exv10w1






Exhibit 10.1




Execution Version




 





$180,000,000




LOAN AND SECURITY AGREEMENT



Dated as of February 18, 2010



by and among



TACTICAL HOLDCORP, INC.,

as Holdings,



ATLANTIC DIVING SUPPLY, INC.

and certain of its Subsidiaries,

as Borrowers



and



MAR-VEL INTERNATIONAL, INC.

and certain other Subsidiaries of the Company,

as Subsidiary Guarantors,



THE LENDERS FROM TIME TO TIME PARTY HERETO,



WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent



SUNTRUST BANK,

RBS BUSINESS CAPITAL, A DIVISION OF RBS ASSET FINANCE, INC.,

A SUBSIDIARY OF RBS CITIZENS, NA and

BANK OF AMERICA, N.A.,

each, as a Syndication Agent



 





WELLS FARGO CAPITAL FINANCE, LLC,

as Sole Lead Arranger, Manager and Bookrunner



 





 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE 1 DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Defined Terms
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 2 CREDIT FACILITIES
	 	 	31	 
	 
	 	 	 	 
	Section 2.1 Revolving Loans
	 	 	31	 
	Section 2.2 Swingline Loans
	 	 	32	 
	Section 2.3 Letters of Credit
	 	 	33	 
	Section 2.4 Procedure for Advance of Loans
	 	 	36	 
	Section 2.5 Repayments and Prepayments
	 	 	37	 
	Section 2.6 Optional Reduction of Commitments
	 	 	39	 
	Section 2.7 Optional Increase of Commitments
	 	 	39	 
	Section 2.8 Overadvances; Special Agent Advances
	 	 	40	 
	Section 2.9 Joint and Several Liability of the Borrowers
	 	 	41	 
	Section 2.10 Appointment of Administrative Borrower as Agent for Requesting Loans and
Receipts of Loans and Statements
	 	 	43	 
	 
	 	 	 	 
	ARTICLE 3 GENERAL LOAN PROVISIONS
	 	 	44	 
	 
	 	 	 	 
	Section 3.1 Interest
	 	 	44	 
	Section 3.2 Fees
	 	 	46	 
	Section 3.3 Loan Accounts
	 	 	47	 
	Section 3.4 Pro Rata Treatment, Sharing of Payments, Funding by Lenders, Etc.
	 	 	47	 
	Section 3.5 Payments Generally
	 	 	49	 
	Section 3.6 Settlement Procedures
	 	 	50	 
	Section 3.7 Obligations Several; Independent Nature of Lenders’ Rights
	 	 	52	 
	Section 3.8 Bank Products
	 	 	52	 
	Section 3.9 Defaulting Lenders
	 	 	53	 
	 
	 	 	 	 
	ARTICLE 4 YIELD PROTECTION
	 	 	53	 
	 
	 	 	 	 
	Section 4.1 Inability to Determine Applicable Interest Rate
	 	 	53	 
	Section 4.2 Changed Circumstances
	 	 	54	 
	Section 4.3 Increased Costs
	 	 	54	 
	Section 4.4 Capital Requirements
	 	 	55	 
	Section 4.5 Taxes
	 	 	55	 
	Section 4.6 Breakage Indemnity
	 	 	57	 
	Section 4.7 Certificates for Reimbursement
	 	 	57	 
	Section 4.8 Delay in Requests
	 	 	57	 
	Section 4.9 Mitigation; Replacement of Lenders
	 	 	57	 
	Section 4.10 No Requirement of Match Funding
	 	 	58	 
	 
	 	 	 	 
	ARTICLE 5 CONDITIONS PRECEDENT
	 	 	58	 
	 
	 	 	 	 
	Section 5.1 Conditions Precedent to Initial Loans and Letters of Credit
	 	 	58	 
	Section 5.2 Conditions Precedent to All Loans and Letters of Credit
	 	 	62	 






i









 






TABLE OF CONTENTS

continued




	 	 	 	 	 
	 	 	Page
	ARTICLE 6 SECURITY INTEREST AND COLLECTION
	 	 	62	 
	 
	 	 	 	 
	Section 6.1 Grant of Security Interest
	 	 	62	 
	Section 6.2 Perfection of Security Interests
	 	 	63	 
	Section 6.3 Collection of Accounts
	 	 	67	 
	 
	 	 	 	 
	ARTICLE 7 COLLATERAL REPORTING AND COVENANTS
	 	 	68	 
	 
	 	 	 	 
	Section 7.1 Collateral Reporting
	 	 	68	 
	Section 7.2 Accounts Covenants
	 	 	69	 
	Section 7.3 Inventory Covenants; Appraisals
	 	 	69	 
	Section 7.4 Equipment and Real Property Covenants
	 	 	70	 
	Section 7.5 Power of Attorney
	 	 	71	 
	Section 7.6 Right to Cure
	 	 	72	 
	Section 7.7 Access to Premises; Field Audits
	 	 	72	 
	 
	 	 	 	 
	ARTICLE 8 REPRESENTATIONS AND WARRANTIES
	 	 	72	 
	 
	 	 	 	 
	Section 8.1 Corporate Existence, Power and Authority
	 	 	72	 
	Section 8.2 Name; State of Organization; Chief Executive Office; Collateral Locations
	 	 	73	 
	Section 8.3 Financial Statements; No Material Adverse Effect
	 	 	73	 
	Section 8.4 Priority of Liens; Title to Properties
	 	 	74	 
	Section 8.5 Tax Returns
	 	 	74	 
	Section 8.6 Litigation
	 	 	74	 
	Section 8.7 Compliance with Other Agreements and Applicable Laws
	 	 	74	 
	Section 8.8 Environmental Compliance
	 	 	74	 
	Section 8.9 Employee Benefits
	 	 	75	 
	Section 8.10 Bank Accounts
	 	 	76	 
	Section 8.11 Intellectual Property
	 	 	76	 
	Section 8.12 Subsidiaries; Affiliates; Capitalization; Solvency
	 	 	76	 
	Section 8.13 Labor Disputes
	 	 	77	 
	Section 8.14 Burdensome Restrictions
	 	 	77	 
	Section 8.15 Material Contracts and Material Government Contracts
	 	 	77	 
	Section 8.16 Real Property
	 	 	77	 
	Section 8.17 Payable Practices
	 	 	78	 
	Section 8.18 Accuracy and Completeness of Information
	 	 	78	 
	Section 8.19 Margin Security and Investment Company Act
	 	 	78	 
	Section 8.20 Insurance
	 	 	78	 
	Section 8.21 Accounts; Inventory
	 	 	78	 
	Section 8.22 Anti-Terrorism Laws
	 	 	79	 
	Section 8.23 Senior Indebtedness
	 	 	79	 
	Section 8.24 Survival of Warranties; Cumulative
	 	 	79	 
	 
	 	 	 	 
	ARTICLE 9 AFFIRMATIVE COVENANTS
	 	 	79	 
	 
	 	 	 	 
	Section 9.1 Maintenance of Existence
	 	 	79	 
	Section 9.2 New Collateral Locations
	 	 	80	 
	Section 9.3 Compliance with Laws, Regulations, Etc.
	 	 	80	 






ii









 






TABLE OF CONTENTS

continued




	 	 	 	 	 
	 	 	Page
	Section 9.4 Payment of Taxes and Claims
	 	 	81	 
	Section 9.5 Insurance
	 	 	81	 
	Section 9.6 Financial Statements and Other Information
	 	 	81	 
	Section 9.7 Compliance with ERISA
	 	 	84	 
	Section 9.8 End of Fiscal Years; Fiscal Quarters
	 	 	84	 
	Section 9.9 Intellectual Property
	 	 	85	 
	Section 9.10 After Acquired Real Property
	 	 	86	 
	Section 9.11 Further Assurances
	 	 	86	 
	Section 9.12 Additional Borrowers and Guarantors
	 	 	86	 
	Section 9.13 Use of Proceeds
	 	 	87	 
	Section 9.14 Fixed Charge Coverage Ratio
	 	 	87	 
	Section 9.15 Post-Closing Conditions
	 	 	87	 
	 
	 	 	 	 
	ARTICLE 10 NEGATIVE COVENANTS
	 	 	87	 
	 
	 	 	 	 
	Section 10.1 Limitations on Indebtedness
	 	 	87	 
	Section 10.2 Limitations on Liens
	 	 	88	 
	Section 10.3 Limitations on Investments
	 	 	90	 
	Section 10.4 Limitations on Fundamental Changes
	 	 	91	 
	Section 10.5 Limitations on Asset Dispositions
	 	 	91	 
	Section 10.6 Limitations on Restricted Payments
	 	 	92	 
	Section 10.7 Transactions with Affiliates
	 	 	93	 
	Section 10.8 Limitation on Certain Accounting Changes and Amendments to Organizational
Documents
	 	 	93	 
	Section 10.9 Limitation on Payments and Modifications of Subordinated Indebtedness
	 	 	94	 
	Section 10.10 Limitation on Modifications of Material Contracts and Material Government
Contracts
	 	 	94	 
	Section 10.11 No Further Negative Pledges; Restrictive Agreements
	 	 	94	 
	Section 10.12 Nature of Business
	 	 	95	 
	Section 10.13 Disposal of Subsidiary Interests
	 	 	95	 
	Section 10.14 Limitation on Holdings
	 	 	95	 
	 
	 	 	 	 
	ARTICLE 11 EVENTS OF DEFAULT AND REMEDIES
	 	 	95	 
	 
	 	 	 	 
	Section 11.1 Events of Default
	 	 	95	 
	Section 11.2 Remedies
	 	 	97	 
	Section 11.3 Crediting Payments and Proceeds
	 	 	100	 
	Section 11.4 Proofs of Claim
	 	 	102	 
	 
	 	 	 	 
	ARTICLE 12 THE ADMINISTRATIVE AGENT
	 	 	102	 
	 
	 	 	 	 
	Section 12.1 Appointment, Powers and Immunities
	 	 	102	 
	Section 12.2 Reliance by the Administrative Agent
	 	 	103	 
	Section 12.3 Events of Default
	 	 	103	 
	Section 12.4 Wachovia in its Individual Capacity
	 	 	103	 
	Section 12.5 Indemnification
	 	 	104	 
	Section 12.6 Non-Reliance on the Administrative Agent and Other Lenders
	 	 	104	 
	Section 12.7 Failure to Act
	 	 	104	 






iii









 






TABLE OF CONTENTS

continued




	 	 	 	 	 
	 	 	Page
	Section 12.8 Concerning the Collateral and the Related Loan Documents
	 	 	105	 
	Section 12.9 Field Audit, Examination Reports and other Information; Disclaimer by
Lenders
	 	 	105	 
	Section 12.10 Collateral Matters
	 	 	105	 
	Section 12.11 Agency for Perfection
	 	 	106	 
	Section 12.12 Successor Administrative Agent
	 	 	107	 
	Section 12.13 Other Agent Designations
	 	 	107	 
	 
	 	 	 	 
	ARTICLE 13 GUARANTY
	 	 	107	 
	 
	 	 	 	 
	Section 13.1 The Guaranty
	 	 	107	 
	Section 13.2 Bankruptcy
	 	 	108	 
	Section 13.3 Nature of Liability
	 	 	108	 
	Section 13.4 Independent Obligation
	 	 	108	 
	Section 13.5 Authorization
	 	 	108	 
	Section 13.6 Reliance
	 	 	109	 
	Section 13.7 Waiver
	 	 	109	 
	Section 13.8 Contribution
	 	 	110	 
	Section 13.9 Limitation on Enforcement
	 	 	110	 
	Section 13.10 Confirmation of Payment
	 	 	110	 
	 
	 	 	 	 
	ARTICLE 14 MISCELLANEOUS
	 	 	110	 
	 
	 	 	 	 
	Section 14.1 Notices
	 	 	110	 
	Section 14.2 Amendments and Waivers
	 	 	111	 
	Section 14.3 Costs and Expenses
	 	 	114	 
	Section 14.4 Indemnification
	 	 	115	 
	Section 14.5 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver
	 	 	116	 
	Section 14.6 Waiver of Notices
	 	 	117	 
	Section 14.7 [INTENTIONALLY OMITTED]
	 	 	117	 
	Section 14.8 Partial Invalidity
	 	 	117	 
	Section 14.9 Confidentiality
	 	 	117	 
	Section 14.10 Successors
	 	 	118	 
	Section 14.11 Successors and Assigns; Participations
	 	 	119	 
	Section 14.12 Term
	 	 	121	 
	Section 14.13 Entire Agreement
	 	 	123	 
	Section 14.14 USA Patriot Act
	 	 	123	 
	Section 14.15 Counterparts, Etc.
	 	 	123	 










iv









 








INDEX TO EXHIBITS AND SCHEDULES




EXHIBITS




	 	 	 

	Exhibit A

	 	Form of Assignment and Assumption
	Exhibit B

	 	Form of Borrowing Base Certificate
	Exhibit C

	 	Form of Compliance Certificate
	Exhibit D

	 	Form of Information Certificate
	Exhibit E

	 	Form of Joinder Agreement
	Exhibit F

	 	Form of Notice of Borrowing
	Exhibit G

	 	Form of Notice of Prepayment
	Exhibit H

	 	Form of Notice of Conversion or Continuation
	Exhibit I

	 	Form of Note
	Exhibit J

	 	Form of Instrument of Assignment
	Exhibit K

	 	Form of Notice of Assignment






SCHEDULES




	 	 	 

	Schedule 1.1(a)

	 	Lenders and Commitments
	Schedule 1.1(b)

	 	Existing Cash Equivalents
	Schedule 6.1

	 	Commercial Tort Claims
	Schedule 6.2(b)

	 	Chattel Paper; Instruments
	Schedule 8.2

	 	Name; State of Organization; Chief Executive Office; Collateral Locations
	Schedule 8.6

	 	Litigation
	Schedule 8.9

	 	Employee Benefits
	Schedule 8.10

	 	Deposit Accounts; and Securities Accounts
	Schedule 8.11

	 	Intellectual Property
	Schedule 8.12

	 	Subsidiaries; Affiliates; Capitalization; Solvency
	Schedule 8.13

	 	Labor Disputes
	Schedule 8.15

	 	Material Contracts; Material Government Contracts
	Schedule 8.16

	 	Real Property
	Schedule 9.15

	 	Post-Closing Conditions
	Schedule 10.1

	 	Existing Indebtedness
	Schedule 10.2

	 	Existing Liens
	Schedule 10.3

	 	Existing Investments
	Schedule 10.7

	 	Existing Affiliate Transactions




















 








LOAN AND SECURITY AGREEMENT




     This Loan and Security Agreement dated February 18, 2010 is entered into by and among
TACTICAL HOLDCORP, INC., a Delaware corporation (“Holdings”), ATLANTIC DIVING SUPPLY, INC.
(d/b/a ADS, Inc.), a Virginia corporation (the “Company”) and any Subsidiary of the
Company that becomes a party hereto as a “Borrower” in accordance with the terms hereof (together
with the Company, the “Borrowers”), MAR-VEL INTERNATIONAL, INC., a New Jersey corporation
and each additional Subsidiary of the Company that becomes a party hereto as a “Guarantor”
(collectively, the “Subsidiary Guarantors”), the parties hereto from time to time as
lenders, whether by execution of this Agreement or an Assignment and Assumption (collectively, the
“Lenders,” as hereinafter further defined) and WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association, in its capacity as administrative agent for the Lenders (in such
capacity, the “Administrative Agent” as hereinafter further defined) and in its capacity
as Issuing Lender for letters of credit hereunder (in such capacity, “Issuing Lender” as
hereinafter further defined).



W I T N E S S E T H:




     WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders enter into
financing arrangements with the Borrowers pursuant to which the Lenders may make loans and provide
other financial accommodations to the Borrowers; and



     WHEREAS, each Lender is willing to agree (severally and not jointly) to make such loans and
provide such financial accommodations to the Borrowers on a pro rata basis according to its
Commitment (as defined below) on the terms and conditions set forth herein and the Administrative
Agent is willing to act as administrative agent for the Lenders on the terms and conditions set
forth herein and the other Loan Documents;



     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:



ARTICLE 1

DEFINITIONS




     Section 1.1 Defined Terms. For purposes of this Agreement, the following terms have
the respective meanings given to them below:



     “Accounts” means, as to each Loan Party, all present and future accounts, as defined
in the UCC, of such Loan Party.



     “Acquisition” means any transaction or series of related transactions for the purpose
of resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the
assets of a Person, or all or substantially all of any business unit, division, product line or
line of business of any Person, (b) the acquisition in excess of fifty percent (50%) of all classes
of Capital Stock of any Person, or otherwise causing any Person to become a Subsidiary or (c) a
merger or consolidation or any other combination with another Person (other than a Person that is
already a Subsidiary).



     “Adjusted Eurodollar Rate” means, with respect to each Interest Period for any
Eurodollar Rate Loan comprising part of the same borrowing (including conversions, extensions and
renewals), the rate per annum determined by dividing (a) the LIBOR for such Interest Period by (b)
a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes hereof,
“Reserve Percentage” means for any day,







 









 







that percentage (expressed as a decimal) which is in effect from time to time under Regulation D of
the Board of Governors of the Federal Reserve System (or any successor), as such regulation may be
amended from time to time or any successor regulation, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency, special, or marginal reserves)
applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by reference to which the interest
rate of Eurodollar Rate Loans is determined), whether or not any Lender has any Eurocurrency
liabilities subject to such reserve requirement at that time. Eurodollar Rate Loans shall be deemed
to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements
without benefits of credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Percentage.




     “Administrative Agent” means Wachovia Bank, National Association, in its capacity as
administrative agent on behalf of the Lenders pursuant to the terms hereof and any replacement or
successor agent hereunder.



     “Administrative Agent Payment Account” means the account of the Administrative Agent
as the Administrative Agent may from time to time designate to the Administrative Borrower as the
Administrative Agent Payment Account for purposes of this Agreement and the other Loan Documents.



     “Administrative Borrower” means the Company, in its capacity as the administrative
borrower on behalf of itself and the other Borrowers pursuant to Section 2.10 and its
successors and assigns in such capacity.



     “Administrative Questionnaire” means an administrative questionnaire in a form
supplied by the Administrative Agent.



     “Affiliate” means, with respect to a specified Person, any other Person that directly
or indirectly, through one or more intermediaries, controls or is controlled by or is under common
control with such Person, and without limiting the generality of the foregoing, includes (a) any
Person which beneficially owns or holds five percent (5%) or more of any class of Voting Stock of
such Person or other equity interests in such Person, (b) any Person of which such Person
beneficially owns or holds five percent (5%) or more of any class of Voting Stock or in which such
Person beneficially owns or holds five percent (5%) or more of the equity interests, (c) any
director or executive officer of such Person and (d) solely for purposes of Section 10.7,
any Affiliate (as described in clause (b) above) of any director or executive officer of the
Company. For the purposes of this definition, the term “control” (including with correlative
meanings, the terms “controlled by” and “under common control with”), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or cause the direction
of the management and policies of such Person, whether through the ownership of Voting Stock, by
agreement or otherwise.



     “Aggregate Commitment” means the aggregate Commitments of all of the Lenders
hereunder, as such amount may be increased, reduced or otherwise modified pursuant to the terms of
this Agreement. The Aggregate Commitment on the Closing Date shall be $180,000,000.



     “Agreement” means, on any date, this Loan and Security Agreement as originally in
effect on the Closing Date and as thereafter from time to time amended, supplemented, amended and
restated or otherwise modified from time to time and in effect on such date.



2









 





     “Applicable Margin” means for Eurodollar Rate Loans, Base Rate Loans and Letter of
Credit Fees, the appropriate applicable percentages corresponding to the Level of Average Excess
Availability determined as of the most recent Calculation Date as shown below:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Applicable Margin for	 	 	 	 	 	Applicable Margin
	 	 	Average Excess	 	Eurodollar Rate	 	Applicable Margin	 	for Letter of Credit
	Level	 	Availability	 	Loans	 	for Base Rate Loans	 	Fees
	1	 	Greater than $25,000,000
	 	 	2.75	%	 	 	1.25	%	 	 	2.75	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	2	 	Less than or equal to
$25,000,000 but greater
than $15,000,000
	 	 	3.00	%	 	 	1.50	%	 	 	3.00	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3	 	Less than or equal to $15,000,000
	 	 	3.25	%	 	 	1.75	%	 	 	3.25	%






     The Applicable Margin shall be determined and adjusted quarterly on the date (each a
“Calculation Date”) five (5) Business Days after the date on which the Administrative
Borrower provides the monthly Borrowing Base Certificate in accordance with the provisions of
Section 7.1(a) for the last month of the applicable quarterly period; provided
that (i) the initial Applicable Margin shall be based on Level 2 (as shown above) and shall
remain at Level 2 until the first Calculation Date that occurs after the six-month anniversary of
the Closing Date, and, thereafter, the Level shall be determined by the Average Excess
Availability for the applicable quarterly period, and (ii) if the Administrative Borrower fails
to provide the monthly Borrowing Base Certificate to the Administrative Agent as required by and
within the time limits set forth in Section 7.1(a) or an Event of Default shall have
occurred and be continuing, the Applicable Margin shall be based on Level 3 until five (5)
Business Days after the applicable monthly Borrowing Base Certificate is provided or such Event
of Default is no longer continuing, whereupon the Level shall be determined by the Average Excess
Availability as of the most recent Calculation Date. Except as set forth above, each Applicable
Margin shall be effective from one Calculation Date until the next Calculation Date.



     “Approved Fund” means any Person (other than a natural Person), including without
limitation, any special purpose entity, that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business; provided that any such Approved Fund must be
administered, managed or underwritten by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.



     “Assignment and Assumption” means an Assignment and Assumption substantially in the
form of Exhibit A hereto (with blanks appropriately completed) delivered to the
Administrative Agent in connection with an assignment of a Lender’s interest hereunder in
accordance with the provisions of Section 14.11.



     “Assignment of Claims Act” means the Assignment of Claims Act of 1940, as it may be
amended from time to time, together with all regulations promulgated from time to time in respect
thereof.



3









 





     “Average Excess Availability” means, as of the end of each calendar quarter, the daily
average amount (calculated for such calendar quarter) of Excess Availability.



     “Bank Product Agreement” means those agreements entered into from time to time by any
Loan Party with a Bank Product Provider in connection with the obtaining of any of the Bank
Products.



     “Bank Product Amount” has the meaning given to such term in the definition of Bank
Products.



     “Bank Product Obligations” has the meaning given to such term in the definition of
Obligations.



     “Bank Product Provider” means any Lender or any of its Affiliates that provides any
Bank Products to any Loan Party; provided, that if, at any time, a Lender ceases to be a
Lender under this Agreement, then, from and after the date on which it ceases to be a Lender
hereunder, neither it nor any of its Affiliates shall constitute Bank Product Providers and the
obligations with respect to Bank Products provided by such former Lender or any of its Affiliates
shall no longer constitute Obligations.



     “Bank Products” means any one or more of the following types or services or
facilities provided to a Loan Party by a Bank Product Provider: (a) credit cards, stored value
cards or purchase cards, (b) cash management or related services, including (i) the automated
clearinghouse transfer of funds for the account of a Loan Party pursuant to agreement or overdraft
for any accounts of a Loan Party maintained at the Administrative Agent or any Bank Product
Provider that are subject to the control of the Administrative Agent pursuant to any Deposit
Account Control Agreement to which the Administrative Agent or such Bank Product Provider is a
party, as applicable, (ii) controlled disbursement services and (iii) E-payables or comparable
services, and (c) Hedge Agreements if and to the extent permitted hereunder. In connection with
any Bank Product, each Bank Product Provider, other than the Administrative Agent and its
Affiliates, shall provide written notice to the Administrative Agent (1) prior to entering into a
Bank Product of (x) the existence of such Bank Product, (y) the maximum dollar amount of
obligations arising thereunder (the “Bank Product Amount”) and (z) the methodology to be
used by such parties in determining the obligations under such Bank Product from time to time and
(2) in connection with any Bank Product that is a Hedge Agreement, from time to time but no less
frequently than monthly, the mark-to-market exposure with respect to Bank Products consisting of
Hedge Agreements provided by such Bank Product Provider, giving effect to any netting with respect
to all such Bank Products consisting of Hedge Agreements provided by such Bank Product Provider to
the Loan Parties, as reasonably determined by such Bank Product Provider. The Bank Product Amount
may be changed from time to time upon written notice to the Administrative Agent by the applicable
Bank Product Provider. No Bank Product Amount may be established at any time that a Default or
Event of Default exists, or if a reserve in such amount would cause an Overadvance.



     “Base Rate” means, on any date, the greatest of (a) the rate from time to time
publicly announced by Wachovia as its prime rate, with the understanding that the “prime rate” is
one of Wachovia’s base rates (not necessarily the lowest of such rates) and serves as the basis
upon which effective rates of interest are calculated for those loans making reference thereto (and
each change in the prime rate shall be effective as of the opening of business on the day such
change in such prime rate occurs), (b) the Federal Funds Rate in effect on such day plus
one-half percent (0.50%) and (c) the LIBOR Rate for a one month Interest Period on such day
plus one and one-half percent (1.50%) (provided that if the LIBOR Rate is not
available on such date as described in Article 4 or otherwise, the most recently available
LIBOR Rate for a one month Interest Period shall be used).



     “Base Rate Loans” means any Loan made to a Borrower that bears interest based on the Base
Rate.




4











 





     “Blocked Accounts” has the meaning given to such term in
Section 6.3(a).


     “Borrowers” has the meaning given to such
terms in the preamble hereof.


     “Borrowing Base” means, as of any
date of calculation, the amount equal to:



          (a) up to ninety percent (90%) of Eligible Government Accounts; plus




          (b) up to eighty-five percent (85%) of Eligible Commercial Accounts; plus




          (c) the least of (i) up to sixty-five percent (65%) multiplied by the Value of
Eligible Inventory, (ii) up to eighty-five percent (85%) of the Net Recovery Percentage
multiplied by the Value of Eligible Inventory and (iii) $55,000,000; minus




          (d) Reserves.




     The amounts of Eligible Inventory of any Borrower shall, at the Administrative Agent’s
option, be determined based on the lesser of the amount of Inventory set forth in the general
ledger of such Borrower or the perpetual inventory record maintained by such Borrower.



     “Borrowing Base Certificate” means a borrowing base certificate in substantially the
form of Exhibit B hereto.



     “Business Day” means any day other than a Saturday, Sunday, or other day on which
commercial banks are authorized or required to close under the laws of the State of New York or the
State of North Carolina, and a day on which the Administrative Agent is open for the transaction of
business, except that if a determination of a Business Day shall relate to any Eurodollar Rate
Loans, the term Business Day shall also exclude any day on which banks are closed for dealings in
Dollar deposits in the London interbank market or other applicable Eurodollar Rate market.



     “Calculation Date” has the meaning given to such term in the definition of
Applicable Margin.



     “Capital Expenditures” means expenditures for the acquisition (including the
acquisition by capitalized lease) or improvement of capital assets, as determined in accordance
with GAAP.



     “Capital Leases” means, as applied to any Person, any lease of (or any agreement
conveying the right to use) any property (whether real, personal or mixed) by such Person as lessee
which in accordance with GAAP, is required to be reflected as a liability on the balance sheet of
such Person.



     “Capital Stock” means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of such Person’s capital stock or
partnership, limited liability company or other equity interests at any time outstanding, and any
and all rights, warrants or options exchangeable for or convertible into such capital stock or
other interests (but excluding any debt security that is exchangeable for or convertible into such
capital stock).



     “Cash Dividends” means, for any applicable period of computation, the aggregate amount
of all Restricted Payments paid in cash by the Company pursuant to Section 10.6(c)(ii) and
(e) during such period.



     “Cash Equivalents” means, at any time, (a) any evidence of Indebtedness with a
maturity date of ninety (90) days or less issued or directly and fully guaranteed or insured by
the United States of America



5









 




or any agency or instrumentality thereof; provided that the full faith and credit of the
United States of America is pledged in support thereof; (b) certificates of deposit or bankers’
acceptances with a maturity of ninety (90) days or less of any financial institution that is a
member of the Federal Reserve System having combined capital and surplus and undivided profits of
not less than $1,000,000,000; (c) commercial paper (including variable rate demand notes) with a
maturity of ninety (90) days or less issued by a corporation (except an Affiliate of any Loan
Party) organized under the laws of any State of the United States of America or the District of
Columbia and rated at least A-1 by S&P or at least P-1 by Moody’s; (d) repurchase obligations with
a term of not more than thirty (30) days for underlying securities of the types described in clause
(a) above entered into with any financial institution having combined capital and surplus and
undivided profits of not less than $1,000,000,000; (e) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or unconditionally guaranteed by the
United States of America or issued by any governmental agency thereof and backed by the full faith
and credit of the United States of America, in each case maturing within ninety (90) days or less
from the date of acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository Institutions with Securities
Dealers and Others, as adopted by the Comptroller of the Currency on October 31, 1985; (f)
investments in money market funds and mutual funds which invest substantially all of their assets
in securities of the types described in clauses (a) through (e) above; and (g) those investments
identified on Schedule 1.1(b). For the avoidance of doubt, auction rate securities shall
not constitute “Cash Equivalents”.




     “Cash Taxes” means, for any applicable period of computation, without duplication,
the sum of (a) all federal, state, local and foreign income taxes paid in cash by the Borrowers
during such period (net of all income tax refunds and credits received in cash by the Borrowers
during such period), which number for the applicable period of computation shall not be less than
zero, determined on a combined basis in accordance with applicable law and GAAP and (b) Permitted
Tax Distributions paid by the Company during such period.



     “Change in Law” means the occurrence, after the date of this Agreement, of any of
the following:
(a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any
law, rule, regulation or treaty or in the administration, interpretation or application thereof by
any Governmental Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.



     “Change of Control” means (a) the failure of the Permitted Holders, collectively, to
directly own and control in excess of 50% of the Voting Stock of Holdings on a fully-diluted basis
(taking into account all Voting Stock that the Permitted Holders have the right to acquire
pursuant to any option right); or
(b) the failure of Holdings to directly own and control one hundred percent (100%) of each class
of Capital Stock of the Company; or (c) except as otherwise permitted pursuant to Section
10.4 or 10.5, the failure of the Company to, directly or indirectly, own and control
one hundred percent (100%) of each class of the Capital Stock of each Subsidiary Loan Party; or
(d) during any year following the Closing Date, individuals who at the beginning of such year
constituted the board of directors of the Company or Holdings (together with any new directors
whose election to the applicable board of directors or whose nomination for election by the
equityholders of the Company or Holdings, as applicable, was approved by a vote of at least a
majority of the members of the applicable board of directors then still in office who were either
directors at the beginning of such year or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the board of directors of
the Company or Holdings, as applicable, then still in office.



     “Closing Date” means the date on which the conditions specified in Section
5.1 are satisfied (or waived in accordance with Section 14.2).



6









 





     “Closing Date Dividend” has the meaning given to such term in Section
10.6(c)(i).



     “Code” means the Internal Revenue Code of 1986, as the same now exists or may from
time to time hereafter be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.



     “Collateral” has the meaning given to such term in Section 6.1.



     “Collateral Access Agreement” means an agreement in writing, in form and substance
reasonably satisfactory to the Administrative Agent, from a lessor of premises to any Loan Party,
or another person to whom any Collateral is consigned or who has custody, control or possession of
any such Collateral or is otherwise the owner or operator of a premises on which any of such
Collateral is located, in favor of the Administrative Agent with respect to the Collateral at such
premises or otherwise in the custody, control or possession of such lessor, consignee or other
person.



     “Commercial Accounts” means all Accounts other than Government Accounts.



     “Commitment” means, at any time, as to each Lender, the principal amount set forth
beside such Lender’s name on Schedule 1.1(a) or in the Assignment and Assumption Agreement
pursuant to which such Lender became a Lender hereunder in accordance with the provisions of
Section 14.11, as the same may be adjusted from time to time in accordance with the terms
hereof.



     “Commitment Fee” has the meaning given to such term in Section 3.2(a).



     “Commitment Fee Rate” means, on any date of calculation, one-half of one percent
(0.50%) per annum.



     “Company” has the meaning given to such term in the preamble.



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



     “Credit Facility” means the Loans and Letters of Credit provided to or for the benefit
of any Borrower pursuant to Sections 2.1, 2.2 and 2.3.



     “Default” means an act, condition or event which with notice or passage of time or
both would constitute an Event of Default.



     “Defaulting Lender” means any Lender that (a) has failed to fund any amounts required
to be funded by it under the Agreement within one (1) Business Day of the date that it is required
to do so under the Agreement (including the failure to make available to the Administrative Agent
amounts required pursuant to a Settlement Advance or to make a required payment in connection with
a Letter of Credit), (b) notified any Borrower (and the Borrowers have notified the Administrative
Agent), the Administrative Agent or any other Lender (and such Lender has notified the
Administrative Agent) in writing that it does not intend to comply with all or any portion of its
funding obligations under the Agreement, (c) has made a public statement to the effect that it does
not intend to comply with its funding obligations under the Agreement or under other agreements
generally (as reasonably determined by the Administrative Agent) under which it has committed to
extend credit, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it under the Agreement within one (1) Business Day of the date
that it is required to do so under the Agreement, unless the subject of a good faith dispute, or
(e) (i) becomes or is insolvent or has a parent company that



7









 




has become or is insolvent or (ii) becomes the subject of a bankruptcy or insolvency proceeding, or
has had a receiver, conservator, trustee, or custodian or appointed for it, or has taken any action
in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding
or appointment or has a parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, or custodian appointed for it, or has
taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment.




     “Default Rate” means the applicable rate set forth in Section 3.1(c).



     “Deferred Revenue Excess” has the meaning set forth in the definition of “Eligible
Government Accounts”.



     “Deposit Account Control Agreement” means an agreement in writing, in form and
substance reasonably satisfactory to the Administrative Agent, by and among the Administrative
Agent, the Loan Party with a deposit account at any bank and the bank at which such deposit account
is at any time maintained which provides that such bank will comply with instructions originated by
the Administrative Agent directing disposition of the funds in the deposit account without further
consent by such Loan Party and has such other terms and conditions as the Administrative Agent may
reasonably require.



     “Disqualified Capital Stock” means any Capital Stock that, by its terms (or by the
terms of any security or other Capital Stock into which it is convertible or for which it is
exchangeable) or upon the happening of any event or condition, (a) matures or is mandatorily
redeemable (other than solely for Qualified Capital Stock), pursuant to a sinking fund obligation
or otherwise (except as a result of a change of control or asset sale so long as any rights of the
holders thereof upon the occurrence of a change of control or asset sale event shall be subject to
the prior repayment in full of the Revolving Loans and all other Obligations that are accrued and
payable and the termination of the Commitments), (b) is redeemable at the option of the holder
thereof (other than solely for Qualified Capital Stock) (except as a result of a change of control
or asset sale so long as any rights of the holders thereof upon the occurrence of a change of
control or asset sale event shall be subject to the prior repayment in full of the Revolving Loans
and all other Obligations that are accrued and payable and the termination of the Commitments), in
whole or in part, (c) provides for the scheduled payment of dividends in cash or (d) is or becomes
convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute
Disqualified Capital Stock, in each case, prior to the date that is 91 days after the Maturity
Date; provided, that if such Capital Stock is issued pursuant to a plan for the benefit of
Holdings, the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock
shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased
by Holdings, the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory
obligations.



     “Dollars” means the lawful currency of the United States of America.



     “Domestic Subsidiary” means any Subsidiary that is incorporated or organized under
the laws of any state of the United States or the District of Columbia.



     “EBITDA” means, for any applicable period of computation, determined on a combined
basis for the Borrowers in accordance with GAAP, (a) Net Income for such period plus (b)
without duplication, the sum of the following to the extent deducted in calculating Net Income: (i)
Interest Expense for such period, (ii) income tax expense (including, without limitation, any
federal, state, local and foreign income and similar taxes) of the Borrowers for such period, (iii)
depreciation and amortization of the Borrowers for such period, (iv) any non-cash charges for such
period (excluding non-cash charges that are expected to become cash charges in a future period or
that are reserves for future cash charges), (v) non-cash losses for such period from the proposed
or actual disposition of material assets, (vi) Transaction Costs for such



8









 




period, (vii) costs and expenses incurred in connection with the relocation of the Company’s
headquarters for such period and (viii) financial advisory and other related fees and expenses for
such period in an amount acceptable to the Administrative Agent, minus (c) without
duplication, the sum of the following to the extent included in calculating Net Income: (i)
non-cash, extraordinary or non-recurring gains for such period and (ii) non-cash gains for such
period from the proposed or actual disposition of material assets.




     “Eligible Accounts” means Accounts created by a Borrower that in each case satisfy the
criteria set forth below as reasonably determined by the Administrative Agent:



          (a) such Accounts arise from the actual and bona fide sale and delivery of goods by such
Borrower or rendition of services by such Borrower in the ordinary course of its business which
transactions are completed in accordance with the terms and provisions contained in any documents
related thereto;




          (b) such Accounts (i) are evidenced by an invoice delivered to the related account debtor,
(ii) are not unpaid more than sixty (60) days after the original due date therefor and (iii) are
not unpaid more than ninety (90) days after the date of the original invoice thereof;




          (c) such Accounts comply with the following terms and conditions: (i) the amounts shown on any
invoice delivered to the Administrative Agent or schedule thereof delivered to the Administrative
Agent shall be true and complete, (ii) no payments shall be made thereon except payments
immediately delivered to the Administrative Agent to the extent required pursuant to the terms of
this Agreement, (iii) no credit, discount, allowance or extension or agreement for any of the
foregoing shall be granted to any account debtor except for credits, discounts, allowances or
extensions made or given in the ordinary course of each Borrower’s business in accordance with
practices and policies previously disclosed to the Administrative Agent and (iv) none of the
transactions giving rise thereto will violate any applicable foreign, Federal, State or local laws
or regulations, all documentation relating thereto will be legally sufficient under such laws and
regulations and all such documentation will be legally enforceable in accordance with its terms;




          (d) such Accounts do not arise from sales on consignment, guaranteed sale, sale and return,
sale on approval, or other terms under which payment by the account debtor may be conditional or
contingent;




          (e) such Accounts do not consist of percentage of completion accounts or progress billings
(such that the obligation of the account debtors with respect to such Accounts is conditioned upon
such Borrower’s satisfactory completion of any further performance under the agreement giving rise
thereto), bill and hold invoices or retainage invoices, except as to bill and hold invoices, if the
Administrative Agent shall have received an agreement in writing from the account debtor, in form
and substance reasonably satisfactory to the Administrative Agent, confirming the unconditional
obligation of the account debtor to take the goods related thereto and pay such invoice;




          (f) such Accounts are not owing by creditors or suppliers;




          (g) there are no facts, events or occurrences which would impair the validity, enforceability
or collectability of such Accounts or reduce the amount payable or materially delay payment
thereunder;




          (h) such Accounts are subject to the first priority, valid and perfected security interest of
the Administrative Agent;




9









 





          (i) such Accounts are not subject to any other Liens and any goods giving rise
thereto are not, and were not at the time of the sale thereof, subject to any Liens, in each case
other than Liens permitted under Section 10.2 that are subordinated to the Lien of the
Administrative Agent pursuant to an intercreditor agreement in form and substance reasonably
satisfactory to the Administrative Agent;




          (j) neither the account debtor nor any officer or employee of the account debtor
with
respect to such Accounts is an officer, employee, agent or Affiliate of any Loan Party;




          (k) there are no proceedings or actions which are pending or, to the knowledge of any
Responsible Officer of any Loan Party, threatened against the account debtors with respect to such
Accounts which might result in any material adverse change in any such account debtor’s financial
condition (including, without limitation, any bankruptcy, dissolution, liquidation, reorganization
or similar proceeding);




          (l) such Accounts are not owed by an account debtor who has Accounts classified as
ineligible under clause (b) above which constitute more than thirty-five percent (35%) of the
total Accounts of such account debtor;




          (m) the account debtor is not located in a state requiring the filing of a “Notice of Business
Activities Report” or similar report in order to permit such Borrower to seek judicial enforcement
in such State of payment of such Account, unless such Borrower has qualified to do business in such
state or has filed a “Notice of Business Activities Report” or equivalent report for then current
year or such failure to file and inability to seek judicial enforcement is capable of being
remedied without any material delay or material cost;




          (n) such Accounts do not include any billing for interest, fees or late charges (but the
portion of the Accounts in excess of such amounts shall be deemed Eligible Accounts if such
Accounts are otherwise Eligible Accounts);




          (o) such Accounts are owed by account debtors deemed creditworthy at all times by the
Administrative Agent in good faith; and




          (p) no portion of any such Accounts is evidenced by a promissory note or other instrument or
by chattel paper.



The criteria for Eligible Accounts set forth above may be changed and any new criteria for Eligible
Accounts may be established by the Administrative Agent in good faith in order to address either:
(i) an event, condition or other circumstance arising after the Closing Date, or (ii) an event,
condition or other circumstance existing on the Closing Date to the extent the Administrative Agent
has no written notice thereof from a Borrower prior to the Closing Date, in either case under
clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the
Accounts in the good faith determination of the Administrative Agent. Any Accounts that are not
Eligible Accounts shall nevertheless be part of the Collateral. Prior to the inclusion of any
Accounts acquired in connection with any Permitted Acquisition as Eligible Accounts, the
Administrative Agent or its designee shall have conducted an audit and field examination with
respect to such Accounts, the results of which audit and field examination shall be reasonably
satisfactory to the Administrative Agent.




     “Eligible Assignee” means (a) any Lender, (b) any Affiliate of a Lender, (c) an
Approved Fund or (d) any other Person (other than a natural person) that is approved by the
Administrative Agent (which approval shall not be unreasonably withheld, conditioned or delayed),
provided that neither Holdings, the Company nor any Subsidiary or Affiliate thereof shall qualify
as an Eligible Assignee.



10









 





     “Eligible Commercial Accounts” means Eligible Accounts consisting of Commercial
Accounts that, in each case, satisfy the additional criteria set forth below as reasonably
determined by the Administrative Agent:



          (a) the chief executive office of the account debtor with respect to such Accounts is located
in the United States of America or, at the Administrative Agent’s option, if the chief executive
office and principal place of business of the account debtor with respect to such Accounts is
located other than in the United States of America, then if either: (i) the account debtor has
delivered to such Borrower an irrevocable letter of credit issued or confirmed by a bank reasonably
satisfactory to the Administrative Agent and payable only in the United States of America and in
Dollars, sufficient to cover such Account, in form and substance reasonably satisfactory to the
Administrative Agent and if required by Section 6.2(f), the original of such letter of
credit has been delivered to the Administrative Agent or the Administrative Agent’s agent and the
issuer thereof, and such Borrower has complied with the other applicable terms of Section
6.2(f) with respect to the assignment of the proceeds of such letter of credit to the
Administrative Agent or naming the Administrative Agent as transferee beneficiary thereunder, as
the Administrative Agent may specify, or (ii) such Account is subject to credit insurance payable
to the Administrative Agent issued by an insurer and on terms and in an amount acceptable to the
Administrative Agent, or (iii) such Account, when aggregated with all such other Accounts, is not
in excess of $2,000,000 and is otherwise acceptable in all respects to the Administrative Agent
(subject to such lending formula with respect thereto as the Administrative Agent may reasonably
determine), then so long as such Account is otherwise an Eligible Account, such Account will be
included as an Eligible Commercial Account;




          (b) such Accounts are not otherwise subject to any potential offset, counterclaim, dispute,
deduction, discount, recoupment, reserve, defense, chargeback, rebate, credit or allowance
(provided that if such Accounts are otherwise Eligible Commercial Accounts, the portion of
such Accounts in excess of the amount at any time and from time to time owed by such Borrower to
such account debtor or claimed owed by such account debtor may be deemed Eligible Commercial
Accounts);




          (c) the aggregate amount of such Accounts owing by a single account debtor do not constitute
more than ten percent (10%) of the sum of (i) the aggregate amount of all otherwise Eligible
Commercial Accounts plus (ii) the aggregate amount of all Eligible Government Accounts (but
the portion of the Accounts not in excess of such percentage shall be deemed Eligible Commercial
Accounts);




          (d) the account debtors with respect to such Accounts are not any foreign government, the
United States of America, any State, political subdivision, department, agency or instrumentality
thereof; and




          (e) such Accounts are owed by account debtors whose total indebtedness to such Borrower does
not exceed the credit limit with respect to such account debtors as determined by such Borrower
from time to time, to the extent such credit limit as to any account debtor is established
consistent with the current practices and policies of such Borrower as of the Closing Date and such
credit limit is reasonably acceptable to the Administrative Agent (but the portion of the Accounts
not in excess of such credit limit may be deemed Eligible Commercial Accounts if such Accounts are
otherwise Eligible Commercial Accounts).




     “Eligible Government Accounts” means Eligible Accounts consisting of Government
Accounts but excluding any portion of a Government Account:



11









 





          (a) against which the applicable U.S. Governmental Authority has exercised its right of
setoff or deduction or has formally notified a Borrower of its intention to do so;




          (b) relating to the last payment due to a Borrower under a prime contract between such
Borrower and the applicable U.S. Governmental Authority, unless (i) such contract is a “Fixed
Price Contract” (as defined in Federal Acquisition Regulation Part 16.2, or any successor
regulation) which does not include any provision for progress payments, incentive arrangements, or
price redetermination or (ii) the Administrative Agent has otherwise consented in writing to the
inclusion of such Account as an Eligible Government Contract;




          (c) to the extent such Government Account is offset by a deferred revenue deposit related to
such Government Account (but only to the extent of such deferred revenue deposit;
provided, that to the extent any such deferred revenue deposit exceeds the related
Government Account (such excess, the “Deferred Revenue Excess”), such Deferred Revenue
Excess shall reduce the related Eligible Inventory related to such Government Account on a dollar
for dollar basis); and




          (d) as to which such Borrower shall not have executed a Notice of Assignment and an Instrument
of Assignment with respect to the underlying Government Contract and any other agreements,
instruments and documents and performed all acts that the Administrative Agent may reasonably
require to ensure compliance with the Assignment of Claims Act (or any other similar state laws);
provided, however, that the filing of such Notice of Assignment and Instrument of
Assignment with the applicable U.S. Governmental Authority shall not occur until required pursuant
to Section 6.2(h).




     “Eligible Inventory” means, as to each Borrower, Inventory of such Borrower
consisting of finished goods held for resale in the ordinary course of the business of such
Borrower, except to the extent consisting of any of the following as determined by the
Administrative Agent:



          (a) work-in-process;




          (b) components which are not part of finished goods;




          (c) spare parts for equipment;




          (d) display items, samples, tooling and packaging and shipping materials;




          (e) supplies used or consumed in such Borrower’s business;




          (f) Inventory located on leased premises or in the possession of a warehouseman or processor,
unless such lessor, warehouseman or processor has delivered a Collateral Access Agreement with
respect thereto or an appropriate Reserve with respect to rent has been established with respect
thereto;




          (g) Inventory located at any premises if the Value of the Inventory located at such premises
is less than $100,000 unless otherwise agreed by the Administrative Agent in its sole discretion;




          (h) Inventory subject to a Lien of any other Person which Lien is not subordinated to the
Lien of the Administrative Agent pursuant to an intercreditor agreement in form and substance
reasonably satisfactory to the Administrative Agent;




          (i) bill and hold goods;








12









 








          (j) unsalable, unserviceable, obsolete or slow moving Inventory;




          (k) Inventory that is not subject to the first priority, valid and perfected security
interest of the Administrative Agent;




          (l) returned, damaged and/or defective Inventory;




          (m) Inventory subject to a negotiable warehouse receipt or other negotiable Document;




          (n) Inventory purchased or sold on consignment;




          (o) Inventory located outside the United States of America or Inventory that is in transit
(other than Inventory that is otherwise Eligible Inventory and is in transit between domestic
locations of the Borrowers); and




          (p) Inventory related to any Government Account to the extent of any Deferred Revenue Excess.



The criteria for Eligible Inventory set forth above may be changed and any new criteria for
Eligible Inventory may be established by the Administrative Agent in good faith in order to
address either: (i) an event, condition or other circumstance arising after the Closing Date or
(ii) an event, condition or other circumstance existing on the Closing Date to the extent the
Administrative Agent has no written notice thereof from the Administrative Borrower prior to the
Closing Date, in either case under clause (i) or (ii) which adversely affects or could reasonably
be expected to adversely affect the Inventory in the good faith determination of the
Administrative Agent. Any Inventory that is not Eligible Inventory shall nevertheless be part of
the Collateral. Prior to the inclusion of any Inventory acquired in connection with any Permitted
Acquisition as Eligible Inventory, the Administrative Agent or its designee shall have conducted
an appraisal and field examination with respect to such Inventory, the results of which appraisal
and field examination shall be reasonably satisfactory to the Administrative Agent.




     “Environmental Laws” means all foreign, Federal, State, provincial and local laws
(including common law), legislation, rules, codes, licenses, permits (including any conditions
imposed therein), authorizations, judicial or administrative decisions, injunctions or agreements
between any Loan Party and any Governmental Authority, (a) relating to pollution and the
protection, preservation or restoration of the environment (including air, water vapor, surface
water, ground water, drinking water, drinking water supply, surface land, subsurface land, plant
and animal life or any other natural resource), or to human health or safety, (b) relating to the
exposure to, or the use, storage, recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release or disposal, or threatened
release, of Hazardous Materials, or (c) relating to all laws with regard to recordkeeping,
notification, disclosure and reporting requirements respecting Hazardous Materials including,
without limitation, (i) the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act, the Federal Water
Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean Air Act, the Federal
Resource Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments
thereto), the Federal Solid Waste Disposal and the Federal Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of
1974, (ii) applicable state counterparts to such laws and (iii) any common law, civil law or
equitable doctrine that may impose liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure to any Hazardous Materials.



13









 





     “Equipment” means, as to each Loan Party, all of such Loan Party’s now owned and
hereafter acquired equipment, as defined in the UCC, wherever located, including all attachments,
accessions and property now or hereafter affixed thereto or used in connection therewith, and
substitutions and replacements thereof, wherever located.



     “ERISA” means the Employee Retirement Income Security Act of 1974, together with all
rules, regulations and interpretations thereunder or related thereto.



     “ERISA Affiliate” means any person required to be aggregated with the Company or any
of its Subsidiaries under Sections 414(b), 414(c), 414(m) or 414(o) of the Code or Section 4001(b)
of ERISA.



     “ERISA Event” means (a) any “reportable event”, as defined in Section 4043(c) of ERISA
or the regulations issued thereunder, with respect to a Pension Plan, other than events as to which
the requirement of notice has been waived in regulations by the Pension Benefit Guaranty
Corporation, (b) the adoption of any amendment to a Pension Plan that would require the provision
of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or a cessation
of operations which is treated as such a withdrawal or notification that a Multiemployer Plan is in
reorganization, (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings
by the Pension Benefit Guaranty Corporation to terminate a Pension Plan, (e) an event or condition
which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, (f) the imposition of any
liability under Title IV of ERISA, other than the Pension Benefit Guaranty Corporation premiums due
but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate in excess
of $500,000 and (g) any other event or condition with respect to a Plan including any Pension Plan
subject to Title IV of ERISA maintained, or contributed to, by any ERISA Affiliate that could
reasonably be expected to result in liability of any Borrower in excess of $500,000.



     “Eurodollar Rate Loans” means any Revolving Loan made to a Borrower that bears
interest based on the Adjusted Eurodollar Rate.



     “Event of Default” has the meaning given to such term in Section 11.1.



     “Excess Availability” means the amount, as determined by the Administrative Agent,
calculated at any date, equal to (a) the lesser of (i) the Aggregate Commitment and (ii) the
Borrowing Base (as set forth in the Borrowing Base Certificate most recently delivered by the
Administrative Borrower) minus (b) the sum of (i) the Total Outstanding as of such date
plus (ii) the aggregate amount of all then outstanding and unpaid trade payables and other
obligations of any Borrower which are outstanding more than thirty (30) days past due as of the end
of the immediately preceding month or at the Administrative Agent’s option, as of a more recent
date based on such reports as the Administrative Agent may from time to time request (other than
trade payables or other obligations being contested or disputed by such Borrower in good faith)
plus (iii) without duplication, the amount of checks issued by such Borrower to pay trade
payables and other obligations which are more than thirty (30) days past due as of the end of the
immediately preceding month or at the Administrative Agent’s option, as of a more recent date based
on such reports as the Administrative Agent may from time to time request (other than trade
payables or other obligations being contested or disputed by such Borrower in good faith), but not
yet sent.



     “Exchange Act” means the Securities Exchange Act of 1934, together with all rules,
regulations and interpretations thereunder or related thereto.



14









 





     “Excluded Bank Account” means (a) deposit accounts specifically and exclusively used
for, payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of
any Loan Party’s employees, (b) that certain deposit account in existence on the Closing Date with
Merrill Lynch Capital Corporation (or any successor thereto) so long as such account (i) does not
at any time have more than $1,000,000 on deposit therein and (ii) is used solely for the purpose
of the Company’s credit card program with Merrill Lynch Capital Corporation, (c) that certain
deposit account in existence on the Closing Date with Charter Bank (or any successor thereto) so
long as such account does not at any time have more than $250,000 on deposit therein or (d) any
other deposit account or securities account which, individually or in the aggregate, does not at
any time have more than $50,000 on deposit therein.



     “Excluded Taxes” means, with respect to the Administrative Agent, Issuing Lender, any
Lender or any other recipient of any payment to be made by or on account of any obligation of any
Loan Party hereunder, (a) any taxes imposed on or measured by its overall net income (however
denominated) or net profits of such Person (and franchise taxes imposed in lieu thereof) by the
jurisdiction under the laws of which such recipient (i) is organized or incorporated, (ii)
maintains its principal lending office or, in the case of any Lender or Issuing Lender, its
applicable lending office with respect to this Agreement or (iii) has a present or former
connection other than a connection resulting from entering into this Agreement, receiving any
payment or enforcing any right under this Agreement; (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction in which such Lender
or Issuing Lender is located and (c) in the case of any Foreign Lender, any withholding tax
payable with respect to payments under the Loan Documents under laws (including any statute,
treaty or regulation) in effect on the Closing Date (or, in the case of an Eligible Assignee, the
date of the Assignment and Assumption) or is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with Section 4.5(g),
except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time
of assignment, to receive additional amounts from the Loan Party with respect to such withholding
tax pursuant to Section 4.5(b).



     “Existing Facility” means, collectively, (a) the credit facility of the Company
evidenced by that certain Loan Agreement dated as of August 22, 2007 (as amended from time to time
prior to the date hereof) by and between the Company, as borrower, and Wachovia Bank, National
Association, as lender and (b) the credit facility of the Company evidenced by that certain Loan
Agreement dated as of August 26, 2006 (as amended from time to time prior to the date hereof) by
and between the Company, as borrower, and Wachovia Bank, National Association, as lender.



     “Facility Increase” has the meaning given to such term in Section 2.7.



     “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal, for each day during such period, to the weighted average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative Agent from three
Federal Funds brokers of recognized standing selected by it.



     “Fee Letter” means the letter agreement, dated as of January 12, 2010, by and among
the Company, Wachovia and Wells Fargo Foothill, LLC (now known as Wells Fargo Capital Finance,
LLC), setting forth certain fees payable by the Borrowers in connection with the Credit Facility,
as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.



15









 





     “Filing Threshold Amount” means $10,000,000 plus proportionate increases
thereto to reflect any Facility Increases.



     “Fixed Charge Coverage Ratio” means, as of the last day of each fiscal month of the
Borrowers, the ratio of (a) (i) EBITDA plus (ii) cash interest income minus (iii)
Unfinanced Capital Expenditures minus (iv) Cash Taxes to (b) Fixed Charges, in each case,
computed for the twelve (12) consecutive fiscal month period then ending. For purposes of
calculating the Fixed Charge Coverage Ratio for any applicable period during which any Permitted
Acquisition of a Borrower (or of a Person that becomes a Borrower) or any Asset Disposition is
consummated, (i) income statement items and balance sheet items (whether positive or negative)
attributable to the business or Person acquired in such Permitted Acquisition or the asset(s)
subject to such Asset Disposition shall be included or excluded, as applicable, in such
calculations to the extent relating to such applicable period and the Permitted Acquisition or
Asset Disposition shall be deemed to have occurred as of the first day of such applicable period,
(ii) EBITDA may be adjusted to include operating and other expense reductions and other adjustments
for such period resulting from such Permitted Acquisition and (iii) Indebtedness of a business or
Person that is retired in connection with such Permitted Acquisition or Asset Disposition shall be
excluded from such calculations and deemed to have been retired as of the first day of such
applicable period, in each case, to the extent that such adjustments in clauses (i), (ii) and (iii)
of this sentence (A) are identified by the Borrowers and supported by documentation reasonably
acceptable to the Administrative Agent and (b) approved by the Administrative Agent in its sole
discretion. For purposes of this definition, “Asset Disposition” means the disposition of any or
all of the assets of any Borrower, whether by sale, lease, transfer or otherwise.



     “Fixed Charges” means, for any applicable period of computation, without duplication,
the sum of (a) all Interest Expense paid in cash by the Borrowers for such period plus (b)
Scheduled Indebtedness Payments made by the Borrowers during such period plus (c) Cash
Dividends paid in cash by the Borrowers for such period.



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



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



     “GAAP” means generally accepted accounting principles in the United States of America
as in effect from time to time as set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board, which, in each case, are applicable to
the circumstances as of the date of determination consistently applied.



     “Government Accounts” means Accounts owing directly by any U.S. Governmental Authority
to a Borrower under a prime contract entered into between such U.S. Governmental Authority and such
Borrower.



     “Government Contract” means any written agreement, commitment, contract, instrument
or other binding arrangement between the Company or any Subsidiary thereof and any U.S.
Governmental Authority.



     “Governmental Authority” means any nation or government, any state, province, or
other political subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.



16









 





     “Guarantors” means, collectively, Holdings, the Subsidiary Guarantors and any other
Person that at any time after the Closing Date becomes a party hereto pursuant to a joinder
agreement in substantially the form of Exhibit E pursuant to which such Person shall become
a party to the Guaranty as a joint and several “Guarantor”.



     “Guaranty” means the guaranty made by the Guarantors of the Obligations under
Article 13 in favor of the Administrative Agent, for the benefit of the Secured Parties.



     “Hazardous Materials” means any hazardous, toxic or dangerous substances, materials
and wastes, including hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials,
biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or
type of pollutants or contaminants (including materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances, materials, or wastes
and including any other substances, materials or wastes that are or become regulated under any
Environmental Law (including any that are or become classified as hazardous or toxic under any
Environmental Law).



     “Hedge Agreement” means a “swap agreement” as that term is defined in Section
101(53B)(A) of the Bankruptcy Code.



     “Holdings” has the meaning given to such term in the preamble.



     “Increase Effective Date” has the meaning given to such term in Section 2.7.



     “Indebtedness” means, with respect to any Person, any liability, whether or not
contingent, (a) in respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof) or evidenced by bonds, notes,
debentures or similar instruments, (b) representing the balance deferred and unpaid of the purchase
price of any property or services (other than an account payable to a trade creditor (whether or
not an Affiliate) incurred in the ordinary course of business of such Person and payable in
accordance with customary trade practices), (c) all obligations as lessee under leases which have
been, or should be, in accordance with GAAP recorded as Capital Leases, (d) any contractual
obligation, contingent or otherwise, of such Person to pay or be liable for the payment of any
indebtedness described in this definition of another Person, including, without limitation, any
such indebtedness, directly or indirectly guaranteed, or any agreement to purchase, repurchase, or
otherwise acquire such indebtedness, obligation or liability or any security therefor, or to
provide funds for the payment or discharge thereof, or to maintain solvency, assets, level of
income, or other financial condition, (e) all obligations of any such Person in respect of
Disqualified Capital Stock, (f) all reimbursement obligations and other liabilities of such Person
with respect to surety bonds (whether bid, performance or otherwise), letters of credit, bankers’
acceptances, drafts or similar documents or instruments issued for such Person’s account, (g) all
indebtedness of such Person in respect of indebtedness of another Person for borrowed money or
indebtedness of another Person otherwise described in this definition which is secured by any
consensual lien, security interest, collateral assignment, conditional sale, mortgage, deed of
trust, or other encumbrance on any asset of such Person, whether or not such obligations,
liabilities or indebtedness is assumed by or is a personal liability of such Person, all as of such
time, (h) all net obligations, liabilities and indebtedness of such Person (marked to market)
arising under Hedge Agreements, (i) all obligations owed by such Person under License Agreements
with respect to non-refundable, advance or minimum guarantee royalty payments; (j) indebtedness of
any partnership or joint venture in which such Person is a general partner or a joint venturer to
the extent such Person is liable therefor as a result of such Person’s ownership interest in such
entity, except to the extent that the terms of such indebtedness expressly provide that such Person
is not liable therefor or such Person has no liability therefor as a matter of law, (k) the
principal and interest



17









 




portions of all rental obligations of such Person under any synthetic lease or similar off-balance
sheet financing where such transaction is considered to be borrowed money for tax purposes but is
classified as an operating lease in accordance with GAAP, (l) all obligations of such Person under
conditional sale or other title retention agreements relating to property purchased by such Person
(other than customary reservations or retentions of title under agreements with suppliers entered
into in the ordinary course of business), and (m) all obligations of such person under take or pay
or similar arrangements.




     “Indemnitee” has the meaning given to such term in Section 14.4.



     “Information Certificate” means a certificate of the Loan Parties substantially in
the form of Exhibit D hereto.



     “Instrument of Assignment” means each instrument of assignment executed by a Loan
Party with respect to any Material Government Contract to which such Loan Party is a party,
substantially in the form of Exhibit J hereto.



     “Intellectual Property” means all of the following in any jurisdiction throughout the
world: (a) patents, patent applications and inventions, including all renewals, extensions,
combinations, divisions, or reissues thereof, (“Patents”); (b) trademarks, service marks,
trade names, trade dress, logos, Internet domain names and other business identifiers, together
with the goodwill symbolized by any of the foregoing, and all applications, registrations,
renewals and extensions thereof, (“Trademarks”); (c) copyrights and all works of
authorship including all registrations, applications, renewals, extensions and reversions thereof
(“Copyrights”); (d) all computer software, source code, executable code, data, databases
and documentation thereof; (e) all trade secret rights in information, including trade secret
rights in any formula, pattern, compilation, program, device, method, technique, or process, that
(1) derives independent economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use, and (2) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy; (f) all other intellectual property or proprietary rights
in any discoveries, concepts, ideas, research and development, know-how, formulae, patterns,
inventions, compilations, compositions, manufacturing and production processes and techniques,
program, device, method, technique, technical data, procedures, designs, recordings, graphs,
drawings, reports, analyses, specifications, databases, and other proprietary or confidential
information, including customer lists, supplier lists, pricing and cost information, business and
marketing plans and proposals and advertising and promotional materials; and (g) all rights to sue
at law or in equity for any infringement or other impairment or violation thereof and all products
and proceeds of the foregoing.



     “Intellectual Property Agreements” means all licenses or other written agreements
under which any Loan Party’s right to use any Intellectual Property arose or pursuant to which such
Loan Party licenses or otherwise distributes any Intellectual Property to any third party.



     “Interest Expense” means, for any applicable period of computation, all interest
expense of the Borrowers for such period, determined on a combined basis in accordance with GAAP.



     “Interest Period” means for any Eurodollar Rate Loan, a period of approximately one
(1), two (2) or three (3) months duration as the Administrative Borrower on behalf of any Borrower
may elect; provided that:



          (a) the Administrative Borrower on behalf of such Borrower may not elect an Interest
Period that will extend beyond the Maturity Date;




18









 





          (b) no such Interest Period shall be less than thirty (30) days;




          (c) the Interest Period shall commence on the date the Revolving Loan is made or continued as,
or converted into, a Eurodollar Rate Loan, and shall expire on the numerically corresponding day in
the calendar month at its end;




          (d) any Interest Period that would otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding Business Day; and




          (e) any Interest Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar month at the end of such
Interest Period.




     “Inventory” means, as to each Loan Party, all present and future inventory, as defined
in the UCC, of such Loan Party.



     “Investment” means, with respect to a Person, any investment in any other Person,
whether by means of (a) purchase or acquisition of obligations or securities of such other Person,
(b) capital contribution to such other Person, (c) loan or advance to such other Person, (d) making
of a time deposit with such other Person, (e) guarantee or assumption of, or providing any
collateral or letter of credit for, any obligation of such other Person, (f) Acquisition or (g)
otherwise.



     “Investment Property Control Agreement” means an agreement in writing, in form and
substance reasonably satisfactory to the Administrative Agent, by and among the Administrative
Agent, any Loan Party (as the case may be) and any securities intermediary that maintains a
securities account of such Loan Party, acknowledging that such securities intermediary has custody,
control or possession of such securities account on behalf of the Administrative Agent, that it
will comply with entitlement orders originated by the Administrative Agent with respect to such
securities account, and has such other terms and conditions as the Administrative Agent may
require.



     “Issuing Lender” means with respect to any Letter of Credit, Wachovia in its capacity
as issuer of such Letters of Credit hereunder, or any successor issuer of such Letters of Credit
hereunder.



     “Leases” has the meaning given to such term in Section 8.16.



     “Lender” means each financial institution signatory hereto as a Lender and each other
Person made a party to this Agreement as a Lender in accordance with Section 14.11.



     “Lending Party” means the Administrative Agent or any Lender.



     “Letter of Credit Documents” means, with respect to any Letter of Credit, such Letter
of Credit, any amendments thereto, any documents delivered in connection therewith, any application
therefor, and any agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing for (a) the rights
and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b)
any collateral security for any obligations related to such Letter of Credit.



     “Letter of Credit Limit” means $10,000,000.



19









 





     “Letter of Credit Obligations” means, at any time, the sum of (a) the aggregate
undrawn amount of all Letters of Credit outstanding at such time, plus (b) the aggregate
amount of all drawings under Letters of Credit for which the Issuing Lender has not at such time
been reimbursed, plus (c) without duplication, the aggregate amount of all payments made
by each Lender to the Issuing Lender with respect to such Lender’s participation in Letters of
Credit as provided in Section 2.3 for which Borrowers have not at such time reimbursed the
Lenders, whether by way of a Loan or otherwise.



     “Letters of Credit” means all letters of credit (whether documentary or stand-by and
whether for the purchase of inventory, equipment or otherwise) issued by the Issuing Lender for
the account of any Borrower pursuant to this Agreement, and all amendments, renewals, extensions
or replacements thereof.



     “LIBOR Rate” means, for any Eurodollar Rate Loan for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period; provided that
if more than one rate is specified on Reuters Screen LIBOR01 Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
If, for any reason, such rate is not available, then “LIBOR Rate” means the rate per annum
at which, as determined by the Administrative Agent, Dollars in an amount comparable to the Loans
then requested are being offered to leading banks at approximately 11:00 a.m. (London time), two
(2) Business Days prior to the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank market for a period equal to
the Interest Period selected.



     “License Agreements” has the meaning set forth in Section 8.11.



     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the foregoing).



     “Loan Documents” means, collectively, this Agreement, the Notes, the Letter of Credit
Documents, the Pledge Agreement, all Deposit Account Control Agreements, all Investment Property
Control Agreements and all other agreements, documents and instruments now or at any time
hereafter executed and/or delivered by any Loan Party in connection with this Agreement;
provided that in no event shall the term “Loan Documents” be deemed to include any Hedge
Agreement or other Bank Product Agreement.



     “Loan Parties” means, collectively, Borrowers and the Guarantors.



     “Loans” means, collectively, the Revolving Loans and Swingline Loans.



     “MAR-VEL Bank Account” means that certain deposit account of MAR-VEL International,
Inc. with PNC Bank, National Association in existence on the Closing Date.



     “Material Adverse Effect” means a material adverse effect on (a) the business,
properties, operations, condition (financial or otherwise) or prospects of the Company and its
Subsidiaries, taken as a whole; (b) the legality, validity or enforceability of this Agreement or
any other Loan Document; (c) the legality, validity, enforceability, perfection or priority of the
security interests and liens of the Administrative Agent upon the Collateral; (d) the Collateral or
its value; (e) the ability of any Loan Party



20









 




to repay the Obligations or of any Borrower to perform its obligations under this Agreement or any
other Loan Document as and when to be performed; or (f) the ability of the Administrative Agent or
any Lender to enforce the Obligations or realize upon the Collateral or otherwise with respect to
the rights and remedies of the Administrative Agent and the Lenders under this Agreement or any
other Loan Document.




     “Material Contract” means (a) any contract or other agreement, written or oral, of the
Company or any of its Subsidiaries involving monetary liability of or to any such Person in an
amount in excess of $1,000,000 per annum, or (b) any other contract or agreement, written or oral,
of the Company or any of its Subsidiaries the breach, nonperformance, cancellation or failure to
renew of which by any party thereto could reasonably be expected to have a Material Adverse Effect,
in each case, other than Material Government Contracts.



     “Material Event of Default” means an Event of Default described in Section
11.1(a), (b)(i), (e), (f), (g), (h), (k),
(l) or (m).



     “Material Government Contract” means any Government Contract, and where applicable,
individual delivery and individual task orders under any Government Contract, (i) listed on
Schedule 8.15 or (ii) (A) involving, or which may involve, monetary liability under open
orders or accounts receivable thereunder in an amount in excess of $2,000,000 over the remaining
term of such contract and (B) that has a remaining term of greater than six (6) months.



     “Material Release or Non-Compliance” means (a) the occurrence of any event involving
the release, spill or discharge of any Hazardous Material or (b) any investigation, proceeding,
complaint, order, directive, claim, citation or notice with respect to any non-compliance with or
violation of any Environmental Law by any Loan Party or the release, spill or discharge of any
Hazardous Material if, in the case of each of the foregoing clauses (a) or (b), the release, spill
or discharge, or the alleged or actual non-compliance or violation of Environmental Law by any
Loan Party could reasonably be expected to have a Material Adverse Effect.



     “Maturity Date” means the earlier to occur of (a) February 18, 2013, (b) the date of
termination of the entire Aggregate Commitment by the Administrative Borrower pursuant to
Section 2.6 or (c) the date on which the Obligations have been accelerated pursuant to
Section 11.2(b) and in connection therewith, the Obligations have become immediately due
and payable and the Aggregate Commitment has been terminated.



     “Maximum Interest Rate” means the maximum non-usurious rate of interest under
applicable Federal or State law as in effect from time to time that may be contracted for, taken,
reserved, charged or received in respect of the indebtedness of a Borrower to the Administrative
Agent or a Lender, or to the extent that at any time such applicable law may thereafter permit a
higher maximum non-usurious rate of interest, then such higher rate.



     “Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns.



     “Multiemployer Plan” means a “multi-employer plan” as defined in Section 4001(a)(3)
of ERISA which is or was at any time during the current year or the immediately preceding six (6)
years contributed to by any Loan Party or any ERISA Affiliate or with respect to which any Loan
Party or any ERISA Affiliate may incur any liability.



     “Net Income” means, for any applicable period of computation, the net income (or net
deficit) of the Borrowers for such period determined on a combined basis in accordance with GAAP;
provided that



21









 




there shall be excluded from Net Income the net income (or net deficit) of any Person accrued prior
to the date it becomes a Borrower or is merged into or consolidated with a Borrower or that
Person’s assets are acquired by a Borrower.




     “Net Recovery Percentage” means the fraction, expressed as a percentage, (a) the
numerator of which is the amount equal to the amount of the recovery in respect of the Inventory at
such time on a “net orderly liquidation value” basis as set forth in the most recent acceptable
appraisal of Inventory received by the Administrative Agent in accordance with Section 7.3,
net of all associated costs and expenses of such liquidation, and (b) the denominator of which is
the applicable original cost of the aggregate amount of the Inventory subject to such appraisal.



     “Non-Consenting Lender” has the meaning given to such term in Section
14.2(c).



     “Note” means any promissory note substantially in the form of Exhibit I hereto
made by the Borrowers in favor of a Lender evidencing such Lender’s Commitment, and any amendments,
supplements and modifications thereto and replacements or renewals thereof.



     “Notice of Borrowing” has the meaning given to such term in Section 2.4(a).



     “Notice of Conversion or Continuation” has the meaning given to such term in
Section 3.1(b)(ii).



     “Notice of Default or Failure of Condition” has the meaning given to such term in
Section 12.3(a).



     “Notice of Prepayment” has the meaning given to such term in Section 2.5(b).



     “Noticed Bank Product” means any Bank Product provided by the Administrative Agent or
any of its Affiliates and any other Bank Product for which the applicable Bank Product Provider (a)
has disclosed to the Administrative Agent prior to the Closing Date (which disclosure shall comply
with the information provisions set forth in the definition of “Bank Products”) or (b)
shall have complied with the notice and other information provisions set forth in the definition of
“Bank Products”.



     “Notices of Assignment” means each notice of assignment executed by any Loan Party
with respect to any Material Government Contract to which such Loan Party is a party, substantially
in the form of Exhibit K hereto.



     “Obligations” means (a) any and all Loans, Letter of Credit Obligations, Special Agent
Advances and all other obligations, liabilities and indebtedness of every kind, nature and
description owing by any or all of the Loan Parties to the Administrative Agent or any Lender
and/or any of their Affiliates or the Issuing Lender, including principal, interest, charges, fees,
costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or
otherwise, arising under this Agreement or any other Loan Document or on account of any Letter of
Credit and all other Letter of Credit Obligations, whether now existing or hereafter arising,
whether arising before, during or after the initial or any renewal term of this Agreement or after
the commencement of any case or proceeding with respect to any such Loan Party under the United
States Bankruptcy Code or any similar statute (including, to the extent permitted under applicable
law, the payment of interest and other amounts which would accrue and become due but for the
commencement of such case, whether or not such amounts are allowed or allowable in whole or in part
in such case), whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, or secured or unsecured and (b) subject to
the priority in right of payment set forth in Section 11.3, all obligations, liabilities
and indebtedness of every kind, nature and description owing by any or all of the Loan Parties to
any Bank Product Provider arising under



22









 




or pursuant to any Bank Products, whether now existing or hereafter arising (collectively, the
“Bank Product Obligations”).




     “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.



     “Other Taxes” has the meaning given to such term in Section 4.5(c).



     “Overadvance” has the meaning given to such term in Section 2.8(a).



     “Participant” has the meaning given to such term in Section 14.11(d).



     “Patriot Act” has the meaning given to such term in Section 14.14.



     “Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA) subject to
Title IV of ERISA which any Loan Party sponsors, maintains, or to which any Loan Party or ERISA
Affiliate makes, is making, or is obligated to make contributions, other than a Multiemployer
Plan.



     “Permits” has the meaning given to such term in Section 8.7.



     “Permitted Acquisition” means any Acquisition by any Borrower where:



          (a) the business, assets or division acquired are for use, or the Person acquired is engaged,
in a Permitted Line of Business;




          (b) if the Acquisition involves a merger or other combination, such Borrower is the surviving
entity or the continuing or surviving entity shall become a Borrower if and when required to do so
under Section 9.9;




          (c) immediately before and after giving effect to such Acquisition, no Default or Event of
Default shall exist;




          (d) the Permitted Acquisition Consideration to be paid by the Borrowers in connection with (i)
such Acquisition and all other Acquisitions during the twelve month period in which such
Acquisition occurs is less than $10,000,000 in the aggregate and (ii) such Acquisition and all
other Acquisitions during the term of this Agreement is less than $25,000,000 in the aggregate;




          (e) immediately after giving effect to such Acquisition, the Borrowers are in pro forma
compliance with Section 9.14;




          (f) immediately after giving effect to such Acquisition, Pro Forma Excess Availability, as
determined by the Administrative Agent, shall not be less than the Threshold Amount;




          (g) such Acquisition shall be non-hostile and shall have been approved, as necessary, by the
target’s board of directors, shareholders or other requisite Persons;




          (h) reasonably prior to such Acquisition, the Administrative Agent shall have received
complete executed or conformed copies of each material document, instrument and agreement to be
executed in connection with such Acquisition together with all Lien search reports and Lien release
letters and other documents as the Administrative Agent may reasonably require to evidence the
termination of Liens on the assets or business to be acquired, other than Liens permitted by
Section 10.2;




23









 





          (i) not less than ten (10) Business Days prior to such Acquisition, the
Administrative
Agent shall have received an acquisition summary with respect to the Person, assets and/or business
or division to be acquired, such summary to include a reasonably detailed description thereof
(including financial information) and operating results (including financial statements for the
most recent twelve month period for which they are available and as otherwise available), the terms
and conditions, including economic terms, of the proposed Acquisition, and the Company’s
calculation of (A) pro forma compliance with Section 9.14 and (B) pro forma EBITDA relating
thereto, in each case, calculated in a manner reasonably satisfactory to the Administrative Agent;




          (j) any acquired Person has executed and delivered to the Administrative Agent this
Agreement and to the extent applicable, the Guaranty, and the other provisions of Section
9.9 have been satisfied; and




          (k) a certificate, in form, scope and substance acceptable to the Administrative Agent of a
senior officer of the Company confirming satisfaction of each of the foregoing conditions
precedent shall have been delivered to the Administrative Agent prior to such Acquisition.



For purposes of this definition and notwithstanding anything contained in this Agreement to the
contrary, “Pro Forma Excess Availability” means
Excess Availability calculated on a pro forma basis to include (i) any Eligible Accounts and Eligible Inventory to be acquired in
connection with such Acquisition (determined pursuant to field exams, appraisals or other
methodologies reasonably acceptable to the Administrative Agent), (ii) the borrowing of any Loans
used to finance such Acquisition, as applicable, and (iii) prepayments of the Loans occurring on
the date of such Acquisition made from the proceeds from the incurrence of Indebtedness or the
issuance of Capital Stock of the Company (or a combination thereof) in excess of the Permitted
Acquisition Consideration for such Acquisition.




     “Permitted Acquisition Consideration” means the aggregate amount of the purchase
price, including, but not limited to, any Indebtedness incurred or assumed in connection therewith,
earnouts (valued at the maximum amounts reasonably expected to be payable thereunder as determined
in good faith by the Company’s board of directors), deferred payments, or Capital Stock of the
Company, net of the applicable acquired company’s cash and Cash Equivalents (as shown on its most
recent financial statements delivered in connection with the applicable Permitted Acquisition) to
be paid in connection with any applicable Permitted Acquisition as set forth in the applicable
documentation for such Permitted Acquisition.



     “Permitted Holder” shall mean (a) Luke M. Hillier, (b) Robert Scott LaRose, (c) Daniel
J. Clarkson and (d) any trust, partnership, corporation, limited liability company or other lawful
entity controlled by any or all of the foregoing. The term “control” for purposes of this
definition shall have the meaning set forth in the definition of “Affiliate”.



     “Permitted Line of Business” shall mean businesses in substantially the same fields as
the businesses conducted by the Loan Parties and their Subsidiaries on the Closing Date and
business activities reasonably related, ancillary or complementary thereto.



     “Permitted Refinancing Indebtedness” means, in respect of any Indebtedness (the
“Original Indebtedness”), any Indebtedness that refinances, refunds, renews, replaces, defeases or
extends such Original Indebtedness (or any Permitted Refinancing Indebtedness in respect thereof);
provided that (a) the principal amount of the Permitted Refinancing Indebtedness shall not exceed
the principal amount of the Original Indebtedness except by an amount equal to any premium or other
similar amount reasonably determined by the Company to be required to be paid in connection
therewith, accrued and unpaid interest thereon, and fees and expenses reasonably incurred, in
connection with such refinancing and by an amount equal to any existing commitments unutilized
thereunder, (b) the final maturity date and weighted




24











 




average life of such Permitted Refinancing Indebtedness shall not be prior to or shorter than
that applicable to the Original Indebtedness, (c) such Permitted Refinancing Indebtedness shall not
be required to be repaid, prepaid, redeemed, repurchased or defeased, whether on one or more fixed
dates, upon the occurrence of one or more events or at the option of any holder thereof (except, in
each case, (i) upon the occurrence of an event of default or a change in control, (ii) upon the
sale or other disposition of any assets securing such Permitted Refinancing Indebtedness, or (iii)
as and to the extent such repayment, prepayment, redemption, repurchase or defeasance would have
been required pursuant to the terms of such Original Indebtedness) prior to the earlier of (A) the
maturity date of such Original Indebtedness and (B) the date that is six months after the Maturity
Date; (d) such Permitted Refinancing Indebtedness shall not constitute an obligation of any
Subsidiary that shall not have been (or, in the case of after-acquired Subsidiaries, shall not have
been required to become) an obligor in respect of such Original Indebtedness, and shall not
constitute an obligation of the Company if the Company shall not have been an obligor in respect of
such Original Indebtedness and, in each case, shall constitute an obligation of such Subsidiary or
of the Company only to the extent of their obligations in respect of such Original Indebtedness;
(e) any Permitted Refinancing Indebtedness of any Subordinated Indebtedness shall be on
subordination terms substantially the same as those applicable to the Original Indebtedness or more
favorable to the Lenders and (f) such Permitted Refinancing Indebtedness shall not be secured by
any Lien on any asset other than the assets that secured such Original Indebtedness (or would have
been required to secure such Original Indebtedness pursuant to the terms thereof) or by any Lien
having a higher priority in respect of the Obligations than the Lien that secured such Original
Indebtedness.




     “Permitted Tax Distributions” has the meaning given to such term in Section
10.6(d).



     “Person” or “person” means any individual, sole proprietorship, partnership,
corporation (including any corporation which elects subchapter S status under the Code), limited
liability company, limited liability partnership, business trust, unincorporated association,
joint stock corporation, trust, joint venture or other entity or any government or any agency or
instrumentality or political subdivision thereof.



     “Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) which any
Loan Party sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multiemployer Plan has made contributions at any time during
the immediately preceding six (6) plan years or with respect to which any Loan Party may incur
liability.



     “Pledge Agreement” means that certain Pledge Agreement dated the date hereof by and
between the Administrative Agent and the Loan Parties thereto, which agreement shall be in form and
substance reasonably satisfactory to the Administrative Agent and the Company, as such agreement
may be amended, amended and restated, supplemented or otherwise modified in accordance with the
terms thereof.



     “Pro Forma Excess Availability” has the meaning given to such term in the definition
of “Permitted Acquisition”.



     “Pro Rata Share” means as to any Lender, the fraction (expressed as a percentage) the
numerator of which is such Lender’s Commitment and the denominator of which is the Aggregate
Commitment, as adjusted from time to time in accordance with the provisions of Section
14.11; provided that if the Aggregate Commitment shall have been terminated, the
numerator shall be the unpaid amount of such Lender’s Loans and its interests in the Letters of
Credit and Swingline Loans and the denominator shall be the aggregate amount of all unpaid Loans
and Letters of Credit.



     “Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital
Stock.



25









 





     “Real Property” means all now owned and hereafter acquired real property of each Loan
Party, including leasehold interests, together with all buildings, structures, and other
improvements located thereon and all rights of any Loan Party in any easements and appurtenances
relating thereto, wherever located.



     “Records” means, as to each Loan Party, all of such Loan Party’s present and future
books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards,
bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files
and other data relating to the Collateral or any account debtor, together with the tapes, disks,
diskettes and other data and software storage media and devices, file cabinets or containers in or
on which the foregoing are stored (including any rights of any Loan Party with respect to the
foregoing maintained with or by any other person).



     “Register” has the meaning given to such term in Section 14.11(c).



     “Related Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.



     “Report” has the meaning given to such term in Section 12.9(a).



     “Required Lenders” means, at any time, those Lenders whose Pro Rata Shares aggregate
in excess of fifty percent (50%) of the Aggregate Commitments, or if the Aggregate Commitment shall
have been terminated, the Lenders to whom in excess of fifty percent (50%) of the Total
Outstandings are owing; provided that the Pro Rata Share of, and the portion of the Total
Outstandings, as applicable, owing or deemed owing to, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.



     “Reserves” means as of any date of determination, such amounts as the Administrative
Agent may from time to time reasonably establish and revise in good faith reducing the amount of
Loans and Letters of Credit that would otherwise be available to any Borrower under the lending
formula(s) provided for herein: (a) to reflect events, conditions, contingencies or risks which, as
determined by the Administrative Agent in good faith, adversely affect, or would have a reasonable
likelihood of adversely affecting, either (i) the Collateral, its value or the amount that might be
received by the Administrative Agent from the sale or other disposition or realization upon such
Collateral, (ii) the assets, business obligations, liabilities or prospects of any Loan Party or
(iii) the security interests and other rights of the Administrative Agent or any Lender in the
Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect the
Administrative Agent’s good faith belief that any collateral report or financial information
furnished by or on behalf of any Loan Party to the Administrative Agent is or may have been
incomplete, inaccurate or misleading in any material respect; or (c) in respect of any state of
facts which the Administrative Agent determines in good faith constitutes a Default or an Event of
Default. Without limiting the generality of the foregoing, Reserves may, at the Administrative
Agent’s option, be established to reflect: (A) dilution with respect to the Accounts (based on the
ratio of the aggregate amount of non-cash reductions in such Accounts for any period to the
aggregate dollar amount of the sales for such period) as calculated by the Administrative Agent for
any period is or is reasonably anticipated to be greater than five percent (5%); (B) returns,
discounts, claims (including, without limitation, warranty claims), credits and allowances of any
nature that are not paid pursuant to the reduction of Accounts; (C) sales, excise or similar taxes
included in the amount of any such Accounts reported to the Administrative Agent; (D) factors that
may negatively impact the Value of Inventory, including, without limitation, change in salability,
obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and
vendor chargebacks; (E) testing variances identified as part of the Administrative Agent’s periodic
field examinations; (F) a reserve of up to three months’ rent and other charges that could be
payable to any owner or lessor of premises where any Collateral is



26









 




located, other than for those locations where the Administrative Agent has received a Collateral
Access Agreement that the Administrative Agent has accepted in writing; (G) amounts due or to
become due to owners and licensors of material Intellectual Property used by any Borrower; (H)
obligations, liabilities or indebtedness (contingent or otherwise) of Loan Parties to the
Administrative Agent or any Bank Product Provider arising under or in connection with any Bank
Products or as such Affiliate or Person may otherwise require in connection therewith to the extent
that such obligations, liabilities or indebtedness constitute Obligations as such term is defined
herein or otherwise receive the benefit of the security interest of the Administrative Agent in any
Collateral; and (I) reserves with respect to the Service Contract Act (41 U.S.C. 351, et seq., as
amended). The amount of any Reserve established by the Administrative Agent shall have a reasonable
relationship to the event, condition or other matter which is the basis for such reserve and shall
be established by the Administrative Agent in good faith and to the extent that such Reserve is in
respect of amounts that may be payable to third parties the Administrative Agent may, at its
option, deduct such Reserve from the Aggregate Commitment, at any time that such limit is less than
the amount of the Borrowing Base. Notwithstanding the foregoing, the Administrative Agent shall
establish Reserves against the mark-to-market exposure under all Noticed Bank Products consisting
of Hedge Agreements.




     “Responsible Officer” means, for any Loan Party, any of the chief executive officer,
chief financial officer, treasurer or controller of such Loan Party.



     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock of the Company or any of its
Subsidiaries, or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Capital Stock or on account of any return of capital to
the Company or such Subsidiary’s stockholders, partners or members (or the equivalent Person
thereof), or payment made to redeem, purchase, repurchase or retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire any Capital Stock of the Company
or any of its Subsidiaries, or any setting apart of funds or property for any of the foregoing.



     “Revolving Loans” means the loans now or hereafter made by or on behalf of any Lender
or by the Administrative Agent for the account of any Lender on a revolving basis (including any
Overadvance) pursuant to the Credit Facility (involving advances,
repayments and re-advances) as
set forth in Section 2.1.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and its successors and assigns.



     “Sale and Lease-Back Transaction” means any arrangement whereby the Company or any of
its Subsidiaries has sold or transferred, or will sell or transfer, property (other than the
Collateral) to any Person and has or will take back a lease of such property from such Person or
its Affiliates pursuant to which the rental payments are calculated to amortize the purchase price
of such property substantially over the useful life of such property, in all cases, so long as
such lease is characterized as an operating lease.



     “Sanctioned Entity” means (a) an agency of the government of, (b) an organization
directly or indirectly controlled by, or (c) a person resident in, a country that is subject to a
sanctions program identified on the list maintained and published by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from
time to time as such program may be applicable to such agency, organization or person.



27









 





     “Sanctioned Person” means a person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published
from time to time.



     “Secured Parties” means, collectively, (a) the Administrative Agent, (b) the Issuing
Lender, (c) the Lenders, and (d) the Bank Product Providers.




	 	 	“Settlement Advance” has the meaning given to such term in Section 3.6(a).





     “Scheduled Indebtedness Payments” means, for any applicable period of computation,
the sum of all scheduled payments of principal on Total Indebtedness for such period (including
the principal component of payments due on Capital Leases or under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet financing product
during such period), determined on a combined basis in accordance with GAAP; it being understood
that Scheduled Indebtedness Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to Section 2.1.



     “Solvent” means, at any time with respect to any Person, that at such time such Person
(a) is able to pay its debts as they mature and has (and has a reasonable basis to believe it will
continue to have) sufficient capital (and not unreasonably small capital) to carry on its business
consistent with its practices as of the Closing Date, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair valuation all rights
of subrogation, contribution or indemnification arising pursuant to any guarantees given by such
Person) are greater than the Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to believe, represents
an amount which can reasonably be expected to become an actual or matured liability (and including
as to contingent liabilities arising pursuant to any guarantee the face amount of such liability as
reduced to reflect the probability of it becoming a matured liability).




	 	 	“Special Agent Advances” has the meaning given to such term in Section
2.8(b).





     “Subordinated Indebtedness” means Indebtedness of the Company and its Subsidiaries
that is subordinate in right of payment to the right of the Administrative Agent and the Lenders to
receive the prior payment in full of all of the Obligations on terms and conditions reasonably
acceptable to the Administrative Agent.



     “Subsidiary” or “subsidiary” means, with respect to any Person, any
corporation, limited liability company, limited liability partnership or other limited or general
partnership, trust, association or other business entity of which an aggregate of at least a
majority of the outstanding Voting Stock of such Person is, at the time, directly or indirectly,
owned by such Person and/or one or more Subsidiaries of such Person. Except as otherwise set forth
in this Agreement, all references to a Subsidiary shall be deemed to be a reference to a Subsidiary
of the Company.



     “Subsidiary Guarantor” has the meaning given to such term in the preamble hereof and
shall include any other Person that at any time after the Closing Date becomes party to a
guarantee in favor of the Administrative Agent, for the benefit of the Secured Parties, with
respect to the Obligations or who is the owner of any property that is security for the
Obligations.



     “Subsidiary Loan Parties” means, collectively, the Borrowers (other than the Company)
and the Subsidiary Guarantors and “Subsidiary Loan Party” means any such Person.



     “Swingline Lender” means Wachovia, in its capacity as swingline lender hereunder, and
its successors and assigns.



28









 






	 	 	“Swingline Limit” means $10,000,000.






	 	 	“Swingline Loans” has the meaning given to such term in Section 2.2(a).






	 	 	“Taxes” has the meaning given to such term in Section 4.5(a).





     “Threshold Amount” means $24,000,000 plus proportionate increases thereto to
reflect any Facility Increases.



     “Total Indebtedness” means, as of any date of determination, all Indebtedness of the
Borrowers, determined on a combined basis in accordance with GAAP.



     “Total Outstandings” means, as of any date of calculation, the aggregate principal
amount of all Loans, Special Agent Advances and Letter of Credit Obligations outstanding as of
such date.




	 	 	“Trademark” has the meaning given to such term in the definition of “Intellectual
Property”.





     “Transaction Costs” means all arrangement, underwriting, upfront and similar fees and
out-of-pocket expenses paid by the Borrowers in connection with the Credit Facility (including,
without limitation, any legal fees and expenses and due diligence fees and expenses), such fees
approved by the Administrative Agent.



     “Transactions” means, collectively, (a) the repayment in full of all Indebtedness
under the Existing Facility, (b) the initial Loans and Letters of Credit issued on the Closing
Date and (c) the payment of the Transaction Costs in connection with items (a) and (b) above.



     “UCC” means the Uniform Commercial Code as in effect in the State of New York, and
any successor statute, as in effect from time to time.



     “Unfinanced Capital Expenditures” means, for any applicable period of computation,
Capital Expenditures made by the Borrowers during such period (other than Capital Expenditures
related to the relocation of the Company’s headquarters), which Capital Expenditures are not
financed from the proceeds of any Indebtedness (other than the Loans) or any issuance of Capital
Stock by any Borrower to fund such Capital Expenditure.



     “U.S. Governmental Authority” means the federal government of the United States of
America or any agency or instrumentality thereof or any state of the United States of America
approved by the Administrative Agent or any agency or instrumentality thereof.



     “Value” means, as determined by the Administrative Agent in good faith, with respect
to Inventory, the lower of (a) cost computed on a first-in first-out basis in accordance with GAAP
or (b) market value, provided that for purposes of the calculation of the Borrowing Base,
(i) the Value of the Inventory shall not include: (A) the portion of the value of Inventory equal
to the profit earned by any Affiliate on the sale thereof to any Borrower or (B) write-ups or
write-downs in value with respect to currency exchange rates and (ii) notwithstanding anything to
the contrary contained herein, the cost of the Inventory shall be computed in the same manner and
consistent with the most recent appraisal of the Inventory received and accepted by the
Administrative Agent prior to the Closing Date, if any.



     “Voting Stock” means with respect to any Person, (a) one (1) or more classes of
Capital Stock of such Person having general voting powers to elect at least a majority of the
board of directors, managers or trustees of such Person, irrespective of whether at the time
Capital Stock of any other class or classes



29









 




have or might have voting power by reason of the happening of any contingency, and (b) any Capital
Stock of such Person convertible or exchangeable without restriction at the option of the holder
thereof into Capital Stock of such Person described in clause (a) of this definition.




     “Wachovia” means Wachovia Bank, National Association, in its individual capacity, and
its successors and assigns.



     Section 1.2 Interpretative Provisions.



          (a) All terms used herein that are defined in Article 1, Article 8 or Article 9 of the UCC
shall have the meanings given therein unless otherwise defined in this Agreement.



          (b) All references to the plural herein shall also mean the singular and to the singular
shall also mean the plural unless the context otherwise requires.



          (c) All references to any Loan Party, the Administrative Agent and the Lenders pursuant to
the definitions set forth in the recitals hereto, or to any other person herein, shall include
their respective successors and assigns.



          (d) The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.



          (e) The word “including” when used in this Agreement shall mean “including, without
limitation” and the word “will” when used in this Agreement shall be construed to have the same
meaning and effect as the word “shall”.



          (f) An Event of Default shall exist or continue or be continuing until such Event of Default
is waived in accordance with Section 14.2.



          (g) All references to the term “good faith” used herein when applicable to the Administrative
Agent or any Lender shall mean, notwithstanding anything to the contrary contained herein or in the
UCC, honesty in fact in the conduct or transaction concerned. The Loan Parties shall have the
burden of proving any lack of good faith on the part of the Administrative Agent or any Lender
alleged by any Loan Party at any time.



          (h) Any accounting term used in this Agreement shall have, unless otherwise specifically
provided herein, the meaning customarily given in accordance with GAAP, and all financial
computations hereunder shall be computed unless otherwise specifically provided herein, on a
combined basis in accordance with GAAP as consistently applied and using the same method for
inventory valuation as used in the preparation of the financial statements of the Borrowers most
recently received by the Administrative Agent prior to the Closing Date. Notwithstanding anything
to the contrary contained in GAAP or any interpretations or other pronouncements by the Financial
Accounting Standards Board or otherwise, the term “unqualified opinion” as used herein to refer to
opinions or reports provided by accountants shall mean an opinion or report that is unqualified
and also does not include any explanation, supplemental comment or other comment concerning the
ability of the applicable person to continue as a going concern or the scope of the audit,
except as otherwise specifically prescribed herein. If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in any Loan Document,
and either Administrative Borrower or the Required Lenders shall so request, the Administrative
Agent, the Lenders, the Issuing Lender and Administrative Borrower shall negotiate in



30









 







good faith to amend such ratio or requirement to preserve the original intent thereof in light of
such change in GAAP (subject to the approval of the Required Lenders); provided that until
so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) Administrative Borrower shall provide to the Administrative
Agent and the Lenders financial statements and other documents required under this Agreement (at
the same time as the delivery of any annual, quarterly or monthly financial statements given in
accordance with the provisions of Section 9.6) or as reasonably requested hereunder setting
forth a reconciliation between calculations of such ratio or requirement made before and after
giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all
terms of an accounting or financial nature used herein shall be construed, and all computations of
amounts and ratios referred to herein shall be made, without giving effect to any election under
Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having
a similar result or effect) to value any Indebtedness or other liabilities of any Borrower or any
Subsidiary thereof at “fair value”, as defined therein.



          (i) All time references in this Agreement and the other Loan Documents shall be to
Eastern Daylight or Eastern Standard Time, as then in effect, from time to time unless otherwise
indicated. In the computation 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” each mean “to but excluding”
and the word “through” means “to and including”.



          (j) Unless otherwise expressly provided herein, (i) references herein to
any
agreement, document or instrument shall be deemed to include all subsequent amendments,
modifications, supplements, extensions, renewals, restatements or replacements with respect
thereto, but only to the extent the same are not prohibited by the terms hereof or of any other
Loan Document, and (ii) references to any statute or regulation are to be construed as including
all statutory and regulatory provisions consolidating, amending, replacing, recodifying,
supplementing or interpreting the statute or regulation.



          (k) The captions and headings of this Agreement are for convenience of reference only and
shall not affect the interpretation of this Agreement.



          (l) This Agreement and other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in accordance with their terms.



          (m) This Agreement and the other Loan Documents are the result of negotiations among and have
been reviewed by counsel to the Administrative Agent and the other parties, and are the products
of all parties. Accordingly, this Agreement and the other Loan Documents shall not be construed
against the Administrative Agent or the Lenders merely because of the Administrative Agent’s or
any Lender’s involvement in their preparation.



ARTICLE 2

CREDIT FACILITIES




     Section 2.1 Revolving Loans. Subject to and upon the terms and conditions contained
herein, each Lender severally (and not jointly) agrees to make its Pro Rata Share of Revolving
Loans in Dollars to the Borrowers from time to time from the Closing Date to the Maturity Date in
amounts requested (or deemed to be requested) by the Administrative Borrower on behalf of the
Borrowers; provided that, subject to the terms of Section 2.8, after giving effect to any
Revolving Loan (a) the Total Outstandings shall not at any time exceed the lesser of (i) the
Borrowing Base and (ii) the Aggregate Commitment and (b) the aggregate outstanding principal amount
of all Revolving Loans of each Lender,



31









 




together with such Lender’s Pro Rata Share of the aggregate outstanding principal amount of all
Swingline Loans and Letter of Credit Obligations, shall not exceed such Lender’s Commitment.
Subject to the terms and conditions hereof, the Borrowers may borrow, repay and reborrow Revolving
Loans until the Maturity Date.




     Section 2.2 Swingline Loans.



          (a) Availability. Subject to and upon the terms and conditions of this Agreement
(including, without limitation, Section 12.3(a)), the Swingline Lender may, but shall not
be obligated to, make loans to each Borrower in Dollars (each such loan, a “Swingline
Loan”) from time to time from the Closing Date to the Maturity Date in amounts requested by the
Administrative Borrower on behalf of such Borrower up to the aggregate principal amount not to
exceed at any time outstanding the amount of the Swingline Limit; provided that, subject to
the terms of Section 2.8, after giving effect to any Swingline Loan, such Swingline Loan
shall not cause the Total Outstandings to exceed the lesser of (i) the Borrowing Base and (ii) the
Aggregate Commitment. Subject to the terms and conditions hereof, the Borrowers may borrow, repay
and reborrow the applicable Swingline Loans hereunder. Each such Swingline Loan shall be requested
by the Administrative Borrower pursuant to Section 2.4(a) and shall be made available by
the Swingline Lender to the relevant Borrower in accordance with Section 2.4(b).



          (b) Refunding.




          (i) Swingline Loans shall be refunded by Lenders in accordance with the
settlement procedures set forth in Section 3.6(b).




          (ii) The applicable Borrowers shall pay to the Swingline Lender on demand the amount
of such Swingline Loans to the extent amounts received from Lenders are not sufficient to
repay in full the outstanding Swingline Loans requested or required to be refunded. In
addition, the applicable Borrowers hereby authorize the Administrative Agent to charge any
account maintained by such applicable Borrowers with the Swingline Lender (up to the amount
available therein) in order to immediately pay the Swingline Lender the amount of the
applicable Swingline Loans to the extent amounts received from Lenders are not sufficient
to repay in full the outstanding Swingline Loans requested or required to be refunded. If
any portion of any such amount paid to the Swingline Lender shall be recovered by or on
behalf of the applicable Borrowers from the Swingline Lender in bankruptcy or otherwise,
the loss of the amount so recovered shall be ratably shared among all Lenders in accordance
with their respective Pro Rata Share (unless the amounts so recovered by or on behalf of
such applicable Borrowers pertain to a Swingline Loan extended after the occurrence and
during the continuance of an Event of Default of which the Swingline Lender has received
notice in the manner required pursuant to Section 13.4 and which such Event of
Default has not been waived by the Required Lenders or the Lenders, as applicable).




          (iii) Each Lender acknowledges and agrees that its obligation to refund Swingline Loans
in accordance with the terms of this Section 2.2 and Section 3.6 is absolute
and unconditional and shall not be affected by any circumstance whatsoever, including,
without limitation, non-satisfaction of the conditions set forth in Article 5.
Further, each Lender agrees and acknowledges that if prior to the refunding of any
outstanding Swingline Loans pursuant to this Section 2.2 and Section 3.6,
one of the events described in Section 11.1(f), (g) or (h) shall have
occurred, each Lender will, on the date the applicable Revolving Loan would have been made,
purchase an undivided participating interest in any Swingline Loan to be refunded in an
amount equal to its Pro Rata Share of the aggregate amount of such Swingline Loan. Each
Lender will immediately transfer to the Swingline Lender, in immediately available funds,
the



32









 







amount of its participation and upon receipt thereof the Swingline Lender will deliver to
such Lender a certificate evidencing such participation dated the date of receipt of such
funds and for such amount. Whenever, at any time after the Swingline Lender has received
from any Lender such Lender’s participating interest in a Swingline Loan, the Swingline
Lender receives any payment on account thereof, the Swingline Lender will distribute to
such Lender its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
participating interest was outstanding and funded).



          (c) Defaulting Lender. Notwithstanding anything to the contrary contained in this
Section 2.2, the Swingline Lender shall not be obligated to make any Swingline Loans at a
time when any other Lender is a Defaulting Lender, unless the Swingline Lender has entered into
arrangements reasonably satisfactory to it to eliminate the Swingline Lender’s risk with respect to
any such Defaulting Lender’s funding obligations hereunder, including by cash collateralizing such
Defaulting Lender’s Pro Rata Share of the applicable outstanding Swingline Loans. On demand by the
Swingline Lender or the Administrative Agent from time to time, the Borrowers shall cash
collateralize each Defaulting Lender’s Pro Rata Share of the outstanding Swingline Loans on terms
reasonably satisfactory to the Administrative Agent and the Swingline Lender. Any such cash
collateral shall be deposited in a separate account with the Administrative Agent as collateral for
the payment and performance of each Defaulting Lender’s Pro Rata Share of outstanding Swingline
Loans. The Administrative Agent shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Swingline Lender immediately for each Defaulting Lender’s Pro
Rata Share of any Swingline Loans which have not otherwise been refunded by the Borrowers or such
Defaulting Lender pursuant to the terms of this Section 2.2.



     Section 2.3 Letters of Credit.



          (a) Letters of Credit. Subject to and upon the terms and conditions contained herein
and in the Letter of Credit Documents (including, without limitation, Section 12.3(a)), at
the request of the Administrative Borrower on behalf of a Loan Party or any Subsidiary thereof, the
Administrative Agent agrees to cause the Issuing Lender to issue, and the Issuing Lender agrees to
issue one or more Letters of Credit in Dollars, for the ratable risk of each Lender according to
its Pro Rata Share, containing terms and conditions reasonably acceptable to the Administrative
Agent and the Issuing Lender.



          (b) Requests for Letters of Credit. The Administrative Borrower requesting a Letter of
Credit on behalf of a Borrower shall give the Administrative Agent and the Issuing Lender at least
two (2) Business Days’ prior written notice of the Administrative Borrower’s request for the
issuance of a Letter of Credit on such Borrower’s behalf together with an application, in form and
substance reasonably satisfactory to the Issuing Lender and the Administrative Agent, for the
issuance of the Letter of Credit and such other Letter of Credit Documents as may be reasonably
required by the Administrative Agent or the Issuing Lender. Such notice shall be irrevocable and
shall (i) specify the original face amount of the Letter of Credit requested (which shall be in a
minimum amount of $50,000, unless otherwise agreed to by the Administrative Agent and the Issuing
Lender) or identify the Letter of Credit to be amended, renewed or extended, (ii) the effective
date (which date shall be a Business Day and in no event shall be a date less than ten (10) days
prior to the Maturity Date) of issuance of such requested Letter of Credit (or such amendment,
renewal or extension), (iii) whether such Letter of Credit may be drawn in a single or in partial
draws, (iv) the date on which such requested Letter of Credit is to expire (which date shall be a
Business Day and shall not be more than one year from the date of issuance or occur after the
Maturity Date; provided that (A) a Letter of Credit may be subject to automatic extension
for additional one-year periods pursuant to the terms of the Letter of Credit Documents reasonably
acceptable to the Issuing Lender and (B) such Letter of Credit may have an expiration date after
the Maturity Date if (x) each of the Administrative Agent and the Issuing Lender consent in writing
prior to the issuance thereof, (y) all Letter



33









 







of Credit Obligations associated with any such Letter of Credit are cash collateralized or
otherwise supported in a manner reasonably satisfactory to the Administrative Agent and the Issuing
Lender on or prior to the Maturity Date and (z) except with respect to drawings made under such
Letter of Credit on or prior to the Maturity Date, each Lender, other than the Issuing Lender,
shall be released on the Maturity Date from its obligation to participate in such Letter of
Credit)), (v) the purpose for which such Letter of Credit is to be issued, (vi) the name and
address of the beneficiary of the requested Letter of Credit, (vii) such other information as shall
be necessary to enable the Issuing Lender to prepare, amend, renew or extend such Letter of Credit
and (viii) the proposed terms of the Letter of Credit. In no event shall a Letter of Credit be
issued, amended, renewed or extended unless the forms and terms of the proposed Letter of Credit
(as amended, renewed or extended, as the case may be) are reasonably satisfactory to the
Administrative Agent and Issuing Lender. The renewal or extension of, or increase in the amount of,
any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.



          (c) Conditions Precedent. In addition to being subject to the satisfaction of the
applicable conditions precedent contained in Article 5 and the other terms and conditions
contained herein, no Letter of Credit shall be available unless each of the following conditions
precedent have been satisfied in a manner reasonably satisfactory to the Administrative Agent: (i)
the form and terms of the proposed Letter of Credit shall be reasonably satisfactory to the
Administrative Agent and the Issuing Lender, (ii) as of the date of issuance, no order of any
court, arbitrator or other Governmental Authority shall purport by its terms to enjoin or restrain
money center banks generally from issuing letters of credit of the type and in the amount of the
proposed Letter of Credit, and no law, rule or regulation applicable to money center banks
generally and no request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over money center banks generally shall prohibit, or
request that the Issuing Lender refrain from, the issuance of letters of credit generally or the
issuance of such Letter of Credit, (iii) after giving effect to the issuance of such Letter of
Credit, the Letter of Credit Obligations shall not exceed the Letter of Credit Limit, and (iv)
subject to the terms of Section 2.8, after giving effect to the issuance of such Letter of
Credit, the Total Outstandings at such time shall not exceed the lesser of (A) the Borrowing Base
at such time and (B) the Aggregate Commitment at such time.



          (d) Reimbursement. Each Borrower shall reimburse immediately the Issuing Lender for
any draw under any Letter of Credit issued for the account of such Borrower and pay the Issuing
Lender the amount of all other charges and fees payable to the Issuing Lender in connection with
any Letter of Credit issued for the account of such Borrower immediately when due, irrespective of
any claim, setoff, defense or other right which such Borrower may have at any time against the
Issuing Lender or any other Person. Each drawing under any Letter of Credit or other amount payable
in connection therewith when due, if such drawing is not reimbursed by the Borrowers as provided in
the immediately preceding sentence, shall constitute a request by the Borrower for whose account
such Letter of Credit was issued to the Administrative Agent for a Base Rate Loan in the amount of
such drawing or other amount then due, and shall be made by the Administrative Agent on behalf of
the Lenders as a Revolving Loan (or Special Agent Advance, as the case may be). The date of such
Revolving Loan (or Special Agent Advance, as applicable) shall be the date of the drawing or, as to
other amounts, the due date therefor. Any payments made by or on behalf of the Administrative Agent
or any Lender to the Issuing Lender and/or related parties in connection with any Letter of Credit
shall constitute additional Revolving Loans to such Borrower pursuant to this Section 2 (or
Special Agent Advances as the case may be).



          (e) Assumption of Risk. Each Loan Party assumes all risks with respect to the acts or
omissions of the drawer under or beneficiary of any Letter of Credit. None of the Administrative
Agent or any Lender shall be responsible for paying any foreign, Federal, State or local taxes,
duties or levies relating to any goods subject to any Letter of Credit or any documents, drafts or
acceptances



34









 







thereunder. The provisions of this Section 2.3 shall survive the payment of Obligations
and the termination of this Agreement.



          (f) Inventory. In connection with Inventory purchased pursuant to any Letter of
Credit, Loan Parties shall, at the Administrative Agent’s request, instruct all suppliers,
carriers, forwarders, customs brokers, warehouses or others receiving or holding cash, checks,
Inventory, documents or instruments in which the Administrative Agent holds a security interest
that upon the Administrative Agent’s request, such items are to be delivered to the Administrative
Agent and/or subject to the Administrative Agent’s order, and if they shall come into such Loan
Party’s possession, to deliver them, upon the Administrative Agent’s request, to the Administrative
Agent in their original form. Except as otherwise provided herein, the Administrative Agent shall
not exercise such right to request such items so long as no Default or Event of Default shall exist
or have occurred and be continuing. Except as the Administrative Agent may otherwise specify, Loan
Parties shall designate Issuing Lender as the consignee on all bills of lading and other negotiable
and non-negotiable documents for Inventory purchased pursuant to any Letter of Credit.



          (g) Loan Party as Account Party. Each Loan Party hereby irrevocably authorizes and
directs Issuing Lender to name such Loan Party as the account party therein and to deliver to the
Administrative Agent all instruments, documents and other writings and property received by the
Issuing Lender pursuant to the Letter of Credit and to accept and rely upon the Administrative
Agent’s instructions and agreements with respect to all matters arising in connection with the
Letter of Credit or the Letter of Credit Documents with respect thereto. Nothing contained herein
shall be deemed or construed to grant to any Loan Party any right or authority to pledge the credit
of the Administrative Agent or any Lender in any manner. Loan Parties shall be bound by any
reasonable interpretation made in good faith by the Administrative Agent, or the Issuing Lender
under or in connection with any Letter of Credit or any documents, drafts or acceptances
thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of
any Loan Party.



          (h) Participations. Immediately upon the issuance or amendment of any Letter of
Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased and received,
without recourse or warranty, an undivided interest and participation therein equal to such
Lender’s Pro Rata Share of the liability with respect to such Letter of Credit and the obligations
of the applicable Borrowers with respect thereto (including all Letter of Credit Obligations with
respect thereto). Each Lender shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its Pro Rata Share of all of such obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to
the extent that the Issuing Lender has not been reimbursed or otherwise paid as required hereunder
or under any such Letter of Credit, each such Lender shall pay to the Issuing Lender its Pro Rata
Share of such unreimbursed drawing or other amounts then due to the Issuing Lender in connection
therewith. If such amount is not made available by a Lender when due, the Administrative Agent
shall be entitled to recover such amount on demand from such Lender with interest thereon, for each
day from the date such amount was due until the date such amount is paid to the Administrative
Agent at the interest rate then payable by any Borrower in respect of Loans that are Base Rate
Loans.



          (i) Obligations Absolute. The obligations of the Borrowers to pay the
applicable
Letter of Credit Obligations and the obligations of the Lenders to make payments to the
Administrative Agent for the account of the Issuing Lender with respect to Letters of Credit shall
be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the
terms of this Agreement under any and all circumstances, whatsoever, notwithstanding the occurrence
or continuance of any Default, Event of Default, the failure to satisfy any other condition set
forth in Article 5 or any



35









 







other event or circumstance. Any reimbursement pursuant to Section 2.3(f) shall not
relieve or otherwise impair the obligation of the Borrowers to reimburse the Issuing Lender under
any Letter of Credit or make any other payment in connection therewith.



          (j) Defaulting Lender. Notwithstanding anything to the contrary contained
in this
Section 2.3, no Issuing Lender shall be obligated to issue any Letter of Credit at a time
when any other Lender is a Defaulting Lender, unless such Issuing Lender has entered into
arrangements reasonably satisfactory to it to eliminate such Issuing Lender’s risk with respect to
any such Defaulting Lender’s reimbursement obligations hereunder, including by cash collateralizing
such Defaulting Lender’s Pro Rata Share of the liability with respect to such Letter of Credit. On
demand by the Issuing Lender or the Administrative Agent from time to time, the Borrowers shall
cash collateralize each Defaulting Lender’s Pro Rata Share of the outstanding Letter of Credit
Obligations on terms reasonably satisfactory to the Administrative Agent and the Issuing Lender
which, in any case, is not in excess of an amount equal to one hundred five percent (105%) of such
Defaulting Lender’s Pro Rata Share of the outstanding Letter of Credit Obligations plus
such Defaulting Lender’s Pro Rata Share of the amount of any fees and expenses payable in
connection therewith through the end of the latest expiration date of the Letters of Credit giving
rise to such Letter of Credit Obligations. Any such cash collateral shall be deposited in a
separate account with the Administrative Agent as collateral for the payment and performance of
each Defaulting Lender’s Pro Rata Share of the outstanding Letter of Credit Obligations. The
Administrative Agent shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Moneys in such account shall be applied by the Administrative Agent
to reimburse the Issuing Lender immediately for each Defaulting Lender’s Pro Rata Share of any
drawing under any Letter of Credit which has not otherwise been reimbursed by the Borrowers or such
Defaulting Lender pursuant to the terms of this Section 2.3.



     Section 2.4 Procedure for Advance of Loans.



          (a) Requests for Borrowing.




          (i) Requested Loans. To request a Revolving Loan or a Swingline Loan
on
behalf of a Borrower, the Administrative Borrower shall give the Administrative Agent
irrevocable prior written notice substantially in the form of Exhibit F hereto (a
“Notice of Borrowing”) not later than 11:00 a.m. (i) on the same Business Day as
each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before
each Eurodollar Rate Loan, of its intention to borrow, specifying (A) the date of such
borrowing, which shall be a Business Day, (B) the amount of such borrowing, which shall be,
(x) with respect to Base Rate Loans (other than Swingline Loans) in an aggregate principal
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof, (y) with respect to
Eurodollar Rate Loans in an aggregate principal amount of $2,000,000 or a whole multiple of
$1,000,000 in excess thereof and (z) with respect to Swingline Loans in an aggregate
principal amount of $100,000 or a whole multiple of $100,000 in excess thereof, (C) whether
such Loan is to be a Revolving Loan or Swingline Loan, (D) in the case of a Revolving Loan,
whether the Loans are to be Eurodollar Rate Loans or Base Rate Loans, and (E) in the case of
a Eurodollar Rate Loan, the duration of the Interest Period applicable thereto. A Notice of
Borrowing received after 11:00 a.m. shall be deemed received on the next Business Day. Any
Loan or any portion thereof as to which the Administrative Borrower has not duly specified
an interest rate as provided herein shall be deemed a Base Rate Loan in the case of a
Revolving Loan, and any Eurodollar Rate Loan for which the Administrative Borrower fails to
specify an Interest Period shall be deemed to have an Interest Period of one (1) month. The
Administrative Agent shall promptly notify the Lenders of each Notice of Borrowing.



36









 






          (ii) Revolving Loans Deemed to be Requested.




          (A) Unless payment is timely made by the Company pursuant to Section
3.5(a) or otherwise as set forth in Section 3.5(b), on the date when any
Obligation (whether principal, interest, fees, costs, expenses, other charges,
Letter of Credit Obligations or Obligations in respect of Bank Products) shall
become due, the Administrative Borrower shall be deemed to have requested Revolving
Loans that bear interest based on the Base Rate on such date in the amount of
Obligations then due. The proceeds of such Revolving Loans shall be disbursed as
direct payment of the relevant Obligations. In addition, the Administrative Agent
may, at its option, charge such Obligations against any operating, investment or
other account of the Company maintained with the Administrative Agent or any of its
Affiliates.




          (B) If the Company establishes a controlled disbursement account with the
Administrative Agent or any Affiliate thereof, then the presentation for payment of
any check or other item of payment drawn on such account at a time when there are
insufficient funds to cover such check or other payment shall be deemed to be a
request for Revolving Loans that bear interest based on the Base Rate on such date
of presentation in the amount of the check and items presented for payment. The
proceeds of such Revolving Loans may be disbursed directly to the controlled
disbursement account or to such other appropriate account as determined by the
Administrative Agent in consultation with the Administrative Borrower.



          (b) Disbursement of Revolving Loans and Swingline Loans. Not later than 1:00 p.m. on
the proposed borrowing date, (i) each Lender will make available to the Administrative Agent, for
the account of the applicable Borrower, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, such Lender’s Pro Rata Share of the Revolving
Loans to be made on such borrowing date and (ii) the Swingline Lender will make available to the
Administrative Agent, for the account of the applicable Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent, the Swingline
Loans to be made on such borrowing date. The Borrowers hereby irrevocably authorize the
Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.4 in immediately available funds by crediting or wiring such proceeds to the
deposit account of such Borrower identified in writing to the Administrative Agent or as may be
otherwise agreed upon in writing by the Administrative Borrower and the Administrative Agent from
time to time. Subject to Section 3.6, the Administrative Agent shall not be obligated to
disburse the portion of the proceeds of any Revolving Loan requested (or deemed requested) pursuant
to this Section 2.4 to the extent that any Lender has not made available to the
Administrative Agent its Pro Rata Share of such Revolving Loan. Revolving Loans to be made for the
purpose of refunding Swingline Loans shall be made by the Lenders as provided in Section
2.2(c).



          (c) Authorization to Make Loans. The Administrative Agent and the Lenders are
authorized to make the Loans based upon telephonic or other instructions received from anyone
purporting to be an officer of the Administrative Borrower or any Borrower or other authorized
person or if such Loans are necessary to satisfy any Obligations. All Loans and Letters of Credit
under this Agreement shall be conclusively presumed to have been made to, and at the request of
and for the benefit of, any Borrower when deposited to the credit of any Borrower or otherwise
disbursed or established in accordance with the instructions of the Administrative Borrower or in
accordance with the terms and conditions of this Agreement.



     Section 2.5 Repayments and Prepayments.



37









 





          (a) Repayment on Maturity Date. The Borrowers hereby agree to repay the outstanding
principal amount of (i) all Revolving Loans in full on the Maturity Date, and (ii) all Swingline
Loans in accordance with Section 2.2(c), together, in each case, with all accrued but
unpaid interest thereon.



          (b) Optional Prepayments. The Borrowers may at any time and from time to time prepay
Revolving Loans and Swingline Loans, in whole or in part, with irrevocable prior written notice to
the Administrative Agent substantially in the form of Exhibit G (a “Notice of
Prepayment”) given not later than 11:00 a.m. (i) on the same Business Day as each Base Rate
Loan and each Swingline Loan and (ii) at least three (3) Business Days before each Eurodollar Rate
Loan, specifying the date and amount of prepayment and whether the prepayment is of Eurodollar Rate
Loans, Base Rate Loans, Swingline Loans or a combination thereof, and, if of a combination thereof,
the amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly
notify each Lender. If any such notice is given, the amount specified in such notice shall be due
and payable on the date set forth in such notice. Partial prepayments shall be in an aggregate
amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to Base Rate
Loans (other than Swingline Loans), $5,000,000 or a whole multiple of $1,000,000 in excess thereof
with respect to Eurodollar Rate Loans and $100,000 or a whole multiple of $100,000 in excess
thereof with respect to Swingline Loans. A Notice of Prepayment received after 11:00 a.m. shall be
deemed received on the next Business Day. Each such repayment shall be accompanied by any amount
required to be paid pursuant to Section 4.6.



          (c) Mandatory Prepayments.




          (i) Except as provided in Section 2.8, if at any time the Total
Outstandings
exceed the lesser of (i) the Borrowing Base and (ii) the Aggregate Commitment, the
Borrowers shall repay promptly (and in any event within two (2) Business Days or such
longer period as the Administrative Agent may agree) upon the earlier of (A) any
Responsible Officer of the Administrative Borrower obtaining knowledge thereof and (B)
demand from the Administrative Agent, by payment to the Administrative Agent for the
account of the Lenders, an amount equal to such excess with each such repayment applied
first to the principal amount of outstanding Swingline Loans, second to the
principal amount of outstanding Revolving Loans and third, with respect to any
Letters of Credit then outstanding, to a payment of cash collateral into a cash collateral
account opened by the Administrative Agent, for the benefit of the Lenders in an amount
requested by the Administrative Agent which, in any case, will not be in excess of an
amount equal to one hundred five percent (105%) of the outstanding Letter of Credit
Obligations.




          (ii) If at any time any Loan Party or any of its Subsidiaries shall receive proceeds
from (A) any insurance or condemnation award payable by reason of theft, loss, physical
destruction or damage, taking or similar event with respect to any Collateral or (B) the
sale (or series of sales) or other disposition of Collateral, the Borrowers shall prepay
Loans in an amount equal to one hundred percent (100%) of such proceeds, which proceeds
shall promptly upon receipt thereof be deposited into a Blocked Account and payments
therefrom shall be applied by the Administrative Agent for the account of the Lenders
first to the principal amount of outstanding Swingline Loans and second to
the principal amount of outstanding Revolving Loans, without a corresponding reduction of
the Aggregate Commitment.



          (d) Limitation on Prepayment of LIBOR Rate Loans. The Borrowers may not prepay any
Eurodollar Rate Loan on any day other than on the last day of the Interest Period applicable
thereto unless such prepayment is accompanied by any amount required to be paid pursuant to
Section 4.6.



38









 





          (e) Hedging
Agreements. No repayment or prepayment pursuant to this Section 2.5
shall affect any Loan Party’s obligations under any Hedging Agreement entered into with a Bank
Product Provider.



     Section 2.6 Optional Reduction of Commitments. The Administrative Borrower shall have
the right to terminate or permanently reduce the unused portion of the Aggregate Commitment at any
time or from time to time upon not less than three (3) Business Days’ prior written notice to the
Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such
termination or reduction, which notice shall specify the effective date thereof and the amount of
any such reduction which shall be in a minimum amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and shall be irrevocable and effective upon receipt by the
Administrative Agent; provided that no such reduction or termination shall be permitted if
after giving effect thereto, and to any prepayments of the Loans made on the effective date
thereof, the Total Outstandings would exceed the Aggregate Commitment after such proposed
reduction.



     Section 2.7
Optional Increase of Commitments. At any time following the Closing Date,
the Company shall have the right, from time to time and upon not less than fifteen (15) Business
Days (or such shorter period of time as agreed to by the Administrative Agent in its sole
discretion) prior written notice to the Administrative Agent (which notice shall not obligate the
Company to increase the Aggregate Commitment) to increase the Aggregate Commitment (each such
increase, a “Facility Increase”); provided that:



          (a) no Default or Event of Default shall have occurred and be continuing or would result from
any such requested Facility Increase or borrowings thereunder;



          (b) all representations and warranties contained herein and in the other Loan Documents shall
be true and correct in all material respects with the same effect as though such representations
and warranties had been made on and as of the date of such Facility Increase and after giving
effect thereto, except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties shall have been true
and correct in all material respects on and as of such earlier date); provided that any
representation or warranty that is qualified as to “materiality”, “Material Adverse Effect” or
similar language shall be true and correct (after giving effect to any qualification therein) in
all respects on such respective dates;



          (c) each Facility Increase shall be in an aggregate principal amount of at least $5,000,000
or a whole multiple of $1,000,000 in excess thereof;



          (d) the
aggregate amount of all Facility Increases made pursuant to this Section 2.7 shall not exceed $25,000,000;



          (e) Facility Increases shall not increase or otherwise affect the Letter of Credit Limit or
the Swingline Limit;



          (f) the Commitment of any Lender shall not be increased without the approval of such Lender;



          (g) in connection with each proposed Facility Increase, the Company shall first provide all
then existing Lenders with an opportunity to commit to such Facility Increase on a ratable basis
(provided that no Lender shall have an obligation to commit to all or a portion of the proposed
Facility Increase) and, if, within ten (10) Business Days after the Company has delivered notice
thereof to such existing Lenders, sufficient commitments cannot be obtained from such existing
Lenders (it being



39









 







agreed that any Lender that does not deliver a notice of such Lender’s intention to commit to such
Facility Increase within such period shall be deemed to have declined to commit to such Facility
Increase), then the Company may seek commitments from other Eligible Assignees that are reasonably
acceptable to both the Administrative Agent and the Company or from existing Lenders in an amount
in excess of such Lender’s ratable share of such Facility Increase;



          (h) in the event that any existing Lender or any new lender commits to such requested Facility
Increase, (i) any new lender will execute an accession agreement to this Agreement, (ii) the
Commitment of any existing Lender that has committed to provide any of the requested increase shall
be increased, (iii) the Pro Rata Shares of the Lenders shall be adjusted, (iv) the Borrowers shall
make such borrowings and repayments as shall be necessary to affect the reallocation of the
Commitments (and the Borrowers shall pay any amounts due under Section 4.6 in connection
therewith), and (v) other changes shall be made to the Loan Documents as may be necessary to
reflect the aggregate amount, if any, by which the Lenders have agreed to increase their respective
Commitments or make new commitments in response to the Company’s request for an increase pursuant
to this Section 2.7 and which other changes do not adversely affect the rights of those
Lenders not participating in the increase other than a change in the Lenders’ Pro Rata Shares to
reflect the Facility Increase;



          (i) if the Aggregate Commitment is increased in accordance with this Section
2.7,
the Administrative Agent and the Company shall determine the effective date (the “Increase
Effective Date”) and the final allocation of such Facility Increase and the Administrative
Agent shall promptly notify the Administrative Borrower and the Lenders of the final allocation of
such Facility Increase and Increase Effective Date;



          (j) the Administrative Agent and the Lenders shall have received any fees and
expenses payable by the Loan Parties in respect of such Facility Increase; and



          (k) each Facility Increase shall be subject to all of the terms and conditions of this
Agreement, and shall be secured by the Collateral and guaranteed by Guarantors pursuant to the
terms hereof.



     Section 2.8 Overadvances; Special Agent Advances.



          (a) Additional Loans. No Loan shall be made nor shall any Letter of Credit be provided
to any Borrower intentionally and with actual knowledge that such Loan or Letter of Credit would
cause the Total Outstandings to exceed the lesser of (i) the Borrowing Base and (ii) the Aggregate
Commitment (such excess, an “Overadvance”), without the prior consent of all of the
Lenders, except, that, notwithstanding anything to the contrary contained herein and unless its
authority has been revoked in writing by the Required Lenders or an Event of Default shall have
occurred and be continuing (other than as a result of such Overadvance), the Administrative Agent
may require the Lenders to honor requests for such additional Loans or the Issuing Lender may
provide such additional Letters of Credit, intentionally and with actual knowledge that such Loans
or Letters of Credit will cause an Overadvance, as the Administrative Agent may deem necessary or
advisable in its discretion; provided that:




          (i) the aggregate principal amount of all additional Loans and additional
Letters of Credit to any Borrower that may be made or provided after obtaining such actual
knowledge of such Overadvance shall not exceed the lesser of (A) five percent (5%) of the
Aggregate Commitment and (B) $7,500,000;




          (ii) the sum of (A) the aggregate outstanding principal amount of the Loans and
Letters of Credit (including the additional Loans and additional Letters of Credit made



40









 







pursuant to this Section 2.8(a)), plus (B) the amount of Special Agent
Advances made pursuant to Section 2.8(b) then outstanding, shall not exceed the
Aggregate Commitment; and




          (iii) no such additional Loan or Letter of Credit shall be outstanding more than
forty-five (45) days after the date such additional Loan or Letter of Credit is made or
issued (as the case may be), in each case, except as the Required Lenders may otherwise agree.



Each Lender shall provide the amount of its Pro Rata Share of any such additional Loans or Letters
of Credit pursuant to the terms of this Agreement. Such additional Loans and Letters of Credit
shall bear interest at the interest rate then applicable to Base Rate Loans (including any Default
Rate, if then applicable).




          (b) Special Agent Advances. The Administrative Agent may, at its option, from time to
time, at any time on or after an Event of Default and for so long as the same is continuing or upon
any other failure of a condition precedent to the Loans and Letters of Credit hereunder, make such
disbursements and advances (“Special Agent Advances”) which the Administrative Agent, in
its sole discretion, deems necessary or desirable either (i) to preserve or protect the Collateral
or any portion thereof, (ii) to enhance the likelihood or maximize the amount of repayment by the
Loan Parties of the Loans or any other Obligations or (iii) to pay any other amount chargeable to
any Loan Party pursuant to the terms of this Agreement or any of the other Loan Documents
consisting of costs, fees and expenses and payments to any Issuing Lender in respect of any Letter
of Credit Obligations; provided that (A) the aggregate principal amount of the Special
Agent Advances outstanding at any time shall not exceed the lesser of (x) five percent (5%) of the
Aggregate Commitment and (y) $7,500,000, (B) the aggregate principal amount of the Special Agent
Advances outstanding at any time, plus the then outstanding principal amount of the Loans
and Letters of Credit (including the additional Loans and the additional Letters of Credit made
pursuant to Section 2.8(a)), shall not exceed the Aggregate Commitment and (C) no such
Special Agent Advance shall be outstanding more than forty five (45) days after the date such
Special Agent Advance is made, except as the Required Lenders may otherwise agree. The Special
Agent Advances shall be repayable on demand and together with all interest thereon shall constitute
Obligations secured by the Collateral. Special Agent Advances shall not constitute Loans but shall
otherwise constitute Obligations hereunder. Interest on Special Agent Advances shall be payable at
the interest rate then applicable to Base Rate Loans plus two percent (2%), and shall be
payable on demand. Each Lender agrees that it shall make available to the Administrative Agent,
upon the Administrative Agent’s demand, in immediately available funds, the amount equal to such
Lender’s Pro Rata Share of each such Special Agent Advance not to exceed such Lender’s Commitment.
If such funds are not promptly made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such funds, on demand from such Lender together
with interest thereon for each day from the date such payment was due until the date such amount is
paid to the Administrative Agent at the Federal Funds Rate for each day during such period and if
such amounts are not paid within three (3) days of the Administrative Agent’s demand, at the
highest interest rate provided for in Section 3.1 applicable to Base Rate Loans. The
Required Lenders may at any time by written notice to the Administrative Agent (x) revoke the
Administrative Agent’s authority to make further Special Agent Advances and (y) instruct the
Administrative Agent to demand repayment of outstanding Special Agent Advances from the Loan
Parties. Absent such revocation, the Administrative Agent’s determination that funding of a Special
Agent Advance is appropriate shall be conclusive.



     Section 2.9 Joint and Several Liability of the Borrowers.



          (a) Notwithstanding anything in this Agreement or any other Loan Documents to the contrary,
each Borrower, jointly and severally, in consideration of the financial accommodations to be
provided by the Administrative Agent and the Lenders under this Agreement and the other Loan



41









 







Documents, for the mutual benefit, directly and indirectly, of each Borrower and in consideration
of the undertakings of the other Borrowers to accept joint and several liability for the
Obligations, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations, it being the intention of the parties hereto that all of the
Obligations shall be the joint and several obligations of each Borrower without preferences or
distinction among them. The Borrowers shall be liable for all amounts due to the Administrative
Agent and the Lenders under this Agreement, regardless of which Borrower actually receives the
Loans, Letter of Credit Obligations or other extensions of credit hereunder or the amount of such
Loans, Letter of Credit Obligations or other extensions of credit received or the manner in which
the Administrative Agent or any Lender accounts for such Loans, Letter of Credit Obligations or
other extensions of credit on its books and records. The Obligations of the Borrowers with respect
to Loans made to one of them, and the Obligations arising as a result of the joint and several
liability of one of the Borrowers hereunder with respect to Loans made to the other of the
Borrowers hereunder, shall be separate and distinct obligations, but all such other Obligations
shall be primary obligations of all the Borrowers.



          (b) If and to the extent that any Borrower shall fail to make any payment with respect to any
of the Obligations as and when due or to perform any of the Obligations in accordance with the
terms thereof, then in each such event, the other Borrowers will make such payment with respect to,
or perform, such Obligation.



          (c) Except as otherwise expressly provided herein, to the extent permitted by law, each
Borrower (in its capacity as a joint and several obligor in respect of the obligations of the other
Borrower) hereby waives notice of acceptance of its joint and several liability, notice of
occurrence of any Event of Default (except to the extent notice is expressly required to be given
pursuant to the terms of this Agreement), or of any demand for any payment under this Agreement or
the other Loan Documents, notice of any action at any time taken or omitted by the Administrative
Agent or any Lender under or in respect of any of the obligations hereunder, any requirement of
diligence and, generally, all demands, notices and other formalities of every kind in connection
with this Agreement and the other Loan Documents. Each Borrower hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by
the Administrative Agent or any Lender at any time or times in respect of any default by the other
Borrowers in the performance or satisfaction of any term, covenant, condition or provision of this
Agreement, any and all other indulgences whatsoever by the Administrative Agent or any Lender in
respect of any of the obligations hereunder, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of such obligations or the
addition, substitution or release, in whole or in part, of the other Borrowers. Without limiting
the generality of the foregoing, each Borrower (in its capacity as a joint and several obligor in
respect of the obligations of the other Borrowers) assents to any other action or delay in acting
or any failure to act on the part of the Administrative Agent or any
Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder which might, but for the provisions of
this Section 2.9, afford grounds for terminating, discharging or relieving such Borrower,
in whole or in part, from any of its obligations under this Section 2.9, it being the
intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied,
the obligations of such Borrower under this Section 2.9 shall not be discharged except by
payment or performance and then only to the extent of such payment or performance. The obligations
of each Borrower under this Section 2.9 shall not be diminished or rendered unenforceable
by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any other Borrower. The joint and several liability of each Borrower hereunder
shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, membership, constitution or place of formation of any other
Borrower or any of the Lenders.



42









 





          (d) Each Borrower hereby agrees that to the extent that another Borrower shall have paid more than
its proportionate share of any payment made hereunder, such Borrower shall be entitled to seek and
receive contribution from and against any other Borrower hereunder which has not paid its
proportionate share of such payment. Each Borrower’s right of contribution shall be subject to the
terms and conditions set forth in clause (g). The provisions of this clause (d) shall in no respect
limit the obligations and liabilities of any Borrower to the Administrative Agent and the other
Secured Parties, and each Borrower shall remain liable to the Administrative Agent and the other
Secured Parties for the full amount of the Obligations of such Borrower hereunder.



          (e) The provisions of this Section 2.9 are made for the benefit of the Lenders and
their successors and assigns, and subject to Section 11.2, may be enforced by them from
time to time against any Borrower as often as occasion therefor may arise and without requirement
on the part of the Administrative Agent or any Lender first to marshal any of its claims or to
exercise any of its rights against the other Borrowers or to exhaust any remedies available to it
against the other Borrowers or to resort to any other source or means of obtaining payment of any
of the Obligations hereunder or to elect any other remedy.



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



          (g) With respect to the Obligations arising as a result of the joint and several liability of
the Borrowers hereunder with respect to Loans, Letter of Credit Obligations or other extensions of
credit made to the other Borrowers hereunder, each Borrower waives, until the Obligations shall
have been paid in full (other than indemnities and contingent Obligations which have not yet
accrued) and this Agreement shall have been terminated, any right to enforce any right of
subrogation or any remedy which the Administrative Agent or any Lender now has or may hereafter
have against any Borrower, any endorser or any guarantor of all or any part of the Obligations,
and any benefit of, and any right to participate in, any security or collateral given to the
Administrative Agent or any Lender. Any claim which any Borrower may have against any other
Borrower with respect to any payments to the Administrative Agent or the Lenders hereunder or
under any of the other Loan Documents are hereby expressly made subordinate and junior in right of
payment, without limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations. Upon the occurrence of any
Event of Default and for so long as the same is continuing, the Administrative Agent and the
Lenders may proceed directly and at once, without notice (to the extent notice is waivable under
applicable law), against (i) with respect to Obligations of the Borrowers, any of them or (ii)
with respect to Obligations of any Borrower, to collect and recover the full amount, or any
portion of the applicable Obligations, without first proceeding against the other applicable
Borrowers or any other Person, or against any security or collateral for the Obligations. Each
Borrower consents and agrees that the Administrative Agent and the Lenders shall be under no
obligation to marshal any assets in favor of Borrower(s) or against or in payment of any or all of
the Obligations.



     Section 2.10 Appointment of Administrative Borrower as Agent for Requesting Loans and
Receipts of Loans and Statements.



          (a) Each Borrower hereby irrevocably appoints and constitutes the Administrative Borrower as
its agent and attorney-in-fact to request and receive Loans and Letters of Credit pursuant to this
Agreement and the other Loan Documents from the Administrative Agent or any Lender in the name



43









 





or on behalf of such Borrower. The Administrative Agent and the Lenders may disburse the Loans to
such bank account of the Administrative Borrower or a Borrower or otherwise make such Loans to a
Borrower and provide such Letters of Credit to a Borrower as the Administrative Borrower may
designate or direct, without notice to any other Loan Party. Notwithstanding anything to the
contrary contained herein, the Administrative Agent may at any time and from time to time require
that Loans to or for the account of any Borrower be disbursed directly to an operating account of
such Borrower.



          (b) The Administrative Borrower hereby accepts the appointment by the Borrowers to act as the
agent and attorney-in-fact of the Borrowers pursuant to this Section 2.10. The
Administrative Borrower shall ensure that the disbursement of any Loans to each Borrower requested
by or paid to or for the account of the Company, or the issuance of any Letter of Credit for a
Borrower hereunder, shall be paid to or for the account of such Borrower.



          (c) Each Loan Party hereby irrevocably appoints and constitutes the Administrative Borrower as
its agent to receive statements on account and all other notices from the Administrative Agent and
the Lenders with respect to the Obligations or otherwise under or in connection with this Agreement
and the other Loan Documents.



          (d) Any notice, election, representation, warranty, agreement or undertaking by or on behalf
of any other Loan Party by Administrative Borrower shall be deemed for all purposes to have been
made by such Loan Party, as the case may be, and shall be binding upon and enforceable against
such Loan Party to the same extent as if made directly by such Loan Party.



ARTICLE 3

GENERAL LOAN PROVISIONS




     Section 3.1 Interest.



          (a) Interest Rate Options. The Borrowers shall pay to the Administrative Agent, for
the benefit of the Lenders, interest on the outstanding principal amount of the Loans (including,
without limitation Overadvances made pursuant to Section 2.8(a)) and Special Agent
Advances as follows:




          (i) as to Base Rate Loans, a rate equal to the Base Rate plus the
Applicable
Margin then in effect for Base Rate Loans;




          (ii) as to Eurodollar Rate Loans, a rate equal to the Adjusted Eurodollar Rate
plus the Applicable Margin then in effect for Eurodollar Rate Loans;




          (iii) as to Swingline Loans, a rate equal to the Base Rate plus the
Applicable Margin then in effect for Base Rate Loans; and




          (iv) as to Special Agent Advances, the rate described in Section
2.8(b).



     All interest accruing hereunder on and after the date of any Event of Default or the Maturity
Date shall be payable on demand.



          (b) Base Rate and Eurodollar Rate Loans.




          (i) The Administrative Borrower on behalf of any Borrower shall select
Base Rate Loans or Eurodollar Rate Loans and the Interest Period applicable thereto at
the time a




44











 






Notice of Borrowing is given pursuant to Section 2.4 or at the time a Notice of
Conversion or Continuation is given pursuant to Section 3.1(b)(ii).




          (ii) The Borrowers shall have the option to (A) convert at any time following the third
Business Day after the Closing Date all or any portion of any outstanding Base Rate Loans
(other than Swingline Loans) in a principal amount equal to $1,000,000 or any whole multiple
of $500,000 in excess thereof into one or more Eurodollar Rate Loans and (B) upon the
expiration of any Interest Period, (x) convert all or any part of its outstanding Eurodollar
Rate Loans in a principal amount equal to $2,000,000 or a whole multiple of $1,000,000 in
excess thereof into Base Rate Loans (other than Swingline Loans) or (y) continue such
Eurodollar Rate Loans as Eurodollar Rate Loans; provided that, in the case of a
conversion of Base Rate Loans into, or the continuation of, Eurodollar Rate Loans, no Event
of Default shall have occurred and be continuing. Whenever any Borrower desires to convert
or continue Loans as provided above, the Administrative Borrower on behalf of such Borrower
shall give the Administrative Agent irrevocable prior written notice substantially in the
form attached as Exhibit H hereto (a “Notice of Conversion or Continuation”)
not later than 11:00 a.m. three (3) Business Days before the day on which a proposed
conversion or continuation of such Loan is to be effective specifying (1) the Loans to be
converted or continued, and, in the case of any Eurodollar Rate Loan to be converted or
continued, the last day of the then-current Interest Period therefor, (2) the effective date
of such conversion or continuation (which shall be a Business Day), (3) the principal amount
of such Loans to be converted or continued, and (4) the Interest Period to be applicable to
such converted or continued Eurodollar Rate Loan. The Administrative Agent shall promptly
notify the Lenders of such notice.




          (iii) No more than five (5) Interest Periods may be in effect at any one time with
respect to Eurodollar Rate Loans.




          (iv) Any Eurodollar Rate Loans shall be automatically continued as a Eurodollar Rate
Loan with an Interest Period of one (1) month upon the last day of the applicable Interest
Period, unless the Administrative Agent has received a request to continue or convert such
Eurodollar Rate Loan in accordance with the terms hereof.



          (c) Default Rate. Notwithstanding anything to the contrary contained herein, (i)
immediately, automatically and without notice to the Borrowers, upon the occurrence and during the
continuance of an Event of Default under Section 11.1(a), (f) or (g), or
(ii) at Required Lenders’ option and upon prior written notice by the Administrative Agent to the
Administrative Borrower, upon the occurrence and during the continuance of any other Event of
Default, (A) the Borrowers shall no longer have the option to request Eurodollar Rate Loans or
Letters of Credit, (B) all outstanding Eurodollar Rate Loans shall bear interest at a rate per
annum of two percent (2%) in excess of the rate (including the Applicable Margin) then applicable
to Eurodollar Rate Loans until the end of the applicable Interest Period and thereafter at a rate
equal to two percent (2%) in excess of the rate (including the Applicable Margin) then applicable
to Base Rate Loans and (z) all outstanding Base Rate Loans and other Obligations arising hereunder
or under any other Loan Document shall bear interest at a rate per annum equal to two percent (2%)
in excess of the rate (including the Applicable Margin) then applicable to Base Rate Loans or such
other Obligations arising hereunder or under any other Loan Document. Interest shall continue to
accrue on the Obligations after the filing by or against any Borrower of any petition seeking any
relief in bankruptcy or under any act or law pertaining to insolvency or debtor relief, whether
state, federal or foreign.



          (d) Maximum Interest. Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, in no event whatsoever shall the aggregate of all




45









 







amounts that are contracted for, charged or received by the Administrative Agent or any Lender
pursuant to the terms of this Agreement or any of the other Loan Documents and that are deemed
interest under applicable law exceed the Maximum Interest Rate (including, to the extent
applicable, the provisions of Section 5197 of the Revised Statutes of the United States of America
as amended, 12 U.S.C. Section 85, as amended). In no event shall any Borrower or Guarantor be
obligated to pay interest or such amounts as may be deemed interest under applicable law in amounts
which exceed the Maximum Interest Rate. In the event any interest or deemed interest is charged or
received in excess of the Maximum Interest Rate (“Excess”), each Borrower and Guarantor
acknowledges and stipulates that any such charge or receipt shall be the result of an accident and
bona fide error, and that any Excess received by the Administrative Agent or any Lender shall be
applied, first, to the payment of then outstanding and unpaid principal hereunder; second to the
payment of the other Obligations then outstanding and unpaid; and third, returned to such Borrower
or Guarantor. All monies paid to the Administrative Agent or any Lender hereunder or under any of
the other Loan Documents, whether at maturity or by prepayment, shall be subject to any rebate of
unearned interest as and to the extent required by applicable law. For the purpose of determining
whether or not any Excess has been contracted for, charged or received by the Administrative Agent
or any Lender, all interest at any time contracted for, charged or received from any Borrower or
Guarantor in connection with this Agreement or any of the other Loan Documents shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread during the entire term of
this Agreement in accordance with the amounts outstanding from time to time hereunder and the
Maximum Interest Rate from time to time in effect in order to lawfully charge the maximum amount of
interest permitted under applicable laws. The provisions of this Section 3.1 shall be
deemed to be incorporated into each of the other Loan Documents (whether or not any provision of
this Section 3.1 is referred to therein).




          (e) Interest Payment and Computations. Interest on Base Rate Loans shall be payable by
the Borrowers to the Administrative Agent, for the account of the Administrative Agent and the
Lenders, monthly in arrears not later than the first day of each calendar month. Interest on any
Eurodollar Rate Loan shall be payable on the last day of each applicable Interest Period. Interest
on Base Rate Loans bearing interest based on the “prime rate” shall be calculated on the basis of
actual number of days elapsed over a year of 365 days. All other computations of interest and fees
hereunder shall be made on the basis of actual number of days elapsed over a year of 360 days. The
interest rate on non-contingent Obligations (other than Eurodollar Rate Loans) shall change
simultaneously with each change in the Base Rate.



     Section 3.2 Fees.



          (a) Commitment Fee. The Borrowers shall pay to the Administrative Agent, for the
account of the Lender (other than any Defaulting Lender from and after the date such Lender became
a Defaulting Lender), a fee on the unused amount of the Aggregate Commitments (a “Commitment
Fee”), which shall be payable on the first day of each calendar month in arrears, determined by
multiplying: (i) the amount, if any, by which (A) the Aggregate Commitment exceeds (B) the average
daily amount of Total Outstandings (other than outstanding Swingline Loans and Special Agent
Advances) during the immediately preceding calendar month (or part thereof) by (ii) the Commitment
Fee Rate. The obligation of the Borrowers to pay any Commitment Fees that remain unpaid shall
survive the termination of this Agreement.



          (b) Letter of Credit Fee. In consideration for the issuance of Letters of Credit
hereunder, the Borrowers shall pay to the Administrative Agent, for the account of the Lenders
(other than any Defaulting Lender from and after the date such Lender became a Defaulting Lender),
a fee at a per annum rate for each day from the date of issuance thereof to the date of expiration
equal to the Applicable Margin then in effect for Letter of Credit Fees on the average daily
maximum amount



46









 




available to be drawn under all of such Letters of Credit for the immediately preceding calendar
month (or part thereof), payable in arrears as of the first day of each succeeding calendar month,
computed for each day from the date of issuance to the date of expiration. The obligation of the
Borrowers to pay any letter of credit fees that remain unpaid shall survive the termination of
this Agreement.




          (c) Letter of Credit Fronting Fee. In addition to the letter of credit fees provided
above, the Borrowers shall pay to the Issuing Lender for its own account (without sharing with the
Lenders) a letter of credit fronting fee of one-fourth percent (0.25%), payable in arrears as of
the first day of each succeeding calendar month, of the average daily maximum amount available to
be drawn under each Letter of Credit computed at a per annum rate for each day from the date of
issuance to the date of expiration thereof, negotiation fees agreed to by the Borrowers and the
Issuing Lender from time to time, the customary charges from time to time of the Issuing Lender
with respect to the issuance, amendment, transfer, administration, cancellation and conversion of,
and drawings under, such Letters of Credit and in the case of documentary Letters of Credit, the
Issuing Lender’s customary processing fees.



          (d) Other Fees. The Borrowers shall pay to the Administrative Agent and the Lead
Arrangers the other fees and amounts set forth in the Fee Letter in the amounts and at the times
specified therein. To the extent payment in full of the applicable fee is received by the
Administrative Agent from the Borrowers on or about the Closing Date, the Administrative Agent
shall pay to each Lender its share of such fees in accordance with the terms of the arrangements of
the Administrative Agent with such Lender.



     Section 3.3 Loan Accounts. The Loans made by each Lender (and the purchases by such
Lender of participations in Letters of Credit and Swingline Loans) hereunder shall be evidenced by
one or more accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the Loans made by the
Lenders to the Borrowers (and the purchases by such Lender of participations in Letters of Credit
and Swingline Loans) and the interest and payments thereon. Any failure to so record or any error
in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers
hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrowers shall execute and deliver to such Lender (through the
Administrative Agent) a Note which shall evidence such Lender’s Commitment in addition to such
accounts or records. Each Lender may attach schedules to its Notes and endorse thereon the date,
amount and maturity of its Loans and payments with respect thereto.



     Section 3.4 Pro Rata Treatment, Sharing of Payments, Funding by Lenders, Etc.



          (a) Except to the extent otherwise provided in this Agreement or as otherwise agreed by the
Lenders: (i) the making and conversion of Loans shall be made among the Lenders based on their
respective Pro Rata Shares as to the Loans and (ii) each payment on account of any Obligations to
or for the account of one or more of the Lenders in respect of any Obligations due on a particular
day shall be allocated among the Lenders (other than Defaulting Lenders) entitled to such payments
based on their respective Pro Rata Shares and shall be distributed accordingly.



          (b) Each Loan Party agrees that, in addition to (and without limitation of) any right of
setoff, banker’s lien or counterclaim the Administrative Agent or any Lender may otherwise have,
while any Event of Default exists the Administrative Agent, each Lender and each of their
respective Affiliates shall be entitled, at its option (but subject, as among the Administrative
Agent and the Lenders,



47









 




to the provisions of Section 12.3(b) and Section 3.4(c)), to offset balances held
by it for the account of such Loan Party at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any Loans owed to such Person or any other amount
payable to such Person hereunder (regardless of whether such balances are then due to such Loan
Party), in which case it shall promptly notify the Administrative Borrower and the Administrative
Agent thereof; provided that such Person’s failure to give such notice shall not affect the
validity thereof.




          (c) Except as otherwise expressly permitted by this Agreement, if any Lender (including the
Administrative Agent) shall obtain from any Loan Party payment of any principal of or interest on
any Loan owing to it or payment of any other amount under this Agreement or any of the other Loan
Documents through the exercise of any right of setoff, banker’s lien or counterclaim or similar
right or otherwise (other than from the Administrative Agent as provided herein), and, as a result
of such payment, such Lender shall have received more than its Pro Rata Share of the principal of
the Loans or more than its share of such other amounts then due hereunder or thereunder by any Loan
Party to such Lender than the percentage thereof received by any other Lender, it shall promptly
pay to the Administrative Agent, for the benefit of the Lenders, the amount of such excess and
simultaneously purchase from such other Lenders a participation in the Loans or such other amounts,
respectively, owing to such other Lenders (or such interest due thereon, as the case may be) in
such amounts, and make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such excess payment (net of any expenses that may
be incurred by such Lender in obtaining or preserving such excess payment) in accordance with their
respective Pro Rata Shares or as otherwise agreed by the Lenders. To such end all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored.



          (d) Each Loan Party agrees that any Lender purchasing a participation (or direct interest) as
provided in this Section 3.4 may exercise, in a manner consistent with this Section
3.4, all rights of setoff, banker’s lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans or other amounts (as the
case may be) owing to such Lender in the amount of such participation.



          (e) Nothing contained herein shall require any Lender to exercise any right of setoff,
banker’s lien, counterclaims or similar rights or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to any other
Indebtedness or obligation of any Loan Party. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a setoff to which this
Section 3.4 applies, such Lender shall, to the extent practicable, assign such rights to
the Administrative Agent for the benefit of Lenders and, in any event, exercise its rights in
respect of such secured claim in a manner consistent with the rights of Lenders entitled under
this Section 3.4 to share in the benefits of any recovery on such secured claim.



          (f) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with Section 2.4(b) and may, in
reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In
such event, if a Lender has not in fact made its share of the applicable borrowing available to the
Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrowers to but excluding the
date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such
Lender, the greater of the daily average Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with



48









 




banking industry rules on interbank compensation and (ii) in the case of a payment to be made by
the Borrowers, the interest rate applicable to Base Rate Loans. If the Borrowers and such Lender
shall pay such interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the
Borrowers for such period. If such Lender pays its share of the applicable borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such
borrowing. Any payment by the Borrowers shall be without prejudice to any claim the Borrowers may
have against a Lender that shall have failed to make such payment to the Administrative Agent.




          (g) Nothing in this Section 3.4 or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require the Administrative Agent to advance funds on behalf of any
Lender or to relieve any Lender from its obligation to fulfill its Commitment hereunder or to
prejudice any rights that any Borrower may have against any Lender as a result of any default by
any Lender hereunder in fulfilling its Commitment.



     Section 3.5 Payments Generally.



          (a) Except as otherwise provided in clause (b) below, each payment by the Borrowers on
account of the principal of or interest on the Loans or of any fee, commission or other amounts
payable to the Lenders under this Agreement shall be made not later than 1:00 p.m. on the date
specified for payment under this Agreement to the Administrative Agent Payment Account, in
Dollars, in immediately available funds and shall be made without any set-off, counterclaim or
deduction whatsoever. Any payment received after 2:00 p.m. shall be deemed to have been made on
the next succeeding Business Day for all purposes hereunder. If any payment under this Agreement
shall be specified to be made upon a day which is not a Business Day, it shall be made on the next
succeeding day which is a Business Day and such extension of time shall in such case be included
in computing any interest if payable along with such payment. All principal, interest, fees,
costs, expenses and other charges provided for in this Agreement or the other Loan Documents may
be charged directly to the loan account(s) of any applicable Borrower maintained by the
Administrative Agent in the manner set forth in clause (b) below and the Administrative Agent
shall notify the applicable Borrower from time to time or upon the request of any such Borrower,
of any charge to such Borrower’s loan account for interest, fees, costs, expenses and other
charges (other than principal).



          (b) All amounts that shall have been swept into the Administrative Agent Payment Account
pursuant to Section 6.3(a) as of the end of a Business Day shall be applied to the
Obligations at the beginning of the next Business Day. If, as a result of such application, a
credit balance exists in the Administrative Agent Payment Account, the balance shall not accrue
interest in favor of the Company. The Company irrevocably waives the right to direct the
application of any payments or Collateral proceeds, and agrees that the Administrative Agent shall
have the continuing, exclusive right to apply and reapply the same against the Obligations then due
and owing, in accordance with the terms of this Agreement. Except as otherwise provided in
Section 11.3, all amounts applied to repay the Obligations pursuant to this Section
3.5(b) shall be applied in the manner determined by the Administrative Agent in its sole
discretion.



          (c) Notwithstanding anything to the contrary contained in this Agreement, unless so directed
by the Administrative Borrower, or unless an Event of Default shall have occurred and be
continuing, the Administrative Agent shall not apply any payments which it receives (or any
amounts applied to repay the Obligations pursuant to clause (b) above) to any Eurodollar Rate
Loans, except (i) on the expiration date of the Interest Period applicable to any such Eurodollar
Rate Loans or (ii) in the event that there are no outstanding Base Rate Loans; provided
that the Administrative Agent will attempt to honor any written request received from the
Administrative Borrower to hold such payment until the



49









 




expiration of the applicable Interest Period, it being understood and agreed that the
Administrative Agent shall have no liability for any failure to do so.




          (d) To the extent that any Loan Party makes a payment or payments to the Administrative Agent
for the benefit of the Lenders or the Administrative Agent receives any payment or proceeds of
Collateral which payments or proceeds or any part thereof are subsequently invalidated, declared to
be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if such payment or proceeds
had not been received by the Administrative Agent. This Section 3.5(d) shall remain
effective notwithstanding any contrary action which may be taken by the Administrative Agent or any
Lender in reliance upon such payment or proceeds. This Section 3.5 shall survive the
payment of the Obligations and the termination of this Agreement.



     Section 3.6 Settlement Procedures.



          (a) In order to administer the Credit Facility in an efficient manner and to minimize the
transfer of funds between the Administrative Agent and Lenders, the Administrative Agent may, at
its option, subject to the terms of this Section 3.6, make available, on behalf of
Lenders, the full amount of the Revolving Loans requested or charged to any Borrower’s loan
account(s) or otherwise to be advanced by Lenders pursuant to the terms hereof, without
requirement of prior notice to Lenders of the proposed Revolving Loans (each such advance by the
Administrative Agent, a “Settlement Advance”).



          (b) With respect to (i) all Swingline Loans and (ii) all Revolving Loans made by the
Administrative Agent on behalf of Lenders as provided in this Section 3.6, the amount of
each Lender’s Pro Rata Share of such outstanding Loans shall be computed weekly, and shall be
adjusted upward or downward on the basis of the amount of the outstanding Loans as of 5:00 p.m. on
the Business Day immediately preceding the date of each settlement computation; provided
that the Administrative Agent retains the absolute right at any time or from time to time to make
the above described adjustments at intervals more frequent than weekly. The Administrative Agent
shall deliver to each of the Lenders after the end of each week, or at such lesser period or
periods as the Administrative Agent shall determine, a summary statement of the amount of
outstanding Loans for such period (such week or lesser period or periods being hereinafter
referred to as a “Settlement Period”). If the summary statement is sent by the
Administrative Agent and received by a Lender prior to 12:00 noon, then such Lender shall make the
settlement transfer described in this Section 3.6 by no later than 3:00 p.m. on the same
Business Day and if received by a Lender after 12:00 noon, then such Lender shall make the
settlement transfer by not later than 3:00 p.m. on the next Business Day following the date of
receipt. If, as of the end of any Settlement Period, the amount of a Lender’s Pro Rata Share of
the outstanding Loans is more than such Lender’s Pro Rata Share of the outstanding Loans as of the
end of the previous Settlement Period, then such Lender shall forthwith (but in no event later
than the time set forth in the preceding sentence) transfer to the Administrative Agent by wire
transfer in immediately available funds the amount of the increase. Alternatively, if the amount
of a Lender’s (other than a Defaulting Lender) Pro Rata Share of the outstanding Loans in any
Settlement Period is less than the amount of such Lender’s Pro Rata Share of the outstanding Loans
for the previous Settlement Period, the Administrative Agent shall forthwith transfer to such
Lender by wire transfer in immediately available funds the amount of the decrease. The obligation
of each of the Lenders to transfer such funds and effect such settlement shall be irrevocable and
unconditional and without recourse to or warranty by the Administrative Agent. The Administrative
Agent and each Lender agrees to mark its books and records at the end of each Settlement Period to
show at all times the dollar amount of its Pro Rata Share of the outstanding Loans and Letters of
Credit. Each Lender shall only be entitled to receive interest on its Pro Rata Share of the Loans
to the extent such



50









 




Loans have been funded by such Lender. Because the Administrative Agent on behalf of Lenders may be
advancing and/or may be repaid Loans prior to the time when Lenders will actually advance and/or be
repaid such Loans, interest with respect to Loans shall be allocated by the Administrative Agent in
accordance with the amount of Loans actually advanced by and repaid to each Lender and the
Administrative Agent and shall accrue from and including the date such Loans are so advanced to but
excluding the date such Loans are either repaid by Borrowers or actually settled with the
applicable Lender as described in this Section 3.6. Each Lender acknowledges and agrees
that its obligation to refund Loans in accordance with the terms of this Section 3.6 is
absolute and unconditional and shall not be affected by any circumstance whatsoever, including,
without limitation, non-satisfaction of the conditions set forth in Article 5. Further,
each Lender agrees and acknowledges that if prior to the refunding of any outstanding Loans
pursuant to this Section 3.6, one of the events described in Section 11.1(f), (g)
or (h) shall have occurred, each Lender will, on the date the applicable Loan would have
been made, purchase an undivided participating interest in any Loan to be refunded in an amount
equal to its Pro Rata Share of the aggregate amount of such Loan.




          (c) To the extent that the Administrative Agent has made any such amounts available and the
settlement described above shall not yet have occurred, upon repayment of any Revolving Loans by a
Borrower or with the collected proceeds on deposit in the Administrative Agent Payment Account as
described in Section 3.5(b), the Administrative Agent may apply such amounts repaid
directly to any amounts made available by the Administrative Agent pursuant to this Section
3.6. In lieu of weekly or more frequent settlements, the Administrative Agent may, at its
option, at any time require each Lender to provide the Administrative Agent with immediately
available funds representing its Pro Rata Share of each Revolving Loan, prior to the Administrative
Agent’s disbursement of such Revolving Loan to Borrower. In such event, all Revolving Loans under
this Agreement shall be made by the Lenders simultaneously and proportionately to their Pro Rata
Shares.



          (d) If the Administrative Agent is not funding a particular Revolving Loan to a Borrower (or
the Administrative Borrower for the benefit of such Borrower) pursuant to subsections (a) and (b) above on any day, but is requiring each Lender to provide the Administrative
Agent with immediately available funds on the date of such Revolving Loan as provided in
subsection (c) above, the Administrative Agent may assume that each Lender will make
available to the Administrative Agent such Lender’s Pro Rata Share of the Revolving Loan requested
or otherwise made on such day and the Administrative Agent may, in its discretion, but shall not be
obligated to, cause a corresponding amount to be made available to or for the benefit of such
Borrower on such day. If the Administrative Agent makes such corresponding amount available to a
Borrower and such corresponding amount is not in fact made available to the Administrative Agent by
such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon for each day from the date such payment was
due until the date such amount is paid to the Administrative Agent at the Federal Funds Rate for
each day during such period and if such amounts are not paid within three (3) days of the
Administrative Agent’s demand, at the highest interest rate
provided for in Section 3.1 applicable to Base Rate Loans. During the period in which such Lender has not paid such
corresponding amount to the Administrative Agent, notwithstanding anything to the contrary
contained in this Agreement or any of the other Loan Documents, the amount so advanced by the
Administrative Agent to or for the benefit of any Borrower shall, for all purposes hereof, be a
Revolving Loan made by the Administrative Agent for its own account. Upon any such failure by a
Lender to pay the Administrative Agent, the Administrative Agent shall promptly thereafter notify
the Administrative Borrower of such failure and Borrowers shall pay such corresponding amount to
the Administrative Agent for its own account within five (5) Business Days of the Administrative
Borrower’s receipt of such notice.



          (e) Nothing in this Section 3.6 or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require the Administrative Agent to advance funds on behalf of any



51









 




Lender (including, without limitation, a Defaulting Lender) or to relieve any Lender from its
obligation to fulfill its Commitment hereunder or to prejudice any rights that any Borrower may
have against any Lender as a result of any default by any Lender hereunder in fulfilling its
Commitment. In the event that a Lender is a Defaulting Lender, the Administrative Agent shall be
entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall
be entitled to elect to implement the provisions set forth in Section 3.9.




     Section 3.7 Obligations Several; Independent Nature of Lenders’ Rights. The obligation
of each Lender hereunder is several, and no Lender shall be responsible for any default by any
other Lender in the other Lender’s obligation to make a Loan requested (or deemed requested)
hereunder nor shall the Commitment of any Lender be increased or decreased as a result of the
default by any other Lender in the other Lender’s obligation to make a Loan hereunder. Nothing
contained in this Agreement or any of the other Loan Documents and no action taken by the Lenders
pursuant hereto or thereto shall be deemed to constitute the Lenders to be a partnership, an
association, a joint venture or any other kind of entity. The amounts payable at any time hereunder
to each Lender shall be a separate and independent debt, and subject to Section 12.3, each
Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it
shall not be necessary for any other Lender to be joined as an additional party in any proceeding
for such purpose.



     Section 3.8 Bank Products. Each Bank Product Provider shall be deemed a third party
beneficiary hereof and of the provisions of the other Loan Documents solely for purposes of any
reference in a Loan Document to the parties for whom the Administrative Agent is acting. The
Administrative Agent hereby agrees to act as agent for such Bank Product Providers and, by virtue
of entering into a Bank Product Agreement, the applicable Bank Product Provider shall be
automatically deemed to have appointed the Administrative Agent as its agent and to have accepted
the benefits of the Loan Documents; it being understood and agreed that the rights and benefits of
each Bank Product Provider under the Loan Documents consist exclusively of such Bank Product
Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees)
granted to the Administrative Agent and the right to share in payments and collections out of the
Collateral as more fully set forth herein. In addition, each Bank Product Provider, by virtue of
entering into a Bank Product Agreement, shall be automatically deemed to have agreed that the
Administrative Agent shall have the right, but shall have no obligation, to establish, maintain,
relax, or release reserves in respect of the Bank Product Obligations and that if reserves are
established there is no obligation on the part of the Administrative Agent to determine or insure
whether the amount of any such reserve is appropriate or not. In connection with any such
distribution of payments or proceeds of Collateral, the Administrative Agent shall be entitled to
assume no amounts are due or owing to any Bank Product Provider (including, without limitation,
Bank Product Providers that provide Noticed Bank Products and any other Bank Product Provider)
unless such Bank Product Provider has provided a written certification (setting forth a reasonably
detailed calculation) to the Administrative Agent as to the amounts that are due and owing to it
and such written certification is received by the Administrative Agent a reasonable period of time
prior to the making of such distribution. The Administrative Agent shall have no obligation to
calculate the amount due and payable with respect to any Bank Products, but may rely upon the
written certification of the amount due and payable from the relevant Bank Product Provider. In the
absence of an updated certification, the Administrative Agent shall be entitled to assume that the
amount due and payable to the relevant Bank Product Provider is the amount last certified to the
Administrative Agent by such Bank Product Provider as being due and payable (less any distributions
made to such Bank Product Provider on account thereof). The Loan Parties may obtain Bank Products
from any Bank Product Provider, although no Loan Party is required to do so. Each Loan Party
acknowledges and agrees that the providing of Bank Products by any Bank Product Provider is in the
sole and absolute discretion of such Bank Product Provider. Notwithstanding anything to the
contrary in this Agreement or any other Loan Document, no provider or holder of any Bank Product
shall have any voting or approval rights hereunder (or be deemed a Lender) solely by virtue



52









 




of its status as the provider or holder of such agreements or products or the Obligations owing
thereunder, nor shall the consent of any such provider or holder be required (other than in their
capacities as Lenders, to the extent applicable) for any matter hereunder or under any of the
other Loan Documents, including as to any matter relating to the Collateral or the release of
Collateral or Guarantors.




     Section 3.9 Defaulting Lenders. The Administrative Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by any Loan Party to the Administrative Agent for
the Defaulting Lender’s benefit or any collections or proceeds of Collateral that would otherwise
be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the
Defaulting Lender, the Administrative Agent shall transfer any such payments (A) first, to the
Swingline Lender to the extent of any Swingline Loans that were made by the Swingline Lender and
that were required to be, but were not, repaid by the Defaulting Lender, (B) second, to the Issuing
Lender, to the extent of the portion of the Letter of Credit Obligations that were required to be,
but were not, repaid by the Defaulting Lender, (C) third, to each non-Defaulting Lender ratably in
accordance with their Commitments (but, in each case, only to the extent that such Defaulting
Lender’s portion of a Loan (or other funding obligation) was funded by such other non-Defaulting
Lender), (D) fourth, to a suspense account maintained by the Administrative Agent, the proceeds of
which shall be retained by the Administrative Agent and may be made available to be re-advanced to
or for the benefit of any Borrower as if such Defaulting Lender had made its portion of such Loans
(or other funding obligations) hereunder, and (E) fifth, from and after the date on which all other
Obligations have been paid in full, to such Defaulting Lender in accordance with Section
11.3. Subject to the foregoing, the Administrative Agent may hold and, in its sole discretion,
re-lend to a Borrower for the account of such Defaulting Lender the amount of all such payments
received and retained by the Administrative Agent for the account of such Defaulting Lender. The
provisions of this Section 3.9 shall remain effective with respect to such Defaulting
Lender until the earlier of (y) the date on which the non-Defaulting Lenders, the Administrative
Agent and the Borrowers shall have waived, in writing, the application of this Section 3.9
to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all
amounts that it was obligated to fund hereunder, pays to the Administrative Agent all amounts owing
by such Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and,
if requested by the Administrative Agent, provides adequate assurance reasonably acceptable to the
Administrative Agent of its ability to perform its future obligations hereunder. The operation of
this Section 3.9 shall not be construed to increase or otherwise affect the Commitment of
any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of
its duties and obligations hereunder or to relieve or excuse the performance by any Borrower of its
duties and obligations hereunder to the Administrative Agent or to the Lenders other than such
Defaulting Lender. Any failure by a Defaulting Lender to fund amounts that it was obligated to fund
hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall
entitle the Loan Parties, at their option, to arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender in the manner set forth in Section 4.9(b). In the
event of a direct conflict between the priority provisions of this Section 3.9 and any
other provision contained in this Agreement or any other Loan Document, it is the intention of the
parties hereto that such provisions be read together and construed, to the fullest extent possible,
to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this
Section 3.9 shall control and
govern.



ARTICLE 4

YIELD PROTECTION




     Section 4.1 Inability to Determine Applicable Interest Rate. If the Administrative
Agent shall determine in good faith (which determination shall, absent manifest error, be final and
conclusive



53









 




and binding on all parties hereto) that on any date by reason of circumstances affecting the
London interbank market, adequate and fair means do not exist for ascertaining the interest rate
applicable to Eurodollar Rate Loans on the basis provided for in the definition of Adjusted
Eurodollar Rate, the Administrative Agent shall on such date give notice (such notice, the
“Initial Notice”) to the Administrative Borrower and each Lender of such determination.
Thereafter, no Loans may be made as, or converted to, Eurodollar Rate Loans, until such time as
the Administrative Agent notifies the Administrative Borrower and the Lenders that the
circumstances giving rise to such Initial Notice no longer exist (in which case the Administrative
Agent shall give prompt notice to the Administrative Borrower and the Lenders). Upon receipt of
the Initial Notice, the Administrative Borrower may revoke any Notice of Borrowing or Notice of
Continuation or Conversion then submitted by it. If the Administrative Borrower does not revoke
such notice, the Lenders shall make, convert or continue such Loans, as proposed by the
Administrative Agent, in the amount specified in such notice submitted by the Administrative
Borrower, but such Loans shall be made, converted or continued as Base Rate Loans instead of
Eurodollar Rate Loans.




     Section 4.2 Changed Circumstances. Notwithstanding anything to the contrary contained
herein, if (i) any change in any law or interpretation thereof by any Governmental Authority makes
it unlawful for a Lender to make or maintain a Eurodollar Rate Loan or to maintain any Commitment
with respect to a Eurodollar Rate Loan, (ii) the Required Lenders determine in good faith (which
determination shall, absent manifest error, be final and conclusive and binding upon all parties
hereto) that it has become impracticable as a result of a circumstance that adversely affects the
London interbank market or the position of such Lender in such market or (iii) the Required Lenders
determine that the Adjusted Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, then, in each case, such Lender or Lenders shall give notice thereof to the
Administrative Agent and the Administrative Borrower and may (A) declare that Eurodollar Rate Loans
will not thereafter be made by such Lender, such that any request for Eurodollar Rate Loans from
such Lender shall be deemed to be a request for a Base Rate Loan, unless such Lender’s declaration
has been withdrawn (and it shall be withdrawn promptly upon the cessation of the circumstances
described in clause (i) or (ii) above) and (B) require that all outstanding Eurodollar Rate Loans
made by such Lender be converted to Base Rate Loans immediately, in which event all outstanding
Eurodollar Rate Loans of such Lender shall be so converted.



     Section 4.3 Increased Costs. If any Change in Law shall: (a) impose, modify or deem
applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in the Adjusted Eurodollar Rate) or the
Issuing Lender; (b) subject any Lender or the Issuing Lender to any tax of any kind whatsoever
other than any Excluded Tax with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Rate Loan made by it, or change the basis of
taxation of payments to such Lender or the Issuing Lender in respect thereof (except for Taxes or
Other Taxes covered by Section 4.5 or Excluded Taxes and the imposition of, or any change
in the rate of, any taxes payable by such Lender or the Issuing Lender described in Sections
4.5(d)); or (c) impose on any Lender, the Issuing Lender or the London interbank market any
other condition, cost or expense affecting this Agreement, Eurodollar Rate Loans made by such
Lender or any Letter of Credit or participation therein, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any Eurodollar Rate Loan (or
of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any
sum received by such Lender or the Issuing Lender hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender or the Issuing Lender, Borrowers will pay to such
Lender or the Issuing Lender, as the case may



54









 




be, such additional amount or amounts as will compensate such Lender or the Issuing Lender, as the
case may be, for such additional costs incurred or reduction suffered.




     Section 4.4 Capital Requirements. If any Lender or the Issuing Lender determines in
good faith that any Change in Law affecting such Lender or the Issuing Lender or any lending office
of such Lender or such Lender’s or the Issuing Lender’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding
company, if any, as a consequence of this Agreement, the Commitment of such Lender or the Loans
made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit
issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such
Lender’s or the Issuing Lender’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or the Issuing Lender’s policies and the policies of such
Lender’s or the Issuing Lender’s holding company with respect to capital adequacy), then from time
to time Borrowers will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s
or the Issuing Lender’s holding company for any such reduction suffered.



     Section 4.5 Taxes.



          (a) Any and all payments by or on account of any of the Obligations shall be made free and
clear of and without deduction or withholding for or on account of, any setoff, counterclaim,
defense, duties, taxes, levies, imposts, fees, deductions, charges, withholdings, liabilities,
restrictions or conditions of any kind imposed by any Governmental Authority, excluding all
Excluded Taxes (all such non-excluded taxes, levies, imposts, fees, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Taxes”).



          (b) If any Taxes shall be required by law to be deducted from or in respect of any sum payable
in respect of the Obligations to any Lender, the Issuing Lender or the Administrative Agent (i) the
sum payable shall be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 4.5), such
Lender, the Issuing Lender or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii) the relevant Loan
Party shall make such deductions, (iii) the relevant Loan Party shall pay the full amount deducted
to the relevant taxing authority or other authority in accordance with applicable law and (iv) the
relevant Loan Party shall deliver to the Administrative Agent evidence of such payment.



          (c) In addition, each Loan Party agrees to pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies of the United States or any
political subdivision thereof or any applicable foreign jurisdiction, and all liabilities with
respect thereto, in each case arising from any payment made hereunder or under any of the other
Loan Documents or from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or any of the other Loan Documents (collectively, “Other Taxes”).



          (d) Each Loan Party shall indemnify each Lender, the Issuing Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including any Taxes and Other Taxes imposed by
any jurisdiction on amounts payable under this Section 4.5) paid by such Lender, the
Issuing Lender or the Administrative Agent (as the case may be) and any liability (including for
penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within
ten (10) days from the date such Lender, the Issuing Lender or the Administrative Agent (as the
case may be) makes written demand



55









 




therefor. A certificate as to the amount of such payment or liability delivered to the
Administrative Borrower by a Lender, the Issuing Lender (with a copy to the Administrative Agent)
or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Lender,
shall be conclusive absent manifest error.




          (e) As soon as practicable after any payment of Taxes or Other Taxes by any Loan Party, such
Loan Party shall furnish to the Administrative Agent, at its address referred to herein, the
original or a certified copy of a receipt evidencing payment thereof.



          (f) Without prejudice to the survival of any other agreements of any Loan Party hereunder or
under any of the other Loan Documents, the agreements and obligations of such Loan Party contained
in this Section 4.5 shall survive the termination of this Agreement and the payment in full
of the Obligations.



          (g) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the applicable Borrower is resident for tax purposes, or
any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any
of the other Loan Documents shall deliver to the Administrative Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by
the Administrative Borrower or the Administrative Agent (in such number of copies as is reasonably
requested by the recipient), whichever of the following is applicable (but only if such Foreign
Lender is legally entitled to do so): (i) duly completed copies of Internal Revenue Service Form
W-8BEN claiming exemption from, or a reduction to, withholding tax under an income tax treaty, or
any successor form, (ii) duly completed copies of Internal Revenue Service Form W-8ECI claiming
exemption from withholding because the income is effectively connected with a U.S. trade or
business or any successor form, (iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Sections 871(h) or 881(c) of the Code, a certificate of the
Foreign Lender to the effect that such Foreign Lender is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section
881(c)(3)(B) of the Code or a “controlled foreign corporation” described and Section 881(c)(3)(C)
of the Code and duly completed copies of Internal Revenue Service Form W-8BEN claiming exemption
from withholding under the portfolio interest exemption or any successor form or (iv) any other
applicable form, certificate or document prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable law to permit a Borrower to
determine the withholding or deduction required to be made. Unless the Administrative Borrower and
the Administrative Agent have received forms or other documents reasonably satisfactory to them
indicating that payments hereunder or under any of the other Loan Documents to or for a Foreign
Lender are not subject to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Borrowers or the Administrative Agent shall withhold
amounts required to be withheld by applicable requirements of law from such payments at the
applicable statutory rate.



          (h) Any
Lender claiming any additional amounts payable pursuant to this Section 4.5 shall use its reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its applicable lending office if the making of such a
change would avoid the need for, or reduce the amount of, any such additional amounts that would
be payable or may thereafter accrue and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.



          (i) If the Administrative Agent, the Issuing Lender or any Lender determines, in its
sole discretion, that it has received a refund of an additional amount from any Loan Party pursuant
to Section 4.5(b), the Administrative Agent, the Issuing Lender or such Lender shall pay to
such Loan Party



56









 







an amount equal to such refund, net of all out-of-pocket expenses of the Administrative Agent, the
Issuing Lender or such Lender, as the case may be, and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund. Each Loan Party, upon
request of the Administrative Agent, the Issuing Lender or such Lender, agrees to repay the amount
paid over to such Loan Party (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, the Issuing Lender or such Lender in
the event the Administrative Agent, the Issuing Lender or such Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to require the
Administrative Agent, the Issuing Lender or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to any Loan Party or any
other Person.



     Section 4.6 Breakage Indemnity. The Borrowers shall pay to the Administrative Agent
its customary administrative charge and to each Lender all losses, expenses and liabilities
(including any interest paid by such Lender to the Lenders of funds borrowed by it to make or
carry its Eurodollar Rate Loans and any loss, expense or liability sustained by such Lender in
connection with the liquidation or redeployment of such) that it sustains (a) if for any reason
(other than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not occur on a
date specified therefor in a request for borrowing, or a conversion to, or continuation of, any
Eurodollar Rate Loan does not occur on a date specified therefor in a request for conversion or
continuation, (b) if any prepayment or other principal payment of, or any conversion of, any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest Period applicable
to such Loan, or (c) if any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by a Borrower (or on its behalf by the Administrative
Borrower). This covenant shall survive the termination or non-renewal of this Agreement and the
payment of the Obligations.



     Section 4.7 Certificates for Reimbursement. A certificate of a Lender or the Issuing
Lender setting forth the amount or amounts necessary to compensate such Lender or the Issuing
Lender or its holding company, as the case may be, as specified in Sections 4.3 or
4.4 and delivered to the Administrative Borrower shall be conclusive absent manifest
error. The Borrowers shall pay such Lender or the Issuing Lender, as the case may be, the amount
shown as due on any such certificate within ten (10) days after receipt thereof.



     Section 4.8 Delay in Requests. Failure or delay on the part of any Lender or the
Issuing Lender to demand compensation pursuant to Sections 4.3 or 4.4 shall not
constitute a waiver of such Lender’s or the Issuing Lender’s right to demand such compensation;
provided that the Borrowers shall not be required to compensate a Lender or the Issuing Lender
pursuant to this such Sections for any increased costs incurred or reductions occurring more than
one hundred eighty (180) days prior to the date that such Lender or the Issuing Lender, as the
case may be, becomes aware of the event giving rise to such Lender’s or the Issuing Lender’s claim
for compensation therefor (except that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the one hundred eighty (180) day period referred to above shall
be extended to include the period of retroactive effect thereof).



     Section 4.9 Mitigation; Replacement of Lenders.



          (a) If Section 4.2 applies, any Lender requests compensation under Sections
4.2, 4.3 or 4.4, or the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant to Section
4.5, then such Lender shall promptly, and in any event if so requested by the Administrative
Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to
designate a different lending office for funding or booking its Loans hereunder, to assign its
rights and obligations hereunder to another of its offices, branches or affiliates or to take such
other actions as such Lender or the Administrative Agent determines, if, in the judgment of



57









 




such Lender, such designation, assignment or other action (i) would eliminate or reduce amounts
payable pursuant to such Sections in the future and (ii) would not subject the Administrative
Agent or such Lender to any unreimbursed cost or expense and the Administrative Agent or such
Lender would not suffer any economic, legal or regulatory disadvantage. Nothing in this
Section 4.9 shall affect or postpone any of the obligations of the Borrowers or the rights
of the Administrative Agent or such Lender pursuant to this Section 4.9. The Borrowers
hereby agree to pay on demand all reasonable costs and expenses incurred by the Administrative
Agent or any Lender in connection with any such designation or assignment.




          (b) If Section 4.2 applies, any Lender requests compensation under Sections
4.2, 4.3 or 4.4, or becomes a Defaulting Lender, or the Borrowers are required
to pay any additional amount to any Lender or Governmental Authority pursuant to Section
4.5, then within one hundred twenty (120) days thereafter, the Administrative Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative Agent, replace such
Lender by requiring such Lender to assign and delegate (and such Lender shall be obligated to
assign and delegate), without recourse (in accordance with and subject to the restrictions
contained in Section 14.11), all of its interests, rights and obligations under this
Agreement to an Eligible Assignee that shall assume such obligations; provided that (i) the
Administrative Borrower has received the prior written consent of the Administrative Agent and the
Issuing Lender, in accordance with, and subject to, the provisions of Section 14.11, (ii)
the Administrative Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 14.11, (iii) such Lender shall have received payment of an amount
equal to the outstanding principal amount of its Loans and participations in Letter of Credit
Obligations and Swingline Loans that it has funded, if any, accrued interest thereon, accrued fees
and other amounts payable to it hereunder (other than, in the case of a Defaulting Lender, Bank
Product Obligations owed thereto), from the assignee (to the extent of such outstanding principal)
and the Administrative Borrower (in the case of accrued interest, fees and other amounts, including
amounts under Section 4.6), (iv) such assignment will result in a reduction in such
compensation and payments, and (v) such assignment does not conflict with applicable laws or
regulations. A Lender shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Administrative Borrower to require such assignment and delegation cease to apply. Nothing in this
Section 4.9 shall impair any rights that any Borrower or the Administrative Agent may have
against any Lender that is a Defaulting Lender.



     Section 4.10 No Requirement of Match Funding. Notwithstanding anything to the contrary
contained herein, the Administrative Agent and the Lenders shall not be required to acquire Dollar
deposits in the London interbank market or any other offshore Dollar market to fund any Eurodollar
Rate Loan or to otherwise match fund any Obligations as to which interest accrues based on the
Eurodollar Rate. All of the provisions of this Article 4 shall be deemed to apply as if the
Administrative Agent, each Lender or any Participant had acquired such deposits to fund any
Eurodollar Rate Loan or any other Obligation as to which interest is accruing at the Eurodollar
Rate by acquiring such Dollar deposits for each Interest Period in the amount of the Eurodollar
Rate Loans or other applicable Obligations.



ARTICLE 5

CONDITIONS PRECEDENT




     Section 5.1 Conditions Precedent to Initial Loans and Letters of Credit. The
obligation of the Lenders to make the initial Loans or of Issuing Lender to issue the initial
Letters of Credit hereunder is subject to the satisfaction of, or waiver of, immediately prior to
or concurrently with the making of such Loan or the issuance of such Letter of Credit of each of
the following conditions precedent:



          (a) the Administrative Agent shall have received (i) counterparts of this Agreement, (ii) for
the account of each Lender requesting a promissory note, a Note and (iii) counterparts of all
other



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Loan Documents and all instruments and documents (including, without limitation, the Information
Certificate) required to be delivered hereunder, in each case conforming to the requirements
hereunder and thereunder and executed by a duly authorized officer or director of each party
thereto or of the general partner of any partnership party thereto, and in each case in form and
substance reasonably satisfactory to the Lenders;




          (b) the Administrative Agent shall have received, in form and substance satisfactory to the
Administrative Agent, (i) all releases, terminations and such other documents as the Administrative
Agent may request to evidence and effectuate the termination of the Existing Facility, including,
but not limited to, a payoff letter, and (ii) the termination and release by each of the lenders
under the Existing Facility of any interest in and to any assets and properties of each Loan Party,
duly authorized, executed and delivered by it or each of them, including, but not limited to, (A)
UCC termination statements for all UCC financing statements previously filed by it or any of them
or their predecessors, as secured party and any Loan Party, as debtor and (B) satisfactions and
discharges of any mortgages, deeds of trust or deeds to secure debt by any Loan Party in favor of
it or any of them, in form acceptable for recording with the appropriate Governmental Authority;



          (c) all requisite corporate action and proceedings in connection with this Agreement and the
other Loan Documents shall be satisfactory in form and substance to the Administrative Agent, and
the Administrative Agent shall have received all information and copies of all documents, including
records of requisite corporate action and proceedings which the Administrative Agent may have
requested in connection therewith, such documents where requested by the Administrative Agent or
its counsel to be certified by appropriate corporate officers or Governmental Authority (and
including a copy of the certificate of incorporation or formation of each Loan Party which shall
set forth the same complete corporate name of such Loan Party as is set forth herein and
certificates of good standing in (i) the state of organization, (ii) the state where such Loan
Party’s principal place of business is located and (iii) each state where such Loan Party owns
material real property, in each case, certified by the Secretary of State (or equivalent
Governmental Authority), the bylaws or articles of each Loan Party and resolutions of the board of
directors (or equivalent governing body) of each Loan Party approving and authorizing the Loan
Documents and the transactions contemplated thereby);



          (d) the Administrative Agent shall have received, in form and substance satisfactory to the
Administrative Agent, all consents, approvals, waivers, acknowledgments and other agreements from
third persons (including any Governmental Authorities) which the Administrative Agent may deem
necessary or desirable in order to permit, protect and perfect its security interests in and Liens
upon the Collateral or to effectuate the provisions or purposes of this Agreement and the other
Loan Documents, including, without limitation, Collateral Access Agreements;



          (e) the Borrowers shall have a cash management system in a place that is reasonably
satisfactory to the Administrative Agent and, except as otherwise required by Schedule
9.15, the Administrative Agent shall have received, in form and substance satisfactory to the
Administrative Agent, (i) Deposit Account Control Agreements by and among the Administrative Agent,
each Loan Party and each bank where such Loan Party has a deposit account (other than an Excluded
Bank Account) and (ii) Investment Property Control Agreements by and among the Administrative
Agent, each Loan Party and each securities intermediary, commodity intermediary or other person
that maintains a securities account (other than an Excluded Bank Account) of such Loan Party, in
each case, duly authorized, executed and delivered by the Administrative Agent, such Loan Party and
such bank, intermediary or other person, as applicable;



          (f) the Administrative Agent shall have received (i) all filings and recordations that are
necessary to perfect the security interest of the Administrative Agent in the Collateral and (ii)



59









 




evidence, in form and substance reasonably satisfactory to the Administrative Agent, that upon
such filings and recordations, the Administrative Agent will have a valid perfected first priority
Lien upon all of the Collateral;




          (g) the Administrative Agent shall have received and reviewed Lien and judgment search
results for the jurisdiction of organization of each Loan Party; and the jurisdiction of the chief
executive office of each Loan Party, which search results shall be in form and substance
satisfactory to the Administrative Agent;



          (h) the Administrative Agent shall have received a duly completed and executed Instruments of
Assignments and Notice of Assignment for each Material Government Contract;



          (i) the Administrative Agent shall have received originals of
certificates
representing all of the issued and outstanding shares of the Capital Stock of each Loan Party
(other than Holdings) and each Subsidiary of each Loan Party, in each case, together with an
undated stock power for each such certificate duly executed in blank by the registered owner
thereof;



          (j) the Administrative Agent shall have received evidence of insurance and loss
payee endorsements required hereunder and under the other Loan Documents, in form and substance
satisfactory to the Administrative Agent, and certificates of insurance policies and/or
endorsements naming the Administrative Agent as loss payee and additional insured;



          (k) the Administrative Agent shall have received, in form and substance satisfactory to the
Administrative Agent, an opinion letter of legal counsel to the Loan Parties, with respect to the
Loan Parties, which such opinions shall permit reliance by successors and permitted assigns of
each of the Administrative Agent and the Lenders;



          (l) the Administrative Agent shall have received a certificate, in form and
substance
satisfactory to the Administrative Agent, executed by an authorized officer of the Company
certifying that (i) no action, suit, investigation or proceeding is pending or, to the knowledge
of such officer, threatened in any court or before any arbitrator or governmental instrumentality
that purports to affect any Loan Party or any transaction contemplated by the Loan Documents,
which action, suit, investigation or proceeding could reasonably be expected to have a Material
Adverse Effect and (ii) immediately after giving effect to this Agreement (including the initial
extensions of credit hereunder), the other Loan Documents, and all the transactions contemplated
therein or thereby to occur on such date, (A) no Default or Event of Default exists, (B) all
representations and warranties contained herein and in the other Loan Documents are true and
correct, (C) Holdings and its Subsidiaries, taken as a whole, are Solvent and (D) each Borrower is
Solvent;



          (m) the Administrative Agent shall have received (i) a bring-down field exam with respect to
the Collateral in form and substance, and with results, reasonably satisfactory to the
Administrative Agent and (ii) an initial Borrowing Base
Certificate including, inter alia,
calculations demonstrating that Excess Availability as of the Closing Date is not less than the
Threshold Amount, in each case, after giving pro forma effect to (A) the payment of fees
and expenses of the Transactions, (B) the initial Revolving Loans made or to be made and Letters of
Credit issued or to be issued in connection with the Transactions and (C) the payment of the
Closing Date Dividend;



          (n) (i) the pro forma capital and ownership structure, the shareholding arrangements and the
management of the Company and its Subsidiaries (and all agreements relating thereto) shall be
reasonably satisfactory to the Administrative Agent and (ii) the Administrative Agent will be
reasonably



60









 




satisfied with the terms and amounts of any intercompany loans among the Loan Parties and the flow
of funds in connection with the closing;




          (o) the Administrative Agent shall have received, in form and substance reasonably
satisfactory thereto, all financial information, projections, budgets, business plans, cash flows
of the Borrowers and such other financial information as the Administrative Agent may request,
including, without limitation, (i) an opening pro forma balance sheet of the Borrowers as
of the Closing Date, (ii) (A) projected monthly balance sheets, income statements, and statements
of cash flows for the Borrowers and Excess Availability for the period from the Closing Date
through the end of the fiscal year ending December 31, 2011 and (B) projected quarterly balance
sheets, income statements, and statements of cash flow for the Borrowers and Excess Availability
for all periods thereafter during the term of this Agreement, in each case for subclauses (A) and
(B) above, with the results and assumptions set forth therein in form and substance satisfactory to
the Administrative Agent (and not inconsistent with information provided to the Lenders prior to
the Closing Date), (iii) any updates or modifications to the projected financial statements of the
Borrowers delivered to the Administrative Agent prior to the Closing Date, (iv) current agings of
Accounts, current perpetual Inventory records and roll forwards of Accounts and Inventory through
the Closing Date, together with supporting documentation, each in form and substance satisfactory
to the Administrative Agent and (v) copies of unaudited financial statements of the Borrowers for
the fiscal monthly period ended December 31, 2009;



          (p) the Administrative Agent shall have completed, to its satisfaction, all legal, tax,
business and other due diligence with respect to the business, assets, liabilities, operations and
condition (financial or otherwise) of the Company and its Subsidiaries (including, without
limitation, (i) receipt and review of third party inventory appraisals, in form and containing
assumptions and appraisal methods satisfactory to the Administrative Agent by an appraiser
acceptable to the Administrative Agent on which the Administrative Agent and the Lenders are
permitted to rely, (ii) field exams of the business and collateral of the Company and its
Subsidiaries in accordance with the Administrative Agent’s customary procedures and practices and
as otherwise required by the nature and circumstances of the businesses of the Company and its
Subsidiaries and (iii) receipt and review of all Material Contracts and Material Government
Contracts) in scope and determination satisfactory to the Administrative Agent in its sole
discretion;



          (q) the Administrative Agent shall have received, in form and substance reasonably
satisfactory thereto, statements demonstrating that the accounts payable of the Company and its
Subsidiaries are at a level and in a condition consistent with historical practices;



          (r) the Administrative Agent shall have received a certificate provided by the
Company that sets forth information required by the Patriot Act including, without limitation, the
identity of each Loan Party, the name and address of each Loan Party and other information that
will allow the Administrative Agent or any Lender, as applicable, to identify each Loan Party in
accordance with the Act, in form and substance satisfactory to the Administrative Agent and the
Lenders;



          (s) the Administrative Agent shall have received a table setting forth the sources and uses of
the initial Revolving Loans or initial Letters of Credit, accompanied by payment instructions;



          (t) all fees and expenses required to be paid hereunder, including without
limitation,
under the Fee Letter and all fees and expenses invoiced on or before the Closing Date shall have
been paid in full in cash or will be paid on the Closing Date; and



61









 





          (u) all other documents and legal matters in connection with the transactions contemplated by
this Agreement shall be reasonably satisfactory in form and substance to the Administrative Agent
and its counsel.


The Administrative Agent shall notify the Administrative Borrower and the Lenders that the
conditions specified in Section 5.1 have been satisfied or waived and that the Closing
Date has occurred, and such notice, absent manifest error, shall be conclusive and binding.




     Section 5.2 Conditions Precedent to All Loans and Letters of Credit. The obligation of
the Lenders to make the Loans, including the initial Loans, or of the Issuing Lender to issue any
Letter of Credit, including the initial Letters of Credit, is subject to the further satisfaction
of, or waiver of, immediately prior to or concurrently with the making of each such Loan or the
issuance of such Letter of Credit of each of the following conditions precedent:



          (a) all representations and warranties contained herein and in the other Loan Documents shall
be true and correct in all material respects with the same effect as though such representations
and warranties had been made on and as of the date of the making of each such Loan or providing
each such Letter of Credit and after giving effect thereto, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct on and as of such earlier date);
provided that any representation or warranty that is qualified as to “materiality”,
“Material Adverse Effect” or similar language shall be true and correct (after giving effect to any
qualification therein) in all respects on such respective dates;



          (b) no Default or Event of Default shall exist or have occurred and be continuing on and as of
the date of the making of such Loan or providing each such Letter of Credit and after giving effect
thereto; and



          (c) Total Outstandings (after giving effect to such requested Loan or Letter of Credit) shall
not exceed the lesser of (i) the Borrowing Base and (ii) the Aggregate Commitment.



ARTICLE 6

SECURITY INTEREST AND COLLECTION




     Section 6.1 Grant of Security Interest. To secure payment and performance of all
Obligations, each Loan Party hereby grants to the Administrative Agent, for itself and the benefit
of Secured Parties, a continuing security interest in, a Lien upon, and a right of set off against,
and hereby pledges to the Administrative Agent, for itself and the benefit of Secured Parties, as
security, of each Loan Party’s right, title and interest in and to the following, whether now owned
or hereafter acquired or existing, and wherever located (together with all other collateral
security for the respective Obligations at any time granted to or held or acquired by the
Administrative Agent or any Secured Party, collectively, the “Collateral”):



          (a) all Accounts;



          (b) all Inventory;



          (c) all deposit accounts and securities accounts;



          (d) all tax refunds, rebates or other similar payments or credits;



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          (e) all contracts, contract rights, general intangibles, including, without limitation, all
payment intangibles and Intellectual Property, commercial tort claims described on Schedule
6.1, chattel paper (including tangible and electronic chattel paper), documents, instruments
and supporting obligations;



          (f) all goods, including, without limitation, Equipment (including all vehicles and related
certificates of title);



          (g) all Real Property and fixtures;



          (h) all books and records and related data processing software; and



          (i) all documents;



          (j) all letters of credit, banker’s acceptances and similar instruments and
including
all letter-of-credit rights;



          (k) all supporting obligations and all present and future liens, security interests, rights,
remedies, title and interest in, to and in respect of other Collateral, including (i) rights and
remedies under or relating to guaranties, contracts of suretyship, letters of credit and credit
and other insurance related to the Collateral, (ii) rights of stoppage in transit, replevin,
repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party, (iii) goods described in invoices, documents, contracts or instruments with respect to, or
otherwise representing or evidencing, other Collateral, including returned, repossessed and
reclaimed goods, and (iv) deposits by and property of account debtors or other persons securing
the obligations of account debtors;



          (l) all (A) investment property (including securities, whether certificated
or
uncertificated, securities accounts, security entitlements, commodity contracts or commodity
accounts) and (B) monies, credit balances, deposits and other property of any Loan Party now or
hereafter held or received by or in transit to the Administrative Agent, any Lender or its
Affiliates or at any other depository or other institution from or for the account of any Loan
Party, whether for safekeeping, pledge, custody, transmission, collection or otherwise; and



          (m) all accessions to, substitutions for and all replacements, products and proceeds of any
of the items described in clauses (a) through (l) above, in any form, including without limitation
insurance proceeds, all claims against third parties for loss or damage to or destruction of or
other involuntary conversion of any kind or nature of any or all of the other Collateral, letters
of credit and letter of credit rights.



     Section 6.2 Perfection of Security Interests.



          (a) Each Loan Party irrevocably and unconditionally authorizes the Administrative Agent (or
its agent) to prepare and file at any time and from time to time such financing statements,
together with any amendments and continuations with respect thereto, with respect to the Collateral
naming the Administrative Agent or its designee as the secured party and such Loan Party as debtor,
as the Administrative Agent may require, and including any other information with respect to such
Loan Party or otherwise as the Administrative Agent may determine, and as may be required by
Article 9 of the UCC to perfect the security interest granted by such Loan Party to the
Administrative Agent under this Agreement which authorization shall apply to all financing
statements filed on, prior to or after the Closing Date, including, without limitation, any
financing statement that describes the Collateral as “all personal property” or “all assets” of
such Loan Party or that describes the Collateral in some other manner as



63









 




the Administrative Agent reasonably deems necessary. Each Loan Party hereby ratifies and approves
all financing statements naming the Administrative Agent or its designee as secured party and such
Loan Party, as the case may be, as debtor with respect to the Collateral (and any amendments with
respect to such financing statements) filed by or on behalf of the Administrative Agent prior to
the Closing Date and ratifies and confirms the authorization of the Administrative Agent to file
such financing statements (and amendments, if any). Each Loan Party hereby authorizes the
Administrative Agent to adopt on behalf of such Loan Party any symbol required for authenticating
any electronic filing. In the event that the description of the Collateral in any financing
statement naming the Administrative Agent or its designee as the secured party and any Loan Party
as debtor includes assets and properties of such Loan Party that do not at any time constitute
Collateral, whether hereunder, under any of the other Loan Documents or otherwise, the filing of
such financing statement shall nonetheless be deemed authorized by such Loan Party to the extent of
the Collateral included in such description and it shall not render the financing statement
ineffective as to any of the Collateral or otherwise affect the financing statement as it applies
to any of the Collateral. In no event shall any Loan Party at any time file, or permit or cause to
be filed, any continuation, amendment or termination with respect to any financing statement naming
the Administrative Agent or its designee as secured party and such Loan Party as debtor.




          (b) No Loan Party has any chattel paper (whether tangible or electronic) or instruments as of
the Closing Date, except as set forth on Schedule 6.2(b). In the event that any Loan Party
shall be entitled to or shall receive any chattel paper or instrument after the Closing Date, Loan
Parties shall promptly (and in any event within two (2) Business Days or such longer period as the
Administrative Agent may agree) notify the Administrative Agent thereof in writing. Promptly upon
the receipt thereof by or on behalf of any Loan Party (including by any agent or representative),
such Loan Party shall deliver, or cause to be delivered, to the Administrative Agent, all such
tangible chattel paper and instruments, accompanied by such instruments of transfer or assignment
duly executed in blank as the Administrative Agent may from time to time specify, in each case
except as the Administrative Agent may otherwise agree. At the Administrative Agent’s option, each
Loan Party shall, or the Administrative Agent may at any time on behalf of any Loan Party, cause
the original of any such instrument or chattel paper to be conspicuously marked in a form and
manner acceptable to the Administrative Agent with the following legend referring to chattel paper
or instruments as applicable: “This [chattel paper][instrument] is subject to the security
interest of Wachovia Bank, National Association, as the Administrative Agent and any sale,
transfer, assignment or encumbrance of this [chattel paper][instrument] violates the rights of
such secured party.”



          (c) In the event that any Loan Party shall at any time hold or acquire an interest in any
electronic chattel paper or any “transferable record” (as such term is defined in Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the
Uniform Electronic Transactions Act as in effect in any relevant jurisdiction), such Loan Party
shall promptly (and in any event within two (2) Business Days or such longer period as the
Administrative Agent may agree) notify the Administrative Agent thereof in writing. Promptly upon
the Administrative Agent’s request, such Loan Party shall take, or cause to be taken, such actions
as the Administrative Agent may request to give the Administrative Agent control of such electronic
chattel paper under Section 9-105 of the UCC and control of such transferable record under Section
201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, as in effect in such jurisdiction.



          (d) No Loan Party owns or holds, directly or indirectly, beneficially or as record owner or
both, any deposit account, as of the Closing Date, or other similar account with any bank or other
financial institution, as of the Closing Date, in each case except for the deposit accounts
identified on Schedule 8.10. Subject to Section 6.3(a), Loan Parties shall not,
directly or indirectly, after the Closing Date open, establish or maintain any deposit account
(other than an Excluded Bank Account)




64












 




unless on or before the opening of such deposit account, such Loan Party shall have obtained a
Deposit Account Control Agreement with respect to such deposit account, duly authorized, executed
and delivered by such Loan Party and the bank at which such deposit account is opened and
maintained.




          (e) No Loan Party owns or holds, directly or indirectly, beneficially or as record owner or
both, any investment property, as of the Closing Date, or have any investment account, securities
account, commodity account, futures account or other similar account with any bank or other
financial institution or other securities intermediary, commodity intermediary or futures
intermediary as of the Closing Date, in each case except for investment, securities and commodities
accounts identified on Schedule 8.10 and securities identified on Schedule 8.12.





          (i) In the event that any Loan Party shall be entitled to or shall at any
time
after the Closing Date hold or acquire any certificated securities, such Loan Party shall
promptly (and in any event within five (5) Business Days) endorse, assign and deliver the
same to the Administrative Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Administrative Agent may from time to time specify. If any
securities, now or hereafter acquired by any Loan Party are uncertificated and are issued to
such Loan Party or its nominee directly by the issuer thereof, such Loan Party shall
promptly (and in any event within five (5) Business Days) notify the Administrative Agent
thereof and shall as the Administrative Agent may specify, either cause the issuer to agree
to comply with instructions from the Administrative Agent as to such securities, without
further consent of any Loan Party or such nominee, or arrange for the Administrative Agent
to become the registered owner of the securities.




          (ii) Loan Parties shall not, directly or indirectly, after the Closing Date open,
establish or maintain any investment account, securities account, commodity account, futures
account or any other similar account (other than an Excluded Bank Account) with any
securities intermediary, commodity intermediary or futures intermediary unless each of the
following conditions is satisfied: the Administrative Agent shall have received prior
written notice of the intention of such Loan Party to open or establish such account which
notice shall specify in reasonable detail and specificity the name of the account, the owner
of the account, the name and address of the securities intermediary, commodity intermediary
or futures intermediary at which such account is to be opened or established, the individual
at such intermediary with whom such Loan Party is dealing and the purpose of the account,
the securities intermediary or commodity intermediary (as the case may be) where such
account is opened or maintained shall be reasonably acceptable to the Administrative Agent,
and on or before the opening of such investment account, securities account or other similar
account with a securities intermediary, commodity intermediary or futures intermediary, such
Loan Party shall as the Administrative Agent may specify either (A) execute and deliver, and
cause to be executed and delivered to the Administrative Agent, an Investment Property
Control Agreement with respect thereto duly authorized, executed and delivered by such Loan
Party and such securities intermediary, commodity intermediary or futures intermediary or
(B) arrange for the Administrative Agent to become the entitlement holder with respect to
such investment property on terms and conditions acceptable to the Administrative Agent.



          (f) Loan Parties are not the beneficiary or otherwise entitled to any right to payment under
any letter of credit, banker’s acceptance or similar instrument as of the Closing Date. In the
event that any Loan Party shall be entitled to or shall receive any right to payment under any
letter of credit, banker’s acceptance or any similar instrument whether as beneficiary thereof or
otherwise after the Closing Date, such Loan Party shall promptly (and in any event within two (2)
Business Days or such longer period as the Administrative Agent may agree) notify the
Administrative Agent thereof in writing.








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Such Loan Party shall immediately, as the Administrative Agent may specify, either (i) deliver, or
cause to be delivered to the Administrative Agent, with respect to any such letter of credit,
banker’s acceptance or similar instrument, the written agreement of the issuer and any other
nominated person obligated to make any payment in respect thereof (including any confirming or
negotiating bank), in form and substance reasonably satisfactory to the Administrative Agent,
consenting to the assignment of the proceeds of the letter of credit to the Administrative Agent
by such Loan Party and agreeing to make all payments thereon directly to the Administrative Agent
or as the Administrative Agent may otherwise direct or (ii) cause the Administrative Agent to
become, at the Borrowers’ expense, the transferee beneficiary of the letter of credit, banker’s
acceptance or similar instrument (as the case may be).




          (g) The Loan Parties do not have any commercial tort claims as of the Closing Date. In the
event that any Loan Party shall at any time after the Closing Date have any such commercial tort
claims (excluding any commercial tort claim where a Responsible Officer of such Loan Party has
reasonably determined that the amount likely to be recovered in respect of such claim will not
exceed $500,000), such Loan Party shall promptly (and in any event within two (2) Business Days or
such longer period as the Administrative Agent may agree) notify the Administrative Agent thereof
in writing, which notice shall (i) set forth in reasonable detail the basis for and nature of such
commercial tort claim and (ii) include the express grant by such Loan Party to the Administrative
Agent of a security interest in such commercial tort claim (and the proceeds thereof). In the event
that such notice does not include such grant of a security interest, the sending thereof by such
Loan Party to the Administrative Agent shall be deemed to constitute such grant to the
Administrative Agent. Upon the sending of such notice, any commercial tort claim described therein
shall constitute part of the Collateral and shall be deemed included therein. Without limiting the
authorization of the Administrative Agent provided in Section 6.2(a) or otherwise arising
by the execution by such Loan Party of this Agreement or any of the other Loan Documents, the
Administrative Agent is hereby irrevocably authorized from time to time and at any time to file
such financing statements naming the Administrative Agent or its designee as secured party and such
Loan Party as debtor, or any amendments to any financing statements, covering any such commercial
tort claim as Collateral. In addition, each Loan Party shall promptly upon the Administrative
Agent’s request, execute and deliver, or cause to be executed and delivered, to the Administrative
Agent such other agreements, documents and instruments as the Administrative Agent may reasonably
require in connection with such commercial tort claim.




          (h) Material Government Contracts.





          (i) No Loan Party is party to any Material Government Contract except for
Material Government Contracts identified on Schedule 8.15 (as such schedule may be
updated from time to time after the Closing Date to reflect (x) the addition of any new
Material Government Contracts entered into after the Closing Date and (y) the deletion of
any Material Government Contracts upon the expiration or termination thereof after the
Closing Date or if any scheduled Government Contract is no longer a Material Government
Contract). In the event that any Loan Party shall at any time after the Closing Date become
a party to any Material Government Contract, such Loan Party shall promptly (and in any
event within five (5) Business Days) deliver to the Administrative Agent (A) a copy of such
Material Government Contract and (B) a duly executed and completed Instrument of Assignment
and Notice of Assignment with respect to such Material Government Contract. In addition, in
the event that any Material Government Contract is terminated or amended in any manner
materially adverse to the Company and its Subsidiaries, the Loan Parties shall promptly (and
in any event within five (5) Business Days) notify the Administrative Agent thereof in
accordance with Section 9.6(b)(ii).




          (ii) If (A) at any time, Excess Availability is less than the Filing Threshold
Amount, (B) a Material Event of Default shall have occurred and be continuing or (C) any
other



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Event of Default (other than a Material Event of Default) shall have occurred and be
continuing without waiver or cure for sixty (60) consecutive days after the occurrence
thereof (which sixty (60) consecutive days shall be inclusive of any applicable grace period
with respect to such Event of Default required to elapse in order for the corresponding
Default, if any, to mature into such Event of Default), then, in any such case, the
Administrative Agent may deliver all Instruments of Assignment and all Notices of Assignment
to the applicable U.S. Governmental Authority for each Material Government Contract and the
Loan Parties shall use their commercially reasonable efforts to have such Notices of
Assignment acknowledged in writing by the applicable U.S. Governmental Authority.



          (i) Except as set forth in Schedule 8.2, the Loan Parties do not have any
goods,
documents of title or other Collateral in the custody, control or possession of a third party as
of the Closing Date, except for goods located in the United States in transit to a location of a
Loan Party set forth in Schedule 8.2 in the ordinary course of business of such Loan Party
in the possession of the carrier transporting such goods. In the event that any goods, documents
of title or other Collateral are at any time after the Closing Date in the custody, control or
possession of such carriers, Loan Parties shall promptly (and in any event within two (2) Business
Days or such longer period as the Administrative Agent may agree) notify the Administrative Agent
thereof in writing. Promptly upon the Administrative Agent’s request, Loan Parties shall take all
reasonable steps to deliver to the Administrative Agent a Collateral Access Agreement duly
authorized, executed and delivered by such person and the Loan Party that is the owner of such
Collateral.




          (j) Loan Parties shall take any other actions reasonably requested
by the
Administrative Agent from time to time to cause the attachment, perfection and first priority of,
and the ability of the Administrative Agent to enforce, the security interest of the
Administrative Agent in any and all of the Collateral (subject only to the Liens permitted under
Section 10.2), including, without limitation, (i) executing, delivering and, where
appropriate, filing financing statements and amendments relating thereto under the UCC and other
applicable law, to the extent, if any, that any Loan Party’s signature thereon is required
therefor, (ii) causing the Administrative Agent’s name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition to attachment, perfection
or priority of, or ability of the Administrative Agent to enforce, the security interest of the
Administrative Agent in such Collateral, (iii) complying with any provision of any statute,
regulation or treaty of the United States as to any Collateral if compliance with such provision
is a condition to attachment, perfection or priority of, or ability of the Administrative Agent to
enforce, the security interest of the Administrative Agent in such Collateral, and (iv) obtaining
the consents and approvals of any Governmental Authority or third party, including, without
limitation, any consent of any licensor, lessor or other person obligated on Collateral.




     Section 6.3 Collection of Accounts.



          (a) The Borrowers shall promptly (and in any event within two (2) Business Days or such
longer period as the Administrative Agent may agree) deposit and direct their respective account
debtors to directly remit all payments on Accounts and all payments constituting proceeds of
Inventory or other Collateral in the identical form in which such payments are made, whether by
cash, check or other manner, into one or more deposit accounts of the Borrowers subject to a
Deposit Account Control Agreement (the “Blocked Accounts”). Each Deposit Account Control
Agreement entered into with respect to a Blocked Account shall provide that all payments to the
Blocked Accounts shall be swept daily to the Administrative Agent Payment Account. Each Loan Party
agrees that all payments made to such Blocked Accounts or other funds received and collected by
the Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of
Inventory or other Collateral or otherwise shall be treated as payments to the Administrative
Agent and the Lenders in respect of the Obligations and









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therefore shall constitute the property of the Administrative Agent and the Lenders to the extent
of then outstanding Obligations. All payments to the Blocked Accounts shall be swept daily to the
Administrative Agent Payment Account and applied to repay the Obligations in the manner set forth
in Section 3.5. Notwithstanding the foregoing, amounts on deposit in the MAR-VEL Bank
Account shall not be required to be swept to the Administrative Agent Payment Account until an
Event of Default shall have occurred and be continuing.




          (b) For purposes of calculating (i) the amount of the Loans available to each Borrower and
(ii) interest on the Obligations, such payments will be applied (conditional upon final collection)
to the Obligations on the Business Day of receipt by the Administrative Agent of immediately
available funds in the Administrative Agent Payment Account provided such payments and notice
thereof are received in accordance with the Administrative Agent’s usual and customary practices as
in effect from time to time and within sufficient time to credit such Borrower’s loan account on
such day, and if not, then on the next Business Day.




          (c) The Borrowers, promptly (and in any event within two (2) Business Days or such longer
period as the Administrative Agent may agree) upon the request of the Administrative Agent, shall
deliver to the Administrative Agent a schedule of all deposit accounts (other than deposit
accounts described in clause (A) of the definition of Excluded Bank Account), that are maintained
by the Loan Parties, which schedule shall include, with respect to each depository (i) the name
and address of such depository, (ii) the account name and number(s) maintained with such
depository and (iii) a contact person at such depository.




          (d) Each Loan Party and their respective employees, agents and Subsidiaries shall, acting as
trustee for the Administrative Agent, receive, as the property of the Administrative Agent, any
monies, checks, notes, drafts or any other payment relating to and/or proceeds of Collateral which
come into their possession or under their control and immediately upon receipt thereof, shall
deposit or cause the same to be deposited in a Blocked Account, or remit the same or cause the
same to be remitted, in kind, to the Administrative Agent. In no event shall the same be
commingled with any Loan Party’s other funds. The Borrowers agree to reimburse the Administrative
Agent on demand for any amounts owed or paid to any bank or other financial institution at which a
Blocked Account or any other deposit account or investment account is established or any other
bank, financial institution or other person involved in the transfer of funds to or from the
Blocked Accounts arising out of the Administrative Agent’s payments to or indemnification of such
bank, financial institution or other person. The obligations of the Borrowers to reimburse the
Administrative Agent for such amounts pursuant to this Section 6.3 shall survive the
termination of this Agreement.




ARTICLE 7

COLLATERAL REPORTING AND COVENANTS




     Section 7.1 Collateral Reporting.



          (a) The Administrative Borrower shall provide the Administrative Agent with the following
documents in a form satisfactory to the Administrative Agent:





          (i) as soon as available after the end of each month (but in any event
within
ten (10) Business Days after the end thereof), on a monthly basis (A) a Borrowing Base
Certificate, (B) perpetual inventory reports and inventory reports by location and category
(and including the amounts of Inventory and the Value thereof at any leased locations and
at premises of warehouses, processors or other third parties), (C) agings of accounts
receivable (together with



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a reconciliation to the previous month’s aging and general ledger) and agings of accounts
payable (and including information indicating the amounts owing to owners and lessors of
leased premises, warehouses, processors and other third parties from time to time in
possession of any Collateral) and (D) schedules of sales made, credits issued and cash
received, as well as purchases made; and




          (ii) such other reports as to the Collateral as the Administrative Agent shall
reasonably request from time to time.



          (b) If any Loan Party’s records or reports of the Collateral are prepared or maintained by an
accounting service, contractor, shipper or other agent, such Loan Party hereby irrevocably
authorizes such service, contractor, shipper or agent to deliver such records, reports, and
related documents to the Administrative Agent and to follow the Administrative Agent’s
instructions with respect to further services at any time that an Event of Default exists or has
occurred and is continuing.




          (c) If Excess Availability falls below the Threshold Amount or an Event of Default exists or
has occurred and is continuing, the Administrative Agent will require more frequent reporting of
certain of the foregoing information set forth in this Section 7.1, such frequency to be
determined in the Administrative Agent’s reasonable discretion (including, without limitation,
delivery of weekly Borrowing Base Certificates).




     Section 7.2 Accounts Covenants.



          (a) The Administrative Borrower shall notify the Administrative Agent promptly of: (i) any
material delay in any Borrower’s performance of any of its material obligations to any account
debtor or the assertion of any material claims, offsets, defenses or counterclaims by any account
debtor, or any material disputes with account debtors, in each case, where the amount in
controversy is $500,000 or more, or any settlement, adjustment or compromise thereof, (ii) all
material adverse information known to any Loan Party relating to the financial condition of any
account debtor obligated in respect of Accounts having an aggregate value of $500,000 or more and
(iii) any event or circumstance which, to the knowledge of any Responsible Officer of any Loan
Party, would cause the Administrative Agent to consider any then existing Accounts having a value
of $500,000 or more as no longer constituting Eligible Accounts. No credit, discount, allowance or
extension or agreement for any of the foregoing shall be granted to any account debtor, except in
the ordinary course of a Loan Party’s business in accordance with practices and policies or as
otherwise disclosed to the Administrative Agent. So long as no Event of Default has occurred and is
continuing, Loan Parties may settle, adjust or compromise any claim, offset, counterclaim or
dispute with any account debtor. At any time that an Event of Default has occurred and is
continuing, the Administrative Agent shall, at its option, have the exclusive right to settle,
adjust or compromise any claim, offset, counterclaim or dispute with account debtors or grant any
credits, discounts or allowances.




          (b) The Administrative Agent shall have the right at any time or times, in the name of any
applicable Loan Party, in the Administrative Agent’s name or in the name of a nominee of the
Administrative Agent, to verify the validity, amount or any other matter relating to any Accounts
or other Collateral, by mail, telephone, facsimile transmission or otherwise; provided,
that so long as no Default or Event of Default has occurred and is continuing, prior to conducting
any such verifications, the Administrative Agent shall consult with the Borrowers and the
Administrative Agent may use third party government billing systems (“My Invoice”) or another
similar system to make such verifications.




     Section 7.3 Inventory Covenants; Appraisals. With respect to the Inventory:








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          (a) each Loan Party shall at all times maintain inventory records reasonably satisfactory to
the Administrative Agent, keeping correct and accurate records itemizing and describing the kind,
type, quality and quantity of Inventory and such Loan Party’s cost therefore and daily withdrawals
therefrom and additions thereto;




          (b) Loan Parties shall conduct a physical count of the Inventory at least once each year but
at any time or times as the Administrative Agent may request upon the occurrence and during the
continuation of an Event of Default or if Excess Availability falls below the Threshold Amount,
and promptly following such physical inventory shall supply the Administrative Agent with a report
in the form and with such specificity as may be satisfactory to the Administrative Agent
concerning such physical count;




          (c) Loan Parties shall not remove any Inventory from the locations set forth or permitted
herein, without the prior written consent of the Administrative Agent, except for sales of
Inventory in the ordinary course of its business and except to move Inventory directly from one
location set forth or permitted herein to another such location and except for Inventory shipped
from the manufacturer thereof to such Loan Party which is in transit to the locations set forth or
permitted herein;




          (d) From time to time as requested by the Administrative Agent, at the cost and expense of
the Borrowers, the Administrative Agent shall be entitled to obtain an Inventory appraisal, which
appraisal shall be in form, scope and methodology acceptable to the Administrative Agent and such
appraisal shall be addressed to the Administrative Agent and shall expressly permit reliance
thereon by Administrative Agent and the Lenders; provided, that the Borrowers shall be
required to incur the costs and expenses of not more than one (1) such appraisal during any twelve
(12) consecutive fiscal month period; provided, further, that if Excess
Availability is less than the Threshold Amount or upon the occurrence and during the continuation
of an Event of Default, there shall be no limit on the number of appraisals which may be requested
by the Administrative Agent, each at the Borrowers’ expense;




          (e) Loan Parties shall produce, use, store and maintain the Inventory with all reasonable
care and caution and in accordance with applicable standards of any insurance and in conformity
with applicable laws (including the requirements of the Federal Fair Labor Standards Act of 1938,
as amended and all rules, regulations and orders related thereto);




          (f) none of the Inventory or other Collateral constitutes farm products or the proceeds
thereof;




          (g) each Loan Party assumes all responsibility and liability arising from or relating to the
production, use, sale or other disposition of the Inventory;




          (h) Loan Parties shall keep the Inventory in good and marketable condition;




          (i) Loan Parties shall not sell Inventory to any customer on approval, or any basis
which entitles the customer to return or may obligate any Loan Party to repurchase such Inventory;
and




          (j) Loan Parties shall not, without prior written notice to the Administrative Agent
or the specific identification of such Inventory in a report with respect thereto provided by the
Administrative Borrower to the Administrative Agent pursuant to Section 7.1(a), acquire or
accept any Inventory on consignment or approval.




     Section 7.4 Equipment and Real Property Covenants. With respect to the
Equipment and Real Property: (a) Loan Parties shall keep the Equipment in good order, repair,
running and marketable








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condition (ordinary wear and tear excepted); (b) Loan Parties shall use the Equipment and Real
Property with all reasonable care and caution and in accordance with applicable standards of any
insurance and in conformity with all applicable laws; (c) the Equipment is and shall be used in
the business of Loan Parties and not for personal, family, household or farming use; (d) Loan
Parties shall not remove any Equipment from the locations set forth or permitted herein, except to
the extent necessary to have any Equipment repaired or maintained in the ordinary course of its
business or to move Equipment directly from one location set forth or permitted herein to another
such location and except for the movement of motor vehicles used by or for the benefit of such
Loan Party in the ordinary course of business; (e) the Equipment is now and shall remain personal
property and Loan Parties shall not permit any of the Equipment to be or become a part of or
affixed to real property; and (f) each Loan Party assumes all responsibility and liability arising
from the use of the Equipment and Real Property.




     Section 7.5 Power of Attorney. Each Loan Party hereby irrevocably designates and
appoints the Administrative Agent (and all persons designated by the Administrative Agent) as such
Loan Party’s true and lawful attorney-in-fact, and authorizes the Administrative Agent, in such
Loan Party’s or the Administrative Agent’s name, to: (a) at any time an Event of Default has
occurred and is continuing (i) demand payment on Accounts or other Collateral, (ii) enforce payment
of Accounts by legal proceedings or otherwise, (iii) exercise all of such Loan Party’s rights and
remedies to collect any Account or other Collateral, (iv) sell or assign any Account upon such
terms as permitted by applicable law, for such amount and at such time or times as the
Administrative Agent deems advisable, (v) settle, adjust, compromise, extend or renew an Account,
(vi) discharge and release any Account, (vii) prepare, file and sign such Loan Party’s name on any
proof of claim in bankruptcy or other similar document against an account debtor or other obligor
in respect of any Accounts or other Collateral, (viii) notify the post office authorities to change
the address for delivery of remittances from account debtors or other obligors in respect of
Accounts or other proceeds of Collateral to an address designated by the Administrative Agent, and
open and dispose of all mail addressed to such Loan Party and handle and store all mail relating to
the Collateral; (ix) endorse such Loan Party’s name upon any chattel paper, document, instrument,
invoice, or similar document or agreement relating to any Account or any goods pertaining thereto
or any other Collateral, including any warehouse or other receipts, or bills of lading and other
negotiable or non-negotiable documents, (x) clear Inventory the purchase of which was financed with
a Letter of Credit through U.S. Customs or foreign export control authorities in such Loan Party’s
name, the Administrative Agent’s name or the name of the Administrative Agent’s designee, and to
sign and deliver to customs officials powers of attorney in such Loan Party’s name for such
purpose, and to complete in such Loan Party’s or the Administrative Agent’s name, any order, sale
or transaction, obtain the necessary documents in connection therewith and collect the proceeds
thereof; (xi) sign such Loan Party’s name on any verification of Accounts and notices thereof to
account debtors or any secondary obligors or other obligors in respect thereof and (xii) do all
acts and things which are necessary, in the Administrative Agent’s determination, to fulfill such
Loan Party’s obligations under this Agreement and the other Loan Documents and (b) at any time, to
(i) take control in any manner of any item of payment in respect of Accounts or constituting
Collateral or otherwise received in or for deposit in the Blocked Accounts or otherwise received by
the Administrative Agent or any Lender, (ii) have access to any lockbox or postal box into which
remittances from account debtors or other obligors in respect of Accounts or other proceeds of
Collateral are sent or received, and (iii) endorse such Loan Party’s name upon any items of payment
in respect of Accounts or constituting Collateral or otherwise received by the Administrative Agent
and any Lender and deposit the same in the Administrative Agent Payment Account for application to
the Obligations. Each Loan Party hereby releases the Administrative Agent and the Lenders and their
respective officers, employees and designees from any liabilities arising from any act or acts
under this power of attorney and in furtherance thereof, whether of omission or commission, except
to the extent resulting from the Administrative Agent’s or any Lender’s own gross negligence or
willful misconduct as determined pursuant to a final non-appealable order of a court of competent
jurisdiction.



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     Section 7.6 Right to Cure. The Administrative Agent may, upon notice to the
Administrative Borrower and upon the occurrence and during the continuation of an Event of Default,
(a) cure any default by any Loan Party under any material agreement with a third party that affects
the Collateral, its value or the ability of the Administrative Agent to collect, sell or otherwise
dispose of the Collateral or the rights and remedies of the Administrative Agent or any Lender
therein or the ability of any Loan Party to perform its obligations hereunder or under any of the
other Loan Documents, (b) pay or bond on appeal any judgment entered against any Loan Party, (c)
discharge taxes, liens, security interests or other encumbrances at any time levied on or existing
with respect to the Collateral and (d) pay any amount, incur any expense or perform any act which,
in the Administrative Agent’s judgment, is necessary or appropriate to preserve, protect, insure or
maintain the Collateral and the rights of the Administrative Agent and the Lenders with respect
thereto. The Administrative Agent may add any amounts so expended to the Obligations and charge any
Borrower’s account therefor, such amounts to be repayable by the Borrowers on demand. The
Administrative Agent and the Lenders shall be under no obligation to effect such cure, payment or
bonding and shall not, by doing so, be deemed to have assumed any obligation or liability of any
Loan Party. Any payment made or other action taken by the Administrative Agent or any Lender under
this Section 7.6 shall be without prejudice to any right to assert an Event of Default
hereunder and to proceed accordingly.



     Section 7.7 Access to Premises; Field Audits. From time to time as requested by the
Administrative Agent, at the cost and expense of the Borrowers, (a) the Administrative Agent or its
designee shall have complete access to all of each Loan Party’s premises during normal business
hours and after reasonable prior notice to the Administrative Borrower, or at any time and without
notice to the Administrative Borrower if an Event of Default has occurred and is continuing, for
the purposes of inspecting, verifying and auditing the Collateral and all of each Loan Party’s
books and records, including the Records, and (b) each Loan Party shall promptly furnish to the
Administrative Agent such copies of such books and records or extracts therefrom as the
Administrative Agent may request, and the Administrative Agent or any Lender or the Administrative
Agent’s designee may use during normal business hours such of any Loan Party’s personnel,
equipment, supplies and premises as may be reasonably necessary for the foregoing and, if an Event
of Default has occurred and is continuing, for the collection of Accounts and realization of other
Collateral. In addition to the foregoing, the Administrative Agent shall be permitted to conduct no
more than two (2) field examinations (it being understood that for the purposes hereof a single
field examination may consist of examinations conducted at multiple relevant sites and involving
each of the relevant Loan Parties and their assets) during any twelve (12) consecutive fiscal month
period, each at the Borrowers’ expense; provided that if Excess Availability is less than the
Threshold Amount or upon the occurrence and during the continuation of an Event of Default, there
shall be no limit on the number of field examinations which may be conducted by the Administrative
Agent, each at the Borrowers’ expense.



ARTICLE 8

REPRESENTATIONS AND WARRANTIES




     Each Loan Party, on behalf of itself and each of its Subsidiaries, hereby represents and
warrants to the Administrative Agent, the Lenders and the Issuing Lender the following (which
shall survive the execution and delivery of this Agreement):



     Section 8.1 Corporate Existence, Power and Authority. Each Loan Party and each
Subsidiary thereof is a corporation, limited liability company, limited partnership or other legal
entity duly organized and in good standing under the laws of its jurisdiction of organization and
is duly qualified as a foreign corporation, limited liability company, limited partnership, or
other legal entity and in good standing in all states or other jurisdictions where the nature and
extent of the business transacted by it or the ownership of assets makes such qualification
necessary, except for those jurisdictions in which the



72









 




failure to so qualify would not have a Material Adverse Effect. The execution, delivery and
performance of this Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereunder and thereunder (a) are all within each Loan Party’s corporate, limited
liability company, limited partnership or other comparable powers, (b) have been duly authorized,
(c) are not in contravention of law or the terms of any Loan Party’s certificate of incorporation,
certificate of formation, bylaws, operating agreement, limited partnership agreement or other
organizational documentation, or any indenture, agreement, undertaking or Material Contract to
which any Loan Party is a party or by which any Loan Party or its property are bound and (d) will
not result in the creation or imposition of, or require or give rise to any obligation to grant,
any Lien upon any property of any Loan Party (other than Liens in favor of the Administrative Agent
on behalf of itself and the Secured Parties). This Agreement and the other Loan Documents to which
any Loan Party is a party constitute legal, valid and binding obligations of such Loan Party
enforceable in accordance with their respective terms; provided that the enforceability hereof and
thereof is subject in each case to general principles of equity and to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors’ rights generally.




     Section 8.2 Name; State of Organization; Chief Executive Office; Collateral
Locations.



          (a) The exact legal name of each Loan Party as of the Closing Date is as set forth on the
signature page of this Agreement and in Schedule 8.2. No Loan Party has, during the five
(5) year period ending on the date of this Agreement, been known by or used any other corporate or
fictitious name or been a party to any merger or consolidation, or acquired all or substantially
all of the assets of any Person, or acquired any of its property or assets out of the ordinary
course of business, except as set forth in Schedule 8.2.




          (b) As of the Closing Date, each Loan Party is an organization of the type and organized in
the jurisdiction set forth in Schedule 8.2. Schedule 8.2 accurately sets forth as
of the Closing Date the organizational identification number of each Loan Party or accurately
states that such Loan Party has none and accurately sets forth the federal employer identification
number of each Loan Party.




          (c) As of the Closing Date, the chief executive office and primary mailing address of each
Loan Party and each Loan Party’s Records concerning Accounts and all other Collateral locations are
set forth in Schedule 8.2.




     Section 8.3 Financial Statements; No Material Adverse Effect. All financial
statements relating to the Borrowers which have been or may hereafter be delivered by any Borrower
to the Administrative Agent and the Lenders have been prepared on a combined basis in accordance
with GAAP (except as to any (a) monthly financial statements and (b) quarterly financial
statements, to the extent such quarterly statements are subject to normal quarter-end and year-end
adjustments and do not include any notes) and fairly present in all material respects the combined
financial condition and the results of operation of the Borrowers as at the dates and for the
periods set forth therein. Since December 31, 2008, there has been no act, condition or event
having, or that could reasonably be expected to have, a Material Adverse Effect. The projections
that have been delivered to the Administrative Agent pursuant to Section 5.1(o) or any
projections hereafter delivered to the Administrative Agent have been prepared in light of the
past operations of the businesses of Borrowers and are based upon estimates and assumptions stated
therein, all of which the Borrowers have determined to be reasonable and fair in light of then
current conditions and current facts and reflect the good faith and reasonable estimates of the
Borrowers of the future financial performance of the Borrowers and of the other information
projected therein for the periods set forth therein (it being understood that actual results may
differ from those set forth in such projections).



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     Section 8.4 Priority of Liens; Title to Properties. The Liens granted to the
Administrative Agent under this Agreement and the other Loan Documents constitute valid and
perfected first priority Liens and security interests in and upon the Collateral, subject only to
the Liens permitted under Section 10.2. Each Loan Party has good and marketable fee simple
title to or valid leasehold interests in all of its Real Property and good, valid and merchantable
title to all of its other properties and assets, subject only to the Liens permitted under
Section 10.2.



     Section 8.5 Tax Returns. Each Loan Party and each Subsidiary thereof has filed, or
caused to be filed, in a timely manner all Federal and all material State, county, local and
foreign income, excise, property and other material tax returns which are required to be filed by
it. All information in such tax returns, reports and declarations is complete and accurate in all
material respects. Each Loan Party and each Subsidiary thereof has paid or caused to be paid all
taxes due and payable or claimed due and payable in any assessment received by it, except taxes
the validity of which are being contested in good faith by appropriate proceedings diligently
pursued and available to such Loan Party or such Subsidiary and with respect to which adequate
reserves have been set aside on its books. Adequate provision has been made for the payment of all
accrued and unpaid Federal, State, county, local, foreign and other taxes whether or not yet due
and payable and whether or not disputed.



     Section 8.6 Litigation. Except for matters existing on the Closing Date and as set
forth in Schedule 8.6, (a) there is no investigation by any Governmental Authority
pending, or to the knowledge of any Responsible Officer of any Loan Party threatened, against or
affecting any Loan Party, its or their assets or business and (b) there is no action, suit,
proceeding or claim by any Person pending, or to the best of any Loan Party’s knowledge
threatened, against any Loan Party or any Subsidiary thereof or its or their assets or goodwill,
or against or affecting any transactions contemplated by this Agreement before any court or
arbitrator or any governmental body, agency or official, in each case, which if adversely
determined against such Loan Party has or could reasonably be expected to have a Material Adverse
Effect.




	 	 	Section 8.7 Compliance with Other Agreements and Applicable Laws.





          (a) The Loan Parties and their Subsidiaries are not in default in any respect under, or in
violation in any respect of the terms of, any Material Contract or any Material Government
Contract. Loan Parties are in compliance with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority relating to their respective businesses,
including, without limitation, those set forth in or promulgated pursuant to the Occupational
Safety and Health Act of 1970, as amended, the Fair Labor Standards Act of 1938, as amended,
ERISA, the Code, as amended, and the rules and regulations thereunder, and all Environmental Laws,
except for noncompliance which could not reasonably be expected to have a Material Adverse Effect.




          (b) The Loan Parties and their Subsidiaries have obtained all permits, licenses, approvals,
consents, certificates, orders or authorizations of any Governmental Authority required for the
lawful conduct of its business (the “Permits”), except for those the failure to obtain
could not reasonably be expected to have a Material Adverse Effect. All such Permits are valid and
subsisting and in full force and effect. There are no actions, claims or proceedings pending or, to
the knowledge of any Responsible Officer of any Loan Party, threatened that seek the revocation,
cancellation, suspension or modification of any such Permits.




     Section 8.8 Environmental Compliance.



          (a) No Loan Party and no Subsidiary thereof has generated, used, stored, treated,
transported, manufactured, handled, produced or disposed of any Hazardous Materials, on or off its









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premises (whether or not owned by it) in any manner which at any time violates in any respect any
applicable Environmental Law or Permit, except any violation which could not reasonably be
expected to have a Material Adverse Effect. The operations of each Loan Party and each Subsidiary
thereof comply with all Environmental Laws and all Permits, except for noncompliance which could
not reasonably be expected to have a Material Adverse Effect.




          (b) There has been no investigation by any Governmental Authority or any proceeding,
complaint, order, directive, claim, citation or notice by any Governmental Authority or any other
person nor is any pending or, to the knowledge of any Responsible Officer of any Loan Party,
threatened, with respect to any non-compliance with or violation of the requirements of any
Environmental Law by any Loan Party or any Subsidiary thereof or the release, spill or discharge,
threatened or actual, of any Hazardous Material or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous Materials or any
other environmental, health or safety matter, which adversely affects or could reasonably be
expected to adversely affect in any respect any Loan Party or its or their business, operations or
assets or any properties at which such Loan Party has transported, stored or disposed of any
Hazardous Materials and which is likely to result in costs or liabilities to the Loan Parties in
excess of $500,000.




          (c) Neither any Loan Party nor any of its Subsidiaries has any material liability (contingent
or otherwise) in connection with a release, spill or discharge, threatened or actual, of any
Hazardous Materials or the generation, use, storage, treatment, transportation, manufacture,
handling, production or disposal of any Hazardous Materials.




          (d) Loan Parties and their Subsidiaries have all Permits required to be obtained or filed in
connection with the operations of the Loan Parties under all Environmental Laws and all of such
licenses, certificates, approvals or similar authorizations and other Permits are valid and in
full force and effect, except, in each case where the failure to so obtain or maintain such
Permits could not reasonably be expected to have a Material Adverse Effect.




     Section 8.9 Employee Benefits.



          (a) As of the Closing Date, each Plan is set forth in Schedule 8.9. Each Plan is in
compliance with the applicable provisions of ERISA, the Code and other Federal or State law,
except where any noncompliance could not reasonably be expected to have a Material Adverse Effect.
Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service and to the knowledge of any Responsible
Officer of any Loan Party, nothing has occurred which would cause the loss of such qualification.
Each Borrower and its ERISA Affiliates have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.




          (b) There are no pending, or to the knowledge of any Responsible Officer of any Loan Party,
threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan. There has been no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan that could reasonably be expected to result in material liability
to any Loan Party.




          (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) except as set
forth in Schedule 8.9, based on the latest valuation of each Pension Plan and on the
actuarial methods and assumptions employed for such valuation (determined in accordance with the
assumptions used for funding such Pension Plan pursuant to Section 412 of the Code), the aggregate
current value of accumulated benefit liabilities of such Pension Plan under Section 4001(a)(16) of
ERISA does not exceed





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the aggregate current value of the assets of such Pension Plan; (iii) each Loan Party, and their
ERISA Affiliates, have not incurred and do not reasonably expect to incur, any liability under
Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) each Loan Party, and their ERISA Affiliates, have not incurred and do
not reasonably expect to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) each Loan Party, and their ERISA Affiliates,
have not engaged in a transaction that would be subject to Section 4069 or 4212(c) of ERISA.




     Section 8.10 Bank Accounts. As of the Closing Date, all of the deposit accounts,
investment accounts, securities accounts, commodity accounts, futures accounts or any other
similar accounts in the name of or used by any Loan Party maintained at any bank or other
financial institution or securities intermediary are set forth in Schedule 8.10.



     Section 8.11 Intellectual Property. Each Loan Party owns or licenses or otherwise has
the right to use all Intellectual Property necessary for the operation of its business as presently
conducted or presently proposed by its management to be conducted. As of the Closing Date, Loan
Parties do not have any Intellectual Property registered, or subject to pending applications, in
the United States Patent and Trademark Office or any similar office or agency in the United States,
any State thereof, any political subdivision thereof or in any other country, other than those
described in Schedule 8.11 and have not granted any licenses with respect thereto other
than as set forth in Schedule 8.11. To the knowledge of the Responsible Officers of the
Loan Parties, no event has occurred which permits or would permit after notice or passage of time
or both, the revocation, suspension or termination of such rights. To the knowledge of the
Responsible Officers of the Loan Parties, no slogan or other advertising device, product, process,
method, substance or other Intellectual Property or goods bearing or using any Intellectual
Property presently contemplated to be sold by or employed by any Loan Party infringes any patent,
trademark, servicemark, tradename, copyright, license or other Intellectual Property owned by any
other Person presently and no claim or litigation is pending or threatened against or affecting any
Loan Party contesting its right to sell or use any such Intellectual Property. Schedule
8.11 sets forth all of the agreements or other arrangements of each Loan Party pursuant to
which such Loan Party has a license or other right to use any trademarks, logos, designs,
representations or other Intellectual Property owned by another person as in effect on the Closing
Date and the dates of the expiration of such agreements or other arrangements of such Loan Party as
in effect on the Closing Date (collectively, together with such agreements or other arrangements as
may be entered into by any Loan Party after the Closing Date, collectively, the “License
Agreements” and individually, a “License Agreement”). No trademark, servicemark, copyright or other
Intellectual Property at any time used by any Loan Party which is owned by another person, or owned
by such Loan Party subject to any Lien in favor of any person other than the Administrative Agent,
is affixed to any Eligible Inventory, except (a) to the extent permitted under the term of the
license agreements listed on Schedule 8.11 and (b) to the extent the sale of Inventory to
which such Intellectual Property is affixed is permitted to be sold by such Loan Party under
applicable law (including the United States Copyright Act of 1976).



     Section 8.12 Subsidiaries; Affiliates; Capitalization; Solvency.



          (a) As of the Closing Date, no Loan Party has any direct or indirect Subsidiaries or
Affiliates and is not engaged in any joint venture or partnership except as set forth in
Schedule 8.12.




          (b) Each Loan Party is the record and beneficial owner of all of the issued and outstanding
shares of Capital Stock of each of its Subsidiaries listed in Schedule 8.12 as being owned
by such Loan Party and there are no proxies, irrevocable or otherwise, with respect to such shares
and, except as set forth in Schedule 8.12, no equity securities of any of the Loan Parties
are or may become




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required to be issued by reason of any options, warrants, rights to subscribe to, calls or
commitments of any kind or nature and there are no contracts, commitments, understandings or
arrangements by which any Loan Party is or may become bound to issue additional shares of it
Capital Stock or securities convertible into or exchangeable for such shares.




          (c) As of the Closing Date, all of the issued and outstanding shares of Capital Stock of each
Loan Party are directly and beneficially owned and held by the persons indicated in Schedule
8.12, and in each case all of such shares have been duly authorized, in the case of
corporations, and are fully paid and non-assessable, and are free and clear of all claims, liens,
pledges and encumbrances of any kind, except as disclosed in writing to the Administrative Agent
prior to the Closing Date.




          (d) (i) Holdings and its Subsidiaries, taken as a whole, are Solvent and (ii) each Borrower
is Solvent and, in each case, will continue to be Solvent immediately after the creation or
incurrence from time to time of the Obligations, the security interests of the Administrative
Agent and the other transactions contemplated hereunder.




     Section 8.13 Labor Disputes.



          (a) Set forth in Schedule 8.13 is a list (including dates of termination) of all
collective bargaining or similar agreements between or applicable to each Loan Party and any
union, labor organization or other bargaining agent in respect of the employees of any Loan Party
on the Closing Date.




          (b) There is (i) no significant unfair labor practice complaint pending against any Loan
Party or, to the knowledge of any Responsible Officer of any Loan Party, threatened against it,
before the National Labor Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is pending on the Closing
Date against any Loan Party or, to the knowledge of any Responsible Officer of any Loan Party,
threatened against it, and (ii) no significant strike, labor dispute, slowdown or stoppage is
pending against any Loan Party or, to the knowledge of any Responsible Officer of any Loan Party,
threatened against any Loan Party.




     Section 8.14 Burdensome Restrictions. Except as permitted in Section 10.7,
there are no contractual or consensual restrictions on any Loan Party or any of its Subsidiaries
that (a) prohibit or otherwise restrict the transfer of cash or other assets (i) between any Loan
Party and any of its Subsidiaries or (ii) between any Subsidiaries of any Loan Party or (b)
prohibit or otherwise restrict the ability of any Loan Party or any of its Subsidiaries to incur
Indebtedness or grant Liens to the Administrative Agent or any Lender in the Collateral.



     Section 8.15 Material Contracts and Material Government Contracts. Schedule
8.15 (as such schedule may be updated from time to time after the Closing Date) sets forth all
Material Contracts and Material Government Contracts to which any Loan Party is a party or is
bound. The Loan Parties have delivered true, correct and complete copies of all Material Contracts
and Material Government Contracts (in each case, with redactions as deemed appropriate) in
existence on the Closing Date to the Administrative Agent. No Loan Party is in breach of or in
default under any Material Contract or Material Government Contract.



     Section 8.16 Real Property. Schedule 8.16 contains a list of all Real
Property owned or leased by any Loan Party as of the Closing Date. Each Loan Party has (a) good
and marketable fee simple title to or valid leasehold interests in all of its Real Property and
(b) good and marketable title to all of its other



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property (including without limitation, all property in each case as reflected in the financial
statements delivered to the Administrative Agent hereunder), and in case of each (a) and (b)
subject to no Liens other than permitted Liens pursuant to Section 10.2. Each Loan Party
and its Subsidiaries enjoy peaceful and undisturbed possession of all its Real Property and there
is no pending or, to the knowledge of any Responsible Officer of any Loan Party, threatened
condemnation proceeding relating to any such Real Property. No material default exists under any
leases evidencing any leasehold interests of the Loan Parties (the “Leases”). All of the Real
Property owned, leased or used by each Loan Party or any of its Subsidiaries in the conduct of
their respective businesses is (i) structurally sound with no known defects which could reasonably
be expected to have a Material Adverse Effect, (ii) in good operating condition and repair,
subject to ordinary wear and tear, (iii) not in need of maintenance or repair except for ordinary,
routine maintenance and repair the cost of which is immaterial, (iv) sufficient for the operation
of the businesses of each Loan Party and its Subsidiaries as currently conducted, and (v) in
compliance with all applicable laws, ordinances, orders, regulations and other requirements
(including applicable zoning, environmental, motor vehicle safety, occupational safety and health
laws and regulations) relating thereto, except where any noncompliance could not reasonably be
expected to have a Material Adverse Effect.




     Section 8.17 Payable Practices. No Loan Party has made any material change in its
historical accounts payable practices from those in effect immediately prior to the Closing Date.



     Section 8.18 Accuracy and Completeness of Information. All information furnished by
or on behalf of any Loan Party in writing to the Administrative Agent or any Lender in connection
with this Agreement or any of the other Loan Documents or any transaction contemplated hereby or
thereby is, and all such information thereafter furnished will be, true, accurate and complete in
every material respect on the date as of which such information is dated or certified and does not
omit any material fact necessary in order to make such information not misleading. No event or
circumstance has occurred which has had or could reasonably be expected to have a Material Adverse
Effect, which has not been fully and accurately disclosed to the Administrative Agent in writing
prior to the Closing Date.



     Section 8.19 Margin Security and Investment Company Act. No Loan Party owns any margin
stock and no portion of the proceeds of any Loans or Letters of Credit shall be used by any
Borrower for the purpose of purchasing or carrying any “margin stock” (as defined in Regulation U
of the Board of Governors of the Federal Reserve System) or for any other purpose which violates
the provisions or Regulation T, U or X of said Board of Governors or for any other purpose in
violation of any applicable statute or regulation, or of the terms and conditions of this
Agreement. No Loan Party is subject to regulation under the Investment Company Act of 1940, as
amended. In addition, none of the Loan Parties is an “investment company” registered or required to
be registered under the Investment Company Act of 1940, as amended, or is, directly or indirectly,
controlled by such a company.



     Section 8.20 Insurance. The properties of the Loan Parties are insured with
financially sound and reputable insurance companies not Affiliates of any Loan Party, in such
amounts, with such deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where the Loan Parties
operate.



     Section 8.21 Accounts; Inventory. Each Account (a) is genuine and enforceable in
accordance with its terms except for such limits thereon arising from bankruptcy and similar laws
relating to creditor’s rights; (b) is not subject to any deduction or discount (other than as
stated in the invoice and disclosed to the Administrative Agent in writing), defense, set off,
claim or counterclaim of a material nature against any Loan Party except as to which the Loan
Parties would have notified the Administrative Agent in writing; (c) is not subject to any other
circumstances that would impair the validity, enforceability or a material amount of such
Collateral except as to which the Loan Parties have notified



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the Administrative Agent in writing; (d) arising from a bona fide sale of goods or delivery of
services in the ordinary course and in accordance with the terms and conditions of any applicable
purchase order, contract or agreement; (e) is free of all Liens except Liens permitted by
Section 10.2; and (f) is for a liquidated amount maturing as stated in the invoice
therefor. To the knowledge of the Responsible Officers of each Loan Party, each Account included in
any Borrowing Base Certificate, report or other document as an Eligible Account meets all the
requirements of an Eligible Account set forth in this Agreement and each item of Inventory included
in the Borrowing Base as Eligible Inventory meets all of the requirements of Eligible Inventory set
forth in this Agreement.




     Section 8.22 Anti-Terrorism Laws. Neither the making of the Loans hereunder nor the
Borrowers’ use of the proceeds thereof will violate the Patriot Act, OFAC, the Trading with the
Enemy Act, as amended, any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended), or any enabling legislation in force in the
United States or executive order relating thereto, or is in violation of any Federal statute or
Presidential Executive Order, including without limitation Executive Order 13224 66 Fed. Reg. 49079
(September 25, 2001) (Blocking Property and Prohibiting Transactions with Persons who Commit,
Threaten to Commit or Support Terrorism), in each case, to the extent applicable to any Borrower.
None of the Borrowers, any Subsidiary of any Borrower or any Affiliate of any Borrower: (a) is a
Sanctioned Person, (b) has any of its assets in Sanctioned Entities, or (c) derives any of its
operating income from investments in, or transactions with Sanctioned Persons or Sanctioned
Entities, in each case, that would constitute a violation of applicable laws. The proceeds of any
Loan will not be used and have not been used to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.



     Section 8.23 Senior Indebtedness. The monetary Obligations hereunder rank at least
pari passu in right of payment (to the fullest extent permitted by law) with all other senior
indebtedness of the Borrowers; provided that the prior secured claims of any other senior
indebtedness solely with respect to particular collateral will not be deemed to result in such
Obligations not being at least pari passu in right of payment to such other senior indebtedness.



     Section 8.24 Survival of Warranties; Cumulative. All representations and warranties
contained in this Agreement or any of the other Loan Documents shall survive the execution and
delivery of this Agreement and shall be deemed to have been made again to the Administrative Agent
and the Lenders on the date of the making of a Loan or the issuance of a Letter of Credit (and on
the effective date of any Facility Increase) and shall be conclusively presumed to have been
relied on by the Administrative Agent and the Lenders regardless of any investigation made or
information possessed by the Administrative Agent or any Lender. The representations and
warranties set forth herein shall be cumulative and in addition to any other representations or
warranties which any Loan Party shall now or hereafter give, or cause to be given, to the
Administrative Agent or any Lender under any other Loan Documents.



ARTICLE 9

AFFIRMATIVE COVENANTS




     Section 9.1 Maintenance of Existence.



          (a) Except as otherwise permitted pursuant to Section 10.4 or 10.5, each Loan
Party shall, and shall cause each of its Subsidiaries to, at all times (i) preserve, renew and
keep in full force and effect its legal existence and, (ii) except those that expire or otherwise
terminate in accordance with their terms, maintain in full force and effect all registrations,
approvals, authorizations, consents and Permits necessary to carry on the business as presently or
from time to time proposed to be conducted.








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          (b) No Loan Party shall change its name, its type of organization, its jurisdiction of
organization or its legal structure unless each of the following conditions is satisfied: (i) the
Administrative Agent shall have received prior written notice from the Administrative Borrower of
such proposed change in its name, which notice shall accurately set forth the new name, type of
organization, jurisdiction or structure, as applicable; and (ii) not more than 30 days following
the effectiveness of such change, the Administrative Agent shall have received a copy of the
amendment to the certificate of incorporation, certificate of formation or other organizational
document of such Loan Party providing for such change certified by the Secretary of State or other
applicable government official of the jurisdiction of incorporation or organization of such Loan
Party or other similar Governmental Authority as soon as it is available.




          (c) No Loan Party shall change its chief executive office or its primary mailing address or
organizational identification number (or if it does not have one, shall not acquire one) unless the
Administrative Agent shall have received prior written notice from the Administrative Borrower of
such proposed change, which notice shall accurately set forth such change and the Administrative
Agent shall have received such agreements as the Administrative Agent may reasonably require in
connection therewith.




     Section 9.2 New Collateral Locations. From time to time, each Loan Party may open new
locations owned or leased by such Loan Party on which Collateral is stored or located only within
the continental United States or Canada provided such Loan Party gives the Administrative Agent
prior written notice of the intended opening of any such new location.



     Section 9.3 Compliance with Laws, Regulations, Etc.



          (a) Each Loan Party shall, and shall cause each of its Subsidiaries to, at all times, comply
with all laws, rules, regulations, licenses, approvals, orders and other Permits applicable to it
and duly observe all requirements of any Governmental Authority in each case, except where the
failure to so comply or observe could not reasonably be expected to have a Material Adverse
Effect; provided that the foregoing shall not apply with respect to Intellectual Property
(which is the subject of Section 9.9 below).




          (b) The Loan Parties shall give written notice to the Administrative Agent immediately upon
any Loan Party’s receipt of any notice of, or any Loan Party’s otherwise obtaining knowledge of,
(i) the occurrence of any event involving the release, spill or discharge, threatened or actual, of
any Hazardous Material is likely to result in costs or liabilities to the Loan Parties in excess of
$500,000 or (ii) any investigation, proceeding, complaint, order, directive, claims, citation or
notice with respect to: any non-compliance with or violation of any Environmental Law by any Loan
Party or the release, spill or discharge, threatened or actual, of any Hazardous Material if the
threatened or actual release, spill or discharge, or the alleged or actual non-compliance or
violation of Environmental Law by any Loan Party is likely to result in costs or liabilities to the
Loan Party in excess of $500,000 (collectively for purposes of this Section 9.3, a
“Material Release or Non-Compliance”). Upon request of the Administrative Agent, copies of
all environmental surveys, audits, assessments, feasibility studies and results of remedial
investigations (if any) shall be promptly furnished, or caused to be furnished, by such Loan Party
to the Administrative Agent. Each Loan Party shall take prompt action to respond to any Material
Release or Non-Compliance and shall regularly report to the Administrative Agent on such response,
if so requested by the Administrative Agent.




          (c) Each Loan Party shall indemnify and hold harmless the Administrative Agent and Lenders
and their respective directors, officers, employees, agents, invitees, representatives, successors
and assigns, from and against any and all losses, claims, damages, liabilities, costs, and
expenses (including reasonable attorneys’ fees and expenses) directly or indirectly arising out of
or





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attributable to the use, generation, manufacture, reproduction, storage, release, threatened
release, spill, discharge, disposal or presence of a Hazardous Material, including the costs of
any required or necessary repair, cleanup or other remedial work with respect to any property of
any Loan Party and the preparation and implementation of any closure, remedial or other required
plans. All representations, warranties, covenants and indemnifications in this Section 9.3
shall survive the payment of the Obligations and the termination of this Agreement.




     Section 9.4 Payment of Taxes and Claims. Each Loan Party shall, and shall cause each
of its Subsidiaries to, duly pay and discharge all Federal taxes and all other material taxes,
assessments and other similar governmental charges upon or against it or its properties or assets,
except for taxes, assessments and governmental charges the validity of which is being contested in
good faith by appropriate proceedings diligently pursued, as the case may be, and with respect to
which adequate reserves have been set aside on its books to the extent required by GAAP.



     Section 9.5 Insurance. Each Loan Party shall, and shall cause each of its Subsidiaries
to, at all times, maintain with financially sound and reputable insurers insurance against loss or
damage and all other insurance of the kinds and in the amounts customarily insured against or
carried by Persons of established reputation engaged in the same or similar businesses and
similarly situated (including, without limitation, hazard and business interruption insurance).
Said policies of insurance shall be reasonably satisfactory to the Administrative Agent as to form,
amount and insurer. Loan Parties shall furnish certificates, policies or endorsements to the
Administrative Agent as the Administrative Agent shall reasonably require as proof of such
insurance, and, if any Loan Party fails to do so, the Administrative Agent is authorized, but not
required, to obtain such insurance at the expense of the Borrowers. All policies insuring loss or
damage to Collateral shall provide for at least thirty (30) days prior written notice to the
Administrative Agent of any cancellation or reduction of coverage and that the Administrative Agent
may act as attorney for each Loan Party in obtaining, and at any time an Event of Default has
occurred and is continuing, adjusting, settling, amending and canceling such insurance. The Loan
Parties shall cause the Administrative Agent to be named as a lender’s loss payee on any policies
of property insurance covering the Collateral and an additional insured on any policies of general
liability insurance (but without any liability for any premiums) and the Loan Parties shall obtain
non-contributory lender’s loss payable endorsements to all insurance policies for property
insurance covering the Collateral in form and substance reasonably satisfactory to the
Administrative Agent. Such lender’s loss payable endorsements shall specify that the proceeds of
such insurance shall be payable to the Administrative Agent as its interests may appear and further
specify that the Administrative Agent and the Lenders shall be paid regardless of any act or
omission by any Loan Party or any of its Affiliates. Without limiting any other rights of the
Administrative Agent or Lenders, any insurance proceeds received by the Administrative Agent at any
time with respect to Collateral shall be applied to payment of the Obligations, whether or not then
due, in accordance with Section 2.5(c)(ii). Upon application of such proceeds to the
applicable Revolving Loans, such Revolving Loans may be available subject and pursuant to the terms
hereof to be used for the costs of repair or replacement of the Collateral lost or damages
resulting in the payment of such insurance proceeds.



     Section 9.6 Financial Statements and Other Information.



          (a) Each Loan Party shall, and shall cause any Subsidiary to, keep proper books and records
in which true and complete entries shall be made of all dealings or transactions of or in relation
to the Collateral and the business of such Loan Party and its Subsidiaries in accordance with GAAP
(other than the books and records of Foreign Subsidiaries (if any) that are kept in accordance
with local accounting rules and converted to GAAP monthly). The Borrowers shall furnish or cause
to be furnished to the Administrative Agent and the Lenders, the following:









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          (i) promptly upon becoming available and in any event within ninety (90)
days after the end of each fiscal year of the Borrowers, an audited combined and combining balance
sheet of the Borrowers as at the end of such fiscal year and the related audited combined and
combining statements of income and loss, statements of cash flow and statements of shareholders’
equity for such fiscal year and a report containing management’s discussion and analysis of such
financial statements for the fiscal year then ended, including the accompanying notes thereto, all
in reasonable detail, fairly presenting in all material respects the combined financial position
and the results of the operations of the Borrowers as of the end of and for such fiscal year, in
each case, setting forth in comparative form the figures for the corresponding period or periods of
the preceding fiscal year certified by the chief financial officer, treasurer, or corporate
controller of the Company as fairly presenting, in all material respects, the combined financial
condition and results of operations of the Borrowers, together with the unqualified opinion of
Goodman & Company, LLP or other independent certified public accountants of nationally recognized
standing selected by the Administrative Borrower and acceptable to the Administrative Agent, that
such audited combined and combining financial statements have been prepared in accordance with
GAAP, and present fairly in all material respects the results of operations and financial condition
of the Borrowers as of the end of and for the fiscal year then ended. Each of the foregoing shall
be accompanied by (A) a Compliance Certificate, along with a schedule in form reasonably
satisfactory to the Administrative Agent of the calculation of the Fixed Charge Coverage Ratio
(computed for the twelve (12) consecutive fiscal month period then ending) and (B) a representation
by the chief financial officer, controller or treasurer of the Company that no Event of Default has
occurred or is continuing;




          (ii) promptly upon becoming available and in any event thirty (30) days after the end of each
fiscal month of the Borrowers, an unaudited combined and combining balance sheet of the Borrowers
for such fiscal month, and the related unaudited combined and combining statements of income and
loss and a summary of cash flow items for such fiscal month in substantially the same form as
delivered to the Administrative Agent prior to the Closing Date (or such other form as may be
mutually agreed to by the Administrative Agent and the Administrative Borrower), fairly presenting
in all material respects the combined financial position and the results of the operations of the
Borrowers as of the end of and through such fiscal month, in each case setting forth in
comparative form the figures for the corresponding period or periods of the preceding fiscal year,
accompanied by (A) a Compliance Certificate, along with a schedule in form reasonably satisfactory
to the Administrative Agent of the calculation of the Fixed Charge Coverage Ratio (computed for
the twelve (12) consecutive fiscal month period then ending) and (B) a representation by the chief
financial officer, controller or treasurer of the Company that no Event of Default has occurred or
is continuing;




          (iii) promptly upon becoming available, but in any event at least thirty (30) days before the
end of each fiscal year (commencing with the fiscal year of the Borrowers ending December 31,
2010) of the Borrowers, a projected combined financial budget (including forecasted balance
sheets, statements of income and loss and summary cash flow items) of the Borrowers for the
immediately following fiscal year, all in reasonable detail, and in a format reasonably acceptable
to the Administrative Agent, together with such supporting information as the Administrative Agent
may reasonably request. Such projected financial budget shall also include projected borrowings
and Letter of Credit usage and pro forma calculations of Excess Availability and the Fixed Charge
Coverage Ratio. Such projected combined financial budget shall be prepared on a monthly basis for
the period commencing on January 1, 2011 through December 31, 2011 and on a quarterly basis for
each succeeding fiscal year thereafter. Such projected combined financial budget shall represent
the reasonable best estimate by the Borrowers of the future combined financial performance of the
Borrowers for the periods set



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forth therein and shall have been prepared on the basis of the assumptions set forth
therein that the Borrowers believe are fair and reasonable as of the date of preparation in
light of current and reasonably foreseeable business conditions (it being understood that
actual results may differ from those set forth in such projected financial budget). The
Borrowers shall provide to the Administrative Agent a quarterly update to such projected
combined financial budget for each upcoming quarter or, at any time a Default or Event of
Default exists or has occurred and is continuing or if Excess Availability falls below the
Threshold Amount, more frequently as the Administrative Agent may request; and




          (iv) promptly upon becoming available, but in no event later than ten (10) days after
the end of each fiscal quarter or, as otherwise requested by the Administrative Agent, a
contract backlog report of all Government Contracts and all other Material Contracts (in
form and substance reasonably satisfactory to the Administrative Agent but including,
without limitation, such contract’s end date, the tenor of such contract, the renewal
options of such contract, the type of contract and whether the applicable Loan Party party
thereto is a prime contractor or a sub-contractor with respect thereto).



          (b) The Loan Parties shall, and shall cause each Subsidiary thereof to, promptly (and in any
event within two (2) Business Days or such longer period as the Administrative Agent may agree)
notify the Administrative Agent in writing of the details of (i) any loss, damage, investigation,
action, suit, proceeding or claim relating to Collateral having a value of more than $750,000 or
which if adversely determined would result in any Material Adverse Effect, (ii) any Material
Contract or Material Government Contract being terminated or amended in any manner materially
adverse to the Company and its Subsidiaries or any new Material Contract or new Material Government
Contract entered into (in which event the Loan Parties shall provide the Administrative Agent with
(x) a copy of such Contract, if requested by the Administrative Agent, (y) an updated Schedule
8.15 and (z) with respect to any new Material Government Contract, a Notice of Assignment and
Instrument of Assignment with respect to such Material Government Contract in accordance with
Section 6.2(h)(i)), (iii) any order, judgment or decree in excess of $750,000 shall have
been entered against any Loan Party or any of its Subsidiaries or any of its or their respective
properties or assets, (iv) any notification of a violation of laws or regulations received by any
Responsible Officer of a Loan Party that could reasonably be expected to have a Material Adverse
Effect, (v) any ERISA Event, and (vi) upon any Responsible Officer having knowledge thereof, the
occurrence of any Material Release or Non-Compliance and (vii) upon any Responsible Officer having
knowledge thereof, the occurrence of any Default or Event of Default.




          (c) Promptly (and in any event within two (2) Business Days or such longer period as the
Administrative Agent may agree) after the sending or filing thereof, the Borrowers shall send to
the Administrative Agent copies of (i) all reports which the Company or any of its Subsidiaries
sends to its security holders generally, (ii) all reports and registration statements which the
Company or any of its Subsidiaries files with the Securities Exchange Commission, any national or
foreign securities exchange or the National Association of Securities Dealers, Inc., and such
other reports as the Administrative Agent may hereafter specifically identify to the
Administrative Borrower that the Administrative Agent will require be provided to the
Administrative Agent, (iii) all press releases and (iv) all other statements concerning material
changes or developments in the business of a Loan Party made available by any Loan Party to the
public.




          (d) Promptly (and in any event within two (2) Business Days or such longer period as the
Administrative Agent may agree) upon receipt thereof, the Borrowers shall send to the
Administrative Agent copies of any letter, notice, subpoena, court order, pleading or other
document issued, given or delivered by any U.S. Governmental Authority or by any prime contractor
to any Loan Party or any Subsidiary thereof asserting or seeking to investigate any alleged fraud,
malfeasance or other






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willful misconduct of any Loan Party or any Subsidiary thereof with respect to any Material
Government Contract or any subcontract with remaining payments of at least $750,000.




          (e) Each Loan Party shall, and shall cause each Subsidiary to, furnish or cause to be
furnished to the Administrative Agent such budgets, forecasts, projections and other information
respecting the Collateral and the business of Loan Parties, as the Administrative Agent may, from
time to time, reasonably request.




          (f) The Administrative Agent is hereby authorized to deliver a copy of any financial statement
or any other information relating to the business of Loan Parties to any court or other
Governmental Authority or to any Lender or Participant or prospective Lender or Participant or any
Affiliate of any Lender or Participant. Each Loan Party hereby irrevocably authorizes and directs
all accountants or auditors to deliver to the Administrative Agent, at Borrowers’ expense, copies
of the financial statements of any Loan Party and any final reports or management letters prepared
by such accountants or auditors on behalf of any Loan Party and to disclose to the Administrative
Agent and Lenders such information as they may have regarding the business of any Loan Party;
provided that the Loan Parties shall notify the Administrative Agent of any such reports or
management letters received and, upon the Administrative Agent’s request, shall use its
commercially reasonable efforts to cause such reports or management letters to be delivered to the
Administrative Agent in accordance with this clause (e). Any documents, schedules, invoices or
other papers delivered to the Administrative Agent or any Lender may be destroyed or otherwise
disposed of by the Administrative Agent or such Lender one (1) year after the same are delivered to
the Administrative Agent or such Lender, except as otherwise designated by the Administrative
Borrower to the Administrative Agent or such Lender in writing.




          (g) Information required to be delivered pursuant to this Section 9.6 shall be deemed
to have been delivered if such information, or one or more annual or other reports containing such
information, shall have been posted by the Administrative Agent on an IntraLinks, SyndTrak Online
or similar site to which the Lenders have been granted access; provided that the Company
shall deliver paper copies of such information to the Administrative Agent or any Lender that
requests such delivery.




     Section 9.7 Compliance with ERISA. Each Loan Party shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal and State law, except to the extent
that noncompliance would not result in a material liability to such Loan Party or such ERISA
Affiliate; (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain
such qualification; (c) not terminate any Pension Plan so as to incur any material liability to
the Pension Benefit Guaranty Corporation; (d) not allow or suffer to exist any prohibited
transaction involving any Plan or any trust created thereunder which would subject such Loan Party
or such ERISA Affiliate to a material tax or other liability on prohibited transactions imposed
under Section 4975 of the Code or ERISA; (e) make all required contributions to any Plan which it
is obligated to pay under Section 302 of ERISA, Section 412 of the Code or the terms of such Plan;
(f) not allow or suffer to exist any accumulated funding deficiency, whether or not waived, with
respect to any such Pension Plan; (g) not engage in a transaction that could be subject to Section
4069 or 4212(c) of ERISA; or (h) not allow or suffer to exist any occurrence of a reportable event
or any other event or condition which presents a material risk of termination by the Pension
Benefit Guaranty Corporation of any Plan that is a single employer plan, which termination could
result in any material liability to the Pension Benefit Guaranty Corporation.



     Section 9.8 End of Fiscal Years; Fiscal Quarters. Each Loan Party shall, for
financial reporting purposes, cause its, and each of its Subsidiaries’ (a) fiscal years to end on
December 31 of each year and (b) fiscal quarters to end on March 31, June 30, September 30, and
December 31 each year.




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     Section 9.9 Intellectual Property.



          (a) Each Loan Party (either itself or through licensees) shall refrain from taking any act
that knowingly uses any owned Intellectual Property to infringe the Intellectual Property rights of
any other third party.



          (b) Each Loan Party (either itself or through licensees) will (i) not abandon any Trademark
used in connection with any goods and services reflected in current catalogs, brochures and price
lists unless the Loan Party discontinues the associated goods or services or determines to change
the Trademark used in connection therewith, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable law, (iv) not adopt or use
any mark which is confusingly similar or a colorable imitation of any such Trademark unless the
Administrative Agent, shall obtain a perfected Lien upon such Trademark pursuant to this Agreement,
and (v) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become abandoned or dedicated to the public; other than where
the Loan Party has determined, in its reasonable business judgment, to abandon or cancel such
Trademark.



          (c) Each Loan Party (either itself or through licensees) will not do any act, or knowingly
omit to do any act, whereby any material Patent may become abandoned or dedicated to the public
other than where the Loan Party has determined, in its reasonable business judgment, to abandon or
cancel such Patent.



          (d) Each Loan Party (either itself or through licensees) will not do any act or knowingly omit
to do any act, whereby any material Copyright may become abandoned or dedicated to the public other
than where the Loan Party has determined, in its reasonable business judgment, to abandon or cancel
such Copyright.



          (e) Each Loan Party will notify the Administrative Agent and Lenders immediately if it knows,
or has reason to know, that any of the registered Intellectual Property is the subject of any order
of any Governmental Authority declaring that the Loan Party does not own the registered
Intellectual Property or the registered Intellectual Property is invalid or unenforceable.



          (f) Concurrently with the next delivery of financial statements of such Loan Party pursuant to
Section 9.6, the Loan Parties shall provide an update as to all registered Intellectual
Property then owned by the Loan Parties, including therewith the information described in
Section 8.11(b). Upon the request of the Administrative Agent, such Loan Party shall
execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers
as the Administrative Agent may reasonably request to evidence the Administrative Agent’s and
Lenders’ Lien upon such registered Intellectual Property and the goodwill and general intangibles
of such Loan Party relating thereto or represented thereby consistent with the terms of this
Agreement.



          (g) In the event that a Loan Party becomes aware that any owned Intellectual Property is
infringed upon or misappropriated or diluted by a third party, such Loan Party shall (i) take such
actions as such Loan Party shall reasonably deem appropriate under the circumstances to protect
such owned Intellectual Property and (ii) if such owned Intellectual Property is of material
economic value, promptly notify the Administrative Agent after it learns of its infringement,
misappropriation or dilution and, to the extent such Loan Party determines in its
reasonable business judgment it appropriate under the circumstances, sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and
all damages for such infringement, misappropriation or dilution.






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     Section 9.10 After Acquired Real Property. Subject to the last sentence of this
Section 9.10, if any Loan Party hereafter acquires any Real Property or fixtures and such
Real Property or fixtures has a fair market value in an amount greater than $500,000 (or if a
Default or Event of Default exists, then regardless of the fair market value of such assets),
without limiting any other rights of the Administrative Agent or any Lender, or duties or
obligations of any Loan Party, promptly upon the Administrative Agent’s request, such Loan Party
shall execute and deliver to the Administrative Agent a mortgage, deed of trust or deed to secure
debt, as the Administrative Agent may determine, in form and substance reasonably satisfactory to
the Administrative Agent and, as to any provisions relating to specific state laws, reasonably
satisfactory to the Administrative Agent and in form appropriate for recording in the real estate
records of the jurisdiction in which such Real Property or other property is located granting to
the Administrative Agent a valid Lien and mortgage on such Real Property or fixtures and such other
agreements, documents and instruments as the Administrative Agent may require in connection
therewith.



     Section 9.11 Further Assurances. At the request of the Administrative Agent at any
time and from time to time, each Loan Party shall, and shall cause each of its Subsidiaries to, at
its expense, duly execute and deliver, or cause to be duly executed and delivered, such further
agreements, documents and instruments, and do or cause to be done such further acts as the
Administrative Agent may reasonably determine to be necessary or proper to evidence, perfect,
maintain and enforce the Liens and the priority thereof in the Collateral and to otherwise
effectuate the provisions or purposes of this Agreement or any of the other Loan Documents.



     Section 9.12 Additional Borrowers and Guarantors.



          (a) Within 30 days (or such later date as may be agreed to by the Administrative Agent in its
sole discretion) of any Person becoming a direct or indirect Subsidiary of the Company, the
Administrative Borrower will provide the Administrative Agent with written notice thereof setting
forth information in reasonable detail describing all of the assets of such Person and shall (a)
cause such Subsidiary to execute and deliver to the Administrative Agent a joinder agreement in
substantially the form of Exhibit E, causing such Subsidiary to become a party to (i) this
Agreement, as a joint and several “Borrower” (provided that only a wholly-owned Subsidiary
shall be permitted to be a Borrower), granting a first priority Lien upon its Collateral, subject
to permitted Liens under Section 10.2 and (ii) the Pledge Agreement, as a joint and several
“Pledgor”, causing all of its issued and outstanding shares of Capital Stock, together with all of
the issued and outstanding shares Capital Stock of its Subsidiaries and sixty-five percent (65%) of
the issued and outstanding shares of the Capital Stock of each of its first-tier Foreign
Subsidiaries to be delivered to the Administrative Agent (together with undated stock powers signed
in blank and pledged to the Administrative Agent) (b) cause any such Subsidiary that is added as a
Borrower to execute and deliver to the Administrative Agent Notes in favor of the Lenders, if so
requested by the Lenders, and, if it owns any Real Property that has a fair market value in an
amount greater than $500,000, a mortgage or deed of trust thereon in favor of the Administrative
Agent, and (c) deliver such other documentation as the Administrative Agent may reasonably request
in connection with the foregoing, including, without limitation, appropriate UCC-1 financing
statements, Deposit Account Control Agreements, Investment Property Control Agreements, certified
resolutions and other organizational and authorizing documents of such Subsidiary and upon the
request of the Administrative Agent favorable opinions of counsel to such Subsidiary (which shall
cover, among other things, the legality, validity, binding effect and enforceability of the
documentation referred to above), all in form, content and scope reasonably satisfactory to the
Administrative Agent; provided that in lieu of the foregoing, at the option of the
Administrative Agent (and so
long as the Company has consented to the exercise of such option in lieu of joining such
Person as a Borrower), Loan Parties shall cause such Subsidiary to execute and deliver to the
Administrative Agent a joinder agreement in substantially the form of Exhibit E causing
such Subsidiary to become a party to the Guaranty as a joint and several



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“Guarantor”, and each of the documents described in clauses (a)(ii), (b) and (c) above, as
applicable, and with the same effect set forth above, all as the Administrative Agent reasonably
shall request.




     Section 9.13 Use of Proceeds. Loans made or Letters of Credit provided to or for the
benefit of any Borrower pursuant to the provisions hereof shall be used by such Borrower only for
general corporate purposes of such Borrower not otherwise prohibited by the terms hereof, including
to finance Permitted Acquisitions, the refinancing of the Existing Facility and to make the
distributions permitted pursuant to Section 10.6(c). None of the proceeds will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin Stock or for the
purposes of reducing or retiring any indebtedness which was originally incurred to purchase or
carry any Margin Stock or for any other purpose which might cause any of the Loans to be considered
a “purpose credit” within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, as amended.



     Section 9.14 Fixed Charge Coverage Ratio. The Borrowers shall, as of the end of each
fiscal month, maintain a Fixed Charge Coverage Ratio of not less than 1.20 to 1.00.



     Section 9.15 Post-Closing Conditions. The Borrowers shall perform the obligations set
forth on Schedule 9.15, in each case within the time limits set forth on Schedule
9.15 or such longer period as determined by the Administrative Agent in its sole discretion.



ARTICLE 10

NEGATIVE COVENANTS 



     Section 10.1 Limitations on Indebtedness. No Loan Party shall, nor shall it permit
any Subsidiary to, incur, create, assume, become or be liable in any manner with respect to, or
permit to exist, any Indebtedness, or guarantee, assume, endorse, or otherwise become responsible
for (directly or indirectly), the Indebtedness, performance, obligations or dividends of any other
Person, except:



          (a) the Obligations;



          (b) Indebtedness entered into in the ordinary course of business pursuant to a Hedge Agreement
in order to manage existing or anticipated interest rate, exchange rate or commodity price risks;
provided that (i) such arrangements are not for speculative purposes, and (ii) such Indebtedness
shall be unsecured, except to the extent such Indebtedness constitutes part of the Obligations
arising under or pursuant to Hedge Agreements with a Bank Product Provider that are secured under
the terms hereof;



          (c) Indebtedness existing on the Closing Date and listed on Schedule 10.1 and any
Permitted Refinancing Indebtedness in respect of any such Indebtedness;



          (d) Indebtedness incurred in connection with Capital Leases and Indebtedness incurred to
finance the construction, purchase or lease of, or repairs, improvements or additions to, property,
plant or equipment of such Person (provided that such Indebtedness is incurred not more
than one hundred eighty (180) days after the later of the acquisition, completion of construction,
repair, improvement, addition or commencement of full operation of such property, plant or
equipment), in an aggregate amount not to exceed $1,000,000 at any time outstanding;



          (e) Indebtedness of a Person existing at the time such Person became a Subsidiary or
Indebtedness assumed in connection with the acquisition of assets, to the extent that (i) such
Indebtedness was not incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or the acquisition of such assets, (ii) no Loan Party or any Subsidiary thereof (other
than such Person or any other Person that such Person merges with or that acquires the assets of
such Person) shall have any



87









 




liability or other obligation with respect to such Indebtedness and (iii) the aggregate outstanding
principal amount of such Indebtedness does not exceed $1,000,000 at any time outstanding;




          (f) guarantees with respect to Indebtedness permitted pursuant to subsections (a) through (e)
of this Section 10.1;



          (g) unsecured intercompany Indebtedness owed by (i) any Borrower to any other Borrower, (ii)
any Borrower to any Subsidiary Loan Party or any other Subsidiary (provided that any
Indebtedness permitted by this clause (ii) shall be subordinated to the Obligations in a manner
reasonably satisfactory to the Administrative Agent) and (iii) any Subsidiary Loan Party or any
other Subsidiary to a Borrower in an amount, when added together with all Investments made pursuant
to Section 10.3(b)(ii), not to exceed $1,000,000 in the aggregate at any time;



          (h) Indebtedness arising from the honoring by a bank or other financial institution of a
check, draft or other similar instrument drawn against insufficient funds in the ordinary course of
business;



          (i) Subordinated Indebtedness of the Company and its Subsidiaries; provided, that in
the case of each incurrence of such Subordinated Indebtedness, (i) no Default or Event of Default
shall have occurred and be continuing or would be caused by the incurrence of such Subordinated
Indebtedness, (ii) the Administrative Agent shall have received reasonably satisfactory written
evidence that the Company would be in compliance with all covenants contained in this Agreement on
a pro forma basis after giving effect to the issuance of any such Subordinated
Indebtedness, (iii) such Subordinated Indebtedness does not require principal payments to be made
at any time prior to the Maturity Date; and (iv) the proceeds of such Indebtedness shall be paid to
the Administrative Agent for application to the Obligations in the manner set forth in Section
2.5(c)(i);



          (j) Indebtedness under performance bonds, surety bonds, release, appeal and similar bonds,
statutory obligations or with respect to workers’ compensation claims, in each case incurred in the
ordinary course of business, and reimbursement obligations in respect of any of the foregoing; and



          (k) additional Indebtedness not otherwise permitted pursuant to this Section 10.1 in
an aggregate principal amount not to exceed $2,000,000 at any time outstanding.



     Section 10.2 Limitations on Liens. No Loan Party shall, nor shall it permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien of any nature whatsoever on any of
its assets or properties, including the Collateral, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien with respect to any
such assets or properties, except:



          (a) Liens created pursuant to the Loan Documents;



          (b) Liens in existence on the Closing Date and described on Schedule 10.2, including
Liens incurred in connection with any Permitted Refinancing Indebtedness pursuant to Section
10.1(c);



          (c) Liens for taxes, assessments and other governmental charges or levies (excluding any Lien
imposed pursuant to any of the provisions of ERISA or Environmental
Laws) (i) not yet due or as to which the period of grace (not to exceed thirty (30) days), if
any, related thereto has not expired or (ii) which are being contested in good faith and by
appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;






88









 








          (d) the
claims of materialmen, mechanics, carriers, warehousemen, processors
or landlords for
labor, materials, supplies or rentals incurred in the ordinary course of business, that (i) are not
overdue for a period of more than sixty (60) days or are being contested in good faith and by
appropriate proceedings if adequate reserves are maintained to the extent required by GAAP, (ii) do
not, individually or in the aggregate, materially impair the use thereof in the operation of the
business of the Company or any of its Subsidiaries and (iii) do not secure Indebtedness;



          (e) Liens consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers’ compensation, unemployment
insurance and other types of social security or similar legislation, or to secure the performance
of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds
(other than bonds related to judgments or litigation), performance bonds and other obligations of a
like nature incurred in the ordinary course of business, in each case, so long as no foreclosure
sale or similar proceeding has been commenced with respect to any portion of the Collateral on
account thereof;



          (f) Liens constituting encumbrances in the nature of zoning restrictions, easements and rights
or restrictions of record on the use of real property, which in the aggregate are not substantial
in amount and which do not, in any case, detract from the value of such property or impair the use
thereof in the ordinary conduct of business;



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



          (h) Liens
securing Indebtedness permitted under Section 10.1(d); provided that
(i) such Liens shall be created substantially simultaneously with the acquisition or lease of the
related asset, (ii) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not increased
and (iv) the principal amount of Indebtedness secured by any such Lien shall at no time exceed one
hundred percent (100%) of the original purchase price or lease payment amount of such property at
the time it was acquired;



          (i) Liens securing judgments for the payment of money not constituting an Event of Default
under Section 11.1(e) or securing appeal or other surety bonds relating to such judgments;
provided that (i) such Liens are being contested in good faith and by appropriate
proceedings diligently pursued, (ii) adequate reserves or other appropriate provision, if any, as
are required by GAAP have been made therefor, (iii) a stay of enforcement of any such Liens is in
effect and (iv) the Administrative Agent may establish a Reserve with respect thereto;



          (j) (i) Liens on tangible property or tangible assets (i) of any Subsidiary which are in
existence at the time that such Subsidiary is acquired pursuant to a Permitted Acquisition and (ii)
of the Company or any of its Subsidiaries existing at the time such tangible property or tangible
assets are purchased or otherwise acquired by the Company or such Subsidiary thereof pursuant to a
transaction permitted pursuant to this Agreement; provided that, with respect to each of
the foregoing clauses (i) and (ii), (A) such Liens (1) are not incurred in connection with, or in
anticipation of, such Permitted Acquisition, purchase or other acquisition, (2) are applicable only
to specific tangible property or tangible assets (excluding Accounts and Inventory), (3) are not
“blanket” or all asset Liens and (4) do not attach to any other property or
assets of the Company or any of its Subsidiaries and (B) the Indebtedness secured by such
Liens is permitted under Section 10.1(e));



          (k) (i) Liens of a collecting bank arising in the ordinary course of business under Section
4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction and (ii) Liens of any



89









 




depositary bank in connection with statutory, common law and contractual rights of set-off and
recoupment with respect to any deposit account of any Borrower or any Subsidiary thereof;




          (l) (i) contractual or statutory Liens of landlords to the extent relating to the property and
assets relating to any lease agreements with such landlord, and (ii) contractual Liens of suppliers
(including sellers of goods) or customers to the extent limited to the property or assets relating
to such contract; and



          (m) Liens on cash of the Loan Parties and their Subsidiaries securing Indebtedness in respect
of letters of credit with financial institutions that are not Bank Product Providers to the extent
that such Indebtedness is permitted pursuant to Section 10.1(k).



     Section 10.3 Limitations on Investments. No Loan Party shall, nor shall it permit any
Subsidiary to, directly or indirectly, make or agree to make, any Investment in any other Person,
except:



          (a) Investments existing on the Closing Date and described on Schedule
10.3;



          (b) Investments made after the Closing Date to or in (i) any Borrower or (ii) any Subsidiary
Loan Party or any other Subsidiary in an amount, when added together with Indebtedness outstanding
under Section 10.1(g)(iii), not to exceed $1,000,000 in the aggregate at any time;



          (c) Investments in cash and Cash Equivalents;



          (d) deposits made in the ordinary course of business to secure the performance of leases or
other obligations as permitted by Section 10.2;



          (e) Hedge Agreements permitted pursuant to Section 10.1;



          (f) Investments by a Borrower in the form of Permitted Acquisitions;



          (g) Investments in the form of loans and advances to employees in the ordinary course of
business, which, in the aggregate, do not exceed at any time $100,000;



          (h) Investments in the form of Indebtedness permitted pursuant to Section 10.1(g)(i) and
(g)(ii);



          (i) guaranties of the Loan Parties and their Subsidiaries permitted pursuant to Section
10.1;



          (j) stock or obligations issued to any Loan Party by any Person (or the representative of such
Person) in respect of Indebtedness of such Person owing to such Loan Party in connection with the
insolvency, bankruptcy, receivership or reorganization of such Person or a composition or
readjustment of the debts of such Person; and



          (k) other additional Investments not otherwise permitted pursuant to this Section 10.3
not exceeding $500,000 in the aggregate in any fiscal year.



     For purposes of determining the amount of any Investment outstanding for purposes of this
Section 10.3, such amount shall be deemed to be the amount of such Investment when made,
purchased or acquired less any amount realized in respect of such Investment upon the sale,
collection or return of capital (not to exceed the original amount invested).



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     Section 10.4 Limitations on Fundamental Changes. No Loan Party shall, nor shall it
permit any Subsidiary to, directly or indirectly, merge or consolidate with or into any other
Person or dissolve or liquidate (or suffer any liquidation or dissolution) except:



          (a) (i) any Subsidiary of a Borrower may be merged, amalgamated or consolidated with or into
such Borrower (provided that such Borrower shall be the continuing or surviving entity or
simultaneously with such transaction, the continuing or surviving entity shall become a Borrower
and the Company shall comply with Section 9.12 in connection therewith) or (ii) any
Subsidiary of the Company may be merged, amalgamated or consolidated with or into any Subsidiary
Loan Party (provided that the Subsidiary Loan Party shall be the continuing or surviving
entity or simultaneously with such transaction, the continuing or surviving entity shall become a
Subsidiary Loan Party and the Company shall comply with Section 9.12 in connection
therewith);



          (b) any Subsidiary of the Company may dispose of all or substantially all of its assets (upon
voluntary liquidation, dissolution, winding up or otherwise) to any Borrower and, after any such
dissolution or winding up to any Borrower by a Subsidiary of the Company, such Subsidiary may be
voluntarily liquidated, dissolved or wound-up;



          (c) dispositions permitted by Section 10.5;



          (d) any Subsidiary of the Company may merge with or into the Person such Subsidiary was formed
to acquire in connection with a Permitted Acquisition, provided that (i) a Subsidiary Loan
Party shall be the continuing or surviving entity or (ii) simultaneously with such transaction, the
continuing or surviving entity shall become a Subsidiary Loan Party and the Company shall comply
with Section 9.12 in connection therewith); and



          (e) any Person may merge into the Company or any Subsidiary Loan Party in connection with a
Permitted Acquisition; provided that the continuing or surviving Person shall be the
Company or such Subsidiary Loan Party.



     Section 10.5 Limitations on Asset Dispositions. No Loan Party shall, nor shall it
permit any Subsidiary to, directly or indirectly, sell, issue, assign, lease, license, transfer,
abandon, or otherwise dispose of any Capital Stock, Indebtedness, or any or all of its assets
(whether in one transaction or a series of transactions) to any other Person except



          (a) the sale of inventory in the ordinary course of business;



          (b) the sale of obsolete, worn-out or surplus assets no longer used or usable in the business
of the Company or any of its Subsidiaries;



          (c) the transfer of assets to any Borrower pursuant to Section 10.4(a) and any other
transaction permitted pursuant to Section 10.4;



          (d) the Company or any Subsidiary may write-off, discount, sell or otherwise dispose of
defaulted or past due receivables and similar obligations in the ordinary course of business and
not as part of an accounts receivable financing transaction;



          (e) (i) issuances of Capital Stock in the ordinary course of business and (ii) the issuance of
Capital Stock of the Company or any Subsidiary pursuant to an employee stock
incentive plan or grant or similar equity plan or 401(k) plans of the Company or any
Subsidiary for the benefit of directors, officers, employees or consultants;





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          (f) the disposition of any Hedge Agreement;



          (g) dispositions of Investments in cash and Cash Equivalents;



          (h) (i) any Subsidiary may transfer assets to any Borrower and (ii) any Borrower may transfer
assets to any Subsidiary Loan Party or any other Subsidiary in an aggregate amount not to exceed
$1,000,000 during the term of this Agreement;



          (i) dispositions in connection with insurance and condemnation events; provided that
the requirements of Section 2.5(c) are complied with in connection therewith; and



          (j) dispositions not otherwise permitted by this Section 10.5 in an aggregate amount
not to exceed $250,000 in any calendar year.



     Section 10.6 Limitations on Restricted Payments. No Loan Party shall, nor shall it
permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, except:



          (a) the Company or any Subsidiary thereof may declare and pay dividends in shares of its own
Qualified Capital Stock;



          (b) any Subsidiary of the Company may pay cash dividends to the Company or any Subsidiary Loan
Party or ratably to all holders of its outstanding Qualified Capital Stock;



          (c) the Company may make distributions to Holdings (to allow Holdings to declare and pay cash
dividends to the holders of its Capital Stock and, subject to this clause (c), Holdings may declare
and pay such cash dividends) (i) on the Closing Date in an amount up to the maximum amount
permissible so long as Excess Availability, after giving effect to such distribution, the
application of proceeds of the Revolving Loans made on the Closing Date and the payment of fees and
expenses associated with the Transactions, is greater than the Threshold Amount as of the Closing
Date and on a projected basis for the thirty (30) consecutive days following the Closing Date (such
dividend, the “Closing Date Dividend”) and (ii) after the Closing Date, one (1) time per
fiscal year (but no later than December 31 of such fiscal year), in each case, in an amount up to
the maximum amount then permissible, so long as (A) the Administrative Agent shall have received
the financial statements described in Section 9.6(a)(i) with respect to the preceding
fiscal year together with an unqualified opinion of Goodman & Company, LLP (or other independent
certified public accountants of nationally recognized standing selected by the Administrative
Borrower and acceptable to the Administrative Agent), (B) Excess Availability, both immediately
before and after giving effect to such distribution, is greater than the Threshold Amount as of the
date of such distribution and on a projected basis for the thirty (30) consecutive days following
the date of such distribution, (C) no Default or Event of Default has occurred and is continuing or
would result from such distribution and (D) the Fixed Charge Coverage Ratio for the most recently
ended twelve (12) consecutive fiscal month period for which financial statements have been
delivered to the Administrative Agent pursuant to Section 9.6 is at least 1.25 to 1.00
after giving pro forma effect to such distribution;



          (d) so long as the Company is a Subchapter S corporation (or a qualified subsidiary thereof or
is otherwise a “disregarded entity” for federal income tax purposes), the Company may make
quarterly distributions to Holdings, and Holdings may in turn make quarterly distributions to the
owners of its Capital Stock (the “Holdings Owners”), for the sole purpose of allowing the
Holdings Owners (i) to pay federal, state and local income taxes on the
estimated amount of the taxable income of the Company and its Subsidiaries that is allocated
to such Holdings Owners, as determined in good faith by the



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Company in consultation with its tax advisors and after taking into account all available credits
and deductions (provided, that neither the Company nor any of its Subsidiaries shall make
any distribution to Holdings for further distribution to any Holdings Owner in any amount greater
than such Holding Owner’s share of such taxes arising out of the Company’s net income and actually
due and payable by such Holdings Owner, and in no event, shall the aggregate amount of all such
distributions for income taxes in any period exceed 42% of the Company’s net income that is
allocated to such Holdings Owners for such period (provided, that such percentage may be
increased upon the Administrative Agent’s receipt of reasonably satisfactory evidence of the
application of a higher tax bracket)) and (ii) to pay franchise taxes and other fees required to
maintain the existence of Holdings (together with the distributions described in clause (d)(i)
above, collectively, the “Permitted Tax Distributions”); and




          (e) so long as no Default or Event of Default has occurred and is continuing or would result
therefrom, the Company may redeem, retire or otherwise acquire shares of its Capital Stock or
options or other equity or phantom equity in respect of its Capital Stock from present or former
officers, employees, directors or consultants (or their family members or trusts or other entities
for the benefit of any of the foregoing) or make severance payments to such Persons in connection
with the death, disability or termination of employment or consultancy of any such officer,
employee, director or consultant in an amount not to exceed $1,000,000 during any fiscal year.



     Section 10.7 Transactions with Affiliates. No Loan Party shall, nor shall it permit
any Subsidiary to, directly or indirectly enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of assets, the rendering of any service or the
payment of any management, advisory or similar fees, with (a) any officer, director, holder of any
Capital Stock in, or other Affiliate of, the Borrower or any of its Subsidiaries or (b) any
Affiliate of any such officer, director or holder, other than:




          (i) transactions permitted by Sections 10.1, 10.3,
10.4, 10.6 and 10.13;




          (ii) transactions existing on the Closing Date and described on Schedule 10.7;




          (iii) other transactions in the ordinary course of business on terms as favorable as
would be obtained by it on a comparable arm’s-length transaction with an independent,
unrelated third party;




          (iv) employment and severance arrangements (including stock option plans and employee
benefit plans and arrangements) with their respective officers and employees in the
ordinary course of business; and




          (v) payment of customary fees and reasonable out of pocket costs to, and indemnities
for the benefit of, directors, officers and employees of the Company and its Subsidiaries
in the ordinary course of business to the extent attributable to the ownership or operation
of the Company and its Subsidiaries.



     Section 10.8 Limitation on Certain Accounting Changes and Amendments to Organizational
Documents. No Loan Party shall (a) change its fiscal year end, or make (without the consent of
the Administrative Agent) any material change in its accounting treatment and reporting practices
except as required by GAAP or (b) amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational documents) or amend,
modify or change its bylaws (or other similar documents) in any manner which would materially and
adversely affect the rights or interests of the Lenders.



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     Section 10.9 Limitation on Payments and Modifications of Subordinated Indebtedness.
No Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly,



          (a) amend, modify, waive or supplement (or permit the modification, amendment, waiver or
supplement of) any of the terms or provisions of any Subordinated Indebtedness in any respect which
would materially and adversely affect the rights or interests of the Administrative Agent and
Lenders hereunder;



          (b) cancel, forgive, make any payment or prepayment on, or redeem or acquire for value
(including, without limitation, (i) by way of depositing with any trustee with respect thereto
money or securities before due for the purpose of paying when due and (ii) at the maturity thereof)
any Subordinated Indebtedness, except:




          (A) refinancings, refundings, renewals, extensions or exchange of any
Subordinated Indebtedness permitted Section 10.1(i) and (k), and by
any subordination agreement applicable thereto; and




          (B) the payment of interest, expenses and indemnities in respect of
Subordinated Indebtedness incurred under Section 10.1(i) and (k)
(other than any such payments prohibited by the subordination provisions thereof).



     Section 10.10 Limitation on Modifications of Material Contracts and Material Government
Contracts. No Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly
amend, modify, waive or supplement (or permit the modification, amendment, waiver or supplement of)
any of the terms or provisions of any Material Contract or any Material Government Contract, in
either case, in any respect which would materially and adversely affect the rights or interests of
the Administrative Agent and Lenders hereunder.



     Section 10.11 No Further Negative Pledges; Restrictive Agreements. No Loan Party
shall, nor shall it permit any Subsidiary to, directly, or indirectly, create or otherwise cause or
suffer to exist any encumbrance or restriction that prohibits or limits the ability of any Loan
Party or any Subsidiary of such Loan Party to (a) pay dividends or make other distributions or pay
any Indebtedness owed to such Loan Party or any Subsidiary of such Loan Party, (b) make loans or
advances to such Loan Party or any Subsidiary of such Loan Party, (c) transfer any of its
properties or assets to such Loan Party or any Subsidiary of such Loan Party, or (d) create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, other than encumbrances and restrictions arising under (i) applicable law,
(ii) this Agreement and the other Loan Documents, (iii) customary provisions restricting subletting
or assignment of any lease governing a leasehold interest of such Loan Party or any Subsidiary of
such Loan Party, (iv) customary restrictions on dispositions of real property interests found in
reciprocal easement agreements of such Loan Party or any Subsidiary of such Loan Party, (v) any
agreement relating to permitted Indebtedness incurred by a Subsidiary of such Loan Party prior to
the date on which such Subsidiary was acquired by such Loan Party and outstanding on such
acquisition date, (vi) customary restrictions contained in an agreement related to the sale of
assets (to the extent such sale is permitted pursuant to Section 10.5) that limit the
transfer of such assets pending the consummation of such sale, (vii) customary provisions
restricting assignment of any agreement entered into in the ordinary course of business, (viii) any
document or agreement evidencing contractual obligations in existence on the Closing Date or the
extension or continuation of such obligations; provided that any such encumbrances or restrictions
contained in any document or agreement evidencing an extension or
continuation are no less favorable to Administrative Agent and Lenders than those encumbrances
and restrictions under or pursuant to the contractual obligations so extended or continued and (ix)
Indebtedness incurred after the Closing Date and permitted under Section 10.1(d); provided
that



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any encumbrance or restriction shall be effective only against the assets financed thereby or the
proceeds thereof.




     Section 10.12 Nature of Business. No Loan Party shall, nor shall it permit any
Subsidiary to, engage in any business other than a Permitted Line of Business.



     Section 10.13 Disposal of Subsidiary Interests. No Loan Party will permit any
Subsidiary to be a non-wholly-owned Subsidiary except as a result of or in connection with a
dissolution, merger, amalgamation, consolidation or disposition permitted by Section 10.4
or 10.5.



     Section 10.14 Limitation on Holdings. Permit Holdings to engage in any business or
other activity other than (a) the ownership of all outstanding Capital Stock of the Company, (b)
maintaining its corporate existence, (c) participating in tax, accounting and other administrative
activities as the parent of the consolidated group of companies, including the Loan Parties, (d)
the execution and delivery of the Loan Documents to which it is a party and the performance of its
obligations thereunder and (e) activities incidental to the businesses or activities described in
clauses (a) through (d) of this Section.



ARTICLE 11

EVENTS OF DEFAULT AND REMEDIES 



     Section 11.1 Events of Default. The occurrence or existence of any one or more of the
following events are referred to herein individually as an “Event of Default”, and collectively as
“Events of Default”:



          (a) Payment Default. The Borrowers fail to pay when due (i) any principal of Loans or
any reimbursement obligation in respect of any Letter of Credit or (ii) any interest on the Loans,
any fees payable hereunder or under the Fee Letter or any other Obligation and such failure to pay
under clause (ii) continues for three (3) or more Business Days.



          (b) Covenant Default. Any Loan Party fails to perform (i) any of the covenants
contained in Sections 6.2(d), 6.3(a), (b) or (d), 7.1(a), 7.7, 9.1(a)(i), 9.6(a) or
(b)(v) or (b)(vii), 9.12, 9.13, 9.14 or 9.15 or Article 10 or (ii) any of the terms,
covenants, conditions or provisions contained in this Agreement (other than as specified in clause
(i)) or any of the other Loan Documents and such failure shall continue for thirty (30) days after
the earlier of receipt by such Loan Party of notice thereof from the Administrative Agent or any
Lender or after any Responsible Officer of the Administrative Borrower or of such Loan Party
obtains knowledge thereof.



          (c) Misrepresentation. Any representation, warranty or statement of fact made by or on
behalf of any Loan Party in this Agreement, the other Loan Documents or any other written
agreement, certificate, schedule or confirmatory assignment delivered in connection with this
Agreement that (i) is subject to a materiality or Material Adverse Effect qualification shall be
false or misleading when made or deemed made or (ii) is not subject to a materiality or Material
Adverse Effect qualification shall be false or misleading in any material respect when made or
deemed made.



          (d) Guarantor Default. Any Guarantor revokes or terminates or purports to revoke or
terminate or fails to perform any of the terms, covenants, conditions or provisions of the
Guaranty.



          (e) Judgment. Any judgment for the payment of money is rendered against any Loan
Party in an amount that exceeds, individually or in the aggregate with all unsatisfied judgments
against all Loan Parties, $500,000 (to the extent not covered by insurance where the insurer has
assumed



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responsibility in writing for such judgment) and shall remain undischarged or unvacated for a
period in excess of thirty (30) days or execution shall at any time not be effectively stayed or
bonded pending appeal or otherwise, or any judgment other than for the payment of money, or
injunction, attachment, garnishment or execution having a value in excess of $500,000 is rendered
against any Loan Party or any of the Collateral.




          (f) Involuntary Bankruptcy Proceeding. A case or proceeding under the bankruptcy laws
of the United States of America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of any other
jurisdiction now or hereafter in effect (whether at law or in equity) is filed against any Loan
Party or all or any part of its respective properties and such petition or application is not
dismissed within thirty (30) days after the date of its filing or any Loan Party shall file any
answer admitting or not contesting such petition or application or indicates its consent to,
acquiescence in or approval of, any such action or proceeding or the relief requested is granted
sooner.



          (g) Voluntary Bankruptcy Proceeding. A case or proceeding under the bankruptcy laws of
the United States of America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction
now or hereafter in effect (whether at a law or equity) is filed by any Loan Party or for all or
any part of its respective property or any Loan Party makes an assignment for the benefit of
creditors, makes or sends notice of a bulk transfer or calls a meeting of its creditors or
principal creditors in connection with a moratorium or adjustment of the Indebtedness due to them.



          (h) Indebtedness Cross-Default. Any Loan Party or any Subsidiary thereof shall (i)
default in respect of any Indebtedness (other than Indebtedness owing to the Administrative Agent
and the Lenders hereunder) the aggregate outstanding amount of which Indebtedness is in excess of
$500,000 beyond the period of grace if any, provided in the instrument or agreement under which
such Indebtedness was created, or (ii) default in the observance or performance of any other
agreement or condition relating to any Indebtedness (other than Indebtedness owing to the
Administrative Agent and the Lenders hereunder) the aggregate outstanding amount of which
Indebtedness is in excess of $500,000 or contained in any instrument or agreement evidencing,
securing or relating thereto or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice and/or lapse of time, if required, any such Indebtedness to become due prior to its
stated maturity (any applicable grace period having expired), including, without limitation, any
“put” of such Indebtedness to any such Loan Party or Subsidiary.



          (i) Failure of Agreements. Any material provision hereof or of any of the other Loan
Documents shall for any reason cease to be valid, binding and enforceable with respect to any party
hereto or thereto (other than the Administrative Agent, the Lenders, the Issuing Lender and the
Swingline Lender) in accordance with its terms, or any such party shall challenge the
enforceability hereof or thereof, or shall assert in writing, or take any action or fail to take
any action based on the assertion that any provision hereof or of any of the other Loan Documents
has ceased to be, or shall be asserted by any Loan Party to have ceased to be, or is otherwise not
valid, binding or enforceable in accordance with its terms, or any Lien provided for herein or in
any of the other Loan Documents shall cease to be a valid and perfected first priority Lien in any
of the Collateral purported to be subject thereto (except as otherwise permitted herein or
therein).



          (j) ERISA Event. An ERISA Event shall occur that results in or could reasonably be
expected to result in liability of any Loan Party or any Subsidiary thereof in an aggregate amount
in excess of $500,000.



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          (k) Change of Control. Any Change of Control shall occur.



          (l) Material Contract; Material Government Contract. (i) A termination of any
Material Contract or Material Government Contract, which termination could reasonably be expected
to have a Material Adverse Effect or (ii) a default under any (A) Material Contract or (B) Material
Government Contract, shall exist beyond (1) the expiration of any cure period, after notice of such
default (if required under such contract), available to any Loan Party or Subsidiary party thereto
pursuant to the terms of such contract or (2) the date on which the other contracting party is
entitled to exercise its rights and remedies under such contract as a consequence of such default,
in either clause (A) or (B) above, the result of which default could reasonably be expected to have
a Material Adverse Effect; provided that, with respect to clause (ii)(A) only, no default
shall occur under this Agreement if, and for so long as, the existence of such contract default is
being contested by the Company or any such Loan Party in good faith by appropriate proceedings and
adequate reserves in respect thereof have been established on the books of the Company or such Loan
Party to the extent required by GAAP.



          (m) Governmental Authority. (i) Any Loan Party or any Subsidiary thereof is debarred
or suspended from contracting with the United States or any of its departments, agencies or
instrumentalities; (ii) a notice of debarment or suspension has been issued to or received by any
Loan Party or any Subsidiary thereof under any Government Contract which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect; or (iii) an investigation
or inquiry by any Governmental Authority relating to any Loan Party or any Subsidiary thereof and
involving fraud, deception or willful misconduct shall have been commenced in connection with any
Material Government Contract or Material Contract or any Loan Party’s or any Subsidiary’s
activities which could reasonably be expected to have a Material Adverse Effect; or (iv) the actual
termination of any Government Contract due to alleged fraud, deception or willful misconduct which,
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect;
provided, that with respect to clauses (ii) and (iii) above, no Event of Default shall
occur under clause (m)(ii) or (m)(iii), as applicable, if, and for so long as, the existence of
Governmental Authority actions in such clauses (m)(ii) or (m)(iii) is not final and conclusive and
is being contested by the Company or any other Loan Party in good faith by appropriate proceedings
and adequate reserves in respect thereof have been established on the books of the Company to the
extent required by GAAP.



     Section 11.2 Remedies.



          (a) At any time an Event of Default exists or has occurred and is continuing, the
Administrative Agent and the Lenders shall have all rights and remedies provided in this Agreement,
the other Loan Documents, the UCC and other applicable law, all of which rights and remedies may be
exercised without notice to or consent by any Loan Party, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights, remedies and powers
granted to the Administrative Agent and the Lenders hereunder, under any of the other Loan
Documents, the UCC and other applicable law, are cumulative, not exclusive and enforceable, in the
Administrative Agent’s discretion, alternatively, successively, or concurrently on any one or more
occasions, and shall include, without limitation, the right to apply to a court of equity for an
injunction to restrain a breach or threatened breach by any Loan Party of this Agreement or any of
the other Loan Documents. Subject to Section 13, the Administrative Agent may, and at the
direction of the Required Lenders shall, at any time or times, proceed directly against any Loan
Party to collect the Obligations without prior recourse to the Collateral.



          (b) Without limiting the generality of the foregoing, at any time an Event of Default exists
or has occurred and is continuing, the Administrative Agent may, at its option and shall upon the
direction of the Required Lenders, (i) upon notice to the Administrative Borrower, accelerate the
payment



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of all Obligations (other than Bank Product Obligations) and demand immediate payment thereof to
the Administrative Agent for itself and the benefit of the Lenders (provided that upon the
occurrence of any Event of Default described in Sections 11.1(f) and 11.1(g), all
Obligations (other than Bank Product Obligations) shall automatically become immediately due and
payable) and/or (ii) terminate the Commitments whereupon the obligation of each Lender to make any
Loan and Issuing Lender to issue any Letter of Credit shall immediately terminate (provided
that upon the occurrence of any Event of Default described in Sections 11.1(f) and
11.1(g), the Commitments and any other obligation of the Administrative Agent, the Issuing
Lender or a Lender hereunder shall automatically terminate).




          (c) Without limiting the foregoing, at any time an Event of Default exists or has occurred and
is continuing, the Administrative Agent may, in its discretion (i) with or without judicial process
or the aid or assistance of others, enter upon any premises on or in which any of the Collateral
may be located and take possession of the Collateral or complete processing, manufacturing and
repair of all or any portion of the Collateral, (ii) require any Loan Party, at the Borrowers’
expense, to assemble and make available to the Administrative Agent any part or all of the
Collateral at any place and time designated by the Administrative Agent, (iii) collect, foreclose,
receive, appropriate, setoff and realize upon any and all Collateral, (iv) remove any or all of the
Collateral from any premises on or in which the same may be located for the purpose of effecting
the sale, foreclosure or other disposition thereof or for any other purpose, (v) sell, lease,
transfer, assign, deliver or otherwise dispose of any and all Collateral (including entering into
contracts with respect thereto, public or private sales at any exchange, broker’s board, at any
office of the Administrative Agent or elsewhere) at such prices or terms as the Administrative
Agent may deem reasonable, for cash, upon credit or for future delivery, with the Administrative
Agent having the right to purchase the whole or any part of the Collateral at any such public sale,
all of the foregoing being free from any right or equity of redemption of any Loan Party, which
right or equity of redemption is hereby expressly waived and released by Loan Parties and/or (vi)
terminate this Agreement. If any of the Collateral is sold or leased by the Administrative Agent
upon credit terms or for future delivery, the Obligations shall not be reduced as a result thereof
until payment therefor is finally collected by the Administrative Agent. If notice of disposition
of Collateral is required by law, ten (10) days prior notice by the Administrative Agent to the
Administrative Borrower designating the time and place of any public sale or the time after which
any private sale or other intended disposition of Collateral is to be made, shall be deemed to be
reasonable notice thereof and Loan Parties waive any other notice. In the event the Administrative
Agent institutes an action to recover any Collateral or seeks recovery of any Collateral by way of
prejudgment remedy, each Loan Party waives the posting of any bond which might otherwise be
required.



          (d) At any time an Event of Default has occurred and is continuing, upon the Administrative
Agent’s or the Issuing Lender’s request, the Borrowers will either, as the Administrative Agent
shall specify, furnish cash collateral to the Issuing Lender to be used to secure and fund the
reimbursement obligations to the Issuing Lender in connection with any Letter of Credit Obligations
or furnish cash collateral to the Administrative Agent for the Letter of Credit Obligations. Such
cash collateral shall be in the amount equal to one hundred five percent (105%) of the amount of
the Letter of Credit Obligations plus the amount of any fees and expenses payable in connection
therewith through the end of the latest expiration date of the Letters of Credit giving rise to
such Letter of Credit Obligations.



          (e) At any time or times that an Event of Default exists or has occurred and is continuing,
the Administrative Agent may, in its discretion, enforce the rights of any Loan Party against any
account debtor, secondary obligor or other obligor in respect of any of the
Accounts. Without limiting the generality of the foregoing, the Administrative Agent may, in
its discretion, at such time or times (i) notify any or all account debtors, secondary obligors or
other obligors in respect thereof that the Accounts have been assigned to the Administrative Agent
and that the Administrative Agent has a Lien therein and the Administrative Agent may direct any or
all account debtors, secondary obligors and other



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obligors to make payment of Accounts directly to the Administrative Agent, (ii) extend the time of
payment of, compromise, settle or adjust for cash, credit, return of merchandise or otherwise, and
upon any terms or conditions, any and all Accounts or other obligations included in the Collateral
and thereby discharge or release the account debtor or any secondary obligors or other obligors in
respect thereof without affecting any of the Obligations, (iii) demand, collect or enforce payment
of any Accounts or such other obligations, but without any duty to do so, and the Administrative
Agent and the Lenders shall not be liable for any failure to collect or enforce the payment thereof
nor for the negligence of its agents or attorneys with respect thereto and (iv) take whatever other
action the Administrative Agent may deem necessary or desirable for the protection of its interests
and the interests of the Lenders. At any time that an Event of Default has occurred and is
continuing, at the Administrative Agent’s request, all invoices and statements sent to any account
debtor shall state that the Accounts and such other obligations have been assigned to the
Administrative Agent and are payable directly and only to the Administrative Agent and the Loan
Parties shall deliver to the Administrative Agent such originals of documents evidencing the sale
and delivery of goods or the performance of services giving rise to any Accounts as the
Administrative Agent may require. In the event any account debtor returns Inventory when an Event
of Default has occurred and is continuing, the Borrowers shall, upon the Administrative Agent’s
request, hold the returned Inventory in trust for the Administrative Agent, segregate all returned
Inventory from all of its other property, dispose of the returned Inventory solely according to the
Administrative Agent’s instructions, and not issue any credits, discounts or allowances with
respect thereto without the Administrative Agent’s prior written consent.




          (f) To the extent that applicable law imposes duties on the Administrative Agent or any Lender
to exercise remedies in a commercially reasonable manner (which duties cannot be waived under such
law), each Loan Party acknowledges and agrees that it is not commercially unreasonable for the
Administrative Agent or any Lender (i) to fail to incur expenses reasonably deemed significant by
the Administrative Agent or any Lender to prepare Collateral for disposition or otherwise to
complete raw material or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain consents of any Governmental
Authority or other third party for the collection or disposition of Collateral to be collected or
disposed of, (iii) to fail to exercise collection remedies against account debtors, secondary
obligors or other persons obligated on Collateral or to remove liens or encumbrances on, or any
adverse claims against, Collateral, (iv) to exercise collection remedies against account debtors
and other persons obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral through publications or
media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other persons, whether or not in the same business as any Loan Party, for expressions of
interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a
specialized nature, (viii) to dispose of Collateral by utilizing Internet sites that provide for
the auction of assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in
wholesale rather than retail markets, (x) to disclaim disposition warranties, (xi) to purchase
insurance or credit enhancements to insure the Administrative Agent or the Lenders against risks of
loss, collection or disposition of Collateral or to provide to the Administrative Agent or the
Lenders a guaranteed return from the collection or disposition of Collateral, or (xii) to the
extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist the Administrative Agent in the
collection or disposition of any of the Collateral. Each Loan Party acknowledges that the purpose
of this Section 11.2(f) is to provide non-exhaustive indications of what actions or omissions by
the Administrative Agent or any Lender would not be commercially unreasonable in the exercise
by the Administrative Agent or any Lender of remedies against the Collateral and that other actions
or omissions by the Administrative Agent or any Lender shall not be deemed commercially
unreasonable solely on



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account of not being indicated in this Section 11.2(f). Without limitation of the
foregoing, nothing contained in this Section 11.2(f) shall be construed to grant any rights
to any Loan Party or to impose any duties on the Administrative Agent or the Lenders that would not
have been granted or imposed by this Agreement or by applicable law in the absence of this
Section 11.2(f).




          (g) For the purpose of enabling the Administrative Agent to exercise the rights and remedies
hereunder, each Loan Party hereby grants to the Administrative Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable at any time an Event of Default shall exist or have
occurred and be continuing) without payment of royalty or other compensation to any Loan Party, to
use, assign, license or sublicense any of the trademarks, service-marks, trade names, business
names, trade styles, designs, logos and other source of business identifiers and other Intellectual
Property and general intangibles now owned or hereafter acquired by any Loan Party, wherever the
same may be located, including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for the compilation or
printout thereof.



          (h) At any time an Event of Default shall have occurred and be continuing, the Administrative
Agent may apply the cash proceeds of Collateral actually received by the Administrative Agent from
any sale, lease, foreclosure or other disposition of such Collateral to payment of the Obligations,
in whole or in part and in accordance with the terms hereof, whether or not then due or may hold
such proceeds as cash collateral for the Obligations. The Loan Parties shall remain liable to the
Administrative Agent and the Lenders for the payment of any deficiency with interest at the highest
rate provided for herein and all costs and expenses of collection or enforcement, including
attorneys’ fees and expenses.



          (i) Without limiting the foregoing, (i) at any time a Default or an Event of Default shall
have occurred and be continuing, the Administrative Agent and the Lenders may, at the
Administrative Agent’s option, and upon the occurrence of an Event of Default at the direction of
the Required Lenders, the Administrative Agent and the Lenders shall, without notice, cease making
Loans or arranging for Letters of Credit or reduce the lending formulas or amounts of Loans and
Letters of Credit available to the Borrowers and (ii) the Administrative Agent may, at its option,
establish such Reserves as the Administrative Agent determines, without limitation or restriction,
notwithstanding anything to the contrary contained herein.



     Section 11.3 Crediting Payments and Proceeds.



          (a) In the event that the Obligations have been accelerated or the Commitments have been
terminated pursuant to Section 11.2 or the Administrative Agent or any Lender has exercised
any remedy set forth herein or any other Loan Document, all payments received by the Administrative
Agent or the Lenders upon the Obligations and all net proceeds from the enforcement of all the
Obligations (including proceeds of any Collateral) shall be applied as follows (except as otherwise
provided herein with respect to Defaulting Lenders):




          first, to pay any fees, indemnities or expense reimbursements then due
to the Administrative Agent, Issuing Lender and Swingline Lender, each in their
capacity as such, from any Loan Party (ratably among the Administrative Agent, the
Issuing Lender and the Swingline Lender in proportion to the respective amounts
described in this clause first payable to them);




          second, to pay interest due in respect of Special Agent Advances
(ratably among the Lenders in proportion to the respective amounts described in
this clause second payable to them);



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          third, to pay principal due in respect of Special Agent Advances
(ratably among the Lenders in proportion to the respective amounts described in
this clause third payable to them);




          fourth, to pay any fees, indemnities, or expense reimbursements then
due to the Lenders from any Loan Party (ratably among the Lenders in proportion to
the respective amounts described in this clause fourth payable to them);




          fifth, to pay interest due in respect of Swingline Loans and Settlement Advances
(ratably to the Swingline Lender and the Administrative Agent in proportion to the respective
amounts described in this clause fifth payable to them);




          sixth, to pay principal in respect of any Swingline Loans and Settlement Advances
(ratably to the Swingline Lender and the Administrative Agent in proportion to the respective
amounts described in this clause sixth payable to them);




          seventh, to pay interest due in respect of any Revolving Loans
(ratably among the Lenders in proportion to the respective amounts described in
this clause seventh payable to them);




          eighth, to (a) pay principal in respect of all Revolving Loans, (b) to
pay any Obligations arising under or pursuant to any Noticed Bank Products
consisting of Hedge Agreements (on a pro rata basis among such
Noticed Bank Products and, in each case, based on amounts then certified (in the
manner described in Section 3.8) by the applicable Bank Product Provider to
the Administrative Agent to be due and payable to such Bank Product Provider), (c)
to pay the aggregate amount of all drawings under Letters of Credit for which the
Issuing Lender has not at such time been reimbursed and (d) to cash collateralize
any other Letter of Credit Obligations pursuant to Section 11.2(d) (ratably
among the Lenders, the Bank Product Providers and the Issuing Lender in proportion
to the respective amounts described in this clause eighth payable to them);




          ninth, to pay or repay any Obligations arising under or pursuant to
any Noticed Bank Products (other than Noticed Bank Products consisting of Hedge
Agreements), on a pro rata basis among such Noticed Bank Products and, in each
case, based on amounts then certified (in the manner described in Section
3.8) by the applicable Bank Product Provider to the Administrative Agent to be
due and payable to such Bank Product Provider;




          tenth, to pay or prepay any and all other Obligations then due and
owing (other than Obligations owed to Defaulting Lenders) including Bank Product
Obligations (based on amounts then certified (in the manner described in
Section 3.8) by the applicable Bank Product Provider to the Administrative
Agent to be due and payable to such Bank Product Provider), on a pro
rata basis;




          eleventh, to pay or prepay any and all Obligations owed to Defaulting
Lenders; and




          last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrowers.



          (b) Notwithstanding anything to the contrary contained in any of the Loan Documents, to the
extent any Borrower uses any proceeds of the Loans or Letters of Credit to acquire rights in or the
use of any Collateral or to repay any Indebtedness used to acquire rights in or the use of any
Collateral, payments in respect of the Obligations shall be deemed applied first, to the
Obligations arising from Loans and Letter of Credit Obligations that were not used for such
purposes, and second, to



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the Obligations arising from Loans and Letter of Credit Obligations the proceeds of which were used
to acquire rights in or the use of any Collateral in the chronological order in which such Borrower
acquired such rights in or the use of such Collateral.




     Section 11.4 Proofs of Claim. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan or Letter of Credit Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall
have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such
proceeding or otherwise:



          (a) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, Letter of Credit Obligations and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or advisable in order to have
the claims of the Lenders and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and
their respective agents and counsel and all other amounts due the Lenders and the Administrative
Agent under Sections 3.2 and 14.4) allowed in such judicial proceeding; and



          (b) to collect and receive any monies or other property payable or deliverable on any such
claims and to distribute the same;


and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent under Sections 3.2
and 14.3. Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.




ARTICLE 12

THE ADMINISTRATIVE AGENT 



     Section 12.1 Appointment, Powers and Immunities. Each Lender and the Issuing Lender
irrevocably designates, appoints and authorizes (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to designate, appoint and authorize) Wachovia to act as
the Administrative Agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this Agreement and of the other
Loan Documents, together with such other powers as are reasonably incidental thereto. The
Administrative Agent (a) shall have no duties or responsibilities except those expressly set forth
in this Agreement and in the other Loan Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee or fiduciary for any Lender; (b) shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained in this Agreement or
in any of the other Loan Documents, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other Loan Document,
or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or any other document referred to or provided for herein or
therein or for any failure by any Loan Party or any other Person to



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perform any of its obligations hereunder or thereunder; and (c) shall not be responsible to the
Lenders for any action taken or omitted to be taken by it hereunder or under any other Loan
Document or under any other document or instrument referred to or provided for herein or therein or
in connection herewith or therewith, except for its own gross negligence or willful misconduct as
determined by a final non-appealable judgment of a court of competent jurisdiction. The
Administrative Agent may employ agents, bailees, custodians and attorneys in fact and shall not be
responsible for the negligence or misconduct of any such persons selected by it in good faith. The
Administrative Agent may deem and treat the payee of any note as the holder thereof for all
purposes hereof unless and until the assignment thereof pursuant to an agreement (if and to the
extent permitted herein) in form and substance satisfactory to the Administrative Agent shall have
been delivered to and acknowledged by the Administrative Agent.




     Section 12.2 Reliance by the Administrative Agent. The Administrative Agent shall be
entitled to rely upon any certification, notice or other communication (including any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by the Administrative Agent.
As to any matters not expressly provided for by this Agreement or any other Loan Document, the
Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Required Lenders or all of the
Lenders as is required in such circumstance, and such instructions of the Administrative Agent and
any action taken or failure to act pursuant thereto shall be binding on all the Lenders.



     Section 12.3 Events of Default.



          (a) The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or an Event of Default or other failure of a condition precedent to the Loans and
Letters of Credit hereunder, unless and until the Administrative Agent has received written notice
from a Lender, or Borrower specifying such Event of Default or any unfulfilled condition precedent,
and stating that such notice is a “Notice of Default or Failure of Condition”. In the event that
the Administrative Agent receives such a Notice of Default or Failure of Condition, the
Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall (subject to Section 13.9) take such action with respect to any such Event of Default
or failure of condition precedent as shall be directed by the Required Lenders (and shall direct
the Issuing Lender and the Swingline Lender in a manner consistent with any such direction);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to or by reason of such Event of Default or failure
of condition precedent, as it shall deem advisable in the best interest of the Lenders (and shall
direct the Issuing Lender and the Swingline Lender in a manner consistent with this standard).



          (b) Except with the prior written consent of the Administrative Agent, no Lender or Issuing
Lender may assert or exercise any enforcement right or remedy in respect of the Loans, Letter of
Credit Obligations or other Obligations, as against any Loan Party or any of the Collateral or
other property of any Loan Party.



     Section 12.4 Wachovia in its Individual Capacity. With respect to its Commitment and
the Loans made and Letters of Credit issued or caused to be issued by it (and any successor acting
as the Administrative Agent), so long as Wachovia shall be a Lender hereunder, it shall have the
same rights and powers hereunder as any other Lender and may exercise the same as though it
were not acting as the Administrative Agent, and the term “Lender” or “Lenders” shall, unless
the context otherwise indicates, include Wachovia in its individual capacity as Lender hereunder.
Wachovia (and any successor acting as the Administrative Agent) and its Affiliates may (without
having to account therefor to any Lender) lend



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money to, make investments in and generally engage in any kind of business with the Borrowers (and
any of its Subsidiaries or Affiliates) as if it were not acting as the Administrative Agent, and
Wachovia and its Affiliates may accept fees and other consideration from any Loan Party and any of
its Subsidiaries and Affiliates for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.




     Section 12.5 Indemnification. The Lenders agree to indemnify the Administrative Agent,
the Swingline Lender and Issuing Lender, each acting in its capacity as such (to the extent not
reimbursed by the Borrowers hereunder and without limiting any obligations of the Borrowers
hereunder) ratably, in accordance with their Pro Rata Shares, for any and all claims of any kind
and nature whatsoever that may be imposed on, incurred by or asserted against such Persons
(including by any Lender) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any other Loan Document or any other documents
contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby
(including the costs and expenses that such Person is obligated to pay hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents, provided that no
Lender shall be liable for any of the foregoing to the extent it arises from the gross negligence
or willful misconduct of the party to be indemnified as determined by a final non-appealable
judgment of a court of competent jurisdiction. The foregoing indemnity shall survive the payment
of the Obligations and the termination of this Agreement.



     Section 12.6 Non-Reliance on the Administrative Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Administrative Agent or other Lender,
and based on such documents and information as it has deemed appropriate, made its own credit
analysis of Loan Parties and has made its own decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the time, continue to make
its own analysis and decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. The Administrative Agent shall not be required to keep itself informed as to
the performance or observance by any Loan Party of any term or provision of this Agreement or any
of the other Loan Documents or any other document referred to or provided for herein or therein or
to inspect the properties or books of any Loan Party. The Administrative Agent will use reasonable
efforts to provide the Lenders with any information received by the Administrative Agent from any
Loan Party which is required to be provided to the Lenders or deemed to be requested by the Lenders
hereunder and with a copy of any Notice of Default or Failure of Condition received by the
Administrative Agent from any Borrower or any Lender; provided that the Administrative Agent shall
not be liable to any Lender for any failure to do so, except to the extent that such failure is
attributable to the Administrative Agent’s own gross negligence or willful misconduct as determined
by a final non-appealable judgment of a court of competent jurisdiction. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by the Administrative
Agent or deemed requested by the Lenders hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any other credit or other information concerning
the affairs, financial condition or business of any Loan Party that may come into the possession of
the Administrative Agent.



     Section 12.7 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under the other Loan Documents, the Administrative Agent shall
in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 12.6 against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action.




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     Section 12.8 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Administrative Agent to enter into this Agreement and the other
Loan Documents. Each Lender agrees that any action taken by the Administrative Agent or Required
Lenders in accordance with the terms of this Agreement or the other Loan Documents and the
exercise by the Administrative Agent or Required Lenders of their respective powers set forth
therein or herein, together with such other powers that are reasonably incidental thereto, shall
be binding upon all of the Lenders.



     Section 12.9 Field Audit, Examination Reports and other Information; Disclaimer by
Lenders. By signing this Agreement, each Lender:



          (a) is deemed to have requested that the Administrative Agent furnish such Lender, promptly
after it becomes available, a copy of each field audit or examination report and report with
respect to the Borrowing Base prepared or received by the Administrative Agent (each field audit
or examination report and report with respect to the Borrowing Base being referred to herein as a
“Report”), appraisals with respect to the Collateral and financial statements with respect
to the Company and its Subsidiaries received by the Administrative Agent;




          (b) expressly agrees and acknowledges that the Administrative Agent (i) does not make any
representation or warranty as to the accuracy of any Report, appraisal or financial statement or
(ii) shall not be liable for any information contained in any Report, appraisal or financial
statement;




          (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that the Administrative Agent or any other party performing any audit or examination
will inspect only specific information regarding Loan Parties and will rely significantly upon
Loan Parties’ books and records, as well as on representations of Loan Parties’ personnel; and




          (d) agrees to keep all Reports confidential and strictly for its internal use in accordance
with the terms of Section 14.9, and not to distribute or use any Report in any other
manner.




     Section 12.10 Collateral Matters.



          (a) The Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to designate, appoint and authorize) the Administrative
Agent, at its option and in its discretion to release any security interest in, mortgage or Lien
upon, any of the Collateral (i) upon termination of the Commitments and payment and satisfaction of
all of the Obligations and delivery of cash collateral to the extent required under Section
14.12 below, or (ii) constituting property being sold or disposed of if the Administrative
Borrower or any Loan Party certifies to the Administrative Agent that the sale or disposition is
made in compliance with Section 10.5 (and the Administrative Agent may rely conclusively on
any such certificate, without further inquiry), or (iii) constituting property in which any Loan
Party did not own an interest at the time the security interest, mortgage or Lien was granted or at
any time thereafter, or (iv) if required or permitted under the terms of any of the other Loan
Documents, or (v) subject to Section 14.2, if approved, authorized or ratified in writing
by the Required Lenders, or (vi) having a value in the aggregate in any twelve (12) consecutive
fiscal month period of less than $5,000,000, and to the extent the Administrative Agent may release
its security interest in, and Lien upon, any such Collateral pursuant to the sale or other
disposition thereof, such sale or other disposition shall be deemed consented to by the Lenders.
Upon request by the Administrative Agent at any time, the Lenders will promptly confirm in writing
the Administrative Agent’s authority to release particular types or items of Collateral pursuant to
this Section 12.10. In no event shall the consent or approval of Issuing Lender or any Bank
Product Provider (in its capacity as such) to any release of Collateral be required.












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          (b) The Lenders hereby irrevocably authorize (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to designate, appoint and authorize) the
Administrative Agent, at its option and in its discretion, to release a Borrower as a “Borrower” or
a Guarantor from the Guaranty so long as: (i) such Borrower or Guarantor has ceased to be, or
simultaneously with such release will cease to be, a Subsidiary pursuant to a transaction permitted
by Section 10.4 or 10.5, (ii) in the case of a Guarantor, such Guarantor has ceased
to be, or simultaneously with its release from the Guaranty will cease to be, a Subsidiary, (iii)
no Default or Event of Default shall have occurred and be continuing or would occur as a result of
such release, and (iv) the Administrative Agent shall have received, at least ten (10) Business
Days (or such shorter period as may be acceptable to the Administrative Agent) prior to the
proposed date of release of a Borrower, such information as shall be required for the
Administrative Agent to adjust the Borrowing Base to reflect such release. In no event shall the
consent or approval of Issuing Lender or any Bank Product Provider (in its capacity as such) to any
release of any Borrower or Guarantor be required.




          (c) Without in any manner limiting the Administrative Agent’s authority to act without any
specific or further authorization or consent by the Required Lenders, each Lender agrees to confirm
in writing, upon request by the Administrative Agent, the authority to release Collateral or Loan
Parties conferred upon the Administrative Agent under this Section 12.10. The
Administrative Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Loan Party or security interest,
mortgage or Liens granted to the Administrative Agent upon any Collateral to the extent set forth
above; provided that (i) the Administrative Agent shall not be required to execute any such
document on terms which, in the Administrative Agent’s opinion, would expose the Administrative
Agent to liability or create any obligations or entail any consequence other than the release of
such Loan Party, security interest, mortgage or Liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or any security
interest, mortgage or Lien upon (or obligations of any Loan Party in respect of) the Collateral
retained by such Loan Party.




          (d) The Administrative Agent shall have no obligation whatsoever to any Lender, Issuing Lender
or any other Person to investigate, confirm or assure that the Collateral exists or is owned by any
Loan Party or is cared for, protected or insured or has been encumbered, or that any particular
items of Collateral meet the eligibility criteria applicable in respect of the Loans or Letters of
Credit hereunder, or whether any particular reserves are appropriate, or that the Liens and
security interests granted to the Administrative Agent pursuant hereto or any of the Loan Documents
or otherwise have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Administrative Agent in this Agreement
or in any of the other Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, subject to the other terms and
conditions contained herein, the Administrative Agent may act in any manner it may deem
appropriate, in its discretion, given the Administrative Agent’s own interest in the Collateral as
a Lender and that the Administrative Agent shall have no duty or liability whatsoever to any other
Lender or Issuing Lender.




          (d) Each Lender represents to the Administrative Agent and each other Lender that it in good
faith is not, directly or indirectly (by negative pledge or otherwise), relying upon any Margin
Stock as collateral in the extension or maintenance of the credit provided for in this Agreement.




     Section 12.11 Agency for Perfection. Each Lender and Issuing Lender hereby appoints
(and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to
designate, appoint and authorize) the Administrative Agent and each other Lender and Issuing Lender
as agent and



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bailee for the purpose of perfecting the security interests in and Liens upon the Collateral
which, in accordance with Article 9 of the UCC can be perfected only by possession (or where the
security interest of a secured party with possession has priority over the security interest of
another secured party) and the Administrative Agent and each Lender and Issuing Lender hereby
acknowledges that it holds possession of any such Collateral for the benefit of the Secured
Parties. Should any Lender or Issuing Lender obtain possession of any such Collateral, such Lender
shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s
request therefor shall deliver such Collateral to the Administrative Agent or in accordance with
the Administrative Agent’s instructions.




     Section 12.12 Successor Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders and the Company. If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders. If no successor agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Company, a successor agent from among the Lenders. Upon the
acceptance by the Lender so selected of its appointment as successor agent hereunder, such
successor agent shall succeed to all of the rights, powers and duties of the retiring
Administrative Agent and the term “Administrative Agent” as used herein and in the other Loan
Documents shall mean such successor agent and the retiring Administrative Agent’s appointment,
powers and duties as the Administrative Agent shall be terminated. After any retiring
Administrative Agent’s resignation hereunder as the Administrative Agent, the provisions of this
Article 12 and Section 14.4 shall inure to its benefit as to any actions taken or
omitted by it while it was the Administrative Agent under this Agreement. If no successor agent
has accepted appointment as the Administrative Agent by the date which is thirty (30) days after
the date of a retiring Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nonetheless thereupon become effective and the Lenders shall perform all
of the duties of the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above (except that in the case of any Collateral
held by the existing Administrative Agent on behalf of the Secured Parties under the Loan
Documents, the retiring Administrative Agent shall continue to hold such Collateral until such
time as a successor Administrative Agent is appointed).



     Section 12.13 Other Agent Designations. The Administrative Agent may at any time and
from time to time determine that a Lender may, in addition, be a “Syndication Agent”,
“Documentation Agent” or similar designation hereunder and enter into an agreement with such Lender
to have it so identified for purposes of this Agreement. Any such designation shall be effective
upon written notice by the Administrative Agent to the Administrative Borrower of any such
designation. Any Lender that is so designated as a Syndication Agent, Documentation Agent or such
similar designation by the Administrative Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or any of the other Loan Documents other than those
applicable to all Lenders as such. Without limiting the foregoing, the Lenders so identified shall
not have or be deemed to have any fiduciary relationship with any Lender and no Lender shall be
deemed to have relied, nor shall any Lender rely, on a Lender so identified as a Syndication Agent,
Documentation Agent or such similar designation in deciding to enter into this Agreement or in
taking or not taking action hereunder.



ARTICLE 13

GUARANTY




     Section 13.1 The Guaranty. In order to induce the Lenders to enter into this
Agreement and to extend credit hereunder or any Lender (or its Affiliates) to provide any Bank
Products and in recognition of the direct benefits to be received by the Guarantors from the
extensions of credit hereunder and the provision of Bank Products, each Guarantor hereby
unconditionally and irrevocably, jointly and severally, guarantees as primary obligor and not
merely as surety, the full and prompt payment when due, whether



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upon maturity, by acceleration or otherwise, of any and all of the Obligations. Each Guarantor
agrees that this Guaranty is a continuing, unconditional guaranty of payment and performance and
not of collection, and that its obligations under this Guaranty shall be primary, absolute and
unconditional. If any or all of the Obligations becomes due and payable hereunder or in connection
with any Bank Product, each Guarantor unconditionally promises to pay such Obligations to the
Administrative Agent, the Lenders, the Issuing Lender or their respective order, on demand,
together with any and all reasonable expenses that may be incurred by the Administrative Agent or
the Lenders in collecting any of the Obligations.



Notwithstanding any provision to the contrary contained herein or in any other of the Loan
Documents, to the extent the obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the obligations of each such
Guarantor hereunder shall be limited to the maximum amount that is permissible under applicable law
(whether federal or state).




     Section 13.2 Bankruptcy. Additionally, each of the Guarantors unconditionally and
irrevocably guarantees, jointly and severally, the payment of any and all Obligations whether or
not due or payable by any Borrower upon the occurrence of any of the events specified in
Sections 11.1(f) and 11.1(g), and unconditionally promises to pay such Obligations
to the Administrative Agent for the account of itself and the Lenders, or order, on demand, in
lawful money of the United States. Each of the Guarantors further agrees that to the extent that
any Loan Party shall make a payment or a transfer of an interest in any property to the
Administrative Agent or any Lender, which payment or transfer or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise is avoided, and/or required to
be repaid to a Loan Party, the estate of a Loan Party, a trustee, receiver, interim receiver,
monitor or any other party under any bankruptcy law, state, federal, provincial or foreign law,
common law or equitable cause, then to the extent of such avoidance or repayment, the obligation or
part thereof intended to be satisfied shall be revived and continued in full force and effect as if
said payment had not been made.



     Section 13.3 Nature of Liability. The liability of each Guarantor hereunder is
exclusive and independent of any security for or other guaranty of the Obligations whether executed
by any such Guarantor, any other guarantor or by any other party, and no Guarantor’s liability
hereunder shall be affected or impaired by (a) any direction as to application of payment by a
Borrower or by any other party, (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Obligations, (c) any payment on or in
reduction of any such other guaranty or undertaking, (d) any dissolution or termination of, or
increase, decrease or change in personnel by, a Loan Party, or (e) any payment made to the
Administrative Agent or the Lenders on the Obligations that the Administrative Agent or such
Lenders repay a Loan Party pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Guarantors waives any right to the
deferral or modification of its obligations hereunder by reason of any such proceeding.



     Section 13.4 Independent Obligation. The obligations of each Guarantor hereunder are
independent of the obligations of any other Loan Party in respect of the Obligations, and a
separate action or actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other Loan Party and whether or not any other Loan Party is joined in
any such action or actions.



     Section 13.5 Authorization. Each of the Guarantors authorizes the Administrative Agent
and each Lender without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder, from time to time to
(a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Obligations or any part thereof in accordance with this Agreement
or the



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agreements governing Bank Products, including any increase or decrease of the rate of interest
thereon, (b) take and hold security from any Guarantor or any other party for the payment of this
Guaranty or the Obligations and exchange, enforce, waive and release any such security, (c) apply
such security and direct the order or manner of sale thereof as the Administrative Agent and the
Lenders in their discretion may determine and (d) release or substitute any one or more endorsers
or obligors.




     Section 13.6 Reliance. It is not necessary for the Administrative Agent or the Lenders
to inquire into the capacity or powers of any Borrower or other obligor of the Obligations or the
officers, directors, members, partners or agents acting or purporting to act on its behalf, and any
Obligations made or created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.



     Section 13.7 Waiver.



          (a) Each of the Guarantors waives any right (except as shall be required by applicable law and
cannot be waived) to require the Administrative Agent or any Lender to (i) proceed against any
Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held
from any Borrower, any other guarantor or any other party, or (iii) pursue any other remedy in the
Administrative Agent’s or any Lender’s power whatsoever. Each of the Guarantors waives any defense
based on or arising out of any defense of any Borrower, any other guarantor or any other party
other than payment in full of the Obligations, including without limitation any defense based on or
arising out of the disability of any Borrower, any other guarantor or any other party, or the
unenforceability of the Obligations or any part thereof from any cause, or the cessation from any
cause of the liability of any Borrower other than payment in full of the Obligations. The
Administrative Agent may, at its election, foreclose on or otherwise enforce its rights under any
security held by the Administrative Agent by one or more judicial or nonjudicial sales (to the
extent such sale is permitted by applicable law), or exercise any other right or remedy the
Administrative Agent or any Lender may have against any Borrower or any other party, or any
security, without affecting or impairing in any way the liability of any Guarantor hereunder except
to the extent the Obligations have been paid in full and the Commitments have been terminated. Each
of the Guarantors waives any defense arising out of any such election by the Administrative Agent
or any of the Lenders, even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantors against any Borrower or any
other party or any security.




          (b) Each of the Guarantors waives all presentments, demands for performance, protests and
notices, including without limitation notices of nonperformance, notice of protest, notices of
dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional Obligations. Each Guarantor assumes all responsibility for being and
keeping itself informed of each Borrower’s or other obligor’s financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature,
scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that
neither the Administrative Agent nor any Lender shall have any duty to advise such Guarantor of
information known to it regarding such circumstances or risks.




          (c) Each of the Guarantors hereby agrees it will not exercise any rights of subrogation that
it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section
509 of the Bankruptcy Code or otherwise) to the claims of the Lenders against any Borrower or any
other guarantor or other obligor of the Obligations owing to the Administrative Agent and the
Lenders (collectively, the “Other Parties”) and all contractual, statutory or common law
rights of reimbursement, contribution or indemnity from any Other Party that it may at any time
otherwise have as a result of this Guaranty until such time as the Obligations shall have been paid
in full and the Commitments have been terminated. Each of the Guarantors hereby further agrees not
to exercise any




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right to enforce any other remedy which the Administrative Agent or the Lenders now have or
may hereafter have against any Other Party, any endorser or any other guarantor of all or any part
of the Obligations of any Borrower and any benefit of, and any right to participate in, any
security or collateral given to or for the benefit of the Administrative Agent and the Lenders to
secure payment of the Obligations until such time as the Obligations shall have been paid in full
and the Commitments have been terminated.




     Section 13.8 Contribution. Each Guarantor hereby agrees that to the extent that
another Guarantor shall have paid more than its proportionate share of any payment made hereunder,
such Guarantor shall be entitled to seek and receive contribution from and against any other
Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s
right of contribution shall be subject to the terms and conditions set forth in Section
13.7. The provisions of this Section 13.8 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and the other Secured Parties, and each
Guarantor shall remain liable to the Administrative Agent and the other Secured Parties for the
full amount of the Obligations of such Guarantor hereunder.



     Section 13.9 Limitation on Enforcement. The Lenders agree that this Guaranty may be
enforced only by the action of the Administrative Agent acting upon the instructions of the
Required Lenders and that no Lender or Bank Product Provider shall have any right individually to
seek to enforce or to enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of itself and the Lenders
under the terms of this Agreement. The Lenders further agree that this Guaranty may not be enforced
against any director, officer, employee or stockholder of the Guarantors.



     Section 13.10 Confirmation of Payment. The Administrative Agent and the Lenders will,
upon request after payment of the Obligations that are the subject of this Guaranty and termination
of the Commitments relating thereto, confirm to the Borrowers, Guarantors or any other Person that
such Obligations have been paid and the Commitments relating thereto terminated, subject to the
provisions of Section 14.2.



ARTICLE 14

MISCELLANEOUS




     Section 14.1 Notices.



          (a) All notices, requests and demands hereunder shall be in writing and deemed to have been
given or made: if delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next Business Day, one (1)
Business Day after sending; and if by certified mail, return receipt requested, five (5) days after
mailing. Notices delivered through electronic communications shall be effective to the extent set
forth in Section 14.1 below. All notices, requests and demands upon the parties are to be
given to the following addresses (or to such other address as any party may designate by notice in
accordance with this Section 14.1):




	 	 	 

	     If to any Loan Party:

	 	Atlantic Diving Supply, Inc.
	 

	 	Pinehurst Centre, Suite 350
	 

	 	477 Viking Drive
	 

	 	Virginia Beach, Virginia 23452
	 

	 	Attn: Patricia Bohlen, Chief Financial Officer
	 

	 	Telephone No.: (757) 965-8356
	 

	 	Telecopy No.: (757) 440-3011






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	          with a copy to:

	 	Morrison & Foerster LLP
	 

	 	1650 Tysons Blvd., Suite 400
	 

	 	McLean, VA 22102
	 

	 	Attn: Charles W. Katz, Esq.
	 

	 	Telephone No.: (703) 760-7319
	 

	 	Telecopy No.: (202) 912-2326
	 
	 	 
	     If to the Administrative Agent,
	 	 
	     Swingline Lender or Issuing Lender:

	 	Wachovia Bank, National Association
	 

	 	12 East 49th Street
	 

	 	New York, NY 10017
	 

	 	Attn: Tom Martin, Portfolio Management
	 

	 	Telephone No.: (212) 545-4367
	 

	 	Telecopy No.: (212) 545-4283
	 
	 	 
	          with a copy to:

	 	Winston & Strawn LLP
	 

	 	214 North Tryon Street, Suite 2200
	 

	 	Charlotte, NC 28202
	 

	 	Attn: Molly McGill, Esq.
	 

	 	Telephone No.: (704) 350-7767
	 

	 	Telecopy No.: (704) 350-7800






          (b) Notices and other communications to the Lenders and the Issuing Lender hereunder may be
delivered or furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent or as otherwise determined by
the Administrative Agent; provided that the foregoing shall not apply to notices to any
Lender or Issuing Lender pursuant to Article 2 if such Lender or Issuing Lender, as
applicable, has notified the Administrative Agent that it is incapable of receiving notices under
such Section by electronic communication. Unless the Administrative Agent otherwise requires, (i)
notices and other communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written acknowledgement);
provided that if such notice or other communication is not given during the normal business
hours of the recipient, such notice shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications posted to an Internet
or intranet website shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in the foregoing clause (i) of notification that such notice or
communications is available and identifying the website address therefor.




     Section 14.2 Amendments and Waivers.



          (a) Neither this Agreement nor any other Loan Document nor any terms hereof or thereof may be
amended, waived, discharged or terminated unless such amendment, waiver, discharge or termination
is in writing signed by the Administrative Agent and the Required Lenders or at the Required
Lenders’ option, by the Administrative Agent with the authorization or consent of the Required
Lenders, and as to amendments to any of the Loan Documents, by each Loan Party (except for
amendments to Article 12 that relate solely to the rights, duties and obligations of the
Administrative Agent and are not adverse to the interests of the Loan Parties) and such amendment,
waiver, discharge or termination shall be effective and binding as to the Administrative Agent, all
the Lenders and the Issuing Lender only in the specific instance and for the specific purpose for
which given; except, that, no such amendment, waiver, discharge or termination shall:




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          (i) reduce the interest rate or any fees or extend the time of payment of
principal, interest or any fees or reduce the principal amount of any Loan or Letter of
Credit Obligations, in each case without the consent of each Lender directly affected
thereby (it being understood and agreed that any change to the definition of Average Excess
Availability or Excess Availability or in each case in the component definitions thereof
shall not constitute a reduction in the rate of interest); provided that only the
consent of the Required Lenders shall be necessary to waive any obligation of the Borrowers
to pay interest at the Default Rate during the continuance of an Event of Default,




          (ii) increase the Commitment of any Lender over the amount thereof then in effect or
provided hereunder, in each case without the consent of such Lender,




          (iii) subordinate the priority of any Liens granted to the Administrative Agent under
the Loan Documents to Liens granted to any other Person (other than Liens permitted
pursuant to Section 10.2) without the consent of the Administrative Agent and all
of the Lenders (other than any Defaulting Lender);




          (iv) release all or substantially all of the value of the Collateral or release all a
substantially all of the value of the Guaranties of the Guarantors under the Loan Documents
(except as expressly required hereunder or under any of the other Loan Documents or
applicable law and except as permitted under Section 12.10), without the consent of
the Administrative Agent and all of the Lenders (other than any Defaulting Lender),




          (v) reduce any percentage specified in the definition of Required Lenders without the
consent of the Administrative Agent and all of the Lenders (other than any Defaulting
Lender),




          (vi) consent to the assignment or transfer by any Loan Party of any of their rights
and obligations under this Agreement (except as permitted pursuant to Section
10.4), without the consent of the Administrative Agent and all of the Lenders (other
than any Defaulting Lender),




          (vii) amend, modify or waive any terms of this Section 14.2, the definition of
Pro Rata Shares or the application of payments in Section 3.4 or 11.3,
without the consent of the Administrative Agent and all of the Lenders, and




          (viii) increase the advance rates constituting part of the Borrowing Base (or amend or
modify any of the defined terms used therein that would have the direct effect of
increasing the Borrowing Base or Excess Availability) or increase the Letter of Credit
Limit, without the consent of the Administrative Agent and all of the Lenders.



     Notwithstanding the foregoing clause (a):




          (A) this Agreement may be amended to increase the interest rate or any fees
hereunder solely with the consent of the Administrative Agent and Borrowers;




          (B) this Agreement and the other Loan Documents may be amended to reflect
definitional, technical and conforming modifications to the extent necessary to
effectuate any Facility Increase pursuant to Section 2.7 with the prior
written consent of the Administrative Agent, the Loan Parties and each Lender or
Eligible Assignee participating in such Facility Increase pursuant to documentation
satisfactory to the



112









 







Administrative Agent and the Loan Parties without the consent of any other
Lender or Issuing Lender;




          (C) modifications to the Loan Documents may be made to the extent necessary to
grant a security interest in additional collateral to the Administrative Agent for
the benefit of the Secured Parties with the prior written consent of the
Administrative Agent and the Loan Parties pursuant to documentation satisfactory to
the Administrative Agent and the Loan Parties without the consent of any Lender or
Issuing Lender; and




          (D) if the Administrative Agent and the Administrative Borrower shall have
jointly identified an obvious error or any error or omission of a technical or
immaterial nature, in each case, in any provision of the Loan Documents, then the
Administrative Agent and the Administrative Borrower shall be permitted to amend
such provision and such amendment shall become effective without any further action
or consent of any other party to any Loan Document.



          (b) The Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender shall
not, by any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any
of its or their rights, powers and/or remedies unless such waiver shall be in writing and signed as
provided herein. Any such waiver shall be enforceable only to the extent specifically set forth
therein. A waiver by the Administrative Agent, any Lender or Issuing Lender of any right, power
and/or remedy on any one occasion shall not be construed as a bar to, or waiver of, any such right,
power and/or remedy which the Administrative Agent, any Lender or Issuing Lender would otherwise
have on any future occasion, whether similar in kind or otherwise.




          (c) Notwithstanding anything to the contrary contained in Section 14.2(a) above, in
connection with any amendment, waiver, discharge or termination, in the event that any Lender whose
consent thereto is required shall fail to consent or fail to consent in a timely manner (such
Lender being referred to herein as a “Non-Consenting Lender”), but the consent of the
Required Lenders to such amendment, waiver, discharge or termination is obtained, then the
Administrative Borrower may, at its sole expense and effort, replace such Non-Consenting Lender
within one hundred twenty (120) days thereafter by requiring such Non-Consenting Lender to sell,
assign and transfer to an Eligible Assignee, without recourse, the Commitment of such
Non-Consenting Lender and all rights and interests of such Non-Consenting Lender pursuant thereto;
provided that such Eligible Assignee consents to such amendment, waiver, discharge or
termination. The Administrative Borrower shall provide the Administrative Agent and the
Non-Consenting Lender with prior written notice of its intent to exercise its right under this
Section 14.2(c), which notice shall specify the date on which such purchase and sale shall
occur. Such purchase and sale shall be made in accordance with, and subject to, the provisions of
Section 14.11 (including, without limitation, payment to the Administrative Agent by the
Administrative Borrower of the assignment fee specified in Section 14.11) and pursuant to
the terms of an Assignment and Assumption (whether or not executed by the Non-Consenting Lender),
except that on the date of such purchase and sale, such Eligible Assignee specified by the
Administrative Borrower, shall pay to the Non-Consenting Lender (except as the Eligible Assignee
and such Non-Consenting Lender may otherwise agree) the amount equal to: (i) the principal balance
of the Loans held by the Non-Consenting Lender outstanding as of the close of business on the
Business Day immediately preceding the effective date of such purchase and sale, plus (ii)
amounts accrued and unpaid in respect of interest and fees payable to the Non-Consenting Lender to
the effective date of the purchase (but in no event shall the Non-Consenting Lender be deemed
entitled to any early termination fee). The Administrative Agent is hereby irrevocably appointed as
attorney-in-fact to execute any such Assignment and Assumption if the Non-Consenting Lender fails
to execute same.




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          (d) The consent of the Administrative Agent shall be required for any amendment, waiver
or consent affecting the rights or duties of the Administrative Agent hereunder or under any of the
other Loan Documents, in addition to the consent of the Lenders otherwise required by this
Section 14.2 and the exercise by the Administrative Agent of any of its rights hereunder
with respect to Reserves or Eligible Accounts or Eligible Inventory shall not be deemed an
amendment to the advance rates provided for in this Section 14.2. The consent of Issuing
Lender shall be required for any amendment, waiver or consent affecting the rights or duties of
Issuing Lender hereunder or under any of the other Loan Documents, in addition to the consent of
the Lenders otherwise required by this Section 14.2,
provided that the consent of
Issuing Lender shall not be required for any other amendments, waivers or consents. The consent of
the Swingline Lender shall be required for any amendment, waiver or consent affecting the rights or
duties of the Swingline Lender hereunder or under any of the other Loan Documents, in addition to
the consent of the Lenders otherwise required by this Section 14.2. Notwithstanding
anything to the contrary contained in Section 14.2(a) above, (i) in the event that the
Administrative Agent shall agree that any items otherwise required to be delivered to the
Administrative Agent as a condition of the initial Loans and Letters of Credit hereunder may be
delivered after the Closing Date (including, without limitation, pursuant to Section 9.15),
the Administrative Agent may, in its discretion, agree to extend the date for delivery of such
items to a date not later than 180 days after the Closing Date or take such other action as the
Administrative Agent may deem appropriate as a result of the failure to receive such items as the
Administrative Agent may determine or may waive any Event of Default as a result of the failure to
receive such items, in each case without the consent of any Lender and (ii) the Administrative
Agent may consent to any change in the type of organization, jurisdiction of organization or other
legal structure of any Loan Party or any of its Subsidiaries not prohibited by the terms of this
Agreement and amend the terms hereof or of any of the other Loan Documents as may be necessary or
desirable to reflect any such change, in each case without the approval of any Lender.




          (e) The consent of the Administrative Agent and a Bank Product Provider that is providing Bank
Products and has outstanding any such Bank Products at such time that are secured hereunder shall
be required for any amendment to the priority of payment of Obligations arising under or pursuant
to any such Hedge Agreements of a Loan Party or other Bank Products as set forth in Section
11.3.




     Section 14.3 Costs and Expenses. Subject to any and all limitations and restrictions
on the obligation of the Loan Parties to pay fees, costs and expenses contained elsewhere in this
Agreement or any other Loan Document, the Loan Parties, jointly and severally, shall pay (a) to the
Administrative Agent and its Affiliates on demand all reasonable out-of-pocket costs, expenses
(including all reasonable fees, charges and disbursements of counsel for the Administrative Agent),
filing fees and taxes paid or payable in connection with the preparation, negotiation, execution,
delivery, recording, syndication, and administration of this Agreement, the other Loan Documents
and all other documents related hereto or thereto, including any amendments, supplements or
consents which may hereafter be contemplated (whether or not executed) or entered into in respect
hereof and thereof, (b) all reasonable out-of-pocket expenses incurred by the Issuing Lender in
connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, (c) to the Administrative Agent all reasonable out-of-pocket costs and
expenses (including the fees, charges and disbursements of any counsel for the Administrative
Agent), filing fees and taxes paid or payable in connection with the collection, liquidation,
enforcement and defense of the Obligations and the Administrative Agent’s rights in the Collateral,
including, without limitation: (i) all costs and expenses of filing or recording (including UCC
financing statement filing taxes and fees, documentary taxes, intangibles taxes and mortgage
recording taxes and fees, if applicable); (ii) costs and expenses and fees for insurance premiums,
inspections, appraisal fees and search fees, costs and expenses of Patriot Act compliance, costs
and expenses of remitting loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the Blocked Accounts, together with the Administrative Agent’s
customary charges and fees



114









 




with respect thereto; (iii) costs and expenses of preserving and protecting the Collateral;
(iv) costs and expenses paid or actually incurred in connection with obtaining payment of the
Obligations, enforcing the Liens of the Administrative Agent, selling or otherwise realizing upon
the Collateral, and otherwise enforcing the provisions of this Agreement and the other Loan
Documents or defending any claims made or threatened against the Administrative Agent or any
Lender arising out of the transactions contemplated hereby and thereby (including preparations for
and consultations concerning any such matters) and (v) all reasonable out-of-pocket expenses and
costs heretofore and from time to time hereafter incurred by the Administrative Agent during the
course of periodic field examinations of the Collateral and such Loan Party’s operations, plus a
per diem charge at the Administrative Agent’s then standard rate for the Administrative Agent’s
examiners in the field and office (which rate as of the Closing Date is $1,000 per person per day)
and (d) all reasonable out-of-pocket costs and expenses of the Administrative Agent, any Lender or
the Issuing Lender (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or the Issuing Lender) actually incurred in connection with the
enforcement or protection of its rights (i) in connection with this Agreement and the other Loan
Documents, including its rights under this Section or (ii) in connection with the Loans made or
the Letters of Credit issued hereunder, including all reasonable out-of-pocket expenses actually
incurred during any workout, restructuring or negotiations in respect of any Loans or Letters of
Credit.




     Section 14.4 Indemnification. Each Loan Party shall, jointly and severally, indemnify
and hold the Administrative Agent (and each sub-agent thereof), each Lender and Issuing Lender and
each Arranger, and their respective officers, directors, agents, employees, partners, advisors and
counsel and their respective affiliates (each such person being an “Indemnitee”), harmless
from and against any and all losses, claims, damages, liabilities, costs or expenses (including
reasonable fees, disbursements, settlement costs and other reasonable charges of counsel) imposed
on, incurred by or asserted against any of them in connection with any litigation, investigation,
claim or proceeding commenced or threatened related to (i) the negotiation, preparation, execution,
delivery, enforcement, performance or administration of this Agreement, any other Loan Documents,
or any undertaking or proceeding related to any of the transactions contemplated hereby or thereby,
(ii) any act, omission, event or transaction related or attendant thereto, including amounts paid
in settlement, court costs, and the fees and expenses of counsel or (iii) any Loan or Letter of
Credit or any documents, drafts or acceptances relating thereto, or the use or proposed use of the
proceeds therefrom or any action taken by the Issuing Lender with respect to any Letter of Credit
(including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit); provided, that Loan Parties shall not have any obligation under this
Section 14.4 to indemnify an Indemnitee to the extent such losses, claims, damages,
liabilities, costs or expenses (A) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful misconduct of such
Indemnitee or (B) result from a claim brought by any Loan Party against an Indemnitee for breach in
bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document and such Loan
Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a
court of competent jurisdiction. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 14.4 may be unenforceable because it violates any law or
public policy, each Loan Party shall pay the maximum portion which it is permitted to pay under
applicable law to the Indemnitees in satisfaction of indemnified matters under this Section
14.4. To the extent permitted by applicable law, no Loan Party shall assert, and each Loan
Party hereby waives, any claim against any Indemnitee, on any theory of liability for special,
indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out
of, in connection with, or as a result of, this Agreement, any of the other Loan Documents or any
undertaking or transaction contemplated hereby. No Indemnitee referred to above shall be liable for
any damages arising from the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information transmission systems
in connection with this Agreement or any of the other Loan Documents or the transaction
contemplated hereby or



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thereby. All amounts due under this Section 14.4 shall be payable upon demand.
The foregoing indemnity shall survive the payment of the Obligations and the termination of this
Agreement.




     Section 14.5 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.



          (a) The validity, interpretation and enforcement of this Agreement and the other Loan
Documents (except as otherwise provided therein) and any dispute arising out of the relationship
between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by
the internal laws of the State of New York but excluding any principles of conflicts of law or
other rule of law that would cause the application of the law of any jurisdiction other than the
laws of the State of New York.




          (b) The Loan Parties, the Administrative Agent, the Lenders and the Issuing Lender
irrevocably consent and submit to the exclusive jurisdiction of the courts of the State of New
York and the United States District Court for the Southern District of New York, whichever the
Administrative Agent may elect, and waive any objection based on venue or forum non conveniens
with respect to any action instituted therein arising under this Agreement or any of the other
Loan Documents or in any way connected with or related or incidental to the dealings of the
parties hereto in respect of this Agreement or any of the other Loan Documents or the transactions
related hereto or thereto, in each case whether now existing or hereafter arising, and whether in
contract, tort, equity or otherwise, and agree that any dispute with respect to any such matters
shall be heard only in the courts described above (except that the Administrative Agent and
Lenders shall have the right to bring any action or proceeding against any Loan Party or its or
their property in the courts of any other jurisdiction which the Administrative Agent deems
necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights
against any Loan Party or its or their property).




          (c) Each Loan Party hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by certified mail (return receipt requested)
directed to its address set forth herein and service so made shall be deemed to be completed five
(5) days after the same shall have been so deposited in the U.S. mail, or, at the Administrative
Agent’s option, by service upon any Loan Party (or the Administrative Borrower on behalf of such
Loan Party) in any other manner provided under the rules of any such courts. Within thirty (30)
days after such service, such Loan Party shall appear in answer to such process, failing which
such Loan Party shall be deemed in default and judgment may be entered by the Administrative Agent
against such Loan Party for the amount of the claim and other relief requested.




          (d) THE LOAN PARTIES, THE ADMINISTRATIVE AGENT, THE LENDERS AND THE ISSUING LENDER EACH HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE LOAN PARTIES, THE
ADMINISTRATIVE AGENT, THE LENDERS AND THE ISSUING LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND
THAT ANY LOAN PARTY, THE ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING LENDER MAY FILE AN
ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.










116









 








          (e) The Administrative Agent, the Lenders and the Issuing Lender shall not have any
liability to any Loan Party (whether in tort, contract, equity or otherwise) for losses suffered by
such Loan Party in connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Agreement, or any act, omission or event occurring in connection
herewith, unless it is determined by a final and non-appealable judgment or court order binding on
the Administrative Agent, such Lender and the Issuing Lender, that the losses were the result of
acts or omissions constituting gross negligence or willful misconduct. In any such litigation, the
Administrative Agent, the Lenders and the Issuing Lender shall be entitled to the benefit of the
rebuttable presumption that it acted in good faith and with the exercise of ordinary care in the
performance by it of the terms of this Agreement. Each Loan Party: (i) certifies that neither the
Administrative Agent, the Lender, the Issuing Lender nor any representative, the Administrative
Agent or attorney acting for or on behalf of the Administrative Agent, the Lender or the Issuing
Lender has represented, expressly or otherwise, that the Administrative Agent, the Lenders and the
Issuing Lender would not, in the event of litigation, seek to enforce any of the waivers provided
for in this Agreement or any of the other Loan Documents and (ii) acknowledges that in entering
into this Agreement and the other Loan Documents, the Administrative Agent, the Lenders and the
Issuing Lender are relying upon, among other things, the waivers and certifications set forth in
this Section 14.5 and elsewhere herein and therein.




     Section 14.6 Waiver of Notices. To the extent permitted under applicable law, each
Loan Party hereby expressly waives demand, presentment, protest and notice of protest and notice of
dishonor with respect to any and all instruments and chattel paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices of any kind or
nature whatsoever with respect to the Obligations, the Collateral and this Agreement, except such
as are expressly provided for herein. No notice to or demand on any Loan Party which the
Administrative Agent or any Lender may elect to give shall entitle such Loan Party to any other or
further notice or demand in the same, similar or other circumstances.



     Section 14.7 [INTENTIONALLY OMITTED].



     Section 14.8 Partial Invalidity. If any provision of this Agreement is held to be
invalid or unenforceable, such invalidity or unenforceability shall not invalidate this Agreement
as a whole, but this Agreement shall be construed as though it did not contain the particular
provision held to be invalid or unenforceable and the rights and obligations of the parties shall
be construed and enforced only to such extent as shall be permitted by applicable law.



     Section 14.9 Confidentiality.



          (a) Each Lending Party agrees to keep confidential any Information (as hereinafter defined);
provided that nothing herein shall prevent any Lending Party from disclosing such
Information (i) to any other Lending Party or any Affiliate of any Lending Party, or any officer,
director, employee, agent, auditor, attorney or advisor of any Lending Party or Affiliate of any
Lending Party (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (ii) to any other Person if it is reasonably necessary for the administration of the
Credit Facility provided hereunder (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (iii) as required by any law, rule, or regulation, (iv) upon the order
of any court or administrative agency, (v) upon the request or demand of any regulatory agency or
authority, (vi) that is or becomes available to the public or that is or becomes available to any
Lending Party (or any Affiliate of any Lender Party) on a non-confidential basis other than as a
result of a disclosure by any Lending Party prohibited by this Agreement, (vii) in connection with
any litigation to which such Lending Party or any of its Affiliates may be a party, (viii) to the
extent




117









 




necessary in connection with the exercise of any remedy under this Agreement or any other Loan
Document, (ix) subject to provisions substantially similar to those contained in this Section
14.9, to any actual Participant or Eligible Assignee or any Person proposed to become a
Participant or Eligible Assignee and (x) to Gold Sheets and other similar bank trade publications
(such information to consist of deal terms and other information customarily found in such
publications). Each Borrower hereby authorizes the Administrative Agent to use the name, logos and
other insignia of such Borrower provided hereunder in any “tombstone” or comparable advertising, on
its website or in other marketing materials of the Administrative Agent. As used herein, the term
“Information” means all written and electronic information concerning the Company or any of
its Subsidiaries that is furnished (whether before or after the date hereof) in connection with
this Agreement, any other Loan Document or the transactions contemplated hereby and thereby, by, or
on behalf of the Company or any such Subsidiary by any of its respective affiliates, directors,
officers, employees, advisors or authorized agents (collectively, “Representatives”) to any
Lender Party, including, but not limited to, all information, data or documents about any Loan
Party’s finances, organization, operations, research and development, manufacturing, technology,
sales, pricing, costs, cost structure, strategies, contracts, marketing, management, processes and
procedures, products or other business information, as well as any other information related to
this Agreement, any other Loan Document or the transactions contemplated hereby and thereby, and
all analyses, notes, compilations, or other documents prepared by any Lender Party which contain,
reflect or are derived from any such information.




          (b) In no event shall this Section 14.9 or any other provision of this Agreement, any
of the other Loan Documents or applicable law be deemed to (i) apply to or restrict disclosure of
information that has been or is made public by any Loan Party or any third party or otherwise
becomes generally available to the public other than as a result of a disclosure in violation
hereof, (ii) apply to or restrict disclosure of information that was or becomes available to the
Administrative Agent, any Lender (or any Affiliate of any Lender) or Issuing Lender on a
non-confidential basis from a person other than a Loan Party or (iii) require the Administrative
Agent, any Lender or the Issuing Lender to return any materials furnished by a Loan Party to the
Administrative Agent, a Lender or the Issuing Lender or prevent the Administrative Agent, a Lender
or the Issuing Lender from responding to routine informational requests in accordance with the Code
of Ethics for the Exchange of Credit Information promulgated by The Robert Morris Associates or
other applicable industry standards relating to the exchange of credit information. The obligations
of the Administrative Agent, the Lenders and the Issuing Lender under this Section 14.9
shall supersede and replace the obligations of the Administrative Agent, the Lenders and the
Issuing Lender under any confidentiality letter signed prior to the Closing Date or any other
arrangements concerning the confidentiality of information provided by any Loan Party to the
Administrative Agent or any Lender.




          (c) Each of the Lenders and the Issuing Lender acknowledges that (i) Information may include
material non-public information concerning an Loan Party or Subsidiary thereof; (ii) it has
developed compliance procedures regarding the use of material non-public information; and (iii) it
will handle such material non-public information in accordance with applicable law, including
federal and state securities laws.




     Section 14.10 Successors. This Agreement, the other Loan Documents and any other
document referred to herein or therein shall be binding upon and inure to the benefit of and be
enforceable by the Administrative Agent, the Lenders, the Issuing Lender, Loan Parties and their
respective successors and assigns, except that a Borrower may not assign its rights under this
Agreement, the other Loan Documents and any other document referred to herein or therein without
the prior written consent of the Administrative Agent and the Lenders. Any such purported
assignment without such express prior written consent shall be void. No Lender may assign its
rights and obligations under this Agreement, except as provided in Section 14.11 below.
The terms and provisions of this Agreement and the other



118









 




Loan Documents are for the purpose of defining the relative rights and obligations of Loan
Parties, the Administrative Agent, the Lenders and the Issuing Lender with respect to the
transactions contemplated hereby and there shall be no third party beneficiaries of any of the
terms and provisions of this Agreement or any of the other Loan Documents.




     Section 14.11 Successors and Assigns; Participations.



     (a) Successors and Assigns Generally. No Lender may assign or otherwise transfer any
of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions
of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent provided in
paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.



     (b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that any such
assignment shall be subject to the following conditions:




     (i) Minimum Amounts.




     (A) in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the case
of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no
minimum amount need be assigned; and




     (B) in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if “Trade
Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not
be less than $5,000,000 unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Administrative Borrower
otherwise consents (each such consent not to be unreasonably withheld or delayed);
provided that the Administrative Borrower shall be deemed to have given its
consent five (5) Business Days after the date written notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Administrative Borrower prior to such fifth
(5th) Business Day;




     (ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loan or the Commitment assigned;




     (iii) Required Consents. No consent shall be required for any assignment
except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:



119









 






     (A) the consent of the Administrative Borrower (such consent not to be
unreasonably withheld or delayed) shall be required unless (x) an Event of Default
has occurred and is continuing at the time of such assignment or (y) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund; provided, that
the Administrative Borrower shall be deemed to have consented to any such assignment
unless it shall object thereto by written notice to the Administrative Agent within
five (5) Business Days after having received notice thereof;




     (B) the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required if such assignment is to a
Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; and




     (C) the consents of the Issuing Lender and the Swingline Lender (such consents
not to be unreasonably withheld or delayed) shall be required for any assignment.




     (iv) Assignment and Assumption. The assignor and assignee to each assignment
shall execute and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500 for each assignment (provided, that
only one such fee will be payable in connection with simultaneous assignments to two or more
Approved Funds by a Lender), and the assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.




     (v) No Assignment to Certain Persons. No such assignment shall be made to
Holdings, the Company or any of their respective Affiliates or Subsidiaries.




     (vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.


Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c)
of this Section, from and after the effective date specified in each Assignment and Assumption, the
assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be
entitled to the benefits of Sections 4.2, 4.3, 4.4, 4.5,
4.6 and 14.3 with respect to facts and circumstances occurring prior to the
effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and obligations in accordance
with paragraph (d) of this Section.




     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in New York, New York, a copy of each
Assignment and Assumption and accession agreement delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of, and principal amounts
of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by the
Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior
notice.



120









 





     (d) Participations. Any Lender may at any time, without the consent of, or
notice to, the
Borrowers or the Administrative Agent, sell participations to any Person (other than a
natural person or
Holdings, the Company or any of the their respective Affiliates or Subsidiaries) (each, a
“Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Agreement (including
all or a portion
of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties
hereto for the performance of such obligations and (iii) the Borrowers, the Administrative
Agent and
Issuing Lender, the Swingline Lender and the other Lenders shall continue to deal solely and
directly with
such Lender in connection with such Lender’s rights and obligations under this Agreement.



     Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver or modification described in Section 14.2 that
directly affects such Participant and could not be affected by a vote of the Required Lenders.
Subject to paragraph (e) of this Section, the Borrowers agree that each Participant shall be
entitled to the benefits of Sections 4.2, 4.3,
4.4, 4.5 and 4.6 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant
to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 14.4 as though it were a Lender, provided such
Participant agrees to be subject to Section 3.4 as though it were a Lender.



     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 4.2, 4.3, 4.4, 4.5 and
4.6 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant
is made with the Administrative Borrower’s prior written consent. No Participant shall be entitled
to the benefits of Section 4.5 unless the Administrative Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 4.5 as though it were a Lender.



     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.



     (g) Assignment by Issuing Lender or Swingline Lender. Any Lender that is an Issuing
Lender or the Swingline Lender may at any time assign all of its Commitments pursuant to this
Section 14.11. If such Issuing Lender or Swingline Lender ceases to be a Lender, it may,
at its option, resign as Issuing Lender or Swingline Lender. Upon such resignation, the Issuing
Lender’s or Swingline Lender’s obligations to issue Letters of Credit or make Swingline Loans
shall terminate but it shall retain all of the rights and obligations of the Issuing Lender or
Swingline Lender hereunder with respect to Letters of Credit or Swingline Loans outstanding as of
the effective date of its resignation and all Letter of Credit Obligations or Swingline Loans with
respect thereto (including the right to require the Lenders to make Loans or fund risk
participations in outstanding Letter of Credit Obligations or Swingline Loans), shall continue.



     Section 14.12 Term.



          (a) This Agreement and the other Loan Documents shall become effective as of the date
set forth on the first page hereof and shall continue in full force and effect for a term ending on
the




121









 




Maturity Date, unless sooner terminated pursuant to the terms hereof. In addition, the
Borrowers may terminate this Agreement at any time upon five (5) Business Days prior written notice
to the Administrative Agent (which notice shall be irrevocable), such termination to become
effective upon the repayment in full of the Obligations. Upon the Maturity Date or any other
effective date of termination of the Loan Documents, the Obligations shall be repaid in full and
the Commitments shall be terminated.




          (b) Any reference herein or in any other Loan Document to the satisfaction, repayment
or payment in full of the Obligations shall mean that the Borrowers shall:





          (i) pay to the Administrative Agent all outstanding and unpaid Obligations
(including, without limitation, loan fees, service fees, professional fees, interest
(including interest accrued after the commencement of any case under the U.S. Bankruptcy
Code or any similar domestic or foreign similar statute), default interest, interest on
interest, and expense reimbursements, whether or not the same would be or is allowed or
disallowed in whole or in part in any case under the United States Bankruptcy Code or any
similar statute in any jurisdiction, but excluding (A) contingent obligations in respect of
indemnification, (B) Bank Product Obligations, (C) interest to the extent paid in excess of
amounts based on the pre-default rates (but not any other interest) and (D) fees paid in
respect of the waiver of an Event of Default, in each case as to amounts under clauses (C)
and (D) above only to the extent that such amounts are disallowed in any case under the
United States Bankruptcy Code); and




          (ii) furnish cash collateral to the Administrative Agent (or at the Administrative
Agent’s option, a letter of credit issued for the account of the Borrowers and at the
Borrowers’ expense, in form and substance reasonably satisfactory to the Administrative
Agent, by an issuer reasonably acceptable to the Administrative Agent and payable to the
Administrative Agent as beneficiary) in such amounts as the Administrative Agent determines
in good faith are reasonably necessary to secure the Administrative Agent, the Lenders, the
Issuing Lender and the Bank Product Providers from loss, cost, damage or expense, (including
attorneys’ fees and expenses) in connection with:




          (A) any contingent Obligations (including issued and outstanding Letter of
Credit Obligations and checks or other payments provisionally credited to the
Obligations and/or as to which the Administrative Agent or any Lender has not yet
received full and final payment);




          (B) any continuing obligations of the Administrative Agent or any Lender
pursuant to any Deposit Account Control Agreement; and




          (C) any of the Obligations arising under or in connection with any Bank
Products in such amounts as the Bank Product Provider providing such Bank Products
may require (as certified to the Administrative Agent pursuant to and in accordance
with Section 3.8 (unless such Obligations arising under or in connection
with any Bank Products are paid in full in cash and terminated in a manner
reasonably satisfactory to such Bank Product Provider)).



     The amount of such cash collateral (or letter of credit, as the Administrative Agent may
determine) as to any Letter of Credit Obligations shall be in the amount equal to one hundred five
percent (105%) of the amount of the Letter of Credit Obligations plus the amount of any
fees and expenses payable in connection therewith through the end of the latest expiration date of
the Letters of Credit giving rise to such Letter of Credit Obligations. Such payments in respect of
the Obligations and cash collateral shall be remitted by wire transfer in immediately available
Federal funds to the Administrative



122









 




Agent Payment Account or such other bank account of the Administrative Agent, as the
Administrative Agent may, in its discretion, designate in writing to the Administrative Borrower
for such purpose. Interest and fees shall be due until and including the next Business Day, if the
amounts so paid by the Borrowers to the Administrative Agent Payment Account or other bank account
designated by the Administrative Agent are received in such bank account later than 2:00 p.m.




          (c) No termination of the Commitments, this Agreement or any of the other Loan Documents shall
relieve or discharge any Loan Party of its respective duties, obligations and covenants under this
Agreement or any of the other Loan Documents until all Obligations have been fully and finally
discharged and paid, and the Administrative Agent’s continuing Lien upon the Collateral and the
rights and remedies of the Administrative Agent and the Lenders hereunder, under the other Loan
Documents and applicable law, shall remain in effect until all such Obligations have been fully and
finally discharged and paid. Accordingly, each Loan Party waives any rights it may have under the
UCC to demand the filing of termination statements with respect to the Collateral and the
Administrative Agent shall not be required to send such termination statements to Loan Parties, or
to file them with any filing office, unless and until this Agreement shall have been terminated in
accordance with its terms and all Obligations paid and satisfied in full; provided that the
Administrative Agent may release such security interests and take such further actions as
authorized pursuant to Section 12.10.




     Section 14.13 Entire Agreement. This Agreement, the other Loan Documents, any
supplements hereto or thereto, and any instruments or documents delivered or to be delivered in
connection herewith or therewith represents the entire agreement and understanding concerning the
subject matter hereof and thereof between the parties hereto, and supersede all other prior
agreements, understandings, negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether oral or written. In
the event of any inconsistency between the terms of this Agreement and any schedule or exhibit
hereto, the terms of this Agreement shall govern.



     Section 14.14 USA Patriot Act. Each Lender subject to the USA PATRIOT Act (Title III
of Pub.L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”)) hereby notifies
Loan Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify
and record information that identifies each person or corporation who opens an account and/or
enters into a business relationship with it, which information includes the name and address of
Loan Parties and other information that will allow such Lender to identify such person in
accordance with the Patriot Act and any other applicable law. Loan Parties are hereby advised that
any Loans or Letters of Credit hereunder are subject to satisfactory results of such verification.



     Section 14.15 Counterparts, Etc. This Agreement or any of the other Loan Documents may
be executed in any number of counterparts, each of which shall be an original, but all of which
taken together shall constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement or any of the other Loan Documents by telefacsimile or other electronic method of
transmission shall have the same force and effect as the delivery of an original executed
counterpart of this Agreement or any of such other Loan Documents. Any party delivering an executed
counterpart of any such agreement by telefacsimile or other electronic method of transmission shall
also deliver an original executed counterpart, but the failure to do so shall not affect the
validity, enforceability or binding effect of such agreement.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




123









 





     IN WITNESS WHEREOF, the Administrative Agent, the Lenders, and the Loan Parties have caused
these presents to be duly executed as of the day and year first above written.



	 	 	 	 	 	 	 

	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	ATLANTIC DIVING SUPPLY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Luke Hillier	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Luke Hillier	 	 
	 

	 	Title:
	 	Pres/CEO	 	 
	 
	 	 	 	 	 	 
	 	 	HOLDINGS:	 	 
	 
	 	 	 	 	 	 
	 	 	TACTICAL HOLDCORP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Luke Hillier	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Luke Hillier	 	 
	 

	 	Title:
	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	SUBSIDIARY GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	MAR-VEL INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Luke Hillier	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Luke Hillier	 	 
	 

	 	Title:
	 	President	 	 





[Loan and Security Agreement — Atlantic Diving Supply, Inc.]




 









 





	 	 	 	 	 	 	 

	 	 	THE ADMINISTRATIVE AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Administrative Agent, Issuing Lender and Swingline
Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas A. Martin	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Thomas A. Martin	 	 
	 

	 	Title:
	 	Director	 	 





[Loan and Security Agreement — Atlantic Diving Supply, Inc.]




 









 





	 	 	 	 	 	 	 

	 	 	LENDERS:	 	 
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas A. Martin	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Thomas A. Martin	 	 
	 

	 	Title:
	 	Director	 	 





[Loan and Security Agreement — Atlantic Diving Supply, Inc.]




 









 





	 	 	 	 	 	 	 

	 	 	SUNTRUST BANK, as a Syndication Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Edward D. Ridenhour	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Edward D. Ridenhour	 	 
	 

	 	Title:
	 	Managing Director	 	 





[Loan and Security Agreement — Atlantic Diving Supply, Inc.]




 









 





	 	 	 	 	 	 	 

	 	 	RBS BUSINESS CAPITAL, A DIVISION OF RBS ASSET FINANCE,
INC., A SUBSIDIARY OF RBS CITIZENS, NA,
as a Syndication Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian Baker
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Brian Baker	 	 
	 

	 	Title:
	 	Vice President	 	 





[Loan and Security Agreement-Atlantic Diving Supply, Inc.]




 









 





	 	 	 	 	 	 	 

	 	 	BANK OF AMERICA, N.A., as a Syndication Agent and a
Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Bryan Smith	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Bryan Smith	 	 
	 

	 	Title:
	 	Senior Vice President	 	 





[Loan and Security Agreement — Atlantic Diving Supply, Inc.]




 









 





	 	 	 	 	 	 	 

	 	 	SIEMENS FINANCIAL SERVICES, INC., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Kantes	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David Kantes	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jennifer Humphrey	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Jennifer Humphrey	 	 
	 

	 	Title:
	 	Vice President	 	 





[Loan and Security Agreement — Atlantic Diving Supply, Inc.]




 









 





	 	 	 	 	 	 	 

	 	 	PNC BANK, NATIONAL ASSOCIATION, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Janeann Fehrle	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Janeann Fehrle	 	 
	 

	 	Title:
	 	SVP	 	 





[Loan and Security Agreement — Atlantic Diving Supply, Inc.]




 









 





	 	 	 	 	 	 	 

	 	 	CAPITAL ONE LEVERAGE FINANCE CORPORATION, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael S. Burns	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael S. Burns	 	 
	 

	 	Title:
	 	Senior Vice President	 	 





[Loan and Security Agreement — Atlantic Diving Supply, Inc.]