exv10w2






Exhibit 10.2




LOAN AND SECURITY AGREEMENT




by and among




NCI GROUP, INC.

ROBERTSON-CECO II CORPORATION

as Borrowers




and




NCI BUILDING SYSTEMS, INC.

STEELBUILDING.COM, INC.

as Guarantors




THE LENDERS AND ISSUING BANK FROM TIME TO TIME PARTY HERETO




WELLS FARGO FOOTHILL, LLC,

as Administrative Agent and Co-Collateral Agent




BANK OF AMERICA, N.A.

GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Collateral Agents




WELLS FARGO FOOTHILL, LLC

BANK OF AMERICA, N.A.

as Joint Lead Arrangers




and




WELLS FARGO FOOTHILL, LLC

BANK OF AMERICA, N.A.

GENERAL ELECTRIC CAPITAL CORPORATION

as Joint Lead Bookrunners




Dated: October 20, 2009





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	SECTION 1.

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 2.

	 	CREDIT FACILITIES
	 	 	52	 
	2.1

	 	Revolving Loans
	 	 	52	 
	2.2

	 	Swing Line Loans
	 	 	52	 
	2.3

	 	Letters of Credit
	 	 	53	 
	2.4

	 	Requests for Borrowings
	 	 	57	 
	2.5

	 	Mandatory Prepayments
	 	 	58	 
	2.6

	 	Optional Prepayments
	 	 	59	 
	2.7

	 	Increase in Maximum Credit
	 	 	59	 
	2.8

	 	Decrease in Maximum Credit
	 	 	60	 
	2.9

	 	Joint and Several Liability of Borrowers
	 	 	61	 
	2.10

	 	Commitments
	 	 	62	 
	 
	 	 	 	 	 	 
	SECTION 3.

	 	INTEREST AND FEES
	 	 	62	 
	3.1

	 	Interest
	 	 	62	 
	3.2

	 	Fees
	 	 	63	 
	3.3

	 	Inability to Determine Applicable Interest Rate
	 	 	64	 
	3.4

	 	Illegality
	 	 	65	 
	3.5

	 	Increased Costs
	 	 	65	 
	3.6

	 	Capital Requirements
	 	 	66	 
	3.7

	 	Delay in Requests
	 	 	66	 
	3.8

	 	Mitigation; Replacement of Lenders
	 	 	66	 
	3.9

	 	Funding Losses
	 	 	67	 
	3.10

	 	Maximum Interest
	 	 	67	 
	3.11

	 	No Requirement of Match Funding
	 	 	68	 
	 
	 	 	 	 	 	 
	SECTION 4.

	 	CONDITIONS PRECEDENT
	 	 	68	 
	4.1

	 	Conditions Precedent to Initial Loans and Letters of Credit
	 	 	68	 
	4.2

	 	Conditions Precedent to All Loans and Letters of Credit
	 	 	71	 
	 
	 	 	 	 	 	 
	SECTION 5.

	 	GRANT AND PERFECTION OF SECURITY INTEREST
	 	 	72	 
	5.1

	 	Grant of Security Interest
	 	 	72	 
	5.2

	 	Perfection of Security Interests
	 	 	73	 
	5.3

	 	Special Provisions Relating to Collateral
	 	 	78	 
	5.4

	 	Intercreditor Relations
	 	 	78	 
	 
	 	 	 	 	 	 
	SECTION 6.

	 	COLLECTION AND ADMINISTRATION
	 	 	78	 
	6.1

	 	Borrowers’ Loan Accounts
	 	 	78	 
	6.2

	 	Statements
	 	 	78	 
	6.3

	 	Lenders’ Evidence of Debt
	 	 	79	 






 









 






	 	 	 	 	 	 	 
	6.4

	 	Register
	 	 	79	 
	6.5

	 	Notes
	 	 	79	 
	6.6

	 	Cash Management; Collection of Proceeds of Collateral
	 	 	79	 
	6.7

	 	Payments
	 	 	81	 
	6.8

	 	Taxes
	 	 	82	 
	6.9

	 	Use of Proceeds
	 	 	86	 
	6.10

	 	Appointment of Administrative Borrower as Agent for
Requesting Loans and Receipts of Loans and Statements
	 	 	87	 
	6.11

	 	Pro Rata Treatment
	 	 	87	 
	6.12

	 	Sharing of Payments, Etc.
	 	 	87	 
	6.13

	 	Settlement Procedures
	 	 	88	 
	6.14

	 	Obligations Several; Independent Nature of Lenders’ Rights
	 	 	94	 
	6.15

	 	Bank Products
	 	 	94	 
	 
	 	 	 	 	 	 
	SECTION 7.

	 	COLLATERAL REPORTING AND COVENANTS
	 	 	94	 
	7.1

	 	Collateral Reporting
	 	 	94	 
	7.2

	 	Accounts Covenants
	 	 	96	 
	7.3

	 	Inventory Covenants
	 	 	97	 
	7.4

	 	Equipment and Real Property Covenants
	 	 	97	 
	7.5

	 	Power of Attorney
	 	 	98	 
	7.6

	 	Right to Cure
	 	 	98	 
	7.7

	 	Access to Premises
	 	 	99	 
	7.8

	 	Bills of Lading and Other Documents of Title
	 	 	99	 
	 
	 	 	 	 	 	 
	SECTION 8.

	 	REPRESENTATIONS AND WARRANTIES
	 	 	100	 
	8.1

	 	Financial Condition
	 	 	100	 
	8.2

	 	No Change; Solvent
	 	 	100	 
	8.3

	 	Corporate Existence; Compliance with Law
	 	 	101	 
	8.4

	 	Corporate Power; Authorization; Enforceable Obligations
	 	 	101	 
	8.5

	 	No Legal Bar
	 	 	101	 
	8.6

	 	No Material Litigation
	 	 	102	 
	8.7

	 	No Default
	 	 	102	 
	8.8

	 	Ownership of Property; Liens
	 	 	102	 
	8.9

	 	Intellectual Property
	 	 	102	 
	8.10

	 	No Burdensome Restrictions
	 	 	102	 
	8.11

	 	Taxes
	 	 	102	 
	8.12

	 	Federal Regulations
	 	 	103	 
	8.13

	 	Employee Benefits
	 	 	103	 
	8.14

	 	Collateral
	 	 	103	 
	8.15

	 	Investment Company Act; Other Regulations
	 	 	104	 
	8.16

	 	Subsidiaries
	 	 	104	 
	8.17

	 	Purpose of Loans
	 	 	105	 
	8.18

	 	Environmental Compliance
	 	 	105	 
	8.19

	 	Name; State of Organization; Chief Executive Office; Collateral Locations
	 	 	105	 
	8.20

	 	Labor Disputes
	 	 	106	 
	8.21

	 	Bank Accounts
	 	 	106	 
	8.22

	 	Insurance
	 	 	106	 
	8.23

	 	Eligible Accounts
	 	 	106	 
	8.24

	 	Eligible Inventory
	 	 	106	 






 3









 






	 	 	 	 	 	 	 
	8.25

	 	Interrelated Businesses
	 	 	106	 
	8.27

	 	True and Correct Disclosure
	 	 	107	 
	8.28

	 	Delivery of Investment Documents
	 	 	107	 
	 
	 	 	 	 	 	 
	SECTION 9.

	 	AFFIRMATIVE COVENANTS
	 	 	107	 
	9.1

	 	Financial Statements
	 	 	107	 
	9.2

	 	Certificates; Other Information
	 	 	108	 
	9.3

	 	Payment of Obligations
	 	 	110	 
	9.4

	 	Conduct of Business and Maintenance of Existence
	 	 	110	 
	9.5

	 	Maintenance of Property; Insurance
	 	 	111	 
	9.6

	 	Notices
	 	 	112	 
	9.7

	 	Environmental Laws
	 	 	113	 
	9.8

	 	New Inventory Locations
	 	 	113	 
	9.9

	 	Compliance with ERISA
	 	 	113	 
	9.10

	 	End of Fiscal Years
	 	 	114	 
	9.11

	 	Additional Guaranties and Collateral Security; Further Assurances
	 	 	114	 
	9.12

	 	Costs and Expenses
	 	 	115	 
	 
	 	 	 	 	 	 
	SECTION 10.

	 	NEGATIVE COVENANTS
	 	 	115	 
	10.1

	 	Limitation on Fundamental Changes
	 	 	115	 
	10.2

	 	Encumbrances
	 	 	116	 
	10.3

	 	Indebtedness
	 	 	116	 
	10.4

	 	Investments
	 	 	120	 
	10.5

	 	Restricted Payments
	 	 	120	 
	10.6

	 	Transactions with Affiliates
	 	 	123	 
	10.7

	 	Change in Business
	 	 	124	 
	10.8

	 	Limitation of Restrictions Affecting Subsidiaries
	 	 	124	 
	10.9

	 	Certain Payments of Indebtedness, Etc.
	 	 	126	 
	10.10

	 	Modifications of Indebtedness, Organizational Documents and
Certain Other Agreements
	 	 	127	 
	10.11
	 	Sale and Leaseback Transactions	 	 	127	 
	10.12
	 	Designation of Designated Senior Debt	 	 	127	 
	10.13
	 	Term Loan Agreement	 	 	128	 
	 
	 	 	 	 	 	 
	SECTION 11.
	 	FINANCIAL COVENANTS	 	 	128	 
	11.1
	 	Consolidated Fixed Charge Coverage Ratio	 	 	128	 
	11.2
	 	Excess Availability	 	 	128	 
	 
	 	 	 	 	 	 
	SECTION 12.
	 	EVENTS OF DEFAULT AND REMEDIES	 	 	128	 
	12.1
	 	Events of Default	 	 	128	 
	12.2
	 	Remedies	 	 	131	 
	 
	 	 	 	 	 	 
	SECTION 13.
	 	JURY TRIAL WAIVER; OTHER WAIVERS  CONSENTS; GOVERNING LAW	 	 	133	 
	13.1
	 	Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver	 	 	133	 
	13.2
	 	Waiver of Notices	 	 	134	 
	13.3
	 	Amendments and Waivers	 	 	134	 






 4









 






	 	 	 	 	 	 	 
	13.4
	 	Indemnification	 	 	137	 
	 
	 	 	 	 	 	 
	SECTION 14.
	 	THE AGENT AND CO-COLLATERAL AGENTS	 	 	138	 
	14.1
	 	Appointment, Powers and Immunities	 	 	138	 
	14.2
	 	Reliance by Agent	 	 	138	 
	14.3
	 	Events of Default	 	 	138	 
	14.4
	 	Wells Fargo in its Individual Capacity; Co-Agents in their Individual Capacity	 	 	139	 
	14.5
	 	Indemnification	 	 	139	 
	14.6
	 	Non-Reliance on Agent and Other Lenders	 	 	140	 
	14.7
	 	Failure to Act	 	 	140	 
	14.8
	 	Additional Loans	 	 	140	 
	14.9
	 	Concerning the Collateral and the Related Financing Agreements	 	 	141	 
	14.10
	 	Field Audit, Examination Reports and other Information; Disclaimer by Lenders	 	 	141	 
	14.11
	 	Collateral Matters	 	 	141	 
	14.12
	 	Agency for Perfection	 	 	143	 
	14.13
	 	Agent May File Proofs of Claim	 	 	143	 
	14.14
	 	Successor Agent	 	 	144	 
	14.15
	 	Other Agent Designations	 	 	145	 
	14.16
	 	Co-Collateral Agent Determinations	 	 	145	 
	14.17
	 	Intercreditor Arrangements	 	 	145	 
	 
	 	 	 	 	 	 
	SECTION 15.
	 	TERM OF AGREEMENT; MISCELLANEOUS	 	 	145	 
	15.1
	 	Term	 	 	145	 
	15.2
	 	Interpretative Provisions	 	 	146	 
	15.3
	 	Notices	 	 	147	 
	15.4
	 	Partial Invalidity	 	 	148	 
	15.5
	 	Confidentiality	 	 	148	 
	15.6
	 	Successors	 	 	150	 
	15.7
	 	Assignments; Participations	 	 	150	 
	15.8
	 	Entire Agreement	 	 	152	 
	15.9
	 	USA Patriot Act	 	 	153	 
	15.10
	 	Counterparts, Etc.	 	 	153	 






 5









 





INDEX

TO

EXHIBITS AND SCHEDULES




	 	 	 
	Exhibit A

	 	Form of Assignment and Acceptance Agreement
	Exhibit B

	 	Form of Borrowing Base Certificate
	Exhibit C

	 	Commitments
	Exhibit D

	 	Form of Guaranty Agreement
	Exhibit E

	 	Form of Pledge Agreement
	Exhibit F

	 	Form of Tax Sharing Agreement
	Exhibit G

	 	Form of Lender Promissory Note
	Exhibit H

	 	Form of U.S. Tax Compliance Certificate
	Exhibit I

	 	Form of Compliance Certificate
	Schedule 1.42

	 	Consolidated Fixed Charges
	Schedule 1.57

	 	EBITDA
	Schedule 1.73

	 	Excluded Property
	Schedule 1.76

	 	Existing Letters of Credit
	Schedule 1.85

	 	Freight Forwarders
	Schedule 1.119

	 	Mortgaged Fee Properties; Mortgages
	Schedule 1.120

	 	Mortgages
	Schedule 1.139

	 	Permitted Dispositions
	Schedule 1.165

	 	Revolving Loan Priority Collateral
	Schedule 1.193

	 	Term Loan Priority Collateral
	Schedule 5.1

	 	Commercial Tort Claims; Chattel Paper; Investment Property; Investments
Accounts; Letter of Credit Rights; Inventory and Documents of Title in
Possession of Third Parties
	Schedule 8.2

	 	Material Adverse Effect
	Schedule 8.4

	 	Consents; Authorizations
	Schedule 8.6

	 	Pending Litigation
	Schedule 8.9

	 	Intellectual Property
	Schedule 8.14

	 	UCC Filing Officers
	Schedule 8.16

	 	Subsidiaries
	Schedule 8.18

	 	Environmental Compliance
	Schedule 8.19

	 	Name; State of Organization; Chief Executive Office; Locations of
Inventory and Records
	Schedule 8.20

	 	Labor Matters
	Schedule 8.21

	 	Deposit Accounts; Investment Accounts
	Schedule 8.22

	 	Insurance
	Schedule 10.2

	 	Permitted Liens
	Schedule 10.3

	 	Existing Indebtedness
	Schedule 10.4

	 	Existing Guaranty Obligations; Existing Investments; Existing Loans
and Advances
	Schedule 10.6

	 	Affiliate Agreements
	Schedule 12.1

	 	Financing Agreement Sections Events of Default
	Schedule 15.5(c)

	 	Disclosure to Gold Sheets







 6









 








LOAN AND SECURITY AGREEMENT




     This Loan and Security Agreement (this “Agreement”) dated October 20, 2009 is entered into by
and among NCI Group, Inc., a Nevada corporation (“NCI”), Robertson-Ceco II Corporation, a Delaware
corporation (“Robertson-Ceco”, and together with NCI, individually each, a “Borrower” and
collectively, “Borrowers”, as hereinafter further defined), NCI Building Systems, Inc., a Delaware
corporation (“NCI Building Systems” or “Parent”), Steelbuilding.com, Inc., a Delaware corporation,
the parties hereto from time to time as lenders, whether by execution of this Agreement or an
Assignment and Acceptance (each individually, a “Lender” and collectively, “Lenders” as hereinafter
further defined), Wells Fargo Foothill, LLC, a Delaware limited liability company , in its capacity
as administrative and collateral agent for Issuing Bank and Lenders (in such capacity, “Agent” as
hereinafter further defined), Bank of America, N.A, a national banking association (“B of A”) and
General Electric Capital Corporation, a Delaware corporation (“GECC”).



WITNESSETH:




     WHEREAS, Borrowers and Guarantor have requested that Agent, Issuing Bank and Lenders enter
into financing arrangements with Borrowers pursuant to which Lenders may make loans and provide
other financial accommodations to Borrowers; and



     WHEREAS, Issuing Bank and each Lender are willing to agree (severally and not jointly) to make
such loans and provide such financial accommodations to Borrowers (in the case of each Lender, on a
pro rata basis according to its Commitment (as defined below)) on the terms and conditions set
forth herein and Agent is willing to act as agent for Issuing Bank and Lenders on the terms and
conditions set forth herein and the other Financing Agreements;



     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:



SECTION 1. DEFINITIONS




     For purposes of this Agreement, the following terms shall have the respective meanings given
to them below:



     1.1 “Acceleration” shall have the meaning set forth in Section 12.1(h) hereof.



     1.2 “Accounts” shall mean, as to each Borrower and Guarantor, all present and future rights
of such Borrower or Guarantor to payment of a monetary obligation, whether or not earned by
performance, which is not evidenced by chattel paper or an instrument, (a) for property that has
been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services
rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, or (d)
arising out of the use of a credit or charge card or information contained on or for use with the
card.



     1.3 “Acquired Business” shall have the meaning given such term in the definition of the term
“Permitted Acquisitions” contained herein.



     1.4 “Additional Agent” shall have the meaning set forth in the Intercreditor Agreement.



 









 





     1.5 “Adjusted Consolidated Net Income” shall mean for any period, the Consolidated Net Income
of Parent and its Subsidiaries before any reduction thereof in respect of preferred stock
dividends; provided, that, there shall not be included in such Adjusted
Consolidated Net Income:



          (a) any net income (loss) of any Subsidiary that is not a Borrower or Guarantor if such
Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the
making of similar distributions by such Subsidiary, directly or indirectly, to a Borrower by
operation of the terms of such Subsidiary’s charter or any agreement, instrument, judgment, decree,
order, statute or governmental rule or regulation applicable to such Subsidiary or its stockholders
(other than restrictions that have been waived or otherwise released); except,
that, (A) subject to the limitations contained in clause (b) below, the Borrowers’ equity
in the net income of any such Subsidiary for such period shall be included in such Adjusted
Consolidated Net Income up to the aggregate amount of any dividend or distribution that was or
could have been made by such Subsidiary during such period to a Borrower or another Subsidiary
(subject, in the case of a dividend that could have been made to another Subsidiary, to the
limitation contained in this clause) and (B) the net loss of such Subsidiary shall be included to
the extent of the aggregate Investment of the Parent or any of its other Subsidiaries in such
Subsidiary;



          (b) any gain or loss realized upon the sale or other Disposition of any asset of Parent or any
Subsidiary (including pursuant to any Sale and Leaseback Transaction) that is not sold or otherwise
disposed of in the ordinary course of business (as determined in good faith by the board of
directors of the Parent);



          (c) any item classified as an extraordinary, unusual or nonrecurring gain, loss or charge
(including fees, expenses and charges associated with the Transactions and any related
transactions, and any acquisition, merger or consolidation after the Closing Date);



          (d) the cumulative effect of a change in accounting principles;



          (e) all deferred financing costs written off and premiums paid in connection with any early
extinguishment of Indebtedness;



          (f) any unrealized gains or losses in respect of any foreign exchange contract, currency swap
agreement or other similar agreement or arrangements (including derivative agreements or
arrangements);



          (g) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of
any Person denominated in a currency other than the functional currency of such Person;



          (h) any non-cash compensation charge arising from any grant of stock, stock options or other
equity based awards;



          (i) to the extent otherwise included in such Adjusted Consolidated Net Income, any unrealized
foreign currency translation or transaction gains or losses in respect of Indebtedness or other
obligations of Parent or any Subsidiary owing to Parent or any Subsidiary; and



          (j) any non-cash charge, expense or other impact attributable to application of the purchase
method of accounting (including the total amount of depreciation and amortization, cost of sales or
other non-cash expense resulting from the write-up of assets to the extent resulting from such
purchase accounting adjustments).



     In the case of any unusual or nonrecurring gain, loss or charge not included in such Adjusted
Consolidated Net Income pursuant to clause (c) above in any determination thereof, Parent will
deliver an



2









 







officer’s certificate to Agent promptly after the date on which such Adjusted Consolidated Net
Income is so determined, setting forth the nature and amount of such unusual or nonrecurring gain,
loss or charge.



     1.6 “Adjusted Eurodollar Rate” shall mean, with respect to (a) each one (1) or two (2) month
Interest Period for any Eurodollar Rate Loan comprising part of the same borrowing (including
conversions, extensions and renewals), the (i) the rate per annum determined by dividing (A) the
highest of the London Interbank Offered Rates for any of the one (1), two (2) or three (3) month
Interest Period by (B) a percentage equal to: (x) one (1) minus (y) the Reserve Percentage and (b)
with respect to each other Interest Period for any Eurodollar Rate Loan comprising part of the same
borrowing (including conversions, extensions and renewals), the rate per annum determined by
dividing (i) the London Interbank Offered Rate for such Interest Period by (ii) a percentage equal
to: (A) one (1) minus (B) the Reserve Percentage. For purposes hereof, “Reserve Percentage” shall
mean for any day, that percentage (expressed as a decimal) which is in effect from time to time
under Regulation D of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as the maximum
reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in
Regulation D (or against any other category of liabilities that includes deposits by reference to
which the interest rate of Eurodollar Rate Loans is determined), whether or not any Lender has any
Eurocurrency liabilities subject to such reserve requirement at that time. Eurodollar Loans shall
be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve
requirements without benefits of credits for proration, exceptions or offsets that may be available
from time to time to a Lender. The Adjusted Eurodollar Rate shall be adjusted automatically on and
as of the effective date of any change in the Reserve Percentage.



     1.7 “Administrative Borrower” shall mean NCI Group, Inc., a Nevada corporation, in its
capacity as Administrative Borrower on behalf of itself and the other Borrowers and Guarantors
pursuant to Section 6.10 hereof and its successors and assigns in such capacity.



     1.8 “Affiliate” shall mean, as to any Person, any other Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, “control” (including with correlative meanings, the
terms “controlled by” and “under common control with”), of a Person means the power, directly or
indirectly, either to (a) vote twenty (20%) percent or more of the securities having ordinary
voting power for the election of the Board of Directors of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or otherwise.



     1.9 “Agent” shall mean Wells Fargo Foothill, LLC in its capacity as administrative agent on
behalf of Lenders pursuant to the terms hereof and any replacement or successor agent hereunder.



     1.10
“Agent Payment Account” shall mean account no.
[intentionally omitted] of Agent at Wells Fargo, or
such other account of Agent as Agent may from time to time designate in writing to Administrative
Borrower as the Agent Payment Account for purposes of this Agreement and the other Financing
Agreements.



     1.11 “Applicable Margin” shall mean, with respect to Base Rate Loans and Eurodollar Rate
Loans, the applicable percentage (on a per annum basis) set forth below based on the Quarterly
Average Excess Availability for the immediately preceding three (3) month period.



3









 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable	 	Applicable
	 	 	 	 	Quarterly Average Excess	 	Eurodollar Rate	 	Base Rate
	Tier	 	Availability	 	Margin	 	Margin
	 	1	 	 	Equal to or greater
than $60,000,000

	 	 	4.25	%	 	 	3.25	%
	 	2	 	 	Greater than or
equal to $30,000,000
but less than
$60,000,000

	 	 	4.50	%	 	 	3.50	%
	 	3	 	 	Less than $30,000,000

	 	 	4.75	%	 	 	3.75	%





provided, that, (i) the Applicable Margin shall be calculated and established once
each three (3) month period and shall remain in effect until adjusted for the next three (3) month
period, (ii) each adjustment of the Applicable Margin shall be effective as of the first day of a
calendar month based on the Quarterly Average Excess Availability for the immediately preceding
three (3) month period; provided, that, in the event that a Borrowing Base
Certificate is not delivered when required under the terms hereof, for the period from the date
upon which such Borrowing Base Certificate was required to be delivered until the date upon which
it actually is delivered, the Applicable Margin shall be three and three-quarters (3.75%) percent
per annum, in the case of Base Rate Loans and four and three-quarters (4.75%) percent per annum, in
the case of Eurodollar Rate Loans (it being understood that the foregoing shall not limit the
rights of Agent and Lenders set forth in Section 12) and (iii) the Applicable Margin through April
30, 2010 shall be the amount for Tier 2 set forth above. In addition, at all times that an Event
of Default exists or has occurred and is continuing, the Applicable Margin shall not decrease from
that previously in effect as a result of the delivery of a Borrowing Base Certificate. In the
event that at any time within six (6) months after the end of a three (3) month period the
Quarterly Average Excess Availability for such three (3) month period used for the determination of
the Applicable Margin was more or less than the actual amount of the Quarterly Average Excess
Availability for such three (3) month period as a result of the inaccuracy of information provided
by or on behalf of Borrowers to Agent for the calculation of Excess Availability, the Applicable
Margin for such prior three (3) month period shall be adjusted to the applicable percentage based
on such actual Quarterly Average Excess Availability and any additional interest for the applicable
period as a result of such recalculation shall be promptly paid to Agent or any reduction in
interest for the applicable periods as a result of such recalculation shall be given as a credit to
Borrowers to reduce the then outstanding Loans, as the case may be. The foregoing shall not be
construed to limit the rights of Agent and Lenders with respect to the amount of interest payable
after a Default or Event of Default whether based on such recalculated percentage or otherwise.




     1.12 “Approved Fund” shall mean any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers or manages a Lender.



     1.13 “Arrangers” shall mean, collectively, Wells Fargo Securities, LLC, a Delaware limited
liability company, and Bank of America, N.A., a national banking association, each in its capacity
as joint lead arranger, and their respective successors and assigns hereunder.



     1.14 “Assignment and Acceptance” shall mean an Assignment and Acceptance substantially in the
form of Exhibit A attached hereto (with blanks appropriately completed) delivered to Agent
in connection with an assignment of a Lender’s interest hereunder in accordance with the provisions
of Section 15.7 hereof.



4









 





     1.15 “Bank Product Provider” shall mean any Lender or Affiliate of any Lender that provides
any Bank Products to Borrowers or Guarantors.



     1.16 “Bank Products” shall mean any one or more of the following types or services or
facilities provided to a Borrower or Guarantor by Agent or a Bank Product Provider: (a) credit
cards or stored value cards or the processing of payments and other administrative services with
respect to credit cards or stored value cards or (b) treasury, cash management or related services,
including (i) the automated clearinghouse transfer of funds for the account of a Borrower or
Guarantor pursuant to agreement or overdraft for any accounts of a Borrower or Guarantor, and (ii)
controlled disbursement services, (iii) returned items, netting, overdrafts and interstate
depository network services, and (iv) Hedge Agreements if and to the extent permitted hereunder.



     1.17 “Base Rate” shall mean, on any date, the greater of (a) the prime lending rate as
announced from time to time by Wells Fargo Bank, N.A., or its successors or (b) the Federal Funds
Rate in effect on such day plus one half (1/2%) percent.



     1.18 “Base Rate Loans” shall mean any Loans or portion thereof on which interest is payable
based on the Base Rate in accordance with the terms thereof. All Swing Line Loans shall be Base
Rate Loans.



     1.19 “Board of Directors” shall mean, for any Person, the board of directors or other
governing body of such Person or, if such Person does not have such a board of directors or other
governing body and is owned or managed by a single entity, the Board of Directors of such entity,
or, in either case, any committee thereof duly authorized to act on behalf of such Board of
Directors.



     1.20 “Borrowers” shall have the meaning set forth in the preamble hereto and include any
other Person that at any time after the date hereof becomes a Borrower; each sometimes being
referred to herein individually as a “Borrower”



     1.21 “Borrowing Base” shall mean, at any time, the amount equal to:



          (a) the lesser of (i) ninety-five (95%) percent of Qualified Cash and (ii) the amount equal to
one-third (1/3) multiplied by the sum of (A) the amount determined pursuant to clause 1.21(a)(i)
above plus (B) the amount determined pursuant to clause 1.21(b) below plus (C) the amount
determined pursuant to clause 1.21(c) below, plus




          (b) the amount equal to eighty-five (85%) percent multiplied by the amount of Eligible
Accounts; plus




          (c) the amount equal to the lesser of (i) sixty-five (65%) percent multiplied by the Value of
Eligible Inventory or (ii) eighty-five (85%) percent of the Net Recovery Percentage multiplied by
the Value of Eligible Inventory or (iii) one hundred thirty (130%) percent of the amount determined
based on clause (b) above; minus




          (d) Reserves.




     1.22 “Borrowing Base Certificate” shall mean a certificate substantially in the form of
Exhibit B hereto, as such form may from time to time be modified by Agent in accordance
with the terms hereof, which is duly completed (including all schedules thereto) and executed by
the chief executive officer, chief financial officer or other appropriate financial officer of
Administrative Borrower reasonably acceptable to Agent and delivered to Agent.



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     1.23 “Business Day” shall mean any day other than a Saturday, Sunday, or other day on which
commercial banks located in New York, New York or Atlanta, Georgia are authorized or required by
law to close, except that if a determination of a Business Day shall relate to any Eurodollar Rate
Loans, the term Business Day shall also exclude any day on which banks are closed for dealings in
dollar deposits in the London interbank market.



     1.24 “Capital Expenditures” shall mean with respect to any Person for any period, the
aggregate of all expenditures by such Person and its consolidated Subsidiaries during such period
(exclusive of expenditures made (a) for Permitted Investments and (b) for Permitted Acquisitions,
including the portion of the consideration therefor allocated to property, plant and equipment so
acquired), which, in accordance with GAAP, are or should be included in “capital expenditures”;
except, that, Capital Expenditures shall not include: (i) any such expenditures to
the extent financed with proceeds of any Equity Interests issued, or capital contributions received
by Parent, or of any Indebtedness permitted hereunder (excluding Loans under this Agreement), (ii)
an amount of such expenditures equal to all or part of the proceeds of any casualty insurance,
condemnation or eminent domain, or any sale or other Disposition of assets (other than Revolving
Loan Priority Collateral), to the extent applied within one (1) year of the date of the receipt of
such proceeds, except as to proceeds of any Sale and Leaseback Transaction, to the extent applied
within three (3) months of the date of the receipt of such proceeds, and (iii) any such
expenditures made in any period that are contractually required to be reimbursed to any Borrower or
Guarantor in cash by a Person other than Parent and its Subsidiaries or Affiliates (including
landlords) and are so reimbursed in cash during such period.



     1.25 “Capital Leases” shall mean, as applied to any Person, any lease by such Person of
property, real or personal, for which the obligations of the lessee are required in accordance with
GAAP to be capitalized on the balance sheet of such lessee; provided, that, if at
any time an operating lease of such lessee is required to be recharacterized as a Capital Lease
after the date hereof as a result of a change in GAAP, then for purposes hereof such lease shall
not be deemed a Capital Lease. The stated maturity of any Indebtedness under a Capital Lease shall
be the scheduled date under the terms thereof of the last payment of rent or any other amount due
under such Capital Lease.



     1.26 “Cash Equivalents” shall mean (a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United States of America or any agency
or instrumentality thereof and backed by the full faith and credit of the United States of America,
in each case maturing within one (1) year from the date of acquisition thereof; (b) direct
obligations of any state, commonwealth or territory of the United States of America or any
political subdivision, agency or instrumentality of any such state, commonwealth or territory
maturing within one (1) year from the date of acquisition thereof and, at the time of acquisition,
having an investment grade rating from either S&P or Moody’s (or, if at any time neither S&P nor
Moody’s shall be rating such obligations, then an equivalent rating from another nationally
recognized rating service); (c) commercial paper or other indebtedness maturing no more than one
(1) year from the date of creation thereof and, at the time of acquisition, having a rating of at
least A-2 from S&P or at least P-2 from Moody’s (or, if at any time neither S&P nor Moody’s shall
be rating such obligations, then an equivalent rating from another nationally recognized rating
service); (d) certificates of deposit, time deposits and Eurodollar time deposits or bankers’
acceptances maturing within one (1) year from the date of acquisition thereof and overnight bank
deposits issued by any bank organized under the laws of the United States of America or any state
thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $250,000,000 in the case of
domestic banks and $100,000,000 (or the dollar equivalent thereof) in the case of foreign banks;
(e) repurchase obligations for underlying obligations of the types described in clauses (a), (b)
and (d) above entered into with any bank meeting the qualifications specified in clause (d) above
or with securities dealers of recognized national standing; and (f) investments in money market
funds or shares of investment



6









 







companies that are registered under the Investment Company Act of 1940 that invest
substantially all their property or assets in obligations of the types described in clauses (a)
through (e) above or are subject to the risk limiting conditions of Rule 2a-7 or any successor rule
of the Securities and Exchange Commission.



     1.27 “Cash Management Accounts” shall have the meaning set forth in Section 6.6 hereof.



     1.28 “CD&R” shall mean Clayton, Dubilier & Rice, Inc. and any successor in interest thereto
or successor to CD&R’s investment management business.



     1.29 “CD&R Investors” shall mean, collectively, (a) Clayton, Dubilier & Rice Fund VIII, L.P.,
a Cayman Islands exempted limited partnership, or any successor thereto, (b) CD&R Friends and
Family Fund VIII, L.P., a Cayman Islands exempted limited partnership, or any successor thereto,
and (c) any Affiliate of any CD&R Investor.



     1.30 “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority.



     1.31 “Change in Tax Law” shall have the meaning set forth in Section 6.8.



     1.32 “Change of Control” shall mean the occurrence of any of the following events: (a) the
failure of one or more of the Permitted Holders to be the “beneficial owner” (within the meaning of
such term under Rule 13d-3 under the Exchange Act), directly or indirectly, of less than
twenty-five (25%) percent of the voting power of the total outstanding Voting Stock of the Relevant
Parent Company, (b) the Continuing Directors shall cease to constitute a majority of the members of
the Board of Directors of the Relevant Parent Company; (c) there shall not be any designee of one
or more Permitted Holders serving as a member of the Board of Directors of the Relevant Parent
Company; (d) the voting power of the total outstanding Voting Stock of the Relevant Parent Company
“beneficially owned” by any Person that is not a Permitted Holder is both (i) more than thirty-five
(35%) percent of such voting power and (ii) more than the voting power of the total outstanding
Voting Stock of the Relevant Parent Company then “beneficially owned” by Permitted Holders; (e)
Parent at any time ceases to own, directly or indirectly, one hundred (100%) percent of the Equity
Interests of any Borrower (other than in a transaction permitted under Section 10.1); or (f) at any
time a “change of control” occurs as such term is defined in the Term Loan Agreement. As used
herein, the term “Relevant Parent Company” means (i) NCI Building Systems so long as NCI Building
Systems is not a Subsidiary of a Parent Entity, and (ii) any Parent Entity so long as NCI Building
Systems is a Subsidiary thereof and such Parent Entity is not a Subsidiary of any other Parent
Entity. Notwithstanding anything to the contrary in the foregoing, the Transactions shall not
constitute or give rise to a Change of Control.



     1.33 “Closing Date” shall mean the date on which all the conditions precedent set forth in
Section 4.1 shall be satisfied or waived in writing.



     1.34 “Co-Collateral Agents” shall mean, collectively, Agent, Bank of America, N.A., and
General Electric Capital Corporation, each in its capacity as co-collateral agent, and any
replacement or successor collateral agents hereunder.



     1.35 “Code” shall mean the Internal Revenue Code of 1986, as the same now exists or may from
time to time hereafter be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.



7









 





     1.36 “Collateral” shall have the meaning set forth in Section 5 hereof.



     1.37 “Collateral Access Agreement” shall mean an agreement in writing, in form and substance
reasonably satisfactory to Agent, from any lessor of premises to any Borrower or Guarantor (only to
the extent any Collateral is at such premises), or any other person to whom any Collateral is
consigned or who has custody, control or possession of any such Collateral or is otherwise the
owner or operator of any premises on which any of such Collateral is located (including any third
party processors used by a Borrower), in favor of Agent with respect to the Collateral at such
premises or otherwise in the custody, control or possession of such lessor, consignee or other
person.



     1.38 “Commercial Tort Claims” any action (other than claims primarily seeking declaratory or
injunctive relief) commenced by a Borrower or Guarantor in the United States of America, any state,
territory or political subdivision thereof, in which such Borrower or Guarantor seeks damages
arising out of torts committed against it that would reasonably be expected to result in a damage
award to it exceeding $500,000 in any one case or $2,500,000 in the aggregate; provided,
that, such thresholds and qualifications do not apply for purposes of the grant of security
interest set forth in Section 5.1(l) as of the date hereof and Schedule 5.1.



     1.39 “Commitment” shall mean at any time, as to each Lender, the principal amount set forth
next to such Lender’s name on Exhibit C hereto or on Schedule 1 to the Assignment and
Acceptance Agreement pursuant to which such Lender became a Lender hereunder in accordance with the
provisions of Section 15.7 hereof, as the same may be adjusted from time to time in accordance with
the terms hereof; sometimes being collectively referred to herein as “Commitments”.



     1.40 “Concentration Accounts” shall mean the deposit account of NCI Group, Inc. maintained at
Bank of America, N.A. bearing account number [intentionally omitted] and such other accounts as may be
established after the date hereof in accordance with the terms hereof used to receive funds from
the Cash Management Accounts.



     1.41 “Consolidated Fixed Charge Coverage Ratio” shall mean, with respect to any date of
determination, the ratio of (a) the amount, determined on a consolidated basis, equal to (i) the
EBITDA of Parent and its Subsidiaries on a consolidated basis, as of the end of a fiscal month for
the immediately preceding twelve (12) consecutive fiscal months for which Agent has received
financial statements pursuant to Section 9.1 hereof, less (ii) the amount of Capital Expenditures
of Parent and its Subsidiaries for such period, less (iii) all federal, foreign state, local and
foreign income taxes payable by Parent and its Subsidiaries in cash for such period (net of tax
refunds received in cash during such period up to the amount of such taxes payable for such
period), less (iv) all Restricted Payments paid in cash after the Closing Date during such period
permitted under Sections 10.5(d), 10.5(e), 10.5(j), 10.5(k) and 10.5(l), except to the extent that
any of such payments or the expenses to which such payments relate are otherwise included as
expenses or charges for purposes of the calculation of EBITDA of Parent and its Subsidiaries to (b)
Consolidated Fixed Charges of Parent and its Subsidiaries, on a consolidated basis, for such
period.



     1.42 “Consolidated Fixed Charges” shall mean, as to Parent and its Subsidiaries, on a
consolidated basis, with respect to the immediately preceding twelve (12) consecutive fiscal months
for which Agent has received financial statements pursuant to Section 9.1 hereof, the sum of,
without duplication, (a) all Consolidated Interest Expense payable in cash for such period, plus
(b) scheduled mandatory principal payments made or required to be made (after giving effect to any
prepayments paid in cash that reduce the amount of such required payments) on account of
Indebtedness of Parent and its Subsidiaries under clause (a), (b) or (c) of the definition of the
term “Indebtedness” (excluding the obligations hereunder, any mandatory payments in respect of the
Term Loan Debt based on excess cash flow under the Term Loan Agreement as in effect on the date
hereof, and any payments on Indebtedness



8









 







required to be made on the final maturity date thereof, but including any obligations in
respect of Capital Leases and any mandatory payments in respect of the Term Loan Debt for any 2009
tax refund received), for such period, plus (c) scheduled mandatory payments on account of
Disqualified Equity Interests of Parent and its Subsidiaries (whether in the nature of dividends,
redemption, repurchase or otherwise) required to be made during such period, plus (d) the amount of
fees in excess of $2,000,000 payable for such period to any of the CD&R Investors and their
Affiliates for the rendering of management consulting or financial advisory or other services, in
each case determined on a consolidated basis in accordance with GAAP; provided,
that, notwithstanding anything to the contrary set forth in this definition, for purposes
of determining the compliance of Borrowers and Guarantors with Section 11.1 hereof prior to the
last day of the fiscal month after the first anniversary of the date of this Agreement, the
Consolidated Fixed Charges of Parent and its Subsidiaries on a consolidated basis for the
applicable periods set forth on Schedule 1.42 hereto shall be used in the calculation of
such Consolidated Fixed Charges.



     1.43 “Consolidated Interest Expense” shall mean, for any period, as to Parent and its
Subsidiaries, as determined in accordance with GAAP, the amount equal to total interest expense of
Parent and its Subsidiaries on a consolidated basis for such period, whether paid or accrued
(including the interest expense component attributed to any Capital Lease for such period) in
accordance with GAAP.



     1.44 “Consolidated Net Income” shall mean, with respect to Parent and its Subsidiaries for
any period, the aggregate of the net income (loss) of Parent and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.



     1.45 “Continuing Directors” shall mean the directors of Parent on the Closing Date, after
giving effect to the execution and delivery of this Agreement and the other transactions
contemplated thereby to occur on such date, and each other director if, in each case, such other
director’s nomination for election to the Board of Directors of Parent is recommended by at least a
majority of the then Continuing Directors or the election of such other director is approved by one
or more Permitted Holders.



     1.46 “Contractual Obligation” shall mean, as to any Person, any provision of any material
security issued by such Person or of any material agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.



     1.47 “Convertible Note Account” shall mean account number [intentionally omitted] at Bank of America,
N.A. in the name of NCI Building Systems, Inc., funded with the proceeds of the Investment received
by Parent on or about the date hereof pursuant to the Investment Agreement, which funds shall only
be used for the payment of amounts due in connection with the Transactions and the payment of
Indebtedness evidenced by or pursuant to the Convertible Notes; provided, that,
upon payment in full of the Convertible Notes, such funds may be transferred to the Concentration
Account and applied as otherwise permitted hereby.



     1.48 “Convertible Notes” shall mean, collectively, the 2.125% Convertible Senior Subordinated
Notes due November 2024 in the original principal amount of $180,000,000, as the same now exist or
may hereafter be amended, modified or supplemented.



     1.49 “Credit Facility” shall mean the Loans and Letters of Credit provided to or for the
benefit of any Borrower pursuant to Section 2 hereof.



     1.50 “Default” shall mean any of the events specified in Section 12.1, whether or not any
requirement for the giving of notice (other than, in the case of Section 12.1(h), a Default
Notice), the lapse of time, or both, or any other condition specified in Section 12.1, has been
satisfied.



     1.51 “Default Notice” shall have the meaning set forth in Section 12.1(h) hereof.



9









 





     1.52 “Defaulting Lender” shall have the meaning set forth in Section 6.13(f) hereof.



     1.53 “Deposit Account Control Agreement” shall mean an agreement in writing, in form and
substance reasonably satisfactory to Agent, by and among Agent, the Borrower or Guarantor that is
the customer of the bank with respect to a deposit account at such bank and such bank, which, if
required hereunder, is sufficient to perfect the security interests of Agent therein and provides
such other rights with respect thereto as Agent reasonably requires.



     1.54 “Disposition” shall mean any sale, issuance, assignment conveyance, transfer, exchange,
lease, license or other disposition (including through a Sale and Leaseback Transaction).



     1.55 “Disqualified Equity Interest” means, with respect to any Person, any Equity Interest in
such Person that, by its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable, either mandatorily or at the option of the holder thereof) or upon the
happening of any event or condition:



          (a) matures or is mandatorily redeemable (other than solely for Equity Interests in such
Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares
of such Equity Interests), whether pursuant to a sinking fund obligation or otherwise;



          (b) is convertible or exchangeable at the option of the holder thereof for Indebtedness of, or
Equity Interests in, such Person (other than solely for Equity Interests in such Person that do not
constitute Disqualified Equity Interest and cash in lieu of fractional shares of such Equity
Interests); or



          (c) is redeemable (other than solely for Equity Interests in such Person that do not
constitute Disqualified Equity Interest and cash in lieu of fractional shares of such Equity
Interests) or is required to be repurchased by such Person or any of its controlled Affiliates, in
whole or in part, at the option of the holder thereof;


in each case, on or prior to the date that is ninety-one (91) days after the Maturity Date;
provided, that, an Equity Interest that would not constitute a Disqualified Equity
Interest but for terms thereof giving holders thereof the right to require such Person to redeem or
purchase such Equity Interest upon the occurrence of an “asset sale” or a “change of control” shall
not constitute a Disqualified Equity Interest if any such requirement becomes operative upon the
Payment in Full of all Obligations.




     1.56 “Dominion Event” shall mean a period either (a) commencing on the date that an Event of
Default shall exist or have occurred and be continuing and Agent shall have given written notice
thereof to the Administrative Borrower stating that a Dominion Event has occurred, and ending on
the date that such Event of Default ceases to exist or be continuing or (b) commencing on the date
that Excess Availability has been less than, at any time, the amount equal to the greater of (i)
eighteen (18%) percent of the least of (A) the Maximum Credit or (B) the Borrowing Base or (C) the
Revolving Loan Limit or (ii) $20,000,000 hereunder for more than three (3) consecutive Business
Days or (c) commencing on the day after any date on which, as of the close of business, Excess
Availability shall have been less than $15,000,000, and Agent shall have given written notice
thereof to the Administrative Borrower stating that a Dominion Event has occurred, and ending on
the date that Excess Availability has been greater than such amount for any thirty (30) consecutive
day period thereafter; provided, that, a Dominion Event shall not be terminated
less than ninety (90) days following the date which such Dominion Event would otherwise terminate
in the case of the second (2nd) or any subsequent Dominion Event in any twelve (12) consecutive
calendar month period.



     1.57 “EBITDA” shall mean, as to Parent and its Subsidiaries, with respect to any period, an
amount equal to (a) the Consolidated Net Income of Parent and its Subsidiaries for such period



10









 







determined in accordance with GAAP, plus (b) each of the following (without duplication), in
each case to the extent deducted in the calculation of such Consolidated Net Income for such
period: (i) depreciation and amortization (including, but not limited to, imputed interest and
deferred compensation) of Parent and its Subsidiaries for such period, all in accordance with GAAP,
plus (ii) the Consolidated Interest Expense of Parent and its Subsidiaries for such period, plus
(iii) Provision for Taxes for such period, plus (iv) non-cash charges (excluding non-cash charges
that are accruals or reserves for cash charges in a future period), plus (v) cash restructuring
charges for the two (2) fiscal year period ending October 31, 2010 up to the aggregate amount of
$11,000,000, plus (vi) cash charges, fees and expenses related to the Transactions as contemplated
by the Credit Facility paid on or before the Closing Date, or within nine (9) months after the
Closing Date, and any items paid or accrued during such period relating to deferred compensation
owed to management accrued prior to the Closing Date, plus (vii) fees and expenses paid to any
Sponsor or any Affiliate of any Sponsor for the rendering of management consulting, financial
advisory or other services, not to exceed $2,000,000 in the aggregate in the case of such fees for
any (12) consecutive month period, plus (viii) any 2009 Tax Refunds (as defined in the Term Loan
Agreement), plus (ix) any extraordinary, unusual or non-recurring losses or charges to the extent
that such losses or charges exceed any extraordinary, unusual or non-recurring gains or credits, up
to $5,000,000 in the aggregate for any (12) consecutive month period (or in the event that such
gains or credits exceed such losses, then minus the amount of such excess), plus (x) at Parent’s
election, to the extent not otherwise added back pursuant to another provision of this clause (b)
in calculating EBITDA for such period, any non-cash charges that are accruals or reserves for cash
charges in a future period, minus (c) any cash charge incurred during such period to the extent a
non-cash charge that was an accrual or reserve for such cash charge was added back pursuant to the
preceding subclause (b)(x) in calculating EBITDA for any prior period, minus (d) if there is no
Provision for Taxes for such period, any net tax benefit for Taxes imposed on or measured by net
income included in the calculation of Consolidated Net Income for such period (excluding any 2009
Tax Refunds (as defined in the Term Loan Agreement) which was specifically addressed in (viii)
above; provided, that, notwithstanding anything to the contrary set forth in this
definition, for purposes of determining the compliance of Borrowers and Guarantors with Section
11.1 hereof prior to the last day of the first fiscal month or quarter (as the case may be) ending
after the first anniversary of the date of this Agreement, the EBITDA of Parent and its
Subsidiaries on a consolidated basis for the applicable periods set forth on the EBITDA
Schedule 1.57 hereto shall be used in the calculation of such EBITDA.



     1.58 “Eligible Accounts” shall mean those Accounts created by Borrowers in the ordinary
course of its business, arising out of its sale of goods or rendition of services, that comply in
all material respects with each of the representations and warranties respecting Eligible Accounts
made herein, and that satisfy the criteria set forth below. Accounts shall be Eligible Accounts
if:



          (a) such Accounts are not unpaid more than ninety (90) days after the date of the original
invoice for them;



          (b) such Accounts are not owed by an account debtor who has Accounts unpaid more than ninety
(90) days after the date of the original invoice for them which constitute more than twenty-five
(25%) percent of the total Accounts of such account debtor;



          (c) neither the account debtor nor any officer or employee of the account debtor with respect
to such Accounts is an officer, employee, agent or other Affiliate of any Borrower or Guarantor;
provided, that, in the event that any account debtor is an Affiliate of CD&R or any
CD&R Investor, to the extent that such Account otherwise satisfies the criteria for an Eligible
Account such Account shall be deemed an Eligible Account, so long as (i) it arises from a
transaction in the ordinary course of business of the Borrower to whom such Account is owed and
such Affiliate, (ii) it is on terms no less favorable to such Borrower than it would obtain in a
comparable arm’s length transaction with a Person that is not an



11









 







Affiliate, (iii) it is otherwise at all times handled in all respects in the same or similar
manner as an Account owing from a Person that is not an Affiliate in accordance with the practices
and policies of such Borrower, (iv) such Affiliate does not have any power, directly or indirectly,
to direct or cause the direction of the management or policies of any Borrower or Guarantor, (v)
Agent shall have received notice of such Accounts at the time of any field examination to the
extent that any Responsible Officer of Parent or any of its Subsidiaries has knowledge of such
Accounts, and (vi) in the event that at any time, any such Accounts for which the account debtor is
an Affiliate of CD&R or any CD&R Investor do not satisfy such criteria, then Co-Collateral Agents
may, at their option, determine in their Permitted Discretion that all Accounts due from such
Affiliate are not Eligible Accounts;



          (d) such Accounts do not arise from sales on consignment, guaranteed sale, sale and return,
sale on approval, or other terms under which payment by the account debtor may be conditional or
contingent;



          (e) Accounts that are not payable in Dollars;



          (f) such Accounts are owing by an account debtor with a chief executive office or principal
place of business located other than in the United States of America or Canada, then if the account
debtor has delivered to such Borrower an irrevocable letter of credit issued or confirmed by a bank
reasonably satisfactory to Agent in its Permitted Discretion and payable only in the United States
of America and in U.S. dollars, sufficient to cover such Account, in form and substance reasonably
satisfactory to Agent and if required by Agent, the original of such letter of credit has been
delivered to Agent or Agent’s agent and the issuer thereof, and such Borrower has complied with the
terms of Section 5.2(f) hereof with respect to the assignment of the proceeds of such letter of
credit to Agent or naming Agent as transferee beneficiary thereunder;



          (g) such Accounts are owing by an account debtor with a chief executive office or principal
place of business in Canada, unless at any time promptly upon Agent’s request, such Borrower shall
execute and deliver, or cause to be executed and delivered, such other agreements, documents and
instruments as may be reasonably required by Agent to perfect the security interests of Agent in
those Accounts of an account debtor with its chief executive office or principal place of business
in Canada in accordance with the applicable laws of the Province of Canada in which such chief
executive office or principal place of business is located and take or cause to be taken such other
and further actions as Agent may reasonably request to enable Agent as secured party with respect
thereto to collect such Accounts under the applicable Federal or Provincial laws of Canada;



          (h) such Accounts are not owing by any foreign government or the federal government of the
United States of America or any department, agency or instrumentality of the United States or any
State, or any political subdivision, department, agency or instrumentality thereof (exclusive,
however, of (i) Accounts owing by the federal government of the United States of America with
respect to which the applicable Borrower has complied, to the reasonable satisfaction of Agent,
with the Assignment of Claims Act of 1940 (31 USC Section 3727) or any similar applicable law and
(ii) Accounts owing by any State, or any political subdivision, department, agency or
instrumentality thereof, with respect to which the applicable Borrower has complied, to the
reasonable satisfaction of Agent, with all applicable laws so as to give Agent the same rights and
remedies with respect thereto as it has with Accounts owing by an account debtor other than such
State or entity);



          (i) the account debtor with respect to such Accounts has not asserted a counterclaim, defense
or dispute and is not owed or does not claim to be owed any amounts that may give rise to any right
of setoff or recoupment against such Accounts (but the portion of the Accounts of such account
debtor in excess of the amount at any time and from time to time owed by such Borrower to such
account debtor or



12









 







claimed owed by such account debtor that otherwise satisfy the criteria for Eligible Accounts
shall be deemed Eligible Accounts);



          (j) the account debtor with respect to such Account has not failed to pay the full invoiced
face amount thereof (short pays);



          (k) the account debtor with respect to such Accounts has not paid to Borrower a deposit in
respect of unfilled orders for goods to the extent that such Accounts exceed amounts received from
such account debtor as a deposit; provided, that, such Accounts which otherwise
constitute Eligible Accounts will be included as Eligible Accounts in the event that the applicable
contract with such customer included terms and conditions with respect to the identification of the
applicable goods to such contract and the passage of title thereto, in each case satisfactory to
Co-Collateral Agents;



          (l) such Accounts do not arise from service charges, interest or fees, or warranty or similar
charges, provided, that, for purposes of the calculation of the Borrowing Base,
Agent shall establish an estimated amount of such interest, fees and charges that shall not be
deemed Eligible Accounts based on information provided by Borrowers to Agent, which amount shall be
adjusted periodically based on field examinations and other information that Agent may receive from
time to time, and any portion of any Accounts attributable to such interest, fees and charges shall
not be otherwise separately deducted from such Accounts;



          (m) the aggregate amount of such Accounts (i) owing by a single account debtor that is
Investment Grade do not constitute more than ten (10%) percent of the aggregate amount of all
otherwise Eligible Accounts of all Borrowers or (ii) owing by a single account debtor that is not
Investment Grade (or not rated) do not constitute more than five (5%) percent of the aggregate
amount of all otherwise Eligible Accounts of all Borrowers (provided, that, the
portion of the Accounts not in excess of such applicable percentage that otherwise satisfy the
criteria for Eligible Accounts shall be deemed Eligible Accounts and for purposes hereof
“Investment Grade” shall mean that the account debtor has received a credit rating of BBB- or
higher from S&P or a rating of Baa3 or higher from Moody’s or, if neither S&P nor Moody’s shall
then be rating such account debtor, then an equivalent rating from another nationally recognized
rating service); provided, that, in each case, the amount of Eligible Accounts that
are excluded because they exceed the foregoing percentages shall be determined by Agent based on
all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the
foregoing concentration limit;



          (n) there are no proceedings or actions which are threatened (of which any Borrower has or
reasonably should have notice or of which Agent has any notice) or pending against the account
debtor with respect to such Accounts which could be reasonably expected to result in any material
adverse change in such account debtor’s financial condition (including, without limitation, any
bankruptcy, dissolution, liquidation, reorganization or similar proceeding);



          (o) any Account the payment of which Co-Collateral Agents determine in their Permitted
Discretion and after notice to Administrative Borrower is doubtful by reason of the account
debtor’s financial condition or inability to pay;



          (p) such Accounts are subject to the first priority, valid and perfected security interest of
Agent (except as to priority, subject to the Liens permitted under clauses (b) and (k) of the
definition of Permitted Liens hereof) and any goods giving rise thereto were not at the time of the
sale thereof, subject to any Liens except those permitted in this Agreement;



          (q) such Accounts are not subject to any Lien other than (i) the Lien of Agent, (ii) those
permitted in clauses (b), (c), (d), (k) and (p) of the definition of the term Permitted Liens (but
as to Liens



13









 







referred to in clause (d), the extent such Liens have been waived pursuant to Collateral
Access Agreements or with respect to which Co-Collateral Agents shall have established a Reserve or
notified the Administrative Borrower that no Reserve will be established and as to Liens referred
to in clause (k), subject to the right of Co-Collateral Agents to establish a Reserve as provided
therein), (iii) Liens permitted in clause (z) of the definition of the term Permitted Liens,
subject to any applicable Deemed Reserve, or with respect to which the Agent shall have established
a Reserve or notified the Administrative Borrower that no Reserve will be established and (iv) any
other Liens permitted under this Agreement that are subject to the Intercreditor Agreement or to
another intercreditor agreement in form and substance reasonably satisfactory to Agent between the
holder of such Lien and Agent;



          (r) such Accounts are Accounts with respect to which (i) the goods giving rise to such Account
have been shipped and billed to the account debtor, and (ii) the services giving rise to such
Account have been performed and billed to the Account Debtor, or



          (s) (i) such Accounts do not consist of retainage invoices or progress billings (such that the
obligation of the account debtors with respect to such Accounts is conditioned upon such Borrower’s
satisfactory completion of any further performance under the agreement giving rise thereto), and
(ii) such Accounts do not consist of bill and hold invoices;



          (t) such Accounts comply in all material respects with the covenants contained in Section
7.2(b) of this Agreement and with respect to the representations and warranties contained in
Section 7.2(b) to the extent such terms and conditions consist of representations and warranties
that are qualified as to materiality or Material Adverse Effect then the same shall be true and
correct as to such Accounts and to the extent that such terms and conditions consist of
representations and warranties that are not so qualified, the same shall be true and correct as to
such Accounts in all material respects;



          (u) the account debtor is not located in a state requiring the filing of a Notice of Business
Activities Report or similar report in order to permit such Borrower to seek judicial enforcement
in such State of payment of such Account, unless such Borrower has qualified to do business in such
state or has filed a Notice of Business Activities Report or equivalent report for the then current
year or such failure to qualify or file and inability to seek judicial enforcement is capable of
being remedied without any material delay or material cost;



          (v) the sale of goods or the rendition of services giving rise to such Account is not
supported by a performance, bid or surety bond unless the issuer of such bond shall have waived in
writing any rights or interest in and to all Revolving Loan Priority Collateral, which waiver is in
form and substance reasonably satisfactory to Agent;



          (w) none of the transactions giving rise to such Accounts violate any applicable law or
regulation in any material respect, and all documentation relating to such Accounts is legally
sufficient under such laws and regulations


Without limitation upon the right of Co-Collateral Agents to establish Reserves hereunder, Eligible
Accounts will be reduced, without duplication, by amounts constituting Reserves for discounts,
rebates, rebate accruals, warranty reserves, accrued advertising, unapplied cash, scrap allowances,
back charges, and any credits and allowances of any nature that are not paid in respect of such
Accounts; and reduced by the variance between the aging of such Accounts and the general ledger.



Notwithstanding the foregoing, Co-Collateral Agents may, from time to time in their Permitted
Discretion, upon three (3) Business Days prior notice to Administrative Borrower change the
criteria for Eligible Accounts set forth above or add any new criteria for Eligible Accounts based
on either: (i) an


14









 






event, condition or other circumstance arising after the date hereof, or (ii) an event, condition
or other circumstance existing on the date hereof to the extent Agent has no knowledge thereof or
of its affect on the Accounts prior to the date hereof, in either case under clause (i) or (ii)
which adversely affects or could reasonably be expected to adversely affect the Accounts in any
material respect as determined by Co-Collateral Agents in their exercise of its Permitted
Discretion; provided, that, during such three (3) Business Day period, the
Borrowing Base shall, solely for the purposes of any new Loans or Letters of Credit requested by
any Borrower during such three (3) Business Day period, exclude any Accounts not constituting
Eligible Accounts solely by reason of such proposed changes or additions to the criteria for
Eligible Accounts set forth in such notice. Any such change in criteria shall have a reasonable
relationship to the event, condition or other circumstance that is the basis for such change. Upon
delivery of such notice, Agent will be available from time to time during business hours to consult
with Administrative Borrower in connection with the basis for such new criteria or changes to the
criteria. Borrowers may take such action as may be required so that the event, condition or matter
that is the basis for such change no longer exists, in a manner and to the extent satisfactory to
Co-Collateral Agents in their exercise of its Permitted Discretion. In no event shall such notice
or opportunity limit the right of Agent to make such change, unless Co-Collateral Agents shall have
determined in their Permitted Discretion that the event, condition or other circumstance that is
the basis for such new criteria or changes to the criteria no longer exists (except if there is a
reasonable prospect that such event, condition or other circumstance will occur again within a
reasonable period of time thereafter) or unless Co-Collateral Agents shall have determined in their
Permitted Discretion that it has otherwise been adequately addressed by the applicable Borrower.
Any Accounts that are not Eligible Accounts shall nevertheless be part of the Collateral. In
addition to the foregoing, the determination of Eligible Accounts acquired in any Permitted
Acquisition shall be subject to the terms of the last paragraph of the definition of the term
Permitted Acquisition herein.




     1.59 “Eligible In-Transit Inventory” shall mean Inventory that would otherwise be Eligible
Inventory (other than for its location):



          (a) that has been shipped from a location of any Borrower or from the manufacturer or
wholesale distributor thereof within the United States of America for receipt at a location of any
Borrower within the United States of America and permitted hereunder or from any location of a
Borrower to another location of a Borrower, within thirty (30) days of shipment, but in either
case, which has not yet been delivered to such Borrower,



               (i) for which the purchase order is in the name of a Borrower,



               (ii) title has passed to such Borrower (and Agent has received such evidence thereof as it has
reasonably requested),



               (iii) except as otherwise reasonably agreed by Agent, for which a Borrower is designated as
“shipper” and/or consignor and the document of title or waybill reflects a Borrower as consignee
with respect thereto,



               (iv) as to which Agent has control over the documents of title, to the extent applicable, to
such Inventory and



               (v) which is insured in accordance with the terms of this Agreement;


provided, that, Agent may, upon notice to Administrative Borrower, exclude any
particular Inventory from Eligible In-Transit Inventory, in the event that Co-Collateral Agents
reasonably determine that such Inventory is subject to any Person’s right or claim that is (or is
capable of being) senior to, or pari passu


15









 






with, the security interest and lien of Agent therein (such as, without limitation a right of
stoppage in transit), as applicable or that may otherwise adversely impact the ability of Agent to
realize upon such Inventory, and




          (b) is located outside of the United States of America and which is in transit to either the
premises of a Freight Forwarder in the United States of America or the premises of any Borrower in
the United States of America which are either owned and controlled by such Borrower or leased by
such Borrower (but only if Agent has received a Collateral Access Agreement duly authorized,
executed and delivered by such Freight Forwarder and the owner and lessor of such leased premises,
as the case may be); provided, that,



               (i) Agent has a first priority perfected security interest in and lien upon such Inventory and
all documents of title with respect thereto (subject to such Liens as are permitted under clause
(c) of the definition of the term Permitted Liens),



               (ii) such Inventory either (A) is the subject of a negotiable bill of lading (1) in which
Agent is named as the consignee (either directly or by means of endorsements), (2) that was issued
by the carrier respecting such Inventory that is subject to such bill of lading, and (3) that is in
the possession of Agent or the Freight Forwarder handling the importing, shipping and delivery of
such Inventory, in all cases, acting on Agent’s behalf subject to a Collateral Access Agreement
duly authorized, executed and delivered by such Freight Forwarder, or (B) is the subject of a
negotiable forwarder’s cargo receipt and such cargo receipt on its face indicates the name of the
freight forwarder as a carrier or multi-modal transport operator and has been signed or otherwise
authenticated by it in such capacity or as a named agent for or on behalf of the carrier or
multi-modal transport operator, in any case respecting such Inventory and either (1) names Agent as
the consignee (either directly or by means of endorsements), or (2) is in the possession of Agent
or the Freight Forwarder handling the importing, shipping and delivery of such Inventory, in all
cases, acting on Agent’s behalf subject to a Collateral Access Agreement duly authorized, executed
and delivered by such Freight Forwarder,



               (iii) such Borrower has title to such Inventory, and Agent shall have received such evidence
thereof as it may from time to time reasonably require,



               (iv) Agent shall have received a Collateral Access Agreement, duly authorized, executed and
delivered by the Freight Forwarder located in the United States of America handling the importing,
shipping and delivery of such Inventory,



               (v) such Inventory is insured against types of loss, damage, hazards, and risks, and in
amounts, satisfactory to Agent in its Permitted Discretion, and Agent shall have received a copy of
the certificate of marine cargo insurance in connection therewith in which it has been named as an
additional insured and loss payee in a manner reasonably acceptable to Agent,



               (vi) Agent shall have received (A) a certificate duly executed and delivered by an officer of
such Borrower certifying to Agent that, to the best of the knowledge of such Borrower, such
Inventory complies in all material respects with all of such Borrower’s covenants contained herein
concerning Eligible In-Transit Inventory and with respect to the representations and warranties
contained herein concerning Eligible In-Transit Inventory to the extent such terms and conditions
consist of representations and warranties that are qualified as to materiality or Material Adverse
Effect then the same shall be true and correct as to such Inventory and to the extent that such
terms and conditions consist of representations and warranties that are not so qualified, the same
shall be true and correct as to such Inventory in all material respects and that the shipment as
evidenced by the documents conforms to



16









 







the related order documents, and (B) upon Agent’s request, a copy of the invoice, packing slip
and manifest with respect thereto,



               (vii) such Inventory is not subject to a Letter of Credit, and



               (viii) such Inventory shall not have been in transit for more than sixty (60) days.


The aggregate amount of Inventory constituting Eligible In-Transit Inventory under clauses (a) and
(b) above for purposes of the calculation of the Borrowing Base at any time will not exceed
$3,000,000.




     1.60 “Eligible Inventory” shall mean the Inventory of Borrowers that comply in all material
respects with each of the representations and warranties respecting Eligible Inventory made herein,
and that satisfy the criteria set forth below. Eligible Inventory shall be calculated on the basis
of the Inventory set forth in Borrowers’ perpetual inventory reports adjusted for the purchase
price variance and the lower of cost or market adjustments and shall not include:



          (a) Inventory that does not consist of finished goods and raw materials and certain
work-in-process for such finished goods;



          (b) obsolete or slow moving Inventory (with inventory that has not been sold after a period of
more than three hundred sixty (360) days being deemed to be obsolete or slow moving for this
purpose), or is damaged or unfit for sale;



          (c) Inventory that is not of a type held for sale by any Borrower in the ordinary course of
business;



          (d) Inventory that is not owned by any Borrower;



          (e) Inventory that is located on premises leased by any Borrower, or stored with a bailee,
warehouseman, processor or similar Person, unless (i) Agent has given its prior consent thereto,
(ii) a Collateral Access Agreement, in form and substance reasonably satisfactory to Agent has been
delivered to Agent, or (iii) Reserves for rent or other amounts payable with respect to such
premises, processing or storage reasonably satisfactory to Co-Collateral Agents in their Permitted
Discretion, but in no event to exceed the limits for such rent or other amounts with respect to
such locations as provided herein, have been established with respect thereto; provided,
that, (A) in no event shall Inventory at third party processors having a value of greater
than $10,000,000 (or such higher amount as Co-Collateral Agents may hereafter agree) constitute
Eligible Inventory and (B) in no event shall Inventory at locations where the value of such
Inventory is less than $125,000 constitute Eligible Inventory;



          (f) Inventory that is placed on consignment or is in transit with a common carrier from
vendors or suppliers, except for Eligible In-Transit Inventory described in subsection (a) of the
definition of Eligible In-Transit Inventory;



          (g) Inventory that consists of display items, samples, manufacturing supplies or replacement
or spare parts not considered for sale in the ordinary course of business or is paint;



          (h) Inventory that consists of goods which have been returned by the buyer, other than goods
that are undamaged or that are resalable in the normal course of business;



          (i) Inventory that does not comply in all material respects with each of the representations
and warranties respecting Eligible Inventory made herein;



17









 





          (j) Inventory that consists of Hazardous Materials that can be transported or sold only with
licenses that are not readily available;



          (k) Inventory that is covered by negotiable document of title, unless such document has been
delivered to Agent;



          (l) packaging, packing and shipping materials;



          (m) supplies used or consumed in such Borrower’s business;



          (n) bill and hold Inventory;



          (o) Inventory located outside the United States of America except for Eligible In-Transit
Inventory described in subsection (b) of the definition of Eligible In-Transit Inventory;



          (p) such Inventory that is not subject to a first-priority, valid and perfected security
interest of Agent and is subject to any Lien other than (i) the Lien of Agent, (ii) as to priority
those permitted in clause (b), (c), (d), (k), (o) and (p) of the definition of the term Permitted
Liens (but as to Liens referred to in clause (d), the extent such Liens have been waived pursuant
to Collateral Access Agreements or with respect to which Co-Collateral Agents shall have
established a Reserve or notified the Administrative Borrower that no Reserve will be established
and as to Liens referred to in clauses (k) and (o), subject to the right of Co-Collateral Agents to
establish a Reserve as provided therein), (iii) Liens permitted in clause (z) of the definition of
the term Permitted Liens, subject to any applicable Deemed Reserve, or with respect to which the
Agent shall have established a Reserve or notified the Administrative Borrower that no Reserve will
be established and (iv) and any other Liens permitted under this Agreement that are subject to the
Intercreditor Agreement or to another intercreditor agreement in form and substance reasonably
satisfactory to Agent between the holder of such Lien and Agent;



          (q) “tolling” Inventory having a value in excess of $3,000,000; provided,
that, only fifty (50%) percent of the value of such Inventory shall be included in the
calculation of the Borrowing Base;



          (r) Inventory that is not produced, used, stored and maintained in accordance with applicable
insurance standards or in conformity with applicable laws in all material respects



          (s) Inventory that is a discontinued product or component thereof and is not immediately
usable in a continuing product;



          (t) Inventory that contains or bears any intellectual property rights licensed to such Person
unless Agent is satisfied in its Permitted Discretion that it may sell or otherwise dispose of such
Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such
licensor, or (iii) incurring any liability with respect to payment of royalties other than
royalties incurred pursuant to sale of such Inventory under the current licensing agreement;



          (u) Inventory that is not reflected in a current perpetual inventory report of such Person;



          (v) Inventory for which reclamation rights have been asserted by the seller; and



          (w) otherwise Eligible Inventory to the extent of intercompany profit thereon.


Eligible Inventory shall be adjusted by Agent to account for the amount of any variance between
perpetual inventory reports and the general ledger of Borrowers or the results of test counts of
Inventory


18









 






conducted by Agent with respect thereto based on the results of each field examination or other
information with respect thereto received by Agent.



Notwithstanding the foregoing, Co-Collateral Agents may, from time to time, in their Permitted
Discretion, upon three (3) Business Days’ prior notice to Administrative Borrower, change the
criteria for Eligible Inventory set forth above or add any new criteria for Eligible Inventory
based on either: (i) an event, condition or other circumstance arising after the date hereof, or
(ii) an event, condition or other circumstance existing on the date hereof to the extent Agent has
no knowledge thereof or of its affect on the Inventory prior to the date hereof, in either case
under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely
affect the Inventory in any material respect as determined by Co-Collateral Agents in the exercise
of their Permitted Discretion; provided, that, during such three (3) Business Day
period, the Borrowing Base shall, solely for the purposes of any new Loans or Letters of Credit
requested by any Borrower during such three (3) Business Day Period, exclude any Inventory not
constituting Eligible Inventory solely by reason of such proposed changes or additions to the
criteria for Eligible Inventory set forth in such notice. Any such change in criteria shall have a
reasonable relationship to the event, condition or other circumstance that is the basis for such
change. Upon delivery of such notice, Agent will be available from time to time during business
hours to consult with Administrative Borrower in connection with the basis for such changes to the
criteria. Borrowers may take such action as may be required so that the event, condition or matter
that is the basis for such change no longer exists, in a manner and to the extent satisfactory to
Co-Collateral Agents in the exercise of their Permitted Discretion. In no event shall such notice
or opportunity limit the right of Agent to make such change, unless Co-Collateral Agents shall have
determined in their Permitted Discretion that the event, condition or other circumstance that is
the basis for such new criteria or changes to the criteria no longer exists (except if there is a
reasonable prospect that such event, condition or other circumstance will occur again within a
reasonable period of time thereafter) or unless Co-Collateral Agents shall have determined in their
Permitted Discretion that it has otherwise been adequately addressed by the applicable Borrower.
Any Inventory that is not Eligible Inventory shall nevertheless be part of the Collateral. In
addition to the foregoing, the determination of Eligible Inventory acquired in any Permitted
Acquisition shall be subject to the terms of the last paragraph of the definition of the term
Permitted Acquisition herein.




     1.61 “Eligible Transferee” shall mean (a) any Lender; (b) the parent company of any Lender
and/or any Affiliate of such Lender which is at least fifty (50%) percent owned by such Lender or
its parent company; (c) an Approved Fund approved by Agent; and (d) any other commercial bank,
financial institution or “accredited investor” (as defined in Regulation D under the Securities Act
of 1933) approved by Agent, such approval not to be unreasonably withheld, conditioned or delayed;
provided, that, neither any Borrower nor any Guarantor nor any Affiliate of any
Borrower or Guarantor shall qualify as an Eligible Transferee, except a Sponsor Affiliated Lender.



     1.62 “Environmental Laws” shall mean any and all U.S., Canadian or foreign federal, state,
provincial, territorial, foreign, local or municipal laws, rules, orders, enforceable guidelines
and orders-in-council, regulations, statutes, ordinances, codes, decrees, and such requirements of
any Governmental Authority properly promulgated and having the force and effect of law or other
requirements of law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health (as it relates to exposure to Hazardous
Materials) or the environment, as have been, or now or at any relevant time hereafter are, in
effect.



     1.63 “Environmental Permits” shall mean any and all permits, licenses, registrations, and any
other authorization required under any Environmental Law.



     1.64 “Equipment” shall mean, as to any Person, all of such Person’s now owned and hereafter
acquired equipment, wherever located, including machinery, data processing and computer equipment



19









 







(whether owned or licensed and including embedded software), vehicles, rolling stock, tools,
furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or
used in connection therewith, and substitutions and replacements thereof, wherever located.



     1.65 “Equity Interests” shall mean, with respect to any Person, all of the shares, interests,
participations or other equivalents (however designated) of such Person’s capital stock or
partnership, limited liability company or other equity or ownership interests at any time
outstanding, all of the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other equity interests in) such Person, all of the
securities convertible into or exchangeable for shares of capital stock of (or other equity
interests in) such Person and all warrants, rights or options for the purchase or acquisition from
such Person of such shares (or such other equity interests), but excluding (a) any debt security
that is convertible into or exchangeable for any such shares (or such other equity interests and
(b) any stock appreciation rights, interests in phantom equity plans or similar rights or
interests.



     1.66 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, together with
all rules, regulations and interpretations thereunder or related thereto.



     1.67 “ERISA Affiliate” shall mean any person required to be aggregated with any Borrower, any
Guarantor or any of its or their respective Subsidiaries under Sections 414(b), 414(c), 414(m) or
414(o) of the Code.



     1.68 “ERISA Event” shall mean, individually or in the aggregate, any of the following events
or conditions that either individually or in the aggregate, have or could reasonably be expected to
have a Material Adverse Effect: (a) any “reportable event”, as defined in Section 4043(c) of ERISA
or the regulations issued thereunder, with respect to a Pension Plan, other than events as to which
the requirement of notice has been waived in regulations by the Pension Benefit Guaranty
Corporation; (b) the adoption of any amendment to a Pension Plan that would require the provision
of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) a complete or
partial withdrawal by any Borrower, Guarantor or any ERISA Affiliate from a Multiemployer Plan or a
cessation of operations which is treated as such a withdrawal or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a
Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement
of proceedings by the Pension Benefit Guaranty Corporation to terminate a Pension Plan; (e) an
event or condition which might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f)
the imposition of any liability under Title IV of ERISA, other than the Pension Benefit Guaranty
Corporation premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower,
Guarantor or any ERISA Affiliate.



     1.69 “Eurodollar Rate Loans” shall mean any Loans or portion thereof on which interest is
payable based on the Adjusted Eurodollar Rate in accordance with the terms hereof.



     1.70 “Event of Default” shall have the meaning specified in Section 12.1 hereof.



     1.71 “Excess Availability” shall mean, as to Borrowers, the amount calculated at any date,
equal to: (a) the least of: (i) the Borrowing Base, (ii) the Maximum Credit and (iii) the
Revolving Loan Limit, minus, without duplication, (b) the sum of: (i) the principal amount of all
then outstanding and unpaid Loans and Special Agent Advances, plus (ii) the Letter of Credit
Obligations.



     1.72 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.



20









 





     1.73 “Excluded Property” shall mean:



          (a) property or assets of any Foreign Subsidiary,



          (b) all Real Property other than the Mortgaged Fee Properties and intellectual property as
registered in, or created under the laws of, a jurisdiction outside of the United States of America
(except to the extent constituting collateral for the Term Loan Debt),



          (c) motor vehicles and other property and assets subject to certificates of title (except to
the extent constituting collateral for the Term Loan Debt),



          (d) any contract, chattel paper, general intangibles, Intellectual Property, lease, permit,
license, charter or other agreement or instrument, and any right, title or interest in respect
thereof, covering real or personal property, as such, if under the terms of such contract, lease,
permit, license, charter or other agreement or instrument, or applicable law with respect thereto,
the valid grant of a security interest or lien therein to Agent is prohibited or would result in a
breach, default or termination thereof; provided, that, the foregoing exclusion
shall in no way be construed to apply to the extent that any such prohibition, breach, default or
termination under any such contract, lease, permit, license, charter or other agreement or
instrument is unenforceable under Sections 9-406, 9-407 or 9-408 of the UCC or other applicable law
such that a security interest therein may be granted to Agent without resulting in a breach,
default or termination thereunder to such extent;



          (e) as to any series of Equity Interests of any Foreign Subsidiary, the Equity Interests of
such series in excess of sixty five (65%) percent of all of the issued and outstanding Equity
Interests of such series or (ii) de minimis shares of a Foreign Subsidiary held as a nominee or in
a similar capacity;



          (f) any Equity Interests of a Subsidiary of a Foreign Subsidiary;



          (g) any property that would otherwise be included in the Collateral (and such property shall
not be deemed to constitute a part of the Collateral) if such property has been sold or otherwise
transferred in connection with a Sale and Leaseback Transaction to the extent permitted by and
subject to the terms of Section 10.11 of this Agreement;



          (h) any Equipment or other property that would otherwise be included in the Collateral (and
such property shall not be deemed to constitute a part of the Collateral) if such Equipment or
other property is subject to a Lien described in clause (f), (l), (p)(ii) or (s) of the definition
of “Permitted Liens”;



          (i) assets that are not of a type that would constitute Revolving Loan Priority Collateral, to
the extent that Liens therein would result in adverse tax or accounting consequences as reasonably
determined by Administrative Borrower;



          (j) assets over which the granting of Liens in such assets would be prohibited by contract
permitted under this Agreement and set forth on Schedule 1.73 hereto, applicable law or
regulation or, in the case of any non-wholly owned Subsidiary, the organizational documents thereof
(including Permitted Liens, leases or licenses) prohibit the valid grant of a security interest or
lien therein to Agent; provided, that, the foregoing exclusions shall in no way be
construed to apply to the extent that any such prohibition, is unenforceable under Sections 9-406,
9-407 or 9-408 of the UCC or other applicable law such that a security interest therein may be
granted to Agent;



21









 





          (k) property or assets (other than Intellectual Property) and Mortgaged Fee Properties, which
are not of the type in which a security interest can be created under the UCC;



          (l) any assets not constituting Revolving Loan Priority Collateral that are excluded from the
Term Loan Priority Collateral pursuant to the Term Loan Documents as in effect on the date hereof;



          (m) Foreign Intellectual Property;



          (n) trademark or service mark applications that have been filed with the U.S. Patent and
Trademark Office on the basis of an “intent-to-use” with respect to such marks, unless and until a
statement of use or amendment to allege use is filed and accepted by the U.S. Patent and Trademark
Office at which time such marks shall automatically and without further action by the parties be
subject to the security interests and liens granted by Borrowers or Guarantors to Agent hereunder;



          (o) any account containing collateral securing the obligations of Borrowers and Guarantors
with respect to the Existing Letters of credit and any cash, Cash Equivalents or investment
property in such accounts;



          (p) those items of Term Loan Priority Collateral as to which the applicable Borrower or
Guarantor, on the one hand, and the Co-Collateral Agents, on the other hand, shall mutually and
reasonably determine that the costs of obtaining such a security interest are excessive in relation
to the value of the security interest to be afforded thereby; and



          (q) any money, cash, Cash Equivalents, checks, other negotiable instrument, funds and other
evidence of payment held in any deposit account of the Borrowers or any of their Subsidiaries in
the nature of security deposit with respect to obligations for the benefit of the Borrowers or any
of their Subsidiaries, which must be held for or returned to the applicable counterparty under
applicable law or Contractual Obligations entered into in the ordinary course of business.



     1.74 “Excluded Real Properties” shall mean, collectively, the fee or leasehold interest in
Real Property owned by Parent or any of its Subsidiaries other than Mortgaged Fee Properties.



     1.75 “Existing Foreign Subsidiaries” shall mean Building Systems de Mexico S.A. de C.V., a
corporation organized under the laws of Mexico and Robertson Building Systems, Limited, a
corporation organized the laws of the Province of Ontario, Canada, and their respective successors
and assigns.



     1.76 “Existing Letters of Credit” shall mean, collectively, the letters of credit issued or
to be issued for the account of a Borrower or Guarantor or for which such Borrower or Guarantor is
otherwise liable listed on Schedule 1.76 hereto .



     1.77 “Factoring Transaction” shall mean any transaction or series of transactions entered
into by any Person pursuant to which such Person sells, conveys or otherwise transfers (or purports
to sell, convey or otherwise transfer) any accounts receivable and/or related rights or assets of
such Person to a factor or other similar Person that is not an Affiliate.



     1.78 “Federal Funds Rate” shall mean, for any period, a fluctuating interest rate per annum
equal, for each day during such period, to 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 for such day (or, if such day is not a Business Day, for the next preceding 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 such day on such transactions received by the Agent
from three Federal Funds brokers of recognized standing selected by it.



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     1.79 “Fee Letter” shall mean the fee letter, dated of even date herewith, by and among Parent,
for itself and its Subsidiaries (and by which Borrowers and Guarantors hereby confirm their
agreement to be bound), Wells Fargo and certain other Persons, setting forth certain fees payable
by Borrowers in connection with the Credit Facility.



     1.80 “Financing Agreements” shall mean, collectively, this Agreement, any notes issued
pursuant hereto, any Guarantees, any Security Agreements, any Deposit Account Control Agreements,
any Investment Property Control Agreements, the Intercreditor Agreement, and the other agreements,
documents, instruments and certificates from time to time executed and/or delivered in connection
with any of the foregoing, in each case, together with all schedules and exhibits thereto in form
and substance reasonably satisfactory to Agent, as the same now exist or may hereafter exist or be
amended, modified, supplemented, extended, renewed, restated or replaced; provided,
that, the Financing Agreements shall not include Hedge Agreements.



     1.81 “Foreign Intellectual Property” shall mean, as to each Borrower and Guarantor, such
Borrower’s and Guarantor’s now owned or hereafter acquired non-US patents, patent applications,
trademarks, trademark applications, trade names, copyrights, technology, know-how and processes.



     1.82 “Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which a Borrower is resident for tax purposes. For purposes of
this definition, the United States of America, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.



     1.83 “Foreign Subsidiary” shall mean (a) any Subsidiary of Parent that is not organized or
incorporated under the laws of the United States of America, or any state thereof or the District
of Columbia and any Subsidiary of such Foreign Subsidiary and (b) any Foreign Subsidiary Holdco.



     1.84 “Foreign Subsidiary Holdco” shall mean any Subsidiary of Parent that has no material
assets other than securities or Indebtedness of one or more Foreign Subsidiaries (or Subsidiaries
thereof), and intellectual property relating to such Foreign Subsidiaries (or Subsidiaries thereof)
and other assets incidental to an ownership interests in any such securities, Indebtedness,
intellectual property or Subsidiaries (provided, that, in no event for purposes of
this definition shall assets consisting of accounts receivable (other than accounts receivable from
such securities, Indebtedness or intellectual property), inventory, equipment or real property be
deemed to be “incidental to” any of such assets).



     1.85 “Freight Forwarders” shall mean the persons listed on Schedule 1.85 hereto or
such other person or persons as may be selected by Borrowers after the date of this Agreement, and
after written notice by Borrowers to Agent, who are reasonably acceptable to Agent to clear
Inventory through the Bureau of Customs and Border Protection (formerly the Customs Service) or
other domestic or foreign export control authorities or otherwise perform port of entry services to
process Inventory imported by Borrowers from outside the United States of America (such persons
sometimes being referred to herein individually as a “Freight Forwarder”); provided,
that, as to each such person, (a) Agent shall have received a Collateral Access Agreement
by such person in favor of Agent duly authorized, executed and delivered by such person, (b) such
agreement shall be in full force and effect and (c) such person shall be in compliance in all
material respects with the terms thereof.



     1.86 “GAAP” shall mean generally accepted accounting principles in the United States of
America as in effect from time to time as set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards Board which are applicable to
the circumstances as of the date of determination consistently applied; provided,
that, in the event of any change in GAAP after the date hereof that affects the covenant in
Section 11.1 hereof (including the calculation of the



23









 







Consolidated Fixed Charge Coverage Ratio or Consolidated Net Income and any definitions
related thereto), Administrative Borrower may by notice to Agent, or Agent may, and at the request
of Required Lenders shall, by notice to Administrative Borrower require that compliance with such
covenant be determined and such calculations be made in accordance with GAAP as in effect, and as
applied by Parent and its Subsidiaries, immediately before the applicable change in GAAP became
effective, until either the notice from the applicable party is withdrawn or such covenant is
amended in a manner satisfactory to Administrative Borrower, Agent and the Required Lenders.
Administrative Borrower will notify Agent of any such changes to GAAP and provide materials to
Agent to show the effect on the financial statements of such changes when and to the extent
included in the annual and quarterly reports filed by Parent with the Securities and Exchange
Commission.



     1.87 “Governmental Authority” shall mean any nation or government, any state, province, or
other political subdivision thereof, any central bank (or similar monetary or regulatory authority)
thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.



     1.88 “Guarantee” shall mean the Guaranty Agreement delivered to Agent as of the date hereof
substantially in the form of Exhibit D hereto, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.



     1.89 “Guarantors” shall mean each Person that shall be or become party to the Guarantee and
thereby guarantee the Obligations of the Borrower as provided therein; collectively, the
“Guarantors”. As of the date hereof, Parent and Steelbuilding.com, Inc. are the only Guarantors.



     1.90 “Guaranty Obligation” shall mean, with respect to any Person, without duplication, any
obligation of such Person (other than endorsements in the ordinary course of business of
instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of
any other Person in any manner, whether direct or indirect, and including, without limitation, any
such obligation, whether or not contingent, (a) to purchase any such Indebtedness or any property
constituting security therefor, (b) to advance or provide funds or other support for the payment or
purchase of such Indebtedness or to maintain working capital, solvency or other balance sheet
condition of such other Person for the benefit of any holder of such Indebtedness of such other
Person, (c) to lease or purchase property, securities or services primarily for the purpose of
assuring the holder of such Indebtedness of such other Person of the ability of such other Person
to make payment thereon, or (d) to otherwise assure or hold harmless the holder of such
Indebtedness against loss in respect thereof. The amount of any Guaranty Obligation hereunder at
any time shall (subject to any limitations set forth in any agreement or instrument governing such
Guaranty Obligation) be deemed to be an amount equal to the then outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty
Obligation is made (or if less, the amount giving effect to such limitations).



     1.91 “Hazardous Materials” shall mean any hazardous or toxic substances or materials or
wastes defined, listed, or regulated as such in or under, or which may give rise to liability
under, any applicable Environmental Law, including gasoline, petroleum (including crude oil or any
fraction thereof), petroleum products or by-products, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.



     1.92 “Hedge Agreement” shall mean an agreement that is a rate swap agreement, basis swap,
forward rate agreement, commodity swap, interest rate option, forward foreign exchange agreement,
spot foreign exchange agreement, rate cap agreement rate, floor agreement, rate collar agreement,
currency swap agreement, cross-currency rate swap agreement, currency option, any other similar
agreement (including any option to enter into any of the foregoing or a master agreement for any
the foregoing together with all supplements thereto) for the purpose of protecting against or
managing exposure to



24









 







fluctuations in interest or exchange rates, currency valuations or commodity prices; sometimes
being collectively referred to herein as “Hedge Agreements”.



     1.93 “Indebtedness” shall mean, with respect to any Person, without duplication, (a) any
liability for payments in respect of borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof) or evidenced by bonds,
notes, debentures or similar instruments (including, without limitation, industrial revenue bonds
or similar arrangements of the type contemplated by Sections 10.3(s) and 10.3(t) hereof); (b) any
liability representing the balance deferred and unpaid of the purchase price of any property or
services (other than trade liabilities incurred in the ordinary course of business); (c) all
obligations as lessee under Capital Leases; (d) all reimbursement obligations and other liabilities
for payment of such Person with respect to surety bonds (whether bid, performance or otherwise),
letters of credit, banker’s acceptances, drafts or similar documents or instruments issued for such
Person’s account; (e) indebtedness of a Person secured by any Lien on any asset of such Person,
whether or not such indebtedness is assumed by or is a personal liability of such Person, all as of
such time; provided, that, if the recourse of the Person to whom such Indebtedness
is owed is limited to the asset subject to such Lien so that the Person obligated on such
indebtedness has no personal liability, then the amount of such Indebtedness of such Person shall,
at any time, be the lesser of the fair market value of the asset determined as such time in a
manner reasonably satisfactory to Agent or the amount of such Indebtedness; (f) all obligations,
liabilities and indebtedness of such Person (marked to market) arising under Hedge Agreements; (g)
indebtedness of any partnership or joint venture in which such Person is a general partner or a
joint venturer to the extent such Person is liable therefor as a result of such Person’s ownership
interest in such entity, except to the extent that the terms of such indebtedness expressly provide
that such Person is not liable therefor or such Person has no liability therefor as a matter of
law; (h) all Guaranty Obligations of such Person with respect to Indebtedness of another Person,
(i) all Disqualified Equity Interests of such Person, and (j) the principal and interest portions
of all remaining rental obligations of such Person under any synthetic lease or similar off-balance
sheet financing where such transaction is considered to be borrowed money for U.S. federal income
tax purposes but is classified as an operating lease in accordance with GAAP.



     1.94 “Indemnification Agreement” shall mean the Indemnification Agreement, dated as of the
date hereof, by and between Parent and the CD&R Investors, as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced.



     1.95 “Intellectual Property” shall mean, as to each Borrower and Guarantor, such Borrower’s
and Guarantor’s now owned or hereafter acquired United States patents, patent applications,
trademarks, trademark applications, trade names, copyrights, technology, know-how and processes.



     1.96 “Intercreditor Agreement” shall mean the Intercreditor Agreement, dated as of the date
hereof, by and among Agent and Term Loan Agent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.



     1.97 “Interest Payment Date” shall mean (a) with respect to any Base Rate Loan (including
Swing Line Loans), the last Business Day of each month to occur during any period in which such
Loan is outstanding, (b) with respect to any Eurodollar Rate Loan, the last day of the Interest
Period applicable to such Loan and, in the case of a Eurodollar Rate Loan with an Interest Period
of more than three months’ duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months’ duration after the first day of such Interest Period and (c)
with respect to any Loan, the Maturity Date or such earlier date on which the Commitments are
terminated or the Loans become due and payable.



     1.98 “Interest Period” shall mean for any Eurodollar Rate Loan, a period of approximately one
(1), two (2), or three (3) months duration (and, if acceptable to all Lenders, six (6), nine (9) or
twelve (12)



25









 







months duration) as any Borrower (or Administrative Borrower on behalf of such Borrower) may
elect, the exact duration to be determined in accordance with the customary practice in the
applicable Eurodollar Rate market; provided, that, such Borrower (or Administrative
Borrower on behalf of such Borrower) may not elect an Interest Period which will end after the last
day of the then current term of this Agreement.



     1.99 “Interest Rate” shall mean,



          (a) Subject to clause (b) of this definition below:



               (i) as to Base Rate Loans, a rate equal to the then Applicable Margin for Base Rate Loans on a
per annum basis plus the Base Rate, and



               (ii) as to Eurodollar Rate Loans, a rate equal to the then Applicable Margin for Eurodollar
Rate Loans on a per annum basis plus the Adjusted Eurodollar Rate.



          (b) Notwithstanding anything to the contrary contained herein, if an Event of Default has
occurred and is continuing, Agent may and Agent shall, at the direction of the Required Lenders,
upon notice to Administrative Borrower, increase the Applicable Margin otherwise used to calculate
the Interest Rate for Base Rate Loans and Eurodollar Rate Loans by two (2%) percent per annum, for
the period from and after the date of such notice but only for so long as such Event of Default is
continuing.



     1.100 “Inventory” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and
Guarantor’s now owned and hereafter existing or acquired goods, wherever located, which (a) are
leased by such Borrower or Guarantor as lessor; (b) are held by such Borrower or Guarantor for sale
or lease or to be furnished under a contract of service; (c) are furnished by such Borrower or
Guarantor under a contract of service; or (d) consist of raw materials, work in process, finished
goods or materials used or consumed in its business.



     1.101 “Investment” shall have the meaning set forth in Section 10.4 hereof.



     1.102 “Investment Agreement” shall mean the Investment Agreement, dated as of August 14,
2009, by and between Parent and Clayton, Dubilier & Rice Fund VIII, L.P., as amended on each of
August 28, 2009, August 31, 2009, October 8, 2009 and October 16, 2009, as the same now exists or
may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced.



     1.103 “Investment Documents” shall mean, collectively, the following (as the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced): (a)
the Investment Agreement; (b) the Stockholders Agreement; (c) the Registration Rights Agreement;
(d) the Indemnification Agreement and (e) the Series B Preferred Stock CoD.



     1.104 “Investment Property Control Agreement” shall mean an agreement in writing, in form and
substance reasonably satisfactory to Agent, by and among Agent, the Borrower or Guarantor that is
an account holder or customer (as the case may be) and any securities intermediary, commodity
intermediary or other person who has custody, control or possession of any investment property of
such account holder or customer, that is sufficient to perfect the security interests of Agent
therein and provides such other rights with respect thereto as Agent reasonably requires.



     1.105 “Issuing Bank” shall mean Wells Fargo Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder and its successors and assigns.



26









 





     1.106 “Lenders” shall mean the financial institutions who are signatories hereto as Lenders
(including Swing Line Lender) and other persons made a party to this Agreement as a Lender in
accordance with Section 15.7 hereof, and their respective successors and assigns; each sometimes
being referred to herein individually as a “Lender”.



     1.107 “Letter of Credit Documents” shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered or issued in connection
therewith, and any application therefor.



     1.108 “Letter of Credit Limit” shall mean $25,000,000.



     1.109 “Letter of Credit Obligations” shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all Letters of Credit outstanding at such time, plus, without duplication and (b)
the aggregate amount of all drawings under Letters of Credit for which Issuing Bank has not at such
time been reimbursed, and the aggregate amount of all payments made by each Lender to Issuing Bank
with respect to such Lender’s participation in Letters of Credit as provided in Section 2.3 for
which Borrowers have not at such time reimbursed the Lenders, whether by way of a Revolving Loan or
otherwise.



     1.110 “Letters of Credit” shall mean all letters of credit issued by an Issuing Bank for the
account of any Borrower pursuant to this Agreement, and all amendments, renewals, extensions or
replacements thereof.



     1.111 “Lien” or “lien” shall mean any mortgage, pledge, hypothecation, security deposit
arrangement, encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title retention agreement
and any Capital Lease having substantially the same economic effect as any of the foregoing).



     1.112 “Loans” shall mean, collectively, the Revolving Loans and the Swing Line Loans.



     1.113 “London Interbank Offered Rate” shall mean, with respect to any Eurodollar Rate Loan
for the Interest Period applicable thereto, the rate appearing on Reuters Screen LIBOR01 Page (or
on any successor or substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on such page of such
service, as determined by Agent from time to time for purposes of providing quotations of interest
rates applicable to eurodollar deposits in dollars in the London interbank market) at approximately
11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, that, if more than one rate is
specified on such Page for such comparable period, the applicable rate shall be the arithmetic mean
of all such rates (rounded to the nearest 1/100th of 1%). In the event that such rate
is not available at such time for any reason, then the term “London Interbank Offered Rate” shall
mean, with respect to any Eurodollar Rate Loan for the Interest Period applicable thereto, the rate
of interest per annum at which dollar deposits of $5,000,000 and for a term comparable to such
Interest Period are offered by the principal London office of Wells Fargo Bank, N.A. or Wachovia
Bank, National Association, as specified by Agent (or, in the event there is a successor Agent at
the time, any other commercial bank approved by the Administrative Borrower, Required Lenders and
such successor Agent), in immediately available funds in the London interbank market at
approximately 11:00 a.m. London time two (2) Business Days prior to the commencement of such
Interest Period.



     1.114 “Material Adverse Effect” shall mean a material adverse effect on (a) the business,
assets, operations or financial condition of Borrowers and Guarantors taken as a whole, (b) the
ability of Borrowers and Guarantors (taken as a whole) to perform their obligations under the
Financing



27









 







Agreements or (c) the rights of or remedies available to Agent, the Issuing Banks or Lenders
under the Financing Agreements.



     1.115 “Maturity Date” shall mean the earlier of (a)the date that is five (5) years from the
date hereof or (b) the maturity date of the Term Loan Debt.



     1.116 “Maximum Credit” shall mean the amount of $125,000,000 (subject to adjustment as
provided in Section 2.7 hereof).



     1.117 “Maximum Interest Rate” shall mean the maximum non-usurious rate of interest under
applicable Federal or State law as in effect from time to time that may be contracted for, taken,
reserved, charged or received in respect of the indebtedness of a Borrower to Agent or a Lender, or
to the extent that at any time such applicable law may thereafter permit a higher maximum
non-usurious rate of interest, then such higher rate.



     1.118 “Moody’s” shall mean Moody’s Investors Service, Inc., and its successors and assigns.



     1.119 “Mortgaged Fee Properties” shall mean, collectively, the Real Property owned in fee by
a Borrower or Guarantor described on Part I of Schedule 1.119, including all buildings,
improvements, structures and fixtures now or subsequently located thereon and owned by any such
Borrower or Guarantor.



     1.120 “Mortgages” shall mean the documents, agreements and instruments set forth on
Schedule 1.120 (as the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced).



     1.121 “Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3)
of ERISA which is or was at any time during the current year or the immediately preceding six (6)
years contributed to by any Borrower, Guarantor or any ERISA Affiliate or with respect to which any
Borrower, Guarantor or any ERISA Affiliate may incur any liability.



     1.122 “NCI Building Systems” shall have the meaning given to such term in the preamble
hereto.



     1.123 “Net Cash Proceeds” shall mean the aggregate cash proceeds received by Parent or any of
its Subsidiaries (other than Foreign Subsidiaries) in respect of any Disposition of any assets or
properties, or any interest in any assets and properties or as proceeds of any loans, letters of
credit or similar instruments or the issuance or sale of debt securities or as proceeds from the
issuance and/or sale of any Equity Interests, or settlement or payment in respect of any insurance
claim or condemnation proceeds to the extent not constituting reimbursement or compensation for
amounts previously paid by Parent or any of its Subsidiaries, in each case net of (a) the
reasonable fees, costs and expenses relating to such Disposition or loans, letters of credit or
similar instruments or the issuance or sale of debt securities Equity Interests, or settlement or
payment (including, without limitation, legal, accounting, brokerage, consultant, underwriting,
investment banking and other fees and commissions), (b) taxes paid or payable as a result thereof
(including reasonable estimates thereof for which Agent has received reasonably satisfactory
evidence of the basis for such estimate), (c) in the case of a Disposition of any assets or
properties, or interest in assets and properties, amounts applied to the repayment of Indebtedness
secured by a security interest, lien or other encumbrance (other than a lien created under the
Financing Agreements or the Term Loan Documents) on the assets or properties that are the subject
of such transaction required to be repaid in connection therewith, including payments in respect of
principal, interest, premiums and penalties and (d) appropriate reserves to be provided by Parent
or its Subsidiaries in accordance with GAAP with respect to any liabilities associated with such
Disposition of any assets or properties, or interest in assets and properties, or such transaction,
or the events giving rise thereto, and



28









 







other appropriate amounts to be used by Parent or any of its Subsidiaries to discharge or pay
on a current basis any other liabilities associated with such Disposition or events giving rise
thereto.



     1.124 “Net Recovery 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 an orderly liquidation value basis, net of expenses and charges in connection with
such, liquidation, as set forth in the most recent appraisal of Inventory received by Agent in
accordance with Section 7.3, and (b) the denominator of which is the applicable original cost of
the aggregate amount of the Inventory subject to such appraisal.



     1.125 “New Parent” shall have the meaning set forth in the definition of the term Permitted
Dispositions.



     1.126 “Non-Excluded Taxes” shall have the meaning set forth in Section 6.8.



     1.127 “Obligations” shall mean (a) any and all Revolving Loans, Swing Line Loans, Letter of
Credit Obligations, Special Agent Advances and all other obligations, liabilities and indebtedness
of every kind, nature and description owing by any or all of Borrowers to Agent, any Co-Collateral
Agent or any Lender, including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise, arising under any of the
Financing Agreements, whether now existing or hereafter arising, whether arising before, during or
after the initial or any renewal term of this Agreement or after the commencement of any case with
respect to such Borrower under the United States Bankruptcy Code or any similar statute (including
the payment of interest and other amounts which would accrue and become due but for the
commencement of such case, whether or not such amounts are allowed or allowable in whole or in part
in such case), whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, or secured or unsecured and (b) for purposes
only of Section 5.1 hereof and any Security Agreement and the Guaranty and subject to the priority
in right of payment set forth in Section 6.7 hereof, all obligations, liabilities and indebtedness
of every kind, nature and description owing by any or all of Borrowers or Guarantors to any Bank
Product Provider arising under or pursuant to any Bank Products, whether now existing or hereafter
arising; provided, that, (i) as to any such obligations, liabilities and
indebtedness arising under or pursuant to a Hedge Agreement, the same shall only be included within
the Obligations if (A) Administrative Borrower shall have notified Agent in writing at the time of
the execution and delivery of such Hedge Agreement that such obligations, liabilities and
indebtedness are to be deemed to constitute Obligations and (B) upon Agent’s request, Agent shall
have entered into an agreement, in form and substance reasonably satisfactory to Agent, with the
Bank Product Provider that is a counterparty to such Hedge Agreement, as acknowledged and agreed to
by Borrowers and Guarantors (or the Administrative Borrower acting on their behalf), providing for
the delivery to Agent by such counterparty of information with respect to the amount of such
obligations and providing for the other rights of Agent and such Bank Product Provider in
connection with such arrangements, (ii) any Bank Product Provider shall have delivered written
notice to Agent and Administrative Borrower that (A) such Bank Product Provider has entered into a
transaction to provide Bank Products to a Borrower or Guarantor and (B) the obligations arising
pursuant to such Bank Products provided to Borrowers or Guarantors constitute Obligations entitled
to the benefits of the security interest of Agent granted hereunder, and Agent and Administrative
Borrower shall have accepted such notice in writing and (iii) in no event shall any Bank Product
Provider to whom such obligations, liabilities or indebtedness are owing be deemed a Lender for
purposes hereof to the extent of and as to such obligations, liabilities or indebtedness other than
for purposes of Section 5.1 hereof and other than for purposes of Sections 14.1, 14.2, 14.3(b),
14.6, 14.7, 14.9, 14.12 and 15.6 hereof and in no event shall the approval of any such Person be
required in connection with the release or termination of any security interest or lien of Agent.



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     1.128 “Optional Payment” shall have the meaning given to such term in Section 10.9 hereof.



     1.129 “Parent” shall have the meaning set forth in the preamble hereto.



     1.130 “Parent Entity” shall mean any Person of which Parent becomes a Subsidiary after the
Closing Date that is designated in writing by Parent to Agent as a “Parent Entity” as of or
promptly following the date that Parent becomes a Subsidiary of such Person, provided that (i)
immediately prior to becoming a Parent Entity, such Person was a Subsidiary of Parent and became a
Parent Entity pursuant to a merger of another Subsidiary with Parent in which the Voting Stock of
Parent was exchanged for or converted into Voting Stock of such Person (or the right to receive
such Voting Stock), or (ii) immediately after Parent first becomes a Subsidiary of such Person,
more than 90% of the Voting Stock of such Person shall be held by one or more Persons that held
more than 90% of the Voting Stock of Parent immediately prior to Parent first becoming such
Subsidiary of such Person, or (iii) immediately after Parent first becomes a Subsidiary of such
Person, Permitted Holders shall own the requisite percentage of the Voting Stock of such Person as
is necessary to ensure that a Change of Control has not taken place.



     1.131 “Parent Entity Expenses” shall mean expenses, Taxes and other amounts incurred or
payable by any Parent Entity in respect of which Parent is permitted to make a Restricted Payment
pursuant to Section 10.5.



     1.132 “Participant” shall mean any financial institution that acquires and holds a
participation in the interest of any Lender in any of the Loans and Letters of Credit in conformity
with the provisions of Section 15.7 of this Agreement governing participations.



     1.133 “Payment Conditions” shall mean, as of the date of the applicable payment or other
transaction, and after giving effect thereto, (a) no Default or Event of Default shall exist or
have occurred and be continuing, (b) the daily average Excess Availability for the period of sixty
(60) consecutive days immediately preceding the date of such payment or other transaction shall not
be less than the greater of (i) $30,000,000 or (ii) twenty-four (24%) percent of the least of (A)
the Maximum Credit or (B) the Borrowing Base or (C) the Revolving Loan Limit, in each case after
giving effect to the making of any such payment or other transaction, on a pro forma basis using
the Excess Availability as of the date of the most recent calculation of the Borrowing Base
immediately prior to any such payment or other transaction, and as of the date of any such payment
or other transaction and after giving effect thereto, using the most recent calculation of the
Borrowing Base prior to the date of any such payment, on a pro forma basis, Excess Availability
shall be not less than such amount, (c) on a pro forma basis, after giving effect to the applicable
payment or other transaction, the Consolidated Fixed Charge Coverage Ratio for Parent and its
Subsidiaries for the immediately preceding twelve (12) consecutive month period ending on the last
day of the fiscal month prior to the date of any payment (or other transaction, as applicable) for
which Agent has received financial statements shall be equal to or greater than 1.00 to 1.00 and
(d) receipt by Agent of projections for the immediately succeeding twelve (12) consecutive month
period beginning after the date of payment (or other transaction, as applicable) (including in each
case, balance sheets and statements of income and loss, statements of cash flow, and the projected
Borrowing Base and Excess Availability) for Parent and its Subsidiaries on such basis (whether
monthly, quarterly, or annually) as Agent may reasonably specify, all in reasonable detail and in a
format consistent with the projections delivered by Parent to Agent prior to the date hereof,
together with such supporting information as Agent may reasonably request, which projections show,
on a pro forma basis after giving effect to the payment (or other transaction, as applicable),
minimum Excess Availability at all times during such period of not less than the amount set forth
above and that the Consolidated Fixed Charge Coverage Ratio is at all times equal to or greater
than 1.00 to 1.00 during such period.



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     1.134 “Payment in Full of all Obligations” shall have the meaning given to such term in
Section 15.1(a).



     1.135 “Pension Plan” shall mean a pension plan (as defined in Section 3(2) of ERISA) subject
to Title IV of ERISA which any Borrower or Guarantor sponsors, maintains, or to which any Borrower,
Guarantor or ERISA Affiliate makes, is making, or is obligated to make contributions, other than a
Multiemployer Plan.



     1.136 “Permits” shall mean all material permits, licenses, approvals, consents, certificates,
orders or authorizations of any Governmental Authority required for the lawful conduct of the
business of Borrowers and Guarantors.



     1.137 “Permitted Acquisitions” shall mean the acquisition by a Borrower or Guarantor after
the date hereof of all or a substantial part of the property or assets of any Person, or a
business, division or operating unit of any Person (including pursuant to a merger with such Person
by Parent or a Subsidiary of Parent, including a wholly owned Subsidiary formed solely for such
purpose that is merged with such Person) or of all or a majority of the Equity Interests of any
Person (such property, assets, business, division or operating unit or Person being referred to
herein as the “Acquired Business”), in each case in one transaction or a series of transactions
that satisfies each of the following conditions:



          (a) (i) subject to clauses (iv) and (v) below, in the case of any such Permitted Acquisition
where the aggregate amount of the consideration payable in connection with such Permitted
Acquisition that consists of cash, property, or Indebtedness incurred or assumed in connection
therewith (and excluding any Equity Interests of Parent or any Parent Entity, and any cash from the
Net Cash Proceeds of the issuance or sale of any such Equity Interests) is in an amount less than
or equal to $5,000,000, as of the date of the acquisition and after giving effect to the
acquisition, no Event of Default shall exist or have occurred and be continuing;



               (ii) subject to clauses (iv) and (v) below, in the case of any such Permitted Acquisition
where the aggregate amount of the consideration payable in connection with such Permitted
Acquisition that consists of cash, property, or Indebtedness incurred or assumed in connection
therewith (and excluding any Equity Interests of Parent or any Parent Entity, and any cash from the
Net Cash Proceeds of the issuance or sale of any such Equity Interests) is in excess of $5,000,000
but less than or equal to $15,000,000:



                    (A) as of the date of the acquisition and after giving effect to the acquisition, no Event of
Default shall exist or have occurred and be continuing;



                    (B) the daily average Excess Availability for the period of sixty (60) consecutive days
immediately preceding the date of such acquisition shall be not less than the greater of (1)
$30,000,000 or (2) twenty-four (24%) percent of the least of (x) the Maximum Credit or (y) the
Borrowing Base or (z) the Revolving Loan Limit, in each case after giving effect to the making of
any such acquisition, on a pro forma basis using the Excess Availability as of the date of the most
recent calculation of the Borrowing Base immediately prior to any such acquisition and as of the
date of any such acquisition and after giving effect thereto, using the most recent calculation of
the Borrowing Base prior to the date of any such acquisition, on a pro forma basis, Excess
Availability shall be not less than such amount; and



                    (C) Agent shall have received not less than five (5) Business Days’ prior written notice of
the proposed acquisition and such information with respect thereto as Agent may reasonably request,
in each case with such information to include (1) parties to such acquisition, (2) the proposed



31









 







date and amount of the acquisition, (3) description of the assets or shares to be acquired,
(4) the total purchase price for the assets to be purchased (and the terms of payment of such
purchase price);



               (iii) subject to clauses (iv) and (v) below, in the case of any such Permitted Acquisition
where the aggregate amount of the consideration payable in connection with such Permitted
Acquisition that consists of cash, property, or Indebtedness incurred or assumed in connection
therewith (and excluding any Equity Interests of Parent or any Parent Entity, and any cash from the
Net Cash Proceeds of the issuance or sale of any such Equity Interests) is in excess of
$15,000,000:



                    (A) the Payment Conditions shall be satisfied; and



                    (B) Agent shall have received not less than ten (10) Business Days’ prior written notice of
the proposed acquisition and such information with respect thereto as Agent may reasonably request,
in each case with such information to include (1) parties to such acquisition, (2) the proposed
date and amount of the acquisition, (3) description of the assets or shares to be acquired and (4)
the total purchase price for the assets to be purchased (and the terms of payment of such purchase
price);



               (iv) in the case of any Permitted Acquisition where all of the consideration for any Permitted
Acquisition consists of Equity Interests of Parent or any Parent Entity or cash from the Net Cash
Proceeds of the issuance of Equity Interests of Parent or any Parent Entity, regardless of the
amount of such consideration, the only conditions under this clause (a) applicable in such case are
that:



                    (A) as of the date of the acquisition and after giving effect to the acquisition, no Event of
Default shall exist or have occurred and be continuing; and



                    (B) either (1) Excess Availability shall be not less than the greater of $20,000,000 or
eighteen (18%) percent of the least of the Maximum Credit, the Borrowing Base, or the Revolving
Loan Limit, on a pro forma basis giving effect to such acquisition, for each of the immediately
succeeding twelve (12) consecutive months beginning after the date of such acquisition based on
updated projections received by Agent (including in each case, forecasted balance sheets and
statements of income and loss, statements of cash flow, and the projected Borrowing Base and Excess
Availability) for Parent and its Subsidiaries (whether monthly, quarterly, or annually as Agent may
specify), all in reasonable detail and in a format consistent with the projections delivered by
Parent to Agent prior to the date hereof, together with such supporting information as Agent may
reasonably request or (2) Agent shall have received updated projections (including in each case,
forecasted balance sheets and statements of income and loss, statements of cash flow, and the
projected Borrowing Base and Excess Availability) for Parent and its Subsidiaries (whether monthly,
quarterly, or annually as Agent may specify), all in reasonable detail and in a format consistent
with the projections delivered by Parent to Agent prior to the date hereof, together with such
supporting information as Agent may reasonably request, showing, on a pro forma basis after giving
effect to the acquisition, that the Consolidated Fixed Charge Coverage Ratio is at all times equal
to or greater than 1.00 to 1.00 during such period;



               (v) notwithstanding anything to the contrary set forth above, in the case where as of the date
of such acquisition and after giving effect thereto, there are no Loans or Letters of Credit then
outstanding, regardless of the amount of the consideration for such acquisition, as of the date of
the acquisition and after giving effect to the acquisition, the only condition applicable under
this clause (a) in such case is that no Event of Default shall exist or have occurred and be
continuing;



          (b) promptly upon Agent’s reasonable request, Agent shall have received true, correct and
complete copies of all material agreements, documents and instruments relating to such acquisition,
if then available (it being agreed that if any of the foregoing shall not then be available,
Administrative



32









 






Borrower shall deliver it as soon as available, but the delivery thereof shall not be a
condition to the effectiveness of such Permitted Acquisition);



          (c) the business of the Acquired Business shall be substantially similar to, or ancillary,
complementary or related to, or used or useful in, the businesses that Borrowers are engaged in on
the date hereof, or the assets so acquired shall be used or useful in, or otherwise relate to, any
such business



          (d) in the case of the acquisition of the Equity Interests of another Person, such Person (and
the board of directors or other governing body of such Person) shall not have announced that it
will oppose such acquisition and shall not have commenced any action which alleges that such
acquisition will violate applicable law; and



          (e) Agent shall have received a certificate of a Responsible Officer of Parent certifying on
behalf of Parent to Agent and Lenders that such transaction complies with this definition.


Notwithstanding anything to the contrary contained herein, if Administrative Borrower requests that
any assets acquired pursuant to any acquisition be included in the Borrowing Base, Agent shall
initiate, within thirty (30) days of such request, a field examination with respect to the business
and assets of the Acquired Business in accordance with Agent’s customary procedures and practices
and as otherwise required by the nature and circumstances of the business of the Acquired Business,
the scope and results of which shall be reasonably satisfactory to Co-Collateral Agents, and which
shall have been completed, before such assets may be included. Any Accounts or Inventory of the
Acquired Business shall only be Eligible Accounts or Eligible Inventory to the extent that Agent
has so completed such field examination with respect thereto and the criteria for Eligible Accounts
or Eligible Inventory set forth herein are satisfied with respect thereto in accordance with this
Agreement (or such other or additional criteria as Co-Collateral Agents may, at their option,
establish with respect thereto in accordance with the definitions of Eligible Accounts or Eligible
Inventory, as applicable, and subject to such Reserves as Co-Collateral Agents may establish in
connection with the Acquired Business in accordance with the definition of such term, and, if
requested by Agent in its Permitted Discretion, in the case of Eligible Inventory acquired pursuant
to a Permitted Acquisition to the extent that it has been subject to an appraisal that satisfies
the requirements of Section 7.3 hereof.




     1.138 “Permitted Discretion” shall mean a determination made in good faith in the exercise of
reasonable business judgment from the perspective of an asset based lender.



     1.139 “Permitted Dispositions” shall mean each of the following:



          (a) the sale or other Disposition of obsolete, worn out or surplus property or assets or
property that is no longer used or useful in the conduct of the business of Parent and its
Subsidiaries, whether now owned or hereafter acquired, in the ordinary course of business;



          (b) the sale or other Disposition of (i) any Inventory in the ordinary course of business and
(ii) any other assets or property (other than Revolving Loan Priority Collateral), Cash Equivalents
and investment property (as to Cash Equivalents and investment property, subject to the terms of
applicable Investment Property Control Agreements and similar arrangements as required hereunder)
in the ordinary course of business;



          (c) the sale or discount without recourse of accounts receivable or notes receivable arising
in the ordinary course of business, or the conversion or exchange of accounts receivable into or
for notes receivable, in each case in connection with the compromise or collection thereof;
provided, that, in the



33









 







case of any Foreign Subsidiary of Parent, any such sale or discount may be with recourse if
such sale or discount is consistent with customary practice in such Foreign Subsidiary’s country of
business;



          (d) the sale or other Disposition of accounts receivable and/or related rights or assets of a
Foreign Subsidiary pursuant to any Factoring Transaction of such Foreign Subsidiary;



          (e) a Disposition permitted under Section 10.1(b);



          (f) subject to any applicable limitations set forth in Section 10.1(b), Dispositions of any
assets or property among Borrowers and Guarantors; provided, that, after giving
effect thereto, Agent shall continue to have a security interest in and lien upon such property or
assets to the extent that the same were Collateral with the priority and rights provided for under
the Financing Agreements;



          (g) the abandonment or other Disposition of patents, trademarks or other Intellectual Property
or Foreign Intellectual Property that are, in the reasonable judgment of Parent or any of its
Subsidiaries, no longer economically practicable to maintain or useful in the conduct of the
business of Parent and its Subsidiaries taken as a whole;



          (h) licenses of Intellectual Property and Foreign Intellectual Property in the ordinary course
of business by Parent and its Subsidiaries after the date hereof; provided, that,
no such license shall impair in any material respect the ability of Agent to exercise its rights or
remedies with respect to Revolving Loan Priority Collateral;



          (i) the issuance, sale or other Disposition by Parent of Equity Interests of Parent and its
Subsidiaries after the date hereof; provided, that, after giving effect thereto, no
Change of Control shall occur, and the issuance, sale or other Disposition of Equity Interests of
any Subsidiary to Parent or any other Subsidiary;



          (j) the issuance, sale or other Disposition of Equity Interests of Parent pursuant to an
employee stock option or grant or similar equity plan or 401(k) plans of such Parent for the
benefit of its employees, directors and consultants;



          (k) the Disposition of any property or assets pursuant to a winding up, liquidation or
dissolution of a Borrower, a Guarantor or a Subsidiary permitted under Section 10.1(c) hereof;



          (l) the Disposition of any property or assets in connection with a merger or consolidation
that is a Permitted Acquisition;



          (m) the Disposition of any property or assets (other than Revolving Loan Priority Collateral)
in connection with a Sale and Leaseback Transaction permitted under Section 10.11 hereof;



          (n) any Disposition of property or assets by Parent or any of its Subsidiaries;
provided, that, (i) the Net Cash Proceeds of each such Disposition do not exceed
$1,000,000, (ii) the aggregate Net Cash Proceeds of all Dispositions in any fiscal year of Parent
made pursuant to this clause (n) does not exceed $2,500,000, and (iii) at any time a Dominion Event
exists, subject to the Intercreditor Agreement, the Net Cash Proceeds from any such sale or other
Disposition shall be applied to the Obligations in accordance with Section 2.5;



          (o) any other Disposition of property or assets by Parent or any of its Subsidiaries;
provided, that (i) Agent shall have received prior written notice of such
Disposition, together with an updated Borrowing Base Certificate giving effect to such Disposition
on a pro forma basis; (ii) not less than eighty



34









 







(80%) percent of the consideration to be received by Borrowers and Guarantors shall be paid or
payable in cash and shall be paid contemporaneously with the consummation of the transaction; (iii)
the consideration paid or payable shall be in an amount not less than the fair market value of the
property disposed of; (iv) at any time a Dominion Event exists, subject to the Intercreditor
Agreement, the Net Cash Proceeds from any such sale or other Disposition shall be applied to the
Obligations in accordance with Section 2.5 hereof; and (v) as of the date of any such Disposition,
and after giving effect thereto, no Event of Default shall exist or have occurred and be
continuing;



          (p) any involuntary Disposition due to casualty, condemnation or eminent domain or
foreclosure;



          (q) any Disposition of Equity Interests of a Subsidiary that becomes a Parent Entity (“New
Parent”), including as a result of a merger of Parent with a Subsidiary in which (x) previously
outstanding Capital Stock of Parent is converted into or becomes a right to receive Equity
Interests of a New Parent and (y) Equity Interests of Parent as the continuing or surviving Person
in such merger consist of Equity Interests directly or indirectly held by a New Parent;
provided that after giving effect thereto, no Change of Control shall occur; and;



          (r) any Disposition set forth on Schedule 1.139.



     1.140 “Permitted Guarantees” shall mean, with respect to any Borrower, Guarantor or
Subsidiary:



          (a) Guaranty Obligations in respect of indemnification and contribution agreements expressly
permitted by Section 10.6(c) or 10.6(e) or similar agreements;



          (b) Guaranty Obligations in respect of loans and advances by Parent or any of its Subsidiaries
to officers, directors or employees of Parent or any of its Subsidiaries (i) existing on the
Closing Date and set forth on Schedule 10.4, (ii) in respect of the indemnification or
reimbursement of any officers, directors or employees for liabilities relating to their serving in
such capacity based on the indemnification arrangements permitted under Section 10.6 hereof, (iii)
in the ordinary course of business for reasonably and necessary work-related travel, entertainment
or other ordinary business expenses and for relocation expenses (including home mortgage financing
for relocated employees), and (iv) for other purposes; provided, that, the
aggregate amount of the loans and advances under clauses (iii) and (iv) of this clause (d),
together with the Investments permitted under sub-clauses (iii) and (iv) of clause (h) of the
definition of “Permitted Investments, shall not exceed $1,000,000 at any time outstanding;



          (c) obligations to insurers required in connection with worker’s compensation and other
insurance coverage incurred in the ordinary course of business;



          (d) obligations of the Borrower and its Subsidiaries under any Hedge Agreements;



          (e) guarantees made by the Borrower or any of its Subsidiaries of obligations of the Borrower
or any of its Subsidiaries (other than Indebtedness), which obligations are otherwise permitted
under this Agreement;



          (f) Guaranty Obligations in connection with sales or other Dispositions permitted under
Section 10.1 hereof, including indemnification obligations with respect to leases, and guarantees
of collectibility in respect of accounts receivable or notes receivable for up to face value;




35











 





          (g) accommodation guarantees for the benefit of trade creditors of the Borrower or any of its
Subsidiaries in the ordinary course of business; and



          (h) Guaranty Obligations in respect of Permitted Investments.



     1.141 “Permitted Holders” shall mean (a) any of the CD&R Investors; (b) any of CD&R and its
Affiliates; (c) any investment fund or vehicle managed, sponsored or advised by CD&R or any
Affiliate thereof, and any Affiliate of or successor to any such investment fund or vehicle; (d)
any limited or general partners of, or other investors in, any CD&R Investor or any Affiliate
thereof, or any such investment fund or vehicle; (e) any Person acting in the capacity of an
underwriter in connection with a public or private offering of Equity Interests of Parent or any of
its Subsidiaries or of any Parent Entity; provided, that, any such underwriter
shall cease to be a Permitted Holder on the date that is one hundred eighty (180) days after the
effective date of such public or private offering, and (f) any Parent Entity.



     1.142 “Permitted Investments” shall mean each of the following:



          (a) Investments consisting of accounts receivable owing to any Borrower, Guarantor or
Subsidiary if created or acquired in the ordinary course of business;



          (b) the endorsement of instruments for collection or deposit in the ordinary course of
business;



          (c) Investments in cash or Cash Equivalents; provided, that, (i) at any time
on and after a Dominion Event and for so long as the same is continuing, no Loans are then
outstanding; except that the limitation in this clause (i) shall not apply to (A)
Qualified Cash, (B) funds held in deposit accounts that are not required to be transferred to Agent
after a Cash Dominion Event as provided in Section 6.6 hereof and (C) deposits of cash or other
immediately available funds in operating demand deposit accounts used for disbursements to the
extent required to provide funds for amounts drawn or anticipated to be drawn shortly on such
accounts and which may be held in Cash Equivalents consisting of overnight investments until so
drawn (so long as such funds and Cash Equivalents are not held more than three (3) Business Days
from the date of the initial deposit thereof) and (ii) the terms and conditions of Section 5.2
hereof shall have been satisfied with respect to the deposit account, investment account or other
account in which such cash or Cash Equivalents are held;



          (d) pledges or deposits of cash for leases, utilities and similar matters in the ordinary
course of business;



          (e) obligations and other Investments in respect of Hedge Agreements permitted under Section
10.3(d);



          (f) the existing Investments of Parent and its Subsidiaries as of the date hereof in their
respective Subsidiaries;



          (g) the Investments set forth on Schedule 10.4 hereto;



          (h) loans and advances by Parent or any of its Subsidiaries to officers, directors or
employees of Parent or any of its Subsidiaries (i) existing on the Closing Date and set forth on
Schedule 10.4, (ii) in respect of the indemnification or reimbursement of any officers,
directors or employees for liabilities relating to their serving in such capacity based on the
indemnification arrangements permitted under Section 10.6 hereof, (iii) in the ordinary course of
business for reasonably and necessary work-related travel, entertainment or other ordinary business
expenses and for relocation expenses (including home



36









 







mortgage financing for relocated employees), and (iv) for other purposes; provided,
that, the aggregate amount of the loans and advances under clause (iii) and (iv) of this
subsection (h) shall not exceed $1,000,000 at any time outstanding;



          (i) loans and advances to officers, directors or employees the proceeds of which are used to
make a substantially contemporaneous purchase of Equity Interests in Parent or any Parent Entity;
provided, that, (i) Parent or such Parent Entity applies the Net Cash Proceeds of
such purchases upon the receipt thereof, directly or indirectly, to make a capital contribution to,
or purchase Equity Interests of, Parent and (ii) such loans and advances shall not exceed
$5,000,000 at any time outstanding;



          (j) Equity Interests, Indebtedness or other Investments received by Parent and its
Subsidiaries in respect of Indebtedness or other liabilities of such Person owing to Parent and its
Subsidiaries in connection with the insolvency, bankruptcy, receivership or reorganization of such
Person or a composition or readjustment of the debts of such Person;



          (k) obligations of account debtors to Parent and its Subsidiaries arising from Accounts or
other obligations which are past due, including any evidenced by a promissory note made by such
account debtor payable to Parent or one of its Subsidiaries;



          (l) Investments (i) by a Borrower or Guarantor in a Borrower or Guarantor or (ii) in the
ordinary course of business by a Borrower or Guarantor in an Existing Foreign Subsidiary;
provided, that, to the extent that any such Investment is used directly or
indirectly for Capital Expenditures, the amount of such Investment so used shall be treated as a
Capital Expenditure for purposes of the calculation of the Fixed Charge Coverage Ratio pursuant to
Section 11 hereof (to the extent the expenditure is or should be accounted for by the Parent as a
Capital Expenditure in accordance with GAAP), or (iii) by a Subsidiary that is not a Borrower or
Guarantor in any Borrower, Guarantor or Subsidiary;



          (m) any Investment by Parent or any Subsidiary arising after the date hereof in industrial
development or revenue bonds or similar obligations issued by any State, county or municipal
industrial development authority or similar Governmental Authority secured by Real Property or
Equipment or other fixed or capital assets leased to and operated by Parent or any of its
Subsidiaries, so long as (i) Parent or any such Subsidiary may obtain title to such assets free and
clear of any Lien related to such industrial development or revenue bonds or similar obligations at
any time by optionally canceling such bonds or obligations, paying a nominal fee and terminating
such transaction and (ii) the proceeds received from the issuance of such bonds or similar
obligations are used, directly or indirectly, to acquire, construct, improve or maintain such
property or assets;



          (n) Investments made by Parent and its Subsidiaries as a result of consideration received in
connection with any Disposition made in compliance with Section 10.1(b) hereof;



          (o) Investments consisting of loans and advances by Parent or any of its Subsidiaries to
Parent or any Parent Entity to the same extent that Parent or any such Subsidiary would be
permitted to make a Restricted Payment to Parent or any Parent Entity under Sections 10.5(c), (d),
(e), (f), (i), (j), (k) and (l) and in amounts and for purposes for which Restricted Payments by
Parent or any Subsidiary are permitted under such clauses in Section 10.5; provided,
that, the aggregate outstanding amount of such loans and advances, together with such
Restricted Payments, shall not exceed any limitations with respect to such Restricted Payments
provided for under such clauses in Section 10.5 and such loans and advances shall be used for such
purposes;



          (p) Investments after the date hereof by Parent and its Subsidiaries in or to any Person
(including, without limitation, a joint venture, partnership or other similar arrangement, whether
in



37









 







corporate, partnership or other legal form); provided, that, as to any such
Investment, each of the following conditions is satisfied:



               (i) subject to clauses (iv) and (v) below, in the case of any such Investment that is in an
amount (excluding any portion of such Investment made with any Equity Interests of Parent or any
Parent Entity, or Net Cash Proceeds of the issuance or sale of any such Equity Interests) that is
in an amount less than or equal to $5,000,000, as of the date of the Investment and after giving
effect to the Investment, no Event of Default shall exist or have occurred and be continuing;



               (ii) subject to clauses (iv) and (v) below, in the case of any such Investment that is in an
amount (excluding any portion of such Investment made with any Equity Interests of Parent or any
Parent Entity, or Net Cash Proceeds of the issuance or sale of any such Equity Interests) in excess
of $5,000,000 but less than or equal to $10,000,000:



                    (A) as of the date of the Investment and after giving effect to the Investment, no Event of
Default shall exist or have occurred and be continuing;



                    (B) as of the date of the Investment and after giving effect to the Investment, the daily
average Excess Availability for the period of sixty (60) consecutive days immediately preceding the
date of such Investment shall be not less than the greater of (1) $30,000,000 or (2) twenty-four
(24%) percent of the lease of the Maximum Credit, the Borrowing Base or the Revolving Loan Limit,
on a pro forma basis using the Excess Availability as of the date of the most recent calculation of
the Borrowing Base immediately prior to any such Investment, and as of the date of any such
Investment and after giving effect thereto, using the most recent calculation of the Borrowing Base
prior to the date of any such Investment, on a pro forma basis, Excess Availability shall be not
less than such amount; and



                    (C) Agent shall have received not less than five (5) Business Days’ prior written notice of
the proposed Investment and such information with respect thereto as Agent may reasonably request,
in each case with such information to include (1) parties to such Investment, (2) the proposed date
and amount of the Investment, and (3) the total amount of the Investment;



               (iii) subject to clauses (iv) and (v) below, in the case of any such Investment that is in an
amount (excluding any portion of such Investment made with any Equity Interests of Parent or any
Parent Entity, or Net Cash Proceeds of the issuance or sale of any such Equity Interests) in excess
of $10,000,000:



                    (A) the Payment Conditions shall be satisfied; and



                    (B) Agent shall have received not less than ten (10) Business Days’ prior written notice of
the proposed Investment and such information with respect thereto as Agent may reasonably request,
in each case with such information to include (1) parties to such Investment, (2) the proposed date
and amount of the Investment, and (3) the total amount of the Investment;



               (iv) notwithstanding anything to the contrary set forth above, in the case of any such
Investment where all of the Investment is made with any Equity Interests of Parent or any Parent
Entity and/or Net Cash Proceeds of the issuance or sale of any such Equity Interests, regardless of
the amount of such Investment, the only conditions applicable in this clause (p) in such case are
that:



                    (A) as of the date of the Investment and after giving effect to the Investment, no Event of
Default shall exist or have occurred and be continuing;



38









 





                    (B) either (1) Excess Availability shall be not less than the greater of $20,000,000 or
eighteen (18%) percent of the least of the Maximum Credit, the Borrowing Base or the Revolving
Loan Limit, on a pro forma basis giving effect to such Investment, for each of the twelve (12)
consecutive months after the date of such Investment based on updated projections received by Agent
(including in each case, forecasted balance sheets and statements of income and loss, statements of
cash flow, and the projected Borrowing Base and Excess Availability) for Parent and its
Subsidiaries (whether monthly, quarterly, or annually as Agent may specify), all in reasonable
detail and in a format consistent with the projections delivered by Parent to Agent prior to the
date hereof, together with such supporting information as Agent may reasonably request or (2) Agent
shall have received updated projections (including in each case, forecasted balance sheets and
statements of income and loss, statements of cash flow, and the projected Borrowing Base and Excess
Availability) for Parent and its Subsidiaries (whether monthly, quarterly, or annually as Agent may
specify), all in reasonable detail and in a format consistent with the projections delivered by
Parent to Agent prior to the date hereof, together with such supporting information as Agent may
reasonably request, showing, on a pro forma basis after giving effect to the Investment or payment,
that the Consolidated Fixed Charge Coverage Ratio is at all times equal to or greater than 1.00 to
1.00 during such period; and



                    (C) Agent shall have received not less than ten (10) Business Days’ prior written notice of
the proposed Investment and such information with respect thereto as Agent may reasonably request,
in each case with such information to include (1) parties to such Investment, (2) the proposed date
and amount of the Investment, and (3) the total amount of the Investment;



               (v) notwithstanding anything to the contrary set forth above, in the case where as of the date
of such Investment and after giving effect thereto, there are no Loans or Letters of Credit then
outstanding, regardless of the amount of such Investment, the only conditions applicable in this
clause (p) in such case are that:



                    (A) as of the date of the Investment and after giving effect to the Investment, no Event of
Default shall exist or have occurred and be continuing; and



                    (B) Agent shall have received not less than ten (10) Business Days’ prior written notice of
the proposed Investment and such information with respect thereto as Agent may reasonably request,
in each case with such information to include (1) parties to such Investment, (2) the proposed date
and amount of the Investment, and (3) the total amount of the Investment;



               (vi) Agent shall have received a certificate of a Responsible Officer of Parent certifying on
behalf of Parent to Agent and Lenders that such transaction complies with this definition,
including identifying the specific subsection of this clause (p) is applicable thereto; and



               (vii) promptly upon Agent’s reasonable request, Agent shall have received true, correct and
complete copies of all material agreements, documents and instruments relating to such Investment
(it being agreed that if any of the foregoing shall not then be available, Administrative Borrower
shall deliver it as soon as available, but the delivery thereof shall not be a condition to the
effectiveness of such Permitted Investment).



     1.143 “Permitted Liens” shall mean, with respect to any Borrower, Guarantor or Subsidiary:



          (a) the Liens of Agent for itself and the benefit of the Secured Parties and the rights of
setoff of Secured Parties provided for herein or under applicable law;



39









 





          (b) Liens securing the payment of Taxes, assessments or other governmental charges or levies
either not yet overdue or the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower, Guarantor or Subsidiary, as the case
may be, which proceedings (or orders entered in connection with such proceedings) have the effect
of preventing the forfeiture or sale of the property subject to any such Lien (to the extent such
property constitutes Revolving Loan Priority Collateral or, if not constituting Revolving Loan
Priority Collateral, other property as to which the exercise of rights or remedies by the holder of
such Lien thereon could reasonably be expected to materially impair the exercise of rights or
remedies of Agent or Lenders with respect to Revolving Loan Priority Collateral) and with respect
to which adequate reserves have been set aside on the books of Parent or any of its Subsidiaries in
accordance with GAAP;



          (c) statutory Liens (other than Liens arising under ERISA or securing the payment of taxes)
arising in the ordinary course of such Borrower’s, Guarantor’s or Subsidiary’s business that do not
secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s,
landlords’, landlords’ mortgagees’, workmen’s suppliers’, repairmen’s and mechanics’ liens, to the
extent such Liens relate to obligations that are not overdue or are fully insured and being
defended at the sole cost and expense and at the sole risk of the insurer or are being contested in
good faith by appropriate proceedings diligently pursued and available to such Borrower, Guarantor
or such Subsidiary, (i) which proceedings (or orders entered in connection with such proceeding)
have the effect of preventing the forfeiture or sale of the property subject to any such Lien (to
the extent such property constitutes Revolving Loan Priority Collateral or, if not constituting
Revolving Loan Priority Collateral, other property as to which the exercise of rights or remedies
by the holder of such Lien thereon could reasonably be expected to materially impair the exercise
of the rights or remedies of Agent or Lenders with respect to Revolving Loan Priority Collateral)
and (ii) with respect to which adequate reserves have been set aside on its books in accordance
with GAAP;



          (d) Liens of landlords, or of mortgagees of landlords, arising pursuant to the terms of real
property leases; provided, that, the rental payments and any other obligations
secured thereby are not yet due and payable;



          (e) zoning restrictions, easements, rights-of-way, restrictions on the use of property, other
similar encumbrances as to Real Property incurred in the ordinary course of business and minor
irregularities of title as to Real Property which in each case do not interfere in any material
respect with the use of such Real Property or ordinary conduct of the business of such Borrower,
Guarantor or Subsidiary as presently conducted thereon;



          (f) Liens securing Indebtedness of Parent and its Subsidiaries permitted by Section 10.3(b)(i)
incurred to finance or refinance the acquisition, leasing, construction or improvement of Real
Property, Equipment or other fixed or capital assets subject to such Liens; provided,
that, such Liens do not at any time encumber any property other than the property financed
or refinanced by such Indebtedness;



          (g) Liens on property or assets (other than any Revolving Loan Priority Collateral) or on
cash, Cash Equivalents or investment property arising in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of social security
benefits or other insurance related obligations (including pledges or deposits of cash or Cash
Equivalents securing liability to insurance carriers under insurance or self-insurance
arrangements);



          (h) Liens on assets (other than any Revolving Loan Priority Collateral) or on cash or Cash
Equivalents or investment property to secure the performance of tenders, bids, leases, trade
contracts (other than for the repayment of borrowed money Indebtedness), statutory obligations,
obligations for utilities, leases, statutory obligations, surety and appeal bonds, performance
bonds, material and supply



40









 







bonds, tax bonds, judgment and like bonds, replevin bonds, and other similar bonds and other
obligations in each case in the ordinary course of business of such Borrower, Guarantor or
Subsidiary;



          (i) Liens arising from (i) operating leases and (ii) equipment or other materials which are
not owned by any Borrower, Guarantor or Subsidiary located on the premises of such Borrower,
Guarantor or Subsidiary (but not in connection with, or as part of, the financing thereof) from
time to time in the ordinary course of business of such Borrower, Guarantor or Subsidiary (it being
understood that any precautionary UCC financing statement filings in respect of any such lease or
equipment or other materials shall not be deemed a Lien);



          (j) statutory or common law Liens or rights of setoff of depository banks or securities
intermediaries with respect to deposit accounts, securities accounts or other funds of any
Borrower, Guarantor or Subsidiary at such banks or securities intermediaries to secure fees and
charges in connection with returned items or the standard fees and charges of such banks or
securities intermediaries in connection with the deposit accounts, securities accounts or other
funds maintained by such Borrower, Guarantor or Subsidiary at such banks or intermediaries (but not
any Indebtedness owing by such Borrower, Guarantor or Subsidiary to such banks or intermediaries)
and Liens with respect to Indebtedness permitted by Section 10.3(n);



          (k) Liens arising in connection with any judgment, decree or order of any court or other
Governmental Authority that do not constitute an Event of Default under Section 12.1(e);
provided, that, (i) adequate reserves or other appropriate provision, if any, as
are required by GAAP have been made therefor, (ii) a stay of enforcement of any such Liens is in
effect (in the case of any Lien on property constituting Revolving Loan Priority Collateral or, if
not constituting Revolving Loan Priority Collateral, other property as to which the exercise of
rights or remedies by the holder of such Lien could reasonably be expected to materially impair the
exercise of the rights or remedies of Agent or Lenders with respect to Revolving Loan Priority
Collateral) and (iii) Co-Collateral Agents may establish a Reserve with respect thereto (in
accordance with and subject to the definition of such term);



          (l) security interests, mortgages and other Liens on (i) Equipment, Real Property and other
fixed or capital assets arising after the date hereof to secure Indebtedness (including pursuant to
Capital Leases) permitted under Section 10.3(b) or (ii) property and assets described in Sections
10.3(s) and 10.3(t);



          (m) leases or subleases of Real Property granted by any Borrower, Guarantor or Subsidiary in
the ordinary course of business of such Borrower, Guarantor or Subsidiary to any Person so long as
any such leases or subleases do not interfere in any material respect with the ordinary conduct of
the business of such Borrower, Guarantor or Subsidiary;



          (n) licenses of third party intellectual property to any Borrower, Guarantor or Subsidiary and
licenses to Intellectual Property or Foreign Intellectual Property permitted under clause (h) of
the definition of Permitted Dispositions;



          (o) Liens on goods in favor of customs and revenue authorities arising as a matter of law to
secure custom duties in connection with the importation of such goods;



          (p) security interests and other Liens on the Collateral (i) securing Indebtedness permitted
under Section 10.3(e) hereof (and Refinancing Indebtedness with respect thereto permitted under
Section 10.3(w) hereof), (ii) securing any Bank Products to the extent secured by the same security
interests and other Liens that secure Indebtedness permitted under Section 10.3(e) or such
Refinancing Indebtedness or



41









 







(iii) securing any notes or other debt securities incurred pursuant to Section 10.3(j),
subject to the terms of the Intercreditor Agreement or an intercreditor agreement in form and
substance satisfactory to Agent;



          (q) Liens to secure Indebtedness of any Borrower, Guarantor or Subsidiary permitted under
Section 10.3(g) hereof to finance insurance premiums on the insurance policies maintained by any
Borrower, Guarantor or Subsidiary; provided, that, such Liens shall not in any
manner affect the ability of Agent to obtain or receive payment of proceeds of insurance with
respect to any of the Collateral;



          (r) Liens on property or assets other than the Collateral to secure Indebtedness of Borrowers
and Guarantors permitted under Section 10.3(j);



          (s) security interests and other Liens in property or assets of a Person existing at the time
such Person is acquired pursuant to a Permitted Acquisition after the date hereof in respect of
Indebtedness permitted under Section 10.3(i) hereof (and Liens in respect of Refinancing
Indebtedness with respect thereto permitted under Section 10.3(w) hereof); provided,
that, each of the following conditions is satisfied: (i) such security interests and other
Liens were not granted and did not arise in connection with, or in anticipation or contemplation
of, such Permitted Acquisition, and (ii) the property or assets subject to such security interests
and other Liens do not include any assets or properties of any Person other than assets or
properties of the Person so acquired;



          (t) Liens on assets or property at the time of acquisition thereof by Parent or any of its
Subsidiaries which do not materially interfere with the use, occupancy, operation and maintenance
of structures existing on the property subject thereto or extend to or cover any assets or
properties of Parent or such Subsidiary other than the assets or property being acquired;
provided, that, to the extent that any such assets so acquired consist of Accounts
and Inventory, such Accounts and Inventory shall not in any case constitute Eligible Accounts or
Eligible Inventory unless and until (i) the Agent shall have established a Reserve with respect to
any such Lien thereon or notified the Administrative Borrower that no such Reserve will be
established and (ii) the provisions of the last two sentences of the definition of “Permitted
Acquisitions” shall have been complied with;



          (u) any encumbrance or restriction (including put and call agreements) with respect to the
Equity Interests of any joint venture or similar arrangement pursuant to the joint venture or
similar agreement with respect to such joint venture or similar arrangement; provided,
that, no such encumbrance or restriction affects in any way the ability of Parent or any of
its Subsidiaries to comply with Section 9.11(a) or (b);



          (v) Liens on property or assets subject to Sale and Leaseback Transactions permitted under
Section 10.11;



          (w) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by Parent or its Subsidiaries in the ordinary
course of business;



          (x) Liens on property or assets of any Foreign Subsidiary (other than a Borrower or Guarantor)
to secure Indebtedness of such Subsidiary permitted under Section 10.3(r) hereof;



          (y) Liens securing any Guaranty Obligation of any Borrower, Guarantor or Subsidiary to the
extent the Indebtedness to which such Guaranty Obligation relates would be permitted hereunder to
be so secured;



          (z) Liens incurred in the ordinary course of business of Parent and its Subsidiaries securing
liabilities or obligations that do not exceed $500,000 in the aggregate; provided,
that, to the extent any



42









 







such Lien encumbers Accounts or Inventory, such Lien shall be reported to Agent by
Administrative Borrower promptly upon discovery by a Responsible Officer of any Borrower and an
amount of the Accounts and Inventory so encumbered equal to the amount of the liabilities or
obligations so secured by such Lien shall thereafter not constitute Eligible Accounts or Eligible
Inventory (such amount, the “Deemed Reserve”) unless and until the Agent shall have established a
Reserve with respect to such Lien or Co-Collateral Agents shall have determined and instructed
Agent to notify the Administrative Borrower that no such Reserve will be established;



          (aa) the Liens set forth on Schedule 10.2 hereto which are not otherwise permitted
under the other clauses of this definition and any Liens to secure Refinancing Indebtedness of the
Indebtedness secured by such Liens to the extent permitted under Section 10.3(w) hereof;



          (bb) Liens in cash collateral to secure the obligations of Borrowers and Guarantors to the
extent permitted under Section 10.3(u) hereof;



          (cc) Liens with respect to Indebtedness permitted under Sections 10.3(o) and (p), in each case
to the extent any bonds, debentures, notes or similar instruments permitted thereby have been
issued in respect of secured Indebtedness; and



          (dd) any other Lien on property or assets of Parent or any of its Subsidiaries (other than
Working Capital Priority Collateral (as defined in the Intercreditor Agreement)) existing on the
Closing Date.



     1.144 “Person” or “person” shall mean any individual, sole proprietorship, partnership,
corporation (including any corporation which elects subchapter S status under the Code), limited
liability company, limited liability partnership, business trust, unincorporated association, joint
stock corporation, trust, joint venture or other entity or any government or any agency or
instrumentality or political subdivision thereof.



     1.145 “Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) which
any Borrower or Guarantor sponsors, maintains, or to which it makes, is making, or is obligated to
make contributions, or in the case of a Multiemployer Plan has made contributions at any time
during the immediately preceding six (6) plan years or with respect to which any Borrower or
Guarantor may incur liability.



     1.146 “Pledge Agreement” shall mean the Pledge Agreement delivered to Agent as of the date
hereof substantially in the form of Exhibit E hereto, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.



     1.147 “Pro Rata Share” shall mean, as to any Lender, the fraction (expressed as a percentage)
the numerator of which is such Lender’s Commitment and the denominator of which is the aggregate
amount of all of the Commitments of the Lenders, as adjusted from time to time in accordance with
the provisions hereof; provided, that, if the Commitments have been terminated, the
numerator shall be the unpaid amount of such Lender’s Loans and its interest in the Swing Line
Loans, Special Agent Advances and Letter of Credit Obligations and the denominator shall be the
aggregate amount of all unpaid Loans, Swing Line Loans, Special Agent Advances and Letter of Credit
Obligations.



     1.148 “Provision for Taxes” shall mean an amount equal to all taxes imposed on or measured by
net income, whether Federal, State, Provincial, county or local, and whether foreign or domestic,
that are paid or payable by any Person in respect of any period in accordance with GAAP.



43









 





     1.149 “Qualified Cash” shall mean cash or subject to the terms below, Cash Equivalents owned
by a Borrower, which are (a) free and clear of any pledge, security interest, lien, claim or other
encumbrance (other than (i) in favor of Agent, (ii) in favor of the depository bank or securities
intermediary where the deposit account or investment account is maintained to the extent permitted
under clause (j) of the definition of the term “Permitted Liens”, but only to secure its customary
fees and charges and (iii) any other liens permitted under this Agreement that are subject to the
Intercreditor Agreement or an intercreditor agreement in form and substance satisfactory to Agent
between the holder of such security interest or Lien and Agent), (b) subject to the first priority
perfected security interest of Agent (subject to the liens of the depository bank or securities
intermediary where the deposit account or investment account is maintained for its customary fees
and charges), (c) in a deposit account or an investment account at a Lender or an Affiliate of a
Lender and which account is subject to a Deposit Account Control Agreement or an Investment
Property Control Agreement, and which cash or Cash Equivalents, to the extent included in the
Borrowing Base, are not permitted to be withdrawn from such account without the prior written
consent of Agent and for which Agent shall have received evidence, in form and substance reasonably
satisfactory to Agent, of the amount of such cash or Cash Equivalents held in such deposit account
or investment account as of the applicable date of the calculation of the Borrowing Base;
provided, that, to the extent such amounts represent payments in respect of
Accounts or other Collateral included in the Borrowing Base as of such date, such amounts shall not
constitute Qualified Cash (and Administrative Borrower shall provide such evidence thereof as Agent
may reasonably request). For purposes of this definition, “Qualified Cash” shall only include Cash
Equivalents maturing within ninety (90) days from the date of the acquisition thereof and in the
case of obligations or indebtedness described in clauses (b) and (c) of the definition of the term
Cash Equivalents, obligations or indebtedness having a rating of at least A-1 from S&P or at least
P-1 from Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, then
an equivalent rating from another nationally recognized rating service).



     1.150 “Quarterly Average Excess Availability” shall mean, for any three (3) month period, the
daily average of the aggregate amount of the Excess Availability for such three (3) month period.



     1.151 “Real Property” shall mean, as to any Person, all now owned and hereafter acquired real
property of such Person, including leasehold interests, together with all buildings, structures,
and other improvements located thereon and all licenses, easements and appurtenances relating
thereto, wherever located, including, in the case of any Borrower or Guarantor, the Real Property
and related assets of such Borrower or Guarantor more particularly described in the Mortgages.



     1.152 “Receivables” shall mean all of the following now owned or hereafter arising or acquired
property of each Borrower and Guarantor: (a) all Accounts; (b) all interest, fees, late charges,
penalties, collection fees and other amounts due or to become due or otherwise payable in
connection with any Account; (c) letters of credit, indemnities, guarantees, security or other
deposits and proceeds thereof issued payable to any Borrower or Guarantor or otherwise in favor of
or delivered to any Borrower or Guarantor in connection with any Account; or (d) all other
accounts, contract rights, chattel paper, instruments, notes, general intangibles and other forms
of obligations owing to any Borrower or Guarantor, whether from the sale and lease of goods or
other property, licensing of any property (including Intellectual Property or other general
intangibles), rendition of services or otherwise.



     1.153 “Records” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and
Guarantor’s present and future books and records of every kind or nature relating to the
Collateral, including without limitation, all purchase and sale agreements, invoices, ledger cards,
bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files
and other data relating to the Collateral or any account debtor, together with the tapes, disks,
diskettes and other data and software



44









 







storage media (including any rights of any Borrower or Guarantor with respect to the foregoing
maintained with or by any other person).



     1.154 “Refinancing Indebtedness” shall have the meaning set forth in Section 10.3(w) hereof.



     1.155 “Register” shall have the meaning set forth in Section 6.4 hereof.



     1.156 “Registration Rights Agreement” shall mean the Registration Rights Agreement, dated as
of the date hereof, by and between Parent and the CD&R Investors, as the same now exists or may
hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced.



     1.157 “Related Taxes” shall mean:



          (a) any Taxes, charges or assessments, including but not limited to sales, use, transfer,
rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net
worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges or assessments
(other than Federal, State or local taxes measured by income and Federal, State or local
withholding imposed by any government or other taxing authority on payments made by Parent or any
Parent Entity, other than payments to Parent or any Parent Entity), required to be paid by Parent
or any Parent Entity by virtue of its being incorporated or having Equity Interests outstanding
(but not by virtue of owning stock or other Equity Interests of any corporation or other entity
other than any of its Subsidiaries, Parent or any Parent Entity), or being a holding company parent
of Parent, any of its Subsidiaries, or any Parent Entity or receiving dividends from or other
distributions in respect of the Equity Interests of Parent, any of its Subsidiaries, or any Parent
Entity or having guaranteed any obligations of Parent or any Subsidiary thereof, or having made any
payment in respect of any of the items for which Parent or any of its Subsidiaries is permitted to
make payments to Parent or any Parent Entity pursuant to Section 10.5, or acquiring, developing,
maintaining, owning, prosecuting, protecting or defending its intellectual property and associated
rights (including but not limited to receiving or paying royalties for the use thereof) relating to
the business or businesses of Parent or any Subsidiary thereof, or



          (b) any Taxes attributable to any taxable period (or portion thereof) ending on or prior to
the Closing Date, or attributable to the consummation of, or any Parent Entity’s receipt of (or
entitlement to) any payment in connection with, any of the Transactions, including any payment
received after the Closing Date pursuant to any agreement relating to the Transactions, or



          (c) any other Federal, State, foreign or local taxes measured by income for which any Parent
Entity is liable up to an amount not to exceed, with respect to Federal Taxes, the aggregate amount
of any such Taxes that Parent and its Subsidiaries would have been required to pay on a separate
company basis, or on a consolidated basis as if Parent had filed a consolidated return on behalf of
an affiliated group (as defined in Section 1504 of the Code or an analogous provision of state,
local or foreign law) of which Parent were the common parent, or with respect to state and local
taxes, the aggregate amount of any such taxes that Parent and its Subsidiaries would have been
required to pay on a separate company basis, or on a combined basis as if Parent had filed a
combined return on behalf of an affiliated group consisting only of Parent and its Subsidiaries.



     1.158 “Register” shall have the meaning set forth in Section 6.4 hereof.



     1.159 “Required Lenders” shall mean, at any time, subject to Section 6.13(g), those Lenders
whose Pro Rata Shares aggregate more than fifty (50%) percent of the aggregate of the Commitments
of all Lenders, or if the Commitments shall have been terminated, Lenders to whom more than fifty
(50%) percent of the then outstanding Loans and Letter of Credit Obligations are owing;
provided, that, at any time that there are two (2) or more Lenders, “Required
Lenders” must include at least two (2) Lenders.



45









 





     1.160 “Requirement of Law” shall mean, as to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person, and any law, statute,
ordinance, code, decree, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such Person or any of its
material property or to which such Person or any of its material property is subject, including
laws, ordinances and regulations pertaining to zoning, occupancy and subdivision of real
properties; provided, that, the foregoing shall not apply to any non-binding
recommendation of any Governmental Authority. Without limiting the foregoing, it is understood
that, in the case of any Borrower or Guarantor, Requirements of Law shall include the following
(collectively, the “Anti-Terrorism Laws”): the “Trading With the Enemy Act” (50 U.S.C. §1 et seq.,
as amended) or any of the foreign assets control regulations of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto (including, but not limited to Executive Order 13224 of September 21, 2001
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)) and the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56), in each case to the extent applicable to or binding upon such Borrower or Guarantor.



     1.161 “Reserves” shall mean as of any date of determination, such amounts as Co-Collateral
Agents may from time to time establish and revise in their Permitted Discretion reducing the amount
of Loans and Letters of Credit which would otherwise be available to any Borrower under the lending
formula(s) provided for herein: (a) to reflect events, conditions, contingencies or risks which,
as determined by Co-Collateral Agents in their Permitted Discretion, adversely affect, or would
have a reasonable likelihood of adversely affecting, either (i) the Revolving Loan Priority
Collateral, its value or the amount that might be received by Agent from the sale or other
disposition or realization upon such Collateral or (ii) the security interests and other rights of
Agent or any Lender in the Revolving Loan Priority Collateral (including the enforceability,
perfection and priority thereof), (b) to reflect other factors arising after the Closing Date that
change in any material respect the credit risk of lending to Borrowers on the security of the
Revolving Loan Priority Collateral, or (c) to reflect Agent’s good faith belief that any collateral
report or financial information furnished by or on behalf of any Borrower or Guarantor to Agent is
or may have been incomplete, inaccurate or misleading in any material respect. Without limiting
the generality of the foregoing, Reserves may be established to reflect any of the following: (i)
reserves for cost variances not otherwise reflected in value of Inventory, (ii) dilution with
respect to Accounts (based on the ratio of the aggregate amount of non-cash reductions in Accounts
for any period to the aggregate dollar amount of the sales of such Borrower for such period) as
calculated by Agent for any period is or is reasonably anticipated to be greater than five (5%)
percent, (iii) the sales, excise or similar taxes included in the amount of any Accounts reported
to Agent and amounts due or to become due in respect of sales, use and/or withholding taxes that
are subject to collection in trust or similar arrangements or otherwise give rise to a Lien that
may have priority over the Lien of Agent, (iv) any rental payments, service charges or other
amounts due or to become due to owners or lessors of real property to the extent Inventory or
Records are located in or on such property or in the possession or control of such parties or such
Records are needed to monitor or otherwise deal with the Revolving Loan Priority Collateral (other
than for locations where Agent has received a Collateral Access Agreement executed and delivered by
the owner and lessor of such real property that Agent has acknowledged in writing is in form and
substance satisfactory to Agent in its Permitted Discretion); provided, that, the
Reserves established pursuant to this clause (v) as to leased locations shall not exceed at any
time the aggregate of amounts payable for the next five (5) months to the lessors of such locations
(or in the event that any appraisals with respect to the Inventory after the date hereof conducted
in accordance with Section 7.3 reflect a shorter period of time for realization on the Inventory in
a manner that maximizes the recovery from it, then such Reserves will be adjusted to reflect such
shorter period), (v) to reflect average payables to outside processors based on the immediately
preceding three (3) consecutive month period, (vi) an increase in the number of days of the
turnover of Inventory (unless as a result of seasonal



46









 







variation) or a change in the mix of the Inventory that results in an overall decrease in the
value thereof or a deterioration in its nature or quality (but only to the extent not addressed by
the lending formulas in a manner satisfactory to Co-Collateral Agents in their Permitted
Discretion), (vii) reserves for in-transit inventory, including freight, taxes, duty and other
amounts which Agent estimates must be paid in connection with such Inventory upon arrival and for
delivery to one of such Borrower’s locations for Eligible Inventory within the United States of
America, (viii) obligations, liabilities or indebtedness (contingent or otherwise) of Borrowers or
Guarantors to any Bank Product Provider arising under or in connection with any Bank Products of
any Borrower or Guarantor with a Bank Product Provider or as such Bank Product Provider may
otherwise require and Agent may agree in connection therewith to the extent that such obligation,
liabilities or indebtedness constitute Obligations as such term is defined herein or otherwise
receive the benefit of the security interest of Agent in any Collateral. To the extent that an
event, condition or matter as to any Eligible Accounts or Eligible Inventory is addressed pursuant
to the treatment thereof within the applicable definition of such terms, Co-Collateral Agents shall
not also establish a Reserve to address the same event, condition or matter. The amount of any
Reserve established by Co-Collateral Agents shall have a reasonable relationship to the event,
condition or other matter which is the basis for such Reserve. In the event that the event,
condition or other matter giving rise to the establishment of any Reserve shall cease to exist
(unless there is a reasonable prospect that such event, condition or other matter will occur again
within a reasonable period of time thereafter), the Reserve established pursuant to such event,
condition or other matter, shall be discontinued. To the extent that an event, condition or matter
as to any Eligible Accounts or Eligible Inventory is addressed pursuant to the treatment thereof
within the applicable definition of such terms, or in the computation of net book value of Eligible
Inventory or the Net Recovery Percentage of Eligible Inventory in a manner satisfactory to Agent in
the exercise of its Permitted Discretion, Co-Collateral Agents shall not also establish a Reserve
to address the same event, condition or matter. Agent will provide three (3) Business Days’ prior
notice to Administrative Borrower of any new categories of Reserves that may be established, or any
changes in the methodology of determination (but not amount) of any Reserves, or any changes by
Co-Collateral Agents of the amount of a Reserve specified in any Borrowing Base Certificate
received by Agent, after the date of this Agreement, and Agent will be available from time to time
during business hours to consult with Administrative Borrower in connection with the basis for such
new categories of or changes to Reserves; provided, that, during such three (3)
Business Day period, the Borrowing Base shall, solely for the purposes of any new Loans or Letters
of Credit requested by any Borrower during such three (3) Business Day Period, be reduced by the
amount of any such proposed changes to, or new categories of, Reserves set forth in such notice.
Borrowers may take such action as may be required so that the event, condition or matter that is
the basis for such Reserve or increase no longer exists, in a manner and to the extent satisfactory
to the Co- Collateral Agents in the exercise of their Permitted Discretion. In no event shall such
notice or opportunity limit the right of Co-Collateral Agents to establish such Reserve, unless
Co-Collateral Agents shall have determined in their Permitted Discretion that the event, condition or other matter that is the basis for such new category of Reserve no longer exists or has
otherwise been adequately addressed by the applicable Borrower.



     1.162 “Responsible Officer” shall mean, as to any Person, any of the following officers of
such Person: (a) the chief executive officer or the president of such Person and, with respect to
financial matters, the chief financial officer, the treasurer or the controller of such Person, (b)
any vice president of such Person or, with respect to financial matters, any assistant treasurer or
assistant controller of such Person, who has been designated in writing to Agent as a Responsible
Officer by such chief executive officer or president of such Person or, with respect to financial
matters, such chief financial officer of such Person, and (c) with respect to ERISA matters, the
senior vice president-human resources (or substantial equivalent) of such Person.



     1.163 “Restricted Payment” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests of Parent or any of its
Subsidiaries, or



47









 







any payment (whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests or on account of any return of capital to Parent or such
Subsidiary’s stockholders, partners or members (or the equivalent Person thereof), or payment made
to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire any Equity Interests of Parent or any of its Subsidiaries, or
any setting apart of funds or property for any of the foregoing; provided, that,
for the avoidance of doubt, Restricted Payments shall not include any distributions of Equity
Interests in exchange for or upon conversion of debt securities.



     1.164 “Revolving Loan Limit” shall mean the amount from time to time specified in Section
7.2(d)(ii) of the Term Loan Agreement.



     1.165 “Revolving Loan Priority Collateral” shall mean the Collateral described on
Schedule 1.165 hereto.



     1.166 “Revolving Loans” shall mean loans now or hereafter made by or on behalf of any Lender
or by Agent for the account of any Lender on a revolving basis pursuant to the Credit Facility
(involving advances, repayments and readvances) as set forth in Section 2 hereof.



     1.167 “Sale and Leaseback Transaction” shall mean, with respect to a Borrower or Guarantor,
or any Subsidiary, any arrangement with any Person providing for the leasing by such Borrower or
Guarantor or such Subsidiary of real or personal property that has been or is to be sold or
transferred by such Borrower, Guarantor or any such Subsidiary to such Person and thereafter such
real or personal property is leased by such Person back to such Borrower, Guarantor or Subsidiary.



     1.168 “Sanctioned Entity” shall mean (a) an agency of the government of, (b) an organization
directly or indirectly controlled by, or (c) a person resident in, a country that is subject to a
sanctions program identified on the list maintained and published by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time
as such program may be applicable to such agency, organization or person.



     1.169 “Sanctioned Person” shall mean a person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time
to time.



     1.170 “S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and its successors and assigns.



     1.171 “Secured Parties” shall mean, collectively, (a) Agent, (b) Lenders, (c) Co-Collateral
Agents, (d) the Issuing Bank and (e) any Bank Product Provider; provided, that, (i)
as to any Bank Product Provider, only to the extent of the Obligations owing to such Bank Product
Provider and (ii) such parties are sometimes referred to herein individually as a “Secured Party”.



     1.172 “Security Agreement” shall mean the collective reference to the Mortgages, the Pledge
Agreement and all other similar security documents delivered to the Agent granting a Lien on any
asset or assets of any Person to secure the obligations and liabilities of any Borrower or
Guarantor hereunder and/or under any of the other Financing Agreements or to secure any guarantee
of any such obligations and liabilities, in each case as amended, supplemented, waived or otherwise
modified from time to time.



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     1.173 “Series B Preferred Stock CoD” shall mean the Certificate of Designations, Preferences
and Rights of Series B Cumulative Convertible Participating Preferred Stock of NCI Building
Systems, dated as of the date hereof.



     1.174 “Solvent” shall mean, at any time with respect to any Person, that at such time such
Person (a) is able to pay its debts as they mature and has sufficient capital (and not unreasonably
small capital) to carry on its business, and (b) the assets and properties of such Person at a fair
valuation (and including as assets for this purpose at a fair valuation all rights of subrogation,
contribution or indemnification arising pursuant to any guarantees given by such Person) are
greater than the Indebtedness of such Person, and including subordinated and contingent liabilities
computed at the amount which, such Person has a reasonable basis to believe, represents an amount
which can reasonably be expected to become an actual or matured liability (and including as to
contingent liabilities arising pursuant to any guarantee the face amount of such liability as
reduced to reflect the probability of it becoming a matured liability).



     1.175 “Special Agent Advances” shall have the meaning set forth in Section 14.11 hereof.



     1.176 “Specified Assets” shall mean the following property and assets of each Borrower or
Guarantor:



          (a) Intellectual Property constituting patents, patent licenses, trademarks and trademark
licenses to the extent that Liens thereon cannot be perfected by the filing of financing statements
under the UCC or by the filing and acceptance thereof in the United States Patent and Trademark
Office;



          (b) Intellectual Property constituting copyrights and copyright licenses and accounts or
receivables arising therefrom to the extent that the UCC as in effect from time to time in the
relevant jurisdiction is not applicable to the creation or perfection of Liens thereon or Liens
thereon cannot be perfected by the filing and acceptance of this Agreement or short form thereof in
the United States Copyright Office;



          (c) Collateral for which the perfection of Liens thereon require filings in or other actions
under the laws of jurisdictions outside of the United States of America, any state, territory or
political division thereof or the District of Columbia;



          (d) contracts, Accounts or receivables subject to the Assignment of Claims Act;



          (e) goods received by any Person from a Borrower or Guarantor for “sale or return” within the
meaning of Section 2-326 of the Uniform Commercial Code of the applicable jurisdiction, to the
extent of claims of creditors of such Person;



          (f) money, cash and Cash Equivalents (except to the extent subject to a Deposit Account
Control Agreement or Investment Property Control Agreement, as applicable) and Fixtures;



          (g) proceeds of Accounts or Inventory that do not themselves constitute Collateral or that
have not yet been transferred to or deposited in a Cash Management Account or Concentration
Account; and



          (h) uncertificated securities (to the extent a Lien therein is not be perfected by the filing
of a financing statement).



     1.177 “Sponsor” shall mean CD&R.



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     1.178 “Sponsor Affiliated Lender” shall mean financial institutions (including commercial
finance companies), investment funds or managed accounts with respect to which Sponsor or an
Affiliate of such Sponsor is an Affiliate or an advisor or manager in the ordinary course of
business; provided, that, such Person executes a waiver in form and substance
reasonably satisfactory to Agent that it shall have no right whatsoever so long as such Person is
an Affiliate of any Parent or any of its Subsidiaries or Sponsor: (a) except as provided below, to
consent to any amendment, modification, waiver, consent or other such action with respect to any of
the terms of this Agreement or any of the other Financing Agreements, (b) otherwise to vote on any
matter related to this Agreement or any other Financing Agreement, (c) to require Agent or any
Lender to undertake any action (or refrain from taking any action) with respect to this Agreement
or any other Financing Agreement, (d) to attend any meeting with Agent or any Lender or receive any
information from Agent or any Lender or (e) make or bring any claim, in its capacity as Lender,
against Agent with respect to the duties and obligations of Agent hereunder; except,
that, no amendment, modification or waiver to this Agreement or any of the other Financing
Agreements (i) relating to any of the matters described in clauses (i), (ii), (iv), (v), (vi) or
(vii) of Section 13.3(a), or (ii) that would result in a disproportionate impact or effect on any
Sponsor Affiliated Lender in relation to one or more Lenders that are not Sponsor Affiliated
Lenders, shall be effected without the consent of such Sponsor Affiliated Lender.



     1.179 “Stockholders Agreement” shall mean the Stockholders Agreement, dated as of the date
hereof, by and between Parent and the CD&R Investors, as the same now exists or may hereafter be
further amended, modified, supplemented, extended, renewed, restated or replaced.



     1.180 “Subordinated Debt” shall mean any notes, debt securities or other Indebtedness of a
Borrower or Guarantor that is subordinated in right of payment to the right of Agent and Lenders to
receive the prior final payment and satisfaction in cash in full of all of the Obligations and is
incurred in accordance with Section 10.3(j) hereof.



     1.181 “Subsidiary” or “subsidiary” shall mean, with respect to any Person, any corporation,
limited liability company, limited liability partnership or other limited or general partnership,
trust, association or other business entity of which an aggregate of at least a majority of the
outstanding Equity Interests or other interests entitled to vote in the election of the board of
directors of such corporation (irrespective of whether, at the time, Equity Interests of any other
class or classes of such corporation shall have or might have voting power by reason of the
happening of any contingency), managers, trustees or other controlling persons, or an equivalent
controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such
Person and/or one or more subsidiaries of such Person. Unless otherwise qualified, all references
to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or
Subsidiaries of Parent.



     1.182 “Supermajority Lenders” shall mean, at any time, subject to Section 6.13(g), those
Lenders whose Pro Rata Shares aggregate more than sixty-six and two-thirds (66.67%) percent of the
aggregate of the Commitments of all Lenders, or if the Commitments shall have been terminated,
Lenders to whom more than sixty-six and two-thirds (66.67%) percent of the then outstanding Loans
and Letter of Credit Obligations are owing.



     1.183 “Swing Line Lender” shall mean Wells Fargo Foothill, LLC, in its capacity as the lender
of Swing Line Loans, and its successors and assigns.



     1.184 “Swing Line Loans” shall mean loans now or hereafter made by Swing Line Lender on a
revolving basis pursuant to the Credit Facility (involving advances, repayments and readvances) as
set forth in Section 2 hereof.



     1.185 “Swing Line Loan Limit” shall mean $10,000,000.



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     1.186 “Taxes” shall have the meaning set forth in Section 6.8.



     1.187 “Tax Sharing Agreement” means any Tax Sharing Agreement entered between Parent and any
Parent Entity, substantially in the form of Exhibit F or otherwise in form and substance
reasonably satisfactory to the Agent.



     1.188 “Term Loan Agent” shall mean Wachovia Bank, National Association, in its capacity as
administrative and collateral agent acting for and on behalf of the Term Loan Lenders and any
replacement or successor agent thereunder.



     1.189 “Term Loan Agreement” shall mean the Amended and Restated Credit Agreement, dated as of
the date hereof, among Parent, the Lenders party thereto, and Wachovia Bank, National Association,
as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.



     1.190 “Term Loan Debt” shall mean the Indebtedness of Borrowers and Guarantors evidenced by
or arising under the Term Loan Documents.



     1.191 “Term Loan Documents” shall mean the Term Loan Agreement and the Loan Documents, as
defined therein, in each case, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.



     1.192 “Term Loan Lenders” shall mean the lenders under the Term Loan Agreement.



     1.193 “Term Loan Priority Collateral” shall mean the Collateral described on Schedule
1.192 hereto.



     1.194 “Transactions” shall mean, collectively, any or all of the following: (a) the equity
investment referred to in Section 4.1(a) hereof, (b) the amendment and restatement of the Term Loan
Documents, (c) the acceptance of the Convertible Notes referred to in Section 4.1(a)(iii) hereof
and the payment of the redemption price due in connection therewith and (d) all other transactions
relating to any of the foregoing (including payment of fees and expenses related to any of the
foregoing).



     1.195 “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York and
any successor statute, as in effect from time to time (except that terms used herein which are not
otherwise defined herein and defined in the Uniform Commercial Code as in effect in the State of
New York on the date hereof shall continue to have the same meaning notwithstanding any replacement
or amendment of such statute except as Agent may otherwise determine with the consent of the
Administrative Borrower).



     1.196 “US Dollars”, “US$” and “$” shall each mean lawful currency of the United States of
America.



     1.197 “Value” or “value” shall mean, with respect to Inventory, the lower of (a) cost
computed on a first-in first-out basis in accordance with GAAP (calculated based on standard cost
with adjustments for purchase price variances) or (b) market value according to GAAP for inventory
purposes (including adjustments for any lower-of-cost-or market charges); provided,
that, for purposes of the calculation of the Borrowing Base, the Value of the Inventory
shall not include write-ups or write-downs in value with respect to currency exchange rates and (i)
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 appraisal of the Inventory received
and accepted by Agent prior to the date hereof, if any.



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     1.198 “Voting Stock” shall mean, as to any Person, Equity Interests of such Person entitled
to vote generally in the election of directors of such Person.



     1.199 “Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any
date, the number of years obtained by dividing (a) the then outstanding principal amount of such
Indebtedness into (b) the total of the product obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of such payment.



     1.200 “Wells Fargo” shall mean Wells Fargo Foothill, LLC, and its successors and assigns.



SECTION 2. CREDIT FACILITIES




     2.1 Revolving Loans.



          (a) Subject to and upon the terms and conditions contained herein, each Lender severally (and
not jointly) agrees to make its Pro Rata Share of Revolving Loans to Borrowers from time to time in
amounts requested by any Borrower (or Administrative Borrower on behalf of Borrowers) up to the
aggregate amount outstanding equal to the Commitment of such Lender; provided,
that, after giving effect to any such Revolving Loan, the aggregate principal amount of the
Revolving Loans, Swing Line Loans and Letter of Credit Obligations outstanding shall not exceed the
least of: (i) the Borrowing Base at such time or (ii) the Maximum Credit as then in effect or
(iii) the Revolving Loan Limit. All Loans made by Lenders to Borrowers shall be denominated in US
Dollars.



          (b) Except with the consent of Agent and all Lenders, or as otherwise provided herein, (i) the
aggregate amount of the Loans and the Letter of Credit Obligations outstanding at any time shall
not exceed the least of: (A) the Borrowing Base or (B) the Maximum Credit or (C) the Revolving
Loan Limit and (ii) the outstanding amount of Swing Line Loans shall not exceed the Swing Line Loan
Limit. Subject to the terms and conditions hereof, each Borrower (or Administrative Borrower on
behalf of such Borrower) may from time to time borrow, prepay and reborrow Revolving Loans. No
Lender shall be required to make any Revolving Loan, if, after giving effect thereto the aggregate
outstanding principal amount of all Revolving Loans of such Lender, together with such Lender’s Pro
Rata Share of the aggregate amount of all Swing Line Loans and Letter of Credit Obligations, would
exceed such Lender’s Commitment.



     2.2 Swing Line Loans



          (a) Subject to the terms and conditions contained herein, the Swing Line Lender agrees that it
will make Swing Line Loans to each Borrower from time to time in amounts requested by such Borrower
(or Administrative Borrower on behalf of such Borrower) up to the aggregate amount outstanding
equal to the Swing Line Loan Limit; provided, that, after giving effect to any such
Swing Line Loan, the aggregate principal amount of the Revolving Loans, Swing Line Loans and Letter
of Credit Obligations outstanding shall not exceed the least of (i) the Borrowing Base, (ii) the
Revolving Loan Limit, or (iii) the Maximum Credit, in each case at such time. Subject to the terms
and conditions hereof, each Borrower (or Administrative Borrower on behalf of Borrowers) may from
time to time borrow, prepay and reborrow Swing Line Loans. Swing Line Lender shall not be required
to make Swing Line Loans, if, after giving effect thereto, the aggregate outstanding principal
amount of all Swing Line Loans would exceed the then existing Swing Line Loan Limit. Each Swing
Line Loan shall be subject to all of the terms and conditions applicable to other Base Rate Loans
funded by the Lenders constituting Revolving Loans, except that all payments thereon shall be
payable to the Swing Line Lender solely for



52









 







its own account. All Revolving Loans and Swing Line Loans shall be subject to the settlement
among Lenders provided for in Section 6.13 hereof.



          (b) Upon the making of a Swing Line Loan, without further action by any party hereto, each
Lender shall be deemed to have irrevocably and unconditionally purchased and received from the
Swing Line Lender, without recourse or warranty, an undivided interest and participation to the
extent of such Lender’s Pro Rata Share in such Swing Line Loan. To the extent that there is no
settlement in accordance with Section 6.13 below, the Swing Line Lender may at any time, require
the Lenders to fund their participations. From and after the date, if any, on which any Lender has
funded its participation in any Swing Line Loan, Agent shall promptly distribute to such Lender,
not less than weekly, such Lender’s Pro Rata Share of all payments of principal and interest
received by Agent in respect of such Swing Line Loan.



     2.3 Letters of Credit.



          (a) General. Subject to and upon the terms and conditions contained herein and in the
Letter of Credit Documents, at the request of a Borrower (or Administrative Borrower on behalf of
such Borrower), Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for
the account of such Borrower one or more Letters of Credit, for the ratable risk of each Lender
according to its Pro Rata Share, in such form as may be reasonably approved from time to time by
Issuing Bank.



          (b) Notice of Issuance, Amendment, Renewal, Extension. The Borrower requesting such
Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall give Agent and the
Issuing Bank with respect thereto three (3) Business Days’ prior written notice of such Borrower’s
request for the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit). Such notice shall (i) specify the original face amount of the
Letter of Credit requested (or identify the Letter of Credit to be amended, renewed or extended),
(ii) the effective date (which date shall be a Business Day and in no event shall be a date less
than ten (10) days prior to the end of the term of this Agreement) of issuance of such requested
Letter of Credit (or such amendment, renewal or extension), (iii) whether such Letter of Credit may
be drawn in a single or in partial draws, (iv) the date on which such requested Letter of Credit is
to expire, (v) the purpose for which such Letter of Credit is to be issued, (vi) the name and
address of the beneficiary of the requested Letter of Credit, (vii) such other information as shall
be reasonably necessary to enable the Issuing Bank to prepare, amend, renew or extend such Letter
of Credit and (viii) if requested by Issuing Bank or Agent, the Borrower requesting such Letter of
Credit (or Administrative Borrower on behalf of such Borrower) shall have delivered to Issuing Bank
with respect thereto at such times and in such manner as such Issuing Bank may reasonably require,
an application, in form and substance consistent with this Agreement and otherwise reasonably
satisfactory to such Issuing Bank and Agent, for the issuance of the Letter of Credit and such
other Letter of Credit Documents as may be required pursuant to the terms thereof. If requested by
the Issuing Bank, the Borrower requesting the Letter of Credit (or Administrative Borrower on
behalf of such Borrower) shall attach to the request the proposed terms of the Letter of Credit.
The renewal or extension of, or increase in the amount of, any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.



          (c) Certain Conditions to Letters of Credit. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Section 4 hereof and the other
terms and conditions contained herein, no Letter of Credit shall be available to Borrowers unless
each of the following conditions precedent have been satisfied in a manner satisfactory to Agent:
(i) the Borrower requesting such Letter of Credit (or Administrative Borrower on behalf of such
Borrower) shall have delivered to the Issuing Bank at such times and in such manner as Issuing Bank
may reasonably require and to Agent, an application, in form and substance consistent with this
Agreement and otherwise reasonably satisfactory



53









 







to Issuing Bank and Agent, for the issuance of the Letter of Credit and such other Letter of
Credit Documents as may be reasonably required pursuant to the terms thereof, and the form and
terms of the proposed Letter of Credit shall be satisfactory to Agent and Issuing Bank, (ii) as of
the date of issuance, no order of any court or other Governmental Authority shall by its terms
enjoin or restrain Issuing Bank from issuing the proposed Letter of Credit, and no law, rule or
regulation applicable to Issuing Bank and no request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over Issuing Bank shall prohibit, or
require that Issuing Bank refrain from, the issuance of such Letter of Credit and (iii) after
giving effect to the issuance of such Letter of Credit, (A) the Letter of Credit Obligations shall
not exceed the Letter of Credit Limit and (B) the aggregate principal amount of the Revolving
Loans, Swing Line Loans and Letter of Credit Obligations outstanding shall not exceed the least of
(x) the Borrowing Base, (y) the Revolving Loan Limit, or (z) the Maximum Credit, in each case at
such time. Notwithstanding anything to the contrary contained herein, Issuing Bank shall not be
obligated to issue a Letter of Credit in respect of the obligation of a Borrower or Guarantor
arising in connection with a lease of Real Property or an employment contract, (1) in the case of a
Letter of Credit in connection with such a lease, with a face amount in excess of the amount equal
to (x) the amount of rent under such lease, without acceleration, for the greater of one year or
fifteen (15%) percent, not to exceed three (3) years, of the remaining term of such lease minus (y)
the amount of any cash or other collateral to secure the obligations of a Borrower or Guarantor in
respect of such lease and (2) in the case of a Letter of Credit in connection with an employment
contract, with a face amount in excess of the compensation provided by such contract, without
acceleration, for a one year period .



          (d) Letter of Credit Sublimit. Except in Agent’s discretion and with the consent of
all Lenders, the amount of all outstanding Letter of Credit Obligations shall not at any time
exceed the Letter of Credit Limit.



          (e) Expiration. Each standby Letter of Credit shall expire at or prior to the earlier
of (i) twelve (12) months after the date of the issuance of such standby Letter of Credit (or in
the case of any renewal or extension thereof, twelve (12) months after such renewal or extension)
and (ii) the date that is five (5) Business Days prior to the Maturity Date; provided,
that, (A) any standby Letter of Credit with a one year tenor may provide for automatic
renewal or extension thereof for additional one year periods (which in no event shall extend beyond
the date referred to in clause (ii) above) and (B) if the Issuing Bank and Agent each consent, the
expiration date on any standby Letter of Credit may extend beyond the date referred to in clause
(ii) above to the extent such Letter of Credit is fully cash-collateralized to reasonable
satisfaction of Agent. Each other Letter of Credit shall expire on the earlier of one hundred
eighty (180) days after such Letter of Credit’s date of issuance, renewal or extension (as
applicable) or the date five (5) Business Days prior to the Maturity Date.



          (f) Letter of Credit Participations. Immediately upon the issuance or amendment of
any Letter of Credit issued for the account of a Borrower, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided
interest and participation to the extent of such Lender’s Pro Rata Share of the liability with
respect to such Letter of Credit and the obligations of Borrowers with respect thereto (including
all Letter of Credit Obligations with respect thereto). Each Lender shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to
pay to Issuing Bank therefor and discharge when due, its Pro Rata Share of all of such obligations
arising under such Letter of Credit. Without limiting the scope and nature of each Lender’s
participation in any such Letter of Credit, to the extent that Issuing Bank has not been reimbursed
or otherwise paid as reasonably required hereunder with respect to any such Letter of Credit or
under any such Letter of Credit, each such Lender shall pay to Issuing Bank its Pro Rata Share of
such unreimbursed drawing or other amounts then due to Issuing Bank in connection therewith.



54









 





          (g) Letter of Credit Reimbursement. If Issuing Bank shall make any payment in respect
of a Letter of Credit, Borrowers shall reimburse Issuing Bank by paying to Agent an amount equal to
such payment by Issuing Bank not later than 2:00 p.m. on the date that such payment by Issuing Bank
is made, if the applicable Borrower (or Administrative Borrower on behalf of such Borrower) shall
have received notice of such payment by the Issuing Bank prior to 10:00 a.m. on such date, or, if
such notice shall not have been received by such Borrower (or Administrative Borrower) prior to
such time on such date, then not later than 2:00 p.m. on the next Business Day; provided,
that, unless such Borrower (or Administrative Borrower on behalf of such Borrower) requests
otherwise, and, subject to the conditions to borrowing set forth herein, each drawing under any
Letter of Credit or other amount payable in connection therewith when due shall constitute a
request by the Borrower for whose account such Letter of Credit was issued to Agent for a Base Rate
Loan in the amount of such drawing or other amount then due, and shall be made by Agent on behalf
of Lenders as a Revolving Loan or Swing Line Loan as Administrative Borrower requests, or if such
request is not received in a timely manner, as Agent determines (or, if determined by Agent as a
Special Agent Advance, as the case may be) in an equivalent amount and, to the extent so financed,
such Borrower’s obligation to make such payment shall be discharged and replaced by the resulting
Revolving Loan, Swing Line Loan (or Special Agent Advance, as the case may be). If the applicable
Borrower (or Administrative Borrower on behalf of such Borrower) fails to make such payment when
due, subject to the rights of Agent under Section 6.13 hereof, Agent may notify each Lender of the
applicable payment made by the Issuing Bank in respect of such Letter of Credit, the payment then
due from such Borrower in respect thereof and such Lender’s Pro Rata Share thereof. Promptly
following receipt of such notice, each Lender shall pay to Agent its Pro Rata Share of the payment
then due and Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it
from Lenders. Promptly following receipt by Agent of any payment from a Borrower pursuant to this
paragraph, Agent shall distribute such payment to the applicable Issuing Bank or, to the extent
that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to
such Lenders and such Issuing Bank as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse an Issuing Bank for any payment made by such Issuing
Bank (other than the funding of a Revolving Loan, Swing Line Loan or Special Agent Advance as
contemplated above) shall not constitute a Loan and shall not relieve the applicable Borrower of
its obligation to reimburse such Issuing Bank for such payment.



          (h) Obligations Absolute. The obligations of Borrowers to pay each Letter of Credit
Obligation, and the obligations of Lenders to make payments to Agent for the account of Issuing
Bank with respect to Letters of Credit 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, notwithstanding the occurrence or continuance of any Default, Event of
Default, the failure to satisfy any other condition set forth in Section 4 hereof or any other
event or circumstance, 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 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,
constitute a legal or equitable discharge of, or provide a right of setoff against, a Borrower’s
obligations hereunder; provided, that, this clause (iv) shall not be construed to
relieve Issuing Bank of any liability resulting from its gross negligence or willful misconduct as
determined pursuant to a final, non-appealable order of a court of competent jurisdiction. None of
Agent, Lenders or the Issuing Bank, or 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



55









 







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
an Issuing Bank; provided, that, the foregoing shall not be construed to excuse
Issuing Bank from liability to the applicable Borrower resulting from the gross negligence or
willful misconduct of Issuing Bank (as determined pursuant to a final, non-appealable order of a
court of competent jurisdiction) or otherwise affect any defense or other right that such Borrower
may have as a result of any such gross negligence or willful misconduct. In furtherance of the
foregoing and without limiting the generality thereof, with respect to documents presented which
appear on their face to be in substantial compliance with the terms of a Letter of Credit, an
Issuing Bank may, in its 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; provided, that, the foregoing
shall not be construed to excuse an Issuing Bank from liability to the applicable Borrower
resulting from the gross negligence or willful misconduct of such Issuing Bank or otherwise affect
any defense or other right that such Borrower may have as a result of any such gross negligence or
willful misconduct as determined pursuant to a final, non-appealable order of a court of competent
jurisdiction.



          (i) Disbursement Procedures. The applicable Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for payment under a
Letter of Credit. Such Issuing Bank shall promptly notify Agent and the applicable Borrower (or
Administrative Borrower on behalf of such Borrower) by telephone (confirmed by facsimile or
otherwise as Administrative Borrower and Issuing Bank may agree) of such demand for payment and
whether such Issuing Bank has made or will make any payment in respect thereof; provided,
that, any failure to give or delay in giving such notice shall not relieve the applicable
Borrower of its obligation to reimburse such Issuing Bank and Lenders with respect to any such
payment, as provided in this Section 2.3.



          (j) Interim Interest. If an Issuing Bank shall make any payment in respect of a
Letter of Credit, or otherwise be owed any amounts in respect thereof, then, unless the applicable
Borrower shall reimburse Issuing Bank for such payment or other amount in full on the date such
payment is made or amount due, the unpaid amount thereof shall bear interest, for each day from and
including the date such payment is made or amount due but excluding the date that the applicable
Borrower reimburses such payment or other amount, at the rate per annum then applicable to Base
Rate Loans. Interest accrued pursuant to this paragraph shall be for the account of the applicable
Issuing Bank; except, that, interest accrued on and after the date of payment by
Agent or any Lender pursuant to Section 2.3(g) above to reimburse such Issuing Bank shall be for
the account of Agent or such Lender to the extent of such payment, and shall be payable on demand
or, if no demand has been made, on the date on which the applicable Borrower reimburses the
applicable payment in full.



          (k) Account Party. Each Borrower and Guarantor hereby irrevocably authorizes and
directs each Issuing Bank to name such Borrower or Guarantor as the account party therein and to
the extent that Agent or Wells Fargo is the co-applicant, guarantor or indemnitor in respect of any
Letter of Credit to deliver to Agent all instruments, documents and other writings received by such
Issuing Bank pursuant to the Letter of Credit and to accept and rely upon Agent’s instructions and
agreements with respect to all matters arising in connection with the Letter of Credit or the
Letter of Credit Documents with respect thereto. Without limitation upon the rights of any
Borrower to request and obtain Loans and Letters of Credit for its benefit, subject to and in
accordance with the terms and conditions set forth herein, nothing contained herein shall be deemed
or construed to grant any Borrower or Guarantor any right or authority to pledge the credit of
Agent or any Lender in any manner. Agent and Lenders shall have no liability of any kind with
respect to any Letter of Credit provided by Issuing Bank unless Agent has duly executed and
delivered to Issuing Bank the application or a guarantee or indemnification in writing with respect
to such Letter of Credit. Borrowers and Guarantors shall be bound by any reasonable interpretation
made in



56









 







good faith by Agent, or an Issuing Bank under or in connection with any Letter of Credit or
any documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be
inconsistent with any instructions of any Borrower or Guarantor. Except as Agent may otherwise
specify, Borrowers and Guarantors shall designate Agent or the Issuing Bank with respect to a
Letter of Credit as the consignee on all bills of lading and other negotiable and non-negotiable
documents under such Letter of Credit.



          (l) Rights of Lenders and Issuing Bank. Any rights, remedies, duties or obligations
granted or undertaken by any Borrower to Issuing Bank in any application for any Letter of Credit,
or any other agreement in favor of Issuing Bank relating to any Letter of Credit, shall be deemed
to have been granted or undertaken by such Borrower to Agent. Any duties or obligations undertaken
by Agent to Issuing Bank in any application for any Letter of Credit, or any other agreement by
Agent in favor of Issuing Bank relating to any Letter of Credit, to the extent set forth in any
corresponding application for such Letter of Credit or any other agreement in favor of Issuing Bank
relating to such Letter of Credit executed by any Borrower shall be deemed to have been undertaken
by Borrowers to Agent and to apply in all respects to Borrowers.



     2.4 Requests for Borrowings. 



          (a) To request a Revolving Loan or Swing Line Loan, the applicable Borrower (or Administrative
Borrower on behalf of such Borrower) shall notify Agent of such request by telephone (i) in the
case of a Eurodollar Rate Loan, not later than 11:00 a.m., three (3) Business Days before the date
of the proposed Eurodollar Rate Loan or (ii) in the case of a Base Rate Loan (including a Swing
Line Loan), not later than 1:00 p.m. on the same Business Day as the date of the proposed Base Rate
Loan. Each such telephonic request shall be irrevocable and, to the extent required by Agent,
shall be confirmed promptly by hand delivery or facsimile (including by email or other electronic
communication) to Agent of a written request in a form reasonably satisfactory to Agent and signed
by or on behalf of the applicable Borrower or Administrative Borrower on behalf of such Borrower.



          (b) Each such telephonic and written request shall be in a form previously approved by Agent
and shall specify the following information:



               (i) the Borrower requesting such Revolving Loan or Swing Line Loan;



               (ii) whether such Loan is a Revolving Loan or Swing Line Loan;



               (iii) the aggregate amount of such Revolving Loan or Swing Line Loan;



               (iv) the date of such Revolving Loan or Swing Line Loan, which shall be a Business Day;



               (v) if such Loan is to be a Revolving Loan, whether such Revolving Loan is to be a Base Rate
Loan or a Eurodollar Rate Loan or a combination thereof; and



               (vi) the deposit account of the applicable Borrower specified on Schedule 8.21 or any
other account with Agent (or one of its Affiliates) that shall be specified in a written notice
signed by an officer of such Borrower and delivered to Agent, to which the proceeds of such Loan
are to be remitted.



          (c) If no election as to whether a Revolving Loan is to be a Base Rate Loan or Eurodollar Rate
Loan is specified in the applicable request, then the requested Revolving Loan shall be a Base Rate
Loan. Promptly following receipt of a request for a Revolving Loan in accordance with this
Section,



57









 







Agent shall advise each Lender of the details thereof and of the amount of such Lender’s
Revolving Loan to be made as part of the request.



          (d) All Loans and Letters of Credit under this Agreement shall be conclusively presumed to
have been made to, and at the request of and for the benefit of, any Borrower or Guarantor when
deposited to the credit of any Borrower or Guarantor or otherwise disbursed or established in
accordance with the instructions of any Borrower or Guarantor or in accordance with the terms and
conditions of this Agreement.



     2.5 Mandatory Prepayments.



          (a) In the event that (i) the aggregate amount of the Loans and the Letter of Credit
Obligations outstanding at any time exceeds the least of: (A) the Borrowing Base, (B) the
Revolving Loan Limit, or (C) the Maximum Credit, or (ii) the outstanding amount of the Swing Line
Loans exceeds the Swing Line Loan Limit, such event shall not limit, waive or otherwise affect any
rights of Agent or Lenders in such circumstances or on any future occasions and Borrowers shall,
upon demand by Agent at the direction of Co-Collateral Agents, which demand may be made at any time
or from time to time, immediately repay to Agent the entire amount of any such excess(es) for which
payment is demanded.



          (b) At any time that a Dominion Event has occurred and is continuing, promptly (and in any
case no later than the fifth (5th) day) following any Permitted Disposition (other than a Permitted
Disposition referred to in clause (a), (b)(ii), (d), (f), (g), (i), (j), (l) or (n) of the
definition of such term) not consisting of the issuance of an Equity Interest, Borrowers shall,
absolutely and unconditionally without notice or demand, if and to the extent that the Net Cash
Proceeds from such Permitted Disposition are not required to be applied to the payment of the
obligations under the Term Loan Documents as provided in the Intercreditor Agreement, repay the
outstanding Obligations in an amount equal to one hundred (100%) percent of the Net Cash Proceeds
payable to or for the benefit of such Person in connection with such Permitted Disposition.



          (c) At any time that a Dominion Event has occurred and is continuing, promptly (and in any
case no later than the fifth (5th) day) following the incurrence of any Indebtedness permitted
under Section 10.3(j) hereof, Borrowers shall, absolutely and unconditionally without notice or
demand, repay the outstanding Obligations (i) other than in the case of Subordinated Debt, in an
amount equal to one hundred (100%) percent of the Net Cash Proceeds payable to or for the benefit
of Borrowers and Guarantors in connection with the incurrence of such Indebtedness and (ii) in the
case of Subordinated Debt, in an amount equal to fifty (50%) percent of the Net Cash Proceeds
payable to or for the benefit of Borrowers and Guarantors in connection with the incurrence of such
Indebtedness, in each case, under clause (i) or (ii), if and to the extent that the Net Cash
Proceeds from such incurrence of Indebtedness are not required to be applied to the payment of the
obligations under the Term Loan Documents as provided in the Intercreditor Agreement.



          (d) At any time that a Dominion Event has occurred and is continuing, promptly (and in any
case no later than the fifth (5th) day) following the receipt of any amounts as loss payee under
any property insurance maintained by Parent and its Subsidiaries, Borrowers shall, absolutely and
unconditionally without notice or demand, if and to the extent that the Net Cash Proceeds from such
receipt are not required to be applied to the payment of the obligations under the Term Loan
Documents as provided in the Intercreditor Agreement, repay the outstanding Obligations in an
amount equal to one hundred (100%) percent of the Net Cash Proceeds payable to or for the benefit
of such Person in connection therewith.



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          (e) All payments required to be made pursuant to any subsection of this Section 2.5 shall be
in addition to any other payments required to be made pursuant to any other subsection of this
Section 2.5.



          (f) All amounts received by Agent pursuant to this Section 2.5 shall be applied by Agent to
the Obligations, whether or not then due, in accordance with Section 6.4 hereof. There shall be no
permanent reduction in the Commitments as a result of any prepayments of the Loans pursuant to this
Section 2.5.



     2.6 Optional Prepayments. Borrowers may prepay without penalty or premium the principal of any Revolving Loan or Swing Line
Loan, in whole or in part, subject to Section 3.10 hereof; provided, that, any
notice of such prepayment shall be revocable at any time prior to such prepayment All amounts
received by Agent pursuant to this Section 2.6 shall be applied by Agent to the Obligations,
whether or not then due, in accordance with Section 6.7 hereof; but, for the avoidance of doubt,
the Commitments shall not be reduced by any amount of any prepayment of the Loans pursuant to this
Section 2.6.



     2.7 Increase in Maximum Credit.



          (a) Administrative Borrower may, at any time, deliver a written request to Agent to increase
the Maximum Credit. Any such written request shall specify the amount of the increase in the
Maximum Credit that Borrowers are requesting; provided, that, (i) in no event shall
the aggregate amount of any such increase in the Maximum Credit cause the Maximum Credit to exceed
$175,000,000, (ii) such request shall be for an increase of not less than $10,000,000, and (iii) in
no event shall the Maximum Credit be increased more than four (4) times during the term hereof.



          (b) Upon the receipt by Agent of any such written request, Agent shall notify each Lender of
such request and each Lender shall have the option (but not the obligation) to increase the amount
of its Commitment by an amount up to its Pro Rata Share of the amount of the increase in the
Maximum Credit requested by Administrative Borrower as set forth in the notice from Agent to such
Lender. Each Lender shall notify Agent within thirty (30) days after the receipt of such notice
from Agent whether it is willing to so increase its Commitment, and if so, the amount of such
increase; provided, that, (i) the minimum increase in the Commitments of each such
Lender providing the additional Commitments shall equal or exceed $2,000,000, and (ii) no Lender
shall be obligated to provide such increase in its Commitment and the determination to increase the
Commitment of a Lender shall be within the sole and absolute discretion of such Lender. If the
aggregate amount of the increases in the Commitments received from the Lenders does not equal or
exceed the amount of the increase in the Maximum Credit requested by Administrative Borrower, Agent
may, in consultation with Administrative Borrower, seek additional increases from Lenders, or
Commitments from such Eligible Transferees or other Persons as are approved by Administrative
Borrower. In the event Lenders (or Lenders and any such Eligible Transferees or other Persons, as
the case may be) have committed in writing to provide increases in their Commitments or new
Commitments in an aggregate amount in excess of the increase in the Maximum Credit requested by
Borrowers or permitted hereunder, Agent shall then have the right to allocate such commitments,
first to Lenders and then to Eligible Transferees or such other Persons, in such amounts and manner
as Agent may determine, after consultation with Administrative Borrower.



          (c) The Maximum Credit shall be increased by the amount of the increase in Commitments from
Lenders or new Commitments from Eligible Transferees or other Persons, in each case selected in
accordance with Section 2.7(b) above, for which Agent has received Assignment and Acceptances sixty
(60) days after the date of the request by Administrative Borrower for the increase or such earlier
date as
Agent and Administrative Borrower may agree (but subject to the satisfaction of the conditions
set forth below), whether or not the aggregate amount of the increase in Commitments and new
Commitments, as



59









 







the case may be, equal or exceed the amount of the increase in the Maximum Credit
requested by Administrative Borrower in accordance with the terms hereof, effective on the date
that each of the following conditions have been satisfied:



               (i) Agent shall have received from each Lender or Eligible Transferee or other Person that is
providing an additional Commitment as part of the increase in the Maximum Credit, an Assignment and
Acceptance or one or more amendments to this Agreement and as appropriate, the other Financing
Agreements and any such amendment may, without the consent of any other Lenders, effect such
amendments to any Loan Document as may be necessary or appropriate in the opinion of the
Administrative Agent, to effect the provisions of this Section 2.7, duly executed by such Lender or
Eligible Transferee or other Person and each Borrower;



               (ii) the conditions precedent to the making of Revolving Loans set forth in Section 4.2 shall
be satisfied as of the date of the increase in the Maximum Credit, both before and after giving
effect to such increase;



               (iii) to the extent requested by Agent, Agent shall have received an opinion of counsel to
Borrowers in form and substance and from counsel reasonably satisfactory to Agent and Lenders
addressing such matters as Agent may reasonably request (including an opinion as to no conflicts
with other Indebtedness);



               (iv) such increase in the Maximum Credit on the date of the effectiveness thereof shall not
violate any applicable law, regulation or order or decree of any court or other Governmental
Authority and shall not be enjoined, temporarily, preliminarily or permanently;



               (v) there shall have been paid to each Lender and third-party bank or other Person providing
an additional Commitment in connection with such increase in the Maximum Credit all fees and
expenses due and payable to such Person on or before the effectiveness of such increase; and



               (vi) there shall have been paid to Agent, for the account of the Agent and Lenders (in
accordance with any agreement among them) all fees and expenses (including reasonable fees and
expenses of counsel) due and payable pursuant to any of the Financing Agreements on or before the
effectiveness of such increase.



          (d) As of the effective date of any such increase in the Maximum Credit, each reference to the
term Maximum Credit herein, and in any of the other Financing Agreements shall be deemed amended to
mean the amount of the Maximum Credit as increased as specified in the most recent written notice
from Agent to Administrative Borrower of the increase in the Maximum Credit.



     2.8 Decrease in Maximum Credit.



          (a) Administrative Borrower (on behalf of itself and each other Borrower) may, at any time,
deliver a written request to Agent to decrease the Maximum Credit. Any such written request shall
specify the amount of the decrease in the Maximum Credit that Administrative Borrower is requesting
and the effective date of such decrease (which date shall not be less than five (5) nor more than
ten (10) Business Days after the date of such request); provided, that, (i) in no
event shall the aggregate amount of any such decrease cause the Maximum Credit to be less than
$75,000,000, (ii) any such request for a decrease shall be for an amount of not less than
$10,000,000, and (iii) in no event shall more than one such written request for a decrease be
delivered to Agent in any calendar quarter.



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          (b) Upon the receipt by Agent of a written request to decrease the Maximum Credit, Agent shall
notify each of the Lenders of such request and, subject to the terms of Section 2.8(c) hereof, the
Commitment of each Lender shall be decreased on the date requested by Administrative Borrower by an
amount equal to such Lender’s Pro Rata Share of the amount of the decrease in the Maximum Credit
requested by Administrative Borrower as set forth in the notice from Agent to such Lender.



          (c) In the event of a request to decrease the Maximum Credit, the Maximum Credit shall be
decreased by the amount requested by Administrative Borrower in accordance with the terms hereof;
provided, that, after giving effect to such decrease, the Maximum Credit shall not
be less than the aggregate principal amount of the Loans, Special Agent Advances and Letter of
Credit Obligations outstanding at such time.



          (d) As of the effective date of any such decrease in the Maximum Credit, each reference to the
term Maximum Credit and Commitments herein, as applicable, and in any of the other Financing
Agreements shall be deemed amended to mean the amount of the Maximum Credit and Commitments
specified in the most recent written notice from Agent to Borrower Agent of the decrease in the
Maximum Credit and Commitments, as applicable.



     2.9 Joint and Several Liability of Borrowers. 



          (a) Notwithstanding anything in this Agreement or any other Financing Agreements to the
contrary, each Borrower, jointly and severally, in consideration of the financial accommodations to
be provided by Agent and Lenders under this Agreement and the other Financing Agreements, for the
mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings
of the other Borrowers to accept joint and several liability for the Obligations, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and
several liability with the other Borrowers, with respect to the payment and performance of all of
the Obligations, it being the intention of the parties hereto that all of the Obligations shall be
the joint and several obligations of each Borrower without preferences or distinction among them.
Borrowers shall be liable for all amounts due to Agent and Lenders under this Agreement, regardless
of which Borrower actually receives the Loans or Letter of Credit Obligations hereunder or the
amount of such Revolving Loans received or the manner in which Agent or any Lender accounts for
such Loans, Letter of Credit Obligations or other extensions of credit on its books and records.
The Obligations of Borrowers with respect to Revolving Loans made to one of them, and the
Obligations arising as a result of the joint and several liability of one of the Borrowers
hereunder with respect to Revolving Loans made to the other of the Borrowers hereunder, shall be
separate and distinct obligations, but all such other Obligations shall be primary obligations of
all Borrowers.



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



          (c) The obligations of each Borrower under this Section 2.9 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction
or similar proceeding with respect to any Borrower. The joint and several liability of the
Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, membership, constitution or place of
formation of any Borrower or any of the Lenders.



61









 





          (d) The provisions of this Section 2.9 hereof are made for the benefit of the Lenders and
their successors and assigns, and subject to Section 14.4 hereof, may be enforced by them from time
to time against any Borrower as often as occasion therefor may arise and without requirement on the
part of Agent or any Lender first to marshal any of its claims or to exercise any of its rights
against the other Borrowers or to exhaust any remedies available to it against the other Borrowers
or to resort to any other source or means of obtaining payment of any of the Obligations hereunder
or to elect any other remedy. The provisions of this Section 2.9 shall remain in effect until the
Payment in Full of all Obligations. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations is rescinded or must otherwise be restored or returned by Agent
or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the
provisions of this Section 2.9 hereof will forthwith be reinstated and in effect as though such
payment had not been made.



          (e) Notwithstanding any provision to the contrary contained herein or in any of the other
Financing Agreements, to the extent the obligations of a Borrower shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation, because of any applicable
state or federal law relating to fraudulent conveyances or transfers) then the obligations of such
Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law
(whether federal, state or provincial and including, without limitation, the Bankruptcy Code of the
United States).



          (f) With respect to the Obligations arising as a result of the joint and several liability of
Borrowers hereunder with respect to Loans, Letter of Credit Obligations or other extensions of
credit made to the other Borrowers hereunder, each Borrower waives, until the Payment in Full of
all Obligations, any right to enforce any right of subrogation or any remedy which Agent or any
Lender now has or may hereafter have against any Borrower, any endorser or any guarantor of all or
any part of the Obligations, and any benefit of, and any right to participate in, any security or
collateral given to Agent or any Lender. Any claim which any Borrower may have against any other
Borrower with respect to any payments to Agent or Lenders hereunder or under any of the other
Financing Agreements are hereby expressly made subordinate and junior in right of payment, without
limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior
Payment in Full of all Obligations. Upon the occurrence of any Event of Default and for so long as
the same is continuing, to the maximum extent permitted under applicable law, Agent and Lenders may
proceed directly and at once, without notice (to the extent notice is waivable under applicable
law), against (i) with respect to Obligations of Borrowers, either or all of them or (ii) with
respect to Obligations of any Borrower, to collect and recover the full amount, or any portion of
the applicable Obligations, without first proceeding against the other Borrowers or any other
Person, or against any security or collateral for the Obligations. Each Borrower consents and
agrees that Agent and Lenders shall be under no obligation to marshal any assets in favor of
Borrower(s) or against or in payment of any or all of the Obligations. Subject to the foregoing,
in the event that a Loan, Letter of Credit Obligation or other extension of credit is made to, or
with respect to business of, one Borrower and any other Borrower makes any payments with respect to
such Loan, Letter of Credit Obligation or extension of credit, the first Borrower shall promptly
reimburse such other Borrower for all payments so made by such other Borrower.



     2.10 Commitments. The aggregate amount of each Lender’s Pro Rata Share of the Revolving Loans, Swing Line Loans
and Letter of Credit Obligations shall not exceed the amount of such Lender’s Commitment, as the
same may from time to time be amended in accordance with the provisions hereof.



SECTION 3. INTEREST AND FEES




     3.1 Interest.



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          (a) Borrowers shall pay to Agent interest on the outstanding principal amount of the Loans at
the Interest Rate. Interest shall be payable by Borrowers to Agent in arrears on each Interest
Payment Date and shall be calculated on the basis of a three hundred sixty (360) day year and
actual days elapsed, other than for Base Rate Loans which shall be calculated on the basis of three
hundred sixty-five (365) or three hundred sixty-six (366) day year, as applicable, and actual days
elapsed. The interest rate on non-contingent Obligations (other than Eurodollar Rate Loans) shall
increase or decrease by an amount equal to each increase or decrease in the Base Rate effective on
the date any change in such Base Rate is effective. All interest accruing hereunder on and after
the date of any termination hereof shall be payable on demand.



          (b) Each Borrower (or Administrative Borrower on behalf of such Borrower) may from time to
time request that Base Rate Loans be converted to Eurodollar Rate Loans or that any existing
Eurodollar Rate Loans continue for an additional Interest Period. Such request from a Borrower (or
Administrative Borrower on behalf of such Borrower) shall specify the amount of the Eurodollar Rate
Loans or the amount of the Base Rate Loans to be converted to Eurodollar Rate Loans or the amount
of the Eurodollar Rate Loans to be continued (subject to the limits set forth below) and the
Interest Period to be applicable to such Eurodollar Rate Loans (and if it does not specify an
Interest Period, the Interest Period shall be deemed to be a one (1) month period). Subject to the
terms and conditions contained herein, three (3) Business Days after receipt by Agent of such a
request from a Borrower (or Administrative Borrower on behalf of such Borrower) which may be
telephonic and followed by a confirmation in writing in the form provided by Agent to
Administrative Borrower (and followed by a confirmation in writing if requested by Agent), Base
Rate Loans shall be converted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall
continue, as the case may be; provided, that, (i) no Default or Event of Default
shall exist or have occurred and be continuing, (ii) the Maturity Date is more than one (1) month
after the date of the conversions, (iii) no more than seven (7) Interest Periods may be in effect
at any one time, and (iv) the aggregate amount of the Eurodollar Rate Loans must be in an amount
not less than $1,000,000 or an integral multiple of $500,000 in excess thereof. Any request by or
on behalf of a Borrower for Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans or to continue any existing Eurodollar Rate Loans shall be irrevocable.



          (c) Any Eurodollar Rate Loans shall automatically convert to Base Rate Loans upon the last day
of the applicable Interest Period, unless Agent has received and approved a request to continue
such Eurodollar Rate Loan at least three (3) Business Days prior to such last day in accordance
with the terms hereof and Borrowers are entitled to such Eurodollar Rate Loan under the terms
hereof. Any Eurodollar Rate Loans shall, at Agent’s option, upon notice by Agent to Borrower (or
Administrative Borrower on behalf of such Borrower), be subsequently converted to Base Rate Loans
in the event that this Agreement shall terminate. Borrowers shall pay to Agent, upon demand by
Agent (or Agent may, at its option, charge any loan account of any Borrower) any amounts required
to compensate Agent or Participant for any reasonable loss (excluding loss of anticipated profits),
cost or expense incurred by such person, as a result of the conversion of Eurodollar Rate Loans to
Base Rate Loans other than the conversion on the last day of any Interest Period with respect
thereto.



     3.2 Fees.



          (a) Borrowers shall pay to Agent, for the account of Lenders, monthly an unused line fee at a
rate equal to: (i) until six (6) full calendar months after the date hereof shall have elapsed,
one (1.00%) percent (on a per annum basis) calculated upon the amount by which the Maximum Credit
exceeds the average daily principal balance of the outstanding Revolving Loans and Letter of Credit
Obligations during the immediately preceding month (or part thereof) so long as any Obligations are
outstanding and (ii) from and after the date on which six (6) full calendar months after the date
hereof shall have elapsed (A) one (1.00%) percent (on a per annum basis) calculated upon the amount
by which the Maximum



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Credit exceeds the average daily principal balance of the outstanding Loans and Letter of
Credit Obligations during the immediately preceding month (or part thereof) so long as any
Obligations are outstanding and the Commitments hereunder have not been terminated, with respect to
each such month as to which the average daily outstanding balance of Loans and Letter of Credit
Obligations was less than fifty (50%) percent of the Maximum Credit and (B) three-quarters of one
(0.75%) percent (on a per annum basis) calculated upon the amount by which the Maximum Credit
exceeds the average daily principal balance of the outstanding Loans and Letter of Credit
Obligations during the immediately preceding month (or part thereof) so long as any Commitments are
outstanding, with respect to each such month as to which the average daily outstanding balance of
Loans and Letter of Credit Obligations was equal to or greater than fifty (50%) percent of the
Maximum Credit. If the Maximum Credit shall change during the immediately preceding month (or part
thereof), an average daily Maximum Credit shall be used for the purposes of calculating such fees
for such period. Such fees shall be payable on the first Business Day of each month in arrears,
beginning with the first full calendar month that commences following the date hereof (and
prorated, if the Closing Date is not the end of a calendar month, for the portion of the
immediately preceding month from the Closing Date to the end thereof), and calculated based on a
three hundred sixty (360) day year and actual days elapsed.



          (b) Borrowers shall pay to Agent, for the benefit of Lenders, quarterly a fee calculated at a
rate per annum equal to the Applicable Margin as to Revolving Loans bearing interest using the
Eurodollar Rate on the average daily outstanding balance of Letter of Credit Obligations for the
immediately preceding calendar quarter (or part thereof), payable in arrears as of the first day of
each calendar quarter; provided, that, Borrowers shall, at Agent’s option or at the
written direction of the Required Lenders, (i) pay such fees at a rate two (2%) percent greater
than such rate on such average daily maximum amount for the period from and after the date of
termination hereof until Lenders have received Payment in Full of all Obligations (notwithstanding
entry of a judgment against any Borrower or Guarantor) and (ii) upon written notice to
Administrative Borrower at any time that an Event of Default shall have occurred and be continuing,
pay such fees at a rate two (2%) percent greater than such rate on such average daily maximum
amount for the period from and after the date of such notice but only for so long as such Event of
Default is continuing. Such letter of credit fees shall be calculated on the basis of a three
hundred sixty (360) day year and actual days elapsed and the obligation of Borrowers to pay such
fee shall survive the termination or non-renewal of this Agreement. In addition to the letter of
credit fees provided above, Borrowers shall pay to Issuing Bank for its own account (without
sharing with Lenders) the letter of credit fronting fee of one hundred twenty-five thousandths of
one (0.125%) percent per annum payable quarterly in arrears and the other reasonable customary
charges from time to time of Issuing Bank with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings under, such Letters of Credit.



          (c) Borrowers shall pay to Agent and Wells Fargo the other reasonable fees and amounts set
forth in the Fee Letter in the amounts and at the times specified therein or as has otherwise been
agreed by or on behalf of Borrowers. To the extent payment in full of the applicable fee is
received by Agent from Borrowers on or about the date hereof, Agent shall pay to each Lender its
share of such fees in accordance with the terms of the arrangements of Agent with such Lender.



     3.3 Inability to Determine Applicable Interest Rate. If Agent shall determine in good faith (which determination shall, absent manifest error, be
final and conclusive and binding on all parties hereto) that on any date by reason of circumstances
affecting the London interbank market adequate and reasonable means do not exist for ascertaining
the interest rate applicable to Eurodollar Rate Loans, Agent shall on such date give notice to
Administrative Borrower and each Lender of such determination. Upon such date no Loans may be made
as, or converted to, Eurodollar Rate Loans until such time as Agent notifies Administrative
Borrower and Lenders that the
circumstances giving rise to such notice no longer



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exist and any request for Eurodollar Rate Loans
received by Agent shall be deemed to be a request, or a continuation or conversion, for or into
Base Rate Loans.



     3.4 Illegality. Notwithstanding anything to the contrary contained herein, if (a) any change in any law or
interpretation thereof by any Governmental Authority after the Closing Date makes it unlawful or
impractical for a Lender to make or maintain a Eurodollar Rate Loan, then such Lender shall give
notice thereof to Agent and Administrative Borrower and may (i) declare that Eurodollar Rate Loans
will not thereafter be made by such Lender, such that any request for a Eurodollar Rate Loans from
such Lender shall be deemed to be a request for a Base Rate Loan unless such Lender’s declaration
has been withdrawn (and it shall be withdrawn promptly upon the cessation of the circumstances
described above) and (ii) require that all outstanding Eurodollar Rate Loans made by such Lender be
converted to Base Rate Loans immediately, in which event all outstanding Eurodollar Rate Loans of
such Lender shall be so converted. This covenant shall survive the termination or non-renewal of
this Agreement and the payment of the Obligations.



     3.5 Increased Costs. (a) If any Change in Law shall: (i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender or the Issuing Bank;
(ii) subject any Lender or the Issuing Bank to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Rate
Loan made by it, or change the basis of taxation of payments to such Lender or the Issuing Bank in
respect thereof (except for Non-Excluded Taxes and taxes measured by or imposed upon net income, or
franchise taxes, or taxes measured by or imposed upon overall capital or net worth, or branch taxes
(in the case of such capital, net worth or branch taxes, imposed in lieu of such net income taxes);
or (iii) impose on any Lender or the Issuing Bank or the London interbank market any other
condition, cost or expense (in each case, excluding any taxes of any kind whatsoever) affecting
this Agreement or Eurodollar Rate 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 by an amount such Lender deems to be material of making or maintaining any Eurodollar Rate
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 of
maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the
amount of any sum received or receivable by such Lender or the Issuing Bank in respect thereof
(whether of principal, interest or any other amount) then, upon request of such Lender or the
Issuing Bank, 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, as the case may
be, for such additional costs incurred or reduction suffered.



          (b) In any such case described in Section 3.5(a), such Borrower may elect to convert the
Eurodollar Rate Loans made by such Lender hereunder to Base Rate Loans by giving Agent at least one
(1) Business Day’s notice of such election, in which case such Borrower shall promptly pay to such
Lender, upon demand, without duplication, amounts theretofore required to be paid to such Lender
pursuant to this Section 3.5 and such amounts, if any, as may be required pursuant to Section 3.10.
If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it
shall provide prompt notice thereof to Administrative Borrower, through Agent, certifying (i) that
one of the events described in this Section 3.5 has occurred and describing in reasonable detail
the nature of such event, (ii)as to the increased cost or reduced amount resulting from such event
and (iii) as to the additional
amount demanded by such Lender and a reasonably detailed explanation of the calculation
thereof. Such a certificate as to any additional amounts payable pursuant to this subsection
submitted by such Lender, through Agent, to Administrative Borrower shall be conclusive in the
absence of manifest error. Borrowers shall pay such Lender the amount shown as due on any such
certificate within ten (10) days



65









 







after receipt thereof in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.



     3.6 Capital Requirements. If any Lender or the Issuing Bank determines that any Change in Law affecting such Lender or
the Issuing Bank or any lending office of such Lender or such Lender’s or the Issuing Bank’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 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 by an amount such Lender deems to be material (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 within ten
(10) Business Days after submission by such Lender to the Borrowers (with a copy to Agent) of a
written request therefor certifying (a) that one of the events described in this Section 3.6 has
occurred and describing in reasonable detail the nature of such event, (b) as to the reduction of
the rate of return on capital resulting from such event and (c) as to the additional amount or
amounts demanded by such Lender or corporation and a reasonably detailed explanation of the
calculation thereof, the applicable Borrower shall 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. Such a
certificate as to any additional amounts payable pursuant to this subsection submitted by such
Lender or Issuing Bank, through the Administrative Agent, to the Borrowers shall be conclusive in
the absence of manifest error.



     3.7 Delay in Requests. Borrowers and Guarantors shall not be required to compensate Agent, a Lender or the Issuing
Bank pursuant to Sections 3.5, 3.6 or 6.8 for any increased costs or other payments incurred or
reductions occurring more than one hundred eighty (180) days prior to the date that Agent, such
Lender or the Issuing Bank, as the case may be, becomes aware of the event giving rise to Agent’s,
such Lender’s or Issuing Bank’s claim for compensation therefor (except that, if the Change in Law
giving rise to such claim is retroactive, then the one hundred eighty (180) day period referred to
above shall be extended to include the period of retroactive effect thereof).



     3.8 Mitigation; Replacement of Lenders.



          (a) If any Lender requests compensation under Sections 3.4, 3.5 or 3.6, or Borrowers are
required to make any payment to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 6.8, then such Lender shall, if requested by Administrative Borrower,
use reasonable efforts (subject to overall policy considerations of such Lender) to designate a
different lending office for funding or booking its Loans hereunder, to assign its rights and
obligations hereunder to another of its offices, branches or affiliates or to take such other
actions as such Lender or Agent determines, if, in the judgment of such Lender, such designation,
assignment or other action (i) would eliminate or reduce amounts payable pursuant to such Sections
in the future and (ii) would not subject Agent or such Lender to any unreimbursed cost or expense
and Agent or such Lender would not suffer
any economic, legal or regulatory disadvantage. Nothing in this Section 3.8 shall affect or
postpone any of the obligations of Borrowers or the rights of Agent or such Lender pursuant to this
Section 3.8. Borrowers hereby agree to pay on demand all reasonable costs and expenses incurred by
Agent or any Lender in connection with any such designation or assignment.



          (b) If any Lender requests compensation under Sections 3.4, 3.5 or Section 3.6 hereof, or
Borrowers are required to make any payment to any Lender or Governmental Authority for the account
of



66









 







any Lender pursuant to Section 6.8, then within sixty (60) days thereafter, Administrative
Borrower may, at its sole expense and effort, upon notice to such Lender and Agent, replace such
Lender by requiring such Lender to assign and delegate (and such Lender shall be obligated to
assign and delegate), without recourse (in accordance with and subject to the restrictions
contained in Section 15.7), all of its interests, rights and obligations under this Agreement to an
Eligible Transferee that shall assume such obligations; provided, that, (i)
Administrative Borrower has received the prior written consent of Agent and Issuing Bank to the
extent required under Section 15.7 hereof, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal amount of its Loans and participations in Letter of
Credit Obligations and Swing Line Loans that it has funded, if any, accrued interest thereon,
accrued fees and other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal) and Administrative Borrower (in the case of accrued interest, fees and other
amounts, including amounts under Section 3.9), and (iii) such assignment will result in a reduction
in such compensation and 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 the Administrative Borrower to require such assignment and delegation cease
to apply.



     3.9 Funding Losses. Borrowers shall pay to each Lender all losses, expenses and liabilities (including any
interest paid by such Lender to lenders of funds borrowed by it to make or carry its Eurodollar
Rate Loans and any loss, expense or liability sustained by such Lender in connection with the
liquidation or redeployment of such) that it sustains (a) by reason of a default by any Borrower in
connection with the making of any Eurodollar Rate Loan that does not occur on a date specified
therefor in a request for borrowing, or a conversion to, any Eurodollar Rate Loan that does not
occur on a date specified therefor in a request for conversion or continuation, (b) if any
prepayment or other principal payment of any of its Eurodollar Rate Loans occurs on a date prior to
the last day of an Interest Period applicable to such Loan, or (c) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of prepayment given by a
Borrower. This covenant shall survive the termination or non-renewal of this Agreement and the
payment of the Obligations.



     3.10 Maximum Interest. Notwithstanding anything to the contrary contained in this Agreement or any of the other
Financing Agreements, in no event whatsoever shall the aggregate of all amounts that are contracted
for, charged or received by Agent or any Lender pursuant to the terms of this Agreement or any of
the other Financing Agreements and that are deemed interest under applicable law exceed the Maximum
Interest Rate (including, to the extent applicable, the provisions of Section 5197 of the Revised
Statutes of the United States of America as amended, 12 U.S.C. Section 85, as amended). In no
event shall any Borrower or Guarantor be obligated to pay interest or such amounts as may be deemed
interest under applicable law in amounts which exceed the Maximum Interest Rate. In the event any
Interest is charged or received in excess of the Maximum Interest Rate (the “Excess”), each
Borrower and Guarantor acknowledges and stipulates that any such charge or receipt shall be the
result of an accident and bona fide error, and that any Excess received by Agent or any Lender
shall be applied, first, to the payment of the then outstanding and unpaid principal hereunder;
second to the payment of the other Obligations then outstanding and
unpaid; and third, returned to such Borrower or Guarantor. All monies paid to Agent or any Lender
hereunder or under any of the other Financing Agreements, whether at maturity or by prepayment,
shall be subject to any rebate of unearned interest as and to the extent required by applicable
law. For the purpose of determining whether or not any Excess has been contracted for, charged or
received by Agent or any Lender, all interest at any time contracted for, charged or received from
any Borrower or Guarantor in connection with this Agreement or any of the other Financing
Agreements shall, to the extent permitted by applicable law, be amortized, prorated, allocated and
spread during the entire term of this Agreement in accordance with the amounts outstanding from
time to time hereunder and the Maximum Interest Rate from time to time in effect in order to
lawfully charge the maximum amount of interest permitted under applicable laws. The provisions of
this Section 3.10 shall



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be deemed to be incorporated into each of the other Financing Agreements
(whether or not any provision of this Section is referred to therein).



     3.11 No Requirement of Match Funding. Notwithstanding anything to the contrary contained herein, Agent and Lenders shall not be
required to acquire US Dollar deposits in the London interbank market or any other offshore US
Dollar market to fund any Eurodollar Rate Loan or to otherwise match fund any Obligations as to
which interest accrues based on the Adjusted Eurodollar Rate. All of the provisions of this
Section 3 shall be deemed to apply as if Agent, each Lender or any Participant had acquired such
deposits to fund any Eurodollar Rate Loan or any other Obligation as to which interest is accruing
at the Adjusted Eurodollar Rate by acquiring such US Dollar deposits for each Interest Period in
the amount of the Eurodollar Rate Loans or other applicable Obligations.



SECTION 4. CONDITIONS PRECEDENT




     4.1 Conditions Precedent to Initial Loans and Letters of Credit. The obligation of Lenders to make the initial Loans and of Issuing Bank to provide for the
initial Letters of Credit hereunder is subject to the satisfaction of, or waiver of, immediately
prior to or concurrently with the making of such Loan or the issuance of such Letter of Credit of
each of the following conditions precedent:



          (a) Agent shall have received evidence that:



               (i) Borrowers have received not less than $250,000,000 in cash as an equity contribution from
the CD&R Investors in exchange for Equity Interests in the form of preferred stock of Parent, on
terms and conditions substantially as provided in the Investment Documents or otherwise reasonably
acceptable to Agent;



               (ii) a portion of the existing Term Loan Debt shall have been repaid, so that after giving
effect to all payments in respect of the Term Loan Documents, the outstanding principal balance of
the Term Loan Debt thereunder will not exceed $150,000,000 as of the date hereof;



               (iii) the Administrative Agent shall receive, substantially concurrently with the satisfaction
of the other conditions precedent set forth in this Section 4.1, evidence reasonably satisfactory
to it, that the Parent shall have accepted for redemption the tender of Convertible Notes in an
aggregate principal amount not less than $171,000,000 and placed sufficient funds in a segregated
account to pay the maximum consideration necessary to redeem all of the Convertible Notes not so
redeemed pursuant to the terms of the Indenture;



          (b) Agent shall have received true, complete and correct copies of the Investment Documents
and the transactions provided for therein shall have been consummated, or substantially
concurrently with the initial Loans hereunder shall be consummated, substantially in accordance
with the Investment Documents and all material conditions precedent to the consummation of such
transactions set forth in the Investment Documents shall have been satisfied or waived;



          (c) Agent shall have received true, complete and correct copies of the Term Loan Documents
(including any amendment or amendment and restatement thereof on or about the date hereof, but
excluding any Mortgages executed and delivered after the date hereof), as executed and delivered by
the parties thereto, which shall be in form and substance reasonably satisfactory to Agent;



          (d) Agent shall have received, in form and substance reasonably satisfactory to Agent, the
Intercreditor Agreement, duly authorized, executed and delivered by the Term Loan Agent for itself
and on behalf other Term Loan Lenders and acknowledged by each Borrower and Guarantor;



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          (e) all requisite corporate resolutions or equivalent action by Borrowers and Guarantors in
connection with this Agreement and the other Financing Agreements shall be reasonably satisfactory
in form and substance to Agent, and Agent shall have received such resolutions or records of
equivalent action, certified where requested by Agent or its counsel by appropriate corporate
officers of Borrowers and Guarantors and a copy of the certificate of incorporation or formation of
each Borrower and Guarantor certified by the applicable Secretary of State (or equivalent
Governmental Authority) which shall set forth the same complete corporate name of such Borrower or
Guarantor as is set forth herein;



          (f) Agent shall have received a certificate of each Borrower and Guarantor, dated the Closing
Date, as to the incumbency and signature of the officers of such Borrower or Guarantor executing
any of the Financing Agreements, reasonably satisfactory in form and substance to Agent executed by
a Responsible Officer and the Secretary or any Assistant Secretary of such Borrower or Guarantor;



          (g) No material adverse change shall have occurred in the business, operations or assets of
Borrowers or Guarantors since November 2, 2008 and no change or event shall have occurred which
would impair in any material respect the ability of any Borrower or Guarantor to perform its
payment obligations hereunder or under any of the other Financing Agreements to which it is a party
or of Agent to enforce the Obligations or realize upon the Collateral for itself and for the
benefit of the Secured Parties;



          (h) Agent shall have completed an updated field review of the Records (including, without
limitation, current perpetual inventory records and/or roll-forwards of Accounts and Inventory
through the date of closing and test counts of the Inventory), the results of which shall be
consistent in all material respects with the information received in the prior field examinations
conducted by Agent taken as a whole or to the extent not consistent shall be otherwise reasonably
satisfactory to Agent, not more than five (5) Business Days prior to the date hereof or such
earlier date as Agent may agree;



          (i) Agent shall have received all consents, waivers, acknowledgments and other agreements
(other than Collateral Access Agreements), in form and substance reasonably satisfactory to Agent,
from third persons necessary in order to permit, protect and perfect the Liens of Agent upon the
Collateral or to effectuate the provisions or purposes of this Agreement and the other Financing
Agreements;



          (j) Borrowers and Guarantors shall have used commercially reasonable efforts to obtain
Collateral Access Agreements (it being understood that Borrowers shall not be required to incur any
expense, provide any security or agree to any adverse term or condition exclusively and directly
required in order to obtain such Collateral Access Agreement) and to the extent not delivered prior
to the date
hereof Borrowers shall continue to use such efforts hereafter to obtain such Collateral Access
Agreements for a reasonable period thereafter, and in any event not more than thirty (30) days
after the date hereof;



          (k) Agent shall have received, in form and substance reasonably satisfactory to Agent, Deposit
Account Control Agreements by and among Agent, each Borrower and Guarantor, as the case may be and
each bank where such Borrower (or Guarantor) has a deposit account as contemplated by Section 6.6
hereof, in each case, duly authorized, executed and delivered by such bank and Borrower or
Guarantor, as the case may be, for each of the deposit accounts of Borrowers and Guarantors,
including the Concentration Account and the deposit account(s) used for Qualified Cash, but
excluding (i) any deposit accounts where the balance is, and is reasonably anticipated at all times
to be, less than $100,000, but only to the extent that the aggregate amount of funds in all such
deposit accounts is less than $500,000, (ii) any deposit account that is specifically and
exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of any Borrower’s or Guarantor’s employees, (iii) any disbursement account, (iv)any
account containing collateral to secure the obligations of Borrowers and Guarantors with respect to
the Existing Letters of Credit, and (v) the account at



69









 







Wachovia Securities Special Equities Group
in the NCI Building Systems, Inc., account number [intentionally omitted], to the extent that no new deposits are
made in such account after the date hereof.



          (l) Agent shall have received evidence, in form and substance reasonably satisfactory to
Agent, that as of the date hereof and after giving effect to the application of proceeds of the
initial Revolving Loans, the restructuring of the Term Loan Documents, the repayment of a portion
of the Convertible Notes and the establishment of the Convertible Note Account for the remaining
balance) and the other Transactions and after provision for payment of all fees and expenses of the
Transactions (i) the sum of Excess Availability plus unrestricted cash and Cash Equivalents of
Borrowers (other than Qualified Cash) shall be not less than $90,000,000 and (ii) the sum of the
aggregate amount of Loans and Letters of Credit requested and made or outstanding as of the Closing
Date shall not exceed $20,000,000.



          (m) Agent shall have received evidence, in form and substance reasonably satisfactory to
Agent, that Agent has valid and perfected first priority security interests in all of the Working
Capital Priority Collateral (as defined in the Intercreditor Agreement) and valid, perfected second
priority security interests in all of the Term Loan Priority Collateral (to the extent provided
herein), except, in each case, as to (i) Excluded Property, (ii) priority, subject to Permitted
Liens, to the extent (in the case of Working Capital Priority Collateral (as defined in the
Intercreditor Agreement)) that such liens have priority over the liens of Agent under applicable
law or under the terms of a written agreement to which Agent is a party, (iii) any deposit
accounts, to the extent that Agent has not required a Deposit Account Control Agreement pursuant to
the terms hereof, (iv) Intellectual Property constituting Collateral, until the filings identified
in Section 8.14 are made and accepted, and (v) all Real Property constituting Collateral, if
Administrative Borrower has used commercially reasonable efforts to provide the Mortgages but
completion thereof may not be accomplished on the Closing Date, then delivery of the Mortgages
shall not constitute a condition precedent to the Closing Date if the Administrative Borrower
agrees to deliver or cause to be delivered the Mortgages, and takes or causes to be taken such
other actions to as may be reasonably necessary to perfect the security interests of such
Mortgages;



          (n) Agent shall have received and reviewed UCC, tax and judgment lien search results for the
location of each Borrower and Guarantor (determined in accordance with the Uniform Commercial Code
of the applicable jurisdiction and any other applicable law) and all counties and provinces in
which property or assets of Borrowers and Guarantors are located, which search results shall not
disclose any Liens other than the Permitted Liens;



          (o) Agent shall have received, in similar form as and to the extent received as of the Closing
Date by the Term Loan Agent, a title insurance policy issued by a title insurance company and to
the extent acceptable to Term Loan Agent;



          (p) Agent shall have received a borrowing request, if applicable, and a Borrowing Base
Certificate setting forth the Loans and Letters of Credit available to Borrowers as of the last day
of the most recent month ended prior to the date hereof as completed in a manner reasonably
satisfactory to Agent and duly authorized, executed and delivered on behalf of Borrowers;



          (q) Agent shall have received any updates or modifications to the projected financial
statements of Borrowers and Guarantors previously delivered to Agent on October 14, 2009 based on
actuals as of August 2, 2009, in each case, containing information that is reasonably satisfactory
to Agent and in a form consistent with the information received by Agent and Lenders prior to the
date hereof, and otherwise reasonably satisfactory to Agent;



70









 





          (r) Agent shall have received evidence of insurance and loss payee endorsements required
hereunder and under the other Financing Agreements, in form and substance reasonably satisfactory
to Agent, and certificates of insurance policies and/or endorsements naming Agent as loss payee;



          (s) Agent shall have received, each in form and substance reasonably satisfactory to Agent,
the following opinion letters of counsel(s) to Borrowers and Guarantors:



               (i) the executed legal opinion of Debevoise & Plimpton LLP, special New York counsel to CD&R
Associates VIII, Ltd., the general partner to Clayton, Dubilier & Rice Fund VIII, L.P.;



               (ii) the executed legal opinion of Richards, Layton & Finger, P.A., special Delaware counsel
to NCI Systems, Inc. and Robertson-Ceco II Corporation;



               (iii) the executed legal opinion of Holland & Hart LLP, special Nevada counsel to NCI Group,
Inc.; and



               (iv) to the extent received by the Term Loan Agent as of the Closing Date, the executed legal
opinion of counsel to the owner of the Real Property subject to a Mortgage;



          (t) Agents and Lenders shall have received all fees and expenses reasonably required to be
paid or delivered by Borrowers to them in respect of the Transaction on or prior to the Closing
Date, including the fees referred to in Section 3.2; and



          (u) Agent shall have received the other Financing Agreements to be executed and delivered on
the Closing Date as duly executed and delivered by the parties thereto to Agent.


Without limiting the generality of the provisions of Section 14.3 for purposes of determining
compliance with the conditions specified in this Section 4.1, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Agent shall have received notice from such Lender prior to the date
hereof specifying its objection thereto.



The execution and delivery hereof by Lenders hereunder shall conclusively be deemed to constitute
an acknowledgment by Agent and each Lender that each of the conditions precedent set forth in this
Section
4.1 shall have been satisfied in accordance with its respective terms or shall have been
irrevocably waived by such Person.




     4.2 Conditions Precedent to All Loans and Letters of Credit. The obligation of Lenders to make the Loans, including the initial Loans, or of Issuing Bank
to issue any Letter of Credit, including the initial Letters of Credit, is subject to the further
satisfaction of, or waiver of, immediately prior to or concurrently with the making of each such
Loan or the issuance of such Letter of Credit of each of the following conditions precedent:



          (a) each of the representations and warranties of Borrowers and Guarantors contained herein
and in the other Financing Agreements shall be true and correct in all material respects, in each
case with the same effect as though such representations and warranties had been made on and as of
the date of the making of each such Loan or providing each such Letter of Credit and after giving
effect thereto, except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties shall have been true
and correct to the extent required hereunder or under the other Financing Agreements on and as of
such earlier date);



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          (b) no law, regulation, order, judgment or decree of any Governmental Authority shall exist,
and no action, suit, investigation, litigation or proceeding shall be pending or to the best of the
knowledge of any Responsible Officer of any Borrower or Guarantor, threatened in any court or
before any arbitrator or Governmental Authority, which purports to enjoin, prohibit, restrain or
otherwise affect the making of the Loans or providing the Letters of Credit;



          (c) no Default or Event of Default shall exist or have occurred and be continuing on and as of
the date of the making of such Loan or providing each such Letter of Credit and after giving effect
thereto;



          (d) if, after giving effect to such Loan or the issuance of such Letter of Credit, Excess
Availability would be less than $15,000,000, then the Consolidated Fixed Charge Coverage Ratio of
Parent and its Subsidiaries (on a consolidated basis) determined as of the end of the fiscal month
most recently ended for which Agent has received financial statements shall be not less than 1.0 to
1.0 for the period of the immediately preceding twelve (12) consecutive fiscal months prior to such
fiscal month end;



          (e) each Borrower is Solvent as of the making of such Loan or issuance of such Letter of
Credit and after giving effect thereto; and



          (f) with respect to any Loan, Agent shall have received a request for such Loan as required by
Section 2.4 (or such request shall have been deemed given in accordance with Section 2.3) and with
respect to the issuance of any Letter of Credit, each of Agent and Issuing Bank shall have received
the request and other documents required under Section 2.3.


Each borrowing of Loans by and each Letter of Credit issued on behalf of any Borrower hereunder
shall constitute a representation and warranty by Borrowers and Guarantors as of the date of such
borrowing or such issuance that the conditions contained in this Section 4.2 have been satisfied
(including, to the extent provided herein, with respect to the initial Loans hereunder).




SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST




     5.1 Grant of Security Interest. To secure payment and performance when due of all of its Obligations and all of its
obligations under the Guaranty Agreement, each Borrower and Guarantor hereby grants to Agent, for
itself and the benefit of the other Secured Parties, a continuing security interest in and Lien
upon, the following items and types of personal property of such Borrower and Guarantor, whether
now owned or hereafter acquired or existing, and wherever located (together with all other
collateral security for the Obligations at any time granted to or held or acquired by Agent or any
Lender including, but not limited to, the Mortgage Fee Properties, collectively, the “Collateral”),
including all of such Borrower’s and Guarantor’s right, title and interest in and to the following:



          (a) all Accounts;



          (b) all general intangibles, including, without limitation, (i) all Intellectual Property and
(ii) goodwill associated with the Intellectual Property consisting of trademarks;



          (c) all goods, including, without limitation, Inventory and Equipment;



          (d) all fixtures;



          (e) all chattel paper, including, without limitation, all tangible and electronic chattel
paper;



          (f) all instruments, including, without limitation, all promissory notes;




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          (g) all documents;



          (h) all deposit accounts;



          (i) all letters of credit, banker’s acceptances and similar instruments and including all
letter-of-credit rights;



          (j) all Receivables and all supporting obligations and all present and future liens, security
interests, rights, remedies, title and interest in, to and in respect of Receivables and other
Collateral, including (i) rights and remedies under or relating to guaranties, contracts of
suretyship, letters of credit and credit and other insurance related to the Collateral, (ii) rights
of stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) goods described in invoices, documents, contracts or
instruments with respect to, or otherwise representing or evidencing, Receivables or other
Collateral, including returned, repossessed and reclaimed goods, and (iv) deposits by and property
of account debtors or other persons securing the obligations of account debtors;



          (k) all (i) investment property (including securities, whether certificated or uncertificated,
securities accounts, security entitlements, commodity contracts or commodity accounts) and (ii)
monies, credit balances, deposits and other property of any Borrower or Guarantor now or hereafter
held or received by or in transit to Agent, any Lender or its Affiliates or at any other depository
or other institution from or for the account of any Borrower or Guarantor, whether for safekeeping,
pledge, custody, transmission, collection or otherwise;



          (l) all commercial tort claims existing on the date hereof, including, without limitation,
those identified on Schedule 5.1 hereto;



          (m) all Records; and



          (n) all products and proceeds of the foregoing, in any form, including insurance proceeds and
all claims against third parties for loss or damage to or destruction of or other involuntary
conversion of any kind or nature of any or all of the other Collateral.



     5.2 Perfection of Security Interests.



          (a) Each Borrower and Guarantor irrevocably and unconditionally authorizes Agent (or its
agent) to file (for itself and the benefit of the Secured Parties) on behalf of such Borrower or
Guarantor at any time and from time to time such financing statements with respect to the
Collateral of such Borrower or Guarantor naming Agent or its designee as the secured party and such
Borrower or Guarantor as debtor, as Agent may reasonably require to evidence the security interest
granted to the Agent under the Financing Agreements to the extent provided therein, and including
any other information with respect to such Borrower or Guarantor or otherwise required by part 5 of
Article 9 of the Uniform Commercial Code of such jurisdiction as Agent may reasonably determine,
together with any amendment and continuations with respect thereto, which authorization shall apply
to all financing statements filed on, prior to or after the date hereof. Each Borrower and
Guarantor hereby ratifies and approves all financing statements naming Agent or its designee as
secured party and such Borrower or Guarantor, as the case may be, as debtor with respect to the
Collateral of such Borrower or Guarantor (and any amendments with respect to such financing
statements) filed by or on behalf of Agent prior to the date hereof and ratifies and confirms the
authorization of Agent to file such financing statements (and amendments, if any). Each Borrower
and Guarantor hereby authorizes Agent to adopt on behalf of such Borrower and Guarantor any symbol
required for authenticating any electronic filing. In the event that the description of the
collateral



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in any financing statement naming Agent or its designee as the secured party and any Borrower
or Guarantor as debtor includes assets and properties of such Borrower or Guarantor that do not at
any time constitute Collateral, whether hereunder, under any of the other Financing Agreements or
otherwise, the filing of such financing statement shall nonetheless be deemed authorized by such
Borrower or Guarantor to the extent of the Collateral included in such description and it shall not
render the financing statement ineffective as to any of the Collateral or otherwise affect the
financing statement as it applies to any of the Collateral. In no event shall any Borrower or
Guarantor at any time file, or permit or cause to be filed, any correction statement or termination
statement with respect to any financing statement (or amendment or continuation with respect
thereto) naming Agent or its designee as secured party and such Borrower or Guarantor as debtor,
without the prior written consent of Agent, except with respect to any release of any Lien in
assets or properties that do not constitute Collateral.



          (b) Each Borrower and Guarantor does not have any chattel paper (whether tangible or
electronic) or instruments as of the date hereof, except as set forth in Schedule 5.1
hereto (which schedule may omit any bills of sale or purchase orders entered into by Borrowers in
the ordinary course of their business). Each Borrower or Guarantor shall (except as provided in
the following sentences) be entitled to retain possession of all Collateral of such Borrower or
Guarantor evidenced by any instrument or tangible chattel paper, and shall hold all such Collateral
in trust for Agent, for the benefit of the Secured Parties. In the event that any Borrower or
Guarantor shall receive any chattel paper (other than bills of sale or purchase orders entered into
by the Borrower in the ordinary course of business (without limitation to the obligations of the
Borrowers under Section 7.1(a)) or instrument having a face or principal amount in excess of
$3,000,000 in any one case or $5,000,000 in the aggregate after the date hereof, Borrowers and
Guarantors shall promptly notify Agent thereof in writing. Such Borrower or Guarantor shall
deliver, or cause to be delivered, to Agent (or the Term Loan Agent or any Additional Agent or such
other agent as may be provided for under the Intercreditor Agreement and subject to the terms
thereof), all tangible chattel paper (other than bills of sale or purchase orders entered into by
Borrowers in the ordinary course of their business) and instruments that such Borrower or Guarantor
has or may at any time acquire (i) having a face or principal amount in excess of $3,000,000 in any
one case or $5,000,000 in the aggregate, promptly upon the receipt thereof by or on behalf of any
Borrower or Guarantor (including by any agent or representative), except as Agent may otherwise
agree and (ii) promptly upon request by Agent, in accordance with the Intercreditor Agreement, if
an Event of Default has occurred and is continuing, in each case accompanied by such instruments of
transfer or assignment duly executed in blank as Agent may from time to time reasonably specify,
subject to the terms of the Intercreditor Agreement. At Agent’s option, and subject to the terms
of the Intercreditor Agreement, each Borrower and Guarantor shall, or Agent may at any time on
behalf of any Borrower or Guarantor, cause the original of any such instrument or chattel paper
(other than bills of sale or purchase orders entered into by Borrowers in the ordinary course of
their business) to be conspicuously marked in a form and manner reasonably acceptable to Agent with
the following legend referring to chattel paper or instruments as applicable: “This [chattel
paper][instrument] is subject to the security interest of Wells Fargo Foothill, LLC as Agent and
any sale, transfer, assignment or encumbrance of this [chattel paper][instrument] violates the
rights of such secured party.”



          (c) In the event that any Borrower or Guarantor shall at any time hold or acquire an interest
in any electronic chattel paper (other than bills of sale or purchase orders entered into by
Borrowers in the ordinary course of their business) or any “transferable record” (as such term is
defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or
in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction)
having a face or principal amount in excess of $3,000,000 in any one case or $5,000,000 in the
aggregate, such Borrower or Guarantor shall promptly notify Agent thereof in writing. Promptly
upon Agent’s request, and subject to the terms of the Intercreditor Agreement, such Borrower or
Guarantor shall take, or cause to be taken, such actions as Agent may reasonably request to give
Agent control of (i) electronic chattel paper (other than bills of sale



74









 







or purchase orders entered into by Borrowers in the ordinary course of their business) and
transferable records in excess of $3,000,000 in any one case or $5,000,000 in the aggregate and
(ii) all electronic chattel paper (other than bills of sale or purchase orders entered into by
Borrowers in the ordinary course of their business) and transferable records, if an Event of
Default shall have occurred and be continuing, in each case under Section 9-105 of the UCC and
under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as
the case may be, Section 16 of the Uniform Electronic Transactions Act, as in effect in such
jurisdiction.



          (d) Borrowers and Guarantors shall not, directly or indirectly, after the date hereof open,
establish or maintain any deposit account unless each of the following conditions is satisfied:
(i) Agent shall have received notice of the opening or establishment of such deposit account as
required pursuant to Section 7.1(a)(ii); provided, that, at any time a Dominion
Event exists, Agent shall have received not less than five (5) Business Days prior written notice
of the intention of any Borrower or Guarantor to open or establish such account (except that no
notice shall be required, regardless of whether any Dominion Event exists, with respect to any
deposit account where the daily balance is expected to be at no time greater than $100,000 in such
deposit account, but only to the extent that the aggregate daily balance of funds in all such new
deposit accounts not previously notified to Agent is not greater than $500,000 or, for a period not
to exceed three (3) Business Days, such aggregate daily balance of funds is greater than $500,000
but less than or equal to $2,500,000 as a result of inadvertent deposits made to such accounts in
error or in order to facilitate the issuance of payroll checks in exigent circumstances or in order
to facilitate the issuance of payroll checks in exigent circumstances), which notice shall specify
in reasonable detail the name of the account, the owner of the account, the name and address of the
bank at which such account is to be opened or established, the individual at such bank with whom
such Borrower or Guarantor is dealing and the purpose of the account, (ii) the bank where such
account is opened or maintained shall be reasonably acceptable to Agent, and (iii) on or before the
opening of such deposit account, Agent shall have received a Deposit Account Control Agreement with
respect to such deposit account duly authorized, executed and delivered by such Borrower or
Guarantor and the bank at which such deposit account is opened and maintained; except,
that, Borrowers and Guarantors shall not be required to deliver such Deposit Account
Control Agreements with respect to (A) any deposit accounts where the balance is, and shall at all
times be, less than $100,000, unless Agent shall request such Deposit Account Control Agreement at
any time a Dominion Event exists and only to the extent that the aggregate amount of funds in all
such deposit accounts is less than $500,000 or, for a period not to exceed three (3) Business Days,
is less than or equal to $2,500,000 as a result of inadvertent deposits made to such accounts in
error or in order to facilitate the issuance of payroll checks in exigent circumstances), (B) any
deposit account that is specifically and exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of any Borrower’s or Guarantor’s
employees, (C) any disbursement account, (D) any account containing collateral to secure the
obligations of Borrowers and Guarantors with respect to the Existing Letters of Credit, and (E) the
account at Wachovia Securities Special Equities Group in the NCI Building Systems, Inc., account
number [intentionally omitted], to the extent that no new deposits are made in such account after the date
hereof.



          (e) No Borrower or Guarantor owns or holds, directly or indirectly, beneficially or as record
owner or both, any investment property, as of the date hereof, or have any investment account,
securities account, commodity account or other similar account with any bank or other financial
institution or other securities intermediary or commodity intermediary as of the date hereof, in
each case except as set forth in Schedule 5.1.



               (i) In the event that any Borrower or Guarantor shall be entitled to or shall at any time
after the date hereof hold or acquire any certificated securities representing the Equity Interests
that are part of the Collateral, such Borrower or Guarantor shall promptly endorse, assign and
deliver the same to Agent (or the Term Loan Agent or any Additional Agent or such other agent as
may be provided for



75









 







under the Intercreditor Agreement and subject to the terms thereof), accompanied by such
instruments of transfer or assignment duly executed in blank as Agent may from time to time
reasonably specify. If any securities representing Equity Interests that are part of the
Collateral, now or hereafter acquired by any Borrower or Guarantor are uncertificated and are
issued to such Borrower or Guarantor or its nominee directly by the issuer thereof, such Borrower
or Guarantor shall immediately notify Agent thereof and shall use commercially reasonable efforts
as Agent may reasonably specify subject to the Intercreditor Agreement, either (A) to cause the
issuer to agree to comply with instructions from Agent as to such securities, without further
consent of any Borrower or Guarantor or such nominee, or (B) to arrange for Agent to become the
registered owner of the securities



               (ii) Borrowers and Guarantors shall not, directly or indirectly, after the date hereof open,
establish or maintain any investment account, securities account, commodity account or any other
similar account (other than a deposit account in accordance with Section 6.6 hereof) with any
securities intermediary or commodity intermediary unless each of the following conditions is
satisfied: (A) Agent shall have received not less than five (5) Business Days prior written notice
of the intention of such Borrower or Guarantor to open or establish such account which notice shall
specify in reasonable detail the name of the account, the owner of the account, the name and
address of the securities intermediary or commodity intermediary at which such account is to be
opened or established, the individual at such intermediary with whom such Borrower or Guarantor is
dealing and the purpose of the account, (B) the securities intermediary or commodity intermediary
(as the case may be) where such account is opened or maintained shall be reasonably acceptable to
Agent, and (C) on or before the opening of such investment account, securities account or other
similar account with a securities intermediary or commodity intermediary, such Borrower or
Guarantor shall as Agent may reasonably specify, subject to the terms of the Intercreditor
Agreement, either (1) execute and deliver, and cause to be executed and delivered to Agent (or the
Term Loan Agent or any Additional Agent or such other agent as may be provided for under the
Intercreditor Agreement and subject to the terms thereof), an Investment Property Control Agreement
with respect thereto duly authorized, executed and delivered by such Borrower or Guarantor and such
securities intermediary or commodity intermediary or (2) arrange for Agent to become the
entitlement holder with respect to such investment property on terms and conditions reasonably
acceptable to Agent.



          (f) Borrowers and Guarantors are not the beneficiary or otherwise entitled to any
Letter-of-Credit Rights with respect to any letter of credit, banker’s acceptance or similar
instrument as of the date hereof, except as set forth in Schedule 5.1. In the event that
any Borrower or Guarantor shall be entitled to, or shall receive, any letter-of-credit rights under
any letter of credit, banker’s acceptance or any similar instrument, as beneficiary thereof, having
a face value in excess of $1,000,000 in any one case or $2,500,000 in the aggregate for all letters
of credit payable in respect of accounts due from account debtors located in the United States or
$4,000,000 in the aggregate for all letters of credit payable in respect of accounts due from
account debtors located outside the United States (not to exceed $5,000,000 in the aggregate for
all such rights irrespective of the location of the applicable account debtors) after the date
hereof, such Borrower or Guarantor shall promptly notify Agent thereof in writing. Such Borrower
or Guarantor shall immediately, as Agent may reasonably specify subject to the terms of the
Intercreditor Agreement, use its commercially reasonable efforts to either (i) deliver, or cause to
be delivered to Agent (or the Term Loan Agent or any Additional Agent or such other agent as may be
provided for under the Intercreditor Agreement and subject to the terms thereof), with respect to
any such letter of credit, banker’s acceptance or similar instrument having a face value in excess
of $1,000,000 in any one case or $2,500,000 in the aggregate for all letters of credit payable in
respect of accounts due from account debtors located in the United States or $4,000,000 in the
aggregate for all letters of credit payable in respect of accounts due from account debtors located
outside the United States (not to exceed $5,000,000 in the aggregate for all such rights
irrespective of the location of the applicable account debtors), the written agreement of Issuing
Bank and any other nominated person obligated to make any payment in



76









 







respect thereof (including any confirming or negotiating bank), in form and substance
reasonably satisfactory to Agent, consenting to the assignment of the proceeds of the letter of
credit to Agent by such Borrower or Guarantor and agreeing to make all payments thereon directly to
Agent or as Agent may otherwise direct or (ii) cause Agent to become, at Borrowers’ expense, the
transferee beneficiary of the letter of credit, banker’s acceptance or similar instrument (as the
case may be).



          (g) Borrowers and Guarantors do not have any commercial tort claims as of the date hereof,
except as set forth in Schedule 5.1. In the event that any Borrower or Guarantor shall at
any time after the date hereof have any Commercial Tort Claims, such Borrower or Guarantor shall
promptly notify Agent thereof in writing, which notice shall (i) set forth in reasonable detail the
basis for and nature of such Commercial Tort Claim and (ii) include the express grant by such
Borrower or Guarantor to Agent of a security interest in such Commercial Tort Claim (and the
proceeds thereof). In the event that such notice does not include such grant of a security
interest, the sending thereof by such Borrower or Guarantor to Agent shall be deemed to constitute
such grant to Agent. Upon the sending of such notice, any Commercial Tort Claim described therein
shall constitute part of the Collateral and shall be deemed included therein. Without limiting the
authorization of Agent provided in Section 5.2(a) hereof or otherwise arising by the execution by
such Borrower or Guarantor of this Agreement or any of the other Financing Agreements, Agent is
hereby irrevocably authorized from time to time and at any time to file such financing statements
naming Agent or its designee as secured party and such Borrower or Guarantor as debtor, or any
amendments to any financing statements, covering any such Commercial Tort Claim as Collateral. In
addition, each Borrower and Guarantor shall promptly upon Agent’s request, execute and deliver, or
cause to be executed and delivered, to Agent (or the Term Loan Agent or any Additional Agent or
such other agent as may be provided for under the Intercreditor Agreement and subject to the terms
thereof) such other agreements, documents and instruments as Agent may reasonably require in
connection with such Commercial Tort Claim.



          (h) Borrowers and Guarantors do not have any Inventory or documents of title relating to
Inventory in the custody, control or possession of a third party as of the date hereof, except as
set forth in Schedule 5.1 and except for Inventory or documents of title relating to
Inventory in transit in the ordinary course of business of such Borrower or Guarantor and in the
possession of the carrier transporting such Inventory and except for Inventory or documents of
title relating to Inventory having a value not exceeding $3,000,000 in the aggregate. In the event
that any Inventory or documents of title relating to Inventory owned by any Borrower or Guarantor
is at any time after the date hereof in the custody, control or possession of any other person
except as provided in the foregoing sentence, such Borrower or Guarantor (or Administrative
Borrower on its behalf) shall promptly notify Agent thereof in writing. Promptly upon Agent’s
request, Borrowers and Guarantors shall use commercially reasonable efforts to deliver to Agent (or
the Term Loan Agent or any Additional Agent or such other agent as may be provided for under the
Intercreditor Agreement and subject to the terms thereof) a Collateral Access Agreement duly
authorized, executed and delivered by such person and the Borrower or Guarantor that is the owner
of such Inventory or documents of title (it being understood that Borrowers shall not be required
to incur any expense, provide any security or agree to any adverse term or condition required in
order to obtain such Collateral Access Agreement).



               (i) Borrowers and Guarantors shall use reasonable efforts to take any other actions reasonably
requested by Agent from time to time to cause the attachment and perfection of, in each case, to
the extent provided herein or in any other Financing Agreement, and the ability of Agent to
enforce, the security interest of Agent in any and all of the Collateral of such Borrower or
Guarantor, to the extent reasonably required by Agent, including, without limitation, (i)
executing, delivering and, where appropriate, filing financing statements and amendments relating
thereto under the UCC or other applicable U.S. law, to the extent, if any, that such Borrower’s or
Guarantor’s signature thereon is required therefor, and (ii) complying with any provision of any
statute, regulation or treaty of the United



77









 







States as to any Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of Agent to enforce, the security interest of Agent in such
Collateral, in each case, to the extent provided herein or in any other Financing Agreement.



     5.3 Special Provisions Relating to Collateral. Notwithstanding anything to the contrary contained in this Section 5, the types or items of
Collateral described in or covered by Sections 5.1 or 5.2 hereof and the term “Collateral” shall
not include any rights or interest in any Excluded Property or Excluded Real Properties.



     5.4 Intercreditor Relations. Notwithstanding anything herein to the contrary, it is the understanding of the parties that the
Liens granted pursuant to Section 5 herein with respect to all Term Loan Priority Collateral shall
be subject and subordinate to (a) the Liens granted to the Term Loan Agent for the benefit of the
holders of the Term Loan Debt to secure the obligations pursuant to the relevant Term Loan
Documents and (b) the Liens granted to any Additional Agent for the benefit of the holders of any
Additional Indebtedness (as defined in the Intercreditor Agreement) to secure the obligations
pursuant to the relevant Additional Documents (as defined in the Intercreditor Agreement, as an to
the extent provided in the Intercreditor Agreement. The Liens granted pursuant to Section 5 herein
with respect to all Working Capital Priority Collateral (as defined in the Intercreditor Agreement)
shall, prior to the Payment in Full of all Obligations and in accordance with the Intercreditor
Agreement, be senior and prior to (i) the Liens granted to the Term Loan Agent for the benefit of
the holders of the Term Loan Debt to secure the obligations pursuant to the relevant Term Loan
Documents and (ii) the Liens granted to any Additional Agent for the benefit of the holders of any
Additional Indebtedness to secure the obligations pursuant to the relevant Additional Documents, as
and to the extent provided in the Intercreditor Agreement. Each Secured Party acknowledges and
agrees that the relative priority of such Liens granted to Agent and any Additional Agent and the
Term Loan Agent may be determined solely pursuant to the Intercreditor Agreement, and not by
priority as a matter of law or otherwise. Notwithstanding anything herein to the contrary, the
Liens granted to Agent pursuant to this Agreement and the exercise of any right or remedy by Agent
or any other Secured Party hereunder are subject to the provisions of the Intercreditor Agreement.
In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern and control. Notwithstanding any other
provision hereof, prior to the payment in full of the obligations under the Term Loan Documents and
the obligations under any Additional Documents in accordance with the Intercreditor Agreement, any
obligation hereunder to physically deliver to Agent any Collateral shall be satisfied by causing
such Collateral to be physically delivered to Agent or the Term Loan Agent or any Additional Agent
or such other agent as may be provided for under the Intercreditor Agreement, as applicable, acting
as agent of Agent, to be held in accordance with the Intercreditor Agreement.



SECTION 6. COLLECTION AND ADMINISTRATION




     6.1 Borrowers’ Loan Accounts.
Agent shall maintain one or more loan account(s) on its books in which shall be recorded (a)
all Loans, Letters of Credit and other Obligations and the Collateral, (b) all payments made by or
on behalf of any Borrower or Guarantor and (c) all other appropriate debits and credits as provided
in this Agreement, including fees, charges, costs, expenses and interest. All entries in the loan
account(s) shall be made in accordance with Agent’s customary practices as in effect from time to
time.



     6.2 Statements.
Agent shall render to Administrative Borrower each month a statement setting forth the balance
in the Borrowers’ loan account(s) maintained by Agent for Borrowers pursuant to the provisions of
this Agreement, including principal, interest, fees, costs and expenses. Each such statement shall
be subject to subsequent adjustment by Agent but shall, absent manifest errors or omissions, be
considered correct and deemed accepted by Borrowers and Guarantors and conclusively



78









 







binding upon
Borrowers and Guarantors as an account stated except to the extent that Agent receives a written
notice from Administrative Borrower of any specific exceptions of Administrative Borrower thereto
within thirty (30) days after the date such statement has been received by Administrative Borrower.
Until such time as Agent shall have rendered to Administrative Borrower a written statement as
provided above, the balance in any Borrower’s loan account(s) as shown on Agent’s books maintained
in accordance with Section 6.1 hereof shall be prima facie evidence of the amounts due and owing to
Agent and Lenders by Borrowers and Guarantors, absent manifest error.



     6.3 Lenders’ Evidence of Debt.
Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the Obligations of each Borrower to such Lender, including the amounts of the Loans made
by it and each repayment and prepayment in respect thereof, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder. Any such records shall be
presumptively correct, absent manifest error; provided, that, the failure to make
any entry or any error in such records, shall not affect any Lender’s Commitments hereunder or the
Obligations in respect of any applicable Loans and in the event of any inconsistency between the
Register and any Lender’s records, the Register shall govern.



     6.4 Register.



          (a) Agent (or its agent or sub-agent appointed by it) shall maintain a register (the
“Register”) as an agent of Borrowers for the recordation of the names and addresses of Lenders and
the Commitments of, and principal amount of the Loans (the “Registered Loans”) and Letter of Credit
Obligations owing to each Lender from time to time. The Register, as in effect at the close of
business on the preceding Business Day, shall be available for inspection by Administrative
Borrower or any Lender (with respect to a Lender, solely with respect to the Obligations owing to
such Lender) at a reasonable time and from time to time upon reasonable prior notice. Agent shall
record, or cause to be recorded, in the Register, the Commitments and the Loans in accordance with
the provisions of Section 15.7 and Agent shall also maintain a copy of each Assignment and
Acceptance delivered to and accepted by it and shall modify the Register to give effect to each
Assignment and Acceptance, and any such recording shall be presumptively correct, absent manifest
error; provided, that, the failure to make any entry or any error in such records,
shall not affect any Lender’s Commitments or Obligations in respect of any Loan. Borrowers,
Guarantors, Agent and Lenders shall treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. Borrowers hereby designate and authorize
Agent, and Agent agrees, to maintain, or cause to be maintained as agent for Borrowers solely for
purposes of maintaining the Register as provided in this Section 6.4(a).



          (b) Each Lender that grants a participation shall maintain a register as a non-fiduciary agent
of Borrowers on which it enters the name and address of each Participant and the principal and
interest amount of each Participant’s interest in the Loans and Letters of Credit held by it (the
“Participant Register”). The entries in the Participant Register shall be conclusive, absent
manifest error, and such Lender shall treat each person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement notwithstanding any
notice to the contrary.



     6.5 Notes.
Each Lender may at any time request that the Loans made by it be evidenced by a promissory
note. In such event, Borrowers shall execute and deliver to such Lender a promissory note
substantially in the form of Exhibit G (with appropriate insertions as to payee, date and
principal amount) payable to such Lender. Thereafter, the Loans evidenced by such promissory note
and interest thereon, unless surrendered by the holder thereof, shall at all times (including after
assignment pursuant to Section 15.7) be represented by one or more promissory notes in such form
payable to the payee named therein.



     6.6 Cash Management; Collection of Proceeds of Collateral.



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          (a) Each Borrower and Guarantor shall establish and maintain, at its expense, deposit accounts
and cash management services of a type and on terms, and with the banks, set forth on Schedule
8.21 hereto and, subject to Section 5.2(d) hereof, such other banks as such Borrower or
Guarantor may hereafter select. In addition to the Concentration Account, as of the date hereof
Schedule 8.21 hereto identifies each of the deposit accounts at such banks that are used
for receiving receipts from particular locations of a Borrower or otherwise describes the nature of
the use of such deposit account by such Borrower or Guarantor (collectively, the “Cash Management
Accounts” and individually a “Cash Management Account”; provided, that, the term
“Cash Management Account” as used herein shall not include the deposit accounts described in
clauses (i), (ii), (iii), (iv) and (v) of this Section 6.6(a)). Borrowers and Guarantors shall
deliver, or cause to be delivered to Agent (or the Term Loan Agent or any Additional Agent or such
other agent as may be provided for under the Intercreditor Agreement and subject to the terms
thereof), a Deposit Account Control Agreement duly authorized, executed and delivered by each bank
where a Cash Management Account or Concentration Account is maintained and by the applicable
Borrower or Guarantor; except that Borrowers and Guarantors shall not be required
to deliver such Deposit Account Control Agreements with respect to (i) any deposit accounts where
the balance is, and shall at all times be, less than $100,000 (other than with respect to the
deposit of amounts not to exceed $2,500,000 in the aggregate for a period not to exceed three (3)
Business Days as a result of inadvertent deposits made to such accounts in error or in order to
facilitate the issuance of payroll checks in exigent circumstances); provided,
that, (A) the aggregate amount of funds in all such accounts is less than $500,000 (other
than with respect to the deposit of amounts not to exceed $2,500,000 in the aggregate for a period
not to exceed three (3) Business Days as a result of inadvertent deposits made to such accounts in
error or in order to facilitate the issuance of payroll checks in exigent circumstances) and/or (B)
no Event of Default exists and is continuing, and then only to the extent such Deposit Account
Control Agreement is requested by Agent in its Permitted Discretion, (ii) any deposit account that
is specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of any Borrower’s or Guarantor’s employees, (iii) any disbursement
account, (iv) any account containing collateral to secure the obligations of Borrowers and
Guarantors with respect to the Existing Letters of Credit, and (v) the account at Wachovia
Securities Special Equities Group in the NCI Building Systems, Inc.,
account number [intentionally omitted] to
the extent that no new amounts are deposited in such account after the date hereof.



          (b) Each Borrower shall, subject to the terms of the Intercreditor Agreement, deposit or cause
to be deposited all proceeds of Collateral, including all proceeds from sales of Inventory from
each location of such Borrower on each Business Day into the Cash Management Account of such
Borrower used for such purpose. All such funds deposited into the Cash Management Accounts shall
be sent by wire transfer or other electronic funds transfer no less frequently than twice each week
(or more frequently upon Agent’s request at any time that a Dominion Event exists) to the
Concentration Accounts, except nominal amounts which are required to be maintained in such Cash
Management Accounts under the terms of such Borrower’s arrangements with the bank at which such
Cash Management Accounts are maintained, which nominal amounts shall not exceed $5,000,000 as to
all Cash Management Account at any time.



          (c) Without limiting any other rights or remedies of Agent or Lenders, but subject to the
terms of the Intercreditor Agreement, Agent may, at its option, or shall at the request of the
Required Lenders, instruct the depository banks at which the Concentration Accounts are maintained
to transfer all available funds received or deposited into the Concentration Accounts to the Agent
Payment Account at any time that a Dominion Event exists (in each case after giving effect to the
application of any such amounts otherwise required to be applied pursuant to Sections 2.5(b), (c)
and (d)). Upon the termination of a Dominion Event to the extent provided in the definition of
such term, Agent shall, at the written request of Administrative Borrower, promptly instruct the
depository banks at which the Concentration Accounts are maintained to resume the transfer of funds
in the Concentration Accounts to the



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disbursement accounts of Borrowers used for such purpose, to
the extent that such banks had previously been instructed to transfer such funds to the Agent
Payment Account. So long as no Dominion Event has occurred and is continuing, each Borrower and
Guarantor may direct and shall have sole control over, the manner of the disposition of funds in
each Concentration Account.



          (d) For purposes of calculating the amount of the Loans available to each Borrower, such
payments will be applied (conditional upon final collection) to the Obligations on the Business Day
of receipt by Agent of immediately available funds in the Agent Payment Account; provided such
payments are received prior to 2:00 p.m. Eastern Standard Time on such day, and if not, then on the
next Business Day.



          (e) Each Borrower and Guarantor shall, acting as trustee for Agent and subject to the terms of
the Intercreditor Agreement, promptly upon receipt of any monies, checks, notes, drafts or any
other payment relating to and/or proceeds of Accounts or other Collateral which come into their
possession or under their control and promptly upon receipt thereof, shall deposit or cause the
same to be deposited in Cash Management Accounts or Concentration Accounts, or remit the same or
cause the same to be remitted, in kind, to Agent. In no event shall the same be commingled with
any Borrower’s or Guarantor’s own funds other than the commingling of amounts not to exceed
$2,500,000 in the aggregate for not more than three (3) Business Days as a result of inadvertent
deposits made to other accounts in error or in order to facilitate the issuance of payroll checks
in exigent circumstances. Borrowers agree to reimburse Agent on demand for any documented amounts
owed or paid to any bank or other financial institution at which a Concentration Account or Cash
Management Account or any other deposit account or investment account is established or any other
bank, financial institution or other person involved in the transfer of funds to or from the
Concentration Accounts arising out of Agent’s payments to or indemnification of such bank,
financial institution or other person in connection with the Credit Facility. The obligations of
Borrowers to reimburse Agent for such amounts pursuant to this Section 6.6 shall survive the
termination of this Agreement.



     6.7 Payments.



          (a) All Obligations shall be payable to the Agent Payment Account as provided in Section 6.6
or such other place as Agent may designate to Administrative Borrower in writing from time to time.
Subject to the other terms and conditions contained herein and subject to the terms of the
Intercreditor Agreement, Agent shall apply payments received or collected from any Borrower or
Guarantor or for the account of any Borrower or Guarantor (including the monetary proceeds of
collections or of realization upon any Collateral after giving effect to the application of any
such amounts otherwise required to be applied pursuant to Section 2.5(b), (c) and (d)) as follows:
first, to pay any fees, indemnities or expense reimbursements then due to Agent,
Co-Collateral Agents, Lenders and Issuing Bank from any Borrower or Guarantor; second, to
pay interest due in respect of any Loans (and including any Special Agent Advances) or Letter of
Credit Obligations; third, to pay or prepay principal in respect of Special Agent Advances;
fourth, to pay principal due in respect of the Loans; fifth, to pay or prepay any
other Obligations whether or not then due, in such order and manner as Agent determines and at any
time an
Event of Default exists or has occurred and is continuing, to provide cash collateral for any
Letter of Credit Obligations or other contingent Obligations (but not including for purposes of
this clause any Obligations arising under or pursuant to any Bank Products); and sixth, to
pay Obligations then due arising under or pursuant to any Hedge Agreements of a Borrower or
Guarantor with Agent or a Bank Product Provider, on a pro rata basis and to pay or prepay any
Obligations arising under or pursuant to any Bank Products on a pro rata basis.



          (b) Notwithstanding anything to the contrary contained in this Agreement, unless so directed
by Administrative Borrower, or unless a Default or an Event of Default shall exist or have occurred
and



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be continuing, Agent shall not apply any payments which it receives to any Eurodollar Rate
Loans, except in the event that there are no outstanding Base Rate Loans. To the extent Agent or
any Lender receives any payments or collections in respect of the Obligations in a currency other
than US Dollars Agent may, at its option (but is not obligated to), convert such other currency to
US Dollars at the exchange rate on such date and in such market as Agent may select (regardless of
whether such rate is the best available rate). Borrowers shall pay the costs of such conversion
(or Agent may, at its option, charge such costs to the loan account of any Borrower maintained by
Agent). Payments and collections received in any currency other than the currency in which any
outstanding Obligations are denominated will be accepted and/or applied at the discretion of Agent.
Except as permitted by Section 6.13(h) and subject to Section 6.8 hereof, any and all payments by
or on account of the Obligations shall be made without setoff, counterclaim or deduction.



          (c) For purposes of this Section 6.7, “paid in full” and “payment in full” and “prepayment in
full” means payment of all applicable amounts owing under the Financing Agreements according to the
terms thereof, including any such amounts consisting of loan fees, service fees, professional fees,
interest (and including interest accrued after the commencement of any case under the U.S.
Bankruptcy Code or any similar domestic or foreign similar statute), default interest, interest on
interest, and expense reimbursements, whether or not the same would be or is allowed or disallowed
in whole or in part in any case under the U.S. Bankruptcy Code, or any similar statute in any
jurisdiction.



          (d) At Agent’s option, all principal, interest, fees, costs, expenses and other charges
provided for in this Agreement or the other Financing Agreements may be charged directly to the
loan account(s) of any Borrower maintained by Agent to the extent then due and payable in
accordance with the terms of this Agreement. If after receipt of any payment of, or proceeds of
Collateral applied to the payment of, any of the Obligations, Agent, any Lender or Issuing Bank is
required to surrender or return such payment or proceeds to any Person for any reason, then the
Obligations intended to be satisfied by such payment or proceeds shall be reinstated and continue
and this Agreement shall continue in full force and effect as if such payment or proceeds had not
been received by Agent or such Lender. Borrowers and Guarantors shall be liable to pay to Agent,
and do hereby agree to indemnify and hold Agent and Lenders harmless for the amount of any payments
or proceeds surrendered or returned. This Section 6.7(d) shall remain effective notwithstanding
any contrary action which may be taken by Agent or any Lender in reliance upon such payment or
proceeds. This preceding two sentences of this Section 6.7(d) shall survive the payment of the
Obligations and the termination of this Agreement.



     6.8 Taxes.



          (a) Except as provided below in this Section 6.8 or as required by law, all payments made by
each Borrower and Guarantor under this Agreement or any of the other Financing Agreements shall be
made free and clear of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority (“Taxes”), excluding Taxes measured by or imposed upon the overall net income of Agent or
any Lender or its
applicable lending office, or any branch or affiliate thereof, and all franchise Taxes, branch
Taxes, Taxes on doing business or Taxes measured by or imposed upon the overall capital or net
worth of any Agent or such Lender or its applicable lending office, or any branch or affiliate
thereof, in each case imposed: (i) by the jurisdiction under the laws of which Agent or such
Lender, applicable lending office, branch or affiliate is organized or is located, or in which its
principal executive office is located, or any nation within which such jurisdiction is located or
any political subdivision thereof; or (ii) by reason of any connection between the jurisdiction
imposing such Tax and Agent or such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Agent or Lender having executed, delivered or performed
its obligations under, or received payment under or enforced, this



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Agreement or any of the other
Financing Agreements. If any such non-excluded Taxes (“Non-Excluded Taxes”) are required to be
withheld from any amounts payable by any Borrower or Guarantor to Agent or any Lender hereunder or
under any of the other Financing Agreements, the amounts payable by such Borrower or Guarantor
shall be increased to the extent necessary to yield to Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement; provided, however, that each of the Borrowers
and Guarantors shall be entitled to deduct and withhold, and Borrowers and Guarantors shall not be
required to indemnify for, any Non-Excluded Taxes, and any such amounts payable by any Borrower,
Guarantor or Agent to, or for the account of, Agent or any Lender shall not be increased (i) if
Agent or such Lender fails to comply with the requirements of this Section 6.8 (provided that while
such failure shall limit the indemnity obligation of the Borrowers and Guarantors pursuant to this
Section 6.8, such failure shall not be treated as a breach of this Agreement by Agent or such
Lender for any other purpose) or (ii) with respect to any Non-Excluded Taxes imposed in connection
with the payment of any fees paid under this Agreement or any of the other Financing Agreements
unless such Non-Excluded Taxes are imposed as a result of a change in treaty, law or regulation
that occurred after such Agent becomes an Agent hereunder or such Lender becomes a Lender hereunder
(or, if such Agent or Lender is a non U.S. intermediary or flow-through entity for U.S. federal
income tax purposes, after the relevant beneficiary or member of such Agent or Lender became such a
beneficiary or member, if later) (such change, at such time, a “Change in Tax Law”) or (iii) with
respect to any Non-Excluded Taxes imposed by the United States or any state or political
subdivision thereof, unless such Non-Excluded Taxes are imposed as a result of a Change in Tax Law.
Whenever any Non-Excluded Taxes are payable by any of the Borrowers, as promptly as possible
thereafter the applicable Borrower shall send to Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original official receipt received by such
Borrower showing payment thereof. If any Borrower fails to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to Agent the required receipts or other required
documentary evidence, Borrowers (in the case of any failure by a Borrower), on a joint and several
basis, shall indemnify Agent and Lenders for any incremental taxes, interest or penalties that may
become payable by Agent or any Lender as a result of any such failure. The agreements in this
Section 6.8 shall survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.



          (b) Agent and each Lender that is not organized under the laws of the United States of America
or a state thereof or the District of Columbia shall:



               (i) (A) on or before the date of any payment by any Borrower under this Agreement or any of
the other Financing Agreements to, or for the account of, Agent or such Lender, deliver to
Administrative Borrower and Agent (1) two duly completed copies of United States Internal Revenue
Service Form W-8BEN (certifying that it is a resident of the applicable country within the meaning
of the income tax treaty between the United States and that country) or Form W-8ECI, or successor
applicable form, as the case may be, in each case certifying that it is entitled to receive all
payments under this Agreement and any of the other Financing Agreements without deduction or
withholding of any United States federal income taxes, and (2) such other forms, documentation or
certifications, as the case may be,
certifying that it is entitled to an exemption from United States backup withholding tax with
respect to payments under this Agreement and any of the other Financing Agreements;



                    (B) deliver to Administrative Borrower and Agent two further copies of any such form or
certification on or before the date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most recent form or certificate
previously delivered by it to Administrative Borrower;



                    (C) obtain such extensions of time for filing and completing such forms or certifications as
may reasonably be requested by any Borrower or Agent; and



83









 





                    (D) deliver, to the extent legally entitled to do so, upon reasonable request by any Borrower
or Guarantor, to Administrative Borrower and Agent such other forms as may be reasonably required
in order to establish the legal entitlement of such Lender to an exemption from withholding with
respect to payments under this Agreement and any of the other Financing Agreements, provided that
in determining the reasonableness of a request under this clause (D) such Lender shall be entitled
to consider the cost (to the extent unreimbursed by any Borrower or Guarantor) which would be
imposed on such Lender of complying with such request; or



               (ii) in the case of any such Lender that is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code and is claiming the so-called “portfolio interest exemption”,



                    (A) represent to Borrowers and Agent that it is not a bank within the meaning of Section
881(c)(3)(A) of the Code;



                    (B) deliver to Administrative Borrower on or before the date of any payment by any of
Borrowers, with a copy to the Agent, (1) two certificates substantially in the form of Exhibit
H (any such certificate a “U.S. Tax Compliance Certificate”) and (2) two accurate and complete
original signed copies of Internal Revenue Service Form W-8BEN, or successor applicable form,
certifying to such Lender’s legal entitlement at the date of such form to an exemption from U.S.
withholding tax under the provisions of Section 871(h) or Section 881(c) of the Code with respect
to payments to be made under this Agreement and any of the other Financing Agreements (and shall
also deliver to Administrative Borrower and Agent two further copies of such form or certificate on
or before the date it expires or becomes obsolete and after the occurrence of any event requiring a
change in the most recently provided form or certificate and, if necessary, obtain any extensions
of time reasonably requested by any Borrower or Agent for filing and completing such forms or
certificates); and



                    (C) deliver, to the extent legally entitled to do so, upon reasonable request by any Borrower,
to Administrative Borrower and Agent such other forms as may be reasonably required in order to
establish the legal entitlement of such Lender to an exemption from withholding with respect to
payments under this Agreement and any of the other Financing Agreements, provided that in
determining the reasonableness of a request under this clause (C) such Lender shall be entitled to
consider the cost (to the extent unreimbursed by any Borrower or Guarantor) which would be imposed
on such Lender of complying with such request; or



               (iii) in the case of any such Lender that is a non-U.S. intermediary or flow through entity
for U.S. federal income tax purposes,



                    (A) on or before the date of any payment by any of Borrowers under this Agreement or any of
the other Financing Agreements to, or for the account of, such Lender, deliver to Administrative
Borrower and Agent two accurate and complete original signed copies of Internal Revenue Service
Form
W-8IMY and, if any beneficiary or member of such Lender is claiming the so-called “portfolio
interest exemption”, (x) represent to the Borrowers and Agent that such Lender is not a bank within
the meaning of Section 881(c)(3)(A) of the Code and (y) also deliver to Administrative Borrower and
Agent two U.S. Tax Compliance Certificates certifying to such Lender’s legal entitlement at the
date of such certificate to an exemption from U.S. withholding tax under the provisions of Section
881(c) of the Code with respect to payments to be made under this Agreement and any of the other
Financing Agreements; and



                         (1) with respect to each beneficiary or member of such Lender that is not claiming the
so-called “portfolio interest exemption”, also deliver to Borrower and Agent (x) two duly completed
copies of United States Internal Revenue Service Form W-8BEN (certifying that such beneficiary or
member is a resident of the applicable country within the meaning of the income tax treaty



84









 







between
the United States and that country), Form W-8ECI or Form W-9, or successor applicable form, as the
case may be, in each case so that each such beneficiary or member is entitled to receive all
payments under this Agreement and any of the other Financing Agreements without deduction or
withholding of any United States federal income taxes and (y) such other forms, documentation or
certifications, as the case may be, certifying that each such beneficiary or member is entitled to
an exemption from United States backup withholding tax with respect to all payments under this
Agreement and any of the other Financing Agreements; and



                         (2) with respect to each beneficiary or member of such Lender that is claiming the so-called
“portfolio interest exemption”, (x) represent to Borrowers and Agent that such beneficiary or
member is not a bank within the meaning of Section 881(c)(3)(A) of the Code and (y) also deliver to
Administrative Borrower and Agent two U.S. Tax Compliance Certificates from each beneficiary or
member and two accurate and complete original signed copies of Internal Revenue Service Form W
8BEN, or successor applicable form, certifying to such beneficiary’s or member’s legal entitlement
at the date of such certificate to an exemption from U.S. withholding tax under the provisions of
Section 871(h) or Section 881(c) of the Code with respect to payments to be made under this
Agreement and any of the other Financing Agreements;



                    (B) deliver to Administrative Borrower and Agent two further copies of any such forms,
certificates or certifications referred to above on or before the date any such form, certificate
or certification expires or becomes obsolete, or any beneficiary or member changes, and after the
occurrence of any event requiring a change in the most recently provided form, certificate or
certification and obtain such extensions of time reasonably requested by any U.S. Borrower or Agent
for filing and completing such forms, certificates or certifications; and



                    (C) deliver, to the extent legally entitled to do so, upon reasonable request by any Borrower,
to Borrowers and Agent such other forms as may be reasonably required in order to establish the
legal entitlement of such Lender (or beneficiary or member) to an exemption from withholding with
respect to payments under this Agreement and any of the other Financing Agreements, provided that
in determining the reasonableness of a request under this clause (C) such Lender shall be entitled
to consider the cost (to the extent unreimbursed by any Borrower or Guarantor) which would be
imposed on such Lender (or beneficiary or member) of complying with such request;


unless in any such case any change in treaty, law or regulation has occurred after the date such
Person becomes a Lender hereunder (or a beneficiary or member in the circumstances described in
clause (iii) above, if later) which renders all such forms inapplicable or which would prevent such
Lender (or such beneficiary or member) from duly completing and delivering any such form with
respect to it and such Lender so advises the Administrative Borrower and Agent.




          (c) Agent and each Lender, in each case that is organized under the laws of the United States
of America or a state thereof or the District of Columbia, shall on or before the date of any
payment by any Borrower under this Agreement or any of the other Financing Agreements to, or for
the account of, Agent or such Lender, deliver to Administrative Borrower and Agent two duly
completed copies of Internal Revenue Service Form W-9, or successor form, certifying that Agent or
such Lender is a United States Person (within the meaning of Section 7701(a)(30) of the Internal
Revenue Code) and that Agent or such Lender is entitled to a complete exemption from United States
backup withholding tax. Agent represents to the Borrowers that it is a financial institution within
the meaning of Section 1.1441-1(c)(5) of the U.S. Treasury Regulations. Each such Lender shall
also deliver, to the extent legally entitled to do so, upon reasonable request by any Borrower, to
Administrative Borrower and Agent such other forms as may be reasonably required in order to
establish the legal entitlement of such Lender to an exemption from withholding with respect to
payments under this Agreement and any of the other Financing



85









 







Agreements, provided that in
determining the reasonableness of a request under this sentence such Lender shall be entitled to
consider the cost (to the extent unreimbursed by any Borrower or Guarantor) which would be imposed
on such Lender of complying with such request.



          (d) Upon the request, and at the expense of Borrowers, each Lender to which any Borrower or
Guarantor is required to make a payment pursuant to Section 3.5 or 6.8 shall reasonably afford the
Administrative Borrower the opportunity to contest, and reasonably cooperate with the
Administrative Borrower in contesting, the imposition of any such Tax giving rise to such payment;
provided, that, (i) such Lender shall not be required to afford the Administrative
Borrower the opportunity to so contest unless Borrowers shall have confirmed in writing to such
Lender their obligation to make such payment pursuant to this Agreement and (ii) Borrowers shall
reimburse such Lender for its reasonable attorneys’ and accountants’ fees and disbursements
incurred in so cooperating with the Administrative Borrower in contesting the imposition of such
Tax; provided, however, that notwithstanding the foregoing no Lender shall be
required to afford the Administrative Borrower the opportunity to contest, or cooperate with the
Administrative Borrower in contesting, the imposition of any such Taxes, if such Lender in its sole
discretion in good faith determines that to do so would have an adverse effect on it.



          (e) If any Lender changes its applicable lending office (other than (i) pursuant to Section
3.9(a) or (ii) after an Event of Default under Section 12.1(a) or (g) has occurred and is
continuing) and the effect of such change, as of the date of such change, would result in any
Borrower or Guarantor being obligated to make any payment under Section 3.5 or 6.8, none of
Borrowers and Guarantor shall be obligated to make any such payment.



          (f) If a condition or an event occurs which would, or would upon the passage of time or giving
of notice, result in the payment of any amount to or on behalf of any Lender by any Borrower or
Guarantor pursuant to Section 3.5 or 6.8, such Lender shall promptly notify the Administrative
Borrower and Agent and shall take such steps as may reasonably be available to it to mitigate the
effects of such condition or event (which shall include efforts to rebook the Loans held by such
Lender at another lending office, or through another branch or an affiliate, of such Lender
pursuant to Section 3.9(a)); provided, that, such Lender shall not be required to
take any step that, in its reasonable judgment, would be materially disadvantageous to its business
or operations or would require it to incur additional costs (unless the Borrowers and Guarantor
agree to reimburse such Lender for the reasonable incremental out-of-pocket costs thereof).



          (g) If Agent or any Lender receives a refund directly attributable to Taxes for which any
Borrower or Guarantor has made a payment under Section 3.5 or 6.8, Agent or such Lender, as the
case may be, shall promptly pay such refund (together with any interest with respect thereto
received from the relevant Governmental Authority, but net of any reasonable out-of-pocket cost
incurred in connection therewith) to the Administrative Borrower; provided,
however, that Borrowers agree to promptly return
such refund (together with any interest with respect thereto due to the relevant Governmental
Authority) to Agent or such Lender, as applicable, upon receipt of a notice that such refund is
required to be repaid to the relevant Governmental Authority.



          (h) For purpose of this Section 6.8, any reference of Lender in this Section 6.8 shall include
the Issuing Bank. The agreements in this Section 6.8 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.



          6.9 Use of Proceeds.
Borrowers shall use the initial proceeds of the Loans and Letters of Credit hereunder only
for: (a) payments to each of the persons listed in the disbursement direction letter furnished by
Borrowers to Agent on or about the date hereof and (b) costs, expenses and fees in connection with
the Transactions and in connection with the preparation, negotiation, execution and



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delivery of
this Agreement and the other Financing Agreements. All other Loans made or Letters of Credit
provided to or for the benefit of any Borrower pursuant to the provisions hereof shall be used by
such Borrower for general operating, working capital and other corporate purposes of Parent and its
Subsidiaries not otherwise prohibited by the terms hereof.



     6.10 Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts
of Loans and Statements.



          (a) Each Borrower hereby irrevocably appoints and constitutes Administrative Borrower as its
agent and attorney-in-fact to request and receive Loans and Letters of Credit pursuant to this
Agreement and the other Financing Agreements from Agent or any Lender in the name or on behalf of
such Borrower. Agent and Lenders shall disburse the Loans to such bank account of Administrative
Borrower or a Borrower designated in writing by Administrative Borrower to Agent on or prior to the
date hereof (or such other bank account as Administrative Borrower may specify to Agent in writing;
provided, that, such other bank account shall be located in the United States at a
depository institution that accepts transfers of funds without the imposition of fees or charges on
the transferor) or otherwise make such Loans to a Borrower and provide such Letters of Credit to a
Borrower as Administrative Borrower may designate or direct, without notice to any other Borrower
or Guarantor. Notwithstanding anything to the contrary contained herein, Agent may at any time and
from time to time following written notice to and consultation with Administrative Borrower,
require that Loans to or for the account of any Borrower be disbursed directly to an operating
account of such Borrower.



          (b) Administrative Borrower hereby accepts the appointment by Borrowers to act as the agent
and attorney-in-fact of Borrowers pursuant to this Section 6.10. Administrative Borrower shall
ensure that the disbursement of any Loans to each Borrower requested by or paid to or for the
account of Parent, or the issuance of any Letter of Credit for a Borrower hereunder, shall be paid
to or for the account of such Borrower, except as agreed among Borrowers.



          (c) Each Borrower and other Guarantor hereby irrevocably appoints and constitutes
Administrative Borrower as its agent to receive statements on account and all other notices from
Agent and Lenders with respect to the Obligations or otherwise under or in connection with this
Agreement and the other Financing Agreements.



          (d) To the maximum extent permitted by applicable law, any notice, election, representation,
warranty, agreement or undertaking by or on behalf of any other Borrower or any Guarantor by
Administrative Borrower shall be deemed for all purposes to have been made by such Borrower or
Guarantor, as the case may be, and shall be binding upon and enforceable against such Borrower
or Guarantor to the same extent as if made directly by such Borrower or Guarantor.



          (e) No termination of the appointment of Administrative Borrower as agent as aforesaid shall
be effective, except after ten (10) Business Days’ prior written notice to Agent.



     6.11 Pro Rata Treatment.
Except to the extent otherwise provided in this Agreement or as otherwise agreed by the
applicable Lenders and Administrative Borrower: (a) the making and conversion of Loans shall be
made among the Lenders based on their respective Pro Rata Shares as to the Loans and (b) each
payment on account of any Obligations to or for the account of one or more of Lenders in respect of
any Obligations due on a particular day shall be allocated among the Lenders entitled to such
payments based on their respective Pro Rata Shares and shall be distributed accordingly.



     6.12 Sharing of Payments, Etc.



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          (a) Each Borrower and Guarantor agrees that, in addition to (and without limitation of) any
right of setoff, banker’s lien or counterclaim Agent or any Lender may otherwise have, each Lender
shall be entitled, at its option (but subject, as among Agent and Lenders, to the provisions of
Section 14.3(b) hereof), at any time an Event of Default under Section 12.1(a) exists or has
occurred and is continuing, to offset balances held by it for the account of such Borrower or
Guarantor at any of its offices, in dollars or in any other currency, against any principal of or
interest on any Loans owed to such Lender or any other amount payable to such Lender hereunder,
that is not paid when due (regardless of whether such balances are then due to such Borrower or
Guarantor), in which case it shall promptly notify Administrative Borrower and Agent thereof;
provided, that, such Lender’s failure to give such notice shall not affect the
validity thereof.



          (b) If any Lender (including Agent) shall obtain from any Borrower or Guarantor payment of any
principal of or interest on any Loan owing to it or payment of any other amount under this
Agreement or any of the other Financing Agreements through the exercise of any right of setoff,
banker’s lien or counterclaim or similar right or otherwise (other than from Agent as provided
herein), and, as a result of such payment, such Lender shall have received more than its Pro Rata
Share of the principal of the Loans or more than its share of such other amounts then due hereunder
or thereunder by any Borrower or Guarantor to such Lender than the percentage thereof received by
any other Lender, it shall promptly pay to Agent, for the benefit of Lenders, the amount of such
excess and simultaneously purchase from such other Lenders a participation in the Loans or such
other amounts, respectively, owing to such other Lenders (or such interest due thereon, as the case
may be) in such amounts, and make such other adjustments from time to time as shall be equitable,
to the end that all Lenders shall share the benefit of such excess payment (net of any expenses
that may be incurred by such Lender in obtaining or preserving such excess payment) in accordance
with their respective Pro Rata Shares or as otherwise agreed by Lenders. To such end all Lenders
shall make appropriate adjustments among themselves (by the resale of participation sold or
otherwise) if such payment is rescinded or must otherwise be restored.



          (c) Each Borrower and Guarantor agrees that any Lender purchasing a participation (or direct
interest) as provided in this Section may exercise, in a manner consistent with this Section, all
rights of setoff, banker’s lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be)
owing to such Lender in the amount of such participation.



          (d) Nothing contained herein shall require any Lender to exercise any right of setoff,
banker’s lien, counterclaims or similar rights or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other Indebtedness or
obligation of any Borrower or Guarantor. If, under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies,
such Lender shall, to the extent practicable, assign such rights to Agent for the benefit of
Lenders and, in any event, exercise its rights in respect of such secured claim in a manner
consistent with the rights of Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.



     6.13 Settlement Procedures.



          (a) In order to administer the Credit Facility in an efficient manner and to minimize the
transfer of funds between Agent and Lenders, Agent may, at its option, subject to the terms of this
Section, make available, on behalf of Lenders, including the Swing Line Lender, the full amount of
the Revolving Loans or Swing Line Loans requested or charged to any Borrower’s loan account(s) or
otherwise to be advanced by Lenders pursuant to the terms hereof, without requirement of prior
notice to Lenders of the proposed Loans.



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          (b) With respect to all Loans made by Agent on behalf of Lenders, the amount of each Lender’s
Pro Rata Share of the outstanding Loans shall be computed weekly, and shall be adjusted upward or
downward on the basis of the amount of the outstanding Loans as of 5:00 p.m. New York City time on
the Business Day immediately preceding the date of each settlement computation; provided,
that, Agent retains the absolute right at any time or from time to time to make the above
described adjustments at intervals more frequent than weekly, but in no event more than twice in
any week. With respect to Swing Line Loans made by Swing Line Lender (or Agent on behalf of Swing
Line Lender), Swing Line Lender (or Agent on behalf of Swing Line Lender) may settle on the Swing
Line Loans from time to time as it determines, but not less frequently than once each week. Agent
(or Swing Line Lender as to Swing Line Loans) shall deliver to each of the Lenders after the end of
each week, or at such period or periods as Agent (or Swing Line Lender as to Swing Line Loans)
shall determine, a summary statement of the amount of outstanding Loans (whether Revolving Loans,
Swing Line Loans or both, as applicable) for such period (such week or other period or periods
being hereinafter referred to as a “Settlement Period”). If the summary statement is sent by Agent
(or Swing Line Lender in the case of Swing Line Loans) and received by a Lender prior to 12:00
p.m., then such Lender shall make the settlement transfer described in this Section by no later
than 3:00 p.m. on the same Business Day and if received by a Lender after 12:00 p.m., then such
Lender shall make the settlement transfer by not later than 3:00 p.m. on the next Business Day
following the date of receipt. If, as of the end of any Settlement Period, the amount of a
Lender’s Pro Rata Share of the outstanding Loans is more than such Lender’s Pro Rata Share of the
outstanding Loans as of the end of the previous Settlement Period, then such Lender shall forthwith
(but in no event later than the time set forth in the preceding sentence) transfer to Agent by wire
transfer in immediately available funds the amount of the increase. Alternatively, if the amount
of a Lender’s pro rata share of the outstanding Loans in any Settlement Period is less than the
amount of such Lender’s Pro Rata Share of the outstanding Loans for the previous Settlement Period,
Agent shall forthwith transfer to such Lender by wire transfer in immediately available funds the
amount of the decrease. Each Lender shall forthwith (but in no event later than the time set forth
in the preceding sentence) transfer to Swing Line Lender (or upon its request to Agent) by wire
transfer in immediately available funds the amount of such Lender’s Pro Rata Share of the
outstanding Swing Line Loans as set forth in the summary statement provided to such Lender as
provided above. Amounts transferred to Swing Line Lender (or Agent as the case may be) in respect
to a settlement of Swing Line Loans shall be applied to the payment of the Swing Line loans and
shall constitute Loans of such Lenders. The obligation of each of the Lenders to transfer such
funds and effect such settlement shall be irrevocable and unconditional and without recourse to or
warranty by Agent and may occur at any time a Default or Event of Default exists or has occurred
and
whether or not the conditions set forth in Section 4.2 are satisfied (except if there is an
Event of Default under Section 12.1(g), in which case the funds shall be in respect of each
Lender’s participation). Agent and each Lender agrees to mark its books and records at the end of
each Settlement Period to show at all times the dollar amount of its Pro Rata Share of the
outstanding Loans and Letters of Credit. Each Lender shall only be entitled to receive interest on
its Pro Rata Share of the Loans to the extent such Loans have been funded by such Lender. Because
the Agent on behalf of Lenders may be advancing and/or may be repaid Loans prior to the time when
Lenders will actually advance and/or be repaid such Loans, interest with respect to Loans shall be
allocated by Agent in accordance with the amount of Loans actually advanced by and repaid to each
Lender and the Agent and shall accrue from and including the date such Loans are so advanced to but
excluding the date such Loans are either repaid by Borrowers or actually settled with the
applicable Lender as described in this Section.



          (c) To the extent that Agent has made any such amounts available and the settlement described
above shall not yet have occurred, upon repayment of any Loans by a Borrower, Agent may apply such
amounts repaid directly to any amounts made available by Agent pursuant to this Section. In lieu
of settlements, Agent may, at its option, at any time require each Lender to provide Agent with
immediately available funds representing its Pro Rata Share of each Loan, prior to Agent’s
disbursement of such Loan to a Borrower. In such event, Agent shall notify each Lender promptly
after Agent’s receipt



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of the request for the Loans from a Borrower (or Administrative Borrower on
behalf of such Borrower) or any deemed request hereunder and each Lender shall provide its Pro Rata
Share of such requested Loan to the account specified by Agent in immediately available funds not
later than 2:00 p.m. on the requested funding date, so that all such Loans shall be made by the
Lenders simultaneously and proportionately to their Pro Rata Shares. No Lender shall be
responsible for any default by any other Lender in the other Lender’s obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender be increased or decreased as a result of
the default by any other Lender in the other Lender’s obligation to make a Loan hereunder.



          (d) Upon the making of any Loan by Agent as provided herein, without further action by any
party hereto, each Lender shall be deemed to have irrevocably and unconditionally purchased and
received from Agent, without recourse or warranty, an undivided interest and participation to the
extent of such Lender’s Pro Rata Share in such Loan. To the extent that there is no settlement in
accordance with the terms hereof, Agent may at any time require the Lenders to fund their
participations. From and after the date, if any, on which any Lender has funded its participation
in any such Loan, Agent shall promptly distribute to such Lender, such Lender’s Pro Rata Share of
all payments of principal and interest received by Agent in respect of such Loan.



          (e) As to any Loan funded by Agent on behalf of a Lender (including Swing Line Lender) whether
pursuant to Sections 6.13(a), 6.13(b) or 6.13(c) above, Agent may assume that each Lender will make
available to Agent such Lender’s Pro Rata Share of the Loan requested or otherwise made on such day
in the case of Loans funded pursuant to Section 6.13(c) above or otherwise on the applicable
settlement date. If Agent makes amounts available to a Borrower and such corresponding amounts are
not in fact made available to Agent by such Lender, Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon for each day from
the date such payment was due until the date such amount is paid to Agent at the Federal Funds Rate
for each day during such period (as published by the Federal Reserve Bank of New York or at Agent’s
option based on the arithmetic mean determined by Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. on that day by each of the three leading
brokers of Federal funds transactions in New York selected by Agent) and if such amounts are not
paid within three (3) days of Agent’s demand, at the highest Interest Rate provided for in Section
3.1 hereof applicable to Base Rate Loans. During the period in which such Lender has not paid such
corresponding amount to Agent, notwithstanding anything to the contrary contained in this Agreement
or any of the other Financing
Agreements, the amount so advanced by Agent to or for the benefit of any Borrower shall, for
all purposes hereof, be a Loan made by Agent for its own account.



          (f) Upon any failure by a Lender to pay Agent (or Swing Line Lender) pursuant to the
settlement described in Section 6.13(b) above or to pay Agent pursuant to Section 6.13(c), 6.13(d)
or Section 6.13(e), Agent shall promptly thereafter notify Administrative Borrower of such failure
and Borrowers shall pay such corresponding amount to Agent for its own account within five (5)
Business Days of Administrative Borrower’s receipt of such notice. The term “Defaulting Lender”
shall mean (i) any Lender that has failed to fund any portion of the Revolving Loans,
participations in Letter of Credit Obligations or participations in Swing Line Loans required to be
funded by it hereunder within one (1) Business Day of the date required to be funded by it
hereunder, or has otherwise failed to pay over to Agent or any other Lender any other amount
required to be paid by it hereunder within one (1) Business Day of the date when due, (ii) any
Lender that has notified Agent, any Lender, Issuing Bank, or any Borrower or Guarantor in writing
that it will not or does not intend to comply with any of its funding obligations under this
Agreement or has made a public statement to the effect that it will not or does not intend to
comply with its funding obligations under this Agreement or under other agreements in which it has
agreed to make loans or provide other financial accommodations, (iii) any Lender that has failed,
within five (5) Business Days after request by Agent or the Administrative Borrower to confirm that
it



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will comply with the terms of this Agreement relating to its obligations to fund prospective
Loans and participations in then outstanding Letters of Credit and Swing Line Loans; provided that
any such Lender shall cease to be a Defaulting Lender under this clause (iii) upon receipt of such
confirmation by Agent and the Administrative Borrower, or (iv) any Lender that becomes or is
insolvent or has a parent company that has become or is insolvent or becomes the subject of a
bankruptcy or insolvency proceeding, or has a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment and has not obtained all required orders,
approvals or consents of any court or other Governmental Authority to continue to fulfill its
obligations hereunder, in form and substance satisfactory to Agent and the Administrative Borrower.



          (g) Agent shall not be obligated to transfer to a Defaulting Lender any payments received by
Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing
of any payments hereunder (including any principal, interest or fees and whether in respect of
Revolving Loans, participation interests or otherwise). For purposes of voting or consenting to
matters with respect to this Agreement and the other Financing Agreements, including for purposes
of the Required Lenders and the Supermajority Lenders, and determining Pro Rata Shares, such
Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Revolving Loan Commitment
shall be deemed to be zero (0). So long as there is a Defaulting Lender, the maximum amount of the
Loans and Letters of Credit shall not exceed the aggregate amount of the Commitments of the Lenders
that are not Defaulting Lenders plus the Pro Rata Share of the Defaulting Lender (determined
immediately prior to its being a Defaulting Lender) of the Loans and Letters of Credit outstanding
as of the date that the Defaulting Lender has become a Defaulting Lender. At any time that there
is a Defaulting Lender, payments received for application to the Obligations payable to Lenders in
accordance with the terms of this Agreement shall be distributed to Lenders based on their Pro Rata
Shares calculated after giving effect to the reduction of the Defaulting Lender’s Revolving Loan
Commitment to zero (0) as provided herein or at Agent’s option, Agent may instead receive and
retain such amounts that would be otherwise attributable to the Pro Rata Share of a Defaulting
Lender (which for such purpose shall be such Pro Rata Share as in effect immediately prior to its
being a Defaulting Lender). To the extent that Agent elects to receive and retain such amounts,
Agent may hold such amounts (which shall not accrue interest) and, in its reasonable discretion,
relend such amounts to a Borrower. To the extent that Agent exercises its option to relend such
amounts, such amounts shall be treated as Revolving Loans for the account of Agent in addition to
the Revolving Loans that are made by the Lenders other than a Defaulting Lender based on their
respective Pro Rata Shares as
calculated after giving effect to the reduction of such Defaulting Lender’s Commitment to zero
(0) as provided herein but shall be repaid in the same order of priority as the principal amount of
the Loans on a pro rata basis for purposes of Section 6.7 hereof. Agent shall determine whether
any Revolving Loans requested shall be made from relending such amounts or from Revolving Loans
from the Lenders (other than a Defaulting Lender) and any allocation of requested Revolving Loans
between them. The rights of a Defaulting Lender shall be limited as provided herein until such time
as the Defaulting Lender has made all payments to Agent of the amounts that it had failed to pay
causing it to become a Defaulting Lender and such Lender is otherwise in compliance with the terms
of this Agreement (including making any payments as it would have been required to make as a Lender
during the period that it was a Defaulting Lender other than in respect of the principal amount of
Revolving Loans, which payments as to the principal amount of Revolving Loans shall be made based
on the outstanding balance thereof on the date of the cure by Defaulting Lender or at such other
time thereafter as Agent may specify) or has otherwise provided evidence in form and substance
satisfactory to Agent and Administrative Borrower that such Defaulting Lender will be able to fund
its Pro Rata Share (as in effect immediately prior to its being a Defaulting Lender) in accordance
with the terms hereof. Upon the cure by Defaulting Lender of the event that is the basis for it to
be a Defaulting Lender by making such payment or payments and such Lender otherwise being in
compliance with the terms hereof, such Lender shall cease to be a Defaulting Lender and shall only
be entitled to payment of interest accrued during the period that such Lender was a



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Defaulting
Lender to the extent previously received and retained by Agent from or for the account of Borrowers
on the funds constituting Loans funded by such Lender prior to the date of it being a Defaulting
Lender (and not previously paid to such Lender) and shall otherwise, on and after such cure, make
Loans and settle in respect of the Loans and other Obligations in accordance with the terms hereof.
The existence of a Defaulting Lender and the operation of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender. Borrowers shall not be required to make
any payments of principal, interest or fees in respect of Loans by a Defaulting Lender, but all
payments required hereunder shall be made in respect of the Loans and other Obligations owing to
the other Lenders, so that the payments in respect of principal and fees received by or on behalf
of Agent or any Lender shall be made and allocated among the Lenders other than a Defaulting Lender
in respect of amounts owing to such Lenders, and Borrowers may, except after a Dominion Event,
retain the amount of interest that would otherwise be payable in respect of Loans by a Defaulting
Lender. At any time that one or more of the Lenders is a Defaulting Lender, payments received for
application to the Obligations shall be distributed among Lenders based on their Pro Rata Shares
calculated after giving effect to the reduction of the Defaulting Lenders’ Commitments as provided
above.



          (h) Notwithstanding anything to the contrary contained in this Agreement, in the event there
is a Defaulting Lender, upon any issuance or amendment of any Letter of Credit by the Issuing Bank,
each Non-Defaulting Lender shall be deemed to have irrevocably and unconditionally purchased and
received, without recourse or warranty, an undivided interest and participation to the extent of
such Non-Defaulting Lender’s Pro Rata Share of the liability with respect to such Letters of Credit
and the obligations of the Borrowers with respect thereto (it being understood that the Defaulting
Lender’s Pro Rata Share is zero), but solely to the extent that the sum of any Non-Defaulting
Lender’s Pro Rata Share of the outstanding Loans and its participations in Letters of Credit does
not exceed the Commitment of such Non-Defaulting Lender. So long as there is a Defaulting Lender,
the Issuing Bank shall not be required to issue, renew, extend or amend any Letter of Credit where
the sum of the Non-Defaulting Lenders Pro Rata Share of the outstanding Loans and their
participations in Letters of Credit after giving effect to any such requested Letter of Credit (or
renewal, extension or amendment) would exceed the aggregate Commitments of such Non-Defaulting
Lenders, unless Agent has cash collateral from Borrowers in an amount equal to the Pro Rata Share
of the Defaulting Lender (calculated as in effect immediately prior to such Lender becoming a
Defaulting Lender) of the Letter of Credit Obligations outstanding after giving effect to any such
requested Letter of Credit (or renewal, extension or amendment) to be held by Agent on its behalf
on terms and conditions reasonably satisfactory to Agent
and Issuing Bank or there are other arrangements reasonably satisfactory to Issuing Bank with
respect to the participation in Letters of Credit by such Defaulting Lender. Such cash collateral
shall be applied first to the Letter of Credit Obligations before application to any other
Obligations, notwithstanding anything to the contrary contained in Section 6.7 hereof.



          (i) Notwithstanding anything to the contrary contained in this Agreement, in the event there
is a Defaulting Lender, upon any extension of Swing Line Loans by the Swing Line Lender, each
Non-Defaulting Lender shall be deemed to have irrevocably and unconditionally purchased and
received, without recourse or warranty, an undivided interest and participation to the extent of
such Non-Defaulting Lender’s Pro Rata Share of the liability with respect to such Swing Line Loan
(it being understood that the Defaulting Lender’s Pro Rata Share is zero), but solely to the extent
that the sum of any Non-Defaulting Lender’s Pro Rata Share of the outstanding Loans and its
participations in Letters of Credit does not exceed the Commitment of such Non-Defaulting Lender.
So long as there is a Defaulting Lender, Swing Line Lender shall not be required to make any Swing
Line Loans in which the Defaulting Lender would have had a participation (but for being a
Defaulting Lender), where the sum of the Non-Defaulting Lenders Pro Rata Share of the outstanding
Loans and their participations in Letters of Credit after giving effect to any such Swing Line
Loans would exceed the aggregate Commitments of such Non-Defaulting Lenders, unless Agent has cash
collateral from Borrowers in an amount equal to the Pro Rata



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Share of the Defaulting Lender
(calculated as in effect immediately prior to such Lender becoming a Defaulting Lender) of any such
Swing Line Loans to be held by Agent on its behalf on terms and conditions reasonably satisfactory
to Agent and Swing Line Lender or there are other arrangements reasonably satisfactory to Swing
Line Lender with respect to the participation in Swing Line Loans by such Defaulting Lender. Such
cash collateral shall be applied first to the Obligations relating to the Swing Line Loans before
application to any other Obligations, notwithstanding anything to the contrary contained in Section
6.7 hereof.



          (j) If any Swing Line Loans or Letters of Credit are outstanding at the time a Lender becomes
a Defaulting Lender then:



               (i) all or any part of the interests of Lenders in such Swing Line Loans and Letters of
Credit, and Obligations arising pursuant thereto, shall be reallocated among the Non-Defaulting
Lenders in accordance with their respective Pro Rata Shares (as adjusted as provided herein, it
being understood that the Defaulting Lender’s Pro Rata Share is zero) but only to the extent the
sum of all non-Defaulting Lenders’ Pro Rata Shares in respect of outstanding Loans and Letters of
Credit (calculated before giving effect to such adjustment) plus such Defaulting Lender’s Pro Rata
Share (calculated as in effect immediately prior to it becoming a Defaulting Lender) of such Loans
and Letters of Credit does not exceed the total of all Non-Defaulting Lenders’ Commitments; and



               (ii) if the reallocation described in clause (i) above cannot, or can only partially, be
effected, Borrowers shall within one (1) Business Day following notice by Agent (A) first, prepay
such Defaulting Lender’s Pro Rata Share (calculated as in effect immediately prior to it becoming a
Defaulting Lender) of any Swing Line Loans (after giving effect to any partial reallocation
pursuant to clause (i) above) and (B) second, provide to Agent cash collateral to be held by Agent
on behalf of Issuing Bank on terms and conditions reasonably satisfactory to Agent in an amount
equal to the Defaulting Lender’s Pro Rata Share (calculated as in effect immediately prior to it
becoming a Defaulting Lender), in each case under clauses (A) and (B) after giving effect to any
partial reallocation pursuant to paragraph (i) above).



          (k) Notwithstanding anything to the contrary contained in this Agreement, in the event that
there is a Defaulting Lender, Administrative Borrower and Agent shall each have the right, on prior
written notice to the other, to cause the Defaulting Lender to, and upon the exercise by
Administrative Borrower or Agent of such right, such Defaulting Lender shall have the obligation
to, sell, assign and
transfer to such Eligible Transferee as Administrative Borrower may specify, or as Agent may
specify with the consent of the Administrative Borrower, the Commitment of such Defaulting Lender
and all rights and interests of such Defaulting Lender pursuant thereto (without payment of the
assignment fee and with any other costs and expenses to be paid by Borrowers in such instance);
provided that neither Agent nor any Lender shall have any obligation to Borrowers to find a
replacement Lender. Such purchase and sale shall be pursuant to the terms of an Assignment and
Acceptance (whether or not executed by the Defaulting Lender). Such purchase and sale shall be
effective on the date of the payment of the amounts required under such Assignment and Acceptance
to the Defaulting Lender and the Commitment of the Defaulting Lender shall terminate on such date.
Nothing in this Section 6.13 shall impair any rights that any Borrower, Agent, any Lender or
Issuing Bank may have against any Lender that is a Defaulting Lender.



          (l) Nothing in this Section or elsewhere in this Agreement or the other Financing Agreements
shall be deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender
from its obligation to fulfill its Commitment hereunder or to prejudice any rights or remedies that
any Borrower may have against a Lender as a result of any default by such Lender hereunder in
fulfilling its Commitment.



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     6.14 Obligations Several; Independent Nature of Lenders’ Rights.
The obligation of each Lender hereunder is several, and no Lender shall be responsible for the
obligation or commitment of any other Lender hereunder. Nothing contained in this Agreement or any
of the other Financing Agreements and no action taken by the Lenders pursuant hereto or thereto
shall be deemed to constitute the Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and subject to Section 14.3 hereof, each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such purpose.



     6.15 Bank Products.
Borrowers and Guarantors, or any of their Subsidiaries, may (but no such Person is required
to) request that the Bank Product Providers provide or arrange for such Person to obtain Bank
Products from Bank Product Providers, and each Bank Product Provider may, in its sole discretion,
provide or arrange for such Person to obtain the requested Bank Products. Borrower and its
Subsidiaries acknowledge and agree that the obtaining of Bank Products from Bank Product Providers
(a) is in the sole discretion of such Bank Product Provider, and (b) is subject to all rules and
regulations of such Bank Product Provider. To the extent that the obligations liabilities and
indebtedness owing to any Bank Product Provider constitute Obligations in accordance with the
definition thereof, such Bank Product Provider shall be deemed a third party beneficiary hereto for
purposes of any reference in any of the Financing Agreements to the parties for whom Agent is
acting; provided, that, the rights of such Bank Product Provider hereunder and
under any of the other Financing Agreements shall consist exclusively of such Bank Product
Provider’s right to share in payments and collections out of the Collateral as set forth herein and
shall be subject in all respects to Section 13.3 hereof. In connection with any such distribution
of payments and collections, Agent shall be entitled to assume that no amounts are due to any Bank
Product Provider unless such Bank Product Provider has notified Agent and Administrative Borrower
in writing of any such liability owed to it as of the date of any such distribution.



SECTION 7. COLLATERAL REPORTING AND COVENANTS




     7.1 Collateral Reporting.



          (a) Borrowers shall provide Agent with the following documents in a form reasonably
satisfactory to Co-Collateral Agents:



               (i) as soon as possible after the end of each fiscal month (but in any event within twenty
(20) days after the end of any fiscal month that is not also the end of a fiscal quarter and thirty
(30) days after the end of any fiscal month that is also the end of a fiscal quarter), (A) a
Borrowing Base Certificate setting forth the calculation of the Borrowing Base as of the last
Business Day of the immediately preceding period, duly completed and executed by a Responsible
Officer of Parent, together with all schedules required pursuant to the terms of the Borrowing Base
Certificate duly completed, (B) inventory reports by division, location and the categories of raw
materials, finished goods and work-in-process (and including the amounts of Inventory and the value
thereof at any leased locations and at premises of warehouses, processors or other third parties
or consignees and including reports of standard costs, lower of cost or market and purchase price
variance), (C) reconciliation of inventory as set forth in the perpetual inventory reports and
general ledger of Borrowers and to the most recent monthly financial statement delivered pursuant
to Section 9.1(c) hereof, (D) agings of accounts receivable (together with a reconciliation to the
previous period’s aging and the general ledger and to the most recent monthly financial statement
delivered pursuant to Section 9.1(c) hereof), (E) agings of outstanding accounts payable (and
including information indicating the amounts owing to owners and lessors of leased premises,
warehouses, processors, and other third parties from time to time in possession of any Collateral);



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               (ii) In the event that Administrative Borrower so elects or Agent requires at any time an
Event of Default exists or has occurred and is continuing or Excess Availability is less than the
greater of $25,000,000 or twenty (20%) percent of the lesser of the Maximum Credit or the Borrowing
Base, on a weekly basis (but in no event earlier than the fifth (5th) Business Day following the
end of the immediately preceding fiscal month), the most recent Borrowing Base Certificate
delivered pursuant to Section 7.1(a)(i), setting forth the calculation of the Borrowing Base,
updated to include the following information and executed by a Responsible Officer of Parent: (A)
inventory reports by division, location and the categories of raw materials, finished goods and
work-in-process, (B) agings of accounts receivable and (C) agings of outstanding accounts payable;
provided, that, in the event that Administrative Borrower elects to provide the
foregoing more frequently than once each month, it shall do so for not less than twelve (12)
consecutive weeks or such shorter period as Agent may reasonably agree;



               (iii) In the event that Administrative Borrower so elects or Agent requires at any time an
Event of Default exists or has occurred and is continuing or Excess Availability is less than the
greater of $25,000,000 or twenty (20%) percent of the least of the Maximum Credit, the Revolving
Loan Limit, or the Borrowing Base, on a daily basis (A) a daily total for sales for the prior
Business Day, and (B) a daily total for collections for the prior Business Day; provided,
that, in the event that Administrative Borrower elects to provide the foregoing more
frequently than once each month, it shall do so for not less than twelve (12) consecutive weeks or
such shorter period as Agent may reasonably agree;



               (iv) as soon as possible after the end of each fiscal month (but in any event within twenty
(20) days after the end of any fiscal month that is not also the end of a fiscal quarter and thirty
(30) days after the end of any fiscal month that is also the end of a fiscal quarter), a
certificate by a Responsible Officer of Parent consisting of: (A) a statement confirming the
payment of rent and other amounts due to owners and lessors of real property owned or leased by
Borrowers where Inventory was regularly located in the immediately preceding month, subject to
year-end or monthly percentage rent payment adjustments and the payment of charges of outside
processors, except as described in such certificate, (B) the addresses of all new locations of
Inventory owned or leased by Borrowers and Guarantors and of outside processors, acquired, opened
or engaged since the date of the most recent
certificate delivered to Agent under this clause (ii) (or in the case of the first such
certificate, the date hereof), and (C) a report of any new deposit account established by any
Borrower or Guarantor with any bank or other financial institution since the date of the most
recent certificate delivered to Agent under this clause (ii) (or in the case of the first such
certificate, the date hereof), except with respect to any deposit account where the balance is
expected to be less than $100,000 in such deposit account, but only to the extent that the
aggregate amount of funds in all deposit accounts not previously notified to Agent is less than
$500,000, including in each case, the Borrower or Guarantor in whose name the account is
maintained, the account number, the name and address of the financial institution at which such
account is maintained, the purpose of such account and, if any, the amount held in such account on
or about the date of such report;



               (v) upon Co-Collateral Agents’ reasonable request, (A) reports of tons of steel on hand to the
extent such reports are maintained by Borrowers in tons prior to the date hereof, (B) copies of
customer statements, purchase orders, sales invoices, credit memos, remittance advices and reports,
and copies of deposit slips and bank statements, (C) copies of shipping and delivery documents, (D)
summary reports on sales and use tax collections, deposits and payments, including monthly sales
and use tax accruals, (E) true, correct and complete copies of all principal agreements, documents
or instruments evidencing Indebtedness for borrowed money or Capital Leases in excess of $1,000,000
that Agent has not otherwise received (provided, that, the Borrowers shall provide
copies of such principal agreements, documents or instruments to the extent such principal
agreements, documents or instruments evidence Indebtedness for borrowed money secured by a
Permitted Lien on acquired assets or property described in



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clause (t) of Section 1.143 promptly
after the acquisition of such assets or property) and (F) a certificate by a Responsible Officer of
Parent stating that all sales, use and excise taxes (that are known by a Responsible Officer to be
due and payable) have been paid when due as of the date of the certificate, except as specifically
described in such certificate; and



               (vi) such other reports as to the Collateral as Co-Collateral Agents shall reasonably request
from time to time.



          (b) Within ninety (90) days after the end of each fiscal year, the Borrowers shall provide to
Agent a certificate of a Responsible Officer of Parent listing all United States applications or
registrations of any material copyright, patent or trademark owned by a Borrower or Guarantor
(except for trademark or service mark applications that have been filed with the U.S. Patent and
Trademark Office on the basis of an “intent-to-use” with respect to such marks, unless and until a
statement of use or amendment to allege use is filed and accepted) since the date of the prior
certificate (or, in the case of the first such certificate, the date hereof).



          (c) Nothing contained in any Borrowing Base Certificate shall be deemed to limit, impair or
otherwise affect the rights of Agent or Co-Collateral Agents contained herein and in the event the
calculation of the Borrowing Base as set forth in any Borrowing Base Certificate is inaccurate or
in any manner conflicts with the terms hereof, Agent, Co-Collateral Agents and Lenders shall not be
bound by the terms thereof to the extent of such inaccuracy, conflict or inconsistency. Without
limiting the foregoing, Borrowers shall furnish to Co-Collateral Agents any information which
Co-Collateral Agents may reasonably request regarding the determination and calculation of any of
the amounts set forth in any Borrowing Base Certificate. Subject to the limitations set forth
herein, the Borrowing Base may be adjusted based on the information received by Agent or
Co-Collateral Agents pursuant to this Agreement.



     7.2 Accounts Covenants.



          (a) Administrative Borrower shall notify Agent promptly of (i) the assertion of any claims,
offsets, defenses or counterclaims by any account debtor of a Borrower, or any disputes with any
account
debtor of a Borrower or any settlement, adjustment or compromise thereof, to the extent any of
the foregoing exceeds $3,000,000 in any one case or $5,000,000 in the aggregate and (ii) any change
in the financial condition of any account debtor of a Borrower that Administrative Borrower
reasonably believes could reasonably be expected to adversely affect in any material respect the
payment of any Account owing by such account debtor. No credit, discount, allowance or extension
or agreement for any of the foregoing shall be granted to any account debtor of a Borrower except
in the ordinary course of a Borrower’s business.



          (b) With respect to each Account of a Borrower: (i) the amounts shown on any invoice
delivered to Agent or schedule thereof delivered to Agent shall be true and complete in all
material respects, (ii) no payments shall be made thereon except in accordance with Section 6.6,
and (iii) no credit, discount, allowance, extensions or agreements for any of the foregoing shall
be granted to any account debtor except as are provided for in the reports furnished to Agent in
accordance with Section 7.1 of this Agreement and except for credits, discounts, allowances,
extensions or agreements made or given in the ordinary course of each Borrower’s business.



          (c) Agent shall have the right at any time or times at reasonable intervals and based on such
samples of obligors in respect of Receivables as Agent may from time to time select, in Agent’s
name or in the name of a nominee of Agent, to verify the validity, amount or any other matter
affecting the payment of any Receivables or other related Collateral, by mail, telephone (during
which a representative of Administrative Borrower may be present), facsimile transmission or
otherwise. Prior to sending any



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forms to the account debtors, Agent will consult with
Administrative Borrower with respect to, and provide to Administrative Borrower copies of, such
forms of letter and other correspondence pursuant to which Agent conducts its account verifications
in respect of the Accounts of Borrowers.



     7.3 Inventory Covenants.
With respect to the Inventory: (a) each Borrower shall at all times maintain inventory
records that are correct and accurate in all material respects and itemizing and describing the
kind, type, quality and quantity of Inventory, such Borrower’s or Guarantor’s cost therefor and
daily withdrawals therefrom and additions thereto; (b) Borrowers and Guarantors shall conduct a
physical count of the Inventory either through periodic cycle counts or wall to wall counts, so
that all Inventory is subject to such counts at least once each year, but at any time or times (but
not more frequently than once in any fiscal quarter) as Agent may reasonably request at any time a
Default or an Event of Default exists or has occurred and is continuing, and promptly following
such physical inventory (whether through periodic cycle counts or wall to wall counts) shall supply
Agent at least once each fiscal quarter if any such counts are performed within such quarter, or
otherwise once each fiscal year, with a report in the form and with such specificity as may be
reasonably satisfactory to Agent concerning such physical count; (c) Borrowers shall not remove any
Inventory from the locations set forth or permitted herein, without the prior written consent of
Agent, except for sales of Inventory in the ordinary course of its business and except to move
Inventory directly from one location set forth or permitted herein to another such location and
except for Inventory shipped from the manufacturer thereof to a Borrower which is in transit to the
locations set forth or permitted herein; (d) Borrowers shall deliver or cause to be delivered to
Agent, at Borrowers’ expense, written appraisals as to the Inventory in form, scope and methodology
reasonably acceptable to Agent (and by an appraiser selected from a list of Agent-approved
appraisers to be supplied by Agent to the Administrative Borrower containing not fewer than two
appraisers, as such list may be augmented to include additional appraisers at the reasonable
request of the Administrative Borrower or otherwise amended by Agent, from time to time), addressed
to Agent and Lenders and upon which Agent and Lenders are expressly permitted to rely, upon Agent’s
request up to two (2) times in any twelve (12) consecutive month period, or at any time or times as
Excess Availability shall be less than the greater of $25,000,000 or twenty (20%) percent of the
least of the Maximum Credit, the Borrowing Base or the
Revolving Loan Limit, up to three (3) times in any twelve (12) consecutive month period, or at any
other time or times as Agent may request at any time an Event of Default shall exist or have
occurred and be continuing or at any other time at Agent’s expense; (e) as between Agent and
Lenders, on the one hand, and Borrowers, on the other hand, each Borrower assumes all
responsibility and liability arising from or relating to the use, sale or other disposition of the
Inventory (but nothing contained herein shall be construed as the basis for any liability of any
Borrower as to any third party); (f) as of the date hereof, Borrowers do not sell Inventory to any
customer on approval, or any other basis which entitles the customer to return or may obligate any
Borrower to repurchase such Inventory but shall give Agent prior written notice if such practice
changes together with such information with respect to the new policy as may reasonably be
requested by Agent; (g) Borrowers shall use commercially reasonable practices to keep the Inventory
generally in good and marketable condition in the ordinary course of business; and (h) Borrowers
shall not acquire or accept any Inventory on consignment or approval unless such Inventory has been
identified in a report with respect thereto provided by Administrative Borrower to Agent pursuant
to Section 7.1(a) hereof when required to be included in such report or Agent has otherwise
received prior written notice thereof in form and substance reasonably satisfactory to Agent.



     7.4 Equipment and Real Property Covenants.
With respect to the Equipment and Real Property: (a) Borrowers shall deliver or cause to be
delivered to Co-Collateral Agents any written appraisals as to the Equipment and Mortgaged Fee
Properties conducted by or on behalf of Borrowers or Term Loan Agent (and provided to Term Loan
Agent or any Term Loan Lender); (b) Borrowers shall keep all Equipment useful and necessary in the
business of Borrowers, taken as a whole, in good working order and condition (ordinary wear and
tear excepted); and (c) as between Agent and Lenders, on the one



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hand, and Borrowers and
Guarantors, on the other hand, each Borrower and Guarantor assumes all responsibility and liability
arising from or relating to the use, sale or other disposition of the Equipment or Real Property
(but nothing contained herein shall be construed as the basis for any liability of any Borrower or
Guarantor as to any third party).



     7.5 Power of Attorney.
Each Borrower and Guarantor hereby irrevocably designates and appoints Agent (and all persons
designated by Agent) as such Borrower’s and Guarantor’s true and lawful attorney-in-fact, and
authorizes Agent, in such Borrower’s, Guarantor’s or Agent’s name, subject to the terms of the
Intercreditor Agreement and the obligation of Agent to comply with applicable laws, to: (a) at any
time an Event of Default exists or has occurred and is continuing (i) demand payment on any
Collateral (to the extent such payment is due), (ii) enforce payment of any of the Collateral by
legal proceedings or otherwise, (iii) exercise all of such Borrower’s or Guarantor’s rights and
remedies to collect any Collateral, (iv) subject to pre-existing rights and licenses with respect
to the Term Loan Priority Collateral, sell or assign any Collateral upon such terms, for such
amount and at such time or times as the Agent deems advisable, (v) settle, adjust, compromise,
extend or renew any of the Collateral, (vi) discharge and release any Collateral, (vii) prepare,
file and sign such Borrower’s or Guarantor’s name on any proof of claim in bankruptcy or other
similar document against an account debtor or other obligor in respect of any Collateral, (viii)
clear Inventory the purchase of which was financed with a Letter of Credit through U.S. Bureau of
Customs and Border Protection or foreign export control authorities in such Borrower’s or
Guarantor’s name, Agent’s name or the name of Agent’s designee, and to sign and deliver to customs
officials powers of attorney in such Borrower’s or Guarantor’s name for such purpose, and to
complete in such Borrower’s or Guarantor’s or Agent’s name, any order, sale or transaction, obtain
the necessary documents in connection therewith and collect the proceeds thereof, (ix) sign,
subject to the Intercreditor Agreement, such Borrower’s or Guarantor’s name on notices to account
debtors or any secondary obligors or other obligors in respect of Collateral, and (x) do all acts
and things which are necessary, in Agent’s reasonable determination, to protect, preserve or
realize upon the Collateral or otherwise to
exercise any of the rights and remedies of Agent hereunder and under the other Financing Agreements
and (b) at any time a Dominion Event exists to (i) take control in any manner of any item of
payment received in or for deposit in the Concentration Accounts or other Cash Management Accounts
in accordance with this Agreement and any of the other Financing Agreements and (ii) have access to
any lockbox or postal box into which remittances from account debtors or other obligors in respect
of Collateral are sent or received if a Dominion Event exists, and (c) at any time to (i) take
control of, subject to the Intercreditor Agreement, any item of payment constituting Collateral
that is comes into the possession of Agent or any Lender (and remit such item to a Cash Management
Account or Concentration Account), (ii) endorse, subject to the Intercreditor Agreement, such
Borrower’s or Guarantor’s name upon any items of payment in respect of Collateral received by Agent
and any Lender and deposit the same in Agent’s account for application to the Obligations, (iii)
endorse, subject to the Intercreditor Agreement, such Borrower’s or Guarantor’s name upon any
chattel paper, document, instrument, invoice, or similar document or agreement relating to any
Receivable or any goods pertaining thereto or any other Collateral, including any warehouse or
other receipts, or bills of lading and other negotiable or non-negotiable documents, and (iv) sign
such Borrower’s or Guarantor’s name on any verification of amounts owing constituting Collateral.
Each Borrower and Guarantor hereby releases Agent and Lenders and their respective officers,
employees and designees from any liabilities arising from any act or acts under this power of
attorney and in furtherance thereof, whether of omission or commission, except as a result of
Agent’s or any Lender’s own, or their respective officers’, employees’ or designees’, gross
negligence or willful misconduct as determined pursuant to a final non-appealable order of a court
of competent jurisdiction.



     7.6 Right to Cure.
Subject to the Intercreditor Agreement, Co-Collateral Agents may, at their option, upon prior
notice to Administrative Borrower, at any time an Event of Default exists or has occurred and is
continuing (a) cure any default by any Borrower or Guarantor under any material



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agreement with a
third party that affects the Collateral, its value or the ability of Agent to collect, sell or
otherwise dispose of the Collateral or the rights and remedies of Agent or any Lender therein or
the ability of any Borrower or Guarantor to perform its obligations hereunder or under any of the
other Financing Agreements, (b) pay or bond on appeal any judgment entered against any Borrower or
Guarantor, (c) discharge taxes, liens, security interests or other encumbrances at any time levied
on or existing with respect to the Collateral and (d) pay any amount, incur any expense or perform
any act which, in Co-Collateral Agents’ judgment, is necessary or appropriate to preserve, protect,
insure or maintain the Collateral and the rights of Agent and Lenders with respect thereto. Agent
may add any amounts so expended to the Obligations and charge any Borrower’s account therefor or
may demand immediate payment thereof. Co-Collateral Agents and Lenders shall be under no
obligation to effect such cure, payment or bonding and shall not, by doing so, be deemed to have
assumed any obligation or liability of any Borrower or Guarantor.



     7.7 Access to Premises.
From time to time as reasonably requested by Agent, at the cost and expense of Borrowers, (a)
Agent or its designee shall have reasonable access to all of each Borrower’s and Guarantor’s
premises during normal business hours and after reasonable prior notice to Administrative Borrower,
or at any time and without notice to Administrative Borrower if an Event of Default exists or has
occurred and is continuing, for the purposes of inspecting, verifying and auditing the Collateral
and all of each Borrower’s and Guarantor’s books and records, including the Records, and (b) each
Borrower and Guarantor shall promptly furnish to Agent such copies of such books and records or
extracts therefrom as Agent may reasonably request, and Agent or Agent’s designee may use during
normal business hours such of any Borrower’s and Guarantor’s personnel, equipment, supplies and
premises as may be reasonably necessary for the foregoing and if an Event of Default exists or has
occurred and is continuing, subject to the
Intercreditor Agreement, for the collection of Receivables and realization of other Collateral.
Agent may conduct, at the expense of Borrowers, up to three (3) field examinations (or such lesser
number as Agent may determine) with respect to the Collateral in any twelve (12) consecutive month
period or at any time or times as Excess Availability shall be less than the greater of $25,000,000
or twenty (20%) percent of the least of the Maximum Credit, the Borrowing Base or the Revolving
Loan Limit, up to four (4) times in any twelve (12) consecutive month period, or at any other time
or times as Agent may request at any time an Event of Default shall exist or have occurred and be
continuing or at any other time at Agent’s expense.



     7.8 Bills of Lading and Other Documents of Title.



          (a) On and after the date of this Agreement, Borrowers shall cause all bills of lading or
other documents of title relating to goods purchased by a Borrower included or requested by
Borrowers to be included as Eligible Inventory in the calculation of the Borrowing Base and set
forth in the applicable Borrowing Base Certificate which are outside the United States of America
and in transit to the premises of such Borrower or the premises of a Freight Forwarder in the
United States of America (i) to be issued in a form so as to constitute negotiable documents as
such term is defined in the Uniform Commercial Code and (ii) other than those relating to goods
being purchased pursuant to a Letter of Credit, to be issued either to the order of Agent or such
other person as Agent may from time to time designate for such purpose as consignee or such
Borrower as consignee, as Agent may specify.



          (b) There shall be no more than three (3) originals of any such bills of lading and other
documents of title relating to goods being purchased by a Borrower which are outside the United
States of America and in transit to the premises of such Borrower or the premises of a Freight
Forwarder in the United States of America. As to any such bills of lading or other documents of
title, unless and until Agent shall direct otherwise, (i) two (2) originals of each of such bill of
lading or other document of title shall be delivered to such Freight Forwarder as such Borrower may
specify and that is party to a Collateral Access Agreement and (ii) one (1) original of each such
bill of lading or other document of title



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shall be delivered to Agent. To the extent that the
terms of this Section have not been satisfied as to any Inventory, such Inventory shall not
constitute Eligible Inventory, except as Agent may otherwise agree.



SECTION 8. REPRESENTATIONS AND WARRANTIES




     All representations and warranties made in this Agreement or any of the other Financing
Agreements shall survive the execution and delivery of this Agreement and shall be deemed to have
been made again to Agent and Lenders on the date of each additional borrowing or Letter of Credit
issued hereunder, except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties shall have been true
and accurate on and as of such earlier date). Each Borrower and Guarantor hereby represents and
warrants to Agent, Lenders and Issuing Bank the following:



     8.1 Financial Condition. 



          (a) The audited consolidated balance sheets of Parent and its consolidated Subsidiaries as of
November 2, 2008 and October 28, 2007 and the consolidated statements of income, shareholders’
equity and cash flows for the three fiscal years ended November 2, 2008 reported on by and
accompanied by unqualified reports from Ernst & Young, LLP, present fairly, in all material
respects, the consolidated financial condition as at such date, and the consolidated results of
operations and consolidated cash flows for the respective fiscal years then ended, of Parent and
its consolidated Subsidiaries. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby (except as approved by a Responsible
Officer, and disclosed in any such schedules and notes). During the period from November 2,
2008 to and including the Closing Date, there has been no sale, transfer or other disposition by
Parent and its consolidated Subsidiaries of any material part of the business or property of Parent
and its consolidated Subsidiaries, taken as a whole, and no purchase or other acquisition by any of
them of any business or property (including any Equity Interests of any other Person) material in
relation to the consolidated financial condition of Parent and its consolidated Subsidiaries, taken
as a whole, in each case, which is not reflected in the foregoing financial statements or in the
notes thereto and has not otherwise been disclosed in writing to Agent and Lenders on or prior to
the Closing Date.



          (b) The pro forma balance sheet and statements of operations of Parent and its consolidated
Subsidiaries, copies of which have heretofore been furnished to Agent and each Lender, are the
balance sheet and statements of operations of Parent and its consolidated Subsidiaries as of August
2, 2009 adjusted to give effect (as if such events had occurred on such date for purposes of the
balance sheet and on November 3, 2008, for purposes of the statement of operations), to the
consummation of the Transactions, and the Loans and Letters of Credit hereunder on the Closing
Date.



     8.2 No Change; Solvent.
There has not been any event, change, circumstance or development (including any damage,
destruction or loss whether or not covered by insurance) which, individually or in the aggregate,
has had, or could reasonably be expected to have, a Material Adverse Effect on Parent and its
consolidated Subsidiaries. Since the Closing Date, except as and to the extent disclosed on
Schedule 8.2, there has been no development or event relating to or affecting any Borrower
or Guarantor which has had or could reasonably be expected to have a Material Adverse Effect (after
giving effect to: (a) the consummation of the Transactions, (b) the making of the Loans and Letters
of Credit to be made on the Closing Date and the application of the proceeds thereof as
contemplated hereby, and (c) the payment of actual or estimated fees, expenses, financing costs and
tax payments related to the transactions contemplated hereby). Since November 2, 2008, except
otherwise permitted under this Agreement and each of the other Financing Agreements, no dividends
or other distributions have been declared, paid or made upon the Equity Interests of Parent, nor
have any of the Equity Interests of Parent



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been redeemed, retired, purchased or otherwise acquired
for value by Parent or any of its Subsidiaries. As of the date hereof, after the creation of the
Obligations, the security interests of Agent and after giving effect to the consummation of the
transactions described in preceding clauses (a) through (c) of the second preceding sentence, each
Borrower is Solvent.



     8.3 Corporate Existence; Compliance with Law.
Each Borrower and Guarantor (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, (b) has the corporate or other
organizational power and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is currently engaged,
except to the extent that the failure to have such legal right could not be reasonably expected to
have a Material Adverse Effect, (c) is duly qualified as a foreign corporation or limited liability
company and in good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification, other than in
such jurisdictions where the failure to be so qualified and in good standing could not reasonably
be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law, except to the extent that the failure to comply therewith could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.



     8.4 Corporate Power; Authorization; Enforceable Obligations.
Each Borrower and Guarantor has the corporate or other organizational power and authority, and
the legal right, to make, deliver and perform the Financing Agreements to which it is a party and,
in the case of each Borrower or Guarantor, to obtain Loans and Letters of Credit hereunder, and
each such Borrower or Guarantor has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Financing Agreements to which it is a
party and, in the case of each Borrower, to authorize the Loans or Letters of Credit to it, if any,
on the terms and conditions of this Agreement and any requests for Letters of Credit. No consent or
authorization of, filing with, notice to or other similar act by or in respect of, any Governmental
Authority or any other Person is required to be obtained or made by or on behalf of any Borrower or
Guarantor in connection with the execution, delivery, performance, validity or enforceability of
the Financing Agreements to which it is a party or, in the case of each Borrower, with Loans and
Letters of Credit to it, if any, hereunder, except for (a) consents, authorizations, notices and
filings described in Schedule 8.4, all of which have been obtained or made prior to the
Closing Date, (b) filings to perfect the security interests created hereunder and by the other
Financing Agreements (to the extent provided herein and therein), and (c) consents, authorizations,
notices and filings which the failure to obtain or make could not reasonably be expected to have a
Material Adverse Effect. This Agreement has been duly executed and delivered by each Borrower and
Guarantor, and each of the other Financing Agreements to which any Borrower or Guarantor is a party
will be duly executed and delivered on behalf of such Borrower or Guarantor. This Agreement
constitutes a legal, valid and binding obligation of each Borrower and Guarantor and each of the
other Financing Agreements to which any Borrower or Guarantor is a party when executed and
delivered will constitute a legal, valid and binding obligation of such Borrower or Guarantor,
enforceable against such Borrower or Guarantor in accordance with its terms, except as
enforceability may be limited by applicable domestic or foreign bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally
and by general equitable principles (whether enforcement is sought by proceedings in equity or at
law).



     8.5 No Legal Bar.
The execution, delivery and performance of the Financing Agreements by any Borrower or Guarantor,
the Loans and Letters of Credit hereunder and the use of the proceeds thereof (a) will not (i) to
the knowledge of any Responsible Officer of any Borrower or Guarantor, violate any of the
Anti-Terrorism Laws or (ii) violate any Requirement of Law (other than the Anti-Terrorism Laws) or
Contractual Obligation of such Borrower or Guarantor in any respect that has or could reasonably be
expected to have a Material Adverse Effect and (b) will not result in, or require the creation or
imposition



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of any Lien (other than Permitted Liens) on any of its properties or revenues pursuant
to any such Requirement of Law or Contractual Obligation.



     8.6 No Material Litigation.
No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is
pending or, to the best of the knowledge of any Borrower or Guarantor, threatened by or against
Parent or any of its Subsidiaries or against any of their respective properties or revenues, (a)
except as described on Schedule 8.6, which is so pending or threatened at any time on or
prior to the Closing Date and relates to any of the Financing Agreements or any of the transactions
contemplated hereby or thereby or (b) which could reasonably be expected to have a Material Adverse
Effect.



     8.7 No Default.
No Default or Event of Default has occurred and is continuing.



     8.8 Ownership of Property; Liens.
Each of Parent and its Subsidiaries has good title in fee simple to, or a valid leasehold interest
in, all its Mortgaged Fee Properties, and good title to, or a valid leasehold interest in, all its
other material property and none of such property is subject to any Lien or other encumbrance,
except for Permitted Liens. Except for the Excluded Real Properties, the Mortgaged Fee Properties
as listed on Part I of Schedule 1.120 together constitute all the material real properties
owned in fee by Borrowers and Guarantors as of the Closing Date.



     8.9 Intellectual Property.
Parent and each of its Subsidiaries owns, or has the legal right to use, all Intellectual Property
and Foreign Intellectual Property necessary for each of them to conduct its business as currently
conducted except for those the failure to own or have such legal right to use could not be
reasonably expected to have a Material Adverse Effect. Except as provided on Schedule 8.9,
no claim has been asserted and is pending by any Person against Parent or any of its Subsidiaries
challenging or questioning the use of any such Intellectual Property or Foreign Intellectual
Property or the validity or effectiveness of any such Intellectual Property or Foreign Intellectual
Property, nor does any Borrower or Guarantor Party know of any such claim, and, to the best of the
knowledge of any Borrower or Guarantor, the use of such Intellectual Property or Foreign
Intellectual Property by Parent and its Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements which in the aggregate, could not be reasonably expected
to have a Material Adverse Effect. To the best of any Borrower’s or Guarantor’s actual knowledge,
no trademark, servicemark, copyright or other Intellectual Property or Foreign Intellectual
Property at any time used by any Borrower or Guarantor which is owned by another person, or owned
by such Borrower or Guarantor subject to any security interest, lien, collateral assignment, pledge
or other encumbrance in favor of any person other than Agent, is affixed to or incorporated or used
in any Eligible Inventory, except (a) to the extent permitted by such person or (b) that would not
materially impair the Agent’s or Lenders’ rights or remedies with respect to such Eligible
Inventory under applicable law.



     8.10 No Burdensome Restrictions.
Neither Parent nor any of its Subsidiaries is in violation of (a) to the knowledge of any
Responsible Officer of any Borrower or Guarantor, any Anti-Terrorism Law or (b) any Requirement of
Law (other than an Anti-Terrorism Law) or Contractual Obligation of or applicable to Parent or any
of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect.



     8.11 Taxes.
Except for any taxes with respect to which the failure to pay individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect and except for taxes the
validity of which are currently being contested in good faith by appropriate proceedings diligently
conducted and with respect to which reserves in conformity with GAAP have been provided on the
books of Parent or its Subsidiaries, as the case may be, each of Parent and its Subsidiaries has
filed or caused to be filed all United States federal income tax returns and all other material tax
returns which are required to be filed by it and has paid (a) all taxes shown to be due and payable
on such returns and (b) all taxes



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shown to be due and payable on any assessments of which it has
received notice made against it or any of its property (including the Mortgaged Fee Properties) and
all other taxes, fees or other charges imposed on it or any of its property by any Governmental
Authority; and no tax lien or other encumbrance has been filed, and no claim is being asserted,
with respect to any such tax, excluding, however, any Lien on the Mortgaged Fee Properties existing
on the Closing Date.



     8.12 Federal Regulations.
No part of the proceeds of any Loans or Letters of Credit will be used for any purpose which
violates the provisions of the Regulations of the Board, including without limitation, Regulation
T, Regulation U or Regulation X of the Board. If requested by any Lender or Agent, Administrative
Borrower will furnish to Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form G-3 or FR Form U-1, referred to in said Regulation U.



     8.13 Employee Benefits.



          (a) Each Pension Plan is in compliance in all respects with the applicable provisions of
ERISA, the Code and other Federal or State law where the failure to comply has or could reasonably
be expected to have a Material Adverse Effect. Each Pension Plan which is intended to qualify
under Section 401(a) of the Code has received a favorable determination letter from the Internal
Revenue Service and to the best of any Borrower’s or Guarantor’s knowledge, nothing has occurred
which would cause the loss of such qualification, which has or could reasonably be expected to have
a Material Adverse Effect. Each Borrower and its ERISA Affiliates have made all required
contributions to any Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.



          (b) There are no pending, or to the best of any Borrower’s or Guarantor’s knowledge,
threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan which has or could reasonably be expected to have a Material Adverse Effect. There has
been no prohibited transaction or violation of the fiduciary responsibility rules with respect to
any Plan where it has or could reasonably be expected to have a Material Adverse Effect.



          (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) based on the
latest valuation of each Pension Plan and on the actuarial methods and assumptions employed for
such valuation (determined in accordance with the assumptions used for funding such Pension Plan
pursuant to Section 412 of the Code), the aggregate current value of accumulated benefit
liabilities of such Pension Plan under Section 4001(a)(16) of ERISA does not exceed the aggregate
current value of the assets of such Pension Plan or, to the extent that the aggregate current value
of accumulated benefit liabilities of such Pension Plan under Section 4001(a)(16) of ERISA exceeds
the aggregate current value of the assets of such Pension Plan, such underfunding could not
reasonably be expected to have a Material Adverse Effect and Borrowers and Guarantors have complied
and shall continue to comply with the requirements of ERISA with respect to the funding of their
Pension Plans; (iii) each Borrower and Guarantor, and their ERISA Affiliates, have not incurred and
do not reasonably expect to incur, any liability under Title IV of ERISA with respect to any Plan
(other than premiums due and not delinquent under Section 4007 of ERISA) which has or could
reasonably be expected to have a Material Adverse Effect; (iv) each Borrower and Guarantor, and
their ERISA Affiliates, have not incurred and do not reasonably expect to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in
such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan which has
or could reasonably be expected to have a Material Adverse Effect; and (v) each Borrower and
Guarantor, and their ERISA Affiliates, have not engaged in a transaction that would be subject to
Section 4069 or 4212(c) of ERISA that has or could reasonably be expected to have a Material
Adverse Effect.



     8.14 Collateral.



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          (a) Upon execution and delivery hereof and thereof by the parties hereto and thereto, this
Agreement and the other Financing Agreements that include the grant of a security interest in or
Lien or mortgage on any property or assets (other than the Excluded Property and the Excluded Real
Properties) of any Borrower or Guarantor to secure the Obligations, will be effective to create (to
the extent described herein and therein) in favor of Agent for the benefit of the Secured Parties,
a valid security interest (to the
extent provided herein and therein) in the Collateral described herein and therein, except (i)
as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting creditors’ rights
generally, (ii) general equitable principles (whether considered in a proceeding in equity or at
law), and (iii) an implied covenant of good faith and fair dealing, and (iv) with respect to the
enforceability of such Liens, Collateral for which the perfection of Liens thereon require filings
in or other actions under the laws of a jurisdiction outside of the United States of America, any
state, territory or political division thereof or the District of Columbia or the recording of an
assignment or other transfer of title to the Agent, or the recording of other applicable documents
in the United States Patent and Trademark Office of the United States Copyright Office.



          (b) Such security interests, other than those with respect to the Specified Assets, are, or in
the case of Collateral in which any Borrower or Guarantor obtains rights after the date hereof will
be, with respect to Working Capital Priority Collateral (as defined in the Intercreditor
Agreement), perfected, first priority security interests, subject as to priority only to the
Permitted Liens that have priority by operation of law or by agreement and with respect to Term
Loan Priority Collateral, perfected second priority security interests, subject as to priority only
to the Permitted Liens that have priority by operation of law or by agreement and upon (i) in the
case of all Collateral in which a security interests may be perfected by filing a financing
statements under the UCC, the filing of the UCC financing statement naming such Borrower or
Guarantor as “debtor” and Agent as “secured party” and describing the Collateral in the filing
offices set forth opposite such Borrower’s or Guarantor’s name on Schedule 8.14 hereof (as
such schedule may be amended or supplemented from time to time), (ii) with respect to any deposit
account, securities account, commodity account, securities entitlement or commodity contract, the
execution of Control Agreements, (iii) in the case of U.S. copyrights, trademarks and patents to
the extent that UCC financing statements may be insufficient to establish the rights of a secured
party as to certain parties, the recording of the appropriate filings based on the form of
Copyright Security Agreement, Trademark Security Agreement or Patent Security Agreement, as
applicable, executed pursuant hereto in the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, (iv) in the case of letter-of-credit rights that are
not supporting obligations (as defined in the UCC), the execution by the issuer or any nominated
person of an agreement granting control to Agent over such letter-of-credit rights, (v) in the case
of electronic chattel paper, the completion of steps necessary to grant control to Agent over such
electronic chattel paper, (vi) in the case of Commercial Tort Claims arising after the date hereof,
sufficient identification of such Commercial Tort Claims and compliance by the Borrower with the
second sentence of Section 5.7(g), in each case with respect to clauses (ii) through (vi) above,
such perfection only to the extent required pursuant to Section 5.2.



     8.15 Investment Company Act; Other Regulations.
None of the Borrowers is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act. None of the Borrowers is subject to
regulation under any Federal or State statute or regulation (other than Regulation X of the Board)
which limits its ability to incur Indebtedness as contemplated hereby.



     8.16 Subsidiaries.
Schedule 8.16 sets forth all the Subsidiaries of Parent at the Closing Date (after giving
effect to the Transactions), the jurisdiction of their organization and the direct or indirect
ownership interest of Parent therein.



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     8.17 Purpose of Loans.
The proceeds of Revolving Loans, Swing Line Loans and Letters of Credit shall be used by to finance
the working capital and business requirements of, and for general corporate purposes of, Borrowers
and Guarantors.



     8.18 Environmental Compliance.



          (a) Except as set forth on Schedule 8.18 hereto, Borrowers, Guarantors and any
Subsidiary of any Borrower or Guarantor have not generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials, on or off its premises
(whether or not owned by it) in any manner which at any time violates any applicable Environmental
Law or Permit where such violation has or could reasonably be expected to have a Material Adverse
Effect, and the operations of Borrowers, Guarantors and any Subsidiary of any Borrower or Guarantor
complies with all Environmental Laws and all Permits where the failure to so comply has or could
reasonably be expected to have a Material Adverse Effect.



          (b) Except as set forth on Schedule 8.18 hereto, there has been no investigation by
any Governmental Authority or any proceeding, complaint, order, directive, claim, citation or
notice by any Governmental Authority or any other person nor is any pending or to the best of any
Borrower’s or Guarantor’s knowledge threatened in writing, with respect to any non compliance with
or violation of the requirements of any Environmental Law by any Borrower or Guarantor and any
Subsidiary or the release, spill or discharge, threatened or actual, of any Hazardous Material or
the generation, use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or any other environmental, health or safety matter, which in
each instance, has or could reasonably be expected to have a Material Adverse Effect.



          (c) Except as set forth on Schedule 8.18 hereto, Borrowers, Guarantors and their
Subsidiaries have no liability (contingent or otherwise) in connection with a release, spill or
discharge, threatened or actual, of any Hazardous Materials or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials
which in any case or in the aggregate, has or could reasonably be expected to have a Material
Adverse Effect.



          (d) Except as set forth on Schedule 8.18 hereto, Borrowers, Guarantors and their
Subsidiaries have all Permits required to be obtained or filed in connection with the operations of
Borrowers and Guarantors under any Environmental Law and all Permits are valid and in full force
and effect where the failure to do so has or could reasonably be expected to have a Material
Adverse Effect.



     8.19 Name; State of Organization; Chief Executive Office; Collateral Locations.



          (a) As of the Closing Date, the exact legal name of each Borrower and Guarantor is as set
forth on the signature page of this Agreement and in Schedule 8.19 hereto. No Borrower or
Guarantor has, during the five years prior to the date of this Agreement, been known by or used any
other corporate or fictitious name or been a party to any merger or consolidation, or acquired all
or substantially all of the assets of any Person, except as set forth in Schedule 8.19.



          (b) As of the Closing Date, each Borrower and Guarantor is an organization of the type and
organized in the jurisdiction set forth in Schedule 8.19 and Schedule 8.19
accurately sets forth the organizational identification number of each Borrower and Guarantor or
accurately states that such Borrower or Guarantor has none and accurately sets forth the federal
employer identification number of each Borrower and Guarantor.



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          (c) Schedule 8.19 identifies (i) the chief executive office and mailing address of
each Borrower and Guarantor, (ii) a location within the United States or Canada at which a copy of
Records concerning Accounts and Inventory of each Borrower and Guarantor are maintained and (iii)
any and all locations which are not owned by a Borrower or Guarantor as of the date hereof where
Inventory is located (other than such locations where inventory is located having a value not in
excess of $150,000 at any one location, and not exceeding $1,000,000 in the aggregate), and sets
forth the owners and/or operators thereof, in each case subject to the rights of any Borrower or
Guarantor to move its chief executive office, change its mailing address, change the location at
which Records are maintained or establish new locations in accordance with Sections 9.4 and 9.8
below.



     8.20 Labor Disputes.



          (a) Set forth on Schedule 8.20 is a list (including dates of termination) of all
collective bargaining or similar agreements between or applicable to each Borrower and Guarantor
and any union, labor organization or other bargaining agent in respect of the employees of any
Borrower or Guarantor on the date hereof.



          (b) Except as could not be reasonably expected to have a Material Adverse Effect, there is (i)
no unfair labor practice complaint pending against any Borrower or Guarantor or, to the best of any
Borrower’s or Guarantor’s knowledge, threatened in writing against it, before the National Labor
Relations Board, and no grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is pending on the date hereof against any Borrower or Guarantor or,
to best of any Borrower’s or Guarantor’s knowledge, threatened against it, and (ii) no strike,
labor dispute, slowdown or stoppage is pending against any Borrower or Guarantor or, to the best of
any Borrower’s or Guarantor’s knowledge, threatened against any Borrower or Guarantor.



     8.21 Bank Accounts. All of the deposit accounts, investment accounts or other accounts in the name of or used by any
Borrower or Guarantor (other then the TL Deposit Account (as defined in the Intercreditor
Agreement)) maintained at any bank or other financial institution are set forth on Schedule
8.21 hereto, subject to the right of each Borrower and Guarantor to establish new accounts in
accordance with Section 5.2 hereof.



     8.22 Insurance. Schedule 8.22 sets forth a complete and correct listing of all insurance that is (a)
maintained by Borrowers and Guarantors and (b) material to the business and operations of Parent
and its Subsidiaries taken as a whole and maintained by Subsidiaries other than Borrowers and
Guarantors, in each case as of the Closing Date, with the amounts insured (and any deductibles) set
forth therein.



     8.23 Eligible Accounts.
As of the date of any Borrowing Base Certificate, all Accounts included in the calculation of
Eligible Accounts on such Borrowing Base Certificate satisfy all requirements of an “Eligible
Account” hereunder.



     8.24 Eligible Inventory.
As of the date of any Borrowing Base Certificate, all Inventory included in the calculation of
Eligible Inventory on such Borrowing Base Certificate satisfy all requirements of an “Eligible
Inventory” hereunder.



     8.25 Interrelated Businesses
Borrowers and Guarantors make up a related organization of various entities constituting an
overall economic and business enterprise. One or more of the Borrowers and Guarantors may from
time to time purchase or sell goods from, to or for the benefit of, or render services, make loans
or advances, or provide other financial accommodations to or for the benefit of, one or more of the
other Borrowers and Guarantors. Borrowers and Guarantors each expect to derive substantial benefit
from the Loans and other financial accommodations hereunder.



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     8.26 OFAC. No Borrower, Guarantor or Subsidiary of any Borrower or Guarantor: (a) is a Sanctioned Person,
(b) has any of its assets in Sanctioned Entities, or (c) derives any of its operating income from
investments in, or transactions with Sanctioned Persons or Sanctioned Entities. The proceeds of
any Loan will not be used and have not been used to fund any operations in, finance any investments
or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.



     8.27 True and Correct Disclosure. As of the Closing Date, all information furnished by or on behalf of any Borrower or Guarantor to
Agent and Lenders for purposes of or in connection with this Agreement, the other Financing
Agreements or any transaction contemplated hereby or thereby, but excluding projections, is, taken
as a whole, true and correct in all material respects on the date as of which such information is
dated or certified and does not omit to state any material fact necessary to make such information
(taken as a whole) not materially misleading in their presentation of Parent and its Subsidiaries
(taken as a whole) at such time in light of the circumstances under which such information was
provided. The written information hereafter furnished by or on behalf of any Borrower or Guarantor
to Agent or any Lender in any Borrowing Base Certificate will be true and accurate in all material
respects. No event or circumstance has occurred which has had or could reasonably be expected to
have a Material Adverse Effect, which has not been fully and accurately disclosed to Agent in
writing prior to the date hereof. It is understood that (a) no representation or warranty is made
concerning the forecasts, estimates, pro forma information, projections and statements as to
anticipated future performance or conditions, and the assumptions on which they were based,
contained in any such information, reports, financial statements, exhibits or schedules, except
that as of the date such forecasts, estimates, pro forma information, projections and statements
were generated, (i) such forecasts, estimates, pro forma information, projections and statements
were based on the good faith assumptions of the management of Parent and its Subsidiaries and (ii)
such assumptions were believed by such management to be reasonable and (b) such forecasts,
estimates, pro forma information and statements, and the assumptions on which they were based, may
or may not prove to be correct.



     8.28 Delivery of Investment Documents.
Borrowers have delivered to Agent a complete copy of the Investment Documents (including all
exhibits, schedules, disclosure letters referred to therein or delivered pursuant thereto, if any)
and all amendments thereto, waivers relating thereto and other side letters or agreements affecting
the terms thereof in any material respect.



SECTION 9. AFFIRMATIVE COVENANTS




     9.1 Financial Statements.



          (a) Borrowers shall furnish or cause to be furnished to Agent for Agent to make available to
each Lender (and Agent agrees to so make available such copies): 



               (i) as soon as available, but in any event not later than the fifth (5th) Business
Day after the ninetieth (90th) day following the end of each fiscal year of Parent
ending on or after November 1, 2009, a copy of the consolidated balance sheet of Parent and its
consolidated Subsidiaries as at the end of such year and the related consolidated statements of
operations, changes in common stockholders’ equity and cash flows for such year, setting forth in
each case, in comparative form the figures for and as of the end of the previous year, reported on
without a “going concern” or like qualification, exception, explanation or comment, or
qualification arising out of the scope of the audit, by Ernst &Young, LLP or other independent
certified public accountants of nationally recognized standing acceptable to Agent in its
reasonable judgment (it being agreed that the furnishing of Parent’s annual report on Form 10-K for
such year, as filed with the United States Securities and Exchange Commission, will satisfy the
obligation under this Section 9.1(a)(i) with respect to such year except with respect to the



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requirement that such financial statements be reported on without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the audit);



               (ii) as soon as available, but in any event not later than the fifth (5th) Business
Day after the forty-fifth (45th) day following the end of each of the first three (3)
quarterly periods of each fiscal year of Parent, the unaudited consolidated balance sheet of Parent
and its consolidated Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of operations and cash flows of Parent and its consolidated Subsidiaries
for such quarter and the portion of the fiscal year through the end of such quarter, setting forth
in each case, in comparative form the figures for and as of the corresponding periods of the
previous year, certified by a Responsible Officer of Parent as being fairly stated in all material
respects (subject to normal year-end audit and other adjustments) (it being agreed that the
furnishing of Parent’s quarterly report on Form 10-Q for such quarter, as filed with the United
States Securities and Exchange Commission, will satisfy the obligations under this Section
9.1(a)(ii) with respect to such quarter);



               (iii) as soon as available, but in any event not later than the fifth (5th)
Business Day following the thirtieth (30th) day following the end of each fiscal month
(other than any month that is the last month of a fiscal quarter), the unaudited consolidated
monthly management reports of Parent and its consolidated Subsidiaries (and to the extent prepared
by or on behalf of Parent or any of its Subsidiaries, unaudited consolidating monthly financial
reports of Parent and its consolidated Subsidiaries) as at the end of such month in form and scope
substantially consistent with prior monthly management reports of Parent received by Agent and
Lenders prior to the date hereof (or otherwise reasonably satisfactory to Agent) including (A) an
income report of Parent and its consolidated Subsidiaries for such month, setting forth in
comparative form the figures for the immediately preceding fiscal month and as of the end of the
corresponding month during the previous fiscal year (and to the extent otherwise prepared by or on
behalf of Parent or any of its Subsidiaries, including a comparative form to the figures for and as
of the end of the corresponding month in the business plan previously delivered applicable to such
period under Section 9.2(a)(iii) hereof) and (B) a balance sheet of Parent and its consolidated
Subsidiaries for such month setting forth in comparative form the figures for the immediately
preceding fiscal month and as of the end of the immediately preceding fiscal year (and to the
extent otherwise prepared by or on behalf of Parent or any of its Subsidiaries, including a
comparative form to the figures for and as of the end of the corresponding month in the business
plan previously delivered applicable to such period under Section 9.2(a)(iii) hereof); and



          (b) All such financial statements delivered pursuant to Sections 9.1(a)(i) or (a)(ii) to be
(and, in the case of any financial statements delivered pursuant to subsection 9.1(a)(ii) shall be
certified by a Responsible Officer of Parent as being) complete and correct in all material
respects in conformity with
GAAP and to be (and, in the case of any financial statements delivered pursuant to subsection
9.1(a)(ii) shall be certified by a Responsible Officer of Parent as being) prepared in reasonable
detail in accordance with GAAP applied consistently throughout the periods reflected therein and
with prior periods that began on or after the Closing Date (except as approved by such accountants
or officer, as the case may be, and disclosed therein, and except, in the case of any financial
statements delivered pursuant to Section 9.1(a)(ii), for the absence of certain notes).



     9.2 Certificates; Other Information.



          (a) Borrowers shall furnish or cause to be furnished to Agent for delivery to each Lender (and
Agent agrees to make and so deliver such copies):



               (i) concurrently with the delivery of the financial statements and reports referred to in
Sections 9.1(a), a certificate signed by a Responsible Officer of Parent substantially in the form
of



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Exhibit I hereto, together with a schedule thereto setting forth the calculations
required to determine compliance (whether or not such compliance is at the time required) with the
covenant set forth in subsection 11.1 and a written summary of material changes in GAAP and in the
consistent application thereof that materially affected the financial covenant calculations for the
applicable period;



               (ii) concurrently with the delivery of the financial statements referred to in Section 9.1(a),
the insurance binder or other evidence of insurance for any insurance coverage of Borrowers,
Guarantors or any Subsidiary, if any, that was renewed, replaced or modified during the period
covered by such financial statements;



               (iii) as soon as available, but in any event not later than the fifth (5th)
Business Day after the ninetieth (90th) day after the beginning of each fiscal year of Parent,
beginning with the fiscal year ending November 1, 2009, a copy of the annual business plan by
Parent of the projected operating budget (including an annual consolidated balance sheet, income
statement and statement of cash flows of Parent and its Subsidiaries in each case substantially in
the same format and with the same scope of information as in the projections most recently provided
to Agent prior to the date hereof) for such fiscal year, which projected financial statements shall
be prepared on a monthly basis for such year and shall represent the reasonable estimate by
Borrowers and Guarantors of the future financial performance of Parent and its Subsidiaries for the
periods set forth therein and shall have been prepared on the basis of the assumptions set forth
therein which Borrowers and Guarantors believe are reasonable as of the date of preparation in
light of current and reasonably anticipated business conditions (it being understood that actual
results may differ from those set forth in such projected financial statements), each such business
plan to be accompanied by a certificate signed by a Responsible Officer of Parent to the effect
that such Responsible Officer believes such projections to have been prepared on the basis set
forth herein;



               (iv) substantially at the same time as the same are sent, copies of all financial statements
and reports which Parent sends to its public security holders, and at substantially the same time
as the same are filed, copies of all financial statements and periodic reports which Parent may
file with the United States Securities and Exchange Commission or any successor or analogous
Governmental Authority;



               (v) substantially at the same time as the same are filed, copies of all registration
statements and any amendments and exhibits thereto, which Parent may file with the United States
Securities and Exchange Commission or any successor or analogous Governmental Authority, and such
other documents or instruments as may be reasonably requested by Agent in connection therewith; and



               (vi) promptly, such additional financial and other information as Agent or any Lender may from
time to time reasonably request.



          (b) Borrowers and Guarantors hereby acknowledge that, subject to Section 15.5, Agent and/or
its Affiliates may make available to Lenders and Issuing Bank materials and/or information provided
by or on behalf of Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on IntraLinks or another similar electronic system.



          (c) Agent is hereby authorized to deliver a copy of any financial statement or any other
information relating to the business of Borrowers and Guarantors to any court or other Governmental
Authority or to any Lender or Participant or prospective Lender or Participant or any Affiliate of
any Lender or Participant subject to Section 15.5 hereof. Each Borrower and Guarantor hereby
irrevocably authorizes and requests that all accountants or auditors to deliver to Agent, at
Borrowers’ expense, copies of the financial statements of any Borrower and Guarantor and any
reports or management letters prepared by such accountants or auditors on behalf of any Borrower or
Guarantor and to disclose to Agent



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and Lenders such information as they may have regarding the
business of any Borrower and Guarantor with copies to Administrative Borrower. Agent will not meet
with the accountants or auditors except after reasonable prior notice to Administrative Borrower
and with the invitation to a Responsible Officer of Parent to be present.



     9.3 Payment of Obligations.
Each Borrower and Guarantor shall, and shall cause any Subsidiary to, pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, including taxes, except (a) where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings diligently conducted and
reserves in conformity with GAAP with respect thereto have been provided on the books of Parent or
any of its Subsidiaries, as the case may be or (b) to the extent such failure to pay, discharge or
otherwise satisfy the same could not reasonably be expected to have a Material Adverse Effect.



     9.4 Conduct of Business and Maintenance of Existence.



          (a) Each Borrower and Guarantor shall at all times (i) preserve, renew and keep in full force
and effect its corporate or other organizational existence and rights and franchises with respect
thereto and (ii) maintain in full force and effect all licenses, approvals, authorizations and
Permits necessary to carry on its business, (iii) comply with all applicable Anti-Terrorism Laws,
and (iv) comply with all Contractual Obligations and Requirements of Law (other than Anti-Terrorism
Laws), except (A) in each case as permitted under Section 10.1 hereof or otherwise permitted
hereunder or under any of the other Financing Agreements or (B) under clauses (i), (ii) or (iv) of
this Section, as applicable, where the failure to do so, individually or in the aggregate, has or
could reasonably be expected to have a Material Adverse Effect.



          (b) No Borrower or Guarantor shall change its name unless each of the following conditions is
satisfied: (i) Agent shall have received not less than fifteen (15) days (or such shorter time as
Agent may agree) prior written notice from Administrative Borrower of such proposed change in its
corporate name, which notice shall accurately set forth the new name; and (ii) Agent shall have
received a copy of the amendment to the certificate of incorporation, certificate of formation or
other organizational document of such Borrower or Guarantor, as applicable, providing for the name
change certified by the Secretary of State of the jurisdiction of incorporation or organization of
such Borrower or Guarantor as soon as it is available.



          (c) No Borrower or Guarantor shall change its chief executive office or its mailing address or
organizational identification number (or if it does not have one, shall not acquire one) unless
Agent shall have received not less than fifteen (15) days’ (or such shorter time as Agent may
agree) prior written notice from Administrative Borrower of such proposed change. No Borrower or
Guarantor shall change its type of organization, jurisdiction of organization or other legal
structure (except that a Borrower, Guarantor or Subsidiary may convert (either directly or by way
of merger) into a corporation, limited liability company or limited partnership or other form of
legal entity acceptable to Agent), unless Agent shall have received prior written notice from
Administrative Borrower of such proposed change, which notice shall accurately set forth a
description of the new form, and Agent shall have received such agreements, documents, and
instruments as Agent may deem reasonably necessary or desirable in connection therewith and in no
event will any Borrower or Guarantor change its jurisdiction to a jurisdiction outside the United
States, without the prior written consent of Agent and Required Lenders.



          (d) No Borrower or Guarantor shall change the location set forth on Schedule 8.19
hereto at which a copy of all Records with respect to Accounts and Inventory of each Borrower and
Guarantor are maintained, unless Agent shall have received prior written notice of the intention to
change such location,



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which notice shall specify the new location in the United States of America
at which such Records are proposed to be maintained.



     9.5 Maintenance of Property; Insurance.



          (a) Each Borrower and Guarantor shall, and shall cause any Subsidiary to (i) at all times,
keep all property useful and necessary in the business of Parent and its Subsidiaries, taken as a
whole, in good working order and condition and maintain with financially sound and reputable
insurance companies insurance on all property material to the business of Parent and its
Subsidiaries, taken as a whole, in at least such amounts (subject to customary deductibles with
respect to policies of insurance issued by third parties and self-insured retentions other than, as
to such self-insured retentions, with respect to Revolving Loan Priority Collateral having an
aggregate value in excess of $500,000) and against at least such risks (but including in any event
public liability, product liability and business interruption) as are consistent with the past
practices of the Parent and its Subsidiaries and otherwise as are usually insured against in the
same general area by companies engaged in the same or a similar business; (ii) furnish to Agent,
upon written request, information in reasonable detail as to the insurance carried; and (iii)
ensure that at all times Agent shall be named as additional insured with respect to liability
policies (but without any liability for any premiums) and as a loss payee as its interests may
appear with respect to casualty insurance policies pursuant to a non-contributory lender’s loss
payable endorsements in form and substance satisfactory to Agent. Such lender’s loss payable
endorsements shall specify that the proceeds of such insurance shall be payable to Agent as its
interests may appear and further specify that Agent and Lenders shall be paid regardless of any act
or omission by any Borrower, Guarantor or any of its or their Affiliates. All such policies shall
provide for at least thirty (30) prior written notice to Agent of any cancellation or reduction of
coverage. At any time an Event of Default exists or has occurred and is continuing, subject to the
Intercreditor Agreement, Agent may act as attorney for each Borrower and Guarantor in obtaining,
adjusting and settling such insurance with respect to Revolving Loan Priority Collateral. Unless
and until an Event of Default or a Dominion Event exists or has occurred and is continuing
(including after giving effect to any event giving rise to any claim under such insurance polices,
including, but not limited to, any reduction in the Borrowing Base as a result of any loss, damage,
destruction or other casualty with respect to any Collateral giving rise to any insurance claim),
(A) Agent shall turn over to Administrative Borrower any amounts received by it as loss payee under
any casualty insurance maintained by Parent and its Subsidiaries, the disposition of such amounts
to be subject to the mandatory prepayments provided for herein and (B) Parent and/or the applicable
Borrower or Guarantor shall have the sole right to adjust or settle any claims under such
insurance.



          (b) With respect to any Real Property of Borrowers and Guarantors subject to a Mortgage:



               (i) If any portion of any such property is located in an area identified as a special flood
hazard area by the Federal Emergency Management Agency or other applicable agency, such Borrower or
Guarantor shall maintain or cause to be maintained, flood insurance to the extent required by law.



               (ii) The applicable Borrower or Guarantor promptly shall comply with and conform to (A) all
provisions of each such insurance policy, and (B) all requirements of the insurers applicable to
such party or to such property or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration or repair of such property, except for such non-compliance or
non-conformity as could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The applicable Borrower or Guarantor shall not use or permit the use of
such property in any manner which could reasonably be expected to result in the cancellation of any
insurance policy or could reasonably be expected to void coverage required to be maintained with
respect to such property pursuant to Section 9.5(a).



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               (iii) If any Borrower or Guarantor is in default of its obligations to insure or deliver any
such prepaid policy or policies, the result of which could reasonably be expected to have a
Material Adverse Effect, then Agent, at its option upon ten (10) days’ written notice to
Administrative Borrower, may effect such insurance from year to year at rates substantially similar
to the rate at which such Borrower or Guarantor had insured such property, and pay the premium or
premiums therefor, and Borrowers shall pay to Agent on demand such premium or premiums so paid by
Agent, which shall be part of the Obligations.



               (iv) If such property, or any part thereof, shall be destroyed or damaged and the reasonably
estimated cost thereof would exceed $5,000,000 Administrative Borrower shall give prompt notice
thereof to Agent. All insurance proceeds paid or payable in connection with any damage or casualty
to any property shall be applied in the manner specified in Section 9.5(a).



     9.6 Notices.
Borrowers and Guarantors shall promptly, but in any event within five (5) Business Days after a
Responsible Officer knows or reasonably should know, notify Agent and each Lender of: (a) the
occurrence of any Default or Event of Default; (b) any default or event of default under any
Contractual Obligation of Parent or any of its Subsidiaries, other than as previously disclosed in
writing to Agent and Lenders, which could reasonably be expected to have a Material Adverse Effect;
(c) any litigation, investigation or proceeding which may exist at any time between Parent or any
of its Subsidiaries and any Governmental Authority, which in either case, has or could reasonably
be expected to have a Material Adverse Effect; (d) the occurrence of any default or event of
default under the Term Loan Documents or the Convertible Notes; (e) any litigation or proceeding
involving Collateral or affecting Parent or any of its Subsidiaries that is reasonably likely to
result in an adverse determination and, if adverse, could reasonably be expected to have a Material
Adverse Effect; (f) the occurrence of any ERISA Event; (g) the receipt of written notice of any
material violation of any law which could reasonably be expected to have a Material Adverse Effect;
(h) any release or discharge by Parent or any of its Subsidiaries of any Hazardous Materials
required to be reported under applicable Environmental Laws to any Governmental Authority, unless
Parent reasonably determines that the total costs arising out of such release or discharge could
not reasonably be expected to have a Material Adverse Effect; (i) any condition, circumstance,
occurrence or event not previously disclosed in writing to Agent that could reasonably be expected
to result in liability or expense under applicable Environmental Laws, unless Parent reasonably
determines that the total costs arising out of such condition, circumstance, occurrence or event
could not reasonably
be expected to have a Material Adverse Effect or could not reasonably be expected to result in the
imposition of any Lien or other material restriction on the title, ownership or transferability of
any facilities and properties owned, leased or operated by Parent or any of its Subsidiaries that
could reasonably be expected to result in a Material Adverse Effect; and any proposed action to be
taken by Parent or any of its Subsidiaries that could reasonably be expected to subject Parent or
any of its Subsidiaries to any material additional or different requirements or liabilities under
Environmental Laws, unless Parent reasonably determines that the total costs arising out of such
proposed action could not reasonably be expected to have a Material Adverse Effect; (j) any loss,
damage, or destruction to the Collateral in the amount of $1,000,000 or more, whether or not
covered by insurance; (k) any and all default notices received under or with respect to any leased
location or public warehouse where Collateral, either individually or in the aggregate, in excess
of $1,000,000 is located. In addition, Borrowers and Guarantors shall notify Agent and each Lender
at any time that a Responsible Officer has actual knowledge of, and has determined that, there has
been a Material Adverse Effect. Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of Parent (and, if applicable, the relevant Affiliate or
Subsidiary) setting forth details of the occurrence referred to therein and stating what action
Parent (or, if applicable, the relevant Affiliate or Subsidiary) proposes to take with respect
thereto. Borrowers and Guarantors shall furnish to Agent notice in writing of the details of any
merger, consolidation or amalgamation or wind up, liquidation or dissolution of any Subsidiary of
Parent as permitted pursuant to Section 10.1(c).



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     9.7 Environmental Laws.
Each Borrower and Guarantor shall, and shall cause any Subsidiary to,



          (a) (i) comply substantially with, and require substantial compliance by all tenants,
subtenants, contractors, and invitees with, all applicable Environmental Laws; (ii) obtain, comply
substantially with and maintain any and all Environmental Permits necessary for its operations as
conducted and as planned; and (iii) require that all tenants, subtenants, contractors, and invitees
obtain, comply substantially with and maintain any and all Environmental Permits necessary for
their operations as conducted and as planned, with respect to any property leased or subleased
from, or operated by Parent or its Subsidiaries, in each case under clauses (i), (ii) or (iii)
where the failure to do so has or could reasonably be expected to have a Material Adverse Effect;



          (b) promptly comply, in all material respects, with all orders and directives of all
Governmental Authorities regarding Environmental Laws, other than such orders or directives (i)
where the failure to comply has or could reasonably be expected to result in a Material Adverse
Effect or (ii) as to which: (A) appropriate reserves have been established in accordance with
GAAP; (B) an appeal or other appropriate contest is or has been timely and properly taken and is
being diligently pursued in good faith; and (C) if the effectiveness of such order or directive has
not been stayed, the failure to comply with such order or directive during the pendency of such
appeal or contest has could reasonably be expected to result in a Material Adverse Effect;



          (c) maintain its existing program, if any, reasonably designed to ensure that all the
properties and operations of Parent and its Subsidiaries are periodically reasonably reviewed by
competent personnel to identify and promote compliance with and to reasonably and prudently manage
any material costs related to compliance with Environmental Laws that affect Parent or any of its
Subsidiaries, including compliance and liabilities relating to: discharges to air and water;
acquisition, transportation, storage and use of Hazardous Materials; waste disposal; species
protection; and recordkeeping required under Environmental Laws.



     9.8 New Inventory Locations. Each Borrower and Guarantor may only open any new location where any Inventory may be stored so
long as (a) such locations are within the United States or its territories or Canada, (b) if it is
a warehouse or distribution center such location is set forth in the applicable report provided for
in Section 7.1(a) to the extent required under such Section or for any other location where
Inventory having an aggregate value in excess of $150,000 is stored, Agent has received five (5)
Business Days’ written notice within the time of the opening of any such new location and (c) upon
Agent’s request, such Borrower or Guarantor shall use commercially reasonable efforts to obtain
Collateral Access Agreements with respect to such locations (it being understood that Borrowers
shall not be required to incur any expense, provide any security or agree to any adverse term or
condition required in order to obtain such Collateral Access Agreements).



     9.9 Compliance with ERISA. Except as could not reasonably be expected to have a Material Adverse Effect, each Borrower and
Guarantor shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Plan in
compliance with the applicable provisions of ERISA, the Code and other Federal and State law; (b)
cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification;
(c) not terminate any Pension Plan so as to incur any liability to the Pension Benefit Guaranty
Corporation; (d) not allow or suffer to exist any prohibited transaction involving any Plan or any
trust created thereunder which would subject such Borrower, Guarantor or such ERISA Affiliate to a
tax or other liability on prohibited transactions imposed under Section 4975 of the Code or ERISA;
(e) make all required contributions to any Plan which it is obligated to pay under Section 302 of
ERISA, Section 412 of the Code or the terms of such Plan; (f) not allow or suffer to exist any
accumulated funding deficiency, whether or not waived, with respect to any such Pension Plan; (g)
not engage in a



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transaction that could be subject to Section 4069 or 4212(c) of ERISA; or (h) not
allow or suffer to exist any occurrence of a reportable event or any other event or condition which
presents a risk of termination by the Pension Benefit Guaranty Corporation of any Plan that is a
single employer plan, which termination could result in any liability to the Pension Benefit
Guaranty Corporation.



     9.10 End of Fiscal Years.
Each Borrower and Guarantor shall, for financial reporting purposes, cause its, and each of
its Subsidiary’s fiscal years to end on the Sunday closest to October 31st in any
calendar year.



     9.11 Additional Guaranties and Collateral Security; Further Assurances.



          (a) In the case of the formation or acquisition by a Borrower or Guarantor of any Subsidiary
after the date hereof (other than a Foreign Subsidiary or any Subsidiary of a Foreign Subsidiary),
as to any such Subsidiary, (i) the Borrower or Guarantor forming such Subsidiary shall cause any
such Subsidiary to execute and deliver to Agent, in form and substance reasonably satisfactory to
Agent, a joinder agreement to the Financing Agreements in order to make such Subsidiary a party to
this Agreement as a “Borrower” if it owns accounts or inventory that would constitute Eligible
Accounts and Eligible Inventory or otherwise as a “Guarantor”, and a party to any guarantee as a
“Guarantor” or pledge agreement as a “Pledgor”, in each case as applicable, which joinder agreement
shall include, but not be limited to, supplements and amendments hereto and to any of the other
Financing Agreements, authorization to file UCC financing statements, Collateral Access Agreements
(to the extent required under Section 9.8), other agreements, documents or instruments contemplated
under Section 5.2, corporate resolutions and other organization and authorizing documents of such
Person, and, in addition, as a condition to any assets of such Subsidiary being included the
Borrowing Base, except as Agent may otherwise agree, Agent shall have received favorable opinions
of counsel to such person with respect to the enforceability of such joinder agreement and that as
a result, the agreements to which such Subsidiary has been joined constitute the valid, binding and
enforceable obligations of such Subsidiary, enforceable
against it in accordance with the respective terms of such agreements and (ii) the Borrower or
Guarantor forming such Subsidiary shall comply with the terms of Section 5.2 hereof with respect to
the Equity Interests of such Subsidiary.



          (b) With respect to any owned real property or fixtures thereon, in each case with a purchase
price or a fair market value at the time of acquisition of at least $2,000,000, in which any
Borrower or Guarantor acquires ownership rights at any time after the Closing Date, promptly
following any request by Agent grant to Agent a Lien of record on all such owned real property and
fixtures, upon terms reasonably satisfactory in form and substance to Agent, and in accordance with
any applicable requirements of any Governmental Authority (including any required appraisals of
such property under FIRREA); provided, that, (i) nothing in this Section 9.11(b)
shall defer or impair the attachment or perfection of any security interest in any Collateral
covered by any of the Financing Agreements which would attach or be perfected pursuant to the terms
thereof without action by Parent, any of its Subsidiaries or any other Person, (ii) no such Lien
shall be required to be granted as contemplated by this Section 9.11(b) on any owned real property
or fixtures the acquisition of which is financed, or is to be financed within any time period
permitted by Section 10.3(b), in whole or in part through the incurrence of Indebtedness permitted
by subsection 10.3(b), until such Indebtedness is repaid in full (and not refinanced as permitted
by subsection 10.3). In connection with any such grant to Agent of a Lien of record on any such
real property in accordance with this subsection, Parent or such Subsidiary shall deliver or cause
to be delivered to Agent any title searches in connection with such grant of such Lien obtained by
it in connection with the acquisition of such ownership rights in such real property or any title
search as Agent shall reasonably request (in light of the value of such real property and the cost
and availability of such title search and whether the delivery of such title search would be
customary in connection with such grant of such Lien in similar circumstances).




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          (c) At the request of Agent at any time and from time to time, Borrowers and Guarantors shall,
at their expense, duly execute and deliver, or cause to be duly executed and delivered, such
further agreements, documents and instruments, and do or cause to be done such further acts as may
be reasonably necessary or proper to evidence, perfect, maintain and enforce (to the extent
provided herein) the security interests and the Lien (subject to Permitted Liens) in the Collateral
and to otherwise effectuate the provisions of this Agreement or any of the other Financing
Agreements.



     9.12 Costs and Expenses. Borrowers and Guarantors shall pay to Agent, promptly after demand and
identification thereof by Agent, all reasonable costs and expenses paid or payable in connection
with the preparation, negotiation, execution, delivery, recording, syndication, administration,
collection, liquidation, enforcement and defense of the Obligations, Agent’s rights in the
Collateral, this Agreement, the other Financing Agreements and all other documents related hereto
or thereto, including any amendments, supplements or consents which may hereafter be contemplated
(whether or not executed) or entered into in respect hereof and thereof, including: (a) all
reasonable costs and expenses of filing or recording (including UCC financing statement filing
taxes and fees, documentary taxes, intangibles taxes and mortgage recording taxes and fees, if
applicable) (and the amount of all fees required to be paid under any law, regulation or otherwise
by any Governmental Authority shall be reasonable for purposes of this clause (a)), (b) reasonable
costs and expenses and fees for insurance premiums, environmental audits, title insurance premiums,
surveys, assessments, engineering reports and inspections, appraisal fees and search fees,
background checks, costs and expenses of remitting loan proceeds, collecting checks and other items
of payment, and establishing and maintaining the Concentration Accounts, together with Agent’s
reasonable customary charges and fees with respect thereto, in each case with respect to
environmental audits, title insurance premiums, surveys, engineering reports and otherwise solely
with respect to Term Loan Priority Collateral, approved by Administrative Borrower (other than
during the continuance of an Event of Default), such approval not to be unreasonably withheld,
conditioned or delayed; (c) customary charges, fees or expenses charged by any Issuing Bank in
connection with any Letter of Credit; (d) reasonable costs and expenses incurred by Issuing Bank
and Swing Line Lender in connection with the arrangements relating to a Defaulting Lender as
provided in Section 6.13; (e) actual costs and expenses of preserving and protecting the
Collateral; (f) actual costs and expenses paid or incurred in connection with obtaining payment of
the Obligations, enforcing the security interests and liens of Agent in the Collateral, selling or
otherwise realizing upon the Collateral, and otherwise enforcing the provisions of this Agreement
and the other Financing Agreements; (g) all out-of-pocket expenses and costs heretofore and from
time to time hereafter incurred by Agent during the course of periodic field examinations of the
Collateral and such Borrower’s or Guarantor’s operations, plus a per diem charge at Agent’s then
standard rate for Agent’s examiners in the field and office (which rate as of the date hereof is
$1,000 per person per day), subject to the limitations set forth in Section 7.7 hereof; and (h) the
reasonable fees and disbursements of counsel (including legal assistants) to Agent in connection
with any of the foregoing and in addition, at any time an Event of Default exists or has occurred
and is continuing, the reasonable fees and disbursements of one counsel (including legal
assistants) to Lenders in connection with matters described in clauses (e) or (f) above.
Notwithstanding the foregoing, except for taxes described in section 9.12(a), none of Borrowers and
Guarantor shall have any obligation under this section 9.12 to Agent, Issuing Bank or any Lender
with respect to any Taxes.



SECTION 10. NEGATIVE COVENANTS




     10.1 Limitation on Fundamental Changes.
Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or
indirectly,



          (a) enter into any merger, consolidation or amalgamation with any other Person or permit any
other Person to merge into or with or consolidate with it, except that (i) any
Subsidiary of Parent may
be merged, consolidated or amalgamated with or into Parent (provided that Parent shall be the
continuing



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or surviving entity) or with or into any one or more wholly owned Subsidiaries of Parent
(provided that the wholly owned Subsidiary or Subsidiaries of Parent shall be the continuing or
surviving entity); provided that if a party to such merger, consolidation or amalgamation is a
Borrower or Guarantor, the continuing or surviving entity shall be a Borrower or Guarantor, (ii)
any Subsidiary of Parent may be merged, consolidated or amalgamated pursuant to a Permitted
Acquisition or Permitted Disposition, (iii) Parent may be merged, consolidated or amalgamated with
or into a Parent Entity; provided, that, (A) if the Parent Entity shall be the
continuing or surviving entity, such Parent Entity shall expressly assume all of the obligations of
Parent under this Agreement and the other Financing Agreement to which Parent is a party executed
and delivering to Agent a joinder and such other agreements, documents and instruments as Agent may
reasonably request, in a form reasonably satisfactory to Agent (and thereafter shall be deemed to
be “NCI Building Systems” and “Parent” for all purposes under this Agreement and such other
Financing Agreements) and (B) after giving effect thereto, no Change of Control shall occur;



          (b) sell, issue, assign, lease, license, transfer, abandon or otherwise dispose of any of its
Equity Interests or any of its property or assets to any other Person, except for Permitted
Dispositions; provided, that, to the extent that any Disposition of any property or
assets constituting Collateral is made as permitted by Section 10.1(a)(ii) or this Section 10.1(b),
(including through any Disposition of any Subsidiary owning any such property or assets), other
than to a Borrower or Guarantor, or to the extent that Agent and Required Lenders may consent to
any other sale or other Disposition of any property or assets, concurrently with, and subject to
the satisfaction of the conditions to such sale or other Disposition (including the receipt of the
Net Cash Proceeds related thereto), effective upon the transfer of the title and ownership of such
property or assets (including through any Disposition of any Subsidiary), (i) the Lien of Agent on
the property or assets for which title and ownership is transferred shall be released and (ii) upon
the written request of Administrative Borrower, Agent shall, at Borrowers’ expense, and Lenders
hereby authorize Agent to, cause to be filed a UCC financing statement amendment or other release
documents and take such other action necessary or reasonably desirable to evidence and effect the
release by Agent of such property or assets from its security interest granted hereunder and under
any other Financing Agreement and, if there is a Mortgage on such Collateral, execute and deliver
to Administrative Borrower a release instrument with respect thereto; or



          (c) wind up, liquidate or dissolve except that any Guarantor (other than Parent) or Subsidiary
of Parent may wind up, liquidate and dissolve; provided, that, in connection with
any such winding up, liquidation or dissolution, (i) any Collateral of the Person so winding up,
liquidating or dissolving that is a Borrower or Guarantor shall be duly and validly transferred and
assigned to a Borrower or Guarantor and Agent shall maintain and have a perfected Lien upon all
such assets and properties as so transferred on the terms and with the priority provided for in the
Financing Agreements and (ii) in the case of a Borrower, (A) such Borrower shall not have any
property or assets constituting Revolving Loan Priority Collateral and Agent shall have received a
Borrowing Base Certificate that does not include any assets of such Borrower as part of the
calculation of the Borrowing Base, and (B) simultaneously with the commencement of such winding up,
liquidation or dissolution, its right to borrow hereunder shall automatically terminate and Agent
and Lenders shall have no further obligations to make any Loans to, or provide any Letters of
Credit for, such Person.



          10.2 Encumbrances.
Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, create, incur,
assume or suffer to exist any security interest, mortgage, pledge, Lien, charge or other
encumbrance of any nature whatsoever on any of its assets or properties, including the Collateral,
except the Permitted Liens.



          10.3 Indebtedness
Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, incur, create,
assume, become or be liable in any manner with respect to, or permit to exist,



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any Indebtedness, or
guarantee of any Indebtedness, obligations or dividends of any other Person (other than pursuant to
Permitted Guarantees), except:



          (a) the Obligations;



          (b) Indebtedness arising after the date hereof (including pursuant to Capital Leases) either:



               (i) incurred to finance or refinance the acquisition, leasing, construction or improvement of
Equipment or Real Property or other fixed or capital assets, or



               (ii) secured by security interests, mortgages or other Liens on Equipment or Real Property or
other fixed or capital assets acquired after the date hereof, or



               (iii) otherwise in respect of Capital Leases;


provided, that, (A) the aggregate principal amount of Indebtedness incurred under
this clause (b) in any fiscal year of Parent shall not exceed $10,000,000 in the aggregate;
provided, that, in the event that the aggregate principal amount of such
Indebtedness incurred during any fiscal year commencing with the fiscal year of Parent ending on
November 2, 2009 is less than $10,000,000 for such year, the amount by which $10,000,000 exceeds
the amount of the Indebtedness incurred in such year may be carried forward to and incurred during
the subsequent fiscal year only and in no event shall the aggregate principal amount of such
Indebtedness incurred in any fiscal year after giving effect to any carry forward of amounts from
the prior fiscal year or otherwise exceed $20,000,000 in the aggregate, and (B) any security
interests, mortgages or other Liens on Equipment or Real Property provided for above shall not
apply to any property or assets constituting Revolving Loan Priority Collateral;




          (c) Indebtedness of any Borrower, Guarantor or Existing Foreign Subsidiary to any other
Borrower or Guarantor or any other Subsidiary of Parent;



          (d) Indebtedness of any Borrower or Guarantor entered into in the ordinary course of business
pursuant to a Hedge Agreement; provided, that, (i) such arrangements are not for
speculative purposes, and (ii) are with reputable financial institutions or vendors;



          (e) Indebtedness under the Term Loan Documents; provided, that, (i) the
aggregate principal amount of such Indebtedness shall not exceed $150,000,000 outstanding at any
time, and (ii) such Indebtedness is, and at all times shall be, subject to the terms and conditions
of the Intercreditor Agreement;



          (f) Indebtedness evidenced by the Convertible Notes in the aggregate principal amount
outstanding not to exceed $9,000,000; provided, that, all such Indebtedness shall
be repaid, redeemed, defeased, discharged or otherwise acquired or retired in full no later than
January 15, 2010, with payment therefor to be made only from the Convertible Note Account;



          (g) Indebtedness to an insurance company or Affiliate thereof arising pursuant to financing of
insurance premiums payable on insurance policies maintained by any Borrower or Guarantor or any
Subsidiary;



          (h) unsecured Indebtedness of Parent or any of its Subsidiaries incurred to finance all or a
portion of the purchase price for any Permitted Acquisition; provided, that, (i)
such Indebtedness is incurred prior to or substantially contemporaneously with the consummation of
such acquisition or within
three (3) months thereafter, (ii) if such Indebtedness is owed to a Person other than the
Person from whom such acquisition is made or any Affiliate thereof, such Indebtedness shall be on
terms and conditions



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reasonably satisfactory to Agent and the aggregate principal amount of such
Indebtedness, shall not exceed fifty (50%) percent of the purchase price of such acquisition (or
such greater percentage as shall be reasonably satisfactory to Agent) and (iii) as of the date of
incurring such Indebtedness and after giving effect thereto, no Event of Default shall exist or
have occurred and be continuing;



          (i) Indebtedness assumed by Parent or any of its Subsidiaries pursuant to a Permitted
Acquisition; provided that (i) such Indebtedness shall not have been incurred by any party in
contemplation of the acquisition and (ii) immediately after giving effect to such acquisition, no
Event of Default shall exist or have occurred and be continuing;



          (j) Indebtedness evidenced by any senior notes or other senior debt securities or other senior
indebtedness or Subordinated Debt arising after the date hereof; provided, that:
(i) no principal payments in respect of such Indebtedness shall be due earlier than six (6) months
after the Maturity Date, other than for mandatory prepayments based on asset dispositions and
change of control, (ii) subject to the Intercreditor Agreement, the Net Cash Proceeds of such
Indebtedness shall be paid to Agent for application to the Obligations to the extent required under
Section 2.5(c), (iii) to the extent such Indebtedness is secured, such Indebtedness is subject to
the terms of an intercreditor agreement in form and substance satisfactory to Agent, (iv) the
aggregate principal amount of all such Indebtedness incurred pursuant to this Section 10.3(j) shall
not exceed $100,000,000 at any time outstanding, and (v) as of the date of incurring such
Indebtedness and after giving effect thereto, no Event of Default shall exist or have occurred and
be continuing;



          (k) Indebtedness in respect of performance bonds, bid bonds, material and supply bonds, tax
bonds, appeal bonds, surety bonds, judgment bonds, replevin and similar bonds and obligations, in
each case provided or entered into in the ordinary course of business;



          (l) Indebtedness arising in connection with the endorsement of instruments for deposit or
collection in the ordinary course of business;



          (m) Indebtedness arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business; provided, that, (i)
such Indebtedness is extinguished within two (2) Business Days of incurrence and (ii) the aggregate
principal amount of such Indebtedness outstanding at any time shall not exceed $3,000,000;



          (n) Indebtedness incurred in respect of Bank Products (other than Hedge Agreements), or credit
card and stored value card processing and administrative services, cash management obligations,
netting services, overdraft protection and similar arrangements in the ordinary course of business
in each case arising under standard terms of any Bank Product Provider (or, (i) with respect to
credit card and stored value card processing and administrative services and (ii) in the case of
any Foreign Subsidiary, any other financial institution), at which Parent or any Subsidiary
maintains an overdraft, cash pooling or similar facility or agreement;



          (o) Indebtedness in respect of obligations evidenced by bonds, debentures, notes or similar
instruments issued as payment-in-kind interest payments in respect of Indebtedness otherwise
permitted under this Section 10.3;



          (p) accretion of the principal amount of obligations evidenced by bonds, debentures, notes or
similar instruments in respect of Indebtedness otherwise permitted under this Section 10.3 issued
at any original issue discount;



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          (q) Guaranty Obligations in respect of Indebtedness of a Borrower, Guarantor or a Subsidiary
to the extent that such Indebtedness is otherwise permitted pursuant to this Section 10.3;



          (r) Indebtedness of any Foreign Subsidiary (other than a Borrower or Guarantor);



          (s) Indebtedness of Parent or any of its Subsidiaries arising after the date hereof in
connection with the issuance by any State, county or municipal industrial development authority or
similar Governmental Authority of industrial development or revenue bonds or similar obligations
secured by Real Property or Equipment or other fixed or capital assets leased to and operated by
Parent or such Subsidiary; provided, that, Parent or any such Subsidiary may obtain
title to such assets free and clear of any Lien related to such industrial development or revenue
bonds or similar obligations at any time by optionally canceling such bonds or obligations, paying
a nominal fee and terminating such financing transaction;



          (t) Indebtedness of Parent or any of its Subsidiaries arising after the date hereof in
connection with the issuance by any State, county or municipal industrial development authority or
similar Governmental Authority of industrial development or revenue bonds or similar obligations
secured by Real Property or Equipment or other fixed or capital assets leased to and operated by
Parent or such Subsidiary that were issued in connection with the financing of, or the renewal,
extension, replacement, refinancing or rollover of financing with respect to, such assets;
provided, that, (i) the aggregate principal amount of such Indebtedness outstanding
at any time shall not exceed $30,000,000, and (ii) as of the date any such Indebtedness is incurred
and after giving effect thereto, no Event of Default shall exist or have occurred and be
continuing;



          (u) Indebtedness consisting of the obligations of Borrowers and Guarantors under the Existing
Letters of Credit as in effect on the date hereof for their unexpired term, exclusive of any
renewals or extensions thereof;



          (v) the Indebtedness set forth on Schedule 10.3 hereto; and



          (w) Indebtedness of any Borrower or Guarantor arising after the date hereof issued in exchange
for, or the proceeds of which are used to extend, refinance, replace or substitute for, in whole or
in part, Indebtedness permitted under Sections 10.3(b), 10.3(e), 10.3(h), 10.3(i), 10.3(j),
10.3(o), 10.3(p), 10.3(r), 10.3(t), or 10.3(v) hereof (the “Refinancing Indebtedness”);
provided, that, (i) as to any such Refinancing Indebtedness under Section 10.3(e)
or 10.3(j), the Refinancing Indebtedness shall have a Weighted Average Life to Maturity and a final
maturity equal to or greater than the Weighted Average Life to Maturity and the final maturity,
respectively, of the Indebtedness being extended, refinanced, replaced, or substituted for, (ii)
the Refinancing Indebtedness shall rank in right of payment no more senior than, and be at least
subordinated (if subordinated) in right of payment to, the Obligations as the Indebtedness being
extended, refinanced, replaced or substituted for, (iii) as of the date of incurring such
Indebtedness and after giving effect thereto, no Event of Default shall exist or have occurred and
be continuing, (iv) the principal amount (or accreted value, if applicable) of such Refinancing
Indebtedness (less any original issue discount, if applicable) shall not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness so extended, refinanced, replaced or
substituted for (plus the amount of accrued interest and premium (including applicable prepayment
penalties) thereon, plus discounts, commissions and other reasonable fees and expenses incurred in
connection therewith), (v) the Refinancing Indebtedness may be secured by substantially the same or
all or part of the property or assets
(including after-acquired property as applicable) as the Indebtedness so extended, refinanced
replaced or substituted for; provided, that, that, such security interests (if any)
with respect to the Refinancing Indebtedness shall have a priority no more senior than, and be at
least as subordinated, if subordinated (on terms and conditions substantially similar to (or no
less favorable to the Lenders than) the subordination



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provisions applicable to the Indebtedness so
extended, refinanced, replaced or substituted for or as is otherwise reasonably acceptable to
Agent) as the security interests with respect to the Indebtedness so extended, refinanced, replaced
or substituted for; and



          (x) unsecured Indebtedness not otherwise permitted by the preceding clauses of this Section
10.3; provided, that, the aggregate principal amount of such Indebtedness
outstanding at any time shall not exceed $5,000,000.


For purposes of determining compliance with this Section 10.3, in the event that any Indebtedness
meets the criteria of more than one of the types of Indebtedness described in clauses (a) through
(x) above, Administrative Borrower shall classify such item of Indebtedness and may include the
amount and type of such Indebtedness in one or more of such clauses (including in part under one
such clause and in part under another such clause).




     10.4 Investments.
Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or
indirectly, purchase, hold or acquire (including pursuant to any merger with any Person that was
not a wholly owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of
indebtedness or other securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to, or make or permit to exist any
capital contribution or other investment in, any other Person, or purchase or otherwise acquire (in
one transaction or a series of transactions) any assets of any other Person constituting a business
unit or all or a substantial part of the assets or property of any other Person (whether through
purchase of assets, merger or otherwise), or acquire any Subsidiaries (each of the foregoing an
“Investment”), or agree to do any of the foregoing, except subject to and conditioned upon the
prior written consent of Agent and Lenders to the extent required hereunder, except (a) Permitted
Investments and (b) Permitted Acquisitions. For purposes of determining compliance with this
Section 10.4, in the event that any Investment meets the criteria of more than one of the types of
Investments described in the definitions of the terms Permitted Investments and Permitted
Acquisitions, Administrative Borrower shall classify such item of Investment and may include the
amount and type of such Investment in one or more of such clauses (including in part under one such
clause and in part under another such clause).



     10.5 Restricted Payments.
Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, declare or make, or
agree to pay or make (except subject to and conditioned on the prior written consent of Agent and
Lenders to the extent required hereunder), directly or indirectly, any Restricted Payment, except:



          (a) any Subsidiary of Parent may make Restricted Payments with regard to its Equity Interests
to Parent or to a wholly-owned Subsidiary of Parent which owns Equity Interests therein;



          (b) any non-wholly-owned Subsidiary of Parent may make Restricted Payments to holders of its
Equity Interests so long as Parent or its respective Subsidiary which owns the Equity Interests in
the Subsidiary making such Restricted Payments receives at least its proportionate share thereof
(based upon its relative holding of the Equity Interests in the Subsidiary making such Restricted
Payments and taking into account the relative preferences, if any, of the various classes of Equity
Interests of such Subsidiary);



          (c) Parent may pay cash dividends or distributions to any Parent Entity that are used to
reimburse or pay all reasonable fees and expenses incurred in connection with the Transactions and
the other transactions expressly contemplated by this Agreement and the other Financing Agreements;



          (d) Parent and any of its Subsidiaries may pay cash dividends or distributions that are used
to reimburse or pay reasonable and necessary expenses (including professional fees and expenses)
(other



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than taxes) incurred by any Parent Entity (i) in connection with (A) registration, public
offerings and exchange listing of equity or debt securities and maintenance of the same, (B)
compliance with reporting obligations under, or in connection with compliance with, any Requirement
of Law, any rules of any self-regulatory body or stock exchange, this Agreement or any of the other
Financing Agreements, or any other agreement or instrument relating to Indebtedness of any
Borrower, Guarantor or Subsidiary, (C) indemnification and reimbursement of directors, officers and
employees in respect of liabilities relating to their serving in any such capacity, or obligations
in respect of director and officer insurance (including premiums therefor) or (ii) and otherwise
incurred in the ordinary course of business; provided, that, in the case of clause
(i)(A) above, if any Parent Entity shall own any material assets other than the Equity Interests of
Parent or another Parent Entity or other assets relating to the ownership interest of such Parent
Entity in another Parent Entity, Parent or its Subsidiaries, with respect to such Parent Entity
such cash dividends and distributions shall be limited to the reasonable and proportional share, as
determined by Parent in its reasonable discretion, of such expenses incurred by such Parent Entity
relating or allocable to its ownership interest in another Parent Entity, Parent and its
Subsidiaries, and such other assets;



          (e) Parent and any of its Subsidiaries may pay, without duplication, cash dividends
distributions and other payments (i) pursuant to the Tax Sharing Agreement and (ii) to any Parent
Entity to pay any Related Taxes;



          (f) Parent may make payments to repurchase or redeem Equity Interests and options to purchase
Equity Interests of Parent or any Parent Entity held by officers, directors or employees or former
officers, directors or employees (or their transferees, estates or beneficiaries under their
estates) of any Borrower, Guarantor or Subsidiary, upon their death, disability, retirement,
severance or termination of employment or service; provided, that, the aggregate
cash consideration paid for all such payments, repurchases or redemptions shall not exceed (i)
$3,000,000 in any fiscal year of Parent or (ii) $5,000,000 during the term of this Agreement;



          (g) each Borrower and Guarantor, and each Subsidiary, may declare and make dividends or make
other Restricted Payments payable solely in the Equity Interests of such Person (other than
Disqualified Equity Interests)



          (h) Parent may repurchase or withhold or may pay cash or other dividends in an amount
sufficient to allow any Parent Entity to repurchase or withhold Equity Interests of Parent in
connection with the exercise of stock options or warrants or the vesting of restricted stock
(including restricted stock units) if such Equity Interests represent a portion of the exercise
price of, or withholding obligation with respect to, such options, warrants or restricted stock;



          (i) Parent may make Restricted Payments substantially contemporaneously with, or within ninety
(90) days after the receipt of, Net Cash Proceeds from any issuance or sale of its Equity
Interests (other than Disqualified Equity Interests) or from an equity capital contribution made
after the Closing Date (and not including the equity contribution contemplated under Section 4.1
hereof), in an amount equal to all or any portion of such Net Cash Proceeds;



          (j) Parent may pay or make dividends or distributions to any Parent Entity that are used to
reimburse or pay any of the following (i) accounting, legal, administrative and other general
corporate
and overhead expenses, franchise or similar taxes and other fees and expenses required to
maintain the existence of such Parent Entity and to pay other operating costs and expenses,
including salary, bonus and other benefits payable to, and indemnities provided on behalf of,
officers and employees of any such Parent Entity, in each case as to any of the foregoing only to
the extent related to, and required for, the existence of such Parent Entity, or as are reasonably
and in good faith determined by Parent to be allocable to the operation of Parent and its
Subsidiaries or to such Parent Entity’s ownership interest



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therein (directly or through another
Parent Entity), and (ii) reasonable directors fees and out-of-pocket expenses of directors of any
Parent Entity, in each case in an amount not more than the portion of such fees and expenses as are
reasonably and in good faith determined by Parent to be allocable to the operation of Parent and
its Subsidiaries or to such Parent Entity’s ownership interest therein (directly or through another
Parent Entity);



          (k) Parent and any of its Subsidiaries may pay cash dividends and make other Restricted
Payments; provided that:



               (i) either:



                    (A) as of the date of the payment of any such dividend or other Restricted Payment and after
giving effect thereto, Excess Availability shall be not less than the greater of (1) $30,000,000 or
(2) twenty-four (24%) percent of the least of the Maximum Credit, the Borrowing Base or the
Revolving Loan Limit, on a pro forma basis using the Excess Availability as of the date of the most
recent calculation of the Borrowing Base immediately prior to any such dividend or other Restricted
Payment; or



                    (B) on a pro forma basis, after giving effect to such dividend or other Restricted Payment,
the Consolidated Fixed Charge Coverage Ratio for Parent and its Subsidiaries for the immediately
preceding twelve (12) consecutive month period ending on the last day of the fiscal month prior to
the date of the payment thereof for which Agent has received financial statements shall be equal to
or greater than 1.00 to 1.00; provided, that, for purposes of determining the
Consolidated Fixed Charge Coverage Ratio under this Section 10.5(k) only, Fixed Charges shall
include all prepayments of Indebtedness of Parent and its Subsidiaries under clauses (a), (b), or
(c) of the definition of the term “Indebtedness” made in such period; and



               (ii) the aggregate amount of such dividends or Restricted Payments paid pursuant to this
clause (k) shall not exceed the amount equal to fifty (50%) percent of the Adjusted Consolidated
Net Income accrued during the period (treated as one accounting period) beginning on August 3, 2009
to the end of the most recent fiscal quarter for which consolidated financial statements of Parent
are available;



               (iii) no such dividends or other Restricted Payments are made prior to the first anniversary
of the date hereof, and



               (iv) as of the date of such dividend or other Restricted Payment and after giving effect
thereto, no Event of Default shall exist or have occurred and be continuing; and



               (v) Agent shall have received a certificate of a Responsible Officer of Parent certifying on
behalf of Parent to Agent and Lenders that such dividend or other Restricted Payment complies with
the terms of this clause; and



          (l) Parent and any of its Subsidiaries may pay other cash dividends or other Restricted
Payments; provided, that,



               (i) no such dividend or other Restricted Payments are made prior to the first anniversary of
the date hereof, and



               (ii) as of the date of any such dividend or other Restricted Payment and after giving effect
thereto, each of the Payment Conditions is satisfied; and



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               (iii) Agent shall have received a certificate of a Responsible Officer of Parent certifying on
behalf of Parent to Agent and Lenders that such dividend or other Restricted Payment complies with
the terms of this clause.



     10.6 Transactions with Affiliates. Each Borrower and Guarantor shall not, directly or indirectly,
purchase, acquire or lease any property from, or sell, transfer or lease any property to, any
Affiliate of such Borrower or Guarantor or pay any management, consulting, advisory, brokerage or
similar fees to any Affiliate of such Borrower or Guarantor, except upon terms no less favorable to
such Borrower or Guarantor than such Borrower or Guarantor would obtain in a comparable arm’s
length transaction with a Person that is not an Affiliate; provided, that, nothing
contained in this Section 10.6 shall be deemed to prohibit:



          (a) Restricted Payments permitted under Section 10.5 hereof or entering into and performing
the Tax Sharing Agreement;



          (b) loans and other Investments permitted under clauses (f), (h), (i), (j), (l) or (o) of the
definition of Permitted Investments;



          (c) reasonable director, officer and employee compensation (including bonuses and stock option
programs), benefits and indemnification and contribution arrangements, in each case approved by the
Board of Directors (or a committee thereof) of such Borrower, Parent or Guarantor;



          (d) Parent or any of its Subsidiaries from entering into or performing an agreement with
Sponsor, any CD&R Investor or any Affiliate of Sponsor or any CD&R Investor for the rendering of
management consulting, monitoring, financial advisory or other services for compensation not to
exceed in the aggregate $2,000,000 per year plus reasonable out-of-pocket expenses;
provided, that, no payments of such compensation shall be made (other than for
reasonable out-of-pocket expenses) if as of the date of any such payment, and after giving effect
thereto, an Event of Default shall exist or have occurred and be continuing;



          (e) Parent or any of its Subsidiaries from entering into, making payments pursuant to and
otherwise performing an indemnification and contribution agreement in favor of any Permitted Holder
and each person who is or becomes a director, officer, agent or employee of Parent or any of its
Subsidiaries that has been approved by the Board of Directors (or a committee thereof) of Parent,
or of such Borrower or Guarantor, in respect of liabilities (i) arising under the Securities Act,
the Exchange Act and any other applicable securities laws or otherwise, in connection with any
offering of securities by any Parent Entity (provided that, if such Parent Entity shall own any
material assets other than the Capital Stock of Parent or another Parent Entity, or other assets
relating to the ownership interest of such Parent Entity in Parent or another Parent Entity, such
liabilities shall be limited to the reasonable and proportional share, as determined by Parent in
its reasonable discretion, of such liabilities relating or allocable to the ownership interest of
such Parent Entity in Parent or another Parent Entity and such other related assets) or Parent or
any of its Subsidiaries, (ii) incurred to third parties for any action or failure to act of Parent
or any of its Subsidiaries, predecessors or successors, (iii) arising out of the performance by
Sponsor, any CD&R Investor or any Affiliate of Sponsor or any CD&R Investor of management
consulting, monitoring, financial advisory or other services provided to Parent or any of its
Subsidiaries,
(iv) arising out of the fact that any indemnitee was or is a director, officer, agent or
employee of Parent or any of its Subsidiaries, or is or was serving at the request of any such
corporation as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or enterprise or (v) to the fullest extent permitted by Delaware or other applicable
state law, arising out of any breach or alleged breach by such indemnitee of his or her fiduciary
duty as a director or officer of Parent or any of its Subsidiaries;



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          (f) Parent or any of its Subsidiaries from entering into or performing the Investment
Documents, or any agreements or commitments with or to any Affiliate existing on the Closing Date
and described on Schedule 10.6;



          (g) any transaction permitted under Section 10.1;



          (h) transactions between any Borrower or Guarantor and any other Borrower or Guarantor that
are not prohibited by the terms of this Agreement;



          (i) the payment of expenses incurred in connection with the Transactions and the other
transactions expressly contemplated by this Agreement and the other Financing Agreements on or
about the Closing Date;



          (j) sales or issuances of Equity Interests of a Borrower or Guarantor to an Affiliate thereof
not otherwise prohibited by this Agreement and the granting of registration and other customary
rights in connection therewith;



          (k) payments to Sponsor or any of its Affiliates of fees of up to $8,250,000 in the aggregate,
plus out-of-pocket expenses, in connection with the Transactions;



          (l) transactions with Existing Foreign Subsidiaries in the ordinary course of the business of
Borrowers and Guarantors; and



          (m) the Transactions and all transactions relating thereto contemplated by this Agreement.


For purposes of this Section 10.6, (A) any transaction with any Affiliate shall be deemed to have
satisfied the standard set forth in the first sentence hereof if (i) such transaction is approved
by a majority of the Disinterested Directors of the board of directors of the applicable Borrower
or Guarantor, or (ii) in the event that at the time of any such transaction, there are no
Disinterested Directors serving on the board of directors of such Borrower or Guarantor, such
transaction shall be approved by a nationally recognized expert with expertise in appraising the
terms and conditions of the type of transaction for which approval is required, and (B)
“Disinterested Director” shall mean, with respect to any Person and transaction, a member
of the board of directors of such Person who does not have any material direct or indirect
financial interest in or with respect to such transaction or, to the extent any such transaction
involves Sponsor, a member of the board of directors of such Person who is not an officer, director
or employee of Sponsor.




     10.7 Change in Business.
Each Borrower and Guarantor shall not engage in any business other than the business of any
Borrower or Guarantor on the date hereof and any business reasonably related, ancillary or
complementary to the business in which any Borrower or Guarantor is engaged on the date hereof, and
any other business that in the aggregate is not material to Parent and its Subsidiaries taken as a
whole.



     10.8 Limitation of Restrictions Affecting Subsidiaries.
Each Borrower and Guarantor shall not, directly, or indirectly, create or otherwise cause or suffer
to exist any encumbrance or restriction which prohibits or limits the ability of any Subsidiary of
such Borrower or Guarantor to (a) pay dividends or make other distributions or pay any Indebtedness
owed to such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor (other than
dividends or distributions paid or made by Parent); (b) make loans or advances to such Borrower or
Guarantor or any Subsidiary of such Borrower or Guarantor, (c) transfer any of its properties or
assets to such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; or (d) in the
case of any Borrower or Guarantor, create, incur, assume or



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suffer to exist any Lien in favor of
any of Secured Parties upon any of its property, assets or revenues constituting Working Capital
Priority Collateral (as defined in the Intercreditor Agreement) or affecting the rights or remedies
of Agent with respect thereto, whether now owned or hereafter acquired (provided,
that, to the extent otherwise expressly permitted hereunder, dividend or liquidation
priority between classes of Equity Interests, or subordination of any obligation (including the
application of any remedy bars thereto) to any other obligation, will not be deemed to constitute
such a Lien, encumbrance or restriction); except, for, encumbrances and
restrictions arising under, pursuant to or by reason of (i) applicable law, rule, regulation or
order, or required by any regulatory authority, (ii) this Agreement, the other Financing
Agreements, the Term Loan Documents (as in effect on the date hereof), the documents relating to
Indebtedness permitted by Section 10.3(j) or Sections 10.3(s) or 10.3(t) hereof (and, in the case
of Indebtedness permitted under Sections 10.3(s) or 10.3(t), any encumbrance or restriction shall
only be effective against the assets financed or acquired thereby) and the documents relating to
any Refinancing Indebtedness in respect of any of the foregoing, (iii) customary provisions
restricting subletting, assignment or transfer of any lease governing a leasehold interest of such
Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor, (iv) customary restrictions
on dispositions of real property interests found in reciprocal easement agreements of such Borrower
or Guarantor or any Subsidiary of such Borrower or Guarantor, (v) any agreement relating to
permitted Indebtedness incurred by a Subsidiary of such Borrower or Guarantor prior to the date on
which such Subsidiary was acquired by such Borrower or such Guarantor and outstanding on such
acquisition date or any agreement or instrument of a Person, or relating to Indebtedness or Capital
Stock of a Person, which Person is acquired by or merged or consolidated with or into Parent or any
of its Subsidiaries, or which agreement or instrument is assumed by Parent or any of its
Subsidiaries in connection with an acquisition of assets from such Person, as in effect at the time
of such acquisition, merger or consolidation, (vi) with respect to a Subsidiary (or any of its
property or assets) imposed pursuant to an agreement entered into for the direct or indirect sale
or disposition of all or substantially all the Capital Stock or assets of such Subsidiary (or the
property or assets that are subject to such restriction), during an interim period prior to the
closing of such sale or disposition of such Capital Stock, property or assets, (vii) customary
restrictions on the assignment or transfer of any licenses or other contracts, or of any property
or assets subject thereto, (viii) customary restrictions in agreements relating to purchase money
financing arrangements (or other arrangements relating to Indebtedness incurred to finance or
refinance the acquisition, leasing, construction or improvement of property (real or personal) or
assets) or contained in pledges, mortgages or other security agreements with respect to such
property or assets, (ix) the extension, replacement or continuation of contractual obligations in
existence on the date hereof; provided, that, any such encumbrances or restrictions
taken as a whole contained in such extension, replacement or continuation are no less favorable to
Agent and Lenders in any material respect than those encumbrances and restrictions under or
pursuant to the contractual obligations so extended, replaced or continued, (x) agreements entered
into in the ordinary course of business with customers or supplier as to cash or other deposits or
net worth required by such customers or suppliers, (xi) customary provisions in joint venture or
other agreements or instruments entered into in the ordinary course of business of the applicable
Person, (xii) any other agreement or instrument in effect at or entered into on the Closing Date,
(xiii) Hedging Agreements, (xiv) pursuant to an agreement or instrument (a “Refinancing Agreement”)
effecting a refinancing of Indebtedness Incurred pursuant to, or that otherwise extends, renews,
refunds, refinances or replaces, an agreement or instrument referred to in clause (v) or (xii) of
this Section 10.8 or this clause (xiv) (an “Initial Agreement”) or contained in any amendment,
supplement or other
modification to an Initial Agreement (an “Amendment”); provided, however, that the
encumbrances and restrictions contained in any such Refinancing Agreement or Amendment taken as a
whole are no less favorable to Agent and the Lenders in any material respect than encumbrances and
restrictions contained in the Initial Agreement or Initial Agreements to which such Refinancing
Agreement or Amendment relates, or (xv) an agreement or instrument relating to (A) any Indebtedness
incurred after the date hereof if such encumbrances and restrictions taken as a whole are no less
favorable to Agent and the Lenders in any material respect either than the encumbrances and
restrictions contained in the Initial Agreements, or



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than is customary in comparable financings, or
(B) any sale of receivables by a Foreign Subsidiary, and except for encumbrances and
restrictions that arise or are agreed to in the ordinary course of business and do not detract from
the value of property or assets of Parent or any of its Subsidiaries in any manner material to
Parent or such Subsidiary.



     10.9 Certain Payments of Indebtedness, Etc.
Borrowers and Guarantors shall not, and shall not permit any Subsidiary to, make or agree to make
any optional or voluntary payment, prepayment, redemption, retirement, defeasance, purchase or
sinking fund payment or other acquisition for value of any of the principal of its Indebtedness
prior to the stated maturity thereof other than the Indebtedness under the Financing Agreements
(including, without limitation, by way of depositing money or securities with the trustee therefor
before the date required for the purpose of paying any portion of such Indebtedness when due), or
otherwise set aside or deposit or invest any sums for such purpose (each, an “Optional Payment”);
except, that:



          (a) any of Borrowers and Guarantors, and any such Subsidiary, may make Optional Payments in
respect of its Indebtedness permitted under Sections 10.3(a), 10.3(b), 10.3(c), 10.3(d),
10.3(g),10.3(m), 10.3(n), 10.3(r), 10.3(s), 10.3(t) and 10.3(w) (or 10.3(o) or 10.3(p) to the
extent related to any of the foregoing);



          (b) any of Borrowers and Guarantors, and any such Subsidiary, may make Optional Payments of
its Indebtedness with (i) the proceeds of Refinancing Indebtedness to the extent permitted in
Section 10.3(w) or (ii) in exchange for any Equity Interests of Parent or any Parent Entity and/or
with Net Cash Proceeds of the issuance or sale of any such Equity Interests;



          (c) Parent may establish and maintain the Convertible Note Account and make Optional Payments
in respect of the Indebtedness evidenced by the Convertible Notes with the proceeds of funds then
held in the Convertible Note Account;



          (d) Parent may make Optional Payments in respect of the Term Loan Debt; provided,
that, as to any such Optional Payment, each of the following conditions is satisfied: (i)
no such Optional Payment shall be made prior to January 1, 2012, (ii) in no event shall the
aggregate amount of such Optional Payments in any fiscal year of Parent exceed $15,000,000, (iii)
as of the date of any such Optional Payment and after giving effect thereto, using the most recent
calculation of the Borrowing Base prior to the date of any such Optional Payment, on a pro forma
basis, Excess Availability shall be not less than the greater of (A) $30,000,000 or (B) twenty-four
(24%) percent of the least of (1) the Maximum Credit or (2) the Borrowing Base or (C) the
Revolving Loan Limit, and (iv) as of the date of any such Optional Payment, and after giving effect
thereto, no Event of Default shall exist or have occurred and be continuing;



          (e) any of Borrowers and Guarantors, and any such Subsidiary, may make Optional Payments in
respect of any of its Indebtedness; provided, that, (i) the aggregate amount of all
such Optional Payments in any fiscal year of Parent shall not exceed $5,000,000 and (ii) as of the
date of any such Optional Payment, no Event of Default shall exist or have occurred and be
continuing;



          (f) any of Borrowers and Guarantors, and any such Subsidiary, may make Optional Payments in
respect of any of its Indebtedness not otherwise permitted under this Section 10.9;
provided, that, as of the date of any such Optional Payment and after giving
thereto, the Payment Conditions are satisfied and Agent shall have received a certificate of a
Responsible Officer of Parent certifying on behalf of Parent to Agent and Lenders that such payment
complies with the terms of this clause.



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     10.10 Modifications of Indebtedness, Organizational Documents and Certain Other
Agreements.
Borrowers and Guarantors shall not, and shall not permit any Subsidiary to:



          (a) amend, supplement, modify or otherwise change its certificate of incorporation, articles
of association, certificate of formation, limited liability company agreement, limited partnership
agreement or other similar organizational documents, as applicable (and, for the avoidance of
doubt, excluding by-laws, committee charters and other similar governing documents), except for
amendments, supplements, modifications or other changes (i) pursuant to transactions permitted
under Section 10.1 (1) hereof, (ii) as contemplated in Section 6.2 of the Stockholders Agreement as
in effect on the date hereof, or (iii) that do not adversely affect the ability of a Borrower,
Guarantor or such Subsidiary to borrow hereunder or otherwise adversely affect the interests of
Agent or Lenders in any material respect;



          (b) amend, supplement, modify or otherwise change, pursuant to a waiver or otherwise (or
permit the amendment, modification or other change in any manner of) any of the provisions of any
of Term Loan Documents, the Convertible Notes, any Subordinated Debt or any agreements related to
the Indebtedness permitted under Section 10.3 (j) hereof, in a manner that shortens the fixed
maturity or increases the principal amount thereof, except in the case of the Term Loan Documents
as permitted by the Intercreditor Agreement; or



          (c) amend, supplement, modify or otherwise change, pursuant to a waiver or otherwise, the
terms and conditions of the Tax Sharing Agreement in any manner that would increase the amounts
payable by Parent or any of its Subsidiaries thereunder, (other than amendments reasonably
reflecting changes in law or regulations after the date hereof), or otherwise amend, supplement,
modify or otherwise change the terms and conditions of the Tax Sharing Agreement (except to the
extent that any such amendment, supplement or modification could not reasonably be expected to have
a Material Adverse Effect).



     10.11 Sale and Leaseback Transactions. Borrowers and Guarantors shall not, and shall not permit
any Subsidiary to, enter into any Sale and Leaseback Transaction, provided that a Sale and
Leaseback Transaction shall be permitted so long as (a) the assets sold or otherwise subject to any
Disposition in connection with such Sale and Leaseback Transaction shall not include any of the
Revolving Loan Priority Collateral; (b) subject to the Intercreditor Agreement, the Net Cash
Proceeds from such sale are applied to the Obligations to the extent required under Section 2.5(b);
(c) in the event that the lease back of such property is pursuant to a Capital Lease, the
Indebtedness arising pursuant to such Capital Lease is permitted under Section 10.3; (d) in the
event that the lease back of such property is pursuant to an operating lease, such lease shall be
on market terms as reasonably determined by Parent; and (e) Borrowers and Guarantors shall have
used commercially reasonable efforts to obtain from the purchaser or transferee a Collateral Access
Agreement with respect to the property subject to such Sale and Leaseback Transaction duly executed
and delivered by the purchaser or transferee to the extent contemplated by Sections 5.2(h) or 9.8
(it being understood that Borrowers and Guarantors shall not be required to incur any expense,
provide any security or agree to any adverse term or condition exclusively and directly required in
order to obtain such Collateral Access Agreement).



     10.12 Designation of Designated Senior Debt. Borrowers and Guarantors shall not designate any
Indebtedness, other than the Obligations, as “Designated Senior Debt”, or any similar term under
and as defined in the agreements relating to the Convertible Notes or any Subordinated Debt of any
Borrower or Guarantor which contains such designation. Borrowers and Guarantors shall designate the
Obligations as “Designated Senior Debt” or any similar term under and as defined in the agreements
relating to any Subordinated Debt of any Borrower or Guarantor which contains such designation.



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     10.13 Term Loan Agreement. Borrowers and Guarantors shall not amend Section 7.2(d) of the Term
Loan Agreement to reduce any amount specified thereunder without the written consent of Agent.



SECTION 11. FINANCIAL COVENANTS




     11.1 Consolidated Fixed Charge Coverage Ratio.
At any time that Excess Availability is less than the greater of (a) $15,000,000 or (b)
fifteen (15%) percent of the least of the Maximum Credit, the Borrowing Base or the Revolving Loan
Limit (such amount, the “applicable amount”), and at all times thereafter (except as otherwise
provided below), the Consolidated Fixed Charge Coverage Ratio of Parent and its Subsidiaries (on a
consolidated basis) determined as of the end of each fiscal month most recently ended for which
Agent has received financial statements shall be not less than 1.0 to 1.0 for the period of the
immediately preceding twelve (12) consecutive fiscal months prior to such fiscal month end;
provided, that, if, at any time after Excess Availability shall be less than the
applicable amount, then Excess Availability shall be greater than such amount for ninety (90)
consecutive days (or ten (10) consecutive days if Borrowers have received a cash capital
contribution from CD&R or the CD&R Investors in an amount equal to the greater of (i) such amount
so that Excess Availability is greater than the applicable amount after the application of the
proceeds of such contribution to Qualified Cash or to prepay the Revolving Loans and (ii)
$2,500,000), Parent and its Subsidiaries shall not thereafter be required to comply with the
Consolidated Fixed Charge Coverage Ratio as set forth above until such time as Excess Availability
shall again be less than the applicable amount; provided, that, in the event that
Agent receives reasonably satisfactory evidence that, within five (5) Business Days after the date
that Excess Availability is less than the applicable amount, CD&R has requested payments from the
CD&R Investors in accordance with the terms of the agreements of CD&R with such CD&R Investors in
an amount sufficient to increase the Excess Availability in excess of the then applicable amount,
Parent and its Subsidiaries shall not thereafter be required to comply with the Consolidated Fixed
Charge Coverage Ratio as set forth above for an additional period of fifteen (15) Business Days (as
increased by the number of days, if any, necessary to permit the passage of ten (10) consecutive
days from the date of the receipt by Borrowers of such cash capital contribution (such aggregate
twenty (20) Business Day period, the “Non-Test Period”)) and during the Non-Test Period, Borrowers
will not request, and Agent and Lenders will not be required to make any Loans, except in the
discretion of Agent and Required Lenders. Any subsequent increase in Excess Availability after it
has been less than the applicable amount shall not be the basis for any cure of any Event of
Default arising prior thereto as a result of the failure to comply with the covenant in this
Section 11.1.



     11.2 Excess Availability. At all times from and after the date hereof, through and including the
date on which Borrowers deliver or cause to be delivered to Agent the quarterly consolidated
financial statements of Parent and its Subsidiaries with respect to the fiscal quarter ending on or
about May 3, 2010 in accordance with the terms hereof, the aggregate Excess Availability of
Borrowers shall not at any time be less than $15,000,000.



SECTION 12. EVENTS OF DEFAULT AND REMEDIES




     12.1 Events of Default. The occurrence or existence of any one or more of the following events are
referred to herein individually as an “Event of Default”, and collectively as “Events of Default”:



          (a) any Borrower fails to make any principal payment hereunder when due in accordance with the
terms hereof (whether at stated maturity, by mandatory prepayment or otherwise) or fails to pay
interest, fees or any of the other Obligations within three (3) Business Days after any such
interest or other amount becomes due in accordance with the terms hereof;



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          (b) any Borrower or Guarantor:



               (i) fails to perform or observe any of the covenants or other agreements contained in Sections
5.2(a), (d), (e), and (h)), 6.6, 7.1, 7.2, 7.3, 7.7, 7.8, 9.1, 9.2, 9.5 (as it relates to Revolving
Loan Priority Collateral), 9.6(a), 10 and 11 of this Agreement or the sections specified on
Schedule 12.1 hereto of the other Financing Agreements; provided, that, in
the case of a default in the observance or performance of its obligations under Section 9.6(a)
hereof, such default shall have continued unremedied for a period of two (2) Business Days after a
Responsible Officer of Parent shall have discovered such default, or



               (ii) fails to perform or observe any of the covenants or other agreements contained in
Sections 6.7, 7.4, 9.3, 9.4, 9.5 (as it relates to property other than Revolving Loan Priority
Collateral), 9.6(b), 9.6(d), 9.6(j), 9.6(k), 9.8, 9.9, 9.11(c), of this Agreement and such failure
continues for a period of fifteen (15) days after the earlier of: (A) the date on which such
failure is first known to any Responsible Officer of Parent or (B) the date on which written notice
thereof is given to Administrative Borrower by Agent;



               (iii) fails to perform or observe any of the covenants or other agreements contained in this
Agreement or any of the other Financing Agreements other than those described in Sections
12.1(b)(i) and 12.1(b)(ii) above and such failure shall continue for thirty (30) days after the
earlier of: (A) the date on which such failure is first known to any Responsible Officer of Parent
or (B) the date on which written notice thereof is given to Administrative Borrower by Agent; or



          (c) any representation or warranty made by any Borrower or Guarantor to Agent or any Lender in
this Agreement, the other Financing Agreements or that is contained in any certificate furnished
pursuant hereto that is qualified as to materiality or Material Adverse Effect shall when made or
deemed made be incorrect and any other such representation or warranty made by any Borrower or
Guarantor to Agent or any Lender shall when made or deemed made be incorrect in any material
respect;



          (d) any Guarantor revokes or terminates any guarantee of such party of the Obligations in
favor of Agent or any Lender, except as a result of a transaction permitted under Section 10.1
hereof or as otherwise permitted hereunder or any of the other Financing Agreements;



          (e) (i) one or more judgments, orders or decrees for the payment of money in an aggregate
amount in excess of $10,000,000 (net of any insurance or indemnity payments actually received in
respect thereof prior to or within sixty (60) days from the entry thereof) shall be rendered
against any Borrower or Guarantor or any combination thereof and the same shall remain
undischarged, unvacated or unbonded for a period of sixty (60) consecutive days or execution shall
not be effectively stayed, or (ii) any judgment other than for the payment of money, or injunction,
attachment, garnishment or execution is rendered against any of the Revolving Loan Priority
Collateral having a value in excess of $2,000,000 or any Collateral (whether or not including
Revolving Loan Priority Collateral) having a value in excess of $10,000,000 and either (A) is made
or rendered against any Revolving Loan Priority Collateral having a value in excess of $2,000,000
or any Collateral (whether or not including Revolving Loan Priority
Collateral) having a value in excess of $10,000,000 or (B) in the case of a deposit account,
securities account or similar account in which the value of such deposits, securities or similar
items is in excess of $5,000,000 the bank or financial intermediary maintaining such account shall
refuse to remit deposits, securities, funds or similar items in such account in excess of such
claim to any Borrower or Guarantor;



          (f) any Borrower dissolves, suspends or discontinues doing business, other than as expressly
permitted under Section 9.4 or Section 10.1 hereof, except any such dissolution, suspension, or
discontinuance that could not reasonably be expected to have a Material Adverse Effect;



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          (g) (i) any Borrower or Guarantor shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or other similar relief
with respect to it or its debts, or (B) seeking appointment of a receiver, interim receiver,
receivers, receiver and manager, trustee, custodian, conservator or other similar official for it
or for all or any substantial part of its assets, or any Borrower or Guarantor shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced against any Borrower
or Guarantor any case, proceeding or other action of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged, unstayed or unbonded for a period of sixty (60) days; or (iii)
any Borrower or Guarantor shall file any answer that indicates its consent to, acquiescence in or
approval of, any such action or proceeding referred to in clause (i) above or the relief requested
is granted sooner; or (iv) any Borrower or Guarantor shall be generally unable to, or shall admit
in writing its general inability to, pay its debts as they become due;



          (h) (i) any default in (A) any payment of principal, interest in respect of any Indebtedness
(excluding the Loans and the Letter of Credit Obligations) in excess of $15,000,000 beyond the
period of grace (not to exceed thirty (30) days), if any, provided in the instrument or agreement
under which such Indebtedness was created or (B) the observance or performance of any other
agreement or condition (including the failure to pay any amount other than principal or interest)
relating to any Indebtedness (excluding the Loans and the Letter of Credit Obligations) or with
respect to in any instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders, or beneficiary or beneficiaries of such Indebtedness (or
a trustee, agent or other representative on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice or lapse of time if required, such Indebtedness
to become due prior to its stated maturity or become subject to a mandatory offer to purchase (an
“Acceleration”) and such notice shall have lapsed and if any notice (a “Default Notice”) shall be
required to commence a grace period or declare the occurrence of an event of default before notice
of Acceleration may be delivered such Default Notice shall have been given, (ii) the subordination
provisions with respect to any Subordinated Debt shall cease to be in full force and effect and
such Subordinated Debt shall thereby cease to be validly subordinated to the Obligations as and to
the extent as provided in such subordination provisions;



          (i) (i) any material provision of any of the Financing Agreements shall cease for any reason
to be valid, binding and enforceable with respect to any Borrower or Guarantor thereto (other than
pursuant to the terms hereof or thereof), or any Borrower or Guarantor shall challenge in writing
the enforceability hereof or thereof, or shall assert in writing to Agent or any Lender, or take
any action or fail to take any action based on such assertion that any material provision hereof or
of any of the other Financing Agreements has ceased to be or is otherwise not valid, binding or
enforceable in accordance with its terms, or (ii) the Lien created by any of the Financing
Agreements shall cease to be perfected and enforceable in accordance with its terms or of the same
effect as to perfection and priority purported to be
created thereby with respect to any of the Revolving Loan Priority Collateral purported to be
subject thereto having a value in excess of $2,000,000 or any of the Collateral (whether or not
including Revolving Loan Priority Collateral) having a value in excess of $5,000,000 (except as
otherwise permitted herein or therein); provided, that, with respect any Collateral
other than Revolving Loan Priority Collateral, such default shall have continued unremedied for a
period of twenty (20) days;



          (j) an ERISA Event shall occur which results in or could reasonably be expected to have a
Material Adverse Effect; or



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          (k) any Borrower or Guarantor shall be prohibited or otherwise restrained for a period of more
than fifteen (15) days 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 within the immediately
succeeding ninety (90) day period by virtue of any determination, ruling, decision, decree or order
of any court or Governmental Authority of competent jurisdiction;



          (l) any Change of Control.



     12.2 Remedies.



          (a) At any time an Event of Default exists or has occurred and is continuing, Agent and
Lenders shall have all rights and remedies provided in this Agreement, the other Financing
Agreements, the UCC and other applicable law, all of which rights and remedies may be exercised
without notice to or consent by any Borrower or Guarantor, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights, remedies and powers
granted to Agent and Lenders hereunder, under any of the other Financing Agreements, the UCC or
other applicable law, are cumulative, not exclusive and enforceable, in Agent’s discretion,
alternatively, successively, or concurrently on any one or more occasions, and shall include,
without limitation, the right to apply to a court of equity for an injunction to restrain a breach
or threatened breach by any Borrower or Guarantor of this Agreement or any of the other Financing
Agreements. Subject to Section 14 hereof, at any time an Event of Default exists or has occurred
and is continuing, Agent may, and at the direction of the Required Lenders shall, at any time or
times, proceed directly against any Borrower or Guarantor to collect the Obligations of such
Borrower or Guarantor then due and owing without prior recourse to the Collateral.



          (b) Without limiting the generality of the foregoing, at any time an Event of Default exists
or has occurred and is continuing, Agent may, at its option and shall upon the direction of the
Required Lenders, (i) upon notice to Administrative Borrower, accelerate the payment of all
Obligations and demand immediate payment thereof to Agent for itself and the benefit of Lenders
(provided, that, upon the occurrence of any Event of Default described in Section
12.1(g), all Obligations shall automatically become immediately due and payable), and (ii)
terminate the Commitments whereupon the obligation of each Lender to make any Loan and Issuing Bank
to issue any Letter of Credit shall immediately terminate (provided, that, upon the
occurrence of any Event of Default described in Section 12.1(g), the Commitments and any such
obligation of each Lender to make a Loan or Issuing Bank to issue any Letters of Credit hereunder
shall automatically terminate).



          (c) Without limiting the foregoing, at any time an Event of Default exists or has occurred and
is continuing, Agent may, in its discretion, and subject to and in compliance with applicable law
and the terms of the Intercreditor Agreement, and subject (in the case of Term Loan Priority
Collateral) to pre-existing Liens, security interests, title imperfections and other defects and
impairments of any nature whatsoever (i) with or without judicial process or the aid or assistance
of others, enter upon any premises on or in which any of the Collateral may be located and take
possession of the Collateral or complete processing, manufacturing and repair of all or any portion
of the Collateral, (ii) require any Borrower or
Guarantor, at Borrowers’ expense, to assemble and make available to Agent any part or all of
the Collateral at any place and time reasonably designated by Agent, (iii) collect, foreclose,
receive, appropriate, setoff and realize upon any and all Collateral, (iv) remove any or all of the
Collateral from any premises on or in which the same may be located for the purpose of effecting
the sale, foreclosure or other disposition thereof or for any other purpose, (v) subject to
pre-existing rights and licenses permitted hereunder with respect to Term Loan Priority Collateral,
sell, lease, transfer, assign, deliver or otherwise dispose of any and all Collateral (including
entering into contracts with respect thereto, public or private sales at any exchange, broker’s
board, at any office of Agent or elsewhere) at such prices or terms as Agent may deem reasonable,
for cash, upon credit or for future delivery, with the Agent having the right



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to purchase the whole
or any part of the Collateral at any such public sale, all of the foregoing being free from any
right or equity of redemption of any Borrower or Guarantor, which right or equity of redemption is
hereby expressly waived and released by Borrowers and Guarantors to the fullest extent permitted by
applicable law, and/or (vi) with the consent of Required Lenders (and shall at the direction of
Required Lenders), terminate this Agreement. If any of the Collateral is sold or leased by Agent
upon credit terms or for future delivery, the Obligations shall not be reduced as a result thereof
until payment therefor is finally collected by Agent. If notice of disposition of Collateral is
required by law, ten (10) days prior notice by Agent to Administrative Borrower designating the
time and place of any public sale or the time after which any private sale or other intended
disposition of Collateral is to be made, shall be deemed to be reasonable notice thereof, and
Borrowers and Guarantors waive any other notice to the fullest extent that the consent thereto of
Borrowers and Guarantors hereunder is permitted by applicable law. In the event Agent institutes
an action to recover any Collateral or seeks recovery of any Collateral by way of prejudgment
remedy, to the fullest extent permitted by applicable law, each Borrower and Guarantor waives the
posting of any bond which might otherwise be required. At any time an Event of Default exists or
has occurred and is continuing, upon Agent’s request, Borrowers will either, as Agent shall
specify, furnish cash collateral to Issuing Bank to be used to secure and fund the reimbursement
obligations to Issuing Bank in connection with any Letter of Credit Obligations or furnish cash
collateral to Agent for the Letter of Credit Obligations. Such cash collateral shall be in the
amount equal to one hundred three (103%) percent of the amount of the Letter of Credit Obligations
plus the amount of any fees and expenses payable in connection therewith.



          (d) At any time or times that an Event of Default exists or has occurred and is continuing,
Co-Collateral Agents may, subject to the terms of the Intercreditor Agreement, in their discretion,
enforce the rights of any Borrower or Guarantor against any account debtor, secondary obligor or
other obligor in respect of any of the Accounts or other Receivables. Without limiting the
generality of the foregoing, Co-Collateral Agents may, subject to the terms of the Intercreditor
Agreement, in their discretion, at such time or times (i) notify any or all account debtors,
secondary obligors or other obligors in respect thereof that the Receivables have been assigned to
Agent and that Agent has a security interest therein and Agent may direct any or all account
debtors, secondary obligors and other obligors to make payment of Receivables directly to Agent,
(ii) extend the time of payment of, compromise, settle or adjust for cash, credit, return of
merchandise or otherwise, and upon any terms or conditions, any and all Receivables or other
obligations included in the Collateral and thereby discharge or release the account debtor or any
secondary obligors or other obligors in respect thereof without affecting any of the Obligations,
(iii) demand, collect or enforce payment of any Receivables or such other obligations, but without
any duty to do so, and Agent and Lenders shall not be liable for any failure to collect or enforce
the payment thereof and (iv) take whatever other action Co-Collateral Agents may deem necessary or
desirable for the protection of its interests and the interests of Lenders. At any time that an
Event of Default exists or has occurred and is continuing, at Co-Collateral Agents’ request, all
invoices and statements sent to any account debtor shall state that the Accounts have been assigned
to Agent and are payable directly and to Agent and Borrowers and Guarantors shall deliver to Agent
such originals of documents evidencing the sale and delivery of goods or the performance of
services giving rise to any Accounts as Agent may require. In the event any account debtor returns
Inventory when an Event of Default exists or has
occurred and is continuing, Borrowers shall, upon Agent’s request, hold the returned Inventory
in trust for Agent, segregate all returned Inventory from all of its other property, dispose of the
returned Inventory solely according to Agent’s instructions, and not issue any credits, discounts
or allowances with respect thereto without Agent’s prior written consent, except as may be required
by the terms of any pre-existing agreement permitted hereunder of any Borrower with a third-party
or by applicable law.



          (e) For the purpose of enabling Agent and Co-Collateral Agents (and to the extent necessary)
to exercise the rights and remedies under this Section 12.2 and subject to the Intercreditor
Agreement, each Borrower and Guarantor hereby grants to Agent and each of Co-Collateral Agents, a
non-exclusive



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license (exercisable at any time an Event of Default shall exist or have occurred and
only for so long as the same is continuing, but irrevocable so long as such Event of Default shall
exist or have occurred and be continuing) without payment of royalty or other compensation to any
Borrower or Guarantor, to use (directly or indirectly through any agent), license or sublicense any
of the trademarks, service-marks, trade names, business names, trade styles, designs, logos and
other source of business identifiers and other Intellectual Property and Foreign Intellectual
Property and general intangibles now owned or hereafter acquired by any Borrower or Guarantor,
wherever the same may be located, including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer programs used for the
compilation or printout thereof.



          (f) At any time an Event of Default exists or has occurred and is continuing, Agent may apply
the cash proceeds of Collateral actually received by Agent from any sale, lease, foreclosure or
other disposition of the Collateral to payment of the Obligations then due and owing, in whole or
in part and in accordance with Section 6.7 hereof, subject to the terms of the Intercreditor
Agreement, or may hold such proceeds as cash collateral for the Obligations. Borrowers and
Guarantors shall remain liable to Agent and Lenders for the payment of any deficiency with interest
at the highest rate provided for herein and all costs and expenses of collection or enforcement,
including attorneys’ fees and expenses.



SECTION 13. JURY TRIAL WAIVER; OTHER WAIVERS
CONSENTS; GOVERNING LAW




     13.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.



          (a) This Agreement and the rights and obligations of the parties hereto under this Agreement
shall be governed by the internal laws of the State of New York without giving effect to the rules
and principles of conflicts of law or other rule of law to the extent the same are not mandatorily
applicable by statute and would cause the application of the law of any jurisdiction other than the
laws of the State of New York.



          (b) Each of Borrowers, Guarantors, Agent, Lenders and Issuing Bank irrevocably (i) consents
and submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York for New
York County and the United States District Court for the Southern District of New York, and
appellate courts from either thereof, in any action instituted therein that (x) arises out of or
relates to this Agreement, (y) arises out of or relates to any of the other Financing Agreements or
(z) in any way is connected with or related or incidental to the dealings of the parties hereto in
respect of this Agreement or any of the other Financing Agreements or the transactions related
hereto or thereto, in each case under this clause (z) whether now existing or hereafter arising,
and whether in contract, tort, equity or otherwise, and (ii) to the fullest extent permitted by
applicable law, waives any objection based on venue or forum non conveniens with respect to such
action. Each of Borrowers, Guarantors, Agent, Lenders and Issuing Bank agrees that any dispute
with respect to any such matters shall be heard only in the courts described above unless such
courts shall decline to exercise jurisdiction over such dispute in whole or in part (except that
Agent and Lenders shall have the right to bring any action or proceeding against any
Borrower or Guarantor or its or their property in the courts of any other jurisdiction which
Agent deems reasonably necessary or appropriate in order to realize on the Collateral and which
have jurisdiction over such Borrower or Guarantor or property).



          (c) Each Borrower and Guarantor (to the fullest extent permitted by applicable law) hereby
waives personal service of any and all process upon it and consents that all such service of
process may be made by certified mail (return receipt requested) directed to its address set forth
herein or otherwise notified to Agent and service so made shall be deemed to be completed five (5)
days after the same shall have been so deposited in the U.S. mails, or, at Agent’s option, by
service upon any Borrower or



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Guarantor (or Administrative Borrower on behalf of such Borrower or
Guarantor) in any other manner provided under the rules of any such courts.



          (d) BORROWERS, GUARANTORS, AGENT, CO-COLLATERAL AGENTS, LENDERS AND ISSUING BANK EACH HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWERS,
GUARANTORS, AGENT, CO-COLLATERAL AGENTS, LENDERS AND ISSUING BANK EACH HEREBY AGREES AND CONSENTS
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY AND THAT ANY BORROWER, ANY GUARANTOR, AGENT, ANY LENDER OR ISSUING BANK MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.



     13.2 Waiver of Notices.
Each Borrower and Guarantor hereby expressly waives (to the fullest extent permitted by
applicable law) demand, presentment, protest and notice of protest and notice of dishonor with
respect to any and all instruments and chattel paper, included in or evidencing any of the
Obligations or the Collateral, and any and all other demands and notices of any kind or nature
whatsoever with respect to the Obligations, the Collateral and this Agreement, except such as are
expressly provided for herein or in the Intercreditor Agreement. No notice to or demand on any
Borrower or Guarantor which Agent or any Lender may elect to give shall entitle such Borrower or
Guarantor to any other or further notice or demand in the same, similar or other circumstances.



     13.3 Amendments and Waivers.



          (a) Neither this Agreement nor any other Financing Agreement (other than any Deposit Account
Control Agreement or Investment Property Control Agreement, as to which only the consent of Agent
shall be required) nor any terms hereof or thereof may be amended, waived (other than by a Borrower
or Guarantor), modified or supplemented unless such amendment, waiver, modification or supplement
is in writing signed by Agent and the Required Lenders or at Agent’s option, by Agent with the
authorization or consent of the Required Lenders, and as to amendments to any of the Financing
Agreements (other than with respect to any provision of Sections 14.1 through 14.10 and 14.13
hereof not affecting any Borrower or Guarantor), by any Borrower or Guarantor party thereto and
such amendment, waiver, discharge or termination shall be effective and binding as to all Lenders
and Issuing Bank only in
the specific instance and for the specific purpose for which given; except, that, no such
amendment, waiver, discharge or termination shall:



               (i) reduce the interest rate or any fees or extend the scheduled date of payment of principal,
interest or any fees or reduce the principal amount of any Loan or Letters of Credit, in each case
without the consent of each Lender directly affected thereby,



               (ii) increase the Commitment of any Lender over the amount thereof then in effect or provided
hereunder, in each case without the consent of such Lender directly affected thereby (it being
understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of
Default or of mandatory reduction in the aggregate Commitment of all Lenders shall not constitute
an



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increase of the Commitment of any Lender and that an increase in the available portion of any
Commitment of any Lender shall not constitute an increase in the Commitment of such Lender),



               (iii) release all or substantially all of the Collateral (except as expressly permitted
hereunder or under any of the other Financing Agreements or applicable law and except as permitted
under Section 14.11(b) hereof), without the consent of all of Lenders,



               (iv) reduce any percentage specified in the definition of Required Lenders or otherwise amend
the definition of such term or amend the percentage specified in or otherwise amend the definition
of “Supermajority Lenders”, in the case of any of the foregoing, without the consent of all of
Lenders,



               (v) consent to the assignment or transfer by any Borrower or Guarantor of any of their rights
and obligations under this Agreement (except as permitted hereunder or under any of the other
Financing Agreements), without the consent of all of Lenders,



               (vi) amend, modify or waive any terms of Section 6.7 or this Section 13.3 hereof, without the
consent of Agent and all of Lenders,



               (vii) amend, modify or waive any terms of Section 8.26, Section 9.4(a) or Section 14.16
hereof, or amend the definition of “Co-Collateral Agents”, in each case without the consent of each
of the Co-Collateral Agents, or



               (viii) increase the advance rates constituting part of the Borrowing Base or increase the
Letter of Credit Limit, or make any change to the definition of “Borrowing Base” (by adding
additional categories or components thereof), “Eligible Accounts”, “Eligible Inventory”, that would
have the effect of increasing the amount of the Borrowing Base, reduce the Dollar amount set forth
in the definition of “Dominion Event”, in each case, without the written consent of the
Supermajority Lenders and the Co-Collateral Agents.



          (b) Agent, Lenders and Issuing Bank shall not, by any act, delay, omission or otherwise be
deemed to have expressly or impliedly waived any of its or their rights, powers and/or remedies
unless such waiver shall be in writing and signed as provided herein. Any such waiver shall be
enforceable only to the extent specifically set forth therein. A waiver by Agent, any Lender or
Issuing Bank of any right, power and/or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right, power and/or remedy which Agent, any Lender or Issuing Bank would
otherwise have on any future occasion, whether similar in kind or otherwise.



          (c) Notwithstanding anything to the contrary contained in Section 13.3(a) above, in connection
with any amendment, waiver, modification or supplement, in the event that any Lender whose consent
thereto is required shall fail to consent or fail to consent in a timely manner (such Lender being
referred to herein as a “Non-Consenting Lender”), but the consent of the Required Lenders to
such amendment, waiver, modification or supplement is obtained, then the Administrative Borrower
shall have the right at any time thereafter to cause the Non-Consenting Lender to, and upon the
exercise by the Administrative Borrower of such right, such Non-Consenting Lender shall have the
obligation to, sell, assign and transfer to such Eligible Transferee as the Administrative Borrower
may specify, the Commitment of such Non-Consenting Lender and all rights and interests of such
Non-Consenting Lender pursuant thereto. The Administrative Borrower shall provide the
Non-Consenting Lender with prior written notice of its intent to exercise its right under this
Section, which notice shall specify on date on which such purchase and sale shall occur. Such
purchase and sale shall be pursuant to the terms of an Assignment and Acceptance (whether or not
executed by the Non-Consenting Lender); except, that, on the date of such purchase and sale, such
Eligible Transferee specified by the Administrative Borrower,



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shall pay to the Non-Consenting
Lender (except as such Eligible Transferee and such Non-Consenting Lender may otherwise agree) the
amount equal to: (i) the principal balance of the Loans held by the Non-Consenting Lender
outstanding as of the close of business on the business day immediately preceding the effective
date of such purchase and sale, plus (ii) amounts accrued and unpaid in respect of interest and
fees payable to the Non-Consenting Lender to the effective date of the purchase (but in no event
shall the Non-Consenting Lender be deemed entitled to any early termination fee). Such purchase
and sale shall be effective on the date of the payment of such amount to the Non-Consenting Lender
and the Commitment of the Non-Consenting Lender shall terminate on such date.



          (d) The consent of Agent shall be required for any amendment, waiver or consent affecting the
rights or duties of Agent hereunder or under any of the other Financing Agreements, in addition to
the consent of the Lenders otherwise required by this Section; provided, that, the
consent of Agent shall not be required for any other amendments, waivers or consents. The exercise
by Agent or Co-Collateral Agents, as applicable, of any of its or their rights hereunder with
respect to Reserves or Eligible Accounts or Eligible Inventory shall not be deemed an amendment to
the advance rates provided for in this Section 13.3. The consent of Issuing Bank shall be required
for any amendment, waiver or consent affecting the rights or duties of Issuing Bank hereunder or
under any of the other Financing Agreements, in addition to the consent of the Lenders otherwise
required by this Section; provided, that, the consent of Issuing Bank shall not be
required for any other amendments, waivers or consents. The consent of each Co-Collateral Agent
affected thereby shall be required for any amendment, waiver or consent affecting the rights or
duties of such Co-Collateral Agent hereunder or under any of the other Financing Agreements, in
addition to the consent of the Lenders otherwise required by this Section. Notwithstanding
anything to the contrary contained in Section 13.3(a) above, (i) in the event that Agent shall
agree that any items otherwise required to be delivered to Agent as a condition of the initial
Loans and Letters of Credit hereunder may be delivered after the date hereof, Agent may, in its
discretion, agree to extend the date for delivery of such items or take such other action as Agent
may deem appropriate as a result of the failure to receive such items as Agent may determine or may
waive any Event of Default as a result of the failure to receive such items, in each case without
the consent of any Lender and (ii) Agent may consent to any change in the type of organization,
jurisdiction of organization or other legal structure of any Borrower, Guarantor or any of their
Subsidiaries and amend the terms hereof or of any of the other Financing Agreements as may be
necessary or desirable to reflect any such change to the extent permitted hereunder, in each case
without the approval of any Lender.



          (e) In addition to the consent of all Lenders as required pursuant to clause (a)(vi) above,
the consent of Agent and a Bank Product Provider that is providing Bank Products and has
outstanding any such Bank Products at such time that are secured hereunder shall be required for
any amendment to the priority of payment of Obligations arising under or pursuant to any Hedge
Agreements of a Borrower or Guarantor or other Bank Products as set forth in Section 6.7(a) hereof.



          (f) Notwithstanding anything to the contrary set forth in this Section 13 or otherwise, Agent
may waive, in its discretion, for a period not to exceed five (5) Business Days, any Event of
Default arising from the failure of Borrowers or Guarantors (i)timely to deliver any reports and/or
other information as and when required to be delivered under Section 7.1 hereof, any financial
statement and/or other information as and when required to be delivered under Section 9.1 hereof or
(ii) to maintain its Revolving Loan Priority Collateral or provide insurance coverage for such
Revolving Loan Priority Collateral to the extent required under Section 9.5 hereof.



          (g) Notwithstanding that the consent of all Lenders is required in certain circumstances as
set forth in this Section 13, (i) each Lender is entitled to vote as such Lender may elect on any
bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the
provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions
set forth herein and (ii) the



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Required Lenders may consent to allow a Borrower or Guarantor to use
cash collateral in the context of a bankruptcy or insolvency proceeding.



     13.4 Indemnification.



          (a) Each Borrower and Guarantor shall, jointly and severally, indemnify and hold Agent, each
Co-Collateral Agent, each Lender and Issuing Bank, their respective Affiliates and their respective
officers, directors, agents, employees, advisors and counsel and their respective Affiliates (each
such person being an “Indemnitee”), harmless from and against any and all losses, claims, damages,
liabilities, costs or expenses (including attorneys’ fees and expenses) imposed on, incurred by or
asserted against any of them in connection with any litigation, investigation, claim or proceeding
commenced or threatened related to the negotiation, preparation, execution, delivery, enforcement,
performance or administration of this Agreement, any other Financing Agreements, or any undertaking
or proceeding related to any of the transactions contemplated hereby (including preparations for
and consultations concerning any such matters) or any act, omission, event or transaction related
or attendant thereto, including amounts paid in settlement, court costs, and the fees and expenses
of counsel except that Borrowers and Guarantors shall not have any obligation under this Section
13.5 to indemnify an Indemnitee or any Related Person of an Indemnitee with respect to a matter
covered hereby resulting from the gross negligence or willful misconduct of such Indemnitee or any
Related Person of such Indemnitee as determined pursuant to a final, non-appealable order of a
court of competent jurisdiction (but without limiting the obligations of Borrowers or Guarantors as
to any other Indemnitee). For purposes of this Section 13.4, a “Related Person” of an Indemnitee
shall mean any of such Indemnitee and its officers, directors, agents, employees, advisors and
counsel and their respective Affiliates (each, a “Related Person”). To the extent that the
undertaking to indemnify, pay and hold harmless set forth in this Section may be unenforceable
because it violates any law or public policy, Borrowers and Guarantors shall pay the maximum
portion which it is permitted to pay under applicable law to Agent and Lenders in satisfaction of
indemnified matters under this Section. To the extent permitted by applicable law, no Borrower or
Guarantor shall assert, and each Borrower and Guarantor 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 of the other Financing Agreements or any undertaking or transaction contemplated
hereby. No Indemnitee referred to 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 any of the other Financing Agreements or the transaction contemplated hereby or
thereby.



          (b) Without limiting the generality of the foregoing, Borrowers and Guarantors shall indemnify
and hold Agent and Lenders harmless from and against any and all losses, claims, damages,
liabilities, costs and expenses which Agent or any Lender may suffer or incur in connection with
any
Letter of Credit and any documents, drafts or acceptances relating thereto, including any
losses, claims, damages, liabilities, costs and expenses due to any action taken by an Issuing Bank
or correspondent with respect to any Letter of Credit, except for such losses, claims, damages,
liabilities, costs or expenses that are a direct result of the gross negligence or willful
misconduct of Agent or any Lender or their respective Related Persons as determined pursuant to a
final non-appealable order of a court of competent jurisdiction. Each Borrower and Guarantor
assumes all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and
levies relating to any goods subject to any Letter of Credit or any documents, drafts or
acceptances thereunder. Each Borrower and Guarantor hereby releases and holds Agent and Lenders
harmless from and against any acts, waivers, errors, delays or omissions with respect to or
relating to any Letter of Credit, except for the gross negligence or willful misconduct of Agent or
any Lender as determined pursuant to a final, non-appealable order of a court of competent
jurisdiction.



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          (c) All amounts due under this Section shall be payable thirty (30) days after written demand.
The foregoing indemnity shall survive the payment of the Obligations and the termination of this
Agreement. Notwithstanding anything to the contrary in this Section 13.5, Borrowers and Guarantors
shall not have any obligations under this Section 13.5 to any Indemnitee with respect to any Taxes,
but without limiting any obligations of Borrowers and Guarantors to any Indemnitee with respect to
Taxes under Section 6.8.



SECTION 14. THE AGENT AND CO-COLLATERAL AGENTS




     14.1 Appointment, Powers and Immunities.
Each Secured Party irrevocably designates, appoints and authorizes Wells Fargo to act as Agent
hereunder and under the other Financing Agreements and each of Wells Fargo, Bank of America, N.A.
and General Electric Capital Corporation to act as Co-Collateral Agents hereunder, in each case
with such powers as are specifically delegated to Agent and Co-Collateral Agents, respectively, by
the terms of this Agreement and of the other Financing Agreements, together with such other powers
as are reasonably incidental thereto. Agent and Co-Collateral Agents (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement and in the other Financing
Agreements, and shall not by reason of this Agreement or any other Loan Document be a trustee or
fiduciary for any Lender; (b) shall not be responsible to Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any of the other Financing
Agreements, or in any certificate or other document referred to or provided for in, or received by
any of them under, this Agreement or any other Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein or for any failure by
any Borrower or any Guarantor or any other Person to perform any of its obligations hereunder or
thereunder; and (c) shall not be responsible to Secured Parties for any action taken or omitted to
be taken by it hereunder or under any other Loan Document or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or therewith, except for
its own gross negligence or willful misconduct as determined by a final non-appealable judgment of
a court of competent jurisdiction. Agent and Co-Collateral Agents may employ agents and attorneys
in fact and shall not be responsible for the negligence or misconduct of any such agents or
attorneys in fact selected by it in good faith. Agent may deem and treat the payee of any note as
the holder thereof for all purposes hereof unless and until the assignment thereof pursuant to an
agreement (if and to the extent permitted herein) in form and substance satisfactory to Agent shall
have been delivered to and acknowledged by Agent.



     14.2 Reliance by Agent.
Agent and each Co-Collateral Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telecopy, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel, independent accountants
and other experts selected by Agent or such Co-Collateral Agent, respectively. As to any matters
not expressly provided for by this Agreement or any of the other Financing Agreements, Agent shall
in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in
accordance with instructions given by the Required Lenders or all of Lenders as is required in such
circumstance, and such instructions of such Required Lenders or of all Lenders and any action taken
or failure to act pursuant thereto shall be binding on all Lenders.



     14.3 Events of Default.



          (a) Agent shall not be deemed to have knowledge or notice of the occurrence of a Default or an
Event of Default or other failure of a condition precedent to the Loans and Letters of Credit
hereunder, unless and until Agent has received written notice from a Lender, or Borrower specifying
such Event of Default or
any unfulfilled condition precedent, and stating that such notice is a
“Notice of Default or



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Failure of Condition”. In the event that Agent receives such a Notice of
Default or Failure of Condition, Agent shall give prompt notice thereof to the Lenders. Agent
shall (subject to Section 14.7 hereof) take such action with respect to any such Event of Default
or failure of condition precedent as shall be directed by the Required Lenders to the extent
provided for herein; provided, that, unless and until Agent shall have received
such directions, Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to or by reason of such Event of Default or failure of condition
precedent, as it shall deem advisable in the best interest of Lenders. Without limiting the
foregoing, and notwithstanding the existence or occurrence and continuance of an Event of Default
or any other failure to satisfy any of the conditions precedent set forth in Section 4 of this
Agreement to the contrary, unless and until otherwise directed by the Required Lenders, Agent may,
but shall have no obligation to, continue to make Loans and Issuing Bank may, but shall have no
obligation to, issue or cause to be issued any Letter of Credit for the ratable account and risk of
Lenders from time to time if Agent believes making such Loans or issuing or causing to be issued
such Letter of Credit is in the best interests of Lenders.



          (b) Except with the prior written consent of Agent, no Lender or Issuing Bank may assert or
exercise any enforcement right or remedy in respect of the Loans, Letter of Credit Obligations or
other Obligations, as against any Borrower or Guarantor or any of the Collateral or other property
of any Borrower or Guarantor.



     14.4 Wells Fargo in its Individual Capacity; Co-Agents in their Individual Capacity.



          (a) With respect to its Commitment and the Loans made and Letters of Credit issued or caused
to be issued by it (and any successor acting as Agent), so long as Wells Fargo shall be a Lender
hereunder, it shall have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as Agent, and the term “Lender” or “Lenders” shall, unless
the context otherwise indicates, include Wells Fargo in its individual capacity as Lender
hereunder. Wells Fargo (and any successor acting as Agent) and its Affiliates may (without having
to account therefor to any Lender) lend money to, make investments in and generally engage in any
kind of business with Borrowers (and any of its Subsidiaries or Affiliates) as if it were not
acting as Agent, and Wells Fargo and its Affiliates may accept fees and other consideration from
any Borrower or Guarantor and any of its Subsidiaries and Affiliates for services in connection
with this Agreement or otherwise without having to account for the same to Lenders.



          (b) With respect to its Commitment and the Loans made (and any successor acting as a
Co-Collateral Agent), so long as each of Wells Fargo, Bank of America, N.A. and General Electric
Capital Corporation shall be a Lender hereunder, it shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as a Co-Collateral
Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include
such Co-Collateral Agent in its individual capacity as Lender hereunder. Each of Wells Fargo, Bank
of America, N.A. and General Electric Capital Corporation (and any successor acting as a
Co-Collateral Agent) and its Affiliates may (without having to account therefor to any Lender) lend
money to, make investments in and generally engage in any kind of business with Borrowers (and any
of its Subsidiaries or Affiliates) as if it were not acting as a Co-Collateral Agent, and each of
Wells Fargo, Bank of America, N.A. and General Electric Capital Corporation and their respective
Affiliates may accept fees and other consideration from any Borrower or Guarantor and any of its
Subsidiaries and Affiliates for services in connection with this Agreement or otherwise without
having to account for the same to Lenders.



     14.5 Indemnification. Lenders agree to indemnify Agent, each Co-Collateral Agent and Issuing Bank (to the extent not
reimbursed by Borrowers hereunder and without limiting any obligations of Borrowers hereunder)
ratably, in accordance with their Pro Rata Shares, for any and all claims of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against Agent (including by



139









 







any Lender)
or any Co-Collateral Agent arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any of the other Financing Agreements or any other
documents contemplated by or referred to herein or therein or the transactions contemplated hereby
or thereby (including the costs and expenses that Agent is obligated to pay hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents; provided,
that, no Lender shall be liable for any of the foregoing to the extent it arises from the
gross negligence or willful misconduct of the party to be indemnified as determined by a final
non-appealable judgment of a court of competent jurisdiction. The foregoing indemnity shall
survive the payment of the Obligations and the termination or non-renewal of this Agreement.



     14.6 Non-Reliance on Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on Agent, any Co-Collateral
Agent or other Lender, and based on such documents and information as it has deemed appropriate,
made its own credit analysis of Borrowers and Guarantors and has made its own decision to enter
into this Agreement and that it will, independently and without reliance upon Agent, any
Co-Collateral Agent or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the other Financing Agreements. Neither Agent nor any
Co-Collateral Agent shall be required to keep itself informed as to the performance or observance
by any Borrower or Guarantor of any term or provision of this Agreement or any of the other
Financing Agreements or any other document referred to or provided for herein or therein or to
inspect the properties or books of any Borrower or Guarantor. Agent and each Co-Collateral Agent
will use reasonable efforts to provide Lenders with any information received by Agent or such
Co-Collateral Agent from any Borrower or Guarantor which is required to be provided to Lenders or
deemed to be requested by Lenders hereunder and with a copy of any Notice of Default or Failure of
Condition received by Agent from any Borrower or any Lender; provided, that, Agent
or Co-Collateral Agents shall not be liable to any Lender for any failure to do so, except to the
extent that such failure is attributable to Agent’s or such Co-Collateral Agent’s own gross
negligence or willful misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction. Except for notices, reports and other documents expressly required to be
furnished to Lenders by Agent or Co-Collateral Agents or deemed requested by Lenders hereunder,
Agent and Co-Collateral Agents shall
not have any duty or responsibility to provide any Lender with any other credit or other
information concerning the affairs, financial condition or business of any Borrower or Guarantor
that may come into the possession of Agent or any Co-Collateral Agent.



     14.7 Failure to Act.
Except for action expressly required of Agent or any Co-Collateral Agent hereunder and under
the other Financing Agreements, Agent and each Co-Collateral Agent shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from Lenders of their indemnification obligations under Section 14.5
hereof against any and all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.



     14.8 Additional Loans.
Agent shall not make any Revolving Loans or Issuing Bank provide any Letter of Credit to any
Borrower on behalf of Lenders intentionally and with actual knowledge that such Revolving Loans or
Letter of Credit would cause the aggregate amount of the total outstanding Revolving Loans and
Letters of Credit to such Borrower to exceed the Borrowing Base, without the prior consent of all
Lenders; except, that, Agent may make such additional Revolving Loans or Issuing
Bank may provide such additional Letter of Credit on behalf of Lenders, intentionally and with
actual knowledge that such Revolving Loans or Letter of Credit will cause the total outstanding
Revolving Loans and Letters of Credit to such Borrower to exceed the Borrowing Base, as
Co-Collateral Agents may deem necessary or advisable in their discretion; provided,
that (a) the total principal amount of the additional Revolving Loans or additional
Letters of Credit to any Borrower which Agent may make or



140









 







provide after obtaining such actual
knowledge that the aggregate principal amount of the Revolving Loans equal or exceed the Borrowing
Base, plus the amount of Special Agent Advances made pursuant to Section 14.11(a)(ii) hereof then
outstanding, shall not exceed the aggregate amount equal to seven and one-half (7.5%) percent of
the Maximum Credit and shall not cause the total principal amount of the Loans and Letters of
Credit to exceed the lesser of (i) the Maximum Credit and (ii) the Revolving Loan Limit and (b) no
such additional Revolving Loan or Letter of Credit shall be outstanding more than forty-five (45)
days after the date such additional Revolving Loan or Letter of Credit is made or issued (as the
case may be), except as the Required Lenders may otherwise agree. Each Lender shall be obligated
to pay Agent the amount of its Pro Rata Share of any such additional Revolving Loans or Letters of
Credit.



     14.9 Concerning the Collateral and the Related Financing Agreements.
Each Secured Party authorizes and directs Agent and Co-Collateral Agents to enter into this
Agreement and the other Financing Agreements. Each Secured Party agrees that any action taken by
Agent, Co-Collateral Agents or Required Lenders (or such greater percentage as may be required
hereunder) in accordance with the terms of this Agreement or the other Financing Agreements and the
exercise by Agent, Co-Collateral Agents or Required Lenders (or such greater percentage as may be
required hereunder) of their respective powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all of the Secured
Parties.



     14.10 Field Audit, Examination Reports and other Information; Disclaimer by Lenders.
By signing this Agreement, each Lender:



          (a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes
available, a copy of each field audit or examination report and report with respect to the
Borrowing Base prepared or received by Agent (each field audit or examination report and report
with respect to the Borrowing Base being referred to herein as a “Report” and collectively,
“Reports”), appraisals with
respect to the Collateral and financial statements with respect to Parent and its Subsidiaries
received by Agent;



          (b) expressly agrees and acknowledges that Agent or any Co-Collateral Agent (i) does not make
any representation or warranty as to the accuracy of any Report, appraisal or financial statement
or (ii) shall not be liable for any information contained in any Report, appraisal or financial
statement;



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



          (d) agrees to keep all Reports and appraisals confidential and strictly for its internal use
in accordance with the terms of Section 15.5 hereof, and not to distribute or use any Report or
appraisals in any other manner.



     14.11 Collateral Matters.



          (a) Agent may, at the direction of Co-Collateral Agents, from time to time, at any time on or
after an Event of Default and for so long as the same is continuing or upon any other failure of a
condition precedent to the Loans and Letters of Credit hereunder, make such disbursements and
advances (“Special Agent Advances”) which Co-Collateral Agents, in their sole discretion, (i) deem
necessary or desirable either to preserve or protect the Collateral or any portion thereof or (ii)
to enhance the likelihood or maximize the amount of repayment by Borrowers and Guarantors of the
Loans and other Obligations;



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provided, that, (A) the aggregate principal amount of
the Special Agent Advances pursuant to this clause (ii) outstanding at any time, plus the then
outstanding principal amount of the additional Loans and Letters of Credit which Agent may make or
provide as set forth in Section 14.8 hereof, shall not exceed the amount equal to seven and
one-half (7.5%) percent of the Maximum Credit and (B) the aggregate principal amount of the Special
Agent Advances pursuant to this clause (ii) outstanding at any time, plus the then outstanding
principal amount of the Loans, shall not exceed the lesser of (i) the Maximum Credit and (ii) the
Revolving Loan Limit, except at Co-Collateral Agents’ option; provided, that, to
the extent that the aggregate principal amount of Special Agent Advances plus the then outstanding
principal amount of the Loans exceed the lesser of (i) the Maximum Credit and (ii) the Revolving
Loan Limit the Special Agent Advances that are in excess of the lesser of (i) the Maximum Credit
and (ii) the Revolving Loan Limit shall be for the sole account and risk of such Co-Collateral
Agents as may elect to fund such amounts and notwithstanding anything to the contrary set forth
below, no Lender shall have any obligation to provide its share of such Special Agent Advances in
excess of the lesser of (i) the Maximum Credit and (ii) the Revolving Loan Limit, or (iii) to pay
any other amount chargeable to any Borrower or Guarantor pursuant to the terms of this Agreement or
any of the other Financing Agreements consisting of (A) costs, fees and expenses and (B) payments
to Issuing Bank in respect of any Letter of Credit Obligations. The Special Agent Advances shall
be repayable on demand and together with all interest thereon shall constitute Obligations secured
by the Collateral. Special Agent Advances shall not constitute Loans but shall otherwise
constitute Obligations hereunder. Interest on Special Agent Advances shall be payable at the
Interest Rate then applicable to Base Rate Loans and shall be payable within five (5) Business Days
after demand. Without limitation of its obligations pursuant to Section 6.13, each Lender agrees
that it shall make available to Agent, upon Agent’s demand, in immediately available funds, the
amount equal to such Lender’s Pro Rata Share of each such Special Agent Advance. If such funds are
not made available to Agent by such Lender, such Lender shall be deemed a Defaulting Lender and
Agent shall be entitled to recover such funds, on demand from such Lender together with interest
thereon for each day from the date such payment was due until the date such amount is paid to
Agent at the Federal Funds Rate for each day during such period (as published by the Federal
Reserve Bank of New York or at Agent’s option based on the arithmetic mean determined by Agent of
the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. on that
day by each of the three leading brokers of Federal funds transactions in New York City selected by
Agent) and if such amounts are not paid within three (3) days of Agent’s demand, at the highest
Interest Rate provided for in Section 3.1 hereof applicable to Base Rate Loans.



          (b) Lenders hereby irrevocably authorize Agent, at its option and in its discretion to release
any security interest in, mortgage or Lien upon, any of the Collateral (i) upon termination of the
Commitments and payment and satisfaction of all of the Obligations and delivery of cash collateral
to the extent required under Section 15.1 below, or (ii) constituting property being sold or
disposed of if Administrative Borrower or any Borrower or Guarantor certifies to Agent that the
sale or Disposition is made in compliance with Section 10.1 hereof (and Agent may rely conclusively
on any such certificate, without further inquiry), or (iii) constituting property in which any
Borrower or Guarantor did not own an interest at the time the security interest, mortgage or Lien
was granted or at any time thereafter, or (iv) for which the consideration received in the
aggregate in any twelve (12) month period is less than $10,000,000 and to the extent Agent may
release its security interest in and Lien upon any such Collateral pursuant to the sale or other
disposition thereof, such sale or other disposition shall be deemed consented to by Lenders, or (v)
if required or permitted under the terms of any of the other Financing Agreements, including the
Intercreditor Agreement and any other intercreditor agreement, or (vi) approved, authorized or
ratified in writing by such percentage of Lenders as required by Section 13.3(a). Except as
provided above, Agent will not release
any security interest in, mortgage or Lien upon, any of the
Collateral without the prior written authorization of such percentage of Lenders as required by
Section 13.3(a). Upon request by Agent at any time, Lenders will promptly confirm in writing
Agent’s authority to release



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particular types or items of Collateral pursuant to this Section. In
no event shall the consent or approval of Issuing Bank to any release of Collateral be required.



          (c) Without any manner limiting Agent’s authority to act without any specific or further
authorization or consent by the Required Lenders, each Lender agrees to confirm in writing, upon
request by Agent, the authority to release Collateral conferred upon Agent under this Section.
Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be
necessary to evidence the release of the security interest, mortgage or Liens granted to Agent upon
any Collateral to the extent set forth above; provided, that, such release shall
not in any manner discharge, affect or impair the Obligations or any security interest, mortgage or
Lien upon (or obligations of any Borrower or Guarantor in respect of) the Collateral retained by
such Borrower or Guarantor.



          (d) Neither Agent nor any Co-Collateral Agent shall have any obligation whatsoever to any
Lender, Issuing Bank or any other Person to investigate, confirm or assure that the Collateral
exists or is owned by any Borrower or Guarantor or is cared for, protected or insured or has been
encumbered, or that any particular items of Collateral meet the eligibility criteria applicable in
respect of the Loans or Letters of Credit hereunder, or whether any particular reserves are
appropriate, or that the liens and security interests granted to Agent pursuant hereto or any of
the Financing Agreements or otherwise have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or to exercise at all
or in any particular manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to Agent or
Co-Collateral Agents in this Agreement or in any of the other Financing Agreements, it being
understood and agreed that in respect of the Collateral, or any act, omission or event related
thereto, subject to the other terms and conditions contained herein, Agent and any Co-Collateral
Agent may act in any manner it may deem appropriate, in its discretion, given Agent’s and each
Co-Collateral Agent’s own interest in the Collateral as a Lender and that Agent and Co-Collateral
Agents shall have no duty or liability whatsoever to any other Lender or Issuing Bank.



     14.12  Agency for Perfection.
Each Lender and Issuing Bank hereby appoints Agent and each other Lender and Issuing Bank as
agent and bailee for the purpose of perfecting the security interests in and liens upon the
Collateral of Agent in assets which, in accordance with Article 9 of the UCC can be perfected only
by possession (or where the security interest of a secured party with possession has priority over
the security interest of another secured party) and Agent and each Lender and Issuing Bank hereby
acknowledges that it holds possession of any such Collateral for the benefit of Agent as secured
party. Should any Lender or Issuing Bank obtain possession of any such Collateral, such Lender
shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver such
Collateral to Agent or in accordance with Agent’s instructions.



     14.13 Agent May File Proofs of Claim.



          (a) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any
Borrower or Guarantor, Agent (irrespective of whether the principal of any Loan or Letter of Credit
Obligation shall then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Agent shall have made any demand on the Borrowers) shall be entitled and
empowered, by intervention in such proceeding or otherwise:



               (i) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, Letter of Credit Obligations and all other Obligations (other than
obligations under Bank Products to which Agent is not a party) that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to have the claims of Lenders,
Issuing Bank,



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Agent and Co-Collateral Agents (including any claim for the reasonable compensation,
expenses, disbursements and advances of Lenders, Issuing Bank, Agent and Co-Collateral Agents and
their respective agents and counsel and all other amounts due Lenders, Issuing Bank, Agent and
Co-Collateral Agents allowed in such judicial proceeding; and



               (ii) to collect and receive any monies or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each
Lender, each Co-Collateral Agent and Issuing Bank to make such payments to Agent and, in the event
that Agent shall consent to the making of such payments directly to Lenders, Co-Collateral Agents
and Issuing Bank, to pay to Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of Agent and its agents and counsel, and any other amounts due Agent.



          (b) Nothing contained herein shall be deemed to authorize Agent or any Co-Collateral Agent to
authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of
any Lender or to authorize Agent or any Co-Collateral Agent to vote in respect of the claim of any
Lender in any such proceeding.



     14.14 Successor Agent.
Agent may resign as Agent upon thirty (30) days’ notice to Lenders and Administrative
Borrower. If Agent resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for Lenders, which successor agent shall be subject to the approval of
Administrative Borrower (such approval not to be unreasonably withheld, conditioned or delayed), so
long as no Event of Default shall exist or have occurred and be continuing. If no successor agent
is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after
consulting with Lenders and
Administrative Borrower, a successor agent from among Lenders. In the event that no Lender accepts
such designation, Agent may appoint a commercial bank that is organized under the laws of the
United States of America or any state or district thereof, has a combined capital surplus of at
least $200,000,000 and so long as no Event of Default exists or has occurred and is continuing, is
acceptable to Administrative Borrower. Upon the acceptance by the Lender so selected of its
appointment as successor agent hereunder, such successor agent shall succeed to all of the rights,
powers and duties of the retiring Agent and the term “Agent” as used herein and in the other
Financing Agreements shall mean such successor agent and the retiring Agent’s appointment, powers
and duties as Agent shall be terminated. The fees payable by Borrowers to a successor Agent shall
be the same as those payable to its predecessor unless otherwise agreed between Administrative
Borrower and such successor. After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 14 shall inure to its benefit as to any actions taken or omitted by it
while it was Agent under this Agreement. If no successor agent has accepted appointment as Agent
by the date which is thirty (30) days after the date of a retiring Agent’s notice of resignation,
the retiring Agent’s resignation shall nonetheless thereupon become effective and Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. Any resignation by Agent pursuant to this Section
shall also constitute its resignation as Issuing Bank and Swing line Lender. Upon the acceptance
of a successor’s appointment as Agent hereunder, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring Issuing Bank and Swing
Line Lender, (b) the retiring Issuing Bank and Swing Line Lender shall be discharged from all of
their respective duties and obligations hereunder or under the other Financing Agreements, and (c)
the successor Issuing Bank shall issue letters of credit in substitution for the Letters of Credit,
if any, outstanding at the time of such succession or make other arrangements satisfactory to the
retiring Issuing Bank to effectively assume the obligations of the retiring Issuing Bank with
respect to such Letters of Credit.



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     14.15 Other Agent Designations.
Agent may at any time and from time to time determine that a Lender may, in addition, be a
“Co-Agent”, “Syndication Agent”, “Documentation Agent” or similar designation hereunder and enter
into an agreement with such Lender to have it so identified for purposes of this Agreement. Any
such designation shall be effective upon written notice by Agent to Administrative Borrower of any
such designation. Any Lender that is so designated as a Co-Agent, Syndication Agent, Documentation
Agent or such similar designation by Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or any of the other Financing Agreements other than
those applicable to all Lenders as such. Without limiting the foregoing, the Lenders so identified
shall not have or be deemed to have any fiduciary relationship with any Lender and no Lender shall
be deemed to have relied, nor shall any Lender rely, on a Lender so identified as a Co-Agent,
Syndication Agent, Documentation Agent or such similar designation in deciding to enter into this
Agreement or in taking or not taking action hereunder.



     14.16 Co-Collateral Agent Determinations.
Each reference in this Agreement to any action, determination, decision, consent, approval,
satisfaction, acceptance, exercise of discretion or other act of or by or with respect to
“Co-Collateral Agents” shall be deemed to refer to such action, determination, decision, consent,
approval, satisfaction, acceptance, exercise of discretion or other act of or by the Co-Collateral
Agents exercised, as the case may be, by the consenting vote of any two (2) of the three (3)
Collateral Agents; provided, however, that if there shall be at any time only two
(2) Co-Collateral Agents, then each reference to “Co-Collateral Agents” shall be deemed to refer to
such action, determination, exercise of discretion or other conduct taken, made or exercised, as
the case may be, on the basis of the more conservative credit judgment of the two (2) remaining
Co-Collateral Agents.



     14.17 Intercreditor Arrangements.
Each Lender hereby (a) consents to the subordination of Liens provided for in the
Intercreditor Agreement, (b) agrees that it will be bound by, and will take no actions contrary to,
the provisions of the Intercreditor Agreement, (c) authorizes and instructs Agent to enter into the
Intercreditor Agreement on behalf of such Lender and agrees that Agent may take such actions on its
behalf as is contemplated by the terms of the Intercreditor Agreement, and (d) acknowledges (or is
deemed to acknowledge) that a copy of the Intercreditor Agreement was delivered, or made available,
to such Lender and it has received and reviewed the Intercreditor Agreement. In the event of any
conflict between the terms of the Intercreditor Agreement and any of the other Financing
Agreements, the terms of the Intercreditor Agreement shall govern and control except as expressly
set forth in the Intercreditor Agreement.



SECTION 15. TERM OF AGREEMENT; MISCELLANEOUS




     15.1 Term.



          (a) This Agreement and the other Financing Agreements shall become effective as of the date
set forth on the first page hereof and shall continue in full force and effect for a term ending on
the Maturity Date, unless sooner terminated pursuant to the terms hereof. In addition, Borrowers
may terminate this Agreement at any time upon ten (10) days prior written notice to Agent (which
notice shall be irrevocable) and Agent shall, at the direction of Required Lenders, terminate this
Agreement at any time that an Event of Default exists or has occurred and is continuing. Upon the
Maturity Date or any other effective date of termination of the Financing Agreements, Borrowers
shall pay to Agent all outstanding and unpaid Obligations and shall furnish cash collateral to
Agent (or at Agent’s option, a letter of credit issued for the account of Borrowers and at
Borrowers’ expense, in form and substance satisfactory to Agent, by an issuer acceptable to Agent
and payable to Agent as beneficiary) in such amounts as Agent determines are reasonably necessary
to secure Agent, Lenders and Issuing Bank from loss, cost, damage or expense, including attorneys’
fees and expenses, in connection with any issued and outstanding Letter of Credit Obligations and
checks or other payments provisionally credited to the



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Obligations and/or as to which Agent or any
Lender has not yet received final and indefeasible payment and any continuing obligations of Agent
or any Lender pursuant to any Deposit Account Control Agreement and for any of the Obligations
arising under or in connection with any Bank Products in such amounts as the Bank Product Provider
providing such Bank Products may require, unless such Obligations arising under or in connection
with any Bank Products are paid in full in cash and terminated in a manner satisfactory to such
Bank Product Provider (for purposes of this Section 15.1 and references hereto, such payments to
Agent and/or delivery of letter of credit as provided above with respect to the Obligations,
together with the termination of any commitment to make any Loans or provide any Letters of Credit
is referred to as the “Payment in Full of all Obligations”). The amount of such cash collateral
(or letter of credit, as Agent may determine) as to any Letter of Credit Obligations shall be in
the amount equal to one hundred three (103%) percent of the face amount of the Letter of Credit
Obligations plus the amount of any fees and expenses due and payable in connection therewith. Such
payments in respect of the Obligations and cash collateral shall be remitted by wire transfer in
Federal funds to the Agent Payment Account or such other bank account of Agent, as Agent may, in
its discretion, designate in writing to Administrative Borrower for such purpose. Interest shall
be due until and including the next Business Day, if the amounts so paid by Borrowers to the Agent
Payment Account or other bank account designated by Agent are received in such bank account later
than 2:00 p.m. Eastern Standard Time



          (b) No termination of the Commitments, this Agreement or any of the other Financing Agreements
shall relieve or discharge any Borrower or Guarantor of its respective duties, obligations and
covenants under this Agreement or any of the other Financing Agreements until Payment in Full of
all Obligations and Agent’s continuing security interest in the Collateral and the rights and
remedies of
Agent and Lenders hereunder, under the other Financing Agreements and applicable law, shall
remain in effect until the Payment in Full of all Obligations. Accordingly, each Borrower and
Guarantor waives any rights it may have under the UCC to demand the filing of termination
statements with respect to the Collateral and Agent shall not be required to send such termination
statements to Borrowers or Guarantors, or to file them with any filing office, unless and until the
Payment in Full of all Obligations.



     15.2 Interpretative Provisions.



          (a) All terms used herein which are defined in Article 1, Article 8 or Article 9 of the UCC
shall have the meanings given therein unless otherwise defined in this Agreement.



          (b) All references to the plural herein shall also mean the singular and to the singular shall
also mean the plural unless the context otherwise requires.



          (c) All references to any Borrower, Guarantor, Agent and Lenders pursuant to the definitions
set forth in the recitals hereto, or to any other person herein, shall include their respective
successors and assigns.



          (d) The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.



          (e) The word “including” when used in this Agreement shall mean “including, without
limitation” and the word “will” when used in this Agreement shall be construed to have the same
meaning and effect as the word “shall”.



146









 





          (f) All references to the term “good faith” used herein when applicable to Agent or any Lender
shall mean, notwithstanding anything to the contrary contained herein or in the UCC (except to the
extend mandatorily applicable), honesty in fact in the conduct or transaction concerned.



          (g) Any accounting term used in this Agreement shall have, unless otherwise specifically
provided herein, the meaning given in accordance with GAAP, and all financial computations
hereunder shall be computed unless otherwise specifically provided herein, in accordance with GAAP
as consistently applied; provided, that, if Parent or Borrowers change the method
for inventory valuation as used in the preparation of its financial statements, the Administrative
Borrower shall deliver notice of such change to Agent thirty (30) days prior to such change and
shall provide materials to Agent to show the effect on the financial statements and the Borrowing
Base, if applicable, of such change on a pro forma basis when and to the extent included in the
immediately subsequent financial statements delivered pursuant to Section 9.1(a) or Borrowing Base
delivered hereunder, it being agreed that Agent may adjust the Borrowing Base to account for the
effect thereon of any such change. Notwithstanding anything to the contrary contained in GAAP or
any interpretations or other pronouncements by the Financial Accounting Standards Board or
otherwise, the term “unqualified opinion” as used herein to refer to opinions or reports provided
by accountants shall mean an opinion or report that is unqualified and also does not include any
explanation, supplemental comment or other comment concerning the ability of the applicable person
to continue as a going concern or the scope of the audit..



          (h) Unless otherwise indicated herein, all references to time of day refer to Eastern Standard
Time or Eastern daylight saving time, as in effect in New York City on such day. For purposes of
the computation of a period of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each means “to and including”;
provided, that, with
respect to a computation of fees or interest payable to Agent or any Lender, such period shall
in any event consist of at least one full day.



          (i) Unless otherwise expressly provided herein, (i) references herein to any agreement,
document or instrument shall be deemed to include all subsequent amendments, modifications,
supplements, extensions, renewals, restatements or replacements with respect thereto, but only to
the extent the same are not prohibited by the terms hereof or of any other Financing Agreement, and
(ii) references to any statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, recodifying, supplementing or
interpreting the statute or regulation.



          (j) The captions and headings of this Agreement are for convenience of reference only and
shall not affect the interpretation of this Agreement.



          (k) This Agreement and the other Financing Agreements are the result of negotiations among and
have been reviewed by counsel to Agent and the other parties, and are the products of all parties.
Accordingly, this Agreement and the other Financing Agreements shall not be construed against Agent
or Lenders merely because of Agent’s or any Lender’s involvement in their preparation.



     15.3 Notices.



          (a) All notices, requests and demands hereunder shall be in writing and deemed to have been
given or made: if delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next Business Day, one (1)
Business Day after sending; and if by certified mail, return receipt requested, five (5) days after
mailing. Notices delivered through electronic communications shall be effective to the extent set
forth in Section 15.3(b) below. All



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notices, requests and demands upon the parties are to be given
to the following addresses (or to such other address as any party may designate by notice in
accordance with this Section):



	 	 	 
	If to any Borrower or Guarantor:

	 	NCI Building Systems, Inc.

10943 North Sam Houston parkway West

Houston, Texas 77064

Attention: Chief Financial Officer

Telephone No.: 281-897-7837

Telecopy No.: 281-897-7658

E-mail: mejohnson@ncilp.com
	 
	 	 
	with copies (which copies will not 

constitute notice to:

	 	Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Attention: David A. Brittenham

Telephone No.: 212-909-6000

Telecopy No.: 212-909-6836

E-mail: dabrittenham@debevoise.com
	 
	 	 
	If to Agent or Issuing Bank:

	 	Wells Fargo Foothill, LLC

1100 Abernathy Road

Suite 1600

Atlanta, Georgia 30328

Attention: Business Finance Manager

Telephone No.: 770-508-1300

Telecopy No.: 770-804-0551






          (b) Notices and other communications to Lenders and Issuing Bank hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant
to procedures approved by Agent or as otherwise determined by Agent; provided,
that, the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to
Section 2 hereof if such Lender or Issuing Bank, as applicable, has notified Agent that it is
incapable of receiving notices under such Section by electronic communication. Unless Agent
otherwise requires, (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 notice or other communication is not
given during the normal business hours of the recipient, such notice 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 communications is available and identifying the website address
therefor.



          15.4 Partial Invalidity.
If any provision of this Agreement is held to be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate this Agreement as a whole, but this Agreement shall be
construed as though it did not contain the particular provision held to be invalid or unenforceable
and the rights and obligations of the parties shall be construed and enforced only to such extent
as shall be permitted by applicable law.



          15.5 Confidentiality.



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          (a) Agent, each Lender and Issuing Bank shall keep confidential any Information (as defined
below) supplied to it by or on behalf of Parent or any Subsidiary pursuant to or in connection with
this Agreement or any of the other Financing Agreements or obtained by it based on a review of the
books and records of Parent or any Subsidiary; provided, that, nothing contained
herein shall limit the disclosure of any such information: (i) to the extent required by statute,
rule, regulation, subpoena or court order, (ii) to bank examiners and other regulators, auditors
and/or accountants, in connection with any litigation to which Agent, such Lender or Issuing Bank
is a party, (iii) to any Lender or Participant (or prospective Lender or Participant) or Issuing
Bank or to any Affiliate of any Lender so long as such Lender, Participant (or prospective Lender
or Participant), Issuing Bank or Affiliate shall have agreed in writing to treat such information
as confidential in accordance with this Section 15.5 (which may be in the form of an electronic
recorded agreement for any prospective Lender or Participant, including through Intralinks or
similar systems, that has been approved by Administrative Borrower, and otherwise shall be in the
form of a written manually executed agreement), or (iv) to counsel for Agent, any Lender,
Participant (or prospective Lender or Participant) or Issuing Bank; provided, that,
each Agent, Lender or Participant shall inform such counsel of the agreement under this Section
15.5 and take reasonable actions to cause compliance by any such counsel with such provision.



          (b) In the event that Agent, any Lender or Issuing Bank receives a request or demand to
disclose any confidential information pursuant to any subpoena or court order, Agent or such Lender
or Issuing Bank, as the case may be, agrees (i) to the extent not prohibited by applicable law,
Agent or such Lender or Issuing Bank will promptly notify Administrative Borrower of such request
so that Administrative Borrower may seek a protective order or other appropriate relief or remedy
and (ii) if disclosure of such information is required, disclose such information and, subject to
reimbursement by Borrowers of Agent’s or such Lender’s or Issuing Bank’s expenses, cooperate with
Administrative Borrower in the reasonable efforts to obtain an order or other reliable assurance
that confidential treatment will be accorded to such portion of the disclosed information which
Administrative Borrower so designates, to the extent not prohibited by applicable law.



          (c) In no event shall this Section 15.5 or any other provision of this Agreement, any of the
other Financing Agreements or applicable law be deemed: (i) to apply to or restrict disclosure of
information that is or becomes generally available to the public other than as a result of a
disclosure in violation hereof, (ii) to apply to or restrict disclosure of information that was or
becomes available to Agent, any Lender (or any Affiliate of any Lender) or Issuing Bank on a
non-confidential basis from a person other than a Borrower or Guarantor, (iii) to require Agent,
any Lender or Issuing Bank to return any materials furnished by a Borrower or Guarantor to Agent, a
Lender or Issuing Bank or prevent Agent, a Lender or Issuing Bank from responding to routine
mandatory informational requests from regulators, agencies and Governmental Authorities in
accordance with applicable industry standards relating to the exchange of credit information, it
being agreed that Agent, such Lender or Issuing Bank, as applicable, will endeavor when
commercially practicable to provide reasonable notice thereof to Administrative Borrower. The
obligations of Agent, Lenders and Issuing Bank under this Section 15.5 shall supersede and replace
the obligations of Agent, Lenders and Issuing Bank under any confidentiality letter relating hereto
signed prior to the date hereof or any other arrangements concerning the confidentiality of
information provided by any Borrower or Guarantor to Agent or any Lender. In addition, Agent and
Lenders may disclose the information relating to the Credit Facility set forth on Schedule
15.5(c) to Gold Sheets and other publications, and Co-Collateral Agents may otherwise use the
corporate name and logo of Borrowers and Guarantors and such information in “tombstones” or other
advertisements, public statements or marketing materials.



          (d) For purposes of this Section, “Information” means all information received from a Borrower
or Guarantor or any Subsidiary relating to Borrowers, Guarantors or any Subsidiary or any of their
respective businesses, other than any such information that is available to Agent, any Lender or
the



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Issuing Bank on a nonconfidential basis prior to disclosure by such Borrower or Guarantor or
any Subsidiary, and any materials or information filed in whole or in part with the Securities and
Exchange Commission.



          (e) Notwithstanding any other provision of this Agreement, any other Financing Agreement or
any Assignment and Acceptance, the confidentiality provisions of this Section 15.5 shall survive
with respect to each Lender and Agent until the second (2nd) anniversary of such Lender
or Agent ceasing to be a Lender or Agent, respectively.



     15.6 Successors.
This Agreement, the other Financing Agreements and any other document referred to herein or
therein shall be binding upon and inure to the benefit of and be enforceable by Agent, Lenders,
Issuing Bank, Borrowers, Guarantors and their respective successors and assigns; except, that,
other than as permitted hereunder, Borrower may not assign its rights under this Agreement, the
other Financing Agreements and any other document referred to herein or therein without the prior
written consent of Agent and Lenders. Any such purported assignment without such express prior
written consent shall be void. No Lender may
assign or otherwise transfer its rights and obligations under this Agreement without the prior
written consent of Agent and Administrative Borrower, except as provided in such Section 15.7. The
terms and provisions of this Agreement and the other Financing Agreements are for the purpose of
defining the relative rights and obligations of Borrowers, Guarantors, Agent, Lenders and Issuing
Bank with respect to the transactions contemplated hereby and there shall, other than to the extent
expressly provided with respect to Bank Product Providers, be no third party beneficiaries of any
of the terms and provisions of this Agreement or any of the other Financing Agreements.



     15.7 Assignments; Participations.



          (a) Each Lender may make assignments of all or, if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Lender (unless the Administrative Borrower and Agent
otherwise consent), of such rights and obligations under this Agreement to other financial
institutions or other Persons in each case approved in writing by Agent, Swing Line Lender and
Issuing Bank and, so long as no Event of Default shall exist or have occurred and be continuing,
Administrative Borrower, which approval shall not be unreasonably withheld or delayed;
provided, that, (i) the approval of Administrative Borrower shall not be required
in connection with assignments to another Lender, to any Affiliate of a Lender (except for
assignments to any Affiliate of a Lender in connection with or in contemplation of the sale or
other disposition of such Affiliate) or to any Approved Fund, or with respect to any assignment in
the form of a participation, (ii) the approval of Agent shall not be required for an assignment to
a Lender or any Affiliate of any Lender; (iii) such transfer or assignment will not be effective
until recorded by Agent on the Register and (iv) Agent shall have received for its sole account
payment of a processing fee from the assigning Lender or the assignee in the amount of $5,000. Upon
the receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an
assignee in accordance with this Section 15.7, the processing fee referred to in this Section
15.7(a) and any written approval of such assignment by Agent and Administrative Borrower required
by Section 15.7, Agent shall accept such Assignment and Acceptance, record the information
contained therein in the Register in accordance with Section 6.4(a) and give prompt notice of such
assignment and recordation to the Administrative Borrower.



          (b) Upon such execution, delivery, acceptance and recording as provided in this Section 15.7,
from and after the effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and to the other Financing Agreements and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations (including, without limitation, the obligation to
participate in Letter of Credit Obligations) of a Lender hereunder and thereunder and the assigning
Lender shall, to the extent that rights and obligations



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hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from its obligations under
this Agreement (except for any obligations under Section 15.5).



          (c) By execution and delivery of an Assignment and Acceptance, the assignor and assignee
thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any of the other Financing
Agreements or the execution, legality, enforceability, genuineness, sufficiency or value of this
Agreement or any of the other Financing Agreements furnished pursuant hereto, (ii) the assigning
Lender makes no representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower, Guarantor or any of their Subsidiaries or the performance or
observance by any Borrower or Guarantor of any of the Obligations; (iii) such assignee confirms
that it has received a copy of this Agreement and the other Financing Agreements, together with
such other documents and information it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (iv) such
assignee will, independently and without reliance upon the assigning Lender, Agent and based
on such documents and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the other Financing
Agreements, (v) such assignee confirms its other agreements, acknowledgments and representations as
a Lender pursuant to Section 14.6, (vi) such assignee appoints and authorizes Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement and the other
Financing Agreements as are delegated to Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto, and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this Agreement and the
other Financing Agreements are required to be performed by it as a Lender. Agent and Lenders may,
subject to Section 15.5, furnish any information concerning any Borrower or Guarantor in the
possession of Agent or any Lender from time to time to assignees and Participants.



          (d) Notwithstanding anything to the contrary in this Agreement, no assignee, which as of the
date of any assignment to it pursuant to this Section 15.7 would be entitled to any payment under
Section 3.5, 3.6, 6.8 or 9.12 in an amount greater than the assigning Lender would have been
entitled to as of such date under such Sections with respect to the rights assigned, shall be
entitled to such greater payments unless the assignment was made after an Event of Default under
Section 12.1(a) or (g) has occurred and is continuing or Administrative Borrower has expressly
consented in writing to waive the benefit of this provision at the time of such assignment.



          (e) Each Lender may sell participations to one or more banks or other entities in or to all or
a portion of its rights and obligations under this Agreement and the other Financing Agreements
(including, without limitation, all or a portion of its Commitments and the Loans owing to it and
its participation in the Letter of Credit Obligations, without the consent of Agent or the other
Lenders); provided, that, (i) such Lender’s obligations under this Agreement
(including, without limitation, its Commitment hereunder) and the other Financing Agreements shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, and Borrowers, Guarantors, the other Lenders and Agent shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Financing Agreements, (iii) such Lender shall remain
the holder of any Loan for all purposes under this Agreement and the other Financing Agreements,
and (iv) the Participant shall not have any rights under this Agreement or any of the other
Financing Agreements (the Participant’s rights against such Lender in respect of such participation
to be those set forth in the agreement executed by such Lender in favor of the Participant relating
thereto) and all amounts payable by any Borrower or Guarantor under this Agreement (including,
without limitation, Sections 3.5, 3.6, 6.8 and 9.12) and the other Financing Agreements shall



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be
determined as if such Lender had not sold such participation. Any agreement pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of any provision of
this Agreement.



          (f) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such Lenders from such Federal
Reserve Bank; provided, that, no such pledge shall release such Lender from any of
its obligations hereunder or substitute any such pledgee for such Lender as a party hereto.



          (g) Any Lender that is an Issuing Bank may at any time assign all of its Commitments pursuant
to this Section 15.7. If such Issuing Bank ceases to be a Lender, it may, at its option, resign as
Issuing Bank and such Issuing Bank’s obligations to issue Letters of Credit shall terminate but it
shall retain all of the rights and obligations of Issuing Bank hereunder with respect to Letters of
Credit outstanding as of the effective date of its resignation and all Letter of Credit Obligations
with respect
thereto (including the right to require Lenders to make Revolving Loans or fund risk
participations in outstanding Letter of Credit Obligations), shall continue.



          (h) On or prior to the effective date of any assignment pursuant to this Section 15.7, the
assigning Lender shall surrender any outstanding notes held by it all or a portion of which are
being assigned. Any such notes surrendered by the assigning Lender shall be returned by Agent to
the Administrative Borrower marked “cancelled”.



          (i) No assignment or participation made or purported to be made to any assignee Lender or
Participant shall be effective without the prior written consent of the Administrative Borrower if
it would require the Administrative Borrower to make any filing with any Governmental Authority or
qualify any Loan, or any of the Financing Agreements under the laws of any jurisdiction, and the
Administrative Borrower shall be entitled to request and receive such information and assurances as
it may reasonably request from any Lender or any assignee or Participant to determine whether any
such filing or qualification is required or whether any assignment or participation is otherwise in
accordance with applicable law.



          (j) If the Administrative Borrower wishes to replace the Loans or Commitments under this
Agreement with ones having different terms, it shall have the option, with the consent of Agent and
subject to at least three Business Days’ advance notice to the Lenders, instead of prepaying the
Loans or reducing or terminating the Commitments to be replaced, to (i) require the Lenders to
assign without representation, warranty or recourse of any kind whatsoever, such Loans or
Commitments to Agent or its designees and (ii) amend the terms thereof in accordance with Section
13.3, which amendment shall in any such case reflect the resignation effective contemporaneously
therewith of Agent as agent. Pursuant to any such assignment, all Loans and Commitments to be
replaced shall be purchased at par (allocated among the Lenders under such Facility in the same
manner as would be required if such Loans were being optionally prepaid or such Commitments were
being optionally reduced or terminated by the Borrower), accompanied by payment of any accrued
interest and fees thereon and breakage costs as otherwise required hereunder. By receiving such
purchase price, the existing Lenders shall automatically be deemed to have assigned without
representation, warranty or recourse of any kind whatsoever, the Loans or Commitments under such
Facility, and accordingly no other action by such Lenders shall be required in connection
therewith. The provisions of this paragraph are intended to facilitate the maintenance of the
perfection and priority of existing security interests in the Collateral during any such
replacement.



     15.8 Entire Agreement.
This Agreement, the other Financing Agreements, any supplements hereto or thereto, and any
instruments or documents delivered or to be delivered in connection herewith or therewith
represents the entire agreement and understanding concerning the subject matter hereof and



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thereof
between the parties hereto, and supersede all other prior agreements, understandings, negotiations
and discussions, representations, warranties, commitments, proposals, offers and contracts
concerning the subject matter hereof, whether oral or written. In the event of any inconsistency
between the terms of this Agreement and any schedule or exhibit hereto, the terms of this Agreement
shall govern.



     15.9 USA Patriot Act.
Each Lender subject to the USA PATRIOT Act (Title III of Pub.L. 107-56 (signed into law
October 26, 2001) (the “Act”) hereby notifies Borrowers and Guarantors that pursuant to the
requirements of the Act, it is required to obtain, verify and record information that identifies
each person or corporation who opens an account and/or enters into a business relationship with it,
which information includes the name and address of Borrowers and Guarantors and other information
that will allow such Lender to identify such
person in accordance with the Act and any other applicable law. Borrowers and Guarantors are
hereby advised that any Loans or Letters of Credit hereunder are subject to satisfactory results of
such verification.



     15.10 Counterparts, Etc.
This Agreement or any of the other Financing Agreements may be executed in any number of
counterparts, each of which shall be an original, but all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile or other electronic method of transmission shall have
the same force and effect as the delivery of an original executed counterpart of this Agreement or
any of such other Financing Agreements. Any party delivering an executed counterpart of any such
agreement by telefacsimile or other electronic method of transmission shall also deliver an
original executed counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of such agreement.





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     IN WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have caused these presents to be
duly executed as of the day and year first above written.



	 	 	 	 	 
	LENDERS:



WELLS FARGO FOOTHILL, LLC, as

Administrative and Co-Collateral
Agent and a Lender

 	 
	By:  	/s/ Kathy Plisko
 	 
	 	Name:  	Kathy Plisko 	 
	 	Title:  	SVP 	 
	 
	BANK OF AMERICA, N.A., as
Co-Collateral Agent and a Lender

 	 
	By:  	/s/ Daniel K. Clancy
 	 
	 	Name:  	Daniel K. Clancy 	 
	 	Title:  	Senior Vice President 	 
	 
	GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Collateral Agent and a Lender

 	 
	By:  	/s/ Thomas G. Sullivan
 	 
	 	Name:  	Thomas G. Sullivan 	 
	 	Title:  	Duly Authorized Signatory 	 
	 



 









 







	 	 	 	 	 
	 	BORROWERS:



NCI GROUP, INC

 	 
	 	By:  	/s/ Todd R. Moore
 	 
	 	 	Name:  	Todd R. Moore 	 
	 	 	Title:  	Senior Vice President and
General Counsel 	 
	 
	 	ROBERTSON-CECO II CORPORATION

 	 
	 	By:  	/s/ Todd R. Moore
 	 
	 	 	Name:  	Todd R. Moore 	 
	 	 	Title:  	Senior Vice President and
General Counsel 	 
	 
	 	GUARANTORS:



NCI BUILDING SYSTEMS, INC.

 	 
	 	By:  	/s/ Todd R. Moore
 	 
	 	 	Name:  	Todd R. Moore 	 
	 	 	Title:  	Senior Vice President and
General Counsel 	 
	 
	 	STEELBUILDING.COM INC.

 	 
	 	By:  	/s/ Todd R. Moore
 	 
	 	 	Name:  	Todd R. Moore 	 
	 	 	Title:  	Senior Vice President and
General Counsel