EXHIBIT 10.4


 


$130,000,000


 


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 FIRST BOSTON,


acting through its Cayman Islands Branch,


as Administrative Agent


 












 


CREDIT SUISSE FIRST BOSTON,


acting through its Cayman Islands Branch,


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


 


	
  ARTICLE I.

  
	
   

  	
   

  
	
  Definitions

  
	
   

  	
   

  
	
  SECTION 1.01.

  	
  Defined Terms

  	
   

  
	
  SECTION 1.02.

  	
  Terms Generally

  	
   

  
	
  SECTION 1.03.

  	
  Classification of Loans and Borrowings

  	
   

  
	
  SECTION 1.04.

  	
  Pro Forma Calculations

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  II.

  
	
   

  	
   

  
	
  The
  Credits

  
	
   

  	
   

  
	
  SECTION 2.01. 

  	
  Commitments

  	
   

  
	
  SECTION 2.02.

  	
  Loans

  	
   

  
	
  SECTION 2.03.

  	
  Borrowing Procedure

  	
   

  
	
  SECTION 2.04. 

  	
  Repayment of Loans; Evidence of Debt

  	
   

  
	
  SECTION 2.05.

  	
  Fees

  	
   

  
	
  SECTION 2.06.

  	
  Interest on Loans

  	
   

  
	
  SECTION 2.07.

  	
  Default Interest

  	
   

  
	
  SECTION 2.08.

  	
  Alternate Rate of Interest

  	
   

  
	
  SECTION 2.09. 

  	
  Termination and Reduction of Commitments

  	
   

  
	
  SECTION 2.10. 

  	
  Conversion and Continuation of Borrowings

  	
   

  
	
  SECTION 2.11. 

  	
  Repayment of Term Borrowings

  	
   

  
	
  SECTION 2.12. 

  	
  Prepayment

  	
   

  
	
  SECTION 2.13. 

  	
  Mandatory Prepayments

  	
   

  
	
  SECTION 2.14. 

  	
  Reserve Requirements; Change in
  Circumstances

  	
   

  
	
  SECTION 2.15. 

  	
  Change in Legality

  	
   

  
	
  SECTION 2.16.

  	
  Indemnity

  	
   

  
	
  SECTION 2.17. 

  	
  Pro Rata Treatment

  	
   

  
	
  SECTION 2.18. 

  	
  Sharing of Setoffs

  	
   

  
	
  SECTION 2.19. 

  	
  Payments

  	
   

  
	
  SECTION 2.20. 

  	
  Taxes

  	
   

  
	
  SECTION 2.21. 

  	
  Assignment of Commitments Under Certain
  Circumstances; Duty to Mitigate

  	
   

  
	
  SECTION 2.22. 

  	
  Swingline Loans

  	
   

  
	
  SECTION 2.23.

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  III.

  
	
   

  	
   

  
	
  Representations and Warranties

  
	
   

  	
   

  
	
  SECTION 3.01. 

  	
  Organization;  Powers

  	
   

  



 

















 


	
  SECTION 3.02. 

  	
  Authorization; No Conflicts

  	
   

  
	
  SECTION 3.03.

  	
  Enforceability

  	
   

  
	
  SECTION 3.04. 

  	
  Governmental Approvals

  	
   

  
	
  SECTION 3.05.

  	
  Financial Statements

  	
   

  
	
  SECTION 3.06. 

  	
  No Material Adverse Change

  	
   

  
	
  SECTION 3.07. 

  	
  Title to Properties; Possession Under
  Leases

  	
   

  
	
  SECTION 3.08. 

  	
  Subsidiaries

  	
   

  
	
  SECTION 3.09. 

  	
  Litigation; Compliance with Laws

  	
   

  
	
  SECTION 3.10. 

  	
  Agreements

  	
   

  
	
  SECTION 3.11. 

  	
  Federal Reserve Regulations

  	
   

  
	
  SECTION 3.12.

  	
  Investment Company Act; Public Utility
  Holding Company Act

  	
   

  
	
  SECTION 3.13. 

  	
  Use of Proceeds

  	
   

  
	
  SECTION 3.14. 

  	
  Tax Returns

  	
   

  
	
  SECTION 3.15. 

  	
  No Material Misstatements; Acquisition
  Documentation

  	
   

  
	
  SECTION 3.16. 

  	
  Employee Benefit Plans

  	
   

  
	
  SECTION 3.17.

  	
  Environmental Matters.

  	
   

  
	
  SECTION 3.18. 

  	
  Insurance

  	
   

  
	
  SECTION 3.19.

  	
   Security Documents

  	
   

  
	
  SECTION 3.20.

  	
  Location of Real Property

  	
   

  
	
  SECTION 3.21.

  	
  Labor Matters

  	
   

  
	
  SECTION 3.22.

  	
  Intellectual Property

  	
   

  
	
  SECTION 3.23.

  	
  Solvency

  	
   

  
	
  SECTION 3.24. 

  	
  Acquisition Documentation.

  	
   

  
	
  SECTION 3.25.

  	
  Senior Debt.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  IV.

  
	
   

  	
   

  
	
  Conditions of Lending

  
	
   

  	
   

  
	
  SECTION 4.01. 

  	
  All Credit Events

  	
   

  
	
  SECTION 4.02.

  	
  First Credit Event

  	
   

  
	
   

  	
   

  
	
  ARTICLE V.

  
	
   

  	
   

  
	
  Affirmative Covenants

  
	
   

  	
   

  
	
  SECTION 5.01. 

  	
  Existence; Businesses and Properties

  	
   

  
	
  SECTION 5.02. 

  	
  Insurance

  	
   

  
	
  SECTION 5.03. 

  	
  Obligations and Taxes

  	
   

  
	
  SECTION 5.04. 

  	
  Financial Statements, Reports, etc

  	
   

  
	
  SECTION 5.05. 

  	
  Litigation and Other Notices

  	
   

  
	
  SECTION 5.06. 

  	
  Information Regarding Collateral

  	
   

  
	
  SECTION 5.07. 

  	
  Maintaining Records; Access to Properties
  and Inspections.

  	
   

  
	
  SECTION 5.08. 

  	
  Use of Proceeds

  	
   

  



 


ii

















 


	
  SECTION 5.09. 

  	
  Additional Collateral, etc

  	
   

  
	
  SECTION 5.10. 

  	
  Further Assurances

  	
   

  
	
  SECTION 5.11. 

  	
  Interest Rate Protection

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI.

  
	
   

  	
   

  
	
  Negative Covenants

  
	
   

  	
   

  
	
  SECTION 6.01. 

  	
  Indebtedness

  	
   

  
	
  SECTION 6.02. 

  	
  Liens

  	
   

  
	
  SECTION 6.03. 

  	
  Sale and Lease-Back Transactions

  	
   

  
	
  SECTION 6.04. 

  	
  Investments, Loans and Advances

  	
   

  
	
  SECTION 6.05. 

  	
  Mergers, Consolidations, Sales of Assets
  and Acquisitions

  	
   

  
	
  SECTION 6.06. 

  	
  Restricted Payments; Restrictive Agreements

  	
   

  
	
  SECTION 6.07. 

  	
  Transactions with Affiliates

  	
   

  
	
  SECTION 6.08. 

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

  	
   

  
	
  SECTION 6.09. 

  	
  Other Indebtedness and Agreements;
  Amendments to Acquisition Documentation

  	
   

  
	
  SECTION 6.10. 

  	
  Capital Expenditures

  	
   

  
	
  SECTION 6.11. 

  	
  Interest Coverage Ratio

  	
   

  
	
  SECTION 6.12. 

  	
  Leverage Ratio

  	
   

  
	
  SECTION 6.13. 

  	
  Fixed Charge Coverage Ratio

  	
   

  
	
  SECTION 6.14. 

  	
  Fiscal Year

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  VII.

  
	
   

  	
   

  
	
  Events
  of Default

  
	
   

  	
   

  
	
  ARTICLE
  VIII.

  
	
   

  	
   

  
	
  The Agents and the Arranger

  
	
   

  	
   

  
	
  ARTICLE
  IX.

  
	
   

  	
   

  
	
  Miscellaneous

  
	
   

  	
   

  
	
  SECTION 9.01. 

  	
  Notices

  	
   

  
	
  SECTION 9.02. 

  	
  Survival of Agreement

  	
   

  
	
  SECTION 9.03. 

  	
  Binding Effect

  	
   

  
	
  SECTION 9.04. 

  	
  Successors and Assigns

  	
   

  
	
  SECTION 9.05. 

  	
  Expenses; Indemnity

  	
   

  
	
  SECTION 9.06. 

  	
  Right of Setoff

  	
   

  
	
  SECTION 9.07. 

  	
  Applicable Law

  	
   

  
	
  SECTION 9.08. 

  	
  Waivers; Amendment

  	
   

  



 


iii

















 


	
  SECTION 9.09. 

  	
  Interest Rate Limitation

  	
   

  
	
  SECTION 9.10. 

  	
  Entire Agreement

  	
   

  
	
  SECTION 9.11. 

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
  SECTION 9.12. 

  	
  Severability

  	
   

  
	
  SECTION 9.13. 

  	
  Counterparts

  	
   

  
	
  SECTION 9.14. 

  	
  Headings

  	
   

  
	
  SECTION 9.15. 

  	
  Jurisdiction; Consent to Service of Process

  	
   

  
	
  SECTION 9.16. 

  	
  Confidentiality

  	
   

  
	
  SECTION 9.17. 

  	
  Delivery of Lender Addenda

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  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

  	
   

  
	
  Exhibit K

  	
  Form of
  Exemption Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule  1.01(a)

  	
  Existing
  Letters of Credit

  	
   

  
	
  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  3.25

  	
  Acquisition
  Documentation

  	
   

  
	
  Schedule  6.01

  	
  Existing
  Indebtedness

  	
   

  
	
  Schedule  6.02

  	
  Existing
  Liens

  	
   

  
	
  Schedule  6.04

  	
  Existing
  Investments

  	
   

  
				



 


iv

















 


CREDIT AGREEMENT dated as of March 15, 2004
(this “Agreement”), 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 FIRST BOSTON, acting through its Cayman Islands Branch,
as administrative agent (in such capacity, the “Administrative Agent”)
and as collateral agent (in such capacity, the “Collateral Agent”),
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, 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.


 


“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.


 


“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 have the meaning assigned to such term in the
preamble.


 


“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.


 


“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:


 


2

















 


	
  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

  	
  %

  



 


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 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.  Notwithstanding the foregoing, until the
Borrower shall have delivered the financial statements and certificates
required by Section 5.04(b) and Section 5.04(c), respectively, for the period
ended on September 30, 2004, the Leverage Ratio shall be deemed to be in
Category 1 for purposes of determining the Applicable Margin.  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 


 


3

















 


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.


 


“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.


 


4

















 


“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 and (iii) with the proceeds of a substantially contemporaneous equity
contribution from Holdings.


 


“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.


 


A “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 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 date of this Agreement, (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 date of this Agreement.


 


5

















 


“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 the date of the first Credit Event.


 


“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 First Boston,
acting through its Cayman Islands Branch.


 


“Confidential Information Memorandum” shall mean the
Confidential Information Memorandum of the Borrower dated February 2004.


 


“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 non-cash 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 and (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 


 


6

















 


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), 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 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).  Notwithstanding the foregoing, it is agreed
that Consolidated EBITDA for the fiscal quarter ending on or about September
30, 2003 shall be deemed to be $7,984,000, Consolidated EBITDA for the fiscal
quarter ending on or about December 31, 2003 shall be deemed to be $8,237,000
and Consolidated EBITDA for the fiscal quarter ending on or about March 31,
2004 shall be deemed to be $10,000,000.


 


“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 payments made by the Borrower or any Subsidiary to the
Borrower or a Subsidiary), plus (c) Capital Expenditures for such period (other
than in connection with restructuring and start-up costs relating to the
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.  Notwithstanding the foregoing, it is agreed that Consolidated
Fixed Charges for the fiscal quarter ending on or about September 30, 2003
shall be deemed to be $5,022,000, Consolidated Fixed Charges for the fiscal
quarter ending on or about December 31, 2003 shall be deemed to be $5,138,000
and Consolidated Fixed Charges for the fiscal quarter ending on or about March
31, 2004 shall be deemed to be $4,412,000.


 


“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 cash costs paid to unwind a Hedging Agreement existing on the
Closing Date).  Notwithstanding
the foregoing, it is agreed that Consolidated Interest Expense for each of the
fiscal quarters


 


7

















 


ending on or
about September 30, 2003, December 31, 2003 and March 31, 2004 shall be deemed
to be $3,673,000.


 


“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.


 


“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 Closing Date, after giving effect to the Acquisition,
(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.


 


“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.


 


8

















 


“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.


 


“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 Contribution” shall mean, collectively, the contribution
by the Sponsor and certain other investors of at least $118,500,000 in cash
(which amount shall be reduced by the amount of any purchase price reduction
under the Purchase Agreement up to a maximum of $500,000) to Holdings for the
purchase or redemption of common equity and/or preferred equity having terms
reasonably satisfactory to the Arranger, the repayment or redemption of
Indebtedness and the payment of fees and expenses in connection therewith.


 


“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.


 


9

















 


“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 and (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 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.


 


“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 


 


10

















 


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 decrease,
if any, in Current Assets minus Current Liabilities 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 for such fiscal
year payable in cash, (iii) the aggregate amount paid in cash in respect
of Capital Expenditures 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 date hereof), (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 and (vii)  the increase, if any, in
Current Assets minus Current Liabilities from the beginning to the end of such
fiscal year.


 


“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


 


11

















 


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).


 


“Existing Credit Facility” shall mean the credit facility of the
Borrower under the credit agreement dated as of December 31, 2002, among the
Borrower, Antares Capital Corporation, as a lender and as agent for all
lenders, and the other lenders party thereto.


 


“Existing Letters of Credit” shall mean the letters of credit
existing on the Closing Date and set forth on Schedule 1.01(a).


 


“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 Letter” shall mean the Fee Letter dated as of
January 30, 2004, among TTS Holdings and Credit Suisse First Boston,
acting through its Cayman Islands Branch.


 


“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.


 


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


 


12

















 


“Funded Debt” shall mean (a) as of the last day of any fiscal
quarter ending on or prior to December 31, 2005 or, for purposes of Section
4.02(l), as of the Closing Date, 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 $5,000,000 and (b) as of the
last day of any fiscal quarter ending thereafter, Total Debt at such time.


 


“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 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.


 


13

















 


“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 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.


 


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


 


“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


 


14

















 


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 First Boston, acting through its Cayman Islands Branch, 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; provided that
it is agreed that Antares Capital Corporation shall be deemed to be an “Issuing
Bank” in respect of its contingent reimbursement obligations owed to the
issuing bank of the Existing Letters of Credit in respect of the Exiting
Letters of Credit.  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.


 


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


 


15

















 


“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) and (b) any person that has become a party
hereto pursuant to an Assignment and Acceptance.  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.


 


“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


 


16

















 


(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 and the Security
Documents.


 


“Loan Parties” shall mean Holdings, the Borrower and each
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.


 


“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


 


17

















 


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 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.


 


18

















 


“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.


 


“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 the 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 then 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) after 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


 


19

















 


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;


 


(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;


 


20

















 


(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 the Indebtedness of Jineng that is
set forth in Schedule 6.01 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.


 


“Post Closing Mortgaged Property” shall mean the Mortgaged
Property consisting of a leasehold interest affecting certain land located at
highway 25 South, Amory, Mississippi,


 


21

















 


demised
pursuant to a lease dated July 1, 1976, between the City of Amory, Mississippi,
as landlord, and Holdings, as tenant, which lease was assigned by Holdings to
the Borrower as of March 31, 1980.


 


“Prime Rate” shall mean the rate of interest per annum announced
from time to time by Credit Suisse First Boston 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).


 


“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 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


 


22

















 


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.


 


“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.


 


23

















 


“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.


 


“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


 


24

















 


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.


 


“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,


 


25

















 


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 date hereof 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 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.


 


26

















 


“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 First Boston, acting
through its Cayman Islands Branch, 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.


 


“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 


 


27

















 


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.


 


“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.


 


“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 initial Total Revolving Credit Commitment 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.


 


“TTS Holdings” shall mean TTS Holdings LLC, a Delaware limited
liability company controlled by the Sponsor and its Affiliates, which shall be
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.


 


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


 


SECTION 1.02.  
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 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.


 


29

















 


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 agrees, severally and not jointly,
to make a Term Loan to the Borrower on the Closing Date in a principal
amount not to exceed its Term Loan Commitment and (b) 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 (b) 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.


 


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; provided that all Revolving Credit Borrowings made on
the Closing Date and during the period ending seven days thereafter must be
made as ABR Borrowings (and may not be converted into Eurodollar Borrowings
until the end of such seven-day period), and no Borrowings may be converted
into or continued as a Eurodollar Borrowing having an Interest Period in excess
of one month prior to the date which is 60 days after the Closing Date.  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


 


30

















 


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 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


 


31

















 


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 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.


 


32

















 


(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 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 date hereof 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 date hereof
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 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


 


33

















 


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 date hereof 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)           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


 


34

















 


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 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 shall automatically
terminate at 5:00 p.m., New York City time, on the Closing Date and
(ii) the Revolving Credit Commitments, the Swingline Commitment and the
L/C Commitment shall automatically terminate on the Revolving Credit Maturity
Date.  Notwithstanding the foregoing,
all the Commitments shall automatically terminate at 5:00 p.m., New York
City time, on April 30, 2004, if the initial Credit Event 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 Term Loan
Commitments, the Revolving Credit Commitments or the Swingline Commitment; provided,
however, that (i) each partial reduction of the 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 Term Loan Commitments, 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


 


35

















 


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 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


 


36

















 


(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.


 


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) 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 and 2.13(f)) 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

  	
   

  
	
  June 30, 2004

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  275,000

  	
   

  



 


37

















 


	
  Repayment Date

  	
   

  	
  Amount

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  275,000

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  25,850,000

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  25,850,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  25,850,000

  	
   

  
	
  Term Loan Maturity Date

  	
   

  	
  Remainder

  	
   

  



 


(b)           To
the extent not previously paid, all Term Loans shall be due and payable on the
Term Loan Maturity Date, 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 $2,000,000.


 


(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


 


38

















 


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 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 the earlier of (i) 90 days after the
end of each fiscal year of the Borrower, commencing with the fiscal year ending
on December 31, 2005, and (ii) 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 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


 


39

















 


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 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.


 


40

















 


(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 that would have been made by
such Lender or the converted Eurodollar Loans of such Lender


 


41

















 


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.


 


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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.


 


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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


 


44

















 


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 W-8BEN (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 W-8BEN.  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


 


45

















 


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.


 


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(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


 


47

















 


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.


 


48

















 


(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


 


49

















 


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 investigation, regardless
of any notice or information to the contrary and, in making any payment


 


50

















 


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 hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the


 


51

















 


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, on the Business Day it receives notice 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.


 


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


 


52

















 


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 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, 2003,
December 31, 2002 and December 31, 2001, in each case audited by and
accompanied by the opinion of KPMG LLP,


 


53

















 


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.


 


(b)           The
Borrower has heretofore delivered to the Lenders its unaudited pro forma
consolidated balance sheet and statement of income as of December 31,
2003, prepared giving effect to the Transactions as if they had occurred, with respect
to such balance sheet, on such date and, with respect to such other financial
statements, on the first day of the 12-month period ending on such date.  Such pro forma financial statements
(i) have been prepared in good faith by the Borrower, based on the
assumptions used to prepare the pro forma financial information contained in
the Confidential Information Memorandum (which assumptions are believed by the
Borrower on the date hereof and on the Closing Date to be reasonable), (ii) are
based on the best information available to the Borrower after due inquiry as of
the date of delivery thereof, (iii) accurately reflect all adjustments required
to be made to give effect to the Transactions and (iv) present fairly in all
material respects on a pro forma basis the estimated consolidated financial
position of the Borrower and its consolidated Subsidiaries as of such date and
for such period, assuming that the Transactions had actually occurred at such
date or at the beginning of such period, as the case may be (it being
understood that estimates, by their nature, are inherently uncertain and that
no assurances are being made that such results will be achieved).


 


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


 


54

















 


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).


 


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


 


55

















 


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; Public Utility Holding Company Act.  None of Holdings, the Borrower or any of the
Subsidiaries is (a) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, or (b) a
“holding company” as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.


 


SECTION 3.13.  
Use of Proceeds.  The Borrower
will use the proceeds of the Term Loans solely on the Closing Date to pay the
Acquisition Consideration, to redeem or repay Indebtedness of the Borrower or
any of the Subsidiaries and to pay fees and expenses related to the
Transactions, including a fee payable to the Sponsor.  The Borrower will use the proceeds of the Revolving Loans and the
Swingline Loans solely for general corporate purposes, including 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 Holdings, the Borrower or any of the
Subsidiaries intends to treat the Loans or any of the transactions contemplated
by any Loan Document or the Acquisition as being a “reportable transaction”
(within the meaning of Treasury Regulation Section 1.6011-4).


 


SECTION 3.15.  
No Material Misstatements; Acquisition Documentation.  (a) 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


 


56

















 


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 (i) the Confidential Information Memorandum or
(ii) any other 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).


 


(b)           As
of the Closing Date, the representations and warranties of the applicable Loan
Parties and their Affiliates set forth in the Acquisition Documentation are
true and correct in all material respects, 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.


 


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 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:


 


(i)            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;


 


57

















 


(ii)           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;


 


(iii)          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;


 


(iv)          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;


 


(v)           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;


 


(vi)          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;


 


(vii)         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
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


 


(viii)        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


 


58

















 


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 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 date hereof).


 


(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).


 


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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. 
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary is bound.


 


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, 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.  
Acquisition Documentation.  The
Acquisition Documentation listed on Schedule 3.25 constitutes, as of the
Closing Date, all of the material agreements, instruments and undertakings to
which Holdings, the Borrower or any of the Subsidiaries is bound or by which
any of their respective property or assets is bound or affected relating to the
Acquisition.  None of such material
agreements, instruments or undertakings has been amended, supplemented or


 


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otherwise modified, except after the Closing Date as permitted by
Section 6.09, and all such material agreements, instruments and undertakings
are in full force and effect.  No party
to any of the Acquisition Documentation is in default thereunder as of the
Closing Date and no party thereto has the right to terminate any of the
Acquisition Documentation.


 


SECTION 3.25.  
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.


 


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


 


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(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 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


 


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


 


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(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.


 


(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


 


64

















 


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.


 


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


 


65

















 


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 and other material obligations 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, 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


 


66

















 


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 and (ii) 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:


 


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(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 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 prompt written notice of any
change (i) in any Loan Party’s corporate name, (ii) in the location of any Loan
Party’s chief executive office or, if different, its principal place of
business, any office in which it maintains books or records relating to
material Collateral owned by it or any office or facility at which material Collateral
owned by it is located (including the establishment of any such new office or
facility), (iii) in any Loan Party’s corporate structure or (iv) in any Loan
Party’s Federal Taxpayer Identification Number.  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 


 


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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 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), (y) lease of Collateral
consisting of Real Property with an annual base rent in excess of $1,000,000
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 (z)
Post Closing Mortgaged Property, 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) or (z), 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) or (z) , 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, 


 


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evidence of such
recordation or a copy of such fully executed and binding lease amendment, all
as may 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, 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


 


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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 owned by the Borrower or any of its Domestic Subsidiaries
(provided that in no event shall more 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.


 


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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:


 


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


 


(a)           Indebtedness existing on the date
hereof 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;


 


(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 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


 


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(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 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 $7,500,000 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;


 


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(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 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 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 date hereof and set forth in
Schedule 6.02; provided that such Liens shall secure only those
obligations which they secure on the date hereof 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


 


74

















 


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 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; and


 


(q)           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


 


75

















 


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 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 date hereof 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 shall not exceed
$10,000,000 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 date hereof);


 


(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;


 


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(f)            Investments existing on the date
hereof 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;


 


(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 date hereof; 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 paragraph (k) (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


 


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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 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) (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 (x) $2,000,000 in any fiscal year
or (y) $7,500,000 in the aggregate or (ii) such Asset Sale is a Permitted
Asset Swap.


 


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 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


 


78

















 


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 date hereof and with
such changes after the date hereof 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 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
date hereof 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, 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


 


79

















 


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 date hereof and with such changes after the date hereof as may be
approved by the Administrative Agent, (e) loans and advances may be made to
Jineng pursuant to the commitments existing on the date hereof and Jineng may
make payments in respect of such loans and advances and (f) 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,
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


 


80

















 


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 $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 (a) the amount of unused permitted Capital Expenditures for the
immediately preceding fiscal year less (b) an amount equal to unused
Capital Expenditures carried forward to such preceding fiscal year.


 


SECTION 6.11.  
Interest Coverage Ratio.  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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2004 through December 31, 2004

  	
   

  	
  1.85 to 1.00

  	
   

  
	
  January 1, 2005 through December 31, 2005

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  January 1, 2006 through December 31, 2006

  	
   

  	
  2.15 to 1.00

  	
   

  
	
  Thereafter

  	
   

  	
  2.25 to 1.00

  	
   

  



 


SECTION 6.12.  
Leverage Ratio.  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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2004 through December 31, 2004

  	
   

  	
  6.95
  to 1.00

  	
   

  
	
  January 1, 2005 through September 30, 2005

  	
   

  	
  6.75
  to 1.00

  	
   

  
	
  October 1, 2005 through December 31, 2005

  	
   

  	
  6.50
  to 1.00

  	
   

  
	
  January 1, 2006 through December 31, 2006

  	
   

  	
  5.95
  to 1.00

  	
   

  
	
  January 1, 2007 through December 31, 2007

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  January 1, 2008 through December 31, 2008

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  Thereafter

  	
   

  	
  4.50 to 1.00

  	
   

  



 


81

















 


SECTION 6.13.  
Fixed Charge Coverage Ratio. 
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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2004 through December 31, 2004

  	
   

  	
  1.40
  to 1.00

  	
   

  
	
  Thereafter

  	
   

  	
  1.50
  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


 


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;


 


(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)            (i)  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


 


82

















 


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 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;


 


83

















 


(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 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.


 


84

















 


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 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.


 


85

















 


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 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


 


86

















 


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 First Boston, Eleven Madison Avenue, New
York, NY 10010, Attention of Loan Services Manager (Fax No.
(212) 325-8304); and


 


(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


 


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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 when it shall have been executed by each of the parties
hereto and when the Administrative Agent shall have received counterparts
hereof which, when taken together, bear the signatures of each of the other
parties hereto.


 


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 the continuance of
any Default or in connection with the initial syndication of the Facility,
(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


 


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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 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


 


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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 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.


 


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(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 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



 


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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).


 


(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


 


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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 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


 


93

















 


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 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


 


94

















 


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 Letter 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 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


 


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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.


 


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


 


96

















 


 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 date hereof, such information is clearly identified at the time of delivery
as confidential.  Any person required to
maintain the confidentiality of Information as provided in this Section 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.


 


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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:

  	
    /s/  FRED H. GEYER

  	
   

  
	
   

  	
   

  	
  Name: Fred H. Geyer

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRUE TEMPER SPORTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  FRED H. GEYER

  	
   

  
	
   

  	
   

  	
  Name: Fred H. Geyer

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON, acting 

  through its Cayman Islands Branch, as 

  Administrative Agent, Collateral Agent,

  Issuing Bank, Swingline Lender and

  Arranger

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ ROBERT HETU

  	
   

  
	
   

  	
   

  	
  Name: Robert Hetu

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ BARBARA WONG

  	
   

  
	
   

  	
   

  	
  Name: Barbara Wong

  
	
   

  	
   

  	
  Title: Associate

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ANTARES CAPITAL CORPORATION,

  individually and as Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ DANIEL B. GLICKMAN

  	
   

  
	
   

  	
   

  	
  Name: Daniel B. Glickman

  
	
   

  	
   

  	
  Title: Director

  



 

















 


	
   

  	
  GOLDMAN SACHS CREDIT PARTNERS

  L.P., individually and as Co-Documentation

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ WILLIAM W. ARCHER

  	
   

  
	
   

  	
   

  	
  Name: William W. Archer

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH CAPITAL, a division

  of Merrill Lynch Business Financial

  Services, Inc., individually and as Co-

  Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ CRAIG GALLEHUGH

  	
   

  
	
   

  	
   

  	
  Name: Craig Gallehugh

  
	
   

  	
   

  	
  Title: Director, Team Leader