Exhibit 10.3


 


AMENDMENT
NO. 1 TO CREDIT AGREEMENT


 


THIS
AMENDMENT NO. 1 TO CREDIT AND GUARANTY AGREEMENT (this “Amendment”),
dated as of April 16, 2010, is made and entered into among DOUGLAS
DYNAMICS, L.L.C., a Delaware limited liability company (the “Company” or
“Borrower Representative”), Fisher, LLC, a Delaware limited
liability company (“Fisher”), Douglas Dynamics Finance Company, a
Delaware corporation (“DD Finance” and, together with Fisher and the
Borrower Representative, each a “Borrower” and collectively the “Borrowers”)
and each of the Lenders (as
hereinafter defined) party hereto.


 


RECITALS


 


A.            The Borrowers and the Lenders party
hereto are parties to that certain Credit and Guaranty Agreement dated as of May 21,
2007 (the “Credit Agreement”) among the Borrowers, Credit Suisse AG,
Cayman Islands Branch, as Administrative Agent (in such capacity, the “Administrative
Agent”) on behalf of the Lenders, each lender from time to time party
thereto (the “Lenders”) and each of the other banks, financial institutions
and other entities from time to time party thereto.


 


B.            The Borrowers have requested that
the Lenders agree, subject to the conditions and on the terms set forth in this
Amendment, to amend certain provisions of the Credit Agreement as set forth
herein.


 


C.            The Lenders are willing to amend the
Credit Agreement, subject to the conditions and on the terms set forth below.


 


AGREEMENT


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrowers and each of the Lenders party
hereto agree as follows:


 


1.             Definitions.   Except as otherwise expressly provided
herein, capitalized terms used in this Amendment shall have the meanings given
in the Amended Credit Agreement (as defined below), and the rules of
interpretation set forth in the Amended Credit Agreement shall apply to this
Amendment.  In addition:


 

















 


“Qualifying IPO” means the consummation of the
first underwritten public offering of the Capital Stock (other than
Disqualified Capital Stock) of Holdings following the Closing Date pursuant to
a registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act.


 


“Qualifying IPO Payment” means, concurrent with
the closing of a Qualifying IPO, the one-time payment to Sponsor in connection
with the termination of the Management Services Agreement in an aggregate
amount not to exceed $6,000,000.


 


“Qualifying Preferred Stock Redemption” means,
concurrent with the closing of a Qualifying IPO, the payment of $1,000 to
Aurora Equity Partners II L.P. and $1,000 to Ares Limited Partnership in
respect of the redemption of the one share of Series B Preferred Stock and
Series C Preferred Stock held by Aurora Equity Partners II L.P. and the
Ares Limited Partnership, respectively.


 


“Qualifying Senior Notes Redemption” means,
concurrent with the closing of a Qualifying IPO, the Company and DD Finance (i) have
given irrevocable and unconditional notice of redemption for all of the
outstanding Senior Notes, (ii) have timely and irrevocably deposited or
caused to be deposited with the trustee under the Senior Notes Indenture
proceeds of a Qualifying IPO, proceeds of Additional Term Loans (as defined in
the Term Loan Facility), Cash and/or proceeds of Revolving Loans sufficient to
pay and discharge the entire indebtedness (including all principal, premium, if
any, and accrued interest) on all outstanding Senior Notes and (iii) have
satisfied all other conditions precedent to the discharge of the Senior Notes
Indenture set forth in Section 8.8 of the Senior Notes Indenture.


 


2.             Consent
and Agreement.  Notwithstanding
anything to the contrary in the Credit Documents, the Lenders hereby consent to
(i) the redemption of the Senior Notes by the Company pursuant to a Qualifying
Senior Notes Redemption, (ii) the payment of the Qualifying IPO Payment
and (iii) the redemption by Holdings of all preferred stock of Holdings
pursuant to a Qualifying Preferred Stock Redemption.  The Company hereby agrees to consummate a
Qualifying Senior Notes Redemption concurrently with the consummation of a
Qualifying IPO.


 


3.             Amendment.  Concurrently with the consummation of a
Qualifying IPO, the terms and provisions of the Credit Agreement are hereby
amended by replacing such terms and provisions in their entirety with the terms
and provisions set forth in the Credit Agreement attached hereto as Exhibit A
(the “Amended Credit Agreement”).


 


4.             Representations
and Warranties.  To induce
the Lenders to agree to this Amendment, each Borrower represents to the
Administrative Agent and the Lenders that as of the date hereof:


 


(a)           such
Borrower has all power and authority to enter into this Amendment and to carry
out the transactions contemplated by, and to perform its obligations under or
in respect of, this Amendment;


 


(b)           the
execution and delivery of this Amendment and the performance of the obligations
of such Borrower hereunder have been duly authorized by all necessary action on
the part of such Borrower;


 


(c)           the
execution and delivery of this Amendment by such Borrower, and the performance
of the obligations of such Borrower hereunder do not and will not conflict with
or violate (i) any provision of the articles of incorporation or bylaws
(or similar constituent documents) of such Borrower, (ii) any applicable
provision of any material law, statute, rule, regulation, order, writ,
injunction or decree of any court or Governmental Authority or (iii) any
indenture, agreement or instrument to which


 


2

















 


such Borrower is a party or by which such Borrower or
any property of such Borrower, is bound, and do not and will not require any
consent or approval of any Person that has not been obtained;


 


(d)           this
Amendment has been duly executed and delivered by such Borrower and the Credit
Agreement and the other Credit Documents, as modified by this Amendment, are
the legal, valid and binding obligations of such Borrower, enforceable in
accordance with their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law);


 


(e)           no
event has occurred and is continuing or will result from the execution and
delivery of this Amendment or the consummation of a Qualifying IPO, the
Qualifying IPO Payment, the Qualifying Senior Notes Redemption and/or the
Qualifying Preferred Stock Redemption (in each case, after giving effect to
this Amendment) that would constitute a Default or an Event of Default;


 


(f)            since
December 31, 2006, no event has occurred that has resulted, or could
reasonably be expected to result, in a Material Adverse Effect;


 


(g)           each
of the representations and warranties made by such Borrower in or pursuant to
the Credit Documents are true and correct in all material respects on and as of
the date this representation is being made, except for representations and
warranties expressly stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date;


 


(h)           the
Company has obtained $40 million in Additional Term Loan Commitments (as defined
in the Term Loan Facility) under the Term Loan Facility; and


 


(i)            after
giving effect to (i) a Qualifying IPO, (ii) the redemption of the
Senior Notes by the Company pursuant to the Qualifying Senior Notes Redemption,
(iii) the payment of the Qualifying IPO Payment, (iv) the redemption
by Holdings of all preferred stock of Holdings pursuant to the Qualifying
Preferred Stock Redemption and (v) the incurrence of $40 million aggregate
principal amount of Additional Term Loan Commitments under the Term Loan Facility,
the aggregate amount of (1) Cash of the Company in Deposit Accounts
subject to a Blocked Account Agreement and (2) Excess Availability shall
be at least $15,000,000; provided, that Excess Availability will be calculated
without giving effect to any Cash.


 


Each Lender party to this Amendment represents and warrants to each
Agent and each Lender that it has made its own independent investigation of the
terms of the Credit Agreement and the Amended Credit Agreement and the facts
and circumstances surrounding this Amendment, and has not relied in any way on
any statement, advice or recommendation of any Agent or Lender in connection
herewith.  No Agent shall have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation on behalf of Lenders or to provide any Lender with any
information, advice or recommendation with respect thereto, whether coming into
its possession before the execution of this Amendment or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders relating
to any of the foregoing.


 


5.             Effectiveness
of Amendments.  This
Amendment (other than Section 6 hereof which shall be effective as set
forth in such Section) shall be effective as of the first date (the “First Amendment
Effective Date”) on which all of the following conditions precedent have
been satisfied:


 


3

















 


(a)           The
Administrative Agent shall have received a counterpart signature page of
this Amendment duly executed by each of the Credit Parties and the Requisite
Lenders;


 


(b)           The
Administrative Agent shall have received a certificate signed by the chief
financial officer of the Borrowers dated the First Amendment Effective Date,
certifying (A) that the representations and warranties contained in Section 4
of this Amendment are true and correct as of the First Amendment Effective Date
and (B) that no event shall have occurred and be continuing or would
result from the consummation of a Qualifying IPO, the Qualifying Senior Notes
Redemption, the Qualifying Preferred Stock Redemption and/or the Qualifying IPO
Payment (in each case, after giving effect to this Amendment) that would
constitute a Default or an Event of Default;


 


(c)           The
Administrative Agent shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including the reasonable fees
and expenses of legal counsel), in connection with this Amendment (or shall
have made arrangements for the payment thereof satisfactory to the
Administrative Agent);


 


(d)           a
Qualifying IPO shall have occurred;


 


(e)           Each
Credit Party shall have delivered a solvency certificate in form and substance
satisfactory to the Administrative Agent; and


 


(f)            Company
shall pay, to each Lender executing this Amendment on or before April 16,
2010 by 5:00 p.m. New York City Time, an amendment fee equal to 0.25% of
such Lender’s Revolving Exposure, which amendment fee shall be payable
concurrently with the consummation of the Qualifying IPO.


 


6.             Delivery
of Financial Statements. 
Notwithstanding the provisions set forth in Section 5.1(c) of
the Credit Agreement to the contrary, the financial statements of Holdings and
its Subsidiaries for the Fiscal Year ended December 31, 2009 that were
delivered to the Administrative Agent prior to the date hereof shall be deemed
to satisfy the requirements of Section 5.1(c) that such financial
statements be of the Company and its Subsidiaries solely with respect to the
Fiscal Year ended December 31, 2009. 
Notwithstanding the provisions set forth in Section 5.1(b) of
the Credit Agreement requiring delivery of certain financial statements of the
Company and its Subsidiaries, delivery of comparable financial statements of
Holdings and its Subsidiaries shall be deemed to satisfy such requirement
solely with respect to the Fiscal Quarters ending March 31, 2010 and June 30,
2010.  Notwithstanding the provisions of Section 5
of this Amendment, the provisions of this Section 6 shall be effective
immediately upon receipt by Administrative Agent of a counterpart signature page of
this Amendment duly executed by each of the Credit Parties and the Requisite
Lenders.


 


7.             Miscellaneous.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).  This Amendment may be executed in one or more
duplicate counterparts and when signed by all of the parties listed below shall
constitute a single binding agreement. 
Except for the amendments set forth in Section 3 hereof and the
consent set forth in Section 2 hereof, all of the provisions of the Credit
Agreement and the other Credit Documents shall remain in full force and
effect.  The foregoing amendments shall
be strictly construed in accordance with the express terms thereof.  Except with respect to the matters
specifically waived or amended thereby, Section 2 and 3 above shall not
operate as a waiver of any right, remedy, power or privilege of any Lender or
the Administrative Agent under the Credit Agreement or any other Credit Document
or of any other term or condition of the Credit Agreement or any other Credit 


 


4

















 


Document.  This Amendment shall
be deemed a “Credit Document” as defined in the Credit Agreement.  Sections 10.15 and 10.16 of the Credit
Agreement shall apply to this Amendment and all past and future amendments to
the Credit Agreement and other Credit Documents as if expressly set forth
herein or therein.


 


8.             Acknowledgement
and Consent.


 


Holdings has read this Amendment and consents to the
terms hereof and further hereby confirms and agrees that, notwithstanding the
effectiveness of this Amendment, the obligations of Holdings under, and the
Liens granted by Holdings as collateral security for the indebtedness,
obligations and liabilities evidenced by the Credit Agreement and the other
Credit Documents pursuant to, each of the Credit Documents to which Holdings is a party shall not be
impaired and each of the Credit
Documents to which Holdings is a party is, and shall continue to be, in
full force and effect and is hereby confirmed and ratified in all
respects.  Holdings and each Borrower
hereby acknowledges and agrees that the Secured Obligations under, and as
defined in, the ABL Pledge and Security Agreement dated as of May 21,
2007, by and among Holdings and the Borrowers and Administrative Agent (the “Pledge
and Security Agreement”) and, with respect to the other Collateral Documents,
the Obligations secured by the Liens granted thereby, will include all
Obligations under, and as defined in, the Amended Credit Agreement.


 


Holdings acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Amendment, Holdings is not
required by the terms of the Credit Agreement or any other Credit Document to
consent to the amendments to the Credit Agreement effected pursuant to this
Amendment and (ii) nothing in the Credit Agreement, this Amendment or any
other Credit Document shall be deemed to require the consent of Holdings to any
future amendments to the Credit Agreement.


 


9.             Consent
to Term Amendment and Intercreditor Amendment.


 


(a)           Pursuant
to Section 5.3(a) of the Intercreditor Agreement, the Lenders party
hereto hereby consent to (i) an amendment to the Term Credit Agreement (as
defined in the Intercreditor Agreement) in substantially the form of Exhibit B
and (ii) any amendments to the other Term Loan Documents (as defined in
the Intercreditor Agreement) executed in connection therewith; and


 


(b)           The
Lenders party hereto hereby consent to the execution of an amendment to the
Intercreditor Agreement in substantially the form of Exhibit C (the “Intercreditor
Amendment”) and hereby authorize and instruct (i) the Administrative
Agent to execute the Intercreditor Amendment in its capacity as ABL Administrative
Agent thereunder and (ii) the Collateral Agent to execute the
Intercreditor Amendment in its capacity as ABL Collateral Agent thereunder.


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]


 


5

















 


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


 


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  McCormick

  
	
   

  	
  Name:

  	
  Robert McCormick

  
	
   

  	
  Title:

  	
  VP CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS FINANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  McCormick

  
	
   

  	
  Name:

  	
  Robert McCormick

  
	
   

  	
  Title:

  	
  VP CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FISHER, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  McCormick

  
	
   

  	
  Name:

  	
  Robert McCormick

  
	
   

  	
  Title:

  	
  VP CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOLDINGS
  (for purposes of Section 8):

  
	
   

  	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  McCormick

  
	
   

  	
  Name:

  	
  Robert McCormick

  
	
   

  	
  Title:

  	
  VP CFO

  



 


Amendment No. 1


 

















 


	
   

  	
  CREDIT SUISSE AG,
  CAYMAN ISLANDS BRANCH,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William O’Daly

  
	
   

  	
  Name:

  	
  William O’Daly

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ilya Ivashkov

  
	
   

  	
  Name:

  	
  Ilya Ivashkov

  
	
   

  	
  Title:

  	
  Associate

  
				



 


Amendment No. 1


 

















 


	
   

  	
  JPMORGAN CHASE BANK,
  N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Marcus

  
	
   

  	
  Name:

  	
  Richard Marcus

  
	
   

  	
  Title:

  	
  Senior Vice President

  
				



 


Amendment No. 1


 

















 


	
   

  	
  Wachovia Capital
  Finance Corporation (Central),

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Maged Ghebrial

  
	
   

  	
  Name:

  	
  Maged Ghebrial

  
	
   

  	
  Title:

  	
  Vice President

  
				



 


Amendment No. 1


 

















 


ACKNOWLEDGED:


 


	
   

  	
  CREDIT SUISSE AG,
  CAYMAN ISLANDS BRANCH,

  
	
   

  	
  as a Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William O’Daly

  
	
   

  	
  Name:

  	
  William O’Daly

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ilya Ivashkov

  
	
   

  	
  Name:

  	
  Ilya Ivashkov

  
	
   

  	
  Title:

  	
  Associate

  
				



 


Amendment No. 1


 














 


Exhibit A


 


Amended Credit Agreement


 


See attached.


 






 










 


EXHIBIT A
to Amendment No. 1


 


COMPOSITE
CREDIT AGREEMENT


(as
amended by Amendment No. 1, dated as of April 16, 2010)


 


CREDIT AND GUARANTY
AGREEMENT


 


dated as of May 21,
2007


 


among


 


DOUGLAS DYNAMICS, L.L.C.

DOUGLAS DYNAMICS FINANCE COMPANY

FISHER, LLC

as Borrowers


 


DOUGLAS DYNAMICS, INC.,

as Guarantor,


 


THE BANKS AND FINANCIAL
INSTITUTIONS LISTED HEREIN,

as  Lenders,


 


CREDIT SUISSE SECURITIES
(USA) LLC,

as Sole Bookrunner and Sole Lead Arranger,


 


WACHOVIA CAPITAL FINANCE
CORPORATION (CENTRAL),

as Documentation Agent,


 


JPMORGAN CHASE BANK,
N.A.,

as Syndication Agent and Collateral Agent


 


and


 


CREDIT SUISSE AG, CAYMAN
ISLANDS BRANCH

as Administrative Agent


 






 


$60,000,000 Senior
Secured Revolving Credit Facility


 






 














 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS AND
  INTERPRETATION

  	
  1

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Accounting Terms

  	
  37

  
	
  1.3

  	
  Interpretation, etc.

  	
  38

  
	
  SECTION 2.

  	
  LOANS AND LETTERS OF
  CREDIT

  	
  38

  
	
  2.1

  	
  Revolving Loans

  	
  38

  
	
  2.2

  	
  Swing Line Loans

  	
  40

  
	
  2.3

  	
  Issuance of Letters of Credit and Purchase of
  Participations Therein

  	
  43

  
	
  2.4

  	
  Pro Rata Shares; Availability of Funds

  	
  47

  
	
  2.5

  	
  Use of Proceeds

  	
  47

  
	
  2.6

  	
  Evidence of Debt; Register; Lenders’ Books and
  Records; Notes

  	
  48

  
	
  2.7

  	
  Interest on Loans

  	
  49

  
	
  2.8

  	
  Conversion/Continuation

  	
  51

  
	
  2.9

  	
  Default Interest

  	
  51

  
	
  2.10

  	
  Fees

  	
  52

  
	
  2.11

  	
  Determination of Borrowing Base

  	
  53

  
	
  2.12

  	
  Voluntary Prepayments/Commitment Reductions

  	
  59

  
	
  2.13

  	
  Mandatory Prepayments

  	
  60

  
	
  2.14

  	
  Application of Prepayments/Reductions

  	
  61

  
	
  2.15

  	
  General Provisions Regarding Payments

  	
  62

  
	
  2.16

  	
  Ratable Sharing

  	
  63

  
	
  2.17

  	
  Making or Maintaining Eurodollar Rate Loans

  	
  64

  
	
  2.18

  	
  Increased Costs; Capital Adequacy

  	
  66

  
	
  2.19

  	
  Taxes; Withholding, etc.

  	
  67

  
	
  2.20

  	
  Obligation to Mitigate

  	
  69

  
	
  2.21

  	
  Defaulting Lenders

  	
  70

  
	
  2.22

  	
  Removal or Replacement of a Lender

  	
  70

  
	
  SECTION 3.

  	
  CONDITIONS PRECEDENT

  	
  72

  
	
  3.1

  	
  Closing Date

  	
  72

  
	
  3.2

  	
  Conditions to Each Credit Extension

  	
  75

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  76

  
	
  4.1

  	
  Organization; Requisite Power and Authority;
  Qualification

  	
  76

  
	
  4.2

  	
  Capital Stock and Ownership

  	
  76

  
	
  4.3

  	
  Due Authorization

  	
  76

  
	
  4.4

  	
  No Conflict

  	
  76

  
	
  4.5

  	
  Governmental Consents

  	
  77

  
	
  4.6

  	
  Binding Obligation

  	
  77

  
	
  4.7

  	
  Financial Condition

  	
  77

  
	
  4.8

  	
  Projections

  	
  78

  
	
  4.9

  	
  No Material Adverse Change

  	
  78

  
	
  4.10

  	
  No Restricted Payments

  	
  78

  
	
  4.11

  	
  Litigation; Adverse Facts

  	
  78

  
	
  4.12

  	
  Payment of Taxes

  	
  78

  



 


i

















 


	
  4.13

  	
  Properties

  	
  79

  
	
  4.14

  	
  Environmental Matters

  	
  80

  
	
  4.15

  	
  No Defaults

  	
  80

  
	
  4.16

  	
  Governmental Regulation

  	
  80

  
	
  4.17

  	
  Margin Regulations

  	
  81

  
	
  4.18

  	
  Employee Matters

  	
  81

  
	
  4.19

  	
  Employee Benefit Plans

  	
  81

  
	
  4.20

  	
  Certain Fees

  	
  82

  
	
  4.21

  	
  Solvency

  	
  82

  
	
  4.22

  	
  Collateral

  	
  82

  
	
  4.23

  	
  Disclosure

  	
  83

  
	
  4.24

  	
  Deposit Accounts

  	
  83

  
	
  SECTION 5.

  	
  AFFIRMATIVE COVENANTS

  	
  83

  
	
  5.1

  	
  Financial Statements and Other Reports

  	
  84

  
	
  5.2

  	
  Existence

  	
  89

  
	
  5.3

  	
  Payment of Taxes and Claims

  	
  89

  
	
  5.4

  	
  Maintenance of Properties

  	
  90

  
	
  5.5

  	
  Insurance

  	
  90

  
	
  5.6

  	
  Inspections; Appraisals; and Inventories

  	
  90

  
	
  5.7

  	
  Lenders Meetings

  	
  91

  
	
  5.8

  	
  Compliance with Laws

  	
  92

  
	
  5.9

  	
  Environmental

  	
  92

  
	
  5.10

  	
  Subsidiaries

  	
  93

  
	
  5.11

  	
  Additional Real Estate Assets

  	
  94

  
	
  5.12

  	
  [Reserved]

  	
  94

  
	
  5.13

  	
  Further Assurances

  	
  95

  
	
  5.14

  	
  ERISA

  	
  95

  
	
  5.15

  	
  Cash Management

  	
  95

  
	
  SECTION 6.

  	
  NEGATIVE COVENANTS

  	
  96

  
	
  6.1

  	
  Indebtedness

  	
  96

  
	
  6.2

  	
  Liens

  	
  99

  
	
  6.3

  	
  Sales and Leasebacks

  	
  101

  
	
  6.4

  	
  No Further Negative Pledges

  	
  101

  
	
  6.5

  	
  Restricted Payments

  	
  102

  
	
  6.6

  	
  Restrictions on Subsidiary Distributions

  	
  104

  
	
  6.7

  	
  Investments

  	
  104

  
	
  6.8

  	
  Financial Covenants

  	
  106

  
	
  6.9

  	
  Fundamental Changes; Asset Dispositions;
  Acquisitions

  	
  107

  
	
  6.10

  	
  Disposal of Subsidiary Interests

  	
  109

  
	
  6.11

  	
  Fiscal Year

  	
  109

  
	
  6.12

  	
  Transactions with Shareholders and Affiliates

  	
  109

  
	
  6.13

  	
  Conduct of Business

  	
  109

  
	
  6.14

  	
  Permitted Activities of Holdings

  	
  109

  
	
  6.15

  	
  Amendments or Waivers of Certain Agreements

  	
  110

  
	
  6.16

  	
  Limitation on Payments Relating to Other Debt

  	
  111

  
	
  SECTION 7.

  	
  GUARANTY

  	
  111

  



 


ii

















 


	
  7.1

  	
  Guaranty of the Obligations

  	
  111

  
	
  7.2

  	
  Contribution by Guarantors

  	
  111

  
	
  7.3

  	
  Payment by Guarantors

  	
  112

  
	
  7.4

  	
  Liability of Guarantors Absolute

  	
  113

  
	
  7.5

  	
  Waivers by Guarantors

  	
  115

  
	
  7.6

  	
  Guarantors’ Rights of Subrogation, Contribution,
  etc.

  	
  115

  
	
  7.7

  	
  Subordination of Other Obligations

  	
  116

  
	
  7.8

  	
  Continuing Guaranty

  	
  116

  
	
  7.9

  	
  Authority of Guarantors or Company

  	
  116

  
	
  7.10

  	
  Financial Condition of Company

  	
  116

  
	
  7.11

  	
  Bankruptcy, etc.

  	
  117

  
	
  7.12

  	
  Discharge of Guaranty Upon Sale of Guarantor

  	
  117

  
	
  SECTION 8.

  	
  EVENTS OF DEFAULT;
  LIQUIDITY EVENTS; CURE RIGHTS

  	
  118

  
	
  8.1

  	
  Events of Default

  	
  118

  
	
  8.2

  	
  Liquidity Event; Sponsor’s Right to Cure

  	
  121

  
	
  8.3

  	
  Financial Performance Covenant; Sponsors Right
  to Cure

  	
  122

  
	
  SECTION 9.

  	
  AGENTS

  	
  123

  
	
  9.1

  	
  Appointment of Agents

  	
  123

  
	
  9.2

  	
  Powers and Duties

  	
  123

  
	
  9.3

  	
  General Immunity

  	
  124

  
	
  9.4

  	
  Agents Entitled to Act as Lender

  	
  125

  
	
  9.5

  	
  Lenders’ Representations, Warranties and
  Acknowledgment

  	
  125

  
	
  9.6

  	
  Right to Indemnity

  	
  125

  
	
  9.7

  	
  Successor Administrative Agent and Swing Line
  Lender

  	
  126

  
	
  9.8

  	
  Collateral Documents and Guaranty

  	
  127

  
	
  9.9

  	
  Overadvances

  	
  127

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
  128

  
	
  10.1

  	
  Notices

  	
  128

  
	
  10.2

  	
  Expenses

  	
  130

  
	
  10.3

  	
  Indemnity

  	
  131

  
	
  10.4

  	
  Set-Off

  	
  132

  
	
  10.5

  	
  Amendments and Waivers

  	
  132

  
	
  10.6

  	
  Successors and Assigns; Participations

  	
  135

  
	
  10.7

  	
  Independence of Covenants

  	
  138

  
	
  10.8

  	
  Survival of Representations, Warranties and
  Agreements

  	
  138

  
	
  10.9

  	
  No Waiver; Remedies Cumulative

  	
  139

  
	
  10.10

  	
  Marshalling; Payments Set Aside

  	
  139

  
	
  10.11

  	
  Severability

  	
  139

  
	
  10.12

  	
  Obligations Several; Independent Nature of
  Lenders’ Rights

  	
  139

  
	
  10.13

  	
  Headings

  	
  140

  
	
  10.14

  	
  APPLICABLE LAW

  	
  140

  
	
  10.15

  	
  CONSENT TO JURISDICTION

  	
  140

  
	
  10.16

  	
  WAIVER OF JURY TRIAL

  	
  140

  
	
  10.17

  	
  Confidentiality

  	
  141

  
	
  10.18

  	
  Usury Savings Clause

  	
  142

  
	
  10.19

  	
  Counterparts

  	
  142

  



 


iii

















 


	
  10.20

  	
  Effectiveness

  	
  142

  



 


iv

















 


	
  APPENDICES:

  	
  A

  	
  Revolving Loan
  Commitments

  	
   

  
	
   

  	
  B

  	
  Notice Addresses

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
  4.1

  	
  Organization and
  Capital Structure

  	
   

  
	
   

  	
  4.2

  	
  Capital Stock and
  Ownership

  	
   

  
	
   

  	
  4.9

  	
  Absence of Certain
  Changes

  	
   

  
	
   

  	
  4.11

  	
  Litigation

  	
   

  
	
   

  	
  4.13

  	
  Real Estate Assets

  	
   

  
	
   

  	
  4.14

  	
  Environmental

  	
   

  
	
   

  	
  4.18

  	
  Employee Matters

  	
   

  
	
   

  	
  4.19

  	
  Employee Benefit Plans

  	
   

  
	
   

  	
  4.22

  	
  Certain Existing Liens

  	
   

  
	
   

  	
  4.24

  	
  Deposit Accounts

  	
   

  
	
   

  	
  6.1

  	
  Certain Indebtedness

  	
   

  
	
   

  	
  6.2

  	
  Certain Liens

  	
   

  
	
   

  	
  6.7

  	
  Certain Investments

  	
   

  
	
   

  	
  6.12

  	
  Certain Affiliate
  Transactions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
  A-1

  	
  Funding Notice

  	
   

  
	
   

  	
  A-2

  	
  Conversion/Continuation
  Notice

  	
   

  
	
   

  	
  A-3

  	
  Issuance Notice

  	
   

  
	
   

  	
  B-1

  	
  Revolving Loan Note

  	
   

  
	
   

  	
  B-2

  	
  Swing Line Note

  	
   

  
	
   

  	
  C

  	
  Compliance Certificate

  	
   

  
	
   

  	
  D

  	
  Opinion of Counsel for
  Credit Parties

  	
   

  
	
   

  	
  E

  	
  Assignment Agreement

  	
   

  
	
   

  	
  F

  	
  Certificate Re Non-bank
  Status

  	
   

  
	
   

  	
  G

  	
  Solvency Certificate

  	
   

  
	
   

  	
  H

  	
  Counterpart Agreement

  	
   

  
	
   

  	
  I

  	
  Pledge and Security
  Agreement

  	
   

  
	
   

  	
  J

  	
  Mortgage

  	
   

  
	
   

  	
  K

  	
  Restricted Payment
  Certificate

  	
   

  
	
   

  	
  L

  	
  Borrowing Base
  Certificate

  	
   

  
	
   

  	
  M

  	
  Collateral Access
  Agreement

  	
   

  
	
   

  	
  N

  	
  Intercreditor Agreement

  	
   

  
	
   

  	
  O

  	
  Fixed Charge Coverage Compliance Certificate

  	
   

  



 


v

















 


CREDIT AND GUARANTY
AGREEMENT


 


CREDIT AND GUARANTY AGREEMENT, dated as of May 21, 2007 (the
“Agreement”), by and among Douglas
Dynamics, Inc., a Delaware corporation (“Holdings”), Douglas
Dynamics, L.L.C., a Delaware limited liability company and a direct
wholly-owned Subsidiary of Holdings (the “Company”  or the “Borrower Representative”),
Fisher, LLC, a Delaware limited liability company (“Fisher”)
and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,” and together with Fisher and the Borrower
Representative, each a “Borrower” and
collectively the “Borrowers”) the
banks and financial institutions having Revolving Loan Commitments or listed on
the signature pages hereof (together with their respective successors and
assigns, each individually referred to herein as a “Lender” and
collectively as “Lenders”), Credit Suisse Securities
(USA) LLC, as sole bookrunner and sole lead arranger (the “Arranger”),
JPMorgan Chase Bank, N.A., as syndication agent (in such capacity, “Syndication Agent”), as Wachovia Capital Finance Corporation
(Central), as documentation agent (in such capacity, “Documentation Agent”),
JPMorgan Chase Bank, N.A., as collateral agent for the Lenders (in such
capacity, the “Collateral Agent”) and Credit Suisse
AG, Cayman Islands Branch  (“Credit
Suisse”) as administrative agent for the Lenders (in such
capacity, “Administrative Agent”).


 


RECITALS:


 


WHEREAS, the Borrower Representative has
requested, and the Lenders have agreed, to extend certain credit facilities to
the Borrowers on the terms and conditions of this Agreement.


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the parties
hereto, such parties hereby agree as follows:


 


SECTION 1.   DEFINITIONS
AND INTERPRETATION


 


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


 


“ABL Priority Collateral”  has the meaning assigned to that term in the Intercreditor
Agreement.


 


“Account Control Event”  means the occurrence and continuance of (i) any Event
of Default, or (ii) any Liquidity Event (A) for which a Liquidity
Event Cure Notice has not been properly delivered in accordance with Section 8.2
within three (3) days after the occurrence thereof, (B) for which a
Liquidity Event Cure Notice was timely delivered and a Liquidity Event Cure did
not timely occur in accordance with Section 8.2 or (C) for which no
Liquidity Event Cure Notice is available. 
For purposes of this Agreement, the occurrence of an Account Control
Event shall be deemed continuing at the Administrative Agent’s or Collateral
Agent’s option (x) so long as such Event of Default exists, and/or (y) if
the Account Control Event arises as a result of a Liquidity Event described in
clause (ii) above, until Excess Availability is $6.0 million or more for
thirty (30) consecutive days (unless the Account Control Event has ceased to
exist as provided in Section 8.2), in which case an Account Control Event
shall no longer be deemed to


 


1

















 


be continuing for
purposes of this Agreement; provided that
a Account Control Event shall be deemed continuing (even if an Event of Default
is no longer continuing and/or such Liquidity Event has ceased to exist for
thirty (30) consecutive days) at all times after an Account Control Event has
occurred and been discontinued on six (6) occasions after the Closing
Date.


 


“Account Debtor”
means, “Account Debtor,” as such term is defined in the UCC as in effect on the
date hereof in the State of New York.


 


“Accounts”
means all “accounts”, as such term is defined in the UCC as in effect on the
date hereof in the State of New York, in which such Person now or hereafter has
rights; provided, however, that for purposes of calculating the
Borrowing Base, the term “Accounts” shall not include Excluded Deposit Accounts
(as defined below).


 


“ACH” mean automated clearing house transfers.


 


“Additional
Co-Borrower” shall mean any wholly-owned Domestic Subsidiary of a Borrower which may
hereafter be approved by the Administrative Agent and the Collateral Agent in
good faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment which (a) is currently able to
prepare all collateral reports in a comparable manner to the Borrowers’
reporting procedures, (b) has executed and delivered to the Administrative
Agent and the Collateral Agent such joinder agreements to this Agreement,
contribution and set-off agreements and other Collateral Documents as the
Administrative Agent or the Collateral Agent have reasonably requested and so
long as each of the Administrative Agent and the Collateral Agent have received
and approved, in their reasonable discretion, all UCC search results necessary
to confirm the Collateral Agent’s First Priority or Second Priority Lien, as
applicable, on all of such Additional Co-Borrower’s real, personal and mixed
property (including Capital Stock).


 


“Administrative Agent” has the meaning assigned to that term in the preamble
hereto.


 


“Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with
respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum
obtained by dividing (i) (a) the rate per annum determined by the
Administrative Agent by reference to the British Bankers’ Association Interest
Settlement Rates for deposits (for delivery on the first day of such period)
with a term equivalent to such period in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date (as set forth by Bloomberg Information Service or any
successor thereto or any other service selected by Administrative Agent which
has been nominated by the British Bankers’ Association as an authorized
information vendor for the purpose of displaying such rates), or (b) in
the event the rate referenced in the preceding clause (a) is not
available, the rate per annum equal to the offered quotation rate to first
class banks in the London interbank market by Credit Suisse for deposits (for
delivery on the first day of the relevant period) in Dollars of amounts in same
day funds comparable to the principal amount of the applicable Loan of
Administrative Agent, in its capacity as a Lender, for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to such
period as of approximately 11:00 a.m. (London, England time) on


 


2

















 


such Interest Rate
Determination Date, by (ii) an amount equal to (a) one minus (b) the
Applicable Reserve Requirement.


 


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


 


“Affected Lender” has the meaning assigned to that term in Section 2.17(b).


 


“Affected Loans” has the meaning assigned to that term in Section 2.17(b).


 


“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession, directly
or indirectly, of the power (i) to vote 10% or more of the Securities
having ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.


 


“Agent”
means each of Administrative Agent, Collateral Agent, Syndication Agent and
Documentation Agent.


 


“Aggregate Amounts Due” has the meaning assigned to that term in Section 2.16.


 


“Aggregate Payments” has the meaning assigned to that term in Section 7.2.


 


“Agreement” has the meaning assigned to that term in the preamble hereto.


 


“Applicable Margin” means a percentage, per annum, equal to (i) initially,
for any Base Rate Loans, 0.50% and for any Eurodollar Rate Loans, 1.50%, and (ii) following
the delivery of the Compliance Certificate in respect of Fiscal Year 2007,
determined by reference to the applicable Performance Level in effect from time
to time set forth below:


 


	
  Performance Level

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  
	
  Base Rate Applicable Margin

  and

  Swing Line Applicable Margin

  	
   

  	
   0.25

  	
  %

  	
   0.50

  	
  %

  
	
  Eurodollar Rate Applicable Margin

  	
   

  	
   1.25

  	
  %

  	
   1.50

  	
  %

  



 


3

















 


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


 


“Ares Group Investors” means  (i) the
Ares Corporate Opportunities Fund, L.P. (the “Ares Limited Partnership”),
(ii) ACOF Management, L.P., (iii) ACOF Operating Manager, L.P., (iv) Ares
Management, Inc., (v) Ares Management LLC, (vi) any limited
partners of any of the foregoing entities and (vii) partners, members,
managing directors, officers or employees of any of those entities referenced
in clauses (ii) through (v), provided that each Person set forth in
clauses (vi) and (vii) shall only constitute an Ares Group Investor
so long as it gives a proxy to, or otherwise agrees that it will vote in a
manner consistent with, the Ares Limited Partnership (except to the extent
otherwise required by ERISA or other applicable law) and the entity to which it
is required to give a proxy to or otherwise vote consistently with continues to
own Capital Stock in Parent.


 


“Arranger” has the meaning assigned to that term in the preamble hereto.


 


“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person (other than the Borrowers or any
Guarantor Subsidiary), in one transaction or a series of transactions, of all
or any part of Holdings’, Company’s, or any of its Subsidiaries’ businesses,
assets or properties of any kind, whether real, personal, or mixed and whether
tangible or intangible, whether now owned or hereafter acquired, including,
without limitation, the Capital Stock of any of Holdings’ Subsidiaries, other
than (i) inventory sold or leased in the ordinary course of business
(excluding any such sales by operations or divisions discontinued or to be
discontinued), (ii) equipment that is surplus,  obsolete, worn-out, or no longer used or useful in the
business of Holdings, Company or any of its Subsidiaries, (iii) leasehold
interests that are no longer used or useful in the business of Holdings,
Company or any of its Subsidiaries, (iv) dispositions, by means of
trade-in, of equipment used in the ordinary course of business, so long as such
equipment is replaced, substantially concurrently, by like-kind equipment in an
effort to upgrade the Facilities of Company and its Subsidiaries, (v) Cash
and Cash Equivalents used in a manner not prohibited by the Credit Documents or
the Term Loan Documents, and (vi) sales of other assets for aggregate
consideration of less than $1,000,000  with
respect to any transaction or series of related transactions and less than
$3,000,000  in the aggregate during
any calendar year (provided, that for purposes of calculating the amounts set
forth in this clause (vi),


 


4

















 


any transactions or
series of related transactions involving aggregate consideration of $50,000 or
less may be excluded).


 


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


 


“Attributable Indebtedness” in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended.  Such present value shall be
calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.


 


“Aurora Group Investors” means (i) Aurora Equity Partners II L.P. and
Aurora Overseas Equity Partners II, L.P. (the “Limited Partnerships”),
(ii) Aurora Capital Partners II L.P. and Aurora Overseas Capital Partners
II, L.P. (the “General Partners”), (iii) Aurora
Advisors II LLC and Aurora Overseas Advisors, II, LDC (the “Ultimate
General Partners”), (iv) any limited partners of the
Limited Partnerships or any limited partners of the General Partners, provided
that such limited partner gives a proxy to, or otherwise agrees that it will
vote in a manner consistent with, the Limited Partnerships (except to the
extent otherwise required by ERISA or other applicable law) or the General
Partners, (v) any managing director or employee of Aurora Management
Partners LLC, provided that such managing director or employee gives a
proxy to, or otherwise agrees that he or she will vote in a manner consistent
with the Limited Partnerships (except to the extent otherwise required by ERISA
or other applicable law) or the General Partners, (vi) any member of the
Advisory Board of Aurora Management Partners LLC, provided that such
member gives a proxy to, or otherwise agrees that he or she will vote in a
manner consistent with, the Limited Partnerships (except to the extent
otherwise required by ERISA or other applicable law) or the General Partners, (vii) any
Affiliate of Aurora Management Partners LLC, provided that such Affiliate gives
a proxy to, or otherwise agrees that it will vote in a manner consistent with,
the Limited Partnerships or the General Partners, and (viii) any
investment fund or other entity controlled by or under common control with, any
one or more of the Ultimate General Partners or Aurora Management Partners LLC
or the principals that control any one or more of the Ultimate General Partners
or Aurora Management Partners LLC; provided that each Person set forth
in clauses (iv) through (viii) shall only constitute an Aurora Group
Investor so long as the entity to which it is required to give a proxy to or
otherwise vote consistently with continues to own Capital Stock in Parent.


 


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


 


“Average Daily Excess Availability” means the average daily
Excess Availability for the immediately preceding Fiscal Quarter.


 


5














 


“Banking Services Agreement” means each and any of the
following bank services provided to any Credit Party by any Lender Counterparty
pursuant to a Banking Services Agreement including: (a) commercial credit
cards, (b) stored value cards and (c) treasury management services (including,
without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services).


 


“Bankruptcy Code” means Title 11 of the United States Code
entitled “Bankruptcy,” as now and hereafter in effect, or any successor
statute.


 


“Base Rate” means, for any day, a rate per annum equal to the greater of (i) the
Prime Rate in effect on such day and (ii) the Federal Funds Effective Rate
in effect on such day plus 1⁄2 of 1%.


 


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


 


“Blocked Account”
means any Deposit Account subject to a Blocked Account Agreement.


 


“Blocked Account Agreement”  means an account control agreement on terms reasonably
satisfactory to the Collateral Agent.


 


“Blocked Account Bank”
means each bank with whom a Blocked Account Agreement has been, or is required
to be, executed in accordance with the terms hereof.


 


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


 


“Borrower” means the Borrower Representative, DD Finance, Fischer and any Additional
Co-Borrower that may become party hereto.


 


“Borrowing Base”
means at any time, an amount equal to the lesser of:


 


(a) the sum of, without duplication:


 


(i)             the
face amount of Eligible Accounts of Borrowers multiplied by the advance rate of
85%, plus


 


(ii)          the
lesser of (A) the advance rate of 70% of the Cost of Eligible Inventory of
Borrowers, or (B) the advance rate of 85% of the product of the Net
Recovery Cost Percentage multiplied by the Cost of Eligible Inventory of
Borrowers, plus


 


(iii)       the balance
of Cash in Deposit Accounts subject to a Blocked Account Agreement; minus


 


6

















 


(iv)      effective
immediately upon notification thereof to Borrower Representative by the
Collateral Agent or the Administrative Agent, any Reserves established from
time to time by the Collateral Agent or the Administrative Agent in good faith
and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment;


 


The Borrowing Base at any
time shall (i) be determined by reference to the most recent Borrowing
Base Certificate theretofore delivered to the Collateral Agent and the
Administrative Agent with such adjustments as Administrative Agent or
Collateral Agent deem appropriate in good faith and in the exercise of
reasonable (from the perspective of a secured asset-based lender) business
judgment to assure that the Borrowing Base is calculated in accordance with the
terms of this Agreement and (ii) be computed no less than monthly; provided
that the Borrower Representative may compute the Borrowing Base more frequently
(but in no event, absent consent from the Collateral Agent, more frequently
than weekly), which Borrowing Base shall become effective upon delivery of a
Borrowing Base Certificate to the Administrative Agent and the Collateral
Agent; and


 


(b) the maximum amount of secured Indebtedness
under the Credit Agreement (as defined in the Senior Note Indenture) that is
permitted by Sections 4.7 and 4.8 of the Senior Note Indenture.


 


The Administrative Agent or
the Collateral Agent may, in good faith and in the exercise of their respective
reasonable (from the perspective of a secured asset-based lender) business
judgment adjust Reserves.


 


“Borrowing Base
Certificate” means an Officers’ Certificate from Borrower
Representative, substantially in the form of (or in such other form as may,
from time to time, be mutually agreed upon by Borrower Representative,
Collateral Agent and Administrative Agent), and containing the information
prescribed by Exhibit L, delivered to the Administrative Agent and the
Collateral Agent setting forth Borrower Representative’s calculation of the Borrowing
Base.


 


“Business Day” means (i) any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the States of New York or
Wisconsin or is a day on which banking institutions located in either such
state are authorized or required by law or other governmental action to close
and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate
Loans, the term “Business Day” shall mean any day
which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in Dollar deposits in the London interbank
market.


 


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


 


“Capital Stock” means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent


 


7

















 


ownership interests in a
Person (other than a corporation), including, without limitation, partnership
interests and membership interests, and any and all warrants, rights or options
to purchase or other arrangements or rights to acquire any of the foregoing.


 


“Cash”
means money, currency or a credit balance in any demand or deposit account.


 


“Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to
interest and principal by the United States Government or (b) issued by
any agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, a rating of at
least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial
paper maturing no more than one year from the date of creation thereof and
having, at the time of the acquisition thereof, a rating of at least A-1 from
S&P or at least P-1 from Moody’s; (iv) certificates of deposit, time
deposits or bankers’ acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia that (a) is at least “adequately capitalized” (as defined in the
regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (v) shares
of any money market mutual fund that (a) has substantially all of its
assets invested continuously in the types of investments referred to in clauses
(i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody’s.


 


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


 


“Change of Control”
means, at any time, (i) any Person or “group” (within the meaning of Rules 13d-3
and 13d-5 under the Exchange Act) other than Sponsor beneficially owns,
directly or indirectly, more than 35%, on a fully diluted basis, of the
outstanding Capital Stock (measured only by voting power) of Holdings entitled
(without regard to the occurrence of any contingency) to vote for the election
of members of the board of directors (or similar governing body) of Holdings,
unless Sponsor beneficially owns and controls, on a fully diluted basis, more
of the outstanding Capital Stock (measured only by voting power) of Holdings
entitled (without regard to the occurrence of any contingency) to vote for the
election of members of the board of directors (or similar governing body) of
Holdings than any other Person or “group” (within the meaning of Rules 13d-3
and 13d-5 under the Exchange Act); or (ii) Holdings shall cease to beneficially
own and control 100% on a fully diluted basis of the economic and voting
interests in the Capital Stock of Company.


 


“Change in Law”
has the meaning assigned to that term in Section 2.18(a).


 


“Closing Date”  means May 21, 2007.


 


8

















 


“Collateral” means, collectively, all of the real, personal and mixed property
(including Capital Stock) in which Liens are purported to be granted pursuant
to the Collateral Documents as security for the Obligations.


 


“Collateral Access
Agreement” shall mean a Collateral Access Agreement, substantially
in the form of Exhibit M, or such other form as may reasonably be
acceptable to the Administrative Agent and Collateral Agent.


 


“Collateral Agent”  has the meaning assigned to that term in
the preamble hereto.


 


“Collateral Documents” means the Pledge and Security Agreement, the Mortgages,
the Blocked Account Agreements, the Intercreditor Agreement and all other
instruments, documents and agreements delivered by any Credit Party pursuant to
this Agreement or any of the other Credit Documents in order to grant to
Collateral Agent, for the benefit of Lenders, a Lien on any real, personal or
mixed property of that Credit Party as security for the Obligations (or to
perfect any Liens so granted).


 


“Collection Account”
has the meaning assigned to such term in Section 5.15(a).


 


“Commitment” means any Revolving Loan Commitment.


 


“Company” has the meaning assigned to that term in the preamble hereto.


 


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


 


“Consolidated Adjusted EBITDA” means, for any period, an amount determined for
Company and its Subsidiaries on a consolidated basis equal to the total of (a) Consolidated
Net Income, plus (b) the sum, without duplication, of each of the
following to the extent deducted in the calculation of Consolidated Net Income
for such period (i) Consolidated Interest Expense and non-Cash interest
expense, (ii) provisions for taxes based on income, (iii) total
depreciation expense, (iv) total amortization expense (including
amortization of goodwill, other intangibles, and financing fees and expenses), (v) non-cash
impairment charges, (vi) non-cash expenses resulting from the grant of
stock and stock options and other compensation to management personnel of
Company and its Subsidiaries pursuant to a written incentive plan or agreement,
(vii) other non-Cash items that are unusual or otherwise non-recurring
items, (viii) expenses or fees under the Management Services Agreement, as
in effect on December 16, 2004 including any payments made under the
Management Services Agreement and comprising all or any portion of the
Qualifying IPO Payment, (ix) any extraordinary losses and non-recurring
charges during any period (including severance, relocation costs, one-time
compensation charges and losses or charges associated with Interest Rate
Agreements), (x) restructuring charges or reserves (including costs
related to closure of Facilities), (xi) any transaction costs incurred in
connection with the issuance of Securities or any refinancing transaction, in
each case whether or not such transaction is consummated (xii) any fees and
expensed related to any Permitted Acquisitions and (xiii) fees, expenses and
other transaction costs incurred by Company and its Subsidiaries during such
period in connection with the transactions contemplated by the First Amendment,
the Second Amendment to Term Loan Facility and the Qualifying IPO plus (c) solely
for the purpose of determining compliance


 


9

















 


with the financial
covenant set forth in Section 6.8(a), and not for any other purpose, the
Financial Performance Covenant Cure Amount, minus (d) the sum,
without duplication, of (i) non-Cash items increasing Consolidated Net
Income for such period that are unusual or otherwise non-recurring items, (ii) cash
payments made during such period reducing reserves or liabilities for accruals
made in prior periods but only to the extent such reserves or accruals were
added back to “Consolidated Adjusted EBITDA” in a prior period pursuant to
clause (b)(vii) or (b)(viii) above, and (iii) Restricted
Payments made during such period to Holdings pursuant to Section 6.5(c)(i) (other
than any such Restricted Payments made to Holdings pursuant to Section 6.5(c)(i) for
the purpose of paying fees, expenses and other transaction costs paid in cash
during such period in connection with the transactions contemplated by the
First Amendment, the Second Amendment to Term Loan Facility and the Qualifying
IPO).


 


“Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures of Company and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in “purchase
of property and equipment” or similar items reflected in the consolidated statement
of cash flows of Company and its Subsidiaries, but excluding expenditures
constituting the purchase price for Permitted Acquisitions and amounts
constituting Net Asset Sale Proceeds and Net Insurance/Condemnation Proceeds
which are reinvested in the business of Company and its Subsidiaries in
accordance with Section 2.13(a) or Section 2.13(b),
respectively, by Company and its Subsidiaries during such period.


 


“Consolidated
Coverage Ratio” on any date of determination (the “Transaction Date”) means the ratio, on a pro forma basis, of (a) the aggregate
amount of Consolidated Adjusted EBITDA for the Test Period to (b) the
aggregate Consolidated Fixed Charges during the Test Period; provided, that for purposes of such
calculation: (1) Permitted Acquisitions which occurred during the Test
Period or subsequent to the Test Period and on or prior to the Transaction Date
shall be assumed to have occurred on the first day of the Test Period, (2) transactions
giving rise to the need to calculate the Consolidated Coverage Ratio and the
application of the proceeds therefrom (except as otherwise provided in this
definition) shall be assumed to have occurred on the first day of the Test
Period, (3) the incurrence of any Indebtedness (including the issuance of
any Disqualified Capital Stock) during the Test Period or subsequent to the
Test Period and on or prior to the Transaction Date (and the application of the
proceeds therefrom to the extent used to refinance or retire other
Indebtedness) (other than ordinary working capital borrowings) shall be assumed
to have occurred on the first day of the Test Period, (4) the permanent
repayment of any Indebtedness (including the redemption of any Disqualified
Capital Stock) during the Test Period or subsequent to the Test Period and on
or prior to the Transaction Date (other than ordinary working capital
borrowings) shall be assumed to have occurred on the first day of the Test
Period, (5) the Consolidated Fixed Charges attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the average rate in effect from the
beginning of the Test Period to the Transaction Date had been the applicable
rate for the entire period, unless Company or any of its Subsidiaries is a
party to a Hedge Agreement (which shall remain in effect for the 12-month
period immediately following the Transaction Date) that has the effect of
fixing the interest rate on the date of computation, in which case such rate
(whether higher or lower) shall be used, and (6) amounts attributable to
operations or businesses permanently discontinued or disposed of prior to the
Transaction Date,


 


10

















 


shall be excluded,
except, in the case of a determination of Consolidated Fixed Charges, only to
the extent that the obligations giving rise to such Consolidated Fixed Charges
would no longer be obligations contributing to Consolidated Fixed Charges
subsequent to the Transaction Date.


 


“Consolidated Fixed Charges” means, for any period, the sum, without duplication,
of the amounts determined for Company and its Subsidiaries on a consolidated
basis equal to (i) Consolidated Interest Expense for such period, (ii) scheduled
payments for such period of principal on Consolidated Total Debt, (iii) Consolidated
Capital Expenditures for such period other than those financed with secured
Indebtedness permitted by Sections 6.1 and 6.2 or made or incurred pursuant to Section 6.8(b)(ii),
(iv) the portion of taxes based on income actually paid in cash during
such period by Company or any of its Subsidiaries whether for such period or
any other period and (v) Restricted Payments permitted under Section 6.5(c)(iii) and
which are paid in cash during such period.


 


“Consolidated Interest Expense” means, for any period, (i) total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) payable in cash of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under Interest
Rate Agreements, but excluding, however, any amounts referred to in Section 2.10(d) payable
on or before the Closing Date and amounts with respect to the termination of
Interest Rate Agreements entered into within 90 days of the Closing Date, minus
(ii) the aggregate amount of interest income of Company and its
Subsidiaries during such period paid in cash.


 


“Consolidated Net Income” means, for any period, (i) the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, minus
(ii) (a) the income (or loss) of any Person (other than a Subsidiary
of Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (b) the income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary of Company or
is merged into or consolidated with Company or any of its Subsidiaries or that
Person’s assets are acquired by Company or any of its Subsidiaries, (c) the
income of any Subsidiary of Company to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (d) any after-tax
gains or losses attributable to Asset Sales or returned surplus assets of any
Pension Plan, and (e) (to the extent not included in clauses (a) through
(d) above) any net extraordinary gains or net extraordinary losses.


 


“Consolidated Secured Debt” means, as at any date of determination,
the Consolidated Total Debt  of
Company and its Subsidiaries determined on a consolidated basis (and without
duplication) in accordance with GAAP that is secured by Liens on any of the
assets of the Company or any of its Subsidiaries.


 


11

















 


“Consolidated Total Debt” means, as at any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP; provided,
that the amount of revolving Indebtedness to be included at the date of
determination shall be equal to the average of the balances of such revolving
Indebtedness as of the end of each of the prior four calendar quarters (except
that with respect to the first four calendar quarters after the Closing Date,
the amount of revolving Indebtedness to be included shall be based on the
average of the quarter end balances from the Closing Date through the date of
determination).


 


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


 


“Contributing Guarantors”  has the meaning assigned to that term in Section 7.2.


 


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


 


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


 


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


 


“Counterpart Agreement” means a Counterpart Agreement substantially in the
form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.


 


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


 


“Credit Document” means any of this Agreement, the Notes, if any, the
Collateral Documents, any documents or certificates executed by Borrower
Representative in favor of Issuing Bank relating to Letters of Credit, and all
other documents, instruments or agreements executed and delivered by a Credit
Party for the benefit of any Agent, Issuing Bank or any Lender in connection
herewith.


 


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


 


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


 


12

















 


“Cumulative Interest Expense”  means the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (A) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the following
sentence, interest attributable to Capital Leases and Attributable
Indebtedness) of the Company and its Subsidiaries during such period, including
(I) amortization of debt issuance costs, original issue discount, debt
discounts or premium and other financing fees and expenses and non-cash
interest payments or accruals on any Indebtedness, (II) the interest
portion of all deferred payment obligations of the Company and its
Subsidiaries, and (III) all commissions, discounts and other fees and
charges owed by the Company and its Subsidiaries with respect to bankers’
acceptances and letters of credit financings and Hedge Agreements, in each case
to the extent attributable to such period, and (B) the amount of all cash
dividends paid by the Company or any of its Subsidiaries in respect of
preferred stock (other than by Subsidiaries of the Company to the Company or
its wholly owned Subsidiaries).


 


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


 


“Current Twelve-Month
Period” has the meaning assigned to such term in Section 8.3.


 


“DD Finance”  has the meaning assigned to that term in
the preamble.


 


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


 


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


 


“Default Period” means, with respect to any Defaulting Lender, the
period commencing on the date of the applicable Funding Default and ending on
the earliest of the following dates:  (i) the
date on which all Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (ii) the
date on which (a) the Default Excess with respect to such Defaulting
Lender shall have been reduced to zero (whether by the funding by such
Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the
non-pro rata application of any voluntary or mandatory prepayments of the Loans
in accordance with the terms of Section 2.12 or Section 2.13 or by a
combination thereof) and (b) such Defaulting Lender shall have delivered
to Company and Administrative Agent a written reaffirmation of its intention to
honor its obligations hereunder with respect to its Commitments, and (iii) the
date on which Company, Administrative Agent and Requisite Lenders waive all
Funding Defaults of such Defaulting Lender in writing.


 


“Defaulting Lender” has the meaning assigned to that term in Section 2.21.


 


13

















 


“Defaulted Loan” has the meaning assigned to that term in Section 2.21.


 


“Deposit Account”
means each checking or other demand deposit account maintained by any of the
Credit Parties other than any Excluded Deposit Accounts.  All funds in each Deposit Account shall be
conclusively presumed to be Collateral and proceeds of Collateral and the
Agents and the Lenders shall have no duty to inquire as to the source of the
amounts on deposit in any Deposit Account.


 


“Disqualified Capital Stock” means with respect to any Person, (a) Capital
Stock of such Person that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event or the passage of time or both would be, required to be redeemed or
repurchased including at the option of the holder thereof by such Person or any
of its Subsidiaries, in whole or in part, on or prior to 91 days following the
Maturity Date and (b) any Capital Stock of any Subsidiary of such Person
other than any common equity with no preferences, privileges, and no redemption
or repayment provisions.  Notwithstanding
the foregoing, any Capital Stock of the Company, DD Finance or Fisher that
would constitute Disqualified Capital Stock solely because the holders thereof
have the right to require the Company, DD Finance or Fischer to repurchase such
Capital Stock upon the occurrence of a change of control or an asset sale shall
not constitute Disqualified Capital Stock if the terms of such Capital Stock
provide that the Company, DD Finance or Fisher may not repurchase or redeem any
such Capital Stock pursuant to such provisions prior to the prepayment of the
Loans as are required by this Agreement.


 


“Documentation Agent” has the meaning assigned to that term in the preamble
hereto.


 


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


 


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


 


“Eligible Accounts”
has the meaning assigned to such term in Section 2.11(a).


 


“Eligible Assignee” means (i) any Lender, any Affiliate of any
Lender and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof), and Sponsor and any fund or
account affiliated with Sponsor (provided that, none of the Ares Limited
Partnership, the Limited Partnerships, and to the extent holding any Capital
Stock in Holdings, any other Ares Group Investor or Aurora Group Investor,
shall be deemed to be a “Lender” for purposes of voting on any matters
(including the granting of any consents or waivers) with respect to any of the
Credit Documents) and (ii) any commercial bank, insurance company,
investment or mutual fund or other entity that is an “accredited investor” (as defined
in Regulation D under the Securities Act) and which extends credit or buys
loans as one of its businesses; provided, no Affiliate of Holdings
(other than any existing Lender, Affiliate of such Lender, Sponsor or any fund
or account affiliated with Sponsor) shall be an Eligible Assignee.


 


“Eligible Inventory”
has the meaning assigned to such term in Section 2.11(b).


 


14

















 


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


 


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


 


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


 


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


 


“ERISA Affiliate” means, as applied to any Person on or after the date
of the closing of the transactions contemplated by the Purchase Agreement, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue
Code of which that Person is a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of
the Internal Revenue Code of which that Person, any corporation described in
clause (i) above or any trade or business described in clause (ii) above
is a member.


 


“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043(c) of
ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the PBGC has been
waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan; (iii) the provision by the administrator of
any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice
of intent to terminate such plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting in
liability to Holdings, any of its Subsidiaries or any of their respective
Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan; (vi) the
imposition, or the


 


15

















 


occurrence of any events
or condition that could reasonably be expected to result in the imposition, of
liability on Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason
of the application of Section 4212(c) of ERISA; (vii) the
occurrence of an act or omission which could give rise to the imposition on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
of fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Employee Benefit Plan (which
fines, penalties, taxes or related charges, for purposes of Section 4.18,
shall be material); (viii) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan or the assets
thereof, or against Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates in connection with any Employee Benefit Plan; (ix) receipt
from the Internal Revenue Service of notice of the failure of any Pension Plan
(or any other Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any Pension
Plan to qualify for exemption from taxation under Section 501(a) of
the Internal Revenue Code; or (x) the imposition of a Lien pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect
to any Pension Plan.


 


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


 


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


 


“Excess Availability” means, at any time, (a) the lesser of (i) the
aggregate Revolving Loan Commitments of all of the Lenders and (ii) the
Borrowing Base on the date of determination less
(b) all outstanding Loans and Letter of Credit Usage.


 


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


 


“Excluded Deposit Accounts”
means, collectively, (a) Deposit Accounts established solely for the
purpose of funding payroll and trust accounts and funded solely with amounts
necessary to cover then outstanding payroll liabilities and amounts required to
be retained in such trust accounts, as well as minimum balance requirements; (b) Deposit
Accounts with amounts on deposit that, when aggregated with the amounts on
deposit in all other Deposit Accounts for which a Control Agreement has not
been obtained (other than those specified in clause (a) and (c)), do not
at any time exceed $4,000,000; (c) Deposit Accounts, with amounts on
deposit which in the aggregate that do not at any time exceed $1,000,000, held
at a financial institution that is not, for United Stated federal income tax
purposes (i) an individual who is a citizen or resident of the United
States or (ii) a corporation, partnership or other entity treated as a
corporation or partnership created or organized in or under the laws of the
United States, or any political subdivision thereof; (d) zero balance
disbursement accounts; and (e) Deposit Accounts, with amounts on deposit
which in the aggregate do not at any time exceed $500,000, the sole proceeds of
which are funds received by a Loan Party from credit card sales; provided that,
in each of the foregoing cases, if reasonably requested by the Collateral Agent
or the


 


16

















 


Administrative Agent, the
Borrower Representative shall provide such Agent with periodic updates of the
account numbers and names of all financial institutions where such Deposit
Accounts are maintained.


 


“Existing Credit
Agreement” means the Amended and Restated Credit and Guaranty
Agreement dated as of December 16, 2004, by and among Holdings, the
Borrower Representative, certain subsidiaries of the Borrower Representative as
guarantors and Credit Suisse as administrative agent, as previously amended,
restated, amended and restated, supplemental or modified prior to the Closing
Date.


 


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


 


“Fair Share” has the meaning assigned to that term in Section 7.2.


 


“Fair Share Contribution Amount” has the meaning assigned to that term in Section 7.2.


 


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


 


“Financial Performance Covenant” has the
meaning assigned to such term in Section 8.3.


 


“Financial Performance
Covenant Cure Amount”  has the
meaning assigned to such term in Section 8.3.


 


“Financial Performance
Covenant Cure Notice”  has the
meaning assigned to such term in Section 8.3.


 


“Financial Performance
Covenant Cure Right” has the meaning assigned to such term in Section 8.3.


 


“Financial Plan” has the meaning assigned to that term in Section 5.1(i).


 


“First Amendment” means Amendment No. 1 to Credit and
Guaranty Agreement, dated as of April 16, 2010 among Holdings, the
Company, Fisher, DD Finance and the Lenders party thereto.


 


17














 


“First Amendment Effective Date” means the date on which the
First Amendment became effective in accordance with its terms.


 


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


 


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


 


“Fiscal Year” means the fiscal year of Holdings and its Subsidiaries ending on December 31
of each calendar year.


 


“Fisher” has the
meaning assigned to that term in the preamble.


 


“Fixed Charge Coverage Compliance Certificate” means a Compliance Certificate
substantially in the form of Exhibit O.


 


“Fixed Charge Coverage Ratio” means the ratio of (i) the aggregate amount of
Consolidated Adjusted EBITDA for the Test Period, to (ii) the aggregate
Consolidated Fixed Charges during the Test Period.


 


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


 


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


 


“Funding Default” has the meaning assigned to that term in Section 2.21.


 


“Funding Guarantors” has the meaning assigned to that term in Section 7.2.


 


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


 


“GAAP”
means, subject to the limitations on the application thereof set forth in Section 1.2,
United States generally accepted accounting principles in effect as of the date
of determination thereof.


 


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


 


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


 


18

















 


“Grantor” has the meaning assigned to that term in the Pledge and Security
Agreement.


 


“Guaranteed Obligations”  has the meaning assigned to that term in Section 7.1.


 


“Guarantor” means each of (i) Holdings (ii) each Domestic Subsidiary of
Holdings (other than any Domestic Subsidiary that is a Borrower) (iii) to
the extent no adverse tax consequences to Company would result therefrom, each
Foreign Subsidiary of Holdings.


 


“Guarantor Subsidiary” means each Guarantor other than Holdings.


 


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


 


“Hazardous Materials” means any chemical, material, waste or substance,
exposure to which is prohibited, limited or regulated by any Governmental
Authority.


 


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


 


“Hedge Agreement” means an Interest Rate Agreement or a Currency
Agreement entered into with a Lender Counterparty.


 


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


 


“Holdings” has the meaning assigned to that term in the preamble hereto.


 


“Holdings Equity Proceeds”
means the proceeds of any sale of Capital Stock (other than
Disqualified Capital Stock) of Holdings following the First Amendment Effective
Date (and excluding any proceeds of the Qualifying IPO), in each case, only to the extent that (i) such
proceeds are held by Holdings in the form of cash or Cash Equivalents, (ii) such
proceeds are not contributed by Holdings to the Company or any Subsidiary and (iii) the
Restricted Payment Amount is not increased in respect of such proceeds.


 


“Increased-Cost Lenders” has the meaning assigned to that term in Section 2.22.


 


“Indebtedness” as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes payable
and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money (excluding accounts payable which
are classified as current


 


19

















 


liabilities in accordance
with GAAP and accrued expenses in each case incurred in the ordinary course of
business); (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA or with respect to earn-outs incurred and paid when due in
connection with Permitted Acquisitions), which purchase price is due more than
six months from the date of incurrence of the obligation in respect thereof; (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person; (vi) the
face amount of any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings; (vii) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another; (viii) any
obligation of such Person the primary purpose or intent of which is to provide
assurance to an obligee that the obligation of the obligor thereof will be paid
or discharged, or any agreement relating thereto will be complied with, or the
holders thereof will be protected (in whole or in part) against loss in respect
thereof; (ix) any liability of such Person for an obligation of another
through any agreement (contingent or otherwise) (a) to purchase,
repurchase or otherwise acquire such obligation or any security therefore, or
to provide funds for the payment or discharge of such obligation (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise) or (b) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (a) or (b) of this clause (ix), the
primary purpose or intent thereof is as described in clause (viii) above; (x) all
net payment obligations of such Person in respect of any exchange traded or
over the counter derivative transaction, including, without limitation, any
Interest Rate Agreement and Currency Agreement, whether entered into for
hedging or speculative purposes; (xi) the principal balance outstanding under
any synthetic lease, tax retention lease, off-balance sheet loan or similar
off-balance sheet financing product; and (xii) the indebtedness of any
partnership or Joint Venture in which such Person is a general partner or a
joint venturer except to the extent that the terms of such indebtedness provide
that such indebtedness is nonrecourse to such Person.


 


“Indemnified Liabilities” has the meaning assigned to that term in Section 10.3(a).


 


“Indemnitee” has the meaning assigned to that term in Section 10.3(a).


 


“Intellectual Property”
means all patents, trademarks, service marks, tradenames, domain names, trade
secrets, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries.


 


“Intercreditor Agreement” shall mean the Intercreditor Agreement in
the form of Exhibit N.


 


“Interest Payment Date” means with respect to (i) any Base Rate Loan,
the last Business Day in each of March, June, September and December of
each year through the final maturity date of such Loan; and (ii) any
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan; provided, in the case of each Interest Period of longer than three


 


20

















 


months “Interest Payment Date” shall also include each date that is
three months, or an integral multiple thereof, after the commencement of such
Interest Period.


 


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


 


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


 


“Interest Rate Determination Date” means, with respect to any Interest Period, the date
that is two (2) Business Days prior to the first day of such Interest
Period.


 


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


 


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


 


“Inventory Appraisal”
shall mean (a) on the Closing Date and thereafter until any subsequent
inventory appraisal is completed and delivered pursuant to Section 5.6(b) hereof,
the inventory appraisal prepared by Hilco Appraisal Services, LLC dated April 19,
2007 and (b) thereafter, the most recent inventory appraisal conducted by
an independent appraisal firm satisfactory to the Collateral Agent and the
Administrative Agent and delivered pursuant to Section 5.6(b) hereof.


 


“Investment” means (i) any direct or indirect purchase or other acquisition by
Holdings or any of its Subsidiaries of, or of a beneficial interest in, any of
the Securities of any other Person (including any Subsidiary of Holdings); (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Holdings from any Person other than Company or any
Guarantor Subsidiary, of any Capital Stock of such Subsidiary; and (iii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Holdings or any of
its Subsidiaries to any


 


21

















 


other Person, including
all indebtedness and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person in the ordinary
course of business. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto minus the amount of any
return of capital with respect to such Investment, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.


 


“Investment Conditions” means (i) the
Consolidated Coverage Ratio is not less than 2.0 to 1.0 and (ii) the
Leverage Ratio is not greater than 5.0 to 1.0.


 


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


 


“Issuing Bank” means (i) Credit Suisse as Issuing Bank hereunder,
together with its permitted successors and assigns in such capacity and (ii) any
other Lender that is a commercial bank acceptable to Company and Administrative
Agent.


 


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


 


“Lender”
has the meaning assigned to that term in the preamble hereto, and shall include
any other Person that becomes a party hereto pursuant to an Assignment
Agreement.


 


“Lender Counterparty” means each
Lender or any Affiliate of a Lender counterparty to a Hedge Agreement or
Banking Service Agreement (including any Person who is a Lender (and any
Affiliate thereof) as of the Closing Date but subsequently, whether before or
after entering into a Hedge Agreement or Banking Service Agreement, ceases to
be a Lender).


 


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


 


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


 


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


 


“Leverage Ratio” means the ratio as of the date of determination of (i) Consolidated
Total Debt, less unrestricted Cash and Cash Equivalents of Company and its
Subsidiaries as of such day in excess of $1,000,000, the contents of which are
in a Blocked Account, to (ii) Consolidated Adjusted EBITDA for the Test
Period most recently ended.


 


“Lien”
means any lien, mortgage, pledge, assignment, security interest, charge or
encumbrance of any kind (including any agreement to give any of the foregoing,
any conditional


 


22

















 


sale or other title
retention agreement, and any lease in the nature thereof) and any option, trust
or other preferential arrangement having the practical effect of any of the
foregoing.


 


“Liquidity Event” means Excess Availability of the Borrowers is less
than $6.0 million.


 


“Liquidity Event Cure”  has
the meaning assigned to such term in Section 8.2.


 


“Liquidity Event Cure Amount”  has the meaning assigned to such term in Section 8.2.


 


“Liquidity Event Cure Notice”  has the meaning assigned to such term in Section 8.2.


 


“Liquidity Event Cure Right”
has the meaning assigned to such term in Section 8.2.


 


“Loan”
means a Revolving Loan and a Swing Line Loan.


 


“Management Services Agreement” means the Amended and Restated Management Services
Agreement dated April 12, 2004 between Holdings and Sponsor, as it may be
amended, supplemented or otherwise modified from time to time.


 


“Margin Stock” has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.


 


“Material Adverse Effect” means a material adverse effect upon (i) the
business, operations, properties, assets or condition (financial or otherwise)
of Holdings and its Subsidiaries taken as a whole; (ii) the ability of any
Credit Party to perform its Obligations; (iii) the legality, validity,
binding effect or enforceability against a Credit Party of a Credit Document to
which it is a party; or (iv) the rights, remedies and benefits available
to, or conferred upon, any Agent and any Lender or any Secured Party under any
Credit Document.


 


“Maturity Date”
means May 21, 2012.


 


“Maximum Restricted Payment
Amount” means, for any four Fiscal Quarter period, (1) $24,000,000,
if Consolidated Adjusted EBITDA is greater than or equal to $30,000,000 and
less than or equal to $40,000,000 for the Test Period, (2) $12,000,000, if
Consolidated Adjusted EBITDA is greater than or equal to $27,000,000 but less
than $30,000,000 for the Test Period, (3) $8,000,000, if Consolidated
Adjusted EBITDA is greater than or equal to $25,000,000 but less than
$27,000,000 for the Test Period, and (4) $0, if Consolidated Adjusted
EBITDA is less than $25,000,000 for the Test Period.


 


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


 


“Mortgage” means a Mortgage substantially in the form of Exhibit J, as it
may be amended, supplemented or otherwise modified from time to time.


 


23

















 


“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer
plan” as defined in Section 3(37) or Section 4001(a)(3) of
ERISA.


 


“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount
equal to: (i) Cash payments (including any Cash received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by Holdings or any of its
Subsidiaries from such Asset Sale, minus (ii) any bona fide direct
costs incurred in connection with such Asset Sale, including, without
limitation, (a) income taxes estimated in good faith by the seller thereof
to be payable by the seller as a result of any gain recognized in connection
with such Asset Sale, (b) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Loans) that is secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset Sale, (c) brokerage
fees and legal expenses incurred directly attributable to such Asset Sale; and (d) any
reserves required to be established by the seller thereof in accordance with
GAAP against liabilities reasonably anticipated and directly attributable to
the Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under indemnification obligations associated with such
Asset Sale.


 


“Net Insurance/Condemnation Proceeds” means an amount equal to:  (i) any Cash payments or proceeds
received by Holdings or any of its Subsidiaries (a) under any casualty
insurance policy in respect of a covered loss thereunder or (b) as a
result of the taking of any assets of Holdings or any of its Subsidiaries by
any Person pursuant to the power of eminent domain, condemnation or otherwise,
or pursuant to a sale of any such assets to a purchaser with such power under
threat of such a taking, minus (ii) (a) any actual and
reasonable costs incurred by Holdings or any of its Subsidiaries in connection
with the adjustment or settlement of any claims of Holdings or such Subsidiary
in respect thereof, and (b) any bona fide direct costs incurred in
connection with any sale of such assets as referred to in clause (i)(b) of
this definition, including income taxes estimated in good faith by the seller
thereof to be payable as a result of any gain recognized in connection therewith.


 


“Net Recovery Cost
Percentage” means the fraction, expressed as a percentage, (a) the
numerator of which is the amount equal to the recovery on the aggregate amount
of the Inventory at such time on a “net orderly liquidation value” basis as set
forth in the most recent Inventory Appraisal received by Collateral Agent in
accordance with Section 5.6(b), net of operating expenses, liquidation
expenses and commissions reasonably anticipated in the disposition of such
assets, and (b) the denominator of which is the original Cost of the
aggregate amount of the Inventory subject to appraisal.


 


“Non-US Lender” has the meaning assigned to that term in Section 2.19(c).


 


“Note”
means a Term Note, a Revolving Loan Note or a Swing Line Note.


 


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


 


24

















 


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


 


“Obligee Guarantor” has the meaning assigned to that term in Section 7.7.


 


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


 


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


 


“Pension Plan” means any Employee Benefit Plan which is subject to Section 412
of the Internal Revenue Code or Section 302 of ERISA.


 


“Perfection
Deliverables” means, with respect to any Credit Party, or any Person
that becomes a Credit Party pursuant to Section 5.10 and to the extent
required to be delivered under such Section:


 


(i)        evidence
satisfactory to Collateral Agent of the compliance by such Credit Party of its
obligations under the Pledge and Security Agreement and the other Collateral
Documents (including, without limitation, its obligations (A) to execute
and deliver (x) UCC financing statements, (y) originals of
securities, instruments and chattel paper and (z) any agreements governing
deposit and/or securities accounts as provided therein, and (B) to file
intellectual property security agreements with the United States Patent and
Trademark Office and the United States Copyright Office);


 


25

















 


(ii)          (A) to
the extent required to be delivered by the Collateral Agent, the results of
searches, by Persons satisfactory to Collateral Agent, of all effective UCC
financing statements (or equivalent filings), fixture filings and all judgment
and tax lien filings which may have been made with respect to any personal or
mixed property of such Credit Party, and of filings with the United States
Patent and Trademark Office and the United States Copyright Office, together
with copies of all such filings disclosed by such searches, and (B) UCC
termination statements (or similar documents), releases to be filed with the
United States Patent and Trademark Office and the United States Copyright
Office, and other filings duly executed by all applicable Persons for filing in
all applicable jurisdictions and offices as may be necessary to terminate any
effective UCC financing statements (or equivalent filings) and other filings
disclosed in such searches (other than any such financing statements in respect
of Permitted Liens);


 


(iii)       to the
extent required to be delivered by the Collateral Agent, opinions of counsel
(which counsel shall be reasonably satisfactory to Collateral Agent) with
respect to the creation and perfection of the security interests in favor of
Collateral Agent in the Collateral of such Credit Party and such other matters
as Collateral Agent may reasonably request, in each case in form and substance
reasonably satisfactory to Collateral Agent; and


 


(iv)      evidence
that such Credit Party shall have taken or caused to be taken any other action,
executed and delivered or caused to be executed and delivered any other agreement,
document and instrument (including without limitation, any intercompany notes
evidencing Indebtedness permitted to be incurred pursuant to Section 6.1(b))
and made or caused to be made any other filing and recording (other than as set
forth herein) reasonably required by Collateral Agent.


 


“Performance Level”
means, as of the date of determination, Performance Level I or Performance
Level II, as identified by reference to Average Daily Excess Availability in
effect on such date as set forth below:


 


26

















 


	
  Performance Level

  	
   

  	
  Average Daily Excess Availability

  
	
   

  	
   

  	
   

  
	
  Level I

  	
   

  	
  Average Daily Excess Availability is greater than
  $25,000,000

  
	
   

  	
   

  	
   

  
	
  Level II

  	
   

  	
  Average Daily Excess Availability is less than or
  equal to $25,000,000

  



 


For purposes of this definition, Average Daily Excess
Availability shall be determined on the basis of the most recent Compliance
Certificate delivered pursuant to Section 5.1(d) hereof and any
change in the Performance Level shall be effective one Business Day after the
date on which Administrative Agent receives such certificate; provided,
that until Holdings has delivered to Administrative Agent such certificate
pursuant to Section 5.1(d) hereof in respect of Fiscal Year 2007,
Average Daily Excess Availability shall be deemed to be at Level II; provided,
further, that for so long as Holdings has not delivered such Compliance
Certificate when due pursuant to Section 5.1(d) hereof Average Daily
Excess Availability shall be deemed to be at Level II until such certificate is
delivered to Administrative Agent.


 


“Periodic Dividend Amount”
means (x) $16,000,000 minus (y) the sum of the aggregate amount of
Restricted Payments made pursuant to Section 6.5(d)(i) during the
Fiscal Quarter in which the subject Restricted Payment is to be paid and the
three Fiscal Quarters most recently ended.


 


“Permitted Acquisition” means any acquisition by Company or any of its
wholly-owned Guarantor Subsidiaries, whether by purchase, merger or otherwise,
of all or substantially all of the assets of, all of the Capital Stock of, or a
business line or unit or a division of, any Person; provided, that: (i) immediately
prior to, and after giving effect thereto, no Liquidity Event or Default or
Event of Default shall have occurred and be continuing or would result
therefrom; (ii) all transactions in connection therewith shall be
consummated, in all material respects, in accordance with all applicable laws
and in conformity with all applicable Governmental Authorizations; (iii) in
the case of the acquisition of Capital Stock, all of the Capital Stock (except
for any such Securities in the nature of directors’ qualifying shares required
pursuant to applicable law) acquired or otherwise issued by such Person or any
newly formed Subsidiary of Company in connection with such acquisition shall be
owned not less than 80% by Company or a Guarantor Subsidiary thereof, and
Company shall have taken, or caused to be taken, each of the actions (and
within the time periods) set forth in Sections 5.10 and/or 5.11, as applicable;
(iv) any Person or assets or division as acquired in accordance herewith
shall be in same business or lines of business in which Company and/or its
Subsidiaries are engaged as of the Closing Date or any business reasonably
related thereto; and (v) each such Permitted Acquisition shall be
effectuated pursuant to the terms of a consensual merger or stock purchase
agreement or other consensual acquisition agreement between the Company or the
applicable Subsidiary and the applicable seller or Person being so acquired .


 


“Permitted Cure Security”  means Capital Stock of Holdings that is not Disqualified
Capital Stock.


 


27














 


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


 


“Permitted Refinancing”  means, with respect to any Indebtedness,
extensions, renewals, refinancings or replacements of such Indebtedness
provided that such extensions, renewals, refinancings or replacements (i) are
on terms and conditions (including the terms and conditions of any guarantees
of or other credit support for such Indebtedness) not materially less favorable
taken as a whole to Company and its Subsidiaries, the Agents or the Lenders
than the terms and conditions of the Indebtedness being extended, renewed,
refinanced or replaced, (ii) do not add as an obligor any Person that
would not have been an obligor under the Indebtedness being extended, renewed
replaced or refinanced, (iii) do not result in a greater principal amount
or shorter remaining average life to maturity than the Indebtedness being
extended, renewed replaced or refinanced and (iv) are not effected at any
time when a Default or Event of Default has occurred and is continuing or would
result therefrom.


 


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


 


“Phase I Report” means, with respect to any Facility, a report that (i) conforms
to the ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process, E 1527, (ii) was conducted no more
than six months prior to the date such report is required to be delivered
hereunder, by one or more environmental consulting firms reasonably
satisfactory to Administrative Agent, (iii) includes an assessment of
asbestos-containing materials at such Facility, (iv) is accompanied by (a) an
estimate of the reasonable worst-case cost of investigating and remediating any
Hazardous Materials Activity identified in the Phase I Report as giving rise to
an actual or potential material violation of any Environmental Law or as
presenting a material risk of giving rise to a material Environmental Claim,
and (b) a current compliance audit setting forth an assessment of Holdings’,
its Subsidiaries’ and such Facility’s current and past compliance with
Environmental Laws and an estimate of the cost of rectifying any non-compliance
with current Environmental Laws identified therein and the cost of compliance
with reasonably anticipated future Environmental Laws identified therein.


 


“Pledge and Security Agreement” means the Pledge and Security Agreement dated as of
the Closing Date by Borrowers and each Guarantor, substantially in the form of Exhibit I,
as it may be amended, supplemented or otherwise modified from time to time.


 


“Prime Rate” means the rate of interest per annum announced from time to time by
Credit Suisse as its prime commercial lending rate in effect at its principal
office in New York City.  The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer.  Credit
Suisse or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.


 


“Principal Office” means, for each of Administrative Agent, Swing Line
Lender and Issuing Bank, such Person’s “Principal Office” as set forth on
Appendix B, or such other 


 


28

















 


office as such Person may
from time to time designate in writing to Borrower Representative,
Administrative Agent and each Lender.


 


“Projections” has the meaning assigned to that term in Section 4.8.


 


“Pro Rata Share” means: with respect to all payments, computations and
other matters relating to the Revolving Loan Commitment or Revolving Loans of
any Lender or any Letters of Credit issued or participations purchased therein
by any Lender or any participations in any Swing Line Loans purchased by any
Lender, the percentage obtained by dividing (a) the Revolving Exposure of
that Lender by (b) the aggregate Revolving Exposure of all Lenders.  For all other purposes with respect to each
Lender, “Pro Rata Share” means the percentage obtained by dividing (A) an
amount equal to the sum of the Revolving Exposure of that Lender, by (B) an
amount equal to the sum of the aggregate Revolving Exposure of all Lenders.


 


“Qualifying IPO” means the consummation of
the first underwritten public offering of the Capital Stock (other than
Disqualified Capital Stock) of Holdings following the Closing Date pursuant to
a registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act.


 


“Qualifying IPO Payment” means,
concurrent with the closing of a Qualifying IPO, the one-time payment to
Sponsor in connection with the termination of the Management Services Agreement
in an aggregate amount not to exceed $6,000,000.


 


“Qualifying Preferred Stock Redemption” means,
concurrent with the closing of a Qualifying IPO, the payment of $1,000 to
Aurora Equity Partners II L.P. and $1,000 to Ares Limited Partnership in
respect of the redemption of the one share of Series B Preferred Stock and
Series C Preferred Stock held by Aurora Equity Partners II L.P. and the
Ares Limited Partnership, respectively.


 


“Qualifying Senior Notes Redemption” means,
concurrent with the closing of a Qualifying IPO, the Company and DD Finance (i) have
given irrevocable and unconditional notice of redemption for all of the outstanding
Senior Notes, (ii) have timely and irrevocably deposited or caused to be
deposited with the trustee under the Senior Notes Indenture proceeds of a
Qualifying IPO,  proceeds of Additional
Term Loans (as defined in the Term Loan Facility), Cash and/or proceeds of
Revolving Loans sufficient to pay and discharge the entire indebtedness
(including all principal, premium, if any, and accrued interest) on all
outstanding Senior Notes and (iii) have satisfied all other conditions
precedent to the discharge of the Senior Notes Indenture set forth in Section 8.8
of the Senior Notes Indenture.


 


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


 


29

















 


“Real Estate Asset Deliverables” means, with
respect to any Real Estate Asset acquired by any Credit Party, or held by any
Person that becomes a Credit Party, and to the extent required to be delivered
pursuant to Section 5.11:


 


(i)        fully
executed and notarized Mortgages, in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering such Real
Estate Asset;


 


(ii)                      at the request of the Collateral Agent, an opinion of counsel
(which counsel shall be reasonably satisfactory to Collateral Agent) in each
state in which such Real Estate Asset is located with respect to the
enforceability of the form(s) of Mortgages to be recorded in such state
and such other matters as Collateral Agent may reasonably request, in each case
in form and substance reasonably satisfactory to Collateral Agent;


 


(iii)                   at
the request of the Collateral Agent, (a) ALTA mortgagee title insurance
policies or unconditional commitments therefore issued by one or more title
companies reasonably satisfactory to Collateral Agent with respect to such Real
Estate Asset, in amounts satisfactory to the Collateral Agent with respect to
such Real Estate Asset, together with a title report issued by a title company
with respect thereto (each, a “Title Policy”)
and dated as of a recent date prior to the date which such Real Estate Asset is
acquired or such Person becomes a Credit Party, as the case may be, and copies
of all recorded documents listed as exceptions to title or otherwise referred
to therein, each in form and substance reasonably satisfactory to Collateral
Agent and (b) evidence satisfactory to Collateral Agent that such Credit
Party has paid to the title company or to the appropriate governmental
authorities all expenses and premiums of the title company and all other sums
required in connection with the issuance of each Title Policy and all recording
and stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Mortgages for such Real Estate Asset in the
appropriate real estate records;


 


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


 


30

















 


(v)                     at
the request of the Collateral Agent, ALTA surveys of such Real Estate Asset,
certified to Collateral Agent and dated as of a recent date which such Real
Estate Asset is acquired or such Person becomes a Credit Party, as the case may
be.


 


“Refunded Swing Line Loans” has the meaning assigned to that term in Section 2.2(b)(iv).


 


“Register” has the meaning assigned to that term in Section 2.6(b).


 


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


 


“Reimbursement Date” has the meaning assigned to that term in Section 2.3(d).


 


“Related Fund” means, with respect to any Lender that is an
investment fund, any other investment fund or similar investment vehicle that
invests in commercial loans and that is managed or advised by (i) the
Lender, (ii) an Affiliate of Lender or (iii) the same investment
advisor as such Lender or by an Affiliate of such investment advisor.


 


“Related Lender Assignment” has the meaning assigned to that term in Section 10.6(c).


 


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


 


“Replacement Lender” has the meaning assigned to that term in Section 2.22.


 


“Requisite Lenders” means one or more Lenders having or holding Revolving
Exposure and representing more than 50% of the sum of the aggregate Revolving
Exposure of all Lenders.


 


“Reserves”
shall mean reserves established against the Borrowing Base that the Collateral
Agent or Administrative Agent may, in good faith and in the exercise of its
respective reasonable (from the perspective of a secured asset-based lender)
business judgment, establish from time to time (including, without limitation, (i) reserves
for rent at locations leased by any Borrower for which no Collateral Access
Agreement is in effect, (ii) reserves for consignee’s, warehousemen’s and
bailee’s charges at consignor, warehouse and bailee locations for which
Collateral Access Agreements, bailee waivers or mortgagor waivers, as
appropriate, have not been obtained and at which Inventory is located, (iii) reserves
for customs charges and shipping charges related to any Inventory in transit, (iv) reserves
for obligations under Hedge Agreements, (v) reserves for contingent
liabilities of any Credit Party, (vi) reserves for uninsured losses of any
Credit Party, (vii) reserves for uninsured, underinsured, un-indemnified
or under-indemnified liabilities or potential liabilities with respect to any litigation,(viii) reserves
for taxes, fees, 


 


31

















 


assessments, and other
governmental charges) and (ix) reserves for obligations under Banking
Services Agreements.


 


“Restricted Payment” means (i) any dividend or other distribution
(including, for the avoidance of doubt, any payment pursuant to Section 6.5(d)),
direct or indirect, on account of any shares of any class of stock (or of any
other Capital Stock) of Holdings or Company now or hereafter outstanding, except
a dividend payable solely in shares of that class of stock to the holders of
that class; (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock (or of any other Capital Stock) of Holdings or
Company now or hereafter outstanding; (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock (or of any other Capital Stock) of
Holdings or Company now or hereafter outstanding; (iv) management or
similar fees payable to Sponsor or any of its Affiliates and (v) any
payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Indebtedness
permitted pursuant to Sections 6.1(b), 6.1(e) (in respect of Indebtedness
incurred under Sections 6.1(b), 6.1(k) (to the extent constituting
subordinated Indebtedness) or 6.1(m)), 6.1(k) (to the extent constituting
subordinated Indebtedness) or 6.1(m). 
Notwithstanding anything to the contrary contained herein, (i) the
redemption of the Senior Notes pursuant to the Qualifying Senior Notes
Redemption shall not be treated as a Restricted Payment for any purpose
hereunder, (ii) the Qualifying IPO Payment shall not be treated as a
Restricted Payment for any purpose hereunder, and (iii) the redemption by
Holdings of any preferred stock of Holdings pursuant to a Qualifying Preferred
Stock Redemption shall not be treated as a Restricted Payment for any purpose
hereunder.


 


“Restricted Payment Amount”  means, as of any date of determination,
an amount set forth on the Restricted Payment Certificate delivered to the
Administrative Agent no later than 10:00 a.m. (New York City time) at
least 3 Business Days in advance of the payment date of the transaction giving
rise to a determination of the Restricted Payment Amount (which can be less than
zero), equal to (a) the difference (but not less than zero) between (i) Restricted
Payment EBITDA and (ii) the product of 2.0 multiplied by Cumulative
Interest Expense (determined, in each case, for the period commencing on the
first day of the first full Fiscal Quarter after the Closing Date through and
including the last full Fiscal Quarter (taken as one accounting period)
preceding such date of determination), plus (b) 100% of the
aggregate net cash proceeds received by the Company from a capital contribution
or sale of Capital Stock to Holdings after the Closing Date, plus (c) except
in each case, in order to avoid duplication, to the extent any such payment or
proceeds have been included in the calculation of Restricted Payment EBITDA, an
amount equal to the net amounts received in respect of Investments made under Section 6.7(l) or
6.7(m) in any Person resulting from cash distributions on or cash
repayments of any Investments, including payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other distributions or other
transfers of assets, in each case to Company, DD Finance, Fisher or any of
their respective Subsidiaries or from the net cash proceeds from the sale of
any such Investment, not to exceed, in each case, the amount of Investments
previously made by Company, DD Finance, Fisher or any of their respective
Subsidiaries in such Person, less the cost of disposition (and excluding
Investments in Subsidiaries), minus (d) the sum of (i) the
aggregate amount of Restricted Payments made 


 


32

















 


pursuant to Sections
6.5(a)(ii) (other than to the Company or a wholly-owned Subsidiary
Guarantor) and 6.5(c)(iv); and (ii) (without duplication) amounts applied
or utilized pursuant to Section 6.5(d)(i), Section 6.5(f), Section 6.7(l) or
Section 6.7(m) or Section 6.16(d).  For purposes of this definition, (i) the
amount of any payment or Investment made or returned hereunder, if other than
in cash, shall be the fair market value thereof, as determined in the good
faith reasonable judgment of the board of directors of the Company (or similar
governing body) for such payments or Investments with a value in excess of $1.0
million, and otherwise by an executive officer of the Company at the time made
or returned, as applicable, (ii) interest with respect to Capital Leases
shall be deemed to accrue at an interest rate reasonably determined in good
faith by the Company to be the rate of interest implicit in such Capital Lease
in accordance with GAAP and (iii) interest expense attributable to any
Indebtedness represented by the guarantee by the Company or any of its
Subsidiaries of an obligation of another Person shall be deemed to be the
interest expense attributable to the Indebtedness guaranteed.  Notwithstanding anything to the contrary
contained herein, (i) the redemption of the Senior Notes pursuant to the
Qualifying Senior Notes Redemption shall not reduce the Restricted Payment
Amount for any purpose hereunder, (ii) the Qualifying IPO Payment shall
not reduce the Restricted Payment Amount for any purpose hereunder, (iii) the
proceeds of a Qualifying IPO shall not increase the Restricted Payment Amount
for any purpose hereunder, and (iv) the redemption of preferred stock of
Holdings pursuant to the Qualifying Preferred Stock Redemption shall not reduce
the Restricted Payment Amount for any purpose hereunder.


 


“Restricted Payment
Certificate” means a Restricted Payment Certificate substantially in
the form of Exhibit K.


 


“Restricted Payment EBITDA” means, for any period and without duplication, (a) Consolidated
Adjusted EBITDA for such period, plus (b) the sum of each of the
following to the extent deducted in the calculation of Consolidated Net Income
for such period, (i) all losses which are non-recurring, (ii) interest
attributable to Attributable Indebtedness, and (iii) the amount of all
dividends accrued or payable (whether or not in cash) by the Company or any of
its Subsidiaries in respect of preferred stock (other than (A) dividends
on Capital Stock (other than Disqualified Capital Stock) of the Company or such
Subsidiary payable solely in Capital Stock (other than Disqualified Capital
Stock) of the Company or such Subsidiary, as applicable, and (B) dividends
by Subsidiaries of the Company to the Company or its wholly-owned
Subsidiaries), plus (c) the aggregate amount of interest income of
the Company and its Subsidiaries during such period paid in cash to the extent
reducing Consolidated Adjusted EBITDA minus (d) all gains which are
non-recurring (including any gain from the issuance or sale of any Capital
Stock) to the extent included in the calculation of Consolidated Net Income for
such period.


 


“Revolving Loan Commitment” means the commitment of a Lender to make or otherwise
fund any Revolving Loan and to acquire participations in Letters of Credit and
Swing Line Loans hereunder and “Revolving Loan Commitments”  means such commitments of all
Lenders in the aggregate.  The amount of
each Lender’s Revolving Loan Commitment, if any, is set forth on Appendix A-2
or in the applicable Assignment Agreement, subject to any adjustment or
reduction pursuant to the terms and conditions hereof.  The aggregate amount of the Revolving Loan
Commitments as of the Closing Date is $60,000,000.


 


33

















 


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


 


“Revolving Loan Commitment Termination Date” means the earliest to occur of (i) the
Maturity Date, (ii) the date the Revolving Loan Commitments are
permanently reduced to zero pursuant to Section 2.12(b) or 2.13, and (iii) the
date of the termination of the Revolving Loan Commitments pursuant to Section 8.1.


 


“Revolving Exposure” means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Revolving Commitments,
that Lender’s Revolving Commitment, and (ii) after the termination of the
Revolving Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender, (b) in the case of Issuing
Bank, the aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Lender (net of any participations by Lenders in such Letters of
Credit), (c) the aggregate amount of all participations by that Lender in
any outstanding Letters of Credit or any unreimbursed drawing under any Letter
of Credit, (d) in the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any participations therein by
other Lenders), and (e) the aggregate amount of all participations therein
by that Lender in any outstanding Swing Line Loans.


 


“Revolving Loan” means a Loan made by a Lender to Company pursuant to Section 2.1(a).


 


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


 


“RP Conditions” means (i) the sum of (x) the
aggregate amount of Cash of the Borrowers in Deposit Accounts subject to a
Blocked Account Agreement and (y) Excess Availability is at least
$12,000,000; provided, that Excess Availability will be calculated without
giving effect to any Cash, and (ii) the Leverage Ratio is less than 6.0 to
1.0.


 


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


 


“Second Amendment to Term Loan Facility” means Amendment No. 2
to Term Loan Facility, dated as of April 16, 2010 among the Company and
the lenders party thereto.


 


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


 


“Secured Debt Ratio” means the ratio as of the date of
determination of (i) Consolidated Secured Debt, less unrestricted Cash and
Cash Equivalents of the Company and its Subsidiaries in excess of $1,000,000,
the contents of which are in a Blocked Account, as of such date, to (ii) Consolidated
Adjusted EBITDA for the Test Period most recently ended.


 


“Secured Parties” has the meaning assigned to that term in the Pledge
and Security Agreement.


 


34

















 


“Section 6.5(d) Certificate” means a certificate of
an Authorized Officer (i) certifying that the conditions to the making of
a Restricted Payment set forth in Section 6.5(d)(i) have been
satisfied and (ii) designating the portion of such Restricted Payment made
in reliance upon (x) the Periodic Dividend Amount and (y) the
Restricted Payment Amount.  Any such
designation made pursuant to clause (ii) of the preceding sentence shall
be permanent.


 


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


 


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


 


“Senior Notes”  means the Senior Notes issued pursuant to
the Senior Notes Indenture.


 


“Senior Notes Indenture”  means that certain Indenture dated as of December 16,
2004, by and among the Company, DD Finance and U.S. Bank National Association,
as Indenture Trustee, governing the Company’s 7 3⁄4% Senior Notes due 2012.


 


“Solvency Certificate”  means a Solvency Certificate of the chief
financial officer of Holdings and each Borrower substantially in the form of Exhibit G.


 


“Solvent” means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (z) not
less than the amount that will be required to pay the probable liabilities on
such Person’s then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (ii) such Person’s capital is not unreasonably
small in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person has not incurred and does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due (whether at maturity or
otherwise); and (B) such Person is “solvent” within the meaning given that
term and similar terms under applicable laws relating to fraudulent transfers
and conveyances.  For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.


 


“Sponsor” means, collectively, the Aurora Group Investors, the  Ares Group Investors and the Affiliates
(without giving effect to clause (i) of the last sentence of the
definition of such term) of Aurora Management Partners LLC or Ares Management
LLC.


 


“Subject Transaction” has the meaning assigned to that term in Section 6.8(c)(i).


 


35














 


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


 


“Swing Line Lender” means Credit Suisse in its capacity as Swing Line
Lender hereunder, together with its permitted successors and assigns in such
capacity.


 


“Swing Line Loan” means a Loan made by Swing Line Lender to Company
pursuant to Section 2.3.


 


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


 


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


 


“Tax”
means, with respect to any Person, any present or future tax, levy, impost,
duty, assessment, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided, however, solely for
purposes of Sections 2.18 and 2.19, the foregoing shall not include (a) taxes
imposed on or measured by such Person’s overall net income (however
denominated), and franchise taxes imposed on such Person (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such Person is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which Company
is located and (c) in the case of a Non-US Lender, any withholding tax
that is imposed on amounts payable to such Lender at the time such Lender
becomes a party hereto (or designates a new lending office) or is attributable
to such Lender’s failure (other than as a result of a Change in Law) to comply
with Section 2.19(c), except to the extent that such 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 Company with respect to
such withholding tax pursuant to Section 2.19(a) or Section 2.19(b).


 


“Term Loan Collateral Agent”
means Credit Suisse as collateral agent under the Term Loan Facility.


 


“Term Loan Document” all documents,
instruments or agreements executed and delivered by Holdings or any of its
subsidiaries for the benefit of any agent or lender in connection with the Term
Loan Facility.


 


36

















 


“Term Loan Facility” means the $85.0 million
senior secured term loan pursuant to the term loan agreement dated as of the
Closing Date among Holdings, the Company, certain subsidiary guarantors, the
lenders party thereto and Credit Suisse as administrative agent and collateral
agent, as it may be amended, modified, refinanced or replaced from time to
time, including amendments increasing the principal amount of term loans
available thereunder.


 


“Term Priority Collateral”  has the meaning assigned to that term in the Intercreditor
Agreement.


 


“Terminated Lender”  has the meaning assigned to that term in Section 2.22.


 


“Test Period” means, at any time, the four Fiscal Quarters last
ended (in each case taken as one accounting period) for which financial
statements are required to have been delivered, pursuant to Section 5.1(b).


 


“Title Policy” has the meaning assigned to that term in the
definition of “Real Estate Asset Deliverables.”


 


“Total Utilization of Revolving Loan Commitments” means, as at any date of determination,
the sum of (i) the aggregate principal amount of all outstanding Revolving
Loans (other than Revolving Loans made for the purpose of repaying any Refunded
Swing Line Loans or reimbursing Issuing Bank for any amount drawn under any
Letter of Credit, but not yet so applied), (ii) the aggregate principal
amount of all outstanding Swing Line Loans, and (iii) the Letter of Credit
Usage.


 


“Type of Loan” means (i) with respect to Revolving Loans, a
Base Rate Loan or a Eurodollar Rate Loan, and (ii) with respect to Swing
Line Loans, a Base Rate Loan.


 


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


 


“Utilization Rate”
means (a) the average of the daily difference between (1) the
Revolving Loan Commitments, and (2) the sum of (x) the aggregate
principal amount of outstanding Revolving Loans (excluding any outstanding
Swing Line Loans) plus (y) the Letter of Credit Usage, divided by (b) the
Revolving Loan Commitments.


 


1.2                               Accounting
Terms.  Except as
otherwise expressly provided herein, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity with GAAP.  Financial statements and other information
required to be delivered by Holdings to Lenders pursuant to Section 5.1(b) and
5.1(c) shall be prepared in accordance with GAAP as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in Section 5.1(e), if applicable).  Subject to the foregoing, calculations in
connection with the definitions, covenants and other provisions hereof shall
utilize accounting principles and policies in conformity with those used to
prepare the most recent financial statements referred to in Section 4.7;
provided that, solely for purposes of calculating the Restricted Payment
Amount, the terms used in, or otherwise relating to, the definition of


 


37

















 


“Restricted Payment Amount” shall, except as otherwise expressly
provided herein, have the meanings assigned to them in conformity with GAAP as
in effect from time to time.


 


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


 


SECTION 2.                       LOANS AND
LETTERS OF CREDIT


 


2.1                               Revolving
Loans.


 


(a)                                  Revolving Loan Commitments.  During the Revolving Loan Commitment Period,
subject to the terms and conditions hereof, each Lender severally agrees to
make Revolving Loans to Borrower Representative in an aggregate principal
amount at any time outstanding that will not (subject to the provisions of Section 9.9)
result in such Lender’s Revolving Exposure exceeding the lesser of (i) such
Lender’s Revolving Loan Commitment and (ii) such Lender’s Pro Rata Share
multiplied by the Borrowing Base. 
Subject to the other terms and conditions of this Agreement, amounts
borrowed pursuant to this Section 2.1(a) may be repaid and reborrowed
during the Revolving Loan Commitment Period. 
Each Lender’s Revolving Loan Commitment shall expire on the Revolving
Loan Commitment Termination Date and all Revolving Loans and all other amounts
owed hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than such date.


 


(b)                                 Borrowing Mechanics for Revolving Loans.


 


(i)                       Except pursuant to 2.3(d), Revolving Loans that are Base Rate
Loans shall be made in an aggregate minimum amount of $2,000,000 and integral
multiples of $500,000 in excess of that amount, and Revolving Loans that are
Eurodollar Rate Loans shall be in an aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that amount.


 


38

















 


(ii)                    Whenever
Borrower Representative desires that Lenders make Revolving Loans, Borrower
Representative shall deliver to Administrative Agent a fully executed and
delivered Funding Notice no later than 10:00 a.m. (New York City time) at
least three (3) Business Days in advance of the proposed Credit Date in
the case of a Eurodollar Rate Loan, and at least one (1) Business Day in
advance of the proposed Credit Date in the case of a Revolving Loan that is a
Base Rate Loan.  Except as otherwise
provided herein, a Funding Notice for a Revolving Loan that is a Eurodollar
Rate Loan shall be irrevocable, and Company shall be bound to make a borrowing
in accordance therewith.


 


(iii)                 Notice
of receipt of each Funding Notice in respect of Revolving Loans, together with
the amount of each Lender’s Pro Rata Share thereof, together with the
applicable Type of Loan, shall be provided by Administrative Agent to each
applicable Lender by telefacsimile with reasonable promptness.


 


(iv)                Each
Lender shall make the amount of its Revolving Loan available to Administrative
Agent not later than 12:00 p.m. (New York City time) on the applicable
Credit Date by wire transfer of same day funds in Dollars, at Administrative
Agent’s Principal Office.  Except as
provided herein, upon satisfaction or waiver of the conditions precedent
specified herein, Administrative Agent shall make the proceeds of such
Revolving Loans available to Borrower Representative on the applicable Credit
Date by causing an amount of same day funds in Dollars equal to the proceeds of
all such Revolving Loans received by Administrative Agent from Lenders to be
credited to such account as may be designated in such Funding Notice.


 


(c)                                  Appointment of Borrower Representative.  Each Borrower hereby
irrevocably appoints and constitutes Borrower Representative as its agent to
request and receive Loans and Letters of Credit pursuant to this Agreement in
the name or on behalf of such Borrower. 
The Administrative Agent and Lenders may disburse the Loans to such bank
account of Borrower Representative or a Borrower or otherwise make such Loans
to a Borrower and provide such Letters of Credit to a Borrower as Borrower
Representative may designate or direct, without notice to any other Borrower or
Guarantor.  Borrower Representative
hereby accepts the appointment by Borrowers to act as the agent of Borrowers
and agrees to ensure that the disbursement of any Loans to a Borrower requested
by or paid to or for the account of such Borrower, or the issuance of any
Letter of Credit for a Borrower hereunder, shall be paid to or for the account
of such Borrower.  Each Borrower hereby
irrevocably appoints and constitutes Borrower Representative as its agent to
receive statements on account and all other notices from the Agents and Lenders
with respect to the Obligations or otherwise under or in connection with 


 


39

















 


this Agreement and the other
Loan Documents.  Any notice, election,
representation, warranty, agreement or undertaking by or on behalf of any other
Borrower by Borrower Representative shall be deemed for all purposes to have
been made by such Borrower, as the case may be, and shall be binding upon and
enforceable against such Borrower to the same extent as if made directly by such
Borrower.  No purported termination of
the appointment of Borrower Representative as agent as aforesaid shall be
effective, except after ten (10) days’ prior written notice to
Administrative Agent and Collateral Agent.


 


2.2                               Swing
Line Loans.


 


(a)                                  Swing Line Loans Commitments.  During the Revolving Loan Commitment Period,
subject to the terms and conditions hereof, Swing Line Lender hereby agrees to
make Swing Line Loans to Borrower Representative in the aggregate amount up to
but not exceeding the Swing Line Sublimit; provided, that after giving
effect to the making of any Swing Line Loan, in no event shall the Total
Utilization of Revolving Loan Commitments exceed the lesser of (i) the
Revolving Loan Commitments then in effect and (ii) the Borrowing
Base.  Subject to the other terms and
conditions of this Agreement, amounts borrowed pursuant to this Section 2.2
may be repaid and reborrowed during the Revolving Loan Commitment Period.   Swing Line Lender’s Revolving Loan
Commitment shall expire on the Revolving Loan Commitment Termination Date and
all Swing Line Loans and all other amounts owed hereunder with respect to the
Swing Line Loans and the Revolving Loan Commitments shall be paid in full no
later than such date.


 


(b)                                 Borrowing Mechanics for Swing Line Loans.


 


(i)                       Swing Line Loans shall be made in an aggregate minimum amount
of $1,000,000 and integral multiples of $500,000 in excess of that amount.


 


(ii)                    Whenever
Borrower Representative desires that Swing Line Lender make a Swing Line Loan,
Borrower Representative shall deliver to Administrative Agent a Funding Notice
no later than 12:00 p.m. (New York City time) on the proposed Credit Date.


 


(iii)                 Except
as provided herein, upon satisfaction or waiver of the conditions precedent
specified herein, Swing Line Lender shall make the proceeds of  Swing Line Loans available to Borrower Representative
on the applicable Credit Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Swing Line Loans received by Administrative
Agent from Swing Line Lender to be credited to such account as may be
designated in such Funding Notice.


 


40

















 


(iv)                With
respect to any Swing Line Loans which have not been voluntarily prepaid by
Borrower Representative pursuant to Section 2.12, Swing Line Lender may at
any time in its sole and absolute discretion, deliver to Administrative Agent
(with a copy to Borrower Representative), no later than 11:00 a.m. (New
York City time) at least one Business Day in advance of the proposed Credit
Date, a notice (which shall be deemed to be a Funding Notice given by Borrower
Representative) requesting that each Lender holding a Revolving Loan Commitment
make Revolving Loans that are Base Rate Loans to Borrower Representative on
such Credit Date in an amount equal to the amount of such Swing Line Loans (the
“Refunded Swing Line Loans”)
outstanding on the date such notice is given which Swing Line Lender requests
Lenders to prepay.  Anything contained in
this Agreement to the contrary notwithstanding, (1) the proceeds of such
Revolving Loans made by the Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and not to
Borrower Representative) and applied to repay a corresponding portion of the
Refunded Swing Line Loans and (2) on the day such Revolving Loans are
made, Swing Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall
be deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender to Borrower Representative, and such portion of the Swing Line Loans
deemed to be so paid shall no longer be outstanding as Swing Line Loans and
shall no longer be due under the Swing Line Note of Swing Line Lender but shall
instead constitute part of Swing Line Lender’s outstanding Revolving Loans to
Borrower Representative and shall be due under the Revolving Loan Note issued
by Borrower Representative to Swing Line Lender.  Borrower Representative hereby authorizes
Administrative Agent and Swing Line Lender to charge Borrower Representative’s
accounts with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line Lender
the amount of the Refunded Swing Line Loans to the extent of the proceeds of
such Revolving Loans made by Lenders, including the Revolving Loans deemed to
be made by Swing Line Lender, are not sufficient to repay in full the Refunded
Swing Line Loans.  If any portion of any
such amount paid (or deemed to be paid) to Swing Line Lender should be
recovered by or on behalf of Borrower Representative from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the loss
of the amount so recovered shall be ratably shared among all Lenders in the
manner contemplated by Section 2.16.


 


41

















 


(v)                   If
for any reason Revolving Loans are not made pursuant to Section 2.2(b)(iv) in
an amount sufficient to repay any amounts owed to Swing Line Lender in respect
of any outstanding Swing Line Loans on or before the third Business Day after
demand for payment thereof by Swing Line Lender, each Lender holding a
Revolving Loan Commitment shall be deemed to, and hereby agrees to, have
purchased a participation in such outstanding Swing Line Loans, and in an
amount equal to its Pro Rata Share of the applicable unpaid amount together
with accrued interest thereon.  Upon one
Business Day’s notice from Swing Line Lender to Administrative Agent and each
Lender, each Lender holding a Revolving Loan Commitment shall deliver to Swing
Line Lender an amount equal to its respective participation in the applicable
unpaid amount in same day funds at the Principal Office of Swing Line Lender.
In order to evidence such participation each Lender holding a Revolving Loan
Commitment agrees to enter into a participation agreement at the request of
Swing Line Lender in form and substance reasonably satisfactory to Swing Line
Lender.  In the event any Lender holding
a Revolving Loan Commitment fails to make available to Swing Line Lender the
amount of such Lender’s participation as provided in this paragraph, Swing Line
Lender shall be entitled to recover such amount on demand from such Lender
together with interest thereon for three (3) Business Days at the rate
customarily used by Swing Line Lender for the correction of errors among banks
and thereafter at the Base Rate, as applicable.


 


(vi)                Notwithstanding
anything contained herein to the contrary, (1) each Lender’s obligation to
make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans
pursuant to the second preceding paragraph and each Lender’s obligation to
purchase a participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional and shall
not be affected by any circumstance, including without limitation (A) any
set-off, counterclaim, recoupment, defense or other right which such Lender may
have against Swing Line Lender, any Credit Party or any other Person for any
reason whatsoever; (B) the occurrence or continuation of a Default or
Event of Default or the failure of any condition set forth in Section 3.2
to be satisfied; (C) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any
Credit Party; (D) any breach of this Agreement or any other Credit
Document by any party thereto; or (E) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing; provided
that such obligations of each Lender are subject to the condition that Swing 


 


42

















 


Line Lender believed in good faith
that all conditions under Section 3.2 to the making of the applicable
Refunded Swing Line Loans or other unpaid Swing Line Loans, were satisfied at
the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made,
or the satisfaction of any such condition not satisfied had been waived by the
Requisite Lenders prior to or at the time such Refunded Swing Line Loans or
other unpaid Swing Line Loans were made; and (2) Swing Line Lender shall
not be obligated to make any Swing Line Loans (A) if it has elected not to
do so after the occurrence and during the continuation of a Default or Event of
Default or (B) at a time when a Funding Default exists unless Swing Line
Lender has entered into arrangements satisfactory to it and Borrower
Representative to eliminate Swing Line Lender’s risk with respect to the
Defaulting Lender’s participation in such Swing Ling Loan, including by cash
collateralizing such Defaulting Lender’s Pro Rata Share of the outstanding
Swing Line Loans.


 


2.3                               Issuance of Letters of Credit and
Purchase of Participations Therein.


 


(a)                                  Letters of Credit.  During the Revolving Loan Commitment Period,
subject to the terms and conditions hereof, Issuing Bank agrees to issue
Letters of Credit for the account of Borrower Representative in the aggregate
amount up to but not exceeding the Letter of Credit Sublimit; provided, (i) each
Letter of Credit shall be denominated in Dollars; (ii) the stated amount
of each Letter of Credit shall not be less than $50,000 or such lesser amount
as is acceptable to Issuing Bank; (iii) after giving effect to such
issuance, in no event shall the Total Utilization of Revolving Loan Commitments
exceed the lesser of (A) the Revolving Loan Commitments then in effect and
(B) the Borrowing Base; (iv) after giving effect to such issuance, in
no event shall the Letter of Credit Usage exceed the Letter of Credit Sublimit
then in effect; and (v) in no event shall any Letter of Credit be issued
later than thirty (30) days prior to the Revolving Loan Commitment Termination
Date or have an expiration date later than the earlier of five (5) Business
Days prior to the Revolving Loan Commitment Termination Date and the date which
is one year from the date of issuance of such standby Letter of Credit.  Subject to the foregoing, upon the request of
Borrower Representative, Issuing Bank will issue a Letter of Credit that
automatically will be extended for one or more successive periods not to exceed
one year each, unless Issuing Bank elects not to extend for any such additional
period; provided, Issuing Bank shall not extend any such Letter of Credit
if it has received written notice that an Event of Default has occurred and is
continuing at the time Issuing Bank must elect to allow such extension; provided,
further, in the event a Funding Default exists, Issuing Bank shall not
be required to issue any Letter of Credit unless Issuing Bank has entered into
arrangements satisfactory to it and Borrower Representative to eliminate
Issuing Bank’s risk with respect to the participation in Letters of Credit of
the Defaulting Lender, including by cash collateralizing such Defaulting Lender’s
Pro Rata Share of the Letter of Credit Usage.


 


43














 


(b)                                 Notice of Issuance.  Whenever Borrower Representative desires the
issuance of a Letter of Credit, it shall deliver to Administrative Agent an
Issuance Notice no later than 12:00 p.m. (New York City time) at least
five (5) Business Days, or in each case such shorter period as may be
agreed to by Issuing Bank in any particular instance, in advance of the
proposed date of issuance.  Upon
satisfaction or waiver of the conditions set forth in Section 3.2, Issuing
Bank shall issue the requested Letter of Credit only in accordance with Issuing
Bank’s standard operating procedures. 
Upon the issuance of any Letter of Credit or amendment or modification
to a Letter of Credit, Issuing Bank shall promptly notify each Lender of such
issuance, which notice shall be accompanied by a copy of such Letter of Credit
or amendment or modification to a Letter of Credit and the amount of such
Lender’s respective participation in such Letter of Credit pursuant to Section 2.3(e).


 


(c)                                  Responsibility of Issuing Bank With Respect to Requests for
Drawings and Payments.  In determining whether to honor any drawing
under any Letter of Credit by the beneficiary thereof, Issuing Bank shall be
responsible only to examine the documents delivered under such Letter of Credit
with reasonable care so as to ascertain whether they appear on their face to be
in accordance with the terms and conditions of such Letter of Credit.  As between Borrower Representative and
Issuing Bank, Borrower Representative assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by Issuing Bank, by the
respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the
foregoing, Issuing Bank shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (v) errors in interpretation of technical terms; (vi) any
loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of Issuing Bank, including
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority; none of the above shall
affect or impair, or prevent the vesting of, any of Issuing Bank’s rights or
powers hereunder.  Without limiting the
foregoing and in furtherance thereof, any action taken or omitted by Issuing
Bank under or in connection with the Letters of Credit or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall not
give rise to any liability on the part of Issuing Bank to Borrower
Representative.  Notwithstanding anything
to the contrary contained in this Section 2.4(c), Borrower Representative
shall retain any and all rights it may have against Issuing Bank for any
liability arising out of the gross negligence or willful misconduct of Issuing
Bank.


 


44

















 


(d)                                 Reimbursement by Borrower Representative of Amounts Drawn or
Paid Under Letters of Credit.  In the event Issuing Bank has determined to
honor a drawing under a Letter of Credit, it shall immediately notify Borrower
Representative and Administrative Agent, and Borrower Representative shall
reimburse Issuing Bank on or before the Business Day immediately following the
date on which such drawing is honored (the “Reimbursement Date”) in an amount in Dollars and in same day funds equal to the
amount of such honored drawing; provided, anything contained herein to
the contrary notwithstanding, (i) unless Borrower Representative shall
have notified Administrative Agent and Issuing Bank prior to 10:00 a.m.
(New York City time) on the date such drawing is honored that Borrower
Representative intends to reimburse Issuing Bank for the amount of such honored
drawing with funds other than the proceeds of Revolving Loans, Borrower
Representative shall be deemed to have given a timely Funding Notice to
Administrative Agent requesting Lenders to make Revolving Loans that are Base
Rate Loans on the Reimbursement Date in an amount in Dollars equal to the
amount of such honored drawing, and (ii) subject to satisfaction or waiver
of the conditions specified in Section 3.2, Lenders shall, on the
Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount
of such honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse Issuing Bank for the amount of such honored
drawing; and provided  further, if for any reason proceeds of
Revolving Loans are not received by Issuing Bank on the Reimbursement Date in
an amount equal to the amount of such honored drawing, Borrower Representative
shall reimburse Issuing Bank, on demand, in an amount in same day funds equal
to the excess of the amount of such honored drawing over the aggregate amount
of such Revolving Loans, if any, which are so received.  Nothing in this Section 2.3(d) shall
be deemed to relieve any Lender from its obligation to make Revolving Loans on
the terms and conditions set forth herein, and Borrower Representative shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this Section 2.4(d).


 


(e)                                  Lenders’ Purchase of Participations in Letters of Credit.  Immediately upon the
issuance of each Letter of Credit, each Lender having a Revolving Loan
Commitment shall be deemed to have purchased, and hereby agrees to irrevocably
purchase, from Issuing Bank a participation in such Letter of Credit and any
drawings honored thereunder in an amount equal to such Lender’s Pro Rata Share
(with respect to the Revolving Loan Commitments) of the maximum amount which is
or at any time may become available to be drawn thereunder.  In the event that Borrower Representative
shall fail for any reason to reimburse Issuing Bank as provided in Section 2.3(d),
Issuing Bank shall promptly notify each Lender of the unreimbursed amount of
such honored drawing and of such Lender’s respective participation therein
based on such Lender’s Pro Rata Share of the Revolving Loan Commitments.  Each Lender shall make available to
Administrative Agent for Issuing Bank an amount equal to its respective participation,
in Dollars and in same day funds, at the office of Administrative Agent specified
in such notice, not later than 12:00 p.m. (New York City time) on the
first business day (under the laws of the jurisdiction in which such office of
Issuing Bank is located) after the date notified by Administrative Agent.  In the event that any Lender fails to make
available to Administrative Agent for Issuing Bank on such business day the
amount of such Lender’s participation in such Letter of Credit as provided in
this Section 2.3(e), Issuing Bank shall be entitled to recover such amount
on demand from such Lender together with interest thereon for three (3) Business
Days at the rate customarily used by Issuing Bank for the correction of errors
among banks and


 


45

















 


thereafter at the Base
Rate.  Nothing in this Section 2.3(e) shall
be deemed to prejudice the right of any Lender to recover from Issuing Bank any
amounts made available by such Lender to Issuing Bank pursuant to this Section in
the event that it is determined that the payment with respect to a Letter of
Credit in respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of Issuing Bank as determined by a
final non-appealable judgment of a court of competent jurisdiction.  In the event Issuing Bank shall have been
reimbursed by other Lenders pursuant to this Section 2.3(e) for all
or any portion of any drawing honored by Issuing Bank under a Letter of Credit,
such Issuing Bank shall distribute to each Lender which has paid all amounts
payable by it under this Section 2.3(e) with respect to such honored
drawing such Lender’s Pro Rata Share of all payments subsequently received by
Issuing Bank from Borrower Representative in reimbursement of such honored
drawing when such payments are received. 
Any such distribution shall be made to a Lender at its primary address
set forth below its name on Appendix B or at such other address as such Lender
may request.


 


(f)                                    Obligations Absolute. 
The obligation of Borrower Representative to reimburse Issuing Bank for drawings honored under the Letters of Credit issued by it
and to repay any Revolving Loans made by Lenders pursuant to Section 2.3(d) and
the obligations of Lenders under Section 2.3(e) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms hereof under all circumstances including any of the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit; (ii) the existence of any claim, set-off, defense or other right
which Borrower Representative or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), Issuing Bank, Lender or any other Person
or, in the case of a Lender, against Borrower Representative, whether in
connection herewith, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Borrower
Representative or one of its Subsidiaries and the beneficiary for which any Letter
of Credit was procured); (iii) any draft or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; (iv) payment by Issuing Bank under any Letter of Credit against
presentation of a draft or other document which does not substantially comply
with the terms of such Letter of Credit; (v) any adverse change in the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Holdings or any of its Subsidiaries; (vi) any breach hereof
or any other Credit Document by any party thereto; (vii) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing; or (viii) the fact that an Event of Default or a Default shall
have occurred and be continuing; provided, in each case, that payment by
Issuing Bank under the applicable Letter of Credit shall not have constituted
gross negligence or willful misconduct of Issuing Bank under the circumstances
in question as determined by a final non-appealable judgment of a court of
competent jurisdiction.


 


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


 


46

















 


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


 


2.4                               Pro Rata Shares; Availability of
Funds.


 


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


 


(b)                                 Availability of Funds.  Unless Administrative Agent shall have been
notified by any Lender prior to the applicable Credit Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender’s Loan requested on such Credit Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on such
Credit Date and Administrative Agent may, in its sole discretion, but shall not
be obligated to, make available to Borrower Representative a corresponding
amount on such Credit Date.  If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Credit Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three (3) Business Days and
thereafter at the Base Rate.  If such
Lender does not pay such corresponding amount forthwith upon Administrative
Agent’s demand therefor, Administrative Agent shall promptly notify Borrower
Representative and Borrower Representative shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon,
for each day from such Credit Date until the date such amount is paid to
Administrative Agent, at the rate applicable to such Loan.  Nothing in this Section 2.4(b) shall
be deemed to relieve any Lender from its obligation to fulfill its Revolving
Loan Commitments hereunder or to prejudice any rights that Borrower
Representative may have against any Lender as a result of any default by such
Lender hereunder.


 


2.5                               Use of
Proceeds.  The proceeds of Revolving Loans drawn on the
Closing Date shall be used to repay outstanding obligations under the Existing
Credit Agreement and pay transaction expenses. 
The proceeds of the Revolving Loans, Swing Line Loans and Letters of


 


47

















 


Credit drawn after the Closing Date shall be applied by Borrower
Representative for general corporate purposes (including payments of any
dividends permitted under this Agreement) of Holdings and its
Subsidiaries.  No portion of the proceeds
of any Credit Extension shall be used in any manner that causes or might cause
such Credit Extension or the application of such proceeds to violate
Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation thereof or to
violate the Exchange Act.


 


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


 


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


 


(b)                                 Register.  Administrative Agent shall maintain at its
Principal Office a register for the recordation of the names and addresses of
Lenders and the Revolving Loan Commitments and Loans of each Lender from time
to time (the “Register”).  In the case of a Related Lender Assignment
described in Section 10.6(e) that is not reflected in the Register,
the assigning Lender shall maintain a comparable register, which shall be made
available for inspection by Administrative Agent at any reasonable time and
from time to time upon reasonable prior notice to such Lender.  The Register shall be available for
inspection by Borrower Representative or any Lender at any reasonable time and
from time to time upon reasonable prior notice. 
Administrative Agent shall record in the Register the Revolving Loan
Commitments and the Loans, and each repayment or prepayment in respect of the
principal amount of the Loans, and any such recordation shall be conclusive and
binding on Borrower Representative and each Lender, absent manifest error; provided,
failure to make any such recordation, or any error in such recordation, shall
not affect any Lender’s Revolving Loan Commitments or Borrower Representative’s
Obligations in respect of any Loan. 
Borrower Representative hereby designates Credit Suisse to serve as
Borrower Representative’s agent solely for purposes of maintaining the Register
as provided in this Section 2.6, and Borrower Representative hereby agrees
that, to the extent Credit Suisse serves in such capacity, Credit Suisse and
its officers, directors, employees, agents and affiliates shall constitute “Indemnitees.”


 


(c)                                  Notes.  If so requested by any Lender by written
notice to Borrower Representative at least two (2) Business Days prior to
the Closing Date, or at any time thereafter, the Borrowers shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section 10.6,
other than an assignee party to a Related Lender Assignment described in Section 10.6(c)(i))
on the Date (or, if such notice is delivered after the Closing Date, promptly
after Borrower


 


48

















 


Representative’s receipt of such notice) a Note or Notes to evidence
such Lender’s Revolving Loan or Swing Line Loan, as the case may be.


 


2.7                               Interest on Loans.


 


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


 


(i)             if
a Base Rate Loan, at the Base Rate plus the Applicable Margin; or


 


(ii)          if
a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the Applicable
Margin; and


 


(iii)       in the case
of Swing Line Loans, at the Base Rate plus the Applicable Margin.


 


(b)                                 The basis for determining the rate of interest with respect
to any Loan (except a Swing Line Loan which can be made and maintained as Base
Rate Loans only), and the Interest Period with respect to any Eurodollar Rate
Loan, shall be selected by Borrower Representative and notified to
Administrative Agent and Lenders pursuant to the applicable Funding Notice or
Conversion/Continuation Notice, as the case may be.  If on any day a Loan is outstanding with
respect to which a Funding Notice or Conversion/Continuation Notice has not
been delivered to Administrative Agent in accordance with the terms hereof
specifying the applicable basis for determining the rate of interest, then for
that day such Loan shall be a Base Rate Loan.


 


(c)                                  In connection with Eurodollar Rate Loans there shall be no
more than ten (10) Interest Periods outstanding at any time.  In the event Borrower Representative fails to
specify between a Base Rate Loan or a Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as
a Eurodollar Rate Loan) will be automatically converted into a Base Rate Loan
on the last day of the then-current Interest Period for such Loan (or if
outstanding as a Base Rate Loan will remain as, or (if not then outstanding)
will be made as, a Base Rate Loan).  In
the event Borrower Representative fails to specify an Interest Period for any
Eurodollar Rate Loan in the applicable Funding Notice or
Conversion/Continuation Notice, Borrower Representative shall be deemed to have
selected an Interest Period of one month. 
As soon as practicable after 10:00 a.m. (New York City time) on
each Interest Rate Determination Date, Administrative Agent shall determine
(which determination shall, absent manifest error, be final, conclusive and
binding upon all parties) the interest rate that shall apply to the Eurodollar
Rate Loans for which an interest rate is then being 


 


49

















 


determined for the
applicable Interest Period and shall promptly give notice thereof (in writing
or by telephone confirmed in writing) to Borrower Representative and each
Lender.


 


(d)                                 Interest payable pursuant to Section 2.7(a) shall
be computed (i) in the case of Base Rate Loans at times when the Base Rate
is based on the Prime Rate on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of Eurodollar Rate Loans, and Base Rate
Loans at times when the Base Rate is based on the Federal Funds Effective Rate,
on the basis of a 360-day year, in each case for the actual number of days
elapsed in the period during which it accrues. 
In computing interest on any Loan, the date of the making of such Loan
or the first day of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of
conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may
be, shall be included, and the date of payment of such Loan or the expiration
date of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of
such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be
excluded; provided, if a Loan is repaid on the same day on which it is
made, one day’s interest shall be paid on that Loan.


 


(e)                                  Except as otherwise set forth herein, interest on each Loan
shall be payable in arrears on and to (i) each Interest Payment Date
applicable to such Loan; (ii) upon any prepayment of such Loan that is a
Eurodollar Rate Loan, whether voluntary or mandatory, to the extent accrued on
the amount being prepaid; and (iii) at maturity, including final maturity.


 


(f)                                    Borrower Representative agrees to pay to Issuing Bank, with
respect to drawings honored under any Letter of Credit, interest on the amount
paid by Issuing Bank in respect of each such honored drawing from the date such
drawing is honored to but excluding the date such amount is reimbursed by or on
behalf of Borrower Representative at a rate equal to (i) for the period
from the date such drawing is honored to but excluding the applicable
Reimbursement Date, the rate of interest otherwise payable hereunder with
respect to Revolving Loans that are Base Rate Loans, and (ii) thereafter,
a rate which is 2% per annum in excess of the rate of interest otherwise
payable hereunder with respect to Revolving Loans that are Base Rate Loans.


 


(g)                                 Interest payable pursuant to Section 2.7(f) shall
be computed on the basis of a 360-day year for the actual number of days
elapsed in the period during which it accrues, and shall be payable on demand
or, if no demand is made, on the date on which the related drawing under a
Letter of Credit is reimbursed in full. 
Promptly upon receipt by Issuing Bank of any payment of interest
pursuant to Section 2.7(f), Issuing Bank shall distribute to each Lender,
out of the interest received by Issuing Bank in respect of the period from the
date such drawing is honored to but excluding the date on which Issuing Bank is
reimbursed for the amount of such drawing (including any such reimbursement out
of the proceeds of any Revolving Loans), the amount that such Lender would have
been entitled to receive in respect of the letter of credit fee that would have
been payable in respect of such Letter of Credit for such period if no drawing
had been honored under such Letter of Credit. 
In the event Issuing Bank shall have been


 


50

















 


reimbursed by Lenders for
all or any portion of such honored drawing, Issuing Bank shall distribute to
each Lender which has paid all amounts payable by it under Section 2.3(e) with
respect to such honored drawing such Lender’s Pro Rata Share of any interest
received by Issuing Bank in respect of that portion of such honored drawing so
reimbursed by Lenders for the period from the date on which Issuing Bank was so
reimbursed by Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by Borrower Representative.


 


2.8                               Conversion/Continuation.


 


(a)                                  Subject to Section 2.17 and so long as no Default or
Event of Default shall have occurred and then be continuing, Borrower Representative
shall have the option:


 


(i)             to
convert at any time all or any part of any Revolving Loan equal to $2,000,000
and integral multiples of $500,000 in excess of that amount from one Type of
Loan to another Type of Loan; provided, a Eurodollar Rate Loan may only
be converted on the expiration of the Interest Period applicable to such
Eurodollar Rate Loan unless Borrower Representative shall pay all amounts due
under Section 2.17 in connection with any such conversion; or


 


(ii)          upon
the expiration of any Interest Period applicable to any Eurodollar Rate Loan,
to continue all or any portion of such Revolving Loan equal to $2,000,000 and
integral multiples of $500,000 in excess of that amount as a Eurodollar Rate
Loan.


 


(b)                                 Borrower Representative shall deliver a
Conversion/Continuation Notice to Administrative Agent no later than 10:00 a.m.
(New York City time) at least one Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate Loan) and at least
three (3) Business Days in advance of the proposed conversion/continuation
date (in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan).  Except as otherwise provided
herein, a Conversion/Continuation Notice for conversion to, or continuation of,
any Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable, and Borrower Representative shall be bound to effect a conversion
or continuation in accordance therewith.


 


2.9                               Default
Interest.  Upon the
occurrence and during the continuance of an Event of Default under Sections
8.1(a), 8.1(f) or 8.1(g), the principal amount of all Loans outstanding
and, to the extent permitted by applicable law, any interest payments on the
Loans not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable on demand at a rate that is 2% per annum in excess of the


 


51

















 


interest rate otherwise payable hereunder with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans); provided, in the case of Eurodollar Rate Loans,
upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable
upon demand at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Base Rate Loans.  Payment or acceptance of the increased rates
of interest provided for in this Section 2.9 is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent, Collateral Agent or any Lender.


 


2.10                        Fees.


 


(a)                                  Borrower Representative agrees to pay to Lenders having
Revolving Exposure:


 


(i)             (A) if
the Utilization Rate for the applicable Fiscal Quarter is less than or equal to
0.333, a commitment fee equal to 0.375% times the
average of the daily difference between (1) the Revolving Loan
Commitments, and (2) the sum of (x) the aggregate principal amount of
outstanding Revolving Loans (but not any outstanding Swing Line Loans) plus (y) the
Letter of Credit Usage and (B) if the Utilization Rate for the applicable
Fiscal Quarter is greater than 0.333, a commitment fee equal to 0.250% times the average of the daily difference between (1) the
Revolving Loan Commitments, and (2) the sum of (x) the aggregate
principal amount of outstanding Revolving Loans (but not any outstanding Swing
Line Loans) plus (y) the Letter of Credit Usage; and


 


(ii)          letter
of credit fees equal to (1) the Applicable Margin for Revolving Loans that
are Eurodollar Rate Loans (plus 2% during all times the rate of interest on the
principal of the Loans is increased pursuant to Section 2.9), times (2) the
average aggregate daily maximum amount available to be drawn under all such
Letters of Credit (regardless of whether any conditions for drawing could then
be met and determined as of the close of business on any date of determination).


 


All fees referred to in this Section 2.10(a) shall
be paid to Administrative Agent at its Principal Office and upon receipt,
Administrative Agent shall promptly distribute to each Lender its Pro Rata
Share thereof.


 


52

















 


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


 


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


 


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


 


(c)                                  All fees referred to in Section 2.10(a) and 2.10(b)(i) shall
be calculated on the basis of a 360-day year and the actual number of days
elapsed and shall be payable quarterly in arrears on the last Business Day in
each of March, June, September and December of each year during the
Revolving Loan Commitment Period, commencing on June 30, 2007, and on
the Revolving Loan Commitment Termination Date.


 


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


 


2.11                        Determination of Borrowing Base.


 


(a)                                  Eligible Accounts.  On any date of determination of the Borrowing
Base, all of the Accounts owned by any Borrower, as applicable, and reflected
in the most recent Borrowing Base Certificate delivered by the Borrower
Representative to the Collateral Agent and the Administrative Agent, shall be “Eligible Accounts” for the purposes of this
Agreement, except any Account to which any of the exclusionary criteria set
forth below applies.  Eligible Accounts
shall not include any of the following Accounts:


 


(i)             any
Account in which the Collateral Agent, on behalf of the Secured Parties, does
not have a valid perfected First Priority Lien;


 


(ii)          any
Account that is not owned by a Credit Party;


 


(iii)       any Account
due from an Account Debtor that is not domiciled in the United States or Canada
and (if not a natural person) organized


 


53














 


under the laws of the United States or Canada or any
political subdivision thereof;


 


(iv)                any
Account that is payable in any currency other than Dollars;


 


(v)                   any
Account that does not arise from the sale of goods or the performance of
services by such Credit Party in the ordinary course of its business;


 


(vi)                any
Account that does not comply with all applicable legal requirements, including,
without limitation, all laws, rules, regulations and orders of any Governmental
Authority;


 


(vii)             any
Account which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit the applicable Borrower to seek judicial enforcement
in such jurisdiction of payment of such Account, unless such Borrower (at the
time the Account was created and at all times thereafter) (i) has
qualified to do business in such jurisdiction and such qualification enables
Borrower to seek judicial recourse in such jurisdiction, (ii) had filed
and has filed and maintained effective 
such report with the appropriate office or agency of  in such 
jurisdictions, as applicable, or (iii) was and has continued to be
exempt from filing such report and has provided the Collateral Agent with
satisfactory evidence thereof;


 


(viii)          any
Account (a) upon which the right of a Borrower, as applicable, to receive
payment is not absolute or is contingent upon the fulfillment of any condition
whatsoever unless such condition is satisfied or (b) as to which such Borrower
is not able to bring suit or otherwise enforce its remedies against the Account
Debtor through judicial or administrative process or (c) that represents a
progress billing consisting of an invoice for goods sold or used or services
rendered pursuant to a contract under which the Account Debtor’s obligation to
pay that invoice is subject to a Borrower’s or any Guarantor’s, as applicable,
completion of further performance under such contract or is subject to the
equitable lien of a surety bond issuer;


 


(ix)                  to
the extent that any defense, counterclaim, setoff or dispute is asserted as to
such Account, it being understood that the amount of 


 


54

















 


any such defense, counterclaim, setoff or dispute shall be
disclosed to the Collateral Agent and that the remaining balance of the Account
shall be eligible;


 


(x)                     [RESERVED]


 


(xi)                  any
Account with respect to which an invoice or other electronic transmission
constituting a request for payment, reasonably acceptable to the Collateral
Agent in form and substance, has not been sent on a timely basis to the
applicable Account Debtor according to the normal invoicing and timing
procedures of a Borrower, as applicable;


 


(xii)               any
Account that arises from a sale to any director, officer, other employee or
Affiliate of any Credit Party, or to any entity that has any common officer or
director with any Credit Party;


 


(xiii)            to
the extent Holdings or any Subsidiary is liable for goods sold or services
rendered by the applicable Account Debtor to any Credit Party or any Subsidiary
of a Credit Party but only to the extent of the potential offset;


 


(xiv)           any
Account that arises with respect to goods that are delivered on a
bill-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may
be conditional;


 


(xv)              any
Account that is in default; provided, that, without limiting the generality of
the foregoing, an Account shall be deemed in default upon the occurrence of any
of the following:


 


(1)                      that portion of any Account that is more than sixty (60) days
past due according to its original terms of sale or which has been written off
or designated as uncollectible by such Borrower (and, for the avoidance of
doubt, the remainder of any such Account shall not be in default for purposes
hereof unless all Accounts of the applicable Account Debtor are ineligible
pursuant to clause (xvi) below); or


 


(2)                      the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of 


 


55

















 


creditors, has become insolvent, admits in writing its
inability to pay its bills as they become due or fails to pay its debts
generally as they come due; or


 


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


 


(4)                      the payment terms (at inception or as modified from time to
time) of any Account are not reasonably satisfactory to the Administrative
Agent or Collateral Agent (it being understood that Borrowers’ customary terms
as of the Closing Date are satisfactory to the Administrative Agent and the
Collateral Agent);


 


(xvi)           any
Account that is the obligation of an Account Debtor (other than an individual)
if 50% or more of the Dollar amount of all Accounts owing by that Account
Debtor are ineligible under the other criteria set forth in clause (xv) above;


 


(xvii)        any Account
as to which any of the representations or warranties in the Loan Documents are
untrue;


 


(xviii)     to the
extent such Account is evidenced by a judgment, Instrument or Chattel Paper;


 


(xix)             to
the extent (A) the Accounts owing from such Account Debtor and its
Affiliates to the Borrowers exceeds 20% of the aggregate of all Eligible
Accounts or (B) exceeds any credit limit established by the Collateral
Agent, in good faith and in the exercise of reasonable (from the perspective of
a secured asset-based lender) business judgment, following prior notice of such
limit by the Collateral Agent to the Borrower Representative;


 


(xx)                that
portion of any Account (1) in respect of which there has been, or should
have been, established by a Borrower or any Guarantor a contra account, whether
in respect of contractual allowances with respect to such Account, audit
adjustment, anticipated discounts or otherwise or (2) which is due from an
Account Debtor to whom any Credit Party owes a trade payable, but only to the
extent of such trade payable;


 


56

















 


(xxi)             any
Account on which the Account Debtor is a Governmental Authority, unless a
Credit Party, as applicable, has assigned its rights to payment of such Account
to the Administrative Agent pursuant to the Assignment of Claims Act of 1940,
as amended, in the case of a federal Governmental Authority, and pursuant to
applicable law, if any, in the case of any other Governmental Authority, and
such assignment has been accepted and acknowledged by the appropriate
government officers; or


 


(xxii)          any
Account which is due from an Account Debtor that has been structured as note
payable or has been restructured as a note payable.


 


(b)                                 Eligible Inventory.  For purposes of this Agreement, “Eligible Inventory” shall mean any
marketable raw materials and unsold finished Inventory of the Borrowers held
for sale in the ordinary course, but shall exclude any Inventory to which any
of the exclusionary criteria set forth below applies.  Eligible Inventory shall not include any
Inventory of any Borrower that:


 


(i)                       the Collateral Agent, on behalf of Secured Parties, does not
have a valid, perfected First Priority Lien on such Inventory;


 


(ii)                    (1) is
stored at a leased location where the aggregate value of Inventory exceeds
$250,000 unless the Collateral Agent has given its prior consent thereto or
unless either (x) a Collateral Access Agreement has been delivered to the
Collateral Agent, or (y) Reserves reasonably satisfactory to the
Collateral Agent have been established with respect thereto or (2) is
stored with a bailee or warehouseman where the aggregate value of Inventory
exceeds $250,000 unless either (x) an acknowledged bailee waiver letter
which is in form and substance satisfactory to the Collateral Agent and the
Administrative Agent has been received by the Collateral Agent or (y) Reserves
reasonably satisfactory to the Collateral Agent have been established with
respect thereto, or (3) is located at an owned location subject to a
mortgage in favor of a lender other than the Collateral Agent (but excluding
any mortgage in favor of the Term Loan Collateral Agent so long as such
location is also subject to a mortgage in favor of the Collateral Agent) where
the aggregate value of Inventory exceeds $250,000 unless either (x) mortgagee
waiver which is in form and substance satisfactory to the Collateral Agent and
the Administrative Agent has been delivered to the Collateral Agent or (y) Reserves
reasonably satisfactory to the Collateral Agent have been established with
respect thereto;


 


57

















 


(iii)                 is
placed on consignment, unless a valid consignment agreement which is reasonably
satisfactory to Collateral Agent is in place with respect to such Inventory and
such consignment has been perfected under the relevant UCC;


 


(iv)                is
covered by a negotiable document of title, unless such document has been
delivered to the Collateral Agent with all necessary endorsements, free and
clear of all Liens except those in favor of the Collateral Agent and the
Lenders and landlords, carriers, bailees and warehousemen if clause (ii) above
has been complied with;


 


(v)                   has
been returned by a customer due to a claimed defect or is to be returned to
suppliers;


 


(vi)                is,
in the Collateral Agent’s reasonable (from the perspective of a secured
asset-based lender) business judgment, slow moving, used, obsolete, unsalable,
discontinued, shopworn, seconds, damaged or unfit for sale at prices at least
approximating cost, or unacceptable due to age, type, category and/or quantity;


 


(vii)             consists
of display items, samples or packing or shipping materials, manufacturing
supplies, work-in process Inventory or replacement parts;


 


(viii)          is
not of a type held for sale in the ordinary course of any Credit Party’s
business;


 


(ix)                  is
not located in the United States or Canada or is in transit;


 


(x)                     which
is being processed off-site by a third party;


 


(xi)                  for
which any seller has asserted reclamation rights;


 


(xii)               breaches
any of the covenants, representations or warranties pertaining to Inventory set
forth in the Credit Documents;


 


(xiii)            consists
of Hazardous Material or goods that can be transported or sold only with
licenses that are not readily available;


 


58

















 


(xiv)           is
not covered by casualty insurance maintained as required by Section 5.5;
or


 


(xv)              is
subject to any licensing arrangement the effect of which would be to limit the
ability of Collateral Agent, or any person selling the Inventory on behalf of
Collateral Agent, to sell such Inventory in enforcement of the Collateral
Agent’s Liens, without further consent or payment to the licensor or other.


 


2.12                        Voluntary
Prepayments/Commitment Reductions.


 


(a)                                  Voluntary Prepayments.


 


(i)                       Any time and from time to time:


 


(1)                      with respect to Base Rate Loans, Borrower Representative may
prepay any such Loans on any Business Day in whole or in part, in an aggregate
minimum amount of $2,000,000 and integral multiples of $500,000 in excess of
that amount;


 


(2)                      with respect to Eurodollar Rate Loans, Borrower
Representative may prepay any such Loans on any Business Day in whole or in
part in an aggregate minimum amount of $2,000,000 and integral multiples of
$500,000 in excess of that amount; and


 


(3)                      with respect to Swing Line Loans, Borrower Representative may
prepay any such Loans on any Business Day in whole or in part in an aggregate
minimum amount of $1,000,000, and in integral multiples of $500,000 in excess
of that amount.


 


(ii)                    All
such prepayments shall be made:


 


(1)                      upon not less than one (1) Business Day’s prior written
or telephonic notice in the case of Base Rate Loans;


 


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


 


59

















 


(3)                      upon written or telephonic notice on the date of prepayment,
in the case of Swing Line Loans;


 


in each case given to Administrative Agent or Swing
Line Lender, as the case may be, by 12:00 p.m. (New York City time) on the
date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (and Administrative Agent will promptly notify each Lender)
or Swing Line Lender, as the case may be. 
Upon the giving of any such notice (which notice shall be irrevocable),
the principal amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein.  Any such voluntary prepayment shall be
applied as specified in Section 2.14(a).


 


(b)                                 Voluntary Commitment Reductions.


 


(i)                       Borrower Representative may, upon not less than three (3) Business
Days’ prior written or telephonic notice confirmed in writing to Administrative
Agent (and Administrative Agent will promptly notify each applicable Lender),
at any time and from time to time terminate in whole or permanently reduce in
part, without premium or penalty, the Revolving Loan Commitments in an amount
up to the amount by which the Revolving Loan Commitments exceed the Total
Utilization of Revolving Loan Commitments at the time of such proposed
termination or reduction; provided, any such partial reduction of the
Revolving Loan Commitments shall be in an aggregate minimum amount of
$10,000,000 and integral multiples of $1,000,000 in excess of that amount.


 


(ii)                    Borrower
Representative’s notice to Administrative Agent (which notice shall be
irrevocable) shall designate the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Loan Commitments shall be effective
on the date specified in Borrower Representative’s notice and shall reduce the
Revolving Loan Commitment of each Lender proportionately to its Pro Rata Share
thereof.


 


2.13                        Mandatory
Prepayments.


 


(a)                                  In the event of the termination of all the Revolving Loan
Commitments, Borrowers shall, on the date of such termination, repay or prepay
all its outstanding Revolving Borrowings and all outstanding Swingline Loans
and replace all outstanding Letters of Credit or cash collateralize all
outstanding Letters of Credit.


 


60

















 


(b)                                 In the event that the sum of all Lenders’ Revolving Exposures
exceeds the lesser of the Revolving Loan Commitments and the Borrowing Base, in
each case, then in effect, Borrowers shall, without notice or demand,
immediately first, repay or
prepay Revolving Borrowings, and second,
cash collateralize outstanding Letters of Credit, in each case, in an aggregate
amount sufficient to eliminate such excess; provided, however,
that (notwithstanding anything to the contrary in this clause (b)) if the sum
of all Lenders’ Revolving Exposures exceeds the Borrowing Base then in effect
as a direct result of the establishment of a Reserve or credit limit (pursuant
to Section 2.11(a)(xix)(B)) by Collateral Agent or Administrative Agent,
as applicable, for which Borrower Representative did not have at least 5 days prior
notice, Borrowers shall, without notice or demand, within 5 days of the
occurrence of such excess, first,
repay or prepay Revolving Borrowings, and second,
cash collateralize outstanding Letters of Credit, in each case, in an aggregate
amount sufficient to eliminate such excess.


 


(c)                                  In the event that the aggregate Letter of Credit Usage
exceeds the Letter of Credit Sublimit then in effect, Borrower shall, without
notice or demand, immediately cash collateralize outstanding Letters of Credit,
in each case, in an aggregate amount sufficient to eliminate such excess.


 


(d)                                 In the event an Account Control Event has occurred and is
continuing (as contemplated by Section 5.15), the Credit Parties shall pay
all proceeds of Collateral into the Collection Account, for application in
accordance with Section 2.15(b).


 


2.14                        Application
of Prepayments/Reductions.


 


(a)                                  Application of Voluntary Prepayments.  Any prepayment of
any Loan pursuant to Section 2.12(a) shall be applied as specified by
Borrower Representative in the applicable notice of prepayment; provided,
in the event Borrower Representative fails to specify the Loans to which any
such prepayment shall be applied, such prepayment shall be applied as follows:


 


first, to repay outstanding Swing Line Loans to the full
extent thereof (without a corresponding reduction of the Revolving Loan
Commitments by the amount of such prepayment);


 


second, to repay outstanding Revolving Loans to
the full extent thereof (without a corresponding reduction of the Revolving
Loan Commitments by the amount of such repayment);


 


third, to prepay outstanding reimbursement obligations with
respect to Letters of Credit (without a corresponding reduction of the
Revolving Loan Commitments by the amount of such prepayment); and


 


61

















 


fourth, to cash collateralize Letters of Credit
(without a corresponding reduction of the Revolving Loan Commitments by the
amount of such cash collateralization);


 


(b)                                 Application of Mandatory Prepayments.  Any amount required
to be paid pursuant to Section 2.13 shall be applied as follows:


 


first, to prepay outstanding Swing Line Loans to the full
extent thereof (without a corresponding reduction of the Revolving Loan
Commitments by the amount of such prepayment);


 


second, to prepay the Revolving Loans to the
full extent thereof (without a corresponding reduction of the Revolving Loan
Commitments by the amount of such prepayment);


 


third, to prepay outstanding reimbursement obligations with
respect to Letters of Credit (without a corresponding reduction of the
Revolving Loan Commitments by the amount of such prepayment); and


 


fourth, to cash collateralize Letters of Credit
(without a corresponding reduction of the Revolving Loan Commitments by the
amount of such cash collateralization);


 


(c)                                  Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans.  Considering each Class of Loans being
prepaid separately, any prepayment thereof shall be applied first to Base Rate
Loans to the full extent thereof before application to Eurodollar Rate Loans,
in each case in a manner which minimizes the amount of any payments required to
be made by Borrower Representative pursuant to Section 2.17(c).


 


2.15                        General Provisions Regarding Payments.


 


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


 


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


 


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


 


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


 


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


 


(f)                                    Administrative Agent, at its sole discretion, shall deem any
payment by or on behalf of Borrower Representative hereunder that is not made
in same day funds prior to 12:00 p.m. (New York City time) to be a
non-conforming payment.  Any such payment
shall not be deemed to have been received by Administrative Agent until the
later of (i) the time such funds become available funds, and (ii) the
applicable next Business Day. 
Administrative Agent shall give prompt telephonic notice to Borrower
Representative and each applicable Lender (confirmed in writing) if any payment
is non-conforming.  Any non-conforming
payment may constitute or become a Default or Event of Default in accordance
with the terms of Section 8.1(a). 
Interest shall continue to accrue on any principal as to which a
non-conforming payment is made until such funds become available funds (but in
no event less than the period from the date of such payment to the next
succeeding applicable Business Day) at the rate determined pursuant to Section 2.9
from the date such amount was due and payable until the date such amount is
paid in full.


 


(g)                                 If an Event of Default shall have occurred and not otherwise
been waived, and the maturity of the Obligations shall have been accelerated
pursuant to Section 8.1, all payments or proceeds received by Agents
hereunder in respect of any of the Obligations, shall be applied in accordance
with the application arrangements described in Section 7.2 of the Pledge
and Security Agreement.


 


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


 


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otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to such
Lender hereunder or under the other Credit Documents (collectively, the “Aggregate Amounts Due” to such
Lender) which is greater than the proportion received by any other Lender in
respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (a) notify
Administrative Agent and each other Lender of the receipt of such payment and (b) apply
a portion of such payment to purchase participations (which it shall be deemed
to have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided, if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender
upon the bankruptcy or reorganization of Borrower Representative or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. 
Borrower Representative expressly consents to the foregoing arrangement
and agrees that any holder of a participation so purchased may, so long as an
Event of Default has occurred and is continuing, exercise any and all rights of
banker’s lien, set-off or counterclaim with respect to any and all monies owing
by Borrower Representative to that holder with respect thereto as fully as if
that holder were owed the amount of the participation held by that holder.


 


2.17                        Making or Maintaining Eurodollar Rate Loans.


 


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


 


(b)                                 Illegality or Impracticability of Eurodollar Rate Loans.  In the event that on
any date any Lender shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto but shall be made only after
consultation with Borrower Representative and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has
become unlawful as a result of compliance by such Lender in good


 


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faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in
any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to Borrower Representative and Administrative
Agent of such determination (which notice Administrative Agent shall promptly
transmit to each other Lender). 
Thereafter (1) the obligation of the Affected Lender to make Loans
as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (2) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Borrower Representative pursuant to a Funding Notice or a
Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or
continue such Loan as or convert such Loan to, as the case may be) a Base Rate
Loan, (3) the Affected Lender’s obligation to maintain its outstanding
Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (4) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such
termination.  Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Borrower
Representative pursuant to a Funding Notice or a Conversion/Continuation
Notice, Borrower Representative shall have the option, subject to the
provisions of Section 2.17(c), to rescind such Funding Notice or
Conversion/Continuation Notice as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Administrative
Agent shall promptly transmit to each other Lender).  Except as provided in the immediately
preceding sentence, nothing in this Section 2.17(b) shall affect the
obligation of any Lender other than an Affected Lender to make or maintain
Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms
hereof.


 


(c)                                  Compensation for Breakage or Non-Commencement of Interest
Periods. 
Borrower Representative shall compensate each Lender, upon written
request by such Lender (which request shall set forth the basis for requesting
such amounts), for all reasonable losses, expenses and liabilities (including
any interest paid by such Lender to Lenders of funds borrowed by it to make or
carry its Eurodollar Rate Loans and any loss, expense or liability sustained by
such Lender in connection with the liquidation or re-employment of such funds
but excluding loss of anticipated profits) which such Lender may sustain: (i) if
for any reason (other than a default by such Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Funding
Notice or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Conversion/Continuation Notice or a telephonic request for
conversion or continuation; (ii) if any prepayment or other principal
payment of, or any conversion of, any of its Eurodollar Rate Loans occurs on a
date prior to the last day of an Interest Period applicable to that Loan; or (iii) if
any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Borrower Representative.


 


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(d)                                 Booking of
Eurodollar Rate Loans.  Any
Lender may make, carry or transfer Eurodollar Rate Loans at, to, or for the
account of any of its branch offices or the office of an Affiliate of such
Lender.


 


(e)                                  Assumptions
Concerning Funding of Eurodollar Rate Loans.  Calculation of all amounts payable to a
Lender under this Section 2.17 and under Section 2.18 shall be made
as though such Lender had actually funded each of its relevant Eurodollar Rate
Loans through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar
Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a
maturity comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of such Lender to a domestic
office of such Lender in the United States of America; provided, however,
each Lender may fund each of its Eurodollar Rate Loans in any manner it sees
fit and the foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this Section 2.17 and under Section 2.18.


 


2.18                        Increased
Costs; Capital Adequacy.


 


(a)                                  Compensation
For Increased Costs and Taxes.  Subject to the provisions of Section 2.20
(which shall be controlling with respect to the matters covered thereby), in
the event that any Lender (which term shall include Issuing Bank for purposes
of this Section 2.18(a)) shall determine (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or Governmental
Authority, in each case that becomes effective after the Closing Date, or
compliance by such Lender with any guideline, request or directive issued or
made after the Closing Date by any central bank, other Governmental Authority
or quasi-governmental authority (whether or not having the force of law) (any
such event, a “Change in Law”): (i) subjects
such Lender (or its applicable lending office) to any additional Tax with
respect to this Agreement or any of the other Credit Documents or any of its
obligations hereunder or thereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any other amount
payable hereunder; (ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of, or
advances or loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are reflected in the
definition of Adjusted Eurodollar Rate); or (iii) imposes any other
condition (other than with respect to a Tax matter) on or affecting such Lender
(or its applicable lending office) or its obligations hereunder or the London
interbank market; and the result of any of the foregoing is to increase the
cost to such Lender of agreeing to make, making or maintaining Loans hereunder
or to reduce any amount received or receivable by such Lender (or its
applicable lending office) with respect thereto; then, in any such case,
Borrower Representative 


 


66

















 


shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder.  Such Lender shall deliver to
Borrower Representative (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this Section 2.18(a), which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.


 


(b)                                 Capital
Adequacy Adjustment.  In the
event that any Lender (which term shall include Issuing Bank for purposes of
this Section 2.18(b)) shall have determined that any Change in Law
regarding capital adequacy has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of, or with reference to, such Lender’s Loans or Revolving Loan
Commitments or Letters of Credit, or participations therein or other
obligations hereunder with respect to the Loans or the Letters of Credit to a
level below that which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase-in, applicability, change
or compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five (5) Business Days after receipt by Borrower
Representative from such Lender of the statement referred to in the next
sentence, Borrower Representative shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Borrower Representative (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Lender under this Section 2.18(b), which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.


 


2.19                        Taxes;
Withholding, etc.


 


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


 


(b)                                 Withholding of
Taxes.  If any Credit Party or any
other Person is required by law to make any deduction or withholding on account
of any Tax from any sum paid or payable by any Credit Party to Administrative
Agent or any Lender (which term shall include Issuing Bank for purposes of this
Section 2.19(b)) under any of the Credit Documents: (i) Borrower
Representative shall notify Administrative Agent of any such requirement or any
change in any such requirement as soon as Borrower Representative becomes aware
of it; (ii) 


 


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Borrower Representative
shall pay any such Tax before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on any Credit Party) for
its own account or (if that liability is imposed on Administrative Agent or
such Lender, as the case may be) on behalf of and in the name of Administrative
Agent or such Lender; (iii) the sum payable by such Credit Party in
respect of which the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, Administrative Agent or such Lender, as
the case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made;
and (iv) within thirty (30) days after paying any sum from which it is
required by law to make any deduction or withholding, and within thirty (30)
days after the due date of payment of any Tax which it is required by clause (ii) above
to pay, Borrower Representative shall deliver to Administrative Agent evidence
satisfactory to the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing or other
authority; provided, no such additional amount shall be required to be paid to
any Lender under clause (iii) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature pages hereof
on the Closing Date) or after the effective date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each other
Lender) in any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such Lender.


 


(c)                                  Evidence of
Exemption From U.S. Withholding Tax.  Each Lender that is not a United States
Person (as such term is defined in Section 7701(a)(30) of the Internal
Revenue Code) for U.S. federal income tax purposes (a “Non-US Lender”) shall deliver to
Administrative Agent for transmission to Borrower Representative, on or prior
to the Closing Date (in the case of each Lender listed on the signature pages hereof
on the Closing Date) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other Lender), and
at such other times as may be necessary in the determination of Borrower
Representative or Administrative Agent (each in the reasonable exercise of its
discretion), (i) two original copies of Internal Revenue Service Form W-8BEN
or W-8ECI (or any successor forms), properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Borrower Representative to establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Credit Documents, or (ii) if
such Lender is not a “bank” or other Person described in Section 881(c)(3) of
the Internal Revenue Code and cannot deliver either Internal Revenue Service Form W-8ECI
pursuant to clause (i) above, a Certificate re Non-Bank Status together
with two original copies of Internal Revenue Service Form W-8BEN (or any
successor form), properly completed and duly executed by such Lender, and such
other documentation required under the Internal Revenue Code and reasonably
requested by Borrower Representative to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under any of the
Credit Documents.  Each Lender required
to deliver any forms, certificates or other evidence with respect to United
States federal income tax withholding matters pursuant to this Section 2.19(c) hereby
agrees, from time to time after the initial delivery 


 


68

















 


by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall promptly deliver to
Administrative Agent for transmission to Borrower Representative two new
original copies of Internal Revenue Service Form W-8BEN or W-8ECI, or a
Certificate re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8BEN (or any successor form), as the case may be, properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Borrower
Representative to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax with respect to
payments to such Lender under the Credit Documents, or notify Administrative
Agent and Borrower Representative of its inability to deliver any such forms,
certificates or other evidence.  Borrower
Representative shall not be required to pay any additional amount to any Non-US
Lender under Section 2.19(b)(iii) if such Lender shall have failed (1) to
deliver the forms, certificates or other evidence referred to in the second
sentence of this Section 2.19(c), or (2) to notify Administrative
Agent and Borrower Representative of its inability to deliver any such forms,
certificates or other evidence, as the case may be; provided, if such
Lender shall have satisfied the requirements of the first sentence of this Section 2.19(c) on
the Closing Date, or on the date of the Assignment Agreement pursuant to which
it became a Lender, as applicable, nothing in this last sentence of Section 2.19(c) shall
relieve Borrower Representative of its obligation to pay any additional amounts
pursuant this Section 2.19 in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such Lender is not
subject to withholding as described herein.


 


2.20                        Obligation
to Mitigate.  Each Lender
(which term shall include Issuing Bank for purposes of this Section 2.20)
agrees that, as promptly as practicable after the officer of such Lender
responsible for administering its Loans or Letters of Credit, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender to receive payments under Section 2.17, 2.18 or 2.19, it will,
to the extent not inconsistent with the internal policies of such Lender and
any applicable legal or regulatory restrictions, use reasonable efforts to (a) make,
issue, fund or maintain its Credit Extensions, including any Affected Loans,
through another office of such Lender, or (b) take such other measures as
such Lender may deem reasonable, if as a result thereof the circumstances which
would cause such Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
pursuant to Section 2.17, 2.18 or 2.19 would be materially reduced and if,
as determined by such Lender in its sole discretion, the making, issuing,
funding or maintaining of such Revolving Loan Commitments, Loans or Letters of
Credit through such other office or in accordance with such other measures, as
the case may be, would not otherwise adversely affect such Revolving Loan
Commitments, Loans or Letters of Credit or the interests of such Lender; provided,
such Lender will not be obligated to utilize such other office pursuant to this
Section 2.20 unless Borrower Representative agrees to pay all incremental
expenses incurred by such Lender as a result of utilizing such other office as
described in clause (i) above.  A
certificate as to the amount of any such expenses payable by Borrower
Representative pursuant to this Section 


 


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2.20 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such
Lender to Borrower Representative (with a copy to Administrative Agent) shall
be conclusive absent manifest error.


 


2.21                        Defaulting
Lenders.  Anything
contained herein to the contrary notwithstanding, in the event that any Lender,
other than at the direction or request of any regulatory agency or authority,
defaults (a “Defaulting Lender”)
in its obligation to fund (a “Funding Default”)
any Revolving Loan or its portion of any unreimbursed payment under Section 2.2(b)(iv) or
2.3(e) (in each case, a “Defaulted Loan”),
then (a) during any Default Period with respect to such Defaulting Lender,
such Defaulting Lender shall be deemed not to be a “Lender” for purposes of
voting on any matters (including the granting of any consents or waivers) with
respect to any of the Credit Documents; (b) to the extent permitted by
applicable law, until such time as the Default Excess with respect to such
Defaulting Lender shall have been reduced to zero, (i) any voluntary
prepayment of the Revolving Loans shall, if Borrower Representative so directs
at the time of making such voluntary prepayment, be applied to the Revolving
Loans of other Lenders as if such Defaulting Lender had no Revolving Loans
outstanding and the Revolving Exposure of such Defaulting Lender were zero, and
(ii) any mandatory prepayment of the Revolving Loans shall, if Borrower
Representative so directs at the time of making such mandatory prepayment, be
applied to the Revolving Loans of other Lenders (but not to the Revolving Loans
of such Defaulting Lender) as if such Defaulting Lender had funded all
Defaulted Loans of such Defaulting Lender, it being understood and agreed that
Borrower Representative shall be entitled to retain any portion of any
mandatory prepayment of the Revolving Loans that is not paid to such Defaulting
Lender solely as a result of the operation of the provisions of this clause
(b); (c) such Defaulting Lender’s Revolving Loan Commitment and
outstanding Revolving Loans and such Defaulting Lender’s Pro Rata Share of the
Letter of Credit Usage shall be excluded for purposes of calculating the
Revolving Loan Commitment fee payable to Lenders in respect of any day during
any Default Period with respect to such Defaulting Lender, and such Defaulting
Lender shall not be entitled to receive any Revolving Loan Commitment fee
pursuant to Section 2.10 with respect to such Defaulting Lender’s
Revolving Loan Commitment in respect of any Default Period with respect to such
Defaulting Lender; and (d) the Total Utilization of Revolving Loan
Commitments as at any date of determination shall be calculated as if such
Defaulting Lender had funded all Defaulted Loans of such Defaulting
Lender.  No Revolving Loan Commitment of
any Lender shall be increased or otherwise affected, and, except as otherwise
expressly provided in this Section 2.21, performance by Borrower
Representative of its obligations hereunder and the other Credit Documents
shall not be excused or otherwise modified as a result of any Funding Default
or the operation of this Section 2.21. 
The rights and remedies against a Defaulting Lender under this Section 2.21
are in addition to other rights and remedies which Borrower Representative may
have against such Defaulting Lender with respect to any Funding Default and
which Administrative Agent or any Lender may have against such Defaulting
Lender with respect to any Funding Default.


 


2.22                        Removal or
Replacement of a Lender. 
Anything contained herein to the contrary notwithstanding, in the event
that: (a) (i) any Lender (an “Increased-Cost
Lender”) shall give notice to Borrower Representative that such
Lender is an Affected Lender or that such Lender is entitled to receive
payments under Section 2.17, 2.18 or 2.19, (ii) the circumstances 


 


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which have caused such
Lender to be an Affected Lender or which entitle such Lender to receive such
payments shall remain in effect, and (iii) such Lender shall fail to
withdraw such notice within five (5) Business Days after Borrower
Representative’s request for such withdrawal; or (b) (i) any Lender
shall become a Defaulting Lender, (ii) the Default Period for such
Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender
shall fail to cure the default as a result of which it has become a Defaulting
Lender within five (5) Business Days after Borrower Representative’s request
that it cure such default; or (c) in connection with any proposed
amendment, modification, termination, waiver or consent with respect to any of
the provisions hereof as contemplated by Section 10.5(b), the consent of
Requisite Lenders shall have been obtained but the consent of one or more of
such other Lenders (each a “Non-Consenting
Lender”) whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the “Terminated Lender”),
Borrower Representative may, by giving written notice to Administrative Agent
and any Terminated Lender of its election to do so, or Administrative Agent
may, elect to cause such Terminated Lender (and such Terminated Lender hereby
irrevocably agrees) to assign its outstanding Loans and its Revolving Loan
Commitments, if any, in full to one or more Eligible Assignees satisfactory to
Administrative Agent (each a “Replacement
Lender”) in accordance with the provisions of Section 10.6 and
Terminated Lender shall pay any fees payable thereunder in connection with such
assignment; provided, (1) on the date of such assignment, the
Replacement Lender shall pay to Terminated Lender an amount equal to the sum of
(A) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Terminated Lender, (B) an amount equal to all
unreimbursed drawings that have been funded by such Terminated Lender, together
with all then unpaid interest with respect thereto at such time and (C) an
amount equal to all accrued, but theretofore unpaid fees owing to such
Terminated Lender pursuant to Section 2.10; (2) on the date of such
assignment, Borrower Representative shall pay any amounts payable to such
Terminated Lender pursuant to Section 2.17(c), 2.18 or 2.19, or otherwise
as if it were a prepayment; and (3) in the event such Terminated Lender is
a Non-Consenting Lender, each Replacement Lender shall consent, at the time of
such assignment, to each matter in respect of which such Terminated Lender was
a Non-Consenting Lender; provided, Borrower Representative may not make
such election with respect to any Terminated Lender that is also an Issuing
Bank unless, prior to the effectiveness of such election, Borrower
Representative shall have caused each outstanding Letter of Credit issued
thereby to be cancelled.  Upon the
prepayment of all amounts owing to any Terminated Lender and the termination of
such Terminated Lender’s Revolving Loan Commitments, if any, such Terminated
Lender shall no longer constitute a “Lender” for purposes hereof; provided,
any rights of such Terminated Lender to indemnification hereunder shall survive
as to such Terminated Lender.


 


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SECTION 3.                           CONDITIONS PRECEDENT


 


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


 


(a)                                  Credit
Documents.  Administrative
Agent shall have received (i) sufficient copies of this Agreement,
executed and delivered by each applicable Credit Party, the Agents and Lenders
having Revolving Loan Commitments hereunder and, (ii) Notes, if any,
requested by any Lender pursuant to Section 2.6(c) in connection with
its Revolving Loan Commitments, executed and delivered by the Borrowers.


 


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


 


(c)                                  Governmental
Authorizations and Consents.


 


(i)             Each Credit
Party shall have obtained all Governmental Authorizations and all consents
of other Persons, in each case that are necessary or advisable in connection
with the transactions contemplated under this Agreement and each of the
foregoing shall be in full force and effect and in form and substance
reasonably satisfactory to Administrative Agent.


 


(ii)          Each of the
Lenders shall have received, at least five (5) Business Days in advance of
the Closing Date, all documentation and other information required by
Governmental Authorities under applicable “know-your-customer” and anti-money
laundering rules and regulations, including, without limitation, as
required by the Uniting and Strengthening America by Providing Appropriate 


 


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Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001.


 


(d)                                 ABL Priority
Collateral.  The
Administrative Agent shall be satisfied with the valid perfected First Priority
security interest in favor of Collateral Agent, for the benefit of Secured
Parties, in the ABL Priority Collateral.


 


(e)                                  Term Priority
Collateral.  The
Administrative Agent shall be satisfied with the valid perfected Second
Priority security interest in favor of Collateral Agent, for the benefit of
Secured Parties, in the Term Priority Collateral of each Credit Party.


 


(f)                                    Opinion of
Counsel to Credit Parties. 
Lenders and their respective counsel shall have received originally
executed copies of the favorable written opinion of Gibson, Dunn &
Crutcher LLP, counsel for Credit Parties, in form and substance satisfactory to
the Administrative Agent, dated as of the Closing Date (and each Credit Party
hereby instructs such counsel to deliver such opinion to Agents and Lenders).


 


(g)                                 Fees.  Borrower Representative shall have paid to
Arranger and Agents the fees and other amounts payable on the Closing Date
referred to in Section 2.10(d).


 


(h)                                 Solvency
Certificate.  On the
Closing Date, Administrative Agent shall have received a Solvency Certificate
dated as of the Closing Date and addressed to Administrative Agent and Lenders,
in form, scope and substance satisfactory to Administrative Agent, with
appropriate attachments and demonstrating that after giving effect to the
transactions contemplated by the Credit Documents and the Term Loan Documents,
each Borrower is and will be, and Holdings and its Subsidiaries (on a
consolidated basis) are and will be Solvent.


 


(i)                                     No Litigation.  There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the opinion of Administrative Agent, singly or
in the aggregate, could reasonably be expected to restrain, prevent or impose
materially burdensome conditions on the transactions contemplated by this
Agreement or the other Credit Documents.


 


(j)                                     No Material
Adverse Effect.  Since December 31,
2006, there shall not have occurred a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of Company and its Subsidiaries, taken as a whole.


 


(k)                                  Existing Credit
Agreement Prepayments.  The
Administrative Agent shall be satisfied that, concurrently with the borrowing
of the Revolving Loans on the Closing Date, the Existing Credit Agreement will
be terminated, all Liens securing obligations under the 


 


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Existing Agreement will be
released, and all obligations under the Existing Credit Agreement repaid in
full.


 


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


 


(m)                               Term Loan
Facility.  Borrower
Representative shall have entered into the Term Loan Facility and the Term Loan
Documents shall be satisfactory to the Administrative Agent.


 


(n)                                 Inventory
Appraisal.  The
Inventory Appraisal and a written report regarding the results of a commercial
finance examination of the Borrowers shall be satisfactory to the Collateral
Agent.


 


(o)                                 Closing Date
Borrowing Base Certificate.  The Administrative Agent and the Collateral
Agent shall have received a Borrowing Base Certificate dated the Closing Date,
relating to the month most recently ended at least 5 days prior to the Closing
Date and executed by the chief financial officer of the Borrower Representative
and demonstrating Excess Availability of at least $15,000,000 after giving
effect to the Revolving Loans to be made on the Closing Date.


 


(p)                                 Blocked Account
Agreement.  Enter into
a Blocked Account Agreement with respect to each Deposit Account of any Credit
Party.


 


(q)                                 Closing Date
Certificate.  The
Administrative Agent shall have received a certificate signed by the chief
financial officer of the Borrower Representative dated the Closing Date,
certifying (A) that the conditions specified in Section 3.1(a) have
been satisfied, (B) that the representations and warranties contained in Section 4
are true and correct and (C) that no event shall have occurred and be
continuing or would result from the consummation of the Credit Extensions on
the Closing Date that would constitute an Event of Default or a Default.


 


Each Lender, by delivering
its signature page to this Agreement on the Closing Date, shall be deemed
to have acknowledged receipt of, and consented to and approved, each Credit
Document and each other document required to be approved on the Closing Date.


 


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3.2                               Conditions
to Each Credit Extension.


 


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


 


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


 


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


 


(iii)       as of such
Credit Date, the representations and warranties contained herein and in the
other Credit Documents shall be true and correct in all material respects on
and as of that Credit Date to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date;


 


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


 


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


 


(b)                                 Notices.  Any Notice shall be executed by an Authorized
Officer in a writing delivered to Administrative Agent.  In lieu of delivering a Notice, Borrower
Representative may give Administrative Agent telephonic notice by the required
time of any proposed borrowing, conversion/continuation or issuance of a Letter
of Credit, as the case may be; provided each such notice shall be
promptly confirmed in writing by delivery of the applicable Notice to Administrative
Agent on or before the applicable date of borrowing, continuation/conversion or
issuance.  Neither Administrative Agent
nor any Lender shall incur


 


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any liability to Borrower
Representative in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized on behalf of Borrower
Representative or for otherwise acting in good faith.


 


SECTION 4.                            REPRESENTATIONS AND
WARRANTIES


 


In order to induce
Lenders and Issuing Bank to enter into this Agreement and to make each Credit
Extension to be made thereby, each Credit Party represents and warrants to each
Lender and Issuing Bank, on the Closing Date and on each Credit Date, that the
following statements are true and correct:


 


4.1                               Organization; Requisite
Power and Authority; Qualification.  Each of
Holdings and its Subsidiaries (a) is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization as
identified in Schedule 4.1 (subject to such changes as are permitted by Section 6.9),
(b) has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry out the transactions contemplated thereby, and (c) is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had, and could not be reasonably expected to have, a Material Adverse
Effect.


 


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


 


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


 


4.4                               No Conflict. 
The execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents do not and will not (a) violate any
provision of any law or any governmental rule or regulation applicable to
Holdings or any of its Subsidiaries, any of


 


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the Organizational
Documents of Holdings or any of its Subsidiaries; (b) violate any order,
judgment or decree of any court or other agency of government binding on
Holdings or any of its Subsidiaries except to the extent such violation could
not be reasonably expected to have a Material Adverse Effect; (c) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of Holdings or any of its
Subsidiaries except to the extent such violation could not reasonably be
expected to have a Material Adverse Effect; (d) result in or require the
creation or imposition of any Lien upon any of the properties or assets of
Holdings or any of its Subsidiaries (other than any Liens created under any of
the Credit Documents in favor of Collateral Agent, on behalf of Secured
Parties); or (e) require any approval of stockholders, members or partners
or any approval or consent of any Person under any Contractual Obligation of
Holdings or any of its Subsidiaries, except for such approvals or consents
which will be obtained on or before the Closing Date and disclosed in writing
to Lenders.


 


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


 


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


 


4.7                               Financial Condition. 
Holdings has heretofore delivered to Administrative Agent (a) the
audited consolidated balance sheet of Company and its Subsidiaries for the Fiscal
Years ended December 31, 2004, December 31, 2005 and December 31,
2006, and the related audited consolidated statements of income, stockholders’
equity and cash flows of each of such companies for each such Fiscal Year then
ended, together with all related notes and schedules thereto, and (b) the
unaudited consolidated balance sheet of Company and its Subsidiaries for the
three-month period ended March 30, 2007 and the related unaudited
consolidated statements of income, stockholders’ equity and cash flows of the
Company and its Subsidiaries for such three-month period then ended, together
with all related notes and schedules thereto. 
All such statements of Company and its Subsidiaries were prepared in
conformity with GAAP and fairly present, in all material respects, the
financial position of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows of
the entities described therein for each of the periods then ended, subject, in
the case of such unaudited financial statements, to changes resulting from
audit and normal year-end adjustments and the absence of footnotes.  As of the Closing Date, neither Company nor
any of its 


 


77

















 


Subsidiaries has any
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company and its Subsidiaries taken as a whole.


 


4.8                               Projections. 
On and as of the Closing Date, the projections of Holdings and its
Subsidiaries for (x) the period Fiscal Year 2007 through and including
Fiscal Year 2013 and (y) the Fiscal Quarters beginning with the second
Fiscal Quarter of 2007 through and including the fourth Fiscal Quarter of 2008
(collectively, the “Projections”)
previously delivered to Administrative Agent and the Lenders are based on good
faith estimates and assumptions made by the management of Holdings, it being
recognized, however, that projections as to future events are not to be viewed
as facts and that actual results during the period or periods covered by the
Projections may differ from the projected results and that the differences may
be material.


 


4.9                               No Material Adverse
Change.  Since December 31, 2006, except as set
forth in Schedule 4.9, no event, circumstance or change has occurred that has
caused or evidences, or could reasonably be expected to cause, either in any
case or in the aggregate, a Material Adverse Effect.


 


4.10                        No Restricted Payments. 
Neither Holdings nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Payment or agreed to do so except as permitted pursuant to Section 6.5.


 


4.11                        Litigation; Adverse
Facts.  Except as set forth in Schedule 4.11 hereto,  there are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect.  Neither
Holdings nor any of its Subsidiaries (a) is in violation of any applicable
laws (including Environmental Laws) that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, or (b) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.


 


4.12                        Payment of Taxes. 
Except as otherwise permitted under Section 5.3, all tax returns
and reports of Holdings and its Subsidiaries required to be filed by any of
them have been timely filed, and all taxes shown on such tax returns to be due
and payable and all assessments, fees and other governmental charges upon
Holdings and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable.  Neither Holdings nor
any of its Subsidiaries knows of any proposed tax assessment against Holdings
or any of its Subsidiaries other than those which are being actively contested
by Holdings or such Subsidiary in good faith and by appropriate 


 


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proceedings and for which
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.


 


4.13                        Properties.


 


(a)                                  Title.  Each of
Holdings and its Subsidiaries has (i) good, sufficient and legal title to
(in the case of fee interests in real property), (ii) valid leasehold
interests in (in the case of leasehold interests in real or personal property),
and (iii) good title to (in the case of all other personal property), all
of their respective properties and assets reflected in the most recent
financial statements delivered to the Administrative Agent, in each case except
for assets disposed of (x) since the date of such financial statements and
prior to the Closing Date in the ordinary course of business or (y) as
otherwise permitted under Section 6.9 and except for such defects that
neither individually nor in the aggregate could reasonably be expected to have
a Material Adverse Effect.  Except as
permitted by this Agreement, all such properties and assets are free and clear
of Liens.


 


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


 


(c)                                  Intellectual Property. 
Company and its Subsidiaries own or have the valid right to use all
material Intellectual Property, and all Intellectual Property is free and clear
of any and all Liens other than Liens securing the Obligations and Liens
permitted pursuant to Section 6.2(i). 
Any registrations in respect of the Intellectual Property are in full
force and effect and are valid and enforceable. The conduct of the business of
Company and its Subsidiaries as currently conducted, and as currently
contemplated to be conducted, including, but not limited to, all products,
processes or services, made, offered or sold by Company and its Subsidiaries,
does not and will not infringe upon, violate, misappropriate or dilute any
intellectual property of any third party which infringement, violation,
misappropriation or dilution could reasonably be expected to have a Material
Adverse Effect. To the knowledge of Holdings, Company or any of its
Subsidiaries, no third party is infringing upon or misappropriating, violating
or otherwise diluting any Intellectual Property where such infringement,
misappropriation, violation or dilution could reasonably be expected to have a
Material Adverse Effect.  Neither
Holdings, Company nor any of its Subsidiaries is enjoined from using any
material Intellectual Property, and except as could reasonably be expected to
have a Material Adverse Effect, there is no 


 


79

















 


pending or, to the
knowledge of Holdings, Company or any of its Subsidiaries, threatened claim or
litigation contesting (i) any right of Company or any of its Subsidiaries
to own or use any Intellectual Property, or (ii) the validity or enforceability
of any Intellectual Property.


 


4.14                        Environmental Matters. 
Except as set forth in Schedule 4.14 hereto: (i) neither Holdings
nor any of its Subsidiaries nor any of their respective Facilities or
operations are subject to any outstanding written order, consent decree or
settlement agreement with any Person relating to any Environmental Law, any
Environmental Claim, or any Hazardous Materials Activity which individually or
in the aggregate would reasonably be expected to have a Material Adverse
Effect; (ii) as of the Closing Date, or except as otherwise reported to
the Administrative Agent after the Closing Date, neither Holdings nor any of
its Subsidiaries has received within the last ten (10) years any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
§ 9604), or any comparable state law; (iii) there are and, to each of
Holdings’ and its Subsidiaries’ knowledge, have been, no conditions,
occurrences, or Hazardous Materials Activities which would reasonably be
expected to form the basis of an Environmental Claim against Holdings or any of
its Subsidiaries, which individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect; and (iv) neither Holdings nor
any of its Subsidiaries nor, to any Credit Party’s knowledge, any predecessor
of Holdings or any of its Subsidiaries has filed any notice under any
Environmental Law indicating past or present treatment of Hazardous Materials at
any Facility, and none of Holdings’ or any of its Subsidiaries’ operations
involves the generation, transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent, which individually or in the aggregate would reasonably be expected
to have a Material Adverse Effect. 
Notwithstanding anything to the contrary in this Section 4.14,
compliance with all current or reasonably foreseeable future requirements
pursuant to or under Environmental Laws would not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect and no event
or condition has occurred or is occurring with respect to Holdings or any of
its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including, without limitation,
any matter included in Schedule 4.14, which individually or in the aggregate
has had, or would reasonably be expected to have, a Material Adverse Effect.


 


4.15                        No Defaults. 
Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations or covenants
contained in (i) any of its Contractual Obligations (other than the Credit
Documents and the Term Loan Documents), and no condition exists which, with the
giving of notice or the lapse of time or both, could constitute such a default,
except where the consequences, direct or indirect, of such default or defaults,
if any, could not reasonably be expected to have a Material Adverse Effect and (ii) any
Credit Document and any Term Loan Document.


 


4.16                        Governmental Regulation. 
Neither Holdings nor any of its Subsidiaries is subject to regulation
under the Federal Power Act or the Investment Company Act of 1940 or under any
other federal or state statute or regulation which may limit its ability to
incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.  


 


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Neither Holdings nor any
of its Subsidiaries is a “registered investment company” or a company “controlled”
by a “registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.


 


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


 


4.18                        Employee Matters. 
Neither Holdings nor any of its Subsidiaries is engaged in any unfair
labor practice that could reasonably be expected to have a Material Adverse
Effect.  Except as set forth in Schedule
4.18, there is (a) no unfair labor practice complaint pending against
Holdings or any of its Subsidiaries, or to the best knowledge of Holdings and
Company, threatened against any of them before the National Labor Relations
Board and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement that is so pending against Holdings or any of
its Subsidiaries or to the best knowledge of Holdings and Company, threatened
against any of them, and the hours worked by and payments made to employees of
Holdings or any of its Subsidiaries have not violated the Fair Labor Standards
Act or any other law dealing with such matters, (b) no strike or work stoppage in
existence or threatened involving Holdings or any of its Subsidiaries, and (c) to
the best knowledge of Holdings and Company, no union representation question
existing with respect to the employees of Holdings or any of its Subsidiaries
and, to the best knowledge of Holdings and Company, no union organization
activity that is taking place; which in each case in clause (a), (b) or (c) above
(including, without limitation, any matter included in Schedule 4.18), could
either individually or in the aggregate reasonably be expected to have a
Material Adverse Effect.


 


4.19                        Employee Benefit Plans. 
Holdings, each of its Subsidiaries and each of their respective ERISA
Affiliates are in material compliance with all applicable provisions and
requirements of ERISA and the Internal Revenue Code and the regulations and
published interpretations thereunder with respect to each Employee Benefit
Plan, and have performed all their obligations under each Employee Benefit Plan
in all material respects.  Each Employee
Benefit Plan which is intended to qualify under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service indicating that such Employee Benefit Plan is so
qualified and nothing has occurred subsequent to the issuance of such
determination letter which reasonably would be expected to cause such Employee
Benefit Plan to lose its qualified status. 
No liability to the PBGC (other than required premium payments), the
Internal Revenue Service, any Employee Benefit Plan or any trust established
under Title IV of ERISA has been or reasonably is expected to be incurred by
Holdings, any of its Subsidiaries or any of their ERISA Affiliates.  Except as set forth in Schedule 4.19 (and 


 


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except for changes in
matters identified in Schedule 4.19 that are not, individually or in the
aggregate, material), no ERISA Event has occurred or is reasonably expected to
occur.  Except as set forth in Schedule
4.19, and except to the extent required under Section 4980B of the
Internal Revenue Code or similar state laws, no Employee Benefit Plan provides
health or welfare benefits (through the purchase of insurance or otherwise) for
any retired or former employee of Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates. 
Except as set forth in Schedule 4.19 (and except for changes in matters
identified in Schedule 4.19 that are not, individually or in the aggregate,
material), the present value of the aggregate benefit liabilities under each
Pension Plan sponsored, maintained or contributed to by Holdings, any of its
Subsidiaries or any of their ERISA Affiliates, (determined as of the end of the
most recent plan year on the basis of the actuarial assumptions specified for
funding purposes in the most recent actuarial valuation for such Pension Plan),
did not exceed the aggregate current value of the assets of such Pension
Plan.  Neither Holdings, its Subsidiaries
nor their respective ERISA Affiliates maintains, contributes to or is required
to contribute to any Multiemployer Plan.


 


4.20                        Certain Fees. 
Except as otherwise disclosed in writing to Administrative Agent and
Arranger, no broker’s or finder’s fee or commission will be payable with
respect hereto or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders, Agents and Arranger against, and agrees that it
will hold Lenders, Agents and Arranger harmless from, any claim, demand or
liability for any such broker’s or finder’s fees alleged to have been incurred
in connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.


 


4.21                        Solvency. 
Each Borrower is, and Holdings and its Subsidiaries (on a consolidated
basis), are, and, upon the incurrence of any Obligation by any Credit Party on
any date on which this representation and warranty is made, will be, Solvent.


 


4.22                        Collateral.


 


(a)                                  Collateral Documents. The security interests created in favor
of Collateral Agent under the Collateral Documents constitute, as security for
the obligations purported to be secured thereby, a legal, valid and enforceable
security interest in all of the Collateral referred to therein in favor of
Collateral Agent for the benefit of the Lenders.  The security interests in and Liens upon the
Collateral described in the Collateral Documents are valid and perfected First
Priority or Second Priority Liens (in accordance with the priorities set forth
in the Intercreditor Agreement) to the extent such security interests and Liens
can be perfected by such filings and recordations.  No consents, filings or recordings are
required in order to perfect (or maintain the perfection or priority of) the
security interests purported to be created by any of the Collateral Documents,
other than (i) such as have been obtained and which remain in full force
and effect, (ii) the periodic filing of UCC continuation statements in
respect of UCC financing statements filed by or on behalf of Collateral Agent,
and (iii) with respect to such items of Collateral as to 


 


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which this Agreement or
the Collateral Documents do not require any consent, filing or recordation.


 


(b)                                 Absence of Third Party Filings. 
Except such as may have been filed in favor of Collateral Agent as contemplated
by Section 4.23(a) above and except as set forth on Schedule 4.22
annexed hereto or, after the Closing Date, as may have been filed with respect
to a Lien permitted by Section 6.2, (i) no effective UCC financing
statement, fixture filing or other instrument similar in effect covering all or
any part of the Collateral is on file in any filing or recording office and (ii) no
effective filing with respect to a Lien covering all or any part of the
Collateral is on file with the United States Patent and Trademark Office or
United States Copyright Office or any other Governmental Authority.


 


4.23                        Disclosure. 
No representation or warranty of Holdings and its Subsidiaries contained
in any Credit Document or in any other documents, certificates or written
statements furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries for use in connection with the transactions contemplated hereby or
thereby contains any untrue statement of a material fact or omits (when taken
as a whole) to state a material fact (known to Holdings or Company, in the case
of any document not furnished by either of them) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. 
Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Holdings or Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results.  There is no fact known to Holdings or Company
(other than matters of a general economic nature) that, individually or in the
aggregate, has had, or could reasonably be expected to result in, a Material
Adverse Effect and that has not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in connection
with the transactions contemplated hereby.


 


4.24                        Deposit Accounts


 


Annexed hereto as Schedule
4.24 is a list of all Deposit Accounts maintained by the Credit Parties as
of the Closing Date, which Schedule includes, with respect to each deposit account
(i) the name and address of the depository; (ii) the account number(s) maintained
with such depository; and (iii) a contact person at such depository.


 


SECTION 5.                            AFFIRMATIVE COVENANTS


 


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


 


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each Credit Party shall perform, and shall cause each
of its Subsidiaries to perform, all covenants in this Section 5.


 


5.1                               Financial Statements and
Other Reports.  Holdings will deliver to Administrative Agent
and Collateral Agent for each Lender:


 


(a)                                  [RESERVED];


 


(b)                                 Quarterly Financial Statements. 
Within two (2) Business Days after the date on which Holdings files
or is required to file its Form 10-Q under the Exchange Act (but without
giving effect to any extension pursuant to Rule 12b-25 under the Exchange
Act (or any successor rule) or otherwise) (or, if Holdings is not required to
file a Form 10-Q under the Exchange Act, within fifty (50) days after the
end of each of the first three Fiscal Quarters of each Fiscal Year (commencing
with the Fiscal Quarter ending June 30, 2007)), (i) the consolidated
and consolidating balance sheets of Holdings and its Subsidiaries as at the end
of such Fiscal Quarter and the related consolidated (and with respect to
statements of income, consolidating) statements of income and cash flows of
Holdings and its Subsidiaries for such Fiscal Quarter and for the period from
the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year, all
prepared in accordance with GAAP and in reasonable detail and certified by the
chief financial officer, senior vice president-finance, treasurer or controller
of Company or Holdings that they fairly present, in all material respects, the
consolidated financial condition of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and normal
year-end adjustments and the absence of footnotes, and (ii) a narrative
report describing the financial condition and results of operations of Holdings
and its Subsidiaries for such Fiscal Quarter in form and substance reasonably
satisfactory to Administrative Agent;


 


(c)                                  Annual Financial Statements. 
Within two (2) Business Days after the date on which the Holdings
files or is required to file its Form 10-K under the Exchange Act (but
without giving effect to any extension pursuant to Rule 12b-25 under the
Exchange Act (or any successor rule) or otherwise) (or, if Holdings is not
required to file a Form 10-K under the Exchange Act, within one hundred
(100) days after the end of each Fiscal Year (commencing with the Fiscal Year
ending December 31, 2007)), (i) the consolidated and consolidating  balance sheets of Holdings and its
Subsidiaries as at the end of such Fiscal Year and the related consolidated
(and with respect to statements of income, consolidating) statements of income,
stockholder’s equity and cash flows of Holdings and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial statements, all
prepared in accordance with GAAP and in reasonable detail and certified by the
chief financial officer, senior vice president-finance, treasurer or controller
of Company or Holdings that they fairly present, in all material respects, the
consolidated financial condition of 


 


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Holdings and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, and (ii) a narrative report
describing the financial condition and results of operations of Holdings and
its Subsidiaries in form and substance reasonably satisfactory to
Administrative Agent; (iii) with respect to such consolidated financial
statements a report thereon of independent certified public accountants of
recognized national standing selected by Holdings, and reasonably satisfactory
to Administrative Agent (which report shall be unqualified as to going concern
and scope of audit, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial position
of Holdings and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards) together with a
written statement by such independent certified public accountants stating (1) that
their audit examination has included a review of the terms of the Credit
Documents, and (2) whether, in connection therewith, any condition or
event that constitutes a Default or an Event of Default under Section 6.8
or otherwise with respect to accounting matters has come to their attention
and, if such a condition or event has come to their attention, specifying the
nature and period of existence thereof;


 


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


 


(e)                                  Statements of Reconciliation after Change
in Accounting Principles.  If, as a result of any change
in accounting principles and policies from those used in the preparation of the
financial statements referred to in Section 4.7, the consolidated
financial statements of Holdings and its Subsidiaries delivered pursuant to Section 5.1(b) or
5.1(c) will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions had no
such change in accounting principles and policies been made, then, together
with the first delivery of such financial statements after such change, one or
more statements of reconciliation for all such prior financial statements in
form and substance reasonably satisfactory to Administrative Agent;


 


(f)                                    Notice of Default, etc. 
Promptly upon, and in any event within five (5) days after, any
officer of Holdings or any of its Subsidiaries obtaining knowledge (i) of
any condition or event that constitutes a Default or an Event of Default or
that notice has been given to Holdings or any of its Subsidiaries with respect
thereto; (ii) that any Person has given any notice to Holdings or any of
its Subsidiaries or taken any other action with respect to any claimed default
or event or condition of the type referred to in Section 8.1(b); (iii) of
the occurrence of any event or change that has caused or evidences or would
reasonably be expected to have, either in any case or in the aggregate, a
Material Adverse Effect; or (iv) the occurrence of a Liquidity Event, a
certificate of its Authorized Officers specifying the nature and period of
existence of such condition, event or change, or specifying the notice given
and action taken by any such Person and the nature of such claimed Event of
Default, Default, default, event or


 


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condition, and what action
Holdings or the applicable Subsidiary has taken, is taking and proposes to take
with respect thereto;


 


(g)                                 Notice of
Litigation.  Promptly
upon, and in any event within five (5) days after, any officer of Holdings
or any of its Subsidiaries obtaining knowledge of (i) the institution of,
or non-frivolous threat of, any Adverse Proceeding not previously disclosed in
writing by Company to Lenders, or (ii) any material development in any
Adverse Proceeding that, in the case of either (i) or (ii) if
adversely determined, could be reasonably expected to have a Material Adverse
Effect, or seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated hereby, written notice thereof together with such other
information as may be reasonably available to Holdings or any of its
Subsidiaries to enable Lenders and their counsel to evaluate such matters;


 


(h)                                 ERISA.  (i) Promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto; and (ii) with reasonable promptness, copies of (1) each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates with the Internal Revenue Service with respect to each Pension
Plan and (2) copies of such other documents or governmental reports or
filings relating to any Employee Benefit Plan as Administrative Agent shall
reasonably request;


 


(i)                                     Financial Plan.  As soon as practicable and in any event no
later than the 90 days after the beginning of each Fiscal Year, a monthly
consolidated and consolidating  plan
and financial forecast for such Fiscal Year (a “Financial Plan”), including a forecasted consolidated balance
sheet and forecasted consolidated and consolidating statements of income and
consolidated statement of cash flows of Holdings and its Subsidiaries for such
Fiscal Year, together with pro forma Compliance Certificates for each such
Fiscal Year and an explanation of the assumptions on which such forecasts are
based;


 


(j)                                     Insurance
Report.  As soon as practicable and in
any event by the last day of each calendar year, a report in form and substance
reasonably satisfactory to Administrative Agent outlining all material
insurance coverage maintained as of the date of such report by Holdings and its
Subsidiaries and all material insurance coverage planned to be maintained by
Holdings and its Subsidiaries in the immediately succeeding calendar year;


 


(k)                                  Accountants’
Reports.  Promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all reports
submitted to Holdings or Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants, including



 


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any comment letter submitted
by such accountants to management in connection with their annual audit;


 


(l)                                     Fixed Charge
Coverage Compliance Certificate.  A Fixed Charge Coverage Compliance
Certificate relating to the Minimum Fixed Charge Coverage Ratio for the most
recently ended four Fiscal Quarter period for which financial statements are
required to have been delivered hereunder, (i) within two Business Days
after the occurrence of any Liquidity Event (A) for which a Liquidity
Event Cure Notice has not been properly delivered as required by Section 8.2
within ten (10) (or, if applicable, fifteen (15)) days after the
occurrence of such Liquidity Event, (B) for which a Liquidity Event Cure
Notice was properly delivered and a Liquidity Event Cure did not occur in
accordance with Section 8.2 or (C) for which no Liquidity Event Cure
Notice is available and (ii) on the fifteenth day of each calendar month
after such Liquidity Event occurred (but only if such Liquidity Event exists on
such date);


 


(m)                               Environmental
Reports and Audits.  As soon as
practicable following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Company or any of its Subsidiaries or
by independent consultants, with respect to environmental matters at any
Facility or which relate to any environmental liabilities of Holdings or its
Subsidiaries which, in any such case, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;


 


(n)                                 Other
Information.  (A) Promptly
upon their becoming available, copies of (i) all financial statements,
reports, notices and proxy statements sent or made available generally by
Holdings to holders of its Indebtedness or to holders of its public equity
securities or by any Subsidiary of Holdings to its security holders other than
Holdings or another Subsidiary of Holdings, (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Holdings or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, (iii) all press releases and other statements made available
generally by Holdings or any of its Subsidiaries to the public concerning
material developments in the business of Holdings or any of its Subsidiaries,
and (B) such other information and data with respect to Holdings or any of
its Subsidiaries (including, without limitation, financial statements with
respect to Holdings and its Subsidiaries) as from time to time may be
reasonably requested by Administrative Agent or any Lender;


 


(o)                                 Borrowing Base
Certificate.  (i) No
later than the 15th day of each calendar month, a certificate in
the form of Exhibit L (a “Borrowing Base
Certificate”) showing the Borrowing Base as of the close of business
on the immediately preceding calendar month, each Borrowing Base Certificate to
be certified as complete and correct in all material respects on behalf of the
Borrowers by the chief financial officer of the Borrower Representative, provided
that if an Event of Default has occurred and is continuing, at Administrative
Agent’s or Collateral Agent’s request, such Borrowing Base Certificate shall be
furnished more frequently than monthly, at intervals to be determined in
Administrative Agent’s and Collateral Agent’s 
collective discretion (but in no case more frequently than weekly); and provided
further that if a 


 


87

















 


Liquidity Event has occurred
and is continuing or existed within the preceding 30 days, the Borrowing Base
shall be computed weekly and Holdings shall deliver the Borrowing Base
Certificate to the Administrative Agent and the Collateral Agent no later than
three Business Days following the end of each week;


 


(p)                                 Collateral
Reports.


 


(i)             No later than
the 15th day of each calendar month, and at such other
times as may be requested by the Collateral Agent, as of the period then ended:


 


(1)                      a detailed
aging of the Accounts of the Borrowers (A) including all invoices aged by
due date (with an explanation of the terms offered) and (B) reconciled to
the Borrowing Base Certificate delivered as of such date prepared in a manner
reasonably acceptable to the Administrative Agent and Collateral Agent,
together with a summary specifying the name, address, and balance due for each
Account Debtor;


 


(2)                      a schedule
detailing the Inventory of the Borrowers, in form reasonably satisfactory to
the Collateral Agent, (A) by location (showing Inventory in transit, any
Inventory located with a third party under any consignment, bailee arrangement,
or warehouse agreement), by class (raw material and finished goods), by product
type, and by volume on hand, which Inventory shall be valued at the lower of
Cost or market and adjusted for Reserves as the Collateral Agent has previously
indicated to the Borrower Representative, (B) including a report of any
variances or other results of Inventory counts performed by the Borrowers since
the last Inventory schedule delivered pursuant to this Section 5.1(p)(i),
and (C) reconciled to the Borrowing Base Certificate delivered as of such
date;


 


(3)                      a worksheet of
calculations prepared by the Borrower Representative to determine Eligible
Accounts and Eligible Inventory, such worksheets detailing the Accounts and
Inventory excluded from Eligible Accounts and Eligible Inventory and the reason
for such exclusion;


 


(4)                      a
reconciliation of the Accounts and Inventory of the Borrowers between the
amounts shown in the  Borrowers’
general ledger and financial statements and the reports delivered pursuant to
clauses (1) and (2) above;


 


88

















 


(5)                      a
reconciliation of the loan balance per the Borrowers’ general ledger to the
loan balance under this Agreement; and


 


(6)                      as of the month
then ended, a schedule and aging of the Borrowers’ accounts payable.


 


(ii)          reasonably
promptly upon a request by the Administrative Agent or Collateral Agent in  their good faith and in the exercise of
reasonable (from the perspective of a secured asset-based lender) business
judgment:


 


(1)                      copies of
invoices in connection with the invoices issued by the Borrowers in connection
with any Accounts, credit memos, shipping and delivery documents, and other
information related thereto; and


 


(2)                      copies of
purchase orders, invoices, and shipping and delivery documents in connection
with any Inventory purchased by any Borrowers.


 


(q)                                 during such
times, if any, as Borrowing Base Certificates are deliverable on a weekly basis
pursuant to clause (o) above, as soon as available but in any event within
three Business Days after the end of each calendar week and at such other times
as may be requested by the Collateral Agent, as of the period then ended, a
rollforward of the Borrowers sales journal, cash receipts journal (identifying
trade and non-trade cash receipts) and debit memo/credit memo journal.


 


5.2                               Existence.  Except as otherwise permitted under Section 6.9,
each Credit Party will, and will cause each of its Subsidiaries to, at all
times preserve and keep in full force and effect (i) its existence and (ii) all
rights and franchises, licenses and permits material to the business of
Holdings and its Subsidiaries (on a consolidated basis).


 


5.3                               Payment of
Taxes and Claims.  Each Credit
Party will, and will cause each of its Subsidiaries to, pay all Taxes imposed
upon it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty or fine accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable which, if unpaid, might become a Lien upon any
of its properties or assets; provided, no such Tax or claim need be paid
if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as adequate reserve or other
appropriate provision, as shall be required in conformity with GAAP shall have
been made 


 


89

















 


therefor.  No Credit Party will, nor will it permit any
of its Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than Holdings or any of its
Subsidiaries).


 


5.4                               Maintenance
of Properties.  Each Credit
Party will, and will cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear
excepted, all material properties owned by Holdings, Company or its
Subsidiaries or used or useful in the business of Company and its Subsidiaries
(including all Intellectual Property) and from time to time will make or cause
to be made all appropriate repairs, renewals and replacements thereof.


 


5.5                               Insurance.  Each Credit Party will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained, with financially
sound and reputable insurers, such public liability insurance, third party
property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons.  Without limiting the generality
of the foregoing, each Credit Party will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained (a) flood insurance
with respect to each Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, in each case in
compliance with any applicable regulations of the Board of Governors of the
Federal Reserve System, and (b) replacement value casualty insurance on
the Collateral under such policies of insurance, with such insurance companies,
in such amounts, with such deductibles, and covering such risks as are at all
times carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses.  Each such policy of insurance shall (i) name
the Administrative Agent, the Collateral Agent and the Lenders as an additional
insured thereunder as its interests may appear and (ii) in the case of
each casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Collateral Agent, that names the Collateral
Agent, on behalf of Lenders as the loss payee thereunder and provides for at
least thirty (30) days’ prior written notice to Collateral Agent of any
modification or cancellation of such policy.


 


5.6                               Inspections;
Appraisals; and Inventories.


 


(a)                                  Each Credit
Party will, and will cause each of its Subsidiaries to, permit any authorized
representatives designated by Administrative Agent, Collateral Agent or any
Lender (and, in the case of any Lender, accompanied by Administrative Agent or
Collateral Agent) to visit and inspect any of the properties of any Credit
Party and any of its respective Subsidiaries, to inspect the Collateral, or
otherwise to inspect, copy and take extracts from its and their financial and
accounting records, and to discuss its and their properties, assets, affairs,
finances and accounts with its and their officers and independent public
accountants (it being understood that, prior to the occurrence and continuance
of an Event of Default, (x) any such 


 


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discussions or meetings
shall be limited to Administrative Agent and Collateral Agent and (y) in
the case of discussions or meetings with the independent public accountants,
only if Company has been given the opportunity to participate in such
discussions or meetings), all upon reasonable notice and at such reasonable
times during normal business hours and as often as may reasonably be requested.


 


(b)                                 Upon the
request of the Administrative Agent or the Collateral Agent not more frequently
than once per year after reasonable prior notice, permit the Collateral Agent
or professionals (including investment bankers, consultants, accountants,
lawyers and appraisers) retained by the Collateral Agent to conduct Inventory
Appraisals and commercial finance examinations, including, without limitation,
of (i) the Borrowers’ practices in the computation of the Borrowing Base,
and (ii) the assets included in the Borrowing Base and related financial
information such as, but not limited to, sales, gross margins, payables,
accruals and reserves.  Subject to the
following sentences, the Credit Parties shall pay the reasonable fees and
expenses of the Collateral Agent or such professionals with respect to such
evaluations and appraisals.  Without
limiting the foregoing, during any period in which Excess Availability has been
less than $12.0 million for five (5) consecutive days, the Credit Parties
acknowledge that the Administrative Agent and Collateral Agent may undertake,
in the aggregate, up to two (2) inventory appraisals and two (2) commercial
finance examinations each Fiscal Year, at the Credit Parties’ expense.  Notwithstanding the foregoing, the Collateral
Agent may cause additional Inventory Appraisals and commercial finance
examinations to be undertaken as it in its discretion deems necessary or
appropriate, at the expense of the Lenders, or if an Event of Default or
Liquidity Event shall have occurred and be continuing, at the expense of the
Credit Parties.


 


(c)                                  Upon the
request of the Collateral Agent after reasonable prior notice, cause at least
one (1) physical inventory at each of the Credit Parties’ locations to be
undertaken in each twelve (12) month period conducted by such inventory takers
as are satisfactory to the Collateral Agent and following such methodology as
is consistent with the methodology used in the immediately preceding inventory
or as otherwise may be reasonably acceptable to the Collateral Agent.  The Borrower Representative, within thirty
(30) days following the completion of such inventory, shall provide the
Collateral Agent with a reconciliation of the results of such inventory (as
well as of any other physical inventory undertaken by a Credit Party).


 


(d)                                 Prior to the
effectiveness of any person becoming an Additional Co-Borrower hereunder, an
Inventory Appraisal, a written report regarding the results of a commercial
finance examination and/or appraisal in respect of any Real Estate Assets owned
by such proposed Additional Co-Borrower, in each case, conducted by an independent
appraisal firm reasonably acceptable to the Collateral Agent.


 


5.7                               Lenders
Meetings.  Holdings and
Company will, upon the request of Administrative Agent or Requisite Lenders,
participate in a meeting of Administrative Agent and Lenders once during each
calendar year to be held at Company’s corporate offices (or at such 


 


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other location as may be
agreed to by Company and Administrative Agent) at such time as may be agreed to
by Company and Administrative Agent.


 


5.8                               Compliance
with Laws.  Each Credit
Party will comply, and shall cause each of its Subsidiaries to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including all Environmental Laws), noncompliance with
which could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.


 


5.9                               Environmental.


 


(a)                                  Environmental
Disclosure.  Each Credit
Party will, and will cause each of its Subsidiaries to, deliver to
Administrative Agent and Lenders:


 


(i)             as soon as
practicable following receipt thereof, copies of all material environmental
audits, investigations, analyses and reports of any kind or character, whether
prepared by personnel of Holdings or any of its Subsidiaries or by independent
consultants, governmental authorities or any other Persons, with respect to
significant environmental matters at any Facility or with respect to any
Environmental Claims; provided, however, that this Section 5.9(a)(i) shall
not apply to communications covered by valid claims of attorney client
privilege or to attorney work product generated by legal counsel to Holdings or
any of its Subsidiaries;


 


(ii)          promptly upon
the occurrence thereof, written notice describing in reasonable detail (1) any
Release required to be reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws, (2) any
remedial action taken by Holdings or any other Person in response to (A) any
Hazardous Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (B) any
Environmental Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect, and (3) Holdings or
any of its Subsidiaries’ discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could cause such
Facility or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any Environmental
Laws;


 


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(iii)       as soon as
practicable following the sending or receipt thereof by Holdings or any of its
Subsidiaries, a copy of any and all written communications to or from any
Governmental Authority or any Person bringing an Environmental Claim against
Holdings or any of its Subsidiaries with respect to: (1) any Environmental
Claims that, individually or in the aggregate, have a reasonable possibility of
giving rise to a Material Adverse Effect, (2) any Release required to be
reported to any Governmental Authority, and (3) any written request for
information from any Governmental Authority stating such Governmental Authority
is investigating whether Holdings or any of its Subsidiaries may be potentially
responsible for any Hazardous Materials Activity; and


 


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


 


(b)                                 Hazardous
Materials Activities, Etc.  Each
Credit Party shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and all actions necessary to (i) cure any violation
of applicable Environmental Laws by such Credit Party or its Subsidiaries that
would reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and (ii) make an appropriate response to any Environmental
Claim against such Credit Party or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder where failure to do so would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.


 


5.10                        Subsidiaries.  In the event that any Person becomes a
Domestic Subsidiary of Company, Company shall (a) promptly, and in any
event within ten (10) days, cause such Domestic Subsidiary to become
a Guarantor hereunder and a Grantor under the Pledge and Security Agreement by
executing and delivering to Administrative Agent and Collateral Agent a
Counterpart Agreement, and (b) take all such actions and execute and
deliver, or cause to be executed and delivered, all Perfection Deliverables and
such documents, instruments, agreements, opinions and certificates as are
similar to those described in Sections 3.1(b) and 3.1(f), and any other
actions required by the Pledge and Security Agreement.  In the event that any Person becomes a
Foreign Subsidiary of Company, and the ownership interests of such Foreign
Subsidiary are owned by Company or by any Domestic Subsidiary thereof, Company
shall, or shall cause such Domestic Subsidiary to, promptly, and in any event
within ten (10) days, deliver all such documents, instruments, agreements,
and certificates as are similar to those described in Section 3.1(b), and
Company shall take, or shall cause such Domestic Subsidiary to take, all of the
actions referred to in clause (i) of the definition of “Perfection
Deliverables” necessary to grant and to perfect a First Priority or Second
Priority Lien (in accordance with the priorities set forth in the Intercreditor
Agreement) in favor of Collateral Agent, for the benefit of Secured Parties,
under the Pledge and Security Agreement in 66% of such ownership
interests.  


 


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With respect to each such
Subsidiary, Company shall promptly send to Administrative Agent written notice
setting forth with respect to such Person (i) the date on which such
Person became a Subsidiary of Company, and (ii) all of the data required
to be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of
Company; provided, such written notice upon Administrative Agent’s
approval of the contents therein shall be deemed to supplement
Schedule 4.1 and 4.2 for all purposes hereof.  Notwithstanding anything to the contrary in
this Section 5.10, the requirements of this Section 5.10 shall not
apply to any property or Subsidiary created or acquired after the Closing Date,
as to which the Collateral Agent has determined in its sole discretion that the
collateral value thereof is insufficient to justify the difficulty, time and/or
expense of obtaining a perfected security interest therein.  The Collateral Agent is hereby authorized by
the Lenders to enter into such amendments to the Collateral Documents as the
Collateral Agent deems necessary to effectuate the provisions of this Section 5.10.


 


5.11                        Additional
Real Estate Assets.  In the event
that any Credit Party acquires, or any Person that becomes a Credit Party
holds, a Real Estate Asset that is (a) a fee interest with a fair market
value equal to or greater than $500,000 or (b) a leasehold interest with a
value that Administrative Agent in its sole discretion, after consultation with
Company, determines is material, and such interest has not otherwise been made
subject to a perfected First Priority or Second Priority Lien (in accordance
with the priorities set forth in the Intercreditor Agreement) of the Collateral
Documents in favor of Collateral Agent, for the benefit of Secured Parties,
then such Credit Party shall, promptly, and in any event within ten (10) days
of such Credit Party acquiring such Real Estate Asset or such Person becoming a
Credit Party, take all such actions and execute and deliver, or cause to be
executed and delivered, all Real Estate Asset Deliverables and Perfection
Deliverables with respect to each such Real Estate Asset to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid and, subject to
any filing and/or recording referred to herein, perfected First Priority or
Second Priority Lien (in accordance with the priorities set forth in the
Intercreditor Agreement) in such Real Estate Assets, and reports and other
information reasonably satisfactory to Administrative Agent regarding
environmental matters (including, without limitation, a Phase I Report) with
respect to such Real Estate Assets.  In
addition to the foregoing, Company shall, at the request of Requisite Lenders,
deliver, from time to time (but, prior to the occurrence and during the
continuance of a Default or Event of Default, not more than once every two
calendar years), to Administrative Agent such appraisals of Real Estate Assets
with respect to which Collateral Agent has been granted a Lien.  Notwithstanding anything to the contrary in
this Section 5.11, the requirements of this Section 5.11 shall not
apply to any Real Estate Asset acquired after the Closing Date, as to which the
Collateral Agent has determined in its sole discretion that the collateral
value thereof is insufficient to justify the difficulty, time and/or expense of
obtaining a perfected security interest therein.  The Collateral Agent is hereby authorized by
the Lenders to enter into such amendments to the Collateral Documents as the
Collateral Agent deems necessary to effectuate the provisions of this Section 5.11.


 


5.12                        [Reserved].


 


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5.13                        Further
Assurances.  At any time
or from time to time upon the request of Administrative Agent or Collateral
Agent, each Credit Party will, at its expense, promptly execute, acknowledge
and deliver such further documents and do such other acts and things as
Administrative Agent or Collateral Agent may reasonably request in order to
effect fully the purposes of the Credit Documents.  In furtherance and not in limitation of the
foregoing, each Credit Party shall take such actions as Administrative Agent or
Collateral Agent may reasonably request from time to time to ensure that the
Obligations are guarantied by the Guarantors and are secured by substantially
all of the assets of Holdings, and its Subsidiaries and all of the outstanding
Capital Stock of Company and its Subsidiaries (in each case subject to
limitations contained in the Credit Documents with respect to Foreign
Subsidiaries).


 


5.14                        ERISA.  Neither Holdings, its Subsidiaries or their
respective ERISA Affiliates shall establish, maintain, contribute to, or become
required to contribute to any Multiemployer Plan.


 


5.15                        Cash
Management


 


(a)                                  The Credit
Parties shall deliver, or cause to be delivered, to Collateral Agent a Blocked
Account Agreement duly authorized, executed and delivered by each bank where a
Deposit Account for the benefit of any Credit Party is maintained.  Each Borrower shall further execute and
deliver, and shall cause each Guarantor to execute and deliver, such agreements
and documents as Collateral Agent may reasonably require in connection with
such Blocked Accounts and such Blocked Account Agreements.  Other than Excluded Deposit Accounts, no
Credit Party shall establish any Deposit Accounts after the Closing Date,
unless such Borrower or Guarantor (as applicable) has complied in full with the
provisions of this Section 5.15(a) with respect to such Deposit
Accounts.  Each Blocked Account Agreement
shall require, after notice from the Collateral Agent to a Blocked Account Bank
(which the Collateral Agent agrees will only be given after the occurrence of
an Account Control Event) (and until the Collateral Agent notifies such Blocked
Account Bank to the contrary (which the Collateral Agent agrees will be given
promptly after the written request of the Borrower Representative if such
Account Control Event has terminated), the ACH or wire transfer no less
frequently than daily (and whether or not there are then any outstanding
Obligations) to the collection account maintained by the Collateral Agent at
JPMorgan Chase Bank, N.A. (the “Collection
Account”), of all cash receipts and collections, including, without
limitation, the following:


 


(i)             all available
cash receipts from the sale of Inventory and other assets;


 


(ii)          all proceeds of
collections of Accounts;


 


(iii)       all Net Asset
Sale Proceeds and Net Insurance/Condemnation Proceeds, and all other cash
payments received by a Credit Party 


 


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from
any Person or from any source or on account of any sale or other transaction or
event;


 


(iv)      the then contents of each
Deposit Account;


 


(v)         the then entire
ledger balance of each Blocked Account; and


 


(vi)      the net proceeds of all
credit card charges.


 


(b)                                 The Collection
Account shall at all times be in the name, and under the sole dominion and
control of the Collateral Agent.  The
Credit Parties hereby acknowledge and agree that (i) the Credit Parties
have no right of withdrawal from the Collection Account, (ii) the funds on
deposit in the Collection Account shall at all times be collateral security for
all of the Obligations and (iii) the funds on deposit in the Collection
Account shall be applied as provided in this Agreement.  In the event that, notwithstanding the
provisions of this Section 5.15, any Credit Party receives or otherwise
has dominion and control of any such proceeds or collections, such proceeds and
collections shall be held in trust by such Credit Party for the Collateral
Agent, shall not be commingled with any of such Credit Party’s other funds or
deposited in any account of such Credit Party and shall, not later than the
Business Day after receipt thereof, be deposited into the Collection Account or
dealt with in such other fashion as such Credit Party may be instructed by the
Collateral Agent.


 


SECTION 6.                            NEGATIVE COVENANTS


 


Each Credit Party covenants
and agrees that, so long as any Commitment is in effect and until payment in
full of all Obligations and cancellation or expiration of all Letters of
Credit, such Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.


 


6.1                               Indebtedness.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or guaranty, or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness, except:


 


(a)                                  the
Obligations;


 


(b)                                 Company may
become and remain liable with respect to Indebtedness to any of its
wholly-owned Guarantor Subsidiaries, and any wholly-owned Guarantor Subsidiary
of Company may become and remain liable with respect to Indebtedness to Company
or any other wholly-owned Guarantor Subsidiary of Company; provided, (i) all
such Indebtedness under this subclause (b) shall be (x) evidenced by
promissory notes and all such notes shall be subject to a First Priority or
Second Priority Lien (in accordance with the priorities set forth in the 


 


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Intercreditor Agreement)
pursuant to the Pledge and Security Agreement and (y) unsecured and
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement that in any such case, is reasonably satisfactory to
Administrative Agent, and (ii) any payment by any such Subsidiary under
any guaranty of the Obligations shall result in a pro tanto
reduction of the amount of any Indebtedness owed by such Subsidiary to Company
or to any of its Subsidiaries for whose benefit such payment is made;


 


(c)                                  [RESERVED];


 


(d)                                 Indebtedness of
Company and its Subsidiaries arising in respect of netting services or
overdraft protections with deposit accounts; provided, that such
Indebtedness is extinguished within three (3) Business Days of its
incurrence;


 


(e)                                  guaranties by
Company of Indebtedness of a Guarantor Subsidiary or guaranties by a Subsidiary
of Company of Indebtedness of Company or a Guarantor Subsidiary with respect,
in each case, to Indebtedness otherwise permitted to be incurred pursuant to
this Section 6.1;


 


(f)                                    Indebtedness of
Company and its Subsidiaries existing on the Closing Date and described in
Schedule 6.1, but not any extensions, renewals, refinancings or
replacements of such Indebtedness except (i) renewals and extensions
expressly provided for in the agreements evidencing any such Indebtedness as
the same are in effect on the date of this Agreement and (ii) refinancings
and extensions of any such Indebtedness if the terms and conditions thereof are
not materially less favorable (taken as a whole) to the obligor thereon or to
the Lenders than the Indebtedness being refinanced or extended, and the average
life to maturity thereof is greater than or equal to that of the Indebtedness
being refinanced or extended; provided, such Indebtedness permitted
under the immediately preceding clause (i) or (ii) above shall not (A) include
Indebtedness of an obligor that was not an obligor with respect to the
Indebtedness being extended, renewed or refinanced or (B) exceed in a
principal amount the Indebtedness being renewed, extended or refinanced;


 


(g)                                 purchase money
Indebtedness of Company and its Subsidiaries and Capital Leases (other than in
connection with sale-leaseback transactions) of Company and its Subsidiaries, in
each case incurred in the ordinary course of business to provide all or a
portion of the purchase price or cost of construction of an asset or an
improvement of an asset not constituting part of the Collateral; provided,
that (A) such Indebtedness when incurred shall not exceed the purchase
price or cost of improvement or construction of such asset, (B) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing, (C) such
Indebtedness shall be secured only by the asset acquired, constructed or
improved in connection with the incurrence of such Indebtedness and (D) the
aggregate principal amount of all such Indebtedness shall not exceed $7,500,000
at any time outstanding;


 


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(h)           other
Indebtedness of Company and its Subsidiaries, which is unsecured, in an
aggregate principal amount not to exceed $10,000,000 at any time outstanding;


 


(i)            Indebtedness
of Company under any Interest Rate Agreement or Currency Agreement entered into
for hedging purposes and in form and substance reasonably satisfactory to the
Administrative Agent;


 


(j)            Indebtedness
evidenced by the Term Loan Documents in an aggregate amount not to exceed an
amount equal to $125.0 million less the amount of all mandatory or scheduled
payments thereon incurred pursuant to the Term Loan Facility and any Permitted
Refinancing thereof;


 


(k)           additional
senior unsecured or subordinated unsecured Indebtedness, the terms and
conditions of which (i) shall provide for a maturity date at least one
year after the Maturity Date hereunder and with no scheduled amortization or
other scheduled payments of principal prior to such date, and (ii) shall
otherwise be reasonably satisfactory to Administrative Agent; provided,
that (A) after giving pro forma effect to the incurrence of such
Indebtedness (and, if applicable, giving pro forma effect to any Subject
Transaction pursuant to Section 6.8(c)), (1) the Leverage Ratio is
not greater than 4.0 to 1.0 or (2) the Consolidated Coverage Ratio is at
least 2.0 to 1.0 and (B) no Default or Event of Default has occurred or is
continuing at the time of incurrence or would result therefrom;


 


(l)            Indebtedness
of a Person existing at the time such Person becomes a Subsidiary of Company
following the Closing Date, which Indebtedness is in existence at the time such
Person becomes a Subsidiary and is not created in connection with or in
contemplation of such Person becoming a Subsidiary; provided that the
aggregate principal amount of all such Indebtedness in the aggregate shall not
exceed $5,000,000 at any time outstanding;


 


(m)          Indebtedness
of Holdings which is unsecured and subordinated to the Obligations in a manner
satisfactory to Administrative Agent and which is issued in connection with the
redemption or replacement of any preferred Capital Stock of Holdings, in
principal amount not to exceed the amount of such preferred Capital Stock being
redeemed or replaced, the terms and conditions of which (i) shall provide
for a maturity date at least one year after the Maturity Date hereunder, with
no scheduled amortization of principal or mandatory prepayments prior to such
date, (ii) no scheduled or mandatory cash interest payments prior to such
date, except to the extent Holdings has sufficient cash therefor and (iii) shall
otherwise be satisfactory to Administrative Agent;


 


(n)           Capital
Leases of Company entered into in connection with sale-leaseback transactions
permitted by Section 6.3; provided, that (A) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the


 


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time of such refinancing and
(B) such Indebtedness shall be secured only by the facility which is the
subject of such Capital Lease; and


 


(o)           additional
secured Indebtedness, the terms and conditions of which (i) shall provide
for a maturity date at least one year after the Maturity Date hereunder and
with no scheduled amortization of principal prior to such date, (ii) unless
reasonably satisfactory to the Administrative Agent pursuant to clause (iii) below,
shall be no more restrictive (without taking into account fees or interest
rates), taken as a whole, than those set forth in the Term Loan Documents as in
effect on the Closing Date, and (iii) shall otherwise be reasonably
satisfactory to Administrative Agent; provided, that (A) after
giving pro forma effect to the incurrence of such Indebtedness (and, if
applicable, giving pro forma effect to any Subject Transaction pursuant to Section 6.8(c)),
the Secured Debt Ratio is less than 2.5 to 1.0 and (B) no Default or Event
of Default has occurred or is continuing at the time of incurrence or would
result therefrom.


 


6.2          Liens.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Holdings, Company or any such Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom, except:


 


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


 


(b)           Liens
imposed by law for Taxes that are not yet required to be paid pursuant to Section 5.3;


 


(c)           statutory
Liens of landlords, banks (and rights of set-off), of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed by law
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA), in each case incurred in the ordinary
course of business (i) for amounts not yet overdue or (ii) for
amounts that are overdue and that (in the case of any such amounts overdue for
a period in excess of five (5) days) are being contested in good faith by
appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;


 


(d)           deposits
made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money or other Indebtedness), 


 


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so long as no foreclosure,
sale or similar proceedings have been commenced with respect to any portion of
the Collateral on account thereof;


 


(e)           easements,
rights-of-way, restrictions, encroachments, minor defects or irregularities in
title and other similar charges, in each case which do not and will not
interfere in any material respect with the use or value thereof;


 


(f)            any
interest or title of a lessor or sublessor under any operating or true lease of
real estate entered into by Company or its Subsidiaries in the ordinary course
of its business covering only the assets so leased;


 


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


 


(h)           any
attachment or judgment Lien not constituting an Event of Default under Section 8.1(h);


 


(i)            non-exclusive
licenses of Intellectual Property granted by Company or any of its Subsidiaries
in the ordinary course of business consistent with past practice and not
interfering in any respect with the ordinary conduct of the business of Company
or such Subsidiary;


 


(j)            bankers
liens and rights of set-off with respect to customary depositary arrangements
entered into in the ordinary course of business of Company and its
Subsidiaries;


 


(k)           Liens
granted by Company or its Subsidiaries existing on the Closing Date and
described in Schedule 6.2; provided, that (A) no such Lien
shall at any time be extended to cover property or assets other than the
property or assets subject thereto on the Closing Date and (B) the
principal amount of the Indebtedness secured by such Liens shall not be
extended, renewed, refunded, replaced or refinanced except as otherwise
permitted by Section 6.1(f);


 


(l)            Liens
securing (i) Indebtedness permitted pursuant to Section 6.1(g), provided,
any such Lien shall encumber only the asset acquired, constructed or improved
with the proceeds of such Indebtedness and (ii) Indebtedness permitted
pursuant to Section 6.1(n), provided any such Lien shall encumber
only the facility with is the subject of such Capital Lease;


 


(m)          Liens
securing Indebtedness permitted under Section 6.1(l);  provided that such Liens are of a type described in Section 6.2(l)(i) and
are not created in contemplation of or in connection with such Person becoming
a Subsidiary, such Liens will not apply to any other


 


100

















 


property of Holdings or any
of its Subsidiaries, and such Liens will secure only those obligations secured
by such Liens on the date such Person becomes a Subsidiary; and


 


(n)           Liens
securing Indebtedness permitted under Section 6.1(j) or 6.1(o).


 


6.3          Sales
and Leasebacks.  Each of
Holdings and Company shall not, and shall not permit any of its Subsidiaries to
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an operating lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (a) which Holdings or any of its Subsidiaries has sold
or transferred or is to sell or transfer to any other Person (other than
Holdings or any of its Subsidiaries) or (b) which Holdings or any of its
Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by such Credit Party to
any Person (other than Holdings or any of its Subsidiaries) in connection with
such lease; provided that Company and its Subsidiaries may (i) become
and remain liable as lessee, guarantor or other surety with respect to any such
lease which is a Capital Lease permitted pursuant to Section 6.1(g), and (ii) so
long as no Default or Event of Default has occurred or is continuing or shall
be caused thereby, sale-leaseback transactions in respect of any manufacturing
Facilities owned by Company as of the Closing Date; provided, further,
that (A) the material terms and conditions of such sale-leaseback
transaction (including any Capital Lease in connection with such transaction)
shall be reasonably satisfactory to the Administrative Agent, (B) Collateral
Agent is granted a valid First Priority or Second Priority Lien (in accordance
with priorities set forth in the Intercreditor Agreement) in Company’s
leasehold interest in connection with such transaction, (C) the lessor (or
lenders under any Capital Lease) in connection with such transaction shall
agree to provide Collateral Agent access to the Collateral located at such
facility pursuant to an agreement reasonably satisfactory to Administrative
Agent and the Collateral Agent (the terms of which shall include subordination
and non-disturbance provisions with respect to any such Collateral, and other
terms as may be reasonably required by Administrative Agent or the Collateral
Agent), (D) the amount of consideration payable to Company or its
Subsidiaries (and the aggregate principal amount of Indebtedness in respect of
any Capital Leases) in any such transaction shall not exceed the fair market
value of any such facility (determined in good faith by the board of directors
of Company (or similar governing body)), and shall not exceed $30,000,000 in
the aggregate and (E) the Net Asset Sale Proceeds with respect to any such
Capital Lease shall be applied to repay indebtedness under the Term Loan
Facility if and to the extent required thereunder.


 


6.4          No
Further Negative Pledges. 
Except (i) pursuant to this Agreement, (ii) pursuant to the
terms of Indebtedness permitted under Section 6.1(h), 6.1(j), 6.1(k) or
6.1(o), (iii) with respect to specific property encumbered to secure
payment of particular Indebtedness or to be sold pursuant to an executed
agreement with respect to a permitted Asset Sale, (iv) pursuant to
customary non-assignment or no-subletting clauses in leases, licenses or
contracts entered into in the ordinary course of business, which restrict only
the assignment of such lease, license or contract, as applicable, or (v) in
connection with purchase money financing or Capital Leases permitted under Section 6.1(g),
6.1(l) or 6.1(n) (in each case provided the prohibition applies


 


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only to the asset being acquired or constructed, or which is the
subject of such Capital Lease), each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties
or assets, whether now owned or hereafter acquired.


 


6.5          Restricted
Payments.  Each of
Holdings and Company shall not, and shall not permit any of its Subsidiaries or
Affiliates through any manner or means or through any other Person to, directly
or indirectly, declare, order, pay, make or set apart, or agree to declare,
order, pay, make or set apart, or agree to declare, order, pay, make or set
apart, any sum for any Restricted Payment except that:


 


(a)           Subsidiaries
of Company may make Restricted Payments (i) to Company or to any parent
entity of such Subsidiary which is a wholly-owned Guarantor Subsidiary and (ii) so
long as no Liquidity Event or Default or Event of Default has occurred and is
then continuing, on a pro rata basis to the equity holders of any other
Guarantor Subsidiary;


 


(b)           (i) so
long as no Liquidity Event or Default or Event of Default shall have occurred
and be continuing or shall be caused thereby, Company and its Subsidiaries may
make prepayments and regularly scheduled payments of principal and interest in
respect of any Indebtedness permitted under Sections 6.1(b), (ii) Company
and its Subsidiaries may make scheduled payments and mandatory prepayments of
principal, and regularly scheduled payments of interest in respect of and, so
long as no Liquidity Event or Default or Event of Default shall have occurred
and be continuing, voluntary repayments of, any Indebtedness permitted under Section 6.1(h),
(iii) Company and its Subsidiaries may make mandatory prepayments and
regularly scheduled payments of principal and interest in respect of any
Indebtedness permitted under Section 6.1(k) (to the extent
constituting subordinated Indebtedness) or 6.1(n), but only to the extent such
payments are permitted by the terms, and subordination provisions (if any)
applicable to, such Indebtedness, and (iv) Company and its Subsidiaries
may make payments in respect of guarantees permitted under Section 6.1(e) to
the extent the Indebtedness guaranteed thereby is permitted to be paid under
this Section 6.5 (in each case under the foregoing subclauses (i), (ii) and
(iii) in accordance with the terms of, and only to the extent required by,
and subject to the subordination provisions contained in, the indenture or
other agreement pursuant to which such Indebtedness as issued);


 


(c)           Company
may make Restricted Payments to Holdings to the extent reasonably necessary to
permit Holdings (in each case so long as Holdings applies the amount of any
such Restricted Payment for such purpose within five (5) days of receipt
of such amount) (i) to pay general administrative and corporate overhead
costs and expenses (including, without limitation, expenses arising by virtue
of Holdings’ status as a public company (including fees and expenses related to
filings with the Securities and Exchange Commission, roadshow expenses,
printing expenses and fees and expenses of attorneys and auditors)), (ii) so
long as no Default or Event of Default, in each case, in respect of Section 8.1(a),
8.1(f) or 8.1(g) shall have occurred and be continuing or shall be
caused thereby, to pay the fees and expenses to Sponsor required to be paid
under the Management Services Agreement, as in effect on December 16, 


 


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2004 or after giving effect
to any amendment, restatement or other modification thereto in accordance with Section 6.15(a)
hereof, (iii) to discharge the consolidated tax liabilities of Holdings
and its Subsidiaries and (iv) so long as no Liquidity Event or Default or
Event of Default shall have occurred and be continuing or shall be caused
thereby, to allow Holdings to repurchase shares of, or options to purchase
shares of, Capital Stock of Holdings from employees, officers or directors of
Holdings, Company or any Subsidiaries thereof in any aggregate amount not to
exceed $1,000,000 in any calendar year or $5,000,000 in the aggregate since the
Closing Date;


 


(d)           (i) Company
may make Restricted Payments to Holdings in an aggregate amount not to exceed
the Restricted Payment Amount (measured on the date of such Restricted
Payment); provided that, notwithstanding the foregoing, in any four Fiscal
Quarter period, the Company may make Restricted Payments to Holdings in an
amount not to exceed the Periodic Dividend Amount; provided further, that, in
any case, any Restricted Payment under this Section 6.5(d)(i) may
only be made so long as (w) no Liquidity Event or Default or Event of
Default has occurred or is continuing or shall be caused thereby after giving
effect to such Restricted Payment, (x) after giving effect to such
Restricted Payment, Holdings and its Subsidiaries shall have satisfied the RP
Conditions, (y) to the extent Consolidated Adjusted EBITDA for the Test
Period most recently ended prior to such Restricted Payment is less than or
equal to $40,000,000, after giving effect to such Restricted Payment, the total
amount of Restricted Payments made pursuant to this Section 6.5(d)(i) during
the Fiscal Quarter in which the subject Restricted Payment is to be paid and
the three Fiscal Quarters most recently ended does not exceed any applicable
Maximum Restricted Payment Amount, and (z) a Section 6.5(d) Certificate
has been delivered; and (ii) Holdings may make Restricted Payments in an
amount equal to the actual amount of Restricted Payments made by Company to
Holdings pursuant to Section 6.5(d)(i) that have not previously been
distributed by Holdings, so long as no Liquidity Event or Default or Event of
Default shall have occurred and be continuing or shall be caused thereby;
provided, however, that notwithstanding anything to the contrary contained in this
Section 6.5(d), this Section 6.5(d)(ii) shall not prohibit the
payment of any dividend within 60 days after the date of declaration of such
dividend if such dividend was permitted under this Section 6.5(d)(ii) on
the date of declaration;


 


(e)           (i) so
long as no Default or Event of Default, in each case, in respect of Sections
8.1(a), 8.1(f) or 8.1(g) shall have occurred and be continuing or
shall be caused thereby, Holdings may make Restricted Payments to Sponsor to
the extent of Restricted Payments received by Holdings from Company pursuant to
Sections 6.5(c)(ii) and (ii) so long as no Liquidity Event or Default
or Event of Default shall have occurred and be continuing or shall be caused
thereby, Holdings may make Restricted Payments (x) as described in Section 6.5(c)(iv) and
(y) in respect of Indebtedness permitted by Section 6.1(m) and
in connection with the redemption or replacement of any preferred Capital Stock
of Holdings described in Section 6.1(m);


 


(f)            additional
Restricted Payments in an aggregate amount not to exceed at any time
outstanding $10,000,000 (minus any Investments made pursuant to Section 6.7(l)),
if no


 


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Liquidity Event or Default
or Event of Default has occurred or is continuing or would result therefrom;
provided that any Restricted Payment made pursuant to this Section 6.5(f) may
not subsequently be characterized as a Restricted Payment made pursuant to any
other provision of this Agreement; and


 


(g)           if
no Default or Event of Default has occurred or is continuing or would result
therefrom, additional Restricted Payments in an aggregate amount not to exceed
$25,000,000, which Restricted Payments are funded exclusively by Holdings
Equity Proceeds that have not been applied to any other purpose; provided that
any Restricted Payment made pursuant this Section 6.5(g) may not
subsequently be characterized as a Restricted Payment made pursuant to any
other provision of this Agreement.


 


6.6          Restrictions
on Subsidiary Distributions.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Company to (a) pay dividends or make any other distributions on any of
such Subsidiary’s Capital Stock owned by Company or by any other Subsidiary of
Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to
Company or to any other Subsidiary of Company, (c) make loans or advances
to Company or to any other Subsidiary of Company, or (d) transfer any of
its property or assets to Company or to any other Subsidiary of Company other
than restrictions (i) existing under this Agreement or the Term Loan
Documents (as in effect on the Closing Date), (ii) in agreements
evidencing Indebtedness permitted by Sections 6.1(g) and 6.1(l) that
impose restrictions on the property so acquired, (iii) by reason of
customary provisions restricting assignments, subletting or other transfers
contained in leases, licenses, Joint Venture agreements and similar agreements
entered into in the ordinary course of business, (iv) restrictions in
agreements evidencing Indebtedness secured by Liens permitted by Section 6.2(m) that
impose restrictions on the property securing such Indebtedness, (v) customary
restrictions on assets that are the subject of an Asset Sale permitted by Section 6.9
or a Capital Lease permitted by Section 6.1(n) and (vi) in
agreements evidencing Indebtedness permitted by Section 6.1(h) or
6.1(k), in each case, so long as such restrictions are not more restrictive,
taken as a whole, than the restrictions set forth in this Agreement.


 


6.7          Investments.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, make or
own any Investment in any Person, including without limitation any Joint
Venture, except:


 


(a)           Investments
in Cash and Cash Equivalents;


 


(b)           Investments
by Holdings in Company;


 


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(c)           Investments
made by Company or any of its Subsidiaries in Subsidiary Guarantors which are
wholly-owned Subsidiaries of Company;


 


(d)           Investments
received by Company or any of its Subsidiaries in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers or suppliers of such Person, in each case in the
ordinary course of business;


 


(e)          
accounts receivable arising, and trade credit granted, in the ordinary course
of business of Company and its Subsidiaries, and any Securities received by
Company or any of its Subsidiaries in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss, and any prepayments and other
credits to suppliers made in the ordinary course of business;


 


(f)            intercompany
loans to the extent permitted under Section 6.1(b);


 


(g)           Consolidated
Capital Expenditures by Company or any of its Subsidiaries permitted by Section 6.8(b);


 


(h)           loans
and advances by Company or any of its Subsidiaries to employees of Company and
its Subsidiaries made in the ordinary course of business in an aggregate
principal amount not to exceed $2,000,000 at any time outstanding;


 


(i)            Investments
by Company or any of its Subsidiaries made in connection with Permitted
Acquisitions permitted pursuant to Section 6.9(d);


 


(j)            Investments
by Company or any of its Subsidiaries constituting non-Cash consideration
received by Company and its Subsidiaries in connection with permitted Asset
Sales pursuant to subsection 6.9(c);


 


(k)           Company
and its Subsidiaries may continue to own the Investments owned by them as of
the Closing Date and described in Schedule 6.7;


 


(l)            other
Investments by Company or any of its Subsidiaries in an aggregate amount not to
exceed at any time outstanding $10,000,000 (minus any Restricted Payments made
pursuant to Section 6.5(f)), if no Liquidity Event or Default or Event of
Default has occurred or is continuing or would result therefrom; and


 


(m)          additional
Investments by Company or any of its Subsidiaries in an aggregate amount not to
exceed the Restricted Payment Amount so long as (i) no Liquidity


 


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Event or Default or Event of
Default has occurred or is continuing or shall be caused thereby after giving
effect to such Investment and (ii) after giving effect to such Investment,
Company and its Subsidiaries shall have satisfied the Investment Conditions.


 


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


 


6.8          Financial
Covenants.


 


(a)           Minimum
Fixed Charge Coverage Ratio.  Upon
the occurrence and during the continuance of a Liquidity Event, Company shall
not permit the Fixed Charge Coverage Ratio for any Test Period for which a
Fixed Charge Coverage Compliance Certificate is required to be delivered to be
less than 1.0 to 1.0.


 


(b)           Maximum
Consolidated Capital Expenditures. 
Holdings and Company shall not, and shall not permit its Subsidiaries
to, make or incur Consolidated Capital Expenditures, except that Company and
any Guarantor Subsidiary may make or incur Consolidated Capital Expenditures (i) during
any calendar year in an aggregate amount not in excess of (A) $10,000,000
plus (B) the unused portion of Consolidated Capital Expenditures permitted
to be made or incurred in the immediately preceding calendar year (it being
understood that the amount under this subclause (B) shall not exceed the
lesser of such unused portion and $10,000,000) and (ii) associated with
the consolidation of Facilities and costs associated with the acquiring and/or
the development and construction of one new manufacturing facility in an
aggregate amount not to exceed $15,000,000.


 


(c)           Certain
Calculations.


 


(i)             With
respect to any period during which a Permitted Acquisition or an Asset Sale has
occurred (each, a “Subject Transaction”), for purposes of determining compliance with the financial
covenants set forth in this Section 6.8 and the Leverage Ratio calculation
in Section 6.1(k), Consolidated Adjusted EBITDA and the components of
Consolidated Fixed Charges, as applicable, shall be calculated with respect to
such period on a pro forma basis (including pro forma adjustments arising out
of events which are directly attributable to a specific transaction, are
factually supportable and are expected to have a continuing impact, in each
case determined on a basis consistent with Article 11 of Regulation S-X
promulgated under the Securities Act and as interpreted by the staff of the
Securities and Exchange Commission, which would include cost savings resulting
from head count reduction, closure


 


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of Facilities and similar
restructuring charges, which pro forma adjustments shall be certified by the
chief financial officer of Company) using the historical audited financial statements
of any business so acquired or to be acquired or sold or to be sold and the
consolidated financial statements of Holdings and its Subsidiaries which shall
be reformulated as if such Subject Transaction, and any Indebtedness incurred
or repaid in connection therewith, had been consummated or incurred or repaid
at the beginning of such period.


 


(ii)          With
respect to any period commencing prior to the Closing Date, for purposes of
determining compliance with the financial covenants set forth in this Section 6.8,
Consolidated Adjusted EBITDA shall be calculated with respect to the portion of
such period prior to the Closing Date based on the historical Consolidated
Adjusted EBITDA of the Company during such time, Consolidated Capital
Expenditures shall be calculated with respect to the portion of such period
prior to the Closing Date based on the historical Consolidated Capital
Expenditures of the Company during such time, and the other components of
Consolidated Fixed Charges (other than Consolidated Interest Expense) shall be
calculated with respect to the portion of such period prior to the Closing Date
on a pro forma basis as if the Closing Date occurred on the first day of such
period.


 


(iii)       With
respect to any period commencing prior to the Closing Date, for purposes of
determining compliance with the financial covenants set forth in this Section 6.8,
Consolidated Interest Expense shall be calculated with respect to the portion
of such period prior to the Closing Date on a pro forma basis as if the Closing
Date occurred on the first day of such period (and assuming that the
Indebtedness incurred on the Closing Date was incurred on the first day of such
period and, such Indebtedness bears interest during the portion of such period
prior to the Closing Date at the weighted average of the interest rates
applicable to outstanding Indebtedness during the portion of such period on and
after the Closing Date and that no Indebtedness was repaid during the portion
of such period prior to the Closing Date).


 


6.9          Fundamental Changes; Asset
Dispositions; Acquisitions.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, enter into
any transaction of merger or consolidation, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease or
sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or


 


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any part of its business, assets or property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, whether now
owned or hereafter acquired, or acquire by purchase or otherwise the business,
or all or substantially all of the property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Person or any division or line
of business or other business unit of any Person, except:


 


(a)           any
Subsidiary of Holdings may be merged with or into Company or with or into any
wholly-owned Guarantor Subsidiary of Company, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Guarantor Subsidiary of Company; provided, in the case of such a merger,
Company or such wholly-owned Guarantor Subsidiary of Company, as applicable
shall be the continuing or surviving Person;;


 


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


 


(c)           Asset
Sales, the proceeds of which (valued at the principal amount thereof in the
case of non-Cash proceeds consisting of notes or other debt Securities and
valued at fair market value in the case of other non-Cash proceeds) (i) do
not exceed $5,000,000 in the aggregate in any calendar year and (ii) when
aggregated with the proceeds of all other Asset Sales, do not exceed
$15,000,000 in the aggregate from the Closing Date to the date of
determination; provided (1) the consideration received for such
assets shall be in an amount at least equal to the fair market value thereof
(and in respect of a transaction of greater than $2,500,000, as determined in
good faith by the board of directors of Company (or similar governing body)), (2) no
less than 80% thereof shall be paid in Cash, and (3) the Net Asset Sale
Proceeds thereof shall be applied in accordance with the Term Loan Facility (to
the extent required thereby);


 


(d)           Permitted
Acquisitions, the consideration for which constitutes either (i) common
Capital Stock of Holdings or (ii) (x) no more than $20,000,000 in the
aggregate in any calendar year unless (and subject to clause (y) below)
before and after giving effect to any such Permitted Acquisitions the Fixed
Charge Coverage Ratio is at least 1.0 to 1.0 for the four Fiscal Quarter period
most recently ended, calculated to give effect to such Permitted Acquisition in
accordance with Section 6.8(c) as if such Permitted Acquisition
occurred on the first day of such four Fiscal Quarter period, as demonstrated
in a Fixed Charge Coverage Compliance Certificate delivered to the
Administrative Agent prior to such Permitted Acquisition, and (y) no more
than $60,000,000 in the aggregate from the Closing Date;


 


(e)           Investments
made in accordance with Section 6.7; and


 


(f)            sale
and leaseback transactions permitted pursuant to Section 6.3.


 


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6.10        Disposal
of Subsidiary Interests.  Each
of Holdings and Company shall not, and shall not permit any of its Subsidiaries
to (a) directly or indirectly issue, sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
qualify directors if required by applicable law or (b) permit any of its
Subsidiaries directly or indirectly to issue, sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except (i) Company
may issue Capital Stock to Holdings, (ii) Subsidiaries may issue Capital
Stock to Company or to a Guarantor Subsidiary of Company (subject to the
restrictions on such disposition otherwise imposed under Section 6.9) or
to qualify directors if required by applicable law and (iii) Company or
any Subsidiary may sell or otherwise dispose of the Capital Stock of its
Subsidiaries in an Asset Sale permitted by Section 6.9.


 


6.11        Fiscal
Year.  Each of Holdings and Company
shall not, and shall not permit any of its Subsidiaries to, change its Fiscal
Year-end from December 31; provided, that the Fiscal Year-end of
Holdings and its Subsidiaries may be changed to the end of any Fiscal Quarter
with the prior written consent of, and following receipt of any information
requested by, Administrative Agent (including, without limitation,
reconciliation statements for the immediately preceding three years described
in Section 5.1(e)).


 


6.12        Transactions
with Shareholders and Affiliates.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service or the making of any
loan) with any holder of 10% or more of any class of Capital Stock of Holdings
or any of its Subsidiaries or with any Affiliate of Holdings or of any such
holder, on terms that are less favorable to Holdings or that Subsidiary, as the
case may be, than those that might be obtained at the time from a Person who is
not such a holder or Affiliate; provided, the foregoing restriction
shall not apply to (a) any transaction expressly permitted under this
Agreement; (b) reasonable and customary fees paid to, and customary
indemnification of, members of the board of directors (or similar governing
body) of Holdings and its Subsidiaries; (c) compensation arrangements for
officers and other employees of Holdings and its Subsidiaries entered into in
the ordinary course of business; (d) transactions described in Schedule
6.12; and (e) any transaction between Credit Parties.


 


6.13        Conduct
of Business.  From and
after the Closing Date, each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company on the Closing Date and similar or related
businesses and (ii) such other lines of business as may be consented to by
Requisite Lenders.


 


6.14        Permitted
Activities of Holdings. 
Holdings shall not (a) incur, directly or indirectly, any
Indebtedness other than the Indebtedness (i) under the Credit Documents, (ii) under
the the Term Loan Documents and (iii) permitted by Section 6.1(m); (b) create
or suffer to exist any Lien upon any property or assets now owned or hereafter
acquired by it other than the Liens created under the Collateral Documents to
which it is a party; (c) engage in any business or activity or own any
assets other than (i) holding 100% of the Capital Stock of Company; (ii) performing
its obligations and activities incidental thereto under the Credit Documents,
and


 


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to the extent not inconsistent therewith, the Term Loan Documents; (iii) making
Restricted Payments to the extent permitted by Section 6.5 of this
Agreement and Section 6.5 of the Term Loan Facility; (iv) making
Investments to the extent permitted by Section 6.7 of this Agreement and Section 6.7
of the Term Loan Facility; (v) issuances of its Capital Stock; (vi) conducting
activities arising by virtue of its status as a public company, including
without limitation, compliance with its reporting obligations and other
requirements applicable to public companies; and (vii) retaining Cash in a
deposit account subject to a Blocked Account Agreement in the amount of any
Restricted Payments received from the Company pursuant to Section 6.5(d)(i);
(d) consolidate with or merge with or into, or convey, transfer or lease
all or substantially all its assets to, any Person; (e) sell or otherwise
dispose of any Capital Stock of any of its Subsidiaries; (f) create or
acquire any Subsidiary or make or own any Investment in any Person other than
Company; or (g) fail to hold itself out to the public as a legal entity
separate and distinct from all other Persons.


 


6.15        Amendments
or Waivers of Certain Agreements.


 


(a)           Each
of Holdings and Company shall not, and shall not permit any of its Subsidiaries
to, terminate or agree to any amendment, restatement, supplement or other
modification to, or waiver of, any of its rights under any Term Loan Document,
any Organizational Document or the Management Services Agreement, or make any
payment consistent with an amendment thereof or change thereto (which amendment
or other modification, in the case of (i) an Organizational Document or
any Term Loan Document, is adverse in any material respect to the rights or
interests of the Lenders (provided that with respect to any termination,
amendment, restatement, supplement or other modification to, or waiver of any
Term Loan Document, none of the following amendments shall be deemed adverse
for purposes of this clause (i):  (A) payment
of customary fees in connection with any amendment or waiver, or (B) any
amendment implementing incremental or additional loans and/or commitments under
the Term Loan Documents to the extent the Indebtedness in respect thereof is
permitted under Section 6.1) and (ii) the Management Services
Agreement, involves the imposition of additional fees or any increase in fees
payable thereunder (other than as set forth in this Section 6.15) or is
adverse in any respect to the rights or interests of the Lenders), without in
each case obtaining the prior written consent of Requisite Lenders to such
amendment, restatement, supplement or other modification or waiver.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, amend or otherwise change the
terms of any Indebtedness permitted to be incurred under Section 6.1 which
is subordinated to the Obligations, or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or change
is to increase the interest rate on or fees in respect of such Indebtedness,
change (to earlier dates) any dates upon which payments of principal or
interest are due thereon, change any event of default or condition to an event
of default with respect thereto (other than to eliminate any such event of
default or increase any grace period related thereto), change the redemption,
prepayment or defeasance provisions thereof, change the subordination
provisions thereof (or of any guaranty thereof), or change any collateral
therefor (other than to release such collateral), or if the effect of such
amendment or change, together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such


 


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Indebtedness (or a trustee
or other representative on their behalf) which would be adverse to Holdings or
Company, any of their Subsidiaries, or Lenders. 
Notwithstanding the foregoing, this Section 6.15 shall not apply to
any amendment to the Management Services Agreement, or the termination thereof,
executed or made in connection with a Qualifying IPO; provided, that the
payments made in connection therewith shall not exceed the Qualifying IPO
Payment.


 


6.16        Limitation
on Payments Relating to Other Debt.  Each of Holdings and Company
shall not, and shall not permit any of its Subsidiaries through any manner or
means or through any other Person to, directly or indirectly, declare, order,
make or offer to make, any prepayment, repurchase or redemption of, or
otherwise defease, the Indebtedness permitted to be incurred under Section 6.1(k) (such
Indebtedness, “Other Debt”), or segregate
funds for any such prepayment, repurchase, redemption or defeasance, or enter
into any derivative or other transaction with any financial institution,
commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”) obligating Holdings, the
Company or any Subsidiary to make payments to such Derivatives Counterparty as
a result of any change in market value of Other Debt, other than (a) any
prepayment, repurchase or redemption of Other Debt pursuant to a Permitted
Refinancing thereof and (b) prepayments, repurchases or redemptions of
Other Debt in an aggregate amount not to exceed the Restricted Payment Amount
so long as (i) no Default or Event of Default has occurred or is
continuing or shall be caused thereby after giving effect to such payment and (ii) after
giving effect to such payment, the Company and its Subsidiaries shall have
satisfied the Investment Conditions. 
Notwithstanding anything to the contrary contained in this Agreement,
the Credit Parties are permitted to redeem the Senior Notes pursuant to the
Qualifying Senior Notes Redemption. 
Notwithstanding anything to the contrary contained in this Agreement,
Holdings is permitted to prepay, repurchase or redeem Other Debt utilizing
Holdings Equity Proceeds that have not been applied to any other purpose, if no
Default or Event of Default has occurred or is continuing or would result
therefrom; provided that any prepayment, repurchase or redemption or Other Debt
pursuant to this sentence may not subsequently be characterized as having been
made pursuant to any other provision of this Agreement.


 


SECTION 7.         GUARANTY


 


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


 


7.2          Contribution
by Guarantors.  All
Guarantors desire to allocate among themselves (collectively, the “Contributing Guarantors”), in a fair
and equitable manner, their obligations arising under this Guaranty.  Accordingly, in the event any payment or
distribution is made on any date by a Guarantor (a “Funding Guarantor”) under this Guaranty such
that its


 


111

















 


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


 


7.3          Payment
by Guarantors.  Subject to Section 7.2,
Guarantors hereby jointly and severally agree, in furtherance of the foregoing
and not in limitation of any other right which any Beneficiary may have at law
or in equity against any Guarantor by virtue hereof, that upon the failure of
Company to pay any of the Guaranteed Obligations when and as the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. § 362(a)), Guarantors will upon
demand pay, or cause to be paid, in Cash, to Administrative Agent for the
ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid
principal amount of all Guaranteed Obligations then due as aforesaid, accrued
and unpaid interest on such Guaranteed Obligations (including interest which,
but for Company’s becoming the subject of a case under the Bankruptcy Code,
would have accrued on such Guaranteed Obligations, whether or not a claim is
allowed against Company for such interest in the related bankruptcy case) and
all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.


 


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7.4          Liability
of Guarantors Absolute.  Each
Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guaranteed Obligations.  In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:


 


(a)           this
Guaranty is a guaranty of payment when due and not of collectability.  This Guaranty is a primary obligation of each
Guarantor and not merely a contract of surety;


 


(b)           Administrative
Agent may enforce this Guaranty upon the occurrence and during the continuance
of an Event of Default notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence and continuance of
such Event of Default;


 


(c)           the
obligations of each Guarantor hereunder are independent of the obligations of
Company and the obligations of any other guarantor (including any other
Guarantor) of the obligations of Company, and a separate action or actions may
be brought and prosecuted against such Guarantor whether or not any action is
brought against Company or any of such other guarantors and whether or not
Company is joined in any such action or actions;


 


(d)           payment
by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall
in no way limit, affect, modify or abridge any Guarantor’s liability for any
portion of the Guaranteed Obligations which has not been paid.  Without limiting the generality of the foregoing,
if Administrative Agent is awarded a judgment in any suit brought to enforce
any Guarantor’s covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor’s liability hereunder in
respect of the Guaranteed Obligations;


 


(e)           any
Beneficiary, upon such terms as it deems appropriate, without notice or demand
and without affecting the validity or enforceability hereof or giving rise to
any reduction, limitation, impairment, discharge or termination of any
Guarantor’s liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties
of the Guaranteed Obligations and take and hold security for the payment hereof
or the Guaranteed Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guaranteed
Obligations, any other guaranties of the Guaranteed Obligations, or any other
obligation of any Person (including any other Guarantor) with respect


 


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to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by
or for the benefit of such Beneficiary in respect hereof or the Guaranteed
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that such Beneficiary may have against any such security,
in each case as such Beneficiary in its discretion may determine consistent
herewith or the applicable Hedge Agreement or Banking Services Agreement and
any applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of any Guarantor against Company or any security for the
Guaranteed Obligations; and (vi) exercise any other rights available to it
under the Credit Documents, the Hedge Agreements or the Banking Services
Agreements; and


 


(f)            this
Guaranty and the obligations of Guarantors hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason (other than payment in full of the
Guaranteed Obligations), including the occurrence of any of the following,
whether or not any Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce an agreement or election
not to assert or enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement of, any claim or
demand or any right, power or remedy (whether arising under the Credit
Documents, the Hedge Agreements or Banking Services Agreements, at law, in equity
or otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guaranteed Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the
terms or provisions (including provisions relating to events of default)
hereof, any of the other Credit Documents, any of the Hedge Agreements, Banking
Services Agreements or any agreement or instrument executed pursuant thereto,
or of any other guaranty or security for the Guaranteed Obligations, in each
case whether or not in accordance with the terms hereof or such Credit
Document, such Hedge Agreement, such Banking Services Agreement or any
agreement relating to such other guaranty or security; (iii) the
Guaranteed Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the other Credit Documents or any of the Hedge Agreements or
Banking Services Agreements or from the proceeds of any security for the
Guaranteed Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guaranteed Obligations) to the
payment of indebtedness other than the Guaranteed Obligations, even though any
Beneficiary might have elected to apply such payment to any part or all of the
Guaranteed Obligations; (v) any Beneficiary’s consent to the change,
reorganization or termination of the corporate structure or existence of
Holdings or any of its Subsidiaries and to any corresponding restructuring of
the Guaranteed Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims
which Company may allege or assert against any Beneficiary in respect of the
Guaranteed Obligations, including failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do any
other act or thing, which may or might in any manner or to any extent vary the
risk of any Guarantor as an obligor in respect of the Guaranteed Obligations.


 


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7.5          Waivers
by Guarantors.  Each
Guarantor hereby waives, for the benefit of Beneficiaries: (a) any right
to require any Beneficiary, as a condition of payment or performance by such
Guarantor, to (i) proceed against Company, any other guarantor (including
any other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any such other guarantor or
any other Person, (iii) proceed against or have resort to any balance of
any deposit account or credit on the books of any Beneficiary in favor of
Company or any other Person, or (iv) pursue any other remedy in the power
of any Beneficiary whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of Company or
any other Guarantor including any defense based on or arising out of the lack
of validity or the unenforceability of the Guaranteed Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of Company or any other Guarantor from any cause other than payment
in full of the Guaranteed Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in other respects more burdensome than that of
the principal; (d) any defense based upon any Beneficiary’s errors or
omissions in the administration of the Guaranteed Obligations, except behavior
which amounts to bad faith; (e) (i) any principles or provisions of
law, statutory or otherwise, which are or might be in conflict with the terms
hereof and any legal or equitable discharge of such Guarantor’s obligations
hereunder, (ii) the benefit of any statute of limitations affecting such
Guarantor’s liability hereunder or the enforcement hereof, (iii) any
rights to set-offs, recoupments and counterclaims, and (iv) promptness,
diligence and any requirement that any Beneficiary protect, secure, perfect or
insure any security interest or lien or any property subject thereto; (f) notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance hereof, notices of
default hereunder, the Hedge Agreements or Banking Services Agreements or any
agreement or instrument related thereto, notices of any renewal, extension or
modification of the Guaranteed Obligations or any agreement related thereto,
notices of any extension of credit to Company and notices of any of the matters
referred to in Section 7.4 and any right to consent to any thereof; and (g) any
defenses or benefits that may be derived from or afforded by law which limit
the liability of or exonerate guarantors or sureties, or which may conflict
with the terms hereof.


 


7.6          Guarantors’
Rights of Subrogation, Contribution, etc.  Until the Guaranteed Obligations shall have
been indefeasibly paid in full and the Revolving Loan Commitments shall have
terminated and all Letters of Credit shall have expired or been cancelled, each
Guarantor hereby waives and agrees not to assert any claim, right or remedy,
direct or indirect, that such Guarantor now has or may hereafter have against
Company or any other Guarantor or any of its assets in connection with this
Guaranty or the performance by such Guarantor of its obligations hereunder, in
each case whether such claim, right or remedy arises in equity, under contract,
by statute, under common law or otherwise and including without limitation (a) any
right of subrogation, reimbursement or indemnification that such Guarantor now
has or may hereafter have against Company with respect to the Guaranteed
Obligations, (b) any right to enforce, or to participate in, any claim,
right or remedy that any Beneficiary now has or may hereafter have against
Company, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary.  In addition, until the Guaranteed Obligations
shall have been indefeasibly paid in full and the Revolving Loan Commitments
shall have terminated and all Letters of Credit shall have expired or been
cancelled, each Guarantor shall withhold


 


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exercise of any right of contribution such Guarantor may have against
any other guarantor (including any other Guarantor) of the Guaranteed
Obligations, including, without limitation, any such right of contribution as
contemplated by Section 7.2.  Each
Guarantor further agrees that, to the extent the waiver or agreement to
withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Company, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor.  If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for Administrative Agent on behalf of
Beneficiaries and shall forthwith be paid over to Administrative Agent for the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.


 


7.7          Subordination
of Other Obligations.  Any
Indebtedness of Company or any Guarantor now or hereafter held by any Guarantor
(the “Obligee Guarantor”) is hereby
subordinated in right of payment to the Guaranteed Obligations, and any such
indebtedness collected or received by the Obligee Guarantor after an Event of
Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid
over to Administrative Agent for the benefit of Beneficiaries to be credited
and applied against the Guaranteed Obligations but without affecting, impairing
or limiting in any manner the liability of the Obligee Guarantor under any
other provision hereof.


 


7.8          Continuing
Guaranty.  This
Guaranty is a continuing guaranty and shall remain in effect until all of the
Guaranteed Obligations shall have been paid in full and the Revolving Loan
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled.  Each Guarantor hereby
irrevocably waives any right to revoke this Guaranty as to future transactions
giving rise to any Guaranteed Obligations.


 


7.9          Authority
of Guarantors or Company.  It is
not necessary for any Beneficiary to inquire into the capacity or powers of any
Guarantor or Company or the officers, directors or any agents acting or
purporting to act on behalf of any of them.


 


7.10        Financial
Condition of Company.  Any
Credit Extension may be made to Company or continued from time to time, and any
Hedge Agreements or Banking Services Agreements may be entered into from time
to time, in each case without notice to or authorization from any Guarantor
regardless of the financial or other condition of Company at the time of any
such grant or continuation or at the time such Hedge Agreement or Banking
Services Agreement is entered into, as the case may be.  No Beneficiary shall have any obligation to
disclose or discuss with any Guarantor its assessment, or any Guarantor’s 


 


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assessment, of the financial condition of Company.  Each Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the
Credit Documents the Hedge Agreements and the Banking Services Agreements, and
each Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations. 
Each Guarantor hereby waives and relinquishes any duty on the part of
any Beneficiary to disclose any matter, fact or thing relating to the business,
operations or conditions of Company now known or hereafter known by any
Beneficiary.


 


7.11        Bankruptcy, etc.  So long as
any Guaranteed Obligations remain outstanding, no Guarantor shall, without the
prior written consent of Administrative Agent acting pursuant to the
instructions of Requisite Lenders, commence or join with any other Person in
commencing any bankruptcy, reorganization or insolvency case or proceeding of
or against Company or any other Guarantor. 
The obligations of Guarantors hereunder shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any case or proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Company or any other Guarantor or
by any defense which Company or any other Guarantor may have by reason of the
order, decree or decision of any court or administrative body resulting from
any such proceeding.


 


(b)           Each
Guarantor acknowledges and agrees that any interest on any portion of the
Guaranteed Obligations which accrues after the commencement of any case or
proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto
should be determined without regard to any rule of law or order which may
relieve Company of any portion of such Guaranteed Obligations.  Guarantors will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or
similar person to pay Administrative Agent, or allow the claim of
Administrative Agent in respect of, any such interest accruing after the date
on which such case or proceeding is commenced.


 


(c)           In
the event that all or any portion of the Guaranteed Obligations are paid by
Company, the obligations of Guarantors hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that all
or any part of such payment(s) are rescinded or recovered directly or
indirectly from any Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall
constitute Guaranteed Obligations for all purposes hereunder.


 


7.12        Discharge
of Guaranty Upon Sale of Guarantor.  If all of the Capital Stock of any Guarantor
(other than Holdings) or any of its successors in interest hereunder shall be
sold or


 


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otherwise
disposed of (including by merger or consolidation) in accordance with the terms
and conditions hereof, the Guaranty of such Guarantor or such successor in
interest, as the case may be, hereunder shall automatically be discharged and
released without any further action by any Beneficiary or any other Person
effective as of the time of such Asset Sale.


 


SECTION 8.        EVENTS OF
DEFAULT; LIQUIDITY EVENTS; CURE RIGHTS


 


8.1          Events of
Default.  If any one
or more of the following conditions or events shall occur:


 


(a)           Failure to Make
Payments When Due.  Failure by
Company to pay (i) when due any principal of any Loan, whether at stated
maturity, by acceleration, by notice of voluntary prepayment, by mandatory
prepayment or otherwise; (ii) when due any amount payable to Issuing Bank
in reimbursement of any drawing under a Letter of Credit; or (iii) any
interest on any Loan or any fee or any other amount due hereunder within five (5) days
after the date due; or


 


(b)           Default in
Other Agreements.  (i) Failure
of any Credit Party or any of their respective Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in Section 8.1(a))
in an individual principal amount of $5,000,000 or more or with an aggregate
principal amount of $10,000,000 or more, in each case beyond the grace period,
if any, provided therefor; or (ii) breach or default by any Credit Party
with respect to any other term of (1) one or more items of such
Indebtedness or (2) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness, or any other event or
circumstance shall occur, in each case beyond the grace period, if any,
provided therefor, if the effect of such breach or default or event or
circumstance is to cause, or to permit the holder or holders of that
Indebtedness (or a trustee on behalf of such holder or holders), to cause, that
Indebtedness to become or be declared due and payable (or redeemable) prior to
its stated maturity or the stated maturity of any underlying obligation, as the
case may be, or to require an offer to purchase or redeem such Indebtedness be
made (other than any due on sale provision with respect to any Indebtedness permitted
to be repaid hereunder and which is so repaid in full); or


 


(c)           Breach of
Certain Covenants.  Failure of
any Credit Party to perform or comply with any term or condition contained in
Sections 2.6, 2.14, 5.1(f), 5.1(g), 5.2(i), 5.14, 5.15 or 6 (and with respect
to Section 6.8(a) only, subject to the expiration of the cure period
provided in Section 8.3); or


 


(d)           Breach of
Representations, etc.  Any
representation, warranty or certification made or deemed made by any Credit
Party in any Credit Document or in any statement or certificate at any time
given by any Credit Party or any of its Subsidiaries in writing 


 


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pursuant
hereto or thereto or in connection herewith or therewith shall be false in any
material respect as of the date made or deemed made; or


 


(e)           Other Defaults
Under Credit Documents.  Any
Credit Party shall default in the performance of or compliance with any term
contained herein or any of the other Credit Documents, other than any such term
referred to in any other Section of this Section 8.1, and such
default shall not have been remedied or waived within thirty (30) days after
the earlier of (i) an officer of such Credit Party becoming aware of such
default or (ii) receipt by Company of notice from Administrative Agent or
any Lender of such default; or


 


(f)            Involuntary
Bankruptcy; Appointment of Receiver, etc..  (i) A court of competent jurisdiction
shall enter a decree or order for relief in respect of Holdings or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its Subsidiaries
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings or any of its Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Holdings or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Holdings or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for sixty (60) days without having been dismissed, bonded or
discharged; or


 


(g)           Voluntary
Bankruptcy; Appointment of Receiver, etc..  (i) Holdings or any of its Subsidiaries
shall have an order for relief entered with respect to it or shall commence a
voluntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Holdings
or any of its Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Holdings or any of its Subsidiaries shall be unable, or
shall fail generally, or shall admit in writing its inability, to pay its debts
as such debts become due; or the board of directors (or similar governing body)
of Holdings or any of its Subsidiaries (or any committee thereof) shall adopt
any resolution or otherwise authorize any action to approve any of the actions
referred to in this Section 8.1(g) or in Section 8.1(f) above;
or


 


(h)           Judgments and
Attachments.  Any money
judgment, writ or warrant of attachment or similar process involving (i) in
any individual case an amount in excess of $5,000,000 or (ii) in the
aggregate at any time an amount in excess of $10,000,000 (in either case 


 


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to
the extent not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Holdings or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of sixty (60) days (or in any event later than five (5) days prior
to the date of any proposed sale thereunder); or


 


(i)            Dissolution.  Any order, judgment or decree shall be
entered against any Credit Party decreeing the dissolution or split up of such
Credit Party; or


 


(j)            Employee
Benefit Plans.  (i) There
shall occur one or more ERISA Events or (ii) there shall exists any fact
or circumstance that results or reasonably could be expected to result in the
imposition of a Lien or security interest with respect to any Employee Benefit
Plan under Section 412(n) of the Internal Revenue Code or under
ERISA, in either case involving or that might reasonably be expected to involve
in any individual case an amount in excess of $5,000,000 or in the aggregate at
any time an amount in excess of $10,000,000; or


 


(k)           Change of
Control.  A Change of Control shall
occur; or


 


(l)            Guaranties,
Collateral Documents and other Credit Documents.  At any time after the execution and delivery
thereof, (i) the Guaranty for any reason, other than the satisfaction in
full of all Obligations or upon the release of such Guaranty with respect to a
Subsidiary of the Company in connection with an Asset Sale permitted hereby,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void or any Guarantor shall
repudiate its obligations thereunder, (ii) this Agreement or any
Collateral Document ceases to be in full force and effect (other than by reason
of a release of Collateral in accordance with the terms hereof or thereof or
the satisfaction in full of the Obligations in accordance with the terms
hereof) or shall be declared null and void, or Collateral Agent shall not have
or shall cease to have a valid and perfected Lien in any Collateral purported
to be covered by the Collateral Documents with the priority required by the
relevant Collateral Document, in each case for any reason other than the
failure of Collateral Agent or any Secured Party to take any action within its
control, or (iii) any Credit Party shall contest the validity or
enforceability of any Credit Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Credit Document to which it is a party;


 


THEN, (1) upon
the occurrence of any Event of Default described in Section 8.1(f) or
8.1(g), automatically, and (2) upon the occurrence of any other Event of
Default, upon notice to Company by Administrative Agent (which notice shall be
given by Administrative Agent upon the request of the Requisite Lenders), (A) the
Revolving Loan Commitments, if any, of each Lender having such Revolving Loan
Commitments and the obligation of Issuing Bank to issue any Letter of Credit
shall immediately terminate; (B) each of the following shall immediately 


 


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become due and payable, in
each case without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by each Credit Party: (I) the
unpaid principal amount of and accrued interest on the Loans, (II) an
amount equal to the maximum amount that may at any time be drawn under all
Letters of Credit then outstanding (regardless of whether any beneficiary under
any such Letter of Credit shall have presented, or shall be entitled at such
time to present, the drafts or other documents or certificates required to draw
under such Letters of Credit), and (III) all other Obligations; provided,
the foregoing shall not affect in any way the obligations of Lenders under Section 2.2(b)(iv) or
Section 2.3(e); (C) Administrative Agent may cause Collateral Agent
to enforce any and all Liens and security interests created pursuant to
Collateral Documents; and (D) Administrative Agent shall direct Company to
pay (and Company hereby agrees upon receipt of such notice, or upon the
occurrence of any Event of Default specified in Section 8.1(f) and (g) to
pay) to Administrative Agent such additional amounts of cash, to be held as
security for Company’s reimbursement Obligations in respect of Letters of
Credit then outstanding, equal to the Letter of Credit Usage at such time.


 


8.2          Liquidity
Event; Sponsor’s Right to Cure


 


Upon
the occurrence of a Liquidity Event, Holdings may, within ten (10) days
of  the date of such occurrence, deliver
a fully executed notice (a “Liquidity Event
Cure Notice”) to Administrative Agent and Collateral Agent of its
intention to issue Permitted Cure Securities for cash or otherwise receive cash
contributions to the capital of Holdings, and, in each case, to contribute any
such cash to the capital of the Borrowers (collectively, the “Liquidity Event Cure Right”).  Notwithstanding anything herein to the
contrary, a Liquidity Event Cure Notice may be delivered no more than two times
in any 12 month period.  The Liquidity
Event Cure Notice shall (i) state the date on which such cash is to be
contributed to the capital of the Borrowers (which date shall be no later than (A) the
10th day subsequent to the occurrence of such
Liquidity Event or (B) if such Liquidity Event occurred as direct result
of the establishment of a Reserve or credit limit (pursuant to Section 2.11(a)(xix)(B))
by Collateral Agent or Administrative Agent, as applicable, for which Borrower
Representative did not have at least 5 Business Days prior notice, the 15th day subsequent to the occurrence of such
Liquidity Event), (ii) state the amount of such cash to be contributed to
the capital of the Borrowers (the “Liquidity
Event Cure Amount”) and (iii) be irrevocable.  Upon receipt of the Liquidity Event Cure
Amount, Holdings shall contribute such amount to the capital of Borrowers
irrespective of the amount, if any, of Excess Availability at such time.  Upon receipt by Borrowers of such Liquidity
Event Cure Amount pursuant to the exercise by Holdings of such Liquidity Event
Cure Right, Excess Availability shall be recalculated and if, after giving
effect to the foregoing recalculations the Borrower shall have Excess
Availability of $6.0 million or more, then such Liquidity Event shall be deemed
not to have occurred (a “Liquidity Event Cure”)
and any Account Control Event that was triggered thereby shall cease to exist; provided,
however, that if after giving effect to the foregoing recalculations,
the Borrower shall not have Excess Availability of $6.0 million or more, then a
new Liquidity Event shall be deemed to have occurred.  If Holdings delivers a Liquidity Event Cure
Notice with respect to a Liquidity Event and fails to timely contribute the
Liquidity Event Cure Amount specified in such Liquidity Event Notice, then such
Liquidity Event shall not be cured and if Borrowers are not in compliance with 


 


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the Financial Performance Covenant,
then Holdings shall not be entitled to exercise any Financial Performance
Covenant Cure Right related to such failure (notwithstanding anything to the
contrary in Section 8.3).


 


8.3          Financial
Performance Covenant; Sponsors Right to Cure


 


Anything
to the contrary contained in Section 8.1 notwithstanding, in the event
that the Borrowers fail (or, but for the operation of this Section 8.3,
would fail) to comply with the requirements of the covenant set forth in Section 6.8(a) (the
“Financial Performance Covenant”),
Holdings may (subject to Section 8.2), on the date that the Fixed Charge
Coverage Compliance Certificate relating to such failure is delivered, deliver
a fully executed notice (a “Financial
Performance Covenant Cure Notice”) to Administrative Agent and
Collateral Agent of its intention to issue Permitted Cure Securities for cash
or otherwise receive cash contributions to the capital of Holdings, and, in
each case, to contribute any such cash to the capital of the Borrowers
(collectively, the “Financial Performance
Covenant Cure Right”). 
Notwithstanding anything herein to the contrary, a Financial Performance
Covenant Cure Notice may not be delivered if as a result more than six (6) Financial
Performance Covenant Cure Notices would be delivered in the twelve-month period
ending on the last day of the calendar month in which the Financial Performance
Covenant Cure Notice is delivered (the “Current
Twelve-Month Period”).  The
Financial Performance Covenant Cure Notice shall (i) state the date on which
such cash is to be contributed to the capital of the Borrowers (which date
shall be no later than the 10th day subsequent to the date the certificate
calculating the Fixed Charge Coverage Ratio is required to be delivered
pursuant to Section 5.1(l) (ii) state the amount of such cash to
be contributed to the capital of the Borrowers (the “Financial Performance Cure Covenant Amount”) and (iii) be
irrevocable.  Upon receipt of the
Financial Performance Covenant Cure Amount, Holdings shall contribute such amount
to the capital of Borrowers.  Upon
receipt by Borrowers of such Financial Performance Covenant Cure Amount
pursuant to the exercise by Holdings of such Financial Performance Covenant
Cure Right, Consolidated Adjusted EBITDA shall be recalculated and if, after
giving effect to the foregoing recalculations, the Borrowers would have been in
compliance with the requirements of the Financial Performance Covenant, then
the Borrowers shall be deemed to have satisfied the requirements of the
Financial Performance Covenant as of the relevant date of determination with
the same effect as though there had been no failure to comply therewith at such
date, and the applicable breach or default of the Financial Performance
Covenant that had occurred shall be deemed cured for the purposes of this
Agreement.  For purposes of this Section 8.3(a),
the amount of the Financial Performance Covenant Cure Amount that shall count
towards Consolidated Adjusted EBITDA shall be no greater than the amount
required for purposes of complying with the Financial Performance
Covenant.  For the avoidance of doubt,
if, on any relevant date during a Liquidity Event the Borrowers are not in
compliance with the Financial Performance Covenant and Holdings (i) fails
to deliver a Financial Performance Covenant Cure Notice on the date that the
Fixed Charge Coverage Compliance Certificate relating to such failure is
delivered or (ii) has delivered a Financial Performance Cure Notice six (6) times
in the Current Twelve-Month 


 


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Period, an Event of Default
shall immediately occur.  The foregoing
notwithstanding, if the event giving rise to the breach or default (or
potential breach or default) of the Financial Performance Covenant is the occurrence
of a Liquidity Event and a Liquidity Event Cure occurs with respect to such
Liquidity Event, such Liquidity Event Cure shall also cure the breach or
default (or potential breach or default) of the Financial Performance Cure with
no further action necessary by Holdings or Borrowers.


 


SECTION 9.        AGENTS


 


9.1          Appointment
of Agents.  Credit
Suisse is hereby appointed Administrative Agent hereunder and under the other
Credit Documents and each Lender hereby authorizes Administrative Agent to act
as its agent in such capacity in accordance with the terms hereof and the other
Credit Documents.  JPMorgan Chase Bank,
N.A. is hereby appointed Collateral Agent hereunder and under the other Credit
Documents and each Lender hereby authorizes Collateral Agent to act as its
agent in such capacity in accordance with the terms hereof and the other Credit
Documents.  JPMorgan Chase Bank, N.A. is
hereby appointed Syndication Agent hereunder, and each Lender hereby authorizes
Syndication Agent to act as its agent in accordance with the terms hereof and
the other Credit Documents.  Wachovia
Capital Finance Corporation (Central) is hereby appointed Documentation Agent
hereunder, and each Lender hereby authorizes Documentation Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents.  Each Agent hereby agrees to act upon the
express conditions contained herein and the other Credit Documents, as
applicable.  The provisions of this Section 9
are solely for the benefit of Agents and Lenders and no Credit Party shall have
any rights as a third party beneficiary of any of the provisions thereof.  In performing its functions and duties
hereunder, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Holdings or any of its
Subsidiaries.


 


9.2          Powers and
Duties.  Each Lender irrevocably
authorizes each Agent to take such action on such Lender’s behalf and to
exercise such powers, rights and remedies hereunder and under the other Credit
Documents as are specifically delegated or granted to such Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto.  Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents.  Each Lender irrevocably authorizes each of
the Administrative Agent and the Collateral Agent to execute and deliver the
Intercreditor Agreement and agrees to be bound by the provisions therein.  Each Agent may perform any and all of their
duties and exercise their rights and powers by or through any one or more
sub-agents appointed by such Agent.  Each
Agent and any such sub-agent may perform any and all its duties and exercise
its rights and powers through their respective Affiliates, and the respective
directors, officers, employees, agents and advisors of such Agent and such
Agent’s Affiliates.  The exculpatory
provisions of the Credit Documents shall apply to any such sub-agent and to the
Affiliates, directors, officers, employees, agents and advisors of such 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.  No Agent
shall have, by 


 


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reason
hereof or any of the other Credit Documents, a fiduciary relationship in
respect of any Lender; and nothing herein or any of the other Credit Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
any Agent any obligations in respect hereof or any of the other Credit
Documents except as expressly set forth herein or therein.


 


9.3          General Immunity.


 


(a)           No
Responsibility for Certain Matters.  No Agent shall be responsible to any Lender
for the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency hereof or any other Credit Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made
by any Agent to Lenders or by or on behalf of any Credit Party to any Agent or
any Lender in connection with the Credit Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any
Credit Party or any other Person liable for the payment of any Obligations, nor
shall any Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Credit Documents or as to the use of the proceeds of
the Loans or as to the existence or possible existence of any Event of Default
or Default or to make any disclosures with respect to the foregoing.  No Agent shall be deemed to have knowledge of
any Default or Event of Default unless and until written notice thereof is
given to such Agent by the Borrower Representative or a Lender.  Anything contained herein to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.


 


(b)           Exculpatory
Provisions.  No Agent
nor any of its officers, partners, directors, employees or agents shall be
liable to Lenders for any action taken or omitted by any Agent under or in connection
with any of the Credit Documents except to the extent caused by such Agent’s
gross negligence or willful misconduct as determined by a final non-appealable
judgment of a court of competent jurisdiction. 
Each Agent shall be entitled to refrain from any act or the taking of
any action (including the failure to take an action) in connection herewith or
any of the other Credit Documents or from the exercise of any power, discretion
or authority vested in it hereunder or thereunder unless and until such Agent
shall have received instructions in respect thereof from Requisite Lenders (or
such other Lenders as may be required to give such instructions under Section 10.5)
and, upon receipt of such instructions from Requisite Lenders (or such other
Lenders, as the case may be), such Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions.  Without prejudice to the generality of the
foregoing, (i) each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document believed
by it to be genuine and correct and to have been signed or sent by the proper
Person or Persons, and shall be entitled to rely and shall be protected in
relying on opinions and judgments of attorneys (who may be attorneys for
Holdings and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have 


 


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any
right of action whatsoever against any Agent as a result of such Agent acting
or (where so instructed) refraining from acting hereunder or any of the other
Credit Documents in accordance with the instructions of Requisite Lenders (or
such other Lenders as may be required to give such instructions under Section 10.5).  Each Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon.


 


9.4          Agents
Entitled to Act as Lender.  The agency hereby created shall in no way
impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.  With respect to its participation in the
Loans and the Letters of Credit, each Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as if it were
not performing the duties and functions delegated to it hereunder, and the term
“Lender” shall, unless the context clearly otherwise indicates, include each
Agent in its individual capacity.  Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with Holdings or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection herewith and otherwise
without having to account for the same to Lenders.


 


9.5          Lenders’
Representations, Warranties and Acknowledgment.


 


(a)           Each Lender
represents and warrants that it has made its own independent investigation of
the financial condition and affairs of Holdings and its Subsidiaries in
connection with Credit Extensions hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of Holdings and its
Subsidiaries.  No Agent shall have any
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter, and no Agent shall have any responsibility with respect to
the accuracy of or the completeness of any information provided to Lenders.


 


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


 


9.6          Right to
Indemnity.  Each Lender,
in proportion to its Pro Rata Share, severally agrees to indemnify each Agent,
to the extent that such Agent shall not have been reimbursed by any Credit
Party, for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against such Agent in exercising its
powers, rights and remedies or performing its duties 


 


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hereunder
or under the other Credit Documents or otherwise in its capacity as such Agent
in any way relating to or arising out of this Agreement or the other Credit
Documents; provided, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent’s gross
negligence or willful misconduct as determined by a final non-appealable
judgment of a court of competent jurisdiction. 
If any indemnity furnished to any Agent for any purpose shall, in the
opinion of such Agent, be insufficient or become impaired, such Agent may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished; provided, in no
event shall this sentence require any Lender to indemnify any Agent against any
liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement in excess of such Lender’s Pro Rata Share thereof; and provided
further, this sentence shall not be deemed to require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement described in the proviso
in the immediately preceding sentence.


 


9.7          Successor
Administrative Agent and Swing Line Lender.  Administrative Agent may resign at any time
by giving thirty (30) days’ prior written notice thereof to Lenders and
Borrower Representative.  Upon any such
notice of resignation, Requisite Lenders shall have the right, upon five (5) Business
Days’ notice to Borrower Representative, to appoint a successor Administrative
Agent.  If no successor shall have been
so appointed by the Requisite Lenders and shall have accepted such appointment
within thirty (30) days after the resigning Administrative Agent gives notice
of its resignation, then the resigning Administrative Agent may, on behalf of
Agents, Lenders and Issuing Banks, appoint a successor Administrative
Agent.  Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent and the retiring Administrative Agent shall
promptly (i) transfer to such successor Administrative Agent all sums,
Securities and other items of Collateral held under the Collateral Documents,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent under the Credit Documents, and (ii) execute and deliver to such
successor Administrative Agent such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with
the assignment to such successor Administrative Agent of the security interests
created under the Collateral Documents, whereupon such retiring Administrative
Agent shall be discharged from its duties and obligations hereunder.  After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent hereunder. 
Any resignation of Administrative Agent pursuant to this Section shall
also constitute the resignation of Credit Suisse or its successor as Swing Line
Lender and Issuing Bank, and any successor Administrative Agent appointed
pursuant to this Section shall, upon its acceptance of such appointment,
become the successor Swing Line Lender and Issuing Bank for all purposes
hereunder.  In such event (a) Borrower
Representative shall prepay any outstanding Swing Line Loans made by the
retiring Administrative Agent in its capacity as Swing Line Lender, (b) upon
such prepayment, the retiring Administrative Agent and Swing Line Lender shall
surrender any Swing Line Note held by it to Borrower Representative for
cancellation, and (c) Borrower Representative shall issue, if so requested
by successor 


 


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Administrative
Agent and Swing Line Loan Lender, a new Swing Line Note to the successor
Administrative Agent and Swing Line Lender, in the principal amount of the
Swing Line Loan Sublimit then in effect and with other appropriate insertions.


 


9.8          Collateral
Documents and Guaranty.


 


(a)           Agents under
Collateral Documents and Guaranty.  Each Lender hereby further authorizes
Administrative Agent or Collateral Agent, as applicable, on behalf of and for
the benefit of Lenders, to be the agent for and representative of Lenders with
respect to the Guaranty, the Collateral and the Collateral Documents.  Subject to Section 10.5, without further
written consent or authorization from Lenders, Administrative Agent or
Collateral Agent, as applicable may execute any documents or instruments
necessary to (i) release any Lien encumbering any item of Collateral that
is the subject of a sale or other disposition of assets permitted hereby or to
which Requisite Lenders (or such other Lenders as may be required to give such
consent under Section 10.5) have otherwise consented or (ii) release
any Guarantor from the Guaranty pursuant to Section 7.12 or with respect
to which Requisite Lenders (or such other Lenders as may be required to give
such consent under Section 10.5) have otherwise consented.


 


(b)           Right to
Realize on Collateral and Enforce Guaranty.  Anything contained in any of the Credit
Documents to the contrary notwithstanding, Company, Administrative Agent,
Collateral Agent and each Lender hereby agree that (i) no Lender shall
have any right individually to realize upon any of the Collateral or to enforce
the Guaranty, it being understood and agreed that all powers, rights and
remedies hereunder may be exercised solely by Administrative Agent, on behalf
of Lenders in accordance with the terms hereof and all powers, rights and
remedies under the Collateral Documents may be exercised solely by Collateral
Agent, and (ii) in the event of a foreclosure by Collateral Agent on any
of the Collateral pursuant to a public or private sale, Collateral Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Collateral Agent, as agent for and representative of Secured Parties (but
not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Collateral Agent at such sale.


 


9.9          Overadvances


 


.  Notwithstanding anything to the contrary in
this Agreement, the Administrative Agent, Issuing Bank and Swingline Lender, as
applicable, may make, on behalf of the Lenders, Revolving Loans, or issue
Letters of Credit to the Borrowers, in each case, notwithstanding its knowledge
that such Revolving Loans, Swingline Loans, or Letters of Credit would either
(i) cause the aggregate amount of the Revolving Exposure to exceed the
Borrowing Base or (ii) be made or issued when one or more of the other
conditions precedent to the making of Loans hereunder cannot be satisfied (each
an “Overadvance” and collectively,
the “Overadvances”), if the
Administrative Agent deems it necessary or advisable in its discretion to do
so, provided,


 


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that: the total principal
amount of the Overadvances shall not exceed an amount equal to $3.0 million
outstanding at any time and shall not cause the Revolving Exposure to exceed
the Revolving Loan Commitments of all of the Lenders or the Revolving Exposure
of a Lender to exceed such Lender’s Revolving Loan Commitment.  Borrowers agree that all Overadvances will be
repayable on demand by the Administrative Agent, and will in any event be
repaid within sixty (60) days. 
Overadvances shall accrue interest at the rate provided for in Section 2.7(d).  Each Lender shall be obligated to pay
Administrative Agent the amount of its Pro Rata Share of any such Overadvance provided,
that such Administrative Agent is acting in accordance with the terms of this Section 9.9.]


 


SECTION 10.       MISCELLANEOUS


 


10.1        Notices.  Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given to a Credit Party, Collateral Agent, Administrative Agent, Swing Line
Lender, Issuing Bank, Syndication Agent or Documentation Agent, shall be sent
to such Person’s address as set forth on Appendix B or in the other relevant
Credit Document, and in the case of any Lender, the address as indicated on
Appendix B or otherwise indicated to Administrative Agent in writing.  Each notice hereunder shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States
certified or registered mail or courier service and shall be deemed to have
been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or telex, or three (3) Business
Days after depositing it in the United States mail with postage prepaid and
properly addressed; provided, no notice to any Agent shall be effective
until received by such Agent.  As agreed
to among Holdings, the Borrower, the Administrative Agent and the applicable
Lenders from time to time, notices and other communications may also be delivered
by e-mail to the e-mail address of a representative of the applicable Person
provided from time to time by such Person.


 


The
Borrower hereby agrees, unless directed otherwise by the Administrative Agent
or unless the electronic mail address referred to below has not been provided
by the Administrative Agent to the Borrower, that it will, or will cause its
Subsidiaries to, provide to the Administrative Agent all information, documents
and other materials that it is obligated to furnish to the Administrative Agent
pursuant to the Credit Documents or to the Lenders under Article 5,
including all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to the payment of any principal or other
amount due under this Agreement prior to the scheduled date thereof, (ii) provides
notice of any Default or Event of Default under this Agreement or any other
Credit Document or (iii) is or relates to a Funding Notice, a
Conversion/Continuation Notice, an Issuance Notice or a notice requesting the
issuance, amendment, extension or renewal of a Letter of Credit pursuant to Section 2.3,
or is required to be delivered to satisfy any condition precedent to the
effectiveness of this Agreement and/or any other extension of credit hereunder
(all such non-excluded communications being referred to herein collectively as
“Communications”),
by transmitting the Communications in an electronic/soft medium that is
properly identified in a format acceptable to the Administrative Agent to an
electronic mail address as directed by the Administrative Agent.  In addition, the Borrower agrees, and agrees
to cause its Subsidiaries, to 


 


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continue to provide the Communications
to the Administrative Agent or the Lenders, as the case may be, in the manner
specified in the Credit Documents but only to the extent requested by the
Administrative Agent.


 


The
Borrower hereby acknowledges that (a) the Administrative Agent will make
available to the Lenders and the Issuing Bank materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, the “Borrower Materials”)
by posting the Borrower Materials on Intralinks or another similar electronic system
(the “Platform”)
and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to the
Borrower or its securities) (each, a “Public Lender”). The Borrower hereby agrees
that (w) all Borrower Materials that are to be made available to Public
Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed
to have authorized the Administrative Agent and the Lenders to treat such
Borrower Materials as not containing any material non-public information with
respect to the Borrower or its securities for purposes of United States federal
and state securities laws (provided, however, that to the extent such Borrower
Materials constitute confidential information, they shall be treated as set
forth in Section 10.17); (y) all Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated
as “Public Investor;” and (z) the Administrative Agent shall be entitled
to treat any Borrower Materials that are not marked “PUBLIC” as being suitable
only for posting on a portion of the Platform not marked as “Public Investor.”
Notwithstanding the foregoing, the following Borrower Materials shall be marked
“PUBLIC”, unless the Borrower notifies the Administrative Agent promptly that
any such document contains material non-public information: (1) the Credit
Documents and (2) notification of changes in the terms of the Credit
Documents.


 


Each
Public Lender agrees to cause at least one individual at or on behalf of such
Public Lender to at all times have selected the “Private Side Information” or
similar designation on the content declaration screen of the Platform in order
to enable such Public Lender or its delegate, in accordance with such Public
Lender’s compliance procedures and applicable law, including United States Federal
and state securities laws, to make reference to Communications that are not
made available through the “Public Side Information” portion of the Platform
and that may contain material non-public information with respect to the
Borrower or its securities for purposes of United States Federal or state
securities laws.


 


THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”.  NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF
ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS
OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR
ERRORS OR OMISSIONS IN THE COMMUNICATIONS. 
NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY
THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM.  IN NO
EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES HAVE 


 


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ANY LIABILITY TO ANY CREDIT
PARTY, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT
BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF ANY CREDIT PARTY’S OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE
LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH PERSON’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.


 


The
Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth above shall constitute
effective delivery of the Communications to the Administrative Agent for
purposes of the Credit Documents.  Each
Lender agrees that receipt of notice to it (as provided in the next sentence)
specifying that the Communications have been posted to the Platform shall
constitute effective delivery of the Communications to such Lender for purposes
of the Credit Documents.  Each Lender
agrees to notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s e-mail address to which the
foregoing notice may be sent by electronic transmission and that the foregoing
notice may be sent to such e-mail address.


 


10.2        Expenses.  Whether or not the transactions contemplated
hereby shall be consummated, Borrower Representative agrees to pay promptly (a) all
the actual costs and expenses incurred by Arranger and Administrative Agent and
Collateral Agent in connection with the preparation of the Credit Documents and
any consents, amendments, waivers or other modifications thereto; (b) all
the costs of furnishing all opinions by counsel for Borrower Representative and
the other Credit Parties; (c) the reasonable fees, expenses and
disbursements of counsel to Arranger and Administrative Agent and Collateral
Agent in connection with the negotiation, preparation, execution and
administration of the Credit Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by Borrower
Representative; (d) all the actual costs and expenses of creating and
perfecting Liens in favor of Collateral Agent, for the benefit of Lenders and
Issuing Bank pursuant hereto, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums and
reasonable fees, expenses and disbursements of counsel to each Agent and
Arranger and of counsel providing any opinions that Arranger, any Agent or
Requisite Lenders may request in respect of the Collateral or the Liens created
pursuant to the Collateral Documents; (e) all the actual and reasonable
out-of-pocket costs and fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers retained by Administrative Agent or
Collateral Agent in connection with the Credit Documents and identified to
Borrower Representative prior to their retention; (f) all the actual costs
and expenses (including the fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Collateral Agent and
its counsel) in connection with the custody or preservation of any of the
Collateral; (g) all other actual and reasonable out-of-pocket costs and
expenses incurred by Arranger and each Agent in connection with the syndication
of the Loans and Commitments and the negotiation, preparation and execution of
the Credit Documents and any consents, amendments, waivers or other
modifications thereto and the transactions 


 


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contemplated
thereby; and (h) after the occurrence of a Default or an Event of Default,
all costs and expenses, including reasonable attorneys’ fees (including
allocated costs of internal counsel) and costs of settlement, incurred by
Arranger, each and any Agent or each and any Lender and Issuing Bank in
enforcing any Obligations of or in collecting any payments due from any Credit
Party hereunder or under the other Credit Documents by reason of such Default
or Event of Default (including in connection with the sale of, collection from,
or other realization upon any of the Collateral or the enforcement of the
Guaranty) or in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a “work-out” or pursuant to
any insolvency or bankruptcy cases or proceedings.


 


10.3        Indemnity.


 


(a)           In addition to
the payment of expenses pursuant to Section 10.2, whether or not the
transactions contemplated hereby shall be consummated, each Credit Party agrees
to defend (subject to Indemnitees’ selection of counsel), indemnify, pay and
hold harmless, Arranger, each Agent, each Lender and Issuing Bank and the
officers, partners, directors, trustees, employees, agents (including advisors)
and Affiliates of Arranger, each Agent, each Lender and Issuing Bank (each, an
“Indemnitee”), from and against
any and all Indemnified Liabilities; provided, no Credit Party shall
have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee as determined by a final
non-appealable judgment of a court of competent jurisdiction.  As used herein, “Indemnified Liabilities”  means,
collectively, any and all liabilities, obligations, losses, damages (including
natural resource damages), penalties, actions, judgments, suits, claims
(including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up
or abate any Hazardous Materials Activity), expenses and disbursements of any
kind or nature whatsoever (including the reasonable fees and disbursements of
counsel for Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto,
and any fees or expenses incurred by Indemnitees in enforcing this indemnity),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may
be imposed on, incurred by, or asserted against any such Indemnitee, in any
manner relating to or arising out of this Agreement or the other Credit
Documents the Related Agreements or the transactions contemplated hereby or
thereby (including the Lenders’ agreement to make Credit Extensions or the use
or intended use of the proceeds thereof, or any enforcement of any of the
Credit Documents (including any sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Guaranty)).


 


(b)           To the extent
that the undertakings to defend, indemnify, pay and hold harmless set forth in
this Section 10.3 may be unenforceable in whole or in part because they
are violative of any law or public policy, the applicable Credit Party shall
contribute the maximum 


 


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portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.


 


(c)           To the extent
permitted by applicable law, each of Holdings and Company, and its
Subsidiaries, shall not assert, and each of Holdings and Company, and its
Subsidiaries, hereby waives, any claim against Lenders, Issuing Bank, Agents
and Arranger, and their respective Affiliates, directors, employees, attorneys
or agents, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or referred to herein, the
transactions contemplated hereby, any Loan or the use of the proceeds thereof
or any act or omission or event occurring in connection therewith, and each of
Holdings and Company, and its Subsidiaries, hereby waives, releases and agrees
not to sue upon any such claim or any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.


 


10.4        Set-Off.  In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default each
Agent, each Lender and each of their respective Affiliates is hereby authorized
by each Credit Party at any time or from time to time, without notice to any
Credit Party or to any other Person (other than Administrative Agent), any such
notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by such Agent, Lender or Affiliate to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Agent, Lender or Affiliate hereunder, the Letters of
Credit and participations therein and under the other Credit Documents,
including all claims of any nature or description arising out of or connected
hereto, the Letters of Credit and participations therein or with any other
Credit Document, irrespective of whether or not (a) such Lender shall have
made any demand hereunder or (b) the principal of or the interest on the
Loans or any amounts in respect of the Letters of Credit or any other amounts
due hereunder shall have become due and payable pursuant to Section 2 and
although such obligations and liabilities, or any of them, may be contingent or
unmatured.


 


10.5        Amendments
and Waivers.


 


(a)           Requisite
Lenders’ Consent.  Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party
therefrom, shall in any event be effective without the written concurrence of
the Requisite Lenders.


 


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(b)           Affected
Lenders’ Consent.  Without the
written consent of each Lender (other than a Defaulting Lender) that would be
affected thereby, no amendment, modification, termination, or consent shall be
effective if the effect thereof would:


 


(i)                       extend the scheduled final
maturity of any Loan or Note;


 


(ii)                    waive, reduce or postpone
any scheduled repayment (but not prepayment);


 


(iii)                 extend the stated expiration date of any
Letter of Credit beyond the Revolving Loan Commitment Termination Date;


 


(iv)                reduce the rate of interest on any Loan
(other than any waiver of any increase in the interest rate applicable to any
Loan pursuant to Section 2.10) or any fee payable hereunder;


 


(v)                   extend the time for payment of any such
interest or fees;


 


(vi)                reduce or forgive the principal amount of any
Loan or any reimbursement obligation in respect of any Letter of Credit;


 


(vii)             amend, modify, terminate or waive any provision of
this Section 10.5(b), Section 10.5(c) or Section 2.16
hereof, or Section 7.2 of the Pledge and Security Agreement;


 


(viii)          amend the definition of “Requisite Lenders”  or  “Pro
Rata Share”;


 


(ix)                  release all or substantially all of the
Collateral or all or substantially all of the Guarantors from the Guaranty
except as expressly provided in the Credit Documents; or


 


(x)                     consent to the assignment or
transfer by any Credit Party of any of its rights and obligations under any
Credit Document.


 


(c)           Other Consents.  No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall:


 


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(i)                       increase any Revolving Loan
Commitment of any Lender over the amount thereof then in effect without the
consent of such Lender; provided, no amendment, modification or waiver
of any condition precedent, covenant, Default or Event of Default shall
constitute an increase in any Revolving Loan Commitment of any Lender;


 


(ii)                    amend, modify, terminate or
waive any provision hereof relating to the Swing Line Sublimit or the Swing
Line Loans without the consent of Swing Line Lender;


 


(iii)                 amend, modify, terminate or waive any
obligation of Lenders with Revolving Loan Commitments relating to the purchase
of participations in Letters of Credit as provided in Section 2.4(e) without
the written consent of Administrative Agent and of Issuing Bank;


 


(iv)                amend the definition of “Borrowing Base” or
any definition used therein, or Section 2.11 hereof, without the written
concurrence of Lenders having or holding Revolving Exposure and representing
more than 66-2/3rds percent of the sum of the aggregate Revolving Exposure of
all Lenders; provided, that, the foregoing shall not (A) limit the
discretion of the Administrative Agent or Collateral Agent to change, establish
or eliminate any Reserves without the consent of any Lenders or (B) affect
any other matter that this Agreement leaves to the discretion of the
Administrative Agent and/or the Collateral Agent; or


 


(v)                   amend, modify, terminate or waive any
provision of Section 9 as the same applies to any Agent, or any other
provision hereof as the same applies to the rights or obligations of any Agent,
in each case without the consent of such Agent.


 


(d)           Execution of
Amendments, etc. 
Administrative Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of such Lender. 
Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given.  No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or
demand in similar or other circumstances. 
Any amendment, modification, termination, waiver or consent effected in
accordance with this Section 10.5 shall be binding upon each Lender at the
time outstanding, each future Lender and, if signed by a Credit Party, on such
Credit Party.


 


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10.6        Successors
and Assigns; Participations.


 


(a)           Generally.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of
Lenders.  No Credit Party’s rights or
obligations hereunder nor any interest therein may be assigned or delegated by
any Credit Party without the prior written consent of all Lenders.  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, Affiliates of each of the Agents and
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.


 


(b)           Register.  Borrower Representative, Administrative Agent
and Lenders shall deem and treat the Persons listed as Lenders in the Register
as the holders and owners of the corresponding Commitments and Loans listed
therein for all purposes hereof, and no assignment or transfer of any such
Commitment or Loan shall be effective, in each case, unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall have
been delivered to and accepted by Administrative Agent and recorded in the
Register as provided in Section 10.6(f). 
Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or consent,
is listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments or
Loans.


 


(c)           Right to Assign.  Each Lender shall have the right at any time
to sell, assign or transfer all or a portion of its rights and obligations
under this Agreement, including, without limitation, all or a portion of its
Commitment or Loans owing to it or other Obligation (provided, however,
that each such assignment shall be of a uniform, and not varying, percentage of
all rights and obligations under and in respect of any Loan and any related
Commitments):


 


(i)                       to any Person meeting the
criteria of clause (i) of the definition of the term of “Eligible
Assignee” (a “Related Lender Assignment”)
upon the giving of notice to Borrower Representative and Administrative Agent
and, for any assignment of a Revolving Loan Commitment, the consent of
Administrative Agent and Issuing Bank (such consent not to be unreasonably
withheld or delayed); and


 


(ii)                    to any Person meeting the
criteria of clause (ii) of the definition of the term of “Eligible
Assignee” (other than a Person described in the foregoing subclause (i)) and
(except in the case of assignments made by or to JPMorgan Chase or Credit
Suisse) consented to by each of Borrower Representative and Administrative
Agent and, 


 


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for any assignment of Revolving Loan Commitment, Issuing Bank (each
such (x) consent not to be unreasonably withheld or delayed or, (y) in
the case of Borrower Representative, shall be deemed to have been provided to
any such assignment unless the Borrower Representative shall have objected
thereto by written notice to the Administrative Agent within fifteen (15) days
after having received notice of such assignment, or (z) in the case of
Borrower Representative, not to be required at any time during syndication of
the Loans to persons identified by the Administrative Agent to the Borrower
Representative on or prior to the Closing Date or at any time an Event of
Default under Sections 8.1(a), 8.1(f) or 8.1(g) shall have occurred
and then be continuing; provided, further each such assignment pursuant
to this Section 10.6(c)(ii) shall be in an aggregate amount of not
less than $1,000,000 (or such lesser amount as may be agreed to by Borrower
Representative and Administrative Agent or as shall constitute the aggregate
amount of the Revolving Loan Commitments and Revolving Loans of the assigning
Lender) with respect to the assignment of the Revolving Loan Commitments and
Revolving Loans.


 


(d)           Mechanics.  The assigning Lender and the assignee thereof
shall execute and deliver to Administrative Agent (i) an Assignment
Agreement (A) via an electronic settlement system acceptable to
Administrative Agent (which initially shall be ClearPar, LLC), or (B) manually
together with a processing and recordation fee of $3,500, and (ii) such
forms, certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such Assignment
Agreement may be required to deliver to Administrative Agent pursuant to Section 2.19(c);
provided, however, that should a Lender or assignee party to a
Related Lender Assignment deliver an Assignment Agreement to the Administrative
Agent for recording, such Lender or assignee shall provide the relevant
administration details and applicable tax forms with such Assignment Agreement.


 


(e)           RESERVED.


 


(f)            Notice of
Assignment.  Upon its
receipt of a duly executed and completed Assignment Agreement, together with
the processing and recordation fee referred to in Section 10.6(d) (and
any forms, certificates or other evidence required by this Agreement in
connection therewith), Administrative Agent shall record the information contained
in such Assignment Agreement in the Register and shall maintain a copy of such
Assignment Agreement.


 


(g)           Representations
and Warranties of Assignee.  Each Lender, upon execution and delivery
hereof or upon executing and delivering an Assignment Agreement, as the case
may be, represents and warrants as of the Closing Date or as of the applicable
Effective Date (as defined in the applicable Assignment Agreement) that (i) it
is an Eligible Assignee; (ii) it has experience and expertise in the
making of or investing in commitments or loans such as the 


 


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applicable
Commitments or Loans, as the case may be; and (iii) it will make or invest
in, as the case may be, its Commitments or Loans for its own account in the
ordinary course of its business and without a view to distribution of such
Commitments or Loans within the meaning of the Securities Act or the Exchange
Act or other federal securities laws (it being understood that, subject to the
provisions of this Section 10.6, the disposition of such Commitments or
Loans or any interests therein shall at all times remain within its exclusive
control).


 


(h)           Effect of
Assignment.  Subject to
the terms and conditions of this Section 10.6, as of the “Effective Date”
specified in the applicable Assignment Agreement: (i) the assignee
thereunder shall have the rights and obligations of a “Lender” hereunder to the
extent such rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement and shall thereafter be a party hereto and a
“Lender” for all purposes hereof; (ii) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned
thereby pursuant to such Assignment Agreement, relinquish its rights (other
than any rights which survive the termination hereof under Section 10.8)
and be released from its obligations hereunder (and, in the case of an
Assignment Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations hereunder, such Lender shall cease to be a
party hereto; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, (y) Issuing Bank shall continue
to have all rights and obligations thereof with respect to such Letters of
Credit until the cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder and (z) such assigning
Lender shall continue to be entitled to the benefit of all indemnities
hereunder as specified herein with respect to matters arising out of the prior
involvement of such assigning Lender as a Lender hereunder); (iii) the
Commitments shall be modified to reflect the Commitment of such assignee and
any Revolving Loan Commitment of such assigning Lender, if any; and (iv) if
any such assignment occurs after the issuance of any Note hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Notes to
Administrative Agent for cancellation or deliver a lost note affidavit, and
thereupon Borrowers shall issue and deliver new Notes, if so requested by the
assignee and/or assigning Lender, to such assignee and/or to such assigning
Lender, with appropriate insertions, to reflect the new Revolving Loan
Commitments and/or outstanding Loans of the assignee and/or the assigning
Lender.


 


(i)            Participations.  Each Lender shall have the right at any time
to sell one or more participations to any Person (other than to a natural person,
Holdings, any of its Subsidiaries or any of its Affiliates) in all or any part
of its Commitments, Loans or in any other Obligation.  The holder of any such participation shall
not be entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or waiver that would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Loan Commitment
Termination Date) in which such participant is participating, or reduce the
rate or extend the time of payment of interest or fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant’s participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the


 


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Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any
participant if the participant’s participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by any Credit Party
of any of its rights and obligations under this Agreement or (iii) release
all or substantially all of the Collateral under the Collateral Documents
(except as expressly provided in the Credit Documents) supporting the Loans
hereunder in which such participant is participating.  Borrower Representative agrees that each
participant shall be entitled to the benefits of Sections 2.17(c), 2.18 and
2.19 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, (i) a
participant shall not be entitled to receive any greater payment under Section 2.18
or 2.19 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such participant, unless the sale of the
participation to such participant is made with Borrower Representative’s prior
written consent and (ii) a participant that would be a Non-US Lender if it
were a Lender shall not be entitled to the benefits of Section 2.19 unless
Borrower Representative is notified of the participation sold to such
participant and such participant agrees, for the benefit of Borrower
Representative, to comply with Section 2.19 as though it were a
Lender.  To the extent permitted by law,
each participant also shall be entitled to the benefits of Section 10.4 as
though it were a Lender, provided such Participant agrees to be subject to Section 2.16
as though it were a Lender.


 


(j)            Certain Other Assignments.  In addition to any other assignment permitted
pursuant to this Section 10.6, (i) any Lender may assign and/or
pledge all or any portion of its Loans, the other Obligations owed by or to
such Lender, and its Notes, if any, to secure obligations of such Lender
including, without limitation, any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve
System and any operating circular issued by such Federal Reserve Bank; provided,
no Lender, as between Company and such Lender, shall be relieved of any of its
obligations hereunder as a result of any such assignment and pledge, and provided further,
in no event shall the applicable Federal Reserve Bank, pledgee or trustee be
considered to be a “Lender” or be entitled to require the assigning Lender to
take or omit to take any action hereunder.


 


10.7        Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.


 


10.8        Survival of Representations,
Warranties and Agreements.  All representations, warranties and
agreements made herein shall survive the execution and delivery hereof and the
making of any Credit Extension. 
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
Sections 2.17, 9.3(b) and 9.6 shall survive the payment of the Loans,
the cancellation or expiration of the Letters of Credit and the reimbursement
of any amounts drawn thereunder, and the termination hereof.


 


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10.9        No Waiver; Remedies
Cumulative.  No failure
or delay on the part of Arranger, any Agent, any Lender or Issuing Bank in the
exercise of any power, right or privilege hereunder or under any other Credit
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege.  The rights, powers and remedies given to
Arranger, each Agent, each Lender and Issuing Bank hereby are cumulative and
shall be in addition to and independent of all rights, powers and remedies
existing by virtue of any statute or rule of law or in any of the other
Credit Documents or any of the Hedge Agreements or Banking Services
Agreements.  Any forbearance or failure
to exercise, and any delay in exercising, any right, power or remedy hereunder
shall not impair any such right, power or remedy or be construed to be a waiver
thereof, nor shall it preclude the further exercise of any such right, power or
remedy.


 


10.10      Marshalling;
Payments Set Aside.  Neither any
Agent nor any Lender shall be under any obligation to marshal any assets in
favor of any Credit Party or any other Person or against or in payment of any
or all of the Obligations.  To the extent
that any Credit Party makes a payment or payments to Administrative Agent,
Collateral Agent or Lenders (or to Administrative Agent or Collateral Agent, on
behalf of Lenders), or Administrative Agent, Collateral Agent or Lenders
enforce any security interests or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law,
common law or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor or related thereto, shall be revived and continued
in full force and effect as if such payment or payments had not been made or
such enforcement or setoff had not occurred.


 


10.11      Severability.  In case any provision in or obligation
hereunder or any Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.


 


10.12      Obligations
Several; Independent Nature of Lenders’ Rights.  The obligations of Lenders hereunder are
several and no Lender shall be responsible for the obligations or Commitment of
any other Lender hereunder.  Nothing
contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.


 


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10.13      Headings.  Section headings herein
are included herein for convenience of reference only and shall not constitute
a part hereof for any other purpose or be given any substantive effect.


 


10.14      APPLICABLE
LAW.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.


 


10.15      CONSENT TO
JURISDICTION.  ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER
CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW
YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT,
EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE
APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e) AGREES
AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION.


 


10.16      WAIVER OF
JURY TRIAL.  EACH OF THE PARTIES HERETO
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER
CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING
ESTABLISHED.  THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED
IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS.  EACH
PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL 


 


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INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, WHICH EACH HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN ITS RELATED FUTURE DEALINGS. 
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER.  IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


10.17      Confidentiality.  Each Lender shall hold all non-public
information regarding Holdings and its Subsidiaries and their businesses
identified as such by Borrower Representative and obtained by such Lender
pursuant to the requirements hereof in accordance with such Lender’s customary
procedures for handling confidential information of such nature, it being
understood and agreed by Holdings that, in any event, a Lender may make
disclosures: (i) to Affiliates of such Lender and to their agents and
advisors (and to other persons authorized by a Lender or Agent to organize,
present or disseminate such information in connection with disclosures
otherwise made in accordance with this Section 10.17); (ii) reasonably
required by any bona fide or potential pledgee, assignee, transferee or
participant in connection with the contemplated pledge, assignment, transfer or
participation by such Lender of any Loans or any participations therein or by
any direct or indirect contractual counterparties (or the professional advisors
thereto) in Hedge Agreements or Banking or Services Agreements  (provided, such counterparties and advisors
are advised of and agree to be bound by the provisions of this Section 10.17);
(iii) to any rating agency when required by it, provided that, prior to
any disclosure, such rating agency shall undertake in writing to preserve the
confidentiality of any confidential information relating to the Credit Parties
received by it from any of the Agents or any Lender; and (iv) required or
requested by any governmental agency or representative thereof or by The
National Association of Insurance Commissioners (and any successor thereto) or
pursuant to legal or judicial process; provided, unless specifically
prohibited by applicable law or court order, each Lender shall make reasonable
efforts to notify Borrower Representative of any request by any governmental
agency or representative thereof (other than any such request in connection
with any examination of the financial condition or other routine examination of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; provided, further,
that in no event shall any Lender be obligated or required to return any
materials furnished by Holdings, Company or any of its Subsidiaries.  Notwithstanding anything to the contrary set
forth herein, each party (and each of their respective employees,
representatives or other agents) may disclose to any and all persons, without
limitations of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind
(including opinions and other tax 


 


141

















 


analyses) that are provided
to any such party relating to such tax treatment and tax structure.  However, any information relating to the tax
treatment or tax structure shall remain subject to the confidentiality
provisions hereof (and the foregoing sentence shall not apply) to the extent
reasonably necessary to enable the parties hereto, their respective Affiliates,
and their and their respective Affiliates’ directors and employees to comply
with applicable securities laws.  For
this purpose, “tax structure” means any facts relevant to the federal income tax
treatment of the transactions contemplated by this Agreement but does not
include information relating to the identity of any of the parties hereto or
any of their respective Affiliates.


 


10.18      Usury
Savings Clause. 
Notwithstanding any other provision herein, the aggregate interest rate
charged with respect to any of the Obligations, including all charges or fees
in connection therewith deemed in the nature of interest under applicable law
shall not exceed the Highest Lawful Rate. 
If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the
outstanding amount of the Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect.  In addition, if when the Loans made hereunder
are repaid in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, Borrower
Representative shall pay to Administrative Agent an amount equal to the
difference between the amount of interest paid and the amount of interest which
would have been paid if the Highest Lawful Rate had at all times been in
effect.  Notwithstanding the foregoing, it
is the intention of Lenders and Company to conform strictly to any applicable
usury laws.  Accordingly, if any Lender
contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful Rate, then any such excess shall be
cancelled automatically and, if previously paid, shall at such Lender’s option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to Borrower Representative.


 


10.19      Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but one and
the same instrument.


 


10.20      Effectiveness.  This Agreement shall become effective upon
the execution of a counterpart hereof by each Credit Party, the Administrative
Agent, the Collateral Agent, the Swing Line Lender, the Issuing Bank and the
Lenders.


 


142

















 


APPENDIX A-1


TO CREDIT AND GUARANTY AGREEMENT


 


Revolving Loan Commitments


 


	
  Lender

  	
   

  	
  Revolving Loan Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
  Credit
  Suisse AG, Cayman Islands Branch

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  8-1/3rd

  	
  %

  
	
  JPMorgan
  Chase Bank, N.A.

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  50.0

  	
  %

  
	
  Wachovia
  Capital Finance Corporation (Central)

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  41-2/3rds

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  100.000000000

  	
  %

  



 


 


1

















 


APPENDIX B


TO CREDIT AND GUARANTY AGREEMENT


 


Notice Addresses


 


DOUGLAS DYNAMICS, INC.


DOUGLAS DYNAMICS FINANCE
COMPANY


DOUGLAS DYNAMICS, L.L.C.


FISHER,
LLC


 


7777
North 73rd Street


Milwaukee,
WI 53223


Attention:  Chief Executive Officer and President


Fax:
414-354-8448


 


with
a copy to:


 


Aurora
Capital Group


10877
Wilshire Boulevard


Suite 2100


Los
Angeles, CA 90024


Attention:  Secretary


Fax:
310-824-2791


 


2

















 


CREDIT SUISSE AG,


acting through its Cayman
Islands Branch,


as Administrative Agent,


Swing Line Lender, Issuing
Bank and a Lender


 


Administrative Agent’s
Principal Office:


 


Eleven Madison Avenue, OMA-2


New York, NY 10010


Attention:  Loan Services Manager


Tel: 212-538-3380


Fax: 212-325-8304


 


Swing Line Lender’s
Principal Office:


 


Eleven
Madison Avenue, OMA-2


New
York, NY 10010


Attention:  Loan Services Manager


Tel:
212-538-3380


Fax:
212-325-8304


 


Issuing Bank’s Principal
Office:


 


Eleven Madison Avenue, OMA-2


New York, NY 10010


Attention:  Letter of Credit Manager


Tel: 212-325-9286


Fax: 212-538-5626


 


3

















 


JPMORGAN CHASE BANK, N.A.,


as Collateral Agent


 


Michael A. Hintz


Account Executive — ABL


111 East Wisconsin Ave.,
Floor 15


Milwaukee, WI 53202-4815


Telecopy: 414-977-6652


Telephone: 414-977-6666


 


in each case, with a copy
to:


 


Skadden, Arps, Slate,
Meagher & Flom LLP


333 West Wacker Drive


Suite 2100


Chicago, IL 60606


Attn: Seth E. Jacobson


Tel: 312-407-0700


Fax: 312-407-0411


 


4














 


Exhibit B


 


Amendment to Term Credit Agreement


 


See Exhibit 10.1 to Amendment No.7 to the Registration Statement on
Form S-1 of Douglas Dynamics, Inc. (File No. 333-164590).


 














 


Exhibit C


 


Intercreditor Amendment


 


See attached.


 














 


AMENDMENT
NO. 1 TO INTERCREDITOR AGREEMENT


 


This AMENDMENT NO. 1 TO INTERCREDITOR
AGREEMENT (this “Amendment”), dated as of April [    ],
2010, is made and entered into among Douglas Dynamics, L.L.C., a Delaware
limited liability company (the “Borrower”), Douglas Dynamics Finance Company,
a Delaware corporation (“DD Finance”), Fisher, LLC, as Delaware limited
liability company (“Fisher”), Douglas Dynamics, Inc., a Delaware
corporation (“Holdings”), Credit Suisse AG, Cayman Islands Branch (“Credit
Suisse”), in its capacity as administrative agent under the ABL Loan
Documents (as defined in the Intercreditor Agreement referred to below) (in
such capacity, the “ABL Administrative Agent”), JPMorgan Chase Bank, N.A,
in its capacity as collateral agent under the ABL Loan Documents (in such
capacity, the “ABL Collateral Agent”), Credit Suisse, in its capacities
as administrative agent (in such capacity, the “Term Administrative Agent”
and, together with the ABL Administrative Agent, the “Administrative Agents”)
and collateral agent (in such capacity, the “Term Collateral Agent”) under
the Term Loan Documents (as defined in the Intercreditor Agreement referred to
below).


 


RECITALS


 


A.            The Borrower, DD Finance, Fisher, Holdings, the ABL
Administrative Agent, the ABL Collateral Agent, the Term Administrative Agent
and the Term Collateral Agent entered into that certain Intercreditor Agreement
dated as of May 21, 2007 (the “Intercreditor Agreement”;  capitalized terms used but
not defined herein having the meanings set forth therein).


 


B.            Concurrently
herewith, the Term Credit Agreement and the ABL Credit Agreement have been
amended to permit the making of additional term loans under the Term Credit
Agreement in the principal amount of $40,000,000 and reflect certain other
changes.


 


C.            The ABL Required Lenders and the Term Required Lenders
have given their prior written consent to the execution of this Amendment.


 


D.            The Borrower, the Term Administrative Agent, the Term
Collateral Agent, the ABL Administrative Agent and the ABL Collateral Agent
desire to amend the Intercreditor Agreement as set forth below on and subject
to the terms of this Amendment.


 


AGREEMENT


 


NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


1.             Amendment
to Intercreditor Agreement.


 


(a)   The
definition of “Maximum Term Principal Amount” in Section 1.1 of the
Intercreditor Agreement is hereby amended in its entirety by deleting the existing definition and
replacing it with the following:


 


“Maximum Term Principal Amount” shall mean, at
any time, (i) $125,000,000, less (ii) the aggregate principal amount
of permanent repayments or prepayments of indebtedness under the Term Credit
Agreement, other than any such reduction, repayment or prepayment made in


 

















 


connection with a Refinancing, plus (iii) for the
avoidance of doubt and without duplication, the aggregate principal amount of
any interest that has been capitalized under the Term Credit Agreement..


 


(b)   The
definition of “Maximum ABL Principal Amount” in Section 1.1 of the
Intercreditor Agreement is hereby amended in its entirety by deleting the
existing definition and replacing it with the following:


 


“Maximum ABL Principal Amount” shall mean, at
any time, (i) $60,000,000, less (ii) the aggregate permanent
reductions in the ABL Loan Commitments other than any such reduction, repayment
or prepayment made in connection with a Refinancing, plus (iii) for the
avoidance of doubt and without duplication, the aggregate principal amount of
any interest that has been capitalized under the ABL Credit Agreement.


 


2.             Effectiveness of Amendment..  This Amendment shall be effective as of the first
date (the “Amendment Effective Date”) on which all of the following
conditions precedent have been satisfied:


 


(c)   The
Administrative Agents shall have received counterparts of this Amendment
executed by the Term Administrative Agent, the Term Collateral Agent, the ABL
Administrative Agent, the ABL Collateral Agent, the Borrower, DD Finance,
Fisher and Holdings.


 


(d)   The
Administrative Agents shall have received an executed copy of Amendment No. 2
to Credit and Guaranty Agreement, dated as of the date hereof (the “Term
Amendment”), among the Borrower and each of the lenders party thereto and the
Term Amendment shall be in full force and effect.


 


(e)   The Administrative Agents shall have received an executed
copy of Amendment No. 1 to Credit and Guaranty Agreement, dated as of the
date hereof (the “ABL Amendment”), among the Borrower and each of the
lenders party thereto and the ABL Amendment shall be in full force and effect.


 


3.             Miscellaneous.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).  This Amendment may be executed in one or more
duplicate counterparts and when signed by all of the parties listed below shall
constitute a single binding agreement.  Except
for the amendments set forth in Section 1 hereof, all of the provisions of
the Intercreditor Agreement shall remain in full force and effect.  The foregoing amendments shall be strictly
construed in accordance with the express terms thereof.  This Amendment shall be deemed a “Credit
Document” as defined in the Credit Agreement.


 


2

















 


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


 


	
   

  	
  CREDIT PARTIES:

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS FINANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FISHER, LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


	
   

  	
  ABL
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE AG, CAYMAN ISLANDS BRANCH,  as ABL Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 

















 


	
   

  	
  ABL
  COLLATERAL AGENT:

  
	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE, N.A.,

  
	
   

  	
  as
  ABL Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 

















 


	
   

  	
  TERM
  ADMINISTRATIVE AGENT AND TERM COLLATERAL AGENT:

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE AG, CAYMAN ISLANDS BRANCH,

  
	
   

  	
  as
  Term Administrative Agent and Term Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title: