**Exhibit 10.8**

 

EXECUTION COPY

 

 

AMENDED ANDRESTATED CREDIT AGREEMENT

 

dated as of March 27,2006,(amending and restating the Credit Agreement datedas of March 15, 2004)

 

among

 

TRUE TEMPERCORPORATION,

 

TRUE TEMPERSPORTS, INC.,as Borrower

 

THE LENDERS PARTYHERETO

 

and

 

CREDIT SUISSE,as Administrative Agent

 

----

 

CREDIT SUISSE,as Sole Bookrunner and Sole Lead Arranger

 

ANTARESCAPITAL CORPORATION,as Syndication Agent

 

GOLDMAN SACHSCREDIT PARTNERS L.P.andMERRILL LYNCH CAPITAL,a division of Merrill Lynch Business Financial Services Inc.,as Co-Documentation Agents

 

 

 

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| TABLE OF CONTENTS  |
|--------------------|
|               |   | Page |
|               |   |   |
| ARTICLE I     | DEFINITIONS | 1 |
| SECTION 1.01. | Defined Terms | 1 |
| SECTION 1.02. | Terms Generally | 31 |
| SECTION 1.03. | Classification of Loans  and Borrowings | 32 |
| SECTION 1.04. | Pro Forma Calculations | 32 |
|               |   |   |
| ARTICLE II    | THE  CREDITS | 32 |
| SECTION 2.01. | Commitments | 32 |
| SECTION 2.02. | Loans | 33 |
| SECTION 2.03. | Borrowing Procedure | 34 |
| SECTION 2.04. | Repayment of Loans;  Evidence of Debt | 35 |
| SECTION 2.05. | Fees | 36 |
| SECTION 2.06. | Interest on Loans | 37 |
| SECTION 2.07. | Default Interest | 37 |
| SECTION 2.08. | Alternate Rate of  Interest | 37 |
| SECTION 2.09. | Termination and  Reduction of Commitments | 38 |
| SECTION 2.10. | Conversion and  Continuation of Borrowings | 38 |
| SECTION 2.11. | Repayment of Term  Borrowings | 40 |
| SECTION 2.12. | Prepayment | 41 |
| SECTION 2.13. | Mandatory Prepayments | 41 |
| SECTION 2.14. | Reserve Requirements;  Change in Circumstances | 43 |
| SECTION 2.15. | Change in Legality | 44 |
| SECTION 2.16. | Indemnity | 45 |
| SECTION 2.17. | Pro Rata Treatment | 45 |
| SECTION 2.18. | Sharing of Setoffs | 46 |
| SECTION 2.19. | Payments | 46 |
| SECTION 2.20. | Taxes | 47 |
| SECTION 2.21. | Assignment of  Commitments Under Certain Circumstances; Duty to Mitigate | 49 |
| SECTION 2.22. | Swingline Loans | 50 |
| SECTION 2.23. | Letters of Credit | 51 |
| SECTION 2.24. | Increase in Term Loan  Commitments | 55 |
|               |   |   |
| ARTICLE III   | REPRESENTATIONS  AND WARRANTIES | 57 |
| SECTION 3.01. | Organization; Powers | 57 |
| SECTION 3.02. | Authorization; No  Conflicts | 58 |
| SECTION 3.03. | Enforceability | 58 |
| SECTION 3.04. | Governmental Approvals | 58 |
| SECTION 3.05. | Financial Statements | 58 |
| SECTION 3.06. | No Material Adverse  Change | 59 |
| SECTION 3.07. | Title to Properties;  Possession Under Leases | 59 |
| SECTION 3.08. | Subsidiaries | 59 |
| SECTION 3.09. | Litigation; Compliance  with Laws | 60 |
| SECTION 3.10. | Agreements | 60 |
|                    |  |  |  |  |

 

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| SECTION 3.11. | Federal Reserve  Regulations                                                           | 60     |
|--------------------|----------------------------------------------------------------------------------------|--------|
| SECTION 3.12. | Investment Company Act                                                                 | 60     |
| SECTION 3.13. | Use of Proceeds                                                                        | 60     |
| SECTION 3.14. | Tax Returns                                                                            | 61     |
| SECTION 3.15. | No Material  Misstatements; Acquisition Documentation                                  | 61     |
| SECTION 3.16. | Employee Benefit Plans                                                                 | 61     |
| SECTION 3.17. | Environmental Matters                                                                  | 62     |
| SECTION 3.18. | Insurance                                                                              | 63     |
| SECTION 3.19. | Security Documents                                                                     | 63     |
| SECTION 3.20. | Location of Real  Property                                                             | 64     |
| SECTION 3.21. | Labor Matters                                                                          | 64     |
| SECTION 3.22. | Intellectual Property                                                                  | 64     |
| SECTION 3.23. | Solvency                                                                               | 64     |
| SECTION 3.24. | Senior Debt                                                                            | 65     |
|               |                                                                                   |   |
| ARTICLE IV    | CONDITIONS  OF LENDING                                                                 | 65     |
| SECTION 4.01. | All Credit Events                                                                      | 65     |
| SECTION 4.02. | First Credit Event                                                                     | 66     |
| SECTION 4.03. | Amendment Effective  Date                                                              | 69     |
| SECTION 4.04. | Funding Date                                                                           | 70     |
|               |                                                                                   |   |
| ARTICLE V     | AFFIRMATIVE  COVENANTS                                                                 | 71     |
| SECTION 5.01. | Existence; Businesses  and Properties                                                  | 71     |
| SECTION 5.02. | Insurance                                                                              | 71     |
| SECTION 5.03. | Obligations and Taxes                                                                  | 71     |
| SECTION 5.04. | Financial Statements,  Reports, etc                                                    | 72     |
| SECTION 5.05. | Litigation and Other  Notices                                                          | 73     |
| SECTION 5.06. | Information Regarding  Collateral                                                      | 74     |
| SECTION 5.07. | Maintaining Records;  Access to Properties and Inspections                             | 74     |
| SECTION 5.08. | Use of Proceeds                                                                        | 75     |
| SECTION 5.09. | Additional Collateral,  etc                                                            | 75     |
| SECTION 5.10. | Further Assurances                                                                     | 77     |
| SECTION 5.11. | Interest Rate  Protection                                                              | 77     |
|               |                                                                                   |   |
| ARTICLE VI    | NEGATIVE  COVENANTS                                                                    | 77     |
| SECTION 6.01. | Indebtedness                                                                           | 78     |
| SECTION 6.02. | Liens                                                                                  | 79     |
| SECTION 6.03. | Sale and Lease-Back  Transactions                                                      | 81     |
| SECTION 6.04. | Investments, Loans and  Advances                                                       | 82     |
| SECTION 6.05. | Mergers, Consolidations,  Sales of Assets and Acquisitions                             | 83     |
| SECTION 6.06. | Restricted Payments;  Restrictive Agreements                                           | 84     |
| SECTION 6.07. | Transactions with  Affiliates                                                          | 86     |
| SECTION 6.08. | Business of Holdings,  the Borrower and Subsidiaries; Limitation on Hedging Agreements | 86     |
|                    |                                                                                        |        |  |

 

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| SECTION 6.09.     | Other Indebtedness and  Agreements; Amendments to Acquisition Documentation | 86     |
|------------------------|-----------------------------------------------------------------------------|--------|
| SECTION 6.10.     | Capital Expenditures                                                        | 87     |
| SECTION 6.11.     | Interest Coverage Ratio                                                     | 87     |
| SECTION 6.12.     | Leverage Ratio                                                              | 88     |
| SECTION 6.13.     | Fixed Charge Coverage  Ratio                                                | 88     |
| SECTION 6.14.     | Fiscal Year                                                                 | 88     |
|                   |                                                                        |   |
| ARTICLE VII       | EVENTS  OF DEFAULT                                                          | 88     |
| ARTICLE VIII      | THE  AGENTS AND THE ARRANGER                                                | 92     |
| ARTICLE IX        | MISCELLANEOUS                                                               | 94     |
| SECTION 9.01.     | Notices                                                                     | 94     |
| SECTION 9.02.     | Survival of Agreement                                                       | 95     |
| SECTION 9.03.     | Binding Effect                                                              | 95     |
| SECTION 9.04.     | Successors and Assigns                                                      | 95     |
| SECTION 9.05.     | Expenses; Indemnity                                                         | 99     |
| SECTION 9.06.     | Right of Setoff                                                             | 100    |
| SECTION 9.07.     | Applicable Law                                                              | 100    |
| SECTION 9.08.     | Waivers; Amendment                                                          | 101    |
| SECTION 9.09.     | Interest Rate Limitation                                                    | 102    |
| SECTION 9.10.     | Entire Agreement                                                            | 102    |
| SECTION 9.11.     | WAIVER OF JURY TRIAL                                                        | 102    |
| SECTION 9.12.     | Severability                                                                | 102    |
| SECTION 9.13.     | Counterparts                                                                | 103    |
| SECTION 9.14.     | Headings                                                                    | 103    |
| SECTION 9.15.     | Jurisdiction; Consent  to Service of Process                                | 103    |
| SECTION 9.16.     | Confidentiality                                                             | 104    |
| SECTION 9.17.     | Delivery of Lender  Addenda                                                 | 104    |
| SECTION 9.18.     | Effect of Amendment and  Restatement of the Existing Credit Agreement       | 104    |
|                   |                                                                        |   |
|                   |                                                                        |   |
| Exhibits and Schedules |                                                                        |   |
|                   |                                                                        |   |
| Exhibit A         | Form of Administrative  Questionnaire                                  |   |
| Exhibit B         | Form of Affiliate  Subordination Agreement                             |   |
| Exhibit C         | Form of Assignment and  Acceptance                                     |   |
| Exhibit D         | Form of Borrowing  Request                                             |   |
| Exhibit E         | Form of Guarantee and  Collateral Agreement                            |   |
| Exhibit F         | Form of Lender Addendum                                                |   |
| Exhibit G         | Form of Mortgage (Owned  Real Property)                                |   |
| Exhibit H         | Form of Perfection  Certificate                                        |   |
| Exhibit I         | Form of Revolving Note                                                 |   |
| Exhibit J         | Form of Term Note                                                      |   |
|                        |                                                                             |        |  |  |

 

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| Exhibit K        | Form of Exemption  Certificate |   |
|-----------------------|-------------------------------------|--------|
| Exhibit L        | Form of Supplement             |   |
|                  |                                |
| Schedule 1.01(b) | Mortgaged Properties                |   |
| Schedule 1.01(c) | Subsidiary Guarantors               |   |
| Schedule 2.01    | Commitments                         |   |
| Schedule 3.08    | Subsidiaries                        |   |
| Schedule 3.18    | Insurance                           |   |
| Schedule 3.19(a) | UCC Filing Offices                  |   |
| Schedule 3.19(c) | Mortgage Filing Offices             |   |
| Schedule 3.20    | Owned and Leased Real  Property     |   |
| Schedule 6.01    | Existing Indebtedness               |   |
| Schedule 6.02    | Existing Liens                      |   |
| Schedule 6.04    | Existing Investments                |   |
|                       |                                     |        |  |

 

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AMENDED ANDRESTATED CREDIT AGREEMENT dated as of March 27, 2006, amending andrestating the Credit Agreement dated as of March 15, 2004, among TRUETEMPER CORPORATION, a Delaware corporation ( “Holdings”), TRUE TEMPERSPORTS, INC., a Delaware corporation (the “Borrower”), the LENDERSfrom time to time party hereto, CREDIT SUISSE (formerly known as Credit SuisseFirst Boston), as administrative agent (in such capacity, the “AdministrativeAgent”) and as collateral agent (in such capacity, the “Collateral Agent”),CREDIT SUISSE (formerly known as Credit Suisse First Boston), as solebookrunner and sole lead arranger (in such capacity, the “Arranger”),ANTARES CAPITAL CORPORATION, as syndication agent (in such capacity, the “SyndicationAgent”), and GOLDMAN SACHS CREDIT PARTNERS L.P. and MERRILL LYNCH CAPITAL,a division of Merrill Lynch Business Financial Services Inc., asco-documentation agents (each, in such capacity, a “Documentation Agent”).

 

The partieshereto agree as follows:

 

ARTICLE I

 

Definitions 

 

SECTION 1.01.Defined Terms. As used in this Agreement, the following terms shall havethe meanings specified below:

 

“ABR”,when used in reference to any Loan or Borrowing, refers to whether such Loan,or the Loans comprising such Borrowing, are bearing interest at a ratedetermined by reference to the Alternate Base Rate.

 

“Acquisition”shall mean the acquisition by TTS Holdings pursuant to the Purchase Agreementof all the Equity Interests in Holdings from the Sellers for an aggregateamount of $342,000,000 in cash (the “Acquisition Consideration”).

 

“AcquisitionConsideration” shall have the meaning assigned to such term in thedefinition of “Acquisition”.

 

“AcquisitionDocumentation” shall mean shall mean, collectively, the Purchase Agreementand all schedules, exhibits, annexes and amendments thereto and all sideletters and agreements affecting the terms thereof.

 

“AcquisitionTransactions” shall mean, collectively, (a) the Acquisition, includingthe payment of the Acquisition Consideration, (b) the Equity Contribution,(c) the obtaining by the Borrower of the Facility provided for by thisAgreement, (d) the issuance by the Borrower of the Subordinated Notes, (e) therepayment by the Borrower of all amounts outstanding under the Existing CreditFacility, (f) the redemption by the Borrower of all of its 10.875% SeniorSubordinated Notes due 2008 and (g) the payment of fees and expensesincurred in connection with the foregoing, including a fee payable to theSponsor.

 

“AdditionalTerm Loan Commitment” shall mean, with respect to each Lender, thecommitment, if any, of such Lender to make Additional Term Loans hereunder asset forth on Schedule 2.01, as the same may be reduced orincreased from time to time pursuant to

 

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assignment by or to such Lender pursuant to Section 9.04. Theaggregate amount of the Additional Term Loan Commitments is $18,000,000.

 

“AdditionalTerm Loan Commitment Termination Date” shall have the meaning set forth in Section 2.09(a).

 

“AdditionalTerm Loans” shall mean the Term Loans made by the Lenders to the Borroweron the Funding Date.

 

“AdjustedLIBO Rate” shall mean, with respect to any Eurodollar Borrowing for anyInterest Period, an interest rate per annum equal to the product of (a) theLIBO Rate in effect for such Interest Period and (b) Statutory Reserves.

 

“AdministrativeAgent” shall have the meaning assigned to such term in the preamble.

 

“AdministrativeAgent Fees” shall have the meaning assigned to such term in Section 2.05(b).

 

“AdministrativeQuestionnaire” shall mean an Administrative Questionnaire in the form ofExhibit A, or such other form as may be supplied fromtime to time by the Administrative Agent.

 

“Affiliate”shall mean, when used with respect to a specified person, another person thatdirectly, or indirectly through one or more intermediaries, Controls or isControlled by or is under common Control with the person specified; provided,however, that, for purposes of Section 6.07, the term “Affiliate”shall also include any person that directly or indirectly owns 10% or more ofany class of Equity Interests of the person specified or that is anofficer or director of the person specified.

 

“AffiliateSubordination Agreement” shall mean an Affiliate Subordination Agreement inthe form of Exhibit B pursuant to which intercompanyobligations and advances owed by any Loan Party are subordinated to theObligations.

 

“Affirmationand Consent” means the Affirmation and Consent, dated as of the AmendmentEffective Date, executed and delivered by Holdings and each SubsidiaryGuarantor in form and substance satisfactory to the Administrative Agent.

 

“Agents”shall have the meaning assigned to such term in Article VIII.

 

“AggregateRevolving Credit Exposure” shall mean the aggregate amount of the Lenders’Revolving Credit Exposures.

 

“Agreement”shall mean, on any date, the Existing Credit Agreement, as amended and restatedon the Amendment Effective Date and as the same may thereafter from timeto time be further amended, supplemented, amended and restated or otherwisemodified and in effect on such date.

 

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“AlternateBase Rate” shall mean, for any day, a rate per annum (rounded upwards, ifnecessary, to the next 1/16 of 1%) equal to the greater of (a) the PrimeRate in effect on such day and (b) the Federal Funds Effective Rate ineffect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due toa change in the Prime Rate or the Federal Funds Effective Rate shall beeffective as of the opening of business on the effective date of such change inthe Prime Rate or the Federal Funds Effective Rate, respectively.

 

“AmendmentAgreement” shall mean the Amendment Agreement dated as of March 27,2006, among Holdings, the Borrower and the Lenders party thereto.

 

“AmendmentEffective Date” means the date this Amended and Restated Credit Agreementbecomes effective pursuant to the Amendment Agreement.

 

“AmendmentFee Letter” shall mean the Fee Letter dated as of March 20, 2006,among the Borrower, Credit Suisse (formerly known as Credit Suisse FirstBoston) and Credit Suisse Securities (USA) LLC.

 

“ApplicableMargin” shall mean, for any day, for each Type of Loan, the rate per annumset forth under the relevant column heading below based upon the Leverage Ratioas of the relevant date of determination:

 
| **Leverage Ratio**                                                             | ** ** | **Eurodollar  Term Loans** | ** ** | **ABR Term  Loans** | ** ** | **Eurodollar Revolving Loans and  Swingline Loans** | ** ** | **ABR Revolving Loans and  Swingline Loans** | ** ** |
|--------------------------------------------------------------------------------|------------|----------------------------|------------|---------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|
| Category 1  Greater than 5.75 to 1.00                                          |       | 2.50                       | %          | 1.50                | %          | 2.50                                                | %          | 1.50                                         | %          |
| Category 2  Greater than 4.75 to 1.00  but less than or equal to  5.75 to 1.00 |       | 2.50                       | %          | 1.50                | %          | 2.25                                                | %          | 1.25                                         | %          |
| Category 3  Greater than 3.75 to 1.00  but less than or equal to  4.75 to 1.00 |       | 2.50                       | %          | 1.50                | %          | 2.00                                                | %          | 1.00                                         | %          |
| Category 4  Less than or equal to 3.75  to 1.00                                |       | 2.50                       | %          | 1.50                | %          | 1.75                                                | %          | 0.75                                         | %          |

 

; provided, that, notwithstanding the foregoing, each ApplicableMargin set forth above with respect to the Term Loans shall be increased by anadditional 0.50% per annum at all times during the period from and includingthe Amendment Effective Date through and including the date of delivery to theAdministrative Agent of the financial statements required by Section 5.04(b),with respect to the fiscal quarter ending October 1, 2006. Each change inthe Applicable Margin resulting from a change in the Leverage Ratio shall beeffective, with respect to all Loans, Commitments and Letters of Creditoutstanding, upon delivery to the Administrative Agent of the financialstatements and certificates required by Section 5.04(a) or (b) and

 

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Section 5.04(c), respectively, indicatingsuch change until the date immediately preceding the next date of delivery ofsuch financial statements and certificates indicating another such change. Inaddition, at any time during which the Borrower has failed to deliver thefinancial statements and certificates required by Section 5.04(a) or(b) and Section 5.04(c), respectively, the Leverage Ratioshall be deemed to be in Category 1 for purposes of determining the ApplicableMargin for so long as such failure to deliver such applicable financialstatements and certificates shall continue.

 

“Arranger”shall have the meaning assigned to such term in the preamble.

 

“Asset Sale”shall mean the sale, lease, sale and leaseback, assignment (other than forsecurity purposes), conveyance, transfer, issuance or other disposition (by wayof merger, casualty, condemnation or otherwise) (any of the foregoing, a “Disposition”)by Holdings, the Borrower or any of the Subsidiaries to any person other thanthe Borrower or any Subsidiary Guarantor of (a) any Equity Interests ofany of the Subsidiaries (other than directors’ qualifying shares) or (b) anyother assets of Holdings, the Borrower or any of the Subsidiaries, includingEquity Interests of any person that is not a Subsidiary (other than (i) inventory,obsolete or worn out assets, assets that are no longer useful, scrap andPermitted Investments, in each case Disposed of in the ordinary course ofbusiness, (ii) the sale or discount by the Borrower or any Subsidiary, ineach case without recourse and in the ordinary course of business, of overdueaccounts receivable arising in the ordinary course of business, but only inconnection with the compromise or collection thereof consistent with customaryindustry practice (and not as part of any bulk sale or financingtransaction), (iii) the Disposition by any Subsidiary that is not a LoanParty of its assets that do not constitute Collateral in connection with aforeclosure by the applicable lenders with respect to any Indebtedness of suchSubsidiary to the extent that such assets are collateral security for suchIndebtedness, (iv) the licensing of intellectual property in the ordinarycourse of business, (v) the settlement, release or surrender of tort orother litigation claims, (vi) Dispositions between Subsidiaries that arenot Subsidiary Guarantors, (vii) Permitted Acquisitions or otherInvestments by the Borrower or any Subsidiary that are expressly permitted by Section 6.04and that do not involve a Disposition of any assets of Holdings, the Borrower orany of the Subsidiaries to any person other than the Borrower or any SubsidiaryGuarantor and (viii) Permitted Asset Swaps); providedthat any Disposition or series of related Dispositions described in clause (b) above(but not excluded in clauses (i) through (viii) above)having a value not in excess of $250,000 shall be deemed not to be an “AssetSale” for purposes of this Agreement.

 

“Assignmentand Acceptance” shall mean an assignment and acceptance entered into by aLender and an assignee (with the consent of any person whose consent isrequired by Section 9.04), and accepted by the AdministrativeAgent, in the form of Exhibit C or such other form asshall be approved by the Administrative Agent.

 

“BenefitPlan” shall mean any employee pension benefit plan (other than aMultiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412of the Tax Code or Section 307 of ERISA, and in respect of which theBorrower or any ERISA Affiliate is (or, if such plan were terminated, wouldunder Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) ofERISA.

 

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“Board”shall mean the Board of Governors of the Federal Reserve System of the UnitedStates of America.

 

“Borrower”shall have the meaning assigned to such term in the preamble.

 

“Borrowing”shall mean (a) Loans of the same Class and Type made, converted orcontinued on the same date and, in the case of Eurodollar Loans, as to which asingle Interest Period is in effect, or (b) a Swingline Loan.

 

“BorrowingRequest” shall mean a request by the Borrower in accordance with the termsof Section 2.03 and substantially in the form of Exhibit D,or such other form as shall be approved by the Administrative Agent.

 

“Breakage Event”shall have the meaning assigned to such term in Section 2.16.

 

“BusinessDay” shall mean any day other than a Saturday, Sunday or day on whichcommercial banks in New York City are authorized or required by law to close; provided,however, that when used in connection with a Eurodollar Loan (includingwith respect to all notices and determinations in connection therewith and anypayments of principal, interest or other amounts thereon), the term “BusinessDay” shall also exclude any day on which banks are not open for dealings indollar deposits in the London interbank market.

 

“CapitalExpenditures” shall mean, for any period, with respect to any person, (a) theadditions to property, plant and equipment and other capital expenditures ofsuch person and its consolidated subsidiaries that are (or should be) set forthin a consolidated statement of cash flows of such person for such periodprepared in accordance with GAAP and (b) Capital Lease Obligationsincurred by such person and its consolidated subsidiaries during such period,but excluding in each case any such expenditure made (i) in accordancewith the terms of this Agreement to restore, replace or rebuild property to thecondition of such property immediately prior to any damage, loss, destructionor condemnation of such property, to the extent such expenditure is made withinsurance proceeds, condemnation awards or damage recovery proceeds relating toany such damage, loss, destruction or condemnation, (ii) with the proceedsfrom the sale or other disposition or trade-in or exchange of assets to theextent utilized to purchase functionally equivalent assets, (iii) with theproceeds of a substantially contemporaneous equity contribution from Holdings(other than any Cure Securities) and (iv) consisting of the ProposedDomestic Acquisition.

 

“CapitalLease Obligations” of any person shall mean the obligations of such personto pay rent or other amounts under any lease of (or other arrangement conveyingthe right to use) real or personal property, or a combination thereof, whichobligations are required to be classified and accounted for as capital leaseson a balance sheet of such person under GAAP, and the amount of suchobligations at any time shall be the capitalized amount thereof at such time determinedin accordance with GAAP.

 

“Change inControl” shall mean (a) if at any time prior to a Qualified IPO, thePermitted Holders shall fail to own directly or indirectly, beneficially and ofrecord, Equity Interests representing more than 50% of the aggregate ordinaryvoting power and aggregate equity value represented by the issued andoutstanding Equity Interests in Holdings; (b) if after a Qualified

 

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IPO, any “person” or “group” (within the meaning of Rule 13d-5 ofthe Securities Exchange Act of 1934 as in effect on the date hereof) other thanthe Permitted Holders shall own directly or indirectly, beneficially or ofrecord, Equity Interests representing either (i) more than 30% of eitherthe aggregate ordinary voting power or the aggregate equity value representedby the issued and outstanding Equity Interests in Holdings or (ii) agreater percentage of either the aggregate ordinary voting power or theaggregate equity value represented by the issued and outstanding EquityInterests in Holdings then held, directly or indirectly, beneficially and ofrecord, by the Permitted Holders; (c) if a majority of the seats (otherthan vacant seats) on the board of directors of Holdings shall at any time beoccupied by persons who are not Continuing Directors; (d) if Holdingsshall at any time fail to own directly or indirectly, beneficially and ofrecord, 100% of each class of issued and outstanding Equity Interests inthe Borrower free and clear of all Liens (other than Liens expressly permittedby clauses (b) and (d) of Section 6.02); or (e) if any change of control (or similar event,however denominated) shall occur under the Subordinated Note Documents.

 

“Change inLaw” shall mean (a) the adoption of any law, rule or regulationafter the Closing Date, (b) any change in any law, rule or regulationor in the interpretation or application thereof by any Governmental Authorityafter the date of this Agreement or (c) complianceby any Lender or the Issuing Bank (or, for purposes of Section 2.14,by any lending office of such Lender or by such Lender’s or Issuing Bank’sholding company, if any) with any request, guideline or directive (whether ornot having the force of law) of any Governmental Authority made or issued afterthe Closing Date.

 

“Charges”shall have the meaning assigned to such term in Section 9.09.

 

“Class”,when used in reference to any Loan or Borrowing, refers to whether such Loan,or the Loans comprising such Borrowing, are Revolving Loans, Term Loans orSwingline Loans and, when used in reference to any Commitment, refers towhether such Commitment is a Revolving Credit Commitment, Term Loan Commitmentor Swingline Commitment.

 

“ClosingDate” shall mean March 15, 2004.

 

“Collateral”shall mean all property and assets of the Loan Parties, now owned or hereafteracquired, upon which a Lien is purported to be created by any SecurityDocument.

 

“CollateralAgent” shall have the meaning assigned to such term in the preamble.

 

“Commitment”shall mean, with respect to any Lender, such Lender’s Revolving CreditCommitment, Term Loan Commitment and Swingline Commitment.

 

“CommitmentFee” shall have the meaning assigned to such term in Section 2.05(a).

 

“CommitmentFee Rate” shall mean a rate per annum equal to 1⁄2 of 1%.

 

“CommitmentLetter” shall mean the Commitment Letter dated as of January 30, 2004,among TTS Holdings and Credit Suisse (formerly known as Credit Suisse FirstBoston).

 

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“ConsolidatedEBITDA” shall mean, for any period, Consolidated Net Income for such periodplus (a) without duplication and to the extent deducted in determiningsuch Consolidated Net Income, the sum of (i) Consolidated Interest Expensefor such period, (ii) consolidated income tax expense for such period, (iii) allamounts attributable to depreciation and amortization for such period,including any increased expense or depreciation or amortization resulting frompurchase accounting adjustments or the write-up of inventory in connection withacquisitions and amortization or write-off of debt discount and debt issuancecosts and commissions, discounts and other fees and charges associated withIndebtedness, (iv) any noncash charges (other than the write-down ofaccounts receivable or inventory held for sale (other than in connection withthe Acquisition or other Permitted Acquisitions consummated after the ClosingDate)) for such period, (v) any restructuring costs for such period thatare incurred in connection with the Acquisition or other Permitted Acquisitionsconsummated after the Closing Date, (vi) any non-recurring orextraordinary fees, charges or other expenses for such period, (vii) bonus and retention payments, includingearn-outs, stock appreciation rights, non-compete payments, phantom stock plansand similar payments, made or incurred in connection with the Acquisition orother Permitted Acquisitions consummated after the Closing Date and thefinancing thereof, (viii) management fees paid during such period, (ix) start-upand related costs associated with the Chinese operations not to exceed thelesser of $1,000,000 and the actual amount of such start-up and related costsin the fiscal years ending December 31, 2004 and December 31, 2005 (providedthat to the extent that all or any portion of the income of any person isexcluded from Consolidated Net Income pursuant to the definition thereof forall or any portion of such period any amounts set forth in the preceding clauses (i) through(ix) that are attributable to such person shall not be included forpurposes of this definition for such period or portion thereof), (x) if andwhen incurred, the amount of integration costs (not to exceed $3,000,000 in theaggregate) associated with the Proposed Domestic Acquisition incurred 12 monthsprior to or after the closing of that acquisition, (xi) for fiscal years 2006,2007 and 2008, the amount of start-up and transition costs (not to exceed$1,500,000 in any single fiscal year or $3,000,000 in the aggregate for allsuch fiscal years) associated with the Borrower’s establishment and expansionof its foreign operations with respect to the Foreign Target, (xii) for fiscalyears 2006, 2007 and 2008, the amount of transition and shut-down costs(including closure (in whole or in part) of facilities, relocation of assets,severance costs and related amounts) associated with the Borrower’sestablishment and expansion of its foreign operations with respect to theForeign Target, not to exceed $1,500,000 in any single fiscal year or$3,000,000 in the aggregate for all such fiscal years and (xiii) for purposesof determining compliance with the financial covenants in Sections 6.11,6.12 and 6.13, the Cure Amount received by the Borrower for suchperiod and permitted to be included in Consolidated EBITDA pursuant to (andsubject to the provisions in) Section 7.01, and minus (b) withoutduplication, to the extent included in the statement of such Consolidated NetIncome for such period, (i) all cash payments made during such period onaccount of reserves, restructuring charges and other non-cash charges added toConsolidated Net Income pursuant to clause (a)(iv) above in aprevious period and (ii) all non-cash items of income for such period, alldetermined on a consolidated basis in accordance with GAAP; providedthat for purposes of calculating Consolidated EBITDA (other than for purposesof the determination of Excess Cash Flow) for any period (A) theConsolidated EBITDA of any Acquired Entity acquired by the Borrower or anySubsidiary pursuant to a Permitted Acquisition during such period shall beincluded on a proforma basis for such period (assuming theconsummation of such acquisition and the incurrence or assumption

 

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of any Indebtedness in connection therewith occurred as of the firstday of such period) and (B) the Consolidated EBITDA of any person or lineof business Disposed of by the Borrower or any Subsidiary during such periodfor shall be excluded for such period (assuming the consummation of such saleor other disposition and the repayment of any Indebtedness in connectiontherewith occurred as of the first day of such period).

 

“ConsolidatedFixed Charges” shall mean, for any period, without duplication, the sum of (a) Consolidated Interest Expense for such period,plus (b) the aggregate amount of scheduled principal payments (whether ornot made) during such period in respect of long term Indebtedness (includingCapital Lease Obligations and Synthetic Lease Obligations) of the Borrower andthe Subsidiaries (other than (i) payments made by the Borrower or anySubsidiary to the Borrower or a Subsidiary and (ii) amounts payable inrespect of repayment or prepayment of principal of Indebtedness (not to exceed$5,000,000) incurred by the Foreign Target from a lender that is organized ordoing business in the jurisdiction in which the Foreign Target is located or aprovince thereof), plus (c) Capital Expenditures for such period (otherthan Foreign Target Capital Expenditures and Capital Expenditures in connectionwith restructuring and start-up costs relating to the Proposed DomesticAcquisition, the Proposed Foreign Acquisition and other Permitted Acquisitionsconsummated after the Closing Date), plus (d) the aggregate amount ofincome taxes paid in cash by the Borrower and the Subsidiaries during suchperiod.

 

“ConsolidatedInterest Expense” shall mean, for any period, the cash interest expense(including imputed interest expense in respect of Capital Lease Obligations andSynthetic Lease Obligations) of the Borrower and the Subsidiaries for suchperiod (including all commissions, discounts and other fees and charges owed bythe Borrower and the Subsidiaries with respect to letters of credit and bankers’acceptance financing), net of interest income, in each case determined on aconsolidated basis in accordance with GAAP. For purposes of the foregoing,interest expense shall be determined after giving effect to any net paymentsmade or received by the Borrower or any Subsidiary with respect to interestrate Hedging Agreements (excluding (i) cash costs paid to unwind a HedgingAgreement existing on the Closing Date and (ii) interest expenseattributable to up to $5,000,000 of outstanding Indebtedness incurred by theForeign Target from a lender that is organized or doing business in ajurisdiction in which the Foreign Target is located or a province thereof).

 

“ConsolidatedNet Income” shall mean, for any period, the net income or loss of theBorrower and the Subsidiaries for such period determined on a consolidatedbasis in accordance with GAAP; provided that there shall be excluded (a) theincome of any Subsidiary to the extent that the declaration or payment ofdividends or similar distributions (including a distribution in respect ofintercompany Indebtedness) by such Subsidiary of that income is not at the timepermitted by operation of the terms of its charter or any agreement,instrument, judgment, decree, statute, rule or governmental regulationapplicable to such Subsidiary, (b) the income or loss of any personaccrued prior to the date it becomes a Subsidiary or is merged into orconsolidated with the Borrower or any Subsidiary or the date that such person’sassets are acquired by the Borrower or any Subsidiary, (c) the income ofany person (other than a Subsidiary) in which any other person (other than theBorrower or a Subsidiary or any director holding qualifying shares inaccordance with applicable law) has an interest, except to the extent of theamount of dividends or other distributions actually paid to the Borrower or aSubsidiary by such person during such period, and (d) any extraordinarygains or losses.

 

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“ContinuingDirectors” shall mean, at any time of determination, any member of theboard of directors of Holdings who (a) was a member of such board ofdirectors on the Amendment Effective Date, (b) was nominated for electionor elected to such board of directors with the approval of a majority of theContinuing Directors who were members of such board of directors at the time ofsuch nomination or election, (c) prior to the consummation of a QualifiedIPO, was nominated by the Sponsors pursuant to the Stockholders Agreement or (d) followingthe consummation of a Qualified IPO, was nominated for election or elected tosuch board of directors by the Sponsors at such time when the Permitted Holdersare the beneficial owners, directly or indirectly, of Equity Interestsrepresenting more than 50% of the aggregate ordinary voting power representedby the issued and outstanding Equity Interests in Holdings.

 

“Control”shall mean the possession, directly or indirectly, of the power to direct orcause the direction of the management or policies of a person, whether throughthe ownership of voting securities, by contract or otherwise, and the terms “Controlling”and “Controlled” shall have meanings correlative thereto.

 

“CreditEvent” shall have the meaning assigned to such term in Section 4.01.

 

“CureAmount” shall have the meaning assigned to such term in Section 7.01.

 

“Cure Right”shall have the meaning assigned to such term in Section 7.01.

 

“CureSecurities” shall mean equity securities of Holdings (the net proceeds ofwhich are contributed to the common equity of the Borrower) having no mandatoryredemption, repurchase, repayment or similar requirements prior to the datewhich occurs six months after the later of the Revolving Credit Maturity Date,the Term Loan Maturity Date or the Incremental Term Loan Maturity Date, andupon which all dividends or distributions shall be payable in additional sharesof such security only, and which are not convertible or exchangeable into anyother instrument (other than common equity of Holdings) and are not guaranteedor secured.

 

“CurrentAssets” shall mean, at any time, the consolidated current assets (otherthan cash and Permitted Investments) of the Borrower and the Subsidiaries.

 

“CurrentLiabilities” shall mean, at any time, the consolidated current liabilitiesof the Borrower and the Subsidiaries at such time, but excluding, withoutduplication, (a) the current portion of any long-term Indebtedness and (b) outstandingRevolving Loans and Swingline Loans.

 

“Default”shall mean any event or condition which constitutes an Event of Default orwhich upon notice, lapse of time or both would constitute an Event of Default.

 

“DefaultingLender” shall mean any Revolving Lender that has either (a) defaultedin its obligation to make a Revolving Loan or to fund its participation in aLetter of Credit or Swingline Loan required to be made or funded by ithereunder, (b) notified the Administrative Agent or the Borrower inwriting that it does not intend to satisfy any such obligation described in clause(a) or (c) become insolvent or been taken over by any regulatoryauthority or agency.

 

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“Disposition”shall have the meaning assigned to such term in the definition of “Asset Sale”and the term “Dispose” shall have a correlative meaning.

 

“DocumentationAgent” shall have the meaning assigned to such term in the preamble.

 

“dollars”or “$” shall mean lawful money of the United States of America.

 

“DomesticSubsidiaries” shall mean all Subsidiaries incorporated, formed or organizedunder the laws of the United States of America, any State thereof or theDistrict of Columbia.

 

“EnvironmentalLaws” shall mean all former, current and future Federal, state, local andforeign laws (including common law), treaties, regulations, rules, ordinances,codes, decrees, judgments, directives, orders (including consent orders), andagreements in each case, relating to protection of the environment, naturalresources, human health and safety or the presence, Release of, threatenedRelease, or exposure to, Hazardous Materials, or the generation, manufacture,processing, distribution, use, treatment, storage, transport, recycling orhandling of, or the arrangement for such activities with respect to, HazardousMaterials.

 

“EnvironmentalLiability” shall mean all liabilities, obligations, damages, losses,claims, actions, suits, judgments, orders, fines, penalties, fees, expenses andcosts (including administrative oversight costs, natural resource damages andremediation costs), whether contingent or otherwise, arising out of or relatingto (a) compliance or non-compliance with any Environmental Law, (b) thegeneration, use, handling, transportation, storage, treatment or disposal ofany Hazardous Materials, (c) exposure to any Hazardous Materials, (d) theRelease or threatened Release of any Hazardous Materials or (e) anycontract, agreement or other consensual arrangement pursuant to which liabilityis assumed or imposed with respect to any of the foregoing.

 

“EnvironmentalPermit” shall mean any Permit under Environmental Law.

 

“EquityInterests” shall mean shares of capital stock, partnership interests,membership interests in a limited liability company, beneficial interests in atrust or other equity interests in any person, or any obligations convertibleinto or exchangeable for, or giving any person a right, option or warrant toacquire, such equity interests or such convertible or exchangeable obligations.

 

“EquityIssuance” shall mean any issuance or sale by Holdings or the Borrower ofany Equity Interests of Holdings or the Borrower, as applicable, or the receiptby Holdings or the Borrower of any capital contribution, as applicable, exceptin each case for (a) in the case of the Borrower, any issuance or sale to,or any receipt of any capital contribution from, Holdings, (b) anyissuance of directors’ qualifying shares, (c) sales or issuances of commonstock of Holdings to management or employees of Holdings, the Borrower or anySubsidiary under any employee stock option or stock purchase plan or employeebenefit plan in existence from time to time in the ordinary course of business,(d) any issuance or sale by, or capital contribution in, Holdings or theBorrower in a transaction not constituting a public offering so long as the NetCash Proceeds thereof are (i) on or before the date of receipt thereof,designated by Holdings or the Borrower, as the case may be, pursuant to anotice to the Administrative Agent (specifying the amount and designated usethereof) for use to fund a Permitted Acquisition in accordance

 

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with the terms hereof and (ii) within 30 days of the receiptthereof, applied to fund such Permitted Acquisition in accordance with theterms hereof; provided that in the case of any failure to satisfy therequirement in clause (ii) such Net Cash Proceeds shall be deemedto have been received for purposes of Section 2.13 when the 30-dayperiod referred to therein expires and (e) Cure Securities.

 

“ERISA”shall mean the Employee Retirement Income Security Act of 1974, as amended fromtime to time.

 

“ERISAAffiliate” shall mean any trade or business (whether or not incorporated)that, together with the Borrower, is treated as a single employer under Section 414(b) or(c) of the Tax Code, or solely for purposes of Section 302 of ERISAand Section 412 of the Tax Code, is treated as a single employer under Section 414of the Tax Code.

 

“ERISAEvent” shall mean (a) any “reportable event”, as defined in Section 4043of ERISA or the regulations issued thereunder, with respect to a Benefit Plan(other than an event for which the 30-day notice period is waived); (b) theexistence with respect to any Benefit Plan of an “accumulated fundingdeficiency” (as defined in Section 412 of the Tax Code or Section 302of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) ofthe Tax Code or Section 303(d) of ERISA of an application for awaiver of the minimum funding standard with respect to any Benefit Plan; (d) theincurrence by the Borrower or any of its ERISA Affiliates of any liabilityunder Title IV of ERISA with respect to the termination of any Benefit Plan orthe withdrawal or partial withdrawal of the Borrower or any of its ERISAAffiliates from any Benefit Plan or Multiemployer Plan; (e) the receipt bythe Borrower or any of its ERISA Affiliates from the PBGC or a planadministrator of any notice relating to the intention to terminate any BenefitPlan or Plans or to appoint a trustee to administer any Benefit Plan; (f) theadoption of any amendment to a Benefit Plan that would require the provision ofsecurity pursuant to Section 401(a)(29) of the Tax Code or Section 307of ERISA; (g) the receipt by the Borrower or any of its ERISA Affiliatesof any notice, or the receipt by any Multiemployer Plan from the Borrower orany of its ERISA Affiliates of any notice, concerning the imposition ofWithdrawal Liability or a determination that a Multiemployer Plan is, or isexpected to be, insolvent or in reorganization, within the meaning of Title IVof ERISA; (h) the occurrence of a “prohibited transaction” with respect towhich the Borrower or any of the Subsidiaries is a “disqualified person”(within the meaning of Section 4975 of the Tax Code) or with respect towhich the Borrower or any such Subsidiary could otherwise be liable; or (i) anyother event or condition with respect to a Benefit Plan or Multiemployer Planthat could result in liability of the Borrower or any Subsidiary.

 

“Eurodollar”,when used in reference to any Loan or Borrowing, refers to whether such Loan,or the Loans comprising such Borrowing, are bearing interest at a ratedetermined by reference to the Adjusted LIBO Rate.

 

“Event ofDefault” shall have the meaning assigned to such term in Article VII.

 

“ExcessCash Flow” shall mean, for any fiscal year of the Borrower, the excess of (a) thesum, without duplication, of (i) Consolidated EBITDA for such fiscal year(calculated without giving effect to the last proviso set forth in thedefinition of Consolidated EBITDA) and (ii) the

 

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decrease, if any, in Current Assets minus Current Liabilities (otherthan for the Foreign Target) from the beginning to the end of such fiscal yearover (b) the sum, without duplication, of (i) the amount of any Taxespayable in cash by Holdings and the Subsidiaries with respect to such fiscalyear, (ii) Consolidated Interest Expense (including for Indebtednessincurred in connection with the Proposed Domestic Acquisition and the ProposedForeign Acquisition) for such fiscal year payable in cash, (iii) theaggregate amount paid in cash in respect of Capital Expenditures (including inconnection with the Proposed Domestic Acquisition and for the Proposed ForeignAcquisition) and Permitted Acquisitions in accordance with Sections 6.10and 6.04, respectively, during such fiscal year (and including in suchfiscal year, in the case of Capital Expenditures with respect to which theobligation to make payment has accrued in the last fiscal quarter of suchfiscal year but such obligation is not payable in cash until the immediatelyfollowing fiscal quarter, the amount to be paid in cash in such followingfiscal quarter; provided that such amount, when paid in such followingfiscal quarter, shall not be included in this clause (iii)), ineach case, except to the extent financed with the proceeds of Indebtedness,equity issuances, casualty proceeds, condemnation proceeds or other proceedsthat would not be included in Consolidated EBITDA, (iv) permanentrepayments of Indebtedness (other than mandatory prepayments of Loans under Section 2.13)made by the Borrower and the Subsidiaries during such fiscal year, but only tothe extent that such prepayments by their terms cannot be reborrowed or redrawnand do not occur in connection with a refinancing of all or any portion of suchIndebtedness, (v) the amount paid in cash by Holdings, the Borrower andthe Subsidiaries during such fiscal year as a purchase price adjustment inconnection with the Acquisition pursuant to the terms of the Purchase Agreement(as existing on the Closing Date), (vi) the amount paid in cash byHoldings and the Subsidiaries during such fiscal year as a purchase priceadjustment pursuant to the Purchase Agreement, (vii) the increase, if any,in Current Assets minus Current Liabilities (in each case, other than for theForeign Target) from the beginning to the end of such fiscal year and (viii) theaggregate amount of Investments made by the Borrower and Subsidiaries in theForeign Target.

 

“ExcludedForeign Subsidiaries” shall mean, at any time, any Foreign Subsidiary thatis (or is treated as) for United States federal income tax purposes either (a) acorporation or (b) a pass-through entity owned directly or indirectly byanother Foreign Subsidiary that is (or is treated as) a corporation.

 

“ExcludedTaxes” shall mean, with respect to the Administrative Agent, any Lender,the Issuing Bank or any other recipient of any payment to be made by or onaccount of any obligation of the Borrower hereunder, (a) income orfranchise taxes imposed on (or measured by) its net income as a result of apresent or former connection between such recipient and the jurisdictionimposing such tax (or any political subdivision thereof), other than any suchconnection arising solely from such recipient having executed, delivered orperformed its obligations or received a payment under, or enforced, thisAgreement or any other Loan Document and (b) in the case of a ForeignLender (other than an assignee pursuant to a request by the Borrower under Section 2.21(a)),any withholding tax that is imposed on amounts payable to such Foreign Lenderat the time such Foreign Lender becomes a party to this Agreement (ordesignates a new lending office) or is attributable to such Foreign Lender’sfailure to comply with Section 2.20(d), except to the extent thatsuch Foreign Lender (or its assignor, if any) was entitled, at the time ofdesignation of a new lending office (or assignment), to receive additionalamounts from the Borrower with respect to such withholding tax pursuant to Section 2.20(a).

 

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“ExemptedAssets Sales” means a Disposition of assets (whether real or personal, andwhether tangible or intangible), within nine months (unless otherwise extendedfor no more than three months by the Administrative Agent in its solediscretion) following their acquisition by the Borrower or a Subsidiary in theProposed Domestic Acquisition or the acquisition of the assets of, or EquityInterests of (resulting in a Subsidiary), a person in connection with theProposed Foreign Acquisition (but in each case only as to assets actuallyacquired in the Proposed Domestic Acquisition or such an acquisition inconnection with the Proposed Foreign Acquisition).

 

“ExistingCredit Agreement” means the Credit Agreement, dated as of March 15,2004, among Holdings, the Borrower, the Lenders, the Administrative Agent, theCollateral Agent, the Arranger, the Syndication Agent and the DocumentationAgent as amended or modified and in effect immediately prior to the AmendmentEffective Date.

 

“Facility”shall mean each of (a) the Term Loan Commitments and the Term Loans madethereunder (the “Term Loan Facility”), and (b) the Revolving CreditCommitments and the extensions of credit made thereunder (the “RevolvingCredit Facility”).

 

“FederalFunds Effective Rate” shall mean, for any day, the weighted average of therates on overnight Federal funds transactions with members of the FederalReserve System arranged by Federal funds brokers, as published on the nextsucceeding Business Day by the Federal Reserve Bank of New York, or, if suchrate is not so published for any day that is a Business Day, the average of thequotations for the day for such transactions received by the AdministrativeAgent from three Federal funds brokers of recognized standing selected by it.

 

“FeeLetters” shall mean, collectively, the Initial Fee Letter and the AmendmentFee Letter.

 

“FeeTrigger Date” shall mean the day that is 61 days following the AmendmentEffective Date

 

“Fees” shallmean the Commitment Fees, the Administrative Agent Fees, the L/C ParticipationFees and the Issuing Bank Fees.

 

“FinancialOfficer” of any person shall mean the chief financial officer, principalaccounting officer, treasurer or controller of such person.

 

“FixedCharge Coverage Ratio” shall mean, on the last day of any fiscal quarter,the ratio of (a) Consolidated EBITDA for the period of four consecutivefiscal quarters most recently ended on and prior to such date, taken as oneaccounting period, to (b) Consolidated Fixed Charges for the period offour consecutive fiscal quarters most recently ended on and prior to such date,taken as one accounting period.

 

“ForeignLender” shall mean any Lender that is organized under the laws of ajurisdiction other than that in which the Borrower is located. For purposes ofthis definition, the United States of America, each State thereof and theDistrict of Columbia shall be deemed to constitute a single jurisdiction.

 

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“ForeignSubsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

 

“ForeignTarget” means, collectively, any direct or indirect Subsidiaries of theBorrower that are organized or existing under the laws of a foreignjurisdiction previously identified in writing to the Administrative Agent or aprovince thereof or a majority of the value (as determined in good faith by theBorrower) of whose properties or assets are located in such jurisdiction or aprovince thereof.

 

“ForeignTarget Capital Expenditures” shall mean, for any period, (a) expendituresmade with respect to the Foreign Target outside of the ordinary course ofbusiness (including the acquisition of the Equity Interests (resulting in aSubsidiary) of, all or substantially all of the assets of, a line of businessof, or a business unit or division of, any person in connection with theProposed Foreign Acquisition, and the acquisition of any other fixed or capitalassets acquired outside of the ordinary course of business from any person inconnection with the Proposed Foreign Acquisition) and (b) expendituresmade in the ordinary course of business to restore, replace or rebuild propertyof the Foreign Target to the condition of such property immediately prior toany damage, loss, destruction or condemnation of such property.

 

“FundedDebt” shall mean as of the last day of any fiscal quarter, Total Debt atsuch time less the amount of cash and Permitted Investments of the Borrower andthe Subsidiary Guarantors at such time in an aggregate amount not to exceed$7,500,000.

 

“FundingDate” shall mean the date on which the Borrowing of Term Loans (other thanIncremental Term Loans) is made following the Amendment Effective Date.

 

“GAAP”shall mean generally accepted accounting principles in the United States.

 

“GovernmentalAuthority” shall mean the government of the United States of America or anyother nation, any political subdivision thereof, whether state or local, andany agency, authority, instrumentality, regulatory body, court, central bank orother entity exercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of or pertaining to government.

 

“GrantingLender” shall have the meaning assigned to such term in Section 9.04(i).

 

“Guarantee”of or by any person (the “guarantor”) shall mean any obligation,contingent or otherwise, of (a) the guarantor or (b) another person(including any bank under a letter of credit) to induce the creation of whichthe guarantor has issued a reimbursement, counterindemnity or similarobligation, in either case guaranteeing or having the economic effect ofguaranteeing any Indebtedness or other obligation of any other person (the “primaryobligor”) in any manner, whether directly or indirectly, and including anyobligation, contingent or otherwise, of the guarantor, direct or indirect, (i) topurchase or pay (or advance or supply funds for the purchase or payment of)such Indebtedness or other obligation or to purchase (or to advance or supplyfunds for the purchase of) any security for the payment of such Indebtedness orother obligation, (ii) to purchase or lease property, securities orservices for the purpose of assuring the owner of such Indebtedness or otherobligation of the payment of such Indebtedness or other obligation, (iii) tomaintain working capital, equity capital or any other financial statementcondition or liquidity of the primary obligor so as to enable the primaryobligor to pay

 

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such Indebtedness or other obligation, (iv) as an account party inrespect of any letter of credit or letter of guaranty issued to support suchIndebtedness or obligation or (v) to otherwise assure or hold harmless theowner of such Indebtedness or other obligation against loss in respect thereof;provided, however, that the term “Guarantee” shall not includeendorsements for collection or deposit in the ordinary course of business.

 

“Guaranteeand Collateral Agreement” shall mean the Guarantee and Collateral Agreementin the form of Exhibit E, to be executed and delivered byHoldings, the Borrower and each Subsidiary Guarantor.

 

“Guarantors”shall mean Holdings and the Subsidiary Guarantors.

 

“HazardousMaterials” shall mean any petroleum (including crude oil or fractionthereof) or petroleum products or byproducts, or any pollutant, contaminant,chemical, compound, constituent, or hazardous, toxic or other substances,materials or wastes defined, or regulated as such by, or pursuant to, anyEnvironmental Law, or requires removal, remediation or reporting under anyEnvironmental Law, including asbestos, or asbestos containing material, radonor other radioactive material, polychlorinated biphenyls and urea formaldehydeinsulation.

 

“HedgingAgreement” shall mean any agreement with respect to any swap, forward,future or derivative transaction or option or similar agreement involving, orsettled by reference to, one or more rates, currencies, fuel or othercommodities, equity or debt instruments or securities, or economic, financialor pricing indices or measures of economic, financial or pricing risk or valueor any similar transaction or any combination of these transactions; provided,however, that no phantom stock or similar plan providing for paymentsand on account of services provided by current or former directors, officers,employees or consultants of Holdings, the Borrower or any Subsidiary shall be aHedging Agreement.

 

“Holdings”shall have the meaning assigned to such term in the preamble.

 

“Indebtedness”of any person shall mean, without duplication, (a) all obligations of suchperson for borrowed money, (b) all obligations of such person evidenced bybonds, debentures, notes or similar instruments, (c) all obligations ofsuch person under conditional sale or other title retention agreements relatingto property or assets acquired by such person, (d) all obligations of suchperson in respect of the deferred purchase price of property or services (otherthan current trade accounts payable incurred in the ordinary course ofbusiness), (e) all obligations of such person, contingent or otherwise, topurchase, redeem, retire or otherwise acquire for value any Equity Interests insuch person, (f) all Indebtedness of others secured by (or for which theholder of such Indebtedness has an existing right, contingent or otherwise, tobe secured by) any Lien on property owned or acquired by such person, whetheror not the Indebtedness secured thereby has been assumed, (g) allGuarantees by such person of Indebtedness of others, (h) all Capital LeaseObligations or Synthetic Lease Obligations of such person, (i) allobligations, contingent or otherwise, of such person as an account party inrespect of letters of credit and letters of guaranty and (j) all obligations,contingent or otherwise, of such person in respect of bankers’ acceptances. TheIndebtedness of any person shall include the Indebtedness of any other person(including any partnership in which such person is a general partner) to theextent such person is liable therefor as a result of such person’s ownershipinterest

 

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in, or other relationship with, such other person, except to the extentthe terms of such Indebtedness provide (including by a non-recourse nature)that such person is not liable therefor.

 

“IndemnifiedTaxes” shall mean Taxes other than Excluded Taxes and Other Taxes.

 

“Indemnitee”shall have the meaning assigned to such term in Section 9.05(b).

 

“Information”shall have the meaning assigned to such term in Section 9.16.

 

“Incremental Debt Amount” shall mean, at anytime, the amount (if any) equal to (a) $15,000,000 less (b) an amountequal to the aggregate amount of all Incremental Term Loan Commitmentsestablished prior to such time pursuant to Section 2.24.

 

“Incremental Term Lender” shall mean a Lenderwith an Incremental Term Loan Commitment or an outstanding Incremental TermLoan.

 

“Incremental Term Loan” shall mean anincremental term loan made by an Incremental Term Lender to the Borrowerpursuant to clause (b) of Section 2.01. Incremental Term Loansmay be made in the form of additional Term Loans or, to the extentprovided for in the relevant Incremental Term Loan Assumption Agreement andpermitted by Section 2.24, Other Term Loans.

 

“Incremental Term Loan Assumption Agreement”shall mean an Incremental Term Loan Assumption Agreement in form andsubstance reasonably satisfactory to the Administrative Agent, among theBorrower, the Administrative Agent and one or more Incremental Term Lenders.

 

“Incremental Term Loan Commitment” shall mean,with respect to each Lender, the commitment, if any, of such Lender to makeIncremental Term Loans hereunder as set forth on the Incremental Term LoanAssumption Agreement delivered by such Lender or as set forth on Schedule 2.01,or in the Assignment and Acceptance pursuant to which such Lender assumed itsIncremental Term Loan Commitment, as applicable, as the same may be (a) reducedfrom time to time pursuant to Section 2.09 and (b) reduced orincreased from time to time pursuant to assignment by or to such Lenderpursuant to Section 9.04.

 

“IncrementalTerm Loan Maturity Date” shall mean the final maturity date of anyIncremental Term Loan, as set forth in the applicable Incremental Term LoanAssumption Agreement, subject to the limitations thereon set forth in Section 2.24.

 

“IncrementalTerm Loan Repayment Dates” shall mean the dates scheduled for the repaymentof principal of any Incremental Term Loan, as set forth in the applicableIncremental Term Loan Assumption Agreement.

 

“InitialFee Letter” shall mean the Fee Letter dated as of January 30, 2004,among TTS Holdings and Credit Suisse (formerly known as Credit Suisse FirstBoston).

 

“IntellectualProperty Collateral” shall have the meaning assigned to such term in theGuarantee and Collateral Agreement.

 

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“IntellectualProperty Security Agreement” shall mean all Intellectual Property SecurityAgreements to be executed and delivered by the Loan Parties, each substantiallyin the applicable form required by the Guarantee and Collateral Agreement.

 

“InterestCoverage Ratio” shall mean, on the last day of any fiscal quarter, theratio of (a) Consolidated EBITDA for the periodof four consecutive fiscal quarters most recently ended on and prior to suchdate, taken as one accounting period, to (b) Consolidated Interest Expensefor the period of four consecutive fiscal quarters ended on and prior to suchdate, taken as one accounting period.

 

“InterestPayment Date” shall mean (a) with respect to any ABR Loan, the lastBusiness Day of each March, June, September and December and (b) withrespect to any Eurodollar Loan, the last day of the Interest Period applicableto the Borrowing of which such Loan is a part and, in the case of aEurodollar Borrowing with an Interest Period of more than three months’duration, each day that would have been an Interest Payment Date had successiveInterest Periods of three months’ duration been applicable to such Borrowing.

 

“InterestPeriod” shall mean, with respect to any Eurodollar Borrowing, the periodcommencing on the date of such Borrowing and ending on the numericallycorresponding day in the calendar month that is 1, 2, 3 or 6 months thereafter(or 9 or 12 months thereafter if, at the time of the relevant Borrowing, aninterest period of such duration is available to all Lenders participatingtherein), as the Borrower may elect; provided, however, that(a) if any Interest Period would end on a day other than a Business Day,such Interest Period shall be extended to the next succeeding Business Dayunless such next succeeding Business Day would fall in the next calendar month,in which case such Interest Period shall end on the next preceding Business Dayand (b) any Interest Period that commences on the last Business Day of acalendar month (or on a day for which there is no numerically corresponding dayin the last calendar month of such Interest Period) shall end on the lastBusiness Day of the last calendar month of such Interest Period. Interest shallaccrue from and including the first day of an Interest Period to but excludingthe last day of such Interest Period. For purposes hereof, the date of aBorrowing initially shall be the date on which such Borrowing is made andthereafter shall be the effective date of the most recent conversion orcontinuation of such Borrowing.

 

“Investments”shall have the meaning assigned to such term in Section 6.04.

 

“IssuingBank” shall mean, as the context may require, (a) Credit Suisse(formerly known as Credit Suisse First Boston), in its capacity as the issuerof Letters of Credit hereunder, and (b) any other Lender that may becomean Issuing Bank pursuant to Section 2.23(i) or 2.23(k),with respect to Letters of Credit issued by such Lender. The Issuing Bank may,in its discretion, arrange for one or more Letters of Credit to be issued byAffiliates of the Issuing Bank, in which case the term “Issuing Bank” shallinclude any such Affiliate with respect to Letters of Credit issued by suchAffiliate.

 

“IssuingBank Fees” shall have the meaning assigned to such term in Section 2.05(c).

 

“Jineng”shall mean Jineng Composite Materials and Products (Guangzhou) Company Ltd., aSubsidiary organized under the laws of China.

 

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“L/CCommitment” shall mean the commitment of the Issuing Bank to issue Lettersof Credit pursuant to Section 2.23.

 

“L/CDisbursement” shall mean a payment or disbursement made by the Issuing Bankpursuant to a Letter of Credit.

 

“L/CExposure” shall mean, at any time, the sum of (a) the aggregateundrawn amount of all Letters of Credit at such time and (b) the aggregateamount of all L/C Disbursements that have not been reimbursed at such time. TheL/C Exposure of any Revolving Credit Lender at any time shall equal its ProRata Percentage of the aggregate L/C Exposure at such time.

 

“L/C FeePayment Date” shall have the meaning assigned to such term in Section 2.05(c).

 

“L/CParticipation Fee” shall have the meaning assigned to such term in Section 2.05(c).

 

“LenderAddendum” shall mean, with respect to any initial Lender, a Lender Addendumin the form of Exhibit F, or such other form as may besupplied by the Administrative Agent, to be executed and delivered by such Lenderon the Closing Date.

 

“Lenders”shall mean (a) the persons that deliver a Lender Addendum (other than anysuch person that has ceased to be a party hereto pursuant to an Assignment andAcceptance), (b) any person that has become aparty hereto pursuant to an Assignment and Acceptance and (c) any personthat has become a party hereto pursuant to an Incremental Term Loan AssumptionAgreement. Unless the context otherwise requires, the term “Lenders” shallinclude the Swingline Lender.

 

“Letter ofCredit” shall mean any letter of credit issued pursuant to Section 2.23.

 

“LeverageRatio” shall mean, on the last day of any fiscal quarter, the ratio of (a) FundedDebt on such date to (b) Consolidated EBITDA for the period of fourconsecutive fiscal quarters most recently ended on and prior to such date,taken as one accounting period.

 

“LIBO Rate”shall mean, with respect to any Eurodollar Borrowing for any Interest Period,the rate per annum determined by the Administrative Agent at approximately11:00 a.m., London time, on the date that is two Business Days prior tothe commencement of such Interest Period by reference to the British Bankers’Association Interest Settlement Rates for deposits in dollars (as set forth bythe Bloomberg Information Service or any successor thereto or any other serviceselected by the Administrative Agent which has been nominated by the BritishBankers’ Association as an authorized information vendor for the purpose ofdisplaying such rates) for a period equal to such Interest Period; providedthat, to the extent that an interest rate is not ascertainable pursuant to theforegoing provisions of this definition, the “LIBO Rate” shall be the interestrate per annum determined by the Administrative Agent to be the average of therates per annum at which deposits in dollars are offered for such relevantInterest Period to major banks in the London interbank market in London,England by the Administrative Agent at approximately 11:00 a.m. (Londontime) on the date that is two Business Days prior to the beginning of suchInterest Period.

 

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“Lien”shall mean, with respect to any asset, (a) any mortgage, deed of trust,lien (statutory or otherwise), pledge, hypothecation, encumbrance, collateralassignment, charge or security interest in, on or of such asset, (b) theinterest of a vendor or a lessor under any conditional sale agreement, capitallease or title retention agreement (or any financing lease having substantiallythe same economic effect as any of the foregoing) relating to such asset and (c) inthe case of securities, any purchase option, call or similar right of a thirdparty with respect to such securities.

 

“LoanDocuments” shall mean this Agreement, the Supplement and the SecurityDocuments.

 

“LoanParties” shall mean Holdings, the Borrower and each Subsidiary (other thana Foreign Subsidiary) that is or becomes a party to a Loan Document.

 

“Loans”shall mean the Revolving Loans, the Term Loans and the Swingline Loans.

 

“MajorityFacility Lenders” shall mean, with respect to any Facility, the holders(other than Defaulting Lenders) of a majority of the aggregate unpaid principalamount of the Term Loans or the Aggregate Revolving Credit Exposure, as thecase may be, outstanding under such Facility (or, in the case of theRevolving Credit Facility, prior to the termination of the Revolving CreditCommitments, the holders of a majority of the Total Revolving CreditCommitment).

 

“MarginStock” shall have the meaning assigned to such term in Regulation U.

 

“MaterialAdverse Effect” shall mean a material adverse condition or material adversechange in or materially affecting (a) the business, assets, liabilities,operations or condition (financial or otherwise) of Holdings, the Borrower andthe Subsidiaries, taken as a whole, or (b) thevalidity or enforceability of any of the Loan Documents or the material rightsand remedies of the Arranger, the Administrative Agent, the Collateral Agent orthe Secured Parties thereunder.

 

“MaterialIndebtedness” shall mean Indebtedness (other than the Loans and Letters ofCredit), or obligations in respect of one or more Hedging Agreements, of anyone or more of Holdings, the Borrower and the Subsidiaries in an aggregateprincipal amount exceeding $5,000,000. For purposes of determining MaterialIndebtedness, the “principal amount” of the obligations of Holdings, theBorrower or any Subsidiary in respect of any Hedging Agreement at any timeshall be the maximum aggregate amount (giving effect to any netting agreements)that Holdings, the Borrower for such Subsidiary would be required to pay ifsuch Hedging Agreement were terminated at such time.

 

“MaximumRate” shall have the meaning assigned to such term in Section 9.09.

 

“Moody’s”shall mean Moody’s Investors Service, Inc.

 

“MortgagedProperties” shall mean, initially, each parcel of real property and theimprovements thereto owned or leased by a Loan Party and specified on Schedule 1.01(b),and shall include each other parcel of real property and improvements theretowith respect to which a Mortgage is granted pursuant to Section 5.09or 5.10.

 

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“Mortgages”shall mean the fee or leasehold mortgages or deeds of trust, assignments ofleases and rents and other security documents granting a Lien on any MortgagedProperty to secure the Obligations, if such Mortgaged Property is owned, in theform of Exhibit G or, if such Mortgaged Property is leased, inform reasonably satisfactory to the Collateral Agent, as the case may be,with such changes as shall be advisable under the law of the jurisdiction inwhich such Mortgage is to be recorded and as are reasonably satisfactory to theCollateral Agent, as the same may be amended, supplemented, replaced orotherwise modified from time to time in accordance with this Agreement.

 

“MultiemployerPlan” shall mean a multiemployer plan as defined in Section 4001(a)(3) ofERISA to which the Borrower or any ERISA Affiliate may have any liability.

 

“Net CashProceeds” shall mean (a) with respect to any Asset Sale or RecoveryEvent, the proceeds thereof in the form of cash and Permitted Investments(including any such proceeds subsequently received (as and when received) inrespect of noncash consideration initially received), net of (i) sellingexpenses (including reasonable and customary broker’s or investment banker’sfees or commissions, legal fees, transfer and similar taxes incurred by theBorrower and the Subsidiaries in connection therewith and the Borrower’s goodfaith estimate of income taxes paid or payable in connection with such sale,after taking into account any available tax credits or deductions and any taxsharing arrangements), (ii) amounts provided as a reserve, in accordancewith GAAP, against any liabilities under any indemnification obligations orpurchase price adjustment associated with such Asset Sale (providedthat, to the extent and at the time any such amounts are released from suchreserve, such amounts shall constitute Net Cash Proceeds) and (iii) theprincipal amount, premium or penalty, if any, interest and other amounts on anyIndebtedness for borrowed money which is secured by the asset sold in suchAsset Sale and which is required to be repaid with such proceeds (other thanany such Indebtedness assumed by the purchaser of such asset); provided,however, that, if (x) the Borrower shall deliver a certificate of aFinancial Officer of the Borrower to the Administrative Agent within threeBusiness Days of the time of receipt thereof setting forth the Borrower’sintent to reinvest such proceeds in assets of a kind then used or usable in thebusiness of the Borrower and the Subsidiaries within 365 days of receipt ofsuch proceeds and (y) no Event of Default shall have occurred and be continuingat the time of such certificate, such proceeds shall not constitute Net CashProceeds except to the extent not so used at the end of such 365-day period, atwhich time such proceeds shall be deemed to be Net Cash Proceeds; providedfurther, however, that, if (A) such proceeds shall resultfrom an Asset Sale or Recovery Event to the extent involving assets, rights orother property of a Subsidiary that is not a Loan Party, (B) the terms ofany Indebtedness of such Subsidiary require that such proceeds be applied torepay such Indebtedness, (C) the Borrower shall deliver a certificate of aFinancial Officer to the Administrative Agent within three Business Days of thetime of receipt thereof setting forth the Borrower’s intent to use suchproceeds to repay such Indebtedness of such Subsidiary to the extent requiredthereby and, if such Indebtedness is revolving credit Indebtedness, tocorrespondingly reduce commitments with respect thereto, within 365 days ofreceipt of such proceeds and (D) no Event of Default shall have occurredand be continuing at the time of such certificate, such proceeds shall notconstitute Net Cash Proceeds except to the extent not so used at the end ofsuch 365-day period, at which time such proceeds shall be deemed to be Net CashProceeds; and (b) with respect to any issuance or disposition ofIndebtedness or any Equity Issuance, the cash proceeds thereof, net of alltaxes and reasonable and customary fees (including

 

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legal fees), commissions, underwriting discounts, costs and otherexpenses incurred by the Borrower and the Subsidiaries in connection therewith.

 

“Obligations”shall mean all obligations defined as “Obligations” in the Guarantee andCollateral Agreement and the other Security Documents.

 

“OtherTaxes” shall mean any and all present or future stamp or documentary taxesor any other excise or property taxes, charges or similar levies (includinginterest, fines, penalties and additions to tax) arising from any payment madeunder any Loan Document or from the execution, delivery or enforcement of, orotherwise with respect to, any Loan Document.

 

“Other TermLoans” shall have the meaning assigned to such term in Section 2.24(a).

 

“PBGC”shall mean the Pension Benefit Guaranty Corporation referred to and defined inERISA and any successor entity performing similar functions.

 

“PerfectionCertificate” shall mean the Pre-Closing UCC Diligence Certificatesubstantially in the form of Exhibit H or any other form approvedby the Collateral Agent.

 

“Permits”shall mean any and all material franchises, licenses, leases, permits,approvals, notifications, certifications, registrations, authorizations,exemptions, qualifications, easements, rights of way, Liens and other rights,privileges and approvals required under any Requirement of Law.

 

“PermittedAcquisition” shall mean (a) the Proposed Domestic Acquisition and theacquisition of the assets of, or Equity Interests of (resulting in aSubsidiary), a person in connection with the Proposed Foreign Acquisition and (b) anyother acquisition by the Borrower or any Subsidiary of all or substantially allthe assets of a person or line of business of such person, or all of the EquityInterests of a person (referred to herein as the “Acquired Entity”); providedthat (i) the Acquired Entity shall be a going concern and shall be in aPermitted Business; (ii) at the time of such transaction (A) bothbefore and after giving effect thereto, no Event of Default or Default shallhave occurred and be continuing; (B) the Borrower would be in compliancewith the covenants set forth in Sections 6.11 and 6.13 and if theaggregate consideration paid in connection with such acquisition and anyrelated acquisition (including any Indebtedness of the Acquired Entity that isassumed by the Borrower or any Subsidiary following such acquisition) is (x) $5,000,000 or more, then the Leverage Ratio would beat least 0.25 to 1.0 less than the maximum Leverage Ratio permitted under Section 6.12at such time or (y) less than $5,000,000, then the Borrower would be incompliance with the covenant set forth in Section 6.12, in eachcase described in this clause (B) as of the most recently completedperiod ending prior to such transaction for which the financial statements andcertificates required by Section 5.04(a) or 5.04(b) wererequired to be delivered or for which comparable financial statements have beenfiled with or furnished to the Securities and Exchange Commission, after givingproforma effect to such transaction and to any other eventoccurring after such period as to which proforma recalculationis appropriate (including any other transaction described in this definitionoccurring after such period) as if such transaction (and the occurrence orassumption of any Indebtedness in connection therewith) had occurred as of thefirst day of such period; and (C) in the caseof other than the Proposed Foreign Acquisition, after

 

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giving effect to such acquisition, there must be at least $5,000,000 ofunused and available Revolving Credit Commitments; and (iii) the Borrowershall comply, and shall cause the Acquired Entity to comply, with theapplicable provisions of Sections 5.09 and 5.10 and the SecurityDocuments.

 

“PermittedAsset Swap” shall mean any transfer of properties or assets by the Borroweror any of the Subsidiaries in which at least 90% of the consideration receivedby the transferor consists of properties or assets (other than cash orPermitted Investments) useful in the business of the Borrower or theSubsidiaries; provided that (a) the aggregate fair market value (asdetermined in good faith by the board of directors of the Borrower) of theproperty or assets being transferred by the Borrower or such Subsidiary is notgreater than the aggregate fair market value (as determined in good faith bythe board of directors of the Borrower) of the property or assets received bythe Borrower or such Subsidiary in such transfer and (b) the aggregatefair market value (as determined in good faith by the board of directors of theBorrower) of all property or assets transferred by the Borrower or any of theSubsidiaries in such transfer, together with the aggregate fair market value ofall other property or assets transferred in prior Permitted Asset Swaps in suchfiscal year, shall not exceed $2,000,000 in any fiscal year.

 

“PermittedBusiness” shall mean any business conducted or proposed to be conducted bythe Borrower and the Subsidiaries on the date of this Agreement or any businessthat is similar, reasonably related, incidental or ancillary thereto or to themanufacture of sports equipment or metal or graphite products.

 

“PermittedHolders” shall mean the Sponsor and the Sponsor Related Parties.

 

“PermittedHoldings Indebtedness” shall mean Indebtedness of Holdings which (a) doesnot require the payment of cash interest, does not mature, and is not subjectto mandatory repurchase, redemption or amortization (other than pursuant tocustomary asset sale or change of control provisions requiring redemption orrepurchase only if and to the extent permitted by this Agreement), in eachcase, prior to the date that is six months after the Term Loan Maturity Date, (b) is not secured by any assets of Holdings, theBorrower or any Subsidiary, (c) is not Guaranteed by the Borrower or anySubsidiary, (d) is not exchangeable or convertible into Indebtedness ofHoldings (except other Permitted Holdings Indebtedness), the Borrower or anySubsidiary or any preferred stock or other Equity Interest (other than commonequity of Holdings, provided that any such exchange or conversion, ifeffected, would not result in a Change in Control) and (e) is subordinatedto the Obligations to the same degree (or to a greater degree) as thoseobligations that are subject to the Affiliate Subordination Agreement.

 

“PermittedInvestments” shall mean:

 

(a)                                  directobligations of, or obligations the principal of and interest on which areunconditionally guaranteed by, the United States of America (or by any agency thereofto the extent such obligations are backed by the full faith and credit of theUnited States of America), in each case maturing within one year from the dateof acquisition thereof;

 

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(b)                                 investmentsin commercial paper maturing within 270 days from the date of acquisitionthereof and having, at such date of acquisition, the highest credit ratingobtainable from S&P or from Moody’s;

 

(c)                                  investmentsin certificates of deposit, banker’s acceptances and time deposits maturingwithin 270 days from the date of acquisition thereof issued or guaranteed by orplaced with, and money market deposit accounts issued or offered by, theAdministrative Agent or any domestic office of any commercial bank organized underthe laws of the United States of America or any State thereof that has acombined capital and surplus and undivided profits of not less than$500,000,000;

 

(d)                                 fullycollateralized repurchase agreements with a term of not more than 30 days forsecurities described in clause (a) above and entered into with afinancial institution satisfying the criteria of clause (c) above;

 

(e)                                  investmentsin “money market funds” within the meaning of Rule 2a-7 of the InvestmentCompany Act of 1940, as amended, substantially all of whose assets are investedin investments of the type described in clauses (a) through (d) above;and

 

(f)                                    othershort-term investments utilized by Foreign Subsidiaries in accordance withnormal investment practices for cash management in investments of a typeanalogous to the foregoing.

 

“PermittedRefinancing Indebtedness” shall mean Indebtedness issued or incurred(including by means of the extension or renewal of existing Indebtedness) torefinance, refund, extend, renew or replace existing Indebtedness (“RefinancedIndebtedness”); provided that (a) theprincipal amount of such refinancing, refunding, extending, renewing orreplacing Indebtedness is not greater than the principal amount of suchRefinanced Indebtedness plus the amount of any premiums or penalties andaccrued and unpaid interest paid thereon and reasonable fees and expenses, ineach case associated with such refinancing, refunding, extension, renewal orreplacement, (b) such refinancing, refunding, extending, renewing orreplacing Indebtedness has a final maturity that is no sooner than, and aweighted average life to maturity that is no shorter than, such RefinancedIndebtedness, (c) if such Refinanced Indebtedness or any Guaranteesthereof are subordinated to the Obligations, such refinancing, refunding,extending, renewing or replacing Indebtedness and any Guarantees thereof remainso subordinated on terms no less favorable to the Lenders, (d) theobligors in respect of such Refinanced Indebtedness immediately prior to suchrefinancing, refunding, extending, renewing or replacing are the only obligorson such refinancing, refunding extending, renewing or replacing Indebtednessand (e) unless such refinancing, refunding, extending, renewing orreplacing shall occur within 30 days of the final maturity of such RefinancedIndebtedness, such refinancing, refunding, extending, renewing or replacingIndebtedness contains covenants and events of default and is benefited byGuarantees, if any, which, taken as a whole, are determined in good faith by aFinancial Officer of the Borrower to be no less favorable to the Borrower orthe applicable Subsidiary and the Lenders in any material respect than thecovenants and events of default or Guarantees, if any, in respect of suchRefinanced Indebtedness; providedfurther, however, thatany Indebtedness issued or incurred to refinance, refund, extend, renew orreplace

 

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the Indebtedness of Jineng that is set forth in Schedule 6.01or the Foreign Target shall not be subject to clause (b) or clause(e) above.

 

“person”shall mean any natural person, corporation, trust, business trust, jointventure, joint stock company, association, company, limited liability company,partnership, Governmental Authority or other entity.

 

“PledgedCollateral” shall have the meaning assigned to such term in the Guaranteeand Collateral Agreement.

 

“Prime Rate”shall mean the rate of interest per annum announced from time to time by CreditSuisse as its prime rate in effect at its principal office in New York City;each change in the Prime Rate shall be effective as of the opening of businesson the date such change is announced as being effective. The Prime Rate is areference rate and does not necessarily represent the lowest or best rateactually available.

 

“Pro FormaEBITDA” shall have the meaning assigned to such term in Section 4.02(k).

 

“ProposedDomestic Acquisition” means the acquisition made pursuant to an assetpurchase agreement, dated as of the Funding Date, between the Borrower, as thepurchaser, and a company previously disclosed to the Administrative Agent, asthe seller.

 

“ProposedForeign Acquisition” means the Borrower’s establishment or expansion of aPermitted Business in a foreign jurisdiction previously identified in writingto the Administrative Agent or any province thereof, including by way of theacquisition of the assets of, or of the Equity Interests of (resulting in aSubsidiary), a Person located in such jurisdiction or a province thereof, or themaking of Capital Expenditures therein.

 

“Pro RataPercentage” of any Revolving Credit Lender, at any time, shall mean thepercentage of the Total Revolving Credit Commitment represented by such Lender’sRevolving Credit Commitment. In the event the Revolving Credit Commitmentsshall have expired or been terminated, the Pro Rata Percentages of anyRevolving Credit Lender shall be determined on the basis of the RevolvingCredit Commitments most recently in effect prior thereto.

 

“PurchaseAgreement” shall mean the stock purchase agreement dated as of January 30,2004, by and among TTS Holdings, the Sellers and Holdings.

 

“QualifiedIPO” shall mean an underwritten initial public offering of common stock of(and by) Holdings pursuant to an effective registration statement filed withthe Securities and Exchange Commission in accordance with the Securities Act of1933, as amended, which initial public offering results in gross cash proceedsto Holdings of $50,000,000 or more.

 

“RealProperty” shall mean all Mortgaged Property and all other real propertyowned or leased from time to time by Holdings, the Borrower and theSubsidiaries.

 

“ReceivablesSubsidiary” shall mean a Subsidiary which engages in no activities otherthan in connection with the financing of accounts receivable or related assets(including contract rights) and which is designated by the board of directorsof the Borrower (as provided below) as

 

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a Receivables Subsidiary (a) no portion of the Indebtedness or anyother obligations (contingent or otherwise) of which (i) is guaranteed byHoldings, the Borrower or any of the other Subsidiaries (but excludingcustomary representations, warranties, covenants and indemnities entered intoin connection with a Securitization Transaction), (ii) is recourse to orobligates Holdings, the Borrower or any of the other Subsidiaries in any wayother than pursuant to customary representations, warranties, covenants andindemnities entered into in connection with a Securitization Transaction or (iii) subjectsany property or asset (including contract rights) of Holdings, the Borrower orany of the other Subsidiaries (other than accounts receivable and relatedassets provided in the definition of “Securitization Transaction”), directly orindirectly, contingently or otherwise, to the satisfaction thereof, other thanpursuant to customary representations, warranties, covenants and indemnitiesentered into in connection with a Securitization Transaction, (b) withwhich none of Holdings, the Borrower or any of the other Subsidiaries has anymaterial contract, agreement, arrangement or understanding other than on termsno less favorable to Holdings, the Borrower or such other Subsidiary than thosethat might be obtained at the time from persons who are not Affiliates ofHoldings, other than customary fees payable in connection with servicingaccounts receivable and (c) with which none of Holdings, the Borrower orany of the other Subsidiaries has any obligation to maintain or preserve suchSubsidiary’s financial condition or cause such Subsidiary to achieve certainlevels of operating results. Any such designation by the board of directors ofthe Borrower shall be evidenced to the Administrative Agent by delivery to theAdministrative Agent of a certified copy of the resolution of the board ofdirectors of the Borrower giving effect to such designation and a certificateof a Financial Officer of the Borrower certifying that such designationcomplied with the foregoing requirements.

 

“RecoveryEvent” shall mean any settlement of or payment in respect of any propertyor casualty insurance claim or any taking under power of eminent domain or bycondemnation or similar proceeding of or relating to any property or asset ofHoldings, the Borrower or any Subsidiary.

 

“Register”shall have the meaning assigned to such term in Section 9.04(d).

 

“RegulationT” shall mean Regulation T of the Board as from time to time in effect andall official rulings and interpretations thereunder or thereof.

 

“RegulationU” shall mean Regulation U of the Board as from time to time in effect andall official rulings and interpretations thereunder or thereof.

 

“RegulationX” shall mean Regulation X of the Board as from time to time in effect andall official rulings and interpretations thereunder or thereof.

 

“RelatedFund” shall mean, with respect to any Lender, any other fund that investsin bank loans and is advised or managed by the same investment advisor ormanager as such Lender or by an Affiliate of such investment advisor ormanager.

 

“RelatedParties” shall mean, with respect to any specified person, such person’sAffiliates and the respective directors, officers, employees, agents andadvisors of such person and such person’s Affiliates.

 

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“Release”shall mean any release, spill, seepage, emission, leaking, pumping, injection,pouring, emptying, deposit, disposal, discharge, dispersal, dumping, escaping,leaching, or migration into, onto or through the environment or within or uponany building, structure, facility or fixture.

 

“RepaymentDate” shall have the meaning given such term in Section 2.11.

 

“RequiredLenders” shall mean, at any time, Lenders (other than Defaulting Lenders)having Loans (excluding Swingline Loans), L/C Exposure, Swingline Exposure andunused Revolving Credit Commitments and Term Loan Commitments representing atleast a majority of the sum of all Loans outstanding (excluding SwinglineLoans), L/C Exposure, Swingline Exposure and unused Revolving CreditCommitments and Term Loan Commitments at such time.

 

“RequiredPrepayment Percentage” shall mean (a) in the case of any Asset Sale orRecovery Event, 100%; (b) in the case of any Equity Issuance, if on thedate of the applicable prepayment, to the extent that the Leverage Ratio, aftergiving effect to any repayment of Loans with the applicable Net Cash Proceeds,is greater than or equal to 4.00 to 1.00, 50%, and to the extent that theLeverage Ratio, after giving effect to any repayment of Loans with theapplicable Net Cash Proceeds, is less than 4.00 to 1.00, 25%; (c) in thecase of any issuance or other incurrence of Indebtedness, 100%; and (d) inthe case of any Excess Cash Flow, if on the last day of the applicable fiscalyear, to the extent that the Leverage Ratio, after giving effect to anyrepayment of Loans with the applicable Net Cash Proceeds, is (i) greaterthan or equal to 4.00 to 1.00, 75%, (ii) less than 4.00 to 1.00 butgreater than 3.00 to 1.00, 50%, (iii) less than or equal to 3.00 to 1.00 but greater than 2.00 to 1.00, 25% and (iv) lessthan or equal to 2.00 to 1.00, 0%.

 

“Requirementof Law” shall mean as to any person, the governing documents of suchperson, and any law, treaty, rule or regulation or determination of anarbitrator or a court or other Governmental Authority, in each case applicableto or binding upon such person or any of its Real Property or personal propertyor to which such person or any of its property of any nature is subject.

 

“ResponsibleOfficer” of any person shall mean any executive officer or FinancialOfficer of such person and any other officer or similar official thereofresponsible for the administration of the obligations of such person in respectof this Agreement.

 

“RestrictedIndebtedness” shall mean Indebtedness of Holdings, the Borrower or anySubsidiary, the payment, prepayment, repurchase or defeasance of which isrestricted under Section 6.09(b).

 

“RestrictedPayment” shall mean any dividend or other distribution (whether in cash,securities or other property) with respect to any Equity Interests in Holdings,the Borrower or any Subsidiary, or any payment (whether in cash, securities orother property), including any sinking fund or similar deposit, on account ofthe purchase, redemption, defeasance, retirement, acquisition, cancellation ortermination of any Equity Interests in Holdings, the Borrower or any Subsidiaryor any option, warrant or other right to acquire any such Equity Interests inHoldings, the Borrower or any Subsidiary.

 

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“RevolvingCredit Borrowing” shall mean a Borrowing comprised of Revolving Loans.

 

“RevolvingCredit Commitment” shall mean, with respect to each Lender, the commitment,if any, of such Lender to make Revolving Loans (and to acquire participationsin Letters of Credit and Swingline Loans) hereunder as set forth on the LenderAddendum delivered by such Lender or as set forth on Schedule 2.01,or in the Assignment and Acceptance pursuant to which such Lender assumed itsRevolving Credit Commitment, as applicable, as the same may be (a) reducedfrom time to time pursuant to Section 2.09 and (b) reduced orincreased from time to time pursuant to assignments by or to such Lenderpursuant to Section 9.04.

 

“RevolvingCredit Exposure” shall mean, with respect to any Lenders, at any time, theaggregate principal amount at such time of all outstanding Revolving Loans ofsuch Lender, plus the aggregate amount at such time of such Lender’s L/CExposure, plus the aggregate amount at such time of such Lender’s SwinglineExposure.

 

“RevolvingCredit Lender” shall mean a Lender with a Revolving Credit Commitment or anoutstanding Revolving Loan.

 

“RevolvingCredit Maturity Date” shall mean March 15, 2009.

 

“RevolvingLoans” shall mean the revolving loans made by the Lenders to the Borrowerpursuant to clause (b) of Section 2.01.

 

“S&P”shall mean Standard & Poor’s Ratings Group, Inc.

 

“SecuredParties” shall have the meaning assigned to such term in the Guarantee andCollateral Agreement.

 

“SecuritizationTransactions” shall mean, with respect to any person, any transfer by suchperson of accounts receivable or interests therein (a) to a trust,partnership, corporation or other entity that is a Receivables Subsidiary,which transfer is funded in whole or in part, directly or indirectly, by theincurrence or issuance by the transferee or any successor transferee ofIndebtedness or securities that are to receive payments from, or that representinterests in, the cash flow derived from such accounts receivable or interests,or (b) directly to one or more investors or other purchasers. The amountof any Securitization Transaction shall be deemed at any time to be theaggregate principal or stated amount of the Indebtedness or securities referredto in the preceding sentence or, if there shall be no such principal or statedamount, the uncollected amount of the accounts receivable transferred pursuantto such Securitization Transaction net of any accounts receivable that havebeen written off as uncollectible.

 

“SecurityDocuments” shall mean the Guarantee and Collateral Agreement, theMortgages, the Intellectual Property Security Agreements and each of the othersecurity agreements, pledges, mortgages, consents and other instruments anddocuments executed and delivered pursuant to any of the foregoing or pursuantto Section 5.09 or 5.10.

 

“Sellers”shall mean True Temper Sports, LLC, and certain members of management ofHoldings party to the Purchase Agreement.

 

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 “Senior Secured Debt” shall mean, atany time, the principal amount of all the Obligations and all otherIndebtedness included in Total Debt at such time, except the Subordinated Notesand any other unsecured Indebtedness.

 

“SPC”shall have the meaning assigned to such term in Section 9.04(i).

 

“Sponsor”shall mean, collectively, Gilbert Global Equity Partners, L.P., Gilbert GlobalEquity Partners (Bermuda), L.P. and GGEP/SK Equity Partners, LLC.

 

“SponsorRelated Parties” shall mean (a) any (i) controlling stockholder,partner or member, (ii) majority-owned (or more) subsidiary or (iii) spouseor immediate family member (in the case of an individual), in each case, of theSponsor or (b) any trust, corporation, partnership, limited liabilitycompany or other entity, the beneficiaries, stockholders, partners, members,owners or persons beneficially holding (directly or through on or moresubsidiaries) a greater than 50% controlling interest of which consist of theSponsor and/or such persons referred to in the immediately preceding clause(a).

 

“StatutoryReserves” shall mean a fraction (expressed as a decimal), the numerator ofwhich is the number one and the denominator of which is the number one minusthe aggregate of the maximum reserve percentages (including any marginal,special, emergency or supplemental reserves) expressed as a decimal establishedby the Board and any other banking authority, domestic or foreign, to which theAdministrative Agent or any Lender (including any branch, Affiliate or otherfronting office making or holding a Loan) is subject for eurocurrency funding(currently referred to as “Eurocurrency Liabilities” in Regulation D of theBoard). Eurodollar Loans shall be deemed to constitute eurocurrency funding andto be subject to such reserve requirements without benefit of or credit forproration, exemptions or offsets that may be available from time to timeto any Lender under such Regulation D or any comparable regulation. StatutoryReserves shall be adjusted automatically on and as of the effective date of anychange in any reserve percentage.

 

“StockholdersAgreement” shall mean the Stockholders Agreement dated as of the ClosingDate among Holdings and its stockholders party thereto.

 

“SubordinatedNote Documents” shall mean the indenture under which the Subordinated Notesare issued and all other instruments, agreements and other documents evidencingor governing the Subordinated Notes or providing for any Guarantee or otherright in respect thereof.

 

“SubordinatedNotes” shall mean the Borrower’s 8-3/8% Senior Subordinated Notes due 2011,in an aggregate principal amount of $125,000,000, including any notes issued bythe Borrower in full exchange for, and as contemplated by, the Subordinated Noteswith substantially identical terms as the Subordinated Notes.

 

“subsidiary”shall mean, with respect to any person (herein referred to as the “parent”),any corporation, partnership, limited liability company, association or otherentity (a) of which securities or other ownership interests representingmore than 50% of the equity or more than 50% of the ordinary voting power ormore than 50% of the general partnership interests are, at the time anydetermination is being made, owned, controlled or held, or (b) that is, atthe time

 

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any determination is made, otherwise Controlled, by the parent or oneor more subsidiaries of the parent or by the parent and one or moresubsidiaries of the parent.

 

“Subsidiary”shall mean any subsidiary of the Borrower.

 

“SubsidiaryGuarantor” shall mean, initially, each Subsidiary specified on Schedule 1.01(c) and,at any time thereafter, shall include each other Subsidiary that is not anExcluded Foreign Subsidiary or a Receivables Subsidiary.

 

“SwinglineCommitment” shall mean the commitment of the Swingline Lender to make loanspursuant to Section 2.22, as the same may be reduced from timeto time pursuant to Section 2.09.

 

“SwinglineExposure” shall mean, at any time, the aggregate principal amount at suchtime of all outstanding Swingline Loans. The Swingline Exposure of anyRevolving Credit Lender at any time shall equal its Pro Rata Percentage of theaggregate Swingline Exposure at such time.

 

“SwinglineLender” shall mean Credit Suisse (formerly known as Credit Suisse FirstBoston), in its capacity as lender of Swingline Loans hereunder.

 

“SwinglineLoan” shall mean any loan made by the Swingline Lender pursuant to Section 2.22.

 

“SyndicationAgent” shall have the meaning assigned to such term in the preamble.

 

“SyntheticLease Obligations” shall mean all monetary obligations of a person under (a) aso-called synthetic, off-balance sheet or tax retention lease (which is not atrue operating lease) or (b) an agreement for the use or possession of anyproperty (whether real, personal or mixed) creating obligations which do notappear on the balance sheet of such person, but which, upon the insolvency orbankruptcy of such person, would be characterized as Indebtedness of suchperson (without regard to accounting treatment).

 

“SyntheticPurchase Agreement” shall mean any swap, derivative or other agreement orcombination of agreements pursuant to which Holdings, the Borrower or anySubsidiary is or may become obligated to make (a) any payment inconnection with a purchase by any third party from a person other thanHoldings, the Borrower or any Subsidiary of any Equity Interest or RestrictedIndebtedness or (b) any payment (other than on account of a permittedpurchase by it of any Equity Interest or Restricted Indebtedness) the amount ofwhich is determined by reference to the price or value at any time of anyEquity Interest or Restricted Indebtedness; provided that no phantomstock or similar plan providing for payments only to current or formerdirectors, officers or employees of Holdings, the Borrower or the Subsidiaries(or to their heirs or estates) shall be deemed to be a Synthetic PurchaseAgreement.

 

“Tax Code”shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

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“Taxes”shall mean any and all present or future taxes, levies, imposts, duties,deductions, charges, liabilities or withholdings imposed by any GovernmentalAuthority.

 

“TaxSharing Agreement” shall mean the tax sharing agreement dated as of theClosing Date among Holdings, the Borrower and the Subsidiaries party thereto.

 

“TermBorrowing” shall mean a Borrowing comprised of Term Loans.

 

“TermLender” shall mean a Lender with a Term Loan Commitment or an outstandingTerm Loan.

 

“Term LoanCommitment” shall mean, with respect to each Lender, the commitment, ifany, of such Lender to make Term Loans hereunder as set forth on the LenderAddendum delivered by such Lender or as set forth on Schedule 2.01, or inthe Assignment and Acceptance pursuant to which such Lender assumed its TermLoan Commitment, as applicable, as the same may be (a) reduced fromtime to time pursuant to Section 2.09 and (b) reduced or increasedfrom time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.The initial aggregate amount of the Term Loan Commitments is $110,000,000. Theaggregate amount of the Term Loan Commitments following the Amendment EffectiveDate is $128,000,000. Unless the context shall otherwise require, (i) afterthe Amendment Effective Date, the term “Term Loan Commitment” shall include anyAdditional Term Loan Commitment and (ii) after the effectiveness of anyIncremental Term Loan Commitment, the term “Term Loan Commitment” shall includesuch Incremental Term Loan Commitment.

 

“Term LoanMaturity Date” shall mean March 15, 2011.

 

“Term Loans”shall mean the term loans made by the Lenders to the Borrower pursuant to Section 2.01and, if applicable, Section 2.24. Unless the context shallotherwise require, the term “Term Loan” shall include any Additional TermLoans, Incremental Term Loans and any Other Term Loans.

 

“Total Debt”shall mean, as of the last day of any fiscal quarter, the aggregate amount ofIndebtedness of the Borrower and the Subsidiaries outstanding at such time, inthe amount that would be reflected on a balance sheet prepared at such time ona consolidated basis in accordance with GAAP.

 

“TotalRevolving Credit Commitment” shall mean, at any time, the aggregate amountof the Revolving Credit Commitments, as in effect at such time. The TotalRevolving Credit Commitment on the Closing Date is $20,000,000.

 

“Transactions”shall mean, collectively, (a) the execution, delivery and performance bythe Loan Parties of the Loan Documents and the Subordinated Note Documents towhich they are a party, (b) the borrowings hereunder, the issuance of theSubordinated Notes, the issuance of Letters of Credit and the use of proceedsof each of the foregoing, (c) the granting of Liens pursuant to theSecurity Documents, (d) the Acquisition and the other AcquisitionTransactions and (e) any other transactions related to or entered into inconnection with any of the foregoing.

 

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“TTSHoldings” shall mean TTS Holdings LLC, a Delaware limited liability companycontrolled by the Sponsor and its Affiliates, which was merged with and intoHoldings on the Closing Date, with Holdings being the surviving person.

 

“Type”,when used in respect of any Loan or Borrowing, shall refer to the Rate byreference to which interest on such Loan or on the Loans comprising suchBorrowing is determined. For purposes hereof, the term “Rate” shallinclude the Adjusted LIBO Rate and the Alternate Base Rate.

 

“UCC”shall mean the Uniform Commercial Code.

 

“Uniform Customs”shall have the meaning assigned to such term in Section 9.07.

 

“whollyowned subsidiary” of any person shall mean a subsidiary of such person ofwhich securities (except for directors’ qualifying shares) or other ownershipinterests representing 100% of the Equity Interests are, at the time anydetermination is being made, owned, controlled or held by such person or one ormore wholly owned subsidiaries of such person or by such person and one or morewholly owned subsidiaries of such person; a “wholly owned Subsidiary”shall mean any wholly owned subsidiary of the Borrower.

 

“WithdrawalLiability” shall mean liability to a Multiemployer Plan as a result of acomplete or partial withdrawal from such Multiemployer Plan, as such terms aredefined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02.Terms Generally. The definitions in Section 1.01 shall applyequally to both the singular and plural forms of the terms defined. Wheneverthe context may require, any pronoun shall include the correspondingmasculine, feminine and neuter forms. The words “include”, “includes” and “including”,and words of similar import, shall not be limiting and shall be deemed to befollowed by the phrase “without limitation”. The word “will” shall be construedto have the same meaning and effect as the word “shall”. The words “herein”, “hereof”and “hereunder”, and words of similar import, shall be construed to refer tothis Agreement in its entirety and not to any particular provision of thisAgreement unless the context shall otherwise require. All references herein toArticles, Sections, Exhibits and Schedules shall be deemed references toArticles and Sections of, and Exhibits and Schedules to, this Agreement unlessthe context shall otherwise require. Except as otherwise expressly providedherein, (a) any definition of, or reference to, any Loan Document,including this Agreement, or any other agreement, instrument or document inthis Agreement shall mean such Loan Document or other agreement, instrument ordocument as amended, restated, supplemented or otherwise modified from time totime (subject to any restrictions on such amendments, restatements, supplementsor modifications set forth herein) and (b) all terms of an accounting orfinancial nature shall be construed in accordance with GAAP, as in effect fromtime to time; provided, however, that if the Borrower notifiesthe Administrative Agent that the Borrower wishes to amend any covenant in Article VIor any related definition to eliminate the effect of any change in GAAPoccurring after the date of this Agreement on the operation of such covenant(or if the Administrative Agent notifies the Borrower that the Required Lenderswish to amend Article VI or any related definition for suchpurpose), then the Administrative Agent, the Lenders and the Borrower shallnegotiate in good faith to amend (subject to the approval of the RequiredLenders) such covenant

 

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to preserve theoriginal intent thereof in light of such change; provided that until soamended the Borrower’s compliance with such covenant shall be determined on thebasis of GAAP in effect immediately before the relevant change in GAAP became effective,until either such notice is withdrawn or such covenant is amended in a mannersatisfactory to the Borrower and the Required Lenders.

 

SECTION 1.03.Classification of Loans and Borrowings. For purposes of this Agreement,Loans may be classified and referred to by Class (*e.g.*, a “Revolving Loan”) or by Type (*e.g.*, a “Eurocurrency Loan”) or by Class andType (*e.g.*, a “EurocurrencyRevolving Loan”). Borrowings also may be classified and referred to by Class (*e.g.*, a “Revolving Borrowing”) or by Type (*e.g.*, a “Eurocurrency Borrowing”) or by Class andType (*e.g.*, a “EurocurrencyRevolving Borrowing”).

 

SECTION 1.04.Pro Forma Calculations. All proforma calculationspermitted or required to be made by the Borrower or any Subsidiary pursuant tothis Agreement shall include only those adjustments that would be permitted orrequired by Regulation S-X under the Securities Act of 1933, as amended,together with those adjustments that (a) have been certified by aFinancial Officer of the Borrower as having been prepared in good faith basedupon reasonable assumptions and (b) are based on reasonably detailedwritten assumptions reasonably acceptable to the Administrative Agent.

 

ARTICLE II

 

The Credits 

 

SECTION 2.01.Commitments. Subject to the terms and conditions hereof and relying uponthe representations and warranties set forth herein, (a) each Term Lenderhaving a Term Loan Commitment on the Closing Date has made a Term Loan to theBorrower on the Closing Date in a principal amount not exceeding its Term LoanCommitment on such date, (b) each Term Lender having a Term LoanCommitment on the Amendment Effective Date agrees, severally and not jointly,to make a Term Loan to the Borrower on a single date specified by the Borrowerthat is prior to the Additional Term Loan Commitment Termination Date in aprincipal amount not to exceed its Term Loan Commitment, (c) eachIncremental Term Lender which shall provide an Incremental Term Loan Commitmentpursuant to Section 2.24 agrees, severally and not jointly, to make anIncremental Term Loan to the Borrower in a principal amount not to exceed itsIncremental Term Loan Commitment and (d) each Revolving Credit Lenderagrees, severally and not jointly, to make Revolving Loans to the Borrower, atany time and from time to time on or after the Closing Date and until theearlier of the Revolving Credit Maturity Date and the termination of theRevolving Credit Commitment of such Revolving Credit Lender in accordance withthe terms hereof, in an aggregate principal amount at any time outstanding thatwill not result in such Revolving Credit Lender’s Revolving Credit Exposureexceeding such Revolving Credit Lender’s Revolving Credit Commitment. Withinthe limits set forth in clause (d) of the preceding sentenceand subject to the terms, conditions and limitations set forth herein, theBorrower may borrow, pay or prepay and reborrow Revolving Loans. Amountspaid or prepaid in respect of Term Loans may not be reborrowed.

 

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SECTION 2.02.Loans. (a)  Each Loan (other thanSwingline Loans) shall be made as part of a Borrowing consisting of Loansof the same Class and Type made by the Lenders ratably in accordance withtheir respective Commitments of the applicable Class; provided, however,that the failure of any Lender to make any Loan required to be made by it shallnot in itself relieve any other Lender of its obligation to lend hereunder (itbeing understood, however, that no Lender shall be responsible for the failureof any other Lender to make any Loan required to be made by such other Lender).Except for Loans deemed made pursuant to Section 2.02(f) andsubject to Section 2.22 relating to Swingline Loans, the Loanscomprising any Borrowing shall be in an aggregate principal amount that is (i) anintegral multiple of $500,000 and not less than $2,000,000 or (ii) equalto the remaining available balance of the applicable Commitments.

 

(b)                                 Subjectto Sections 2.08 and 2.15, each Borrowing shall be comprisedentirely of ABR Loans or Eurodollar Loans as the Borrower may requestpursuant to Section 2.03. Each Lender may at its option makeany Eurodollar Loan by causing any domestic or foreign branch or Affiliate ofsuch Lender to make such Loan; provided that any exercise of such optionshall not affect the obligation of the Borrower to repay such Loan inaccordance with the terms of this Agreement. Borrowings of more than one Type may beoutstanding at the same time; provided, however, that theBorrower shall not be entitled to request any Borrowing that, if made, wouldresult in more than ten Eurodollar Borrowings outstanding hereunder at any time.For purposes of the foregoing, Borrowings having different Interest Periods,regardless of whether they commence on the same date, shall be consideredseparate Borrowings.

 

(c)                                  Exceptwith respect to Loans made pursuant to Section 2.02(f) andsubject to Section 2.22 relating to Swingline Loans, each Lendershall make each Loan to be made by it hereunder on the proposed date thereof bywire transfer of immediately available funds to such account in New York Cityas the Administrative Agent may designate not later than 11:00 a.m.,New York City time, and the Administrative Agent shall promptly credit theamounts so received to an account designated by the Borrower in the applicableBorrowing Request or, if a Borrowing shall not occur on such date because anycondition precedent herein specified shall not have been met, return theamounts so received to the respective Lenders.

 

(d)                                 Unlessthe Administrative Agent shall have received notice from a Lender prior to thedate of any Borrowing that such Lender will not make available to theAdministrative Agent such Lender’s portion of such Borrowing, theAdministrative Agent may assume that such Lender has made such portionavailable to the Administrative Agent on the date of such Borrowing inaccordance with paragraph (c) of this Section and theAdministrative Agent may, in reliance upon such assumption, make available tothe Borrower on such date a corresponding amount. If the Administrative Agentshall have so made funds available then, to the extent that such Lender shallnot have made such portion available to the Administrative Agent, such Lenderand the Borrower severally agree to repay to the Administrative Agent forthwithon demand such corresponding amount together with interest thereon, for eachday from the date such amount is made available to the Borrower to butexcluding the date such amount is repaid to the Administrative Agent at (i) inthe case of the Borrower, the interest rate applicable at the time to the Loanscomprising such Borrowing or (ii) in the case of such Lender, a ratedetermined by the Administrative Agent to represent its cost of overnight orshort-term funds (which determination shall be conclusive absent manifesterror). If such Lender shall repay to

 

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the AdministrativeAgent such corresponding amount, such amount shall constitute such Lender’sLoan as part of such Borrowing for purposes of this Agreement.

 

(e)                                  Notwithstandingany other provision of this Agreement, the Borrower shall not be entitled torequest any Revolving Credit Borrowing if the Interest Period requested withrespect thereto would end after the Revolving Credit Maturity Date.

 

(f)                                    Ifthe Issuing Bank shall not have received from the Borrower the payment requiredto be made by Section 2.23(e) with respect to a Letter ofCredit within the time specified in such Section, the Issuing Bank will promptlynotify the Administrative Agent of the L/C Disbursement and the AdministrativeAgent will promptly notify each Revolving Credit Lender of such L/CDisbursement and its Pro Rata Percentage thereof. Each Revolving Credit Lendershall pay by wire transfer of immediately available funds to the AdministrativeAgent not later than 2:00 p.m., New York City time, on such date (or, ifsuch Revolving Credit Lender shall have received such notice later than 12:00(noon), New York City time, on any day, not later than 10:00 a.m., NewYork City time, on the immediately following Business Day), an amount equal tosuch Lender’s Pro Rata Percentage of such L/C Disbursement (it being understoodthat such amount shall be deemed to constitute an ABR Revolving Loan of such Lenderand such payment shall be deemed to have reduced the L/C Exposure), and theAdministrative Agent will promptly pay to the Issuing Bank amounts so receivedby it from the Revolving Credit Lenders. The Administrative Agent will promptlypay to the Issuing Bank any amounts received by it from the Borrower pursuantto Section 2.23(e) prior to the time that any Revolving CreditLender makes any payment pursuant to this paragraph; any such amounts receivedby the Administrative Agent thereafter will be promptly remitted by theAdministrative Agent to the Revolving Credit Lenders that shall have made suchpayments and to the Issuing Bank, as their interests may appear. If any Revolving Credit Lender shall not have madeits Pro Rata Percentage of such L/C Disbursement available to theAdministrative Agent as provided above, such Lender and the Borrower severallyagree to pay interest on such amount, for each day from and including the datesuch amount is required to be paid in accordance with this paragraph to butexcluding the date such amount is paid, to the Administrative Agent for theaccount of the Issuing Bank at (i) in the caseof the Borrower, a rate per annum equal to the interest rate applicable toRevolving Loans pursuant to Section 2.06(a), and (ii) in thecase of such Lender, for the first such day, the Federal Funds Effective Rate,and for each day thereafter, the Alternate Base Rate.

 

SECTION 2.03.Borrowing Procedure. In order to request a Borrowing (other than aSwingline Loan or a deemed Borrowing pursuant to Section 2.02(f),as to which this Section 2.03 shall not apply), the Borrower shallnotify the Administrative Agent by telephone (promptly confirmed by fax) orshall hand deliver or fax to the Administrative Agent a duly completedBorrowing Request (a) in the case of a Eurodollar Borrowing, not laterthan 12:00 p.m. (noon), New York City time, three Business Days before aproposed Borrowing and (b) in the case of an ABR Borrowing, not later than12:00 p.m. (noon), New York City time, one Business Day before a proposedBorrowing. Each Borrowing Request shall be irrevocable, shall be signed by oron behalf of the Borrower and shall specify the following information:  (i) whetherthe Borrowing then being requested is to be a Term Borrowing or a RevolvingCredit Borrowing, and whether such Borrowing is to be a Eurodollar Borrowing oran ABR Borrowing; (ii) the date of suchBorrowing (which shall be a Business Day); (iii) the number and locationof the account to which funds are to be disbursed (which shall be an accountthat complies with the

 

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requirements of Section 2.02(c));(iv) the amount of such Borrowing; and (v) if such Borrowing is to bea Eurodollar Borrowing, the initial Interest Period with respect thereto; provided,however, that, notwithstanding any contrary specification in anyBorrowing Request, each requested Borrowing shall comply with the requirementsset forth in Section 2.02. If no election as to the Type ofBorrowing is specified in any such notice, then the requested Borrowing shallbe an ABR Borrowing. If no Interest Period with respect to any EurodollarBorrowing is specified in any such notice, then the Borrower shall be deemed tohave selected an Interest Period of one month’s duration. The AdministrativeAgent shall promptly advise the applicable Lenders of any notice given inaccordance with this Section 2.03 (and the contents thereof), andof each Lender’s portion of the requested Borrowing.

 

SECTION 2.04.Repayment of Loans; Evidence of Debt. (a)  The Borrower herebyunconditionally promises to pay to the Administrative Agent for the account ofeach Lender (i) the principal amount of eachTerm Loan of such Lender made to the Borrower as provided in Section 2.11and (ii) the then unpaid principal amount of each Revolving Loan of suchLender made to the Borrower on the Revolving Credit Maturity Date. The Borrowerhereby unconditionally promises to pay to the Swingline Lender the then unpaidprincipal amount of each Swingline Loan made to the Borrower on the RevolvingCredit Maturity Date.

 

(b)                                 EachLender shall maintain in accordance with its usual practice an account oraccounts evidencing the indebtedness of the Borrower to such Lender resultingfrom each Loan made by such Lender to the Borrower from time to time, includingthe amounts of principal and interest payable and paid to such Lender from timeto time under this Agreement.

 

(c)                                  TheAdministrative Agent shall maintain accounts in which it will record (i) theamount of each Loan made hereunder, the Type thereof and the Interest Periodapplicable thereto, (ii) the amount of any principal or interest due andpayable or to become due and payable from the Borrower to each Lender hereunderand (iii) the amount of the sum received by the Administrative Agenthereunder from the Borrower or any Guarantor and each Lender’s share thereof.

 

(d)                                 Theentries made in the accounts maintained pursuant to paragraphs (b) and(c) of this Section shall be primafacie evidence ofthe existence and amounts of the obligations therein recorded; provided,however, that the failure of any Lender or the Administrative Agent tomaintain such accounts or any error therein shall not in any manner affect theobligations of the Borrower to repay the Loans made to the Borrower inaccordance with the terms of this Agreement.

 

(e)                                  AnyLender may request that Loans made by it hereunder be evidenced by apromissory note. In such event, the Borrower shall execute and deliver to suchLender a promissory note payable to such Lender and, if requested by suchLender, its registered assigns, in the form of Exhibit I, ifsuch promissory note relates to Revolving Credit Borrowings, or in the form ofExhibit J, if such promissory note relates to Term Borrowings, orany other form reasonably acceptable to the Administrative Agent. Notwithstandingany other provision of this Agreement, in the event any Lender shall requestand receive such a promissory note, the interests represented by such noteshall at all times (including after any assignment of all or part

 

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of such interestspursuant to Section 9.04) be represented by one or more promissorynotes payable to the payee named therein or its registered assigns.

 

SECTION 2.05.Fees. (a)  The Borrower agrees to pay toeach Lender, through the Administrative Agent, on the last Business Day ofMarch, June, September and December in each year and on each date onwhich any Commitment of such Lender shall expire or be terminated as providedherein, a commitment fee (a “Commitment Fee”) equal to the CommitmentFee Rate on the average daily unused amount of the Commitments of such Lender(other than the Swingline Commitment) during the preceding quarter (or otherperiod commencing with the Closing Date or ending with the Revolving CreditMaturity Date or the date on which the Commitments of such Lender shall expireor be terminated). All Commitment Fees shall be computed on the basis of theactual number of days elapsed in a year of 360 days. The Commitment Fee due toeach Lender shall commence to accrue on the Closing Date and shall cease toaccrue on the date on which the Commitment of such Lender shall expire or beterminated as provided herein. For purposes of calculating Commitment Fees withrespect to Revolving Credit Commitments only, no portion of the RevolvingCredit Commitments shall be deemed utilized under Section 2.22 as aresult of outstanding Swingline Loans.

 

(b)                                 TheBorrower agrees to pay to the Administrative Agent, for its own account, thefees in the amounts and at the times from time to time agreed to in writing bythe Borrower (or any Affiliate) and the Administrative Agent, includingpursuant to the applicable Fee Letter (the “Administrative Agent Fees”).

 

(c)                                  TheBorrower agrees to pay (i) to each Revolving Credit Lender, through theAdministrative Agent, on the last Business Day of March, June, September andDecember of each year and on the date on which the Revolving CreditCommitment of such Lender shall be terminated as provided herein (each, an “L/CFee Payment Date”) a fee (an “L/C Participation Fee”) calculated onsuch Lender’s Pro Rata Percentage of the daily aggregate L/C Exposure(excluding the portion thereof attributable to unreimbursed L/C Disbursementswhich are earning interim interest pursuant to Section 2.23(h))during the preceding quarter (or shorter period commencing with the ClosingDate or ending with the Revolving Credit Maturity Date or the date on which allLetters of Credit have been canceled or have expired and the Revolving CreditCommitments of all Lenders shall have been terminated) at a rate per annumequal to the Applicable Margin used to determine the interest rate on RevolvingCredit Borrowings comprised of Eurodollar Loans pursuant to Section 2.06,and (ii) to the Issuing Bank with respect to each outstanding Letter ofCredit issued for the account of (or at the request of) the Borrower a frontingfee, which shall accrue at the rate of 1⁄4 of 1% per annum or such other rate asshall be separately agreed upon between the Borrower and the Issuing Bank, onthe drawable amount of such Letter of Credit, payable quarterly in arrears oneach L/C Fee Payment Date after the issuance date of such Letter of Credit, aswell as the Issuing Bank’s standard fees with respect to the issuance,amendment, renewal or extension of any Letter of Credit issued for the accountof (or at the request of) the Borrower or processing of drawings thereunder(the fees in this clause (ii), collectively, the “Issuing BankFees”). All L/C Participation Fees and Issuing Bank Fees shall be computedon the basis of the actual number of days elapsed in a year of 360 days.

 

(d)                                 TheBorrower agrees to pay to the Administrative Agent for the account of theapplicable Term Lenders, a fee in an amount equal to 0.50% per annum on theaggregate amount

 

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of the AdditionalTerm Loan Commitments (payable to such applicable Term Lenders on a proratabasis with respect to their Additional Term Loan Commitments), accruing for theperiod from the Fee Trigger Date through and including the Additional Term LoanCommitment Termination Date if (i) the borrowing of the Additional TermLoans does not occur within 60 days following the Amendment Effective Date or (ii) theBorrower terminates the Additional Term Loans Commitments on or following theFee Trigger Date.

 

(e)                                  AllFees shall be paid on the dates due, in immediately available funds, to theAdministrative Agent for distribution, if and as appropriate, among theLenders, except that the Issuing Bank Fees shall be paid directly to theIssuing Bank. Once paid, none of the Fees shall be refundable under anycircumstances.

 

SECTION 2.06.Interest on Loans. (a)  Subject to the provisions of Section 2.07,the Loans comprising each ABR Borrowing, including each Swingline Loan, shallbear interest (computed on the basis of the actual number of days elapsed overa year of 365 or 366 days, as the case may be, when the Alternate BaseRate is determined by reference to the Prime Rate and over a year of 360 daysat all other times, in each case calculated from and including the date of suchABR Borrowing to but excluding the date of repayment) at a rate per annum equalto the Alternate Base Rate plus the Applicable Margin in effect from time totime.

 

(b)                                 Subjectto the provisions of Section 2.07, the Loans comprising eachEurodollar Borrowing shall bear interest (computed on the basis of the actualnumber of days elapsed over a year of 360 days) at a rate per annum equal tothe Adjusted LIBO Rate for the Interest Period in effect for such Borrowingplus the Applicable Margin in effect from time to time.

 

(c)                                  Intereston each Loan shall be payable on the Interest Payment Dates applicable to suchLoan except as otherwise provided in this Agreement. The applicable AlternateBase Rate or Adjusted LIBO Rate for each Interest Period or day within anInterest Period, as the case may be, shall be determined by theAdministrative Agent, and such determination shall be conclusive absentmanifest error.

 

SECTION 2.07.Default Interest. If the Borrower shall default in the payment of theprincipal of or interest on any Loan or any other amount becoming due hereunderor under any other Loan Document, by acceleration or otherwise, the Borrowershall on demand from time to time pay interest, to the extent permitted by law,on such defaulted amount to but excluding the date of actual payment (after aswell as before judgment) (a) in the case of overdue principal, at the rateotherwise applicable to such Loan pursuant to Section 2.06 plus2.00% per annum and (b) in all other cases, at a rate per annum (computedon the basis of the actual number of days elapsed over a year of 365 or 366days, as the case may be, when determined by reference to the Prime Rateand over a year of 360 days at all other times) equal to the rate that would beapplicable to an ABR Revolving Loan plus 2.00%.

 

SECTION 2.08.Alternate Rate of Interest. In the event, and on each occasion, thatprior to the commencement of any Interest Period for a Eurodollar Borrowing (a) theAdministrative Agent shall have determined that adequate and reasonable meansdo not exist for determining the Adjusted LIBO Rate for such Interest Period or(b) the Administrative Agent is advised by the Majority Facility Lendersin respect of the relevant Facility that the Adjusted LIBO Rate for such

 

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Interest Periodwill not adequately and fairly reflect the cost to such Lenders of making ormaintaining their Loans included in such Borrowing for such Interest Period,the Administrative Agent shall, as soon as practicable thereafter, give writtenor fax notice of such determination to the Borrower and the Lenders. In theevent of any such determination, until the Administrative Agent shall haveadvised the Borrower and the Lenders that the circumstances giving rise to suchnotice no longer exist, (i) any request by the Borrower for a EurodollarBorrowing pursuant to Section 2.03 or 2.10 shall be deemedto be a request for an ABR Borrowing and (ii) any Interest Period electionthat requests the conversion of any Borrowing to, or continuation of anyBorrowing as, a Eurodollar Borrowing shall be ineffective. Each determinationby the Administrative Agent under this Section 2.08 shall beconclusive absent manifest error.

 

SECTION 2.09.Termination and Reduction of Commitments. (a)  Unless previouslyterminated in accordance with the terms hereof, (i) the Term LoanCommitments made under the Existing Credit Agreement automatically terminatedat 5:00 p.m., New York City time, on the Closing Date, (ii) theRevolving Credit Commitments, the Swingline Commitment and the L/C Commitmentshall automatically terminate on the Revolving Credit Maturity Date and (iii) theAdditional Term Loan Commitments made under this Agreement shall automaticallyterminate on the earlier of (such date, the “Additional Term Loan CommitmentTermination Date”) (A) 5:00 p.m., New York City time, on the datethat the Borrower delivers written notice to the Administrative Agent notifyingthe Administrative Agent that the Borrower will not borrow the Additional TermLoans, (B) the Borrowing thereunder on the Funding Date and (C) 5:00 p.m.,New York City time, on the date that is 150 days after the Amendment EffectiveDate if a Borrowing of Additional Term Loans shall not have occurred by suchtime.

 

(b)                                 Uponat least three Business Days’ prior irrevocable written or fax notice to theAdministrative Agent, the Borrower may at any time in whole permanentlyterminate, or from time to time in part permanently reduce, the AdditionalTerm Loan Commitments, the Incremental Term Loan Commitments, the RevolvingCredit Commitments or the Swingline Commitment; provided, however,that (i) each partial reduction of the Additional Term Loan Commitments,the Incremental Term Loan Commitments, the Revolving Credit Commitments or theSwingline Commitment shall be in an integral multiple of $500,000 and in aminimum amount of $2,000,000 and (ii) the Total Revolving CreditCommitment shall not be reduced to an amount that is less than the AggregateRevolving Credit Exposure then in effect.

 

(c)                                  Eachreduction in the Additional Term Loan Commitments, the Incremental Term LoanCommitments, the Revolving Credit Commitments or Swingline Commitment hereundershall be made ratably among the applicable Lenders in accordance with their ProRata Percentages. The Borrower shall pay to the Administrative Agent for theaccount of the applicable Lenders, on the date of each termination orreduction, the Commitment Fees on the amount of the Commitments so terminatedor reduced accrued to but excluding the date of such termination or reduction.

 

SECTION 2.10.Conversion and Continuation of Borrowings. The Borrower shall have theright at any time upon prior irrevocable notice to the Administrative Agent (a) notlater than 12:00 p.m. (noon), New York City time, one Business Day priorto conversion, to convert any Eurodollar Borrowing of the Borrower into an ABRBorrowing, (b) not later than 12:00 p.m. (noon), New York City time,three Business Days prior to conversion or continuation, to convert

 

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any ABR Borrowingof the Borrower into a Eurodollar Borrowing or to continue any EurodollarBorrowing of the Borrower as a Eurodollar Borrowing for an additional InterestPeriod and (c) not later than 12:00 p.m.(noon), New York City time, three Business Days prior to conversion, to convertthe Interest Period with respect to any Eurodollar Borrowing of the Borrower toanother permissible Interest Period, subject in each case to the following:

 

(i)                                     eachconversion or continuation shall be made prorata among theLenders in accordance with the respective principal amounts of the Loanscomprising the converted or continued Borrowing;

 

(ii)                                  ifless than all the outstanding principal amount of any Borrowing shall beconverted or continued, then each resulting Borrowing shall satisfy thelimitations specified in Sections 2.02(a) and 2.02(b) regardingthe principal amount and maximum number of Borrowings of the relevant Type;

 

(iii)                               eachconversion shall be effected by each Lender and the Administrative Agent byrecording for the account of such Lender the new Loan of such Lender resultingfrom such conversion and reducing the Loan (or portion thereof) of such Lenderbeing converted by an equivalent principal amount; accrued interest on anyEurodollar Loan (or portion thereof) being converted shall be paid by theBorrower at the time of conversion;

 

(iv)                              ifany Eurodollar Borrowing is converted at a time other than the end of theInterest Period applicable thereto, the Borrower shall pay, upon demand, anyamounts due to the Lenders pursuant to Section 2.16;

 

(v)                                 anyportion of a Borrowing maturing or required to be repaid in less than one monthmay not be converted into or continued as a Eurodollar Borrowing;

 

(vi)                              anyportion of a Eurodollar Borrowing that cannot be converted into or continued asa Eurodollar Borrowing by reason of the immediately preceding clause shall beautomatically converted at the end of the Interest Period in effect for suchBorrowing into an ABR Borrowing;

 

(vii)                           noInterest Period may be selected for any Eurodollar Term Borrowing thatwould end later than a Repayment Date occurring on or after the first day ofsuch Interest Period if, after giving effect to such selection, the aggregateoutstanding amount of (A) the Eurodollar Term Borrowings with InterestPeriods ending on or prior to such Repayment Date and (B) the ABR TermBorrowings would not be at least equal to the principal amount of TermBorrowings to be paid on such Repayment Date; and

 

(viii)                        uponnotice to the Borrower from the Administrative Agent given at the request ofthe Required Lenders, after the occurrence and during the continuance of aDefault or Event of Default, no outstanding Loan may be converted into, orcontinued as, a Eurodollar Loan.

 

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Each noticepursuant to this Section 2.10 shall be irrevocable and shall referto this Agreement and specify (i) the identity and amount of the Borrowingthat the Borrower requests be converted or continued, (ii) whether suchBorrowing is to be converted to or continued as a Eurodollar Borrowing or anABR Borrowing, (iii) if such notice requests a conversion, the date ofsuch conversion (which shall be a Business Day) and (iv) if such Borrowingis to be converted to or continued as a Eurodollar Borrowing, the InterestPeriod with respect thereto. If no Interest Period is specified in any suchnotice with respect to any conversion to or continuation as a EurodollarBorrowing, the Borrower shall be deemed to have selected an Interest Period ofone month’s duration. The Administrative Agent shall advise the Lenders of anynotice given pursuant to this Section 2.10 and of each Lender’sportion of any converted or continued Borrowing. If the Borrower shall not havegiven notice in accordance with this Section 2.10 to continue anyBorrowing into a subsequent Interest Period (and shall not otherwise have givennotice in accordance with this Section 2.10 to convert suchBorrowing), such Borrowing shall, at the end of the Interest Period applicablethereto (unless repaid pursuant to the terms hereof), automatically beconverted or continued into an ABR Borrowing.

 

SECTION 2.11.Repayment of Term Borrowings.

 

(a)                                  (i) On the dates set forth below, or if any such date is not a Business Day, on thenext preceding Business Day (each such date being called a “Repayment Date”),the Borrower shall pay to the Administrative Agent, for the account of the TermLenders, a principal amount of the Term Loans (as adjusted from time to timepursuant to Sections 2.12, 2.13(f) and 2.24(d)) equal to theamount set forth below for such date, together in each case with accrued andunpaid interest and Fees on the amount to be paid to but excluding the date ofsuch payment:

 
| **Repayment Date**      | ** ** | **Amount** | ** ** |
|-------------------------|------------|------------|------------|
| March 31, 2006     |       | $          | 320,000    |   |
| June 30, 2006      |       | $          | 320,000    |   |
| September 30, 2006 |       | $          | 320,000    |   |
| December 31, 2006  |       | $          | 320,000    |   |
| March 31, 2007     |       | $          | 320,000    |   |
| June 30, 2007      |       | $          | 320,000    |   |
| September 30, 2007 |       | $          | 320,000    |   |
| December 31, 2007  |       | $          | 320,000    |   |
| March 31, 2008     |       | $          | 320,000    |   |
| June 30, 2008      |       | $          | 320,000    |   |
| September 30, 2008 |       | $          | 320,000    |   |
| December 31, 2008  |       | $          | 320,000    |   |
| March 31, 2009     |       | $          | 320,000    |   |
| June 30, 2009      |       | $          | 320,000    |   |
| September 30, 2009 |       | $          | 320,000    |   |
| December 31, 2009  |       | $          | 320,000    |   |
| March 31, 2010     |       | $          | 320,000    |   |
| June 30, 2010      |       | $          | 30,640,000 |   |
| September 30, 2010 |       | $          | 30,640,000 |   |
| December 31, 2010  |       | $          | 30,640,000 |   |
| Term Loan Maturity Date |       | Remainder  |       |

 

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(ii)  The Borrower shallpay to the Administrative Agent, for the account of the applicable Lenders, oneach Incremental Term Loan Repayment Date, a principal amount of Other TermLoans (as adjusted from time to time pursuant to Sections 2.12 and 2.13(f))equal to the amount set forth for such date in the applicable Incremental TermLoan Assumption Agreement, together in each case with accrued and unpaid interestand Fees on the amount to be paid to but excluding the date of such payment.

 

(b)                                 Tothe extent not previously paid, all Term Loans and (if applicable) Other TermLoans shall be due and payable on the Term Loan Maturity Date or the applicableIncremental Term Loan Maturity Date, as the case may be, together withaccrued and unpaid interest on the principal amount to be paid to but excludingthe date of payment.

 

(c)                                  Allrepayments pursuant to this Section 2.11 shall be subject to Section 2.16,but shall otherwise be without premium or penalty.

 

SECTION 2.12.Prepayment. (a)  The Borrower shall have the right at any time andfrom time to time to prepay any Borrowing, in whole or in part, upon at leastthree Business Days’ prior written or fax notice (or telephone notice promptlyconfirmed by written or fax notice) in the case of Eurodollar Loans, or writtenor fax notice (or telephone notice promptly confirmed by written or fax notice)at least one Business Day prior to the date of prepayment in the case of ABRLoans, to the Administrative Agent before 12:00 p.m. (noon), New York Citytime; provided, however, that each partial prepayment shall be inan amount that is an integral multiple of $500,000 and not less than $500,000.

 

(b)                                 Optionalprepayments of Term Loans shall be applied, first, prorata tothe scheduled installments of principal due in respect of the Term Loans inaccordance with Section 2.11 within twelve months of suchprepayment and, second, prorata against the remaining scheduledinstallments of principal due in respect of the Term Loans.

 

(c)                                  Eachnotice of prepayment shall specify the prepayment date and the principal amountof each Borrowing (or portion thereof) to be prepaid, shall be irrevocable andshall commit the Borrower to prepay such Borrowing by the amount stated thereinon the date stated therein. All prepayments under this Section 2.12shall be subject to Section 2.16, but otherwise without premium orpenalty. All prepayments under this Section 2.12 shall beaccompanied by accrued and unpaid interest on the principal amount to beprepaid to but excluding the date of payment.

 

SECTION 2.13.Mandatory Prepayments. (a)  In the event of any termination of allthe Revolving Credit Commitments, the Borrower shall, on the date of suchtermination, repay or prepay all its outstanding Revolving Credit Borrowingsand all its outstanding Swingline Loans and replace all its outstanding Lettersof Credit and/or deposit an amount equal to the L/C Exposure in cash in a cashcollateral account established with the Collateral Agent for the benefit of theSecured Parties, unless, in each case, if such termination arises as a resultof the actions by the Administrative Agent described in clause (i) ofthe last paragraph of Article VII, the Majority Facility Lenderswith respect to the Revolving Credit Facility shall otherwise agree. If as aresult

 

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of any partialreduction of the Revolving Credit Commitments the Aggregate Revolving CreditExposure would exceed the Total Revolving Credit Commitment after giving effectthereto, then the Borrower shall, on the date of such reduction, repay orprepay Revolving Credit Borrowings or Swingline Loans (or a combinationthereof) and/or cash collateralize Letters of Credit in an amount sufficient toeliminate such excess.

 

(b)                                 Unlessthe Majority Facility Lenders with respect to the Term Loan Facility shallotherwise agree, not later than the third Business Day following the completionof any Asset Sale or the occurrence of any Recovery Event (subject in each caseto all applicable reinvestment and repayment rights to the extent set forth inthe definition of “Net Cash Proceeds”), the Borrower shall apply theRequired Prepayment Percentage of the Net Cash Proceeds received with respectthereto to prepay outstanding Term Loans in accordance with Section 2.13(f).

 

(c)                                  Unlessthe Majority Facility Lenders with respect to the Term Loan Facility shallotherwise agree, in the event and on each occasion that an Equity Issuanceoccurs, the Borrower shall, substantially simultaneously with (and in any eventnot later than the third Business Day next following) the occurrence of suchEquity Issuance, apply the Required Prepayment Percentage of the Net CashProceeds therefrom to prepay outstanding Term Loans in accordance with Section 2.13(f).

 

(d)                                 Unlessthe Majority Facility Lenders with respect to the Term Loan Facility shallotherwise agree, in the event that any Loan Party or any subsidiary of a LoanParty shall receive Net Cash Proceeds from the issuance or other incurrence ofIndebtedness of any Loan Party or any subsidiary of a Loan Party (other thanIndebtedness permitted pursuant to Section 6.01 (other thanpursuant to clause (A) of the proviso in Section 6.01(h) orSection 6.01(k))), the Borrower shall, substantially simultaneouslywith (and in any event not later than the third Business Day next following)the receipt of such Net Cash Proceeds by such Loan Party or such subsidiary,apply an amount equal to the Required Prepayment Percentage of such Net CashProceeds to prepay outstanding Term Loans in accordance with Section 2.13(f).

 

(e)                                  Unlessthe Majority Facility Lenders with respect to the Term Loan Facility shallotherwise agree, no later than (i) in the case of the fiscal year of theBorrower ending on December 31, 2005, on June 30, 2006 and (ii) inthe case of each subsequent fiscal year of the Borrower, the earlier of (x) 90days after the end of such fiscal year and (y) the date on which the financialstatements with respect to such period are delivered pursuant to Section 5.04(a),the Borrower shall prepay outstanding Term Loans in accordance with Section 2.13(f),in an aggregate principal amount equal to the Required Prepayment Percentage ofExcess Cash Flow for the fiscal year then ended.

 

(f)                                    Mandatoryprepayments of outstanding Term Loans under this Agreement shall be applied prorata against the applicable remaining scheduled installments due inrespect of the Term Loans under Section 2.11.

 

(g)                                 TheBorrower shall deliver to the Administrative Agent, at the time of eachprepayment required under this Section 2.13, (i) a certificatesigned by a Financial Officer of the Borrower setting forth in reasonabledetail the calculation of the amount and date of such prepayment and (ii) tothe extent practicable, at least three days prior written notice of such

 

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prepayment. Eachnotice of prepayment shall specify the prepayment date, the Type of each Loanbeing prepaid and the principal amount of each Loan (or portion thereof) to beprepaid. All prepayments of Borrowings pursuant to this Section 2.13shall be subject to Section 2.16, but shall otherwise be withoutpremium or penalty.

 

SECTION 2.14.Reserve Requirements; Change in Circumstances. (a)  Notwithstandingany other provision of this Agreement, if any Change in Law shall:

 

(i)                                     impose,modify or deem applicable any reserve, special deposit or similar requirementagainst assets of, deposits with or for the account of, or credit extended by,any Lender, the Administrative Agent or the Issuing Bank (except any suchreserve requirement which is reflected in the Adjusted LIBO Rate) or

 

(ii)                                  imposeon any Lender, the Administrative Agent or the Issuing Bank or the Londoninterbank market any other condition affecting this Agreement or EurodollarLoans made by such Lender or any Letter of Credit or participation therein,

 

and the resultof any of the foregoing shall be to increase the cost to such Lender or the IssuingBank of making or maintaining any Eurodollar Loan (or of maintaining itsobligation to make any such Loan) or to increase the cost to any Lender, theAdministrative Agent or the Issuing Bank of issuing or maintaining any Letterof Credit or purchasing or maintaining a participation therein or to reduce theamount of any sum received or receivable by such Lender or the Issuing Bankhereunder (whether of principal, interest or otherwise) by an amount deemed bysuch Lender, the Administrative Agent or the Issuing Bank to be material, thenthe Borrower will pay to such Lender, the Administrative Agent or the IssuingBank, as the case may be, upon demand such additional amount or amounts aswill compensate such Lender or the Issuing Bank, as the case may be, forsuch additional costs incurred or reduction suffered.

 

(b)                                 Ifany Lender, the Administrative Agent or the Issuing Bank shall have determinedthat any Change in Law regarding capital adequacy has or would have the effectof reducing the rate of return on such Lender’s, the Administrative Agent’s orthe Issuing Bank’s capital or on the capital of such Lender’s, theAdministrative Agent’s or the Issuing Bank’s holding company, if any, as aconsequence of this Agreement or the Loans made by, or participations inLetters of Credit purchased by, such Lender or the Letters of Credit issued bythe Issuing Bank to a level below that which such Lender, the AdministrativeAgent or the Issuing Bank or such Lender’s, the Administrative Agent’s or theIssuing Bank’s holding company could have achieved but for such Change in Law(taking into consideration such Lender’s, the Administrative Agent’s or theIssuing Bank’s policies and the policies of such Lender’s, the AdministrativeAgent’s or the Issuing Bank’s holding company with respect to capital adequacy)by an amount deemed by such Lender, the Administrative Agent or the IssuingBank to be material, then from time to time the Borrower shall pay to suchLender, the Administrative Agent or the Issuing Bank, as the case may be,such additional amount or amounts as will compensate such Lender, theAdministrative Agent or the Issuing Bank or such Lender’s, the AdministrativeAgent’s or the Issuing Bank’s holding company for any such reduction suffered.

 

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(c)                                  Acertificate of a Lender, the Administrative Agent or the Issuing Bank settingforth the amount or amounts necessary to compensate such Lender, theAdministrative Agent or the Issuing Bank or its holding company, as applicable,as specified in paragraph (a) or (b) of this Section shallbe delivered to the Borrower and shall be conclusive absent manifest error. TheBorrower shall pay such Lender, the Administrative Agent or the Issuing Bank,as the case may be, the amount or amounts shown as due on any suchcertificate delivered by it within 10 days after its receipt of the same.

 

(d)                                 Failureor delay on the part of any Lender, the Administrative Agent or theIssuing Bank to demand compensation pursuant to this Section shall notconstitute a waiver of such Lender’s, the Administrative Agent’s or the IssuingBank’s right to demand such compensation; provided that the Borrowershall not be under any obligation to compensate any Lender, the AdministrativeAgent or the Issuing Bank under paragraph (a) or (b) above forincreased costs or reductions with respect to any period prior to the date thatis 270 days prior to such request if such Lender, the Administrative Agent orthe Issuing Bank knew or could reasonably have been expected to know of thecircumstances giving rise to such increased costs or reductions and of the factthat such circumstances would result in a claim for increased compensation byreason of such increased costs or reductions; providedfurtherthat the foregoing limitation shall not apply to any increased costs orreductions arising out of the retroactive application of any Change in Lawwithin such 270-day period. The protection of this Section shall beavailable to each Lender, the Administrative Agent and the Issuing Bankregardless of any possible contention of the invalidity or inapplicability ofthe Change in Law that shall have occurred or been imposed.

 

SECTION 2.15.Change in Legality. (a)  Notwithstanding any other provision ofthis Agreement, if any Change in Law shall make it unlawful for any Lender tomake or maintain any Eurodollar Loan or to give effect to its obligations ascontemplated hereby with respect to any Eurodollar Loan, then, by writtennotice to the Borrower and to the Administrative Agent:

 

(i)                                     suchLender may declare that Eurodollar Loans will not thereafter (for theduration of such unlawfulness) be made by such Lender hereunder (or becontinued for additional Interest Periods and ABR Loans will not thereafter(for such duration) be converted into Eurodollar Loans), whereupon any requestfor a Eurodollar Borrowing (or to convert an ABR Borrowing to a EurodollarBorrowing or to continue a Eurodollar Borrowing for an additional InterestPeriod) shall, as to such Lender only, be deemed a request for an ABR Loan (ora request to continue an ABR Loan as such for an additional Interest Period orto convert a Eurodollar Loan into an ABR Loan, as the case may be), unlesssuch declaration shall be subsequently withdrawn; and

 

(ii)                                  suchLender may require that all outstanding Eurodollar Loans made by it beconverted to ABR Loans, in which event all such Eurodollar Loans shall beautomatically converted to ABR Loans as of the effective date of such notice asprovided in paragraph (b) below.

 

In the eventany Lender shall exercise its rights under (i) or (ii) above, allpayments and prepayments of principal that would otherwise have been applied torepay the Eurodollar Loans

 

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that wouldhave been made by such Lender or the converted Eurodollar Loans of such Lendershall instead be applied to repay the ABR Loans made by such Lender in lieu of,or resulting from the conversion of, such Eurodollar Loans. Any such conversionof a Eurodollar Loan under (i) above shall be subject to Section 2.16.

 

(b)                                 Forpurposes of this Section 2.15, a notice to the Borrower by anyLender shall be effective as to each Eurodollar Loan made by such Lender, iflawful, on the last day of the Interest Period then applicable to suchEurodollar Loan; in all other cases such notice shall be effective on the dateof receipt by the Borrower.

 

SECTION 2.16.Indemnity. The Borrower shall indemnify each Lender against any loss(other than (x) any loss of margin over funding cost or (y) anticipated profit)or expense that such Lender may sustain or incur as a consequence of (a) anyevent, other than a default by such Lender in the performance of itsobligations hereunder, which results in (i) such Lender receiving or beingdeemed to receive any amount on account of the principal of any Eurodollar Loanprior to the end of the Interest Period in effect therefor, (ii) theconversion of any Eurodollar Loan to an ABR Loan, or the conversion of theInterest Period with respect to any Eurodollar Loan, in each case other than onthe last day of the Interest Period in effect therefor or (iii) anyEurodollar Loan to be made by such Lender (including any Eurodollar Loan to bemade pursuant to a conversion or continuation under Section 2.10)not being made after notice of such Loan shall have been given by the Borrowerhereunder (any of the events referred to in this clause (a) beingcalled a “Breakage Event”) or (b) any default in the making of anypayment or prepayment required to be made hereunder. In the case of anyBreakage Event, such loss shall include an amount equal to the excess, asreasonably determined by such Lender, of (i) its cost of obtaining fundsfor the Eurodollar Loan that is the subject of such Breakage Event for theperiod from the date of such Breakage Event to the last day of the InterestPeriod in effect (or that would have been in effect) for such Loan over (ii) theamount of interest likely to be realized by such Lender in redeploying thefunds released or not utilized by reason of such Breakage Event for such period.A certificate of any Lender setting forth any amount or amounts which suchLender is entitled to receive pursuant to this Section 2.16 shallbe delivered to the Borrower and shall be conclusive absent manifest error.

 

SECTION 2.17.Pro Rata Treatment. Except as provided below in this Section 2.17with respect to Swingline Loans and as required under Section 2.15,each Borrowing, each payment or prepayment of principal of any Borrowing, eachpayment of interest on the Loans, each payment of the Commitment Fees, eachreduction of the Term Loan Commitments or the Revolving Credit Commitments andeach conversion of any Borrowing to or continuation of any Borrowing as aBorrowing of any Type shall be allocated prorata among theLenders in accordance with their respective applicable Commitments (or, if suchCommitments shall have expired or been terminated, in accordance with therespective principal amounts of their outstanding Loans). For purposes ofdetermining the available Revolving Credit Commitments of the Lenders at anytime, each outstanding Swingline Loan shall be deemed to have utilized theRevolving Credit Commitments of the Lenders (including those Lenders whichshall not have made Swingline Loans) prorata in accordance withsuch respective Revolving Credit Commitments. Each Lender agrees that incomputing such Lender’s portion of any Borrowing to be made hereunder, theAdministrative Agent may, in its discretion, round each Lender’s percentage ofsuch Borrowing to the next higher or lower whole dollar amount.

 

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SECTION 2.18.Sharing of Setoffs. Each Lender agrees that if it shall, through theexercise of a right of banker’s lien, setoff or counterclaim against theBorrower or any other Loan Party, or pursuant to a secured claim under Section 506of Title 11 of the United States Code or other security or interest arisingfrom, or in lieu of, such secured claim, received by such Lender under anyapplicable bankruptcy, insolvency or other similar law or otherwise, or by anyother means, obtain payment (voluntary or involuntary) in respect of any Loanor Loans or L/C Disbursement as a result of which the unpaid principal portionof its Loans and participations in L/C Disbursements shall be proportionatelyless than the unpaid principal portion of the Loans and participations in L/CDisbursements of any other Lender, it shall be deemed simultaneously to havepurchased from such other Lender at face value, and shall promptly pay to suchother Lender the purchase price for, a participation in the Loans and L/CExposure of such other Lender, so that the aggregate unpaid principal amount ofthe Loans and L/C Exposure and participations in Loans and L/C Exposure held byeach Lender shall be in the same proportion to the aggregate unpaid principalamount of all Loans and L/C Exposure then outstanding as the principal amountof its Loans and L/C Exposure prior to such exercise of banker’s lien, setoffor counterclaim or other event was to the principal amount of all Loans and L/CExposure outstanding prior to such exercise of banker’s lien, setoff orcounterclaim or other event; provided, however, that if any suchpurchase or purchases or adjustments shall be made pursuant to this Section 2.18and the payment giving rise thereto shall thereafter be recovered, suchpurchase or purchases or adjustments shall be rescinded to the extent of suchrecovery and the purchase price or prices or adjustment restored withoutinterest. The Borrower expressly consents to the foregoing arrangements andagrees that any Lender holding a participation in a Loan or L/C Disbursementdeemed to have been so purchased may exercise any and all rights of banker’slien, setoff or counterclaim with respect to any and all moneys owing by theBorrower to such Lender by reason thereof as fully as if such Lender had made aLoan directly to the Borrower in the amount of such participation.

 

SECTION 2.19.Payments. (a)  The Borrower shall make each payment (includingprincipal of or interest on any Borrowing or any L/C Disbursement or any Feesor other amounts) hereunder and under any other Loan Document not later than12:00 (noon), New York City time, on the date when due in immediately availabledollars, without setoff, defense or counterclaim. Each such payment (other than(i) Issuing Bank Fees, which shall be paid directly to the Issuing Bank,and (ii) principal of and interest on Swingline Loans, which shall be paiddirectly to the Swingline Lender except as otherwise provided in Section 2.22(e))shall be made to the Administrative Agent at its offices at Eleven MadisonAvenue, New York, NY 10010. All payments hereunder and under each other LoanDocument shall be made in dollars. The Administrative Agent shall distributesuch payments to the Lenders promptly upon receipt in like funds as received.

 

(b)                                 Exceptas otherwise expressly provided herein, whenever any payment (includingprincipal of or interest on any Borrowing or any Fees or other amounts)hereunder or under any other Loan Document shall become due, or otherwise wouldoccur, on a day that is not a Business Day, such payment may be made onthe next succeeding Business Day, and such extension of time shall in such casebe included in the computation of interest or Fees, if applicable.

 

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SECTION 2.20.Taxes. (a)  Any and all payments by oron account of any obligation of the Borrower or any other Loan Party hereunderor under any other Loan Document shall be made free and clear of and withoutdeduction for any Indemnified Taxes or Other Taxes; provided that if anyIndemnified Taxes or Other Taxes are required to be withheld or deducted fromsuch payments, then (i) the sum payable by the Borrower shall be increasedas necessary so that after all required deductions or withholding (includingdeductions or withholdings applicable to additional sums payable under thisSection) the Administrative Agent or such Lender (as the case may be)receives an amount equal to the sum it would have received had no suchdeductions been made, (ii) the Borrower or such other Loan Party shallmake (or cause to be made) such deductions and (iii) the Borrower or suchother Loan Party shall pay (or cause to be paid) the full amount deducted tothe relevant Governmental Authority in accordance with applicable law. Inaddition, the Borrower or any other Loan Party hereunder shall pay (or cause tobe paid) any Other Taxes to the relevant Governmental Authority in accordancewith applicable law.

 

(b)                                 TheBorrower shall jointly and severally indemnify the Administrative Agent andeach Lender, within 10 days after written demand therefor, for the full amountof any Indemnified Taxes or Other Taxes paid by the Administrative Agent orsuch Lender, as the case may be, or any of their respective Affiliates, onor with respect to any payment by or on account of any obligation of theBorrower or any Loan Party hereunder or under any other Loan Document(including Indemnified Taxes or Other Taxes imposed or asserted on orattributable to amounts payable under this Section) and any penalties, interestand expenses arising therefrom or with respect thereto, whether or not suchIndemnified Taxes or Other Taxes were correctly or legally imposed or assertedby the relevant Governmental Authority; provided that if the Borrowerdetermines in good faith that a reasonable basis exists for contesting anyIndemnified Taxes or Other Taxes for which an increase in the amount of suchpayment is made or for which indemnification has been demanded pursuant to thisSection 2.20, such Lender or the Administrative Agent, asapplicable, shall reasonably cooperate with the Borrower in challenging suchIndemnified Taxes or Other Taxes at the Borrower’s expense if so requested bythe Borrower in writing to the extent that such cooperation is not, in theLender’s or the Administrative Agent’s reasonable discretion, unduly burdensomeor disadvantageous. A certificate as to the amount of such payment or liabilitydelivered to the Borrower by a Lender, or by the Administrative Agent on itsbehalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(c)                                  Assoon as practicable after any payment of Indemnified Taxes or Other Taxespursuant to Section 2.20(a), and in any event within 30 days of anysuch payment being due, the Borrower shall deliver (or cause to be delivered)to the Administrative Agent the original or a certified copy of a receiptissued by such Governmental Authority evidencing such payment, a copy of thereturn reporting such payment or other evidence of such payment reasonablysatisfactory to the Administrative Agent.

 

(d)                                 AnyForeign Lender that is entitled to an exemption from or reduction ofwithholding tax under the law of the jurisdiction in which the Borrower islocated, or any treaty to which such jurisdiction is a party, with respect topayments under this Agreement shall deliver to the Borrower (with a copy to theAdministrative Agent) such properly completed and executed documentation prescribedby applicable law or reasonably requested by the Borrower as will

 

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permit such payments to be made without withholding or at a reducedrate; provided that such Lender is legally entitled to complete, executeand deliver such documentation and in such Lender’s judgment such completion,execution or delivery would not materially prejudice the legal position of suchLender. In addition, each Foreign Lender shall (i) furnish on or before itbecomes a party to the Agreement either (a) two accurate and completeoriginally executed U.S. Internal Revenue Service Form W-8BEN (orsuccessor form) or (b) an accurate and complete U.S. Internal RevenueService Form W-8ECI (or successor form), certifying, in either case, tosuch Foreign Lender’s legal entitlement to an exemption or reduction from U.S.federal withholding tax with respect to all interest payments hereunder, and (ii) providea new Form W8BEN (or successor form) or Form W-8ECI (or successorform) upon the expiration or obsolescence of any previously delivered form toreconfirm any complete exemption from, or any entitlement to a reduction in,U.S. federal withholding tax with respect to any interest payment hereunder; providedthat any Foreign Lender that is not a “bank” within the meaning of Section 881(c)(3)(A) ofthe Code and is relying on the so-called “portfolio interest exemption” shallalso furnish a “Non-Bank Certificate” in the form of Exhibit Ktogether with a Form W8BEN. Notwithstanding any other provision of thisparagraph, a Foreign Lender shall not be required to deliver any form pursuantto this paragraph that such Foreign Lender is not legally able to deliver.

 

(e)                                  AnyLender that is a United States person, as defined in Section 7701(a)(30)of the Internal Revenue Code, and is not an exempt recipient within the meaningof Treasury Regulations Section 1.6049-4(c) shall deliver to theBorrower (with a copy to the Administrative Agent) two accurate and completeoriginal signed copies of Internal Revenue Service Form W-9, or anysuccessor form that such person is entitled to provide at such time inorder to comply with United States back-up withholding requirements.

 

(f)                                    Withoutprejudice to the survival of any other agreement of the Borrower hereunder, theagreements and obligations of the Borrower contained in this Section 2.20shall survive the payment in full of all amounts due hereunder.

 

(g)                                 Inthe event that any Lender or the Administrative Agent receives a refund inrespect of Indemnified Taxes or Other Taxes as to which it has been paidadditional amounts by the Borrower pursuant to clause (a) ofthis Section or indemnified by the Borrower pursuant to clause (b) ofthis Section and such Lender or the Administrative Agent, as applicable, reasonablydetermines that such refund is attributable to such additional amounts orindemnification, then such Lender or the Administrative Agent, as applicable,shall promptly notify the Administrative Agent and the Borrower and shallwithin 30 Business Days after the refund is actually received remit to theBorrower an amount as such Lender or the Administrative Agent, as applicable,determines to be the proportion of the refunded amount as will leave suchLender or the Administrative Agent, as applicable, after such remittance, in nobetter or worse position than it would have been if the Indemnified Taxes orOther Taxes had not been imposed and the corresponding additional amounts orindemnification payment not been made. Nothing in this Section 2.20(g) shalloblige any Lender or the Administrative Agent to disclose to the Borrower orany other person any information regarding its tax affairs or tax computationsor interfere with the right of any Lender or the Administrative Agent toarrange its tax affairs in whatever manner it thinks fit and, in particular, noLender or the Administrative Agent shall be under any obligation to claimrelief from its corporate profits or similar tax liability in credits ordeductions

 

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available to it and, if it does claim, the extent, order and manner inwhich it does so shall be at its absolute discretion.

 

SECTION 2.21.Assignment of Commitments Under Certain Circumstances; Duty to Mitigate.(a)  In the event (i) any Lender or the Issuing Bank delivers acertificate requesting compensation pursuant to Section 2.14, (ii) anyLender or the Issuing Bank delivers a notice described in Section 2.15,(iii) the Borrower is required to pay any additional amount to any Lenderor the Issuing Bank or any Governmental Authority on account of any Lender orthe Issuing Bank pursuant to Section 2.20 or (iv) any Lenderdoes not consent to a proposed amendment, modification or waiver of thisAgreement requested by the Borrower which requires the consent of all of theLenders or all of the Lenders under any Facility to become effective (and whichis approved by at least the Required Lenders), the Borrower may, at its soleexpense and effort (including with respect to the processing and recordationfee referred to in Section 9.04(b)), upon notice to such Lender orthe Issuing Bank and the Administrative Agent, require such Lender or theIssuing Bank to transfer and assign, without recourse (in accordance with andsubject to the restrictions contained in Section 9.04), all of itsinterests, rights and obligations under this Agreement to an assignee thatshall assume such assigned obligations (which assignee may be anotherLender, if a Lender accepts such assignment); provided that (x) suchassignment shall not conflict with any law, rule or regulation or order ofany court or other Governmental Authority having jurisdiction, (y) solely withrespect to replacements of Lenders pursuant to clauses (i), (ii) or(iii) of this Section, the Borrower shall have received the prior writtenconsent of the Administrative Agent (and, if a Revolving Credit Commitment isbeing assigned, of the Issuing Bank and the Swingline Lender), which consentshall not unreasonably be withheld or delayed, and (z) the Borrower or suchassignee shall have paid to the affected Lender or the Issuing Bank inimmediately available funds an amount equal to the sum of the principal of andinterest accrued to the date of such payment on the outstanding Loans or L/CDisbursements of such Lender or the Issuing Bank, respectively, plus all Feesand other amounts accrued for the account of such Lender or the Issuing Bankhereunder (including any amounts under Section 2.14 and Section 2.16);providedfurther that, if prior to any such transfer andassignment the circumstances or event that resulted in such Lender’s or theIssuing Bank’s claim for compensation under Section 2.14 or noticeunder Section 2.15 or the amounts paid pursuant to Section 2.20,as the case may be, cease to cause such Lender or the Issuing Bank tosuffer increased costs or reductions in amounts received or receivable orreduction in return on capital, or cease to have the consequences specified in Section 2.15,or cease to result in amounts being payable under Section 2.20, asthe case may be (including as a result of any action taken by such Lenderor the Issuing Bank pursuant to paragraph (b) below), or if suchLender or the Issuing Bank shall waive its right to claim further compensationunder Section 2.14 in respect of such circumstances or event orshall withdraw its notice under Section 2.15 or shall waive itsright to further payments under Section 2.20 in respect of suchcircumstances or event, as the case may be, then such Lender or theIssuing Bank shall not thereafter be required to make any such transfer andassignment hereunder. In connection with any such replacement, if the replacedLender does not execute and deliver to the Administrative Agent a dulycompleted Assignment and Acceptance reflecting such replacement within fiveBusiness Days of the date on which the replacement Lender executes and deliverssuch Assignment and Acceptance to the replaced Lender, then such replacedLender shall be deemed to have executed and delivered such Assignment andAcceptance.

 

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(b)                                 If(i) any Lender or the Issuing Bank shall request compensation under Section 2.14,(ii) any Lender or the Issuing Bank delivers a notice described in Section 2.15or (iii) the Borrower is required to pay anyadditional amount to any Lender or the Issuing Bank or any GovernmentalAuthority on account of any Lender or the Issuing Bank, pursuant to Section 2.20,then such Lender or the Issuing Bank shall use reasonable efforts (which shallnot require such Lender or the Issuing Bank to incur an unreimbursed loss orunreimbursed cost or expense or otherwise take any action inconsistent with itsinternal policies or legal or regulatory restrictions or suffer anydisadvantage or burden deemed by it to be significant) (x) to file anycertificate or document reasonably requested in writing by the Borrower or (y)to assign its rights and delegate and transfer its obligations hereunder toanother of its offices, branches or affiliates, if such filing or assignmentwould reduce its claims for compensation under Section 2.14 orenable it to withdraw its notice pursuant to Section 2.15 or wouldreduce amounts payable pursuant to Section 2.20, as the case may be,in the future. The Borrower hereby agrees to pay all reasonable costs andexpenses incurred by any Lender or the Issuing Bank in connection with any suchfiling or assignment, delegation and transfer.

 

SECTION 2.22.Swingline Loans. (a)  Swingline Commitment. Subject to theterms and conditions hereof and relying upon the representations andwarranties, set forth herein, the Swingline Lender agrees to make loans to theBorrower, at any time and from time to time after the Closing Date, and untilthe earlier of the Revolving Credit Maturity Date and the termination of theRevolving Credit Commitments in accordance with the terms hereof, in anaggregate principal amount at any time outstanding that will not result in (i) theaggregate principal amount of all Swingline Loans exceeding $5,000,000 in theaggregate or (ii) the Aggregate Revolving Credit Exposure, after givingeffect to any Swingline Loan, exceeding the Total Revolving Credit Commitment. EachSwingline Loan shall be in a principal amount that is an integral multiple of$250,000. The Swingline Commitment may be terminated or reduced from timeto time as provided herein. Within the foregoing limits, the Borrower may borrow,pay or prepay and reborrow Swingline Loans hereunder, subject to the terms,conditions and limitations set forth herein.

 

(b)                                 SwinglineLoans. The Borrower shall notify the Administrative Agent by fax, or bytelephone (confirmed by fax), not later than 12:00 p.m. (noon), New YorkCity time, on the day of a proposed Swingline Loan to be made to it. Suchnotice shall be delivered on a Business Day, shall be irrevocable and shallrefer to this Agreement and shall specify the requested date (which shall be aBusiness Day) and amount of such Swingline Loan. The Administrative Agent willpromptly advise the Swingline Lender of any notice received from the Borrowerpursuant to this paragraph (b). The Swingline Lender shall make eachSwingline Loan available to the Borrower by means of a credit to the account ofthe Borrower identified in such notice promptly on the date such Swingline Loanis so requested.

 

(c)                                  Prepayment.The Borrower shall have the right at any time and from time to time to prepayany Swingline Loan, in whole or in part, in a principal amount that is anintegral multiple of $250,000 (or, if all outstanding Swingline Loans are beingprepaid, the aggregate principal amount of all such outstanding SwinglineLoans), upon giving written or fax notice (or telephone notice promptlyconfirmed by written or fax notice) to the Swingline Lender and to theAdministrative Agent before 12:00 (noon), New York City time, on the date ofprepayment at the Swingline Lender’s address for notices specified in theLender Addendum delivered by the

 

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Swingline Lender. Allprincipal payments of Swingline Loans shall be accompanied by accrued intereston the principal amount being repaid to the date of payment.

 

(d)                                 Interest.Each Swingline Loan shall be an ABR Loan and, subject to the provisions of Section 2.07,shall bear interest as provided in Section 2.06(a).

 

(e)                                  Participations.The Swingline Lender may by written notice given to the AdministrativeAgent not later than 10:00 a.m., New York City time, on any Business Dayrequire the Revolving Credit Lenders to acquire participations on such BusinessDay in all or a portion of the Swingline Loans outstanding. Such notice shallspecify the aggregate amount of Swingline Loans in which Revolving CreditLenders will participate. The Administrative Agent will, promptly upon receiptof such notice, give notice to each Revolving Credit Lender, specifying in suchnotice such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Infurtherance of the foregoing, each Revolving Credit Lender hereby absolutelyand unconditionally agrees, upon receipt of notice as provided above, to pay tothe Administrative Agent, for the account of the Swingline Lender, suchRevolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or Loans. EachRevolving Credit Lender acknowledges and agrees that its obligation to acquireparticipations in Swingline Loans pursuant to this paragraph is absolute andunconditional and shall not be affected by any circumstance whatsoever,including the occurrence and continuance of a Default or an Event of Default,and that each such payment shall be made without any offset, abatement,withholding or reduction whatsoever. Each Revolving Credit Lender shall complywith its obligation under this paragraph by wire transfer of immediatelyavailable funds, in the same manner as provided in Section 2.02(c) withrespect to Loans made by such Lender (and Section 2.02(c) shallapply, mutatismutandis, to the payment obligations of theLenders under this Section) and the Administrative Agent shall promptly pay tothe Swingline Lender the amounts so received by it from the Lenders. TheAdministrative Agent shall notify the Borrower of any participations in anySwingline Loan acquired pursuant to this paragraph and thereafter payments inrespect of such Swingline Loan shall be made to the Administrative Agent andnot to the Swingline Lender. Any amounts received by the Swingline Lender fromthe Borrower (or other party on behalf of the Borrower) in respect of aSwingline Loan after receipt by the Swingline Lender of the proceeds of a saleof participations therein shall be promptly remitted to the AdministrativeAgent; any such amounts received by the Administrative Agent shall be promptlyremitted by the Administrative Agent to the Lenders that shall have made theirpayments pursuant to this paragraph and to the Swingline Lender, as theirinterests may appear. The purchase of participations in a Swingline Loanpursuant to this paragraph shall not relieve the Borrower (or other partyliable for obligations of the Borrower) of any default in the payment thereof.

 

SECTION 2.23.Letters of Credit. (a)  General. Subject to the terms andconditions hereof, the Borrower may request the issuance of a Letter ofCredit at any time and from time to time prior to the date that is 30 daysprior to the termination of the Revolving Credit Commitments for its ownaccount or for the account of any of the Subsidiary Guarantors (in which casethe Borrower and such Subsidiary Guarantor shall be co-applicants with respectto such Letter of Credit), in a form reasonably acceptable to theAdministrative Agent and the Issuing Bank. This Section shall not beconstrued to impose an obligation upon the Issuing Bank to issue any Letter ofCredit that is inconsistent with the terms and conditions of this Agreement.

 

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(b)                                 Notice of Issuance,Amendment, Renewal, Extension; Certain Conditions. In order to request theissuance of a Letter of Credit (or to amend, renew or extend an existing Letterof Credit), the Borrower shall hand deliver or fax to the Issuing Bank and theAdministrative Agent (no less than five Business Days (or such shorter periodof time acceptable to the Issuing Bank) in advance of the requested date ofissuance, amendment, renewal or extension) a notice requesting the issuance ofa Letter of Credit, or identifying the Letter of Credit to be amended, renewedor extended, the date of issuance, amendment, renewal or extension, the date onwhich such Letter of Credit is to expire (which shall comply with paragraph (c) below),the amount of such Letter of Credit, the name and address of the beneficiarythereof and such other information as shall be necessary to prepare such Letterof Credit. A Letter of Credit shall be issued, amended, renewed or extendedonly if, and upon issuance, amendment, renewal or extension of each Letter ofCredit the Borrower shall be deemed to represent and warrant that, after givingeffect to such issuance, amendment, renewal or extension (i) the L/CExposure shall not exceed $10,000,000 and (ii) the Aggregate RevolvingCredit Exposure shall not exceed the Total Revolving Credit Commitment. Thecontingent reimbursement obligations of Antares Capital Corporation owing tothe issuing bank of the Existing Letters of Credit in respect of the ExistingLetters of Credit shall be entitled to all of the rights, benefits andprivileges afforded to Letters of Credit under this Agreement.

 

(c)                                  Expiration Date.Each Letter of Credit shall expire at the close of business on the earlier of (i) thedate one year after the date of the issuance of such Letter of Credit and (ii) thedate that is five Business Days prior to the Revolving Credit Maturity Date,unless such Letter of Credit expires by its terms on an earlier date; provided,however, that a Letter of Credit may, upon the request of the Borrower,include a provision whereby such Letter of Credit shall be renewedautomatically for additional consecutive periods of 12 months or less (but notbeyond the date that is five Business Days prior to the Revolving CreditMaturity Date) unless the Issuing Bank notifies the beneficiary thereof atleast 30 days prior to the then-applicable expiration date that such Letter ofCredit will not be renewed.

 

(d)                                 Participations.By the issuance of a Letter of Credit and without any further action on the part ofthe Issuing Bank or the Lenders, the Issuing Bank hereby grants to eachRevolving Credit Lender, and each such Lender hereby acquires from the IssuingBank, a participation in such Letter of Credit equal to such Lender’s Pro RataPercentage of the aggregate amount available to be drawn under such Letter ofCredit, effective upon the issuance of such Letter of Credit. In considerationand in furtherance of the foregoing, each Revolving Credit Lender herebyabsolutely and unconditionally agrees to pay to the Administrative Agent, forthe account of the Issuing Bank, such Lender’s Pro Rata Percentage of each L/CDisbursement made by the Issuing Bank and not reimbursed by the Borrower (or,if applicable, another party pursuant to its obligations under any other LoanDocument) forthwith on the date due as provided in Section 2.02(f).Each Revolving Credit Lender acknowledges and agrees that its obligation toacquire participations pursuant to this paragraph in respect of Letters ofCredit is absolute and unconditional and shall not be affected by anycircumstance whatsoever, including the occurrence and continuance of a Defaultor an Event of Default, and that each such payment shall be made without anyoffset, abatement, withholding or reduction whatsoever.

 

(e)                                  Reimbursement.If the Issuing Bank shall make any L/C Disbursement in respect of a Letter ofCredit, the Borrower shall pay to the Administrative Agent an amount equal to 

 

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such L/C Disbursement not later than two hours after the Borrower shallhave received notice from the Issuing Bank that payment of such draft will bemade, or, if the Borrower shall have received such notice later than 10:00 a.m.,New York City time, on any Business Day, not later than 10:00 a.m., NewYork City time, on the immediately following Business Day.

 

(f)                                    ObligationsAbsolute. The Borrower’s obligations to reimburse L/C Disbursements asprovided in paragraph (e) above shall be absolute, unconditionaland irrevocable, and shall be performed strictly in accordance with the termsof this Agreement, under any and all circumstances whatsoever, and irrespectiveof:

 

(i)                                     anylack of validity or enforceability of any Letter of Credit or any LoanDocument, or any term or provision therein;

 

(ii)                                  anyamendment or waiver of, or any consent to departure from, all or any of theprovisions of any Letter of Credit or any Loan Document;

 

(iii)                               theexistence of any claim, setoff, defense or other right that the Borrower, anyother party guaranteeing, or otherwise obligated with, the Borrower, anysubsidiary or other Affiliate thereof or any other person may at any timehave against the beneficiary under any Letter of Credit, the Issuing Bank, theAdministrative Agent or any Lender or any other person, whether in connectionwith this Agreement, any other Loan Document or any other related or unrelatedagreement or transaction;

 

(iv)                              anydraft or other document presented under a Letter of Credit proving to beforged, fraudulent, invalid or insufficient in any respect or any statementtherein being untrue or inaccurate in any respect;

 

(v)                                 paymentby the Issuing Bank under a Letter of Credit against presentation of a draft orother document that does not comply with the terms of such Letter of Credit;and

 

(vi)                              anyother act or omission to act or delay of any kind of the Issuing Bank, anyLender, the Administrative Agent or any other person or any other event orcircumstance whatsoever, whether or not similar to any of the foregoing, thatmight, but for the provisions of this Section, constitute a legal or equitabledischarge of the Borrower’s obligations hereunder.

 

Without limiting the generality of theforegoing, it is expressly understood and agreed that the absolute andunconditional obligation of the Borrower hereunder to reimburse L/CDisbursements will not be excused by the gross negligence or willful misconductof the Issuing Bank. However, the foregoing shall not be construed to excusethe Issuing Bank from liability to the Borrower to the extent of any directdamages (as opposed to consequential damages, claims in respect of which arehereby waived by the Borrower to the extent permitted by applicable law)suffered by the Borrower that are caused by the Issuing Bank’s gross negligenceor willful misconduct in determining whether drafts and other documentspresented under a Letter of Credit comply with the terms thereof; it isunderstood that the Issuing Bank may accept documents that appear on theirface to be in order, without responsibility for further 

 

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investigation, regardless of any notice or information to the contraryand, in making any payment under any Letter of Credit (i) the Issuing Bank’sexclusive reliance on the documents presented to it under such Letter of Creditas to any and all matters set forth therein, including reliance on the amountof any draft presented under such Letter of Credit, whether or not the amountdue to the beneficiary thereunder equals the amount of such draft and whetheror not any document presented pursuant to such Letter of Credit proves to beinsufficient in any respect, if such document on its face appears to be inorder, and whether or not any other statement or any other document presentedpursuant to such Letter of Credit proves to be forged or invalid or anystatement therein proves to be inaccurate or untrue in any respect whatsoeverand (ii) any noncompliance in any immaterial respect of the documentspresented under such Letter of Credit with the terms thereof shall, in eachcase, be deemed not to constitute willful misconduct or gross negligence of theIssuing Bank.

 

(g)                                 DisbursementProcedures. The Issuing Bank shall, promptly following its receipt thereof,examine all documents purporting to represent a demand for payment under aLetter of Credit. The Issuing Bank shall as promptly as possible givetelephonic notification, confirmed by fax, to the Administrative Agent and theBorrower of such demand for payment and whether the Issuing Bank has made orwill make an L/C Disbursement thereunder; provided that any failure togive or delay in giving such notice shall not relieve the Borrower of itsobligation to reimburse the Issuing Bank and the applicable Lenders withrespect to any such L/C Disbursement. The Administrative Agent shall promptlygive each Revolving Credit Lender notice thereof.

 

(h)                                 Interim Interest.If the Issuing Bank shall make any L/C Disbursement in respect of a Letter ofCredit, then, unless the Borrower shall reimburse such L/C Disbursement in fullon such date, the unpaid amount thereof shall bear interest for the account ofthe Issuing Bank, for each day from and including the date of such L/CDisbursement to but excluding the earlier of the date of payment by theBorrower or the date on which interest shall commence to accrue thereon asprovided in Section 2.02(f), at the rate per annum that would applyto such amount if such amount were an ABR Revolving Loan.

 

(i)                                     Resignation orRemoval of the Issuing Bank. The Issuing Bank may resign at any timeby giving 30 days’ prior written notice to the Administrative Agent, theLenders and the Borrower. Subject to the next succeeding paragraph, upon theacceptance of any appointment as the Issuing Bank hereunder by a Lender thatshall agree to serve as successor Issuing Bank, such successor shall succeed toand become vested with all the interests, rights and obligations of theretiring Issuing Bank and the retiring Issuing Bank shall be discharged fromits obligations to issue additional Letters of Credit hereunder. At the timesuch removal or resignation shall become effective, the Borrower shall pay allaccrued and unpaid fees pursuant to Section 2.05(c)(ii). Theacceptance of any appointment as the Issuing Bank hereunder by a successorLender shall be evidenced by an agreement entered into by such successor, in a form satisfactoryto the Borrower and the Administrative Agent, and, from and after the effectivedate of such agreement, (i) such successor Lender shall have all therights and obligations of the previous Issuing Bank under this Agreement andthe other Loan Documents and (ii) references herein and in the other LoanDocuments to the term “Issuing Bank” shall be deemed to refer to such successoror to any previous Issuing Bank, or to such successor and all previous IssuingBanks, as the context shall require. After the resignation or removal of theIssuing Bank 

 

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hereunder, the retiring Issuing Bank shall remain a party hereto andshall continue to have all the rights and obligations of an Issuing Bank underthis Agreement and the other Loan Documents with respect to Letters of Creditissued by it prior to such resignation or removal, but shall not be required toissue additional Letters of Credit.

 

(j)                                     CashCollateralization. If any Event of Default shall occur and be continuing,the Borrower shall, (i) on the Business Day it receives notice, if suchnotice is received by 11a.m. (New York City time) on such Business Day, and (ii) withinone Business Day following the Business Day it receives notice, if such noticeis received after 11a.m. (New York City time) on such Business Day, in eachcase from the Administrative Agent or the Required Lenders (or, if the maturityof the Loans has been accelerated, Revolving Credit Lenders representinggreater than 50% of the total L/C Exposure) thereof and of the amount to bedeposited, deposit in an account with the Collateral Agent, for the ratablebenefit of the Revolving Credit Lenders, an amount in cash equal to the L/CExposure as of such date. Such deposit shall be held by the Collateral Agent ascollateral for the payment and performance of the obligations of the Borrowerunder this Agreement. The Collateral Agent shall have exclusive dominion andcontrol, including the exclusive right of withdrawal, over such account. Otherthan any interest earned on the investment of such deposits in PermittedInvestments, which investments shall be made at the option and sole discretionof the Collateral Agent, such deposits shall not bear interest. Interest orprofits, if any, on such investments shall accumulate in such account. Moneysin such account shall (i) automatically be applied by the AdministrativeAgent to reimburse the Issuing Bank for L/C Disbursements for which it has notbeen reimbursed, (ii) be held for thesatisfaction of the reimbursement obligations of the Borrower for the L/CExposure at such time and (iii) if the maturity of the Loans has beenaccelerated (but subject to the consent of Revolving Credit Lendersrepresenting greater than 50% of the total L/C Exposure), be applied to satisfythe Obligations. If the Borrower is required to provide an amount of cashcollateral hereunder as a result of the occurrence of an Event of Default, suchamount (to the extent not applied as aforesaid) shall be returned to theBorrower within three Business Days after all Events of Default have been curedor waived.

 

(k)                                  Additional IssuingBanks. The Borrower may, at any time and from time to time with the consentof the Administrative Agent (which consent shall not be unreasonably withheld)and such Lender, designate one or more additional Lenders to act as an issuingbank under the terms of the Agreement. Any Lender designated as an issuing bankpursuant to this paragraph shall be deemed to be an “Issuing Bank” (in additionto being a Lender) in respect of Letters of Credit issued or to be issued bysuch Lender, and, with respect to such Letters of Credit, such term shallthereafter apply to the other Issuing Bank and such Lender.

 

SECTION 2.24. Increase in Term LoanCommitments. (a)  The Borrower may, by written notice to theAdministrative Agent from time to time, request Incremental Term LoanCommitments in an aggregate amount not to exceed the Incremental Debt Amountfrom one or more Incremental Term Lenders, which may include any existingLender; provided that each Incremental Term Lender, if not already aLender hereunder, shall be subject to the approval of the Administrative Agent(which approval shall not be unreasonably withheld). Such notice shall setforth (i) the amount of the Incremental Term Loan Commitments beingrequested (which shall be in a minimum amount of $5,000,000 and in incrementsof $1,000,000 in excess thereof (or such lesser amount as shall be approved bythe Administrative Agent)), (ii) the date 

 

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on which such Incremental Term Loan Commitments are requested to becomeeffective (which date shall be prior to March 15, 2010 and shall not beless than 10 Business Days nor more than 60 days after the date of such notice)and (iii) whether such Incremental Term Loan Commitments are to be TermLoan Commitments or commitments to make term loans with certain terms differentfrom the Term Loans (“Other Term Loans”), subject to the provisionsherein.

 

(b)                                 The Borrower and eachIncremental Term Lender shall execute and deliver to the Administrative Agentan Incremental Term Loan Assumption Agreement and such other documentation asthe Administrative Agent shall reasonably specify to evidence the IncrementalTerm Loan Commitment of such Incremental Term Lender. Each Incremental TermLoan Assumption Agreement shall specify the terms of the Incremental Term Loansto be made thereunder; provided that, without the prior written consentof the Required Lenders, (i) the final maturity date of any Other TermLoans shall be no earlier than the Term Loan Maturity Date, (ii) theaverage life to maturity of any Other Term Loans shall be no shorter than theaverage life to maturity of the Term Loans, (iii) any Other Term Loansshall rank pari passu in right of payment and of security with the Term Loans, (iv) anyOther Term Loans shall have such pricing as may be agreed by the Borrowerand the Persons providing such Other Term Loans (provided that, to theextent that any yield (taking into account, among other things, the interestrate spreads in respect of such Other Term Loans, any upfront fees paid to thePersons providing such Other Term Loans and any prepayment fees or penaltiespayable in respect of prepayments of such Other Term Loans) with respect tosuch Other Term Loans shall be greater than the yield with respect to the TermLoans at the time the applicable Incremental Term Loan Assumption Agreement isexecuted and delivered plus 0.25% per annum, the yield of the Term Loans shallbe automatically increased (and/or fees shall be paid to the Lenders, asapplicable) so as to eliminated such difference) and (v) any Other TermLoans shall otherwise be treated hereunder substantially the same as (and inany event no more favorably than) the Term Loans. The Administrative Agentshall promptly notify each Lender as to the effectiveness of each IncrementalTerm Loan Assumption Agreement. Each of the parties hereto hereby agrees that,upon the effectiveness of any Incremental Term Loan Assumption Agreement, thisAgreement shall be deemed amended to the extent (but only to the extent)necessary to reflect the existence and the terms of the Incremental Term LoanCommitment evidenced thereby; provided that any Incremental Term LoanAssumption Agreement may, without the consent of any Lender, effect suchamendments to this Agreement and the other Loan Documents as may benecessary or appropriate, in the opinion of the Administrative Agent, to effectthe provisions of this Section 2.24. Any such deemed amendment may bememorialized in writing by the Administrative Agent with the Borrower’s consent(not to be unreasonably withheld) and furnished to the other parties hereto.

 

(c)                                  Notwithstanding theforegoing, no Incremental Term Loan Commitment shall become effective underthis Section 2.24 unless (i) on the date of sucheffectiveness, the conditions set forth in paragraphs (b) and (c) ofSection 4.01 shall be satisfied and the Administrative Agent shallhave received a certificate to that effect dated such date and executed by aFinancial Officer of the Borrower, (ii) the Administrative Agent shallhave received legal opinions, board resolutions and other closing certificatesand documentation consistent with those delivered on the Closing Date under paragraphs(a) and (b) of Section 4.02, as well as anyother applicable documents reasonably required by the Administrative Agent inconnection with 

 

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any such transaction, (iii) on such date, and after giving effectto the Borrowing of Incremental Term Loans contemplated thereby and the use ofthe proceeds therefrom as if made and applied on such date, the Borrower shallbe in pro forma compliance with each of the covenants contained in Sections6.11, 6.12 and 6.13 as of the most recently ended fiscalquarter, and (iv) no Default or Event of Default shall exist on such datebefore or after giving effect to such Incremental Term Loan Commitments and theBorrowing of Incremental Term Loans contemplated thereby and the use of theproceeds therefrom as if made and applied on such date.

 

(d)                                 Each of the partieshereto hereby agrees that the Administrative Agent may take any and allactions as may be reasonably necessary to ensure that all Incremental TermLoans (other than Other Term Loans), when originally made, are included in eachBorrowing of outstanding Term Loans on a pro rata basis. This may beaccomplished at the discretion of the Administrative Agent by requiring eachoutstanding Eurodollar Term Borrowing to be converted into an ABR TermBorrowing on the date of each outstanding Eurodollar Term Borrowing on a prorata basis, even though as a result thereof such Incremental Term Loan may effectivelyhave a shorter Interest Period than the Term Loans included in the Borrowing ofwhich they are a part (and notwithstanding any other provision of thisAgreement that would prohibit such an initial Interest Period). Any conversionof Eurodollar Term Loans to ABR Term Loans made pursuant to the immediatelypreceding sentence shall be subject to Section 2.16. If anyIncremental Term Loan is to be allocated to an existing Interest Period for aEurodollar Term Borrowing, then, subject to Section 2.07, theinterest rate applicable to such Incremental Term Loan for the remainder ofsuch Interest Period shall equal the Adjusted LIBO Rate for a periodapproximately equal to the remainder of such Interest Period (as determined bythe Administrative Agent two Business Days before the date such IncrementalTerm Loan is made) plus the Applicable Margin. In addition, to the extent anyIncremental Term Loans are not Other Term Loans, the scheduled amortizationpayments under Section 2.11(a) required to be made after themaking of any Incremental Term Loans shall be ratably increased by theaggregate principal amount of such Incremental Term Loans.

 

ARTICLE III

 

Representationsand Warranties

 

Each of Holdings and the Borrower jointly andseverally represents and warrants to the Arranger, the Administrative Agent,the Collateral Agent, the Issuing Bank and each of the Lenders that:

 

SECTION 3.01. Organization; Powers.Holdings, the Borrower and each of the Subsidiaries (a) is duly organizedor formed, validly existing and (if applicable) in good standing under the lawsof the jurisdiction of its organization or formation, (b) has allrequisite power and authority to own and operate its property and assets, tolease the property it operates as lessee and to carry on its business as nowconducted and as proposed to be conducted, (c) is qualified to do businessin, and is in good standing in, every jurisdiction where such qualification isrequired, except where the failure so to qualify, individually or in theaggregate, could not reasonably be expected to result in a Material AdverseEffect and (d) has the power and authority to execute, deliver and perform itsobligations under this Agreement, each of the other Loan Documents to which itis or will be a party, the Acquisition Documentation to which it is or will bea party and 

 

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each other agreement or instrument contemplated hereby or thereby towhich it is or will be a party, including, in the case of the Borrower, toborrow hereunder, in the case of each Loan Party, to grant the Lienscontemplated to be granted by it under the Security Documents and, in the caseof each Subsidiary Guarantor, to Guarantee the Obligations as contemplated bythe Guarantee and Collateral Agreement.

 

SECTION 3.02. Authorization; NoConflicts. The Transactions (a) have been duly authorized by allrequisite corporate, partnership or limited liability company and, if required,stockholder, partner or member action and (b) will not (i) violate (A) anyprovision of law, statute, rule or regulation, or of the certificate orarticles of incorporation or other constitutive documents or by-laws ofHoldings, the Borrower or any Subsidiary, (B) any order of anyGovernmental Authority or arbitrator or (C) any provision of anyindenture, material agreement or other material instrument to which Holdings,the Borrower or any Subsidiary is a party or by which any of them or any oftheir property is or may be bound, (ii) be in conflict with, resultin a breach of or constitute (alone or with notice or lapse of time or both) adefault under, or give rise to any right to accelerate or to require theprepayment, repurchase or redemption of any obligation under any suchindenture, agreement or other instrument or (iii) result in the creationor imposition of any Lien upon or with respect to any property or assets nowowned or hereafter acquired by Holdings, the Borrower or any Subsidiary (otherthan Liens created under the Security Documents).

 

SECTION 3.03. Enforceability. ThisAgreement has been duly executed and delivered by each of Holdings and theBorrower and constitutes, and each other Loan Document when executed anddelivered by each Loan Party party thereto will constitute, a legal, valid andbinding obligation of such Loan Party enforceable against such Loan Party inaccordance with its terms, subject to applicable bankruptcy, insolvency,reorganization, moratorium or other laws affecting creditors’ rights generallyand subject to general principles of equity, regardless of whether consideredin a proceeding in equity or at law.

 

SECTION 3.04. Governmental Approvals.No action, consent or approval of, registration or filing with, Permit from,notice to, or any other action by, any Governmental Authority is or will berequired in connection with the Transactions, except for (a) the filing ofUCC financing statements and filings with the United States Patent andTrademark Office and the United States Copyright Office, (b) recordationof the Mortgages, (c) such as have been made or obtained and are in fullforce and effect and (d) such the failure of which to make or obtain,individually or in the aggregate, could not reasonably be expected to result ina Material Adverse Effect.

 

SECTION 3.05. Financial Statements.(a)  The Borrower has heretofore furnished to the Lenders its consolidatedbalance sheets and statements of income, stockholder’s equity and cash flows asof and for the fiscal years ended December 31, 2004 audited by andaccompanied by the opinion of KPMG LLP, independent public accountants. Suchfinancial statements present fairly in all material respects the financialcondition and results of operations and cash flows of the Borrower and itsconsolidated Subsidiaries as of such dates and for such periods. Such balancesheets and the notes thereto disclose all material liabilities, direct orcontingent, of the Borrower and its consolidated Subsidiaries as of the datesthereof. Such financial statements were prepared in accordance with GAAPapplied on a consistent basis.

 

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(b)                                 [RESERVED]

 

SECTION 3.06. No Material AdverseChange. No event, change or condition has occurred since December 31,2003 that has caused, or could reasonably be expected to cause, a MaterialAdverse Effect.

 

SECTION 3.07. Title to Properties;Possession Under Leases. (a)  Each of Holdings, the Borrower and theSubsidiaries has good and marketable title to, or valid leasehold interests in,all its material properties and assets (including material Real Property),except for (i) defects in title that, in the aggregate, are notsubstantial in amount and do not materially detract from the value of theproperty subject thereto or materially interfere with its ability to conductits business as currently conducted or to utilize such properties and assetsfor their intended purposes, (ii) Liens expressly permitted by Section 6.02and (iii) leasehold interests that terminate in the ordinary course ofbusiness in accordance with their terms and not on account of a tenant default.Each material parcel of Real Property is free from material structural defectsand all building systems contained therein are in good working order andcondition, ordinary wear and tear excepted, suitable for the purposes for whichthey are currently being used.

 

(b)                                 Each of Holdings, theBorrower and the Subsidiaries, and, to the knowledge of the Borrower, eachother party thereto, has complied with all obligations under all leases towhich it is a party and all such leases are legal, valid, binding and in fullforce and effect and are enforceable in accordance with their terms, except, ineach case, for such noncompliance or such failures to be in full force andeffect that could not reasonably be expected, individually or in the aggregate,to result in a Material Adverse Effect. Each of Holdings, the Borrower and theSubsidiaries enjoys peaceful and undisturbed possession under all such materialleases. The Borrower has delivered to the Administrative Agent true, completeand correct copies of all leases (whether as landlord or tenant) of RealProperty existing as of the Closing Date the Borrower has promptly afterexecution delivered to the Administrative Agent true, complete and correctcopies of all leases (whether as landlord or tenant) of Mortgaged Propertiesexecuted at any time after the Closing Date.

 

(c)                                  The Borrower hasobtained all material Permits, licenses, variances and certificates (includingcertificates of occupancy) required by applicable law to be obtained andnecessary to the use and operation of each parcel of Real Property, exceptwhere the failure to have such Permit, license, certificate or variance couldnot reasonably be expected, individually or in the aggregate, to result in aMaterial Adverse Effect.

 

SECTION 3.08. Subsidiaries. Schedule 3.08sets forth as of the Closing Date a list of all Subsidiaries, after givingeffect to the Acquisition, including each Subsidiary’s exact legal name (asreflected in such Subsidiary’s certificate or articles of incorporation orother constitutive documents) and jurisdiction of incorporation or formationand the percentage ownership interest of Holdings or the Borrower (direct orindirect) therein, and identifies each Subsidiary that is Loan Party. Theshares of capital stock or other Equity Interests so indicated on Schedule 3.08are (where applicable) fully paid and non-assessable and are owned by Holdingsor the Borrower, directly or indirectly, free and clear of all Liens (otherthan Liens expressly permitted by clauses (b) or (d) ofSection 6.02).

 

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SECTION 3.09. Litigation; Compliancewith Laws. (a) There are no actions, suits or proceedings at law or inequity or by or before any arbitrator or Governmental Authority now pending or,to the knowledge of Holdings or the Borrower, threatened against or affectingHoldings, the Borrower or any Subsidiary or any business, property or rights ofany such person (i) that involve any LoanDocument or the Transactions or (ii) except as set forth on Schedule 3.09,as to which there is a reasonable possibility of an adverse determination andthat, if adversely determined, could reasonably be expected, individually or inthe aggregate, to result in a Material Adverse Effect.

 

(b)                                 Since the date of thisAgreement, there has been no change in the status of the matters disclosed on Schedule 3.09that, individually or in the aggregate, has resulted in, or materiallyincreased the likelihood of, a Material Adverse Effect.

 

(c)                                  None of Holdings, theBorrower or any of the Subsidiaries or any of their respective materialproperties or assets is in violation of, nor will the continued operation oftheir material properties and assets as currently conducted violate, any law, rule orregulation (including any zoning, building, Environmental Law, ordinance, codeor approval or any building permits) or any restrictions of record oragreements affecting the Mortgaged Property, or is in default with respect toany judgment, writ, injunction, decree or order of any Governmental Authority,where, in each case in this paragraph (c), such violation or default,individually or in the aggregate, could reasonably be expected to result in aMaterial Adverse Effect.

 

SECTION 3.10. Agreements. None ofHoldings, the Borrower or any of the Subsidiaries is in default in any mannerunder any provision of any agreement or instrument, or subject to any corporaterestriction, that, individually or in the aggregate, has resulted or could reasonablybe expected to result in a Material Adverse Effect.

 

SECTION 3.11. Federal ReserveRegulations. (a)  None of Holdings, the Borrower or any of theSubsidiaries is engaged principally, or as one of its important activities, inthe business of extending credit for the purpose of buying or carrying MarginStock.

 

(b)                                 None of thetransactions contemplated by this Agreement (including the making of the Loansand the use of the proceeds thereof, including any refinancing or retirement ofIndebtedness with the proceeds thereof) will violate or result in the violationof any of the provisions of the Regulations of the Board, including RegulationT, U or X. If requested by any Lender or the Administrative Agent, the Borrowerwill furnish to the Administrative Agent and each Lender a statement to theforegoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1referred to in Regulation U.

 

SECTION 3.12. Investment Company Act.None of Holdings, the Borrower or any of the Subsidiaries is an “investmentcompany” as defined in, or subject to regulation under, the Investment CompanyAct of 1940, as amended.

 

SECTION 3.13. Use of Proceeds. TheBorrower will use the proceeds of (a) the Term Loans funded on theAmendment Effective Date to pay the consideration for the Proposed DomesticAcquisition and fees and expenses related thereto and (b) any other Loanssolely for 

 

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general corporate purposes, including the Proposed DomesticAcquisition, the Proposed Foreign Acquisition and other Permitted Acquisitions.The Borrower will request the issuance of Letters of Credit solely to supportpayment obligations incurred in the ordinary course of business by the Borrowerand the Subsidiary Guarantors.

 

SECTION 3.14. Tax Returns. Eachof Holdings, the Borrower and each of the Subsidiaries has timely filed ortimely caused to be filed all Federal, state, material local and foreign taxreturns or materials required to have been filed by it and all such tax returnsare correct and complete in all material respects. Each of Holdings, theBorrower and each of the Subsidiaries has timely paid or timely caused to bepaid all Taxes due and payable by it and all assessments received by it, exceptTaxes that are being contested in good faith by appropriate proceedings and forwhich Holdings, the Borrower or such Subsidiary, as applicable, shall have setaside on its books adequate reserves in accordance with GAAP. Each of Holdings,the Borrower and each of the Subsidiaries has made adequate provision inaccordance with GAAP for all Taxes not yet due and payable. None of theHoldings, the Borrower or any of the Subsidiaries intends to treat the Loans orany of the transactions contemplated by any Loan Document as being a “reportabletransaction” (within the meaning of Treasury Regulation Section 1.6011-4).

 

SECTION 3.15. No MaterialMisstatements; Acquisition Documentation. Each of Holdings and the Borrowerhas disclosed to the Arranger, the Administrative Agent and the Lenders allagreements, instruments and corporate or other restrictions to which Holdings,the Borrower or any of the Subsidiaries is subject, and all other matters knownto any of them, that, individually or in the aggregate, could reasonably beexpected to result in a Material Adverse Effect. None of any factualinformation, report, financial statement, exhibit or schedule furnishedby or on behalf of Holdings, the Borrower or any Subsidiary to the Arranger,the Administrative Agent or any Lender for use in connection with thetransactions contemplated by the Loan Documents or in connection with thenegotiation of any Loan Document or included therein or delivered pursuantthereto, when taken as a whole, contained, contains or will contain (in eachcase as of the date of its delivery to the Arranger, the Administrative Agentor any Lender) any material misstatement of fact or omitted, omits or will omitto state any material fact necessary to make the statements therein, in thelight of the circumstances under which they were, are or will be made, notmisleading; provided that to the extent any such information, report,financial statement, exhibit or schedule was based upon orconstitutes a forecast or projection, each of Holdings and the Borrowerrepresents only that it acted in good faith and utilized assumptions believedby management of Holdings and the Borrower to be reasonable at the time made inthe preparation of such information, report, financial statement, exhibit orschedule (it being understood by the Lenders and the Agents that suchfinancial information as it relates to future events is not to be viewed asfact and that actual results during the period or periods covered by suchfinancial information may differ from the projected results set forththerein).

 

SECTION 3.16. Employee Benefit Plans.Each of the Borrower and each of its ERISA Affiliates is in compliance in allmaterial respects with the applicable provisions of ERISA and the Tax Code andthe regulations and published interpretations thereunder. No ERISA Event hasoccurred or is reasonably expected to occur that, when taken together with allother such ERISA Events, could reasonably be expected to result in a MaterialAdverse Effect. The present value 

 

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of all benefit liabilities under each Benefit Plan (based on theassumptions used for purposes of Statement of Financial Accounting Standards No. 87)did not, as of December 31, 2003, exceed by more than $3,000,000 the fairmarket value of the assets of such Benefit Plan, and the present value of allbenefit liabilities of all underfunded Benefit Plans (based on the assumptionsused for purposes of Statement of Financial Accounting Standards No. 87)did not, as of December 31, 2003, exceed by more than $3,000,000 the fairmarket value of the assets of all such underfunded Benefit Plans.

 

SECTION 3.17. Environmental Matters.Except with respect to matters that, individually or in the aggregate, couldnot reasonably be expected to result in a Material Adverse Effect, none ofHoldings, the Borrower or any of the Subsidiaries:

 

(a)                                  hasfailed to comply with any Environmental Law or to take, in a timely manner, allactions necessary to obtain, maintain, renew and comply with any EnvironmentalPermit, and all such Environmental Permits are in full force and effect and notsubject to any administrative or judicial appeal;

 

(b)                                 hasbecome a party to any governmental, administrative or judicial proceeding orpossesses knowledge of any such proceeding that has been threatened underEnvironmental Law;

 

(c)                                  hasreceived written notice of, become subject to, or is aware of any facts orcircumstances that could form the basis for, any Environmental Liabilityother than those which have been fully and finally resolved and for which noobligations remain outstanding;

 

(d)                                 possessesknowledge that any Mortgaged Property (A) is subject to any Lien,restriction on ownership, occupancy, use or transferability imposed pursuant toEnvironmental Law or (B) contains or previously contained HazardousMaterials of a form or type or in a quantity or location that couldreasonably be expected to result in any Environmental Liability;

 

(e)                                  possessknowledge that there has been a Release or threat of Release of Hazardous Materialsat or from the Mortgaged Properties (or from any facilities or other propertiesformerly owned, leased or operated by Holdings, the Borrower or any of theSubsidiaries) in violation of, or in amounts or in a manner that could giverise to liability under, any Environmental Law;

 

(f)                                    hasgenerated, treated, stored, transported, or Released Hazardous Materials fromthe Mortgaged Properties (or from any facilities or other properties formerlyowned, leased or operated by Holdings, the Borrower or any of the Subsidiaries)in violation of, or in a manner or to a location that could give rise toliability under, any Environmental Law;

 

(g)                                 isaware of any facts, circumstances, conditions or occurrences in respect of anyof the facilities and properties owned, leased or operated that could (A) form thebasis of any action, suit, claim or other judicial or administrative proceedingrelating to liability under or noncompliance with Environmental Law on the part ofHoldings, the 

 

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Borrower or any of the Subsidiaries or (B) interferewith or prevent continued compliance with Environmental Laws by Holdings, theBorrower or the Subsidiaries; or

 

(h)                                 haspursuant to any order, decree, judgment or agreement by which it is bound orhas assumed the Environmental Liability for any Person.

 

SECTION 3.18. Insurance. Schedule 3.18sets forth a true, complete and correct description of all insurance maintainedby or on behalf of Holdings, the Borrower and the Subsidiaries as of theClosing Date. As of the Closing Date, such insurance is in full force andeffect and all premiums have been duly paid. Holdings, the Borrower and theSubsidiaries are insured by financially sound and reputable insurers and suchinsurance is in such amounts and covering such risks and liabilities (and withsuch deductibles, retentions and exclusions) as are in the Borrower’sreasonable judgment in accordance with normal and prudent industry practice. Noneof Holdings, the Borrower or any of the Subsidiaries (a) has receivednotice from any insurer (or any agent thereof) that substantial capitalimprovements or other substantial expenditures will have to be made in order tocontinue such insurance, the cost of which improvements or expenditures couldreasonably be expected, individually or in the aggregate, to result in aMaterial Adverse Effect or (b) has any reason to believe that it will notbe able to renew its existing coverage as and when such coverage expires or toobtain similar coverage from similar insurers at a cost that could notreasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.19. Security Documents.(a)  The Guarantee and Collateral Agreement is effective to create infavor of the Collateral Agent, for the ratable benefit of the Secured Parties,a legal, valid, binding and enforceable security interest in the Collateraldescribed therein in which a security interest can be created under Article 8or 9 of the UCC and proceeds thereof and (i) inthe case of the Pledged Collateral, upon the earlier of (A) when suchPledged Collateral is delivered to the Collateral Agent and (B) whenfinancing statements in appropriate form are filed in the officesspecified on Schedule 3.19(a) and (ii) in the case of allother Collateral described therein in which a security interest can be createdunder Article 8 or 9 of the UCC (other than Intellectual PropertyCollateral), when financing statements in appropriate form are filed inthe offices specified on Schedule 3.19(a), the Guarantee andCollateral Agreement shall constitute a fully perfected Lien on, and securityinterest in, all right, title and interest of the Secured Parties in suchCollateral in which a security interest can be created under Article 8 or9 of the UCC and proceeds thereof, as security for the Obligations, in eachcase prior and superior to the rights of any other person (except, in the caseof all Collateral other than Pledged Collateral, with respect to Liensexpressly permitted by Section 6.02 and, in the case of PledgedCollateral, with respect to any Liens expressly permitted by clauses (b) or(d) of Section 6.02).

 

(b)                                 Each IntellectualProperty Security Agreement is effective to create in favor of the CollateralAgent, for the ratable benefit of the Secured Parties, a legal, valid, bindingand enforceable security interest in the Intellectual Property Collateraldescribed therein and proceeds thereof. When each Intellectual PropertySecurity Agreement is filed in the United States Patent and Trademark Officeand the United States Copyright Office, respectively, together with financingstatements in appropriate form filed in the offices specified in Schedule 3.19(a),such Intellectual Property Security Agreement shall constitute a fullyperfected Lien on, and security interest in, all right, title and interest ofthe grantors thereunder in the Intellectual 

 

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Property Collateral in which a security interest may be perfectedby filing in the United States and proceeds thereof, as security for theObligations, in each case prior and superior in right to any other person(except with respect to Liens expressly permitted by Section 6.02)(it being understood that subsequent recordings in the United States Patent andTrademark Office and the United States Copyright Office may be necessaryto perfect a lien on registered trademarks, trademark applications andcopyrights acquired by the grantors after the Closing Date).

 

(c)                                  Each of the Mortgagesis effective to create in favor of the Collateral Agent, for the ratablebenefit of the Secured Parties, a legal, valid, binding and enforceable Lienon, and security interest in, all of the Loan Parties’ right, title andinterest in and to the Mortgaged Property thereunder and proceeds thereof, andwhen the Mortgages are filed in the offices specified on Schedule 3.19(c),each such Mortgage shall constitute a fully perfected Lien on, and securityinterest in, all right, title and interest of the grantors thereof in suchMortgaged Property and proceeds thereof, as security for the Obligations, ineach case prior and superior in right to any other person (except with respectto Liens expressly permitted by Section 6.02).

 

SECTION 3.20. Location of RealProperty. Schedule 3.20 lists completely and correctly as ofthe Closing Date all Real Property and the addresses thereof, indicating foreach parcel whether it is owned or leased, including in the case of leased RealProperty, the landlord name, lease date and lease expiration date.

 

SECTION 3.21. Labor Matters. Asof the Closing Date, there are no strikes, lockouts or slowdowns againstHoldings, the Borrower or any Subsidiary pending or, to the knowledge ofHoldings or the Borrower, threatened. The hours worked by and payments made toemployees of Holdings, the Borrower and the Subsidiaries have not been inviolation of the Fair Labor Standards Act or any other applicable Federal,state, local or foreign law dealing with such matters, except for suchviolations that could not reasonably be expected, individually or in theaggregate, to result in a Material Adverse Effect. All payments due fromHoldings, the Borrower or any Subsidiary, or for which any claim may bemade against Holdings, the Borrower or any Subsidiary, on account of wages andemployee health and welfare insurance and other benefits, have been paid oraccrued as a liability on the books of Holdings, the Borrower or suchSubsidiary, except for such failures that could not reasonably be expected,individually or in the aggregate, to result in a Material Adverse Effect.

 

SECTION 3.22. Intellectual Property.Each of Holdings, the Borrower and each of the Subsidiaries owns, or islicensed to use, all trademarks, tradenames, copyrights, patents and otherintellectual property material to its business, and the use thereof byHoldings, the Borrower and the Subsidiaries does not infringe upon the rightsof any other person, except for any such infringements that, individually or inthe aggregate, could not reasonably be expected to result in a Material AdverseEffect.

 

SECTION 3.23. Solvency. Immediatelyafter the consummation of the Transactions to occur on the Closing Date andimmediately following the making of each Loan (or other extension of credithereunder) and after giving effect to the application of the proceeds of eachLoan (or other extension of credit hereunder), subject, in the case of anyguarantee of any Guarantor, to the terms of Section 2 of the Guarantee andCollateral Agreement, (a) the fair value of the assets of each Loan Party,at a fair valuation, will exceed its debts and liabilities, 

 

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subordinated, contingent or otherwise; (b) the present fairsaleable value of the property of each Loan Party will be greater than theamount that will be required to pay the probable liability of its debts andother liabilities, subordinated, contingent or otherwise, as such debts andother liabilities become absolute and matured; (c) each Loan Party will beable to pay its debts and liabilities, subordinated, contingent or otherwise,as such debts and liabilities become absolute and matured; and (d) no LoanParty will have unreasonably small capital with which to conduct the businessin which it is engaged as such business is now conducted and is proposed to beconducted following the Closing Date.

 

SECTION 3.24. Senior Debt. TheObligations constitute “Senior Debt” under and as defined in theSubordinated Note Documents.

 

ARTICLE IV

 

Conditions ofLending

 

The obligations of the Lenders to make Loansand the obligations of the Issuing Bank to issue Letters of Credit are subjectto the satisfaction of the following conditions:

 

SECTION 4.01. All Credit Events. Onthe date of each Borrowing, including each Borrowing of a Swingline Loan butexcluding the conversion of a Eurodollar Borrowing to an ABR Borrowing (or viceversa) or the continuation or conversion of the Interest Period of a EurodollarBorrowing into another permitted Interest Period, and on the date of eachissuance, amendment, extension or renewal of a Letter of Credit (each suchevent being called a “Credit Event”):

 

(a)                                  TheAdministrative Agent shall have received a notice of such Borrowing as requiredby Section 2.03 (or such notice shall have been deemed given in accordancewith Section 2.03) or, in the case of the issuance, amendment,extension or renewal of a Letter of Credit, the Issuing Bank and theAdministrative Agent shall have received a notice requesting the issuance,amendment, extension or renewal of such Letter of Credit as required by Section 2.23(b) or,in the case of the Borrowing of a Swingline Loan, the Swingline Lender and theAdministrative Agent shall have received a notice requesting such SwinglineLoan as required by Section 2.22(b).

 

(b)                                 Therepresentations and warranties set forth in each Loan Document shall be trueand correct in all material respects on and as of the date of such Credit Eventwith the same effect as though made on and as of such date, except to theextent such representations and warranties expressly relate to an earlier date,in which case such representations and warranties shall have been true andcorrect in all material respects on and as of such earlier date.

 

(c)                                  Atthe time of and immediately after such Credit Event, no Event of Default orDefault shall have occurred and be continuing.

 

Each Credit Event shall be deemed toconstitute a joint and several representation and warranty by each of Holdingsand the Borrower on the date of such Credit Event as to the matters specifiedin paragraphs (b) and (c) of this Section 4.01.

 

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SECTION 4.02. First Credit Event.On the Closing Date:

 

(a)                                  TheAdministrative Agent shall have received a favorable written opinion dated asof the Closing Date of (i) Mayer, Brown, Rowe & Maw LLP, specialcounsel for the Loan Parties, in form and substance reasonablysatisfactory to the Administrative Agent and (ii) Baker Donelson BearmanCaldwell & Berkowitz, Mississippi real estate counsel for Holdings,the Borrower and the Subsidiaries, in form and substance reasonablysatisfactory to the Administrative Agent, and Holdings, the Borrower and theSubsidiaries hereby request such counsel to deliver such opinions.

 

(b)                                 TheAdministrative Agent shall have received (i) a copy of the certificate orarticles of incorporation or other formation documents, including allamendments thereto, of each Loan Party, certified as of a recent date by theSecretary of State of the state of its organization, and a certificate as tothe good standing of each Loan Party as of a recent date, from such Secretaryof State; (ii) a certificate of the Secretary or Assistant Secretary ofeach Loan Party dated the Closing Date and certifying (A) that attachedthereto is a true and complete copy of the by-laws of such Loan Party as ineffect on the Closing Date and at all times since a date prior to the date ofthe resolutions described in clause (B) below, (B) thatattached thereto is a true and complete copy of resolutions duly adopted by theBoard of Directors of such Loan Party authorizing the execution, delivery andperformance of the Loan Documents to which such person is a party, in the caseof the Borrower, the borrowings hereunder, in the case of each Loan Party, thegranting of the Liens contemplated to be granted by it under the SecurityDocuments and, in the case of each Subsidiary Guarantor, the Guaranteeing ofthe Obligations as contemplated by the Guarantee and Collateral Agreement, andthat such resolutions have not been modified, rescinded or amended and are infull force and effect, (C) that the certificate or articles ofincorporation or other formation documents of such Loan Party have not beenamended since the date of the last amendment thereto shown on the certificateof good standing furnished pursuant to clause (i) above and (D) asto the incumbency and specimen signature of each officer executing any LoanDocument or any other document delivered in connection herewith on behalf ofsuch Loan Party; (iii) a certificate of another officer as to theincumbency and specimen signature of the Secretary or Assistant Secretaryexecuting the certificate pursuant to (ii) above; and (iv) suchother documents as the Administrative Agent, the Arranger, the Issuing Bank orthe Lenders may reasonably request.

 

(c)                                  TheAdministrative Agent shall have received a certificate, dated the Closing Dateand signed by a Financial Officer of the Borrower, confirming compliance withthe conditions precedent set forth in paragraphs (b) and (c) ofSection 4.01.

 

(d)                                 TheAdministrative Agent shall have received (i) this Agreement, executed anddelivered by a duly authorized officer of each of Holdings and the Borrower, (ii) theGuarantee and Collateral Agreement, executed and delivered by a duly authorizedofficer of each of Holdings and the Borrower and each Subsidiary Guarantor, (iii) a Mortgage covering each of the MortgagedProperties (other than the Post Closing Mortgaged Property), executed anddelivered 

 

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by a dulyauthorized officer of each Loan Party thereto, (iv) the IntellectualProperty Security Agreements, executed and delivered by a duly authorizedofficer of each Loan Party a party thereto, (v) if requested by any Lenderpursuant to Section 2.04, a promissory note or notes conforming tothe requirements of such Section and executed and delivered by a dulyauthorized officer of the Borrower and (vi) a Lender Addendum executed anddelivered by each Lender and accepted by the Borrower.

 

(e)                                  TheCollateral Agent, for the ratable benefit of the Secured Parties, shall havebeen granted on the Closing Date first priority perfected Liens on theCollateral (subject, in the case of all Collateral other than PledgedCollateral, only to Liens expressly permitted by Section 6.02 and,in the case of Pledged Collateral, only to Liens expressly permitted by clauses(b) or (d) of Section 6.02) and customaryGuarantees from the Subsidiary Guarantors. The Pledged Collateral shall havebeen duly and validly pledged under the Guarantee and Collateral Agreement tothe Collateral Agent, for the ratable benefit of the Secured Parties, andcertificates representing such Pledged Collateral, accompanied by instrumentsof transfer and stock powers endorsed in blank, shall be in the actualpossession of the Collateral Agent. With respect to the Mortgaged Property, theCollateral Agent shall have received such reports, documents and agreements(including title insurance, flood insurance and surveys) as the CollateralAgent shall reasonably request and that are customarily delivered in connectionwith security interests in real property.

 

(f)                                    TheCollateral Agent shall have received a duly executed Perfection Certificatedated on or prior to the Closing Date. The Collateral Agent shall have receivedthe results of a recent Lien and judgment search in each relevant jurisdictionwith respect to Holdings, the Borrower and those of the Subsidiaries that shallbe Subsidiary Guarantors or shall otherwise have assets that are included inthe Collateral, and such search shall reveal no Liens on any of the assets ofHoldings, the Borrower or any of such Subsidiaries except, in the case ofCollateral other than Pledged Collateral, for Liens expressly permitted by Section 6.02and except for Liens to be discharged on or prior to the Closing Date pursuantto documentation reasonably satisfactory to the Collateral Agent.

 

(g)                                 TheAcquisition and the Acquisition Transactions shall be consummatedsimultaneously with the initial funding of the Loans hereunder in accordancewith applicable law; the Purchase Agreement and all other related documentationshall be reasonably satisfactory to the Administrative Agent; the EquityContribution shall have been made on terms reasonably acceptable to theAdministrative Agent; the Administrative Agent shall be satisfied with thecapitalization, structure and equity ownership of Holdings and the Borrowerafter giving effect to the Transactions; and the Administrative Agent shall bereasonably satisfied with the arrangements to retain the senior management team(it being agreed that the final execution copy of the Purchase Agreement, datedas of the date of the Commitment Letter, is acceptable).

 

(h)                                 TheBorrower shall have received not less than $125,000,000 in gross cash proceedsfrom the issuance of the Subordinated Notes in a public offering or in a Rule 144Aor other private placement. The terms and conditions of the Subordinated Notes(including but not limited to terms and conditions relating to the interestrate, fees, 

 

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amortization, maturity, subordination,covenants, events of default and remedies) shall be reasonably satisfactory inall respects to the Administrative Agent.

 

(i)                                     Aftergiving effect to the Transactions and the other transactions contemplatedhereby, Holdings and its subsidiaries shall have outstanding no Indebtedness orpreferred stock other than (i) the Loans and other extensions of credithereunder, (ii) the Subordinated Notes and (iii) other Indebtednessto be agreed upon by the Borrower and the Administrative Agent. The Borrower (A) shallhave redeemed, defeased or otherwise acquired or retired all of its outstanding10.875% Senior Subordinated Notes due 2008 on terms reasonably satisfactory tothe Administrative Agent and (B) shall have repaid all amounts outstandingunder the Existing Credit Facility. The Administrative Agent shall havereceived satisfactory evidence that (i) the Existing Credit Facility shallhave been terminated, all amounts then due and payable or to become due andpayable (other than indemnification obligations not yet having been requested)thereunder shall have been paid in full and all commitments and reimbursementobligations thereunder shall have been terminated and (ii) satisfactoryarrangements shall have been made for the termination of all Liens granted inconnection therewith, in each case on terms and conditions reasonablysatisfactory to the Administrative Agent.

 

(j)                                     TheAdministrative Agent shall have received (i) the financial statementsdescribed in Section 3.05 and (ii) U.S. GAAP unauditedconsolidated balance sheets and related statements of income, stockholders’equity and cash flows of the Borrower for (A) eachsubsequent fiscal quarter ended 30 days before the Closing Date and (B) eachfiscal month after the most recent 2004 fiscal quarter for which financialstatements were received by the Administrative Agent as described above andended 30 days before the Closing Date.

 

(k)                                  TheAdministrative Agent shall be satisfied that the Borrower’s proformaConsolidated EBITDA for the four-fiscal quarter period most recently endedprior to the Closing Date (prepared in accordance with Regulation S-X under theSecurities Act of 1933, as amended, to give proforma effect tothe Transactions as if they had occurred at the beginning of such four-fiscalquarter period, together with such other adjustments as shall be reasonablysatisfactory to the Administrative Agent in an amount not to exceed $2,100,000)(such proforma Consolidated EBITDA, “Pro Forma EBITDA”)shall not be less than $35,000,000.

 

(l)                                     TheAdministrative Agent shall be satisfied (i) that the Borrower’s ratio ofSenior Secured Debt on the Closing Date to Pro Forma EBITDA shall be no morethan 3.1 to 1.0 and (ii)that the Borrower’s ratio ofFunded Debt on the Closing Date to Pro Forma EBITDA shall be no more than 6.50to 1.0.

 

(m)                               TheAdministrative Agent shall have received projections of Holdings and itssubsidiaries for the years 2004 through 2010 and for the quarters beginningwith the first fiscal quarter of 2004 and through the fourth fiscal quarter of2004, in form and substance satisfactory to the Administrative Agent.

 

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(n)                                 TheAdministrative Agent shall have received a certificate from the chief financialofficer of Holdings certifying that Holdings, the Borrower and each of theSubsidiary Guarantors, after giving effect to the Transactions and the othertransactions contemplated hereby, are solvent.

 

(o)                                 Allmaterial governmental and third party consents and approvals with respect tothe Transactions and the other transactions contemplated hereby to the extentrequired shall have been obtained, all applicable appeal periods shall haveexpired and there shall be no litigation, governmental, administrative orjudicial action, actual or threatened, that could reasonably be expected torestrain, prevent or impose materially burdensome conditions on theTransactions or the other transactions contemplated hereby.

 

(p)                                 TheAdministrative Agent shall have received all documentation and otherinformation required by bank regulatory authorities under applicable “know yourcustomer” and anti-money laundering rules and regulations, including theU.S.A. Patriot Act.

 

SECTION 4.03. Amendment EffectiveDate. The obligations of the Lenders, the Issuing Bank and theAdministrative Agent under this Agreement shall become effective upon thesatisfaction of the following conditions:

 

(a)                                  TheAdministrative Agent shall have received a favorable written opinion dated asof the Amendment Effective Date of Mayer, Brown, Rowe & Maw LLP,special counsel for the Loan Parties, in form and substance reasonablysatisfactory to the Administrative Agent, and Holdings, the Borrower and theSubsidiaries hereby request such counsel to deliver such opinion.

 

(b)                                 TheAdministrative Agent shall have received (i) a copy of the certificate orarticles of incorporation or other formation documents, including allamendments thereto, of each Loan Party, certified as of a recent date by theSecretary of State of the state of its organization, and a certificate as tothe good standing of each Loan Party as of a recent date, from such Secretaryof State; (ii) a certificate of the Secretary or Assistant Secretary ofeach Loan Party dated the Amendment Effective Date and certifying (A) thatattached thereto is a true and complete copy of the by-laws of such Loan Partyas in effect on the Amendment Effective Date, (B) in the case of theBorrower, that attached thereto is a true and complete copy of resolutions dulyadopted by the Board of Directors of the Borrower authorizing the execution,delivery and performance of the Loan Documents to which it is a party, theborrowings hereunder, and that such resolutions have not been modified,rescinded or amended and are in full force and effect, (C) that thecertificate or articles of incorporation or other formation documents of theBorrower have not been amended since the date of the last amendment theretoshown on the certificate of good standing furnished pursuant to clause (i) aboveand (D) as to the incumbency and specimen signature of each officer of theBorrower executing any Loan Document or any other document delivered inconnection herewith on behalf of the Borrower; (iii) a certificate ofanother officer as to the incumbency and specimen 

 

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signature of the Secretary or AssistantSecretary of the Borrower executing the certificate pursuant to (ii) above.

 

(c)                                  TheAdministrative Agent shall have received a certificate, dated the AmendmentEffective Date and signed by a Financial Officer of the Borrower, confirmingcompliance with the conditions precedent set forth in paragraphs (b) and(c) of Section 4.01.

 

(d)                                 TheAdministrative Agent shall have received (i) this Agreement, executed anddelivered by a duly authorized officer of each of Holdings and the Borrower and(ii) an Affirmation and Consent to the Guarantee and Collateral Agreement,executed and delivered by a duly authorized officer of each of Holdings, theBorrower and each Subsidiary Guarantor.

 

SECTION 4.04. Funding Date. Onthe Funding Date:

 

(a)                                  TheProposed Domestic Acquisition shall be consummated simultaneously with the fundingof the Additional Term Loans in accordance with applicable law; alldocumentation related to the Proposed Domestic Acquisition shall be reasonablysatisfactory to the Administrative Agent; and the Administrative Agent shall besatisfied with the capitalization, structure and equity ownership of Holdingsand the Borrower after giving effect to the Transactions.

 

(b)                                 TheAdministrative Agent shall have received a proforma consolidatedbalance sheet and related proforma consolidated statements ofincome and cash flows of the Borrower as of and for the twelve-month periodending on the last day of the most recently completed four-fiscal quarterperiod, prepared after giving effect to the Proposed Domestic Acquisition as ifsuch acquisition had occurred as of such date (in the case of such balancesheet) or at the beginning of such period (in the case of such other financialstatements), which financial statements shall not be materially inconsistentwith the forecasts previously provided to the Administrative Agent.

 

(c)                                  TheAdministrative Agent shall have received a duly executed and deliverednotarized modification to each existing Mortgage in form and substancesatisfactory to the Administrative Agent and, with respect to each such mortgage modification, endorsements tothe title insurance policy insuring the Mortgage being so modified in form andsubstance reasonably acceptable to the Administrative Agent.

 

(d)                                 Allmaterial governmental and third party consents and approvals with respect tothe Proposed Domestic Acquisition and the other transactions contemplatedthereby to the extent required shall have been obtained, all applicable appealperiods shall have expired and there shall be no litigation, governmental,administrative or judicial action, actual or threatened, that could reasonablybe expected to restrain, prevent or impose materially burdensome conditions onthe Proposed Domestic Acquisition or the other transactions contemplatedthereby.

 

(e)                                  CreditSuisse shall have received all fees required to be paid on or before theFunding Date pursuant to the Amendment Fee Letter and the Administrative Agent 

 

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shall have been reimbursed by the Borrowerfor its reasonable out-of-pocket expenses, as set forth in the Amendment FeeLetter, in connection with this Agreement, including the reasonable fees anddisbursements of counsel.

 

ARTICLE V

 

AffirmativeCovenants 

 

Each of Holdings and the Borrower covenantsand agrees with each Lender that so long as this Agreement shall remain ineffect and until the Commitments have been terminated and the principal of andinterest on each Loan, all Fees and all other expenses or amounts payable underany Loan Document shall have been paid in full and all Letters of Credit havebeen canceled or have expired and all amounts drawn thereunder have beenreimbursed in full, each of Holdings and the Borrower will, and will cause eachof the Subsidiaries to:

 

SECTION 5.01. Existence; Businessesand Properties. (a)  Do or cause to be done all things necessary topreserve, renew and keep in full force and effect its legal existence, exceptas otherwise expressly permitted under Section 6.05.

 

(b)                                 Do or cause to be doneall things necessary to obtain, preserve, renew, extend and keep in full forceand effect the rights, licenses, permits, franchises, authorizations, patents,copyrights, trademarks and trade names material to the conduct of its business;maintain and operate such business in substantially the manner in which it ispresently conducted and operated; comply in all material respects with allapplicable laws, rules, regulations and decrees and orders of any GovernmentalAuthority, whether now in effect or hereafter enacted; and at all timesmaintain and preserve all property material to the conduct of such business andkeep such property in good repair, working order and condition and from time totime make, or cause to be made, all needful and proper repairs, renewals,additions, improvements and replacements thereto necessary in order that thebusiness carried on in connection therewith may be properly conducted atall times.

 

SECTION 5.02. Insurance. Keep itsinsurable properties adequately insured at all times by financially sound andreputable insurers; maintain such other insurance, to such extent and againstsuch risks (and with such deductibles, retentions and exclusions) as iscustomary with companies in the same or similar businesses operating in thesame or similar locations, including liability insurance against claims forpersonal injury or death or property damage occurring upon, in, about or inconnection with the use of any properties owned, occupied or controlled by it;maintain such other insurance as may be required by law; and maintain suchother insurance as otherwise required by the Security Documents.

 

SECTION 5.03. Obligations and Taxes.Pay its Material Indebtedness promptly and in accordance with their terms andpay and discharge promptly when due all material taxes, assessments andgovernmental charges or levies imposed upon it or upon its income or profits orin respect of its property, before the same shall become delinquent or indefault, as well as all lawful claims for labor, materials and supplies orotherwise that, if unpaid, could reasonably be expected to give rise to a Lienupon such properties or any part thereof; provided, however,that such payment and discharge shall not be required with respect to any suchtax, assessment, 

 

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charge, levy or claim so long as the validity or amount thereof shallbe contested in good faith by appropriate proceedings and the Borrower or theapplicable Subsidiary shall have set aside on its books adequate reserves withrespect thereto in accordance with GAAP and such contest operates to suspendcollection of the contested obligation, tax, assessment or charge andenforcement of a Lien and, in the case of a Mortgaged Property, there is noreasonable risk of forfeiture of such property.

 

SECTION 5.04. Financial Statements,Reports, etc. In the case of the Borrower, furnish to the AdministrativeAgent for distribution to each Lender:

 

(a)                                  within90 days after the end of each fiscal year (beginning with the fiscal yearending on December 31, 2004), its consolidated balance sheet and relatedstatements of income, stockholders’ equity and cash flows showing the financialcondition of the Borrower and its consolidated Subsidiaries as of the close ofsuch fiscal year and the results of its operations and the operations of suchSubsidiaries during such year, together with comparative figures for theimmediately preceding fiscal year, all audited by KPMG LLP or other independentpublic accountants of recognized national standing and accompanied by anopinion of such accountants (which shall not be qualified in any materialrespect) to the effect that such consolidated financial statements fairlypresent the financial condition and results of operations of the Borrower andits consolidated Subsidiaries on a consolidated basis in accordance with GAAPconsistently applied;

 

(b)                                 within45 days after the end of each of the first three fiscal quarters of each fiscalyear, its consolidated balance sheet and related statements of income,stockholders’ equity and cash flows showing the financial condition of theBorrower and its consolidated Subsidiaries as of the close of such fiscalquarter and the results of its operations and the operations of suchSubsidiaries during such fiscal quarter and the then elapsed portion of the fiscalyear, and comparative figures for the same periods in the immediately precedingfiscal year, all certified by one of its Financial Officers as fairlypresenting the financial condition and results of operations of the Borrowerand its consolidated Subsidiaries on a consolidated basis in accordance withGAAP consistently applied, subject to normal year-end audit adjustments and theabsence of footnotes;

 

(c)                                  (i) concurrentlywith any delivery of financial statements under paragraph(a) above, a letter from the accounting firmopining on such statements (which letter may be limited to accountingmatters or other items that independent certified public accountants arepermitted to cover in such letters pursuant to their professional standards andcustoms and may disclaim responsibility for legal interpretations) statingwhether, in connection with their audit examination, anything has come to theirattention which would cause them to believe that there has been a violation ofany of the provisions of Section 6.10, 6.11, 6.12 or 6.13of this Agreement or, if any such a violation has occurred, specifying thenature thereof; provided that no such letter shall be required to theextent that (x) it is prohibited at such time by the then currentrecommendations of the American Institute of Certified Public Accountants orany other applicable accounting governing body or (y) such accounting firm hasat such time a firm-wide policy prohibiting the delivery of such a letter andsuch firm does not at such time provide such letters in connection with anyother credit agreements, (ii) concurrently with any delivery 

 

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of financial statements under paragraph (a) above,a certificate of a Financial Officer of the Borrower identifying the assetstransferred to the Foreign Target during such fiscal year and setting forth theBorrower’s election pursuant to paragraph (b)(i)(II)(b)(i) of Section 6.05and (iii) concurrently with any delivery of financial statements under paragraph(a) or (b) above, a certificate of a Financial Officer ofthe Borrower (A) certifying that no Event of Default or Default hasoccurred or, if such an Event of Default or Default has occurred, specifyingthe nature and extent thereof and any corrective action taken or proposed to betaken with respect thereto and (B) setting forth computations inreasonable detail satisfactory to the Administrative Agent demonstratingcompliance with the covenants contained in Sections 6.11, 6.12and 6.13 and, in the case of a certificate delivered with the financialstatements required by paragraph (a) above with respect to thefiscal year ending December 31, 2005 and each fiscal year thereafter,setting forth the Borrower’s calculation of Excess Cash Flow;

 

(d)                                 atleast 90 days after the end of each fiscal year of the Borrower, a detailedconsolidated budget for the following fiscal year (including a projectedconsolidated balance sheet and related statements of projected operations andcash flows as of the end of and for such following fiscal year and settingforth the assumptions used for purposes of preparing such budget) and, promptlywhen available, any significant revisions of such budget;

 

(e)                                  promptlyafter the same become publicly available, copies of all periodic and otherreports, proxy statements and other materials filed by Holdings, the Borroweror any Subsidiary with the Securities and Exchange Commission, or anyGovernmental Authority succeeding to any or all of the functions of saidCommission;

 

(f)                                    promptlyafter the receipt thereof by Holdings, the Borrower or any of the Subsidiaries,a copy of any “management letter” (in final form) received by any such personfrom its certified public accountants and the management’s response thereto;and

 

(g)                                 promptly,from time to time, such other information regarding the operations, businessaffairs and financial condition of Holdings, the Borrower or any Subsidiary, orcompliance with the terms of any Loan Document, as the Administrative Agent orany Lender (acting through the Administrative Agent) may reasonablyrequest.

 

SECTION 5.05.Litigation and Other Notices. Furnish to the Administrative Agent, theIssuing Bank and each Lender written notice of the following promptly after anyResponsible Officer obtains knowledge thereof:

 

(a)                                  anyEvent of Default or Default, specifying the nature and extent thereof and thecorrective action (if any) taken or proposed to be taken with respect thereto;

 

(b)                                 thefiling or commencement of, or any threat or notice of intention of any personto file or commence, any action, suit or proceeding, whether at law or inequity or by or before any arbitrator or Governmental Authority, againstHoldings, the Borrower or any Subsidiary that involves, in the Borrower’s goodfaith judgment, a reasonable 

 

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possibility of an adverse determination andwhich, if adversely determined, could reasonably be expected to result in aMaterial Adverse Effect; and

 

(c)                                  theoccurrence of any ERISA Event described in clause (b) of thedefinition thereof or any other ERISA Event that, alone or together with anyother ERISA Events that have occurred, could reasonably be expected to resultin liability of Holdings, the Borrower and the Subsidiaries in an aggregate amountof $5,000,000 or greater; and

 

(d)                                 anydevelopment that has resulted in, or could reasonably be expected to result in,a Material Adverse Effect.

 

SECTION 5.06. Information RegardingCollateral. (a)  Furnish to each of the Administrative Agent and theCollateral Agent (i) prompt written notice of any change (A) in anyLoan Party’s corporate name, (B) in any Loan Party’s corporate structureor (C) in any Loan Party’s Federal Taxpayer Identification Number and (ii) onthe date of delivery of financial statements and certificates required by Section 5.04(a),written notice of any change, if any, in the location of Collateral with a fairmarket value (as determined by the Borrower) in excess of $1,000,000. Each ofHoldings and the Borrower agrees not to effect or permit any change referred toin the preceding sentence unless all filings have been made (or will have beenmade within 30 days of such change) under the UCC or otherwise and all otheractions have been taken (or will have been taken within 30 days of such change)that are required in order for the Collateral Agent to continue at all timesfollowing such change to have a valid, legal and perfected security interest inall the Collateral. Each of Holdings and the Borrower also agrees promptly tonotify each of the Administrative Agent and the Collateral Agent if anymaterial portion of the Collateral is damaged or destroyed.

 

(b)                                 In the case of theBorrower, each year, unless otherwise agreed by the Administrative Agent toextend such time, at the time of delivery of the annual financial statementswith respect to the preceding fiscal year pursuant to Section 5.04(a),deliver to the Administrative Agent a certificate of a Financial Officersetting forth the information required pursuant to Section I of thePerfection Certificate.

 

SECTION 5.07. Maintaining Records;Access to Properties and Inspections. Keep proper books of record andaccount in which full, true and correct entries in conformity with GAAP and allrequirements of law are made of all dealings and transactions in relation toits business and activities. Each of Holdings and the Borrower will, and willcause each of its subsidiaries to, permit any representatives designated by theAdministrative Agent or any Lender to visit and inspect (including with respectto environmental matters) the financial records and the properties of Holdingsor the Borrower, as the case may be, or any of its subsidiaries atreasonable times (but, in the case of any Lenders, not more than one time eachyear for all Lenders and at such Lenders’ expense, unless an Event of Defaultis continuing) and to make extracts from and copies of such financial records,and permit any representatives designated by the Administrative Agent or anyLender (acting through the Administrative Agent) to discuss the affairs,finances and condition of Holdings or the Borrower, as the case may be, orany of its subsidiaries with the officers thereof and independent accountantstherefor; provided that the Borrower shall be given an opportunity tohave a designated representative present at any 

 

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discussions with such independent accountants if available at such timeand shall be given at least five Business Days’ notice of such discussions.

 

SECTION 5.08. Use of Proceeds. Usethe proceeds of the Loans and request the issuance of Letters of Credit onlyfor the purposes set forth in Section 3.13.

 

SECTION 5.09. Additional Collateral,etc. (a)  With respect to any Collateral acquired after the ClosingDate or, in the case of inventory or equipment, any material Collateral movedafter the Closing Date by the Borrower or any other Loan Party (other than anyCollateral described in paragraphs (b), (c) or (d) ofthis Section) as to which the Collateral Agent, for the benefit of the SecuredParties, does not as a result of such acquisition or move have a first priorityperfected security interest (subject to Liens expressly permitted by Section 6.02),promptly (and, in any event, within 20 days following the date of suchacquisition) (i) execute and deliver to the Administrative Agent and theCollateral Agent such amendments to the Guarantee and Collateral Agreement orsuch other Security Documents as the Collateral Agent deems necessary oradvisable to grant to the Collateral Agent, for the benefit of the SecuredParties, a security interest in such Collateral and (ii) promptlyfollowing the Administrative Agent’s or the Collateral Agent’s request, takeall actions necessary or advisable to grant to, or continue on behalf of, theCollateral Agent, for the benefit of the Secured Parties, a perfected firstpriority security interest (subject to Liens expressly permitted by Section 6.02)in such Collateral, including the filing of UCC financing statements in suchjurisdictions as may be required by the Guarantee and Collateral Agreementor by law or as may be requested by the Administrative Agent or theCollateral Agent.

 

(b)                                 With respect to any(x) fee interest in any Collateral consisting of material Real Property (asdetermined by Administrative Agent and (y) lease of Collateral consisting ofReal Property with an annual base rent in excess of $2,500,000 after theexpiration of any rent abatement or free rent period, acquired or leased afterthe Closing Date by the Borrower or any other Loan Party and promptly (and, inany event, within 20 days following the date of such acquisition, in the caseof clause (x)) (i) execute and deliver or, in the case of clause(y), use commercially reasonable efforts to execute and deliver, a firstpriority (subject to Liens expressly permitted by Section 6.02)Mortgage in favor of the Collateral Agent, for the benefit of the SecuredParties, covering such Real Property and complying with the provisions hereinand in the Security Documents, (ii) provide or, in the case of clause(y), use commercially reasonable efforts to provide, the Secured Partieswith title and extended coverage insurance in an amount at least equal to thepurchase price of such Real Property (or such other amount as theAdministrative Agent shall reasonably specify), surveys, and if applicable,flood insurance, lease estoppel certificates or, in the event that theAdministrative Agent has determined that a recorded memorandum of lease or anamendment of lease is necessary or appropriate in order to make any such leasedReal Property mortgageable, evidence of such recordation or a copy of suchfully executed and binding lease amendment, all as may be reasonablyrequested by the Administrative Agent, (iii) if requested by theAdministrative Agent, deliver to the Administrative Agent and the CollateralAgent legal opinions relating to the matters described above, which opinionsshall be in form and substance, and from counsel, reasonably satisfactoryto the Administrative Agent and the Collateral Agent and (iv) deliver tothe Administrative Agent a notice identifying, and upon the AdministrativeAgent’s request and subject to any contractual restrictions contained therein,provide a copy of, the consultant’s reports, 

 

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environmental site assessments or other documents relied upon by theBorrower or any other Loan Party to determine that any such Real Propertyincluded in such Collateral does not contain Hazardous Materials of a form ortype or in a quantity or location that could reasonably be expected to resultin a material Environmental Liability. Holdings or the Borrower shall usecommercially reasonable efforts to deliver to the Administrative Agent estoppelcertificates from the landlord with respect to each leased Mortgaged Property,confirming the nonexistence of any default thereunder and certain otherinformation with respect to such lease, each of the foregoing in form andsubstance reasonably satisfactory to the Administrative Agent and theCollateral Agent.

 

(c)                                  With respect to anySubsidiary (other than an Excluded Foreign Subsidiary or a ReceivablesSubsidiary) created or acquired after the Closing Date (which, for the purposesof this paragraph, shall include any existing Subsidiary that ceases to be anExcluded Foreign Subsidiary at any time after the Closing Date) by the Borroweror any of the Subsidiaries, promptly (and, in any event, within 20 daysfollowing such creation or the date of such acquisition) (i) execute anddeliver to the Administrative Agent and the Collateral Agent such amendments orsupplements to the Guarantee and Collateral Agreement as the AdministrativeAgent or the Collateral Agent deems necessary or advisable to grant to the CollateralAgent, for the benefit of the Secured Parties, a valid, perfected firstpriority security interest (subject to Liens expressly permitted by clauses (b) or(d) of Section 6.02) in the Equity Interests in suchnew Subsidiary that are owned by the Borrower or any of the Subsidiaries, (ii) deliverto the Collateral Agent the certificates, if any, representing such EquityInterests, together with undated stock powers, in blank, executed and deliveredby a duly authorized officer of the Borrower or such Subsidiary, as the case may be,(iii) cause such new Subsidiary (A) to become a party to theGuarantee and Collateral Agreement (and provide Guarantees of the Obligations)and the Intellectual Property Security Agreements and (B) to take suchactions necessary or advisable to grant to the Collateral Agent, for thebenefit of the Secured Parties, a perfected first priority security interest(subject to Liens expressly permitted by Section 6.02) in theCollateral described in the Guarantee and Collateral Agreement and theIntellectual Property Security Agreement with respect to such new Subsidiary,including the recording of instruments in the United States Patent andTrademark Office and the United States Copyright Office and the filing of UCCfinancing statements in such jurisdictions as may be required by theGuarantee and Collateral Agreement, the Intellectual Property SecurityAgreement or by law or as may be requested by the Administrative Agent orthe Collateral Agent and (iv) if requested by the Administrative Agent,deliver to the Administrative Agent and the Collateral Agent legal opinionsrelating to the matters described above, which opinions shall be in form andsubstance, and from counsel, reasonably satisfactory to the AdministrativeAgent and the Collateral Agent.

 

(d)                                 With respect to anyExcluded Foreign Subsidiary created or acquired after the Closing Date directlyby the Borrower or any of its Domestic Subsidiaries, promptly (and, in anyevent, within 60 days following such creation or the date of such acquisition) (i) executeand deliver to the Administrative Agent and the Collateral Agent suchamendments to the Guarantee and Collateral Agreement as the AdministrativeAgent or the Collateral Agent deems necessary or advisable in order to grant tothe Collateral Agent, for the benefit of the Secured Parties, a perfected firstpriority security interest (subject to Liens expressly permitted by clauses (b) or(d) of Section 6.02) in the Equity Interests in suchnew Excluded Foreign Subsidiary that is directly owned by the Borrower or anyof its Domestic Subsidiaries (provided that in no event shall more 

 

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than 65% of the total outstanding voting Equity Interests in any suchnew Excluded Foreign Subsidiary be required to be so pledged), (ii) deliverto the Collateral Agent the certificates (if applicable) representing suchEquity Interests, together with undated stock powers, in blank, executed anddelivered by a duly authorized officer of the Borrower or such DomesticSubsidiary, as the case may be, and take such other action as may benecessary or, in the opinion of the Administrative Agent or the CollateralAgent, desirable to perfect the security interest of the Collateral Agentthereon and (iii) if requested by the Administrative Agent, deliver to theAdministrative Agent and the Collateral Agent legal opinions relating to thematters described above, which opinions shall be in form and substance,and from counsel, reasonably satisfactory to the Administrative Agent and theCollateral Agent.

 

SECTION 5.10. Further Assurances.From time to time duly authorize, execute and deliver, or cause to be dulyauthorized, executed and delivered, such additional instruments, certificates,financing statements, agreements or documents, and take all such actions(including filing UCC and other financing statements), as the AdministrativeAgent or the Collateral Agent may reasonably request, for the purposes ofimplementing or effectuating the provisions of this Agreement and the otherLoan Documents, or of more fully perfecting or renewing the rights of theAdministrative Agent, the Collateral Agent and the Secured Parties with respectto the Collateral (or with respect to any additions thereto or replacements orproceeds or products thereof or with respect to any other property or assetshereafter acquired by Holdings, the Borrower or any Subsidiary which may bedeemed to be part of the Collateral) pursuant hereto or thereto. Upon theexercise by the Administrative Agent, the Collateral Agent or any Lender of anypower, right, privilege or remedy pursuant to this Agreement or the other LoanDocuments which requires any consent, approval, recording, qualification orauthorization of any Governmental Authority, each of Holdings and the Borrowerwill execute and deliver, or will cause the execution and delivery of, allapplications, certifications, instruments and other documents and papers thatthe Administrative Agent, the Collateral Agent or such Lender may be requiredto obtain from Holdings, the Borrower or any of the Subsidiaries for suchgovernmental consent, approval, recording, qualification or authorization.

 

SECTION 5.11. Interest RateProtection. The Borrowershall ensure that for at least three years following the Closing Date no lessthan 50% of the Borrower’s long-term Indebtedness (excluding any RevolvingLoans, Swingline Loans and Letters of Credit) effectively bears interest at afixed rate, either by its terms or through the Borrower entering into, aspromptly as practicable (and in any event no later than the 180th day after theClosing Date), Hedging Agreements reasonably acceptable to the AdministrativeAgent.

 

ARTICLE VI

 

NegativeCovenants 

 

Each of Holdings and the Borrower covenantsand agrees with each Lender that, so long as this Agreement shall remain ineffect and until the Commitments have been terminated and the principal of andinterest on each Loan, all Fees and all other expenses or amounts payable underany Loan Document have been paid in full and all Letters of Credit have beencancelled or have expired and all amounts drawn thereunder have been reimbursedin full, neither Holdings nor the Borrower will, nor will it cause or permitany of the Subsidiaries to:

 

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SECTION 6.01. Indebtedness.Incur, create, assume or permit to exist any Indebtedness, except:

 

(a)                                  Indebtednessexisting on the Closing Date and set forth in Schedule 6.01 and anyPermitted Refinancing Indebtedness in respect of any such Indebtedness;

 

(b)                                 Indebtednesscreated hereunder and under the other Loan Documents (including any IncrementalTerm Loans);

 

(c)                                  unsecuredintercompany Indebtedness of Holdings, the Borrower and the Subsidiaries to theextent permitted by Section 6.04(a) or Section 6.04(i) solong as such Indebtedness is subordinated to the Obligations pursuant to anAffiliate Subordination Agreement;

 

(d)                                 Indebtednessof the Borrower or any Subsidiary incurred to finance the acquisition,construction or improvement of any fixed or capital assets; providedthat (i) such original Indebtedness is incurred prior to or within 120days after such acquisition or the completion of such construction orimprovement and (ii) the aggregate principal amount of Indebtednesspermitted by this Section 6.01(d), when combined with the aggregateprincipal amount of all Capital Lease Obligations and Synthetic LeaseObligations incurred pursuant to Section 6.01(e), shall not exceed$25,000,000 at any time outstanding;

 

(e)                                  CapitalLease Obligations and Synthetic Lease Obligations in an aggregate principalamount, when combined with the aggregate principal amount of all Indebtednessincurred pursuant to Section 6.01(d), not exceeding $25,000,000 atany time outstanding;

 

(f)                                    Indebtednessof the Borrower under the Subordinated Notes and Indebtedness of the SubsidiaryGuarantors under any Guarantees in respect of the Subordinated Notes and anyPermitted Refinancing Indebtedness in respect of any such Indebtedness;

 

(g)                                 Indebtednessof any person that becomes a Subsidiary after the Closing Date hereof; providedthat (i) such Indebtedness exists at the time such person becomes aSubsidiary and is not created in contemplation of or in connection with suchperson becoming a Subsidiary, (ii) immediately before and after suchperson becomes a Subsidiary, no Default or Event of Default shall have occurredand be continuing and (iii) the aggregateprincipal amount of Indebtedness permitted by this Section 6.01(g) shallnot exceed $7,500,000 at any time outstanding;

 

(h)                                 unsecuredIndebtedness of the Borrower or the Subsidiary Guarantors that is subordinatedto the Obligations to the same degree (or to a greater degree) as theSubordinated Notes, in each case (i) that does not mature, and is notsubject to mandatory repurchase, redemption or amortization (other thanpursuant to customary asset sale or change of control provisions requiringredemption or repurchase only if and to the extent permitted by this Agreement)prior to the date that is six months after the Term Loan Maturity Date and (ii) thatis not exchangeable or convertible into Indebtedness of the 

 

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Borrower or any Subsidiary (other than otherIndebtedness permitted by this clause) or any preferred stock or other EquityInterest (other than common equity); provided that either (A) theNet Cash Proceeds thereof are used to refinance Term Loans or refinance andpermanently reduce commitments in respect of Revolving Loans or (B) theproceeds thereof are used to consummate a Permitted Acquisition or anInvestment permitted pursuant to Section 6.04(k) (includingfinancing the cash consideration payable in connection with a PermittedAcquisition or such an Investment or refinancing any Indebtedness of theAcquired Entity and the payment of related fees and expenses); provided,further, that the aggregate principal amount of Indebtedness permittedby clause (B) of this Section 6.01(h) shallnot exceed $5,000,000 at any time outstanding;

 

(i)                                     Indebtednessunder performance, surety, appeal or indemnity bonds or with respect to workers’compensation claims, in each case incurred in the ordinary course of business;

 

(j)                                     Indebtednessarising from the honoring by a bank or other financial institution of a check,draft or similar instrument inadvertently drawn against insufficient funds inthe ordinary course of business; provided that such Indebtedness ispromptly covered by the Borrower or any Subsidiary;

 

(k)                                  Indebtednessof a Receivables Subsidiary in respect of Securitization Transactions solely tothe extent the Net Cash Proceeds thereof are used to refinance Term Loans orrefinance and permanently reduce commitments in respect of Revolving Loans; providedthat the aggregate principal amount of Indebtedness permitted by this Section 6.01(k)shall not exceed $15,000,000 at any time outstanding;

 

(l)                                     Indebtednessincurred by Foreign Subsidiaries in an aggregate principal amount not exceeding$12,500,000 at any time outstanding;

 

(m)                               tothe extent constituting Indebtedness of the Borrower or any Subsidiary,customary indemnification or deferred purchase price adjustments, includingwholly contingent earn-outs or similar obligations, in each case incurred inconnection with the acquisition of any business or assets, including EquityInterests, permitted to be acquired hereunder; provided that the maximumaggregate liability in respect of all such obligations permitted by this clause(m) shall not exceed 25% of the purchase price for such acquisitions;

 

(n)                                 PermittedHoldings Indebtedness; and

 

(o)                                 otherIndebtedness (including subordinated Indebtedness) of the Borrower or theSubsidiaries in an aggregate principal amount not exceeding $20,000,000 at anytime outstanding; provided that the aggregate principal amount of suchIndebtedness permitted by this Section 6.01(o) that is incurred bya Loan Party that is secured shall not exceed $2,000,000 at any timeoutstanding.

 

SECTION 6.02. Liens. Create,incur, assume or permit to exist any Lien on any property or assets (includingEquity Interests or other securities of any person, including any 

 

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Subsidiary) now owned or hereafter acquired by it or on any income orrevenues or rights in respect of any thereof, except:

 

(a)                                  Lienson property or assets of the Borrower and the Subsidiaries existing on theClosing Date and set forth in Schedule 6.02; provided thatsuch Liens shall secure only those obligations which they secure on the ClosingDate and refinancings, extensions, renewals and replacements thereof permittedhereunder;

 

(b)                                 anyLien created under the Loan Documents (including in respect of HedgingAgreements that are permitted by the terms of the Security Documents to besecured thereunder);

 

(c)                                  anyLien existing on any property or asset prior to the acquisition thereof by theBorrower or any Subsidiary; provided that (i) such Lien is notcreated in contemplation of or in connection with such acquisition, (ii) suchLien does not apply to any other property or assets of the Borrower or anySubsidiary and (iii) such Lien does not materially interfere with the use,occupancy and operation of any Mortgaged Property;

 

(d)                                 Liensfor taxes not yet due or which are being contested in compliance with Section 5.03;

 

(e)                                  carriers’,warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liensarising in the ordinary course of business and securing obligations that arenot overdue for a period of more than 30 days or which are being contested incompliance with Section 5.03;

 

(f)                                    pledgesand deposits made in the ordinary course of business in compliance with workmen’scompensation, unemployment insurance and other social security laws orregulations;

 

(g)                                 pledgesand deposits to secure the performance of bids, trade contracts (other than forIndebtedness), leases (other than Capital Lease Obligations), statutoryobligations, surety and appeal bonds, performance bonds and other obligationsof a like nature incurred in the ordinary course of business;

 

(h)                                 zoningrestrictions, easements, rights-of-way, restrictions on use of Real Propertyand other similar encumbrances incurred in the ordinary course of businesswhich, in the aggregate, are not substantial in amount and do not materiallydetract from the value of the property subject thereto or interfere with theordinary conduct of the business of the Borrower or any of the Subsidiaries orthe ability of the Borrower or any of the Subsidiaries to utilize such propertyfor its intended purpose;

 

(i)                                     purchasemoney security interests in Real Property, improvements thereto or other fixedor capital assets hereafter acquired (or, in the case of improvements,constructed) by the Borrower or any Subsidiary; provided that (i) suchsecurity interests secure Indebtedness permitted by Section 6.01, (ii) suchsecurity interests are incurred, and the Indebtedness secured thereby iscreated, within 90 days after such acquisition (or 

 

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construction) and (iii) such securityinterests do not apply to any other property or assets of the Borrower or anySubsidiary;

 

(j)                                     judgmentLiens securing judgments not constituting an Event of Default under Article VII;

 

(k)                                  anyinterest or title of a lessor, sublessor or licensor under any lease (includinga capital lease or synthetic lease) or license entered into by the Borrower orany of its Subsidiaries in the ordinary course of business and covering onlythe assets so leased or licensed, as the case may be, and including anyLiens arising from precautionary UCC financing statements filed under any suchlease;

 

(l)                                     Lienson cash deposits and other funds maintained with a depositary institution, ineach case arising in the ordinary course of business by virtue of any statutoryor common law provision relating to banker’s liens, including Section 4-210of the UCC;

 

(m)                               Liensof sellers of goods to the Borrower or any of the Subsidiaries arising under Section 2-502of the UCC in the ordinary course of business; provided that such Liensapply only to the goods sold and secure only the unpaid purchase price for suchgoods and related expenses;

 

(n)                                 Liensin favor of customs and revenue authorities arising as a matter of law andsecuring payment of customs duties in connection with the importation of goods;

 

(o)                                 Liensarising from an agreement by the Borrower or any of the Subsidiaries to Disposeof any asset in accordance with the provisions hereof; provided thatsuch Liens apply only to the assets to be Disposed of;

 

(p)                                 Liensin connection with Securitization Transactions permitted by Section 6.01(k)on the assets that are the subject of such Securitization Transactions; providedthat such Liens apply only to assets in respect of which security interests arecustomarily granted in connection with asset securitization transactionsinvolving accounts receivable;

 

(q)                                                                                      Lienson assets owned or leased by the Foreign Target securing not more than$12,500,000 of Indebtedness at any time outstanding; and

 

(r)                                    Liensnot otherwise permitted by this Section 6.02 so long as neither (i) theaggregate outstanding principal amount of the obligations secured thereby nor (ii) theaggregate fair market value of the assets subject thereto exceeds $2,000,000 atany one time.

 

SECTION 6.03. Sale and Lease-BackTransactions. Enter into any arrangement, directly or indirectly, with anyperson whereby it shall sell or transfer any property, real or personal ormixed, used or useful in its business, whether now owned or hereafter acquired,and thereafter rent or lease such property or other property which it intendsto use for substantially the same purpose or purposes as the property beingsold or transferred unless (a) the sale of such property 

 

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is permitted by Section 6.05 and (b) any Capital LeaseObligations, Synthetic Lease Obligations or Liens arising in connectiontherewith are permitted by Sections 6.01 and 6.02, respectively.

 

SECTION 6.04. Investments, Loans andAdvances. Purchase, hold or acquire any Equity Interests, evidences ofindebtedness or other securities of, make or permit to exist any loans oradvances or capital contributions to, or make or permit to exist any investmentor any other interest in, any other person (all of the foregoing, “Investments”),except:

 

(a)                                  (i) Investmentsby Holdings, the Borrower and the Subsidiaries existing on the Closing Date inthe Equity Interests of, or in the form of loans or advances to, theBorrower and the Subsidiaries and (ii) additional Investments by Holdings,the Borrower and the Subsidiaries in the Equity Interests of, or in the form ofloans or advances to, the Borrower and the Subsidiaries; provided that (A) anysuch Equity Interests held by a Loan Party shall be pledged pursuant to theGuarantee and Collateral Agreement (subject to the limitation referred to in Section 5.09(d) inthe case of any Excluded Foreign Subsidiary), (B) in the case of clause(ii), the aggregate amount of additional Investments by Loan Parties inSubsidiaries that are not Subsidiary Guarantors (including the Foreign Target)shall not exceed $30,000,000 (unless otherwise reduced by the amount of AssetSales to the Foreign Target pursuant to Section 6.05(b)(i)) at anytime outstanding and (C) if such Investment shall be in the form of aloan or advance, such loan or advance shall be unsecured and subordinated tothe Obligations pursuant to an Affiliate Subordination Agreement and, if suchloan or advance shall be made by a Loan Party, it shall be evidenced by apromissory note pledged to the Collateral Agent for the ratable benefit of theSecured Parties pursuant to the Guarantee and Collateral Agreement (providedthat this clause (C) shall not apply to the loans and advances madeand to be made to Jineng pursuant to the commitments existing on the ClosingDate or to the Foreign Target);

 

(b)                                 PermittedInvestments;

 

(c)                                  Investmentsreceived in connection with the bankruptcy or reorganization of, or settlementof delinquent accounts and disputes with, customers and suppliers, in each casein the ordinary course of business;

 

(d)                                 theBorrower and the Subsidiaries may make loans and advances in the ordinarycourse of business to their respective employees so long as the aggregateprincipal amount thereof at any time outstanding (determined without regard toany write-downs or write-offs of such loans and advances) shall not exceed$2,000,000;

 

(e)                                  theAcquisition and Permitted Acquisitions;

 

(f)                                    Investmentsexisting on the Closing Date and set forth on Schedule 6.04;

 

(g)                                 extensionsof trade credit in the ordinary course of business;

 

(h)                                 Investmentsmade as a result of the receipt of non-cash consideration from a Disposition ofany asset in compliance with Section 6.05;

 

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(i)                                     intercompanyloans and advances to Holdings to the extent that the Borrower may paydividends to Holdings pursuant to Section 6.06 (and in lieu ofpaying such dividends); provided that such intercompany loans andadvances (i) shall be made for the purposes, and shall be subject to all theapplicable limitations set forth in, Section 6.06and (ii) shall be unsecured and subordinated to the Obligations pursuantto an Affiliate Subordination Agreement;

 

(j)                                     Investmentsmade by any person that becomes a Subsidiary after the Closing Date; providedthat (i) such Investments exist at the time such person becomes aSubsidiary and are not made in contemplation of or in connection with suchperson becoming a Subsidiary and (ii) at the time such person becomes aSubsidiary no portion of such Investments may represent a commitment orother obligation to make or fund any additional Investment that has not beenmade on funded at such time; and

 

(k)                                  inaddition to Investments permitted by paragraphs (a) through (j)above, additional Investments by the Borrower and the Subsidiaries so long asthe aggregate amount invested, loaned or advanced pursuant to this clause(determined without regard to any write-downs or write-offs of suchinvestments, loans and advances) does not exceed $15,000,000 in the aggregate.

 

SECTION 6.05. Mergers,Consolidations, Sales of Assets and Acquisitions. (a)  Merge into orconsolidate with any other person, or permit any other person to merge into orconsolidate with it, or liquidate or dissolve, or Dispose of (in one transactionor in a series of transactions) all or substantially all the assets(whether now owned or hereafter acquired) of the Borrower or less than all theEquity Interests of any Subsidiary, or purchase, lease or otherwise acquire (inone transaction or a series of transactions) all or substantially all ofthe assets of any other person, except for (i) the purchase and sale bythe Borrower or any Subsidiary of inventory or the Disposition of obsolete orworn-out assets, assets that are no longer useful or scrap, in each case in theordinary course of business, (ii) the sale or discount by the Borrower orany Subsidiary, in each case without recourse and in the ordinary course ofbusiness, of overdue accounts receivable arising in the ordinary course ofbusiness, but only in connection with the compromise or collection thereofconsistent with customary industry practice (and not as part of any bulksale or financing transaction), (iii) sales of accounts receivable orinterests therein and other customary assets in Securitization Transactionspermitted under Section 6.01(k), (iv) the Disposition by anySubsidiary that is not a Loan Party of its assets that do not constituteCollateral in connection with a foreclosure by the applicable lenders withrespect to any Indebtedness of such Subsidiary to the extent that such assetsare collateral security for such Indebtedness, (v) the licensing ofintellectual property in the ordinary course of business, (vi) thesettlement, release or surrender of tort or other litigation claims and (vii) ifat the time thereof and immediately after giving effect thereto no Event ofDefault or Default shall have occurred and be continuing, (x) the merger orconsolidation of any wholly-owned Subsidiary into or with the Borrower in atransaction in which the Borrower is the surviving corporation, (y) the mergeror consolidation of any Subsidiary into or with any other Subsidiary in atransaction in which the surviving entity is a Subsidiary (provided that(A) the Borrower shall own, directly or indirectly, beneficially and ofrecord, Equity Interests representing a percentage of the 

 

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aggregate ordinary voting power and aggregate equity value representedby the issued and outstanding Equity Interest in such surviving Subsidiary thatis equal to or greater than the percentage of the aggregate ordinary votingpower and the aggregate equity value represented by the issued and outstandingEquity Interests that were owned immediately prior to such merger orconsolidation, directly or indirectly, beneficially and of record, by theBorrower in such other merged or consolidated Subsidiary, (B) if any partyto any such transaction is a Loan Party, the surviving entity of suchtransaction shall be a Loan Party, (C) if any party to any suchtransaction is a Domestic Subsidiary, the surviving entity of such transactionshall be a Domestic Subsidiary and (D) if anyperson other than the Borrower or a wholly-owned Subsidiary receives anyconsideration in connection with such transaction, such transaction shallcomply with the provisions of Section 6.04, if applicable) and (z)Permitted Acquisitions or other Investments by the Borrower or any Subsidiarythat are expressly permitted by Section 6.04.

 

(b)                                 Engage in any AssetSale otherwise permitted under paragraph (a) above unless

 

(i)                                     inthe case of other than Exempted Asset Sales, (A) such Asset Sale isfor consideration at least 75% of which is cash (and no portion of theremaining consideration shall be in the form of Indebtedness of theBorrower or any Subsidiary), (B) suchconsideration is at least equal to the fair market value of the assets beingDisposed of and (C) the fair market value of all assets Disposed ofpursuant to this paragraph (b)(i) shall not exceed

 

(I)                                    $2,000,000in any fiscal year, or

 

(II)                                (a) inthe case of other than the Foreign Target, $7,500,000 in the aggregate and (b) inthe case of the Foreign Target, in the aggregate, an amount equal to (i) atthe Borrower’s election (as set forth in a certificate delivered to theAdministrative Agent pursuant to Section 5.04(c)(ii)), either (x)the aggregate amount of Capital Expenditures permitted for the Foreign Targetpursuant to Section 6.10(b) or (y) the amount of Investmentsmade to the Foreign Target pursuant to Section 6.04(a) *minus* (ii) the fair market value (determined in goodfaith by the Borrower) of assets transferred to the Foreign Target; or

 

(ii)                                  suchAsset Sale is a Permitted Asset Swap; or

 

(iii)                               inthe case of Exempted Asset Sales, the aggregate cash consideration and thevalue (determined in good faith by the Borrower) of the non-cash considerationreceived does not exceed $5,000,000.

 

SECTION 6.06. Restricted Payments;Restrictive Agreements. (a)  Declare or make, or agree to declare ormake, directly or indirectly, any Restricted Payment (including pursuant to anySynthetic Purchase Agreement), or incur any obligation (contingent orotherwise) to do so; provided, however, that (i) anySubsidiary may declare and pay dividends or make other distributions,including in the form of additional Equity Interests, ratably to itsequity holders, (ii) so long as no Event ofDefault or Default shall have occurred and be continuing or would resulttherefrom, the Borrower may, or may pay dividends or make otherdistributions to Holdings so that Holdings may, repurchase its Equity Interestsowned by employees of Holdings, the Borrower or the Subsidiaries or makepayments to employees of Holdings, the Borrower or the Subsidiaries upontermination of employment in connection with the exercise of stock 

 

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options, stock appreciation rights or similar equity incentives orequity based incentives pursuant to management incentive plans or in connectionwith the death or disability of such employees or make customary and reasonablesalary and bonus and other benefits payments to officers, employees andconsultants of Holdings or payments of customary fees and expenses of membersof the board of directors of Holdings in an aggregate amount for this clause(ii) not to exceed $1,500,000 in any fiscal year (it being agreed thatany such amount not utilized in any fiscal year may be carried forward andutilized in any subsequent fiscal year so long as the aggregate amount of suchrepurchases or payments pursuant to this clause (ii) shall notexceed $3,000,000 in any fiscal year), (iii) the Borrower may makeRestricted Payments to Holdings (x) in an amount not to exceed, when takentogether with the aggregate amount of all loans or advances made pursuant to Section 6.04(i) forsuch purpose, $1,000,000 in any fiscal year to the extent necessary to paygeneral corporate and overhead expenses incurred by Holdings in the ordinarycourse of business and (y) in an amount necessary to pay the Tax liabilities ofHoldings directly attributable to (or arising as a result of) the operations ofthe Borrower and the Subsidiaries pursuant to the Tax Sharing Agreement, assuch agreement exists on the Closing Date and with such changes after theClosing Date as may be approved by the Administrative Agent; providedthat all Restricted Payments made to Holdings pursuant to clause (iii) shallbe used by Holdings for the purpose specified herein within 20 days of thereceipt thereof, (iv) so long as no Event of Default or Default shall haveoccurred and be continuing or would result therefrom, the Borrower may paydividends or make other distributions to Holdings so that Holdings may paythose fees, costs and expenses that are expressly permitted by clause (c) ofSection 6.07 and (v) so long as no Event of Default or Defaultshall have occurred and be continuing or would result therefrom, the Borrower may makeRestricted Payments to Holdings, and Holdings may, in turn, make such RestrictedPayments to its equity holders so long as (A) the Borrower would be incompliance with the covenants set forth in Sections 6.11 and 6.13and the Leverage Ratio would be 3.25 to 1.00 or less, in each case, as of themost recently completed period ending prior to such transaction for which thefinancial statements and certificates required by Section 5.04(a) or5.04(b) were required to be delivered or for which comparablefinancial statements have been filed with or furnished to the Securities andExchange Commission, after giving proforma effect to suchtransaction and to any other event occurring after such period as to which proforma recalculation is appropriate as if such transaction had occurredas of the first day of such period and (B) at the time of, after givingeffect to, such transaction, there shall be at least $7,500,000 of unused andavailable Revolving Credit Commitments.

 

(b)                                 Enter into, incur orpermit to exist any agreement or other arrangement that prohibits, restricts orimposes any condition upon (i) the ability of Holdings, the Borrower orany Subsidiary to create, incur or permit to exist any Lien upon any of itsproperty or assets, or (ii) the ability of any Subsidiary to pay dividendsor other distributions with respect to any of its Equity Interests or to makeor repay loans or advances to the Borrower or any other Subsidiary or toGuarantee Indebtedness of the Borrower or any other Subsidiary; providedthat (A) the foregoing shall not apply to restrictions and conditionsimposed by law or by any Loan Document, (B) the foregoing shall not applyto customary restrictions and conditions contained in agreements relating tothe sale of a Subsidiary or its assets pending such sale, provided suchrestrictions and conditions apply only to the Subsidiary or its assets that areto be sold and such sale is permitted hereunder, (C) the foregoing shallnot apply to restrictions and conditions imposed on any Subsidiary that is nota Loan Party by the terms of any Indebtedness of such Subsidiary permitted tobe incurred hereunder, (D) clause (i) of the foregoing shallnot apply to 

 

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restrictions or conditions imposed by any agreement relating to securedIndebtedness permitted by this Agreement if such restrictions or conditionsapply only to the property or assets securing such Indebtedness, (E) clause(i) of the foregoing shall not apply to restrictions or conditionsimposed by the Subordinated Note Documents as in effect on the Closing Date and(F) clause (i) of the foregoing shall not apply to customaryprovisions in leases and other contracts restricting the assignment thereof.

 

SECTION 6.07. Transactions withAffiliates. Except for transactions by or among Loan Parties ortransactions with the Foreign Target pursuant to Sections 6.01, 6.04,6.05 and 6.10, sell or transfer any property or assets to, orpurchase or acquire any property or assets from, or otherwise engage in anyother transactions with, any of its Affiliates, except that (a) Holdings, the Borrower or any Subsidiary may engagein any of the foregoing transactions in the ordinary course of business atprices and on terms and conditions not less favorable to Holdings, the Borroweror such Subsidiary than could be obtained on an arm’s-length basis fromunrelated third parties, (b) Restricted Payments may be made to theextent provided in Section 6.06, (c) so long as no Event ofDefault or Default shall have occurred and be continuing or would resulttherefrom, fees may be paid to the Sponsor or any of its Affiliates in anaggregate amount not to exceed $1,500,000 in any fiscal year plus allreasonable out-of-pocket costs and expenses and indemnification amountsincurred by the Sponsor or any such Affiliate, in each case in connection withtheir performance of management, consulting, monitoring, financial advisory orother services with respect to Holdings, the Borrower and the Subsidiaries, (d) paymentsmay be made under the Tax Sharing Agreement, as such agreement exists onthe Closing Date and with such changes after the Closing Date as may beapproved by the Administrative Agent, and (e) the Transactions may beconsummated, including the making of any payments on the Closing Date inconnection therewith.

 

SECTION 6.08. Business of Holdings,the Borrower and Subsidiaries; Limitation on Hedging Agreements. (a) With respect to Holdings, engage in any business activities or have any assetsor liabilities other than (i) its ownership of the Equity Interests in theBorrower, (ii) liabilities incidental thereto, including its liabilitiespursuant to the Loan Documents, and (iii) Permitted Holdings Indebtedness.

 

(b)                                 With respect to theBorrower and the Subsidiaries, engage at any time in any business or businessactivity other than a Permitted Business.

 

(c)                                  Enter into anyHedging Agreement other than (a) any such agreement or arrangement enteredinto in the ordinary course of business and consistent with prudent businesspractice to hedge or mitigate risks to which the Borrower or any Subsidiary isexposed in the conduct of its business or the management of its liabilities or (b) anysuch agreement entered into to hedge against fluctuations in interest rates orcurrency incurred in the ordinary course of business and consistent withprudent business practice; provided that in each case such agreements orarrangements shall not have been entered into for speculation purposes.

 

SECTION 6.09. Other Indebtedness andAgreements; Amendments to Acquisition Documentation. (a)  Permit anywaiver, supplement, modification, amendment, termination or release of anyindenture, instrument or agreement pursuant to which any Material Indebtednessof any Loan Party is outstanding if the effect of such waiver, supplement,modification, 

 

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amendment, termination or release would materially increase theobligations of the obligor or confer additional material rights on the holderof such Indebtedness in a manner adverse to any Loan Party or the Lenders.

 

(b)                                 (i)  Make anydistribution, whether in cash, property, securities or a combination thereof,other than regular scheduled payments of principal and interest as and when due(to the extent not prohibited by applicable subordination provisions), inrespect of, or pay, or offer or commit to pay, or directly or indirectly(including pursuant to any Synthetic Purchase Agreement) redeem, repurchase,retire or otherwise acquire for consideration, or set apart any sum forthe aforesaid purposes, any Indebtedness that is subordinated to theObligations, including the Subordinated Notes.

 

(c)                                  (i)  Permit anywaiver, supplement, modification, amendment, termination or release of, or failto enforce strictly the terms and conditions of, any of the indemnities made infavor of Holdings, the Borrower and the Subsidiaries pursuant to theAcquisition Documentation such that after giving effect thereto suchindemnities shall be materially less favorable to the interests of the LoanParties or the Secured Parties with respect thereto or (ii) otherwisepermit any waiver, supplement, modification, amendment, termination or releaseof, or fail to enforce strictly the terms and conditions of, any of theAcquisition Documentation except to the extent that such waiver, supplement,modification, amendment, termination or release or failure to enforce could notreasonably be expected to have a Material Adverse Effect.

 

SECTION 6.10. Capital Expenditures*.*Permit the aggregate amount of CapitalExpenditures made by the Borrower and the Subsidiaries to exceed (a) inthe case of other than by the Foreign Target, $5,000,000 in any fiscal year; providedthat the amount of permitted Capital Expenditures set forth above in respect ofany fiscal year commencing with the fiscal year ending on December 31, 2005,shall be increased (but not decreased) by (i) the amount of unused CapitalExpenditures permitted pursuant to this clause (a) for theimmediately preceding fiscal year less (ii) an amount equal to unusedCapital Expenditures under this clause (a) carried forward to suchpreceding fiscal year, and (b) in the case of the Foreign Target,$10,000,000 (unless otherwise reduced by the amount of Asset Sales to theForeign Target pursuant to Section 6.05(b)(i)) per each fiscal year2006, 2007 and 2008 (provided, that the amount of Capital Expendituresincurred pursuant to this clause (b) shall not exceed $25,000,000(unless otherwise reduced by the amount of Asset Sales to the Foreign Targetpursuant to Section 6.05(b)(i)) at any time outstanding during theterm of this Agreement).

 

SECTION 6.11. Interest Coverage Ratio.After December 31, 2005, permit the Interest Coverage Ratio on the lastday of any fiscal quarter during any period set forth below to be less than theratio set forth opposite such period below: 

 
| **Period**                                           | ** ** | **Ratio**    | ** ** |
|------------------------------------------------------|------------|--------------|------------|
|                                                 |       |         |       |
| January 1, 2006 through March 31,  2007    |       | 1.70 to 1.00 |       |
| April 1, 2007 through June 30,  2007       |       | 1.75 to 1.00 |       |
| July 1, 2007 through September 30,  2007   |       | 1.80 to 1.00 |       |
| October 1, 2007 through December 31,  2007 |       | 1.85 to 1.00 |       |
| January 1, 2008 through December 31,  2008 |       | 2.00 to 1.00 |       |
| Thereafter                                           |       | 2.25 to 1.00 |       |

 

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SECTION 6.12. Leverage Ratio.After December 31, 2005, permit the Leverage Ratio on the last day of anyfiscal quarter during any period set forth below to be greater than the ratioset forth opposite such period below:

 
| **Period**                                           | ** ** | **Ratio**    | ** ** |
|------------------------------------------------------|------------|--------------|------------|
|                                                 |       |         |       |
| January 1, 2006 through June 30,  2007     |       | 6.95 to 1.00 |       |
| July 1, 2007 through September 30,  2007   |       | 6.75 to 1.00 |       |
| October 1, 2007 through December 31,  2007 |       | 6.50 to 1.00 |       |
| January 1, 2008 through December 31,  2008 |       | 5.50 to 1.00 |       |
| January 1, 2009 through December 31,  2009 |       | 5.00 to 1.00 |       |
| Thereafter                                           |       | 4.50 to 1.00 |       |

 

SECTION 6.13. Fixed Charge CoverageRatio. After December 31, 2005, permit the Fixed Charge Coverage Ratioon the last day of any fiscal quarter during any period set forth below to beless than the ratio set forth opposite such period below: 

 
| **Period**                                         | ** ** | **Ratio**    | ** ** |
|----------------------------------------------------|------------|--------------|------------|
|                                               |       |         |       |
| January 1, 2006 through March 31,  2007  |       | 1.25 to 1.00 |       |
| April 1, 2007 through June 30,  2007     |       | 1.30 to 1.00 |       |
| July 1, 2007 through September 30,  2007 |       | 1.35 to 1.00 |       |
| Thereafter                                         |       | 1.40 to 1.00 |       |

 

SECTION 6.14. Fiscal Year*.*With respect to Holdings or theBorrower, change its fiscal year-end to a date other than December 31.

 

ARTICLE VII

 

Events ofDefault 

 

SECTION 7.01. In case of the happeningof any of the following events (“Events of Default”):

 

(a)                                  anyrepresentation or warranty made or deemed made in or in connection with anyLoan Document or the Borrowings or issuances of Letters of Credit hereunder, orany representation, warranty, statement or information contained in any report,certificate, financial statement or other instrument furnished in connectionwith or pursuant to any Loan Document, shall prove to have been false ormisleading in any material respect when so made, deemed made or furnished;

 

(b)                                 defaultshall be made in the payment of any principal of any Loan or the reimbursementwith respect to any L/C Disbursement when and as the same shall become due andpayable, whether at the due date thereof or at a date fixed for prepaymentthereof or by acceleration thereof or otherwise;

 

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(c)                                  defaultshall be made in the payment of any interest on any Loan or L/C Disbursement orany Fee or any other amount (other than an amount referred to in (b) above)due under any Loan Document, when and as the same shall become due and payable,and such default shall continue unremedied for a period of three Business Days;

 

(d)                                 defaultshall be made in the due observance or performance by Holdings, the Borrower orany Subsidiary of any covenant, condition or agreement contained in Section 5.01(a),5.05 or 5.08 or in Article VI;

 

(e)                                  defaultshall be made in the due observance or performance by Holdings, the Borrower orany Subsidiary of any covenant, condition or agreement contained in any LoanDocument (other than those specified in clauses (b), (c) or (d) above)and such default shall continue unremedied for a period of 30 days followingthe earlier of (i) knowledge thereof by a Responsible Officer of a LoanParty and (ii) written notice thereof by the Administrative Agent or anyLender to a Loan Party;

 

(f)                                    Holdings,the Borrower or any Subsidiary shall (i) fail to pay any principal orinterest, regardless of amount, due in respect of any Material Indebtedness,when and as the same shall become due and payable (after giving effect to anyapplicable grace period), or (ii) any other event or condition occurs thatresults in any Material Indebtedness becoming due prior to its scheduledmaturity or that enables or permits (with or without the giving of notice, thelapse of time or both) the holder or holders of any Material Indebtedness orany trustee or agent on its or their behalf to cause any Material Indebtednessto become due, or to require the prepayment, repurchase, redemption ordefeasance thereof, prior to its scheduled maturity; provided that this clause(ii) shall not apply to secured Indebtedness that becomes due as a resultof the voluntary sale or transfer of the property or assets securing suchIndebtedness;

 

(g)                                 aninvoluntary proceeding shall be commenced or an involuntary petition shall befiled in a court of competent jurisdiction seeking (i) relief in respectof Holdings, the Borrower or any Subsidiary, or of a substantial part ofthe property or assets of Holdings, the Borrower or a Subsidiary, under Title11 of the United States Code, as now constituted or hereafter amended, or anyother Federal, state or foreign bankruptcy, insolvency, receivership or similarlaw, (ii) the appointment of a receiver, trustee, custodian, sequestrator,conservator or similar official for Holdings, the Borrower or any Subsidiary orfor a substantial part of the property or assets of Holdings, the Borroweror a Subsidiary or (iii) the winding-up or liquidation of Holdings, theBorrower or any Subsidiary; and such proceeding or petition shall continueundismissed for 60 days or an order or decree approving or ordering any of theforegoing shall be entered;

 

(h)                                 Holdings,the Borrower or any Subsidiary shall (i) voluntarily commence anyproceeding or file any petition seeking relief under Title 11 of the UnitedStates Code, as now constituted or hereafter amended, or any other Federal, stateor foreign bankruptcy, insolvency, receivership or similar law, (ii) consentto the institution of, or fail to contest in a timely and appropriate manner,any proceeding or the filing of any petition described in (g) above,(iii) apply for or consent to the appointmentof a receiver, trustee, custodian, sequestrator, conservator or similarofficial for Holdings, the Borrower 

 

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or any Subsidiary or for a substantial part ofthe property or assets of Holdings, the Borrower or any Subsidiary, (iv) filean answer admitting the material allegations of a petition filed against it inany such proceeding, (v) make a general assignment for the benefit ofcreditors, (vi) become unable, admit in writing its inability or failgenerally to pay its debts as they become due or (vii) take any action forthe purpose of effecting any of the foregoing;

 

(i)                                     oneor more judgments for the payment of money in an aggregate amount in excess of$5,000,000 (excluding therefrom any amount covered by insurance as to which theapplicable insurer has acknowledged in writing its obligation to cover) shallbe rendered against Holdings, the Borrower, any Subsidiary or any combinationthereof and the same shall remain undischarged for a period of 30 consecutivedays during which execution shall not be effectively stayed, or any actionshall be legally taken by a judgment creditor to levy upon assets or propertiesof Holdings, the Borrower or any Subsidiary to enforce any such judgment;

 

(j)                                     anERISA Event described in clause (b) of the definition thereof shallhave occurred or any other ERISA Event shall have occurred that, when takentogether with all other such ERISA Events, could reasonably be expected toresult in liability of the Borrower and its ERISA Affiliates in an aggregateamount exceeding $5,000,000;

 

(k)                                  anyGuarantee under the Guarantee and Collateral Agreement for any reason shallcease to be in full force and effect (other than in accordance with its terms),or any Guarantor shall deny in writing that it has any further liability underits Guarantee (other than as a result of the discharge of such Guarantor inaccordance with the terms of the Loan Documents);

 

(l)                                     anyLien purported to be created under any Security Document shall cease to be, orshall be asserted by the Borrower or any other Loan Party not to be, a valid,perfected and, with respect to the Secured Parties, first priority (except asotherwise expressly provided in this Agreement or such Security Document) Lienon any material Collateral covered thereby, except to the extent that any suchloss of perfection or priority results from the failure of the Collateral Agentto maintain possession of certificates representing Equity Interests pledgedunder the Guarantee and Collateral Agreement; or

 

(m)                               thereshall have occurred a Change in Control;

 

then, and in every such event (other than an event with respect toHoldings or the Borrower described in paragraph (g) or (h) above),and at any time thereafter during the continuance of such event either or bothof the following actions may be taken: (i) the Administrative Agentmay, and at the request of the Majority Facility Lenders with respect to theRevolving Credit Facility shall, by notice to the Borrower, terminate forthwiththe Revolving Credit Commitments and the Swingline Commitment and (ii) theAdministrative Agent may, and at the request of the Required Lenders shall,declare the Loans then outstanding to be forthwith due and payable in whole orin part, whereupon the principal of the Loans so declared to be due andpayable, together with accrued interest thereon and any unpaid accrued Fees andall other liabilities of the Borrower accrued hereunder and under any otherLoan Document, shall become forthwith due 

 

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and payable, without presentment, demand, protest or any other noticeof any kind, all of which are hereby expressly waived by the Borrower, anythingcontained herein or in any other Loan Document to the contrary notwithstanding,and the Administrative Agent and the Collateral Agent shall have the right totake all or any actions and exercise any remedies available to a secured partyunder the Security Documents or applicable law or in equity; and in any eventwith respect to Holdings or the Borrower described in paragraph (g) or(h) above, the Revolving Credit Commitments and the SwinglineCommitment shall automatically terminate and the principal of the Loans thenoutstanding, together with accrued interest thereon and any unpaid accrued Feesand all other liabilities of the Borrower accrued hereunder and under any otherLoan Document, shall automatically become due and payable, without presentment,demand, protest or any other notice of any kind, all of which are herebyexpressly waived by the Borrower, anything contained herein or in any otherLoan Document to the contrary notwithstanding, and the Administrative Agent andthe Collateral Agent shall have the right to take all or any actions andexercise any remedies available to a secured party under the Security Documentsor applicable law or in equity. The Majority Facility Lenders with respect tothe Revolving Credit Facility may, by notice to the Administrative Agent,rescind a termination of the Revolving Credit Commitments and the SwinglineCommitment described in clause (i) above in this paragraph and theRequired Lenders may, by notice to the Administrative Agent, rescind anacceleration of the Loans described in clause (ii) above in thisparagraph.

 

Notwithstanding anything to the contrary contained in this Section 7.01,in the event the Borrower fails to comply with any financial covenant containedin Sections 6.11, 6.12, or 6.13 Holdings shall have theright, no later than ten (10) Business Days after the delivery of thefinancial statements and certificates required by Section 5.04(a) or(b), as applicable, with respect to such applicable fiscal quarter, to issueCure Securities for cash in an aggregate amount not in excess of the lesser of(x) the minimum amount necessary to cure the relevant failure to comply withsuch financial covenant and (y) $15,000,000, the net cash proceeds of whichshall be contributed to the common equity capital of the Borrower(collectively, the “Cure Right”), and upon the receipt by the Borrowerof such cash (the “Cure Amount”), such financial covenant shall berecalculated giving effect to the following pro forma adjustments:

 

(a) Consolidated EBITDA shall be increased, in accordance with the definitionthereof, solely for the purpose of measuring such financial covenant and notfor any other purpose under this Agreement (for the avoidance of doubt,Consolidated EBITDA shall only be adjusted for the purposes of the quarterlytests pursuant to Sections 6.11, 6.12 and 6.13 and shallnot be increased for purposes of determining any other covenant or definitionwhich incorporates such covenants), by an amount equal to the Cure Amount;

 

(b) if,after giving effect to the foregoing recalculations, the Borrower shall then bein compliance with the requirements of such financial covenant, the Borrowershall be deemed to have satisfied the requirements of such financial covenantas of the relevant date of determination with the same effect as though therehad been no failure to comply therewith at such date, and the applicable breachor default of such financial covenant which had occurred shall be deemed not tohave occurred in the first instance for all purposes of this Agreement and theLoan Documents;

 

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(c) tothe extent that the Cure Amount proceeds are used to repay Indebtedness, suchIndebtedness shall not be deemed to have been repaid for purposes ofcalculating the financial covenants set forth in Sections 6.11, 6.12and 6.13 for the period with respect to which such ComplianceCertificate applies; and

 

(d)  tothe extent a fiscal quarter ended for which such financial covenant isinitially recalculated as a result of a Cure Right is included in thecalculation of a financial covenant in a subsequent fiscal period, the CureAmount shall be included in the amount of Consolidated EBITDA for such initialfiscal quarter;

 

provided that theCure Rights shall not be exercised more than twice in any four quarter period.

 

ARTICLE VIII

 

The Agents andthe Arranger 

 

Each of the Lenders and the Issuing Bankhereby irrevocably appoints each of the Administrative Agent and the CollateralAgent (for purposes of this Article VIII, the Administrative Agentand the Collateral Agent are referred to collectively as the “Agents”)its agent and authorizes the Agents to take such actions on its behalf and toexercise such powers as are delegated to such Agent by the terms of the LoanDocuments, together with such actions and powers as are reasonably incidentalthereto. Without limiting the generality of the foregoing, the Agents arehereby expressly authorized by the Lenders to execute any and all documents(including releases and the Security Documents) with respect to the Collateraland the rights of the Secured Parties with respect thereto, as contemplated byand in accordance with the provisions of this Agreement and the SecurityDocuments.

 

Each bank serving as an Agent hereunder shallhave the same rights and powers in its capacity as a Lender as any other Lenderand may exercise the same as though it were not an Agent, and such bankand its Affiliates may accept deposits from, lend money to and generallyengage in any kind of business with Holdings, the Borrower or any Subsidiary orany of their respective Affiliates as if it were not an Agent hereunder.

 

No Agent shall have any duties or obligationsexcept those expressly set forth in the Loan Documents. Without limiting thegenerality of the foregoing, (a) no Agent shall be subject to any fiduciaryor other implied duties, regardless of whether a Default has occurred and iscontinuing, (b) no Agent shall have any duty to take any discretionaryaction or exercise any discretionary powers, except discretionary rights andpowers expressly contemplated hereby that the Administrative Agent or theCollateral Agent is required to exercise in writing by the Required Lenders (orsuch other number or percentage of the Lenders as shall be necessary under thecircumstances as provided in Section 9.08), and (c) except asexpressly set forth in the Loan Documents, no Agent shall have any duty todisclose, nor shall it be liable for the failure to disclose, any informationrelating to Holdings, the Borrower or any of the Subsidiaries that iscommunicated to or obtained by the bank serving as any Agent or any of itsAffiliates in any capacity. The Administrative Agent and the Collateral Agentshall not be liable for any action 

 

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taken or not taken by it with the consent or at the request of theRequired Lenders (or such other number or percentage of the Lenders as shall benecessary under the circumstances as provided in Section 9.08) orin the absence of its own gross negligence or willful misconduct. No Agent shallbe deemed to have knowledge of any Default unless and until written noticethereof is given to such Agent by Holdings, the Borrower or a Lender, and noAgent shall be responsible for or have any duty to ascertain or inquire into (i) anystatement, warranty or representation made in or in connection with any LoanDocument, (ii) the contents of any certificate, report or other documentdelivered thereunder or in connection therewith, (iii) the performance orobservance of any of the covenants, agreements or other terms or conditions setforth in any Loan Document, (iv) the validity, enforceability,effectiveness or genuineness of any Loan Document or any other agreement,instrument or document, or (v) the satisfaction of any condition set forthin Article IV or elsewhere in any Loan Document, other than toconfirm receipt of items expressly required to be delivered to such Agent.

 

Each Agent shall be entitled to rely upon,and shall not incur any liability for relying upon, any notice, request,certificate, consent, statement, instrument, document or other writing believedby it to be genuine and to have been signed or sent by the proper person. EachAgent may also rely upon any statement made to it orally or by telephoneand believed by it to have been made by the proper person, and shall not incurany liability for relying thereon. Each Agent may consult with legalcounsel (who may be counsel for Holdings or the Borrower), independentaccountants and other experts selected by it, and shall not be liable for anyaction taken or not taken by it in accordance with the advice of any suchcounsel, accountants or experts.

 

Each Agent may perform any and allits duties and exercise its rights and powers by or through any one or moresub-agents appointed by it. Each Agent and any such sub-agent may perform anyand all its duties and exercise its rights and powers by or through theirrespective Related Parties. The exculpatory provisions of the precedingparagraphs shall apply to any such sub-agent and to the Related Parties of eachAgent and any such sub-agent, and shall apply to their respective activities inconnection with the syndication of the credit facilities provided for herein aswell as activities as Agent.

 

Subject to the appointment and acceptance ofa successor Agent as provided below, each Agent may resign at any time bynotifying the Lenders, the Issuing Bank and the Borrower. Upon any suchresignation of the Administrative Agent or the Collateral Agent, the RequiredLenders shall have the right to appoint a successor, subject to the Borrower’sapproval (not to be unreasonably withheld or delayed) so long as no Default orEvent of Default shall have occurred and be continuing. If no successor shallhave been so appointed by the Required Lenders and shall have accepted suchappointment within 30 days after the retiring Agent gives notice of itsresignation, then the retiring Agent may, on behalf of the Lenders and theIssuing Bank, appoint a successor Agent which shall be a bank with an office inNew York, New York, or an Affiliate of any such bank. Upon the acceptance ofits appointment as Agent hereunder by a successor, such successor shall succeedto and become vested with all the rights, powers, privileges and duties of theretiring Agent, and the retiring Agent shall be discharged from its duties andobligations hereunder. The fees payable by the Borrower to a successor Agentshall be the same as those payable to its predecessor unless otherwise agreedbetween the Borrower and such successor. After an Agent’s resignationhereunder, the provisions of this Article and Section 9.05shall continue in effect for the benefit of such retiring Agent, its sub-agentsand 

 

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their respective Related Parties in respect of any actions taken oromitted to be taken by any of them while acting as Agent.

 

Each of the Arranger, the Syndication Agentand each Documentation Agent, in its capacity as such, shall have no duties orresponsibilities, and shall incur no liability, under this Agreement or anyother Loan Document.

 

Each Lender acknowledges that it has,independently and without reliance upon the Agents, the Arranger, theSyndication Agent, each Documentation Agent or any other Lender and based onsuch documents and information as it has deemed appropriate, made its owncredit analysis and decision to enter into this Agreement. Each Lender alsoacknowledges that it will, independently and without reliance upon the Agents,the Arranger, the Syndication Agent, each Documentation Agent or any otherLender and based on such documents and information as it shall from time totime deem appropriate, continue to make its own decisions in taking or nottaking action under or based upon this Agreement or any other Loan Document, anyrelated agreement or any document furnished hereunder or thereunder.

 

To the extent required by any applicable law,the Administrative Agent may withhold from any interest payment to anyLender an amount equivalent to any applicable withholding tax. If the InternalRevenue Service or any other Governmental Authority asserts a claim that theAdministrative Agent did not properly withhold tax from amounts paid to or forthe account of any Lender because the appropriate form was not deliveredor was not properly executed or because such Lender failed to notify theAdministrative Agent of a change in circumstance which rendered the exemptionfrom, or reduction of, withholding tax ineffective or for any other reason,such Lender shall indemnify the Administrative Agent fully for all amountspaid, directly or indirectly, by the Administrative Agent as tax or otherwise,including any penalties or interest and together with all expenses (includinglegal expenses, allocated internal costs and out-of-pocket expenses) incurred.

 

ARTICLE IX

 

Miscellaneous 

 

SECTION 9.01. Notices. Noticesand other communications provided for herein shall be in writing andshall be delivered by hand or overnight courier service, mailed by certified orregistered mail or sent by fax, as follows:

 

(a)                                  ifto Holdings or the Borrower, to it at True Temper Sports, Inc., 8275Tournament Drive, Suite 200, Memphis, TN 38125, Attention of President andChief Financial Officer (Fax No. (901) 746-2162), with a copy to AndrewMattei, Esq. at Mayer, Brown, Rowe & Maw LLP, 1675 Broadway, NewYork, NY 10019 (Fax No. (212) 849-5572);

 

(b)                                 ifto the Administrative Agent or the Collateral Agent, to Credit Suisse, ElevenMadison Avenue, New York, NY 10010, Attention of Loan Services Manager (Fax No. (212)325-8304); and

 

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(c)                                  ifto a Lender, to it at its address (or fax number) set forth in the LenderAddendum or the Assignment and Acceptance pursuant to which such Lender shallhave become a party hereto.

 

All notices and other communications given to any party hereto inaccordance with the provisions of this Agreement shall be deemed to have beengiven on the date of receipt if delivered by hand or overnight courier serviceor sent by fax or on the date five Business Days after dispatch by certified orregistered mail if mailed, in each case delivered, sent or mailed (properlyaddressed) to such party as provided in this Section 9.01 or inaccordance with the latest unrevoked direction from such party given inaccordance with this Section 9.01.

 

SECTION 9.02. Survival of Agreement.All covenants, agreements, representations and warranties made by Holdings orthe Borrower herein and in the certificates or other instruments prepared ordelivered in connection with or pursuant to this Agreement or any other LoanDocument shall be considered to have been relied upon by the Lenders and theIssuing Bank and shall survive the making by the Lenders of the Loans and theissuance of Letters of Credit by the Issuing Bank, regardless of anyinvestigation made by the Lenders or the Issuing Bank or on their behalf, andshall continue in full force and effect as long as the principal of or anyaccrued interest on any Loan or any Fee or any other amount payable under thisAgreement or any other Loan Document is outstanding and unpaid or any Letter ofCredit is outstanding and so long as the Commitments have not been terminated.The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall remain operative and in full force andeffect regardless of the expiration of the term of this Agreement, theconsummation of the transactions contemplated hereby, the repayment of any ofthe Loans, the expiration of the Commitments, the expiration of any Letter ofCredit, the invalidity or unenforceability of any term or provision of thisAgreement or any other Loan Document or any investigation made by or on behalfof the Administrative Agent, the Collateral Agent, the Arranger, any Lender orthe Issuing Bank.

 

SECTION 9.03. Binding Effect.This Agreement shall become effective in accordance with the provisions of theAmendment Agreement.

 

SECTION 9.04. Successors and Assigns.(a)  Whenever in this Agreement any of the parties hereto is referred to,such reference shall be deemed to include the permitted successors and assignsof such party; and all covenants, promises and agreements by or on behalf ofHoldings, the Borrower, the Administrative Agent, the Collateral Agent, theIssuing Bank or the Lenders that are contained in this Agreement shall bind andinure to the benefit of their respective successors and assigns.

 

(b)                                 Each Lender may assignto one or more assignees all or a portion of its interests, rights andobligations under this Agreement (including all or a portion of its Commitmentand the Loans at the time owing to it); provided, however, that (i) theAdministrative Agent must give its prior written consent to such assignment(which consent shall not be unreasonably withheld or delayed) other than anyassignment of Term Loans to a Lender or an Affiliate or Related Fund of aLender, (ii) in the case of any assignment of a Revolving CreditCommitment, each of the Issuing Bank, the Swingline Lender and the Borrowermust give its prior written consent to such assignment (which consent shall notbe unreasonably withheld or delayed); provided that the consent of theBorrower shall not be required to any such assignment during 

 

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the continuance of any Event of Default, (iii) theamount of the Commitment of the assigning Lender subject to each suchassignment (determined as of the date the Assignment and Acceptance withrespect to such assignment is delivered to the Administrative Agent) shall notbe less than $1,000,000 (or, if less, the entire remaining amount of suchLender’s Commitment) and shall be in an amount that is an integral multiple of$1,000,000 (or the entire remaining amount of such Lender’s Commitment), unlessotherwise agreed by the Administrative Agent, (iv) the parties to eachsuch assignment shall execute and deliver to the Administrative Agent anAssignment and Acceptance (such Assignment and Acceptance to be (A) electronicallyexecuted and delivered to the Administrative Agent via an electronic settlementsystem then acceptable to the Administrative Agent, which shall initially bethe settlement system of ClearPar, LLC, or (B) manually executed anddelivered together with a processing and recordation fee of $3,500) and (v) theassignee, if it shall not be a Lender immediately prior to the assignment,shall deliver to the Administrative Agent an Administrative Questionnaire. Uponacceptance and recording pursuant to paragraph (e) of this Section 9.04,from and after the effective date specified in each Assignment and Acceptance, (A) theassignee thereunder shall be a party hereto and, to the extent of the interestassigned by such Assignment and Acceptance, have the rights and obligations ofa Lender under this Agreement and (B) the assigning Lender thereundershall, to the extent of the interest assigned by such Assignment andAcceptance, be released from its obligations under this Agreement (and, in thecase of an Assignment and Acceptance covering all or the remaining portion ofan assigning Lender’s rights and obligations under this Agreement, such Lendershall cease to be a party hereto but shall continue to be entitled to thebenefits of Sections 2.14, 2.16, 2.20and 9.05, as well as to any Fees accrued for its account and not yetpaid).

 

(c)                                  By executing anddelivering an Assignment and Acceptance, the assigning Lender thereunder andthe assignee thereunder shall be deemed to confirm to and agree with each otherand the other parties hereto as follows: (i) such assigning Lenderwarrants that it is the legal and beneficial owner of the interest beingassigned thereby free and clear of any adverse claim and that its Term LoanCommitment and Revolving Credit Commitment, and the outstanding balances of itsTerm Loans and Revolving Loans, in each case without giving effect to assignmentsthereof which have not become effective, are as set forth in such Assignmentand Acceptance, (ii) except as set forth in (i) above, such assigningLender makes no representation or warranty and assumes no responsibility withrespect to any statements, warranties or representations made in or inconnection with this Agreement, or the execution, legality, validity,enforceability, genuineness, sufficiency or value of this Agreement, any otherLoan Document or any other instrument or document furnished pursuant hereto, orthe financial condition of Holdings, the Borrower or any Subsidiary or theperformance or observance by Holdings, the Borrower or any Subsidiary of any ofits obligations under this Agreement, any other Loan Document or any otherinstrument or document furnished pursuant hereto; (iii) such assigneerepresents and warrants that it is legally authorized to enter into suchAssignment and Acceptance; (iv) such assignee confirms that it hasreceived a copy of this Agreement, together with copies of the most recentfinancial statements referred to in Section 3.05(a) ordelivered pursuant to Section 5.04 and such other documents andinformation as it has deemed appropriate to make its own credit analysis anddecision to enter into such Assignment and Acceptance; (v) suchassignee will independently and without reliance upon the Administrative Agent,the Collateral Agent, the Arranger, such assigning Lender or any other Lenderand based on such documents and information as it shall deem appropriate at thetime, continue to make its own 

 

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credit decisions in taking or not taking action under this Agreement; (vi) suchassignee appoints and authorizes the Administrative Agent and the CollateralAgent to take such action as agent on its behalf and to exercise such powersunder this Agreement as are delegated to the Administrative Agent and theCollateral Agent, respectively, by the terms hereof, together with such powersas are reasonably incidental thereto; and (vii) such assignee agrees thatit will perform in accordance with their terms all the obligations whichby the terms of this Agreement are required to be performed by it as a Lender.

 

(d)                                 The AdministrativeAgent, acting for this purpose as an agent of the Borrower, shall maintain atone of its offices in The City of New York a copy of each Assignment andAcceptance delivered to it and a register for the recordation of the names andaddresses of the Lenders, and the Commitment of, and principal amount of theLoans owing to, each Lender pursuant to the terms hereof from time to time (the“Register”). The entries in the Register shall be conclusive absentmanifest error and the Borrower, the Administrative Agent, the Issuing Bank,the Collateral Agent and the Lenders may treat each person whose name isrecorded in the Register pursuant to the terms hereof as a Lender hereunder forall purposes of this Agreement, notwithstanding notice to the contrary. TheRegister shall be available for inspection by the Borrower, the Issuing Bank,the Collateral Agent and any Lender, at any reasonable time and from time totime upon reasonable prior notice.

 

(e)                                  Upon its receipt of aduly completed Assignment and Acceptance executed by an assigning Lender and anassignee, an Administrative Questionnaire completed in respect of the assignee(unless the assignee shall already be a Lender hereunder) and the writtenconsent of the Administrative Agent and, if required, the written consent ofthe Borrower, the Swingline Lender and the Issuing Bank to such assignment, theAdministrative Agent shall (i) accept such Assignment and Acceptance and (ii) recordthe information contained therein in the Register. No assignment shall beeffective unless it has been recorded in the Register as provided in this paragraph (e).

 

(f)                                    Each Lender may withoutthe consent of the Borrower, the Swingline Lender, the Issuing Bank or theAdministrative Agent sell participations to one or more banks or other entitiesin all or a portion of its rights and obligations under this Agreement(including all or a portion of its Commitment and the Loans); provided, however,that (i) such Lender’s obligations under this Agreement shall remainunchanged, (ii) such Lender shall remain solely responsible to the otherparties hereto for the performance of such obligations, (iii) theparticipating banks or other entities shall be entitled to the benefit of thecost protection provisions contained in Sections 2.14, 2.16 and 2.20to the same extent as if they were Lenders (but, with respect to any particularparticipant, to no greater extent than the Lender that sold the participationto such participant) and (iv) the Borrower, the Administrative Agent, theIssuing Bank and the Lenders shall continue to deal solely and directly withsuch Lender in connection with such Lender’s rights and obligations under thisAgreement, and such Lender shall retain the sole right to enforce theobligations of the Borrower relating to the Loans or L/C Disbursements and toapprove any amendment, modification or waiver of any provision of thisAgreement (other than amendments, modifications or waivers decreasing any feespayable hereunder or the amount of principal of or the rate at which interestis payable on the Loans (in each case to the extent participated in by such 

 

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participant), extending any scheduled principal payment date or datefixed for the payment of interest on the Loans (in each case to the extentparticipated in by such participant), increasing or extending the Commitments(in each case to the extent participated in by such participant) or releasingany Guarantor or all or any substantial part of the Collateral).

 

(g)                                 Any Lender orparticipant may, in connection with any assignment or participation or proposedassignment or participation pursuant to this Section 9.04, discloseto the assignee or participant or proposed assignee or participant anyinformation relating to the Borrower furnished to such Lender by or on behalfof the Borrower; provided that, prior to any such disclosure ofinformation designated by the Borrower as confidential, each such assignee orparticipant or proposed assignee or participant shall execute an agreementwhereby such assignee or participant shall agree (subject to customaryexceptions) to preserve the confidentiality of such confidential information onterms no less restrictive than those applicable to the Lenders pursuant to Section 9.16.

 

(h)                                 Any Lender may atany time assign all or any portion of its rights under this Agreement to secureextensions of credit to such Lender or in support of obligations owed by suchLender and, in the case of any Lender that is a fund that invests in bankloans, such Lender may pledge all or any portion of its rights under thisAgreement to any holder of, trustee for, or other representative of any holdersof, obligations owed or securities issued by such fund as security for suchobligations or securities; provided that no such assignment or pledgedescribed in this clause (h) shall release a Lender from anyof its obligations hereunder or substitute any such assignee or pledgee forsuch Lender as a party hereto.

 

(i)                                     Notwithstandinganything to the contrary contained herein, any Lender (a “Granting Lender”)may grant to a special purpose funding vehicle (an “SPC”),identified as such in writing from time to time by the Granting Lender to theAdministrative Agent and the Borrower, the option to provide to the Borrowerall or any part of any Loan that such Granting Lender would otherwise beobligated to make to the Borrower pursuant to this Agreement; providedthat (i) nothing herein shall constitute a commitment by any SPC to makeany Loan and (ii) if an SPC elects not toexercise such option or otherwise fails to provide all or any part of suchLoan, the Granting Lender shall be obligated to make such Loan pursuant to theterms hereof. The making of a Loan by an SPC hereunder shall utilize theCommitment of the Granting Lender to the same extent, and as if, such Loan weremade by such Granting Lender. Each party hereto hereby agrees that no SPC shallbe liable for any indemnity or similar payment obligation under this Agreement(all liability for which shall remain with the Granting Lender). In furtheranceof the foregoing, each party hereto hereby agrees (which agreement shallsurvive the termination of this Agreement) that, prior to the date that is oneyear and one day after the payment in full of all outstanding commercial paperor other senior indebtedness of any SPC, it will not institute against, or joinany other person in instituting against, such SPC any bankruptcy,reorganization, arrangement, insolvency or liquidation proceedings under thelaws of the United States or any State thereof. In addition, notwithstandinganything to the contrary contained in this Section 9.04, any SPC may (i) withnotice to, but without the prior written consent of, the Borrower and theAdministrative Agent and without paying any processing fee therefor, assign allor a portion of its interests in any Loans to the Granting Lender or to anyfinancial institutions (consented to by the Borrower and Administrative Agent)providing liquidity and/or credit support to or for the account of such SPC tosupport the funding or maintenance of Loans and (ii) disclose on aconfidential basis any non-public information 

 

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relating to its Loans to any rating agency, commercial paper dealer orprovider of any surety, guarantee or credit or liquidity enhancement to suchSPC.

 

(j)                                     Neither Holdingsnor the Borrower shall assign or delegate any of its rights or duties hereunderwithout the prior written consent of the Administrative Agent, the Issuing Bankand each Lender, and any attempted assignment without such consent shall benull and void.

 

SECTION 9.05. Expenses; Indemnity.(a)  Holdings and the Borrower agree, jointly and severally, to pay allreasonable out-of-pocket costs and expenses incurred by the AdministrativeAgent, the Collateral Agent, the Syndication Agent, each Documentation Agent,the Arranger, the Issuing Bank and the Swingline Lender in connection with thesyndication of the credit facilities provided for herein and the preparationand administration of this Agreement and the other Loan Documents or inconnection with any amendments, modifications or waivers of the provisionshereof or thereof (whether or not the transactions hereby or therebycontemplated shall be consummated) or incurred by the Administrative Agent, theArranger, the Issuing Bank or any Lender in connection with the enforcement orprotection of its rights in connection with this Agreement and the other LoanDocuments or in connection with the Loans made or Letters of Credit issuedhereunder, including in each case the fees and disbursements of Latham &Watkins LLP, counsel for the Administrative Agent and the Collateral Agent,and, in connection with any such enforcement or protection, the reasonable feesand disbursements of any counsel for the Administrative Agent or the CollateralAgent and one other transaction counsel acting on behalf of the SyndicationAgent, each Documentation Agent, the Arranger, the Issuing Bank and theLenders, together with any other local and special counsel reasonably requiredin connection with such enforcement or protection.

 

(b)                                 Holdings and theBorrower agree, jointly and severally, to indemnify the Administrative Agent,the Collateral Agent, the Syndication Agent, each Documentation Agent, theArranger, each Lender, the Issuing Bank and each Related Party of any of theforegoing persons (each such person being called an “Indemnitee”)against, and to hold each Indemnitee harmless from, any and all losses, claims,damages, liabilities and related costs and expenses, including reasonablecounsel fees and disbursements, incurred by or asserted against any Indemniteearising out of, in any way connected with, or as a result of (i) theexecution or delivery of this Agreement or any other Loan Document or anyagreement or instrument contemplated hereby or thereby, the performance by theparties thereto of their respective obligations thereunder or the consummationof the Transactions and the other transactions contemplated hereunder orthereby, (ii) the use of the proceeds of the Loans or issuance of Lettersof Credit, (iii) any claim, litigation, investigation or proceedingrelating to any of the foregoing, whether or not any Indemnitee is a partythereto, or (iv) any actual or alleged presence or Release of HazardousMaterials on any property owned or operated by Holdings, the Borrower or any ofthe Subsidiaries, or any Environmental Liability related in any way toHoldings, the Borrower or any of the Subsidiaries; provided that suchindemnity shall not, as to any Indemnitee, be available to the extent that suchlosses, claims, damages, liabilities or related costs and expenses aredetermined by a court of competent jurisdiction by final and nonappealablejudgment to have resulted from primarily the gross negligence, willfulmisconduct or bad faith of such Indemnitee (and, upon any such determination,any indemnification payments with respect to such losses, claims, damages,liabilities or related costs and expenses previously received by suchIndemnitee shall be promptly reimbursed by such Indemnitee).

 

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(c)                                  Tothe extent that Holdings and the Borrower fail to pay any amount required to bepaid by them to the Administrative Agent, the Collateral Agent, the SyndicationAgent, each Documentation Agent, the Arranger, the Issuing Bank or theSwingline Lender under paragraph (a) or (b) ofthis Section, each Lender severally agrees to pay to the Administrative Agent,the Collateral Agent, the Syndication Agent, each Documentation Agent, theArranger, the Issuing Bank or the Swingline Lender, as the case may be,such Lender’s prorata share (determined as of the time that theapplicable unreimbursed expense or indemnity payment is sought) of such unpaidamount; provided that the unreimbursed expense or indemnified loss,claim, damage, liability or related expense, as the case may be, wasincurred by or asserted against the Administrative Agent, the Collateral Agent,the Syndication Agent, each Documentation Agent, the Arranger, the Issuing Bankor the Swingline Lender in its capacity as such. For purposes hereof, a Lender’s“pro rata share” shall be determined based upon its share of the sum ofthe Aggregate Revolving Credit Exposure, outstanding Term Loans and unusedCommitments at the time.

 

(d)                                 To the extentpermitted by applicable law, neither Holdings nor the Borrower shall assert,and each hereby waives, any claim against any Indemnitee, on any theory ofliability, for special, indirect, consequential or punitive damages (as opposedto direct or actual damages) arising out of, in connection with, or as a resultof, this Agreement or any agreement or instrument contemplated hereby, theTransactions, any Loan or Letter of Credit or the use of the proceeds thereof.

 

(e)                                  The provisions ofthis Section 9.05 shall remain operative and in full force andeffect regardless of the expiration of the term of this Agreement, theconsummation of the Transactions or the other transactions contemplated hereby,the repayment of any of the Loans, the expiration of the Commitments, theexpiration of any Letter of Credit, the invalidity or unenforceability of anyterm or provision of this Agreement or any other Loan Document, or anyinvestigation made by or on behalf of the Administrative Agent, the CollateralAgent, the Syndication Agent, each Documentation Agent, the Arranger, anyLender or the Issuing Bank. All amounts due under this Section 9.05shall be payable on written demand therefor.

 

SECTION 9.06. Right of Setoff. Ifan Event of Default shall have occurred and be continuing, each Lender ishereby authorized at any time and from time to time, except to the extentprohibited by law, to set off and apply any and all deposits (general orspecial, time or demand, provisional or final) at any time held and other indebtednessat any time owing by such Lender to or for the credit or the account ofHoldings or the Borrower against any of and all the obligations of Holdings orthe Borrower now or hereafter existing under this Agreement and other LoanDocuments held by such Lender, irrespective of whether or not such Lender shallhave made any demand under this Agreement or such other Loan Document andalthough such obligations may be unmatured. The rights of each Lenderunder this Section 9.06 are in addition to other rights andremedies (including other rights of setoff) which such Lender may have.

 

SECTION 9.07. Applicable Law.THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT ANDAS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCEWITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDITSHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE

 

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WITH, THE LAWS OR RULES DESIGNATEDIN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THEUNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST RECENTLYPUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THEINTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, ASTO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OFNEW YORK.

 

SECTION 9.08. Waivers; Amendment.(a)  No failure or delay of the Administrative Agent, the CollateralAgent, any Lender or the Issuing Bank in exercising any power or righthereunder or under any other Loan Document shall operate as a waiver thereof,nor shall any single or partial exercise of any such right or power, or anyabandonment or discontinuance of steps to enforce such a right or power,preclude any other or further exercise thereof or the exercise of any otherright or power. The rights and remedies of the Administrative Agent, theCollateral Agent, the Issuing Bank and the Lenders hereunder and under theother Loan Documents are cumulative and are not exclusive of any rights orremedies that they would otherwise have. No waiver of any provision of thisAgreement or any other Loan Document or consent to any departure by theBorrower or any other Loan Party therefrom shall in any event be effectiveunless the same shall be permitted by paragraph (b) below, andthen such waiver or consent shall be effective only in the specific instanceand for the purpose for which given. No notice or demand on Holdings or theBorrower in any case shall entitle Holdings or the Borrower to any other orfurther notice or demand in similar or other circumstances.

 

(b)                                 Neither this Agreementnor any other Loan Document nor any provision hereof or thereof may bewaived, amended or modified except pursuant to an agreement or agreements inwriting entered into by Holdings, the Borrower and the Required Lenders; provided,however, that no such agreement shall (i) decrease the principalamount of, or extend the maturity of or any scheduled principal payment date(subject to the last sentence of Article VII) or date for thepayment of any interest on any Loan or any date for reimbursement of an L/CDisbursement, or waive or excuse any such payment or any part thereof, ordecrease the rate of interest on any Loan or L/C Disbursement, without theprior written consent of each Lender adversely affected thereby, (ii) increaseor extend the Commitment or decrease or extend the date for payment of any Feesof any Lender without the prior written consent of such Lender, (iii) amendor modify the prorata requirements of Section 2.17,the provisions of Section 9.04(j), the provisions of this Section orthe percentage set forth in the definition of the term “Required Lenders,” orrelease any Guarantor (other than in accordance with the terms of the Guaranteeand Collateral Agreement), without the prior written consent of each Lenderadversely affected thereby, (iv) amend or modify the percentage set forthin the definition of the term “Majority Facility Lenders” without the priorwritten consent of each Lender adversely affected thereby, (v) releaseall or substantially all of the Collateral without the prior written consent ofeach Lender, (vi) change the provisions of any Loan Document in a mannerthat by its terms adversely affects the rights in respect of payments due toLenders holding Loans of one Class differently from the rights of Lendersholding Loans of any other Class without the prior written consent ofLenders holding a majority in interest of the outstanding Loans and unusedCommitments of each adversely affected Class or (vii) modify theprotections afforded to an SPC pursuant to the provisions of Section 9.04(i) withoutthe written consent of such SPC; providedfurther that no suchagreement shall amend, modify or otherwise affect the rights or duties of theAdministrative 

 

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Agent, the Collateral Agent, the Issuing Bank or the Swingline Lenderhereunder or under any other Loan Document without the prior written consent ofthe Administrative Agent, the Collateral Agent, the Issuing Bank or theSwingline Lender, as applicable.

 

SECTION 9.09. Interest RateLimitation. Notwithstanding anything herein to the contrary, if at any timethe interest rate applicable to any Loan or participation in any L/CDisbursement, together with all fees, charges and other amounts which aretreated as interest on such Loan or participation in such L/C Disbursementunder applicable law (collectively the “Charges”), shall exceed themaximum lawful rate (the “Maximum Rate”) which may be contractedfor, charged, taken, received or reserved by the Lender holding such Loan orparticipation in accordance with applicable law, the rate of interest payablein respect of such Loan or participation hereunder, together with all Chargespayable in respect thereof, shall be limited to the Maximum Rate and, to theextent lawful, the interest and Charges that would have been payable in respectof such Loan or participation but were not payable as a result of the operationof this Section 9.09 shall be cumulated and the interest andCharges payable to such Lender in respect of other Loans or participations orperiods shall be increased (but not above the Maximum Rate therefor) until suchcumulated amount, together with interest thereon at the Federal Funds EffectiveRate to the date of repayment, shall have been received by such Lender.

 

SECTION 9.10. Entire Agreement.This Agreement, the Fee Letters and the other Loan Documents constitute theentire contract between the parties relative to the subject matter hereof. Anyother previous agreement among the parties with respect to the subject matterhereof is superseded by this Agreement and the other Loan Documents. Nothing inthis Agreement or in the other Loan Documents, expressed or implied, isintended to confer upon any person (other than the parties hereto and thereto,their respective successors and assigns permitted hereunder (including anyAffiliate of the Issuing Bank that issues any Letter of Credit) and, to theextent expressly contemplated hereby, the Related Parties of each of theAdministrative Agent, the Collateral Agent, the Syndication Agent, eachDocumentation Agent, the Arranger, the Issuing Bank and the Lenders ) anyrights, remedies, obligations or liabilities under or by reason of thisAgreement or the other Loan Documents.

 

SECTION 9.11. WAIVER OF JURY TRIAL.EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLELAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATIONDIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THISAGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT ORATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCHOTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THEFOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETOHAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, ASAPPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS INTHIS SECTION 9.11.

 

SECTION 9.12. Severability. Inthe event any one or more of the provisions contained in this Agreement or inany other Loan Document should be held invalid, illegal or unenforceable in anyrespect, the validity, legality and enforceability of the remaining provisions 

 

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contained herein and therein shall not in any way be affected orimpaired thereby (it being understood that the invalidity of a particularprovision in a particular jurisdiction shall not in and of itself affect thevalidity of such provision in any other jurisdiction). The parties shallendeavor in good-faith negotiations to replace the invalid, illegal orunenforceable provisions with valid provisions the economic effect of whichcomes as close as possible to that of the invalid, illegal or unenforceableprovisions.

 

SECTION 9.13. Counterparts. ThisAgreement may be executed in counterparts (and by different parties heretoon different counterparts), each of which shall constitute an original but allof which when taken together shall constitute a single contract, and shallbecome effective as provided in Section 9.03. Delivery of anexecuted signature page to this Agreement or of a Lender Addendum byfacsimile transmission shall be as effective as delivery of a manually signedcounterpart of this Agreement.

 

SECTION 9.14. Headings. Article andSection headings and the Table of Contents used herein are for convenienceof reference only, are not part of this Agreement and are not to affectthe construction of, or to be taken into consideration in interpreting, thisAgreement.

 

SECTION 9.15. Jurisdiction; Consentto Service of Process. (a)  Each of Holdings and the Borrower herebyirrevocably and unconditionally submits, for itself and its property, to thenonexclusive jurisdiction of any New York State court or Federal court of theUnited States of America sitting in New York City, and any appellate court fromany thereof, in any action or proceeding arising out of or relating to thisAgreement or the other Loan Documents, or for recognition or enforcement of anyjudgment, and each of the parties hereto hereby irrevocably and unconditionallyagrees that all claims in respect of any such action or proceeding may beheard and determined in such New York State court or, to the extent permittedby law, in such Federal court. Each of the parties hereto agrees that a finaljudgment in any such action or proceeding shall be conclusive and may beenforced in other jurisdictions by suit on the judgment or in any other mannerprovided by law. Nothing in this Agreement shall affect any right that theAdministrative Agent, the Collateral Agent, the Syndication Agent, eachDocumentation Agent, the Arranger, the Issuing Bank or any Lender may otherwisehave to bring any action or proceeding relating to this Agreement or the otherLoan Documents against either Holdings or the Borrower or its properties in thecourts of any jurisdiction.

 

(b)                                 Each of Holdings andthe Borrower hereby irrevocably and unconditionally waives, to the fullestextent it may legally and effectively do so, any objection which it may nowor hereafter have to the laying of venue of any suit, action or proceedingarising out of or relating to this Agreement or the other Loan Documents in anyNew York State or Federal court. Each of the parties hereto hereby irrevocablywaives, to the fullest extent permitted by law, the defense of an inconvenientforum to the maintenance of such action or proceeding in any such court.

 

(c)                                  Each party to thisAgreement irrevocably consents to service of process in the manner provided fornotices in Section 9.01. Nothing in this Agreement will affect theright of any party to this Agreement to serve process in any other mannerpermitted by law.

 

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SECTION 9.16. Confidentiality.Each of the Administrative Agent, the Collateral Agent, the Issuing Bank andthe Lenders agrees to maintain the confidentiality of the Information, exceptthat Information may be disclosed (a) to its and its Affiliates’officers, directors, employees and agents, including accountants, legal counseland other advisors (it being understood that the persons to whom such disclosureis made will be informed of the confidential nature of such Information andinstructed to keep such Information confidential), (b) to the extentrequested by any regulatory authority or quasi-regulatory authority (such asthe National Association of Insurance Commissioners), (c) to the extentrequired by applicable laws or regulations or by any subpoena or similar legalprocess, (d) in connection with the exercise of any remedies hereunder orunder the other Loan Documents or any suit, action or proceeding relating tothe enforcement of its rights hereunder or thereunder, (e) subject to aprior or contemporaneous agreement containing provisions substantially the sameas those of this Section 9.16, to (i) any actual orprospective assignee of or participant in any of its rights or obligationsunder this Agreement and the other Loan Documents or (ii) any actual orprospective counterparty (or its advisors) to any swap or derivativetransaction relating to Holdings, the Borrower or any Subsidiary or any oftheir respective obligations, (f) with the consent of Holdings or theBorrower or (g) to the extent such Information becomes publicly availableother than as a result of a breach of this Section 9.16. Each ofthe Administrative Agent, the Collateral Agent, the Issuing Bank and theLenders agrees not to use any Information except for evaluating the performanceof Holdings, the Borrower and the Subsidiaries hereunder and enforcing therights, remedies and obligations hereunder and under the other Loan Documents.For the purposes of this Section, “Information” shall mean all informationreceived from Holdings or the Borrower and related to the Borrower or itsbusiness, other than any such information that was available to theAdministrative Agent, the Collateral Agent, the Issuing Bank or any Lender on anonconfidential basis prior to its disclosure by Holdings or the Borrower; providedthat, in the case of Information received from Holdings or the Borrower afterthe Closing Date, such information is clearly identified at the time ofdelivery as confidential. Any person required to maintain the confidentialityof Information as provided in this Section 9.16 shall be consideredto have complied with its obligation to do so if such person has exercised thesame degree of care to maintain the confidentiality of such Information as suchperson would accord its own confidential information. Notwithstanding any otherexpress or implied agreement, arrangement or understanding to the contrary,each of the parties hereto agrees that each other party hereto (and each of itsemployees, representatives or agents) are permitted to disclose to any persons,without limitation, the tax treatment and tax structure of the Loans and theother transactions contemplated by the Loan Documents and all materials of anykind (including opinions and tax analyses) that are provided to the LoanParties, the Lenders, the Arranger or any Agent related to such tax treatmentand tax aspects. To the extent not inconsistent with the immediately precedingsentence, this authorization does not extend to disclosure of any otherinformation or any other term or detail not related to the tax treatment or taxaspects of the Loans or the transactions contemplated by the Loan Documents.

 

SECTION 9.17. Delivery of LenderAddenda. Each initial Lender shall become a party to this Agreement bydelivering to the Administrative Agent a Lender Addendum duly executed by suchLender, the Borrower and the Administrative Agent.

 

SECTION 9.18. Effect of Amendment andRestatement of the Existing Credit Agreement. (a)  On the AmendmentEffective Date, the Existing Credit Agreement shall be 

 

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amended and restated in its entirety by this Agreement, and theExisting Credit Agreement shall thereafter be of no further force and effectexcept to evidence (i) the incurrence by the Borrowers of the “Obligations”under and as defined in the Existing Credit Agreement (whether or not such “Obligations”are contingent as of the Amendment Effective Date), (ii) therepresentations and warranties made by Holdings and the Borrowers prior to theAmendment Effective Date (which representations and warranties shall not besuperseded or rendered ineffective by this Agreement as they pertain to theperiod prior to the Amendment Effective Date) and (iii) any action oromission performed or required to be performed pursuant to such Existing CreditAgreement prior to the Amendment Effective Date (including any failure, priorto the Amendment Effective Date, to comply with the covenants contained in suchExisting Credit Agreement). The parties hereto acknowledge and agree that (a) thisAgreement and the other Loan Documents, whether executed and delivered inconnection herewith or otherwise, do not constitute a novation or terminationof the “Obligations” (as defined in the Existing Credit Agreement) under theExisting Credit Agreement as in effect prior to the Amendment Effective Dateand which remain outstanding, (b) the “Obligations” are in all respectscontinuing (as amended and restated hereby and which are hereinafter subject tothe terms herein) and (c) the Liens and security interests as grantedunder the applicable Loan Documents securing payment of such “Obligations” arein all respects continuing and in full force and effect and are reaffirmedhereby.

 

(b)                                 On and after theAmendment Effective Date, (i) all references to the Existing CreditAgreement in the Loan Documents (other than this Agreement) shall be deemed torefer to the Existing Credit Agreement, as amended and restated hereby, (ii) allreferences to any section (or subsection) of the Existing Credit Agreementin any Loan Document (but not herein) shall be amended to become, *mutatis mutandis*, references to the corresponding provisionsof this Agreement and (iii) except as the context otherwise provides, onor after the Amendment Effective Date, all references to this Agreement herein(including for purposes of indemnification and reimbursement of fees) shall bedeemed to be reference to the Existing Credit Agreement as amended and restatedhereby.

 

(c)                                  This amendment andrestatement is limited as written and is not a consent to any other amendment,restatement or waiver or other modification, whether or not similar and, exceptas expressly provided herein or in any other Loan Document, all terms andconditions of the Loans Documents remain in full force and effect unlessotherwise specifically amended hereby or by any other Loan Document.

 

(d)                                 This amendment andrestatement shall not alter, modify or in any way amend the schedules andexhibits to the Existing Credit Agreement (and such schedules and exhibitsshall continue to be schedules and exhibits hereto), other than Schedule 2.01,which Schedule 2.01 as it exists on the Amendment Effective Date isattached hereto as Exhibit A.

 

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

 

| TRUE TEMPER  CORPORATION       |
|--------------------------------|
|                           |
|                           |
| By:                            |   |
|                           | Name. |
|                           | Title: |
|                           |
|                           |
| TRUE TEMPER  SPORTS, INC. |
|                           |
|                           |
| By:                            |   |
|                           | Name: |
|                           | Title: |

 

*(signaturescontinue on next page)*

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CREDIT SUISSE,CAYMAN ISLANDS BRANCH (formerly known as Credit Suisse First Boston, actingthrough its Cayman Islands Branch), as Administrative Agent, Collateral Agent,Issuing Bank, Revolving Credit Lender, Term Lender, Swingline Lender andArranger

 

| By:    |   |
|--------|--------|
|   | Name:  |
|   | Title: |
|   |
| By:    |   |
|   | Name:  |
|   | Title: |

 

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