THE INTEREST ASSIGNED BY SUCH ASSIGNMENT AND
ACCEPTANCE, BE RELEASED FROM ITS OBLIGATIONS UNDER THIS AGREEMENT (AND, IN THE
CASE OF AN ASSIGNMENT AND ACCEPTANCE COVERING ALL OF THE ASSIGNING LENDER’S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, SUCH LENDER SHALL CEASE TO BE A
PARTY HERETO BUT SHALL CONTINUE TO BE ENTITLED TO THE BENEFITS OF SECTIONS 2.12,
2.13, 2.15 AND 11.03).  ANY ASSIGNMENT OR TRANSFER BY A LENDER OF RIGHTS OR
OBLIGATIONS UNDER THIS AGREEMENT THAT DOES NOT COMPLY WITH THIS PARAGRAPH SHALL
BE TREATED FOR PURPOSES OF THIS AGREEMENT AS A SALE BY SUCH LENDER OF A
PARTICIPATION IN SUCH RIGHTS AND OBLIGATIONS IN ACCORDANCE WITH PARAGRAPH (E) OF
THIS SECTION 11.04.

 

(C)                                  THE ADMINISTRATIVE AGENT, ACTING FOR THIS
PURPOSE AS AN AGENT OF BORROWERS, SHALL MAINTAIN AT ONE OF ITS OFFICES IN THE
CITY OF NEW YORK A COPY OF EACH ASSIGNMENT AND ACCEPTANCE DELIVERED TO IT AND A
REGISTER FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF THE LENDERS, AND THE
COMMITMENT OF, AND PRINCIPAL AMOUNT OF THE LOANS AND LC DISBURSEMENTS OWING TO,
EACH LENDER PURSUANT TO THE TERMS HEREOF FROM TIME TO TIME (THE “REGISTER”). 
THE ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE IN THE ABSENCE OF MANIFEST
ERROR, AND BORROWERS, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE
ISSUING BANK AND THE LENDERS MAY TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE
REGISTER PURSUANT TO THE TERMS HEREOF AS A LENDER HEREUNDER FOR ALL PURPOSES OF
THIS AGREEMENT, NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE REGISTER SHALL BE
AVAILABLE FOR INSPECTION BY BORROWERS, THE ISSUING BANK, THE ADMINISTRATIVE
AGENT, THE COLLATERAL AGENT, THE SWINGLINE LENDER AND ANY LENDER (WITH RESPECT
TO ITS OWN INTEREST ONLY), AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON
REASONABLE PRIOR NOTICE.

 

(D)                                 UPON ITS RECEIPT OF A DULY COMPLETED
ASSIGNMENT AND ACCEPTANCE EXECUTED BY AN ASSIGNING LENDER AND AN ASSIGNEE, THE
ASSIGNEE’S COMPLETED ADMINISTRATIVE QUESTIONNAIRE (UNLESS THE ASSIGNEE SHALL
ALREADY BE A LENDER HEREUNDER), THE PROCESSING AND RECORDATION FEE REFERRED TO
IN PARAGRAPH (B) OF THIS SECTION 11.04, ANY WRITTEN CONSENT TO SUCH ASSIGNMENT
REQUIRED BY PARAGRAPH (B) OF THIS SECTION 11.04, AND SUCH TAX FORMS OR
INFORMATION DESCRIBED IN SECTION 4.01(S) AS THE ADMINISTRATIVE AGENT SHALL
REQUEST, THE ADMINISTRATIVE AGENT SHALL ACCEPT SUCH ASSIGNMENT AND ACCEPTANCE
AND RECORD THE INFORMATION CONTAINED THEREIN IN THE REGISTER.  NO ASSIGNMENT
SHALL BE EFFECTIVE FOR PURPOSES OF THIS AGREEMENT UNLESS IT HAS BEEN RECORDED IN
THE REGISTER AS PROVIDED IN THIS PARAGRAPH.

 

(E)                                  ANY LENDER MAY, WITHOUT THE CONSENT OF
BORROWERS, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE SWINGLINE LENDER,
SELL PARTICIPATIONS TO ONE OR MORE BANKS OR OTHER ENTITIES

 

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(A “PARTICIPANT”) IN ALL OR A PORTION OF SUCH LENDER’S RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENT AND THE LOANS
OWING TO IT); PROVIDED THAT (I) SUCH LENDER’S OBLIGATIONS UNDER THIS AGREEMENT
SHALL REMAIN UNCHANGED, (II) SUCH LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE
OTHER PARTIES HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS AND
(III) BORROWERS, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING
BANK AND THE OTHER LENDERS SHALL CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH
LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT.  ANY AGREEMENT OR INSTRUMENT PURSUANT TO WHICH A LENDER SELLS SUCH A
PARTICIPATION SHALL PROVIDE THAT SUCH LENDER SHALL RETAIN THE SOLE RIGHT TO
ENFORCE THE LOAN DOCUMENTS AND TO APPROVE ANY AMENDMENT, MODIFICATION OR WAIVER
OF ANY PROVISION OF THE LOAN DOCUMENTS; PROVIDED THAT SUCH AGREEMENT OR
INSTRUMENT MAY PROVIDE THAT SUCH LENDER WILL NOT, WITHOUT THE CONSENT OF THE
PARTICIPANT, AGREE TO ANY AMENDMENT, MODIFICATION OR WAIVER DESCRIBED IN THE
FIRST PROVISO TO SECTION 11.02(B) THAT AFFECTS SUCH PARTICIPANT.  SUBJECT TO
PARAGRAPH (F) OF THIS SECTION 11.04, BORROWERS AGREE THAT EACH PARTICIPANT SHALL
BE ENTITLED TO THE BENEFITS OF SECTIONS 2.12, 2.13 AND 2.15 TO THE SAME EXTENT
AS IF IT WERE A LENDER AND HAD ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO
PARAGRAPH (B) OF THIS SECTION 11.04.  TO THE EXTENT PERMITTED BY LAW, EACH
PARTICIPANT ALSO SHALL BE ENTITLED TO THE BENEFITS OF SECTION 11.08 AS THOUGH IT
WERE A LENDER; PROVIDED THAT SUCH PARTICIPANT AGREES TO BE SUBJECT TO
SECTION 2.14(C) AS THOUGH IT WERE A LENDER.  EACH LENDER SHALL, ACTING FOR THIS
PURPOSE AS AN AGENT OF THE BORROWERS, MAINTAIN AT ONE OF ITS OFFICES A REGISTER
FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF ITS PARTICIPANTS, AND THE
AMOUNT AND TERMS OF ITS PARTICIPATIONS, PROVIDED THAT NO LENDER SHALL BE
REQUIRED TO DISCLOSE OR SHARE THE INFORMATION CONTAINED IN SUCH REGISTER WITH
THE BORROWERS OR ANY OTHER PARTY, EXCEPT AS REQUIRED BY APPLICABLE LAW.

 

(F)                                    A PARTICIPANT SHALL NOT BE ENTITLED TO
RECEIVE ANY GREATER PAYMENT UNDER SECTION 2.12, 2.13 OR 2.15 THAN THE APPLICABLE
LENDER WOULD HAVE BEEN ENTITLED TO RECEIVE WITH RESPECT TO THE PARTICIPATION
SOLD TO SUCH PARTICIPANT, UNLESS THE SALE OF THE PARTICIPATION TO SUCH
PARTICIPANT IS MADE WITH THE PRIOR WRITTEN CONSENT OF BORROWERS (WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED).  A PARTICIPANT THAT WOULD BE A
FOREIGN LENDER IF IT WERE A LENDER SHALL NOT BE ENTITLED TO THE BENEFITS OF
SECTION 2.15 UNLESS BORROWERS ARE NOTIFIED OF THE PARTICIPATION SOLD TO SUCH
PARTICIPANT AND SUCH PARTICIPANT AGREES, FOR THE BENEFIT OF BORROWERS, TO COMPLY
WITH SECTIONS 2.15(E) AND (F) AS THOUGH IT WERE A LENDER.

 

(G)                                 ANY LENDER MAY AT ANY TIME PLEDGE OR ASSIGN
A SECURITY INTEREST IN ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT TO
SECURE OBLIGATIONS OF SUCH LENDER, INCLUDING ANY PLEDGE OR ASSIGNMENT TO SECURE
OBLIGATIONS TO A FEDERAL RESERVE BANK, AND THIS SECTION 11.04 SHALL NOT APPLY TO
ANY SUCH PLEDGE OR ASSIGNMENT OF A SECURITY INTEREST; PROVIDED THAT NO SUCH
PLEDGE OR ASSIGNMENT OF A SECURITY INTEREST SHALL RELEASE A LENDER FROM ANY OF
ITS OBLIGATIONS HEREUNDER OR SUBSTITUTE ANY SUCH PLEDGEE OR ASSIGNEE FOR SUCH
LENDER AS A PARTY HERETO.  IN THE CASE OF ANY LENDER THAT IS A FUND THAT INVESTS
IN BANK LOANS, SUCH LENDER MAY, WITHOUT THE CONSENT OF BORROWERS OR THE
ADMINISTRATIVE AGENT, COLLATERALLY ASSIGN OR PLEDGE ALL OR ANY PORTION OF ITS
RIGHTS UNDER THIS AGREEMENT, INCLUDING THE LOANS AND NOTES OR ANY OTHER
INSTRUMENT EVIDENCING ITS RIGHTS AS A LENDER UNDER THIS AGREEMENT, TO ANY HOLDER
OF, TRUSTEE FOR, OR ANY OTHER REPRESENTATIVE OF HOLDERS OF, OBLIGATIONS OWED OR
SECURITIES ISSUED, BY SUCH FUND, AS SECURITY FOR SUCH OBLIGATIONS OR SECURITIES;
PROVIDED THAT THE DOCUMENTATION GOVERNING OR EVIDENCING SUCH COLLATERAL
ASSIGNMENT OR PLEDGE SHALL PROVIDE THAT ANY FORECLOSURE OR SIMILAR ACTION BY
SUCH TRUSTEE OR REPRESENTATIVE SHALL BE SUBJECT TO THE PROVISIONS OF THIS
SECTION 11.04 CONCERNING ASSIGNMENTS AND SHALL NOT BE EFFECTIVE TO TRANSFER ANY
RIGHTS UNDER THIS AGREEMENT OR IN ANY

 

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LOAN, NOTE OR OTHER INSTRUMENT EVIDENCING ITS RIGHTS AS A LENDER UNDER THIS
AGREEMENT UNLESS THE REQUIREMENTS OF SECTION 11.04 CONCERNING ASSIGNMENTS ARE
FULLY SATISFIED.

 

SECTION 11.05  SURVIVAL OF AGREEMENT.  ALL COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES MADE BY THE LOAN PARTIES IN THE LOAN DOCUMENTS
AND IN THE CERTIFICATES OR OTHER INSTRUMENTS DELIVERED IN CONNECTION WITH OR
PURSUANT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE CONSIDERED TO
HAVE BEEN RELIED UPON BY THE OTHER PARTIES HERETO AND SHALL SURVIVE THE
EXECUTION AND DELIVERY OF THE LOAN DOCUMENTS AND THE MAKING OF ANY LOANS AND
ISSUANCE OF ANY LETTERS OF CREDIT, REGARDLESS OF ANY INVESTIGATION MADE BY ANY
SUCH OTHER PARTY OR ON ITS BEHALF AND NOTWITHSTANDING THAT THE AGENTS, THE
ISSUING BANK OR ANY LENDER MAY HAVE HAD NOTICE OR KNOWLEDGE OF ANY DEFAULT OR
INCORRECT REPRESENTATION OR WARRANTY AT THE TIME ANY CREDIT IS EXTENDED
HEREUNDER, AND SHALL CONTINUE IN FULL FORCE AND EFFECT AS LONG AS THE PRINCIPAL
OF OR ANY ACCRUED INTEREST ON ANY LOAN OR ANY FEE OR ANY OTHER AMOUNT PAYABLE
UNDER THIS AGREEMENT IS OUTSTANDING AND UNPAID OR ANY LETTER OF CREDIT IS
OUTSTANDING AND SO LONG AS THE COMMITMENTS HAVE NOT EXPIRED OR TERMINATED.  THE
PROVISIONS OF SECTIONS 2.12, 2.13, 2.15 AND 11.03 AND ARTICLE X SHALL SURVIVE
AND REMAIN IN FULL FORCE AND EFFECT REGARDLESS OF THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY, THE REPAYMENT OF THE LOANS, THE EXPIRATION OR
TERMINATION OF THE LETTERS OF CREDIT AND THE COMMITMENTS OR THE TERMINATION OF
THIS AGREEMENT OR ANY PROVISION HEREOF.

 

SECTION 11.06  COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION.
  (A)  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS (AND BY DIFFERENT PARTIES
HERETO ON DIFFERENT COUNTERPARTS), EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL,
BUT ALL OF WHICH WHEN TAKEN TOGETHER SHALL CONSTITUTE A SINGLE CONTRACT.  THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE FEE LETTER CONSTITUTE THE ENTIRE
CONTRACT AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDE
ANY AND ALL PREVIOUS AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, RELATING TO
THE SUBJECT MATTER HEREOF.  EXCEPT AS PROVIDED IN SECTION 4.01, THIS AGREEMENT
SHALL BECOME EFFECTIVE WHEN IT SHALL HAVE BEEN EXECUTED BY THE ADMINISTRATIVE
AGENT AND WHEN THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED COUNTERPARTS HEREOF
WHICH, WHEN TAKEN TOGETHER, BEAR THE SIGNATURES OF EACH OF THE OTHER PARTIES
HERETO, AND THEREAFTER SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE
PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.  DELIVERY OF AN
EXECUTED COUNTERPART OF A SIGNATURE PAGE OF THIS AGREEMENT BY TELECOPY SHALL BE
EFFECTIVE AS DELIVERY OF A MANUALLY EXECUTED COUNTERPART OF THIS AGREEMENT.

 

(B)                                 THE WORDS “EXECUTION,” “SIGNED,”
“SIGNATURE,” AND WORDS OF LIKE IMPORT IN ANY ASSIGNMENT AND ACCEPTANCE SHALL BE
DEEMED TO INCLUDE ELECTRONIC SIGNATURES OR THE KEEPING OF RECORDS IN ELECTRONIC
FORM, EACH OF WHICH SHALL BE OF THE SAME LEGAL EFFECT, VALIDITY OR
ENFORCEABILITY AS A MANUALLY EXECUTED SIGNATURE OR THE USE OF A PAPER-BASED
RECORDKEEPING SYSTEM, AS THE CASE MAY BE, TO THE EXTENT AND AS PROVIDED FOR IN
ANY APPLICABLE REQUIREMENT OF LAW, INCLUDING THE FEDERAL ELECTRONIC SIGNATURES
IN GLOBAL AND NATIONAL COMMERCE ACT, THE NEW YORK STATE ELECTRONIC SIGNATURES
AND RECORDS ACT, OR ANY OTHER SIMILAR STATE LAWS BASED ON THE UNIFORM ELECTRONIC
TRANSACTIONS ACT.

 

SECTION 11.07  SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT HELD TO BE
INVALID, ILLEGAL OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH
JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY, ILLEGALITY OR
UNENFORCEABILITY WITHOUT AFFECTING THE VALIDITY, LEGALITY AND

 

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ENFORCEABILITY OF THE REMAINING PROVISIONS HEREOF; AND THE INVALIDITY OF A
PARTICULAR PROVISION IN A PARTICULAR JURISDICTION SHALL NOT INVALIDATE SUCH
PROVISION IN ANY OTHER JURISDICTION.

 

SECTION 11.08  RIGHT OF SETOFF.  IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND
BE CONTINUING, EACH LENDER AND EACH OF ITS AFFILIATES ARE HEREBY AUTHORIZED AT
ANY TIME AND FROM TIME TO TIME, TO THE FULLEST EXTENT PERMITTED BY LAW, TO SET
OFF AND APPLY ANY AND ALL DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND,
PROVISIONAL OR FINAL, BUT EXCLUDING TRUST ACCOUNTS) AT ANY TIME HELD AND OTHER
OBLIGATIONS AT ANY TIME OWING BY SUCH LENDER OR AFFILIATE TO OR FOR THE CREDIT
OR THE ACCOUNT OF BORROWERS AGAINST ANY OF AND ALL THE OBLIGATIONS OF BORROWERS
NOW OR HEREAFTER EXISTING UNDER THIS AGREEMENT HELD BY SUCH LENDER, IRRESPECTIVE
OF WHETHER OR NOT SUCH LENDER SHALL HAVE MADE ANY DEMAND UNDER THIS AGREEMENT
AND ALTHOUGH SUCH OBLIGATIONS MAY BE UNMATURED.  THE RIGHTS OF EACH LENDER UNDER
THIS SECTION 11.08 ARE IN ADDITION TO OTHER RIGHTS AND REMEDIES (INCLUDING OTHER
RIGHTS OF SETOFF) WHICH SUCH LENDER MAY HAVE.

 

SECTION 11.09  GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.  (A)  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.

 

(B)                                 EACH LOAN PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK
COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW
YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE ISSUING BANK OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(C)                                  EACH LOAN PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO
SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS
SECTION 11.09.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(D)                                 EACH PARTY TO THIS AGREEMENT IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 11.01.  NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL AFFECT
THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.

 

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SECTION 11.10  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 11.10.

 

SECTION 11.11  HEADINGS.  ARTICLE AND SECTION HEADINGS AND THE TABLE OF CONTENTS
USED HEREIN ARE FOR CONVENIENCE OF REFERENCE ONLY, ARE NOT PART OF THIS
AGREEMENT AND SHALL NOT AFFECT THE CONSTRUCTION OF, OR BE TAKEN INTO
CONSIDERATION IN INTERPRETING, THIS AGREEMENT.

 

SECTION 11.12  CONFIDENTIALITY.  EACH OF THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE ISSUING BANK AND THE LENDERS AGREES TO MAINTAIN THE
CONFIDENTIALITY OF THE INFORMATION (AS DEFINED BELOW), EXCEPT THAT INFORMATION
MAY BE DISCLOSED (A) TO ITS AND ITS AFFILIATES’ DIRECTORS, OFFICERS, EMPLOYEES
AND AGENTS, INCLUDING ACCOUNTANTS, LEGAL COUNSEL AND OTHER ADVISORS (IT BEING
UNDERSTOOD THAT THE PERSONS TO WHOM SUCH DISCLOSURE IS MADE WILL BE INFORMED OF
THE CONFIDENTIAL NATURE OF SUCH INFORMATION AND INSTRUCTED TO KEEP SUCH
INFORMATION CONFIDENTIAL PURSUANT TO THE TERMS HEREOF), (B) TO THE EXTENT
REQUESTED BY ANY REGULATORY AUTHORITY, (C) TO THE EXTENT REQUIRED BY APPLICABLE
LAWS OR REGULATIONS OR BY ANY SUBPOENA OR SIMILAR LEGAL PROCESS, (D) TO ANY
OTHER PARTY TO THIS AGREEMENT, (E) IN CONNECTION WITH THE EXERCISE OF ANY
REMEDIES HEREUNDER OR ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE ENFORCEMENT OF RIGHTS HEREUNDER OR THEREUNDER,
(F) SUBJECT TO AN AGREEMENT CONTAINING PROVISIONS SUBSTANTIALLY THE SAME AS
THOSE OF THIS SECTION 11.12, TO (I) ANY ASSIGNEE OF OR PARTICIPANT IN, OR ANY
PROSPECTIVE ASSIGNEE OF OR PARTICIPANT IN, ANY OF ITS RIGHTS OR OBLIGATIONS
UNDER THIS AGREEMENT OR (II) ANY ACTUAL OR PROSPECTIVE COUNTERPARTY (OR ITS
ADVISORS) TO ANY SWAP OR DERIVATIVE TRANSACTION RELATING TO A BORROWER AND ITS
OBLIGATIONS, (G) WITH THE CONSENT OF BORROWERS OR (H) TO THE EXTENT SUCH
INFORMATION (I) IS PUBLICLY AVAILABLE AT THE TIME OF DISCLOSURE OR BECOMES
PUBLICLY AVAILABLE OTHER THAN AS A RESULT OF A BREACH OF THIS SECTION 11.12 OR
(II) BECOMES AVAILABLE TO THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE
ISSUING BANK OR ANY LENDER ON A NONCONFIDENTIAL BASIS FROM A SOURCE OTHER THAN
BORROWERS OR ANY SUBSIDIARY.  FOR THE PURPOSES OF THIS SECTION 11.12,
“INFORMATION” MEANS ALL INFORMATION RECEIVED FROM BORROWERS OR ANY SUBSIDIARY
RELATING TO BORROWERS OR ANY SUBSIDIARY OR ITS BUSINESS, OTHER THAN ANY SUCH
INFORMATION THAT IS AVAILABLE TO THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR
ANY LENDER ON A NONCONFIDENTIAL BASIS PRIOR TO DISCLOSURE BY BORROWERS OR ANY
SUBSIDIARY; PROVIDED THAT, IN THE CASE OF INFORMATION RECEIVED FROM A BORROWER
OR ANY SUBSIDIARY AFTER THE DATE HEREOF, SUCH INFORMATION IS CLEARLY IDENTIFIED
AT THE TIME OF DELIVERY AS CONFIDENTIAL.  ANY PERSON REQUIRED TO MAINTAIN THE
CONFIDENTIALITY OF INFORMATION AS PROVIDED IN THIS SECTION 11.12 SHALL BE
CONSIDERED TO HAVE COMPLIED WITH ITS OBLIGATION TO DO SO IF SUCH PERSON HAS
EXERCISED THE SAME DEGREE OF CARE TO MAINTAIN THE CONFIDENTIALITY OF SUCH
INFORMATION AS SUCH PERSON WOULD ACCORD TO ITS OWN CONFIDENTIAL INFORMATION. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN OR IN ANY OTHER
WRITTEN OR ORAL UNDERSTANDING OR AGREEMENT TO WHICH THE PARTIES HERETO ARE
PARTIES OR BY WHICH THEY ARE BOUND, THE PARTIES ACKNOWLEDGE AND AGREE THAT
(I) ANY OBLIGATIONS OF CONFIDENTIALITY CONTAINED HEREIN AND THEREIN DO NOT APPLY
AND HAVE NOT APPLIED FROM THE COMMENCEMENT OF DISCUSSIONS BETWEEN THE PARTIES TO
THE TAX TREATMENT AND TAX STRUCTURE OF THE

 

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TRANSACTIONS (AND ANY RELATED TRANSACTIONS OR ARRANGEMENTS), AND (II) EACH PARTY
(AND EACH OF ITS EMPLOYEES, REPRESENTATIVES, OR OTHER AGENTS) MAY DISCLOSE TO
ANY AND ALL PERSONS, WITHOUT LIMITATION OF ANY KIND, THE TAX TREATMENT AND TAX
STRUCTURE OF THE TRANSACTIONS AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS
OR OTHER TAX ANALYSES) THAT ARE PROVIDED TO SUCH PARTY RELATING TO SUCH TAX
TREATMENT AND TAX STRUCTURE, ALL WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.6011-4; PROVIDED, HOWEVER, THAT EACH PARTY RECOGNIZES THAT THE
PRIVILEGE EACH HAS TO MAINTAIN, IN ITS SOLE DISCRETION, THE CONFIDENTIALITY OF A
COMMUNICATION RELATING TO THE TRANSACTION, INCLUDING A CONFIDENTIAL
COMMUNICATION WITH ITS ATTORNEY OR A CONFIDENTIAL COMMUNICATION WITH A FEDERALLY
AUTHORIZED TAX PRACTITIONER UNDER SECTION 7525 OF THE CODE, IS NOT INTENDED TO
BE AFFECTED BY THE FOREGOING.

 

SECTION 11.13  INTEREST RATE LIMITATION.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IF AT ANY TIME THE INTEREST RATE APPLICABLE TO ANY LOAN, TOGETHER WITH
ALL FEES, CHARGES AND OTHER AMOUNTS WHICH ARE TREATED AS INTEREST ON SUCH LOAN
UNDER APPLICABLE LAW (COLLECTIVELY, THE “CHARGES”), SHALL EXCEED THE MAXIMUM
LAWFUL RATE (THE “MAXIMUM RATE”) WHICH MAY BE CONTRACTED FOR, CHARGED, TAKEN,
RECEIVED OR RESERVED BY THE LENDER HOLDING SUCH LOAN IN ACCORDANCE WITH
APPLICABLE LAW, THE RATE OF INTEREST PAYABLE IN RESPECT OF SUCH LOAN HEREUNDER,
TOGETHER WITH ALL CHARGES PAYABLE IN RESPECT THEREOF, SHALL BE LIMITED TO THE
MAXIMUM RATE AND, TO THE EXTENT LAWFUL, THE INTEREST AND CHARGES THAT WOULD HAVE
BEEN PAYABLE IN RESPECT OF SUCH LOAN BUT WERE NOT PAYABLE AS A RESULT OF THE
OPERATION OF THIS SECTION 11.13 SHALL BE CUMULATED AND THE INTEREST AND CHARGES
PAYABLE TO SUCH LENDER IN RESPECT OF OTHER LOANS OR PERIODS SHALL BE INCREASED
(BUT NOT ABOVE THE MAXIMUM RATE THEREFOR) UNTIL SUCH CUMULATED AMOUNT, TOGETHER
WITH INTEREST THEREON AT THE FEDERAL FUNDS EFFECTIVE RATE TO THE DATE OF
REPAYMENT, SHALL HAVE BEEN RECEIVED BY SUCH LENDER.

 

SECTION 11.14  LENDER ADDENDUM.  EACH LENDER TO BECOME A PARTY TO THIS AGREEMENT
ON THE DATE HEREOF SHALL DO SO BY DELIVERING TO THE ADMINISTRATIVE AGENT A
LENDER ADDENDUM DULY EXECUTED BY SUCH LENDER, THE BORROWERS AND THE
ADMINISTRATIVE AGENT.

 

SECTION 11.15  USA PATRIOT ACT NOTICE.  EACH LENDER THAT IS SUBJECT TO THE ACT
(AS HEREINAFTER DEFINED) AND THE ADMINISTRATIVE AGENT (FOR ITSELF AND NOT ON
BEHALF OF ANY LENDER) HEREBY NOTIFIES BORROWER THAT PURSUANT TO THE REQUIREMENTS
OF THE USA PATRIOT ACT (TITLE III OF PUB. L. 107-56 (SIGNED INTO LAW OCTOBER 26,
2001)) (THE “ACT”), IT IS REQUIRED TO OBTAIN, VERIFY AND RECORD INFORMATION THAT
IDENTIFIES BORROWER, WHICH INFORMATION INCLUDES THE NAME, ADDRESS AND TAX
IDENTIFICATION NUMBER OF BORROWER AND OTHER INFORMATION REGARDING BORROWER THAT
WILL ALLOW SUCH LENDER OR THE ADMINISTRATIVE AGENT, AS APPLICABLE, TO IDENTIFY
BORROWER IN ACCORDANCE WITH THE ACT.  THIS NOTICE IS GIVEN IN ACCORDANCE WITH
THE REQUIREMENTS OF THE ACT AND IS EFFECTIVE AS TO THE LENDERS AND THE
ADMINISTRATIVE AGENT.

 

[Signature Pages Follow]

 

127

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

 

 

D 56, INC., as a Borrower

 

 

 

 

 

By:

/s/ Susan E. Engel

 

 

Name:

Susan E. Engel

 

 

Title:

Chairwoman & Chief Executive Officer

 

 

 

 

 

DEPARTMENT 56 RETAIL, INC., as a Borrower

 

 

 

 

 

By:

/s/ Susan E. Engel

 

 

Name:

Susan E. Engel

 

 

Title:

President

 

 

 

 

 

TIME TO CELEBRATE, INC., as a Borrower

 

 

 

 

 

 

 

By:

/s/ Susan E. Engel

 

 

Name:

Susan E. Engel

 

 

Title:

Chairwoman & Chief Executive Officer

 

 

 

 

 

LENOX, INCORPORATED, as a Borrower

 

 

 

 

 

By:

/s/ James G. Berwick

 

 

Name:

James G. Berwick

 

 

Title:

Chief Financial Officer

 

 

 

 

 

DEPARTMENT 56, INC., as a Guarantor

 

 

 

 

 

By:

/s/ Susan E. Engel

 

 

Name:

Susan E. Engel

 

 

Title:

Chairwoman & Chief Executive Officer

 

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

 

 

SUBSIDIARY GUARANTORS:

 

 

 

DEPARTMENT 56 SALES, INC.

 

 

 

 

 

By:

/s/ Susan E. Engel

 

 

Name:

Susan E. Engel

 

 

Title:

Chairwoman

 

 

 

 

 

 

 

CAN 56, INC.

 

 

 

 

 

By:

/s/ Susan E. Engel

 

 

Name:

Susan E. Engel

 

 

Title:

Chief Executive Officer

 

 

 

 

 

FL 56 INTERMEDIATE CORP.

 

 

 

 

 

By:

/s/ Susan E. Engel

 

 

Name:

Susan E. Engel

 

 

Title:

President & Chief Executive Officer

 

 

 

 

 

DID, INCORPORATED

 

 

 

 

 

By:

/s/ Edward Paolella

 

 

Name:

Edward Paolella

 

 

Title:

Vice President & Treasurer

 

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

 

 

UBS AG, STAMFORD BRANCH, as Issuing Bank
and Administrative Agent

 

 

 

 

 

By:

/s/ Wilfred V. Saint

 

 

 

Name:

Wilfred V. Saint

 

 

Title:

Director

 

 

 

Banking Products

 

 

 

Services, US

 

 

 

 

 

 

 

By:

/s/ Joselin Fernandes

 

 

 

Name:

Joselin Fernandes

 

 

Title:

Associate Director

 

 

 

Banking Products

 

 

 

Services, US

 

 

 

 

UBS SECURITIES LLC, as Arranger and Co-
Syndication Agent

 

 

 

 

 

By:

/s/ John C. Crockett

 

 

 

Name:

John C. Crockett

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ David A. Juge

 

 

 

Name:

David A. Juge

 

 

Title:

Managing Director

 

 

 

 

 

UBS LOAN FINANCE LLC, as Swingline Lender

 

 

 

 

 

By:

/s/ Wilfred V. Saint

 

 

 

Name:

Wilfred V. Saint

 

 

Title:

Director

 

 

 

Banking Products

 

 

 

Services, US

 

 

 

 

 

By:

/s/ Joselin Fernandes

 

 

 

Name:

Joselin Fernandes

 

 

Title:

Associate Director

 

 

 

Banking Products

 

 

 

Services, US

 

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

 

 

JPMORGAN CHASE BANK, N.A., as Collateral
Agent, Co-Syndication Agent and Issuing Bank

 

 

 

 

 

By:

/s/ Richard Marcus

 

 

 

Name:

Richard Marcus

 

 

Title:

Vice President

 

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

 

 

WELLS FARGO FOOTHILL, LLC, as Co-
Documentation Agent

 

 

 

 

 

By:

/s/ Sanat Amladi

 

 

 

Name:

SANAT AMLADI

 

 

Title:

V.P.

 

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

 

 

BANK OF AMERICA, N.A., as Co-Documentation Agent

 

 

 

 

 

By:

/s/ Allan R. Juleus

 

 

 

Name:

Allan R. Juleus

 

 

Title:

SVP

 

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

 

Applicable Margin

 

 

 

Revolving Loans

 

Applicable Fee

 

Leverage Ratio

 

Eurodollar

 

ABR

 

 

Level I: > 3.5:1.0

 

2.50

%

0.75

%

0.375

%

Level II: < 3.5:1.0 but > 2.5:1.0

 

2.25

%

0.50

%

0.375

%

Level III: < 2.5:1.0 but > 1.5:1.0

 

2.00

%

0.25

%

0.375

%

Level IV: < 1.5:1.0

 

1.75

%

0.00

%

0.375

%

 

Each change in the Applicable Margin or Applicable Fee resulting from a change
in the Leverage Ratio shall be effective with respect to all Loans and Letters
of Credit outstanding on and after the date of delivery to the Administrative
Agent of the financial statements and certificates required by
Section 5.01(a) or (b) and Section 5.01(d), respectively, indicating such change
until the date immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change.  Notwithstanding the
foregoing, the Leverage Ratio shall be deemed to be (i) in Level II for purposes
of determining the Applicable Margin and Applicable Fee from the Closing Date to
the date of delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(d) for the
fiscal quarter ending at least six months after the Closing Date and (ii) in
Level I for purposes of determining the Applicable Margin and Applicable Fee at
any time (A) during which Borrowers have failed to deliver the financial
statements and certificates required by Section 5.01(a) or (b) and
Section 5.01(d), respectively, and (B) during the existence of an Event of
Default.

 

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