**EXHIBIT10.1**

 

 

 

**$55,000,000 CREDIT FACILITY**

 

**AMENDED AND RESTATED CREDIT AGREEMENT**

 

**Dated as of September 23, 2005**

 

**by and among**

 

**WII COMPONENTS, INC.,**

 

**a Delaware corporation**,

 

**as Borrower,**

 

 

**ANTARES CAPITAL CORPORATION,**

 

**for itself, as a Lender, and as Agent for all Lenders,**

 

 

**and**

 

 

**THE FINANCIAL INSTITUTIONS PARTY HERETO,**

 

**as Lenders**

 

 

 

----

 

**TABLE OF CONTENTS**

 
| ARTICLE I -   | THE CREDITS                                                          |   |
|--------------------|----------------------------------------------------------------------|--------|
| 1.1                | Amounts  and Terms of Commitments                                    |   |
| 1.2                | Notes                                                                |   |
| 1.3                | Interest                                                             |   |
| 1.4                | Loan Accounts                                                        |   |
| 1.5                | Procedure  for Revolving Credit and CapEx Loan Borrowing             |   |
| 1.6                | Conversion and  Continuation Elections                               |   |
| 1.7                | Optional  Prepayments                                                |   |
| 1.8                | Mandatory  Prepayments of Loans and Commitment Reductions            |   |
| 1.9                | Fees                                                                 |   |
| 1.10               | Payments  by the Borrower                                            |   |
| 1.11               | Payments  by the Lenders to the Agent; Settlement                    |   |
|               |                                                                 |   |
| ARTICLE II -  | CONDITIONS  PRECEDENT                                                |   |
| 2.1                | Conditions  to Effectiveness                                         |   |
| 2.2                | Conditions  to All Borrowings                                        |   |
| 2.3                | Conditions  to Certain Loans and Acquisitions                        |   |
| 2.4                | Conditions to CapEx  Loan Borrowings                                 |   |
|               |                                                                 |   |
| ARTICLE III - | REPRESENTATIONS  AND WARRANTIES                                      |   |
| 3.1                | Corporate  Existence and Power                                       |   |
| 3.2                | Corporate  Authorization; No Contravention                           |   |
| 3.3                | Governmental  Authorization                                          |   |
| 3.4                | Binding Effect                                                       |   |
| 3.5                | Litigation                                                           |   |
| 3.6                | No Default                                                           |   |
| 3.7                | ERISA  Compliance                                                    |   |
| 3.8                | Use of Proceeds;  Margin Regulations                                 |   |
| 3.9                | Title to  Property                                                   |   |
| 3.10               | Taxes                                                                |   |
| 3.11               | Financial  Condition                                                 |   |
| 3.12               | Environmental  Matters                                               |   |
| 3.13               | Loan Documents                                                       |   |
| 3.14               | Regulated  Entities                                                  |   |
| 3.15               | Solvency                                                             |   |
| 3.16               | Labor  Relations                                                     |   |
| 3.17               | Copyrights,  Patents, Trademarks and Licenses, etc.                  |   |
| 3.18               | Subsidiaries                                                         |   |
| 3.19               | Brokers’  Fees; Transaction Fees                                |   |
| 3.20               | Insurance                                                            |   |
| 3.21               | Full  Disclosure                                                     |   |
| 3.22               | Representations  and Warranties Incorporated from Related Agreements |   |

 

i

----

 
| 3.23              | Activities of  Borrower                                       |   |
|-------------------|---------------------------------------------------------------|--------|
| 3.24              | High Yield  Unsecured Documents                               |   |
| 3.25              | Foreign Assets  Control Regulations and Anti-Money Laundering |   |
|              |                                                          |   |
| ARTICLE IV - | AFFIRMATIVE COVENANTS                                         |   |
| 4.1               | Financial  Statements                                         |   |
| 4.2               | Certificates;  Borrowing Base Certificates; Other Information |   |
| 4.3               | Notices                                                       |   |
| 4.4               | Preservation  of Corporate Existence, Etc.                    |   |
| 4.5               | Maintenance  of Property                                      |   |
| 4.6               | Insurance                                                     |   |
| 4.7               | Payment  of Obligations                                       |   |
| 4.8               | Compliance  with Laws                                         |   |
| 4.9               | Inspection  of Property and Books and Records                 |   |
| 4.10              | Use of  Proceeds                                              |   |
| 4.11              | Solvency                                                      |   |
| 4.12              | Further  Assurances                                           |   |
| 4.13              | Appraisals                                                    |   |
|              |                                                          |   |
| ARTICLE V -  | NEGATIVE COVENANTS                                            |   |
| 5.1               | Limitation  on Liens                                          |   |
| 5.2               | Disposition  of Assets                                        |   |
| 5.3               | Consolidations  and Mergers                                   |   |
| 5.4               | Loans  and Investments                                        |   |
| 5.5               | Limitation  on Indebtedness                                   |   |
| 5.6               | Transactions  with Affiliates                                 |   |
| 5.7               | Management  Fees and Compensation                             |   |
| 5.8               | Use  of Proceeds                                              |   |
| 5.9               | Contingent  Obligations                                       |   |
| 5.10              | Compliance  with ERISA                                        |   |
| 5.11              | Restricted  Payments                                          |   |
| 5.12              | Change  in Business                                           |   |
| 5.13              | Change  in Structure                                          |   |
| 5.14              | Accounting  Changes                                           |   |
| 5.15              | Amendments  to Related Agreements                             |   |
| 5.16              | No  Negative Pledges                                          |   |
| 5.17              | Foreign  Assets Control Regulations                           |   |
| 5.18              | Integration                                                   |   |
| 5.19              | Certain  Leased Locations                                     |   |
|              |                                                          |   |
| ARTICLE VI - | FINANCIAL  COVENANTS                                          |   |
| 6.1               | Reserved                                                      |   |
| 6.2               | Leverage  Ratio                                               |   |
| 6.3               | Fixed  Charge Coverage Ratio                                  |   |
| 6.4               | Reserved                                                      |   |

 

ii

----

 
| 6.5                 | EBITDA                                            |   |
|---------------------|---------------------------------------------------|--------|
| 6.6                 | Equity  Contribution                              |   |
|                |                                              |   |
| ARTICLE VII -  | EVENTS OF DEFAULT                                 |   |
| 7.1                 | Event  of Default                                 |   |
| 7.2                 | Remedies                                          |   |
| 7.3                 | Rights  Not Exclusive                             |   |
| 7.4                 | Cash  Collateral for Letters of Credit            |   |
|                |                                              |   |
| ARTICLE VIII - | THE AGENT                                         |   |
| 8.1                 | Appointment  and Authorization                    |   |
| 8.2                 | Delegation  of Duties                             |   |
| 8.3                 | Liability  of Agent                               |   |
| 8.4                 | Reliance  by Agent                                |   |
| 8.5                 | Notice  of Default                                |   |
| 8.6                 | Credit  Decision                                  |   |
| 8.7                 | Indemnification                                   |   |
| 8.8                 | Agent  in Individual Capacity                     |   |
| 8.9                 | Successor  Agent                                  |   |
| 8.10                | Collateral  Matters                               |   |
|                |                                              |   |
| ARTICLE IX -   | MISCELLANEOUS                                     |   |
| 9.1                 | Amendments  and Waivers                           |   |
| 9.2                 | Notices                                           |   |
| 9.3                 | No  Waiver; Cumulative Remedies                   |   |
| 9.4                 | Costs  and Expenses                               |   |
| 9.5                 | Indemnity                                         |   |
| 9.6                 | Marshaling;  Payments Set Aside                   |   |
| 9.7                 | Successors  and Assigns                           |   |
| 9.8                 | Assignments,  Participations, etc.                |   |
| 9.9                 | Confidentiality                                   |   |
| 9.10                | Set-off;  Sharing of Payments                     |   |
| 9.11                | Notification  of Addresses, Lending Offices, Etc. |   |
| 9.12                | Counterparts                                      |   |
| 9.13                | Severability;  Facsimile Signature                |   |
| 9.14                | Captions                                          |   |
| 9.15                | Independence  of Provisions                       |   |
| 9.16                | Interpretation                                    |   |
| 9.17                | No  Third Parties Benefited                       |   |
| 9.18                | Governing  Law and Jurisdiction                   |   |
| 9.19                | Waiver  of Jury Trial                             |   |
| 9.20                | Entire  Agreement; Release                        |   |
| 9.21                | Patriot  Act                                      |   |
| 9.22                | Replacement  of Lender                            |   |
| 9.23                | Continued  Effectiveness; No Novation             |   |

 

iii

----

 
| ARTICLE X  -  | TAXES,  YIELD PROTECTION AND ILLEGALITY  |   |
|--------------------|------------------------------------------|--------|
| 10.1               | Taxes                                    |   |
| 10.2               | Illegality                               |   |
| 10.3               | Increased  Costs and Reduction of Return |   |
| 10.4               | Funding  Losses                          |   |
| 10.5               | Inability  to Determine Rates            |   |
| 10.6               | Reserves  on LIBOR Rate Loans            |   |
| 10.7               | Certificates  of Lenders                 |   |
| 10.8               | Survival                                 |   |
|               |                                     |   |
| ARTICLE XI -  | RESERVED                                 |   |
|               |                                     |   |
| ARTICLE XII - | DEFINITIONS                              |   |
| 12.1               | Defined  Terms                           |   |
| 12.2               | Other  Interpretive Provisions           |   |
| 12.3               | Accounting  Principles                   |   |

 

iv

----

 
| SCHEDULES              |                                              |   |
|------------------------|---------------------------------------------------|--------|
|                   |                                              |   |
| Schedule 1.1(a)   | Term Loan Commitments and CapEx  Loan Commitments |   |
| Schedule 1.1(b)   | Revolving Loan Commitments                        |   |
| Schedule 3.2      | Capitalization                                    |   |
| Schedule 3.5      | Litigation                                        |   |
| Schedule 3.7      | ERISA                                             |   |
| Schedule 3.17     | Intellectual  Property                            |   |
| Schedule 4.2(e)   | Expansion  Capital Expenditures                   |   |
| Schedule 5.1      | Liens                                             |   |
| Schedule 5.5      | Indebtedness                                      |   |
| Schedule 5.9      | Contingent  Obligations                           |   |
| Schedule 12.2     | Restricted  Accounts                              |   |
|                   |                                              |   |
|                   |                                              |   |
| EXHIBITS               |                                              |   |
|                   |                                              |   |
| Exhibit 4.2(b)    | Compliance  Certificate                           |   |
| Exhibit 12.1(a)   | Borrowing  Base Certificate                       |   |
| Exhibit 12.1(b)   | Notice of  Borrowing                              |   |
| Exhibit 12.1(c)   | Notice of  Continuation/Conversion                |   |
| Exhibit 12.1(d)   | Revolving  Note                                   |   |
| Exhibit 12.1(e)-1 | Term Note                                         |   |
| Exhibit 12.1(e)-2 | CapEx Note                                        |   |

 

v

----

 

**AMENDED AND RESTATED CREDIT AGREEMENT**

 

This AMENDED AND RESTATED CREDIT AGREEMENT(this “Agreement”) is entered into as of September 23, 2005, by and amongWII Components, Inc., a Delaware corporation (the “Borrower”), AntaresCapital Corporation, a Delaware corporation, as administrative agent for theseveral financial institutions from time to time party to this Agreement(collectively, the “Lenders” and individually each a “Lender”) and for itselfas a Lender, and such Lenders.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Agent and certainof the Lenders are parties to a Credit Agreement dated as of February 18,2004 (as heretofore amended, modified and supplemented, including, withoutlimitation, pursuant to that certain Consent, Waiver and First Amendment toCredit Agreement (the “First Amendment”) dated as of April 30, 2004 andthat certain Consent, Waiver and Second Amendment to Credit Agreement (the “SecondAmendment”) dated as of July 28, 2005, the “Original Credit Agreement”);and

 

WHEREAS, the Borrower, the Agent and theLenders desire to amend and restate in its entirety the Original Credit Agreementto, among other things, increase the amount of the revolving credit facilitymade available to the Borrower thereunder, and make available to the Borrower aterm loan and a capital expenditure loan facility, without constituting anovation, all on the terms and subject to the conditions contained herein.

 

NOW,THEREFORE, in consideration of the mutual agreements, provisions and covenantscontained herein, the parties hereto amend and restate the Original CreditAgreement in its entirety as follows:

 

# ARTICLE I - THE CREDITS

 

## 1.1                                 Amountsand Terms of Commitments.

##  

### (a)                                  TheTerm Loan and CapEx Loans.

###  

#### (i)                                     Each Lender with a Term Loan Commitment severally and not jointlyagrees, on the terms and conditions hereinafter set forth, to lend to theBorrower on the Restatement Effective Date, the amount set forth opposite suchLender’s name in Schedule 1.1(a) under the heading “TermLoan Commitment” (such amount being referred to herein as such Lender’s “TermLoan Commitment”).  Amounts borrowedunder this subsection 1.1(a)(i) are referred to as the “Term Loan.”

####  

#### (ii)                                  Each Lender with a CapEx Loan Commitment severally and not jointlyagrees, on the terms and conditions hereinafter set forth, to make loans to theBorrower (each such Loan, a “CapEx Loan”) from time to time on any Business Dayduring the period from the Restatement Effective Date to the CapEx LineTermination Date, in an aggregate amount not to exceed at any time outstandingthe amount set forth opposite

 

----

 

#### such Lender’s name in Schedule 1.1(a) underthe heading “CapEx Loan Commitment” (such amount as the same may be reducedfrom time to time as a result of one or more assignments pursuant to Section 9.8,being referred to herein as such Lender’s “CapEx Loan Commitment”); provided,however, that, after giving effect to any Borrowing of CapEx Loans, theaggregate principal amount of all outstanding CapEx Loans shall not exceed theAggregate CapEx Loan Commitment.

####  

#### (iii)                               Amounts borrowed as a Term Loan or a CapEx Loan which are repaid orprepaid may not be reborrowed.

####  

### (b)                                 TheRevolving Credit. Each Lender severally and not jointly agrees, on the terms andconditions hereinafter set forth, to make Loans to the Borrower (each suchLoan, a “Revolving Loan”) from time to time on any Business Day during the periodfrom the Restatement Effective Date to the Revolving Termination Date, in anaggregate amount not to exceed at any time outstanding the amount set forthopposite such Lender’s name in Schedule 1.1(b) under theheading “Revolving Loan Commitment” (such amount as the same may be reducedfrom time to time pursuant to subsection 1.8(h)(ii) hereof or as aresult of one or more assignments pursuant to Section 9.8, being referredto herein as such Lender’s “Revolving Loan Commitment”); provided, however,that, after giving effect to any Borrowing of Revolving Loans, the aggregateprincipal amount of all outstanding Revolving Loans shall not exceed theMaximum Revolving Loan Balance.  Subjectto the other terms and conditions hereof, amounts borrowed under this subsection 1.1(b) maybe repaid and reborrowed from time to time. The “Maximum Revolving Loan Balance” from time to time will be thelesser of:

###  

#### (i)                                     the “Borrowing Base” (as calculated pursuant to the Borrowing BaseCertificate then most recently delivered to the Agent and Lenders in accordancewith the terms hereof) in effect from time to time, and

####  

#### (ii)                                  the Aggregate Revolving Loan Commitment then in effect;

 

less, in either case, the amount of any Letter of Credit ParticipationLiability.

 

If at any time the then outstanding principalbalance of Revolving Loans exceeds the Maximum Revolving Loan Balance, thenBorrower shall, within three (3) Business Days, prepay outstandingRevolving Loans in an amount sufficient to eliminate such excess.  Immediately prior to the effectiveness ofthis Agreement, the outstanding principal balance of Revolving Loans is$4,300,000, such amount constituting the outstanding Revolving Loans under theOriginal Credit Agreement.

 

### (c)                                  LenderLetters of Credit and Letter of Credit Participation Agreements.  Subject to the terms andconditions of this Agreement and in reliance upon the representations andwarranties of Borrower herein set forth, the Revolving Loan Commitment may, inaddition to advances under the Revolving Loan, be utilized, upon the request ofthe Borrower, for (i) the issuance of letters of credit by Agent (eachsuch letter of credit, a “Lender Letter of Credit”) or (ii) the issuanceof letter of credit participation agreements by Agent (each such letter of creditparticipation, a “Letter of Credit Participation Agreement”) to confirm paymentto banks (whether or not such banks are Lenders) which issue letters of creditfor the account of Borrower

 

2

----

 

### or anyof its Subsidiaries on behalf of each Lender having a Revolving Loan Commitment(severally and not jointly) according to such Lender’s Revolving LoanCommitment.  The aggregate amount ofLetter of Credit Participation Liability with respect to all Lender Letters ofCredit and Letter of Credit Participation Agreements outstanding at any timeshall not exceed $2,000,000.

###  

The Borrower shall be irrevocably andunconditionally obligated forthwith without presentment, demand, protest orother formalities of any kind, to reimburse the Agent for any amounts paid bythe Agent under any Lender Letter of Credit or Letter of Credit ParticipationAgreement.  The Borrower herebyauthorizes and directs the Lenders with Revolving Loan Commitments (or if theRevolving Loan Commitments have terminated, who had a Revolving Loan Commitmentat the time of such termination), at the Agent’s option, to make a RevolvingLoan in the amount of any payment made by the Agent with respect to any LenderLetter of Credit or Letter of Credit Participation Agreement.  All amounts paid by the Agent with respect toany Lender Letter of Credit or Letter of Credit Participation Agreement thatare not immediately repaid by Borrower with the proceeds of a Revolving Loan orotherwise shall bear interest at the interest rate then applicable to RevolvingLoans, calculated using the Base Rate and the Applicable Margin.  Each Lender agrees to fund its CommitmentPercentage of any Revolving Loan made pursuant to this subsection 1.1(c) and,if no such Revolving Loans are made, each Lender agrees to purchase, and shallbe deemed to have purchased, a participation in such Lender Letter of Credit orLetter of Credit Participation Agreement in an amount equal to its ratableshare of such Lender Letter of Credit or Letter of Credit ParticipationAgreement based upon the Revolving Loan Commitments then in effect and eachLender agrees to pay to the Agent such share of any payments made by the Agentunder such Lender Letter of Credit or Letter of Credit Participation Agreement.  The obligations of each Lender under thepreceding two (2) sentences shall be absolute and unconditional and suchremittance shall be made notwithstanding the occurrence or continuation of anEvent of Default or Default or the failure to satisfy any condition set forthin Section 2.2 hereof.

 

In addition to all other terms and conditionsset forth in this Agreement, the issuance by Agent of any Lender Letter ofCredit or Letter of Credit Participation Agreement shall be subject to thecondition precedent that the Lender Letter of Credit, Letter of CreditParticipation Agreement or the letter of credit or written contract for whichthe Borrower requests a Letter of Credit Participation Agreement shall supporta transaction entered into by one of its Subsidiaries in the Ordinary Course ofBusiness, or otherwise reasonably acceptable to Agent, and shall be in suchform, be for such amount, and contain such terms as are reasonably satisfactoryto Agent.

 

The expiration date of each Lender Letter ofCredit shall be on a date which is the earlier of (a) one year from itsdate of issuance, or (b) the thirtieth (30th) day before the RevolvingTermination Date.  Each Letter of CreditParticipation Agreement shall provide that the Letter of Credit ParticipationAgreement terminates and all demands or claims for payment must be presented bya date certain, which date will be the earlier of (a) one year from itsdate of issuance, or (b) the thirtieth (30th) day before the RevolvingTermination Date.

 

The Borrower shall give Agent at least ten (10) BusinessDays’ prior written notice specifying the date a Lender Letter of Credit orLetter of Credit Participation Agreement is to be issued, identifying thebeneficiary and describing the nature of the transactions proposed to be

 

3

----

 

supportedthereby.  The notice shall be accompaniedby the drawing terms for the Lender Letter of Credit or form of each letter ofcredit or other written contract which will be supported by the Letter ofCredit Participation Agreement.

 

## 1.2                                 Notes.

##  

### (a)                                  TheTerm Loan made by each Lender with a Term Loan Commitment shall be evidenced bya Term Note payable to the order of such Lender in an amount equal to suchLender’s Term Loan Commitment.

###  

### (b)                                 TheCapEx Loans made by each Lender with a CapEx Loan Commitment shall be evidencedby a CapEx Note payable to the order of such Lender in an amount equal to suchLender’s CapEx Loan Commitment.

###  

### (c)                                  TheRevolving Loans made, or deemed made, by each Lender shall be evidenced by aRevolving Note payable to the order of such Lender in an amount equal to suchLender’s Revolving Loan Commitment.

###  

## 1.3                                 Interest.

##  

### (a)                                  Subjectto subsections 1.3(c) and 1.3(d), each Loan shall bear interest on theoutstanding principal amount thereof from the date when made at a rate perannum equal to the LIBOR or the Base Rate, as the case may be, plus theApplicable Margin.  Each determination ofan interest rate by the Agent shall be conclusive and binding on the Borrowerand the Lenders in the absence of demonstrable error.  All computations of fees and interest payableunder this Agreement shall be made on the basis of a 360-day year and actualdays elapsed.  Interest and fees shallaccrue during each period during which interest or such fees are computed fromthe first day thereof to the last day thereof. The Borrower hereby agrees that accrued and unpaid interest in anaggregate amount equal to $9,665.97 due and owing to the Persons who areLenders hereunder and “Lenders” under and as defined in the Original CreditAgreement (each an “Existing Lender”) as of the Restatement Effective Dateshall be deemed accrued and continued hereunder and shall be paid in cash bythe Borrower to the Agent, for the benefit of the Existing Lenders, (i) withrespect to accrued and unpaid interest on Base Rate Loans under the OriginalCredit Agreement, on the first Interest Payment Date with respect to Base RateLoans occurring after the Restatement Effective Date, and (ii) withrespect to accrued and unpaid interest on any LIBOR Rate Loans under theOriginal Credit Agreement, on the respective Interest Payment Date applicableto such LIBOR Rate Loan under the Original Credit Agreement.

###  

### (b)                                 Intereston each Loan shall be paid in cash, in arrears on each Interest Payment Dateand on the date of any payment or prepayment of Loans in full.

###  

### (c)                                  Atthe election of the Agent or the Required Lenders while any Event of Defaultexists, the Borrower shall pay, in cash, interest (after as well as before entryof judgment thereon to the extent permitted by law) on the Obligations from andafter the date of occurrence of such Event of Default, at a rate per annumwhich is determined by adding two percent (2.0%) per annum to the ApplicableMargin for such Loans (plus, the LIBOR or Base Rate, as the case may be) and,in the case of Obligations not subject to the Applicable Margin (other than thefees

 

4

----

 

### describedin Section 1.9), at a rate per annum equal to the rate per annumapplicable to Revolving Loans which are (or if any were) Base Rate Loans(including the Applicable Margin with respect thereto) plus two percent (2.0%);provided, however, that, on and after the expiration of anyInterest Period applicable to any LIBOR Rate Loan outstanding during thecontinuation of such Event of Default, the principal amount of such Loan shall,during the continuation of such Event of Default, bear interest at a rate perannum equal to the Base Rate plus the Applicable Margin plus two percent(2.0%).  All such interest shall bepayable on demand of the Agent or the Required Lenders.

###  

### (d)                                 Anythingherein to the contrary notwithstanding, the obligations of the Borrowerhereunder and under the other Loan Documents shall be subject to the limitationthat payments of interest shall not be required, for any period for whichinterest is computed hereunder or thereunder, to the extent (but only to theextent) that contracting for or receiving such payment by the respective Lenderwould be contrary to the provisions of any law applicable to such Lenderlimiting the highest rate of interest which may be lawfully contracted for,charged or received by such Lender, and in such event the Borrower shall paysuch Lender interest at the highest rate permitted by applicable law.

###  

## 1.4                                 LoanAccounts. The Agent, on behalf of the Lenders, shall record on its books andrecords the amount of each Loan made, the interest rate applicable, allpayments of principal and interest thereon and the principal balance thereoffrom time to time outstanding.  The Agentshall deliver to the Borrower on a monthly basis a loan statement setting forthsuch record for the immediately preceding month.  Such record shall, absent demonstrable error,be conclusive evidence of the amount of the Loans made by the Lenders to theBorrower and the interest and payments thereon. Any failure to so record or any error in doing so, or any failure todeliver such loan statement shall not, however, limit or otherwise affect theobligation of the Borrower hereunder (and under any Note) to pay any amountowing with respect to the Loans or provide the basis for any claim against theAgent or any Lender.

##  

## 1.5                                 Procedurefor Revolving Credit and CapEx Loan Borrowing.

##  

### (a)                                  EachBorrowing of a Revolving Loan and/or a CapEx Loan shall be made upon theBorrower’s irrevocable (subject to Section 10.5 hereof) written noticedelivered to the Agent in the form of a Notice of Borrowing, which notice mustbe received by the Agent prior to 12:30 p.m. (Chicago time) (i) onthe requested Borrowing date in the case of each Base Rate Loan equal to orless than $1,000,000 and in the case of the Loans to be made on the RestatementEffective Date, (ii) on the date which is one (1) Business Day priorto the requested Borrowing date of each Base Rate Loan in excess of $1,000,000but equal to or less than $3,000,000 and (iii) on the day which is three (3) BusinessDays prior to the requested Borrowing date in the case of each LIBOR Rate Loanand each Base Rate Loan in excess of $3,000,000; provided, that withrespect to Loans subsequent to the Loans made on the Restatement EffectiveDate, the Borrower may give notice of the requested Borrowing to the Agent bytelephone call, with such notice confirmed not later than the followingBusiness Day by delivery to the Agent of a signed Notice of Borrowing.  Such Notice of Borrowing shall specify:

###  

#### (i)                                     the amount of the Borrowing (which shall be in an aggregate minimumprincipal amount of $100,000 and multiples of $50,000 in excess thereof);

 

5

----

####  

#### (ii)                                  the requested Borrowing date, which shall be a Business Day;

####  

#### (iii)                               whether the Borrowing is to comprise Revolving Loans or CapEx Loans;

####  

#### (iv)                              whether the Borrowing is to comprise LIBOR Rate Loans and/or BaseRate Loans; and

####  

#### (v)                                 if the Borrowing is to comprise LIBOR Rate Loans, the InterestPeriod applicable to such Loans.

####  

provided, however, that with respect to the Borrowing to be made onthe Restatement Effective Date, such Borrowing will consist of Base Rate Loansonly and shall remain so for not less than three (3) Business Days.  Thereafter, the Borrower may request thatRevolving Loans and/or CapEx Loans be made as LIBOR Rate Loans and that Loansbe converted to or continued as LIBOR Rate Loans, provided only LIBOR RateLoans having an Interest Period of one (1) month shall be permitted duringthe first sixty (60) days after the Restatement Effective Date.

 

### (b)                                 Uponreceipt of the Notice of Borrowing, the Agent will promptly notify each Lenderwith a Commitment affected thereby of such Notice and of the amount of suchLender’s Commitment Percentage of the Borrowing.

###  

### (c)                                  UnlessAgent is otherwise directed in writing by the Borrower, the proceeds of eachrequested Borrowing after the Restatement Effective Date will be made availableto the Borrower by the Agent by wire transfer (or ACH transfer) of such amountto the Borrower pursuant to the wire transfer instructions specified on thesignature page hereto.

###  

## 1.6                                 Conversionand Continuation Elections.

##  

### (a)                                  TheBorrower may upon irrevocable (subject to subsection 10.2(c) and Section 10.5)written notice to the Agent in accordance with subsection 1.6(b) electto convert on any Business Day, any Base Rate Loans into LIBOR Rate Loans orelect to continue on the last day of the applicable Interest Period any LIBORRate Loans having Interest Periods maturing on such day, in each instance, inwhole or in part in an amount not less than $100,000, or that is in an integralmultiple of $50,000 in excess thereof.

###  

### (b)                                 TheBorrower shall deliver a Notice of Continuation/Conversion to be received bythe Agent not later than 12:30 p.m. (Chicago time) at least three (3) BusinessDays in advance of the requested Conversion Date or continuation date,specifying:

###  

#### (i)                                     the proposed Conversion Date or continuation date;

####  

#### (ii)                                  the aggregate amount of Loans to be converted or continued; and

####  

#### (iii)                               the duration of the requested Interest Period with respect to theLoans to be converted or continued as LIBOR Rate Loans.

####  

### (c)                                  Ifupon the expiration of any Interest Period applicable to LIBOR Rate Loans, theBorrower has failed to select timely a new Interest Period to be applicable tosuch LIBOR Rate

 

6

----

 

### Loansor if any Event of Default shall then exist, the Borrower shall be deemed tohave elected to convert such LIBOR Rate Loans into Base Rate Loans effective asof the expiration date of such current Interest Period.

###  

### (d)                                 Uponreceipt of a Notice of Continuation/Conversion, the Agent will promptly notifyeach Lender thereof.  In addition, theAgent will, with reasonable promptness, notify the Borrower and the Lenders ofeach determination of LIBOR; provided, that any failure to do so shallnot relieve the Borrower of any liability hereunder or provide the basis forany claim against the Agent.  Allconversions and continuations shall be made pro rata according to therespective outstanding principal amounts of the Loans with respect to which thenotice was given held by each Lender.

###  

### (e)                                  Unlessthe Required Lenders shall otherwise agree, during the existence of an Event ofDefault, the Borrower may not elect to have a Loan converted into or continuedas a LIBOR Rate Loan.

###  

### (f)                                    Notwithstandingany other provision contained in this Agreement, after giving effect to anyBorrowing, or to any continuation or conversion of any Loans, there shall notbe more than seven (7) different Interest Periods in effect.

###  

### (g)                                 LIBORRate Loans that shall have been evidenced by the Original Credit Agreement andremain outstanding as of the Restatement Effective Date shall continue as LIBORRate Loans hereunder and the Interest Periods relating thereto shall continueas Interest Periods hereunder.

###  

## 1.7                                 Optional Prepayments.

###  

### (a)                                  TheBorrower may at any time upon at least one (1) Business Day’s priorwritten notice to the Agent (which notice may, at the Borrower’s discretion,also specify the manner in which prepayments being made pursuant to this Section 1.7shall be applied to the Obligations), prepay the Loansin whole or in part in an amount greater than or equal to $100,000, in eachinstance, without penalty or premium except as provided in Section 10.4.  Optional partial prepayments of the Term Loanand CapEx Loans shall be applied in the manner set forth in subsection 1.8(h)(i).  Optional partial prepayments in amounts lessthan $100,000 shall not be permitted.

###  

### (b)                                 Thenotice of any prepayment shall not thereafter be revocable by the Borrower andthe Agent will promptly notify each Lender thereof and of such Lender’sCommitment Percentage of such prepayment. The payment amount specified in such notice shall be due and payable onthe date specified therein.  Togetherwith each prepayment under this Section 1.7, the Borrower shall pay anyamounts required pursuant to Section 10.4.

###  

## 1.8                                 MandatoryPrepayments of Loans and Commitment Reductions.

##  

### (a)                                  (i)                                     Term Loan.  The outstanding principal amount of the TermLoan shall be paid in full on September 23, 2010.

 

7

----

 

### (ii)                                  Cap-ExLoans. Commencing at the close of business on the CapEx Line Termination Dateand at all times thereafter, the Lenders shall not be required or obligated tomake additional CapEx Loans and the aggregate outstanding principal balance ofall CapEx Loans on such date shall convert into a senior secured term loan andshall be paid in full on September 23, 2010.

###  

### (b)                                 RevolvingLoan.  TheBorrower shall repay to the Lenders in full on the date specified in clause (a) ofthe definition of “Revolving Termination Date” the aggregate principal amountof the Revolving Loans outstanding on the Revolving Termination Date.

###  

### (c)                                  AssetDispositions. If the Borrower or any of its Subsidiaries shall at any time or fromtime to time:

###  

#### (i)                                     make or agree to make a Disposition; or

####  

#### (ii)                                  suffer an Event of Loss;

####  

and the aggregate amount of the Net Proceedsreceived by the Borrower and its Subsidiaries in connection with suchDisposition or Event of Loss and all other Dispositions and Events of Lossoccurring during the fiscal year exceeds $1,000,000, then (A) the Borrowershall promptly notify the Agent of such proposed Disposition or Event of Loss(including the amount of the estimated Net Proceeds to be received by theBorrower and/or any of its Subsidiaries in respect thereof) and (B) promptlyupon receipt by the Borrower and/or any of its Subsidiaries of the Net Proceedsof such Disposition or Event of Loss, the Borrower shall deliver such NetProceeds to the Agent for distribution to the Lenders as a prepayment of theLoans, which prepayment shall be applied in accordance with subsection 1.8(h)(ii) hereof.  Notwithstanding the foregoing and provided(x) no Default or Event of Default has occurred and is continuing and (y) theBorrower otherwise shall have complied with Section 5.2 in respectthereof, such prepayment shall not be required to the extent a Subsidiary ofthe Borrower reinvests the Net Proceeds of such Disposition or Event of Loss,or a portion thereof, in productive assets of a kind then used or usable in thebusiness of such Subsidiary, within one hundred eighty (180) days after thedate of such Disposition or Event of Loss, or enters into a binding commitmentin respect thereof within said one hundred eighty (180) day period and subsequentlymakes such reinvestment.  Pending suchreinvestment, such Net Proceeds shall be either (i) delivered to theAgent, for distribution to the Lenders, as a prepayment of the Revolving Loans(to the extent of Revolving Loans then outstanding), but not as a permanentreduction of the Revolving Loan Commitment (which application shall not berequired if, under the terms of the Indenture, such application is required toresult in a permanent reduction of the Revolving Loan Commitment) or (ii) heldby the Borrower in an account of the Borrower subject to a deposit accountcontrol agreement to which the Agent is a party, and which is in form andsubstance acceptable to the Agent; provided, such Net Proceeds depositedinto such deposit account shall be used by a Subsidiary of the Borrower solelyfor reinvestment as and to the extent permitted herein or otherwise deliveredpromptly to the Agent, for distribution to the Lenders, as a prepayment of theLoans, to be applied in accordance with subsection 1.8(h)(ii).  The foregoing notwithstanding, if at any timepending such reinvestment the aggregate outstanding principal balance of theRevolving Loans exceeds the Maximum Revolving Loan Balance, then Agent herebyis directed to apply such Net Proceeds deposited

 

8

----

 

into such deposit account to the RevolvingLoans in an amount sufficient to eliminate such excess.

 

### (d)                                 Issuanceof Debt Securities. Immediately upon the receipt by Borrower or any of its Subsidiaries of theNet Issuance Proceeds of the issuance of debt securities by Borrower or any ofits Subsidiaries (other than Net Issuance Proceeds from Permitted Issuances),Borrower shall deliver to Agent an amount equal to one hundred percent (100%)of such proceeds for application to the Loans in accordance with subsection 1.8(h)(i).

###  

### (e)                                  Reserved.

###  

### (f)                                    Proceeds Under Acquisition Documents.  Immediately upon receipt of anyindemnification, purchase price adjustment, earnout, escrow or similar payment(other than a working capital adjustment) under any Acquisition Documents bythe Borrower or any of its Subsidiaries, the Borrower shall deliver to theAgent an amount equal to fifty percent (50%) of each such payments forapplication to the Loans in accordance with subsection 1.8(h)(i); provided,that the remaining fifty percent (50%) of any such payments is used by aSubsidiary of the Borrower solely for purposes otherwise permitted hereunder,including general working capital purposes.

###  

### (g)                                 EquityContribution. Immediately upon receipt by the Borrower or any of its Subsidiaries ofany equity contribution from Sponsor in accordance with Section 6.6,Borrower shall deliver to Agent an amount equal to one hundred percent (100%)of such proceeds (or otherwise repay the Loans in an amount equal to onehundred percent (100%) of such proceeds) for application to the Loans inaccordance with subsection 1.8(h)(iii).

###  

### (h)                                 Applicationof Prepayments.

###  

#### (i)                                     Anyprepayments pursuant to Section 1.7 or subsection 1.8(d) or 1.8(f) shallbe applied as follows: (A) the first fifty percent (50%) of suchprepayment shall be applied to prepay the Term Loan and the CapEx Loans prorata based on the then outstanding principal balances thereof and (B) theremaining fifty percent (50%) of such prepayment shall be applied to prepay theoutstanding Revolving Loans (without a corresponding reduction of the RevolvingLoan Commitment of any Lender) and, after the outstanding Revolving Loans shallhave been paid in full, any remaining portion of such prepayment shall beapplied to prepay the Term Loan and the CapEx Loans pro rata based on the thenoutstanding principal balances thereof; provided, however, thatso long as no Default or Event of Default has occurred and is continuing,prepayments made pursuant to Section 1.7 may be applied to the Obligationsat the direction of the Borrower, as specified in the applicable notice ofprepayment delivered by the Borrower pursuant to subsection 1.7(a); provided,further, however, that in the absence of such direction by theBorrower, such prepayments shall be applied to prepay the outstanding RevolvingLoans (without a corresponding reduction of the Revolving Loan Commitment ofany Lender) and, after the outstanding Revolving Loans shall have been paid infull, any remaining portion of such prepayment shall be applied to prepay theTerm Loan and the CapEx Loans pro rata based on the then outstanding principalbalances thereof.

 

9

----

 

#### (ii)                                  Anyprepayments pursuant to subsection 1.8(c) (other than prepayments ofRevolving Loans pending reinvestment as set forth therein) shall be applied asfollows: (A) the first fifty percent (50%) of such prepayment shall beapplied to prepay the Term Loan and the CapEx Loans pro rata based on the thenoutstanding principal balances thereof and (B) the remaining fifty percent(50%) of such prepayment shall be applied in permanent reduction of theRevolving Loan, whereupon the Revolving Loan Commitment of each Lender shallautomatically and permanently be reduced by an amount equal to such Lender’sratable share of the aggregate of principal repaid, effective as of the earlierof the date that such prepayment is made or the date by which such prepaymentis due and payable hereunder and, after the outstanding Revolving Loans shallhave been paid in full, any remaining portion of such prepayment shall beapplied to prepay the Term Loan and the CapEx Loans pro rata based on the thenoutstanding principal balances thereof; provided, however, thatprepayments pursuant to subsection 1.8(c) shall not result in apermanent reduction of the Revolving Loan Commitment if (1) the Borrowerhas complied with Section 5.2 in respect thereof, including, withoutlimitation, by delivering to the Agent a replacement Borrowing Base Certificatesetting forth the calculation of the “Borrowing Base” after giving effect toeach underlying Disposition and Event of Loss, (2) at the request of theAgent, an appraisal of the remaining equipment, machinery and/or real Propertyto be included in such “Borrowing Base” has been undertaken within sixty (60)days of the date of any such Disposition and Event of Loss, which request shallbe made, if ever, by the Agent within a reasonable period after the date uponwhich the Borrower shall have notified the Agent in writing of such Dispositionor Event of Loss, and (3) the Indenture does not otherwise require suchapplication to result in a permanent reduction of the Revolving LoanCommitment.

####  

#### (iii)                               Anyprepayments pursuant to subsection 1.8(g) shall be applied to theRevolving Loan (without a corresponding reduction of the Revolving LoanCommitment of any Lender).

####  

#### (iv)                              To theextent permitted by the foregoing clauses (i), (ii) and (iii), amountsprepaid shall be applied first to any Base Rate Loans then outstanding and thento outstanding LIBOR Rate Loans with the shortest Interest Periodsremaining.  Together with each prepaymentunder this Section 1.8, the Borrower shall pay any amounts requiredpursuant to Section 10.4 hereof.

####  

## 1.9                                 Fees.

 

### (a)                                  Closingand Agent’s Fees. The Borrower shall pay to the Agent, for the ratable benefit of theLenders, a closing fee, and for the Agent’s own account, an agent’s fee, in theamounts and at the times set forth in an amended and restated letter agreementbetween the Borrower and the Agent dated of even date herewith (the “Fee Letter”).

 

10

----

 

### (b)                                 CommitmentFee.  TheBorrower shall pay to Agent, for the ratable benefit of the Lenders, a fee (the“Commitment Fee”) in an amount equal to:

###  

#### (i)                                     the Aggregate Revolving Loan Commitment, less

####  

#### (ii)                                  the sum of (x) the average daily balance of all Revolving Loansoutstanding plus (y) the average daily amount of the Letter of CreditParticipation Liability, in each case, during the preceding quarter,

####  

multiplied by three-eighths of one percent(0.375%) per annum, such fee to be payable quarterly in arrears on the firstday of the quarter following the date hereof and the first day of each quarterthereafter.  The Commitment Fee providedin this subsection 1.9(b) shall accrue at all times from and aftermutual execution and delivery of this Agreement.  The Borrower hereby agrees that accrued andunpaid Commitment Fees in an amount equal to $18,628.12 due and owing to theExisting Lenders under the Original Credit Agreement as of the RestatementEffective Date shall be deemed accrued and continued hereunder and shall bepaid in full in cash by the Borrower to the Agent, for the benefit of theExisting Lenders, on the first day of the month following the date hereof.

 

### (c)                                  Letterof Credit Participation Fee.  The Borrower shall pay to Agent, for theratable benefit of the Lenders, fees for each Lender Letter of Credit and eachLetter of Credit Participation Agreement (the “Letter of Credit ParticipationFee”) for the period from and including the date of issuance of same to andexcluding the date of expiration or termination, equal to the average dailyamount of Letter of Credit Participation Liability multiplied by a rate perannum equal to three percent (3.00%); provided, however, at theAgent’s or Required Lenders’ option, while an Event of Default exists suchpercent shall be increased by two percent (2.00%) per annum over the otherwiseapplicable rate, such fees to be payable monthly in arrears on the first day ofthe month following the date hereof and the first day of each monththereafter.  The Borrower shall alsoreimburse the Agent for any and all fees and expenses, if any, paid by theAgent to the issuer of any letter of credit subject to a Letter of CreditParticipation Agreement.

###  

### (d)                                 CapExCommitment Fee. The Borrower shall pay to the Agent, for the ratable benefit of theLenders having CapEx Loan Commitments, a fee (the “CapEx Commitment Fee”) in anamount equal to

###  

#### (i)                                     the Aggregate CapEx Loan Commitment, less

####  

#### (ii)                                  the average daily balance of all CapEx Loans outstanding during thepreceding calendar quarter,

####  

### multiplied by three-eighths of one percent(0.375%) per annum, such fee to be payable quarterly in arrears on the firstday of the calendar quarter following the date hereof and the first day of eachcalendar quarter thereafter.  The CapExCommitment Fee provided in this subsection 1.9(d) shall accrue at alltimes from and after mutual execution and delivery of this Agreement until theCapEx Line Termination Date (with all accrued fees due and payable inaccordance with the terms of this Agreement).

 

11

----

 

## 1.10                           Payments by the Borrower.

##  

### (a)                                  Allpayments (including prepayments) to be made by the Borrower on account ofprincipal, interest, fees and other amounts required hereunder shall be madewithout set-off, recoupment, counterclaim or deduction of any kind, shall,except as otherwise expressly provided herein, be made to the Agent for theratable account of the Lenders at the address for payment specified in thesignature page hereof in relation to the Agent (or such other address asthe Agent may from time to time specify in accordance with Section 9.2),and shall be made in dollars and in immediately available funds, no later than12:30 p.m. (Chicago time) on the date due. Any payment which is received by the Agent later than 12:30 p.m.(Chicago time) shall be deemed to have been received on the immediatelysucceeding Business Day and any applicable interest or fee shall continue toaccrue.  The Borrower hereby authorizesthe Agent and each Lender to (but neither the Agent nor any Lender shall haveany obligation to) make a Revolving Loan (which shall be a Base Rate Loan) topay (i) interest, agent fees, Commitment Fees, CapEx Commitment Fees andLetter of Credit Participation Fees, in each instance, on the date due, or (ii) afterfive (5) Business Days prior notice to the Borrower, other fees, costs or expensespayable by the Borrower or any of its Subsidiaries hereunder or under the otherLoan Documents.

###  

### (b)                                 Subjectto the provisions set forth in the definition of “Interest Period” herein, ifany payment hereunder shall be stated to be due on a day other than a BusinessDay, such payment shall be made on the next succeeding Business Day, and suchextension of time shall in such case be included in the computation of interestor fees, as the case may be.

###  

### (c)                                  Allamounts collected or received by the Agent after the Obligations have beenaccelerated (so long as such acceleration has not been rescinded) and allproceeds received by the Agent as a result of the exercise of its remediesunder the Collateral Documents after the occurrence and during the continuanceof an Event of Default shall be applied as follows:

###  

first, to payment of fees, costs and expenses, including Attorney Costs,of the Agent payable or reimbursable by the Borrower and/or its Subsidiariesunder the Loan Documents;

 

second, to payment of Attorney Costs of Lenders payable or reimbursable bythe Borrower and/or its Subsidiaries under this Agreement;

 

third, to payment of all accrued unpaid interest on the Obligations prorata;

 

fourth, to payment of principal of the Obligations (including, if an Eventof Default has occurred and is continuing, cash collateralization of Letter ofCredit Participation Liability);

 

fifth, to payment of any other amounts owing constituting Obligations;and

 

sixth, any remainder shall be for the account of and paid to whomever maybe lawfully entitled thereto.

 

12

----

 

In carrying out the foregoing, (i) amountsreceived shall be applied in the numerical order provided until exhausted priorto the application to the next succeeding category; and (ii) each of theLenders shall receive an amount equal to its pro rata share of amountsavailable to be applied pursuant to clauses second, third, fourth and fifthabove.

 

## 1.11                           Paymentsby the Lenders to the Agent; Settlement.

##  

### (a)                                  Asset forth in subsection 1.5(b), upon receipt of a Notice of Borrowing, theAgent will promptly notify each Lender of such Lender’s Commitment Percentageof the Borrowing requested thereby.  EachLender will fund its Commitment Percentage of Borrowings of Revolving Loans tothe Agent at the Agent’s account specified on its signature page hereto,or to such other account as the Agent may designate in writing, no later than2:00 p.m. (Chicago time) on the scheduled Borrowing date.  Each Lender with a CapEx Loan Commitment willfund its Commitment Percentage of Borrowings of CapEx Loans to the Agent at theAgent’s account specified on its signature page hereto, or to such otheraccount as the Agent may designate in writing, no later than 2:00 p.m.(Chicago time) on the scheduled Borrowing date.

###  

### (b)                                 Unlessthe Agent shall have received notice from a Lender on the Restatement EffectiveDate or, with respect to each Borrowing after the Restatement Effective Date,by 1:00 p.m. (Chicago time) on the date of any proposed Borrowing, thatsuch Lender will not make available to the Agent as and when required hereunderfor the account of the Borrower the amount of such Lender’s CommitmentPercentage of the proposed Borrowing, the Agent may assume that each Lender hasmade such amount available to the Agent in immediately available funds on theapplicable Borrowing date and the Agent may (but shall not be so required), inreliance upon such assumption, make available to the Borrower on such date acorresponding amount.  If and to theextent any Lender shall not have made its full amount available to the Agent inimmediately available funds and the Agent in such circumstances has madeavailable to the Borrower such amount, that Lender shall on the next BusinessDay following the date of such Borrowing make such amount available to theAgent, together with interest at the Federal Funds Rate for and determined asof each day during such period.  A noticeof the Agent submitted to any Lender with respect to amounts owing under thissubsection 1.11(b) shall be conclusive, absent manifest error.  If such amount is so made available, suchpayment to the Agent shall constitute such Lender’s Loan on the date ofBorrowing for all purposes of this Agreement. If such amount is not made available to the Agent on the next BusinessDay following the date of such Borrowing, the Agent shall notify the Borrowerof such failure to fund and, upon demand by the Agent, the Borrower shall paysuch amount to the Agent for the Agent’s account, together with interestthereon for each day elapsed since the date of such Borrowing, at a rate perannum equal to the interest rate applicable at the time to the Loans comprisingsuch Borrowing.

###  

### (c)                                  Thefailure of any Lender to make any Loan on any date of Borrowing shall notrelieve any other Lender of any obligation hereunder to make a Loan on the dateof such Borrowing, but no Lender shall be responsible for the failure of anyother Lender to make the Loan to be made by such other Lender on the date of anyBorrowing.  Without limiting thegenerality of the foregoing, each Lender shall be obligated to fund itsCommitment Percentage of any Revolving Loan made after any acceleration of theObligations with respect to any draw on any Lender Letter of Credit or anypayment made under any Letter of Credit Participation Agreement.

 

13

----

 

### (d)                                 Providedthat such Lender has made all payments required to be made by it under thisAgreement, the Agent will pay to such Lender, by wire transfer to such Lender’saccount (as specified by such Lender on such Lender’s respective signature page tothis Agreement or the applicable Assignment and Acceptance) such Lender’sCommitment Percentage of principal, interest, Commitment Fees, CapEx CommitmentFees and Letter of Credit Participation Fees, in each instance, received by theAgent, promptly after the Agent’s receipt thereof.

###  

### (e)                                  Unlessthe Agent shall have received notice from the Borrower prior to the date onwhich any payment is due to the Lenders hereunder that the Borrower will notmake such payment in full as and when required hereunder, the Agent may assumethat the Borrower has made such payment in full to the Agent on such date inimmediately available funds and the Agent may (but shall not be so required),in reliance upon such assumption, cause to be distributed to each Lender onsuch due date an amount equal to the amount then due such Lender.  If the Agent pays an amount to a Lender underthis Agreement in the belief or expectation that a related payment has been orwill be received by the Agent from the Borrower and such related payment is notreceived by the Agent, the Agent shall be entitled to recover such amount fromsuch Lender, and each Lender shall repay to the Agent on demand such amount,together with interest thereon for each day from the date such amount isdistributed to such Lender until the date such Lender repays such amount to theAgent, at the Federal Funds Rate, without setoff, recoupment, counterclaim ordeduction of any kind.  If the Agentdetermines at any time that any amount received by the Agent under thisAgreement must be returned to the Borrower or paid to any other Person pursuantto any solvency, fraudulent conveyance or similar law or otherwise, then,notwithstanding any other term or condition of this Agreement, the Agent willnot be required to distribute any portion of such payment to any Lender.  In addition, each Lender will repay to theAgent on demand any portion of such amount that the Agent has distributed tosuch Lender, together with interest thereon at such rate, if any, as the Agentis required to pay to the Borrower or such other Person, without setoff,recoupment, counterclaim or deduction of any kind.

 

# ARTICLE II - CONDITIONS PRECEDENT

 

## 2.1                                 Conditionsto Effectiveness. The effectiveness of this Agreement and the obligation of each Lender tomake Loans and of the Agent to issue Lender Letters of Credit or Letter ofCredit Participation Agreements hereunder are subject to the condition that theAgent shall have received on or before the Restatement Effective Date all ofthe following, in form and substance reasonably satisfactory to the Agent andeach Lender and (except for the Notes and any instruments or documents whichare Pledged Collateral) in sufficient counterparts for each Lender, dulyexecuted by all parties thereto:

##  

### (a)                                  CreditAgreement and Notes.  This Agreement executed by the Borrower, theAgent and each of the Lenders, and the Notes executed by the Borrower;

 

14

----

 

### (b)                                 Secretary’sCertificates; Resolutions; Incumbency.  A certificate of the Secretary or AssistantSecretary of the Borrower and each Subsidiary of the Borrower which is a partyto any Loan Document, certifying:

###  

#### (i)                                     the names and true signatures of the officers of the Borrower andeach such Subsidiary authorized to execute, deliver and perform, as applicable,this Agreement, and all other Loan Documents to be delivered hereunder; and

####  

#### (ii)                                  copies of the resolutions of the board of directors or othergoverning body of the Borrower and each such Subsidiary approving andauthorizing the execution, delivery and performance, as applicable, by theBorrower or such Subsidiary of this Agreement and the other Loan Documents tobe executed or delivered by it hereunder;

####  

### (c)                                  OrganizationDocuments and Good Standing.  Each of the following documents:

###  

#### (i)                                     the Organization Documents of the Borrower and each of itsSubsidiaries, as such Organization Documents are in effect on the RestatementEffective Date, certified by the Secretary of State (or similar, applicableGovernmental Authority) of the state of incorporation or formation of theBorrower or such Subsidiary as of a recent date, if and as applicable, allcertified by the Secretary or Assistant Secretary of the Borrower or suchSubsidiary as of the Restatement Effective Date; and

####  

#### (ii)                                  a good standing certificate for the Borrower and each of itsSubsidiaries from the Secretary of State (or similar, applicable Governmental Authority)of its state of incorporation or formation, as applicable, and each state wherethe Borrower or such Subsidiary is qualified to do business as a foreign entityas of a recent date;

####  

### (d)                                 CollateralDocuments. The Collateral Documents, executed by the Borrower and each of itsSubsidiaries who are a party thereto in appropriate form for recording, wherenecessary, together with the following, to the extent not previously deliveredto the Agent under the Original Credit Agreement:

###  

#### (i)                                     acknowledgment copies of all uniform commercial code financingstatements filed, registered or recorded to perfect the security interests ofthe Agent, for the benefit of the Agent and the Lenders, granted pursuant tothe Collateral Documents, or other evidence reasonably satisfactory to theAgent that there has been filed, registered or recorded all financingstatements and other filings, registrations and recordings reasonably necessaryand advisable to perfect the Liens of the Agent, for the benefit of the Agentand the Lenders, granted pursuant to the Collateral Documents, in accordancewith applicable law;

####  

#### (ii)                                  uniform commercial code financing statement, federal and state taxlien, pending litigation and judgment searches as the Agent shall havereasonably requested of the Borrower, each of its Subsidiaries and such otherPersons as the Agent may request, and such termination statements, releases orother documents as may be reasonably necessary to confirm that the Collateralis subject to no other Liens in favor of any Persons (other than PermittedLiens);

 

15

----

 

#### (iii)                               all certificates and instruments representing the PledgedCollateral, irrevocable proxies and stock transfer powers executed in blank orother executed endorsements reasonably satisfactory to the Agent, withsignatures guaranteed as the Agent may require;

####  

#### (iv)                              evidence that all other actions reasonably necessary or, in thereasonable opinion of the Agent, desirable to perfect and protect the Lienscreated by the Collateral Documents have been taken;

####  

#### (v)                                 funds sufficient to pay any filing or recording tax or fee inconnection with any and all uniform commercial code financing statements and,if applicable, the Mortgages or amendments thereto, all title insurancepremiums, documentary stamp or intangible taxes, recording fees and mortgagetaxes payable in connection with the recording of any Mortgage or filing of anyuniform commercial code financing statements or the issuance of the titleinsurance policies (whether due on the Restatement Effective Date or in thefuture) including sums due in connection with any future advances;

####  

#### (vi)                              with respect to each parcel of real Property in respect of whichthere is delivered by the Borrower or any of its Subsidiaries a Mortgage, anA.L.T.A. mortgagee policy of title insurance (or, with respect to mortgageepolicies of title insurance delivered in connection with the Original CreditAgreement, date down endorsements), or a binder issued by a title insurancecompany reasonably satisfactory to the Agent insuring (or undertaking toinsure, in the case of a binder) that the Mortgage creates and constitutes avalid first Lien against such real Property in favor of the Agent, for thebenefit of Agent and the Lenders, in an amount and subject only to exceptionsreasonably acceptable to the Agent, with such endorsements and affirmativeinsurance as the Agent may reasonably request;

####  

#### (vii)                           if required by the Agent, flood insurance and earthquake insuranceon terms satisfactory to the Agent;

####  

#### (viii)                        if required by the Agent, the most recent A.L.T.A. surveys andsurveyor’s certifications certified to the Agent as to all real Property inrespect of which there is delivered a Mortgage by the Borrower or any of itsSubsidiaries, each in form and substance reasonably satisfactory to the Agent;and

####  

#### (ix)                                such consents, estoppels, subordination agreements and otherdocuments and instruments executed by landlords, tenants and other Personsparty to material contracts relating to any Collateral as to which the Agentshall be granted a Lien for the benefit of Agent and the Lenders, as reasonablyrequested by the Agent;

####  

### (e)                                  LegalOpinions. Such opinions of counsel to the Borrower and its Subsidiaries, in eachinstance addressed to the Agent and the Lenders, in form and substancereasonably satisfactory to Agent;

 

16

----

 

### (f)                                    Payment of Fees.  Evidence reasonably acceptable to it that theBorrower shall have paid all accrued and unpaid fees, costs and expenses to theextent then due and payable on the Restatement Effective Date, together withAttorney Costs of the Agent;

###  

### (g)                                 Certificate.  A certificate signed onbehalf of the Borrower by a Responsible Officer, dated as of the RestatementEffective Date, stating that:

###  

#### (i)                                     the representations and warranties contained in Article IIIhereof are true and correct in all material respects on and as of such date, asthough made on and as of such date;

####  

#### (ii)                                  no Default or Event of Default exists or would result from theBorrowing or issuance of the Lender Letters of Credit or Letter of CreditParticipation Agreements to be made on the Restatement Effective Date or fromthe consummation of any of the other transactions contemplated hereby; and

####  

#### (iii)                               there has occurred since December 31, 2004 no event orcircumstance that has resulted or would reasonably be expected to result in (A) aMaterial Adverse Effect or (B) a material adverse change in, or a materialadverse effect upon, the prospects of the Borrower or the Borrower and itsSubsidiaries taken as a whole;

####  

### (h)                                 FinancialStatements. Copies of all of the financial statements of the Borrower and itsSubsidiaries referred to in Section 3.11, certified on behalf of theBorrower by a Responsible Officer;

###  

### (i)                                     Insurance Policies.  Standard lenders’ loss payable and otherendorsements in favor of the Agent with respect to the insurance policies orother instruments or documents evidencing insurance coverage on the Property ofthe Borrower in accordance with Section 4.6;

###  

### (j)                                     Borrowing Base Certificate.  A duly completed Borrowing Base Certificatesetting forth the “Borrowing Base” as of July 31, 2005.  Not more than $10,000,000 in Revolving Loansshall be outstanding on the Restatement Effective Date, and after giving effectto the funding of the Loans to be made on the Restatement Effective Date, theMaximum Revolving Loan Balance shall exceed the outstanding principal balanceof Revolving Loans by not less than $30,000,000;

###  

### (k)                                  HighYield Unsecured Indebtedness.  Evidence reasonably satisfactory to it thatno more than $120,000,000 in stated principal amount of High Yield UnsecuredIndebtedness is outstanding;

###  

### (l)                                     EBITDA. Evidence reasonably satisfactoryto it demonstrating that EBITDA (with such adjustments as the Agent mayreasonably approve) of the Borrower and its Subsidiaries for the twelve (12)month period ended July 31, 2005 was at least $33,500,000;

 

### (m)                               Projections.  Projections in form andsubstance satisfactory to the Agent for the Borrower and its Subsidiaries forthe period from 2005 through 2008, including projections on a quarter byquarter basis for the twelve calendar months immediately following theRestatement

 

17

----

 

### EffectiveDate and delivery of actual results for the most recent twelve calendar monthperiod prior to the Restatement Effective Date for which financial statementsare available; and

###  

### (n)                                 OtherDocuments. Such other approvals, opinions, documents or materials as the Agent mayreasonably request.

###  

## 2.2                                 Conditionsto All Borrowings. The obligation of each Lender to make any Loan and of the Agent to issueany Lender Letter of Credit or Letter of Credit Participation Agreement, or tocontinue a Loan as, or convert any Loan to, a LIBOR Rate Loan, is subject tothe satisfaction of the following conditions precedent on the relevantBorrowing date, continuation date or Conversion Date:

##  

### (a)                                  Noticeof Borrowing or Continuation/Conversion.  The Agent shall have received (with, in thecase of the Loans to be made on the Restatement Effective Date only, a copy foreach Lender) a Notice of Borrowing or a Notice of Continuation/Conversion, asapplicable, in accordance with Section 1.5 or Section 1.6;

###  

### (b)                                 Representationsand Warranties. The representations and warranties contained in this Agreement that aremade by the Borrower and the representations and warranties contained in theother Loan Documents and in the Related Agreements that are made by theBorrower and each of its Subsidiaries party thereto shall be true and correctin all material respects on and as of such Borrowing date, continuation date orConversion Date with the same effect as if made on and as of such Borrowingdate, continuation date or Conversion Date (except to the extent such representationsand warranties (i) expressly refer to an earlier date, in which case theyshall be true and correct as of such earlier date, (ii) are not true andcorrect due to events or conditions, the occurrence or existence of which arenot prohibited by this Agreement or the other Loan Documents and which do not,in and of themselves, constitute a Default or an Event of Default, or (iii) arenot true and correct as a result of disclosures made in writing to, andapproved by, the Agent and Lenders in connection with Permitted Acquisitions);

###  

### (c)                                  NoExisting Default. No Default or Event of Default shall exist or shall result from suchBorrowing or continuation or conversion; and

###  

### (d)                                 PermittedAcquisitions. To the extent the proceeds of any Loan are used to finance a PermittedAcquisition, Borrower shall have complied with the conditions included in Section 2.3and the definition of “Permitted Acquisition” contained in Section 11.1hereof on or prior to the disbursement of such Loan.

###  

Each Notice of Borrowing and Notice ofContinuation/Conversion submitted by the Borrower hereunder shall constitute arepresentation and warranty by the Borrower hereunder, as of the date of eachsuch notice or application and as of the date of each Borrowing or continuationor conversion, as applicable, that the conditions in Section 2.2 aresatisfied.

 

## 2.3                                 Conditionsto Certain Loans and Acquisitions.  The consummation of any Permitted Acquisitionby any Subsidiaries of the Borrower and, in the event the proceeds of the RevolvingLoan are to be used to finance all or a portion of the purchase price of aPermitted Acquisition, the obligations of each Lender to make such Loan, ineach case shall be subject to the satisfaction of the following conditionsprecedent on the relevant Borrowing date:

 

18

----

 

### (a)                                  Evidenceof Perfected First Priority Security Interest.  With respect to the Target acquired, andprior to or simultaneously with the consummation of such Acquisition and thefunding of such Loan, the Agent shall have been granted, for the benefit ofAgent and the Lenders, a first priority Lien on and security interest in suchTarget thereof, subject only to Permitted Liens, and shall have received,without limitation, (i) the items described in subsection 2.1(d)(ii) andSection 4.12, and (ii) duly executed uniform commercial codefinancing statements or amendments to existing financing statements withrespect to such Target, in form and substance reasonably satisfactory to theAgent and which, upon filing, shall perfect the security interest of the Agent,for the benefit of Agent and the Lenders, in such Property to the extent suchsecurity interest can be perfected by filing such financing statements.  In the event real Property is being acquiredin connection with such Acquisition, prior to or simultaneously with thefunding of such Loan, the Agent shall have received (x) to the extent notencumbered with a Lien permitted under subsection 5.1(h), a fully executedMortgage, in form and substance reasonably satisfactory to the Agent togetherwith an A.L.T.A. lender’s title insurance policy issued by a title insurerreasonably satisfactory to the Agent, in form and substance and in an amountreasonably satisfactory to the Agent insuring that the Mortgage is a valid andenforceable first priority Lien on the respective Property, free and clear ofall defects, encumbrances and Liens other than Permitted Liens, (y) to theextent not encumbered with a Lien permitted under subsection 5.1(h), thencurrent A.L.T.A. surveys, certified to the Agent by a licensed surveyorsufficient to allow the issuer of the lender’s title insurance policy to issuesuch policy without a survey exception and (z) an environmental site assessmentprepared by a qualified firm reasonably acceptable to the Agent and theRequired Lenders, in form and substance reasonably satisfactory to the Agentand the Required Lenders.

###  

### (b)                                 Approval.  Such Acquisition is aPermitted Acquisition.

##  

## 2.4                                 Conditionsto CapEx Loan Borrowings.  The obligation of each Lender to make a CapExLoan is subject to the satisfaction of each of the following conditionsprecedent:

##  

### (a)                                  General.  The Capital Expenditure forwhich the proceeds of such CapEx Loan will be used shall be made to expand thecurrent operations of the Borrower and its Subsidiaries in compliance with theprovisions of Section 5.12; provided, that proceeds of CapEx Loansshall not be used to purchase Accounts or Inventory.  The Borrower may request and, subject tocompliance with the provisions of this Section 2.4 and of Section 2.2,the Lenders shall make, CapEx Loans in advance of the Borrower making theapplicable Capital Expenditure for which the proceeds of such CapEx Loan shallbe used.

###  

### (b)                                 Evidenceof Perfected First Priority Security Interest.  Prior to or simultaneously with the making ofany Capital Expenditure and the funding of such CapEx Loan, the Agent shallhave been granted, for the benefit of Agent and the Lenders, a first priorityLien on and security interest in any Property acquired in connection therewith,subject only to Permitted Liens, and shall have received, without limitation, (i) theitems described in subsection 2.1(d)(ii) and Section 4.12, and (ii) dulyexecuted uniform commercial code financing statements or amendments to existingfinancing statements with respect to any such Property, in form and substancereasonably satisfactory to the Agent and which, upon filing, shall perfect thesecurity interest of the Agent, for the benefit of Agent and the Lenders, insuch Property to the extent such security interest can be perfected by filingsuch financing statements.  In the eventreal

 

19

----

 

### Propertyis being acquired in connection with the making of such Capital Expenditure,prior to or simultaneously with the funding of such Loan, the Agent shall havereceived (x) to the extent not encumbered with a Lien permitted under subsection 5.1(h),a fully executed Mortgage, in form and substance reasonably satisfactory to theAgent together with an A.L.T.A. lender’s title insurance policy issued by atitle insurer reasonably satisfactory to the Agent, in form and substance andin an amount reasonably satisfactory to the Agent insuring that the Mortgage isa valid and enforceable first priority Lien on the respective Property, freeand clear of all defects, encumbrances and Liens other than Permitted Liens,(y) to the extent not encumbered with a Lien permitted under subsection 5.1(h),then current A.L.T.A. surveys, certified to the Agent by a licensed surveyorsufficient to allow the issuer of the lender’s title insurance policy to issuesuch policy without a survey exception and (z) an environmental site assessmentprepared by a qualified firm reasonably acceptable to the Agent and theRequired Lenders, in form and substance reasonably satisfactory to the Agentand the Required Lenders; provided, however, that with respect toany such acquisition of real Property located in Mercer County, Pennsylvaniaoccurring on or prior to October 7, 2005, the foregoing deliveries shallbe made no later than ten (10) Business Days following the date(s) ofacquisition of such real Property.

###  

# ARTICLE III - REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to theAgent and each Lender that the following are, and after giving effect to theRelated Transactions will be, true, correct and complete:

 

## 3.1                                 CorporateExistence and Power.  The Borrower and each of its Subsidiaries:

##  

### (a)                                  is acorporation, limited liability company or limited partnership, as applicable,duly organized, validly existing and in good standing under the laws of thejurisdiction of its incorporation or formation, as applicable;

###  

### (b)                                 hasthe power and authority and all governmental licenses, authorizations, consentsand approvals to own its assets, carry on its business and execute, deliver,and perform its obligations under, the Loan Documents and the RelatedAgreements to which it is a party;

###  

### (c)                                  isduly qualified as a foreign corporation, limited liability company or limitedpartnership, as applicable, and licensed and in good standing, under the lawsof each jurisdiction where its ownership, lease or operation of Property or theconduct of its business requires such qualification or license; and

###  

### (d)                                 is incompliance with all Requirements of Law;

###  

except, in each case referred to in clause (c) orclause (d), to the extent that the failure to do so would not reasonably beexpected to have, either individually or in the aggregate, a Material AdverseEffect.

 

20

----

 

## 3.2                                 CorporateAuthorization; No Contravention.

##  

### (a)                                  Theexecution, delivery and performance by the Borrower of this Agreement, and theBorrower and its Subsidiaries of any other Loan Document and Related Agreementto which any of such Persons is party, have been duly authorized by allnecessary action, and do not and will not:

###  

#### (i)                                     contravene the terms of any of such Person’s Organization Documents;

####  

#### (ii)                                  conflict with or result in any material breach or contravention of,or result in the creation of any Lien under, any document evidencing anymaterial Contractual Obligation to which such Person is a party or any order,injunction, writ or decree of any Governmental Authority to which such Personor its Property is subject; or

####  

#### (iii)                               violate any material Requirement of Law in any material respect.

####  

### (b)                                 Schedule 3.2 sets forth the authorized equity securities of the Borrower andeach of its Subsidiaries.  All issued andoutstanding equity securities of the Borrower and each of its Subsidiaries areduly authorized and validly issued, fully paid, non-assessable, and free andclear of all Liens other than, with respect to the equity securities of theBorrower’s Subsidiaries, those in favor of the Agent, for the benefit of theAgent and Lenders, and such securities were issued in compliance with allapplicable state and federal laws concerning the issuance of securities.  All of the issued and outstanding equitysecurities of Woodcraft are owned by the Borrower.  All of the issued and outstanding equitysecurities of Primewood, Brentwood and Grand Valley Acquisition Sub are ownedby Woodcraft.  All of the issued andoutstanding equity securities of Borrower are owned by the Persons and in theamounts set forth on Schedule 3.2. Except as set forth on Schedule 3.2, there are nopre-emptive or other outstanding rights, options, warrants, conversion rightsor other similar agreements or understandings for the purchase or acquisitionof any shares of capital stock or other securities of any such entity.

###  

## 3.3                                 GovernmentalAuthorization. No approval, consent, exemption, authorization, or other action by, ornotice to, or filing with, any Governmental Authority is necessary or requiredin connection with the execution, delivery or performance by, or enforcementagainst, the Borrower or any of its Subsidiaries of this Agreement, any otherLoan Document or any Related Agreement except (a) for recordings andfilings in connection with the Liens granted to the Agent under the CollateralDocuments, (b) those obtained or made on or prior to the RestatementEffective Date and (c) in the case of any Related Agreement, those which,if not obtained or made, would not reasonably be expected to have, eitherindividually or in the aggregate, a Material Adverse Effect.

##  

## 3.4                                 BindingEffect.  ThisAgreement and each other Loan Document and Related Agreement to which theBorrower or any of its Subsidiaries is a party constitutes the legal, valid andbinding obligations of the Borrower and each such Subsidiary, enforceableagainst such Person in accordance with their respective terms, except asenforceability may be limited by applicable bankruptcy, insolvency, or similarlaws affecting the enforcement of creditors’ rights generally or by equitableprinciples relating to enforceability.

 

21

----

 

## 3.5                                 Litigation.  Except as specificallydisclosed in Schedule 3.5, there are no actions, suits,proceedings, claims or disputes pending, or to the best knowledge of theBorrower, threatened or contemplated, at law, in equity, in arbitration orbefore any Governmental Authority, against the Borrower, any of itsSubsidiaries or any of their respective Property which:

##  

### (a)                                  purportto affect or pertain to this Agreement, any other Loan Document or any RelatedAgreement, or any of the transactions contemplated hereby or thereby; or

###  

### (b)                                 ifdetermined adversely to the Borrower or any of its Subsidiaries, couldreasonably be expected to result in equitable relief or monetary judgment(s),individually or in the aggregate, in excess of $1,500,000.

###  

No injunction, writ, temporary restrainingorder or any order of any nature has been issued by any court or otherGovernmental Authority purporting to enjoin or restrain the execution, deliveryor performance of this Agreement, any other Loan Document or any RelatedAgreement, or directing that the transactions provided for herein or thereinnot be consummated as herein or therein provided.

 

## 3.6                                 NoDefault.  NoDefault or Event of Default exists or would result from the incurring of anyObligations by the Borrower or the grant or perfection of the Agent’s Liens onthe Collateral or the consummation of the Related Transactions.  Neither the Borrower nor any of itsSubsidiaries is in default under or with respect to any Contractual Obligationin any respect which, individually or together with all such defaults, wouldreasonably be expected to have a Material Adverse Effect or that would, if suchdefault had occurred after the Restatement Effective Date, create an Event ofDefault under subsection 7.1(e).

##  

## 3.7                                 ERISA Compliance.

##  

### (a)                                  Schedule 3.7 lists all Qualified Plans and Multiemployer Plans.  The Borrower and each of its Subsidiaries isin compliance in all material respects with all requirements of each Plan, andeach Plan complies in all material respects, and is operated in compliance inall material respects, with all applicable provisions of law.  The Borrower is not aware, after due inquiry,of any item of non-compliance which could reasonably be expected to result inthe loss of Plan qualification or tax-exempt status, or give rise to a materialexcise tax or other penalty imposed by a Governmental Authority.  No material proceeding, claim, lawsuit and/orinvestigation is pending concerning any Plan. All required contributions have been and will be made in accordance withthe provisions of each Qualified Plan and Multiemployer Plan, and with respectto the Borrower or any ERISA Affiliate, there are, have been and will be no materialUnfunded Pension Liabilities or Withdrawal Liabilities.

###  

### (b)                                 NoERISA Event has occurred or is expected to occur with respect to any QualifiedPlan, Multiemployer Plan or Plan.

###  

### (c)                                  Membersof the Controlled Group currently comply and have complied in all materialrespects with the notice and continuation coverage requirements of Section 4980Bof the Code.

 

22

----

 

## 3.8                                 Useof Proceeds; Margin Regulations.  The proceeds of the Loans are intended to beand shall be used solely for the purposes set forth in and permitted by Section 4.10,and are intended to be and shall be used in compliance with Section 5.8.  Neither the Borrower nor any of itsSubsidiaries is generally engaged in the business of purchasing or sellingMargin Stock or extending credit for the purpose of purchasing or carryingMargin Stock.  Proceeds of the Loansshall not be used for the purpose of purchasing or carrying Margin Stock.

##  

## 3.9                                 Titleto Property. The Borrower and each of its Subsidiaries have good record andmarketable title in fee simple to, or valid leasehold interests in, all realProperty necessary or used in the ordinary conduct of their respectivebusinesses, except for Permitted Liens.  Noneof the Property of the Borrower or any of its Subsidiaries is subject to anyLiens, other than Permitted Liens.

##  

## 3.10                           Taxes.  The Borrower and itsSubsidiaries have filed all Federal and other material tax returns and reportsrequired to be filed, and have paid all Federal and other material taxes,assessments, fees and other governmental charges levied or imposed upon them ortheir Property, income or assets otherwise due and payable, except those whichare being contested in good faith by appropriate proceedings diligentlyprosecuted and for which adequate reserves have been provided in accordancewith GAAP and no notice of Lien has been filed or recorded. There is noproposed tax assessment against the Borrower or any of its Subsidiaries whichwould, if the assessment were made, either individually or in the aggregate,have a Material Adverse Effect.

##  

## 3.11                           Financial Condition.

##  

### (a)                                  Eachof (i) the audited consolidated balance sheet of the Borrower and itsSubsidiaries for its 2004 fiscal year, and the related audited consolidatedstatements of income or operations, shareholders’ equity and cash flows for thefiscal year ended on that date and (ii) the unaudited interim consolidatedbalance sheet of the Borrower and its Subsidiaries dated June 30, 2005 andthe related unaudited consolidated statements of income, shareholders’ equityand cash flows for the six (6) months then ended:

###  

(x)                                   wereprepared in accordance with GAAP consistently applied throughout the respectiveperiods covered thereby, except as otherwise expressly noted therein, subjectto, in the case of the unaudited interim financial statements, normal year-endadjustments and the lack of footnote disclosures; and

 

(y)                                 presentfairly in all material respects the consolidated financial condition ofBorrower and its Subsidiaries as of the dates thereof and results of operationsfor the periods covered thereby.

 

### (b)                                 SinceDecember 31, 2004, there has been no Material Adverse Effect.

###  

### (c)                                  Borrowerand its Subsidiaries have no Indebtedness other than Indebtedness permittedpursuant to Section 5.5 and have no Contingent Obligations other thanContingent Obligations permitted pursuant to Section 5.9.

 

23

----

 

## 3.12                           Environmental Matters.

##  

### (a)                                  Theongoing operations of the Borrower and each of its Subsidiaries comply in allrespects with all Environmental Laws, except those for which non-compliancewhich would not (if enforced in accordance with applicable law) reasonably beexpected to result in, either individually or in the aggregate, a Material AdverseEffect.

###  

### (b)                                 TheBorrower and each of its Subsidiaries have obtained all licenses, permits,authorizations and registrations required under any Environmental Law (“EnvironmentalPermits”) and necessary for their respective Ordinary Course of Business, allsuch Environmental Permits are in good standing, and the Borrower and each ofits Subsidiaries are in compliance with all material terms and conditions ofsuch Environmental Permits, except where the failure to obtain, to maintain ingood standing, or to be in compliance with such Environmental Permits would notreasonably be expected to result in material liability to the Borrower or anyof its Subsidiaries and could not reasonably be expected to result in, eitherindividually or in the aggregate, a Material Adverse Effect.

###  

### (c)                                  Noneof the Borrower, any of its Subsidiaries or any of their respective presentProperty or operations, is subject to any outstanding written order from oragreement with any Governmental Authority, nor subject to any judicial ordocketed administrative proceeding, respecting any Environmental Law,Environmental Claim or Hazardous Material.

###  

### (d)                                 Thereare no Hazardous Materials or other conditions or circumstances existing withrespect to any Property, or arising from operations prior to the RestatementEffective Date, of the Borrower or any of its Subsidiaries that wouldreasonably be expected to result, either individually or in the aggregate, in aMaterial Adverse Effect.  In addition,neither the Borrower nor any of its Subsidiaries has any underground storagetanks (i) that are not properly registered or permitted under applicableEnvironmental Laws, or (ii) that are leaking or disposing of HazardousMaterials.

##  

## 3.13                           LoanDocuments. All representations and warranties of the Borrower, its Subsidiaries andany other party to any Loan Document (other than the Agent and/or any Lender)contained in the Loan Documents are true and correct in all material respects.

##  

## 3.14                           RegulatedEntities. None of the Borrower, any Person controlling the Borrower, or anySubsidiary of the Borrower, is (a) an “investment company” within themeaning of the Investment Company Act of 1940; or (b) subject toregulation under the Public Utility Holding Company Act of 1935, the FederalPower Act, the Interstate Commerce Act, any state public utilities code, or anyother Federal or state statute or regulation limiting its ability to incurIndebtedness.

##  

## 3.15                           Solvency.  The Borrower and each ofits Subsidiaries, individually, is, and the Borrower and each of itsSubsidiaries, on a consolidated basis, are, Solvent.

##  

## 3.16                           LaborRelations. There are no strikes, lockouts or other labor disputes against theBorrower or any of its Subsidiaries, or, to the best of the Borrower’sknowledge, threatened against or affecting the Borrower or any of itsSubsidiaries, in any case which would reasonably be expected to have, eitherindividually or in the aggregate, a Material Adverse Effect and no

 

24

----

 

## significantunfair labor practice complaint is pending against the Borrower or any of itsSubsidiaries or, to the best knowledge of the Borrower, threatened against anyof them before any Governmental Authority in any case which would reasonably beexpected to have, either individually or in the aggregate, a Material AdverseEffect.

##  

## 3.17                           Copyrights,Patents, Trademarks and Licenses, etc.  Schedule 3.17 identifies allUnited States and foreign patents, trademarks, material service marks, materialtrade names and registered copyrights, and all registrations and applicationsfor registration thereof and all licenses thereof, owned or held by theBorrower and its Subsidiaries on the Restatement Effective Date after givingeffect to the Related Transactions, and identifies the jurisdictions in whichsuch registrations and applications have been filed.  Except as otherwise disclosed in Schedule 3.17,as of the Restatement Effective Date, the Borrower and its Subsidiaries are thesole beneficial owners of, or have the right to use, free from anyrestrictions, claims, rights encumbrances or burdens, all intellectualproperty, including the intellectual property identified on Schedule 3.17,and all other processes, designs, formulas, computer programs, computersoftware packages, trade secrets, inventions, product manufacturinginstructions, technology, research and development, know-how and all otherintellectual property that are necessary for the operation of the Borrower’sand its Subsidiaries’ businesses as being operated on the Restatement EffectiveDate after giving effect to the Related Transactions.  Each patent, trademark, service mark, tradename, copyright and license listed on Schedule 3.17 is in fullforce and effect except to the extent the failure to be in effect will not andwould not reasonably be expected to have, either individually or in theaggregate, a Material Adverse Effect. Except as set forth in Schedule 3.17, to the best knowledgeof the Borrower, as of the Restatement Effective Date (a) none of thepresent or contemplated products or operations of the Borrower or itsSubsidiaries infringes any patent, trademark, service mark, trade name,copyright, license of intellectual property or other right owned by any otherPerson, and (b) there is no pending or threatened claim or litigationagainst or affecting the Borrower or any of its Subsidiaries contesting theright of any of them to manufacture, process, sell or use any such product orto engage in any such operation except for claims and/or litigation which wouldnot reasonably be expected to have a Material Adverse Effect.  None of the trademark registrations set forthon Schedule 3.17 is an “intent-to-use” registration.

##  

## 3.18                           Subsidiaries.  The Borrower has noSubsidiaries or equity investments in any other corporation or entity otherthan those specifically disclosed in Schedule 3.2.

##  

## 3.19                           Brokers’Fees; Transaction Fees.  Neither the Borrower nor any of itsSubsidiaries has any obligation to any Person in respect of any finder’s,broker’s or investment banker’s fee in connection with the transactionscontemplated hereby.

##  

## 3.20                           Insurance.  The Borrower and each ofits Subsidiaries and its Property are insured with financially sound andreputable insurance companies which are not Affiliates of the Borrower, in suchamounts, with such deductibles and covering such risks as are customarilycarried by companies engaged in similar businesses and owning similar Propertyin localities where the Borrower or its Subsidiaries operate.  A true and complete listing of such insurance,including issuers, coverages and deductibles, has been provided to the Agent.

 

25

----

 

## 3.21                           FullDisclosure. None of the representations or warranties made by the Borrower or any ofits Subsidiaries in the Loan Documents as of the date such representations andwarranties are made or deemed made, and none of the statements contained ineach exhibit, report, statement or certificate furnished by or on behalf of theBorrower or any of its Subsidiaries in connection with the Loan Documents(including the offering and disclosure materials, if any, delivered by or onbehalf of the Borrower to the Lenders prior to the Restatement Effective Date),contains any untrue statement of a material fact or omits any material factrequired to be stated therein or necessary to make the statements made therein,in light of the circumstances under which they are made, not misleading as ofthe time when made or delivered.

##  

## 3.22                           Representationsand Warranties Incorporated from Related Agreements.  Each of the representations and warrantiesmade in each of the Related Agreements by the Borrower and its Subsidiariesand, to the knowledge of the Borrower, by each of the other parties thereto wastrue and correct in all material respects as of the date such representationsand warranties were made, except to the extent that such representations orwarranties relate to a specific date, in which case such representations andwarranties were true as of such earlier date, and such representations andwarranties are hereby incorporated herein by reference with the same effect asthough set forth in their entirety herein, as qualified therein.

##  

## 3.23                           Activitiesof Borrower. The Borrower was formed for the sole purpose of acquiring and holding allof the outstanding equity securities of Woodcraft and, except for theforegoing, the Borrower has conducted no business activities, entered into notransactions, incurred no liability and taken no actions, directly orindirectly, that would have violated Section 5.12 of this Agreement.

##  

## 3.24                           HighYield Unsecured Documents.  The Obligations are permitted and constitute “SeniorIndebtedness” under the terms of the High Yield Unsecured Documents.  The execution, delivery and performance bythe Borrower of this Agreement, and by the Borrower and its Subsidiaries of anyother Loan Document and Related Agreement to which such Person is party, do notand will not conflict with or result in any material breach or contraventionof, or result in the creation of any Lien or default or event of default under,any of the High Yield Unsecured Documents. None of the High Yield Unsecured Documents prohibits or otherwiserestricts in any manner the making of any payments hereunder by the Borrower orany of its Subsidiaries.  The High YieldUnsecured Offering was made in compliance with all Requirements of Law,including, without limitation, the Trust Indenture Act of 1939 (15 U.S.C.§§ 77aaa-77bbbb), as amended.

##  

## 3.25                           ForeignAssets Control Regulations and Anti-Money Laundering.

##  

### (a)                                  OFAC.  Neither Borrower nor anySubsidiary of Borrower (i) is a person whose property or interest inproperty is blocked or subject to blocking pursuant to Section 1 ofExecutive Order 13224 of September 23, 2001 Blocking Property and ProhibitingTransactions With Persons Who Commit, Threaten to Commit, or Support Terrorism(66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactionsprohibited by Section 2 of such executive order, or is otherwiseassociated with any such person in any manner violative of Section 2, or (iii) isa person on the list of Specially Designated Nationals and Blocked Persons orsubject to

 

26

----

 

### thelimitations or prohibitions under any other U.S. Department of Treasury’sOffice of Foreign Assets Control regulation or executive order.

###  

### (b)                                 PatriotAct. Borrower and each of its Subsidiaries are in compliance, in all materialrespects, with the Patriot Act.  No partof the proceeds of the Loans will be used, directly or indirectly, for anypayments to any governmental official or employee, political party, official ofa political party, candidate for political office, or anyone else acting in anofficial capacity, in order to obtain, retain or direct business or obtain anyimproper advantage, in violation of the United States Foreign Corrupt PracticesAct of 1977, as amended.

###  

# ARTICLE IV - AFFIRMATIVE COVENANTS

 

The Borrower covenants and agrees that, solong as any Lender shall have any Commitment hereunder, or any Loan or otherObligation (other than contingent indemnification Obligations to the extent noclaim giving rise thereto has been asserted) shall remain unpaid orunsatisfied, unless the Required Lenders waive compliance in writing:

 

## 4.1                                 FinancialStatements. The Borrower shall maintain, and shall cause each of its Subsidiaries tomaintain, a system of accounting established and administered in accordancewith sound business practices to permit the preparation of financial statementsin conformity with GAAP (provided that quarterly financial statementsshall not be required to have footnote disclosure and shall be subject tonormal year-end adjustments).  TheBorrower shall deliver to the Agent and each Lender in form and detailreasonably satisfactory to the Agent and the Required Lenders:

##  

### (a)                                  assoon as available, but not later than ninety (90) days after the end of eachfiscal year, a copy of the audited consolidated balance sheet of Borrower andits Subsidiaries as at the end of such year and the related consolidatedstatements of income or operations, shareholders’ equity and cash flows forsuch fiscal year, setting forth in each case in comparative form the figuresfor the previous fiscal year, and accompanied by the unqualified opinion of any“Big Four” or other nationally-recognized independent public accounting firmreasonably acceptable to the Agent which report shall state that suchconsolidated financial statements present fairly in all material respects thefinancial position for the periods indicated in conformity with GAAP applied ona basis consistent with prior years;

###  

### (b)                                 assoon as available, but not later than forty-five (45) days after the end ofeach fiscal quarter of each year, a copy of the unaudited consolidated andconsolidating balance sheets of Borrower and its Subsidiaries, and the relatedconsolidated and consolidating statements of income, shareholders’ equity andcash flows as of the end of such quarter and for the portion of the fiscal yearthen ended, all certified on behalf of the Borrower by an appropriateResponsible Officer of the Borrower as being complete and correct and fairlypresenting in all material respects, in accordance with GAAP, the financialposition and the results of operations of the Borrower and its Subsidiaries,subject to normal year-end adjustments and absence of footnote disclosure.

 

27

----

 

## 4.2                                 Certificates;Borrowing Base Certificates; Other Information.  The Borrower shall furnish to the Agent andeach Lender:

##  

### (a)                                  concurrentlywith the delivery of the annual financial statements referred to in subsection 4.1(a) above,a certificate of the independent certified public accountants reporting on suchfinancial statements stating that in making the examination necessary thereforno knowledge was obtained of any Default or Event of Default, except asspecified in such certificate;

###  

### (b)                                 concurrentlywith the delivery of the financial statements referred to in subsections 4.1(a) and4.1(b) above, a fully and properly completed Compliance Certificate in theform of Exhibit 4.2(b), certified on behalf of the Borrower by aResponsible Officer of the Borrower;

###  

### (c)                                  promptlyafter the same are sent, copies of all financial statements and materialreports which the Borrower sends to its shareholders or other equity holders,as applicable, generally; and promptly after the same are filed, copies of allfinancial statements and regular, periodic or special reports which theBorrower may make to, or file with, the Securities and Exchange Commission orany successor or similar Governmental Authority;

###  

### (d)                                 assoon as available and in any event within ten (10) Business Days after theend of each calendar month, as otherwise required under Section 5.2 and atsuch other times as the Agent may reasonably require, a Borrowing BaseCertificate, certified on behalf of the Borrower by a Responsible Officer ofthe Borrower, setting forth the “Borrowing Base” of the Borrower as at the endof the most-recently ended fiscal month or as at such other date as the Agentmay reasonably require;

###  

### (e)                                  (i) togetherwith each delivery of financial statements pursuant to subsection 4.1(a) andsubsection 4.1(b), (A) a management report, in reasonable detail,signed by the chief financial officer of the Borrower, describing theoperations and financial condition of the Borrower and its Subsidiaries for thequarter and the portion of the fiscal year then ended (or for the fiscal yearthen ended in the case of annual financial statements), it being understoodthat such report may be in the form of a “Management’s Discussion and Analysisof Financial Condition and Results of Operation”, as required to be deliveredpursuant to the High Yield Unsecured Indenture, and (B) until the later of(1) the date upon which each of the expansion projects described on Schedule 4.2(e) shallhave been completed and (2) June 30, 2007, an expansion CapitalExpenditure report, which report shall be in a form substantially similar tothat attached hereto as Schedule 4.2(e), and management discussionof the Capital Expenditures described in such report, in each case, inreasonable detail and signed by the chief financial officer of the Borrower,describing the expansion Capital Expenditures made by the Borrower and itsSubsidiaries for the quarter and the portion of the fiscal year then ended (orfor the fiscal year then ended in the case of annual financial statements), and(ii) together with each delivery of financial statements pursuant to subsection 4.1(b),a report setting forth in comparative form the corresponding figures for thecorresponding periods of the previous fiscal year and the corresponding figuresfrom the most recent projections for the current fiscal year delivered pursuantto subsection 4.2(g) and discussing the reasons for any significantvariations;

 

28

----

 

### (f)                                    uponthe request of the Agent, at any time if an Event of Default shall haveoccurred and be continuing but otherwise not more often than once a year, theBorrower will, at the Borrower’s expense, obtain and deliver to the Agent areport of an independent collateral auditor satisfactory to the Agent withrespect to the Accounts and Inventory, which report shall indicate whether ornot the information set forth in the Borrowing Base Certificate most recentlydelivered is accurate and complete in all material respects;

###  

### (g)                                 concurrentlywith delivery thereof to the Trustee, copies of any and all notices,certificates, statements, reports and other deliveries required to be madepursuant to Section 4.02 of the High Yield Unsecured Indenture, including,without limitation, all reports required to be filed pursuant to Sections 13and 15(d) of the Securities Exchange Act of 1934, as amended, and Section 4.14of the High Yield Unsecured Indenture, including, without limitation, allcompliance certificates required to be delivered pursuant thereto;

###  

### (h)                                 assoon as available and in any event no later than thirty (30) days after thelast day of each fiscal year of the Borrower, (i) projections of theBorrower’s and its Subsidiaries’ consolidated and consolidating financialperformance for the forthcoming fiscal year on a quarterly basis, whichprojections shall include balance sheets and statements of income, shareholders’equity and cash flows, and (ii) projections of the costs and expenses tobe incurred by the Borrower and its Subsidiaries in connection with CapitalExpenditures in the forthcoming fiscal year on a quarterly basis;

###  

### (i)                                     Intentionally Omitted;

###  

### (j)                                     promptlyupon receipt thereof, copies of any material reports submitted by the Borrower’scertified public accountants in connection with each annual, interim or specialaudit or review of any type of the financial statements or internal controlsystems of the Borrower made by such accountants, including any comment letterssubmitted by such accountants to management of the Borrower in connection withtheir services;

###  

### (k)                                  (i) onceduring the Term of this Agreement at the discretion of Agent at any time noDefault or Event of Default shall have occurred and be continuing, (ii) fromtime to time, if the Agent reasonably determines that obtaining appraisals isnecessary in order for the Agent or any Lender to comply with applicable lawsor regulations, and (iii) from time to time, and at any time if a Defaultor an Event of Default shall have occurred and be continuing, the Agent may, ormay require the Borrower to, in either case at the Borrower’s expense, obtainappraisals in form and substance and from appraisers reasonably satisfactory tothe Agent stating the then current fair market value of all or any portion ofthe real or personal property of the Borrower and any of its Subsidiaries; and

###  

### (l)                                     promptly,such additional business, financial, corporate affairs, perfection certificatesand other information as the Agent may from time to time reasonably request.

 

29

----

 

## 4.3                                 Notices.  The Borrower shall notifypromptly the Agent and each Lender of each of the following (and in no eventlater than three (3) Business Days after a Responsible Officer becomingaware thereof):

##  

### (a)                                  theoccurrence or existence of any Default or Event of Default, or any event orcircumstance that would reasonably be expected to result in a Default or Eventof Default;

###  

### (b)                                 anybreach or non-performance of, or any default under, any Contractual Obligationof the Borrower or any of its Subsidiaries, or any violation of, ornon-compliance with, any Requirement of Law, which would reasonably be expectedto result, either individually or in the aggregate, in a Material AdverseEffect, including a description of such breach, non-performance, default, violationor non-compliance and the steps, if any, the Borrower or any such Subsidiaryhas taken, is taking or proposes to take in respect thereof;

###  

### (c)                                  anydispute, litigation, investigation, proceeding or suspension which may exist atany time between the Borrower or any of its Subsidiaries and any GovernmentalAuthority which would reasonably be expected to result, either individually orin the aggregate, in a Material Adverse Effect;

###  

### (d)                                 thecommencement of, or any material development in, any litigation or proceedingaffecting the Borrower or any of its Subsidiaries in which: (i) the amountof damages claimed is $1,500,000 (or its equivalent in any other currency orcurrencies) or more, (ii) injunctive or similar relief is sought andwhich, if adversely determined, would reasonably be expected to have a MaterialAdverse Effect, or (iii) the relief sought is an injunction or other stayof the performance of this Agreement, any Loan Document or any RelatedAgreement;

###  

### (e)                                  anyof the following if the same would reasonably be expected to have, eitherindividually or in the aggregate, a Material Adverse Effect: (i) anyenforcement, cleanup, removal or other governmental or regulatory actionsinstituted, completed or threatened against the Borrower, any of its Subsidiariesor any of its Property pursuant to any applicable Environmental Laws, (ii) anyother Environmental Claims, and (iii) any environmental or similarcondition on any real property adjoining the Property of the Borrower or any ofits Subsidiaries that could reasonably be anticipated to cause the Borrower’sor any such Subsidiary’s Property or any part thereof to be subject to anymaterial restrictions on the ownership, occupancy, transferability or use ofsuch Property under any Environmental Laws;

###  

### (f)                                    anyof the following if the same would reasonably be expected to have, eitherindividually or in the aggregate, a Material Adverse Effect, together with acopy of any notice with respect to such event that may be required to be filedwith a Governmental Authority and any notice delivered by a GovernmentalAuthority to the Borrower or any member of its Controlled Group with respect tosuch event:

###  

#### (i)                                     an ERISA Event;

####  

#### (ii)                                  the adoption of any new Qualified Plan that is subject to Title IVof ERISA or Section 412 of the Code by any member of the Controlled Group;

 

30

----

 

#### (iii)                               the adoption of any amendment to a Qualified Plan that is subject toTitle IV of ERISA or Section 412 of the Code, if such amendment results ina material increase in benefits or unfunded liabilities; or

####  

#### (iv)                              the commencement of contributions by any member of the ControlledGroup to any Multiemployer Plan or any Qualified Plan that is subject to TitleIV of ERISA or Section 412 of the Code;

####  

### (g)                                 anyMaterial Adverse Effect subsequent to the date of the most recent auditedfinancial statements of the Borrower and its Subsidiaries delivered to theAgent and Lenders pursuant to this Agreement;

###  

### (h)                                 anymaterial change in accounting policies or financial reporting practices by theBorrower or any of its Subsidiaries;

###  

### (i)                                     anylabor controversy resulting in or threatening to result in any strike, workstoppage, boycott, shutdown or other labor disruption against or involving theBorrower or any of its Subsidiaries if the same would reasonably be expected tohave, either individually or in the aggregate, a Material Adverse Effect;

###  

### (j)                                     thecreation, establishment or acquisition of any Subsidiary or the issuance by theBorrower of any capital stock, warrant or similar agreement in respect thereof;

###  

### (k)                                  theoccurrence of a default, an event of default or a “Change of Control” under anyof the High Yield Unsecured Documents; and

###  

### (l)                                     promptlyfrom time to time, copies of any notices or other deliveries from time to timemade or received by the Borrower or any of its Subsidiaries under or pursuantto the Related Agreements, including, without limitation, any working capitalor other purchase price adjustments, and any indemnification claims and disbursementsof escrowed funds under any Related Agreement;

###  

Each notice pursuant to this Section shallbe accompanied by a written statement by a Responsible Officer of the Borrower,setting forth reasonable details of the occurrence referred to therein, andstating what action the Borrower proposes to take with respect thereto and atwhat time.  Each notice under subsection 4.3(a) shalldescribe with reasonable particularity any and all clauses or provisions ofthis Agreement or other Loan Document that have been breached or violated.

 

## 4.4                                 Preservationof Corporate Existence, Etc.  The Borrower shall, and shall cause each ofits Subsidiaries to:

##  

### (a)                                  preserveand maintain in full force and effect its organizational existence and goodstanding under the laws of its state or jurisdiction of incorporation,organization or formation, as applicable, except in connection with anytransaction permitted by Section 5.3;

###  

### (b)                                 preserveand maintain in full force and effect all rights, privileges, qualifications,permits, licenses and franchises necessary in the normal conduct of itsbusiness except in

 

31

----

 

### connectionwith transactions permitted by Section 5.3 and sales of assets permittedby Section 5.2 and except as would not reasonably be expected to have,either individually or in the aggregate, a Material Adverse Effect;

###  

### (c)                                  useits reasonable efforts, in the Ordinary Course of Business, to preserve itsbusiness organization and preserve the goodwill and business of the customers,suppliers and others having material business relations with it, except wherefailure to do so would not reasonably be expected to have, either individuallyor in the aggregate, a Material Adverse Effect; and

###  

### (d)                                 preserveor renew all of its registered trademarks, trade names and service marks, thenon-preservation of which would reasonably be expected to have, eitherindividually or in the aggregate, a Material Adverse Effect.

###  

## 4.5                                 Maintenanceof Property. The Borrower shall maintain, and shall cause each of its Subsidiaries tomaintain, and preserve all of their respective Property which are used oruseful in their respective businesses in good working order and condition,ordinary wear and tear and casualty excepted and shall make all necessaryrepairs thereto and renewals and replacements thereof except where the failureto do so would not reasonably be expected to have, either individually or inthe aggregate, a Material Adverse Effect.

##  

## 4.6                                 Insurance.  The Borrower shallmaintain, and shall cause each of its Subsidiaries to maintain, withfinancially sound and reputable independent insurers, insurance with respect totheir respective Property and businesses against loss or damage of the kindscustomarily insured against by Persons engaged in the same or similarbusinesses, of such types and in such amounts as are customarily carried undersimilar circumstances by such other Persons, including workers’ compensationinsurance, public liability and property and casualty insurance, which amounts shallnot be reduced by the Borrower or any of its Subsidiaries in the absence ofthirty (30) days’ prior notice to the Agent and business interruption insurancein an amount not less than projected EBITDA (EBITDA is computed in the mannerset forth in Exhibit 4.2(b)) for a period of not less than six (6) monthsand, in any event, in an amount not less than $16,500,000.  All property damage and casualty insuranceshall name the Agent as loss payee/mortgagee, all liability insurance shallname the Agent and the Lenders as additional insureds and all businessinterruption insurance shall name the Agent as assignee.  Upon request of the Agent or any Lender, theBorrower shall furnish the Agent, with sufficient copies for each Lender, atreasonable intervals (but not more than once per calendar year), a certificateof a Responsible Officer of the Borrower (and, if requested by the Agent, anyinsurance broker of the Borrower) setting forth the nature and extent of allinsurance maintained by the Borrower and its Subsidiaries in accordance withthis Section 4.6.  Unless theBorrower provides the Agent with evidence of the insurance coverage required bythis Agreement, the Agent may purchase insurance at the Borrower’s expense toprotect the Agent’s and Lenders’ interests in the Borrower’s and itsSubsidiaries’ Property; provided, that the Agent shall provide notice tothe Borrower of its intentions to purchase such insurance so long as no Defaultor Event of Default has occurred and is continuing.  This insurance may, but need not, protectBorrower’s and its Subsidiaries’ interests. The coverage that the Agent purchases may not pay any claim that theBorrower or any of its Subsidiaries makes or any claim that is made against theBorrower or any of its Subsidiaries in connection with said Property.  The Borrower may later cancel any

 

32

----

 

## insurancepurchased by the Agent, but only after providing the Agent with evidence thatthe Borrower has obtained insurance as required by this Agreement.  If the Agent purchases insurance, theBorrower will be responsible for the costs thereof, including interest and anyother charges the Agent may impose in connection with the placement ofinsurance, until the effective date of the cancellation or expiration of suchinsurance. The costs of such insurance may be added to the Obligations.  The costs of the insurance may be more thanthe cost of insurance the Borrower may be able to obtain on its own.  Notwithstanding anything herein to the contrary,if the Agent shall directly receive any proceeds of any business interruptioninsurance policy by reason of this Agreement, then, so long as no Default orEvent of Default has occurred and is continuing on the date such proceeds arereceived by the Agent, or would result therefrom, the Agent shall disburse suchproceeds promptly to the Borrower; provided, that any such disbursementof such proceeds to the Borrower shall not be deemed, or operate as, a waiveror alteration of or modification to any of the obligations or covenants of theBorrower or any of its Subsidiaries under this Agreement or any other LoanDocument and such proceeds received by the Borrower shall be used only forpurposes otherwise permitted hereunder.

##  

## 4.7                                 Paymentof Obligations. The Borrower shall, and shall cause each of its Subsidiaries to, pay,discharge and perform as the same shall become due and payable or required tobe performed, all of their respective obligations and liabilities, including,without limitation:

##  

### (a)                                  alltax liabilities, assessments and governmental charges or levies upon them ortheir property or assets, unless the same are being contested in good faith byappropriate proceedings diligently prosecuted which stay the enforcement of anyLien and for which adequate reserves in accordance with GAAP are beingmaintained by the Borrower or such Subsidiaries;

###  

### (b)                                 alllawful claims which, if unpaid, would by law become a Lien upon their Propertyunless the same are being contested in good faith by appropriate proceedingsdiligently prosecuted which stay the imposition or enforcement of the Lien andfor which adequate reserves in accordance with GAAP are being maintained by theBorrower;

###  

### (c)                                  allIndebtedness, as and when due and payable, but subject to any subordinationprovisions contained herein or in any instrument or agreement evidencing suchIndebtedness; and

###  

### (d)                                 theperformance of all obligations under any Contractual Obligation to which theBorrower or any of its Subsidiaries is bound, or to which it or any of itsProperty is subject, including the Related Agreements, except where the failureto perform would not reasonably be expected to have, either individually or inthe aggregate, a Material Adverse Effect.

###  

## 4.8                                 Compliancewith Laws. The Borrower shall comply, and shall cause each of its Subsidiaries tocomply, in all material respects, with all Requirements of Law of anyGovernmental Authority having jurisdiction over it or its business (including,without limitation, all Environmental Laws), except (a)(i) such as may becontested in good faith by appropriate proceedings diligently prosecutedwithout risk of loss of any Collateral, (ii) as to which a bona fidedispute exists, and (iii) for which appropriate reserves have beenestablished on the

 

33

----

 

## Borrower’sfinancial statements, or (b) where the failure to comply would notreasonably be expected to have, either individually or in the aggregate, aMaterial Adverse Effect.

##  

## 4.9                                 Inspectionof Property and Books and Records.  The Borrower shall maintain and shall causeeach of its Subsidiaries to maintain proper books of record and account, inwhich full, true and correct entries in conformity with GAAP consistentlyapplied shall be made of all financial transactions and matters involving theassets and business of the Borrower and its Subsidiaries.  The Borrower shall permit, and shall causeeach of its Subsidiaries to permit: (i) representatives and independentcontractors of the Agent to visit and inspect any of their respective Property,to examine their respective corporate, financial and operating records, andmake copies thereof or abstracts therefrom, and to discuss their respectiveaffairs, finances and accounts with their respective directors, officers, andindependent public accountants; provided, that (a) if no Event ofDefault exists, any such visits and inspections may only occur during normalbusiness hours and upon reasonable advance notice and the number of such visitsand inspections combined shall not exceed more than one (1) time per year,and (b) if any Event of Default exists, any such visits and inspectionsmay occur at any time during normal business hours and without advance notice;and (ii) representatives and independent contractors of any Lender to doany of the foregoing during the existence of any Event of Default and, in anysuch case described in this clause (ii), any such visits and inspections mayoccur at any time during normal business hours and without advance notice.  All actions permitted to be taken by theAgent and any Lender under this Section 4.9 shall be at the sole cost andexpense of the Borrower.

##  

## 4.10                           Use ofProceeds. The Borrower shall use the proceeds of the Loans solely as follows: (a) topay costs and expenses required to be paid pursuant to Section 2.1, (b) tofinance the payment of the cash purchase price of Permitted Acquisitions, (c) forworking capital and other general corporate purposes of its Subsidiaries not incontravention of any Requirement of Law and not in violation of this Agreementand (d) with respect to CapEx Loans, only for the payment of expansionCapital Expenditures.  For clarification,all proceeds of the Loans shall be utilized by the Subsidiaries of Borrower forthe purposes described above and, except with respect to (a) and (b) above,not by Borrower itself.

##  

## 4.11                           Solvency.  Borrower and each of itsSubsidiaries, individually, and Borrower and each of its Subsidiaries, on aconsolidated basis, shall at all times be Solvent.

##  

## 4.12                           Further Assurances.

###  

### (a)                                  TheBorrower shall ensure that all written information, exhibits and reportsfurnished to the Agent or the Lenders do not and will not contain any untruestatement of a material fact and do not and will not omit to state any materialfact or any fact necessary to make the statements contained therein notmisleading in light of the circumstances in which made, and will promptlydisclose to the Agent and the Lenders and correct any defect or error that maybe discovered therein or in any Loan Document or in the execution,acknowledgement or recordation thereof.

###  

### (b)                                 Promptlyupon request by the Agent, the Borrower shall (and shall cause each of itsSubsidiaries to) take such additional actions as the Agent may reasonablyrequire from time to

 

34

----

 

### time inorder (i) to subject to the Liens created by any of the CollateralDocuments any of the Property, rights or interests covered by any of theCollateral Documents, (ii) to perfect and maintain the validity,effectiveness and priority of any of the Collateral Documents and the Liensintended to be created thereby, and (iii) to better assure, convey, grant,assign, transfer, preserve, protect and confirm to the Agent and Lenders therights granted or now or hereafter intended to be granted to the Agent and theLenders under any Loan Document or under any other document executed inconnection therewith.  Without limitingthe generality of the foregoing and except as otherwise approved in writing byRequired Lenders, the Borrower shall cause each of its Subsidiaries to guarantythe Obligations and to cause each such Subsidiary to grant to the Agent, forthe benefit of the Agent and Lenders, a security interest in all of suchSubsidiary’s Property to secure such guaranty. Furthermore and except as otherwise approved in writing by RequiredLenders, the Borrower shall, and shall cause each of its Subsidiaries to,pledge all of the stock or other equity interests of each of their respectiveSubsidiaries to the Agent, for the benefit of the Agent and Lenders, to securethe Obligations.  In connection with eachpledge of stock or other equity interests, the Borrower shall deliver, or causeto be delivered, to the Agent, the items described in subsection 2.1(d)(iii),if applicable.  In the event the Borrower or any of its Subsidiaries acquires any realProperty, simultaneously with such acquisition, the Borrower or such Subsidiaryshall execute and/or deliver, or cause to be executed and/or delivered, to theAgent, (x) a fully executed Mortgage, in form and substance reasonablysatisfactory to the Agent together with an A.L.T.A. lender’s title insurancepolicy issued by a title insurer reasonably satisfactory to the Agent, in formand substance and in an amount reasonably satisfactory to the Agent insuringthat the Mortgage is a valid and enforceable first priority Lien on therespective Property, free and clear of all defects, encumbrances and Liensother than Permitted Liens, (y) with respect to real Property owned in feeonly, then current A.L.T.A. surveys, certified to the Agent and the Lenders bya licensed surveyor sufficient to allow the issuer of the lender’s titleinsurance policy to issue such policy without a survey exception and (z) anenvironmental site assessment prepared by a qualified firm reasonablyacceptable to the Agent, in form and substance satisfactory to the Agent.

###  

### (c)                                  TheBorrower shall, and shall cause each of its Subsidiaries to, in accordance withthe terms of the applicable Collateral Documents, cause each financialinstitution (other than U.S. Bank in respect of the Restricted Accounts) atwhich the Borrower or any such Subsidiary maintains any lockbox, depositaccount, securities account or other similar account to deliver to the Agent acontrol agreement, in form and substance satisfactory to the Agent.  The foregoing and anything contained in anyCollateral Document to the contrary notwithstanding, the Borrower shall not berequired to deliver any such control agreement in respect of any RestrictedAccount (to the extent the Borrower otherwise is in compliance with the otherterms of this paragraph); provided, that, the Borrower shall not, andshall not cause or permit any of its Subsidiaries to, deposit or maintain fundsin excess of (i) $70,000 in the Restricted Credit Card Account at any timeor (ii) $150,000 in the aggregate in all Restricted Accounts (other thanthe Restricted Credit Card Account and the Restricted Payroll Account) at anytime; provided, further, that, the Borrower shall not, and shallnot cause or permit any of its Subsidiaries to, deposit or maintain funds inthe Restricted Payroll Account other than funds deposited therein in theOrdinary Course of Business for purposes of funding current payrollliabilities.

###  

## 4.13                           Appraisals.  In addition to anyappraisals undertaken by or at the request of Agent pursuant to Section 4.2(k)or Section 5.2, for purposes of calculating the “Borrowing Base”

 

35

----

 

## pursuantto and in accordance with the terms of the Borrowing Base Certificate, and forBorrower and its Subsidiaries to be permitted to include machinery, equipmentand owned real Property in the Borrowing Base Certificate at any time after theRestatement Effective Date, if requested by the Agent at any time within thirty(30) days after the Restatement Effective Date, the Agent shall be entitled toreceive, at the Borrower’s expense, appraisals in form and substance and fromappraisers reasonably satisfactory to the Agent setting forth the orderlyliquidation value of the machinery and equipment of Borrower or any of itsSubsidiaries and the fair market value of all or any portion of such realProperty of Borrower or any of its Subsidiaries, in each case appraised at thetime of such appraisals.  After receiptof such appraisals, appraisals in respect of such Property may be undertaken orrequired by Agent pursuant to Section 4.2(k) and/or Section 5.2, theresults of which shall result in changes in the “Borrowing Base” based upon changesin the components thereof relating to such Property as necessary andrequired.  Further, if a Subsidiary ofthe Borrower exercises reinvestment rights under Section 1.8(c) andthe Property in which such Subsidiary reinvests constitutes equipment, machineryand/or real Property that the Borrower desires to include in the “BorrowingBase” under the Borrowing Base Certificate, then Agent may require, as acondition thereto, appraisals of such Property that otherwise comply with therequirements of Section 4.2(k).  The“Borrowing Base” shall be calculated in accordance with the terms of theBorrowing Base Certificate.

##  

# ARTICLE V - NEGATIVE COVENANTS

 

The Borrower covenants and agrees that, solong as any Lender shall have any Commitment hereunder, or any Loan or otherObligation (other than contingent indemnification Obligations to the extent noclaim giving rise thereto has been asserted) shall remain unpaid orunsatisfied, unless the Required Lenders waive compliance in writing:

 

## 5.1                                 Limitationon Liens. The Borrower shall not, and shall not suffer or permit any of itsSubsidiaries to, directly or indirectly, make, create, incur, assume or sufferto exist any Lien upon or with respect to any part of its Property, whether nowowned or hereafter acquired, other than, with respect to its Subsidiaries, thefollowing, provided the same is permitted and solely to the extent permitted,under the High Yield Unsecured Documents (“Permitted Liens”):

##  

### (a)                                  anyLien existing on the Property of the Borrower’s Subsidiaries on the RestatementEffective Date and set forth in Schedule 5.1 securing Indebtednessoutstanding on such date and permitted by subsection 5.5(c), includingreplacement Liens on the Property currently subject to such Liens securingIndebtedness permitted by subsection 5.5(c);

###  

### (b)                                 anyLien created under any Loan Document;

###  

### (c)                                  Liensfor taxes, fees, assessments or other governmental charges (i) which arenot delinquent or remain payable without penalty or (ii) the non-paymentof which is permitted by Section 4.7; provided, that in respect ofthis clause (ii), all such Liens secure claims in the aggregate at any timeoutstanding for the Borrower’s Subsidiaries not exceeding $500,000;

 

36

----

 

### (d)                                 carriers’,warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or othersimilar Liens arising in the Ordinary Course of Business which are notdelinquent for more than ninety (90) days or remain payable without penalty orwhich are being contested in good faith and by appropriate proceedingsdiligently prosecuted, which proceedings have the effect of preventing theforfeiture or sale of the Property subject thereto and for which adequatereserves in accordance with GAAP are being maintained;

###  

### (e)                                  Liens(other than any Lien imposed by ERISA) consisting of pledges or depositsrequired in the Ordinary Course of Business in connection with workers’compensation, unemployment insurance and other social security legislation orto secure the performance of tenders, statutory obligations, surety, stay,customs and appeals bonds, bids, leases, governmental contract, tradecontracts, performance and return of money bonds and other similar obligations(exclusive of obligations for the payment of borrowed money) or to secureliability to insurance carriers;

###  

### (f)                                    Liensconsisting of judgment or judicial attachment liens, provided, that theenforcement of such Liens is effectively stayed and all such Liens secureclaims in the aggregate at any time outstanding for the Borrower’s Subsidiariesnot exceeding $500,000;

###  

### (g)                                 easements,rights-of-way, zoning and other restrictions, minor defects or otherirregularities in title, and other similar encumbrances existing on theRestatement Effective Date or incurred in the Ordinary Course of Businesswhich, in each case, either individually or, in the aggregate, are notsubstantial in amount, and which do not in any case materially detract from thevalue of the Property subject thereto or interfere in any material respect withthe ordinary conduct of the businesses of the Borrower and its Subsidiaries;

###  

### (h)                                 Lienson any Property acquired or held by the Borrower’s Subsidiaries securingIndebtedness incurred or assumed for the purpose of financing (or refinancing)all or any part of the cost of acquiring such Property and permitted under subsection 5.5(d);provided, that (i) any such Lien attaches to such Propertyconcurrently with or within twenty (20) days after the acquisition thereof, (ii) suchLien attaches solely to the Property so acquired in such transaction, and (iii) theprincipal amount of the debt secured thereby does not exceed 100% of the costof such Property;

###  

### (i)                                     Lienssecuring Capital Lease Obligations permitted under subsection 5.5(d);

###  

### (j)                                     anyinterest or title of a lessor or sublessor, as lessor or sublessor, under anylease permitted by this Agreement; and

###  

### (k)                                  Liensarising from precautionary uniform commercial code financing statements filedunder any lease permitted by this Agreement.

###  

## 5.2                                 Dispositionof Assets.  TheBorrower shall not, and shall not suffer or permit any of its Subsidiaries to,directly or indirectly, sell, assign, lease, convey, transfer or otherwisedispose of (whether in one or a series of transactions) any Property (includingaccounts and notes receivable, with or without recourse) or enter into anyagreement to do any of the foregoing, except, with respect to the Borrower’sSubsidiaries and in each instance, provided the same is permitted, and solelyto the extent permitted, under the High Yield Unsecured Documents:

 

37

----

 

### (a)                                  dispositionsof inventory, or used, worn-out or surplus equipment, all in the OrdinaryCourse of Business; and

###  

### (b)                                 dispositionsnot otherwise permitted hereunder which are made for fair market value and themandatory prepayment in the amount of the Net Proceeds of such disposition ismade if and to the extent required by Section 1.8; provided, that (i) atthe time of any disposition, no Event of Default shall exist or shall resultfrom such disposition, (ii) the aggregate sales price from suchdisposition shall be paid in cash, (iii) the aggregate fair market valueof all assets so sold by the Borrower’s Subsidiaries, together, shall notexceed in any fiscal year $2,000,000, (iv) if the aggregate Net Proceedsreceived by the Borrower and its Subsidiaries for all dispositions and Eventsof Loss occurring during the current fiscal year exceeds $1,000,000, and suchdispositions and Events of Loss involved machinery, equipment and/or realProperty that previously was included in the “Borrowing Base” under theBorrowing Base Certificate then in effect, the Borrower shall have delivered tothe Agent a replacement Borrowing Base Certificate setting forth thecalculation of the “Borrowing Base” after giving effect to such dispositionsand/or Events of Loss and, if requested by the Agent, appraisals of theremaining equipment, machinery and/or real Property to be included in such “BorrowingBase”, and (v) after giving effect to such disposition, the Borrower shallbe in compliance on a pro forma basis with the covenants set forth in Article VI,recomputed for the most recent quarter for which financial statements have beendelivered.

###  

## 5.3                                 Consolidationsand Mergers. The Borrower shall not, and shall not suffer or permit any of itsSubsidiaries to, merge, consolidate with or into, or convey, transfer, lease orotherwise dispose of (whether in one transaction or in a series oftransactions) all or substantially all of its assets (whether now owned orhereafter acquired) to or in favor of any Person, except upon not less thanfive (5) Business Days’ prior written notice to the Agent, any Subsidiaryof the Borrower may merge with, or dissolve or liquidate into a Wholly-OwnedSubsidiary of the Borrower; provided, that such Wholly-Owned Subsidiaryshall be the continuing or surviving entity.

##  

## 5.4                                 Loansand Investments. The Borrower shall not and shall not suffer or permit any of itsSubsidiaries to (i) purchase or acquire, or make any commitment to purchaseor acquire any capital stock, equity interest, or any obligations or othersecurities of, or any interest in, any Person, including the establishment orcreation of a Subsidiary, or (ii) make or commit to make any Acquisitions,or any other acquisition of all or substantially all of the assets of anotherPerson, or of any business or division of any Person, including withoutlimitation, by way of merger, consolidation or other combination or (iii) makeor commit to make any advance, loan, extension of credit or capitalcontribution to or any other investment in, any Person including any Affiliateof the Borrower or any Subsidiary of the Borrower (the items described inclauses (i), (ii) and (iii) are referred to as “Investments”), exceptfor, in each instance, provided the same is permitted, and solely to the extentpermitted, under the High Yield Unsecured Documents:

##  

### (a)                                  Investmentsin cash and Cash Equivalents;

###  

### (b)                                 extensionsof credit by the Borrower to any of its Wholly-Owned Subsidiaries; provided,that the obligations of each obligor shall be evidenced by notes, which notesshall be

 

38

----

 

### pledgedto the Agent, for the benefit of the Agent and Lenders, and have such otherterms as the Agent may reasonably require;

###  

### (c)                                  loansand advances by the Borrower’s Subsidiaries to employees in the Ordinary Courseof Business not to exceed $250,000 in the aggregate at any time outstanding;and

###  

### (d)                                 PermittedAcquisitions.

###  

## 5.5                                 Limitationon Indebtedness. The Borrower shall not, and shall not suffer or permit any of itsSubsidiaries to, create, incur, assume, suffer to exist, or otherwise become orremain directly or indirectly liable with respect to, any Indebtedness, except,in each instance, provided the same is permitted, and solely to the extentpermitted, under the High Yield Unsecured Documents:

##  

### (a)                                  Indebtednessincurred pursuant to this Agreement;

###  

### (b)                                 Indebtednessconsisting of Contingent Obligations described in clause (i) of thedefinition thereof and permitted pursuant to Section 5.9;

###  

### (c)                                  Indebtednessof the Borrower’s Subsidiaries existing on the Restatement Effective Date andset forth in Schedule 5.5 including extensions and refinancingsthereof which do not increase the principal amount of such Indebtedness as ofthe date of such extension or refinancing;

###  

### (d)                                 Indebtednessof the Borrower’s Subsidiaries not to exceed $10,000,000 in the aggregate atany time outstanding, consisting of Capital Lease Obligations or secured byLiens permitted by subsection 5.1(h);

###  

### (e)                                  HighYield Unsecured Indebtedness not to exceed $120,000,000 in the aggregateprincipal amount at any time outstanding (reduced from time to time byprincipal payments made thereon, the making of which remain subject to theprovisions of this Agreement) evidenced by the High Yield Unsecured Notes andContingent Obligations of the Borrower’s Subsidiaries resulting from unsecuredguarantees thereof;

###  

### (f)                                    unsecuredintercompany Indebtedness permitted pursuant to subsection 5.4(b);

###  

### (g)                                 other unsecured Indebtedness of the Borrower’s Subsidiaries notexceeding in the aggregate at any time outstanding $800,000, reduced by theaggregate amount of Contingent Obligations outstanding that are permittedpursuant to Section 5.9(i);

###  

### (h)                                 unsecured contingent Indebtedness of Grand Valley Acquisition Subconstituting the Grand Valley Earn-Out Obligation****incurred in connection with the Grand Valley AssetAcquisition in an aggregate maximum potential amount not to exceed $1,000,000;and

 

(i)                                     unsecured contingent Indebtedness of Woodcraft constituting theDimension Earn-Out Obligation incurred in connection with the DimensionAcquisition in an aggregate maximum potential amount not to exceed $7,000,000plus accrued interest on the Dimension

 

39

----

 

Earn-Out Obligation at the rate specified in theDimension Purchase Agreement as in effect on the Second Amendment Closing Date.

 

## 5.6                                 Transactionswith Affiliates. The Borrower shall not, and shall not suffer or permit any of itsSubsidiaries to, enter into any transaction with any Affiliate of the Borroweror of any such Subsidiary, except:

##  

### (a)                                  asexpressly permitted by this Agreement; or

###  

### (b)                                 inthe Ordinary Course of Business and pursuant to the reasonable requirements ofthe business of the Borrower or such Subsidiary; provided, that in thecase of this clause (b), upon fair and reasonable terms no less favorable tothe Borrower or such Subsidiary than would be obtained in a comparable arm’s-lengthtransaction with a Person not an Affiliate of the Borrower or such Subsidiaryand which are disclosed in writing to the Agent.

###  

## 5.7                                 ManagementFees and Compensation.  The Borrower shall not, and shall not permitany of its Subsidiaries to, pay any management, consulting or similar fees toany Affiliate of the Borrower or to any officer, director or employee of theBorrower or any of its Subsidiaries or Affiliates except:

##  

### (a)                                  paymentof reasonable compensation to officers and employees for actual servicesrendered to the Borrower and its Subsidiaries in the Ordinary Course ofBusiness;

###  

### (b)                                 paymentof directors’ fees and reimbursement of actual out-of-pocket expenses incurredin connection with attending board of director meetings not to exceed in theaggregate, with respect to all such items, $100,000 in any fiscal year of theBorrower;

###  

### (c)                                  IntentionallyOmitted;

###  

### (d)                                 paymentof a one-time closing fee in January 2006 to Behrman Brothers ManagementCorp. in connection with the Dimension Acquisition in an amount not to exceed $100,000;and

###  

### (e)                                  paymentof transaction or similar fees to Behrman Brothers Management Corp. from timeto time in connection with (i) equity offerings or raises by the Borrower,(ii) the sale, merger or other business combination involving thebusiness, securities or assets of the Borrower, (iii) the acquisition bythe Borrower of any portion of the business, securities or assets of anotherentity constituting a Permitted Acquisition and (iv) any extraordinarydistribution of assets or dividends in connection with a recapitalization ofthe Borrower (each such transaction described in the foregoing clauses (i),(ii), (iii) and (iv), a “Transaction”), in each case provided that (x)such fee does not exceed two percent (2%) of aggregate transaction value and ispaid from the proceeds of such Transaction, (y) no Event of Default would ariseas a result of the consummation of the applicable Transaction and (z) suchTransaction was not consummated for purposes of Section 6.6 (it beingagreed and understood that nothing contained in this paragraph (e) shallbe deemed to constitute (I) a waiver of, or otherwise affect or impair anyobligation of the Borrower or its Subsidiaries to comply with, any provisioncontained herein or in any other Loan Document prohibiting or otherwise notpermitting the consummation of any such

 

40

----

 

### Transaction,or (II) express or implied consent or approval by the Agent or any Lender tothe consummation of any such Transaction);

###  

provided, however, that no such fees or other payments described inthe foregoing clauses (c), (d) or (e) shall be paid during any periodwhile any Event of Default has occurred and is continuing or would arise as aresult of such payment.

 

## 5.8                                 Useof Proceeds. The Borrower shall not and shall not suffer or permit any of itsSubsidiaries to use any portion of the Loan proceeds, directly or indirectly,to purchase or carry Margin Stock or repay or otherwise refinance Indebtednessof the Borrower or others incurred to purchase or carry Margin Stock, orotherwise in any manner which is in contravention of any Requirement of Law orin violation of this Agreement.

##  

## 5.9                                 ContingentObligations. The Borrower shall not, and shall not suffer or permit any of itsSubsidiaries to, create, incur, assume or suffer to exist any ContingentObligations except in respect of the Obligations and except:

##  

### (a)                                  endorsementsof the Borrower’s Subsidiaries for collection or deposit in the Ordinary Courseof Business;

###  

### (b)                                 RateContracts entered into in the Ordinary Course of Business for bona fide hedgingpurposes and not for speculation with the Agent’s prior written consent;

###  

### (c)                                  unsecuredContingent Obligations of the Borrower and its Subsidiaries existing as of theRestatement Effective Date and listed in Schedule 5.9, includingextension and renewals thereof which do not increase the amount of suchContingent Obligations as of the date of such extension or renewal;

###  

### (d)                                 ContingentObligations incurred in the Ordinary Course of Business of the Borrower’sSubsidiaries with respect to surety and appeal bonds, performance bonds andother similar obligations;

###  

### (e)                                  ContingentObligations arising under indemnity agreements to title insurers to cause suchtitle insurers to issue to the Agent title insurance policies;

###  

### (f)                                    ContingentObligations arising with respect to customary indemnification obligations infavor of (i) sellers in connection with Permitted Acquisitions and (ii) purchasersin connection with dispositions permitted under subsection 5.2(b);

###  

### (g)                                 ContingentObligations arising under Lender Letters of Credit and other letters of creditwhich are the subject of a Letter of Credit Participation Agreement;

###  

### (h)                                 ContingentObligations arising under permitted guarantees of the Subordinated Indebtednessevidenced by the High Yield Unsecured Notes; and

###  

### (i)                                     otherContingent Obligations not exceeding $800,000 at any time outstanding reducedby the aggregate amount of Indebtedness outstanding that is permitted pursuantto Section 5.5(g).

 

41

----

 

## 5.10                           Compliancewith ERISA. The Borrower shall not, and shall not suffer or permit any of itsSubsidiaries to:

##  

### (a)                                  terminateany Plan subject to Title IV of ERISA so as to result in any material liabilityto the Borrower;

###  

### (b)                                 permitto exist any ERISA Event or any other event or condition, which wouldreasonably be expected to have a Material Adverse Effect;

###  

### (c)                                  makea complete or partial withdrawal (within the meaning of ERISA Section 4201)from any Multiemployer Plan so as to result in any material liability to theBorrower or any of its Subsidiaries;

###  

### (d)                                 enterinto any new Plan or modify any existing Plan so as to increase its obligationsthereunder which would reasonably be expected to have a Material AdverseEffect; or

###  

### (e)                                  permitthe present value of all nonforfeitable accrued benefits under any Plan (usingthe actuarial assumptions utilized by the PBGC upon termination of a Plan)materially to exceed the fair market value of Plan assets allocable to such benefits,all determined as of the most recent valuation date for each such Plan.

###  

## 5.11                           RestrictedPayments. The Borrower shall not, and shall not suffer or permit any of itsSubsidiaries to, (i) declare or make any dividend payment or otherdistribution of assets, properties, cash, rights, obligations or securities onaccount of any shares of any class of its capital stock, partnership interests,membership interests or other equity securities, (ii) purchase, redeem orotherwise acquire for value any shares of its capital stock, partnershipinterests, membership interests or other equity securities or any warrants,rights or options to acquire such shares, interests or securities now orhereafter outstanding, (iii) make any payment or prepayment of principalof, premium, if any, interest, fees, redemption, exchange, purchase,retirement, defeasance, payment in trust, sinking fund or similar payment withrespect to, Subordinated Indebtedness, or any payment on account of the GrandValley Earn-Out Obligation or the Dimension Earn-Out Obligation, (iv) makeany payment or prepayment of principal of, premium, if any, interest, fees,redemption, exchange, purchase, retirement, defeasance, payment in trust,sinking fund or similar payment with respect to, the High Yield UnsecuredIndebtedness, or (v) make any direct or indirect payment in respect of anyconsulting, management, non-competition or similar agreement, arrangement orfee (the items described in clauses (i), (ii), (iii), (iv) and (v) aboveare referred to as “Restricted Payments”); except that any Wholly-OwnedSubsidiary of the Borrower may declare and pay dividends to any Wholly-OwnedSubsidiary of the Borrower and except as follows, in each instance provided thesame is permitted, and solely to the extent permitted, under the High YieldUnsecured Documents:

##  

### (a)                                  theBorrower may declare and make dividend payments or other distributions payablesolely in its Permitted Securities;

###  

### (b)                                 theBorrower’s Subsidiaries may make distributions to Borrower in amounts necessaryto enable Borrower to redeem from management stockholders shares of theBorrower’s common stock or warrants or options to acquire any such shares, andthe Borrower

 

42

----

 

### promptlyshall so redeem such shares, warrants or options with the proceeds thereof; provided,that any such redemptions are made promptly by the Borrower after its receiptof such proceeds; and provided, further, that all of thefollowing conditions are satisfied:

###  

#### (i)                                     no Default or Event of Default has occurred and is continuing orwould arise as a result of such Restricted Payment;

####  

#### (ii)                                  after giving effect to such Restricted Payment, the Borrower shallbe in compliance on a pro forma basis with the covenants set forth in Article VI,recomputed for the most recent month for which financial statements have beendelivered;

####  

#### (iii)                               the aggregate amount of such Restricted Payments permitted (x) inany fiscal year of the Borrower shall not exceed $350,000 and (y) during theterm of this Agreement shall not exceed $2,000,000; and

####  

#### (iv)                              after giving effect to such Restricted Payment, the MaximumRevolving Loan Balance shall exceed the aggregate outstanding principal balanceof Revolving Loans by not less than $2,000,000;

####  

### (c)                                  IntentionallyOmitted;

###  

### (d)                                 IntentionallyOmitted;

###  

### (e)                                  inthe event the Borrower files a consolidated income tax return with itsSubsidiaries, the Borrower’s Subsidiaries may make distributions to Borrower topermit Borrower to pay federal and state income taxes then due and owing,franchise taxes and other similar licensing expenses incurred in the OrdinaryCourse of Business; provided, that the amount of such distribution shallnot be greater, nor the receipt by the Borrower of tax benefits less, than theywould have been had the Borrower not filed a consolidated return with itsSubsidiaries;

###  

### (f)                                    theBorrower’s Subsidiaries may make distributions to Borrower in amounts necessaryto enable Borrower to pay, as and when due and payable, and the Borrower maypay with the proceeds thereof, provided, that any such payments are madepromptly by the Borrower after its receipt of such proceeds, (i) regularlyscheduled semi-annual payments of interest on the High Yield UnsecuredIndebtedness at a rate not to exceed ten percent (10%) per annum in accordancewith the terms set forth in the High Yield Unsecured Documents, (ii) regularlyscheduled payments of interest and principal on any Subordinated Indebtednessto the extent permitted under the subordination terms with respect thereto and (iii) anyother payments that are required under this Agreement and any of the other LoanDocuments;

###  

### (g)                                 theBorrower’s Subsidiaries may make distributions to Borrower in amounts necessaryto enable Borrower to make cash dividends or distributions to its holders ofcapital stock so long as the aggregate amount of such Restricted Payments andall other Restricted Payments made under this Section 5.11(g) sincethe Original Closing Date does not exceed the sum of (without duplication):

 

43

----

 

### (i)                                     fifty-percent (50%) of the “Consolidated Net Income” (as defined inthe High Yield Unsecured Indenture) accrued during the period (treated as oneaccounting period) from the beginning of the fiscal quarter immediatelyfollowing the fiscal quarter during which the Original Closing Date****occurred to the end of the most recentfiscal quarter ending prior to the date of such Restricted Payment for whichquarterly financial statements are available and have been delivered to theAgent and the Lenders in accordance with the terms hereof (or, in case suchConsolidated Net Income shall be a deficit, minus 100% of such deficit); plus

###  

### (ii)                                  one hundred percent (100%) of the aggregate Net Proceeds received bythe Borrower from the issuance or sale of its Permitted Securities subsequentto the Original Closing Date (other than an issuance or sale to a Subsidiary ofthe Borrower and other than an issuance or sale to an employee stock ownershipplan or to a trust established by the Borrower or any of its Subsidiaries forthe benefit of their employees) and one hundred percent (100%) of any cashcapital contribution received by the Borrower from its shareholders****subsequent to the Original Closing Date (other than forpurposes of Section 6.6); plus

###  

### (iii)                               the amount by which Indebtedness of the Borrower is reduced on theBorrower’s balance sheet upon the conversion or exchange subsequent to theOriginal Closing Date of any Indebtedness of the Borrower convertible orexchangeable for Permitted Securities (less the amount of any cash, or the fairvalue of any other property, distributed by the Borrower upon such conversionor exchange) to the extent the same shall have been permitted under thisAgreement; provided, however, that the foregoing amount shall notexceed the net cash proceeds received by the Borrower or any of itsSubsidiaries from the sale of such Indebtedness (excluding Net Proceeds fromsales to a Subsidiary of the Borrower or to an employee stock ownership plan orto a trust established by the Borrower or any of its Subsidiaries for thebenefit of their employees); plus

###  

### (iv)                              an amount equal to the net reduction in the Investments made by theBorrower or any Subsidiary in any Person (other than the Borrower or any of itsSubsidiaries) resulting from repurchases, repayments or redemptions of suchInvestments by such Person, proceeds realized on the sale of such Investmentsand proceeds representing the return of capital (excluding dividends anddistributions), in each case received by the Borrower or any of itsSubsidiaries and to the extent the same shall have been permitted under thisAgreement; and

###  

### provided,that all of the following conditions are satisfied:

###  

#### (i)                                     no Default or Event of Default shall have occurred and be continuingor would arise as a result of such Restricted Payment;

####  

#### (ii)                                  after giving effect to such Restricted Payment, the Borrower shallbe in compliance on a pro forma basis with the covenants set forth in Article VI,recomputed for the most recent quarter for which financial statements have beendelivered;

 

44

----

 

#### (iii)                               after giving effect to such Restricted Payment, the Leverage Ratio,recalculated for the twelve (12) month period ending on the last day of themost recently ended quarter for which the Agent and the Lenders shall havereceived financial statements in accordance with the terms of this Agreement,shall be less than 4.00 to 1.00; and

####  

#### (iv)                              after giving effect to such Restricted Payment, the MaximumRevolving Loan Balance shall exceed the aggregate outstanding principal balanceof Revolving Loans by not less than $5,000,000;

####  

### (h)                                 Grand Valley Acquisition Sub may pay, as and when due and payable, aone-time cash payment in an amount required to be paid pursuant to the terms ofthe Grand Valley Earn-Out Obligation in accordance with the provisions of Section 1.4(b) ofthe Grand Valley Asset Purchase Agreement as in effect on the First AmendmentClosing Date; provided, that all of the following conditions aresatisfied:

###  

(i)                                     no Default or Event of Default shall have occurred and be continuingor would arise as a result of such Restricted Payment or any transactions whichmay occur to enable Grand Valley Acquisition Sub to make such RestrictedPayment;

 

(ii)                                  such Restricted Payment is required to be made under the terms ofthe Grand Valley Asset Purchase Agreement;

 

(iii)                               after giving effect to such Restricted Payment, the Borrower shallbe in compliance on a pro forma basis with the covenants set forth in Article VI,recomputed for the most recent quarter for which financial statements have beendelivered;

 

(iv)                              the aggregate amount of such Restricted Payment shall not exceed$1,000,000 (or, if less, the amount determined in accordance with the terms ofthe Grand Valley Asset Purchase Agreement as in effect on the First AmendmentClosing Date);

 

(v)                                 after giving effect to such Restricted Payment, the MaximumRevolving Loan Balance shall exceed the aggregate outstanding principal balanceof Revolving Loans by not less than $5,000,000;

 

(vi)                              the “Available Liquidity” (as defined in the High Yield UnsecuredIndenture) of the Borrower shall be at least $7,500,000; and

 

(vii)                           if required pursuant to the terms of the High Yield SubordinatedIndenture and/or in the event that the Leverage Ratio of the Borrower and itsSubsidiaries after giving effect to such Restricted Payment shall be greaterthan 4.00:1.00, at least fifty percent (50%) of the amount of such RestrictedPayment shall have been financed with “Acceptable Capital Contributions” (asdefined in the High Yield Unsecured Indenture), and not more than $500,000 ofRevolving

 

45

----

 

Loans and cash on hand of the Borrower (to the extent not constitutingproceeds of such Acceptable Capital Contributions) (or, if less, an amount notto exceed fifty percent (50%) of such Restricted Payment) in the aggregateshall be used to make such Restricted Payment; and

 

### (i)                                     Woodcraft may pay, as and when due and payable, cash payments inamounts required to be paid pursuant to the terms of the Dimension Earn-OutObligation in accordance with the provisions of Section 1.6(c) ofthe Dimension Purchase Agreement as in effect on the Second Amendment ClosingDate; provided, that all of the following conditions are satisfied:

###  

(i)                                     no Default or Event of Default shall have occurred and be continuingor would arise as a result of such Restricted Payment or any transactions whichmay occur to enable Woodcraft to make such Restricted Payment;

 

(ii)                                  such Restricted Payment is required to be made under the terms ofthe Dimension Purchase Agreement;

 

(iii)                               after giving effect to such Restricted Payment, the Borrower shallbe in compliance on a pro forma basis with the covenants set forth in Article VI,recomputed for the most recent quarter for which financial statements have beendelivered;

 

(iv)                              the amount of such Restricted Payment shall not exceed the amountdetermined in accordance with the terms of the Dimension Purchase Agreement asin effect on the Second Amendment Closing Date;

 

(v)                                 after giving effect to such Restricted Payment, the MaximumRevolving Loan Balance shall exceed the aggregate outstanding principal balanceof Revolving Loans by not less than $5,000,000;

 

(vi)                              the “Available Liquidity” (as defined in the High Yield UnsecuredIndenture) of the Borrower shall be at least $7,500,000; and

 

(vii)                           if required pursuant to the terms of the High Yield SubordinatedIndenture and/or in the event that the Leverage Ratio of the Borrower and itsSubsidiaries after giving effect to such Restricted Payment shall be greaterthan 4.00:1.00, at least fifty percent (50%) of the amount of such RestrictedPayment shall have been financed with “Acceptable Capital Contributions” (asdefined in the High Yield Unsecured Indenture), and not more than an amount ofRevolving Loans and cash on hand of the Borrower (to the extent notconstituting proceeds of such Acceptable Capital Contributions) equal to fiftypercent (50%) of such Restricted Payment shall be used to make such RestrictedPayment.

 

## 5.12                           Changein Business. The Borrower shall not permit any of its Subsidiaries to engage in anymaterial line of business substantially different from those respective linesof business carried on by each of them on the date hereof.  The Borrower shall not (i) engage in any

 

46

----

 

## businessactivity other than (A) its ownership of the equity securities ofWoodcraft, (B) activities incidental to maintenance of its corporate existenceand (C) performance of its obligations under the Loan Documents, the HighYield Unsecured Documents and the other Related Agreements to which it is aparty, (ii) receive or retain any Restricted Payment except to the extentexpressly permitted hereunder (provided Borrower uses the proceeds thereofsolely for such specified purposes) or (iii) incur, grant or suffer toexist any Liens, Indebtedness or Contingent Obligations other than (x) Liensgranted to the Agent, for the benefit of the Agent and the Lenders, or (y)Indebtedness and Contingent Obligations pursuant to the Loan Documents, theHigh Yield Unsecured Documents and the other Related Agreements to which it isa party.

##  

## 5.13                           Changein Structure. Except as expressly permitted under Section 5.3, the Borrower shallnot, and shall not permit any of its Subsidiaries to, make any material changesin its equity capital structure (including in the terms of its outstandingcapital stock), or amend any of its Organization Documents in any material respector in any respect adverse to the Agent or Lenders.

##  

## 5.14                           AccountingChanges.  TheBorrower shall not, and shall not suffer or permit any of its Subsidiaries to,make any significant change in accounting treatment or reporting practices,except as required by GAAP, or change the fiscal year of the Borrower or of anyof its Subsidiaries.

##  

## 5.15                           Amendmentsto Related Agreements.

##  

### (a)                                  TheBorrower shall not, and shall not permit any of its Subsidiaries to, (i) amend,supplement, waive or otherwise modify any provision of, any Related Agreementin a manner adverse to the Agent or Lenders or which could reasonably beexpected to have a Material Adverse Effect, or (ii) take or fail to takeany action under any Related Agreement that would reasonably be expected tohave a Material Adverse Effect.

###  

### (b)                                 TheBorrower shall not, and shall not permit any of its Subsidiaries directly orindirectly to, change or amend the terms of any Subordinated Indebtedness, ifthe effect of such amendment would be to: (i) increase the interest rateon such Indebtedness; (ii) shorten the dates upon which payments ofprincipal or interest are due on such Indebtedness; (iii) add or change ina manner adverse to the Borrower any event of default or add or make morerestrictive any covenant with respect to such Indebtedness; (iv) change ina manner adverse to the Borrower the prepayment provisions of suchIndebtedness; (v) change the subordination provisions thereof (or thesubordination terms of any guaranty thereof); or (vi) change or amend anyother term if such change or amendment would materially increase theobligations of the obligor or confer additional material rights on the holderof such Indebtedness in a manner adverse to the Borrower, any of itsSubsidiaries, the Agent or the Lenders.

 

### (c)                                  TheBorrower shall not, and shall not permit any of its Subsidiaries directly orindirectly to, change or amend the terms of the High Yield UnsecuredIndebtedness or any of the High Yield Unsecured Documents, if the effect ofsuch change or amendment would be to: (i) increase the interest rate on orprincipal amount of such Indebtedness; (ii) shorten the dates upon which paymentsof principal or interest are due on such Indebtedness; (iii) add or changein a manner adverse to the Borrower any event of default or add or make morerestrictive any

 

47

----

 

### covenantwith respect to such Indebtedness; (iv) change in a manner adverse to theBorrower the prepayment or redemption provisions of such Indebtedness; (v) changeor amend any other term if such change or amendment would increase theobligations of the obligor or confer additional rights on the holder of suchIndebtedness in a manner adverse to the Borrower, any of its Subsidiaries, theAgent or the Lenders; (vi) provide that any such Indebtedness will becomesecured, or (vii) provide that such Indebtedness will become guaranteed,except by any Subsidiaries that are also providing guarantees of theObligations hereunder; and provided that the Borrower and any such Subsidiarieshave complied with all of the conditions set forth in Section 4.12 hereofon or prior to the provision of such guarantee.

###  

### (d)                                 TheBorrower shall not, and shall not permit any of its Subsidiaries directly orindirectly to, change, amend, supplement, waive or otherwise modify anyprovision of any of the Grand Valley Purchase Documents, any other term orprovision relating to the Grand Valley Earn-Out Obligation, any of theDimension Purchase Documents or any other term or provision relating to theDimension Earn-Out Obligation.

###  

## 5.16                           No Negative Pledges.

##  

### (a)                                  TheBorrower shall not, and shall not permit any of its Subsidiaries directly orindirectly to, create or otherwise cause or suffer to exist or become effectiveany consensual restriction or encumbrance of any kind on the ability of anysuch Subsidiary to pay dividends or make any other distribution on any of suchSubsidiary’s equity securities or to pay fees, including management fees, ormake other payments and distributions to the Borrower or any of itsSubsidiaries, other than restrictions contained herein or in the High YieldUnsecured Documents with respect to distributions by a Subsidiary of theBorrower which is not a Wholly-Owned Subsidiary of Borrower.  The Borrower shall not, and shall not permitany of its Subsidiaries directly or indirectly to, enter into, assume or becomesubject to any Contractual Obligation prohibiting or otherwise restricting theexistence of any Lien upon any of its assets in favor of the Agent, whether nowowned or hereafter acquired except in connection with any document orinstrument governing Liens permitted pursuant to subsections 5.1(h) and(i); provided, that any such restriction contained therein relates onlyto the asset or assets subject to such Permitted Liens.

###  

### (b)                                 The Borrower shall not issue any shares of the Borrower’s equitysecurities, including, without limitation, Permitted Securities, if suchissuance would result in an Event of Default under subsection 7.1(l).

###  

## 5.17                           ForeignAssets Control Regulations.  Borrower will not, and will not permit any ofits Subsidiaries to, (i) use any proceeds from the Loans to knowinglyengage in any material dealings or transactions with any blocked personsdescribed in Section 1 of Executive Order 13224 of the September 23,2001 Blocking Property and Prohibiting Transaction With Persons Who Commit andThreaten to Commit, or Support Terrorism (66 Fed. Reg. 49049 (2001)), or (ii) engagein transactions with any Person or country to the extent restricted by theTrading with the Enemy Act, as amended, or use the proceeds from the Loans toso engage.

##  

## 5.18                           Integration.  Notwithstanding anything inthis Article V to the contrary, no action otherwise permitted under this Article Vshall be permitted if such action is prohibited or is

 

48

----

 

## otherwisenot permitted under any of the High Yield Unsecured Documents and the Agentshall have the right, at any time, to require the Borrower to deliver acertificate executed by a Responsible Officer of Borrower and otherwise in formand substance reasonably satisfactory to Agent which certifies to Agent andLenders that any such action, at the time such action is to be taken, ispermitted under the High Yield Unsecured Documents.  Furthermore, all covenants contained in eachof the High Yield Unsecured Documents hereby are incorporated herein, *mutatis mutandis*, as if such covenantswere set forth in this Agreement, and shall be deemed in addition to, and notin substitution of, the covenants contained in the Loan Documents.

##  

## 5.19                           CertainLeased Locations. The Borrower shall not permit Inventory, machinery and equipment havinga value in excess of $750,000, in the aggregate, at any time to be located atthe Borrower’s warehousing facilities maintained at (a) 2815 ClearwaterRoad, St. Cloud, Minnesota 56301 or (b) 14500 Parallel, Suite T,Basehor, Kansas 66007, unless the Borrower shall have delivered a bailee waiveror warehousing agreement, as the case may be, duly executed by the bailor orwarehouser, as the case may be, of each such location, in each case, in formand substance reasonably satisfactory to the Agent.

##  

# ARTICLE VI - FINANCIAL COVENANTS

 

The Borrower covenants and agrees that, solong as any Lender shall have any Commitment hereunder, or any Loan or otherObligation (other than contingent indemnification Obligations to the extent noclaim giving rise thereto has been asserted) shall remain unpaid orunsatisfied, unless the Required Lenders waive compliance in writing:

 

## 6.1                                 Reserved.

##  

## 6.2                                 LeverageRatio.  TheBorrower shall not permit its Leverage Ratio for the twelve (12) month periodending on the last day of any fiscal quarter of the Borrower (commencing withthe fiscal quarter of the Borrower ending September 30, 2005) to begreater than 7.00 to 1.00.

##  

“Leverage Ratio” shall be calculated in themanner set forth in Exhibit 4.2(b).

 

## 6.3                                 FixedCharge Coverage Ratio.  The Borrower shall not permit its FixedCharge Coverage Ratio for the twelve (12) month period ending on the last dayof any fiscal quarter of the Borrower (commencing with the fiscal quarter ofthe Borrower ending September 30, 2005) to be less than the minimum ratioset forth in the table below opposite such date: 

 
| **Date**                                                                | ** ** | **Minimum Fixed Charge  Ratio** | ** ** |
|-------------------------------------------------------------------------|------------|---------------------------------|------------|
|                                                                    |       |                            |       |
| September 30,  2005                                                |       | 1.05  to 1.00                   |       |
| December 31,  2005                                                 |       | 1.05  to 1.00                   |       |
|                                                                    |       |                            |       |
| March 31,  2006                                                    |       | 1.05  to 1.00                   |       |
| June 30,  2006                                                     |       | 1.05  to 1.00                   |       |
| September 30,  2006                                                |       | 1.05  to 1.00                   |       |
| December 31,  2006                                                 |       | 1.05  to 1.00                   |       |
|                                                                    |       |                            |       |
| March 31, 2007 and the last day of each fiscal quarter  thereafter |       | 1.10  to 1.00                   |       |

 

49

----

 

“Fixed Charge Coverage Ratio” shall becalculated in the manner set forth in Exhibit 4.2(b).

 

## 6.4                                 Reserved.

##  

## 6.5                                 EBITDA.  The Borrower shall notpermit its EBITDA for the twelve (12) month period ending on the last day ofany fiscal quarter of the Borrower (commencing with the fiscal quarter of theBorrower ending September 30, 2005) to be less than $21,000,000.

##  

“EBITDA” shall be calculated in the mannerset forth in Exhibit 4.2(b).

 

## 6.6                                 EquityContribution. Anything contained in this Article VI to the contrarynotwithstanding, if the Borrower violates any financial covenant contained inSections 6.2, 6.3 and/or 6.5 as of any date of measurement, no Event of Defaultshall occur in respect thereof to the extent each of the following conditionsis satisfied in respect thereof:

##  

### (a)                                  contemporaneouslywith the delivery of the Compliance Certificate in accordance with the terms ofthis Agreement relating to such date of measurement, Sponsor delivers to Agenta writing by which Sponsor unconditionally and irrevocably commits, for thebenefit of Agent and the Lenders, to contribute cash common equity to Borrowerin an amount at least equal to the relevant EBITDA Plug Amount for purposes ofthis paragraph;

###  

### (b)                                 on orbefore the fifth (5th) day after the date on which such Compliance Certificateand writing are delivered to the Agent, Sponsor makes a cash common equitycontribution in a net cash amount at least equal to the relevant EBITDA PlugAmount and the terms of such equity shall not provide for, include or grant anymandatory or required redemption or repurchase rights or any rights tomandatory or required dividends, distributions or other payments thereon or inrespect thereto (each such contribution, a “Cash Contribution”);

###  

### (c)                                  uponreceipt of such Cash Contribution by the Borrower, the Borrower immediatelymakes a mandatory prepayment of the Loans and other Obligations with theproceeds thereof in accordance with the terms of subsection 1.8(g); and

###  

### (d)                                 noother Default or Event of Default exists or otherwise would be created by themaking of any such contributions;

###  

it being understood that the amount of anysuch contributions shall be added to EBITDA (or, in respect of the Fixed ChargeCoverage ratio under Section 6.3, Cash Flow) solely for the applicabletest period and date of measurement and shall not be included or considered (orcredited) in the calculation of EBITDA (or Cash Flow, as applicable) for anysubsequent test period or date of measurement. The Borrower agrees and acknowledges that an Event of Default shalloccur immediately and automatically upon the failure of Sponsor or the Borrowerto timely comply with any of the foregoing.

 

50

----

 

# ARTICLE VII - EVENTS OF DEFAULT

 

## 7.1                                 Eventof Default. Any of the following shall constitute an “Event of Default”:

###  

### (a)                                  Non-Payment.  The Borrower fails to pay (i) whenand as required to be paid herein, any amount of principal of or interest onany Loan, including after maturity of the Loans, whether by acceleration orotherwise, or (ii) within ten (10) days after the same shall becomedue, any fee or any other amount payable hereunder or pursuant to any otherLoan Document; or

###  

### (b)                                 Representationor Warranty. Any representation, warranty or certification by or on behalf of theBorrower or any of its Subsidiaries made or deemed made herein, in any otherLoan Document, or which is contained in any certificate, document or financialor other statement by the Borrower, any of its Subsidiaries, or any of theirrespective Responsible Officers, furnished at any time under this Agreement, orin or under any other Loan Document, shall prove to have been incorrect in anymaterial respect on or as of the date made or deemed made; or

###  

### (c)                                  SpecificDefaults. The Borrower fails to perform or observe any term, covenant or agreementcontained in any of Sections 4.1, 4.2(b), 4.2(d), 4.4 (other than 4.4(c)), 4.6,4.9, 4.13 or Article V or, subject to Section 6.6, Article VIhereof; or

###  

### (d)                                 OtherDefaults. The Borrower or any of its Subsidiaries fails to perform or observe anyother term, covenant or agreement contained in this Agreement or any other LoanDocument, and such default shall continue unremedied for a period of thirty(30) days after the earlier to occur of (i) the date upon which aResponsible Officer becomes aware of such default and (ii) the date uponwhich written notice thereof is given to the Borrower by the Agent or RequiredLenders; or

###  

### (e)                                  Cross-Default.  (i) The Borrower orany of its Subsidiaries (A) fails to make any payment in respect of anyIndebtedness (other than the Obligations) or Contingent Obligation having anaggregate principal amount (including undrawn committed or available amountsand including amounts owing to all creditors under any combined or syndicatedcredit arrangement) of more than $1,000,000 when due (whether by scheduledmaturity, required prepayment, acceleration, demand, or otherwise) and such failurecontinues after the applicable grace or notice period, if any, specified in thedocument relating thereto on the date of such failure; or (B) fails toperform or observe any other condition or covenant, or any other event shalloccur or condition exist, under any agreement or instrument relating to anysuch Indebtedness or Contingent Obligation, if the effect of such failure,event or condition is to cause, or to permit the holder or holders of suchIndebtedness or beneficiary or beneficiaries of such Indebtedness (or a trusteeor agent on behalf of such holder or holders or beneficiary or beneficiaries)to cause such Indebtedness to be declared to be due and payable prior to itsstated maturity, or such Contingent Obligation to become payable or cash collateralin respect thereof to be demanded; or (ii) any default or event of defaultoccurs under or in respect of the High Yield Unsecured Indebtedness or any ofthe High Yield Unsecured Documents; or (iii) any default or event ofdefault occurs under or in respect of any Subordinated Indebtedness; or

 

51

----

 

### (f)                                    Insolvency; Voluntary Proceedings.  The Borrower or any of its Subsidiaries: (i) ceasesor fails to be Solvent; (ii) generally fails to pay, or admits in writingits inability to pay, its debts as they become due, subject to applicable graceperiods, if any, whether at stated maturity or otherwise; (iii) voluntarilyceases to conduct its business in the ordinary course; (iv) commences anyInsolvency Proceeding with respect to itself; or (v) takes any action toeffectuate or authorize any of the foregoing; or

###  

### (g)                                 InvoluntaryProceedings. (i) Any involuntary Insolvency Proceeding is commenced or filedagainst the Borrower or any of its Subsidiaries, or any writ, judgment, warrantof attachment, execution or similar process, is issued or levied against asubstantial part of the Borrower’s or any of its Subsidiaries’ Property, andany such proceeding or petition shall not be dismissed, or such writ, judgment,warrant of attachment, execution or similar process shall not be released,vacated or fully bonded within sixty (60) days after commencement, filing orlevy; (ii) the Borrower or any of its Subsidiaries admits the materialallegations of a petition against it in any Insolvency Proceeding, or an orderfor relief (or similar order under non-U.S. law) is ordered in any InsolvencyProceeding; or (iii) the Borrower or any of its Subsidiaries acquiesces inthe appointment of a receiver, trustee, custodian, conservator, liquidator,mortgagee in possession (or agent therefor), or other similar Person for itselfor a substantial portion of its Property or business; or

###  

### (h)                                 ERISA.  (i) A member of theControlled Group shall fail to pay when due, after the expiration of anyapplicable grace period, any installment payment with respect to its WithdrawalLiability under a Multiemployer Plan; (ii) a member of the ControlledGroup shall fail to satisfy its contribution requirements under Section 412(c)(11)of the Code, whether or not it has sought a waiver under Section 412(d) ofthe Code; (iii) the occurrence of an ERISA Event; (iv) a Plan that isintended to be qualified under Section 401(a) of the Code shall loseits qualification; (v) any member of the Controlled Group engages in orotherwise becomes liable for a non-exempt prohibited transaction; (vi) aviolation of Section 404 or 405 of ERISA or the exclusive benefit rule underSection 401(a) of the Code; or (vii) any member of theControlled Group is assessed a tax under Section 4980B of the Code orincurs a liability under Section 601 et seq. of ERISA;and, the occurrence of any such event listed in clauses (i) through (vii),or the occurrence of any combination of events listed in clauses (i) through(vii) results in, or could reasonably be expected to result in, a MaterialAdverse Effect or result in exposure to the Borrower in an amount in excess of$800,000; or

###  

### (i)                                     Monetary Judgments.  One or more judgments, non-interlocutoryorders, decrees or arbitration awards shall be entered against the Borrower orany of its Subsidiaries involving in the aggregate a liability (to the extentnot covered by independent third-party insurance) as to any single or relatedseries of transactions, incidents or conditions, of $800,000 or more, and thesame shall remain unsatisfied, unvacated and unstayed pending appeal for aperiod of thirty (30) days after the entry thereof; or

###  

### (j)                                     Non-Monetary Judgments.  One or more non-monetary judgments, orders ordecrees shall be rendered against the Borrower or any of its Subsidiaries whichdoes or would reasonably be expected to have, either individually or in theaggregate, a Material Adverse Effect, and there shall be any period of ten (10) consecutivedays during which a stay of

 

52

----

 

### enforcementof such judgment or order, by reason of a pending appeal or otherwise, shallnot be in effect; or

###  

### (k)                                  Collateral.  Any material provision ofany Collateral Document shall for any reason cease to be valid and binding onor enforceable against the Borrower or any Subsidiary of the Borrower partythereto or the Borrower or any of its Subsidiaries shall so state in writing orbring an action to limit its obligations or liabilities thereunder; or anyCollateral Document shall for any reason (other than pursuant to the termsthereof) cease to create a valid security interest in the Collateral purportedto be covered thereby or such security interest shall for any reason (otherthan the failure of the Agent to take any action within its control) cease tobe a perfected and first priority security interest subject only to PermittedLiens; or

###  

### (l)                                     Ownership.  (i) Sponsor at any time shall cease toown, beneficially, at least eighty percent (80%) of each class of the issuedand outstanding capital stock of Borrower owned by it on the RestatementEffective Date (as the same may be adjusted for any combination,recapitalization or reclassification into a greater or smaller number ofshares); or (ii) Sponsor at any time shall fail to own, beneficially,directly or indirectly, at least fifty-one percent (51%) of the issued andoutstanding voting capital stock of Borrower or, in any event, capital stockrepresenting voting control of Borrower; or (iii) Borrower shall cease toown, beneficially, one hundred percent (100%) of the issued and outstandingequity securities of Woodcraft; or (iv) the Borrower or any of itsSubsidiaries shall cease to own, beneficially, one hundred percent (100%) ofthe issued and outstanding equity securities of any of its Subsidiaries (exceptas otherwise permitted pursuant to Section 5.3) in each instance inclauses (i), (ii), (iii) and (iv), free and clear of all Liens, rights,options, warrants or other similar agreements or understandings, other thanLiens in favor of Agent, for the benefit of Agent; or (vi) a “Change ofControl” (as defined in the High Yield Unsecured Indenture) shall haveoccurred; or

###  

### (m)                               Invalidityof Subordination Provisions.   The subordination provisions of anyagreement or instrument governing any Subordinated Indebtedness shall for anyreason be revoked or invalidated, or otherwise cease to be in full force andeffect, or any Person shall contest in any manner the validity orenforceability thereof or deny that it has any further liability or obligationthereunder, or the Obligations, for any reason shall not have the prioritycontemplated by this Agreement or such subordination provisions; or

###  

### (n)                                 Failureto Procure and Pay Acceptable Capital Contributions.

###  

(i)                                     If required by Section 5.11(h)(vii) at the time, ifany, that (i) the Grand Valley Earn-Out Obligation becomes due and payablein accordance with the provisions of Section 1.4(b) of theGrand Valley Asset Purchase Agreement as in effect on the First Amendment ClosingDate and (ii) all of the conditions specified in clauses (i) through (vi) ofSection 5.11(h) shall have been satisfied, the Borrower shallfail to receive, and thereafter contribute to Grand Valley Acquisition Sub,proceeds of Acceptable Capital Contributions in an aggregate amount equal to atleast fifty percent (50%) of the Restricted Payment in respect of the GrandValley Earn-Out Obligation on or before the date such Restricted Payment is dueand payable or otherwise fails to use such proceeds for such purpose on atimely basis;

 

53

----

 

(ii)                                  If required by Section 5.11(i)(vii) at the time, ifany, that (i) any portion of the Dimension Earn-Out Obligation becomes dueand payable in accordance with the provisions of Section 1.6(c) ofthe Dimension Purchase Agreement as in effect on the Second Amendment ClosingDate and (ii) all of the conditions specified in clauses (i) through (vi) ofSection 5.11(i) shall have been satisfied, the Borrower shallfail to receive proceeds of Acceptable Capital Contributions in an aggregateamount equal to at least fifty percent (50%) of the Restricted Payment inrespect of such portion of the Dimension Earn-Out Obligation on or before thedate such Restricted Payment is due and payable or otherwise fails to use suchproceeds for such purpose on a timely basis; or

 

(iii)                               If the Borrower shall fail to finance at least fifty percent (50%)of any future expenditures with respect to transaction costs related to theDimension Acquisition with Acceptable Capital Contributions; or

 

### (o)                                 Revocationunder Guaranty or Grand Valley Guaranty.  If any of the Borrower’s Subsidiariesrevokes, terminates, discontinues, or otherwise seeks to vacate, invalidate,set aside, overturn or eliminate its obligations under, any portion of theGuaranty or the Grand Valley Guaranty pursuant to Section 8thereof, or notifies the Borrower or the Agent of its intention to undertakeany of the foregoing.

###  

## 7.2                                 Remedies.  Upon the occurrence andduring the continuation of any Event of Default, the Agent may, and shall atthe request of the Required Lenders:

##  

### (a)                                  declareall or any portion of the Commitment of each Lender to make Loans or issueLender Letters of Credit or Letter of Credit Participation Agreements to beterminated, whereupon such Commitments shall forthwith be terminated;

###  

### (b)                                 declareall or any portion of the unpaid principal amount of all outstanding Loans, allinterest accrued and unpaid thereon, and all other amounts owing or payablehereunder or under any other Loan Document to be immediately due and payable;without presentment, demand, protest or other notice of any kind, all of whichare hereby expressly waived by the Borrower; and

###  

### (c)                                  exerciseon behalf of itself and the Lenders all rights and remedies available to it andthe Lenders under the Loan Documents or applicable law;

###  

provided, however, that upon the occurrence of any event specified insubsections 7.1(f) or 7.1(g) above (in the case of clause (i) ofsubsection 7.1(g) upon the expiration of the sixty (60) day periodmentioned therein), the obligation of each Lender to make Loans and theobligation of Agent to issue Lender Letters of Credit and Letter of CreditParticipation Agreements shall automatically terminate and the unpaid principalamount of all outstanding Loans and all interest and other amounts as aforesaidshall automatically become due and payable without further act of the Agent orany Lender.

 

54

----

 

## 7.3                                 RightsNot Exclusive. The rights provided for in this Agreement and the other Loan Documentsare cumulative and are not exclusive of any other rights, powers, privileges orremedies provided by law or in equity, or under any other instrument, documentor agreement now existing or hereafter arising.

##  

## 7.4                                 CashCollateral for Letters of Credit.  If an Event of Default has occurred and iscontinuing or this Agreement (or the Revolving Loan Commitment) shall beterminated for any reason or the Term Loans and CapEx Loans have been paid infull, then the Agent may, and upon request of the Lenders holding at leastsixty-six and two-thirds percent (662/3%) of the Revolving LoanCommitments shall, demand (which demand shall be deemed to have been deliveredautomatically upon any acceleration of the Loans and other obligationshereunder pursuant to Section 7.2 hereof), and the Borrower shallthereupon deliver to the Agent, to be held for the benefit of the Agent and theLenders entitled thereto, an amount of cash equal to the amount of Letter ofCredit Participation Liability (determined in accordance with subsection 1.1(c) hereof)as additional collateral security for the Borrower’s Obligations in respect ofany outstanding Lender Letter of Credit and Letter of Credit ParticipationAgreement.  The Agent may at any timeapply any or all of such cash and cash collateral to the payment of any or allof the Borrower’s Obligations in respect of any Lender Letters of Credit orLetter of Credit Participation Agreements. Pending such application, the Agent may (but shall not be obligated to)invest the same in an interest bearing account in the Agent’s name, for thebenefit of the Agent and the Lenders entitled thereto, under which deposits areavailable for immediate withdrawal, at such bank or financial institution asthe Agent may, in its discretion, select.

##  

# ARTICLE VIII - THE AGENT

 

## 8.1                                 Appointmentand Authorization. Each Lender hereby irrevocably appoints, designates and authorizes theAgent to take such action on its behalf under the provisions of this Agreementand each other Loan Document and to exercise such powers and perform suchduties as are expressly delegated to it by the terms of this Agreement or anyother Loan Document, together with such powers as are reasonably incidentalthereto.  Notwithstanding any provisionto the contrary contained elsewhere in this Agreement or in any other LoanDocument, the Agent shall not have any duties or responsibilities, except thoseexpressly set forth herein, nor shall the Agent have or be deemed to have anyfiduciary relationship with any Lender, and no implied covenants, functions,responsibilities, duties, obligations or liabilities shall be read into thisAgreement or any other Loan Document or otherwise exist against the Agent.

##  

## 8.2                                 Delegationof Duties. The Agent may execute any of its duties under this Agreement or anyother Loan Document by or through agents, employees or attorneys-in-fact andshall be entitled to advice of counsel concerning all matters pertaining tosuch duties.  The Agent shall not beresponsible for the negligence or misconduct of any agent or attorney-in-factthat it selects with reasonable care.

##  

## 8.3                                 Liabilityof Agent. None of the Agent-Related Persons shall (i) be liable for anyaction taken or omitted to be taken by any of them under or in connection withthis Agreement or any other Loan Document (except for its own gross negligenceor willful misconduct, as determined by a court of competent jurisdiction), or (ii) beresponsible in any manner to any of

 

55

----

 

## theLenders for any recital, statement, representation or warranty made by theBorrower or any of its Subsidiaries, or any officer thereof, contained in thisAgreement or in any other Loan Document, or in any certificate, report,statement or other document referred to or provided for in, or received by theAgent under or in connection with, this Agreement or any other Loan Document,or for the value of any Collateral or the validity, effectiveness, genuineness,enforceability or sufficiency of this Agreement or any other Loan Document, orfor any failure of the Borrower or any other party to any Loan Document toperform its obligations hereunder or thereunder.  No Agent-Related Person shall be under anyobligation to any Lender to ascertain or to inquire as to the observance orperformance of any of the agreements contained in, or conditions of, thisAgreement or any other Loan Document, or to inspect the Property, books orrecords of the Borrower or any of its Subsidiaries or Affiliates.

##  

## 8.4                                 Relianceby Agent. The Agent shall be entitled to rely, and shall be fully protected inrelying, upon any writing, resolution, notice, consent, certificate, affidavit,letter, telegram, facsimile or telephone message, statement or other documentor conversation believed by it to be genuine and to have been signed, sent ormade by the proper Person or Persons, and upon advice and statements of legalcounsel (including counsel to the Borrower), independent accountants and otherexperts selected by the Agent.  The Agentshall be fully justified in failing or refusing to take any action under thisAgreement or any other Loan Document unless it shall first receive such adviceor concurrence of the Lenders (or, where an action or waiver need only beapproved by the Required Lenders, by the Required Lenders) as it deemsappropriate and, if it so requests, it shall first be indemnified to itssatisfaction by the Lenders against any and all liability and expense which maybe incurred by it by reason of taking or continuing to take any suchaction.  The Agent shall in all cases befully protected in acting, or in refraining from acting, under this Agreementor any other Loan Document in accordance with a request or consent of theLenders (or, where an action or waiver need only be approved by the RequiredLenders, by the Required Lenders) and such request and any action taken orfailure to act pursuant thereto shall be binding upon all of the Lenders.

##  

## 8.5                                 Noticeof Default. The Agent shall not be deemed to have knowledge or notice of theoccurrence of any Default or Event of Default, except with respect to defaultsin the payment of principal, interest and fees required to be paid to the Agentfor the account of the Lenders, unless the Agent shall have received writtennotice from a Lender or the Borrower referring to this Agreement, describingsuch Default or Event of Default and stating that such notice is a “notice ofdefault.”  In the event that the Agentreceives such a notice, the Agent shall give notice thereof to theLenders.  The Agent shall take suchaction with respect to such Default or Event of Default as shall be requestedby the Required Lenders in accordance with Article VII; provided, however,that unless and until the Agent shall have received any such request, the Agentmay (but shall not be obligated to) take such action, or refrain from takingsuch action, with respect to such Default or Event of Default as it shall deemadvisable or in the best interest of the Lenders.

##  

## 8.6                                 CreditDecision. Each Lender expressly acknowledges that none of the Agent-RelatedPersons has made any representation or warranty to it and that no act by theAgent hereinafter taken, including any review of the affairs of the Borrowerand its Subsidiaries shall be deemed to constitute any representation orwarranty by the Agent to any Lender. Each Lender represents to the Agent that it has, independently andwithout reliance upon the Agent

 

56

----

 

## andbased on such documents and information as it has deemed appropriate, made itsown appraisal of and investigation into the business, prospects, operations,property, financial and other condition and creditworthiness of the Borrowerand its Subsidiaries, and all applicable bank regulatory laws relating to thetransactions contemplated thereby, and made its own decision to enter into thisAgreement and extend credit to the Borrower hereunder.  Each Lender also represents that it will,independently and without reliance upon the Agent and based on such documentsand information as it shall deem appropriate at the time, continue to make itsown credit analysis, appraisals and decisions in taking or not taking actionunder this Agreement and the other Loan Documents, and to make suchinvestigations as it deems necessary to inform itself as to the business,prospects, operations, property, financial and other condition andcreditworthiness of the Borrower.  Exceptfor notices, reports and other documents expressly herein required to befurnished to the Lenders by the Agent, the Agent shall not have any duty orresponsibility to provide any Lender with any credit or other informationconcerning the business, prospects, operations, property, financial and othercondition or creditworthiness of the Borrower which may come into thepossession of the Agent.

##  

## 8.7                                 Indemnification.  Whether or not thetransactions contemplated hereby shall be consummated, upon demand therefor theLenders shall indemnify the Agent (to the extent not reimbursed by or on behalfof the Borrower and without limiting the obligation of the Borrower to do so),severally and ratably from and against any and all liabilities, obligations,losses, damages, penalties, actions, judgments, suits, costs, expenses anddisbursements of any kind whatsoever which may at any time (including at anytime following the repayment of the Loans and the termination or resignation ofthe Agent) be imposed on, incurred by or asserted against the Agent in any wayrelating to or arising out of this Agreement or any document contemplated by orreferred to herein or the transactions contemplated hereby or thereby or anyaction taken or omitted by the Agent under or in connection with any of theforegoing; provided, however, that no Lender shall be liable forthe payment to the Agent of any portion of such liabilities, obligations,losses, damages, penalties, actions, judgments, suits, costs, expenses ordisbursements to the extent resulting from the Agent’s gross negligence orwillful misconduct as determined by a court of competent jurisdiction.  In addition, each Lender shall reimburse theAgent upon demand for its ratable share of any costs or out-of-pocket expenses(including Attorney Costs) incurred by the Agent in connection with thepreparation, execution, delivery, administration, modification, amendment orenforcement (whether through negotiations, legal proceedings or otherwise) of,or legal advice in respect of rights or responsibilities under, this Agreement,any other Loan Document, or any document contemplated by or referred to hereinto the extent that the Agent is not reimbursed for such expenses by or onbehalf of the Borrower.  Without limitingthe generality of the foregoing, if the Internal Revenue Service or any other GovernmentalAuthority of the United States or other jurisdiction asserts a claim that theAgent did not properly withhold tax from amounts paid to or for the account ofany Lender (because the appropriate form was not delivered, was not properlyexecuted, or because such Lender failed to notify the Agent of a change incircumstances which rendered the exemption from, or reduction of, withholdingtax ineffective, or for any other reason) such Lender shall indemnify the Agentfully for all amounts paid, directly or indirectly, by the Agent as tax orotherwise, including penalties and interest, and including any taxes imposed byany jurisdiction on the amounts payable to the Agent under this Section 8.7,together with all related costs and expenses (including Attorney Costs).  The obligation of the Lenders in this Section 8.7shall survive the payment of all Obligations hereunder.

 

57

----

 

## 8.8                                 Agentin Individual Capacity.  Antares and its Affiliates may make loans to,issue letters of credit for the account of, accept deposits from, acquireequity interests in and generally engage in any kind of banking, trust,financial advisory or other business with the Borrower and its Subsidiaries andAffiliates as though Antares were not the Agent hereunder and without notice toor consent of the Lenders.  With respectto its Loans, Antares shall have the same rights and powers under thisAgreement as any other Lender and may exercise the same as though it were notthe Agent, and the terms “Lender” and “Lenders” shall include Antares in itsindividual capacity.

##  

## 8.9                                 SuccessorAgent.  ThePerson then acting as Agent may resign as Agent upon thirty (30) days’ priornotice to the Lenders and to the Borrower. If such Person shall resign as Agent under this Agreement, the RequiredLenders shall appoint from among the Lenders a successor agent for theLenders.  If no successor agent isappointed prior to the effective date of the resignation of the Agent, theAgent may thereupon appoint a successor agent from among the Lenders reasonablyacceptable to the Borrower.  Upon theacceptance of its appointment as successor agent hereunder, such successoragent shall succeed to all the rights, powers and duties of the retiring Agentand the term “Agent” shall mean such successor agent and the retiring Agent’sappointment, powers and duties as Agent shall terminate.  After any retiring Agent’s resignationhereunder as Agent, the provisions of this Article VIII and Sections 9.4and 9.5 shall inure to its benefit as to any actions taken or omitted to betaken by it while it was Agent under this Agreement.  If no successor agent has acceptedappointment as Agent by the date which is thirty (30) days following a retiringAgent’s notice of resignation (or, if later, ten (10) days after the dateupon which the Agent designates a successor agent), the retiring Agent’sresignation shall nevertheless thereupon become effective and the Lenders shallperform all of the duties of the Agent hereunder until such time, if any, asthe Required Lenders appoint a successor agent as provided for above.

##  

## 8.10                           Collateral Matters.

##  

### (a)                                  TheAgent is authorized (but not required) on behalf of all the Lenders, withoutthe necessity of any notice to or further consent from the Lenders, from timeto time to take any action with respect to any Collateral or the CollateralDocuments which may be necessary to perfect and maintain perfected the securityinterest in and Liens upon the Collateral granted pursuant to the Collateral Documents.

###  

### (b)                                 TheLenders irrevocably authorize the Agent, at its option and in its discretion,to release any Lien granted to or held by the Agent upon any Collateral:

###  

#### (i)                                     upon termination of the Commitments and payment in full of all Loansand all other Obligations then payable under this Agreement and under any otherLoan Document;

####  

#### (ii)                                  constituting Property sold or to be sold or disposed of as part ofor in connection with any disposition permitted hereunder;

####  

#### (iii)                               consisting of an instrument evidencing Indebtedness or of any otherdebt instrument, if the Indebtedness evidenced thereby has been paid in full;or

 

58

----

 

#### (iv)                              if approved, authorized or ratified in writing by the RequiredLenders or all the Lenders, as the case may be, as provided in subsection 9.1(f).

####  

Upon request by the Agent at any time, theLenders will confirm in writing the Agent’s authority to release particulartypes or items of Collateral pursuant to this subsection 8.10(b).

 

### (c)                                  EachLender agrees with and in favor of each other Lender (which agreement shall notbe for the benefit of the Borrower or any of its Subsidiaries) that theBorrower’s obligation to such Lender under this Agreement and the other LoanDocuments shall be equally and ratably secured by any real property and/orother collateral now or hereafter securing any obligations of the Borrower orany of its Subsidiaries to such Lender, whether or not the same constitutesCollateral hereunder.

###  

# ARTICLE IX - MISCELLANEOUS

 

## 9.1                                 Amendmentsand Waivers. No amendment or waiver of any provision of this Agreement or any otherLoan Document, and no consent with respect to any departure by the Borrowertherefrom, shall be effective unless the same shall be in writing and signed bythe Required Lenders, the Borrower and acknowledged by the Agent, and then suchwaiver shall be effective only in the specific instance and for the specificpurpose for which given; provided, however, that no such waiver,amendment, or consent shall, unless in writing and signed by all the Lenders,the Borrower and acknowledged by the Agent, do any of the following:

##  

### (a)                                  increaseor extend the Commitment of any Lender, reinstate any Commitment terminatedpursuant to subsection 7.2(a), increase the Aggregate Revolving LoanCommitment or extend the CapEx Line Termination Date;

###  

### (b)                                 postponeor delay any date fixed for, or waive, any payment of principal, interest, feesor other amounts due to the Lenders (or any of them) hereunder or under anyother Loan Document (other than any postponement or delay of any date fixed forany mandatory prepayment of the Loans pursuant to subsection 1.8(c) or1.8(d));

###  

### (c)                                  reducethe principal of, or the rate of interest specified herein or the amount ofinterest payable in cash specified herein on any Loan, or of any fees or otheramounts payable hereunder or under any other Loan Document;

###  

### (d)                                 changethe percentage of the Commitments or of the aggregate unpaid principal amountof the Loans which shall be required for the Lenders or any of them to take anyaction hereunder;

###  

### (e)                                  amendthis Section 9.1 or the definition of “Required Lenders” or any provisionproviding for consent or other action by all Lenders; or

###  

### (f)                                    dischargethe Borrower or any of its Subsidiaries from their respective paymentObligations under the Loan Documents, or release all or substantially all ofthe Collateral, except as otherwise may be provided in this Agreement or theother Loan Documents;

 

59

----

 

and, providedfurther, that noamendment, waiver or consent shall, unless in writing and signed by the Agentin addition to the Required Lenders or all the Lenders, as the case may be,affect the rights or duties of the Agent under this Agreement or any other LoanDocument.

 

## 9.2                                 Notices.

##  

### (a)                                  Allnotices, requests and other communications provided for hereunder shall be inwriting (including, unless the context expressly otherwise provides, byfacsimile transmission) and mailed by certified or registered mail, faxed ordelivered by personal or overnight delivery, to the address or facsimile numberspecified for notices on the applicable signature page hereof; or, ifdirected to the Borrower or the Agent, to such other address as shall bedesignated by such party in a written notice to each of the other partieshereto given in compliance herewith, or, if directed to any other party hereto,to such other address as shall be designated by such party in a written noticegiven in compliance herewith to the Borrower and the Agent.

###  

### (b)                                 Allsuch notices, requests and communications shall be effective (i) ifdelivered in person, when delivered, (ii) if delivered by facsimiletransmission on the date of transmission if transmitted on a Business Daybefore 4:00 p.m. Chicago time, otherwise on the next Business Day, (iii) ifdelivered by overnight courier, one (1) Business Day after delivery to thecourier properly addressed and (iv) if mailed, upon the third (3rd)Business Day after the date deposited into the U.S. Mail, certified orregistered; except that notices pursuant to Article I shall not beeffective until actually received by the Agent.

###  

### (c)                                  TheBorrower acknowledges and agrees that any agreement of the Agent and theLenders in Article I hereof to receive certain notices by telephone andfacsimile transmission is solely for the convenience and at the request of theBorrower.  The Agent and the Lendersshall be entitled to rely on the authority of any Person purporting to be aPerson authorized by the Borrower to give such notice and the Agent and theLenders shall not have any liability to the Borrower or other Persons onaccount of any action taken or not taken by the Agent or the Lenders inreliance upon such telephonic or facsimile notice.  The obligation of the Borrower to repay theLoans shall not be affected in any way or to any extent by any failure by theAgent and the Lenders to receive written confirmation of any telephonic orfacsimile notice or the receipt by the Agent and the Lenders of a confirmationwhich is at variance with the terms understood by the Agent and the Lenders tobe contained in the telephonic or facsimile notice.

###  

## 9.3                                 NoWaiver; Cumulative Remedies.  No failure to exercise and no delay inexercising, on the part of the Agent or any Lender, any right, remedy, power orprivilege hereunder, shall operate as a waiver thereof; nor shall any single orpartial exercise of any right, remedy, power or privilege hereunder precludeany other or further exercise thereof or the exercise of any other right, remedy,power or privilege.  No course of dealingbetween the Borrower, any Affiliate of the Borrower, Agent or any Lender shallbe effective to amend, modify or discharge any provision of this Agreement orany of the other Loan Documents.

##  

## 9.4                                 Costsand Expenses. Whether or not the transactions contemplated hereby shall beconsummated, the Borrower shall pay or reimburse:

 

60

----

 

### (a)                                  Antares(including in its capacity as Agent) within five (5) Business Days after demand(except as otherwise provided in subsection 2.1(f)) for all reasonableout-of-pocket costs and expenses incurred by Antares (including in its capacityas Agent) in connection with the development, preparation, syndication,delivery, administration and execution of, and any amendment, supplement,waiver or modification to (in each case, whether or not consummated), thisAgreement, any other Loan Document and any other documents prepared inconnection herewith or therewith, and the consummation of the transactionscontemplated hereby and thereby, including the Attorney Costs incurred byAntares (including in its capacity as Agent) with respect thereto and for allout-of-pocket costs and expenses incurred by it in connection with theenforcement, attempted enforcement, or preservation of any rights or remediesduring the existence of an Event of Default (including in connection with any “workout”or restructuring regarding the Loans, and including in any InsolvencyProceeding or appellate proceeding) under this Agreement, any other LoanDocument, and any such other documents;

###  

### (b)                                 payor reimburse Lenders within five (5) Business Days after demand for allAttorney Costs of one law firm, on behalf of all Lenders (other than Antares)incurred by them in connection with the enforcement, attempted enforcement, or preservationof any rights or remedies during the existence of an Event of Default(including in connection with any “workout” or restructuring regarding theLoans, and including in any Insolvency Proceeding or appellate proceeding)under this Agreement, any other Loan Document; and

###  

### (c)                                  payor reimburse Agent within five (5) Business Days after demand for allout-of-pocket appraisal, audit, environmental inspection and review (includingthe allocated cost of such internal services), search and filing costs, feesand expenses, incurred or sustained by Agent in connection with the mattersreferred to under clause (a) of this Section 9.4.

###  

### The obligations of this Section 9.4 shall survivepayment of all other Obligations.

###  

## 9.5                                 Indemnity.  The Borrower shallindemnify, defend and hold harmless each Lender, the Agent and each of theirrespective officers, directors, employees, counsel, agents andattorneys-in-fact (each, an “Indemnified Person”) from and against any and allliabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, charges, expenses or disbursements (including Attorney Costs):

##  

### (a)                                  ofany kind or nature whatsoever with respect to the enforcement of this Agreementand any other Loan Documents, or the transactions contemplated hereby andthereby, and with respect to any investigation, litigation or proceeding(including any Insolvency Proceeding or appellate proceeding) related to thisAgreement or the Loans or the transactions contemplated hereby or the use ofthe proceeds thereof, whether or not any Indemnified Person is a party thereto;and

###  

### (b)                                 whichmay be incurred by or asserted against such Indemnified Person in connectionwith or arising out of any pending or threatened investigation, litigation orproceeding, or any action taken by any Person, with respect to anyEnvironmental Claim arising out of or related to any Property of the Borroweror any of its Subsidiaries;

 

61

----

 

(all the foregoing, collectively, the “IndemnifiedLiabilities”); provided, that the Borrower shall have no obligationhereunder to any Indemnified Person with respect to Indemnified Liabilities tothe extent arising from the gross negligence or willful misconduct of suchIndemnified Person as determined by a court of competent jurisdiction.

 

No action taken by legal counsel chosen bythe Agent or any Lender in defending against any investigation, litigation orproceeding or requested remedial, removal or response action shall vitiate orany way impair the Borrower’s obligation and duty hereunder to indemnify andhold harmless the Agent and each Lender. In no event shall any site visit, observation, or testing by the Agentor any Lender (or any contractee of the Agent or any Lender) be deemed arepresentation or warranty that Hazardous Materials are or are not present in,on, or under, the site, or that there has been or shall be compliance with anyEnvironmental Law.  Neither the Borrowernor any other Person is entitled to rely on any site visit, observation, ortesting by the Agent or any Lender. Neither the Agent nor any Lender owes any duty of care to protect theBorrower or any other Person against, or to inform the Borrower or any otherPerson of, any Hazardous Materials or any other adverse condition affecting anysite or Property.  Neither the Agent norany Lender shall be obligated to disclose to the Borrower or any other Personany report or findings made as a result of, or in connection with, any sitevisit, observation, or testing by the Agent or any Lender.

 

The obligations in this Section 9.5shall survive payment of all other Obligations. At the election of any Indemnified Person, the Borrower shall defendsuch Indemnified Person using legal counsel satisfactory to such IndemnifiedPerson in such Person’s sole discretion, at the sole cost and expense of theBorrower.  All amounts owing under this Section 9.5shall be paid within thirty (30) days after demand.

 

## 9.6                                 Marshaling;Payments Set Aside. Neither the Agent nor any Lender shall be under any obligation tomarshal any assets in favor of the Borrower or any other Person or against orin payment of any or all of the Obligations. To the extent that the Borrower makes a payment or payments to the Agentor any Lender, or the Agent or any Lender enforces its Liens or exercises itsrights of setoff, and such payment or payments or the proceeds of suchenforcement or setoff or any part thereof are subsequently invalidated,declared to be fraudulent or preferential, set aside or required (includingpursuant to any settlement entered into by the Agent in its discretion) to berepaid to a trustee, receiver or any other party in connection with anyInsolvency Proceeding, or otherwise, then:

##  

### (a)                                  tothe extent of such recovery the Obligation or part thereof originally intendedto be satisfied shall be revived and continued in full force and effect as ifsuch payment had not been made or such enforcement or setoff had not occurred;and

###  

### (b)                                 eachLender severally agrees to pay to the Agent upon demand its ratable share ofthe total amount so recovered from or repaid by the Agent.

###  

## 9.7                                 Successorsand Assigns. The provisions of this Agreement shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assigns; providedthat any assignment by any Lender shall be subject to the provisions of Section 9.8hereof, and

 

62

----

 

## providedfurther that the Borrower may not assign or transfer any of its rightsor obligations under this Agreement without the prior written consent of theAgent and each Lender.

##  

## 9.8                                 Assignments,Participations, etc.

##  

### (a)                                  AnyLender may, with the written consent of Borrower, which consent shall not beunreasonably withheld (provided that such consent of Borrower shall not berequired at any time that a Default or an Event of Default exists****or in connection with any assignment by aLender to another Lender, an Affiliate of a Lender or a Related Fund of aLender), and Agent (provided that such consent of the Agent shall not berequired in connection with any assignment and delegation by a Lender to anEligible Assignee that is an Affiliate of such Lender), at any time assign anddelegate to one or more Eligible Assignees (each an “Assignee”) all, or anypart of, the Loans, the Commitments and the other rights and obligations ofsuch Lender hereunder, in a minimum amount of $5,000,000 (or such lesser amountto which Agent, in its sole discretion, may agree) or, if less, the entireCommitment or Loan(s) of such Lender; provided, that, theBorrower and the Agent may continue to deal solely and directly with suchLender in connection with the interest so assigned to an Assignee until:

###  

#### (i)                                     written notice of such assignment, together with paymentinstructions, addresses and related information with respect to the Assignee,shall have been given to the Borrower and the Agent by such Lender and theAssignee;

####  

#### (ii)                                  such Lender and its Assignee shall have delivered to the Borrowerand the Agent an Assignment and Acceptance in form and substance reasonablysatisfactory to Agent, such Lender and its Assignee (an “Assignment andAcceptance”); and

####  

#### (iii)                               the assignor Lender or the Assignee has paid to the Agent a processingfee in the amount of $3,500; provided no processing fee shall berequired to be paid in connection with an assignment by a Lender to an EligibleAssignee that is an Affiliate of such Lender or a Related Fund of such Lender.

####  

### (b)                                 Subjectto the provisions of subsection 9.8(f) below, from and after the datethat the Agent notifies the assignor Lender that the Agent has received andprovided its consent with respect to an executed Assignment and Acceptance andpayment of the above-referenced processing fee (if applicable):

###  

#### (i)                                     the Assignee thereunder shall be a party hereto and, to the extentthat rights and obligations hereunder have been assigned to it pursuant to suchAssignment and Acceptance, shall have the rights and obligations of a Lenderunder this Agreement and the other Loan Documents; and

####  

#### (ii)                                  the assignor Lender shall, to the extent that rights and obligationshereunder and under the other Loan Documents have been assigned by it pursuantto such Assignment and Acceptance, relinquish its rights and be released fromits obligations under the Loan Documents.

####  

### (c)                                  Subjectto the provisions of subsection 9.8(f) below, immediately upon themaking of the processing fee payment to the Agent in respect of the Assignmentand Acceptance,

 

63

----

 

### ifapplicable, this Agreement shall be deemed to be amended to the extent, butonly to the extent, necessary to reflect the addition of the Assignee and theresulting adjustment of the Commitments arising therefrom.  The Commitment allocated to each Assigneeshall reduce such Commitment of the assigning Lender to the same extent.

###  

### (d)                                 AnyLender may at any time sell to one or more commercial banks or other Personsnot Affiliates of the Borrower (a “Participant”) participating interests in anyLoans, the Commitment of that Lender and the other interests of that Lender(the “Originating Lender”) hereunder and under the other Loan Documents; provided,however, that:

###  

#### (i)                                     the Originating Lender’s obligations under this Agreement shallremain unchanged;

####  

#### (ii)                                  the Originating Lender shall remain solely responsible for theperformance of such obligations;

####  

#### (iii)                               the Borrower and the Agent shall continue to deal solely anddirectly with the Originating Lender in connection with the Originating Lender’srights and obligations under this Agreement and the other Loan Documents; and

####  

#### (iv)                              no Lender shall transfer or grant any participating interest underwhich the Participant shall have rights to approve any amendment to, or any consentor waiver with respect to, this Agreement or any other Loan Document, except tothe extent such amendment, consent or waiver would require unanimous consent ofthe Lenders as described in the firstproviso to Section 9.1.

####  

In the case of any such participation, theParticipant shall not have any rights under this Agreement, or any of the otherLoan Documents, and all amounts payable by the Borrower hereunder shall bedetermined as if such Lender had not sold such participation.

 

### (e)                                  Notwithstandingany other provision contained in this Agreement or any other Loan Document tothe contrary, any Lender may (i) assign all or any portion of the Loansheld by it to any Federal Reserve Bank or the United States Treasury as collateralsecurity pursuant to Regulation A of the Federal Reserve Board and anyOperating Circular issued by such Federal Reserve Bank, or (ii) pledge allor any portion of the Loans held by it (and Notes evidencing such Loans) to itsunaffiliated lenders for collateral security purposes; provided, thatany payment in respect of such assigned Loans made by the Borrower to or forthe account of the assigning or pledging Lender in accordance with the terms ofthis Agreement shall satisfy the Borrower’s obligations hereunder in respect tosuch assigned or pledged Loans to the extent of such payment.  No such assignment or pledge shall releasethe assigning Lender from its obligations hereunder.

###  

### (f)                                    TheAgent shall, on behalf of the Borrower, maintain at its address referred to in Section 9.2a copy of each Assignment and Acceptance delivered to it and a register (the “Register”)for the recordation of the names and addresses of the Lenders and theCommitment of, and principal amount of the Loans owing to, each Lender fromtime to time.  The entries in theRegister shall be conclusive, in the absence of demonstrable error, and theBorrower, the Agent and the Lenders shall treat each Person whose name isrecorded in the Register as the

 

64

----

 

### ownerof the Commitments, Loans and any Notes evidencing such Loans recorded thereinfor all purposes of this Agreement.  Anyassignment of any Commitment and/or Loan, whether or not evidenced by a Note,shall be effective only upon appropriate entries with respect thereto beingmade in the Register.  Any assignment ortransfer of all or part of a Commitment and/or Loan evidenced by a Note shallbe registered on the Register only upon a surrender or registration ofassignment or transfer of the Note evidencing such Loan, accompanied by a dulyexecuted Assignment and Acceptance; thereupon one or more new Notes in the sameaggregate principal amount shall be issued to the designated assignee and, ifapplicable, assignor, and the old Notes shall be returned by the Agent to theBorrower marked “cancelled.”  TheRegister shall be available for inspection by the Borrower or any Lender (withrespect to any entry relating to such Lender’s Commitments and Loans) at anyreasonable time and from time to time upon reasonable prior notice.

###  

## 9.9                                 Confidentiality.  Each of the Agent and theLenders shall maintain and hold in confidence in accordance with its customaryprocedures for handling confidential information and in accordance with safeand sound banking practices, all nonpublic information that the Borrower or anyof its Subsidiaries, or any of their authorized representatives, furnishes tothe Agent or any Lender pursuant to the requirements of this Agreement (“ConfidentialInformation”), other than any such Confidential Information that becomesgenerally available to the public other than as a result of a breach by theAgent or any Lender of its obligations hereunder or that is or becomesavailable to the Agent or such Lender from a source other than the Borrower orany of its Subsidiaries, or any of their authorized representatives, and thatis not, to the actual knowledge of the recipient thereof, subject toobligations of confidentiality with respect thereto; provided, however,that the Agent and each Lender shall in any event have the right to delivercopies of any such documents, and to disclose any such information, to:

##  

### (a)                                  itsdirectors, officers, trustees, partners, employees, agents, attorneys,professional consultants, portfolio management services and rating agencies; provided,that such information shall be disclosed to the extent a legitimate businesspurpose exists for doing so and such purpose relates to the existingrelationship among the Borrower, the Agent and the Lenders evidenced by thisAgreement, the credit facility evidenced hereby or the loan portfolio of theAgent or such Lender containing the credit evidenced hereby;

###  

### (b)                                 anyother Lender and any successor Agent;

###  

### (c)                                  anypotential Assignee or potential Participant to which such Lender offers to sellany Loan or any part thereof or interest or participation therein or any otherPerson necessary for purposes of effectuating any transaction contemplated bysubsection 9.8(e) (provided such Person agrees to keep suchinformation confidential on the terms set forth in this Section 9.9);

###  

### (d)                                 anyfederal or state regulatory authority or examiner, or any insurance industryassociation or any stock exchange, regulating or having jurisdiction over theAgent or such Lender or any of their respective Affiliates; and

###  

### (e)                                  anyother Person to which such delivery or disclosure may be necessary orappropriate (i) in compliance with any applicable law, rule, regulation ororder, (ii) in response to any subpoena or other legal process or informalinvestigative demand, (iii) in connection with

 

65

----

 

### anylitigation to which the Agent or such Lender is a party, or (iv) inconnection with the enforcement of the rights and remedies of the Agent or theLenders under this Agreement and the other Loan Documents at any time when anEvent of Default shall have occurred and be continuing.

###  

## 9.10                           Set-off;Sharing of Payments.  In addition to any rights and remedies now orhereafter granted under applicable law, and not by way of limitation of anysuch rights or remedies at any time and from time to time, upon the occurrenceand during the continuation of any Event of Default, each Lender is herebyauthorized by the Borrower, with reasonably prompt subsequent notice to theBorrower or to any other Person (any prior or contemporaneous notice beinghereby expressly waived by the Borrower) to set off and to appropriate and toapply any and all:

##  

### (a)                                  balancesheld by such Lender at any of its offices for the account of the Borrower orany of its Subsidiaries (regardless of whether such balances are then due tothe Borrower or any of its Subsidiaries); and

###  

### (b)                                 otherProperty at any time held or owing by such Lender to or for the credit or forthe account of the Borrower or any of its Subsidiaries;

###  

against and on account of any and allObligations which are not paid when due; except that no Lender shall exercisesuch right without the prior written consent of the Agent.  Any Lender having a right to set off shallpurchase for cash (and the other Lenders shall sell) participations in eachsuch other Lender’s pro rata share of the Obligations as would be necessary tocause such Lender to share the benefit of such right of set-off with each otherLender in accordance with their respective pro rata shares of theObligations.  The Borrower agrees, to thefullest extent permitted by law, that (i) any Lender may exercise itsright to set off with respect to amounts in excess of its pro rata share of theObligations and may sell participations to other Lenders, and (ii) anyLender so purchasing a participation in the Obligations held by other Lendersmay exercise all rights of setoff, bankers’ lien, counterclaim or similarrights with respect to such participation as fully as if such Lender were adirect holder of Obligations in the amount of such participation.  The Borrower hereby grants to each Lender asecurity interest in all such deposits and other Property, whether now existingor hereafter arising, held by each Lender for the purposes set forth herein.

 

## 9.11                           Notificationof Addresses, Lending Offices, Etc.  Each Lender shall notify the Agent in writingof any changes in the address to which notices to such Lender should bedirected, of addresses of its Lending Office, of payment instructions inrespect of all payments to be made to it hereunder and of such otheradministrative information as the Agent shall reasonably request.

##  

## 9.12                           Counterparts.  This Agreement may beexecuted by one or more of the parties to this Agreement in any number ofseparate counterparts, each of which, when so executed, shall be deemed anoriginal, and all of said counterparts taken together shall be deemed toconstitute but one and the same instrument. A set of the copies of this Agreement signed by all the parties shall belodged with each of the Borrower and the Agent.

 

66

----

 

## 9.13                           Severability;Facsimile Signature.  The illegality or unenforceability of anyprovision of this Agreement or any instrument or agreement required hereundershall not in any way affect or impair the legality or enforceability of theremaining provisions of this Agreement or any instrument or agreement requiredhereunder.  Any Loan Document, or otheragreement, document or instrument, delivered by facsimile transmission shallhave the same force and effect as if the original thereof had been delivered.

##  

## 9.14                           Captions.  The captions and headingsof this Agreement are for convenience of reference only and shall not affectthe interpretation of this Agreement.

##  

## 9.15                           Independenceof Provisions. The parties hereto acknowledge that this Agreement and other LoanDocuments may use several different limitations, tests or measurements toregulate the same or similar matters, and that such limitations, tests andmeasurements are cumulative and must each be performed, except as expresslystated to the contrary in this Agreement.

##  

## 9.16                           Interpretation.  This Agreement is theresult of negotiations among and has been reviewed by counsel to the Agent, theBorrower and other parties hereto, and is the product of all partieshereto.  Accordingly, this Agreement andthe other Loan Documents shall not be construed against the Lenders or theAgent merely because of the Agent’s or Lenders’ involvement in the preparationof such documents and agreements.

##  

## 9.17                           No ThirdParties Benefited. This Agreement is made and entered into for the sole protection andlegal benefit of the Borrower, the Lenders and the Agent, and their permittedsuccessors and assigns, and no other Person shall be a direct or indirect legalbeneficiary of, or have any direct or indirect cause of action or claim inconnection with, this Agreement or any of the other Loan Documents.  Neither the Agent nor any Lender shall haveany obligation to any Person not a party to this Agreement or the other LoanDocuments.

##  

## 9.18                           GoverningLaw and Jurisdiction.

##  

##### **(A)**                               THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OFILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES; PROVIDED, THATTHE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

##### ** **

##### **(B)**                               THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THENON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURTSITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF ORRELATING TO ANY LOAN DOCUMENT AND THE BORROWER HEREBY IRREVOCABLY AGREES THATALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD ANDDETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOWOR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDINGBROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT

 

67

----

 

##### **THE RIGHT OF AGENT OR ANYLENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHERJURISDICTION.  ANY JUDICIAL PROCEEDING BYTHE BORROWER AGAINST AGENT OR ANY LENDER OR ANY AFFILIATE THEREOF INVOLVING,DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, ORCONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,ILLINOIS.**

##### ** **

##### **(C)**                               THE BORROWER DESIGNATES AND APPOINTS CT CORPORATION SYSTEMAND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY THE BORROWER WHICHIRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALFSERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICEBEING HEREBY ACKNOWLEDGED BY THE BORROWER TO BE EFFECTIVE AND BINDING SERVICEIN EVERY RESPECT.  A COPY OF ANY SUCHPROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO THE BORROWER AT ITSADDRESS PROVIDED IN SECTION 9.2 EXCEPT THAT UNLESS OTHERWISE PROVIDED BYAPPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OFSERVICE OF PROCESS.  IF ANY AGENTAPPOINTED BY THE BORROWER REFUSES TO ACCEPT SERVICE, THE BORROWER HEREBY AGREESTHAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.  NOTHING HEREIN SHALL AFFECT THE RIGHT TOSERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

##### ** **

## 9.19                           Waiverof Jury Trial.**  THE BORROWER, THE LENDERS AND THE AGENT EACHWAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OFACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHERLOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANYACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THEPARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACTCLAIMS, TORT CLAIMS, OR OTHERWISE.  THEBORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OFACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIESFURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BYOPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHERPROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY ORENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISIONHEREOF OR THEREOF.  THIS WAIVER SHALLAPPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TOTHIS AGREEMENT AND THE OTHER LOAN DOCUMENTS**.

##  

## 9.20                           EntireAgreement; Release. This Agreement, together with the other Loan Documents, embodies theentire agreement and understanding among the Borrower, the Lenders and theAgent, and supersedes all prior or contemporaneous Agreements andunderstandings of

 

68

----

 

## suchPersons, oral or written, relating to the subject matter hereof and thereof,and any prior arrangements made with respect to the payment by the Borrower of(or any indemnification for) any fees, costs or expenses payable to or incurred(or to be incurred) by or on behalf of the Agent or the Lenders.  The Borrower has relied exclusively on theterms and provisions contained in this Agreement and the other Loan Documents inits execution and delivery hereof and thereof and entering into thetransactions which are the subject hereof and thereof.  Execution of this Agreement by the Borrowerconstitutes a full, complete and irrevocable release of any and all claimswhich the Borrower may have at law or in equity in respect of all priordiscussions and understandings, oral or written, relating to the subject matterof this Agreement and the other Loan Documents as of the date hereof.  Neither Agent nor any Lender shall be liableto the Borrower or any other Person on any theory of liability for any special,indirect, consequential or punitive damages.

##  

## 9.21                           PatriotAct.  EachLender that is subject to the Patriot Act hereby notifies Borrower thatpursuant to the requirements of the Patriot Act, it is required to obtain,verify and record information that identifies Borrower, which informationincludes the name and address of Borrower and other information that will allowsuch Lender to identify Borrower in accordance with the Patriot Act.

##  

## 9.22                           Replacementof Lender. Within forty-five days after: (i) receipt by the Borrower ofwritten notice and demand from any Lender (an “Affected Lender”) for payment ofadditional costs as provided in Sections 10.1, 10.3 and/or 10.6; (ii) anydefault by a Lender in its obligation to make Loans hereunder after allconditions thereto have been satisfied, provided such default shall not havebeen cured; or (iii) any failure by any Lender to consent to a requestedamendment, waiver or modification to any Loan Document in which RequiredLenders have already consented to such amendment, waiver or modification butthe consent of each Lender (or each Lender having Revolving Loans, Term Loansor CapEx Loans, or each Lender directly affected thereby, as applicable) isrequired with respect thereto, the Borrower may, at its option, notify theAgent and such Affected Lender (or such defaulting or non-consenting Lender, asthe case may be) of the Borrower’s intention to obtain, at the Borrower’sexpense, a replacement Lender (“Replacement Lender”) for such Affected Lender(or such defaulting or non-consenting Lender, as the case may be), whichReplacement Lender shall be reasonably satisfactory to the Agent.  In the event the Borrower obtains aReplacement Lender within forty-five (45) days following notice of itsintention to do so, the Affected Lender (or defaulting or non-consentingLender, as the case may be) shall sell and assign its Loans and Commitments tosuch Replacement Lender, at par, provided that the Borrower has reimbursed suchAffected Lender for its increased costs for which it is entitled toreimbursement under this Agreement through the date of such sale andassignment.  In the event that a replacedLender does not execute an Assignment and Acceptance pursuant to Section 9.8within five (5) Business Days after receipt by such replaced Lender ofnotice of replacement pursuant to this Section 9.22 and presentation tosuch replaced Lender of an Assignment and Acceptance evidencing an assignmentpursuant to this Section 9.22, the Borrower shall be entitled (but notobligated) to execute such an Assignment and Acceptance on behalf of such replacedLender, and any such Assignment and Acceptance so executed by the Borrower, theReplacement Lender and the Agent, shall be effective for purposes of this Section 9.22and Section 9.8.  Upon any suchassignment and payment and compliance with the other provisions of Section 9.8,such replaced Lender shall no

 

69

----

 

## longerconstitute a “Lender” for purposes hereof; provided, any rights of suchreplaced Lender to indemnification hereunder shall survive as to such replacedLender.

##  

## 9.23                           ContinuedEffectiveness; No Novation.  Anything contained herein to the contrarynotwithstanding, this Agreement is not intended to and shall not serve toeffect a novation of the Obligations under the Original Credit Agreement.  Instead, it is the express intention of theparties hereto to reaffirm the indebtedness created under the Original CreditAgreement which is evidenced by the notes provided for therein and secured bythe Collateral.  The Borroweracknowledges and confirms that the liens and security interests grantedpursuant to the Loan Documents secure the indebtedness, liabilities andobligations of the Borrower to the Agent and the Lenders under the OriginalCredit Agreement, as amended and restated hereby, and that the term “Obligations”as used in the Loan Documents (or any other term used therein to describe orrefer to the indebtedness, liabilities and obligations of the Borrower to theAgent and the Lenders) includes, without limitation, the indebtedness,liabilities and obligations of the Borrower under the Notes to be deliveredhereunder, and under the Original Credit Agreement, as amended and restatedhereby, as the same further may be amended, modified, supplemented and/orrestated from time to time.  The LoanDocuments and all agreements, instruments and documents executed or deliveredin connection with any of the foregoing shall each be deemed to be amended tothe extent necessary to give effect to the provisions of this Agreement.  Cross-references in the Loan Documents toparticular section numbers in the Original Credit Agreement shall bedeemed to be cross-references to the corresponding sections, as applicable, ofthis Agreement.

##  

# ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY

 

## 10.1                           Taxes.

##  

### (a)                                  Subjectto subsection 10.1(g), any and all payments by the Borrower to each Lenderor the Agent under this Agreement shall be made free and clear of, and withoutdeduction or withholding for, any and all present or future taxes, levies,imposts, deductions, charges or withholdings, and all liabilities with respectthereto, excluding, in the case of each Lender and the Agent, such taxes(including income taxes or franchise taxes) as are imposed on or measured byeach Lender’s net income by the jurisdiction under the laws of which suchLender or the Agent, as the case may be, is organized or maintains a LendingOffice, or any political subdivision thereof (all such non-excluded taxes,levies, imposts, deductions, charges, withholdings and liabilities beinghereinafter referred to as “Taxes”).

###  

### (b)                                 Inaddition, the Borrower shall pay any present or future stamp or documentary taxesor any other excise or property taxes, charges or similar levies which arisefrom any payment made hereunder or from the execution, delivery or registrationof, or otherwise with respect to, this Agreement or any other Loan Document(hereinafter referred to as “Other Taxes”).

###  

### (c)                                  Subjectto subsection 10.1(g), the Borrower shall indemnify and hold harmless eachLender and the Agent for the full amount of Taxes or Other Taxes (including anyTaxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 10.1)paid by

 

70

----

 

### suchLender or the Agent and any liability (including penalties, interest, additionsto tax and expenses) arising therefrom or with respect thereto, whether or not suchTaxes or Other Taxes were correctly or legally asserted; provided, thateach Lender or the Agent, as the case may be, making demand for such indemnitypayment shall provide the Borrower with evidence that such Lender or the Agent,as the case may be, has made payment of such Taxes or Other Taxes.  Payment under this indemnification shall bemade within thirty (30) days from the date any Lender or the Agent makeswritten demand therefor.

###  

### (d)                                 Ifthe Borrower shall be required by law to deduct or withhold any Taxes or OtherTaxes from or in respect of any sum payable hereunder to any Lender or theAgent, then, subject to subsection 10.1(g):

###  

#### (i)                                     the sum payable shall be increased as necessary so that after makingall required deductions (including deductions applicable to additional sumspayable under this Section 10.1) such Lender or the Agent, as the case maybe, receives an amount equal to the sum it would have received had no suchdeductions been made;

####  

#### (ii)                                  the Borrower shall make such deductions; and

####  

#### (iii)                               the Borrower shall pay the full amount deducted to the relevanttaxation authority or other authority in accordance with applicable law;

####  

provided, that, if any additional payment is made by the Borrower under thisclause (d) for the benefit of the Agent or any Lender and the Agent orsuch Lender, as applicable, determines that it has obtained a credit against, arelief or remission for, or repayment of, the underlying Tax or Other Tax fromthe appropriate taxing authority, then, to the extent the Agent or such Lender,as applicable, determines that such credit, relief, remission or repayment isin respect of, or calculated or determined with reference to, and retroactivelyapplies to, such additional payment made by the Borrower for the benefit of theAgent or such Lender pursuant to this clause (d), the Agent or such Lender, asapplicable, shall, to the extent that it can do so without prejudice to theretention of the amount of such credit, relief, remission or repayment, pay tothe Borrower such amount as the Agent or such Lender, as applicable, shalldetermine to be the amount which shall leave it (after such payment to theBorrower) in no better or worse after-tax position that it would have been inhad the respective withholding or deduction not been required.

 

### (e)                                  Withinthirty (30) days after the date of any payment by the Borrower of Taxes orOther Taxes, the Borrower shall furnish to the Agent the original or acertified copy of a receipt evidencing payment thereof, or other evidence ofpayment satisfactory to the Agent.

###  

### (f)                                    EachLender that is not a citizen or resident of the United States of America, acorporation, partnership or other entity created or organized in or under thelaws of the United States (or any jurisdiction thereof), or any estate or trustthat is subject to federal income taxation regardless of the source of itsincome (a ”Non-U.S. Lender”) shall deliver to the Borrower and the Agenttwo copies of each U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,or any subsequent versions thereof or successors thereto, or, in the case of aNon-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or881(c) of the Code with respect to payments of “portfolio interest,” a Form W-8BEN,or any subsequent

 

71

----

 

### versionsthereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8BEN,a certificate representing that such Non-U.S. Lender is not a “bank” forpurposes of Section 881(c) of the Code, is not a ten percent (10%)shareholder (within the meaning of Section 871(h)(3)(B) of the Code)of the Borrower and is not a controlled foreign corporation related to theBorrower (within the meaning of Section 864(d)(4) of the Code)),properly completed and duly executed by such Non-U.S. Lender claiming completeexemption from, or a reduced rate of, U.S. federal withholding tax on allpayments by the Borrower and its Subsidiaries under this Agreement and theother Loan Documents.  Such forms shall bedelivered by each Non-U.S. Lender on or before the date it becomes a party tothis Agreement.  In addition, eachNon-U.S. Lender shall deliver such forms promptly upon the obsolescence orinvalidity of any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notifythe Borrower at any time it determines that it is no longer in a position toprovide any previously delivered certificate to the Borrower (or any other formof certification adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of thissubsection, a Non-U.S. Lender shall not be required to deliver any formpursuant to this subsection that such Non-U.S. Lender is not legally ableto deliver.

###  

### (g)                                 TheBorrower will not be required to pay any additional amounts in respect ofUnited States Federal income tax pursuant to subsection 10.1(d) toany Lender for the account of any Lending Office of such Lender:

###  

#### (i)                                     if the obligation to pay such additional amounts would not have arisenbut for a failure by such Lender to comply with its obligations under subsection 10.1(f) inrespect of such Lending Office; or

####  

#### (ii)                                  if such Lender shall have delivered to the Borrower a Form W-8BENand/or Form W-8ECI (or any subsequent versions thereof or successorsthereto) in respect of such Lending Office pursuant to subsection 10.1(f),and such Lender shall not at any time be entitled to exemption from deductionor withholding of United States Federal income tax in respect of payments bythe Borrower hereunder for the account of such Lending Office for any reasonother than a change in United States law, treaty or regulations or in theofficial interpretation of such law or regulations by any GovernmentalAuthority charged with the interpretation or administration thereof (whether ornot having the force of law) after the date of delivery of such Form W-8BENand/or Form W-8ECI (or any subsequent versions thereof or successorsthereto); or

####  

#### (iii)                               if such Lender has been notified by the Internal Revenue Servicethat such Lender is subject to backup withholding for failing to reportinterest and dividends received, unless and except to the extent such notice isrevoked, terminated or otherwise overturned or vacated.

####  

### (h)                                 If,at any time, the Borrower requests any Lender to deliver any forms or otherdocumentation pursuant to subsection 10.1(f), then the Borrower shall, ondemand of such Lender through the Agent, reimburse such Lender for any costsand expenses (including Attorney Costs) reasonably incurred by such Lender inthe preparation or delivery of such forms or other documentation.

 

72

----

 

### (i)                                     Ifthe Borrower is required to pay additional amounts to any Lender or the Agentpursuant to subsection 10.1(d), then such Lender shall use its reasonablebest efforts (consistent with legal and regulatory restrictions) to change thejurisdiction of its Lending Office so as to eliminate any such additionalpayment by the Borrower which may thereafter accrue if such change in thejudgment of such Lender is not otherwise disadvantageous to such Lender.  Further, within thirty (30) days of writtenrequest of the Borrower therefor, the Agent or the applicable Lender, as thecase may be, shall execute and deliver to the Borrower, at the sole cost of theBorrower, such certificates, forms or other documents reasonably requested bythe Borrower that can be furnished consistent with the facts and which arereasonably necessary to assist the Borrower in applying for refunds of thosetaxes remitted hereunder.

###  

## 10.2                           Illegality.  (a)  If after the datehereof any Lender shall determine in good faith that the introduction of anyRequirement of Law, or any change in any Requirement of Law or in theinterpretation or administration thereof, has made it unlawful, or that anycentral bank or other Governmental Authority has asserted that it is unlawful,for any Lender or its Lending Office to make LIBOR Rate Loans, then, on noticethereof by such Lender to the Borrower through the Agent, the obligation ofthat Lender to make LIBOR Rate Loans shall be suspended until such Lender shallhave notified the Agent and the Borrower that the circumstances giving rise tosuch determination no longer exists.

##  

### (a)                                  Subjectto clause (c) below, if any Lender shall determine that it is unlawful tomaintain any LIBOR Rate Loan, the Borrower shall prepay in full all LIBOR RateLoans of such Lender then outstanding, together with interest accrued thereon,either on the last day of the Interest Period thereof if such Lender maylawfully continue to maintain such LIBOR Rate Loans to such day, orimmediately, if such Lender may not lawfully continue to maintain such LIBORRate Loans, together with any amounts required to be paid in connectiontherewith pursuant to Section 10.4.

###  

### (b)                                 Ifthe obligation of any Lender to make or maintain LIBOR Rate Loans has beenterminated, the Borrower may elect, by giving notice to such Lender through theAgent that all Loans which would otherwise be made by any such Lender as LIBORRate Loans shall be instead Base Rate Loans.

###  

### (c)                                  Beforegiving any notice to the Agent pursuant to this Section 10.2, the affectedLender shall designate a different Lending Office with respect to its LIBORRate Loans if such designation will avoid the need for giving such notice ormaking such demand and will not, in the judgment of the Lender, be illegal orotherwise disadvantageous to the Lender.

###  

## 10.3                           IncreasedCosts and Reduction of Return.

##  

### (a)                                  Ifany Lender shall determine in good faith that, due to either (i) theintroduction of, or any change in, or in the interpretation of, any law orregulation or (ii) the compliance with any guideline or request from anycentral bank or other Governmental Authority (whether or not having the forceof law), in the case of either clause (i) or (ii) subsequent to thedate hereof, there shall be any increase in the cost to such Lender of agreeingto make or making, funding or maintaining any LIBOR Rate Loans, then theBorrower shall be liable for, and shall from time to time, within thirty (30)days of demand therefor by such Lender (with a copy of such demand to

 

73

----

 

### theAgent), pay to the Agent for the account of such Lender, additional amounts asare sufficient to compensate such Lender for such increased costs.

###  

### (b)                                 Ifany Lender shall have determined in good faith that:

###  

#### (i)                                     the introduction of any Capital Adequacy Regulation;

####  

#### (ii)                                  any change in any Capital Adequacy Regulation;

####  

#### (iii)                               any change in the interpretation or administration of any CapitalAdequacy Regulation by any central bank or other Governmental Authority chargedwith the interpretation or administration thereof; or

####  

#### (iv)                              compliance by such Lender (or its Lending Office) or any entitycontrolling the Lender, with any Capital Adequacy Regulation;

####  

affects the amount of capital required orexpected to be maintained by such Lender or any corporation controlling suchLender and (taking into consideration such Lender’s or such corporation’spolicies with respect to capital adequacy and such Lender’s desired return oncapital) determines that the amount of such capital is increased as aconsequence of its Commitment(s), loans, credits or obligations under thisAgreement, then, within thirty (30) days of demand of such Lender (with a copyto the Agent), the Borrower shall pay to such Lender, from time to time asspecified by such Lender, additional amounts sufficient to compensate suchLender (or the entity controlling the Lender) for such increase.

 

## 10.4                           FundingLosses.  TheBorrower agrees to reimburse each Lender and to hold each Lender harmless fromany loss or expense which such Lender may sustain or incur as a consequence of:

##  

### (a)                                  thefailure of the Borrower to make any payment or mandatory prepayment ofprincipal of any LIBOR Rate Loan (including payments made after anyacceleration thereof);

###  

### (b)                                 thefailure of the Borrower to borrow, continue or convert a Loan after theBorrower has given (or is deemed to have given) a Notice of Borrowing or aNotice of Continuation/Conversion;

###  

### (c)                                  thefailure of the Borrower to make any prepayment after the Borrower has given anotice in accordance with Section 1.7;

###  

### (d)                                 theprepayment (including pursuant to Section 1.8 or as a result of anacceleration) of a LIBOR Rate Loan on a day which is not the last day of theInterest Period with respect thereto; or

###  

### (e)                                  theconversion pursuant to Section 1.6 of any LIBOR Rate Loan to a Base RateLoan on a day that is not the last day of the applicable Interest Period;

 

including any such loss or expense arisingfrom the liquidation or reemployment of funds obtained by it to maintain itsLIBOR Rate Loans hereunder or from fees payable to terminate the

 

74

----

 

deposits from which such funds wereobtained.  Solely for purposes ofcalculating amounts payable by the Borrower to the Lenders under this Section 10.4and under subsection 10.3(a): each LIBOR Rate Loan made by a Lender (andeach related reserve, special deposit or similar requirement) shall beconclusively deemed to have been funded at the LIBOR used in determining theinterest rate for such LIBOR Rate Loan by a matching deposit or other borrowingin the interbank eurodollar market for a comparable amount and for a comparableperiod, whether or not such LIBOR Rate Loan is in fact so funded.

 

## 10.5                           Inabilityto Determine Rates. If the Agent shall have determined in good faith that for any reasonadequate and reasonable means do not exist for ascertaining the LIBOR for anyrequested Interest Period with respect to a proposed LIBOR Rate Loan or thatthe LIBOR applicable pursuant to subsection 1.3(a) for any requestedInterest Period with respect to a proposed LIBOR Rate Loan does not adequatelyand fairly reflect the cost to the Lenders of funding such Loan, the Agent willforthwith give notice of such determination to the Borrower and eachLender.  Thereafter, the obligation ofthe Lenders to make or maintain LIBOR Rate Loans hereunder shall be suspendeduntil the Agent revokes such notice in writing. Upon receipt of such notice, the Borrower may revoke any Notice ofBorrowing or Notice of Continuation/ Conversion then submitted by theBorrower.  If the Borrower does notrevoke such notice, the Lenders shall make, convert or continue the Loans, asproposed by the Borrower, in the amount specified in the applicable noticesubmitted by the Borrower, but such Loans shall be made, converted or continuedas Base Rate Loans.

##  

## 10.6                           Reserveson LIBOR Rate Loans.  The Borrower shall pay to each Lender, aslong as such Lender shall be required under regulations of the Federal ReserveBoard to maintain reserves with respect to liabilities or assets consisting ofor including Eurocurrency funds or deposits (currently known as “Eurocurrencyliabilities”), additional costs on the unpaid principal amount of each LIBORRate Loan equal to actual costs of such reserves allocated to such Loan by suchLender (as determined by such Lender in good faith, which determination shallbe conclusive absent demonstrable error), payable on each date on whichinterest is payable on such Loan; provided the Borrower shall havereceived at least fifteen (15) days’ prior written notice (with a copy to theAgent) of such additional interest from the Lender.  If a Lender fails to give notice fifteen (15)days prior to the relevant Interest Payment Date, such additional interestshall be payable fifteen (15) days from receipt of such notice.

##  

## 10.7                           Certificatesof Lenders. Any Lender claiming reimbursement or compensation pursuant to this Article Xshall deliver to the Borrower (with a copy to the Agent) a certificate settingforth in reasonable detail the amount payable to such Lender hereunder and suchcertificate shall be conclusive and binding on the Borrower in the absence ofmanifest error.

##  

## 10.8                           Survival.  The agreements andobligations of the Borrower in this Article X shall survive the payment ofall other Obligations.

 

75

----

 

# ARTICLE XI - RESERVED

 

 

# ARTICLE XII - DEFINITIONS

 

## 12.1                           DefinedTerms.  Thefollowing terms are defined in the Sections or subsections referenced oppositesuch terms:

##  

| “Accrual  Period”                           | 1.3(b)              |
|-------------------------------------------------------|---------------------|
| “Affected  Lender”                          | 9.22                |
| “Assignee”                                  | 9.8(a)              |
| “Assignment  and Acceptance”                | 9.8(a)(ii)          |
| “Borrower”                                  | Preamble            |
| “Borrowing  Base”                           | 1.1(b)              |
| “CapEx  Commitment Fee”                     | 1.9(d)              |
| “CapEx Loan”                                | 1.1(a)              |
| “CapEx Loan  Commitment”                    | 1.1(a)              |
| “Cash  Contribution”                        | 6.6(b)              |
| “Commitment  Fee”                           | 1.9(b)              |
| “Confidential  Information”                 | 9.9                 |
| “EBITDA”                                    | Exhibit 4.2(b) |
| “Event of  Default”                         | 7.1                 |
| “Existing  Lender”                          | 1.3(a)              |
| “Fee Letter”                                | 1.9(a)              |
| “Fixed  Charge Coverage Ratio”              | Exhibit 4.2(b) |
| “First  Amendment”                          | Recitals            |
| “Indemnified  Person”                       | 9.5                 |
| “Indemnified  Liabilities”                  | 9.5                 |
| “Lender”                                    | Preamble            |
| “Lender  Letter of Credit”                  | 1.1(c)              |
| “Letter of  Credit Participation Agreement” | 1.1(c)              |
| “Letter of  Credit Participation Fee”       | 1.9(c)              |
| “Leverage  Ratio”                           | Exhibit 4.2(b) |
| “Maximum  Revolving Loan Balance”           | 1.1(b)              |
| “Original  Credit Agreement”                | Recitals            |
| “Originating  Lender”                       | 9.8(d)              |
| “Other  Taxes”                              | 10.1(b)             |
| “Participant”                               | 9.8(d)              |
| “Permitted  Liens”                          | 5.1                 |
| “Restricted  Payments”                      | 5.11                |
| “Replacement  Lender”                       | 9.22                |
| “Revolving  Loan Commitment”                | 1.1(b)              |
| “Revolving  Loan”                           | 1.1(b)              |
| “Second  Amendment”                         | Recitals            |
| “Taxes”                                     | 10.1(a)             |
| “Term Loan”                                 | 1.1(a)              |
| “Term Loan  Commitment”                     | 1.1(a)              |
| “Transaction”                               | 5.7(f)              |

 

76

----

 

In addition to the terms defined elsewhere inthis Agreement, the following terms have the following meanings:

 

“Account” means, as at any date ofdetermination, all “accounts” (as such term is defined in the UCC) of theBorrower and its Subsidiaries, including, without limitation, the unpaidportion of the obligation of a customer of the Borrower and its Subsidiaries inrespect of Inventory purchased by and shipped to such customer and/or therendition of services by the Borrower and its Subsidiaries, as stated on therespective invoices of the Borrower and its Subsidiaries, net of any credits,rebates or offsets owed to such customer.

 

“Account Debtor” means the customer of aBorrower and its Subsidiaries who is obligated on or under an Account.

 

“Acquisition” means any transaction or seriesof related transactions for the purpose of or resulting, directly orindirectly, in (a) the acquisition of all or substantially all of theassets of a Person, or of any business or division of a Person, (b) theacquisition of in excess of fifty percent (50%) of the capital stock,partnership interests or equity of any Person or otherwise causing any Personto become a Subsidiary of the Borrower, or (c) a merger or consolidationor any other combination with another Person.

 

“Acquisition Documents” means all documents,agreements and instruments executed by the Borrower and/or its Subsidiaries inconnection with the consummation of an Acquisition and shall include, withoutlimitation, the Grand Valley Purchase Documents and the Dimension PurchaseDocuments.

 

“Affiliate” means, as to any Person, anyother Person which, directly or indirectly, is in control of, is controlled by,or is under common control with, such Person. A Person shall be deemed to control another Person if the controllingPerson possesses, directly or indirectly, the power to direct or cause thedirection of the management and policies of the other Person, whether throughthe ownership of voting securities, by contract or otherwise.  Without limitation, any director, executiveofficer or beneficial owner of five percent (5%) or more of the equity of aPerson shall for the purposes of this Agreement, be deemed to control the otherPerson.  Notwithstanding the foregoing, neitherthe Agent nor any Lender shall be deemed an “Affiliate” of the Borrower or ofany of its Subsidiaries.

 

“Agent” means Antares in its capacity asadministrative agent for the Lenders hereunder, and any successor agent.

 

“Agent-Related Persons” means Antares and anysuccessor agent arising under Section 8.9, together with their respectiveAffiliates, and the officers, directors, employees, agents andattorneys-in-fact of such Persons and Affiliates.

 

“Aggregate CapEx Loan Commitment” means thecombined CapEx Loan Commitments of the Lenders, which shall initially be in theamount of $7,500,000, as such amount may be reduced from time to time pursuantto this Agreement.

 

77

----

 

“Aggregate Revolving Loan Commitment” meansthe combined Revolving Loan Commitments of the Lenders, which shall initiallybe in the amount of $40,000,000, as such amount may be reduced from time totime pursuant to this Agreement.

 

“Aggregate Term Loan Commitment” means thecombined Term Loan Commitments of the Lenders, which shall initially be in theamount of $7,500,000, as such amount may be reduced from time to time pursuantto this Agreement.

 

“Antares” means Antares Capital Corporation,a Delaware corporation, acting in its capacity as agent for the Lendershereunder.

 

“ApplicableMargin” means (i) if a Base Rate Loan, one and three-quarters percent(1.75%) per annum and (ii) if a LIBOR Rate Loan, three percent (3.00%) perannum.

 

“Attorney Costs” means and includes allreasonable fees and disbursements of any law firm or other external counsel,the allocated cost of internal legal services and all disbursements of internalcounsel.

 

“Bankruptcy Code” means the FederalBankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), asamended and in effect from time to time and the regulations issued from time totime thereunder.

 

“Base Rate” means, for any day, a rate ofinterest equal to the greater of (a) the rate of interest which isidentified as the “Prime Rate” and normally published in the Money Rates section of*The Wall Street Journal*(or, if such rate ceases to be so published, as quoted from such othergenerally available and recognizable source as the Agent may select) and (b) thesum of the Federal Funds Rate plus one half of one percent (0.5%).  Any change in the Base Rate due to a changein the “Prime Rate” or the Federal Funds Rate shall be effective on theeffective date of such change in the “Prime Rate” or the Federal Funds Rate.

 

“Base Rate Loan” means a Loan that bears interestbased on the Base Rate.

 

“Borrower Pledge Agreement” means thatcertain Pledge Agreement dated as of the Original Closing Date, by and betweenBorrower and the Agent, for the benefit of the Lenders, pursuant to whichBorrower has pledged one hundred percent (100%) of the issued and outstandingcapital stock of its directly-owned Subsidiaries.

 

“Borrower Security Agreement” means thatcertain Security Agreement dated as of the Original Closing Date, by andbetween Borrower and the Agent, for the benefit of the Lenders.

 

“Borrowing” means a borrowing hereunderconsisting of Loans made to the Borrower on the same day by the Lenderspursuant to Article I.

 

“Borrowing Base Certificate” means acertificate of the Borrower, in substantially the form of Exhibit 12.1(a) hereto,duly completed as of a date acceptable to the Agent in its reasonablediscretion.

 

78

----

 

“Brentwood” means Brentwood AcquisitionCorp., a Minnesota corporation and wholly-owned subsidiary of Woodcraft.

 

“Business Day” means any day other than aSaturday, Sunday or other day on which commercial banks in Chicago, Illinois orNew York, New York are authorized or required by law to close and, ifthe applicable Business Day relates to any LIBOR Rate Loan, a day on whichdealings are carried on in the London interbank market.

 

“CapEx LineTermination Date” shall mean June 30, 2006.

 

“CapEx Note” means a promissory note of theBorrower payable to the order of a Lender, in substantially the form of Exhibit 11.1(e)-2hereto, evidencing the Indebtedness of the Borrower under the CapEx LoanCommitment of such Lender (and, after the CapEx Line Termination Date, allCapEx Loans held by such Lender).

 

“Capital Adequacy Regulation” means anyguideline, request or directive of any central bank or other GovernmentalAuthority, or any other law, rule or regulation, whether or not having theforce of law, in each case, regarding capital adequacy of any Lender or of anycorporation controlling a Lender.

 

“Capital Expenditure” means an expenditure ofthe Borrower or its Subsidiaries which should be capitalized under GAAP.

 

“Capital Lease” means any leasing or similararrangement which, in accordance with GAAP, is classified as a capital lease.

 

“Capital Lease Obligations” means allmonetary obligations of the Borrower and its Subsidiaries under any CapitalLeases.

 

“Cash Equivalents” means: (a) securitiesissued or fully guaranteed or insured by the United States Government or anyagency thereof having maturities of not more than six (6) months from thedate of acquisition; (b) certificates of deposit, time deposits,repurchase agreements, reverse repurchase agreements, or bankers’ acceptances,having in each case a tenor of not more than six (6) months, issued by anyLender, or by any U.S. commercial bank or any branch or agency of a non-U.S.bank licensed to conduct business in the U.S. having combined capital andsurplus of not less than $250,000,000; (c) commercial paper of an issuerrated at least A-1 by Standard & Poor’s Corporation or P-1 by Moody’sInvestors Service Inc. and in either case having a tenor of not more than three(3) months and (d) money market funds; provided, thatsubstantially all of the assets of such fund are comprised of securities of thetype described in clauses (a) through (c).

 

“Code” means the Internal Revenue Code of1986, and regulations promulgated thereunder.

 

“Collateral” means all Property and interestsin Property and proceeds thereof now owned or hereafter acquired by theBorrower and its Subsidiaries or any other Person as debtor and any otherPerson who has granted a Lien to Agent, in or upon which a Lien now orhereafter exists in favor of any Lender or the Agent for the benefit of theAgent and Lenders, whether

 

79

----

 

underthis Agreement or under any other documents executed by any such Persons anddelivered to the Agent.

 

“Collateral Documents” means, collectively,the Master Reaffirmation Agreement, the Security Agreements, the Mortgages, theGuaranty, the Grand Valley Guaranty, the Pledge Agreements, the Grand ValleyCollateral Assignment of Asset Purchase Agreement, the Grand Valley CollateralAssignment of Real Property Purchase Agreement, the Dimension CollateralAssignment of Asset Purchase Agreement and all other security agreements,patent and trademark assignments, lease assignments, deposit account controlagreements, guarantees and other similar agreements, and all amendments,restatements, modifications or supplements thereof or thereto, by or betweenany one or more of the Borrower, its Subsidiaries or any other Person pledgingor granting a lien on Collateral and any Lender or the Agent for the benefit ofAgent and the Lenders now or hereafter delivered to the Lenders or the Agentpursuant to or in connection with the transactions contemplated hereby, and allfinancing statements (or comparable documents now or hereafter filed inaccordance with the UCC or comparable law) against the Borrower or itsSubsidiaries as debtor in favor of any Lender or the Agent for the benefit ofAgent and the Lenders, as secured party.

 

“Commitment” means, for each Lender, the sumof its Revolving Loan Commitment, Term Loan Commitment and CapEx LoanCommitment.

 

“Commitment Percentage” means, as to anyLender, the percentage equivalent of such Lender’s Revolving Loan Commitment,Term Loan Commitment or CapEx Loan Commitment divided by the AggregateRevolving Loan Commitment, Aggregate Term Loan Commitment or CapEx LoanCommitment, as applicable.

 

“Contingent Obligation” means, as to anyPerson, any direct or indirect liability, contingent or otherwise, of thatPerson:  (i) with respect to anyIndebtedness, lease, dividend or other obligation of another Person if theprimary purpose or intent of the Person incurring such liability, or theprimary effect thereof, is to provide assurance to the obligee of suchliability that such liability will be paid or discharged, or that anyagreements relating thereto will be complied with, or that the holders of suchliability will be protected (in whole or in part) against loss with respectthereto; (ii) with respect to any letter of credit issued for the accountof that Person or as to which that Person is otherwise liable for reimbursementof drawings; (iii) under any Rate Contracts; (iv) to make take-or-payor similar payments if required regardless of nonperformance by any other partyor parties to an agreement; or (v) for the obligations of another throughany agreement to purchase, repurchase or otherwise acquire such obligation orany Property constituting security therefor, to provide funds for the paymentor discharge of such obligation or to maintain the solvency, financialcondition or any balance sheet item or level of income of another Person.  The amount of any Contingent Obligation shallbe equal to the amount of the obligation so guaranteed or otherwise supportedor, if not a fixed and determined amount, the maximum amount so guaranteed orsupported.

 

“Contractual Obligations” means, as to anyPerson, any provision of any security issued by such Person or of anyagreement, undertaking, contract, indenture, mortgage, deed of trust or otherinstrument, document or agreement to which such Person is a party or by whichit or any of its Property is bound.

 

80

----

 

“Controlled Group” means the Borrower and allPersons (whether or not incorporated) under common control or treated as asingle employer with the Borrower pursuant to Section 414(b), (c), (m) or(o) of the Code or Section 4001 of ERISA.

 

“Conversion Date” means any date on which theBorrower converts a Base Rate Loan to a LIBOR Rate Loan or a LIBOR Rate Loan toa Base Rate Loan.

 

“Default” means any event or circumstancewhich, with the giving of notice, the lapse of time, or both, would (if notcured or otherwise remedied or waived in writing during such time) constitutean Event of Default.

 

“Dimension” means Dimension Moldings, Inc., an Ohio corporation.

 

“Dimension Acquisition” means the acquisition by Woodcraft ofsubstantially all of the assets of Dimension from Dimension pursuant to theDimension Purchase Agreement.

 

“Dimension Collateral Assignment of Asset Purchase Agreement” meansthat certain Collateral Assignment of Asset Purchase Agreement dated as of theSecond Amendment Closing Date by Woodcraft in favor of Agent, for the benefitof the Lenders, pursuant to which Woodcraft collaterally assigned all of itsrights under the Dimension Purchase Agreement to Agent, for the benefit of theLenders.

 

“Dimension Earn-Out Obligation” means all obligations in respect of the“Earnout Payments” pursuant to Section 1.6 of the DimensionPurchase Agreement as in effect on the Second Amendment Closing Date,contingent or otherwise.

 

“Dimension Purchase Agreement” means that certain Asset PurchaseAgreement among Woodcraft, Dimension, each of Rhine Blake and Jim Herchek, asthe founders of Dimension, and RBJ Holdings, Inc., dated as of July 28,2005, a copy of which is annexed as Exhibit A to the SecondAmendment.

 

“Dimension Purchase Documents”means the Dimension Purchase Agreement, together with each other document,agreement and instrument executed in connection therewith.

 

“Disposition” means (a) the sale, lease(other than the lease of real Property or fixtures resulting in lease paymentsreceived by the Borrower and its Subsidiaries, either individually or in theaggregate, of less than $50,000), conveyance or other disposition of Property,other than sales or other dispositions expressly permitted under subsection 5.2(a),and (b) the sale or transfer by the Borrower or any of its Subsidiaries ofany equity securities issued by any of its Subsidiaries and held by suchtransferor Person.

 

“Dollars,” “dollars” and “$” each mean lawfulmoney of the United States of America.

 

“EBITDA Plug Amount” means, if the Borrowerviolated any financial covenants contained in Sections 6.2, 6.3 and/or 6.5 forany test period, an amount which, when added to actual EBITDA (or, with respectto Section 6.3, Cash Flow) of the Borrower for such test period (andtreating such amount as additional EBITDA (or Cash Flow, as applicable) forsuch

 

81

----

 

purposes),and, solely for the Leverage Ratio contained in Section 6.2, when alsodeducted from the then outstanding principal amount of the Obligations (whichdeduction assumes compliance by the Borrower with subsection 1.8(g)),would cause the Borrower to be in compliance with such financial covenants forsuch test period; provided, that if the Borrower violated more than onesuch financial covenant for any test period, the EBITDA Plug Amount applicablefor such test period for purposes of Sections 6.2, 6.3 and/or 6.5 shall be thegreatest of the amounts that so cause the Borrower to be in compliance witheach such financial covenant in accordance with the foregoing.

 

“Eligible Assignee” means any of: (a) acommercial bank organized under the laws of the United States, or any statethereof; (b) a commercial bank organized under the laws of any othercountry; (c) a finance company, insurance company or other financialinstitution or fund which is engaged in making, purchasing or otherwiseinvesting in commercial loans for its own account in the ordinary course of itsbusiness; or (d) a Related Fund.

 

“Environmental Claims” means all claims,however asserted, by any Governmental Authority or other Person allegingpotential liability or responsibility for violation of any Environmental Law,or for release or injury to the environment or threat to public health,personal injury (including sickness, disease or death), property damage,natural resources damage, or otherwise alleging liability or responsibility fordamages (punitive or otherwise), cleanup, removal, remedial or response costs,restitution, civil or criminal penalties, injunctive relief, or other type ofrelief, resulting from or based upon the presence, placement, discharge,emission or release (including intentional and unintentional, negligent andnon-negligent, sudden or non-sudden, accidental or non-accidental, placement,spills, leaks, discharges, emissions or releases) of any Hazardous Material at,in, or from Property, whether or not owned by the Borrower.

 

“Environmental Laws” means all foreign,federal, state or local laws, statutes, common law duties, rules, regulations,ordinances and codes, together with all administrative orders, directed duties,requests, licenses, authorizations and permits of, and agreements with, anyGovernmental Authorities, in each case relating to environmental, health,safety and land use matters; including, without limitation, the ComprehensiveEnvironmental Response, Compensation and Liability Act of 1980, the Clean AirAct, the Federal Water Pollution Control Act of 1972, the Solid Waste DisposalAct, the Federal Resource Conservation and Recovery Act, the Toxic SubstancesControl Act, the Emergency Planning and Community Right-to-Know Act.

 

“ERISA” means the Employee Retirement IncomeSecurity Act of 1974, as amended from time to time, and regulations promulgatedthereunder.

 

“ERISA Affiliate” means any trade or business(whether or not incorporated) under common control with the Borrower within themeaning of Section 414(b), 414(c), 414(m) or 414(o) of the Code or Section 4001of ERISA.

 

“ERISA Event” means (a) a ReportableEvent with respect to a Qualified Plan or a Multiemployer Plan; (b) awithdrawal by the Borrower or any ERISA Affiliate from a Qualified Plan subjectto Section 4063 of ERISA during a plan year in which it was a substantialemployer (as defined in Section 4001(a)(2) of ERISA); (c) acomplete or partial withdrawal by the

 

82

----

 

Borroweror any ERISA Affiliate from a Multiemployer Plan; (d) the filing of anotice of intent to terminate, the treatment of a plan amendment as atermination under Section 4041 or 4041A of ERISA or the commencement ofproceedings by the PBGC to terminate a Qualified Plan or Multiemployer Plansubject to Title IV of ERISA; (e) a failure by the Borrower or any memberof the Controlled Group to make required contributions to a Qualified Plan orMultiemployer Plan subject to Title IV of ERISA; (f) an event or conditionwhich might reasonably be expected to constitute grounds under Section 4042of ERISA for the termination of, or the appointment of a trustee to administer,any Qualified Plan or Multiemployer Plan; (g) the imposition of anyliability under Title IV of ERISA, other than PBGC premiums due but notdelinquent under Section 4007 of ERISA, upon the Borrower or any ERISAAffiliate; (h) an application for a funding waiver or an extension of anyamortization period pursuant to Section 412 of the Code with respect toany Plan; (i) a non-exempt prohibited transaction occurs with respect toany Plan for which the Borrower or any of its Subsidiaries may be directly orindirectly liable; or (j) a violation of the applicable requirements of Section 404or 405 of ERISA or the exclusive benefit rule under Section 401(a) ofthe Code by any fiduciary or disqualified person with respect to any Plan forwhich the Borrower or any member of the Controlled Group may be directly orindirectly liable.

 

“Event of Loss” means, with respect to anyProperty, any of the following: (a) any loss, destruction or damage ofsuch Property; (b) any pending proceedings for the condemnation or seizureof such Property or for the exercise of any right of eminent domain; or (c) anyactual condemnation, seizure or taking, by exercise of the power of eminentdomain or otherwise, of such Property, or confiscation of such Property or therequisition of the use of such Property.

 

“Federal Funds Rate” means, for any day, therate per annum (rounded upward to the nearest 1/100th of 1%) equal to theweighted average of the rates on overnight Federal Funds transactions withmembers of the Federal Reserve System arranged by Federal Funds brokers on suchday, as published by the Federal Reserve Bank of New York on the Business Daynext succeeding such day; provided, that if no such rate is so publishedon such next succeeding Business Day, the Federal Funds Rate for such day shallbe the average rate quoted to the Agent on such day on such transactions asdetermined by the Agent in a commercially reasonable manner.

 

“Federal Reserve Board” means the Board ofGovernors of the Federal Reserve System, or any entity succeeding to any of itsprincipal functions.

 

“First Amendment Closing Date”means April 30, 2004.

 

“GAAP” means generally accepted accountingprinciples set forth from time to time in the opinions and pronouncements ofthe Accounting Principles Board and the American Institute of Certified PublicAccountants and statements and pronouncements of the Financial AccountingStandards Board (or agencies with similar functions of comparable stature andauthority within the accounting profession), which are applicable to thecircumstances as of the date of determination.

 

“Governmental Authority” means any nation orgovernment, any state or other political subdivision thereof, any central bank(or similar monetary or regulatory authority) thereof, any

 

83

----

 

entityexercising executive, legislative, judicial, regulatory or administrativefunctions of or pertaining to government, and any corporation or other entityowned or controlled, through stock or capital ownership or otherwise, by any ofthe foregoing.

 

“Grand Valley Acquisition” means, collectively, the Grand Valley AssetAcquisition and the Grand Valley Real Property Acquisition.

 

“Grand Valley Acquisition Sub” means Grand Valley Acquisition, Inc.,a Delaware corporation and wholly-owned subsidiary of Woodcraft.

 

“Grand Valley Asset Acquisition” means the acquisition by Grand ValleyAcquisition Sub of substantially all of the assets of GVDC from GVDC pursuantto the Grand Valley Asset Purchase Agreement.

 

“Grand Valley Asset Purchase Agreement” means that certain AssetPurchase Agreement among Woodcraft, Grand Valley Acquisition Sub, GVDC, HBGHolding Co., as sole stockholder of GVDC, and each of Rhine Blake and Jack Smigel,as the founders of GVDC, dated as of April 19, 2004, a copy of which isannexed as Exhibit A to the First Amendment.

 

“Grand Valley Asset Purchase Documents” means the Grand Valley AssetPurchase Agreement, together with each other document, agreement and instrumentexecuted in connection therewith.

 

“Grand Valley Collateral Assignment of Asset Purchase Agreement” meansthat certain Collateral Assignment of Asset Purchase Agreement dated as of theFirst Amendment Closing Date by Grand Valley Acquisition Sub and Woodcraft infavor of Agent, for the benefit of the Lenders, pursuant to which Grand ValleyAcquisition Sub and Woodcraft collaterally assigned all of their respectiverights under the Grand Valley Asset Purchase Agreement to Agent, for the benefitof the Lenders.

 

“Grand Valley Collateral Assignment of Real Property Purchase Agreement”means that certain Collateral Assignment of Purchase and Sale Agreement datedas of the First Amendment Closing Date by Grand Valley Acquisition Sub, infavor of Agent, for the benefit of the Lenders, pursuant to which Grand ValleyAcquisition Sub collaterally assigned all of its rights under the Grand ValleyReal Property Purchase Agreement to Agent, for the benefit of the Lenders.

 

“Grand Valley Earn-Out Obligation” means all obligations in respect ofthe “Earn-Out” pursuant to Section 1.4(b) of the Grand ValleyAsset Purchase Agreement as in effect on the First Amendment Closing Date,contingent or otherwise.

 

“Grand Valley Guaranty” means that certain Guaranty, dated as of theFirst Amendment Closing Date, made by Grand Valley Acquisition Sub in favor ofthe Agent, for the benefit of Agent and Lenders.

 

“Grand Valley Mortgage” means that certain Open-End Mortgage,Assignment of Leases and Rents, Security Agreement and Fixture Filing dated asof the First Amendment Closing Date

 

84

----

 

executed anddelivered by Grand Valley Acquisition Sub in favor of Agent, for the benefit ofthe Lenders.

 

“Grand Valley Purchase Documents” means, collectively, the Grand ValleyAsset Purchase Documents and the Grand Valley Real Property Purchase Documents.

 

“Grand Valley Real Property Acquisition” means the acquisition by GrandValley Acquisition Sub of certain real property and other assets of GVILLClocated at 131 Grand Valley Avenue, Orwell, Ohio from GVILLC pursuant to theGrand Valley Real Property Purchase Agreement.

 

“Grand Valley Real Property Purchase Agreement” means that certainPurchase and Sale Agreement among Grand Valley Acquisition Sub, GVILLC, andeach of JSRB Investment LLC, a Pennsylvania limited liability company, TheMullett Company, an Ohio corporation, and 1167 LLC, an Ohio limited liabilitycompany, dated as of April 19, 2004, a copy of which is annexed as Exhibit Bto the First Amendment.

 

“Grand Valley Real Property Purchase Documents” means, collectively,the Grand Valley Real Property Purchase Agreement, together with each otherdocument, agreement and instrument executed in connection therewith.

 

“Guaranty” means that certain Guaranty, dated as of the Original Closing Date, asamended on the First Amendment Closing Date pursuant to the First Amendment,made by each of the Subsidiaries of the Borrower (other than Grand ValleyAcquisition Sub) in favor of the Agent, for the benefit of Agent and Lenders.

 

“GVDC” means Ohio Door Co., a Pennsylvania corporation d/b/a GrandValley Door Co.

 

“GVILLC” means Grand ValleyInvestment LLC, an Ohio limited liability company.

 

“Hazardous Materials” means all thosesubstances which are regulated by, or which may form the basis of liabilityunder, any Environmental Law.

 

“High Yield Unsecured Documents” means,collectively, the High Yield Unsecured Indenture, the High Yield UnsecuredNotes and all related agreements, documents and instruments evidencing orrelating to the High Yield Unsecured Indebtedness.

 

“High Yield Unsecured Indebtedness” means theunsecured Indebtedness of the Borrower which is incurred pursuant to the HighYield Unsecured Offering.

 

“High Yield Unsecured Indenture” means thatcertain Indenture dated as of February 18, 2004 between Trustee andBorrower, as the same may be amended, modified and/or supplemented from time totime as permitted herein and including any other indenture pursuant to whichany High Yield Unsecured Notes are issued.

 

85

----

 

“High Yield Unsecured Notes” means thosecertain 10.0% Senior Unsecured Notes due 2012 in the aggregate principal amountof up to $120,000,000 issued by Borrower pursuant to the High Yield UnsecuredIndenture, including all notes issued in exchange or substitution therefor.

 

“High Yield Unsecured Offering” means theoffering by Borrower of up to an aggregate of $120,000,000.00 in principalamount of High Yield Unsecured Indebtedness upon the terms and conditions setforth in that certain Confidential Offering Circular of the Borrower dated asof February 18, 2004.

 

“Indebtedness” of any Person means, without duplication: (a) all indebtedness forborrowed money; (b) all obligations issued, undertaken or assumed as thedeferred purchase price of Property or services (other than trade payablesentered into in the Ordinary Course of Business); (c) the face amount ofall letters of credit issued for the account of such Person and withoutduplication, all drafts drawn thereunder and all reimbursement or paymentobligations with respect to letters of credit, surety bonds and other similarinstruments issued by such Person; (d) all obligations evidenced by notes,bonds, debentures or similar instruments, including obligations so evidencedincurred in connection with the acquisition of Property, assets or businesses; (e) allindebtedness created or arising under any conditional sale or other titleretention agreement, or incurred as financing, in either case with respect toProperty acquired by the Person (even though the rights and remedies of theseller or bank under such agreement in the event of default are limited torepossession or sale of such Property); (f) all Capital Lease Obligations;(g) the principal balance outstanding under any synthetic lease,off-balance sheet loan or similar off balance sheet financing product; (h) theamount of the Grand Valley Earn-Out Obligation then due and payable under theterms of the Grand Valley Asset Purchase Agreement; (i) the amount of theDimension Earn-Out Obligation then due and payable under the terms of theDimension Purchase Agreement; (j) all indebtedness referred to in clauses (a) through(i) above secured by (or for which the holder of such Indebtedness has anexisting right, contingent or otherwise, to be secured by) any Lien upon or inProperty (including accounts and contracts rights) owned by such Person, eventhough such Person has not assumed or become liable for the payment of suchindebtedness; (k) all Contingent Obligations described in clause (i) ofthe definition thereof in respect of indebtedness or obligations of others ofthe kinds referred to in clauses (a) through (j) above; and (l) all “DisqualifiedStock” (as defined in the High Yield Unsecured Indenture).

 

“Insolvency Proceeding” means (a) anycase, action or proceeding before any court or other Governmental Authorityrelating to bankruptcy, reorganization, insolvency, liquidation, receivership,dissolution, winding-up or relief of debtors, or (b) any generalassignment for the benefit of creditors, composition, marshaling of assets forcreditors, or other, similar arrangement in respect of its creditors generallyor any substantial portion of its creditors; in each case in (a) and (b) above,undertaken under U.S. Federal, state or foreign law, including the BankruptcyCode.

 

“Interest Payment Date” means, (a) withrespect to any LIBOR Rate Loan (other than a LIBOR Rate Loan having an InterestPeriod of six (6) months) the last day of each Interest Period applicableto such Loan, (b) with respect to any LIBOR Rate Loan having an Interest

 

86

----

 

Periodof six (6) months, the last day of each three (3) month intervalduring such Interest Period, and (c) with respect to Base Rate Loans, thefirst day of each calendar month.

 

“Interest Period” means, with respect to anyLIBOR Rate Loan, the period commencing on the Business Day such Loan isdisbursed or continued or on the Conversion Date on which a Base Rate Loan isconverted to the LIBOR Rate Loan and ending on the date one, two, three or six (6) monthsthereafter, as selected by the Borrower in its Notice of Borrowing or Notice ofConversion/Continuation; provided, that:

 

(a)                                  if any Interest Period pertaining to a LIBOR Rate Loan wouldotherwise end on a day which is not a Business Day, that Interest Period shallbe extended to the next succeeding Business Day unless the result of suchextension would be to carry such Interest Period into another calendar month,in which event such Interest Period shall end on the immediately precedingBusiness Day;

 

(b)                                 any Interest Period pertaining to a LIBOR Rate Loan that begins onthe last Business Day of a calendar month (or on a day for which there isno numerically corresponding day in the calendar month at the end of suchInterest Period) shall end on the last Business Day of the calendar month atthe end of such Interest Period;

 

(c)                                  no Interest Period for the Term Loan or any CapEx Loan shall extendbeyond the last scheduled payment date therefor and no Interest Period for anyRevolving Loan shall extend beyond the Revolving Termination Date; and

 

(d)                                 no Interest Period applicable to the Term Loan, any CapEx Loan orportion thereof shall extend beyond any date upon which is due any scheduledprincipal payment in respect of the Term Loan or a CapEx Loan, as applicable,unless the aggregate principal amount of the Term Loan or a CapEx Loan, asapplicable, represented by Base Rate Loans or by LIBOR Rate Loans havingInterest Periods that will expire on or before such date is equal to or inexcess of the amount of such principal payment.

 

“Inventory” means all of the “inventory” (assuch term is defined in the UCC) of the Borrower and its Subsidiaries,including, but not limited to, all merchandise, raw materials, parts, supplies,work-in-process and finished goods intended for sale, together with all thecontainers, packing, packaging, shipping and similar materials related thereto,and including such inventory as is temporarily out of the Borrower’s or suchSubsidiary’s custody or possession, including inventory on the premises ofothers and items in transit.

 

“Lending Office” means, with respect to anyLender, the office or offices of such Lender specified as its “Lending Office”opposite its name on the applicable signature page hereto, or such otheroffice or offices of such Lender as it may from time to time notify theBorrower and the Agent.

 

“Letter of Credit Participation Liability”means, as to each Lender Letter of Credit and each Letter of CreditParticipation Agreement, all reimbursement obligations and all otherliabilities of the Borrower or any of its Subsidiaries to Agent and the Lendersin connection with the Lender Letter of Credit or to the obligee with respectto the transaction for which the Letter of Credit Participation Agreement wasissued, whether contingent or otherwise, including with

 

87

----

 

respectto any letter of credit: (a) the amount available to be drawn or which maybecome available to be drawn; (b) without duplication, all amounts whichhave been paid or made available by the issuing bank or by the Agent under suchLender Letters of Credit or Letter of Credit Participation Agreement, in eachinstance, to the extent not reimbursed; and (c) all unpaid interest, feesand expenses.

 

“LIBOR” means, for each Interest Period, theoffered rate per annum for deposits of Dollars for the applicable InterestPeriod that appears on Telerate Page 3750 as of 11:00 A.M. (London,England time) two (2) Business Days prior to the first day in suchInterest Period.  If no such offered rateexists, such rate will be the rate of interest per annum, as determined by theAgent (rounded upwards, if necessary, to the nearest 1/100th of 1%) at whichdeposits of Dollars in immediately available funds are offered at 11:00 A.M.(London, England time) two (2) Business Days prior to the first day insuch Interest Period by major financial institutions reasonably satisfactory tothe Agent in the London interbank market for such Interest Period for theapplicable principal amount on such date of determination.

 

“LIBOR Rate Loan”  means a Loan that bears interest based onLIBOR.

 

“Lien” means any mortgage, deed of trust,pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance,lien (statutory or otherwise) or preference, priority or other securityinterest or preferential arrangement of any kind or nature whatsoever(including those created by, arising under or evidenced by any conditional saleor other title retention agreement, the interest of a lessor under a CapitalLease, any financing lease having substantially the same economic effect as anyof the foregoing, or the filing of any financing statement naming the owner ofthe asset to which such lien relates as debtor, under the UCC or any comparablelaw) and any contingent or other agreement to provide any of the foregoing, butnot including the interest of a lessor under a lease which is not a CapitalLease.

 

“Loan” means an extension of credit by aLender to the Borrower pursuant to Article I hereof, and may be a BaseRate Loan or a LIBOR Rate Loan.

 

“Loan Documents” means this Agreement, theNotes, the Collateral Documents and all documents delivered to the Agent and/orany Lender in connection with any of the foregoing (including the Fee Letter).

 

“Margin Stock” means “margin stock” as suchterm is defined in Regulation T, U or X of the Federal Reserve Board.

 

“Master Reaffirmation Agreement” means thatcertain Master Reaffirmation Agreement dated of even date herewith by and amongthe Borrower, each of its Subsidiaries and the Agent, to be in form andsubstance acceptable to the Agent.

 

“Material Adverse Effect” means (a) amaterial adverse change in, or a material adverse effect upon, the operations,business, Property, or condition (financial or otherwise) of the Borrower, anyof its Subsidiaries, or the Borrower and its Subsidiaries taken as a whole; (b) amaterial impairment of the ability of the Borrower, any of its Subsidiaries orany other Person (other than the Agent or Lenders) to perform in any materialrespect its obligations under any Loan Document; or (c) a material adverseeffect upon (i) the legality, validity, binding effect or

 

88

----

 

enforceabilityof any Loan Document as against the Borrower or any Subsidiary, or (ii) theperfection or priority of any Lien granted to the Lenders or to the Agent forthe benefit of the Lenders under any of the Collateral Documents.

 

“Mortgage” means any deed of trust, leaseholddeed of trust, mortgage, leasehold mortgage, deed to secure debt, leaseholddeed to secure debt or other document creating a Lien on real Property or anyinterest in real Property.

 

“Multiemployer Plan” means a “multiemployerplan” (within the meaning of Section 4001(a)(3) of ERISA) and towhich the Borrower or any member of the Controlled Group may have anyliability.

 

“Net Issuance Proceeds” means, in respect ofany issuance of debt or equity, cash proceeds (including cash proceeds as andwhen received in respect of non-cash proceeds received or receivable inconnection with such issuance), net of reasonable out-of-pocket costs andexpenses paid or incurred in connection therewith in favor of any Person not anAffiliate of the Borrower.

 

“Net Proceeds” means proceeds in cash, checksor other cash equivalent financial instruments (including Cash Equivalents) asand when received by the Person making a Disposition and insurance proceedsreceived on account of an Event of Loss, net of: (a) in the event of aDisposition (i) the direct costs relating to such Disposition excludingamounts payable to the Borrower or any Affiliate of the Borrower, (ii) sale,use or other transaction taxes paid or payable as a result thereof, and (iii) amountsrequired to be applied to repay principal, interest and prepayment premiums andpenalties on Indebtedness secured by a Lien on the asset which is the subjectof such Disposition and (b) in the event of an Event of Loss, (i) allmoney actually applied to repair or reconstruct the damaged Property orProperty affected by the condemnation or taking, (ii) all of the costs andexpenses reasonably incurred in connection with the collection of such proceeds,award or other payments, and (iii) any amounts retained by or paid toparties having superior rights to such proceeds, awards or other payments.

 

“Note” means any Revolving Note, Term Note orCapEx Note and “Notes” means all such Notes.

 

“Notice of Borrowing” means a notice given bythe Borrower to the Agent pursuant to Section 1.5, in substantially theform of Exhibit 12.1(b) hereto.

 

“Notice of Continuation/Conversion” means anotice given by the Borrower to the Agent pursuant to Section 1.6, in substantiallythe form of Exhibit 12.1(c) hereto.

 

“Obligations” means all Loans, and otherIndebtedness, advances, debts, liabilities, obligations, covenants and dutiesowing by the Borrower to any Lender, the Agent, or any other Person required tobe indemnified, that arises under any Loan Document, whether or not for thepayment of money, whether arising by reason of an extension of credit, loan,guaranty, indemnification or in any other manner, whether direct or indirect(including those acquired by assignment), absolute or contingent, due or tobecome due, now existing or hereafter arising and however acquired.

 

89

----

 

“Ordinary Course of Business” means, inrespect of any transaction involving the Borrower or any of its Subsidiaries,the ordinary course of such Person’s business, as conducted by any such Personin accordance with past practice and undertaken by such Person in good faithand not for purposes of evading any covenant or restriction in any Loan Document.

 

“Organization Documents” means, (a) forany corporation, the certificate or articles of incorporation, the bylaws, anycertificate of determination or instrument relating to the rights of preferredshareholders of such corporation, any shareholder rights agreement, and allapplicable resolutions of the board of directors (or any committee thereof) ofsuch corporation, (b) for any partnership, the partnership agreement and,if applicable, certificate of limited partnership or (c) for any limitedliability company, the operating agreement and articles or certificate offormation.

 

“Original Closing Date” means February 18,2004.

 

“Patriot Act” means the Uniting andStrengthening America by Providing Appropriate Tools Required to Intercept andObstruct Terrorism Act of 2001, P.L. 107-56, as amended.

 

“PBGC” means the Pension Benefit GuarantyCorporation or any entity succeeding to any of its principal functions underERISA.

 

“Permitted Acquisition” means any Acquisitionby (i) any domestic Wholly-Owned Subsidiary of the Borrower ofsubstantially all of the assets of a Person, which assets are located in theUnited States, or (ii) the Borrower or any domestic Wholly-OwnedSubsidiary of the Borrower of 100% of the equity interests of a Personincorporated under the laws of any State in the United States or the Districtof Columbia (such assets, in the case of an asset acquisition, or entity, inthe case of an acquisition of equity securities, are referred to herein as the “AcquiredEntity”) to the extent that each of the following conditions shall have beensatisfied:

 

(a)                                  the conditions set forth in Section 2.3 shall have beensatisfied;

 

(b)                                 the Borrower shall have furnished to the Agent and Lenders at leasttwenty (20) Business Days prior to the consummation of such Acquisition (1) anexecuted term sheet and/or commitment letter (setting forth in reasonabledetail the terms and conditions of such Acquisition) and, at the request of theAgent, such other information and documents that the Agent may request, including,without limitation, executed counterparts of the respective agreements,documents or instruments pursuant to which such Acquisition is to beconsummated (including, without limitation, any related management,non-compete, employment, option or other material agreements), any schedules tosuch agreements, documents or instruments and all other material ancillaryagreements, instruments and documents to be executed or delivered in connectiontherewith, (2) pro forma financial statements of the Borrower and itsSubsidiaries after giving effect to the consummation of such Acquisition, (3) acertificate of a Responsible Officer of the Borrower demonstrating on a proforma basis compliance with the covenants set forth in Article VI hereofafter giving effect to the consummation of such Acquisition and (4) copiesof such other agreements, instruments and other documents (including, withoutlimitation, the Loan Documents required by Section 4.12) as the Agentreasonably shall request;

 

90

----

 

(c)                                  the Borrower and its Subsidiaries (including any new Subsidiary)shall execute and deliver the agreements, instruments and other documentsrequired by Section 4.12 and the Agent shall have received, for thebenefit of the Agent and Lenders, a collateral assignment of the seller’srepresentations, warranties and indemnities to the Borrower or any of itsSubsidiaries under the acquisition documents;

 

(d)                                 such Acquisition shall not be hostile and shall have been approvedby the board of directors (or other similar body) and/or the stockholders orother equityholders of the Acquired Entity;

 

(e)                                  no Default or Event of Default shall then exist or would exist aftergiving effect thereto;

 

(f)                                    after giving effect to such Acquisition and any Loans to bedisbursed in connection therewith, the Maximum Revolving Loan Balance shallexceed the aggregate outstanding principal balance of Revolving Loans by notless than $5,000,000, and the Borrower shall deliver to the Agent a pro forma BorrowingBase Certificate evidencing compliance with this condition, which pro formaBorrowing Base Certificate shall give effect to such Acquisition and any suchLoans to be disbursed in connection therewith;

 

(g)                                 the Acquired Entity is in the same line of business as the Borrower

 

(h)                                 the “Available Liquidity” (as defined in the High Yield UnsecuredIndenture) of the Borrower shall be at least $7,500,000;

 

(i)                                     at least fifty percent (50%) of the costs of such Acquisition arefinanced with “Acceptable Capital Contributions” (as defined in the High YieldUnsecured Indenture); and

 

(j)                                     such Acquisition is permitted under the terms of the High YieldUnsecured Documents.

 

“Permitted Issuances” means the issuance ofdebt securities by any of the Borrower’s Subsidiaries in respect ofIndebtedness permitted hereunder.

 

“Permitted Securities” shall mean equityinterests of Borrower that by their terms (or by the terms of any security intowhich they are convertible or for which they are exchangeable) or upon the happeningof any event or otherwise: (A) are not convertible or exchangeable forIndebtedness or any securities that are not Permitted Securities, (B) (i) donot mature and (ii) are not putable or redeemable at the option of theholder thereof, in each case under clause (i) or (ii) in whole or inpart on or prior to the date six (6) months after the earlier of theRevolving Termination Date or the actual payment in full in cash of theObligations, (C) do not have required payments of cash dividends or othercash distributions on or prior to the date six (6) months after theearlier of the Revolving Termination Date or the actual payment in full in cashof the Obligations, (D) are unsecured and by operation of law or bylegally binding agreement are subordinated in right of repayment, liens,security and remedies to all of the Obligations and to all of Agent’s andLenders’ rights, Liens and remedies, and (E) are not sold, issued orotherwise transferred in connection with or as a part of a Public Offering.

 

91

----

 

“Person” means an individual, partnership,corporation, limited liability company, business trust, joint stock company,trust, unincorporated association, joint venture or Governmental Authority.

 

“Plan” means an employee benefit plan (asdefined in Section 3(3) of ERISA) which the Borrower or any member ofthe Controlled Group sponsors or maintains or to which the Borrower or anymember of the Controlled Group may have liability.

 

“Pledge Agreements” means collectively, theBorrower Pledge Agreement, the Woodcraft Pledge Agreement, and any other pledgeagreement, in form and substance acceptable to the Agent, entered into by anyother Subsidiary of the Borrower, or any other Person, and the Agent, on behalfof the Lenders in respect of the Obligations.

 

“Pledged Collateral” has the meaningspecified in the Pledge Agreements.

 

“Primewood” means Primewood, Inc., aNorth Dakota corporation and wholly-owned subsidiary of Woodcraft.

 

“Property” means any interest in any kind ofproperty or asset, whether real, personal or mixed, and whether tangible orintangible.

 

“Public Offering” shall mean any offer orsale of securities pursuant to any registration statement filed and effectivewith the Securities and Exchange Commission or any other GovernmentalAuthority.

 

“Qualified Plan” means a pension plan (asdefined in Section 3(2) of ERISA) intended to be tax-qualified under Section 401(a) ofthe Code and which any member of the Controlled Group sponsors, maintains, orto which it makes, is making or is obligated to make contributions, or in thecase of a multiple employer plan (as described in Section 4064(a) ofERISA) has made contributions at any time during the immediately precedingperiod covering at least five (5) plan years, but excluding anyMultiemployer Plan.

 

“Rate Contracts” means swap agreements (assuch term is defined in Section 101 of the Bankruptcy Code) and any otheragreements or arrangements designed to provide protection against fluctuationsin interest or currency exchange rates.

 

“Related Agreements” means, collectively, the High Yield Unsecured Documents, the Grand ValleyPurchase Documents, the Dimension Purchase Documents****and each other instrument, document and purchase, merger andother agreement executed or delivered by or on behalf of the Borrower or any ofits Subsidiaries in connection with a Permitted Acquisition.

 

“Related Fund” means (a) any fund, trustor similar entity that invests in commercial loans in the ordinary course ofbusiness and is advised or managed by (i) a Lender, (ii) an Affiliateof a Lender, (iii) the same investment advisor that manages a Lender or (iv) anAffiliate of an investment advisor that manages a Lender or (b) anyfinance company, insurance company or other financial institution whichtemporarily warehouses Loans for any Lender or any Person described in clause (a) above.

 

92

----

 

“Related Transactions” means the transactionscontemplated by the Related Agreements and includes, without limitation, thefunding of the High Yield Unsecured Notes, the consummation of the Grand ValleyAcquisition, the consummation of the Dimension Acquisition and the consummationof any Permitted Acquisitions.

 

“Reportable Event” means, as to any Plan, (a) anyof the events set forth in Section 4043(b) of ERISA or theregulations thereunder, other than any such event for which the thirty (30) daynotice requirement under ERISA has been waived in regulations issued by thePBGC, (b) a withdrawal from a Plan described in Section 4063 ofERISA, or (c) a cessation of operations described in Section 4062(e) ofERISA.

 

“Required Lenders” means at any time (a) Lendersthen holding at least sixty-six and two-thirds percent (662/3%) ofthe sum of the Aggregate Revolving Loan Commitment then in effect plus theAggregate CapEx Loan Commitment then in effect (or, if after the CapEx LineTermination Date or if the CapEx Loan Commitments have been terminated, theaggregate unpaid principal balance of CapEx Loans) plus the aggregate unpaidprincipal balance of the Term Loan then outstanding, or (b) if theRevolving Loan Commitments have been terminated, Lenders then having at leastsixty-six and two-thirds percent (662/3%) of the sum of theaggregate unpaid principal amount of Loans then outstanding plus outstandingLetter of Credit Participation Liability.

 

“Requirement of Law” means, as to any Person,any law (statutory or common), ordinance, treaty, rule, regulation, order,policy, other legal requirement or determination of an arbitrator or of aGovernmental Authority, in each case applicable to or binding upon such Personor any of its Property or to which such Person or any of its Property issubject.

 

“Responsible Officer” means the chiefexecutive officer or the president of the Borrower or any other officer havingsubstantially the same authority and responsibility; or, with respect tocompliance with financial covenants or delivery of financial information, thechief financial officer or the treasurer of the Borrower, or any other officerhaving substantially the same authority and responsibility.

 

“Restatement Effective Date” means the dateon which all conditions precedent set forth in Section 2.1 are satisfiedor waived by the Agent and all Lenders.

 

“Restricted Account” means each bank accountof the Borrower and its Subsidiaries set forth on Schedule 12.2maintained at U.S. Bank or The Middlefield Banking Company for purposes ofpaying certain payroll and operating expenses in the Ordinary Course of Business;provided, that in the event U.S. Bank or The Middlefield Banking Companydelivers to the Agent a control agreement in form and substance acceptable tothe Agent, such account shall cease to be a Restricted Account for purposeshereof.

 

“Restricted Credit Card Account” meansAccount No. 1-536-9138-1964 maintained at U.S. Bank.

 

“Restricted Payroll Account” means Account No. 1-536-9138-1823maintained at U.S. Bank.

 

93

----

 

“Revolving Note” means an amended andsubstituted promissory note of the Borrower payable to the order of a Lender insubstantially the form of Exhibit 12.1(d) hereto, evidencingIndebtedness of the Borrower under the Revolving Loan Commitment of suchLender.

 

“Revolving Termination Date” means theearlier to occur of: (a) September 23, 2010; and (b) the date onwhich the Aggregate Revolving Loan Commitment shall terminate in accordancewith the provisions of this Agreement.

 

“Second Amendment Closing Date”means July 28, 2005.

 

“Security Agreements” means, collectively,the Borrower Security Agreement, the Subsidiary Security Agreement and anyother security agreement, in form and substance acceptable to the Agent,entered into by any other Subsidiary of the Borrower, or any other Person, and theAgent, on behalf of the Lenders in respect of the Obligations.

 

“Solvent” means, as to any Person at anytime, that (a) the fair value of the Property of such Person is greaterthan the amount of such Person’s liabilities (including disputed, contingentand unliquidated liabilities) as such value is established and liabilitiesevaluated for purposes of Section 101(32)(A) of the Bankruptcy Codeand, in the alternative, for purposes of the Uniform Fraudulent Transfer Act; (b) thepresent fair saleable value of the Property of such Person is not less than theamount that will be required to pay the probable liability of such Person onits debts as they become absolute and matured; (c) such Person is able torealize upon its Property and pay its debts and other liabilities (includingdisputed, contingent and unliquidated liabilities) as they mature in the normalcourse of business; (d) such Person does not intend to, and does notbelieve that it will, incur debts or liabilities beyond such Person’s abilityto pay as such debts and liabilities mature; and (e) such Person is notengaged in business or a transaction, and is not about to engage in business ora transaction, for which such Person’s Property would constitute unreasonablysmall capital.

 

“Sponsor” means Behrman Capital III L.P., aDelaware limited partnership.

 

“Subordinated Indebtedness” means theIndebtedness of the Borrower or any of its Subsidiaries which (i) containsterms, conditions, covenants, default triggers and representations andwarranties that are acceptable to the Agent and the Required Lenders and (ii) issubordinated in right of payment and action to the Obligations on terms andconditions satisfactory to the Agent and the Required Lenders.

 

“Subsidiary” of a Person means any corporation,association, limited liability company, partnership, joint venture or otherbusiness entity of which more than fifty percent (50%) of the voting stock orother equity interests (in the case of Persons other than corporations), isowned or controlled directly or indirectly by the Person, or one or more of theSubsidiaries of the Person, or a combination thereof.

 

“Subsidiary Security Agreement” means thatcertain Security Agreement dated as of the Original Closing Date, by andbetween each of Woodcraft, Primewood and Brentwood and the Agent, for thebenefit of the Lenders, and joined by Grand Valley Acquisition Sub pursuant toa joinder dated as of the First Amendment Closing Date.

 

94

----

 

“Target” means any other Person or businessunit or asset group of any other Person acquired or proposed to be acquired inan Acquisition.

 

“Term Note”means a promissory note of the Borrower payable to the order of a Lender, insubstantially the form of Exhibit 12.1(e) hereto, evidencingthe Indebtedness of the Borrower to such Lender resulting from the Term Loanmade to the Borrowers by such Lender.

 

“Trustee” means U.S. Bank NationalAssociation.

 

“UCC” means the Uniform Commercial Code as ineffect from time to time in the State of Illinois.

 

“Unfunded Pension Liabilities” means theexcess of a Plan’s benefit liabilities under Section 4001(a)(16) of ERISA,over the current value of that Plan’s assets, determined in accordance with theassumptions used by the Plan’s actuaries for funding the Plan pursuant to section 412for the applicable plan year.

 

“United States” and “U.S.” each means theUnited States of America.

 

“U.S. Bank” means U.S. Bank NationalAssociation, a national banking association.

 

“Wholly-Owned Subsidiary” means anySubsidiary in which (other than directors’ qualifying shares required by law)one hundred percent (100%) of the equity securities, at the time as of whichany determination is being made, is owned, beneficially and of record, by theBorrower, or by one or more of the other Wholly-Owned Subsidiaries, or both.

 

“Withdrawal Liabilities” means, as of anydetermination date, the aggregate amount of the liabilities, if any, pursuantto Section 4201 of ERISA if the Controlled Group made a complete withdrawalfrom all Multiemployer Plans and any increase in contributions pursuant to Section 4243of ERISA.

 

“Woodcraft” means Woodcraft Industries, Inc.,a Minnesota corporation and wholly-owned subsidiary of Borrower.

 

“Woodcraft Pledge Agreement” means that certainPledge Agreement dated as of the Original Closing Date, by and betweenWoodcraft and the Agent, for the benefit of the Lenders, pursuant to whichWoodcraft has pledged one hundred percent (100%) of the issued and outstandingcapital stock of its Subsidiaries.

 

## 12.2                           OtherInterpretive Provisions.

##  

### (a)                                  DefinedTerms. Unless otherwise specified herein or therein, all terms defined in thisAgreement shall have the defined meanings when used in any certificate or otherdocument made or delivered pursuant hereto. The meanings of defined terms shall be equally applicable to thesingular and plural forms of the defined terms. Terms (including uncapitalized terms) not otherwise defined herein andthat are defined in the UCC shall have the meanings therein described.

 

95

----

 

### (b)                                 TheAgreement. The words “hereof,” “herein,” “hereunder” and words of similar importwhen used in this Agreement shall refer to this Agreement as a whole and not toany particular provision of this Agreement; and subsection, section, schedule andexhibit references are to this Agreement unless otherwise specified.

###  

### (c)                                  CertainCommon Terms. The term “documents” includes any and all instruments, documents,agreements, certificates, indentures, notices and other writings, howeverevidenced.  The term “including” is notlimiting and means “including without limitation.”

###  

### (d)                                 Performance;Time. Whenever any performance obligation hereunder (other than a paymentobligation) shall be stated to be due or required to be satisfied on a dayother than a Business Day, such performance shall be made or satisfied on thenext succeeding Business Day.  In thecomputation of periods of time from a specified date to a later specified date,the word “from” means “from and including”; the words “to” and “until” eachmean “to but excluding,” and the word “through” means “to and including.”  If any provision of this Agreement refers toany action taken or to be taken by any Person, or which such Person is prohibitedfrom taking, such provision shall be interpreted to encompass any and allmeans, direct or indirect, of taking, or not taking, such action.

###  

### (e)                                  Contracts.  Unless otherwise expresslyprovided herein, references to agreements and other contractual instruments,including this Agreement and the other Loan Documents, shall be deemed toinclude all subsequent amendments, thereto, restatements and substitutionsthereof and other modifications and supplements thereto which are in effectfrom time to time, but only to the extent such amendments and othermodifications are not prohibited by the terms of any Loan Document.

###  

### (f)                                    Laws. References to any statute or regulation are to be construed as includingall statutory and regulatory provisions consolidating, amending, replacing,supplementing or interpreting the statute or regulation.

###  

## 12.3                           Accounting Principles.

##  

### (a)                                  Unlessthe context otherwise clearly requires, all accounting terms not expresslydefined herein shall be construed, and all financial computations requiredunder this Agreement shall be made, in accordance with GAAP, consistentlyapplied.

###  

### (b)                                 Referencesherein to “fiscal year,” “fiscal quarter” and “fiscal month” refer to suchfiscal periods of the Borrower.

 

96

----

 

### (c)                                  Ifany change in GAAP results in a change in the calculation of the financialcovenants or interpretation of related provisions of this Agreement or anyother Loan Document, then the Borrower, the Agent and the Lenders agree toamend such provisions of this Agreement so as to equitably reflect such changesin GAAP with the desired result that the criteria for evaluating the Borrower’sfinancial condition shall be the same after such change in GAAP as if suchchange had not been made; provided, that notwithstanding any otherprovision of this Agreement, the Required Lenders’ agreement to any amendmentof such provisions shall be sufficient to bind all Lenders.

###  

**[Balance of page intentionallyleft blank; signature page follows.]**

 

97

----

 

IN WITNESS WHEREOF, the parties hereto havecaused this Agreement to be duly executed and delivered by their dulyauthorized officers as of the day and year first above written.

 
| ** ** | **WII COMPONENTS, INC.,**                  |
|------------|--------------------------------------------|
|       | a Delaware corporation, as the Borrower    |
|       |                                       |
|       |                                       |
|       | By:                                        | /S/ Dale B. Herbst |   |
|       | Name:                                      | Dale B. Herbst |
|       | Title:                                     | Treasurer |
|       | FEIN:                                      |   |   |
|       |                                       |
|       | Address for notices for Borrower:          |
|       |                                       |
|       | 525 Lincoln Avenue SE                      |
|       | St. Cloud, Minnesota 56304                 |
|       | Attn: President                            |
|       | Facsimile: (320) 352-1504             |
|       |                                       |
|       | Address for Wire Transfers for Borrower:   |
|       |                                       |
|       | U.S. Bank National Association             |
|       | ABA Number: 091000022                      |
|       | Account Number: 149510174050               |
|       | Reference: Woodcraft Industries, Inc. |
|            |                                            |  |  |  |

 

----

 

IN WITNESS WHEREOF, the parties hereto havecaused this Agreement to be duly executed and delivered by their dulyauthorized officers as of the day and year first above written

 
| ** ** | **ANTARES CAPITAL CORPORATION**,         |
|------------|------------------------------------------|
|       | as Agent and as a Lender                 |
|       |                                     |
|       |                                     |
|       | By:                                      | /S/ Michael P. King |   |
|       | Name:                                    | Michael P. King |
|       | Title:                                   | Director |
|       |                                     |
|       |                                     |
|       | Address for notices:                     |
|       |                                     |
|       | 311 South Wacker Drive                   |
|       | Suite 4400                          |
|       | Chicago, Illinois 60606                  |
|       | Attn: Portfolio Manager – Woodcraft |
|       | Facsimile: (312) 697-3998                |
|       | Telephone: (312) 697-3999                |
|       |                                     |
|       | Address for payments:                    |
|       |                                     |
|       | Antares Capital Corporation              |
|       | Account # 4070-6016                      |
|       | Citibank N.A., New York             |
|       | ABA # 021000089                          |
|       | Reference: Woodcraft                     |
|       | Please advise Jim Luchansky at           |
|       | (312) 697-3991 upon receipt              |

 

----

 

IN WITNESS WHEREOF, the parties hereto havecaused this Agreement to be duly executed and delivered by their duly authorizedofficers as of the day and year first above written

 
| ** ** | **M&I MARSHALL & ILSLEY  BANK**, as a  Lender |
|------------|------------------------------------------------------------|
| ** ** | ** **                                                 |
|       |                                                       |
|       | By:                                                        | /S/ Chad M. Kortgard |   |
|       | Name:                                                      | Chad M. Kortgard |
|       | Title:                                                     | Assistant Vice President |
|       |                                                       |
|       | By:                                                        | /S/ John Howard |   |
|       | Name:                                                      | John Howard |
|       | Title:                                                     | Senior Vice President |
|       |                                                       |
|       | Address for notices:                                       |
|       |                                                       |
|       | 401 N. Executive Drive                                     |
|       | Brookfield, Wisconsin 53005                                |
|       | Attn:   Nenita Yumang                            |
|       | Facsimile: (262) 938-8684                                  |
|       | Telephone: (262) 938-8675                                  |
|       |                                                       |
|       | Lending Office:                                            |
|       |                                                       |
|       | 651 Nicollet Mall                                          |
|       | Minneapolis, Minnesota 55402                               |
|       | Attn:   Chad Kortgard                            |
|       | Facsimile: (612) 904-8012                                  |
|       | Telephone: (612) 904-8195                                  |
|            |                                                            |  |  |  |

 

----

 

**Schedule 1.1(a)**

 

**Term Loan Commitments and CapEx LoanCommitments**

 
| **Lender:**                             | ** ** | **Term Loan Commitment:** | ** **    | **CapEx Loan Commitment:** | ** ** |
|-----------------------------------------|------------|---------------------------|---------------|----------------------------|------------|
| Antares Capital Corporation             |       | $                         | 4,772,727.27  |                       | $          | 4,772,727.27 |   |
| M&I Marshall & Ilsley Bank |       | $                         | 2,727,272.73  |                       | $          | 2,727,272.73 |   |
| **TOTAL**                               | ** ** | **$**                     | **7,500,000** | ** **                 | **$**      | **7,500,000** | ** ** |

 

----

 

**Schedule 1.1(b)**

 

**Revolving Loan Commitments**

 
| **Lender:**                             | ** ** | **Revolving Loan Commitment:** | ** **        |
|-----------------------------------------|------------|--------------------------------|-------------------|
| Antares Capital Corporation             |       | $                              | 25,454,545.46     |   |
| M&I Marshall & Ilsley Bank |       | $                              | 14,545,454.54     |   |
| **TOTAL**                               | ** ** | **$**                          | **40,000,000.00** | ** ** |
|                                         |            |                                |                   |  |  |

 

----