exv10w1



 







Exhibit 10.1




EXECUTION VERSION




CREDIT AND GUARANTY AGREEMENT




dated as of March 16, 2006




among




EASTON-BELL SPORTS, INC.,

as U.S. Borrower,




CERTAIN CANADIAN SUBSIDIARIES OF EASTON BELL SPORTS, INC.,

as Canadian Borrowers,




RBG HOLDINGS CORP.,




and




CERTAIN SUBSIDIARIES OF EASTON BELL SPORTS, INC.,

as U.S. Guarantors,




CERTAIN SUBSIDIARIES OF EASTON BELL SPORTS, INC.,

as Canadian Guarantors,




WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Collateral Agent,




WACHOVIA CAPITAL FINANCE CORPORATION (CANADA),

as Canadian Agent,




VARIOUS LENDERS,




WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arranger and Joint Bookrunner,




and




GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Syndication Agent, Joint Lead Arranger and Joint Bookrunner,




 






$405,000,000 U.S. Senior Secured Credit Facilities

C$12,000,000 Canadian Senior Secured Credit Facility




 









 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 	 	 	 
	SECTION 1 DEFINITIONS AND INTERPRETATION	 	 	2	 
	 

	 	Section 1.1
	 	Definitions
	 	 	2	 
	 

	 	Section 1.2
	 	Accounting Terms
	 	 	44	 
	 

	 	Section 1.3
	 	Interpretation, etc.
	 	 	44	 
	 

	 	Section 1.4
	 	Exchange Rates; Currency Equivalents
	 	 	44	 
	SECTION 2 LOANS AND LETTERS OF CREDIT	 	 	45	 
	 

	 	Section 2.1
	 	Term Loans
	 	 	45	 
	 

	 	Section 2.2
	 	U.S. Revolving Loans
	 	 	46	 
	 

	 	Section 2.3
	 	Canadian Revolving Loans
	 	 	47	 
	 

	 	Section 2.4
	 	Swingline Loans
	 	 	52	 
	 

	 	Section 2.5
	 	Issuance of Letters of Credit and Purchase of Participations Therein
	 	 	59	 
	 

	 	Section 2.6
	 	Pro Rata Shares; Availability of Funds
	 	 	63	 
	 

	 	Section 2.7
	 	Use of Proceeds
	 	 	64	 
	 

	 	Section 2.8
	 	Evidence of Debt; Register; Lenders’ Books and Records; Notes
	 	 	64	 
	 

	 	Section 2.9
	 	Interest on Loans
	 	 	65	 
	 

	 	Section 2.10
	 	Conversion/Continuation
	 	 	69	 
	 

	 	Section 2.11
	 	Default Interest
	 	 	70	 
	 

	 	Section 2.12
	 	Fees
	 	 	71	 
	 

	 	Section 2.13
	 	Scheduled Payments/Commitment Reductions
	 	 	72	 
	 

	 	Section 2.14
	 	Voluntary Prepayments/Commitment Reductions
	 	 	73	 
	 

	 	Section 2.15
	 	Mandatory Prepayments/Commitment Reductions
	 	 	75	 
	 

	 	Section 2.16
	 	Application of Prepayments/Reductions
	 	 	77	 
	 

	 	Section 2.17
	 	General Provisions Regarding Payments
	 	 	78	 
	 

	 	Section 2.18
	 	Ratable Sharing
	 	 	79	 
	 

	 	Section 2.19
	 	Making or Maintaining Eurodollar Rate Loans
	 	 	80	 
	 

	 	Section 2.20
	 	Increased Costs; Capital Adequacy
	 	 	82	 
	 

	 	Section 2.21
	 	Taxes; Withholding, etc.
	 	 	84	 
	 

	 	Section 2.22
	 	Obligation to Mitigate
	 	 	87	 
	 

	 	Section 2.23
	 	Defaulting Lenders
	 	 	87	 
	 

	 	Section 2.24
	 	Removal or Replacement of a Lender
	 	 	88	 
	 

	 	Section 2.25
	 	Incremental Facilities
	 	 	89	 
	 

	 	Section 2.26
	 	Relationship between the Agents
	 	 	90	 
	 

	 	Section 2.27
	 	Joint and Several Liability of the Canadian Borrowers
	 	 	90	 
	SECTION 3 CONDITIONS PRECEDENT	 	 	91	 
	 

	 	Section 3.1
	 	Closing Date
	 	 	91	 
	 

	 	Section 3.2
	 	Conditions to Each Credit Extension
	 	 	97	 
	SECTION 4 REPRESENTATIONS AND WARRANTIES	 	 	98	 
	 

	 	Section 4.1
	 	Organization; Requisite Power and Authority; Qualification
	 	 	98	 
	 

	 	Section 4.2
	 	Capital Stock and Ownership
	 	 	98	 
	 

	 	Section 4.3
	 	Due Authorization
	 	 	99	 
	 

	 	Section 4.4
	 	No Conflict
	 	 	99	 
	 

	 	Section 4.5
	 	Governmental Consents
	 	 	99	 
	 

	 	Section 4.6
	 	Binding Obligation
	 	 	99	 










i









 








	 	 	 	 	 	 	 	 	 
	 

	 	Section 4.7
	 	Historical Financial Statements
	 	 	99	 
	 

	 	Section 4.8
	 	Projections
	 	 	100	 
	 

	 	Section 4.9
	 	No Material Adverse Change
	 	 	100	 
	 

	 	Section 4.10
	 	Insurance
	 	 	100	 
	 

	 	Section 4.11
	 	Adverse Proceedings, etc.
	 	 	100	 
	 

	 	Section 4.12
	 	Payment of Taxes
	 	 	101	 
	 

	 	Section 4.13
	 	Properties
	 	 	101	 
	 

	 	Section 4.14
	 	Environmental Matters
	 	 	101	 
	 

	 	Section 4.15
	 	No Defaults
	 	 	102	 
	 

	 	Section 4.16
	 	Material Contracts
	 	 	102	 
	 

	 	Section 4.17
	 	Governmental Regulation
	 	 	102	 
	 

	 	Section 4.18
	 	Margin Stock
	 	 	103	 
	 

	 	Section 4.19
	 	Employee Matters
	 	 	103	 
	 

	 	Section 4.20
	 	Employee Benefit Plans
	 	 	103	 
	 

	 	Section 4.21
	 	Certain Fees
	 	 	104	 
	 

	 	Section 4.22
	 	Solvency
	 	 	104	 
	 

	 	Section 4.23
	 	Compliance with Statutes, etc.
	 	 	104	 
	 

	 	Section 4.24
	 	Disclosure
	 	 	104	 
	 

	 	Section 4.25
	 	Subordination. Designation of the Credit Documents
as “Designated Senior
Debt”; Etc.
	 	 	105	 
	SECTION 5 AFFIRMATIVE COVENANTS	 	 	105	 
	 

	 	Section 5.1
	 	Financial Statements and Other Reports
	 	 	105	 
	 

	 	Section 5.2
	 	Existence
	 	 	110	 
	 

	 	Section 5.3
	 	Payment of Taxes and Claims
	 	 	110	 
	 

	 	Section 5.4
	 	Maintenance of Properties
	 	 	110	 
	 

	 	Section 5.5
	 	Insurance
	 	 	111	 
	 

	 	Section 5.6
	 	Inspections
	 	 	111	 
	 

	 	Section 5.7
	 	Compliance with Laws
	 	 	111	 
	 

	 	Section 5.8
	 	Environmental
	 	 	112	 
	 

	 	Section 5.9
	 	Subsidiaries
	 	 	113	 
	 

	 	Section 5.10
	 	Additional Material Real Estate Assets
	 	 	114	 
	 

	 	Section 5.11
	 	Interest Rate Protection
	 	 	115	 
	 

	 	Section 5.12
	 	Further Assurances
	 	 	115	 
	 

	 	Section 5.13
	 	Cash Management Systems
	 	 	115	 
	 

	 	Section 5.14
	 	Certain Post Closing Obligations
	 	 	116	 
	SECTION 6 NEGATIVE COVENANTS	 	 	116	 
	 

	 	Section 6.1
	 	Indebtedness
	 	 	117	 
	 

	 	Section 6.2
	 	Liens
	 	 	120	 
	 

	 	Section 6.3
	 	Equitable Lien
	 	 	122	 
	 

	 	Section 6.4
	 	No Further Negative Pledges
	 	 	123	 
	 

	 	Section 6.5
	 	Restricted Junior Payments
	 	 	123	 
	 

	 	Section 6.6
	 	Restrictions on Subsidiary Distributions
	 	 	125	 
	 

	 	Section 6.7
	 	Investments
	 	 	125	 
	 

	 	Section 6.8
	 	Financial Covenants
	 	 	127	 
	 

	 	Section 6.9
	 	Fundamental Changes; Disposition of Assets; Acquisitions
	 	 	129	 
	 

	 	Section 6.10
	 	Disposal of Subsidiary Interests
	 	 	130	 








ii




 









 









	 	 	 	 	 	 	 	 	 
	 

	 	Section 6.11
	 	Sales and Lease Backs
	 	 	130	 
	 

	 	Section 6.12
	 	Transactions with Shareholders and Affiliates
	 	 	131	 
	 

	 	Section 6.13
	 	Conduct of Business
	 	 	131	 
	 

	 	Section 6.14
	 	Permitted Activities of Holdings
	 	 	131	 
	 

	 	Section 6.15
	 	Amendments or Waivers of Certain Related Agreements
	 	 	132	 
	 

	 	Section 6.16
	 	Amendments or Waivers of with respect to Subordinated Indebtedness	 		132	 
	 

	 	Section 6.17
	 	Fiscal Year; Accounting Policies; Corporate Changes
	 	 	132	 
	 

	 	Section 6.18
	 	No Other “Designated Senior Indebtedness”
	 	 	133	 
	SECTION 7 U.S. GUARANTY	 	 	133	 
	 

	 	Section 7.1
	 	U.S. Guaranty of the Obligations
	 	 	133	 
	 

	 	Section 7.2
	 	Contribution by Guarantors
	 	 	133	 
	 

	 	Section 7.3
	 	Payment by Guarantors
	 	 	134	 
	 

	 	Section 7.4
	 	Liability of Guarantors Absolute
	 	 	134	 
	 

	 	Section 7.5
	 	Waivers by U.S. Guarantors
	 	 	137	 
	 

	 	Section 7.6
	 	U.S. Guarantors’ Rights of Subrogation, Contribution, etc.
	 	 	137	 
	 

	 	Section 7.7
	 	Continuing Guaranty
	 	 	138	 
	 

	 	Section 7.8
	 	Authority of U.S. Guarantors or the Credit Parties
	 	 	138	 
	 

	 	Section 7.9
	 	Financial Condition of the Credit Parties and U.S. Guarantors
	 	 	138	 
	 

	 	Section 7.10
	 	Bankruptcy, etc.
	 	 	139	 
	 

	 	Section 7.11
	 	Discharge of Guaranty Upon Sale of U.S. Guarantor
	 	 	140	 
	SECTION 7A GUARANTY OF CANADIAN OBLIGATIONS	 	 	140	 
	 

	 	Section 7A.1
	 	The Guaranty
	 	 	140	 
	 

	 	Section 7A.2
	 	Bankruptcy
	 	 	141	 
	 

	 	Section 7A.3
	 	Nature of Liability
	 	 	141	 
	 

	 	Section 7A.4
	 	Independent Obligation
	 	 	141	 
	 

	 	Section 7A.5
	 	Authorization
	 	 	142	 
	 

	 	Section 7A.6
	 	Reliance
	 	 	142	 
	 

	 	Section 7A.7
	 	Waiver
	 	 	142	 
	 

	 	Section 7A.8
	 	Limitation on Enforcement
	 	 	143	 
	 

	 	Section 7A.9
	 	Confirmation of Payment
	 	 	143	 
	SECTION 8 EVENTS OF DEFAULT	 	 	144	 
	 

	 	Section 8.1
	 	Events of Default
	 	 	144	 
	 

	 	Section 8.2
	 	Acceleration; Remedies
	 	 	146	 
	 

	 	Section 8.3
	 	Allocation of Payments After Exercise of Remedies
	 	 	147	 
	SECTION 9 AGENTS	 	 	149	 
	 

	 	Section 9.1
	 	Appointment of Agents
	 	 	149	 
	 

	 	Section 9.2
	 	Powers and Duties
	 	 	150	 
	 

	 	Section 9.3
	 	General Immunity
	 	 	150	 
	 

	 	Section 9.4
	 	Agents Entitled to Act as Lender
	 	 	151	 
	 

	 	Section 9.5
	 	Lenders’ Representations, Warranties and Acknowledgment
	 	 	152	 
	 

	 	Section 9.6
	 	Right to Indemnity
	 	 	152	 
	 

	 	Section 9.7
	 	Successor Administrative Agent, Collateral Agent. Swingline Lender,
Canadian Agent and Canadian Swingline Lender
	 	 	152	 
	 

	 	Section 9.8
	 	Collateral Documents and Guaranty
	 	 	154	 
	SECTION 10 MISCELLANEOUS	 	 	155	 
	 

	 	Section 10.1
	 	Notices
	 	 	155	 








iii




 









 








	 	 	 	 	 	 	 	 	 
	 

	 	Section 10.2
	 	Expenses
	 	 	156	 
	 

	 	Section 10.3
	 	Indemnity
	 	 	156	 
	 

	 	Section 10.4
	 	Set Off
	 	 	157	 
	 

	 	Section 10.5
	 	Amendments and Waivers
	 	 	157	 
	 

	 	Section 10.6
	 	Successors and Assigns; Participations
	 	 	160	 
	 

	 	Section 10.7
	 	Independence of Covenants
	 	 	163	 
	 

	 	Section 10.8
	 	Survival of Representations, Warranties and Agreements
	 	 	163	 
	 

	 	Section 10.9
	 	No Waiver; Remedies Cumulative
	 	 	164	 
	 

	 	Section 10.10
	 	Marshalling; Payments Set Aside
	 	 	164	 
	 

	 	Section 10.11
	 	Severability
	 	 	164	 
	 

	 	Section 10.12
	 	Obligations Several; Independent Nature of Lenders’ Rights
	 	 	164	 
	 

	 	Section 10.13
	 	Headings
	 	 	165	 
	 

	 	Section 10.14
	 	APPLICABLE LAW
	 	 	165	 
	 

	 	Section 10.15
	 	CONSENT TO JURISDICTION
	 	 	165	 
	 

	 	Section 10.16
	 	WAIVER OF JURY TRIAL
	 	 	166	 
	 

	 	Section 10.17
	 	Confidentiality
	 	 	166	 
	 

	 	Section 10.18
	 	Usury Savings Clause
	 	 	167	 
	 

	 	Section 10.19
	 	Counterparts
	 	 	167	 
	 

	 	Section 10.20
	 	Effectiveness
	 	 	167	 
	 

	 	Section 10.21
	 	USA Patriot Act
	 	 	168	 
	 

	 	Section 10.22
	 	Judgment Currency
	 	 	168	 
	SECTION 11 SPECIAL PROVISIONS APPLICABLE TO LENDERS UPON THE OCCURRENCE OF A SHARING EVENT	 	 	168	 
	 

	 	Section 11.1
	 	Participations
	 	 	168	 
	 

	 	Section 11.2
	 	Administrative Agent’s Determinations Binding
	 	 	169	 
	 

	 	Section 11.3
	 	Participation Payments in U.S. Dollars
	 	 	169	 
	 

	 	Section 11.4
	 	Delinquent Participation Payments
	 	 	170	 
	 

	 	Section 11.5
	 	Settlement of Participation Payments
	 	 	170	 
	 

	 	Section 11.6
	 	Participation Obligations Absolute
	 	 	170	 
	 

	 	Section 11.7
	 	Increased Costs; Indemnities
	 	 	170	 
	 

	 	Section 11.8
	 	Provisions Solely to Effect Intercreditor Agreement
	 	 	171	 








iv





 









 







	 	 	 	 	 	 	 
	APPENDIX:

	 	 	A	 	 	Notice Addresses
	 
	 	 	 	 	 	 
	SCHEDULES:

	 	 	1.1	(a)	 	Certain Adjustments to Financial Covenant Definitions
	 

	 	 	1.1	(b)	 	Existing Letters of Credit
	 

	 	 	1.1	(c)	 	Existing Capital Leases
	 

	 	 	3.1	(i)	 	Closing Date Mortgaged and Leasehold Properties
	 

	 	 	3.1	(k)	 	Environmental Reports
	 

	 	 	4.1	 	 	Jurisdictions of Organization
	 

	 	 	4.2	 	 	Capital Stock and Ownership
	 

	 	 	4.10	 	 	Insurance
	 

	 	 	4.13	 	 	Real Estate Assets
	 

	 	 	4.16	 	 	Material Contracts
	 

	 	 	4.20	 	 	Employee Benefits Plans
	 

	 	 	5.14	 	 	Cash Management Systems
	 

	 	 	6.1	 	 	Certain Indebtedness
	 

	 	 	6.2	 	 	Certain Liens
	 

	 	 	6.7	 	 	Certain Investments
	 

	 	 	6.12	 	 	Certain Affiliate Transactions
	 
	 	 	 	 	 	 
	EXHIBITS:

	 	 	A-1	 	 	Funding Notice
	 

	 	 	A-2	 	 	Conversion/Continuation Notice
	 

	 	 	A-3	 	 	Issuance Notice
	 

	 	 	B-1	 	 	Tranche B Term Loan Note
	 

	 	 	B-2	 	 	U.S. Revolving Loan Note
	 

	 	 	B-3	 	 	Canadian Revolving Loan Note
	 

	 	 	B-4	 	 	U.S. Swingline Note
	 

	 	 	B-5	 	 	Canadian Swingline Note
	 

	 	 	C	 	 	Compliance Certificate
	 

	 	 	D	 	 	Opinions of Counsel
	 

	 	 	E	 	 	Assignment Agreement
	 

	 	 	F	 	 	Certificate Re: Non-Bank Status
	 

	 	 	G-1	 	 	Closing Date Certificate
	 

	 	 	G-2	 	 	Solvency Certificate
	 

	 	 	H	 	 	Counterpart Agreement
	 

	 	 	I	 	 	Mortgage
	 

	 	 	J	 	 	Landlord Waiver and Consent Agreement






v 




 









 








CREDIT AND GUARANTY AGREEMENT




     This CREDIT AND GUARANTY AGREEMENT, dated as of March 16, 2006, is entered into by and among
EASTON-BELL SPORTS, INC. f/k/a Riddell-Bell Holdings, Inc., as U.S. Borrower (the
“Company”), a Delaware corporation, CERTAIN CANADIAN SUBSIDIARIES OF THE COMPANY, as
Canadian borrowers (the “Canadian Borrowers”, and together with the Company, the
“Borrowers”), RBG HOLDINGS CORP. (“Holdings”), a Delaware corporation, CERTAIN
SUBSIDIARIES OF THE COMPANY (together with Holdings, the U.S. Guarantors), CERTAIN SUBSIDIARIES OF
THE COMPANY (together with the Company, Holdings and the U.S. Guarantors, collectively, the
“Canadian Guarantors”), the Lenders party thereto from time to time, and WACHOVIA BANK,
NATIONAL ASSOCIATION, as Administrative Agent (together with its permitted successors in such
capacity, “Administrative Agent”) and Collateral Agent (together with its permitted
successors in such capacity, “Collateral Agent”), WACHOVIA CAPITAL MARKETS, LLC
(“Wachovia Securities”), as Joint Lead Arranger and Joint Bookrunner, GOLDMAN SACHS CREDIT
PARTNERS L.P. (“GSCP”), as Joint Lead Arranger and Joint Bookrunner and Sole Syndication
Agent (in such capacity, “Syndication Agent”) and WACHOVIA CAPITAL FINANCE CORPORATION
(CANADA), an Ontario corporation, as Canadian administrative agent for the Canadian Lenders (the
“Canadian Agent”).



RECITALS:




     WHEREAS, capitalized terms used in these Recitals shall have the respective meanings set forth
for such terms in Section 1.1 hereof;



     WHEREAS, the Company has entered into the Stock Purchase Agreement with Jas. D. Easton, Inc.,
a California corporation, pursuant to which the Company shall acquire (the “Easton
Acquisition”) all of the capital stock of Easton Sports, Inc., a California corporation (the
“Acquired Company”);



     WHEREAS, after consummation of the Easton Acquisition, the Acquired Company will be a
wholly-owned Subsidiary of the Company;



     WHEREAS, the Company also desires to refinance the Existing Indebtedness with the proceeds of
the loans hereunder;



     WHEREAS, Lenders have agreed to extend certain credit facilities to the Borrowers, in an
aggregate amount not to exceed (a) $405.0 million (subject to any increases pursuant to Section
2.25 hereunder), consisting of (i) $335.0 million aggregate principal amount of Tranche B Term
Loans and (ii) up to $70.0 million aggregate principal amount of U.S. Revolving Commitments and (b)
up to C$12.0 million aggregate principal amount of Canadian Revolving Commitments, the proceeds of
which will be used for, among other things, to fund, in part, the Easton Acquisition (including
refinancing or retiring certain existing debt and repurchasing or redeeming preferred stock, and
paying fees, commissions and expenses in connection with the Easton Acquisition) for permitted
capital expenditures and Permitted



 









 




Acquisitions, to provide for the ongoing working capital requirements of the Borrowers
following the Easton Acquisition and for general corporate purposes;




     WHEREAS, the Company has agreed to secure all of its Obligations by granting to the Collateral
Agent for the benefit of the Secured Parties a First Priority Lien on substantially all of its
assets;



     WHEREAS, the Canadian Borrowers have agreed to secure their respective Obligations by granting
to the Canadian Agent for the benefit of the Canadian Secured Parties a First Priority Lien on
substantially all of their assets;



     WHEREAS, the U.S. Guarantors have agreed to guarantee the obligations of the Company and the
Canadian Borrowers hereunder and to secure their respective Obligations by granting to the
Collateral Agent, for the benefit of the Secured Parties, a First Priority Lien on substantially
all of their respective assets; and



     WHEREAS, the Canadian Guarantors have agreed to guarantee the Canadian Obligations of the
Canadian Borrowers hereunder and to secure their respective Canadian Obligations by granting to
Canadian Agent, for the benefit of the Canadian Secured Parties, a First Priority Lien on
substantially all of their respective assets.



     NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:



SECTION 1



DEFINITIONS AND INTERPRETATION




     Section 1.1 Definitions.



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



     “Acceptance Lender” means a Canadian Lender who purchases Acceptance Notes in
accordance with Section 2.3(c)(vii) but does not accept or purchase Bankers’ Acceptances.



     “Acceptance Notes” has the meaning given to it in Section 2.3(c)(vii).



     “Acquired Company” shall have the meaning set forth in the preamble.



     “Additional Senior Subordinated Notes” as defined in Section 6.1(p).



     “Additional Senior Subordinated Note Indenture” means the trust indenture in form and
substance reasonably satisfactory to the Administrative Agent pursuant to which any Additional
Senior Subordinated Notes may be issued in accordance with the terms of this Agreement, as



2









 




such indenture may be further amended, restated, supplemented, modified, extended, renewed or
replaced from time to time in accordance with Section 6.16 of this Agreement.




     “Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with
respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing
(and rounding upward to the next whole multiple of 1/100 of 1%) (i) (a) the rate per annum (rounded
to the nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be the offered
rate which appears on the page of the Telerate Screen which displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number 3740 or 3750, as
applicable) for deposits (for delivery on the first day of such period) with a term equivalent to
such period in U.S. Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (b) in the event the rate referenced in the preceding
clause (a) does not appear on such page or service or if such page or service shall cease to be
available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by
Administrative Agent to be the offered rate on such other page or other service which displays an
average British Bankers Association Interest Settlement Rate for deposits (for delivery on the
first day of such period) with a term equivalent to such period in U.S. Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (c) in
the event the rates referenced in the preceding clauses (a) and (b) are not available, the rate per
annum (rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to first class banks
in the London interbank market for deposits (for delivery on the first day of the relevant period)
in U.S. Dollars of amounts in same day funds comparable to the principal amount of the applicable
Loan of Administrative Agent, in its capacity as a Lender, for which the Adjusted Eurodollar Rate
is then being determined with maturities comparable to such period as of approximately 11:00 a.m.
(London, England time) on such Interest Rate Determination Date, by (ii) an amount equal to (a) one
minus (b) the Applicable Reserve Requirement.



     “Administrative Agent” as defined in the preamble hereto.



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



     “Affected Lender” as defined in Section 2.19(b).



     “Affected Loans” as defined in Section 2.19(b).



     “Affiliate” means, as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the purposes of this
definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as applied to any Person, means the possession, directly



3









 




or indirectly, of the power (i) other than with respect to Ontario Teachers’ Pension Plan
Board, to vote 10% or more of the Securities having ordinary voting power for the election of
directors of such Person or (ii) to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities or by contract or otherwise;
provided, that no Agent or Lender shall be deemed to be an “Affiliate” of any Credit Party.




     “Agents” means Syndication Agent, Administrative Agent, Collateral Agent, and Canadian
Agent and “Agent” means any one of them.



     “Aggregate Amounts Due” as defined in Section 2.18.



     “Aggregate Payments” as defined in Section 7.2.



     “Agreement” means this Credit and Guaranty Agreement, dated as of March 16, 2006, as
it may be amended, supplemented or otherwise modified from time to time.



     “Applicable Margin” means:



     (a) from the Closing Date until the commencement of the first interest period occurring after
the date of delivery of the Compliance Certificate and the financial statements for the Fiscal
Quarter ended June 2006 (i) with respect to Revolving Loans that are Eurodollar Rate Loans, 2.00%,
per annum; (ii) with respect to Revolving Loans and Swingline Loans that are Base Rate Loans, 1.00%
per annum; (iii) with respect to Revolving Loans which are made by way of Bankers’ Acceptance
Advances, 2.00% per annum, (b) thereafter, with respect to Revolving Loans (including Bankers’
Acceptance Advances) and Swingline Loans, a percentage, per annum, determined by reference to the
Leverage Ratio in effect from time to time as set forth below:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable Margin for	 	 	 	 
	 	 	 	 	 	 	Revolving Loans	 	 	Applicable Margin	 
	 	 	Applicable Margin	 	 	and Swingline	 	 	for Revolving Loans	 
	 	 	for Revolving Loans	 	 	Loans	 	 	which are Bankers’	 
	Leverage Ratio	 	(Eurodollar Loans)	 	 	(Base Rate Loans)	 	 	Acceptance Advances	 
	3 5.50:1.00
	 	 	2.25	%	 	 	1.25	%	 	 	2.25	%
	< 5.50:1.00
	 	 	 	 	 	 	 	 	 	 	 	 
	3  4.50:1.00
	 	 	2.00	%	 	 	1.00	%	 	 	2.00	%
	< 4.50:1.00
	 	 	 	 	 	 	 	 	 	 	 	 
	3  4.00:1.00
	 	 	1.75	%	 	 	0.75	%	 	 	1.75	%
	< 4.00:1.00
	 	 	1.50	%	 	 	0.50	%	 	 	1.50	%





and (c) (i) with respect to Tranche B Term Loans that are Eurodollar Rate Loans, 1.75%, per
annum and (ii) with respect to Tranche B Term Loans that are Base Rate Loans, 0.75% per annum;
provided that so long as the Leverage Ratio is less than 4.00:1.00 as of the end of the




4









 







most recently ended Fiscal Quarter, the Applicable Margin shall be (i) with respect to Tranche B
Term Loans that are Eurodollar Rate Loans, 1.50%, per annum and (ii) with respect to Tranche B Term
Loans that are Base Rate Loans, 0.50% per annum.




     No change in the Applicable Margin shall be effective until three Business Days after the date
on which Administrative Agent shall have received the applicable financial statements and a
Compliance Certificate pursuant to Section 5.1(d) calculating the Leverage Ratio. At any time and
so long as the Company has not submitted to Administrative Agent the applicable information as and
when required under Section 5.1(d), the Applicable Margin shall be determined as if the Leverage
Ratio were in excess of 5.50:1.00 in the case of Revolving Loans and Swingline Loans and 5.50:1.00
in the case of Tranche B Term Loans. Within one Business Day of receipt of the applicable
information under Section 5.1(d), Administrative Agent shall give each Lender facsimile or
telephonic notice (confirmed in writing) of the Applicable Margin in effect from such date.



     “Applicable Reserve Requirement” means, at any time, for any Eurodollar Rate Loan, the
maximum rate, expressed as a decimal, at which reserves (including, without limitation, any basic
marginal, special, supplemental, emergency or other reserves) are required to be maintained with
respect thereto against “Eurocurrency liabilities” (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors of the Federal Reserve System or
other applicable banking regulator. Without limiting the effect of the foregoing, the Applicable
Reserve Requirement shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities which includes deposits by reference to which the
applicable Adjusted Eurodollar Rate or any other interest rate of a Loan is to be determined, or
(ii) any category of extensions of credit or other assets which include Eurodollar Rate Loans. A
Eurodollar Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed subject to reserve requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender. The rate of interest on
Eurodollar Rate Loans shall be adjusted automatically on and as of the effective date of any change
in the Applicable Reserve Requirement.



     “Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any exchange of property
with, any Person (other than the Company or any Guarantor Subsidiary), in one transaction or a
series of transactions, of all or any part of Holdings’ or any of its Subsidiaries’ businesses,
assets or properties of any kind, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without limitation, the Capital
Stock of any of Holdings’ Subsidiaries, other than (i) inventory (or other assets) sold, licensed
or leased in the ordinary course of business (excluding any such sales, licenses or leases by
operations or divisions discontinued or to be discontinued), (ii) disposals of obsolete, worn-out
or surplus property for aggregate consideration of less than $1,000,000 with respect to any
transaction or series of related transactions or in the aggregate during any Fiscal Year, and (iii)
sales of other assets for aggregate consideration of less than $2,500,000 with respect to any
transaction or series of related transactions or in the aggregate during any Fiscal Year.



5









 





     “Assignment Agreement” means an Assignment and Assumption Agreement substantially in
the form of Exhibit E, with such amendments or modifications as may be approved by Administrative
Agent.



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



     “Available Amount” shall mean the sum, without duplication, of:



     (a) the sum of Excess Cash Flow (determined on a cumulative basis and in no event less than
zero) for all fiscal years ending after December 31, 2006 to the extent not required to prepay the
Obligations pursuant to Section 2.15(e) (excluding any amount not required to prepay the
Obligations as a result of the Minimum Liquidity Exclusion), plus



     (b) the amount of Cash proceeds actually received by the Company from the issuance by Holdings
of any Capital Stock (or capital contribution in respect thereof) after the Closing Date that was
not required to prepay the Obligations pursuant to Section 2.15(c); plus



     (c) an amount equal to any returns (including dividends, interest, distributions, returns of
principal and profits on sale) actually received by the Company or any of its Subsidiaries in cash
in respect of any Investments made pursuant to Section 6.7(n); minus



     (d) the aggregate amount of all Investments made since the Closing Date pursuant to Section
6.7(n) and Restricted Payments made since the Closing Date pursuant to Sections 6.5(d) and 6.5(k).



     “BA Lender” means any Canadian Lender other than the Acceptance Lenders.



     “BA Period” means a period of 1, 2, 3 or 6 months or such other period as Canadian
Agent may agree, in each case, commencing on a Business Day selected by a Canadian Borrower in its
irrevocable Funding Notice or Conversion/Continuation Notice with respect to a Bankers’ Acceptance
Advance delivered to Canadian Agent in accordance with Section 2.3 or 2.10 (as applicable),
provided that the foregoing provision relating to BA Periods is subject to the following:




     (a) any BA Period that would otherwise extend beyond the Revolving Commitment
Termination Date shall end on such date;




     (b) the Canadian Borrowers shall select BA Periods so as not to require a payment or
prepayment of a Bankers’ Acceptance Advance during a BA Period for such Bankers’ Acceptance
Advance; and




     (c) the Canadian Borrowers shall select BA Periods so there shall be no more than five
(5) separate Bankers’ Acceptance Advances in existence at any one time.



6









 





     “BA Rate” means, for any particular term, the rate per annum, calculated on the basis
of a year of 365 days, equal to the annual discount rate (calculated to two decimal places with
        .005 or more being rounded upward) for Bankers’ Acceptances denominated in Canadian Dollars for the
Canadian Reference Bank for such term and face amount that appears on the Reuters Screen CDOR Page
as of 10:00 a.m. (Toronto time) on the day of the commencement of such term, provided that if such
rate does not appear on the Reuters Screen CDOR Page on such day as contemplated, then the BA Rate
on such day shall be calculated as the arithmetic average of the rates for the terms referred to
above applicable to Canadian Dollar Bankers’ Acceptances quoted by the Canadian Reference Bank as
of 10:00 a.m. (Toronto time) on such day or if such day is not a Business Day, then on the
immediately preceding Business Day.



     “Bankers’ Acceptance” means a bill of exchange subject to the Bills of Exchange Act
(Canada) or a depository bill defined and issued in accordance with the Depository Bills and Notes
Act (Canada) and denominated in Canadian Dollars and drawn by a Canadian Borrower and accepted by a
Canadian Lender in accordance with Section 2.3(c) and includes (without duplication and where the
context requires) an Acceptance Note.



     “Bankers’ Acceptance Advance” means the advance of funds to a Canadian Borrower by way
of acceptance and purchase of Bankers’ Acceptances or of an Acceptance Note, in each case, in
accordance with the provisions of Section 2.3(c).



     “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as
now and hereafter in effect and the Bankruptcy and Insolvency Act (Canada), the Companies Creditors
Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), or, in each case, any
successor statute.



     “Base Rate” means, for any day, a rate per annum equal to the greater of (i) the Prime
Rate in effect on such day and (ii) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.



     “Base Rate Loan” means a Loan bearing interest at a rate determined by reference to
the Base Rate or the Canadian Base Rate.



     “Beneficiary” means each Agent, Issuing Bank, Lender, Lender Counterparty, and
Indemnitee.



     “BSC” means Bell Sports Corp.



     “Borrowers” shall have the meaning set forth in the preamble.



     “Business Day” shall mean a day other than a Saturday, Sunday or other day on which
commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by
law to close; provided, however, that (a) when used in connection with a rate



7









 




determination, borrowing or payment in respect of the Adjusted Eurodollar Rate or any
Eurodollar Rate Loans, the term “Business Day” shall also exclude any day on which banks in London,
England are not open for dealings in deposits of U.S. Dollars in the London interbank market, (b)
the term “Business Day” shall also exclude any day on which banks are not open for foreign exchange
dealings between banks in the exchange of the home country of such foreign currency and (c) with
respect to all notices and determinations in connection with, and payments of principal and
interest on, any Canadian Dollar Loan, any day that is a Business Day described in clauses (a) or
(b) and on which commercial banks are open for business in Toronto, Ontario.




     “Canadian Agent” shall have the meaning set forth in the preamble of this Agreement
and any successors in such capacity.



     “Canadian Base Rate” means at any time, the greater of (i) the Canadian Prime Rate and
(ii) the annual rate of interest equal to the sum of (A) the CDOR Rate in effect at such time
plus (B) one percent (1%) per annum.



     “Canadian Borrower” or “Canadian Borrowers” shall have the meaning set forth
in the first paragraph of this Agreement.



     “Canadian Collateral” means any and all assets and rights and interests in or to the
property of the Credit Parties pledged from time to time as security for the Canadian Obligations
pursuant to the Canadian Collateral Documents, whether now owned or hereafter acquired.



     “Canadian Collateral Documents” shall mean collectively (a) the Canadian Security
Agreement, the Canadian Mortgage Instrument, if any, (b) the Deed(s) of Hypothec, Bond(s) and
Pledge(s) referred to in Section 9.1(b) hereof, and (c) any other documents executed and delivered
in connection with the granting, attachment and perfection of the Canadian Secured Parties’
security interests and Liens arising thereunder in the Canadian Collateral, including, without
limitation, PPSA and Register of Personal and Movable Real Rights (Quebec) financing statements and
any amendment thereto.



     “Canadian Credit Parties” means the Canadian Borrowers and all of the Canadian
Guarantors whether direct or indirect and whether now owned or hereafter acquired.



     “Canadian Dollar Base Rate Loan” means any Canadian Revolving Loans made by the
Canadian Lenders in Canadian Dollars accruing interest based on the Canadian Base Rate.



     “Canadian Dollar Equivalent” shall mean, with respect to any amount denominated in
U.S. Dollars, the equivalent amount thereof in Canadian Dollars as determined by the Administrative
Agent at such time on the basis of the Spot Rate (determined in respect of the most recent
Revaluation Date) for the purchase of Canadian Dollars with U.S. Dollars.



     “Canadian Dollars” or “CAD” or “C$” shall mean the lawful currency of
Canada.



     “Canadian Guarantors” shall mean Holdings, the Company, each wholly-owned Domestic
Subsidiary of the Company (other than any Immaterial Subsidiary), each wholly-



8









 




owned Canadian Subsidiary of the Company (other than any Immaterial Subsidiary) and each other
Subsidiary that agrees to comply with the terms of Section 5.9 hereof applicable to a wholly-owned
Domestic Subsidiary or a wholly-owned Canadian Subsidiary.




     “Canadian Lenders” means Wachovia Capital Finance Corporation (Canada), and such other
Lenders permitted under Canadian law to carry on business in Canada as may be added as Canadian
Lenders in accordance with the terms of this Agreement, each of whom is either resident in Canada
for the purposes of the Income Tax Act (Canada) or an “authorized foreign bank” as defined in
Section 2 of the Bank Act (Canada) for which all amounts paid or credited to it on account of the
Canadian Obligations are in respect of its “Canadian banking business” (as defined in subsection
248(l) of the Income Tax Act (Canada)) for purposes of subsection 212(13.3) of the Income Tax Act
(Canada).



     “Canadian Lending Office” shall mean, initially, the office in Canada of each Canadian
Lender designated as such Canadian Lender’s Canadian Lending Office shown on Appendix A; and
thereafter, such other office in Canada of such Canadian Lender as such Canadian Lender may from
time to time specify to the Agents and the Company as the office of such Canadian Lender at which
Canadian Dollar Base Rate Loans of such Canadian Lender are to be made.



     “Canadian Mortgage Instrument” shall mean each Mortgage related to a Real Property
Asset, if any, owned by any of the Canadian Credit Parties.



     “Canadian Obligations” means all Obligations of the Canadian Borrowers and the other
Canadian Credit Parties.



     “Canadian Prime Rate” shall mean, for any day, the rate of interest publicly announced
from time to time by the Canadian Reference Bank as its prime rate in effect for determining
interest rates on Canadian Dollar denominated commercial loans in Canada (which such rate is not
necessarily the most favored rate of the Canadian Reference Bank and the Canadian Reference Bank
may lend to its customers at rates that are at, above or below such rate) or, if the Canadian
Reference Bank ceases to announce a rate so designated, any similar successor rate designated by
the Canadian Reference Bank.



     “Canadian Reference Bank” means Bank of Montreal, or its successor and assigns, or
such other bank as the Canadian Lenders may from time to time designate.



     “Canadian Revolving Commitment” shall mean, with respect to each Canadian Revolving
Lender, the commitment of such Canadian Revolving Lender to make Canadian Revolving Loans in an
aggregate principal amount designated in Canadian Dollars at any time outstanding up to such
Canadian Revolving Lender’s Canadian Revolving Commitment Percentage of the Canadian Revolving
Committed Amount.



     “Canadian Revolving Commitment Percentage” shall mean, for each Canadian Revolving
Lender, the percentage identified as its Canadian Revolving Commitment Percentage in its Lender
Commitment Letter, as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 10.6.



9









 





     “Canadian Revolving Committed Amount” shall have the meaning set forth in Section
2.3(a).



     “Canadian Revolving Lender” shall mean, as of any date of determination, any Canadian
Lender holding a Canadian Revolving Commitment on such date.



     “Canadian Revolving Loans” shall have the meaning set forth in Section 2.3.



     “Canadian Revolving Note” or “Canadian Revolving Notes” shall mean the
promissory notes of the Canadian Borrowers in favor of each of the Canadian Revolving Lenders
evidencing the Canadian Revolving Loans in the form of Exhibit B-3, individually or collectively,
as appropriate, as such promissory notes may be amended, modified, supplemented, extended, renewed
or replaced from time to time.



     “Canadian Secured Parties” means Canadian Agent and Canadian Lenders.



     “Canadian Security Agreement” shall mean the Canadian Pledge and Security Agreement
dated as of the Closing Date given by certain Canadian Credit Parties and certain of the U.S.
Credit Parties, for the benefit of the Canadian Secured Parties, as amended, modified or
supplemented from time to time in accordance with its terms.



     “Canadian Subsidiary” shall mean any Subsidiary of the Company organized under the
federal laws of Canada or any province or territory of Canada.



     “Canadian Swingline Lender” shall mean Canadian Agent.



     “Canadian Swingline Loan” or “Canadian Swingline Loans” shall have the meaning
set forth in Section 2.4(b).



     “Canadian Swingline Note” shall mean the promissory note of the Canadian Borrowers in
favor of Canadian Swingline Lender evidencing the Canadian Swingline Loans in the form of Exhibit
B-5, as such promissory note may be amended, modified, supplemented, extended, renewed or replaced
from time to time.



     “Canadian Swingline Sublimit” means the lesser of (i) C$5,000,000, and (ii) the
aggregate unused amount of Canadian Revolving Commitments then in effect.



     “Capital Lease” means, as applied to any Person, any lease of any property (whether
real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be
accounted for as a capital lease on the balance sheet of that Person.



     “Capital Stock” means any and all shares, units, interests, participations or other
equivalents (however designated) of equity of a corporation, any and all equivalent ownership
interests in a Person (other than a corporation), including, without limitation, partnership and



10









 




trust interests and membership interests, and any and all warrants, rights or options to
purchase or other arrangements or rights to acquire any of the foregoing.




     “Cash” means money, currency or a credit balance in any demand or Deposit Account.



     “Cash Equivalents” means, as at any date of determination, (i) marketable securities
(a) issued or directly and unconditionally guaranteed as to interest and principal by the United
States Government or (b) issued by any agency of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public instrumentality thereof, in
each case maturing within one year after such date and having, at the time of the acquisition
thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper
maturing no more than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv)
certificates of deposit or bankers’ acceptances maturing within one year after such date and issued
or accepted by any Lender or by any commercial bank organized under (1) the laws of the United
States of America or any state thereof or the District of Columbia or (2) the laws of Canada, that
in each case has combined capital and surplus of not less than $500,000,000 and that has (or is a
subsidiary of a bank holding company that has) a long-term unsecured debt rating of at least A or
the equivalent thereof by Moody’s; (v) shares of any money market mutual fund that has
substantially all of its assets invested continuously in the types of investments referred to in
clauses (i) through (iv); (vi) instruments equivalent to those referred to in clauses (i) through
(v) above denominated in Canadian Dollars; and (vii) instruments equivalent to those referred to in
clauses (i) through (v) above denominated in Euros or any other foreign currency comparable in
credit quality and tenor to those referred to above and customarily used by corporations for short
term cash management purposes in any jurisdiction outside the United States of America;
provided that, immediately before and after giving effect to an Investment in any
instrument pursuant to this clause (vii), the aggregate amount of such Investments shall not exceed
$10,000,000.



     “CDOR Rate” means the rate of interest per annum determined on the basis of an average
thirty (30) day rate applicable to Canadian Dollar bankers’ acceptances appearing on the “Reuters
Screen CDOR Page” (as defined in the International Swap Dealer Association, Inc.’s definitions, as
amended, restated, supplemented or otherwise modified from time to time) as of 10:00 a.m. (Toronto
time) on the Determination Date (rounded upward, if necessary, to the nearest 1/100th of
1%). If, for any reason, such rate does not appear on the Reuters Screen CDOR Page, then the “CDOR
Rate” shall be determined by Canadian Agent to be the arithmetic average of the rate per annum at
which deposits in Canadian Dollars would be offered by banks listed on Schedule I to the Bank Act
(Canada) to Canadian Agent.



     “Certificate Re: Non-Bank Status” means a certificate substantially in the form of
Exhibit F.



     “Change of Control” means, (a) at any time prior to an initial public offering of the
Parent, Holdings or the Company, (i) the Sponsors shall cease to beneficially own and control,



11









 




directly or indirectly, at least 51% on a fully diluted basis of the voting interests in the
Capital Stock of Holdings; (ii) Fenway shall cease to beneficially own and control, directly or
indirectly, at least 40% on a fully diluted basis of the voting interests in the Capital Stock of
Holdings, (iii) any Person (other than an Equity Investor) or any Persons (other than one or more
Equity Investors) that together (A) are a group (within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Securities Exchange Act of 1934 or any successor provision) or (B) are acting, for
purposes of acquiring, holding or disposing of securities, as a group (within the meaning of Rule
13d-5(b)(1) of the Securities Exchange Act of 1934 or any successor provision), shall have
obtained, directly or indirectly, the power (whether or not exercised) to elect a majority of the
members of the board of directors (or similar governing body) of Holdings; (iv) Holdings shall
cease to beneficially own and control 100% on a fully diluted basis of the voting interest in the
Capital Stock of the Company; or (v) any “change of control” or similar event under the Senior
Subordinated Notes, the Refinancing Notes or the Additional Senior Subordinated Notes that would
require the Company to tender for or otherwise give rise to an accelerated repayment of the Senior
Subordinated Notes, the Refinancing Notes or the Additional Senior Subordinated Notes and (b) at
any time after an initial public offering of the Parent, Holdings or the Company, (i) any Person
(other than an Equity Investor) or any Persons (other than one or more Equity Investors) that
together (A) are a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934 or any successor provision) or (B) are acting, for purposes of
acquiring, holding or disposing of securities, as a group (within the meaning of Rule 13d-5(b)(1)
of the Securities Exchange Act of 1934 or any successor provision), shall have acquired beneficial
ownership of and control, directly or indirectly, 35% or more on a fully diluted basis of the
voting interest in the Capital Stock of Holdings and such beneficial ownership represents a greater
percentage of the voting interest in the Capital Stock of Holdings owned directly or indirectly by
the Sponsors or (ii) the replacement of a majority of the board of directors of the Company over a
two-year period from the directors who constituted the board of directors at the beginning of such
period, and such replacement directors shall not have been either (A) approved by a vote of at
least a majority of the board of directors of the Company then still in office who either were
members of such board of directors at the beginning of such period or whose election as a member of
such board of directors was previously so approved or (B) otherwise designated by a Sponsor.




     “Chicago Real Property” means the property located at 3670 North Milwaukee Avenue,
Chicago, Illinois.



     “Class” means (i) with respect to Lenders, each of the following classes of Lenders:
(a) Lenders having Tranche B Term Loan Exposure, (b) Lenders having Revolving Exposure (including
Swingline Lender) and (c) Lenders having New Loan Exposure of each Series, and (ii) with respect to
Loans, each of the following classes of Loans: (a) Tranche B Term Loans, (b) Revolving Loans
(including Swingline Loans) and (c) each Series of New Loans.



     “Closing Date” means the date of this Agreement.



     “Closing Date Certificate” means a Closing Date Certificate substantially in the form
of Exhibit G-1.



12









 





     “Closing Date Mortgaged Property” as defined in Section 3.1(i).



     “Collateral” shall mean collectively, the U.S. Collateral and the Canadian Collateral.



     “Collateral Agent” as defined in the preamble hereto.



     “Collateral Documents” means the U.S. Collateral Documents and the Canadian Collateral
Documents.



     “Collateral Questionnaire” means a certificate in form satisfactory to Collateral
Agent that provides information with respect to the personal or mixed property of each Credit
Party.



     “Commitment” means any U.S. Revolving Commitment, Canadian Revolving Commitment, Term
Loan Commitment or New Loan Commitment.



     “Commitment Fee Percentage” means (a) with respect to the U.S. Revolving Commitment,
0.50% per annum; provided that so long as the Leverage Ratio is less than 4.50:1.00, 0.375%
per annum and (b) with respect to the Canadian Revolving Commitment, 0.50% per annum;
provided that so long as the Leverage Ratio is less than 4.50:1.00, 0.375% per annum. No
change in the Commitment Fee Percentage shall be effective until three Business Days after the date
on which Administrative Agent shall have received the applicable financial statements and a
Compliance Certificate pursuant to Section 5.1(d) calculating the Leverage Ratio. At any time and
so long as the Company has not submitted to Administrative Agent the applicable information as and
when required under Section 5.1(d), the Commitment Fee Percentage shall be determined as if the
Leverage Ratio were in excess of 4.50:1.00. Within one Business Day of receipt of the applicable
information under Section 5.1(d), Administrative Agent shall give each Lender facsimile or
telephonic notice (confirmed in writing) of the Commitment Fee Percentage in effect from such date.



     “Commodities Account” as defined in the UCC.



     “Company” as defined in the preamble hereto.



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



     “Consolidated Adjusted EBITDA” means, for any period, an amount determined for
Holdings and its Subsidiaries on a consolidated basis equal to (i) the sum, without duplication
and in respect of clauses (b) through (r) only to the extent reducing Consolidated Net Income, of
the amounts for such period of (a) Consolidated Net Income, (b) Consolidated Interest Expense, (c)
provisions for taxes based on income, (d) total depreciation expense, (e) total amortization
expense, (f) Transaction Costs incurred and paid in the period, (g) Sponsor Fees accrued or paid in
such period (excluding any Sponsor Fees paid in such period to the extent they represent an accrual
in a prior period), (h) restructuring charges (including for the avoidance of doubt costs relating
to severance, retention, relocations, integration, contract termination and consolidation of
facilities) in an amount not to exceed $15,000,000 in the aggregate since the Closing Date;



13









 




provided that such charges shall not exceed (i) $9,000,000 for the period commencing
on the Closing Date and ending on December 31, 2006, $9,000,000 for the period commencing on
January 1, 2007 and ending on December 31, 2007 and (iii) $5,000,0000 in any year thereafter, (i)
Cash expenses in an amount not to exceed $1,250,000 in the aggregate relating to compliance with
the Sarbanes-Oxley Act of 2002, (j) customary cash transaction fees and costs (including
post-closing integration costs in an amount not to exceed 15% of the pro forma EBITDA of an
acquired entity) approved by the Administrative Agent in its reasonable discretion relating to any
Permitted Acquisition and any portion of New Loans used to finance such Permitted Acquisition, (k)
any non-recurring fees, cash charges, and other cash expenses incurred in connection with the
issuance of Capital Stock or Indebtedness or the extinguishment of Indebtedness, (l) non-cash
compensation charges or other non-cash expenses or charges arising from the grant of or issuance or
repricing of stock, stock options or other equity-based awards to the directors, officers and
employees of Holdings and its Subsidiaries, (m) any impairment charge or asset write-off pursuant
to FAS 142 and FAS 144 and the amortization of intangibles arising pursuant to FAS 141, (n) any
monitoring, consulting, consent and other bank fees and expenses incurred at the direction of the
Agents or the Lenders during such period, (o) cash expenses or losses incurred by the Company and
its Subsidiaries to the extent insurance proceeds with respect to such expenses or losses have been
received by the Company or such Subsidiary, (p) cash expenses or losses incurred by the Company and
its Subsidiaries to the extent covered by indemnification provisions in any agreement in connection
with a Permitted Acquisition and such indemnification proceeds have been received by the Company or
such Subsidiary, (q) unrealized losses (or minus unrealized gains) relating to hedging transactions
and mark-to-market Indebtedness denominated in foreign currencies resulting from the application of
FAS 52, and (r) other non-Cash items (including non-Cash purchase accounting adjustments) reducing
Consolidated Net Income (excluding any such non-Cash item to the extent that it represents an
accrual or reserve for potential Cash items in any future period or amortization of a prepaid Cash
item that was paid in a prior period), minus (ii) other non-Cash items increasing
Consolidated Net Income for such period (excluding any such non-Cash item to the extent it
represents the reversal of an accrual or reserve for potential Cash item in any prior period);
provided that Consolidated Adjusted EBITDA for the Fiscal Quarters ended June 30,
2005, September 30, 2005, December 31, 2005 and March 31, 2006 shall be as set forth in Schedule
1.1(a).




     “Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures of Holdings and its Subsidiaries during such period determined on a consolidated basis
that, in accordance with GAAP, are or should be included in “purchase of property and equipment” or
similar items reflected in the consolidated statement of cash flows of Holdings and its
Subsidiaries, but excluding (i) the purchase price of any Permitted Acquisition and (ii) purchases
made with the proceeds of Asset Sales (without regard to the exceptions in clauses (i) through
(iii) of the definition thereof) or casualty insurance.



     “Consolidated Cash Interest Expense” means, for any period, Consolidated Interest
Expense for such period, excluding (i) any amount not payable in Cash and (ii) any consent fees
payable to banks or other lenders to the extent deducted from Consolidated Adjusted EBITDA;
provided that Consolidated Cash Interest Expense for the Fiscal Quarters ended June
30, 2005, September 30, 2005, December 31, 2005 and March 31, 2006 shall be as set forth in
Schedule 1.1(a).



14









 





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



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



     “Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal
to: (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Adjusted
EBITDA, plus (b) the Consolidated Working Capital Adjustment excluding non-cash adjustments,
minus (ii) the sum, without duplication, of the amounts for such period of (a) scheduled
repayments of Consolidated Total Debt, (b) Consolidated Capital Expenditures (net of any proceeds
of (y) any related financings with respect to such expenditures and (z) any sales of assets used to
finance such expenditures), (c) Consolidated Cash Interest Expense, (d) taxes based on income of
Holdings and its Subsidiaries payable in Cash with respect to such period and actually paid, (e)
Sponsor Fees paid in Cash, (f) distributions to Holdings made pursuant to Section 6.5(c), (g) any
monitoring, consulting, consent and other bank fees and expenses incurred at the direction of the
Agents or the Lenders during such period, (h) amounts paid in cash during such period in respect of
amounts that were added in computing Consolidated Adjusted EBITDA pursuant to clauses (h), (i),
(j), (k) and (n) thereof, (i) cash expenses incurred in connection with employee stock repurchases
permitted by Section 6.5 and (j) any other non-recurring cash expenses and charges added back to
Consolidated Net Income for purposes of determining Consolidated Adjusted EBITDA.



     “Consolidated Interest Expense” means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP and capitalized
interest) of Holdings and its Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Holdings and its Subsidiaries, including all commissions, discounts and other fees
and charges owed with respect to letters of credit and net costs under Interest Rate Agreements,
but excluding, however, any amounts referred to in Section 2.12(d) payable on or before the Closing
Date. For purposes of calculating the foregoing, Consolidated Interest Expense shall be determined
on the basis of net payments made or received or accruals in accordance with GAAP by Holdings and
its Subsidiaries in respect of Interest Rate Agreements.



     “Consolidated Net Income” means, for any period, (i) the net income (or loss) of
Holdings and its Subsidiaries on a consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP, minus (ii) (a) the income (or loss) of any
Person (other than a Subsidiary of Holdings) in which any other Person (other than Holdings or any
of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other
distributions actually paid to Holdings or any of its Subsidiaries by such Person during such
period, (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of
Holdings or is merged into or consolidated with Holdings or any of its Subsidiaries or that
Person’s assets are acquired by Holdings or any of its Subsidiaries, (c) the income of any



15









 




Subsidiary of Holdings to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (d) any after-tax gains or losses
attributable to Asset Sales or returned surplus assets of any Pension Plan, and (e) (to the extent
not included in clauses (a) through (d) above) any non-Cash net extraordinary and non-recurring
gains or net extraordinary and non-recurring losses.




     “Consolidated Total Debt” means, as at any date of determination, (i) the aggregate
stated balance sheet amount of all Indebtedness of Holdings and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, (excluding all standby Letters of Credit) minus
up to $15.0 million of Cash and Cash Equivalents on hand at any Credit Party.



     “Consolidated Working Capital Adjustment” means, for any period on a consolidated
basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the
beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of
such period.



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



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



     “Contributing Guarantors” as defined in Section 7.2.



     “Control” shall mean (i) in the case of each deposit account, “control”, as such term
is defined in Section 9-104 of the UCC, (ii) in the case of any securities account, “control”, as
such term is defined in Section 8-106 of the UCC, and (iii) in the case of any commodity account,
“control”, as such term is defined in section 9-106 of the UCC.



     “Control Agreements” means each control agreement executed and delivered by the
Collateral Agent for the benefit of the Secured Parties, a securities intermediary or depositary
bank and the applicable Credit Party on the Closing Date and each control agreement to be executed
and delivered by Collateral Agent, a securities intermediary or depositary bank and the applicable
Credit Party pursuant to the terms of the U.S. Pledge and Security Agreement with such
modifications as Collateral Agent may reasonably request or approve.



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



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



16









 





     “Counterpart Agreement” means a Counterpart Agreement substantially in the form of
Exhibit H delivered by a Credit Party pursuant to Section 5.9.



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



     “Credit Document” means any of this Agreement, the Notes, if any, the Collateral
Documents, any documents or certificates executed by the Company in favor of Issuing Bank relating
to Letters of Credit, and all other documents, instruments or agreements (other than any document,
instrument or agreement related to a Hedge Agreement) executed and delivered by a Credit Party for
the benefit of any Agent, Issuing Bank or any Lender in connection herewith (in each case as such
documents, instruments or agreements may be amended, restated, supplemented or otherwise modified
from time to time).



     “Credit Extension” means the making of a Loan or the issuing of a Letter of Credit.



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



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



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



     “Default Excess” means, with respect to any Defaulting Lender, the excess, if any, of
such Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Loans of
all Lenders (calculated as if all Defaulting Lenders (other than such Defaulting Lender) had funded
all of their respective Defaulted Loans) over the aggregate outstanding principal amount of all
Loans of such Defaulting Lender.



     “Default Period” means, with respect to any Defaulting Lender, the period commencing
on the date of the applicable Funding Default and ending on the earliest of the following dates:
(i) the date on which all Commitments are cancelled or terminated and/or the Obligations are
declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such
Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non-pro rata
application of any voluntary or mandatory prepayments of the Loans in accordance with the terms of
Section 2.14 or Section 2.15 or by a combination thereof) and (b) such Defaulting Lender shall have
delivered to the Company and Administrative Agent a written reaffirmation of its intention to honor
its obligations hereunder with respect to its Commitments, and (iii) the date on which the Company,
Administrative Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in
writing.



     “Defaulted Loan” as defined in Section 2.23.



17









 





     “Defaulting Lender” as defined in Section 2.23.



     “Deposit Account” as defined in the UCC.



     “Determination Date” means with respect to any Credit Extension:




     (a) in connection with the origination of any new Credit Extension, the Business Day
which is the earliest of the date such credit is extended, the date the rate is set or the
date the bid is accepted, as applicable;




     (b) in connection with any extension or conversion or continuation of an existing Loan,
the date such advance is extended, converted or continued, or the date the rate is set, as
applicable, in connection with any extension, conversion or continuation;




     (c) in connection with any extension of an existing Letter of Credit, the date such
Letter of Credit is extended; or




     (d) the date of any reduction of the Revolving Committed Amount pursuant to the terms
of Sections 2.13, 2.14 or 2.15;




     (e) the last Business Day of each month; and




     (f) such additional dates not more frequently than once a month as may be determined by
the Administrative Agent.




     For purposes of determining availability hereunder, the rate of exchange for Canadian
Dollars shall be the Spot Rate.



     “Dollar Amount” shall mean, at any time, (a) with respect to U.S. Dollars or an amount
denominated in U.S. Dollars, such amount and (b) with respect to Canadian Dollars or an amount
denominated in Canadian Dollars, the equivalent amount thereof in U.S. Dollars as determined by the
Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most
recent Revaluation Date) for the purchase of U.S. Dollars with Canadian Dollars.



     “Domestic Subsidiary” means any Subsidiary organized under the laws of the United
States of America, any State thereof or the District of Columbia.



     “Easton Acquisition” shall have the meaning set forth in the recitals.



     “Easton Acquisition Agreement” means the Stock Purchase Agreement dated as of February
1, 2006 between the Company and the Acquired Company, as the same may be amended, modified or
supplemented from time to time.



     “Easton Acquisition Documents” means the Easton Acquisition Agreement and all other
material documents executed and delivered in accordance with the terms thereof and in



18









 




connection therewith, as the same may be amended, modified or supplemented from time to time.




     “Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any Related
Fund with respect to a Lender (any two or more Related Funds being treated as a single Eligible
Assignee for all purposes hereof), (ii) any commercial bank, insurance company, investment or
mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the
Securities Act) and which extends credit or buys loans as one of its businesses and (iii) any other
entity approved by Administrative Agent and the Company; provided, none of Holdings, any
Affiliate of Holdings or any Equity Investor shall be an Eligible Assignee.



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



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



     “Environmental Laws” means any and all current or future foreign or domestic, federal,
provincial, territorial or state (or any subdivision of either of them) or local, statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other
requirements of Governmental Authorities relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or
disposal of, or exposure to, Hazardous Materials; or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any
manner applicable to Holdings or any of its Subsidiaries or any Facility.



     “Equity Cure Period” shall have the meaning set forth in Section 6.8(e).



     “Equity Investors” means the Sponsors, the Management Investors and other investors
not affiliated with Wachovia, in each case reasonably acceptable to the Administrative Agent.



     “Equityholders Agreement” means the Second Amended and Restated Limited Liability
Company Agreement of Easton Bell Holdings, LLC dated as of March 16, 2006 by and among Fenway
Partners Capital Fund II, FPIP Trust, LLC, FPIP LLC, Fenway Partners, Inc., the Ontario Teachers’
Pension Plan Board, York Street Mezzanine Partners, L.P., Jas. D. Easton, Inc. and the other
parties thereto, as amended, waived and modified from time to time in accordance with Section 6.15.



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



19









 





     “ERISA Affiliate” means, as applied to any Person, (i) any corporation which is a
member of a controlled group of corporations within the meaning of Section 414(b) of the Internal
Revenue Code of which that Person is a member; and (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member. Any
former ERISA Affiliate of Holdings or any of its Subsidiaries shall continue to be considered an
ERISA Affiliate of Holdings or any such Subsidiary within the meaning of this definition to the
extent that Holdings or such Subsidiary could reasonably be expected to have any liability with
respect thereto under the Internal Revenue Code or ERISA.



     “ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of
ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for
which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure
to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to
any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision
by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors not under common control, or the
termination of any such Pension Plan resulting in liability to Holdings, any of its Subsidiaries or
any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution
by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which is reasonably likely to constitute grounds under ERISA for the termination by the
PBGC of, or the appointment by the PBGC of a trustee to administer, any Pension Plan; (vi) the
imposition of liability on Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor,
or the receipt by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or
4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition
on Holdings or any of its Subsidiaries of fines, penalties, taxes or related charges under Section
4975 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) receipt from the Internal Revenue Service of
notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or (x) the imposition of
a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA
with respect to any Pension Plan.



20









 





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



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



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



     “Exchange Percentage” shall mean, as to each Lender, a fraction, expressed as a
decimal, in each case determined on the date of occurrence of a Sharing Event (but before giving
effect to any actions to occur on such date pursuant to Section 11) of which (a) the numerator
shall be the sum of (i) the respective Revolving Commitment Percentage of such Lender of (x) the
aggregate outstanding principal of all Revolving Loans and Swingline Loans (taking the Dollar
Amount of any amounts expressed in Canadian Dollars on the date of the occurrence of the Sharing
Event) and (y) the aggregate unreimbursed amount of outstanding Letters of Credit, and (ii) the
aggregate principal amount of the outstanding Term Loan of all Lenders, and (b) the denominator of
which shall be the sum of (x) the aggregate outstanding principal of all Revolving Loans and
Swingline Loans (taking the Dollar Amounts of any amounts expressed in Canadian Dollars on the date
of the occurrence of the Sharing Event) and (y) the aggregate unreimbursed amount of outstanding
Letters of Credit, and (z) the aggregate principal amount of the outstanding Term Loan of all
Lenders.



     “Existing Letters of Credit” means those letters of credit, listed on Schedule 1.1(b)
outstanding on the Closing Date.



     “Existing Capital Leases” means the Capital Leases listed on Schedule 1.1(c) entered
into by the Company or its Subsidiaries as indicated thereon prior to the date hereof.



     “Existing Credit Agreement” shall mean that certain Credit and Guaranty Agreement
dated as of, September 30, 2004 (as the same has been amended, modified or supplemented prior to
the date hereof) by and among the Company, Holdings, certain Subsidiaries of the Company and GSCP
as administrative agent and collateral agent.



     “Existing Indebtedness” means all pre-existing Indebtedness of the Company and its
Subsidiaries (including the Acquired Company and its Subsidiaries) on the Closing Date other than
Indebtedness permitted under the Agreement.



     “Face Amount” means the amount payable to the holder of a Bankers’ Acceptance on the
maturity thereof.



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



     “Fair Share Contribution Amount” as defined in Section 7.2.



21









 





     “Fair Share” as defined in Section 7.2.



     “Federal Funds Effective Rate” means for any day, the rate per annum (expressed, as a
decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no
such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to Administrative Agent, in its capacity as a Lender, on such
day on such transactions as determined by Administrative Agent.



     “Fenway” means Fenway Partners, Inc. and its Affiliates.



     “Financial Officer Certification” means, with respect to the financial statements for
which such certification is required, the certification of the chief financial officer of the
Company that such financial statements fairly present, in all material respects, the financial
condition of the Company and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes resulting from audit
and normal year-end adjustments and in the case of interim financial statements, the absence of
footnotes.



     “Financial Plan” as defined in Section 5.1(i).



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



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



     “Fiscal Year” means the fiscal year of Holdings and its Subsidiaries ending on (i)
December 31 (or the Saturday closest thereto) of each calendar year, (ii) a 52-53 week Fiscal
Year-ending on or about December 31 of each calendar year, or (iii) in the case of Bell Sports Asia
Limited, March 31 of each calendar year.



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



     “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.



     “Funding Default” as defined in Section 2.23.



     “Funding Guarantors” as defined in Section 7.2.



22









 





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



     “GAAP” means, subject to the limitations on the application thereof set forth in
Section 1.2, generally accepted accounting principles in effect in the United States of America
applied on a consistent basis, or to the extent relating to the financial statements of Canadian
entities only, generally accepted accounting principles in effect in Canada applied on a consistent
basis, in each case, as in effect from time to time.



     “Governmental Acts” means any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority.



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



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



     “Grantor” as defined in the U.S. Pledge and Security Agreement and/or the Canadian
Security Agreement, as applicable.



     “GSCP” as defined in the preamble hereto.



     “Guaranteed Obligations” as defined in Section 7.1.



     “Guarantor” means each U.S. Guarantor and each Canadian Guarantor.



     “Guarantor Subsidiary” means each U.S. Guarantor other than the Company and Holdings.



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



     “Hazardous Materials” means any chemical, material, waste or substance, which is
prohibited, limited or regulated by any Governmental Authority or pursuant to any Environmental Law
or which may or could pose a hazard to the health and safety of any Persons or to the indoor or
outdoor environment.



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



23









 





     “Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement entered
into with a Lender Counterparty in order to satisfy the requirements of this Agreement or otherwise
in the ordinary course of Holdings’ or any of its Subsidiaries’ businesses.



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



     “Historical Financial Statements” means, as of the Closing Date, (i) the audited
financial statements of the Company and its Subsidiaries, for each of its 2002, 2003 and 2004
Fiscal Years, consisting of balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows for such Fiscal Years, (ii) the audited financial statements of
the Acquired Company and its Subsidiaries, for each of its 2003, 2004 and 2005 Fiscal Years,
consisting of balance sheets and the related consolidated statements of income, stockholders’
equity and cash flows for such Fiscal Years and (iii) the unaudited financial statements of the
Company and its Subsidiaries (other than for the quarter ended December 31, 2005) and the Acquired
Company for each fiscal quarter ended since the latest audited financials of the Company or the
Acquired Company, respectively, ended not less than 45 days prior to the Closing Date, consisting
of a balance sheet and the related consolidated statements of income, stockholders’ equity and cash
flows for the three-, six- or nine-month period, as applicable, ending on such date, and, in the
case of clauses (i) and (ii), certified by the chief financial officer of the Company that they
fairly present, in all material respects, the financial condition of the Company and its
Subsidiaries or the Acquired Company and its Subsidiaries, as applicable, as at the dates indicated
and the results of their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments.



     “Holdings” as defined in the preamble hereto.



     “Immaterial Subsidiary” means, as of any date, any Subsidiary whose total assets, as
of that date, are less than $100,000 and whose total revenues for the most recent twelve-month
period do not exceed $100,000.



     “Increased Amount Date” as defined in Section 2.25.



     “Increased-Cost Lenders” as defined in Section 2.24.



     “Indebtedness”, as applied to any Person, means, without duplication, (i) all
indebtedness for borrowed money; (ii) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet in conformity with GAAP; (iii) notes
payable and drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred under ERISA), which
purchase price is (a) due more than six months from the date of incurrence of the obligation in
respect



24









 




thereof (other than trade payables which are due more than six months from the date of
incurrence in the ordinary course of business) or (b) evidenced by a note or similar written
instrument; (v) all indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been assumed by that
Person or is nonrecourse to the credit of that Person; (vi) the face amount of any letter of credit
issued for the account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the indebtedness (as set forth in this definition) of another;
(viii) any obligation of such Person the primary purpose or intent of which is to provide assurance
to an obligee that the indebtedness (as set forth in this definition) of the obligor thereof will
be paid or discharged, or any agreement relating thereto will be complied with, or the holders
thereof will be protected (in whole or in part) against loss in respect thereof; (ix) any liability
of such Person for any indebtedness (as set forth in this definition) of another through any
agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, equity purchases, capital contributions or
otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under subclauses (a) or (b) of this
clause (ix), the primary purpose or intent thereof is as described in clause (viii) above; and (x)
all obligations of such Person in respect of any exchange traded or over the counter derivative
transaction, including, without limitation, any Interest Rate Agreement, Currency Agreement and any
commodities hedging agreement, whether entered into for hedging or speculative purposes;
provided, in no event shall obligations under any Interest Rate Agreement, any Currency
Agreement or any commodities hedging agreement be deemed “Indebtedness” for any purpose under
Section 6.8.




     “Indemnified Liabilities” means, collectively, any and all liabilities, obligations,
losses, damages (including natural resource damages), penalties, claims (including Environmental
Claims), awards, costs (including the reasonable costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or abate any past, present or future Hazardous Materials Activity), reasonable
expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any reasonable fees or expenses incurred
by Indemnitees in enforcing the indemnity contained in Section 10.3), whether direct, indirect or
consequential and whether based on any federal, state, provincial, territorial or foreign laws,
statutes, rules or regulations (including securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise,
that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of (i) this Agreement or the other Credit Documents or the transactions
contemplated hereby or thereby (including the Lenders’ agreement to make Credit Extensions or the
use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents
(including any sale of, collection from, or other realization upon any of the Collateral or the
enforcement of the



25









 




Guaranty)); (ii) the statements contained in the commitment letter delivered by any Lender to
the Company with respect to the transactions contemplated by this Agreement; or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past, present or future activity, operation, land ownership, or practice of
Holdings or any of its Subsidiaries.




     “Indemnitee” as defined in Section 10.3.



     “Installment” as defined in Section 2.13(a).



     “Installment Date” as defined in Section 2.13(a).



     “Interest Coverage Ratio” means the ratio as of the last day of any Fiscal Quarter of
(i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then ended, to (ii)
Consolidated Cash Interest Expense for such four-Fiscal Quarter period.



     “Interest Payment Date” means with respect to (i) any Base Rate Loan, each of the
dates specified in Section 2.13(a) for payment of principal, commencing on the first such date to
occur after the Closing Date and the final maturity date of such Loan; and (ii) any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such Loan; provided, in the case
of each Interest Period of longer than three months “Interest Payment Date” shall also include each
date that is three months, or an integral multiple thereof, after the commencement of such Interest
Period.



     “Interest Period” means, in connection with a Eurodollar Rate Loan, an interest period
of one-, two-, three- or six-months (or nine- or twelve-months if available to all applicable
Lenders), as selected by the Company in the applicable Funding Notice or Conversion/Continuation
Notice, (i) initially, commencing on the Credit Date or Conversion/Continuation Date thereof, as
the case may be; and (ii) thereafter, commencing on the day on which the immediately preceding
Interest Period expires; provided, (a) if an Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire on the next succeeding Business
Day unless no further Business Day occurs in such month, in which case such Interest Period shall
expire on the immediately preceding Business Day; (b) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall, subject to clauses (c) and (d), of
this definition, end on the last Business Day of a calendar month; (c) no Interest Period with
respect to any portion of any Class of Term Loans shall extend beyond such Class’s Term Loan
Maturity Date; and (d) no Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Commitment Termination Date.



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



26









 





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



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



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



     “IP Security Agreement” means the U.S. Intellectual Property Security Agreement, dated
as of the Closing Date, by and among the Company, each U.S. Guarantor and Collateral Agent.



     “Issuance Notice” means an Issuance Notice in the form of Exhibit A-3.



     “Issuing Bank” means (i) Wachovia or any of its Affiliates as Issuing Bank hereunder,
together with its permitted successors and assigns in such capacity and (ii) with respect to any
Existing Letter of Credit, such other Lender acceptable to Administrative Agent.



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



     “Landlord Waiver and Consent Agreement” means a Landlord Waiver and Consent Agreement
substantially in the form of Exhibit J with such amendments or modifications as may be approved by
Collateral Agent.



     “Leasehold Property” means any leasehold interest of any Credit Party as lessee under
any lease of real property.




27










 







     “Lender” means each financial institution listed on the signature pages hereto
as a Lender, and any other lender that becomes a party hereto after the Closing Date (excluding the
Credit Parties and their Affiliates and the Sponsors).



     “Lender Commitment Letter” shall mean, with respect to any Lender, the letter (or
other correspondence) to such Lender from the Administrative Agent notifying such Lender of its
Loan commitment percentage.



     “Lender Counterparty” means Administrative Agent, GSCP, each Lender or any Affiliate
of a Lender or GSCP counterparty to a Secured Hedge Agreement (including any Person who is a Lender
(and any Affiliate thereof) at the time such Person enters into a Hedge Agreement but subsequently,
after entering into a Hedge Agreement, ceases to be a Lender) including, without limitation, each
such Affiliate that enters into a joinder agreement with Collateral Agent.



     “Letter of Credit” means a commercial or standby letter of credit issued or to be
issued by Issuing Bank pursuant to this Agreement.



     “Letter of Credit Sublimit” means the lesser of (i) $25,000,000 and (ii) the aggregate
unused amount of the Revolving Commitments then in effect.



     “Letter of Credit Usage” means, as at any date of determination, the sum of (i) the
maximum aggregate amount which is, or at any time thereafter may become, available for drawing
under all Letters of Credit then outstanding, and (ii) the aggregate amount of all drawings under
Letters of Credit honored by Issuing Bank and not theretofore reimbursed by or on behalf of the
Company.



     “Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter or other
date of determination of (i) Consolidated Total Debt as of such day to (ii) Consolidated Adjusted
EBITDA for the four-Fiscal Quarter period ending on such date (or if such date of determination is
not the last day of a Fiscal Quarter, for the four-Fiscal Quarter period ending as of the most
recently concluded Fiscal Quarter); provided, however, for purposes of determining
Consolidated Total Debt for use in computing the Leverage Ratio at the end of any Fiscal Quarter or
other date of determination, the average daily balance of any revolving credit facility during the
four-Fiscal Quarter period referred to in clause (ii) above shall be substituted for the balance of
such facility outstanding on the last day of such Fiscal Quarter or other date of determination;
provided that with respect to any calculation period ending prior to the first anniversary
of the Closing Date, the foregoing shall be subject to adjustment as set forth in Schedule 1.1(a).



     “Lien” means (i) any lien, hypothec, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, and any lease in the nature thereof) and any
option, trust or other preferential arrangement having the practical effect of any of the foregoing
and (ii) in the case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.



28









 





     “Loan” means a Tranche B Term Loan, a U.S. Revolving Loan, a Canadian Revolving Loan,
a U.S. Swingline Loan, a Canadian Swingline Loan and/or a New Loan.



     “Management Investors” means the natural persons being the members of management,
officers and employees of Parent and/or its Subsidiaries who are or become investors in Parent.



     “Margin Stock” as defined in Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.



     “Material Adverse Effect” means a material adverse effect on and/or material adverse
developments with respect to (i) the business, results of operations, properties, assets, financial
condition or prospects of Holdings and its Subsidiaries taken as a whole; (ii) the impairment
(other than as a result of circumstances covered by clause (i) above) of the ability of any Credit
Party to fully and timely perform its Obligations; (iii) the legality, validity, binding effect or
enforceability against a Credit Party of a Credit Document to which it is a party; or (iv) the
rights and remedies conferred upon any Agent and any Lender or any Secured Party under any Credit
Document.



     “Material Asset Sale” means an Asset Sale generating Net Asset Sale Proceeds of at
least $10,000,000.



     “Material Contract” means any contract or other arrangement to which Holdings or any
of its Subsidiaries is a party (other than the Credit Documents and the Related Agreements, but
including the Easton Acquisition Agreement) for which breach, nonperformance, cancellation or
failure to renew could reasonably be expected to have a Material Adverse Effect.



     “Material Real Estate Asset” means any fee-owned Real Estate Asset having a fair
market value in excess of $1,000,000 as of the date of the acquisition thereof.



     “Minimum Liquidity Exclusion” as defined in Section 2.15(e).



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



     “Mortgage” means a Mortgage or Deed of Trust substantially in the form of Exhibit I
and with such changes as agreed to by the Administrative Agent, in its reasonable discretion, as it
may be amended, supplemented or otherwise modified from time to time.



     “Multiemployer Plan” means any “multiemployer plan” as defined in Section 3(37) of
ERISA with respect to which Holdings, any Subsidiary or any ERISA Affiliate has, or would
reasonably be expected to have, any liability (whether absolute or contingent).



     “NAIC” means The National Association of Insurance Commissioners, and any successor
thereto.



     “Narrative Report” means, with respect to the financial statements for which such
narrative report is required, a narrative report describing the operations of the Company and its



29









 




Subsidiaries in the form prepared for presentation to senior management thereof for the
applicable Fiscal Quarter or Fiscal Year and for the period from the beginning of the then current
Fiscal Year to the end of such period to which such financial statements relate.




     “Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal to:
(i) Cash payments (including any Cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so received) received by
Holdings or any of its Subsidiaries from such Asset Sale, minus (ii) any bona fide direct
costs or expenses incurred in connection with such Asset Sale and payable to a Person that is not
Holdings or its Subsidiaries, including without limitation, (a) income or gains taxes payable by
the seller as a result of any gain recognized in connection with such Asset Sale, (b) payment of
the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness
permitted to be incurred under Section 6.1 (other than the Loans) that is secured by a Lien on the
stock or assets in question and that is required to be repaid under the terms thereof as a result
of such Asset Sale and (c) a reasonable reserve for any indemnification payments (fixed or
contingent) attributable to seller’s indemnities and representations and warranties to purchaser in
respect of such Asset Sale undertaken by Holdings or any of its Subsidiaries in connection with
such Asset Sale.



     “Net Insurance/Condemnation Proceeds” means an amount equal to: (i) any Cash payments
or proceeds received by Holdings or any of its Subsidiaries (a) under any casualty insurance policy
in respect of a covered loss thereunder or (b) as a result of the taking of any assets of Holdings
or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or
otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of
such a taking, minus (ii) (a) any actual and reasonable costs incurred by Holdings or any
of its Subsidiaries in connection with the adjustment or settlement of any claims of Holdings or
such Subsidiary in respect thereof and payable to a Person that is not Holdings or its
Subsidiaries, (b) payment of the outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness permitted to be incurred under Section 6.1 (other than the Loans) that
is secured by a Lien on the stock or assets in question and that is required to be repaid as a
result of such casualty or condemnation, and (c) any bona fide direct costs incurred in connection
with any sale of such assets as referred to in clause (i)(b) of this definition, including income
taxes payable as a result of any gain recognized in connection therewith.



     “New Loan Commitments” as defined in Section 2.25.



     “New Loan Exposure” means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the New Loans of such Lender.



     “New Loan Lender” as defined in Section 2.25.



     “New Loan Maturity Date” means the date that New Loans of a Series shall become due
and payable in full hereunder, including by acceleration or otherwise.



     “New Loans” as defined in Section 2.25.



30









 





     “Non-US Lender” as defined in Section 2.21(c).



     “Note” means a Tranche B Term Note, a U.S. Revolving Loan Note, a Canadian Revolving
Note or a Swingline Note.



     “Notice” means a Funding Notice, an Issuance Notice, or a Conversion/Continuation
Notice.



     “Notional BA Proceeds” means, with respect to a Bankers’ Acceptance Advance, the
aggregate Face Amount of the Bankers’ Acceptance or face amount of an Acceptance Note comprising
such Bankers’ Acceptance Advance, if applicable, less the aggregate of:



     (i) a discount from the aggregate Face Amount of such Bankers’ Acceptance or face amount of
such Acceptance Note, as applicable, calculated in accordance with normal market practices based on
the BA Rate for the term of such Bankers’ Acceptance or Acceptance Note; and



     (ii) the amount of the acceptance fees determined in accordance with Section 2.3(c) in respect
of such Bankers’ Acceptance Advance.



     “Obligations” means all debts, liabilities and obligations of every nature of each
Credit Party from time to time owed to the Agents (including former Agents), the Lenders or any of
them and Lender Counterparties, under any Credit Document or Secured Hedge Agreement (including,
without limitation, with respect to a Hedge Agreement, obligations owed thereunder to any person
who was a Lender or an Affiliate of a Lender at the time such Hedge Agreement was entered into),
whether for principal, interest (including interest which, but for the filing of a petition in
bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not
a claim is allowed against such Credit Party for such interest in the related bankruptcy or
restructuring proceeding), reimbursement of amounts drawn under Letters of Credit, payments for
early termination of Hedge Agreements, fees, expenses, indemnification (including, without
limitation, pursuant to Section 10.3 hereof) or otherwise.



     “Obligee Guarantor” as defined in Section 7.7.



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



31









 





     “Parent” means Easton Bell Sports, LLC or any other direct or indirect parent of which
Holdings is a wholly owned subsidiary (but excluding for the avoidance of doubt, any Sponsor).



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



     “Pension Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA, other than a Multiemployer Plan, which is subject to Title IV of ERISA, and with respect to
which Holdings, any Subsidiary or any ERISA Affiliate has, or would reasonably be expected to have,
any liability (whether absolute or contingent).



     “Permitted Acquisition” means any acquisition by the Company or any of its
wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of
the assets of, all of the Capital Stock of, or a business line or unit or a division of, any
Person; provided,



     (i) immediately prior to, and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing or would result therefrom;




     (ii) immediately prior and after giving pro forma effect to such Permitted Acquisition,
the Leverage Ratio is less than or equal to the ratio that is 25 basis points lower than the
then applicable covenant level;




     (iii) all transactions in connection therewith shall be consummated, in all material
respects, in accordance with all applicable laws and in conformity with all applicable
Governmental Authorizations;




     (iv) in the case of the acquisition of Capital Stock, all of the Capital Stock (except
for any such Securities in the nature of directors’ qualifying shares required pursuant to
applicable law) acquired or otherwise issued by such Person or any newly formed Subsidiary
of the Company in connection with such acquisition shall be owned 100% by the Company or a
Guarantor Subsidiary thereof, and the Company shall have taken, or caused to be taken, as of
the date such Person becomes a Subsidiary of the Company, each of the actions set forth in
Sections 5.9 and/or 5.10, as applicable, to the extent such Person becomes a Domestic
Subsidiary, Canadian Subsidiary or a first tier Foreign Subsidiary;




     (v) the Company and its Subsidiaries shall be in compliance with the financial
covenants set forth in Section 6.8 on a pro forma basis after giving effect to such
acquisition as of the last day of the Fiscal Quarter most recently ended, (as determined in
accordance with Section 6.8(d));




     (vi) the Company shall have delivered to Administrative Agent (A) at least ten (10)
Business Days prior to such proposed acquisition (or such later date as may be approved by
Administrative Agent), a Compliance Certificate evidencing compliance with Section 6.8 as
required under clause (v) above, together with all relevant financial information with
respect to such acquired assets, including, without limitation, the



32









 




aggregate consideration for such acquisition and any other information required to
demonstrate compliance with Section 6.8;





     (vii) any Person or assets or division as acquired in accordance herewith shall be in
the same business or lines of business in which the Company and/or its Subsidiaries are
permitted to engage in under Section 6.13;




     (viii) in the case of any acquisition funded by a Revolving Loan, the Company shall
have delivered to Administrative Agent a certificate evidencing that the borrowing
availability under the Revolving Commitments, after giving effect to such acquisition, plus
any Cash and Cash Equivalents, will be sufficient to fund the working capital needs of the
Company for the twelve months following such acquisition;




     (ix) the Company, after giving effect to any such acquisition, shall have Cash and Cash
Equivalents or availability under this Agreement of not less than $10,000,000;




     (x) in the case of any acquisition of a Person incorporated, formed or organized under
the laws of Canada, all such acquisitions, together with all Investments in a Canadian
Credit Party pursuant to Section 6.7(m), shall not exceed $10,000,000 in the aggregate;




     (xi) in the case of any acquisition of a Person not incorporated, formed or organized
under the laws of the United States of America or Canada, all such acquisitions, together
with all other Investments permitted pursuant to Section 6.7(h), shall not exceed
$21,000,000 in the aggregate; and




     (xii) the board of directors and (if required by applicable law) the shareholders, or
the equivalent thereof, of the business to be acquired has approved such acquisition.



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



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



     “Phase I Report” means, with respect to any Facility, a report that is either (A) set
forth on Schedule 3.1(k), or (B) is in form and substance reasonably satisfactory to the
Administrative Agent (i) conforms to the ASTM Standard Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process, E 1527-00, (ii) was conducted no more than six
months prior to the date such report is required to be delivered hereunder, by one or more
environmental consulting firms reasonably satisfactory to Administrative Agent, (iii) at the
request of the Administrative Agent includes an assessment of asbestos-containing materials at such
Facility, (iv) at the request of the Administrative Agent is accompanied by (a) an estimate of the
reasonable worst-case cost of investigating and remediating any Hazardous Materials Activity
identified in the



33









 




Phase I Report as giving rise to an actual or potential material violation of any
Environmental Law or as presenting a material risk of giving rise to a material Environmental
Claim, and (b) a current compliance audit setting forth an assessment of Holdings’, its
Subsidiaries’ and such Facility’s current and past compliance with Environmental Laws and an
estimate of the cost of rectifying any non-compliance with current Environmental Laws identified
therein and the cost of compliance with reasonably anticipated pending or future Environmental Laws
identified therein. All Phase I Reports shall expressly specify that the report may be relied on
by Administrative Agent or the Administrative Agent shall have received a reliance letter so
stating.




     “PPSA” means the Personal Property Security Act (Ontario) (or such other analogous
statute in effect from time to time in any other province or territory of Canada, as applicable).



     “Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money Rates
Section as the Prime Rate (currently defined as the base rate on corporate loans posted by at least
75% of the nation’s thirty (30) largest banks), as in effect from time to time. The Prime Rate is
a reference rate and does not necessarily represent the lowest or best rate actually charged to any
customer. Administrative Agent or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.



     “Principal Office” means, for each of Administrative Agent, Swingline Lender and
Issuing Bank, such Person’s “Principal Office” as set forth on Appendix A, or such other office as
such Person may from time to time designate in writing to the Company, Administrative Agent and
each Lender.



     “Projections” as defined in Section 4.8.



     “Pro Rata Share” means (i) with respect to all payments, computations and other
matters relating to the Tranche B Term Loan of any Lender, the percentage obtained by dividing (a)
the Tranche B Term Loan Exposure of that Lender by (b) the aggregate Tranche B Term Loan Exposure
of all Lenders; (ii) with respect to all payments, computations and other matters relating to the
U.S. Revolving Commitment or U.S. Revolving Loans of any U.S. Lender or any Letters of Credit
issued or participations purchased therein by any U.S. Lender or any participations in any U.S.
Swingline Loans purchased by any U.S. Lender, the percentage obtained by dividing (a) the Revolving
Exposure of that U.S. Lender by (b) the aggregate Revolving Exposure of all U.S. Lenders; (iii)
with respect to all payments, computations and other matters relating to the Canadian Revolving
Commitment or Canadian Revolving Loans of any Canadian Lender or any participations in any Canadian
Swingline Loans purchased by any Canadian Lender, the percentage obtained by dividing (a) the
Revolving Exposure of that Canadian Lender by (b) the aggregate Revolving Exposure of all Canadian
Lenders; and (iv) with respect to all payments, computations, and other matters relating to New
Loan Commitments or New Loans of a particular Series, the percentage obtained by dividing (a) the
New Loan Exposure of that Lender with respect to that Series by (b) the aggregate New Loan Exposure
of all Lenders with respect to that Series. For all other purposes with respect to each Lender,
“Pro Rata Share” means the percentage obtained by dividing (A) an amount equal to the sum of the
Tranche B Term Loan Exposure, the Revolving Exposure and the New Loan Exposure of that Lender, by
(B) an amount equal to the sum of the aggregate Tranche B Term



34









 




Loan Exposure, the aggregate Revolving Exposure and the aggregate New Loan Exposure of all
Lenders.




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



     “Refinancing Note Indenture” means the trust indenture in form and substance
reasonably satisfactory to the Administrative Agent pursuant to which any Refinancing Notes may be
issued in accordance with the terms of this Agreement, as such indenture may be further amended,
restated, supplemented, modified, extended, renewed or replaced from time to time in accordance
with Section 6.16 of this Agreement.



     “Refinancing Notes” as defined in Section 6.1(k).



     “Refunded Canadian Swingline Loans” as defined in Section 2.4(b)(ii)(D).



     “Refunded U.S. Swingline Loans” as defined in Section 2.4(a)(ii)(D).



     “Register” as defined in Section 2.8(b).



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



     “Reimbursement Date” as defined in Section 2.5(d).



     “Related Agreements” means, collectively, the Easton Acquisition Agreement, the
Sponsor Agreements, the Equityholders Agreement and the documents governing the Senior Subordinated
Notes, the Refinancing Notes, Additional Senior Subordinated Notes and the Existing Capital Leases.



     “Related Fund” means any investment fund that is (i) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of credit and (ii) is
administered, advised and managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or
an Affiliate of an entity that administers, advises or manages a Lender.



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



     “Replacement Lender” as defined in Section 2.24.



     “Requisite Lenders” means one or more Lenders having or holding Tranche B Term Loan
Exposure, New Loan Exposure and/or Revolving Exposure and representing more than



35









 




50% of the sum of (i) the aggregate Tranche B Term Loan Exposure of all Lenders, (ii) the
aggregate Revolving Exposure of all Lenders, and (iii) the aggregate New Loan Exposure of all
Lenders.




     “Restricted Junior Payment” means (i) any dividend or other distribution, direct or
indirect, on account of any shares of any class of stock of Holdings or the Company now or
hereafter outstanding, except a dividend payable solely in shares of that class of stock to the
holders of that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase
or other acquisition for value, direct or indirect, of any shares of any class of stock of Holdings
or the Company now or hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire shares of any class of
stock of Holdings or the Company now or hereafter outstanding; (iv) management or similar fees
payable to Fenway or any of its Affiliates and (v) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, repurchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment (or any offer to do
any of the foregoing) with respect to the Senior Subordinated Notes, the Refinancing Notes or the
Additional Senior Subordinated Notes.



     “Revaluation Date” shall mean each of the following: (a) each date a Eurodollar Rate
Loan or Bankers’ Acceptance Advance is made pursuant to Sections 2.2 or Section 2.3; (b) each date
a Eurodollar Rate Loan in Canadian Dollars is continued pursuant to Section 2.10; (c) the last
Business Day of each calendar month; and (d) such additional dates as the Administrative Agent,
Canadian Agent or the Requisite Lenders shall specify.



     “Revolving Commitment” means the commitment of a Lender to make or otherwise fund any
Revolving Loan and to acquire participations in Letters of Credit and Swingline Loans hereunder and
“Revolving Commitments” means such commitments of all Lenders in the aggregate. The amount of
each Lender’s Revolving Commitment, if any, is set forth on such Lender’s Lender Commitment Letter
or in the Register, subject to any adjustment or reduction pursuant to the terms and conditions
hereof. The aggregate amount of the Revolving Commitments as of the Closing Date is equal to the
sum of the U.S. Revolving Committed Amount and the Canadian Revolving Committed Amount.



     “Revolving Commitment Percentage” means the U.S. Revolving Commitment Percentage and
the Canadian Revolving Commitment Percentage.



     “Revolving Commitment Period” means the period from the Closing Date to but excluding
the Revolving Commitment Termination Date.



     “Revolving Commitment Termination Date” means the earliest to occur of (i) the sixth
(6) anniversary of the Closing Date, (ii) the date the Revolving Commitments are permanently
reduced to zero pursuant to Section 2.14(b) or 2.15, and (iii) the date of the termination of the
Revolving Commitments pursuant to Section 8.2.



     “Revolving Exposure” means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Revolving Commitments, that Lender’s Revolving



36









 




Commitment; and (ii) after the termination of the Revolving Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender, (b) in the case of
Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by
that Lender (net of any participations by Lenders in such Letters of Credit), (c) the aggregate
amount of all participations by that Lender in any outstanding Letters of Credit or any
unreimbursed drawing under any Letter of Credit, (d) in the case of Swingline Lender, the aggregate
outstanding principal amount of all Swingline Loans (net of any participations therein by other
Lenders), and (e) the aggregate amount of all participations therein by that Lender in any
outstanding Swingline Loans.




     “Revolving Loan” means a Loan made by a Lender to the Company pursuant to Section
2.2(a), 2.3(a) and/or 2.25.



     “Riddell” means Riddell Sports Group Inc.



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



     “Secured Hedge Agreement” shall mean any Hedge Agreement between a Credit Party and a
Lender Counterparty relating to obligations, Indebtedness and liabilities of such Credit Party
arising under this Agreement, the Notes or any of the other Credit Documents, as such Hedge
Agreement may be amended, restated, amended and restated, modified, supplemented or extended from
time to time.



     “Secured Parties” means the U.S. Secured Parties and the Canadian Secured Parties.



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



     “Securities Account” as defined in the UCC.



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



     “Senior Subordinated Note Indenture” means the Indenture dated as of September 30,
2004, as amended by that Supplemental Indenture dated as of April 11, 2005, pursuant to which the
Company has issued its Senior Subordinated Notes due 2012, as such indenture may be further
amended, restated, supplemented, modified, extended, renewed or replaced from time to time in
accordance with Section 6.16 of this Agreement.



37









 





     “Senior Subordinated Notes” means Company’s unsecured Senior Subordinated Notes due
October 1, 2012, dated as of September 30, 2004, and any registered senior subordinated notes
having substantially identical terms and issued pursuant to the Senior Subordinated Indenture in
exchange for the initial, unregistered Senior Subordinated Notes, together with any additional
senior subordinated notes issued under the Senior Subordinated Note Indenture after the Closing
Date and expressly permitted hereunder.



     “Series” as defined in Section 2.25.



     “Sharing Event” shall mean (a) the occurrence of any Event of Default under Section
8.1(f) or Section 8.1(g), (b) the declaration of the termination of any Commitment, or the
acceleration of the maturity of any Loans, in each case in accordance with Section 8.2 or (iii) the
failure of any Borrower to pay any principal of, or interest on, any Loans or any letter of credit
obligations on the Revolving Commitment Termination Date.



     “Solvency Certificate” means a Solvency Certificate of the chief financial officer of
Holdings substantially in the form of Exhibit G-2.



     “Solvent” means, with respect to any Credit Party, that as of the date of
determination, both (i) (a) the sum of such Credit Party’s debt (including contingent liabilities)
does not exceed the present fair saleable value of such Credit Party’s present assets; (b) such
Credit Party’s capital is not unreasonably small in relation to its business as contemplated on the
Closing Date and reflected in the Projections or with respect to any transaction contemplated or
undertaken after the Closing Date; and (c) such Person has not incurred and does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability
to pay such debts as they become due (whether at maturity or otherwise); and (ii) such Person is
“solvent” within the meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the amount of any
contingent liability at any time shall be computed as the amount that, in light of all of the facts
and circumstances existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability (irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting Standard No. 5).



     “Sponsor Agreement” means the (i) Amended and Restated Management Advisory Agreement
dated as of September 30, 2004 and as amended by Amendment No. 1, dated as of March 16, 2006, by
and among Parent, Holdings, the other Credit Parties party thereto, and Fenway Partners, Inc., (ii)
the Management Advisory Agreement, dated as of September 30, 2004 and as amended by Amendment No. 1
dated as of March 16, by and among Parent, Holdings, the other Credit Parties party thereto and
Fenway Partners Resources, Inc. and (iii) the Subscription Agreement dated as of February 1, 2006
(and as amended as of March 14, 2006) by and among Easton Bell Sports, LLC, Ontario Teachers’
Pension Plan Board, York Street Mezzanine Partners, L.P., York Street Mezzanine Partners II, L.P.,
Westerkirk Alberta Inc., AIG PEP III Direct, L.P., AIG PEP IV Co-Investment, L.P., AIG
Co-Investment Fund, L.P., AIG Private Equity (Bermuda) Ltd., and American International Group
Retirement Plan, in each case, as amended, waived and modified from time to time in accordance with
Section 6.15.



38









 





     “Sponsor Equity” means the Capital Stock of Parent purchased by the Sponsors and the
Management Investors in an aggregate amount equal to not less than $150,000,000; provided
that the amount of such Capital Stock of Parent purchased by the Management Investors and Jas. D.
Easton, Inc. as rollover equity shall not exceed $50,000,000.



     “Sponsor Fees” means (i) the Termination Fee payable under the Sponsor Agreement;
plus (ii) any other fees payable by the Company in connection with other transactions
pursuant to the Sponsor Agreement; plus (iii) any out-of-pocket expenses payable in
connection with the Sponsor Agreement up to $500,000 in any Fiscal Year; provided, that
solely for purposes of calculations made pursuant to clause (g) of the definition of Consolidated
Adjusted EBITDA and clause (e) of the definition of Consolidated Excess Cash Flow, such other
transaction fees referred to in sub-clause (ii) of this definition shall be disregarded;
provided that the fees described in sub-clauses (i) and (ii) hereof are expressly
subordinated to the Obligations pursuant to the terms of a Sponsor subordination agreement in form
and substance reasonably satisfactory to the Administrative Agent.



     “Sponsors” means Fenway, Ontario Teachers’ Pension Plan Board, an Ontario corporation,
York Street Mezzanine Partners, L.P., a Delaware limited partnership, York Street Mezzanine
Partners II, L.P., a Delaware limited partnership, Jas. D. Easton, Inc., Westerkirk Alberta Inc.,
an Alberta corporation, AIG PEP III Direct, L.P., a Delaware limited partnership, AIG PEP IV
Co-Investment, L.P., a Delaware limited partnership, AIG Co-Investment Fund, L.P., a Delaware
limited partnership, AIG Private Equity (Bermuda) Ltd., a Bermuda limited company, and American
International Group Retirement Plan, a Massachusetts trust.



     “Spot Rate” shall mean, with respect to Canadian Dollars, the rate quoted by Wachovia
as the spot rate for the purchase by Wachovia of Canadian Dollars with U.S. Dollars through its
principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days
prior to the date as of which the foreign exchange computation is made.



     “Subject Transaction” as defined in Section 6.8(d).



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



     “Swingline Loan” means a Loan made by U.S. Swingline Lender to the Company or Canadian
Swingline Lender pursuant to Section 2.4.



39









 





     “Swingline Note” means the U.S. Swingline Note or the Canadian Swingline Note, as
applicable.



     “Syndication Agent” as defined in the preamble hereto.



     “Tax” means any present or future tax, levy, impost, duty, assessment, deduction or
withholding of any nature and whatever called, imposed by a Governmental Authority, on whomsoever
and wherever imposed, levied, collected, withheld or assessed; provided, “Tax on the
overall net income” of a Person shall (i) be construed as a reference to a tax imposed by the
jurisdiction or any subdivision thereof in which that Person is organized or in which that Person’s
applicable principal office (and/or, in the case of a Lender, its applicable lending office) is
located or in which that Person (and/or, in the case of a Lender, its applicable lending office) is
or is deemed to be doing business (a “Relevant Tax Jurisdiction”) on all or part of the net income,
profits or gains (whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office) and (ii) include all franchise
taxes, branch taxes, taxes on doing business or taxes on the overall capital or net worth of any
such Person (and/or in the case of a Lender, its Principal Office), in each case imposed by any
Relevant Tax Jurisdiction in lieu of income, profits or gains taxes.



     “Term Loan” means a Tranche B Term Loan or a New Loan that is a term loan.



     “Term Loan Commitment” means the Tranche B Term Loan Commitment or the New Loan
Commitment of a Lender, and “Term Loan Commitments” means such commitments of all Lenders.



     “Term Loan Maturity Date” means the Tranche B Term Loan Maturity Date and the New Loan
Maturity Date of any Series of New Loans.



     “Terminated Lender” as defined in Section 2.24.



     “Termination Fee” shall mean the fee paid on the Closing Date by the Company to the
Sponsors pursuant to the Sponsor Agreement.



     “Title Policy” as defined in Section 3.1(i).



     “Total Utilization of Canadian Revolving Commitments” means, as at any date of
determination, the sum of (without duplication) (i) the aggregate principal amount of all
outstanding Canadian Revolving Loans (including Bankers’ Acceptance Advances, but excluding
Canadian Revolving Loans made for the purpose of repaying any Refunded Canadian Swingline Loans,
but not yet so applied) and (ii) the aggregate principal amount of all outstanding Canadian
Swingline Loans.



     “Total Utilization of U.S. Revolving Commitments” means, as at any date of
determination, the sum of (without duplication) (i) the aggregate principal amount of all
outstanding U.S. Revolving Loans (other than U.S. Revolving Loans made for the purpose of



40









 




repaying any Refunded U.S. Swingline Loans or reimbursing Issuing Bank for any amount drawn
under any Letter of Credit, but not yet so applied), (ii) the aggregate principal amount of all
outstanding U.S. Swingline Loans, and (iii) the Letter of Credit Usage.




     “Tranche B Term Lender” means each Lender with a Tranche B Term Loan Commitment or
outstanding Term Loan.



     “Tranche B Term Loan” means a Tranche B Term Loan made by a Lender to the Company
pursuant to Section 2.1(b)(ii).



     “Tranche B Term Loan Commitment” means the commitment of a Lender to make or otherwise
fund a Tranche B Term Loan and “Tranche B Term Loan Commitments” means such commitments of all
Lenders in the aggregate. The amount of each Lender’s Tranche B Term Loan Commitment, if any, is
set forth in such Lender’s Lender Commitment Letter. The aggregate amount of the Tranche B Term
Loan Commitments as of the Closing Date is $335,000,000.



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



     “Tranche B Term Loan Maturity Date” means the earlier of (i) the sixth
(6th) anniversary of the Closing Date, and (ii) the date that all Tranche B Term Loans
shall become due and payable in full hereunder, whether by acceleration or otherwise.



     “Tranche B Term Loan Note” means a promissory note in the form of Exhibit B-1, as it
may be amended, supplemented or otherwise modified from time to time.



     “Transaction Costs” means the fees, costs and expenses payable by Holdings, the
Company or any of the Company’s Subsidiaries within three hundred (300) days of the Closing Date in
connection with the Transactions.



     “Transactions” means the Easton Acquisition, the contribution of the Sponsor Equity,
the repayment of the Existing Indebtedness and the entering into of this Agreement and the
Equityholders Agreement.



     “Type of Loan” means (i) with respect to either Term Loans or U.S. Revolving Loans, a
Base Rate Loan or a Eurodollar Rate Loan, (ii) with respect to Canadian Revolving Loans, a U.S.
Dollar Canadian Base Rate Loan, a Canadian Dollar Base Rate Loan, a Eurodollar Rate Loan or
Bankers’ Acceptance Advances, (iii) with respect to a Canadian Swingline Loan, a Canadian Dollar
Base Rate Loan and (iv) with respect to U.S. Swingline Loans, a Base Rate Loan.



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



41









 





     “Unadjusted Eurodollar Rate Component” means that component of the interest costs to
the Company in respect of a Eurodollar Rate Loan that is based upon the rate obtained pursuant to
clause (i) of the definition of Adjusted Eurodollar Rate.



     “U.S. Collateral” shall mean a collective reference to the collateral of the U.S.
Credit Parties which is identified in, and at any time will be covered by, the Collateral
Documents.



     “U.S. Collateral Documents” means the U.S. Pledge and Security Agreement, the
Mortgages, the Landlord Waiver and Consent Agreements, the IP Security Agreements, the Control
Agreements, if any, any arrangements pursuant to the cash collateralization required pursuant to
Section 2.5(a) and all other instruments, documents and agreements delivered by any Credit Party
pursuant to this Agreement or any of the other Credit Documents in order to (a) grant to Collateral
Agent, for the benefit of Lenders, a Lien on any real, personal or mixed property of that Credit
Party as security for the Obligations and/or (b) perfect such Liens.



     “U.S. Credit Parties” shall mean Holdings, the Company and the U.S. Guarantors.



     “U.S. Dollar Canadian Base Rate Loans” means Canadian Revolving Loans made by the
Canadian Lenders in U.S. Dollars accruing interest based on the Base Rate.



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



     “U.S. Lenders” shall mean any Lender holding a U.S. Revolving Commitment, U.S.
Revolving Loans or Tranche B Term Loan on such date



     “U.S. Loans” shall mean U.S. Revolving Loans and Tranche B Term Loans.



     “U.S. Guarantor” shall mean Holdings and each wholly-owned Domestic Subsidiary of the
Company (other than any Immaterial Subsidiary) and each other Subsidiary that agrees to comply with
the terms of Section 5.9 hereof applicable to a wholly-owned Domestic Subsidiary.



     “U.S. Obligations” shall mean all Obligations of the U.S. Credit Parties.



     “U.S. Pledge and Security Agreement” means the Pledge and Security Agreement to be
executed by the Company and each Guarantor on the Closing Date, as it may be amended, supplemented
or otherwise modified from time to time.



     “U.S. Revolving Lender” shall mean, as of any date of determination, any Lender
holding a U.S. Revolving Commitment on such date.



     “U.S. Revolving Loan Note” means a promissory note in the form of Exhibit B-2, as it
may be amended, supplemented or otherwise modified from time to time.



     “U.S. Revolving Commitment” shall mean, with respect to each U.S. Revolving Lender,
the commitment of such U.S. Revolving Lender to make U.S. Revolving Loans in an aggregate



42









 




principal Dollar Amount at any time outstanding up to such U.S Revolving Lender’s U.S.
Revolving Commitment Percentage of the U.S. Revolving Committed Amount.




     “U.S. Revolving Commitment Percentage” shall mean, for each U.S. Revolving Lender, the
percentage identified as its U.S. Revolving Commitment Percentage in its Lender Commitment Letter
or the Register, as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 10.6(c).



     “U.S. Revolving Committed Amount” shall have the meaning set forth in Section 2.2.



     “U.S. Revolving Loans” shall have the meaning set forth in Section 2.2.



     “U.S. Revolving Note” or “U.S. Revolving Notes” shall mean the promissory
notes of the Company in favor of each of the U.S. Revolving Lenders evidencing the U.S. Revolving
Loans provided pursuant to Section 2.2, individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented, extended, renewed or replaced from time to
time.



     “U.S. Secured Parties” means Administrative Agent, the U.S. Lenders and each Lender
Counterparty.



     “U.S. Swingline Lender” means Wachovia in its capacity as Swingline Lender hereunder,
together with its permitted successors and assigns in such capacity.



     “U.S. Swingline Loan” means a Loan made by U.S. Swingline Lender to the Company
pursuant to Section 2.4(a).



     “U.S. Swingline Note” means a promissory note in the form of Exhibit B-4, as it may be
amended, supplemented or otherwise modified from time to time.



     “U.S. Swingline Sublimit” means the lesser of (i) $10,000,000, and (ii) the aggregate
unused amount of U.S. Revolving Commitments then in effect.



     “Wachovia Securities” as defined in the preamble hereto.



     “Wachovia” means Wachovia Bank, National Association.



     “wholly-owned” means, with respect to any Person, a Subsidiary of such Person all the
outstanding Capital Stock of which (other than (i) directors’ qualifying shares and (ii) shares
issued to foreign nationals to the extent required by applicable law) is owned by such Person
and/or by one or more wholly-owned Subsidiaries of such Person.



     “York Real Property” means the property located at 55 Grumbacher Road, Manchester,
Pennsylvania.



43









 





     Section 1.2 Accounting Terms.



     Except as otherwise expressly provided herein, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and
other information required to be delivered by the Company to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the time of such
preparation (and delivered together with the reconciliation statements provided for in Section
5.1(e), if applicable). For purposes of determining compliance with the covenants contained in
Section 6 and the calculation of Leverage Ratio all accounting terms herein shall be interpreted
and all accounting determinations hereunder (in each case, unless otherwise provided for or defined
herein) shall be made in accordance with GAAP in effect from time to time; provided, that
if Company notifies the Administrative Agent that the Company wishes to amend any covenant in
Section 2.15 or Section 6 or the Leverage Ratio or any related definition to eliminate the effect
of any change in GAAP occurring after the date of this Agreement on the operation of such covenant
(or if the Administrative Agent notifies the Company that the Requisite Lenders wish to amend
Section 2.15 or Section 6 or the Leverage Ratio any related definition for such purpose), then (i)
the Company and the Administrative Agent shall negotiate in good faith to agree upon an appropriate
amendment to such covenant or the Leverage Ratio and (ii) the Company’s compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective until such covenant is amended in a manner satisfactory to the Company and
the Requisite Lenders. For the purposes of determining compliance under Sections 6.1, 6.2, 6.6,
6.7 and 6.8 with respect to any amount in a currency other than U.S. Dollars, such amount shall be
deemed to equal the Dollar equivalent thereof at the time such amount was incurred or expended, as
the case may be.



     Section 1.3 Interpretation, etc.



     Any of the terms defined herein may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference. References herein to any Section, Appendix,
Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word “include” or
“including”, when following any general statement, term or matter, shall not be construed to limit
such statement, term or matter to the specific items or matters set forth immediately following
such word or to similar items or matters, whether or not no limiting language (such as “without
limitation” or “but not limited to” or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.



     Section 1.4 Exchange Rates; Currency Equivalents.



     (a) The Administrative Agent shall determine the Spot Rate as of each Revaluation Date to be
used for calculating the Dollar Amount of Credit Extensions and amounts outstanding hereunder
denominated in Canadian Dollars. Any such Spot Rate shall become effective as of such Revaluation
Date and shall be the Spot Rate employed in converting any amounts between the applicable
currencies until the next Revaluation Date to occur. Except for purposes of financial statements
delivered by the Company hereunder or calculating financial covenants



44









 




hereunder or except as otherwise provided herein, the applicable amount of any currency for
purposes of the Credit Documents shall be such Dollar Amount as so determined by the Administrative
Agent.




     (b) Wherever in this Agreement in connection with a Credit Extension, conversion, continuation
or prepayment of a Loan, an amount, such as a required minimum or multiple amount, is expressed in
U.S. Dollars, but such Credit Extension or Loan is denominated in Canadian Dollars, such amount
shall be the relevant Canadian Dollar Equivalent of such Dollar amount (rounded to the nearest
1,000 Canadian Dollars), as determined by the Administrative Agent.



SECTION 2



LOANS AND LETTERS OF CREDIT




     Section 2.1 Term Loans.



     (a) Loan Commitments. Subject to the terms and conditions hereof, each Tranche B Term
Lender severally agrees to make, on the Closing Date, a Tranche B Term Loan to the Company in an
amount equal to such Lender’s Tranche B Term Loan Commitment. The Company may make only one
borrowing under the Tranche B Term Loan Commitments which shall be on the Closing Date. Any amount
borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed.
Subject to Sections 2.13, 2.14(a) and 2.15, all amounts owed hereunder with respect to the Tranche
B Term Loans shall be paid in full no later than the Tranche B Term Loan Maturity Date. Each
Tranche B Term Lender’s Tranche B Term Loan Commitment shall terminate immediately and without
further action on the Closing Date after giving effect to the funding of such Tranche B Term
Lender’s Tranche B Term Loan Commitment on such date.



     (b) Borrowing Mechanics for Term Loans.




     (i) The Company shall deliver to Administrative Agent a fully executed Funding Notice
no later than one (1) day prior to the Closing Date. Promptly upon receipt by
Administrative Agent of such Funding Notice, Administrative Agent shall notify each Tranche
B Term Lender of the proposed borrowing.




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



45









 






Agent’s Principal Office or to such other account as may be designated in writing to
Administrative Agent by the Company.



     Section 2.2 U.S. Revolving Loans.



     (a) U.S. Revolving Commitments. During the Revolving Commitment Period, subject to
the terms and conditions hereof, each U.S. Revolving Lender severally agrees to make revolving
credit loans in U.S. Dollars (“U.S. Revolving Loans”) to the Company from time to time in
an aggregate principal U.S. Dollar amount of SEVENTY MILLION DOLLARS ($70,000,000) (as such
aggregate maximum amount may be reduced from time to time as provided in Sections 2.13, 2.14 and
2.15, the “U.S. Revolving Committed Amount”) for the purposes hereinafter set forth;
provided, that after giving effect to the making of any U.S. Revolving Loans in no event
shall the Total Utilization of U.S. Revolving Commitments exceed the U.S. Revolving Committed
Amount then in effect. Amounts borrowed pursuant to this Section 2.2(a) may be repaid and
reborrowed during the Revolving Commitment Period. Each U.S. Revolving Lender’s U.S. Revolving
Commitment shall expire on the Revolving Commitment Termination Date and all U.S. Revolving Loans
and all other amounts owed hereunder with respect to the U.S. Revolving Loans and the U.S.
Revolving Commitments shall be paid in full no later than such date.



     (b) Borrowing Mechanics for U.S. Revolving Loans.




     (i) Except pursuant to 2.3(b)(iv) and 2.4(d), U.S. Revolving Loans that are Base Rate
Loans shall be made in an aggregate minimum amount of $500,000 and integral multiples of
$100,000 in excess of that amount, and U.S. Revolving Loans that are Eurodollar Rate Loans
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount.




     (ii) Whenever the Company desires that Lenders make Revolving Loans, the Company shall
deliver to Administrative Agent a fully executed and delivered Funding Notice no later than
1:00 p.m. (New York City time) at least three Business Days in advance of the proposed
Credit Date in the case of a Eurodollar Rate Loan, and no later than 11:00 a.m. (New York
City time) on the proposed Credit Date in the case of a Revolving Loan that is a Base Rate
Loan. Except as otherwise provided herein, a Funding Notice for a Revolving Loan that is a
Eurodollar Rate Loan shall be irrevocable on and after the related Interest Rate
Determination Date, and the Company shall be bound to make a borrowing in accordance
therewith.




     (iii) Notice of receipt of each Funding Notice in respect of Revolving Loans, together
with the amount of each Lender’s Pro Rata Share thereof, if any, together with the election
of the applicable interest rate, shall be provided by Administrative Agent to each
applicable Lender by facsimile with reasonable promptness, but (provided Administrative
Agent shall have received such notice by 9:00 a.m. (New York City time)) not later than
11:00 a.m. (New York City time) on the same day as Administrative Agent’s receipt of such
Notice from the Company.



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     (iv) Each U.S. Revolving Lender shall make the amount of its U.S. Revolving Loan
available to Administrative Agent not later than 2:00 p.m. (New York City time) on the
applicable Credit Date by wire transfer of same day funds in U.S. Dollars, at Administrative
Agent’s Principal Office. Except as provided herein, upon satisfaction or waiver of the
conditions precedent specified herein, Administrative Agent shall make the proceeds of such
U.S. Revolving Loans available to the Company on the applicable Credit Date by causing an
amount of same day funds in U.S. Dollars equal to the proceeds of all such U.S. Revolving
Loans received by Administrative Agent from U.S. Revolving Lenders to be credited to the
account of the Company at Administrative Agent’s Principal Office or such other account as
may be designated in writing to Administrative Agent by the Company.



     Section 2.3 Canadian Revolving Loans.



     (a) Canadian Revolving Commitments. During the Revolving Commitment Period, subject
to the terms and conditions hereof, each Canadian Revolving Lender severally agrees to make
revolving credit loans in Canadian Dollars or U.S. Dollars (“Canadian Revolving Loans”) to
the Canadian Borrowers from time to time in an aggregate principal Canadian Dollar amount of
TWELVE MILLION DOLLARS (C$12,000,000) (as such aggregate maximum amount may be reduced from time to
time as provided in Sections 2.13, 2.14 and 2.15, the “Canadian Revolving Committed
Amount”) for the purposes hereinafter set forth; provided, that after giving effect to
the making of any Canadian Revolving Loans (including any Bankers’ Acceptance Advance), in no event
shall the Total Utilization of Canadian Revolving Commitments exceed the Canadian Revolving
Committed Amount then in effect. Canadian Revolving Loans may consist of U.S. Dollar Canadian Base
Rate Loans, Canadian Dollar Base Rate Loans, Eurodollar Rate Loans, Bankers’ Acceptance Advances,
or a combination thereof, as the Canadian Borrowers may request, and may be repaid and reborrowed
in accordance with the provisions hereof; provided, however, Canadian Revolving
Loans made on the Closing Date or on any of the three (3) Business Days following the Closing Date
may only consist of U.S. Dollar Canadian Base Rate Loans and Canadian Dollar Base Rate Loans.
Canadian Dollar Base Rate Loans shall be denominated in Canadian Dollars. U.S. Dollar Canadian
Base Rate Loans and Eurodollar Rate Loans shall be denominated in U.S. Dollars. Bankers’
Acceptance Advances shall be denominated in Canadian Dollars. Eurodollar Rate Loans denominated in
U.S. Dollars shall be made by each Canadian Revolving Lender at its Principal Office. Canadian
Dollar Base Rate Loans and U.S. Dollar Canadian Base Rate Loans shall be made by each Canadian
Revolving Lender at its Canadian Lending Office.



     (b) Borrowing Mechanics for Canadian Revolving Loans.




     (i) Each Canadian Revolving Loan which is a U.S. Dollar Canadian Base Rate Loan shall
be in a minimum aggregate amount of $1,000,000 and in integral multiples of $100,000 in
excess thereof (or the remaining amount of the aggregate Canadian Revolving Committed
Amount, if less). Each Canadian Revolving Loan which is a Canadian Dollar Base Rate Loan
shall be in a minimum aggregate amount of C$1,000,000 and in integral multiples of C$100,000
in excess thereof (or the remaining amount of the aggregate Canadian Revolving Committed
Amount, if less). Each



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Canadian Revolving Loan which is a Eurodollar Rate Loan shall be in a minimum aggregate
amount of $2,000,000 and in integral multiples of $500,000 in excess thereof. Each Canadian
Revolving Loan which is a Bankers’ Acceptance Advance shall be in a minimum aggregate amount
of C$1,000,000 and in integral multiples of C$100,000 in excess thereof and each Bankers’
Acceptance shall have a minimum face amount of at least C$1,000,000.




     (ii) Any Canadian Borrower (or the Company on behalf of any Canadian Borrower) may
request a Canadian Revolving Loan borrowing by submitting a written Funding Notice to
Canadian Agent (with a copy to Administrative Agent) not later than 11:00 a.m. (New York
City time) on the date of the requested borrowing in the case of U.S. Dollar Canadian Base
Rate Loans and Canadian Dollar Base Rate Loans, on the second Business Day prior to the date
of the requested borrowing in the case of Bankers’ Acceptance Advances and, on the third
Business Day prior to the date of the requested borrowing in the case of Eurodollar Rate
Loans. Each such request for borrowing shall be irrevocable and shall specify (A) that a
Canadian Revolving Loan is requested, (B) the date of the requested borrowing (which shall
be a Business Day), (C) the currency and the aggregate principal amount to be borrowed, (D)
whether the borrowing shall be comprised of U.S. Dollar Canadian Base Rate Loans, Canadian
Dollar Base Rate Loans, Bankers’ Acceptance Advances, or Eurodollar Rate Loans or a
combination thereof, and if Eurodollar Rate Loans are requested, the Interest Period
therefor. If any Canadian Borrower (or the Company on behalf of any Canadian Borrower)
shall fail to specify in any Funding Notice (I) an applicable Interest Period in the case of
a Eurodollar Rate Loan, then such notice shall be deemed to be a request for an Interest
Period of one month, (II) the type of Canadian Revolving Loan requested, then such notice
shall be deemed to be a request for a Canadian Dollar Base Rate Loan hereunder, or (III) the
currency of the Canadian Revolving Loan requested, then such notice shall be deemed to be a
request for a Canadian Dollar Base Rate Loan.




     (iii) Notice of receipt of each Funding Notice in respect of Canadian Revolving Loans
and the contents thereof, together with the amount of each Canadian Revolving Lender’s Pro
Rata Share thereof, shall be provided by Canadian Agent to each applicable Canadian Lender
by facsimile with reasonable promptness, but (provided Canadian Agent shall have received
such notice by 11:00 a.m. (Toronto time)) not later than 2:00 p.m. (Toronto time) on the
same day as Administrative Agent’s receipt of such Funding Notice from the Company or the
applicable Canadian Borrower.




     (iv) Each Canadian Revolving Lender shall make the amount of its Canadian Revolving
Loan available to Canadian Agent not later than 2:00 p.m. (Toronto time) on the applicable
Credit Date by wire transfer of same day funds in U.S. Dollars or Canadian Dollars, as
applicable, at Canadian Agent’s Principal Office. Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified herein, Canadian Agent shall
make the proceeds of such Canadian Revolving Loans available to the applicable Canadian
Borrower on the applicable Credit Date by causing an amount of same day funds in U.S.
Dollars or Canadian Dollars, as applicable, equal to the proceeds of all such Canadian
Revolving Loans received by Canadian Agent from Canadian Revolving



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Lenders to be credited to the account of the Company at Canadian Agent’s Principal
Office or such other account as may be designated in writing to Administrative Agent by the
Company or the applicable Canadian Borrower.




     (c) Funding of Bankers Acceptances.




     (i) Subject to the limitations contained in Section 2.3(a), 2.3(b) and this Section
2.3(c), if Canadian Agent receives from any Canadian Borrower (or the Company on behalf of
any Canadian Borrower) a Funding Notice or a Conversion/Continuation Notice requesting a
Bankers’ Acceptance Advance or an extension or conversion of a Canadian Dollar Base Rate
Loan into a Bankers’ Acceptance Advance, Canadian Agent shall notify each of the Canadian
Revolving Lenders prior to 12:00 p.m.. (Toronto time) on the second Business Day prior to
the date of such requested borrowing, of such request except that, if the Face Amount of a
Bankers’ Acceptance or Acceptance Note which would otherwise be accepted or purchased by a
Canadian Revolving Lender would not be in the amount of C$500,000, or an integral multiple
thereof, such Face Amount shall be increased or reduced by Canadian Agent in its sole and
unfettered discretion to the nearest integral multiple of C$100,000. Each BA Lender or
Acceptance Lender, as the case may be, shall, not later than 2:00 p.m. (Toronto time) on the
date of each Bankers’ Advance Acceptance under the Canadian Revolving Loan (whether in
respect of a Funding Notice or pursuant to a Conversion/Continuation Notice), subject to
this Section 2.3(c), purchase Bankers’ Acceptances or Acceptance Notes of the Canadian
Borrowers which are presented to it for acceptance or purchase and which have an aggregate
face amount equal to such BA Lender’s pro rata share of the total Bankers’ Acceptance
Advance on such date. With respect to each Funding Notice or pursuant to a
Conversion/Continuation Notice, each BA Lender or Acceptance Lender, as the case may be,
shall not be required to accept or purchase any Bankers’ Acceptance or Acceptance Note which
has a face amount which is less than C$500,000 or not an integral multiple of C$100,000.
Concurrent with the acceptance or purchase of Bankers’ Acceptances or Acceptance Notes of
the Canadian Borrowers as aforesaid, each BA Lender or Acceptance Lender, as the case may
be, shall make available to Canadian Agent its pro rata portion of the Notional BA Proceeds
with respect to such Bankers’ Acceptance. Canadian Agent shall, upon fulfillment by any
Canadian Borrower of the conditions set out in Section 3.1 or Section 3.2, as applicable,
make such Notional BA Proceeds available to such Canadian Borrower on the date of such
Bankers’ Acceptance Advance by wiring the funds available to Canadian Agent by the Canadian
Revolving Lenders and in like funds as received by Canadian Agent to the account specified
by such Canadian Borrower.




     (ii) Acceptance Fees. With respect to each Bankers’ Acceptance and Acceptance
Note of any Canadian Borrower accepted or issued pursuant hereto, such Canadian Borrower (or
the Company on behalf of such Canadian Borrower) shall pay to Canadian Agent on behalf of
the Canadian Lenders, in advance, an acceptance fee denominated in Canadian Dollars
calculated at the rate per annum, on the basis of a year of 365 days, equal to the
Applicable Margin on the Face Amount of such Bankers’ Acceptance or the face amount of such
Acceptance Note, as applicable for its term, being



49









 




the actual number of days in the period commencing on the date of acceptance of such
Canadian Borrower’s Bankers’ Acceptance or date of issuance of such Acceptance Note and
ending on but excluding the maturity date of the Bankers’ Acceptance or Acceptance Note.
Such acceptance fees shall be non-refundable and shall be fully earned when due. Such
acceptance fees shall be paid by the Canadian Borrowers (or the Company on behalf of such
Canadian Borrower) by deduction of the amount thereof from what would otherwise be Notional
BA Proceeds funded pursuant to Section 2.3(c).




     (iii) Safekeeping of Drafts and Power of Attorney.




     (A) The BA Lenders and Acceptance Lenders agree that, in respect of the
safekeeping of executed drafts of the Canadian Borrowers which are delivered to them
for acceptance as Bankers’ Acceptances hereunder, they shall exercise the same
reasonable degree of care which the BA Lenders and Acceptance Lenders give to their
own property, provided that the BA Lenders and Acceptance Lenders shall not be
deemed to be insurers thereof.




     (B) To facilitate availment of Bankers’ Acceptances and Acceptance Notes, the
Canadian Borrowers hereby appoint the applicable BA Lender or Acceptance Lender, as
the case may be, as its attorney to sign and endorse on its behalf (in accordance
with a Funding Notice or Conversion/Continuation Notice relating to Bankers’
Acceptances or Acceptance Notes) in handwriting or by facsimile or mechanical
signature as and when deemed necessary by Canadian Agent, blank forms of Bankers’
Acceptances or Acceptance Notes in the form required by the applicable BA Lender or
Acceptance Lender, as the case may be, which appointment is made for consideration
and coupled with an interest. The Canadian Borrowers recognize and agree that all
Bankers’ Acceptances and Acceptance Notes so signed or endorsed on its behalf by the
applicable BA Lender or Acceptance Lender, as the case may be, shall bind the
Canadian Borrowers as fully and effectually as if signed in the handwriting of and
duly issued by the proper signing officers of the Canadian Borrowers. The BA
Lenders and Acceptance Lenders are hereby authorized (in accordance with a Funding
Notice or Conversion/Continuation Notice relating to Bankers’ Acceptances or
Acceptance Notes) to issue such Bankers’ Acceptances or Acceptance Notes endorsed in
blank in such face amounts as may be determined by them; provided that the
aggregate amount thereof is equal to the aggregate amount of Bankers’ Acceptances or
Acceptance Notes required to be accepted and purchased by such BA Lenders or
Acceptance Lender, as the case may be. The applicable BA Lender or Acceptance
Lender shall not be liable for any damage, loss or other claim arising by reason of
any loss or improper use of any such instrument except to the extent attributable to
the gross negligence or willful misconduct of the applicable BA Lender or Acceptance
Lender or their officers, employees, agents or representatives. The applicable BA
Lender or Acceptance Lender shall maintain a record with respect to Bankers’
Acceptances or Acceptance Notes, as the case may be, (a) received by it in blank
hereunder, (b)



50









 






     voided by it for any reason, (c) accepted and purchased by it hereunder, and
(d) cancelled at their respective maturities.




     (iv) Term and BA Periods. The term of any Bankers’ Acceptance or Acceptance
Note shall be specified in the draft and in the Funding Notice or Conversion/Continuation
Notice related thereto and the term of any Bankers’ Acceptance and the term of any
Acceptance Note shall be for a BA Period, unless otherwise agreed to by Canadian Agent. The
term of each Bankers’ Acceptance or Acceptance Note shall mature on a Business Day. No
Bankers’ Acceptance or Acceptance Note shall have a maturity date after the date of the
Revolving Commitment Termination Date.




     (v) Payment on Maturity. The applicable Canadian Borrower shall pay to
Canadian Agent, for the account of the BA Lenders or Acceptance Lenders, as applicable, on
the maturity date of any Bankers’ Acceptance or Acceptance Note issued by the Canadian
Borrowers an amount equal to the Face Amount of such maturing Bankers’ Acceptance or the
face amount of such Acceptance Note, as the case may be; provided that a Canadian Borrower
may, at its option, so reimburse the BA Lenders or Acceptance Lenders, as applicable, in
whole or in part, by delivering to Canadian Agent no later than 12:00 p.m. (Toronto time)
two (2) Business Days’ prior to the maturity date of a maturing Bankers’ Acceptance or
Acceptance Note, as the case may be, a Notice of Conversion/Extension specifying the term
of the Bankers’ Acceptance or the Acceptance Note, as the case may be, and presenting a
draft or Acceptance Note to the BA Lenders or Acceptance Lenders, as applicable for
acceptance and purchase resulting, in the case of reimbursement in whole by replacement
Bankers’ Acceptance or Acceptance Note, in the aggregate equal to the Face Amount of the
maturing Bankers’ Acceptance or face amount of the maturing Acceptance Note. In the event
that any Canadian Borrower fails to deliver a Notice of Conversion/Extension and fails to
make payment to Canadian Agent in respect of the maturing Bankers’ Acceptance Advance, the
Face Amount of the maturing Bankers’ Acceptances and the face amount of any Acceptance Note
forming part of such Bankers’ Acceptance Advance shall be deemed to be converted to a
Canadian Dollar Base Rate Loan on the relevant maturity date.




     (vi) Waiver of Days of Grace. Each Canadian Borrower renounces and shall not
claim any days of grace for the payment of any Bankers’ Acceptance or Acceptance Notes.




     (vii) Special Provisions Relating to Acceptance Notes.




     (A) Each Canadian Borrower and each Canadian Lender hereby acknowledges and
agrees that from time to time certain BA Lenders may not be authorized to or may, as
a matter of general corporate policy, elect not to accept and purchase Bankers’
Acceptances, and each Canadian Borrower and each Canadian Lender agrees that any
such Canadian Lender may purchase Acceptance Notes of the applicable Canadian
Borrower in accordance with the provisions of Section 2.3(c)(vii)(B) in lieu of
accepting and purchasing Bankers’ Acceptances for its account.



51









 






     (B) In the event that any BA Lender described in Section 2.3(c)(vii)(A) above
is unable to, or elects as a matter of general corporate policy not to, accept
Bankers’ Acceptances hereunder, such Lender shall not be required to accept Bankers’
Acceptances hereunder, but rather, if a Canadian Borrower requests the acceptance of
such Bankers’ Acceptances, then the Canadian Borrowers shall deliver to such BA
Lender non-interest bearing promissory notes (each, an “Acceptance Note”) of
the Canadian Borrowers, substantially in the form of Exhibit B-3, having the same
maturity as the Bankers’ Acceptances to be accepted and in an aggregate face amount
equal to the Face Amount of such Bankers’ Acceptances. Each such BA Lender hereby
agrees to purchase Acceptance Notes from the Canadian Borrowers at a purchase price
equal to the Notional BA Proceeds which would have been applicable if a Bankers’
Acceptance draft had been accepted by it and such Acceptance Notes shall be governed
by the provisions of this Section 2.3(c) as if they were Bankers’ Acceptances.



     Notwithstanding the foregoing, unless the Acceptance Lender otherwise notifies the
Canadian Borrowers in writing, in lieu of receiving delivery of Acceptance Notes, such
Acceptance Notes shall be uncertificated and Acceptance Notes shall be evidenced by the
account of the Lenders.



     (viii) No Market. If Canadian Agent determines in good faith and notifies the
Company or any Canadian Borrower in writing that, by reason of circumstances affecting the
Canadian money market, there is no market for Bankers’ Acceptances, then the right of the
Canadian Borrowers to request Bankers’ Acceptance Advances shall be suspended until Canadian
Agent determines that the circumstances causing such suspension no longer exists and the
Administrative Agent so notifies the Company or the Canadian Borrowers. In such
circumstances, any Funding Notice for a Bankers’ Acceptance Advance which is outstanding
shall be cancelled and the Bankers’ Acceptance Advance requested therein shall, at the
option of the applicable Canadian Borrower, either not be made or be made as a Canadian
Dollar Base Rate Loan.



Section 2.4 Swingline Loans.




(a) U.S. Swingline Loans




     (i) U.S. Swingline Loan Commitments. During the Revolving Commitment Period,
subject to the terms and conditions hereof, U.S. Swingline Lender hereby agrees to make U.S.
Swingline Loans to the Company in the aggregate amount up to but not exceeding the U.S.
Swingline Sublimit; provided, that after giving effect to the making of any U.S.
Swingline Loan, in no event shall the Total Utilization of U.S. Revolving Commitments exceed
the U.S. Revolving Committed Amount then in effect. Amounts borrowed pursuant to this
Section 2.4(a) may be repaid and reborrowed during the Revolving Commitment Period. U.S.
Swingline Lender’s Revolving Commitment shall expire on the Revolving Commitment Termination
Date and all U.S. Swingline Loans



52









 




and all other amounts owed hereunder with respect to the U.S. Swingline Loans and the
Revolving Commitments shall be paid in full no later than such date.




     (ii) Borrowing Mechanics for U.S. Swingline Loans.




     (A) U.S. Swingline Loans shall be made in an aggregate minimum amount of
$100,000 and integral multiples of $25,000 in excess of that amount.




     (B) Whenever the Company desires that U.S. Swingline Lender make a U.S.
Swingline Loan, the Company shall deliver to Administrative Agent a Funding Notice
no later than 1:00 p.m. (New York City time) on the proposed Credit Date.




     (C) U.S. Swingline Lender shall make the amount of its U.S. Swingline Loan
available to Administrative Agent not later than 2:00 p.m. (New York City time) on
the applicable Credit Date by wire transfer of same day funds in U.S. Dollars, at
Administrative Agent’s Principal Office. Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified herein, Administrative
Agent shall make the proceeds of such U.S. Swingline Loans available to the Company
on the applicable Credit Date by causing an amount of same day funds in U.S. Dollars
equal to the proceeds of all such U.S. Swingline Loans received by Administrative
Agent from U.S. Swingline Lender to be credited to the account of the Company at
Administrative Agent’s Principal Office, or to such other account as may be
designated in writing to Administrative Agent by the Company.




     (D) With respect to any U.S. Swingline Loans which have not been voluntarily
prepaid by the Company pursuant to Section 2.14, U.S. Swingline Lender may at any
time in its sole and absolute discretion, deliver to Administrative Agent (with a
copy to the Company), no later than 11:00 a.m. (New York City time) at least one (1)
Business Day in advance of the proposed Credit Date, a notice (which shall be deemed
to be a Funding Notice given by the Company) requesting that each Lender holding a
U.S. Revolving Commitment make U.S. Revolving Loans that are Base Rate Loans to the
Company on such Credit Date in an amount equal to the amount of such U.S. Swingline
Loans (the “Refunded U.S. Swingline Loans”) outstanding on the date such
notice is given which U.S. Swingline Lender requests Lenders to prepay. Promptly
after receipt by Administrative Agent of such notice, Administrative Agent shall
notify each such Lender thereof. Anything contained in this Agreement to the
contrary notwithstanding, (1) the proceeds of such U.S. Revolving Loans made by the
Lenders pursuant to this Section 2.4(a)(ii)(D) (other than U.S. Swingline Lender)
shall be immediately delivered by Administrative Agent to U.S. Swingline Lender (and
not to the Company) and applied to repay a corresponding portion of the Refunded
U.S. Swingline Loans and (2) on the day such U.S. Revolving Loans are made, U.S.
Swingline Lender’s Pro Rata Share of the Refunded U.S. Swingline Loans shall be
deemed to be paid with the proceeds of a U.S.



53









 






Revolving Loan made by U.S. Swingline Lender to the Company, and such portion
of the U.S. Swingline Loans deemed to be so paid shall no longer be outstanding as
U.S. Swingline Loans and shall no longer be due under the U.S. Swingline Note of
U.S. Swingline Lender but shall instead constitute part of U.S. Swingline Lender’s
outstanding U.S. Revolving Loans to the Company and shall be due under the U.S.
Revolving Loan Note issued by the Company to U.S. Swingline Lender. The Company
hereby authorizes Administrative Agent and U.S. Swingline Lender to charge the
Company’s accounts with Administrative Agent and U.S. Swingline Lender (up to the
amount available in each such account) in order to immediately pay U.S. Swingline
Lender the amount of the Refunded U.S. Swingline Loans to the extent of the proceeds
of such U.S. Revolving Loans made by Lenders, including the U.S. Revolving Loans
deemed to be made by U.S. Swingline Lender, are not sufficient to repay in full the
Refunded U.S. Swingline Loans. If any portion of any such amount paid (or deemed to
be paid) to U.S. Swingline Lender should be recovered by or on behalf of the Company
from U.S. Swingline Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably shared among all
Lenders in the manner contemplated by Section 2.18.




     (E) If for any reason U.S. Revolving Loans are not made pursuant to Section
2.4(a)(ii)(D) in an amount sufficient to repay any amounts owed to U.S. Swingline
Lender in respect of any outstanding U.S. Swingline Loans on or before the third
Business Day after demand for payment thereof by U.S. Swingline Lender, each Lender
holding a U.S. Revolving Commitment shall be deemed to, and hereby agrees to, have
purchased a participation in such outstanding U.S. Swingline Loans, and in an amount
equal to its Pro Rata Share of the applicable unpaid amount together with accrued
interest thereon. Upon one Business Day’s notice from U.S. Swingline Lender, each
Lender holding a U.S. Revolving Commitment shall deliver to U.S. Swingline Lender an
amount equal to its respective participation in the applicable unpaid amount in same
day funds at the Principal Office of U.S. Swingline Lender. In order to evidence
such participation each Lender holding a U.S. Revolving Commitment agrees to enter
into a participation agreement at the request of U.S. Swingline Lender in form and
substance reasonably satisfactory to U.S. Swingline Lender. In the event any Lender
holding a U.S. Revolving Commitment fails to make available to U.S. Swingline Lender
the amount of such Lender’s participation as provided in this paragraph, U.S.
Swingline Lender shall be entitled to recover such amount on demand from such Lender
together with interest thereon for three Business Days at the rate customarily used
by U.S. Swingline Lender for the correction of errors among banks and thereafter at
the Base Rate, as applicable.




     (F) Notwithstanding anything contained herein to the contrary, (1) each
Lender’s obligation to make U.S. Revolving Loans for the purpose of repaying any
Refunded U.S. Swingline Loans pursuant to the second preceding paragraph and each
Lender’s obligation to purchase a participation in any unpaid U.S. Swingline Loans
pursuant to the immediately preceding paragraph shall be



54









 






absolute and unconditional and shall not be affected by any circumstance,
including without limitation (A) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against U.S. Swingline Lender, any Credit
Party or any other Person for any reason whatsoever; (B) the occurrence or
continuation of a Default or Event of Default; (C) any adverse change in the
business, results of operations, properties, assets, financial condition or
prospects of any Credit Party; (D) any breach of this Agreement or any other Credit
Document by any party thereto; or (E) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that
such obligations of each Lender are subject to the condition that U.S. Swingline
Lender believed in good faith that all conditions under Section 3.2 to the making of
the applicable Refunded U.S. Swingline Loans or other unpaid U.S. Swingline Loans,
were satisfied at the time such Refunded U.S. Swingline Loans or unpaid U.S.
Swingline Loans were made, or the satisfaction of any such condition not satisfied
had been waived by the Requisite Lenders prior to or at the time such Refunded U.S.
Swingline Loans or other unpaid U.S. Swingline Loans were made; and (2) U.S.
Swingline Lender shall not be obligated to make any U.S. Swingline Loans (A) after
the occurrence and during the continuation of a Default or Event of Default or (B)
at a time when a Funding Default exists unless U.S. Swingline Lender has entered
into arrangements reasonably satisfactory to it and the Company to eliminate U.S.
Swingline Lender’s risk with respect to the Defaulting Lender’s participation in
such U.S. Swingline Loan, including by cash collateralizing such Defaulting Lender’s
Pro Rata Share of the outstanding U.S. Swingline Loans.




     (G) Notwithstanding anything contained herein to the contrary, U.S. Swingline
Loans in excess of $1,500,000 in the aggregate may not be outstanding for more than
ten (10) consecutive days. To the extent a U.S. Swingline Loan in excess of
$1,500,000 in the aggregate has not been voluntarily prepaid by the Company pursuant
to Section 2.14 within ten (10) days of the making of such U.S. Swingline Loan by
U.S. Swingline Lender, then U.S. Swingline Lender shall request Lenders make U.S.
Revolving Loans pursuant to Section 2.4(a)(ii)(D). The amount of any such U.S.
Swingline Loans prepaid or repaid pursuant to Section 2.4(a)(ii)(D) may not be
reborrowed for a period of three (3) days. Nothing in this clause (vii) shall be
construed to impose any additional obligations, except the obligation to request
U.S. Revolving Loans pursuant to the immediately preceding sentence, on the U.S.
Swingline Lender other than those obligations otherwise set forth in this Agreement.



(b) Canadian Swingline Loans




     (i) Canadian Swingline Loan Commitments. During the Revolving Commitment
Period, subject to the terms and conditions hereof, Canadian Swingline Lender hereby agrees
to make Canadian Swingline Loans to the Canadian Borrowers in the aggregate amount up to but
not exceeding the Canadian Swingline Sublimit; provided, that after giving effect to
the making of any Canadian Swingline Loan, in no



55









 




event shall the Total Utilization of Canadian Revolving Commitments exceed the Canadian
Revolving Committed Amount then in effect. Amounts borrowed pursuant to this Section 2.4(b)
may be repaid and reborrowed during the Revolving Commitment Period. Canadian Swingline
Lender’s Canadian Revolving Commitment shall expire on the Revolving Commitment Termination
Date and all Canadian Swingline Loans and all other amounts owed hereunder with respect to
the Canadian Swingline Loans and the Canadian Revolving Commitments shall be paid in full no
later than such date.




     (ii) Borrowing Mechanics for Canadian Swingline Loans.




     (A) Canadian Swingline Loans shall be made in an aggregate minimum amount of
C$100,000 and integral multiples of C$25,000 in excess of that amount.




     (B) Whenever the Canadian Borrowers desire that Canadian Swingline Lender make
a Canadian Swingline Loan, the applicable Canadian Borrower (or the Company on
behalf of such Canadian Borrower) shall deliver to Canadian Agent a Funding Notice
no later than 1:00 p.m. (Toronto time) on the proposed Credit Date.




     (C) Canadian Swingline Lender shall make the amount of its Canadian Swingline
Loan available to Canadian Agent not later than 3:00 p.m. (Toronto time) on the
applicable Credit Date by wire transfer of same day funds in U.S. Dollars or
Canadian Dollars, at Canadian Agent’s Principal Office. Except as provided herein,
upon satisfaction or waiver of the conditions precedent specified herein, Canadian
Agent shall make the proceeds of such Canadian Swingline Loans available to the
applicable Canadian Borrower on the applicable Credit Date by causing an amount of
same day funds in U.S. Dollars or Canadian Dollars equal to the proceeds of all such
Canadian Swingline Loans received by Canadian Agent from Canadian Swingline Lender
to be credited to the account of the applicable Canadian Borrower at Canadian
Agent’s Principal Office, or to such other account as may be designated in writing
to Canadian Agent by the Company or the applicable Canadian Borrower.




     (D) With respect to any Canadian Swingline Loans which have not been
voluntarily prepaid by the applicable Canadian Borrower pursuant to Section 2.14,
Canadian Swingline Lender may at any time in its sole and absolute discretion,
deliver to Canadian Agent (with a copy to the Company), no later than 11:00 a.m.
(Toronto time) at least one Business Day in advance of the proposed Credit Date, a
notice (which shall be deemed to be a Funding Notice given by the applicable
Canadian Borrower) requesting that each Lender holding a Canadian Revolving
Commitment make Canadian Revolving Loans that are Base Rate Loans or Canadian Dollar
Base Rate Loans, as the case may be, to the applicable Canadian Borrower on such
Credit Date in an amount equal to the amount of such Canadian Swingline Loans (the
“Refunded Canadian Swingline Loans”) outstanding on the date such notice is
given which Canadian Swingline Lender



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requests such Lenders to prepay. Promptly after receipt by Canadian Agent of
such notice, Canadian Agent shall notify each such Canadian Lender thereof.
Anything contained in this Agreement to the contrary notwithstanding, (1) the
proceeds of such Canadian Revolving Loans made by the Canadian Lenders pursuant to
this Section 2.4(b)(ii)(D) (other than Canadian Swingline Lender) shall be
immediately delivered by Canadian Agent to Canadian Swingline Lender (and not to the
applicable Canadian Borrower) and applied to repay a corresponding portion of the
Refunded Canadian Swingline Loans and (2) on the day such Canadian Revolving Loans
are made, Canadian Swingline Lender’s Pro Rata Share of the Refunded Canadian
Swingline Loans shall be deemed to be paid with the proceeds of a Canadian Revolving
Loan made by Canadian Swingline Lender to the applicable Canadian Borrower, and such
portion of the Canadian Swingline Loans deemed to be so paid shall no longer be
outstanding as Canadian Swingline Loans and shall no longer be due under the
Canadian Swingline Note of Canadian Swingline Lender but shall instead constitute
part of Canadian Swingline Lender’s outstanding Canadian Revolving Loans to the
Canadian Borrowers and shall be due under the Canadian Revolving Loan Note issued by
the Canadian Borrowers to Canadian Swingline Lender. The Canadian Borrowers hereby
authorize Canadian Agent and Canadian Swingline Lender to charge the Canadian
Borrowers’ accounts with Canadian Agent and Canadian Swingline Lender (up to the
amount available in each such account) in order to immediately pay Canadian
Swingline Lender the amount of the Refunded Canadian Swingline Loans to the extent
of the proceeds of such Canadian Revolving Loans made by Canadian Lenders, including
the Canadian Revolving Loans deemed to be made by Canadian Swingline Lender, are not
sufficient to repay in full the Refunded Canadian Swingline Loans. If any portion
of any such amount paid (or deemed to be paid) to Canadian Swingline Lender should
be recovered by or on behalf of any Canadian Borrower or the Company from Canadian
Swingline Lender in bankruptcy or restructuring, by assignment for the benefit of
creditors or otherwise, the loss of the amount so recovered shall be ratably shared
among all Canadian Lenders in the manner contemplated by Section 2.18.




     (E) If for any reason Canadian Revolving Loans are not made pursuant to Section
2.4(b)(ii)(D) in an amount sufficient to repay any amounts owed to Canadian
Swingline Lender in respect of any outstanding Canadian Swingline Loans on or before
the third Business Day after demand for payment thereof by Canadian Swingline
Lender, each Canadian Lender shall be deemed to, and hereby agrees to, have
purchased a participation in such outstanding Canadian Swingline Loans, and in an
amount equal to its Pro Rata Share of the applicable unpaid amount together with
accrued interest thereon. Upon one (1) Business Day’s notice from Canadian
Swingline Lender, each Canadian Lender shall deliver to Canadian Swingline Lender an
amount equal to its respective participation in the applicable unpaid amount in same
day funds at the Principal Office of Canadian Swingline Lender. In order to
evidence such participation each Canadian Lender agrees to enter into a
participation agreement at the request of Canadian Swingline Lender in form and
substance reasonably satisfactory to



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Canadian Swingline Lender. In the event any Canadian Lender fails to make
available to Canadian Swingline Lender the amount of such Lender’s participation as
provided in this paragraph, Canadian Swingline Lender shall be entitled to recover
such amount on demand from such Lender together with interest thereon for three (3)
Business Days at the rate customarily used by Canadian Swingline Lender for the
correction of errors among banks and thereafter at the Base Rate, as applicable.




     (F) Notwithstanding anything contained herein to the contrary, (1) each
Canadian Lender’s obligation to make Canadian Revolving Loans for the purpose of
repaying any Refunded Canadian Swingline Loans pursuant to the second preceding
paragraph and each such Lender’s obligation to purchase a participation in any
unpaid Canadian Swingline Loans pursuant to the immediately preceding paragraph
shall be absolute and unconditional and shall not be affected by any circumstance,
including without limitation (A) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against Canadian Swingline Lender, any Credit
Party or any other Person for any reason whatsoever; (B) the occurrence or
continuation of a Default or Event of Default; (C) any adverse change in the
business, results of operations, properties, assets, financial condition or
prospects of any Credit Party; (D) any breach of this Agreement or any other Credit
Document by any party thereto; or (E) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that
such obligations of each Canadian Lender are subject to the condition that Canadian
Swingline Lender believed in good faith that all conditions under Section 3.2 to the
making of the applicable Refunded Canadian Swingline Loans or other unpaid Canadian
Swingline Loans, were satisfied at the time such Refunded Canadian Swingline Loans
or unpaid Canadian Swingline Loans were made, or the satisfaction of any such
condition not satisfied had been waived by the Requisite Lenders prior to or at the
time such Refunded Canadian Swingline Loans or other unpaid Canadian Swingline Loans
were made; and (2) Canadian Swingline Lender shall not be obligated to make any
Canadian Swingline Loans (A) after the occurrence and during the continuation of a
Default or Event of Default or (B) at a time when a Funding Default exists unless
Canadian Swingline Lender has entered into arrangements reasonably satisfactory to
it and the Canadian Borrowers to eliminate Canadian Swingline Lender’s risk with
respect to the Defaulting Lender’s participation in such Canadian Swingline Loan,
including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the
outstanding Canadian Swingline Loans.




     (G) Notwithstanding anything contained herein to the contrary, Canadian
Swingline Loans in excess of C$1,500,000 in the aggregate may not be outstanding for
more than ten (10) consecutive days. To the extent a Canadian Swingline Loan in
excess of C$1,500,000 in the aggregate has not been voluntarily prepaid by the
Borrowers pursuant to Section 2.14 within ten (10) days of the making of such
Canadian Swingline Loan by Canadian Swingline Lender, then Canadian Swingline Lender
shall request Canadian Lenders make



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Canadian Revolving Loans pursuant to Section 2.4(b)(ii)(D). The amount of any
such Canadian Swingline Loans prepaid or repaid pursuant to Section 2.4(b)(ii)(D)
may not be reborrowed for a period of three (3) days. Nothing in this clause (G)
shall be construed to impose any additional obligations, except the obligation to
request Canadian Revolving Loans pursuant to the immediately preceding sentence, on
the Canadian Swingline Lender other than those obligations otherwise set forth in
this Agreement.



     Section 2.5 Issuance of Letters of Credit and Purchase of Participations Therein.



     (a) Letters of Credit. During the period from the Closing Date until the thirtieth
(30th) day before the end of the Revolving Commitment Period, subject to the terms and
conditions hereof, Issuing Bank agrees to issue Letters of Credit for the account of the Company
(or for the account of any of its Subsidiaries so long as the Company is a co-applicant) in the
aggregate amount up to but not exceeding the Letter of Credit Sublimit; provided, (i) each
Letter of Credit shall be denominated in U.S. Dollars or Canadian Dollars; (ii) the stated amount
of each Letter of Credit shall be in an amount as is reasonably acceptable to Issuing Bank; (iii)
after giving effect to such issuance, in no event shall the Total Utilization of U.S. Revolving
Commitments exceed the U.S. Revolving Commitments then in effect; (iv) after giving effect to such
issuance, in no event shall the Letter of Credit Usage exceed the Letter of Credit Sublimit then in
effect; (v) in no event shall any standby Letter of Credit have an expiration date later than the
earlier of (1) the tenth (10th) Business Day prior to the Revolving Commitment
Termination Date and (2) the date which is one year from the date of issuance of such standby
Letter of Credit; (vi) in no event shall any commercial Letter of Credit have an expiration date
later than the earlier of (1) the thirtieth (30th) day prior to the Revolving Loan
Commitment Termination Date and (2) the date which is one hundred eighty (180) days from the date
of issuance of such commercial Letter of Credit, (vii) in no event shall any Letter of Credit be
issued if such Letter of Credit is otherwise unacceptable to Issuing Bank in its reasonable
discretion and (viii) all such Letters of Credit shall provide for sight drawings. Subject to the
foregoing, Issuing Bank may agree that a standby Letter of Credit will automatically be extended
for one or more successive periods not to exceed one year each, unless Issuing Bank elects not to
extend for any such additional period; provided, Issuing Bank shall not extend any such
Letter of Credit if it has received written notice that an Event of Default has occurred and is
continuing at the time Issuing Bank must elect to allow such extension; provided,
further, in the event a Funding Default exists, Issuing Bank shall not be required to issue
any Letter of Credit unless Issuing Bank has entered into arrangements satisfactory to it, the
Administrative Agent and the Company to eliminate Issuing Bank’s risk with respect to the
participation in Letters of Credit of the Defaulting Lender, including by cash collateralizing such
Defaulting Lender’s Pro Rata Share of the Letter of Credit Usage.



     (b) Notice of Issuance. Whenever the Company desires the issuance of a Letter of
Credit, it shall deliver to Administrative Agent (with a copy to the Issuing Bank) an Issuance
Notice no later than 1:00 p.m. (New York City time) at least three Business Days (in the case of
standby letters of credit) or three Business Days (in the case of commercial letters of credit) or
in each case such shorter period as may be agreed to by Issuing Bank in any particular instance, in
advance of the proposed date of issuance. Upon satisfaction or waiver of the conditions set forth



59









 




in Section 3.2, Issuing Bank shall issue the requested Letter of Credit only in accordance
with Issuing Bank’s standard operating procedures. Promptly after the issuance or amendment of a
standby Letter of Credit, the Issuing Bank shall notify the Company and the Administrative Agent,
in writing, of such issuance or amendment and such notice shall be accompanied by a copy of such
issuance or amendment. Upon receipt of such notice, the Administrative Agent shall promptly notify
each Lender, in writing, of such issuance or amendment and if so requested by a Lender, the
Administrative Agent shall furnish such Lender with a copy of such issuance or amendment. With
regards to commercial Letters of Credit, the Issuing Bank shall furnish the Administrative Agent,
by facsimile, on the first Business Day of each week with a report detailing the daily aggregate
commercial Letter of Credit outstanding for the previous week. In the event of any conflict
between the terms of a Letter of Credit or Letter of Credit application and this Agreement, the
terms of this Agreement shall govern and control.




     (c) Responsibility of Issuing Bank With Respect to Requests for Drawings and Payments.
In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof,
Issuing Bank shall be responsible only to examine the documents delivered under such Letter of
Credit with reasonable care so as to ascertain whether they appear on their face to be in
accordance with the terms and conditions of such Letter of Credit. As between the Company and
Issuing Bank, the Company assumes all risks of the acts and omissions of, or misuse of the Letters
of Credit issued by Issuing Bank, by the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, Issuing Bank shall not be responsible for: (i)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any such Letter of Credit, even if
it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit so long as such conditions are complied with
in all material respects; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit
of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of Issuing Bank, including any Governmental Acts; none of the above shall
affect or impair, or prevent the vesting of, any of Issuing Bank’s rights or powers hereunder.
Without limiting the foregoing and in furtherance thereof, any action taken or omitted by Issuing
Bank under or in connection with the Letters of Credit or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not give rise to any liability on the part of
Issuing Bank to the Company. Notwithstanding anything to the contrary contained in this Section
2.5(c), the Company shall retain any and all rights it may have against Issuing Bank for any
liability arising solely out of the gross negligence or willful misconduct of Issuing Bank or from
honoring a Letter of Credit that does not substantially comply with the conditions to draw on such
Letter of Credit under the relevant documents entered into between the Company and the Issuing Bank
relating thereto.



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     (d) Reimbursement by the Company of Amounts Drawn or Paid Under Letters of Credit. In
the event Issuing Bank has determined to honor a drawing under a Letter of Credit, it shall
immediately notify the Company and Administrative Agent, and the Company shall reimburse Issuing
Bank on or before the Business Day immediately following the date on which such drawing is honored
(the “Reimbursement Date”) in an amount in U.S. Dollars and in same day funds equal to the
amount of such honored drawing; provided, anything contained herein to the contrary
notwithstanding, (i) unless the Company shall have notified Administrative Agent and Issuing Bank
prior to 11:00 a.m. (New York City time) on the date such drawing is honored that the Company
intends to reimburse Issuing Bank for the amount of such honored drawing with funds other than the
proceeds of U.S. Revolving Loans, the Company shall be deemed to have given a timely Funding Notice
to Administrative Agent requesting Lenders having a U.S. Revolving Commitment to make U.S.
Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount in U.S. Dollars
equal to the amount of such honored drawing (and Administrative Agent shall promptly notify each
such Lender having a U.S. Revolving Commitment of such deemed request), and (ii) subject to
satisfaction or waiver of the conditions specified in Section 3.2, Lenders shall, on the
Reimbursement Date, make U.S. Revolving Loans that are Base Rate Loans in the amount of such
honored drawing, the proceeds of which shall be applied directly by Administrative Agent to
reimburse Issuing Bank for the amount of such honored drawing; and provided
further, if for any reason proceeds of U.S. Revolving Loans are not received by Issuing
Bank on the Reimbursement Date in an amount equal to the amount of such honored drawing, the
Company shall reimburse Issuing Bank, on demand, in an amount in same day funds equal to the excess
of the amount of such honored drawing over the aggregate amount of such U.S. Revolving Loans, if
any, which are so received. Nothing in this Section 2.5(d) shall be deemed to relieve any Lender
having a U.S. Revolving Commitment from its obligation to make U.S. Revolving Loans on the terms
and conditions set forth herein, and the Company shall retain any and all rights it may have
against any such Lender resulting from the failure of such Lender to make such U.S. Revolving Loans
under this Section 2.5(d).



     (e) Lenders’ Purchase of Participations in Letters of Credit. Immediately upon the
issuance of each Letter of Credit, each Lender having a U.S. Revolving Commitment shall be deemed
to have purchased, and hereby agrees to irrevocably purchase, from Issuing Bank a participation in
such Letter of Credit and any drawings honored thereunder in an amount equal to such Lender’s Pro
Rata Share (with respect to the U.S. Revolving Commitments) of the maximum amount which is or at
any time may become available to be drawn thereunder. In the event that the Company shall fail for
any reason to reimburse Issuing Bank as provided in Section 2.5(d), Issuing Bank shall promptly
notify each Lender having a U.S. Revolving Commitment of the unreimbursed amount of such honored
drawing and of such Lender’s respective participation therein based on such Lender’s Pro Rata Share
of the U.S. Revolving Commitments. Each Lender having a U.S. Revolving Commitment shall make
available to Issuing Bank an amount equal to its respective participation, in U.S. Dollars and in
same day funds, at the office of Issuing Bank specified in such notice, not later than 12:00 p.m.
(New York City time) on the first Business Day (under the laws of the jurisdiction in which such
office of Issuing Bank is located which is also a Business Day in New York City) after the date
notified by Issuing Bank. In the event that any Lender having a U.S. Revolving Commitment fails to
make available to Issuing Bank on such business day the amount of such Lender’s participation



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in such Letter of Credit as provided in this Section 2.5(e), Issuing Bank shall be entitled to
recover such amount on demand from such Lender together with interest thereon for three Business
Days at the rate customarily used by Issuing Bank for the correction of errors among banks and
thereafter at the Base Rate. Nothing in this Section 2.5(e) shall be deemed to prejudice the right
of any Lender having a U.S. Revolving Commitment to recover from Issuing Bank any amounts made
available by such Lender to Issuing Bank pursuant to this Section in the event that it is
determined that the payment with respect to a Letter of Credit in respect of which payment was made
by such Lender constituted gross negligence or willful misconduct on the part of Issuing Bank. In
the event Issuing Bank shall have been reimbursed by other Lenders pursuant to this Section 2.5(e)
for all or any portion of any drawing honored by Issuing Bank under a Letter of Credit, such
Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under this
Section 2.5(e) with respect to such honored drawing such Lender’s Pro Rata Share of all payments
subsequently received by Issuing Bank from the Company in reimbursement of such honored drawing
when such payments are received. Any such distribution shall be made to a Lender having a U.S.
Revolving Commitment at its primary address set forth below its name on Appendix A or at such other
address as such Lender may request.




     (f) Obligations Absolute. The obligation of the Company to reimburse Issuing Bank for
drawings honored under the Letters of Credit issued by it and to repay any U.S. Revolving Loans
made by Lenders pursuant to Section 2.5(d) and the obligations of Lenders under Section 2.5(e)
shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms
hereof under all circumstances including any of the following circumstances: (i) any lack of
validity or enforceability of any Letter of Credit; (ii) the existence of any claim, set-off,
defense or other right which the Company or any Lender may have at any time against a beneficiary
or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be
acting), Issuing Bank, Lender or any other Person or, in the case of a Lender, against the Company,
whether in connection herewith, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between the Company or one of its Subsidiaries and the
beneficiary for which any Letter of Credit was procured); (iii) any draft or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by
Issuing Bank under any Letter of Credit against presentation of a draft or other document which
does not substantially comply with the terms of such Letter of Credit; (v) any adverse change in
the business, results of operations, properties, assets, financial condition or prospects of
Holdings or any of its Subsidiaries; (vi) any breach hereof or any other Credit Document by any
party thereto; (vii) any other circumstance or happening whatsoever, whether or not similar to any
of the foregoing; or (viii) the fact that an Event of Default or a Default shall have occurred and
be continuing; provided, in each case, that payment by Issuing Bank under the applicable
Letter of Credit shall not have constituted gross negligence or willful misconduct of Issuing Bank
under the circumstances in question.



     (g) Indemnification. Without duplication of any obligation of the Company under
Section 10.2 or 10.3, in addition to amounts payable as provided herein, the Company hereby agrees
to protect, indemnify, pay and save harmless Issuing Bank from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including reasonable



62









 




fees, expenses and disbursements of counsel and allocated costs of internal counsel) which
Issuing Bank may incur or be subject to as a consequence, direct or indirect, of (i) the issuance
of any Letter of Credit by Issuing Bank, other than as a result of (1) the gross negligence or
willful misconduct of Issuing Bank or (2) the wrongful dishonor by Issuing Bank of a proper demand
for payment made under any Letter of Credit issued by it, or (ii) the failure of Issuing Bank to
honor a drawing under any such Letter of Credit as a result of any Governmental Act.




     Section 2.6 Pro Rata Shares; Availability of Funds.



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



     (b) Availability of Funds. Unless Administrative Agent or Canadian Agent shall have
been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to
make available to Administrative Agent or Canadian Agent, as the case may be, the amount of such
Lender’s Loan requested on such Credit Date, Administrative Agent or Canadian Agent may assume that
such Lender has made such amount available to Administrative Agent or Canadian Agent on such Credit
Date and Administrative Agent or Canadian Agent may, in its respective sole discretion, but shall
not be obligated to, make available to the Company or a Borrower a corresponding amount on such
Credit Date; provided that only Canadian Agent shall make amounts available to a Canadian
Borrower. If such corresponding amount is not in fact made available to Administrative Agent or
Canadian Agent by such Lender, Administrative Agent or Canadian Agent shall be entitled to recover
such corresponding amount on demand from such Lender together with interest thereon, for each day
from such Credit Date until the date such amount is paid to Administrative Agent or Canadian Agent,
at the customary rate set by Administrative Agent or Canadian Agent for the correction of errors
among banks for three Business Days and thereafter at the Base Rate. If such Lender does not pay
such corresponding amount forthwith upon Administrative Agent’s or Canadian Agent’s demand
therefor, Administrative Agent or Canadian Agent shall promptly notify the Company or the
applicable Borrower and the Company or the applicable Borrower shall immediately pay such
corresponding amount to Administrative Agent or Canadian Agent together with interest thereon, for
each day from such Credit Date until the date such amount is paid to Administrative Agent or



63









 




Canadian Agent, at the rate payable hereunder for Base Rate Loans for such Class of Loans.
Nothing in this Section 2.6(b) shall be deemed to relieve any Lender from its obligation to fulfill
its Term Loan Commitments and Revolving Commitments hereunder or to prejudice any rights that the
Company or the Borrowers may have against any Lender as a result of any default by such Lender
hereunder.




     Section 2.7 Use of Proceeds.



     The proceeds of the Tranche B Term Loans, and up to $25,000,000 of U.S. Revolving Loans, shall
be applied by the Company to fund in part, the Easton Acquisition, the repayment of the Existing
Indebtedness, and the payment of fees and expenses in connection with the foregoing and as required
by the Credit Documents. Letters of Credit may also be issued on the Closing Date to backstop
Existing Letters of Credit. The proceeds of the Revolving Loans, Swingline Loans and Letters of
Credit made after the Closing Date shall be applied by the Company or the Borrowers for working
capital and general corporate purposes of Holdings and its Subsidiaries, including Permitted
Acquisitions and permitted capital expenditures. No portion of the proceeds of any Credit
Extension shall be used in any manner that causes or might cause such Credit Extension or the
application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation thereof or to violate the Exchange
Act.



     Section 2.8 Evidence of Debt; Register; Lenders’ Books and Records; Notes.



     (a) Lenders’ Evidence of Debt. Each Lender shall maintain on its internal records an
account or accounts evidencing the Obligations of the applicable Borrowers to such Lender,
including the amounts of the Loans made by it and each repayment and prepayment in respect thereof.
Any such recordation shall be conclusive and binding on the Borrowers, absent manifest error;
provided, that the failure to make any such recordation, or any error in such recordation,
shall not affect any Lender’s Revolving Commitments or the Borrowers’ Obligations in respect of any
applicable Loans; and provided further, in the event of any inconsistency between
the Register and any Lender’s records, the recordations in the Register shall govern.



     (b) Register. Administrative Agent and Canadian Agent shall maintain at their
respective Principal Offices a register for the recordation of the names and addresses of Lenders
and the Revolving Commitments and Loans of each Lender from time to time (the “Register”).
The Register shall be available for inspection by the Company, the Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior notice. Administrative Agent and
Canadian Agent shall record in the Register the Revolving Commitments and the Loans, and each
repayment or prepayment in respect of the principal amount of the Loans, and any such recordation
shall be conclusive and binding on the Company, the Borrowers and each Lender, absent manifest
error; provided, failure to make any such recordation, or any error in such recordation,
shall not affect any Lender’s Revolving Commitments or the Company’s or Borrowers’ Obligations in
respect of any Loan. The Company hereby designates Wachovia to serve as the Company’s agent and
the Canadian Borrowers hereby designate the Canadian Agent to serve as the Canadian Borrowers’
agent, in each case, solely for purposes of maintaining the Register as provided in this Section
2.8, and the Company and the Canadian Borrowers hereby



64









 




agree that, to the extent Wachovia and Canadian Agent serve in such capacities, Wachovia,
Canadian Agent and each of their officers, directors, employees, agents and affiliates shall
constitute “Indemnitees.”




     (c) Notes. If so requested by any Lender by written notice to the Company or a
Borrower (with a copy to Administrative Agent) at least two (2) Business Days prior to the Closing
Date, or at any time thereafter, the applicable Borrower shall execute and deliver to such Lender
(and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such
Lender pursuant to Section 10.6) on the Closing Date (or, if such notice is delivered after the
Closing Date, promptly after the applicable Borrower’s receipt of such notice) a Note or Notes to
evidence such Lender’s Tranche B Term Loan, New Loan, Revolving Loan, Canadian Revolving Loan,
Swingline Loan or Canadian Swingline Loan, as the case may be.



     Section 2.9 Interest on Loans.



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



          (i) in the case of U.S. Revolving Loans:





	 	(A)	 	if a Base Rate Loan, at the Base Rate
plus the Applicable Margin; or
	 
	 	(B)	 	if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus the Applicable Margin;





          (ii) Canadian Revolving Loans shall bear interest as follows:





     (A) U.S. Dollar Canadian Base Rate Loans. During such periods as
Canadian Revolving Loans shall be comprised of U.S. Dollar Canadian Base Rate Loans,
each such U.S. Dollar Canadian Base Rate Loan shall bear interest at a per annum
rate equal to the sum of the Base Rate plus the Applicable Margin;




     (B) Canadian Dollar Base Rate Loans. During such periods as Canadian
Revolving Loans shall be comprised of Canadian Dollar Base Rate Loans, each such
Canadian Dollar Base Rate Loan shall bear interest at a per annum rate equal to the
sum of the Canadian Base Rate plus the Applicable Margin;




     (C) Eurodollar Rate Loans. During such periods as Canadian Revolving
Loans shall be comprised of Eurodollar Rate Loans, each such Eurodollar Rate Loan
shall bear interest at a per annum rate equal to the sum of the Eurodollar Rate
plus the Applicable Margin; and



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     (D) Bankers’ Acceptance Advances. During such periods as Canadian
Revolving Loans shall be comprised of Bankers’ Acceptance Advances, each such
Bankers’ Acceptance Advance shall bear interest at a per annum rate equal to the BA
Rate plus the Applicable Margin in accordance with Section 2.3(c);




	 	(iii)	 	in the case of U.S. Swingline Loans, at the Base Rate
plus the Applicable Margin;
	 
	 	(iv)	 	in the case of Canadian Swingline Loans, Canadian Swingline
Loans that are denominated in (A) U.S. Dollars shall bear interest at a per
annum rate equal to the Base Rate plus the Applicable Margin for Base
Rate Loans and (B) Canadian Dollars shall bear interest, at the Canadian Base
Rate plus Applicable Margin for Base Rate Loans; and
	 
	 	(v)	 	in the case of Tranche B Term Loans:






	 	(A)	 	if a Base Rate Loan, at the Base Rate
plus the Applicable Margin; or
	 
	 	(B)	 	if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus the Applicable Margin;





     (b) The basis for determining the rate of interest with respect to any Loan (except a U.S.
Swingline Loan which can be made and maintained as Base Rate Loans), and the Interest Period with
respect to any Eurodollar Rate Loan, shall be selected by the Company and notified to
Administrative Agent and Lenders pursuant to the applicable Funding Notice or
Conversion/Continuation Notice, as the case may be; provided, (i) the Term Loans initially
shall be made as Base Rate Loans until the earlier of (x) the date which is fifteen (15) days
following the Closing Date or such earlier date otherwise agreed by the Administrative Agent and
(y) the date upon which the primary syndication of the Loans and Revolving Commitments as
determined by the Administrative Agent has been completed and (ii) until the date that
Administrative Agent notifies the Company that the primary syndication of the Loans and Revolving
Commitments has been completed, as determined by Administrative Agent, the Term Loans shall be
maintained as either (1) Eurodollar Rate Loans having an Interest Period of no longer than one
month or (2) Base Rate Loans. If on any day a Loan is outstanding with respect to which a Funding
Notice or Conversion/Continuation Notice has not been delivered to Administrative Agent in
accordance with the terms hereof specifying the applicable basis for determining the rate of
interest, then for that day such Loan shall be a Base Rate Loan.



     (c) In connection with Eurodollar Rate Loans there shall be no more than twelve (12) Interest
Periods outstanding at any time. With respect to a U.S. Revolving Loan, in the event the Company
fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the applicable Funding
Notice or Conversion/Continuation Notice, such Loan (if outstanding as a Eurodollar Rate Loan) will
be automatically converted into a Base Rate Loan on the last day of the then-current Interest
Period for such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan). In the event the Company fails



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to specify an Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice or
Conversion/Continuation Notice, the Company shall be deemed to have selected an Interest Period of
one (1) month. With respect to a Canadian Revolving Loan, in the event the applicable Canadian
Borrower fails to specify between a Canadian Dollar Base Rate Loan, a U.S. Base Rate Loan or a
Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such Loan
(if outstanding as a Eurodollar Rate Loan) will be automatically converted into a U.S. Base Rate
Loan on the last day of the then-current Interest Period for such Loan (or if outstanding as a U.S.
Base Rate Loan will remain as, or (if not then outstanding) will be made as, a U.S. Base Rate
Loan). In the event the Company or the Canadian Borrower fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, the
Company or the Canadian Borrower shall be deemed to have selected an Interest Period of one (1)
month. As soon as practicable after 10:00 a.m. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the
applicable Interest Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to the Company, the applicable Borrower and each Lender.




     (d) Interest payable pursuant to Section 2.9(a) shall be computed (i) in the case of Base Rate
Loans, U.S. Dollar Canadian Base Rate Loans and Canadian Dollar Base Rate Loans on the basis of a
365-day or 366-day year, as the case may be, (ii) in the case of Eurodollar Rate Loans, on the
basis of a 360-day year, in each case for the actual number of days elapsed in the period during
which it accrues. In computing interest on any Loan, the date of the making of such Loan or the
first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan, U.S.
Dollar Canadian Base Rate Loans or Canadian Dollar Base Rate Loans being converted from a
Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan
U.S. Dollar Canadian Base Rate Loans or Canadian Dollar Base Rate Loans, as the case may be, shall
be included, and the date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan U.S. Dollar Canadian Base Rate Loans
or Canadian Dollar Base Rate Loans being converted to a Eurodollar Rate Loan, the date of
conversion of such Base Rate Loan U.S. Dollar Canadian Base Rate Loans or Canadian Dollar Base Rate
Loans to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided, if a
Loan is repaid on the same day on which it is made, one (1) day’s interest shall be paid on that
Loan.



     (e) Except as otherwise set forth herein, interest on each Loan shall be payable in arrears on
and to (i) each Interest Payment Date applicable to that Loan; (ii) upon any prepayment of that
Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii)
at maturity, including final maturity; provided, however, with respect to any voluntary
prepayment of a Base Rate Loan U.S. Dollar Canadian Base Rate Loans or Canadian Dollar Base Rate
Loans, accrued interest shall instead be payable on the applicable Interest Payment Date.



     (f) The Company agrees to pay to Issuing Bank, with respect to drawings honored under any
Letter of Credit, interest on the amount paid by Issuing Bank in respect of each such



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honored drawing from the date such drawing is honored to but excluding the date such amount is
reimbursed by or on behalf of the Company at a rate equal to (i) for the period from the date such
drawing is honored to but excluding the applicable Reimbursement Date, the rate of interest
otherwise payable hereunder with respect to Revolving Loans that are Base Rate Loans, and (ii)
thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable
hereunder with respect to Revolving Loans that are Base Rate Loans.




     (g) Interest payable pursuant to Section 2.9(f) shall be computed on the basis of a
365/366-day year for the actual number of days elapsed in the period during which it accrues, and
shall be payable on demand or, if no demand is made, on the date on which the related drawing under
a Letter of Credit is reimbursed in full. Promptly upon receipt by Issuing Bank of any payment of
interest pursuant to Section 2.9(f), Issuing Bank shall distribute to each U.S. Lender, out of the
interest received by Issuing Bank in respect of the period from the date such drawing is honored to
but excluding the date on which Issuing Bank is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of any U.S. Revolving Loans), the amount that
such U.S. Lender would have been entitled to receive in respect of the letter of credit fee that
would have been payable in respect of such Letter of Credit for such period if no drawing had been
honored under such Letter of Credit. In the event Issuing Bank shall have been reimbursed by U.S.
Lenders for all or any portion of such honored drawing, Issuing Bank shall distribute to each U.S.
Lender which has paid all amounts payable by it under Section 2.5(e) with respect to such honored
drawing such U.S. Lender’s Pro Rata Share of any interest received by Issuing Bank in respect of
that portion of such honored drawing so reimbursed by Lenders for the period from the date on which
Issuing Bank was so reimbursed by U.S. Lenders to but excluding the date on which such portion of
such honored drawing is reimbursed by the Company.



     (h) Interest Act (Canada). Each Borrower hereby acknowledges that the rate or rates
of interest applicable to certain of the Loans and fees as specified hereunder may be computed on
the basis of a year of 360 days and paid for the actual number of days elapsed. For purposes of
the Interest Act (Canada), if interest computed on the basis of a 360-day year is payable for any
part of the calendar year, the equivalent yearly rate of interest may be determined by multiplying
the specified rate of interest by the number of days (365 or 366) in such calendar year and
dividing such product by 360. For the purpose of the Interest Act (Canada) and any other purpose,
(i) the principle of deemed reinvestment shall not apply to any interest calculation under this
Agreement, and (ii) the rates of interest stipulated in this Agreement are intended to be nominal
rates and not effective rates or yields.



     (i) Notwithstanding any other provisions of this Agreement, if the amount of any interest,
premium, fees or other monies or any rate of interest stipulated for, taken, reserved or extracted
under this Agreement or the Collateral Documents would otherwise contravene the provisions of
section 347 of the Criminal Code (Canada), section 8 of the Interest Act (Canada) or any successor
or similar legislation, or would exceed the amounts which any Lender is legally entitled to charge
and receive under any law to which such compensation is subject, then such amount or rate of
interest shall be reduced to such maximum amount as would not contravene such provision; and to the
extent that any excess has been charged or received such Lender shall



68









 




apply such excess, as applicable, against the outstanding Canadian Revolving Loans and
Canadian Swingline Loans and refund any further excess amount.




     Section 2.10 Conversion/Continuation.



     (a) Subject to Section 2.19, the Company shall have the option:




     (i) in the case of U.S. Revolving Loans and the Term Loan, to elect from time to time
to convert Base Rate Loans to Eurodollar Rate Loans, by giving the Administrative Agent at
least three (3) Business Days’ prior irrevocable written notice of such election. If the
date upon which a Base Rate Loan is to be converted to a Eurodollar Rate Loan is not a
Business Day, then such conversion shall be made on the next succeeding Business Day and
during the period from such last day of an Interest Period to such succeeding Business Day
such Loan shall bear interest as if it were an Base Rate Loan. All or any part of
outstanding Base Rate Loans may be converted as provided herein, provided that (i)
no Loan may be converted into a Eurodollar Rate Loan when any Default or Event of Default
has occurred and is continuing and (ii) partial conversions shall be in an aggregate
principal amount of $1,000,000 or a whole multiple amount of $100,000 in excess thereof.




     (ii) The Canadian Borrowers may, in the case of Canadian Revolving Loans, elect from
time to time to convert (i) U.S. Dollar Canadian Base Rate Loans or Canadian Dollar Base
Rate Loans to Eurodollar Rate Loans or (ii) Canadian Dollar Base Rate Loans to Bankers’
Acceptance Advances, by giving Canadian Agent at least two (2) Business Days’ prior
irrevocable written notice of such election. If the date upon which a U.S. Dollar Canadian
Base Rate Loan or a Canadian Dollar Base Rate Loan is to be converted to a Eurodollar Rate
Loan or Bankers’ Acceptance Advance is not a Business Day, then such conversion shall be
made on the next succeeding Business Day and during the period from such last day of an
Interest Period or BA Period, as the case may be, to such succeeding Business Day such Loan
shall bear interest as if it were a U.S. Dollar Canadian Base Rate Loan or Canadian Dollar
Base Rate Loan, as applicable. All or any part of outstanding U.S. Dollar Canadian Base
Rate Loans and Canadian Dollar Base Rate Loans may be converted as provided herein, provided
that (i) no Loan may be converted into a Eurodollar Rate Loan or Bankers’ Acceptance Advance
when any Default or Event of Default has occurred and is continuing and (ii) partial
conversions shall be in an aggregate principal amount of $1,000,000 or a whole multiple
amount of $100,000 in excess thereof.




     (iii) Any Eurodollar Rate Loan or Bankers’ Acceptance Advance may be continued as such
upon the expiration of an Interest Period or the BA Period (and the succeeding BA Period of
that continued Bankers’ Acceptance Advance shall commence on the first day after the last
day of the BA Period of the Bankers’ Acceptance Advance to be continued), as applicable with
respect thereto by compliance by the applicable Borrower with the notice provisions
contained in Section 2.10(a)(i); provided, that no Eurodollar Rate Loan or Bankers’
Acceptance Advance may be continued as such when any Default or Event of Default has
occurred and is continuing, in which case such



69









 






Eurodollar Rate Loan or Bankers’ Acceptance Advance shall (x) in the case of the
Eurodollar Rate Loan, to the extent borrowed by the Company, be automatically converted to a
Base Rate Loan at the end of the applicable Interest Period with respect thereto; (y) in the
case of the Eurodollar Rate Loan, to the extent borrowed by the Canadian Borrowers shall be
automatically converted to U.S. Dollar Canadian Base Rate Loans at the end of the applicable
Interest Period with respect thereto and (z) in the case of a Bankers’ Acceptance Advance,
shall be automatically converted to a Canadian Dollar Base Rate Loan. If a Borrower shall
fail to give timely notice of an election to continue a Eurodollar Rate Loan, or the
continuation of Eurodollar Rate Loans is not permitted hereunder, such Eurodollar Rate Loans
shall (x) to the extent borrowed by the Company, be automatically converted to a Base Rate
Loan at the end of the applicable Interest Period with respect thereto and (y) to the extent
borrowed by the Canadian Borrowers shall be automatically converted to U.S. Dollar Canadian
Base Rate Loans at the end of the applicable Interest Period with respect thereto.



     (b) The Company or any Borrower shall deliver a Conversion/Continuation Notice to
Administrative Agent or Canadian Agent, as applicable, no later than 1:00 p.m. (New York City or
Toronto time, as applicable) at least one (1) Business Day in advance of the proposed conversion
date (in the case of a conversion to a Base Rate Loan, Canadian Dollar Base Rate Loan or U.S.
Dollar Canadian Base Rate Loan) and at least three (3) Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar
Rate Loan). Except as otherwise provided herein, a Conversion/Continuation Notice for conversion
to, or continuation of, any Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and the Company or any such
Borrower shall be bound to effect a conversion or continuation in accordance therewith.



     Section 2.11 Default Interest.



     The principal amount of all Loans not paid when due and, to the extent permitted by applicable
law, any interest payments on the Loans or any fees or other amounts owed hereunder not paid when
due, shall thereafter bear interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable hereunder with respect to the applicable
Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the highest interest rate otherwise then payable hereunder for Base Rate Loans);
provided, in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective such Eurodollar Rate Loans
shall thereupon become Base Rate Loans and shall thereafter bear interest payable upon demand at a
rate which is 2% per annum in excess of the highest interest rate otherwise then payable hereunder
for Base Rate Loans. Payment or acceptance of the increased rates of interest provided for in this
Section 2.11 is not a permitted alternative to timely payment and shall not constitute a waiver of
any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent
or any Lender.




70










 







     Section 2.12Fees.



     (a) The Company agrees to pay to Lenders having Revolving Exposure:




     (i) commitment fees equal to (1) the average of the daily difference between (a) the
U.S. Revolving Commitments, and (b) the sum of (x) the aggregate principal amount of
outstanding U.S. Revolving Loans (but not any outstanding U.S. Swingline Loans) plus (y) the
Letter of Credit Usage, times (2) the applicable Commitment Fee Percentage;




     (ii) commitment fees equal to (1) the average of the daily difference between (a) the
Canadian Revolving Commitments, and (b) the aggregate principal amount of outstanding
Canadian Revolving Loans (but not any outstanding Canadian Swingline Loans), times (2) the
applicable Commitment Fee Percentage; and




     (iii) letter of credit fees equal to (1) the Applicable Margin for Revolving Loans that
are Eurodollar Rate Loans, times (2) the aggregate daily maximum amount available to be
drawn under all such Letters of Credit (regardless of whether any conditions for drawing
could then be met and determined as of the close of business on any date of determination).


All fees referred to in this Section 2.12(a) shall be paid to Administrative Agent at its Principal
Office and upon receipt, Administrative Agent shall promptly distribute to each Lender its Pro Rata
Share thereof.




     (b) The Company agrees to pay directly to Issuing Bank, for its own account, the following
fees:




     (i) a fronting fee equal to 0.125%, per annum, times the aggregate daily maximum amount
available to be drawn under all Letters of Credit outstanding (determined as of the close of
business on any date of determination); and




     (ii) such documentary and processing charges for any issuance, amendment, transfer or
payment of a Letter of Credit as are in accordance with Issuing Bank’s standard schedule for
such charges and as in effect at the time of such issuance, amendment, transfer or payment,
as the case may be.



     (c) All fees referred to in Section 2.12(a) and 2.12(b)(i) shall be calculated on the basis of
a 360-day year and the actual number of days elapsed and shall be payable quarterly in arrears on
each of the dates specified in Section 2.13(a) for payment of principal during the Revolving
Commitment Period, commencing on the first such date to occur after the Closing Date, and on the
Revolving Commitment Termination Date.



     (d) In addition to any of the foregoing fees, the Company agrees to pay to Agents such other
fees in the amounts and at the times separately agreed upon.



71









 





     Section 2.13 Scheduled Payments/Commitment Reductions.



     (a) Scheduled Installments. The principal amounts of the Tranche B Term Loans shall
be repaid in consecutive quarterly installments (each, an “Installment”) in the aggregate
amounts set forth below on the Business Day immediately following the last day of each Fiscal
Quarter (each, an “Installment Date”), commencing June 30, 2006:



	 	 	 
	Fiscal Quarter	 	Tranche B Term Loan Installments
	June 30, 2006
	 	$837,500
	September 30, 2006
	 	$837,500
	December 31, 2006
	 	$837,500
	March 31, 2007
	 	$837,500
	June 30, 2007
	 	$837,500
	September 30, 2007
	 	$837,500
	December 31, 2007
	 	$837,500
	March 31, 2008
	 	$837,500
	June 30, 2008
	 	$837,500
	September 30, 2008
	 	$837,500
	December 31, 2008
	 	$837,500
	March 31, 2009
	 	$837,500
	June 30, 2009
	 	$837,500
	September 30, 2009
	 	$837,500
	December 31, 2009
	 	$837,500
	March 31, 2010
	 	$837,500
	June 30, 2010
	 	$837,500
	September 30, 2010
	 	$837,500
	December 31, 2010
	 	$837,500
	March 31, 2011
	 	$837,500
	June 30, 2011
	 	$837,500
	September 30, 2011
	 	$837,500
	December 31, 2011
	 	$837,500
	Tranche B Term Loan Maturity Date
	 	$315,737,500 or the then outstanding principal amount





; provided, in the event any New Loans that are term loans are made, such New Loans
shall be repaid on each Installment Date occurring on or after the applicable Increased Amount Date
in an amount equal to (i) the aggregate principal amount of New Loans of the applicable Series of
New Loans, times (ii) the ratio (expressed as a percentage) of (y) the amount of all other Term
Loans being repaid on such Installment Date and (z) the total aggregate principal amount of all
other Term Loans outstanding on such Increased Amount Date.



Notwithstanding the foregoing, (x) such Installments shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Term Loans, in accordance with Sections 2.14,
2.15 and 2.16, as applicable; and (y) the Tranche B Term Loans, together with all other amounts
owed hereunder with respect thereto, shall, in any event, be paid in full no later than the Tranche
B Term Loan Maturity Date.




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     (b) Revolving Loans shall be paid in full on the Revolving Commitment Termination Date.



     Section 2.14 Voluntary Prepayments/Commitment Reductions.



     (a) Voluntary Prepayments.



          (i) Any time and from time to time:





     (A) with respect to Base Rate Loans (other than U.S. Swingline Loans), the
Company may prepay any such Loans on any Business Day in whole or in part, in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 in excess of
that amount;




     (B) with respect to U.S. Dollar Canadian Base Rate Loans (other than Canadian
Swingline Loans), the Borrowers may prepay any such Loans on any Business Day in
whole or in part, in an aggregate minimum amount of $500,000 and integral multiples
of $100,000 in excess of that amount;




     (C) with respect to Canadian Dollar Base Rate Loans (other than Canadian
Swingline Loans), the Borrowers may prepay any such Loans on any Business Day in
whole or in part, in an aggregate minimum amount of C$500,000 and integral multiples
of C$100,000 in excess of that amount;




     (D) with respect to Eurodollar Rate Loans, the Company and/or the Borrowers may
prepay any such Loans on any Business Day in whole or in part in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000 in excess of that
amount;




     (E) with respect to U.S. Swingline Loans, the Company may prepay any such Loans
on any Business Day in whole or in part in an aggregate minimum amount of $100,000,
and in integral multiples of $25,000 in excess of that amount; and




     (F) with respect to Canadian Swingline Loans, the Borrowers may prepay any such
Loans on any Business Day in whole or in part (1) with respect to Canadian Swingline
Loans consisting of U.S. Dollar Canadian Base Rate Loans, in an aggregate minimum
amount of $100,000, and in integral multiples of $25,000 in excess of that amount
and (2) with respect to Canadian Swingline Loans consisting of Canadian Dollar
Canadian Base Rate Loans, in an aggregate minimum amount of C$100,000, and in
integral multiples of C$25,000 in excess of that amount.



73









 





          (ii) All such prepayments shall be made:





     (A) upon not less than one (1) Business Day’s prior written or telephonic
notice in the case of Base Rate Loans, U.S. Dollar Canadian Base Rate Loans and
Canadian Dollar Base Rate Loans;




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




     (C) upon written or telephonic notice on the date of prepayment, in the case of
U.S. Swingline Loans and Canadian Swingline Loans;


in each case given to Administrative Agent, Canadian Agent, U.S. Swingline Lender or Canadian
Swingline Lender, as the case may be, by 1:00 p.m. (New York City or Toronto time, as applicable)
on the date required and, if given by telephone, promptly confirmed in writing to Administrative
Agent (and Administrative Agent will promptly transmit such telephonic or original notice for Term
Loans or U.S. Revolving Loans, as the case may be, by facsimile or telephone promptly confirmed in
writing to each U.S. Lender), Canadian Agent (and Canadian Agent will promptly transmit such
telephonic or original notice for Canadian Revolving Loans, as the case may be, by facsimile or
telephone promptly confirmed in writing to each Canadian Lender), U.S. Swingline Lender or Canadian
Swingline Lender, as the case may be. Upon the giving of any such notice, the principal amount of
the Loans specified in such notice shall become due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be applied as specified in Section 2.16(a).




     (b) Voluntary Commitment Reductions.




     (i) The Company may, upon not less than three (3) Business Days’ prior written or
telephonic notice confirmed in writing to Administrative Agent or Canadian Agent (which
original written or telephonic notice Administrative Agent or Canadian Agent will promptly
transmit by facsimile or telephone promptly confirmed in writing to each applicable Lender),
at any time and from time to time terminate in whole or permanently reduce in part, without
premium or penalty, the Revolving Commitments in an amount up to the amount by which the
Revolving Commitments exceed the Total Utilization of U.S. Revolving Commitments at the time
of such proposed termination or reduction; provided, any such partial reduction of
the Canadian Revolving Commitments shall be in an aggregate minimum amount of C$1,000,000
and integral multiples of Cdn $500,000 in excess of that amount and any such partial
reduction of the U.S. Revolving Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 in excess of that amount.




     (ii) The Company’s notice to Administrative Agent or Canadian Agent shall designate the
date (which shall be a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Commitments shall be
effective on the date specified in the Company’s notice and shall



74









 




reduce the Revolving Commitment of each Lender proportionately to its Pro Rata Share
thereof.




     Section 2.15 Mandatory Prepayments/Commitment Reductions.



     (a) Asset Sales. No later than the fifth Business Day following the date of receipt
by Holdings or any of its Subsidiaries of any Net Asset Sale Proceeds in excess of $2,000,000 from
the Closing Date through the applicable date of determination, the Company shall prepay the Term
Loans in an aggregate amount equal to such amount of Net Asset Sale Proceeds in excess of
$2,000,000 from the Closing Date; provided, so long as no Default or Event of Default shall
have occurred and be continuing, the Company shall have the option, directly or through one or more
of its Domestic Subsidiaries (or Foreign Subsidiaries to the extent the assets sold were owned by a
Foreign Subsidiary), to invest Net Asset Sale Proceeds within three hundred-sixty five (365) days
(or, to the extent committed within such 365 day period, within four hundred fifty-five (455) days)
of receipt thereof in productive assets of the general type used in the business of the Company and
its Subsidiaries or, if such Net Asset Sale Proceeds constitute the proceeds of inventory disposed
of outside of the ordinary course of business, to purchase replacement inventory for the Company
and its Domestic Subsidiaries or Foreign Subsidiaries, as applicable; provided further,
pending any such investment all such Net Asset Sale Proceeds shall be applied to prepay U.S.
Revolving Loans to the extent outstanding (without a reduction in U.S. Revolving Commitments).
Notwithstanding anything to the contrary herein, (i) in the event of the sale of Chicago Real
Property, the Net Asset Sale Proceeds thereof shall not be subject to this Section 2.15(a) to the
extent that such proceeds are used to consummate Permitted Acquisitions pursuant to Section 6.9(e)
or for plant relocation purposes (moving, facility improvement and related expenses) without time
limit, provided, that, within 180 days of the receipt of such proceeds, the Company shall deliver
to the Administrative Agent a certificate setting forth a schedule and estimated costs for such
plant relocation and (ii) in the event of the sale of the Bell Fitness Business Unit, the Net Asset
Sale Proceeds thereof shall not be subject to this Section 2.15(a) to the extent that such proceeds
are used to consummate Permitted Acquisitions pursuant to Section 6.9(e).



     (b) Insurance/Condemnation Proceeds. No later than the fifth Business Day following
the date of receipt by Holdings or any of its Subsidiaries, or Administrative Agent as loss payee,
of any Net Insurance/Condemnation Proceeds in excess of $2,000,000 from the Closing Date through
the applicable date of determination, the Company shall prepay the Term Loans set forth in Section
2.16(b) in an aggregate amount equal to such amount of Net Insurance/Condemnation Proceeds in
excess of $2,000,000; provided, so long as no Default or Event of Default shall have
occurred and be continuing, the Company shall have the option, directly or through one or more of
its Domestic Subsidiaries (or Foreign Subsidiaries to the extent the assets lost or condemned were
owned by a Foreign Subsidiary) to invest such Net Insurance/Condemnation Proceeds within three
hundred-sixty five (365) days (or, to the extent committed within such 365 day period, within four
hundred fifty-five (455) days) of receipt thereof in productive assets of the general type used in
the business of Holdings and its Domestic Subsidiaries or Foreign Subsidiaries, as applicable,
which investment may include the repair, restoration or replacement of the applicable assets
thereof; provided further, pending any such investment all such Net
Insurance/Condemnation Proceeds, as the case may be, shall be applied



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to prepay U.S. Revolving Loans to the extent outstanding (without a reduction in U.S.
Revolving Commitments).




     (c) Issuance of Equity Securities. On the date of receipt by Holdings of any Cash
proceeds (through a capital contribution or otherwise) from the issuance in a public underwritten
offering of any Capital Stock of Parent or Holdings or any of their respective Subsidiaries, the
Company shall prepay the Term Loans as set forth in Section 2.16(b) in an aggregate amount equal to
50.0% of such proceeds, net of underwriting discounts and commissions and other reasonable costs
and expenses associated therewith, payable to a Person that is not Parent, Holdings or its
Subsidiaries, including reasonable legal fees and expenses; provided, that during any
period in which the Leverage Ratio (determined for any such period by reference to the most recent
Compliance Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio) shall
be 4.00:1.00 or less, no prepayments and/or reductions shall be required. Notwithstanding the
foregoing, prior to any prepayment required by this Section and to the extent permitted by Section
6.5(d), the Company may redeem up to 35% of Senior Subordinated Notes, Refinancing Notes and
Additional Senior Subordinated Notes with Cash proceeds from the public issuance of any Capital
Stock of, Parent or Holdings or any of their respective Subsidiaries (it being understood that for
purposes of calculating the amounts owed to prepay the Lenders under this Section when the Company
redeems Senior Subordinated Notes, Refinancing Notes and Additional Senior Subordinated Notes, the
Lenders shall be entitled to receive the lesser of (x) 50% of such initial public offering Cash
proceeds and (y) any remaining Cash proceeds after taking into account amounts paid to redeem the
Senior Subordinated Notes).



     (d) Issuance of Debt. No later than the first Business Day following the date of
receipt by Holdings or any of its Subsidiaries of any Cash proceeds from the incurrence of any
Indebtedness of Holdings or any of its Subsidiaries (other than with respect to any Indebtedness
permitted to be incurred pursuant to Section 6.1, but expressly including the proceeds of any sale
and leaseback pursuant to Section 6.11), the Company shall prepay the Term Loans as set forth in
Section 2.16(b) in an aggregate amount equal to 100% of such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses associated therewith, payable to
a Person that is not Holdings or its Subsidiaries, including reasonable legal fees and expenses.



     (e) Consolidated Excess Cash Flow. In the event that there shall be Consolidated
Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year 2007), the Company shall, no
later than one hundred-twenty (120) days after the end of such Fiscal Year, prepay the Term Loans
as set forth in Section 2.16(b) in an aggregate amount equal to 50.0% of such Consolidated Excess
Cash Flow; provided, during (x) any period in which the Leverage Ratio (determined for any
such period by reference to the most recent Compliance Certificate delivered pursuant to Section
5.1(d) calculating the Leverage Ratio) shall be 4.00:1.00 or less but greater than 3.00:1.00, the
Company shall only be required to make the prepayments and/or reductions otherwise required hereby
in an amount equal to 25.0% of such Consolidated Excess Cash Flow and (y) any period in which the
Leverage Ratio (determined for any such period by reference to the most recent Compliance
Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio) shall be 3.00:1.00
or less, no Consolidated Excess Cash Flow prepayment shall be required. In computing amounts owing
under this clause (e), credit shall be given for any



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voluntary prepayments of the Loans (excluding repayments of Revolving Loans or Swingline Loans
except to the extent the Revolving Commitments are permanently reduced in connection with such
repayments). Notwithstanding anything to the contrary in this Section 2.15(e), to the extent that
any prepayment required by this Section 2.15(e) would result in the Company and its Subsidiaries
having Cash and Cash Equivalents of less than $12,500,000 immediately after giving effect to such
prepayment the amount of such prepayment required hereby shall be reduced by an amount such that
after giving effect to such prepayment Company and its Subsidiaries shall have Cash and Cash
Equivalents equal to $12,500,000 (the “Minimum Liquidity Exclusion”).




     (f) Revolving Loans and Swingline Loans. (i) The Company shall from time to time
prepay first, the U.S. Swingline Loans, and second, the U.S. Revolving Loans to the extent
necessary so that the Total Utilization of U.S. Revolving Commitments shall not at any time exceed
the U.S. Revolving Commitments then in effect and (ii) the Canadian Borrowers shall from time to
time prepay first, the Canadian Swingline Loans, and second, the Canadian Revolving Loans to the
extent necessary so that the Total Utilization of Canadian Revolving Commitments shall not at any
time exceed the Canadian Revolving Commitments then in effect.



     (g) Prepayment Certificate. Concurrently with any prepayment of the Term Loans
pursuant to Sections 2.15(a) through 2.15(e), the Company shall deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the calculation of the amount of the applicable
net proceeds or Consolidated Excess Cash Flow, as the case may be. In the event that the Company
shall subsequently determine that the actual amount received exceeded the amount set forth in such
certificate, the Company shall promptly make an additional prepayment of the Loans and/or the
Revolving Commitments shall be permanently reduced in an amount equal to such excess, and the
Company shall concurrently therewith deliver to Administrative Agent a certificate of an Authorized
Officer demonstrating the derivation of such excess.



     (h) Subordinated Indebtedness. In the event that the Company shall otherwise be
required to make any mandatory prepayment of Indebtedness under the Senior Subordinated Notes
(other than Refinancing Notes), any Refinancing Notes or the Additional Senior Subordinated Notes,
the Company shall prepay the Loans and reduce the Commitments in accordance with Section 2.16 in an
aggregate amount equal to the amount of such mandatory prepayment.



     Section 2.16 Application of Prepayments/Reductions.



     (a) Application of Voluntary Prepayments by Type of Loans. Any prepayment of any Loan
pursuant to Section 2.14(a) shall be applied as specified by the Company in the applicable notice
of prepayment.



     (b) Application of Mandatory Prepayments by Type of Loans. Any amount required to be
paid pursuant to Sections 2.15(a) through 2.15(e) and 2.15(h) shall be applied to prepay scheduled
Installments of the Term Loan due within the next four quarters and then on a pro rata basis (in
accordance with the respective outstanding principal amounts thereof) and shall be



77









 




further applied on a pro rata basis to the remaining scheduled Installments of the applicable
Term Loans.




     (c) Application of Prepayments of Loans to Base Rate Loans and Eurodollar Rate Loans.
Considering each Class of Loans being prepaid separately, any prepayment thereof shall be applied
first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in
each case in a manner which minimizes the amount of any payments required to be made by the Company
pursuant to Section 2.19(c).



     (d) Application of Prepayments upon Exercise of Remedies. Notwithstanding the
foregoing, so long as an Event of Default exists and is continuing, any amount required to be paid
pursuant to Section 2.15(a) through Section 2.15(e) and 2.15(h) shall be applied as set forth in
Section 8.3.



     (e) Hedge Obligations Unaffected. Any repayment or prepayment made pursuant to this
Section shall not affect the Company’s obligation to continue to make payments under any Secured
Hedge Agreement, which shall remain in full force and effect notwithstanding such repayment or
prepayment, subject to the terms of such Secured Hedge Agreement.



     Section 2.17 General Provisions Regarding Payments.



     (a) All payments of principal, interest, fees and other Obligations (i) denominated in U.S.
Dollars shall be made in U.S. Dollars and (ii) denominated in Canadian Dollars shall be made in
Canadian Dollars, in each case, in same day funds, without defense, setoff or counterclaim, free of
any restriction or condition, and delivered to Administrative Agent or Canadian Agent, as
applicable, not later than 12:00 p.m. (New York City or Toronto time, as applicable) on the date
due at Administrative Agent’s Principal Office or Canadian Agent’s Principal Office, as applicable,
for the account of U.S. Lenders and Canadian Lenders, as applicable; for purposes of computing
interest and fees, funds received by Administrative Agent or Canadian Agent after that time on such
due date shall be deemed to have been paid on the next succeeding Business Day.



     (b) All payments in respect of the principal amount of any Loan (other than voluntary
prepayments of Base Rate Loans) shall be accompanied by payment of accrued interest on the
principal amount being repaid or prepaid.



     (c) Administrative Agent shall promptly distribute to each U.S. Lender at such address as such
U.S. Lender shall indicate in writing, such U.S. Lender’s applicable Pro Rata Share of all payments
and prepayments of principal and interest with respect to U.S. Loans due hereunder, together with
all other amounts due thereto, including, without limitation, all fees payable with respect
thereto, to the extent received by Administrative Agent and Canadian Agent shall promptly
distribute to each Canadian Lender at such address as such Canadian Lender shall indicate in
writing, such Canadian Lender’s applicable Pro Rata Share of all payments and prepayments of
principal and interest with respect to Canadian Loans due hereunder, together with all other
amounts due thereto, including, without limitation, all fees payable with respect thereto, to the
extent received by Canadian Agent.



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



     (e) Subject to the provisos set forth in the definition of “Interest Period”, whenever any
payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder or of the Revolving Commitment
fees and any Letter of Credit fees hereunder.



     (f) The Company and the Canadian Borrowers hereby authorize Administrative Agent and Canadian
Agent to charge the Company’s and Canadian Borrowers’ accounts with Administrative Agent or
Canadian Agent in order to cause timely payment to be made to Administrative Agent or Canadian
Agent of all principal, Letter of Credit reimbursements, interest, fees and expenses due hereunder
(subject to sufficient funds being available in its accounts for that purpose).



     (g) Administrative Agent shall deem any payment by or on behalf of the Company hereunder that
is not made in same day funds prior to 12:00 p.m. (New York City time) and Canadian Agent shall
deem any payment by or on behalf of the Canadian Borrowers hereunder that is not made in same day
funds prior to 12:00 p.m. (Toronto time) to be a non-conforming payments. Any such payments shall
not be deemed to have been received by Administrative Agent or Canadian Agent until the later of
(i) the time such funds become available funds, and (ii) the applicable next Business Day.
Administrative Agent and/or Canadian Agent shall give prompt telephonic notice to the Company and
each applicable Lender (confirmed in writing) if any payment is non-conforming. Any non-conforming
payment may constitute or become a Default or Event of Default in accordance with the terms of
Section 8.1(a). Interest shall continue to accrue on any principal as to which a non-conforming
payment is made until such funds become available funds (but in no event less than the period from
the date of such payment to the next succeeding applicable Business Day) at the rate determined
pursuant to Section 2.11 from the date such amount was due and payable until the date such amount
is paid in full.



     (h) If an Event of Default shall have occurred and not otherwise been waived, and the maturity
of the Obligations shall have been accelerated pursuant to Section 8.1, all payments or proceeds
received by Agents hereunder in respect of any of the Obligations, shall be applied in accordance
with the application arrangements described in Section 8.3.



     Section 2.18 Ratable Sharing.



     Lenders hereby agree among themselves that, except as otherwise provided in Section 8.3 with
respect to amounts realized from the exercise of rights with respect to Liens on the Collateral, if
any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms hereof), through the exercise of any right of set-off or
banker’s lien, by counterclaim or cross action or by the



79









 




enforcement of any right under the Credit Documents or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of
Credit, fees and other amounts then due and owing to such Lender hereunder or under the other
Credit Documents (collectively, the “Aggregate Amounts Due” to such Lender) which is
greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to
such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify
Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion
of such payment to purchase participations (which it shall be deemed to have purchased from each
seller of a participation simultaneously upon the receipt by such seller of its portion of such
payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided, if all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of
the Company or any Borrower or otherwise (and whether as a result of any demand, settlement,
litigation or otherwise), those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent of such recovery,
but without interest; provided, further, that, notwithstanding the foregoing, no
Canadian Lender shall be required to apply such payments to U.S. Obligations and no U.S. Lender
shall be required to apply such payments to Canadian Obligations. Each of the Borrowers expressly
consents to the foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker’s lien, set-off or counterclaim with respect to any and
all monies owing by the any Borrower to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder directly by such Borrower.




     Section 2.19 Making or Maintaining Eurodollar Rate Loans.



     (a) Inability to Determine Applicable Interest Rate. In the event that Administrative
Agent or Canadian Agent, as applicable, shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with
respect to any Eurodollar Rate Loans, that by reason of circumstances affecting the London
interbank market adequate and fair means do not exist for ascertaining the interest rate applicable
to such Loans on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by facsimile or by telephone confirmed in
writing) to the Company and each Lender of such determination, whereupon (i) no Loans may be made
as, or converted to, Eurodollar Rate Loans until such time as Administrative Agent notifies the
Company and/or Canadian Borrowers and Lenders that the circumstances giving rise to such notice no
longer exist, and (ii) any Funding Notice or Conversion/Continuation Notice given by the Company
and/or Canadian Borrowers with respect to the Loans in respect of which such determination was made
shall be deemed to be rescinded by the Company and/or Canadian Borrowers.



     (b) Illegality or Impracticability of Eurodollar Rate Loans. In the event that on any
date any Lender shall have determined (which determination shall be final and conclusive and
binding upon all parties hereto but shall be made only after consultation with the Company



80









 




and/or Canadian Borrowers and Administrative Agent or Canadian Agent, as applicable) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful as a
result of compliance by such Lender in good faith with any law, treaty, governmental rule,
regulation, guideline, decree or order (or would conflict with any such treaty, governmental rule,
regulation, guideline, decree or order not having the force of law even though the failure to
comply therewith would not be unlawful), or (ii) has become impracticable, as a result of
contingencies occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any such event, such
Lender shall be an “Affected Lender” and it shall on that day give notice (by facsimile or
by telephone confirmed in writing) to the Company and/or Canadian Borrowers and Administrative
Agent of such determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (1) the obligation of the Affected Lender to make Loans as, or to
convert Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (2) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by the Company and/or Canadian Borrowers pursuant to a
Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or
continue such Loan as or convert such Loan to, as the case may be) (x) a Base Rate Loan denominated
in U.S. Dollars in the case of Loans to the Company and (y) U.S. Dollar Canadian Base Rate Loans in
the case of Loans to any Canadian Borrower, (3) the Affected Lender’s obligation to maintain its
outstanding Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans
or when required by law, and (4) the Affected Loans shall automatically convert into (x) Base Rate
Loans denominated in U.S. Dollars in the case of Loans to the Company and (y) U.S. Dollar Canadian
Base Rate Loans in the case of Loans to any Canadian Borrower, on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by the Company and/or Canadian
Borrowers pursuant to a Funding Notice or a Conversion/Continuation Notice, the Company and/or
Canadian Borrowers shall have the option, subject to the provisions of Section 2.19(c), to rescind
such Funding Notice or Conversion/Continuation Notice as to all Lenders by giving notice (by
facsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the
date on which the Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.19(b) shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert
Loans to, Eurodollar Rate Loans in accordance with the terms hereof.




     (c) Compensation for Breakage or Non-Commencement of Interest Periods. The Company
shall compensate each U.S. Lender and the Canadian Borrowers shall compensate each Canadian Lender,
upon written request by such Lender (which request shall set forth the basis for requesting such
amounts), for all reasonable 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 re-employment
of such funds but excluding loss of anticipated profits including, without limitation, the
Applicable Margin) which such Lender may sustain: (i) if for any reason (other than a default by
such Lender) a borrowing of any Eurodollar Rate Loan does



81









 




not occur on a date specified therefor in a Funding Notice or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii) if any prepayment or other principal payment of, or any conversion of, any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest Period applicable
to that Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any
date specified in a notice of prepayment given by the Company.




     (d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or transfer
Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an
Affiliate of such Lender except that Eurodollar Rate Loans to a Canadian Borrower may only be
booked at its office in Canada.



     (e) Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all
amounts payable to a Lender under this Section 2.19 and under Section 2.20 shall be made as though
such Lender had actually funded each of its relevant Eurodollar Rate Loans through the purchase of
a Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and
having a maturity comparable to the relevant Interest Period and through the transfer of such
Eurodollar deposit from an offshore office of such Lender to a domestic office of such Lender in
the United States of America; provided, however, each Lender may fund each of its
Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized
only for the purposes of calculating amounts payable under this Section 2.19 and under Section
2.20.



     Section 2.20 Increased Costs; Capital Adequacy.



     (a) Compensation For Increased Costs and Taxes. Subject to the provisions of Section
2.21 (which shall be controlling with respect to the matters covered thereby), in the event that
any Lender (which term shall include Issuing Bank for purposes of this Section 2.20(a)) shall
determine (which determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation, decree or order, or
any change therein or in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation, decree or order), or any
determination of a court or Governmental Authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law): (i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall net income of such Lender) with
respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder
or thereunder or any payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder; (ii) imposes, modifies or holds applicable
any reserve (including any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office



82









 




of such Lender (other than any such reserve or other requirements with respect to Eurodollar
Rate Loans that are reflected in the definition of Adjusted Eurodollar Rate); or (iii) imposes any
other condition (other than with respect to a Tax matter) on or affecting such Lender (or its
applicable lending office) or its obligations hereunder or the London interbank market; and the
result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making
or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or
its applicable lending office) with respect thereto; then, in any such case, (i) the Company shall
promptly pay to such U.S. Lender and (ii) the Canadian Borrowers shall pay to such Canadian Lender,
upon receipt of the statement referred to in the next sentence, such additional amount or amounts
(in the form of an increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its sole discretion shall determine) as may be necessary to completely compensate
such Lender for any such increased cost or reduction in amounts received or receivable hereunder.
Such Lender shall deliver to the Company (with a copy to Administrative Agent or Canadian Agent, as
applicable) a written statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this Section 2.20(a), which statement shall be
conclusive and binding upon all parties hereto absent manifest error. Failure or delay on the part
of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation;
provided that the Company and/or the Canadian Borrowers shall not be required to compensate
a Lender or the Issuing Bank pursuant to this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender or the Issuing Bank,
as the case may be, notifies the Company and/or the Borrower of the change giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim
compensation therefor (except that, if the change giving rise to such increased costs or reductions
is retroactive, then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).




     (b) Capital Adequacy Adjustment. In the event that any Lender (which term shall
include Issuing Bank for purposes of this Section 2.20(b)) shall have determined that the adoption,
effectiveness, phase-in or applicability after the Closing Date of any law, rule or regulation (or
any provision thereof) regarding capital adequacy, or any change therein or in the interpretation
or administration thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender (or its applicable
lending office) with any guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans
or Revolving Commitments or Letters of Credit, or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below that which such
Lender or such controlling corporation could have achieved but for such adoption, effectiveness,
phase-in, applicability, change or compliance (taking into consideration the policies of such
Lender or such controlling corporation with regard to capital adequacy), then from time to time,
within five (5) Business Days after receipt by the Company from such Lender of the statement
referred to in the next sentence, the Company shall pay to such U.S. Lender and/or the Canadian
Borrowers shall pay to such Canadian Lender such additional amount or amounts as will compensate
such Lender or such controlling corporation on



83









 




an after-tax basis for such reduction. Such Lender shall deliver to the Company (with a copy
to Administrative Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 2.20(b), which statement shall
be conclusive and binding upon all parties hereto absent manifest error. Notwithstanding the
foregoing, the Company and/or the Canadian Borrowers shall not be required to compensate a Lender
or the Issuing Bank pursuant to this Section for any increased costs incurred or reductions
suffered more than nine (9) months prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Company of the change giving rise to such increased costs or reductions
and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor (except that,
if the change giving rise to such increased costs or reductions is retroactive, then the nine-month
period referred to above shall be extended to include the period of retroactive effect thereof).




     Section 2.21 Taxes; Withholding, etc.



     (a) Payments to Be Free and Clear. Subject to Sections 2.21(b), (c) and (d), all sums
payable by any Credit Party hereunder and under the other Credit Documents shall (except to the
extent required by law) be paid free and clear of, and without any deduction or withholding on
account of, any Tax (other than a Tax on the overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction from or to which a
payment is made by or on behalf of any Credit Party or by any federation or organization of which
the United States of America or any such jurisdiction is a member at the time of payment.



     (b) Withholding of Taxes. If any Credit Party or any other Person is required by law
to make any deduction or withholding on account of any such Tax from any sum paid or payable by any
Credit Party to any Agent or any Lender (which term shall include Issuing Bank for purposes of this
Section 2.21(b)) under any of the Credit Documents: (i) such Credit Party shall notify
Administrative Agent of any such requirement or any change in any such requirement as soon as such
Credit Party becomes aware of it; (ii) such Credit Party shall deduct, withhold and pay any such
Tax before the date on which penalties attach thereto, such payment to be made (if the liability to
pay is imposed on any Credit Party) for its own account or (if that liability is imposed on
Administrative Agent or such Lender, as the case may be) on behalf of and if permitted by
applicable law, in the name of Administrative Agent or such Lender; (iii) (except in the case of
Taxes on the overall net income of any Lender) the sum payable by such Credit Party in respect of
which the relevant deduction, withholding or payment is required shall be increased to the extent
necessary to ensure that, after the making of that deduction, withholding or payment, such Agent or
such Lender, as the case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made; and (iv) within
thirty (30) days after paying any sum from which it is required by law to make any deduction or
withholding, and within thirty (30) days after the due date of payment of any Tax which it is
required by clause (ii) above to pay, such Credit Party shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other authority; provided, no such additional
amount shall be required to be paid to any Lender under clause (iii) above except to the extent
that any change after the date hereof (in the case of each



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Lender listed on the signature pages hereof on the Closing Date) or after the effective date
of the Assignment Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as is mentioned
therein shall result in an increase in the rate of such deduction, withholding or payment from that
in effect at the date hereof or at the date of such Assignment Agreement, as the case may be, in
respect of payments to such Lender, and further provided that no such additional amounts shall be
paid to a Lender in respect of a Tax imposed pursuant to Part XIII of the Income Tax Act (Canada),
or any successor provision thereto, if such Tax arises by virtue of the holder ceasing to qualify
as a Canadian Lender. The Credit Parties, jointly and severally agree to indemnify and hold
harmless each Lender and Agent and reimburse such Lenders and Agents upon its written request for
the amount of any Taxes so levied or imposed and paid by any Lender or Agent other than Taxes in
respect of which no additional amounts are required to be paid hereunder.




     (c) Evidence of Exemption From U.S. Withholding Tax. Each Lender that is a United
States Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) shall,
upon the request of the Company or the Administrative Agent, deliver to the Administrative Agent
for delivery to the Company two original copies of Internal Revenue Service Form W-9, properly
completed and duly executed by such Lender. Each Lender that is not a United States Person (as
such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income
tax purposes (a “Non-US Lender”) shall deliver to Administrative Agent for transmission to
the Company, on or prior to the Closing Date (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or on or prior to the date of the Assignment Agreement pursuant
to which it becomes a Lender (in the case of each other Lender), and at such other times as may be
necessary in the determination of the Company or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue Service Form W-8BEN or
W-8ECI (or any successor forms), properly completed and duly executed by such Lender, and such
other documentation required under the Internal Revenue Code and reasonably requested by the
Company to establish that such Lender is not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Credit Documents, or (ii) if such Lender is not a “bank” or
other Person described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form W-8BEN or W-8ECI pursuant to clause (i) above, a Certificate Re:
Non-Bank Status together with two original copies of Internal Revenue Service Form W-8BEN (or any
successor form), properly completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by the Company to establish that
such Lender is not subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under any of the Credit Documents. Each
Lender required to deliver any forms, certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to this Section 2.21(c) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such Lender shall promptly deliver to
Administrative Agent for transmission to the Company two new original copies of Internal Revenue
Service Form W-9, W-8BEN or W-8ECI, or a Certificate Re: Non-Bank Status and two original copies of
Internal Revenue Service



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Form W-8BEN (or any successor form), as the case may be, properly completed and duly executed
by such Lender, and such other documentation required under the Internal Revenue Code and
reasonably requested by the Company to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax with respect to payments to such
Lender under the Credit Documents, or notify Administrative Agent and the Company of its inability
to deliver any such forms, certificates or other evidence. The Company shall not be required to
pay any additional amount to any Lender under Section 2.21(b)(iii) if such Lender shall have failed
(1) to deliver the forms, certificates or other evidence referred to in the third sentence of this
Section 2.21(c), or (2) to notify Administrative Agent and the Company of its inability to deliver
any such forms, certificates or other evidence, as the case may be; provided, if such
Lender shall have satisfied the requirements of the first or second sentence of this Section
2.21(c) on the Closing Date or on the date of the Assignment Agreement pursuant to which it became
a Lender, as applicable, nothing in this last sentence of Section 2.21(c) shall relieve the Company
of its obligation to pay any additional amounts pursuant this Section 2.21 in the event that, as a
result of any change in any applicable law, treaty or governmental rule, regulation, decree or
order, or any change in the interpretation, administration or application thereof, such Lender is
no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as described herein.




     (d) Each Non-US Lender, to the extent it does not act or ceases to act for its own account
with respect to any portion of any sums paid or payable to such Lender under any of the Credit
Documents (for example, in the case of a typical participation by such Lender), shall deliver to
Administrative Agent on the date when such Non-US Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of Administrative Agent (in the reasonable exercise of its
discretion), (A) two duly signed completed copies of the forms or statements required to be
provided by such Lender as set forth above, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account that is not subject to U.S.
withholding tax and (B) two duly signed completed originals of Internal Revenue Service Form W-8IMY
(or any successor thereto), together with any other certificate or statement of exemption required
under the Internal Revenue Code, to establish that such Lender is not acting for its own account
with respect to the relevant portion of any such sums payable to such Lender.



     (e) Each Lender entering into this Agreement as a Canadian Lender represents and warrants to
the Canadian Borrowers that on the Closing Date it qualifies as a Canadian Lender. Upon the
written request of the Company (on behalf of the Canadian Borrowers) acting reasonably each such
Lender shall deliver to the Company (on behalf of the Canadian Borrowers) such certificates,
documents or other evidence as may be required from time to time, properly completed and duly
executed by such Lender, to confirm the continuing accuracy of the foregoing representation, and in
any event shall promptly notify the Company (on behalf of the Canadian Borrowers) of any change in
circumstances which would result in the above representation and warranty no longer continuing to
be true and accurate. The obligations of a Lender that are contained in this Section 2.21(e) shall
apply to an assignee of such Lender except with respect to any assignment made in accordance with
Section 10.6(c)(ii).



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     (f) The agreements in this Section 2.21 shall survive the termination of this Agreement and
any payment of the Obligations.



     Section 2.22 Obligation to Mitigate.



     Each Lender (which term shall include Issuing Bank for purposes of this Section 2.22) agrees
that, as promptly as practicable after the officer of such Lender responsible for administering its
Loans or Letters of Credit, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected Lender or that would
entitle such Lender to receive payments under Section 2.19, 2.20 or 2.21, it will, to the extent
not inconsistent with the internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions,
including any Affected Loans, through another office of such Lender, or (b) take such other
measures as such Lender may deem reasonable, if as a result thereof the circumstances which would
cause such Lender to be an Affected Lender would cease to exist or the additional amounts which
would otherwise be required to be paid to such Lender pursuant to Section 2.19, 2.20 or 2.21 would
be materially reduced and if, as determined by such Lender in its sole discretion, the making,
issuing, funding or maintaining of such Revolving Commitments, Loans or Letters of Credit through
such other office or in accordance with such other measures, as the case may be, would not
otherwise adversely affect such Revolving Commitments, Loans or Letters of Credit or the interests
of such Lender; provided, such Lender will not be obligated to utilize such other office
pursuant to this Section 2.22 unless the Company agrees to pay all incremental expenses incurred by
such Lender as a result of utilizing such other office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by the Company pursuant to this Section
2.22 (setting forth in reasonable detail the basis for requesting such amount) submitted by such
Lender to the Company (with a copy to Administrative Agent) shall be conclusive absent manifest
error.



     Section 2.23 Defaulting Lenders.



     Anything contained herein to the contrary notwithstanding, in the event that any Lender
defaults (a “Defaulting Lender”) in its obligation to fund (a “Funding Default”)
any Revolving Loan or its portion of any unreimbursed payment under Section 2.4(a)(ii)(E),
2.4(b)(ii)(E) or 2.5(e) (in each case, a “Defaulted Loan”), then (a) during any Default
Period with respect to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
“Lender” for purposes of voting on any matters (including the granting of any consents or waivers)
with respect to any of the Credit Documents; (b) to the extent permitted by applicable law, until
such time as the Default Excess with respect to such Defaulting Lender shall have been reduced to
zero, (i) any voluntary prepayment of the Revolving Loans shall, if the Company so directs at the
time of making such voluntary prepayment, be applied to the Revolving Loans of other Lenders as if
such Defaulting Lender had no Revolving Loans outstanding and the Revolving Exposure of such
Defaulting Lender were zero, and (ii) any mandatory prepayment of the Revolving Loans shall, if the
Company so directs at the time of making such mandatory prepayment, be applied to the Revolving
Loans of other Lenders (but not to the Revolving Loans of such Defaulting Lender) as if such
Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender, it being understood and
agreed that the Company shall be entitled to retain any portion of any



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mandatory prepayment of the Revolving Loans that is not paid to such Defaulting Lender solely
as a result of the operation of the provisions of this clause (b); (c) such Defaulting Lender’s
Revolving Commitment and outstanding Revolving Loans and such Defaulting Lender’s Pro Rata Share of
the Letter of Credit Usage shall be excluded for purposes of calculating the Revolving Commitment
fee payable to Lenders pursuant to Section 2.12 in respect of any day during any Default Period
with respect to such Defaulting Lender, and such Defaulting Lender shall not be entitled to receive
any Revolving Commitment fee pursuant to Section 2.12 with respect to such Defaulting Lender’s
Revolving Commitment in respect of any Default Period with respect to such Defaulting Lender; and
(d) the Total Utilization of U.S. Revolving Commitments as at any date of determination shall be
calculated as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender.
No Revolving Commitment of any Lender shall be increased or otherwise affected, and, except as
otherwise expressly provided in this Section 2.23, performance by the Company of its obligations
hereunder and the other Credit Documents shall not be excused or otherwise modified as a result of
any Funding Default or the operation of this Section 2.23. The rights and remedies against a
Defaulting Lender under this Section 2.23 are in addition to other rights and remedies which the
Company may have against such Defaulting Lender with respect to any Funding Default and which
Administrative Agent or any Lender may have against such Defaulting Lender with respect to any
Funding Default.




     Section 2.24 Removal or Replacement of a Lender.



     Anything contained herein to the contrary notwithstanding, in the event that: (a) (i) any
Lender (an “Increased-Cost Lender”) shall give notice to the Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under Section 2.19, 2.20 or
2.21, (ii) the circumstances which have caused such Lender to be an Affected Lender or which
entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall
fail to withdraw such notice within five Business Days after the Company’s request for such
withdrawal; or (b) (i) any Lender shall become a Defaulting Lender, (ii) the Default Period for
such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender shall fail to cure
the default as a result of which it has become a Defaulting Lender within five Business Days after
the Company’s request that it cure such default; or (c) in connection with any proposed amendment,
modification, termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.5(b), the consent of Requisite Lenders shall have been obtained but the
consent of one or more of such other Lenders (each a “Non-Consenting Lender”) whose consent
is required shall not have been obtained; then, with respect to each such Increased-Cost Lender,
Defaulting Lender or Non-Consenting Lender (the “Terminated Lender”), the Company may, by
giving written notice to Administrative Agent and any Terminated Lender of its election to do so,
elect to cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to
assign its outstanding Loans and its Revolving Commitments, if any, in full to one or more Eligible
Assignees (each a “Replacement Lender”) in accordance with the provisions of Section 10.6;
provided, (1) on the date of such assignment, the Replacement Lender shall pay to
Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal to all
unreimbursed drawings that have been funded by such Terminated Lender, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated



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Lender pursuant to Section 2.12; (2) on the date of such assignment, the Company shall pay any
amounts payable to such Terminated Lender pursuant to Section 2.19(c), 2.20 or 2.21; or otherwise
as if it were a prepayment and (3) in the event such Terminated Lender is a Non-Consenting Lender,
each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of
which such Terminated Lender was a Non-Consenting Lender; provided, the Company may not
make such election with respect to any Terminated Lender that is also an Issuing Bank unless, prior
to the effectiveness of such election, the Company shall have caused each outstanding Letter of
Credit issued thereby to be cancelled. Upon the prepayment of all amounts owing to any Terminated
Lender and the termination of such Terminated Lender’s Revolving Commitments, if any, such
Terminated Lender shall no longer constitute a “Lender” for purposes hereof; provided, any
rights of such Terminated Lender to indemnification hereunder shall survive as to such Terminated
Lender.




     Section 2.25 Incremental Facilities.



     The Company may by written notice to Administrative Agent elect to request the establishment
of new revolving and/or one or more new term loan commitments (the “New Loan Commitments”),
by an amount not in excess of $100,000,000 in the aggregate and not less than $10,000,000
individually (or such lesser amount which shall be approved by Administrative Agent), and integral
multiples of $1,000,000 in excess of that amount. Each such notice shall specify (A) the date
(each, an “Increased Amount Date”) on which the Company proposes that the New Loan
Commitments shall be effective, which shall be a date not less than 10 Business Days after the date
on which such notice is delivered to Administrative Agent and (B) the identity of each Lender or
other Person that is an Eligible Assignee (each, a “New Loan Lender”) to whom the Company
proposes any portion of such New Loan Commitments be allocated and the amounts of such allocations;
provided that any Lender approached to provide all or a portion of the New Loan Commitments
may elect or decline, in its sole discretion, to provide a New Loan Commitment. Such New Loan
Commitments shall become effective, as of such Increased Amount Date; provided that (1) no
Default or Event of Default shall exist on such Increased Amount Date before or after giving effect
to such New Loan Commitments; (2) both before and after giving effect to the making of any Series
of New Loans, each of the conditions set forth in Section 3.2 shall be satisfied; (3) the Company
and its Subsidiaries shall be in pro forma compliance with each of the covenants set forth in
Section 6.8 as of the last day of the most recently ended Fiscal Quarter after giving effect to
such New Loan Commitments; (4) the Company shall make any payments in respect of breakage or
non-commencement of an Interest Period required pursuant to Section 2.19(c) in connection with the
New Loan Commitments; and (5) the Company shall deliver or cause to be delivered any legal opinions
or other documents reasonably requested by Administrative Agent in connection with any such
transaction;.



     Any New Loans made on an Increased Amount Date shall be designated, a separate series (a
“Series”) of New Loans for all purposes of this Agreement. With respect to any new term
loan, on any Increased Amount Date on which any New Loan Commitments of any Series are effective,
subject to the satisfaction of the foregoing terms and conditions, (i) each New Loan Lender of any
Series shall make a Loan to the Company (a “New Loan”) in an amount equal to its New Loan
Commitment of such Series, and (ii) each New Loan Lender of



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any Series shall become a Lender hereunder with respect to the New Loan Commitment of such
Series and the New Loans of such Series made pursuant thereto.




     Administrative Agent shall notify Lenders promptly upon receipt of the Company’s notice of
each Increased Amount Date and in respect thereof the Series of New Loan Commitments and the New
Loan Lenders of such Series.



     The terms and provisions of the New Loans and New Loan Commitments of any Series shall be,
except as otherwise set forth herein, identical to the Tranche B Term Loans. In any event (i) the
weighted average life to maturity of all New Loans of any Series shall be no shorter than the
weighted average life to maturity of the Tranche B Terms Loans, (ii) the applicable New Loan
Maturity Date of each Series shall be no shorter than the final maturity of the Revolving Loans and
the Tranche B Term Loans and (iii) the rate of interest applicable to the New Loans of each Series
shall be determined by the Company and the applicable new Lenders.



     Section 2.26 Relationship between the Agents.



     The Canadian Agent shall promptly inform the Administrative Agent and the Administrative Agent
shall promptly inform the Canadian Agent, by facsimile, of the funding of any Revolving Loan or
Swingline Loan and the terms thereof.



     Section 2.27 Joint and Several Liability of the Canadian Borrowers.



     (a) Each of the Canadian Borrowers is accepting joint and several liability hereunder in
consideration of the financial accommodation to be provided by the Canadian Lenders under this
Agreement, for the mutual benefit, directly and indirectly, of each of the Canadian Borrowers and
in consideration of the undertakings of each of the Canadian Borrowers to accept joint and several
liability for the obligations of each of them.



     (b) Each of the Canadian Borrowers jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Canadian Borrowers with respect to the payment and performance of all of
the Canadian Obligations arising under this Agreement and the other Credit Documents, it being the
intention of the parties hereto that all of the Canadian Borrowers’ Canadian Obligations shall be
the joint and several obligations of each of the Canadian Borrowers without preferences or
distinction between them.



     (c) If and to the extent that any of the Canadian Borrowers shall fail to make any payment
with respect to any of the obligations hereunder as and when due or to perform any of such
obligations in accordance with the terms thereof, then in each such event, the other Canadian
Borrowers will jointly and severally make such payment with respect to, or perform, such
obligation.



     (d) The obligations of each Canadian Borrower under the provisions of this Section 2.27
constitute full recourse obligations of such Canadian Borrower, enforceable against it to the full
extent of its properties and assets;



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     (e) The provisions of this Section 2.27 are made for the benefit of Canadian Agent, the
Canadian Lenders and their successors and assigns, and may be enforced by them from time to time
against any of the Canadian Borrowers as often as occasion therefor may arise and without
requirement on the part of the Canadian Lenders first to marshall any of its claims or to exercise
any of its rights against any other Canadian Borrower or to exhaust any remedies available to it
against any other Canadian Borrower or to resort to any other source or means of obtaining payment
of any of the Canadian Borrowers’ Canadian Obligations hereunder or to elect any other remedy. The
provisions of this Section 2.27 shall remain in effect until all the Canadian Borrowers’ Canadian
Obligations hereunder shall have been paid in full or otherwise fully satisfied, all of the
Commitments and Credit Documents shall have been terminated. If at any time, any payment, or any
part thereof, made in respect of any of the Canadian Borrowers’ Canadian Obligations, is rescinded
or must otherwise be restored or returned by the Canadian Lenders upon the insolvency, bankruptcy,
restructuring or reorganization of any of the Borrowers, or otherwise, the provisions of this
Section 2.27 will forthwith be reinstated and in effect as though such payment had not been made.



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



     (g) Without in any way limiting the provisions of this Section 2.27, for record-keeping
purposes only, the Canadian Borrowers may allocate between themselves the individual Canadian
Revolving Loans made hereunder.



SECTION 3




CONDITIONS PRECEDENT




     Section 3.1 Closing Date.



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



     (a) Credit Documents. Administrative Agent shall have received sufficient copies of
each Credit Document originally executed and delivered by each applicable Credit Party for each
Lender.



     (b) Organizational Documents; Incumbency. Administrative Agent shall have received
(i) sufficient copies of each Organizational Document executed and delivered by each



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Credit Party, as applicable, and, to the extent applicable, certified as of a recent date by
the appropriate governmental official, for each Lender, each dated the Closing Date or a recent
date prior thereto; (ii) signature and incumbency certificates of the officers of such Person
executing the Credit Documents to which it is a party; (iii) resolutions of the Board of Directors
or similar governing body of each Credit Party approving and authorizing the execution, delivery
and performance of this Agreement and the other Credit Documents and the Related Agreements to
which it is a party or by which it or its assets may be bound as of the Closing Date, certified as
of the Closing Date by its secretary or an assistant secretary as being in full force and effect
without modification or amendment; (iv) a good standing certificate from the applicable
Governmental Authority of each Credit Party’s jurisdiction of incorporation, organization or
formation and in each jurisdiction listed on Schedule 4.1 in which it is qualified as a foreign
corporation or other entity to do business, each dated a recent date prior to the Closing Date; and
(v) such other documents as Administrative Agent may reasonably request.




     (c) Organizational and Capital Structure. The organizational structure and capital
structure of Parent and its Subsidiaries, both before and after giving effect to Transactions,
shall be as set forth on Schedule 4.1.



     (d) Capitalization of Holdings and the Company. Simultaneously with the first
borrowings hereunder, Equity Investors shall have made the contribution of the Sponsor Equity and
the Company shall have received the proceeds thereof and the proceeds of the Loans made hereunder
on the Closing Date shall be sufficient (with the use of up to $25,000,000 of Revolving Loans) to
consummate the Easton Acquisition, the refinancing of the Existing Indebtedness, and the
transactions contemplated in connection therewith and pay all Transaction Costs.



     (e) Consummation of Transactions.




     (i) All conditions set forth in the Easton Acquisition Documents shall have been
satisfied or the fulfillment of any such conditions shall have been waived with the consent
of Administrative Agent, to the extent such waiver is adverse to the Lenders in any material
respect (which consent shall not be unreasonably withheld), (2) the Transactions shall have
become effective in accordance in all material respects with the terms of the Related
Agreements and (3) after giving effect to the Transaction, no default or event of default
shall exist under any of the documents related thereto or the Existing Capital Leases.




     (ii) Administrative Agent shall have received a fully executed or conformed copy of
each Related Agreement and any documents executed in connection therewith. Each Related
Agreement shall be in full force and effect and no provision thereof shall have been
modified or waived in any respect to the extent such modification or waiver is adverse to
the Lenders in any material respect without the consent of Administrative Agent (which
consent shall not be unreasonably withheld).




     (iii) Since the date of execution thereof, there shall have been no amendment,
restatement, or other modification or waiver of the terms and conditions of the Easton



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Acquisition Agreement which, in the reasonable opinion of the Administrative Agent, is
in any manner adverse to the Lenders without the prior written consent of the Administrative
Agent (which consent shall not be unreasonably withheld).



     (f) Existing Indebtedness. On the Closing Date, Holdings and its Subsidiaries shall
have (i) repaid in full all outstanding Existing Indebtedness, (ii) terminated any commitments to
lend or make other extensions of credit thereunder, (iii) delivered to Administrative Agent all
documents or instruments reasonably necessary to release all Liens securing Existing Indebtedness
or other obligations of Holdings and its Subsidiaries thereunder being repaid on the Closing Date,
and (iv) made arrangements reasonably satisfactory to Administrative Agent with respect to the
cancellation of any letters of credit outstanding thereunder or the issuance of Letters of Credit
to support the obligations of Holdings and its Subsidiaries with respect thereto.



     (g) Transaction Costs. On or prior to the Closing Date, the Company shall have
delivered to Administrative Agent the Company’s reasonable best estimate of the Transaction Costs
(other than fees payable to any Agent).



     (h) Governmental Authorizations and Consents. Each Credit Party shall have obtained
all Governmental Authorizations and all material consents of other Persons, in each case required
to be obtained under the Easton Acquisition Agreement. All applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the transactions contemplated by the
Credit Documents or the Related Agreements or the financing thereof and no action, request for
stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.



     (i) Real Estate Assets. In order to create in favor of Collateral Agent or Canadian
Agent, as applicable, for the benefit of the U.S. Secured Parties or the Canadian Secured Parties,
as applicable, a valid and, subject to any filing and/or recording referred to herein, perfected
First Priority security interest in certain Real Estate Assets, Collateral Agent or Canadian Agent,
as applicable, shall have received from the U.S. Credit Parties or the Canadian Credit Parties, as
applicable:




     (i) fully executed and notarized Mortgages, in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering each Real Estate Asset
listed in Schedule 3.1(i) (each, a “Closing Date Mortgaged Property”);




     (ii) an opinion of counsel (which counsel shall be reasonably satisfactory to
Collateral Agent or Canadian Agent, as applicable) in each jurisdiction in which a Closing
Date Mortgaged Property is located addressed to the Agents and the Lenders and dated as of
the Closing Date with respect to the enforceability of the form(s) of Mortgages to be
recorded in such jurisdiction and such other matters as Collateral Agent or Canadian Agent,
as applicable, may reasonably request, in each case in form and substance reasonably
satisfactory to Collateral Agent or Canadian Agent, as applicable;



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     (iii) (A) ALTA mortgagee title insurance policies or unconditional commitments therefor
issued by one or more title companies reasonably satisfactory to Collateral Agent or
Canadian Agent, as applicable, with respect to each Closing Date Mortgaged Property (each, a
“Title Policy”), in amounts not less than the fair market value of each Closing Date
Mortgaged Property, together with a title report issued by a title company with respect
thereto, dated not more than thirty days prior to the Closing Date and copies of all
recorded documents listed as exceptions to title or otherwise referred to therein, each in
form and substance reasonably satisfactory to Collateral Agent or Canadian Agent, as
applicable, and (B) evidence reasonably satisfactory to Collateral Agent or Canadian Agent,
as applicable, that such Credit Party has paid to the title company or to the appropriate
governmental authorities all expenses and premiums of the title company and all other sums
required in connection with the issuance of each Title Policy and all recording and stamp
taxes (including mortgage recording and intangible taxes) payable in connection with
recording the Mortgages for each Closing Date Mortgaged Property in the appropriate real
estate records;




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




     (v) existing ALTA surveys on all Closing Date Mortgaged Properties.



     (j) Personal Property Collateral. Except as otherwise provided in Section 5.14, in
order to create in favor of Collateral Agent or Canadian Agent, as applicable, for the benefit of
the U.S. Secured Parties or the Canadian Secured Parties, as applicable, a valid, perfected First
Priority security interest in the personal property Collateral, Collateral Agent or Canadian Agent,
as applicable, shall have received:




     (i) evidence reasonably satisfactory to Collateral Agent or Canadian Agent, as
applicable, of the compliance by each Credit Party with their obligations under the
Collateral Documents to which such Credit Party is a party (including, without limitation,
their obligations to execute and deliver UCC and PPSA financing statements, originals of
securities, instruments and chattel paper and any agreements perfecting the security
interest in the deposit and/or securities accounts as provided therein);




     (ii) A completed Collateral Questionnaire dated the Closing Date and executed by an
Authorized Officer of each Credit Party, together with all attachments contemplated thereby,
including (A) the results of a recent search, by a Person satisfactory to Collateral Agent
or Canadian Agent, as applicable, of all effective UCC and PPSA financing statements (or
equivalent filings) made with respect to any personal or mixed property of any Credit Party
in the jurisdictions specified in the Collateral Questionnaire, together with copies of all
such filings disclosed by such search, and (B) UCC and PPSA amendment financing statements
(or similar documents) duly authorized for filing by all applicable Persons for filing in
all applicable jurisdictions as may be



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necessary to terminate any effective UCC and PPSA financing statements (or equivalent
filings) disclosed in such search (other than any such financing statements in respect of
Permitted Liens);




     (iii) opinions of counsel (which counsel shall be reasonably satisfactory to Collateral
Agent or Canadian Agent, as applicable) with respect to the creation and perfection of the
security interests in favor of Collateral Agent or Canadian Agent, as applicable, in such
Collateral and such other matters governed by the laws of each jurisdiction in which any
Credit Party or any personal property Collateral is located addressed to the U.S. Secured
Parties or the Canadian Secured Parties, as applicable, and dated as of the Closing Date
(for the purposes of the UCC and PPSA) and the laws of other applicable jurisdictions, in
each case as Collateral Agent or Canadian Agent, as applicable, may reasonably request, in
form and substance reasonably satisfactory to Collateral Agent or Canadian Agent, as
applicable; and




     (iv) evidence that each Credit Party (A) shall have taken or caused to be taken any
other action and made or caused to be made any other filing and recording (other than as set
forth herein) reasonably required by Collateral Agent or Canadian Agent, as applicable
(including, without limitation, executed and delivered intercompany notes evidencing
Indebtedness permitted to be incurred pursuant to Section 6.1(b)) and (B) shall have used
commercially reasonable efforts to obtain a Landlord Waiver and Consent Agreement from the
landlord of each Leasehold Property listed on Schedule 3.1(i).



     (k) Environmental Reports. The Administrative Agent shall have received reports and
other information, in form, scope and substance reasonably satisfactory to Administrative Agent,
regarding environmental matters relating to the Facilities. Schedule 3.1(k) sets forth the Phase I
Reports which have been received by the Administrative Agent.



     (l) Evidence of Insurance. Collateral Agent shall have received a certificate from
the Company’s insurance broker or other evidence reasonably satisfactory to it that all insurance
required to be maintained pursuant to Section 5.5 is in full force and effect, together with
endorsements naming the Collateral Agent, for the benefit of the Secured Parties as additional
insured, mortgagee and first loss payee for any covered loss (after giving effect to any
deductible) in excess of $500,000 thereunder to the extent required under Section 5.5.



     (m) Opinions of Counsel to Credit Parties. The Lenders shall have received originally
executed copies of the favorable written opinions of (i) Ropes & Gray LLP, counsel for the U.S.
Credit Parties, (ii) Borden Ladner Gervais LLP, counsel for the Canadian Credit Parties and (iii)
local counsel in Illinois and Nevada, in each case addressed to the Administrative Agent and the
Lenders, as to such matters as Administrative Agent may reasonably request, dated as of the Closing
Date and otherwise in form and substance reasonably satisfactory to Administrative Agent (and each
Credit Party hereby instructs such counsel to deliver such opinions to Agents and Lenders).



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     (n) Fees. The Company shall have paid to Administrative Agent the fees payable on the
Closing Date referred to in Section 2.12(d).



     (o) Solvency Certificate. On the Closing Date, Administrative Agent shall have
received a Solvency Certificate from the chief financial officer of the Company, dated the Closing
Date and addressed to Administrative Agent and Lenders, in form, scope and substance reasonably
satisfactory to Administrative Agent, with appropriate attachments and demonstrating that after
giving effect to the consummation of Transactions, the Company and its Subsidiaries are and will be
Solvent.



     (p) Closing Date Certificate. Holdings and the Company shall have delivered to
Administrative Agent an originally executed Closing Date Certificate, together with all attachments
thereto.



     (q) Chief Financial Officer Certificate. The Company shall have delivered to
Administrative Agent and Lenders an originally executed chief financial officer certificate
certifying that pro forma Consolidated Adjusted EBITDA in respect of the Acquired Company for the
twelve-month period ended November 30, 2005 is not less than $35,000,000.



     (r) Material Adverse Effect. There shall not have occurred any change or effect since
November 30, 2005 that is materially adverse to the operations, business, assets, financial
condition or results of operations of the Acquired Company and its Subsidiaries, taken as a whole,
or that materially impairs the ability of the Acquired Company to consummate the Easton
Acquisition, except for any such changes or effects resulting, directly or indirectly, from (i) the
public announcement of, or performance of the Transactions (including any action or inaction by the
Acquired Company’s customers, suppliers, employees or competitors), (ii) changes in GAAP or any
applicable law, (iii) changes in the industry in which the Acquired Company and its Subsidiaries
operate, (iv) any attack on, or by, outbreak or escalation of hostilities or acts of terrorism
involving, the United States, any declaration of war by Congress or any other national or
international calamity, (v) changes in general economic conditions or the financial or securities
markets generally, or (vi) any adverse change or effect that is cured by the Acquired Company prior
to the Closing Date, but only to the extent any such change described in clauses (ii), (iii) (iv)
and (v) is not specifically related to or disproportionately impacts the Acquired Company or its
Subsidiaries.



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


Each Lender, by delivering its signature page to this Agreement and funding a Loan on the Closing
Date, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit
Document and each other document required to be approved by any Agent, Requisite Lenders or
Lenders, as applicable on the Closing Date.




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     Section 3.2 Conditions to Each Credit Extension.



     (a) Conditions Precedent. The obligation of each Lender to make any Loan, or Issuing
Bank to issue any Letter of Credit, on any Credit Date, including the Closing Date, are subject to
the satisfaction, or waiver in accordance with Section 10.5, of the following conditions precedent:




     (i) Administrative Agent shall have received a fully executed and delivered Funding
Notice or Issuance Notice, as the case may be;




     (ii) after making the Credit Extensions requested on such Credit Date, the Total
Utilization of U.S. Revolving Commitments shall not exceed the Revolving Commitments then in
effect;




     (iii) as of such Credit Date, the representations and warranties contained herein and
in the other Credit Documents shall be true and correct in all material respects on and as
of that Credit Date to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true and correct in all material
respects on and as of such earlier date. Notwithstanding the foregoing, the representation
made pursuant to Section 4.9 and the representations qualified by reference to a Material
Adverse Effect shall be conditions on the Closing Date only to the extent the Company would
have a right to terminate its obligations under the Easton Acquisition Agreement as a result
of the breach of such representations.




     (iv) as of such Credit Date, no event shall have occurred and be continuing or would
result from the consummation of the applicable Credit Extension that would constitute an
Event of Default or a Default; and




     (v) on or before the date of issuance of any Letter of Credit, Administrative Agent
shall have received all other information required by the applicable Issuance Notice, and
such other documents or information as Issuing Bank may reasonably require in connection
with the issuance of such Letter of Credit.


Any Agent or Requisite Lenders shall be entitled, but not obligated to, request and receive, prior
to the making of any Credit Extension occurring after the Closing Date, additional information
reasonably satisfactory to the requesting party confirming the satisfaction of any of the foregoing
if, in the good faith judgment of such Agent or Requisite Lender such request is warranted under
the circumstances.




     (b) Notices. Any Notice shall be executed by an Authorized Officer in a writing
delivered to Administrative Agent. In lieu of delivering a Notice, the Company may give
Administrative Agent telephonic notice by the required time of any proposed borrowing,
conversion/continuation or issuance of a Letter of Credit, as the case may be; provided
each such notice shall be promptly confirmed in writing by delivery of the applicable Notice to



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Administrative Agent on or before the applicable date of borrowing, continuation/conversion or
issuance. Neither Administrative Agent nor any Lender shall incur any liability to the Company in
acting upon any telephonic notice referred to above that Administrative Agent believes in good
faith to have been given by a duly authorized officer or other person authorized on behalf of the
Company or for otherwise acting in good faith.




SECTION 4




REPRESENTATIONS AND WARRANTIES




     In order to induce Lenders and Issuing Bank to enter into this Agreement and to make each
Credit Extension to be made thereby, each Credit Party represents and warrants to each Lender and
Issuing Bank, on the Closing Date and on each Credit Date, that the following statements are true
and correct (it being understood and agreed that the representations and warranties made on the
Closing Date are deemed to be made concurrently with the consummation of the Transactions
contemplated hereby):



     Section 4.1 Organization; Requisite Power and Authority; Qualification.



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



     Section 4.2 Capital Stock and Ownership.



     The Capital Stock of each of Holdings and its Subsidiaries has been duly authorized and
validly issued and is fully paid and non-assessable. Except as set forth on Schedule 4.2, as of
the date hereof, there is no existing option, warrant, call, right, commitment or other agreement
to which Holdings or any of its Subsidiaries is a party requiring, and there is no membership
interest or other Capital Stock of Holdings or any of its Subsidiaries outstanding which upon
conversion or exchange would require, the issuance by Holdings or any of its Subsidiaries of any
additional membership interests or other Capital Stock of Holdings or any of its Subsidiaries or
other Securities convertible into, exchangeable for or evidencing the right to subscribe for or
purchase, a membership interest or other Capital Stock of Holdings or any of its Subsidiaries.
Schedule 4.2 correctly sets forth the ownership interest of Parent and each of its Subsidiaries in
their respective Subsidiaries as of the Closing Date both before and after giving effect to the
Easton Acquisition.



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     Section 4.3 Due Authorization.



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



     Section 4.4 No Conflict.



     The execution, delivery and performance by Credit Parties of the Credit Documents to which
they are parties and the consummation of the transactions contemplated by the Credit Documents do
not and will not (a) violate any provision of any law or any governmental rule or regulation
applicable to Holdings or any of its Subsidiaries, any of the Organizational Documents of Holdings
or any of its Subsidiaries, or any order, judgment or decree of any court or other Governmental
Authority binding on Holdings or any of its Subsidiaries; (b) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation
of Holdings or any of its Subsidiaries; (c) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any
Liens created under any of the Credit Documents in favor of Collateral Agent, on behalf of Secured
Parties); or (d) require any approval of stockholders, unitholders, members or partners or any
approval or consent of any Person under any Contractual Obligation of Holdings or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lenders.



     Section 4.5 Governmental Consents.



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



     Section 4.6 Binding Obligation.



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



     Section 4.7 Historical Financial Statements.



     The Historical Financial Statements were prepared in conformity with GAAP (other than the pro
forma statements) and fairly present, in all material respects, the financial position, on a
consolidated basis, of the Persons described in such financial statements as at the respective



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dates thereof and the results of operations and cash flows, on a consolidated basis, of the
entities described therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal year-end adjustments and
in the case of interim statements, the absence of footnotes. As of the Closing Date, neither
Holdings nor any of its Subsidiaries has any contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the Historical Financial
Statements or the notes thereto and which in any such case is material in relation to the business,
results of operations, properties, assets, financial condition or prospects of Holdings and any of
its Subsidiaries taken as a whole.




     Section 4.8 Projections.



     On and as of the Closing Date, the Projections of Holdings and its Subsidiaries for the period
Fiscal Year 2006 through and including Fiscal Year 2012 (the “Projections”) are based on
good faith estimates and assumptions made by the management of Holdings; provided, the
Projections are not to be viewed as facts and that actual results during the period or periods
covered by the Projections may differ from such Projections and that the differences may be
material; provided further, as of the Closing Date, management of Holdings believed
that the Projections were reasonable.



     Section 4.9 No Material Adverse Change.



     Since September 30, 2005, no event, circumstance or change has occurred that has caused or
could reasonably be expected to cause, either individually or in the aggregate, a Material Adverse
Effect.



     Section 4.10 Insurance.



     The present insurance coverage of the Credit Parties and their Subsidiaries as of the Closing
Date is outlined as to carrier, policy number, expiration date, type and amount on Schedule 4.10
and such insurance coverage complies the requirements set forth in Section 5.5(b).



     Section 4.11 Adverse Proceedings, etc.



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



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     Section 4.12 Payment of Taxes.



     All federal and all material state, provincial and territorial tax returns and all other
material tax returns and reports of Holdings and each of its Subsidiaries required to be filed by
any of them have been timely filed, and all Taxes due and payable to the extent exceeding
$7,500,000 in the aggregate have been paid when due and payable, except (a) any Taxes that are
being contested by Holdings or such Subsidiary in good faith and by appropriate proceedings and for
which reserves or other appropriate provisions have been made or provided therefor in accordance
with GAAP or (b) as otherwise permitted under Section 5.3.



     Section 4.13 Properties.



     (a) Title. Each of Holdings and its Subsidiaries has, subject to Permitted Liens, (i)
good, sufficient and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal property), and (iii)
good title to (in the case of all other personal property), all of their respective properties and
assets reflected in their respective Historical Financial Statements referred to in Section 4.7 and
in the most recent financial statements delivered pursuant to Section 5.1, in each case except for
assets disposed of since the date of such financial statements in the ordinary course of business
or as otherwise permitted under Section 6.9. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.



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



     Section 4.14 Environmental Matters.



     None of Holdings or any of its Subsidiaries nor any of their respective past or present
Facilities or operations are subject to any outstanding written order, consent decree or settlement
agreement with any Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect. None of Holdings or any of its Subsidiaries has either been
notified in writing by a Governmental Agency or by any other Person that it may be a potentially
responsible party or received any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any
comparable state law which could reasonably be expected to have a Material Adverse



101









 




Effect. There are and, to each of Holdings’ and its Subsidiaries’ knowledge, have been, no
conditions, occurrences, or Hazardous Materials Activities which could reasonably be expected to
form the basis of an Environmental Claim against Holdings or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
None of Holdings or any of its Subsidiaries nor, to any Credit Party’s knowledge, any predecessor
of Holdings or any of its Subsidiaries has filed any notice under any Environmental Law indicating
past or present treatment of Hazardous Materials at any Facility, and none of Holdings’ or any of
its Subsidiaries’ operations involves the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent,
except as could not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Compliance with all current or reasonably foreseeable future or pending
requirements pursuant to or under Environmental Laws could not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect. No event or condition has occurred or
is occurring with respect to Holdings or any of its Subsidiaries relating to any Environmental Law,
any Release of Hazardous Materials, or any Hazardous Materials Activity which individually or in
the aggregate has had, or could reasonably be expected to have, a Material Adverse Effect.




     Section 4.15 No Defaults.



     Neither Holdings nor any of its Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual
Obligations, and no condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or indirect, of such default
or defaults, if any, could not reasonably be expected to have a Material Adverse Effect.



     Section 4.16 Material Contracts.



     Schedule 4.16 contains a true, correct and complete list of all the Material Contracts in
effect on the Closing Date, and except as described thereon, all such Material Contracts are in
full force and effect and no defaults currently exist thereunder.



     Section 4.17 Governmental Regulation.



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



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     Section 4.18 Margin Stock.



     Neither Holdings nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of purchasing or carrying
any Margin Stock. No part of the proceeds of the Loans made to such Credit Party will be used to
purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing
or carrying any such margin stock or for any purpose that violates, or is inconsistent with, the
provisions of Regulation T, U or X of said Board of Governors.



     Section 4.19 Employee Matters.



     None of Holdings or any of its Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect. There is (a) no unfair labor practice
complaint pending against Holdings or any of its Subsidiaries, or to the knowledge of Holdings and
the Company, threatened against any of them before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under any collective bargaining agreement
that is so pending against Holdings or any of its Subsidiaries or to the knowledge of Holdings and
the Company, threatened against any of them, (b) no strike or work stoppage in existence or to the
knowledge of Holdings threatened involving Holdings or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect, and (c) to the knowledge of Holdings and
the Company, no union representation question existing with respect to the employees of Holdings or
any of its Subsidiaries and, to the knowledge of Holdings and the Company, no union organization
activity that is taking place, except (with respect to any matter specified in clause (a), (b) or
(c) above, either individually or in the aggregate) such as is not reasonably likely to have a
Material Adverse Effect.



     Section 4.20 Employee Benefit Plans.



     To their individual and collective knowledge, Holdings and each of its Subsidiaries are in
compliance with all applicable provisions and requirements of ERISA and the Internal Revenue Code
and the regulations and published interpretations thereunder with respect to each Employee Benefit
Plan, and have performed all their obligations under each Employee Benefit Plan, except as would
not reasonably be expected to cause a Material Adverse Effect. Each Employee Benefit Plan which is
intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service indicating that such Employee Benefit Plan
is so qualified and nothing has occurred subsequent to the issuance of such determination letter
which would reasonably be expected to cause such Employee Benefit Plan to lose its qualified
status. No liability to the PBGC (other than required premium payments), any Employee Benefit Plan
(other than the payment of benefits in the ordinary course) or any trust established under Title IV
of ERISA has been or is expected to be incurred by Holdings, any of its Subsidiaries, or any ERISA
affiliate of Holdings except as would not reasonably be expected to cause a Material Adverse
Effect. No ERISA Event has occurred or is reasonably expected to occur except as would not
reasonably be expected to cause a Material Adverse Effect. Except for the continuation of health
care coverage described in Section 601 et.seq. of ERISA or similar state laws or as set forth on
Schedule 4.20, no Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any



103









 




retired or former employee of Holdings or any of its Subsidiaries or any of their respective
ERISA Affiliates. Holdings and its Subsidiaries and each of their ERISA Affiliates have complied
in all material respects with the requirements of Section 515 of ERISA with respect to each
Multiemployer Plan and are not in material “default” (as defined in Section 4219(c)(5) of ERISA)
with respect to payments to a Multiemployer Plan.




     Section 4.21 Certain Fees.



     No broker’s or finder’s fee or commission will be payable with respect hereto or any of the
transactions contemplated hereby.



     Section 4.22 Solvency.



     Each Credit Party is and, upon the incurrence of any Obligation by such Credit Party on any
date on which this representation and warranty is made, will be, Solvent.



     Section 4.23 Compliance with Statutes, etc.



     Each of Holdings and its Subsidiaries is in compliance with all applicable statutes,
regulations, decrees and orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its property
(including compliance with all applicable Environmental Laws with respect to any Real Estate Asset
or governing its business and the requirements of any permits issued under such Environmental Laws
with respect to any such Real Estate Asset or the operations of Holdings or any of its
Subsidiaries), except such non-compliance that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.



     Section 4.24 Disclosure.



     No factual information of any Credit Party contained in any Credit Document or in any other
documents, certificates or written statements furnished to Lenders by or on behalf of Holdings or
any of its Subsidiaries for use in connection with the transactions contemplated hereby contains
any untrue statement of a material fact or omits to state a material fact (known to Holdings or the
Company, in the case of any document not furnished by either of them) necessary in order to make
the statements contained herein or therein not misleading in light of the circumstances in which
the same were made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by Holdings or the Company
to be reasonable at the time made, it being recognized by Lenders that such projections as to
future events are not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results.




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     Section 4.25 Subordination. Designation of the Credit Documents as “Designated
Senior Debt”; Etc.



     (a) (i) The subordination provisions contained in documents governing the Senior Subordinated
Notes, the Refinancing Notes and the Additional Senior Subordinated Notes are enforceable against
Holdings, the Company and any of its Subsidiaries party thereto and the holders of such
Indebtedness, and (ii) all Obligations of the Credit Parties (to the extent they are obligors with
respect to the Senior Subordinated Notes, the Refinancing Notes or the Additional Senior
Subordinated Notes) hereunder and in the other Credit Documents are within the definitions of
“Designated Senior Debt” and “Senior Indebtedness” included in the respective subordination
provisions. In addition, the Company hereby designates the Obligations under this Agreement as
“Designated Senior Indebtedness” for the purposes of the definition of “Designated Senior
Indebtedness” contained in the Senior Subordinated Notes, the Refinancing Notes and the Additional
Senior Subordinated Notes.



     (b) All incurrence of Loans and issuances of Letters of Credit as permitted under this
Agreement are, and when incurred or issued will be, permitted under (and shall give rise to no
breach or violation of any of) the Senior Subordinated Notes, the Refinancing Notes or the
Additional Senior Subordinated Notes.



SECTION 5




AFFIRMATIVE COVENANTS




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



     Section 5.1 Financial Statements and Other Reports.



     The Company will deliver to Administrative Agent (and Administrative Agent shall promptly
deliver to each Lender):




     (a) Monthly Reports. As soon as available, and in any event within forty-five
(45) days after the end of each of the first three (3) months commencing with April 2006 and
thereafter within thirty (30) days after the end of each of the first two (2) months of any
Fiscal Quarter (beginning July 2006) and within forty-five (45) days after the end of the
calendar month that ends a Fiscal Quarter (or within one hundred-five (105) days after the
end of the calendar month that ends a Fiscal Year), the consolidated balance sheet of the
Company and its Subsidiaries as at the end of such month and the related consolidated
statements of income, stockholders’ equity and cash flows of the Company and its
Subsidiaries for such month and, commencing the month ended April 30, 2006, setting forth
in each case in comparative form the corresponding figures for the corresponding periods of
the previous Fiscal Year and the corresponding



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figures from the Financial Plan for the current Fiscal Year, to the extent prepared on
a monthly basis, all in reasonable detail (it being understood that such monthly statements
are not, for this purpose, required to be prepared in accordance with GAAP);




     (b) Quarterly Financial Statements. As soon as available, and in any event
within forty-five days (45) after the end of each of the first three Fiscal Quarters of each
Fiscal Year, the consolidated balance sheets of the Company and its Subsidiaries as at the
end of such Fiscal Quarter and the related consolidated statements of income, stockholders’
equity and cash flows of the Company and its Subsidiaries for such Fiscal Quarter and,
commencing the Fiscal Quarter ended March 31, 2006, setting forth in each case in respect of
each period on and after the first anniversary of the Closing Date, in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year, all in reasonable
detail, together with a Financial Officer Certification and a Narrative Report with respect
thereto;




     (c) Annual Financial Statements. As soon as available, and in any event within
one hundred-five (105) days after the end of each Fiscal Year, (i) the consolidated balance
sheets of the Company and its Subsidiaries as at the end of such Fiscal Year and the related
consolidated statements of income, stockholders’ equity and cash flows of the Company and
its Subsidiaries for such Fiscal Year and, commencing the Fiscal Year ended December 31,
2005, setting forth in comparative form the corresponding figures for the previous Fiscal
Year and the corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto; and (ii) with respect to such
consolidated financial statements a report thereon of Ernst & Young LLP or other independent
certified public accountants of recognized national standing selected by the Company, and
reasonably satisfactory to Administrative Agent (which report shall be unqualified as to
going concern and scope of audit, and shall state that such consolidated financial
statements fairly present, in all material respects, the consolidated financial position of
the Company and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years (except as otherwise disclosed in such financial
statements) and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally accepted
auditing standards) together with a written statement by such independent certified public
accountants stating (1) that their audit examination has included a review of the terms of
the Credit Documents, (2) whether, in connection therewith, any condition or event that
constitutes a Default or an Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period of
existence thereof, and (3) that nothing has come to their attention that causes them to
believe that the information contained in any Compliance Certificate is not correct or that
the matters set forth in such Compliance Certificate are not stated in accordance with the
terms hereof; it being understood that although such audit was conducted with respect to
accounting matters and was not directed primarily at determining the existence of a



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Default or an Event of Default, it did include a detailed review of the financial
covenants in Section 6.8;




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




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




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




     (g) Notice of Litigation. Promptly upon any officer of Holdings or the Company
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any Adverse
Proceeding not previously disclosed in writing by the Company to Lenders, or (ii) any
material development in any Adverse Proceeding that, in the case of either (i) or (ii) if
adversely determined, could be reasonably expected to have a Material Adverse Effect, or
seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated hereby, written notice thereof
together with such other information as may be reasonably available to Holdings or the
Company to enable Lenders and their counsel to evaluate such matters; provided,
that with respect to any product liability case (other than a product liability case
that could be reasonably expected to have a Material Adverse Effect) the Company shall be
required to furnish such notices only contemporaneously with the delivery of the financial
statements under Section 5.1(b) hereof;




     (h) ERISA. (i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof,
what action Holdings or any of its Subsidiaries or any of their then-existing



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ERISA Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the Department
of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of
(1) all notices received by Holdings or any of its Subsidiaries or any of their
then-existing ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event;
and (2) copies of such other documents or governmental reports or filings relating to any
Employee Benefit Plan (including without limitation any Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) filed by Holdings or any of its Subsidiaries or any
of their then-existing ERISA Affiliates with the Internal Revenue Service with respect to
each Pension Plan) as Administrative Agent shall reasonably request;




     (i) Financial Plan. As soon as practicable and in any event no later than
thirty days (30) after the beginning of each Fiscal Year, commencing with Fiscal Year 2007,
a consolidated plan and financial forecast for such Fiscal Year and each Fiscal Year (or
portion thereof) through the final maturity date of the Loans (a “Financial Plan”),
including (i) a forecasted consolidated balance sheet and forecasted consolidated statements
of income and cash flows of the Company and its Subsidiaries for each such Fiscal Year,
together with pro forma Compliance Certificates for each such Fiscal Year and an explanation
of the assumptions on which such forecasts are based, and (ii) forecasted consolidated
statements of income and cash flows of the Company and its Subsidiaries for each month of
the first Fiscal Year included in the Financial Plan;




     (j) Insurance Report. As soon as practicable and in any event by no later than
thirty (30) days after the beginning of each Fiscal Year, a summary report in form and
substance reasonably satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Holdings and its Subsidiaries and all
material insurance coverage planned to be maintained by Holdings and its Subsidiaries in the
immediately succeeding Fiscal Year;




     (k) Notice of Change in Board of Directors. With reasonable promptness,
written notice of any change in the board of directors (or similar governing body) of
Parent, Holdings or the Company;




     (l) Notice Regarding Material Contracts. Promptly, and in any event within ten
Business Days (i) after any Material Contract of Holdings or any of its Subsidiaries is
terminated or amended in a manner that is materially adverse to Holdings or such Subsidiary,
as the case may be, or (ii) any new Material Contract is entered into, a written statement
describing such event, with copies of such material amendments or new contracts, delivered
to Administrative Agent (to the extent such delivery is permitted by the terms of any such
Material Contract, provided, no such prohibition on delivery shall be effective if it were
bargained for by Holdings or its applicable Subsidiary with the intent of avoiding
compliance with this Section 5.1(l)), and an explanation of any actions being taken with
respect thereto;



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     (m) Information Regarding Collateral. (a) The Company will furnish to
Collateral Agent prompt written notice of any change (i) in any Credit Party’s
organizational name or adoption of a French form of name, (ii) in any Credit Party’s
identity or organizational structure (iii) in any Credit Party’s jurisdiction of
organization (to the extent permitted by the Collateral Documents) or (iv) in any Credit
Party’s Federal Taxpayer Identification Number or organizational identification number. The
Borrowers agree not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the UCC and PPSA, as applicable, or otherwise that
are required in order for Collateral Agent to continue at all times following such change to
have a valid, legal and perfected security interest in all the Collateral and for the
Collateral at all times following such change to have a valid, legal and perfected security
interest as contemplated in the Collateral Documents. The Company also agrees promptly to
notify Collateral Agent if any material portion of the Collateral is damaged or destroyed;




     (n) Annual Collateral Verification. Each year, at the time of delivery of
annual financial statements with respect to the preceding Fiscal Year pursuant to Section
5.1(c), the Company shall deliver to Collateral Agent an Officer’s Certificate either
confirming that there has been no material change in such information since the date of the
Collateral Questionnaire delivered on the Closing Date or the date of the most recent
certificate delivered pursuant to this Section and/or identifying such changes; and




     (o) Other Information. (A) Promptly upon their becoming available, copies of
(i) all financial statements, reports, notices and proxy statements sent or made available
generally by Parent to all of its security holders acting in such capacity or by any
Subsidiary of Parent to its security holders other than Holdings or another Subsidiary of
Holdings, (ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by Parent, Holdings or any of their Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any governmental or
private regulatory authority, (iii) all press releases and other statements made available
generally by Parent, Holdings or any of their Subsidiaries to the public concerning material
developments in the business of Holdings or any of its Subsidiaries, and (B) such other
information and data with respect to Holdings or any of its Subsidiaries as from time to
time may be reasonably requested by Administrative Agent or any Lender.



     Documents required to be delivered pursuant to Sections 5.1(a), 5.1(b), 5.1(c), 5.1(e) or
5.1(i) may be delivered electronically, and if so delivered, shall be deemed to have been delivered
on the date (i) on which the Company posts such documents or provides a link thereto on the
Company’s website on the Internet at the website address listed on Appendix A; or (ii) on which
such documents are posted on the Company’s behalf on IntraLinks/IntraAgency or another relevant
website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent);
provided, however, that: (x) the Company shall deliver paper copies of such
documents to the Administrative Agent until a written request to cease delivering paper copies is
given by the Administrative Agent and (y) the Company shall notify (which may be by facsimile or
electronic



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mail) the Administrative Agent of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Company shall be required to
provide paper copies of the Compliance Certificates to the Administrative Agent. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery
or to maintain copies of the documents referred to above, and in any event shall have no
responsibility to monitor compliance by the Company with any such request for delivery.




     Section 5.2 Existence.



     Except as otherwise permitted under Section 6.9, each Credit Party will, and will cause each
of its Subsidiaries to, at all times preserve and keep in full force and effect its existence and
all rights and franchises, licenses and permits material to its business; provided, no
Credit Party or any of its Subsidiaries shall be required to preserve any such right or franchise,
licenses and permits if the preservation thereof is no longer desirable in the conduct of the
business of such Person, and that the loss thereof is not disadvantageous in any material respect
to such Person or to Lenders.



     Section 5.3 Payment of Taxes and Claims.



     Each Credit Party will, and will cause each of its Subsidiaries to, pay all Taxes in excess of
$7,500,000 in the aggregate imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty or fine accrues thereon, and all claims
(including claims for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or assets, prior to
the time when any penalty or fine shall be incurred with respect thereto; provided, no such
Tax or claim need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (i) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made therefor, and (ii) in
the case of a Tax or claim which has or may become a Lien against any of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the Collateral to
satisfy such Tax or claim. None of the Credit Parties will, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax return with any
Person (other than Holdings or any of its Subsidiaries).



     Section 5.4 Maintenance of Properties.



     Each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of Holdings and its Subsidiaries and from time
to time will make or cause to be made all appropriate repairs, renewals and replacements thereof;
provided, no Credit Party or any of its Subsidiaries shall be required to maintain or cause
to be maintained in good repair, working order and condition, any property if no longer desirable
in the conduct of the business of such Person, and the loss or disrepair thereof is not
disadvantageous in any material respect to such Person or to the Lenders.



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     Section 5.5 Insurance.



     Holdings will maintain or cause to be maintained, with financially sound and reputable
insurers, such public liability insurance, third party property damage insurance, business
interruption insurance and casualty insurance with respect to liabilities, losses or damage in
respect of the assets, properties and businesses of Holdings and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on such terms and
conditions as shall be customary for such Persons. Without limiting the generality of the
foregoing, Holdings will maintain or cause to be maintained (a) flood insurance with respect to
each Flood Hazard Property that is located in a community that participates in the National Flood
Insurance Program, in each case in compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System and (b) replacement value property insurance on the
Collateral under such policies of insurance, with such insurance companies, in such amounts, with
such deductibles, and covering such risks as are at all times carried or maintained under similar
circumstances by Persons of established reputation engaged in similar businesses. Each such policy
of insurance shall (i) name Collateral Agent, on behalf of the Secured Parties as an additional
insured thereunder as its interests may appear and (ii) in the case of each casualty insurance
policy contain a loss payable clause or endorsement, reasonably satisfactory in form and substance
to Collateral Agent, that names Collateral Agent, on behalf of the Secured Parties as the loss
payee thereunder for any covered loss (after giving effect to any deductible) in excess of $500,000
and provides for at least thirty days’ prior written notice to Collateral Agent of any modification
or cancellation of such policy.



Section 5.6 Inspections.




     Each Credit Party will, and will cause each of its Subsidiaries to, permit any authorized
representatives designated by any Lender to visit and inspect any of the properties of any Credit
Party and any of its respective Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances and accounts with
its and their officers and independent public accountants, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be requested;
provided, however, that each Lender shall at all times coordinate with the
Administrative Agent regarding the frequency and timing of such visits and inspections so as to
reasonably minimize the burden imposed on the Credit Parties.



     Section 5.7 Compliance with Laws.



     Each Credit Party will comply, and shall cause each of its Subsidiaries and use commercially
reasonable efforts to cause all other Persons, if any, on or occupying any Facilities to comply,
with the requirements of all applicable laws, rules, regulations and orders of any Governmental
Authority (including all Environmental Laws), noncompliance with which could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.



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     Section 5.8 Environmental.



     (a) Environmental Disclosure. Holdings will deliver to Administrative Agent:




     (i) as soon as practicable following receipt thereof, copies of all environmental
audits, investigations, analyses and reports (including any Phase I Reports) of any kind or
character, whether prepared by personnel of Holdings or any of its Subsidiaries or by
independent consultants, Governmental Authorities or any other Persons, with respect to
material environmental matters at any Facility or with respect to any Environmental Claims
which could reasonably be expected to have a Material Adverse Effect;




     (ii) promptly upon the occurrence thereof, written notice describing in reasonable
detail (1) any Release required to be reported to any Governmental Authority under any
applicable Environmental Laws other than any report (A) in the ordinary course of business
required under any Environmental Law (or any Governmental Authorization issued thereunder)
and (B) in material compliance with Environmental Law and that does not have a reasonable
possibility of becoming an Environmental Claim which could reasonably be expected to have a
Material Adverse Effect, (2) any remedial action taken by Holdings or any other Person in
response to (A) any Hazardous Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims having, individually or in the
aggregate, a Material Adverse Effect, or (B) any Environmental Claims that, individually or
in the aggregate, have a reasonable possibility of resulting in a Material Adverse Effect,
and (3) Holdings or the Company’s discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could cause such Facility or any
part thereof to be subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws;




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




     (iv) prompt written notice describing in reasonable detail (1) any proposed acquisition
of equity interests, assets, or property by Holdings or any of its Subsidiaries that could
reasonably be expected to (A) expose Holdings or any of its Subsidiaries to, or result in,
Environmental Claims that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (B) affect the ability of Holdings or any of its
Subsidiaries to maintain in full force and effect all material Governmental Authorizations
required under any Environmental Laws for their respective operations and (2) any proposed
action to be taken by Holdings or any of its Subsidiaries to modify



112









 







current operations in a manner that could reasonably be expected to subject Holdings or
any of its Subsidiaries to any additional material obligations or requirements under any
Environmental Laws; and




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



     (b) Hazardous Materials Activities. Each Credit Party shall, at its sole cost and
expense, promptly take, and shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any violation of applicable Environmental Laws by such Credit Party
or its Subsidiaries that could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (ii) reasonably effectuate remediation of any Hazardous Materials in, on,
under or from any Facility or otherwise related to any Hazardous Material Activity which could
reasonably be expected to have a Material Adverse Effect that may be required (A) under any
Environmental Law or (B) under any reasonable written request of Administrative Agent, and (iii)
make an appropriate response to any Environmental Claim against such Credit Party or any of its
Subsidiaries and discharge any obligations it may have to any Person thereunder where failure to do
so could reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect.



     (c) Environmental Covenants. Each Credit Party will take, and shall cause each of its
Subsidiaries to take, such actions as reasonably necessary to ensure that: (a) all uses and
operations on or of any Facility shall be in material compliance with all Environmental Laws and
Governmental Authorizations issued pursuant thereto; (b) there shall be no Releases of Hazardous
Materials in, on, under or from any Facility that would be reasonably likely to result in an
Environmental Claim which could reasonably be expected to have a Material Adverse Effect; and (c)
there shall be no Hazardous Materials in, on, or under any Facility, except those that are both (i)
in material compliance with all Environmental Laws and with Governmental Authorizations issued
pursuant thereto, if and to the extent required, and (ii) in amounts not in material excess of that
reasonably necessary to operate the Facility for the purposes set forth herein.



     Section 5.9 Subsidiaries.



     (a) In the event that any Person becomes a wholly-owned Domestic Subsidiary of Holdings
(excluding any Immaterial Subsidiary), the Company shall (a) promptly cause such Domestic
Subsidiary to become a Guarantor hereunder and a Grantor under the U.S. Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral Agent a Counterpart
Agreement, and (b) take all such actions and execute and deliver, or cause to be executed and
delivered, all such documents, instruments, agreements, and certificates as are similar to those
described in Sections 3.1(b), 3.1(i), 3.1(j), 3.1(k) and 3.1(m). In the event that any Person
becomes a Foreign Subsidiary of the Company, and the ownership interests of such Foreign Subsidiary
are owned by the Company or by any wholly-owned Domestic Subsidiary thereof, the Company shall, or
shall cause such Domestic Subsidiary to, deliver, all such documents, instruments, agreements, and
certificates as are similar to those described in



113









 




Sections 3.1(b), and the Company shall take, or shall cause such Domestic Subsidiary to take,
all of the actions referred to in Section 3.1(j)(i) necessary to grant and to perfect a First
Priority Lien in favor of Collateral Agent, for the benefit of Secured Parties, under the U.S.
Pledge and Security Agreement in 65% of such ownership interests. With respect to each such
Subsidiary, the Company shall promptly send to Administrative Agent written notice setting forth
with respect to such Person (i) the date on which such Person became a Subsidiary of Holdings, and
(ii) all of the data required to be set forth in Schedules 4.1 and 4.2 with respect to all
Subsidiaries of the Company; provided, such written notice shall be deemed to supplement
Schedule 4.1 and 4.2 for all purposes hereof. Notwithstanding the foregoing, perfection of the
Collateral shall not be required where the burden of perfecting a security interest, lien or
mortgage is reasonably determined by the Collateral Agent to be excessive in relation to the
benefit afforded to the Lenders thereby.




     (b) In the event that any Person becomes a Canadian Subsidiary of Holdings, the Company shall
(a) promptly cause such Canadian Subsidiary to become a Canadian Borrower or a Canadian Guarantor
hereunder and a Grantor under the Canadian Security Agreement by executing and delivering to
Canadian Agent and Collateral Agent a Counterpart Agreement, and (b) take all such actions and
execute and deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections 3.1(b), 3.1(i), 3.1(j),
3.1(k) and 3.1(m). With respect to each such Canadian Subsidiary, the Company shall promptly send
to Administrative Agent and Canadian Agent written notice setting forth with respect to such Person
(i) the date on which such Person became a Canadian Subsidiary of Holdings, and (ii) all of the
data required to be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of
Holdings; provided, such written notice shall be deemed to supplement Schedule 4.1 and 4.2
for all purposes hereof. Notwithstanding the foregoing, perfection of the Collateral shall not be
required where the burden of perfecting a security interest, lien or mortgage is reasonably
determined by Canadian Agent to be excessive in relation to the benefit afforded to the Lenders
thereby.



     Section 5.10 Additional Material Real Estate Assets.



     In the event that any Credit Party acquires a Material Real Estate Asset or a Real Estate
Asset owned or leased on the Closing Date becomes a Material Real Estate Asset and such interest
has not otherwise been made subject to the Lien of the Collateral Documents in favor of Collateral
Agent, for the benefit of Secured Parties, then such Credit Party, as soon as practical after and,
in any event, no later than sixty (60) days after acquiring such Material Real Estate Asset, shall
take all such actions and execute and deliver, or cause to be executed and delivered, all such
mortgages, documents, instruments, agreements, opinions and certificates similar to those described
in Sections 3.1(i), 3.1(j) and 3.1(k) with respect to each such Material Real Estate Asset that
Collateral Agent shall reasonably request to create in favor of Collateral Agent, for the benefit
of Secured Parties, a valid and, subject to any filing and/or recording referred to herein,
perfected First Priority security interest in such Material Real Estate Assets. In addition to the
foregoing, the Company shall, at the request of Requisite Lenders, deliver, from time to time, to
Administrative Agent such appraisals as are required by law or regulation of Real Estate Assets
with respect to which Collateral Agent has been granted a Lien. Notwithstanding the foregoing,
perfection of the Collateral shall not be required where the burden of perfecting a



114









 







security interest, lien or mortgage is reasonably determined by the Collateral Agent to be
excessive in relation to the benefit afforded to the Lenders thereby.



     Section 5.11 Interest Rate Protection.



     No later than ninety (90) days following the Closing Date and at all times thereafter, the
Company shall maintain, or cause to be maintained, in effect one or more Interest Rate Agreements
for a term of not less than one (1) year and otherwise in form and substance reasonably
satisfactory to Administrative Agent, such that the amount of not less than 50.0% of the aggregate
principal amount of the total Indebtedness for borrowed money (excluding Revolving Loans, Letters
of Credit, Swingline Loans and other revolving line of credit of the Company or any Subsidiary) of
the Company and its Subsidiaries outstanding from time to time (based on the assumption that such
notional principal amount was a Eurodollar Rate Loan with an Interest Period of three months) shall
be either (i) fixed rate Indebtedness or (ii) subject to Interest Rate Agreements effectively
limiting the Unadjusted Eurodollar Rate Component of the interest costs to the Company to a rate
reasonably acceptable to the Administrative Agent.



     Section 5.12 Further Assurances.



     At any time or from time to time upon the request of Administrative Agent, each Credit Party
will, at its expense, promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent or Collateral Agent may reasonably request to ensure
that the Obligations are guarantied by the Guarantors and are secured by substantially all of the
assets of Holdings, and its Subsidiaries and all of the outstanding Capital Stock of the Company
and its Subsidiaries (subject to limitations contained in the Credit Documents with respect to
Foreign Subsidiaries). In addition, each Credit Party will provide Lenders with any information
requested pursuant to Section 10.21.



     Section 5.13 Cash Management Systems.



     Schedule 5.13 lists all Deposit Accounts, Securities Accounts and Commodities Accounts opened
or maintained by Holdings and its Subsidiaries. None of Holding or any Credit Party shall be
required to enter into a Control Agreement with respect to (x) any Excluded Accounts or (y) any
other Deposit Accounts, Securities Accounts or Commodities Accounts opened or maintained by
Holdings or its Subsidiaries (such accounts, “Non-Excluded Accounts”) to the extent that
the aggregate average available daily balance over the immediately preceding 12-month period for
all such Non-Excluded Accounts shall not at any time exceed $5,000,000; provided that to
the extent such balance exceeds $5,000,000, Holdings and its Subsidiaries agree to promptly (but in
no case longer than the greater of (i) 60 days or (ii) such longer period as agreed to by the
Collateral Agent in its reasonable judgment) grant Control over certain Non-Excluded Accounts not
covered by Control Agreements, as selected by Holdings and its Subsidiaries, such that immediately
after implementing Control Agreements, such balance as recalculated shall not exceed $5,000,000.
For purposes of this Section 5.13, “Excluded Accounts” includes (A) any Deposit Account for which
Collateral Agent is the bank, (B) any Securities Account or Commodities Account for which
Collateral Agent is the securities intermediary or the commodity intermediary, respectively, (C)
any Deposit Account maintained



115









 







solely for payroll purposes or holding solely restricted cash in connection with
self-insurance programs, (D) any Securities Account, Deposit Account or Commodities Account held
outside the United States of America, (E) during the nine-month period following the Easton
Acquisition, any Deposit Accounts, Securities Accounts and Commodities Accounts acquired by
Holdings or its Subsidiaries in connection with the Easton Acquisition and (F) during a six-month
period following any Permitted Acquisition after the Closing Date, any Deposit Accounts, Securities
Accounts and Commodities Accounts acquired by Holdings or its Subsidiaries in connection with such
Permitted Acquisition.



     Section 5.14 Certain Post-Closing Obligations.




     (a) Landlord Waiver and Consent Agreements. Within 30 days after the Closing
Date (or such extended period of time as approved by Administrative Agent), the Credit
Parties shall use commercially reasonable efforts to deliver to the Administrative Agent
Landlord Waiver and Consent Agreements for the Leasehold Properties listed on Schedule
3.1(i).




     (b) Intellectual Property. Within 90 days after the Closing Date (or such
extended period of time as agreed to by the Administrative Agent), to the extent reasonably
required by the Administrative Agent, the Credit Parties shall provide evidence reasonably
satisfactory to the Administrative Agent that all chain of title issues (including
unreleased filings related to Liens that have previously been terminated) with respect to
the material intellectual property of Holdings and its Subsidiaries registered with the
United States Patent and Trademark Office as set forth on Schedule 4.7 of the U.S. Pledge
and Security Agreement have been corrected in the appropriate records of the United States
Patent and Trademark Office.




     (c) Pledged Common Stock. Within 60 days after the Closing Date (or such
extended period of time as agreed to by the Administrative Agent), the Credit Parties shall
deliver to the Administrative Agent such stock certificates of Easton S.A. de C.V., as
Collateral, representing 65% of the Class A and Class B shares of Common Stock together with
all other documents necessary and advisable to perfect the Collateral Agent’s security
interest in such stock certificates.




     (d) Zoning Letter. Within 10 days after the Closing Date (or such extended
period of time as approved by the Administrative Agent), the Credit Parties shall use
commercially reasonable efforts to deliver to Lawyers Title Insurance Company, a zoning
letter for the Chicago Real Property from the Zoning Department of the City of Chicago.



SECTION 6




NEGATIVE COVENANTS




     Each Credit Party covenants and agrees that, so long as any Commitment is in effect and until
payment in full of all Obligations and cancellation or expiration of all Letters of Credit,



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such Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.




     Section 6.1 Indebtedness.



     No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness, except:




     (a) the Obligations (including under Section 2.25);




     (b) Indebtedness of any Subsidiary to the Company or to any other Subsidiary, or of the
Company to any Subsidiary; provided, (i) all such Indebtedness shall be evidenced by
promissory notes and all such notes held by a Credit Party shall be subject to a First
Priority Lien pursuant to the Collateral Documents, (ii) all such Indebtedness owed by a
Credit Party shall be unsecured and subordinated in right of payment to the payment in full
of the Obligations pursuant to the terms of the applicable promissory notes or an
intercompany subordination agreement that in any such case, is reasonably satisfactory to
Administrative Agent, and (iii) any payment by any such Subsidiary under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any Indebtedness owed by
such Subsidiary to the Company or to any of its Subsidiaries for whose benefit such payment
is made; provided further that Indebtedness of Subsidiaries that are not
Guarantors hereunder owed to any Credit Party (together with any guarantees by a Credit
Party of Indebtedness of such Subsidiaries pursuant to Section 6.1(g) or other Investments
in such Subsidiaries by a Credit Party pursuant to Section 6.7(b)) shall not exceed in the
aggregate $20,000,000 at any time outstanding;




     (c) Indebtedness incurred by the Company or any of its Subsidiaries arising from
agreements of the Company and its Subsidiaries providing for indemnification, adjustment of
purchase price or similar obligations, or from guaranties or letters of credit, surety bonds
or performance bonds securing the performance of the Company or any such Subsidiary pursuant
to such agreements, in connection with Permitted Acquisitions or permitted dispositions of
any business, assets or Subsidiary of Holdings or any of its Subsidiaries;




     (d) Indebtedness which may be deemed to exist pursuant to any guaranties, performance,
surety, statutory, appeal or similar obligations incurred in the ordinary course of
business;




     (e) Indebtedness in respect of netting services, overdraft protections and otherwise in
connection with deposit accounts;




     (f) guaranties in the ordinary course of business of the obligations of suppliers,
customers, franchisees and licensees of the Company and its Subsidiaries;



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     (g) guaranties by the Company of Indebtedness of a Subsidiary or guaranties by a
Subsidiary of the Indebtedness of the Company or any other Subsidiary with respect, in each
case, to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.1,
provided that guarantees by Credit Parties of Indebtedness of Subsidiaries that are
not Guarantors hereunder (together with any Indebtedness of such Subsidiaries to Credit
Parties pursuant to Section 6.1(b) or other Investments in such Subsidiaries by a Credit
Party pursuant to Section 6.7(b)) shall not exceed in the aggregate $20,000,000 at any time
outstanding;




     (h) Indebtedness described in Schedule 6.1, but not any extensions, renewals or
replacements of such Indebtedness except (i) renewals and extensions expressly provided for
in the agreements evidencing any such Indebtedness as the same are in effect on the date of
this Agreement and (ii) refinancings and extensions of any such Indebtedness if the terms
and conditions thereof are not less favorable in any material respect to the obligor thereon
or to the Lenders than the Indebtedness being refinanced or extended, and the average life
to maturity thereof is greater than or equal to that of the Indebtedness being refinanced or
extended; provided, such Indebtedness permitted under the immediately preceding
clause (i) or (ii) above shall not (A) include Indebtedness of an obligor that was not an
obligor with respect to the Indebtedness being extended, renewed or refinanced (unless
otherwise permitted to be incurred by another clause of this Section 6.1), (B) exceed in a
principal amount the Indebtedness being renewed, extended or refinanced (plus accrued
interest or premium thereof) or (C) be incurred, created or assumed if any Default or Event
of Default has occurred and is continuing or would result therefrom;




     (i) Indebtedness with respect to (i) Capital Leases in an aggregate amount not to
exceed at any time $5,000,000 when aggregated with outstanding Indebtedness permitted
pursuant to Section 6.1(j) and (ii) the Existing Capital Leases;




     (j) purchase money Indebtedness in an aggregate amount not to exceed at any time
$5,000,000 when aggregated with indebtedness pursuant to clause (i) of Section 6.1(i);
provided, any such Indebtedness (i) shall be secured only to the asset acquired in
connection with the incurrence of such Indebtedness, and (ii) shall constitute not more than
75% of the aggregate consideration paid with respect to such asset;




     (k) Senior Subordinated Notes and senior subordinated unsecured debt securities issued
to redeem the Senior Subordinated Notes in full, in an amount of up to the aggregate
outstanding principal amount of the Senior Subordinated Notes (but in any event not to
exceed $140,000,000) plus any reasonable and customary transaction costs and fees (approved
by the Administrative Agent) and accrued interest and required premium incurred in
connection therewith (the “Refinancing Notes”); provided that the proceeds
thereof are used to prepay or redeem the Senior Subordinated Notes or a portion thereof, and
reasonable and customary fees, commissions, legal fees and other costs and expenses incurred
in connection with such issuance and redemption or prepayment; provided
further that (i)(A) the terms of such additional Indebtedness shall not contain any
cross-default provisions (other than for material non-payment, and may include a



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cross-acceleration provision), (B) the terms of such additional Indebtedness shall not
contain any financial maintenance covenants, (C) such additional Indebtedness shall not be
secured by any asset of Company or any of its Subsidiaries (other than restricted Cash or
Cash Equivalents allocated from the funds representing such Indebtedness securing prefunded
interest payments), (D) no portion of the principal of such additional Indebtedness shall be
scheduled to be redeemed, repurchased or otherwise repaid or prepaid (other than as a result
of a change of control, acceleration or such other provision as shall be customary for
comparable high-yield debt securities) prior to the date that is six months after the Term
Loan Maturity Date, (E) such Indebtedness shall otherwise, taken as a whole, be on terms no
less favorable in any material respect to the Lenders than the terms of the Senior
Subordinated Notes and (F) such Indebtedness is subordinated in right of payment to the
Obligations under this Agreement on terms at least as favorable in all material respects to
the Lenders as those contained in the documentation governing the Senior Subordinated Notes;
and (ii) after giving effect to the incurrence of such Indebtedness, (A) Company and its
Subsidiaries shall be in pro forma compliance with the financial covenants set forth in
Section 6.8 and (B) no Default or Event of Default shall exist or would result therefrom;




     (l) Indebtedness under Hedge Agreements, Secured Hedge Agreements or any commodities
hedging agreement entered into for the purpose of hedging risks associated with Holdings’
and its Subsidiaries’ operations and not for speculative purposes;




     (m) Indebtedness of any Foreign Subsidiary, consisting of local lines of credit
incurred in the ordinary course of business of such Foreign Subsidiary and not guaranteed by
Holdings, the Company or a Guarantor Subsidiary, in an aggregate amount not to exceed at any
time the U.S. Dollar equivalent of $15,000,000;




     (n) (i) Indebtedness of any Subsidiary of Holdings assumed in connection with a
Permitted Acquisition existing at the time of such Permitted Acquisition was consummated;
provided that (A) such Indebtedness was not incurred in connection with or in
anticipation of such Permitted Acquisition and (B) the aggregate amount of Indebtedness
permitted by this subsection (n) (including subclause (ii)) shall not exceed $10,000,000 at
any time outstanding, and (ii) any refinancings, renewals and replacements of any such
Indebtedness pursuant to the preceding clause (i) that do not increase the outstanding
principal amount (plus accrued interest and premium) thereof;




     (o) other unsecured Indebtedness of the Company and its Domestic Subsidiaries in an
aggregate amount not to exceed at any time $20,000,000; and




     (p) senior subordinated unsecured debt securities (x) the net proceeds of which are
used to (A) consummate one or more Permitted Acquisitions or (B) prepay Term Loans and (y)
in an amount not to exceed $25,000,000 aggregate principal amount (the “Additional
Senior Subordinated Notes”); provided further that (i)(A) the terms of
such additional Indebtedness shall not contain any cross-default provisions (other than for
material non-payment, and may include a cross-acceleration provision), (B) the terms of



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such additional Indebtedness shall not contain any financial maintenance covenants, (C)
such additional Indebtedness shall not be secured by any asset of Holdings or any of its
Subsidiaries (other than restricted Cash or Cash Equivalents allocated from the funds
representing such Indebtedness securing prefunded interest payments), (D) no portion of the
principal of such additional Indebtedness shall be scheduled to be redeemed, repurchased or
otherwise repaid or prepaid (other than as a result of a change of control, acceleration or
such other provision as shall be customary for comparable high-yield debt securities) prior
to the date that is six months after the Term Loan Maturity Date, and (E) such Indebtedness
shall otherwise, taken as a whole, be on terms no less favorable to the Lenders in any
material respect than the terms of the Senior Subordinated Notes; (ii) such Indebtedness is
subordinated in right of payment to the Obligations under this Agreement on terms at least
as favorable in all material respects to the Lenders as those contained in the documentation
governing the Senior Subordinated Notes and (iii) to the extent the net cash proceeds of
such incurrence are used to consummate one or more Permitted Acquisitions, after giving
effect to the incurrence of such Indebtedness, (A) Company and its Subsidiaries shall be in
pro forma compliance with the financial covenants set forth in Section 6.8, (B) the Leverage
Ratio calculated as of the last day of the most recently ended Fiscal Quarter, determined on
a pro forma basis giving effect to the incurrence of such Indebtedness, is no greater than
the maximum Leverage Ratio permitted as of such date pursuant to Section 6.8 less
0.25 and (C) no Default or Event of Default shall exist or would result therefrom.



     Section 6.2 Liens.



     No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with respect to any property or asset of
any kind (including any document or instrument in respect of goods or accounts receivable) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or any income or
profits therefrom, or file or permit the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or PPSA of any jurisdiction or under any similar recording or notice statute,
except:




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




     (b) Liens for Taxes not then due or if due if obligations with respect to such Taxes
are being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted;




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



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reserves or other appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts;




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




     (e) easements, rights-of-way, restrictions, encroachments, and other minor defects or
irregularities in title, in each case which do not and will not interfere in any material
respect with the ordinary conduct of the business of Holdings or any of its Subsidiaries;




     (f) any interest or title of a lessor or sublessor under any lease of real estate
permitted hereunder and any restriction, lien or encumbrance that the interest or title of
such lessor or sublessor may be subject to;




     (g) Liens solely on any cash earnest money deposits made by Holdings or any of its
Subsidiaries in connection with any letter of intent or purchase agreement permitted
hereunder;




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




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




     (j) any zoning or similar law or right reserved to or vested in any governmental office
or agency to control or regulate the use of any real property;




     (k) (i) licenses of copyrights, patents, trademarks and other intellectual property
rights granted by Holdings or any of its Subsidiaries in the ordinary course of business and
not interfering in any material respect with the ordinary conduct of the business of the
Company or such Subsidiary and (ii) leases or subleases granted by Holdings or any of its
Subsidiaries to third parties in respect of surplus property which is not fundamental to the
operation of the business in the ordinary course of business; provided that such
leases and subleases are on arms-length, commercial terms and otherwise satisfactory to the
Administrative Agent;




     (l) Liens described in Schedule 6.2 or on a title report delivered pursuant to Section
3.1(i)(iii);



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     (m) Liens securing Indebtedness permitted pursuant to 6.1(i) and 6.1(j);
provided, any such Lien shall encumber only the asset acquired with the proceeds of
such Indebtedness;




     (n) Liens securing Indebtedness of Foreign Subsidiaries permitted pursuant to Section
6.1(m) provided that such Liens only attach to the assets of Foreign Subsidiaries;




     (o) Liens securing Indebtedness permitted by Section 6.1(n);




     (p) Liens securing judgments for the payment of money (except to the extent giving rise
to an Event of Default under Section 8.1(h));




     (q) Liens that are contractual rights of setoff (i) relating to the establishment of
depository relations with banks not given in connection with the issuance of Indebtedness or
(ii) pertaining to pooled deposit and/or sweep accounts of the Company and/or any Subsidiary
of the Company to permit satisfaction of overdraft or similar obligations incurred in the
ordinary course of business of the Company and the Subsidiaries of the Company;




     (r) Liens in favor of a Lender Counterparty in connection with any Secured Hedge
Agreement, but only if such Lender Counterparty and the Administrative Agent, on behalf of
the Lenders, shall share pari passu in the collateral subject to such Liens;




     (s) Liens on documents of title and the property covered thereby securing Indebtedness
in respect of commercial letters of credit;




     (t) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Company and its Subsidiaries in the
ordinary course of business and constitute Asset Sales or sales or other dispositions of
assets that do not constitute Asset Sales; and




     (u) other Liens securing Indebtedness in an aggregate amount not to exceed $5,000,000
at any time outstanding.



     Section 6.3 Equitable Lien.



     If any Credit Party shall create or assume any Lien upon any of its properties or assets,
whether now owned or hereafter acquired, other than Permitted Liens, it shall make or cause to be
made effective provisions whereby the Obligations will be secured by such Lien equally and ratably
with any and all other Indebtedness secured thereby as long as any such Indebtedness shall be so
secured; provided, notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.



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     Section 6.4 No Further Negative Pledges.



     Except with respect to (a) specific property encumbered to secure payment of particular
Indebtedness or to be sold pursuant to an executed agreement with respect to a permitted Asset
Sale; (b) restrictions contained in agreements with respect to Indebtedness incurred by
Subsidiaries that are not Guarantors in accordance with this Agreement (provided that such
restrictions are limited to the property or assets of such Subsidiary and its Subsidiaries); (c)
restrictions contained in the Senior Subordinated Notes Indenture, any Refinancing Notes Indenture
or any Additional Senior Subordinated Notes Indenture; (d) restrictions by reason of customary
provisions restricting assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided that such restrictions
are limited to the property or assets secured by such Liens or the property or assets subject to
such leases, licenses or similar agreements, as the case may be); (e) Liens permitted to be
incurred under Section 6.2 and restrictions in the agreements relating thereto that limit the right
of the Company to dispose of or transfer the assets subject to such Liens; (f) provisions limiting
the disposition or distribution of assets or property in joint venture agreements, sale-leaseback
agreements, stock sale agreements and other similar agreements, which limitation is applicable only
to the assets that are the subject of such agreements; (g) any encumbrance or restriction in
connection with an acquisition of property, so long as such encumbrance or restriction relates
solely to the property so acquired and was not created in connection with or in anticipation of
such acquisition; (h) restrictions imposed by customary provisions in partnership agreements,
limited liability company organizational governance documents, joint venture agreements and other
similar agreements that restrict the transfer of ownership interests in such partnership, limited
liability company, joint venture or similar Person, (i) restrictions contained in agreements
existing at the time any Person becomes a Subsidiary, so long as such agreement was not entered
into solely in contemplation of such Person becoming a Subsidiary, and (j) restrictions on cash or
other deposits of customers under contracts entered into in the ordinary course of business, no
Credit Party nor any of its Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned or hereafter
acquired.



Section 6.5 Restricted Junior Payments.




     No Credit Party shall, nor shall it permit any of its Subsidiaries through any manner or means
or through any other Person to, directly or indirectly, declare, order, pay, make or set apart, or
agree to declare, order, pay, make or set apart, any sum for any Restricted Junior Payment except
that (a) the Company may make regularly scheduled payments of interest in respect of Senior
Subordinated Notes, Refinancing Notes and Additional Senior Subordinated Note in accordance with
the terms of, and only to the extent required by, and subject to the subordination provisions
contained in, the indenture or other agreement pursuant to which such Subordinated Indebtedness was
issued; (b) the Company may prepay or redeem the Senior Subordinated Notes in full with the
proceeds of the Refinancing Notes; (c) so long as no Default or Event of Default shall have
occurred and be continuing or shall be caused thereby, the Company may make Restricted Junior
Payments to Holdings to pay any non-recurring fees, cash charges and cost expenses incurred in
connection with the issuance by Holdings or Parent of Capital Stock (or capital contribution in
respect thereof) or Indebtedness, in each case only to the



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extent that such transaction is not consummated; (d) so long as no Default or Event of Default
shall have occurred and be continuing or shall be caused thereby, to the extent permitted by
Section 2.15(c), the Company may prepay or redeem the Senior Subordinated Notes, Additional Senior
Subordinated Notes and Refinancing Notes in an aggregate amount not to exceed the Cash proceeds of
any issuance of Capital Stock of Parent, Holdings or any of their respective Subsidiaries (or
capital contribution in respect thereof); (e) the Company may make Restricted Junior Payments to
Holdings (and Holdings may make Restricted Junior Payments to Parent) (i) in an aggregate amount
not to exceed $400,000 in any Fiscal Year, to the extent necessary to permit Holdings or Parent to
pay general administrative costs and expenses (including franchise taxes) and (ii) to the extent
necessary to permit Holdings or Parent to discharge the consolidated tax liabilities of Holdings or
Parent and its Subsidiaries, in each case so long as Holdings applies the amount of any such
Restricted Junior Payment for such purpose; (f) the Company may on the Closing Date pay a Sponsor
Fee to the Sponsors pursuant to and as expressly required by the Sponsor Agreement and reimburse
the Sponsors for reasonable out of pocket fees, costs and expenses incurred in connection with the
Transactions within three hundred (300) days of the Closing Date; (g) so long as no Default or
Event of Default pursuant to Sections 8.1(a), 8.1(g) or 8.1(h) shall have occurred and be
continuing or shall be caused thereby, the Company may pay the Sponsor Fees (plus reasonable
expenses in connection with the Sponsor Agreement and unpaid amounts accrued for prior periods);
(h) so long as no Default or Event of Default shall have occurred and be continuing or shall be
caused thereby, the Company and Holdings may declare and pay dividends or make other distributions
to Parent the proceeds of which are to be used by Parent to purchase or redeem Capital Stock of
Parent (including related stock appreciation rights or similar securities) held by then present or
former officers or employees of Holdings, Company or any of their Subsidiaries or by any Pension
Plan upon such person’s death, disability, retirement or termination of employment or under the
terms of any such Pension Plan or any other agreement under which such shares of stock or related
rights were issued or to redeem any notes issued by the Parent in lieu of such repurchases or
redemptions; provided that the aggregate amount of such Cash purchases or redemptions under
this paragraph (h) and any payments in respect of any such notes shall not exceed in any Fiscal
Year $3,000,000 plus the unused portion of the permitted Restricted Junior Payments from this
paragraph (h) from any prior Fiscal Year; (i) so long as no Default or Event of Default shall have
occurred and be continuing or shall be caused thereby and so long as no Equity Cure Period exists,
the Company and its Subsidiaries may make additional Junior Restricted Payments in an aggregate
amount not to exceed $10,000,000 since the Closing Date; (j) Holdings may make on the Closing Date
the payments required by the Easton Acquisition Agreement and (k) after December 31, 2007 and so
long as no Equity Cure Period exists and so long as no Default or Event of Default shall have
occurred and be continuing or shall be caused thereby, the Company and the Subsidiaries may make
additional Restricted Junior Payments in an aggregate amount not exceeding the Available Amount
immediately prior to the time of the making of such Restricted Junior Payment; provided
that immediately prior to such Restricted Junior Payment and immediately after giving effect
thereto on a pro forma basis, the Leverage Ratio (as of the most recent date for which annual or
quarterly financial statements are required to have been delivered pursuant to Section 5.1) is not
greater than 4.25:1.00.



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     Section 6.6 Restrictions on Subsidiary Distributions.



     Except as provided herein, in the Senior Subordinated Notes Indenture, the Refinancing Notes
Indenture or the Additional Senior Subordinated Note Indenture or (with respect to encumbrances or
restrictions on the ability of any Foreign Subsidiary of Holdings only) in any documentation
evidencing the local lines of credit of Foreign Subsidiaries expressly permitted by Section 6.1(m)
or (o), no Credit Party shall, nor shall it permit any of its Subsidiaries to, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary of the Company to (a) pay dividends or make any other
distributions on any of such Subsidiary’s Capital Stock owned by the Company or any other
Subsidiary of the Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to the
Company or any other Subsidiary of the Company, (c) make loans or advances to the Company or any
other Subsidiary of the Company, or (d) transfer any of its property or assets to the Company or
any other Subsidiary of the Company other than restrictions (i) in agreements evidencing
Indebtedness permitted by Section 6.1(i) and (j) that impose restrictions on the property so
acquired and (ii) by reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses, joint venture agreements and similar agreements entered
into in the ordinary course of business, (iii) that are or were created by virtue of any transfer
of, agreement to transfer or option or right with respect to any property, assets or Capital Stock
not otherwise prohibited under this Agreement; (iv) in any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Subsidiaries as in effect at the
time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in
connection with or in contemplation of such acquisition),which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such
Indebtedness was permitted by Section 6.1 to be incurred; (v) in any agreement for the sale or
other disposition of a Subsidiary that restricts distributions by that Subsidiary pending the sale
or other disposition; and (vi) in provisions in agreements or instruments which prohibit the
payment of dividends or the making of other distributions with respect to any class of Capital
Stock of a Person other than on a pro rata basis.



     Section 6.7 Investments.



     No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
make or own any Investment in any Person, including without limitation any Joint Venture, except:




     (a) Investments in Cash and Cash Equivalents;




     (b) (1) Investments (including loans and advances) as of the Closing Date in or to any
Subsidiary and (2) Investments (including loans and advances) made after the Closing Date in
the Company or any Subsidiary; provided, that, with respect to clause (2), the
aggregate amount of Investments made by Credit Parties hereunder to Subsidiaries that are
not Guarantors (together with any Indebtedness of such Subsidiaries to Credit Parties
pursuant to Section 6.1(b) and any guarantees by Credit Parties of



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Indebtedness of such Subsidiaries pursuant to Section 6.1(g)) shall not exceed in the
aggregate $20,000,000 at any time outstanding;




     (c) Investments (i) in any Securities received in satisfaction or partial satisfaction
thereof from financially troubled account debtors, (ii) consisting of deposits, prepayments
and other credits to suppliers or customers made in the ordinary course of business of
Holdings and its Subsidiaries and (iii) any Securities received in satisfaction or partial
satisfaction in connection with defaulted receivables;




     (d) Consolidated Capital Expenditures permitted by Section 6.8(c);




     (e) loans and advances to employees of Holdings and its Subsidiaries (i) made for
reasonable and customary business-related travel, entertainment, relocation and analogous
ordinary business purposes and (ii) otherwise in an aggregate principal amount not to exceed
$500,000 in the aggregate at any one time outstanding;




     (f) Investments made in connection with Permitted Acquisitions permitted pursuant to
Section 6.9;




     (g) Investments described in Schedule 6.7;




     (h) other Investments so long as the amount of such Investments, together with all
Permitted Acquisitions of Persons not incorporated, formed or organized under the laws of
the United States of America or Canada, shall not exceed $21,000,000 in the aggregate;
provided that no Default or Event of Default has occurred and is continuing at the
time of any such Investment or would result therefrom;




     (i) Investments consisting of notes from employees and directors of the Company and its
Subsidiaries used as consideration for the purchase price of the Capital Stock of Parent in
an aggregate amount not to exceed at any time $1,000,000;




     (j) Investments received in lieu of Cash in connection with Asset Sales expressly
permitted by Section 6.9;




     (k) Investments in Hedge Agreements permitted hereunder;




     (l) Investments consisting of the contribution of Capital Stock of a Foreign Subsidiary
to any other Foreign Subsidiary in exchange for Indebtedness, Capital Stock or a combination
thereof;




     (m) Investments in any Canadian Credit Party so long as the amount of such Investments,
together with all Permitted Acquisitions of Persons incorporated, formed or organized under
the laws of Canada or a Province or territory thereof, shall not exceed $10,000,000 in the
aggregate; provided that no Default or Event of Default has occurred and is
continuing at the time of any such Investment or would result therefrom; and



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     (n) additional Investments in an aggregate amount not to exceed the Available Amount
immediately prior to the time of the making of such Investment; provided that (a) no
Default or Event of Default has occurred and is continuing or would result therefrom and (b)
no Equity Cure Period exists.



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



     Section 6.8 Financial Covenants.



     (a) Interest Coverage Ratio. The Company shall not permit the Interest Coverage Ratio
as of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending June 30, 2006,
to be less than the correlative ratio indicated:



	 	 	 	 	 
	Fiscal Quarter	 	Interest	 
	 	 	Coverage Ratio	 
	Second Quarter of 2006 through Third Quarter of 2007
	 	 	2.00:1.00	 
	Fourth Quarter of 2007 through Third Quarter of 2008
	 	 	2.25:1.00	 
	Fourth Quarter of 2008 through Third Quarter of 2009
	 	 	2.50:1.00	 
	Fourth Quarter of 2009 through Third Quarter of 2010
	 	 	2.75:1.00	 
	Thereafter
	 	 	3.00:1.00	 






     (b) Leverage Ratio. The Company shall not permit the Leverage Ratio as of the
last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending June 30, 2006, to exceed
the correlative ratio indicated:



	 	 	 	 	 
	Fiscal Quarter Ending	 	Leverage	 
	 	 	Ratio	 
	Second Quarter of 2006 through Third Quarter of 2006
	 	 	6.25:1.00	 
	Fourth Quarter of 2006 through Third Quarter of 2007
	 	 	6.00:1.00	 
	Fourth Quarter of 2007 through Third Quarter of 2008
	 	 	5.25:1.00	 
	Fourth Quarter of 2008 through Third Quarter of 2009
	 	 	4.50:1.00	 
	Fourth Quarter of 2009 through Third Quarter of 2010
	 	 	3.75:1.00	 
	Thereafter
	 	 	3.50:1.00	 






     (c) Maximum Consolidated Capital Expenditures. The Company shall not, and shall
not permit its Subsidiaries to, make or incur Consolidated Capital Expenditures (other than
Consolidated Capital Expenditures which are made with the proceeds of equity), in any period
indicated below, in an aggregate amount for the Company and its Subsidiaries in excess of the
corresponding amount set forth below opposite such Fiscal Year; provided, such amount for
any



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Fiscal Year shall be increased by an amount equal to 100% of the excess, if any over the
actual amount of Consolidated Capital Expenditures for the previous Fiscal Year; provided,
further, (i) any Consolidated Capital Expenditure shall be applied first towards
any carry-over amount from the immediately preceding Fiscal Year and then towards the limit below
for the Fiscal Year in which such Consolidated Capital Expenditure is made and (ii) in no event
will Consolidated Capital Expenditures for any Fiscal Year exceed the sum of (A) the limit below
for the Fiscal Year in which such Consolidated Capital Expenditures are made plus (B) 50% of the
limit below for the immediately preceding Fiscal Year:



	 	 	 	 	 
	Period	 	Consolidated	 
	 	 	Capital	 
	 	 	Expenditures	 
	2006
	 	$	13,000,000	 
	2007
	 	$	13,000,000	 
	2008
	 	$	13,000,000	 
	2009
	 	$	13,000,000	 
	Thereafter
	 	$	13,000,000	 






     In connection with any Permitted Acquisition, the amounts set forth in the table above
shall be increased by the product of 1.75% multiplied by the revenue of any target acquired in such
Permitted Acquisition for the immediately preceding four fiscal quarter period ending prior to such
Permitted Acquisition.



     (d) Certain Calculations. With respect to any period during which a Permitted
Acquisition or Material Asset Sale has occurred (each, a “Subject Transaction”), for
purposes of determining compliance with the financial covenants set forth in this Section 6.8
(including for purposes of determining pro forma compliance with such covenants as required by any
provision of this Agreement), Consolidated Adjusted EBITDA and Consolidated Cash Interest Expense
shall be calculated with respect to such period on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to the Subject Transaction or
which are to be implemented by the business subject to the Subject Transaction or by the Company
and its Subsidiaries as a result of a Subject Transaction, are factually supportable and are
expected to have a continuing impact, in each case determined on a basis consistent with Article 11
of Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the
Securities and Exchange Commission or as otherwise approved by the Administrative Agent, which
would include cost savings resulting from head count reduction, closure of facilities and similar
restructuring charges, which pro forma adjustments shall be certified by the chief financial
officer of the Company) using the historical financial statements of any business so acquired or to
be acquired or sold or to be sold and the consolidated financial statements of the Company and its
Subsidiaries which shall be reformulated as if such Subject Transaction, and any Indebtedness
incurred or repaid in connection therewith, had been consummated or incurred or repaid at the
beginning of such period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the weighted average of the
interest rates applicable to outstanding Loans incurred during such period).



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     (e) Equity Cure. Prior to the six year anniversary of the Closing Date, but not more
than three times during the term of this Agreement, the Company’s shareholders will have a right to
cure, within a 10-day period subsequent to the delivery of a related Compliance Certificate, any
noncompliance with the above-referenced financial covenants with additional cash common equity
infusions that will be added to Adjusted Consolidated EBITDA for the immediately preceding Fiscal
Quarter (such equity cure shall be solely for the purpose of maintaining compliance with the
financial covenants set forth in this Section 6.8 and for no other purpose in this Agreement). Any
such equity infusion shall be received by the Company and thereafter immediately distributed to the
Company and shall be included in the calculation of the relevant quarterly test date and the three
succeeding quarterly test dates (the “Equity Cure Period”) (followed by a period of no less
than two Fiscal Quarters in any four Fiscal Quarters during which the Company shall be prohibited
from exercising its right to cure) in an amount not to exceed (for any individual cure) the amount
necessary to cure the relevant non-compliance but in any case not to exceed $15,000,000 in the
aggregate since the Closing Date.



     Section 6.9 Fundamental Changes; Disposition of Assets; Acquisitions.



     No Credit Party shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger, amalgamation, continuation or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation, winding-up or dissolution), or convey, sell, lease or
sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its business, assets or property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible, whether now owned
or hereafter acquired, or acquire by purchase or otherwise (other than purchases or other
acquisitions of inventory, materials, supplies, and equipment and Capital Expenditures in the
ordinary course of business) the business, property or fixed assets of, or equity or other evidence
of beneficial ownership of, any Person or any division or line of business or other business unit
of any Person, except:




     (a) any Subsidiary of Holdings may be merged, continued or amalgamated with or into the
Company or any Guarantor Subsidiary or if not the Company or any Guarantor Subsidiaries,
another non-Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all or any
part of its business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to the Company or any
Guarantor Subsidiary or if not the Company or any Guarantor Subsidiaries, another
non-Guarantor Subsidiary; provided, in the case of such a merger, the Company or
such Guarantor Subsidiary or if not the Company or any Guarantor Subsidiaries, another
non-Guarantor Subsidiary, as applicable shall be the continuing or surviving Person;




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




     (c) Asset Sales, the proceeds of which (valued at the principal amount thereof in the
case of non-Cash proceeds consisting of notes or other debt Securities and valued at fair
market value in the case of other non-Cash proceeds) are less than $20,000,000
when aggregated with the proceeds of all other Asset Sales made pursuant to this clause



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     (c) within the same Fiscal Year and less than $50,000,000 in the aggregate from the Closing
Date to the date of determination; provided (1) the consideration received for such
assets shall be in an amount at least equal to the fair market value thereof (determined in
good faith by the board of directors of the Company (or similar governing body)), (2) no
less than 75% thereof shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof
shall be applied as required by Section 2.15(a); provided, that, if the Company or
any of its Subsidiaries disposes of the Chicago Real Property, the York Real Property or the
Bell Fitness Business Unit, such dispositions shall not be included in the computation of
the foregoing amounts;




     (d) disposals of obsolete, worn out or surplus property;




     (e) Permitted Acquisitions;




     (f) Investments made in accordance with Section 6.7;




     (g) any merger, consolidation, liquidation, wind-up or dissolution, the purpose of
which is to effect a disposition otherwise permitted in this Section 6.9;




     (h) dispositions resulting from any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation of similar proceedings of, any property or
asset of Company or any Subsidiary; and




     (i) sale and leaseback transactions permitted by Section 6.11.



     Section 6.10 Disposal of Subsidiary Interests.



     Except for any sale of all of its interests in the Capital Stock of any of its Subsidiaries in
compliance with the provisions of Section 6.9, no Credit Party shall, nor shall it permit any of
its Subsidiaries to, (a) directly or indirectly sell, assign, pledge or otherwise encumber or
dispose of any Capital Stock of any of its Subsidiaries, except to qualify directors if required by
applicable law; or (b) permit any of its Subsidiaries directly or indirectly to sell, assign,
pledge or otherwise encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
another Credit Party (subject to the restrictions on such disposition otherwise imposed hereunder),
or to qualify directors if required by applicable law.



     Section 6.11 Sales and Lease-Backs.



     Unless the proceeds resulting from such transaction are used to prepay Loans to the extent
required by Section 2.15, no Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with
respect to any lease of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, which such Credit Party (a) has sold or transferred or is to sell or to
transfer to any other Person (other than Holdings or any of its Subsidiaries), or (b) intends to
use for substantially the same purpose as any other property which has been or is to be sold or



130









 







transferred by such Credit Party to any Person (other than Holdings or any of its
Subsidiaries) in connection with such lease.



     Section 6.12 Transactions with Shareholders and Affiliates.



     No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of
any property or the rendering of any service) with any holder of 10% or more of any class of
Capital Stock of Holdings or any of its Subsidiaries or with any Affiliate of Holdings or of any
such holder (including Ontario Teachers’ Pension Plan Board), on terms that are less favorable to
Holdings or that Subsidiary, as the case may be, than those that might be obtained at the time from
a Person who is not such a holder or Affiliate; provided, the foregoing restriction shall
not apply to (a) any transaction between or among the Company and its Domestic Subsidiaries, (b)
any transaction between or among the Credit Parties and Subsidiaries that are not Domestic
Subsidiaries to the extent such transaction is in the ordinary course of business and is on terms
which the board of directors (or similar governing body) of the Company or other applicable Credit
Party have approved; (b) reasonable and customary fees paid to members of the board of directors
(or similar governing body) of Holdings and its Subsidiaries; (c) compensation, employment and
severance arrangements for officers and other employees of Holdings and its Subsidiaries in the
ordinary course of business or as approved by the board of directors of the Company (or similar
governing body); (d) payment of or on account of the Sponsor Fee or similar fees payable to the
Sponsors pursuant to the Sponsor Agreement; (e) transactions described in Schedule 6.12 and
(f) transactions permitted under Sections 6.1 (b) and (g), Sections 6.5(c), (f), (g), (h) and (i)
and Sections 6.7(b), (e), (h) and (i).



     Section 6.13 Conduct of Business.



     From and after the Closing Date, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, engage in any business other than (i) the businesses engaged in by such Credit
Party on the Closing Date and similar or related businesses and (ii) such other lines of business
as may be consented to by Requisite Lenders.



     Section 6.14 Permitted Activities of Holdings.



     Holdings shall not (a) incur, directly or indirectly, any Indebtedness or any other obligation
or liability whatsoever other than the Sponsor Fee and other obligations not constituting
Indebtedness incurred in the ordinary course of business as a holding company and not otherwise
restricted by this Section 6.14; (b) create or suffer to exist any Lien upon any property or assets
now owned or hereafter acquired by it other than the Liens created under the Collateral Documents
to which it is a party or permitted pursuant to Section 6.2; (c) engage in any business or activity
or own any assets other than (i) holding 100% of the Capital Stock of the Company, (ii) performing
its obligations and activities incidental thereto under the Credit Documents, and to the extent not
inconsistent therewith, the Related Agreements; and (iii) making Restricted Junior Payments and
Investments to the extent permitted by this Agreement; (d) consolidate with or merge or amalgamate
with or into, or convey, transfer or lease all or substantially all its assets to, any Person; (e)
sell or otherwise dispose of any Capital



131









 







Stock of any of its directly owned Subsidiaries; (f) create or acquire any Subsidiary or make
or own any Investment in any Person other than the Company; or (g) fail to hold itself out to the
public as a legal entity separate and distinct from all other Persons.



     Section 6.15 Amendments or Waivers of Certain Related Agreements.



     Except as set forth in Section 6.16, no Credit Party shall nor shall it permit any of its
Subsidiaries to, agree to any amendment, restatement, supplement or other modification to, or
waiver of, any of its rights under any Related Agreement (other than agreements with respect to the
Senior Subordinated Notes, the Refinancing Notes or the Additional Senior Subordinated Notes which
are subject to the provisions of Section 6.16) after the Closing Date that would be materially
adverse to the Company, any other Credit Party, Administrative Agent or the Lenders.



     Section 6.16 Amendments or Waivers of with respect to Subordinated Indebtedness.



     No Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or otherwise
change the terms of the Senior Subordinated Notes, the Refinancing Notes or the Additional Senior
Subordinated Notes, or make any payment consistent with an amendment thereof or change thereto, if
the effect of such amendment or change is to increase the interest rate on the Senior Subordinated
Notes, the Refinancing Notes or the Additional Senior Subordinated Notes, change (to earlier dates)
any dates upon which payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to eliminate any such event of
default or increase any grace period related thereto or otherwise make such event of default or
condition less restrictive or burdensome on the Company), change the redemption, prepayment or
defeasance provisions thereof, change the subordination provisions of the Senior Subordinated
Notes, the Refinancing Notes or the Additional Senior Subordinated Notes (or of any guaranty
thereof), or if the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such the Senior Subordinated Notes, the Refinancing Notes or
the Additional Senior Subordinated Notes (or a trustee or other representative on their behalf)
which would be adverse in any material respect to any Credit Party or Lenders.



     Section 6.17 Fiscal Year; Accounting Policies; Corporate Changes.



     No Credit Party shall, nor shall it permit any of its Subsidiaries to:



     (a) change its Fiscal Year-end from (i) December 31 (or the Saturday closest thereto), (ii) a
52-53 week Fiscal Year-ending on or about December 31, (iii) in the case of Easton Sports, Inc. and
its Subsidiaries, November 30 or (iv) in the case of Bell Sports Asia Limited, March 31;
provided that any Credit Party or any Subsidiary of a Credit Party may change its Fiscal
Year-end to December 31.



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     (b) materially change its accounting method (except in accordance with GAAP) in any manner
materially adverse to the interests of the Lenders without the prior written consent of the
Requisite Lenders; or



     (c) change its jurisdiction of incorporation, organization or formation of a Credit Party
without giving such notice as is required under this Agreement or have more than one jurisdiction
of incorporation, organization or formation.



     Section 6.18 No Other “Designated Senior Indebtedness”.



     No Credit Party shall designate, or permit the designation of, any Indebtedness (other than
under this Agreement or other Credit Documents) as “Designated Senior Debt” for the purposes of the
definition of the same or the subordination provisions contained in the Senior Subordinated Note
Indenture, the Refinancing Note Indenture or the Additional Senior Subordinated Note Indenture
without the consent of Administrative Agent.



SECTION 7




U.S. GUARANTY




     Section 7.1 U.S. Guaranty of the Obligations.



     Subject to the provisions of Section 7.2, U.S. Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty to Administrative Agent and Canadian Agent for the ratable
benefit of the Beneficiaries the due and punctual payment and performance in full of all
Obligations when the same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) or any other provision of the Bankruptcy Code,
11 U.S.C. § 362(a)) (collectively, the “Guaranteed Obligations”).



     Section 7.2 Contribution by Guarantors.



     All U.S. Guarantors desire to allocate among themselves (collectively, the “Contributing
Guarantors”), in a fair and equitable manner, their obligations arising under this Guaranty.
Accordingly, in the event any payment or distribution is made on any date by a U.S. Guarantor (a
“Funding Guarantor”) under this Guaranty such that its Aggregate Payments exceeds its Fair
Share as of such date, such Funding Guarantor shall be entitled to a contribution from each of the
other Contributing Guarantors in an amount sufficient to cause each Contributing Guarantor’s
Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with
respect to a Contributing Guarantor as of any date of determination, an amount equal to (a) the
ratio of (i) the Fair Share Contribution Amount with respect to such Contributing Guarantor to (ii)
the aggregate of the Fair Share Contribution Amounts with respect to all Contributing Guarantors
multiplied by (b) the aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. “Fair Share



133









 




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




     Section 7.3 Payment by Guarantors.



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



     Section 7.4 Liability of Guarantors Absolute.



     Each U.S. Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional, and constitute primary obligations of such U.S. Guarantor and not a
contract of surety to the maximum extent permitted by law and to the extent permitted by applicable
law shall not be affected by any circumstance which constitutes a legal or equitable



134









 







discharge of a guarantor or surety other than payment in full of the Guaranteed Obligations.
In furtherance of the foregoing and without limiting the generality thereof, each U.S. Guarantor
agrees as follows:




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




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




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




     (d) any Beneficiary, upon such terms as it deems appropriate, without notice or demand
and without affecting the legality, validity or enforceability hereof or giving rise to any
reduction, limitation, impairment, discharge or termination of any Guarantor’s liability
hereunder, from time to time may (i) renew, extend, accelerate, increase the rate of
interest on, or otherwise change the time, place, manner or terms of payment of the
Guaranteed Obligations; (ii) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guaranteed Obligations
or any agreement relating thereto and/or subordinate the payment of the same to the payment
of any other obligations; (iii) request and accept other guaranties of the Guaranteed
Obligations and take and hold security for the payment hereof or the Guaranteed Obligations;
(iv) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment of the
Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other
obligation of any Person (including any other U.S. Guarantor) with respect to the Guaranteed
Obligations (provided that no Credit Document to which such U.S. Guarantor is a party may be
amended without its written consent); (v) enforce and apply any security now or hereafter
held by or for the benefit of such Beneficiary in respect hereof or the Guaranteed
Obligations and direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent



135









 







herewith or the applicable Hedge Agreement and any applicable security agreement,
including foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable, and even
though such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any U.S. Guarantor against any Credit Party or any
security for the Guaranteed Obligations; and (vi) exercise any other rights available to it
under the Credit Documents or the Hedge Agreements; and




     (e) this Guaranty and the obligations of Guarantors hereunder shall be legal, valid and
enforceable and to the extent permitted by applicable law shall not be subject to any
reduction, limitation, impairment, discharge or termination for any reason (other than
payment in full of the Guaranteed Obligations), including the occurrence of any of the
following, whether or not any U.S. Guarantor shall have had notice or knowledge of any of
them: (i) any failure or omission to assert or enforce or agreement or election not to
assert or enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right, power or
remedy (whether arising under the Credit Documents or the Hedge Agreements, at law, in
equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating
thereto, or with respect to any other guaranty of or security for the payment of the
Guaranteed Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions relating to
events of default) hereof, any of the other Credit Documents, any of the Hedge Agreements or
any agreement or instrument executed pursuant thereto, or of any other guaranty or security
for the Guaranteed Obligations, in each case whether or not in accordance with the terms
hereof or such Credit Document, such Hedge Agreement or any agreement relating to such other
guaranty or security; (iii) the Guaranteed Obligations, or any agreement relating thereto,
at any time being found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received pursuant to
the other Credit Documents or any of the Hedge Agreements or from the proceeds of any
security for the Guaranteed Obligations, except to the extent such security also serves as
Collateral for indebtedness other than the Guaranteed Obligations) to the payment of
indebtedness other than the Guaranteed Obligations, even though any Beneficiary might have
elected to apply such payment to any part or all of the Guaranteed Obligations (provided
that no Credit Document to which such U.S. Guarantor is a party may be amended without its
written consent); (v) any Beneficiary’s consent to the change, reorganization or termination
of the corporate structure or existence of Holdings or any of its Subsidiaries and to any
corresponding restructuring of the Guaranteed Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any Collateral which secures any of the
Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims which a Credit Party
may allege or assert against any Beneficiary in respect of the Guaranteed Obligations,
including failure of consideration, breach of warranty, payment, statute of frauds, statute
of limitations, accord and satisfaction and usury; and (viii) any other act or thing or
omission, or delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of any U.S. Guarantor as an obligor in respect of the Guaranteed
Obligations.



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     Section 7.5 Waivers by U.S. Guarantors.



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



     Section 7.6 U.S. Guarantors’ Rights of Subrogation, Contribution, etc.



     Until the Guaranteed Obligations shall have been indefeasibly paid in full and the Revolving
Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled or
collateralized with Cash, each U.S. Guarantor hereby waives any claim, right or remedy, direct or
indirect, that such U.S. Guarantor now has or may hereafter have against any Credit Party or any
other U.S. Guarantor or any of its assets in connection with this Guaranty or the performance by
such U.S. Guarantor of its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and including without
limitation (a) any right of subrogation, reimbursement or indemnification that such U.S. Guarantor
now has or may hereafter have against any Credit Party



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with respect to the Guaranteed Obligations, (b) any right to enforce, or to participate in,
any claim, right or remedy that any Beneficiary now has or may hereafter have against any Credit
Party, and (c) any benefit of, and any right to participate in, any Collateral or security now or
hereafter held by any Beneficiary. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full and the Revolving Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled or collateralized with Cash, each U.S. Guarantor shall
withhold exercise of any right of contribution such U.S. Guarantor may have against any other
guarantor (including any other U.S. Guarantor) of the Guaranteed Obligations, including, without
limitation, any such right of contribution as contemplated by Section 7.2. Each U.S. Guarantor
further agrees that, to the extent the waiver or agreement to withhold the exercise of its rights
of subrogation, reimbursement, indemnification and contribution as set forth herein is found by a
court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation,
reimbursement or indemnification such U.S. Guarantor may have against any Credit Party or against
any Collateral or security, and any rights of contribution such U.S. Guarantor may have against any
such other guarantor, shall be junior and subordinate to any rights any Beneficiary may have
against any Credit Party, to all right, title and interest any Beneficiary may have in any such
Collateral or security, and to any right any Beneficiary may have against such other guarantor. If
any amount shall be paid to any U.S. Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed Obligations shall not have
been finally and indefeasibly paid in full, such amount shall be held in trust for Administrative
Agent or Canadian Agent, as applicable, on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent or Canadian Agent, as applicable, for the benefit of Beneficiaries to be
credited and applied against the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms hereof.



     Section 7.7 Continuing Guaranty.



     This Guaranty is a continuing guaranty and shall remain in effect until all of the Guaranteed
Obligations shall have been paid in full and the Revolving Commitments shall have terminated and
all Letters of Credit shall have expired or been cancelled. Each U.S. Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise to any Guaranteed
Obligations.



     Section 7.8 Authority of U.S. Guarantors or the Credit Parties.



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



     Section 7.9 Financial Condition of the Credit Parties and U.S. Guarantors.



     Any Credit Extension may be made to the Credit Parties or continued from time to time, and any
Hedge Agreements may be entered into from time to time, in each case without notice to or
authorization from any U.S. Guarantor regardless of the financial or other condition of the Credit
Parties or any other U.S. Guarantor at the time of any such grant or continuation or at the time
such Hedge Agreement is entered into, as the case may be. No Beneficiary shall have any



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obligation to disclose or discuss with any Credit Parties its assessment, or any U.S.
Guarantor’s assessment, of the financial condition of the Credit Parties or any other U.S.
Guarantor. Each U.S. Guarantor has adequate means to obtain information from the Credit Parties
and each other U.S. Guarantor on a continuing basis concerning the financial condition of the
Credit Parties and the other U.S. Guarantors and their respective abilities to perform their
respective obligations under the Credit Documents and the Hedge Agreements, and each U.S. Guarantor
assumes the responsibility for being and keeping informed of the financial condition of the Credit
Parties and the other U.S. Guarantors and of all circumstances bearing upon the risk of nonpayment
of the Guaranteed Obligations. Each U.S. Guarantor hereby waives and relinquishes any duty on the
part of any Beneficiary to disclose any matter, fact or thing relating to the business, operations
or conditions of the Credit Parties and any other U.S. Guarantor now known or hereafter known by
any Beneficiary.



     Section 7.10 Bankruptcy, etc.



     (a) So long as any Guaranteed Obligations remain outstanding, no U.S. Guarantor shall, without
the prior written consent of Administrative Agent acting pursuant to the instructions of Requisite
Lenders, commence or join with any other Person in commencing any bankruptcy, reorganization or
insolvency case or proceeding of or against the Company or any other U.S. Guarantor. The
obligations of U.S. Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any case or proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, restructuring, receivership, reorganization, liquidation or arrangement
of the Company or any other U.S. Guarantor or by any defense which the Company or any other U.S.
Guarantor may have by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.



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



     (c) In the event that all or any portion of the Guaranteed Obligations are paid by any Credit
Party, the obligations of U.S. Guarantors hereunder shall continue and remain in full force and
effect or be reinstated, as the case may be, in the event that all or any part of such payment(s)
are rescinded or recovered directly or indirectly from any Beneficiary as a preference, fraudulent
transfer or otherwise (and whether as a result of any demand, settlement, litigation or otherwise),



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and any such payments which are so rescinded or recovered shall constitute Guaranteed
Obligations for all purposes hereunder.



     Section 7.11 Discharge of Guaranty Upon Sale of U.S. Guarantor.



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



SECTION 7A




GUARANTY OF CANADIAN OBLIGATIONS




     Section 7A.1 The Guaranty.



     In order to induce the Lenders to enter into this Agreement and to extend credit hereunder and
thereunder and in recognition of the direct benefits to be received by the Canadian Guarantors from
the Credit Extensions hereunder and any Secured Hedge Agreement, each of the Canadian Guarantors
hereby agrees with the Agents and the Lenders as follows: such Canadian Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary obligor and not merely
as surety the full and prompt payment when due, whether upon maturity, by acceleration or
otherwise, of any and all indebtedness of the Canadian Borrowers to Canadian Agent and the Canadian
Lenders. If any or all of the Indebtedness becomes due and payable hereunder, each Canadian
Guarantor unconditionally promises to pay such indebtedness, as applicable, to the Administrative
Agent, Canadian Agent, the Canadian Lenders, or their respective order, on demand, together with
any and all reasonable expenses which may be incurred by the Canadian Agent or the Canadian Lenders
in collecting any of the Canadian Obligations of the Canadian Borrowers. The word “indebtedness”
is used in this Section 7A in its most comprehensive sense and includes any and all advances,
debts, obligations and liabilities of the Canadian Borrowers, including specifically all Canadian
Obligations, arising in connection with this Agreement or the other Credit Documents, in each case,
heretofore, now, or hereafter made, incurred or created, whether voluntarily or involuntarily,
absolute or contingent, liquidated or unliquidated, determined or undetermined, whether or not such
Indebtedness is from time to time reduced, or extinguished and thereafter increased or incurred,
whether the Canadian Borrowers may be liable individually or jointly with others, whether or not
recovery upon such indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such Indebtedness may be or hereafter become otherwise unenforceable.



     Notwithstanding any provision to the contrary contained herein or in any other of the Credit
Documents, to the extent the obligations of a Canadian Guarantor shall be adjudicated to be
illegal, invalid or unenforceable for any reason (including, without limitation, because of any
applicable state, provincial, territorial or federal law relating to fraudulent conveyances or




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transfers) then the obligations of each such Canadian Guarantor hereunder shall be limited to
the maximum amount that is permissible under applicable law (whether federal, state, provincial or
territorial and including, without limitation, the Bankruptcy Code).




     Section 7A.2 Bankruptcy.



     Additionally, each of the Canadian Guarantors unconditionally and irrevocably guarantees
jointly and severally the payment of any and all Canadian Obligations of the Canadian Borrowers to
the Canadian Lenders whether or not due or payable by the Canadian Borrowers upon the occurrence of
any of the events specified in Sections 8.1(f) or (g), and unconditionally promises to pay such
Canadian Obligations to Canadian Agent for the account of the Canadian Lenders, or order, on
demand, in lawful money of the United States or Canada, as the case may be. Each of the Canadian
Guarantors further agrees that to the extent that the Canadian Borrowers or a Canadian Guarantor
shall make a payment or a transfer of an interest in any property to Canadian Agent or any Canadian
Lender, which payment or transfer or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to the Canadian
Borrowers or a Canadian Guarantor, the estate of the Canadian Borrowers or a Canadian Guarantor, a
trustee, receiver, manager or any combination thereof or any other party under any insolvency,
restructuring, reorganization or bankruptcy law, state, provincial, territorial or federal law,
common law or equitable cause, then to the extent of such avoidance or repayment, the obligation or
part thereof intended to be satisfied shall be revived and continued in full force and effect as if
said payment had not been made.



     Section 7A.3 Nature of Liability.



     The liability of each Canadian Guarantor hereunder is exclusive and independent of any
security for or other guaranty of the Canadian Obligations of the Canadian Borrowers whether
executed by any such Canadian Guarantor, any other guarantor or by any other party, and no Canadian
Guarantor’s liability hereunder shall be affected or impaired by (a) any direction as to
application of payment by the Canadian Borrowers or by any other party, or (b) any other continuing
or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the
Canadian Obligations of the Canadian Borrowers, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Canadian Borrowers, or (e) any payment made to Canadian Agent or the Canadian
Lenders on the Canadian Obligations which Canadian Agent, or such Canadian Lenders repay the
Canadian Borrowers pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Canadian Guarantors waives any right
to the deferral or modification of its obligations hereunder by reason of any such proceeding.



     Section 7A.4 Independent Obligation.



     The obligations of each Canadian Guarantor hereunder are independent of the obligations of any
other Canadian Guarantor or the Canadian Borrowers, and a separate action or actions may be brought
and prosecuted against each Canadian Guarantor whether or not action is



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brought against any other Canadian Guarantor or the Canadian Borrowers and whether or not any other
Canadian Guarantor or the Canadian Borrowers are joined in any such action or actions.




     Section 7A.5 Authorization.



     Each of the Canadian Guarantors authorizes the Agents and each Lender without notice or demand
(except as shall be required by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the terms of the
Canadian Obligations or any part thereof in accordance with this Agreement, as applicable,
including any increase or decrease of the rate of interest thereon, (b) take and hold security from
any Canadian Guarantor or any other party for the payment of this Guaranty or the Canadian
Obligations and exchange, enforce, waive and release any such security, (c) apply such security and
direct the order or manner of sale thereof as the Agents and the Lenders in their discretion may
determine and (d) release or substitute any one or more endorsers, Canadian Guarantors, the
Canadian Borrowers or other obligors.



     Section 7A.6 Reliance.



     It is not necessary for the Agents or the Lenders to inquire into the capacity or powers of
the Canadian Borrowers or the officers, directors, members, partners or agents acting or purporting
to act on their behalf, and any Canadian Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.



     Section 7A.7 Waiver.



     (a) Each of the Canadian Guarantors waives any right (except as shall be required by
applicable statute and cannot be waived) to require the Agents or any Lender to (i) proceed against
any Canadian Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any
security held from any Canadian Borrower, any other guarantor or any other party, or (iii) pursue
any other remedy in the Agents’ or any Lender’s power whatsoever. Each of the Canadian Guarantors
waives any defense based on or arising out of any defense of any Canadian Borrower, any other
guarantor or any other party other than payment in full of the Canadian Obligations (other than
contingent indemnity obligations), including without limitation any defense based on or arising out
of the disability of any Canadian Borrower, any other guarantor or any other party, or the
illegality, invalidity and unenforceability of the Canadian Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of any Canadian Borrower other than
payment in full of the Canadian Obligations. The Canadian Agent may, at its election, foreclose on
any security held by the Canadian Agent by one or more judicial or nonjudicial sales (to the extent
such sale is permitted by applicable law), or exercise any other right or remedy the Canadian Agent
or any Lender may have against any Canadian Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Canadian Guarantor hereunder except to the
extent the Canadian Obligations have been paid in full and the Commitments have been terminated.
Each of the Canadian Guarantors waives any defense arising out of any such election by the Agents
or any of the



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Lenders, even though such election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Canadian Guarantors against any Canadian Borrower or
any other party or any security.




     (b) Each of the Canadian Guarantors waives all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notice of protest, notices of
dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional Canadian Obligations. Each Canadian Guarantor assumes all
responsibility for being and keeping itself informed of each Canadian Borrower’s financial
condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the
Canadian Obligations and the nature, scope and extent of the risks which such Canadian Guarantor
assumes and incurs hereunder, and agrees that neither the Agents nor any Lender shall have any duty
to advise such Canadian Guarantor of information known to it regarding such circumstances or
risks.



     (c) Each of the Canadian Guarantors hereby agrees it will not exercise any rights of
subrogation which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the
Canadian Lenders against any Canadian Borrower or any other guarantor of the Canadian Obligations
of any Canadian Borrower owing to the Canadian Lenders (collectively, the “Other Parties”)
and all contractual, statutory or common law rights of reimbursement, contribution or indemnity
from any Other Party which it may at any time otherwise have as a result of this Guaranty until
such time as the Canadian Obligations shall have been paid in full and the Commitments have been
terminated. Each of the Canadian Guarantors hereby further agrees not to exercise any right to
enforce any other remedy which the Canadian Agent or the Canadian Lenders now have or may hereafter
have against any Other Party, any endorser or any other guarantor of all or any part of the
Canadian Obligations of the Canadian Borrowers and any benefit of, and any right to participate in,
any security or Collateral given to or for the benefit of the Canadian Lenders to secure payment of
the Canadian Obligations of any Canadian Borrower until such time as the Canadian Obligations
(other than contingent indemnity obligations) shall have been paid in full and the Commitments have
been terminated.



     Section 7A.8 Limitation on Enforcement.



     The Canadian Lenders agree that this Guaranty may be enforced only by the action of the
Canadian Agent acting upon the instructions of the Requisite Lenders and that no Canadian Lender
shall have any right individually to seek to enforce or to enforce this Guaranty, it being
understood and agreed that such rights and remedies may be exercised by the Canadian Agent for the
benefit of the Canadian Lenders under the terms of this Agreement. The Canadian Lenders further
agree that this Guaranty may not be enforced against any director, officer, employee or equity
holder of the Canadian Guarantors.



     Section 7A.9 Confirmation of Payment.



     The Agents and the Lenders will, upon request after the complete payment of the indebtedness
and obligations which are the subject of this Guaranty and termination of the



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Commitments relating thereto, confirm to the Canadian Borrowers, the Canadian Guarantors or
any other Person that such indebtedness and obligations have been paid and the Commitments relating
thereto terminated, subject to the provisions of Section 7A.2.




SECTION 8




EVENTS OF DEFAULT




     Section 8.1 Events of Default.



     If any one or more of the following conditions or events shall occur:



     (a) Failure to Make Payments When Due. Failure by a Borrower to pay (i) when due any
installment of principal of any Loan, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; (ii) when due any amount payable to
Issuing Bank in reimbursement of any drawing under a Letter of Credit; or (iii) any interest on any
Loan or any fee or any other amount due hereunder within five days after the date due; or



     (b) Default in Other Agreements. (i) Failure of any Credit Party or any of their
respective Subsidiaries to pay when due any principal of or interest on or any other amount payable
in respect of one or more items of Indebtedness (other than Indebtedness referred to in Section
8.1(a)) in an individual or aggregate principal amount of $7,500,000 or more, in each case beyond
the grace period, if any, provided therefor; (ii) breach or default by any Credit Party with
respect to any other material term of (1) one or more items of Indebtedness in the individual or
aggregate principal amounts referred to in clause (i) above or (2) any loan agreement, mortgage,
indenture or other agreement relating to such item(s) of Indebtedness, in each case beyond the
grace period, if any, provided therefor, if the effect of such breach or default is to cause, or to
permit the holder or holders of that Indebtedness (or a trustee on behalf of such holder or
holders), to cause, that Indebtedness to become or be declared due and payable (or redeemable), or
to require the prepayment, redemption, repurchase or defeasance of, or to cause Holdings, Company
or any of its Subsidiaries to make any offer to prepay, redeem, repurchase or defease that
Indebtedness (other than an asset proceeds offer under the Senior Subordinated Notes to the extent
otherwise permitted hereunder), prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or (iii) any Event of Default (as defined in the Senior
Subordinated Note Indenture, any Refinancing Note Indenture or any Additional Senior Subordinated
Note Indenture) shall occur under the Senior Subordinated Note Indenture, any Refinancing Note
Indenture or any Additional Senior Subordinated Note Indenture; or



     (c) Breach of Certain Covenants. (i) Failure of any Credit Party to perform or comply
with any term or condition contained in Section 2.7, Section 5.2 or Section 6 and (ii) failure of
any Credit Party to perform or comply with any term or condition contained in Section 5.5 for a
period in excess of fifteen (15) days; or



144









 





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



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



     (f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court of competent
jurisdiction shall enter a decree or order for relief in respect of Parent, Holdings or any of
their Subsidiaries other than an Immaterial Subsidiary in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced against Parent,
Holdings or any of their Subsidiaries other than its Immaterial Subsidiaries under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for the appointment of
a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers
over Parent, Holdings or any of their Subsidiaries other than its Immaterial Subsidiaries, or over
all or a substantial part of its property, shall have been entered; or there shall have occurred
the involuntary appointment of an interim receiver, trustee or other custodian of Parent, Holdings
or any of their Subsidiaries other than its Immaterial Subsidiaries for all or a substantial part
of its property; or a warrant of attachment, execution or similar process shall have been issued
against any substantial part of the property of Parent, Holdings or any of their Subsidiaries other
than its Immaterial Subsidiaries, and any such event described in this clause (ii) shall continue
for sixty (60) days without having been dismissed, bonded or discharged; or



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



145









 





     (h) Judgments and Attachments. Any money judgment, writ or warrant of attachment or
execution or similar process involving in any individual case or in the aggregate at any time an
amount in excess of $7,500,000 (in either case to the extent not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage) shall be entered
or filed against Holdings or any of their Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days (or in any
event later than five (5) days prior to the date of any proposed sale thereunder); or



     (i) Dissolution. Any order, judgment or decree shall be entered against any Credit
Party decreeing the dissolution or split up of such Credit Party and such order shall remain
undischarged or unstayed for a period in excess of thirty (30) days; or



     (j) Employee Benefit Plans. There shall occur one or more ERISA Events which
individually or in the aggregate results in or would reasonably be expected to result in liability
of Holdings or any of its Subsidiaries in excess of $7,500,000 during the term hereof.



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




     (l) Guaranties, Collateral Documents and other Credit Documents. At any time after
the execution and delivery thereof, (i) the Guaranty for any reason, other than the satisfaction in
full in Cash of all Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void or any Guarantor shall
repudiate its obligations thereunder, (ii) this Agreement or any Collateral Document ceases to be
in full force and effect (other than by reason of a release of Collateral in accordance with the
terms hereof or thereof or the satisfaction in full in Cash of the Obligations in accordance with
the terms hereof) or shall be declared null and void, or Collateral Agent or Canadian Agent shall
not have or shall cease to have a valid and perfected Lien in any Collateral purported to be
covered by the Collateral Documents with the priority required by the relevant Collateral Document,
in each case for any reason other than the failure of Collateral Agent or any Secured Party to take
any action within its control, or (iii) any Credit Party shall contest the legality, validity or
enforceability of any Credit Document in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any Credit Document to which
it is a party or (iv) the Loans shall cease to constitute senior indebtedness under the
subordination provisions of the Senior Subordinated Notes, the Refinancing Notes or the Additional
Senior Subordinated Notes or shall be invalidated or otherwise cease to be legal, valid and binding
obligations of the parties thereto, enforceable in accordance with their terms; or



     (m) Failure to Effect the Easton Acquisition. The Easton Acquisition shall not have
occurred by close of business on the day immediately following the Closing Date.



     Section 8.2 Acceleration; Remedies.



     (a) (1) upon the occurrence of any Event of Default described in Section 8.1(f) or 8.1(g),
automatically, and (2) upon the occurrence and during the continuance, of any other



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Event of Default, at the request of (or with the consent of) Requisite Lenders, upon notice to
the Company by Administrative Agent, (A) the Revolving Commitments, if any, of each Lender having
such Revolving Commitments and the obligation of Issuing Bank to issue any Letter of Credit shall
immediately terminate; (B) each of the following shall immediately become due and payable, in each
case without presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by each Credit Party: (I) the unpaid principal amount of and accrued
interest on the Loans, (II) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (regardless of whether any beneficiary under any such
Letter of Credit shall have presented, or shall be entitled at such time to present, the drafts or
other documents or certificates required to draw under such Letters of Credit), and (III) all other
Obligations; provided, the foregoing shall not affect in any way the obligations of Lenders
under Section 2.4(a)(ii)(E), Section 2.4(b)(ii)(E) or Section 2.5(e); (C) Administrative Agent may
cause Collateral Agent or Canadian Agent, as applicable, to enforce any and all Liens and security
interests created pursuant to Collateral Documents; (D) Administrative Agent shall direct the
Company to pay (and the Company hereby agrees upon receipt of such notice, or upon the occurrence
of any Event of Default specified in Section 8.1(f) and (g) to pay) to Administrative Agent or
Canadian Agent, as applicable, such additional amounts of Cash, to be held as security for the
Company’s reimbursement Obligations in respect of Letters of Credit then outstanding, equal to the
Letter of Credit Usage at such time; and (E) the Canadian Agent may, or upon the written request of
the Requisite Lenders, the Canadian Agent shall, by notice to the Company, demand that the Canadian
Borrowers deliver cash collateral to the Canadian Agent, to be held in an interest bearing account
for the benefit of the BA Lenders and Acceptance Lenders, in the amount of 100% of the aggregate
Face Amount of outstanding Bankers’ Acceptances and Acceptance Notes.




     (b) The Canadian Borrowers hereby grant to Canadian Agent, for the benefit of each BA Lender
and Acceptance Lender with respect to outstanding Bankers’ Acceptances and Acceptance Notes, a
security interest in such cash collateral delivered to Canadian Agent pursuant to paragraph (a)
above to secure all of the Canadian Borrowers’ Canadian Obligations with respect to Bankers’
Acceptance Advances. Any such cash collateral shall be made available by Canadian Agent to such BA
Lenders and Acceptance Lenders to repay such Canadian Obligations. Thereafter, if the Revolving
Commitment Termination Date shall have occurred, the balance upon the maturity of the applicable
Bankers’ Acceptance Advance, if any, of such cash collateral shall be (subject to any rights of
third parties and except as otherwise directed by a court of competent jurisdiction) returned to
the Canadian Borrowers. The Canadian Borrowers shall from time to time execute and deliver to
Canadian Agent such further documents and instruments as Canadian Agent may request with respect to
such cash collateral.



     Section 8.3 Allocation of Payments After Exercise of Remedies.



     Notwithstanding any other provision of this Agreement to the contrary, after the exercise of
remedies by the Administrative Agent or Canadian Agent, as applicable, or the Lenders pursuant to
Section 8.2 (or after the Revolving Commitments shall automatically terminate and the Loans (with
accrued interest thereon) and all other amounts under the Credit Documents (including without
limitation the maximum amount of all contingent liabilities under Letters of Credit) shall
automatically become due and payable in accordance with the terms of such



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Section), all amounts collected or received by the Administrative Agent or Canadian Agent, as
applicable, or any Lender on account of the U.S. Obligations and the Canadian Obligations,
respectively, or any other amounts outstanding under any of the Credit Documents or in respect of
the Collateral shall be paid over or delivered as follows:





     FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including
without limitation reasonable attorneys’ fees) of the Administrative Agent and Canadian
Agent in connection with enforcing the rights of the Lenders under the Credit Documents and
any protective advances made by the Administrative Agent and/or Canadian Agent with respect
to the Collateral under or pursuant to the terms of the Collateral Documents;




     SECOND, to the payment of any administrative fees owed to the Administrative Agent
and/or Canadian Agent;




     THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including
without limitation, reasonable attorneys’ fees) of each of the Lenders in connection with
enforcing its rights under the Credit Documents or otherwise with respect to the Obligations
owing to such Lender;




     FOURTH, to the payment of all of the Obligations consisting of accrued fees and
interest, and including with respect to any Secured Hedge Agreement, any fees, premiums and
scheduled periodic payments due under such Secured Hedge Agreement and any interest accrued
thereon;




     FIFTH, to the payment of the outstanding principal amount of the Obligations and the
payment or cash collateralization of the outstanding letter of credit obligations under
Letters of Credit, and including with respect to any Secured Hedge Agreement, any breakage,
termination or other payments due under such Secured Hedge Agreement and any interest
accrued thereon;




     SIXTH, to all other Obligations and other obligations which shall have become due and
payable under the Credit Documents or otherwise and not repaid pursuant to clauses “FIRST”
through “FIFTH” above; and




     SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to
receive such surplus.



     In carrying out the foregoing, (i) amounts received shall be applied in the numerical order
provided until exhausted prior to application to the next succeeding category; (ii) each of the
Lenders shall receive an amount equal to its Pro Rata Share (based on the proportion that the then
outstanding Loans and letter of credit obligations held by such Lender bears to the aggregate then
outstanding Loans and letter of credit obligations) of amounts available to be applied pursuant to
clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent that any amounts
available for distribution pursuant to clause “FIFTH” above are attributable to the issued but
undrawn amount of outstanding Letters of Credit, such amounts



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shall be held by the Administrative Agent or Canadian Agent, as applicable, in a cash
collateral account and applied (A) first, to reimburse the Issuing Bank from time to time for any
drawings under such Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses ”FIFTH” and “SIXTH” above in the
manner provided in this Section 8.3. Notwithstanding the foregoing terms of this Section 8.3, only
Collateral proceeds and payments under the Guaranty shall be applied to obligations under any
Secured Hedge Agreement. Notwithstanding anything to the contrary in this Agreement, other than
the provisions of Section 11 hereof from and after the occurrence of a Sharing Event, amounts
received from any Foreign Subsidiary on account of the Obligations of any Foreign Subsidiary shall
be applied solely to the payment of the Obligations of the Canadian Borrowers




SECTION 9




AGENTS




     Section 9.1 Appointment of Agents.



     (a) Wachovia Securities and GSCP are hereby appointed Joint Lead Arrangers and Joint
Bookrunners, hereunder, and each Lender hereby authorizes, each such Joint Lead Arranger and Joint
Bookrunner to act as its agent in accordance with the terms hereof and the other Credit Documents.
GSCP is hereby appointed Syndication Agent hereunder, and each Lender hereby authorizes
Syndication Agent to act as its agent in accordance with the terms hereof and the other Credit
Documents. Wachovia is hereby appointed Administrative Agent hereunder and under the other Credit
Documents and each Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms hereof and the other Credit Documents. Each Agent hereby agrees to act upon the
express conditions contained herein and the other Credit Documents, as applicable. The provisions
of this Section 9 are solely for the benefit of Agents and Lenders and no Credit Party shall have
any rights as a third party beneficiary of any of the provisions thereof. In performing its
functions and duties hereunder, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Holdings or any of its Subsidiaries. The Syndication Agent, without consent of
or notice to any party hereto, may assign any and all of its rights or obligations hereunder to any
of its Affiliates. As of the Closing Date, neither Wachovia Securities in its capacity as a Joint
Lead Arranger and Joint Bookrunner, nor GSCP in its capacity as a Joint Lead Arranger, Joint
Bookrunner and Syndication Agent shall have any obligations but shall be entitled to all benefits
of this Section 9.



     (b) Without prejudice to the foregoing, each Secured Party hereby irrevocably designates and
appoints the Canadian Agent as the person holding the power of attorney (fondé de pouvoir) of the
Canadian Secured Parties as contemplated under Article 2692 of the Civil Code of Quebec, to enter
into, to take and to hold on their behalf, and for their benefit, a deed of hypothec (“Deed of
Hypothec”) to be executed by any of the Credit Parties granting a Lien on any Collateral
located in the Province of Quebec and to exercise such powers and duties which are conferred
thereupon under such deed. Each Secured Party hereby additionally irrevocably designates and
appoints the Canadian Agent as agent, mandatary, custodian and depositary for



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and on behalf of the Canadian Secured Parties (i) to hold and to be the sole registered holder
of any bond (“Bond”) issued under the Deed of Hypothec, the whole notwithstanding Section
32 of the Act respecting the Special Powers of Legal Persons (Quebec) or any other requirement of
law, and (ii) to enter into, to take and to hold on their behalf, and for their benefit, a bond
pledge agreement (“Pledge”) to be executed by such Credit Party under the laws of the
Province of Quebec and creating a Lien on the Bond as security for the payment and performance of,
inter alia, the Canadian Obligations. In this respect, (a) the Canadian Agent as agent, mandatary,
custodian and depositary for and on behalf of the Canadian Secured Parties, shall keep a record
indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness
secured by the Pledge, owing to each Canadian Secured Party for and on behalf of whom the Bond is
so held from time to time, and (b) each Canadian Secured Party will be entitled to the benefits of
any Collateral charged under the Deed of Hypothec and the Pledge and will participate in the
proceeds of realization of any such Collateral. The Canadian Agent, in such aforesaid capacities
shall (x) have the sole and exclusive right and authority to exercise, except as may be otherwise
specifically restricted by the terms hereof, all rights and remedies given to the Canadian Agent
with respect to the Collateral charged under the Deed of Hypothec and Pledge, any other requirement
of law or otherwise, and (y) benefit from and be subject to all provisions hereof with respect to
the Canadian Agent mutatis mutandis, including, without limitation, all such provisions with
respect to the liability or responsibility to and indemnification by the Secured Parties.




     Section 9.2 Powers and Duties.



     Each Lender irrevocably authorizes each Agent to take such action on such Lender’s behalf and
to exercise such powers, rights and remedies hereunder and under the other Credit Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof, together with such
powers, rights and remedies as are reasonably incidental thereto. Each Agent shall have only those
duties and responsibilities that are expressly specified herein and the other Credit Documents.
Each Agent may exercise such powers, rights and remedies and perform such duties by or through its
agents or employees. No Agent shall have, by reason hereof or any of the other Credit Documents, a
fiduciary relationship in respect of any Lender; and nothing herein or any of the other Credit
Documents, expressed or implied, is intended to or shall be so construed as to impose upon any
Agent any obligations in respect hereof or any of the other Credit Documents except as expressly
set forth herein or therein.



     Section 9.3 General Immunity.



     (a) No Responsibility for Certain Matters. No Agent shall be responsible to any
Lender for the execution, effectiveness, genuineness, legality, validity, enforceability,
collectability or sufficiency hereof or any other Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written or oral statements
or in any financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any Credit Party to any
Agent or any Lender in connection with the Credit Documents and the transactions contemplated
thereby or for the financial condition or business affairs of any Credit Party or any other Person
liable for the payment of any Obligations, nor shall any Agent be required to



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ascertain or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Credit Documents or as to the use of
the proceeds of the Loans or as to the existence or possible existence of any Event of Default or
Default or to make any disclosures with respect to the foregoing. Anything contained herein to the
contrary notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.




     (b) Exculpatory Provisions. No Agent or any of its officers, partners, directors,
employees or agents shall be liable to Lenders for any action taken or omitted by any Agent under
or in connection with any of the Credit Documents except to the extent caused by such Agent’s gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection herewith or any of the
other Credit Documents or from the exercise of any power, discretion or authority vested in it
hereunder or thereunder unless and until such Agent shall have received instructions in respect
thereof from Requisite Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite Lenders (or such other
Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance with such
instructions. Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or sent by the proper
Person or Persons, and shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Holdings and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or (where so instructed)
refraining from acting hereunder or any of the other Credit Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 10.5).



     Section 9.4 Agents Entitled to Act as Lender.



     The agency hereby created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each Agent shall have the
same rights and powers hereunder as any other Lender and may exercise the same as if it were not
performing the duties and functions delegated to it hereunder, and the term “Lender” shall, unless
the context clearly otherwise indicates, include each Agent in its individual capacity. Any Agent
and its Affiliates may accept deposits from, lend money to, own securities of, and generally engage
in any kind of banking, trust, financial advisory or other business with Holdings or any of its
Affiliates as if it were not performing the duties specified herein, and may accept fees and other
consideration from the Company for services in connection herewith and otherwise without having to
account for the same to Lenders.



151









 





     Section 9.5 Lenders’ Representations, Warranties and Acknowledgment.



     (a) Each Lender represents and warrants that it has made its own independent investigation of
the financial condition and affairs of Holdings and its Subsidiaries in connection with Credit
Extensions hereunder and that it has made and shall continue to make its own appraisal of the
creditworthiness of Holdings and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any such appraisal on
behalf of Lenders or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.



     (b) Each Lender, by delivering its signature page to this Agreement and funding its Tranche B
Term Loan and/or Revolving Loans on the Closing Date or by the funding of any New Loans, as the
case may be, shall be deemed to have acknowledged receipt of, and consented to and approved, each
Credit Document and each other document required to be approved by any Agent, Requisite Lenders or
Lenders, as applicable on the Closing Date or as of the date of funding of such New Loans.



     Section 9.6 Right to Indemnity.



     Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each Agent, to
the extent that such Agent shall not have been reimbursed by any Credit Party, for and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against such Agent in exercising its
powers, rights and remedies or performing its duties hereunder or under the other Credit Documents
or otherwise in its capacity as such Agent in any way relating to or arising out of this Agreement
or the other Credit Documents; provided, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent’s gross negligence or willful misconduct. If any indemnity
furnished to any Agent for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished; provided, in no
event shall this sentence require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in excess
of such Lender’s Pro Rata Share thereof; and provided further, this sentence shall
not be deemed to require any Lender to indemnify any Agent against any liability, obligation, loss,
damage, penalty, action, judgment, suit, cost, expense or disbursement described in the proviso in
the immediately preceding sentence.



     Section 9.7 Successor Administrative Agent, Collateral Agent. Swingline Lender, Canadian
Agent and Canadian Swingline Lender.



     (a) Administrative Agent may resign at any time by giving thirty (30) days’ prior written
notice thereof to Lenders and the Company, and Administrative Agent may be removed



152









 




at any time with or without cause by an instrument or concurrent instruments in writing
delivered to the Company and Administrative Agent and signed by Requisite Lenders. Upon any such
notice of resignation or any such removal, Requisite Lenders shall have the right, upon five (5)
Business Days’ notice to the Company, to appoint a successor Administrative Agent. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed Administrative Agent and the
retiring or removed Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Administrative Agent under the Credit Documents, and
(ii) take such other actions, as may be necessary or appropriate in connection with the assignment
to such successor Administrative Agent whereupon such retiring or removed Administrative Agent
shall be discharged from its duties and obligations hereunder. After any retiring or removed
Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent hereunder. Any resignation or removal of Administrative Agent
pursuant to this Section shall also constitute the resignation or removal of Wachovia or its
successor as Collateral Agent, and any successor Administrative Agent appointed pursuant to this
Section shall, upon its acceptance of such appointment, become the successor Collateral Agent for
all purposes hereunder and under the Credit Documents and such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges and duties of the
retiring or removed Collateral Agent under this Agreement and the other Credit Documents, and the
retiring or removed Collateral Agent under this Agreement and the other Credit Documents shall
promptly (i) transfer to such successor Collateral Agent all sums, Securities and other items of
Collateral held under this Agreement or the Credit Documents, together with all records and other
documents necessary or appropriate in connection with the performance of the duties of the
successor Collateral Agent under this Agreement or the other Credit Documents, and (ii) execute and
deliver to such successor Collateral Agent or otherwise authorize the filing of such amendments to
financing statements, and take such other actions, as may be necessary or appropriate in connection
with the assignment to such successor Collateral Agent of the security interests created under the
Credit Documents, whereupon such retiring or removed Collateral Agent shall be discharged from its
duties and obligations under this Agreement and other Credit Documents. After any retiring or
removed Collateral Agent’s resignation or removal under this Agreement and other Credit Documents,
the provisions of this Section 9 and the other Credit Documents shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Agreement or the other Credit Documents
while it was the Collateral Agent hereunder or thereunder. Any resignation or removal of
Administrative Agent pursuant to this Section shall also constitute the resignation or removal of
Wachovia or its successor as Swingline Lender, and any successor Administrative Agent appointed
pursuant to this Section shall, upon its acceptance of such appointment, become the successor
Swingline Lender for all purposes hereunder. In such event (a) the Company shall prepay any
outstanding Swingline Loans made by the retiring or removed Administrative Agent in its capacity as
Swingline Lender, (b) upon such prepayment, the retiring or removed Administrative Agent and
Swingline Lender shall surrender any Swingline Note held by it to the Company for cancellation, and
(c) the Company shall issue, if so requested by successor Administrative Agent and Swingline Loan
Lender, a new Swingline Note to the successor




153









 







Administrative Agent and Swingline Lender, in the principal amount of the Swingline Loan
Sublimit then in effect and with other appropriate insertions.




     (b) Canadian Agent may resign at any time by giving thirty (30) days’ prior written notice
thereof to Lenders and the Company, and Canadian Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to the Company and Canadian
Agent and signed by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five (5) Business Days’ notice to the Company, to
appoint a successor Canadian Agent which shall be a resident of Canada for purposes of the Income
Tax Act (Canada). Upon the acceptance of any appointment as Canadian Agent hereunder by a
successor Canadian Agent, that successor Canadian Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or removed Canadian Agent
and the retiring or removed Canadian Agent shall promptly (i) transfer to such successor Canadian
Agent all records and other documents necessary or appropriate in connection with the performance
of the duties of the successor Canadian Agent under the Credit Documents, and (ii) take such other
actions, as may be necessary or appropriate in connection with the assignment to such successor
Canadian Agent whereupon such retiring or removed Canadian Agent shall be discharged from its
duties and obligations hereunder. After any retiring or removed Canadian Agent’s resignation or
removal hereunder as Canadian Agent, the provisions of this Section 9 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Canadian Agent hereunder. Any
resignation or removal of Canadian Agent pursuant to this Section shall also constitute the
resignation or removal of Wachovia or its successor as Canadian Swingline Lender, and any successor
Canadian Agent appointed pursuant to this Section shall, upon its acceptance of such appointment,
become the successor Canadian Swingline Lender for all purposes hereunder. In such event (a) the
Company shall prepay any outstanding Canadian Swingline Loans made by the retiring or removed
Canadian Agent in its capacity as Canadian Swingline Lender, (b) upon such prepayment, the retiring
or removed Canadian Agent and Canadian Swingline Lender shall surrender any Canadian Swingline Note
held by it to the Company for cancellation, and (c) the Company shall issue, if so requested by
successor Canadian Agent and Canadian Swingline Loan Lender, a new Canadian Swingline Note to the
successor Canadian Agent and Canadian Swingline Lender, in the principal amount of the Canadian
Swingline Loan Sublimit then in effect and with other appropriate insertions.



     Section 9.8 Collateral Documents and Guaranty.



     (a) Agents under Collateral Documents and Guaranty. Each Lender hereby further
authorizes Administrative Agent, Canadian Agent or Collateral Agent, as applicable, on behalf of
and for the benefit of Lenders, to be the agent for and representative of Lenders with respect to
the Guaranty, the Collateral and the Collateral Documents. Subject to Section 10.5, without
further written consent or authorization from Lenders, Administrative Agent, Canadian Agent or
Collateral Agent, as applicable, may execute any documents or instruments necessary to (i) release
any Lien encumbering any item of Collateral that is the subject of a sale or other disposition of
assets permitted hereby or to which Requisite Lenders (or such other Lenders as may be required to
give such consent under Section 10.5) have otherwise consented or (ii) release any Guarantor from
the Guaranty pursuant to Section 7.11 or with respect to which



154









 




Requisite Lenders (or such other Lenders as may be required to give such consent under Section
10.5) have otherwise consented.




     (b) Right to Realize on Collateral and Enforce Guaranty. Anything contained in any of
the Credit Documents to the contrary notwithstanding, the Company, Administrative Agent, Canadian
Agent, Collateral Agent and each Lender hereby agree that (i) no Lender shall have any right
individually to realize upon any of the Collateral or to enforce the Guaranty, it being understood
and agreed that all powers, rights and remedies hereunder may be exercised solely by Administrative
Agent or the Canadian Agent, as applicable, on behalf of Lenders, as applicable, in accordance with
the terms hereof and all powers, rights and remedies under the Collateral Documents may be
exercised solely by Collateral Agent or the Canadian Agent, as applicable, and (ii) in the event of
a foreclosure by Collateral Agent on any of the Collateral pursuant to a public or private sale,
Collateral Agent or the Canadian Agent, as applicable, or any Lender may be the purchaser of any or
all of such Collateral at any such sale and Collateral Agent or the Canadian Agent, as applicable,
as agent for and representative of U.S. Secured Parties and Canadian Secured Parties, respectively,
(but not any Lender or Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the Collateral sold at any
such public sale, to use and apply any of the U.S. Obligations and Canadian Obligations, as
applicable, as a credit on account of the purchase price for any collateral payable by Collateral
Agent or the Canadian Agent, as applicable, at such sale.



SECTION 10




MISCELLANEOUS




     Section 10.1 Notices.



     Unless otherwise specifically provided herein, any notice or other communication herein
required or permitted to be given to a Credit Party, Syndication Agent, Collateral Agent,
Administrative Agent, Canadian Agent, Swingline Lender or Issuing Bank, shall be sent to such
Person’s address as set forth on Appendix A or in the other relevant Credit Document, and in the
case of any Lender, the address as indicated on Appendix A or otherwise indicated to Administrative
Agent in writing. Each notice hereunder shall be in writing and may be personally served, telexed
or sent by facsimile or regular mail or courier service and shall be deemed to have been given when
delivered in person or by courier service and signed for against receipt thereof, upon receipt of
facsimile or telex, or three (3) Business Days after depositing it in the regular mail with postage
prepaid and properly addressed; provided, no notice to any Agent shall be effective until
received by such Agent. Unless specifically provided for herein, delivery of any notice or other
communication herein requested or permitted by electronic transmission, (including without
limitation, e-mail) shall not constitute delivery hereunder.



155









 





     Section 10.2 Expenses.



     Whether or not the transactions contemplated hereby shall be consummated, the Company agrees
to pay promptly (a) all the actual and reasonable costs and expenses of preparation of the Credit
Documents and any consents, amendments, waivers or other modifications thereto; (b) all the
reasonable costs of furnishing all opinions by counsel for the Company and the other Credit
Parties; (c) the reasonable fees, expenses and disbursements of counsel to Agents (in each case
including allocated costs of internal counsel) in connection with the negotiation, preparation,
execution and administration of the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by the any Credit Party; (d) all
the actual costs and reasonable expenses of creating and perfecting Liens in favor of Collateral
Agent, Administrative Agent or Canadian Agent, as applicable, for the benefit of Lenders pursuant
hereto, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search
fees, title insurance premiums and reasonable fees, expenses and disbursements of counsel to each
Agent and of counsel providing any opinions that any Agent or Requisite Lenders may request in
respect of the Collateral or the Liens created pursuant to the Collateral Documents; (e) all the
actual costs and reasonable fees, expenses and disbursements of any auditors, accountants,
consultants or appraisers retained by any Agent with the prior consent of Company (not to be
unreasonably withheld); (f) all the actual costs and reasonable expenses (including the reasonable
fees, expenses and disbursements of any appraisers, consultants, advisors and agents employed or
retained by Agents and their counsel) in connection with the custody or preservation of any of the
Collateral; (g) all other actual and reasonable costs and expenses incurred by each Agent in
connection with the syndication of the Loans and Commitments and the negotiation, preparation and
execution of the Credit Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (h) after the occurrence of a
Default or an Event of Default, all costs and expenses, including attorneys’ fees (including
allocated costs of internal counsel) and costs of settlement, incurred by any Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from any Credit Party hereunder or
under the other Credit Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Guaranty) or in connection with any refinancing or restructuring of the
credit arrangements provided hereunder in the nature of a “work-out” or pursuant to any insolvency
or bankruptcy cases or proceedings.



     Section 10.3 Indemnity.



     (a) In addition to the payment of expenses pursuant to Section 10.2, whether or not the
transactions contemplated hereby shall be consummated, each Credit Party agrees to defend (subject
to Indemnitees’ selection of counsel), indemnify, pay and hold harmless, each Agent and Lender and
the officers, partners, directors, trustees, employees, agents, advisors and Affiliates of each
Agent and each Lender (each, an “Indemnitee”), from and against any and all Indemnified
Liabilities; provided, no Credit Party shall have any obligation to any Indemnitee
hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities
arise from the gross negligence, bad faith or willful misconduct of such Indemnitee. To the extent
that the undertakings to defend, indemnify, pay and hold harmless set forth in this Section 10.3
may be unenforceable in whole or in part because they are violative of any law or



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public policy, the applicable Credit Party shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Indemnitees or any of them.




     (b) To the extent permitted by applicable law, no Credit Party shall assert, and each Credit
Party hereby waives, any claim against Lenders, Agents and their respective Affiliates, directors,
employees, attorneys, agents or advisors, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable legal requirement)
arising out of, in connection with, arising out of, as a result of, or in any way related to, this
Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or
referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use
of the proceeds thereof or any act or omission or event occurring in connection therewith, and
Holdings and the Company hereby waives, releases and agrees not to sue upon any such claim or any
such damages, whether or not accrued and whether or not known or suspected to exist in its favor.



     Section 10.4 Set-Off.



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



     Section 10.5 Amendments and Waivers.



     (a) Requisite Lenders’ Consent. Subject to Section 10.5(b) and 10.5(c), no amendment,
modification, termination or waiver of any provision of the Credit Documents, or consent to any
departure by any Credit Party therefrom, shall in any event be effective without the written
concurrence of the Requisite Lenders.



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




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




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




     (iii) extend the stated expiration date of any Letter of Credit beyond the Revolving
Commitment Termination Date;




     (iv) reduce the rate of interest on any Loan (other than any waiver of any increase in
the interest rate applicable to any Loan pursuant to Section 2.11) or any fee payable
hereunder or any other amount payable under any Credit Document;




     (v) reduce the amount due and payable or extend the time for payment of any such
interest or fees;




     (vi) reduce the principal amount of any Loan or any reimbursement obligation in respect
of any Letter of Credit;




     (vii) amend or modify the definition of Obligations to delete or exclude any obligation
or liability described therein without the written consent of each Lender and each Lender
Counterparty directly affected thereby; or




     (viii) amend, modify or waive the order in which Obligations are paid in Section 8.3
without the written consent of each Lender and each Lender Counterparty directly affected
thereby;




     (ix) amend, modify, terminate or waive any provision of this Section 10.5(b) or Section
10.5(c);




     (x) amend any provision of Section 2.17(c), Section 2.18 or amend the definition of
“Requisite Lenders” or “Pro Rata Share”; provided, with the consent
of Requisite Lenders, additional extensions of credit pursuant hereto may be included in the
determination of “Requisite Lenders” or “Pro Rata Share” on substantially
the same basis as the Term Loan Commitments, the Term Loans, the Revolving Commitments and
the Revolving Loans are included on the Closing Date;




     (xi) release all or substantially all of the Collateral or all or substantially all of
the Guarantors from the Guaranty without the consent of each Lender and each Lender
Counterparty; or




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



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




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




     (ii) amend, modify, terminate or waive any provision hereof relating to the U.S.
Swingline Sublimit or the U.S. Swingline Loans without the consent of U.S. Swingline Lender;




     (iii) amend, modify, terminate or waive any provision hereof relating to the Canadian
Swingline Sublimit or the Canadian Swingline Loans without the consent of Canadian Swingline
Lender;




     (iv) amend, modify, terminate or waive any obligation of Lenders relating to the
purchase of participations in Letters of Credit as provided in Section 2.5(e) without the
written consent of Administrative Agent and of Issuing Bank;




     (v) without the consent of Lenders with Revolver Exposure holding in the aggregate more
than 50% of the outstanding Revolving Commitments (or if the Revolving Commitments have
been terminated, the aggregate principal amount of outstanding Revolving Loans), amend,
modify or waive any provision in Section 3.2 or waive any Default or Event of Default (or
amend any Credit Document to effectively waive any Default or Event of Default) if the
effect of such amendment, modification or waiver is that Lenders with Revolving Exposure
shall be required to fund Revolving Loans when such Lenders would otherwise not be required
to do so; or




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



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



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     Section 10.6 Successors and Assigns; Participations.



     (a) Generally. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties hereto and the
successors and assigns of Lenders. No Credit Party’s rights or obligations hereunder nor any
interest therein may be assigned or delegated by any Credit Party without the prior written consent
of all Lenders. Nothing in this Agreement, expressed or implied, shall be construed to confer upon
any Person (other than the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, Affiliates of each of the Agents and Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.



     (b) Register. The Company, Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the corresponding
Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any
such Commitment or Loan shall be effective, in each case, unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been delivered to and accepted by
Administrative Agent and recorded in the Register as provided in Section 10.6(e). Prior to such
recordation, all amounts owed with respect to the applicable Commitment or Loan shall be owed to
the Lender listed in the Register as the owner thereof, and any request, authority or consent of
any Person who, at the time of making such request or giving such authority or consent, is listed
in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans.



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




     (i) to any Person meeting the criteria of clause (i) of the definition of the term of
“Eligible Assignee” upon the giving of notice to the Company and Administrative Agent;
provided so long as no Default or Event of Default has occurred and is continuing
hereunder, an assignment of the Canadian Obligations permitted under this Section 10.6(c)(i)
shall only be made to a Person who would qualify as a Canadian Lender; and




     (ii) to any Person meeting the criteria of clauses (ii) or (iii) of the definition of
the term of “Eligible Assignee” (except in the case of assignments made by or to Wachovia or
GSCP as part of initial syndication), consented to by each of the Company and Administrative
Agent (such consent not to be, in the case of the Company, required at any time a Default or
Event of Default shall have occurred and then be continuing or during the initial
syndication); provided, further each such assignment pursuant to this Section
10.6(c)(ii) shall be in an aggregate amount of not less than (A) $5,000,000 (or such lesser
amount as may be agreed to by the Company and Administrative Agent or as shall constitute
the aggregate amount of the Revolving Commitments and Revolving Loans of the assigning
Lender) with respect to the assignment of the Revolving



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Commitments and Revolving Loans and (B) $1,000,000 (or such lesser amount as may be
agreed to by the Company and Administrative Agent or as shall constitute the aggregate
amount of the Tranche B Term Loan or New Loans of a Series of the assigning Lender) with
respect to the assignment of Term Loans.



     (d) Mechanics. The assigning Lender and the assignee thereof shall execute and
deliver to Administrative Agent an Assignment Agreement, and such forms, certificates or other
evidence, if any, with respect to United States federal and foreign income tax withholding matters
as the assignee under such Assignment Agreement may be required to deliver to Administrative Agent
pursuant to Section 2.21(c). Notwithstanding anything to the contrary herein or in any Assignment
Agreement, in the case of an assignment to a Person meeting the criteria of clause (i) of the
definition of the term “Eligible Assignee” of the assigning Lender, such assignment shall be
effective between such assigning Lender and such Eligible Assignee immediately without compliance
with the conditions for assignment under Sections 10.6(b) through (d), but shall not be effective
with respect to any Credit Party, Administrative Agent, any other Agent, any Issuing Bank, any
Swingline Lender or any Lender, and each Credit Party, Administrative Agent, each other Agent, each
Issuing Bank, each Swingline Lender and each Lender shall be entitled to deal solely and directly
with such assigning Lender under any such assignment, in each case, until the conditions for
assignment under Sections 10.6(b) through (d) have been complied with.



     (e) Assignment Fee. Upon its receipt of a duly executed Assignment Agreement,
together with payment to the Administrative Agent or the Canadian Agent, as applicable, by the
assigning Lender or the assignee thereof, as agreed between them, of a registration and processing
fee of $3,500 for each assignee (other than an assignee that is an Affiliate of the assigning
Lender) listed in such Assignment Agreement subject to such Assignment Agreement, the
Administrative Agent or the Canadian Agent, as applicable, shall (i) accept such Assignment
Agreement, (ii) record the information contained therein in the Register and (iii) give prompt
notice of such acceptance and recordation to the Company and shall maintain a copy of such
Assignment Agreement.



     (f) Representations and Warranties of Assignee. Each Lender, upon execution and
delivery hereof or upon executing and delivering an Assignment Agreement, as the case may be,
represents and warrants as of the Closing Date or as of the applicable Effective Date (as defined
in the applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it has experience
and expertise in the making of or investing in commitments or loans such as the applicable
Commitments or Loans, as the case may be; (iii) it will make or invest in, as the case may be, its
Commitments or Loans for its own account in the ordinary course of its business and without a view
to distribution of such Commitments or Loans within the meaning of the Securities Act or the
Exchange Act or other federal securities laws (it being understood that, subject to the provisions
of this Section 10.6, the disposition of such Revolving Commitments or Loans or any interests
therein shall at all times remain within its exclusive control); and (iv) in the case of an
assignment of Canadian Obligations made pursuant to Section 10.6(c)(i) so long as no Default or
Event of Default has occurred and is continuing it is a Canadian Lender.



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     (g) Effect of Assignment. Subject to the terms and conditions of this Section 10.6,
as of the “Effective Date” specified in the applicable Assignment Agreement: (i) the assignee
thereunder shall have the rights and obligations of a “Lender” hereunder to the extent such rights
and obligations hereunder have been assigned to it pursuant to such Assignment Agreement and shall
thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been assigned thereby
pursuant to such Assignment Agreement, relinquish its rights (other than any rights which survive
the termination hereof under Section 10.8) and be released from its obligations hereunder (and, in
the case of an Assignment Agreement covering all or the remaining portion of an assigning Lender’s
rights and obligations hereunder, such Lender shall cease to be a party hereto; provided,
anything contained in any of the Credit Documents to the contrary notwithstanding, (y) Issuing Bank
shall continue to have all rights and obligations thereof with respect to such Letters of Credit
until the cancellation or expiration of such Letters of Credit and the reimbursement of any amounts
drawn thereunder and (z) such assigning Lender shall continue to be entitled to the benefit of all
indemnities hereunder as specified herein with respect to matters arising out of the prior
involvement of such assigning Lender as a Lender hereunder); (iii) the Commitments shall be
modified to reflect the Commitment of such assignee and any Revolving Commitment of such assigning
Lender, if any; and (iv) if any such assignment occurs after the issuance of any Note hereunder,
the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for cancellation, and thereupon
the Company shall issue and deliver new Notes, if so requested by the assignee and/or assigning
Lender, to such assignee and/or to such assigning Lender, with appropriate insertions, to reflect
the outstanding Loans of the assignee and/or the assigning Lender.



     (h) Participations. Each Lender shall have the right at any time to sell one or more
participations to any Person (other than Holdings, any of its Subsidiaries or any of its
Affiliates) in all or any part of its Commitments, Loans or in any other Obligation. The holder of
any such participation, other than an Affiliate of the Lender granting such participation, shall
not be entitled to require such Lender to take or omit to take any action hereunder except with
respect to any amendment, modification or waiver that would (i) extend the final scheduled maturity
of any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Commitment Termination Date) in which such participant is participating, or reduce the
rate or extend the time of payment of interest or fees thereon (except in connection with a waiver
of applicability of any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant’s participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Commitment shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without the consent of any
participant if the participant’s participation is not increased as a result thereof), (ii) consent
to the assignment or transfer by any Credit Party of any of its rights and obligations under this
Agreement or (iii) release all or substantially all of the Collateral under the Collateral
Documents (except as expressly provided in the Credit Documents) supporting the Loans hereunder in
which such participant is participating. The Company agrees that each participant shall be
entitled to the benefits of Sections 2.19(c), 2.20 and 2.21 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (c) of this Section;
provided, (i) a participant shall not be entitled to receive any greater payment under
Section 2.20



162









 




or 2.21 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such participant, unless the sale of the participation to such participant is
made with the Company’s prior written consent and (ii) a participant that would be a Non-US Lender
if it were a Lender shall not be entitled to the benefits of Section 2.21 unless the Company is
notified of the participation sold to such participant and such participant agrees, for the benefit
of the Company, to comply with Section 2.21 as though it were a Lender. To the extent permitted by
law, each participant also shall be entitled to the benefits of Section 10.4 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.18 as though it were a Lender.




     (i) Certain Other Assignments. In addition to any other assignment permitted pursuant
to this Section 10.6, (i) any Lender may assign and/or pledge all or any portion of its Loans, the
other Obligations owed by or to such Lender, and its Notes, if any, to secure obligations of such
Lender including, without limitation, any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank and (ii) any Lender may assign and/or pledge all or any portion
of its Loans, the other Obligations owned by or to such Lender, and its Notes, if any, to secure
obligations of such Lender to any holders of obligations owed, or securities issued, by such Lender
as collateral security for such obligations or securities, or to any trustee for, or any other
representative of such holders; provided, no Lender, as between the Company and such
Lender, shall be relieved of any of its obligations hereunder as a result of any such assignment
and pledge, and provided, further, in no event shall the applicable Federal Reserve
Bank, pledgee or trustee be considered to be a “Lender” or be entitled to require the assigning
Lender to take or omit to take any action hereunder.



     (j) Canadian Assignments. Notwithstanding the provisions of this Section 10.6, so
long as no Event of Default has occurred and is continuing, any loans and any participation
interests in any Loans made to the Canadian Borrowers may only be sold or assigned to a Canadian
Lender.



     Section 10.7 Independence of Covenants.



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



     Section 10.8 Survival of Representations, Warranties and Agreements.



     All representations, warranties and agreements made herein shall survive the execution and
delivery hereof and the making of any Credit Extension. Notwithstanding anything herein or implied
by law to the contrary, the agreements of each Credit Party set forth in Sections 2.19(c), 2.20,
2.21, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.18, 9.3(b) and 9.6
shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and
the reimbursement of any amounts drawn thereunder, and the termination hereof.



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     Section 10.9 No Waiver; Remedies Cumulative.



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



     Section 10.10 Marshalling; Payments Set Aside.



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



     Section 10.11 Severability.



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



     Section 10.12 Obligations Several; Independent Nature of Lenders’ Rights.



     The obligations of Lenders hereunder are several and no Lender shall be responsible for the
obligations or Commitment of any other Lender hereunder. Nothing contained herein or in any other
Credit Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any other kind of entity.
The amounts payable at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out



164









 




hereof and it shall not be necessary for any other Lender to be joined as an additional party
in any proceeding for such purpose.




     Section 10.13 Headings.



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



     Section 10.14 APPLICABLE LAW.



     THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK;
PROVIDED, HOWEVER, THAT EACH MORTGAGE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS
LOCATED AND EACH OF THE CANADIAN COLLATERAL DOCUMENTS SHALL, EXCEPT AS OTHERWISE PROVIDED THEREIN,
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF
ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.



     Section 10.15 CONSENT TO JURISDICTION.



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



165









 





     Section 10.16 WAIVER OF JURY TRIAL.



     EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS
OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS
RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE
OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.



     Section 10.17 Confidentiality.



     Each Lender shall hold all non-public information regarding the Company and its Subsidiaries
and their businesses obtained by such Lender pursuant to the requirements hereof in accordance with
such Lender’s customary procedures for handling confidential information of such nature, it being
understood and agreed by the Company that, in any event, a Lender may make (i) disclosures of such
information to Affiliates of such Lender and to such Lender’s and such Lender’s Affiliates’
directors, officers, employees, agents and advisors (and to other persons authorized by a Lender or
Agent to organize, present or disseminate such information in connection with disclosures otherwise
made in accordance with this Section 10.17) (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such information and instructed
to keep such information confidential), (ii) disclosures of such information reasonably required by
any pledgee referred to in Section 10.6(i) or any bona fide or potential assignee, transferee or
participant in connection with the contemplated assignment, transfer or participation by such
Lender of any Loans or any participations therein or by any direct or indirect contractual
counterparties (or the professional



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advisors thereto) in Hedge Agreements (provided, such counterparties and advisors are advised
of and agree to be bound by the provisions of this Section 10.17), (iii) disclosure to any rating
agency when required by it, provided that, prior to any disclosure, such rating agency
shall undertake in writing to preserve the confidentiality of any confidential information relating
to the Credit Parties received by it from any of the Agents or any Lender, and (iv) disclosures
required or requested by any governmental agency or representative thereof or by the NAIC or
pursuant to legal or judicial process; provided, unless specifically prohibited by
applicable law or court order, each Lender shall make reasonable efforts to notify the Company of
any request by any governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition or other routine examination of such
Lender by such governmental agency) for disclosure of any such non-public information prior to
disclosure of such information.




     Section 10.18 Usury Savings Clause.



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



     Section 10.19 Counterparts.



     This Agreement may be executed in any number of counterparts, each of which when so executed
and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.



     Section 10.20 Effectiveness.



     This Agreement shall become effective upon the execution of a counterpart hereof by each of
the parties hereto and receipt by the Company and Administrative Agent of written notification of
such execution and authorization of delivery thereof.



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     Section 10.21 USA Patriot Act.



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



     Section 10.22 Judgment Currency.



     If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due
hereunder or under any other Credit Document in one currency into another currency, the rate of
exchange used shall be that at which in accordance with normal banking procedures the
Administrative Agent or Canadian Agent, as applicable, could purchase the first currency with such
other currency on the Business Day preceding that on which final judgment is given. The obligation
of the Borrowers in respect of any such sum due from it to the Administrative Agent, Canadian Agent
or any Lender hereunder or under the other Credit Documents shall, notwithstanding any judgment in
a currency (the “Judgment Currency”) other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be
discharged only to the extent that on the Business Day following receipt by the Administrative
Agent, Canadian Agent or such Lender of any sum adjudged to be so due in the Judgment Currency, the
Administrative Agent, Canadian Agent or such Lender may in accordance with normal banking
procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the
Agreement Currency so purchased is less than the sum originally due to the Administrative Agent,
Canadian Agent or such Lender in the Agreement Currency, the Borrowers agree, as a separate
obligation and notwithstanding any such judgment, to indemnify the Administrative Agent, Canadian
Agent or such Lender or the Person to whom such obligation was owing against such loss. If the
amount of the Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent, Canadian Agent or such Lender in such currency, the Administrative Agent,
Canadian Agent or such Lender agrees to return the amount of any excess to the Borrowers (or to any
other Person who may be entitled thereto under applicable law).



SECTION 11



SPECIAL PROVISIONS APPLICABLE TO LENDERS UPON THE OCCURRENCE OF A SHARING EVENT




     Section 11.1 Participations.



     Upon the occurrence of a Sharing Event, the Lenders shall automatically and without further
action be deemed to have exchanged interests in the outstanding Loans, outstanding Letters of
Credit and outstanding Bankers’ Acceptance Advances such that, in lieu of the interests of each
Lender in each Loan, each outstanding Letter of Credit and each Bankers’ Acceptance Advance, such
Lender shall hold an interest in all Loans made to the Borrowers, all



168









 





     outstanding Letters of Credit issued for the account of such Persons or their Subsidiaries at
such time, and all Bankers’ Acceptance Advances made for the account of the Borrowers, whether or
not such Lender shall previously have participated therein, equal to such Lender’s Exchange
Percentage thereof. The foregoing exchanges shall be accomplished automatically pursuant to this
Section 11.1 through purchases and sales of participations in the various Loans and outstanding
Letters of Credit as required hereby, although at the request of the Administrative Agent each
Lender hereby agrees to enter into customary participation agreements approved by the
Administrative Agent to evidence the same. All purchases and sales of participating interests
pursuant to this Section 11.1 shall be made in U.S. Dollars. At the request of the Administrative
Agent, each Lender which has sold participations in any of its Loans and outstanding Letters of
Credit as provided above (through the Administrative Agent) will deliver to each Lender (through
the Administrative Agent) which has so purchased a participating interest therein a participation
certificate in the appropriate amount as determined in conjunction with the Administrative Agent
and Canadian Agent. It is understood that the amount of funds delivered by each Lender shall be
calculated on a net basis, giving effect to both the sales and purchases of participations by the
various Lenders as required above.



     Section 11.2 Administrative Agent’s Determinations Binding.



     All determinations by the Administrative Agent pursuant to this Section 11 shall be made by it
in accordance with the provisions herein and with the intent being to equitably share the credit
risk for all Loans and Letters of Credit and other Credit Extensions hereunder in accordance with
the provisions hereof. Absent manifest error, all determinations by the Administrative Agent
hereunder shall be binding on the Credit Parties and each of the Lenders. The Administrative Agent
shall have no liability to any Credit Party or Lender hereunder for any determinations made by it
hereunder except to the extent resulting from the Administrative Agent’s gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision).



     Section 11.3 Participation Payments in U.S. Dollars.



     Upon, and after, the occurrence of a Sharing Event (a) no further Credit Extensions shall be
made, (b) all amounts from time to time accruing with respect to, and all amounts from time to time
payable on account of, Loans denominated in Canadian Dollars (including, without limitation, any
interest and other amounts which were accrued but unpaid on the date of such Sharing Event) shall
be payable in U.S. Dollars (taking the Dollar Amount of such amounts on the date payment is made
with respect thereto) and shall be distributed by the Administrative Agent for the account of the
Lenders which made such Loans or are participating therein and (c) all Commitments shall be
automatically terminated. Notwithstanding anything to the contrary contained above, the failure of
any Lender to purchase its participating interests as required above in any Credit Extensions upon
the occurrence of a Sharing Event shall not relieve any other Lender of its obligation hereunder to
purchase its participating interests in a timely manner, but no Lender shall be responsible for the
failure of any other Lender to purchase the participating interest to be purchased by such other
Lender on any date.



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     Section 11.4 Delinquent Participation Payments.



     If any amount required to be paid by any Lender pursuant to this Section 11 is not paid to the
Administrative Agent on the date upon which the Sharing Event occurred, such Lender shall, in
addition to such aforementioned amount, also pay to the Administrative Agent on demand an amount
equal to the product of (a) the amount so required to be paid by such Lender for the purchase of
its participations, (b) the daily average Federal Funds Rate, during the period from and including
the date of request for payment to the date on which such payment is immediately available to the
Administrative Agent and (c) a fraction the numerator of which is the number of days that elapsed
during such period and the denominator of which is 360. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts payable under this Section 11 shall be
conclusive in the absence of manifest error. Amounts payable by any Lender pursuant to this
Section 11 shall be paid to the Administrative Agent for the account of the relevant Lenders;
provided that, if the Administrative Agent (in its sole discretion) has elected to fund on
behalf of such other Lender the amounts owing to such other Lenders, then the amounts shall be paid
to the Administrative Agent for its own account.



     Section 11.5 Settlement of Participation Payments.



     Whenever, at any time after the relevant Lenders have received from any other Lenders
purchases of participations pursuant to this Section 11, the various Lenders receive any payment on
account thereof, such Lenders will distribute to the Administrative Agent, for the account of the
various Lenders participating therein, such Lenders’ participating interests in such amounts
(appropriately adjusted, in the case of interest payments, to reflect the period of time during
which such participations were outstanding) in like funds as received; provided,
however, that in the event that such payment received by any Lenders is required to be
returned, the Lenders who received previous distributions in respect of their participating
interests therein will return to the respective Lenders any portion thereof previously so
distributed to them in like funds as such payment is required to be returned by the respective
Lenders.



     Section 11.6 Participation Obligations Absolute.



     Each Lender’s obligation to purchase participating interests pursuant to this Section 11 shall
be absolute and unconditional and shall not be affected by any circumstance including, without
limitation, (a) any setoff, counterclaim, recoupment, defense or other right which such Lender may
have against any other Lender, any Credit Party or any other Person for any reason whatsoever, (b)
the occurrence or continuance of a Default or an Event of Default, (c) any adverse change in the
condition (financial or otherwise) of any Credit Party or any other Person, (iv) any breach of this
Agreement by any Credit Party, any Lender or any other Person, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.



     Section 11.7 Increased Costs; Indemnities.



     Notwithstanding anything to the contrary contained elsewhere in this Agreement, upon any
purchase of participations as required above, (a) each Lender which has purchased such



170









 




participations shall be entitled to receive from the Borrowers any increased costs and
indemnities directly from Borrowers to the same extent as if it were the direct Lender as opposed
to a participant therein and (b) each Lender which has sold such participations shall be entitled
to receive from the Borrowers indemnification from and against any and all taxes imposed as a
result of the sale of the participations pursuant to this Section 11. Each Borrower acknowledges
and agrees that, upon the occurrence of a Sharing Event and after giving effect to the requirements
of this Section 11, increased taxes may be owing by it pursuant to Section 2.21, which taxes shall
be paid (to the extent provided in Section 2.21) by the respective Borrower or Borrowers, without
any claim that the increased Taxes are not payable because same resulted from the participations
effected as otherwise required by this Section 11.




     Section 11.8 Provisions Solely to Effect Intercreditor Agreement.



     The provisions of this Section 11 are and are intended solely for the purpose of effecting a
sharing arrangement among the Lenders and reflects an agreement among creditors. Except as
contemplated by Sections 11.3 and 11.7, none of the Credit Parties shall have any rights or
obligations under this Section 11. Nothing contained in this Section 11 is intended to or shall
impair the obligations of the Credit Parties, which are absolute and unconditional, to pay the
Credit Party Obligations as and when the same shall become due and payable in accordance with their
terms.



[Remainder of page intentionally left blank]




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



	 	 	 	 	 	 	 
	 	 	EASTON-BELL SPORTS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mark Tripp	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Mark Tripp	 	 
	 

	 	Title:
	 	Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	EASTON SPORTS CANADA, INC.	 	 
	 	 	ALL AMERICAN SPORTS CORPORATION
	 	 	BELL RACING COMPANY	 	 
	 	 	BELL SPORTS CORP.	 	 
	 	 	BELL SPORTS, INC.	 	 
	 	 	CDT NEVADA, INC.	 	 
	 	 	EASTON SPORTS ASIA, INC.	 	 
	 	 	EASTON SPORTS, INC.	 	 
	 	 	EQUILINK LICENSING, LLC	 	 
	 	 	MACMARK CORPORATION	 	 
	 	 	RIDDELL SPORTS GROUP, INC.
	 	 	RIDDELL, INC.	 	 
	 	 	RIDMARK CORPORATION	 	 
	 	 	RBG HOLDINGS CORP.	 	 
	 	 	4078624 CANADA INC.	 	 
	 	 	ALL-AMERICAN SPORTS (CANADA) LTD.
	 	 	BELL SPORTS CANADA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mark Tripp	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Mark Tripp	 	 
	 

	 	Title:
	 	Secretary of each of the foregoing	 	 






 









 






	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,	 	 
	 	 	as Sole Administrative Agent, Issuing Bank,
Collateral Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey M. Foley	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Jeffrey M. Foley	 	 
	 

	 	Title:
	 	Director	 	 






 









 






	 	 	 	 	 	 	 
	 	 	WACHOVIA CAPITAL FINANCE CORPORATION (CANADA),	 	 
	 	 	as Canadian Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 /s/ Enza Agosta	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Enza Agosta	 	 
	 

	 	Title:
	 	 Vice President	 	 






 









 






	 	 	 	 	 	 	 
	 	 	GOLDMAN SACHS CREDIT PARTNERS L.P.,	 	 
	 	 	As Joint Lead Arranger, Joint Bookrunner and
a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 /s/ Walter A. Jackson	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Walter A. Jackson	 	 
	 

	 	Title:
	 	Authorized Signatory