Filed by Bowne Pure Compliance





EXHIBIT 10.1




 





SECOND AMENDED AND RESTATED




LOAN AGREEMENT




among




CSS INDUSTRIES, INC.




as Borrower




THE LENDING INSTITUTIONS LISTED HEREIN,




PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent,




PNC CAPITAL MARKETS LLC,

as Lead Arranger,




RBS SECURITIES CORPORATION d/b/a RBS GREENWICH CAPITAL,

as Co-Lead Arranger




and




CITIZENS BANK OF PENNSYLVANIA,

as Syndication Agent




 






DATED AS OF NOVEMBER 21, 2008




 






 






 


 









 







TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 1. DEFINITIONS AND INTERPRETATION
	 	 	1	 
	 
	 	 	 	 
	1.1 Terms Defined
	 	 	1	 
	1.2 Accounting Principles
	 	 	19	 
	 
	 	 	 	 
	SECTION 2. THE LOAN
	 	 	19	 
	 
	 	 	 	 
	2.1 Revolving Line of Credit
	 	 	19	 
	2.2 Letters of Credit
	 	 	22	 
	2.3 Voluntary Reduction or Increase of Commitment
	 	 	27	 
	2.4 Advances, Conversions, Renewals and Payments
	 	 	28	 
	2.5 Interest
	 	 	32	 
	2.6 Fees
	 	 	34	 
	2.7 Prepayments
	 	 	35	 
	2.8 Use of Proceeds
	 	 	35	 
	2.9 Special Provisions Governing LIBOR Based Rate Advances
	 	 	35	 
	2.10 Capital
Requirements, Etc.
	 	 	39	 
	2.11 Mandatory Prepayments/Commitment Reductions
	 	 	40	 
	2.12 Net Payments
	 	 	40	 
	2.13 Maturity Date Extension
	 	 	42	 
	2.14 Change of Lending Office
	 	 	42	 
	2.15 Replacement of a Lender in Certain Circumstances
	 	 	42	 
	2.16 Defaulting Lenders
	 	 	43	 
	 
	 	 	 	 
	SECTION 3. EFFECTIVENESS AND CONDITIONS PRECEDENT TO ADVANCES
	 	 	45	 
	 
	 	 	 	 
	3.1 Conditions Precedent to Effectiveness
	 	 	45	 
	3.2 Effective Date; Transitional Arrangements
	 	 	48	 
	3.3 Conditions Precedent to all Advances
	 	 	49	 
	3.4 Waiver of Rights
	 	 	50	 
	3.5 Delivery of Documents
	 	 	50	 
	 
	 	 	 	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES
	 	 	51	 
	 
	 	 	 	 
	4.1 Corporate Organization and Validity
	 	 	51	 
	4.2 Places of Business
	 	 	52	 
	4.3 Pending Litigation
	 	 	52	 
	4.4 Title to Properties
	 	 	52	 
	4.5 Governmental Consent
	 	 	52	 
	4.6 Taxes
	 	 	52	 






 


i









 





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	4.7 Financial Statements
	 	 	52	 
	4.8 Full Disclosure
	 	 	53	 
	4.9 Subsidiaries
	 	 	53	 
	4.10
Guarantees, Indebtedness, etc.
	 	 	53	 
	4.11
Government Regulations, etc.
	 	 	54	 
	4.12 Business Interruptions
	 	 	55	 
	4.13 Names
	 	 	55	 
	4.14 Other Associations
	 	 	56	 
	4.15 Environmental Matters
	 	 	56	 
	4.16 Regulation O
	 	 	58	 
	4.17 Capital Stock
	 	 	58	 
	4.18 Solvency
	 	 	58	 
	4.19 Interrelatedness of the Borrower and the Guarantors
	 	 	59	 
	4.20 Anti-Terrorism Laws
	 	 	59	 
	 
	 	 	 	 
	SECTION 5. AFFIRMATIVE COVENANTS
	 	 	60	 
	 
	 	 	 	 
	5.1 Payment of Taxes and Claims
	 	 	60	 
	5.2 Maintenance of Properties and Corporate Existence
	 	 	60	 
	5.3 Litigation
	 	 	61	 
	5.4 Taxes
	 	 	61	 
	5.5 Employee Benefit Plans
	 	 	62	 
	5.6 Financial and Business Information
	 	 	62	 
	5.7 Officers’ Certificates
	 	 	64	 
	5.8 Inspection
	 	 	64	 
	5.9 Tax Returns and Reports
	 	 	65	 
	5.10 Information to Participants and Assignees
	 	 	65	 
	5.11 Material Adverse Developments
	 	 	65	 
	5.12 Additional Parties; Release of Certain Guarantors
	 	 	65	 
	5.13 Performance of Obligations
	 	 	66	 
	5.14 Further Assurances
	 	 	67	 
	5.15 Evidence of Intercompany Indebtedness
	 	 	67	 
	5.16 Tax Shelter Regulations
	 	 	67	 
	 
	 	 	 	 
	SECTION 6. NEGATIVE COVENANTS
	 	 	67	 
	 
	 	 	 	 
	6.1 Mergers
	 	 	67	 
	6.2 Acquisitions
	 	 	68	 
	6.3 Liens and Encumbrances
	 	 	69	 
	6.4 Transactions With Affiliates or Subsidiaries
	 	 	70	 
	6.5 Guarantees
	 	 	70	 
	6.6 Dividends and Redemptions
	 	 	71	 
	6.7 Loans and Investments
	 	 	71	 
	6.8 Amendment or Waivers of Certain Documents
	 	 	72	 






 


ii









 





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	6.9 Sale and Lease-Backs
	 	 	73	 
	6.10 Business Conducted
	 	 	73	 
	6.11 Indebtedness
	 	 	73	 
	6.12 Restrictions on Fundamental Changes; Asset Sales
	 	 	74	 
	6.13 Agreements Regarding Dividends
	 	 	74	 
	6.14 Miscellaneous Covenants
	 	 	75	 
	 
	 	 	 	 
	SECTION 7. FINANCIAL COVENANTS
	 	 	75	 
	 
	 	 	 	 
	7.1 Fixed Charge Coverage Ratio
	 	 	75	 
	7.2 Leverage Ratio
	 	 	76	 
	7.3 Consolidated Capital Expenditures
	 	 	76	 
	 
	 	 	 	 
	SECTION 8. DEFAULT
	 	 	76	 
	 
	 	 	 	 
	8.1 Events of Default
	 	 	76	 
	8.2 Rights and Remedies on Default
	 	 	79	 
	8.3 Nature of Remedies
	 	 	80	 
	8.4 Set-Off
	 	 	80	 
	 
	 	 	 	 
	SECTION 9. THE ADMINISTRATIVE AGENT
	 	 	81	 
	 
	 	 	 	 
	9.1 Appointment and Authorization
	 	 	81	 
	9.2 General Immunity
	 	 	81	 
	9.3 Consultation with Counsel
	 	 	81	 
	9.4 Documents
	 	 	81	 
	9.5 Rights as a Lender
	 	 	81	 
	9.6 Responsibility of the Administrative Agent
	 	 	82	 
	9.7 Collections and Disbursements
	 	 	82	 
	9.8 Indemnification
	 	 	84	 
	9.9 Expenses
	 	 	84	 
	9.10 No Reliance
	 	 	84	 
	9.11 Reporting
	 	 	85	 
	9.12 Resignation of the Administrative Agent
	 	 	85	 
	9.13 Action on Instructions of Lenders
	 	 	85	 
	9.14 Several Obligations
	 	 	85	 
	9.15 Amendments
	 	 	85	 
	9.16 Notice of Default
	 	 	87	 
	 
	 	 	 	 
	SECTION 10. MISCELLANEOUS
	 	 	87	 
	 
	 	 	 	 
	10.1 GOVERNING LAW
	 	 	87	 
	10.2 Integrated Agreement
	 	 	87	 
	10.3 Omission or Delay Not Waiver
	 	 	87	 
	10.4 Time
	 	 	87	 






 


iii









 





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	10.5 Expenses of the Administrative Agent and Lenders
	 	 	88	 
	10.6 Brokerage
	 	 	88	 
	10.7 Notices; Lending Offices
	 	 	88	 
	10.8 Headings
	 	 	90	 
	10.9 Survival
	 	 	90	 
	10.10 Successors and Assigns
	 	 	90	 
	10.11 Counterparts
	 	 	93	 
	10.12 Modification
	 	 	93	 
	10.13 Signatories
	 	 	93	 
	10.14 Third Parties
	 	 	93	 
	10.15 Indemnification
	 	 	94	 
	10.16 Discharge of Taxes, the Borrower’s Obligations, Etc.
	 	 	95	 
	10.17 Withholding and Other Tax Liabilities
	 	 	95	 
	10.18 Submission To Jurisdiction; Waivers
	 	 	96	 
	10.19 Waivers
	 	 	96	 
	10.20 Severability
	 	 	97	 
	10.21 Independence of Representations, Warranties and Covenants
	 	 	97	 
	10.22 Obligations Several; Independent Nature of Lenders’ Rights
	 	 	98	 
	10.23 Prior Understandings
	 	 	98	 
	10.24 Confidentiality
	 	 	98	 






	 	 	 	 	 
	ANNEXES

	 
	 	 	 	 
	Annex I

	 	—
	 	Lenders, Pro Rata Shares, Pro Rata Percentages
	Annex II

	 	—
	 	Applicable Margins
	 
	 	 	 	 
	EXHIBITS

	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Guarantee
	Exhibit B-1

	 	—
	 	Form of Revolving Credit Note
	Exhibit B-2

	 	—
	 	Form of Swing Line Note
	Exhibit C

	 	—
	 	Form of Notice of Borrowing
	Exhibit D

	 	—
	 	Form of Quarterly Compliance Certificate
	Exhibit E

	 	—
	 	Form of Certificate regarding Permitted Acquisitions
	Exhibit F

	 	—
	 	Form of Assignment Agreement
	Exhibit G

	 	—
	 	Form of Commitment and Acceptance
	Exhibit H

	 	—
	 	Form of New Lender Joinder






 


iv









 





	 	 	 	 	 
	SCHEDULES

	 
	 	 	 	 
	Schedule 1.1(a)

	 	—
	 	Existing Letters of Credit
	Schedule 1.1(b)

	 	—
	 	Financial Statements
	Schedule 3.1(h)

	 	—
	 	Material Environmental Investigations, Studies,
Audits, Etc.
	Schedule 4.2

	 	—
	 	Places of Business
	Schedule 4.3

	 	—
	 	Judgments, Proceedings, Litigation and Orders
	Schedule 4.4

	 	—
	 	Existing Liens and Claims
	Schedule 4.9

	 	—
	 	Subsidiaries and Affiliates and Jurisdictions of
Incorporation
	Schedule 4.10

	 	—
	 	Existing Guarantees, Investments and Borrowings
	Schedule 4.11(c)

	 	—
	 	ERISA Matters
	Schedule 4.12

	 	—
	 	Business Interruptions
	Schedule 4.13(a)

	 	—
	 	Schedule of Names
	Schedule 4.13(b)

	 	—
	 	Trademarks, Patents and Copyrights
	Schedule 4.14

	 	—
	 	Other Associations
	Schedule 4.15

	 	—
	 	Environmental Matters
	Schedule 4.17

	 	—
	 	Capital Stock
	Schedule 6.12

	 	—
	 	Asset Sales







 


v









 







SECOND AMENDED AND RESTATED LOAN AGREEMENT




THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT (this “Agreement”) is dated as of November 21,
2008 by and among CSS INDUSTRIES, INC., a Delaware corporation (the “Borrower”), the lending
institutions listed in Annex I attached hereto and incorporated herein by reference (each a
“Lender” and collectively, the “Lenders”), and PNC BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”).



BACKGROUND




A. The Borrower, the lenders from time to time party thereto, the Administrative Agent, PNC
Capital Markets LLC, as Lead Arranger and Citizens Bank of Pennsylvania, Bank of America, N.A. (as
successor to Fleet National Bank) and Wachovia Bank, National Association, as Managing Agents,
entered into that certain Amended and Restated Loan Agreement dated as of April 23, 2004 (as
amended and modified prior to the date hereof, the “Existing Loan Agreement”).



B. The Borrower has requested and certain of the Lenders under the Existing Agreement and the
additional Lenders and other parties hereto have agreed to modify and amend the credit facilities
established under the Existing Loan Agreement and to amend and restate the Existing Loan Agreement
on the terms and conditions hereinafter set forth.



NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree that, upon the
Effective Date, the Existing Loan Agreement shall be and hereby is amended and restated to read in
full as follows:



SECTION 1. DEFINITIONS AND INTERPRETATION.



1.1 Terms Defined. As used in this Agreement, the following terms have the following
respective meanings:



“Accounts”: All of the “accounts” (as that term is defined in the Uniform Commercial
Code as in effect from time to time in the Commonwealth of Pennsylvania) of the Borrower and each
of its Subsidiaries, whether now existing or hereafter arising.



“Accounts Receivable Securitization”: The trade receivables purchase facility between
the Borrower and Market Street Funding, LLC (f/k/a Market Street Funding Corporation) on terms
pursuant to which the Borrower and certain of its Subsidiaries will sell or grant a security
interest in its accounts receivable or an undivided interest therein, provided, that the
aggregate Capital (as such term is defined in the Accounts Receivable Securitization Documents)
shall not exceed $100,000,000.


 


1









 





“Accounts Receivable Securitization Documents”: The Receivable Purchase Agreement
among the Borrower, the Bankruptcy Remote Subsidiary, Market Street Funding Corporation and PNC and
any other documents executed in connection with the Accounts Receivable Securitization as modified,
amended or restated from time to time.



“Acquisition EBITDA”: Consolidated EBITDA for any applicable prior period
attributable to any Person or Property which is the subject of a Permitted Acquisition, to the
extent: (a) all such Property acquired in any such Permitted Acquisition is owned by either (i) a
non-Material Subsidiary or (ii) the Borrower, a Guarantor, an Additional Party in compliance with
Section 5.12(b) hereof, or a former Guarantor in compliance with Section 5.12(c) hereof, and (b)
that any Person acquired in any such Permitted Acquisition is either (i) a non-Material Subsidiary
or (ii) a Material Subsidiary that executes a joinder to this Agreement or a Guarantee or is an
Additional Party in compliance with Section 5.12(b) hereof.



“Additional Pledge Agreement”: The Pledge Agreement dated as of the date hereof, made
by the Borrower, Cleo, Inc. and Berwick Offray LLC, in favor of PNC Bank, National Association, as
collateral agent for the lenders and other financial institutions parties to this Agreement and the
Noteholders, as the same may be modified, amended, supplemented or restated from time to time.



“Adjusted EBITDA”: For the Borrower, for any period, the sum of (i) Consolidated
EBITDA plus (ii) pro forma adjustments for the relevant periods as appropriate to reflect
the Acquisition EBITDA attributable to all Permitted Acquisitions as such Acquisition EBITDA may be
further adjusted in accordance with the following sentence. Notwithstanding anything in this
Agreement to the contrary (i) for any Permitted Acquisition with Consolidated EBITDA in excess of
10% of Consolidated EBITDA of the Borrower on a consolidated basis prior to such Permitted
Acquisition, Acquisition EBITDA shall be equal to $0 unless (a) there are delivered to the
Administrative Agent either audited financial statements of the acquired Person or Property to
which the Acquisition EBITDA is attributable for the relevant periods, or financial statements of
such Person or Property for the relevant periods validated by a third party satisfactory to the
Administrative Agent, and (b) any adjustments to such Acquisition EBITDA are approved by the
Majority Lenders, and (ii) for any Permitted Acquisition not subject to clause (i) above, the
determination of and substantiation for the amount of and any adjustments to Acquisition EBITDA
must be satisfactory to the Administrative Agent in its reasonable discretion.



“Adjusted LIBO Rate”: As applied to a LIBOR Based Rate Advance, for any LIBOR
Interest Period, the rate per annum (rounded upwards, if necessary to the next 1/100 of 1%)
determined pursuant to the following formula:



	 	 	 	 	 	 	 	 	 
	 

	 	Adjusted LIBO Rate
	 	=
	 	LIBO Rate
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(1 - Reserve Percentage)	 	 





 


2









 





For purposes hereof, “LIBO Rate”, with respect to a LIBOR Interest Period, shall mean the interest
rate per annum which appears on the Bloomberg Page BBAM1 (or such other substitute Bloomberg page
that displays rates at which Dollar deposits are offered by leading banks in the London interbank
deposit market), or the rate which is quoted by another source selected by the Agent which is
approved by the British Lenders’ Association, as an authorized information vendor for the purpose
of displaying rates at which Dollar deposits are offered by leading banks in the London interbank
deposit market (an “Alternate Source”), in either case, at approximately 11:00 a.m., London time,
two (2) Business Days prior to the first day of such LIBOR Interest Period for an amount comparable
to such Advance and having a borrowing date and a maturity comparable to such LIBOR Interest
Period; provided, however, if there shall at any time, for any reason, no longer
exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable
replacement rate determined by the Agent at such time (which determination shall be conclusive
absent manifest error), as determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error).



The LIBO Rate shall be adjusted with respect to any LIBOR Based Rate Advance in Dollars outstanding
on the effective date of any change in the Reserve Percentage as of such effective date. The
Administrative Agent shall give prompt notice to the Borrower of the LIBO Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive absent manifest error.



“Adjusted Pro Rata Percentage”: With respect to any non-Defaulting Lender, the
quotient (expressed as a percentage) of the Pro Rata Share of such non-Defaulting Lender divided by
the aggregate of the Pro Rata Shares of all non-Defaulting Lenders.



“Advance(s)”: Any monies advanced or credit extended to the Borrower by any Lender
under the Revolving Credit, including without limitation, cash Advances, Swing Line Advances and
the issuance by Fronting Lender of Letters of Credit.



“Affected Lender”: As defined in Section 2.15.



“Affiliate”: With respect to any Person (the “Specified Person”), (a) any Person
which directly or indirectly controls, or is controlled by, or is under common control with, the
Specified Person, and (b) any director or officer (or, in the case of a Person which is not a
corporation, any individual having analogous powers) of the Specified Person or of a Person who is
an Affiliate of the Specified Person within the meaning of the preceding clause (a); provided,
however, that no Lender nor any Affiliate of any Lender shall be deemed to be an Affiliate of the
Borrower or any of its Subsidiaries. For purposes of the preceding sentence, “control” of a Person
shall mean (i) the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the ownership of voting
securities, by contract or otherwise, and (ii) in any case shall include direct or indirect
ownership (beneficially or of record) of, or direct or indirect power to vote, 25% or more of the
outstanding shares of any class of Capital Stock of such Person (or in the case of a Person that is
not a corporation, 25%. or more of any class of equity interest).


 


3









 





“Alternate Base Rate”: For any day, a fluctuating per annum rate of interest equal
to the highest of (i) the Prime Rate, (ii) the Federal Funds Open Rate plus one half of one (0.5%)
percent, and (iii) the Daily LIBOR Rate plus one and one quarter percent (1.25%). The calculation
and determination of the rates described in subsections (i), (ii) and (iii) above shall be made
daily by the Administrative Agent and such determination shall, absent manifest error, be final,
conclusive and binding upon all parties hereto. Changes in the Alternate Base Rate shall become
effective on the same day as the Administrative Agent changes its Prime Rate, a change occurs in
the Federal Funds Open Rate or there is a change in the Daily LIBOR Rate, depending upon which rate
is applicable on that day to the determination of the Alternate Base Rate.



“Alternate Base Rate Advance”: Any Advance on which interest accrues at the Alternate
Base Rate.



“Anti-Terrorism Laws”: Any law relating to terrorism or money laundering, including
Executive Order No. 13224 and the USA Patriot Act.



“Applicable Available Commitment Fee Percentage”: The Applicable Commitment Fee
Percentage determined by reference to the table set forth on Annex II based upon the Borrower’s
compliance with the Pricing Leverage Ratio at the levels set forth in such table as such Pricing
Leverage Ratio is shown on the Quarterly Compliance Certificate delivered in accordance with
Section 5.7. The Applicable Commitment Fee Percentage shall be applied on:



(a) the first day of the calendar month immediately following the calendar month in which the
Administrative Agent receives the Quarterly Compliance Certificate delivered in respect of the
first three fiscal quarters in any fiscal year, or



(b) with respect to the Quarterly Compliance Certificate delivered in respect of the last
fiscal quarter in any fiscal year, the earlier to occur of (i) the first day of the calendar month
immediately following the calendar month in which the Administrative Agent shall have received from
the Borrower such Quarterly Compliance Certificate or (ii) the first day of the calendar month
immediately following the calendar month in which the date 75 days after the end of the fiscal year
of the Borrower most recently ended occurs;



provided, however, that no such changes shall occur (x) until the Borrower has
delivered its Quarterly Compliance Certificate for the fiscal quarter ending March 31, 2009 and (y)
unless no Default or Event of Default shall have occurred and be continuing. Upon the occurrence
and during the continuance of a Default or an Event of Default, the Applicable Available Commitment
Fee Percentage may, in the discretion of the Administrative Agent or at the direction of the
Majority Lenders, be increased (and shall automatically be so increased if the Default or Event of
Default is a payment Default) to the margin described as Level III on Annex II (in addition to
institution of the Default Rate, if applicable) and shall be applied retroactively to the date of
the occurrence of such Default or Event of Default (or in the event of a Default in respect of the
obligation to deliver a Quarterly Compliance Certificate for the last fiscal quarter in each fiscal
year, the first day of the calendar month immediately following the
calendar month in which the date 75 days after the end of the last fiscal year of the Borrower
occurs). The Administrative Agent, Lenders and Borrower acknowledge that, on the date hereof, the
Applicable Available Commitment Fee Percentage is the margin described as Level I on Annex II,
which Level shall remain applicable at all times through the first day of the calendar month
immediately following the calendar month in which the Administrative Agent shall have received from
the Borrower the Quarterly Compliance Certificate for the quarter ended March 31, 2009.


 


4









 





“Applicable Base Rate Margin”: As set forth in Annex II.



“Applicable LIBO Rate Margin”: As set forth in Annex II.



“Applicable Margins”: The respective Applicable Base Rate Margin or Applicable LIBO
Rate Margin determined by reference to the table set forth on Annex II based upon the Borrower’s
compliance with the Pricing Leverage Ratio at the levels set forth in such table as such Pricing
Leverage Ratio is shown on the Quarterly Compliance Certificate delivered in accordance with
Section 5.7. The Applicable Margin shall be applied on:



(a) the first day of the calendar month immediately following the calendar month in which the
Administrative Agent receives the Quarterly Compliance Certificate delivered in respect of the
first three fiscal quarters in any fiscal year or,



(b) with respect to the Quarterly Compliance Certificate delivered in respect of the last
fiscal quarter in any fiscal year, the earlier to occur of (i) the first day of the calendar month
immediately following the calendar month in which the Administrative Agent shall have received from
the Borrower such Quarterly Compliance Certificate or (ii) the first day of the calendar month
immediately following the calendar month in which the date 75 days after the end of the fiscal year
of the Borrower most recently ended occurs;



provided, however, that no such changes shall occur (x) until the Borrower has delivered
its Quarterly Compliance Certificate for the fiscal quarter ending March 31, 2009 and (y) unless no
Default or Event of Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of a Default or an Event of Default, the Applicable Margin may, in the discretion
of the Administrative Agent or at the direction of the Majority Lenders, be increased (and shall
automatically be so increased if the Default or Event of Default is a payment default) to the
margins described as Level III on Annex II (in addition to institution of the Default Rate, if
applicable) and shall be applied retroactively to the date of the occurrence of such Default or
Event of Default (or in the event of a Default in respect of the obligation to deliver a Quarterly
Compliance Certificate for the last fiscal quarter in each fiscal year, the first day of the
calendar month immediately following the calendar month in which the date 75 days after the end of
the latest fiscal year of the Borrower occurs). The Administrative Agent, Lenders and Borrower
acknowledge that, on the date hereof, the Applicable Margin is the margin described as Level I on
Annex II above, which Level shall remain applicable at all times through the first day of the
calendar month immediately following the calendar month in which the Administrative Agent shall
have received from the Borrower the Quarterly Compliance Certificate for the quarter
ended March 31, 2009 (unless a Default or an Event of Default earlier occurs in which case the
Applicable Margin shall be adjusted as set forth above).


 


5









 





“Asset Sale”: The sale, transfer or other disposition by the Borrower to any Person
other than a Restricted Subsidiary or by any Subsidiary of the Borrower to any Person other than
the Borrower or a Restricted Subsidiary of (a) any of the existing or future Capital Stock (other
than an original issue of the Capital Stock of a Person where the issued Capital Stock is issued to
the Borrower or a Restricted Subsidiary) of any Subsidiary of the Borrower or (b) any other
Property, now owned or hereafter acquired, of any nature whatsoever in any transaction or series of
related transactions (including any or all assets and business of any division or line of business
and further including intangible assets) of the Borrower or any of its Subsidiaries, excluding
sales, transfers or other dispositions of inventory or other Property in the ordinary course of
business of the Borrower or any of its Subsidiaries or the trade-in or replacement of assets in the
ordinary course of business of the Borrower or any of its Subsidiaries.



“Authorized Officer”: Any of the President, Chief Financial Officer, General Counsel
and Treasurer of the Borrower.



“Available Commitment”: $110,000,000, as the same may be increased or reduced
pursuant to Section 2.3.



“Available Commitment Fee”: As defined in Section 2.6(a).



“Average Consolidated Funded Debt”: For the Borrower, on any date, the average daily
Consolidated Funded Debt for the four consecutive fiscal quarters ending on such date.



“Bankruptcy Remote Subsidiary”: Means CSS Funding, LLC.



“Blocked Person”: As defined in Section 4.20(ii).



“Borrowing”: The making, pursuant to a Notice of Borrowing and the terms of this
Agreement, of a cash Advance to the Borrower from all of the Lenders on a pro rata basis on a given
date (or resulting from conversions on a given date) having, in the case of LIBOR Based Rate
Advances, the same LIBOR Interest Periods.



“Business Day”: A day other than Saturday or Sunday when banks are generally open for
business in Philadelphia, Pennsylvania, provided, that when used in connection with a LIBOR
Based Rate Advance, the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.



“Capital Stock”: Any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants or options to purchase any of the
foregoing. Unless otherwise qualified, references to Capital Stock herein shall refer to
Capital Stock of the Borrower.


 


6









 





“Change of Control”: If (a) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), excluding Jack Farber and/or any member(s) of his
immediately family, and/or any trust under which Jack Farber and/or any member(s) of his immediate
family hold the legal and equitable interests, is or becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have
“beneficial ownership” of all securities that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or indirectly, of
more than 50% of the total voting power of the issued and outstanding voting Capital Stock of the
Borrower normally entitled to vote in the election of directors of the Borrower or (b) during any
consecutive two-year period, individuals who at the beginning of such period constituted the Board
of Directors of Borrower (together with any new directors whose election to the Board of Directors
or whose nomination for election by the stockholders of the Borrower was approved by a vote of a
majority of the directors then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office.



“Closing”: As defined in Section 3.2.



“Code”: As defined in Section 2.12(b).



“Commitment and Acceptance”: A Commitment and Acceptance among a Lender, the
Administrative Agent and the Borrower substantially in the form of Exhibit G, as amended,
supplemented or otherwise modified from time to time.



“Consolidated Amortization Expense”: For any Person, for any period, the consolidated
amortization expense of such Person for such period, determined on a consolidated basis for such
Person and its consolidated Subsidiaries.



“Consolidated Capital Expenditures”: For any Person, for any period, the aggregate
gross increase during that period in the property, plant or equipment reflected in the consolidated
balance sheet of such Person and its consolidated Subsidiaries, but excluding expenditures made in
connection with the replacement, substitution or restoration of assets (a) to the extent financed
from insurance proceeds paid on account of the loss of or damage to the assets being replaced or
restored or (b) with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced; provided, however, that “Consolidated
Capital Expenditures” shall in any event exclude the purchase price paid in connection with
Permitted Acquisitions to the extent allocable to property, plant and equipment.



“Consolidated Depreciation Expense”: For any Person, for any period, the consolidated
depreciation expense of such Person for such period, determined on a consolidated basis for such
Person and its consolidated Subsidiaries.


 


7









 





“Consolidated EBITDA”: For any Person, for any period, the sum of the amounts for
such period of (i) Consolidated Net Income, plus (ii) Consolidated Tax Expense,
plus (iii) Consolidated Interest Expense, plus (iv) Consolidated Amortization
Expense, plus (v) Consolidated Depreciation Expense, plus (vi) all non-cash charges
resulting from the application of Financial Accounting Standard No. 142 plus (vii) all
Consolidated Stock Compensation Expense, all as determined on a consolidated basis for such Person
and its consolidated Subsidiaries.



“Consolidated Funded Debt”: For any Person, on any date, without duplication, the
aggregate outstanding principal amount of (i) Indebtedness recorded on a balance sheet of such
Person prepared in accordance with GAAP, (ii) the items described in clause (c) of the definition
of “Indebtedness” whether or not recorded on a balance sheet of such Person and (iii) all Capital
(as that term is defined in the Accounts Receivable Securitization Documents) under the Accounts
Receivable Securitization; in each case of such Person and its consolidated Subsidiaries, all
determined on a consolidated basis after elimination of all intercompany items.



“Consolidated Interest Expense”: For any Person, for any period, the total interest
expense of such Person and its consolidated Subsidiaries, as would be shown on an income statement
prepared in accordance with GAAP, and in any event including interest in respect of the Revolving
Credit and Discount (as that term is defined in the Accounts Receivable Securitization Documents)
payable in respect of the Accounts Receivable Securitization whether or not such interest is shown
on such income statement.



“Consolidated Net Income”: For any Person, for any period, the net income (or loss)
of such Person and its Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined on a consolidated basis for such Person and its consolidated
Subsidiaries; provided, however, that there shall be excluded (a) the income (or
loss) of any other Person (other than Subsidiaries of such Person) in which any third Person (other
than such Person or any of its Subsidiaries) has a joint interest, except to the extent of the
amount of cash dividends or other cash distributions actually paid to such Person or any of its
Subsidiaries by such other Person during such period (subject to clause (c) below), (b) the income
(or loss) of any other Person accrued prior to the date it becomes a consolidated Subsidiary of
such Person or is merged into or consolidated with such Person or any of its consolidated
Subsidiaries or such other Person’s assets are acquired by such Person or any of its consolidated
Subsidiaries, except (with respect to a Subsidiary previously accounted for on the equity basis of
accounting) to the extent of the income (or loss) actually paid to such Person or any of its
Subsidiaries by such other Person relating to such period in cash, and (c) the income of any
consolidated Subsidiary of such Person to the extent that the declaration or payment of dividends
or similar distributions by that consolidated Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that consolidated Subsidiary, except
to the extent of the cash dividends or cash distributions actually paid to such Person or any of
its Subsidiaries by such other Person during such period; provided, however, that income generated
in connection with a waiver of any of the provisions hereof shall not be included for any purposes
hereof.


 


8









 





“Consolidated Stock Compensation Expense”: For any Person, for any period, the
consolidated non-cash charges resulting from the application of Financial Accounting Standard No.
123R for such period, determined on a consolidated basis for such Person and its consolidated
Subsidiaries.



“Consolidated Tax Expense”: For any Person, for any period, the consolidated income
tax expense and/or benefit of such Person for such period, determined on a consolidated basis for
such Person and its consolidated Subsidiaries less any tax expense associated with gains on
sales (excluding sales in the ordinary course of business) of fixed assets and other extraordinary
gains to the extent such gains are included in Consolidated Net Income.



“Daily LIBOR Rate”: For any day, the rate per annum determined by the Administrative
Agent by dividing (a) the Published LIBOR Rate by (b) a number equal to 1.00 minus the percentage
prescribed by the Board of Governors of the Federal Reserve System (or any successor or any other
banking authority) to which a Lender (or any Affiliate of such Lender if applicable pursuant to
Section 2.9(e)) is subject, including any board or governmental or administrative agency of the
United States or any other jurisdiction to which a Lender (or any Affiliate of such Lender if
applicable pursuant to Section 2.9(e)) is subject, for determining the maximum reserve requirement
(including without limitation any basic, supplemental, marginal or emergency reserves) for (i)
deposits of United States dollars or (ii) Eurocurrency Liabilities as defined in Regulation D,
provided, that if such day is not a Business Day, the Daily LIBOR Rate for such day shall
be the Daily LIBOR Rate on the immediately preceding Business Day.



“Default”: Any event, act, condition or occurrence, which with notice, or lapse of
time or both, would constitute an Event of Default hereunder.



“Defaulting Lender” means any Lender, as determined by the Administrative Agent, that
has (a) failed to fund any portion of its Advances or participations in Letters of Credit or Swing
Line Loans within three Business Days of the date required to be funded by it hereunder, (b)
notified the Borrower, the Administrative Agent, the Fronting Lender, the Swing Line Lender or any
Lender in writing that it 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 does not intend to comply with its
funding obligations under this Agreement or under other agreements in which it commits to extend
credit, (c) failed, within three Business Days after request by the Administrative Agent, to
confirm that it will comply with the terms of this Agreement relating to its obligations to fund
prospective Advances, including any participations in then outstanding Letters of Credit and Swing
Line Advances, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within three Business Days of the date when due,
unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent
company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken
any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment or has a parent company that has become the subject of a bankruptcy or
insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in furtherance of,
or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.


 


9









 





“EBITDA”: Shall have the meaning ascribed to the term “Consolidated EBITDA” as set
forth herein except the calculation of EBITDA (including the calculation of each of its components)
shall be done on an unconsolidated basis.



“Effective Date”: As defined in Section 3.2.



“Employee Benefit Plan”: As defined in Section 4.11(c).



“Engagement Letter”: As defined in Section 10.23.



“Environmental Authorizations”: As defined in Section 4.15(a).



“Environmental Laws” The common law and all applicable Federal, state, local and
foreign laws or regulations, codes, orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder, now or hereafter in effect, relating to pollution or protection of
the environment or to health or safety as either relates to any Hazardous Materials, including,
without limitation, laws relating to (a) emissions, discharges, releases or threatened releases of
Hazardous Materials into the environment (including ambient air, indoor air, surface water, ground
water, land surface or subsurface strata), (b) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport, shipping or handling of Hazardous Materials,
and (c) underground and above-ground storage tanks, and related piping, and emissions, discharges,
releases or threatened releases therefrom.



“ERISA”: The Employee Retirement Income Security Act of 1972, as the same may be
amended, from time to time.



“Event of Default”: As defined in Section 8.1.



“Exchange Act”: The Securities Exchange Act of 1934, as amended, together with all
rules and regulations promulgated in connection therewith.



“Executive Order No. 13224”: Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended,
amended or replaced.



“Existing Letters of Credit”: Those Letters of Credit described on Schedule 1.1(a)
attached hereto and incorporated herein by reference.



“Existing Loan Agreement”: As defined in the Background hereto.



“Existing Pledge Agreement”: The Pledge Agreement dated as of October 27, 2004 made
by the Borrower and Paper Magic Group, Inc. in favor of PNC Bank, National Association, as
collateral agent for the lenders and other financial institutions parties to this
Agreement and the Noteholders, as the same may be modified, amended, supplemented or restated
from time to time.


 


10









 





“Existing Debt of the Borrower”: The Indebtedness of the Borrower and its
Subsidiaries as set forth on Schedule 4.10 attached hereto.



“Expenses”: As defined in Section 10.5.



“Federal Funds Effective Rate”: For any day, the rate per annum (based on a year of
360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the
Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of
the rates on overnight federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement;
provided, that if such Federal Reserve Bank (or its successor) does not announce such rate
on any day, the “Federal Funds Effective Rate” for such all day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced.



“Federal Funds Open Rate”: For any day shall mean the rate per annum (based on a year
of 360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP
North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day
opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate),
or as set forth on such other recognized electronic source used for the purpose of displaying such
rate as selected by the Administrative Agent (an “Alternate Federal Funds Source”) (or if such rate
for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any
Alternate Federal Funds Source, or if there shall at any time, for any reason, no longer exist a
Bloomberg Screen BTMM (or any substitute screen) or any Alternate Federal Funds Source, a
comparable replacement rate determined by the Administrative Agent at such time (which
determination shall be conclusive absent manifest error); provided, that if such day is not
a Business Day, the Federal Funds Open Rate for such day shall be the Federal Funds Open Rate on
the immediately preceding Business Day. If and when the Federal Funds Open Rate changes, the rate
of interest with respect to any Advance to which the Federal Funds Open Rate applies will change
automatically without notice to the Borrower, effective on the date of any such change.



“Financial Statements”: The financial statements of the Borrower previously furnished
to the Administrative Agent, as more fully described on Schedule 1.1(b) attached hereto and
incorporated herein by reference.



“Fixed Charge Coverage Ratio”: For any period, the ratio of (a) the Borrower’s
Consolidated EBITDA for such period to (b) the sum of the Borrower’s (i) current portion of
principal on all long-term Indebtedness (excluding the Revolving Credit) determined at the
beginning of such period, plus (ii) Consolidated Interest Expense (including interest in
respect of the Revolving Credit and discount payable in respect of the Accounts Receivable
Securitization)
for such period, plus (iii) Consolidated Tax Expense for such period, plus
(iv) cash dividends paid by the Borrower to the holders of its Capital Stock during such period.


 


11









 





“Fronting Fee”: As defined in Section 2.6(b)(ii).



“Fronting Lender”: PNC (or an Affiliate of PNC, if applicable), as the issuer of
Letters of Credit under this Agreement.



“GAAP”: Generally accepted accounting principles applied in a manner consistent with
the most recent audited financial statements of the Borrower prepared as of March 31, 2008 and
furnished to the Administrative Agent.



“Governmental Authority”: Any government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator (to the extent binding on the Borrower or any of its
Subsidiaries), in each case whether foreign or domestic.



“Guarantee(s)”: Guarantees substantially in the form of Exhibit A attached hereto and
incorporated herein by reference.



“Guarantors”: Each of Paper Magic Group, Inc., a Pennsylvania corporation, Berwick
Delaware, Inc., a Delaware corporation, Berwick Offray LLC, a Pennsylvania limited liability
company, Cleo Inc., a Tennessee corporation, Philadelphia Industries, Inc., a Delaware corporation,
LLM Holdings, Inc., a Delaware corporation, The Paper Magic Group, Inc., a Delaware corporation,
Lion Ribbon Company, Inc., a Delaware corporation and C.R. Gibson, LLC, a Delaware limited
liability company, and each Person which executes a Guarantee after the Effective Date.



“Hazardous Materials”: Any pollutant, contaminant, hazardous or toxic substance,
hazardous material, hazardous waste, hazardous constituent, asbestos or asbestos-containing
material, petroleum, including crude oil and any fraction thereof, or other chemicals, substances
or materials subject to regulation under any Environmental Law.



“Hedge Agreement”: Any contract or agreement providing for any rate swap transaction,
basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap, currency swap or any other similar transaction entered into to protect
against the risk of fluctuation in interest rates or foreign exchange rates.


 


12









 





“Indebtedness”: With respect to any Person, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) the deferred purchase price of assets or services which in
accordance with GAAP would be shown as a liability on the balance sheet of such Person, (c) the
face amount of all outstanding letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (d) all Indebtedness of a second
Person secured by any Lien on any Property owned by such first Person, whether or not such
Indebtedness has been assumed by such first Person, limited to the fair market value of the
Property subject to such Lien, (e) all capitalized lease obligations of such Person, (f) all
obligations of such Person to pay a specified purchase price for goods or services whether or not
delivered or accepted, i.e., take-or-pay and similar obligations, (g) all obligations of such
Person under interest rate agreements, (h) without duplication, all contingent obligations of such
Person required to be reflected as a liability on the balance sheet of such Person prepared in
accordance with GAAP, (i) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments required to be reflected as a liability on the balance sheet of such
Person prepared in accordance with GAAP, (j) all obligations of such Person upon which interest
charges are customarily paid, and (k) current obligations of such Person to purchase, redeem,
retire, defease or otherwise acquire for value any Capital Stock of such Person (with redeemable
preferred stock being valued at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends); provided, however, that Indebtedness shall not include trade
payables, accrued expenses, accrued dividends, deferred compensation, accrued income taxes,
deferred income taxes and minority interests in Subsidiaries of such Person.



“Intercompany Notes”: As defined in Section 5.15.



“Intercreditor Agreement”: The Amended and Restated Intercreditor and Collateral
Agency Agreement dated as of October 27, 2004 between the Administrative Agent, the Swing Line
Lender, the Fronting Lender, the Lenders and the Noteholders, as the same has been and may
hereafter be modified, amended, supplemented or restated.



“Interest Rate Determination Date”: With respect to a LIBOR Based Rate Advance, the
date which is two (2) Business Days prior to the commencement of the LIBOR Interest Period for such
Borrowing.



“Inventory”: All of the “inventory” (as that term is defined in of the Uniform
Commercial Code as in effect from time to time in the Commonwealth of Pennsylvania) of the Borrower
and its Subsidiaries, whether now existing or hereinafter acquired or created.



“Investments”: Investments of any Person shall mean (i) any direct or indirect
purchase or other acquisition of any Capital Stock, evidence of Indebtedness or other security
issued by any other Person, (ii) any loan, advance (other than advance to employees for travel
expenses, drawing accounts and similar expenditures extended in the ordinary course and consistent
with past practice) or extension of credit (other than accounts receivable created in the ordinary
course) to, or contribution to the capital of any other Person, including any guarantee or
Indebtedness of any other Person and any joint venture, (iii) any commitment or option to make an
investment if, in the case of an option, the consideration therefor exceeds $1,000,000 and (iv) any
capital contribution to any other Person; and any of the foregoing shall be considered an
Investment whether such investment is acquired by purchase, exchange, issuance of stock or other
securities, merger, reorganization or any other method. Notwithstanding the foregoing,
non-speculative Hedge Agreements shall not be considered Investments.


 


13









 





“Knowledge”: Whenever used in this Agreement, the actual knowledge of any executive
officer of the Borrower or of the president of any of the Subsidiaries.



“L/C Commitment”: $20,000,000.



“L/C Fees”: As defined in Section 2.6(b)(i).



“Lender(s)”: The lending institutions listed on Annex I attached hereto and
incorporated herein by reference and any assignees thereof in accordance with Section 10.10 hereof.



“Letter of Credit or Letters of Credit”: (a) Standby letter or letters of credit, and
(b) commercial letter or letters of credit, in each case issued or to be issued by the Fronting
Lender for the account of the Borrower pursuant to Section 2.2 herein.



“Letter of Credit Coverage Requirement”: With respect to each Letter of Credit at any
time, 102% of the maximum amount available to be drawn thereunder at such time (determined without
regard to whether any conditions to drawing could be met at such time).



“Leverage Ratio”: As of the date of determination, the ratio of Consolidated Funded
Debt on such date to Adjusted EBITDA for the four consecutive fiscal quarter period ending on such
date.



“LIBOR Based Rate”: As defined in Section 2.5(b)(i).



“LIBOR Based Rate Advance”: Any Advance on which interest accrues at the LIBOR Based
Rate.



“LIBOR Interest Period”: As defined in Section 2.5(b)(ii).



“Lien”: Other than as expressly excluded in the next sentence, any interest in
Property securing an obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or contract, and including, but
not limited to, the security interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for security purposes. The
term “Lien” shall include without limitation, reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property other than Property which is leased by the Borrower or any of its
Subsidiaries or for which the Borrower or any of its Subsidiaries has an unexercised option to
purchase such Property and other than those which would not materially adversely interfere with the
Borrower’s or any of its Subsidiaries’ use of the Property and would not materially detract from
the value of the Property. For the purposes of this Agreement, the Borrower and each of its
Subsidiaries shall be deemed to be the owner of any Property which it has acquired or holds subject
to a conditional sale agreement or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes.


 


14









 





“Loan Documents”: This Agreement, the Revolving Credit Notes, the Swing Line Note,
the Guarantees, the Security Documents, the Intercreditor Agreement and all agreements, instruments
and documents executed and/or delivered in connection herewith or therewith, all as may be amended,
supplemented, replaced, restated or superseded from time to time.



“Losses”: Of any Person, the losses, liabilities, claims (including those based upon
negligence, strict or absolute liability and liability in tort), damages, expenses, obligations,
penalties, actions, judgments, Liens, penalties, fines, suits, costs or disbursements of any kind
or nature whatsoever (including reasonable fees and expenses of counsel in connection with any
Proceeding commenced or threatened, whether or not such Person shall be designated a party thereto)
at any time (including following the payment of the Obligations and/or the termination of the
Revolving Credit) incurred by, imposed on or asserted against such Person.



“Majority Lenders”: The Lenders holding Pro Rata Percentages aggregating more than
662/3
% of the total Revolving Credit.



“Mandatory Loan”: As defined in Section 2.4(b)(iii)(B).



“Material Adverse Effect”: With respect to the Borrower and its Subsidiaries, (a) any
material adverse effect (both before and after giving effect to the transactions contemplated by
this Agreement and the other Loan Documents) with respect to the business, assets, properties,
financial condition, stockholders’ equity, contingent liabilities, prospects, material agreements
or results of operations of the Borrower and its Subsidiaries, taken as one enterprise on a
consolidated basis, or (b) any fact or circumstance that, singly or in the aggregate with any other
fact or circumstance, has a reasonable likelihood of resulting in or leading to (i) a material
adverse effect hereunder or under any other Loan Document or the inability of the Lenders to
enforce in any material respect their rights purported to be granted hereunder or under any other
Loan Document, or (ii) a material adverse effect on the ability of the Borrower and its
Subsidiaries taken as a whole on a consolidated basis to effect (including hindering or unduly
delaying) the transactions contemplated by this Agreement and the other Loan Documents on the terms
contemplated hereby and thereby.



“Material Subsidiary”: As of the last day of the immediately preceding fiscal year of
the Borrower, any Subsidiary of the Borrower (other than CSS Funding LLC) which either (i) owns
five percent (5%) or more of the assets of the Borrower and its consolidated Subsidiaries or (ii)
for the immediately preceding fiscal year had net income representing 5% or more of the
Consolidated Net Income of the Borrower.



“Maturity Date”: November 20, 2011 as the same may be extended pursuant to Section
2.13.



“Moody’s”: Moody’s Investors Service, Inc.


 


15









 





“New Lender Joinder”: A New Lender Joinder among a proposed Lender, the
Administrative Agent and the Borrower substantially in the form of Exhibit H, as amended,
supplemented or otherwise modified from time to time.



“Noteholders”: The note purchasers from time to time parties to the Note Purchase
Agreement.



“Note Purchase Agreement”: The Note Purchase Agreement dated as of December 12, 2002
among the Borrower and the Noteholders, as the same has been and may hereafter be modified,
amended, supplemented or restated.



“Note Purchase Documents”: The Note Purchase Agreement, the notes issued pursuant to
the terms thereof and the Intercreditor Agreement.



“Notes”: The Revolving Credit Notes and the Swing Line Note.



“Notice of Borrowing”: As defined in Section 2.4(b)(ii).



“Obligations”: All existing and future liabilities and obligations of every kind or
nature at any time owing by the Borrower to any one or more of the Lenders, the Fronting Lender or
to the Administrative Agent, whether joint or several, related or unrelated, primary or secondary,
matured or contingent, due or to become due, and whether principal, interest, fees or Expenses,
including, without limitation, liabilities and obligations in respect of the Revolving Credit,
whether related to cash Advances or Letters of Credit (whether drawn or undrawn), and under Hedge
Agreements to which any Lender is a party.



“Offered Amount”: As defined in Section 2.3(b).



“Over-Limit Amount”: As defined in Section 2.3.



“Outstandings”: At any time, the sum of the (a) aggregate amount of all cash Advances
outstanding hereunder, and (b) face amount of all Letters of Credit and all outstanding
Reimbursement Obligations.



“Permitted Acquisitions”: As defined in Section 6.2.



“Permitted Liens”: As defined in Section 6.3.



“Person”: An individual, partnership, corporation, limited liability company, limited
liability partnership, trust, unincorporated association or organization, joint venture or any
other entity.



“PNC”: PNC Bank, National Association.


 


16









 





“Pricing Leverage Ratio”: As of the end of each fiscal quarter, the ratio of Average
Consolidated Funded Debt determined as of such date to Adjusted EBITDA for the four consecutive
fiscal quarter period ending on such date.



“Prime Rate”: That rate so designated by the Administrative Agent from time to time
as its prime rate of interest, which is not necessarily the lowest or best rate of interest charged
by the Administrative Agent.



“Proposed New Lender”: As defined in Section 2.3(b).



“Pro Rata Percentages”: As defined in Section 2.1(a)(i).



“Pro Rata Shares”: As defined in Section 2.1(a)(i).



“Proceeding”: Any claim, action, judgment, suit, hearing, governmental investigation,
arbitration (to the extent binding on the Borrower or any of its Subsidiaries) or proceeding,
including by or before any Governmental Authority.



“Property”: Any existing or future interest of the Borrower or any of its
Subsidiaries (other than the Bankruptcy Remote Subsidiary) in any existing or future property or
asset of any kind or nature, whether real, personal or mixed, or tangible or intangible, now owned
or hereafter acquired or created (including without limitation the Capital Stock of any Subsidiary
of the Borrower).



“Published LIBOR Rate”: The rate of interest published each Business Day in The Wall
Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a
one-month period (or, if no such rate is published therein for any reason, then the Published LIBOR
Rate shall be the eurodollar rate for a one-month period as published in another publication
determined by the Administrative Agent).



“Quarterly Compliance Certificate”: As defined in Section 5.7.



“Real Property”: All right, title and interest of the Borrower or any of its
Subsidiaries (including any leasehold estate) in and to any parcel of real property owned, leased
or operated by the Borrower or any of its Subsidiaries together with, in each case, all
improvements and appurtenant fixtures, equipment, personal property, easements and other property
and rights incidental to the ownership, lease or operation thereof.



“Regular Advances”: Advances other than Swing Line Advances.



“Regulation D”: Regulation D of the Board of Governors of the Federal Reserve System,
comprising Part 204 of Title 12, Code of Federal Regulations, as amended, and any successor
thereto.



“Regulations”: As defined in Section 2.12(b).


 


17









 





“Reimbursement Obligations”: As defined in Section 2.2(c).



“Requested Increase”: As defined in Section 2.3(b).



“Reserve”: For any day, that reserve (expressed as a decimal) which is in effect
(whether or not actually incurred) with respect to a Lender (or any Affiliate of such Lender if
applicable pursuant to Section 2.9(e)) on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor or any other banking authority to which a Lender (or any
Affiliate of such Lender if applicable pursuant to Section 2.9(e)) is subject including any board
or governmental or administrative agency of the United States or any other jurisdiction to which a
Lender (or any Affiliate of such Lender if applicable pursuant to Section 2.9(e)) is subject), for
determining the maximum reserve requirement (including without limitation any basic, supplemental,
marginal or emergency reserves) for Eurocurrency Liabilities as defined in Regulation D.



“Reserve Percentage”: For a Lender (or any Affiliate of such Lender if applicable
pursuant to Section 2.9(e)) on any day, that percentage (expressed as a decimal) which is in effect
on such day, prescribed by the Board of Governors of the Federal Reserve System (or any successor
or any other banking authority to which a Lender (or any Affiliate of such Lender if applicable
pursuant to Section 2.9(e)) is subject, including any board or governmental or administrative
agency of the United States or any other jurisdiction to which a Lender (or any Affiliate of such
Lender if applicable pursuant to Section 2.9(e)) is subject, for determining the maximum reserve
requirement (including without limitation any basic, supplemental, marginal or emergency reserves)
for (a) deposits of United States dollars or (b) Eurocurrency Liabilities as defined in Regulation
D, in each case applicable to a LIBOR Based Rate Advance(s) subject to an Adjusted LIBO Rate. The
Adjusted LIBO Rate shall be adjusted automatically on and as of the effective day of any change in
the Reserve Percentage.



“Restricted Subsidiary”: Any Guarantor and any other Material Subsidiary which is not
by name included in the definition of “Guarantors” hereunder and any other Material Subsidiary
which does not, as permitted by Section 5.12(b), become a Guarantor after the date hereof, or as
provided by Section 5.12(c), is released as a Guarantor after the date hereof.



“Revolving Credit”: As defined in Section 2.1.



“Revolving Credit Notes”: As defined in Section 2.1(c)(i).



“S&P”: Standard & Poor’s Corporation, a division of The McGraw-Hill Companies, Inc.



“Securities Act”: The Securities Act of 1933, as amended, together with all rules and
regulations promulgated in connection therewith.



“Security Documents”: Collectively, the Existing Pledge Agreement and the Additional
Pledge Agreement.


 


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“Subsidiary”: With respect to any Person at any time, (a) any corporation more than
fifty (50%) percent of whose voting stock is legally and beneficially owned by such Person or owned
by a corporation more than fifty (50%) percent of whose voting stock is legally and beneficially
owned by such Person; (b) any trust of which a majority of the beneficial interest is at such time
owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries
of such Person; and (c) any partnership, joint venture or other entity of which ownership interests
having ordinary voting power to elect a majority of the board of directors or other Persons
performing similar functions are at such time owned directly or indirectly, beneficially or of
record, by, or which is otherwise controlled directly, indirectly or through one or more
intermediaries by, such Person or one or more Subsidiaries of such Person.



“Swing Line Advances”: Advances under the Swing Line Commitment made by the Swing
Line Lender to the Borrower pursuant to Section 2.1(b).



“Swing Line Commitment”: The amount set forth opposite the Swing Line Lender’s name
on Annex I attached hereto directly below the column entitled “Swing Line Commitment”, as the same
may be reduced from time to time pursuant to Section 8.



“Swing Line Lender”: PNC, in its capacity as such, and its permitted successors and
assigns in such capacity.



“Swing Line Note”: As defined in Section 2.1(c)(ii).



“Taxes”: As defined in Section 2.12(a)



“Transferee”: As defined in Section 10.10(d).



“USA Patriot Act”: The Uniting Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been,
or shall hereafter be, renewed, extended, amended or replaced.



“Withholding Certificate”: As defined in Section 2.12(b).



1.2 Accounting Principles. Where the character or amount of any asset or liability or item
of income or expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, this shall be done in
accordance with GAAP, to the extent applicable, except where such principles are inconsistent with
the requirements of this Agreement.



SECTION 2. THE LOAN.



2.1 Revolving Line of Credit. Subject to the terms and conditions of this Agreement, the
Lenders hereby establish for the benefit of the Borrower a revolving line of credit (collectively,
the “Revolving Credit”) which shall include Advances extended by the Lenders to or for the benefit
of the Borrower from time to time hereunder, in aggregate principal
amount at any time outstanding, not to exceed the then Available Commitment in effect from time to
time.


 


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(a) (i) Each Lender agrees severally to make Regular Advances to the Borrower as a part of the
Revolving Credit, subject to the terms of this Agreement, up to the lesser of the amounts (the “Pro
Rata Shares”) or percentages (the “Pro Rata Percentages”) of the Revolving Credit opposite its name
on Annex I attached hereto and incorporated herein by reference.



(ii) Regular Advances under the Revolving Credit (A) shall be made at any time and from time to
time on and after the Effective Date and prior to the Maturity Date, (B) may be made as Alternate
Base Rate Advances or, at the Borrower’s option and subject to the terms hereof, as LIBOR Based
Rate Advances or, at the Borrower’s option and subject to the terms hereof, as Letters of Credit;
provided that all Advances made by all of the Lenders pursuant to the same Borrowing shall,
unless otherwise specifically provided herein, consist entirely of Advances of the same type, (C)
may be repaid and reborrowed in accordance with the provisions hereof, (D) shall not, when
aggregated with a Lender’s Pro Rata Percentage of other Advances then outstanding, exceed for such
Lender, at any time outstanding, the Pro Rata Share of such Lender, at such time and (E) shall not
be made if, at the time the requested Advance is to be made, the aggregate Outstandings, after
giving effect to the Advance requested by the relevant Notice of Borrowing, would exceed the
Available Commitment in effect at such time.



(iii) The failure of any Lender to perform its obligations hereunder shall not relieve any
other Lender of its obligations hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Advance required to be made by such
other Lender). Each Advance shall be made in accordance with the procedures set forth in
Section 2.4.



(b) (i) The Swing Line Lender may, in its sole and absolute discretion, make Swing Line
Advances to the Borrower as a part of the Revolving Credit, subject to the terms of this Agreement,
up to the Swing Line Commitment.



(ii) Swing Line Advances under the Revolving Credit (A) shall be made at any time and from time
to time on and after the Effective Date and prior to the Maturity Date, (B) shall be made only in
cash and as Alternate Base Rate Advances and shall not be entitled to be converted into LIBOR Based
Rate Advances so long as they remain Swing Line Advances, (C) shall be repaid on the earlier of (x)
the Maturity Date or (y) the seventh day after the date such Swing Line Advance was made and may be
reborrowed in accordance with the provisions hereof, (D) shall not be made if the aggregate
principal amount of Swing Line Advances and the Swing Line Lender’s Pro Rata Percentage of all
other Advances then outstanding, after giving effect to the Swing Line Advance requested by the
relevant Notice of Borrowing, would exceed the Swing Line Lender’s Pro Rata Share and (E) shall not
be made if the aggregate principal amount of Swing Line Advances and all other Advances then
outstanding, after giving effect to the Swing Line Advance requested by the relevant Notice of
Borrowing, would exceed the Available Commitment in effect at such time. In no event shall the
aggregate principal amount of Swing Line Advances outstanding at any time exceed the Swing
Line Commitment.


 


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(c) (i) At Closing, the Borrower shall execute and deliver its promissory note to each Lender
in the principal amount of such Lender’s Pro Rata Share, each in the form attached hereto as
Exhibit B-1 (as amended, replaced, restated or superseded from time to time, collectively the
“Revolving Credit Notes”) to evidence their unconditional obligation to repay each Lender for all
Advances made under the Revolving Credit, with interest as herein and therein provided. Each
Advance under the Revolving Credit shall be deemed evidenced by the Revolving Credit Notes, which
are deemed incorporated herein by reference and made a part hereof.



(ii) At Closing, the Borrower shall execute and deliver its promissory note to the Swing Line
Lender in the principal amount of the Swing Line Commitment, in the form attached hereto as Exhibit
B-2 (as amended, replaced, restated or superseded from time to time, the “Swing Line Note”) to
evidence their unconditional obligation to repay the Swing Line Lender for all Swing Line Advances
made under the Revolving Credit, with interest as herein and therein provided. Each Swing Line
Advance under the Revolving Credit shall be deemed evidenced by the Swing Line Note, which is
deemed incorporated herein by reference and made a part hereof.



(d) The term of the Revolving Credit shall expire on the Maturity Date unless earlier
terminated in accordance with the terms hereof. On such date, unless having been sooner
accelerated by the Administrative Agent pursuant to the terms hereof, the Revolving Credit shall be
terminated and all of the Obligations shall be due and payable in full, and as of which date, no
further Advances shall be available from the Lenders.



(e) Unless the Administrative Agent shall have received notice from a Lender prior to the date
of any Advance that such Lender will not make available to the Administrative Agent such Lender’s
pro rata portion of such Advance, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the date of such borrowing in
accordance with this subsection and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have made such portion available to the Administrative Agent, such Lender and the
Borrower (without prejudice to the Borrower’s rights against such Lender) severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent at (i) in the case of the Borrower, the interest
rate applicable at the time to the Advance comprising such Borrowing and (ii) in the case of such
Lender, the Federal Funds Effective Rate, provided, that, if such Lender shall not
pay such amount within three (3) Business Days of such Advance, the interest rate on such overdue
amount shall, at the expiration of such three-Business Day period, be the rate per annum applicable
to the Advance comprising such Borrowing. If such Lender shall repay to the Administrative Agent
such corresponding
amount, such amount shall constitute such Lender’s Advance as part of such Borrowing for
purposes of this Agreement.


 


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2.2 Letters of Credit.



(a) As part of the Revolving Credit and subject to its terms and conditions and the customary
terms, conditions and procedures of the Fronting Lender, the Fronting Lender, shall, at the request
of the Administrative Agent and on behalf of and for the benefit of the Lenders, make available to
the Borrower (either for its own account or, at the Borrower’s request, as a co-applicant with any
of the Restricted Subsidiaries, each of which is authorized to request the issuance of a Letter of
Credit) Letters of Credit which shall not exceed, in the aggregate at any one time outstanding, the
L/C Commitment. All Letters of Credit issued under the Revolving Credit shall reduce dollar for
dollar the amount available to be borrowed by the Borrower under the Available Commitment. No
standby Letter of Credit shall be issued with an expiry date later than the earlier of: (i) one
(1) year from the date of issuance and (ii) except as provided in Section 2.2(h), the Maturity
Date. No commercial Letter of Credit shall be issued with an expiry date later than the earlier
of: (i) one hundred twenty (120) days from the date of issuance and (ii) except as provided in
Section 2.2(h), the Maturity Date. The Borrower shall, and shall cause any Restricted Subsidiary
which is a co-applicant as to any Letter of Credit to, execute and deliver to the Fronting Lender
all letter of credit agreements and other documents, instruments and agreements customarily
required by the Fronting Lender for such purposes. All such documents, instruments and agreements
shall be in form and substance satisfactory to the Fronting Lender. The Existing Letters of Credit
shall be deemed to have been issued pursuant to this Agreement and shall be Letters of Credit for
all purposes hereunder.



(b) Immediately upon the issuance of any Letter of Credit, the Fronting Lender is deemed to
have granted to each Lender, and each Lender is hereby deemed to have irrevocably acquired, an
individual participating interest (without recourse or warranty), in accordance with each Lender’s
respective Pro Rata Percentage, in all of the Fronting Lender’s rights and liabilities with respect
to such Letter of Credit. Each Lender shall be directly, irrevocably and unconditionally obligated
to the Fronting Lender, according to its Pro Rata Percentage, to reimburse the Fronting Lender for
any draws made at any time without regard to the occurrence of a Default or Event of Default
(including without limitation, following the commencement of any bankruptcy, reorganization,
receivership, liquidation or dissolution proceeding with respect to the Borrower) under any Letter
of Credit outstanding under the L/C Commitment not immediately reimbursed by the Borrower.


 


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(c) In the event of any request for drawing under any Letter of Credit by the beneficiary
thereof, the Fronting Lender shall promptly notify the Borrower and the Borrower shall immediately
reimburse the Fronting Lender on the day when such drawing is honored, by either a cash payment by
the Borrower, or in the absence of such payment by the Borrower, by the Lenders automatically
making, or having been deemed to have made, (without further request or approval of the Borrower) a
cash Advance under the Revolving Credit on such
date which shall accrue interest at the Alternate Base Rate. All Advances which constitute a
reimbursement for a draw under a Letter of Credit shall be shared by the Lenders in accordance with
their respective Pro Rata Percentages. If, for any reason, proceeds of Advances are not received
by the Fronting Lender on the date a drawing under a Letter of Credit is honored in an amount equal
to the amount of such drawing, the Borrower shall reimburse the Fronting Lender, on the Business
Day immediately following the date of such drawing, in an amount in same day funds equal to the
excess of the amount of such drawing over the amount of such proceeds, if any, that are so
received, plus accrued interest on such amount at the Alternate Base Rate. The Borrower’s
reimbursement obligation for draws under Letters of Credit along with their obligation to pay L/C
Fees and Fronting Fees shall herein be referred to collectively as the Borrower’s “Reimbursement
Obligations”. All of the Borrower’s Reimbursement Obligations hereunder with respect to Letters of
Credit shall apply unconditionally and absolutely to, and shall be joint and several with respect
to, Letters of Credit issued hereunder on behalf of the Borrower, as a co-applicant with any of the
Restricted Subsidiaries as if such Letters of Credit had been issued for the account of the
Borrower alone and the term “Reimbursement Obligations” as used throughout this Agreement and the
other Loan Documents shall be deemed to include the Borrower’s Reimbursement Obligations and its
obligation to pay L/C Fees and Fronting Fees with respect to all such Letters of Credit.



(d) (i) In the event that the Borrower shall fail to reimburse the Fronting Lender as provided
in Section 2.2(c) in an amount equal to the amount of the drawing honored by the Fronting Lender
under a Letter of Credit, the Fronting Lender shall promptly notify each Lender of the unreimbursed
amount of such drawing and of such Lender’s participation therein based on such Lender’s Pro Rata
Percentage. Each Lender shall make available to the Fronting Lender an amount equal to its
respective participation in same day funds, at the office of the Fronting Lender specified in such
notice, not later than 1:00 p.m. (Philadelphia time) on the Business Day after the date notified by
the Fronting Lender. In the event that any Lender fails to make available to such Fronting Lender
the amount of such Lender’s participation based on such Lender’s Pro Rata Percentage in such Letter
of Credit, as provided in this Section 2.2(d), the Fronting Lender shall be entitled to recover
such amount on demand from such Lender together with interest at the overnight Federal Funds
Effective Rate for the first three (3) days and at the Alternate Base Rate for each day thereafter.
The Fronting Lender shall distribute to each other Lender which has paid all amounts payable by it
under this Section 2.2(d) with respect to any Letter of Credit, such other Lender’s share, based on
such Lender’s Pro Rata Percentage, of all payments received by the Fronting Lender from the
Borrower in reimbursement of drawings honored by the Fronting Lender under such Letter of Credit,
when such payments are received. Nothing in this Section 2.2(d) shall be deemed to relieve any
Lender from its obligation to pay all amounts payable by it under this Section 2.2(d) with respect
to any Letter of Credit issued by the Fronting Lender or to prejudice any rights that the Borrower
or any other Lender may have against a Lender as a result of any default by such Lender hereunder
and no Lender shall be responsible for the failure of any other Lender to pay its respective
participation, based on its Pro Rata Percentage, payable under this Section 2.2(d).


 


23









 





(ii) In connection with the failure of any Lender to make available to the Fronting Lender the
amount of such Lender’s participation in any Letter of Credit, such Lender hereby agrees to
protect, indemnify, and save the Fronting Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including, without limitation,
reasonable attorneys’ fees, allocated costs of internal counsel and the costs (including judgments)
in connection with any related litigation) which the Fronting Lender may incur or be subject to as
a consequence, direct or indirect, of the failure of such Lender to make available its
participation in such Letter of Credit.



Notwithstanding anything to the contrary contained in this Section 2.2(d), each Lender
providing its participation in any Letter of Credit shall have no obligation to indemnify the
Fronting Lender in respect of any liability incurred by the Fronting Lender arising solely out of
the gross negligence or willful misconduct of the Fronting Lender.



(e) The obligation of the Borrower to reimburse the Fronting Lender for drawings made under
the Letters of Credit and the obligations of the Lenders to the Fronting Lender under Section
2.2(d) shall be unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without limitation, the following
circumstances:



(i) any lack of validity or enforceability of any Letter of Credit;



(ii) the existence of any claim, setoff, defense or other right that the Borrower or any
Affiliate of the Borrower or any other Person may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such beneficiary or transferee may
be acting), the Fronting Lender, any Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated transaction;



(iii) any draft, demand, certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect;



(iv) payment by the Fronting Lender under any Letter of Credit against presentation of a
demand, draft or certificate or other document that does not comply with the terms of such Letter
of Credit unless the Fronting Lender shall have acted in the absence of good faith or with willful
misconduct or gross negligence in issuing such payment; or



(v) the fact that a Default or Event of Default shall have occurred and be continuing.


 


24









 





(f) If by reason of (i) any change after the Effective Date in applicable law, regulation,
rule, decree or regulatory requirement or any change in the interpretation or application by any
judicial or regulatory authority of any law, regulation, rule, decree or
regulatory requirement or (ii) compliance by the Fronting Lender or any Lender with any
direction, reasonable request or requirement (whether or not having the force of law) of any
governmental or monetary authority including, without limitation, Regulation D:



(A) the Fronting Lender or any Lender shall be subject to any tax or other levy or charge of
any nature or to any variation thereof (except for changes in the rate of any tax on the net income
of the Fronting Lender or any Lender or its applicable lending office) or to any penalty with
respect to the maintenance or fulfillment of its obligations under this Section 2.2, whether
directly or by such being imposed on or suffered by the Fronting Lender or any Lender;



(B) any reserve, deposit or similar requirement is or shall be applicable, imposed or modified
in respect of any Letter of Credit issued by the Fronting Lender or participations therein
purchased by any Lender; or



(C) there shall be imposed on the Fronting Lender or any Lender any other condition regarding
this Section 2.2, any Letter of Credit or any participation therein;



and the result of the foregoing is to directly or indirectly increase the cost to the Fronting
Lender or any Lender of issuing, creating, making or maintaining any Letter of Credit or of
purchasing or maintaining any participation therein, or to reduce the amount receivable in respect
thereof by the Fronting Lender or any Lender, then and in any such case the Fronting Lender or such
Lender shall, within 90 days after the additional cost is incurred or the amount received is
reduced, notify the Borrower and the Borrower shall pay on demand such amounts as may be necessary
to compensate the Fronting Lender or such Lender on an after-tax basis for such additional cost or
reduced receipt, together with interest on such amount from the date demanded until payment in full
thereof at a rate per annum equal at all times to the Alternate Base Rate. A certificate signed by
an officer of the Lender as to the amount of such increased cost or reduced receipt showing in
reasonable detail the basis for the calculation thereof, submitted to the Borrower and the
Administrative Agent by the Fronting Lender or any Lender, as the case may be, shall, except for
manifest error, be final, conclusive and binding for all purposes.



(g) In addition to amounts payable as elsewhere provided in this Section 2.2, without
duplication, the Borrower hereby agrees to protect, indemnify, pay and save the Fronting Lender
harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable attorneys’ fees and reasonable allocated costs of internal
counsel) which the Fronting Lender may incur or be subject to as a consequence, direct or indirect,
of (i) the issuance of the Letters of Credit or (ii) the failure of the Fronting Lender to honor a
drawing under any Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or Governmental Authority (all
such acts or omissions herein called “Government Acts”).


 


25









 





As between the Borrower and the Fronting Lender, the Borrower assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit issued by the Fronting Lender by,
the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation
of the foregoing, the Fronting Lender shall not be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of such Letters of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of any such Letter of Credit to comply fully with conditions required in
order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or
not they are in cipher, unless any of the foregoing are caused by the Fronting Lender’s gross
negligence or willful misconduct; (v) for errors in interpretation of technical terms; (vi) for any
loss or delay in the transmission of any document required in order to make a drawing under any
such Letter of Credit or of the proceeds thereof, unless caused by the Fronting Lender’s gross
negligence or willful misconduct; (vii) for the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of the Fronting Lender, including, without
limitation, any Government Acts. None of the above shall affect, impair, or prevent the vesting of
any of the Fronting Lender’s rights or powers hereunder.



In furtherance and extension and not in limitation of the specific provisions hereinabove set
forth, any action taken or omitted by the Fronting Lender in connection with the Letters of Credit
issued by it or the related certificates, if taken or omitted in good faith, shall not create any
liability on the part of the Fronting Lender to the Borrower.



Notwithstanding anything to the contrary contained in this Section 2.2(g), the Borrower shall
have no obligation to indemnify the Fronting Lender in respect of any liability incurred by the
Fronting Lender arising solely out of the gross negligence or willful misconduct of the Fronting
Lender.



(h) If the expiration date for any Letter of Credit requested by the Borrower to be issued, or
extended or renewed, pursuant to Section 2.2(a) is later than the Maturity Date, the Fronting
Lender may nonetheless issue, or extend or renew, such Letter of Credit notwithstanding that such
expiration date is later than the Maturity Date, provided that Borrower shall on or before five (5)
days prior to the Maturity Date deposit with the Administrative Agent as security for the
Obligations, cash in an amount equal to the Letter of Credit Coverage Requirement with respect to
each such Letter of Credit which remains outstanding on such date, which cash shall be deposited
with, pledged to and held by the Administrative Agent for the benefit of the Lenders in the same
manner as provided in Section 8.2(c).




 


26











 




2.3 Voluntary Reduction or Increase of Commitment.



(a) The Borrower may, at any time, without premium or penalty, permanently reduce the
Available Commitment then available. The exercise of the foregoing option shall be evidenced by
the Borrower giving the Administrative Agent written notice of the Borrower’s election to do so (as
evidenced for the purposes of this Section by a written acknowledgment of receipt executed by such
officer of the Administrative Agent as the Administrative Agent may designate to the Borrower in
writing) of such reduction request. Such notice shall be irrevocable and shall specify the extent
to which the reduction should be applied to the Available Commitment, the date upon which such
reduction shall be effective (which effective date shall be a Business Day and shall be no less
than 5 days after receipt of such notice by the Administrative Agent) and the amount thereof, which
shall be in integral multiples of $1,000,000. In the event of such a reduction in the Available
Commitment, Advances in an aggregate outstanding principal amount that is in excess of the
Available Commitment, as so reduced (the “Over-Limit Amount”), shall be simultaneously paid on the
effective date of such reduction, with interest accrued on the amount so paid or prepaid to the
date of such reduction. On the effective date of such reduction, the Borrower shall cash
collateralize Letters of Credit, on terms satisfactory to the Administrative Agent, in the amount,
if any, by which the Over-Limit Amount exceeds the amount of non-Letter of Credit Advances then
outstanding and shall execute such documents, instruments and agreements as the Administrative
Agent shall deem necessary to perfect a security interest in such cash collateral. A reduction in
the Available Commitment shall reduce each Lender’s Pro Rata Share in accordance with its
respective Pro Rata Percentage.



(b) The Borrower may at any time and from time to time, subject to clause (d) of this Section
2.3, request an increase in the Available Commitment of the Lenders by sending a written notice
thereof from the Borrower to the Administrative Agent. Such notice shall specify the total amount
of the increase requested by the Borrower (the “Requested Increase”), which amount shall be at
least $10,000,000 and not exceed $50,000,000. The Administrative Agent shall notify each Lender of
the Requested Increase upon receipt of the Borrower’s notice thereof. Each Lender shall respond in
writing to the Borrower (with a copy simultaneously sent to the Administrative Agent), within
thirty (30) days of receipt of notice from the Administrative Agent of a Requested Increase (or
such shorter period as the Administrative Agent and the Borrower shall agree), stating the maximum
amount, if any, by which such Lender is willing to increase its Pro Rata Share (the “Offered
Amount”). If the total of the Offered Amount for all of the Lenders is greater than the Requested
Increase, the Requested Increase shall be allocated among the offering Lenders as the Borrower and
the Administrative Agent shall agree or, absent any such agreement, pro rata based on each
Lender’s then existing Pro Rata Percentage. Any Lender that increases its Pro Rata Share shall
execute and deliver a Commitment and Acceptance. If the total of the Offered Amount for all the
Lenders is equal to or less than the Requested Increase, (x) unless the Borrower and Administrative
Agent shall otherwise agree, each Lender’s Pro Rata Share shall increase by its Offered Amount and
(y) the Borrower may offer the difference, if any, between the Requested Increase and the



 


27









 






amount of
the increase in the Pro Rata Shares pursuant to clause (x) above to
one or more new lenders reasonably acceptable to the Administrative Agent (each, a “Proposed
New Lender”). If the Borrower requests that a Proposed New Lender join this Agreement and provide
Advances hereunder, the Borrower shall, at least seven (7) days prior to the date (or such other
period as the Administrative Agent and the Borrower shall agree) on which the Proposed New Lender
proposes to join the Agreement, notify the Administrative Agent of the name of the Proposed New
Lender and the amount of its proposed Pro Rata Share and deliver a duly completed New Lender
Joinder with respect to such Proposed New Lender. Upon the consent of the Administrative Agent to
a Proposed New Lender joining this Agreement, which consent shall not be unreasonably withheld,
such Proposed New Lender shall join this Agreement pursuant to the provisions of Section 10.10(e),
including that its minimum Pro Rata Share be $5,000,000 or such lesser amount as the Administrative
Agent shall agree. The Borrower may make multiple requests for Requested Increases during the
period from the Effective Date to the Maturity Date provided, that the Available Commitment
shall not be increased pursuant to such requests by more than $50,000,000 in the aggregate.



(c) Following any increase in the Available Commitment pursuant to clause (b) of this Section
2.3, the Administrative Agent shall send to the Lenders and the Borrower a revised Annex I setting
forth the new Pro Rata Shares and Pro Rata Percentages of the Lenders. Such revised Annex I shall
replace the existing Annex I if no Lender objects thereto within 10 days of its receipt thereof.



(d) Notwithstanding anything to the contrary in this Section 2.3, (i) the Borrower may not
request an increase in the Available Commitment if at the time of such request a Default or Event
of Default shall exist and (ii) no increase in the Available Commitment (including by way of
addition of a Proposed New Lender) shall become effective if on the date that such increase would
become effective, a Default or Event of Default shall exist.



2.4 Advances, Conversions, Renewals and Payments.



(a) Except to the extent otherwise set forth in this Agreement, all payments of principal and
of interest on the Revolving Credit, the Available Commitment Fee, the L/C Fees, all other charges,
Expenses and any other Obligations of the Borrower hereunder, shall be made to the Administrative
Agent at its main Philadelphia banking office, 1600 Market Street, Philadelphia, Pennsylvania (or
such other office as may be designated by the Administrative Agent to the Borrower in writing), in
immediately available funds in lawful money of the United States of America. The Administrative
Agent shall have the unconditional right and discretion to charge the Borrower’s operating account
with the Administrative Agent (or any of the Borrower’s Subsidiaries’ operating account with the
Administrative Agent, if so directed by the Borrower or if an Event of Default has occurred
hereunder) for all of the Borrower’s Obligations as they become due from time to time under this
Agreement, including without limitation, interest, principal, fees and reimbursement of Expenses.


 


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(b) (i) Advances (except Letters of Credit) which may be made by the Lenders from time to time
under the Revolving Credit shall be made available by crediting such proceeds to the Borrower’s
operating account with the Administrative Agent or to such
other Persons or accounts as may be specified by the Borrower to the Administrative Agent in
writing.



(ii) All Regular Advances (except Letters of Credit) requested by the Borrower must be in the
minimum amount of (A) $2,000,000 (unless the Swing Line Lender shall refuse to, or is unable, to
make a Swing Line Advance for a lesser amount in which case such minimum amount shall be $500,000)
and integral multiples of $100,000 in excess of such amount for Alternate Base Rate Advances
(unless otherwise agreed by the Administrative Agent in its sole and absolute discretion) and (B)
$5,000,000 and integral multiples of $100,000 in excess of such amount for LIBOR Based Rate
Advances. All Swing Line Advances must be in the minimum amount of $50,000 and in integral
multiples of $10,000. All Advances must be requested:



(A) For all Alternate Base Rate Advances (other than Swing Line Advances) by eleven o’clock
(11:00) A.M., Philadelphia time, on the date such Advance is to be made;



(B) For all Swing Line Advances by two o’clock (2:00) P.M., Philadelphia time, on the date
such Swing Line Advance is to be made; and



(C) For all LIBOR Based Rate Advances or any Letter of Credit, by ten o’clock (10:00) A.M.,
Philadelphia time, at least three (3) Business Days before such Advance is to be made.



All requests for an Advance are to be made by telephone immediately confirmed in writing by letter,
facsimile or telex in the form attached hereto as Exhibit C and made a part hereof (“Notice of
Borrowing”) which form is to be executed by an Authorized Officer. Such request may be sent by
telecopy or facsimile transmission provided that receipt of such request shall not be effective
unless confirmed via telephone by the Administrative Agent. Once made, Advance requests are
irrevocable. Each request must indicate the amount of such Advance, the date of such Advance, and
whether or not the requested Advance is a LIBOR Based Rate Advance or an Alternate Base Rate
Advance or a conversion or renewal of an existing Advance, and in the case of a LIBOR Based Rate
Advance, must specify the applicable LIBOR Interest Period. Upon receiving a request for an
Advance in accordance with this subparagraph (ii) on the date of such request, the Administrative
Agent shall promptly notify all Lenders of the request.



(iii) (A) Each Lender shall advance its applicable Pro Rata Percentage of a requested Regular
Advance (and in the case of a Swing Line Advance, the Swing Line Lender shall advance the amount of
the requested Swing Line Advance) to the Administrative Agent by remitting federal funds
immediately available to the Administrative Agent pursuant to the Administrative Agent’s
instructions prior to three o’clock (3:00) p.m. Philadelphia time on the date of the Advance.
Subject to the satisfaction of the terms and conditions hereof and receipt by the Administrative
Agent of all required funds from the other Lenders, the Administrative Agent shall make the
requested Advance available to the Borrower
by crediting such amount to such account as the Borrower has advised the Administrative Agent
as soon as is reasonably practicable thereafter on the day the requested Advance is to be made.


 


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(B) (1) The Swing Line Lender shall, so long as and to the extent that amounts are available
to be borrowed under the Available Commitment (whether or not any conditions precedent thereto can
be or are met) and to the extent any Swing Line Advances are not repaid by the Borrower with its
own funds, require each other Lender, and each other Lender hereby agrees, subject to this Section
2.4(b)(iii)(B), on such date (which shall be a Business Day) as designated by the Swing Line Lender
in writing to the Borrower and the other Lenders, to make a Regular Advance, which shall be an
Alternate Base Rate Advance, in an amount equal to such Lender’s Pro Rata Percentage of the amount
of the Swing Line Advances specified in such notice (each a “Mandatory Loan”). If Alternate Base
Rate Advances are made by the Lenders other than the Swing Line Lender under the immediately
preceding sentence, each such Lender shall make the amount of its Regular Advance available to the
Administrative Agent, in same day funds, at the Administrative Agent’s office, not later than 2:00
p.m. (Philadelphia time) on the Business Day next succeeding the date such notice is given. The
conversion of Swing Line Advances to Regular Advances will not require the Borrower to comply with
the conditions set forth in Section 3 hereof or the notice requirements of Section 2.4(b) hereof or
require any other action on the part of the Borrower. The proceeds of such Regular Advances shall
be immediately delivered to the Swing Line Lender (and not to the Borrower) and applied to repay
the outstanding Swing Line Advances. On the day such Regular Advances are made, the Swing Line
Lender’s Swing Line Advances shall be deemed to be paid with the proceeds of a Regular Advance made
by the Lenders and such portion of the Swing Line Advances deemed to be so paid shall no longer be
outstanding as Swing Line Advances, shall no longer be due under the Swing Line Note and shall be
due under the respective Revolving Credit Notes issued to the Lenders to the extent of each
Lender’s Pro Rata Share. If any portion of any such amount paid to the Swing Line Lender should be
recovered by or on behalf of the Borrower from the Swing Line Lender in bankruptcy, by assignment
for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably
shared among all of the Lenders in the manner contemplated by Section 9.7 hereof. Each Lender’s
obligation to make the Regular Advances referred to in this paragraph shall be absolute and
unconditional and shall not be affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense or other right which such Lender may have against the
Swing Line Lender, the Borrower or any other Person for any reason whatsoever; (ii) the occurrence
or continuance of a Default or an Event of Default; (iii) the occurrence of any Material Adverse
Effect with respect to the Borrower and its Subsidiaries; (iv) any breach of this Agreement or any
of the other Loan Documents by the Borrower or any of its Subsidiaries or any other Lender; or (v)
any other circumstance, happening or event whatsoever, whether or not similar to any of the
foregoing.


 


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(2) In the event that any Mandatory Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each Lender hereby agrees that it
shall forthwith purchase (as of the date the
Mandatory Loan would otherwise have occurred, but adjusted for any principal payments received
by the Swing Line Lender relating to the Swing Line Advance from the Borrower on or after such date
and prior to such purchase) from the Swing Line Lender, such participations in the outstanding
Swing Line Advances as shall be necessary to cause such Lenders to share in such Swing Line
Advances ratably based upon their respective Pro Rata Percentages; provided, however, that (x) all
interest payable on the Swing Line Advances shall be for the account of the Swing Line Lender until
the date as of which the respective participation required to be purchased is paid and, to the
extent attributable to the purchased participation, shall be payable to the participant from and
after such date and (y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay the Swing Line Lender interest on the
principal amount of the participation purchased for each day from and including the day in which
the Mandatory Loan would otherwise have occurred to but excluding the date of payment for such
participation, at a rate per annum equal to (I) the overnight Federal Funds Effective Rate for the
first three (3) days and (II) at the Alternate Base Rate for each day thereafter.



(3) A copy of each notice given by the Swing Line Lender to the Lenders pursuant to Section
2.4(b)(iii)(B)(1) shall be promptly delivered by the Swing Line Lender to the Administrative Agent
and the Borrower. Upon the making of a Regular Advance by a Lender pursuant to this Section
2.4(b)(iii)(B), the amount so funded shall become due under such Lender’s Revolving Credit Note and
shall no longer be owed under the Swing Line Note.



(C) Neither the Administrative Agent nor any other Lender shall be obligated, for any reason
whatsoever, to advance the share of any other Lender (including, any Lender’s share of funding
obligations with respect to Letters of Credit). If such corresponding amount is not made available
to the Administrative Agent by such Lender on the date the Advance is made and the Administrative
Agent elects (at its sole and absolute discretion, without any obligation to do so) to make such
Lender’s share of the Advance available to the Borrower, the Administrative Agent shall be entitled
to recover such amount on demand from such Lender, or from the Borrower, together with interest
thereon in respect of each day during the period commencing on the date such amount was made
available to the Borrower and ending on (but excluding) the date the Administrative Agent recovers
such amount, at a rate per annum equal to the Federal Funds Effective Rate, for each such day (or,
if such day is not a Business Day, for the next preceding Business Day). The Administrative Agent
shall also be entitled to recover any and all losses and damages (including without limitation,
reasonable attorneys’ fees and costs) from any Lender failing to so advance upon demand of the
Administrative Agent. The Administrative Agent may set off the obligations of a Lender under this
paragraph against any distributions or payments of the Obligations which the Administrative Agent
would otherwise make available to such Lender. To the extent any Lender fails to provide its
respective Pro Rata Percentage of any requested Advance, such Lender’s Pro Rata Percentage of all
payments of the Obligations shall decrease to reflect the actual percentage which its actual
outstanding Advances bears to the total outstanding Advances of all Lenders.


 


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2.5 Interest. The unpaid principal balance of the Revolving Credit shall bear interest,
subject to the terms hereof, on one of the two bases selected by the Borrower from among the
borrowing options set forth below, it being understood that subject to the provisions hereof, the
Borrower may select different options to apply simultaneously to different parts of the outstanding
Revolving Credit.



(a) Alternate Base Rate Option. Interest on the outstanding Alternate Base Rate
Advances under the Revolving Credit will accrue at the rate equal to the sum of (A) the Alternate
Base Rate plus (B) the Applicable Base Rate Margin. Interest on all Alternate Base Rate
Advances shall be payable quarterly, in arrears, on the first day of each January, April, July and
October beginning on January 1, 2009.



(b) LIBO Rate Option.



(i) Interest on the outstanding LIBOR Based Rate Advances under the Revolving Credit shall
accrue at the rate (the “LIBOR Based Rate”) equal to the sum of (A) the Adjusted LIBO Rate as
determined by the Administrative Agent on the Interest Rate Determination Date plus (B) the
Applicable LIBO Rate Margin.



(ii) Those portions of the Revolving Credit subject to this option shall be selected and
outstanding for either a one (1) month, two (2) month, three (3) month, or six (6) month period
from the date such LIBOR Based Rate Advance is made or renewed or an Advance is converted to a
LIBOR Based Rate Advance (“LIBOR Interest Period”) and must be repaid in full on the last day of
such applicable period with all accrued and unpaid interest thereon. Interest shall also be due
and payable, for LIBOR Based Rate Advances having a LIBOR Interest Period of three (3) months or
greater, on each date occurring at three-month intervals after the first day of such LIBOR Based
Rate Advance Period. No LIBOR Interest Period may end after the Maturity Date. Subject to all of
the terms and conditions applicable to a request for a new Advance which the Borrower desires to
select as a LIBOR Based Rate Advance, the Borrower may convert any Advance to a LIBOR Based Rate
Advance or extend a LIBOR Based Rate Advance as of the last day of the LIBOR Interest Period to a
new LIBOR Based Rate Advance.



(iii) No more than seven (7) portions (tranches) of principal of LIBOR Based Rate Advances may
be outstanding at any one time.



(iv) The initial LIBOR Interest Period for any Borrowing of LIBOR Based Rate Advances shall
commence on the date of such Borrowing (including the date of any conversion from a Borrowing of an
Alternate Base Rate Advance) and each LIBOR Interest Period occurring thereafter (including
continuations thereof) in respect of such Borrowing shall commence on the date on which the next
preceding LIBOR Interest Period expires.



(v) If any LIBOR Interest Period relating to a Borrowing of LIBOR Based Rate Advances begins
on a date for which there is no numerically corresponding
date in the calendar month in which such LIBOR Interest Period ends, such LIBOR Interest
Period shall end on the last Business Day of such calendar month.


 


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(vi) If any LIBOR Interest Period would otherwise expire on a day which is not a Business Day,
such LIBOR Interest Period shall expire on the next succeeding Business Day; provided that if any
LIBOR Interest Period in respect of a LIBOR Based Rate Advance would otherwise expire on a day
which is not a Business Day but is a day of the month after which no further Business Day occurs in
such month, such LIBOR Interest Period shall expire on the next preceding Business Day.



(c) Calculation of Interest. Interest shall be calculated on the basis of a 360 day
year (or a year of 365 or 366 days, as the case may be, in the case of all Advances based on the
Prime Rate) and charged on the actual days elapsed.



(d) Failure to Specify Rate. All Advances for which an interest rate option is not
specifically designated by the Borrower, pursuant to the terms hereof, or not requested in
conformity with the terms hereof, shall be Alternate Base Rate Advances.



(e) Default Rate. After the occurrence and during the continuance of an Event of
Default hereunder, the per annum effective rate of interest on all Advances may, in the discretion
of the Administrative Agent or at the direction of the Majority Lenders, be increased (and shall be
automatically so increased if the Event of Default is a payment default) by two (2%) percentage
points and may be applied retroactively to the date of the occurrence of such Event of Default.
Upon an acceleration of the obligations by the Administrative Agent and/or the Lenders hereunder,
the Administrative Agent may (and shall, at the direction of the Majority Lenders), automatically
and without prior notice to the Borrower, convert each LIBOR Based Rate Advance to an Alternate
Base Rate Advance. The Administrative Agent will subsequently give notice to the Borrower of such
conversion.



(f) Continuation of Interest Charges. All rates of interest charged on Advances under
the Revolving Credit shall, until such Advances are paid, continue to accrue at the applicable
contract rate provided in this Agreement and be paid even after the occurrence of any Default or
Event of Default, or after maturity, acceleration, recovery of judgment, bankruptcy, insolvency
proceedings of any kind or the happening of any event or occurrence similar or dissimilar.



(g) Applicable Interest Limitations. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder and charged or collected pursuant to the terms
of this Agreement exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the event that such court
determines the Lenders have charged or received interest hereunder in excess of the highest
applicable rate, the Lenders shall apply and set off such excess interest received by the Lenders
against other Obligations due or to become due and such rate shall automatically be reduced to the
maximum rate permitted by such law.


 


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2.6 Fees.



(a) So long as the Revolving Credit is outstanding and has not been terminated, the Borrower
shall unconditionally pay to the Administrative Agent, for the ratable benefit of the Lenders, a
non-refundable fee (the “Available Commitment Fee”) at a rate per annum equal to the Applicable
Available Commitment Fee Percentage from time to time in effect on the average daily unused amount
of the Available Commitment (giving effect to any reductions or increases therein) of such Lender
during the preceding quarter (or shorter period commencing with the date hereof or ending with the
Maturity Date or any date on which the Available Commitment of such Lender shall be terminated).
All Available Commitment Fees shall be computed and paid on a quarterly basis in arrears on the
first day of each January, April, July and October, beginning on January 1, 2009, in each case for
the actual number of days elapsed over a year of 360 days. The Available Commitment Fee due to
each Lender shall commence to accrue on the date hereof, and shall cease to accrue on the Maturity
Date and the termination of the Available Commitment of such Lender as provided herein. Solely for
the purposes of calculating the distributive share of the Available Commitment Fee to be remitted
to each Lender, the daily unused Available Commitment shall be determined (the “Fee Determination”)
as if no Swing Line Advances were outstanding during such period and the share of such fee owing to
the Swing Line Lender shall be reduced to the extent necessary for each Lender (other than the
Swing Line Lender) to receive its share of such fee based on such Fee Determination.



(b) (i) The Borrower shall pay to the Administrative Agent, for the ratable benefit of the
Lenders, non-refundable letter of credit fees equal to (A) one quarter of one (.25%) percent of the
face amount of each commercial letter of credit, which shall be paid upon negotiation of the letter
of credit and (B) for each day, the Applicable LIBO Rate Margin multiplied by the aggregate undrawn
face amount of the outstanding standby letters of credit (collectively, the “L/C Fees”) which shall
be computed and paid on a quarterly basis, in arrears, on the first day of each January, April,
July and October, beginning on January 1, 2009, in each case for the actual number of days elapsed
over a 360 day year.



(ii) In addition to the foregoing, the Borrower shall pay to the Fronting Lender, for its own
account, (A) a fee (the “Fronting Fee”) equal to one eighth of one (1/8%) percent per annum of the
aggregate face amount of the outstanding Letters of Credit which shall be computed and paid on a
quarterly basis, in arrears, on the first day of each January, April, July and October, beginning
on January 1, 2009 in each case for the actual number of days elapsed over a 360 day year, and (B)
customary issuance, amendment, extension, cancellation and administration fees and charges for each
Letter of Credit, due and payable upon demand of the Fronting Lender.


 


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2.7 Prepayments.



(a) The Borrower shall have the right at any time and at its option from time to time to
prepay the Advances in whole or in part without premium or penalty, subject to reimbursement of the
Lender’s re-deployment costs of prepayments of LIBOR Based
Rate Advances in accordance with Section 2.9. Whenever the Borrower desires to prepay any
part of the Advances, the Borrower shall provide a prepayment notice to the Administrative Agent by
eleven o’clock (11:00) A.M., Philadelphia time, at least one (1) Business Day prior to the date of
prepayment of any LIBOR Based Rate Advances and no later than two o’clock (2:00) P.M., Philadelphia
time, on the date of prepayment of any Alternate Base Rate Advances, setting forth (i) the date,
which shall be a Business Day, on which the proposed prepayment is to be made; (ii) a statement
indicating the application of the prepayment between the Regular Advances and the Swing Line
Advances and (iii) the total principal amount of such prepayment, the amount of which shall not be
less than $1,000,000 in the case of Regular Advances and $10,000 in the case of Swing Line
Advances.



(b) All prepayment notices shall be irrevocable. The principal amount of the Advances for
which a prepayment notice is given, together with interest on such principal amount except with
respect to Alternate Base Rate Advances, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made. Unless the Borrower
indicates otherwise in the prepayment notice, prepayments shall be applied, first, to reduce
Alternate Base Rate Advances and, second, to reduce LIBOR Based Rate Advances. Any prepayment
hereunder shall be subject to the Borrower’s obligation to indemnify the Lenders under Section
10.15.



2.8 Use of Proceeds. The proceeds of the Lenders’ Advances shall be used by the Borrower
solely: (i) to provide Letters of Credit to be used by the Borrower and its Restricted
Subsidiaries solely in the ordinary course of its business and (ii) for working capital needs and
general corporate purposes, including the funding of Permitted Acquisitions, permitted dividends
and permitted stock repurchases, not otherwise prohibited under this Agreement.



2.9 Special Provisions Governing LIBOR Based Rate Advances. Notwithstanding other
provisions of this Agreement, the following provisions shall govern with respect to LIBOR Based
Rate Advances as to the matters covered:



(a) On the Interest Rate Determination Date the Administrative Agent shall determine (which
determination shall, absent manifest error, be final, conclusive and binding upon all parties
hereto) the interest rate which shall apply to the LIBOR Based Rate Advances for which an interest
rate is then being determined for the applicable LIBOR Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing or by facsimile) to the Borrower
and to each Lender.



(b) In the event that (x) in the case of clause (i) below, the Administrative Agent or (y) in
the case of clause (ii) or (iii) below, any Lender, shall have determined (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties hereto):



(i) at any time that a LIBO Rate is to be determined by the Administrative Agent that, by
reason of any changes arising on or after the Effective Date
affecting the interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the definition of Adjusted
LIBO Rate;


 


35









 





(ii) at any time that such Lender shall incur increased costs or reductions in the amounts
received or receivable hereunder with respect to any Lender on its obligation to make LIBOR Based
Rate Advances (which increase in cost or reduction in receivables shall be calculated in accordance
with such Lender’s reasonable averaging and attribution methods) because of (x) any change since
the Effective Date (including changes proposed or published prior to the Effective Date but not
reflected in the pricing of the Advances) in any applicable law or governmental (or
quasi-governmental or other body or entity accorded the status of a rule or regulation making
authority) rule, regulation, guideline or order, whether or not having the force of law, or in the
interpretation or administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline or order, such as, for example, but not limited to: (A) a
change in the basis of taxation of payments to any Lender of the principal of or interest on the
Revolving Credit Notes or any other amounts payable hereunder (except for changes in the rate of
tax on, or determined by reference to, the net income or profits of such Lender) or (B) a change in
official reserve requirements, but, in all events, excluding reserves required under Regulation D
to the extent included in the computation of the LIBO Rate and/or (y) other circumstances since the
date of this Agreement affecting such Lender or the interbank Eurodollar market or the position of
such Lender in such market; or



(iii) at any time that the making or continuance of any LIBOR Based Rate Advance has become
unlawful by compliance by such Lender in good faith with any applicable law or governmental (or
quasi-governmental or other body or entity accorded the status of a rule or regulation making
authority) rule, regulation, guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law even though the failure to comply
therewith would not be unlawful), or has become impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely affects the interbank eurodollar
market;



then, and in any such event, the Administrative Agent in the case of clause (i) above or such
Lender in the case of clause (ii) or (iii) above shall on such date give notice (by telephone
confirmed in writing or by facsimile) to the Borrower of the Advance(s) affected and, in the case
of clause (ii) or (iii) to the Administrative Agent, of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the
case of clause (i) above, LIBOR Based Rate Advances shall no longer be available until such time as
the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise
to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing given by
the Borrower with respect to the borrowing of or conversion into (including continuance of) LIBOR
Based Rate Advances which have not yet been incurred shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower shall pay to such Lender, upon written demand
therefor, such additional amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its reasonable discretion shall determine) as
shall be required to compensate such Lender on an after-tax basis
for such increased costs or reductions in amounts receivable hereunder (a written certificate
signed by an officer of such Lender as to the additional amounts owed to such Lender, showing in
reasonable detail the basis for the calculation thereof, submitted to the Borrower by such Lender
shall, absent manifest error, be final, conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions specified in Section
2.9(c) as promptly as possible and, in any event, within the time period required under Section
2.9(c) or, if earlier, the time period required by law. All demands for payment hereunder shall be
given no more than ninety (90) days after the occurrence of the change in law or other event giving
rise to such demand; provided however, that failure to deliver notice on a timely
basis shall not constitute a waiver of any Lender’s right to receive payment for any costs relating
to the 90-day period preceding the date of demand and any costs incurred after the giving of such
notice.


 


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(c) At any time that any LIBOR Based Rate Advance is affected by the circumstances described
in Section 2.9(b)(ii) or (iii), the Borrower may (and in the case of a LIBOR Based Rate Advance
affected pursuant to Section 2.9(b)(iii) shall) either (i) if a Notice of Borrowing has been given
with respect to the affected LIBOR Based Rate Advance, cancel said Notice of Borrowing by giving
the Administrative Agent telephonic notice (confirmed promptly in writing or by facsimile) thereof
on the same date that the Borrower was notified by a Lender pursuant to Section 2.9(b)(ii) or
(iii), or (ii) if the affected LIBOR Based Rate Advance is then outstanding, upon at least three
(3) Business Days’ notice to the Administrative Agent, require the affected Lender to convert each
such LIBOR Based Rate Advance into an Alternate Base Rate Advance or prepay such LIBOR Based Rate
Advance on the last day of the current LIBOR Interest Period therefor unless earlier payment is
required by law; provided that if more than one Lender is affected at any time, then all
affected Lenders must be treated the same pursuant to this Section 2.9(c); and provided, further,
that the Borrower shall compensate any such affected Lenders as set forth in Section 2.9(f).



(d) Anything herein to the contrary notwithstanding, if, on any Interest Rate Determination
Date, no LIBO Rate is available by reason of any changes arising on or after the Effective Date
affecting the interbank Eurodollar market or adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of LIBO Rate, the
Administrative Agent shall give the Borrower and each Lender prompt notice thereof and the Advances
requested to be made as LIBOR Based Rate Advances shall, subject to the applicable notice
requirements, be made as Alternate Base Rate Advances.



(e) Each Lender agrees that, as promptly as practicable after it has actual knowledge of the
occurrence of any event or the existence of a condition that would cause it to be an affected
Lender under Section 2.9(b)(ii) or (iii), it will, to the extent not inconsistent with such
Lender’s internal policies, use reasonable efforts to make, fund or maintain the affected LIBOR
Based Rate Advances of such Lender through another lending office of such Lender if as a result
thereof the additional moneys which would otherwise be required to be paid in respect of such
Advances pursuant to Section 2.9(b)(ii) would be materially reduced or the illegality or other
adverse circumstances which would otherwise require prepayment of such
Advances pursuant to Section 2.9(b)(iii) would cease to exist, and if, as determined by such
Lender, in its reasonable discretion, the making, funding or maintaining of such Advances through
such other lending office would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to promptly pay all reasonable out-of-pocket expenses incurred by any Lender in
utilizing another lending office of such Lender pursuant to this Section 2.9(e).


 


37









 





(f) The Borrower shall compensate each Lender, upon written request by that Lender, for all
reasonable losses, expenses and liabilities (including, without limitation, such factors as any
interest paid by that Lender to lenders of funds borrowed by it to make or carry its LIBOR Based
Rate Advances and any loss sustained by the Lender in connection with re-deployment of such funds
(based upon the difference between the amount earned in connection with the re-deployment of such
funds and the amount payable by the Borrower if such funds had been borrowed or remained
outstanding, but not for loss of profit)) which that Lender may sustain with respect to the
Borrower’s LIBOR Based Rate Advances: (i) if for any reason attributable to the Borrower, a
Borrowing of any LIBOR Based Rate Advance does not occur on a date specified therefor in a Notice
of Borrowing or a telephonic request for borrowing or conversion, or a successive LIBOR Interest
Period does not commence after notice therefor is given or is deemed to have been given pursuant to
Section 2.4 (b) (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to clause
(x) of the last paragraph of Section 2.9(b)); or (ii) if any prepayment or repayment (in accordance
with Section 2.7 or this Section 2.9, by acceleration or otherwise) or conversion of any of such
Lender’s LIBOR Based Rate Advances occurs on a date which is not the last day of the LIBOR Interest
Period applicable to that advance; or (iii) if any prepayment or repayment of any such Lender’s
LIBOR Based Rate Advances is not made on any date specified in a notice of prepayment or repayment
given by the Borrower; or (iv) as a consequence of (x) any other failure by the Borrower to repay
such Lender’s LIBOR Based Rate Advances when required by the terms of this Agreement or (y) any
election made pursuant to Section 2.9(c). Compensation owing under this Section 2.9(f) shall be
equal to the amount of interest which would have accrued on the amount of principal prepaid or
repaid or converted or not borrowed for the period from the date of such prepayment or repayment or
conversion or failure to borrow to the last day of the then current LIBOR Interest Period for the
relevant LIBOR Based Rate Advance (or, in the case of a failure to borrow, the LIBOR Interest
Period for such LIBOR Based Rate Advance which would have commenced on the date of such failure to
borrow) at the applicable rate of interest for such LIBOR Based Rate Advance provided for herein
minus any amount such Lender, in good faith and in its sole discretion (absent manifest error),
determines is realizable upon the re-deployment of such funds. A certificate signed by an officer
of the Lender as to the amount of such losses, expenses and liabilities, showing in reasonable
detail the calculation thereof and submitted to the Borrower by such Lender shall, absent manifest
error, be final, conclusive and binding of all purposes.



(g) Any Lender may make, carry or transfer LIBOR Based Rate Advances at, to, or for the
account of any of its branch offices or the office of an Affiliate of that Lender; provided that
any increased costs associated therewith shall be borne by such Lender except as provided in
Section 2.9(e) above.


 


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(h) During the continuance of a Default or an Event of Default, the Borrower may not elect to
have an Advance made or maintained as, or converted into, a LIBOR Based Rate Advance after the
expiration of any LIBOR Interest Period then in effective for that Advance.



(i) Calculation of all amounts payable to the Lender under this Section 2.9 in respect of
LIBOR Based Rate Advances shall be made as though the Lender had actually funded its relevant LIBOR
Based Rate Advance through the purchase of a Eurodollar deposit bearing interest at the LIBO Rate
applicable to such LIBOR Based Rate Advance of such Eurodollar deposit from an offshore office of
the applicable Lender to a domestic office of such Lender in the United States of America;
provided, however, that the Lenders may fund each of their LIBOR Based Rate
Advances in any manner they deem fit and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section 2.9.



2.10 Capital Requirements, Etc. If the adoption or effectiveness after the Effective Date
of any applicable law or governmental (or quasi-governmental or other body or entity accorded the
status of a rule or regulation making authority) rule or regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender or such Lender’s direct or indirect parent
with any request or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency (including in each case any such change
proposed or published prior to the date hereof but not reflected in the pricing of the Advances),
has or would have the effect of reducing the rate of return on such Lender’s or such Lender’s
parent’s capital or assets as a consequence of such Lender’s obligations hereunder to a level below
that which such Lender or such Lender’s parent could have achieved but for such adoption,
effectiveness or change or as a consequence of an increase in the amount of capital required to be
maintained by such Lender (including in each case, without limitation, with respect to any Lender’s
commitment hereunder or any Advance), then from time to time, within fifteen (15) days after demand
by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate, on an after-tax basis, such Lender or such
Lender’s parent, as the case may be, for such reduction. Each Lender, upon determining in good
faith that any additional amounts will be payable pursuant to this Section 2.10, will give prompt
written notice thereof to the Borrower, which notice shall set forth in reasonable detail the basis
of the calculation of such additional amounts, although any delay in giving any notice shall not
release or diminish any of the Borrower’s obligations to pay additional amounts pursuant to this
Section 2.10.


 


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2.11 Mandatory Prepayments/Commitment Reductions.



(a) (i) The Borrower shall immediately prepay the outstanding principal amount of the Advances
(exclusive of undrawn Letters of Credit) in accordance with
Section 2.3 on any date on which the Outstandings exceed the Available Commitment in effect at
such time, in the amount of such excess.



(ii) The Borrower shall immediately prepay to the Swing Line Lender the outstanding principal
amount of the Swing Line Advances on any date on which the aggregate outstanding principal amount
of such Swing Line Advances exceed the Swing Line Commitment in effect at such time, in the amount
of such excess.



(b) With respect to each prepayment of Advances required by Section 2.11(a) other than
Alternate Base Rate Advances, the Borrower shall give the Administrative Agent one (1) Business
Day’s notice and may designate the types of Advances and the specific Borrowing or Borrowings which
are to be prepaid. In the absence of a designation by the Borrower, the Administrative Agent shall
make such designation in its sole discretion. All prepayments shall include payment of accrued
interest on the principal amount so prepaid, shall be applied to the payment of interest, Expenses,
fees and charges before application to principal and shall include amounts payable, if any, under
Section 2.9(f). On the effective date of any such prepayment, the Borrower shall cash
collateralize Letters of Credit, on terms and conditions satisfactory to the Administrative Agent,
in the amount, if any, by which the amount of such prepayment exceeds the outstanding cash Advances
and shall execute such documents, instruments and agreements as the Administrative Agent shall deem
necessary to perfect a security interest in such cash collateral.



2.12 Net Payments. (a) Except as otherwise required by law, all payments made by the
Borrower to any Lender or the Administrative Agent under this Agreement and/or any Loan Document
shall be made free and clear of, and without reduction for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding income, bank shares and franchise taxes imposed by any jurisdiction in which such
Lender’s principal or lending office is located or in which such Lender is engaged in a trade or
business or any political subdivision or taxing authority thereof or therein (such non-excluded
taxes being called “Taxes”). If any Taxes are required to be withheld from any amounts payable to
the Administrative Agent or any Lender under this Agreement and/or any Loan Document, the Borrower
shall timely remit such Taxes to the Governmental Authority imposing the same and the amounts so
payable to such Lender shall be increased to the extent necessary to yield to such Lender (after
payment of all Taxes) interest or any such other amounts payable at the rates or in the amounts
specified in this Agreement and/or any Loan Document. Whenever any Tax is payable by the Borrower,
as promptly as possible thereafter, the Borrower shall send to the Administrative Agent, for its
own account or the account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. Without prejudice to the
foregoing, if any Lender or the Administrative Agent is required to make any payment on account of
Taxes, the Borrower will, upon notification by the Lender or the Administrative Agent, promptly
indemnify such Person against such Taxes. Notwithstanding the foregoing provisions of this Section
2.12(a), the Borrower will have no obligation to indemnify any


 


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Lender or the Administrative Agent,
in respect of any Taxes that would not have been payable had (i) such Lender, assignee of such Lender or participant of a Lender
(or each interestholder in such Lender, assignee or participant, where such Lender, assignee or
participant is a pass-through entity for purposes of the U.S. withholding tax rules) provided to
the Borrower and the Administrative Agent, the applicable Withholding Certificate. For purposes of
this Section 2.12, the term “Taxes” includes interest, penalties and expenses payable or incurred
in connection therewith. The Lender shall submit a certification or otherwise provide written
notice to the Borrower within a reasonable period of time after becoming aware of any Taxes for
which it is entitled to payments of additional amounts under this Section 2.12(a). All demands for
payment hereunder shall be given no more than 90 days after the occurrence of the event giving rise
to such demand; provided however, that failure to deliver notice on a timely basis shall not
constitute a waiver of any Lender’s right to receive payment for any costs relating to the 90-day
period preceding the date of demand and any costs incurred after the giving of such notice.



(b) Each Lender or assignee or participant of a Lender that is not incorporated under the laws
of the United States of America or a state thereof (and, upon the written request of the
Administrative Agent, each other Lender or assignee or participant of a Lender) agrees that it will
deliver to the Borrower and the Administrative Agent two (2) duly completed appropriate valid
Withholding Certificates (as defined under Section 1.1441-1(c)(16) of the Income Tax Regulations
(the “Regulations”) certifying its status (i.e., U.S. or foreign person) and, if appropriate,
making a claim of reduced, or exemption from, U.S. withholding tax on the basis of an income tax
treaty or an exemption provided by the Internal Revenue Code of 1986 (as amended, the “Code”). The
term “Withholding Certificate” means a Form W-9; a form W-8BEN; a form W-8ECI; a form W-8IMY and
the related statements and certifications as required under Section 1.1441-1(e)(3) of the
Regulations; a statement described in Section 1.871-14(c)(2) of the Regulations; or any other
certificates under the Code or Regulations that certify or establish the status of a payee or
beneficial owner as a U.S. or foreign person. Each Lender, assignee or participant required to
deliver to the Borrower and the Administrative Agent a valid Withholding Certificate pursuant to
the preceding sentence shall deliver such valid Withholding Certificate as follows: (A) each Lender
which is a party hereto on the Effective Date shall deliver such valid Withholding Certificate at
least five (5) Business Days prior to the first date on which any interest or fees are payable by
the Borrower hereunder for the account of such Lender; (B) each assignee or participant shall
deliver such valid Withholding Certificate at least five (5) Business Days before the effective
date of such assignment or participation (unless the Administrative Agent in its sole discretion
shall permit such assignee or participant to deliver such Withholding Certificate less than five
(5) Business Days before such date in which case it shall be due on the date specified by the
Administrative Agent). Each Lender, assignee or participant which so delivers a valid Withholding
Certificate further undertakes to deliver to the Borrower and the Administrative Agent two (2)
additional copies of such Withholding Certificate so delivered by it, and such amendments thereto
or extensions or renewals thereof as may reasonably requested by the Borrower or the Administrative
Agent. Notwithstanding the submission of a Withholding Certificate claiming a reduced rate of, or
exemption from, U.S. withholding tax, the Administrative Agent shall be entitled to withhold United
States federal income taxes at the full 30% withholding rate if in its reasonable judgment it is
required to do so
under the due diligence imposed upon a withholding agent under Section 1.1441-7(b) of the
Regulations. Further, the Administrative Agent is indemnified under Section 1.1441-6(b) of the
Regulations against any claims and demands of any Lender or assignee or participant of a Lender for
the amount of any tax it deducts or withholds in accordance with regulations under Section 1441 of
the Code.


 


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2.13 Maturity Date Extension. Not more than 120 days nor less than 60 days prior to each
anniversary hereof the Borrower may request in writing that the then effective Maturity Date be
extended for an additional year and the Lenders shall use their best efforts to respond to such
request within 30 days of receipt thereof. The then effective Maturity Date shall be extended as
requested, but only if (i) no Default or Event of Default shall have occurred and be continuing on
the effective date of such extension and (ii) all of the Lenders consent to such extension.



2.14 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event
giving rise to the operation of Sections 2.10 or 2.12 that affects fewer than all the Lenders, it
will, if requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Advances affected by
such event with the object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its
lending offices to suffer no economic, legal, regulatory or other disadvantage, and provided,
further, that, nothing in this Section shall affect or delay the required performance of any of the
obligations of the Borrower or the rights of any Lender pursuant to Sections 2.10 or 2.12.



2.15 Replacement of a Lender in Certain Circumstances. If an event occurs giving rise to
the operation of Section 2.10 or 2.12, and the event affects fewer than all the Lenders, or a
Lender shall be a Defaulting Lender (an “Affected Lender”), the Borrower may (a) request one or
more of the other Lenders to acquire and assume all or part of such Affected Lender’s Pro Rata
Share or (b) replace such Affected Lender by designating another lender or financial institution
that is willing to acquire the Affected Lender’s Pro Rata Share; provided, that (i) such
replacement does not conflict with any applicable law or governmental rule or regulation, (ii) no
Default or Event of Default shall have occurred and be continuing at the time of such replacement,
(iii) the replacement lender or financial institution shall purchase, at par, the Pro Rata Share,
accrued interest and other amounts owing to such Affected Lender on a pro rata basis as of the date
of replacement, (iv) the Borrower shall be liable to such Affected Lender under Section 2.9 if any
LIBOR Based Rate Advances owing to such Affected Lender shall be prepaid (or purchased) other than
on the last day of the LIBOR Interest Period relating thereto and shall pay any such amounts to
such Affected Lender on the date of such replacement, (v) the replacement lender or financial
institution, if not already a Lender, shall be satisfactory to the Administrative Agent, (vi) the
replaced Lender shall be obligated to make such replacement in accordance with the provisions of
Section 10.10 (provided that the Borrower or replacement Lender shall be obligated to pay the
assignment fee according to Section 10.10(b)(i)(D)) and (vii) the Borrower shall pay all additional
amounts (if any) required pursuant to Sections 2.10 or
2.12, as the case may be, to the extent such additional amounts are incurred on or prior to the
consummation of such replacement.


 


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2.16 Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for
so long as such Lender is a Defaulting Lender:



(a) Such Defaulting Lender shall no longer be entitled to receive its Pro Rata Percentage of
Available Commitment Fees or L/C Fees otherwise payable pursuant to Section 2.6 hereof, and
thereafter, so long as any Lender is a Defaulting Lender, the fees payable to the non-Defaulting
Lenders pursuant to Section 2.6 shall be based on their Adjusted Pro Rate Percentages;



(b) the Defaulting Lender, or the Pro Rata Percentage of such Defaulting Lender, as
applicable, shall not be included in determining whether all Lenders or Majority Lenders have taken
or may take any action hereunder (including any consent to any amendment or waiver pursuant to
Section 9.15), provided that any waiver, amendment or modification requiring the consent of all
Lenders or each affected Lender which affects such Defaulting Lender differently than other
affected Lenders shall require the consent of such Defaulting Lender;



(c) if any outstanding Swing Line Advances or Letters of Credit exist at the time a Lender
becomes a Defaulting Lender then:



(i) such Defaulting Lender’s pro rata portion of such Swing Line Advances shall be reallocated
among the non-Defaulting Lenders in accordance with their respective Adjusted Pro Rata Percentages
but only to the extent (x) the sum of all non-Defaulting Lenders’ shares of Outstandings does not
exceed the aggregate of all non-Defaulting Lenders’ Pro Rata Shares and (y) the conditions set
forth in Section 3.3 are satisfied at such time; and



(ii) such Defaulting Lender’s participation interests in such outstanding Letters of Credit
shall be reallocated among the non-Defaulting Lenders in accordance with their respective Adjusted
Pro Rata Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ shares of
Outstandings does not exceed the aggregate of all non-Defaulting Lenders’ Pro Rata Shares and (y)
the conditions set forth in Section 3.3 are satisfied at such time; and


 


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(iii) to the extent that all or any part of such Defaulting Lender’s pro rata portion of Swing
Line Advances cannot be reallocated pursuant to Section 2.16(c)(i), then the Borrower (A) agrees,
within 45 days following notice from the Administrative Agent until such Defaulting Lender ceases
to be a Defaulting Lender under this Agreement, to establish and, thereafter, to maintain a special
collateral account (the “Swing Line Collateral Account”) at the Administrative Agent’s office at
the address specified pursuant to Section 10.7, in the name of the Borrower but under the
sole dominion and control of the Administrative Agent, (B) grants to the Administrative Agent for
the benefit of the Lenders, solely as security for repayment of the unallocated portion of such
Defaulting Lender’s Pro Rata Percentage of outstanding Swing Line Advances, a security interest in
and to the Swing Line Collateral Account and any funds that may thereafter be deposited therein and
(C) agrees to maintain in the Swing Line Collateral Account an amount equal to the unallocated
portion of such Defaulted Lender’s Pro Rata Percentage of outstanding Swing Line Advances; and



(iv) to the extent that all or any part of such Defaulting Lender’s participations in
outstanding Letters of Credit cannot be reallocated pursuant to Section 2.16(c)(ii), then the
Borrower (A) agrees, within 45 days following notice from the Administrative Agent until such
Defaulting Lender ceases to be a Defaulting Lender under this Agreement, to establish and,
thereafter, to maintain a special collateral account (the “Letter of Credit Collateral Account”) at
the Administrative Agent’s office at the address specified pursuant to Section 10.7 in the name of
the Borrower but under the sole dominion and control of the Administrative Agent, (B) grants to the
Administrative Agent for the benefit of the Lenders, as security for the unallocated portion of
such Defaulting Lender’s Pro Rata Percentage of all Letter of Credit Obligations, a security
interest in the Letter of Credit Collateral Account and any funds that may be deposited therein and
(C) agrees to maintain in the Letter of Credit Collateral Account an amount equal to the
unallocated portion of such Defaulting Lender’s Pro Rata Percentage of all Letter of Credit
Obligations, regardless of whether any Letters of Credit have then been drawn; and



(d) so long as any Lender is a Defaulting Lender, the Swing Line Lender shall not be required
to fund any Swing Line Advance and no Fronting Lender shall be required to issue, amend or increase
any Letter of Credit unless it is satisfied that the related exposure will be 100% covered by the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with
Section 2.16(c).



(e) any amount payable to such Defaulting Lender hereunder (whether on account of principal,
interest, fees or otherwise but excluding Section 2.15), shall, in lieu of being distributed to
such Defaulting Lender, be retained by the Administrative Agent in a segregated account and,
subject to any applicable requirements of law, be applied at such time or times as may be
determined by the Administrative Agent (i) first, to the payment of any amounts owing by such
Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata, to the payment of
any amounts owing by such Defaulting Lender to the Fronting Lender or Swing Line Lender hereunder,
(iii) third, to the funding of any Advance or the funding of any


 


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participating interest in any
Swing Line Advance or Letter of Credit in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as
determined by the Administrative Agent, (iv) fourth, if so determined by the Administrative Agent
and the Borrower, held in such account as cash collateral for future funding obligations of the
Defaulting Lender under this Agreement, (v) fifth, pro rata, to the payment of any amounts owing to
the Borrower or the Lenders as a result of any judgment of a court of competent jurisdiction
obtained by the Borrower or any Lender against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement and (vi) sixth, to such
Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if
such payment is (x) a prepayment of the principal amount of any Advances or reimbursement
obligations in respect of Letters of Credit for which a Defaulting Lender has funded its
participation obligations and (y) made at a time when the conditions set forth in Section 3.3 are
satisfied, the remaining portion of such payment shall be applied solely to prepay the Advances of,
and reimbursement obligations owed to, all non-Defaulting Lenders pro rata prior to being applied
to the prepayment of any Advances, or reimbursement obligations owed to, any Defaulting Lender.



(f) In the event that the Administrative Agent, the Borrower, the Fronting Lender and the
Swing Line Lender each agrees that a Defaulting Lender has adequately remedied all matters that
caused such Lender to be a Defaulting Lender, then the Swing Line Advances and Letters of Credit
participations of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Pro
Rata Percentage and on such date such Lender shall purchase at par such of the Advances of the
other Lenders (other than Swing Line Advances) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Advances in accordance with its Pro Rata
Percentage, subject to the provisions of Section 2.09(f).



SECTION 3. EFFECTIVENESS AND CONDITIONS PRECEDENT TO ADVANCES.



3.1 Conditions Precedent to Effectiveness. The effectiveness of this Agreement is subject
to satisfaction of the following conditions precedent (all documents, instruments and agreements to
be in form and substance satisfactory to the Administrative Agent and the Administrative Agent’s
counsel):



(a) Resolutions, Opinions, and Other Documents. The Borrower shall have delivered to
the Administrative Agent the following:



(i) this Agreement, the Revolving Credit Notes, the Swing Line Note, and the Additional Pledge
Agreement and the stock powers and stock certificates required thereby, all properly executed;



(ii) each of the other Loan Documents to be executed by the Borrower or by any other Person
pursuant to the terms hereof;



(iii) Guarantees properly executed by each of the Guarantors;


 


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(iv) certified copies of (A) resolutions of the Borrower’s board of directors authorizing the
execution of this Agreement, the Revolving Credit Notes, the Swing Line Note to be issued hereunder
and each of the other Loan Documents, and (B) the Borrower’s Certificate of Incorporation and
By-laws;



(v) certified copies of (A) resolutions of each Guarantor’s board of directors authorizing the
execution of the Guarantees and (B) each Guarantor’s Articles or Certificate of Incorporation and
By-laws or Operating Agreement;



(vi) an incumbency certificate of the Borrower identifying the parties executing this
Agreement, the Revolving Credit Notes, the Swing Line Note and the other Loan Documents with
specimen signatures;



(vii) an incumbency certificate for each Guarantor identifying the parties executing the
Guarantees, with specimen signatures;



(viii) a written opinion of the Borrower’s and Guarantors’ counsel addressed to the
Administrative Agent and the Lenders;



(ix) certification by the chief financial officer or vice president of finance of the Borrower
that there has not occurred any material adverse change in the business, assets, operations,
properties, financial condition, contingent liabilities, prospects or material agreements of the
Borrower and its Subsidiaries taken as a whole, since March 31, 2008 as reflected on the applicable
Financial Statements of the Borrower delivered to the Administrative Agent;



(x) payment of all fees set forth in the Engagement Letter due on the Effective Date and
Expenses associated with the Revolving Credit;



(xi) Uniform Commercial Code, judgment, federal and state tax lien searches against the
Borrower and each Restricted Subsidiary at the Borrower’s sole cost and expense, showing that the
Property of the Borrower and each Restricted Subsidiary is not subject to any Liens except for
Permitted Liens, and certificates of good standing showing the Borrower and each Restricted
Subsidiary to be in good standing in each jurisdiction in which it is qualified to do business; and



(xii) copies of all other documents, instruments, agreements, opinions and certificates as the
Administrative Agent may reasonably request.



(b) Absence of Certain Events. As of the Effective Date, (i) no Default or Event of
Default hereunder shall have occurred and be continuing and (ii) there shall not have occurred any
event or condition having a Material Adverse Effect with respect to the Borrower and its
Subsidiaries since March 31, 2008, as reflected on the applicable Financial Statements delivered to
the Administrative Agent.


 


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(c) Warranties and Representations at Closing. The warranties and representations
contained in Section 4 as well as any other Section of this Agreement shall be true and correct in
all material respects on the Effective Date with the same effect as though made on and as of that
date. The Borrower shall not have taken any action or permitted any condition to exist which would
have been prohibited by any Section hereof. All warranties and representations contained in this
Agreement, unless expressly stated to the contrary, are deemed to have been made to the
Administrative Agent and Lenders immediately following completion of Closing hereunder.



(d) Compliance with this Agreement. The Borrower shall have performed and complied
with all agreements, covenants and conditions contained herein which are required to be performed
or complied with by the Borrower before or at the Effective Date, including, without limitation,
the provisions of Sections 5, 6 and 7 hereof.



(e) Officers’ Certificate. The Administrative Agent shall receive a certificate dated
the Effective Date and signed by the chief financial officer or vice president of finance of the
Borrower certifying that all of the conditions precedent to the Borrowings to occur on the
Effective Date have been fulfilled.



(f) Indebtedness; Liens, etc. (i) The Borrower and each of the Guarantors shall have
received all necessary consents or waivers or shall have amended, supplemented or otherwise
modified, repaid, redeemed or defeased its outstanding Indebtedness in a manner and on terms
satisfactory to the Administrative Agent such that there exists no default or potential default
(including, without limitation, as a result of the consummation of the transactions contemplated by
any Borrowing hereunder) with respect to such Indebtedness or under any note, evidence of
indebtedness, mortgage, deed of trust, security document or other agreement relating to such
Indebtedness and such indentures, notes, evidences of indebtedness, mortgages, deeds of trust or
other agreements, other than as limited by the Note Purchase Agreement, relating to such
Indebtedness shall not contain any restriction on the ability of the Borrower or any of the
Guarantors to enter into this Agreement, the Guarantees or the other Loan Documents to which it is
entering or, other than as limited by the Note Purchase Agreement, the granting of any Lien in
favor of the Lenders, nor do such agreements, documents or instruments contain any provision giving
rise to the creation of any Lien in favor of any Person as a result of any Borrowing hereunder.



(ii) The Administrative Agent and the Lenders shall be satisfied, in their reasonable
discretion, with all Indebtedness of the Borrower and any of the Restricted Subsidiaries
outstanding on the Effective Date and not reflected on the Financial Statements.


 


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(g) Consents, etc. All material consents of any Governmental Authority and
third-party consents (including, without limitation, all material approvals and consents required
in connection with any Environmental Law or other environmental statutes, rules or regulations), if
any, in connection with the transactions contemplated by this Agreement and the other Loan
Documents (including any consents and approvals that are necessary for the
Borrower to borrow and for each of the Guarantors to perform its obligations hereunder and to
perform in a full and timely manner all of its obligations under the other Loan Documents) and
otherwise referred to herein or therein to be completed on or before the Effective Date, shall have
been obtained and delivered to the Administrative Agent, and shall remain in effect and all
applicable waiting periods shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes, in the judgment of the Administrative Agent or the
Majority Lenders, materially adverse conditions upon the consummation of the transactions
contemplated by this Agreement. There shall not exist any judgment, order, injunction or other
restraint issued or filed with respect to the making of the Advances hereunder.



(h) Environmental Review. At or prior to the Effective Date, there shall have been
delivered to the Administrative Agent all environmental reports, investigations, studies, audits,
assessments or reviews in the possession of the Borrower or any Subsidiary, as set forth in
Schedule 3.1(h) attached hereto and made a part hereof, in relation to the current business or
operations of the Borrower or any of its Subsidiaries or any Real Property, Property or facilities
now owned, operated, leased or controlled by the Borrower or any of its Subsidiaries which contain
information pertaining to any event(s) or condition(s) which have, or to the best of the Borrower’s
present Knowledge are reasonably likely to cause, a Material Adverse Effect.



(i) Compliance with Laws. The Borrower and each of its Subsidiaries shall be in
compliance with all applicable statutes, regulations and ordinances of the United States of America
and each other country and jurisdiction, and of each state, city, town, municipality, country, and
each agency thereof (including, without any limitation, ERISA laws, Environmental Laws and margin
regulations), a violation of which would cause a Material Adverse Effect.



3.2 Effective Date; Transitional Arrangements. (a) Subject to the satisfaction of the
conditions of Section 3.1, this amendment and restatement of the Existing Loan Agreement shall
become effective on such date (the “Effective Date”) and at such time as may be mutually agreeable
to the parties contemporaneously with the execution hereof (“Closing”) at the offices of the
Administrative Agent’s counsel, Ballard Spahr Andrews & Ingersoll, LLP, in Philadelphia,
Pennsylvania.



(b) On the Effective Date, without the necessity of further action by any party: (i) the
outstanding principal amount of the “Regular Advances” and “Swing Line Advances” (each as defined
in the Existing Loan Agreement) owed to the Lenders under the Existing Agreement shall be converted
and continued as Regular Advances and Swing Line Advances, respectively, as if made by the Lenders
pursuant to this Agreement in accordance with the Pro Rata Percentages set forth on Annex I hereto,
and the Lenders hereunder shall make such additional Advances under the Revolving Credit and
receive such repayments, as the case may be, as are necessary to result in each Lender holding such
Pro Rata Percentage of the Outstanding Regular Advances; (ii) any outstanding cash Advances of any
Lender under the Existing Agreement which is not a Lender hereunder shall be repaid and such Lender
shall be released from any further obligations hereunder; and (iii) each Existing Letter of Credit
shall
continue in full force and effect as a Letter of Credit issued under this Agreement for so
long as such Letter of Credit remains outstanding or any draft thereunder has not been reimbursed,
and all Advances shall be entitled to the security and subject to the provisions set forth in this
Agreement. Each Lender agrees to participate in all such Letters of Credit in accordance with the
terms of this Agreement as if each such Letter of Credit were issued hereunder.


 


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(c) Except as otherwise provided in this Agreement, the Existing Loan Agreement and the
promissory notes issued thereunder shall be superseded by this Agreement, the Notes and the other
Loan Documents and shall be of no further force or effect and such promissory notes issued under
the Existing Loan Agreement shall be surrendered by the Lenders under the Existing Agreement to the
Administrative Agent and returned to the Borrower.



(d) All interest and all commitment, facility and other fees and expenses owing or accruing
under or in respect of the Existing Loan Agreement shall be calculated as of the Effective Date
(prorated in the case of any fractional periods), and shall be paid on such date in accordance with
the method specified in the Existing Loan Agreement, as if it were still in effect.



3.3 Conditions Precedent to all Advances. The obligation of the Lenders to make Advances
hereunder after the Effective Date is subject, at the time of making each such Advance, to the
satisfaction of the following conditions precedent (all documents, instruments and agreements to be
in form and substance satisfactory to the Administrative Agent and the Administrative Agent’s
counsel):



(a) Agreements Effective. This Agreement, the Revolving Credit Notes, the Swing Line
Note and each of the other Loan Documents shall be effective;



(b) Notice of Borrowing. With respect to any Advance, the Administrative Agent shall
have received, in accordance with the provisions of Section 2.4 hereof, prior to the making of any
such Advance, an originally executed Notice of Borrowing signed by an Authorized Officer, in
writing, delivered to the Administrative Agent (the furnishing by the Borrower of each such Notice
of Borrowing shall be deemed to constitute a representation and warranty of the Borrower to the
effect that the other conditions set forth in this Section 3 are satisfied in all material respects
as of the date of delivery and will be satisfied on the date such Advances are made).



(c) No Default; Representations and Warranties. At the time of the making of each
Advance and also after giving effect thereto, (i) there shall exist no Default or Event of Default
and (ii) all representations and warranties contained herein and in the other Loan Documents in
effect at such time (as amended or modified from time to time, including by the delivery of
amendments or supplements (in form, scope and substance satisfactory to the Administrative Agent
and the Majority Lenders) to the schedules and exhibits to this Agreement and/or the other Loan
Documents) shall be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of such date,
unless such representation and warranty expressly indicates that it is being made as of any
other specific date, in which case, on and as of such other date.


 


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(d) Material Adverse Change, etc. (i) No event or condition shall have occurred or
become known or would result from any Borrowing on the date of any such Borrowing and the use of
the proceeds therefrom that has resulted or would result, singly or in the aggregate, in a Material
Adverse Effect.



(ii) There shall not exist any judgment, order, injunction or other restraint issued or filed
prohibiting, limiting or otherwise adversely affecting the making of any Advances hereunder.



(e) Fees. The Borrower shall have paid to the Administrative Agent, the Lenders and
the Fronting Lender, all fees payable to the Administrative Agent, the Lenders and/or the Fronting
Lender to the extent due hereunder and all costs and Expenses (including legal fees and expenses )
payable to the Administrative Agent, the Lenders and/or the Fronting Lender hereunder.



(f) Litigation. There shall be no Proceeding pending or, to the best of Borrower’s
Knowledge, threatened with respect to the Borrower or any of its Subsidiaries or any Property of
any such Person that, in the reasonable judgment of the Administrative Agent, would, singly or in
the aggregate, have a Material Adverse Effect. No injunction or other restraining order to be
issued shall be pending or noticed with respect to any Proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a result of, this
Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.



(g) Margin Rules. Neither the making of any Advance nor the use of the proceeds
therefrom will violate the provisions of Regulation T, U or X or any other regulation of the Board
of Governors of the Federal Reserve System or the provisions of Section 7 of the Exchange Act.



The acceptance of the proceeds of each Borrowing of Advances shall constitute a representation
and warranty by the Borrower to each of the Lenders that all of the applicable conditions specified
in Section 3 and in any other provision of this Agreement or any of the other Loan Documents have
been satisfied or waived.



3.4 Waiver of Rights. By completing the Closing hereunder or by making Advances hereunder,
the Administrative Agent does not thereby waive a breach of any warranty or representation made by
the Borrower hereunder or in any agreement, document, or instrument delivered to the Administrative
Agent or otherwise referred to herein, and all of the Administrative Agent’s claims and rights
resulting from any breach or misrepresentation by the Borrower are specifically reserved by the
Administrative Agent.



3.5 Delivery of Documents. All of the certificates and other agreements, documents,
instruments and papers referred to in this Section 3, unless otherwise specified, shall be
delivered to the Administrative Agent at its office (or such other location as may be specified by
the Administrative Agent) for the account of each of the Lenders and in sufficient counterparts for
each of the Lenders (and the Administrative Agent shall furnish such counterparts to the Lenders).




 


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SECTION 4. REPRESENTATIONS AND WARRANTIES.



To induce the Lenders to make the Advances under the Revolving Credit to the Borrower, the
Borrower warrants and represents to the Administrative Agent and the Lenders that:



4.1 Corporate Organization and Validity.



(a) The Borrower and the Restricted Subsidiaries are corporations or limited liability
companies duly organized and validly existing under the laws of their respective states (or
countries or other jurisdictions, as applicable) of incorporation or formation, are duly qualified,
are validly existing and in good standing and have lawful power and authority to engage in the
business each conducts in each state and each foreign country where the nature and extent of their
businesses require qualification, except when the failure to so qualify would not have a Material
Adverse Effect.



(b) The making and performance of this Agreement and the other Loan Documents does not violate
any law, government rule or regulation, court or administrative order or other such order having
the effect of law, or the charter, minutes or bylaw provisions of the Borrower or any of the
Restricted Subsidiaries or violate or result in a default (immediately or with the passage of time)
under any contract, agreement or instrument to which any such Person is a party, or by which any
such Person or its Property is bound. Neither the Borrower nor any of the Restricted Subsidiaries
is in violation of any term of any agreement or instrument to which any such Person is a party or
by which it or its Property may be bound or of its charter, minutes or its bylaws, which violation
has had a Material Adverse Effect.



(c) The Borrower and each of the Guarantors has all requisite corporate power and authority to
enter into and perform under this Agreement and each of the Loan Documents (as applicable) and to
incur the obligations herein provided for, and has taken all proper and necessary corporate action
to authorize the execution, delivery and performance of this Agreement and the other Loan Documents
(as applicable).



(d) This Agreement, the Revolving Credit Notes, the Swing Line Note, the Guarantees and all of
the other Loan Documents, when delivered, will be valid and binding upon the Borrower and the
Guarantors (as applicable) and enforceable in accordance with their respective terms.


 


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4.2 Places of Business. As of the Effective Date, the only places of business of the
Borrower and the Restricted Subsidiaries and the places where each keeps and intends to keep its
Property and records concerning its Property, are at the addresses listed in Schedule 4.2 attached
hereto and made part hereof.



4.3 Pending Litigation. There are no judgments or judicial or administrative orders
against or binding upon the Borrower or any of its Subsidiaries, proceedings or investigations
(civil or criminal) pending, or to the Knowledge of the Borrower threatened, against or affecting
the Borrower or any of its Subsidiaries in any court or before any governmental authority or
arbitration board or tribunal which would cause a Material Adverse Effect, except as shown in
Schedule 4.3 attached hereto and made part hereof. Neither the Borrower nor any of its
Subsidiaries is in default with respect to any order of any court, Governmental Authority,
regulatory agency or arbitration board or tribunal which would cause a Material Adverse Effect.



4.4 Title to Properties. The Borrower and each of the Restricted Subsidiaries has good and
marketable title in fee simple (or its equivalent under applicable law) to all the Property it
respectively purports to own, free from Liens and free from the claims of any other Person, except
for those Liens set forth on Schedule 4.4 attached hereto and made part hereof and for other
Permitted Liens.



4.5 Governmental Consent. Neither the nature of the Borrower’s or any of its Subsidiaries’
respective businesses or Property, nor any relationship between such entities and any other Person,
nor any circumstance affecting any such entities in connection with the issuance or delivery of
this Agreement, the Revolving Credit Notes, the Swing Line Note, the Guarantees or the other Loan
Documents is such as to require a consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority on the part of any such party in conjunction with
the execution and delivery of this Agreement or the issuance or delivery of the Revolving Credit
Notes, the Swing Line Note, the Guarantees, or the other Loan Documents, other than such of the
foregoing as have been obtained or made.



4.6 Taxes. All tax returns required to be filed (except for those tax returns which, if
not filed, would not have a Material Adverse Effect) by the Borrower and each of its Subsidiaries
in any jurisdiction, have in fact been filed or extensions have been obtained, and all taxes,
assessments, fees and other governmental charges upon any such Person, or upon any of such Person’s
respective Property, income or franchises, which are due and payable, have been paid, except for
those taxes being contested in good faith with due diligence by appropriate proceedings for which
appropriate reserves have been maintained pursuant to GAAP and except for those taxes which, if not
paid, would not cause a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries
is aware of any proposed additional tax assessment or tax to be assessed against or applicable to
such Person (except for those tax assessments which would not cause a Material Adverse Effect).



4.7 Financial Statements. The Financial Statements (complete copies of which have been
delivered to the Administrative Agent for distribution to the Lenders), were
prepared in accordance with GAAP (excluding footnotes for unaudited statements) are complete in all
material respects and present fairly the financial position of the Borrower and its Subsidiaries as
of such dates and the results of their operations for such periods provided, however, that interim
financial statements are subject to normal year end audit adjustments. The fiscal year for the
Borrower and each of its Subsidiaries ends on March 31.


 


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4.8 Full Disclosure. Neither the Financial Statements nor any written statement furnished
by, or on behalf of, the Borrower to the Administrative Agent and/or Lenders in connection with the
Revolving Credit contained in any Financial Statements or documents, instruments, agreements or
certificates relating to the Borrower and its Subsidiaries contains any untrue statement of a
material fact or omits a material fact necessary to make the statements contained therein or herein
not misleading. There is no fact known to the Borrower which the Borrower has not disclosed to the
Administrative Agent in writing, which would cause a Material Adverse Effect. The projections and
pro forma financial information contained in any materials provided by the Borrower to the
Administrative Agent or any Lender are based upon good faith estimates and assumptions believed by
the Borrower to be reasonable at the time made, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected results.



4.9 Subsidiaries. Other than the parties listed on Schedule 4.9 attached hereto and made
part hereof, the Borrower has, as of the Effective Date, no actively operating Subsidiaries. The
jurisdiction of incorporation or formation of each of such Subsidiaries is also set forth on
Schedule 4.9.




4.10 Guarantees, Indebtedness, etc.



(a) As of the Effective Date, neither the Borrower nor any of the Restricted Subsidiaries owns
or holds equity (excepting the equity interests of its Subsidiaries) or long term debt investments
in, has any outstanding advances to, or serves as guarantor, surety or accommodation maker for the
obligations of, or has any outstanding borrowings from any Person, which, in the case of any such
equity, investment, advance, guarantee or borrowing, involves the expenditure of money or
incurrence of an obligation, as the case may be, of at least $1,000,000 except as described in
Schedule 4.10 attached hereto and made part hereof.



(b) Neither the Borrower nor any of its Subsidiaries is a party to any contract or agreement,
or subject to any charter or other corporate restriction, which would cause a Material Adverse
Effect.



(c) Except as otherwise specifically provided in this Agreement and in the Note Purchase
Agreement or any note issued as permitted under Section 6.11(b)(iv), neither the Borrower nor any
of its Subsidiaries has agreed or consented to cause or permit any of its Property, whether now
owned or hereafter acquired, to be subject in the future (upon the happening of a contingency or
otherwise) to a Lien not permitted by this Agreement.


 


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4.11 Government Regulations, etc.



(a) Assuming each of the Lenders is acquiring its Note or Notes hereunder and its interests
hereunder for its own account, for investment and not with a view toward distribution, nor with the
assets of any Employee Benefit Plan subject to Part 4, Title I of ERISA, the use of the proceeds
of, and the Borrower’s issuance of the Revolving Credit Notes and the Swing Line Note, will not
directly or indirectly violate or result in a violation of the Securities Act of 1933 or the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including,
without limitation, Regulations T, U, and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. The Borrower does not own or intend to carry or purchase any
“margin security” within the meaning of said Regulations, except in conformity with said
Regulations.



(b) The Borrower and each of the Restricted Subsidiaries has obtained all licenses, permits,
franchises or other governmental authorizations necessary for the ownership of its Property and for
the conduct of its business, except for those which, if not obtained, would not cause a Material
Adverse Effect.



(c) Assuming none of the Lenders is acquiring its Note or Notes hereunder or its interests
hereunder with the assets of any employee benefit plan subject to Part 4, Title 1 of ERISA, as of
the date hereof, no employee benefit plan, as defined in Section 3(2) of ERISA, (other than a
multi-employer plan described in Section 3(37) of ERISA) (“Employee Benefit Plan”) maintained by
the Company or any of its Subsidiaries, or under which any such Person could have any liability
under ERISA or the Internal Revenue Code (i) has failed to meet the minimum funding standards
established in Section 302 of ERISA, as in effect prior to amendment by the Pension Protection Act
of 2006, for which such Person continues to be liable, (ii) has any unpaid minimum required
contribution, as defined in Section 302(c)(4)(C)(iii) of ERISA, as in effect on and after amendment
by the Pension Protection Act of 2006, for which such Person continues to be liable, (iii) except
as set forth on Schedule 4.11(c), has failed to comply, in any material respect, with any
applicable requirement of ERISA and of the Internal Revenue Code, including all applicable rulings
and regulations thereunder for which it continues to be responsible, or (iv) has, to its Knowledge,
engaged in or been involved in a Prohibited Transaction (as defined in ERISA or the Internal
Revenue Code) under ERISA or the Internal Revenue Code, except to the extent that a failure to
comply with the foregoing would not present a reasonable likelihood of having a Material Adverse
Effect. Except as set forth on Schedule 4.11(c) attached hereto and made a part hereof, no
Employee Benefit Plan maintained by the Borrower or any of its Subsidiaries has been terminated
within the one (1) year period prior to the date hereof. Neither the Company nor any of its
Subsidiaries has assumed, or received notice of a claim asserted against such Person, for
withdrawal liability (as defined in the Multi-employer Pension Plan Amendments Act of 1980, as
amended) with respect to any multi-employer pension plan in which it participates. Other than as
shown on Schedule 4.11(c), neither the Company nor any of its Subsidiaries is a member of any
Controlled Group (as defined in Sections 414(b),(c),(m) and (o) of the Internal Revenue Code and
Section 4001(a)(14) of ERISA). Each of the Company and its Subsidiaries has timely made all
contributions when due with respect to any multi-employer pension plan in which it
participates and no event has occurred triggering a claim against such Person for withdrawal
liability with respect to any multi-employer pension plan in which such Person participates.


 


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(d) Neither the Borrower nor any of the Restricted Subsidiaries is in violation of any
applicable statute, regulation or ordinance of the United States of America or any other country or
jurisdiction, or of any state, city, town, municipality, county or of any other jurisdiction, or of
any agency thereof, (including without limitation, Environmental Laws and regulations), a violation
of which would cause a Material Adverse Effect.



(e) The Borrower and all of the Restricted Subsidiaries are current with all reports and all
documents required to be filed with any state or federal securities commission or similar agency,
if any, and are in full compliance in all material respects with all applicable rules and
regulations of such commissions.



(f) Neither the Borrower nor any of the Restricted Subsidiaries are, or will be after giving
effect to the transactions contemplated hereby, subject to regulation under any federal or state
statute or regulation limiting its ability to incur indebtedness for money borrowed or guarantee
such indebtedness as contemplated by this Agreement or any other Loan Document.



(g) Neither the Borrower nor any of the Restricted Subsidiaries is, or after giving effect to
the transactions contemplated hereby will be, an “investment company” or a company “controlled” by
an “investment company,” within the meaning of the Investment Borrower Act of 1940, as amended.



4.12 Business Interruptions. Within five (5) years prior to the date hereof, neither the
business, Property or operations of the Borrower or any of the Restricted Subsidiaries have been
materially and adversely affected in any way by any casualty, strike, lockout, combination of
workers, order of any Governmental Authority, directed against such Persons. To the best of the
Borrower’s Knowledge, as of the Effective Date, except as set forth on Schedule 4.12 attached
hereto and made part hereof, there are no pending or threatened labor disputes, strikes, lockouts
or similar occurrences or grievances affecting the businesses being operated by the Borrower or any
of the Restricted Subsidiaries which are reasonably expected to have or result in a Material
Adverse Effect.



4.13 Names.



(a) Within five (5) years prior to the Effective Date, neither the Borrower nor any of the
Restricted Subsidiaries has conducted business under or used any other name (whether corporate or
assumed) except for the names shown on Schedule 4.13(a) attached hereto and made part hereof. As
of the Effective Date, the Borrower and the Restricted Subsidiaries are, respectively, the sole
owners of each of their names listed on such Schedule 4.13(a) and any and all business done and all
invoices issued in such trade names are the applicable party’s sales, business and invoices. As of
the Effective Date, each trade name of the
Borrower and any of the Restricted Subsidiaries represents a division or trading style of such
entities and not a separate corporate subsidiary, affiliated, or independent entity.


 


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(b) As of the Effective Date, all federally registered trademarks, patents or copyrights of
the Borrower and any of the Restricted Subsidiaries are listed on Schedule 4.13(b) attached hereto
and made part hereof. Schedule 4.13(b) shall also list all agreements for the license to use third
party-owned trademarks, patents and copyrights as of the Effective Date. The Borrower and/or the
Restricted Subsidiaries, and to the best of Borrower’s Knowledge, each third party identified on
such Schedule 4.13(b) is the sole owner of such Property except to the extent any other Person has
or claims rights in such Property as also described on such Schedule 4.13(b). To the best of the
Borrower’s Knowledge, neither the Borrower nor any of the Restricted Subsidiaries is in violation
of any intellectual property rights of any other Person with respect to such Property which are
reasonably expected to have or result in a Material Adverse Effect.



4.14 Other Associations. As of the Effective Date, neither the Borrower nor any of the
Restricted Subsidiaries is engaged in any joint venture or partnership with any other Person except
as described on Schedule 4.14 attached hereto and made part hereof.



4.15 Environmental Matters. Except as disclosed on Schedule 4.15 attached hereto and made
part hereof, or as would not have, singly or in the aggregate, a Material Adverse Effect:



(a) The Borrower and each of its Subsidiaries has obtained all permits, licenses and other
authorizations (collectively “Environmental Authorizations”) that are required with respect to the
use, ownership and operation of their business, Real Property and other Property under any
Environmental Law and each such Environmental Authorization is in full force and effect.



(b) The Borrower and each of its Subsidiaries is in compliance with all terms and conditions
of the Environmental Authorizations specified in Section 4.15(a) above, and is also in compliance
with, and not subject to liability under, any Environmental Law applicable to it and its respective
businesses, operations, Real Property and other Property.



(c) There is no civil, criminal or administrative action, suit, demand, claim, hearing, notice
of violation, investigation, proceeding, written notice or demand letter or request for information
pending or, to the Knowledge of the Borrower, are any such actions or any investigations threatened
against the Borrower or any of its Subsidiaries under any Environmental Law.



(d) There are no past or present events, conditions, circumstances, activities, practices,
incidents, actions or current plans which could reasonably be expected to materially interfere with
or prevent compliance by the Borrower or any of its Subsidiaries with any Environmental Law, or
which could reasonably be expected to give rise to any liability under any Environmental Law,
including, without limitation, liability under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”), or
similar applicable state, local or foreign laws for response or corrective action, or which could
reasonably be expected to form the basis of any suit, proceeding, hearing, notice of violation, or
notice of potential liability or responsibility, based on or primarily related to the manufacture,
processing, distribution, use, generation, treatment, storage, disposal, transport, shipping or
handling, or the arrangement for treatment or disposal or the emission, discharge, release or
threatened release into the environment, of any Hazardous Materials.


 


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(e) Neither the Borrower nor any of its Subsidiaries has received written notice that it has
been identified as a potentially responsible party or any request for information under CERCLA or
any comparable state law, nor has any such Person received any written notification that any
Hazardous Materials that it or any of its respective predecessors in interest has used, generated,
stored, treated, handled, transported or disposed of, or arranged for transport or treatment of, or
arranged for disposal or treatment of, has been found at any site at which any Governmental
Authority or private party is conducting or plans to conduct an investigation or other action
pursuant to any Environmental Law.



(f) There have been no releases (i.e., any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping into the environment) of Hazardous Materials by the Borrower or any of its Subsidiaries or
to the Borrower’s Knowledge after due inquiry, any of their respective predecessors in interest,
at, on, upon, under, into or from any of the Real Properties. To the Knowledge of the Borrower,
there have been no such releases at, on, upon, under, from or into any real property in the
vicinity of any of the Real Properties that, through soil, air, surface water or groundwater
migration or contamination, has become located on, in or under such Real Properties.



(g) There is no friable asbestos or friable asbestos-containing material in, on, or at any of
the Real Properties or any facility or equipment owned or operated by the Borrower or any of its
Subsidiaries.



(h) No Real Property of the Borrower or any of its Subsidiaries is (i) listed or proposed for
listing on the National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list published by any Governmental Authority.



(i) No regulated underground storage tanks or related piping are located at, under or on the
Real Property, or, to the best of the Borrower’s Knowledge, located in the vicinity of such Real
Property.



(j) Except as listed on Schedule 3.1(h), no environmental reports, investigations, studies,
audits, assessments or reviews in the possession of the Borrower or any of its Subsidiaries with
respect to the current business or operations of the Borrower or any of its Subsidiaries or any
Real Property or other Property or facility now owned, operated, leased or
controlled by the Borrower or any of its Subsidiaries contain information pertaining to any
event(s) or conditions) which have or, to the best of the Borrower’s present Knowledge, are
reasonably likely to cause a Material Adverse Effect. No environmental reports, investigations,
studies, audits, assessments or reviews in the possession of the Borrower or any of its
Subsidiaries with respect to the current or prior business or Property of the Borrower or any of
its Subsidiaries or any Real Property or other Property or facility now, or to the best of
Borrower’s Knowledge, previously owned, leased, operated or controlled by the Borrower or any of
its Subsidiaries, contain information pertaining to events or conditions which would be, or
otherwise are, reasonably likely to have or cause a Material Adverse Effect.


 


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(k) No Lien has been recorded under any Environmental Law with respect to any facility,
inventory, Real Property or other Property presently owned, operated, leased or controlled by the
Borrower or any of its Subsidiaries.



4.16 Regulation O. No director, executive officer or principal shareholder of the Borrower
is a director, executive officer or principal shareholder of any Lender. For the purposes hereof
the terms “director” (when used with reference to a Lender), “executive officer” and “principal
shareholder” have the respective meanings assigned thereto in Regulation O issued by the Board of
Governors of the Federal Reserve System.



4.17 Capital Stock. The authorized and outstanding Capital Stock the Borrower and each of
the Restricted Subsidiaries is, as of the Effective Date, as set forth on Schedule 4.17 attached
hereto and made part hereof. All of the Capital Stock of each such Person has been duly and
validly authorized and, to the extent outstanding, is issued and is fully paid and non-assessable
and has been sold and delivered to the holders thereof in compliance with, or under valid exemption
from, all federal and state laws and the rules and regulations of all regulatory bodies thereof
governing the sale and delivery of securities. As of the Effective Date hereof, except for the
rights and obligations set forth in Schedule 4.17, there are no subscriptions, warrants, options,
calls, commitments, rights or agreements by which the Borrower or any of the Restricted
Subsidiaries or any of their respective shareholders are bound relating to the issuance, transfer,
voting or redemption of shares of its Capital Stock or any pre-emptive rights held by any Person
with respect to the shares of Capital Stock of such parties. As of the Effective Date hereof,
neither the Borrower nor any of the Restricted Subsidiaries has issued any securities that remain
outstanding that are convertible into or exchangeable for shares of its Capital Stock or any
options, warrants or other rights to acquire such shares or securities convertible into or
exchangeable for such shares except as shown on Schedule 4.17.



4.18 Solvency. After giving effect to the creation of the Revolving Credit and the
transactions described herein and therein, the Borrower and its Subsidiaries, on a consolidated
basis, are solvent, are able to pay their respective debts as they become due and have capital
sufficient to carry on their respective business and all businesses in which any such Persons are
about to engage, and now own Property having a value both at fair valuation and at present fair
salable value greater than the amount required to pay such entity’s debts. After giving effect to
the creation of the Revolving Credit and the transactions described herein and
therein, the Borrower and its Subsidiaries, on a consolidated basis, will not be rendered insolvent
by the execution and delivery of this Agreement or any of the other agreements, documents or
instruments executed in connection with this Agreement (including, without limitation, the
Guarantees) or by the transactions contemplated hereunder or thereunder.


 


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4.19 Interrelatedness of the Borrower and the Guarantors. The business operations of the
Borrower and the Guarantors are related and have a common business purpose. To permit their
uninterrupted and continuous operations, such companies now require and will from time to time
hereafter require funds for general business purposes. The proceeds of Advances under the
Revolving Credit will directly or indirectly benefit the Borrower and each of the Guarantors
severally and jointly, regardless of which entity requests or receives part or all of the proceeds
of such Advances from the Borrower.



4.20 Anti-Terrorism Laws.



(a) General. Neither the Borrower nor any of its Subsidiaries is in violation of any
Anti-Terrorism Law nor does it engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.



(b) Executive Order No. 13224. Neither the Borrower nor any of its Subsidiaries or
its respective Affiliates or, to the Borrower’s Knowledge, agents acting or benefiting in any
capacity in connection with the Advances made hereunder or other transactions contemplated hereby,
is any of the following (each a “Blocked Person”):



(i) a Person that is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224;



(ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224;



(iii) a Person or entity with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;



(iv) a Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in Executive Order No. 13224;



(v) a Person or entity that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control at its official
website or any replacement website or other replacement official publication of such list; or



(vi) a person or entity who is a Subsidiary or Affiliate of a Person or entity listed above.


 


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To the Borrower’s Knowledge, neither the Borrower, any of its Subsidiaries nor any of its or
their Affiliates or agents acting in any capacity in connection with the Advances made hereunder or
other transactions contemplated hereby (x) conducts any business with, or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person,
or (y) deals in, or otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to Executive Order No. 13224.




SECTION 5. AFFIRMATIVE COVENANTS.



The Borrower covenants that until all of the Borrower’s Obligations to the Lenders and the
Administrative Agent hereunder are paid and satisfied in full and the Revolving Credit has been
terminated (it being understood that the Borrower shall cause each of its Subsidiaries (or, as the
case may be, the Restricted Subsidiaries) to observe and comply in a timely manner with each
provision of the covenants in this Section 5 to the extent applicable to such Subsidiary (or, as
the case may be, such Restricted Subsidiary)):



5.1 Payment of Taxes and Claims. The Borrower shall, and shall cause each of its
Subsidiaries to, pay, before they become delinquent,



(a) all material taxes, assessments and governmental charges or levies imposed upon it or upon
any such party’s Property, and



(b) all claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and
other like Persons, which, if unpaid, would result in the imposition of a Lien upon its Property;
provided, however, that the Borrower and its Subsidiaries shall not be required to pay any such
tax, assessment, charge, levy or claim if the amount, applicability or validity thereof shall at
the time be contested in good faith and by appropriate proceedings by such party, and if such party
shall have set aside on its books adequate reserves in respect thereof, if so required in
accordance with GAAP; which deferment of payment is permissible so long as no Lien has been entered
and such party’s title to, and its right to use, its Property are not materially adversely affected
thereby.



5.2 Maintenance of Properties and Corporate Existence.



(a) Property. The Borrower shall, and shall cause each of the Restricted Subsidiaries
to, maintain its material Property in good condition (normal wear and tear and fire and other
insured casualty excepted) and make all necessary renewals, replacements, additions, betterments
and improvements thereto and will pay and discharge when due the cost of repairs and maintenance to
its Property, and will pay all rentals when due for all real estate leased by such parties.



(b) Property Insurance. The Borrower shall, and shall cause each of the Restricted
Subsidiaries to, maintain and deliver to the Administrative Agent, upon the Administrative Agent’s
request, evidence of business interruption insurance and insurance on all insurable tangible
Property against fire, flood, casualty and such other hazards as may be
reasonably acceptable to the Administrative Agent in such amounts, with such deductibles and
with such insurers as are customary for companies in the same or similar business located in the
same or similar area.


 


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(c) General and Products Liability Insurance. The Borrower shall, and shall cause
each of the Restricted Subsidiaries to, maintain general liability and products liability insurance
in such amounts as is customary for companies in the same or similar businesses located in the same
or similar area and shall deliver to the Administrative Agent upon the Administrative Agent’s
request, evidence of such insurance.



(d) Financial Records. The Borrower shall, and shall cause each of the Restricted
Subsidiaries to, keep in all material respects current and accurate books of records and accounts
in which full and correct entries will be made of all of its business transactions, and will
reflect in its financial statements adequate accruals and appropriations to reserves, all in
accordance with GAAP. The Borrower and the Restricted Subsidiaries shall not change their
respective fiscal year end dates without the prior written consent of the Administrative Agent.



(e) Corporate Existence and Rights. Except for mergers, consolidations and
liquidations permitted under this Agreement, the Borrower shall, and shall cause each of the
Restricted Subsidiaries to, do (or cause to be done) all things necessary to preserve and keep in
full force and effect their respective existence, good standing, rights and franchises unless the
Borrower’s or Restricted Subsidiary’s failure to do so would not have a Material Adverse Effect.



(f) Compliance with Law. The Borrower shall, and shall cause each of the Restricted
Subsidiaries to, comply with all laws, ordinances, governmental rules and regulations to which it
is subject, and will obtain all licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its Property or to the conduct of its businesses, a violation of
which or failure to obtain would have a Material Adverse Effect.



5.3 Litigation. The Borrower shall, and shall cause each of its Subsidiaries to, give
immediate notice to the Administrative Agent of any litigation or governmental investigation
affecting the Borrower or any of its Subsidiaries except for litigation with potential liability to
any such party of less than $5,000,000 or litigation which is fully covered by insurance (exclusive
of a deductible not to exceed $5,000,000).



5.4 Taxes. Subject to Sections 2.12 and 10.17, the Borrower shall, and shall cause each of
the Restricted Subsidiaries to, pay all taxes (other than bank shares taxes and taxes based upon or
measured by any Lender’s income or revenues or any personal property tax), if any, in connection
with the issuance of the Revolving Credit Notes, the Swing Line Note and the Guarantees (as
applicable). The obligations of each such party hereunder shall survive the payment of such
party’s Obligations hereunder and the termination of this Agreement.


 


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5.5 Employee Benefit Plans. The Company shall, and shall cause each of its Subsidiaries
to, (a) fund all of its Employee Benefit Plans in a manner that will satisfy the
minimum funding standards of Section 302 of ERISA (unless failure to do the same would not have a
Material Adverse Effect) and will promptly satisfy any accumulated funding deficiency that arises
under Section 302 of ERISA, as in effect prior to amendment by the Pension Protection Act of 2006,
or unpaid minimum required contribution that arises under Section 302 of ERISA, as in effect on and
after amendment by the Pension Protection Act of 2006, (b) furnish the Administrative Agent,
promptly after the filing of the same, with copies of all reports (with all attachments thereto)
required, by statute, regulation, administrative consent or order or similar written understanding,
to be filed with the United States Department of Labor, the Pension Benefit Guaranty Corporation
(“PBGC”) or the Internal Revenue Service (“IRS”) with respect to all Employee Benefit Plan(s) to
the extent such reports contain information pertaining to events or conditions which would be, or
otherwise are, reasonably likely to have a Material Adverse Effect, or reports which any such
party, or any member of a Controlled Group of which the Company or any of its Subsidiaries has
Knowledge (with respect to any assertions of termination liability under Title IV of ERISA or,
withdrawal liability, as defined in ERISA), may receive from the United States Department of Labor,
the IRS or the PBGC, with respect to any such Employee Benefit Plan(s), and (c) promptly advise the
Administrative Agent of the occurrence of any Reportable Event (as defined in Section 4043 of
ERISA) which requires the giving of notice to the PBGC or any Prohibited Transaction, of which the
Company or any of its Subsidiaries has Knowledge, with respect to any such Employee Benefit Plan(s)
and the action which such party proposes to take with respect thereto. The Company and each of its
Subsidiaries will make all contributions when due with respect to any multi-employer pension plan
in which it participates and will promptly advise the Administrative Agent (i) upon its receipt of
notice of the assertion against such party of a claim for withdrawal liability, (ii) upon the
Company’s Knowledge of the occurrence of any event which would trigger the assertion of a claim for
withdrawal liability against the Company or any of its Subsidiaries, or (iii) upon the Company’s
Knowledge of the occurrence of any event which, to the best of the Company’s Knowledge, would,
after the date hereof, place the Company or any of its Subsidiaries in a Controlled Group (other
than as shown on Schedule 4.11(c) hereto) as a result of which any member (including such party)
thereof may be subject to a claim for withdrawal liability, whether liquidated or contingent.



5.6 Financial and Business Information. The Borrower shall deliver to the Administrative
Agent and to each of the Lenders the following:



(a) Financial Statements and Covenant Reports. Such data, reports, statements and
information, financial or otherwise, as the Administrative Agent may reasonably request (except for
information for which an attorney/client privilege has been reasonably claimed or asserted by the
Borrower) with sufficient copies for all Lenders, including, without limitation:



(i) within forty-five (45) days after the end of each of the first three quarterly accounting
periods in each fiscal year of the Borrower as at the end of such quarter setting forth in
comparative form the corresponding figures for the corresponding periods of the previous fiscal
year, (A) on a consolidated and consolidating basis for the Borrower and its
Subsidiaries (x) a balance sheet and (y) a statement of income, and, (B) on a consolidated
basis for the Borrower and its Subsidiaries a cash flow statement in reasonable detail and
certified by the chief financial officer, treasurer or vice president of finance of the Borrower to
have been prepared in accordance with GAAP (without footnotes);


 


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(ii) within ninety (90) days after the end of each fiscal year of the Borrower as at the end
of such fiscal year, setting forth in each case in comparative form the corresponding figures as at
the end of the previous fiscal year (A) on a consolidated and consolidating basis for the Borrower
and its Subsidiaries, (x) a balance sheet and (y) a statement of income and, (B) on a consolidated
basis, for the Borrower and its Subsidiaries a cash flow statement and a retained earnings
statement all in reasonable detail, audited and certified without qualifications, except those
which are acceptable to the Administrative Agent, (as to the consolidated statements) by
independent public accountants of recognized standing, selected by the Borrower and satisfactory to
the Administrative Agent, to have been prepared in accordance with GAAP, and such independent
public accountants shall also certify without qualifications, except those which are acceptable to
the Administrative Agent, that in making the examinations necessary to their certification
mentioned above they have reviewed the terms of this Agreement and the accounts and conditions of
the Borrower during the accounting period covered by the certificate and that such review did not
disclose the existence of any condition or event which constitutes an Event of Default (or if such
conditions or events existed, describing them);



(iii) within sixty (60) days following the end of each fiscal year an internally prepared
budget of projected expenses and revenues for the current fiscal year; and



(iv) promptly following the request of the Administrative Agent, a copy of each management
letter from the independent public accountants which certified the financial statements referred to
in clause (ii) above.



(b) Notice of Event of Default. Promptly upon becoming aware of the existence of any
condition or event which constitutes a Default or an Event of Default under this Agreement, a
written notice specifying the nature and period of existence thereof and what action the Borrower
is taking (and propose to take) with respect thereto;



(c) Notice of Claimed Default. Immediately upon receipt by the Borrower or any of its
Subsidiaries of a notice of default, oral or written, given to such party by any creditor for
borrowed money or holding Indebtedness of such party which has an outstanding principal balance in
excess of $1,000,000, a copy of such notice (or a written explanation, if given orally) along with
an explanation of what action the Borrower or such Subsidiary is taking (and proposes to take) with
respect thereto; and



(d) Securities and Other Reports. If and as long as the Borrower or any of its
Subsidiaries is a publicly traded company, promptly upon its becoming available, one copy of each
financial statement, report, notice or proxy statement sent by such party to stockholders
generally, and a copy of each regular or periodic report, and any registration statement, or
prospectus or any other document, in respect thereof filed by such party with any
securities exchange or with all federal or state securities and exchange commissions or any
successor agency. In addition to the foregoing, the Borrower shall, promptly upon its becoming
available, deliver to the Administrative Agent one copy of each regular or periodic report and any
registration statement or prospectus and any other document filed by the Borrower or any of its
Subsidiaries with any securities exchange or with all federal or state securities and exchange
commissions or any successor agency.


 


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5.7 Officers’ Certificates. Along with the set of financial statements delivered to the
Administrative Agent at the end of each calendar quarter and fiscal year pursuant to Section 5.6(a)
hereof, the Borrower shall deliver to the Administrative Agent a certificate (in the form of
Exhibit D attached hereto and made a part hereof) (the “Quarterly Compliance Certificate”) from the
chief financial officer, treasurer or vice president of finance of the Borrower (and as to
certificates accompanying the annual statements of the Borrower, also certified by the Borrower’s
independent certified public accountant) in form and substance satisfactory to the Administrative
Agent setting forth, to the best of such officer’s knowledge after due investigation:



(a) Covenant Compliance. The information (including detailed calculations) required
in order to establish whether the Borrower is in compliance with the requirements of Sections 5, 6
and 7, as of the end of the period covered by the financial statements then being furnished (and
any exhibits appended thereto) under Section 5.6; and



(b) Event of Default. That the signer has reviewed the relevant terms of this
Agreement and has made (or caused to be made under his supervision) a review of the transactions
and conditions of the Borrower from the beginning of the accounting period covered by the income
statements being delivered therewith to the date of the certificate, and that such review has not
disclosed the existence during such period of any condition or event which constitutes a Default or
an Event of Default or if any such condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Borrower has taken or proposes to take with respect
thereto.



5.8 Inspection. So long as the Borrower is indebted to the Lenders, and subject in all
events to the provisions of Section 10.24 hereof, the Borrower and each of the Restricted
Subsidiaries will, on not less than twenty-four (24) hours prior notice, permit any of the
Administrative Agent’s officers or other representatives (at its own expense, prior to the
occurrence of an Event of Default) to visit and inspect during business hours any of the locations
of the Borrower and each of the Restricted Subsidiaries, to examine and audit all of such parties’
books of account, records, reports and other papers (to the extent not subject to an
attorney-client privilege), to make copies and extracts therefrom and to discuss such parties,
affairs, finances and accounts with its officers, employees and independent certified public
accountants. Representatives of each Lender may accompany the Administrative Agent during each
such inspection and visit. Representatives of any Lender may visit with executive officers of the
Borrower as they may mutually agree.


 


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5.9 Tax Returns and Reports. Subject to Section 10.24, at the Administrative Agent’s
request from time to time, the Borrower and each of the Restricted Subsidiaries shall immediately
furnish the Administrative Agent with copies of the annual federal and state income tax returns of
each such party for such years such parties have not been audited and may be subject to audit. The
Lenders and the Administrative Agent shall not disclose any such returns or other written financial
information to any third party (except as permitted in Section 5.10) without the prior written
consent of the Borrower, or unless required by law or so compelled by order of a court of competent
jurisdiction. The Borrower further agrees that if requested by the Administrative Agent, they
shall immediately furnish the Administrative Agent with copies of all reports filed with any
Governmental Authority or agency, board or commission and shall supply such information with
respect to each of the Restricted Subsidiaries which becomes a publicly traded company.



5.10 Information to Participants and Assignees. Subject to Section 10.24 hereof, the
Administrative Agent and each Lender may divulge to any actual or prospective participant, assignee
or co-lender it may obtain with respect to the Revolving Credit, or any portion thereof, all
information, and furnish to such Person copies of reports, financial statements, certificates, and
documents obtained under any provision of this Agreement or any of the other Loan Documents. The
Administrative Agent and the Lenders shall not divulge the contents of any written financial
information to any other Person other than as set forth above without the prior written consent of
the Borrower, or unless required by law or so compelled by an order of a court of competent
jurisdiction.



5.11 Material Adverse Developments. The Borrower agrees that immediately upon becoming
aware of any development or other information outside the ordinary course of business (excluding
matters of a general economic, financial or political nature) which materially and adversely
affects its, or any of its Subsidiaries’ Property, businesses, prospects, or financial condition,
in all cases taken as a whole on a consolidated basis, or such parties, ability to perform under
this Agreement or any of the other Loan Documents (as applicable), it shall give to the
Administrative Agent telephonic or telegraphic notice specifying the nature of such development or
information and such anticipated effect. In addition, such verbal communication shall be confirmed
by written notice thereof to the Administrative Agent on the same day such verbal communication is
made.



5.12 Additional Parties; Release of Certain Guarantors. (a) In the event that any Person,
other than the Bankruptcy Remote Subsidiary or any Person which is already a Guarantor, becomes a
Material Subsidiary of the Borrower after the Effective Date (each such Material Subsidiary
referred to herein as an “Additional Party” and collectively as the “Additional Parties”), then,
promptly after such Person becomes a Material Subsidiary of the Borrower (but in any event prior to
any capitalization (other than de minimis capitalization) of, or contribution of assets to, such
Material Subsidiary by the Borrower), the Borrower shall cause such Material Subsidiary to execute
and deliver all such agreements, guarantees, suretyship agreements, documents and certificates
(including any amendments to the Loan Documents) and do such other acts and things as the
Administrative Agent may reasonably request in order to
have such Subsidiary guarantee and act as surety for the Obligations and effect fully the purposes
of this Agreement and the other Loan Documents and to provide for payment of the obligations in
accordance with the terms of this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, in such event, such Additional Party shall execute and deliver to the
Administrative Agent a Guarantee (upon the execution of which, such Additional Party shall become a
Guarantor for all of the Obligations and for all purposes hereunder and under the other Loan
Documents).


 


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(b) Notwithstanding the provisions of Section 5.12(a), if any such Additional Party is
organized under the laws of any jurisdiction other than any state of the United States of America,
the Borrower need not cause such Additional Party to become a Guarantor hereunder so long as the
Borrower and/or such other of its Subsidiaries have pledged to the Administrative Agent as
collateral for the Obligations and, to the extent required by the Note Purchase Agreement and any
note issued as permitted by Section 6.11(b)(iv), for the obligations created pursuant thereto, at
least 65% of the issued and outstanding Capital Stock of such Additional Party and, together with
such Additional Party, have executed such agreements, documents and certificates (including
amendments and acknowledgments to any of the Loan Documents), and done such other acts and things
as the Administrative Agent may reasonably request in order (i) to effectuate and evidence such
pledge, (ii) to confirm that such Additional Party is a Restricted Subsidiary for all purposes
hereunder and under the other Loan Documents and (iii) to evidence that the foregoing does not
result in an Event of Default and is otherwise in compliance with and does not cause a default
under the Note Purchase Agreement and any note issued as permitted by Section 6.11(b)(iv). If at
any time thereafter, less than 65% of the issued and outstanding Capital Stock of any such
Restricted Subsidiary which has not become a Guarantor pursuant to the foregoing provisions of this
Section 5.12(b) is pledged to the Administrative Agent, the Borrower shall cause such Restricted
Subsidiary to comply with the provisions of Section 5.12(a) and become a Guarantor hereunder and
under the other Loan Documents.



(c) At the Borrower’s request, any Guarantor which is organized under the laws of any
jurisdiction other than any state of the United States of America shall be released from its
Guarantee upon receipt of notice from the Administrative Agent of compliance, to the Administrative
Agent’s satisfaction, with the requirements of Section 5.12(b) providing for the pledge to the
Administrative Agent as collateral for the Obligations of at least 65% of the issued and
outstanding Capital Stock of such Guarantor mutatis mutandis as if such Guarantor
were an Additional Party as provided in Section 5.12(b).



5.13 Performance of Obligations. The Borrower shall, and shall cause each of the
Restricted Subsidiaries to, perform in all material respects all of their obligations under the
terms of the Accounts Receivable Securitization Documents, the Note Purchase Documents and each
other mortgage, indenture, security agreement, other debt instrument and material contract by which
it is bound or to which it is a party, except where such nonperformance would not, singly or in the
aggregate, have a Material Adverse Effect.


 


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5.14 Further Assurances. At any time and from time to time upon the reasonable request of
the Administrative Agent, the Borrower shall, and shall cause each of the Restricted Subsidiaries
to, execute and deliver such further documents, instruments and agreements, and do such other acts
and things as the Administrative Agent may reasonably request, in order to effect fully the
purposes of this Agreement and the other Loan Documents and to provide for payment of the
Obligations in accordance with the terms of this Agreement and the other Loan Documents.



5.15 Evidence of Intercompany Indebtedness. All Indebtedness owing at any time and from
time to time from the Borrower to any of the Borrower’s Subsidiaries or any of the Borrower’s
Subsidiaries to the Borrower, or to any other such Subsidiary (except for intercompany balances of
the type disclosed in Item 1 of Schedule 4.10 due to or from, and among any of, the Borrower and/or
the Restricted Subsidiaries) shall be evidenced by a master promissory note or notes (the
“Intercompany Notes”), in form and substance satisfactory to the Administrative Agent. All
Intercompany Notes, in the case of any such existing Indebtedness, shall have been executed, or
shall contemporaneously herewith be executed by the applicable obligor(s). True and correct copies
of all Intercompany Notes (including all amendments, replacements and additions executed from time
to time) shall be delivered to the Administrative Agent promptly upon execution thereof accompanied
by a certificate executed by an Authorized Officer to the effect that such copies are true and
correct copies of the original instruments and that all such intercompany Indebtedness is then
evidenced by such Intercompany Notes.



5.16 Tax Shelter Regulations. Neither the Borrower nor any of its Subsidiaries intends to
treat any Loan made hereunder or other transactions under this Agreement as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4). In the event either the
Borrower or any of its Subsidiaries determines to take any action inconsistent with such intention,
it will promptly (1) notify the Administrative Agent thereof, and (2) deliver to the Administrative
Agent a duly completed copy of IRS Form 8886 or any successor form. If the Borrower or any of its
Subsidiaries so notifies the Administrative Agent, the Borrower or such Subsidiary acknowledges
that the Lenders may treat the Loans as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1 and the Administrative Agent will maintain the lists and other
records required by such Treasury Regulation.




SECTION 6. NEGATIVE COVENANTS.



The Borrower covenants that until all of the Borrower’s obligations hereunder to the Lenders
are paid and satisfied in full and the Revolving Credit has been terminated that (it being
understood that the Borrower shall cause each of its Subsidiaries (or, as the case may be, the
Restricted Subsidiaries) to observe and comply in a timely manner with each provision of the
covenants in this Section 6 to the extent applicable to such Subsidiary (or, as the case may be,
such Restricted Subsidiary)):


6.1 Mergers. The Borrower shall not, nor shall it cause or permit any of the Restricted
Subsidiaries to, merge or consolidate or otherwise combine with or into any other Person other than
the merger of a Subsidiary of the Borrower into a Restricted Subsidiary (or
into another Person which thereby becomes a Restricted Subsidiary to the extent such merger is
consummated contemporaneously with and as part of a transaction permitted under Section 6.2) or
into the Borrower, or commence a dissolution or liquidation other than a liquidation or dissolution
of a Restricted Subsidiary pursuant to which all Property thereof is directly and promptly
transferred into the Borrower or another Restricted Subsidiary.



 


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6.2 Acquisitions. The Borrower shall not, nor shall it cause or permit any of the
Restricted Subsidiaries to, acquire all or a material portion of the stock, securities or other
Property of any nature (other than inventory or supplies purchased in the ordinary course of
business of the purchaser) of any Person in any transaction or in any series of related
transactions or enter into any sale and leaseback transaction except as permitted by Section 6.9,
provided, however, that the Borrower and the Restricted Subsidiaries may consummate any such
transaction (a “Permitted Acquisition”) only if: (i) the pro-forma Leverage Ratio of the Borrower,
determined on a consolidated basis as of the end of the immediately preceding fiscal quarter but
after giving effect to the consummation of the acquisition, including any borrowing in connection
therewith, as if such transaction occurred during such immediately preceding fiscal quarter, does
not exceed (a) 3.00 to 1.00 if such immediately preceding fiscal quarter is a fiscal quarter ending
September 30, (b) 2.00 to 1.00 if such immediately preceding fiscal quarter is a fiscal quarter
ending December 31 or June 30, and (c) 1.75 to 1.00 if such immediately preceding fiscal quarter is
a fiscal quarter ending March 31 (ii) no Default or Event of Default hereunder has occurred and is
outstanding or would otherwise be caused by, or would exist after giving effect to, the
consummation of such acquisition; (iii) the acquiring Person must acquire, in the case of a stock
acquisition, at least 80% of the issued and outstanding Capital Stock of the Person being acquired
(provided, however, that if the acquiring Person acquires less than 100% of the issued and
outstanding Capital Stock of the acquired Person, the owners of the unacquired shares must be bound
by a shareholders agreement reasonably satisfactory to the Administrative Agent which shall
include, at a minimum, “drag along” rights in respect of such minority shares); (iv) the Borrower
and the Restricted Subsidiaries shall not assume any new contingent liabilities which would cause,
or be reasonably likely to cause, a Material Adverse Effect; (v) the business of the acquired
entity shall be generally similar to the lines of business of the Borrower and the Guarantors;
(vii) any Person directly or indirectly acquired by the Borrower (and becoming a Material
Subsidiary) shall comply with the provisions of Section 5.12; (vii) the Administrative Agent shall
have received a satisfactory certificate (substantially in the form of Exhibit E attached hereto
and made part hereof) prepared and signed by the chief financial officer or vice president of
finance of the Borrower showing the cost of acquiring the applicable Person exclusive of amounts
attributable to the working capital requirements of such Person and (after taking into effect the
proposed acquisition) pro forma covenant compliance with the financial covenants set forth in
Section 7 herein immediately following the applicable acquisition and projected compliance with
such covenants for no fewer than the next four (4) succeeding fiscal quarters of the Borrower,
setting forth in reasonable detail the calculations used in presenting such costs and projections
and with such supporting information as may be reasonably requested by the Administrative Agent;
and (viii) the Administrative Agent shall have received a satisfactory officer’s certificate from
an Authorized Officer to the effect that the conditions set forth in clauses (i) through (vii) have
been satisfied as of the date of the acquisition.


 


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6.3 Liens and Encumbrances. (a) Except as provided in the Note Purchase Agreement and any
note issued as permitted by Section 6.11(b)(iv), the Borrower shall not, nor shall they cause or
permit any of the Restricted Subsidiaries to: (i) execute a negative pledge agreement with any
Person covering any of its Property, or (ii) create or cause or authorize or agree or consent to
cause or permit, assume or suffer to exist or remain in effect (upon the happening of a contingency
or otherwise), its Property, whether now owned or hereafter acquired, to be subject to a Lien or be
subject to any claim except for the following (the “Permitted Liens”):



(1) Liens securing taxes, assessments or governmental charges or levies or the claims or
demands of materialmen, mechanics, carriers, warehousemen, landlords, and other like Persons, or
Liens evidencing consignment or bailment arrangements with the Borrower or any of the Restricted
Subsidiaries as consignee or bailee, provided the payment thereof is not at the time required by
Section 5.1;



(2) Liens incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance, social security and other like laws and in
connection with leases or trade contracts;



(3) Purchase money security interests (attaching solely to the fixed asset purchased and
securing only the obligation incurred to finance such purchase) from the Borrower or any of the
Restricted Subsidiaries to Persons providing financing for permitted Consolidated Capital
Expenditures provided that each such financing obligation incurred by the Borrower shall not exceed
the lesser of (A) cost or (B) appraised fair market value;




(4) Existing Liens described on Schedule 4.4 hereto;



(5) Liens (other than on Accounts and/or Inventory) deemed to be assumed or taken subject to
by the Borrower or any of the Restricted Subsidiaries in connection with Permitted Acquisitions on
Property of the acquired entity as of the date of the Permitted Acquisition;



(6) Liens which are not otherwise permitted pursuant to this Section, securing Indebtedness
not exceeding $1,000,000 in the aggregate outstanding at any one time;



(7) Trademark license agreements under which the Borrower or any of the Restricted
Subsidiaries, as licensee, is prohibited from granting a security interest in such licenses or in
inventory with the licensed mark to be sold by the Borrower or any of the Restricted Subsidiaries
provided, that at no time shall the value of all licensed inventory exceed the lesser of (i) twenty
(20%) percent of the total value of the Borrower’s or any Restricted Subsidiary’s Inventory or (ii)
$20,000,000 and, provided, further, that such restriction on the granting of a security interest
contained in any such license shall only extend to cover the subject license agreement and the
licensed inventory and that in no event shall such lien restriction apply to the proceeds of any
licensed inventory generated from time to time, including, without limitation, any Accounts
generated from the sale of such licensed inventory; and


 


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(8) Liens in connection with Asset Sales permitted under Section 6.12(b)(v).



(b) If the Borrower or any of its Subsidiaries shall create or assume any Lien upon any of its
Property or income or profits therefrom, other than Liens permitted under this Section 6.3, and
without having such provisions be deemed for any purpose to represent a consent by any Lender or
Lenders to such Lien, it shall make or cause to be made effective provisions whereby the
obligations will be secured by such Lien equally and ratably with any and all other indebtedness
secured thereby.



6.4 Transactions With Affiliates or Subsidiaries. The Borrower shall not, nor shall they
cause or permit any of the Restricted Subsidiaries to, enter into any transaction of any kind or
nature with any Affiliate, including, without limitation, the purchase, sale, transfer or exchange
of Property, or the loaning or giving of funds to any Affiliate or any Subsidiary, excepting (a)
sales of Property (including the sale of receivables and related accounts to the Bankruptcy Remote
Subsidiary) and/or services and co-licensing or co-marketing arrangements or agreements pursuant to
the reasonable requirements of the Borrower’s or any Restricted Subsidiary’s business and upon
terms substantially the same and no less favorable to such party as it would obtain in a comparable
arm’s length transaction with any Person not an Affiliate, and so long as such transaction is not
otherwise prohibited hereunder, (b) loans and transfers of Property by the Borrower to any
Restricted Subsidiary and loans and transfers of Property by any Restricted Subsidiary to the
Borrower or other Restricted Subsidiary, (c) loans by the Borrower or any Restricted Subsidiary to
any of the Borrower’s Subsidiaries (other than the Borrower or a Restricted Subsidiary) after the
date hereof in an aggregate amount as to all such loans under this clause (c) not to exceed
$20,000,000 at any time outstanding in the aggregate after the Effective Date, provided, however,
that a loan may be made by the Borrower or a Restricted Subsidiary to any of the Borrower’s
Subsidiaries (other than the Borrower or a Restricted Subsidiary) which, when aggregated with all
then outstanding loans referenced in this clause (c), would exceed $20,000,000 so long as the
recipient of such loan unconditionally guarantees and becomes surety for all of the Borrower’s
Obligations on terms and conditions and under a written guaranty satisfactory to the Administrative
Agent within sixty (60) days of the funding of such loan, (d) the de minimis transfer by the
Borrower or a Restricted Subsidiary of its Property to any of the Borrower’s Subsidiaries and (e)
transactions expressly permitted pursuant to Sections 6.5, 6.6 and 6.7(k) hereof and payment of
compensation in the ordinary course.



6.5 Guarantees. Excepting (a) the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection, (b) the Guarantees, (c) guarantees by the
Borrower or any Restricted Subsidiary of operating leases of any Subsidiary entered into in the
ordinary course of business, (d) indemnification obligations to directors and officers under
applicable law or set forth in the certificate of incorporation and/or by-laws of the Borrower or
any of its Subsidiaries, (e) guarantees by the Borrower or any Restricted Subsidiary for the
Indebtedness of the Borrower or an Restricted Subsidiary, (f) additional guarantees by the Borrower
and/or any Restricted Subsidiary for the Indebtedness of any Person which, together with
Indebtedness permitted under Section 6.11(b)(v) below shall not exceed $20,000,000 at any
one time outstanding, and (g) guaranties issued in connection with the Accounts Receivable
Securitization, the Borrower shall not, nor shall it cause or permit any of the Restricted
Subsidiaries to, become or be liable in any manner, directly or indirectly, primarily or
secondarily, whether as guarantor, surety, accommodation maker, or otherwise for the existing or
future, matured or contingent indebtedness or obligations of any kind or nature of any Person.


 


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6.6 Dividends and Redemptions. (a) The Borrower shall not, nor shall it cause or permit
any of its Subsidiaries (other than the Bankruptcy Remote Subsidiary) to, directly or indirectly:
declare, pay, authorize or make any form of dividend (except for stock dividends or stock splits)
or return any capital, in cash or property, to its shareholders, their successors or assigns or
repurchase, redeem or retire any of the Capital Stock of the Borrower, except (A) as expressly
permitted by Section 6.1 hereof, (B) dividends payable to the Borrower or any Restricted Subsidiary
by any Subsidiary of the Borrower, (C) if, after giving effect to such repurchase, redemption or
retirement the pro forma Leverage Ratio of the Borrower, determined on a consolidated basis as of
the end of the immediately preceding fiscal quarter, but after giving effect to the consummation of
such repurchase, redemption or retirement, including any borrowing in connection therewith, as if
such repurchase, redemption or retirement occurred during such immediately preceding fiscal
quarter, does not exceed (i) 3.00 to 1.00 if such immediately preceding fiscal quarter is a fiscal
quarter ending September 30, (ii) 2.00 to 1.00 if such immediately preceding fiscal quarter is a
fiscal quarter ending December 31 or June 30, and (iii) 1.75 to 1.00 if such immediately preceding
fiscal quarter is a fiscal quarter ending March 31 and (D) any dividends from Borrower to its
shareholders made in the ordinary course of business of the Borrower.



(b) Notwithstanding the provisions of paragraph (a) above, (i) dividends or redemptions, etc.
otherwise permitted as set forth above shall not be made so long as any Default or Event of Default
is then outstanding or would be outstanding after taking into effect such dividend, redemption or
setting aside of funds, and (ii) no dividend may be declared or paid or redemption made if the
Borrower is not then in compliance with the covenants set forth in Sections 5.6 and 5.7.



6.7 Loans and Investments. The Borrower shall not, nor shall it cause or permit any of the
Restricted Subsidiaries to, make or have outstanding Investments in, any Person, other than (a)
Investments in commercial paper maturing in one (1) year or less from the date of issuance rated at
the time of purchase either A-1 by S&P, P-1 by Moody’s or other similar nationally recognized
credit rating agency of similar standing; (b) Investments in direct obligations of the United
States of America, state or local government, or any agency or instrumentality thereof, maturing in
five (5) years or less from the date of acquisition thereof; (c) Investments in certificates of
deposit maturing within one (1) year from the date of origin issued by, or money market funds on
deposit with, a Lender; (d) Investments in repurchase agreements secured by direct obligations of
the United States of America, state or local government, or any agency thereof, maturing in twelve
(12) months or less and having a market value at the time such repurchase agreement is entered into
at least equal to the amount of the repurchase obligations thereunder, entered

 


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into with a Lender,
(e) loans and guarantees permitted under Sections 6.4 and 6.5 above, (f) Investments which are Permitted Acquisitions, (g) by the Borrower
or any Restricted Subsidiary as permitted under Sections 6.2, (h) Investments in any Restricted
Subsidiary and Investments in any other Subsidiary of the Borrower as such Investments existed as
of the Effective Date, (i) permitted Investments in connection with Asset Sales permitted pursuant
to Section 6.12(b)(i)(C) and Investments resulting from Asset Sales permitted pursuant to Section
6.12(b)(v), (j) other Investments not to exceed $5,000,000 in the aggregate outstanding at any one
time, (k) loans to its employees or directors made by the Borrower or any Restricted Subsidiary for
the purpose of enabling such employees or directors to exercise stock options up to an aggregate
loan balance of $7,500,000 at any time outstanding (as to all loans permitted under this clause
(k)), and (l) Investments in the Bankruptcy Remote Subsidiary from the sale of Assets to the
Bankruptcy Remote Subsidiary as part of the Accounts Receivable Securitization.



6.8 Amendment or Waivers of Certain Documents. (a) The Borrower shall not, nor shall it
cause or permit any of the Restricted Subsidiaries to, amend, modify, supplement or otherwise
change the terms of their respective certificates of incorporation or bylaws or any agreement
entered into by the Borrower or an of the Restricted Subsidiaries with respect to its respective
Capital Stock (other than any amendment, modification, supplement or change which individually, or
together with all amendments, modifications, waivers or changes made, would not be adverse to the
Borrower and the Restricted Subsidiaries taken as a whole, the Administrative Agent or the Lenders)
without the prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld.



(b) The Borrower shall not, nor shall it cause or permit any of the Restricted Subsidiaries
to, amend, modify, supplement or otherwise change, or waive compliance with or consent to a
departure from, any of the terms or provisions of any Existing Debt of the Borrower, or any other
material agreement, including, without limitation, the Accounts Receivable Securitization
Documents, of the Borrower or any of the Restricted Subsidiaries (other than any amendments,
modifications, supplements, changes, waivers and consents which individually, or together with all
other amendments, modifications, supplements, changes, waivers and consents made, would not be
adverse to the Borrower or any of the Restricted Subsidiaries, the Administrative Agent or the
Lenders) without the prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld.



(c) Neither the Borrower nor any Subsidiary shall enter into, suffer to exist or become or
remain subject to any agreement or instrument to which any such Person is a party or by which any
such Person or its Property may be subject or bound, except for the Loan Documents, that would
prohibit or restrict in any manner, directly or indirectly, or require the consent of any Person
to, any amendment to, or waiver or consent to departure from the terms of, any of the Loan
Documents.


 


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6.9 Sale and Lease-Backs. The Borrower shall not, nor shall it cause or permit any of the
Restricted Subsidiaries to, directly or indirectly, become or thereafter remain liable as lessee or
as guarantor or surety with respect to the lessee’s obligations under any lease,
whether an operating lease or a capital lease, of any property (whether real or personal or mixed),
whether now owned or hereafter acquired, (i) which the Borrower or any of the Restricted
Subsidiaries has sold or transferred or is to sell or transfer to any other Person or (ii) which
the Borrower or any of the Restricted Subsidiaries intends to use for substantially the same
purpose as any other property which has been or is to be sold or transferred by the Borrower or any
such Restricted Subsidiary to any Person in connection with such lease, if in the case of clause
(i) or (ii) above, such sale and such lease are part of the same transaction or a series of related
transactions or such sale and such lease occur within one (1) year of each other or are with the
same other Person (such transactions, “Sales and Leasebacks”), provided, however,
that notwithstanding the foregoing limitation, Borrower and its Restricted Subsidiaries shall be
permitted, after the Effective Date and subject to the provisions of Section 6.12, to enter into
Sales and Leasebacks that involve real property with an aggregate fair market value not in excess
of $20 million for all such Sales and Leasebacks.



6.10 Business Conducted. The Borrower shall not, nor shall it cause or permit any of the
Restricted Subsidiaries to, engage, directly or indirectly, in any line of business substantially
different from the business conducted by it immediately prior to the Effective Date, or engage in
business or lines of business which are not reasonably and substantially related thereto.



6.11 Indebtedness. The Borrower shall not, nor shall it cause or permit any of the
Restricted Subsidiaries to (a) make any prepayments of any nature whatsoever (or deposit money or
other Property for the purpose thereof) on any existing or future long-term Indebtedness to any
Person except (x) the conversion of Indebtedness to equity so long as the entire amount of the
portion of the Indebtedness so prepaid is so converted and (y) required prepayments of the
Indebtedness incurred under the Note Purchase Documents and prepayments of such Indebtedness in the
event of a Change of Control (as defined in the Note Purchase Agreement) and similar prepayments
under any notes issued as permitted under Section 6.11(b)(iv) or (b) hereafter incur or be or
become liable for Indebtedness except for (i) Indebtedness to the Lenders pursuant to this
Agreement, (ii) purchase money financing supported by Liens permitted pursuant to Sections
6.3(a)(3) or 6.3(a)(5) above and Indebtedness secured by the existing Liens described in Section
6.3(a)(4), (iii) Indebtedness permitted under Section 6.4(b), (iv) Indebtedness of the Borrower
under note purchase agreements with insurance companies or other institutional investors which
Indebtedness has an initial term of at least five years, provided, that at the time of
incurrence of any such Indebtedness the Borrower demonstrates to the reasonable satisfaction of the
Administrative Agent that after giving pro forma effect to the incurrence thereof, the Borrower
would be in compliance with the covenants in Sections 7.1 and 7.2 hereof; and (v) additional
Indebtedness in an aggregate principal amount, together with all obligations described in Section
6.5(f) herein, not exceeding $20,000,000 at any one time outstanding, provided that Indebtedness of
Restricted Subsidiaries which are not Guarantors incurred other than to the Borrower or one or more
of the Restricted Subsidiaries shall not exceed an aggregate principal amount of $10,000,000 at any
one time outstanding.


 


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6.12 Restrictions on Fundamental Changes; Asset Sales. The Borrower shall not, nor shall
it cause or permit any of the Borrower’s Subsidiaries to, (a) materially alter its corporate,
partnership, capital or legal structure other than alterations of the structure of (i) Restricted
Subsidiaries as permitted in Sections 6.1, 6.2, 6.9 and 6.12(a) above, (ii) any Subsidiaries which
are not Restricted Subsidiaries so long as (A) such alteration would not give rise to a Material
Adverse Effect and (B) no Default or Event of Default has occurred or is continuing or would occur
after taking into effect such alteration or (b) make or effect any Asset Sale excepting (i) Asset
Sales made (A) at a time when no Default of Event or Default is outstanding hereunder or would be
outstanding after taking into effect such Asset Sale, (B) the consideration received shall be an
amount at least substantially equal to the fair market value of the Property which is the subject
of the Asset Sale, as certified to the Administrative Agent by the Borrower’s chief financial
officer or vice president of finance; (C) at least 50% of the consideration received therefrom
shall be cash; (D) such Asset Sales are not to an Affiliate of the seller; and (E) the assets sold
in all transactions permitted hereby after the Effective Date (exclusive of the transaction
referred to in the proviso of Section 6.9) shall have an aggregate book value of not more than
$20,000,000; (ii) Asset Sales set forth on Schedule 6.12 hereto, (iii) transactions permitted under
Section 6.1, 6.2 or Section 6.4 above; (iv) the Borrower and any of its Subsidiaries may from time
to time abandon any personal Property of the Borrower or such Subsidiary which is not the business
of the Borrower or such Subsidiary and cannot be sold; (v) at a time when no Default or Event of
Default is outstanding hereunder or would be outstanding after taking into effect such Asset Sale,
sales of minority interests of Capital Stock of any Subsidiary of the Borrower (other than a
Restricted Subsidiary) to any employees thereof; (vi) Asset Sales in connection with the Accounts
Receivable Securitization; and (vii) sales or transfers of accounts receivable of the Borrower or
any of its Subsidiaries made in connection with any agreement, including but not limited to credit
insurance, that seeks to limit the risk of default by or bankruptcy of any customer of the Borrower
or any of its Subsidiaries on any such accounts receivable owed to the Borrower or any of its
Subsidiaries for merchandise delivered or services rendered by the Borrower or any of its
Subsidiaries to such customer; provided that (A) no Default or Event of Default has occurred and is
continuing at the time of such sale or transfer and (B) the consideration received for such
accounts receivable shall be an amount at least substantially equal to the fair market value of the
accounts receivable which is the subject of the Asset Sale, as certified to the Administrative
Agent by the Borrower’s chief financial officer or vice president of finance.



6.13 Agreements Regarding Dividends. Neither the Borrower nor any Restricted Subsidiary
shall create or otherwise cause or suffer to exist or become effective any consensual encumbrance
or restriction of any kind (whether arising by operation of law, by agreement, by its articles or
certificate of incorporation, bylaws or other constituent documents of such Person, or otherwise)
on the ability of any Subsidiary of the Borrower to (i) pay dividends or make any other
distribution on any of such Subsidiary’s Capital Stock owned by the Borrower or any other
Subsidiary of the Borrower, (ii) make loans or advances to, or guarantee any Indebtedness or any
other obligation of, the Borrower or any other Subsidiary of the Borrower or (iii) transfer any of
its Property to the Borrower or any other Subsidiary of the Borrower, except restrictions pursuant
to (A) the Loan Documents, (B) applicable law, (C) the
Accounts Receivable Securitization Documents and (D) the Note Purchase Agreement and any note
issued as permitted under Section 6.11(b)(iv).


 


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6.14 Miscellaneous Covenants.



(a) The Borrower shall not, nor shall it cause or permit any of the Restricted Subsidiaries
to, become or be a party to any Hedge Agreement entered into purely for speculative purposes or to
any contract or agreement which materially impairs such party’s ability to perform under this
Agreement, or under any other instrument, agreement or document to which the Borrower or such
Restricted Guaranty is a party or by which it is or may be bound.



(b) The Borrower shall not, nor shall it cause or permit any of the Restricted Subsidiaries
to, carry or purchase any “margin security” within the meaning of Regulations U, T or X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II except in accordance with
such Regulations.



(c) The Borrower and its Subsidiaries and their respective Affiliates and agents shall not
knowingly (a) conduct any business or engage in any transaction or dealing with any Blocked Person,
including the making of or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person; (b) deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to Executive Order No. 13224; or (c) engage in
or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or
the USA Patriot Act. The Borrower shall deliver to the Administrative Agent any certification or
other evidence requested from time to time by the Administrative Agent, on its own behalf or on
behalf of any Lender, in its sole discretion, confirming the Borrower’s compliance with this
Section 6.14(c).




SECTION 7. FINANCIAL COVENANTS.



The Borrower shall comply with the following financial covenants (each to be measured as of
the end of each of the Borrower’s fiscal quarters during the applicable respective measurement
periods:



7.1 Fixed Charge Coverage Ratio. The Borrower shall have and maintain a Fixed Charge
Coverage Ratio (measured on a rolling four quarter basis) of not less than (a) 1.25 to 1.00 when
the aggregate amount of the current portion of principal payments on long-term Indebtedness
(excluding the Revolving Credit) of the Borrower, on a consolidated basis, during such four quarter
period then ending is equal to or greater than $1,000,000 and (b) 1.35 to 1.00 when the aggregate
amount of the current portion of principal payments on long-term Indebtedness (excluding the
Revolving Credit) of the Borrower, on a consolidated basis, during such four quarter period then
ending is less than $1,000,000.


 


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7.2 Leverage Ratio. The Borrower shall not permit, as of the end of each fiscal quarter of
the Borrower ending on the dates set forth below, the Leverage Ratio to exceed the ratio set forth
below opposite such dates:



	 	 	 	 	 
	Period	 	Ratio	 
	 
	 	 	 	 
	September 30
	 	 	3.50 to 1.00	 
	December 31 and June 30
	 	 	2.50 to 1.00	 
	March 31
	 	 	2.25 to 1.00	 






7.3 Consolidated Capital Expenditures. The Borrower shall not incur Consolidated Capital
Expenditures during any consecutive four fiscal quarter period (measured on a rolling four quarter
basis) in excess of (i) $20,000,000 for any such four quarter period ending on or before March 31,
2009, or (ii) $15,000,000 for any such four quarter period ending after March 31, 2009.




SECTION 8. DEFAULT



8.1 Events of Default. Each of the following events shall constitute an event of default
(an “Event of Default”):



(a) Payments. The Borrower fails to make any payment of principal or interest under
the Revolving Credit on its due date; or



(b) Other Charges. The Borrower fails to pay any other charges, fees, Expenses or
other monetary obligations owing to any Lender or the Administrative Agent or the Fronting Lender
arising out of or incurred in connection with this Agreement when such payment is due and payable
and such breach is not cured within five (5) days of the Borrower’s receipt of notice from the
Administrative Agent of such breach; or



(c) Particular Covenant Defaults. The Borrower fails to perform or observe any
covenant or undertaking contained in this Agreement, (other than with respect to the covenants
contained in Sections 5.6(b), 6.1 through 6.14 and Sections 7.1 through 7.3 inclusive, as to which
no notice and cure period shall be applicable), and such breach is not cured within fifteen (15)
days of the Borrower’s receipt of notice thereof from the Administrative Agent, or if such breach
could not be cured by the Borrower due to circumstances beyond the Borrower’s control within such
fifteen (15) day period, for such longer period as may be necessary for the Borrower to cure such
default (in no event to exceed a total of thirty (30) days from any such notice) so long as the
Borrower is diligently taking all necessary steps to cure any such default(s); or



(d) Financial Information. Any statement, report, financial statement, or certificate
made and delivered by the Borrower or any of its officers, employees or agents, to the
Administrative Agent or any Lender, is not true and correct, in all material respects, when made
(provided, however, that an Event of Default shall not be deemed to have occurred
hereunder because interim financial statements are subject to normal and recurring year end
adjustments in the ordinary course); or


 


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(e) Uninsured Loss. There shall occur any uninsured damage to or loss, theft, or
destruction of any portion of any Property of the Borrower or any of the Restricted Subsidiaries in
excess of $5,000,000; or



(f) Warranties or Representations. Any warranty, representation or other statement by
or on behalf of any of the Borrower or the Restricted Subsidiaries contained in or pursuant to this
Agreement, or in any of the Loan Documents or in any other existing or future agreement between the
Borrower and/or any of the Borrower’s Subsidiaries, on the one hand, and the Administrative Agent
and/or any one or more of the Lenders, on the other hand, is false, erroneous, or misleading in any
material respect when made; or



(g) Agreements with Others. The Borrower or any of the Restricted Subsidiaries shall
(i) default beyond any grace period under any agreement(s) with any creditor(s) of the Borrower or
any such Restricted Subsidiary or holder(s) of Indebtedness from the Borrower or any such
Restricted Subsidiary which has an aggregate outstanding principal balance of $2,000,000, if the
effect of such default is to cause or enable the holder(s) of such party’s obligations to declare
any such obligation of such party to become due (whether or not actually accelerated) prior to its
maturity date or prior to its regularly scheduled date of payment or (ii) fail to pay any
Indebtedness at final maturity; or



(h) Other Agreements with Lenders. The Borrower or any of the Restricted Subsidiaries
materially breaches or violates the terms of, or if a default (subject to any cure periods
contained therein) or an Event of Default occurs under any other existing or future agreement
(related or unrelated) between the Borrower and/or any of the Restricted Subsidiaries, on the one
hand, and the Administrative Agent and/or any or all of the Lenders, on the other hand; or



(i) Judgments. Any final, non-appealable judgment for the payment of $5,000,000 or
more or final, non-appealable judgments aggregating $5,000,000 or more (not acknowledged, in
writing, by the Borrower’s or applicable Restricted Subsidiary’s insurance company as
unconditionally covered by insurance or not stayed within five (5) days of entry) shall be rendered
by a court of competent jurisdiction against the Borrower or any of the Restricted Subsidiaries; or



(j) Assignment for Benefit of Creditors, etc. The Borrower or any of the Restricted
Subsidiaries makes or proposes an assignment for the benefit of creditors generally or offers a
composition or extension to creditors; or



(k) Bankruptcy, Dissolution, etc. Any action is taken for the dissolution or
liquidation of the Borrower or any of the Restricted Subsidiaries not otherwise permitted
hereunder, or if there shall be commenced any case or proceeding for reorganization or liquidation
of any of Borrower’s or Restricted Subsidiary’s debts under the Bankruptcy Code or
any other state or federal law, now or hereafter enacted for the relief of debtors, whether
instituted by or against such party, provided that as to any such action or proceeding commenced
against the Borrower or any Restricted Subsidiary, the Borrower or such Restricted Subsidiary shall
have forty-five (45) days to have such action or proceeding dismissed, it being understood that
prior to such dismissal, the Lenders and the Administrative Agent shall not be obligated to make
Advances to or for the benefit of the Borrower; or


 


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(l) Receiver. There shall be appointed a receiver, liquidator, custodian, trustee or
similar official or fiduciary for (i) the Borrower or any Restricted Subsidiary, (ii) a substantial
part of the Borrower’s or any Restricted Subsidiary’s Property or (iii) for such part of the
Property of the Borrower or any Restricted Subsidiary, such control over which would give rise to a
Material Adverse Effect; or



(m) Execution Process, etc. There shall be issued any execution or distraint process
against the Borrower or any Restricted Subsidiary, or any Property of the Borrower or any
Restricted Subsidiary, which execution is not released, stayed or dismissed within fifteen (15)
days of its entry, it being understood that nothing herein shall in any way impair the
Administrative Agent’s and the Lenders’ rights to immediately effect an offset against any asset of
the Borrower or any Restricted Subsidiary; or



(n) Termination of Business. The Borrower or any Restricted Subsidiary ceases any
material portion of its respective business operations as presently conducted unless, in the case
of a Restricted Subsidiary, such Restricted Subsidiary immediately merges into or consolidates with
or is dissolved or liquidated into the Borrower or another Restricted Subsidiary; or



(o) Pension Benefits, etc. The Borrower or any Restricted Subsidiary fails to comply
with ERISA so that grounds exist to permit the appointment of a trustee under ERISA to administer
the Borrower’s or such Restricted Subsidiary’s employee plans or to allow the Pension Benefit
Guaranty Corporation to institute proceedings to appoint a trustee to administer such plan(s), or
to permit the entry of a Lien to secure any deficiency or claim; or



(p) Transfer of Stock. The Borrower shall not be the owner (directly or indirectly)
of at least 100% of all of the issued and outstanding voting stock of each Restricted Subsidiary
(or 80% in the case of Restricted Subsidiaries formed in connection with Permitted Acquisitions),
provided, however, that the foregoing shall not prohibit mergers, dissolutions or
stock dividends expressly permitted by Sections 6.1 or 6.4 hereof; or



(q) Investigations. Evidence shall be received by the Administrative Agent or any
Lender that the Borrower or any Restricted Subsidiary is or has been engaged in any type of
activity which, in the Administrative Agent’s reasonable judgment, could result in the forfeiture
of Property of the Borrower or any Restricted Subsidiary to any Governmental Authority other than a
forfeiture under Environmental Laws or products liability law which would not give rise to a
Material Adverse Effect; or


 


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(r) Guarantees. Any Guarantee ceases to be effective or any Guarantor disclaims
liability under such Guarantee or attempts to revoke or otherwise terminate its respective
Guarantee for any reason and to any extent, except to the extent of a merger, consolidation or
liquidation permitted hereunder; or




(s) Change of Control. There shall occur any Change of Control.



8.2 Rights and Remedies on Default.



(a) Upon the occurrence of a Default or an Event of Default, the Administrative Agent may, in
its discretion, or shall, upon the direction of the Majority Lenders, withhold or cease making
Advances under the Revolving Credit.



(b) In addition to all other rights, options and remedies granted or available to the
Administrative Agent under this Agreement or the other Loan Documents (each of which is also then
exercisable by the Administrative Agent), the Administrative Agent may, in its discretion, or
shall, upon the direction of Majority Lenders, upon the occurrence and during the continuance of an
Event of Default, terminate the Revolving Credit, accelerate the Obligations (other than any
Obligations under any Hedge Agreement which may be accelerated only by the Lender which is a party
thereto pursuant to the terms of such Hedge Agreement) and exercise any rights and remedies
available hereunder or under any of the other Loan Documents, at law or in equity to enforce the
Lenders, and the Administrative Agent’s rights and collect the obligations, all without demand,
notice, presentment or protest or further action of any kind (it also being understood that the
occurrence of any of the events or conditions set forth in subparagraphs (j), (k) or (l) of Section
8.1 above shall automatically cause an acceleration of the Obligations). Nevertheless, if at any
time within sixty (60) days after acceleration of the Obligations, (i) the Borrower shall pay all
accrued and unpaid interest and all payments on account of the principal Obligations, which shall
have become due otherwise than by acceleration (with interest, to the extent permitted by law, on
overdue interest, at the Alternate Base Rate) and all other fees or Expenses then owed hereunder
and (ii) all Defaults and Events of Default (other than non-payment of principal of and accrued
interest on the Advances and the Revolving Credit Notes due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 9.15, then the Majority Lenders, by
written notice to the Borrower, may (in their absolute and sole discretion) rescind and annul the
acceleration and its consequences; but such action shall not affect any subsequent Default or Event
of Default or impair any right consequent thereto. The provisions of the immediately preceding
sentence are intended merely to bind the Lenders to a decision that may be made at the election of
the Lenders and are not intended in any manner or under any circumstances whatsoever to benefit the
Borrower or any of the Guarantors and do not grant in any manner or under any circumstances
whatsoever the Borrower or Guarantor the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.


 


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(c) Upon the occurrence and during the continuance of an Event of Default and in addition to
all other rights and remedies available to the Administrative Agent, the Borrower shall upon demand
of the Administrative Agent, deposit in a non-interest bearing
account with the Administrative Agent, as cash collateral for the Obligations, an amount equal
to the aggregate Letter of Credit Coverage Requirement, and the Borrower hereby pledges to the
Administrative Agent and the Lenders, and grant to the Administrative Agent and the Lenders a
security interest in, all such cash as security for the Obligations. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment of drafts drawn
under any Letters of Credit, and the unused portion thereof after all the Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other Obligations of the
Borrower hereunder and under the Notes. After all Letters of Credit shall have expired or been
fully drawn upon, all Obligations with respect thereto shall have been satisfied and all other
Obligations of the Borrower hereunder and under the Notes shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the Borrower. The Borrower
shall execute and deliver to the Administrative Agent, for the account of the Fronting Bank and the
Lenders, such further documents and instruments as the Administrative Agent may request to evidence
the creation and perfection of the within security interest in such cash collateral account.
Except as expressly provided above in this Section, presentment, demand, protest and all other
notices of any kind are expressly waived.



8.3 Nature of Remedies. All rights and remedies granted the Administrative Agent and/or
the Lenders hereunder and under any of the other Loan Documents, or otherwise available at law or
in equity, shall be deemed concurrent and cumulative, and not alternative remedies, and the
Administrative Agent and/or the Lenders may proceed with any number of remedies at the same time
until all Obligations are satisfied in full. The exercise of any one right or remedy shall not be
deemed a waiver or release of any other right or remedy, and the Administrative Agent, upon the
occurrence of an Event of Default, may proceed against the Borrower, at any time, under any
agreement, document or instrument, with any available remedy and in any order.



8.4 Set-Off. If any bank account of the Borrower with the Administrative Agent, any Lender
or any participant is attached or otherwise liened or levied upon by any third party, the
Administrative Agent and/or such Lender (and/or any participant) need not await the running of any
applicable grace period hereunder, but the Administrative Agent and/or such Lender (and/or such
participant) as agent for the Lenders and the Administrative Agent shall have and be deemed to have
the immediate right of set-off and may apply the funds or amount thus set-off against any of the
Obligations. Any such funds shall be held for the ratable benefit of all Lenders and shall be
remitted to the Administrative Agent for distribution to all Lenders in accordance with each
Lender’s Pro Rata Percentage (subject to such sharing agreements as the Administrative Agent may
reasonably determine to effectuate the terms of this Agreement).


 


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SECTION 9. THE ADMINISTRATIVE AGENT.



9.1 Appointment and Authorization. Each Lender, and each subsequent holder of any of the
Revolving Credit Notes by its acceptance thereof, hereby irrevocably appoints and authorizes the
Administrative Agent to take such action on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto. The Administrative
Agent will handle all transactions relating to the Revolving Credit and all other Obligations,
including without limitation, all transactions with respect to Letters of Credit, this Agreement,
and all of the other Loan Documents, in accordance with its usual banking practices. The Borrower
is hereby authorized by the Lenders to deal solely with the Administrative Agent in all
transactions which affect the Lenders under this Agreement and the Loan Documents. The rights,
privileges and remedies accorded to the Administrative Agent hereunder shall be exercised by the
Administrative Agent on behalf of all of the Lenders.



9.2 General Immunity. In performing its duties as the Administrative Agent hereunder, the
Administrative Agent will take the same care as it takes in connection with loans in which it alone
is interested, using reasonable and prudent banking practices. However, neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it or them hereunder or in connection herewith except as such actions or
omissions are caused from its or their own gross negligence or willful misconduct unless such
action was taken or omitted to be taken by the Administrative Agent at the direction of the
Majority Lenders.



9.3 Consultation with Counsel. The Administrative Agent may consult with legal counsel and
other experts selected by it and shall not be liable for any action taken or suffered in good faith
by it in accordance with the advice of such counsel.



9.4 Documents. The Administrative Agent shall not be under a duty to examine into or pass
upon the effectiveness, genuineness or validity of this Agreement or any of the Revolving Credit
Notes or any of the other Loan Documents, and the Administrative Agent shall be entitled to assume
that the same are valid, effective and genuine and what they purport to be. In addition, the
Administrative Agent shall not be liable for failing to make any inquiry concerning the accuracy,
performance or observance of any of the terms, provisions or conditions of such instrument,
document or agreement. The Administrative Agent shall furnish to the Lenders copies of all notices
and other documents (including financial statements) received from the Borrower hereunder.



9.5 Rights as a Lender. With respect to its Pro Rata Share of the Revolving Credit, the
Administrative Agent shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the term “Lender” or
“Lenders” shall, unless the context otherwise indicates, include the Administrative Agent in its
capacity as a Lender. Subject to the provisions of this Agreement, the Administrative Agent and
any Lender may accept deposits from, lend money to and generally engage in any kind of banking or
trust business with the Borrower and any of its Affiliates and Subsidiaries as if it were not the
Administrative Agent.


 


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9.6 Responsibility of the Administrative Agent. It is expressly understood and agreed that
the obligations of the Administrative Agent hereunder are only those expressly set forth in this
Agreement and that the Administrative Agent shall be entitled to assume that no Event of Default,
and no event that, with notice, or lapse of time or both would, if unremedied,
constitute an Event of Default, has occurred and is continuing, unless the Administrative Agent has
actual knowledge of such fact. Except to the extent the Administrative Agent is required by the
Lenders pursuant to the express terms hereof to take a specific action, the Administrative Agent
shall be entitled to use its discretion with respect to exercising or refraining from exercising
any rights which may be vested in it by, or with respect to taking or refraining from taking any
action or actions that it may he able to take under or in respect of, this Agreement and the Loan
Documents. The Administrative Agent shall incur no liability under or in respect of this Agreement
and the other Loan Documents by acting upon any notice, consent, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or to be signed by the proper party
or parties, or with respect to anything that it may do or refrain from doing in the reasonable
exercise of its judgment, or that may seem to it to be necessary or desirable under the
circumstances. It is agreed among the Administrative Agent and the Lenders that the Administrative
Agent shall have no responsibility to carry out audits or otherwise examine the books and records
or properties of the Borrower or any of the Borrower’s Subsidiaries, except as the Administrative
Agent in its sole discretion deems appropriate or unless directed to do so by the Majority Lenders.
The relationship between the Administrative Agent and each Lender is and shall be that of agent
and principal only and nothing herein shall be construed to constitute the Administrative Agent a
joint venturer with any Lender, a trustee or fiduciary for any of the Lenders or for the holder of
a participation herein nor impose on the Administrative Agent duties and obligations other than
those set forth herein. Nothing contained in this Section 9.6 is intended to relieve the
Administrative Agent from liability for its gross negligence or its willful misconduct unless any
act, omission or conduct of the Administrative Agent is or has been directed by the Majority
Lenders.



9.7 Collections and Disbursements.



(a) The Administrative Agent will have the right to collect and receive all payments of the
Obligations, and to collect and receive all reimbursements for draws made under the Letters of
Credit, together with all fees, charges or other amounts due under this Agreement and the Loan
Documents, and the Administrative Agent will remit to each Lender, according to its Pro Rata
Percentage, all such payments actually received by the Administrative Agent (subject to any
required clearance procedures) on the same Business Day of receipt thereof (provided such payments
shall have been received by the Administrative Agent prior to 1:00 p.m., Philadelphia time, on such
Business Day) otherwise on the next Business Day.



(b) If any such payment received by the Administrative Agent is rescinded or otherwise
required to be returned for any reason at any time, whether before or after termination of this
Agreement and the Loan Documents, each Lender will, upon written notice from the Administrative
Agent promptly pay over to the Administrative Agent its Pro Rata Percentage of the amount so
rescinded or returned, together with interest and other fees thereon if also required to be
rescinded or returned.


 


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(c) On the same Business Day on which notice is given to the Lenders by the Administrative
Agent (or on the next following Business Day if such notice is not given
by the Administrative Agent prior to 1:00 p.m., Philadelphia time) with respect to any payment
which has been made on account of any Letter of Credit, which notice shall state the date and
amount of such payment, each Lender (other than the Fronting Lender) shall remit to the Fronting
Lender its Pro Rata Percentage of the payment in respect of such Letter of Credit. The obligations
of the Lenders hereunder are unconditional, not subject to setoff and irrevocable and may not be
terminated at any time.



(d) All payments by the Administrative Agent and the Lenders to each other hereunder shall be
in lawful money of the United States of America and at all times maintain proper books of account
and records reflecting the interest of each Lender in the Revolving Credit and the Letters of
Credit, in a manner customary to the Administrative Agent’s keeping of such records, which books
and records shall be available for inspection by each Lender at reasonable times during normal
business hours, at such Lender’s sole expense. The Administrative Agent may treat the payees of
any Revolving Credit Note as the holder thereof until written notice of the transfer thereof shall
have been received by the Administrative Agent.



(e) The Lenders and any subsequent holder by acceptance of a Revolving Credit Note agree among
themselves that (i) with respect to all amounts received by them which are applicable to the
payment of principal of or interest on the Revolving Credit Notes and amounts payable in respect of
any fees or commissions hereunder, equitable adjustment will be made so that, in effect, all such
amounts will be shared among the Lenders pro rata based on their respective Pro Rata Share
of the Obligations with respect to which such payment was received, whether received by voluntary
payment, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action
or by the enforcement of any or all of the Revolving Credit Notes, (ii) if any of them shall
exercise any right of counterclaim, setoff, banker’s lien or similar right with respect to amounts
owed by the Borrower or any Guarantor hereunder or under the Revolving Credit Notes that Lender or
holder, as the case may be, shall apportion the amount recovered as a result of the exercise of
such right pro rata in accordance with each Lender’s Pro Rata Percentage, and (iii) if any of them
shall thereby through the exercise of any right of counterclaim, setoff, banker’s lien or otherwise
or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code,
receive payment or rejection of a proportion of the aggregate amount of principal and interest due
with respect to the Revolving Credit Notes held by a Lender or holder, or any other amount payable
hereunder which is greater than the proportion received by any other holder of the Revolving Credit
Notes in respect of the aggregate amount of principal and interest due with respect to the
Revolving Credit Notes held by it or any other amount payable hereunder that Lender or that holder
of the Revolving Credit Notes receiving such proportionately greater payments shall (y) notify each
other Lender and the Administrative Agent of such receipt and (z) purchase for cash, without
recourse or warranty, participations (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in the Revolving Credit Notes held by the other holders so that all such
recoveries of principal and interest with respect to the Revolving Credit Notes shall be
proportionate to their respective Pro Rata Percentages; provided, however, that if
all or part of such proportionately greater payment received by such purchasing holder is
thereafter recovered from such holder, those purchases shall be rescinded and the purchase prices
paid for such participations shall be
returned to that holder to the extent of such recovery, but without interest. The Borrower
expressly consents to the foregoing arrangement.


 


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9.8 Indemnification. The Lenders severally and not jointly hereby each indemnify the
Administrative Agent ratably according to the respective amounts of their Pro Rata Percentages to
the extent not paid or otherwise reimbursed by the Borrower, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this Agreement, any other
Loan Document or the Revolving Credit or any action taken or omitted by the Administrative Agent
under or related to this Agreement, any other Loan Document or the Revolving Credit, provided that
no Lender shall be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent’s gross negligence or willful misconduct unless such action was taken or
omitted to be taken by the Administrative Agent at the direction of the Majority Lenders. The
Administrative Agent shall have the right to deduct, from any amounts to be paid by the
Administrative Agent to any Lender hereunder, any amounts owing to the Administrative Agent by such
Lender by virtue of this paragraph.



9.9 Expenses.



(a) All out-of-pocket costs and out-of-pocket expenses incurred by the Administrative Agent
for which the Borrower is responsible hereunder and not reimbursed on demand by the Borrower, in
connection with the analysis, negotiation, preparation, consummation, amendment, administration,
refinancing, termination, work-out, forbearance and enforcement of the Loan Documents, the
Revolving Credit or the Obligations (including, without limitation, reasonable counsel and expert
fees and expenditures to enforce, protect, preserve, analyze, negotiate and defend the
Administrative Agent’s and each Lender’s rights and interest under the Loan Documents) shall be
shared and paid on demand by the Lenders pro rata based on their respective Pro Rata Percentages.



(b) The Administrative Agent may deduct from payments or distributions to be made to the
Lenders such funds as may be necessary to pay or reimburse the Administrative Agent for such costs
or expenses.



9.10 No Reliance. Each Lender has entered into this Agreement and the Loan Documents
solely upon its own independent investigation and is not relying upon any information supplied by
or any representations made by the Administrative Agent. Each Lender shall continue to make its
own analysis and evaluation of the Borrower and the Guarantors. The Administrative Agent makes no
representation or warranty and assumes no responsibility with respect to the financial condition,
prospects or results of operations of the Borrower or any of the Guarantors, any obligor or any
account debtor of the Borrower; the accuracy, sufficiency or currency of any information concerning
the financial condition, prospects or results of operations of the Borrower or any of its
Subsidiaries; the sufficiency, authenticity, legal effect, validity or enforceability of the Loan
Documents; or with regard to any other matters, whether similar or
dissimilar. The Administrative Agent assumes no responsibility or liability with respect to the
collectibility of the obligations or the performance by the Borrower or any of its Subsidiaries of
any obligation under the Loan Documents.


 


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9.11 Reporting. During the term of this Agreement, the Administrative Agent will promptly
furnish each Lender with copies of all financial statements and reports with respect to the
Borrower or any of the Restricted Subsidiaries actually received by the Administrative Agent
pursuant to Section 5 of this Agreement. The Administrative Agent will promptly notify the Lenders
when it receives actual knowledge of any Event of Default under the Loan Documents.



9.12 Resignation of the Administrative Agent. The Administrative Agent may resign at any
time upon giving thirty (30) days prior written notice thereof to the Lenders and the Borrower.
Upon the resignation of the Administrative Agent, the Lenders (exclusive of the Administrative
Agent) shall have the right to appoint a successor to the Administrative Agent by majority vote of
the Lenders (exclusive of the Administrative Agent and based upon the percentages of the total Pro
Rata Shares of such other Lenders). Upon the acceptance of its appointment as a successor to the
Administrative Agent hereunder, by such successor to the Administrative Agent, such successor to
the Administrative Agent shall thereupon succeed to and become vested with all rights, powers,
obligations and duties of the retiring Administrative Agent and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any retiring Administrative
Agent’s resignation as Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent.



9.13 Action on Instructions of Lenders. With respect to any provision of this Agreement or
any of the other Loan Documents, or any issue arising hereunder or thereunder, concerning which the
Administrative Agent is authorized to act or withhold action by direction of the Lenders (or, if
applicable, the Majority Lenders), the Administrative Agent shall in all cases be fully protected
in so acting, or in so refraining from acting, hereunder or thereunder in accordance with written
instructions signed by the Lenders (or, if applicable, the Majority Lenders). Such instructions
and any action taken or failure to act pursuant thereto shall be binding on all Lenders and on all
holders of the Revolving Credit Notes.



9.14 Several Obligations. The obligations of each Lender hereunder and under each of the
other Loan Documents are several, and neither the Administrative Agent nor any other Lender shall
be responsible for the obligations and commitments of any other Lender.



9.15 Amendments.



(a) Except as expressly provided herein, the Administrative Agent shall have the sole and
exclusive right to, service, administer and monitor the Revolving Credit and the Loan Documents,
including without limitation, the right to exercise all rights, privileges and options under the
Loan Documents, including the credit judgment with respect to the making
of Advances and the determination as to the basis on which and the extent to which Advances
may be made.


 


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(b) Notwithstanding anything to the contrary contained in subparagraph (a) above, prior to an
acceleration of the Obligations, the Administrative Agent shall not, without the prior written
consent of all Lenders: (i) extend the Maturity Date or any payment date under the Revolving
Credit Notes or under this Agreement, including without limitation, any mandatory prepayment date
under Section 2.11 hereof, (ii) decrease any interest rate on the Revolving Credit (unless
otherwise expressly provided for herein) or any fee (except fees that are solely for the account of
the Fronting Lender) chargeable to the Borrower by the Lenders and/or the Administrative Agent
and/or the Fronting Lender hereunder or elsewhere, (iii) change the Available Commitment or the Pro
Rata Share or Pro Rata Percentage of any of the Lenders except by permitted assignments (or unless
otherwise expressly provided for herein), (iv) release any obligor from the Obligations (including
releasing any Guarantor from its obligations under its respective Guarantee), except in connection
with termination of the Revolving Credit and full payment and satisfaction of all obligations (v)
change the definition of Majority Lenders, (vi) consent to the assignment or delegation by the
Borrower or any of the Guarantors of its respective obligations under any Loan Document, (vii)
change the definition of Available Commitment, (viii) change the definition of Outstandings; or
(ix) modify this Subsection 9.15(b) or any of Sections 2.9(f), 2.10, 2.12, 8.4, 10.5, 10.10 or
10.15.



(c) Notwithstanding anything to the contrary contained in subparagraph (a) above, prior to an
acceleration of the Obligations, the Administrative Agent shall not, without the prior written
consent of the Majority Lenders: (i) enter into any written amendment to any of the Loan Documents;
(ii) waive the Borrower’s compliance with the terms and conditions of the Loan Documents or any
Event of Default hereunder or thereunder; or (iii) consent to the Borrower taking any action which,
if taken, would constitute an Event of Default under this Agreement or under any of the Loan
Documents. Further, prior to an acceleration of the Obligations, the Administrative Agent shall
not, without the prior written consent of the Majority Lenders, the Fronting Lender and the Swing
Line Lender waive, amend, modify, restate or delete the provisions set forth in Section 2.16
hereof.



(d) After an acceleration of the Obligations, the Administrative Agent shall have the sole and
exclusive right, after consultation (to the extent reasonably practicable under the circumstances)
with all Lenders, to exercise or refrain from exercising any and all rights, remedies, privileges
and options under the Loan Documents or available at law or in equity, to protect the rights of the
Lenders and collect the obligations, including without limitation, instituting and pursuing all
legal actions brought against the Borrower or to collect the Obligations, or defending any and all
actions brought by the Borrower; incurring Expenses or otherwise making expenditures to protect the
Revolving Credit or the Lenders’ rights or remedies; modifying the Revolving Credit or the Loan
Documents; and releasing or settling any amounts owing under the Obligations. Notwithstanding this
subsection (d), after an acceleration of the Obligations, the Administrative Agent may not, without
the prior written consent of the Majority Lenders, enter into a written agreement with the Borrower
which provides that the
obligations are not immediately due and payable or which provides that the Administrative
Agent will forebear from exercising its remedies hereunder, and may not without the prior written
consent of all of the Lenders (i) compromise or satisfy the Obligations for less than payment in
full; (ii) reduce any rate of interest charged to any outstanding Advance; or (iii) release the
Borrower or any of the Guarantors from its obligations hereunder or under the Guarantees (as
applicable).


 


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9.16 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless it has received notice
from a Lender or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, the Agent shall give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Majority Lenders; provided, that unless and until the
Administrative Agent shall have received such directions, it may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.




SECTION 10. MISCELLANEOUS.



10.1 GOVERNING LAW. THIS AGREEMENT, AND ALL OF THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THEREOF.



10.2 Integrated Agreement. This Agreement, the Revolving Credit Notes and the other Loan
Documents shall be construed as integrated and complementary of each other, and as augmenting and
not restricting Lenders’ and/or the Administrative Agent’s rights and remedies. If, after applying
the foregoing, an inconsistency still exists, the provisions of this Agreement shall constitute an
amendment to such inconsistent document and shall control.



10.3 Omission or Delay Not Waiver. No omission or delay by the Administrative Agent or any
Lender in exercising any right or power under this Agreement or any of the other Loan Documents
will impair such right or power or be construed to be a waiver of any Default, or Event of Default
or an acquiescence therein, and any single or partial exercise of any such right or power will not
preclude other or further exercise thereof or the exercise of any other right, and as to the
Borrower, no waiver will be valid unless in writing and signed by the Administrative Agent and then
only to the extent specified.



10.4 Time. Unless otherwise expressly set forth herein, whenever the Borrower shall be
required to make any payment or perform any act on a day which is not a Business Day, such payment
may be made, or such act may be performed, on the next succeeding Business Day. Time is of the
essence in the Borrower’s, the Administrative Agent’s and each Lender’s performance under all
provisions of this Agreement and all Loan Documents.


 


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10.5 Expenses of the Administrative Agent and Lenders. At Closing and from time to time
thereafter, the Borrower will pay promptly upon demand of the Administrative Agent all reasonable
out-of-pocket costs, fees and expenses (a) of the Administrative Agent in connection with (i) the
analysis, negotiation, preparation, execution, administration and delivery of this Agreement and
the other Loan Documents and the documents and instruments referred to herein and therein and any
amendment, amendment and restatement, supplement, waiver or consent relating hereto or thereto,
whether or not any such amendment, amendment and restatement, supplement, waiver or consent is
executed or becomes effective (including, without limitation, search costs, the reasonable fees,
expenses and disbursements of counsel for the Administrative Agent, and reasonable charges of any
expert consultant to the Administrative Agent) and (ii) the syndication of the commitments and (b)
the Administrative Agent and each of the Lenders in connection with the enforcement of any
Obligations of, or the collection of any payments owing from, the Borrower or any of the Guarantors
under this Agreement and/or the other Loan Documents to which they are a party, or protection or
defense of the rights of the Lenders and/or the Administrative Agent under the Loan Documents,
following the occurrence of any Event of Default or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement and the other Loan Documents
in the nature of a “work-out” or of any insolvency or bankruptcy proceedings, or otherwise
(including the reasonable fees and disbursements of counsel for the Administrative Agent and each
of the Lenders and reasonable allocated costs of internal counsel) (collectively, the “Expenses”).



10.6 Brokerage. Except as otherwise provided herein, this transaction was brought about
and entered into by the Administrative Agent, the Lenders and the Borrower acting as principals and
without any brokers, agents or finders being the effective procuring cause hereof. Each of the
Borrower, the Administrative Agent and the Lenders represents that it has not committed any party
hereunder to the payment of any brokerage fee, commission or charge in connection with this
transaction. If any such claim is made on the Borrower, the Administrative Agent or the Lenders by
any broker, finder or agent or other Person (unless such broker, finder, agent or other similar
Person is engaged by the affected party), the party or parties (each, a “Responsible Party”) which
committed the affected party to the payment of such fees hereby agrees to indemnify, defend and
save the affected party or parties harmless against such claim and further will defend, with
counsel satisfactory to the affected party or parties, any action or actions to recover on such
claim, at the sole cost and expense of the Responsible Party, including such affected party’s
counsel fees and costs. The Borrower further agrees that, if it is the Responsible Party, until
any such claim or demand is adjudicated in the affected party’s favor, the amount demanded shall be
deemed a liability of the Borrower under this Agreement.



10.7 Notices; Lending Offices. (a) All notices, requests and demands to or upon the
respective parties hereto (i) to be effective shall be in writing (including electronic
transmission, facsimile transmission or posting on a secured Web site), and if any such notice,
request or demand is regarding an Event of Default shall be transmitted by hand delivery, mail or
facsimile transmission and (ii) unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, or three days after being deposited in the mail,
postage prepaid, or, in the case of facsimile transmission notice, when sent during normal
business hours with electronic confirmation or otherwise when received, or in the case of
electronic transmission, when received and in the case of posting on a secured Web site, upon
receipt of (x) in each instance, notice of such posting and (y) rights to access such Web site,
addressed as follows in the case of the Borrower, and the Administrative Agent, and as set forth in
Annex I in the case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:


 


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If to the Administrative Agent to:




PNC Bank, National Association

1600 Market Street

Philadelphia, PA 19103

Attention: Meredith Jermann

Telecopy No: (215) 585-5622




With copies to:




PNC Bank, National Association

PNC Firstside Center

500 First Avenue, 4th Floor

Pittsburgh, PA 15219

Attention: Lisa Pierce

Telecopy No: (412) 762-8672




Ballard Spahr Andrews & Ingersoll, LLP

1735 Market Street

Philadelphia, PA 19103

Attention: Carl H. Fridy, Esquire

Telecopy No: (215) 864-8999




If to the Borrower or any Guarantor to:




CSS Industries, Inc.

1845 Walnut Street, Suite 800

Philadelphia, PA 19103

Attention: Clifford E. Pietrafitta

Telecopy No.: (215) 569-9979




With copies to:




William G. Kiesling, Esquire

CSS Industries, Inc.

1845 Walnut Street, Suite 800

Philadelphia, PA 19103

Telecopy No: (215) 569-9979




Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Attention: Michael J. Pedrick

Telecopy No. (215) 963-5001


 


89









 





(b) Any notice sent by the Administrative Agent, any Lender or the Borrower by any of the
above methods shall be deemed to be given when so received. Any notice sent by overnight carrier
shall be presumed to have been received the day after it was sent, if by hand delivery by 5:00 p.m.
Philadelphia, PA time on the day sent, and if by facsimile, no such presumption shall be raised.



(c) The Administrative Agent shall be fully entitled to rely upon any facsimile transmission
or other writing purported to be sent by any Authorized Officer (whether requesting an Advance or
otherwise) as being genuine and authorized.



10.8 Headings. The headings of any paragraph or Section of this Agreement are for
convenience only and shall not be used to interpret any provision of this Agreement.



10.9 Survival. All warranties, representations, and covenants made by the Borrower herein,
or in any agreement referred to herein or on any certificate, document or other instrument
delivered by it or on its behalf under this Agreement or any of the other Loan Documents, shall be
considered to have been relied upon by the Administrative Agent and the Lenders, and shall survive
the delivery to the Lenders of the Revolving Credit Notes, regardless of any investigation made by
the Lenders or on their behalf. All statements in any such certificate or other instrument
prepared and/or delivered for the benefit of the Administrative Agent and any/all Lenders shall
constitute warranties and representations by the Borrower hereunder. Except as otherwise expressly
provided herein, all covenants made by the Borrower hereunder or under any other agreement or
instrument shall be deemed continuing until all obligations are satisfied in full and the Revolving
Credit is terminated.



10.10 Successors and Assigns.



(a) This Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties and the obligations of the Borrower hereunder and under the other
Loan Documents shall be joint and several. Neither the Borrower nor any of the Guarantors may
transfer, assign or delegate any of its duties or obligation hereunder or under any of the other
Loan Documents.



(b) (i) Notwithstanding any other provision of this Agreement, each Lender may assign all or
any part of, or any interest in, such Lender’s rights and benefits
hereunder, under the Revolving Credit Notes and under the other Loan Documents, as well as all
obligations related to such assigned rights and interest, provided that each such
assignment:


 


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(A) must (unless the assignment is to an Affiliate of the assigning Lender that is a U.S.
person within the meaning of Section 7701(a) of the Code) be approved by the Borrower (such
approval not to be unreasonably withheld or delayed); provided, however, that if a
Default or Event of Default has occurred hereunder, the approval of the Borrower shall not be
required,



(B) shall, if not an assignment of the entire commitment of the applicable Lender, be in a
minimum amount of $5,000,000),



(C) must be evidenced by an Assignment Agreement in the form of Exhibit F attached hereto and
made a part hereof, a true and correct copy of which shall be delivered to the Administrative
Agent,



(D) shall be accompanied by the unconditional payment by the assigning Lender to the
Administrative Agent of an assignment fee equal to $3,500 except if the assignment is made to an
Affiliate of the assigning Lender or to another Lender, and



(E) shall be effective upon the Administrative Agent’s receipt of written notice from the
assignor and assignee Lenders of such assignment and compliance with subparagraphs (A), (B), (C)
and (D) above.



(ii) Each Lender may at any time enter into participation agreements with one or more
participating lenders whereby such Lender may allocate certain percentages of its Pro Rata Share of
the Revolving Credit to such participant(s), provided that no participant shall have,
except as provided below, any voting or consent rights on any issue with respect to this Agreement,
the other Loan Documents or the Revolving Credit. No participant (unless and only to the extent
such participant is itself a Lender) shall be entitled to require the Lender from whom its
participation interest was obtained, to take or refrain from taking any action under this Agreement
or any other Loan Document, except that such Lender may agree with such participant that such
Lender will not, without such participant’s consent, agree to any modification, amendment or waiver
of this Agreement described in Section 9.15(b)(i)-(viii). Notwithstanding the foregoing, any such
participant shall be considered to be a “Lender” for purposes of Sections 2.2(f), 2.9, 2.10, 2.12,
8.4, 10.5 and 10.15 with respect to its participation; provided, however, that no
participant shall be entitled to receive any greater amount pursuant to Sections 2.2(f), 2.9, 2.10
or 2.12 than the transferor Lender would have been entitled to receive in respect of the
participation effected by such transferor Lender had no participation occurred. The Borrower
acknowledges that, for the convenience of all parties, this Agreement is being entered into with
the Lenders only and that its obligations under this Agreement are, to the extent expressly
provided for in this Section 10.10(b)(ii), undertaken for the benefit of, and as an inducement to,
any such participating lenders as well as the Lenders. Any grant of a participation by any Lender
shall not discharge, reduce or otherwise affect said Lender’s obligation, in accordance with its
Pro Rata Percentage, under this Agreement to fund Advances,
which obligations shall remain primary and absolute. Such grants of participations shall not
affect or diminish the rights of the granting Lender to reimbursement or other payments which may
become due to said Lender under this Agreement and such reimbursements and other payments will be
calculated as if said Lender had not granted any such participation. Except as provided for
herein, no participant shall have, by virtue of any participation, any rights or benefits under
this Agreement or claims of any kind against the Administrative Agent or any Lender or the Borrower
other than the Lender from whom the participation has been obtained.


 


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(c) Nothing in this Section 10.10 shall prevent or prohibit any Lender from pledging its
Advances hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank.



(d) Subject to the provisions of Section 10.24 hereof, the Borrower on its own behalf and on
behalf of each of its Subsidiaries authorizes each Lender to disclose to any participant or
assignee (each, a “Transferee”) and any prospective Transferee any and all information in such
Lender’s possession concerning the Borrower or any of its Subsidiaries which has been delivered to
such Lender by the Borrower or any such Subsidiary in connection with such Lender’s credit
evaluation of the Borrower and its Subsidiaries. In addition, subject to Section 10.24 hereof, the
Administrative Agent may furnish any information concerning the Borrower or any of its Subsidiaries
in the Administrative Agent’s possession to any Affiliate of the Administrative Agent. The
Borrower shall and shall cause each of its Subsidiaries to assist any Lender in effectuating any
assignment or participation pursuant to this Section 10.10 (including during syndication) in
whatever manner such Lender reasonably deems necessary, including the participation in meetings
with prospective Transferee.



(e) Any Proposed New Lender shall, at least seven (7) days before the effective date of such
Lender’s joinder hereto, complete and deliver to the Administrative Agent a New Lender Joinder.
Such New Lender Joinder shall include, among other things, a joinder to this Agreement and
otherwise be satisfactory to the Administrative Agent and the Borrower. Upon the effective date of
such joinder, such Proposed New Lender shall be a party hereto and shall be one of the Lenders
hereunder for all purposes except as provided below. Such Proposed New Lender’s rights and the
rights of any existing Lender which increases its Pro Rata Share according to Section 2.3(b) shall
be limited in the following respects: (i) on the effective date of such joinder or increase, the
Borrower shall repay all outstanding Advances that are Alternate Base Rate Advances, if any, and
reborrow a like amount of the Alternate Base Rate Advances from the Lenders, including the Proposed
New Lender, according to their new Pro Rata Percentages and (ii) such Proposed New Lender or
existing Lender which increases it Pro Rata Share shall not participate in any LIBOR Based Rate
Advances (except, with respect to an existing lender, with respect to its existing interest) which
are outstanding on the effective date of such joinder or increase but shall participate in all new
Advances made to the Borrower after the effective date of such joinder or increase in accordance
with its new Pro Rata Percentage, including, without limitation, new LIBOR Based Rate Advances and
renewals and conversions of LIBOR Based Rate Advances. If the Borrower should (i) renew after the
effective date of such joinder or increase any Advances that are LIBOR Based Rate Advances existing
on such
effective date or (ii) convert after the date of such joinder or increase any Advances that
are LIBOR Based Rate


 


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Advances
existing on such effective date, the Borrower shall be deemed to
repay the applicable Advances on the conversion or renewal date, as the case may be, and then
reborrow a similar amount on such date so that the Proposed New Lender and any Lender that
increases its Pro Rata Share shall participate in such Advances after such renewal or conversion
date in accordance with its Pro Rata Percentage. Simultaneously, with the execution and delivery
of such joinder or the increase in a Lender’s Pro Rata Share, the Borrower shall execute a new
Revolving Credit Note for such Proposed New Lender or existing Lender. Notwithstanding the
foregoing, upon the occurrence of an Event of Default prior to the date on which such Proposed New
Lender or such existing Lender that is increasing its Pro Rata Share is holding Advances that are
LIBOR Based Rate Advances equal to its pro rata share (in accordance with its then Pro Rata
Percentage without giving effect to any termination of the Available Commitment), such Lender
shall, upon notice from the Administrative Agent, on or after the date on which the Advances are
accelerated or become due following such Event of Default, pay to the Administrative Agent (for the
account of the other Lenders, to which the Administrative Agent shall pay their pro rata
share thereof promptly after receipt) a sum equal to such Lender’s pro rata share of each
Advance that is a LIBOR Based Rate Advance then outstanding with respect to which such Lender does
not then hold its pro rata share in accordance with its Pro Rata Percentage; such payment
by such Lender shall constitute an Alternate Base Rate Advance hereunder.



10.11 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original and, all of which, taken together, shall constitute one fully executed
document.



10.12 Modification. No modification hereof or any agreement referred to herein shall be
binding or enforceable unless in writing and signed by the Borrower, the Administrative Agent and
the Lenders required by Section 9.15 hereof.



10.13 Signatories. Each individual signatory hereto represents and warrants that he is
duly authorized to execute this Agreement on behalf of his principal and that he executes the
Agreement in such capacity and not as a party.



10.14 Third Parties. No rights are intended to be created hereunder or under any of the
other Loan Documents for the benefit of any third party donee, creditor or incidental beneficiary
of the Borrower. Nothing contained in this Agreement shall be construed as a delegation to the
Administrative Agent or any Lender of the Borrower’s duty of performance, including, without
limitation, the Borrower’s duties under any account or contract with any other Person.


 


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10.15 Indemnification. (a) The Borrower agrees to indemnify each of the Lenders and the
Administrative Agent and their respective officers, directors, employees, representatives, agents,
attorneys-in-fact and Affiliates and each other Person, if any, controlling any of them or any of
their Affiliates within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act (each, an “Indemnitee” and collectively, the “Indemnities”)
from, and hold each of them harmless against, any and all Losses resulting from, arising out of, in
any way related to or by reason of, (i) the execution, delivery, performance, administration or
enforcement of any Loan Document, (ii) the Lenders’ or the Administrative Agent’s agreement to make
the Advances, (iii) the use or intended use of the proceeds of any Advances hereunder (iv) the
consummation of any other transactions contemplated in any Loan Document, (v) the performance by
the Administrative Agent of their duties hereunder or (vi) any inaccuracy in any material respect,
or any untrue statement or alleged untrue statement of any material fact, made in any report,
exhibit, schedule or publication in connection with the transactions contemplated hereby furnished
to the Administrative Agent or the Lenders by or on behalf of the Borrower, or by reason of the
omission or the alleged omission therefrom of a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, whether or not
such Indemnitee is a party and whether or not such Proceeding is initiated or brought by or on
behalf of the Borrower; provided, however, that the Borrower shall not be liable under the
foregoing indemnification provision to an Indemnitee to the extent that any such Loss is judicially
determined by a court of competent jurisdiction in a final non-appealable judgment to have resulted
solely by reason of the gross negligence or willful misconduct of such Indemnitee. To the extent
that the undertaking to indemnify and hold harmless set forth in this Section 10.15 is
unenforceable because it is violative of any law or public policy or otherwise, the Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all indemnified liabilities incurred by any of the Indemnities.



(b) The Borrower agrees on its own behalf and on behalf of the Guarantors that no Indemnitee
shall have any liability (whether direct or indirect, in contract or tort or otherwise) for any
Losses to the Borrower or any of the Guarantors or any such entities, security holders or creditors
resulting from, arising out of, in any way related to or by reason of (i) the execution, delivery,
performance, administration or enforcement of any Loan Document, (ii) the Lenders’ or the
Administrative Agent’s agreement to make the Advances, (iii) the use or intended use of the
proceeds of any Advances hereunder or (iv) the consummation of any other transactions contemplated
in any Loan Document, except to the extent that any Losses judicially determined by a court of
competent jurisdiction in a final non-appealable judgment to have resulted solely by reason of the
gross negligence or willful misconduct of such Indemnitee.



(c) Each Indemnitee shall give prompt notice to the Borrower of any action commenced against
it in respect of which indemnity may be sought hereunder, but failure to so notify the Borrower
shall not relieve them from any liability which they may otherwise have hereunder. The Borrower
may participate at their own expense in the defense of such action.



(d) In the event that any Indemnitee is requested or required to appear as a witness in any
Proceeding brought by or on behalf of or against the Borrower or any Affiliate of the Borrower in
which such Indemnitee is not named as a defendant, the Borrower agrees to reimburse each Indemnitee
for all reasonable expenses incurred by each Indemnitee in connection with such Indemnitee’s
appearing and preparing to appear as such a witness,
including, without limitation, the reasonable fees and disbursements of each Indemnitee’s
legal counsel, and to compensate such Indemnitee in an amount to be mutually agreed upon.



(e) The Borrower agrees on its own behalf and on behalf of each of the Guarantors that,
without the prior written consent of the Administrative Agent and the Majority Lenders, no such
entity will settle, compromise or consent to the entry of any judgment in any pending or threatened
Proceeding in respect of which indemnification could be sought under the indemnification provisions
of this Section 10.15 (whether or not any Indemnitee is an actual or potential party to such
Proceeding), unless such settlement, compromise or consent includes an unconditional written
release in form, scope and substance satisfactory to the Administrative Agent and the Majority
Lenders, of each Indemnitee from all liability arising out of such Proceeding and does not include
any statement as to an admission of fault, culpability or failure to act by or on behalf of any
Indemnitee.


 


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10.16 Discharge of Taxes, the Borrower’s Obligations, Etc. The Administrative Agent, in
its sole discretion, shall have the right at any time, and from time to time, on one day’s notice
to the Borrower (unless the Administrative Agent deems immediate action to be necessary under the
circumstances), if the Borrower fails to do so, to: (a) pay for the performance of any of the
Borrower’s Obligations hereunder, and (b) discharge taxes or Liens, at any time levied or placed on
the Borrower’s or any Guarantor’s Property in violation of this Agreement unless the Borrower or
such Guarantor is in good faith with due diligence by appropriate proceedings contesting such taxes
or Liens and maintaining proper reserves therefor in accordance with GAAP. Such expenses and
advances shall be added to the Revolving Credit and shall bear interest at the Alternate Base Rate
until reimbursed to the Administrative Agent. Such payments and advances made by the
Administrative Agent shall not be construed as a waiver by the Administrative Agent or the Lenders
of an Event of Default under this Agreement.



10.17 Withholding and Other Tax Liabilities. The Administrative Agent, in its sole
discretion and without any duty to exercise such rights or monitor such obligation of the Borrower,
shall have the right to withhold or direct the Lenders to withhold any Advances from time to time
unless the Borrower shall, at the Administrative Agent’s request, have given to the Administrative
Agent evidence, reasonably satisfactory to the Administrative Agent, that the Borrower has properly
deposited or paid, as required by law, all withholding taxes and all federal, state, city, county
or other taxes due up to and including the date of the requested Advance. Copies of deposit slips
showing payment shall likewise constitute satisfactory evidence for such purpose. In the event
that any Lien, assessment or tax liability against the Borrower or any of the Borrower’s
Subsidiaries shall arise in favor of any taxing authority, whether or not notice thereof shall be
filed or recorded as may be required by law, the Administrative Agent shall have the right, on one
day’s notice to the Borrower (unless the Administrative Agent deems immediate action to be
necessary under the circumstances) (but shall not be obligated, nor shall the Administrative Agent
or any Lender hereby assume the duty) to pay any such Lien, assessment or tax liability by virtue
of which such charge shall have arisen; provided, however, that the Administrative Agent shall not
pay any such tax, assessment or Lien before its due date or if the amount, applicability or
validity thereof is being contested in good
faith and by appropriate proceedings by the Borrower or such Subsidiary. In order to pay any such
Lien, assessment or tax liability, the Administrative Agent shall not be obliged to wait until said
Lien, assessment or tax liability is filed before taking such action as hereinabove set forth. Any
sum or sums which the Administrative Agent (shared ratably by the Lenders) shall have paid for the
discharge of any such Lien shall be added to the Revolving Credit and shall be paid by the Borrower
to the Administrative Agent with interest thereon, upon demand, and the Administrative Agent shall
be subrogated to all rights of such taxing authority against the Borrower or such Subsidiary.


 


95









 





10.18 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:



(a) submits for itself and its property in any legal action or proceeding relating to this
Agreement or the Notes, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the Courts of the Commonwealth of Pennsylvania, the
courts of the United States of America for the Eastern District of Pennsylvania, and appellate
courts from any thereof;



(b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;



(c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 9.2 or at such other address of which
the Agent shall have been notified pursuant thereto;



(d) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other jurisdiction; and



(e) waives, and without limiting the provisions of Section 5.8(c), each of the Agent and the
Banks waives, any right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.



10.19 Waivers.



(a) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this
transaction, including without limitation, contract, claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business relationship, that each has already relied
on the waiver in entering into this Agreement, and that each will continue to rely on the waiver in
their related future dealings. Each party hereto further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE ADVANCES. In the
event of litigation, this Agreement may be filed as a written consent to a trial by the court.


 


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(b) (i) The Borrower, on its own behalf and on behalf of the Guarantors, hereby waive, to the
maximum extent not prohibited by law, any right they may have to claim or recover any special,
exemplary, punitive or consequential damages from the Administrative Agent or the Lenders in any
Proceeding in connection with, arising out of, or in any way related to the transactions
contemplated herein or in any other Loan Document.



(ii) The Agent and each of the Lenders waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover any special, exemplary, punitive or consequential damages
from the Borrower or any of the Guarantors in any Proceeding in connection with, arising out of, or
in any way related to the transactions contemplated herein or in any other Loan Document to the
extent the foregoing is not in derogation of the Administrative Agent’s or any of the Lender’s
rights to claim or recover any amounts under Sections 2.2(g), 2.9, 2.10, 2.12, 10.5, 10.6, 10.15 or
for any other Obligations expressly provided for in this Agreement or any of the other Loan
Documents.



(c) The Borrower, on its own behalf and on behalf of the Guarantors, hereby waive promptness,
diligence, notice of acceptance and any other notice with respect to any of the obligations and any
requirement that any Lender protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right to take any action against any other obligor or any other Person or
any collateral or other direct or indirect security for any of the obligations.



10.20 Severability. Each provision of this Agreement shall be severable from every other
provision of this Agreement. If any provision is determined to be invalid or unenforceable, such
determination shall not affect or limit the validity or enforceability of all other provisions.



10.21 Independence of Representations, Warranties and Covenants. The representations,
warranties and covenants contained herein shall be independent of each other and no exception to
any representation, warranty or covenant shall be deemed to be an exception to any other
representation, warranty or covenant contained herein unless expressly provided, nor
shall any such exception be deemed to permit any action or omission that would be in contravention
of applicable law.


 


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10.22 Obligations Several; Independent Nature of Lenders’ Rights. The obligation of each
Lender hereunder is several, no Lender shall be responsible for the obligation or commitment of any
other Lender hereunder, and the Administrative Agent shall not be responsible for any obligations
of any Lender. Nothing contained in this Agreement and no action taken by the Lenders pursuant
hereto 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 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.



10.23 Prior Understandings. This Agreement and the other Loan Documents supersede all
prior and contemporaneous understandings and agreements, whether written or oral, among the parties
hereto relating to the transactions provided for herein and therein, except the letter (the
“Engagement Letter”) agreement dated September 5, 2008 among PNC Capital Markets LLC and the
Borrower, shall remain in effect, to the extent not conflicting herewith.



10.24 Confidentiality. The Administrative Agent and each Lender agree to keep confidential
all material non-public information provided to it by or on behalf of the Borrower and/or the
Guarantors pursuant to this Agreement or the other Loan Documents that is designated by the
provider of such information in writing as confidential; provided that nothing herein shall prevent
the Administrative Agent or any Lender from disclosing any such information (a) to the
Administrative Agent or any other Lender, (b) to any assignee, proposed assignee, participant or
proposed participant which agrees to comply with the provisions of this subsection, (c) to its
Affiliates, employees, directors, agents, attorneys, accountants and other professional advisors,
(d) upon the request or demand of any Governmental Authority having jurisdiction over such Person,
(e) in response to any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any requirement of applicable law, (f) which has been publicly disclosed other
than in breach of this Agreement, or (g) in connection with the exercise of any remedy or other
enforcement of the rights of the Administrative Agent and/or the Lenders hereunder.


 


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IN WITNESS WHEREOF, the undersigned parties have executed this Agreement the day and year first
above written.



	 	 	 	 	 
	 	CSS INDUSTRIES, INC., a


Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


 









 





	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION, as the


Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


 









 





	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


 









 





	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


 









 





	 	 	 	 	 
	 	CITIZENS BANK OF PENNSYLVANIA, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


 









 





	 	 	 	 	 
	 	TD BANK, N.A., as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: