Exhibit 10.8


 


EXECUTION COPY


 




 





AMENDED AND
RESTATED CREDIT AGREEMENT


 


dated as of March 27,
2006,

(amending and restating the Credit Agreement dated

as of March 15, 2004)


 


among


 


TRUE TEMPER
CORPORATION,


 


TRUE TEMPER
SPORTS, INC.,

as Borrower


 


THE LENDERS PARTY
HERETO


 


and


 


CREDIT SUISSE,


as Administrative Agent


 






 


CREDIT SUISSE,

as Sole Bookrunner and Sole Lead Arranger


 


ANTARES
CAPITAL CORPORATION,

as Syndication Agent


 


GOLDMAN SACHS
CREDIT PARTNERS L.P.

and

MERRILL LYNCH CAPITAL,

a division of Merrill Lynch Business Financial Services Inc.,

as Co-Documentation Agents


 




 





 

















 


	
  TABLE OF CONTENTS

  
	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
  SECTION 1.01.

  	
  Defined Terms

  	
  1

  
	
  SECTION 1.02.

  	
  Terms Generally

  	
  31

  
	
  SECTION 1.03.

  	
  Classification of Loans
  and Borrowings

  	
  32

  
	
  SECTION 1.04.

  	
  Pro Forma Calculations

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE
  CREDITS

  	
  32

  
	
  SECTION 2.01.

  	
  Commitments

  	
  32

  
	
  SECTION 2.02.

  	
  Loans

  	
  33

  
	
  SECTION 2.03.

  	
  Borrowing Procedure

  	
  34

  
	
  SECTION 2.04.

  	
  Repayment of Loans;
  Evidence of Debt

  	
  35

  
	
  SECTION 2.05.

  	
  Fees

  	
  36

  
	
  SECTION 2.06.

  	
  Interest on Loans

  	
  37

  
	
  SECTION 2.07.

  	
  Default Interest

  	
  37

  
	
  SECTION 2.08.

  	
  Alternate Rate of
  Interest

  	
  37

  
	
  SECTION 2.09.

  	
  Termination and
  Reduction of Commitments

  	
  38

  
	
  SECTION 2.10.

  	
  Conversion and
  Continuation of Borrowings

  	
  38

  
	
  SECTION 2.11.

  	
  Repayment of Term
  Borrowings

  	
  40

  
	
  SECTION 2.12.

  	
  Prepayment

  	
  41

  
	
  SECTION 2.13.

  	
  Mandatory Prepayments

  	
  41

  
	
  SECTION 2.14.

  	
  Reserve Requirements;
  Change in Circumstances

  	
  43

  
	
  SECTION 2.15.

  	
  Change in Legality

  	
  44

  
	
  SECTION 2.16.

  	
  Indemnity

  	
  45

  
	
  SECTION 2.17.

  	
  Pro Rata Treatment

  	
  45

  
	
  SECTION 2.18.

  	
  Sharing of Setoffs

  	
  46

  
	
  SECTION 2.19.

  	
  Payments

  	
  46

  
	
  SECTION 2.20.

  	
  Taxes

  	
  47

  
	
  SECTION 2.21.

  	
  Assignment of
  Commitments Under Certain Circumstances; Duty to Mitigate

  	
  49

  
	
  SECTION 2.22.

  	
  Swingline Loans

  	
  50

  
	
  SECTION 2.23.

  	
  Letters of Credit

  	
  51

  
	
  SECTION 2.24.

  	
  Increase in Term Loan
  Commitments

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  57

  
	
  SECTION 3.01.

  	
  Organization; Powers

  	
  57

  
	
  SECTION 3.02.

  	
  Authorization; No
  Conflicts

  	
  58

  
	
  SECTION 3.03.

  	
  Enforceability

  	
  58

  
	
  SECTION 3.04.

  	
  Governmental Approvals

  	
  58

  
	
  SECTION 3.05.

  	
  Financial Statements

  	
  58

  
	
  SECTION 3.06.

  	
  No Material Adverse
  Change

  	
  59

  
	
  SECTION 3.07.

  	
  Title to Properties;
  Possession Under Leases

  	
  59

  
	
  SECTION 3.08.

  	
  Subsidiaries

  	
  59

  
	
  SECTION 3.09.

  	
  Litigation; Compliance
  with Laws

  	
  60

  
	
  SECTION 3.10.

  	
  Agreements

  	
  60

  
					



 


i

















 


	
  SECTION 3.11.

  	
  Federal Reserve
  Regulations

  	
  60

  
	
  SECTION 3.12.

  	
  Investment Company Act

  	
  60

  
	
  SECTION 3.13.

  	
  Use of Proceeds

  	
  60

  
	
  SECTION 3.14.

  	
  Tax Returns

  	
  61

  
	
  SECTION 3.15.

  	
  No Material
  Misstatements; Acquisition Documentation

  	
  61

  
	
  SECTION 3.16.

  	
  Employee Benefit Plans

  	
  61

  
	
  SECTION 3.17.

  	
  Environmental Matters

  	
  62

  
	
  SECTION 3.18.

  	
  Insurance

  	
  63

  
	
  SECTION 3.19.

  	
  Security Documents

  	
  63

  
	
  SECTION 3.20.

  	
  Location of Real
  Property

  	
  64

  
	
  SECTION 3.21.

  	
  Labor Matters

  	
  64

  
	
  SECTION 3.22.

  	
  Intellectual Property

  	
  64

  
	
  SECTION 3.23.

  	
  Solvency

  	
  64

  
	
  SECTION 3.24.

  	
  Senior Debt

  	
  65

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CONDITIONS
  OF LENDING

  	
  65

  
	
  SECTION 4.01.

  	
  All Credit Events

  	
  65

  
	
  SECTION 4.02.

  	
  First Credit Event

  	
  66

  
	
  SECTION 4.03.

  	
  Amendment Effective
  Date

  	
  69

  
	
  SECTION 4.04.

  	
  Funding Date

  	
  70

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  AFFIRMATIVE
  COVENANTS

  	
  71

  
	
  SECTION 5.01.

  	
  Existence; Businesses
  and Properties

  	
  71

  
	
  SECTION 5.02.

  	
  Insurance

  	
  71

  
	
  SECTION 5.03.

  	
  Obligations and Taxes

  	
  71

  
	
  SECTION 5.04.

  	
  Financial Statements,
  Reports, etc

  	
  72

  
	
  SECTION 5.05.

  	
  Litigation and Other
  Notices

  	
  73

  
	
  SECTION 5.06.

  	
  Information Regarding
  Collateral

  	
  74

  
	
  SECTION 5.07.

  	
  Maintaining Records;
  Access to Properties and Inspections

  	
  74

  
	
  SECTION 5.08.

  	
  Use of Proceeds

  	
  75

  
	
  SECTION 5.09.

  	
  Additional Collateral,
  etc

  	
  75

  
	
  SECTION 5.10.

  	
  Further Assurances

  	
  77

  
	
  SECTION 5.11.

  	
  Interest Rate
  Protection

  	
  77

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  NEGATIVE
  COVENANTS

  	
  77

  
	
  SECTION 6.01.

  	
  Indebtedness

  	
  78

  
	
  SECTION 6.02.

  	
  Liens

  	
  79

  
	
  SECTION 6.03.

  	
  Sale and Lease-Back
  Transactions

  	
  81

  
	
  SECTION 6.04.

  	
  Investments, Loans and
  Advances

  	
  82

  
	
  SECTION 6.05.

  	
  Mergers, Consolidations,
  Sales of Assets and Acquisitions

  	
  83

  
	
  SECTION 6.06.

  	
  Restricted Payments;
  Restrictive Agreements

  	
  84

  
	
  SECTION 6.07.

  	
  Transactions with
  Affiliates

  	
  86

  
	
  SECTION 6.08.

  	
  Business of Holdings,
  the Borrower and Subsidiaries; Limitation on Hedging Agreements

  	
  86

  
				



 


ii

















 


	
  SECTION 6.09.

  	
  Other Indebtedness and
  Agreements; Amendments to Acquisition Documentation

  	
  86

  
	
  SECTION 6.10.

  	
  Capital Expenditures

  	
  87

  
	
  SECTION 6.11.

  	
  Interest Coverage Ratio

  	
  87

  
	
  SECTION 6.12.

  	
  Leverage Ratio

  	
  88

  
	
  SECTION 6.13.

  	
  Fixed Charge Coverage
  Ratio

  	
  88

  
	
  SECTION 6.14.

  	
  Fiscal Year

  	
  88

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  EVENTS
  OF DEFAULT

  	
  88

  
	
  ARTICLE VIII

  	
  THE
  AGENTS AND THE ARRANGER

  	
  92

  
	
  ARTICLE IX

  	
  MISCELLANEOUS

  	
  94

  
	
  SECTION 9.01.

  	
  Notices

  	
  94

  
	
  SECTION 9.02.

  	
  Survival of Agreement

  	
  95

  
	
  SECTION 9.03.

  	
  Binding Effect

  	
  95

  
	
  SECTION 9.04.

  	
  Successors and Assigns

  	
  95

  
	
  SECTION 9.05.

  	
  Expenses; Indemnity

  	
  99

  
	
  SECTION 9.06.

  	
  Right of Setoff

  	
  100

  
	
  SECTION 9.07.

  	
  Applicable Law

  	
  100

  
	
  SECTION 9.08.

  	
  Waivers; Amendment

  	
  101

  
	
  SECTION 9.09.

  	
  Interest Rate Limitation

  	
  102

  
	
  SECTION 9.10.

  	
  Entire Agreement

  	
  102

  
	
  SECTION 9.11.

  	
  WAIVER OF JURY TRIAL

  	
  102

  
	
  SECTION 9.12.

  	
  Severability

  	
  102

  
	
  SECTION 9.13.

  	
  Counterparts

  	
  103

  
	
  SECTION 9.14.

  	
  Headings

  	
  103

  
	
  SECTION 9.15.

  	
  Jurisdiction; Consent
  to Service of Process

  	
  103

  
	
  SECTION 9.16.

  	
  Confidentiality

  	
  104

  
	
  SECTION 9.17.

  	
  Delivery of Lender
  Addenda

  	
  104

  
	
  SECTION 9.18.

  	
  Effect of Amendment and
  Restatement of the Existing Credit Agreement

  	
  104

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibits and Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Administrative
  Questionnaire

  	
   

  
	
  Exhibit B

  	
  Form of Affiliate
  Subordination Agreement

  	
   

  
	
  Exhibit C

  	
  Form of Assignment and
  Acceptance

  	
   

  
	
  Exhibit D

  	
  Form of Borrowing
  Request

  	
   

  
	
  Exhibit E

  	
  Form of Guarantee and
  Collateral Agreement

  	
   

  
	
  Exhibit F

  	
  Form of Lender Addendum

  	
   

  
	
  Exhibit G

  	
  Form of Mortgage (Owned
  Real Property)

  	
   

  
	
  Exhibit H

  	
  Form of Perfection
  Certificate

  	
   

  
	
  Exhibit I

  	
  Form of Revolving Note

  	
   

  
	
  Exhibit J

  	
  Form of Term Note

  	
   

  
					



 


iii

















 


	
  Exhibit K

  	
  Form of Exemption
  Certificate

  	
   

  
	
  Exhibit L

  	
  Form of Supplement

  	
   

  
	
   

  	
   

  
	
  Schedule 1.01(b)

  	
  Mortgaged Properties

  	
   

  
	
  Schedule 1.01(c)

  	
  Subsidiary Guarantors

  	
   

  
	
  Schedule 2.01

  	
  Commitments

  	
   

  
	
  Schedule 3.08

  	
  Subsidiaries

  	
   

  
	
  Schedule 3.18

  	
  Insurance

  	
   

  
	
  Schedule 3.19(a)

  	
  UCC Filing Offices

  	
   

  
	
  Schedule 3.19(c)

  	
  Mortgage Filing Offices

  	
   

  
	
  Schedule 3.20

  	
  Owned and Leased Real
  Property

  	
   

  
	
  Schedule 6.01

  	
  Existing Indebtedness

  	
   

  
	
  Schedule 6.02

  	
  Existing Liens

  	
   

  
	
  Schedule 6.04

  	
  Existing Investments

  	
   

  
				



 


iv

















 


AMENDED AND
RESTATED CREDIT AGREEMENT dated as of March 27, 2006, amending and
restating the Credit Agreement dated as of March 15, 2004, among TRUE
TEMPER CORPORATION, a Delaware corporation ( “Holdings”), TRUE TEMPER
SPORTS, INC., a Delaware corporation (the “Borrower”), the LENDERS
from time to time party hereto, CREDIT SUISSE (formerly known as Credit Suisse
First Boston), as administrative agent (in such capacity, the “Administrative
Agent”) and as collateral agent (in such capacity, the “Collateral Agent”),
CREDIT SUISSE (formerly known as Credit Suisse First Boston), as sole
bookrunner and sole lead arranger (in such capacity, the “Arranger”),
ANTARES CAPITAL CORPORATION, as syndication agent (in such capacity, the “Syndication
Agent”), and GOLDMAN SACHS CREDIT PARTNERS L.P. and MERRILL LYNCH CAPITAL,
a division of Merrill Lynch Business Financial Services Inc., as
co-documentation agents (each, in such capacity, a “Documentation Agent”).


 


The parties
hereto agree as follows:


 


ARTICLE I


 


Definitions 


 


SECTION 1.01.
Defined Terms. As used in this Agreement, the following terms shall have
the meanings specified below:


 


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


 


“Acquisition”
shall mean the acquisition by TTS Holdings pursuant to the Purchase Agreement
of all the Equity Interests in Holdings from the Sellers for an aggregate
amount of $342,000,000 in cash (the “Acquisition Consideration”).


 


“Acquisition
Consideration” shall have the meaning assigned to such term in the
definition of “Acquisition”.


 


“Acquisition
Documentation” shall mean shall mean, collectively, the Purchase Agreement
and all schedules, exhibits, annexes and amendments thereto and all side
letters and agreements affecting the terms thereof.


 


“Acquisition
Transactions” shall mean, collectively, (a) the Acquisition, including
the payment of the Acquisition Consideration, (b) the Equity Contribution,
(c) the obtaining by the Borrower of the Facility provided for by this
Agreement, (d) the issuance by the Borrower of the Subordinated Notes, (e) the
repayment by the Borrower of all amounts outstanding under the Existing Credit
Facility, (f) the redemption by the Borrower of all of its 10.875% Senior
Subordinated Notes due 2008 and (g) the payment of fees and expenses
incurred in connection with the foregoing, including a fee payable to the
Sponsor.


 


“Additional
Term Loan Commitment” shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Additional Term Loans hereunder as
set forth on Schedule 2.01, as the same may be reduced or
increased from time to time pursuant to


 

















 


assignment by or to such Lender pursuant to Section 9.04. The
aggregate amount of the Additional Term Loan Commitments is $18,000,000.


 


“Additional
Term Loan Commitment Termination Date” shall have the meaning set forth in Section 2.09(a).


 


“Additional
Term Loans” shall mean the Term Loans made by the Lenders to the Borrower
on the Funding Date.


 


“Adjusted
LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum equal to the product of (a) the
LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.


 


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


 


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


 


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


 


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


 


“Affiliate
Subordination Agreement” shall mean an Affiliate Subordination Agreement in
the form of Exhibit B pursuant to which intercompany
obligations and advances owed by any Loan Party are subordinated to the
Obligations.


 


“Affirmation
and Consent” means the Affirmation and Consent, dated as of the Amendment
Effective Date, executed and delivered by Holdings and each Subsidiary
Guarantor in form and substance satisfactory to the Administrative Agent.


 


“Agents”
shall have the meaning assigned to such term in Article VIII.


 


“Aggregate
Revolving Credit Exposure” shall mean the aggregate amount of the Lenders’
Revolving Credit Exposures.


 


“Agreement”
shall mean, on any date, the Existing Credit Agreement, as amended and restated
on the Amendment Effective Date and as the same may thereafter from time
to time be further amended, supplemented, amended and restated or otherwise
modified and in effect on such date.


 


2

















 


“Alternate
Base Rate” shall mean, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective date of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.


 


“Amendment
Agreement” shall mean the Amendment Agreement dated as of March 27,
2006, among Holdings, the Borrower and the Lenders party thereto.


 


“Amendment
Effective Date” means the date this Amended and Restated Credit Agreement
becomes effective pursuant to the Amendment Agreement.


 


“Amendment
Fee Letter” shall mean the Fee Letter dated as of March 20, 2006,
among the Borrower, Credit Suisse (formerly known as Credit Suisse First
Boston) and Credit Suisse Securities (USA) LLC.


 


“Applicable
Margin” shall mean, for any day, for each Type of Loan, the rate per annum
set forth under the relevant column heading below based upon the Leverage Ratio
as of the relevant date of determination:


 


	
  Leverage Ratio

  	
   

  	
  Eurodollar

  Term Loans

  	
   

  	
  ABR Term

  Loans

  	
   

  	
  Eurodollar Revolving Loans and
  Swingline Loans

  	
   

  	
  ABR Revolving Loans and

  Swingline Loans

  	
   

  
	
  Category 1

  Greater than 5.75 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
  Category 2

  Greater than 4.75 to 1.00

  but less than or equal to

  5.75 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
  Category 3

  Greater than 3.75 to 1.00

  but less than or equal to

  4.75 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  
	
  Category 4

  Less than or equal to 3.75

  to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  



 


; provided, that, notwithstanding the foregoing, each Applicable
Margin set forth above with respect to the Term Loans shall be increased by an
additional 0.50% per annum at all times during the period from and including
the Amendment Effective Date through and including the date of delivery to the
Administrative Agent of the financial statements required by Section 5.04(b),
with respect to the fiscal quarter ending October 1, 2006. Each change in
the Applicable Margin resulting from a change in the Leverage Ratio shall be
effective, with respect to all Loans, Commitments and Letters of Credit
outstanding, upon delivery to the Administrative Agent of the financial
statements and certificates required by Section 5.04(a) or (b) and


 


3

















 


Section 5.04(c), respectively, indicating
such change until the date immediately preceding the next date of delivery of
such financial statements and certificates indicating another such change. In
addition, at any time during which the Borrower has failed to deliver the
financial statements and certificates required by Section 5.04(a) or
(b) and Section 5.04(c), respectively, the Leverage Ratio
shall be deemed to be in Category 1 for purposes of determining the Applicable
Margin for so long as such failure to deliver such applicable financial
statements and certificates shall continue.


 


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


 


“Asset Sale”
shall mean the sale, lease, sale and leaseback, assignment (other than for
security purposes), conveyance, transfer, issuance or other disposition (by way
of merger, casualty, condemnation or otherwise) (any of the foregoing, a “Disposition”)
by Holdings, the Borrower or any of the Subsidiaries to any person other than
the Borrower or any Subsidiary Guarantor of (a) any Equity Interests of
any of the Subsidiaries (other than directors’ qualifying shares) or (b) any
other assets of Holdings, the Borrower or any of the Subsidiaries, including
Equity Interests of any person that is not a Subsidiary (other than (i) inventory,
obsolete or worn out assets, assets that are no longer useful, scrap and
Permitted Investments, in each case Disposed of in the ordinary course of
business, (ii) the sale or discount by the Borrower or any Subsidiary, in
each case without recourse and in the ordinary course of business, of overdue
accounts receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof consistent with customary
industry practice (and not as part of any bulk sale or financing
transaction), (iii) the Disposition by any Subsidiary that is not a Loan
Party of its assets that do not constitute Collateral in connection with a
foreclosure by the applicable lenders with respect to any Indebtedness of such
Subsidiary to the extent that such assets are collateral security for such
Indebtedness, (iv) the licensing of intellectual property in the ordinary
course of business, (v) the settlement, release or surrender of tort or
other litigation claims, (vi) Dispositions between Subsidiaries that are
not Subsidiary Guarantors, (vii) Permitted Acquisitions or other
Investments by the Borrower or any Subsidiary that are expressly permitted by Section 6.04
and that do not involve a Disposition of any assets of Holdings, the Borrower or
any of the Subsidiaries to any person other than the Borrower or any Subsidiary
Guarantor and (viii) Permitted Asset Swaps); provided
that any Disposition or series of related Dispositions described in clause (b) above
(but not excluded in clauses (i) through (viii) above)
having a value not in excess of $250,000 shall be deemed not to be an “Asset
Sale” for purposes of this Agreement.


 


“Assignment
and Acceptance” shall mean an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any person whose consent is
required by Section 9.04), and accepted by the Administrative
Agent, in the form of Exhibit C or such other form as
shall be approved by the Administrative Agent.


 


“Benefit
Plan” shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Tax Code or Section 307 of ERISA, and in respect of which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.


 


4

















 


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


 


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


 


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


 


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


 


“Breakage Event”
shall have the meaning assigned to such term in Section 2.16.


 


“Business
Day” shall mean any day other than a Saturday, Sunday or day on which
commercial banks in New York City are authorized or required by law to close; provided,
however, that when used in connection with a Eurodollar Loan (including
with respect to all notices and determinations in connection therewith and any
payments of principal, interest or other amounts thereon), the term “Business
Day” shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.


 


“Capital
Expenditures” shall mean, for any period, with respect to any person, (a) the
additions to property, plant and equipment and other capital expenditures of
such person and its consolidated subsidiaries that are (or should be) set forth
in a consolidated statement of cash flows of such person for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations
incurred by such person and its consolidated subsidiaries during such period,
but excluding in each case any such expenditure made (i) in accordance
with the terms of this Agreement to restore, replace or rebuild property to the
condition of such property immediately prior to any damage, loss, destruction
or condemnation of such property, to the extent such expenditure is made with
insurance proceeds, condemnation awards or damage recovery proceeds relating to
any such damage, loss, destruction or condemnation, (ii) with the proceeds
from the sale or other disposition or trade-in or exchange of assets to the
extent utilized to purchase functionally equivalent assets, (iii) with the
proceeds of a substantially contemporaneous equity contribution from Holdings
(other than any Cure Securities) and (iv) consisting of the Proposed
Domestic Acquisition.


 


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


 


“Change in
Control” shall mean (a) if at any time prior to a Qualified IPO, the
Permitted Holders shall fail to own directly or indirectly, beneficially and of
record, Equity Interests representing more than 50% of the aggregate ordinary
voting power and aggregate equity value represented by the issued and
outstanding Equity Interests in Holdings; (b) if after a Qualified


 


5

















 


IPO, any “person” or “group” (within the meaning of Rule 13d-5 of
the Securities Exchange Act of 1934 as in effect on the date hereof) other than
the Permitted Holders shall own directly or indirectly, beneficially or of
record, Equity Interests representing either (i) more than 30% of either
the aggregate ordinary voting power or the aggregate equity value represented
by the issued and outstanding Equity Interests in Holdings or (ii) a
greater percentage of either the aggregate ordinary voting power or the
aggregate equity value represented by the issued and outstanding Equity
Interests in Holdings then held, directly or indirectly, beneficially and of
record, by the Permitted Holders; (c) if a majority of the seats (other
than vacant seats) on the board of directors of Holdings shall at any time be
occupied by persons who are not Continuing Directors; (d) if Holdings
shall at any time fail to own directly or indirectly, beneficially and of
record, 100% of each class of issued and outstanding Equity Interests in
the Borrower free and clear of all Liens (other than Liens expressly permitted
by clauses (b) and (d) of Section 6.02); or (e) if any change of control (or similar event,
however denominated) shall occur under the Subordinated Note Documents.


 


“Change in
Law” shall mean (a) the adoption of any law, rule or regulation
after the Closing Date, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance
by any Lender or the Issuing Bank (or, for purposes of Section 2.14,
by any lending office of such Lender or by such Lender’s or Issuing Bank’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the Closing Date.


 


“Charges”
shall have the meaning assigned to such term in Section 9.09.


 


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


 


“Closing
Date” shall mean March 15, 2004.


 


“Collateral”
shall mean all property and assets of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Document.


 


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


 


“Commitment”
shall mean, with respect to any Lender, such Lender’s Revolving Credit
Commitment, Term Loan Commitment and Swingline Commitment.


 


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


 


“Commitment
Fee Rate” shall mean a rate per annum equal to 1⁄2 of 1%.


 


“Commitment
Letter” shall mean the Commitment Letter dated as of January 30, 2004,
among TTS Holdings and Credit Suisse (formerly known as Credit Suisse First
Boston).


 


6

















 


“Consolidated
EBITDA” shall mean, for any period, Consolidated Net Income for such period
plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income, the sum of (i) Consolidated Interest Expense
for such period, (ii) consolidated income tax expense for such period, (iii) all
amounts attributable to depreciation and amortization for such period,
including any increased expense or depreciation or amortization resulting from
purchase accounting adjustments or the write-up of inventory in connection with
acquisitions and amortization or write-off of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness, (iv) any noncash charges (other than the write-down of
accounts receivable or inventory held for sale (other than in connection with
the Acquisition or other Permitted Acquisitions consummated after the Closing
Date)) for such period, (v) any restructuring costs for such period that
are incurred in connection with the Acquisition or other Permitted Acquisitions
consummated after the Closing Date, (vi) any non-recurring or
extraordinary fees, charges or other expenses for such period, (vii) bonus and retention payments, including
earn-outs, stock appreciation rights, non-compete payments, phantom stock plans
and similar payments, made or incurred in connection with the Acquisition or
other Permitted Acquisitions consummated after the Closing Date and the
financing thereof, (viii) management fees paid during such period, (ix) start-up
and related costs associated with the Chinese operations not to exceed the
lesser of $1,000,000 and the actual amount of such start-up and related costs
in the fiscal years ending December 31, 2004 and December 31, 2005 (provided
that to the extent that all or any portion of the income of any person is
excluded from Consolidated Net Income pursuant to the definition thereof for
all or any portion of such period any amounts set forth in the preceding clauses (i) through
(ix) that are attributable to such person shall not be included for
purposes of this definition for such period or portion thereof), (x) if and
when incurred, the amount of integration costs (not to exceed $3,000,000 in the
aggregate) associated with the Proposed Domestic Acquisition incurred 12 months
prior to or after the closing of that acquisition, (xi) for fiscal years 2006,
2007 and 2008, the amount of start-up and transition costs (not to exceed
$1,500,000 in any single fiscal year or $3,000,000 in the aggregate for all
such fiscal years) associated with the Borrower’s establishment and expansion
of its foreign operations with respect to the Foreign Target, (xii) for fiscal
years 2006, 2007 and 2008, the amount of transition and shut-down costs
(including closure (in whole or in part) of facilities, relocation of assets,
severance costs and related amounts) associated with the Borrower’s
establishment and expansion of its foreign operations with respect to the
Foreign Target, not to exceed $1,500,000 in any single fiscal year or
$3,000,000 in the aggregate for all such fiscal years and (xiii) for purposes
of determining compliance with the financial covenants in Sections 6.11,
6.12 and 6.13, the Cure Amount received by the Borrower for such
period and permitted to be included in Consolidated EBITDA pursuant to (and
subject to the provisions in) Section 7.01, and minus (b) without
duplication, to the extent included in the statement of such Consolidated Net
Income for such period, (i) all cash payments made during such period on
account of reserves, restructuring charges and other non-cash charges added to
Consolidated Net Income pursuant to clause (a)(iv) above in a
previous period and (ii) all non-cash items of income for such period, all
determined on a consolidated basis in accordance with GAAP; provided
that for purposes of calculating Consolidated EBITDA (other than for purposes
of the determination of Excess Cash Flow) for any period (A) the
Consolidated EBITDA of any Acquired Entity acquired by the Borrower or any
Subsidiary pursuant to a Permitted Acquisition during such period shall be
included on a pro  forma basis for such period (assuming the
consummation of such acquisition and the incurrence or assumption


 


7

















 


of any Indebtedness in connection therewith occurred as of the first
day of such period) and (B) the Consolidated EBITDA of any person or line
of business Disposed of by the Borrower or any Subsidiary during such period
for shall be excluded for such period (assuming the consummation of such sale
or other disposition and the repayment of any Indebtedness in connection
therewith occurred as of the first day of such period).


 


“Consolidated
Fixed Charges” shall mean, for any period, without duplication, the sum of (a) Consolidated Interest Expense for such period,
plus (b) the aggregate amount of scheduled principal payments (whether or
not made) during such period in respect of long term Indebtedness (including
Capital Lease Obligations and Synthetic Lease Obligations) of the Borrower and
the Subsidiaries (other than (i) payments made by the Borrower or any
Subsidiary to the Borrower or a Subsidiary and (ii) amounts payable in
respect of repayment or prepayment of principal of Indebtedness (not to exceed
$5,000,000) incurred by the Foreign Target from a lender that is organized or
doing business in the jurisdiction in which the Foreign Target is located or a
province thereof), plus (c) Capital Expenditures for such period (other
than Foreign Target Capital Expenditures and Capital Expenditures in connection
with restructuring and start-up costs relating to the Proposed Domestic
Acquisition, the Proposed Foreign Acquisition and other Permitted Acquisitions
consummated after the Closing Date), plus (d) the aggregate amount of
income taxes paid in cash by the Borrower and the Subsidiaries during such
period.


 


“Consolidated
Interest Expense” shall mean, for any period, the cash interest expense
(including imputed interest expense in respect of Capital Lease Obligations and
Synthetic Lease Obligations) of the Borrower and the Subsidiaries for such
period (including all commissions, discounts and other fees and charges owed by
the Borrower and the Subsidiaries with respect to letters of credit and bankers’
acceptance financing), net of interest income, in each case determined on a
consolidated basis in accordance with GAAP. For purposes of the foregoing,
interest expense shall be determined after giving effect to any net payments
made or received by the Borrower or any Subsidiary with respect to interest
rate Hedging Agreements (excluding (i) cash costs paid to unwind a Hedging
Agreement existing on the Closing Date and (ii) interest expense
attributable to up to $5,000,000 of outstanding Indebtedness incurred by the
Foreign Target from a lender that is organized or doing business in a
jurisdiction in which the Foreign Target is located or a province thereof).


 


“Consolidated
Net Income” shall mean, for any period, the net income or loss of the
Borrower and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions (including a distribution in respect of
intercompany Indebtedness) by such Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, statute, rule or governmental regulation
applicable to such Subsidiary, (b) the income or loss of any person
accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower or any Subsidiary or the date that such person’s
assets are acquired by the Borrower or any Subsidiary, (c) the income of
any person (other than a Subsidiary) in which any other person (other than the
Borrower or a Subsidiary or any director holding qualifying shares in
accordance with applicable law) has an interest, except to the extent of the
amount of dividends or other distributions actually paid to the Borrower or a
Subsidiary by such person during such period, and (d) any extraordinary
gains or losses.


 


8

















 


“Continuing
Directors” shall mean, at any time of determination, any member of the
board of directors of Holdings who (a) was a member of such board of
directors on the Amendment Effective Date, (b) was nominated for election
or elected to such board of directors with the approval of a majority of the
Continuing Directors who were members of such board of directors at the time of
such nomination or election, (c) prior to the consummation of a Qualified
IPO, was nominated by the Sponsors pursuant to the Stockholders Agreement or (d) following
the consummation of a Qualified IPO, was nominated for election or elected to
such board of directors by the Sponsors at such time when the Permitted Holders
are the beneficial owners, directly or indirectly, of Equity Interests
representing more than 50% of the aggregate ordinary voting power represented
by the issued and outstanding Equity Interests in Holdings.


 


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


 


“Credit
Event” shall have the meaning assigned to such term in Section 4.01.


 


“Cure
Amount” shall have the meaning assigned to such term in Section 7.01.


 


“Cure Right”
shall have the meaning assigned to such term in Section 7.01.


 


“Cure
Securities” shall mean equity securities of Holdings (the net proceeds of
which are contributed to the common equity of the Borrower) having no mandatory
redemption, repurchase, repayment or similar requirements prior to the date
which occurs six months after the later of the Revolving Credit Maturity Date,
the Term Loan Maturity Date or the Incremental Term Loan Maturity Date, and
upon which all dividends or distributions shall be payable in additional shares
of such security only, and which are not convertible or exchangeable into any
other instrument (other than common equity of Holdings) and are not guaranteed
or secured.


 


“Current
Assets” shall mean, at any time, the consolidated current assets (other
than cash and Permitted Investments) of the Borrower and the Subsidiaries.


 


“Current
Liabilities” shall mean, at any time, the consolidated current liabilities
of the Borrower and the Subsidiaries at such time, but excluding, without
duplication, (a) the current portion of any long-term Indebtedness and (b) outstanding
Revolving Loans and Swingline Loans.


 


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


 


“Defaulting
Lender” shall mean any Revolving Lender that has either (a) defaulted
in its obligation to make a Revolving Loan or to fund its participation in a
Letter of Credit or Swingline Loan required to be made or funded by it
hereunder, (b) notified the Administrative Agent or the Borrower in
writing that it does not intend to satisfy any such obligation described in clause
(a) or (c) become insolvent or been taken over by any regulatory
authority or agency.


 


9

















 


“Disposition”
shall have the meaning assigned to such term in the definition of “Asset Sale”
and the term “Dispose” shall have a correlative meaning.


 


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


 


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


 


“Domestic
Subsidiaries” shall mean all Subsidiaries incorporated, formed or organized
under the laws of the United States of America, any State thereof or the
District of Columbia.


 


“Environmental
Laws” shall mean all former, current and future Federal, state, local and
foreign laws (including common law), treaties, regulations, rules, ordinances,
codes, decrees, judgments, directives, orders (including consent orders), and
agreements in each case, relating to protection of the environment, natural
resources, human health and safety or the presence, Release of, threatened
Release, or exposure to, Hazardous Materials, or the generation, manufacture,
processing, distribution, use, treatment, storage, transport, recycling or
handling of, or the arrangement for such activities with respect to, Hazardous
Materials.


 


“Environmental
Liability” shall mean all liabilities, obligations, damages, losses,
claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and
costs (including administrative oversight costs, natural resource damages and
remediation costs), whether contingent or otherwise, arising out of or relating
to (a) compliance or non-compliance with any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
Release or threatened Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.


 


“Environmental
Permit” shall mean any Permit under Environmental Law.


 


“Equity
Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any person, or any obligations convertible
into or exchangeable for, or giving any person a right, option or warrant to
acquire, such equity interests or such convertible or exchangeable obligations.


 


“Equity
Issuance” shall mean any issuance or sale by Holdings or the Borrower of
any Equity Interests of Holdings or the Borrower, as applicable, or the receipt
by Holdings or the Borrower of any capital contribution, as applicable, except
in each case for (a) in the case of the Borrower, any issuance or sale to,
or any receipt of any capital contribution from, Holdings, (b) any
issuance of directors’ qualifying shares, (c) sales or issuances of common
stock of Holdings to management or employees of Holdings, the Borrower or any
Subsidiary under any employee stock option or stock purchase plan or employee
benefit plan in existence from time to time in the ordinary course of business,
(d) any issuance or sale by, or capital contribution in, Holdings or the
Borrower in a transaction not constituting a public offering so long as the Net
Cash Proceeds thereof are (i) on or before the date of receipt thereof,
designated by Holdings or the Borrower, as the case may be, pursuant to a
notice to the Administrative Agent (specifying the amount and designated use
thereof) for use to fund a Permitted Acquisition in accordance


 


10

















 


with the terms hereof and (ii) within 30 days of the receipt
thereof, applied to fund such Permitted Acquisition in accordance with the
terms hereof; provided that in the case of any failure to satisfy the
requirement in clause (ii) such Net Cash Proceeds shall be deemed
to have been received for purposes of Section 2.13 when the 30-day
period referred to therein expires and (e) Cure Securities.


 


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


 


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


 


“ERISA
Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Benefit Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Benefit Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Tax Code or Section 302
of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of
the Tax Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Benefit Plan; (d) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Benefit Plan or
the withdrawal or partial withdrawal of the Borrower or any of its ERISA
Affiliates from any Benefit Plan or Multiemployer Plan; (e) the receipt by
the Borrower or any of its ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Benefit
Plan or Plans or to appoint a trustee to administer any Benefit Plan; (f) the
adoption of any amendment to a Benefit Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Tax Code or Section 307
of ERISA; (g) the receipt by the Borrower or any of its ERISA Affiliates
of any notice, or the receipt by any Multiemployer Plan from the Borrower or
any of its ERISA Affiliates of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA; (h) the occurrence of a “prohibited transaction” with respect to
which the Borrower or any of the Subsidiaries is a “disqualified person”
(within the meaning of Section 4975 of the Tax Code) or with respect to
which the Borrower or any such Subsidiary could otherwise be liable; or (i) any
other event or condition with respect to a Benefit Plan or Multiemployer Plan
that could result in liability of the Borrower or any Subsidiary.


 


“Eurodollar”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate.


 


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


 


“Excess
Cash Flow” shall mean, for any fiscal year of the Borrower, the excess of (a) the
sum, without duplication, of (i) Consolidated EBITDA for such fiscal year
(calculated without giving effect to the last proviso set forth in the
definition of Consolidated EBITDA) and (ii) the


 


11

















 


decrease, if any, in Current Assets minus Current Liabilities (other
than for the Foreign Target) from the beginning to the end of such fiscal year
over (b) the sum, without duplication, of (i) the amount of any Taxes
payable in cash by Holdings and the Subsidiaries with respect to such fiscal
year, (ii) Consolidated Interest Expense (including for Indebtedness
incurred in connection with the Proposed Domestic Acquisition and the Proposed
Foreign Acquisition) for such fiscal year payable in cash, (iii) the
aggregate amount paid in cash in respect of Capital Expenditures (including in
connection with the Proposed Domestic Acquisition and for the Proposed Foreign
Acquisition) and Permitted Acquisitions in accordance with Sections 6.10
and 6.04, respectively, during such fiscal year (and including in such
fiscal year, in the case of Capital Expenditures with respect to which the
obligation to make payment has accrued in the last fiscal quarter of such
fiscal year but such obligation is not payable in cash until the immediately
following fiscal quarter, the amount to be paid in cash in such following
fiscal quarter; provided that such amount, when paid in such following
fiscal quarter, shall not be included in this clause (iii)), in
each case, except to the extent financed with the proceeds of Indebtedness,
equity issuances, casualty proceeds, condemnation proceeds or other proceeds
that would not be included in Consolidated EBITDA, (iv) permanent
repayments of Indebtedness (other than mandatory prepayments of Loans under Section 2.13)
made by the Borrower and the Subsidiaries during such fiscal year, but only to
the extent that such prepayments by their terms cannot be reborrowed or redrawn
and do not occur in connection with a refinancing of all or any portion of such
Indebtedness, (v) the amount paid in cash by Holdings, the Borrower and
the Subsidiaries during such fiscal year as a purchase price adjustment in
connection with the Acquisition pursuant to the terms of the Purchase Agreement
(as existing on the Closing Date), (vi) the amount paid in cash by
Holdings and the Subsidiaries during such fiscal year as a purchase price
adjustment pursuant to the Purchase Agreement, (vii) the increase, if any,
in Current Assets minus Current Liabilities (in each case, other than for the
Foreign Target) from the beginning to the end of such fiscal year and (viii) the
aggregate amount of Investments made by the Borrower and Subsidiaries in the
Foreign Target.


 


“Excluded
Foreign Subsidiaries” shall mean, at any time, any Foreign Subsidiary that
is (or is treated as) for United States federal income tax purposes either (a) a
corporation or (b) a pass-through entity owned directly or indirectly by
another Foreign Subsidiary that is (or is treated as) a corporation.


 


“Excluded
Taxes” shall mean, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income as a result of a
present or former connection between such recipient and the jurisdiction
imposing such tax (or any political subdivision thereof), other than any such
connection arising solely from such recipient having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document and (b) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under Section 2.21(a)),
any withholding tax that is imposed on amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure to comply with Section 2.20(d), except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to Section 2.20(a).


 


12

















 


“Exempted
Assets Sales” means a Disposition of assets (whether real or personal, and
whether tangible or intangible), within nine months (unless otherwise extended
for no more than three months by the Administrative Agent in its sole
discretion) following their acquisition by the Borrower or a Subsidiary in the
Proposed Domestic Acquisition or the acquisition of the assets of, or Equity
Interests of (resulting in a Subsidiary), a person in connection with the
Proposed Foreign Acquisition (but in each case only as to assets actually
acquired in the Proposed Domestic Acquisition or such an acquisition in
connection with the Proposed Foreign Acquisition).


 


“Existing
Credit Agreement” means the Credit Agreement, dated as of March 15,
2004, among Holdings, the Borrower, the Lenders, the Administrative Agent, the
Collateral Agent, the Arranger, the Syndication Agent and the Documentation
Agent as amended or modified and in effect immediately prior to the Amendment
Effective Date.


 


“Facility”
shall mean each of (a) the Term Loan Commitments and the Term Loans made
thereunder (the “Term Loan Facility”), and (b) the Revolving Credit
Commitments and the extensions of credit made thereunder (the “Revolving
Credit Facility”).


 


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


 


“Fee
Letters” shall mean, collectively, the Initial Fee Letter and the Amendment
Fee Letter.


 


“Fee
Trigger Date” shall mean the day that is 61 days following the Amendment
Effective Date


 


“Fees” shall
mean the Commitment Fees, the Administrative Agent Fees, the L/C Participation
Fees and the Issuing Bank Fees.


 


“Financial
Officer” of any person shall mean the chief financial officer, principal
accounting officer, treasurer or controller of such person.


 


“Fixed
Charge Coverage Ratio” shall mean, on the last day of any fiscal quarter,
the ratio of (a) Consolidated EBITDA for the period of four consecutive
fiscal quarters most recently ended on and prior to such date, taken as one
accounting period, to (b) Consolidated Fixed Charges for the period of
four consecutive fiscal quarters most recently ended on and prior to such date,
taken as one accounting period.


 


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


 


13

















 


“Foreign
Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.


 


“Foreign
Target” means, collectively, any direct or indirect Subsidiaries of the
Borrower that are organized or existing under the laws of a foreign
jurisdiction previously identified in writing to the Administrative Agent or a
province thereof or a majority of the value (as determined in good faith by the
Borrower) of whose properties or assets are located in such jurisdiction or a
province thereof.


 


“Foreign
Target Capital Expenditures” shall mean, for any period, (a) expenditures
made with respect to the Foreign Target outside of the ordinary course of
business (including the acquisition of the Equity Interests (resulting in a
Subsidiary) of, all or substantially all of the assets of, a line of business
of, or a business unit or division of, any person in connection with the
Proposed Foreign Acquisition, and the acquisition of any other fixed or capital
assets acquired outside of the ordinary course of business from any person in
connection with the Proposed Foreign Acquisition) and (b) expenditures
made in the ordinary course of business to restore, replace or rebuild property
of the Foreign Target to the condition of such property immediately prior to
any damage, loss, destruction or condemnation of such property.


 


“Funded
Debt” shall mean as of the last day of any fiscal quarter, Total Debt at
such time less the amount of cash and Permitted Investments of the Borrower and
the Subsidiary Guarantors at such time in an aggregate amount not to exceed
$7,500,000.


 


“Funding
Date” shall mean the date on which the Borrowing of Term Loans (other than
Incremental Term Loans) is made following the Amendment Effective Date.


 


“GAAP”
shall mean generally accepted accounting principles in the United States.


 


“Governmental
Authority” shall mean the government of the United States of America or any
other nation, any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.


 


“Granting
Lender” shall have the meaning assigned to such term in Section 9.04(i).


 


“Guarantee”
of or by any person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of (a) the guarantor or (b) another person
(including any bank under a letter of credit) to induce the creation of which
the guarantor has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation, contingent or otherwise, of the guarantor, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment of such Indebtedness or other obligation, (iii) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay


 


14

















 


such Indebtedness or other obligation, (iv) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation or (v) to otherwise assure or hold harmless the
owner of such Indebtedness or other obligation against loss in respect thereof;
provided, however, that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business.


 


“Guarantee
and Collateral Agreement” shall mean the Guarantee and Collateral Agreement
in the form of Exhibit E, to be executed and delivered by
Holdings, the Borrower and each Subsidiary Guarantor.


 


“Guarantors”
shall mean Holdings and the Subsidiary Guarantors.


 


“Hazardous
Materials” shall mean any petroleum (including crude oil or fraction
thereof) or petroleum products or byproducts, or any pollutant, contaminant,
chemical, compound, constituent, or hazardous, toxic or other substances,
materials or wastes defined, or regulated as such by, or pursuant to, any
Environmental Law, or requires removal, remediation or reporting under any
Environmental Law, including asbestos, or asbestos containing material, radon
or other radioactive material, polychlorinated biphenyls and urea formaldehyde
insulation.


 


“Hedging
Agreement” shall mean any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, fuel or other
commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions; provided,
however, that no phantom stock or similar plan providing for payments
and on account of services provided by current or former directors, officers,
employees or consultants of Holdings, the Borrower or any Subsidiary shall be a
Hedging Agreement.


 


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


 


“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money, (b) all obligations of such person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of
such person under conditional sale or other title retention agreements relating
to property or assets acquired by such person, (d) all obligations of such
person in respect of the deferred purchase price of property or services (other
than current trade accounts payable incurred in the ordinary course of
business), (e) all obligations of such person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Equity Interests in
such person, (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such person, whether
or not the Indebtedness secured thereby has been assumed, (g) all
Guarantees by such person of Indebtedness of others, (h) all Capital Lease
Obligations or Synthetic Lease Obligations of such person, (i) all
obligations, contingent or otherwise, of such person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such person in respect of bankers’ acceptances. The
Indebtedness of any person shall include the Indebtedness of any other person
(including any partnership in which such person is a general partner) to the
extent such person is liable therefor as a result of such person’s ownership
interest


 


15

















 


in, or other relationship with, such other person, except to the extent
the terms of such Indebtedness provide (including by a non-recourse nature)
that such person is not liable therefor.


 


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


 


“Indemnitee”
shall have the meaning assigned to such term in Section 9.05(b).


 


“Information”
shall have the meaning assigned to such term in Section 9.16.


 


“Incremental Debt Amount” shall mean, at any
time, the amount (if any) equal to (a) $15,000,000 less (b) an amount
equal to the aggregate amount of all Incremental Term Loan Commitments
established prior to such time pursuant to Section 2.24.


 


“Incremental Term Lender” shall mean a Lender
with an Incremental Term Loan Commitment or an outstanding Incremental Term
Loan.


 


“Incremental Term Loan” shall mean an
incremental term loan made by an Incremental Term Lender to the Borrower
pursuant to clause (b) of Section 2.01. Incremental Term Loans
may be made in the form of additional Term Loans or, to the extent
provided for in the relevant Incremental Term Loan Assumption Agreement and
permitted by Section 2.24, Other Term Loans.


 


“Incremental Term Loan Assumption Agreement”
shall mean an Incremental Term Loan Assumption Agreement in form and
substance reasonably satisfactory to the Administrative Agent, among the
Borrower, the Administrative Agent and one or more Incremental Term Lenders.


 


“Incremental Term Loan Commitment” shall mean,
with respect to each Lender, the commitment, if any, of such Lender to make
Incremental Term Loans hereunder as set forth on the Incremental Term Loan
Assumption Agreement delivered by such Lender or as set forth on Schedule 2.01,
or in the Assignment and Acceptance pursuant to which such Lender assumed its
Incremental Term Loan Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignment by or to such Lender
pursuant to Section 9.04.


 


“Incremental
Term Loan Maturity Date” shall mean the final maturity date of any
Incremental Term Loan, as set forth in the applicable Incremental Term Loan
Assumption Agreement, subject to the limitations thereon set forth in Section 2.24.


 


“Incremental
Term Loan Repayment Dates” shall mean the dates scheduled for the repayment
of principal of any Incremental Term Loan, as set forth in the applicable
Incremental Term Loan Assumption Agreement.


 


“Initial
Fee Letter” shall mean the Fee Letter dated as of January 30, 2004,
among TTS Holdings and Credit Suisse (formerly known as Credit Suisse First
Boston).


 


“Intellectual
Property Collateral” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.


 


16

















 


“Intellectual
Property Security Agreement” shall mean all Intellectual Property Security
Agreements to be executed and delivered by the Loan Parties, each substantially
in the applicable form required by the Guarantee and Collateral Agreement.


 


“Interest
Coverage Ratio” shall mean, on the last day of any fiscal quarter, the
ratio of (a) Consolidated EBITDA for the period
of four consecutive fiscal quarters most recently ended on and prior to such
date, taken as one accounting period, to (b) Consolidated Interest Expense
for the period of four consecutive fiscal quarters ended on and prior to such
date, taken as one accounting period.


 


“Interest
Payment Date” shall mean (a) with respect to any ABR Loan, the last
Business Day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months’ duration been applicable to such Borrowing.


 


“Interest
Period” shall mean, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is 1, 2, 3 or 6 months thereafter
(or 9 or 12 months thereafter if, at the time of the relevant Borrowing, an
interest period of such duration is available to all Lenders participating
therein), as the Borrower may elect; provided, however, that
(a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. Interest shall
accrue from and including the first day of an Interest Period to but excluding
the last day of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.


 


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


 


“Issuing
Bank” shall mean, as the context may require, (a) Credit Suisse
(formerly known as Credit Suisse First Boston), in its capacity as the issuer
of Letters of Credit hereunder, and (b) any other Lender that may become
an Issuing Bank pursuant to Section 2.23(i) or 2.23(k),
with respect to Letters of Credit issued by such Lender. The Issuing Bank may,
in its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.


 


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


 


“Jineng”
shall mean Jineng Composite Materials and Products (Guangzhou) Company Ltd., a
Subsidiary organized under the laws of China.


 


17

















 


“L/C
Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.23.


 


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


 


“L/C
Exposure” shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all Letters of Credit at such time and (b) the aggregate
amount of all L/C Disbursements that have not been reimbursed at such time. The
L/C Exposure of any Revolving Credit Lender at any time shall equal its Pro
Rata Percentage of the aggregate L/C Exposure at such time.


 


“L/C Fee
Payment Date” shall have the meaning assigned to such term in Section 2.05(c).


 


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


 


“Lender
Addendum” shall mean, with respect to any initial Lender, a Lender Addendum
in the form of Exhibit F, or such other form as may be
supplied by the Administrative Agent, to be executed and delivered by such Lender
on the Closing Date.


 


“Lenders”
shall mean (a) the persons that deliver a Lender Addendum (other than any
such person that has ceased to be a party hereto pursuant to an Assignment and
Acceptance), (b) any person that has become a
party hereto pursuant to an Assignment and Acceptance and (c) any person
that has become a party hereto pursuant to an Incremental Term Loan Assumption
Agreement. Unless the context otherwise requires, the term “Lenders” shall
include the Swingline Lender.


 


“Letter of
Credit” shall mean any letter of credit issued pursuant to Section 2.23.


 


“Leverage
Ratio” shall mean, on the last day of any fiscal quarter, the ratio of (a) Funded
Debt on such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended on and prior to such date,
taken as one accounting period.


 


“LIBO Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
the rate per annum determined by the Administrative Agent at approximately
11:00 a.m., London time, on the date that is two Business Days prior to
the commencement of such Interest Period by reference to the British Bankers’
Association Interest Settlement Rates for deposits in dollars (as set forth by
the Bloomberg Information Service or any successor thereto or any other service
selected by the Administrative Agent which has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the “LIBO Rate” shall be the interest
rate per annum determined by the Administrative Agent to be the average of the
rates per annum at which deposits in dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London,
England by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period.


 


18

















 


“Lien”
shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien (statutory or otherwise), pledge, hypothecation, encumbrance, collateral
assignment, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such asset and (c) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.


 


“Loan
Documents” shall mean this Agreement, the Supplement and the Security
Documents.


 


“Loan
Parties” shall mean Holdings, the Borrower and each Subsidiary (other than
a Foreign Subsidiary) that is or becomes a party to a Loan Document.


 


“Loans”
shall mean the Revolving Loans, the Term Loans and the Swingline Loans.


 


“Majority
Facility Lenders” shall mean, with respect to any Facility, the holders
(other than Defaulting Lenders) of a majority of the aggregate unpaid principal
amount of the Term Loans or the Aggregate Revolving Credit Exposure, as the
case may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to the termination of the Revolving Credit
Commitments, the holders of a majority of the Total Revolving Credit
Commitment).


 


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


 


“Material
Adverse Effect” shall mean a material adverse condition or material adverse
change in or materially affecting (a) the business, assets, liabilities,
operations or condition (financial or otherwise) of Holdings, the Borrower and
the Subsidiaries, taken as a whole, or (b) the
validity or enforceability of any of the Loan Documents or the material rights
and remedies of the Arranger, the Administrative Agent, the Collateral Agent or
the Secured Parties thereunder.


 


“Material
Indebtedness” shall mean Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Hedging Agreements, of any
one or more of Holdings, the Borrower and the Subsidiaries in an aggregate
principal amount exceeding $5,000,000. For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of Holdings, the
Borrower or any Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that Holdings, the Borrower for such Subsidiary would be required to pay if
such Hedging Agreement were terminated at such time.


 


“Maximum
Rate” shall have the meaning assigned to such term in Section 9.09.


 


“Moody’s”
shall mean Moody’s Investors Service, Inc.


 


“Mortgaged
Properties” shall mean, initially, each parcel of real property and the
improvements thereto owned or leased by a Loan Party and specified on Schedule 1.01(b),
and shall include each other parcel of real property and improvements thereto
with respect to which a Mortgage is granted pursuant to Section 5.09
or 5.10.


 


19

















 


“Mortgages”
shall mean the fee or leasehold mortgages or deeds of trust, assignments of
leases and rents and other security documents granting a Lien on any Mortgaged
Property to secure the Obligations, if such Mortgaged Property is owned, in the
form of Exhibit G or, if such Mortgaged Property is leased, in
form reasonably satisfactory to the Collateral Agent, as the case may be,
with such changes as shall be advisable under the law of the jurisdiction in
which such Mortgage is to be recorded and as are reasonably satisfactory to the
Collateral Agent, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.


 


“Multiemployer
Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of
ERISA to which the Borrower or any ERISA Affiliate may have any liability.


 


“Net Cash
Proceeds” shall mean (a) with respect to any Asset Sale or Recovery
Event, the proceeds thereof in the form of cash and Permitted Investments
(including any such proceeds subsequently received (as and when received) in
respect of noncash consideration initially received), net of (i) selling
expenses (including reasonable and customary broker’s or investment banker’s
fees or commissions, legal fees, transfer and similar taxes incurred by the
Borrower and the Subsidiaries in connection therewith and the Borrower’s good
faith estimate of income taxes paid or payable in connection with such sale,
after taking into account any available tax credits or deductions and any tax
sharing arrangements), (ii) amounts provided as a reserve, in accordance
with GAAP, against any liabilities under any indemnification obligations or
purchase price adjustment associated with such Asset Sale (provided
that, to the extent and at the time any such amounts are released from such
reserve, such amounts shall constitute Net Cash Proceeds) and (iii) the
principal amount, premium or penalty, if any, interest and other amounts on any
Indebtedness for borrowed money which is secured by the asset sold in such
Asset Sale and which is required to be repaid with such proceeds (other than
any such Indebtedness assumed by the purchaser of such asset); provided,
however, that, if (x) the Borrower shall deliver a certificate of a
Financial Officer of the Borrower to the Administrative Agent within three
Business Days of the time of receipt thereof setting forth the Borrower’s
intent to reinvest such proceeds in assets of a kind then used or usable in the
business of the Borrower and the Subsidiaries within 365 days of receipt of
such proceeds and (y) no Event of Default shall have occurred and be continuing
at the time of such certificate, such proceeds shall not constitute Net Cash
Proceeds except to the extent not so used at the end of such 365-day period, at
which time such proceeds shall be deemed to be Net Cash Proceeds; provided
further, however, that, if (A) such proceeds shall result
from an Asset Sale or Recovery Event to the extent involving assets, rights or
other property of a Subsidiary that is not a Loan Party, (B) the terms of
any Indebtedness of such Subsidiary require that such proceeds be applied to
repay such Indebtedness, (C) the Borrower shall deliver a certificate of a
Financial Officer to the Administrative Agent within three Business Days of the
time of receipt thereof setting forth the Borrower’s intent to use such
proceeds to repay such Indebtedness of such Subsidiary to the extent required
thereby and, if such Indebtedness is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto, within 365 days of
receipt of such proceeds and (D) no Event of Default shall have occurred
and be continuing at the time of such certificate, such proceeds shall not
constitute Net Cash Proceeds except to the extent not so used at the end of
such 365-day period, at which time such proceeds shall be deemed to be Net Cash
Proceeds; and (b) with respect to any issuance or disposition of
Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all
taxes and reasonable and customary fees (including


 


20

















 


legal fees), commissions, underwriting discounts, costs and other
expenses incurred by the Borrower and the Subsidiaries in connection therewith.


 


“Obligations”
shall mean all obligations defined as “Obligations” in the Guarantee and
Collateral Agreement and the other Security Documents.


 


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


 


“Other Term
Loans” shall have the meaning assigned to such term in Section 2.24(a).


 


“PBGC”
shall mean the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.


 


“Perfection
Certificate” shall mean the Pre-Closing UCC Diligence Certificate
substantially in the form of Exhibit H or any other form approved
by the Collateral Agent.


 


“Permits”
shall mean any and all material franchises, licenses, leases, permits,
approvals, notifications, certifications, registrations, authorizations,
exemptions, qualifications, easements, rights of way, Liens and other rights,
privileges and approvals required under any Requirement of Law.


 


“Permitted
Acquisition” shall mean (a) the Proposed Domestic Acquisition and the
acquisition of the assets of, or Equity Interests of (resulting in a
Subsidiary), a person in connection with the Proposed Foreign Acquisition and (b) any
other acquisition by the Borrower or any Subsidiary of all or substantially all
the assets of a person or line of business of such person, or all of the Equity
Interests of a person (referred to herein as the “Acquired Entity”); provided
that (i) the Acquired Entity shall be a going concern and shall be in a
Permitted Business; (ii) at the time of such transaction (A) both
before and after giving effect thereto, no Event of Default or Default shall
have occurred and be continuing; (B) the Borrower would be in compliance
with the covenants set forth in Sections 6.11 and 6.13 and if the
aggregate consideration paid in connection with such acquisition and any
related acquisition (including any Indebtedness of the Acquired Entity that is
assumed by the Borrower or any Subsidiary following such acquisition) is (x) $5,000,000 or more, then the Leverage Ratio would be
at least 0.25 to 1.0 less than the maximum Leverage Ratio permitted under Section 6.12
at such time or (y) less than $5,000,000, then the Borrower would be in
compliance with the covenant set forth in Section 6.12, in each
case described in this clause (B) as of the most recently completed
period ending prior to such transaction for which the financial statements and
certificates required by Section 5.04(a) or 5.04(b) were
required to be delivered or for which comparable financial statements have been
filed with or furnished to the Securities and Exchange Commission, after giving
pro  forma effect to such transaction and to any other event
occurring after such period as to which pro  forma recalculation
is appropriate (including any other transaction described in this definition
occurring after such period) as if such transaction (and the occurrence or
assumption of any Indebtedness in connection therewith) had occurred as of the
first day of such period; and (C) in the case
of other than the Proposed Foreign Acquisition, after


 


21

















 


giving effect to such acquisition, there must be at least $5,000,000 of
unused and available Revolving Credit Commitments; and (iii) the Borrower
shall comply, and shall cause the Acquired Entity to comply, with the
applicable provisions of Sections 5.09 and 5.10 and the Security
Documents.


 


“Permitted
Asset Swap” shall mean any transfer of properties or assets by the Borrower
or any of the Subsidiaries in which at least 90% of the consideration received
by the transferor consists of properties or assets (other than cash or
Permitted Investments) useful in the business of the Borrower or the
Subsidiaries; provided that (a) the aggregate fair market value (as
determined in good faith by the board of directors of the Borrower) of the
property or assets being transferred by the Borrower or such Subsidiary is not
greater than the aggregate fair market value (as determined in good faith by
the board of directors of the Borrower) of the property or assets received by
the Borrower or such Subsidiary in such transfer and (b) the aggregate
fair market value (as determined in good faith by the board of directors of the
Borrower) of all property or assets transferred by the Borrower or any of the
Subsidiaries in such transfer, together with the aggregate fair market value of
all other property or assets transferred in prior Permitted Asset Swaps in such
fiscal year, shall not exceed $2,000,000 in any fiscal year.


 


“Permitted
Business” shall mean any business conducted or proposed to be conducted by
the Borrower and the Subsidiaries on the date of this Agreement or any business
that is similar, reasonably related, incidental or ancillary thereto or to the
manufacture of sports equipment or metal or graphite products.


 


“Permitted
Holders” shall mean the Sponsor and the Sponsor Related Parties.


 


“Permitted
Holdings Indebtedness” shall mean Indebtedness of Holdings which (a) does
not require the payment of cash interest, does not mature, and is not subject
to mandatory repurchase, redemption or amortization (other than pursuant to
customary asset sale or change of control provisions requiring redemption or
repurchase only if and to the extent permitted by this Agreement), in each
case, prior to the date that is six months after the Term Loan Maturity Date, (b) is not secured by any assets of Holdings, the
Borrower or any Subsidiary, (c) is not Guaranteed by the Borrower or any
Subsidiary, (d) is not exchangeable or convertible into Indebtedness of
Holdings (except other Permitted Holdings Indebtedness), the Borrower or any
Subsidiary or any preferred stock or other Equity Interest (other than common
equity of Holdings, provided that any such exchange or conversion, if
effected, would not result in a Change in Control) and (e) is subordinated
to the Obligations to the same degree (or to a greater degree) as those
obligations that are subject to the Affiliate Subordination Agreement.


 


“Permitted
Investments” shall mean:


 


(a)                                  direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency thereof
to the extent such obligations are backed by the full faith and credit of the
United States of America), in each case maturing within one year from the date
of acquisition thereof;


 


22

















 


(b)                                 investments
in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;


 


(c)                                  investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 270 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, the
Administrative Agent or any domestic office of any commercial bank organized under
the laws of the United States of America or any State thereof that has a
combined capital and surplus and undivided profits of not less than
$500,000,000;


 


(d)                                 fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above;


 


(e)                                  investments
in “money market funds” within the meaning of Rule 2a-7 of the Investment
Company Act of 1940, as amended, substantially all of whose assets are invested
in investments of the type described in clauses (a) through (d) above;
and


 


(f)                                    other
short-term investments utilized by Foreign Subsidiaries in accordance with
normal investment practices for cash management in investments of a type
analogous to the foregoing.


 


“Permitted
Refinancing Indebtedness” shall mean Indebtedness issued or incurred
(including by means of the extension or renewal of existing Indebtedness) to
refinance, refund, extend, renew or replace existing Indebtedness (“Refinanced
Indebtedness”); provided that (a) the
principal amount of such refinancing, refunding, extending, renewing or
replacing Indebtedness is not greater than the principal amount of such
Refinanced Indebtedness plus the amount of any premiums or penalties and
accrued and unpaid interest paid thereon and reasonable fees and expenses, in
each case associated with such refinancing, refunding, extension, renewal or
replacement, (b) such refinancing, refunding, extending, renewing or
replacing Indebtedness has a final maturity that is no sooner than, and a
weighted average life to maturity that is no shorter than, such Refinanced
Indebtedness, (c) if such Refinanced Indebtedness or any Guarantees
thereof are subordinated to the Obligations, such refinancing, refunding,
extending, renewing or replacing Indebtedness and any Guarantees thereof remain
so subordinated on terms no less favorable to the Lenders, (d) the
obligors in respect of such Refinanced Indebtedness immediately prior to such
refinancing, refunding, extending, renewing or replacing are the only obligors
on such refinancing, refunding extending, renewing or replacing Indebtedness
and (e) unless such refinancing, refunding, extending, renewing or
replacing shall occur within 30 days of the final maturity of such Refinanced
Indebtedness, such refinancing, refunding, extending, renewing or replacing
Indebtedness contains covenants and events of default and is benefited by
Guarantees, if any, which, taken as a whole, are determined in good faith by a
Financial Officer of the Borrower to be no less favorable to the Borrower or
the applicable Subsidiary and the Lenders in any material respect than the
covenants and events of default or Guarantees, if any, in respect of such
Refinanced Indebtedness; provided  further, however, that
any Indebtedness issued or incurred to refinance, refund, extend, renew or
replace


 


23

















 


the Indebtedness of Jineng that is set forth in Schedule 6.01
or the Foreign Target shall not be subject to clause (b) or clause
(e) above.


 


“person”
shall mean any natural person, corporation, trust, business trust, joint
venture, joint stock company, association, company, limited liability company,
partnership, Governmental Authority or other entity.


 


“Pledged
Collateral” shall have the meaning assigned to such term in the Guarantee
and Collateral Agreement.


 


“Prime Rate”
shall mean the rate of interest per annum announced from time to time by Credit
Suisse as its prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective as of the opening of business
on the date such change is announced as being effective. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually available.


 


“Pro Forma
EBITDA” shall have the meaning assigned to such term in Section 4.02(k).


 


“Proposed
Domestic Acquisition” means the acquisition made pursuant to an asset
purchase agreement, dated as of the Funding Date, between the Borrower, as the
purchaser, and a company previously disclosed to the Administrative Agent, as
the seller.


 


“Proposed
Foreign Acquisition” means the Borrower’s establishment or expansion of a
Permitted Business in a foreign jurisdiction previously identified in writing
to the Administrative Agent or any province thereof, including by way of the
acquisition of the assets of, or of the Equity Interests of (resulting in a
Subsidiary), a Person located in such jurisdiction or a province thereof, or the
making of Capital Expenditures therein.


 


“Pro Rata
Percentage” of any Revolving Credit Lender, at any time, shall mean the
percentage of the Total Revolving Credit Commitment represented by such Lender’s
Revolving Credit Commitment. In the event the Revolving Credit Commitments
shall have expired or been terminated, the Pro Rata Percentages of any
Revolving Credit Lender shall be determined on the basis of the Revolving
Credit Commitments most recently in effect prior thereto.


 


“Purchase
Agreement” shall mean the stock purchase agreement dated as of January 30,
2004, by and among TTS Holdings, the Sellers and Holdings.


 


“Qualified
IPO” shall mean an underwritten initial public offering of common stock of
(and by) Holdings pursuant to an effective registration statement filed with
the Securities and Exchange Commission in accordance with the Securities Act of
1933, as amended, which initial public offering results in gross cash proceeds
to Holdings of $50,000,000 or more.


 


“Real
Property” shall mean all Mortgaged Property and all other real property
owned or leased from time to time by Holdings, the Borrower and the
Subsidiaries.


 


“Receivables
Subsidiary” shall mean a Subsidiary which engages in no activities other
than in connection with the financing of accounts receivable or related assets
(including contract rights) and which is designated by the board of directors
of the Borrower (as provided below) as


 


24

















 


a Receivables Subsidiary (a) no portion of the Indebtedness or any
other obligations (contingent or otherwise) of which (i) is guaranteed by
Holdings, the Borrower or any of the other Subsidiaries (but excluding
customary representations, warranties, covenants and indemnities entered into
in connection with a Securitization Transaction), (ii) is recourse to or
obligates Holdings, the Borrower or any of the other Subsidiaries in any way
other than pursuant to customary representations, warranties, covenants and
indemnities entered into in connection with a Securitization Transaction or (iii) subjects
any property or asset (including contract rights) of Holdings, the Borrower or
any of the other Subsidiaries (other than accounts receivable and related
assets provided in the definition of “Securitization Transaction”), directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to customary representations, warranties, covenants and indemnities
entered into in connection with a Securitization Transaction, (b) with
which none of Holdings, the Borrower or any of the other Subsidiaries has any
material contract, agreement, arrangement or understanding other than on terms
no less favorable to Holdings, the Borrower or such other Subsidiary than those
that might be obtained at the time from persons who are not Affiliates of
Holdings, other than customary fees payable in connection with servicing
accounts receivable and (c) with which none of Holdings, the Borrower or
any of the other Subsidiaries has any obligation to maintain or preserve such
Subsidiary’s financial condition or cause such Subsidiary to achieve certain
levels of operating results. Any such designation by the board of directors of
the Borrower shall be evidenced to the Administrative Agent by delivery to the
Administrative Agent of a certified copy of the resolution of the board of
directors of the Borrower giving effect to such designation and a certificate
of a Financial Officer of the Borrower certifying that such designation
complied with the foregoing requirements.


 


“Recovery
Event” shall mean any settlement of or payment in respect of any property
or casualty insurance claim or any taking under power of eminent domain or by
condemnation or similar proceeding of or relating to any property or asset of
Holdings, the Borrower or any Subsidiary.


 


“Register”
shall have the meaning assigned to such term in Section 9.04(d).


 


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


 


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


 


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


 


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


 


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


 


25

















 


“Release”
shall mean any release, spill, seepage, emission, leaking, pumping, injection,
pouring, emptying, deposit, disposal, discharge, dispersal, dumping, escaping,
leaching, or migration into, onto or through the environment or within or upon
any building, structure, facility or fixture.


 


“Repayment
Date” shall have the meaning given such term in Section 2.11.


 


“Required
Lenders” shall mean, at any time, Lenders (other than Defaulting Lenders)
having Loans (excluding Swingline Loans), L/C Exposure, Swingline Exposure and
unused Revolving Credit Commitments and Term Loan Commitments representing at
least a majority of the sum of all Loans outstanding (excluding Swingline
Loans), L/C Exposure, Swingline Exposure and unused Revolving Credit
Commitments and Term Loan Commitments at such time.


 


“Required
Prepayment Percentage” shall mean (a) in the case of any Asset Sale or
Recovery Event, 100%; (b) in the case of any Equity Issuance, if on the
date of the applicable prepayment, to the extent that the Leverage Ratio, after
giving effect to any repayment of Loans with the applicable Net Cash Proceeds,
is greater than or equal to 4.00 to 1.00, 50%, and to the extent that the
Leverage Ratio, after giving effect to any repayment of Loans with the
applicable Net Cash Proceeds, is less than 4.00 to 1.00, 25%; (c) in the
case of any issuance or other incurrence of Indebtedness, 100%; and (d) in
the case of any Excess Cash Flow, if on the last day of the applicable fiscal
year, to the extent that the Leverage Ratio, after giving effect to any
repayment of Loans with the applicable Net Cash Proceeds, is (i) greater
than or equal to 4.00 to 1.00, 75%, (ii) less than 4.00 to 1.00 but
greater than 3.00 to 1.00, 50%, (iii) less than or equal to 3.00 to 1.00 but greater than 2.00 to 1.00, 25% and (iv) less
than or equal to 2.00 to 1.00, 0%.


 


“Requirement
of Law” shall mean as to any person, the governing documents of such
person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such person or any of its Real Property or personal property
or to which such person or any of its property of any nature is subject.


 


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


 


“Restricted
Indebtedness” shall mean Indebtedness of Holdings, the Borrower or any
Subsidiary, the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(b).


 


“Restricted
Payment” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in Holdings,
the Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, defeasance, retirement, acquisition, cancellation or
termination of any Equity Interests in Holdings, the Borrower or any Subsidiary
or any option, warrant or other right to acquire any such Equity Interests in
Holdings, the Borrower or any Subsidiary.


 


26

















 


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


 


“Revolving
Credit Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make Revolving Loans (and to acquire participations
in Letters of Credit and Swingline Loans) hereunder as set forth on the Lender
Addendum delivered by such Lender or as set forth on Schedule 2.01,
or in the Assignment and Acceptance pursuant to which such Lender assumed its
Revolving Credit Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.


 


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


 


“Revolving
Credit Lender” shall mean a Lender with a Revolving Credit Commitment or an
outstanding Revolving Loan.


 


“Revolving
Credit Maturity Date” shall mean March 15, 2009.


 


“Revolving
Loans” shall mean the revolving loans made by the Lenders to the Borrower
pursuant to clause (b) of Section 2.01.


 


“S&P”
shall mean Standard & Poor’s Ratings Group, Inc.


 


“Secured
Parties” shall have the meaning assigned to such term in the Guarantee and
Collateral Agreement.


 


“Securitization
Transactions” shall mean, with respect to any person, any transfer by such
person of accounts receivable or interests therein (a) to a trust,
partnership, corporation or other entity that is a Receivables Subsidiary,
which transfer is funded in whole or in part, directly or indirectly, by the
incurrence or issuance by the transferee or any successor transferee of
Indebtedness or securities that are to receive payments from, or that represent
interests in, the cash flow derived from such accounts receivable or interests,
or (b) directly to one or more investors or other purchasers. The amount
of any Securitization Transaction shall be deemed at any time to be the
aggregate principal or stated amount of the Indebtedness or securities referred
to in the preceding sentence or, if there shall be no such principal or stated
amount, the uncollected amount of the accounts receivable transferred pursuant
to such Securitization Transaction net of any accounts receivable that have
been written off as uncollectible.


 


“Security
Documents” shall mean the Guarantee and Collateral Agreement, the
Mortgages, the Intellectual Property Security Agreements and each of the other
security agreements, pledges, mortgages, consents and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant
to Section 5.09 or 5.10.


 


“Sellers”
shall mean True Temper Sports, LLC, and certain members of management of
Holdings party to the Purchase Agreement.


 


27

















 


 “Senior Secured Debt” shall mean, at
any time, the principal amount of all the Obligations and all other
Indebtedness included in Total Debt at such time, except the Subordinated Notes
and any other unsecured Indebtedness.


 


“SPC”
shall have the meaning assigned to such term in Section 9.04(i).


 


“Sponsor”
shall mean, collectively, Gilbert Global Equity Partners, L.P., Gilbert Global
Equity Partners (Bermuda), L.P. and GGEP/SK Equity Partners, LLC.


 


“Sponsor
Related Parties” shall mean (a) any (i) controlling stockholder,
partner or member, (ii) majority-owned (or more) subsidiary or (iii) spouse
or immediate family member (in the case of an individual), in each case, of the
Sponsor or (b) any trust, corporation, partnership, limited liability
company or other entity, the beneficiaries, stockholders, partners, members,
owners or persons beneficially holding (directly or through on or more
subsidiaries) a greater than 50% controlling interest of which consist of the
Sponsor and/or such persons referred to in the immediately preceding clause
(a).


 


“Statutory
Reserves” shall mean a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus
the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board and any other banking authority, domestic or foreign, to which the
Administrative Agent or any Lender (including any branch, Affiliate or other
fronting office making or holding a Loan) is subject for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Eurodollar Loans shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time
to any Lender under such Regulation D or any comparable regulation. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.


 


“Stockholders
Agreement” shall mean the Stockholders Agreement dated as of the Closing
Date among Holdings and its stockholders party thereto.


 


“Subordinated
Note Documents” shall mean the indenture under which the Subordinated Notes
are issued and all other instruments, agreements and other documents evidencing
or governing the Subordinated Notes or providing for any Guarantee or other
right in respect thereof.


 


“Subordinated
Notes” shall mean the Borrower’s 8-3/8% Senior Subordinated Notes due 2011,
in an aggregate principal amount of $125,000,000, including any notes issued by
the Borrower in full exchange for, and as contemplated by, the Subordinated Notes
with substantially identical terms as the Subordinated Notes.


 


“subsidiary”
shall mean, with respect to any person (herein referred to as the “parent”),
any corporation, partnership, limited liability company, association or other
entity (a) of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power or
more than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held, or (b) that is, at
the time


 


28

















 


any determination is made, otherwise Controlled, by the parent or one
or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.


 


“Subsidiary”
shall mean any subsidiary of the Borrower.


 


“Subsidiary
Guarantor” shall mean, initially, each Subsidiary specified on Schedule 1.01(c) and,
at any time thereafter, shall include each other Subsidiary that is not an
Excluded Foreign Subsidiary or a Receivables Subsidiary.


 


“Swingline
Commitment” shall mean the commitment of the Swingline Lender to make loans
pursuant to Section 2.22, as the same may be reduced from time
to time pursuant to Section 2.09.


 


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


 


“Swingline
Lender” shall mean Credit Suisse (formerly known as Credit Suisse First
Boston), in its capacity as lender of Swingline Loans hereunder.


 


“Swingline
Loan” shall mean any loan made by the Swingline Lender pursuant to Section 2.22.


 


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


 


“Synthetic
Lease Obligations” shall mean all monetary obligations of a person under (a) a
so-called synthetic, off-balance sheet or tax retention lease (which is not a
true operating lease) or (b) an agreement for the use or possession of any
property (whether real, personal or mixed) creating obligations which do not
appear on the balance sheet of such person, but which, upon the insolvency or
bankruptcy of such person, would be characterized as Indebtedness of such
person (without regard to accounting treatment).


 


“Synthetic
Purchase Agreement” shall mean any swap, derivative or other agreement or
combination of agreements pursuant to which Holdings, the Borrower or any
Subsidiary is or may become obligated to make (a) any payment in
connection with a purchase by any third party from a person other than
Holdings, the Borrower or any Subsidiary of any Equity Interest or Restricted
Indebtedness or (b) any payment (other than on account of a permitted
purchase by it of any Equity Interest or Restricted Indebtedness) the amount of
which is determined by reference to the price or value at any time of any
Equity Interest or Restricted Indebtedness; provided that no phantom
stock or similar plan providing for payments only to current or former
directors, officers or employees of Holdings, the Borrower or the Subsidiaries
(or to their heirs or estates) shall be deemed to be a Synthetic Purchase
Agreement.


 


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


 


29

















 


“Taxes”
shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges, liabilities or withholdings imposed by any Governmental
Authority.


 


“Tax
Sharing Agreement” shall mean the tax sharing agreement dated as of the
Closing Date among Holdings, the Borrower and the Subsidiaries party thereto.


 


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


 


“Term
Lender” shall mean a Lender with a Term Loan Commitment or an outstanding
Term Loan.


 


“Term Loan
Commitment” shall mean, with respect to each Lender, the commitment, if
any, of such Lender to make Term Loans hereunder as set forth on the Lender
Addendum delivered by such Lender or as set forth on Schedule 2.01, or in
the Assignment and Acceptance pursuant to which such Lender assumed its Term
Loan Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.
The initial aggregate amount of the Term Loan Commitments is $110,000,000. The
aggregate amount of the Term Loan Commitments following the Amendment Effective
Date is $128,000,000. Unless the context shall otherwise require, (i) after
the Amendment Effective Date, the term “Term Loan Commitment” shall include any
Additional Term Loan Commitment and (ii) after the effectiveness of any
Incremental Term Loan Commitment, the term “Term Loan Commitment” shall include
such Incremental Term Loan Commitment.


 


“Term Loan
Maturity Date” shall mean March 15, 2011.


 


“Term Loans”
shall mean the term loans made by the Lenders to the Borrower pursuant to Section 2.01
and, if applicable, Section 2.24. Unless the context shall
otherwise require, the term “Term Loan” shall include any Additional Term
Loans, Incremental Term Loans and any Other Term Loans.


 


“Total Debt”
shall mean, as of the last day of any fiscal quarter, the aggregate amount of
Indebtedness of the Borrower and the Subsidiaries outstanding at such time, in
the amount that would be reflected on a balance sheet prepared at such time on
a consolidated basis in accordance with GAAP.


 


“Total
Revolving Credit Commitment” shall mean, at any time, the aggregate amount
of the Revolving Credit Commitments, as in effect at such time. The Total
Revolving Credit Commitment on the Closing Date is $20,000,000.


 


“Transactions”
shall mean, collectively, (a) the execution, delivery and performance by
the Loan Parties of the Loan Documents and the Subordinated Note Documents to
which they are a party, (b) the borrowings hereunder, the issuance of the
Subordinated Notes, the issuance of Letters of Credit and the use of proceeds
of each of the foregoing, (c) the granting of Liens pursuant to the
Security Documents, (d) the Acquisition and the other Acquisition
Transactions and (e) any other transactions related to or entered into in
connection with any of the foregoing.


 


30

















 


“TTS
Holdings” shall mean TTS Holdings LLC, a Delaware limited liability company
controlled by the Sponsor and its Affiliates, which was merged with and into
Holdings on the Closing Date, with Holdings being the surviving person.


 


“Type”,
when used in respect of any Loan or Borrowing, shall refer to the Rate by
reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term “Rate” shall
include the Adjusted LIBO Rate and the Alternate Base Rate.


 


“UCC”
shall mean the Uniform Commercial Code.


 


“Uniform Customs”
shall have the meaning assigned to such term in Section 9.07.


 


“wholly
owned subsidiary” of any person shall mean a subsidiary of such person of
which securities (except for directors’ qualifying shares) or other ownership
interests representing 100% of the Equity Interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person; a “wholly owned Subsidiary”
shall mean any wholly owned subsidiary of the Borrower.


 


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


 


SECTION 1.02.
Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include”, “includes” and “including”,
and words of similar import, shall not be limiting and shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed
to have the same meaning and effect as the word “shall”. The words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision of this
Agreement unless the context shall otherwise require. All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, (a) any definition of, or reference to, any Loan Document,
including this Agreement, or any other agreement, instrument or document in
this Agreement shall mean such Loan Document or other agreement, instrument or
document as amended, restated, supplemented or otherwise modified from time to
time (subject to any restrictions on such amendments, restatements, supplements
or modifications set forth herein) and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that if the Borrower notifies
the Administrative Agent that the Borrower wishes to amend any covenant in Article VI
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 Borrower that the Required Lenders
wish to amend Article VI or any related definition for such
purpose), then the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend (subject to the approval of the Required
Lenders) such covenant


 


31

















 


to preserve the
original intent thereof in light of such change; provided that until so
amended the Borrower’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 either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.


 


SECTION 1.03.
Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and
Type (e.g., a “Eurocurrency
Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and
Type (e.g., a “Eurocurrency
Revolving Borrowing”).


 


SECTION 1.04.
Pro Forma Calculations. All pro  forma calculations
permitted or required to be made by the Borrower or any Subsidiary pursuant to
this Agreement shall include only those adjustments that would be permitted or
required by Regulation S-X under the Securities Act of 1933, as amended,
together with those adjustments that (a) have been certified by a
Financial Officer of the Borrower as having been prepared in good faith based
upon reasonable assumptions and (b) are based on reasonably detailed
written assumptions reasonably acceptable to the Administrative Agent.


 


ARTICLE II


 


The Credits 


 


SECTION 2.01.
Commitments. Subject to the terms and conditions hereof and relying upon
the representations and warranties set forth herein, (a) each Term Lender
having a Term Loan Commitment on the Closing Date has made a Term Loan to the
Borrower on the Closing Date in a principal amount not exceeding its Term Loan
Commitment on such date, (b) each Term Lender having a Term Loan
Commitment on the Amendment Effective Date agrees, severally and not jointly,
to make a Term Loan to the Borrower on a single date specified by the Borrower
that is prior to the Additional Term Loan Commitment Termination Date in a
principal amount not to exceed its Term Loan Commitment, (c) each
Incremental Term Lender which shall provide an Incremental Term Loan Commitment
pursuant to Section 2.24 agrees, severally and not jointly, to make an
Incremental Term Loan to the Borrower in a principal amount not to exceed its
Incremental Term Loan Commitment and (d) each Revolving Credit Lender
agrees, severally and not jointly, to make Revolving Loans to the Borrower, at
any time and from time to time on or after the Closing Date and until the
earlier of the Revolving Credit Maturity Date and the termination of the
Revolving Credit Commitment of such Revolving Credit Lender in accordance with
the terms hereof, in an aggregate principal amount at any time outstanding that
will not result in such Revolving Credit Lender’s Revolving Credit Exposure
exceeding such Revolving Credit Lender’s Revolving Credit Commitment. Within
the limits set forth in clause (d) of the preceding sentence
and subject to the terms, conditions and limitations set forth herein, the
Borrower may borrow, pay or prepay and reborrow Revolving Loans. Amounts
paid or prepaid in respect of Term Loans may not be reborrowed.


 


32






 













 


SECTION 2.02.
Loans. (a)  Each Loan (other than
Swingline Loans) shall be made as part of a Borrowing consisting of Loans
of the same Class and Type made by the Lenders ratably in accordance with
their respective Commitments of the applicable Class; provided, however,
that the failure of any Lender to make any Loan required to be made by it shall
not in itself relieve any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be responsible for the failure
of any other Lender to make any Loan required to be made by such other Lender).
Except for Loans deemed made pursuant to Section 2.02(f) and
subject to Section 2.22 relating to Swingline Loans, the Loans
comprising any Borrowing shall be in an aggregate principal amount that is (i) an
integral multiple of $500,000 and not less than $2,000,000 or (ii) equal
to the remaining available balance of the applicable Commitments.


 


(b)                                 Subject
to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type may be
outstanding at the same time; provided, however, that the
Borrower shall not be entitled to request any Borrowing that, if made, would
result in more than ten Eurodollar Borrowings outstanding hereunder at any time.
For purposes of the foregoing, Borrowings having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.


 


(c)                                  Except
with respect to Loans made pursuant to Section 2.02(f) and
subject to Section 2.22 relating to Swingline Loans, each Lender
shall make each Loan to be made by it hereunder on the proposed date thereof by
wire transfer of immediately available funds to such account in New York City
as the Administrative Agent may designate not later than 11:00 a.m.,
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account designated by the Borrower in the applicable
Borrowing Request or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.


 


(d)                                 Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) of this Section and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If the Administrative Agent
shall have so made funds available then, to the extent that such Lender shall
not have made such portion available to the Administrative Agent, such Lender
and the Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to the Borrower to but
excluding the date such amount is repaid to the Administrative Agent at (i) in
the case of the Borrower, the interest rate applicable at the time to the Loans
comprising such Borrowing or (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to


 


33

















 


the Administrative
Agent such corresponding amount, such amount shall constitute such Lender’s
Loan as part of such Borrowing for purposes of this Agreement.


 


(e)                                  Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to
request any Revolving Credit Borrowing if the Interest Period requested with
respect thereto would end after the Revolving Credit Maturity Date.


 


(f)                                    If
the Issuing Bank shall not have received from the Borrower the payment required
to be made by Section 2.23(e) with respect to a Letter of
Credit within the time specified in such Section, the Issuing Bank will promptly
notify the Administrative Agent of the L/C Disbursement and the Administrative
Agent will promptly notify each Revolving Credit Lender of such L/C
Disbursement and its Pro Rata Percentage thereof. Each Revolving Credit Lender
shall pay by wire transfer of immediately available funds to the Administrative
Agent not later than 2:00 p.m., New York City time, on such date (or, if
such Revolving Credit Lender shall have received such notice later than 12:00
(noon), New York City time, on any day, not later than 10:00 a.m., New
York City time, on the immediately following Business Day), an amount equal to
such Lender’s Pro Rata Percentage of such L/C Disbursement (it being understood
that such amount shall be deemed to constitute an ABR Revolving Loan of such Lender
and such payment shall be deemed to have reduced the L/C Exposure), and the
Administrative Agent will promptly pay to the Issuing Bank amounts so received
by it from the Revolving Credit Lenders. The Administrative Agent will promptly
pay to the Issuing Bank any amounts received by it from the Borrower pursuant
to Section 2.23(e) prior to the time that any Revolving Credit
Lender makes any payment pursuant to this paragraph; any such amounts received
by the Administrative Agent thereafter will be promptly remitted by the
Administrative Agent to the Revolving Credit Lenders that shall have made such
payments and to the Issuing Bank, as their interests may appear. If any Revolving Credit Lender shall not have made
its Pro Rata Percentage of such L/C Disbursement available to the
Administrative Agent as provided above, such Lender and the Borrower severally
agree to pay interest on such amount, for each day from and including the date
such amount is required to be paid in accordance with this paragraph to but
excluding the date such amount is paid, to the Administrative Agent for the
account of the Issuing Bank at (i) in the case
of the Borrower, a rate per annum equal to the interest rate applicable to
Revolving Loans pursuant to Section 2.06(a), and (ii) in the
case of such Lender, for the first such day, the Federal Funds Effective Rate,
and for each day thereafter, the Alternate Base Rate.


 


SECTION 2.03.
Borrowing Procedure. In order to request a Borrowing (other than a
Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f),
as to which this Section 2.03 shall not apply), the Borrower shall
notify the Administrative Agent by telephone (promptly confirmed by fax) or
shall hand deliver or fax to the Administrative Agent a duly completed
Borrowing Request (a) in the case of a Eurodollar Borrowing, not later
than 12:00 p.m. (noon), New York City time, three Business Days before a
proposed Borrowing and (b) in the case of an ABR Borrowing, not later than
12:00 p.m. (noon), New York City time, one Business Day before a proposed
Borrowing. Each Borrowing Request shall be irrevocable, shall be signed by or
on behalf of the Borrower and shall specify the following information:  (i) whether
the Borrowing then being requested is to be a Term Borrowing or a Revolving
Credit Borrowing, and whether such Borrowing is to be a Eurodollar Borrowing or
an ABR Borrowing; (ii) the date of such
Borrowing (which shall be a Business Day); (iii) the number and location
of the account to which funds are to be disbursed (which shall be an account
that complies with the


 


34

















 


requirements of Section 2.02(c));
(iv) the amount of such Borrowing; and (v) if such Borrowing is to be
a Eurodollar Borrowing, the initial Interest Period with respect thereto; provided,
however, that, notwithstanding any contrary specification in any
Borrowing Request, each requested Borrowing shall comply with the requirements
set forth in Section 2.02. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall
be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration. The Administrative
Agent shall promptly advise the applicable Lenders of any notice given in
accordance with this Section 2.03 (and the contents thereof), and
of each Lender’s portion of the requested Borrowing.


 


SECTION 2.04.
Repayment of Loans; Evidence of Debt. (a)  The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the principal amount of each
Term Loan of such Lender made to the Borrower as provided in Section 2.11
and (ii) the then unpaid principal amount of each Revolving Loan of such
Lender made to the Borrower on the Revolving Credit Maturity Date. The Borrower
hereby unconditionally promises to pay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan made to the Borrower on the Revolving
Credit Maturity Date.


 


(b)                                 Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender to the Borrower from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.


 


(c)                                  The
Administrative Agent shall maintain accounts in which it will record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of the sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender’s share thereof.


 


(d)                                 The
entries made in the accounts maintained pursuant to paragraphs (b) and
(c) of this Section shall be prima  facie evidence of
the existence and amounts of the obligations therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans made to the Borrower in
accordance with the terms of this Agreement.


 


(e)                                  Any
Lender may request that Loans made by it hereunder be evidenced by a
promissory note. In such event, the Borrower shall execute and deliver to such
Lender a promissory note payable to such Lender and, if requested by such
Lender, its registered assigns, in the form of Exhibit I, if
such promissory note relates to Revolving Credit Borrowings, or in the form of
Exhibit J, if such promissory note relates to Term Borrowings, or
any other form reasonably acceptable to the Administrative Agent. Notwithstanding
any other provision of this Agreement, in the event any Lender shall request
and receive such a promissory note, the interests represented by such note
shall at all times (including after any assignment of all or part


 


35

















 


of such interests
pursuant to Section 9.04) be represented by one or more promissory
notes payable to the payee named therein or its registered assigns.


 


SECTION 2.05.
Fees. (a)  The Borrower agrees to pay to
each Lender, through the Administrative Agent, on the last Business Day of
March, June, September and December in each year and on each date on
which any Commitment of such Lender shall expire or be terminated as provided
herein, a commitment fee (a “Commitment Fee”) equal to the Commitment
Fee Rate on the average daily unused amount of the Commitments of such Lender
(other than the Swingline Commitment) during the preceding quarter (or other
period commencing with the Closing Date or ending with the Revolving Credit
Maturity Date or the date on which the Commitments of such Lender shall expire
or be terminated). All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. The Commitment Fee due to
each Lender shall commence to accrue on the Closing Date and shall cease to
accrue on the date on which the Commitment of such Lender shall expire or be
terminated as provided herein. For purposes of calculating Commitment Fees with
respect to Revolving Credit Commitments only, no portion of the Revolving
Credit Commitments shall be deemed utilized under Section 2.22 as a
result of outstanding Swingline Loans.


 


(b)                                 The
Borrower agrees to pay to the Administrative Agent, for its own account, the
fees in the amounts and at the times from time to time agreed to in writing by
the Borrower (or any Affiliate) and the Administrative Agent, including
pursuant to the applicable Fee Letter (the “Administrative Agent Fees”).


 


(c)                                  The
Borrower agrees to pay (i) to each Revolving Credit Lender, through the
Administrative Agent, on the last Business Day of March, June, September and
December of each year and on the date on which the Revolving Credit
Commitment of such Lender shall be terminated as provided herein (each, an “L/C
Fee Payment Date”) a fee (an “L/C Participation Fee”) calculated on
such Lender’s Pro Rata Percentage of the daily aggregate L/C Exposure
(excluding the portion thereof attributable to unreimbursed L/C Disbursements
which are earning interim interest pursuant to Section 2.23(h))
during the preceding quarter (or shorter period commencing with the Closing
Date or ending with the Revolving Credit Maturity Date or the date on which all
Letters of Credit have been canceled or have expired and the Revolving Credit
Commitments of all Lenders shall have been terminated) at a rate per annum
equal to the Applicable Margin used to determine the interest rate on Revolving
Credit Borrowings comprised of Eurodollar Loans pursuant to Section 2.06,
and (ii) to the Issuing Bank with respect to each outstanding Letter of
Credit issued for the account of (or at the request of) the Borrower a fronting
fee, which shall accrue at the rate of 1⁄4 of 1% per annum or such other rate as
shall be separately agreed upon between the Borrower and the Issuing Bank, on
the drawable amount of such Letter of Credit, payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date of such Letter of Credit, as
well as the Issuing Bank’s standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit issued for the account
of (or at the request of) the Borrower or processing of drawings thereunder
(the fees in this clause (ii), collectively, the “Issuing Bank
Fees”). All L/C Participation Fees and Issuing Bank Fees shall be computed
on the basis of the actual number of days elapsed in a year of 360 days.


 


(d)                                 The
Borrower agrees to pay to the Administrative Agent for the account of the
applicable Term Lenders, a fee in an amount equal to 0.50% per annum on the
aggregate amount


 


36

















 


of the Additional
Term Loan Commitments (payable to such applicable Term Lenders on a pro  rata
basis with respect to their Additional Term Loan Commitments), accruing for the
period from the Fee Trigger Date through and including the Additional Term Loan
Commitment Termination Date if (i) the borrowing of the Additional Term
Loans does not occur within 60 days following the Amendment Effective Date or (ii) the
Borrower terminates the Additional Term Loans Commitments on or following the
Fee Trigger Date.


 


(e)                                  All
Fees shall be paid on the dates due, in immediately available funds, to the
Administrative Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the
Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances.


 


SECTION 2.06.
Interest on Loans. (a)  Subject to the provisions of Section 2.07,
the Loans comprising each ABR Borrowing, including each Swingline Loan, shall
bear interest (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, when the Alternate Base
Rate is determined by reference to the Prime Rate and over a year of 360 days
at all other times, in each case calculated from and including the date of such
ABR Borrowing to but excluding the date of repayment) at a rate per annum equal
to the Alternate Base Rate plus the Applicable Margin in effect from time to
time.


 


(b)                                 Subject
to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin in effect from time to time.


 


(c)                                  Interest
on each Loan shall be payable on the Interest Payment Dates applicable to such
Loan except as otherwise provided in this Agreement. The applicable Alternate
Base Rate or Adjusted LIBO Rate for each Interest Period or day within an
Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.


 


SECTION 2.07.
Default Interest. If the Borrower shall default in the payment of the
principal of or interest on any Loan or any other amount becoming due hereunder
or under any other Loan Document, by acceleration or otherwise, the Borrower
shall on demand from time to time pay interest, to the extent permitted by law,
on such defaulted amount to but excluding the date of actual payment (after as
well as before judgment) (a) in the case of overdue principal, at the rate
otherwise applicable to such Loan pursuant to Section 2.06 plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed
on the basis of the actual number of days elapsed over a year of 365 or 366
days, as the case may be, when determined by reference to the Prime Rate
and over a year of 360 days at all other times) equal to the rate that would be
applicable to an ABR Revolving Loan plus 2.00%.


 


SECTION 2.08.
Alternate Rate of Interest. In the event, and on each occasion, that
prior to the commencement of any Interest Period for a Eurodollar Borrowing (a) the
Administrative Agent shall have determined that adequate and reasonable means
do not exist for determining the Adjusted LIBO Rate for such Interest Period or
(b) the Administrative Agent is advised by the Majority Facility Lenders
in respect of the relevant Facility that the Adjusted LIBO Rate for such


 


37

















 


Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period,
the Administrative Agent shall, as soon as practicable thereafter, give written
or fax notice of such determination to the Borrower and the Lenders. In the
event of any such determination, until the Administrative Agent shall have
advised the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any request by the Borrower for a Eurodollar
Borrowing pursuant to Section 2.03 or 2.10 shall be deemed
to be a request for an ABR Borrowing and (ii) any Interest Period election
that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective. Each determination
by the Administrative Agent under this Section 2.08 shall be
conclusive absent manifest error.


 


SECTION 2.09.
Termination and Reduction of Commitments. (a)  Unless previously
terminated in accordance with the terms hereof, (i) the Term Loan
Commitments made under the Existing Credit Agreement automatically terminated
at 5:00 p.m., New York City time, on the Closing Date, (ii) the
Revolving Credit Commitments, the Swingline Commitment and the L/C Commitment
shall automatically terminate on the Revolving Credit Maturity Date and (iii) the
Additional Term Loan Commitments made under this Agreement shall automatically
terminate on the earlier of (such date, the “Additional Term Loan Commitment
Termination Date”) (A) 5:00 p.m., New York City time, on the date
that the Borrower delivers written notice to the Administrative Agent notifying
the Administrative Agent that the Borrower will not borrow the Additional Term
Loans, (B) the Borrowing thereunder on the Funding Date and (C) 5:00 p.m.,
New York City time, on the date that is 150 days after the Amendment Effective
Date if a Borrowing of Additional Term Loans shall not have occurred by such
time.


 


(b)                                 Upon
at least three Business Days’ prior irrevocable written or fax notice to the
Administrative Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Additional
Term Loan Commitments, the Incremental Term Loan Commitments, the Revolving
Credit Commitments or the Swingline Commitment; provided, however,
that (i) each partial reduction of the Additional Term Loan Commitments,
the Incremental Term Loan Commitments, the Revolving Credit Commitments or the
Swingline Commitment shall be in an integral multiple of $500,000 and in a
minimum amount of $2,000,000 and (ii) the Total Revolving Credit
Commitment shall not be reduced to an amount that is less than the Aggregate
Revolving Credit Exposure then in effect.


 


(c)                                  Each
reduction in the Additional Term Loan Commitments, the Incremental Term Loan
Commitments, the Revolving Credit Commitments or Swingline Commitment hereunder
shall be made ratably among the applicable Lenders in accordance with their Pro
Rata Percentages. The Borrower shall pay to the Administrative Agent for the
account of the applicable Lenders, on the date of each termination or
reduction, the Commitment Fees on the amount of the Commitments so terminated
or reduced accrued to but excluding the date of such termination or reduction.


 


SECTION 2.10.
Conversion and Continuation of Borrowings. The Borrower shall have the
right at any time upon prior irrevocable notice to the Administrative Agent (a) not
later than 12:00 p.m. (noon), New York City time, one Business Day prior
to conversion, to convert any Eurodollar Borrowing of the Borrower into an ABR
Borrowing, (b) not later than 12:00 p.m. (noon), New York City time,
three Business Days prior to conversion or continuation, to convert


 


38

















 


any ABR Borrowing
of the Borrower into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing of the Borrower as a Eurodollar Borrowing for an additional Interest
Period and (c) not later than 12:00 p.m.
(noon), New York City time, three Business Days prior to conversion, to convert
the Interest Period with respect to any Eurodollar Borrowing of the Borrower to
another permissible Interest Period, subject in each case to the following:


 


(i)                                     each
conversion or continuation shall be made pro  rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;


 


(ii)                                  if
less than all the outstanding principal amount of any Borrowing shall be
converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding
the principal amount and maximum number of Borrowings of the relevant Type;


 


(iii)                               each
conversion shall be effected by each Lender and the Administrative Agent by
recording for the account of such Lender the new Loan of such Lender resulting
from such conversion and reducing the Loan (or portion thereof) of such Lender
being converted by an equivalent principal amount; accrued interest on any
Eurodollar Loan (or portion thereof) being converted shall be paid by the
Borrower at the time of conversion;


 


(iv)                              if
any Eurodollar Borrowing is converted at a time other than the end of the
Interest Period applicable thereto, the Borrower shall pay, upon demand, any
amounts due to the Lenders pursuant to Section 2.16;


 


(v)                                 any
portion of a Borrowing maturing or required to be repaid in less than one month
may not be converted into or continued as a Eurodollar Borrowing;


 


(vi)                              any
portion of a Eurodollar Borrowing that cannot be converted into or continued as
a Eurodollar Borrowing by reason of the immediately preceding clause shall be
automatically converted at the end of the Interest Period in effect for such
Borrowing into an ABR Borrowing;


 


(vii)                           no
Interest Period may be selected for any Eurodollar Term Borrowing that
would end later than a Repayment Date occurring on or after the first day of
such Interest Period if, after giving effect to such selection, the aggregate
outstanding amount of (A) the Eurodollar Term Borrowings with Interest
Periods ending on or prior to such Repayment Date and (B) the ABR Term
Borrowings would not be at least equal to the principal amount of Term
Borrowings to be paid on such Repayment Date; and


 


(viii)                        upon
notice to the Borrower from the Administrative Agent given at the request of
the Required Lenders, after the occurrence and during the continuance of a
Default or Event of Default, no outstanding Loan may be converted into, or
continued as, a Eurodollar Loan.


 


39

















 


Each notice
pursuant to this Section 2.10 shall be irrevocable and shall refer
to this Agreement and specify (i) the identity and amount of the Borrowing
that the Borrower requests be converted or continued, (ii) whether such
Borrowing is to be converted to or continued as a Eurodollar Borrowing or an
ABR Borrowing, (iii) if such notice requests a conversion, the date of
such conversion (which shall be a Business Day) and (iv) if such Borrowing
is to be converted to or continued as a Eurodollar Borrowing, the Interest
Period with respect thereto. If no Interest Period is specified in any such
notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the Borrower shall be deemed to have selected an Interest Period of
one month’s duration. The Administrative Agent shall advise the Lenders of any
notice given pursuant to this Section 2.10 and of each Lender’s
portion of any converted or continued Borrowing. If the Borrower shall not have
given notice in accordance with this Section 2.10 to continue any
Borrowing into a subsequent Interest Period (and shall not otherwise have given
notice in accordance with this Section 2.10 to convert such
Borrowing), such Borrowing shall, at the end of the Interest Period applicable
thereto (unless repaid pursuant to the terms hereof), automatically be
converted or continued into an ABR Borrowing.


 


SECTION 2.11.
Repayment of Term Borrowings.


 


(a)                                  (i) 
On the dates set forth below, or if any such date is not a Business Day, on the
next preceding Business Day (each such date being called a “Repayment Date”),
the Borrower shall pay to the Administrative Agent, for the account of the Term
Lenders, a principal amount of the Term Loans (as adjusted from time to time
pursuant to Sections 2.12, 2.13(f) and 2.24(d)) equal to the
amount set forth below for such date, together in each case with accrued and
unpaid interest and Fees on the amount to be paid to but excluding the date of
such payment:


 


	
  Repayment Date

  	
   

  	
  Amount

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  320,000

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  30,640,000

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  30,640,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  30,640,000

  	
   

  
	
  Term Loan Maturity Date

  	
   

  	
  Remainder

  	
   

  



 


40

















 


(ii)  The Borrower shall
pay to the Administrative Agent, for the account of the applicable Lenders, on
each Incremental Term Loan Repayment Date, a principal amount of Other Term
Loans (as adjusted from time to time pursuant to Sections 2.12 and 2.13(f))
equal to the amount set forth for such date in the applicable Incremental Term
Loan Assumption Agreement, together in each case with accrued and unpaid interest
and Fees on the amount to be paid to but excluding the date of such payment.


 


(b)                                 To
the extent not previously paid, all Term Loans and (if applicable) Other Term
Loans shall be due and payable on the Term Loan Maturity Date or the applicable
Incremental Term Loan Maturity Date, as the case may be, together with
accrued and unpaid interest on the principal amount to be paid to but excluding
the date of payment.


 


(c)                                  All
repayments pursuant to this Section 2.11 shall be subject to Section 2.16,
but shall otherwise be without premium or penalty.


 


SECTION 2.12.
Prepayment. (a)  The Borrower shall have the right at any time and
from time to time to prepay any Borrowing, in whole or in part, upon at least
three Business Days’ prior written or fax notice (or telephone notice promptly
confirmed by written or fax notice) in the case of Eurodollar Loans, or written
or fax notice (or telephone notice promptly confirmed by written or fax notice)
at least one Business Day prior to the date of prepayment in the case of ABR
Loans, to the Administrative Agent before 12:00 p.m. (noon), New York City
time; provided, however, that each partial prepayment shall be in
an amount that is an integral multiple of $500,000 and not less than $500,000.


 


(b)                                 Optional
prepayments of Term Loans shall be applied, first, pro  rata to
the scheduled installments of principal due in respect of the Term Loans in
accordance with Section 2.11 within twelve months of such
prepayment and, second, pro  rata against the remaining scheduled
installments of principal due in respect of the Term Loans.


 


(c)                                  Each
notice of prepayment shall specify the prepayment date and the principal amount
of each Borrowing (or portion thereof) to be prepaid, shall be irrevocable and
shall commit the Borrower to prepay such Borrowing by the amount stated therein
on the date stated therein. All prepayments under this Section 2.12
shall be subject to Section 2.16, but otherwise without premium or
penalty. All prepayments under this Section 2.12 shall be
accompanied by accrued and unpaid interest on the principal amount to be
prepaid to but excluding the date of payment.


 


SECTION 2.13.
Mandatory Prepayments. (a)  In the event of any termination of all
the Revolving Credit Commitments, the Borrower shall, on the date of such
termination, repay or prepay all its outstanding Revolving Credit Borrowings
and all its outstanding Swingline Loans and replace all its outstanding Letters
of Credit and/or deposit an amount equal to the L/C Exposure in cash in a cash
collateral account established with the Collateral Agent for the benefit of the
Secured Parties, unless, in each case, if such termination arises as a result
of the actions by the Administrative Agent described in clause (i) of
the last paragraph of Article VII, the Majority Facility Lenders
with respect to the Revolving Credit Facility shall otherwise agree. If as a
result


 


41

















 


of any partial
reduction of the Revolving Credit Commitments the Aggregate Revolving Credit
Exposure would exceed the Total Revolving Credit Commitment after giving effect
thereto, then the Borrower shall, on the date of such reduction, repay or
prepay Revolving Credit Borrowings or Swingline Loans (or a combination
thereof) and/or cash collateralize Letters of Credit in an amount sufficient to
eliminate such excess.


 


(b)                                 Unless
the Majority Facility Lenders with respect to the Term Loan Facility shall
otherwise agree, not later than the third Business Day following the completion
of any Asset Sale or the occurrence of any Recovery Event (subject in each case
to all applicable reinvestment and repayment rights to the extent set forth in
the definition of “Net Cash Proceeds”), the Borrower shall apply the
Required Prepayment Percentage of the Net Cash Proceeds received with respect
thereto to prepay outstanding Term Loans in accordance with Section 2.13(f).


 


(c)                                  Unless
the Majority Facility Lenders with respect to the Term Loan Facility shall
otherwise agree, in the event and on each occasion that an Equity Issuance
occurs, the Borrower shall, substantially simultaneously with (and in any event
not later than the third Business Day next following) the occurrence of such
Equity Issuance, apply the Required Prepayment Percentage of the Net Cash
Proceeds therefrom to prepay outstanding Term Loans in accordance with Section 2.13(f).


 


(d)                                 Unless
the Majority Facility Lenders with respect to the Term Loan Facility shall
otherwise agree, in the event that any Loan Party or any subsidiary of a Loan
Party shall receive Net Cash Proceeds from the issuance or other incurrence of
Indebtedness of any Loan Party or any subsidiary of a Loan Party (other than
Indebtedness permitted pursuant to Section 6.01 (other than
pursuant to clause (A) of the proviso in Section 6.01(h) or
Section 6.01(k))), the Borrower shall, substantially simultaneously
with (and in any event not later than the third Business Day next following)
the receipt of such Net Cash Proceeds by such Loan Party or such subsidiary,
apply an amount equal to the Required Prepayment Percentage of such Net Cash
Proceeds to prepay outstanding Term Loans in accordance with Section 2.13(f).


 


(e)                                  Unless
the Majority Facility Lenders with respect to the Term Loan Facility shall
otherwise agree, no later than (i) in the case of the fiscal year of the
Borrower ending on December 31, 2005, on June 30, 2006 and (ii) in
the case of each subsequent fiscal year of the Borrower, the earlier of (x) 90
days after the end of such fiscal year and (y) the date on which the financial
statements with respect to such period are delivered pursuant to Section 5.04(a),
the Borrower shall prepay outstanding Term Loans in accordance with Section 2.13(f),
in an aggregate principal amount equal to the Required Prepayment Percentage of
Excess Cash Flow for the fiscal year then ended.


 


(f)                                    Mandatory
prepayments of outstanding Term Loans under this Agreement shall be applied pro
rata against the applicable remaining scheduled installments due in
respect of the Term Loans under Section 2.11.


 


(g)                                 The
Borrower shall deliver to the Administrative Agent, at the time of each
prepayment required under this Section 2.13, (i) a certificate
signed by a Financial Officer of the Borrower setting forth in reasonable
detail the calculation of the amount and date of such prepayment and (ii) to
the extent practicable, at least three days prior written notice of such


 


42

















 


prepayment. Each
notice of prepayment shall specify the prepayment date, the Type of each Loan
being prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings pursuant to this Section 2.13
shall be subject to Section 2.16, but shall otherwise be without
premium or penalty.


 


SECTION 2.14.
Reserve Requirements; Change in Circumstances. (a)  Notwithstanding
any other provision of this Agreement, if any Change in Law shall:


 


(i)                                     impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender, the Administrative Agent or the Issuing Bank (except any such
reserve requirement which is reflected in the Adjusted LIBO Rate) or


 


(ii)                                  impose
on any Lender, the Administrative Agent or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein,


 


and the result
of any of the foregoing shall be to increase the cost to such Lender or the Issuing
Bank of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to any Lender, the
Administrative Agent or the Issuing Bank of issuing or maintaining any Letter
of Credit or purchasing or maintaining a participation therein or to reduce the
amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise) by an amount deemed by
such Lender, the Administrative Agent or the Issuing Bank to be material, then
the Borrower will pay to such Lender, the Administrative Agent or the Issuing
Bank, as the case may be, upon demand such additional amount or amounts as
will compensate such Lender or the Issuing Bank, as the case may be, for
such additional costs incurred or reduction suffered.


 


(b)                                 If
any Lender, the Administrative Agent or the Issuing Bank shall have determined
that any Change in Law regarding capital adequacy has or would have the effect
of reducing the rate of return on such Lender’s, the Administrative Agent’s or
the Issuing Bank’s capital or on the capital of such Lender’s, the
Administrative Agent’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit purchased by, such Lender or the Letters of Credit issued by
the Issuing Bank to a level below that which such Lender, the Administrative
Agent or the Issuing Bank or such Lender’s, the Administrative Agent’s or the
Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s, the Administrative Agent’s or the
Issuing Bank’s policies and the policies of such Lender’s, the Administrative
Agent’s or the Issuing Bank’s holding company with respect to capital adequacy)
by an amount deemed by such Lender, the Administrative Agent or the Issuing
Bank to be material, then from time to time the Borrower shall pay to such
Lender, the Administrative Agent or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender, the
Administrative Agent or the Issuing Bank or such Lender’s, the Administrative
Agent’s or the Issuing Bank’s holding company for any such reduction suffered.


 


43

















 


(c)                                  A
certificate of a Lender, the Administrative Agent or the Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender, the
Administrative Agent or the Issuing Bank or its holding company, as applicable,
as specified in paragraph (a) or (b) of this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender, the Administrative Agent or the Issuing Bank,
as the case may be, the amount or amounts shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.


 


(d)                                 Failure
or delay on the part of any Lender, the Administrative Agent or the
Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s, the Administrative Agent’s or the Issuing
Bank’s right to demand such compensation; provided that the Borrower
shall not be under any obligation to compensate any Lender, the Administrative
Agent or the Issuing Bank under paragraph (a) or (b) above for
increased costs or reductions with respect to any period prior to the date that
is 270 days prior to such request if such Lender, the Administrative Agent or
the Issuing Bank knew or could reasonably have been expected to know of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would result in a claim for increased compensation by
reason of such increased costs or reductions; provided  further
that the foregoing limitation shall not apply to any increased costs or
reductions arising out of the retroactive application of any Change in Law
within such 270-day period. The protection of this Section shall be
available to each Lender, the Administrative Agent and the Issuing Bank
regardless of any possible contention of the invalidity or inapplicability of
the Change in Law that shall have occurred or been imposed.


 


SECTION 2.15.
Change in Legality. (a)  Notwithstanding any other provision of
this Agreement, if any Change in Law shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written
notice to the Borrower and to the Administrative Agent:


 


(i)                                     such
Lender may declare that Eurodollar Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be
continued for additional Interest Periods and ABR Loans will not thereafter
(for such duration) be converted into Eurodollar Loans), whereupon any request
for a Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar
Borrowing or to continue a Eurodollar Borrowing for an additional Interest
Period) shall, as to such Lender only, be deemed a request for an ABR Loan (or
a request to continue an ABR Loan as such for an additional Interest Period or
to convert a Eurodollar Loan into an ABR Loan, as the case may be), unless
such declaration shall be subsequently withdrawn; and


 


(ii)                                  such
Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such notice as
provided in paragraph (b) below.


 


In the event
any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans


 


44

















 


that would
have been made by such Lender or the converted Eurodollar Loans of such Lender
shall instead be applied to repay the ABR Loans made by such Lender in lieu of,
or resulting from the conversion of, such Eurodollar Loans. Any such conversion
of a Eurodollar Loan under (i) above shall be subject to Section 2.16.


 


(b)                                 For
purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period then applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.


 


SECTION 2.16.
Indemnity. The Borrower shall indemnify each Lender against any loss
(other than (x) any loss of margin over funding cost or (y) anticipated profit)
or expense that such Lender may sustain or incur as a consequence of (a) any
event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the
conversion of any Eurodollar Loan to an ABR Loan, or the conversion of the
Interest Period with respect to any Eurodollar Loan, in each case other than on
the last day of the Interest Period in effect therefor or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be
made pursuant to a conversion or continuation under Section 2.10)
not being made after notice of such Loan shall have been given by the Borrower
hereunder (any of the events referred to in this clause (a) being
called a “Breakage Event”) or (b) any default in the making of any
payment or prepayment required to be made hereunder. In the case of any
Breakage Event, such loss shall include an amount equal to the excess, as
reasonably determined by such Lender, of (i) its cost of obtaining funds
for the Eurodollar Loan that is the subject of such Breakage Event for the
period from the date of such Breakage Event to the last day of the Interest
Period in effect (or that would have been in effect) for such Loan over (ii) the
amount of interest likely to be realized by such Lender in redeploying the
funds released or not utilized by reason of such Breakage Event for such period.
A certificate of any Lender setting forth any amount or amounts which such
Lender is entitled to receive pursuant to this Section 2.16 shall
be delivered to the Borrower and shall be conclusive absent manifest error.


 


SECTION 2.17.
Pro Rata Treatment. Except as provided below in this Section 2.17
with respect to Swingline Loans and as required under Section 2.15,
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro  rata among the
Lenders in accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). For purposes of
determining the available Revolving Credit Commitments of the Lenders at any
time, each outstanding Swingline Loan shall be deemed to have utilized the
Revolving Credit Commitments of the Lenders (including those Lenders which
shall not have made Swingline Loans) pro  rata in accordance with
such respective Revolving Credit Commitments. Each Lender agrees that in
computing such Lender’s portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender’s percentage of
such Borrowing to the next higher or lower whole dollar amount.


 


45

















 


SECTION 2.18.
Sharing of Setoffs. Each Lender agrees that if it shall, through the
exercise of a right of banker’s lien, setoff or counterclaim against the
Borrower or any other Loan Party, or pursuant to a secured claim under Section 506
of Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, obtain payment (voluntary or involuntary) in respect of any Loan
or Loans or L/C Disbursement as a result of which the unpaid principal portion
of its Loans and participations in L/C Disbursements shall be proportionately
less than the unpaid principal portion of the Loans and participations in L/C
Disbursements of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Loans and L/C
Exposure of such other Lender, so that the aggregate unpaid principal amount of
the Loans and L/C Exposure and participations in Loans and L/C Exposure held by
each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans and L/C Exposure then outstanding as the principal amount
of its Loans and L/C Exposure prior to such exercise of banker’s lien, setoff
or counterclaim or other event was to the principal amount of all Loans and L/C
Exposure outstanding prior to such exercise of banker’s lien, setoff or
counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.18
and the payment giving rise thereto shall thereafter be recovered, such
purchase or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment restored without
interest. The Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in a Loan or L/C Disbursement
deemed to have been so purchased may exercise any and all rights of banker’s
lien, setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Lender by reason thereof as fully as if such Lender had made a
Loan directly to the Borrower in the amount of such participation.


 


SECTION 2.19.
Payments. (a)  The Borrower shall make each payment (including
principal of or interest on any Borrowing or any L/C Disbursement or any Fees
or other amounts) hereunder and under any other Loan Document not later than
12:00 (noon), New York City time, on the date when due in immediately available
dollars, without setoff, defense or counterclaim. Each such payment (other than
(i) Issuing Bank Fees, which shall be paid directly to the Issuing Bank,
and (ii) principal of and interest on Swingline Loans, which shall be paid
directly to the Swingline Lender except as otherwise provided in Section 2.22(e))
shall be made to the Administrative Agent at its offices at Eleven Madison
Avenue, New York, NY 10010. All payments hereunder and under each other Loan
Document shall be made in dollars. The Administrative Agent shall distribute
such payments to the Lenders promptly upon receipt in like funds as received.


 


(b)                                 Except
as otherwise expressly provided herein, whenever any payment (including
principal of or interest on any Borrowing or any Fees or other amounts)
hereunder or under any other Loan Document shall become due, or otherwise would
occur, on a day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of interest or Fees, if applicable.


 


46

















 


SECTION 2.20.
Taxes. (a)  Any and all payments by or
on account of any obligation of the Borrower or any other Loan Party hereunder
or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if any
Indemnified Taxes or Other Taxes are required to be withheld or deducted from
such payments, then (i) the sum payable by the Borrower shall be increased
as necessary so that after all required deductions or withholding (including
deductions or withholdings applicable to additional sums payable under this
Section) the Administrative Agent or such Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower or such other Loan Party shall
make (or cause to be made) such deductions and (iii) the Borrower or such
other Loan Party shall pay (or cause to be paid) the full amount deducted to
the relevant Governmental Authority in accordance with applicable law. In
addition, the Borrower or any other Loan Party hereunder shall pay (or cause to
be paid) any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.


 


(b)                                 The
Borrower shall jointly and severally indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or
such Lender, as the case may be, or any of their respective Affiliates, on
or with respect to any payment by or on account of any obligation of the
Borrower or any Loan Party hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority; provided that if the Borrower
determines in good faith that a reasonable basis exists for contesting any
Indemnified Taxes or Other Taxes for which an increase in the amount of such
payment is made or for which indemnification has been demanded pursuant to this
Section 2.20, such Lender or the Administrative Agent, as
applicable, shall reasonably cooperate with the Borrower in challenging such
Indemnified Taxes or Other Taxes at the Borrower’s expense if so requested by
the Borrower in writing to the extent that such cooperation is not, in the
Lender’s or the Administrative Agent’s reasonable discretion, unduly burdensome
or disadvantageous. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender, or by the Administrative Agent on its
behalf or on behalf of a Lender, shall be conclusive absent manifest error.


 


(c)                                  As
soon as practicable after any payment of Indemnified Taxes or Other Taxes
pursuant to Section 2.20(a), and in any event within 30 days of any
such payment being due, the Borrower shall deliver (or cause to be delivered)
to the Administrative Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.


 


(d)                                 Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent) such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will


 


47

















 


permit such payments to be made without withholding or at a reduced
rate; provided that such Lender is legally entitled to complete, execute
and deliver such documentation and in such Lender’s judgment such completion,
execution or delivery would not materially prejudice the legal position of such
Lender. In addition, each Foreign Lender shall (i) furnish on or before it
becomes a party to the Agreement either (a) two accurate and complete
originally executed U.S. Internal Revenue Service Form W-8BEN (or
successor form) or (b) an accurate and complete U.S. Internal Revenue
Service Form W-8ECI (or successor form), certifying, in either case, to
such Foreign Lender’s legal entitlement to an exemption or reduction from U.S.
federal withholding tax with respect to all interest payments hereunder, and (ii) provide
a new Form W8BEN (or successor form) or Form W-8ECI (or successor
form) upon the expiration or obsolescence of any previously delivered form to
reconfirm any complete exemption from, or any entitlement to a reduction in,
U.S. federal withholding tax with respect to any interest payment hereunder; provided
that any Foreign Lender that is not a “bank” within the meaning of Section 881(c)(3)(A) of
the Code and is relying on the so-called “portfolio interest exemption” shall
also furnish a “Non-Bank Certificate” in the form of Exhibit K
together with a Form W8BEN. Notwithstanding any other provision of this
paragraph, a Foreign Lender shall not be required to deliver any form pursuant
to this paragraph that such Foreign Lender is not legally able to deliver.


 


(e)                                  Any
Lender that is a United States person, as defined in Section 7701(a)(30)
of the Internal Revenue Code, and is not an exempt recipient within the meaning
of Treasury Regulations Section 1.6049-4(c) shall deliver to the
Borrower (with a copy to the Administrative Agent) two accurate and complete
original signed copies of Internal Revenue Service Form W-9, or any
successor form that such person is entitled to provide at such time in
order to comply with United States back-up withholding requirements.


 


(f)                                    Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 2.20
shall survive the payment in full of all amounts due hereunder.


 


(g)                                 In
the event that any Lender or the Administrative Agent receives a refund in
respect of Indemnified Taxes or Other Taxes as to which it has been paid
additional amounts by the Borrower pursuant to clause (a) of
this Section or indemnified by the Borrower pursuant to clause (b) of
this Section and such Lender or the Administrative Agent, as applicable, reasonably
determines that such refund is attributable to such additional amounts or
indemnification, then such Lender or the Administrative Agent, as applicable,
shall promptly notify the Administrative Agent and the Borrower and shall
within 30 Business Days after the refund is actually received remit to the
Borrower an amount as such Lender or the Administrative Agent, as applicable,
determines to be the proportion of the refunded amount as will leave such
Lender or the Administrative Agent, as applicable, after such remittance, in no
better or worse position than it would have been if the Indemnified Taxes or
Other Taxes had not been imposed and the corresponding additional amounts or
indemnification payment not been made. Nothing in this Section 2.20(g) shall
oblige any Lender or the Administrative Agent to disclose to the Borrower or
any other person any information regarding its tax affairs or tax computations
or interfere with the right of any Lender or the Administrative Agent to
arrange its tax affairs in whatever manner it thinks fit and, in particular, no
Lender or the Administrative Agent shall be under any obligation to claim
relief from its corporate profits or similar tax liability in credits or
deductions


 


48

















 


available to it and, if it does claim, the extent, order and manner in
which it does so shall be at its absolute discretion.


 


SECTION 2.21.
Assignment of Commitments Under Certain Circumstances; Duty to Mitigate.
(a)  In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any
Lender or the Issuing Bank delivers a notice described in Section 2.15,
(iii) the Borrower is required to pay any additional amount to any Lender
or the Issuing Bank or any Governmental Authority on account of any Lender or
the Issuing Bank pursuant to Section 2.20 or (iv) any Lender
does not consent to a proposed amendment, modification or waiver of this
Agreement requested by the Borrower which requires the consent of all of the
Lenders or all of the Lenders under any Facility to become effective (and which
is approved by at least the Required Lenders), the Borrower may, at its sole
expense and effort (including with respect to the processing and recordation
fee referred to in Section 9.04(b)), upon notice to such Lender or
the Issuing Bank and the Administrative Agent, require such Lender or the
Issuing Bank to transfer and assign, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all of its
interests, rights and obligations under this Agreement to an assignee that
shall assume such assigned obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of
any court or other Governmental Authority having jurisdiction, (y) solely with
respect to replacements of Lenders pursuant to clauses (i), (ii) or
(iii) of this Section, the Borrower shall have received the prior written
consent of the Administrative Agent (and, if a Revolving Credit Commitment is
being assigned, of the Issuing Bank and the Swingline Lender), which consent
shall not unreasonably be withheld or delayed, and (z) the Borrower or such
assignee shall have paid to the affected Lender or the Issuing Bank in
immediately available funds an amount equal to the sum of the principal of and
interest accrued to the date of such payment on the outstanding Loans or L/C
Disbursements of such Lender or the Issuing Bank, respectively, plus all Fees
and other amounts accrued for the account of such Lender or the Issuing Bank
hereunder (including any amounts under Section 2.14 and Section 2.16);
provided  further that, if prior to any such transfer and
assignment the circumstances or event that resulted in such Lender’s or the
Issuing Bank’s claim for compensation under Section 2.14 or notice
under Section 2.15 or the amounts paid pursuant to Section 2.20,
as the case may be, cease to cause such Lender or the Issuing Bank to
suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified in Section 2.15,
or cease to result in amounts being payable under Section 2.20, as
the case may be (including as a result of any action taken by such Lender
or the Issuing Bank pursuant to paragraph (b) below), or if such
Lender or the Issuing Bank shall waive its right to claim further compensation
under Section 2.14 in respect of such circumstances or event or
shall withdraw its notice under Section 2.15 or shall waive its
right to further payments under Section 2.20 in respect of such
circumstances or event, as the case may be, then such Lender or the
Issuing Bank shall not thereafter be required to make any such transfer and
assignment hereunder. In connection with any such replacement, if the replaced
Lender does not execute and deliver to the Administrative Agent a duly
completed Assignment and Acceptance reflecting such replacement within five
Business Days of the date on which the replacement Lender executes and delivers
such Assignment and Acceptance to the replaced Lender, then such replaced
Lender shall be deemed to have executed and delivered such Assignment and
Acceptance.


 


49

















 


(b)                                 If
(i) any Lender or the Issuing Bank shall request compensation under Section 2.14,
(ii) any Lender or the Issuing Bank delivers a notice described in Section 2.15
or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to Section 2.20,
then such Lender or the Issuing Bank shall use reasonable efforts (which shall
not require such Lender or the Issuing Bank to incur an unreimbursed loss or
unreimbursed cost or expense or otherwise take any action inconsistent with its
internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be significant) (x) to file any
certificate or document reasonably requested in writing by the Borrower or (y)
to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or
enable it to withdraw its notice pursuant to Section 2.15 or would
reduce amounts payable pursuant to Section 2.20, as the case may be,
in the future. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender or the Issuing Bank in connection with any such
filing or assignment, delegation and transfer.


 


SECTION 2.22.
Swingline Loans. (a)  Swingline Commitment. Subject to the
terms and conditions hereof and relying upon the representations and
warranties, set forth herein, the Swingline Lender agrees to make loans to the
Borrower, at any time and from time to time after the Closing Date, and until
the earlier of the Revolving Credit Maturity Date and the termination of the
Revolving Credit Commitments in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of all Swingline Loans exceeding $5,000,000 in the
aggregate or (ii) the Aggregate Revolving Credit Exposure, after giving
effect to any Swingline Loan, exceeding the Total Revolving Credit Commitment. Each
Swingline Loan shall be in a principal amount that is an integral multiple of
$250,000. The Swingline Commitment may be terminated or reduced from time
to time as provided herein. Within the foregoing limits, the Borrower may borrow,
pay or prepay and reborrow Swingline Loans hereunder, subject to the terms,
conditions and limitations set forth herein.


 


(b)                                 Swingline
Loans. The Borrower shall notify the Administrative Agent by fax, or by
telephone (confirmed by fax), not later than 12:00 p.m. (noon), New York
City time, on the day of a proposed Swingline Loan to be made to it. Such
notice shall be delivered on a Business Day, shall be irrevocable and shall
refer to this Agreement and shall specify the requested date (which shall be a
Business Day) and amount of such Swingline Loan. The Administrative Agent will
promptly advise the Swingline Lender of any notice received from the Borrower
pursuant to this paragraph (b). The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the account of
the Borrower identified in such notice promptly on the date such Swingline Loan
is so requested.


 


(c)                                  Prepayment.
The Borrower shall have the right at any time and from time to time to prepay
any Swingline Loan, in whole or in part, in a principal amount that is an
integral multiple of $250,000 (or, if all outstanding Swingline Loans are being
prepaid, the aggregate principal amount of all such outstanding Swingline
Loans), upon giving written or fax notice (or telephone notice promptly
confirmed by written or fax notice) to the Swingline Lender and to the
Administrative Agent before 12:00 (noon), New York City time, on the date of
prepayment at the Swingline Lender’s address for notices specified in the
Lender Addendum delivered by the


 


50

















 


Swingline Lender. All
principal payments of Swingline Loans shall be accompanied by accrued interest
on the principal amount being repaid to the date of payment.


 


(d)                                 Interest.
Each Swingline Loan shall be an ABR Loan and, subject to the provisions of Section 2.07,
shall bear interest as provided in Section 2.06(a).


 


(e)                                  Participations.
The Swingline Lender may by written notice given to the Administrative
Agent not later than 10:00 a.m., New York City time, on any Business Day
require the Revolving Credit Lenders to acquire participations on such Business
Day in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Revolving Credit
Lenders will participate. The Administrative Agent will, promptly upon receipt
of such notice, give notice to each Revolving Credit Lender, specifying in such
notice such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. In
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Revolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each
Revolving Credit Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Revolving Credit Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02(c) with
respect to Loans made by such Lender (and Section 2.02(c) shall
apply, mutatis  mutandis, to the payment obligations of the
Lenders under this Section) and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Lenders. The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and
not to the Swingline Lender. Any amounts received by the Swingline Lender from
the Borrower (or other party on behalf of the Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower (or other party
liable for obligations of the Borrower) of any default in the payment thereof.


 


SECTION 2.23.
Letters of Credit. (a)  General. Subject to the terms and
conditions hereof, the Borrower may request the issuance of a Letter of
Credit at any time and from time to time prior to the date that is 30 days
prior to the termination of the Revolving Credit Commitments for its own
account or for the account of any of the Subsidiary Guarantors (in which case
the Borrower and such Subsidiary Guarantor shall be co-applicants with respect
to such Letter of Credit), in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank. This Section shall not be
construed to impose an obligation upon the Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of this Agreement.


 


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(b)                                 Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions. In order to request the
issuance of a Letter of Credit (or to amend, renew or extend an existing Letter
of Credit), the Borrower shall hand deliver or fax to the Issuing Bank and the
Administrative Agent (no less than five Business Days (or such shorter period
of time acceptable to the Issuing Bank) in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of
a Letter of Credit, or identifying the Letter of Credit to be amended, renewed
or extended, the date of issuance, amendment, renewal or extension, the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c) below),
the amount of such Letter of Credit, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare such Letter
of Credit. A Letter of Credit shall be issued, amended, renewed or extended
only if, and upon issuance, amendment, renewal or extension of each Letter of
Credit the Borrower shall be deemed to represent and warrant that, after giving
effect to such issuance, amendment, renewal or extension (i) the L/C
Exposure shall not exceed $10,000,000 and (ii) the Aggregate Revolving
Credit Exposure shall not exceed the Total Revolving Credit Commitment. The
contingent reimbursement obligations of Antares Capital Corporation owing to
the issuing bank of the Existing Letters of Credit in respect of the Existing
Letters of Credit shall be entitled to all of the rights, benefits and
privileges afforded to Letters of Credit under this Agreement.


 


(c)                                  Expiration Date.
Each Letter of Credit shall expire at the close of business on the earlier of (i) the
date one year after the date of the issuance of such Letter of Credit and (ii) the
date that is five Business Days prior to the Revolving Credit Maturity Date,
unless such Letter of Credit expires by its terms on an earlier date; provided,
however, that a Letter of Credit may, upon the request of the Borrower,
include a provision whereby such Letter of Credit shall be renewed
automatically for additional consecutive periods of 12 months or less (but not
beyond the date that is five Business Days prior to the Revolving Credit
Maturity Date) unless the Issuing Bank notifies the beneficiary thereof at
least 30 days prior to the then-applicable expiration date that such Letter of
Credit will not be renewed.


 


(d)                                 Participations.
By the issuance of a Letter of Credit and without any further action on the part of
the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each
Revolving Credit Lender, and each such Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Pro Rata
Percentage of the aggregate amount available to be drawn under such Letter of
Credit, effective upon the issuance of such Letter of Credit. In consideration
and in furtherance of the foregoing, each Revolving Credit Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Pro Rata Percentage of each L/C
Disbursement made by the Issuing Bank and not reimbursed by the Borrower (or,
if applicable, another party pursuant to its obligations under any other Loan
Document) forthwith on the date due as provided in Section 2.02(f).
Each Revolving Credit Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.


 


(e)                                  Reimbursement.
If the Issuing Bank shall make any L/C Disbursement in respect of a Letter of
Credit, the Borrower shall pay to the Administrative Agent an amount equal to 


 


52

















 


such L/C Disbursement not later than two hours after the Borrower shall
have received notice from the Issuing Bank that payment of such draft will be
made, or, if the Borrower shall have received such notice later than 10:00 a.m.,
New York City time, on any Business Day, not later than 10:00 a.m., New
York City time, on the immediately following Business Day.


 


(f)                                    Obligations
Absolute. The Borrower’s obligations to reimburse L/C Disbursements as
provided in paragraph (e) above shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms
of this Agreement, under any and all circumstances whatsoever, and irrespective
of:


 


(i)                                     any
lack of validity or enforceability of any Letter of Credit or any Loan
Document, or any term or provision therein;


 


(ii)                                  any
amendment or waiver of, or any consent to departure from, all or any of the
provisions of any Letter of Credit or any Loan Document;


 


(iii)                               the
existence of any claim, setoff, defense or other right that the Borrower, any
other party guaranteeing, or otherwise obligated with, the Borrower, any
subsidiary or other Affiliate thereof or any other person may at any time
have against the beneficiary under any Letter of Credit, the Issuing Bank, the
Administrative Agent or any Lender or any other person, whether in connection
with this Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;


 


(iv)                              any
draft or other document presented under a 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;


 


(v)                                 payment
by the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit;
and


 


(vi)                              any
other act or omission to act or delay of any kind of the Issuing Bank, any
Lender, the Administrative Agent or any other person or any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of the Borrower’s obligations hereunder.


 


Without limiting the generality of the
foregoing, it is expressly understood and agreed that the absolute and
unconditional obligation of the Borrower hereunder to reimburse L/C
Disbursements will not be excused by the gross negligence or willful misconduct
of the Issuing Bank. However, the foregoing shall not be construed to excuse
the Issuing Bank from liability to the Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank’s gross negligence
or willful misconduct in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof; it is
understood that the Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further 


 


53

















 


investigation, regardless of any notice or information to the contrary
and, in making any payment under any Letter of Credit (i) the Issuing Bank’s
exclusive reliance on the documents presented to it under such Letter of Credit
as to any and all matters set forth therein, including reliance on the amount
of any draft presented under such Letter of Credit, whether or not the amount
due to the beneficiary thereunder equals the amount of such draft and whether
or not any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
order, and whether or not any other statement or any other document presented
pursuant to such Letter of Credit proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any respect whatsoever
and (ii) any noncompliance in any immaterial respect of the documents
presented under such Letter of Credit with the terms thereof shall, in each
case, be deemed not to constitute willful misconduct or gross negligence of the
Issuing Bank.


 


(g)                                 Disbursement
Procedures. The Issuing Bank shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under a
Letter of Credit. The Issuing Bank shall as promptly as possible give
telephonic notification, confirmed by fax, to the Administrative Agent and the
Borrower of such demand for payment and whether the Issuing Bank has made or
will make an L/C Disbursement thereunder; provided that any failure to
give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the applicable Lenders with
respect to any such L/C Disbursement. The Administrative Agent shall promptly
give each Revolving Credit Lender notice thereof.


 


(h)                                 Interim Interest.
If the Issuing Bank shall make any L/C Disbursement in respect of a Letter of
Credit, then, unless the Borrower shall reimburse such L/C Disbursement in full
on such date, the unpaid amount thereof shall bear interest for the account of
the Issuing Bank, for each day from and including the date of such L/C
Disbursement to but excluding the earlier of the date of payment by the
Borrower or the date on which interest shall commence to accrue thereon as
provided in Section 2.02(f), at the rate per annum that would apply
to such amount if such amount were an ABR Revolving Loan.


 


(i)                                     Resignation or
Removal of the Issuing Bank. The Issuing Bank may resign at any time
by giving 30 days’ prior written notice to the Administrative Agent, the
Lenders and the Borrower. Subject to the next succeeding paragraph, upon the
acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the
retiring Issuing Bank and the retiring Issuing Bank shall be discharged from
its obligations to issue additional Letters of Credit hereunder. At the time
such removal or resignation shall become effective, the Borrower shall pay all
accrued and unpaid fees pursuant to Section 2.05(c)(ii). The
acceptance of any appointment as the Issuing Bank hereunder by a successor
Lender shall be evidenced by an agreement entered into by such successor, in a form satisfactory
to the Borrower and the Administrative Agent, and, from and after the effective
date of such agreement, (i) such successor Lender shall have all the
rights and obligations of the previous Issuing Bank under this Agreement and
the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term “Issuing Bank” shall be deemed to refer to such successor
or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the resignation or removal of the
Issuing Bank 


 


54

















 


hereunder, the retiring Issuing Bank shall remain a party hereto and
shall continue to have all the rights and obligations of an Issuing Bank under
this Agreement and the other Loan Documents with respect to Letters of Credit
issued by it prior to such resignation or removal, but shall not be required to
issue additional Letters of Credit.


 


(j)                                     Cash
Collateralization. If any Event of Default shall occur and be continuing,
the Borrower shall, (i) on the Business Day it receives notice, if such
notice is received by 11a.m. (New York City time) on such Business Day, and (ii) within
one Business Day following the Business Day it receives notice, if such notice
is received after 11a.m. (New York City time) on such Business Day, in each
case from the Administrative Agent or the Required Lenders (or, if the maturity
of the Loans has been accelerated, Revolving Credit Lenders representing
greater than 50% of the total L/C Exposure) thereof and of the amount to be
deposited, deposit in an account with the Collateral Agent, for the ratable
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date. Such deposit shall be held by the Collateral Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Collateral Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits in Permitted
Investments, which investments shall be made at the option and sole discretion
of the Collateral Agent, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys
in such account shall (i) automatically be applied by the Administrative
Agent to reimburse the Issuing Bank for L/C Disbursements for which it has not
been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrower for the L/C
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders
representing greater than 50% of the total L/C Exposure), be applied to satisfy
the Obligations. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.


 


(k)                                  Additional Issuing
Banks. The Borrower may, at any time and from time to time with the consent
of the Administrative Agent (which consent shall not be unreasonably withheld)
and such Lender, designate one or more additional Lenders to act as an issuing
bank under the terms of the Agreement. Any Lender designated as an issuing bank
pursuant to this paragraph shall be deemed to be an “Issuing Bank” (in addition
to being a Lender) in respect of Letters of Credit issued or to be issued by
such Lender, and, with respect to such Letters of Credit, such term shall
thereafter apply to the other Issuing Bank and such Lender.


 


SECTION 2.24. Increase in Term Loan
Commitments. (a)  The Borrower may, by written notice to the
Administrative Agent from time to time, request Incremental Term Loan
Commitments in an aggregate amount not to exceed the Incremental Debt Amount
from one or more Incremental Term Lenders, which may include any existing
Lender; provided that each Incremental Term Lender, if not already a
Lender hereunder, shall be subject to the approval of the Administrative Agent
(which approval shall not be unreasonably withheld). Such notice shall set
forth (i) the amount of the Incremental Term Loan Commitments being
requested (which shall be in a minimum amount of $5,000,000 and in increments
of $1,000,000 in excess thereof (or such lesser amount as shall be approved by
the Administrative Agent)), (ii) the date 


 


55

















 


on which such Incremental Term Loan Commitments are requested to become
effective (which date shall be prior to March 15, 2010 and shall not be
less than 10 Business Days nor more than 60 days after the date of such notice)
and (iii) whether such Incremental Term Loan Commitments are to be Term
Loan Commitments or commitments to make term loans with certain terms different
from the Term Loans (“Other Term Loans”), subject to the provisions
herein.


 


(b)                                 The Borrower and each
Incremental Term Lender shall execute and deliver to the Administrative Agent
an Incremental Term Loan Assumption Agreement and such other documentation as
the Administrative Agent shall reasonably specify to evidence the Incremental
Term Loan Commitment of such Incremental Term Lender. Each Incremental Term
Loan Assumption Agreement shall specify the terms of the Incremental Term Loans
to be made thereunder; provided that, without the prior written consent
of the Required Lenders, (i) the final maturity date of any Other Term
Loans shall be no earlier than the Term Loan Maturity Date, (ii) the
average life to maturity of any Other Term Loans shall be no shorter than the
average life to maturity of the Term Loans, (iii) any Other Term Loans
shall rank pari passu in right of payment and of security with the Term Loans, (iv) any
Other Term Loans shall have such pricing as may be agreed by the Borrower
and the Persons providing such Other Term Loans (provided that, to the
extent that any yield (taking into account, among other things, the interest
rate spreads in respect of such Other Term Loans, any upfront fees paid to the
Persons providing such Other Term Loans and any prepayment fees or penalties
payable in respect of prepayments of such Other Term Loans) with respect to
such Other Term Loans shall be greater than the yield with respect to the Term
Loans at the time the applicable Incremental Term Loan Assumption Agreement is
executed and delivered plus 0.25% per annum, the yield of the Term Loans shall
be automatically increased (and/or fees shall be paid to the Lenders, as
applicable) so as to eliminated such difference) and (v) any Other Term
Loans shall otherwise be treated hereunder substantially the same as (and in
any event no more favorably than) the Term Loans. The Administrative Agent
shall promptly notify each Lender as to the effectiveness of each Incremental
Term Loan Assumption Agreement. Each of the parties hereto hereby agrees that,
upon the effectiveness of any Incremental Term Loan Assumption Agreement, this
Agreement shall be deemed amended to the extent (but only to the extent)
necessary to reflect the existence and the terms of the Incremental Term Loan
Commitment evidenced thereby; provided that any Incremental Term Loan
Assumption Agreement may, without the consent of any Lender, effect such
amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the opinion of the Administrative Agent, to effect
the provisions of this Section 2.24. Any such deemed amendment may be
memorialized in writing by the Administrative Agent with the Borrower’s consent
(not to be unreasonably withheld) and furnished to the other parties hereto.


 


(c)                                  Notwithstanding the
foregoing, no Incremental Term Loan Commitment shall become effective under
this Section 2.24 unless (i) on the date of such
effectiveness, the conditions set forth in paragraphs (b) and (c) of
Section 4.01 shall be satisfied and the Administrative Agent shall
have received a certificate to that effect dated such date and executed by a
Financial Officer of the Borrower, (ii) the Administrative Agent shall
have received legal opinions, board resolutions and other closing certificates
and documentation consistent with those delivered on the Closing Date under paragraphs
(a) and (b) of Section 4.02, as well as any
other applicable documents reasonably required by the Administrative Agent in
connection with 


 


56

















 


any such transaction, (iii) on such date, and after giving effect
to the Borrowing of Incremental Term Loans contemplated thereby and the use of
the proceeds therefrom as if made and applied on such date, the Borrower shall
be in pro forma compliance with each of the covenants contained in Sections
6.11, 6.12 and 6.13 as of the most recently ended fiscal
quarter, and (iv) no Default or Event of Default shall exist on such date
before or after giving effect to such Incremental Term Loan Commitments and the
Borrowing of Incremental Term Loans contemplated thereby and the use of the
proceeds therefrom as if made and applied on such date.


 


(d)                                 Each of the parties
hereto hereby agrees that the Administrative Agent may take any and all
actions as may be reasonably necessary to ensure that all Incremental Term
Loans (other than Other Term Loans), when originally made, are included in each
Borrowing of outstanding Term Loans on a pro rata basis. This may be
accomplished at the discretion of the Administrative Agent by requiring each
outstanding Eurodollar Term Borrowing to be converted into an ABR Term
Borrowing on the date of each outstanding Eurodollar Term Borrowing on a pro
rata basis, even though as a result thereof such Incremental Term Loan may effectively
have a shorter Interest Period than the Term Loans included in the Borrowing of
which they are a part (and notwithstanding any other provision of this
Agreement that would prohibit such an initial Interest Period). Any conversion
of Eurodollar Term Loans to ABR Term Loans made pursuant to the immediately
preceding sentence shall be subject to Section 2.16. If any
Incremental Term Loan is to be allocated to an existing Interest Period for a
Eurodollar Term Borrowing, then, subject to Section 2.07, the
interest rate applicable to such Incremental Term Loan for the remainder of
such Interest Period shall equal the Adjusted LIBO Rate for a period
approximately equal to the remainder of such Interest Period (as determined by
the Administrative Agent two Business Days before the date such Incremental
Term Loan is made) plus the Applicable Margin. In addition, to the extent any
Incremental Term Loans are not Other Term Loans, the scheduled amortization
payments under Section 2.11(a) required to be made after the
making of any Incremental Term Loans shall be ratably increased by the
aggregate principal amount of such Incremental Term Loans.


 


ARTICLE III


 


Representations
and Warranties


 


Each of Holdings and the Borrower jointly and
severally represents and warrants to the Arranger, the Administrative Agent,
the Collateral Agent, the Issuing Bank and each of the Lenders that:


 


SECTION 3.01. Organization; Powers.
Holdings, the Borrower and each of the Subsidiaries (a) is duly organized
or formed, validly existing and (if applicable) in good standing under the laws
of the jurisdiction of its organization or formation, (b) has all
requisite power and authority to own and operate its property and assets, to
lease the property it operates as lessee and to carry on its business as now
conducted and as proposed to be conducted, (c) is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is
required, except where the failure so to qualify, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect and (d) has the power and authority to execute, deliver and perform its
obligations under this Agreement, each of the other Loan Documents to which it
is or will be a party, the Acquisition Documentation to which it is or will be
a party and 


 


57

















 


each other agreement or instrument contemplated hereby or thereby to
which it is or will be a party, including, in the case of the Borrower, to
borrow hereunder, in the case of each Loan Party, to grant the Liens
contemplated to be granted by it under the Security Documents and, in the case
of each Subsidiary Guarantor, to Guarantee the Obligations as contemplated by
the Guarantee and Collateral Agreement.


 


SECTION 3.02. Authorization; No
Conflicts. The Transactions (a) have been duly authorized by all
requisite corporate, partnership or limited liability company and, if required,
stockholder, partner or member action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, or of the certificate or
articles of incorporation or other constitutive documents or by-laws of
Holdings, the Borrower or any Subsidiary, (B) any order of any
Governmental Authority or arbitrator or (C) any provision of any
indenture, material agreement or other material instrument to which Holdings,
the Borrower or any Subsidiary is a party or by which any of them or any of
their property is or may be bound, (ii) be in conflict with, result
in a breach of or constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such
indenture, agreement or other instrument or (iii) result in the creation
or imposition of any Lien upon or with respect to any property or assets now
owned or hereafter acquired by Holdings, the Borrower or any Subsidiary (other
than Liens created under the Security Documents).


 


SECTION 3.03. Enforceability. This
Agreement has been duly executed and delivered by each of Holdings and the
Borrower and constitutes, and each other Loan Document when executed and
delivered by each Loan Party party thereto will constitute, a legal, valid and
binding obligation of such Loan Party enforceable against such Loan Party in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.


 


SECTION 3.04. Governmental Approvals.
No action, consent or approval of, registration or filing with, Permit from,
notice to, or any other action by, any Governmental Authority is or will be
required in connection with the Transactions, except for (a) the filing of
UCC financing statements and filings with the United States Patent and
Trademark Office and the United States Copyright Office, (b) recordation
of the Mortgages, (c) such as have been made or obtained and are in full
force and effect and (d) such the failure of which to make or obtain,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.


 


SECTION 3.05. Financial Statements.
(a)  The Borrower has heretofore furnished to the Lenders its consolidated
balance sheets and statements of income, stockholder’s equity and cash flows as
of and for the fiscal years ended December 31, 2004 audited by and
accompanied by the opinion of KPMG LLP, independent public accountants. Such
financial statements present fairly in all material respects the financial
condition and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto disclose all material liabilities, direct or
contingent, of the Borrower and its consolidated Subsidiaries as of the dates
thereof. Such financial statements were prepared in accordance with GAAP
applied on a consistent basis.


 


58

















 


(b)                                 [RESERVED]


 


SECTION 3.06. No Material Adverse
Change. No event, change or condition has occurred since December 31,
2003 that has caused, or could reasonably be expected to cause, a Material
Adverse Effect.


 


SECTION 3.07. Title to Properties;
Possession Under Leases. (a)  Each of Holdings, the Borrower and the
Subsidiaries has good and marketable title to, or valid leasehold interests in,
all its material properties and assets (including material Real Property),
except for (i) defects in title that, in the aggregate, are not
substantial in amount and do not materially detract from the value of the
property subject thereto or materially interfere with its ability to conduct
its business as currently conducted or to utilize such properties and assets
for their intended purposes, (ii) Liens expressly permitted by Section 6.02
and (iii) leasehold interests that terminate in the ordinary course of
business in accordance with their terms and not on account of a tenant default.
Each material parcel of Real Property is free from material structural defects
and all building systems contained therein are in good working order and
condition, ordinary wear and tear excepted, suitable for the purposes for which
they are currently being used.


 


(b)                                 Each of Holdings, the
Borrower and the Subsidiaries, and, to the knowledge of the Borrower, each
other party thereto, has complied with all obligations under all leases to
which it is a party and all such leases are legal, valid, binding and in full
force and effect and are enforceable in accordance with their terms, except, in
each case, for such noncompliance or such failures to be in full force and
effect that could not reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect. Each of Holdings, the Borrower and the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases. The Borrower has delivered to the Administrative Agent true, complete
and correct copies of all leases (whether as landlord or tenant) of Real
Property existing as of the Closing Date the Borrower has promptly after
execution delivered to the Administrative Agent true, complete and correct
copies of all leases (whether as landlord or tenant) of Mortgaged Properties
executed at any time after the Closing Date.


 


(c)                                  The Borrower has
obtained all material Permits, licenses, variances and certificates (including
certificates of occupancy) required by applicable law to be obtained and
necessary to the use and operation of each parcel of Real Property, except
where the failure to have such Permit, license, certificate or variance could
not reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.


 


SECTION 3.08. Subsidiaries. Schedule 3.08
sets forth as of the Closing Date a list of all Subsidiaries, after giving
effect to the Acquisition, including each Subsidiary’s exact legal name (as
reflected in such Subsidiary’s certificate or articles of incorporation or
other constitutive documents) and jurisdiction of incorporation or formation
and the percentage ownership interest of Holdings or the Borrower (direct or
indirect) therein, and identifies each Subsidiary that is Loan Party. The
shares of capital stock or other Equity Interests so indicated on Schedule 3.08
are (where applicable) fully paid and non-assessable and are owned by Holdings
or the Borrower, directly or indirectly, free and clear of all Liens (other
than Liens expressly permitted by clauses (b) or (d) of
Section 6.02).


 


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SECTION 3.09. Litigation; Compliance
with Laws. (a) There are no actions, suits or proceedings at law or in
equity or by or before any arbitrator or Governmental Authority now pending or,
to the knowledge of Holdings or the Borrower, threatened against or affecting
Holdings, the Borrower or any Subsidiary or any business, property or rights of
any such person (i) that involve any Loan
Document or the Transactions or (ii) except as set forth on Schedule 3.09,
as to which there is a reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect.


 


(b)                                 Since the date of this
Agreement, there has been no change in the status of the matters disclosed on Schedule 3.09
that, individually or in the aggregate, has resulted in, or materially
increased the likelihood of, a Material Adverse Effect.


 


(c)                                  None of Holdings, the
Borrower or any of the Subsidiaries or any of their respective material
properties or assets is in violation of, nor will the continued operation of
their material properties and assets as currently conducted violate, any law, rule or
regulation (including any zoning, building, Environmental Law, ordinance, code
or approval or any building permits) or any restrictions of record or
agreements affecting the Mortgaged Property, or is in default with respect to
any judgment, writ, injunction, decree or order of any Governmental Authority,
where, in each case in this paragraph (c), such violation or default,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.


 


SECTION 3.10. Agreements. None of
Holdings, the Borrower or any of the Subsidiaries is in default in any manner
under any provision of any agreement or instrument, or subject to any corporate
restriction, that, individually or in the aggregate, has resulted or could reasonably
be expected to result in a Material Adverse Effect.


 


SECTION 3.11. Federal Reserve
Regulations. (a)  None of Holdings, the Borrower or any of the
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of buying or carrying Margin
Stock.


 


(b)                                 None of the
transactions contemplated by this Agreement (including the making of the Loans
and the use of the proceeds thereof, including any refinancing or retirement of
Indebtedness with the proceeds thereof) will violate or result in the violation
of any of the provisions of the Regulations of the Board, including Regulation
T, U or X. If requested by any Lender or the Administrative Agent, the Borrower
will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1
referred to in Regulation U.


 


SECTION 3.12. Investment Company Act.
None of Holdings, the Borrower or any of the Subsidiaries is an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended.


 


SECTION 3.13. Use of Proceeds. The
Borrower will use the proceeds of (a) the Term Loans funded on the
Amendment Effective Date to pay the consideration for the Proposed Domestic
Acquisition and fees and expenses related thereto and (b) any other Loans
solely for 


 


60

















 


general corporate purposes, including the Proposed Domestic
Acquisition, the Proposed Foreign Acquisition and other Permitted Acquisitions.
The Borrower will request the issuance of Letters of Credit solely to support
payment obligations incurred in the ordinary course of business by the Borrower
and the Subsidiary Guarantors.


 


SECTION 3.14. Tax Returns. Each
of Holdings, the Borrower and each of the Subsidiaries has timely filed or
timely caused to be filed all Federal, state, material local and foreign tax
returns or materials required to have been filed by it and all such tax returns
are correct and complete in all material respects. Each of Holdings, the
Borrower and each of the Subsidiaries has timely paid or timely caused to be
paid all Taxes due and payable by it and all assessments received by it, except
Taxes that are being contested in good faith by appropriate proceedings and for
which Holdings, the Borrower or such Subsidiary, as applicable, shall have set
aside on its books adequate reserves in accordance with GAAP. Each of Holdings,
the Borrower and each of the Subsidiaries has made adequate provision in
accordance with GAAP for all Taxes not yet due and payable. None of the
Holdings, the Borrower or any of the Subsidiaries intends to treat the Loans or
any of the transactions contemplated by any Loan Document as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4).


 


SECTION 3.15. No Material
Misstatements; Acquisition Documentation. Each of Holdings and the Borrower
has disclosed to the Arranger, the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which Holdings,
the Borrower or any of the Subsidiaries is subject, and all other matters known
to any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of any factual
information, report, financial statement, exhibit or schedule furnished
by or on behalf of Holdings, the Borrower or any Subsidiary to the Arranger,
the Administrative Agent or any Lender for use in connection with the
transactions contemplated by the Loan Documents or in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto, when taken as a whole, contained, contains or will contain (in each
case as of the date of its delivery to the Arranger, the Administrative Agent
or any Lender) any material misstatement of fact or omitted, omits or will omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be made, not
misleading; provided that to the extent any such information, report,
financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, each of Holdings and the Borrower
represents only that it acted in good faith and utilized assumptions believed
by management of Holdings and the Borrower to be reasonable at the time made in
the preparation of such information, report, financial statement, exhibit or
schedule (it being understood by the Lenders and the Agents that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth
therein).


 


SECTION 3.16. Employee Benefit Plans.
Each of the Borrower and each of its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of ERISA and the Tax Code and
the regulations and published interpretations thereunder. No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events, could reasonably be expected to result in a Material
Adverse Effect. The present value 


 


61

















 


of all benefit liabilities under each Benefit Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No. 87)
did not, as of December 31, 2003, exceed by more than $3,000,000 the fair
market value of the assets of such Benefit Plan, and the present value of all
benefit liabilities of all underfunded Benefit Plans (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87)
did not, as of December 31, 2003, exceed by more than $3,000,000 the fair
market value of the assets of all such underfunded Benefit Plans.


 


SECTION 3.17. Environmental Matters.
Except with respect to matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, none of
Holdings, the Borrower or any of the Subsidiaries:


 


(a)                                  has
failed to comply with any Environmental Law or to take, in a timely manner, all
actions necessary to obtain, maintain, renew and comply with any Environmental
Permit, and all such Environmental Permits are in full force and effect and not
subject to any administrative or judicial appeal;


 


(b)                                 has
become a party to any governmental, administrative or judicial proceeding or
possesses knowledge of any such proceeding that has been threatened under
Environmental Law;


 


(c)                                  has
received written notice of, become subject to, or is aware of any facts or
circumstances that could form the basis for, any Environmental Liability
other than those which have been fully and finally resolved and for which no
obligations remain outstanding;


 


(d)                                 possesses
knowledge that any Mortgaged Property (A) is subject to any Lien,
restriction on ownership, occupancy, use or transferability imposed pursuant to
Environmental Law or (B) contains or previously contained Hazardous
Materials of a form or type or in a quantity or location that could
reasonably be expected to result in any Environmental Liability;


 


(e)                                  possess
knowledge that there has been a Release or threat of Release of Hazardous Materials
at or from the Mortgaged Properties (or from any facilities or other properties
formerly owned, leased or operated by Holdings, the Borrower or any of the
Subsidiaries) in violation of, or in amounts or in a manner that could give
rise to liability under, any Environmental Law;


 


(f)                                    has
generated, treated, stored, transported, or Released Hazardous Materials from
the Mortgaged Properties (or from any facilities or other properties formerly
owned, leased or operated by Holdings, the Borrower or any of the Subsidiaries)
in violation of, or in a manner or to a location that could give rise to
liability under, any Environmental Law;


 


(g)                                 is
aware of any facts, circumstances, conditions or occurrences in respect of any
of the facilities and properties owned, leased or operated that could (A) form the
basis of any action, suit, claim or other judicial or administrative proceeding
relating to liability under or noncompliance with Environmental Law on the part of
Holdings, the 


 


62

















 


Borrower or any of the Subsidiaries or (B) interfere
with or prevent continued compliance with Environmental Laws by Holdings, the
Borrower or the Subsidiaries; or


 


(h)                                 has
pursuant to any order, decree, judgment or agreement by which it is bound or
has assumed the Environmental Liability for any Person.


 


SECTION 3.18. Insurance. Schedule 3.18
sets forth a true, complete and correct description of all insurance maintained
by or on behalf of Holdings, the Borrower and the Subsidiaries as of the
Closing Date. As of the Closing Date, such insurance is in full force and
effect and all premiums have been duly paid. Holdings, the Borrower and the
Subsidiaries are insured by financially sound and reputable insurers and such
insurance is in such amounts and covering such risks and liabilities (and with
such deductibles, retentions and exclusions) as are in the Borrower’s
reasonable judgment in accordance with normal and prudent industry practice. None
of Holdings, the Borrower or any of the Subsidiaries (a) has received
notice from any insurer (or any agent thereof) that substantial capital
improvements or other substantial expenditures will have to be made in order to
continue such insurance, the cost of which improvements or expenditures could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (b) has any reason to believe that it will not
be able to renew its existing coverage as and when such coverage expires or to
obtain similar coverage from similar insurers at a cost that could not
reasonably be expected to result in a Material Adverse Effect.


 


SECTION 3.19. Security Documents.
(a)  The Guarantee and Collateral Agreement is effective to create in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
a legal, valid, binding and enforceable security interest in the Collateral
described therein in which a security interest can be created under Article 8
or 9 of the UCC and proceeds thereof and (i) in
the case of the Pledged Collateral, upon the earlier of (A) when such
Pledged Collateral is delivered to the Collateral Agent and (B) when
financing statements in appropriate form are filed in the offices
specified on Schedule 3.19(a) and (ii) in the case of all
other Collateral described therein in which a security interest can be created
under Article 8 or 9 of the UCC (other than Intellectual Property
Collateral), when financing statements in appropriate form are filed in
the offices specified on Schedule 3.19(a), the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Secured Parties in such
Collateral in which a security interest can be created under Article 8 or
9 of the UCC and proceeds thereof, as security for the Obligations, in each
case prior and superior to the rights of any other person (except, in the case
of all Collateral other than Pledged Collateral, with respect to Liens
expressly permitted by Section 6.02 and, in the case of Pledged
Collateral, with respect to any Liens expressly permitted by clauses (b) or
(d) of Section 6.02).


 


(b)                                 Each Intellectual
Property Security Agreement is effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid, binding
and enforceable security interest in the Intellectual Property Collateral
described therein and proceeds thereof. When each Intellectual Property
Security Agreement is filed in the United States Patent and Trademark Office
and the United States Copyright Office, respectively, together with financing
statements in appropriate form filed in the offices specified in Schedule 3.19(a),
such Intellectual Property Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors thereunder in the Intellectual 


 


63

















 


Property Collateral in which a security interest may be perfected
by filing in the United States and proceeds thereof, as security for the
Obligations, in each case prior and superior in right to any other person
(except with respect to Liens expressly permitted by Section 6.02)
(it being understood that subsequent recordings in the United States Patent and
Trademark Office and the United States Copyright Office may be necessary
to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the grantors after the Closing Date).


 


(c)                                  Each of the Mortgages
is effective to create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid, binding and enforceable Lien
on, and security interest in, all of the Loan Parties’ right, title and
interest in and to the Mortgaged Property thereunder and proceeds thereof, and
when the Mortgages are filed in the offices specified on Schedule 3.19(c),
each such Mortgage shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereof in such
Mortgaged Property and proceeds thereof, as security for the Obligations, in
each case prior and superior in right to any other person (except with respect
to Liens expressly permitted by Section 6.02).


 


SECTION 3.20. Location of Real
Property. Schedule 3.20 lists completely and correctly as of
the Closing Date all Real Property and the addresses thereof, indicating for
each parcel whether it is owned or leased, including in the case of leased Real
Property, the landlord name, lease date and lease expiration date.


 


SECTION 3.21. Labor Matters. As
of the Closing Date, there are no strikes, lockouts or slowdowns against
Holdings, the Borrower or any Subsidiary pending or, to the knowledge of
Holdings or the Borrower, threatened. The hours worked by and payments made to
employees of Holdings, the Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters, except for such
violations that could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect. All payments due from
Holdings, the Borrower or any Subsidiary, or for which any claim may be
made against Holdings, the Borrower or any Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of Holdings, the Borrower or such
Subsidiary, except for such failures that could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.


 


SECTION 3.22. Intellectual Property.
Each of Holdings, the Borrower and each of the Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by
Holdings, the Borrower and the Subsidiaries does not infringe upon the rights
of any other person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.


 


SECTION 3.23. Solvency. Immediately
after the consummation of the Transactions to occur on the Closing Date and
immediately following the making of each Loan (or other extension of credit
hereunder) and after giving effect to the application of the proceeds of each
Loan (or other extension of credit hereunder), subject, in the case of any
guarantee of any Guarantor, to the terms of Section 2 of the Guarantee and
Collateral Agreement, (a) the fair value of the assets of each Loan Party,
at a fair valuation, will exceed its debts and liabilities, 


 


64

















 


subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Loan Party will be
able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (d) no Loan
Party will have unreasonably small capital with which to conduct the business
in which it is engaged as such business is now conducted and is proposed to be
conducted following the Closing Date.


 


SECTION 3.24. Senior Debt. The
Obligations constitute “Senior Debt” under and as defined in the
Subordinated Note Documents.


 


ARTICLE IV


 


Conditions of
Lending


 


The obligations of the Lenders to make Loans
and the obligations of the Issuing Bank to issue Letters of Credit are subject
to the satisfaction of the following conditions:


 


SECTION 4.01. All Credit Events. On
the date of each Borrowing, including each Borrowing of a Swingline Loan but
excluding the conversion of a Eurodollar Borrowing to an ABR Borrowing (or vice
versa) or the continuation or conversion of the Interest Period of a Eurodollar
Borrowing into another permitted Interest Period, and on the date of each
issuance, amendment, extension or renewal of a Letter of Credit (each such
event being called a “Credit Event”):


 


(a)                                  The
Administrative Agent shall have received a notice of such Borrowing as required
by Section 2.03 (or such notice shall have been deemed given in accordance
with Section 2.03) or, in the case of the issuance, amendment,
extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by Section 2.23(b) or,
in the case of the Borrowing of a Swingline Loan, the Swingline Lender and the
Administrative Agent shall have received a notice requesting such Swingline
Loan as required by Section 2.22(b).


 


(b)                                 The
representations and warranties set forth in each Loan Document shall be true
and correct in all material respects on and as of the date of such Credit Event
with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date.


 


(c)                                  At
the time of and immediately after such Credit Event, no Event of Default or
Default shall have occurred and be continuing.


 


Each Credit Event shall be deemed to
constitute a joint and several representation and warranty by each of Holdings
and the Borrower on the date of such Credit Event as to the matters specified
in paragraphs (b) and (c) of this Section 4.01.


 


65

















 


SECTION 4.02. First Credit Event.
On the Closing Date:


 


(a)                                  The
Administrative Agent shall have received a favorable written opinion dated as
of the Closing Date of (i) Mayer, Brown, Rowe & Maw LLP, special
counsel for the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent and (ii) Baker Donelson Bearman
Caldwell & Berkowitz, Mississippi real estate counsel for Holdings,
the Borrower and the Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent, and Holdings, the Borrower and the
Subsidiaries hereby request such counsel to deliver such opinions.


 


(b)                                 The
Administrative Agent shall have received (i) a copy of the certificate or
articles of incorporation or other formation documents, including all
amendments thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate as to
the good standing of each Loan Party as of a recent date, from such Secretary
of State; (ii) a certificate of the Secretary or Assistant Secretary of
each Loan Party dated the Closing Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws of such Loan Party as in
effect on the Closing Date and at all times since a date prior to the date of
the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such person is a party, in the case
of the Borrower, the borrowings hereunder, in the case of each Loan Party, the
granting of the Liens contemplated to be granted by it under the Security
Documents and, in the case of each Subsidiary Guarantor, the Guaranteeing of
the Obligations as contemplated by the Guarantee and Collateral Agreement, and
that such resolutions have not been modified, rescinded or amended and are in
full force and effect, (C) that the certificate or articles of
incorporation or other formation documents of such Loan Party have not been
amended since the date of the last amendment thereto shown on the certificate
of good standing furnished pursuant to clause (i) above and (D) as
to the incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf of
such Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to (ii) above; and (iv) such
other documents as the Administrative Agent, the Arranger, the Issuing Bank or
the Lenders may reasonably request.


 


(c)                                  The
Administrative Agent shall have received a certificate, dated the Closing Date
and signed by a Financial Officer of the Borrower, confirming compliance with
the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01.


 


(d)                                 The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by a duly authorized officer of each of Holdings and the Borrower, (ii) the
Guarantee and Collateral Agreement, executed and delivered by a duly authorized
officer of each of Holdings and the Borrower and each Subsidiary Guarantor, (iii) a Mortgage covering each of the Mortgaged
Properties (other than the Post Closing Mortgaged Property), executed and
delivered 


 


66

















 


by a duly
authorized officer of each Loan Party thereto, (iv) the Intellectual
Property Security Agreements, executed and delivered by a duly authorized
officer of each Loan Party a party thereto, (v) if requested by any Lender
pursuant to Section 2.04, a promissory note or notes conforming to
the requirements of such Section and executed and delivered by a duly
authorized officer of the Borrower and (vi) a Lender Addendum executed and
delivered by each Lender and accepted by the Borrower.


 


(e)                                  The
Collateral Agent, for the ratable benefit of the Secured Parties, shall have
been granted on the Closing Date first priority perfected Liens on the
Collateral (subject, in the case of all Collateral other than Pledged
Collateral, only to Liens expressly permitted by Section 6.02 and,
in the case of Pledged Collateral, only to Liens expressly permitted by clauses
(b) or (d) of Section 6.02) and customary
Guarantees from the Subsidiary Guarantors. The Pledged Collateral shall have
been duly and validly pledged under the Guarantee and Collateral Agreement to
the Collateral Agent, for the ratable benefit of the Secured Parties, and
certificates representing such Pledged Collateral, accompanied by instruments
of transfer and stock powers endorsed in blank, shall be in the actual
possession of the Collateral Agent. With respect to the Mortgaged Property, the
Collateral Agent shall have received such reports, documents and agreements
(including title insurance, flood insurance and surveys) as the Collateral
Agent shall reasonably request and that are customarily delivered in connection
with security interests in real property.


 


(f)                                    The
Collateral Agent shall have received a duly executed Perfection Certificate
dated on or prior to the Closing Date. The Collateral Agent shall have received
the results of a recent Lien and judgment search in each relevant jurisdiction
with respect to Holdings, the Borrower and those of the Subsidiaries that shall
be Subsidiary Guarantors or shall otherwise have assets that are included in
the Collateral, and such search shall reveal no Liens on any of the assets of
Holdings, the Borrower or any of such Subsidiaries except, in the case of
Collateral other than Pledged Collateral, for Liens expressly permitted by Section 6.02
and except for Liens to be discharged on or prior to the Closing Date pursuant
to documentation reasonably satisfactory to the Collateral Agent.


 


(g)                                 The
Acquisition and the Acquisition Transactions shall be consummated
simultaneously with the initial funding of the Loans hereunder in accordance
with applicable law; the Purchase Agreement and all other related documentation
shall be reasonably satisfactory to the Administrative Agent; the Equity
Contribution shall have been made on terms reasonably acceptable to the
Administrative Agent; the Administrative Agent shall be satisfied with the
capitalization, structure and equity ownership of Holdings and the Borrower
after giving effect to the Transactions; and the Administrative Agent shall be
reasonably satisfied with the arrangements to retain the senior management team
(it being agreed that the final execution copy of the Purchase Agreement, dated
as of the date of the Commitment Letter, is acceptable).


 


(h)                                 The
Borrower shall have received not less than $125,000,000 in gross cash proceeds
from the issuance of the Subordinated Notes in a public offering or in a Rule 144A
or other private placement. The terms and conditions of the Subordinated Notes
(including but not limited to terms and conditions relating to the interest
rate, fees, 


 


67

















 


amortization, maturity, subordination,
covenants, events of default and remedies) shall be reasonably satisfactory in
all respects to the Administrative Agent.


 


(i)                                     After
giving effect to the Transactions and the other transactions contemplated
hereby, Holdings and its subsidiaries shall have outstanding no Indebtedness or
preferred stock other than (i) the Loans and other extensions of credit
hereunder, (ii) the Subordinated Notes and (iii) other Indebtedness
to be agreed upon by the Borrower and the Administrative Agent. The Borrower (A) shall
have redeemed, defeased or otherwise acquired or retired all of its outstanding
10.875% Senior Subordinated Notes due 2008 on terms reasonably satisfactory to
the Administrative Agent and (B) shall have repaid all amounts outstanding
under the Existing Credit Facility. The Administrative Agent shall have
received satisfactory evidence that (i) the Existing Credit Facility shall
have been terminated, all amounts then due and payable or to become due and
payable (other than indemnification obligations not yet having been requested)
thereunder shall have been paid in full and all commitments and reimbursement
obligations thereunder shall have been terminated and (ii) satisfactory
arrangements shall have been made for the termination of all Liens granted in
connection therewith, in each case on terms and conditions reasonably
satisfactory to the Administrative Agent.


 


(j)                                     The
Administrative Agent shall have received (i) the financial statements
described in Section 3.05 and (ii) U.S. GAAP unaudited
consolidated balance sheets and related statements of income, stockholders’
equity and cash flows of the Borrower for (A) each
subsequent fiscal quarter ended 30 days before the Closing Date and (B) each
fiscal month after the most recent 2004 fiscal quarter for which financial
statements were received by the Administrative Agent as described above and
ended 30 days before the Closing Date.


 


(k)                                  The
Administrative Agent shall be satisfied that the Borrower’s pro  forma
Consolidated EBITDA for the four-fiscal quarter period most recently ended
prior to the Closing Date (prepared in accordance with Regulation S-X under the
Securities Act of 1933, as amended, to give pro  forma effect to
the Transactions as if they had occurred at the beginning of such four-fiscal
quarter period, together with such other adjustments as shall be reasonably
satisfactory to the Administrative Agent in an amount not to exceed $2,100,000)
(such pro  forma Consolidated EBITDA, “Pro Forma EBITDA”)
shall not be less than $35,000,000.


 


(l)                                     The
Administrative Agent shall be satisfied (i) that the Borrower’s ratio of
Senior Secured Debt on the Closing Date to Pro Forma EBITDA shall be no more
than 3.1 to 1.0 and (ii)that the Borrower’s ratio of
Funded Debt on the Closing Date to Pro Forma EBITDA shall be no more than 6.50
to 1.0.


 


(m)                               The
Administrative Agent shall have received projections of Holdings and its
subsidiaries for the years 2004 through 2010 and for the quarters beginning
with the first fiscal quarter of 2004 and through the fourth fiscal quarter of
2004, in form and substance satisfactory to the Administrative Agent.


 


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(n)                                 The
Administrative Agent shall have received a certificate from the chief financial
officer of Holdings certifying that Holdings, the Borrower and each of the
Subsidiary Guarantors, after giving effect to the Transactions and the other
transactions contemplated hereby, are solvent.


 


(o)                                 All
material governmental and third party consents and approvals with respect to
the Transactions and the other transactions contemplated hereby to the extent
required shall have been obtained, all applicable appeal periods shall have
expired and there shall be no litigation, governmental, administrative or
judicial action, actual or threatened, that could reasonably be expected to
restrain, prevent or impose materially burdensome conditions on the
Transactions or the other transactions contemplated hereby.


 


(p)                                 The
Administrative Agent shall have received all documentation and other
information required by bank regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the
U.S.A. Patriot Act.


 


SECTION 4.03. Amendment Effective
Date. The obligations of the Lenders, the Issuing Bank and the
Administrative Agent under this Agreement shall become effective upon the
satisfaction of the following conditions:


 


(a)                                  The
Administrative Agent shall have received a favorable written opinion dated as
of the Amendment Effective Date of Mayer, Brown, Rowe & Maw LLP,
special counsel for the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent, and Holdings, the Borrower and the
Subsidiaries hereby request such counsel to deliver such opinion.


 


(b)                                 The
Administrative Agent shall have received (i) a copy of the certificate or
articles of incorporation or other formation documents, including all
amendments thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate as to
the good standing of each Loan Party as of a recent date, from such Secretary
of State; (ii) a certificate of the Secretary or Assistant Secretary of
each Loan Party dated the Amendment Effective Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of such Loan Party
as in effect on the Amendment Effective Date, (B) in the case of the
Borrower, that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the execution,
delivery and performance of the Loan Documents to which it is a party, the
borrowings hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation or other formation documents of the
Borrower have not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to clause (i) above
and (D) as to the incumbency and specimen signature of each officer of the
Borrower executing any Loan Document or any other document delivered in
connection herewith on behalf of the Borrower; (iii) a certificate of
another officer as to the incumbency and specimen 


 


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signature of the Secretary or Assistant
Secretary of the Borrower executing the certificate pursuant to (ii) above.


 


(c)                                  The
Administrative Agent shall have received a certificate, dated the Amendment
Effective Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and
(c) of Section 4.01.


 


(d)                                 The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by a duly authorized officer of each of Holdings and the Borrower and
(ii) an Affirmation and Consent to the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of each of Holdings, the
Borrower and each Subsidiary Guarantor.


 


SECTION 4.04. Funding Date. On
the Funding Date:


 


(a)                                  The
Proposed Domestic Acquisition shall be consummated simultaneously with the funding
of the Additional Term Loans in accordance with applicable law; all
documentation related to the Proposed Domestic Acquisition shall be reasonably
satisfactory to the Administrative Agent; and the Administrative Agent shall be
satisfied with the capitalization, structure and equity ownership of Holdings
and the Borrower after giving effect to the Transactions.


 


(b)                                 The
Administrative Agent shall have received a pro  forma consolidated
balance sheet and related pro  forma consolidated statements of
income and cash flows of the Borrower as of and for the twelve-month period
ending on the last day of the most recently completed four-fiscal quarter
period, prepared after giving effect to the Proposed Domestic Acquisition as if
such acquisition had occurred as of such date (in the case of such balance
sheet) or at the beginning of such period (in the case of such other financial
statements), which financial statements shall not be materially inconsistent
with the forecasts previously provided to the Administrative Agent.


 


(c)                                  The
Administrative Agent shall have received a duly executed and delivered
notarized modification to each existing Mortgage in form and substance
satisfactory to the Administrative Agent 
and, with respect to each such mortgage modification, endorsements to
the title insurance policy insuring the Mortgage being so modified in form and
substance reasonably acceptable to the Administrative Agent.


 


(d)                                 All
material governmental and third party consents and approvals with respect to
the Proposed Domestic Acquisition and the other transactions contemplated
thereby to the extent required shall have been obtained, all applicable appeal
periods shall have expired and there shall be no litigation, governmental,
administrative or judicial action, actual or threatened, that could reasonably
be expected to restrain, prevent or impose materially burdensome conditions on
the Proposed Domestic Acquisition or the other transactions contemplated
thereby.


 


(e)                                  Credit
Suisse shall have received all fees required to be paid on or before the
Funding Date pursuant to the Amendment Fee Letter and the Administrative Agent 


 


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shall have been reimbursed by the Borrower
for its reasonable out-of-pocket expenses, as set forth in the Amendment Fee
Letter, in connection with this Agreement, including the reasonable fees and
disbursements of counsel.


 


ARTICLE V


 


Affirmative
Covenants 


 


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


 


SECTION 5.01. Existence; Businesses
and Properties. (a)  Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence, except
as otherwise expressly permitted under Section 6.05.


 


(b)                                 Do or cause to be done
all things necessary to obtain, preserve, renew, extend and keep in full force
and effect the rights, licenses, permits, franchises, authorizations, patents,
copyrights, trademarks and trade names material to the conduct of its business;
maintain and operate such business in substantially the manner in which it is
presently conducted and operated; comply in all material respects with all
applicable laws, rules, regulations and decrees and orders of any Governmental
Authority, whether now in effect or hereafter enacted; and at all times
maintain and preserve all property material to the conduct of such business and
keep such property in good repair, working order and condition and from time to
time make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at
all times.


 


SECTION 5.02. Insurance. Keep its
insurable properties adequately insured at all times by financially sound and
reputable insurers; maintain such other insurance, to such extent and against
such risks (and with such deductibles, retentions and exclusions) as is
customary with companies in the same or similar businesses operating in the
same or similar locations, including liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it;
maintain such other insurance as may be required by law; and maintain such
other insurance as otherwise required by the Security Documents.


 


SECTION 5.03. Obligations and Taxes.
Pay its Material Indebtedness promptly and in accordance with their terms and
pay and discharge promptly when due all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
in respect of its property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise that, if unpaid, could reasonably be expected to give rise to a Lien
upon such properties or any part thereof; provided, however,
that such payment and discharge shall not be required with respect to any such
tax, assessment, 


 


71

















 


charge, levy or claim so long as the validity or amount thereof shall
be contested in good faith by appropriate proceedings and the Borrower or the
applicable Subsidiary shall have set aside on its books adequate reserves with
respect thereto in accordance with GAAP and such contest operates to suspend
collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien and, in the case of a Mortgaged Property, there is no
reasonable risk of forfeiture of such property.


 


SECTION 5.04. Financial Statements,
Reports, etc. In the case of the Borrower, furnish to the Administrative
Agent for distribution to each Lender:


 


(a)                                  within
90 days after the end of each fiscal year (beginning with the fiscal year
ending on December 31, 2004), its consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close of
such fiscal year and the results of its operations and the operations of such
Subsidiaries during such year, together with comparative figures for the
immediately preceding fiscal year, all audited by KPMG LLP or other independent
public accountants of recognized national standing and accompanied by an
opinion of such accountants (which shall not be qualified in any material
respect) to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;


 


(b)                                 within
45 days after the end of each of the first three fiscal quarters of each fiscal
year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Borrower and its consolidated Subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such
Subsidiaries during such fiscal quarter and the then elapsed portion of the fiscal
year, and comparative figures for the same periods in the immediately preceding
fiscal year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of the Borrower
and its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;


 


(c)                                  (i) concurrently
with any delivery of financial statements under paragraph  (a) above, a letter from the accounting firm
opining on such statements (which letter may be limited to accounting
matters or other items that independent certified public accountants are
permitted to cover in such letters pursuant to their professional standards and
customs and may disclaim responsibility for legal interpretations) stating
whether, in connection with their audit examination, anything has come to their
attention which would cause them to believe that there has been a violation of
any of the provisions of Section 6.10, 6.11, 6.12 or 6.13
of this Agreement or, if any such a violation has occurred, specifying the
nature thereof; provided that no such letter shall be required to the
extent that (x) it is prohibited at such time by the then current
recommendations of the American Institute of Certified Public Accountants or
any other applicable accounting governing body or (y) such accounting firm has
at such time a firm-wide policy prohibiting the delivery of such a letter and
such firm does not at such time provide such letters in connection with any
other credit agreements, (ii) concurrently with any delivery 


 


72

















 


of financial statements under paragraph (a) above,
a certificate of a Financial Officer of the Borrower identifying the assets
transferred to the Foreign Target during such fiscal year and setting forth the
Borrower’s election pursuant to paragraph (b)(i)(II)(b)(i) of Section 6.05
and (iii) concurrently with any delivery of financial statements under paragraph
(a) or (b) above, a certificate of a Financial Officer of
the Borrower (A) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred, specifying
the nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (B) setting forth computations in
reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with the covenants contained in Sections 6.11, 6.12
and 6.13 and, in the case of a certificate delivered with the financial
statements required by paragraph (a) above with respect to the
fiscal year ending December 31, 2005 and each fiscal year thereafter,
setting forth the Borrower’s calculation of Excess Cash Flow;


 


(d)                                 at
least 90 days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a projected
consolidated balance sheet and related statements of projected operations and
cash flows as of the end of and for such following fiscal year and setting
forth the assumptions used for purposes of preparing such budget) and, promptly
when available, any significant revisions of such budget;


 


(e)                                  promptly
after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by Holdings, the Borrower
or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission;


 


(f)                                    promptly
after the receipt thereof by Holdings, the Borrower or any of the Subsidiaries,
a copy of any “management letter” (in final form) received by any such person
from its certified public accountants and the management’s response thereto;
and


 


(g)                                 promptly,
from time to time, such other information regarding the operations, business
affairs and financial condition of Holdings, the Borrower or any Subsidiary, or
compliance with the terms of any Loan Document, as the Administrative Agent or
any Lender (acting through the Administrative Agent) may reasonably
request.


 


SECTION 5.05.
Litigation and Other Notices. Furnish to the Administrative Agent, the
Issuing Bank and each Lender written notice of the following promptly after any
Responsible Officer obtains knowledge thereof:


 


(a)                                  any
Event of Default or Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect thereto;


 


(b)                                 the
filing or commencement of, or any threat or notice of intention of any person
to file or commence, any action, suit or proceeding, whether at law or in
equity or by or before any arbitrator or Governmental Authority, against
Holdings, the Borrower or any Subsidiary that involves, in the Borrower’s good
faith judgment, a reasonable 


 


73

















 


possibility of an adverse determination and
which, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect; and


 


(c)                                  the
occurrence of any ERISA Event described in clause (b) of the
definition thereof or any other ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result
in liability of Holdings, the Borrower and the Subsidiaries in an aggregate amount
of $5,000,000 or greater; and


 


(d)                                 any
development that has resulted in, or could reasonably be expected to result in,
a Material Adverse Effect.


 


SECTION 5.06. Information Regarding
Collateral. (a)  Furnish to each of the Administrative Agent and the
Collateral Agent (i) prompt written notice of any change (A) in any
Loan Party’s corporate name, (B) in any Loan Party’s corporate structure
or (C) in any Loan Party’s Federal Taxpayer Identification Number and (ii) on
the date of delivery of financial statements and certificates required by Section 5.04(a),
written notice of any change, if any, in the location of Collateral with a fair
market value (as determined by the Borrower) in excess of $1,000,000. Each of
Holdings and the Borrower agrees not to effect or permit any change referred to
in the preceding sentence unless all filings have been made (or will have been
made within 30 days of such change) under the UCC or otherwise and all other
actions have been taken (or will have been taken within 30 days of such change)
that are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. Each of Holdings and the Borrower also agrees promptly to
notify each of the Administrative Agent and the Collateral Agent if any
material portion of the Collateral is damaged or destroyed.


 


(b)                                 In the case of the
Borrower, each year, unless otherwise agreed by the Administrative Agent to
extend such time, at the time of delivery of the annual financial statements
with respect to the preceding fiscal year pursuant to Section 5.04(a),
deliver to the Administrative Agent a certificate of a Financial Officer
setting forth the information required pursuant to Section I of the
Perfection Certificate.


 


SECTION 5.07. Maintaining Records;
Access to Properties and Inspections. Keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and all
requirements of law are made of all dealings and transactions in relation to
its business and activities. Each of Holdings and the Borrower will, and will
cause each of its subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender to visit and inspect (including with respect
to environmental matters) the financial records and the properties of Holdings
or the Borrower, as the case may be, or any of its subsidiaries at
reasonable times (but, in the case of any Lenders, not more than one time each
year for all Lenders and at such Lenders’ expense, unless an Event of Default
is continuing) and to make extracts from and copies of such financial records,
and permit any representatives designated by the Administrative Agent or any
Lender (acting through the Administrative Agent) to discuss the affairs,
finances and condition of Holdings or the Borrower, as the case may be, or
any of its subsidiaries with the officers thereof and independent accountants
therefor; provided that the Borrower shall be given an opportunity to
have a designated representative present at any 


 


74

















 


discussions with such independent accountants if available at such time
and shall be given at least five Business Days’ notice of such discussions.


 


SECTION 5.08. Use of Proceeds. Use
the proceeds of the Loans and request the issuance of Letters of Credit only
for the purposes set forth in Section 3.13.


 


SECTION 5.09. Additional Collateral,
etc. (a)  With respect to any Collateral acquired after the Closing
Date or, in the case of inventory or equipment, any material Collateral moved
after the Closing Date by the Borrower or any other Loan Party (other than any
Collateral described in paragraphs (b), (c) or (d) of
this Section) as to which the Collateral Agent, for the benefit of the Secured
Parties, does not as a result of such acquisition or move have a first priority
perfected security interest (subject to Liens expressly permitted by Section 6.02),
promptly (and, in any event, within 20 days following the date of such
acquisition) (i) execute and deliver to the Administrative Agent and the
Collateral Agent such amendments to the Guarantee and Collateral Agreement or
such other Security Documents as the Collateral Agent deems necessary or
advisable to grant to the Collateral Agent, for the benefit of the Secured
Parties, a security interest in such Collateral and (ii) promptly
following the Administrative Agent’s or the Collateral Agent’s request, take
all actions necessary or advisable to grant to, or continue on behalf of, the
Collateral Agent, for the benefit of the Secured Parties, a perfected first
priority security interest (subject to Liens expressly permitted by Section 6.02)
in such Collateral, including the filing of UCC financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement
or by law or as may be requested by the Administrative Agent or the
Collateral Agent.


 


(b)                                 With respect to any
(x) fee interest in any Collateral consisting of material Real Property (as
determined by Administrative Agent and (y) lease of Collateral consisting of
Real Property with an annual base rent in excess of $2,500,000 after the
expiration of any rent abatement or free rent period, acquired or leased after
the Closing Date by the Borrower or any other Loan Party and promptly (and, in
any event, within 20 days following the date of such acquisition, in the case
of clause (x)) (i) execute and deliver or, in the case of clause
(y), use commercially reasonable efforts to execute and deliver, a first
priority (subject to Liens expressly permitted by Section 6.02)
Mortgage in favor of the Collateral Agent, for the benefit of the Secured
Parties, covering such Real Property and complying with the provisions herein
and in the Security Documents, (ii) provide or, in the case of clause
(y), use commercially reasonable efforts to provide, the Secured Parties
with title and extended coverage insurance in an amount at least equal to the
purchase price of such Real Property (or such other amount as the
Administrative Agent shall reasonably specify), surveys, and if applicable,
flood insurance, lease estoppel certificates or, in the event that the
Administrative Agent has determined that a recorded memorandum of lease or an
amendment of lease is necessary or appropriate in order to make any such leased
Real Property mortgageable, evidence of such recordation or a copy of such
fully executed and binding lease amendment, all as may be reasonably
requested by the Administrative Agent, (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent and the Collateral
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory
to the Administrative Agent and the Collateral Agent and (iv) deliver to
the Administrative Agent a notice identifying, and upon the Administrative
Agent’s request and subject to any contractual restrictions contained therein,
provide a copy of, the consultant’s reports, 


 


75

















 


environmental site assessments or other documents relied upon by the
Borrower or any other Loan Party to determine that any such Real Property
included in such Collateral does not contain Hazardous Materials of a form or
type or in a quantity or location that could reasonably be expected to result
in a material Environmental Liability. Holdings or the Borrower shall use
commercially reasonable efforts to deliver to the Administrative Agent estoppel
certificates from the landlord with respect to each leased Mortgaged Property,
confirming the nonexistence of any default thereunder and certain other
information with respect to such lease, each of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent.


 


(c)                                  With respect to any
Subsidiary (other than an Excluded Foreign Subsidiary or a Receivables
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph, shall include any existing Subsidiary that ceases to be an
Excluded Foreign Subsidiary at any time after the Closing Date) by the Borrower
or any of the Subsidiaries, promptly (and, in any event, within 20 days
following such creation or the date of such acquisition) (i) execute and
deliver to the Administrative Agent and the Collateral Agent such amendments or
supplements to the Guarantee and Collateral Agreement as the Administrative
Agent or the Collateral Agent deems necessary or advisable to grant to the Collateral
Agent, for the benefit of the Secured Parties, a valid, perfected first
priority security interest (subject to Liens expressly permitted by clauses (b) or
(d) of Section 6.02) in the Equity Interests in such
new Subsidiary that are owned by the Borrower or any of the Subsidiaries, (ii) deliver
to the Collateral Agent the certificates, if any, representing such Equity
Interests, together with undated stock powers, in blank, executed and delivered
by a duly authorized officer of the Borrower or such Subsidiary, as the case may be,
(iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement (and provide Guarantees of the Obligations)
and the Intellectual Property Security Agreements and (B) to take such
actions necessary or advisable to grant to the Collateral Agent, for the
benefit of the Secured Parties, a perfected first priority security interest
(subject to Liens expressly permitted by Section 6.02) in the
Collateral described in the Guarantee and Collateral Agreement and the
Intellectual Property Security Agreement with respect to such new Subsidiary,
including the recording of instruments in the United States Patent and
Trademark Office and the United States Copyright Office and the filing of UCC
financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement, the Intellectual Property Security
Agreement or by law or as may be requested by the Administrative Agent or
the Collateral Agent and (iv) if requested by the Administrative Agent,
deliver to the Administrative Agent and the Collateral Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent and the Collateral Agent.


 


(d)                                 With respect to any
Excluded Foreign Subsidiary created or acquired after the Closing Date directly
by the Borrower or any of its Domestic Subsidiaries, promptly (and, in any
event, within 60 days following such creation or the date of such acquisition) (i) execute
and deliver to the Administrative Agent and the Collateral Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent or the Collateral Agent deems necessary or advisable in order to grant to
the Collateral Agent, for the benefit of the Secured Parties, a perfected first
priority security interest (subject to Liens expressly permitted by clauses (b) or
(d) of Section 6.02) in the Equity Interests in such
new Excluded Foreign Subsidiary that is directly owned by the Borrower or any
of its Domestic Subsidiaries (provided that in no event shall more 


 


76

















 


than 65% of the total outstanding voting Equity Interests in any such
new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver
to the Collateral Agent the certificates (if applicable) representing such
Equity Interests, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Domestic
Subsidiary, as the case may be, and take such other action as may be
necessary or, in the opinion of the Administrative Agent or the Collateral
Agent, desirable to perfect the security interest of the Collateral Agent
thereon and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent and the Collateral Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Administrative Agent and the
Collateral Agent.


 


SECTION 5.10. Further Assurances.
From time to time duly authorize, execute and deliver, or cause to be duly
authorized, executed and delivered, such additional instruments, certificates,
financing statements, agreements or documents, and take all such actions
(including filing UCC and other financing statements), as the Administrative
Agent or the Collateral Agent may reasonably request, for the purposes of
implementing or effectuating the provisions of this Agreement and the other
Loan Documents, or of more fully perfecting or renewing the rights of the
Administrative Agent, the Collateral Agent and the Secured Parties with respect
to the Collateral (or with respect to any additions thereto or replacements or
proceeds or products thereof or with respect to any other property or assets
hereafter acquired by Holdings, the Borrower or any Subsidiary which may be
deemed to be part of the Collateral) pursuant hereto or thereto. Upon the
exercise by the Administrative Agent, the Collateral Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, each of Holdings and the Borrower
will execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Administrative Agent, the Collateral Agent or such Lender may be required
to obtain from Holdings, the Borrower or any of the Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.


 


SECTION 5.11. Interest Rate
Protection. The Borrower
shall ensure that for at least three years following the Closing Date no less
than 50% of the Borrower’s long-term Indebtedness (excluding any Revolving
Loans, Swingline Loans and Letters of Credit) effectively bears interest at a
fixed rate, either by its terms or through the Borrower entering into, as
promptly as practicable (and in any event no later than the 180th day after the
Closing Date), Hedging Agreements reasonably acceptable to the Administrative
Agent.


 


ARTICLE VI


 


Negative
Covenants 


 


Each of Holdings and the Borrower covenants
and agrees with each Lender that, so long as this Agreement shall remain in
effect and until the Commitments have been terminated and the principal of and
interest on each Loan, all Fees and all other expenses or amounts payable under
any Loan Document have been paid in full and all Letters of Credit have been
cancelled or have expired and all amounts drawn thereunder have been reimbursed
in full, neither Holdings nor the Borrower will, nor will it cause or permit
any of the Subsidiaries to:


 


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SECTION 6.01. Indebtedness.
Incur, create, assume or permit to exist any Indebtedness, except:


 


(a)                                  Indebtedness
existing on the Closing Date and set forth in Schedule 6.01 and any
Permitted Refinancing Indebtedness in respect of any such Indebtedness;


 


(b)                                 Indebtedness
created hereunder and under the other Loan Documents (including any Incremental
Term Loans);


 


(c)                                  unsecured
intercompany Indebtedness of Holdings, the Borrower and the Subsidiaries to the
extent permitted by Section 6.04(a) or Section 6.04(i) so
long as such Indebtedness is subordinated to the Obligations pursuant to an
Affiliate Subordination Agreement;


 


(d)                                 Indebtedness
of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets; provided
that (i) such original Indebtedness is incurred prior to or within 120
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness
permitted by this Section 6.01(d), when combined with the aggregate
principal amount of all Capital Lease Obligations and Synthetic Lease
Obligations incurred pursuant to Section 6.01(e), shall not exceed
$25,000,000 at any time outstanding;


 


(e)                                  Capital
Lease Obligations and Synthetic Lease Obligations in an aggregate principal
amount, when combined with the aggregate principal amount of all Indebtedness
incurred pursuant to Section 6.01(d), not exceeding $25,000,000 at
any time outstanding;


 


(f)                                    Indebtedness
of the Borrower under the Subordinated Notes and Indebtedness of the Subsidiary
Guarantors under any Guarantees in respect of the Subordinated Notes and any
Permitted Refinancing Indebtedness in respect of any such Indebtedness;


 


(g)                                 Indebtedness
of any person that becomes a Subsidiary after the Closing Date hereof; provided
that (i) such Indebtedness exists at the time such person becomes a
Subsidiary and is not created in contemplation of or in connection with such
person becoming a Subsidiary, (ii) immediately before and after such
person becomes a Subsidiary, no Default or Event of Default shall have occurred
and be continuing and (iii) the aggregate
principal amount of Indebtedness permitted by this Section 6.01(g) shall
not exceed $7,500,000 at any time outstanding;


 


(h)                                 unsecured
Indebtedness of the Borrower or the Subsidiary Guarantors that is subordinated
to the Obligations to the same degree (or to a greater degree) as the
Subordinated Notes, in each case (i) that does not mature, and is not
subject to mandatory repurchase, redemption or amortization (other than
pursuant to customary asset sale or change of control provisions requiring
redemption or repurchase only if and to the extent permitted by this Agreement)
prior to the date that is six months after the Term Loan Maturity Date and (ii) that
is not exchangeable or convertible into Indebtedness of the 


 


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Borrower or any Subsidiary (other than other
Indebtedness permitted by this clause) or any preferred stock or other Equity
Interest (other than common equity); provided that either (A) the
Net Cash Proceeds thereof are used to refinance Term Loans or refinance and
permanently reduce commitments in respect of Revolving Loans or (B) the
proceeds thereof are used to consummate a Permitted Acquisition or an
Investment permitted pursuant to Section 6.04(k) (including
financing the cash consideration payable in connection with a Permitted
Acquisition or such an Investment or refinancing any Indebtedness of the
Acquired Entity and the payment of related fees and expenses); provided,
further, that the aggregate principal amount of Indebtedness permitted
by clause (B) of this Section 6.01(h) shall
not exceed $5,000,000 at any time outstanding;


 


(i)                                     Indebtedness
under performance, surety, appeal or indemnity bonds or with respect to workers’
compensation claims, in each case incurred in the ordinary course of business;


 


(j)                                     Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient funds in
the ordinary course of business; provided that such Indebtedness is
promptly covered by the Borrower or any Subsidiary;


 


(k)                                  Indebtedness
of a Receivables Subsidiary in respect of Securitization Transactions solely to
the extent the Net Cash Proceeds thereof are used to refinance Term Loans or
refinance and permanently reduce commitments in respect of Revolving Loans; provided
that the aggregate principal amount of Indebtedness permitted by this Section 6.01(k)
shall not exceed $15,000,000 at any time outstanding;


 


(l)                                     Indebtedness
incurred by Foreign Subsidiaries in an aggregate principal amount not exceeding
$12,500,000 at any time outstanding;


 


(m)                               to
the extent constituting Indebtedness of the Borrower or any Subsidiary,
customary indemnification or deferred purchase price adjustments, including
wholly contingent earn-outs or similar obligations, in each case incurred in
connection with the acquisition of any business or assets, including Equity
Interests, permitted to be acquired hereunder; provided that the maximum
aggregate liability in respect of all such obligations permitted by this clause
(m) shall not exceed 25% of the purchase price for such acquisitions;


 


(n)                                 Permitted
Holdings Indebtedness; and


 


(o)                                 other
Indebtedness (including subordinated Indebtedness) of the Borrower or the
Subsidiaries in an aggregate principal amount not exceeding $20,000,000 at any
time outstanding; provided that the aggregate principal amount of such
Indebtedness permitted by this Section 6.01(o) that is incurred by
a Loan Party that is secured shall not exceed $2,000,000 at any time
outstanding.


 


SECTION 6.02. Liens. Create,
incur, assume or permit to exist any Lien on any property or assets (including
Equity Interests or other securities of any person, including any 


 


79

















 


Subsidiary) now owned or hereafter acquired by it or on any income or
revenues or rights in respect of any thereof, except:


 


(a)                                  Liens
on property or assets of the Borrower and the Subsidiaries existing on the
Closing Date and set forth in Schedule 6.02; provided that
such Liens shall secure only those obligations which they secure on the Closing
Date and refinancings, extensions, renewals and replacements thereof permitted
hereunder;


 


(b)                                 any
Lien created under the Loan Documents (including in respect of Hedging
Agreements that are permitted by the terms of the Security Documents to be
secured thereunder);


 


(c)                                  any
Lien existing on any property or asset prior to the acquisition thereof by the
Borrower or any Subsidiary; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition, (ii) such
Lien does not apply to any other property or assets of the Borrower or any
Subsidiary and (iii) such Lien does not materially interfere with the use,
occupancy and operation of any Mortgaged Property;


 


(d)                                 Liens
for taxes not yet due or which are being contested in compliance with Section 5.03;


 


(e)                                  carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business and securing obligations that are
not overdue for a period of more than 30 days or which are being contested in
compliance with Section 5.03;


 


(f)                                    pledges
and deposits made in the ordinary course of business in compliance with workmen’s
compensation, unemployment insurance and other social security laws or
regulations;


 


(g)                                 pledges
and deposits to secure the performance of bids, trade contracts (other than for
Indebtedness), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business;


 


(h)                                 zoning
restrictions, easements, rights-of-way, restrictions on use of Real Property
and other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and do not materially
detract from the value of the property subject thereto or interfere with the
ordinary conduct of the business of the Borrower or any of the Subsidiaries or
the ability of the Borrower or any of the Subsidiaries to utilize such property
for its intended purpose;


 


(i)                                     purchase
money security interests in Real Property, improvements thereto or other fixed
or capital assets hereafter acquired (or, in the case of improvements,
constructed) by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by Section 6.01, (ii) such
security interests are incurred, and the Indebtedness secured thereby is
created, within 90 days after such acquisition (or 


 


80

















 


construction) and (iii) such security
interests do not apply to any other property or assets of the Borrower or any
Subsidiary;


 


(j)                                     judgment
Liens securing judgments not constituting an Event of Default under Article VII;


 


(k)                                  any
interest or title of a lessor, sublessor or licensor under any lease (including
a capital lease or synthetic lease) or license entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business and covering only
the assets so leased or licensed, as the case may be, and including any
Liens arising from precautionary UCC financing statements filed under any such
lease;


 


(l)                                     Liens
on cash deposits and other funds maintained with a depositary institution, in
each case arising in the ordinary course of business by virtue of any statutory
or common law provision relating to banker’s liens, including Section 4-210
of the UCC;


 


(m)                               Liens
of sellers of goods to the Borrower or any of the Subsidiaries arising under Section 2-502
of the UCC in the ordinary course of business; provided that such Liens
apply only to the goods sold and secure only the unpaid purchase price for such
goods and related expenses;


 


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


 


(o)                                 Liens
arising from an agreement by the Borrower or any of the Subsidiaries to Dispose
of any asset in accordance with the provisions hereof; provided that
such Liens apply only to the assets to be Disposed of;


 


(p)                                 Liens
in connection with Securitization Transactions permitted by Section 6.01(k)
on the assets that are the subject of such Securitization Transactions; provided
that such Liens apply only to assets in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable;


 


(q)                                                                                      Liens
on assets owned or leased by the Foreign Target securing not more than
$12,500,000 of Indebtedness at any time outstanding; and


 


(r)                                    Liens
not otherwise permitted by this Section 6.02 so long as neither (i) the
aggregate outstanding principal amount of the obligations secured thereby nor (ii) the
aggregate fair market value of the assets subject thereto exceeds $2,000,000 at
any one time.


 


SECTION 6.03. Sale and Lease-Back
Transactions. Enter into any arrangement, directly or indirectly, with any
person whereby it shall sell or transfer any property, real or personal or
mixed, used or useful in its business, whether now owned or hereafter acquired,
and thereafter rent or lease such property or other property which it intends
to use for substantially the same purpose or purposes as the property being
sold or transferred unless (a) the sale of such property 


 


81

















 


is permitted by Section 6.05 and (b) any Capital Lease
Obligations, Synthetic Lease Obligations or Liens arising in connection
therewith are permitted by Sections 6.01 and 6.02, respectively.


 


SECTION 6.04. Investments, Loans and
Advances. Purchase, hold or acquire any Equity Interests, evidences of
indebtedness or other securities of, make or permit to exist any loans or
advances or capital contributions to, or make or permit to exist any investment
or any other interest in, any other person (all of the foregoing, “Investments”),
except:


 


(a)                                  (i) Investments
by Holdings, the Borrower and the Subsidiaries existing on the Closing Date in
the Equity Interests of, or in the form of loans or advances to, the
Borrower and the Subsidiaries and (ii) additional Investments by Holdings,
the Borrower and the Subsidiaries in the Equity Interests of, or in the form of
loans or advances to, the Borrower and the Subsidiaries; provided that (A) any
such Equity Interests held by a Loan Party shall be pledged pursuant to the
Guarantee and Collateral Agreement (subject to the limitation referred to in Section 5.09(d) in
the case of any Excluded Foreign Subsidiary), (B) in the case of clause
(ii), the aggregate amount of additional Investments by Loan Parties in
Subsidiaries that are not Subsidiary Guarantors (including the Foreign Target)
shall not exceed $30,000,000 (unless otherwise reduced by the amount of Asset
Sales to the Foreign Target pursuant to Section 6.05(b)(i)) at any
time outstanding and (C) if such Investment shall be in the form of a
loan or advance, such loan or advance shall be unsecured and subordinated to
the Obligations pursuant to an Affiliate Subordination Agreement and, if such
loan or advance shall be made by a Loan Party, it shall be evidenced by a
promissory note pledged to the Collateral Agent for the ratable benefit of the
Secured Parties pursuant to the Guarantee and Collateral Agreement (provided
that this clause (C) shall not apply to the loans and advances made
and to be made to Jineng pursuant to the commitments existing on the Closing
Date or to the Foreign Target);


 


(b)                                 Permitted
Investments;


 


(c)                                  Investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business;


 


(d)                                 the
Borrower and the Subsidiaries may make loans and advances in the ordinary
course of business to their respective employees so long as the aggregate
principal amount thereof at any time outstanding (determined without regard to
any write-downs or write-offs of such loans and advances) shall not exceed
$2,000,000;


 


(e)                                  the
Acquisition and Permitted Acquisitions;


 


(f)                                    Investments
existing on the Closing Date and set forth on Schedule 6.04;


 


(g)                                 extensions
of trade credit in the ordinary course of business;


 


(h)                                 Investments
made as a result of the receipt of non-cash consideration from a Disposition of
any asset in compliance with Section 6.05;


 


82

















 


(i)                                     intercompany
loans and advances to Holdings to the extent that the Borrower may pay
dividends to Holdings pursuant to Section 6.06 (and in lieu of
paying such dividends); provided that such intercompany loans and
advances (i) shall be made for the purposes, and shall be subject to all the
applicable limitations set forth in, Section 6.06
and (ii) shall be unsecured and subordinated to the Obligations pursuant
to an Affiliate Subordination Agreement;


 


(j)                                     Investments
made by any person that becomes a Subsidiary after the Closing Date; provided
that (i) such Investments exist at the time such person becomes a
Subsidiary and are not made in contemplation of or in connection with such
person becoming a Subsidiary and (ii) at the time such person becomes a
Subsidiary no portion of such Investments may represent a commitment or
other obligation to make or fund any additional Investment that has not been
made on funded at such time; and


 


(k)                                  in
addition to Investments permitted by paragraphs (a) through (j)
above, additional Investments by the Borrower and the Subsidiaries so long as
the aggregate amount invested, loaned or advanced pursuant to this clause
(determined without regard to any write-downs or write-offs of such
investments, loans and advances) does not exceed $15,000,000 in the aggregate.


 


SECTION 6.05. Mergers,
Consolidations, Sales of Assets and Acquisitions. (a)  Merge into or
consolidate with any other person, or permit any other person to merge into or
consolidate with it, or liquidate or dissolve, or Dispose of (in one transaction
or in a series of transactions) all or substantially all the assets
(whether now owned or hereafter acquired) of the Borrower or less than all the
Equity Interests of any Subsidiary, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or substantially all of
the assets of any other person, except for (i) the purchase and sale by
the Borrower or any Subsidiary of inventory or the Disposition of obsolete or
worn-out assets, assets that are no longer useful or scrap, in each case in the
ordinary course of business, (ii) the sale or discount by the Borrower or
any Subsidiary, in each case without recourse and in the ordinary course of
business, of overdue accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof
consistent with customary industry practice (and not as part of any bulk
sale or financing transaction), (iii) sales of accounts receivable or
interests therein and other customary assets in Securitization Transactions
permitted under Section 6.01(k), (iv) the Disposition by any
Subsidiary that is not a Loan Party of its assets that do not constitute
Collateral in connection with a foreclosure by the applicable lenders with
respect to any Indebtedness of such Subsidiary to the extent that such assets
are collateral security for such Indebtedness, (v) the licensing of
intellectual property in the ordinary course of business, (vi) the
settlement, release or surrender of tort or other litigation claims and (vii) if
at the time thereof and immediately after giving effect thereto no Event of
Default or Default shall have occurred and be continuing, (x) the merger or
consolidation of any wholly-owned Subsidiary into or with the Borrower in a
transaction in which the Borrower is the surviving corporation, (y) the merger
or consolidation of any Subsidiary into or with any other Subsidiary in a
transaction in which the surviving entity is a Subsidiary (provided that
(A) the Borrower shall own, directly or indirectly, beneficially and of
record, Equity Interests representing a percentage of the 


 


83

















 


aggregate ordinary voting power and aggregate equity value represented
by the issued and outstanding Equity Interest in such surviving Subsidiary that
is equal to or greater than the percentage of the aggregate ordinary voting
power and the aggregate equity value represented by the issued and outstanding
Equity Interests that were owned immediately prior to such merger or
consolidation, directly or indirectly, beneficially and of record, by the
Borrower in such other merged or consolidated Subsidiary, (B) if any party
to any such transaction is a Loan Party, the surviving entity of such
transaction shall be a Loan Party, (C) if any party to any such
transaction is a Domestic Subsidiary, the surviving entity of such transaction
shall be a Domestic Subsidiary and (D) if any
person other than the Borrower or a wholly-owned Subsidiary receives any
consideration in connection with such transaction, such transaction shall
comply with the provisions of Section 6.04, if applicable) and (z)
Permitted Acquisitions or other Investments by the Borrower or any Subsidiary
that are expressly permitted by Section 6.04.


 


(b)                                 Engage in any Asset
Sale otherwise permitted under paragraph (a) above unless


 


(i)                                     in
the case of other than Exempted Asset Sales, (A) such Asset Sale is
for consideration at least 75% of which is cash (and no portion of the
remaining consideration shall be in the form of Indebtedness of the
Borrower or any Subsidiary), (B) such
consideration is at least equal to the fair market value of the assets being
Disposed of and (C) the fair market value of all assets Disposed of
pursuant to this paragraph (b)(i) shall not exceed


 


(I)                                    $2,000,000
in any fiscal year, or


 


(II)                                (a) in
the case of other than the Foreign Target, $7,500,000 in the aggregate and (b) in
the case of the Foreign Target, in the aggregate, an amount equal to (i) at
the Borrower’s election (as set forth in a certificate delivered to the
Administrative Agent pursuant to Section 5.04(c)(ii)), either (x)
the aggregate amount of Capital Expenditures permitted for the Foreign Target
pursuant to Section 6.10(b) or (y) the amount of Investments
made to the Foreign Target pursuant to Section 6.04(a) minus (ii) the fair market value (determined in good
faith by the Borrower) of assets transferred to the Foreign Target; or


 


(ii)                                  such
Asset Sale is a Permitted Asset Swap; or


 


(iii)                               in
the case of Exempted Asset Sales, the aggregate cash consideration and the
value (determined in good faith by the Borrower) of the non-cash consideration
received does not exceed $5,000,000.


 


SECTION 6.06. Restricted Payments;
Restrictive Agreements. (a)  Declare or make, or agree to declare or
make, directly or indirectly, any Restricted Payment (including pursuant to any
Synthetic Purchase Agreement), or incur any obligation (contingent or
otherwise) to do so; provided, however, that (i) any
Subsidiary may declare and pay dividends or make other distributions,
including in the form of additional Equity Interests, ratably to its
equity holders, (ii) so long as no Event of
Default or Default shall have occurred and be continuing or would result
therefrom, the Borrower may, or may pay dividends or make other
distributions to Holdings so that Holdings may, repurchase its Equity Interests
owned by employees of Holdings, the Borrower or the Subsidiaries or make
payments to employees of Holdings, the Borrower or the Subsidiaries upon
termination of employment in connection with the exercise of stock 


 


84

















 


options, stock appreciation rights or similar equity incentives or
equity based incentives pursuant to management incentive plans or in connection
with the death or disability of such employees or make customary and reasonable
salary and bonus and other benefits payments to officers, employees and
consultants of Holdings or payments of customary fees and expenses of members
of the board of directors of Holdings in an aggregate amount for this clause
(ii) not to exceed $1,500,000 in any fiscal year (it being agreed that
any such amount not utilized in any fiscal year may be carried forward and
utilized in any subsequent fiscal year so long as the aggregate amount of such
repurchases or payments pursuant to this clause (ii) shall not
exceed $3,000,000 in any fiscal year), (iii) the Borrower may make
Restricted Payments to Holdings (x) in an amount not to exceed, when taken
together with the aggregate amount of all loans or advances made pursuant to Section 6.04(i) for
such purpose, $1,000,000 in any fiscal year to the extent necessary to pay
general corporate and overhead expenses incurred by Holdings in the ordinary
course of business and (y) in an amount necessary to pay the Tax liabilities of
Holdings directly attributable to (or arising as a result of) the operations of
the Borrower and the Subsidiaries pursuant to the Tax Sharing Agreement, as
such agreement exists on the Closing Date and with such changes after the
Closing Date as may be approved by the Administrative Agent; provided
that all Restricted Payments made to Holdings pursuant to clause (iii) shall
be used by Holdings for the purpose specified herein within 20 days of the
receipt thereof, (iv) so long as no Event of Default or Default shall have
occurred and be continuing or would result therefrom, the Borrower may pay
dividends or make other distributions to Holdings so that Holdings may pay
those fees, costs and expenses that are expressly permitted by clause (c) of
Section 6.07 and (v) so long as no Event of Default or Default
shall have occurred and be continuing or would result therefrom, the Borrower may make
Restricted Payments to Holdings, and Holdings may, in turn, make such Restricted
Payments to its equity holders so long as (A) the Borrower would be in
compliance with the covenants set forth in Sections 6.11 and 6.13
and the Leverage Ratio would be 3.25 to 1.00 or less, in each case, as of the
most recently completed period ending prior to such transaction for which the
financial statements and certificates required by Section 5.04(a) or
5.04(b) were required to be delivered or for which comparable
financial statements have been filed with or furnished to the Securities and
Exchange Commission, after giving pro  forma effect to such
transaction and to any other event occurring after such period as to which pro
forma recalculation is appropriate as if such transaction had occurred
as of the first day of such period and (B) at the time of, after giving
effect to, such transaction, there shall be at least $7,500,000 of unused and
available Revolving Credit Commitments.


 


(b)                                 Enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (i) the ability of Holdings, the Borrower or
any Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets, or (ii) the ability of any Subsidiary to pay dividends
or other distributions with respect to any of its Equity Interests or to make
or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided
that (A) the foregoing shall not apply to restrictions and conditions
imposed by law or by any Loan Document, (B) the foregoing shall not apply
to customary restrictions and conditions contained in agreements relating to
the sale of a Subsidiary or its assets pending such sale, provided such
restrictions and conditions apply only to the Subsidiary or its assets that are
to be sold and such sale is permitted hereunder, (C) the foregoing shall
not apply to restrictions and conditions imposed on any Subsidiary that is not
a Loan Party by the terms of any Indebtedness of such Subsidiary permitted to
be incurred hereunder, (D) clause (i) of the foregoing shall
not apply to 


 


85

















 


restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (E) clause
(i) of the foregoing shall not apply to restrictions or conditions
imposed by the Subordinated Note Documents as in effect on the Closing Date and
(F) clause (i) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.


 


SECTION 6.07. Transactions with
Affiliates. Except for transactions by or among Loan Parties or
transactions with the Foreign Target pursuant to Sections 6.01, 6.04,
6.05 and 6.10, sell or transfer any property or assets to, or
purchase or acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except that (a) Holdings, the Borrower or any Subsidiary may engage
in any of the foregoing transactions in the ordinary course of business at
prices and on terms and conditions not less favorable to Holdings, the Borrower
or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) Restricted Payments may be made to the
extent provided in Section 6.06, (c) so long as no Event of
Default or Default shall have occurred and be continuing or would result
therefrom, fees may be paid to the Sponsor or any of its Affiliates in an
aggregate amount not to exceed $1,500,000 in any fiscal year plus all
reasonable out-of-pocket costs and expenses and indemnification amounts
incurred by the Sponsor or any such Affiliate, in each case in connection with
their performance of management, consulting, monitoring, financial advisory or
other services with respect to Holdings, the Borrower and the Subsidiaries, (d) payments
may be made under the Tax Sharing Agreement, as such agreement exists on
the Closing Date and with such changes after the Closing Date as may be
approved by the Administrative Agent, and (e) the Transactions may be
consummated, including the making of any payments on the Closing Date in
connection therewith.


 


SECTION 6.08. Business of Holdings,
the Borrower and Subsidiaries; Limitation on Hedging Agreements. (a) 
With respect to Holdings, engage in any business activities or have any assets
or liabilities other than (i) its ownership of the Equity Interests in the
Borrower, (ii) liabilities incidental thereto, including its liabilities
pursuant to the Loan Documents, and (iii) Permitted Holdings Indebtedness.


 


(b)                                 With respect to the
Borrower and the Subsidiaries, engage at any time in any business or business
activity other than a Permitted Business.


 


(c)                                  Enter into any
Hedging Agreement other than (a) any such agreement or arrangement entered
into in the ordinary course of business and consistent with prudent business
practice to hedge or mitigate risks to which the Borrower or any Subsidiary is
exposed in the conduct of its business or the management of its liabilities or (b) any
such agreement entered into to hedge against fluctuations in interest rates or
currency incurred in the ordinary course of business and consistent with
prudent business practice; provided that in each case such agreements or
arrangements shall not have been entered into for speculation purposes.


 


SECTION 6.09. Other Indebtedness and
Agreements; Amendments to Acquisition Documentation. (a)  Permit any
waiver, supplement, modification, amendment, termination or release of any
indenture, instrument or agreement pursuant to which any Material Indebtedness
of any Loan Party is outstanding if the effect of such waiver, supplement,
modification, 


 


86

















 


amendment, termination or release would materially increase the
obligations of the obligor or confer additional material rights on the holder
of such Indebtedness in a manner adverse to any Loan Party or the Lenders.


 


(b)                                 (i)  Make any
distribution, whether in cash, property, securities or a combination thereof,
other than regular scheduled payments of principal and interest as and when due
(to the extent not prohibited by applicable subordination provisions), in
respect of, or pay, or offer or commit to pay, or directly or indirectly
(including pursuant to any Synthetic Purchase Agreement) redeem, repurchase,
retire or otherwise acquire for consideration, or set apart any sum for
the aforesaid purposes, any Indebtedness that is subordinated to the
Obligations, including the Subordinated Notes.


 


(c)                                  (i)  Permit any
waiver, supplement, modification, amendment, termination or release of, or fail
to enforce strictly the terms and conditions of, any of the indemnities made in
favor of Holdings, the Borrower and the Subsidiaries pursuant to the
Acquisition Documentation such that after giving effect thereto such
indemnities shall be materially less favorable to the interests of the Loan
Parties or the Secured Parties with respect thereto or (ii) otherwise
permit any waiver, supplement, modification, amendment, termination or release
of, or fail to enforce strictly the terms and conditions of, any of the
Acquisition Documentation except to the extent that such waiver, supplement,
modification, amendment, termination or release or failure to enforce could not
reasonably be expected to have a Material Adverse Effect.


 


SECTION 6.10. Capital Expenditures. Permit the aggregate amount of Capital
Expenditures made by the Borrower and the Subsidiaries to exceed (a) in
the case of other than by the Foreign Target, $5,000,000 in any fiscal year; provided
that the amount of permitted Capital Expenditures set forth above in respect of
any fiscal year commencing with the fiscal year ending on December 31, 2005,
shall be increased (but not decreased) by (i) the amount of unused Capital
Expenditures permitted pursuant to this clause (a) for the
immediately preceding fiscal year less (ii) an amount equal to unused
Capital Expenditures under this clause (a) carried forward to such
preceding fiscal year, and (b) in the case of the Foreign Target,
$10,000,000 (unless otherwise reduced by the amount of Asset Sales to the
Foreign Target pursuant to Section 6.05(b)(i)) per each fiscal year
2006, 2007 and 2008 (provided, that the amount of Capital Expenditures
incurred pursuant to this clause (b) shall not exceed $25,000,000
(unless otherwise reduced by the amount of Asset Sales to the Foreign Target
pursuant to Section 6.05(b)(i)) at any time outstanding during the
term of this Agreement).


 


SECTION 6.11. Interest Coverage Ratio.
After December 31, 2005, permit the Interest Coverage Ratio on the last
day of any fiscal quarter during any period set forth below to be less than the
ratio set forth opposite such period below: 


 


	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2006 through March 31,
  2007

  	
   

  	
  1.70 to 1.00

  	
   

  
	
  April 1, 2007 through June 30,
  2007

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  July 1, 2007 through September 30,
  2007

  	
   

  	
  1.80 to 1.00

  	
   

  
	
  October 1, 2007 through December 31,
  2007

  	
   

  	
  1.85 to 1.00

  	
   

  
	
  January 1, 2008 through December 31,
  2008

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  Thereafter

  	
   

  	
  2.25 to 1.00

  	
   

  



 


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SECTION 6.12. Leverage Ratio.
After December 31, 2005, permit the Leverage Ratio on the last day of any
fiscal quarter during any period set forth below to be greater than the ratio
set forth opposite such period below:


 


	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2006 through June 30,
  2007

  	
   

  	
  6.95 to 1.00

  	
   

  
	
  July 1, 2007 through September 30,
  2007

  	
   

  	
  6.75 to 1.00

  	
   

  
	
  October 1, 2007 through December 31,
  2007

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  January 1, 2008 through December 31,
  2008

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  January 1, 2009 through December 31,
  2009

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  Thereafter

  	
   

  	
  4.50 to 1.00

  	
   

  



 


SECTION 6.13. Fixed Charge Coverage
Ratio. After December 31, 2005, permit the Fixed Charge Coverage Ratio
on the last day of any fiscal quarter during any period set forth below to be
less than the ratio set forth opposite such period below: 


 


	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2006 through March 31,
  2007

  	
   

  	
  1.25 to 1.00

  	
   

  
	
  April 1, 2007 through June 30,
  2007

  	
   

  	
  1.30 to 1.00

  	
   

  
	
  July 1, 2007 through September 30,
  2007

  	
   

  	
  1.35 to 1.00

  	
   

  
	
  Thereafter

  	
   

  	
  1.40 to 1.00

  	
   

  



 


SECTION 6.14. Fiscal Year. With respect to Holdings or the
Borrower, change its fiscal year-end to a date other than December 31.


 


ARTICLE VII


 


Events of
Default 


 


SECTION 7.01. In case of the happening
of any of the following events (“Events of Default”):


 


(a)                                  any
representation or warranty made or deemed made in or in connection with any
Loan Document or the Borrowings or issuances of Letters of Credit hereunder, or
any representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in connection
with or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or furnished;


 


(b)                                 default
shall be made in the payment of any principal of any Loan or the reimbursement
with respect to any L/C Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;


 


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(c)                                  default
shall be made in the payment of any interest on any Loan or L/C Disbursement or
any Fee or any other amount (other than an amount referred to in (b) above)
due under any Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of three Business Days;


 


(d)                                 default
shall be made in the due observance or performance by Holdings, the Borrower or
any Subsidiary of any covenant, condition or agreement contained in Section 5.01(a),
5.05 or 5.08 or in Article VI;


 


(e)                                  default
shall be made in the due observance or performance by Holdings, the Borrower or
any Subsidiary of any covenant, condition or agreement contained in any Loan
Document (other than those specified in clauses (b), (c) or (d) above)
and such default shall continue unremedied for a period of 30 days following
the earlier of (i) knowledge thereof by a Responsible Officer of a Loan
Party and (ii) written notice thereof by the Administrative Agent or any
Lender to a Loan Party;


 


(f)                                    Holdings,
the Borrower or any Subsidiary shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Material Indebtedness,
when and as the same shall become due and payable (after giving effect to any
applicable grace period), or (ii) any other event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or
any trustee or agent on its or their behalf to cause any Material Indebtedness
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that this clause
(ii) shall not apply to secured Indebtedness that becomes due as a result
of the voluntary sale or transfer of the property or assets securing such
Indebtedness;


 


(g)                                 an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect
of Holdings, the Borrower or any Subsidiary, or of a substantial part of
the property or assets of Holdings, the Borrower or a Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any Subsidiary or
for a substantial part of the property or assets of Holdings, the Borrower
or a Subsidiary or (iii) the winding-up or liquidation of Holdings, the
Borrower or any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;


 


(h)                                 Holdings,
the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal, state
or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings, the Borrower 


 


89

















 


or any Subsidiary or for a substantial part of
the property or assets of Holdings, the Borrower or any Subsidiary, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;


 


(i)                                     one
or more judgments for the payment of money in an aggregate amount in excess of
$5,000,000 (excluding therefrom any amount covered by insurance as to which the
applicable insurer has acknowledged in writing its obligation to cover) shall
be rendered against Holdings, the Borrower, any Subsidiary or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon assets or properties
of Holdings, the Borrower or any Subsidiary to enforce any such judgment;


 


(j)                                     an
ERISA Event described in clause (b) of the definition thereof shall
have occurred or any other ERISA Event shall have occurred that, when taken
together with all other such ERISA Events, could reasonably be expected to
result in liability of the Borrower and its ERISA Affiliates in an aggregate
amount exceeding $5,000,000;


 


(k)                                  any
Guarantee under the Guarantee and Collateral Agreement for any reason shall
cease to be in full force and effect (other than in accordance with its terms),
or any Guarantor shall deny in writing that it has any further liability under
its Guarantee (other than as a result of the discharge of such Guarantor in
accordance with the terms of the Loan Documents);


 


(l)                                     any
Lien purported to be created under any Security Document shall cease to be, or
shall be asserted by the Borrower or any other Loan Party not to be, a valid,
perfected and, with respect to the Secured Parties, first priority (except as
otherwise expressly provided in this Agreement or such Security Document) Lien
on any material Collateral covered thereby, except to the extent that any such
loss of perfection or priority results from the failure of the Collateral Agent
to maintain possession of certificates representing Equity Interests pledged
under the Guarantee and Collateral Agreement; or


 


(m)                               there
shall have occurred a Change in Control;


 


then, and in every such event (other than an event with respect to
Holdings or the Borrower described in paragraph (g) or (h) above),
and at any time thereafter during the continuance of such event either or both
of the following actions may be taken: (i) the Administrative Agent
may, and at the request of the Majority Facility Lenders with respect to the
Revolving Credit Facility shall, by notice to the Borrower, terminate forthwith
the Revolving Credit Commitments and the Swingline Commitment and (ii) the
Administrative Agent may, and at the request of the Required Lenders shall,
declare the Loans then outstanding to be forthwith due and payable in whole or
in part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall become forthwith due 


 


90

















 


and payable, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary notwithstanding,
and the Administrative Agent and the Collateral Agent shall have the right to
take all or any actions and exercise any remedies available to a secured party
under the Security Documents or applicable law or in equity; and in any event
with respect to Holdings or the Borrower described in paragraph (g) or
(h) above, the Revolving Credit Commitments and the Swingline
Commitment shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding, and the Administrative Agent and
the Collateral Agent shall have the right to take all or any actions and
exercise any remedies available to a secured party under the Security Documents
or applicable law or in equity. The Majority Facility Lenders with respect to
the Revolving Credit Facility may, by notice to the Administrative Agent,
rescind a termination of the Revolving Credit Commitments and the Swingline
Commitment described in clause (i) above in this paragraph and the
Required Lenders may, by notice to the Administrative Agent, rescind an
acceleration of the Loans described in clause (ii) above in this
paragraph.


 


Notwithstanding anything to the contrary contained in this Section 7.01,
in the event the Borrower fails to comply with any financial covenant contained
in Sections 6.11, 6.12, or 6.13 Holdings shall have the
right, no later than ten (10) Business Days after the delivery of the
financial statements and certificates required by Section 5.04(a) or
(b), as applicable, with respect to such applicable fiscal quarter, to issue
Cure Securities for cash in an aggregate amount not in excess of the lesser of
(x) the minimum amount necessary to cure the relevant failure to comply with
such financial covenant and (y) $15,000,000, the net cash proceeds of which
shall be contributed to the common equity capital of the Borrower
(collectively, the “Cure Right”), and upon the receipt by the Borrower
of such cash (the “Cure Amount”), such financial covenant shall be
recalculated giving effect to the following pro forma adjustments:


 


(a) 
Consolidated EBITDA shall be increased, in accordance with the definition
thereof, solely for the purpose of measuring such financial covenant and not
for any other purpose under this Agreement (for the avoidance of doubt,
Consolidated EBITDA shall only be adjusted for the purposes of the quarterly
tests pursuant to Sections 6.11, 6.12 and 6.13 and shall
not be increased for purposes of determining any other covenant or definition
which incorporates such covenants), by an amount equal to the Cure Amount;


 


(b) if,
after giving effect to the foregoing recalculations, the Borrower shall then be
in compliance with the requirements of such financial covenant, the Borrower
shall be deemed to have satisfied the requirements of such financial covenant
as of the relevant date of determination with the same effect as though there
had been no failure to comply therewith at such date, and the applicable breach
or default of such financial covenant which had occurred shall be deemed not to
have occurred in the first instance for all purposes of this Agreement and the
Loan Documents;


 


91

















 


(c) to
the extent that the Cure Amount proceeds are used to repay Indebtedness, such
Indebtedness shall not be deemed to have been repaid for purposes of
calculating the financial covenants set forth in Sections 6.11, 6.12
and 6.13 for the period with respect to which such Compliance
Certificate applies; and


 


(d)  to
the extent a fiscal quarter ended for which such financial covenant is
initially recalculated as a result of a Cure Right is included in the
calculation of a financial covenant in a subsequent fiscal period, the Cure
Amount shall be included in the amount of Consolidated EBITDA for such initial
fiscal quarter;


 


provided that the
Cure Rights shall not be exercised more than twice in any four quarter period.


 


ARTICLE VIII


 


The Agents and
the Arranger 


 


Each of the Lenders and the Issuing Bank
hereby irrevocably appoints each of the Administrative Agent and the Collateral
Agent (for purposes of this Article VIII, the Administrative Agent
and the Collateral Agent are referred to collectively as the “Agents”)
its agent and authorizes the Agents to take such actions on its behalf and to
exercise such powers as are delegated to such Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. Without limiting the generality of the foregoing, the Agents are
hereby expressly authorized by the Lenders to execute any and all documents
(including releases and the Security Documents) with respect to the Collateral
and the rights of the Secured Parties with respect thereto, as contemplated by
and in accordance with the provisions of this Agreement and the Security
Documents.


 


Each bank serving as an Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not an Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with Holdings, the Borrower or any Subsidiary or
any of their respective Affiliates as if it were not an Agent hereunder.


 


No Agent shall have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) no Agent shall be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) no Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent or the
Collateral Agent is required to exercise in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.08), and (c) except as
expressly set forth in the Loan Documents, no Agent shall have any duty to
disclose, nor shall it be liable for the failure to disclose, any information
relating to Holdings, the Borrower or any of the Subsidiaries that is
communicated to or obtained by the bank serving as any Agent or any of its
Affiliates in any capacity. The Administrative Agent and the Collateral Agent
shall not be liable for any action 


 


92

















 


taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08) or
in the absence of its own gross negligence or willful misconduct. No Agent shall
be deemed to have knowledge of any Default unless and until written notice
thereof is given to such Agent by Holdings, the Borrower or a Lender, and no
Agent shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth
in Article IV or elsewhere in any Loan Document, other than to
confirm receipt of items expressly required to be delivered to such Agent.


 


Each Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper person. Each
Agent may also rely upon any statement made to it orally or by telephone
and believed by it to have been made by the proper person, and shall not incur
any liability for relying thereon. Each Agent may consult with legal
counsel (who may be counsel for Holdings or the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.


 


Each Agent may perform any and all
its duties and exercise its rights and powers by or through any one or more
sub-agents appointed by it. Each Agent and any such sub-agent may perform any
and all its duties and exercise its rights and powers by or through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of each
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.


 


Subject to the appointment and acceptance of
a successor Agent as provided below, each Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation of the Administrative Agent or the Collateral Agent, the Required
Lenders shall have the right to appoint a successor, subject to the Borrower’s
approval (not to be unreasonably withheld or delayed) so long as no Default or
Event of Default shall have occurred and be continuing. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor Agent which shall be a bank with an office in
New York, New York, or an Affiliate of any such bank. Upon the acceptance of
its appointment as Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Agent’s resignation
hereunder, the provisions of this Article and Section 9.05
shall continue in effect for the benefit of such retiring Agent, its sub-agents
and 


 


93

















 


their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while acting as Agent.


 


Each of the Arranger, the Syndication Agent
and each Documentation Agent, in its capacity as such, shall have no duties or
responsibilities, and shall incur no liability, under this Agreement or any
other Loan Document.


 


Each Lender acknowledges that it has,
independently and without reliance upon the Agents, the Arranger, the
Syndication Agent, each Documentation Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agents,
the Arranger, the Syndication Agent, each Documentation Agent or any other
Lender and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement or any other Loan Document, any
related agreement or any document furnished hereunder or thereunder.


 


To the extent required by any applicable law,
the Administrative Agent may withhold from any interest payment to any
Lender an amount equivalent to any applicable withholding tax. If the Internal
Revenue Service or any other Governmental Authority asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender because the appropriate form was not delivered
or was not properly executed or because such Lender failed to notify the
Administrative Agent of a change in circumstance which rendered the exemption
from, or reduction of, withholding tax ineffective or for any other reason,
such Lender shall indemnify the Administrative Agent fully for all amounts
paid, directly or indirectly, by the Administrative Agent as tax or otherwise,
including any penalties or interest and together with all expenses (including
legal expenses, allocated internal costs and out-of-pocket expenses) incurred.


 


ARTICLE IX


 


Miscellaneous 


 


SECTION 9.01. Notices. Notices
and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by fax, as follows:


 


(a)                                  if
to Holdings or the Borrower, to it at True Temper Sports, Inc., 8275
Tournament Drive, Suite 200, Memphis, TN 38125, Attention of President and
Chief Financial Officer (Fax No. (901) 746-2162), with a copy to Andrew
Mattei, Esq. at Mayer, Brown, Rowe & Maw LLP, 1675 Broadway, New
York, NY 10019 (Fax No. (212) 849-5572);


 


(b)                                 if
to the Administrative Agent or the Collateral Agent, to Credit Suisse, Eleven
Madison Avenue, New York, NY 10010, Attention of Loan Services Manager (Fax No. (212)
325-8304); and


 


94

















 


(c)                                  if
to a Lender, to it at its address (or fax number) set forth in the Lender
Addendum or the Assignment and Acceptance pursuant to which such Lender shall
have become a party hereto.


 


All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by fax or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 9.01.


 


SECTION 9.02. Survival of Agreement.
All covenants, agreements, representations and warranties made by Holdings or
the Borrower herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and the
Issuing Bank and shall survive the making by the Lenders of the Loans and the
issuance of Letters of Credit by the Issuing Bank, regardless of any
investigation made by the Lenders or the Issuing Bank or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not been terminated.
The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, the Arranger, any Lender or
the Issuing Bank.


 


SECTION 9.03. Binding Effect.
This Agreement shall become effective in accordance with the provisions of the
Amendment Agreement.


 


SECTION 9.04. Successors and Assigns.
(a)  Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the permitted successors and assigns
of such party; and all covenants, promises and agreements by or on behalf of
Holdings, the Borrower, the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns.


 


(b)                                 Each Lender may assign
to one or more assignees all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it); provided, however, that (i) the
Administrative Agent must give its prior written consent to such assignment
(which consent shall not be unreasonably withheld or delayed) other than any
assignment of Term Loans to a Lender or an Affiliate or Related Fund of a
Lender, (ii) in the case of any assignment of a Revolving Credit
Commitment, each of the Issuing Bank, the Swingline Lender and the Borrower
must give its prior written consent to such assignment (which consent shall not
be unreasonably withheld or delayed); provided that the consent of the
Borrower shall not be required to any such assignment during 


 


95

















 


the continuance of any Event of Default, (iii) the
amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $1,000,000 (or, if less, the entire remaining amount of such
Lender’s Commitment) and shall be in an amount that is an integral multiple of
$1,000,000 (or the entire remaining amount of such Lender’s Commitment), unless
otherwise agreed by the Administrative Agent, (iv) the parties to each
such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance (such Assignment and Acceptance to be (A) electronically
executed and delivered to the Administrative Agent via an electronic settlement
system then acceptable to the Administrative Agent, which shall initially be
the settlement system of ClearPar, LLC, or (B) manually executed and
delivered together with a processing and recordation fee of $3,500) and (v) the
assignee, if it shall not be a Lender immediately prior to the assignment,
shall deliver to the Administrative Agent an Administrative Questionnaire. Upon
acceptance and recording pursuant to paragraph (e) of this Section 9.04,
from and after the effective date specified in each Assignment and Acceptance, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
a Lender under this Agreement and (B) the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
an assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.16, 2.20
and 9.05, as well as to any Fees accrued for its account and not yet
paid).


 


(c)                                  By executing and
delivering an Assignment and Acceptance, the assigning Lender thereunder and
the assignee thereunder shall be deemed to confirm to and agree with each other
and the other parties hereto as follows: (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and that its Term Loan
Commitment and Revolving Credit Commitment, and the outstanding balances of its
Term Loans and Revolving Loans, in each case without giving effect to assignments
thereof which have not become effective, are as set forth in such Assignment
and Acceptance, (ii) except as set forth in (i) above, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto, or
the financial condition of Holdings, the Borrower or any Subsidiary or the
performance or observance by Holdings, the Borrower or any Subsidiary of any of
its obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05(a) or
delivered pursuant to Section 5.04 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral Agent, the Arranger, such assigning Lender or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own 


 


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credit decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent and the
Collateral Agent, respectively, by the terms hereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations which
by the terms of this Agreement are required to be performed by it as a Lender.


 


(d)                                 The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices in The City of New York a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent
manifest error and the Borrower, the Administrative Agent, the Issuing Bank,
the Collateral Agent and the Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Issuing Bank,
the Collateral Agent and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.


 


(e)                                  Upon its receipt of a
duly completed Assignment and Acceptance executed by an assigning Lender and an
assignee, an Administrative Questionnaire completed in respect of the assignee
(unless the assignee shall already be a Lender hereunder) and the written
consent of the Administrative Agent and, if required, the written consent of
the Borrower, the Swingline Lender and the Issuing Bank to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance and (ii) record
the information contained therein in the Register. No assignment shall be
effective unless it has been recorded in the Register as provided in this paragraph (e).


 


(f)                                    Each Lender may without
the consent of the Borrower, the Swingline Lender, the Issuing Bank or the
Administrative Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans); provided, however,
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.14, 2.16 and 2.20
to the same extent as if they were Lenders (but, with respect to any particular
participant, to no greater extent than the Lender that sold the participation
to such participant) and (iv) the Borrower, the Administrative Agent, the
Issuing Bank and the Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to the Loans or L/C Disbursements and to
approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing any fees
payable hereunder or the amount of principal of or the rate at which interest
is payable on the Loans (in each case to the extent participated in by such 


 


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participant), extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans (in each case to the extent
participated in by such participant), increasing or extending the Commitments
(in each case to the extent participated in by such participant) or releasing
any Guarantor or all or any substantial part of the Collateral).


 


(g)                                 Any Lender or
participant may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 9.04, disclose
to the assignee or participant or proposed assignee or participant any
information relating to the Borrower furnished to such Lender by or on behalf
of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to Section 9.16.


 


(h)                                 Any Lender may at
any time assign all or any portion of its rights under this Agreement to secure
extensions of credit to such Lender or in support of obligations owed by such
Lender and, in the case of any Lender that is a fund that invests in bank
loans, such Lender may pledge all or any portion of its rights under this
Agreement to any holder of, trustee for, or other representative of any holders
of, obligations owed or securities issued by such fund as security for such
obligations or securities; provided that no such assignment or pledge
described in this clause (h) shall release a Lender from any
of its obligations hereunder or substitute any such assignee or pledgee for
such Lender as a party hereto.


 


(i)                                     Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)
may grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower
all or any part of any Loan that such Granting Lender would otherwise be
obligated to make to the Borrower pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to make
any Loan and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender. Each party hereto hereby agrees that no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
(all liability for which shall remain with the Granting Lender). In furtherance
of the foregoing, each party hereto hereby agrees (which agreement shall
survive the termination of this Agreement) that, prior to the date that is one
year and one day after the payment in full of all outstanding commercial paper
or other senior indebtedness of any SPC, it will not institute against, or join
any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 9.04, any SPC may (i) with
notice to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by the Borrower and Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information 


 


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relating to its Loans to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancement to such
SPC.


 


(j)                                     Neither Holdings
nor the Borrower shall assign or delegate any of its rights or duties hereunder
without the prior written consent of the Administrative Agent, the Issuing Bank
and each Lender, and any attempted assignment without such consent shall be
null and void.


 


SECTION 9.05. Expenses; Indemnity.
(a)  Holdings and the Borrower agree, jointly and severally, to pay all
reasonable out-of-pocket costs and expenses incurred by the Administrative
Agent, the Collateral Agent, the Syndication Agent, each Documentation Agent,
the Arranger, the Issuing Bank and the Swingline Lender in connection with the
syndication of the credit facilities provided for herein and the preparation
and administration of this Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Arranger, the Issuing Bank or any Lender in connection with the enforcement or
protection of its rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made or Letters of Credit issued
hereunder, including in each case the fees and disbursements of Latham &
Watkins LLP, counsel for the Administrative Agent and the Collateral Agent,
and, in connection with any such enforcement or protection, the reasonable fees
and disbursements of any counsel for the Administrative Agent or the Collateral
Agent and one other transaction counsel acting on behalf of the Syndication
Agent, each Documentation Agent, the Arranger, the Issuing Bank and the
Lenders, together with any other local and special counsel reasonably required
in connection with such enforcement or protection.


 


(b)                                 Holdings and the
Borrower agree, jointly and severally, to indemnify the Administrative Agent,
the Collateral Agent, the Syndication Agent, each Documentation Agent, the
Arranger, each Lender, the Issuing Bank and each Related Party of any of the
foregoing persons (each such person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related costs and expenses, including reasonable
counsel fees and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties thereto of their respective obligations thereunder or the consummation
of the Transactions and the other transactions contemplated hereunder or
thereby, (ii) the use of the proceeds of the Loans or issuance of Letters
of Credit, (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party
thereto, or (iv) any actual or alleged presence or Release of Hazardous
Materials on any property owned or operated by Holdings, the Borrower or any of
the Subsidiaries, or any Environmental Liability related in any way to
Holdings, the Borrower or any of the Subsidiaries; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related costs and expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from primarily the gross negligence, willful
misconduct or bad faith of such Indemnitee (and, upon any such determination,
any indemnification payments with respect to such losses, claims, damages,
liabilities or related costs and expenses previously received by such
Indemnitee shall be promptly reimbursed by such Indemnitee).


 


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(c)                                  To
the extent that Holdings and the Borrower fail to pay any amount required to be
paid by them to the Administrative Agent, the Collateral Agent, the Syndication
Agent, each Documentation Agent, the Arranger, the Issuing Bank or the
Swingline Lender under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Administrative Agent,
the Collateral Agent, the Syndication Agent, each Documentation Agent, the
Arranger, the Issuing Bank or the Swingline Lender, as the case may be,
such Lender’s pro  rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent, the Collateral Agent,
the Syndication Agent, each Documentation Agent, the Arranger, the Issuing Bank
or the Swingline Lender in its capacity as such. For purposes hereof, a Lender’s
“pro rata share” shall be determined based upon its share of the sum of
the Aggregate Revolving Credit Exposure, outstanding Term Loans and unused
Commitments at the time.


 


(d)                                 To the extent
permitted by applicable law, neither Holdings nor the Borrower shall assert,
and each hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.


 


(e)                                  The provisions of
this Section 9.05 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the Transactions or the other transactions contemplated hereby,
the repayment of any of the Loans, the expiration of the Commitments, the
expiration of any Letter of Credit, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, the Syndication Agent, each Documentation Agent, the Arranger, any
Lender or the Issuing Bank. All amounts due under this Section 9.05
shall be payable on written demand therefor.


 


SECTION 9.06. Right of Setoff. If
an Event of Default shall have occurred and be continuing, each Lender is
hereby authorized at any time and from time to time, except to the extent
prohibited by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Lender to or for the credit or the account of
Holdings or the Borrower against any of and all the obligations of Holdings or
the Borrower now or hereafter existing under this Agreement and other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender
under this Section 9.06 are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.


 


SECTION 9.07. Applicable Law.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND
AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE


 


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WITH, THE LAWS OR RULES DESIGNATED
IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST RECENTLY
PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THE
INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS
TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF
NEW YORK.


 


SECTION 9.08. Waivers; Amendment.
(a)  No failure or delay of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by the
Borrower or any other Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on Holdings or the
Borrower in any case shall entitle Holdings or the Borrower to any other or
further notice or demand in similar or other circumstances.


 


(b)                                 Neither this Agreement
nor any other Loan Document nor any provision hereof or thereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by Holdings, the Borrower and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal
amount of, or extend the maturity of or any scheduled principal payment date
(subject to the last sentence of Article VII) or date for the
payment of any interest on any Loan or any date for reimbursement of an L/C
Disbursement, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan or L/C Disbursement, without the
prior written consent of each Lender adversely affected thereby, (ii) increase
or extend the Commitment or decrease or extend the date for payment of any Fees
of any Lender without the prior written consent of such Lender, (iii) amend
or modify the pro  rata requirements of Section 2.17,
the provisions of Section 9.04(j), the provisions of this Section or
the percentage set forth in the definition of the term “Required Lenders,” or
release any Guarantor (other than in accordance with the terms of the Guarantee
and Collateral Agreement), without the prior written consent of each Lender
adversely affected thereby, (iv) amend or modify the percentage set forth
in the definition of the term “Majority Facility Lenders” without the prior
written consent of each Lender adversely affected thereby, (v) release
all or substantially all of the Collateral without the prior written consent of
each Lender, (vi) change the provisions of any Loan Document in a manner
that by its terms adversely affects the rights in respect of payments due to
Lenders holding Loans of one Class differently from the rights of Lenders
holding Loans of any other Class without the prior written consent of
Lenders holding a majority in interest of the outstanding Loans and unused
Commitments of each adversely affected Class or (vii) modify the
protections afforded to an SPC pursuant to the provisions of Section 9.04(i) without
the written consent of such SPC; provided  further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative 


 


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Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender
hereunder or under any other Loan Document without the prior written consent of
the Administrative Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender, as applicable.


 


SECTION 9.09. Interest Rate
Limitation. Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Loan or participation in any L/C
Disbursement, together with all fees, charges and other amounts which are
treated as interest on such Loan or participation in such L/C Disbursement
under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest payable
in respect of such Loan or participation hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or participation but were not payable as a result of the operation
of this Section 9.09 shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or participations or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.


 


SECTION 9.10. Entire Agreement.
This Agreement, the Fee Letters and the other Loan Documents constitute the
entire contract between the parties relative to the subject matter hereof. Any
other previous agreement among the parties with respect to the subject matter
hereof is superseded by this Agreement and the other Loan Documents. Nothing in
this Agreement or in the other Loan Documents, expressed or implied, is
intended to confer upon any person (other than the parties hereto and thereto,
their respective successors and assigns permitted hereunder (including any
Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Collateral Agent, the Syndication Agent, each
Documentation Agent, the Arranger, the Issuing Bank and the Lenders ) any
rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.


 


SECTION 9.11. WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.


 


SECTION 9.12. Severability. In
the event any one or more of the provisions contained in this Agreement or in
any other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions 


 


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contained herein and therein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.


 


SECTION 9.13. Counterparts. This
Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original but all
of which when taken together shall constitute a single contract, and shall
become effective as provided in Section 9.03. Delivery of an
executed signature page to this Agreement or of a Lender Addendum by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.


 


SECTION 9.14. Headings. Article and
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this
Agreement.


 


SECTION 9.15. Jurisdiction; Consent
to Service of Process. (a)  Each of Holdings and the Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be
heard and determined in such New York State court or, to the extent permitted
by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent, the Syndication Agent, each
Documentation Agent, the Arranger, the Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against either Holdings or the Borrower or its properties in the
courts of any jurisdiction.


 


(b)                                 Each of Holdings and
the Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now
or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.


 


(c)                                  Each party to this
Agreement irrevocably consents to service of process in the manner provided for
notices in Section 9.01. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.


 


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SECTION 9.16. Confidentiality.
Each of the Administrative Agent, the Collateral Agent, the Issuing Bank and
the Lenders agrees to maintain the confidentiality of the Information, except
that Information may be disclosed (a) to its and its Affiliates’
officers, directors, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority or quasi-regulatory authority (such as
the National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) in connection with the exercise of any remedies hereunder or
under the other Loan Documents or any suit, action or proceeding relating to
the enforcement of its rights hereunder or thereunder, (e) subject to a
prior or contemporaneous agreement containing provisions substantially the same
as those of this Section 9.16, to (i) any actual or
prospective assignee of or participant in any of its rights or obligations
under this Agreement and the other Loan Documents or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to Holdings, the Borrower or any Subsidiary or any of
their respective obligations, (f) with the consent of Holdings or the
Borrower or (g) to the extent such Information becomes publicly available
other than as a result of a breach of this Section 9.16. Each of
the Administrative Agent, the Collateral Agent, the Issuing Bank and the
Lenders agrees not to use any Information except for evaluating the performance
of Holdings, the Borrower and the Subsidiaries hereunder and enforcing the
rights, remedies and obligations hereunder and under the other Loan Documents.
For the purposes of this Section, “Information” shall mean all information
received from Holdings or the Borrower and related to the Borrower or its
business, other than any such information that was available to the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to its disclosure by Holdings or the Borrower; provided
that, in the case of Information received from Holdings or the Borrower after
the Closing Date, such information is clearly identified at the time of
delivery as confidential. Any person required to maintain the confidentiality
of Information as provided in this Section 9.16 shall be considered
to have complied with its obligation to do so if such person has exercised the
same degree of care to maintain the confidentiality of such Information as such
person would accord its own confidential information. Notwithstanding any other
express or implied agreement, arrangement or understanding to the contrary,
each of the parties hereto agrees that each other party hereto (and each of its
employees, representatives or agents) are permitted to disclose to any persons,
without limitation, the tax treatment and tax structure of the Loans and the
other transactions contemplated by the Loan Documents and all materials of any
kind (including opinions and tax analyses) that are provided to the Loan
Parties, the Lenders, the Arranger or any Agent related to such tax treatment
and tax aspects. To the extent not inconsistent with the immediately preceding
sentence, this authorization does not extend to disclosure of any other
information or any other term or detail not related to the tax treatment or tax
aspects of the Loans or the transactions contemplated by the Loan Documents.


 


SECTION 9.17. Delivery of Lender
Addenda. Each initial Lender shall become a party to this Agreement by
delivering to the Administrative Agent a Lender Addendum duly executed by such
Lender, the Borrower and the Administrative Agent.


 


SECTION 9.18. Effect of Amendment and
Restatement of the Existing Credit Agreement. (a)  On the Amendment
Effective Date, the Existing Credit Agreement shall be 


 


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amended and restated in its entirety by this Agreement, and the
Existing Credit Agreement shall thereafter be of no further force and effect
except to evidence (i) the incurrence by the Borrowers of the “Obligations”
under and as defined in the Existing Credit Agreement (whether or not such “Obligations”
are contingent as of the Amendment Effective Date), (ii) the
representations and warranties made by Holdings and the Borrowers prior to the
Amendment Effective Date (which representations and warranties shall not be
superseded or rendered ineffective by this Agreement as they pertain to the
period prior to the Amendment Effective Date) and (iii) any action or
omission performed or required to be performed pursuant to such Existing Credit
Agreement prior to the Amendment Effective Date (including any failure, prior
to the Amendment Effective Date, to comply with the covenants contained in such
Existing Credit Agreement). The parties hereto acknowledge and agree that (a) this
Agreement and the other Loan Documents, whether executed and delivered in
connection herewith or otherwise, do not constitute a novation or termination
of the “Obligations” (as defined in the Existing Credit Agreement) under the
Existing Credit Agreement as in effect prior to the Amendment Effective Date
and which remain outstanding, (b) the “Obligations” are in all respects
continuing (as amended and restated hereby and which are hereinafter subject to
the terms herein) and (c) the Liens and security interests as granted
under the applicable Loan Documents securing payment of such “Obligations” are
in all respects continuing and in full force and effect and are reaffirmed
hereby.


 


(b)                                 On and after the
Amendment Effective Date, (i) all references to the Existing Credit
Agreement in the Loan Documents (other than this Agreement) shall be deemed to
refer to the Existing Credit Agreement, as amended and restated hereby, (ii) all
references to any section (or subsection) of the Existing Credit Agreement
in any Loan Document (but not herein) shall be amended to become, mutatis mutandis, references to the corresponding provisions
of this Agreement and (iii) except as the context otherwise provides, on
or after the Amendment Effective Date, all references to this Agreement herein
(including for purposes of indemnification and reimbursement of fees) shall be
deemed to be reference to the Existing Credit Agreement as amended and restated
hereby.


 


(c)                                  This amendment and
restatement is limited as written and is not a consent to any other amendment,
restatement or waiver or other modification, whether or not similar and, except
as expressly provided herein or in any other Loan Document, all terms and
conditions of the Loans Documents remain in full force and effect unless
otherwise specifically amended hereby or by any other Loan Document.


 


(d)                                 This amendment and
restatement shall not alter, modify or in any way amend the schedules and
exhibits to the Existing Credit Agreement (and such schedules and exhibits
shall continue to be schedules and exhibits hereto), other than Schedule 2.01,
which Schedule 2.01 as it exists on the Amendment Effective Date is
attached hereto as Exhibit A.


 


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


 




	
  TRUE TEMPER
  CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name.

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  TRUE TEMPER
  SPORTS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  






 


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CREDIT SUISSE,
CAYMAN ISLANDS BRANCH (formerly known as Credit Suisse First Boston, acting
through its Cayman Islands Branch), as Administrative Agent, Collateral Agent,
Issuing Bank, Revolving Credit Lender, Term Lender, Swingline Lender and
Arranger


 




	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title: