EX-10.1






LOAN AND SECURITY AGREEMENT

by and among

ADC TELECOMMUNICATIONS, INC.

ADC TELECOMMUNICATIONS SALES, INC.

LGC WIRELESS, INC.,

as Borrowers

and

ADC DSL SYSTEMS, INC.

ADC INTERNATIONAL OUS, INC

ADC OPTICAL SYSTEMS, INC.

ADC INTERNATIONAL HOLDING INC.

as Guarantors




THE LENDERS AND ISSUING BANK FROM TIME TO TIME PARTY HERETO




WACHOVIA BANK, NATIONAL ASSOCIATION

as Administrative and Collateral Agent,

Syndication Agent, Lead Arranger and Lead Bookrunner

Dated: December 18, 2009




TABLE OF CONTENTS




	 	 	 
	SECTION 1.

SECTION 2.

2.1

2.2

2.3

2.4

2.5

2.6

2.7

SECTION 3.

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

3.10

3.11

3.12

SECTION 4.

4.1

4.2

SECTION 5.

5.1

5.2

5.3

SECTION 6.

6.1

6.2

6.3

6.4

6.5

6.6

6.7

6.8

6.9
	 	DEFINITIONS

CREDIT FACILITIES

Revolving Loans.

Letters of Credit.

Requests for Borrowings.

Prepayments.

Increase in Maximum Credit.

Joint and Several Liability of Borrowers.

Commitments.

INTEREST AND FEES

Interest.

Fees.

Inability to Determine Applicable Interest Rate.

Illegality.

Increased Costs.

Capital Requirements.

Certificates for Reimbursement.

Delay in Requests.

Mitigation; Replacement of Lenders.

Funding Losses.

Maximum Interest.

No Requirement of Match Funding.

CONDITIONS PRECEDENT

Conditions Precedent to Initial Revolving Loans and Letters of Credit.

Conditions Precedent to All Revolving Loans and Letters of Credit.

GRANT AND PERFECTION OF SECURITY INTEREST

Grant of Security Interest.

Perfection of Security Interests.

Special Provisions Relating to Collateral

COLLECTION AND ADMINISTRATION

Borrowers’ Loan Accounts.

Statements.

Lenders’ Evidence of Debt.

Register.

Promissory Notes.

Cash Management; Collection of Proceeds of Collateral.

Payments.

Taxes.

Use of Proceeds.








	 	6.10	 	Appointment of Administrative Borrower as Agent for Requesting Revolving Loans
and Receipts of Revolving Loans and Statements.





	 	 	 
	6.11

6.12

6.13

6.14

6.15

SECTION 7.

7.1

7.2

7.3

7.4

7.5

7.6

7.7

7.8

SECTION 8.

8.1

8.2

8.3

8.4

8.5

8.6

8.7

8.8

8.9

8.10

8.11

8.12

8.13

8.14

8.15

8.16

8.17

8.18

8.19

8.20

SECTION 9.

9.1

9.2

9.3

9.4

9.5

9.6

9.7

9.8

9.9

9.10

9.11

SECTION 10.

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

SECTION 11.

11.1

11.2

SECTION 12.

12.1

12.2

SECTION 13.

13.1

13.2

13.3

13.4

13.5

13.6

SECTION 14.

14.1

14.2

14.3

14.4

14.5

14.6

14.7

14.8

14.9

14.10

14.11

14.12

14.13

14.14

SECTION 15.

15.1

15.2

15.3

15.4

15.5

15.6

15.7

15.8

15.9

15.10
	 	Pro Rata Treatment.

Sharing of Payments, Etc.

Settlement Procedures.

Obligations Several; Independent Nature of Lenders’ Rights.

Bank Products.

COLLATERAL REPORTING AND COVENANTS

Collateral Reporting.

Accounts Covenants.

Inventory Covenants.

Equipment and Real Property Covenants.

Power of Attorney.

Bills of Lading and Other Documents of Title.

Right to Cure.

Access to Premises.

REPRESENTATIONS AND WARRANTIES

Existence, Power and Authority.

Name; Jurisdiction of Organization; Chief Executive Office; Collateral Locations.

Financial Statements; No Material Adverse Effect.

Priority of Liens; Title to Properties.

Tax Returns.

Litigation.

Compliance with Laws.

Environmental Compliance.

Employee Benefits.

Bank Accounts.

Intellectual Property.

Subsidiaries; Affiliates; Capitalization; Solvency.

Labor Disputes.

Restrictions on Subsidiaries.

Material Contracts.

Payable Practices.

OFAC.

Classification as “Senior Indebtedness”.

Accuracy and Completeness of Information.

Survival of Warranties; Cumulative.

AFFIRMATIVE COVENANTS

Maintenance of Existence.

New Collateral Locations.

Compliance with Laws, Regulations, Etc.

Payment of Taxes and Claims.

Insurance.

Financial Statements and Other Information.

Compliance with ERISA.

End of Fiscal Years; Fiscal Quarters.

License Agreements.

Additional Guaranties and Collateral Security; Further Assurances.

Costs and Expenses.

NEGATIVE COVENANTS

Sale of Assets, Consolidation, Merger, Dissolution, Etc.

Encumbrances.

Indebtedness.

Loans, Investments, Etc.

Restricted Payments.

Transactions with Affiliates.

Change in Business.

Limitation of Restrictions Affecting Subsidiaries.

Certain Payments of Indebtedness, Etc.

Modifications of Indebtedness, Organizational Documents and Certain Other Agreements.

License Agreements.

Foreign Assets Control Regulations, Etc.

FINANCIAL COVENANTS

Fixed Charge Coverage Ratio.

Minimum Liquidity.

EVENTS OF DEFAULT AND REMEDIES

Events of Default.

Remedies.

JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

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

Waiver of Notices.

Amendments and Waivers.

Waiver of Counterclaims.

Indemnification.

Currency Due.

THE AGENT

Appointment, Powers and Immunities.

Reliance by Agent.

Events of Default.

Wachovia in its Individual Capacity.

Indemnification.

Non-Reliance on Agent and Other Lenders.

Failure to Act.

Additional Revolving Loans.

Concerning the Collateral and the Related Loan Documents.

Field Audit, Examination Reports and other Information; Disclaimer by Lenders.

Collateral Matters.

Agency for Perfection.

Successor Agent.

Other Agent Designations.

TERM OF AGREEMENT; MISCELLANEOUS

Term.

Interpretative Provisions.

Notices.

Partial Invalidity.

Confidentiality.

Successors.

Assignments; Participations.

Entire Agreement.

USA Patriot Act.

Counterparts, Etc.







1




INDEX

TO

EXHIBITS AND SCHEDULES




	 	 	 
	Exhibit A

	 	Form of Assignment and Acceptance
	Exhibit B

	 	Borrowing Base Certificate
	Exhibit C

	 	Information Certificate
	Exhibit E

	 	Form of Compliance Certificate
	Exhibit F

	 	Form of Qualified Cash and Liquidity Report
	Schedule1.79

	 	Inactive Subsidiaries
	Schedule 1.126

	 	Pledged Equity Interests
	Schedule 4.1(g)

	 	Collateral Access Agreements






LOAN AND SECURITY AGREEMENT




This Loan and Security Agreement (this “Agreement”) dated December 18, 2009 is entered into by
and among ADC TELECOMMUNICATIONS, INC., a Minnesota corporation (“ADC”), ADC TELECOMMUNICATIONS
SALES, INC., a Minnesota corporation (“ADC Sales”), and LGC WIRELESS, INC., a Delaware corporation
(“Wireless” and together with ADC and ADC Sales, individually each, a “Borrower” and collectively,
“Borrowers”, as hereinafter further defined), ADC DSL SYSTEMS, INC., a Delaware corporation
(“DSL”), ADC OPTICAL SYSTEMS, INC., a Delaware corporation (“Optical”), ADC INTERNATIONAL HOLDING
INC., a Delaware corporation (“International”), and ADC INTERNATIONAL OUS, INC., a Minnesota
corporation (“OUS” and, together with DSL, Optical, and International, individually each, a
“Guarantor”, and collectively, “Guarantors”, as hereinafter further defined), the parties hereto
from time to time as lenders, whether by execution of this Agreement or an Assignment and
Acceptance (each individually, a “Lender” and collectively, “Lenders” as hereinafter further
defined) and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, in its capacity
as agent for Issuing Bank and Lenders (in such capacity, “Agent” as hereinafter further defined).



W I T N E S S E T H:




WHEREAS, Borrowers (as hereinafter defined) and Guarantors (as hereinafter defined) have
requested that Agent, Issuing Bank and Lenders enter into financing arrangements with Borrowers
pursuant to which Lenders may make loans and provide other financial accommodations to Borrowers;
and



WHEREAS, Issuing Bank and each Lender are willing to agree (severally and not jointly) to make
such loans and provide such financial accommodations to Borrowers on a pro rata basis according to
its Commitment (as defined below) on the terms and conditions set forth herein and Agent is willing
to act as agent for Issuing Bank and 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 is hereby
acknowledged, the parties hereto agree as follows:



SECTION 1. DEFINITIONS



For purposes of this Agreement, the following terms shall have the respective meanings given
to them below:



1.1 “Accounts” shall mean, as to each Borrower and Guarantor, all present and future rights of
such Borrower and Guarantor to payment of a monetary obligation, whether or not earned by
performance, which is not evidenced by chattel paper or an instrument, (a) for property that has
been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services
rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, or (d)
arising out of the use of a credit or charge card or information contained on or for use with the
card.



1.2 “Acquired Business” shall mean, with respect to any transaction in which a Borrower,
Guarantor or one of their respective Subsidiaries acquires all or substantially all of the assets
of any Person or a business or division of such Person (whether pursuant to a merger or other
transaction), or all or a majority of the Equity Interests of a Person, the assets or Equity
Interests so acquired.



1.3 “Adjusted Eurodollar Rate” shall mean, 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 (i) the London Interbank Offered Rate for such
Interest Period by (ii) a percentage equal to: (A) one (1) minus (B) the Reserve
Percentage. For purposes hereof, “Reserve Percentage” shall mean 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 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 Lender. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Percentage.



1.4 “Administrative Borrower” shall mean ADC Telecommunications, Inc., a Minnesota
corporation, in its capacity as Administrative Borrower on behalf of itself and the other Borrowers
pursuant to Section 6.10 hereof and its successors and assigns in such capacity.



1.5 “Affiliate” shall mean, with respect to a specified Person, any other Person which
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 twenty (20%) percent 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 twenty (20%) percent or more of any class of Equity Interest
or in which such Person beneficially owns or holds twenty (20%) percent or more of the equity
interests and (c) any director or executive officer of such Person. 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 any Equity Interest, by agreement or otherwise.



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



1.7 “Agent Payment Account” shall mean account no. 5000000030266 of Agent at Wachovia Bank,
National Association, or such other account of Agent as Agent may from time to time designate to
Administrative Borrower as the Payment Account for purposes of this Agreement and the other Loan
Documents.



1.8 “Approved Fund” shall mean 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 bank revolving loans and similar extensions of credit in the ordinary
course of its business; provided, that, such Approved Fund must be administered 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.



1.9 “Assignment and Acceptance” shall mean an Assignment and Acceptance substantially in the
form of Exhibit A attached hereto (with blanks appropriately completed) delivered to Agent in
connection with an assignment of a Lender’s interest hereunder in accordance with the provisions of
Section 15.7 hereof.



1.10 “Bank Product Provider” shall mean any Lender or Affiliate of any Lender (in each case as
to any Lender or Affiliate to the extent approved by Agent as provided herein) that provides any
Bank Products to Borrowers or Guarantors.



1.11 “Bank Products” shall mean any one or more of the following types or services or
facilities provided to a Borrower or Guarantor by a Bank Product Provider: (a) credit cards, debit
cards or stored value cards or the processing of credit card, debit card or stored value card sales
or receipts, (b) cash management or related services, including: (i) the automated clearinghouse
transfer of funds for the account of a Borrower pursuant to agreement or overdraft for any accounts
of Borrowers maintained at Agent or any Bank Product Provider that are subject to the control of
Agent pursuant to any Deposit Account Control Agreement to which Agent or such Bank Product
Provider is a party, as applicable, and (ii) controlled disbursement services and (c) Hedge
Agreements. Any of the foregoing shall only be included in the definition of the term “Bank
Products” to the extent that the Bank Product Provider has been approved by Agent in writing with
notice to Administrative Borrower.



1.12 “Bankruptcy Code” shall mean the United States Bankruptcy Code, being Title 11 of the
United States Code, as the same now exists or may from time to time hereafter be amended, modified,
recodified or supplemented, together with all official rules, regulations and interpretations
thereunder or related thereto.



1.13 “Base Rate” shall mean the highest of (a) the rate from time to time publicly announced
by Wachovia Bank, National Association, or its successors, as its prime rate, subject to each
increase or decrease in such prime rate effective as of the day any such change occurs, whether or
not such announced rate is the best rate available at such bank, (b) the Federal Funds Effective
Rate from time to time plus one-half (.50%) percent, or (c) two (2%) percent. The term “Federal
Funds Effective Rate” shall mean, for any period, a fluctuating interest rate per annum equal, for
each day during such period, to the weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as
published 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 published for any day that is a
Business Day, the average of the quotations for such day on such transactions received by Agent
from three Federal Funds brokers of recognized standing selected by it..



1.14 “Base Rate Loans” shall mean any Loans or portion thereof on which interest is
payable based on the Base Rate in accordance with the terms thereof.



1.15 “Borrowers” shall mean, collectively, the following (together with their respective
successors and assigns): (a) ADC Telecommunications, Inc., a Minnesota corporation, (b) ADC
Telecommunications Sales, Inc., a Minnesota corporation, (c) LGC Wireless, Inc., a Delaware
corporation, and (d) any other Person that at any time after the date hereof becomes a Borrower;
each sometimes being referred to herein individually as a “Borrower”.



1.16 “Borrowing Base” shall mean, at any time, the amount equal to:



(a) the amount equal to eighty-five (85%) percent of the Eligible Accounts of Borrowers,
plus



(b) the amount equal to the least of: (i) $12,500,000, (ii) the amount equal to seventy-five
(75%) percent of the Eligible Progress Billing Accounts of Parent, or (iii) the amount equal to
seventeen (17%) percent of the Borrowing Base (for purposes of this clause (iii) only, the
“Borrowing Base” shall be equal to, at any time, the sum of (A) the amount set forth in Section
1.16(a), plus (B) the amount equal to the lesser of Section 1.16(b)(i) or (b)(ii), plus (C) the
amount equal to Section 1.16(c) minus (D) Reserves (exclusive of any Reserves maintained in respect
of Obligations relating to Hedge Agreements), plus



(c) the amount equal to the least of (i) the Inventory Loan Limit, (ii) fifty (50%) percent
multiplied by the Value of the Eligible Inventory of Borrowers or (iii) eighty-five (85%) percent
of the Net Recovery Percentage multiplied by the Value of such Eligible Inventory (by category),
minus



(d) Reserves.



1.17 “Borrowing Base Certificate” shall mean a certificate substantially in the form of
Exhibit B hereto, as such form, subject to the terms hereof, may from time to time be modified by
Agent, which is duly completed (including all schedules thereto) and executed by the chief
executive officer, chief financial officer, controller or other appropriate financial officer of
Administrative Borrower reasonably acceptable to Agent and delivered to Agent.



1.18 “Business Day” shall mean 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 Illinois or the
State of North Carolina, and a day on which 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 market.



1.19 “Canadian Dollars” and “C$” shall each mean the lawful currency of Canada.



1.20 “Capital Expenditures” shall mean with respect to any Person for any period the aggregate
of all expenditures by such Person and its Subsidiaries made during such period that in accordance
with GAAP are or should be included in “property, plant and equipment” or in a similar fixed asset
account on its balance sheet, whether such expenditures are paid in cash or financed and including
all Capitalized Lease Obligations paid or payable during such period, other than the interest
component of any Capitalized Lease Obligation (without duplication as to any period). Capital
Expenditures shall exclude (a) expenditures for assets purchased as part of a Permitted
Acquisition, and (b) expenditures for assets made in connection with the replacement, substitution,
restoration or repair of assets to the extent financed with insurance proceeds paid on account of
the loss of or damage to or from the sale or other disposition of the assets being replaced,
repaired, restored or substituted for to the extent permitted hereunder..



1.21 “Capitalized Lease Obligations” shall mean, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for as capital lease
obligations under GAAP and, for purposes of this definition, the amount of such obligations at any
date shall be the capitalized amount of such obligations at such date on a balance sheet prepared
in accordance with GAAP.



1.22 “Capital Leases” shall mean, 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.



1.23 “Cash Dominion Event” shall mean a period either commencing on the date that (a) an Event
of Default shall exist or have occurred and be continuing and ending on the date that such Event of
Default ceases to exist or be continuing or (b) the date that Agent notifies Administrative
Borrower that all proceeds deposited into in the Concentration Accounts must be transferred to the
Agent Payment Account on a daily basis and such Cash Dominion Event shall continue until such date
that Agent notifies Administrative Borrower otherwise.



1.24 “Cash Equivalents” shall mean, at any time, (a) any evidence of Indebtedness with a
maturity date of one hundred eighty (180) days or less issued or directly and fully guaranteed or
insured by the United States of America 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) any evidence of Indebtedness with a maturity date of one hundred eighty (180) days or
less issued or directly and fully guaranteed or insured by a foreign government or supranational
organization with a debt rating of AAA by S&P or Aaa by Moody’s up to an aggregate principal amount
outstanding at any time of not more than $10,000,000; (c) certificates of deposit or bankers’
acceptances with a maturity of one hundred eighty (180) 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; (d) commercial paper (including variable rate demand
notes) with a maturity of one hundred twenty (120) days or less issued by a corporation (except an
Affiliate of any Borrower or Guarantor) 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;
(e) other corporate debt instruments (including variable rate notes) with a maturity of one
hundred twenty (120) days or less issued by a corporation (except an Affiliate of any Borrower or
Guarantor) 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; (f) 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; (g) 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;
(h) Indebtedness issued by or directly and fully guaranteed by United States government sponsored
enterprises, including but not limited to Government National Mortgage Association, Federal
National Mortgage Association and Federal Home Loan Mortgage Corporation (or any agency thereof),
in each case maturing no later than one hundred twenty (120) days after the date of the issuance of
such Indebtedness and rated at least A-1 by S&P or at least P-1 by Moody’s; (i) 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 (h)above; and (j) indebtedness in an amount not to
exceed $51,000,000 issued by one or more federally-insured depository institutions, which
Indebtedness is fully guaranteed by the Federal Deposit Insurance Corporation pursuant to the
Temporary Liquidity Guarantee Program (or any successor thereto), which Indebtedness matures by its
terms no later than December 31, 2010. .



1.25 “Cash Management Accounts” shall have the meaning set forth in Section 6.6 hereof.



1.26 “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.



1.27 “Change of Control” means the occurrence of any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of 30% or more of the issued and
outstanding Voting Stock of Parent, (b) during any period of twelve consecutive calendar months,
individuals who at the beginning of such period constituted the board of directors of Parent
(together with any new directors whose election by the board of directors of Parent or whose
nomination for election by the stockholders of Parent was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the beginning of such period or
whose elections or nomination for election was previously so approved) cease for any reason other
than death or disability to constitute a majority of the directors then in office or (c) Parent
shall cease to own and control, directly or indirectly, all of the economic and voting rights
associated with all of the outstanding Equity Interests of any of the Borrowers (other than Parent)
or any Guarantor, except as otherwise permitted by Section 10.1 of this Agreement..



1.28 “Code” shall mean 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.



1.29 “Collateral” shall have the meaning set forth in Section 5 hereof.



1.30 “Collateral Access Agreement” shall mean an agreement in writing, in form and substance
reasonably satisfactory to Agent, from any lessor of premises to any Borrower or Guarantor, or any
other 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 any premises on which any of such
Collateral is located, in favor of Agent with respect to the Collateral at such premises or
otherwise in the custody, control or possession of such lessor, consignee or other person.



1.31 “Commercial LC” shall mean any letter of credit issued for the purpose of providing the
primary manner of payment for the purchase price of goods or services by a Borrower in the ordinary
course of the business of such Borrower (but not in the event that such Borrower fails to make
payment).



1.32 “Commitment” shall mean, at any time, as to each Lender, the principal amount set forth
below such Lender’s signature on the signatures pages hereto designated as the Commitment or on
Schedule 1 to the Assignment and Acceptance Agreement pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 15.7 hereof, as the same may be adjusted
from time to time in accordance with the terms hereof; sometimes being collectively referred to
herein as “Commitments”.



1.33 “Concentration Accounts” shall mean, collectively, the deposit accounts of Borrowers
identified on Schedule 8.10 of the Information Certificate as the concentration accounts and such
other accounts as may be established after the date hereof in accordance with the terms hereof used
to receive funds from the Cash Management Accounts; sometimes being referred to herein individually
as a “Concentration Account”.



1.34 “Consolidated EBITDA” shall mean, with respect to any period, an amount equal to (a) the
Consolidated Net Income of Parent and its Subsidiaries for such period determined in accordance
with GAAP, plus (b) each of the following, in each case to the extent deducted in the calculation
of such Consolidated Net Income for such period: (i) depreciation and amortization (including, but
not limited to, imputed interest and deferred compensation) of Parent and its Subsidiaries for such
period, all in accordance with GAAP, plus (ii) the Interest Expense of Parent and its Subsidiaries
for such period, plus (iii) charges for Federal, State, local and foreign income taxes for such
period, plus (iv) non-cash expenses related to stock based compensation.



1.35 “Consolidated Net Income” shall mean, for any period, the aggregate of the net income
(loss) of Parent and its Subsidiaries, on a consolidated basis, for such period (excluding to the
extent included therein (i) any extraordinary, one-time or non-recurring gains, and (ii)
extraordinary, one-time or non-recurring non-cash losses or charges (including, without limitation,
any impairment charges not to exceed $30,000,000, in the aggregate, related to auction rate
securities held by Parent as of the date of this Agreement) after deducting the Provision for Taxes
for such period and cash payments made in respect of losses described in clause (ii) subsequent to
the fiscal quarter in which the relevant non-cash losses were incurred, all as determined in
accordance with GAAP, provided, that, (a) the net income of Parent that is
accounted for by the equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid or payable to Parent or any Subsidiary; (b) except to the extent
included pursuant to the foregoing clause, the net income of any Person accrued prior to the date
it becomes a Subsidiary of Parent or is merged into or consolidated with such Person or any of its
Subsidiaries or that Person’s assets are acquired by such Parent or by any of its Subsidiaries
shall be excluded; (c) the net income (if positive) of any wholly-owned Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such wholly-owned
Subsidiary to Parent or to any other wholly-owned Subsidiary of Parent is not at the time permitted
by operation of the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such wholly-owned Subsidiary shall be
excluded. For the purposes of this definition, net income excludes any gain and non-cash loss
together with any related Provision for Taxes for such gain and non-cash loss realized upon the
sale or other disposition of any assets that are not sold in the ordinary course of business or of
any Equity Interests of Parent or a Subsidiary of Parent, and any net income or non-cash loss
realized as a result of changes in accounting principles or the application thereof to Parent and
any net income or non-cash loss realized as the result of the extinguishment of debt..



1.36 “Convertible 2003 Subordinated Note Indenture” shall mean the Indenture, dated
as of June 4, 2003, between Parent and Convertible Senior Note Trustee, with respect to the
Convertible 2003 Subordinated Notes, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.



1.37 “Convertible 2003 Subordinated Notes” shall mean the Floating Rate Convertible
Subordinated Notes due June 15, 2013, issued by Parent pursuant to the Convertible 2003
Subordinated Note Indenture, as amended, modified, supplemented, extended, renewed, restated or
replaced.



1.38 “Convertible 2007 Subordinated Note Indentures” means the Indentures dated as
of December 26, 2007 between the Parent and the Convertible Senior Note Trustee, as the same now
exist or may hereafter be amended, modified, supplemented, renewed, restated or replaced.



1.39 “Convertible 2007 Subordinated Notes” shall mean collectively, the 3.50%
Convertible Subordinated Notes due July 15, 2015, and the 3.50% Convertible Subordinated Notes due
July 15, 2017, issued by the Parent pursuant to the Convertible 2007 Subordinated Note Indentures,
in each case, as amended, modified, supplemented, extended, renewed, restated or replaced.



1.40 “Convertible Senior Note Trustee” shall mean U.S. Bank, National Association,
in its capacity as trustee under the Convertible 2003 Subordinated Note Indenture and Convertible
2007 Subordinated Note Indentures, and its successors and assigns, and any replacement trustee
permitted pursuant to the terms and conditions of the applicable Convertible Subordinated Note
Agreement.



1.41 “Convertible Subordinated Note Agreements” shall mean, individually and
collectively, the Convertible 2003 Subordinated Notes, the Convertible 2007 Subordinated Notes,
Convertible 2003 Subordinated Note Indenture, the Convertible 2007 Subordinated Note Indentures and
all other agreements, documents and instruments now or at any time hereafter executed and/or
delivered by Parent, any other Obligor or any other Person in connection with the issuance of the
Convertible 2003 Subordinated Notes or the Convertible 2007 Subordinated Notes, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.



1.42 “Credit Facility” shall mean the Revolving Loans and Letters of Credit provided to or for
the benefit of any Borrower or Guarantor pursuant to Sections 2 hereof.



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



1.44 “Defaulting Lender” shall have the meaning set forth in Section 6.13(f) hereof.



1.45 “Deposit Account Control Agreement” shall mean an agreement in writing, in form and
substance reasonably satisfactory to Agent, by and among Agent, the Borrower or Guarantor 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 Agent directing
disposition of the funds in the deposit account without further consent by such Borrower or
Guarantor and has such other terms and conditions as Agent may reasonably require.



1.46 “Disqualified Equity Interest” means, with respect to any Person, any Equity Interest in
such Person that, by its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable, either mandatory or at the option of the holder thereof) or upon the
happening of any event or condition:



(a) matures or is mandatorily redeemable (other than solely for Equity Interests in such
Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares
of such Equity Interests), whether pursuant to a sinking fund obligation or otherwise;



(b) is convertible or exchangeable at the option of the holder thereof for Indebtedness or
Equity Interests (other than solely for Equity Interests in such Person that do not constitute
Disqualified Equity Interest and cash in lieu of fractional shares of such Equity Interests); or



(c) is redeemable (other than solely for Equity Interests in such Person that do not
constitute Disqualified Equity Interest and cash in lieu of fractional shares of such Equity
Interests) or is required to be repurchased by such Person or any of its Affiliates, in whole or in
part, at the option of the holder thereof.



1.47 “Domestic Subsidiary” shall mean any Subsidiary of the Parent other than a Foreign
Subsidiary.



1.48 “Eligible Accounts” shall mean Accounts created by Borrowers that in each case at the
time of creation and at all times thereafter satisfy the criteria set forth below as determined by
Agent. Without limiting Agent’s discretion provided herein, Eligible Accounts shall not
include:.



(a) any Account which is not subject to a first priority perfected security interest in
favor of Agent;



(b) any Account which is subject to any security interest, lien or other encumbrance other
than the security interest and lien of Agent and those permitted in clauses (b), (c) and (i) of the
definition of the term Permitted Liens (but as to liens referred to in clause (i) only to the
extent that Agent has established a Reserve as provided therein) and any other liens permitted
under this Agreement that are subject to an intercreditor agreement in form and substance
reasonably satisfactory to Agent between the holder of such security interest or lien and Agent;



(c) any Account that is unpaid more than sixty (60) days after the original due date for them
or ninety (90) days after the date of the original invoice for it;



(d) any Account owing by an account debtor for which more than fifty (50%) percent of the
Accounts owing by such account debtor and its Affiliates are ineligible hereunder;



(e) any Account owing by a single account debtor (other than Verizon, Inc., and AT&T Inc. and
its Affiliates (collectively, “AT&T”)) to the extent that the aggregate amount of such Accounts
exceeds ten (10%) percent and such Accounts owing by each of Verizon and AT&T do not, in each case,
constitute more than thirty-five (35%) percent and fifty (50%) percent, respectively, of the
aggregate amount of all otherwise Eligible Accounts (but the portion of the Accounts not in excess
of such percentage that otherwise satisfy the criteria herein will be deemed Eligible Accounts);
provided, that, in case of Verizon and ATT, (i) such concentration limits shall apply only so long
as such account debtor has received a corporate credit rating of A or higher from S&P or a rating
of A2 or higher from Moody’s, (ii) the applicable concentration limit for each such account debtor
shall be reduced by five (5) percentage points for each level by which such account debtor’s credit
rating drops below A / A2, effective immediately upon any such change in credit rating, and (iii)
if either such account debtor has a credit rating lower than BBB- from S&P and a rating lower than
Baa3 from Moody’s, the concentration limit for such account debtor shall be 10%; provided, further,
with respect to the foregoing clauses (i) through (iii), if at any time there is a split in ratings
for any account debtor between S&P and Moody’s, such account debtor’s concentration limit shall be
determined by application of the higher credit rating, and, if neither S&P nor Moody’s shall then
be rating such account debtor, the concentration limits shall be determined on the basis of an
equivalent rating from another nationally recognized rating service.



(f) any Account with respect to which any covenant, representation, or warranty contained in
this Agreement or in the other Loan Documents has been breached or is not true in any material
respect;



(g) any Account that (i) does not arise from the sale of goods or performance of services in
the ordinary course of business, (ii) is not evidenced by an invoice or other documentation
reasonably satisfactory to Agent and which has been sent to the account debtor, (iii) represents an
Eligible Progress Account or other progress billing, (iv) is contingent upon such Person’s or its
Affiliates’ completion of any further performance, (v) represents a sale on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval, cash-on-delivery or any other repurchase or
return basis, other than Eligible Distributor Stock Accounts, (vi) relates to payments of interest,
(vii) has been invoiced more than once, or (viii) arises from advance billing for maintenance,
installation or other equipment services not yet rendered (this clause (g)(viii) shall not be
deemed to exclude Accounts that include charges for installation or other services performed in
connection with the sale of Inventory to the extent such Accounts are created after or
substantially concurrently with the performance of such services, provided, that,
in no event shall Accounts arising out of warranties and extended maintenance contracts be deemed
Eligible Accounts);



(h) any Account with respect to which any check or other instrument of payment has been
returned uncollected for any reason;



(i) any Account owed by an account debtor which has (i) applied for, suffered, or consented to
the appointment of any receiver, interim receiver, receiver-manager, custodian, trustee, or
liquidator of its assets, (ii) had possession of all or a material part of its property taken by
any receiver, interim receiver, receiver-manager, custodian, trustee or liquidator, (iii) filed, or
had filed against it, any request or petition for liquidation, reorganization, arrangement,
adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under
any Federal, State, Provincial or territorial bankruptcy laws (other than post-petition accounts
payable of an account debtor that is a debtor-in-possession under the US Bankruptcy Code and
acceptable to Agent), (iv) admitted in writing its inability, or is generally unable to, pay its
debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;



(j) any Account owed by any account debtor that has sold all or substantially all its assets
(unless such Account has been assumed by a Person that shall have acquired such assets and
otherwise satisfies the requirements set forth in this definition);



(k) any Account owed by an account debtor that (i) does not maintain its chief executive
office in the United States or Canada or (ii) is not organized under applicable law of the United
States, any State of the United States, Canada, or any Province of Canada, unless, in either case,
such Account is backed by a letter of credit reasonably acceptable to Agent and that has been
assigned to and is directly drawable by Agent;



(l) any Account owed in any currency other than US Dollars or Canadian Dollars (it being
acknowledged that the value of all Eligible Accounts denominated in Canadian Dollars shall be
calculated in US Dollars as set forth in Section 7.1(c) hereof and that such Accounts may at
Agent’s option be subject to Reserves);



(m) any Account owed by (i) the government (or any department, agency, public corporation, or
instrumentality thereof) of any country other than the United States, unless such Account is backed
by a letter of credit reasonably acceptable to Agent and which has been assigned to and is directly
drawable by Agent, or (ii) the government of the United States, or any department, agency, public
corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as
amended, as amended, as applicable, and any other steps necessary to perfect the security interest
and lien of Agent in such Account have been complied with to Agent’s reasonable satisfaction;



(n) any Account owed by any Affiliate, employee, officer, director or agent of any Borrower or
Guarantor;



(o) any Account that, for any account debtor, exceeds any credit limit with respect to such
account debtor determined by the applicable Borrower from time to time, to the extent of such
excess;



(p) any Account owed by an account debtor or any Affiliate of such account debtor to which any
Borrower or Guarantor is indebted, but only to the extent of such indebtedness, or which is subject
to any security, deposit, progress payment, retainage or other similar advance made by or for the
benefit of an account debtor, in each case to the extent thereof;



(q) any Account subject to any counterclaim, deduction, defense, setoff or dispute (including,
without limitation, with respect to any of the foregoing, in the form of a rebate or warranty
claim) but the portion of the Accounts of such account debtor 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 that otherwise satisfy the criteria for Eligible Accounts shall be deemed Eligible Accounts;



(r) any Account evidenced by or arising under any promissory note, lease, chattel paper, or
instrument;



(s) any Account owed by an account debtor located in any jurisdiction which requires filing of
a “Notice of Business Activities Report” or other similar report in order to permit such Borrower
to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower
has filed such report or qualified to do business in such jurisdiction or such failure to file and
inability to seek judicial enforcement is capable of being remedied without any material delay or
material cost;



(t) any Account with respect to which any Borrower or Guarantor has made any agreement with
the account debtor for any reduction thereof (to the extent of such reduction), other than
discounts and adjustments given in the ordinary course of business, or any Account which was
partially paid and such Borrower or Guarantor created a new receivable for the unpaid portion of
such Account;



(u) any Account that does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, State, Provincial, territorial or local;



(v) any Account arising from goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral) that indicates or
purports to indicate that any Person other than such Person has or has had an ownership interest in
such goods, or which indicates any party other than such Person as payee or remittance party;



(w) any Account that Agent in good faith determines may not be paid by reason of the account
debtor’s inability to pay; or



(x) Accounts owing to Wireless until such time as Agent shall have (i) received a Deposit
Account Control Agreement with respect to all of the deposit accounts maintained by Wireless into
which the proceeds of Accounts and other Collateral are deposited, and (ii) completed a field
examination with respect to the Accounts of Wireless in accordance with Agent’s customary
procedures and practices and as otherwise required by the nature and circumstances, the scope and
results of which shall be satisfactory to Agent, and any Accounts of Wireless shall only be
Eligible Accounts, to the extent that Agent determines (through such field examination or
otherwise) that the criteria for Eligible Accounts has been satisfied;



The criteria for Eligible Accounts set forth above may only be changed and any new criteria for
Eligible Accounts may only be established by Agent, upon not less than three (3) Business Days’
written notice to Administrative Borrower (such notice not to be required upon and during the
continuance of an Event of Default), based on either: (i) an event, condition or other circumstance
arising after the date hereof, or (ii) an event, condition or other circumstance existing on the
date hereof to the extent that such event, condition or circumstance has not been identified by a
Borrower to the field examiners of Agent prior to the date hereof, in either case under clause (i)
or (ii) which adversely affects or could reasonably be expected to adversely affect the Accounts as
determined by Agent. Any Accounts that are not Eligible Accounts shall nevertheless be part of the
Collateral..



1.49 “Excluded Deposit Account” shall mean any deposit account of Borrowers and
Guarantors (i) specifically and exclusively used for payroll, payroll taxes and other employee wage
and benefit payments to or for the benefit of any Borrower’s or Guarantor’s employees, (ii)
specifically and exclusively containing cash deposits securing Indebtedness as permitted by Section
10.3 hereof, and (iii) that is a zero balance account, provided, that, Agent has
received confirmation from such financial institution that such account is a zero balance account
(the deposit accounts described in clauses (i) through (iii) of this definition are collectively
referred to herein as the “Excluded Deposit Accounts”).



1.50 “Eligible Distributor Stock Account” shall mean any Account arising out of the sale of
Inventory by a Borrower to a distributor pursuant to an agreement that permits such distributor to
return not more than five (5%) percent of such Inventory but otherwise satisfies the criteria for
Eligible Accounts.



1.51 “Eligible In-Transit Inventory” shall mean finished goods Inventory owned by a Borrower
that otherwise satisfies the criteria for Eligible Inventory set forth herein but is located
outside of the United States of America and which is in transit to either the premises of a Freight
Forwarder in the United States of America, or the premises of such Borrower in the United States of
America which are either owned and controlled by such Borrower or leased by such Borrower (but only
if Agent has received a Collateral Access Agreement, in form and substance satisfactory to Agent,
duly authorized, executed and delivered by the applicable Freight Forwarder and the owner and
lessor of such leased premises), provided, that,



(a) Agent has a perfected security interest in and lien upon such Inventory,



(b) At all times that a Default or an Event of Default has occurred or is continuing, such
Inventory shall either be (i) the subject of a negotiable bill of lading (A) in which Agent is
named as the consignee (either directly or by means of endorsements), (B) that was issued by the
carrier respecting such Inventory that is subject to such bill of lading, and (C) that is in the
possession of Agent or the Freight Forwarder handling the importing, shipping and delivery of such
Inventory, in all cases, acting on Agent’s behalf subject to a Collateral Access Agreement duly
authorized, executed and delivered by such Freight Forwarder, or (ii) the subject of a negotiable
forwarder’s cargo receipt and such cargo receipt on its face indicates the name of the freight
forwarder as a carrier or multi-modal transport operator and has been signed or otherwise
authenticated by it in such capacity or as a named agent for or on behalf of the carrier or
multi-modal transport operator, in any case respecting such Inventory and either (A) names Agent as
the consignee (either directly or by means of endorsements), or (B) in the possession of Agent or
the Freight Forwarder handling the importing, shipping and delivery of such Inventory, in all
cases, acting on Agent’s behalf subject to a Collateral Access Agreement duly authorized, executed
and delivered by such Freight Forwarder,



(c) Borrower has title to such Inventory, and Agent shall have received such evidence thereof
as it may from time to time require,



(d) such Inventory is insured against types of loss, damage, hazards, and risks, and in
amounts, satisfactory to Agent in good faith and Agent shall have received a copy of the
certificate of marine cargo insurance in connection therewith in which Agent has been named as an
additional insured and loss payee in a manner acceptable to Agent,



(e) upon Agent’s request after and during the continuance of a Default or Event of Default,
Agent shall have received (i) a certificate duly executed and delivered by an officer of
Administrative Borrower on behalf of Borrowers certifying to Agent that, to the best of the
knowledge of Borrowers, such Inventory meets all of Borrowers’ representations and warranties
contained herein concerning Eligible Inventory and that the shipment as evidenced by the documents
conforms to the related order documents, and (ii) a copy of the invoice, packing slip and manifest
with respect thereto;



(e) such Inventory is not subject to a Letter of Credit,



(f) such Inventory shall not have been in transit for more than forty-five (45) days; and



(g) in no event shall the amount of Eligible Inventory attributable to Eligible In-Transit
Inventory included in the calculation of the Borrowing Base exceed $3,500,000.



1.52 “Eligible Inventory” shall mean Inventory, as to each Borrower, consisting of finished
goods held for resale in the ordinary course of the business of such Borrower and raw materials for
such finished goods, based on the criteria set forth below as determined by Agent. Without
limiting Agent’s discretion provided herein, Eligible Inventory shall not include:.



(a) work-in-process;



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



(c) spare parts for equipment;



(d) packaging and shipping materials;



(e) any Inventory that is not subject to a first-priority, perfected security interest in
favor of Agent;



(f) any Inventory that is subject to any security interest, lien or other encumbrance other
than the security interest and lien of Agent and those permitted in clauses (b), (c) and (i) of the
definition of the term Permitted Liens (but as to liens referred to in clause (i) only to the
extent that Agent has established a Reserve as provided therein) and any other liens permitted
under this Agreement that are subject to an intercreditor agreement in form and substance
reasonably satisfactory to Agent between the holder of such security interest or lien and Agent;



(g) any Inventory that, in Agent’s good faith determination, is slow moving, obsolete,
unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the
cost of such Inventory in the ordinary course of business or unacceptable due to age, type,
category and/or quantity;



(h) any Inventory with respect to which any covenant contained in this Agreement or any of the
other Loan Documents has been breached, any representation or warranty contained in this Agreement
or any of the other Loan Documents is not true in any material respect, or which does not conform
to all standards imposed by any Governmental Authority;



(i) any Inventory which any Person other than a Borrower shall (i) have any direct or indirect
ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or
invoice with respect to such Inventory as having or purporting to have an interest therein;



(j) any Inventory that constitutes, spare or replacement parts, subassemblies, packaging and
shipping material, manufacturing supplies, samples, prototypes, displays or display items,
bill-and-hold goods, goods that have been returned for repair, replacement of refurbishment, used,
repaired or refurbished goods, repossessed goods, unmerchantable, defective or damaged goods, goods
unfit for sale, goods held on consignment, goods which are not of a type held for sale in the
ordinary course of business, goods not salable at prices approximating at least the cost of such
Inventory in the ordinary course of business, or goods which are unacceptable due to age, type,
category and or quantity;



(k) Inventory located outside the United States of America except for Eligible In-Transit
Inventory;



(l) any Inventory that is not located at premises owned or leased and controlled by a Borrower
except for Eligible In-Transit Inventory;



(m) any Inventory located in any location leased by such Person or its Affiliates unless (i)
the lessor (and its mortgagee, if any) has delivered to Agent a Collateral Access Agreement that
Agent has acknowledged in writing is acceptable to it or (ii) a Reserve for rent, charges, and
other amounts due or to become due with respect to such facility has been established by Agent;



(n) any Inventory at any third party warehouse or in the possession of a bailee or being
processed offsite at a third party location or outside processor and, in any such case, is not
evidenced by a document of title, unless such warehouseman or bailee or the owner of such third
party location or such outside processor has delivered to Agent a Collateral Access Agreement that
Agent has acknowledged in writing is acceptable to it and such other documentation as Agent may
reasonably require;



(o) any Inventory that is a discontinued product or component thereof and is not immediately
usable in a continuing product;



(p) any Inventory that is the subject of a consignment by any Person as consignor;



(q) any Inventory that contains or bears any intellectual property rights licensed to any
Person unless Agent is reasonably satisfied that it may sell or otherwise dispose of such Inventory
without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor,
or (iii) incurring any liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;



(r) any Inventory that is not reflected in a current perpetual inventory report of such
Person; or



(s) any Inventory for which reclamation rights have been asserted by the seller.



The criteria for Eligible Inventory set forth above may only be changed and any new criteria for
Eligible Inventory may only be established by Agent, upon not less than three (3) Business Days’
prior written notice to Administrative Borrower (such notice not to be required upon and during the
continuance of an Event of Default), based on either: (i) an event, condition or other circumstance
arising after the date hereof, or (ii) an event, condition or other circumstance existing on the
date hereof to the extent that such event, condition or circumstance has not been identified by a
Borrower to the field examiners of Agent prior to the date hereof, in either case under clause (i)
or (ii) which adversely affects or could reasonably be expected to adversely affect the Inventory
as determined by Agent in good faith. Any Inventory that is not Eligible Inventory shall
nevertheless be part of the Collateral..



1.53 “Eligible Progress Billing Accounts” shall mean Accounts created by Parent that in
each case at the time of creation and at all times thereafter satisfy the criteria set forth for
“Eligible Accounts” except that such Accounts represent progress billings (or are otherwise
conditioned upon Borrower’s satisfactory completion of any further performance under the agreement
giving rise thereto).



1.54 “Eligible Transferee” shall mean (a) any Lender; (b) the parent company of any Lender
and/or any Affiliate of such Lender which is at least fifty (50%) percent owned by such Lender or
its parent company; (c) any person (whether a corporation, partnership, trust or otherwise) that is
an Approved Fund, and in each case under clauses (a), (b), and (c) above, is approved by Agent and
(d) any other commercial bank, financial institution or “accredited investor” (as defined in
Regulation D under the Securities Act of 1933) approved by Agent and Issuing Bank;
provided, that, (i) so long as no Default or Event of Default shall have occurred and
be continuing, Administrative Borrower shall have the right to approve assignments to Eligible
Transferees described in clauses (c) and (d) above (which approval shall not be unreasonably
withheld, conditioned or delayed; except if such assignment occurs upon the merger, consolidation,
sale or other disposition of all or any portion of Lender’s business, loan portfolio or other
assets, in which case no approval of Administrative Borrower shall be required) and (ii) neither
any Borrower nor any Guarantor or any Affiliate of any Borrower or Guarantor shall qualify as an
Eligible Transferee, and (iii) no Person to whom any Indebtedness which is in any way subordinated
in right of payment to any other Indebtedness of any Borrower or Guarantor shall qualify as an
Eligible Transferee, except as Agent may otherwise specifically agree.



1.55 “Environmental Laws” shall mean all foreign, Federal, State, Provincial and local laws
(including common law), legislation, rules, codes, licenses, permits (including any conditions
imposed therein), authorizations, binding judicial or administrative decisions, injunctions or
agreements between any Borrower or Guarantor 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
as now or may at any time be in effect during the term of this Agreement.



1.56 “Equipment” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and
Guarantor’s now owned and hereafter acquired equipment, wherever located, including machinery, data
processing and computer equipment (including embedded software), vehicles, tools, furniture,
fixtures, all attachments, accessions and property now or hereafter affixed thereto or used in
connection therewith, and substitutions and replacements thereof, wherever located.



1.57 “Equity Interests” shall mean, with respect to any Person, all of the shares, interests,
participations or other equivalents (however designated) of such Person’s capital stock or
partnership, limited liability company or other equity or ownership interests at any time
outstanding, all of the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other equity interests in) such Person, all of the
securities convertible into or exchangeable for shares of capital stock of (or other equity
interests in) such Person and all warrants, rights or options for the purchase or acquisition from
such Person of such shares (or such other equity interests), but excluding (a) any debt security
that is convertible into or exchangeable for any such shares (or such other equity interests) and
(b) any stock appreciation rights, interests in phantom equity plans or similar rights or
interests.



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



1.59 “ERISA Affiliate” shall mean any person required to be aggregated with any Borrower, any
Guarantor or any of its or their respective Subsidiaries under Sections 414(b), 414(c), 414(m) or
414(o) of the Code.



1.60 “ERISA Event” shall mean (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 any Borrower, Guarantor 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 any Borrower,
Guarantor or any ERISA Affiliate in excess of $1,000,000 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 $1,000,000.



1.61 “Eurodollar Rate Loans” shall mean any Loans or portion thereof on which interest is
payable based on the Adjusted Eurodollar Rate in accordance with the terms hereof.



1.62 “Event of Default” shall mean the occurrence or existence of any event or condition
described in Section 12.1 hereof.



1.63 “Excess Availability” shall mean the amount, as determined by Agent, calculated at any
date, equal to: (a) the lesser of: (i) the Borrowing Base and (ii) the Maximum Credit (in each
case under (i) or (ii) after giving effect to any Reserves other than any Reserves in respect of
Letter of Credit Obligations), minus (b) the sum of: (i) the amount of all then
outstanding and unpaid Obligations (but not including for this purpose Obligations arising pursuant
to any guarantees in favor of Agent and Lenders of the Obligations of the other Borrowers or any
outstanding Letter of Credit Obligations), plus (ii) the amount of all Reserves then
established in respect of Letter of Credit Obligations, plus (iii) the aggregate amount of
all then outstanding and unpaid trade payables and other obligations of Borrowers which are
outstanding more than sixty (60) days past due as of the end of the immediately preceding month or
at Agent’s option, as of a more recent date based on such reports as Agent may from time to time
specify (other than trade payables or other obligations being contested or disputed by Borrowers in
good faith), plus (iv) without duplication, the amount of checks issued by Borrowers to pay
trade payables and other obligations which are more than sixty (60) days past due as of the end of
the immediately preceding month or at Agent’s option, as of a more recent date based on such
reports as Agent may from time to time specify (other than trade payables or other obligations
being contested or disputed by Borrowers in good faith), but not yet sent..



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



1.65 “Exchange Rate” shall mean the prevailing spot rate of exchange of such bank as Agent may
reasonably select for the purpose of conversion of one currency to another, at or around 11:00 a.m.
New York time, on the date on which any such conversion of currency is to be made under this
Agreement.



1.66 “Excluded Collateral” shall have the meaning set forth in Section 5.3 hereof.



1.67 “Federal Funds Rate” shall mean, 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 Agent from three Federal Funds brokers
of recognized standing selected by it.



1.68 “Fee Letter” shall mean the letter agreement, dated of even date herewith, by and among
Borrowers, Guarantors and Agent, setting forth certain fees payable by Borrowers to Agent, as the
same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.



1.69 “Fixed Charge Coverage Ratio” shall mean, with respect to any date of determination, the
ratio of (a) the amount equal to Consolidated EBITDA of any Person and its Subsidiaries, on a
consolidated basis, for the immediately preceding four (4) consecutive fiscal quarters as of the
end of the most recent quarter for which Agent has received financial statements pursuant to
Section 9.6 hereof, to (b) Fixed Charges of such Person and its Subsidiaries, on a consolidated
basis, for such period.



1.70 “Fixed Charges” shall mean, as to any Person and its Subsidiaries, on a consolidated
basis, with respect to any period, the sum of, without duplication, (a) all Interest Expense paid
in cash, plus (b) all required principal payments of Indebtedness for borrowed money, and payments
of Indebtedness for the deferred purchase price of any property or services (including, without
limitation, any indemnification, adjustment of purchase price, earn-outs or other similar
obligations incurred in connection with any acquisition or sale or other disposition of assets) and
Capital Leases (and without duplication of items (a) and (b) of this definition, the interest
component with respect to Indebtedness under Capital Leases), plus (c) the amount of Capital
Expenditures of such Person and its Subsidiaries during such period to the extent not financed by
Indebtedness permitted hereunder for such purpose, plus (d) all taxes paid by such Person and its
Subsidiaries in cash during such period, plus (e) all dividends and distributions in respect of
Equity Interests paid by Parent and its Subsidiaries (other than dividends paid by Subsidiaries to
other Subsidiaries or Parent) during such period in cash.



1.71 “Foreign Subsidiary” shall mean any Subsidiary of Parent organized or incorporated under
the laws of any jurisdiction outside the United States and which has substantially all of its
respective operating assets outside of the United States; sometimes being referred to herein
collectively as a “Foreign Subsidiaries”.



1.72 “Freight Forwarders” shall mean persons as may be selected by Borrower after written
notice by Borrower to Agent to handle the receipt of Inventory within the United States of America
and/or to clear Inventory through U.S. Customs or other foreign export control authorities or
otherwise perform port of entry services to process Inventory imported by Borrower from outside the
United States of America (such persons sometimes being referred to herein individually as a
“Freight Forwarder”), provided, that, as to each such person, (a) Agent shall have
received a Collateral Access Agreement by such person in favor of Agent (in form and substance
satisfactory to Agent) duly authorized, executed and delivered by such person, (b) such agreement
shall be in full force and effect and (c) such person shall be in compliance in all material
respects with the terms thereof.



1.73 “GAAP” shall mean 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 are applicable to
the circumstances as of the date of determination consistently applied, provided,
that, in the event of any change in GAAP after the date hereof that affects the covenant in
Section 11.1 hereof, Administrative Borrower may by notice to Agent, or Agent may, and at the
request of Required Lenders shall, by notice to Administrative Borrower require that such covenants
be calculated in accordance with GAAP as in effect, and as applied by Parent and its Subsidiaries,
immediately before the applicable change in GAAP became effective, until either the notice from the
applicable party is withdrawn or such covenant is amended in a manner satisfactory to
Administrative Borrower, Agent and the Required Lenders. Administrative Borrower shall deliver to
Agent and upon Agent’s request, to each Lender at the same time as the delivery of any financial
statements given in accordance with the provisions of Section 9.6 hereof (i) a description in
reasonable detail of any material change in the application of accounting principles employed in
the preparation of such financial statements from those applied in the most recently preceding
monthly, quarterly or annual financial statements and (ii) a reasonable estimate of the effect on
the financial statements on account of such changes in application..



1.74 “Governmental Authority” shall mean the government of (a) the United States of
America and (b) Canada, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national body exercising such
function, such as the European Union or the European Central Bank).



1.75 “Guarantors” shall mean, collectively, the following (together with their respective
successors and assigns): (a) ADC DSL Systems, Inc., a Delaware corporation (“DSL”), (b) ADC Optical
Systems, Inc., a Delaware corporation (“Optical”), (c) ADC International Holding Inc., a Delaware
corporation (“International”), (d) ADC International OUS, Inc., a Minnesota corporation, and (e)
any other Person that at any time after the date hereof becomes party to a guarantee in favor of
Agent or any Lender in respect of or otherwise liable on or with respect to the Obligations or who
is the owner of any property which is security for the Obligations (other than a Borrower); each
sometimes being referred to herein individually as a “Guarantor”.



1.76 “Guaranty Obligations” shall mean, with respect to any Person, without duplication, any
obligations of such Person (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any
Indebtedness of any other Person in any manner, whether direct or indirect, and including, without
limitation, any obligation, whether or not contingent, (a) to purchase any such Indebtedness or any
property constituting security therefor, (b) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working capital, solvency or other
balance sheet condition of such other Person (including, without limitation, keep-well agreements,
maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of
any holder of Indebtedness of such other Person, (c) to lease or purchase property, securities or
services primarily for the purpose of assuring the holder of such Indebtedness, or (d) to otherwise
assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed
to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger)
of the Indebtedness in respect of which such Guaranty Obligation is made.



1.77 “Hazardous Materials” shall mean 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).



1.78 “Hedge Agreement” shall mean an agreement between any Borrower or Guarantor and Agent,
any other Bank Product Provider or other counterparty that is a swap agreement as such term is
defined in 11 U.S.C. Section 101, and including any rate swap agreement, basis swap, forward rate
agreement, commodity swap, interest rate option, forward foreign exchange agreement, spot foreign
exchange agreement, rate cap agreement rate, floor agreement, rate collar agreement, currency swap
agreement, cross-currency rate swap agreement, currency option, and any other similar agreement
(including any option to enter into any of the foregoing or a master agreement for any the
foregoing together with all supplements thereto) entered into for the purpose of protecting against
or managing exposure to fluctuations in interest or exchange rates, currency valuations or
commodity prices; sometimes being collectively referred to herein as “Hedge Agreements”.



1.79 “Inactive Subsidiary” shall mean, collectively, (a) each Subsidiary of Parent listed on
Schedule 1.79 hereto and (b) a Subsidiary of Parent designated in writing by Borrower to Agent
after the date hereof as an Inactive Subsidiary and agreed to by Agent, provided,
that, (i) such Subsidiary so designated after the date hereof shall only be considered an
Inactive Subsidiary to the extent that the representations with respect thereto set forth in
Section 8.12(e) hereof are true and correct with respect thereto and Agent shall have received such
evidence thereof as it may reasonably require and (ii) such Subsidiaries are sometimes referred to
herein collectively as “Inactive Subsidiaries.”



1.80 “Indebtedness” shall mean, with respect to any Person, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid or accrued, (d) 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), (e) all obligations of such Person issued or assumed as
the deferred purchase price of property or services purchased by such Person which are due six (6)
months or more from the date after such property is acquired or such services are completed, and
including, without limitation, customary indemnification, adjustment of purchase price or similar
obligations, earn-outs or other similar obligations, in each case, incurred in connection with a
Permitted Acquisition (but excluding trade debt and accrued expenses incurred in the ordinary
course of business on normal trade terms and not overdue by more than ninety (90) days) which would
appear as liabilities on a balance sheet of such Person in accordance with GAAP, (f) all
obligations of such Person under take-or-pay or similar arrangements or under commodities
agreements, (g) all Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any security interest in, lien or
other encumbrance upon, or payable out of the proceeds of production from property owned or
acquired by such Person, whether or not the obligations secured thereby have been assumed, (h) all
Guaranty Obligations of such Person with respect to Indebtedness of another Person, (i) the
principal portion of all obligations in respect of Capital Leases of such Person, (j) all
obligations of such Person under Hedge Agreements, (k) the maximum amount of all standby letters of
credit issued or bankers’ acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed), (l) all preferred
Equity Interests issued by such Person and which by the terms thereof could be (at the request of
the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration prior to the date which is ninety-one (91) days after the Maturity Date and other
Disqualified Equity Interests, (m) the principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet financing product
and (n) the Indebtedness of any partnership or unincorporated joint venture in which such Person is
a general partner or a joint venturer, but only to the extent such Person is liable for such
Indebtedness.



1.81 “Information Certificate” shall mean, collectively, the Information Certificates of
Borrowers and Guarantors constituting Exhibit C hereto containing material information with respect
to Borrowers and Guarantors, their respective businesses and assets provided by or on behalf of
Borrowers and Guarantors to Agent in connection with this Agreement and the other Loan Documents
and the financing arrangements provided for herein.



1.82 “Intellectual Property” shall mean, as to each Borrower and Guarantor, such Borrower’s
and Guarantor’s now owned and hereafter arising or acquired: patents, patent rights, patent
applications, copyrights, works which are the subject matter of copyrights, copyright applications,
copyright registrations, trademarks, servicemarks, trade names, trade styles, trademark and service
mark applications, and licenses and rights to use any of the foregoing and all applications,
registrations and recordings relating to any of the foregoing as may be filed in the United States
Patent and Trademark Office or in any similar office or agency of the United States, any State
thereof, any political subdivision thereof or in any other country or jurisdiction, together with
all rights and privileges arising under applicable law with respect to any Borrower’s or
Guarantor’s use of any of the foregoing; all extensions, renewals, reissues, divisions,
continuations, and continuations-in-part of any of the foregoing; all rights to sue for past,
present and future infringement of any of the foregoing; inventions, trade secrets, formulae,
processes, compounds, drawings, designs, blueprints, surveys, reports, manuals, and operating
standards; goodwill (including any goodwill associated with any trademark or servicemark, or the
license of any trademark or servicemark); customer and other lists in whatever form maintained;
trade secret rights, copyright rights, rights in works of authorship, domain names and domain name
registration; software and contract rights relating to computer software programs, in whatever form
created or maintained..



1.83 “Interest Expense” shall mean, for any period, as to any Person, as determined in
accordance with GAAP, the amount equal to total interest expense of such Person and its
Subsidiaries on a consolidated basis for such period, whether paid or accrued (including the
interest component of any Capital Lease for such period), and in any event, including, without
limitation, (a) discounts in connection with the sale of any Accounts, (b) bank fees, commissions,
discounts and other fees and charges owed with respect to letters of credit, banker’s acceptances
or similar instruments or any factoring, securitization or similar arrangements, (c) interest
payable by addition to principal or in the form of property other than cash and any other interest
expense not payable in cash, and (d) the costs or fees for such period associated with Hedging
Agreements to the extent not otherwise included in such total interest expense (excluding breakage
costs incurred in connection with the termination of Hedging Agreements on or about the date
hereof, if any), provided, that, Interest Expense shall not include, to the extent
treated as interest in accordance with GAAP, all non-cash amounts in connection with borrowed money
(including paid-in-kind interest).



1.84 “Interest Period” shall mean for any Eurodollar Rate Loan, a period of approximately one
(1), two (2) or three (3) months duration as any Borrower (or Administrative Borrower on behalf of
such Borrower) may elect, the exact duration to be determined in accordance with the customary
practice in the applicable London Interbank Offered Rate market; provided, that, such Borrower (or
Administrative Borrower on behalf of such Borrower) may not elect an Interest Period which will end
after the last day of the then-current term of this Agreement.



1.85 “Interest Rate” shall mean,



(a) Subject to clause (b) of this definition below:



(i) as to Base Rate Loans, a rate equal to two (2.00%) percent per annum in excess of the Base
Rate, and



(ii) as to Eurodollar Rate Loans, a rate equal to three and one-half (3.50%) percent per annum
in excess of the Adjusted Eurodollar Rate (in each case, based on the London Interbank Offered Rate
applicable for the Interest Period selected by a Borrower (or by Administrative Borrower on behalf
of such Borrower), as in effect two (2) Business Days prior to the commencement of the Interest
Period, whether such rate is higher or lower than any rate previously quoted to any Borrower or
Guarantor).



(b) Notwithstanding anything to the contrary contained in clause (a) of this definition, the
Interest Rate shall mean the rate of two (2%) percent per annum in excess of the rates set forth in
clause (a) above, at Agent’s or Required Lenders’ option, without notice, (i) either (A) for the
period on and after the date of termination or non-renewal hereof until such time as all
Obligations are indefeasibly paid and satisfied in full in immediately available funds, or (B) for
the period from and after the date of the occurrence of any Event of Default, and for so long as
such Event of Default is continuing as determined by Agent and (ii) on the Revolving Loans to
Borrowers at any time outstanding in excess of the lesser of the Borrowing Base or the Maximum
Credit (whether or not such excess(es) arise or are made with or without Agent’s or any Lender’s
knowledge or consent and whether made before or after an Event of Default).



1.86 “Inventory” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and
Guarantor’s now owned and hereafter existing or acquired goods, wherever located, which (a) are
leased by such Borrower or Guarantor as lessor; (b) are held by such Borrower or Guarantor for sale
or lease or to be furnished under a contract of service; (c) are furnished by such Borrower or
Guarantor under a contract of service; or (d) consist of raw materials, work in process, finished
goods or materials used or consumed in its business.



1.87 “Inventory Loan Limit” shall mean $40,000,000.



1.88 “Investment” shall have the meaning set forth in Section 10.4 hereof.



1.89 “Investment Account” shall mean any account maintained by any Borrower, Guarantor or
Subsidiary with a bank, securities intermediary, commodity intermediary or other Person, other than
a deposit account (as that term is defined in Section 1-102 of the UCC), in which any Borrower,
Guarantor or Subsidiary maintains cash, Cash Equivalents, securities or securities entitlements.



1.90 “Issuing Bank” shall mean Wachovia Bank, National Association (and its successors and
assigns) or any Lender that is approved by Agent that shall issue a Letter of Credit for the
account of a Borrower and has agreed in a manner reasonably satisfactory to Agent to be subject to
the terms hereof as an Issuing Bank.



1.91 “Lenders” shall mean the financial institutions who are signatories hereto as Lenders and
other persons made a party to this Agreement as a Lender in accordance with Section 15.7 hereof,
and their respective successors and assigns; each sometimes being referred to herein individually
as a “Lender”.



1.92 “Letter of Credit Documents” shall mean, 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 or (b) any collateral security for
such obligations.



1.93 “Letter of Credit Limit” shall mean $10,000,000.



1.94 “Letter of Credit Obligations” shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all Letters of Credit issued for the account of a Borrower outstanding at such
time, plus (b) the aggregate amount of all drawings under Letters of Credit for a Borrower for
which Issuing Bank has not at such time been reimbursed, plus (c) without duplication, the
aggregate amount of all payments made by each Lender to the Issuing Bank with respect to such
Lender’s participation in Letters of Credit issued for the account of a Borrower as provided in
Section 2.2 for which Borrowers have not at such time reimbursed the Lenders, whether by way of a
Revolving Loan or otherwise.



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



1.96 “License Agreements” shall have the meaning set forth in Section 8.11 hereof.



1.97 “Liquidity” shall mean on any date of determination by Agent, the sum of (a) Excess
Availability and (b) Qualified Cash, provided, that, on any date of determination,
when calculating “Excess Availability” for purposes of determining Liquidity, Agent shall calculate
the “Borrowing Base” component thereof utilizing the most recent Borrowing Base Certificate
delivered by Administrative Borrower in accordance with Section 7.1(a)(ii),which shall be adjusted,
if necessary, based on information received by Agent since that date, to the extent necessary to
reflect changes in Reserves, Eligible Accounts and Eligible Inventory.



1.98 “Loan Documents” shall mean, collectively, this Agreement and all notes, guarantees,
security agreements, hypothecs, deposit account control agreements, intercreditor agreements and
all other agreements, documents and instruments now or at any time hereafter executed and/or
delivered by any Borrower or Guarantor in connection with this Agreement; provided,
that, the Loan Documents shall not include Hedge Agreements.



1.99 “London Interbank Offered Rate” shall mean, with respect to any Eurodollar Rate Loan for
the Interest Period applicable thereto, the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor
or substitute page) as the London interbank offered rate for deposits in U.S. Dollars at
approximately 11:00 A.M. (London time) two (2) 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 for such comparable period, the
applicable rate shall be the arithmetic mean of all such rates. If, for any reason, such rate is
not available, the term “London Interbank Offered Rate” shall mean, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Successor Page 3750 as the
London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two
(2) Business Days prior to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on Telerate
Successor Page 3750, the applicable rate for such comparable period shall be the arithmetic mean of
all such rates and in each case subject to the reserve percentage prescribed by governmental
authorities. .



1.100 “MAE Reserve” shall mean the Reserve in an amount not to exceed $30,000,000,
established at Agent’s option, at any time: (a) upon or after the occurrence of an Event of Default
described in Section 12.1(n) hereof or (b) Administrative Borrower requests a Revolving Loan or
Letter of Credit and either (i) an act, condition or event exists or has occurred and is continuing
that has had or could reasonably be expected to have a Material Adverse Effect as more specifically
set forth in Section 4.2(a) hereof or (ii) a law, regulation, order, judgment or decree of any
Governmental Authority applicable to any Borrower’s or Guarantor’s business or operations shall
exist, or an action, suit, investigation, litigation or proceeding shall be pending or threatened
against any Borrower or Guarantor in any court or before any arbitrator or Governmental Authority,
which has or has a reasonable likelihood of having a Material Adverse Effect.



1.101 “Material Acquisition” shall mean the purchase by a Borrower, Guarantor or one of their
respective Subsidiaries (whether structured as a purchase of assets or Equity Interests) of an
Acquired Business having Accounts and finished goods Inventory located in the United States with an
aggregate value in excess of $25,000,000.



1.102 “Material Adverse Effect” shall mean a material adverse effect on (a) the financial
condition, business, performance or operations of Borrowers, taken as a whole; (b) the legality,
validity or enforceability of this Agreement or any of the other Loan Documents; (c) the legality,
validity, enforceability, perfection or priority of the security interests and liens of Agent upon
the Collateral; (d) the Collateral or its value; (e) the ability of Borrowers, taken as a whole,
to repay the Obligations or of any Borrower to perform its obligations under this Agreement or any
of the other Loan Documents as and when to be performed; or (f) the ability of Agent or any Lender
to enforce the Obligations or realize upon the Collateral or otherwise with respect to the rights
and remedies of Agent and Lenders under this Agreement or any of the other Loan Documents..



1.103 “Material Contract” shall mean (a) any contract or other agreement (other than the
Loan Documents and Hedge Agreements), written or oral, of any Borrower or Guarantor involving
monetary liability of or to any Person in an amount in excess of $20,000,000 in any fiscal year
(but excluding for this purpose contracts or other agreements for the purchase and sale of goods or
services where the other party thereto has no obligation to purchase or sell such goods or services
under such contract or other agreement) and (b) any other contract or other agreement (other than
the Loan Documents and Hedge Agreements), whether written or oral, to which any Borrower or
Guarantor is a party as to which the breach, nonperformance, cancellation or failure to renew by
any party thereto would have a Material Adverse Effect.



1.104 “Material License Agreement” shall mean any License Agreement with respect to which the
ongoing royalties (excluding any payment made upon execution of such License Agreement) paid or
payable by the Borrower or Guarantor party thereto as licensee exceed 0.50% of Parent’s
consolidated gross revenues in any fiscal year of Parent.



1.105 “Maturity Date” shall mean March 15, 2013.



1.106 “Maximum Credit” shall mean the amount of $75,000,000 (subject to increase as provided
in Section 2.5 hereof).



1.107 “Maximum Interest Rate” shall mean 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 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.



1.108 “Moody’s” shall mean Moody’s Investors Service, Inc. and its successors and assigns.



1.109 “Multiemployer Plan” shall mean 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 Borrower, Guarantor or any ERISA Affiliate or with respect to which any
Borrower, Guarantor or any ERISA Affiliate may incur any liability.



1.110 “Net Cash Proceeds” shall mean the aggregate cash proceeds received by Parent or any of
its Subsidiaries in respect of any sale, lease, transfer or other disposition of any assets or
properties, or interest in assets and properties or as proceeds of any loans or other financial
accommodations provided to it or as proceeds from the issuance and/or sale of any Equity Interests
or Indebtedness, in each case net of the reasonable and customary direct costs relating to such
sale, lease, transfer or other disposition or loans or other financial accommodation or issuance
and/or sale (including, without limitation, legal, accounting and investment banking fees, and
sales commissions) and taxes paid or payable as a result thereof and in the case of a sale of any
assets or properties or interest in assets and properties, amounts applied to the repayment of
Indebtedness secured by a valid and enforceable lien (other than a lien created under the Loan
Documents) on the asset or assets that are the subject of such sale or other disposition required
to be repaid in connection with such transaction.



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



1.112 “Obligations” shall mean (a) any and all Loans, Letter of Credit Obligations and all
other obligations, liabilities and indebtedness of every kind, nature and description owing by any
or all of Borrowers to Agent or any Lender or any Issuing Bank, including principal, interest,
charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser,
guarantor or otherwise, arising under this Agreement or any of the other Loan Documents 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 with respect to such Borrower under the United
States Bankruptcy Code, or any similar statute (including 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) for purposes only of Sections 1.141, 5.1, and 13.3(e)
hereof and subject to the priority in right of payment set forth in Section 6.7 hereof, all
obligations, liabilities and indebtedness of every kind, nature and description owing by any or all
of Borrowers or Guarantors to Agent or any Bank Product Provider arising under or pursuant to any
Bank Products, whether now existing or hereafter arising; provided, that, (i) as to
any such obligations, liabilities and indebtedness arising under or pursuant to a Hedge Agreement,
the same shall only be included within the Obligations if upon Agent’s request, Agent shall have
entered into an agreement, in form and substance reasonably satisfactory to Agent, with the Bank
Product Provider that is a counterparty to such Hedge Agreement, as acknowledged and agreed to by
Administrative Borrower, providing for the delivery to Agent by such counterparty of information
with respect to the amount of such obligations and providing for the other rights of Agent and such
Bank Product Provider in connection with such arrangements, (ii) any Bank Product Provider, other
than Wachovia and its Affiliates, shall have delivered written notice to Agent and Administrative
Borrower that (A) such Bank Product Provider has entered into a transaction to provide Bank
Products to a Borrower and Guarantor and (B) the obligations arising pursuant to such Bank Products
provided to Borrowers and Guarantors constitute Obligations entitled to the benefits of the
security interest of Agent granted hereunder, and Agent shall have accepted such notice in writing
and (iii) in no event shall any Bank Product Provider acting in such capacity to whom such
obligations, liabilities or indebtedness are owing be deemed a Lender for purposes hereof to the
extent of and as to such obligations, liabilities or indebtedness except that each reference to the
term “Lender” in Sections 14.1, 14.2, 14.3(b), 14.6, 14.7, 14.9, 14.12 and 15.6 hereof shall be
deemed to include such Bank Product Provider and in no event shall the approval of any such person
in its capacity as Bank Product Provider be required in connection with the release or termination
of any security interest or lien of Agent.



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



1.114 “Other Taxes” shall mean 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



1.115 “Parent” shall mean ADC Telecommunications, Inc., a Minnesota corporation, and its
successors and assigns.



1.116 “Participant” shall mean any financial institution that acquires and holds a
participation in the interest of any Lender in any of the Loans and Letters of Credit in conformity
with the provisions of Section 15.7 of this Agreement governing participations.



1.117 “Participant Register” shall have the meaning set forth in Section 6.4(b) hereof.



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



1.119 “Permits” shall have the meaning set forth in Section 8.7 hereof.



1.120 “Permitted Acquisitions” shall mean the purchase by a Borrower, Guarantor or any of
their respective Subsidiaries, after the date hereof of an Acquired Business, in one or a series of
transactions, that satisfies each of the following conditions as reasonably determined by Agent:



(a) the Acquired Business shall be engaged in a line of business substantially similar to the
business that Parent and its Subsidiaries are engaged in on date hereof;



(b) the consideration paid or payable for the Acquired Business under the applicable purchase
agreement (including any earn-out or other deferred purchase price payments) shall not exceed
$300,000,000 and after giving effect to such consideration, the aggregate amount of all
consideration paid for all Permitted Acquisitions during the term of this Agreement (exclusive of
any earn-out or other deferred purchase price payments agreed upon in connection with any prior
acquisition that were not required to be paid) shall not exceed $500,000,000;



(c) no Default or Event of Default shall exist or have occurred as of the date of the
acquisition or any payment in respect thereof and after giving effect to the acquisition or such
payment;



(d) Liquidity shall have been not less than (i) $225,000,000 for the three (3) month period
immediately prior to the date of any such acquisition and (ii) $200,000,000 on the date of such
acquisition and after giving effect to all purchase price payments paid or payable in connection
with such acquisition (including any agreed earn-out or other deferred purchase price payments);



(e) average Excess Availability shall have been not less than (i) $25,000,000 for the
consecutive thirty (30) day period immediately prior to the date of any such acquisition and (ii)
$25,000,000 on the date of such acquisition and after giving effect to all purchase price payments
paid or payable in connection with such acquisition (including any agreed earn-out or other
deferred purchase price payments);



(f) in the case of a Material Acquisition, Agent shall have received: (i) not less than ten
(10) Business Days prior written notice thereof, which notice shall include (A) the most recent
annual and interim financial statements with respect to the Acquired Business and related
statements of income and cash flows, (B) detailed forecasts of cash flows for the Acquired
Business, and (C) detailed projections for Parent and its Subsidiaries through the Maturity Date
giving pro forma effect to such acquisition, based on assumptions satisfactory to Agent and
demonstrating pro forma compliance with all financial covenants set forth in Section 11 of this
Agreement (without regard to the amount of Excess Availability), prepared in good faith and in a
manner and using such methodology as is consistent with the most recent financial statements
delivered to Agent pursuant to Section 9.6 and in form and substance reasonably satisfactory to
Agent, (ii) a Compliance Certificate completed on a pro forma basis giving effect to the
acquisition and showing that Borrowers and Guarantors shall be in compliance with all of the
covenants set forth in Section 11 for each of the twelve (12) months following the date of such
acquisition, without regard to the amount of the Excess Availability and (iii) if the Acquired
Business is to become a Borrower hereunder, current, updated projections of the amount of the
Borrowing Base, Liquidity, and Excess Availability for each of the twelve (12) months following the
date of such acquisition, in a form reasonably satisfactory to Agent, representing Borrowers’
reasonable best estimate of the future Liquidity, Borrowing Base and Excess Availability for the
period set forth therein as of the date not more than ten (10) days prior to the date of such
acquisition, which projections shall have been prepared on the basis of the assumptions set forth
therein which Borrowers believe are fair and reasonable as of the date of preparation in light of
current and reasonably foreseeable business conditions and which projections shall show amounts of
Excess Availability reasonably satisfactory to Agent;



(g) in the case of a Material Acquisition of Equity Interests of an Acquired Business that
will thereby become a Domestic Subsidiary, or the formation of any Domestic Subsidiary in
connection with a Material Acquisition, (i) the Borrower or Guarantor forming and or acquiring such
Domestic Subsidiary shall, except as Agent may otherwise agree, (A) execute and deliver to Agent, a
pledge and security agreement, in form and substance reasonably satisfactory to Agent, granting to
Agent a first pledge of and lien on all of the issued and outstanding shares of Equity Interests of
any such Domestic Subsidiary, (B) deliver the original stock certificates evidencing such shares of
Equity Interests (or such other evidence as may be issued in the case of a limited liability
company), together with stock powers with respect thereto duly executed in blank (or the equivalent
thereof in the case of a limited liability company in which such interests are certificated, or
otherwise take such actions as Agent shall require with respect to Agent’s security interests
therein) and (ii) as to any such Domestic Subsidiary, except as Agent may otherwise agree, the
Borrower or Guarantor forming such Domestic Subsidiary shall cause any such Domestic Subsidiary to
execute and deliver to Agent, the following (each in form and substance reasonably satisfactory to
Agent), (A) an absolute and unconditional guarantee of payment of the Obligations, (B) a security
agreement granting to Agent a first security interest and lien (except as otherwise consented to in
writing by Agent) upon all of the assets of any such Domestic Subsidiary, and (C) such other
agreements, documents and instruments as Agent may reasonably require in connection with the
documents referred to above in order to make such Domestic Subsidiary a party to this Agreement as
a “Borrower” or as a “Guarantor” as Administrative Borrower may elect, including, but not limited
to, supplements and amendments hereto, authorization to file UCC financing statements, Collateral
Access Agreements and other consents, waivers, acknowledgments and other agreements from third
persons which Agent may deem necessary or desirable in order to permit, protect and perfect its
security interests in and liens upon the assets purchased, corporate resolutions and other
organization and authorizing documents of such Person, and favorable opinions of counsel to such
person;



(h) in the case of a Material Acquisition of assets (other than Equity Interests) by any
Borrower or Guarantor, Agent shall have received, in form and substance reasonably satisfactory to
Agent, (i) evidence that Agent has valid and perfected security interests in and liens upon all
purchased assets to the extent such assets constitute Collateral hereunder and (ii) such other
agreements, documents and instruments as Agent may require in connection with such assets,
including, but not limited to, supplements and amendments hereto, authorization to file UCC
financing statements, Collateral Access Agreements and other consents, waivers, acknowledgments and
other agreements from third persons which Agent may deem reasonably necessary or desirable in order
to permit, protect and perfect its security interests in and liens upon the assets purchased,
corporate resolutions and other organization and authorizing documents of such Person; and



(i) Agent shall have received true, correct and complete copies of all agreements, documents
and instruments relating to each Material Acquisition, which documents shall be satisfactory to
Agent.



It is hereby acknowledged that the Accounts and Inventory of any Acquired Business shall not
constitute Eligible Accounts or Eligible Inventory until (i) the Administrative Borrower has
notified Agent that such Acquired Business is to be a Borrower hereunder (or, in the case of an
asset purchase, such assets were acquired by a Borrower), (ii) Agent shall have received, at its
option, an appraisal of the Inventory of the Acquired Business and such other assets of the
Acquired Business as Agent may specify, in each case in form and containing assumptions and
appraisal methods reasonably satisfactory to Agent by an appraiser reasonably acceptable to Agent,
on which Agent and Lenders are expressly permitted to rely, and (iii) Agent shall have completed a
field examination with respect to the business and assets of the Acquired Business in accordance
with Agent’s customary procedures and practices and as otherwise required by the nature and
circumstances of the business of the Acquired Business, the scope and results of which shall be
satisfactory to Agent, and any Accounts and Inventory of the Acquired Business shall only be
Eligible Accounts and Eligible Inventory, respectively, to the extent that Agent determines
(through such field examination or otherwise) that the criteria for Eligible Accounts and Eligible
Inventory set forth herein are satisfied with respect thereto in accordance with this Agreement (or
such other or additional criteria as Agent may, at its option, establish with respect thereto in
accordance with this Agreement and subject to such Reserves as Agent may establish in connection
with the Acquired Business).



1.121 “Permitted Dispositions” shall mean each of the following, without duplication:



(a) sales of Inventory and worn out, obsolete or surplus Equipment in the ordinary course of
business;



(b) sales or other dispositions by any Borrower or Guarantor of Collateral (other than the
Equity Interests of a Borrower or Guarantor, except as otherwise permitted herein) out of the
ordinary course of business in connection with the sale of an entire product line or division of
any Borrower or Guarantor; provided, that, as to each and all such sales and
dispositions, (i) Administrative Borrower shall have given Agent at least ten (10) Business Days
prior notice of such sale, which notice shall include a description of the assets to be sold, and,
in the event the sale or other disposition involves Collateral having a value in excess of
$2,500,000, copies of the related purchase and sale agreements, (ii) as of the date of such sale or
other disposition and after giving effect thereto, no Event of Default shall exist or have occurred
and be continuing, (iii) such sales or other dispositions of Collateral shall be on commercially
reasonable prices and terms in a bona fide arm’s length transaction with a Person that is not an
Affiliate, (iv) at Agent’s request, Administrative Borrower shall have delivered to Agent a new
Borrowing Base Certificate, not more than three (3) days prior to such sale or other disposition,
calculating the Borrowing Base after giving effect to such sale(s) or other disposition(s), and
which shall show Excess Availability of not less than $25,000,000 (A) for each of the thirty days
prior to such sale or disposition, and (B) on the date of such sale or other disposition, and
immediately after giving effect thereto (v), all Net Cash Proceeds payable or delivered to such
Borrower or Guarantor in respect of such sale or other disposition shall be paid or delivered, or
caused to be paid or delivered, to Agent, for application to the Obligations in accordance with
Section 6.7 hereof; and (vi) the aggregate net book value of all Collateral sold or otherwise
disposed of during any consecutive (12) month period during the term of this Agreement shall not
exceed $15,000,000, provided, that, notwithstanding the foregoing limitation set
forth in clause (vi), the limitation shall be $25,000,000 for the period commencing December 1,
2009 through and including November 30, 2010.



(c) sales, transfers or other dispositions of assets (other than Equity Interests) that do not
constitute Collateral and which sales or other dispositions do not constitute Restricted Payments
or Permitted Investments, provided, that, (i) at the time of such sale, transfer or
other disposition and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing, (ii) in the case of dispositions of Intellectual Property such
dispositions would not limit or restrict Agent’s ability to sell or realize its security interest
in any of the Inventory or other Collateral, and (iii) such sales, transfers and other dispositions
are otherwise permitted herein;



(d) the issuance and sale by Parent of its Equity Interests after the date hereof;
provided, that, (i) Parent shall not be required to pay any cash dividends or
repurchase or redeem such Equity Interests, except as otherwise permitted in Section 10.5 hereof,
(ii) the terms of such Equity Interests, and the terms and conditions of the purchase and sale
thereof, shall not include any terms that include any limitation on the right of any Borrower to
request or receive Loans or Letters of Credit or the right of any Borrower and Guarantor to amend
or modify any of the terms and conditions of this Agreement or any of the other Loan Documents or
otherwise in any way relate to or affect the arrangements of Borrowers and Guarantors with Agent
and Lenders and (iii) all of the Net Cash Proceeds of the sale and issuance of such Equity
Interests shall be paid to Agent for application to the Revolving Loans which amounts may be
reborrowed;



(e) any transfer of property or assets, including Equity Interests, from any Borrower or
Guarantor to any other Borrower or Guarantor;



(f) any transfer of property or assets, or issuance of Equity Interests, that is a Restricted
Payment permitted under Section 10.5 or Permitted Investment permitted under Section 10.4; and



(g) the transfer of cash for the payment of Indebtedness to the extent such payments are
permitted hereunder and for the payment of other payables in the ordinary course of the business of
Borrowers and Guarantors.



1.122 “Permitted Investments” shall mean each of the following:



(a) the endorsement of instruments for collection or deposit in the ordinary course of
business;



(b) investments in cash or Cash Equivalents held in deposit accounts, provided,
that, (i) at any time on and after a Cash Dominion Event and for so long as the same is
continuing, no Loans are then outstanding; except that the limitation in this clause (i) shall not
apply to (A) Qualified Cash, (B) funds held in deposit accounts that are not required to be
transferred to Agent after a Cash Dominion Event as provided in Section 6.6 hereof, (C) deposits of
cash or other immediately available funds in operating demand deposit accounts used for
disbursements to the extent required to provide funds for amounts drawn or anticipated to be drawn
shortly on such accounts and which may be held in Cash Equivalents consisting of overnight
investments until so drawn (so long as such funds and Cash Equivalents are not held more than three
(3) Business Days from the date of the initial deposit thereof), and (ii) the terms and conditions
of Section 5.2(d) hereof shall have been satisfied with respect to the deposit account in which
such cash or Cash Equivalents are held;



(c) any other investments permitted under the Administrative Borrower’s cash investment
policy, as it may be amended from time to time with the approval of the Administrative Borrower’s
Board of Directors or a committee thereof; provided, that, upon and during the
continuation of any Default or Event of Default, while there are any Revolving Loans outstanding,
no new investments shall be permitted unless (i) Liquidity shall have been not less than
$225,000,000 for the three (3) month period immediately prior to the date of any such investment
and not less than $200,000,000 on the date of such investment, (ii) Agent shall have received a
Compliance Certificate completed on a pro forma basis giving effect to the investment and showing
that Borrowers and Guarantors are in compliance with all of the covenants set forth in Section 11
without regard to the amount of the Excess Availability, and (iii) average Excess Availability
shall have been not less than $25,000,000 for the consecutive thirty (30) day period immediately
prior to the date of any such investment and not less than $25,000,000 on the date of such
investment and after giving effect to such investment;



(d) the existing equity investments of each Borrower and Guarantor as of the date hereof in
its Subsidiaries, and additional equity investments in such Subsidiaries, provided,
that, with respect to each such investment made after the date hereof (i) Liquidity shall
have been not less than $225,000,000 for the three (3) month period immediately prior to the date
of any such investment and not less than $200,000,000 on the date of such investment, (ii) Agent
shall have received a Compliance Certificate completed on a pro forma basis giving effect to the
investment and showing that Borrowers and Guarantors are in compliance with all of the covenants
set forth in Section 11 without regard to the amount of the Excess Availability, and (iii) average
Excess Availability shall have been not less than $25,000,000 for the consecutive thirty (30) day
period immediately prior to the date of any such investment and not less than $25,000,000 on the
date of such investment and after giving effect to such investment;



(e) loans and advances by any Borrower or Guarantor to employees of such Borrower or Guarantor
for (i) reasonable and necessary work-related travel or other ordinary business expenses to be
incurred by such employees in connection with their work for such Borrower or Guarantor and (ii)
reasonable and necessary relocation expenses of such employees (including home mortgage financing
for relocated employees);



(f) stock or obligations issued to any Borrower or Guarantor by any Person (or the
representative of such Person) in respect of Indebtedness of such Person owing to such Borrower or
Guarantor in connection with the insolvency, bankruptcy, receivership or reorganization of such
Person or a composition or readjustment of the debts of such Person; provided,
that, upon and during the continuation of any Default or Event of Default, the original of
any such stock or instrument evidencing such obligations shall be promptly delivered to Agent, upon
Agent’s request, together with such stock power, assignment or endorsement by such Borrower or
Guarantor as Agent may request;



(g) obligations of account debtors to any Borrower or Guarantor arising from Accounts which
are past due evidenced by a promissory note made by such account debtor payable to such Borrower or
Guarantor; provided, that, promptly upon the receipt of the original of any such
promissory note by such Borrower or Guarantor in an amount in excess of $50,000 (and all such
promissory notes in the event the aggregate principal amount thereof, at any time, is excess of
$250,0000), such promissory note shall be endorsed to the order of Agent by such Borrower or
Guarantor and promptly delivered to Agent as so endorsed;



(h) loans by a Borrower or Guarantor to another Borrower or Guarantor after the date hereof;
provided, that,



(i) as to all of such loans,



(A) the Indebtedness arising pursuant to any such loan shall not be evidenced by a promissory
note or other instrument, unless the single original of such note or other instrument is promptly
delivered to Agent upon its request to hold as part of the Collateral, with such endorsement and/or
assignment by the payee of such note or other instrument as Agent may require, and



(B) as of the date of any such loan and after giving effect thereto, no Default or Event of
Default shall exist or have occurred and be continuing;



(ii) as of the date of any such loan and after giving effect thereto, the Borrower or
Guarantor making such loan shall be Solvent; and



(iii) as to loans by a Guarantor to a Borrower, (A) the Indebtedness arising pursuant to such
loan shall be subject to, and subordinate in right of payment to, the right of Agent and Lenders to
receive the prior final payment and satisfaction in full of all of the Obligations on terms and
conditions reasonably acceptable to Agent, (B) promptly upon Agent’s request, Agent shall have
received a subordination agreement, in form and substance reasonably satisfactory to Agent,
providing for the terms of the subordination in right of payment of such Indebtedness of such
Borrower to the prior final payment and satisfaction in full of all of the Obligations, duly
authorized, executed and delivered by such Guarantor and such Borrower, and (C) no Borrower or
Guarantor shall, directly or indirectly make, or be required to make, any payments in respect of
such Indebtedness prior to the end of the then current term of this Agreement;



(i) loans by a Borrower or Guarantor to a Subsidiary of Parent which is not either a Borrower
or Guarantor after the date hereof; provided, that, as to all of such loans,



(i) as of the date of any such loan and after giving effect thereto, the Borrower or Guarantor
making such loan shall be Solvent,



(ii) as of the date of any such loan and after giving effect thereto, no Default or Event of
Default shall exist or have occurred and be continuing; and



(iii) the net outstanding amount of all such loans made after the date hereof, after giving
effect to any offsetting payments or transfers of assets received from the Subsidiary borrower
substantially contemporaneously with such loan, at any time shall not exceed $75,000,000.



(j) the existing equity investments, loans and advances of each Borrower and Guarantor in
other Persons set forth in the Information Certificate and any renewals, extensions, replacements
or substitutions thereof;



(k) Investments made by any Subsidiary that is not a Borrower or Guarantor in any other
Subsidiary, including any Borrower or Guarantor, whether as loans or equity investments;
provided, that, any loans to a Borrower shall be subordinated in right of payment
to the rights of Agent and Lenders as provided in clause (g)(iii) of this definition;



(l) (i) Investments consisting of the purchase price paid for any Permitted Acquisition
(whether paid directly by a Borrower or Guarantor or indirectly by transfer of assets to a
Subsidiary) and (ii) the existing investments of any Acquired Business retained by such Acquired
Business after a Permitted Acquisition,



(m) provided, no Default or Event of Default exists or would result therefrom, Investments not
otherwise permitted hereunder not to exceed $50,000,000 in the aggregate during the term of this
Agreement; and



(n) the loans and advances not otherwise permitted hereunder and set forth on Schedule 9.10
Part B1 to the Information Certificate; provided, that, as to such loans
and advances, Borrowers and Guarantors shall not, directly or indirectly, amend, modify, alter or
change the terms of such loans and advances or any agreement, document or instrument related
thereto in a manner adverse to such Borrower or Guarantor, as applicable, and Borrowers and
Guarantors shall furnish to Agent all material notices or demands in connection with such loans and
advances either received by any Borrower or Guarantor or on its behalf, promptly after the receipt
thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending
thereof, as the case may be.



1.123 “Permitted Liens” shall have the meaning set forth in Section 10.2 hereof.



1.124 “Person” or “person” shall mean 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.



1.125 “Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) which
any Borrower or Guarantor 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 Borrower or
Guarantor may incur liability.



1.126 “Pledged Equity Interests” shall mean each Borrower or Guarantor’s Equity Interests in
the corporations, limited liability companies or other entities listed on Schedule 1.126 hereto,
and any Domestic Subsidiary formed or acquired after the date hereof subject to the provisions of
Section 9.10 and as required pursuant to a Permitted Acquisition.



1.127 “Pro Rata Share” shall mean, 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
amount of all of the Commitments of the Lenders, as adjusted from time to time in accordance with
the provisions hereof; provided, that, if the Commitments have been terminated, the
numerator shall be the unpaid amount of such Lender’s Loans and its interest in Special Agent
Advances and Letter of Credit Obligations and the denominator shall be the aggregate amount of all
unpaid Loans and Letter of Credit Obligations.



1.128 “Provision for Taxes” shall mean an amount equal to all taxes imposed on or measured by
net income, whether Federal, State, Provincial, county or local, and whether foreign or domestic,
that are paid or payable by any Person in respect of any period in accordance with GAAP.



1.129 “Qualified Cash” shall mean (a) cash or Cash Equivalents owned by a Borrower in a
deposit account maintained by Borrower in the United States which are (i) available for use by a
Borrower, without condition or restriction (other than in favor of Agent), (i) free and clear of
any pledge, security interest, lien, claim or other encumbrance (other than in favor of Agent), and
(ii) subject to a Deposit Account Control Agreement, and (b) cash or Cash Equivalents owned by a
Borrower in an Investment Account maintained by a Borrower in the United States, which are (i) free
and clear of any pledge, security interest, lien, claim or other encumbrance (other than in favor
of Agent and other than in favor of the securities intermediary where the Investment Account
referred to below is maintained for its customary fees and charges and any other liens permitted
under this Agreement), and (ii) in an Investment Account maintained by a Borrower in the United
States specifically and solely used for purposes of holding such cash or Cash Equivalents,
provided, that, in each case, Agent shall have received evidence, in form and
substance reasonably satisfactory to Agent, of the amount of such cash or Cash Equivalents held in
any such deposit account or Investment Account as of the applicable date of the calculation of
Liquidity by Agent.



1.130 “Real Property” shall mean all now owned and hereafter acquired real property of each
Borrower and Guarantor, including leasehold interests, together with all buildings, structures, and
other improvements located thereon and all licenses, easements and appurtenances relating thereto,
wherever located.



1.131 “Receivables” shall mean all of the following now owned or hereafter arising or acquired
property of each Borrower and Guarantor: (a) all Accounts; (b) all interest, fees, late charges,
penalties, collection fees and other amounts due or to become due or otherwise payable in
connection with any Account; (c) all payment intangibles of such Borrower or Guarantor; (d) letters
of credit, indemnities, guarantees, security or other deposits and proceeds thereof issued payable
to any Borrower or Guarantor or otherwise in favor of or delivered to any Borrower or Guarantor in
connection with any Account; or (e) all other accounts, contract rights, chattel paper,
instruments, notes, general intangibles and other forms of obligations owing to any Borrower or
Guarantor, whether from the sale and lease of goods or other property, licensing of any property
(including Intellectual Property or other general intangibles), rendition of services or from loans
or advances by any Borrower or Guarantor or to or for the benefit of any third person (including
loans or advances to any Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise
associated with any Accounts, Inventory or general intangibles of any Borrower or Guarantor
(including, without limitation, choses in action, causes of action, tax refunds, tax refund claims,
any funds which may become payable to any Borrower or Guarantor in connection with the termination
of any Plan or other employee benefit plan and any other amounts payable to any Borrower or
Guarantor from any Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and proceeds thereof, casualty
or any similar types of insurance and any proceeds thereof and proceeds of insurance covering the
lives of employees on which any Borrower or Guarantor is a beneficiary).



1.132 “Records” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and
Guarantor’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 Borrower or Guarantor with respect to the foregoing maintained with or by any other person).



1.133 “Register” shall have the meaning set forth in Section 6.4(a) hereof.



1.134 “Required Lenders” shall mean, at any time, those Lenders whose Pro Rata Shares
aggregate more than fifty (50%) percent of the aggregate of the Commitments of all Lenders, or if
the Commitments shall have been terminated, Lenders to whom more than fifty (50%) percent of the
then outstanding Loans and participation interests in other Obligations are owing;
provided, that, if at any time there are two (2) or fewer Lenders, then “Required
Lenders” shall mean all Lenders.



1.135 “Reserves” shall mean as of any date of determination, such amounts as Agent may from
time to time establish (without duplication) and revise, reducing the amount of Loans and Letters
of Credit which 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
Agent, adversely affect, or would have a reasonable likelihood of adversely affecting, either (i)
the Collateral or any other property which is security for the Obligations, its value or the amount
that might be received by Agent from the sale or other disposition or realization upon such
Collateral, or (ii) the assets or business of any Borrower or Guarantor or (iii) the security
interests and other rights of Agent or any Lender in the Collateral (including the enforceability,
perfection and priority thereof) or (b) to reflect Agent’s good faith belief that any collateral
report or financial information furnished by or on behalf of any Borrower or Guarantor to Agent is
or may have been incomplete, inaccurate or misleading in any material respect or (c) in respect of
any Default or an Event of Default. Without limiting the generality of the foregoing, Reserves may
be established to reflect any of the following: (i) dilution with respect to Accounts (based on
the ratio of the aggregate amount of non-cash reductions in Accounts for any period to the
aggregate dollar amount of the sales of such Borrower for such period) as calculated by Agent for
any period is or is reasonably anticipated to be greater than five (5%) percent, (ii) returns,
discounts, claims, credits and allowances of any nature that are not paid pursuant to the reduction
of Accounts and not reflected in the original amount of such Account, (iii) the sales, excise or
similar taxes included in the amount of any Accounts reported to Agent and amounts due or to become
due in respect of sales, use and/or withholding taxes, and (iv) any rental payments, service
charges or other amounts due or to become due to owners or lessors of real property to the extent
Inventory or Records are located in or on such property or in the possession or control of such
parties or such Records are needed to monitor or otherwise deal with the Collateral (other than for
locations where Agent has received a Collateral Access Agreement executed and delivered by the
owner and lessor of such real property that Agent has acknowledged in writing is in form and
substance satisfactory to Agent), (v) any rental payments, service charges or other amounts due or
to become due to lessors of personal property; (vi) an increase in the number of days of the
turnover of Inventory or a change in the mix of the Inventory that results in an overall decrease
in the value thereof or a deterioration in its nature or quality (but only to the extent not
addressed by the lending formulas in a manner satisfactory to Agent), (vii) variances between the
perpetual inventory records of Borrowers and the results of the test counts of Inventory conducted
by Agent with respect thereto in excess of the percentage acceptable to Agent, (viii) rebates,
stock rotation credits and price protection credits, (ix) the aggregate amount of deposits, if any,
received by any Borrower from its customers in respect of unfilled orders for goods, (x)
obligations, liabilities or indebtedness (contingent or otherwise) of Borrowers or Guarantors to
any Bank Product Provider arising under or in connection with any Bank Products of any Borrower or
Guarantor with a Bank Product Provider or as such Bank Product Provider may otherwise require and
Agent may agree in connection therewith to the extent that such obligation, liabilities or
indebtedness constitute Obligations as such term is defined herein or otherwise receive the benefit
of the security interest of Agent in any Collateral, (xi) fluctuations in the Exchange Rate of
Canadian Dollars into US Dollars so long as there are Eligible Accounts denominated in Canadian
Dollars, (xii) in respect of Eligible Distributor Stock Accounts, the amount of returns, and
allowances of any nature, that not reflected in the original amount of such Account (without
duplication of any other Reserve hereunder), or (xiii) the MAE Reserve. To the extent that an
event, condition or matter as to any Eligible Account or Eligible Inventory is addressed pursuant
to the treatment thereof within the applicable definition of such terms, Agent shall not also
establish a Reserve to address the same event, condition or matter. The amount of any Reserve
established by Agent shall have a reasonable relationship to the event, condition or other matter
which is the basis for such Reserve as determined by Agent in good faith and Agent may, at its
option, deduct such Reserve from the Maximum Credit at any time that the Maximum Credit is less
than the amount of the Borrowing Base..



1.136 “Restricted Payment” shall mean any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interests of Parent 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 Equity Interests or on account of any return of capital to
Parent 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 Equity Interests of Parent or any of
its Subsidiaries, or any setting apart of funds or property for any of the foregoing.



1.137 “Revolving Loans” shall mean the loans now or hereafter made by or on behalf of any
Lender or by Agent for the account of any Lender on a revolving basis pursuant to the Credit
Facility (involving advances, repayments and readvances) as set forth in Section 2.1 hereof.



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



1.139 “Sanctioned Entity” shall mean (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.



1.140 “Sanctioned Person” shall mean 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.



1.141 “Secured Parties” shall mean, collectively, (a) Agent, (b) Lenders, (c) the Issuing Bank
and (d) any Bank Product Provider; provided, that, as to any Bank Product Provider,
only to the extent of the Obligations owing to such Bank Product Provider, such parties are
sometimes referred to herein individually as a “Secured Party”.



1.142 “Settlement Period” shall have the meaning set forth in Section 6.13 hereof.



1.143 “Solvent” shall mean, 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 date hereof, 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).



1.144 “Special Agent Advances” shall have the meaning set forth in Section 14.11 hereof.



1.145 “Standby LCs” shall mean all Letters of Credit other than Commercial LCs; each sometimes
being referred to herein individually as a “Standby LC”.



1.146 “Subordinated Debt” shall mean any Indebtedness of a Borrower or Guarantor that is
subject to, and subordinate in right of payment to, the right of Agent and Lenders to receive the
prior final payment and satisfaction in cash in full of all of the Obligations and subject to such
other terms and conditions as Agent may reasonably require with respect thereto.



1.147 “Subsidiary” or “subsidiary” shall mean, 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 Equity Interests or other interests entitled to vote in the election of the board of
directors of such corporation (irrespective of whether, at the time, Equity Interests of any other
class or classes of such corporation shall have or might have voting power by reason of the
happening of any contingency), managers, trustees or other controlling persons, or an equivalent
controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such
Person and/or one or more subsidiaries of such Person.



1.148 “Taxes” shall mean any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in the case of Agent,
any Issuing Bank or any Lender, (a) such taxes (including income taxes, franchise taxes, branch
profits or capital taxes) as are imposed on or measured by Agent’s, such Issuing Bank’s, or such
Lender’s net income or capital (or other taxes imposed in lieu thereof) by any jurisdiction or
political subdivision thereof and (b) all interest and penalties imposed on Agent, such Issuing
Bank or such Lender with respect to the taxes described in clause (a) above.



1.149 “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York and
any successor statute, as in effect from time to time (except that terms used herein which are
defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof
shall continue to have the same meaning notwithstanding any replacement or amendment of such
statute except as Agent may otherwise determine).



1.150 “US Dollars”, “US$” and “$” shall each mean lawful currency of the United States of
America.



1.151 “US Dollar Equivalent” shall mean at any time (a) as to any amount denominated in US
Dollars, the amount thereof at such time, and (b) as to any amount denominated in Canadian Dollars
or any other currency, the equivalent amount in US Dollars at such time using the Exchange Rate in
effect on the Business Day of determination.



1.152 “Value” shall mean, as determined by 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 Agent prior to
the date hereof, if any. .



1.153 “Voting Stock” shall mean, as to any Person, Equity Interests of such Person
entitled to vote generally in the election of directors of such Person.



1.154 “Wachovia” shall mean Wachovia Bank, National Association, in its individual capacity,
and its successors and assigns.



1.155 “Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any
date, the number of years obtained by dividing (a) the then outstanding principal amount of such
Indebtedness into (b) the total of the product obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of such payment.



	 	 	 	 	 
	SECTION 2.	 	CREDIT FACILITIES
	 	2.1	 	 	Revolving Loans.

	 	 	 	 	 







(a) 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 to Borrowers from time to time in
amounts requested by such Borrower (or Administrative Borrower on behalf of such Borrower) up to
the aggregate amount outstanding for all Borrowers at any time equal to the lesser of: (i) the
Borrowing Base at such time or (ii) the Maximum Credit.



(b) Except with the consent of Agent and all Lenders, or as otherwise provided herein, (i) the
aggregate amount of the Revolving Loans and the Letter of Credit Obligations outstanding at any
time shall not exceed the lesser of: (A) the Borrowing Base or (B) the Maximum Credit, (ii) the
aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding to
Borrowers based on the Eligible Inventory shall not exceed the Inventory Loan Limit, and (iii) the
aggregate amount of the Revolving Loans and Letter of Credit Obligations outstanding at any time
based upon Eligible In-Transit Inventory shall not exceed $1,600,000. Subject to the terms and
conditions hereof, each Borrower (or Administrative Borrower on behalf of such Borrower) may from
time to time borrow, prepay and reborrow Revolving Loans. No Lender shall be required to make any
Revolving Loan, if, after giving effect thereto the aggregate outstanding principal amount of all
Revolving Loans of such Lender, together with such Lender’s Pro Rata Share of the aggregate amount
of all Letter of Credit Obligations, would exceed such Lender’s Commitment.



2.2 Letters of Credit.



(a) General. Subject to and upon the terms and conditions contained herein and in the
Letter of Credit Documents, at the request of a Borrower (or Administrative Borrower on behalf of
such Borrower), Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for
the account of such Borrower one or more Letters of Credit, for the ratable risk of each Lender
according to its Pro Rata Share, containing terms and conditions reasonably acceptable to Agent and
Issuing Bank.



(b) Notice of Issuance, Amendment, Renewal, Extension. The Borrower requesting such
Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall give Agent and the
Issuing Bank with respect thereto three (3) Business Days’ prior written notice of such Borrower’s
request for the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit). Such notice shall be irrevocable and shall (i) specify the original
face amount of the Letter of Credit requested (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 end of the then current term of this
Agreement) 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, (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 reasonably necessary to enable the
Issuing Bank to prepare, amend, renew or extend such Letter of Credit and (viii) if requested by
Issuing Bank or Agent, the Borrower requesting such Letter of Credit (or Administrative Borrower on
behalf of such Borrower) shall have delivered to Issuing Bank with respect thereto at such times
and in such manner as such Issuing Bank may require, an application, in form and substance
satisfactory to such Issuing Bank and Agent, for the issuance of the Letter of Credit and such
other Letter of Credit Documents as may be required pursuant to the terms thereof. If requested by
the Issuing Bank, the Borrower requesting the Letter of Credit (or Administrative Borrower on
behalf of such Borrower) shall attach to the request 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) is
satisfactory to Agent and Issuing Bank. 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) Certain Conditions to Letters of Credit. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Section 4 hereof and the other
terms and conditions contained herein, no Letter of Credit shall be available to Borrowers unless
each of the following conditions precedent have been satisfied in a manner reasonably satisfactory
to Agent: (i) the Borrower requesting such Letter of Credit (or Administrative Borrower on behalf
of such Borrower) shall have delivered to the Issuing Bank the documents, required under Section
2.2(b), and the form and terms of the proposed Letter of Credit shall be satisfactory to Agent and
Issuing Bank, (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 Issuing Bank (or
other issuer) 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) in the case of a Letter of
Credit issued for the account of a Borrower, the Excess Availability prior to giving effect to any
Reserves with respect to such Letter of Credit, on the date of the proposed issuance of any Letter
of Credit shall be equal to or greater than: (A) if the proposed Letter of Credit is for the
purpose of purchasing Eligible Inventory consisting of finished goods and the documents of title
with respect thereto are consigned to Issuing Bank, the sum of (1) the percentage equal to one
hundred (100%) percent minus the then applicable percentage with respect to Eligible Inventory set
forth in the definition of the term Borrowing Base multiplied by the Value of such Eligible
Inventory, plus (2) unpaid freight, taxes, duty and other amounts which Agent estimates must be
paid in connection with such Inventory upon arrival and for delivery to one of Borrowers’ locations
for Eligible Inventory within the United States of America or Canada and (B) if the proposed Letter
of Credit is for any other purpose or the documents of title are not consigned to Issuing Bank in
connection with a Letter of Credit for the purpose of purchasing Inventory, an amount equal to one
hundred (100%) percent of the Letter of Credit Obligations with respect thereto. Effective on the
issuance of each Letter of Credit, a Reserve shall be established in the applicable amount set
forth in Section 2.2(c)(iv)(A) or Section 2.2(c)(iv)(B).



(d) Letter of Credit Sublimit. Except in Agent’s discretion and with the consent of
all Lenders, the amount of all outstanding Letter of Credit Obligations shall not at any time
exceed the Letter of Credit Limit.



(e) Expiration. Each Standby LC shall expire at or prior to the earlier of (i) twelve
(12) months after the date of the issuance of such Standby LC (or in the case of any renewal or
extension thereof, twelve (12) months after such renewal or extension) and (ii) the date that is
five (5) Business Days prior to the Maturity Date; provided, that, (A) any Standby
LC with a one year tenor may provide for automatic renewal or extension thereof for additional one
year periods (which in no event shall extend beyond the date referred to in clause (ii) above) so
long as such Standby LC permits the Issuing Bank to prevent any such extension at least once in
each twelve-month period (commencing with the date of issuance of such Standby LC) by giving prior
notice to the beneficiary thereof within a time period during such twelve-month period to be agreed
upon at the time such Standby LC is issued and (B) if the Issuing Bank and Agent each consent, the
expiration date on any Standby LC may extend beyond the date referred to in clause (ii) above.
Each Commercial LC (meaning any Letter of Credit consisting of a letter of credit issued for the
purpose of providing the primary manner of payment for the purchase price of goods or services by
Borrower in the ordinary course of the business of Borrower (and not in the event that Borrower
fails to make payment)) shall expire on the earlier of one hundred eighty (180) days after such
Commercial LC’s date of issuance, renewal or extension (as applicable) or the date five (5)
Business Days prior to the Maturity Date.



(f) Letter of Credit Participations. Immediately upon the issuance or amendment of
any Letter of Credit issued for the account of a Borrower, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided
interest and participation to the extent of such Lender’s Pro Rata Share of the liability with
respect to such Letter of Credit and the obligations of 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 Issuing Bank 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 such Letter of Credit, to the extent that Issuing Bank has not been reimbursed
or otherwise paid as reasonably required hereunder with respect to any such Letter of Credit or
under any such Letter of Credit, each such Lender shall pay to Issuing Bank its Pro Rata Share of
such unreimbursed drawing or other amounts then due to Issuing Bank in connection therewith.
Notwithstanding anything to the contrary contained in this Agreement, in the event that there is a
Defaulting Lender, Issuing Bank shall not be required to issue any Letter of Credit, or increase or
extend or otherwise amend any Letter of Credit, unless Issuing Bank has entered into arrangements
reasonably satisfactory to it and Borrowers with respect to the participation in Letters of Credit
by such Defaulting Lender. Issuing Bank may require that Borrower provide cash collateral to it,
or to Agent to hold on behalf of Issuing Bank, on terms and conditions satisfactory to Issuing
Bank, in an amount equal to such Defaulting Lender’s Pro Rata Share of any Letter of Credit
Obligations.



(g) Letter of Credit Reimbursement. If Issuing Bank shall make any payment in respect
of a Letter of Credit, Borrowers shall reimburse Issuing Bank by paying to Agent an amount equal to
such payment by Issuing Bank not later than 12:00 noon on the date that such payment by Issuing
Bank is made, if the applicable Borrower (or Administrative Borrower on behalf of such Borrower)
shall have received notice of such payment by the Issuing Bank prior to 10:00 a.m. on such date,
or, if such notice shall not have been received by such Borrower (or Administrative Borrower) prior
to such time on such date, then not later than 12:00 noon on (i) the Business Day that such
Borrower (or Administrative Borrower on behalf of such Borrower) receives such notice, if such
notice is received prior to 10:00 a.m., on the day of receipt, or (ii) the Business Day immediately
following the day that such Borrower (or Administrative Borrower on behalf of such Borrower)
receives such notice, if such notice is not received prior to such time on the day of receipt;
provided, that, unless such Borrower (or Administrative Borrower on behalf of such
Borrower) requests otherwise, and, subject to the conditions to borrowing set forth herein, each
drawing under any Letter of Credit or other amount payable in connection therewith when due shall
constitute a request by the Borrower for whose account such Letter of Credit was issued to Agent
for a Base Rate Loan in the amount of such drawing or other amount then due, and shall be made by
Agent on behalf of Lenders as a Revolving Loan as Administrative Borrower requests, or if such
request is not received in a timely manner, as Agent determines (or Special Agent Advance, as the
case may be) in an equivalent amount and, to the extent so financed, such Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting Revolving Loan (or Special
Agent Advance, as the case may be). If the applicable Borrower fails to make such payment when due,
subject to the rights of Agent under Section 6.13 hereof, Agent may notify each Lender of the
applicable payment made by the Issuing Bank in respect of such Letter of Credit, the payment then
due from such Borrower in respect thereof and such Lender’s Pro Rata Share thereof. Promptly
following receipt of such notice, each Lender shall pay to Agent its Pro Rata Share of the payment
then due and Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it
from Lenders. Promptly following receipt by Agent of any payment from a Borrower pursuant to this
paragraph, Agent shall distribute such payment to the applicable Issuing Bank or, to the extent
that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to
such Lenders and such Issuing Bank as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse an Issuing Bank for any payment made by such Issuing
Bank (other than the funding of a Revolving Loan or Special Agent Advance as contemplated above)
shall not constitute a Revolving Loan and shall not relieve the applicable Borrower of its
obligation to reimburse such Issuing Bank for such payment.



(h) Obligations Absolute. The obligations of Borrowers to pay each Letter of Credit
Obligation, and the obligations of Lenders to make payments to Agent for the account of Issuing
Bank 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 Section 4 hereof or any other
event or circumstance, and irrespective of (i) any lack of validity or enforceability of any Letter
of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect, (iii) payment by an Issuing Bank
under a Letter of Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff against, a Borrower’s
obligations hereunder. None of Agent, Lenders or the Issuing Banks, or any of their Affiliates,
shall have any liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any consequence arising from
causes beyond the control of an Issuing Bank; provided, that, the foregoing shall
not be construed to excuse an Issuing Bank from liability to the applicable Borrower to the extent
of any direct damages (as opposed to consequential damages, claims in respect of which are hereby
waived by each Borrower to the extent permitted by applicable law) suffered by a Borrower that are
caused by an Issuing Bank’s failure to exercise care when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct on the part of an
Issuing Bank (as determined pursuant to a final, non-appealable order of a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, with respect to
documents presented which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, an Issuing Bank may, in its discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any notice or information
to the contrary, or refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.



(i) Disbursement Procedures. The applicable Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for payment under a
Letter of Credit. Such Issuing Bank shall promptly notify Agent and the applicable Borrower (or
Administrative Borrower on behalf of such Borrower) by telephone (confirmed by facsimile or
otherwise as Administrative Borrower and Issuing Bank may agree) of such demand for payment and
whether such Issuing Bank has made or will make any payment in respect thereof; provided,
that, any failure to give or delay in giving such notice shall not relieve the applicable
Borrower of its obligation to reimburse such Issuing Bank and Lenders with respect to any such
payment.



(j) Interim Interest. If an Issuing Bank shall make any payment in respect of a
Letter of Credit, or otherwise be owed any amounts in respect thereof, then, unless the applicable
Borrower shall reimburse Issuing Bank for such payment or other amount in full on the date such
payment is made or amount due, the unpaid amount thereof shall bear interest, for each day from and
including the date such payment is made or amount due but excluding the date that the applicable
Borrower reimburses such payment or other amount, at the rate per annum then applicable to Base
Rate Loans. Interest accrued pursuant to this paragraph shall be for the account of the applicable
Issuing Bank; except, that, interest accrued on and after the date of payment by
Agent or any Lender pursuant to Section 2.2(g) above to reimburse such Issuing Bank shall be for
the account of Agent or such Lender to the extent of such payment, and shall be payable on demand
or, if no demand has been made, on the date on which the applicable Borrower reimburses the
applicable payment in full.



(k) Indemnification. Borrowers and Guarantors shall indemnify and hold Agent and
Lenders harmless from and against any and all losses, claims, damages, liabilities, costs and
expenses which Agent or any Lender may suffer or incur in connection with any Letter of Credit and
any documents, drafts or acceptances relating thereto, including any losses, claims, damages,
liabilities, costs and expenses due to any action taken by an Issuing Bank or correspondent with
respect to any Letter of Credit, except for such losses, claims, damages, liabilities, costs or
expenses that are a direct result of the gross negligence or willful misconduct of Agent or any
Lender as determined pursuant to a final non-appealable order of a court of competent jurisdiction.
Each Borrower and Guarantor assumes all risks for, and agrees to pay, all foreign, Federal, State
and local taxes, duties and levies relating to any goods subject to any Letter of Credit or any
documents, drafts or acceptances thereunder. Each Borrower and Guarantor hereby releases and holds
Agent and Lenders harmless from and against any acts, waivers, errors, delays or omissions with
respect to or relating to any Letter of Credit, except for the gross negligence or willful
misconduct of Agent or any Lender as determined pursuant to a final, non-appealable order of a
court of competent jurisdiction. The provisions of this Section 2.2(k) shall survive the payment
of Obligations and the termination of this Agreement.



(l) Account Party. Each Borrower hereby irrevocably authorizes and directs each
Issuing Bank to name such Borrower as the account party therein and to deliver to Agent all
instruments, documents and other writings and property received by such Issuing Bank pursuant to
the Letter of Credit and to accept and rely upon 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 any Borrower
or Guarantor any right or authority to pledge the credit of Agent or any Lender in any manner.
Agent and Lenders shall have no liability of any kind with respect to any Letter of Credit provided
by Issuing Bank unless Agent has duly executed and delivered to Issuing Bank the application or a
guarantee or indemnification in writing with respect to such Letter of Credit. Borrowers and
Guarantors shall be bound by any reasonable interpretation made in good faith by Agent, or an
Issuing Bank 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 Borrower. In connection with Inventory purchased pursuant to any Letter of
Credit, Borrowers shall, at Agent’s prior written request, instruct all suppliers, carriers,
forwarders, customs brokers, warehouses or others receiving or holding cash, checks, Inventory,
documents or instruments in which Agent holds a security interest that upon Agent’s prior written
request, such items are to be delivered to Agent and/or subject to Agent’s order, and if they shall
come into such Borrower’s possession, to deliver them, upon Agent’s prior written request, to Agent
in their original form. Except as otherwise provided herein, 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 Agent may otherwise specify, Borrowers shall designate the Issuing Bank with
respect to a Letter of Credit as the consignee on all bills of lading and other negotiable and
non-negotiable documents under such Letter of Credit.



(m) Any rights, remedies, duties or obligations granted or undertaken by any Borrower to
Issuing Bank in any application for any Letter of Credit, or any other agreement in favor of
Issuing Bank relating to any Letter of Credit, shall be deemed to have been granted or undertaken
by such Borrower to Agent. Any duties or obligations undertaken by Agent to Issuing Bank in any
application for any Letter of Credit, or any other agreement by Agent in favor of Issuing Bank
relating to any Letter of Credit, shall be deemed to have been undertaken by Borrowers to Agent and
to apply in all respects to Borrowers.



2.3 Requests for Borrowings. 



(a) To request a Revolving Loan, the Administrative Borrower on behalf of the applicable
Borrower) shall notify Agent of such request by telephone (i) in the case of a Eurodollar Rate
Loan, not later than 11:00 a.m., Chicago, Illinois time, three (3) Business Days before the date of
the proposed Eurodollar Rate Loan or (ii) in the case of a Base Rate Loan, not later than 1:00 p.m.
on the same Business Day as the date of the proposed Base Rate Loan. Each such telephonic request
shall be irrevocable and, to the extent required by Agent, shall be confirmed promptly by hand
delivery or facsimile to Agent of a written request in a form approved by Agent and signed by or on
behalf of Borrowers. Each such telephonic and written request shall specify the following
information:



(A) the Borrower requesting such Revolving Loan;



(B) the aggregate amount of such Revolving Loan;



(C) the date of such Revolving Loan, which shall be a Business Day;



(D) whether such Revolving Loan is to be a Base Rate Loan or a Eurodollar Rate Loan; and



(E) the deposit account of the applicable Borrower specified on Schedule 8.10 of the
Information Certificate or any other account that shall be specified in a written notice signed by
an officer of such Borrower and delivered to and approved by Agent to which the proceeds of such
Revolving Loan are to be transferred.



(b) If no election as to whether a Revolving Loan is to be a Base Rate Loan or Eurodollar Rate
Loan is specified in the applicable request, then the requested Revolving Loan shall be a Base Rate
Loan. Promptly following receipt of a request for a Revolving Loan in accordance with this
Section, Agent shall advise each Lender of the details thereof and of the amount of such Lender’s
Revolving Loan to be made as part of the request.



(c) 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
any Borrower or in accordance with the terms and conditions of this Agreement.



(d) Except in Agent’s discretion and with the consent of all Lenders, or as otherwise provided
herein, the aggregate amount of the Revolving Loans and the Letter of Credit Obligations
outstanding at any time shall not exceed the lesser of the Maximum Credit or the Borrowing Base.



2.4 Prepayments.



(a) Borrowers may prepay without penalty or premium the principal of any Revolving Loan, in
whole or in part, subject to Section 6.7 hereof.



(b) In the event that (i) the aggregate amount of the Revolving Loans and the Letter of
Credit Obligations outstanding at any time exceeds the lesser of: (A) the Borrowing Base or (B) the
Maximum Credit, (ii) the aggregate principal amount of the Revolving Loans and Letter of Credit
Obligations outstanding to Borrowers at any time exceeds the Inventory Loan Limit, or (iii) the
aggregate amount of the Revolving Loans and Letter of Credit Obligations outstanding at any time
based upon Eligible In-Transit Inventory exceeds $1,600,000, such event shall not limit, waive or
otherwise affect any rights of Agent or Lenders in such circumstances or on any future occasions
and Borrowers shall, upon demand by Agent, which may be made at any time or from time to time,
immediately repay to Agent the entire amount of any such excess(es) for which payment is demanded.



2.5 Increase in Maximum Credit.



(a) Administrative Borrower may, at any time, deliver a written request to Agent to increase
the Maximum Credit. Any such written request shall specify the amount of the increase in the
Maximum Credit that Borrowers are requesting, provided, that, (i) in no event shall
the aggregate amount of any such increase in the Maximum Credit cause the Maximum Credit to exceed
$100,000,000, (ii) such request shall be for an increase of not less than $10,000,000, (iii) any
such request shall be irrevocable, and (iv) in no event shall more than one such written request be
delivered to Agent in any calendar quarter.



(b) Upon the receipt by Agent of any such written request, Agent shall notify each of the
Lenders of such request and each Lender shall have the option (but not the obligation) to increase
the amount of its Commitment by an amount up to its Pro Rata Share of the amount of the increase in
the Maximum Credit requested by Administrative Borrower as set forth in the notice from Agent to
such Lender. Each Lender shall notify Agent within fifteen (15) days after the receipt of such
notice from Agent whether it is willing to so increase its Commitment, and if so, the amount of
such increase; provided, that, (i) the minimum increase in the Commitments of each
such Lender providing the additional Commitments shall equal or exceed $2,000,000, and (ii) no
Lender shall be obligated to provide such increase in its Commitment and the determination to
increase the Commitment of a Lender shall be within the sole and absolute discretion of such
Lender. If the aggregate amount of the increases in the Commitments received from the Lenders does
not equal or exceed the amount of the increase in the Maximum Credit requested by Administrative
Borrower, Agent may seek additional increases from Lenders or Commitments from such Eligible
Transferees as it may determine, after consultation with Administrative Borrower. In the event
Lenders (or Lenders and any such Eligible Transferees, as the case may be) have committed in
writing to provide increases in their Commitments or new Commitments in an aggregate amount in
excess of the increase in the Maximum Credit requested by Borrowers or permitted hereunder, Agent
shall then have the right to allocate such commitments, first to Lenders and then to Eligible
Transferees, in such amounts and manner as Agent may determine, after consultation with
Administrative Borrower.



(c) The Maximum Credit shall be increased by the amount of the increase in Commitments from
Lenders or new Commitments from Eligible Transferees, in each case selected in accordance with
Section 2.5(a) above, for which Agent has received Assignment and Acceptances forty-five(45) days
after the date of the request by Administrative Borrower for the increase or such earlier date as
Agent and Administrative Borrower may agree (but subject to the satisfaction of the conditions set
forth below), whether or not the aggregate amount of the increase in Commitments and new
Commitments, as the case may be, equal or exceed the amount of the increase in the Maximum Credit
requested by Administrative Borrower in accordance with the terms hereof, effective on the date
that each of the following conditions have been satisfied:



(i) Agent shall have received from each Lender or Eligible Transferee that is providing an
additional Commitment as part of the increase in the Maximum Credit, an Assignment and Acceptance
duly executed by such Lender or Eligible Transferee and each Borrower, provided,
that, the aggregate Commitments set forth in such Assignment and Acceptance(s) shall be not
less than $10,000,000;



(ii) the conditions precedent to the making of Revolving Loans set forth in Section 4.2 shall
be satisfied as of the date of the increase in the Maximum Credit, both before and after giving
effect to such increase;



(iii) Agent, at its option, shall have received an opinion of counsel to Borrowers in form and
substance and from counsel reasonably satisfactory to Agent and Lenders addressing such matters as
Agent may reasonably request (including an opinion as to no conflicts with other Indebtedness and a
non-contravention opinion as to other documents and Indebtedness);



(iv) such increase in the Maximum Credit on the date of the effectiveness thereof shall not
violate any applicable law, regulation or order or decree of any court or other Governmental
Authority and shall not be enjoined, temporarily, preliminarily or permanently;



(v) there shall have been paid to each Lender and Eligible Transferee providing an additional
Commitment in connection with such increase in the Maximum Credit all fees and expenses arising
under or related to this Agreement that are due and payable to such Person on or before the
effectiveness of such increase; and



(vi) there shall have been paid to Agent, for the account of the Agent and Lenders (in
accordance with any agreement among them) all fees and expenses (including reasonable fees and
expenses of counsel) due and payable pursuant to any of the Loan Documents on or before the
effectiveness of such increase.



(d) As of the effective date of any such increase in the Maximum Credit, each reference to the
term Maximum Credit herein, and in any of the other Loan Documents shall be deemed amended to mean
the amount of the Maximum Credit specified in the most recent written notice from Agent to
Administrative Borrower of the increase in the Maximum Credit.



2.6 Joint and Several Liability of 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 Agent and Lenders under this Agreement and the other Loan 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.
Borrowers shall be liable for all amounts due to Agent and Lenders under this Agreement, regardless
of which Borrower actually receives the Revolving Loans or Letter of Credit Obligations hereunder
or the amount of such Revolving Loans received or the manner in which Agent or any Lender accounts
for such Revolving Loans, Letter of Credit Obligations or other extensions of credit on its books
and records. The Obligations of Borrowers with respect to Revolving 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 Revolving 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 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 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 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 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 Agent or any
Lender or any other event, condition or thing that might be deemed a legal or equitable discharge
of a surety or guarantor. The obligations of each Borrower under this Section 2.6 shall not be
diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower. The joint and several liability
of the Borrowers 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 Borrower or any of the Lenders.



(d) The provisions of this Section 2.6 hereof are made for the benefit of the Lenders and
their successors and assigns, and subject to Section 14.4 hereof, 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 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. The provisions of this Section 2.6 shall remain in effect until all
the Obligations shall have been paid in full or otherwise fully satisfied (other than indemnities
and contingent Obligations which have not yet accrued). If at any time, any payment, or any part
thereof, made in respect of any of the Obligations is rescinded or must otherwise be restored or
returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower,
or otherwise, the provisions of this Section 2.6 hereof will forthwith be reinstated and in effect
as though such payment had not been made.



(e) 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, state or provincial and including, without limitation, the Bankruptcy Code of the United
States).



(f) With respect to the Obligations arising as a result of the joint and several liability of
Borrowers hereunder with respect to Revolving 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 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 Agent or any Lender. Any
claim which any Borrower may have against any other Borrower with respect to any payments to Agent
or 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, Agent and 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 Borrowers, either or all 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 Borrowers or any other
Person, or against any security or collateral for the Obligations. Each Borrower consents and
agrees that Agent and 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.



2.7 Commitments.



The aggregate amount of each Lender’s Pro Rata Share of the Revolving Loans and Letter of
Credit Obligations shall not exceed the amount of such Lender’s Commitment, as the same may from
time to time be amended in accordance with the provisions hereof.



	 	 	 	 	 
	SECTION 3.	 	INTEREST AND FEES
	 	3.1	 	 	Interest.

	 	 	 	 	 







(a) Borrowers shall pay to Agent interest on the outstanding principal amount of the Revolving
Loans at the Interest Rate. All interest accruing hereunder on and after the date of any Event of
Default or termination hereof shall be payable on demand.



(b) Each Borrower (or Administrative Borrower on behalf of such Borrower) may from time to
time request that Base Rate Loans be converted to Eurodollar Rate Loans or that any existing
Eurodollar Rate Loans continue for an additional Interest Period. Such request from a Borrower (or
Administrative Borrower on behalf of such Borrower) shall specify the amount of the Eurodollar Rate
Loans or the amount of the Base Rate Loans to be converted to Eurodollar Rate Loans or the amount
of the Eurodollar Rate Loans to be continued (subject to the limits set forth below) and the
Interest Period to be applicable to such Eurodollar Rate Loans (and if it does not specify an
Interest Period, the Interest Period shall be deemed to be a one (1) month period). Subject to the
terms and conditions contained herein, three (3) Business Days after receipt by Agent of such a
request from a Borrower (or Administrative Borrower on behalf of such Borrower) which may be
telephonic (and followed by a confirmation in writing if requested by Agent), Base Rate Loans shall
be converted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue, as the case may
be, provided, that, (i) no Default or Event of Default shall exist or have occurred
and be continuing, (ii) no Borrower (or Administrative Borrower on behalf of such Borrower) shall
have sent any notice of termination of this Agreement, (iii) such Borrower (or Administrative
Borrower on behalf of such Borrower) shall have complied with such customary procedures as are
established by Agent and specified by Agent to Borrower (or Administrative Borrower on behalf of
such Borrower) from time to time for requests by Borrowers for Eurodollar Rate Loans, (iv) no more
than five (5) Interest Periods may be in effect at any one time, (v) the aggregate amount of the
Eurodollar Rate Loans must be in an amount not less than $2,500,000 or an integral multiple of
$500,000 in excess thereof, and (vi) Agent shall have determined that the Interest Period or
Adjusted Eurodollar Rate is available to Agent and can be readily determined as of the date of the
request for such Eurodollar Rate Loan by Borrower. Any request by or on behalf of a Borrower for
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans or to continue any
existing Eurodollar Rate Loans shall be irrevocable.



(c) Any Eurodollar Rate Loans shall automatically convert to Base Rate Loans upon the last day
of the applicable Interest Period, unless Agent has received and approved a request to continue
such Eurodollar Rate Loan at least three (3) Business Days prior to such last day in accordance
with the terms hereof and Borrowers are entitled to such Eurodollar Rate Loan under the terms
hereof. Any Eurodollar Rate Loans shall, at Agent’s option, upon notice by Agent to Borrower (or
Administrative Borrower on behalf of such Borrower), be subsequently converted to Base Rate Loans
in the event that this Agreement shall terminate or not be renewed. Borrowers shall pay to Agent,
upon demand by Agent (or Agent may, at its option, charge any loan account of any Borrower) any
amounts required to compensate Agent or Participant for any loss (including loss of anticipated
profits), cost or expense incurred by such person, as a result of the conversion of Eurodollar Rate
Loans to Base Rate Loans pursuant to any of the foregoing.



(d) Interest shall be payable by Borrowers to Agent monthly in arrears not later than the
first day of each calendar month and shall be calculated on the basis of a three hundred sixty
(360) day year and actual days elapsed, other than for Base Rate Loans which shall be calculated on
the basis of three hundred sixty-five (365) or three hundred sixty-six (366) day year, as
applicable, and actual days elapsed. The interest rate on non-contingent Obligations (other than
Eurodollar Rate Loans) shall increase or decrease by an amount equal to each increase or decrease
in the Base Rate effective on the date any change in such Base Rate is effective. In no event
shall charges constituting interest payable by Borrowers to Agent exceed the Maximum Interest Rate
and if any such part or provision of this Agreement is in contravention of any such law or
regulation, such part or provision shall be deemed amended to conform thereto.



3.2 Fees.



(a) Borrowers shall pay to Agent, for the account of Lenders, monthly an unused line fee at a
rate equal to one (1.00%) percent (on a per annum basis) calculated upon the amount by which the
Maximum Credit exceeds the average daily principal balance of the outstanding Revolving Loans and
Letters of Credit during the immediately preceding month (or part thereof) so long as any
Obligations are outstanding. Such fees shall be payable on the first Business Day of each month in
arrears and calculated based on a three hundred sixty (360) day year and actual days elapsed.



(b) Borrowers shall pay to Agent, for the benefit of Lenders, in the case of Letters of
Credit, monthly a fee of three and one-half (3.50%) percent (on a per annum basis) on the average
daily outstanding balance of Letters of Credit for the immediately preceding month (or part
thereof), payable in arrears as of the first day of each month, computed for each day from the date
of issuance to the date of expiration; provided, that, Borrowers shall, at Agent’s
option or at the written direction of the Required Lenders, pay such fees at a rate two (2%)
percent greater than the highest rate above on such average daily maximum amount for: (i) the
period from and after the date of termination or non-renewal hereof until Lenders have received
full and final payment of all Obligations (notwithstanding entry of a judgment against any Borrower
or Guarantor) and (ii) the period from and after the date of the occurrence of an Event of Default
for so long as such Event of Default is continuing as determined by Agent. Such letter of credit
fees shall be calculated on the basis of a three hundred sixty (360) day year and actual days
elapsed and the obligation of Borrowers to pay such fee shall survive the termination or
non-renewal of this Agreement. In addition to the letter of credit fees provided above, Borrowers
shall pay to Issuing Bank for its own account (without sharing with Lenders) the letter of credit
fronting fee of one-eighth (0.125%) percent per annum and the other customary charges from time to
time of Issuing Bank with respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of Credit.



(c) Borrowers shall pay to Agent the other fees and amounts set forth in the Fee Letter in the
amounts and at the times specified therein or as has otherwise been agreed by or on behalf of
Borrowers. To the extent payment in full of the applicable fee is received by Agent from Borrowers
on or about the date hereof, Agent shall pay to each Lender its share of such fees in accordance
with the terms of the arrangements of Agent with such Lender.



3.3 Inability to Determine Applicable Interest Rate.



If Agent shall determine in good faith (which determination shall, absent manifest error, be
final and conclusive 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, Agent shall on such date give notice to
Administrative Borrower and each Lender of such determination. Upon such date no Revolving Loans
may be made as, or converted to, Eurodollar Rate Loans until such time as Agent notifies
Administrative Borrower and Lenders that the circumstances giving rise to such notice no longer
exist and any request for Eurodollar Rate Loans received by Agent shall be deemed to be a request,
or a continuation or conversion, for or into Base Rate Loans.



3.4 Illegality.



Notwithstanding anything to the contrary contained herein, if (a) 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 or (b) a Lender determines in good faith (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) 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, then such Lender shall give notice thereof to Agent and Administrative Borrower and
may (i) declare that Eurodollar Rate Loans will not thereafter be made by such Lender, such that
any request for a 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 (a) or (b) above and (ii) 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. .



3.5 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 or the Issuing Bank;
(b) subject any Lender or the Issuing Bank to any tax of any kind whatsoever 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 Bank in
respect thereof (except for Taxes or Other Taxes covered by Section 6.8 and the imposition of, or
any change in the rate of, any taxes payable by such Lender or the Issuing Bank described in
Sections 6.8(c)(i) and (ii)); or (c) impose on any Lender or the Issuing Bank or the London
interbank market any other condition, cost or expense affecting this Agreement or 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 Revolving Loan), or to
increase the cost to such Lender or the Issuing Bank 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 or receivable by such Lender or the Issuing
Bank hereunder (whether of principal, interest or any other amount) then, upon request of such
Lender or the Issuing Bank, Borrowers will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered; provided,
that, no Lender or participant shall be entitled to compensation under this Section 3.5 by
reason of a Change in Law taking effect prior to the date such person becomes a Lender or
participant hereunder..



3.6 Capital Requirements.



If any Lender or the Issuing Bank determines that any Change in Law affecting such Lender or
the Issuing Bank or any lending office of such Lender or such Lender’s or the Issuing Bank’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 Bank’s capital or on the capital of such
Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement, the
Commitments of such Lender or the Revolving Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that
which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing
Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with
respect to capital adequacy), then from time to time Borrowers will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender
or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction
suffered; provided, that no Lender or participant shall be entitled to compensation
under this Section 3.6 by reason of any Change in Law taking effect prior to the date such person
becomes a Lender or participant hereunder.



3.7 Certificates for Reimbursement.



A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to
compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified
in Sections 3.5 or 3.6 and delivered to Administrative Borrower shall be conclusive absent manifest
error. Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown
as due on any such certificate within fifteen (15) days after receipt thereof.



3.8 Delay in Requests.



Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant
to Sections 3.5 or 3.6 shall not constitute a waiver of such Lender’s or the Issuing Bank’s right
to demand such compensation; provided, that, Borrowers shall not be required to
compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs incurred
or reductions occurring more than one hundred (100) days prior to the date that such Lender or the
Issuing Bank, as the case may be, becomes aware of the event giving rise to such Lender’s or
Issuing Bank’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 (100) day period referred
to above shall be extended to include the period of retroactive effect thereof).



3.9 Mitigation; Replacement of Lenders.



(a) If any Lender requests compensation under Sections 3.4, 3.5 or Section 3.6, or Borrowers
are required to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 6.8, then such Lender shall, if requested by
Administrative Borrower, use reasonable efforts (subject to overall policy considerations of such
Lender) to designate a different lending office for funding or booking its Revolving 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 Agent determines, if, in the judgment of
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 Agent or such Lender to
any unreimbursed cost or expense and Agent or such Lender would not suffer any economic, legal or
regulatory disadvantage. Nothing in this Section 3.9 shall affect or postpone any of the
obligations of Borrowers or the rights of Agent or such Lender pursuant to this Section 3.9.
Borrowers hereby agree to pay on demand all reasonable costs and expenses incurred by Agent or any
Lender in connection with any such designation or assignment.



(b) If any Lender requests compensation under Sections 3.4, 3.5 or Section 3.6 hereof, or if
Borrowers are required to pay any additional amount to any Lender or Governmental Authority
pursuant to Section 6.8, then within sixty (60) days thereafter, Administrative Borrower may, at
its sole expense and effort, upon notice to such Lender and 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 15.7),
all of its interests, rights and obligations under this Agreement to an Eligible Transferee that
shall assume such obligations; provided, that, (i) Administrative Borrower has
received the prior written consent of Agent and each Issuing Bank, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal amount of its Revolving Loans and
participations in Letter of Credit Obligations that it has funded, if any, accrued interest
thereon, accrued fees and other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal) and Administrative Borrower (in the case of accrued interest, fees
and other amounts, including amounts under Section 3.10), (iii) such assignment will result in a
reduction in such compensation and payments, and (iv) 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 3.9 shall impair any rights that any Borrower or Agent may have
against any Lender that is a Defaulting Lender.



3.10 Funding Losses.



Borrowers shall pay to Agent its customary administrative charge and shall hold Agent and each
Lender harmless from all losses, expenses and liabilities (including any interest paid by a Lender
to lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense
or liability sustained by any Lender in connection with the liquidation or redeployment of such
funds) 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, any Eurodollar Rate Loan does not occur on a date specific therefor in a request
for conversion or continuation, (b) if any prepayment or other principal payment of any of its
Eurodollar Rate Loans occurs on a date prior to the last day of an Interest Period applicable to
such Revolving 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
Administrative Borrower). This covenant shall survive the termination or non-renewal of this
Agreement and the payment of the Obligations..



3.11 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 amounts that are contracted for,
charged or received by 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
is charged or received in excess of the Maximum Interest Rate (the “Excess”), any such Excess
received by Agent or any Lender shall be applied, first, to the payment of the 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 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
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 3.11 shall be
deemed to be incorporated into each of the other Loan Documents (whether or not any provision of
this Section is referred to therein).



3.12 No Requirement of Match Funding.



Notwithstanding anything to the contrary contained herein, Agent and Lenders shall not be
required to acquire US Dollar deposits in the London interbank market or any other offshore US
Dollar market to fund any Eurodollar Rate Loan or to otherwise match fund any Obligations as to
which interest accrues based on the Adjusted Eurodollar Rate. All of the provisions of this
Section 3 shall be deemed to apply as if 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 Adjusted Eurodollar Rate by acquiring such US Dollar deposits for each Interest Period in
the amount of the Eurodollar Rate Loans or other applicable Obligations.



	 	 	 	 	 
	SECTION 4.	 	CONDITIONS PRECEDENT
	 	4.1	 	 	Conditions Precedent to Initial Revolving Loans and Letters of Credit.

	 	 	 	 	 







The obligation of Lenders to enter into this Agreement and to make the initial Revolving Loans
or of Issuing Bank to provide for the initial Letters of Credit hereunder is subject to the
satisfaction of, or waiver of, each of the following conditions precedent:



(a) Agent shall have received, in form and substance reasonably satisfactory to Agent, all
releases, terminations and such other documents as Agent may reasonably request to evidence and
effectuate the termination and release by of any interest in and to any assets and properties of
each Borrower and Guarantor that is not a Permitted Lien;



(b) all requisite corporate action and proceedings in connection with this Agreement and the
other Loan Documents shall be reasonably satisfactory in form and substance to Agent, and Agent
shall have received all information and copies of all documents, including records of requisite
corporate action and proceedings which Agent may have requested in connection therewith, such
documents where requested by Agent or its counsel to be certified by appropriate corporate officers
or Governmental Authority (and including a copy of the certificate of incorporation of each
Borrower and Guarantor certified by the Secretary of State (or equivalent Governmental Authority)
which shall set forth the same complete corporate name of such Borrower or Guarantor as is set
forth herein and such document as shall set forth the organizational identification number of each
Borrower or Guarantor, if one is issued in its jurisdiction of incorporation);



(c) no Material Adverse Effect shall have occurred since the date of Agent’s latest field
examination (not including for this purpose the field review referred to in clause (f) below);
provided, however, that if all other conditions precedent specified in this Section 4.1 have been
satisfied, then Borrowers shall be deemed to have complied with the condition precedent set forth
in this Section 4.1(c) so long as, on the date of the making of the initial Revolving Loan or the
issuance of the initial Letter of Credit and after giving effect thereto Excess Availability
(without giving effect to any MAE Reserve) shall be greater than the amount equal to the greater of
(i) $30,000,000 or (ii) thirty percent (30%) of the Maximum Credit;



(d) no material pending or threatened in writing, litigation, proceeding, bankruptcy or
insolvency, injunction, order or claim with respect to Borrowers and Guarantors shall exist;



(e) no material default or event of default under or in respect of any Material Contract of
any Borrower or Guarantor shall exist;



(f) Agent shall have completed a field review of the Records and such other information with
respect to the Collateral as Agent may reasonably require to determine the amount of Revolving
Loans available to Borrowers (including, without limitation, current perpetual inventory records
and/or roll-forwards of Accounts and Inventory through the date of closing and test counts of the
Inventory in a manner reasonably satisfactory to Agent, together with such supporting documentation
as may be necessary or appropriate, and other documents and information that will enable Agent to
accurately identify and verify the Collateral), the results of which in each case shall be
reasonably satisfactory to Agent, not more than three (3) Business Days prior to the date hereof or
such earlier date as Agent may agree;



(g) Agent shall have received, in form and substance reasonably satisfactory to Agent, all
consents, waivers, acknowledgments and other agreements from third persons which 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 with respect to the
locations listed on Schedule 4.1(g);



(h) Agent shall have received, in form and substance reasonably satisfactory to Agent, Deposit
Account Control Agreements by and among Agent, each Borrower and Guarantor, as the case may be and
each bank where such Borrower (or Guarantor) has a deposit account as contemplated by Sections 6.6
and 5.2 (d) hereof, in each case, duly authorized, executed and delivered by such bank and Borrower
or Guarantor, as the case may be (or Agent shall be the bank’s customer with respect to such
deposit account as Agent may specify);



(i) Liquidity as determined by Agent, on the effective date of this Agreement, shall be not
less than $450,000,000 after giving effect to any initial Revolving Loans made or to be made and
Letters of Credit issued or to be issued on the date hereof;



(j) Agent shall have received evidence, in form and substance reasonably satisfactory to
Agent, that Agent has a valid perfected first priority security interest for itself and for the
benefit of the Secured Parties in all of the Collateral (except as to priority, subject to the
liens permitted under clauses (b), (c), (i) and (j) of Section 10.2 hereof, to the extent that such
liens have priority over the liens of Agent under applicable law);



(k) Agent shall have received and reviewed lien and judgment search results, as of a date
reasonably acceptable to Agent prior to the date hereof for the location of each Borrower and
Guarantor (determined in accordance with the Uniform Commercial Code of the applicable jurisdiction
and any other applicable law) which search results shall be in form and substance reasonably
satisfactory to Agent;



(l) Agent shall have received a borrowing request and a Borrowing Base Certificate setting
forth the Revolving Loans and Letters of Credit available to Borrowers as of the date hereof as
completed in a manner reasonably satisfactory to Agent and duly authorized, executed and delivered
on behalf of Borrowers;



(m) Agent shall have received (i) projected monthly consolidated balance sheets, income
statements and statements of cash flows of Parent and its Subsidiaries for the period through the
end of the 2010 fiscal year of Parent, (ii) projected annual consolidated balance sheets, income
statements and statements of cash flows of Parent and its Subsidiaries through the end of the 2013
fiscal year of Parent, in each case as to the projections described in clauses (i) and (ii), with
the results and assumptions set forth in all of such projections in form and substance reasonably
satisfactory to Agent and a pro-forma balance sheet of Parent and Subsidiaries reflecting the
initial transactions contemplated hereunder, including, but not limited to Revolving Loans and
Letter of Credit Obligations outstanding on the date hereof and the use of the proceeds of the
initial Revolving Loans as provided herein, accompanied by a certificate, dated of even date
herewith, of Parent stating that such pro-forma balance sheet was prepared in good faith by an
authorized officer of Parent and based on assumptions that are reasonable in light of all facts and
circumstances known to Parent at such time, and (iii) any updates or modifications to the projected
financial statements of Parent previously received by Agent, in each case in form and substance
reasonably satisfactory to Agent;



(n) Agent shall have received evidence of insurance and loss payee endorsements required under
Section 9.5 hereof, in form and substance reasonably satisfactory to Agent, and certificates of
insurance policies and/or endorsements naming Agent as loss payee as required under Section 9.5
hereof;



(o) Agent shall have received, in form and substance reasonably satisfactory to Agent, the
opinion letter of counsel(s) to Borrower with respect to the Loan Documents and the security
interests and liens of Agent, for itself and the benefit of Secured Parties with respect to the
Collateral and such other matters as Lender may request;



(p) the other Loan Documents and all instruments and documents hereunder and thereunder shall
have been duly executed and delivered to Agent, in form and substance reasonably satisfactory to
Agent; and



(q) without limiting the generality of the provisions of Section 14.3 for purposes of
determining compliance with the conditions specified in this Section 4.1, each Lender that has
signed this Agreement shall be deemed to have consented to approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless Agent shall have received notice from such Lender
prior to the date hereof specifying its objection thereto.



4.2 Conditions Precedent to All Revolving Loans and Letters of Credit.



The obligation of Lenders to make the Revolving Loans, including the initial Revolving Loans
or of Issuing Bank to issue any Letter of Credit, including the initial Letters of Credit
(provided, that, the exceptions set forth in clause(a) or (b)(iii) shall not apply to Revolving
Loans or Letters of Credit requested by Borrowers on the date hereof), is subject to the continuing
satisfaction of the conditions specified in Section 4.1 and to the further satisfaction of, or
waiver of, immediately prior to or concurrently with the making of each such Revolving 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 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 Revolving 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 accurate on and as of such earlier date); except, that, in the
event that any single act, condition or event exists or has occurred and is continuing that has had
or could reasonably be expected to have a Material Adverse Effect and such single act, condition or
event causes any of the representations and warranties set forth in Sections 8.3, 8.6, 8.7, 8.8,
8.9, or 8.11 hereof that are qualified by such Material Adverse Effect standard to no longer be
true or correct (and all other conditions precedent to the making of a Revolving Loan or providing
a Letter of Credit are satisfied), then Borrowers shall be deemed to have complied with the
condition precedent set forth in this Section 4.2(a) so long as, on the date of the making of any
Revolving Loan or providing of any Letter of Credit and after giving effect thereto Excess
Availability (after giving effect to any MAE Reserve) shall be greater than zero (-0-);



(b) no law, regulation, order, judgment or decree of any Governmental Authority shall exist,
and no action, suit, investigation, litigation or proceeding shall be pending or threatened in any
court or before any arbitrator or Governmental Authority, which (i) purports to enjoin, prohibit,
restrain or otherwise affect (A) the making of the Revolving Loans or providing the Letters of
Credit, or (B) the consummation of the transactions contemplated pursuant to the terms hereof or
the other Loan Documents or (ii) has or has a reasonable likelihood of having a Material Adverse
Effect, except, that, in the event that all other conditions precedent to the making of a Revolving
Loan or the providing of a Letter of Credit are satisfied other than Section 4.2(b)(ii), then such
condition precedent shall be deemed satisfied so long as, on the date of such request and after
giving effect thereto, Excess Availability (after giving effect to any MAE Reserve) shall be
greater than zero (-0-); and



(c) no Default or Event of Default (other than an Event of Default under Section 12.1(n),
provided, that, an MAE Reserve is in full force and effect) shall exist or have occurred and be
continuing on and as of the date of the making of such Revolving Loan or providing each such Letter
of Credit and after giving effect thereto.



	 	 	 	 	 
	SECTION 5.	 	GRANT AND PERFECTION OF SECURITY INTEREST
	 	5.1	 	 	Grant of Security Interest.

	 	 	 	 	 







To secure payment and performance of all Obligations, each Borrower and Guarantor hereby
grants to 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 assigns to Agent, for itself and the
benefit of Secured Parties, as security, the following items and types of personal property of each
Borrower and Guarantor, whether now owned or hereafter acquired or existing, and wherever located
(together with all other collateral security for the Obligations at any time granted to or held or
acquired by Agent or any Lender, collectively, the “Collateral”), including all of each Borrower’s
and Guarantor’s right, title and interest in and to the following:



(a) all Accounts;



(b) all general intangibles, exclusive of all Intellectual Property;



(c) all goods, including, without limitation, Inventory and Equipment;



(d) all chattel paper, including, without limitation, all tangible and electronic chattel
paper;



(e) all instruments, including, without limitation, all promissory notes;



(f) all documents;



(g) all deposit accounts except for Excluded Deposit Accounts;



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



(i) all supporting obligations and all present and future liens, security interests, rights,
remedies, title and interest in, to and in respect of Receivables and 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, Receivables or 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;



(j) all monies, credit balances, deposits and other property of any Borrower or Guarantor now
or hereafter held or received by or in transit to Agent, any Lender or its Affiliates or at any
other depository or other institution from or for the account of any Borrower or Guarantor, whether
for safekeeping, pledge, custody, transmission, collection or otherwise but not including any
Excluded Deposit Accounts or any monies in Investment Accounts;



(k) all Pledged Equity Interests;



(l) all commercial tort claims, including, without limitation, those identified in the
Information Certificate;



(m) to the extent not otherwise described above, all Receivables;



(n) all Records; and



(o) all products and proceeds of the foregoing, in any form, including insurance proceeds and
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.



5.2 Perfection of Security Interests.



(a) Each Borrower and Guarantor irrevocably and unconditionally authorizes Agent (or its
agent) to file (for itself and the benefit of the Secured Parties) at any time and from time to
time such financing statements with respect to the Collateral naming Agent or its designee as the
secured party and such Borrower or Guarantor as debtor, as Agent may reasonably require, and
including any other information with respect to such Borrower or Guarantor or otherwise required by
part 5 of Article 9 of the Uniform Commercial Code, as Agent may determine, together with any
amendment and continuations with respect thereto, which authorization shall apply to all financing
statements filed on, prior to or after the date hereof. Each Borrower and Guarantor hereby
ratifies and approves all financing statements naming Agent or its designee as secured party and
such Borrower or Guarantor, 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 Agent prior to the
date hereof and ratifies and confirms the authorization of Agent to file such financing statements
(and amendments, if any). Each Borrower and Guarantor hereby authorizes Agent to adopt on behalf
of such Borrower and Guarantor any symbol required for authenticating any electronic filing. In
the event that the description of the collateral in any financing statement naming Agent or its
designee as the secured party and any Borrower or Guarantor as debtor includes assets and
properties of such Borrower or Guarantor 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 Borrower or Guarantor 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 Borrower or Guarantor at any time file, or permit or cause to be
filed, any termination statement with respect to any financing statement naming Agent or its
designee as secured party and such Borrower or Guarantor as debtor until all of the Obligations
have been repaid in full and the Agent’s security interest in the Collateral has been released, or
any correction statement with respect to any such financing statement that has been approved by
Agent and Administrative Borrower prior to filing (or any amendment or continuation with respect
thereto).



(b) Each Borrower and Guarantor does not have any chattel paper (whether tangible or
electronic) or instruments as of the date hereof, except as set forth in the Information
Certificate. In the event that any Borrower or Guarantor shall be entitled to or shall receive any
chattel paper or instrument after the date hereof, Borrowers and Guarantors shall promptly notify
Agent thereof in writing. Promptly upon the demand by Agent at any time during the occurrence of a
Cash Dominion Event, such Borrower or Guarantor shall deliver, or cause to be delivered to Agent,
all tangible chattel paper and instruments that such Borrower or Guarantor has or may at any time
acquire, accompanied by such instruments of transfer or assignment duly executed in blank as Agent
may from time to time specify, in each case except as Agent may otherwise agree. At Agent’s
option, each Borrower and Guarantor shall, or Agent may at any time on behalf of any Borrower or
Guarantor, cause the original of any such instrument or chattel paper to be conspicuously marked in
a form and manner reasonably acceptable to 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 and any sale, transfer, assignment or encumbrance
of this [chattel paper][instrument] violates the rights of such secured party.”



(c) Upon and during the continuance of a Cash Dominion Event, in the event that any Borrower
or Guarantor 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 Borrower or Guarantor shall promptly notify Agent
thereof in writing. Promptly upon Agent’s request, such Borrower or Guarantor shall take, or cause
to be taken, such actions as Agent may reasonably request to give Agent control of any electronic
chattel paper or transferable record held or acquired by such Borrower or Guarantor under
Section 9-105 of the UCC 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 any relevant jurisdiction.



(d) Each Borrower and Guarantor does not have any deposit accounts as of the date hereof,
except as set forth in Schedule 8.10 of the Information Certificate. Borrowers and Guarantors
shall not, directly or indirectly, after the date hereof open, establish or maintain any deposit
account unless each of the following conditions is satisfied: (i) Agent shall have received not
less than five (5) Business Days prior written notice of the intention of any Borrower or Guarantor
to open or establish such account which notice shall specify in reasonable detail and specificity
acceptable to Agent the name of the account, the owner of the account, the name and address of the
bank at which such account is to be opened or established, the individual at such bank with whom
such Borrower or Guarantor is dealing and the purpose of the account, (ii) the bank where such
account is opened or maintained shall be reasonably acceptable to Agent (it being agreed that as of
the date hereof, JPMorgan Chase Bank, N.A., Citibank, N.A., Comerica Bank, and Bank of America,
National Association are acceptable to the Agent) and (iii) on or before the opening of such
deposit account, such Borrower or Guarantor shall as Agent may specify either (A) deliver to Agent
a Deposit Account Control Agreement with respect to such deposit account duly authorized, executed
and delivered by such Borrower or Guarantor and the bank at which such deposit account is opened
and maintained or (B) arrange for Agent to become the customer of the bank with respect to the
deposit account on terms and conditions reasonably acceptable to Agent. The terms of this
subsection (d) shall not apply to Excluded Deposit Accounts.



(e) No Borrower or Guarantor owns or holds, directly or indirectly, beneficially or as record
owner or both, any investment property, as of the date hereof, or have any Investment Account with
any bank or other financial institution or other securities intermediary or commodity intermediary
as of the date hereof, in each case except as set forth in the Information Certificate.



(f) Borrowers and Guarantors 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 date
hereof, except as set forth in the Information Certificate. In the event that any Borrower or
Guarantor shall be entitled to or shall receive any right to payment under any letter of credit,
banker’s acceptance or any similar instrument in a face amount of $1,000,000 (singly or $5,000,000
in the aggregate), whether as beneficiary thereof or otherwise after the date hereof, such Borrower
or Guarantor shall promptly notify Agent thereof in writing. Such Borrower or Guarantor shall
immediately, as Agent may specify, either (i) deliver, or cause to be delivered to Agent, with
respect to any such letter of credit, banker’s acceptance or similar instrument, the written
agreement of Issuing Bank and any other nominated person obligated to make any payment in respect
thereof (including any confirming or negotiating bank), in form and substance satisfactory to
Agent, consenting to the assignment of the proceeds of the letter of credit to Agent by such
Borrower or Guarantor and agreeing to make all payments thereon directly to Agent or as Agent may
otherwise direct or (ii) cause Agent to become, at Borrowers’ expense, the transferee beneficiary
of the letter of credit, banker’s acceptance or similar instrument (as the case may be).



(g) Borrowers and Guarantors do not have any commercial tort claims as of the date hereof,
except as set forth in the Information Certificate. In the event that any Borrower or Guarantor
shall at any time after the date hereof have any commercial tort claims, such Borrower or Guarantor
shall promptly notify 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 Borrower or Guarantor to 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 Borrower or Guarantor to Agent shall be deemed to constitute
such grant to 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 Agent provided in Section 5.2(a) hereof or otherwise arising by the execution by
such Borrower or Guarantor of this Agreement or any of the other Loan Documents, Agent is hereby
irrevocably authorized from time to time and at any time to file such financing statements naming
Agent or its designee as secured party and such Borrower or Guarantor as debtor, or any amendments
to any financing statements, covering any such commercial tort claim as Collateral. In addition,
each Borrower and Guarantor shall promptly upon Agent’s request, execute and deliver, or cause to
be executed and delivered, to Agent such other agreements, documents and instruments as Agent may
reasonably require in connection with such commercial tort claim.



(h) Borrowers and Guarantors do not have any goods, documents of title or other Collateral in
the custody, control or possession of a third party as of the date hereof, except as set forth in
the Information Certificate and except for goods located in the United States or Canada in transit
to a location of a Borrower or Guarantor permitted herein in the ordinary course of business of
such Borrower or Guarantor 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 date hereof in the
custody, control or possession of any other person not referred to in the Information Certificate
or such carriers, Borrowers and Guarantors shall to the extent Borrowers wish to have such goods
deemed Eligible In-Transit Inventory promptly notify Agent thereof in writing. In any event, at
any time that Excess Availability is equal to or less than $25,000,000 or a Default or Event of
Default has occurred and is continuing, promptly upon Agent’s request, Borrowers and Guarantors
shall deliver to Agent a Collateral Access Agreement duly authorized, executed and delivered by
such person and the Borrower or Guarantor that is the owner of such Collateral.



(i) Borrowers and Guarantors shall take any other actions reasonably requested by Agent from
time to time to cause the attachment, perfection and first priority of, and the ability of Agent to
enforce, the security interest of Agent in any and all of the Collateral, including, without
limitation, (i) executing, delivering and, where appropriate, filing financing statements and
amendments relating thereto under the UCC, or other applicable law, to the extent, if any, that any
Borrower’s or Guarantor’s signature thereon is required therefor, (ii) causing 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 Agent to enforce, the security
interest of Agent in such Collateral, (iii) complying with any provision of any statute, regulation
or treaty of the United States or Canada as to any Collateral if compliance with such provision is
a condition to attachment, perfection or priority of, or ability of Agent to enforce, the security
interest of Agent in such Collateral, (iv) obtaining the consents and approvals of any Governmental
Authority or third party necessary for the Agent to perfect, establish the priority of or enforce
its security interest in any of the Collateral, including, without limitation, any consent of any
licensor, lessor or other person obligated on Collateral, and taking all actions required by the
UCC, as applicable in any relevant jurisdiction.



5.3 Special Provisions Relating to Collateral. Notwithstanding anything to the contrary
contained in this Section 5, the types or items of Collateral (i) described in Section 5.1 hereof
shall not include (A) any Real Property owned or leased by any Borrower or Guarantor, or any
fixtures attached thereto; (B) Intellectual Property, and (C) any rights or interest in any lease,
contract, license or license agreement covering personal property of any Borrower or Guarantor, so
long as under the terms of such lease, contract, license or license agreement, or applicable law
with respect thereto, the grant of a security interest or lien therein to Agent is prohibited (or
would render such lease, contract, license or license agreement cancelled, invalid or
unenforceable) and such prohibition has not been or is not waived or the consent of the other party
to such lease, contract, license or license agreement has not been or is not otherwise obtained;
provided, that, the foregoing exclusion shall in no way be construed (1) to apply
if any such prohibition is unenforceable under the UCC, or other applicable law, (2) so as to
limit, impair or otherwise affect Agent’s unconditional continuing security interests in and liens
upon any rights or interests of Borrowers or Guarantors in or to monies due or to become due to a
Borrower or Guarantor under any such lease, contract, license or license agreement (including any
Receivables) or (3) so as to require any Borrower or Guarantor to obtain any such waivers or
consents (all such property not included in the Collateral, the “Excluded Collateral”). .



	 	 	 	 	 
	SECTION 6.	 	COLLECTION AND ADMINISTRATION
	 	6.1	 	 	Borrowers’ Loan Accounts.

	 	 	 	 	 







Agent shall maintain one or more loan account(s) on its books in which shall be recorded (a)
all Revolving Loans, Letters of Credit and other Obligations and the Collateral, (b) all payments
made by or on behalf of any Borrower or Guarantor and (c) all other appropriate debits and credits
as provided in this Agreement, including fees, charges, costs, expenses and interest. All entries
in the loan account(s) shall be made in accordance with Agent’s customary practices as in effect
from time to time..



6.2 Statements.



Agent shall render to Administrative Borrower each month a statement setting forth the balance
in the Borrowers’ loan account(s) maintained by Agent for Borrowers pursuant to the provisions of
this Agreement, including principal, interest, fees, costs and expenses. Each such statement shall
be subject to subsequent adjustment by Agent but shall, absent manifest errors or omissions, be
considered correct and deemed accepted by Borrowers and Guarantors and conclusively binding upon
Borrowers and Guarantors as an account stated except to the extent that Agent receives a written
notice from Administrative Borrower of any specific exceptions of Administrative Borrower thereto
within thirty (30) days after the date such statement has been received by Administrative Borrower.
Until such time as Agent shall have rendered to Administrative Borrower a written statement as
provided above, the balance in any Borrower’s loan account(s) shall be presumptive evidence of the
amounts due and owing to Agent and Lenders by Borrowers and Guarantors, absent manifest error.



6.3 Lenders’ Evidence of Debt.



Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the Obligations of each Borrower to such Lender, including the amounts of the Revolving
Loans made by it and each repayment and prepayment in respect thereof, including the amounts of
principal and interest payable and paid to such Lender from time to time hereunder. Any such
records shall be presumptively correct, absent manifest error; provided, that, the
failure to make any entry or any error in such records, shall not affect any Lender’s Commitments
hereunder or the Obligations in respect of any applicable Revolving Loans and in the event of any
inconsistency between the Register and any Lender’s records, the Register shall govern.



6.4 Register.



(a) Agent (or its agent or sub-agent appointed by it) shall maintain a register (the
“Register”) for the recordation of the names and addresses of Lenders and the Commitments of, and
principal amount of the Revolving Loans (the “Registered Loans”) and Letter of Credit Obligations
owing to each Lender from time to time. The Register, as in effect at the close of business on the
preceding Business Day, shall be available for inspection by Administrative Borrower or any Lender
(with respect to a Lender, solely with respect to the Obligations owing to such Lender) at a
reasonable time and from time to time upon reasonable prior notice. Agent shall record, or cause
to be recorded, in the Register, the Commitments and the Revolving Loans in accordance with the
provisions of Section 15.7 and Agent shall also maintain a copy of each Assignment and Acceptance
delivered to and accepted by it and shall modify the Register to give effect to each Assignment and
Acceptance, and any such recording shall be presumptively correct, absent manifest error;
provided, that, the failure to make any entry or any error in such records, shall
not affect any Lender’s Commitments or Obligations in respect of any Revolving Loan. Borrowers,
Guarantors, Agent and Lenders shall treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. Borrowers hereby designate and authorize
Agent, and Agent agrees, to maintain, or cause to be maintained as agent for Borrowers’ solely for
purposes of maintaining the Register as provided in this Section 6.4(a).



(b) Each Lender that grants a participation shall maintain a register as a non-fiduciary agent
of Borrowers on which it enters the name and address of each Participant and the principal and
interest amount of each Participant’s interest in the Revolving Loans and Letters of Credit held by
it (the “Participant Register”). The entries in the Participant Register shall be conclusive,
absent manifest error, and such Lender shall treat each person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.



6.5 Promissory Notes.



Each Lender may at any time request that the Revolving Loans made by it be evidenced by a
promissory note. In such event, Borrowers shall execute and deliver to such Lender a promissory
note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) in a form furnished by Agent and reasonably acceptable to Administrative
Borrower. Thereafter, the Revolving Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 15.7) be represented by one or
more promissory notes in such form payable to the order of the payee named therein.



6.6 Cash Management; Collection of Proceeds of Collateral.



(a) Each Borrower and Guarantor shall establish and maintain, at its expense, deposit accounts
and cash management services of a type and on terms, and with the banks, set forth on Schedule 8.10
to the Information Certificate and, subject to Section 5.2(d) hereof, such other banks as such
Borrower or Guarantor may hereafter select. The banks set forth on Schedule 8.10 of the
Information Certificate constitute all of the banks with which Borrowers and Guarantors have
deposit account and cash management arrangements as of the date hereof and identifies each of the
deposit accounts at such banks that are used for receiving receipts from particular locations of a
Borrower or otherwise describes the nature of the use of such deposit account by such Borrower or
Guarantor (collectively, the “Cash Management Accounts” and individually a “Cash Management
Account”). Borrowers and Guarantors shall deliver, or cause to be delivered to Agent, a Deposit
Account Control Agreement duly authorized, executed and delivered by each bank where a Cash
Management Account or Concentration Account is maintained and by the applicable Borrower or
Guarantor; provided, that, Borrowers and Guarantors shall not be required to
deliver a Deposit Account Control Agreement with a depository bank as to any deposit account that
is specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of any Borrower’s or Guarantor’s employees.



(b) Each Borrower shall deposit or cause to be deposited all proceeds of Collateral, including
all proceeds from sales of Inventory, all amounts payable to each Borrower and Guarantor and all
other proceeds of Collateral, from each location of such Borrower on each Business Day into the
Cash Management Account of such Borrower used for such purpose. All such funds deposited into the
Cash Management Accounts shall be sent by wire transfer or other electronic funds transfer no less
frequently than daily (or in the case of any Cash Management account maintained in Canada, no less
frequently than once per week or more frequently upon Agent’s reasonable request) to the
Concentration Accounts, except nominal amounts which are required to be maintained in such Cash
Management Accounts under the terms of such Borrower’s arrangements with the bank at which such
Cash Management Accounts are maintained, which nominal amounts shall not exceed $50,000 as to any
individual Cash Management Account at any time.



(c) Without limiting any other rights or remedies of Agent or Lenders, Agent may, at its
option, instruct the depository banks at which the Concentration Accounts or the Cash Management
Accounts are maintained to transfer all available funds received or deposited into the
Concentration Accounts or the Cash Management Accounts to the Agent Payment Account at any time
that a Cash Dominion Event exists. Upon the termination of a Cash Dominion Event to the extent
provided in the definition of such term, Agent shall, at the written request of Administrative
Borrower, promptly instruct the depository banks at which the Concentration Accounts and Cash
Management Accounts are maintained to resume the transfer of funds in the Concentration Accounts to
the disbursement accounts of Borrowers used for such purpose, to the extent that such banks had
previously been instructed to transfer such funds to the Agent Payment Account. So long as no Cash
Dominion Event has occurred and is continuing, each Borrower and Guarantor may direct and shall
have sole control over, the manner of the disposition of funds in each Concentration Account.



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



(e) Each Borrower and Guarantor and their respective employees, agents and Subsidiaries shall,
acting as trustee for Agent, receive, as the property of Agent, any monies, checks, notes, drafts
or any other payment relating to and/or proceeds of Accounts or other Collateral which come into
their possession or under their control and promptly upon receipt thereof, shall deposit or cause
the same to be deposited in the Concentration Accounts, or remit the same or cause the same to be
remitted, in kind, to Agent. Borrowers agree to reimburse Agent on demand for any amounts owed or
paid to any bank or other financial institution at which a Concentration 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 Concentration Accounts arising out of
Agent’s payments to or indemnification of such bank, financial institution or other person. The
obligations of Borrowers to reimburse Agent for such amounts pursuant to this Section 6.6 shall
survive the termination of this Agreement.



6.7 Payments.



(a) All Obligations shall be payable to the Agent Payment Account as provided in Section 6.6
or such other place as Agent may designate from time to time. Subject to the other terms and
conditions contained herein, Agent shall apply payments received or collected from any Borrower or
Guarantor or for the account of any Borrower or Guarantor (including the monetary proceeds of
collections or of realization upon any Collateral) as follows: first, to pay any fees,
indemnities or expense reimbursements then due to Agent, Lenders and Issuing Bank from any Borrower
or Guarantor; second, to pay interest due in respect of any Revolving Loans (and including
any Special Agent Advances) or Letter of Credit Obligations; third, to pay or prepay
principal in respect of Special Agent Advances; fourth, to pay principal due in respect of
the Loans and to pay Obligations then due arising under or pursuant to any Bank Products of a
Borrower or Guarantor with Agent or another Bank Product Provider (up to the amount of any then
effective Reserve established hereunder in respect of such Bank Products), on a pro
rata basis; fifth, to pay or prepay any other Obligations whether or not then due,
in such order and manner as Agent determines and at any time an Event of Default exists or has
occurred and is continuing, to provide cash collateral for any Letter of Credit Obligations or
other contingent Obligations (but not including for this purpose any Obligations arising under or
pursuant to any Bank Products); and sixth, to pay or prepay any Obligations arising under
or pursuant to any Bank Products (other than to the extent provided for in “fourth” above)
on a pro rata basis.



(b) Notwithstanding anything to the contrary contained in this Agreement, unless so directed
by Administrative Borrower, or unless a Default or an Event of Default shall exist or have occurred
and be continuing, Agent shall not apply any payments which it receives to any Eurodollar Rate
Loans, except in the event that there are no outstanding Base Rate Loans. To the extent Agent or
any Lender receives any payments or collections in respect of the Obligations in a currency other
than US Dollars Agent may, at its option (but is not obligated to), convert such other currency to
US Dollars at the Exchange Rate in effect on such date and in such market as Agent may select in
good faith (regardless of whether such rate is the best available rate). Borrowers shall pay the
costs of such conversion (or Agent may, at its option, charge such costs to the loan account of any
Borrower maintained by Agent). Payments and collections received in any currency other than the
currency in which any outstanding Obligations are denominated will be accepted and/or applied at
the discretion of Agent. Any and all payments by or on account of the Obligations shall be made
without setoff, counterclaim or deduction.



(c) For purposes of this Section 6.7, “paid in full” and “payment in full” and “prepayment in
full” means payment of all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and 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 (i)
interest to the extent paid in excess of amounts based on the pre-default rates (but not any other
interest) and (ii) fees paid in respect of the waiver of an Event of Default, in each case as to
amounts under clauses (i) and (ii) above only to the extent that such amounts are disallowed in any
case under the United States Bankruptcy Code, or any similar statute in any jurisdiction.



(d) At Agent’s option, 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 Borrower maintained by Agent. If after receipt of any payment of, or proceeds of
Collateral applied to the payment of, any of the Obligations, Agent, any Lender or Issuing Bank is
required to surrender or return such payment or proceeds to any Person for any reason, then the
Obligations intended to be satisfied by such payment or proceeds shall be reinstated and continue
and this Agreement shall continue in full force and effect as if such payment or proceeds had not
been received by Agent or such Lender. Borrowers and Guarantors shall be liable to pay to Agent,
and do hereby agree to indemnify and hold Agent and Lenders harmless for the amount of any payments
or proceeds surrendered or returned. This Section 6.7(d) shall remain effective notwithstanding
any contrary action which may be taken by Agent or any Lender in reliance upon such payment or
proceeds. This preceding two sentences of this Section 6.7(d) shall survive the payment of the
Obligations and the termination of this Agreement.



6.8 Taxes.



(a) Any and all payments by Borrowers and Guarantors to Agent, any Issuing Bank or any Lender
under this Agreement and any of the other Loan Documents shall be made free and clear of, and
without deduction or withholding for, any Taxes, except to the extent required by applicable law.
In addition, Borrowers shall pay all Other Taxes except to the extent arising solely as a result of
Agent’s, any Lender’s or Issuing Bank’s activities with the applicable taxing jurisdiction and not
as a result of this Agreement (or Agent may, at its option, pay such Other Taxes and charge the
loan account of Borrowers for such amounts so paid).



(b) Borrowers and Guarantors shall indemnify and hold harmless Agent, Issuing Bank and Lenders
for the full amount of Taxes or Other Taxes paid by Agent, any Issuing Bank or any Lender
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section, but not including Other Taxes that arise as a result of Agent’s, any Issuing Bank’s or any
Lender’s activities with the applicable taxing jurisdiction, if any, and not as a result of this
Agreement) and any liability (including penalties, interest and expenses (including reasonable
attorney’s fees and expenses) other than those resulting solely from a failure by Agent, any
Issuing Bank or any Lender to pay any Taxes or Other Taxes which it is required to pay and for
which it received an indemnity payment) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental
Authority; provided, that, Borrowers and Guarantors shall not be required to
indemnify Agent, any Issuing Bank or any Lender with respect to any Taxes or Other Taxes which are
attributable to such Agent’s, Issuing Bank’s or Lender’s failure to comply with the provisions of
Section 6.8(f), (g), (i) or (j) hereof. Payment under this indemnification shall be made within
ten (10) days after the date Agent, any Issuing Bank or any Lender makes written demand therefor on
Administrative Borrower. If Borrowers reasonably believe that such Taxes or Other Taxes were not
correctly or legally asserted, Agent, such Issuing Bank or such Lender shall, upon Administrative
Borrower’s request and at Borrowers’ expense, provide such documents to Administrative Borrower in
form and substance reasonably satisfactory to Agent, as Administrative Borrower may reasonably
request, to enable Borrowers to contest such Taxes or Other Taxes pursuant to appropriate
proceedings then available to Borrowers (so long as providing such documents shall not, in the good
faith determination of Agent, have a reasonable likelihood of resulting in any liability of Agent,
any Issuing Bank or any Lender).



(c) If any Borrower or Guarantor shall be required by law to deduct or withhold any Taxes or
Other Taxes from or in respect of any sum payable hereunder or under the other Loan Documents to
Agent, any Issuing Bank or any Lender, then:



(i) the sum payable shall be increased as necessary so that after making all required
deductions and withholdings (including deductions and withholdings applicable to additional sums
payable under this Section) Agent, such Issuing Bank or such Lender receives an amount equal to the
sum it would have received had no such deductions or withholdings been made; provided,
that, Borrowers and Guarantors shall not be required to increase any such sum payable to
Agent, any Issuing Bank or any Lender which is attributable to such Agent’s, Issuing Bank’s or
Lender’s failure to comply with the provisions of Section 6.8(f), (g), (i) or (j) hereof;



(ii) such Borrower or Guarantor shall make such deductions and withholdings;



(iii) such Borrower or Guarantor shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable law; and



(iv) to the extent not paid to Agent, Issuing Bank or Lenders pursuant to Section 6.8(c)(i),
such Borrower or Guarantor shall also pay to Agent, any Issuing Bank or any Lender, at the time
interest is paid, all additional amounts which are necessary to preserve the after-tax yield Agent,
such Issuing Bank or such Lender would have received pursuant to the Loan Documents if such Taxes
or Other Taxes had not been imposed.



(d) Within thirty (30) days after the date of any payment by any Borrower or Guarantor of
Taxes or Other Taxes, such Borrower or Guarantor shall furnish to Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence of payment reasonably satisfactory
to Agent.



(e) If any Borrower or Guarantor otherwise would be required to pay additional amounts to
Agent, an Issuing Bank or a Lender pursuant to subsection (c) of this Section, then upon
Administrative Borrower’s written request such Lender shall use reasonable efforts at Borrowers’
expense (consistent with legal and regulatory restrictions) to take such action, including changing
the jurisdiction of its lending office, so as to eliminate or reduce any such additional payment by
such Borrower or Guarantor which may thereafter accrue.



(f) In the event a Lender shall assign the Obligations and its rights hereunder to an assignee
which is organized under the laws of a jurisdiction outside the United States of America on or
prior to the effective date of any such assignment, such assignee of a Lender shall provide
Administrative Borrower with an IRS Form W-8BEN or Form W-8ECI or other applicable form,
certificate or document prescribed by the Internal Revenue Service certifying as to such assignee’s
being entitled to full exemption from United States of America withholding tax with respect to all
payments to be made to such assignee hereunder and under any of the other Loan Documents (unless
such assignee of a Lender is unable to do so by reason of a change in law, including, without
limitation, any statute, treaty, ruling, determination or regulation occurring subsequent to the
effective date of such assignment).



(g) Notwithstanding anything to the contrary contained in this Section 6.8, unless
Administrative Borrower has received forms or other documents indicating that payments to a Lender
or Issuing Bank hereunder or under any of the other Loan Documents are not subject to United States
of America withholding or backup withholding tax, Borrowers shall, (i) withhold taxes from such
payments at the applicable statutory rate, or at a rate reduced by an applicable tax treaty and
(ii) pay such assignee such payment net of any taxes so withheld. Lenders and Issuing Bank will be
required to use reasonable efforts (including reasonable efforts to change its lending office) to
avoid or to minimize any amounts which might otherwise be payable by any Borrower or Guarantor
pursuant to this Section 6.8; provided, that, such efforts shall not cause the
imposition on such assignee of any additional costs or legal or regulatory burdens deemed by such
assignee in good faith to be material.



(h) If Agent, any Issuing Bank or any Lender receives a permanent tax benefit in respect of
any Taxes or Other Taxes for which Agent, such Issuing Bank or such Lender has received an
indemnification payment or additional amounts from any Borrower or Guarantor hereunder, so long as
no Event of Default shall exist or have occurred and be continuing, Agent, such Issuing Bank or
such Lender (as the case may be) shall credit to the loan account of Borrowers the amount of such
tax benefit.



(i) Each Person that is a Lender or Issuing Bank as of the date of this Agreement and each
Person that becomes a Lender or Issuing Bank after the date of this Agreement (i) either (A)
represents and warrants to the Borrowers that such Person is incorporated or organized under the
laws of the United States of America or a state thereof or agrees to furnish (if it is organized
under the laws of any jurisdiction other than the United States of America or any State thereof) to
Agent and Administrative Borrower prior to the time that Agent or such Borrower is required to make
any payment of principal, interest or fees hereunder, duplicate executed originals of either U.S.
Internal Revenue Service Form W-8BEN or W-8ECI, as applicable (wherein such Lender claims
entitlement to the benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide new such forms upon
the expiration of any previously delivered form or comparable statements in accordance with
applicable U.S. law and regulations and amendments thereto, duly executed and completed by such
Lender, and (ii) agrees to comply with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.



(j) Each Lender or Issuing Bank (other than any Lender or Issuing Bank that is entitled to a
presumption under applicable Treasury Regulations that it is a domestic corporation for U.S.
federal income tax purposes) shall deliver to Agent (or, in the case of an assignee of a Lender
which (i) is an Affiliate of such Lender or an Approved Fund of such Lender and (ii) does not
deliver an Assignment and Acceptance to Agent pursuant to Section 15.7(a) hereof for recordation
pursuant to Section 15.7(b) hereof, to the assigning Lender only) and Administrative Borrower two
properly completed and duly executed copies of U.S. Internal Revenue Service Form W-9 certifying
that such Lender is exempt from U.S. backup withholding tax. Such forms shall be delivered by each
such Lender on or before the date it becomes a party to this Agreement and thereafter within twenty
(20) days after receipt of a written request therefor from Agent. Notwithstanding any other
provision of this Section 6.8(j), a Lender or Issuing Bank described in this Section 6.8(j) shall
not be required to deliver any form pursuant to this Section 6.8(j) that such Lender or Issuing
Bank is not legally able to deliver.



6.9 Use of Proceeds.



Borrowers shall use the initial proceeds of the Revolving Loans and Letters of Credit
hereunder only for: (a) payments to each of the persons listed in the disbursement direction letter
furnished by Borrowers to Agent on or about the date hereof and (b) costs, expenses and fees in
connection with the preparation, negotiation, execution and delivery of this Agreement and the
other Loan Documents. All other Revolving 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 for
general operating, working capital and other corporate purposes of such Borrower not otherwise
prohibited by the terms hereof; provided, that, in no event shall any of the
proceeds be used, directly or indirectly, for the purpose of purchasing or carrying any margin
security or for the purposes of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any margin security or for any other purpose which might cause any of the
Revolving 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..



6.10 Appointment of Administrative Borrower as Agent for Requesting Revolving Loans
and Receipts of Revolving Loans and Statements.



(a) Each Borrower hereby irrevocably appoints and constitutes Administrative Borrower as its
agent and attorney-in-fact to request and receive Revolving Loans and Letters of Credit pursuant to
this Agreement and the other Loan Documents from Agent or any Lender in the name or on behalf of
such Borrower. Agent and Lenders may disburse the Revolving Loans to such bank account of
Administrative Borrower or a Borrower or otherwise make such Revolving Loans to a Borrower and
provide such Letters of Credit to a Borrower as Administrative Borrower may designate or direct,
without notice to any other Borrower or Guarantor. Notwithstanding anything to the contrary
contained herein, Agent may at any time and from time to time require that Revolving Loans to or
for the account of any Borrower be disbursed directly to an operating account of such Borrower.



(b) Administrative Borrower hereby accepts the appointment by Borrowers to act as the agent
and attorney-in-fact of Borrowers pursuant to this Section 6.10. Administrative Borrower shall
ensure that the disbursement of any Revolving Loans to each Borrower requested by or paid to or for
the account of Parent, 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 Borrower and other Guarantor hereby irrevocably appoints and constitutes
Administrative Borrower as its agent to receive statements on account and all other notices from
Agent and 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 Borrower or any Guarantor by Administrative Borrower shall be deemed for all purposes
to have been made by such Borrower or Guarantor, as the case may be, and shall be binding upon and
enforceable against such Borrower or Guarantor to the same extent as if made directly by such
Borrower or Guarantor.



(e) No termination of the appointment of Administrative Borrower as agent as aforesaid shall
be effective, except after ten (10) Business Days’ prior written notice to Agent.



6.11 Pro Rata Treatment.



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



6.12 Sharing of Payments, Etc.



(a) Each Borrower and Guarantor agrees that, in addition to (and without limitation of) any
right of setoff, banker’s lien or counterclaim Agent or any Lender may otherwise have, each Lender
shall be entitled, at its option (but subject, as among Agent and Lenders, to the provisions of
Section 14.3(b) hereof), to offset balances held by it for the account of such Borrower or
Guarantor at any of its offices, in dollars or in any other currency, against any principal of or
interest on any Revolving Loans owed to such Lender or any other amount payable to such Lender
hereunder, that is not paid when due (regardless of whether such balances are then due to such
Borrower or Guarantor), in which case it shall promptly notify Administrative Borrower and Agent
thereof; provided, that, such Lender’s failure to give such notice shall not affect
the validity thereof.



(b) If any Lender (including Agent) shall obtain from any Borrower or Guarantor payment of any
principal of or interest on any Revolving 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 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 Revolving Loans or more than its share of such other amounts then due
hereunder or thereunder by any Borrower or Guarantor to such Lender than the percentage thereof
received by any other Lender, it shall promptly pay to Agent, for the benefit of Lenders, the
amount of such excess and simultaneously purchase from such other Lenders a participation in the
Revolving 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 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 Lenders. To
such end all Lenders shall make appropriate adjustments among themselves (by the resale of
participation sold or otherwise) if such payment is rescinded or must otherwise be restored.



(c) Each Borrower and Guarantor agrees that any Lender purchasing a participation (or direct
interest) as provided in this Section may exercise, in a manner consistent with this Section, 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 Revolving Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation.



(d) 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 Borrower or Guarantor. 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 applies,
such Lender shall, to the extent practicable, assign such rights to 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 to share in the benefits of any
recovery on such secured claim.



6.13 Settlement Procedures.



(a) In order to administer the Credit Facility in an efficient manner and to minimize the
transfer of funds between Agent and Lenders, Agent may, at its option, subject to the terms of this
Section, 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.



(b) With respect to all Revolving Loans made by Agent on behalf of Lenders, the amount of each
Lender’s Pro Rata Share of the outstanding Revolving Loans shall be computed weekly, and shall be
adjusted upward or downward on the basis of the amount of the outstanding Revolving Loans as of
5:00 p.m. Chicago, Illinois time on the Business Day immediately preceding the date of each
settlement computation; provided, that, 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, but in no event more than twice in any week. Agent shall deliver to each of the Lenders
after the end of each week, or at such period or periods as Agent shall determine, a summary
statement of the amount of outstanding Revolving Loans for such period (such week or other period
or periods being hereinafter referred to as a “Settlement Period”). If the summary statement is
sent by Agent and received by a Lender prior to 12:00 p.m., then such Lender shall make the
settlement transfer described in this Section by no later than 3:00 p.m. on the same Business Day
and if received by a Lender after 12:00 p.m., 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 Revolving
Loans is more than such Lender’s Pro Rata Share of the outstanding Revolving 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 Agent by wire transfer in immediately
available funds the amount of the increase. Alternatively, if the amount of a Lender’s Pro Rata
Share of the outstanding Revolving Loans in any Settlement Period is less than the amount of such
Lender’s Pro Rata Share of the outstanding Revolving Loans for the previous Settlement Period,
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 Agent
and may occur at any time a Default or Event of Default exists or has occurred and whether or not
the conditions set forth in Section 4.2 are satisfied (except if there is an Event of Default under
Section 12.1(g) and 12.1(h), in which case the funds shall be in respect of each Lender’s
participation). 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
Revolving Loans and Letters of Credit. Each Lender shall only be entitled to receive interest on
its Pro Rata Share of the Revolving Loans to the extent such Revolving Loans have been funded by
such Lender. Because the Agent on behalf of Lenders may be advancing and/or may be repaid
Revolving Loans prior to the time when Lenders will actually advance and/or be repaid such
Revolving Loans, interest with respect to Revolving Loans shall be allocated by Agent in accordance
with the amount of Revolving Loans actually advanced by and repaid to each Lender and the Agent and
shall accrue from and including the date such Revolving Loans are so advanced to but excluding the
date such Revolving Loans are either repaid by Borrowers or actually settled with the applicable
Lender as described in this Section.



(c) To the extent that 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, Agent may
apply such amounts repaid directly to any amounts made available by Agent pursuant to this Section.
In lieu of settlements, Agent may, at its option, at any time require each Lender to provide Agent
with immediately available funds representing its Pro Rata Share of each Revolving Loan, prior to
Agent’s disbursement of such Revolving Loan to a Borrower. In such event, Agent shall notify each
Lender promptly after Agent’s receipt of the request for the Revolving Loans from a Borrower (or
Administrative Borrower on behalf of such Borrower) or any deemed request hereunder and each Lender
shall provide its Pro Rata Share of such requested Revolving Loan to the account specified by Agent
in immediately available funds not later than 2:00 p.m. on the requested funding date, so that all
such Revolving Loans shall be made by the Lenders simultaneously and proportionately to their Pro
Rata Shares. No Lender shall be responsible for any default by any other Lender in the other
Lender’s obligation to make a Revolving Loan 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 Revolving Loan hereunder.



(d) Upon the making of any Revolving Loan by Agent as provided herein, without further action
by any party hereto, each Lender shall be deemed to have irrevocably and unconditionally purchased
and received from Agent, without recourse or warranty, an undivided interest and participation to
the extent of such Lender’s Pro Rata Share in such Revolving Loan. To the extent that there is no
settlement in accordance with the terms hereof, Agent may at any time require the Lenders to fund
their participations. From and after the date, if any, on which any Lender has funded its
participation in any such Revolving Loan, Agent shall promptly distribute to such Lender, such
Lender’s Pro Rata Share of all payments of principal and interest received by Agent in respect of
such Revolving Loan.



(e) As to any Revolving Loan funded by Agent on behalf of a Lender whether pursuant to
Sections 6.13(a), 6.13(b) or 6.13(c) above, Agent may assume that each Lender will make available
to Agent such Lender’s Pro Rata Share of the Revolving Loan requested or otherwise made on such day
in the case of Revolving Loans funded pursuant to Section 6.13(c) above or otherwise on the
applicable settlement date. If Agent makes amounts available to a Borrower and such corresponding
amounts are not in fact made available to Agent by such Lender, 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 Agent at the Federal Funds
Rate for each day during such period (as published by the Federal Reserve Bank of New York or at
Agent’s option based on the arithmetic mean determined by Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. on that day by each of the three
leading brokers of Federal funds transactions in New York selected by Agent) and if such amounts
are not paid within three (3) days of Agent’s demand, at the highest Interest Rate provided for in
Section 3.1 hereof applicable to Base Rate Revolving Loans. During the period in which such Lender
has not paid such corresponding amount to Agent, notwithstanding anything to the contrary contained
in this Agreement or any of the other Revolving Loan Documents, the amount so advanced by Agent to
or for the benefit of any Borrower shall, for all purposes hereof, be a Revolving Loan made by
Agent for its own account.



(f) Upon any failure by a Lender to pay Agent pursuant to the settlement described in Section
6.13(b) above or to pay Agent pursuant to Section 6.13(c), 6.13(d) or Section 6.13(e), Agent shall
promptly thereafter notify Administrative Borrower of such failure and Borrowers shall pay such
corresponding amount to Agent for its own account within five (5) Business Days of Administrative
Borrower’s receipt of such notice. The term “Defaulting Lender” shall mean (i) any Lender that has
failed to fund any portion of the Revolving Loans, or participations in Letter of Credit
Obligations required to be funded by it hereunder within one (1) Business Day of the date required
to be funded by it hereunder, or has otherwise failed to pay over to Agent or any other Lender any
other amount required to be paid by it hereunder within one (1) Business Day of the date when due,
(ii) any Lender that has notified Agent, any Lender, Issuing Bank, or any Borrower or Guarantor in
writing that it will not or does not intend to comply with any of its funding obligations under
this Agreement or has made a public statement to the effect that it will not or does not intend to
comply with its funding obligations under this Agreement or under other agreements in which it has
agreed to make loans or provide other financial accommodations, or (iii) any Lender that becomes or
is insolvent or has a parent company that has become or is insolvent or becomes the subject of a
bankruptcy or insolvency proceeding, or has 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 and has not obtained all required orders,
approvals or consents of any court or other Governmental Authority to continue to fulfill its
obligations hereunder, in form and substance satisfactory to Agent.



(g) Agent shall not be obligated to transfer to a Defaulting Lender any payments received by
Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing
of any payments hereunder (including any principal, interest or fees and whether in respect of
Revolving Loans, participation interests or otherwise). For purposes of voting or consenting to
matters with respect to this Agreement and the other Loan Documents and determining Pro Rata
Shares, such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Revolving
Loan Commitment shall be deemed to be zero (0). So long as there is a Defaulting Lender, the
maximum amount of the Revolving Loans and Letters of Credit shall not exceed the aggregate amount
of the Commitments of the Lenders that are not Defaulting Lenders plus the Pro Rata Share of the
Defaulting Lender (determined immediately prior to its being a Defaulting Lender) of the Revolving
Loans and Letters of Credit outstanding as of the date that the Defaulting Lender has become a
Defaulting Lender. At any time that there is a Defaulting Lender, payments received for
application to the Obligations payable to Lenders in accordance with the terms of this Agreement
shall be distributed to Lenders based on their Pro Rata Shares calculated after giving effect to
the reduction of the Defaulting Lender’s Revolving Loan Commitment to zero (0) as provided herein
or at Agent’s option, Agent may instead receive and retain such amounts that would be otherwise
attributable to the Pro Rata Share of a Defaulting Lender (which for such purpose shall be such Pro
Rata Share as in effect immediately prior to its being a Defaulting Lender). To the extent that
Agent elects to receive and retain such amounts, Agent may hold such amounts (which shall not
accrue interest) and, in its reasonable discretion, relend such amounts to a Borrower. To the
extent that Agent exercises its option to relend such amounts, such amounts shall be treated as
Revolving Loans for the account of Agent in addition to the Revolving Loans that are made by the
Lenders other than a Defaulting Lender based on their respective Pro Rata Shares as calculated
after giving effect to the reduction of such Defaulting Lender’s Commitment to zero (0) as provided
herein but shall be repaid in the same order of priority as the principal amount of the Loans on a
pro rata basis for purposes of Section 6.7 hereof. Agent shall determine whether any Revolving
Loans requested shall be made from relending such amounts or from Revolving Loans from the Lenders
(other than a Defaulting Lender) and any allocation of requested Revolving Loans between them. The
rights of a Defaulting Lender shall be limited as provided herein until such time as the Defaulting
Lender has made all payments to Agent of the amounts that it had failed to pay causing it to become
a Defaulting Lender and such Lender is otherwise in compliance with the terms of this Agreement
(including making any payments as it would have been required to make as a Lender during the period
that it was a Defaulting Lender other than in respect of the principal amount of Revolving Loans,
which payments as to the principal amount of Revolving Loans shall be made based on the outstanding
balance thereof on the date of the cure by Defaulting Lender or at such other time thereafter as
Agent may specify) or has otherwise provided evidence in form and substance satisfactory to Agent
that such Defaulting Lender will be able to fund its Pro Rata Share (as in effect immediately prior
to its being a Defaulting Lender) in accordance with the terms hereof. Upon the cure by Defaulting
Lender of the event that is the basis for it to be a Defaulting Lender by making such payment or
payments and such Lender otherwise being in compliance with the terms hereof, such Lender shall
cease to be a Defaulting Lender and shall only be entitled to payment of interest accrued during
the period that such Lender was a Defaulting Lender to the extent previously received and retained
by Agent from or for the account of Borrowers on the funds constituting Loans funded by such Lender
prior to the date of it being a Defaulting Lender (and not previously paid to such Lender) and
shall otherwise, on and after such cure, make Revolving Loans and settle in respect of the
Revolving Loans and other Obligations in accordance with the terms hereof. The existence of a
Defaulting Lender and the operation of this Section shall not be construed to increase or otherwise
affect the Commitment of any Lender, or relieve or excuse the performance by any Borrower or
Guarantor of its duties and obligations hereunder (including, but not limited to, the obligation of
such Borrower or Guarantor to make any payments hereunder, whether in respect of Revolving Loans by
a Defaulting Lender or otherwise).



(h) Notwithstanding anything to the contrary contained in this Agreement, in the event that
there is a Defaulting Lender, if there are any Letters of Credit outstanding, within one (1)
Business Day after the written request of Issuing Bank, Borrowers shall pay to Agent an amount
equal to the Pro Rata Share of the Defaulting Lender (calculated as in effect immediately prior to
such Lender becoming a Defaulting Lender) of the Letter of Credit Obligations then outstanding to
be held by Agent on terms and conditions reasonably satisfactory to Agent and Issuing Bank as cash
collateral for the Obligations and for so long as there is a Defaulting Lender, Issuing Bank shall
not be required to issue any Letter of Credit, or increase or extend or otherwise amend any Letter
of Credit, unless upon the request of Issuing Bank, Agent has cash collateral from Borrowers in an
amount equal to the Pro Rata Share of the Defaulting Lender (calculated as in effect immediately
prior to such Lender becoming a Defaulting Lender) of the Letter of Credit Obligations outstanding
after giving effect to any such requested Letter of Credit (or increase, extension or other
amendment) to be held by Agent on its behalf on terms and conditions reasonably satisfactory to
Agent and Issuing Bank or there are other arrangements reasonably satisfactory to Issuing Bank with
respect to the participation in Letters of Credit by such Defaulting Lender. Such cash collateral
shall be applied first to the Letter of Credit Obligations before application to any other
Obligations, notwithstanding anything to the contrary contained in Section 6.7 hereof



(i) Nothing in this Section or elsewhere in this Agreement or the other Loan Documents shall
be deemed to require 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 to commence any legal action against a Lender as a result of any default by such Lender
hereunder in fulfilling its Commitment.



6.14 Obligations Several; Independent Nature of Lenders’ Rights.



The obligation of each Lender hereunder is several, and no Lender shall be responsible for the
obligation or commitment of any other Lender 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 14.4 hereof, 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.



6.15 Bank Products.



Borrowers and Guarantors, or any of their Subsidiaries, may (but no such Person is required
to) request that the Bank Product Providers provide or arrange for such Person to obtain Bank
Products from Bank Product Providers, and each Bank Product Provider may, in its sole discretion,
provide or arrange for such Person to obtain the requested Bank Products. Borrowers and Guarantors
or any of their Subsidiaries that obtains Bank Products shall indemnify and hold Agent, each Lender
and their respective Affiliates harmless from any and all obligations now or hereafter owing to any
other Person by any Bank Product Provider in connection with any Bank Products other than for gross
negligence or willful misconduct on the part of any such indemnified Person. This Section 6.15
shall survive the payment of the Obligations and the termination of this Agreement. Borrower and
its Subsidiaries acknowledge and agree that the obtaining of Bank Products from Bank Product
Providers (a) is in the sole discretion of such Bank Product Provider, and (b) is subject to all
rules and regulations of such Bank Product Provider. Each Bank Product Provider shall be deemed a
party hereto for purposes of any reference in a Loan Document to the parties for whom Agent is
acting; provided, that, the rights of such Bank Product Provider hereunder and
under any of the other Loan Documents shall consist exclusively of such Bank Product Provider’s
right to share in payments and collections out of the Collateral as set forth herein. In
connection with any such distribution of payments and collections, Agent shall be entitled to
assume that no amounts are due to any Bank Product Provider unless such Bank Product Provider has
notified Agent in writing of any such liability owed to it as of the date of any such
distribution..



	 	 	 	 	 
	SECTION 7.	 	COLLATERAL REPORTING AND COVENANTS
	 	7.1	 	 	Collateral Reporting.

	 	 	 	 	 







(a) Borrowers shall provide Agent with the following documents in a form satisfactory to
Agent:



(i) as soon as possible after the end of each calendar week (but in any event within three (3)
Business Days after the end thereof), a report, substantially in the form of Exhibit F hereto (or
in such other form as Agent may from time to time reasonably request), as to Borrowers’ Qualified
Cash and Liquidity;



(ii) as soon as possible after the end of each calendar month (but in any event within ten
(10) Business Days after the end thereof), or weekly (but in any event within three (3) Business
Days after the end thereof) at any time Excess Availability shall be less than the amount equal to
thirty (30%) percent of the Maximum Credit (or more frequently as Agent may request), a Borrowing
Base Certificate setting forth the calculation of the Borrowing Base as of the last Business Day of
the immediately preceding period, duly completed and executed by the chief financial officer, vice
president of finance, treasurer or controller of Administrative Borrower, together with all
schedules required pursuant to the terms of the Borrowing Base Certificate duly completed;



(iii) as soon as possible after the end of each calendar month (but in any event within ten
(10) Business Days after the end thereof), on a monthly basis or more frequently as Agent may
request, (A) perpetual inventory reports (and including the amounts of Inventory and the value
thereof at any leased locations and at premises of warehouses, processors or other third parties),
(B) reconciliation of inventory as set forth in the perpetual inventory reports and general ledger
of Borrowers, (C) agings of accounts receivable (together with a reconciliation to the previous
period’s aging and the general ledger), (D) Inventory by location, (E) agings of outstanding
accounts payable, and (F) to the extent not reported during the month just ended, a report of any
new deposit account established or used by any Borrower or Guarantor with any bank or other
financial institution, including in each case, the Borrower or Guarantor in whose name the account
is maintained, the account number, the name and address of the financial institution at which such
account is maintained, the purpose of such account and, if any, the amount held in such account on
or about the date of such report, and



(iv) such other reports as to the Collateral and Indebtedness permitted under Section 10.3
hereof as Agent shall reasonably request from time to time.



(b) Nothing contained in any Borrowing Base Certificate shall be deemed to limit, impair or
otherwise affect the rights of Agent contained herein and in the event of any conflict or
inconsistency between the calculation of the Borrowing Base as set forth in any Borrowing Base
Certificate and as determined by Agent in good faith, the determination of Agent shall govern and,
absent manifest error, be conclusive and binding upon Borrowers and Guarantors. Without limiting
the foregoing, Borrowers shall furnish to Agent any information which Agent may reasonably request
regarding the determination and calculation of any of the amounts set forth in any Borrowing Base
Certificate. Subject to the limitations set forth herein, the Borrowing Base may be adjusted based
on the information received by Agent pursuant to this Agreement. If any Borrower’s or Guarantor’s
records or reports of the Collateral are prepared or maintained by an accounting service,
contractor, shipper or other agent, such Borrower and Guarantor hereby irrevocably authorizes such
service, contractor, shipper or agent to deliver such records, reports, and related documents to
Agent and to follow Agent’s reasonable instructions with respect to further services.



(c) All of the documents, reports and schedules provided by or on behalf of any Borrower or
Guarantor to Agent hereunder for Receivables payable in any currency other than US Dollars and
Inventory located outside the United States of America shall set forth the US Dollar Equivalent for
the amount of the Receivables included in any such documents, reports or schedules. For purposes
hereof, Agent may, at its option, provide to Administrative Borrower, at least five (5) Business
Days prior to the date any such documents, reports or schedules are required to be provided by
Borrowers or Guarantors to Agent hereunder, the exchange rates required to set forth the US Dollar
Equivalent in such documents, reports and schedules and in the event Agent does not do so,
Borrowers shall use such rates of exchange with respect to the applicable currencies as Borrowers
and Guarantors use for such purpose in the ordinary course of business consistent with current
practices as of the date hereof and shall identify such rates of exchange in any such documents,
reports and schedules.



7.2 Accounts Covenants.



(a) Administrative Borrower shall notify Agent promptly of (i) the assertion of any claims,
offsets, defenses or counterclaims threatened in writing by any account debtor, or any disputes
with any account debtor of which the Chief Financial Officer (or any other officer of any Borrower
responsible for financial matters and or collection of Accounts) or any one in the legal department
of any Borrower has notice or any settlement, adjustment or compromise thereof, to the extent any
of the foregoing exceeds $500,000 in any one case or $1,000,000 in the aggregate, and (ii) all
material adverse information of which the Chief Financial Officer (or any other officer of any
Borrower responsible for financial matters and or collection of Accounts) or any one in the legal
department of any Borrower has notice relating to the financial condition of any account debtor.
No credit, discount, allowance or extension or agreement shall be granted to any account debtor
except in the ordinary course of a Borrower’s business in accordance with the current practices of
such Borrower as in effect on the date hereof. At any time that an Event of Default exists or has
occurred and is continuing, 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) With respect to each Account: (i) the amounts shown on any invoice delivered to Agent or
schedule thereof delivered to Agent shall be true and complete in all material respects, (ii) no
payments shall be made thereon except those sent to the Cash Management Accounts or Concentration
Accounts, (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 or as otherwise reported to Agent in
accordance with this Agreement, (iv) there shall be no setoffs, deductions, contras, defenses,
counterclaims or disputes existing or asserted with respect thereto other than as reported to Agent
in accordance with the terms of this Agreement, and (v) 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.



(c) Agent shall have the right at any time or times, in Agent’s name or in the name of a
nominee of Agent, to verify the validity, amount or any other matter relating to any Receivables or
other Collateral, by mail, telephone, facsimile transmission or otherwise.



7.3 Inventory Covenants.



With respect to the Inventory: (a) each Borrower and Guarantor shall at all times maintain
inventory records reasonably satisfactory to Agent, keeping correct and accurate records in all
material respects itemizing and describing the kind, type, quality and quantity of Inventory, such
Borrower’s or Guarantor’s cost therefor and daily withdrawals therefrom and additions thereto; (b)
Borrowers and Guarantors shall conduct a physical count of the Inventory either through periodic
cycle counts or wall to wall counts, so that all Inventory is subject to such counts at least once
each year, but at any time or times as Agent may request at any time a Default or an Event of
Default exists or has occurred and is continuing, and promptly following such physical inventory
(whether through periodic cycle counts or wall to wall counts) shall supply Agent at least once
each calendar quarter if any such counts are performed within such quarter, or otherwise once each
calendar year, with a report in the form and with such specificity as may be reasonably
satisfactory to Agent concerning such physical count; (c) Borrowers and Guarantors shall not remove
any Inventory from the locations set forth or permitted herein, without the prior written consent
of Agent, except for (i) shipment of raw materials to manufacturing facilities owned or controlled
by a Borrower, a Guarantor or one of their respective Subsidiaries; (ii) sales of Inventory in the
ordinary course of a Borrower’s business, (iii) to move Inventory directly from one location set
forth or permitted herein to another such location and (iv) Inventory shipped from the manufacturer
thereof to a Borrower which is in transit to the locations set forth or permitted herein; (d)
Borrowers shall, (i) at their expense, one (1) times in any twelve (12) month period (or two (2)
times, at Agent’s option, during any twelve month period in the event that Excess Availability
shall be less than the amount equal to thirty (30%) percent of the Maximum Credit), and (ii) at any
time at Borrowers’ expense as Agent may request if a Default or Event of Default shall exist or
have occurred and be continuing, deliver or cause to be delivered to Agent written appraisals as to
the Inventory in form, scope and methodology reasonably acceptable to Agent and by an appraiser
reasonably acceptable to Agent, addressed to Agent and Lenders and upon which Agent and Lenders are
expressly permitted to rely; (e) Borrowers and Guarantors 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) as between Agent and Lenders, on the one hand, and Borrowers and Guarantors, on the
other hand, each Borrower and Guarantor assumes all responsibility and liability arising from or
relating to the use, sale or other disposition of the Inventory (but nothing contained herein shall
be construed as the basis for any liability of any Borrower or Guarantor as to any third party);
(g) as of the date hereof, Borrowers and Guarantors do not sell Inventory to any customer on
approval, or any other basis which entitles the customer to return or may obligate any Borrower or
Guarantor to repurchase such Inventory except as has been previously reported to Agent in writing
prior to the date hereof, and Administrative Borrower shall give Agent prior written notice if such
practice changes together with such information with respect to the new policy as may reasonably be
requested by Agent; (h) Borrowers and Guarantors shall keep the Inventory in good and marketable
condition; and (i) Borrowers and Guarantors shall not acquire or accept any Inventory on
consignment or approval unless such Inventory has been specifically identified in a report with
respect thereto provided by Administrative Borrower to Agent pursuant to Section 7.1(a) hereof when
required to be included in such report or Agent has otherwise received prior written notice thereof
in form and substance reasonably satisfactory to Agent. .



7.4 Equipment and Real Property Covenants.



With respect to the Equipment and Real Property: (a) Borrowers and Guarantors shall keep the
Equipment in good order, repair, running and marketable condition (ordinary wear and tear
excepted); (b) Borrowers and Guarantors 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 in all material respects; (c) the Equipment is and shall be
used in the business of Borrowers and Guarantors and not for personal, family, household or farming
use; provided, that, certain motor vehicles used primarily by employees for
business purposes may from time to time be incidentally used for personal, family or household use,
as permitted by the internal policies of the applicable Borrower or Guarantor if any; and (d) as
between Agent and Lenders, on the one hand, and Borrowers and Guarantors, on the other hand, each
Borrower and Guarantor assumes all responsibility and liability arising from or relating to the
use, sale or other disposition of the Equipment or Real Property (but nothing contained herein
shall be construed as the basis for any liability of any Borrower or Guarantor as to any third
party)..



7.5 Power of Attorney.



Each Borrower and Guarantor hereby irrevocably designates and appoints Agent (and all persons
designated by Agent) as such Borrower’s and Guarantor’s true and lawful attorney-in-fact, and
authorizes Agent, in such Borrower’s, Guarantor’s or Agent’s name, to: (a) at any time an Event of
Default exists or has occurred and is continuing (i) demand payment on any Collateral, (ii) enforce
payment of any of the Collateral by legal proceedings or otherwise, (iii) exercise all of such
Borrower’s or Guarantor’s rights and remedies to collect any Collateral, (iv) sell or assign any
Collateral upon such terms, for such amount and at such time or times as the Agent deems advisable,
(v) settle, adjust, compromise, extend or renew any of the Collateral, (vi) discharge and release
any Collateral, (vii) prepare, file and sign such Borrower’s or Guarantor’s name on any proof of
claim in bankruptcy or other similar document against an account debtor or other obligor in respect
of any Collateral, (viii) notify the post office authorities to change the address for delivery of
remittances from account debtors or other obligors in respect of Collateral to an address
designated by Agent, and open and dispose of all mail addressed to such Borrower or Guarantor and
handle and store all mail relating to the Collateral, (ix) clear Inventory through U.S. Bureau of
Customs and Border Protection or foreign export control authorities in such Borrower’s or
Guarantor’s name, Agent’s name or the name of Agent’s designee, and to sign and deliver to customs
officials powers of attorney in such Borrower’s or Guarantor’s name for such purpose, and to
complete in such Borrower’s or Guarantor’s or Agent’s name, any order, sale or transaction, obtain
the necessary documents in connection therewith and collect the proceeds thereof, and to sign and
deliver to customs officials powers of attorney in such Borrower’s or Guarantor’s name for such
purpose, and to complete in such Borrower’s or Guarantor’s or Agent’s name, any necessary documents
in connection therewith and to endorse and negotiate any bill of lading or other document of title
with respect to such goods naming Borrower as consignee to Agent, and (x) do all acts and things
which are necessary, in Agent’s reasonable determination, to fulfill such Borrower’s or Guarantor’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 constituting Collateral or otherwise received in or
for deposit in the Concentration Accounts and (ii) have access to any lockbox or postal box into
which remittances from account debtors or other obligors in respect of Collateral are sent or
received, and (c) at any time to (i) take control of any item of payment constituting Collateral
that is received by Agent or any Lender, (ii) endorse such Borrower’s or Guarantor’s name upon any
items of payment in respect of Collateral received by Agent and any Lender and deposit the same in
Agent’s account for application to the Obligations, (iii) endorse such Borrower’s or Guarantor’s
name upon any chattel paper, document, instrument, invoice, or similar document or agreement
relating to any Receivable 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,
and (iv) sign such Borrower’s or Guarantor’s name on any verification of amounts owing constituting
Collateral and notices thereof to account debtors or any secondary obligors or other obligors in
respect thereof. Each Borrower and Guarantor hereby releases Agent and 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
as a result of 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..



7.6 Bills of Lading and Other Documents of Title.



(a) Promptly upon the Agent’s request, at any time that a Default or an Event of Default has
occurred or is continuing, Borrower shall cause all bills of lading or other documents of title
relating to goods purchased by Borrower which are outside the United States of America and in
transit to the premises of Borrower or the premises of a Freight Forwarder in the United States of
America (i) to be issued in a form so as to constitute negotiable documents as such term is defined
in the Uniform Commercial Code and (ii) other than those relating to goods being purchased pursuant
to a Letter of Credit, to be issued either to the order of Agent or such other person as the Agent
may from time to time designate for such purpose as consignee or Borrower as consignee, as Agent
may specify.



(b) There shall be no more than three (3) originals of any bills of lading and other documents
of title relating to goods being purchased by Borrower which are outside the United States of
America and in transit to the premises of Borrower or the premises of a Freight Forwarder in the
United States of America. At any time that a Default or an Event of Default has occurred or is
continuing, as to any such bills of lading or other documents of title, unless and until Agent
shall direct otherwise, (i) two (2) originals of each of such bill of lading or other document of
title shall be delivered to such Freight Forwarder as Borrower may specify and that is party to a
Collateral Access Agreement and (ii) one (1) original of each such bill of lading or other document
of title shall be delivered to Agent.



(c) To the extent that the terms of this Section 7.6 have not been satisfied as to any
Inventory, such Inventory shall not constitute Eligible Inventory or Eligible In-Transit Inventory,
except as Agent may otherwise agree, but the failure to satisfy such terms shall not constitute a
Default or Event of Default.



7.7 Right to Cure.



Agent may, at its option, upon prior notice to Administrative Borrower, (a) cure any default
by any Borrower or Guarantor under any material agreement with a third party that affects the
Collateral, its value or the ability of Agent to collect, sell or otherwise dispose of the
Collateral or the rights and remedies of Agent or any Lender therein or the ability of any Borrower
or Guarantor to perform its obligations hereunder or under any of the other Loan Documents, (b) pay
or bond on appeal any judgment entered against any Borrower or Guarantor, (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 Agent’s
judgment, is necessary or appropriate to preserve, protect, insure or maintain the Collateral and
the rights of Agent and Lenders with respect thereto. Agent may add any amounts so expended to the
Obligations and charge any Borrower’s account therefor or may demand immediate payment thereof.
Agent and 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 Borrower or
Guarantor. .



7.8 Access to Premises.



From time to time as reasonably requested by Agent, at the cost and expense of Borrowers, (a)
Agent or its designee shall have complete access to all of each Borrower’s and Guarantor’s premises
during normal business hours and after notice to Administrative Borrower, or at any time and
without notice to Administrative Borrower if an Event of Default exists or has occurred and is
continuing, for the purposes of inspecting, verifying and auditing the Collateral and all of each
Borrower’s and Guarantor’s books and records, including the Records, and (b) each Borrower and
Guarantor shall promptly furnish to Agent such copies of such books and records or extracts
therefrom as Agent may reasonably request, and Agent or any Lender or Agent’s designee may use
during normal business hours such of any Borrower’s and Guarantor’s personnel, equipment, supplies
and premises as may be reasonably necessary for the foregoing and if an Event of Default exists or
has occurred and is continuing for the collection of Receivables and realization of other
Collateral. Agent shall not conduct more than two (2) field examinations with respect to the
Collateral in any twelve (12) month period at the expense of Borrowers, except,
that, Agent may conduct (i) three (3) field examinations, at Borrowers’ expense, with
respect to Collateral in any twelve (12) month period in the event that Excess Availability shall
be less than the amount equal to thirty (30%) percent of the Maximum Credit and (ii) such other
field examinations at the expense of Agent and Lenders as Agent may reasonably request from time to
time and Agent may conduct such other field examinations at the expense of Borrowers as Agent may
reasonably require at Borrowers’ expense at any time a Default or Event of Default shall exist or
have occurred and be continuing..



SECTION 8. REPRESENTATIONS AND WARRANTIES



Each Borrower and Guarantor hereby represents and warrants to Agent, Lenders and Issuing Bank the
following:



8.1 Existence, Power and Authority.



Each Borrower and Guarantor is a corporation, limited liability company or limited partnership
duly organized and in good standing under the laws of its jurisdiction of organization and is duly
qualified as a foreign or extra-provincial corporation, limited liability company or limited
partnership, as applicable, 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, where the failure to so qualify, individually or in the aggregate, has or
could reasonably be expected to have a Material Adverse Effect. The execution, delivery and
performance of this Agreement, the other Loan Documents and the transactions contemplated hereunder
and thereunder (a) are all within each Borrower’s and Guarantor’s corporate, limited liability
company or limited partnership powers, as applicable, (b) have been duly authorized, (c) are not in
contravention of law or the terms of any Borrower’s or Guarantor’s certificate of incorporation,
certificate of formation, bylaws, operating agreement, limited partnership agreement or other
organizational documentation, or any indenture, material agreement or undertaking to which any
Borrower or Guarantor is a party or by which any Borrower or Guarantor 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, security interest, charge or other encumbrance upon any property of any
Borrower or Guarantor except as permitted hereunder. This Agreement and the other Loan Documents
to which any Borrower or Guarantor is a party constitute legal, valid and binding obligations of
such Borrower and Guarantor enforceable in accordance with their respective terms except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or law). .



8.2 Name; Jurisdiction of Organization; Chief Executive Office; Collateral
Locations.



(a) The exact legal name of each Borrower and Guarantor is as set forth on the signature page
of this Agreement and in the Information Certificate (or any otherwise communicated to the Agent in
accordance with Section 9.1(b) after the date hereof). No Borrower or Guarantor has, during the
five (5) years prior to 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 the Information Certificate.



(b) Each Borrower and Guarantor is an organization of the type and organized in the
jurisdiction set forth in the Information Certificate (or as otherwise noticed to the Agent in
accordance with Section 9.1(b) after the date hereof). The Information Certificate accurately sets
forth the organizational identification number of each Borrower and Guarantor or accurately states
that such Borrower or Guarantor has none and accurately sets forth the federal employer
identification number and business identification number of each Borrower and Guarantor.



(c) The chief executive office and mailing address of each Borrower and Guarantor and each
Borrower’s and Guarantor’s Records concerning Accounts are located only at the address identified
as such in Schedule 8.2 to the Information Certificate (or as otherwise noticed to the Agent in
accordance with Section 9.1(c) after the date hereof) and its only other places of business and the
only other locations of Collateral, if any, are the addresses set forth in Schedule 8.2 to the
Information Certificate, subject to the rights of any Borrower or Guarantor to establish new
locations in accordance with Section 9.2 below and other than Collateral in transit to any such
locations. The Information Certificate correctly identifies any of such locations that are not
owned by a Borrower or Guarantor and sets forth the owners and/or operators thereof.



8.3 Financial Statements; No Material Adverse Effect.



All financial statements relating to any Borrower or Guarantor which have been or may
hereafter be delivered by any Borrower or Guarantor to Agent and Lenders have been prepared in
accordance with GAAP (except as to any interim financial statements, to the extent such statements
are subject to normal year-end adjustments and do not include any notes) and fairly present in all
material respects the financial condition and the results of operation of such Borrower and
Guarantor as at the dates and for the periods set forth therein. There has been no act, condition
or event which has had or could reasonably be expected to have a Material Adverse Effect since the
date of the most recent audited financial statements of any Borrower or Guarantor furnished by any
Borrower or Guarantor to Agent prior to the date of this Agreement. The projections delivered to
Agent via electronic mail on August 11, 2009, for the fiscal years ending 2010 through and
including 2013 or any projections hereafter delivered to Agent have been prepared in good faith in
light of assumptions believed to be reasonable at the time (it being understood that actual results
may differ from those set forth in such projections).



8.4 Priority of Liens; Title to Properties.



The security interests and liens granted to Agent under this Agreement and the other Loan
Documents constitute valid and perfected first priority liens, hypothecs and security interests in
and upon the Collateral subject only to the liens indicated on Schedule 8.4 to the Information
Certificate and the other liens permitted under Section 10.2 hereof. Each Borrower and Guarantor
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
to no liens, mortgages, pledges, security interests, encumbrances or charges of any kind, except
those granted to Agent and such others as are specifically listed on Schedule 8.4 to the
Information Certificate or permitted under Section 10.2 hereof.



8.5 Tax Returns.



Each Borrower and Guarantor has filed, or caused to be filed, in a timely manner all material
tax returns, reports and declarations 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
Borrower and Guarantor has paid or caused to be paid all taxes due and payable by it, except taxes
the validity of which is being contested in good faith by appropriate proceedings diligently
pursued and available to such Borrower or Guarantor 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. No notices of tax liens or tax liens have been filed with
respect to any such taxes.



8.6 Litigation.



(a) There is no investigation by any Governmental Authority, or action, suit, proceedings or
claim by any Person, pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened
in writing, against or affecting any Borrower or Guarantor, its or their assets or business which
if adversely determined against such Borrower or Guarantor, individually or in the aggregate, has
or could reasonably be expected to have a Material Adverse Effect, except as set forth on
Schedule 8.6 to the Information Certificate, and (b) there is no action, suit, proceeding or claim
by any Person pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened in
writing, that involve this Agreement or any transactions contemplated by this Agreement. .



8.7 Compliance with Laws.



Borrowers and Guarantors are in compliance with the requirements of all applicable laws,
rules, regulations and orders of any Governmental Authority relating to their respective
businesses, in each case where the failure to comply, individually or in the aggregate has or could
reasonably be expected to have a Material Adverse Effect. Borrowers and Guarantors have obtained
all material permits, licenses, approvals, consents, certificates, orders or authorizations of any
Governmental Authority required for the lawful conduct of its business (the “Permits”). All of the
Permits are valid and subsisting and in full force and effect. There are no actions, claims or
proceedings pending or to the best of any Borrower’s or Guarantor’s knowledge, threatened in
writing that seek the revocation, cancellation, suspension or modification of any of the Permits
where, individually or in the aggregate, it has or could reasonably be expected to have a Material
Adverse Effect. Borrowers and Guarantors are not in default in any respect under, or in violation
in any respect of the terms of, any indentures, agreements or other instrument governing
Indebtedness binding on it or its property.



8.8 Environmental Compliance.



(a) Except as set forth in Schedule 8.8 to the Information Certificate, Borrowers, Guarantors
and any Subsidiary of any Borrower or Guarantor, have not generated, used, stored, treated,
transported, manufactured, handled, produced or disposed of any Hazardous Materials, on any
property owned, leased or operated by it or used by it in any manner which at any time violates in
any respect any applicable Environmental Law or Permit, and the operations of Borrowers, Guarantors
and any Subsidiary of any Borrower or Guarantor at such properties complies in all material
respects with all Environmental Laws and all Permits where such violation or failure to comply,
individually or in the aggregate, has or could reasonably be expected to have a Material Adverse
Effect.



(b) Except as set forth in Schedule 8.8 to the Information Certificate, no Borrower or
Guarantor has received any notice of or otherwise has any information that there has been any
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 investigation
pending or to the best of any Borrower’s or Guarantor’s knowledge threatened in writing, with
respect to any non-compliance with or violation of the requirements of any Environmental Law by any
Borrower or Guarantor and any of its Subsidiaries 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 with regard to any properties or assets owned, leased or
operated by it or used by Borrowers, Guarantors or their Subsidiaries or their businesses, which,
individually or in the aggregate, has or could reasonably be expected to have a Material Adverse
Effect.



(c) Except as set forth in Schedule 8.8 to the Information Certificate, Borrowers, Guarantors
and their Subsidiaries have no 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 under or from any property owned, leased or operated by it or used by it or
otherwise in connection with their businesses, which liabilities, individually or in the aggregate,
have or could reasonably be expected to have a Material Adverse Effect.



8.9 Employee Benefits.



(a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or State law. 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 best of any Borrower’s or Guarantor’s knowledge, nothing has occurred which
would cause the loss of such qualification where such loss, when combined with other such
occurrences or failures to comply, has or could reasonably be expected to have a Material Adverse
Effect. 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) Except as set forth in the Information Certificate, there are no pending, or to the best
of any Borrower’s or Guarantor’s knowledge, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan which, individually or in the aggregate have
or could reasonably be expected to have a Material Adverse Effect. Except as set forth in the
Information Certificate, there has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan.



(c) (i) Except as set forth in the Information Certificate, no ERISA Event has occurred or is
reasonably expected to occur; (ii) 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 the aggregate current value of the assets of such Pension Plan; (iii) each
Borrower and Guarantor, 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 Borrower and Guarantor, 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
Borrower and Guarantor, and their ERISA Affiliates, have not engaged in a transaction that would be
subject to Section 4069 or 4212(c) of ERISA.



8.10 Bank Accounts.



All of the deposit accounts, Investment Accounts or other accounts in the name of or used by
any Borrower or Guarantor maintained at any bank or other financial institution are set forth on
Schedule 8.10 to the Information Certificate, subject to the right of each Borrower and Guarantor
to establish new accounts in accordance with Section 5.2(d) hereof.



8.11 Intellectual Property.



Each Borrower and Guarantor owns or licenses or otherwise has the right to use all
Intellectual Property necessary for the operation of its business. As of the date hereof,
Borrowers and Guarantors do not have any material 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, other than those
described in Schedule 8.11 to the Information Certificate and has not granted any licenses with
respect thereto other than as set forth in Schedule 8.11 to the Information Certificate. 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 best of any Borrower’s and Guarantor’s knowledge,
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 Borrower or Guarantor infringes any patent, trademark, servicemark, tradename,
copyright, license or other Intellectual Property owned by any other Person presently where such
infringement has or could reasonably be expected to have Material Adverse Effect or adversely
affect the ability of any Borrower to sell or otherwise dispose of Inventory having a value in
excess of $1,000,000. No claim or litigation is pending or threatened in writing against or
affecting any Borrower or Guarantor contesting its right to sell or use any such Intellectual
Property where such claim or litigation if adversely determined for any Borrower or Guarantor would
reasonably be expected to have a Material Adverse Effect or would adversely affect the ability of
any Borrower to sell or otherwise dispose of Inventory having a value in excess of $1,000,000.
Schedule 8.11 to the Information Certificate sets forth all of the material agreements or other
arrangements of each Borrower and Guarantor pursuant to which such Borrower or Guarantor 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 date hereof and the dates of the expiration of
such agreements or other arrangements of such Borrower or Guarantor as in effect on the date hereof
which is necessary or of material value to such Borrower’s or Guarantor’s business (collectively,
together with such agreements or other arrangements as may be entered into by any Borrower or
Guarantor after the date hereof, collectively, the “License Agreements” and individually, a
“License Agreement”). No material trademark, servicemark, copyright or other material Intellectual
Property at any time used by any Borrower or Guarantor which is owned by another person, or owned
by such Borrower or Guarantor subject to any security interest, lien, collateral assignment, pledge
or other encumbrance in favor of any person other than Agent, is affixed to or incorporated in any
Eligible Inventory, except (a) to the extent permitted under the term of the license agreements
listed on Schedule 8.11 to the Information Certificate and (b) to the extent the sale of Inventory
to which such Intellectual Property is affixed or incorporated is permitted to be sold by such
Borrower or Guarantor under applicable law (including the United States Copyright Act of 1976). As
of the date hereof, Borrowers and Guarantors have no Material License Agreements.



8.12 Subsidiaries; Affiliates; Capitalization; Solvency.



(a) Each Borrower and Guarantor does not have any direct or indirect Subsidiaries or
Affiliates and is not engaged in any joint venture or partnership as of the date hereof except as
set forth in Schedule 8.12 to the Information Certificate, subject to the Borrower’s and Guarantors
rights to make Permitted Investments and Permitted Acquisitions under Section 10.4.



(b) As of the date hereof, each Borrower and Guarantor is the record and beneficial owner of
all of the issued and outstanding shares of Equity Interests of each of the Subsidiaries listed on
Schedule 8.12 to the Information Certificate as being owned by such Borrower or Guarantor and there
are no proxies, irrevocable or otherwise, with respect to such shares and no equity securities of
any of the Subsidiaries are or may become 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 Subsidiary is or may become bound to issue
additional shares of its Equity Interests or securities convertible into or exchangeable for such
shares.



(c) The issued and outstanding shares of Equity Interests of each Borrower and Guarantor are
directly and beneficially owned and held by the persons indicated in the Information Certificate,
and in each case all of such shares have been duly authorized and are fully paid and
non-assessable, free and clear of all claims, liens, pledges and encumbrances of any kind, except
as disclosed in writing to Agent prior to the date hereof or otherwise permitted hereunder.



(d) The Inactive Subsidiaries do not have any material liabilities, are not engaged in any
business or commercial activities, do not own any assets with a book value of more than $100,000 in
the aggregate and are not obligated or liable, directly or indirectly, contingently or otherwise,
in respect of any material Indebtedness or other material obligations.



(e) Each Borrower and Guarantor is Solvent and will continue to be Solvent after the creation
of the Obligations, the security interests of Agent and the other transaction contemplated
hereunder.



8.13 Labor Disputes.



(a) Set forth on Schedule 8.13 to the Information Certificate is a list (including dates of
termination) of all collective bargaining or similar agreements between or applicable to each
Borrower and Guarantor and any union, labor organization or other bargaining agent in respect of
the employees of any Borrower or Guarantor on the date hereof.



(b) Except as set forth on Schedule 8.13 to the Information Certificate, there is (i) no
significant unfair labor practice complaint pending against any Borrower or Guarantor or, to the
best of any Borrower’s or Guarantor’s knowledge, threatened in writing 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 date hereof against
any Borrower or Guarantor or, to best of any Borrower’s or Guarantor’s knowledge, threatened
against it, and (ii) no significant strike, labor dispute, slowdown or stoppage is pending against
any Borrower or Guarantor or, to the best of any Borrower’s or Guarantor’s knowledge, threatened
against any Borrower or Guarantor.



8.14 Restrictions on Subsidiaries.



Except for restrictions contained in this Agreement or any other agreement with respect to
Indebtedness of any Borrower or Guarantor permitted hereunder as in effect on the date hereof,
there are no contractual or consensual restrictions on any Borrower or Guarantor or any of its
Subsidiaries (including Foreign Subsidiaries) which prohibit or otherwise restrict (a) the transfer
of cash or other assets (i) between any Borrower or Guarantor and any of its or their Subsidiaries
or (ii) between any Subsidiaries of any Borrower or Guarantor or (b) the ability of any Borrower
or Guarantor or any of its or their Subsidiaries to incur Indebtedness or grant security interests
to Agent or any Lender in the Collateral. .



8.15 Material Contracts.



Schedule 8.15 to the Information Certificate sets forth all Material Contracts to which any
Borrower or Guarantor is a party or is bound as of the date hereof. Borrowers and Guarantors have
delivered true, correct and complete copies of such Material Contracts to Agent on or before the
date hereof. Borrowers and Guarantors are not in breach or in default in any material respect of
or under any Material Contract and have not received any notice of the intention of any other party
thereto to terminate any Material Contract.



8.16 Payable Practices.



Each Borrower and Guarantor has not made any material change in its customary accounts payable
practices from those in effect immediately prior to the date hereof.



8.17 OFAC.



None of Borrower, any Subsidiary of Borrower or any Affiliate of Borrower: (a) is a Sanctioned
Person, (b) has more than ten (10%) percent of its assets in Sanctioned Entities, or (c) derives
more than ten (10%) percent of its operating income from investments in, or transactions with
Sanctioned Persons or Sanctioned Entities. The proceeds of any Revolving 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..



8.18 Classification as “Senior Indebtedness”.



The Obligations constitute “Senior Indebtedness,” “Senior Debt” and “Designated Senior
Indebtedness” (or any comparable term) under and as defined in any agreement governing any
outstanding Subordinated Debt (including without limitation the Convertible Subordinated Note
Agreements) and the subordination provisions set forth in each such agreement are legally valid and
enforceable against the parties thereto.



8.19 Accuracy and Completeness of Information.



All information furnished by or on behalf of any Borrower or Guarantor in writing to Agent or
any Lender in connection with this Agreement or any of the other Loan Documents or any transaction
contemplated hereby or thereby, including all information on the Information Certificate is true
and correct in all material respects 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 Agent in writing prior to the
date hereof.



8.20 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 Agent, Lenders and Issuing Bank on the date of the request for any Revolving
Loan or any issuance, amendment, renewal or extension of a Letter of Credit and on the date of each
additional Revolving Loan or such issuance, amendment, renewal or extension, 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 accurate on and as of such earlier
date) and shall be conclusively presumed to have been relied on by Agent and Lenders regardless of
any investigation made or information possessed by 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 Borrower or Guarantor shall now or hereafter give, or cause to be given, to
Agent or any Lender.



	 	 	 	 	 
	SECTION 9.	 	AFFIRMATIVE COVENANTS
	 	9.1	 	 	Maintenance of Existence.

	 	 	 	 	 







(a) Each Borrower and Guarantor shall, at all times preserve, renew and keep in full force and
effect its corporate or limited liability company existence and rights and franchises with respect
thereto and maintain in full force and effect all licenses, trademarks, tradenames, approvals,
authorizations, leases, contracts and Permits necessary to carry on the business as presently or
proposed to be conducted, except as (i) otherwise permitted pursuant to Section 10.1 hereof, or
(ii) where the failure to do so, individually or in the aggregate, has or could reasonably be
expected to have a Material Adverse Effect.



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



(c) No Borrower or Guarantor shall change its chief executive office or its mailing address or
organizational identification number (or if it does not have one, shall not acquire one) unless
Agent shall have received not less than thirty (30) days’ prior written notice from Administrative
Borrower of such proposed change, which notice shall set forth such information with respect
thereto as Agent may reasonably require and Agent shall have received such agreements as Agent may
reasonably require in connection therewith. No Borrower or Guarantor shall change its type of
organization, jurisdiction of organization or other legal structure; except, that,
a Borrower, Guarantor or Subsidiary may convert (either directly or by way of merger) into a
limited liability company or limited partnership or other form of legal entity reasonably
acceptable to Agent; provided, that, each of the following conditions is satisfied:
(i) such company, partnership or other legal entity is organized under the laws of a jurisdiction
in the United States of America or Canada, (ii) Agent shall have received not less than fifteen
(15) days’ prior written notice from Administrative Borrower of such proposed change, which notice
shall accurately set forth a description of the new form, (iii) Agent shall have received the
organizational documents of such entity (certified by the appropriate Governmental Authority, where
available to be so certified), together with such other agreements, documents, and instruments
related thereto as Agent may reasonably request, (iv) such change shall not adversely affect the
security interests and liens of Agent in the assets of such Borrower or Guarantor or the ability of
Agent to enforce any of its rights or remedies with respect to such Borrower or Guarantor, in the
determination of Agent and (v) as of the date of such conversion, and after giving effect thereto,
no Default or Event of Default shall exist or have occurred and be continuing.



9.2 New Collateral Locations.



Each Borrower and Guarantor may only open any new location so long as (a) the Administrative
Borrower gives Agent written notice thereof not later than thirty (30) days after such location is
opened, which notice may be given by listing such location in the borrowing base report required
under Section 7.1(a)(ii), and (b) upon Agent’s request, such Borrower or Guarantor executes and
delivers, or causes to be executed and delivered, to Agent such agreements, documents, and
instruments as Agent may deem reasonably necessary or desirable to protect its interests in the
Collateral at such location; provided, that, so long as no Event of Default exists
or has occurred and is continuing, upon Agent’s request, Borrowers and Guarantors shall only be
required to use their commercially reasonable efforts to obtain a Collateral Access Agreement and
to the extent that Agent has not received a Collateral Access Agreement acceptable to it for any
such location, it may establish a Reserve as provided herein..



9.3 Compliance with Laws, Regulations, Etc.



(a) Each Borrower and Guarantor shall, and shall cause any Subsidiary to, at all times, comply
in all respects with all laws, rules, regulations, licenses, approvals, orders and other Permits
applicable to it and duly observe all requirements of any foreign, Federal, State or local
Governmental Authority where the failure to do so has or could reasonably be expected to have a
Material Adverse Effect.



(b) Borrowers and Guarantors shall give written notice to Agent immediately upon any
Borrower’s or Guarantor’s receipt of any notice of, or any Borrower’s or Guarantor’s otherwise
obtaining knowledge of, (i) the occurrence of any event involving the release, spill or discharge,
threatened or actual, of a material amount of any Hazardous Material that has or could reasonably
be expected to have a Material Adverse Effect or (ii) any investigation, proceeding, complaint,
order, directive, claims, citation or notice that with respect to any of the following that has or
could reasonably be expected to have a Material Adverse Effect: (A) any non-compliance with or
violation of any Environmental Law by any Borrower or Guarantor or (B) the release, spill or
discharge of any Hazardous Material other than in the ordinary course of business and other than as
permitted under any applicable Environmental Law. Copies of all environmental surveys, audits,
assessments, feasibility studies and results of remedial investigations shall be promptly
furnished, or caused to be furnished, by such Borrower or Guarantor to Agent upon Agent’s request.
Each Borrower and Guarantor shall take prompt action to respond to any material non-compliance with
any of the Environmental Laws and shall regularly report to Agent on such response.



(c) Without limiting the generality of the foregoing, whenever Agent reasonably determines
that there is material non-compliance, or any condition which requires any action by or on behalf
of any Borrower or Guarantor in order to avoid any material non-compliance, with any Environmental
Law, Borrowers shall, at Agent’s request and Borrowers’ expense: (i) cause an independent
environmental engineer reasonably acceptable to Agent to conduct such tests of the site where
non-compliance or alleged non-compliance with such Environmental Laws has occurred as to such
non-compliance and prepare and deliver to Agent a report as to such non-compliance setting forth
the results of such tests, a proposed plan for responding to any environmental problems described
therein, and an estimate of the costs thereof and (ii) provide to Agent a supplemental report of
such engineer whenever the scope of such non-compliance, or such Borrower’s or Guarantor’s response
thereto or the estimated costs thereof, shall change in any material respect.



(d) Each Borrower and Guarantor shall indemnify and hold harmless 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 and documented attorneys’ fees and expenses) directly or indirectly arising
out of or 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 Borrower or Guarantor 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.



9.4 Payment of Taxes and Claims.



Each Borrower and Guarantor shall, and shall cause any Subsidiary to, duly pay and discharge
all taxes, assessments, contributions and governmental charges upon or against it or its properties
or assets, except for taxes the validity of which is being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower, Guarantor or Subsidiary, 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.



9.5 Insurance.



Each Borrower and Guarantor shall, and shall cause any Subsidiary to, at all times, maintain
with financially sound and reputable insurers insurance with respect to the Collateral against loss
or damage and all other insurance of the kinds and in the amounts customarily insured against or
carried by corporations of established reputation engaged in the same or similar businesses and
similarly situated. Said policies of insurance shall be reasonably satisfactory to Agent as to
form, amount and insurer (provided, that, Borrowers and Guarantors may maintain
self insurance plans to the extent companies of the same or similar businesses and similarly
situated do so). Borrowers and Guarantors shall furnish certificates, policies or endorsements to
Agent as Agent shall reasonably require as proof of Borrower’s property, business interruption and
general liability insurance, and, Agent is authorized, but not required, to obtain such insurance
at the expense of Borrowers if any Borrower or Guarantor fails at any time to do so. All such
policies shall provide for at least thirty (30) days prior written notice to Agent of any
cancellation or reduction of coverage. Agent may act as attorney for each Borrower and Guarantor
in obtaining, and at any time that a Default or Event of Default has occurred and is continuing,
adjusting, settling, amending and canceling such insurance. Borrowers and Guarantors shall cause
Agent to be named as a loss payee as its interests may appear on its property insurance and as an
additional insured (but without any liability for any premiums) under its general liability
insurance policies and Borrowers and Guarantors shall obtain non-contributory lender’s loss payable
endorsements to all insurance policies in form and substance satisfactory to Agent. Such lender’s
loss payable endorsements shall specify that the proceeds of such insurance shall be payable to
Agent as its interests may appear and further specify that Agent and Lenders shall be paid
regardless of any act or omission by any Borrower, Guarantor or any of its or their Affiliates.
Without limiting any other rights of Agent or Lenders, any insurance proceeds received by Agent or
proceeds of condemnation awards payable at any time may be applied to payment of the Obligations
(without permanent reduction thereof), whether or not then due, in any order and in such manner as
Agent may determine. Upon application of such proceeds to the Revolving Loans, 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.



9.6 Financial Statements and Other Information.



(a) Each Borrower and Guarantor 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 Borrower, Guarantor and its Subsidiaries in
accordance with GAAP. Borrowers and Guarantors shall during regular business hours and upon
reasonable notice from the Agent furnish to Agent and upon Agent’s request, to Lenders, all such
financial and other information as Agent shall reasonably request relating to the Collateral and
the assets, business and operations of Borrowers and Guarantors, and Borrower shall notify the
auditors and accountants of Borrowers and Guarantors that Agent is authorized to obtain such
information directly from them (other than materials protected by the attorney-client privilege) at
any reasonable time. Without limiting the foregoing, Borrowers shall furnish or cause to be
furnished to Agent, and upon Agent’s request, to each Lender, the following:



(i) as soon as available, but in any event within twenty-five (25) days after the end of each
fiscal month that is not the end of a fiscal quarter of Parent, monthly unaudited consolidated
financial statements (including balance sheets, statements of income and loss and statement of cash
flow) and unaudited consolidating income statements and balance sheets, all in reasonable detail
(but without footnotes), fairly presenting in all material respects the financial position and the
results of the operations of Parent and its Subsidiaries as of the end of and through such fiscal
month, subject to normal year-end adjustments;



(ii) as soon as available, but in any event within forty-five (45) days after the end of each
fiscal quarter of each fiscal year of Parent, quarterly unaudited consolidated financial statements
(including balance sheets, statements of income and loss, statements of cash flow, and statements
of shareholders’ equity) and unaudited consolidating income statements and balance sheets, all in
reasonable detail, fairly presenting in all material respects the financial position and the
results of the operations of Parent and its Subsidiaries as of the end of and through such fiscal
quarter, subject to normal year-end adjustments; and



(iii) within ninety (90) days after the end of each fiscal year of Parent, audited
consolidated financial statements of Parent and its Subsidiaries (including balance sheets,
statements of income and loss, statements of cash flow and statements of shareholders’ equity), and
the accompanying notes thereto, and unaudited consolidating income statements and balance sheets,
all in reasonable detail, fairly presenting in all material respects the financial position and the
results of the operations of Parent and its Subsidiaries as of the end of and for such fiscal year.



(b) Parent shall notify Agent in writing promptly upon its legal department having actual
knowledge of the details of (i) any loss, damage, investigation, action, suit, proceeding or claim
relating to Collateral having a value of more than $1,000,000 or which if adversely determined
would result in a Material Adverse Effect, (ii) any Material Contract being terminated or amended
or any new Material Contract entered into (in which event Borrowers and Guarantors shall provide
Agent with a copy of such Material Contract), (iii) any order, judgment or decree in excess of
$1,000,000 shall have been entered against any Borrower or Guarantor any of its or their properties
or assets, (iv) any notification of a material violation of laws or regulations received by any
Borrower or Guarantor, (v) any ERISA Event, and (vi) the occurrence of any Default or Event of
Default.



(c) Borrowers and Guarantors shall furnish to Agent (i) not less than ten (10) Business Days’
prior written notice of (A) the intention of any Domestic Subsidiaries of Parent (other than
Inactive Subsidiaries) to merge or consolidate as permitted under Section 10.1(a) hereof, together
with such other information with respect thereto as Agent may reasonably request, (B) the issuance
and sale by any Borrower or Guarantor of Equity Interests, other than (x) the sale of
publicly-traded common stock of Parent, (y) any Equity Interests sold to another Borrower,
Guarantor or Subsidiary or (z) any Equity Interests issued, sold or otherwise transferred pursuant
to an employee stock option plan, 401k plan or similar employee benefit plan, and (C) the intention
of any Domestic Subsidiary of Parent (other than Inactive Subsidiaries) to wind up, liquidate or
dissolve as permitted under Section 10.1(c) hereof, together with such other information with
respect thereto as Agent may reasonably request, (ii) written notice of the winding up, liquidation
or dissolution of any Foreign Subsidiary of Parent no later than thirty (30) days after the
occurrence thereof, with such other information with respect thereto as Agent may reasonably
request; and (iii) all notices or demands in connection with such Indebtedness either received by
any Borrower or Guarantor or on its behalf promptly after the receipt thereof, or sent by any
Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be.



(d) Borrowers and Guarantors shall furnish to Agent, and upon Agent’s reasonable request, to
each Lender, in form and detail reasonably satisfactory to Agent:



(i) concurrently with the delivery of the financial statements referred to in
Section 9.6(a)(iii), the unqualified opinion of independent certified public accountants with
respect to the audited consolidated financial statements, which independent accounting firm shall
be selected by Administrative Borrower and reasonably acceptable to Agent (it being acknowledged
that the firm of Ernst & Young is acceptable to the Agent), that such audited consolidated
financial statements have been prepared in accordance with GAAP, and present fairly in all material
respects the results of operations and financial condition of Parent and its Subsidiaries as of the
end of and for the fiscal year then ended and stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default, or if any such Default or
Event of Default shall exist, stating the nature and status of such event;



(ii) concurrently with the delivery of the financial statements referred to in
Sections 9.6(a)(i), 9.6(a)(ii) and 9.6(a)(iii), delivery of (A) a management discussion and
analysis (in substantially the same format and with the same scope of information as provided to
Agent prior to the date hereof), provided, that, such management discussion and analysis shall not
be required with the delivery of monthly financial statements pursuant to this Section 9.6, and (B)
a compliance certificate substantially in the form of Exhibit E (“Compliance Certificate”) hereto
by the chief financial officer, vice president of finance, treasurer or controller of
Administrative Borrower on behalf of Borrowers and Guarantors, along with a schedule in form
reasonably satisfactory to Agent of the calculations used in determining, as of the end of such
applicable quarter, the ratio and amounts provided for in Section 11.1 of this Agreement for such
quarter (whether or not compliance is then required) and a written summary of material changes if
any, either in GAAP or in the consistent application thereof that materially affected the financial
covenant calculations for the applicable period;



(iii) at such time as available, but in any event prior to the last day of the first month of
each fiscal year of Parent, beginning with the fiscal year ending September 30, 2010, projected
consolidated and consolidating financial statements (including in each case substantially in the
same format and with the same scope of information as in the projections most recently provided to
Agent prior to the date hereof) of Parent and its Subsidiaries for the next fiscal year, all in
reasonable detail, and in a format consistent with the projections delivered by Borrowers to Agent
prior to the date hereof, together with such supporting information as Agent may reasonably
request, which projected financial statements shall be prepared on a monthly basis for the next
succeeding year and shall represent the reasonable best estimate by Borrowers and Guarantors of the
future financial performance of Parent and its Subsidiaries for the periods set forth therein and
shall have been prepared on the basis of the assumptions set forth therein which Borrowers and
Guarantors 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 statements);



(iv) promptly after the same are available, copies of each annual report, proxy or annual or
quarterly financial statement or other report or communication sent generally to the equity holders
of any Borrower or Guarantor, and copies of all annual, regular, periodic and special reports and
registration statements which a Borrower or Guarantor may file or be required to file with the
Securities and Exchange Commission under Section 13 or 15(d) of the Exchange Act, and not otherwise
required to be delivered to Agent pursuant hereto;



(v) concurrently with the delivery of the financial statements referred to in Sections
9.6(a)(ii), a certificate by the chief financial officer, vice president of finance, treasurer or
controller of Administrative Borrower on behalf of Borrowers and Guarantors containing information
regarding the amount of all sales or other dispositions of assets (whether voluntary or
involuntary), issuances or incurrence of Indebtedness or Equity Interests, Restricted Payments, and
optional prepayments of Indebtedness that occurred during the period covered by such financial
statements and such other information with respect thereto as Agent may request;



(vi) promptly after any request by Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or the audit committee
of the board of directors) of Parent by independent accountants in connection with the accounts or
books of Parent or any Subsidiary, or any audit of any of them;



(vii) promptly, and in any event within five (5) Business Days after receipt thereof by any
Borrower or Guarantor or any Subsidiary thereof, copies of each notice or other correspondence
received from the Securities and Exchange Commission (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by
such agency regarding financial or other operational results of Parent or any Subsidiary thereof;



(viii) concurrently with the delivery of the financial statements referred to in Section
9.6(a)(i) or (ii), a certificate by the chief executive officer, chief financial officer, vice
president of finance, treasurer or controller of Administrative Borrower on behalf of Borrowers and
Guarantors attaching evidence of insurance for any property, business interruption or general
liability insurance coverage of Borrowers, Guarantors or any Subsidiary that was renewed, replaced
or modified during the period covered by such financial statements.



(e) As to any information contained in materials furnished pursuant to Section 9.6(d)(iv),
Borrowers shall not be separately required to furnish such information under Section 9.6(a) hereof,
but the foregoing shall not be in derogation of the obligation of Borrowers to furnish the
information and materials described in Section 9.6(a) at the times specified therein.



(f) Documents required to be delivered pursuant to Section 9.6(a)(iii) or Section 9.6(d)(iv)
(to the extent any such documents are included in materials otherwise filed with the Securities and
Exchange Commission may be delivered electronically and if so delivered, shall be deemed to have
been delivered on the date on which such documents are posted on a Borrower’s behalf on an Internet
or intranet website, if any, to which each Lender and Agent has access (whether commercial,
third-party website or whether sponsored by Agent); provided that: (A) Borrowers
shall deliver paper copies of such documents to Agent or any Lender that requests Borrowers to
deliver such paper copies until a written request to cease delivering paper copies is given by
Agent or such Lender and (B) Borrowers shall notify Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents. Notwithstanding anything contained herein,
in every instance Borrowers shall be required to provide paper copies of the compliance
certificates required by Section 9.6(d)(ii) to Agent. Except for such compliance certificates,
Agent shall have no obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor compliance by Borrowers
with any such request for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.



(g) Borrowers and Guarantors hereby acknowledge that Agent and/or its Affiliates may make
available to Lenders and Issuing Bank materials and/or information provided by or on behalf of
Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks, Syndtrak, or another similar electronic system (the “Platform”) and certain of the
Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to Borrowers, Guarantors or their securities) (each, a “Public Lender”).
Borrowers and Guarantors shall be deemed to have authorized Agent and its Affiliates, and the
Lenders to treat Borrower Materials marked “PUBLIC” or otherwise at any time filed with the
Securities and Exchange Commission as not containing any material non-public information with
respect to Borrowers, Guarantors or their securities for purposes of United States federal and
state securities laws (provided, however, that to the extent such Borrower
Materials constitute Information, they shall be treated as set forth in Section 15.5). All
Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated as “Public Investor.” Agent and its Affiliates and Lenders shall be entitled
to treat any Borrower Materials that are not marked “PUBLIC” or that are not at any time filed with
the Securities and Exchange Commission as being suitable only for posting on a portion of the
Platform not marked as “Public Investor.”



(h) not less than ten (10) days prior to each proposed date of the making of a payment, or the
payment of a dividend or distribution, under Section 10.9(a) or 10.9(b) hereof, the chief financial
officer of Administrative Borrower shall deliver to Agent a certification that as of the date of
such certification, and as of the date of the proposed payment, dividend or distribution and after
giving effect thereto (i) no Default or Event of Default shall exist or have occurred and be
continuing and (ii) average Excess Availability shall have been not less than $25,000,000 for the
thirty (30) consecutive day period immediately prior to the date of the making of such payment, or
the payment of such dividend or distribution, and not less than $25,000,000 on the date of such
payment and after giving effect thereto; and



(i) Borrowers and Guarantors shall furnish or cause to be furnished to Agent such other
information respecting the Collateral and the business of Borrowers and Guarantors, as Agent may,
from time to time, reasonably request. Agent is hereby authorized to deliver a copy of any
financial statement or any other information relating to the business of Borrowers and Guarantors
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 subject to Section 15.5 hereof. Any
documents, schedules, invoices or other papers delivered to Agent or any Lender may be destroyed or
otherwise disposed of by Agent or such Lender one (1) year after the same are delivered to Agent or
such Lender, except as otherwise designated by Administrative Borrower to Agent or such Lender in
writing.



9.7 Compliance with ERISA. 



Each Borrower and Guarantor shall, and shall cause each of its ERISA Affiliates to: (i) maintain
each Plan in compliance with the applicable provisions of ERISA, the Code and other Federal and
State law; (ii) cause each Plan which is qualified under Section 401(a) of the Code to maintain
such qualification; (iii) not terminate any Pension Plan so as to incur any liability to the
Pension Benefit Guaranty Corporation; (iv) not allow or suffer to exist any prohibited transaction
involving any Plan or any trust created thereunder which would subject such Borrower, Guarantor or
such ERISA Affiliate to a tax or other liability on prohibited transactions imposed under
Section 4975 of the Code or ERISA; (v) 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;
(vi) not allow or suffer to exist any accumulated funding deficiency, whether or not waived, with
respect to any such Pension Plan; (vii) not engage in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA; or(viii) not allow or suffer to exist any occurrence of a
reportable event or any other event or condition which presents a risk of termination by the
Pension Benefit Guaranty Corporation of any Plan that is a single employer plan, which termination
could result in any liability to the Pension Benefit Guaranty Corporation.



9.8 End of Fiscal Years; Fiscal Quarters.



Each Borrower and Guarantor shall, for financial reporting purposes, cause its fiscal year,
and the fiscal year of each of their respective Domestic Subsidiaries (other than Inactive
Subsidiaries), to end on September 30th of each year, and fiscal quarters to end on the last day of
each of March, June, September and December of each year.



9.9 License Agreements.



(a) Each Borrower and Guarantor shall give Agent prompt written notice of (i) the execution of
any Material License Agreement after the date hereof, with such information with respect thereto as
Agent may in good faith request, (ii) its intention to not renew or to terminate, cancel, surrender
or release its rights under any such Material License Agreement, or any amendment of a Material
License Agreement that limits the scope of the right of such Borrower or Guarantor to use the
Intellectual Property subject to such License Agreement in any material respect, either with
respect to product, territory, term or otherwise, or that increases in any material respect the
amounts to be paid by such Borrower or Guarantor thereunder or in connection therewith (and Agent
may establish such Reserves as a result of any of the foregoing as Agent may determine in good
faith; and (iii) any material breach of any obligation, or any default, by the Borrower or
Guarantor that is the licensee or any other party under any Material License Agreement, and deliver
to Agent (promptly upon the receipt thereof by such Borrower or Guarantor in the case of a notice
to such Borrower or Guarantor and concurrently with the sending thereof in the case of a notice
from such Borrower or Guarantor) a copy of each notice of default and any other notice received or
delivered by such Borrower or Guarantor in connection with any Material License Agreement that
relates to the scope of the right, or the continuation of the right, of such Borrower or Guarantor
to use the Intellectual Property subject to such Material License Agreement or the amounts required
to be paid thereunder.



(b) With respect to a Material License Agreement applicable to Intellectual Property that is
owned by a third party and licensed to a Borrower or Guarantor and that is affixed to or otherwise
necessary for the manufacture, sale or distribution of Inventory or the collection of Receivables
(other than an off-the-shelf product with a shrink wrap license or that is generally available), at
any time an Event of Default shall exist or have occurred and be continuing, Agent shall have, and
is hereby granted, to the extent permitted by the terms of such Material License Agreement the
irrevocable right and authority, at its option, to renew or extend the term of such Material
License Agreement, whether in its own name and behalf, or in the name and behalf of a designee or
nominee of Agent or in the name and behalf of such Borrower or Guarantor, subject to and in
accordance with the terms of such Material License Agreement. Agent may, but shall not be required
to, perform any or all of such obligations of such Borrower or Guarantor under any of the Material
License Agreements, including, but not limited to, the payment of any or all sums due from such
Borrower or Guarantor thereunder. Any sums so paid by Agent shall constitute part of the
Obligations.



9.10 Additional Guaranties and Collateral Security; Further Assurances. 



(a) In the case of the formation or acquisition by a Borrower or Guarantor of any Domestic
Subsidiary after the date hereof, which Domestic Subsidiary owns Accounts and/or finished goods
Inventory having an aggregate dollar value in excess of $25,000,000, (i) the Administrative
Borrower shall cause any such Subsidiary to execute and deliver to Agent, in form and substance
satisfactory to Agent, a joinder agreement to the Loan Documents in order to make such Domestic
Subsidiary a party to this Agreement as a “Borrower” or “Guarantor” as the Administrative Borrower
may elect (provided, that, in the event the new Subsidiary was to have less than $25,000,000 of
such Accounts and Inventory, such Person could be joined as a “Borrower” or “Guarantor” at the
option of the Administrative Borrower), and a party to any guarantee as a “Guarantor” or pledge
agreement as a “Pledgor”, and including, but not limited to, supplements and amendments hereto and
to any of the other Loan Documents, authorization to file UCC financing statements, Collateral
Access Agreements (to the extent required under Section 9.2), other agreements, documents or
instruments contemplated under Section 5.2 hereof and other consents, waivers, acknowledgments and
other agreements from third persons which Agent may deem reasonably necessary or desirable in order
to permit, protect and perfect its security interests in and liens upon the assets of such Domestic
Subsidiary and the Equity Interests of any Borrower or Guarantor in such Domestic Subsidiary,
corporate resolutions and other organization and authorizing documents of such Person, and
favorable opinions of counsel to such person and (ii) the Borrower or Guarantor forming such
Domestic Subsidiary shall execute and deliver to Agent, a pledge and security agreement, in form
and substance reasonably satisfactory to Agent, granting to Agent a first pledge of and lien on all
of the issued and outstanding shares of Equity Interests of any such Domestic Subsidiary, and
otherwise comply with the terms of Section 5.2 hereof with respect thereto, such other agreements,
documents and instruments as Agent may reasonably require in connection with the documents referred
to above, including, but not limited to, supplements and amendments hereto, corporate resolutions
and other organization and authorizing documents and favorable opinions of counsel to such person.



(b) In the case of an acquisition of assets (other than Equity Interests) by a Borrower or
Guarantor after the date hereof, Agent shall have received, in form and substance reasonably
satisfactory to Agent, (i) evidence that Agent has valid and perfected security interests in and
liens upon all purchased assets to the extent such assets constitute Collateral hereunder (except
in the case of deposit accounts, within thirty (30) days after the acquisition thereof; (ii) except
as Agent may otherwise agree, all Collateral Access Agreements (to the extent required under
Section 9.2 hereof) and other consents, waivers, acknowledgments and other agreements from third
persons which Agent may deem necessary or desirable in order to permit, protect and perfect its
security interests in and liens upon the assets purchased, and (iii) such other agreements,
documents and instruments as Agent may require in connection with the documents referred to above,
including, but not limited to, supplements and amendments hereto.



(c) At the request of Agent at any time and from time to time, Borrowers and Guarantors shall,
at their 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 may
be reasonably necessary or proper to evidence, perfect, maintain and enforce the security interests
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. Agent may at any time and from time to time
request a certificate from an officer of any Borrower or Guarantor representing that all conditions
precedent to the making of Revolving Loans and providing Letters of Credit contained herein are
satisfied. In the event of such request by Agent, Agent and Lenders may, at Agent’s option, cease
to make any further Revolving Loans or provide any further Letters of Credit until Agent has
received such certificate and, in addition, Agent has determined that such conditions are
satisfied.



(d) Notwithstanding anything herein to the contrary, it is understood and acknowledged that in
no event will Accounts or Inventory acquired by any Borrower outside the ordinary course of
business constitute Eligible Accounts, Eligible Progress Billing Accounts or Eligible Inventory
until such time as the Agent has obtained a satisfactory appraisal of such Inventory, Agent, at its
option, has completed a field examination with respect to such Accounts and Inventory, and the
criteria for Eligible Accounts, Eligible Progress Billing Accounts and Eligible Inventory set forth
herein are satisfied with respect thereto.



9.11 Costs and Expenses.



Borrowers and Guarantors shall pay to Agent on demand all reasonable and documented costs,
expenses, filing fees and taxes paid or payable in connection with the preparation, negotiation,
execution, delivery, recording, syndication, administration, collection, liquidation, enforcement
and defense of the Obligations, Agent’s rights in the Collateral, 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, including: (a) all costs and expenses of filing or recording
(including UCC financing statements, filing taxes and fees, documentary taxes, intangibles taxes
and mortgage recording taxes and fees, if applicable), (b) costs and expenses and fees for
insurance premiums, environmental audits, title insurance premiums, surveys, assessments,
engineering reports and inspections, appraisal fees and search fees, background checks, costs and
expenses of remitting loan proceeds, collecting checks and other items of payment, and establishing
and maintaining the Concentration Accounts, together with Agent’s customary charges and fees with
respect thereto; (c) charges, fees or expenses charged by any Issuing Bank in connection with any
Letter of Credit; (d) costs and expenses of preserving and protecting the Collateral; (e) costs and
expenses paid or incurred in connection with obtaining payment of the Obligations, enforcing the
security interests and liens of Agent in the Collateral, 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 Agent or any Lender arising out of the
transactions contemplated hereby and thereby (including preparations for and consultations
concerning any such matters); (f) all out-of-pocket expenses and costs heretofore and from time to
time hereafter incurred by Agent during the course of periodic field examinations of the Collateral
and such Borrower’s or Guarantor’s operations, plus a per diem charge at Agent’s then standard rate
for Agent’s examiners in the field and office (which rate as of the date hereof is $1,000 per
person per day) subject to the limitations set forth in Section 7.8 hereof; (g) any VAT incurred by
Agent or any Lender; and (h) the reasonable fees and disbursements of counsel (including legal
assistants) to Agent in connection with any of the foregoing and in respect of the matters set
forth in clause (e), above, of one counsel to Agent as agent and a Lender, and one additional
counsel to the other Lenders, to the extent they may so require and as they may agree (and such
local counsel as the Agent and the Lenders may require)..



	 	 	 	 	 
	SECTION 10.	 	NEGATIVE COVENANTS
	 	10.1	 	 	Sale of Assets, Consolidation, Merger, Dissolution, Etc.

	 	 	 	 	 







Each Borrower and Guarantor shall not, and shall not permit any Domestic Subsidiary (other
than Inactive Subsidiaries) to, directly or indirectly,



(a) merge into or with or consolidate with any other Person or permit any other Person to
merge into or with or consolidate with it except (i) for any merger consummated in
connection with a Permitted Acquisition (so long as such Permitted Acquisition is with a Person
organized under the laws of the United States of America or any state thereof); (ii) so long as no
Default or Event of Default shall exist or shall occur as a result thereof, (A) ADC Holding Inc.
may be merged with and into International, and (B) Optical and International may each be merged
with and into Parent; (iii) that any wholly-owned Domestic Subsidiary of Parent (other than as
permitted in clause (ii) above) may merge with and into or consolidate with any Borrower, Guarantor
or other wholly-owned Subsidiary of Parent; provided, that, each of the following
conditions is satisfied as determined by Agent in good faith: (A) Agent shall have received not
less than ten (10) Business Days’ prior written notice of the intention of such Domestic
Subsidiaries to so merge or consolidate, which notice shall set forth in reasonable detail
satisfactory to Agent, the persons that are merging or consolidating and which person will be the
surviving entity, (B) Agent shall have received such other information with respect to such merger
or consolidation as Agent may reasonably request, (C) as of the effective date of the merger or
consolidation and after giving effect thereto, no Default or Event of Default shall exist, (D)
Administrative Borrower shall deliver to Agent, upon request, true, correct and complete copies of
all agreements, documents and instruments relating to such merger or consolidation, including, but
not limited to, the certificate or certificates of merger to be filed with each appropriate
Secretary of State or comparable governmental official, as applicable (with a copy as filed
promptly after such filing), (iv) no Borrower or Guarantor shall assume any Indebtedness,
obligations or liabilities as a result of such merger, or otherwise become liable in respect of any
obligations or liabilities of the entity that is being merged into such Borrower or Guarantor,
unless such Indebtedness is otherwise expressly permitted hereunder, and (v) if such merger or
consolidation is between a Borrower and a Person that is not a Borrower (or between a Guarantor and
a person who is not a Borrower or Guarantor), the Borrower (or the Guarantor) shall be the
surviving entity or the surviving entity shall expressly confirm, ratify and assume the Obligations
and the Loan Documents to which it is a party in writing, in form and substance reasonably
satisfactory to Agent, and Borrowers and Guarantors shall execute and deliver such other
agreements, documents and instruments as Agent may reasonably request in connection therewith;



(b) sell, issue, assign, lease, license, transfer, abandon or otherwise dispose of any Equity
Interests or Indebtedness to any other Person or any of its assets to any other Person, except for
Permitted Dispositions;



(c) wind up, liquidate or dissolve except that any Domestic Subsidiary of Parent (other than
the Borrowers) may wind up, liquidate and dissolve; provided, that, each of the
following conditions is satisfied, (i) the winding up, liquidation and dissolution of such Domestic
Subsidiary shall not violate any law or any order or decree of any court or other Governmental
Authority in any material respect and shall not conflict with or result in the breach of, or
constitute a default under, any indenture, mortgage, deed of trust, or any other agreement or
instrument to which any Borrower, Guarantor or Domestic Subsidiary is a party or may be bound, (ii)
such winding up, liquidation or dissolution shall be done in accordance with the requirements of
all applicable laws and regulations, (iii) effective upon such winding up, liquidation or
dissolution, all of the assets and properties of such Domestic Subsidiary shall be duly and validly
transferred and assigned to a Borrower or Guarantor, free and clear of any liens, restrictions or
encumbrances other than the security interest and liens of Agent (and Agent shall have received
such evidence thereof as Agent may reasonably require) and Agent shall have received such deeds,
assignments or other agreements as Agent may reasonably request to evidence and confirm the
transfer of such assets of such Domestic Subsidiary to a Borrower or Guarantor, (iv) Agent shall
have received all documents and agreements that any Person has filed with any Governmental
Authority or as are otherwise required to effectuate such winding up, liquidation or dissolution,
(v) no Borrower or Guarantor shall assume any Indebtedness, obligations or liabilities as a result
of such winding up, liquidation or dissolution, or otherwise become liable in respect of any
obligations or liabilities of the entity that is winding up, liquidating or dissolving, unless such
Indebtedness is otherwise expressly permitted hereunder, (vi) Agent shall have received not less
than ten (10) Business Days prior written notice of the intention of such Domestic Subsidiary to
wind up, liquidate or dissolve, and (vii) as of the date of such winding up, liquidation or
dissolution and after giving effect thereto, no Default or Event of Default shall exist or have
occurred; or



(d) agree to do any of the foregoing.



10.2 Encumbrances.



Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, create, incur,
assume or suffer to exist any security interest, mortgage, pledge, lien, charge or other
encumbrance 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 security interest or lien with respect to any such assets or properties,
except the following (collectively, “Permitted Liens”):



(a) the security interests and liens of Agent for itself and the benefit of Secured Parties
and the rights of setoff of Secured Parties provided for herein or under applicable law;



(b) liens securing the payment of taxes, assessments or other governmental charges or levies
either not yet overdue or the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower, or Guarantor or Subsidiary, as the
case may be and with respect to which adequate reserves have been set aside on its books;



(c) non-consensual statutory liens (other than liens securing the payment of taxes) arising in
the ordinary course of such Borrower’s, Guarantor’s or Subsidiary’s business to the extent: (i)
such liens secure Indebtedness which is not overdue or (ii) such liens secure Indebtedness relating
to claims or liabilities which are fully insured and being defended at the sole cost and expense
and at the sole risk of the insurer or being contested in good faith by appropriate proceedings
diligently pursued and available to such Borrower, Guarantor or such Subsidiary, in each case prior
to the commencement of foreclosure or other similar proceedings and with respect to which adequate
reserves have been set aside on its books;



(d) zoning restrictions, easements, licenses, covenants and other restrictions affecting the
use of Real Property which do not interfere in any material respect with the use of such Real
Property or ordinary conduct of the business of such Borrower, Guarantor or such Subsidiary as
presently conducted thereon or materially impair the value of the Real Property which may be
subject thereto;



(e) purchase money security interests in Equipment (including Capital Leases) and mortgages on
Real Property to secure Indebtedness permitted under Section 10.3(b) hereof (so long as at the
option of Agent if any Collateral is located on the premises of such Real Property, Agent shall
have received a Collateral Access Agreement from the mortgagee with respect to such Real Property);



(f) pledges and deposits of cash by any Borrower or Guarantor after the date hereof in the
ordinary course of business in connection with workers’ compensation, unemployment insurance and
other types of social security benefits consistent with the current practices of such Borrower or
Guarantor as of the date hereof;



(g) pledges and deposits of cash by any Borrower or Guarantor after the date hereof to secure
the performance of tenders, bids, leases, trade contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations in each case in the ordinary
course of business consistent with the current practices of such Borrower or Guarantor as of the
date hereof; provided, that, in connection with any performance bonds issued by a
surety or other person, the issuer of such bond shall have waived in writing any rights in or to,
or other interest in, any of the Collateral in an agreement, in form and substance reasonably
satisfactory to Agent;



(h) liens arising from (i) operating leases and the precautionary UCC financing statement
filings in respect thereof and (ii) equipment or other materials which are not owned by any
Borrower or Guarantor located on the premises of such Borrower or Guarantor (but not in connection
with, or as part of, the financing thereof) from time to time in the ordinary course of business
and consistent with current practices of such Borrower or Guarantor and the precautionary UCC
financing statement filings in respect thereof;



(i) judgments and other similar liens arising in connection with court proceedings that do not
constitute an Event of Default; 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) Agent may establish a Reserve with respect
thereto;



(j) security interests and other liens in property or assets of a Person existing at the time
such Person is acquired pursuant to a Permitted Acquisition after the date hereof in respect of
Indebtedness permitted under Section 10.3(l) hereof (and Liens in respect of Refinancing
Indebtedness with respect thereto permitted under Section 10.3(i) hereof); provided,
that, each of the following conditions is satisfied: (i) such Person is not upon or anytime
after such Permitted Acquisition, a Borrower or Guarantor, (ii) such security interests and other
liens were not granted and did not arise in connection with, or in anticipation or contemplation
of, such Permitted Acquisition, and are otherwise permitted hereunder, (iii) the property or assets
subject to such security interests and other Liens do not include any assets or properties of any
Person other than assets or properties of the Person so acquired, and (iv) such Person maintains
separate deposit accounts, and no proceeds of Accounts and Inventory of such Person are deposited
into the deposit accounts of any Borrower or Guarantor;



(k) subject to Borrowers’ and Guarantors’ compliance with the minimum liquidity covenant set
forth in Section 11.2, (i) cash collateral pledged to Wachovia or its Affiliates to secure letters
of credit and Hedge Agreements and (ii) cash collateral posted in an aggregate amount not to exceed
$35,000,000 to secure such Borrower’s, Guarantor’s or Subsidiary’s obligations with respect to
other letters of credit and Hedge Agreements permitted under Section 10.3(e) and (k) hereof;



(l) bankers’ Liens, rights of setoff and other similar liens existing solely with respect to
cash, Cash Equivalents, financial assets or investment property on deposit in one or more accounts
maintained by any Borrower or Guarantor, in each case, granted in the ordinary course of business
in favor of the bank or banks with which such accounts are maintained, securing amounts owing to
such bank or banks with respect to cash management, operating account and Investment Account
arrangements, provided, that, Deposit Account Control Agreements are obtained if
required in accordance with the terms of this Agreement;



(m) liens on assets of Foreign Subsidiaries to secure Indebtedness permitted under Section
10.3(k); and



(n) the security interests and liens set forth on Schedule 8.4 to the Information Certificate.



10.3 Indebtedness.



Each Borrower and Guarantor shall not, and shall not 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) (i) purchase money Indebtedness (including Capital Leases) arising after the date hereof
to the extent secured by purchase money security interests in Equipment (including Capital Leases)
not to exceed $5,000,000 in the aggregate at any time outstanding so long as such security
interests do not apply to any property of such Borrower, Guarantor or Subsidiary other than the
Equipment so acquired, and the Indebtedness secured thereby does not exceed the cost of the
Equipment so acquired and (ii) secured Indebtedness incurred based on the value of Real Property so
long as such Indebtedness is not secured by any other assets of such Borrower or Guarantor, and
does not exceed 85% of the value of such Real Property as set forth on the most recent appraisal
with respect to such Real Property prior to the incurrence of such Indebtedness;



(c) guarantees by any Borrower or Guarantor of the Obligations of the other Borrowers or
Guarantors in favor of Agent for the benefit of Lenders and the other Secured Parties;



(d) (i) the Indebtedness of any Borrower, Guarantor or Subsidiary to any other Borrower or
Guarantor arising after the date hereof pursuant to loans by any Borrower or Guarantor permitted
hereunder and (ii) Indebtedness of any Subsidiary (other than Borrowers or Guarantors) to any other
Subsidiary (which is not a Borrower or Guarantor);



(e) Indebtedness of any Borrower, Guarantor or Subsidiary entered into in the ordinary course
of business pursuant to a Hedge Agreement; provided, that, (i) such arrangements
are not for speculative purposes, and (ii) the notional amounts of all Hedge Agreements with
respect to which the counterparty is not Wachovia or an Affiliate of Wachovia or another Bank
Product Provider shall not exceed $75,000,000 at any time during the term of this Agreement (and
not more than $35,000,000 is secured by cash collateral);



(f) unsecured Indebtedness (other than the Indebtedness referred to in Section 10.3(g), (h),
(j), (k) and (l) below) of any Borrower or Guarantor arising after the date hereof to any third
person (but not to any other Borrower or Guarantor); provided, that, each of the
following conditions is satisfied as determined by Agent: (i) such Indebtedness shall be on terms
and conditions reasonably acceptable to Agent and shall be subject and subordinate in right of
payment to the right of Agent and Lenders to receive the prior indefeasible payment and
satisfaction in full payment of all of the Obligations pursuant to the terms of an intercreditor
agreement between Agent and such third party, in form and substance reasonably satisfactory to
Agent, (ii) Agent shall have received not less than ten (10) days prior written notice of the
intention of such Borrower or Guarantor to incur such Indebtedness, which notice shall set forth in
reasonable detail satisfactory to Agent the amount of such Indebtedness, the person or persons to
whom such Indebtedness will be owed, the interest rate, the schedule of repayments and maturity
date with respect thereto and such other information as Agent may reasonably request with respect
thereto, (iii) Agent shall have received true, correct and complete copies of all agreements,
documents and instruments evidencing or otherwise related to such Indebtedness, (iv) in no event
shall the aggregate principal amount of such Indebtedness incurred during the term of this
Agreement exceed $20,000,000, (v) as of the date of incurring such Indebtedness and after giving
effect thereto, no Default or Event of Default shall exist or have occurred, (vi) such Borrower and
Guarantor shall not, directly or indirectly, (A) amend, modify, alter or change any material terms
of such Indebtedness or any agreement, document or instrument related thereto; it being
acknowledged that such Borrower or Guarantor may, after prior written notice to Agent, amend,
modify, alter or change the terms thereof so as to extend the maturity thereof, or defer the timing
of any payments in respect thereof, or to forgive or cancel any portion of such Indebtedness (other
than pursuant to payments thereof), or to reduce the interest rate or any fees in connection
therewith, or (B) redeem, retire, defease, purchase or otherwise acquire such Indebtedness (except
pursuant to regularly scheduled payments permitted herein), or set aside or otherwise deposit or
invest any sums for such purpose, and (vii) Borrowers and Guarantors shall furnish to Agent all
notices or demands in connection with such Indebtedness either received by any Borrower or
Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor
or on its behalf concurrently with the sending thereof, as the case may be;



(g) unsecured Indebtedness of Parent under the Convertible Subordinated Note Agreements (as in
effect on the date hereof) in the amounts set forth on Schedule 9.9 to the Information Certificate;
provided, that:



(i) neither Parent nor any other Borrower or Guarantor shall, directly or indirectly, make any
payments of principal or any other amounts in respect of such Indebtedness or redeem, retire,
defease, purchase or otherwise acquire such Indebtedness, or set aside or otherwise deposit or
invest any sums for such purpose in any sinking fund, or otherwise, except that,



(A) Parent may make regularly scheduled payments of interest and premium, if any, or other
mandatory payments in respect of such Indebtedness in accordance with the terms of the Convertible
Subordinated Note Agreements (as each is in effect on the date hereof) so long as on the date of
any such payment and immediately after giving effect thereto, no Event of Default shall exist or
shall have occurred and be continuing,



(B) any Borrower or Guarantor may redeem or repurchase Convertible 2003 and Convertible 2007
Senior Notes so long as each of the following conditions is satisfied: (A) Agent shall have
received ten (10) days prior written notice of the intention of such Borrower or Guarantor to make
such redemption or repurchase, (B) as of the date of any such redemption or repurchase and after
giving effect thereto, Excess Availability for each of the immediately preceding thirty (30)
consecutive days shall be not less than $25,000,000 and as of the date of any such redemption or
repurchase and immediately after giving effect thereto, the Excess Availability shall be not less
than $25,000,000, (C) Liquidity shall have been not less than $225,000,000 for the three (3) month
period immediately prior to the date of any such redemption and not less than $200,000,000 on the
date of such redemption and after giving effect to all payments in connection with such redemption,
(D) Agent shall have received detailed projections for Parent and its Subsidiaries through the
Maturity Date giving pro forma effect to such redemption, based on assumptions satisfactory to
Agent and demonstrating pro forma compliance with all financial covenants set forth in Section 11
of this Agreement (without regard to the amount of Excess Availability), prepared in good faith and
in a manner and using such methodology as is consistent with the most recent financial statements
delivered to Agent pursuant to Section 9.6 and in form and substance reasonably satisfactory to
Agent, (E) a Compliance Certificate completed on a pro forma basis giving effect to the acquisition
and showing that Borrowers and Guarantors are in compliance with all of the covenants set forth in
Section 11 for each of the twelve (12) months following the date of such redemption, without regard
to the amount of the Excess Availability, and (F) as of the date of any such redemption or
repurchase and immediately after giving effect thereto, no Event of Default shall exist or shall
have occurred and be continuing,



(ii) neither Parent nor any other Borrower or Guarantor shall, directly or indirectly, amend,
modify, alter or change the terms of the Convertible Subordinated Note Agreements (as in effect on
the date hereof), except, that, Parent may, after prior written notice to Agent, amend, modify,
alter or change the terms thereof so as to (A) extend the maturity thereof, (B) defer the timing of
any payments in respect thereof, (C) forgive or cancel any portion of such Indebtedness, other than
pursuant to payments thereof, (D) reduce the interest rate or any fees in connection therewith, or
(E) make any other changes to any of the Convertible Subordinated Note Agreements in a manner which
is favorable to Borrowers and Guarantors or reduces the obligations of Borrowers and Guarantors
thereunder and is not adverse to the interests of Agent and Lenders, and which is not otherwise
permitted by the terms of this Agreement, and



(iii) Borrowers and Guarantors may refinance, extend, renew or replace the Indebtedness under
the Convertible 2003 Subordinated Notes and the Convertible 2007 Subordinated Notes so long as (A)
the principal amount of such refinanced, extended, renewed or replacement Indebtedness is not
greater than the principal amount of the Indebtedness under the Convertible 2003 Subordinated Notes
or the Convertible 2007 Subordinated Notes, as applicable (as in effect on the date hereof), plus
the amount of any premiums or penalties to the extent set forth in the Convertible Subordinated
Note Agreements (as in effect on the date hereof), accrued and unpaid interest paid thereon, and
reasonable fees and expenses, in each case, associated with such refinancing, extension, renewal or
replacement, (B) such refinanced, extended, renewed or replacement Indebtedness has a final
maturity that is no sooner than, and a weighted average life to maturity that is no shorter than,
the Convertible 2003 Subordinated Notes or the Convertible 2007 Subordinated Notes, as applicable
(as in effect on the date hereof), (C) Agent shall have received not less than ten (10) days prior
written notice of the intention of Parent to incur such Indebtedness, which notice shall set forth
in reasonable detail satisfactory to Agent the amount of such Indebtedness, the interest rate, the
schedule of repayments and maturity date with respect thereto and such other information as Agent
may reasonably request with respect thereto, and the economic terms and conditions of which shall
be on commercially reasonable terms for convertible unsecured subordinated debt and at an interest
rate, and with call protections and other provisions consistent with those available in the market
at such time, (D) Agent shall have received true, correct and complete copies of all agreements,
documents and instruments evidencing or otherwise related to such Indebtedness, (E) as of the date
of incurring such Indebtedness and after giving effect thereto, no Default or Event of Default
shall exist or have occurred, (F) the Parent shall not, directly or indirectly, (1) amend, modify,
alter or change any material terms of such Indebtedness or any agreement, document or instrument
related thereto or (2) redeem, retire, defease, purchase or otherwise acquire such Indebtedness
(except pursuant to regularly scheduled payments permitted herein), or set aside or otherwise
deposit or invest any sums for such purpose, in each case except as would be permitted under
Section 10.3(g)(i)(B) with respect to the Convertible Subordinated Note Agreements, (G) such
Indebtedness shall have a stated maturity date which is not less than six (6) months after the
Maturity Date of the Loan Documents, (H) Agent shall have received (1) detailed projections for
Parent and its Subsidiaries through the Maturity Date giving pro forma effect to the incurrence of
such Indebtedness, based on assumptions satisfactory to Agent and demonstrating pro forma
compliance with all financial covenants set forth in Section 11 of this Agreement (without regard
to the amount of Excess Availability), prepared in good faith an in a manner and using such
methodology as is consistent with the most recent financial statements delivered to Agent pursuant
to Section 9.6 and in form and substance reasonably satisfactory to Agent, and (2) a Compliance
Certificate completed on a pro forma basis giving effect to the incurrence of such Indebtedness and
showing that Borrowers and Guarantors are in compliance with all of the covenants set forth in
Section 11 for each month following the incurrence of such Indebtedness through the Maturity Date,
without regard to the amount of the Excess Availability, and (I) such Indebtedness shall be
unsecured,



(h) unsecured Indebtedness of Parent under new convertible subordinated notes issued after the
date hereof up to a maximum principal amount of $300,000,000, provided, that, (i)
such Indebtedness shall be subject and subordinate in right of payment to the Obligations on terms
and conditions reasonably acceptable to Agent, and subject, at the option of Agent, to the terms of
an intercreditor agreement, in form and substance reasonably satisfactory to Agent, (ii) Agent
shall have received not less than ten (10) days prior written notice of the intention of Parent to
incur such Indebtedness, which notice shall set forth in reasonable detail satisfactory to Agent
the amount of such Indebtedness, the interest rate, the schedule of repayments and maturity date
with respect thereto and such other information as Agent may reasonably request with respect
thereto, and the economic terms and conditions of which shall be on commercially reasonable terms
for convertible unsecured subordinated debt and at an interest rate, and with call protections and
other provisions consistent with those available in the market at such time, (iii) Agent shall have
received true, correct and complete copies of all agreements, documents and instruments evidencing
or otherwise related to such Indebtedness, (iv) as of the date of incurring such Indebtedness and
after giving effect thereto, no Default or Event of Default shall exist or have occurred, (v) the
Parent shall not, directly or indirectly, (A) amend, modify, alter or change any material terms of
such Indebtedness or any agreement, document or instrument related thereto or (B) redeem, retire,
defease, purchase or otherwise acquire such Indebtedness (except pursuant to regularly scheduled
payments permitted herein), or set aside or otherwise deposit or invest any sums for such purpose,
in each case except as would be permitted under Section 10.3(g)(i)(B) above with respect to the
Convertible Subordinated Note Agreements, (v) such Indebtedness shall have a stated maturity date
which is not less than six (6) months after the Maturity Date of the Loan Documents, and (vi) Agent
shall have received (A) detailed projections for Parent and its Subsidiaries through the Maturity
Date giving pro forma effect to the incurrence of such Indebtedness, based on assumptions
satisfactory to Agent and demonstrating pro forma compliance with all financial covenants set forth
in Section 11 of this Agreement (without regard to the amount of Excess Availability), prepared in
good faith an in a manner and using such methodology as is consistent with the most recent
financial statements delivered to Agent pursuant to Section 9.6 and in form and substance
reasonably satisfactory to Agent, and (B) a Compliance Certificate completed on a pro forma basis
giving effect to the incurrence of such Indebtedness and showing that Borrowers and Guarantors are
in compliance with all of the covenants set forth in Section 11 for each month following the
incurrence of such Indebtedness through the Maturity Date, without regard to the amount of the
Excess Availability;



(i) Indebtedness of any Borrower, Guarantor or Subsidiary arising after the date hereof issued
in exchange for, or the proceeds of which are used to extend, refinance, replace or substitute for
Indebtedness permitted under Sections 10.3(b), (c), (f), (h), (j), (k), (l), (m) and (o) hereof
(the “Refinancing Indebtedness”); provided, that, as to any such Refinancing
Indebtedness, each of the following conditions is satisfied: (i) Agent shall have received not less
than ten (10) Business Days’ prior written notice of the intention to incur such Indebtedness,
which notice shall set forth in reasonable detail satisfactory to Agent, the amount of such
Indebtedness, the schedule of repayments and maturity date with respect thereto and such other
information with respect thereto as Agent may reasonably request, (ii) promptly upon Agent’s
request, Agent shall have received true, correct and complete copies of all agreements, documents
and instruments evidencing or otherwise related to such Indebtedness, as duly authorized, executed
and delivered by the parties thereto, (iii) the Refinancing Indebtedness shall have a Weighted
Average Life to Maturity and a final maturity equal to or greater than the Weighted Average Life to
Maturity and the final maturity, respectively, of the Indebtedness being extended, refinanced,
replaced, or substituted for, (iv) the Refinancing Indebtedness shall rank in right of payment no
more senior than, and be at least as subordinated (if subordinated) to, the Obligations as the
Indebtedness being extended, refinanced, replaced or substituted for, (v) the Refinancing
Indebtedness shall not include terms and conditions with respect to Borrowers and Guarantors which
would restrict Borrowers’ ability to borrow hereunder or contain financial covenants more
burdensome than those in the Loan Documents, (vi) as of the date of incurring such Indebtedness and
after giving effect thereto, no Default or Event of Default shall exist or have occurred and be
continuing, (vii) the principal amount of such Refinancing Indebtedness shall not exceed the
principal amount of the Indebtedness so extended, refinanced, replaced or substituted for (plus the
lesser of (A) the stated amount of any premium or other payment required to be paid in connection
with such refinancing pursuant to the terms of the Indebtedness being refinanced and (B) the amount
of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in
either case, the amount of reasonable expenses of Borrowers and Guarantors incurred in connection
with such refinancing), (viii) if the Indebtedness being refinanced was secured, the Refinancing
Indebtedness may be secured by substantially the same assets, provided, that, such
security interests (if any) with respect to the Refinancing Indebtedness shall have a priority no
more senior than, and be at least as subordinated, if subordinated (on terms and conditions
substantially similar to the subordination provisions applicable to the Indebtedness so extended,
refinanced, replaced or substituted for or as is otherwise reasonably acceptable to Agent) as the
security interest with respect to the Indebtedness so extended, refinanced, replaced or substituted
for, and (ix) Borrowers and Guarantors may only make payments of principal, interest and fees, if
any, in respect of such Indebtedness to the extent such payments would have been permitted
hereunder in respect of the Indebtedness so extended, refinanced, replaced or substituted for;



(j) Indebtedness of Foreign Subsidiaries consisting of such Foreign Subsidiaries’ obligations
with respect to (i) overdraft, funds transfer or foreign exchange facilities, and (ii) other
Indebtedness of Foreign Subsidiaries (including without limitation letters of credit, letters of
guaranty and bankers’ acceptances) not to exceed, in the case of this clause (ii), $20,000,000 at
any time outstanding; all of which may be unsecured or secured solely by the assets of such Foreign
Subsidiaries;



(k) additional Indebtedness of Parent and its Domestic Subsidiaries with respect to (i)
overdraft and foreign exchange lines used by Domestic Subsidiaries in the ordinary course of
business (ii) letters of credit, letters of guaranty or bankers’ acceptances issued on behalf of
Parent or any of its Domestic Subsidiaries after the date hereof, which are secured by cash and/or
cash equivalents in an amount not exceeding $10,000,000 at any time outstanding and (iii) the
letters of credit identified in Schedule 9.9 Part B of the Information Certificate;



(l) existing Indebtedness of any Subsidiary acquired after the date hereof pursuant to a
Permitted Acquisition; provided, that, (i) such Indebtedness shall not have been
incurred by any such Subsidiary in contemplation of the acquisition, (ii) such Subsidiary is not a
Borrower or Guarantor, (iii) no Borrower or Guarantor is or shall be liable in respect of such
Indebtedness, and (iv) immediately after giving effect to such acquisition, no Event of Default
shall exist or have occurred and be continuing;



(m) unsecured guaranties granted by the Parent with respect to any Indebtedness otherwise
permitted under this Section 10.3 (including guarantees by the Parent of overdraft and foreign
exchange lines used in the ordinary course of business by its Foreign Subsidiaries);



(n) Capitalized Lease Obligations incurred by any Borrower, Guarantor or Subsidiary as a
result of the sale and leaseback of any Real Property owned by any such Person;



(o) the Indebtedness set forth on Schedule 9.9 Part C to the Information Certificate;
provided, that, (i) Borrowers and Guarantors may only make regularly scheduled
payments of principal and interest in respect of such Indebtedness in accordance with the terms of
the agreement or instrument evidencing or giving rise to such Indebtedness as in effect on the date
hereof, (ii) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter
or change the terms of such Indebtedness or any agreement, document or instrument related thereto
as in effect on the date hereof; except, that, Borrowers and Guarantors may, after
prior notice to Agent, amend, modify, alter or change the terms thereof so as to extend the
maturity thereof, or defer the timing of any payments in respect thereof, or to forgive or cancel
any portion of such Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or
otherwise acquire such Indebtedness[ prior to its scheduled maturity, except with the proceeds of
permitted Refinancing Indebtedness], or set aside or otherwise deposit or invest any sums for such
purpose, and (iii) Borrowers and Guarantors shall furnish to Agent all notices or demands in
connection with such Indebtedness either received by any Borrower or Guarantor or on its behalf,
promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf,
concurrently with the sending thereof, as the case may be.



10.4 Loans, Investments, Etc.



Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or
indirectly, make any loans or advance money or property to any person, or invest in (by capital
contribution, dividend or otherwise) or purchase or repurchase the Equity Interests or Indebtedness
or all or a substantial part of the assets or property of any person, or form or acquire any
Subsidiaries (each, an “Investment”), or agree to do any of the foregoing, except:



(a) Permitted Investments; and



(b) Permitted Acquisitions.



10.5 Restricted Payments.



Borrowers and Guarantors shall not, and shall not permit any Subsidiary to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, except:



(a) Borrowers and Guarantors, and each Subsidiary, may declare and make dividend payments or
other distributions payable solely in the Equity Interests of such Person;



(b) Borrowers (other than Parent), Guarantors and other Subsidiaries of Parent may pay, or
declare or pay dividends or distributions to Parent or to such Person’s direct owner(s);



(c) payments permitted to be made under Section 10.9 hereof in accordance therewith; and



(d) Parent may declare and pay a cash dividend to the holders of its Capital Stock, from
legally available funds therefor, provided, that, as to any such distribution, each
of the following conditions is satisfied as determined by Agent: (i) Agent shall have received
notice of such proposed distribution no later than fifteen (15) days prior thereto, (ii) Excess
Availability shall have been not less than $25,000,000 for each day of the thirty (30) day period
immediately prior to the date of the making of such dividend or distribution, and not less than
$25,000,000 on the day of such payment and after giving effect thereto, (iii) as of the date of any
such distribution and after giving effect thereto, no Event of Default shall exist or have occurred
and be continuing or would result therefrom, and (iv) Borrower shall have delivered to Agent, no
earlier than three (3) Business Days prior to such proposed distribution, a certificate of the
chief financial officer of Parent, certifying, among other things the aggregate amount of the
proposed distribution and setting forth the calculation thereof and the calculation of the
compliance with the conditions set forth in this subsection (d); and



(e) Parent may from time to time repurchase its common stock at fair market value at the time
of such repurchase; provided, that, (i) Agent shall have received ten (10) days
prior written notice of the intention of such Borrower or Guarantor to make such redemption or
repurchase, (ii) as of the date of any such redemption or repurchase and after giving effect
thereto, Excess Availability for each of the immediately preceding thirty (30) consecutive days
shall be not less than $25,000,000 and as of the date of any such redemption or repurchase and
immediately after giving effect thereto, the Excess Availability shall be not less than
$25,000,000, (iii) Liquidity shall have been not less than $225,000,000 for the three (3) month
period immediately prior to the date of any such redemption and not less than $200,000,000 on the
date of such redemption and after giving effect to all payments in connection with such
redemption, (iv) Agent shall have received detailed projections for Parent and its Subsidiaries
through the Maturity Date giving pro forma effect to such redemption, based on assumptions
satisfactory to Agent and demonstrating pro forma compliance with all financial covenants set forth
in Section 11 of this Agreement (without regard to the amount of Excess Availability), prepared in
good faith an in a manner and using such methodology as is consistent with the most recent
financial statements delivered to Agent pursuant to Section 9.6 and in form and substance
reasonably satisfactory to Agent, (v) a Compliance Certificate completed on a pro forma basis
giving effect to the acquisition and showing that Borrowers and Guarantors are in compliance with
all of the covenants set forth in Section 11 for each of the twelve (12) months following the date
of such redemption, without regard to the amount of the Excess Availability, and (vi) as of the
date of any such redemption or repurchase and immediately after giving effect thereto, no Event of
Default shall exist or shall have occurred and be continuing.



10.6 Transactions with Affiliates.



Borrowers and Guarantors shall not, directly or indirectly, purchase, acquire or lease any
property from, or sell, transfer or lease any property to, any officer, director or other
Affiliates of any Borrower or Guarantor, except pursuant to the reasonable requirements of such
Borrower’s or Guarantor’s business (as the case may be) and upon fair and reasonable terms no less
favorable to such Borrower or Guarantor than such Borrower or Guarantor, as the case may be, would
obtain in a comparable arm’s length transaction with an unaffiliated person, except for the
following:



(a) Restricted Payments permitted under Section 10.5 hereof;



(b) the payment of reasonable fees to directors of Borrowers who are not employees of
Borrowers;



(c) advances to employees permitted under clause (e) of the definition of Permitted
Investments;



(d) employment agreements, reasonable insurance and indemnification arrangements and other
benefits or compensation arrangements for officers and directors of Borrowers and Guarantors
(including, without limitation, expense reimbursement or advancement) approved by the board of
directors of the applicable Borrower or Guarantor or a committee thereof or as are expressly
provided for in the certificate or articles of incorporation, articles of formation, by-laws or
management agreement of any Borrower or Guarantor; and



(e) any compensation or employee benefit plan available to employees of Borrowers and
Guarantors generally.



10.7 Change in Business.



Each Borrower and Guarantor shall not engage in any business other than the business of such
Borrower or Guarantor on the date hereof and any business reasonably related, ancillary or
complimentary to the business in which such Borrower or Guarantor is engaged on the date hereof.
Each of Agent, Lenders, Borrowers and Guarantors acknowledges that Borrowers and Guarantors are
engaged in the provision of telecommunications equipment and related services.



10.8 Limitation of Restrictions Affecting Subsidiaries.



Each Borrower and Guarantor shall not, directly, or indirectly, create or otherwise cause or
suffer to exist any encumbrance or restriction which prohibits or limits the ability of any
Subsidiary of such Borrower or Guarantor to (a) pay dividends or make other distributions or pay
any Indebtedness owed to such Borrower or Guarantor or any Subsidiary of such Borrower or
Guarantor; (b) make loans or advances to such Borrower or Guarantor or any Subsidiary of such
Borrower or Guarantor, (c) transfer any of its properties or assets to such Borrower or Guarantor
or any Subsidiary of such Borrower or Guarantor; 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,
(iii) customary provisions restricting subletting or assignment of any lease governing a leasehold
interest of such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor, (iv)
customary restrictions on dispositions of real property interests found in reciprocal easement
agreements of such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor, (v) any
agreement relating to permitted Indebtedness incurred by a Subsidiary of such Borrower or Guarantor
prior to the date on which such Subsidiary was acquired by such Borrower or such Guarantor and
outstanding on such acquisition date, and (vi) the extension or continuation of contractual
obligations in existence on the date hereof; provided, that, any such encumbrances
or restrictions contained in such extension or continuation are no less favorable to Agent and
Lenders than those encumbrances and restrictions under or pursuant to the contractual obligations
so extended or continued..



10.9 Certain Payments of Indebtedness, Etc. 



Borrowers and Guarantors shall not, and shall not permit any Subsidiary to, make or agree to
make any payment, prepayment, redemption, retirement, defeasance, purchase or sinking fund payment
or other acquisition for value of any of its Indebtedness, other than the Indebtedness under the
Loan Documents (including, without limitation, by way of depositing money or securities with the
trustee therefor before the date required for the purpose of paying any portion of such
Indebtedness when due), or otherwise set aside or deposit or invest any sums for such purpose;
except, that:



(a) Borrowers, Guarantors and Subsidiaries may make payments in respect of Indebtedness with
proceeds of Refinancing Indebtedness as permitted under Section 10.3(i);



(b) Parent may make prepayments or redemptions of convertible subordinated notes to the extent
permitted under Sections 10.3(g) and (h); and



(c) as to payments in respect of any other Indebtedness permitted under Section 10.3 hereof
not subject to the provisions above in this Section 10.9, Borrowers, Guarantors and Subsidiaries
may make payments of regularly scheduled principal and interest or other mandatory payments as and
when due in respect of such Indebtedness in accordance with the terms thereof (and in the case of
Subordinated Debt, subject to the terms of subordination set forth therein or applicable thereto).



10.10 Modifications of Indebtedness, Organizational Documents and Certain Other
Agreements.



Except as permitted under Section 10.1(a) and (d), Borrowers and Guarantors shall not, and
shall not permit any Subsidiary to amend, modify or otherwise change its certificate of
incorporation, articles of association, certificate of formation, limited liability agreement,
limited partnership agreement or other organizational documents, as applicable, including, without
limitation, entering into any new agreement with respect to any of its Equity Interests, except for
amendments, modifications or other changes that do not affect the rights and privileges of any
Borrower or Guarantor, or its Subsidiaries in any material respect and do not adversely affect the
ability of any Borrower, any Guarantor or such Subsidiary to amend, modify, renew or supplement the
terms of this Agreement or any of the other Loan Documents, or otherwise adversely affect the
interests of Agent or any Lender in any material respect and so long as at the time of any such
amendment, modification or change, no Default or Event of Default shall exist or have occurred and
be continuing;



10.11 License Agreements.



(a) Each Borrower and Guarantor shall (i) promptly and faithfully observe and perform all of
the material terms, covenants, conditions and provisions of the Material License Agreements to
which it is a party to be observed and performed by it, at the times set forth therein, if any,
(ii) not do, permit, suffer or refrain from doing anything that could reasonably be expected to
result in a default under or breach of any of the terms of any Material License Agreement, (iii)
not cancel, surrender, modify, amend, waive or release any Material License Agreement or any term
or provision thereof that would materially limit the scope of the right of such Borrower or
Guarantor to use the Intellectual Property subject to such License Agreement, or consent to or
permit to occur any of the foregoing; except, that, subject to Section 10.11(b) below, such
Borrower or Guarantor may, upon written notice to the Agent, cancel, surrender or release any
Material License Agreement in the ordinary course of the business of such Borrower or Guarantor;
(iv) give Agent prompt written notice of any Material License Agreement entered into by such
Borrower or Guarantor after the date hereof, together with such information with respect thereto as
Agent may request, (v) give Agent prompt written notice of any material breach of any obligation,
or any default, by any Borrower or Guarantor under any Material License Agreement, and deliver to
Agent (promptly upon the receipt thereof by such Borrower or Guarantor in the case of a notice to
such Borrower or Guarantor and concurrently with the sending thereof in the case of a notice from
such Borrower or Guarantor) a copy of each notice of default and every other notice and other
communication received or delivered by such Borrower or Guarantor in connection with any Material
License Agreement which relates to the right of such Borrower or Guarantor to continue to use the
property subject to such License Agreement, and (vi) furnish to Agent, promptly upon the request of
Agent, such information and evidence as Agent may reasonably require from time to time concerning
the observance, performance and compliance by such Borrower or Guarantor or the other party or
parties thereto with the material terms, covenants or provisions of any Material License Agreement,
to the extent such Borrower or Guarantor is permitted to disclose such information under the terms
of the applicable License Agreements.



(b) Each Borrower and Guarantor will either exercise any option to renew or extend the term of
each Material License Agreement to which it is a party in such manner as will cause the term of
such Material License Agreement to be effectively renewed or extended for the period provided by
such option or give Agent written notice that such Borrower or Guarantor does not intend to renew
or extend the term of any such Material License Agreement or that the term thereof shall otherwise
be expiring. In the event of the failure of such Borrower or Guarantor to extend or renew any
Material License Agreement to which it is a party, Agent shall have, and is hereby granted, to the
extent permitted under the terms of each such Material License Agreement, the irrevocable right and
authority, at its option, to renew or extend the term of such Material License Agreement, whether
in its own name and behalf, or in the name and behalf of a designee or nominee of Agent or in the
name and behalf of such Borrower or Guarantor, as Agent shall determine at any time that an Event
of Default shall exist or have occurred and be continuing. Agent may, but shall not be required
to, perform any or all of such obligations of such Borrower or Guarantor under any of the License
Agreements, including, but not limited to, the payment of any or all sums due from such Borrower or
Guarantor thereunder. Any sums so paid by Agent shall constitute part of the Obligations.



10.12 Foreign Assets Control Regulations, Etc.



None of the requesting or borrowing of the Revolving Loans or the requesting or issuance,
extension or renewal of any Letter of Credit or the use of the proceeds of any thereof will violate
the Trading With the Enemy Act (50 USC §1 et seq., as amended) (the “Trading With the Enemy Act”)
or any of the foreign assets control regulations of the United States Treasury Department (31
C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any
enabling legislation or executive order relating thereto (including, but not limited to (a)
Executive order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the
“Executive Order”) and (b) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56). None of Borrowers or
any of their Subsidiaries or other Affiliates is or will become a Sanctioned Entity or Sanctioned
Person as described in the Executive Order, the Trading with the Enemy Act or the Foreign Assets
Control Regulations or engages or will engage in any dealings or transactions, or be otherwise
associated, with any such Sanctioned Entity or Sanctioned Person..



	 	 	 	 	 
	SECTION 11.	 	FINANCIAL COVENANTS
	 	11.1	 	 	Fixed Charge Coverage Ratio.

	 	 	 	 	 







At any time that Excess Availability is less than the amount equal to 20% of the Maximum
Credit and at all times thereafter, the Fixed Charge Coverage Ratio of Parent and Subsidiaries (on
a consolidated basis) determined as of the end of the fiscal quarter most recently ended for which
Agent has received financial statements shall be not less than 1.00 to 1.00 for the period of the
immediately preceding four (4) consecutive fiscal quarters ending on the last day of such fiscal
quarter.



11.2 Minimum Liquidity. 



Parent and its Subsidiaries, on a consolidated basis, shall maintain Liquidity of not less
than $150,000,000 at all times.



	 	 	 	 	 
	SECTION 12.	 	EVENTS OF DEFAULT AND REMEDIES
	 	12.1	 	 	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) (i) any Borrower fails to pay any of the Obligations when due or (ii) any Borrower or
Guarantor fails to perform any of the covenants contained in Sections 9.2, 9.3, 9.4, 9.5, 9.7, 9.8,
9.9, 9.10, 10.7, 10.8, and 10.11 of this Agreement and such failure shall continue for ten (10)
days; provided, that, such ten (10) day period shall not apply in the case of: (A)
any failure to observe any such covenant which is not capable of being cured at all or within such
ten (10) day period or which has been the subject of a prior failure within a six (6) month period
or (B) an intentional breach by any Borrower or Guarantor of any such covenant, or (iii) any
Borrower or Guarantor fails to perform any of the terms, covenants, conditions or provisions
contained in this Agreement or any of the other Loan Documents other than those described in
Sections 12.1(a)(i) and 12.1(a)(ii) above;



(b) any representation, warranty or statement of fact made by any Borrower or Guarantor to
Agent in this Agreement, the other Loan Documents or any other written agreement, schedule,
confirmatory assignment or otherwise shall when made or deemed made be false or misleading in any
material respect;



(c) any Guarantor revokes or terminates or purports to revoke or terminate or fails to perform
any of the terms, covenants, conditions or provisions of any guarantee, endorsement or other
agreement of such party in favor of Agent or any Lender;



(d) any judgment for the payment of money is rendered against any Borrower or Guarantor in
excess of $20,000,000 in any one case or in excess of $40,000,000 in the aggregate (to the extent
not covered by insurance where the insurer has assumed 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 any judgment other than for the payment of money,
or injunction, attachment, garnishment or execution is rendered against any Borrower or Guarantor
or any of the Collateral having a value in excess of $5,000,000;



(e) any Guarantor dissolves or suspends or discontinues doing business except to the extent
permitted under Section 10.1 hereof;



(f) any Borrower, Guarantor or any of their respective Subsidiaries 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;



(g) 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 law or in equity) is filed against any Borrower or Guarantor, any of their respective
Subsidiaries or all or any part of its or their properties and such petition or application is not
dismissed within sixty (60) days after the date of its filing or any Borrower or Guarantor 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;



(h) 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 Borrower or Guarantor or any other Subsidiary of Parent or for
all or any part of its property, or any similar law now or hereafter in effect in any jurisdiction
or under any insolvency, arrangement, reorganization, moratorium, administration, 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, taken or commenced after the date hereof
by any Borrower or Guarantor or any other direct or indirect Subsidiary of Parent or for all or any
part of its property (other than with respect to a dissolution or liquidation permitted under
Section 10.1(c) hereof), including, without limitation, if any Borrower, Guarantor or any other
Subsidiary of Parent shall: (A) apply for, request or consent to the appointment of a receiver,
administrative receiver, receiver and manager, examiner, judicial custodian, trustee, liquidator,
official manager, administrator, controller or any other similar official of it or of all or a
substantial part of its property and assets, (B) be generally unable, or admit in writing its
inability, to pay its debts as they become due, (C) make a general assignment for the benefit of
creditors, (D) file a voluntary petition or assignment in bankruptcy or a proposal seeking a
reorganization, compromise, moratorium or arrangement with its creditors, (E) take advantage of any
insolvency or other similar law pertaining to arrangements, moratoriums, compromises or
reorganizations, or admit the material allegations of a petition or application filed in respect of
it in any bankruptcy, reorganization or insolvency proceeding, or (F) take any corporate action for
the purpose of effecting any of the foregoing;



(i) any default in respect of any Indebtedness of any Borrower or Guarantor (other than
Indebtedness owing to Agent and Lenders hereunder), or other Subsidiary of Parent, in any case in
an amount in excess of $20,000,000, which default continues for more than the applicable cure
period, if any, with respect thereto or any default by any Borrower or Guarantor under any Material
Contract, which default continues for more than the applicable cure period, if any, with respect
thereto and/or is not waived in writing by the other parties thereto;



(j) 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
Agent) 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 is
otherwise not valid, binding or enforceable in accordance with its terms, or any security interest
provided for herein or in any of the other Loan Documents shall cease to be a valid and perfected
first priority security interest in any of the Collateral purported to be subject thereto (except
as otherwise permitted herein or therein);



(k) an ERISA Event shall occur which results in or could reasonably be expected to result in
liability of any Borrower in an aggregate amount in excess of $20,000,000;



(l) any Change of Control;



(m) the indictment by any Governmental Authority of any Borrower or Guarantor of which any
Borrower, Guarantor or Agent receives notice, in either case, as to which there is a reasonable
possibility of an adverse determination, in the good faith determination of Agent, under any
criminal statute, or commencement of criminal or civil proceedings against such Borrower or
Guarantor, pursuant to which statute or proceedings the penalties or remedies may reasonably be
expected to include forfeiture (i) any of the Collateral having a value in excess of $5,000,000 or
(ii) any other property of any Borrower or Guarantor which is necessary or material to the conduct
of its business;



(n) there shall be a Material Adverse Effect after the date hereof; or



(o) there shall be an event of default under any of the other Loan Documents.



12.2 Remedies.



(a) At any time an Event of Default exists or has occurred and is continuing, Agent and
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 Borrower or Guarantor, except as such notice or consent is expressly provided
for hereunder or required by applicable law. All rights, remedies and powers granted to Agent and
Lenders hereunder, under any of the other Loan Documents, the UCC, or other applicable law, are
cumulative, not exclusive and enforceable, in 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
Borrower or Guarantor of this Agreement or any of the other Loan Documents. Subject to Section 14
hereof, Agent may, and at the direction of the Required Lenders shall, at any time or times,
proceed directly against any Borrower or Guarantor 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, Agent may, at its option and shall upon the direction of the
Required Lenders, (i) upon notice to Administrative Borrower, accelerate the payment of all
Obligations and demand immediate payment thereof to Agent for itself and the benefit of Lenders
(provided, that, upon the occurrence of any Event of Default described in Sections
12.1(g) and 12.1(h), all Obligations shall automatically become immediately due and payable), and
(ii) terminate the Commitments whereupon the obligation of each Lender to make any Revolving Loan
and Issuing Bank to issue any Letter of Credit shall immediately terminate (provided,
that, upon the occurrence of any Event of Default described in Sections 12.1(g) and
12.1(h), the Commitments and any other obligation of the Agent or a Lender hereunder shall
automatically terminate). Notwithstanding anything to the contrary set forth in Sections 12.2(a)
and (b) hereof, in the event that the Event of Default set forth in Section 12.2(n) exists and no
other Events of Default shall exist or have occurred and are continuing then Agent 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 Borrower or Guarantor, except that Agent shall not accelerate the payment of the Obligations
and demand immediate payment thereof, or terminate the Commitments.



(c) Without limiting the foregoing, at any time an Event of Default exists or has occurred and
is continuing, 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 Borrower or Guarantor, at Borrowers’ expense, to
assemble and make available to Agent any part or all of the Collateral at any place and time
designated by 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 Agent or elsewhere) at such prices or terms as
Agent may deem reasonable, for cash, upon credit or for future delivery, with the 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 Borrower or Guarantor, which
right or equity of redemption is hereby expressly waived and released by Borrowers and Guarantors
and/or (vi) terminate this Agreement. If any of the Collateral is sold or leased by 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 Agent. If notice of disposition of Collateral is required
by law, ten (10) days prior notice by Agent to 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 Borrowers and
Guarantors waive any other notice. In the event Agent institutes an action to recover any
Collateral or seeks recovery of any Collateral by way of prejudgment remedy, each Borrower and
Guarantor waives the posting of any bond which might otherwise be required. At any time an Event of
Default exists or has occurred and is continuing, upon Agent’s request, Borrowers will either, as
Agent shall specify, furnish cash collateral to Issuing Bank to be used to secure and fund the
reimbursement obligations to Issuing Bank in connection with any Letter of Credit Obligations or
furnish cash collateral to Agent for the Letter of Credit Obligations. Such cash collateral shall
be in the amount equal to one hundred ten (110%) percent 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.



(d) At any time or times that an Event of Default exists or has occurred and is continuing,
Agent may, in its discretion, enforce the rights of any Borrower or Guarantor against any account
debtor, secondary obligor or other obligor in respect of any of the Accounts or other Receivables.
Without limiting the generality of the foregoing, 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 Receivables have been assigned to Agent and that Agent has a security interest
therein and Agent may direct any or all account debtors, secondary obligors and other obligors to
make payment of Receivables directly to 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 Receivables 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
Receivables or such other obligations, but without any duty to do so, and Agent and 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 Agent may deem
necessary or desirable for the protection of its interests and the interests of Lenders. At any
time that an Event of Default exists or has occurred and is continuing, at 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 Agent and are payable directly and only to Agent and Borrowers
and Guarantors shall deliver to Agent such originals of documents evidencing the sale and delivery
of goods or the performance of services giving rise to any Accounts as Agent may require. In the
event any account debtor returns Inventory when an Event of Default exists or has occurred and is
continuing, Borrowers shall, upon Agent’s request, hold the returned Inventory in trust for Agent,
segregate all returned Inventory from all of its other property, dispose of the returned Inventory
solely according to Agent’s instructions, and not issue any credits, discounts or allowances with
respect thereto without Agent’s prior written consent.



(e) To the extent that applicable law imposes duties on Agent or any Lender to exercise
remedies in a commercially reasonable manner (which duties cannot be waived under such law), each
Borrower and Guarantor acknowledges and agrees that it is not commercially unreasonable for Agent
or any Lender (i) to fail to incur expenses reasonably deemed significant by 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 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
Borrower or Guarantor, 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 Agent
or Lenders against risks of loss, collection or disposition of Collateral or to provide to Agent or
Lenders a guaranteed return from the collection or disposition of Collateral, or (xii) to the
extent deemed appropriate by Agent, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist Agent in the collection or disposition of any of the
Collateral. Each Borrower and Guarantor acknowledges that the purpose of this Section is to provide
non-exhaustive indications of what actions or omissions by Agent or any Lender would not be
commercially unreasonable in the exercise by Agent or any Lender of remedies against the Collateral
and that other actions or omissions by Agent or any Lender shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section. Without limitation of the
foregoing, nothing contained in this Section shall be construed to grant any rights to any Borrower
or Guarantor or to impose any duties on Agent or Lenders that would not have been granted or
imposed by this Agreement or by applicable law in the absence of this Section.



(f) For the purpose of enabling Agent to exercise the rights and remedies hereunder, each
Borrower and Guarantor hereby grants to Agent, to the extent assignable, an irrevocable,
non-exclusive license (exercisable at any time an Event of Default shall exist or have occurred and
for so long as the same is continuing) without payment of royalty or other compensation to any
Borrower or Guarantor, to use, assign, license or sublicense 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 Borrower
or Guarantor, 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.



(g) At any time an Event of Default exists or has occurred and is continuing, Agent may apply
the cash proceeds of Collateral actually received by Agent from any sale, lease, foreclosure or
other disposition of the Collateral to payment of the Obligations, in whole or in part and in
accordance with Section 6.7 hereof, whether or not then due, or may hold such proceeds as cash
collateral for the Obligations. Borrowers and Guarantors shall remain liable to Agent and 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.



(h) Without limiting the foregoing, upon the occurrence of a Default or an Event of Default
(other than an Event of Default under Section 12.1(n) hereof), (i) Agent and Lenders may, at
Agent’s option, and upon the occurrence of such an Event of Default at the direction of the
Required Lenders, Agent and Lenders shall, without notice, (A) cease making Revolving Loans or
arranging for Letters of Credit or reduce the lending formulas or amounts of Revolving Loans and
Letters of Credit available to Borrowers and/or (B) terminate any provision of this Agreement
providing for any future Revolving Loans to be made by Agent and Lenders or Letters of Credit to be
issued by Issuing Bank and (ii) Agent may, at its option, establish such Reserves as Agent
determines, without limitation or restriction, notwithstanding anything to the contrary contained
herein. Upon the occurrence of an Event of Default under Section 12.1(n) hereof, Agent may
establish a MAE Reserve but shall not cease making Revolving Loans or arranging for Letters of
Credit, to the extent that Excess Availability exists after giving effect to such MAE Reserve,
unless additional Events of Default exist.




	 	 	SECTION 13. JURY TRIAL WAIVER; OTHER WAIVERS





	 	 	 	 	 
	AND CONSENTS; GOVERNING LAW
	 	13.1	 	 	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) Borrowers, Guarantors, Agent, Lenders and Issuing Bank irrevocably consent and submit to
the non-exclusive jurisdiction of the United States District Court for the Southern District of New
York or any New York state court sitting in New York, New York, whichever 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 Agent and Lenders shall have the right to bring any action or proceeding against any
Borrower or Guarantor or its or their property in the courts of any other jurisdiction which Agent
deems necessary or appropriate in order to realize on the Collateral or to otherwise enforce its
rights against any Borrower or Guarantor or its or their property).



(c) Each Borrower and Guarantor 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 seven (7) days after the same shall have been so deposited in the U.S. mails, or, at
Agent’s option, by service upon any Borrower or Guarantor (or Administrative Borrower on behalf of
such Borrower or Guarantor) in any other manner provided under the rules of any such courts.



(d) BORROWERS, GUARANTORS, AGENT, LENDERS AND ISSUING BANK 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. BORROWERS, GUARANTORS, AGENT, LENDERS AND ISSUING
BANK 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 BORROWER, ANY GUARANTOR, AGENT, ANY LENDER OR
ISSUING BANK 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.



(e) Agent and Secured Parties shall not have any liability to any Borrower or Guarantor
(whether in tort, contract, equity or otherwise) for losses suffered by such Borrower or Guarantor
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 Agent,
such Lender or Issuing Bank, that the losses were the result of acts or omissions constituting
gross negligence or willful misconduct. Each Borrower and Guarantor: (i) certifies that neither
Agent, any Lender, Issuing Bank nor any representative, agent or attorney acting for or on behalf
of Agent, any Lender or Issuing Bank has represented, expressly or otherwise, that Agent, Lenders
and Issuing Bank 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, Agent, Lenders and Issuing Bank are relying upon,
among other things, the waivers and certifications set forth in this Section 13 and elsewhere
herein and therein.



13.2 Waiver of Notices.



Each Borrower and Guarantor 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
Borrower or Guarantor which Agent or any Lender may elect to give shall entitle such Borrower or
Guarantor to any other or further notice or demand in the same, similar or other circumstances.



13.3 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 Agent and the Required Lenders or at Agent’s option, by Agent with the
authorization or consent of the Required Lenders, and as to amendments to any of the Loan Documents
(other than with respect to any provision of Section 14 hereof), by any Borrower and such
amendment, waiver, discharger or termination shall be effective and binding as to all Lenders and
Issuing Bank only in the specific instance and for the specific purpose for which given;
except, that, no such amendment, waiver, discharge or termination shall:



(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 Revolving Loan or Letters of Credit, in each case
without the consent of each Lender directly affected thereby,



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



(iii) release any Collateral (except as expressly required hereunder or under any of the other
Loan Documents or applicable law and except as permitted under Section 14.11(b) hereof), without
the consent of Agent and all of Lenders,



(iv) reduce any percentage specified in the definition of Required Lenders, without the
consent of Agent and all of the Lenders,



(v) consent to the assignment or transfer by any Borrower or Guarantor of any of their rights
and obligations under this Agreement, without the consent of Agent and all of the Lenders,



(vi) amend, modify or waive any terms of this Section 13.3 hereof, without the consent of
Agent and all of the Lenders, or



(vii) increase the advance rates constituting part of the Borrowing Base or increase the
Inventory Loan Limit or the Letter of Credit Limit, without the consent of Agent and all of
Lenders.



(b) Agent, Lenders and Issuing Bank 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 Agent, any Lender or
Issuing Bank 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 Agent, any Lender or Issuing Bank would
otherwise have on any future occasion, whether similar in kind or otherwise.



(c) Notwithstanding anything to the contrary contained in Section 13.3(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 any other Lenders to such
amendment, waiver, discharge or termination that is required are obtained, if any, then the
Administrative Borrower shall have the right to replace such Non-Consenting Lender by arranging for
the sale of such Non-Consenting Lender’s Loans and Commitment to an Eligible Transferee acceptable
to Agent. The Administrative Borrower shall provide the Agent and the Non-Consenting Lender with
prior written notice of its intent to exercise its right under this Section, which notice shall
specify on date on which such purchase and sale shall occur. Such purchase and sale shall be
pursuant to the terms of an Assignment and Acceptance (whether or not executed by the
Non-Consenting Lender); except, that, on the date of such purchase and sale, such
Eligible Transferee, shall pay to the Non-Consenting Lender (except as such Non-Consenting Lender
may otherwise agree) the amount equal to: (i) the principal balance of the Revolving 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), minus (iii) the amount of the closing fee received by the Non-Consenting Lender
pursuant to the terms hereof or of any of the other Loan Documents multiplied by the fraction, the
numerator of which is the number of months remaining in the then current term of the Credit
Facility and the denominator of which is the number of months in the then current term thereof.
Such purchase and sale shall be effective on the date of the payment of such amount to the
Non-Consenting Lender and the Commitment of the Non-Consenting Lender shall terminate on such date.



(d) The consent of Agent shall be required for any amendment, waiver or consent affecting the
rights or duties of Agent hereunder or under any of the other Loan Documents, in addition to the
consent of the Lenders otherwise required by this Section and the exercise by 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 13.3. The consent of Issuing
Bank shall be required for any amendment, waiver or consent affecting the rights or duties of
Issuing Bank hereunder or under any of the other Loan Documents, in addition to the consent of the
Lenders otherwise required by this Section; provided, that, the consent of Issuing
Bank shall not be required for any other amendments, waivers or consents. Notwithstanding anything
to the contrary contained in Section 13.3(a) above, (i) in the event that Agent shall agree that
any items otherwise required to be delivered to Agent as a condition of the initial Revolving Loans
and Letters of Credit hereunder may be delivered after the date hereof, Agent may, in its
discretion, agree to extend the date for delivery of such items or take such other action as Agent
may deem appropriate as a result of the failure to receive such items as 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) Agent may consent to any change in the type of organization,
jurisdiction of organization or other legal structure of any Borrower, Guarantor or any of their
Subsidiaries 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 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 Hedge
Agreements of a Borrower or Guarantor or other Bank Products as set forth in Section 6.7(a) hereof.



(f) Notwithstanding the foregoing, any provision of this Agreement may be amended by an
agreement in writing entered into by Borrowers and Agent with the express consent of the Required
Lenders if (i) by the terms of such agreement the Commitment of each Lender not consenting to the
amendment provided for therein shall terminate upon the effectiveness of such amendment, and (ii)
at the time such amendment becomes effective, each Lender not consenting thereto receives payment
in full of the principal of and interest accrued on each Loan made by it and all other amounts
owing to it or accrued for its account under this Agreement.



13.4 Waiver of Counterclaims.



Each Borrower and Guarantor waives all rights to interpose any claims, deductions, setoffs or
counterclaims of any nature (other then compulsory counterclaims) in any action or proceeding with
respect to this Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto. Any claims which are not compulsory counterclaims may be asserted, if
at all, only in an independent and separate action and subject in each case to the provisions of
Section 13.1 hereof in all respects.



13.5 Indemnification.



Each Borrower and Guarantor shall, jointly and severally, indemnify and hold Agent, each
Lender and Issuing Bank, and their respective officers, directors, agents, employees, 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
and documented attorneys’ fees and expenses) imposed on, incurred by or asserted against any of
them in connection with any litigation, investigation, claim or proceeding commenced or threatened
related to 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 any act, omission, event or transaction
related or attendant thereto, including amounts paid in settlement, court costs, and the fees and
expenses of counsel except that Borrowers and Guarantors shall not have any obligation under this
Section 13.5 to indemnify an Indemnitee with respect to a matter covered hereby resulting from the
gross negligence or willful misconduct of such Indemnitee as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction (but without limiting the obligations of
Borrowers or Guarantors as to any other Indemnitee). To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section may be unenforceable because it violates
any law or public policy, Borrowers and Guarantors shall pay the maximum portion which it is
permitted to pay under applicable law to Agent and Lenders in satisfaction of indemnified matters
under this Section. To the extent permitted by applicable law, no Borrower or Guarantor shall
assert, and each Borrower and Guarantor 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 thereby. All amounts due under this
Section shall be payable upon demand. The foregoing indemnity shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.



13.6 Currency Due.



If, for the purposes of obtaining judgment in any court in any jurisdiction with respect to
this Agreement or any of the other Loan Documents, is becomes necessary to convert into the
currency of such jurisdiction (the “Judgment Currency”) any amount due under this Agreement or
under any of the other Loan Documents in any currency other than the Judgment Currency (the
“Currency Due”), then conversion shall be made at the Exchange Rate at which Agent is able, on the
relevant date, to purchase the Currency Due with the Judgment Currency prevailing on the Business
Day before the day on which judgment is given. In the event that there is a challenge in the rate
of Exchange Rate prevailing between the Business Day before the day on which the judgment is given
and the date of receipt by Agent of the amount due, Borrowers will, on the date of receipt by
Agent, pay such additional amounts, if any, or be entitled to receive reimbursement of such amount,
if any, as may be necessary to ensure that the amount received by Agent on such date is the amount
in the Judgment Currency which when converted at the rate of exchange prevailing on the date of
receipt by Agent is the amount then due under this Agreement or such other of the Loan Documents in
the Currency Due. If the amount of the Currency Due which Agent is able to purchase is less than
the amount of the Currency Due originally due to it, Borrowers shall indemnify and save Agent
harmless from and against loss or damage arising as a result of such deficiency. The indemnity
contained herein shall constitute an obligation separate and independent from the other obligations
contained in this Agreement and the other Loan Documents, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted by Agent from time
to time and shall continue in full force and effect notwithstanding any judgment or order for a
liquidated sum in respect of an amount due under this Agreement or any of the other Loan Documents
or under any judgment or order.



	 	 	 	 	 
	SECTION 14.	 	THE AGENT
	 	14.1	 	 	Appointment, Powers and Immunities.

	 	 	 	 	 







Each Secured Party irrevocably designates, appoints and authorizes Wachovia to act as Agent
hereunder and under the other Loan Documents with such powers as are specifically delegated to
Agent by the terms of this Agreement and of the other Loan Documents, together with such other
powers as are reasonably incidental thereto. 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 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 Borrower or any Guarantor or any other
Person to perform any of its obligations hereunder or thereunder; and (c) shall not be responsible
to Secured Parties 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.
Agent may employ agents and attorneys in fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys in fact selected by it in good faith. 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 reasonably satisfactory to Agent shall have been delivered to and acknowledged by
Agent..



14.2 Reliance by Agent.



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 Agent. As to any matters not expressly provided for by this Agreement or any other
Loan Document, 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
Lenders as is required in such circumstance, and such instructions of such Agents and any action
taken or failure to act pursuant thereto shall be binding on all Lenders.



14.3 Events of Default.



(a) 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 Revolving Loans and Letters of
Credit hereunder, unless and until 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 Agent receives such a
Notice of Default or Failure of Condition, Agent shall give prompt notice thereof to the Lenders.
Agent shall (subject to Section 14.7) take such action with respect to any such Event of Default or
failure of condition precedent as shall be directed by the Required Lenders to the extent provided
for herein; provided, that, unless and until Agent shall have received such
directions, 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 Lenders. Without limiting the foregoing, and
notwithstanding the existence or occurrence and continuance of an Event of Default or any other
failure to satisfy any of the conditions precedent set forth in Section 4 of this Agreement to the
contrary, unless and until otherwise directed by the Required Lenders, Agent may, but shall have no
obligation to, continue to make Revolving Loans and Issuing Bank may, but shall have no obligation
to, issue or cause to be issued any Letter of Credit for the ratable account and risk of Lenders
from time to time if Agent believes making such Revolving Loans or issuing or causing to be issued
such Letter of Credit is in the best interests of Lenders.



(b) Except with the prior written consent of Agent, no Lender or Issuing Bank may assert or
exercise any enforcement right or remedy in respect of the Revolving Loans, Letter of Credit
Obligations or other Obligations, as against any Borrower or Guarantor or any of the Collateral or
other property of any Borrower or Guarantor, except, that, a Bank Product Provider shall not be
required to obtain the consent of Agent prior to (i) exercising its right to terminate a Hedge
Agreement to which it is a counterparty or (ii) exercising its enforcement rights with respect to
any cash collateral specifically pledged by any Borrower or Guarantor (and held by such Bank
Product Provider) to secure the obligations owing to such Bank Product Provider pursuant to and in
accordance with the terms of any such Hedge Agreement.



14.4 Wachovia in its Individual Capacity.



With respect to its Commitment and the Revolving Loans made and Letters of Credit issued or
caused to be issued by it (and any successor acting as 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 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 Agent) and its Affiliates may (without having to
account therefor to any Lender) lend money to, make investments in and generally engage in any kind
of business with Borrowers (and any of its Subsidiaries or Affiliates) as if it were not acting as
Agent, and Wachovia and its Affiliates may accept fees and other consideration from any Borrower or
Guarantor and any of its Subsidiaries and Affiliates for services in connection with this Agreement
or otherwise without having to account for the same to Lenders.



14.5 Indemnification.



Lenders agree to indemnify Agent and Issuing Bank (to the extent not reimbursed by Borrowers
hereunder and without limiting any obligations of 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 Agent (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 Agent 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 or
non-renewal of this Agreement.



14.6 Non-Reliance on Agent and Other Lenders.



Each Lender agrees that it has, independently and without reliance on Agent or other Lender,
and based on such documents and information as it has deemed appropriate, made its own credit
analysis of Borrowers and Guarantors and has made its own decision to enter into this Agreement and
that it will, independently and without reliance upon 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. Agent shall not be required to keep itself informed as to the performance or observance
by any Borrower or Guarantor 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 Borrower or Guarantor. Agent will use reasonable efforts to provide
Lenders with any information received by Agent from any Borrower or Guarantor which is required to
be provided to Lenders or deemed to be requested by Lenders hereunder and with a copy of any Notice
of Default or Failure of Condition received by Agent from any Borrower or any Lender;
provided, that, Agent shall not be liable to any Lender for any failure to do so,
except to the extent that such failure is attributable to 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 Lenders by
Agent or deemed requested by Lenders hereunder, 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 Borrower or Guarantor that may come into the possession of Agent.



14.7 Failure to Act.



Except for action expressly required of Agent hereunder and under the other Loan Documents,
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 Lenders of their
indemnification obligations under Section 14.5 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such action.



14.8 Additional Revolving Loans.



Agent shall not make any Revolving Loans or Issuing Bank provide any Letter of Credit to any
Borrower on behalf of Lenders intentionally and with actual knowledge that such Revolving Loans or
Letter of Credit would cause the aggregate amount of the total outstanding Revolving Loans and
Letters of Credit to Borrowers to exceed the Borrowing Base, without the prior consent of all
Lenders; except, that, Agent may make such additional Revolving Loans or Issuing
Bank may provide such additional Letter of Credit on behalf of Lenders, intentionally and with
actual knowledge that such Revolving Loans or Letter of Credit will cause the total outstanding
Revolving Loans and Letters of Credit to Borrowers to exceed the Borrowing Base, as Agent may deem
necessary or advisable in its discretion; provided, that: (a) the total principal
amount of the additional Revolving Loans or additional Letters of Credit to any Borrower which
Agent may make or provide after obtaining such actual knowledge that the aggregate principal amount
of the Revolving Loans equal or exceed the Borrowing Bases of Borrowers, plus the amount of Special
Agent Advances made pursuant to Section 14.11(a) hereof then outstanding, shall not exceed the
aggregate amount equal to ten (10%) percent of the Maximum Credit and shall not cause the total
principal amount of the Loans and Letters of Credit to exceed the Maximum Credit and (b) no such
additional Revolving Loan or Letter of Credit shall be outstanding more than ninety (90) days after
the date such additional Revolving Loan or Letter of Credit is made or issued (as the case may be),
except as the Required Lenders may otherwise agree. Each Lender shall be obligated to pay Agent
the amount of its Pro Rata Share of any such additional Revolving Loans or Letters of Credit..



14.9 Concerning the Collateral and the Related Loan Documents.



Each Secured Party authorizes and directs Agent to enter into this Agreement and the other
Loan Documents. Each Secured Party agrees that any action taken by Agent or Required Lenders (or
such greater percentage as may be required hereunder) in accordance with the terms of this
Agreement or the other Loan Documents and the exercise by Agent or Required Lenders (or such
greater percentage as may be required hereunder) 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 Secured Parties.



14.10 Field Audit, Examination Reports and other Information; Disclaimer by Lenders.



By signing this Agreement, each Lender:



(a) is deemed to have requested that 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 Agent (each field audit or examination report and report
with respect to the Borrowing Base being referred to herein as a “Report” and collectively,
“Reports”), appraisals with respect to the Collateral and financial statements with respect to
Parent and its Subsidiaries received by Agent;



(b) expressly agrees and acknowledges that 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 Agent or any other party performing any audit or examination will inspect only
specific information regarding Borrowers and Guarantors and will rely significantly upon Borrowers’
and Guarantors’ books and records, as well as on representations of Borrowers’ and Guarantors’
personnel; and



(d) agrees to keep all Reports confidential and strictly for its internal use in accordance
with the terms of Section 15.5 hereof, and not to distribute or use any Report in any other manner.



14.11 Collateral Matters.



(a) 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
Revolving Loans and Letters of Credit hereunder, make such disbursements and advances (“Special
Agent Advances”) which Agent, in its sole discretion, (i) deems necessary or desirable either to
preserve or protect the Collateral or any portion thereof or (ii) to enhance the likelihood or
maximize the amount of repayment by Borrowers and Guarantors of the Revolving Loans and other
Obligations; provided, that, (A) the aggregate principal amount of the Special
Agent Advances pursuant to this clause (ii) outstanding at any time, plus the then outstanding
principal amount of the additional Revolving Loans and Letters of Credit which Agent may make or
provide as set forth in Section 14.8 hereof, shall not exceed the amount equal to ten (10%) percent
of the Maximum Credit and (B) the aggregate principal amount of the Special Agent Advances pursuant
to this clause (ii) outstanding at any time, plus the then outstanding principal amount of the
Revolving Loans, shall not exceed the Maximum Credit, except at Agent’s option; provided,
that, to the extent that the aggregate principal amount of Special Agent Advances plus the
then outstanding principal amount of the Revolving Loans exceed the Maximum Credit the Special
Agent Advances that are in excess of the Maximum Credit shall be for the sole account and risk of
Agent and notwithstanding anything to the contrary set forth below, no Lender shall have any
obligation to provide its share of such Special Agent Advances in excess of the Maximum Credit, or
(iii) to pay any other amount chargeable to any Borrower or Guarantor pursuant to the terms of this
Agreement or any of the other Loan Documents consisting of (A) costs, fees and expenses and (B)
payments to Issuing Bank in respect of any Letter of Credit Obligations. 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 Revolving 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 and shall be payable on demand.
Without limitation of its obligations pursuant to Section 6.13, each Lender agrees that it shall
make available to Agent, upon Agent’s demand, in immediately available funds, the amount equal to
such Lender’s Pro Rata Share of each such Special Agent Advance. If such funds are not made
available to Agent by such Lender, such Lender shall be deemed a Defaulting Lender and 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 Agent at the
Federal Funds Rate for each day during such period (as published by the Federal Reserve Bank of New
York or at Agent’s option based on the arithmetic mean determined by Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. on that day by each of the
three leading brokers of Federal funds transactions in New York City selected by Agent) and if such
amounts are not paid within three (3) days of Agent’s demand, at the highest Interest Rate provided
for in Section 3.1 hereof applicable to Base Rate Loans.



(b) Lenders hereby irrevocably authorize 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 15.1 below, or (ii) constituting property being sold or
disposed of if Administrative Borrower or any Borrower or Guarantor certifies to Agent that the
sale or disposition is made in compliance with Section 10.1 hereof (and Agent may rely conclusively
on any such certificate, without further inquiry), or (iii) constituting property in which any
Borrower or Guarantor did not own an interest at the time the security interest, mortgage or lien
was granted or at any time thereafter, or (iv) having a value in the aggregate in any twelve (12)
month period of less than $5,000,000, and to the extent 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 Lenders, or (v) if required or permitted under
the terms of any of the other Loan Documents, including any intercreditor agreement, or (vi)
approved, authorized or ratified in writing by the Required Lenders. Except as provided above,
Agent will not release any security interest in, mortgage or lien upon, any of the Collateral
without the prior written authorization of the Required Lenders. Upon request by Agent at any time,
Lenders will promptly confirm in writing Agent’s authority to release particular types or items of
Collateral pursuant to this Section. In no event shall the consent or approval of Issuing Bank to
any release of Collateral be required.



(c) Agent is further authorized, without the requirement of notice to or consent of any
Lenders, to release any Guarantor from its obligations hereunder in the event such Guarantor is
sold, dissolved, wound up or merged or consolidated with any Person in a transaction otherwise
permitted hereunder.



(d) Without any manner limiting 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 Agent, the authority to release Collateral conferred upon Agent under this Section.
Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be
necessary to evidence the release of the security interest, mortgage or liens granted to Agent upon
any Collateral to the extent set forth above; provided, that, (i) Agent shall not
be required to execute any such document on terms which, in Agent’s opinion, would expose Agent to
liability or create any obligations or entail any consequence other than the release of such
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 Borrower or Guarantor in respect of) the Collateral retained by
such Borrower or Guarantor.



(e) Agent shall have no obligation whatsoever to any Lender, Issuing Bank or any other Person
to investigate, confirm or assure that the Collateral exists or is owned by any Borrower or
Guarantor 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 Revolving Loans or
Letters of Credit hereunder, or whether any particular reserves are appropriate, or that the liens
and security interests granted to 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 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, Agent may act in any
manner it may deem appropriate, in its discretion, given Agent’s own interest in the Collateral as
a Lender and that Agent shall have no duty or liability whatsoever to any other Lender or Issuing
Bank.



14.12 Agency for Perfection.



Each Lender and Issuing Bank hereby appoints Agent and each other Lender and Issuing Bank as
agent and bailee for the purpose of perfecting the security interests in and liens upon the
Collateral of Agent in assets 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 Agent and each Lender and Issuing Bank hereby
acknowledges that it holds possession of any such Collateral for the benefit of Agent as secured
party. Should any Lender or Issuing Bank obtain possession of any such Collateral, such Lender
shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver such
Collateral to Agent or in accordance with Agent’s instructions.



14.13 Successor Agent.



Agent may resign as Agent upon thirty (30) days’ notice to Lenders and Administrative
Borrower. If Agent resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for Lenders, which successor agent shall be subject to the approval of
Administrative Borrower (such approval not to be unreasonably withheld, conditioned or delayed), so
long as no Default or Event of Default shall exist or have occurred and be continuing. If no
successor agent is appointed prior to the effective date of the resignation of Agent, Agent may
appoint, after consulting with Lenders and Administrative Borrower, a successor agent from among
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 Agent and the term “Agent” as used herein and in the other Loan Documents shall mean such
successor agent and the retiring Agent’s appointment, powers and duties as Agent shall be
terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this
Section 14 shall inure to its benefit as to any actions taken or omitted by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by the date which is
thirty (30) days after the date of a retiring Agent’s notice of resignation, the retiring Agent’s
resignation shall nonetheless thereupon become effective and Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. Any resignation by Agent pursuant to this Section shall also
constitute its resignation as Issuing Bank. Upon the acceptance of a successor’s appointment as
Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Issuing Bank, (b) the retiring Issuing Bank shall be
discharged from all of their respective duties and obligations hereunder or under the other Loan
Documents, and (c) the successor Issuing Bank shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or make other arrangements
satisfactory to the retiring Issuing Bank to effectively assume the obligations of the retiring
Issuing Bank with respect to such Letters of Credit.



14.14 Other Agent Designations.



Agent may at any time and from time to time determine that a Lender may, in addition, be a
“Co-Agent”, “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 Agent to Administrative Borrower of any
such designation. Any Lender that is so designated as a Co-Agent, Syndication Agent, Documentation
Agent or such similar designation by 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 Co-Agent,
Syndication Agent, Documentation Agent or such similar designation in deciding to enter into this
Agreement or in taking or not taking action hereunder.



	 	 	 	 	 
	SECTION 15.	 	TERM OF AGREEMENT; MISCELLANEOUS
	 	15.1	 	 	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
Maturity Date unless sooner terminated as provided herein. In addition, Borrowers may terminate
this Agreement (provided, that, the all other Loan Documents are simultaneously
terminated) at any time upon ten (10) days prior written notice to Agent (which notice shall be
irrevocable) and Agent may, at its option, and shall at the direction of Required Lenders,
terminate this Agreement at any time on or after an Event of Default. Upon the Maturity Date or
any other effective date of termination of the Loan Documents, Borrowers shall pay to Agent all
outstanding and unpaid Obligations and shall furnish cash collateral to Agent (or at Agent’s
option, a letter of credit issued for the account of Borrowers and at Borrowers’ expense, in form
and substance reasonably satisfactory to Agent, by an issuer reasonably acceptable to Agent and
payable to Agent as beneficiary) in such amounts as Agent determines are reasonably necessary to
secure Agent, Lenders and Issuing Bank from loss, cost, damage or expense, including attorneys’
fees and expenses, in connection with 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 Agent or any Lender has not yet received final and indefeasible payment and any
continuing obligations of Agent or any Lender pursuant to any Deposit Account Control Agreement and
for 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 (unless such Obligations arising
under or in connection with any Bank Products are paid in full in cash and terminated in a manner
satisfactory to such Bank Product Provider). The amount of such cash collateral (or letter of
credit, as Agent may determine) as to any Letter of Credit Obligations shall be in the amount equal
to one hundred ten (110%) percent 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 Federal funds
to the Agent Payment Account or such other bank account of Agent, as Agent may, in its discretion,
designate in writing to Administrative Borrower for such purpose. Interest shall be due until and
including the next Business Day, if the amounts so paid by Borrowers to the Agent Payment Account
or other bank account designated by Agent are received in such bank account later than 12:00 noon,
Chicago time.



(b) No termination of the Commitments, this Agreement or any of the other Loan Documents shall
relieve or discharge any Borrower or Guarantor 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 Agent’s continuing security interest in the Collateral and the
rights and remedies of Agent and 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 Borrower and Guarantor waives any rights it may have under the UCC to
demand the filing of termination statements with respect to the Collateral and Agent shall not be
required to send such termination statements to Borrowers or Guarantors, 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 in immediately available funds.



15.2 Interpretative Provisions.



(a) All terms used herein which 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 Borrower, Guarantor, Agent and 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 13.3 or is cured in a manner satisfactory to Agent, if such
Event of Default is capable of being cured as determined by Agent.



(g) All references to the term “good faith” used herein when applicable to 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.



(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, 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 Parent most recently received by Agent prior
to the date hereof. 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.



(i) 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) Each reference to a threshold for Excess Availability set forth in the Agreement or any of
the other Loan Documents shall be automatically increased each time the Maximum Credit is increased
pursuant to Section 2.5 hereof to an amount such that the ratio of the Excess Availability to the
Maximum Credit as so increased remains the same as prior to such increase in the Maximum Credit



(n) This Agreement and the other Loan Documents are the result of negotiations among and have
been reviewed by counsel to 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 Agent or
Lenders merely because of Agent’s or any Lender’s involvement in their preparation.



15.3 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 15.3(b) 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):



	 	 	 
	If to any Borrower or Guarantor:
	 	ADC Telecommunications, Inc.

13625 Technology Drive

Eden Prairie, MN 55344

Attention: Treasurer

Telephone No.: (952) 917-0323

Telecopy No.: (952) 917-2588

	With a copy to:
	 	Office of the General Counsel

ADC Telecommunications, Inc.

13625 Technology Drive

Eden Prairie, MN 55344

Telecopy No.: (952) 917-0638

	If to Agent or Issuing Bank:
	 	Wachovia Bank, National Association

150 South Wacker Drive, Suite 2200

Chicago, Illinois 60606-4203

Attention: Portfolio Manager

Telephone No.: (312) 332-0420

Telecopy No.: (312) 332-0424







(b) Notices and other communications to Lenders and Issuing Bank hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant
to procedures approved by Agent or as otherwise determined by Agent; provided,
that, the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to
Section 2 hereof if such Lender or Issuing Bank, as applicable, has notified Agent that it is
incapable of receiving notices under such Section by electronic communication. Unless 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.



15.4 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.



15.5 Confidentiality.



(a) Agent, each Lender and Issuing Bank shall use all reasonable efforts to keep confidential,
in accordance with its customary procedures for handling confidential information and safe and
sound lending practices, any non-public information supplied to it by any Borrower pursuant to this
Agreement which is furnished by such Borrower to Agent, such Lender or Issuing Bank;
provided, that, nothing contained herein shall limit the disclosure of any such
information: (i) to the extent required by statute, rule, regulation, subpoena or court order, (ii)
to bank examiners and other regulators, auditors and/or accountants, in connection with any
litigation to which Agent, such Lender or Issuing Bank is a party, (iii) to any Lender or
Participant (or prospective Lender or Participant) or Issuing Bank or to any Affiliate of any
Lender so long as such Lender, Participant (or prospective Lender or Participant), Issuing Bank or
Affiliate shall have agreed in writing to treat such information as confidential in accordance with
this Section 15.5, (provided, that, any Affiliate of Wachovia, need only be instructed to treat
such information as confidential in accordance with this Section 15.5),or (iv) to counsel for
Agent, any Lender, Participant (or prospective Lender or Participant) or Issuing Bank.



(b) In the event that Agent, any Lender or Issuing Bank receives a request or demand to
disclose any confidential information pursuant to any subpoena or court order, Agent or such Lender
or Issuing Bank, as the case may be, agrees (i) to the extent permitted by applicable law or if
permitted by applicable law, to the extent Agent or such Lender or Issuing Bank determines in good
faith that it will not create a significant risk of liability to Agent or such Lender or Issuing
Bank, Agent or such Lender or Issuing Bank will promptly notify Administrative Borrower of such
request so that Administrative Borrower may seek a protective order or other appropriate relief or
remedy and (ii) if disclosure of such information is required, disclose such information and,
subject to reimbursement by Borrowers of Agent’s or such Lender’s or Issuing Bank’s expenses,
cooperate with Administrative Borrower in the reasonable efforts to obtain an order or other
reliable assurance that confidential treatment will be accorded to such portion of the disclosed
information which Administrative Borrower so designates, to the extent permitted by applicable law
or if permitted by applicable law, to the extent Agent or such Lender or Issuing Bank determines in
good faith that it will not create a risk of liability to Agent or such Lender or Issuing Bank.



(c) In no event shall this Section 15.5 or any other provision of this Agreement, any of the
other Loan Documents or applicable law be deemed: (i) to apply to or restrict disclosure of
information that has been or is made public by any Borrower, Guarantor or any third party or
otherwise becomes generally available to the public other than as a result of a disclosure in
violation hereof, (ii) to apply to or restrict disclosure of information that was or becomes
available to Agent, any Lender (or any Affiliate of any Lender) or Issuing Bank on a
non-confidential basis from a person other than a Borrower or Guarantor, (iii) to require Agent,
any Lender or Issuing Bank to return any materials furnished by a Borrower or Guarantor to Agent, a
Lender or Issuing Bank or prevent Agent, a Lender or Issuing Bank 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 Agent, Lenders and Issuing Bank
under this Section 15.5 shall supersede and replace the obligations of Agent, Lenders and Issuing
Bank under any confidentiality letter signed prior to the date hereof or any other arrangements
concerning the confidentiality of information provided by any Borrower or Guarantor to Agent or any
Lender. In addition, Agent and Lenders may disclose information, with the prior consent of Parent,
which will not be unreasonably withheld, relating to the Credit Facility to Gold Sheets and other
publications, with such information to consist of deal terms and other information customarily
found in such publications and that Wachovia and its Affiliates may otherwise use the corporate
name and logo of Borrowers and Guarantors or deal terms in “tombstones” or other advertisements,
public statements or marketing materials.



15.6 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 Agent, Lenders, Issuing
Bank, Borrowers, Guarantors and their respective successors and assigns; except,
that, 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 Agent and
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 without the prior written
consent of Agent and otherwise in accordance with Section 15.7 below (and the Administrative
Borrower as provided for in the definition of Eligible Transferee). The terms and provisions of
this Agreement and the other Loan Documents are for the purpose of defining the relative rights and
obligations of Borrowers, Guarantors, Agent, Lenders and Issuing Bank 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.



15.7 Assignments; Participations.



(a) Each Lender may make assignments of all or, if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Lender, of such rights and obligations under this
Agreement to one or more Eligible Transferees (but not including for this purpose any assignments
in the form of a participation), each of which assignees shall become a party to this Agreement as
a Lender by execution of an Assignment and Acceptance; provided, that, (i) such
transfer or assignment will not be effective until recorded by Agent on the Register and (ii) Agent
shall have received for its sole account payment of a processing fee from the assigning Lender or
the assignee in the amount of $5,000.



(b) Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and
to the other Loan Documents and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations
(including, without limitation, the obligation to participate in Letter of Credit Obligations) of a
Lender hereunder and thereunder and the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement.



(c) By execution and delivery of an Assignment and Acceptance, the assignor and assignee
thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any of the other Loan Documents or
the execution, legality, enforceability, genuineness, sufficiency or value of this Agreement or any
of the other Loan Documents furnished pursuant hereto, (ii) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
any Borrower, Guarantor or any of their Subsidiaries or the performance or observance by any
Borrower or Guarantor of any of the Obligations; (iii) such assignee confirms that it has received
a copy of this Agreement and the other Loan Documents, together with such other documents and
information it has deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance, (iv) such assignee will, independently and without reliance upon
the assigning Lender, Agent and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents, (v) such assignee appoints and authorizes Agent
to take such action as agent on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto, and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Lender. Agent and Lenders may furnish
any information concerning any Borrower or Guarantor in the possession of Agent or any Lender from
time to time to assignees and Participants.



(d) Each Lender may sell participations to one or more banks or other entities in or to all or
a portion of its rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Commitments and the Loans owing to it and
its participation in the Letter of Credit Obligations, without the consent of Agent or the other
Lenders); provided, that, (i) such Lender’s obligations under this Agreement
(including, without limitation, its Commitment hereunder) and the other Loan Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and Borrowers, Guarantors, the other Lenders and Agent shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents, and (iii) the Participant shall not
have any rights under this Agreement or any of the other Loan Documents (the Participant’s rights
against such Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto) and all amounts payable by
any Borrower or Guarantor hereunder shall be determined as if such Lender had not sold such
participation.



(e) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such Lenders from such Federal
Reserve Bank; provided, that, no such pledge shall release such Lender from any of
its obligations hereunder or substitute any such pledgee for such Lender as a party hereto.



(f) Borrowers and Guarantors shall assist Agent or any Lender permitted to sell assignments or
participations under this Section 15.7 in whatever manner reasonably necessary in order to enable
or effect any such assignment or participation, including (but not limited to) the execution and
delivery of any and all agreements, notes and other documents and instruments as shall be requested
and the delivery of informational materials, appraisals or other documents for, and the
participation of relevant management in meetings and conference calls with, potential Lenders or
Participants. Borrowers shall certify the correctness, completeness and accuracy, in all material
respects, of all descriptions of Borrowers and Guarantors and their affairs provided, prepared or
reviewed by any Borrower or Guarantor that are contained in any selling materials and all other
information provided by it and included in such materials.



(g) Any Lender that is an Issuing Bank may at any time, with the consent of Agent assign all
of its Commitments to an Eligible Transferee in accordance with this Section 15.7 (and with the
consent of Administrative Borrower if required pursuant to the definition of Eligible Transferee).
If such Issuing Bank ceases to be Lender, it may, at its option, resign as Issuing Bank and such
Issuing Bank’s obligations to issue Letters of Credit shall terminate but it shall retain all of
the rights and obligations of Issuing Bank hereunder with respect to Letters of Credit outstanding
as of the effective date of its resignation and all Letter of Credit Obligations with respect
thereto (including the right to require Lenders to make Revolving Loans or fund risk participations
in outstanding Letter of Credit Obligations), shall continue.



15.8 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.



15.9 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 “Act”) hereby notifies Borrowers and Guarantors that pursuant to the
requirements of the 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 Borrowers and Guarantors and other information
that will allow such Lender to identify such person in accordance with the Act and any other
applicable law. Borrowers and Guarantors are hereby advised that any Loans or Letters of Credit
hereunder are subject to satisfactory results of such verification.



15.10 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.



[SIGNATURE PAGES FOLLOW]




IN WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have caused these presents to be
duly executed as of the day and year first above written.



	 	 	 
	AGENT:
	 	BORROWERS:

	WACHOVIA BANK, NATIONAL

ASSOCIATION, as Agent,

Issuing Bank and Lender

By: /s/ Scott T. Collins

Name: Scott T. Collins

Title: Director

Commitment: $75,000,000
	 	ADC TELECOMMUNICATIONS, INC.

By: /s/ James G. Mathews

Name: James G. Mathews

Title: Vice President and Chief Financial Officer








	 	 	ADC TELECOMMUNICATIONS SALES, INC.

By: /s/ James G. Mathews

Name: James G. Mathews

Title: Vice President and Chief Financial Officer

	 	 	LGC WIRELESS, INC.

By: /s/ James G. Mathews

Name: James G. Mathews

Title: Vice President

	 	 	GUARANTORS:

	 	 	ADC DSL SYSTEMS, INC.

By: /s/ James G. Mathews

Name: James G. Mathews

Title: Vice President

	 	 	ADC INTERNATIONAL OUS, INC.

By: /s/ James G. Mathews

Name: James G. Mathews

Title: Vice President

	 	 	ADC OPTICAL SYSTEMS, INC.

By: /s/ James G. Mathews

Name: James G. Mathews

Title: Vice President

	 	 	ADC INTERNATIONAL HOLDING INC.

By: /s/ James G. Mathews

Name: James G. Mathews

Title: President

	ISSUING BANK:
	 	


	WACHOVIA BANK, NATIONAL

ASSOCIATION, as Issuing

Bank

By: /s/ Scott T. Collins

Name: Scott T. Collins

Title: Director
	 	



















	1	 	the existing loans to the foreign subs should
be included in Part B






2