**Exhibit 10.9**

 

 

 

$455,000,000

 

CREDIT AGREEMENT

 

Dated as of November 22, 2005

 

among

 

POLYMER GROUP, INC.,as Borrower,

 

THE LENDERS REFERRED TO HEREIN,

 

CITICORP NORTH AMERICA, INC.,as Administrative Agent, Documentation Agent,Collateral Agent and Syndication Agent,

 

and

 

CITIGROUP GLOBAL MARKETS INC.,as Sole Lead Arranger and Sole Bookrunner

 

 

CahillGordon & Reindel LLP80 Pine StreetNew York, New York  10005

 

 

 

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TABLE OF CONTENTS

 
| ** **                     | ** **                                                                                     | **Page** |
|--------------------------------|------------------------------------------------------------------------------------------------|----------|
|                           |                                                                                           |     |
| ARTICLE I                      |                                                                                           |
|                           |                                                                                           |     |
| DEFINITIONS                    |                                                                                           |
| SECTION 1.01.                  | Defined Terms                                                                                  | 1        |
| SECTION 1.02.                  | Classification of Loans and Borrowings                                                         | 27       |
| SECTION 1.03.                  | Terms Generally                                                                                | 27       |
|                           |                                                                                           |     |
| ARTICLE II                     |                                                                                           |
|                           |                                                                                           |     |
| THE CREDITS                    |                                                                                           |
|                           |                                                                                           |     |
| SECTION 2.01.                  | Credit Commitments                                                                             | 27       |
| SECTION 2.02.                  | Procedure for Borrowing                                                                        | 28       |
| SECTION 2.03.                  | Conversion and Continuation Options for Loans                                                  | 29       |
| SECTION 2.04.                  | Swingline Loans                                                                                | 30       |
| SECTION 2.05.                  | Optional and Mandatory Prepayments of Loans; Repayments of  Term Loans                    | 31       |
| SECTION 2.06.                  | Letters of Credit                                                                              | 34       |
| SECTION 2.07.                  | Repayment of Loans; Evidence of Debt                                                           | 37       |
| SECTION 2.08.                  | Interest Rates and Payment Dates                                                               | 38       |
| SECTION 2.09.                  | Computation of Interest                                                                        | 39       |
| SECTION 2.10.                  | Fees                                                                                           | 39       |
| SECTION 2.11.                  | Termination, Reduction or Adjustment of Commitments                                            | 40       |
| SECTION 2.12.                  | Inability to Determine Interest Rate; Unavailability of Deposits;  Inadequacy of Interest Rate | 40       |
| SECTION 2.13.                  | Pro Rata Treatment and Payments                                                                | 41       |
| SECTION 2.14.                  | Illegality                                                                                     | 42       |
| SECTION 2.15.                  | Requirements of Law                                                                            | 42       |
| SECTION 2.16.                  | Taxes                                                                                          | 43       |
| SECTION 2.17.                  | Indemnity                                                                                      | 45       |
| SECTION 2.18.                  | Change of Lending Office                                                                       | 45       |
| SECTION 2.19.                  | Sharing of Setoffs                                                                             | 45       |
| SECTION 2.20.                  | Assignment of Commitments Under Certain Circumstances                                          | 46       |
|                           |                                                                                           |     |
| ARTICLE III                    |                                                                                           |
|                           |                                                                                           |     |
| REPRESENTATIONS AND WARRANTIES |                                                                                           |
|                           |                                                                                           |     |
| SECTION 3.01.                  | Organization, etc.                                                                             | 47       |
| SECTION 3.02.                  | Due Authorization, Non-Contravention, etc.                                                     | 47       |
| SECTION 3.03.                  | Government Approval, Regulation, etc.                                                          | 47       |
| SECTION 3.04.                  | Validity, etc.                                                                                 | 48       |
| SECTION 3.05.                  | Financial Information                                                                          | 48       |
| SECTION 3.06.                  | No Material Adverse Effect                                                                     | 48       |
| SECTION 3.07.                  | Litigation                                                                                     | 48       |
| SECTION 3.08.                  | Compliance with Laws and Agreements                                                            | 48       |
| SECTION 3.09.                  | Subsidiaries                                                                                   | 48       |

 

i

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| SECTION 3.10.         | Ownership of Properties                                                                           | 48     |
|-----------------------|---------------------------------------------------------------------------------------------------|--------|
| SECTION 3.11.         | Taxes                                                                                             | 49     |
| SECTION 3.12.         | Pension and Welfare Plans                                                                         | 49     |
| SECTION 3.13.         | Environmental                                                                                     | 50     |
| SECTION 3.14.         | Regulations U and X                                                                          | 51     |
| SECTION 3.15.         | Disclosure; Accuracy of Information; Pro Forma Balance Sheets and  Projected Financial Statements | 51     |
| SECTION 3.16.         | Insurance                                                                                         | 52     |
| SECTION 3.17.         | Labor Matters                                                                                     | 52     |
| SECTION 3.18.         | Solvency                                                                                          | 52     |
| SECTION 3.19.         | Securities                                                                                        | 52     |
| SECTION 3.20.         | Indebtedness Outstanding                                                                          | 53     |
| SECTION 3.21.         | Security Documents                                                                                | 53     |
| SECTION 3.22.         | Anti-Terrorism Laws                                                                               | 54     |
|                  |                                                                                              |   |
| ARTICLE IV            |                                                                                              |
|                  |                                                                                              |
| CONDITIONS            |                                                                                              |
|                  |                                                                                              |   |
| SECTION 4.01.         | Effective Date                                                                                    | 54     |
| SECTION 4.02.         | Conditions to Each Credit Event                                                                   | 60     |
|                  |                                                                                              |   |
| ARTICLE V             |                                                                                              |
|                  |                                                                                              |
| AFFIRMATIVE COVENANTS |                                                                                              |
|                  |                                                                                              |   |
| SECTION 5.01.         | Financial Information, Reports, Notices, etc.                                                     | 61     |
| SECTION 5.02.         | Compliance with Laws, etc.                                                                        | 63     |
| SECTION 5.03.         | Maintenance of Properties                                                                         | 63     |
| SECTION 5.04.         | Insurance                                                                                         | 63     |
| SECTION 5.05.         | Books and Records; Visitation Rights                                                              | 64     |
| SECTION 5.06.         | Environmental Covenant                                                                            | 64     |
| SECTION 5.07.         | Information Regarding Collateral                                                                  | 65     |
| SECTION 5.08.         | Existence; Conduct of Business                                                                    | 66     |
| SECTION 5.09.         | Performance of Obligations                                                                        | 66     |
| SECTION 5.10.         | Casualty and Condemnation                                                                         | 66     |
| SECTION 5.11.         | Pledge of Additional Collateral                                                                   | 66     |
| SECTION 5.12.         | Further Assurances                                                                                | 67     |
| SECTION 5.13.         | Use of Proceeds                                                                                   | 67     |
| SECTION 5.14.         | Payment of Taxes                                                                                  | 67     |
| SECTION 5.15.         | Equal Security for Loans and Notes                                                                | 67     |
| SECTION 5.16.         | Guarantees                                                                                        | 68     |
| SECTION 5.17.         | Subordination of Intercompany Loans                                                               | 68     |
| SECTION 5.18.         | Interest Rate Protection                                                                          | 68     |
|                  |                                                                                              |   |
| ARTICLE VI            |                                                                                              |
|                  |                                                                                              |
| NEGATIVE COVENANTS    |                                                                                              |
|                  |                                                                                              |   |
| SECTION 6.01.         | Indebtedness; Certain Equity Securities                                                           | 69     |
| SECTION 6.02.         | Liens                                                                                             | 71     |

 

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| SECTION 6.03.     | Fundamental Changes; Line of Business                                            | 73     |
|-------------------|----------------------------------------------------------------------------------|--------|
| SECTION 6.04.     | Investments, Loans, Advances, Guarantees and Acquisitions                        | 74     |
| SECTION 6.05.     | Asset Sales                                                                      | 75     |
| SECTION 6.06.     | Sale and Leaseback Transactions                                                  | 76     |
| SECTION 6.07.     | Restricted Payments                                                              | 77     |
| SECTION 6.08.     | Transactions with Affiliates                                                     | 77     |
| SECTION 6.09.     | Restrictive Agreements                                                           | 78     |
| SECTION 6.10.     | Amendments or Waivers of Certain Documents; Prepayments of Certain  Indebtedness | 78     |
| SECTION 6.11.     | No Other “Designated Senior Indebtedness.”                             | 78     |
| SECTION 6.12.     | Interest Expense Coverage Ratio                                                  | 79     |
| SECTION 6.13.     | Total Leverage Ratio                                                             | 80     |
| SECTION 6.14.     | Capital Expenditures                                                             | 81     |
| SECTION 6.15.     | Anti-Terrorism Law                                                               | 81     |
| SECTION 6.16.     | Embargoed Person                                                                 | 82     |
| SECTION 6.17.     | Anti-Money Laundering                                                            | 82     |
|              |                                                                             |   |
| ARTICLE VII       |                                                                             |
|              |                                                                             |
| EVENTS OF DEFAULT |                                                                             |
|              |                                                                             |   |
| SECTION 7.01.     | Listing of Events of Default                                                     | 82     |
| SECTION 7.02.     | Action if Bankruptcy                                                             | 84     |
| SECTION 7.03.     | Action if Other Event of Default                                                 | 85     |
| SECTION 7.04.     | Action if Event of Termination                                                   | 85     |
|              |                                                                             |   |
| ARTICLE VIII      |                                                                             |
|              |                                                                             |
| THE AGENTS        |                                                                             |
|              |                                                                             |   |
| SECTION 8.01.     | The Agents                                                                       | 85     |
|              |                                                                             |   |
| ARTICLE IX        |                                                                             |
|              |                                                                             |
| MISCELLANEOUS     |                                                                             |
|              |                                                                             |   |
| SECTION 9.01.     | Notices                                                                          | 87     |
| SECTION 9.02.     | Survival of Agreement                                                            | 88     |
| SECTION 9.03.     | Binding Effect                                                                   | 88     |
| SECTION 9.04.     | Successors and Assigns                                                           | 88     |
| SECTION 9.05.     | Expenses; Indemnity                                                              | 91     |
| SECTION 9.06.     | Right of Setoff                                                                  | 93     |
| SECTION 9.07.     | Applicable Law                                                                   | 93     |
| SECTION 9.08.     | Waivers; Amendment                                                               | 93     |
| SECTION 9.09.     | Interest Rate Limitation                                                         | 97     |
| SECTION 9.10.     | Entire Agreement                                                                 | 97     |
| SECTION 9.11.     | WAIVER OF JURY TRIAL                                                             | 97     |
| SECTION 9.12.     | Severability                                                                     | 97     |
| SECTION 9.13.     | Counterparts                                                                     | 97     |
| SECTION 9.14.     | Headings                                                                         | 97     |
| SECTION 9.15.     | Jurisdiction; Consent to Service of Process                                      | 98     |

 

iii

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| SECTION 9.16. | Confidentiality                         | 98 |
|---------------|-----------------------------------------|----|
| SECTION 9.17. | Citigroup Direct Website Communications | 98 |

 

iv

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| EXHIBIT A            | Form of  Administrative Questionnaire                            |   |
|----------------------|------------------------------------------------------------------|--------|
| EXHIBIT B            | Form of  Borrowing Request                                       |   |
| EXHIBIT C            | Form of  Assignment and Acceptance                               |   |
| EXHIBIT D            | Form of  Compliance Certificate                                  |   |
| EXHIBIT E            | Form of  Indemnity, Subrogation and Contribution Agreement       |   |
| EXHIBIT F-1          | Form of Term  Note                                               |   |
| EXHIBIT F-2          | Form of  Revolving Note                                          |   |
| EXHIBIT F-3          | Form of  Swingline Note                                          |   |
| EXHIBIT G            | Form of  Closing Certificate                                     |   |
| EXHIBIT H            | Form of  Guarantee Agreement                                     |   |
| EXHIBIT I            | Form of  Pledge Agreement                                        |   |
| EXHIBIT J            | Form of  Security Agreement                                      |   |
| EXHIBIT K            | Form of Opinion  of Local Counsel                                |   |
| EXHIBIT L            | Form of  Solvency Certificate                                    |   |
| EXHIBIT M            | Form of  Mortgage                                                |   |
| EXHIBIT N            | Form of  Landlord Access Agreement                               |   |
|                 |                                                             |   |
| SCHEDULE  1.01       | Permitted  Restructuring                                         |   |
| SCHEDULE  1.02       | Existing  Letters of Credit                                      |   |
| SCHEDULE  2.01       | Lenders and  Commitments                                         |   |
| SCHEDULE  3.05       | Financial  Information                                           |   |
| SCHEDULE  3.09       | Subsidiaries                                                     |   |
| SCHEDULE  3.10(b)    | Leased and  Owned Real Property                                  |   |
| SCHEDULE  3.13(a)    | Facilities/Properties  Not in Compliance with Environmental Laws |   |
| SCHEDULE  3.13(b)    | Environmental  Claims                                            |   |
| SCHEDULE  3.13(c)    | Hazardous  Materials                                             |   |
| SCHEDULE  3.16       | Insurance                                                        |   |
| SCHEDULE  3.19       | Securities                                                       |   |
| SCHEDULE  3.20(a)    | Indebtedness  to Be Paid                                         |   |
| SCHEDULE  3.20(b)    | Liens to Be  Terminated                                          |   |
| SCHEDULE  3.21(d)    | Mortgage  Filing Offices                                         |   |
| SCHEDULE  4.01(f)    | Local  Counsel                                                   |   |
| SCHEDULE  4.01(u)(A) | Mortgaged  Properties                                            |   |
| SCHEDULE  4.01(u)(C) | Title  Insurance Amounts                                         |   |
| SCHEDULE  6.01       | Existing  Indebtedness                                           |   |
| SCHEDULE  6.02       | Existing  Liens                                                  |   |
| SCHEDULE  6.04       | Existing  Investments                                            |   |
| SCHEDULE  6.09       | Existing  Restrictions                                           |   |

 

v

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CREDIT AGREEMENT (this “Agreement”) dated as of November 22, 2005,among POLYMER GROUP, INC., a Delaware corporation (the “Borrower”);  the financial institutions listed on Schedule 2.01,as such Schedule may from time to time be supplemented and amended (the “Lenders”);CITICORP NORTH AMERICA, INC., as administrative agent (in such capacity, the “AdministrativeAgent”) for the Lenders, as documentation agent (in such capacity, the “DocumentationAgent”), as syndication agent (in such capacity, the “Syndication Agent”),and as collateral agent for the Secured Parties (the “Collateral Agent”);and CITIGROUP GLOBAL MARKETS INC. (“CGMI”), as sole lead arranger andsole bookrunner (in such capacity, the “Lead Arranger”).

 

The parties hereto agree as follows:

 

# ARTICLE I

#  

# DEFINITIONS

#  

SECTION 1.01.              DefinedTerms.  As used in this Agreement,the following terms shall have the meanings specified below:

 

“ABR Borrowing” means a Borrowing comprised of ABR Loans.

 

“ABR Loan” means any Loan bearing interest at a rate determinedby reference to the Alternate Base Rate in accordance with the provisions ofArticle II.

 

“Acquisition Consideration” means the purchase consideration forany Permitted Acquisition and all other payments by the Borrower or any of itsSubsidiaries in exchange for, or as part of, or in connection with anyPermitted Acquisition, whether paid in cash or by exchange of Equity Interestsor of assets, by the assumption of Indebtedness or otherwise and whetherpayable at or prior to the consummation of such Permitted Acquisition ordeferred for payment at any future time, whether or not any such future paymentis subject to the occurrence of any contingency, and includes any and allpayments representing the purchase price and any assumptions of Indebtedness, “earn-outs”and other agreements to make any payment the amount of which is, or the termsof payment of which are, in any respect subject to or contingent upon therevenues, income, cash flow or profits (or the like) of any person or business.

 

“Additional Collateral” has the meaning assigned to such term inSection 5.11.

 

“Adjusted LIBO Rate” means, with respect to any EurodollarBorrowing for any Interest Period, an interest rate per annum (rounded upwards,if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for suchInterest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” has the meaning assigned to such term inthe preamble hereto.

 

“Administrative Questionnaire” means an Administrative Questionnairein the form of Exhibit A.

 

“Affiliate” of any Person means any other Person which, directlyor indirectly, controls, is controlled by or is under common control with suchPerson (excluding any trustee under, or any committee with responsibility foradministering, any Plan). A Person shall be deemed to be “controlled by” anyother Person if such other Person possesses, directly or indirectly, power

 

(a)           to vote 10% or moreof the securities (on a fully diluted basis) of such Person having ordinaryvoting power for the election of directors or managing general partners; or

 

----

 

(b)           to direct or causethe direction of the management and policies of such Person whether by contractor otherwise.

 

“Agent Fees” has the meaning assigned to such term in Section 2.10(c).

 

“Agents” means the Administrative Agent and the CollateralAgent.

 

“Aggregate Revolving Credit Exposure” means the aggregate amountof the Revolving Lenders’ Revolving Credit Exposures.

 

“Agreement” has the meaning assigned to such term in thepreamble hereto.

 

“Alternate Base Rate” means for any day, a rate per annum equalto the highest of (a) the Administrative Agent’s Base Rate in effect onsuch day, (b) 0.5% perannum above thelatest three-week moving average of secondary market morning offering rates inthe United States for three-month certificates of deposit of major UnitedStates money market banks, such three-week moving average being determinedweekly on each Monday (or, if any such day is not a Business Day, on the nextsucceeding Business Day) for the three-week period ending on the next previousFriday by the Administrative Agent on the basis of such rates reported bycertificate of deposit dealers to and published by the Federal Reserve Bank ofNew York or, if such publication shall be suspended or terminated, on thebasis of quotations for such rates received by the Administrative Agent fromthree New York certificate of deposit dealers of recognized standingselected by the Administrative Agent, in either case adjusted to the nearest0.25% or, if there is no nearest 0.25%, to the next higher 0.25% (the “Certificateof Deposit Rate”), and (c) the Federal Funds Rate in effect on suchday plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change inthe Base Rate, the Certificate of Deposit Rate or the Federal Funds Rate shallbe effective as of the opening of business on the effective day of such changein the Base Rate, the Certificate of Deposit Rate or the Federal Funds Rate,respectively.

 

“Applicable Rate” means, for any day, (i) with respect toTerm Loans, (A) 1.25% per annum, inthe case of ABR Loans, and (B) 2.25% perannum, in the case of Eurodollar Loans, and (ii) with respect toRevolving Loans, (A) before the Trigger Date, (x) 1.25%**per annum, in the caseof ABR Loans, and (y) 2.25% per annum,in the case of Eurodollar Loans, and (B) on and after the Trigger Date,the applicable rate per annum**set forth in the table below (x) under the caption “ABRRevolving Loans Spread,” in the case of ABR Loans, and (y) under thecaption “Eurodollar Revolving Loans Spread,” in the case of Eurodollar Loans,in each case based upon the Total Leverage Ratio as of the most recent determinationdate:

 
| **Total  Leverage  Ratio**          | ** ** | **ABR  Revolving Loans  Spread** | ** ** | **Eurodollar  Revolving Loans  Spread** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|-----------------------------------------|------------|
| >3.00 to 1.00                    |       | 1.25                             | %          | 2.25                                    | %          |
| <3.00 to  1.00  >2.50 to 1.00 |       | 1.00                             | %          | 2.00                                    | %          |
| <2.50 to  1.00                   |       | 0.75                             | %          | 1.75                                    | %          |

 

For purposes of such calculation of the Applicable Rate with respect toRevolving Loans on and after the Trigger Date, (i) the Total Leverage Ratioshall be determined as of the end of each fiscal quarter of the Borrower’s fiscalyear based upon the Borrower’s consolidated financial statements deliveredpursuant to Section 5.01(a) or (b) and (ii) each change in theApplicable Rate resulting from a

 

2

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change in the Total Leverage Ratio shall be effective three (3)Business Days after the date on which the Administrative Agent shall havereceived the applicable financial statements and a Compliance Certificatecalculating the Total Leverage Ratio. If at any time the Borrower has notsubmitted to the Administrative Agent the applicable information as and whenrequired under Section 5.01(a) or (b), the Applicable Rate shall be thehighest rate set forth in the table above until such time as the Borrower hasprovided the information required under Section 5.01(a) or (b). Within one(1) Business Day of receipt of the applicable information as and when requiredunder Section 5.01(a) or (b), the Administrative Agent shall give eachLender telefacsimile or telephonic notice (confirmed in writing) of the ApplicableRate in effect from such date.

 

“Asset Sale” means any direct or indirect sale, transfer, lease,conveyance or other disposition by the Borrower or any of its Subsidiaries ofany of its Property, including any sale or issuance of any Equity Interests ofany Subsidiary, except (a) sales, dispositions and leases permitted bySection 6.05 (other than subsection (ix) thereof) and (b) any suchtransaction or series of transactions which, if an Asset Sale, would notgenerate Net Proceeds in excess of $2.0 million (or, when taken together withall other such transactions, in excess of $5.0 million in any FiscalYear).

 

“Assignment and Acceptance” means an assignment and acceptanceentered into by a Lender and an assignee (with the consent of any party whoseconsent is required by Section 9.04(b)), and accepted by the AdministrativeAgent, in the form of Exhibit C or such other form as shall beapproved by the Administrative Agent.

 

“Attributable Indebtedness” means, when used with respect to any Sale and Leaseback Transaction, asat the time of determination, the present value (discounted at the interestrate determined by the Borrower in good faith as its cost of borrowing forIndebtedness of comparable term) of the total obligations of the lessee forrental payments during the remaining term of the lease included in any suchSale and Leaseback Transaction; provided that if such Sale and LeasebackTransaction results in a Capital Lease Obligation, the amount of Indebtednessrepresented thereby will be determined in accordance with the definition of “ConsolidatedInterest Expense”.

 

“Authorized Officer” means, with respect to the Borrower, thoseof its officers whose signature and incumbency has been certified to theAdministrative Agent, the Collateral Agent and the Lenders by the Secretary ofthe Borrower in a certificate dated the Effective Date or any successorthereto.

 

“Available Revolving Credit Commitment” means as to anyRevolving Lender, at any time of determination, an amount equal to suchRevolving Lender’s Revolving Credit Commitment at such time minus suchRevolving Lender’s Revolving Credit Exposure at such time.

 

“Base Amount” has the meaning assigned to such term inSection 6.14(a).

 

“Base Rate” means the rate of interest per annum publiclyannounced from time to time by the Administrative Agent as its base rate ineffect at its principal office in New York City (the Base Rate not beingintended to be the lowest rate of interest charged by the Administrative Agentin connection with extensions of credit to debtors) (any change in such rateannounced by the Administrative Agent shall take effect at the opening ofbusiness on the day specified in the public announcement of such change).

 

“Board of Governors” means the Board of Governors of the FederalReserve System of the United States.

 

3

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“Borrower” has the meaning ascribed to such term in the preambleto this Agreement.

 

“Borrowing” means a Loan or group of Loans to the Borrower ofthe same Class and Type made (including through a conversion or continuation)by the applicable Lenders on a single date and as to which a single InterestPeriod is in effect.

 

“Borrowing Date” means any Business Day specified in a noticepursuant to Section 2.02 as a date on which the Borrower requests Loans tobe made hereunder.

 

“Borrowing Request” has the meaning assigned to such term inSection 2.02(a).

 

“Business Day” means a day other than a Saturday, Sunday orother day on which commercial banks in New York, New York areauthorized or required by law to close.

 

“Canadian Dollars” and “Cdn. $” means lawful money ofCanada.

 

“Capital Expenditures” means, for any period, any and allexpenditures made by the Borrower or any of its Subsidiaries in such period forassets added to or reflected in its property, plant and equipment accounts orother similar capital asset accounts or comparable items (which, for theavoidance of doubt, shall not include normal replacements and maintenance whichare properly charged to current operations) or any other capital expendituresthat are, or should be, set forth as “additions to plant, property andequipment” on the financial statement prepared in accordance with GAAP, whethersuch asset is purchased for cash or financed as an account payable or by theincurrence of Indebtedness, accrued as a liability or otherwise, but excludingexpenditures made in connection with the repair, replacement, substitution orrestoration of property pursuant to Section 2.05(c)(iv) or in connection withthe reinvestment in capital assets pursuant to Section 2.05(c)(iii).

 

“Capital Lease Obligations” means all monetary or financialobligations of the Borrower and its Subsidiaries under any leasing or similararrangement conveying the right to use real or personal property, or acombination thereof, which, in accordance with GAAP, would or should beclassified and accounted for as capital leases, and the amount of suchobligations shall be the capitalized amount thereof determined in accordancewith GAAP and the stated maturity thereof shall be the date of the last paymentof rent or any other amount due under such lease prior to the first date onwhich such lease may be terminated by the lessee without payment of a penalty.

 

“Cash Equivalents” means Permitted Investments (other than asdescribed in clause (g) of the definition thereof).

 

“Cash Interest Expense” means, for any period, ConsolidatedInterest Expense for such period, excluding any interest expense not payable incash (such as, for example, amortization of discount and amortization of debtissuance costs), net of interest income.

 

“CERCLA” means the Comprehensive Environmental Response,Compensation, and Liability Act of 1980, as amended.

 

“CERCLIS” means the Comprehensive Environmental Response,Compensation and Liability Information System List.

 

“Certificate of Deposit Rate” has the meaning assigned to suchterm in the definition of “Alternate Base Rate”.

 

4

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“CGMI” has the meaning assigned to such term in the preamblehereto.

 

“Change in Control” means any one or more of the followingevents shall occur and be continuing:

 

(i)           anyPerson (other than the GOF Holders) shall own, collectively, on a fully-dilutedbasis (in other words, giving effect to the exercise of any warrants, optionsand conversion and other rights), more than 35% of the aggregate shares ofvoting capital stock of the Borrower (representing at least 35% of the votesthat may be cast in an election of directors of the Borrower); or

 

(ii)          duringany period of 12 consecutive calendar months, at least a majority of the Boardof Directors of the Borrower shall no longer be composed of individuals (w) whowere appointed by one or more of the GOF Holders, (x) who were members of saidBoard on the first day of such period, (y) whose election or nomination to saidBoard was approved by individuals referred to in clause (x) above constitutingat the time of such election or nomination at least a majority of said Board or(z) whose election or nomination to said Board was approved by individualsreferred to in clauses (w), (x) and (y) above constituting at the time of suchelection or nomination at least a majority of said Board.

 

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

 

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

 

“Closing Certificate” means a certificate substantially in theform of Exhibit G.

 

“Code” means the Internal Revenue Code of 1986, as amended fromtime to time.

 

“Collateral” means each Mortgaged Property and any and all otherProperty of whatever kind and nature pledged as collateral under any SecurityDocument.

 

“Collateral Account” means the collateral account or sub-accountestablished and maintained by the Collateral Agent in its name as CollateralAgent for the benefit of the Secured Parties, in accordance with the provisionsof the Security Agreement.

 

“Collateral Agent” has the meaning ascribed to such term in the preambleto this Agreement.

 

“Commitment” means, with respect to any Lender, such Lender’sRevolving Credit Commitment or Term Commitment or any combination thereof (asthe context requires).

 

“Commitment Fee” has the meaning assigned to such term inSection 2.10(a).

 

“Commitment Fee Average Daily Amount” has the meaning assignedto such term in Section 2.10(a).

 

5

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“Commitment Fee Percentage” means 0.50% per annum; provided,however, that after the Trigger Date, the Commitment Fee Percentage shall meanthe applicable percentage set forth in the table below under the appropriatecaption:

 
| **Total Leverage Ratio** | ** ** | **Commitment Fee Percentage** | ** ** |
|--------------------------|------------|-------------------------------|------------|
| ** **               | ** ** | ** **                    | ** ** |
| >2.50:1               |       | 0.500                         | %          |
| <2.50:1               |       | 0.375                         | %          |

 

For purposes of such calculation of the Commitment Fee Percentage onand after the Trigger Date, (i) the Total Leverage Ratio shall bedetermined as of the end of each fiscal quarter of the Borrower’s fiscal yearbased upon the Borrower’s consolidated financial statements delivered pursuantto Section 5.01(a) or (b) and (ii) each change in the Commitment FeePercentage resulting from a change in the Total Leverage Ratio shall beeffective three (3) Business Days after the date on which the AdministrativeAgent shall have received the applicable financial statements and a ComplianceCertificate calculating the Total Leverage Ratio. If at any time the Borrowerhas not submitted to the Administrative Agent the applicable information as andwhen required under Section 5.01(a) or (b), the Commitment Fee Percentageshall be the higher rate set forth in the table above until such time as theBorrower has provided the information required under Section 5.01(a) or(b). Within one (1) Business Day of receipt of the applicable information asand when required under Section 5.01(a) or (b), the Administrative Agentshall give each Lender telefacsimile or telephonic notice (confirmed inwriting) of the Commitment Fee Percentage in effect from such date.

 

“Commitment Fee Termination Date” has the meaning assigned tosuch term in Section 2.10(a).

 

“Commitment Percentage” means the percentage of the TotalRevolving Credit Commitment represented by such Lender’s Revolving CreditCommitment. If the Revolving Credit Commitments have terminated or expired, theCommitment Percentage shall be determined based upon the Revolving Credit Commitmentsmost recently in effect, giving effect to any assignments.

 

“Commitments” means the Revolving Credit Commitments, theSwingline Commitments and the Term Commitments.

 

“Communications” has the meaning assigned to such term inSection 9.17(a).

 

“Compliance Certificate” has the meaning assigned to such termin Section 5.01(a) and shall be substantially in the form of Exhibit D.

 

“Conduit Financing Arrangement” has the meaning assigned to suchterm in Section 2.16.

 

“Consolidated Current Assets” means, as at any date ofdetermination, the total assets of the Borrower and its Subsidiaries which mayproperly be classified as current assets on a consolidated balance sheet of theBorrower and its Subsidiaries in accordance with GAAP (other than cash and CashEquivalents).

 

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“Consolidated Current Liabilities” means, as at any date ofdetermination, the total liabilities of the Borrower and its Subsidiaries whichmay properly be classified as current liabilities (other than the currentportion of any Loans) on a consolidated balance sheet of the Borrower and itsSubsidiaries in accordance with GAAP.

 

“Consolidated EBITDA” means, for any period, Consolidated NetIncome for such period, plus, without duplication and to the extent deducted indetermining Consolidated Net Income for such period, the sum of:  (a) the aggregate amount of ConsolidatedInterest Expense for such period, (b) the aggregate amount of income andfranchise tax expense for such period, (c) all amounts attributable to depreciationand amortization for such period, (d) all unusual or non-recurring non-cashcharges during such period (excluding any non-cash item of expense requiring anaccrual or reserve for future cash expense), (e) plant restructuring andrealignment costs not to exceed $25.0 million in the aggregate during the termof this Agreement, (f) all fees and expenses paid during such period directlyrelating to the refinancing of the Existing Credit Agreement and (g) allnon-cash stock compensation expense; and minus, without duplication and to theextent included in determining Consolidated Net Income for such period, allnon-recurring non-cash gains during such period; all as determined on a consolidatedbasis with respect to the Borrower and its Subsidiaries in accordance with GAAP.Other than for purposes of calculating Excess Cash Flow, Consolidated EBITDAshall be calculated on a Pro Forma Basis to give effect to the Transactions,any Permitted Acquisition and Asset Sales consummated at any time on or afterthe first day of the Test Period thereof as if the Transactions and each suchPermitted Acquisition had been effected on the first day of such period and asif each such Asset Sale had been consummated on the day prior to the first dayof such period.

 

“Consolidated Indebtedness” means, at a particular date, theaggregate stated balance sheet amount of all Indebtedness of the Borrower andits Subsidiaries determined on a consolidated basis in accordance with GAAP atsuch date.

 

“Consolidated Interest Expense” means, for any period, the totalconsolidated interest expense of the Borrower and its Subsidiaries for suchperiod determined on a consolidated basis in accordance with GAAP *plus*, without duplication:

 

(a)           imputed interest onCapital Lease Obligations and Attributable Indebtedness of the Borrower and itsSubsidiaries for such period;

 

(b)           commissions,discounts and other fees and charges owed by the Borrower or any of itsSubsidiaries with respect to letters of credit securing financial obligations,bankers’ acceptance financing and receivables financings for such period;

 

(c)           amortization of debtissuance costs, debt discount or premium and other financing fees and expensesincurred by the Borrower or any of its Subsidiaries for such period;

 

(d)           all interest paid orpayable with respect to discontinued operations of the Borrower or any of itsSubsidiaries for such period;

 

(e)           the interest portionof any deferred payment obligations of the Borrower or any of its Subsidiariesfor such period; and

 

(f)            all interest on anyIndebtedness of the Borrower or any of its Subsidiaries of the type describedin clause (iii) or (x) of the definition of “Indebtedness” for such period

 

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Consolidated Interest Expense and Cash Interest Expense (other than forpurposes of calculating Excess Cash Flow) shall be calculated on a Pro FormaBasis to give effect to any Indebtedness incurred, assumed or permanentlyrepaid or extinguished during the relevant Test Period in connection with theTransactions, any Permitted Acquisitions and Asset Sales as if such incurrence,assumption, repayment or extinguishing had been effected on the first day ofsuch period.

 

“Consolidated Net Income” means, for any period, the sum of netincome (or loss) and minority interests for such period of the Borrower and itsSubsidiaries determined on a consolidated basis in accordance with GAAP, butexcluding:  (a) any income (or loss) ofany Person if such Person is not a Subsidiary of the Borrower, except that theaggregate amount of cash actually distributed by such Person during such periodto the Borrower or a Subsidiary of the Borrower as a dividend or otherdistribution shall be included; (b) the amount of any cash distributed by anynon-Wholly Owned Subsidiary to a Person other than the Borrower or any of itsSubsidiaries; (c) gains and losses due solely to fluctuations in currencyvalues and the related tax effects determined in accordance with GAAP for suchperiod; (d) unrealized gains and losses with respect to Hedging Agreements forsuch period; and (e) the income of any Subsidiary of the Borrower to the extentthat the declaration or payment of dividends or similar distributions by suchSubsidiary of that income is prohibited by operation of the terms of itscharter or any agreement, instrument, judgment, decree, statute, rule orgovernmental regulation applicable to such Subsidiary.

 

“Contested Collateral Lien Conditions” means (a) anyproceeding instituted contesting such Lien shall conclusively operate to staythe sale or forfeiture of any portion of the Collateral on account of suchLien; and (b) in the event the amount of any such Lien shall exceed$2.0 million, the Loan Party or its applicable Subsidiary shall eitherobtain a bond or maintain cash reserves, in either case, in an amountsufficient to pay and discharge such Lien and the Collateral Agent’s reasonableestimate of all interest and penalties related thereto.

 

“Credit Event” has the meaning assigned to such term inSection 4.02.

 

“Cumulative Retained Excess Cash FlowAmount” shall mean, at any date, an amount, not less thanzero, determined on a cumulative basis equal to (x) the amount of Excess CashFlow for all Fiscal Years (commencing with the Fiscal Year ending December 30,2006) which is not (and, in the case of any Fiscal Year where the respectiverequired date of prepayment has not yet occurred pursuant to Section2.05(c)(v), will not on such date of required prepayment be) required to beapplied in accordance with Section 2.05(c)(v) minus**(y) theaggregate amount of Capital Expenditures made on or prior to such date pursuantto Section 6.14(b)(ii).

 

“Debt Incurrence” has the meaning assigned to such term inSection 2.05(c)(ii).

 

“Debt Repayments” means, for any period, principal repaymentspermitted by Section 6.10 and optional prepayments (to the extent suchrepayments and optional prepayments are made from internally generated funds)of Indebtedness made by the Borrower and its Subsidiaries during such period(other than repayments or prepayments of intercompany loans); providedthat, with respect to payments of Revolving Loans, such payments shall only beincluded in this definition to the extent that such payment is accompanied by asimultaneous reduction of the Revolving Credit Commitments).

 

“Default” means any Event of Default, any Event of Terminationand any event or condition which upon notice, lapse of time or both wouldconstitute an Event of Default or Event of Termination.

 

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“Destruction” means any and all damage to, or loss ordestruction of, or loss of title to, all or any portion of the Property of theBorrower or any of its Subsidiaries.

 

“Disqualified Equity Interests” has the meaning assigned to suchterm in Section 6.01(b).

 

“Documentation Agent” has the meaning assigned to such term inthe preamble hereto.

 

“Dollars” or “$” means lawful money of the United Statesof America.

 

“Domestic Subsidiary” means any Subsidiary of the Borrower thatis not a Non-U.S. Subsidiary.

 

“Effective Date” means the date on which the conditionsspecified in Section 4.01 are satisfied (or waived in accordance withSection 9.08).

 

“Engagement Letter” means the Engagement Letter dated October 17,2005 between CGMI and the Borrower.

 

“Environment” means ambient air, surface water and groundwater(including potable water, navigable water and wetlands), the land surface orsubsurface strata, natural resources such as flora and fauna, or as otherwisedefined in any applicable Environmental Law.

 

“Environmental Claim” means any written accusation, allegation,notice of violation, claim, demand, order, directive, cost recovery action orother cause of action by, or on behalf of, any Governmental Authority or anyother Person for damages, injunctive or equitable relief, personal injury(including sickness, disease or death), Remedial Action costs, tangible orintangible property damage, natural resource damages, nuisance, pollution, anyadverse effect on the Environment caused by any Hazardous Material, or forfines, penalties or restrictions, resulting from or based upon:  (a) the existence, or the continuationof the existence, of a Release or threatened Release (including sudden ornon-sudden, accidental or non-accidental Releases); (b) exposure to anyHazardous Material; (c) the presence, generation, use, handling,transportation, storage, treatment or disposal of any Hazardous Material; or(d) the violation or alleged violation of any Environmental Law orEnvironmental Permit.

 

“Environmental Laws” means any and all applicable treaties, laws(including common law), rules, regulations, codes, ordinances, orders, decrees,judgments, injunctions or binding agreements issued, promulgated or enteredinto by any Governmental Authority, relating in any way to the Environment, preservationor reclamation of natural resources, the management, Release or threatenedRelease of, or exposure to, any Hazardous Material.

 

“Environmental Liability” means any liability, contingent orotherwise (including, but not limited to, any liability for damages, naturalresource damage, costs of environmental remediation, administrative oversightcosts, fines, penalties or indemnities), of the Borrower or any of itsSubsidiaries directly or indirectly resulting from or based upon(a) violation of any Environmental Law, (b) the generation, use,handling, transportation, storage, treatment or disposal of any Hazardous Materials,(c) exposure to any Hazardous Materials or (d) the Release orthreatened Release of any Hazardous Materials into the Environment.

 

“Environmental Permit” means any permit, approval,authorization, certificate, license, variance, filing or permission required byor from any Governmental Authority pursuant to any Environmental Law.

 

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“Equity Interests” means shares of capital stock, partnershipinterests, membership interests in a limited liability company, beneficialinterests in a trust or other equity ownership interests in a Person.

 

“Equity Issuance” has the meaning assigned to such term inSection 2.05(c)(i).

 

“Equity Rights” means all securities convertible or exchangeablefor Equity Interests and all warrants, options or other rights to purchase orsubscribe for any Equity Interests, whether or not presently convertible, exchangeableor exercisable.

 

“ERISA” means the Employee Retirement Income Security Act of1974, as the same may be amended from time to time.

 

“ERISA Affiliate” means any trade or business (whether or notincorporated) that, together with any Loan Party, is treated as a singleemployer under Sections 414(b) or (c) of the Code, and for the purpose ofSection 302 of ERISA and/or Section 412, 4971, 4977, 4980D, 4980E and/or each “applicablesection” under Section 414(t)(2) of the Code, within the meaning of Section414(b), (c), (m) or (o) of the Code.

 

“ERISA Event” means (a) any “reportable event,” as definedin Section 4043(c) of ERISA or the regulations issued thereunder, withrespect to a Pension Plan (other than an event for which the 30-day noticeperiod is waived by regulation); (b) the existence with respect to anyPension Plan of an “accumulated funding deficiency” (as defined inSection 412 of the Code or Section 302 of ERISA), whether or notwaived, the failure to make by its due date a required installment underSection 412(m) of the Code with respect to any Pension Plan or the failureto make any required contribution to a Multiemployer Plan; (c) the filingpursuant to Section 412(d) of the Code or Section 303(d) of ERISA ofan application for a waiver of the minimum funding standard with respect to anyPension Plan; (d) the incurrence by any Loan Party or ERISA Affiliate ofany liability under Title IV of ERISA with respect to any Pension Plan;(e) the receipt by any Loan Party or ERISA Affiliate from the PBGC or aplan administrator of any notice relating to an intention to terminate anyPension Plan, to appoint a trustee to administer any Pension Plan, or to takeany other action with respect to a Pension Plan that could result in materialliability to a Loan Party or a Subsidiary, or the occurrence of any event orcondition which could reasonably be expected to constitute grounds under ERISAfor the termination of or the appointment of a trustee to administer, anyPension Plan; (f) the incurrence by any Loan Party or ERISA Affiliate ofany liability with respect to the withdrawal or partial withdrawal from anyPension Plan or Multiemployer Plan; (g) the receipt by a Loan Party orERISA Affiliate of any notice concerning the imposition of Withdrawal Liabilityor a determination that a Multiemployer Plan is, or is expected to be, insolventor in reorganization, within the meaning of Title IV of ERISA;(h) the making of any amendment to any Pension Plan which could result inthe imposition of a lien or the posting of a bond or other security; or(i) the occurrence of a nonexempt prohibited transaction (within themeaning of Section 4975 of the Code or Section 406 of ERISA) whichcould result in liability to a Loan Party or any of the Subsidiaries.

 

“Eurodollar Borrowing” means a Borrowing comprised of EurodollarLoans.

 

“Eurodollar Loan” means any Loan bearing interest at a ratedetermined by reference to the Adjusted LIBO Rate in accordance with theprovisions of Article II.

 

“Event of Default” has the meaningassigned to such term in Section 7.01.

 

“Event of Termination” has the meaning assigned to such term inSection 7.01.

 

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“Excess Cash Flow” means, for the Borrower and its Subsidiaries,for any period, (a) the sum, without duplication, of:

 

(i)           ConsolidatedEBITDA for such period;

 

(ii)          extraordinaryor non-recurring cash receipts of the Borrower and its Subsidiaries, if any,during such period and not included in Consolidated EBITDA;

 

(iii)         reductionsto non-cash working capital of the Borrower and its Subsidiaries for suchperiod (i.e., the decrease, if any, in Consolidated Current Assets minusConsolidated Current Liabilities from the beginning to the end of such period);and

 

(iv)         tothe extent subtracted in determining Consolidated EBITDA, all items that didnot result from a cash payment by the Borrower or any of its Subsidiaries on aconsolidated basis during such period,

 

minus (b) the sum, without duplication, of:

 

(i)           theamount of any cash income and franchise taxes paid by the Borrower and itsSubsidiaries with respect to such period;

 

(ii)          CashInterest Expense of the Borrower and its Subsidiaries during such period;

 

(iii)         CapitalExpenditures committed or made in cash only from internally generated funds inaccordance with Section 6.14(a) and (c) during such period (and not deductedfrom Excess Cash Flow in any prior year);

 

(iv)         extraordinaryor non-recurring expenses and losses to the extent paid in cash by the Borrowerand its Subsidiaries, if any, during such period and not included inConsolidated EBITDA;

 

(v)          additionsto non-cash working capital of the Borrower and its Subsidiaries for suchperiod (i.e., the increase, if any, in Consolidated Current Assets minusConsolidated Current Liabilities from the beginning to the end of such period);

 

(vi)         theamount of all fees and expenses paid in cash during such period directlyrelating to the refinancing of the Existing Credit Agreement;

 

(vii)        expensesor losses excluded from the calculation of Consolidated EBITDA during suchperiod by operation of clause (e) of the definition thereof to the extent paidin cash during such period; and

 

(viii)       tothe extent added to determine Consolidated EBITDA, all items that did notresult from a cash payment to the Borrower or any of its Subsidiaries on aconsolidated basis during such period;

 

provided that, tothe extent otherwise included herein, the Net Proceeds of Asset Sales,Destructions, Takings, Debt Incurrences and Equity Issuances which are applied towardsthe prepayment of Loans and/or the reduction of Commitments and/or the repair,replacement, substitution, restoration of or reinvestment

 

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in property in accordance with Section 2.05(c) shall be excluded fromthe calculation of Excess Cash Flow.

 

“Excess Cash Flow Percentage” means, as of any date ofdetermination, (i) 50% if the Total Leverage Ratio is greater than orequal to 3.0x as of such date and (ii) 25% if the Total Leverage Ratio isless than 3.0x as of such date.

 

“Exchange” has the meaning set forth in Section 4.01(h).

 

“Exchange Act” means the Securities Exchange Act of 1934, asamended.

 

“Excluded Equity Issuance” means (a) the issuance of anywarrants, options or Equity Interests to directors, officers or employees of theBorrower or any of its Subsidiaries in the ordinary course of business and anyEquity Interests of the Borrower issued upon the exercise of such warrants oroptions, (b) any issuance of Equity Interests (other than DisqualifiedEquity Interests) of the Borrower to the GOF Holders and (c) any issuanceof Equity Interests (other than Disqualified Equity Interests) of the Borrower tothe extent the proceeds thereof are contemporaneously applied to fund PermittedAcquisitions permitted by Section 6.04 or to fund Capital Expenditures permittedby Section 6.14(a).

 

“Existing Credit Agreement” means the Credit Agreement dated asof April 27, 2004 among the Borrower, Citicorp North America Inc., asadministrative agent, and the other financial institutions party thereto, asamended.

 

“Federal Funds Rate” means, for any day, the weighted average ofthe rates (rounded upwards, if necessary, to the nearest 1/100th of 1%) onovernight federal funds transactions with members of the Federal Reserve Systemarranged by federal funds brokers, as published on the next succeeding BusinessDay by the Federal Reserve Bank of New York; provided that(a) if the day for which such rate is to be determined is not a BusinessDay, the Federal Funds Rate for such day shall be such rate for suchtransactions on the next preceding Business Day as so published on the nextsucceeding Business Day, and (b) if such rate is not so published for anyday which is a Business Day, the Federal Funds Rate for such day shall be theaverage of the quotations for the day of such transactions received by the AdministrativeAgent from three federal funds brokers of recognized standing selected by it.

 

“Fees” means the Commitment Fees, the LC Fees and the AgentFees.

 

“Financial Covenants” means those covenants and agreements ofthe Loan Parties set forth in Sections 6.12 through 6.14, inclusive.

 

“Financial Officer” of any corporation, partnership or otherentity means the chief financial officer, the principal accounting officer,Treasurer or Controller of such corporation, partnership or other entity.

 

“Fiscal Quarter” means any quarter of a Fiscal Year.

 

“Fiscal Year” means any period of twelve consecutive calendarmonths which form the basis for the Borrower’s financial statements in its Form10-K; references to a Fiscal Year with a number corresponding to any calendaryear (e.g., the “2005 Fiscal Year”) refer to the Fiscal Year as disclosedin the Borrower’s SEC filings.

 

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“Foreign Plan” means any employee benefit plan, program, policy,arrangement or agreement maintained or contributed to outside the United Statesby any Loan Party or any Subsidiary primarily for the benefit of employees ofany Loan Party or any Subsidiary employed outside the United States.

 

“GAAP” means generally accepted accounting principles in theUnited States applied on a consistent basis.

 

“GOF” means MatlinPatterson Global Opportunities Partners LP.

 

“GOF Holders” means GOF and each of its Affiliates that hold theequity of the Borrower on the date hereof, so long as such entities continue tobe managed or controlled by GOF or are Affiliates or Subsidiaries of GOF.

 

“Governmental Authority” means any Federal, state, local orforeign court or governmental agency, authority, instrumentality or regulatorybody, including any central bank.

 

“Greenshoe Option” has the meaning assigned to such term inSection 9.08(g).

 

“Guarantee” of or by any Person (the “guarantor”) meansany obligation, contingent or otherwise, of the guarantor guaranteeing orhaving the economic effect of guaranteeing any Indebtedness or other obligationof any other Person (the “primary obligor”) in any manner, whetherdirectly or indirectly, and including any obligation of the guarantor, director indirect, (a) to purchase or pay (or advance or supply funds for the purchaseor payment of) such Indebtedness or other obligation or to purchase (or toadvance or supply funds for the purchase of) any security for the paymentthereof, (b) to purchase or lease property, securities or services for thepurpose of assuring the owner of such Indebtedness or other obligation of thepayment thereof (including pursuant to a “synthetic lease”), (c) tomaintain working capital, equity capital or any other financial statement conditionor liquidity of the primary obligor so as to enable the primary obligor to paysuch Indebtedness or other obligation or (d) as an account party inrespect of any letter of credit or letter of guaranty issued to support suchIndebtedness or obligation; provided that the term “Guarantee” shall notinclude endorsements for collection or deposit in the ordinary course ofbusiness. The amount of the obligation under any Guarantee shall be deemed tobe the lower of (a) an amount equal to the stated or determinable amountof the primary obligation in respect of which such Guarantee is made (includingprincipal, interest and fees) and (b) the maximum amount for which suchguarantor may be liable pursuant to the terms of the instrument embodying suchGuarantee, unless such primary obligation and the maximum amount for which suchguarantor may be liable are not stated or determinable, in which case theamount of the obligation under such Guarantee shall be such guarantor’s maximumreasonably anticipated liability in respect thereof as determined by theguarantor in good faith; irrespective, in any such case, of any amount thereofthat would, in accordance with GAAP, be required to be reflected on a balancesheet of such Person.

 

“Guarantee Agreement” means the Guarantee Agreement,substantially in the form of Exhibit H, made by the Borrower and theSubsidiary Loan Parties.

 

“Hazardous Materials” means all pollutants, contaminants,wastes, substances, chemicals, materials and constituents, including withoutlimitation, crude oil, petroleum or petroleum distillates, asbestos orasbestos-containing materials, polychlorinated biphenyls (“PCBs”) orPCB-containing materials or equipment of any nature which can give rise toliability under, or are subject to regulation pursuant to, any EnvironmentalLaw.

 

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“Hedging Agreement” means any interest rate protectionagreement, foreign currency exchange agreement, commodity price protectionagreement or other interest or currency exchange rate or commodity pricehedging arrangement and all other similar agreements or arrangements designedto alter the risks of any Person arising from fluctuations in interest rate,currency values or commodity prices.

 

“Impermissible Qualification” means, relative to the opinion orcertification of any independent public accountant as to any financialstatement of the Borrower, any qualification or exception to such opinion orcertification:

 

(a)           which is of a “goingconcern” or similar nature;

 

(b)           which relates to thelimited scope of examination of matters relevant to such financial statement;or

 

(c)           which relates to thetreatment or classification of any item in such financial statement and which,as a condition to its removal, would require an adjustment to such item theeffect of which would be to cause the Borrower to be in default of any of itsobligations under any of Sections 6.12 or 6.13.

 

“Increased Cost Lender” has the meaning assigned to such term inSection 2.20.

 

“Indebtedness” of any Person means the sum of all indebtednessof such Person on a consolidated basis (without duplication) with respect to(i) borrowed money or represented by bonds, debentures, notes and thelike; (ii) the aggregate amount of Capital Lease Obligations;(iii) all indebtedness secured by any Lien on any Property of such Person;(iv) all indebtedness representing the deferred purchase price of Propertyor services, excluding trade payables in the ordinary course of business;(v) all obligations for the reimbursement of any obligor in respect ofletters of credit, letters of guaranty, bankers’ acceptances and similar credittransactions; (vi) all obligations under conditional sale or other titleretention agreements relating to property purchased by such Person; (vii)synthetic lease obligations of such Person; (viii) all obligations underHedging Agreements to the extent required to be reflected on a balance sheet ofsuch Person; (ix) all Attributable Indebtedness of such Person; and(x) direct Guarantees and indemnities in respect of, and to purchase orotherwise acquire, or otherwise to assure a creditor against loss in respectof, or to assure an obligee against failure to make payment in respect of,liabilities, obligations or indebtedness of the kind described inclauses (i) through (ix).

 

“Indebtedness to Be Paid” has the meaning assigned to such termin Section 3.20(a).

 

“Indemnity, Subrogation and Contribution Agreement” means theIndemnity, Subrogation and Contribution Agreement, substantially in the form ofExhibit E.

 

“Information Memorandum” means the Confidential InformationMemorandum dated as of November 2005 and posted electronically on Intralinksrelating to the Borrower and this Agreement.

 

“Installment Payment Date” has the meaning assigned to such termin Section 2.05(d).

 

“Interest Expense Coverage Ratio” means, for any Test Period,the ratio of (a) Consolidated EBITDA to (b) Cash Interest Expense, ineach case for such Test Period.

 

“Interest Payment Date” means, with respect to any Loan, thelast day of the Interest Period applicable to the Borrowing of which such Loanis a part and, in the case of a Eurodollar Borrowing

 

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with an Interest Period of more than three months’ duration,(a) each day that would have been an Interest Payment Date had successiveInterest Periods of three months’ duration been applicable to such Borrowingand, in addition, (b) the date of any refinancing of such Borrowing with aBorrowing of a different Type.

 

“Interest Period” means (a) as to any Eurodollar Borrowing,the period commencing on the date of such Borrowing (including any date onwhich such Borrowing shall have been converted from a Borrowing of a differentType) or on the last day of the immediately preceding Interest Periodapplicable to such Borrowing, as the case may be, and ending on the numericallycorresponding day (or, if there is no numerically corresponding day, on thelast day) in the calendar month that is 1, 2, 3 or 6 months (or ifavailable to all Lenders, two weeks or 9 or 12 months) thereafter, as theBorrower may elect; or (b) as to any ABR Borrowing (other than a SwinglineBorrowing), the period commencing on the date of such Borrowing (including anydate on which such Borrowing shall have been converted from a Borrowing of adifferent Type) or on the last day of the immediately preceding Interest Periodapplicable to such Borrowing, as the case may be, and ending on the earliest of(i) the next succeeding March 31, June 30, September 30 orDecember 31, (ii) the Revolving Credit Maturity Date and(iii) the date such Borrowing is prepaid in accordance withSection 2.05 or converted in accordance with Section 2.03 and(c) as to any Swingline Loan, a period commencing on the date of such Loanand ending on the earliest of (i) the fifth Business Day thereafter,(ii) the Revolving Credit Maturity Date and (iii) the date such Loanis prepaid in accordance with Section 2.05; provided, however,that if any Interest Period would end on a day other than a Business Day, suchInterest Period shall be extended to the next succeeding Business Day unless,in the case of a Eurodollar Borrowing only, such next succeeding Business Daywould fall in the next calendar month, in which case such Interest Period shallend on the next preceding Business Day. Interest shall accrue from andincluding the first day of an Interest Period to but excluding the last day ofsuch Interest Period.

 

“Investment” has the meaningassigned to such term in Section 6.04.

 

“Issuing Bank” means Citibank NA, in its capacity as the issuerof Letters of Credit hereunder, and its successors in such capacity as providedin Section 2.06(i), or any other Revolving Lender approved by theAdministrative Agent and the Borrower. The Issuing Bank may, in its discretion,arrange for one or more Letters of Credit to be issued by Affiliates of theIssuing Bank, in which case the term “Issuing Bank” shall include any suchAffiliate with respect to Letters of Credit issued by such Affiliate.

 

“Landlord Access Agreement” means a landlord access agreementsubstantially in the form of Exhibit N attached hereto

 

“LC Disbursement” means a payment made by the Issuing Bankpursuant to a Letter of Credit.

 

“LC Exposure” means, at any time, the sum of (a) theaggregate undrawn amount of all outstanding Letters of Credit at such time plus(b) the aggregate amount of all LC Disbursements that have not yet beenreimbursed by or on behalf of the Borrower at such time. The LC Exposure of anyRevolving Lender at any time shall be its Commitment Percentage of the total LCExposure at such time.

 

“LC Fees” has the meaning assigned to such term inSection 2.10(b).

 

“Lead Arranger” has the meaning assigned to such term in thepreamble hereto.

 

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“Lender Affiliate” means (a) with respect to any Lender,(i) an Affiliate of such Lender or (ii) any entity (whether a corporation,partnership, trust or otherwise) that is engaged in making, purchasing, holdingor otherwise investing in bank loans and similar extensions of credit in theordinary course of its business and is administered or managed by a Lender oran Affiliate of such Lender and (b) with respect to any Lender that is afund which invests in bank loans and similar extensions of credit, any otherfund that invests in bank loans and similar extensions of credit and is managedby the same investment advisor as such Lender or by an Affiliate of suchinvestment advisor.

 

“Lenders” has the meaning assigned to such term in the preamblehereto.

 

“Letter of Credit” means any letter of credit issued pursuant tothis Agreement and shall also include the letters of credit issued by CitibankNA under the Existing Credit Agreement and set forth on Schedule 1.02 hereto.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing forany Interest Period the rate appearing on Page 3750 of the Telerate Service (oron any successor or substitute page of such Service, or any successor to orsubstitute for such Service, providing rate quotations comparable to those currentlyprovided on such page of such Service, as determined by the AdministrativeAgent from time to time for purposes of providing quotations of interest ratesapplicable to dollar deposits in the London interbank market) at approximately11:00 a.m., London time, two Business Days prior to the commencement ofsuch Interest Period, as the rate for Dollar deposits with a maturitycomparable to such Interest Period. In the event that such rate is not availableat such time for any reason, then the “LIBO Rate” with respect to suchEurodollar Borrowing for such Interest Period shall be the rate supplied to theAdministrative Agent at its request quoted by the Reference Banks in the Londoninterbank market as of the day two Business Days prior to the commencement ofsuch Interest Period as the rate for Dollar deposits with a maturity comparableto such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage,deed of trust, deed to secure debt, lien, pledge, encumbrance, charge,assignment, hypothecation or security interest in or on such asset, in each ofthe foregoing cases whether voluntary or imposed by law, (b) the interestof a vendor or a lessor under any conditional sale agreement, capital lease ortitle retention agreement relating to such asset, (c) in the case ofsecurities, any purchase option, call or similar right of a third party withrespect to such securities, (d) in the case of any investment property ordeposit account, any contract or other agreement under which any third partyhas the right to control such investment property or deposit account and(e) any other agreement intended to create any of the foregoing.

 

“Loan Documents” means this Agreement, the Indemnity,Subrogation and Contribution Agreement, the Guarantee Agreement, the SecurityDocuments, each Note and, solely for purposes of Section 7.01(a), the EngagementLetter.

 

“Loan Parties” means the Borrower and the Subsidiary LoanParties.

 

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

 

“Material Adverse Effect” means a materially adverse effect on(a) the business, assets, operations, properties, financial condition orliabilities of the Loan Parties and their consolidated Subsidiaries, taken as awhole, or (b) the ability of any Loan Party to perform their obligationsunder the Loan Documents, (c) the rights of or benefits available to theLenders under any Loan Document or (d) the value of the Collateral or thevalidity, enforceability, perfection or priority of the Liens granted to theCollateral

 

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Agent (for its benefit and for the benefit of the other SecuredParties) on the Collateral pursuant to the Security Documents.

 

“Material Indebtedness” means Indebtedness (other than the Loansand Letters of Credit) of any one or more of the Borrower and the Borrower’s Subsidiaries,individually or in an aggregate principal amount exceeding $10.0 million. Forpurposes of determining Material Indebtedness, the “principal amount” of theobligations of the Borrower or any Subsidiary in respect of any HedgingAgreement at any time shall be the maximum aggregate amount (giving effect toany netting agreements) that the Borrower or such Subsidiary would be requiredto pay if such Hedging Agreement were terminated at such time.

 

“Maximum Rate” has the meaning assigned to such term in Section9.09.

 

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

 

“Mortgage” means a mortgage, deed of trust, leasehold mortgageor deed of trust or other security document granting a Lien on any MortgagedProperty, which shall be substantially in the form of Exhibit M.

 

“Mortgaged Property” means, initially, each parcel of realproperty and the improvements thereto owned or leased by a Loan Party andidentified on Schedule 4.01(u)(A), and includes each other parcelof real property and improvements thereto with respect to which a Mortgage isgranted pursuant to Section 5.11 or 5.12.

 

“Multiemployer Plan” means a multiemployer plan within themeaning of Section 4001(a)(3) of ERISA (i) to which any Loan Party orERISA Affiliate is then making or has an obligation to make contributions,(ii) to which any Loan Party or ERISA Affiliate has within the precedingsix plan years made contributions, including any Person which ceased to be anERISA Affiliate during such six year period, or (iii) with respect towhich Loan Party or any Subsidiary could incur liability.

 

“Net Proceeds” means, with respect to any Equity Issuance, DebtIncurrence, Asset Sale, Destruction or Taking, (a) the cash proceedsactually received in respect of such event, including (i) any cash receivedin respect of any non-cash proceeds, but only as and when received,(ii) in the case of a Destruction, insurance proceeds only to the extentin excess of $2.5 million, in the aggregate for all such events and(iii) in the case of a Taking, condemnation awards and similar paymentsonly to the extent in excess of $2.5 million, in the aggregate for allsuch events, net of (b) the sum of (i) all reasonable fees andout-of-pocket expenses paid by the Borrower and its Subsidiaries in connectionwith such event, (ii) the amount of all taxes paid (or reasonably estimatedto be payable) by the Borrower and its Subsidiaries, and (iii) in the caseof an Asset Sale, Destruction or Taking, the amount of all payments required tobe made by the Borrower and its Subsidiaries as a result of such event to repayIndebtedness (other than Loans) secured by a Prior Lien (as defined in theSecurity Agreement or applicable Mortgage) on such asset and the amount of anyreserves established by the Borrower and its Subsidiaries to fund contingentliabilities reasonably estimated to be payable, in each case during the yearthat such event occurred or the next succeeding two years, and that aredirectly attributable to such event (as determined reasonably and in good faithby the Borrower); provided that any amount by which such reserves arereduced for reasons other than payment of any such contingent liabilities shallbe considered “Net Proceeds” upon such reduction.

 

“Non-Consenting Lender” has the meaning assigned thereto inSection 2.20.

 

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“Non-U.S. Jurisdiction” means each jurisdiction of organizationof a Subsidiary of the Borrower other than the United States (or any Statethereof) or the District of Columbia.

 

“Non-U.S. Pledge Agreements” means one or more pledge agreementsin form and substance reasonably satisfactory to the Collateral Agent covering 65%of the Equity Interests owned by a Loan Party directly in a Non-U.S.Subsidiary.

 

“Non-U.S. Subsidiary” means any Subsidiary of the Borrower thatis or becomes organized under the laws of a Non-U.S. Jurisdiction, other thanfollowing the consummation of the Permitted Restructuring, Chicopee HoldingsB.V., to the extent that such Subsidiary is a “disregarded entity” for purposesof United States tax laws.

 

“Note” means a note substantially in the form of Exhibit F-1,-2, or -3.

 

“Obligations” means the (a) unpaid principal of andinterest on (including interest accruing after the maturity of the Loans madeto the Borrower and interest accruing after the filing of any petition inbankruptcy, or the commencement of any insolvency, reorganization or like proceeding,whether or not a claim for post-filing or post-petition interest is allowed insuch proceeding) the Loans made to or LC Disbursements made pursuant to Lettersof Credit issued for the account of the Borrower and all other obligations andliabilities of the Loan Parties to any Secured Party, whether direct orindirect, absolute or contingent, due or to become due, or now existing orhereafter incurred, which may arise under, out of, or in connection with, thisAgreement, any other Loan Document or any other document made, delivered orgiven in connection herewith, whether on account of principal, interest, fees,indemnities, costs or expenses (including, without limitation, all reasonablefees, charges and disbursements of counsel), or otherwise, (b) the due andpunctual payment and performance of all obligations of the Borrower and theother Loan Parties under each interest rate protection agreement constituting aHedging Agreement relating to the Loans entered into with any counterparty thatwas a Lender or a Lender Affiliate at the time such interest rate protectionagreement was entered into and (c) the due and punctual payment andperformance of all obligations of the Loan Parties in respect of overdrafts andrelated liabilities owed to any Lender, any Lender Affiliate or any Agentarising from treasury, depositary and cash management services or in connectionwith any automated clearinghouse transfer of funds.

 

“Organic Document” means (i) relative to each Person thatis a corporation, its charter, its by-laws and all shareholder agreements,voting trusts and similar arrangements applicable to any of its authorizedshares of capital stock, (ii) relative to each Person that is apartnership, its partnership agreement and any other similar arrangementsapplicable to any partnership or other equity interests in the Person and(iii) relative to any Person that is any other type of legal entity, suchdocuments as shall be comparable to the foregoing.

 

“Overdraft Obligations” means the obligations described inclause (c) of the definition of “Obligations.”

 

“Participant” has the meaning assigned to such term in Section9.04(f).

 

“PBGC” means the Pension Benefit Guaranty Corporation referredto and defined in ERISA.

 

“Pension Plan” means a “pension plan,” as such term is definedin Section 3(2) of ERISA, which is subject to Title IV of ERISA(other than a Multiemployer Plan) and to which any Loan Party or any ERISAAffiliate may have liability, including any liability by reason of having beena substantial

 

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employer within the meaning of Section 4063 of ERISA at any timeduring the preceding five years, or by reason of being deemed to be acontributing sponsor under Section 4069 of ERISA.

 

“Perfection Certificate” means a certificate in the form of Annex 2to the Security Agreement or any other form approved by the AdministrativeAgent.

 

“Permitted Acquisition” means any acquisition, whether bypurchase, merger, consolidation or otherwise, by the Borrower or any Subsidiaryof all or substantially all the assets of, or all the Equity Interests in, aPerson or a division, line of business or other business unit of a Person solong as:

 

(a)           such acquisitionshall not have been preceded by a tender offer that has not been approved orotherwise recommended by the board of directors of such Person;

 

(b)           such assets are tobe used in, or such Person so acquired is engaged in, as the case may be, abusiness of the type conducted by the Borrower and its Subsidiaries on theEffective Date or in a business reasonably related thereto;

 

(c)           immediately aftergiving effect thereto, (i) no Default has occurred and is continuing orwould result therefrom, (ii) all transactions related thereto areconsummated in all material respects in accordance with applicable laws,(iii) in the case of an acquisition of Equity Interests, the Person acquiredshall become, immediately after giving effect thereto, a Subsidiary or bemerged into a Subsidiary and all actions required to be taken underSections 5.11, 5.12 and 5.16 shall have been taken, (iv) the Borrowerand its Subsidiaries are in compliance, on a Pro Forma Basis after givingeffect to such acquisition, with the covenants contained in Sections 6.12and 6.13 recomputed as at the date of the last ended Test Period, as if suchacquisition (and any related incurrence or repayment of Indebtedness) had occurredon the first day of the relevant Test Period, (v) any Indebtedness or anypreferred stock that is incurred, acquired or assumed in connection with suchacquisition shall be in compliance with Section 6.01 and (vi) after givingeffect to any Revolving Credit Borrowings made in connection therewith, theTotal Revolving Credit Commitment less the Revolving Credit Exposure of allRevolving Lenders shall not be less than $15.0 million; and

 

(d)           the Borrower hasdelivered to the Administrative Agent an officers’ certificate to the effectset forth in clauses (a), (b) and (c)(i) through (vi) above, together with allrelevant financial information for the Person or assets to be acquired.

 

“Permitted Factoring Transaction” means the factoring ofreceivables by the Borrower or any of its Subsidiaries structured as a truesale to a Person that is not an Affiliate of the Borrower or any of its Subsidiariespursuant to a structured factoring program on market terms for companies havinga credit profile similar to the Borrower and its Subsidiaries at the time ofentering into the factoring program; provided that the outstandingproceeds of all factoring programs shall not exceed (i) $20.0 million in thecase of the Borrower and its Domestic Subsidiaries or (ii) $20.0 million in thecase of the Borrower’s Non-U.S. Subsidiaries. For purposes of the foregoinglimitations, outstanding proceeds at any time shall be deemed to equal the thenoutstanding capital amount or principal amount received by the Borrower or therelevant Subsidiary in respect of sales of accounts receivable.

 

“Permitted Investments” means:

 

(a)           marketable directobligations issued by, or unconditionally guaranteed by, the United StatesGovernment or any member state of the European Union or issued by any agency

 

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or instrumentality thereof and backed by thefull faith and credit of the United States of America or such member state ofthe European Union, in each case maturing within one year from the date ofacquisition thereof;

 

(b)           marketable directobligations issued by any State of the United States of America or anypolitical subdivision of any such State or any public instrumentality thereofmaturing within one year from the date of acquisition thereof and, at the timeof acquisition, having one of the two highest ratings obtainable from eitherS&P or Moody’s;

 

(c)           commercial paper maturingno more than one year from the date of creation thereof and, at the time of acquisition,having a rating of at least A-1 from S&P or at least P-1 from Moody’s;

 

(d)           time deposits,demand deposits, certificates of deposit, Eurodollar time deposits or bankers’acceptances maturing within one year from the date of acquisition thereof orovernight bank deposits, in each case, issued by any bank organized under thelaws of any member state of the European Union, the United States of America orany State thereof or the District of Columbia, any U.S. branch of a foreignbank or any other bank in any country where operations are conducted by theBorrower and its Subsidiaries, in any case, having at the date of acquisitionthereof combined capital and surplus of not less than $500.0 million;

 

(e)           repurchaseobligations with a term of not more than 90 days for underlying securities ofthe types described in clause (a) above entered into with any bank meetingthe qualifications specified in clause (d) above;

 

(f)            investments inmoney market funds which invest substantially all their assets in securities ofthe types described in clauses (a) through (e) above; and

 

(g)           Hedging Agreementsentered into for non-speculative purposes.

 

“Permitted Lien” has the meaning assigned to such term inSection 6.02.

 

“Permitted Refinancing” means, with respect to any Indebtedness,any refinancing thereof; provided, however, that (i) no Defaultshall have occurred and be continuing or would arise therefrom, (ii) any suchrefinancing Indebtedness shall (a) not have a stated maturity or WeightedAverage Life to Maturity that is shorter than the Indebtedness beingrefinanced, (b) be at least as subordinate to the Obligations as theIndebtedness being refinanced (and unsecured if the refinanced Indebtedness isunsecured), and (c) be in principal amount that does not exceed the principalamount so refinanced, plus all accrued and unpaid interest thereon, plus thestated amount of any premium and other payments required to be paid in connectionwith such refinancing pursuant to the terms of the Indebtedness being refinanced,plus in either case, the amount of reasonable expenses of the Borrower or anyof its Subsidiaries incurred in connection with such refinancing, and (iii) thesole obligors and/or guarantors on such refinancing Indebtedness shall be theobligors and/or guarantors on such Indebtedness being refinanced.

 

“Permitted Restructuring” means a corporate restructuring of theBorrower and its Subsidiaries substantially as set forth on Schedule 1.01,which may be consummated in one or more steps; provided that (i) no Defaultshall have occurred and be continuing or would arise therefrom and (ii) allactions required to be taken under Sections 5.11, 5.12 and 5.16 shall havebeen taken, including, without limitation, delivery of opinions of counsel,including Dutch counsel, reasonably satisfactory to the Administrative 

 

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Agent confirming the enforceability of the guarantees and securityinterests in favor of the Secured Parties.

 

“Person” means any natural person, corporation, trust, jointventure, association, company, partnership, limited liability company orgovernment, or any agency or political subdivision thereof.

 

“Plan” means any Pension Plan or Welfare Plan.

 

“Platform” has the meaning assigned to such term in Section9.17(b).

 

“Pledge Agreement” means the Pledge Agreement, substantially inthe form of Exhibit I, among the Loan Parties and the CollateralAgent for the benefit of the Secured Parties.

 

“Pledged Securities” has the meaning provided in the PledgeAgreement.

 

“Preferred Stock” means, with respect to any Person, any and allpreferred or preference Equity Interests (however designated) of such Personwhether or not outstanding or issued on the Effective Date.

 

“Prepayment Date” has the meaning assigned to such term inSection 2.05(f).

 

“Pro Forma Basis” means on a pro forma basis in accordance withGAAP and Regulation S-X under the Exchange Act and otherwise reasonably satisfactoryto the Administrative Agent.

 

“Projected Financial Statements” has the meaning assigned tosuch term in Section 3.15(c).

 

“Pro Rata Percentage” of any Revolving Lender at any time meansthe percentage of the aggregate Available Revolving Credit Commitmentrepresented by such Lender’s Available Revolving Credit Commitment.

 

“QRTC Amount” means $75.0 million.

 

“Property” means any right, title or interest in or to propertyor assets of any kind whatsoever, whether real, personal or mixed and whethertangible or intangible and including any ownership interests of any Person.

 

“Real Property” means all right, title and interest of any LoanParty in and to a parcel of real property owned, leased or operated (including,without limitation, any leasehold estate) by any Loan Party together with, ineach case, all improvements and appurtenant fixtures, equipment, personalproperty, easements and other property and rights incidental to the ownership,lease or operation thereof.

 

“Reference Banks” means:

 

(a)           in connection withthe initial syndication of the Loans and Commitments, in respect of LIBO Rate,the principal London office of Citibank, N.A.; and

 

(b)           at all other times,in respect of LIBO Rate, the principal London office of Citibank, N.A. and suchtwo other banks as may be appointed by the Administrative Agent in consultationwith the Borrower.

 

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“Register” has the meaning assigned to such term in Section9.04(d).

 

“Regulation U” means Regulation U of the Board ofGovernors as from time to time in effect and all official rulings and interpretationsthereunder or thereof.

 

“Regulation X” means Regulation X of the Board ofGovernors as from time to time in effect and all official rulings and interpretationsthereunder or thereof.

 

“Related Hedging Obligations” means the obligations described inclause (b) of the definition of “Obligations.”

 

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

 

“Release” means any spilling, leaking, pumping, pouring,emitting, emptying, discharging, injecting, escaping, leaching, dumping,disposing, depositing, dispersing, emanating or migrating of any HazardousMaterial in, into, onto or through the Environment.

 

“Remedial Action” means (a) ”remedial action” as such termis defined in CERCLA, 42 USC Section 9601(24), and (b) all otheractions required by any Governmental Authority or voluntarily undertakento:  (i) clean up, remove, treat,abate or otherwise take corrective action to address any Hazardous Material inthe Environment; (ii) prevent the Release or threat of Release, orminimize the further Release of any Hazardous Material so it does not migrateor endanger or threaten to endanger public health, welfare or the Environment;or (iii) perform studies and investigations in connection with, or as aprecondition to, (i) or (ii) above.

 

“Requirement of Law” means, as to any Person, any law, treaty,rule or regulation or determination of an arbitrator or a court or otherGovernmental Authority, in each case applicable to or binding upon such Personor any of its property or assets or to which such Person or any of its propertyor assets is subject.

 

“Requisite Class Lenders” means, at any time, (i) for theClass of Lenders having Term Loans, Lenders holding more than fifty percent(50%) of the aggregate Term Loans of all Lenders; and (ii) for the Classof Lenders having Revolving Credit Commitments, Lenders holding more than fiftypercent (50%) of the aggregate outstanding amount of the Revolving Credit Commitmentsor, after the Revolving Credit Maturity Date, the Revolving Credit Exposure ofall Lenders.

 

“Requisite Lenders” means, at any time, Lenders having more thanfifty percent (50%) of the sum of (a) the aggregate amount of theRevolving Credit Commitments or, after the Revolving Credit Maturity Date, theRevolving Credit Exposure and (b) the aggregate outstanding amount of allTerm Loans at such time.

 

“Requisite Revolving Lenders” means, at any time, Lenders havingmore than fifty percent (50%) of the aggregate outstanding amount of theRevolving Credit Commitments or, after the Revolving Credit Maturity Date, theRevolving Credit Exposure.

 

“Restricted Payment” means any direct or indirect dividend orother distribution (whether in cash, securities or other property) with respectto any Equity Interests or Equity Rights in the Borrower or any Subsidiary, orany payment (whether in cash, securities or other property), including anysinking

 

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fund or similar deposit, on account of thepurchase, redemption, retirement, acquisition, cancellation or termination ofany Equity Interests or Equity Rights in the Borrower or any Subsidiary.

 

“Revolving Credit Borrowing” means aBorrowing comprised of Revolving Loans.

 

“Revolving Credit Borrowing Request”means a Borrowing Request in connection with a Revolving Credit Borrowing.

 

“Revolving Credit Commitment” means,with respect to each Revolving Lender, the commitment of such Revolving Lenderto make Revolving Loans and to acquire participations in Letters of Credit andSwingline Loans hereunder, expressed in each case as an amount representing themaximum principal amount of such Revolving Lender’s Revolving Credit Exposurehereunder, as the same may be reduced from time to time pursuant to theprovisions of this Agreement. The initial amount of each Revolving Lender’sRevolving Credit Commitment is set forth on Schedule 2.01 (in thecase of Revolving Credit Commitments in effect on the Effective Date), or inthe Assignment and Acceptance pursuant to which such Lender shall have assumedits Revolving Credit Commitment, as applicable. The aggregate amount of theRevolving Lenders’ Revolving Credit Commitments as of the Effective Date is$50.0 million.

 

“Revolving Credit Commitment Period”means the period from and including the Effective Date to but not including theRevolving Credit Maturity Date or any earlier date on which the RevolvingCredit Commitments to make Revolving Loans pursuant to Section 2.01 shallterminate as provided herein.

 

“Revolving Credit Exposure” means withrespect to any Revolving Lender at any time, the sum of (a) the aggregateprincipal amount at such time of all outstanding Revolving Loans of suchRevolving Lender, plus (b) such Revolving Lender’s LC Exposure at suchtime, plus (c) such Revolving Lender’s Commitment Percentage of theaggregate principal amount at such time of all outstanding Swingline Loans.

 

“Revolving Credit Maturity Date” meansthe fifth anniversary of the Effective Date.

 

“Revolving Lender” means a Lender witha commitment to make Revolving Loans or with any Revolving Credit Exposure, inits capacity as such.

 

“Revolving Loans” means the revolvingloans made pursuant to clause (iii) of Section 2.01(a).

 

“S&P” means Standard & Poor’sCorporation.

 

“SEC”means the Securities and Exchange Commission.

 

“Sale and Leaseback Transaction” hasthe meaning assigned thereto in Section 6.06.

 

“Secured Parties” means the Agents,each Lender that holds Loans or has Commitments (in its capacity as such), eachholder of any Related Hedging Obligations (in its capacity as such) and eachperson holding Overdraft Obligations (in its capacity as such).

 

“Security Agreement” means theSecurity Agreement, substantially in the form of Exhibit J, amongthe Loan Parties and the Collateral Agent for the benefit of the SecuredParties.

 

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“Security Documents” means theSecurity Agreement, the Pledge Agreement, the Non-U.S. Pledge Agreements, theMortgages, the Perfection Certificate, Cash Management Agreements (as definedin the Security Agreement) and each other security agreement or otherinstrument or document executed and delivered pursuant to Section 5.11,5.12 or 5.16 to secure any of the Obligations.

 

“Statutory Reserve Rate”means a fraction (expressed as a decimal) the numerator of which is the numberone and the denominator of which is the number one minus the aggregate(expressed as a decimal) of the maximum reserve percentages (including any marginal,special, emergency or supplemental reserves) expressed as a decimal establishedby any Governmental Authority of the United States or of the jurisdiction ofsuch currency or any jurisdiction to which banks in such jurisdiction are subjectfor any category of deposits or liabilities customarily used to fund loans. Suchreserve percentages shall include those imposed pursuant to suchRegulation D. The Statutory Reserve Rate shall be adjusted automaticallyon and as of the effective date of any change in any reserve percentage.

 

“Subordinated Debt”means Indebtedness of Borrower or any other Loan Party that is by its termsexpressly subordinated in right of payment to the Obligations of Borrower orsuch Loan Party, as applicable.

 

“Subordinated Debt Documents”means each document governing or pursuant to which is issued any SubordinatedDebt, as the same may be in effect from time to time in accordance with theterms hereof and thereof.

 

“Subsidiary” means, withrespect to any Person, (i) any corporation of which more than 50% of theoutstanding capital stock having ordinary voting power to elect a majority ofthe board of directors of such corporation (irrespective of whether at the timecapital stock of any other class or classes of such corporation shall or mighthave voting power upon the occurrence of any contingency) is at the timedirectly or indirectly owned by such Person, by such Person and one or moreother Subsidiaries of such Person, or by one or more other Subsidiaries of suchPerson; (ii) any partnership of which more than 50% of the outstandingpartnership interests having the power to act as a general partner of suchpartnership (irrespective of whether at the time any partnership interestsother than general partnership interests of such partnership shall or mighthave voting power upon the occurrence of any contingency) are at the timedirectly or indirectly owned by such Person, by such Person and one or moreother Subsidiaries of such Person, or by one or more other Subsidiaries of suchPerson; or (iii) any other legal entity the accounts of which would orshould be consolidated with those of such Person on a consolidated balancesheet of such Person prepared in accordance with GAAP. Unless otherwiseindicated, when used in this Agreement, the term “Subsidiary” shall refer to aSubsidiary of the Borrower.

 

“Subsidiary Loan Party”means each of the Borrower’s Domestic Subsidiaries that guarantees theObligations pursuant to the Guarantee Agreement.

 

“Survey” means a survey ofany Mortgaged Property (and all improvements thereon):  (i) prepared by a surveyor or engineerlicensed to perform surveys in the state where such Mortgaged Property islocated, (ii) dated (or redated) not earlier than six months prior to thedate of delivery thereof unless there shall have occurred within six monthsprior to such date of delivery any exterior construction on the site of suchMortgaged Property, in which event such survey shall be dated (or redated)after the completion of such construction or if such construction shall nothave been completed as of such date of delivery, not earlier than 20 daysprior to such date of delivery, (iii) certified by the surveyor (in amanner reasonably acceptable to the Collateral Agent) to the Collateral Agentand the Title Company, (iv) complying in all respects with theminimum detail requirements of the American Land Title Association as suchrequirements are in effect on the date of preparation of such survey and(v) sufficient for the Title 

 

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Company to remove all standard surveyexceptions from the title insurance policy (or marked title insurancecommitment having the effect of a policy) and issue a survey endorsement.

 

“Swingline Commitment”means the commitment of the Swingline Lender to make Loans pursuant toSection 2.04.

 

“Swingline Exposure”means, at any time, the aggregate principal amount of all Swingline Loansoutstanding at such time. The Swingline Exposure of any Revolving Lender at anytime shall be its Commitment Percentage of the total Swingline Exposure at suchtime.

 

“Swingline Lender” meansCiticorp North America, Inc., in its capacity as lender of Swingline Loans.

 

“Swingline Loan” has themeaning assigned to such term in Section 2.04(a).

 

“Swingline Sublimit” hasthe meaning assigned to such term as Section 2.04(a).

 

“Syndication Agent” hasthe meaning assigned to such term in the preamble hereto.

 

“Taking” means anytaking of any Property of the Borrower or any Subsidiary or any portionthereof, in or by condemnation or other eminent domain proceedings pursuant toany law, general or special, or by reason of the temporary requisition or useof any Property of the Borrower or any Subsidiary or any portion thereof, byany Governmental Authority.

 

“Taxes” has the meaningassigned to such term in Section 2.16.

 

“Term Borrowing” means aBorrowing comprised of Term Loans on the Effective Date.

 

“Term Borrowing Request”means a Borrowing Request in connection with the Term Loans on the EffectiveDate.

 

“Term Commitment” means,with respect to each Lender, the commitment, if any, of such Lender to make aTerm Loan hereunder on the Effective Date, expressed as an amount representingthe maximum principal amount of the Term Loan to be made by such Lenderhereunder, as the same may be reduced from time to time pursuant to theprovisions of this Agreement. The initial amount of each Lender’s TermCommitment is set forth on Schedule 2.01 or in the Assignment andAcceptance pursuant to which such Lender shall have assumed its TermCommitment, as applicable. The initial aggregate amount of the Lenders’ TermCommitments is $405.0 million.

 

“Term Lender” means aLender with a Term Commitment or an outstanding Term Loan, in its capacity assuch.

 

“Term Loan Maturity Date”means the seventh anniversary of the Effective Date.

 

“Term Loans” means theLoans made pursuant to clause (i) of Section 2.01(a).

 

“Terminated Lender” hasthe meaning assigned to such term in Section 2.20.

 

“Test Period” means(i) for the covenants contained in Sections 6.12 and 6.13, the fourconsecutive complete Fiscal Quarters of the Borrower then last ended as of thedate closest to each date listed under the heading “Date” therein and(ii) for all other provisions in this Agreement, the four consecutive

 

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complete Fiscal Quarters of the Borrowerended as of the time indicated. Compliance with such covenants shall be tested,as of the end of each Test Period, on the date on which the financialstatements pursuant to Section 5.01(a) or (b) have been, or should havebeen, delivered for the applicable fiscal period.

 

“Title Company” means ChicagoTitle Insurance Company or such other title insurance or abstract company asshall be reasonably approved by the Administrative Agent.

 

“Total Leverage Ratio”means, at any date, the ratio of (a) Consolidated Indebtedness as of suchdate to (b) Consolidated EBITDA for the Test Period most recently ended.

 

“Total Revolving CreditCommitment” means, at any time, the aggregate amount of the RevolvingCredit Commitments, as in effect at such time.

 

“Transactions” means,collectively, the execution and delivery by each Loan Party of each of the LoanDocuments to which it is a party and the Borrowing of the Term Loans andRevolving Loans hereunder in each case on the Effective Date, the payment ofIndebtedness to be Paid and the payment of fees and expenses in connection withany of the foregoing.

 

“Trigger Date” means thedate on which a Compliance Certificate for the first quarter ending after theEffective Date shall have been received by the Administrative Agent pursuant toSection 5.01(a) or (b).

 

“Type,” when used inrespect of any Loan or Borrowing, refers to the Rate by reference to whichinterest on such Loan or on the Loans comprising such Borrowing is determined. Forpurposes hereof, “Rate” shall include the Adjusted LIBO Rate and theAlternate Base Rate.

 

“UCC” means the UniformCommercial Code as in effect in the applicable state or jurisdiction.

 

“Unrefunded Swingline Loans”has the meaning assigned to such term in Section 2.04(c).

 

“U.S. Dollar Equivalent”means, on any day, with respect to any loan denominated in Canadian Dollars,the amount of U.S. Dollars that would be required to purchase the CanadianDollar amount of such loan on such day, assuming a rate of exchange equal tothe New York foreign exchange selling rate quoted for such Canadian Dollars inthe Wall Street Journal for such day (or, for the most recent day on which theWall Street Journal shall have been published), provided that if for anyreason the Wall Street Journal shall cease to be published for three or moreconsecutive Business Days, “U.S. Dollar Equivalent” shall mean the amount ofU.S. Dollars that would be required to purchase the Canadian Dollar amount ofsuch loan on such day, based upon the spot selling rate at which theAdministrative Agent offers to sell Canadian Dollars for U.S. Dollars in theLondon foreign exchange market at approximately 11:00 a.m. London time fordelivery two Business Days later.

 

“Weighted Average Life toMaturity” means, when applied to any Indebtedness at any date, the numberof years obtained by dividing (a) the original aggregate principal amount ofsuch Indebtedness into (b) the sum of the total of the products obtained bymultiplying (i) the amount of each scheduled installment, sinking fund, serialmaturity or other required payment of principal including payment at finalmaturity, in respect thereof, by (ii) the number of years (calculated to thenearest one-twelfth) which will elapse between such date and the making of suchpayment.

 

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“Welfare Plan” means a “welfare plan,”as such term is defined in Section 3(1) of ERISA, that is maintained or contributedto by a Loan Party or any Subsidiary or with respect to which a Loan Party orany Subsidiary could incur liability.

 

“Wholly Owned Subsidiary” means, withrespect to any Person, any corporation, partnership or other entity of whichall of the equity securities or other ownership interests (other than, in thecase of a corporation, directors’ qualifying shares) are directly or indirectlyowned or controlled by such Person or one or more Wholly Owned Subsidiaries ofsuch Person or by such Person and one or more Wholly Owned Subsidiaries of suchPerson.

 

“Withdrawal Liability” means liabilityto a Multiemployer Plan as a result of a complete or partial withdrawal fromsuch Multiemployer Plan, as such terms are defined in Part 1 of Subtitle E ofTitle IV of ERISA.

 

SECTION 1.02.              Classificationof Loans and Borrowings. For purposes of this Agreement, Loans may be classifiedand referred to by Class (e.g., a “Revolving Loan”), by Type (e.g.,a “Eurodollar Loan”) or by Class and Type (e.g., a “EurodollarRevolving Loan”). Borrowings also may be classified and referred to byClass (e.g., a “Revolving Credit Borrowing”), by Type (e.g.,a “Eurodollar Borrowing”) or by Class and Type (e.g., a “EurodollarRevolving Credit Borrowing”).

 

SECTION 1.03.              TermsGenerally. (a)  The definitions inSection 1.01 shall apply equally to both the singular and plural forms ofthe terms defined. Whenever the context may require, any pronoun shall includethe corresponding masculine, feminine and neuter forms. The words “include”, “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation”. All references herein to Articles, Sections, Exhibits andSchedules shall be deemed references to Articles and Sections of, andExhibits and Schedules to, this Agreement unless the context shall otherwiserequire. Except as otherwise expressly provided herein, (i) any referencein this Agreement to any Loan Document means such document as amended,restated, supplemented or otherwise modified from time to time and(ii) all terms of an accounting or financial nature shall be construed inaccordance with GAAP, as in effect from time to time; provided, however,that for purposes of determining compliance with the covenants contained in Article VI,all accounting terms herein shall be interpreted and all accountingdeterminations hereunder shall be made in accordance with GAAP as in effect onthe Effective Date and applied on a basis consistent with the application usedin the financial statements referred to in Section 3.05.

 

### (b)           If any payment under this Agreementor any other Loan Document shall be due on any day that is not a Business Day,the date for payment shall be extended to the next succeeding Business Day, andin the case of any payment accruing interest, interest thereon shall be paidfor the period of such extension.

###  

# ARTICLE IITHE CREDITS

#  

SECTION 2.01.              CreditCommitments. (a)  Subject to theterms and conditions hereof, (i) each Term Lender severally agrees to makea Term Loan in Dollars to the Borrower on the Effective Date in a principalamount not exceeding its Term Commitment and (ii) each Revolving Lenderseverally agrees to make Revolving Loans in Dollars to the Borrower from timeto time during the Revolving Credit Commitment Period. Amounts repaid orprepaid in respect of the Term Loans may not be reborrowed. During theRevolving Credit Commitment Period the Borrower may use the Revolving CreditCommitments by borrowing, prepaying the Revolving Loans in whole or in part,and reborrowing, all in 

 

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accordance with the terms and conditionshereof. Notwithstanding anything to the contrary contained in this Agreement,in no event may Revolving Loans be borrowed under this Article II if,after giving effect thereto (and to any concurrent repayment or prepayment ofLoans), (i) the Aggregate Revolving Credit Exposure would exceed the TotalRevolving Credit Commitment then in effect or (ii) the Revolving CreditExposure of any Revolving Lender would exceed such Revolving Lender’s RevolvingCredit Commitment.

 

### (b)           The Revolving Loans and the TermLoans may from time to time be (i) Eurodollar Loans, (ii) ABR Loansor (iii) a combination thereof, as determined by the Borrower and notifiedto the Administrative Agent in accordance with Sections 2.02 and 2.03.

###  

### (c)           Each Loan (other than a SwinglineLoan) shall be made as part of a Borrowing consisting of Loans of the sameClass and Type made by the Lenders ratably in accordance with their respectiveCommitments of the applicable Class. The failure of any Lender to make any Loanrequired to be made by it shall not relieve any other Lender of its obligationshereunder; provided that the Commitments of the Lenders are several andno Lender shall be responsible for any other Lender’s failure to make Loans asrequired.

###  

SECTION 2.02.              Procedurefor Borrowing. (a)  The Borrower mayborrow under the Revolving Credit Commitments (subject to the limitations inSection 2.01(a)) or the Term Commitments by giving the AdministrativeAgent notice substantially in the form of Exhibit B (a “BorrowingRequest”), which notice must be received by the Administrative Agent priorto (a) 12:00 noon, New York City time, three Business Days priorto the requested Borrowing Date, in the case of a Eurodollar Borrowing, or(b) 12:00 noon, New York City time, on the Business Day prior tothe requested Borrowing Date, in the case of an ABR Borrowing. The BorrowingRequest for each Borrowing shall specify (i) whether the requestedBorrowing is to be a Revolving Credit Borrowing or a Term Borrowing,(ii) the amount to be borrowed, (iii) the requested Borrowing Date(which must be the Effective Date, in the case of a Term Borrowing),(iv) whether the Borrowing is to be of Eurodollar Loans or ABR Loans,(v) if the Borrowing is to be of Eurodollar Loans, the length of theinitial Interest Period therefor, and (vi) the location and number of theBorrower’s account to which funds are to be disbursed, which shall comply withthe requirements of this Agreement. If no election as to the Type of Borrowingis specified, then the requested Borrowing shall be an ABR Borrowing. If noInterest Period is specified with respect to any requested EurodollarBorrowing, then the Borrower shall be deemed to have selected an Interest Periodof one month’s duration.

 

### (b)           Each Borrowing shall be in a minimumaggregate principal amount of (i) in the case of a Term Borrowing,$1.0 million or an integral multiple of $500,000 in excess thereof or(ii) in the case of a Revolving Credit Borrowing, $1.0 million or anintegral multiple of $500,000 in excess thereof or, if less, the aggregateamount of the then Available Revolving Credit Commitments.

###  

### (c)           Upon receipt of the Term BorrowingRequest, the Administrative Agent shall promptly notify each Term Lender of theaggregate amount of the Term Borrowing and of the amount of such Term Lender’s pro rata portion thereof, which shall be basedon their respective Term Commitments. Each Term Lender will make the amount ofits pro rata portion of the Term Borrowingavailable to the Administrative Agent for the account of the Borrower at theNew York office of the Administrative Agent specified in Section 9.01prior to 10:00 a.m., New York City time, on the Effective Date infunds immediately available to the Administrative Agent. Amounts so received bythe Administrative Agent will promptly be made available to the Borrower by theAdministrative Agent crediting the account of the Borrower on the books of suchoffice with the aggregate of the amounts made available to the AdministrativeAgent by the Revolving Lenders and in like funds as received by theAdministrative Agent.

###  

### 28

### 

###  

### (d)           Upon receipt of a Revolving CreditBorrowing Request, the Administrative Agent shall promptly notify each RevolvingLender of the aggregate amount of such Revolving Credit Borrowing and of theamount of such Revolving Lender’s pro rata portionthereof, which shall be based on the respective Available Revolving CreditCommitments of all the Revolving Lenders. Each Revolving Lender will make theamount of its pro rata portion of each suchRevolving Credit Borrowing available to the Administrative Agent for theaccount of the Borrower at the New York office of the Administrative Agentspecified in Section 9.01 prior to 12:00 p.m., New York City time, on theBorrowing Date requested by the Borrower in funds immediately available to theAdministrative Agent. Amounts so received by the Administrative Agent willpromptly be made available to the Borrower by the Administrative Agentcrediting the account of the Borrower on the books of such office with theaggregate of the amounts made available to the Administrative Agent by theRevolving Lenders and in like funds as received by the Administrative Agent; providedthat if on the Borrowing Date of any Revolving Loans to be made to theBorrower, any Swingline Loans made to the Borrower or LC Disbursements for theaccount of the Borrower shall be then outstanding, the proceeds of suchRevolving Loans shall first be applied to pay in full such Swingline Loans orLC Disbursements, with any remaining proceeds to be made available to theBorrower as provided above; and providedfurther that ABR Revolving Loans made to finance the reimbursement of an LCDisbursement as provided in Section 2.06(e) shall be remitted by the AdministrativeAgent to the Issuing Bank.

###  

SECTION 2.03.              Conversionand Continuation Options for Loans. (a) The Borrower may elect from time to time to convert (i) EurodollarLoans to ABR Loans, by giving the Administrative Agent prior notice of suchelection not later than 12:00 noon, New York City time, on theBusiness Day prior to a requested conversion or (ii) ABR Loans toEurodollar Loans by giving the Administrative Agent prior notice of suchelection not later than 12:00 noon, New York City time, three BusinessDays prior to a requested conversion; providedthat if any such conversion of Eurodollar Loans is made other than on the lastday of an Interest Period with respect thereto, the Borrower shall pay anyamounts due to the Lenders pursuant to Section 2.17 as a result of suchconversion. Any such notice of conversion to Eurodollar Loans shall specify thelength of the initial Interest Period or Interest Periods therefor. Uponreceipt of any such notice the Administrative Agent shall promptly notify eachLender thereof. All or any part of the outstanding Eurodollar Loans or ABRLoans may be converted as provided herein; provided that (i) noLoan may be converted into a Eurodollar Loan when any Event of Default hasoccurred and is continuing, and (ii) no Loan may be converted into aEurodollar Loan after the date that is one month prior to the Revolving CreditMaturity Date or the Term Loan Maturity Date, as applicable.

 

### (b)           Any Eurodollar Loans may be continuedas such upon the expiration of the then current Interest Period with respectthereto by the Borrower giving prior notice to the Administrative Agent, notlater than 12:00 noon, New York City time, three Business Days prior to arequested continuation setting forth the length of the next Interest Period tobe applicable to such Loans; provided that no Eurodollar Loan may becontinued as such (i) when any Event of Default has occurred and iscontinuing, and (ii) after the date that is one month prior to theRevolving Credit Maturity Date or the Term Loan Maturity Date, as applicable;and provided,further, that if the Borrower shall fail to give any required noticeas described above in this Section 2.03 or if such continuation is notpermitted pursuant to the preceding proviso, then such Loans shall beautomatically converted to ABR Loans on the last day of such then expiringInterest Period (in which case the Administrative Agent shall notify theBorrower of such conversion).

###  

### (c)           In connection with any EurodollarLoans, there shall be no more than ten (10) Interest Periods outstanding at anytime.

###  

### (d)           This Section shall not apply toSwingline Loans.

###  

### 29

### 

###  

SECTION 2.04.              SwinglineLoans. (a)  Subject to the terms andconditions hereof, the Swingline Lender agrees to make swingline loans(individually, a “Swingline Loan” and collectively, the “SwinglineLoans”) to the Borrower from time to time during the Revolving Credit CommitmentPeriod in accordance with the procedures set forth in this Section 2.04, providedthat (i) the aggregate principal amount of all Swingline Loans shall notexceed $10.0 million (the “Swingline Sublimit”) at any one time outstanding,(ii) the principal amount of any borrowing of Swingline Loans may notexceed the aggregate amount of the Available Revolving Credit Commitments ofall Revolving Lenders immediately prior to such borrowing or result in theAggregate Revolving Credit Exposure then outstanding exceeding the TotalRevolving Credit Commitments then in effect, and (iii) in no event maySwingline Loans be borrowed hereunder if (x) a Default or Event of Defaultor Event of Termination shall have occurred and be continuing and (y) suchDefault or Event of Default or Event of Termination shall not have been subsequentlycured or waived. Amounts borrowed under this Section 2.04 may be repaidand, up to but excluding the Revolving Credit Maturity Date, reborrowed. AllSwingline Loans shall at all times be ABR Loans. The Borrower shall give theAdministrative Agent notice of any Swingline Loan requested hereunder (whichnotice must be received by the Administrative Agent prior to 2:00 p.m.,New York City time, on the requested Borrowing Date) specifying (A) theamount to be borrowed, and (B) the requested Borrowing Date. Upon receiptof such notice, the Administrative Agent shall promptly notify the SwinglineLender of the aggregate amount of such borrowing. Not later than4:00 p.m., New York City time, on the Borrowing Date specified insuch notice the Swingline Lender shall make such Swingline Loan available tothe Administrative Agent for the account of the Borrower at the office of theAdministrative Agent set forth in Section 9.01 in funds immediately availableto the Administrative Agent. Amounts so received by the Administrative Agentwill promptly be made available to the Borrower by the Administrative Agentcrediting the account of the Borrower on the books of such office with theamount made available to the Administrative Agent by the Swingline Lender (or,in the case of a Swingline Loan made to finance the reimbursement of an LCDisbursement as provided in Section 2.06(e), by remittance to the Issuing Bank)and in like funds as received by the Administrative Agent. Each Borrowingpursuant to this Section 2.04 shall be in a minimum principal amount of$500,000 or an integral multiple of $100,000 in excess thereof.

 

### (b)           Notwithstanding the occurrence of anyDefault or Event of Default or Event of Termination or noncompliance with theconditions precedent set forth in Article IV or the minimum borrowingamounts specified in Section 2.02, if any Swingline Loan shall remainoutstanding at 10:00 a.m., New York City time, on the seventh BusinessDay following the Borrowing Date thereof and if by such time on such seventhBusiness Day the Administrative Agent shall have received neither (i) anotice of borrowing delivered by the Borrower pursuant to Section 2.02requesting that Revolving Loans be made pursuant to Section 2.01 on theimmediately succeeding Business Day in an amount at least equal to theaggregate principal amount of such Swingline Loan, nor (ii) any othernotice satisfactory to the Administrative Agent indicating the Borrower’s intentto repay such Swingline Loan on the immediately succeeding Business Day withfunds obtained from other sources, the Administrative Agent shall be deemed tohave received a notice from the Borrower pursuant to Section 2.02 requestingthat ABR Revolving Loans be made pursuant to Section 2.01 on suchimmediately succeeding Business Day in an amount equal to the amount of suchSwingline Loan, and the procedures set forth in Section 2.02 shall befollowed in making such ABR Revolving Loans; provided that for thepurposes of determining each Lender’s Pro Rata Percentage with respect to suchBorrowing, the Swingline Loan to be repaid with the proceeds of such Borrowingshall be deemed to not be outstanding. The proceeds of such ABR Revolving Loansshall be applied to repay such Swingline Loan.

###  

### (c)           If, for any reason, ABR RevolvingLoans may not be, or are not, made pursuant to paragraph (b) of this Section 2.04to repay any Swingline Loan as required by such paragraph, effective on thedate such ABR Revolving Loans would otherwise have been made, each RevolvingLender severally,

###  

### 30

### 

###  

### unconditionally and irrevocably agrees that it shall, without regard tothe occurrence of any Default or Event of Default, purchase a participatinginterest in such Swingline Loan (“Unrefunded Swingline Loan”) in anamount equal to the amount of the ABR Revolving Loan which would otherwise havebeen made pursuant to paragraph (b) of this Section 2.04. Each RevolvingLender will immediately transfer to the Administrative Agent, in immediatelyavailable funds, the amount of its participation, and the proceeds of suchparticipations shall be distributed by the Administrative Agent to theSwingline Lender. All payments by the Revolving Lenders in respect of UnrefundedSwingline Loans and participations therein shall be made in accordance withSection 2.13.

###  

### (d)           Notwithstanding the foregoing, aLender shall not have any obligation to acquire a participation in a SwinglineLoan pursuant to the foregoing paragraphs if a Default or Event of Default orEvent of Termination shall have occurred and be continuing at the time suchSwingline Loan was made and such Lender shall have notified the SwinglineLender in writing prior to the time such Swingline Loan was made, that suchDefault or Event of Default or such Event of Termination has occurred and thatsuch Lender will not acquire participations in Swingline Loans made while suchDefault or Event of Default or such Event of Termination is continuing.

###  

SECTION 2.05.              Optionaland Mandatory Prepayments of Loans; Repayments of Term Loans. (a)  The Borrower may at any time and from time totime prepay the Loans (subject to compliance with the terms ofSection 2.17), in whole or in part, subject to Section 2.05(e), uponirrevocable notice to the Administrative Agent not later than 12:00 noon,New York City time, two Business Days prior to the date of suchprepayment, specifying (i) the date and amount of prepayment, and(ii) the Class of Loans to be prepaid and whether the prepayment is ofEurodollar Loans, ABR Loans or a combination thereof (including in the case ofEurodollar Loans, the Borrowing to which such prepayment is to be applied and,if of a combination thereof, the amount allocable to each). Upon receipt of anysuch notice the Administrative Agent shall promptly notify each relevant Lenderthereof. If any such notice is given, the amount specified in such notice shallbe due and payable on the date specified therein, together with accruedinterest to such date on the amount prepaid. Partial prepayments of Loans(other than Swingline Loans) shall be in an aggregate principal amount of$1.0 million or a whole multiple of $500,000 in excess thereof (or, ifless, the remaining outstanding principal amount thereof). Partial prepaymentsof Swingline Loans shall be in an aggregate principal amount of $500,000 or awhole multiple of $100,000 in excess thereof (or, if less, the remaining outstandingprincipal amount thereof).

 

### (b)           In the event and on such occasionthat the Aggregate Revolving Credit Exposure exceeds the Total Revolving CreditCommitment, the Borrower shall prepay Revolving Credit Borrowings or SwinglineBorrowings (or, if no such Borrowings are outstanding, deposit cash collateralin the account established with the Collateral Agent pursuant toSection 2.06(j)) in an aggregate amount equal to such excess.

###  

### (c)           (i)  If the Borrower shallissue any Equity Interests or Equity Rights (it being understood that theissuance of debt securities convertible into, or exchangeable or exercisablefor, any Equity Interest or Equity Right shall be governed by Section 2.05(c)(ii)below) (other than any Excluded Equity Issuance) (each, an “Equity Issuance”),then 25% of the Net Proceeds thereof shall be applied within three BusinessDays after receipt thereof toward the prepayment of the Loans in accordancewith Section 2.05(e) below.

###  

(ii)                  Ifthe Borrower or any of its Subsidiaries shall incur any Indebtedness (includingpursuant to debt securities which are convertible into, or exchangeable orexercisable for, any Equity Interest or Equity Rights) (other than as permittedby Section 6.01(a)) (each, a “Debt Incurrence”),

 

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100% of the Net Proceeds thereof shall be applied within three BusinessDays after receipt thereof toward the prepayment of the Loans in accordancewith Section 2.05(e) below.

 

(iii)                 Ifthe Borrower or any of its Subsidiaries shall receive Net Proceeds from anyAsset Sale, 100% of such Net Proceeds shall be applied within three BusinessDays after receipt thereof toward the prepayment of the Loans in accordancewith Section 2.05(e) below; provided that (x) the Net Proceedsfrom Asset Sales permitted by Section 6.05 shall not be required to be appliedas provided herein on such date if and to the extent that (1) no Defaultor Event of Default then exists or would arise therefrom and (2) theBorrower delivers an officers’ certificate to the Administrative Agent on orprior to the date of such Asset Sale stating that such Net Proceeds shall bereinvested or committed to be reinvested in capital assets of the Borrower orany Subsidiary in each case within 180 days following the date of such AssetSale (which certificate shall set forth the estimates of the proceeds to be soexpended), (y) all such Net Proceeds shall be held in the CollateralAccount and released therefrom only in accordance with the terms of theSecurity Agreement, and (z) if all or any portion of such Net Proceeds notso applied as provided herein is not so used within such 180-day period (or if,prior to such 180th day, the Borrower or any such Subsidiary shall have enteredinto a binding agreement to so use any such Net Proceeds, within 360 daysfollowing the date of such binding agreement), such remaining portion shall beapplied on the last day of such period as specified in this subsection(c)(iii); provided, further, if the Property subject to suchAsset Sale constituted Collateral under the Security Documents, then anycapital assets purchased with the Net Proceeds thereof pursuant to this subsectionshall be mortgaged or pledged, as the case may be, to the Collateral Agent, forits benefit and for the benefit of the other Secured Parties in accordance withSection 5.11.

 

(iv)                Ifthe Borrower or any of its Subsidiaries shall receive proceeds from insuranceor condemnation recoveries in respect of any Destruction or any proceeds orawards in respect of any Taking, 100% of the Net Proceeds thereof shall be appliedwithin three Business Days after receipt thereof toward the prepayment of theLoans in accordance with Section 2.05(e) below; provided, that(x) so long as no Default or Event of Default then exists or would arisetherefrom, such Net Proceeds shall not be required to be so applied to theextent that the Borrower has delivered an officers’ certificate to theAdministrative Agent promptly following the receipt of such Net Proceedsstating that such proceeds shall be used to (1) repair, replace or restoreany Property in respect of which such Net Proceeds were paid or (2) fundthe substitution of other Property used or usable in the business of the Borroweror the Subsidiaries, in each case within 180 days following the date ofthe receipt of such Net Proceeds, (y) all such Net Proceeds shall be heldin the Collateral Account and released therefrom only in accordance with theterms of the Security Agreement, and (z) if all or any portion of such NetProceeds not so applied as provided herein is not so used within 180 days (orif, prior to such 180th day, the Borrower or any such Subsidiary shall haveentered into a binding agreement to so use any such Net Proceeds, within 360days following the date of such binding agreement) after the date of the receiptof such Net Proceeds, such remaining portion shall be applied on the last dayof such period as specified in this subsection (c)(iv); provided, further,if the Property subject to such Destruction or Taking constituted Collateralunder the Security Documents, then any replacement or substitution Propertypurchased with the Net Proceeds thereof pursuant to this subsection shall bemortgaged or pledged, as the case may be, to the Collateral Agent, for itsbenefit and for the benefit of the other Secured Parties in accordance with Section 5.11.

 

(v)                 If,for any Fiscal Year of the Borrower commencing with its Fiscal Year ending on December30, 2006, there shall be Excess Cash Flow for such Fiscal Year, an amount equalto (a) the Excess Cash Flow Percentage of such Excess Cash Flow less (b) theamount of Debt Repayments for such Fiscal Year shall be applied, not later than10 days after the date upon which the Borrower is required to deliver itsannual audit report pursuant to Section 5.01(b), toward the prepayment of theLoans in accordance with Section 2.05(e) below.

 

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### (d)           The Term Loans shall be repaid inconsecutive quarterly installments on the dates set forth below (each such day,an “Installment Payment Date”), commencing on March 31, 2006, in anaggregate amount equal to the amount specified below for each such InstallmentPayment Date.

###  

| **Installment Payment Date** | ** ** | **Installment Amount** | ** **  |
|------------------------------|------------|------------------------|-------------|
|                         |       |                   |        |   |
| March 31, 2006               |       | $                      | 1,012,500   |   |
| June 30, 2006                |       | $                      | 1,012,500   |   |
| September 30, 2006           |       | $                      | 1,012,500   |   |
| December 31, 2006            |       | $                      | 1,012,500   |   |
| March 31, 2007               |       | $                      | 1,012,500   |   |
| June 30, 2007                |       | $                      | 1,012,500   |   |
| September 30, 2007           |       | $                      | 1,012,500   |   |
| December 31, 2007            |       | $                      | 1,012,500   |   |
| March 31, 2008               |       | $                      | 1,012,500   |   |
| June 30, 2008                |       | $                      | 1,012,500   |   |
| September 30, 2008           |       | $                      | 1,012,500   |   |
| December 31, 2008            |       | $                      | 1,012,500   |   |
| March 31, 2009               |       | $                      | 1,012,500   |   |
| June 30, 2009                |       | $                      | 1,012,500   |   |
| September 30, 2009           |       | $                      | 1,012,500   |   |
| December 31, 2009            |       | $                      | 1,012,500   |   |
| March 31, 2010               |       | $                      | 1,012,500   |   |
| June 30, 2010                |       | $                      | 1,012,500   |   |
| September 30, 2010           |       | $                      | 1,012,500   |   |
| December 31, 2010            |       | $                      | 1,012,500   |   |
| March 31, 2011               |       | $                      | 1,012,500   |   |
| June 30, 2011                |       | $                      | 1,012,500   |   |
| September 30, 2011           |       | $                      | 1,012,500   |   |
| December 31, 2011            |       | $                      | 1,012,500   |   |
| March 31, 2012               |       | $                      | 1,012,500   |   |
| June 30, 2012                |       | $                      | 1,012,500   |   |
| September 30, 2012           |       | $                      | 1,012,500   |   |
| Term Loan Maturity Date      |       | $                      | 377,662,500 |   |

 

### (e)           (i) Optional prepayments in respect of Term Loans under this Agreement andmandatory prepayments shall be applied first to reduce remaining scheduledinstallments of principal due in respect of outstanding Term Loans underSection 2.05(d) in direct order of maturity up to but not including the firstscheduled installment due after the date that is 24 months following the dateof such prepayment. After application of prepayments pursuant to the firstsentence of this paragraph (e)(i) and to the extent there are mandatory prepaymentamounts remaining after such application, such excess prepayments shall beapplied to reduce outstanding Term Loans pro rata against the remainingscheduled installments of principal due in respect of the Term Loans under Section2.05(d).

###  

(ii)                  Afterapplication of prepayments pursuant to paragraph (e)(i) and to the extent thereare prepayment amounts remaining after such application, the Revolving Loans shallbe repaid (but the Revolving Commitments not reduced), ratably among the RevolvingLenders, in accordance with their applicable Revolving Loans outstanding in anaggregate amount equal to the excess.

 

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(iii)                 Optionalterminations or reductions in Revolving Credit Commitments shall be made inaccordance with Section 2.11(b).

 

(iv)                Exceptas otherwise may be directed by the Borrower, any prepayment of Loans pursuantto this Section 2.05 shall be applied, first, to any ABR Loans thenoutstanding and the balance of such prepayment, if any, to the Eurodollar Loansthen outstanding.

 

(f)            Ifon any day on which Loans would otherwise be required to be prepaid pursuant tothis Section 2.05, but for the operation of this Section 2.05(f)(each, a “Prepayment Date”), the amount of such required prepaymentexceeds the then outstanding aggregate principal amount of ABR Loans which areof the Type required to be prepaid, and no Default or Event of Default existsor is continuing, then, at the Borrower’s election, on such Prepayment Date,(i) the Borrower shall deposit funds into the Collateral Account in anamount equal to such excess, and only the outstanding ABR Loans which are ofthe Type required to be prepaid shall be required to be prepaid on such PrepaymentDate, and (ii) on the last day of each Interest Period after suchPrepayment Date in effect with respect to a Eurodollar Loan which is of theType required to be prepaid, the Administrative Agent is irrevocably authorizedand directed to apply funds from the Collateral Account (and liquidateinvestments held in the Collateral Account as necessary) to prepay suchEurodollar Loans for which the Interest Period is then ending to the extentfunds are available in the Collateral Account.

###  

SECTION 2.06.              Lettersof Credit.

 

(a)           General.Subject to the terms and conditions set forth herein, the Borrower may requestthe issuance of Letters of Credit for its own account, in a form reasonablyacceptable to the Administrative Agent and the Issuing Bank, at any time andfrom time to time during the Revolving Credit Commitment Period. In the eventof any inconsistency between the terms and conditions of this Agreement and theterms and conditions of any form of letter of credit application or other agreementsubmitted by the Borrower to, or entered into by the Borrower with, the IssuingBank relating to any Letter of Credit, the terms and conditions of thisAgreement shall control.

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(b)           Noticeof Issuance, Amendment, Renewal, Extension; Certain Conditions. To requestthe issuance of a Letter of Credit (or the amendment, renewal or extension ofan outstanding Letter of Credit), the Borrower shall hand deliver or telecopy(or transmit by electronic communication, if arrangements for doing so have beenapproved by the Issuing Bank) to the Issuing Bank and the Administrative Agent(reasonably in advance of the requested date of issuance, amendment, renewal orextension) a notice requesting the issuance of a Letter of Credit, oridentifying the Letter of Credit to be amended, renewed or extended, and specifyingthe date of issuance, amendment, renewal or extension (which shall be aBusiness Day), the date on which such Letter of Credit is to expire (whichshall comply with paragraph (c) of this Section), the amount of suchLetter of Credit, the name and address of the beneficiary thereof and suchother information as shall be necessary to prepare, amend, renew or extend suchLetter of Credit. If requested by the Issuing Bank, the Borrower also shallsubmit a letter of credit application on the Issuing Bank’s standard form in connectionwith any request for a Letter of Credit. A Letter of Credit shall be issued,amended, renewed or extended only if (and upon issuance, amendment, renewal orextension of each Letter of Credit the Borrower shall be deemed to representand warrant that), after giving effect to such issuance, amendment, renewal orextension, (i) the LC Exposure shall not exceed $25.0 million and(ii) the Aggregate Revolving Credit Exposure shall not exceed the TotalRevolving Credit Commitment. With respect to any Letter of Credit which containsany “evergreen” automatic renewal provision, the Issuing Bank shall be deemedto have consented to any such extension or renewal provided that all of therequirements of this Section 2.06 are met and no Default or Event of Defaultexists.

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(c)           ExpirationDate. Each Letter of Credit shall expire at or prior to the close ofbusiness on the earlier of (i) the date one year after the date of theissuance of such Letter of Credit (or, in the case of any renewal or extensionthereof, one year after such renewal or extension) and (ii) the date thatis five Business Days prior to the Revolving Credit Maturity Date.

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(d)           Participations.By the issuance of a Letter of Credit (or an amendment to a Letter of Creditincreasing the amount thereof) and without any further action on the part ofthe Issuing Bank or the Lenders, the Issuing Bank hereby grants to each RevolvingLender, and each Revolving Lender hereby acquires from the Issuing Bank, aparticipation in such Letter of Credit equal to such Revolving Lender’sCommitment Percentage of the aggregate amount available to be drawn under suchLetter of Credit. In consideration and in furtherance of the foregoing, eachRevolving Lender hereby absolutely and unconditionally agrees to pay to the AdministrativeAgent, for the account of the Issuing Bank, such Revolving Lender’s CommitmentPercentage of each LC Disbursement made by the Issuing Bank and not reimbursedby the Borrower on the date due as provided in paragraph (e) of thisSection, or of any reimbursement payment required to be refunded to theBorrower for any reason. Each Revolving Lender acknowledges and agrees that itsobligation to acquire participations pursuant to this paragraph in respect ofLetters of Credit is absolute and unconditional and shall not be affected byany circumstance whatsoever, including any amendment, renewal or extension ofany Letter of Credit or the occurrence and continuance of a Default or an Eventof Default or reduction or termination of the Revolving Credit Commitments, andthat each such payment shall be made without any offset, abatement, withholdingor reduction whatsoever.

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(e)           Reimbursement.If the Issuing Bank shall make any LC Disbursement in respect of a Letter ofCredit, the Borrower shall reimburse such LC Disbursement by paying to theAdministrative Agent an amount equal to such LC Disbursement not later than12:00 noon, New York City time, on the date that such LC Disbursement ismade, if the Borrower shall have received notice of such LC Disbursement priorto 10:00 a.m., New York City time, on such date, or, if such noticehas not been received by the Borrower prior to such time on such date, then notlater than 12:00 noon, New York City time, on (i) the Business Daythat the Borrower receives such notice, if such notice is received prior to10:00 a.m., New York City time, on the day of receipt, or(ii) the Business Day immediately following the day that the Borrowerreceives such notice, if such notice is not received prior to such time on theday of receipt; provided that the Borrower may, subject to theconditions to borrowing set forth herein, request in accordance with Section 2.02that such payment be financed with an ABR Revolving Borrowing or Swingline Loanin an equivalent amount and, to the extent so financed, the Borrower’sobligation to make such payment shall be discharged and replaced by theresulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails tomake such payment when due, the Administrative Agent shall notify each RevolvingLender of the applicable LC Disbursement, the payment then due from the Borrowerin respect thereof and such Revolving Lender’s Commitment Percentage thereof. Promptlyfollowing receipt of such notice, each Revolving Lender shall pay to the AdministrativeAgent its Commitment Percentage of the payment then due from the Borrower, inthe same manner as provided in Section 2.02 with respect to Loans made bysuch Revolving Lender (and Section 2.02 shall apply, mutatismutandis,to the payment obligations of the Revolving Lenders), and the AdministrativeAgent shall promptly pay to the Issuing Bank the amounts so received by it fromthe Revolving Lenders. Promptly following receipt by the Administrative Agentof any payment from the Borrower pursuant to this paragraph, the AdministrativeAgent shall distribute such payment to the Issuing Bank or, to the extent thatRevolving Lenders have made payments pursuant to this paragraph to reimbursethe Issuing Bank, then to such Revolving Lenders and the Issuing Bank as theirinterests may appear. Any payment made by a Revolving Lender pursuant to thisparagraph to reimburse the Issuing Bank for any LC Disbursement (other than thefunding of ABR 

 

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Revolving Loans or a Swingline Loan as contemplated above) shall notconstitute a Loan and shall not relieve the Borrower of its obligation toreimburse such LC Disbursement.

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(f)            ObligationsAbsolute. The Borrower’s obligation to reimburse LC Disbursements asprovided in paragraph (e) of this Section 2.06 shall be absolute,unconditional and irrevocable, and shall be performed strictly in accordancewith the terms of this Agreement under any and all circumstances whatsoever andirrespective of (i) any lack of validity or enforceability of any Letterof Credit or this Agreement, or any term or provision therein, (ii) anydraft or other document presented under a Letter of Credit proving to beforged, fraudulent or invalid in any respect or any statement therein beinguntrue or inaccurate in any respect, (iii) payment by the Issuing Bank undera Letter of Credit against presentation of a draft or other document that doesnot comply with the terms of such Letter of Credit, or (iv) any otherevent or circumstance whatsoever, whether or not similar to any of theforegoing, that might, but for the provisions of this Section, constitute alegal or equitable discharge of, or provide a right of setoff against, theBorrower’s obligations hereunder. Neither the Administrative Agent, theRevolving Lenders nor the Issuing Bank, nor any of their Related Parties, shallhave any liability or responsibility by reason of or in connection with theissuance or transfer of any Letter of Credit or any payment or failure to makeany payment thereunder (irrespective of any of the circumstances referred to inthe preceding sentence), or any error, omission, interruption, loss or delay intransmission or delivery of any draft, notice or other communication under orrelating to any Letter of Credit (including any document required to make adrawing thereunder), any error in interpretation of technical terms or anyconsequence arising from causes beyond the control of the Issuing Bank; providedthat the foregoing shall not be construed to excuse the Issuing Bank fromliability to the Borrower to the extent of any direct damages (as opposed toconsequential damages, claims in respect of which are hereby waived by theBorrower to the extent permitted by applicable law) suffered by the Borrowerthat are caused by the Issuing Bank’s bad faith, gross negligence or willfulmisconduct or its failure to exercise care when determining whether drafts andother documents presented under a Letter of Credit comply with the termsthereof. The parties hereto expressly agree that, in the absence of bad faith,gross negligence or willful misconduct on the part of the Issuing Bank (as finallydetermined by a court of competent jurisdiction), the Issuing Bank shall bedeemed to have exercised care in each such determination. In furtherance of theforegoing and without limiting the generality thereof, the parties agree that,with respect to documents presented which appear on their face to be insubstantial compliance with the terms of a Letter of Credit, the Issuing Bankmay, in its sole discretion, either accept and make payment upon such documentswithout responsibility for further investigation, regardless of any notice or informationto the contrary, or refuse to accept and make payment upon such documents ifsuch documents are not in strict compliance with the terms of such Letter ofCredit.

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(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 promptly notify the AdministrativeAgent and the Borrower by telephone (confirmed by telecopy) of such demand forpayment and whether the Issuing Bank has made or will make an LC Disbursementthereunder; provided that any failure to give or delay in giving suchnotice shall not relieve the Borrower of its obligation to reimburse theIssuing Bank and the Revolving Lenders with respect to any such LCDisbursement.

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(h)           InterimInterest. If the Issuing Bank shall make any LC Disbursement, then, unlessthe Borrower shall reimburse such LC Disbursement in full on the date such LCDisbursement is made, the unpaid amount thereof shall bear interest, for eachday from and including the date such LC Disbursement is made to but excludingthe date that the Borrower reimburses such LC Disbursement, at the rate perannum then applicable to ABR Revolving Loans; provided that if theBorrower fails to reimburse such LC Disbursement when due pursuant toparagraph (e) of this Section 2.06, then Section 2.08(c)

 

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shall apply. Interest accrued pursuant to this paragraph shall be forthe account of the Issuing Bank, except that interest accrued on and after thedate of payment by any Revolving Lender pursuant to paragraph (e) of thisSection 2.07 to reimburse the Issuing Bank shall be for the account ofsuch Lender to the extent of such payment.

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(i)            Replacementof the Issuing Bank. The Issuing Bank may be replaced at any time bywritten agreement among the Borrower, the Administrative Agent, the replacedIssuing Bank and the successor Issuing Bank. The Administrative Agent shall notifythe Lenders of any such replacement of the Issuing Bank. At the time any suchreplacement shall become effective, the Borrower shall pay all unpaid feesaccrued for the account of the replaced Issuing Bank pursuant to Section 2.10(b).From and after the effective date of any such replacement, (i) thesuccessor Issuing Bank shall have all the rights and obligations of the IssuingBank under this Agreement with respect to Letters of Credit to be issuedthereafter and (ii) references herein to the term “Issuing Bank” shall bedeemed to refer to such successor or to any previous Issuing Bank, or to suchsuccessor and all previous Issuing Banks, as the context shall require. Afterthe replacement of an Issuing Bank hereunder, the replaced Issuing Bank shallremain a party hereto and shall continue to have all the rights and obligationsof an Issuing Bank under this Agreement with respect to Letters of Creditissued by it prior to such replacement, but shall not be required to issueadditional Letters of Credit.

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(j)            CashCollateralization. If any Event of Default shall occur and be continuing,on the Business Day that the Borrower receives notice from the AdministrativeAgent or the Requisite Lenders (or, if the maturity of the Loans has beenaccelerated, Revolving Lenders with LC Exposure representing greater than 50%of the total LC Exposure) demanding the deposit of cash collateral pursuant tothis paragraph, the Borrower shall deposit in the Collateral Account an amountin cash equal to the LC Exposure as of such date plus any accrued and unpaidinterest thereon; provided that the obligation to deposit such cashcollateral shall become effective immediately, and such deposit shall becomeimmediately due and payable, without demand or other notice of any kind, uponthe occurrence of any Event of Default with respect to the Borrower describedin clause (a) of Section 7.01 or any Event of Default described inclause (i) of Section 7.01. Each such deposit shall be held by theCollateral Agent as collateral for the payment and performance of theobligations of the Borrower under this Agreement and the Borrower hereby grantsthe Collateral Agent a security interest in respect of each such deposit andthe Collateral Account in which such deposits are held. The Collateral Agentshall have exclusive dominion and control, including the exclusive right ofwithdrawal, over the Collateral Account. Other than any interest earned on theinvestment of such deposits, which investments shall be made in accordance withthe Security Agreement, such deposits shall not bear interest. Interest orprofits, if any, on such investments shall accumulate in the Collateral Account.Moneys deposited in the Collateral Account pursuant to thisSection 2.06(j) shall be applied by the Collateral Agent to reimburse theIssuing Bank for LC Disbursements for which it has not been reimbursed and, tothe extent not so applied, shall be held for the satisfaction of the reimbursementobligations of the Borrower for the LC Exposure at such time or, if thematurity of the Loans has been accelerated (but subject to the consent ofRevolving Lenders with LC Exposure representing greater than 50% of the totalLC Exposure), be applied to satisfy other obligations of the Borrower underthis Agreement. 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 the Borrowerwithin three Business Days after all Defaults or Events of Default have beencured or waived.

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SECTION 2.07.              Repaymentof Loans; Evidence of Debt. (a)  TheBorrower hereby unconditionally promises to pay to the Administrative Agent forthe account of the relevant Lenders (i) in respect of Revolving CreditBorrowings, on the Revolving Credit Maturity Date (or such earlier date as, andto the extent that, such Revolving Loan becomes due and payable pursuant toSection 2.05 or Article VII),

 

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the unpaid principal amount of each RevolvingLoan and each Swingline Loan made to it by each such Lender and (ii) inrespect of Term Borrowings, on the Term Loan Maturity Date (or such earlierdate as, and to the extent that, such Term Loan becomes due and payable pursuantto Section 2.05 or Article VII), the unpaid principal amount of eachTerm Loan held by each such Lender. The Borrower hereby further agrees to payinterest in immediately available funds at the applicable office of the AdministrativeAgent (as specified in Section 2.13(a)) on the unpaid principal amount ofthe Revolving Loans, Swingline Loans and Term Loans made to it from time totime from the date hereof until payment in full thereof at the rates per annum,and on the dates, set forth in Section 2.08. All payments required hereundershall be made in Dollars.

 

### (b)           Each Lender shall maintain inaccordance with its usual practice an account or accounts evidencing the indebtednessof the Borrower to the appropriate lending office of such Lender resulting fromeach Loan made by such lending office of such Lender from time to time,including the amounts of principal and interest payable and paid to suchlending office of such Lender from time to time under this Agreement.

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### (c)           The Administrative Agent shallmaintain the Register pursuant to Section 9.04, and a subaccount for eachLender, in which Register and subaccounts (taken together) shall be recorded(i) the amount of each such Loan, the Class and Type of each such Loan andthe Interest Period applicable thereto, (ii) the amount of any principalor interest due and payable or to become due and payable from the Borrower toeach Lender hereunder in respect of each such Loan and (iii) the amount ofany sum received by the Administrative Agent hereunder from the Borrower inrespect of each such Loan and each Lender’s share thereof.

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### (d)           The entries made in the Register andaccounts maintained pursuant to paragraphs (b) and (c) of this Section 2.07and the Notes maintained pursuant to paragraph (e) of this Section 2.07shall, to the extent permitted by applicable law, be prima facie evidence ofthe existence and amounts of the obligations of the Borrower therein recorded; provided,however, that the failure of any Lender or the Administrative Agent tomaintain such account, such Register or such subaccount, as applicable, or anyerror therein, shall not in any manner affect the obligation of the Borrower torepay (with applicable interest) the Loans made to the Borrower by such Lenderin accordance with the terms of this Agreement.

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### (e)           The Loans of each Class made by eachLender to the Borrower shall, if requested by the applicable Lender (whichrequest shall be made to the Administrative Agent), be evidenced by a singleNote duly executed on behalf of the Borrower, in substantially the formattached hereto as Exhibit F-1, -2 or -3, asapplicable, with the blanks appropriately filled, payable to the order of suchLender.

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SECTION 2.08.              InterestRates and Payment Dates. (a)  EachEurodollar Loan shall bear interest (computed on the basis of the actual numberof days elapsed over a year of 360 days) for each day during each InterestPeriod with respect thereto at a rate per annum equal to the Adjusted LIBO Ratedetermined for such Interest Period, plus the Applicable Rate.

 

### (b)           Each ABR Loan (including eachSwingline Loan) shall bear interest (computed on the basis of the actual numberof days elapsed over a year of 365 or 366 days, as the case may be, or over ayear of 360 days when the Alternate Base Rate is determined by reference toclause (c) of the definition of “Alternate Base Rate”) at a rate per annumequal to the Alternate Base Rate plus the Applicable Rate.

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### (c)           If all or a portion of (i) theprincipal amount of any Loan, (ii) any interest payable thereon or(iii) any Commitment Fee or other amount payable hereunder shall not bepaid when due (whether at the stated maturity thereof or by acceleration orotherwise), such overdue amount shall bear interest at a rate per annum whichis (x) in the case of overdue principal (except as otherwise provided inclause (y) below), the rate that would otherwise be applicable theretopursuant to the foregoing provisions of this Section 2.08 plus2.00% per annum or (y) in the case of any overdue interest, Commitment Feeor other amount, the rate described in Section 2.08(b) applicable to anABR Revolving Loan plus 2.00% per annum, in each case from the date ofsuch nonpayment to (but excluding) the date on which such amount is paid infull (after as well as before judgment).

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### (d)           Interest shall be payable in arrearson each Interest Payment Date and on the Term Loan Maturity Date and theRevolving Credit Maturity Date; provided that (i) interest accruedpursuant to paragraph (c) of this Section shall be payable on demand,(ii) in the event of any repayment or prepayment of any Loan, accruedinterest on the principal amount repaid or prepaid shall be payable on the dateof such repayment or prepayment and (iii) in the event of any conversionof any Eurodollar Loan prior to the end of the current Interest Periodtherefor, accrued interest on such Loan shall be payable on the effective dateof such conversion. Interest in respect of each Loan shall accrue from andincluding the first day of an Interest Period to but excluding the last day ofsuch Interest Period.

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SECTION 2.09.              Computationof Interest. Each determination of an interest rate by the AdministrativeAgent pursuant to any provision of this Agreement shall be conclusive andbinding on the Borrower and the Lenders in the absence of manifest error.

 

SECTION 2.10.              Fees.(a)  The Borrower agrees to pay acommitment fee (a “Commitment Fee”) to each Revolving Lender, for whichpayment will be made in arrears through the Administrative Agent on the lastday of March, June, September and December beginning after the Effective Date,and on the Commitment Fee Termination Date (as defined below). The CommitmentFee due to each Revolving Lender shall commence to accrue for a periodcommencing on the Effective Date and shall cease to accrue on the date (the “CommitmentFee Termination Date”) that is the earlier of (i) the date on whichthe Revolving Credit Commitment of such Revolving Lender shall be terminated asprovided herein and (ii) the first date after the end of the RevolvingCredit Commitment Period. The Commitment Fee accrued to each Revolving Lendershall equal the Commitment Fee Percentage multiplied by such Lender’s CommitmentFee Average Daily Amount (as defined below) for the applicable quarter (orshorter period commencing on the date of this Agreement and ending with suchLender’s Commitment Fee Termination Date). A Revolving Lender’s “CommitmentFee Average Daily Amount” with respect to a calculation period shall equalthe average daily amount during such period calculated using the daily amountof such Revolving Lender’s Revolving Credit Commitment less such RevolvingLender’s Revolving Credit Exposure (excluding clause (c) of the definitionthereof for purposes of determining the Commitment Fee Average Daily Amountonly) for any applicable days during such Revolving Lender’s Revolving CreditCommitment Period. All Commitment Fees shall be computed on the basis of the actualnumber of days elapsed in a year of 360 days.

 

### (b)           The Borrower agrees to pay(i) to the Administrative Agent for the account of each Revolving Lender aparticipation fee with respect to its participations in Letters of Credit,which shall accrue at a rate equal to the Applicable Rate for Eurodollar RevolvingLoans on the average daily amount of such Lender’s LC Exposure (excluding anyportion thereof attributable to unreimbursed LC Disbursements) during theperiod from and including the Effective Date to but excluding the later of thedate on which such Revolving Lender’s Revolving Credit Commitment terminatesand the date on which such Revolving Lender ceases to have any LC Exposure, and(ii) to the Issuing Bank a fronting fee, which 

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### shall accrue at the rate of 0.125% per annum on the average dailyamount of the LC Exposure (excluding any portion thereof attributable tounreimbursed LC Disbursements) during the period from and including theEffective Date to but excluding the later of the date of termination of theRevolving Credit Commitments and the date on which there ceases to be any LCExposure, as well as the Issuing Bank’s reasonable and customary fees withrespect to the issuance, amendment, renewal or extension of any Letter ofCredit or processing of drawings thereunder. Participation fees and frontingfees (collectively, “LC Fees”) accrued through and including the lastday of March, June, September and December of each calendar year during theRevolving Credit Commitment Period shall be payable on the third Business Dayfollowing such last day, commencing on the first such date to occur after theEffective Date; provided that all such fees shall be payable on the dateon which the Revolving Credit Commitments terminate and any such fees accruingafter the date on which the Revolving Credit Commitments terminate shall bepayable on demand. Any other fees payable to the Issuing Bank pursuant to thisparagraph shall be payable within 10 days after demand therefor. Allparticipation fees and fronting fees shall be computed on the basis of a yearof 360 days and shall be payable for the actual number of days elapsed(including the first day but excluding the last day).

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### (c)           The Borrower agrees to pay to theAdministrative Agent the correct administrative fee set forth in the EngagementLetter (the “Agent Fees”).

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### (d)           All Fees shall be paid on the datesdue, in immediately available funds, to the Administrative Agent for distribution.Once paid, none of the Fees shall be refundable.

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SECTION 2.11.              Termination,Reduction or Adjustment of Commitments. (a) Unless previously terminated, (i) the Term Commitments shall terminateat 5:00 p.m., New York City time, on the Effective Date and(ii) the Revolving Credit Commitments shall terminate on the RevolvingCredit Maturity Date.

 

### (b)           The Borrower shall have the right,upon one Business Day’s notice to the Administrative Agent, to terminate or,from time to time, reduce the amount of the Revolving Credit Commitments; providedthat no such termination or reduction of Revolving Credit Commitments shall bepermitted if, after giving effect thereto and to any repayments of the Loansmade on the effective date thereof, the Aggregate Revolving Credit Exposurethen outstanding would exceed the Total Revolving Credit Commitment then ineffect.

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### (c)           The Borrower shall pay to theAdministrative Agent for the account of the applicable Revolving Lenders, oneach date of termination or reduction of the Revolving Credit Commitments, theCommitment Fee on the amount of the Revolving Credit Commitments so terminatedor reduced accrued to the date of such termination or reduction.

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SECTION 2.12.              Inabilityto Determine Interest Rate; Unavailability of Deposits; Inadequacy of InterestRate. If prior to 11:00 a.m., London time, two Business Days beforethe first day of any Interest Period, including an initial Interest Period, fora requested Eurodollar Borrowing:

 

#### (i)              theAdministrative Agent shall have determined in good faith (which determinationshall be conclusive and binding upon the Borrower) that, by reason ofcircumstances affecting the relevant market generally, adequate and reasonablemeans do not exist for ascertaining the Adjusted LIBO Rate for such EurodollarBorrowing for such Interest Period, or

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#### (ii)             theAdministrative Agent shall have received notice from a majority in interest ofthe Lenders of the applicable Class that the Adjusted LIBO Rate determined orto be determined for such Interest Period for such Eurodollar Borrowing willnot adequately and fairly reflect the cost to such Lenders (as conclusivelycertified by such Lenders) of making or maintaining their affected Loans duringsuch Interest Period,

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#### then the Administrative Agent shall give telecopy or telephonic noticethereof to the Borrower and the Lenders by 12:00 noon, New York City time, onthe same day. The Administrative Agent shall give telecopy or telephonic noticeto the Borrower and the Lenders as soon as practicable after the circumstancesgiving rise to such notice no longer exist, and until such notice has beengiven, any affected Eurodollar Loans shall not be (x) converted orcontinued pursuant to Section 2.03 or (y) made pursuant to aBorrowing Request, and shall be continued or made as an ABR Loans, as the casemay be.

 

SECTION 2.13.              ProRata Treatment and Payments. (a)  Eachreduction of the Revolving Credit Commitments of the Revolving Lenders shall bemade pro rata according to the amounts ofsuch Revolving Lenders’ Commitment Percentages. Each payment (including eachprepayment) by the Borrower on account of principal of and interest on Loanswhich are ABR Loans shall be made pro rataaccording to the respective outstanding principal amounts of such ABR Loansthen held by the Lenders of the applicable Class. Each payment (including eachprepayment) by the Borrower on account of principal of and interest on Loanswhich are Eurodollar Loans designated by the Borrower to be applied to aparticular Eurodollar Borrowing shall be made prorata according to the respective outstanding principal amounts of suchLoans then held by the Lenders of the applicable Class. Each payment (includingeach prepayment) by the Borrower on account of principal of and interest onSwingline Loans shall be made pro rataaccording to the respective outstanding principal amounts of the SwinglineLoans or participating interests therein, as the case may be, then held by therelevant Lenders. All payments (including prepayments) to be made by theBorrower hereunder, whether on account of principal, interest, fees orotherwise, shall be made without setoff or counterclaim and shall be made priorto 12:00 noon, New York time, on the due date thereof to the AdministrativeAgent, for the account of the Lenders of the applicable Class, at theAdministrative Agent’s New York office specified in Section 9.01 inDollars and in immediately available funds. The Administrative Agent shalldistribute such payments to the Lenders entitled thereto promptly upon receipt.If any payment hereunder (other than payments on Eurodollar Loans) becomes dueand payable on a day other than a Business Day, such payment shall be extendedto the next succeeding Business Day, and, with respect to payments ofprincipal, interest thereon shall be payable at the then applicable rate duringsuch extension. If any payment on a Eurodollar Loan becomes due and payable ona day other than a Business Day, the maturity thereof shall be extended to thenext succeeding Business Day (and, with respect to payments of principal,interest thereon shall be payable at the then applicable rate during suchextension) unless the result of such extension would be to extend such paymentinto another calendar month, in which event such payment shall be made on the immediatelypreceding Business Day.

 

### (b)           Subject to Section 2.12, unlessthe Administrative Agent shall have been notified in writing by any Lenderprior to a Borrowing that such Lender will not make the amount that wouldconstitute its share of such Borrowing available to the Administrative Agent,the Administrative Agent may assume that such Lender is making such amountavailable to the Administrative Agent, and the Administrative Agent may, inreliance upon such assumption, make available to the Borrower a correspondingamount. If such amount is not made available to the Administrative Agent by therequired time on the Borrowing Date therefor, such Lender shall pay to theAdministrative Agent, on demand, such amount with interest thereon at a rateequal to the daily average Federal Funds Rate for the period until such Lendermakes such amount immediately available to the Administrative Agent. Acertificate of the Administrative Agent submitted to any Lender with respect toany amounts owing under this Section 2.13(b) 

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### shall be conclusive in the absence of manifest error. If such Lender’sshare of such Borrowing is not made available to the Administrative Agent bysuch Lender within three Business Days of such Borrowing Date, theAdministrative Agent shall also be entitled to recover such amount with interestthereon at the rate per annum applicable to ABR Revolving Loans hereunder, ondemand, from the Borrower, but without prejudice to any right or claim that theBorrower may have against such Lender.

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### (c)           If at any time insufficient funds arereceived by and available to the Administrative Agent to pay fully all amountsof principal, unreimbursed LC Disbursements, interest and fees then duehereunder, such funds shall be applied (i) first, towards payment ofinterest and fees then due hereunder, ratably among the parties entitledthereto in accordance with the amounts of interest and fees then due to suchparties, and (ii) second, towards payment of principal and unreimbursed LCDisbursements then due hereunder, ratably among the parties entitled thereto inaccordance with the amounts of principal and unreimbursed LC Disbursements thendue to such parties.

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SECTION 2.14.              Illegality.Notwithstanding any other provision herein, if the adoption of or any change inany Requirement of Law, or in the interpretation or application thereof, shallmake it unlawful for any Lender to make or maintain Eurodollar Loans ascontemplated by this Agreement, (a) the commitment of such Lenderhereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convertABR Loans to Eurodollar Loans shall forthwith be suspended until such time asthe making or maintaining of Eurodollar Loans shall no longer be unlawful, and(b) such Lender’s Loans then outstanding as Eurodollar Loans, if any,shall be converted automatically to ABR Loans on the respective last days ofthe then current Interest Periods with respect to such Loans or within suchearlier period as required by law.

 

SECTION 2.15.              Requirementsof Law. (a)  If at any time any Lender or the Issuing Bankreasonably determines that the introduction of, or any change in or in theinterpretation of, any law, treaty or governmental rule, regulation or order(other than any change by way of imposition or increase of reserve requirementsincluded in determining the Adjusted LIBO Rate) or the compliance by suchLender or the Issuing Bank with any guideline, request or directive from anycentral bank or other Governmental Authority (whether or not having the forceof law), shall have the effect of increasing the cost to such Lender or theIssuing Bank for agreeing to make or making, funding or maintaining any EurodollarLoans or participating in, issuing or maintaining any Letter of Credit, thenthe Borrower shall from time to time, within five days of demand therefor bysuch Lender or the Issuing Bank (with a copy of such demand to theAdministrative Agent), pay to the Administrative Agent for the account of suchLender or the Issuing Bank additional amounts sufficient to compensate suchLender or the Issuing Bank for such increased cost. A certificate as to theamount of such increased cost, submitted to the Borrower and the AdministrativeAgent by such Lender or the Issuing Bank, shall be conclusive and binding forall purposes, absent manifest error. Such Lender or the Issuing Bank, asapplicable, shall promptly notify the Administrative Agent and the Borrower inwriting of the occurrence of any such event, such notice to state, in reasonabledetail, the reasons therefor and the additional amount required fully tocompensate such Lender or the Issuing Bank, as applicable, for such increasedcost or reduced amount. Such additional amounts shall be payable directly tosuch Lender or the Issuing Bank, as applicable, within five days of theBorrower’s receipt of such notice, and such notice shall, in the absence ofmanifest error, be conclusive and binding on the Borrower.

 

### (b)           If any change in, or theintroduction, adoption, effectiveness, interpretation, reinterpretation orphase-in of, any law or regulation, directive, guideline, decision or request(whether or not having the force of law) of any court, central bank, regulatoror other Governmental Authority after the date hereof affects or would affectthe amount of capital required or expected to be maintained by any Lender orthe Issuing Bank (or a holding company controlling such Lender or the IssuingBank) and such 

###  

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### 

###  

### Lender or the Issuing Bank reasonably determines that the rate ofreturn on its capital (or the capital of its holding company, as the case maybe) as a consequence of its Revolving Credit Commitment or the Loans made by itor its participations in Swingline Loans or any issuance, participation ormaintenance of Letters of Credit is reduced to a level below that which suchLender or the Issuing Bank (or its holding company) could have achieved but forthe occurrence of any such circumstance, then, in any such case upon notice fromtime to time by such Lender or the Issuing Bank to the Borrower, the Borrowershall, within five days of the Borrower’s receipt of such notice, pay directlyto such Lender or the Issuing Bank, as the case may be, additional amountssufficient to compensate such Lender or the Issuing Bank (or its holdingcompany) for such reduction in rate of return. A statement of such Lender orthe Issuing Bank as to any such additional amount or amounts (includingcalculations thereof in reasonable detail) shall, in the absence of manifesterror, be conclusive and binding on the Borrower. In determining such amount,such Lender or the Issuing Bank may use any reasonable method of averaging andattribution that it shall deem applicable.

###  

### (c)           In the event that the Issuing Bank orany Lender determines that any event or circumstance that will lead to a claimunder this Section 2.15 has occurred or will occur, the Issuing Bank orsuch Lender will use its best efforts to so notify the Borrower; providedthat any failure to provide such notice shall in no way impair the rights ofthe Issuing Bank or such Lender to demand and receive compensation under thisSection 2.15, but without prejudice to any claims of the Borrower forcompensation for actual damages sustained as a result of any failure to observethis undertaking.

###  

SECTION 2.16.              Taxes.All payments by the Borrower of principal of, and interest on, the Loans andall other amounts payable hereunder shall be made free and clear of and withoutdeduction for any present or future income, excise, stamp or franchise taxesand other taxes, fees, duties, withholdings or other charges of any naturewhatsoever imposed by any taxing authority on the Administrative Agent, theIssuing Bank or any Lender (or any assignee of such Lender or the Issuing Bank,as the case may be, or a Participant or a change in designation of the lendingoffice of a Lender or the Issuing Bank, as the case may be (a “Transferee”)),but excluding franchise taxes and taxes imposed on or measured by the recipient’snet income (such non-excluded items being called “Taxes”) unless requiredby applicable law, rule or regulation. In the event that any withholding ordeduction from any payment to be made by the Borrower hereunder is required inrespect of any Taxes pursuant to any applicable law, rule or regulation, thenthe Borrower will:

 

(a)           pay directly to therelevant authority the full amount required to be so withheld or deducted;

 

(b)           promptly forward tothe Administrative Agent an official receipt or other documentation reasonablysatisfactory to the Administrative Agent evidencing such payment to suchauthority; and

 

(c)           pay to theAdministrative Agent for the account of the Lenders or the Issuing Bank, as thecase may be, such additional amount or amounts as are necessary to ensure thatthe net amount actually received by each Lender or the Issuing Bank, as thecase may be, will equal the full amount such Lender or the Issuing Bank, as thecase may be, would have received had no such withholding or deduction beenrequired.

 

Moreover, if any Taxes are directly assertedagainst the Administrative Agent, the Issuing Bank or any Lender or Transfereewith respect to any payment received by the Administrative Agent, the IssuingBank or such Lender or Transferee hereunder, the Administrative Agent, theIssuing Bank or such Lender or Transferee may pay such Taxes and the Borrowerwill promptly pay such additional amounts (including 

 

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any penalties, interest or expenses) as shallbe necessary in order that the net amount received by such Person after thepayment of such Taxes (including any Taxes on such additional amount) shallequal the amount such Person would have received had such Taxes not beenasserted. In addition, the Borrower shall also reimburse each Lender orTransferee or the Issuing Bank, upon the written request of such Lender orTransferee or Issuing Bank, for taxes imposed on or measured by the net incomeof such Person pursuant to the laws of the United States of America, any stateor political subdivision thereof, or the jurisdiction in which such Person isincorporated, or a jurisdiction in which the principal executive office orlending office of such Person is located, or under the laws of any politicalsubdivision or taxing authority of any such jurisdiction, as such Person shallreasonably determine are or were payable by such Person, in respect of amountspayable to such Person pursuant to this Section 2.16 taking into accountthe amount of Taxes that are (x) allowed as a deduction in determiningtaxes imposed on or measured by the net income or allowed as a credit againstany taxes imposed on or measured by net income and (y) payable to suchPerson pursuant to this Section 2.16.

 

If the Borrower fails to pay any Taxes whendue to the appropriate taxing authority or fails to remit to the AdministrativeAgent, for the account of the Issuing Bank, the respective Lenders orTransferees, the required receipts or other required documentary evidence, theBorrower shall indemnify the Issuing Bank, Lenders and Transferees for anyincremental Taxes, interest, penalties or other costs (including reasonableattorneys’ fees and expenses) that may become payable by the Issuing Bank, anyLender or Transferee as a result of any such failure. For purposes of thisSection 2.16, a distribution hereunder by the Administrative Agent to orfor the account of the Issuing Bank, any Lender or Transferee shall be deemed apayment by the Borrower.

 

Each Lender or Transferee that is organizedunder the laws of a jurisdiction other than the United States of America or anystate or political subdivision thereof shall, on or prior to the Effective Date(in the case of each Lender that is a party hereto on the Effective Date) or onor prior to the date of any assignment, participation or change in thedesignated lending office hereunder (in the case of a Transferee) andthereafter as reasonably requested from time to time by the Borrower or theAdministrative Agent, execute and deliver, if legally able to do so, to theBorrower and the Administrative Agent one or more (as the Borrower or theAdministrative Agent may reasonably request) United States Internal RevenueService Forms W-8BEN or such other forms or documents (or successor forms ordocuments), appropriately completed, as may be applicable to establish theextent, if any, to which a payment to such Lender or Transferee is exempt fromor entitled to a reduced rate of withholding or deduction of Taxes.

 

With respect to obligations under thisAgreement other than those specified in the immediately following paragraph,the Borrower shall not be required to indemnify or to pay any additionalamounts to the Issuing Bank, any Lender or Transferee with respect to any Taxespursuant to this Section 2.16 to the extent that (i) any obligationto withhold, deduct or pay amounts with respect to such Tax existed on the datethe Issuing Bank, such Lender or Transferee became a party to this Agreement orotherwise becomes a Transferee (and, in such case, the Borrower may deduct andwithhold such Tax from payments to the Issuing Bank, such Lender orTransferee), or (ii) any Lender or Transferee fails to comply in full withthe provisions of the immediately preceding paragraph (and, in such case,the Borrower may deduct and withhold all Taxes required by law as a result ofsuch noncompliance from payments to the Issuing Bank, such Lender or Transferee).

 

Notwithstanding anything to the contrary inthis Section 2.16, if the Internal Revenue Service determines that aLender (or Transferee) is a conduit entity participating in a conduit financingarrangement as defined in Section 7701(l) of the Code and the regulationsthereunder and the Borrower was not a participant to such arrangement (otherthan as the Borrower under this Agreement) (a “Conduit Financing Arrangement”),then (i) the Borrower shall have no obligation to pay additional amountsor

 

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indemnify the Lender or Transferee for anyTaxes with respect to any payments hereunder to the extent the amount of suchTaxes exceeds the amount that would have otherwise been withheld or deductedhad the Internal Revenue Service not made such a determination and(ii) such Lender or Transferee shall indemnify the Borrower in full forany and all taxes for which the Borrower is held directly liable underSection 1461 of the Code by virtue of such Conduit Financing Arrangement; providedthat the Borrower (i) promptly forwards to the indemnitor an officialreceipt or other documentation satisfactorily evidencing such payment,(ii) shall contest such tax upon the reasonable request of the indemnitorand at such indemnitor’s cost and (iii) shall pay to such indemnitorwithin 30 days any refund of such taxes (including interest thereon). EachLender or Transferee represents that it is not participating in a ConduitFinancing Arrangement.

 

In the event that the Issuing Bank or anyLender determines that any event or circumstance that will lead to a claim byit under this Section 2.16 has occurred or will occur, the Issuing Bank orsuch Lender will use its best efforts to so notify the Borrower; providedthat any failure to provide such notice shall in no way impair the rights ofthe Issuing Bank or any Lender to demand and receive compensation under thisSection 2.16, but without prejudice to any claims of the Borrower forfailure to observe this undertaking.

 

SECTION 2.17.              Indemnity.In the event any Lender shall incur any loss or expense (including any loss(other than lost profit) or expense incurred by reason of the liquidation orreemployment of deposits or other funds acquired by such Lender to make,continue or maintain any portion of the principal amount of any Loan as, or toconvert any portion of the principal amount of any Loan into, a EurodollarLoan) as a result of any conversion of a Eurodollar Loan to an ABR Loan orrepayment or prepayment of the principal amount of any Eurodollar Loan on adate other than the scheduled last day of the Interest Period applicablethereto, whether pursuant to Section 2.03, 2.05, 2.07, 2.14, 2.15 or 2.20or otherwise, or any failure to borrow or convert any Eurodollar Loan afternotice thereof shall have been given hereunder, whether by reason of anyfailure to satisfy a condition to such Borrowing or otherwise, then, upon thewritten notice of such Lender to the Borrower (with a copy to theAdministrative Agent), the Borrower shall, within five days of its receiptthereof, pay directly to such Lender such amount as will (in the reasonabledetermination of such Lender) reimburse such Lender for such loss or expense. Suchwritten notice (which shall include calculations in reasonable detail) shall,in the absence of manifest error, be conclusive and binding on the Borrower.

 

SECTION 2.18.              Changeof Lending Office. Each Lender (or Transferee) agrees that, upon theoccurrence of any event giving rise to the operation of Section 2.14, 2.15or 2.16 with respect to such Lender (or Transferee), it will, if requested bythe Borrower, use commercially reasonable efforts (subject to overall policyconsiderations of such Lender (or Transferee)) to designate another lendingoffice for any Loans affected by such event with the object of avoiding theconsequences of such event; provided that such designation is made onterms that, in the sole judgment of such Lender, cause such Lender and itsrespective lending offices to suffer no material economic, legal or regulatorydisadvantage; and provided, further, that nothing in thisSection 2.18 shall affect or postpone any of the obligations of theBorrower or the rights of any Lender (or Transferee) pursuant toSections 2.14, 2.15 and 2.16.

 

SECTION 2.19.              Sharingof Setoffs. Each Lender agrees that if it shall, through the exercise of aright of banker’s lien, setoff or counterclaim against the Borrower, orpursuant to a secured claim under Section 506 of Title 11 of theUnited States Code or other security or interest arising from, or in lieu of,such secured claim received by such Lender under any applicable bankruptcy,insolvency or other similar law or otherwise, or by any other means, obtainpayment (voluntary or involuntary) in respect of any Loans or participations inLC Disbursements which at the time shall be due and payable as a result ofwhich the unpaid principal portion of its Loans and participations in LCDisbursements which at

 

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the time shall be due and payable shall beproportionately less than the unpaid principal portion of such Loans andparticipations in LC Disbursements of any other Lender, it shall be deemedsimultaneously to have purchased from such other Lender at face value, andshall promptly pay to such other Lender the purchase price for, a participationin such Loans and participations in LC Disbursements of such other Lender, sothat the aggregate unpaid principal amount of such Loans and participations inLC Disbursements held by each Lender shall be in the same proportion to theaggregate unpaid principal amount of all such Loans and participations in LC Disbursementsas prior to such exercise of banker’s lien, setoff or counterclaim or otherevent; provided, however, that if any such purchase or purchasesor adjustments shall be made pursuant to this Section 2.19 and the paymentgiving rise thereto shall thereafter be recovered, such purchase or purchasesor adjustments shall be rescinded to the extent of such recovery and thepurchase price or prices or adjustments restored without interest. The Borrowerexpressly consents to the foregoing arrangements and agrees that any Lenderholding a participation in a Loan or an LC Disbursement deemed to have been sopurchased may exercise any and all rights of banker’s lien, setoff or counterclaimwith respect to any and all moneys owing by the Borrower to such Lender byreason thereof as fully as if such Lender were a direct creditor directly tothe Borrower in the amount of such participation.

 

SECTION 2.20.              Assignmentof Commitments Under Certain Circumstances. In the event that (a) anyLender shall have delivered a notice or certificate pursuant toSection 2.14 or 2.15, or the Borrower shall be required to make additionalpayments to any Lender under Section 2.16 (each, an “Increased CostLender”) or (b) subject to the terms and conditions of Section9.08(e), in connection with any proposed amendment, modification, termination,waiver or consent with respect to any of the provisions hereof described in Section9.08(e), the consent of all Lenders required hereunder would have been obtainedbut for such Lender’s failure to consent (such Lender, a “Non-ConsentingLender”); then, with respect to each such Non-Consenting Lender andIncreased Cost Lender (the “Terminated Lender”), the Borrower shall havethe right, but not the obligation, at its own expense, upon notice to suchTerminated Lender and the Administrative Agent, to replace such TerminatedLender with an assignee (in accordance with and subject to the restrictionscontained in Section 9.04) approved by the Administrative Agent, the IssuingBank and the Swingline Lender (which approval shall not be unreasonablywithheld), and such Terminated Lender hereby agrees to transfer and assignwithout recourse (in accordance with and subject to the restrictions containedin Section 9.04) all its interests, rights and obligations under this Agreementto such assignee; provided, however, that no Terminated Lendershall be obligated to make any such assignment unless (i) such assignmentshall not conflict with any law or any rule, regulation or order of any GovernmentalAuthority and (ii) such assignee or the Borrower shall pay to the affectedTerminated Lender in immediately available funds on the date of such assignmentthe principal of and interest accrued to the date of payment on the Loans madeby such Terminated Lender and participations in LC Disbursements and SwinglineLoans held by such Terminated Lender and all commitment fees and other feesowed to such Terminated Lender hereunder and all other amounts accrued for suchTerminated Lender’s account or owed to it hereunder (including, withoutlimitation, any Commitment Fees). Each Lender agrees that, if it becomes aTerminated Lender, it shall execute and deliver to the Administrative Agent anAssignment and Acceptance to evidence such sale and purchase and shall deliverto the Administrative Agent any Note (if the assigning Lender’s Loans areevidenced by Notes) subject to such Assignment and Acceptance; *provided*, *however*, thatthe failure of any Terminated Lender to execute an Assignment and Acceptanceshall not render such sale and purchase (and the corresponding assignment)invalid and such assignment shall be recorded in the Register.

 

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# ARTICLE III

#  

# REPRESENTATIONSAND WARRANTIES

#  

In order to induce the Lenders and theAdministrative Agent to enter into this Agreement and to extend credit hereunderand under the other Loan Documents on the Effective Date, the Loan Parties,jointly and severally, make the representations and warranties set forth inthis Article III (after giving effect to the Transactions) and upon theoccurrence of each Credit Event thereafter:

 

SECTION 3.01.              Organization,etc. Each Loan Party (a) is a corporation or other form of legalentity, and each of its Subsidiaries is a corporation, partnership or otherform of legal entity, validly organized and existing and in good standing underthe laws of the jurisdiction of its incorporation or organization, as the casemay be, (b) has all requisite corporate or other power and authority tocarry on its business as now conducted, (c) is duly qualified to dobusiness and is in good standing as a foreign corporation or foreign partnership(or comparable foreign qualification, if applicable, in the case of any otherform of legal entity), as the case may be, in each jurisdiction where thenature of its business requires such qualification, except where the failure toso qualify will not have a Material Adverse Effect, and (d) has full powerand authority and holds all requisite material governmental licenses, permitsand other approvals to enter into and perform its obligations under thisAgreement and each other Loan Document to which it is a party and to own orhold under lease its Property and to conduct its business substantially ascurrently conducted by it.

 

SECTION 3.02.              DueAuthorization, Non-Contravention, etc. The execution, delivery andperformance by each Loan Party of this Agreement and each other Loan Documentto which it is a party, the borrowing of the Loans, the use of the proceedsthereof and the issuance of the Letters of Credit hereunder are within eachLoan Party’s corporate, partnership or comparable powers, as the case may be,have been duly authorized by all necessary corporate, partnership or comparableand, if required, stockholder action, as the case may be, and do not

 

(a)           contravene theOrganic Documents of any Loan Party or any of its respective Subsidiaries;

 

(b)           contravene anymaterial law, statute, rule or regulation binding on or affecting any Loan Partyor any of its respective Subsidiaries;

 

(c)           violate or result ina default or event of default or an acceleration of any rights or benefitsunder any material indenture, agreement or other instrument binding upon anyLoan Party or any of its respective Subsidiaries; or

 

(d)           result in, orrequire the creation or imposition of, any Lien on any assets of any Loan Partyor any of its respective Subsidiaries that would have or could reasonably beexpected to have a Material Adverse Effect, except Liens created under the LoanDocuments.

 

SECTION 3.03.              GovernmentApproval, Regulation, etc. No consent, authorization or approval or otheraction by, and no notice to or filing with, any Governmental Authority or regulatorybody or other Person is required for the due execution, delivery or performanceby the Borrower or any other Loan Party of this Agreement or any other LoanDocument, the borrowing of the Loans, the use of the proceeds thereof and theissuance of Letters of Credit hereunder except such as have been obtained ormade and are in full force and effect and except filings necessary to perfectLiens under the Security 

 

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Documents. No Loan Party or any of itsrespective Subsidiaries is an “investment company” within the meaning of theInvestment Company Act of 1940, as amended.

 

SECTION 3.04.              Validity,etc. This Agreement has been duly executed and delivered by the Borrowerand constitutes, and each other Loan Document to which any Loan Party is to bea party will, on the due execution and delivery thereof and assuming the dueexecution and delivery of this Agreement by each of the other parties hereto,constitute, the legal, valid and binding obligation of such Loan Partyenforceable in accordance with its respective terms, subject to the effect ofbankruptcy, insolvency, reorganization, moratorium or similar laws affectingthe enforceability of creditors’ rights generally and to general principles ofequity.

 

SECTION 3.05.              FinancialInformation. (a)  The consolidatedbalance sheets of the Borrower and its Subsidiaries as of January 1, 2005reported on by Ernst & Young LLP, independent public accountants, and therelated consolidated statements of income, stockholders’ equity and cash flowof the Borrower for the three years ended January 1, 2005, copies of whichhave been furnished to the Administrative Agent, have been prepared inaccordance with GAAP, and present fairly in all material respects theconsolidated financial condition of the Borrower and its Subsidiaries as of thedates thereof and the results of their operations and cash flows for theperiods then ended (including with respect to the fresh-start accountingadjustments made to the first three fiscal quarters of 2003).

 

### (b)           As of the Effective Date, except asdisclosed in the financial statements referred to above or the notes thereto oron Schedule 3.05, none of the Borrower or its Subsidiaries has any materialIndebtedness, contingent liabilities, long-term commitments or unrealizedlosses.

###  

SECTION 3.06.              NoMaterial Adverse Effect. Since January 1, 2005, no event or circumstancehas occurred that has had, or could reasonably be expected to have, a MaterialAdverse Effect.

 

SECTION 3.07.              Litigation.There is no pending or, to the knowledge of the Loan Parties, threatened,litigation, action or proceeding affecting the Borrower or any of itsSubsidiaries, or any of their respective operations, properties, businesses,assets or prospects, or the ability of the parties to consummate thetransactions contemplated hereby, which has a reasonable likelihood of adversedetermination and, if determined adversely, in the case of the Borrower and itsSubsidiaries, would reasonably be expected to have a Material Adverse Effect orwhich purports to affect the legality, validity or enforceability of thisAgreement or any other Loan Document or the transactions contemplated hereby orthereby.

 

SECTION 3.08.              Compliancewith Laws and Agreements. None of the Loan Parties has violated, is inviolation of or has been given written notice of any violation of any laws(other than Environmental Laws, which are the subject of Section 3.13),regulations and orders of any Governmental Authority applicable to it or itsproperty and all indentures, agreements and other instruments binding upon itor its property, except for any violations which do not have a Material AdverseEffect. No Default or Event of Default has occurred and is continuing.

 

SECTION 3.09.              Subsidiaries.Schedule 3.09 sets forth the name of, and the direct or indirectownership interest of the Borrower in, each Subsidiary of the Borrower andidentifies each Subsidiary that is a Loan Party, in each case as of the EffectiveDate.

 

SECTION 3.10.              Ownershipof Properties. (a)  Each of the Borrower and its Subsidiaries hasgood and marketable title to (or other similar title in jurisdictions outsidethe United States of America), or valid leasehold interests in, or easements orother limited property interests in, or is licensed 

 

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to use, allits material properties and assets (including all Mortgaged Properties), exceptfor minor defects in title that do not interfere with its ability to conductits business as currently conducted or to utilize such properties and assetsfor their intended purposes and except where the failure to have such title inthe aggregate could not reasonably be expected to have a Material AdverseEffect. All such material properties and assets are free and clear of Liens,other than Permitted Liens.

 

### (b)           Asof the Effective Date, Schedule 3.10(b) contains a true andcomplete list of each parcel of Real Property (i) owned by any Loan Partyas of the date hereof and describes the type of interest therein held by suchLoan Party and (ii) leased, subleased or otherwise occupied or utilized byany Loan Party, as lessee, as of the date hereof and describes the type ofinterest therein held by such Loan Party and whether such lease, sublease orother instrument requires the consent of the landlord thereunder or otherparties thereto to the Transactions.

###  

### (c)           Eachof the Borrower and its Subsidiaries has complied with all obligations underall leases to which it is a party, except where the failure to comply would nothave a Material Adverse Effect, and all such leases are in full force andeffect, except leases in respect of which the failure to be in full force andeffect could not reasonably be expected to have a Material Adverse Effect. Eachof the Borrower and its Subsidiaries enjoys peaceful and undisturbed possessionunder all such leases, other than leases in respect of which the failure toenjoy peaceful and undisturbed possession could not reasonably be expected to,individually or in the aggregate, have a Material Adverse Effect.

###  

### (d)           Eachof the Borrower and its Subsidiaries owns, possesses, is licensed or otherwisehas the right to use, or could obtain ownership or possession of, on terms notmaterially adverse to it, all patents, trademarks, service marks, trade names,copyrights, licenses and rights with respect thereto necessary for the presentconduct of its business, without any known conflict with the rights of others,except where such conflicts could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

###  

### (e)           Asof the Effective Date, no Loan Party or any of its respective Subsidiaries hasreceived any written notice of, or has any knowledge of, any pending orcontemplated condemnation proceeding affecting any of the Mortgaged Propertiesor any sale or disposition thereof in lieu of condemnation that remains unresolvedas of the Effective Date.

###  

### (f)            Neitherthe Borrower nor any of its Subsidiaries is obligated on the Effective Dateunder any right of first refusal, option or other contractual right to sell,assign or otherwise dispose of any Mortgaged Property or any interest therein.

###  

SECTION 3.11.              Taxes.Each of the Borrower and its Subsidiaries has timely filed all federal and allother material income tax returns and reports required by law to have beenfiled by it and has paid all material taxes and governmental charges due,except any such taxes or charges which are being diligently contested in goodfaith by appropriate proceedings and for which adequate reserves in accordancewith GAAP shall have been set aside on its books; provided that any suchcontest of taxes or charges with respect to Collateral shall satisfy theContested Collateral Lien Conditions.

 

SECTION 3.12.              Pensionand Welfare Plans. No ERISA Event has occurred or is reasonably expected tooccur which could reasonably be expected to have a Material Adverse Effect orgive rise to a Lien on the assets of the Borrower or any of its Subsidiaries. TheBorrower and its Subsidiaries and their ERISA Affiliates are in compliance inall respects with the presently applicable provisions of ERISA and the Codewith respect to each Plan except for failures to so comply which could notreasonably be expected to have a Material Adverse Effect. No condition existsor event or transaction has occurred 

 

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with respect to any Plan whichreasonably might result in the incurrence by the Borrower or any of itsSubsidiaries or any ERISA Affiliate of any liability, fine or penalty whichcould reasonably be expected to have a Material Adverse Effect. Neither theBorrower nor any of its Subsidiaries has any contingent liability with respectto post-retirement benefits provided by the Borrower or any of its Subsidiariesunder a Welfare Plan, other than (i) liability for continuation coveragedescribed in Part 6 of Subtitle B of Title I of ERISA and(ii) liabilities that, individually or in the aggregate, could notreasonably be expected to have a Material Adverse Effect.

 

Except as could not reasonably be expected tohave a Material Adverse Effect, (a) each Foreign Plan has been maintainedin compliance with its terms and with the requirements of any and allapplicable laws, statutes, rules, regulations and orders and has beenmaintained, where required, in good standing with applicable regulatoryauthorities, and (b) neither the Borrower nor any of its Subsidiaries hasincurred any obligation in connection with the termination of or withdrawalfrom any Foreign Plan.

 

SECTION 3.13.              Environmental.(a)  Except as set forth on Schedule 3.13(a),all facilities and property owned, leased or operated by the Borrower or any ofits Subsidiaries, and all operations conducted thereon, are in compliance withall Environmental Laws, except for such noncompliance that, individually or inthe aggregate, could not reasonably be expected to have a Material AdverseEffect.

 

### (b)           Exceptas set forth on Schedule 3.13(b), there are no pending orthreatened (in writing):

###  

(i)            EnvironmentalClaims received by the Borrower or any of its Subsidiaries, or

####  

(ii)           written claims, complaints, notices orinquiries received by the Borrower or any of its Subsidiaries regarding Environmental Liability,

####  

in each casewhich, individually or in the aggregate, could reasonably be expected to have aMaterial Adverse Effect.

 

### (c)           Exceptas set forth on Schedule 3.13(c), there have been no Releases ofHazardous Materials at, on, under or from any property or facility now or, toany Loan Party’s knowledge, previously owned, leased or operated by theBorrower or any of its Subsidiaries that, individually or in the aggregate,have had or could reasonably be expected to have a Material Adverse Effect.

###  

### (d)           TheBorrower and its Subsidiaries have been issued and are in compliance with allEnvironmental Permits necessary for their operations, facilities and businessesand each is in full force and effect, except for such Environmental Permitswhich, if not so obtained or as to which the Borrower and its Subsidiaries arenot in compliance, or are not in effect, individually or in the aggregate,could not reasonably be expected to have a Material Adverse Effect.

###  

### (e)           Noproperty now or, to any Loan Party’s knowledge previously, owned, leased oroperated by the Borrower or any of its Subsidiaries is listed or, to any LoanParty’s knowledge, proposed (with respect to owned property only) for listing (i)on the National Priorities List pursuant to CERCLA or (ii) on the CERCLISor on any similar list of sites requiring investigation or clean-up, which, inthe case of this clause (ii) only, singly or in the aggregate, could reasonablybe expected to have a Material Adverse Effect.

###  

### (f)            Thereare no underground storage tanks, active or abandoned, including petroleumstorage tanks, surface impoundments or disposal areas, on or under any propertynow or, to any 

###  

### 50

### 

###  

### Loan Party’s knowledge previously, owned orleased by the Borrower or any of its Subsidiaries which, singly or in theaggregate, could reasonably be expected to have a Material Adverse Effect.

###  

### (g)           Neitherthe Borrower nor any of its Subsidiaries has transported or arranged for thetransportation of any Hazardous Material to any location which is listed orproposed for listing on the National Priorities List pursuant to CERCLA, on theCERCLIS or on any similar list or which is the subject of federal, state orlocal enforcement actions or other investigations which would reasonably be expectedto lead to any Environmental Claim against the Borrower or such Subsidiarywhich (other than in the case of a listing or proposed listing on the NationalPriorities List pursuant to CERCLA), singly or in the aggregate, couldreasonably be expected to have a Material Adverse Effect.

###  

### (h)           Noliens have been recorded pursuant to any Environmental Law with respect to anyproperty or other assets currently owned or leased by the Borrower or itsSubsidiaries.

###  

### (i)            Neitherthe Borrower nor any of its Subsidiaries is currently conducting any RemedialAction pursuant to any Environmental Law, nor has any of the Loan Parties orany of their respective Subsidiaries assumed by contract, agreement oroperation of law any obligation under Environmental Law, the cost of which,singly or in the aggregate, could reasonably be expected to have a Material AdverseEffect.

###  

(j)            Thereare no polychlorinated biphenyls or friable asbestos present at any property orfacility owned, leased or operated by the Borrower or any of its Subsidiaries,which, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

###  

SECTION 3.14.              Regulations Uand X. The Loans, the use of the proceeds thereof, this Agreement and thetransactions contemplated hereby will not result in a violation of anyprovision of Regulation U or Regulation X.

 

SECTION 3.15.              Disclosure;Accuracy of Information; Pro Forma Balance Sheets and Projected Financial Statements.(a)  The Loan Parties have disclosed tothe Lenders all agreements, instruments and corporate or other restrictions towhich they or any of their Subsidiaries is subject, and all other matters knownto any of them that, individually or in the aggregate, could reasonably beexpected to have a Material Adverse Effect. Neither this Agreement nor anyother material document, certificate or statement furnished to the AdministrativeAgent or any Lender by or on behalf of any Loan Party in connection herewith(including, without limitation, the Information Memorandum and the ProjectedFinancial Statements) contains any untrue statement of a material fact or omitsto state any material fact necessary in order to make the statements containedherein and therein not misleading, in light of the circumstances under whichthey were made; provided that to the extent this or any such document,certificate or statement (including without limitation the Information Memorandumand the Projected Financial Statements) was based upon or constitutes aforecast or projection, the Loan Parties represent only that they acted in goodfaith and utilized assumptions believed by management to be reasonable at thetime made. The Administrative Agent and the Lenders recognize, however, thatforecasts and projections as to future events are not to be viewed asrepresentations with respect to future performance and that the actual resultsduring the period or periods covered by the forecasts or projections probablywill differ from the projected results and that the difference may be material.

 

### (b)           TheBorrower shall have furnished to the Lenders the pro forma consolidated balancesheet as of October 1, 2005, prepared giving effect to the Transactions as ifthe Transactions had occurred on such date. Such pro forma consolidated balancesheet (i) was prepared in good faith based on the same assumptions used toprepare the pro forma financial statements included in the Information 

###  

### 51

### 

###  

### Memorandum,(ii) accurately reflects in all material respects all adjustmentsnecessary to give effect to the Transactions and (iii) presents fairly inall material respects the pro forma financial position of the Borrower and itsconsolidated Subsidiaries as of October 1, 2005.

###  

### (c)           TheBorrower shall have furnished to the Lenders pro forma consolidated incomestatement projections for the Borrower and its Subsidiaries, pro formaconsolidated balance sheet projections for the Borrower and its Subsidiariesand pro forma consolidated cash flow projections for the Borrower and its Subsidiariesthrough the 2012 Fiscal Year, which shall be prepared on a quarterly basisthrough the 2006 Fiscal Year and annually thereafter (the “ProjectedFinancial Statements”), which give effect to the Transactions and allIndebtedness and Liens incurred or created in connection with the Transactions.

###  

SECTION 3.16.              Insurance.As of the Effective Date, set forth on Schedule 3.16 is a summaryof all insurance policies maintained by the Borrower and each of itsSubsidiaries with financially sound and responsible insurance companies(a) with respect to its properties material to the business of the Borrowerand its Subsidiaries against such casualties and contingencies and of suchtypes and in such amounts as are customary in the case of similar businessesoperating in the same or similar locations, and (b) required to be maintainedpursuant to the Security Documents.

 

SECTION 3.17.              LaborMatters. Except as could not reasonably be expected to have a MaterialAdverse Effect, (a) there are no strikes, lockouts or slowdowns againstthe Borrower or any Subsidiary pending or, to the knowledge of any Loan Party,threatened; (b) the hours worked by and payments made to employees of theBorrower and its Subsidiaries have not been in violation of the Fair LaborStandards Act or any other applicable Federal, state, local or foreign law dealingwith such matters; and (c) all payments due from the Borrower or anySubsidiary, or for which any claim may be made against the Borrower or anySubsidiary, on account of wages and employee health and welfare insurance andother benefits, have been paid or accrued as a liability on the books of theBorrower or such Subsidiary.

 

SECTION 3.18.              Solvency.Immediately following the making of each Loan and after giving effect to the applicationof the proceeds of such Loans, (a) the fair value of the assets of the Borrower,individually, and the Loan Parties, taken as a whole, at a fair valuation, willexceed its or their debts and liabilities, subordinated, contingent orotherwise; (b) the present fair saleable value of the property of theBorrower, individually, and the Loan Parties, taken as a whole, will be greaterthan the amount that will be required to pay the probable liability of its ortheir debts and other liabilities, subordinated, contingent or otherwise, assuch debts and other liabilities become absolute and matured; (c) theBorrower, individually, and the Loan Parties, taken as a whole, will be able topay its or their debts and liabilities, subordinated, contingent or otherwise,as such debts and liabilities become absolute and matured; and (d) eachLoan Party will not have unreasonably small capital with which to conduct thebusiness in which it is engaged as such business is now conducted and is proposedto be conducted.

 

SECTION 3.19.              Securities.The Equity Interests of each Subsidiary held, directly or indirectly, by the Borrowerare owned, directly or indirectly, by the Borrower free and clear of all Liensother than Liens permitted by Section 6.02 (i), (v) or (x). There are not, asof the Effective Date, any existing options, warrants, calls, subscriptions,convertible or exchangeable securities, rights, agreements, commitments orarrangements for any Person to acquire any common stock of the Borrower or itsSubsidiaries or any other securities convertible into, exchangeable for orevidencing the right to subscribe for any such common stock, except as setforth on Schedule 3.19.

 

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SECTION 3.20.              IndebtednessOutstanding. (a)  Set forth on Schedule 3.20(a)hereto is a list and description of all Indebtedness of the Loan Parties andtheir respective Subsidiaries that will be repaid, defeased, transferred orotherwise terminated on or immediately prior to the Effective Date (suchIndebtedness, “Indebtedness to Be Paid”).

 

### (b)           Setforth on Schedule 3.20(b) hereto is a list and description of allLiens of the Loan Parties and their respective Subsidiaries that will berepaid, defeased, transferred or otherwise terminated on or immediately priorto the Effective Date.

###  

SECTION 3.21.              SecurityDocuments. (a)  The Pledge Agreementis effective to create in favor of the Collateral Agent for its benefit and thebenefit of the Secured Parties, legal, valid and enforceable security interestsin the Collateral (as defined in the Pledge Agreement) and, when suchCollateral is delivered to the Collateral Agent, the Pledge Agreement shallconstitute fully perfected Liens on, and security interests in, all right,title and interest of the pledgor thereunder in such Collateral to the extentsuch Liens and security interests can be perfected by possession.

 

(b)           (i) TheSecurity Agreement and each Non-U.S. Pledge Agreement is effective to create infavor of the Collateral Agent, for its benefit and the benefit of the SecuredParties, legal, valid and enforceable security interests in the Collateral (asdefined in the Security Agreement) and (ii) when (x) financingstatements in appropriate form are filed in the offices specified on Schedule 7to the Perfection Certificate and (y) upon the taking of possession orcontrol by the Collateral Agent of any such Collateral in which a securityinterest may be perfected only by possession or control (which possession orcontrol shall be given to the Collateral Agent to the extent possession orcontrol by the Collateral Agent is required by the Security Agreement), theSecurity Agreement shall constitute fully perfected Liens on, and securityinterests in, all right, title and interest of the grantors thereunder in suchCollateral to the extent such Liens and security interests can be perfected bythe filing of a financing statement pursuant to the UCC or by possession orcontrol by the Collateral Agent, in each case prior and superior in right toany other Person, other than with respect to Permitted Liens.

###  

(c)           Whenthe filings in clause (b)(ii)(x) above are made and when the SecurityAgreement (or a summary thereof) is filed in the United States Patent andTrademark Office and the United States Copyright Office, the Security Agreementshall constitute fully perfected Liens on, and security interests in, all right,title and interest of the Loan Parties in the Intellectual Property (as definedin the Security Agreement) in which a security interest may be perfected byfiling, recording or registering a security agreement, financing statement oranalogous document in the United States Patent and Trademark Office or theUnited States Copyright Office, as applicable (it being understood thatsubsequent recordings in the United States Patent and Trademark Office and theUnited States Copyright Office may be necessary to perfect Liens on registeredtrademarks, trademark applications and copyrights acquired by the Loan Partiesafter the Effective Date), in each case prior and superior in right to anyother Person other than with respect to Permitted Liens.

###  

(d)           EachMortgage executed and delivered to the Collateral Agent to secure the Obligationsas of the Effective Date is, or, to the extent any Mortgage is duly executedand delivered thereafter by the relevant Loan Party, will be, effective tocreate, subject to the exceptions listed in each title insurance policycovering each such Mortgage, in favor of the Collateral Agent, for its benefitand the benefit of the Secured Parties, legal, valid and enforceable Liens onand security interests in all of the Loan Parties’ right, title and interest inand to the Mortgaged Properties thereunder and the proceeds thereof, and whensuch Mortgages are filed in the offices specified on Schedule 3.21(d),such Mortgages shall constitute Liens on, and security interests in, all right,title and interest of the Loan Parties in such Mortgaged Properties and theproceeds thereof, in each case prior and superior in right to any other Person,

 

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other than with respect to the rights of Personsunder the exceptions listed in each title insurance policy covering each suchMortgage.

###  

SECTION 3.22.              Anti-TerrorismLaws. (a)  None of the Loan Partiesor, to the knowledge of any of the Loan Parties, any of their Affiliates is inviolation of any laws relating to terrorism or money laundering (“Anti-TerrorismLaws”), including Executive Order No. 13224 on Terrorist Financing,effective September 24, 2001 (the “Executive Order”), and the Unitingand Strengthening America by Providing Appropriate Tools Required to Interceptand Obstruct Terrorism Act of 2001, Public Law 107-56.

 

(b)           NoLoan Party or, to the knowledge of any of the Loan Parties, any of their Affiliatesor their respective brokers or other agents acting or benefiting in anycapacity in connection with the Loans is any of the following:

###  

(i)            aPerson or entity that is listed in the annex to, or is otherwise subject to theprovisions of, the Executive Order;

####  

(ii)           aPerson or entity owned or controlled by, or acting for or on behalf of, anyPerson or entity that is listed in the annex to, or is otherwise subject to theprovisions of, the Executive Order;

####  

(iii)          aPerson or entity with which any Lender is prohibited from dealing or otherwiseengaging in any transaction by any Anti-Terrorism Law;

####  

(iv)          aPerson or entity that commits, threatens or conspires to commit or supports “terrorism”as defined in the Executive Order; or

####  

(v)           aPerson or entity that is named as a “specially designated national and blockedperson” on the most current list published by the U.S. Treasury DepartmentOffice of Foreign Assets Control at its official website or any replacement websiteor other replacement official publication of such list.

####  

(c)           NoLoan Party or, to the knowledge of any Loan Party, any of its brokers or otheragents acting in any capacity in connection with the Loans (i) conducts anybusiness or engages in making or receiving any contribution of funds, goods orservices to or for the benefit of any Person described in clause (b) above,(ii) deals in, or otherwise engages in any transaction relating to, anyproperty or interests in property blocked pursuant to the Executive Order, or(iii) engages in or conspires to engage in any transaction that evades oravoids, or has the purpose of evading or avoiding, or attempts to violate, anyof the prohibitions set forth in any Anti-Terrorism Law.

###  

# ARTICLE IVCONDITIONS

#  

SECTION 4.01.              EffectiveDate. The obligations of the Lenders to make Loans, and the obligation ofeach Issuing Bank to issue Letters of Credit, in each case, on the EffectiveDate are subject, at the time of the making of such Loans or the issuance ofsuch Letters of Credit, to satisfaction or waiver of the following conditionson or prior to the Effective Date:

 

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(a)           TheAdministrative Agent (or its counsel) shall have received from each partyhereto either (i) a counterpart of this Agreement signed on behalf of suchparty or (ii) written evidence satisfactory to the Administrative Agent (whichmay include telecopy transmission of a signed signature page of this Agreement)that such party has signed a counterpart of this Agreement.

 

(b)           TheAdministrative Agent shall have received (i) counterparts of the GuaranteeAgreement signed on behalf of each Domestic Subsidiary and(ii) counterparts of the Indemnity, Subrogation and Contribution Agreementsigned on behalf of each Loan Party.

 

(c)           TheAdministrative Agent shall have received from the Borrower a Closing Certificate,dated the Effective Date and signed on behalf of the Borrower by a FinancialOfficer of the Borrower.

 

(d)           The AdministrativeAgent shall have received such documents and certificates as the AdministrativeAgent or its counsel may reasonably request relating to the organization,existence and good standing of each Loan Party, the authorization of theTransactions and any other legal matters relating to the Loan Parties, the LoanDocuments or the Transactions, all in form and substance reasonablysatisfactory to the Administrative Agent and its counsel.

 

(e)           TheAdministrative Agent shall have received from Kirkland & Ellis LLP, counselto the Loan Parties, an opinion addressed to each Agent and the Lenders anddated the Effective Date substantially in form and substance reasonablysatisfactory to the Administrative Agent.

 

(f)            TheAdministrative Agent shall have received favorable written opinions of(i) local counsel in each of the jurisdictions (in each case unless, andto the extent otherwise agreed by the Administrative Agent) referred to in Schedule 4.01(f),in each case reasonably satisfactory to the Administrative Agent, whichopinions shall (x) be addressed to each Agent and the Lenders and be datedthe Effective Date, (y) cover various matters regarding the perfection andpriority of the security interests granted in respect of the Equity Interestsof Persons organized in such Non-U.S. Jurisdiction, and such other matersincident to the transactions contemplated herein as the Agents may reasonablyrequest and (z) be in form, scope and substance reasonably satisfactory tothe Agents, and (ii) local counsel to the Loan Parties as specified in Schedule 4.01(f)in the form of Exhibit K, which opinions (x) shall beaddressed to each Agent and each of the Lenders and be dated the EffectiveDate, (y) shall cover the enforceability of the respective Mortgage andperfection of the Liens and security interests granted pursuant to the relevantSecurity Documents and such other matters incident to the transactionscontemplated herein as the Agents may reasonably request and (z) shall bein form and substance reasonably satisfactory to the Agents.

 

(g)           Alldocuments executed or submitted in connection with this Agreement, the borrowingshereunder and the other Loan Documents shall be reasonably satisfactory to theLenders.

 

(h)           TheLenders shall have received the audited consolidated balance sheets and relatedstatements of income, stockholders’ equity and cash flows of the Borrower describedin Section 3.05, which audited financial statements (and the notesthereto) shall be in form and scope reasonably satisfactory to the Lenders.

 

(i)            Allcorporate and legal proceedings and all instruments and agreements in connectionwith the transactions contemplated by this Agreement and the other LoanDocuments to 

 

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occur on orprior to the Effective Date shall be in form and substance reasonablysatisfactory to the Administrative Agent, and the Administrative Agent shallhave received all information and copies of all documents and papers, includingrecords of corporate proceedings, governmental approvals, good standingcertificates and bring down telegrams or facsimiles, if any, which the AdministrativeAgent reasonably may have requested in connection therewith, such documents andpapers where appropriate to be certified by proper corporate or governmentalauthorities.

 

(j)            TheRequisite Lenders shall be satisfied that the representations and warrantiesset forth in Article III hereof and in the other Loan Documents that aremade as of the Effective Date shall be true and correct (or true and correct inall material respects if not otherwise qualified by materiality or by a MaterialAdverse Effect) with the same effect as if then made.

 

(k)           TheRequisite Lenders shall be satisfied that at the time of and immediately afterthe Borrowings and issuances of Letters of Credit, no Default or Event ofDefault shall have occurred and be continuing.

 

(l)            TheLenders shall have received a certificate of the chief financial officer of theBorrower in the form of Exhibit L and reasonably satisfactory tothe Administrative Agent, together with such other evidence reasonablyrequested by the Lenders, confirming the solvency of each of the Loan Partieson a consolidated basis after giving effect to the Transactions.

 

(m)          TheLenders shall have received (i) the pro forma consolidated balance sheet referredto in Section 3.15(b), together with the certificate of the chieffinancial officer of the Borrower certifying clauses (i)-(iii) thereof and theLenders shall be reasonably satisfied that such balance sheet is not materiallyinconsistent with the forecasts previously provided to the Lenders and(ii) the Projected Financial Statements.

 

(n)           TheAdministrative Agent shall have received reasonably satisfactory evidence thatall loans and letters of credit outstanding under, and all other amounts due inrespect of, the Indebtedness to Be Paid shall have been repaid in full (orsatisfactory arrangements made for such repayment and letters of credit) andthe commitments thereunder shall have been permanently terminated, and allrelated guarantees and security interests shall have been terminated (orprovisions reasonably satisfactory to the Administrative Agent shall have beenmade for their termination).

 

(o)           Aftergiving effect to the Transactions, none of the Borrower or its respectiveSubsidiaries shall have outstanding any Indebtedness other than (i) theLoans and other extensions of credit under this Agreement and (ii) Indebtednesspermitted under Section 6.01 (other than clauses (vi), (vii), (xiii), (xiv) and(xv) thereof).

 

(p)           Allrequisite material governmental authorities and third parties shall have approvedor consented to the Transactions to the extent required, all applicable appealperiods shall have expired and there shall be no judicial or regulatory actionby a governmental agency, actual or threatened, that could reasonably beexpected to restrain, prevent or impose materially burdensome conditions on theTransactions or the other transactions contemplated hereby.

 

(q)           TheLenders shall be reasonably satisfied that no litigation or administrative proceedingor development in any litigation or administrative proceeding by any entity(private or governmental) shall be pending or, to the knowledge of the Borrower,threatened that could reasonably 

 

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be expected tohave, a Material Adverse Effect or a material adverse effect on the ability ofthe parties to consummate the Transactions.

 

(r)            TheAdministrative Agent shall have received all fees payable to the AdministrativeAgent or any Lender on or prior to the Effective Date under the Engagement Letterand all other amounts due and payable pursuant to the Loan Documents on orprior to the Effective Date, including reimbursement or payment of allreasonable and invoiced out-of-pocket expenses (including reasonable fees,charges and disbursements of Cahill Gordon & Reindel LLPand domestic and foreign local counsel) required to be reimbursed or paid bythe Borrower hereunder or under any other Loan Document.

 

(s)           TheCollateral Agent shall have received counterparts of the Pledge Agreementsigned by each Loan Party and covering pledges of 100% of the Equity Interests heldby the Loan Parties in all of their Domestic Subsidiaries and 65% of the EquityInterests of their “first tier” Non-U.S. Subsidiaries (other than any EquityInterests of such Subsidiaries pledged pursuant to Non-U.S. Pledge Agreements)of the Borrower or any Domestic Subsidiary and counterparts of the Non-U.S.Pledge Agreements covering pledges of 65% of the Equity Interests of the “firsttier” Non-U.S. Subsidiaries of the Borrower, and the Collateral Agent shallhave received all promissory notes (the “Intercompany Notes”) evidencingall intercompany Indebtedness owed to any Loan Party by the Borrower or anySubsidiary as of the Effective Date and stock powers and instruments oftransfer, endorsed in blank, with respect to the Equity Interests of the Borrower’sDomestic Subsidiaries and any such promissory notes.

 

(t)            TheCollateral Agent shall have received counterparts of the Security Agreement andPledge Agreement signed by each Loan Party, in each case, together with thefollowing in form and substance reasonably satisfactory to the CollateralAgent:

 

(A)          certificatesrepresenting all Pledged Securities, together with executed and undated stockpowers and/or assignments in blank;

#####  

(B)           afavorable written opinion of foreign counsel in the jurisdiction of organizationof each “first-tier” Non-U.S. Subsidiary (except for PGI Nonwovens MauritiusLtd.) as shall be reasonably acceptable to the Collateral Agent,(a) addressed to the Collateral Agent and the Lenders and(b) covering such matters relating to the Security Documents and the LoanDocuments as the Collateral Agent shall reasonably request including, withoutlimitation, the perfection of the security interest created in the PledgedSecurities of such Non-U.S. Subsidiaries;

#####  

(C)           instrumentsrepresenting all intercompany Indebtedness payable to any Loan Party, togetherwith executed and undated instruments of assignment endorsed in blank;

#####  

(D)          certificatesof insurance required under this Agreement;

#####  

(E)           appropriatefinancing statements or comparable documents authorized by (and executed by, tothe extent applicable) the appropriate entities in proper form for filing underthe provisions of the UCC and applicable domestic or local laws, rules or regulationsin each of the offices where such filing is necessary or appropriate, in theCollateral Agent’s reasonable discretion, to grant to the Collateral Agentperfected Liens on 

 

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such Collateral,superior and prior to the rights of all third persons other than the holders ofPermitted Liens;

#####  

(F)           UCC,judgment and tax lien, bankruptcy and pending lawsuit search reports listingall effective financing statements or comparable documents which name anyapplicable Loan Party as debtor and which are filed in those jurisdictions inwhich, any Loan Party is organized and to the extent the Administrative Agentreasonably requests, any jurisdiction in which any of such Collateral islocated and the jurisdictions in which any applicable Loan Party’s principalplace of business is located in the United States, together with copies of suchexisting financing statements, none of which shall encumber such Collateralcovered or intended or purported to be covered by the Security Documents otherthan Permitted Liens;

#####  

(G)           evidenceof the preparation for recording or filing, as applicable, of all recordingsand filings of each such Security Document, including, without limitation, withthe United States Patent and Trademark Office and the United States CopyrightOffice, and delivery and recordation, if necessary, of such other security andother documents, including, without limitation, UCC-3 termination statementswith respect to UCC filings that do not constitute Permitted Liens, as may benecessary or, in the reasonable opinion of the Collateral Agent, desirable toperfect the Liens created, or purported or intended to be created, by suchSecurity Documents;

#####  

(H)          withrespect to leased Real Property which is not subject to a leasehold Mortgage asof the Effective Date, if any Pledged Collateral (as defined in the SecurityAgreement) of any Loan Party or its Subsidiaries is maintained on suchpremises, the Borrower shall use its commercially reasonable efforts to delivera Landlord Access Agreement with respect thereto;

#####  

(I)            evidencethat all other actions reasonably necessary or, in the opinion of theCollateral Agent, desirable to perfect the security interest created by the SecurityDocuments have been taken; and

#####  

(J)            acompleted Perfection Certificate dated the Effective Date and signed by anexecutive officer or Financial Officer of the Borrower, together with allattachments contemplated thereby, including the results of a search of the UCC(or equivalent) filings made with respect to the Loan Parties in thejurisdictions contemplated by the Perfection Certificate and copies of thefinancing statements (or similar documents) disclosed by such search andevidence reasonably satisfactory to the Administrative Agent that the Liensindicated by such financing statements (or similar documents) are PermittedLiens or have been released.

 

(u)           The Collateral Agentshall have received the following documents and instruments:

###  

(A)          withrespect to each Mortgaged Property indicated on Schedule 4.01(u)(A)hereto, a Mortgage encumbering each of the same in favor of the CollateralAgent, for its benefit and the benefit of the Secured Parties, duly executedand acknowledged by the applicable Loan Party, and otherwise in form forrecording in the recording office where each such Mortgaged Property issituated, together with such certificates, affidavits, questionnaires orreturns as shall be required in connection with the 

 

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recording orfiling thereof to create a first priority lien under applicable law, in favorof the Collateral Agent for the benefit of the Secured Parties, and such UCC-1financing statements and other similar statements as are contemplated by thecounsel opinions described in Section 4.01(f) in respect of suchMortgages, all of which shall be in form and substance reasonably satisfactoryto the applicable Collateral Agent, and any other instruments necessary togrant a mortgage lien under the laws of any applicable jurisdiction, whichMortgages and financing statements and other instruments shall when recorded beeffective to create Liens on such Mortgaged Property subject to no other Liensexcept the Prior Liens;

#####  

(B)           withrespect to each Mortgaged Property, such consents, approvals, amendments,supplements, estoppels, tenant subordination agreements or other instruments,in form acceptable to the Collateral Agent, as necessary or required to consummatethe transactions contemplated hereby or as shall reasonably be deemed necessaryby the Collateral Agent in order for the owner or holder of the fee orleasehold interest constituting such Mortgaged Property to grant the Lienscontemplated by the Mortgages with respect to such Mortgaged Property;

#####  

(C)           withrespect to each Mortgage granted in favor of the Collateral Agent, a policy oftitle insurance (or marked title commitment having the effect of a titleinsurance policy) insuring the Liens of such Mortgages, respectively, as validfirst mortgage Liens on the real property and fixtures described therein infavor of the Collateral Agent for the benefit of the Secured Parties in anamount equal to not less than in an amount not less than the amount set forthon Schedule 4.01(u)(C) (115% of the fair market value thereof),which policies (or marked commitments having the effect of title insurancepolicies) shall (w) be issued by the Title Company, (x) includesuch reinsurance arrangements (with provisions for direct access) as shall bereasonably acceptable to the Collateral Agent, (y) contain a “tie-in” or “cluster”endorsement (if available under applicable law) (i.e., policies whichinsure against losses regardless of location or allocated value of the insuredproperty up to a stated maximum coverage amount) and have beensupplemented by such endorsements (or where such endorsements are notavailable, opinions of special counsel, architects or other professionals reasonablyacceptable to the Collateral Agent to the extent that such opinions can beobtained at a cost which is reasonable with respect to the value of the realproperty subject to such Mortgage) as shall be reasonably requested by theCollateral Agent (including, without limitation, endorsements, to the extentavailable in each jurisdiction at commercially reasonably rates, on mattersrelating to usury, first loss, last dollar, zoning, contiguity, variable rate,revolving credit, doing business, access, survey, address, subdivision,separate tax lot, lender non-imputation and so-called comprehensive coverageover covenants and restrictions) and (z) contain only such exceptions totitle as shall be agreed to by the Collateral Agent on or prior to theEffective Date with respect to such Mortgaged Property;

#####  

(D)          withrespect to each Mortgaged Property, policies or certificates of insurance asrequired hereby or by the Mortgage relating thereto, which policies orcertificates shall comply with the insurance requirements contained herein orin such Mortgage;

#####  

(E)           withrespect to each Mortgaged Property, a Survey in form and substance acceptableto the Collateral Agent;

#####  

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##### 

#####  

(F)           withrespect to each Mortgaged Property, such affidavits, certificates, information(including financial data) and instruments of indemnification (including,without limitation, a so-called “gap” indemnification) as shall be required toinduce the Title Company to issue the policy or policies (or markedcommitment having the effect of a title insurance policy) and endorsementscontemplated in subparagraph (C) above;

#####  

(G)           evidenceacceptable to the Collateral Agent of payment by the appropriate Loan Party orSubsidiary thereof of all applicable title insurance premiums, search andexamination charges, survey costs and related charges, mortgage recordingtaxes, fees, charges, costs and expenses required for the recording of theMortgages and issuance of the title insurance policies referred to insubparagraph (C) above; and

#####  

(H)          withrespect to each Real Property or Mortgaged Property, copies of all leases orother agreements relating to possessory interests to which any Loan Party orSubsidiary thereof is a party. To the extent any of the foregoing in which anyLoan Party is a landlord or sublandlord affect any Mortgaged Property, suchagreement shall be subordinate to the Mortgage to be recorded against suchMortgaged Property and otherwise acceptable to the Collateral Agent.

#####  

(v)           TheAdministrative Agent shall have received subordination agreements in form andsubstance reasonably satisfactory to it covering all intercompany notes orother obligations owed by a Loan Party to a Subsidiary of the Borrower that isnot a Loan Party.

 

(w)          TheCollateral Agent shall have received evidence and be reasonably satisfied thatthe insurance required by Section 5.04 and the Security Documents is ineffect in form and substance satisfactory to the Collateral Agent.

 

SECTION 4.02.              Conditionsto Each Credit Event. The agreement of each Lender to make any Loan and ofthe Issuing Bank to issue, amend, renew or extend any Letter of Credit (suchevent being called a “Credit Event”) (excluding continuations and conversionsof Loans) requested to be made by it on any date is subject to the satisfactionof the following conditions:

 

(a)           TheAdministrative Agent shall have received a notice of such Credit Event asrequired by Section 2.02 or 2.05, as applicable.

 

(b)           Therepresentations and warranties set forth in Article III hereof and in theother Loan Documents shall be true and correct (or true and correct in allmaterial respects if not otherwise qualified by materiality or by a MaterialAdverse Effect) with the same effect as if then made (unless expressly statedto relate to an earlier date, in which case such representations and warrantiesshall be true and correct as of such earlier date).

 

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

 

Each CreditEvent shall be deemed to constitute a representation and warranty by theBorrower on the date of such Credit Event, as to the matters specified in paragraphs (b)and (c) of this Section 4.02.

 

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#  

# ARTICLE VAFFIRMATIVE COVENANTS

#  

Each Loan Party hereby covenants and agreeswith the Lenders that on or after the Effective Date and until the Commitmentshave expired or terminated and the principal of and interest on each Loan andall fees and other amounts due and payable hereunder or under any other LoanDocument have been paid in full and all Letters of Credit have expired orterminated and all LC Disbursements shall have been reimbursed:

 

SECTION 5.01.              FinancialInformation, Reports, Notices, etc. The Borrower will furnish, or willcause to be furnished, to each Lender and the Administrative Agent copies ofthe following financial statements, reports, notices and information:

 

(a)           assoon as available and in any event within 45 days (or, if SEC Form 12b-25 isfiled in respect of such Fiscal Quarter, 50 days or such shorter period for the filing of the Borrower’sForm 10-Q as may be required by the SEC) after the end of each of the firstthree Fiscal Quarters of each Fiscal Year of the Borrower, a consolidatedbalance sheet of the Borrower and its Subsidiaries as of the end of such FiscalQuarter and consolidated statements of earnings, stockholders’ equity and cashflow of the Borrower and its Subsidiaries for such Fiscal Quarter and for thesame period in the prior Fiscal Year and for the period commencing at the endof the previous Fiscal Year and ending with the end of such Fiscal Quarter,certified by a Financial Officer of the Borrower, it being understood andagreed that the delivery of the Borrower’s Form 10-Q (as filed with theSEC), if certified as required in this clause (a), shall satisfy therequirements set forth in this clause, together with a certificate from aFinancial Officer of the Borrower (a “Compliance Certificate”)containing a computation in reasonable detail of, and showing compliance with,each of the financial ratios and restrictions contained in the FinancialCovenants and to the effect that, in making the examination necessary for thesigning of such certificate, such Financial Officer has not become aware of anyDefault or Event of Default that has occurred and is continuing, or, if suchFinancial Officer has become aware of such Default or Event of Default,describing such Default or Event of Default and the steps, if any, being takento cure it;

 

(b)           assoon as available and in any event within 90 days (or, if SEC Form 12b-25 isfiled in respect of such Fiscal Year, 105 days or such shorter period as may be required for the filingof the Borrower’s Form 10-K by the SEC) after the end of each Fiscal Year of theBorrower, a copy of the annual audit report for such Fiscal Year for theBorrower, including therein a consolidated balance sheet of the Borrower andits Subsidiaries as of the end of such Fiscal Year and consolidated statementsof earnings, stockholders’ equity and cash flow of the Borrower and itsSubsidiaries for such Fiscal Year, in each case certified (without anyImpermissible Qualification) in a manner reasonably acceptable to theAdministrative Agent by Ernst & Young LLP or other independent publicaccountants reasonably acceptable to the Administrative Agent (it beingunderstood and agreed that the delivery of the Borrower’s Form 10-K (asfiled with the SEC), if certified as required in this clause (b), shallsatisfy such delivery requirement in this clause), together with a ComplianceCertificate and a certificate of the accounting firm that reported on suchfinancial statements stating whether they obtained knowledge during the courseof their examination of such financial statements of any Event of Default underany of the Financial Covenants (which certificate may be limited to the extentrequired by accounting rules or guidelines);

 

(c)           nolater than February 28 of each Fiscal Year of the Borrower, a detailed consolidatedbudget by Fiscal Quarter for such Fiscal Year (including a projectedconsolidated balance 

 

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sheet andrelated statements of projected operations and cash flow as of the end of andfor each Fiscal Quarter during such Fiscal Year) and the next two succeedingFiscal Years and, promptly when available, any significant revisions of suchbudgets;

 

(d)           promptlyupon receipt thereof, copies of all reports submitted to the Borrower byindependent certified public accountants in connection with each annual,interim or special audit of the books of the Borrower or any of its Subsidiariesmade by such accountants, including any management letters submitted by suchaccountants to management in connection with their annual audit;

 

(e)           assoon as possible and in any event within five Business Days after becomingaware of the occurrence of any Default or Event of Default, a statement of aFinancial Officer of the Borrower setting forth details of such Default orEvent of Default and the action which the Borrower has taken and proposes totake with respect thereto;

 

(f)            assoon as possible and in any event within five Business Days after (i) theoccurrence of any adverse development with respect to any litigation, action or proceeding that,individually or in the aggregate, could reasonably be expected to have aMaterial Adverse Effect or (ii) the commencement of any litigation, actionor proceeding that could reasonably be expected to have a Material AdverseEffect or that purports to affect the legality, validity or enforceability ofthis Agreement or any other Loan Document or the transactions contemplatedhereby or thereby, notice thereof and copies of all documentation relatingthereto;

 

(g)           promptlyafter the sending or filing thereof, copies of all reports which the Borrowersends to any of its security holders (in their capacity as such), and allreports, registration statements (other than on Form S-8 or any successorform) or other materials (including affidavits with respect to reports) which theBorrower or any of its Subsidiaries files with the SEC or any nationalsecurities exchange;

 

(h)           promptlyupon becoming aware of the taking of any specific actions by the Borrower orany other Person to terminate any Pension Plan (other than a terminationpursuant to Section 4041(b) of ERISA which can be completed without the Borroweror any Subsidiary having to provide more than $5.0 million in addition to thenormal contribution required for the plan year in which termination occurs tomake such Pension Plan sufficient), or the occurrence of an ERISA Event whichcould result in a Lien on the assets of any Loan Party or a Subsidiary or inthe incurrence by a Loan Party of any liability, fine or penalty which could reasonablybe expected to have a Material Adverse Effect, or any increase in thecontingent liability of a Loan Party with respect to any post-retirementWelfare Plan benefit if the increase in such contingent liability which couldreasonably be expected to have a Material Adverse Effect, notice thereof andcopies of all documentation relating thereto;

 

(i)            uponrequest by the Administrative Agent, copies of: (i) each Schedule B (Actuarial Information) to the annualreport (Form 5500 Series) filed by any Loan Party or ERISA Affiliate withthe Internal Revenue Service with respect to each Pension Plan; (ii) themost recent actuarial valuation report for each Pension Plan and each ForeignPlan for which a report is prepared; (iii) all notices received by anyLoan Party or ERISA Affiliate from a Multiemployer Plan sponsor or anygovernmental agency concerning an ERISA Event; and (iv) such otherdocuments or governmental reports or filings relating to any Plan or ForeignPlan as the Administrative Agent shall reasonably request;

 

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(j)            assoon as possible, notice of any other development that could reasonably be expectedto have a Material Adverse Effect; and

 

(k)           suchother information respecting the condition or operations, financial orotherwise, of the Borrower or any of its Subsidiaries as any Lender through theAdministrative Agent may from time to time reasonably request.

 

SECTION 5.02.              Compliancewith Laws, etc. The Loan Parties will, and will cause each of theirSubsidiaries to, comply in all respects with all applicable laws, rules,regulations and orders, except where such noncompliance, individually or in theaggregate, could not reasonably be expected to have a Material Adverse Effect,such compliance to include, subject to the foregoing:

 

(a)           themaintenance and preservation of their and their Subsidiaries’ existence andtheir qualification as a foreign corporation or partnership (or comparableforeign qualification, if applicable, in the case of any other form of legal entity),and

 

(b)           thepayment, before the same become delinquent, of all taxes, assessments andgovernmental charges imposed upon them or upon their property in excess of$250,000 other than any such tax, assessment or charge the payment of which isbeing contested in good faith and by proper proceeding and for which properreserves are being maintained in accordance with GAAP.

 

SECTION 5.03.              Maintenanceof Properties. Each Loan Party and each of its respective Subsidiaries willmaintain, preserve, protect and keep its material properties and assets in goodrepair, working order and condition (ordinary wear and tear and loss fromcasualty or condemnation excepted), and make necessary and proper repairs,renewals and replacements so that its business carried on in connectiontherewith may be properly conducted at all times; provided that nothingin this Section 5.03 shall prevent any Loan Party from discontinuing the operationand maintenance of any of its properties or any of those of its Subsidiaries ifsuch discontinuance is, in the reasonable commercial judgment of such LoanParty, desirable in the conduct of its or their business and does not in theaggregate have a Material Adverse Effect.

 

SECTION 5.04.              Insurance.The Loan Parties will and will cause each of their respective Subsidiaries tomaintain or cause to be maintained with financially sound and responsibleinsurance companies (a) insurance with respect to their propertiesmaterial to the business of the Loan Parties and their respective Subsidiariesagainst such casualties and contingencies and of such types and in such amountswith such deductibles as is customary in the case of similar businessesoperating in the same or similar locations (including, without limitation,(i) physical hazard insurance on an “all risk” basis, (ii) commercialgeneral liability against claims for bodily injury, death or property damagecovering any and all claims, (iii) explosion insurance in respect of anyboilers, machinery or similar apparatus constituting Collateral,(iv) business interruption insurance, (v) worker’s compensationinsurance as may be required by any Requirement of Law, (vi) floodinsurance, if at any time the area in which any improvements located on any MortgagedProperty is designated a “flood hazard area” in any Flood Insurance Rate Mappublished by the Federal Emergency Management Agency (or any successor agency)and otherwise comply with the National Flood Insurance Program as set forth inthe Flood Disaster Protection Act of 1973 (as amended from time to time) and(vii) such other insurance against risks as the Administrative Agent may fromtime to time reasonably require) and (b) all insurance required to bemaintained pursuant to the Security Documents, and will, upon request of theAdministrative Agent, furnish to each Lender at reasonable intervals acertificate of an Authorized Officer of the Borrower setting forth the natureand extent of all insurance maintained by the Loan Parties and their respectiveSubsidiaries in accordance with this Section. Each such insurance policy shallprovide that (i) it may not be cancelled or otherwise 

 

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terminatedwithout at least thirty (30) days’ prior written notice to the Collateral Agent(and to the extent any such policy is cancelled, modified or renewed, theBorrower shall deliver a copy of the renewal or replacement policy (or otherevidence thereof) to the Administrative Agent and the Collateral Agent, or insurancecertificate with respect thereto, together with evidence reasonablysatisfactory to the Administrative Agent and Collateral Agent of the payment ofthe premium therefor); (ii) the Collateral Agent and the AdministrativeAgent are permitted to pay any premium therefor within thirty (30) days afterreceipt of any notice stating that such premium has not been paid when due;(iii) all losses thereunder shall be payable notwithstanding any act ornegligence of any Loan Party or any of its Subsidiaries or its agents oremployees which otherwise might have resulted in a forfeiture of all or a partof such insurance payments; (iv) to the extent such insurance policy constitutesproperty insurance, all losses payable thereunder in an amount in excess of$1.0 million shall be payable to the Collateral Agent, as additional insuredand as loss payee, pursuant to a standard non-contributory New Yorkmortgagee endorsement and shall be in an amount at least sufficient to preventcoinsurance liability; provided that the CollateralAgent, as loss payee pursuant to the foregoing, shall not agree to theadjustment of any claim without the consent of the Borrower (such consent notto be unreasonably withheld or delayed); and (v) with respect to liabilityinsurance, the Collateral Agent shall be named as an additional insured. Notwithstandingthe inclusion in each insurance policy of the provision described inclause (ii) of the immediately preceding sentence, in the event any LoanParty gives the Collateral Agent written notice that it does not intend to payany premium relating to any insurance policy when due, the Collateral Agentshall not exercise its right to pay such premium so long as such Loan Party deliversto the Collateral Agent a replacement insurance policy or insurance certificateevidencing that such replacement policy or certificate provides the sameinsurance coverage required under this Section 5.04 as the policy being replacedby such Loan Party with no lapse in such coverage.

 

SECTION 5.05.              Booksand Records; Visitation Rights. Each Loan Party will, and will cause eachof its respective Subsidiaries to, keep books and records which accuratelyreflect its business affairs in all material respects and material transactionsand permit the Administrative Agent or its representatives, at reasonable timesand intervals and upon reasonable notice, to visit all of its offices, to discussits financial matters with its officers and independent public accountant and,upon the reasonable request of the Administrative Agent or a Lender, to examine(and, at the expense of the Borrower, photocopy extracts from) any of its booksor other corporate or partnership records.

 

SECTION 5.06.              EnvironmentalCovenant. Each Loan Party will, and will cause each of its respectiveSubsidiaries to:

 

(a)           useand operate all of its facilities and properties in compliance with allapplicable Environmental Laws except for such noncompliance which, singly or in the aggregate, would notreasonably be expected to have a Material Adverse Effect and handle allHazardous Materials in compliance with all applicable Environmental Laws,except for any noncompliance that would not reasonably be expected to have aMaterial Adverse Effect;

 

(b)           promptlynotify the Administrative Agent and provide copies of all written inquiries,claims, complaints or notices from any Person relating to the environmentalcondition of its facilities and properties or compliance with or liabilityunder any Environmental Law which could reasonably be expected to have aMaterial Adverse Effect, and promptly cure and have dismissed with prejudice orcontest in good faith any actions and proceedings relating thereto;

 

(c)           inthe event of the presence of any Hazardous Material on any Mortgaged Propertywhich is in violation of any Environmental Law or which could reasonably beexpected to result in Environmental Liability which violation or EnvironmentalLiability could reasonably be 

 

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expected tohave a material adverse effect on any Mortgaged Property, each applicable LoanParty and its Subsidiaries, upon discovery thereof, shall take all necessarysteps to initiate and expeditiously complete all response, corrective or otheraction to mitigate and eliminate any such adverse effect in accordance with andto the extent required by applicable Environmental Laws, and shall keep theAdministrative Agent informed of their actions;

 

(d)           atthe written request of the Administrative Agent or the Requisite Lenders, whichrequest shall specify in reasonable detail the basis therefor, each Loan Partywill provide, at such Loan Party’s sole cost and expense, an environmental siteassessment report concerning any Mortgaged Property now or hereafter owned orleased by such Loan Party or any of its respective Subsidiaries, prepared by anenvironmental consulting firm reasonably acceptable to the AdministrativeAgent, indicating the presence or absence of Hazardous Materials and the potentialcost of any Remedial Action in connection with such Hazardous Materials on, at,under or emanating from such Mortgaged Property pursuant to any applicable EnvironmentalLaw; provided that such request may be made only if (i) there hasoccurred and is continuing an Event of Default or (ii) the AdministrativeAgent or the Requisite Lenders reasonably believe that the Borrower or any suchMortgaged Property is not in compliance with Environmental Law and suchnoncompliance could reasonably be expected to have a Material Adverse Effect,or that circumstances exist that could reasonably be expected to form the basisof an Environmental Claim against such Loan Party or to result in EnvironmentalLiability, in each case that could reasonably be expected to have a MaterialAdverse Effect (in such events as are listed in this subparagraph, theenvironmental site assessment shall be focused upon the noncompliance or othercircumstances as applicable). If any Loan Party fails to provide the samewithin 90 days after such request was made and the circumstances describedin clause (i) or (ii) still exist, the Administrative Agent may order the same,and such Loan Party shall grant and hereby grants to the Administrative Agentand the Requisite Lenders and their agents access to such Mortgaged Propertyand specifically grants the Administrative Agent and the Requisite Lenders anirrevocable non-exclusive license, subject to the rights of tenants, to performsuch an assessment, all at such Loan Party’s sole cost and expense; and

 

(e)           providesuch information and certifications which the Administrative Agent mayreasonably request from time to time to evidence compliance with thisSection 5.06.

 

SECTION 5.07.              InformationRegarding Collateral. (a)  Each LoanParty will furnish to the Administrative Agent and the Collateral Agent promptwritten notice of any change (i) in such Loan Party’s corporate name or inany trade name used to identify it in the conduct of its business or in theownership of its properties, (ii) in the location of any Loan Party’schief executive office, its principal place of business, any office in which itmaintains books or records relating to Collateral owned by it or any office orfacility at which Collateral owned by it is located (including theestablishment of any such new office or facility), (iii) in any Loan Party’sidentity or corporate structure, (iv) in any Loan Party’s Federal TaxpayerIdentification Number or organizational identification number or (v) inany Loan Party’s jurisdiction of organization. Each Loan Party agrees not toeffect or permit any change referred to in the preceding sentence unless(i) it shall have given the Administrative Agent and the Collateral Agentthirty (30) days’ prior written notice and (ii) all filings have been madeunder the UCC or otherwise that are required in order for the Collateral Agentto continue at all times following such change to have a valid, legal andperfected security interest in all the Collateral. Each Loan Party also agreespromptly to notify the Administrative Agent if any material portion of theCollateral is damaged or destroyed.

 

(b)           Eachyear, at the time of delivery of annual financial statements with respect tothe preceding Fiscal Year pursuant to clause (b) of Section 5.01, theBorrower shall deliver to the Administrative 

 

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Agent acertificate of a Financial Officer and the chief legal officer of the Borrower (i) settingforth the information required pursuant to Sections 1, 2, 7, 8, 11, 12,13, 14, 15, 16, 17 and 18 of the Perfection Certificate or confirming thatthere has been no change in such information since the date of the PerfectionCertificate delivered on the Effective Date or the date of the most recentcertificate delivered pursuant to this Section and (ii) certifyingthat all UCC financing statements (including fixture filings, as applicable) orother appropriate filings, recordings or registrations, including allrefilings, rerecordings and reregistrations, containing a description of theCollateral have been filed of record in each governmental, municipal or otherappropriate office in each jurisdiction identified pursuant to clause (i)above to the extent necessary to protect and perfect the security interests underthe Security Documents for a period of not less than 18 months after the dateof such certificate (except as noted therein with respect to any continuationstatements to be filed within such period).

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SECTION 5.08.              Existence;Conduct of Business. Each Loan Party will, and will cause each of itsrespective Subsidiaries to, do or cause to be done all things reasonablynecessary to preserve, renew and keep in full force and effect its legalexistence and the rights, licenses, permits, privileges, franchises, patents,copyrights, trademarks and trade names material to the conduct of its business;provided that the foregoing shall not prohibit any merger,consolidation, liquidation or dissolution permitted under Section 6.03.

 

SECTION 5.09.              Performanceof Obligations. Each Loan Party and its respective Subsidiaries willperform all of their respective obligations under the terms of each mortgage,indenture, security agreement, other debt instrument and material contract bywhich they are bound or to which they are a party except for such noncomplianceas in the aggregate would not have a Material Adverse Effect.

 

SECTION 5.10.              Casualtyand Condemnation. Each Loan Party (a) will furnish to theAdministrative Agent and the Lenders prompt written notice of any casualty orother insured damage to any Collateral in an amount in excess of$2.5 million or the commencement of any action or proceeding for theTaking of any Collateral or any part thereof or interest therein under power ofeminent domain or by condemnation or similar proceeding and (b) willensure that the Net Proceeds of any such event (whether in the form ofinsurance proceeds, condemnation awards or otherwise) are collected and appliedin accordance with the applicable provisions of this Agreement and the SecurityDocuments.

 

SECTION 5.11.              Pledgeof Additional Collateral. Within 30 days after the acquisition ofassets of the type that would have on the Effective Date constituted Collateralunder the Security Documents (the “Additional Collateral”), each appropriateLoan Party will, and will cause its respective Subsidiaries to, take allnecessary action, including the filing of appropriate financing statementsunder the provisions of the UCC, applicable domestic or local laws, rules orregulations in each of the offices where such filing is necessary or appropriate,or entering into or amending the Guarantee Agreement and the SecurityDocuments, or in the case of the Equity Interests of a “first tier” Non-U.S.Subsidiary, entering into a Non-U.S. Pledge Agreement providing for theCollateral Agent to have an enforceable and perfected security interest in 65%of the Equity Interests in such Subsidiary, to grant to each Collateral Agentfor its benefit and the benefit of the respective Secured Parties perfectedLiens in such Collateral pursuant to and to the full extent required by theSecurity Documents and this Agreement (including, without limitation, deliveryof an opinion substantially in the form of Exhibit K and otherwisereasonably acceptable in form and substance to the Collateral Agent andsatisfaction of the conditions set forth in subsections (v) and (w) of Section 4.01).In the event that any Loan Party acquires or leases additional Real Property orrenews any lease of Real Property (whether or not the subject of a leaseholdMortgage under the Security Documents) and (x) the fair market value of such acquiredReal Property is in excess of $1.0 million as determined in good faith by theBorrower or (y) the average annual rent payments under any such lease isgreater than $400,000, the Borrower or the appropriate Loan Party, as the casemay be, using its commercially 

 

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reasonableefforts in respect of any such leases, will take such actions and execute suchdocuments as the Collateral Agent shall require to confirm the Liens of aMortgage, if applicable, or to create a new Mortgage (including, withoutlimitation, satisfaction of the conditions set forth in subsections (f),(v) and (w) of Section 4.01) (unless, with respect to any such RealProperty, (x) such Real Property is already mortgaged to a third party to theextent permitted by Section 6.02 or (y) the Administrative Agent determines, inits reasonable discretion, that the fees and expenses of obtaining a Mortgagewith respect to such Real Property and the other related deliveries required bythis Section 5.11 would be disproportionate to the expected benefits to bereceived by the Secured Parties). All actions taken by the parties inconnection with the pledge of Additional Collateral, including, withoutlimitation, reasonable costs of counsel for the Administrative Agent and the CollateralAgent, shall be for the account of the Borrower, which shall pay all sums dueon demand.

 

SECTION 5.12.              FurtherAssurances. The Loan Parties will, and will cause each Subsidiary of a LoanParty to, execute any and all further documents, financing statements,agreements and instruments, and take all such further actions (including thefiling and recording of financing statements, fixture filings, mortgages, deedsof trust and other documents and the delivery of appropriate opinions ofcounsel), which may be required under any applicable law, or which the AdministrativeAgent or the Requisite Lenders may reasonably request, to effectuate thetransactions contemplated by the Loan Documents or to grant, preserve, protector perfect the Liens created by the Security Documents or the validity orpriority of any such Lien, all at the expense of the Loan Parties. The Loan Partiesalso agree to provide to the Collateral Agent, from time to time uponreasonable request, evidence reasonably satisfactory to the Collateral Agent asto the perfection and priority of the Liens created or intended to be createdby the Security Documents.

 

SECTION 5.13.              Useof Proceeds. The Borrower covenants and agrees that (i) the proceedsof the Term Borrowings and Revolving Credit Borrowings on the Effective Date willbe used to finance the Transactions and to pay fees and expenses payable hereunderand (ii) all other Revolving Credit Borrowings after the Effective Date willbe used for general corporate purposes, including Permitted Acquisitions.

 

SECTION 5.14.              Paymentof Taxes. Each Loan Party and its respective Subsidiaries will pay anddischarge all material taxes, assessments and governmental charges or leviesimposed upon it or upon its income or profits, or upon any Properties belongingto it, prior to the date on which material penalties attach thereto, and alllawful claims which, if unpaid, might become a Lien or charge upon anyProperties of such Loan Party or any of its respective Subsidiaries or cause afailure or forfeiture of title thereto; provided that neither such LoanParty nor any of its respective Subsidiaries shall be required to pay any suchtax, assessment, charge, levy or claim that is being contested in good faithand by proper proceedings diligently conducted, which proceedings have theeffect of preventing the forfeiture or sale of the Property or asset that maybecome subject to such Lien, if it has maintained adequate reserves withrespect thereto in accordance with and to the extent required under GAAP; provided,further, that any such contest of any tax, assessment, charge, levy orclaim with respect to Collateral shall satisfy the Contested Collateral LienConditions.

 

SECTION 5.15.              EqualSecurity for Loans and Notes. If any Loan Party shall create or assume anyLien upon any of its Property which does not constitute Collateral, whether nowowned or hereafter acquired, other than Permitted Liens (unless prior writtenconsent to the creation or assumption thereof shall have been obtained from theAdministrative Agent and the Requisite Lenders), it shall make or cause to bemade effective provisions whereby the Obligations will be secured by such Lienequally and ratably by such Property with any and all other obligations therebysecured as long as any such obligations shall be secured; provided thatthis covenant shall not be construed as consent by the Administrative 

 

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Agent and theRequisite Lenders to any violation by any Loan Party of the provisions of Section 6.02.

 

SECTION 5.16.              Guarantees.In the event that any Domestic Subsidiary of the Borrower existing on the EffectiveDate has not previously executed the Guarantee Agreement or in the event thatany Person becomes a Domestic Subsidiary of the Borrower after the EffectiveDate (including as a result of the Permitted Reorganization), the Borrower willpromptly notify the Administrative Agent of that fact and cause such Subsidiaryto, within 30 days of becoming a Domestic Subsidiary, execute and deliver tothe Administrative Agent a counterpart of the Guarantee Agreement and deliverto the Collateral Agent a counterpart of the Security Agreement and the PledgeAgreement and to take all such further actions and execute all such furtherdocuments and instruments (including actions, documents and certificatescomparable to those described in Sections 4.01(t) and (u)) as may benecessary or, in the reasonable opinion of the Administrative Agent, desirableto create in favor of the Collateral Agent, for its benefit and of the other SecuredParties, valid and perfected Liens on all of the Property of such Subsidiarydescribed in the applicable forms of the Security Documents, subject to Lienspermitted by the applicable Loan Documents.

 

SECTION 5.17.              Subordinationof Intercompany Loans. Each Loan Party covenants and agrees that any existingand future debt obligation of the Borrower or any Subsidiary Loan Party to anyNon-U.S. Subsidiary shall be subordinated to the Loans to at least the sameextent as such existing obligations were subordinated to the obligations underthe Existing Credit Agreement.

 

SECTION 5.18.              InterestRate Protection. No later than the 30th day after the Effective Date,Borrower shall enter into (or otherwise be a party to), and for a minimum of 18months thereafter maintain, Hedging Agreements with terms and conditionsreasonably acceptable to the Administrative Agent that result in at least 50%of the aggregate principal amount of the Borrower’s and its Subsidiaries’Indebtedness being effectively subject to a fixed or maximum interest ratereasonably acceptable to the Administrative Agent.

 

SECTION 5.19.              Post-ClosingMatters

 

(a)           Theapplicable Loan Parties shall use their commercially reasonable efforts toobtain and deliver to the Collateral Agent (unless waived or extended by theCollateral Agent in its sole discretion), within the time periods set forthbelow, to the extent such items have not provided as of the Closing Date, thefollowing:

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(i)            withinsixty (60) days after the Closing Date, Landlord Access Agreements or BaileeLetters, as applicable for the Real Properties listed on Schedule 5.19(b),each in form and substance reasonably acceptable to the Collateral Agent; and

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(ii)           withinten (10) days after the Closing Date, with respect to each Mortgaged Property,title policies meeting the requirements of Section 4.01(u).

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(b)           Theapplicable Loan Parties shall provide to the Collateral Agent (unless waived orextended by the Collateral Agent in its sole discretion), within seven (7)Business Days of the Closing Date, evidence of the release of the lien underthe Existing Credit Agreement on the Bonlam S.A. de C.V. stock (including thenotation on the stock thereof), entry into the new Mexican pledge agreement andthe related Mexican legal opinion with respect to the pledge of such BonlamS.A. de C.V. stock.

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(c)           Theapplicable Loan Parties shall use commercially reasonable efforts to providethe Collateral Agent (unless waived or extended by the Collateral Agent in itssole discretion), within 30 days of the Closing Date, evidence of terminationof lien or assignments recorded against any Loan Party in the U.S. CopyrightOffice.

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(d)           Theapplicable Loan Parties shall provide the Collateral Agent (unless waived orextended by the Collateral Agent in its sole discretion), within two (2)Business Days of the Closing Date, originals copies of the stock certificatesissued by Fabrene, Inc. (and accompanying stock powers) pledged pursuant to theterms of the Pledge Agreement.

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(e)           Theapplicable Loan Parties shall provide the Collateral Agent (unless waived orextended by the Collateral Agent in its sole discretion) within ten(10)Business Days of the Closing Date a good standing certificate for Poly-BondInc. in the State of Virginia and an issuers’ acknowledgement for ChicopeeHoldings B.V.

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(f)            Theapplicable Loan Parties shall provide to the Collateral Agent (unless waived orextended by the Collateral Agent in its sole discretion) within 5 days of theClosing Date final updated intellectual property schedules to the Perfection Certificate.

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(g)           Theapplicable Loan Parties shall provide the Collateral Agent (unless waived orextended by the Collateral Agent in its sole discretion) within 30 days of theClosing Date insurance certificates with respect to assets located in China andEurope.

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(h)           Theapplicable Loan Parties shall provide the Collateral Agent (unless waived orextended by the Collateral Agent in its sole discretion) within 10 days of theClosing Date (i) an updated intercompany note schedule to the Pledge Agreementand Perfection Certificate and (ii) all intercompany notes (along withendorsements in blank) required to be delivered, but not previously delivered.

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(i)            Theapplicable Loan Parties shall provide the Collateral Agent (unless waived orextended by the Collateral Agent in its sole discretion) within 2 days of theClosing Date, an executed copy of the Dutch pledge Agreement relating toChicopee Holding, B.V. and the related foreign counsel opinion.

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# ARTICLE VINEGATIVE COVENANTS

#  

Until the Commitments haveexpired or terminated and the principal of and interest on each Loan and allFees and other amounts payable hereunder or under any other Loan Document havebeen paid in full and all Letters of Credit have expired or terminated and allLC Disbursements shall have been reimbursed, each of the Loan Parties and theirrespective Subsidiaries agree with the Lenders that:

 

SECTION 6.01.              Indebtedness;Certain Equity Securities. (a)  TheLoan Parties will not, and will not permit any of their Subsidiaries to,directly or indirectly, create, incur, assume or permit to exist (including byway of Guarantee) any Indebtedness, except:

 

(i)            Indebtednessincurred and outstanding under the Loan Documents;

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(ii)           Indebtedness(A) outstanding on the Effective Date and set forth on Schedule 6.01 and(B) any Permitted Refinancing thereof;

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(iii)          Indebtednessof the Borrower to any Subsidiary Loan Party and of any Subsidiary to theBorrower or any other Subsidiary;

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(iv)          Guaranteesby (x) the Borrower of Indebtedness of any Subsidiary Loan Party, (y) any SubsidiaryLoan Party of Indebtedness of the Borrower or any other Subsidiary Loan Partyand (z) any Subsidiary that is not a Loan Party of Indebtedness of any otherSubsidiary that is not a Loan Party, in each case (x), (y) or (z), to theextent such Indebtedness was permitted to be incurred hereunder, and if suchIndebtedness is subordinated to the Obligations under the Loan Documents, suchGuarantee is as subordinated in right of payment to the Obligations;

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(v)           Indebtednessarising from the honoring by a bank or other financial institution of a check,draft or similar instrument drawn against insufficient funds in the ordinarycourse of business; provided that such Indebtedness is extinguishedwithin two Business Days of its incurrence;

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(vi)          Guaranteesby the Borrower or any Subsidiary Loan Party of trade payables of Subsidiariesthat are not Loan Parties; provided that (a) any such Guarantee issubordinated to the Obligations under the Loan Documents and (b) the aggregateamount of trade payables guaranteed by such Guarantees shall not exceed $10.0million at any one time outstanding;

####  

(vii)         Indebtednessof the Borrower or any Subsidiary incurred to finance the acquisition,construction or improvement of any fixed or capital assets, including CapitalLease Obligations and any Indebtedness assumed in connection with theacquisition of any such assets or secured by a Lien on any such assets prior tothe acquisition thereof, and extensions, renewals and replacements of any suchIndebtedness that do not increase the outstanding principal amount thereof orresult in an earlier maturity date or decreased Weighted Average Life toMaturity thereof; provided that (A) such Indebtedness is incurredprior to or within 90 days after such acquisition or the completion of such constructionor improvement and (B) the aggregate principal amount of Indebtednesspermitted by this clause (vii) shall not exceed $30.0 million at any timeoutstanding;

####  

(viii)        HedgingAgreements entered into in the ordinary course of business and not forspeculative purposes;

####  

(ix)           Indebtednessowed to (including obligations in respect of letters of credit for the benefitof) any Person providing worker’s compensation, health, disability or otheremployee benefits or property, casualty or liability insurance to Borrower orany Subsidiary, pursuant to reimbursement or indemnification obligations tosuch Person;

####  

(x)            Indebtednessof the Borrower and its Subsidiaries in respect of performance bonds, bid bonds,appeal bonds, surety bonds and similar obligations and trade-related letters ofcredit, in each case provided in the ordinary course of business, includingthose incurred to secure health, safety and environmental obligations in theordinary course of business;

####  

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#### 

####  

(xi)           Indebtednessarising from agreements of the Borrower or any Subsidiary of the Borrower providingfor indemnification, adjustment of purchase price or similar obligations, ineach case, incurred or assumed in connection with the disposition of anybusiness, assets or a Subsidiary, other than Guarantees of Indebtednessincurred by any Person acquiring all or any portion of such business, assets ora Subsidiary for the purpose of financing such acquisition;

####  

(xii)          obligationsin respect of performance and surety bonds and completion guarantees providedby the Borrower or any Subsidiary in the ordinary course of business;

####  

(xiii)         Indebtednessof a Person existing at the time such Person becomes a Subsidiary of the Borrowerin connection with a Permitted Acquisition, but only if such Indebtedness wasnot created or incurred in contemplation of such Person becoming a Subsidiaryand so long as the aggregate principal amount thereof does not exceed $5.0million at any time outstanding; provided that (x) no Default orEvent of Default shall have occurred or be continuing or would result therefromand (y) after giving effect to the incurrence of such Indebtedness (andany other Indebtedness incurred since the last day of the immediately precedingTest Period) on a Pro Forma Basis as if it was incurred on the first day of theimmediately preceding Test Period (but tested as if the applicable ratio werethe ratio for the next succeeding Test Period), the Borrower would be in compliancewith the Financial Covenants;

####  

(xiv)        otherIndebtedness of the Borrower or any Subsidiary in an aggregate principal amountnot exceeding $20.0 million at any time outstanding; and

####  

(xv)         Indebtednessof Non-U.S. Subsidiaries in an aggregate principal amount not exceeding $20.0 millionat any time outstanding.

####  

(b)           TheLoan Parties will not, nor will they permit any of their Subsidiaries to, directlyor indirectly, issue any Preferred Stock or other preferred Equity Interest (“DisqualifiedEquity Interests”) which (i) matures or is mandatorily redeemable pursuantto a sinking fund obligation or otherwise, (ii) is or may become redeemable orrepurchaseable at the option of the holder thereof, in whole or in part, or(iii) is convertible or exchangeable at the option of the holder thereof forIndebtedness or Preferred Stock or any other preferred Equity Interestdescribed in this paragraph, in each case, prior to six months following theTerm Loan Maturity Date.

###  

SECTION 6.02.              Liens.The Loan Parties will not, and will not permit any of their Subsidiaries to,directly or indirectly, create, incur, assume or permit to exist any Lien onany Property or asset now owned or hereafter acquired by them, or assign orsell any income or revenues (including accounts receivable) or rights inrespect of any thereof, except the following (herein collectively referred toas “Permitted Liens”):

 

(i)            Liensin favor of the Collateral Agent under the Security Documents;

####  

(ii)           Lienson assets acquired after the Effective Date existing at the time of acquisitionthereof by the Borrower or any Subsidiary; provided that such Liens werenot incurred in connection with, or in contemplation of, such acquisition anddo not extend to any assets of the Borrower or any Subsidiary other than thespecific assets so acquired;

####  

(iii)          Liensto secure the performance of statutory obligations, surety or appeal bonds orperformance bonds, landlords’, carriers’, warehousemen’s, mechanics’, suppliers’,

 

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materialmen’s,attorney’s or other like liens, in any case incurred in the ordinary course ofbusiness and with respect to amounts not yet delinquent or being contested ingood faith by appropriate proceedings promptly instituted and diligentlyconducted; provided that (A) a reserve or other appropriateprovision, if any, as is required by GAAP shall have been made therefor,(B) if such Lien is on Collateral, the Contested Collateral LienConditions shall at all times be satisfied and (C) such Liens relating tostatutory obligations, surety or appeal bonds or performance bonds shall onlyextend to or cover cash and Cash Equivalents not in the Collateral Account;

####  

(iv)          Liensexisting on the Effective Date and identified on Schedule 6.02 tothe extent permitted by the applicable Security Documents;

####  

(v)           Liensfor taxes, assessments or governmental charges or claims or other likestatutory Liens, in any case incurred in the ordinary course of business, thatdo not secure Indebtedness for borrowed money and (A) that are not yetdelinquent or (B) that are being contested in good faith by appropriateproceedings promptly instituted and diligently concluded; provided that(1) any reserve or other appropriate provision as shall be required inconformity with GAAP shall have been made therefor and (2) if such Lien ison Collateral, the Contested Collateral Lien Conditions shall at all times besatisfied;

####  

(vi)          Liensto secure Indebtedness (including Capital Lease Obligations) of the type describedin Section 6.01(a)(vii) covering only the assets acquired or improved withsuch Indebtedness;

####  

(vii)         Lienssecuring Indebtedness incurred to refinance Indebtedness secured by the Liensof the type described in clause (ii) of this Section 6.02; providedthat any such Lien shall not extend to or cover any assets not securing theIndebtedness so refinanced;

####  

(viii)        (A) Liensin the form of zoning restrictions, easements, licenses, reservations,covenants, conditions or other restrictions on the use of real property orother minor irregularities in title (including leasehold title) that do not(1) secure Indebtedness or (2) individually or in the aggregatematerially impair the value or marketability of the real property affectedthereby or the occupation, use and enjoyment in the ordinary course of businessof the Borrower and any Subsidiary at such real property and (B) withrespect to leasehold interests in real property, mortgages, obligations, liensand other encumbrances incurred, created, assumed or permitted to exist andarising by, through or under a landlord or owner of such leased propertyencumbering the landlord’s or owner’s interest in such leased property;

####  

(ix)           Liensin the form of pledges or deposits securing bids, tenders, contracts (otherthan contracts for borrowed money) or leases to which the Borrower or anySubsidiary is a party, in each case, made in the ordinary course of businessfor amounts (A) not yet due and payable or (B) being contested ingood faith by appropriate proceedings promptly instituted and diligentlyconducted; provided that (1) a reserve or other appropriateprovision, if any, as is required by GAAP shall have been made therefor,(2) if such Lien is on Collateral, the Contested Collateral Lien Conditionsshall at all times be satisfied and (3) such Liens shall in no eventencumber any Collateral other than cash and Cash Equivalents not in theCollateral Account;

####  

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#### 

####  

(x)            Liensresulting from operation of law with respect to any judgments, awards or ordersto the extent that such judgments, awards or orders do not cause or constitutea Default under this Agreement; provided that if any such Liens are onCollateral, the Contested Collateral Lien Conditions shall at all times besatisfied;

####  

(xi)           Liensin the form of licenses, leases or subleases granted or created by the Borroweror any Subsidiary, which licenses, leases or subleases do not interfere,individually or in the aggregate, in any material respect with the business of theBorrower or such Subsidiary or individually or in the aggregate materiallyimpair the use (for its intended purpose) or the value of the property subjectthereto, provided that (x) to the extent such licenses, leases orsubleases relate to Mortgaged Property in existence as of the Effective Date, theBorrower or such Subsidiary shall use its commercially reasonable efforts to assoon as practicable cause such licenses, leases or subleases to be subordinatedto the Lien granted and evidenced by the Security Documents in accordance withthe provisions thereof and (y) to the extent entered into after theEffective Date, such licenses, leases or subleases shall be subordinate to theLien granted and evidenced by the Security Documents in accordance with theprovisions thereof; provided, further, that any such Lien shallnot extend to or cover any assets of the Borrower or any Subsidiary that is notthe subject of any such license, lease or sublease;

####  

(xii)          Lienson fixtures or personal property held by or granted to landlords pursuant toleases to the extent that such Liens are not yet due and payable; providedthat (i) with respect to any such Liens on any material portion of theCollateral in existence on the Effective Date, the Borrower or any applicableSubsidiary has used its commercially reasonable efforts to obtain a landlordlien waiver reasonably satisfactory to the Collateral Agent and (ii) withrespect to any leases entered into after the Effective Date, the Borrower orany applicable Subsidiary shall use its commercially reasonable efforts to(x) enter into a lease that does not grant a Lien on fixtures or personalproperty in favor of the landlord thereunder or (y) obtain a landlord lienwaiver reasonably satisfactory to the Collateral Agent;

####  

(xiii)         Lienssecuring Indebtedness permitted by Section 6.01(a)(xiii); providedthat such Liens existed prior to such Person becoming a Subsidiary, were notcreated in anticipation thereof and attach only to specific assets of suchPerson that is the subject of the Permitted Acquisition;

####  

(xiv)        Lienssecuring Indebtedness permitted by Section 6.01(a)(xiv) or 6.01(a)(xv); and

####  

(xv)         Lienson assets of Subsidiaries that are not Loan Parties securing Indebtedness ofSubsidiaries that are not Loan Parties;

####  

provided,however, that no Liens shall be permitted to exist, directly orindirectly, on any Securities Collateral (as defined in the Security Agreement)other than Liens in favor of the Collateral Agent and Liens permitted byclauses (v) and (x).

 

SECTION 6.03.              FundamentalChanges; Line of Business. (a)  TheLoan Parties will not, and will not permit any of their Subsidiaries to,directly or indirectly, merge into or consolidate with any other Person, orpermit any other Person to merge into or consolidate with them, or liquidate ordissolve, except that, if at the time thereof and immediately after givingeffect thereto no Default or Event of Default shall have occurred and becontinuing, (i) any Subsidiary may merge into the Borrower in a transaction

 

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in which the Borrower is the survivingcorporation, (ii) any Subsidiary of the Borrower may merge with or intoany Subsidiary in a transaction in which the surviving entity is a Subsidiary ofthe Borrower and (if any party to such merger is a Subsidiary Loan Party) is aSubsidiary Loan Party, (iii) Permitted Acquisitions as permitted bySection 6.04 (vii) of this Agreement may be consummated and (iv) the PermittedRestructuring may be consummated; provided that in connection with theforegoing, the appropriate Loan Parties shall take all actions necessary orreasonably requested by the Collateral Agent to maintain the perfection of orperfect, as the case may be, protect and preserve the Liens on the Collateral grantedto the Collateral Agent pursuant to the Security Documents and otherwise complywith the provisions of Sections 5.11 and 5.12, in each case, on the termsset forth therein and to the extent applicable.

 

(b)           Notwithstandingthe foregoing, (i) any Loan Party may dispose of any or all of its assets (uponvoluntary liquidation or otherwise) to any other Loan Party and (ii) anySubsidiary which is not a Loan Party may dispose of any or all of its assets(upon voluntary liquidation or otherwise) to the Borrower or any otherSubsidiary; provided that in connection with each of the foregoing, theappropriate Loan Parties shall take all actions necessary or reasonablyrequested by the Collateral Agent to maintain the perfection of or perfect, asthe case may be, protect and preserve the Liens on the Collateral granted tothe Collateral Agent pursuant to the Security Documents and otherwise complywith the provisions of Sections 5.11 and 5.12, in each case, on the termsset forth therein and to the extent applicable).

###  

(c)           TheBorrower will not, and will not permit any of its Subsidiaries to, directly orindirectly, engage in any business other than businesses of the type conductedby the Borrower and the Subsidiaries on the Effective Date and businesses reasonablyrelated thereto.

###  

SECTION 6.04.              Investments,Loans, Advances, Guarantees and Acquisitions. The Loan Parties will not,and will not permit any Subsidiary to, directly or indirectly, purchase, holdor acquire (including pursuant to any merger with any Person that was not aWholly Owned Subsidiary prior to such merger) any Equity Interests in orevidences of Indebtedness or other securities (including any option, warrant orother right to acquire any of the foregoing) of, make or permit to exist anyloans or advances to, Guarantee any obligations of, or make or permit to existany investment or any other interest in, any other Person, or provide othercredit support for any Person or purchase or otherwise acquire (in onetransaction or a series of transactions) any assets of any other Personconstituting a business unit (each of the foregoing, an “Investment” and collectively, “Investments”),except:

 

(i)            PermittedInvestments;

####  

(ii)           Investmentsexisting on the Effective Date (or in respect of which a binding commitment tomake such investment exists on the Effective Date) and set forth on Schedule 6.04;

####  

(iii)          Investments(A) by the Borrower or any Subsidiary of the Borrower in the Borrower or anySubsidiary Loan Party (whether made prior to or after the Effective Date),(B) by any Subsidiary that is not a Loan Party in Borrower or any WhollyOwned Subsidiary (whether made prior to or after the Effective Date) and (C) afterthe Effective Date by the Borrower or any Subsidiary in any Subsidiary that isnot a Loan Party; provided that the aggregateamount of such Investments pursuant to this clause (C) shall not exceed $20.0million (less the aggregate amount of Restricted Payments made pursuant to Section6.07(iv)) at any one time outstanding; and provided, further, that any such Investment held by aLoan Party shall be pledged pursuant to a Pledge Agreement or a Non-U.S. PledgeAgreement in accordance with Section 5.11;

####  

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#### 

####  

(iv)          Guaranteesconstituting Indebtedness permitted by Section 6.01(a)(iv) or Section6.01(a)(vi);

####  

(v)           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;

####  

(vi)          loansand advances to employees of the Borrower or its Subsidiaries in the ordinarycourse of business (including, without limitation, for travel, entertainmentand relocation expenses) not to exceed $1.0 million in the aggregate at anytime outstanding; provided that (x) to the extent such loans oradvances are evidenced by promissory notes, such promissory notes shall beendorsed in blank and delivered to the Collateral Agent pursuant to the PledgeAgreement and (y) the Borrower shall and shall cause its Subsidiaries totake all actions and execute all documents reasonably requested by theCollateral Agent to confirm the Collateral Agent’s security interest in suchloans and advances and/or promissory notes pursuant to the applicable SecurityDocuments;

####  

(vii)         PermittedAcquisitions for aggregate Acquisition Consideration since the Effective Datenot to exceed $50.0 million (of which not more than $30.0 million may be usedto consummate Permitted Acquisitions by Subsidiaries that are not LoanParties);

####  

(viii)        Investmentsof the Borrower or any Subsidiary Loan Party not in excess of the QRTC Amount outstandingat any time less the aggregate amount of Capital Expenditures made pursuant toSection 6.14(c);

####  

(ix)           loansmade by the Borrower or any of the Subsidiary Loan Parties to Subsidiaries thatare not Loan Parties; provided that (a) the proceeds of such loans shallbe used either to (x) fund Capital Expenditures permitted to be made pursuantto Section 6.14(a) or (y) purchase the Equity Interests in a non-wholly ownedSubsidiary not owned by the Borrower or any of its Subsidiaries and (b) anysuch loan shall be pledged pursuant to a Pledge Agreement or a non-U.S. PledgeAgreement in accordance with Section 5.11; and

####  

(x)            thePermitted Restructuring.

####  

The aggregate amount of an Investment at anyone time outstanding for purposes of this Section 6.04 shall be deemed to beequal to (A) the aggregate amount of cash, together with the aggregate fairmarket value of Property, loaned, advanced, contributed, transferred orotherwise invested that gives rise to such Investment minus (B) the aggregate amount of dividends, distributions or otherpayments received in cash in respect of such Investment (including by way of asale or other disposition of such Investment). The amount of an Investmentshall not in any event be reduced by reason of any write-off of suchInvestment.

 

SECTION 6.05.              AssetSales. The Loan Parties will not, and will not permit any Subsidiary to,directly or indirectly, sell, transfer, lease or otherwise dispose of anyasset, including any Equity Interest owned by them, nor will the Borrower permitany of its Subsidiaries to, directly or indirectly, issue any additional EquityInterest in such Subsidiary, except:

 

(i)            salesof inventory or used, surplus, obsolete, outdated, inefficient or worn outequipment and other property in the ordinary course of business;

####  

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#### 

 

#### (ii)           sales,transfers and dispositions to the Borrower or any Subsidiary Loan Party; providedthat in connection with the foregoing, the appropriate Loan Parties shall takeall actions necessary or reasonably requested by the Collateral Agent tomaintain the perfection of or perfect, as the case may be, protect and preservethe Liens on the Collateral granted to the Collateral Agent pursuant to theSecurity Documents and otherwise comply with the provisions of Sections 5.11and 5.12, in each case, on the terms set forth therein and to the extentapplicable;

####  

#### (iii)          sales,transfers and dispositions by any Subsidiary that is not a Loan Party to anyWholly Owned Subsidiary of the Borrower;

####  

#### (iv)          thelease or sublease of Real Property in the ordinary course of business and notconstituting a sale and leaseback transaction;

####  

#### (v)           salesof Permitted Investments on ordinary business terms;

####  

#### (vi)          Lienspermitted by Section 6.02 and Investments permitted under Section 6.04;

####  

#### (vii)         thelease of certain facilities of Chicopee located in Little Rock, Arkansas;

####  

#### (viii)        thePermitted Restructuring;

####  

#### (ix)           sales,transfers and dispositions of assets (other than Equity Interests of aSubsidiary) not otherwise permitted under this Section; provided thatthe aggregate fair market value of all assets sold, transferred or otherwisedisposed of in reliance upon this clause (ix) shall not exceed $35.0million in the aggregate and the Net Proceeds thereof are applied as requiredby Section 2.05(c)(iii);

####  

#### (x)            (A) issuancesof Equity Interests by any Subsidiary of the Borrower to the Borrower or anyWholly Owned Subsidiary of the Borrower and (B) capital contributions by theBorrower or any Wholly Owned Subsidiary of the Borrower to any Subsidiary of theBorrower; and

####  

#### (xi)           PermittedFactoring Transactions;

####  

provided that all sales, transfers, leases andother dispositions permitted hereby shall be made for fair value and, in thecase of sales, transfers, leases and other dispositions permitted byclauses (i), (v), (viii) and (ix), for consideration consisting of atleast 75% cash and Cash Equivalents.

 

SECTION 6.06.              Saleand Leaseback Transactions.  The LoanParties will not, and will not permit any of their Subsidiaries to, directly orindirectly, enter into any arrangement, directly or indirectly, whereby theyshall sell or transfer any Property, real or personal, used or useful in theirbusiness, whether now owned or hereafter acquired, and thereafter rent or leasesuch Property or other Property that they intend to use for substantially thesame purpose or purposes as the Property sold or transferred (a “Sale andLeaseback Transaction”) unless (i) the sale of such Property ispermitted by Section 6.05 and (ii) any Lien arising in connectionwith the use of such Property by any Loan Party or a Subsidiary is permitted bySection 6.02.

 

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SECTION 6.07.              RestrictedPayments. The Loan Parties will not, and will not permit any Subsidiary to,directly or indirectly, declare or make, or agree to pay or make, directly orindirectly, any Restricted Payment, or incur any obligation (contingent or otherwise)to do so, except:

 

#### (i)            Subsidiariesof the Borrower may declare and pay dividends to the Borrower, anotherSubsidiary or any other holder of its Equity Interests ratably with respect totheir Equity Interests or additional shares of the same class of shares as thedividend being paid to the extent such payment complies withSection 6.01(b); provided that no such dividend or distributionshall be made by any such Subsidiary to any Person other than the Borrower oranother Subsidiary unless ratable dividends or distributions are concurrentlymade to all holders of the applicable Equity Interests;

####  

#### (ii)           theBorrower may pay dividends consisting solely of shares of its common stock oradditional shares of the same class of shares as the dividend being paid;

####  

#### (iii)          theBorrower and its Subsidiaries may make Restricted Payments not to exceed $5.0million in the aggregate since the Effective Date;

####  

#### (iv)          Subsidiariesthat are not Loan Parties may redeem their Equity Interests held by Personsother than the Borrower or any of its Subsidiaries; provided that theaggregate amount of such redemptions since the Effective Date shall not exceed$20.0 million (less the amount of Investments outstanding under Section6.04(iii)(C)); and

####  

#### (v)           TheBorrower may redeem up to $10,000,000 in the aggregate of the Borrower’s Class A,Class B, and Class C Common Stock from Persons other than the GOF Holders.

####  

SECTION 6.08.              Transactionswith Affiliates. The Loan Parties will not, and will not permit any oftheir Subsidiaries to, directly or indirectly, sell, lease or otherwisetransfer any property or assets to, or purchase, lease or otherwise acquire anyproperty or assets from, or otherwise engage in any other transactions with,any of their Affiliates, unless such transactions are in the ordinarycourse of the Borrower’s business and are at prices and on terms and conditionsnot less favorable to the Loan Party or such Subsidiary than could be obtainedon an arm’s-length basis from unrelated third parties, except:

 

#### (i)            transactionsbetween or among the Borrower and the Subsidiaries not involving any otherAffiliate;

####  

#### (ii)           anyRestricted Payment permitted by Section 6.07;

####  

#### (iii)          feesand compensation, benefits and incentive arrangements paid or provided to, andany indemnity provided on behalf of, officers, directors or employees of theBorrower or any Subsidiary as determined in good faith by the board ofdirectors of the Borrower;

####  

#### (iv)          loansand advances to employees of the Borrower or any Subsidiary Loan Party permittedby Section 6.04(vii);

####  

#### (v)           transactionsfor purchases of raw materials in the ordinary course of business oncommercially reasonable terms and conditions from suppliers from which theBorrower or any of its Subsidiaries has made such purchases prior to theEffective Date; and

####  

#### 77

#### 

####  

#### (vi)          theissuance or sale of any Equity Interests of the Borrower.

####  

SECTION 6.09.              RestrictiveAgreements.  The Loan Parties willnot, and will not permit any Subsidiary to, directly or indirectly, enter into,incur or permit to exist any agreement or other arrangement that prohibits,restricts or imposes any condition upon (a) the ability of any Loan Partyto create, incur or permit to exist any Lien upon any of its Property orassets, or (b) the ability of any Subsidiary to pay dividends or otherdistributions with respect to any of its Equity Interests or to make or repayloans or advances to the Borrower or any other Subsidiary or to GuaranteeIndebtedness of the Borrower or any other Subsidiary or to transfer property tothe Borrower or any of its Subsidiaries; provided that the foregoingshall not apply to:

 

#### (i)            conditionsimposed by law or by any Loan Document;

####  

#### (ii)           clause (a)shall not apply to assets encumbered by Permitted Liens as long as suchrestriction applies only to the asset encumbered by such Permitted Lien;

####  

#### (iii)          restrictionsand conditions existing on the Effective Date not otherwise excepted from thisSection 6.09 identified on Schedule 6.09 (but shall not applyto any amendment or modification expanding the scope of any such restriction orcondition);

####  

#### (iv)          inthe case of clause (a) only, any agreement in effect at the time any Personbecomes a Subsidiary of the Borrower; provided that such agreement wasnot entered into in contemplation of such Person becoming a Subsidiary;

####  

#### (v)           customaryrestrictions and conditions contained in agreements relating to the sale of aSubsidiary (or the assets of a Subsidiary) pending such sale, providedsuch restrictions and conditions apply only to the Subsidiary that is to besold (or whose assets are to be sold) and such sale is permitted hereunder; and

####  

#### (vi)          clause (a)shall not apply to customary provisions in leases and service contracts in theordinary course of business between the Borrower or any Subsidiary and itscustomers and other contracts restricting the assignment thereof.

####  

SECTION 6.10.              Amendmentsor Waivers of Certain Documents; Prepayments of Certain Indebtedness. (a)  The Loan Parties will not, and will notpermit any Subsidiary to, directly or indirectly, amend or otherwise change (orwaive) the terms of any Organic Document in a manner adverse to the Lenders.

 

### (b)           The Loan Parties willnot, and will not permit any Subsidiary to, make (or give any notice or offerin respect of) any voluntary or optional payment or mandatory prepayment orredemption or acquisition for value of (including, without limitation, by wayof depositing with any trustee with respect thereto money or securities beforesuch Indebtedness is due for the purpose of paying such Indebtedness when due)or exchange of principal of any Subordinated Debt, other than pursuant to anycustomary registered exchange offer therefor after a private placement thereof,any Permitted Refinancing or (so long as no Default then exists) any exchangeof Equity Interests of the Borrower for any such Indebtedness.

###  

SECTION 6.11.              NoOther “Designated Senior Indebtedness.” Neither the Borrower nor any other Loan Party shall designate, or permitthe designation of, any Indebtedness (other than under

 

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this Agreement or the other Loan Documents) as “Designated SeniorIndebtedness” (or any equivalent term) under any Subordinated Debt Documents.

 

SECTION 6.12.              InterestExpense Coverage Ratio. The Borrower will not permit the Interest ExpenseCoverage Ratio for any Test Period to be less than the ratio set forth belowopposite the date set forth below which is closest to the last day of such TestPeriod:

 

| **Date**           | ** ** | **Ratio** |
|--------------------|------------|-----------|
| December 31, 2005  |       | 2.50:1.00 |
| March 31, 2006     |       | 2.50:1.00 |
| June 30, 2006      |       | 2.50:1.00 |
| September 30, 2006 |       | 2.50:1.00 |
| December 31, 2006  |       | 2.75:1.00 |
| March 31, 2007     |       | 2.75:1.00 |
| June 30, 2007      |       | 2.75:1.00 |
| September 30, 2007 |       | 2.75:1.00 |
| December 31, 2007  |       | 3.00:1.00 |
| March 31, 2008     |       | 3.00:1.00 |
| June 30, 2008      |       | 3.00:1.00 |
| September 30, 2008 |       | 3.00:1.00 |
| December 31, 2008  |       | 3.25:1.00 |
| March 31, 2009     |       | 3.25:1.00 |
| June 30, 2009      |       | 3.25:1.00 |
| September 30, 2009 |       | 3.25:1.00 |
| December 31, 2009  |       | 3.50:1.00 |
| March 31, 2010     |       | 3.50:1.00 |
| June 30, 2010      |       | 3.50:1.00 |
| September 30, 2010 |       | 3.50:1.00 |
| December 31, 2010  |       | 3.50:1.00 |
| March 31, 2011     |       | 3.50:1.00 |
| June 30, 2011      |       | 3.50:1.00 |
| September 30, 2011 |       | 3.50:1.00 |
| December 31, 2011  |       | 3.50:1.00 |
| March 31, 2012     |       | 3.50:1.00 |
| June 30, 2012      |       | 3.50:1.00 |

 

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| **Date**           | ** ** | **Ratio** |
|--------------------|------------|-----------|
| September 30, 2012 |       | 3.50:1.00 |

 

SECTION 6.13.              TotalLeverage Ratio.  The Borrower willnot permit the Total Leverage Ratio at the end of any Test Period to exceed theratio set forth opposite the date set forth below which is closest to the lastday of such Test Period:

 

| **Date**           | ** ** | **Ratio** |
|--------------------|------------|-----------|
| December 31, 2005  |       | 4.50:1.00 |
| March 31, 2006     |       | 4.50:1.00 |
| June 30, 2006      |       | 4.50:1.00 |
| September 30, 2006 |       | 4.50:1.00 |
| December 31, 2006  |       | 4.00:1.00 |
| March 31, 2007     |       | 4.00:1.00 |
| June 30, 2007      |       | 4.00:1.00 |
| September 30, 2007 |       | 4.00:1.00 |
| December 31, 2007  |       | 3.50:1.00 |
| March 31, 2008     |       | 3.50:1.00 |
| June 30, 2008      |       | 3.50:1.00 |
| September 30, 2008 |       | 3.50:1.00 |
| December 31, 2008  |       | 3.00:1.00 |
| March 31, 2009     |       | 3.00:1.00 |
| June 30, 2009      |       | 3.00:1.00 |
| September 30, 2009 |       | 3.00:1.00 |
| December 31, 2009  |       | 3.00:1.00 |
| March 31, 2010     |       | 3.00:1.00 |
| June 30, 2010      |       | 3.00:1.00 |
| September 30, 2010 |       | 3.00:1.00 |
| December 31, 2010  |       | 3.00:1.00 |
| March 31, 2011     |       | 3.00:1.00 |
| June 30, 2011      |       | 3.00:1.00 |
| September 30, 2011 |       | 3.00:1.00 |
| December 31, 2011  |       | 3.00:1.00 |
| March 31, 2012     |       | 3.00:1.00 |

 

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| **Date**           | ** ** | **Ratio** |
|--------------------|------------|-----------|
| June 30, 2012      |       | 3.00:1.00 |
| September 30, 2012 |       | 3.00:1.00 |

 

SECTION 6.14.              CapitalExpenditures.  The Borrower will not,and will not permit any of its Subsidiaries to, make or commit to make anyCapital Expenditures, except that:

 

(a)           theBorrower and its Subsidiaries may make or commit to make Capital Expendituresnot exceeding the amount set forth below (the “Base Amount”) for each ofthe Fiscal Years of the Borrower set forth below:

 

| **Fiscal Year** | ** ** | **Base Amount** | ** **   |
|-----------------|------------|-----------------|--------------|
| 2005            |       | $               | 90.0 million |   |
| 2006            |       | $               | 65.0 million |   |
| 2007            |       | $               | 65.0 million |   |
| 2008            |       | $               | 50.0 million |   |
| 2009            |       | $               | 50.0 million |   |
| 2010            |       | $               | 50.0 million |   |
| 2011            |       | $               | 50.0 million |   |
| 2012            |       | $               | 50.0 million |   |

 

provided that forany period set forth above, the Base Amount set forth above may be increased forany such period by carrying over to any such period any portion of the BaseAmount (without giving effect to any increase) not spent in the immediately precedingperiod, and that Capital Expenditures in any period shall be deemed first madefrom the Base Amount applicable to such period in any given period; provided,further, that for avoidance of doubt, Capital Expenditures for theFiscal Year beginning January 1, 2005 shall include Capital Expendituresmade or committed to be made by the Borrower and its Subsidiaries prior to theEffective Date.

 

(b)           theBorrower and its Subsidiaries may make additional Capital Expenditures (i) tothe extent funded by the Net Proceeds from Equity Issuances (excludingissuances of Disqualified Equity Interests of the Borrower), subject to firstcomplying with Section 2.05(c)(i), and (ii) at any time in an amount not toexceed the Cumulative Retained Excess Cash Flow Amount at such time.

 

(c)           theBorrower and its Subsidiaries may make additional Capital Expenditures not toexceed the QRTC Amount in the aggregate; provided that the aggregateamount of Capital Expenditures made pursuant to this clause (c) plus theaggregate amount of Investments outstanding under Section 6.04(viii) shall notexceed the QRTC Amount at any one time.

 

SECTION 6.15.              Anti-TerrorismLaw. The Loan Parties shall not (i) conduct any business or engage inmaking or receiving any contribution of funds, goods or services to or for thebenefit of any Person described in Section 3.22 above, (ii) deal in,or otherwise engage in any transaction relating

 

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to, any property or interestsin property blocked pursuant to the Executive Order or any other Anti-TerrorismLaw, or (iii) engage in or conspire to engage in any transaction thatevades or avoids, or has the purpose of evading or avoiding, or attempts toviolate, any of the prohibitions set forth in any Anti-Terrorism Law (and theLoan Parties shall deliver to the Lenders any certification or other evidencerequested from time to time by any Lender in its reasonable discretion,confirming the Loan Parties’ compliance with this Section 6.15).

 

SECTION 6.16.              EmbargoedPerson.  At all times throughout theterm of the Loans, (a) none of the funds or assets of the Loan Partiesthat are used to repay the Loans shall constitute property of, or shall bebeneficially owned directly or, to the knowledge of any Loan Party, indirectlyby, any Person subject to sanctions or trade restrictions under United Stateslaw (“Embargoed Person” or “Embargoed Persons”) that isidentified on (1) the “List of Specially Designated Nationals and BlockedPersons” (the “SDN List”) maintained by the Office of Foreign AssetsControl (OFAC), U.S. Department of the Treasury, and/or to the knowledge of anyLoan Party, as of the date thereof, based upon reasonable inquiry by such LoanParty, on any other similar list (“Other List”) maintained by OFACpursuant to any authorizing statute including, but not limited to, theInternational Emergency Economic Powers Act, 50 U.S.C. §§ 1701 etseq., The Trading with the Enemy Act, 50 U.S.C. App. 1 etseq., and any Executive Order or regulation promulgated thereunder, withthe result that the investment in the Loan Parties (whether directly orindirectly) is prohibited by law, or the Loans made by the Lenders would be inviolation of law, or (2) the Executive Order, any related enablinglegislation or any other similar Executive Orders (collectively, “ExecutiveOrders”), and (b) no Embargoed Person shall have any direct interest,and to the knowledge of any Loan Party, as of the date hereof, based uponreasonable inquiry by any Loan Party, indirect interest, of any naturewhatsoever in the Loan Parties, with the result that the investment in the LoanParties (whether directly or indirectly) is prohibited by law or the Loans arein violation of law.

 

SECTION 6.17.              Anti-MoneyLaundering.  At all times throughoutthe term of the Loans, to the knowledge of any Loan Party, as of the datehereof, based upon reasonable inquiry by such Loan Party, none of the funds ofsuch Loan Party that are used to repay the Loans shall be derived from anyunlawful activity with the result that the investment in the Loan Parties(whether directly or indirectly), is prohibited by law or the Loans would be inviolation of law.

 

# ARTICLE VIIEVENTS OF DEFAULT

#  

SECTION 7.01.              Listingof Events of Default.  Each of thefollowing events or occurrences described in this Section 7.01 shallconstitute (i) an “Event of Default”, if any Loans, LCDisbursements or Letters of Credit are outstanding, and (ii) an “Eventof Termination”, if no Loans, LC Disbursements or Letters of Credit areoutstanding:

 

(a)           TheBorrower shall default (i) in the payment when due of any principal of anyLoan (including, without limitation, on any Installment Payment Date) or anyreimbursement obligation in respect of any LC Disbursement, (ii) in thepayment when due of any interest on any Loan (and such default shall continueunremedied for a period of three Business Days), or (iii) in the paymentwhen due of any Fee described in Section 2.10 or of any other previouslyinvoiced amount (other than an amount described in clauses (i) and (ii))payable under this Agreement or any other Loan Document (and such default shallcontinue unremedied for a period of three Business Days).

 

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(b)           Anyrepresentation or warranty of the Borrower or any other Loan Party made ordeemed to be made hereunder or in any other Loan Document or any other writingor certificate furnished by or on behalf of the Borrower or any other LoanParty to the Administrative Agent, the Issuing Bank or any Lender for thepurposes of or in connection with this Agreement or any such other LoanDocument is or shall be incorrect in any material respect when made or deemedmade.

 

(c)           TheBorrower or any other Loan Party shall default in the due performance andobservance of any of its obligations under clause (e), (f) or (j) ofSection 5.01, clause (a) of Section 5.02 (with respect to themaintenance and preservation of the Borrower’s corporate existence) or Article VI.

 

(d)           TheBorrower or any other Loan Party shall default in the due performance andobservance of any agreement (other than those specified in paragraphs (a)through (c) above) contained herein or in any other Loan Document, and suchdefault shall continue unremedied for a period of 30 days after the date ofsuch default.

 

(e)           Adefault shall occur (i) in the payment when due (subject to any applicablegrace period), whether by acceleration or otherwise, of any MaterialIndebtedness or (ii) in the performance or observance of any obligation orcondition with respect to any Material Indebtedness if the effect of suchdefault referred to in this clause (ii) is to accelerate the maturityof any such Material Indebtedness or enable or permit (with or without thegiving of notice, the lapse of time or both) the holder or holders of any suchMaterial Indebtedness or any trustee or agent on its or their behalf to causeany such Material Indebtedness to become due, or to require the prepayment,repurchase, redemption or defeasance thereof, prior to its scheduled maturity.

 

(f)            Anyjudgment or order (or combination of judgments and orders) for the payment ofmoney equal to or in excess of $10.0 million individually or in theaggregate shall be rendered against the Borrower or any of its Subsidiaries (orany combination thereof) and

 

(i)            enforcementproceedings shall have been commenced by any creditor upon such judgment or orderand not stayed;

 

(ii)           suchjudgment has not been stayed, vacated or discharged within 60 days of entry; or

 

(iii)          thereshall be any period (after any applicable statutory grace period) of 10consecutive days during which a stay of enforcement of such judgment or order,by reason of a pending appeal or otherwise, shall not be in effect and suchjudgment is not fully insured against by a policy or policies of insurance(with reasonable or standard deductible provisions) issued by an insurer otherthan an Affiliate of the Borrower.

 

(g)           Anyof the following events shall occur:

 

(i)            thetaking of any specific actions by a Loan Party, any ERISA Affiliate or anyother Person to terminate a Pension Plan if, as a result of such termination, aLoan Party or any ERISA Affiliate could reasonably expect to incur a liabilityor obligation to such Pension Plan which could reasonably be expected to have aMaterial Adverse Effect; or

 

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(ii)           anERISA Event, or termination, withdrawal or event of noncompliance withapplicable law or plan terms with respect to Foreign Plans, shall have occurredthat when taken together with all other ERISA Events and terminations,withdrawals and events of noncompliance with respect to Foreign Plans that haveoccurred, could reasonably be expected to have a Material Adverse Effect.

 

(h)           AnyChange in Control shall occur.

 

(i)            AnyLoan Party shall

 

(i)            becomeinsolvent or generally fail to pay debts as they become due;

 

(ii)           applyfor, consent to or acquiesce in the appointment of a trustee, receiver,sequestrator or other custodian for any Loan Party or substantially all of itsproperty, or make a general assignment for the benefit of creditors;

 

(iii)          inthe absence of such application, consent or acquiescence, permit or suffer toexist the appointment of a trustee, receiver, sequestrator or other custodianfor any Loan Party or for a substantial part of its property, and such trustee,receiver, sequestrator or other custodian shall not be discharged or stayedwithin 60 days, provided that each Loan Party hereby expresslyauthorizes the Administrative Agent and each Lender to appear in any courtconducting any relevant proceeding during such 60-day period to preserve,protect and defend their rights under the Loan Documents;

 

(iv)          permitor suffer to exist the commencement of any bankruptcy, reorganization, debtarrangement or other case or proceeding under any bankruptcy or insolvency law,or any dissolution, winding up or liquidation proceeding, in respect of anyLoan Party and, if any such case or proceeding is not commenced by any LoanParty, such case or proceeding shall be consented to or acquiesced in by suchLoan Party or shall result in the entry of an order for relief or shall remainfor 60 days undismissed and unstayed; provided that each Loan Partyhereby expressly authorizes the Administrative Agent and each Lender to appearin any court conducting any such case or proceeding during such 60-day periodto preserve, protect and defend their rights under the Loan Documents; or

 

(v)           takeany corporate or partnership action (or comparable action, in the case of anyother form of legal entity) for the purpose of effecting any of the foregoing.

 

(j)            Theobligations of any Loan Party under the Guarantee Agreement shall cease to bein full force and effect (except in accordance with its terms) or any such LoanParty shall repudiate its obligations thereunder.

 

(k)           AnySecurity Document shall cease to be in full force and effect (except inaccordance with its terms) or any Lien purported to be created under anySecurity Document shall fail or cease to be, or shall be asserted by any LoanParty not to be, a valid and perfected Lien on any material portion of theCollateral, with the priority required by the applicable Security Document.

 

SECTION 7.02.              Actionif Bankruptcy.  If any Event ofDefault described in Section 7.01(i) shall occur, the Commitments (if nottheretofore terminated) shall automatically terminate and the outstandingprincipal amount of all outstanding Loans and all other Obligations shallautomatically be

 

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and become immediately due andpayable, without notice or demand, all of which are hereby waived by theBorrower.

 

SECTION 7.03.              Actionif Other Event of Default.  If anyEvent of Default (other than any Event of Default described inSection 7.01(i)) shall occur for any reason, whether voluntary orinvoluntary, and be continuing, the Administrative Agent, upon the direction ofthe Requisite Lenders, shall by written notice to the Borrower and each Lenderdeclare all or any portion of the outstanding principal amount of the Loans andother Obligations to be due and payable and/or the Commitments (if not theretoforeterminated) to be terminated, whereupon the full unpaid amount of such Loansand other Obligations which shall be so declared due and payable shall be andbecome immediately due and payable, without further notice, demand orpresentment and/or, as the case may be, the Commitments shall terminate.

 

SECTION 7.04.              Actionif Event of Termination.  Upon theoccurrence and continuation of any Event of Termination, the Requisite Lendersmay, by notice from the Administrative Agent to the Borrower and the Lenders(except if an Event of Termination described in Section 7.01(i) shall haveoccurred, in which case the Commitments (if not theretofore terminated) shall,without notice of any kind, automatically terminate) declare their Commitmentsterminated, and upon such declaration the Lenders shall have no further obligationto make any Loans hereunder. Upon such termination of the Commitments, allaccrued fees and expenses shall be immediately due and payable.

 

# ARTICLE VIIITHE AGENTS

#  

SECTION 8.01.              TheAgents.  Citicorp North America, Inc.is hereby appointed to act as Administrative Agent on behalf of the Lenders. EachLender that holds Loans or has Commitments and each holder of any RelatedHedging Obligations and each person holding Overdraft Obligations (in eachcase, in its capacity as such) hereby irrevocably designates and appoints theCollateral Agent as an agent of such person under this Agreement and each otherLoan Document to which the Collateral Agent is a party. Each of the Lenders andeach assignee of any such Lender hereby irrevocably authorizes each of theAgents to take such actions on behalf of such Lender or assignee and to exercisesuch powers as are specifically delegated to such Agent by the terms andprovisions hereof and of the other Loan Documents, together with such actionsand powers as are reasonably incidental thereto. Each Agent is hereby expresslyauthorized by the Lenders, without hereby limiting any implied authority,(a) to receive on behalf of the Lenders all payments of principal of andinterest on the Loans, all payments and all other amounts due to the Lendershereunder, and promptly to distribute to each Lender its proper share of eachpayment so received; (b) to give notice on behalf of each of the Lendersto any of the Loan Parties of any Default specified in this Agreement of whichsuch Agent has actual knowledge acquired in connection with its agencyhereunder; and (c) to distribute to each Lender copies of all notices,financial statements and other materials delivered by any of the Loan Parties pursuantto this Agreement as received by such Agent.

 

None of the Agents nor any of their Related Parties shall be liable tothe Lenders as such for any action taken or omitted to be taken by any of themexcept to the extent finally judicially determined to have resulted from its orhis or her own gross negligence or willful misconduct, or be responsible forany statement, warranty or representation herein or the contents of any documentdelivered in connection herewith, or be required to ascertain or to make anyinquiry concerning the performance or observance by any Loan Party of any ofthe terms, conditions, covenants or agreements contained in any Loan Document. TheAgents shall not be responsible to the Lenders for the due execution,genuineness, validity, enforceability or effectiveness of this Agreement or anyother Loan Documents or other instruments or agreements. Each Agent shall inall cases be fully protected in acting, or refraining from acting, in

 

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accordance with written instructions signed by the Requisite Lenders(or, when expressly required hereby, all the Lenders) and, except as otherwisespecifically provided herein, such instructions and any action or inactionpursuant thereto shall be binding on all the Lenders. Each Agent shall, in theabsence of actual knowledge to the contrary, be entitled to rely on anyinstrument or document believed by it in good faith to be genuine and correctand to have been signed or sent by the proper person or persons. None of theAgents nor any of their Related Parties shall have any responsibility to theLoan Parties on account of the failure of or delay in performance or breach byany Lender of any of its obligations hereunder or to any Lender on account ofthe failure of or delay in performance or breach by any other Lender or theLoan Parties of any of their respective obligations hereunder or under anyother Loan Document or in connection herewith or therewith. Each Agent mayexecute any and all duties hereunder by or through any of its Related Partiesor any sub-agent appointed by it and shall be entitled to rely upon the adviceof legal counsel selected by it with respect to all matters arising hereunderand shall not be liable for any action taken or suffered in good faith by it inaccordance with the advice of such counsel.

 

The Lenders hereby acknowledge that no Agent shall be under any duty totake any discretionary action permitted to be taken by it pursuant to theprovisions of any Loan Document unless it shall be requested in writing to doso by the Requisite Lenders.

 

Subject to the appointment and acceptance of a successor Agent asprovided below, any Agent may resign at any time by notifying the Lenders, theIssuing Bank and the Borrower. Upon any such resignation, the Requisite Lenders(with the consent of the Borrower, not to be unreasonably withheld) shall havethe right to appoint a successor. If no successor shall have been so appointedby the Requisite Lenders and shall have accepted such appointment within 30days after the retiring Agent gives notice of its resignation, then theretiring Agent may (with the consent of the Borrower, not to be unreasonablywithheld), on behalf of the Lenders and the Issuing Bank, appoint a successorAgent which shall be a bank with an office in New York, New York,having a combined capital and surplus of at least $500.0 million or anAffiliate of any such bank. Upon the acceptance of any appointment as an Agenthereunder by such a successor bank, such successor shall succeed to and becomevested with all the rights, powers, privileges and duties of the retiring Agentand the retiring Agent shall be discharged from its duties and obligationshereunder. After an Agent’s resignation hereunder, the provisions of this Article andSection 9.05 shall continue in effect for its benefit in respect of any actionstaken or omitted to be taken by it while it was acting as an Agent.

 

With respect to any Loans made by it hereunder, each Agent in itsindividual capacity and not as an Agent shall have the same rights and powersas any other Lender and may exercise the same as though it were not an Agent. Inaddition, Agents and their Affiliates may accept deposits from, lend money toand generally engage in any kind of business with the Borrower or any Subsidiaryor other Affiliate thereof as if any were not Agents.

 

Each Lender acknowledges that it has, independently and withoutreliance upon any Agent or any other Lender and based on such documents and informationas it has deemed appropriate, made its own credit analysis and decision toenter into this Agreement. Each Lender also acknowledges that it will, independentlyand without reliance upon any Agent or any other Lender and based on suchdocuments and information as it shall from time to time deem appropriate,continue to make its own decisions in taking or not taking action under orbased upon this Agreement or any other Loan Document, any related agreement orany document furnished hereunder or thereunder.

 

Notwithstanding anything to the contrary in this Agreement, neitherCGMI, as Sole Lead Arranger and Sole Bookrunner, nor Citicorp

 

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North America, Inc., as Syndication Agent, nor Citicorp North America,Inc., as Documentation Agent, in such respective capacities, shall have anyobligations, duties or responsibilities, or shall incur any liabilities, underthis Agreement or any other Loan Document.

 

# ARTICLE IXMISCELLANEOUS

#  

SECTION 9.01.              Notices.  (a) Except as set forth in Section 9.17, notices and other communicationsprovided for herein shall be in writing and shall be delivered by hand orovernight courier service, mailed by certified or registered mail, sent bytelecopy or electronic mail, as follows:

 

#### (i)            ifto the Borrower, to it at Polymer Group, Inc., 4055 Faber Place, Suite 201,North Charleston, South Carolina 29405, attention:  Willis C. Moore III (telecopy:  843-329-0415) (e-mail:  mooreb@pginw.com), with a copy to Kirkland& Ellis LLP, 200 E. Randolph Drive, Chicago, IL 60601, attention:  H. Kurt von Moltke, P.C. (telecopy:  (312) 861-2200) (e-mail:  kvonmoltke@kirkland.com);

####  

#### (ii)           ifto the Administrative Agent or the Collateral Agent, to it at Citicorp NorthAmerica, Inc., 390 Greenwich St., New York, NY 10013, attention:  Christina Quezon (telecopy:  (212) 994-0961) (e-mail:  christina.m.quezon@citigroup.com), with acopy to Cahill Gordon & Reindel LLP, 80 Pine Street, New York, NY10005, attention:  Michael E. Michetti,Esq. (telecopy:  (212) 269-5420)(e-mail:  mmichetti@cahill.com);

####  

#### (iii)          ifto the Lead Arranger, to it at Citigroup Global Markets, Inc., 390 GreenwichSt., New York, NY 10013, attention: Christina Quezon (telecopy:  (212) 994-0961) (e-mail:  christina.m.quezon@citigroup.com), with acopy to Cahill Gordon & Reindel LLP, 80 Pine Street, New York, NY10005, attention:  Michael E. Michetti,Esq. (telecopy:  (212) 269-5420)(e-mail:  mmichetti@cahill.com);

####  

#### (iv)          ifto the Issuing Bank, to it at Citibank, N.A., 390 Greenwich St., New York,NY 10013, attention: Suzanne Crymes (telecopy:  (646) 291-1621) (e-mail:  suzanne.crymes@citigroup.com), with a copy toCahill Gordon & Reindel LLP, 80 Pine Street, New York, NY 10005,attention:  Michael E. Michetti, Esq.(telecopy:  (212) 269-5420)(e-mail:  mmichetti@cahill.com); and

####  

#### (v)           ifto a Lender, to it at its address (or telecopy number) set forth in Schedule 2.01or its Administrative Questionnaire or in the Assignment and Acceptancepursuant to which such Lender shall have 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 telecopy or electronic mail or on the date five Business Days afterdispatch by certified or registered mail if mailed, in each case delivered,sent or mailed (properly addressed) to such party as provided in this Section9.01 or in accordance with the latest unrevoked direction from such party givenin accordance with this Section 9.01. Each Loan Party and Lender hereunderagrees to notify the Administrative Agent and the Collateral Agent in writingpromptly of any change to the notice information provided above or in Schedule 2.01.

 

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### (b)           The Borrower shallforthwith on demand indemnify each Lender against any loss or liability whichthat Lender or Agent incurs (and that Lender shall not be liable to theBorrower in any respect) as a consequence of:

###  

#### (i)            anyPerson to whom any notice or communication under or in connection with thisAgreement is sent by the Borrower by telecopy failing to receive that notice orcommunication (unless directly caused by that Person’s gross negligence orwillful default); or

####  

#### (ii)           anytelecopy communication which reasonably appears to that Lender or Agent to havebeen sent by the Borrower having in fact been sent by a Person other than theBorrower.

####  

SECTION 9.02.              Survivalof Agreement.  All covenants,agreements, representations and warranties made by the Loan Parties herein andin the certificates or other instruments prepared or delivered in connectionwith or pursuant to this Agreement or any other Loan Document shall be consideredto have been relied upon by Lenders hereto and shall survive the making by theLenders of the Loans and issuance of any Letters of Credit, regardless of anyinvestigation made by any such other party or on its behalf and notwithstandingthat the Administrative Agent, the Issuing Bank or any Lender may have hadnotice or knowledge of any Default or Event of Default or incorrect representationor warranty at the time any credit is extended hereunder, and shall continue infull force and effect as long as the principal of or any accrued interest onany Loan or any Fee or any other amount payable under this Agreement or anyother Loan Document is outstanding and unpaid or any Letter of Credit isoutstanding and so long as the Commitments have not been terminated. The provisionsof Sections 2.14, 2.15, 2.16, 2.17, 9.05 and 9.16 and Article VIIIshall survive and remain in full force and effect regardless of the consummationof the transactions contemplated hereby, the repayment of the Loans, theexpiration or termination of the Letters of Credit and the Commitments or thetermination of this Agreement or any provision hereof.

 

SECTION 9.03.              BindingEffect.  Subject toSection 4.01, this Agreement shall become effective when it shall havebeen executed by the Borrower and the Administrative Agent and when the AdministrativeAgent shall have received counterparts hereof which, when taken together, bearthe signatures of each of the other parties hereto, and thereafter shall bebinding upon and inure to the benefit of the parties hereto and theirrespective permitted successors and assigns.

 

SECTION 9.04.              Successorsand Assigns.  (a)  Whenever in this Agreement any of the partieshereto is referred to, such reference shall be deemed to include the permittedsuccessors and assigns of such party (including any Affiliate of the IssuingBank that issues any Letter of Credit). All covenants, promises and agreementsby or on behalf of the Borrower, the Agents or the Lenders that are containedin this Agreement shall bind and inure to the benefit of their respective successorsand assigns. Nothing in this Agreement, expressed or implied, shall beconstrued to confer upon any Person (other than the parties hereto, theirrespective successors and assigns permitted hereby, Participants to the extentprovided in clause (f) below and, solely to the extent expressly contemplatedhereby, the Related Parties of each of the Agents, the Issuing Bank and theLenders) any legal or equitable right, remedy or claim under or by reason ofthis Agreement.

 

### (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) except in the case of an assignment to a Lender or a Lender Affiliate or inconnection with the initial syndication of the Commitments and Loans, theBorrower and the Administrative Agent (and, in the case of any assignment of aRevolving Credit Commitment

###  

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###  

### or any Lender’sobligations in respect of its LC Exposure or Swingline Exposure, the IssuingBank and the Swingline Lender) must give their prior written consent to suchassignment (which consent shall not be unreasonably withheld or delayed),(ii) except in the case of an assignment to a Lender, a Lender Affiliateor a Federal Reserve Bank or in connection with the initial syndication of theCommitments and Loans, the amount of the Commitment or Loans of the assigningLender subject to each such assignment (determined as of the date the Assignmentand Acceptance with respect to such assignment is delivered to theAdministrative Agent) shall not be less than, in the case of the Term Loans,$1.0 million and increments of $1.0 million in excess thereof and, in the caseof the Revolving Loans, $5.0 million and increments of $1.0 million in excessthereof (or (A) if the aggregate amount of the Commitment or Loans of theassigning Lender is a lesser amount, the entire amount of such Commitment orLoans, or (B) in any other case, such lesser amount as the Borrower andthe Administrative Agent otherwise agree), (iii) each partial assignmentshall be made as an assignment of a proportionate part of all the assigningLender’s rights and obligations under this Agreement, except that thisclause (iii) shall not be construed to prohibit the assignment of aproportionate part of all the assigning Lender’s rights and obligations inrespect of one Class of Commitments and Loans, (iv) except in the case ofthe assignment to an Affiliate of such Lender or an assignment required to bemade pursuant to Section 2.20, the parties to each such assignment shallexecute and deliver to the Administrative Agent an Assignment and Acceptance,together with a processing and recordation fee of $3,500 (provided that onlyone such fee shall be payable in the event of contemporaneous assignments to twoor more Lender Affiliates by a Lender or by two or more Lender Affiliates to aLender) , and (v) the assignee, if it shall not be a Lender, shall deliverto the Administrative Agent an Administrative Questionnaire; provided, further,that any consent of the Borrower otherwise required under this paragraph shallnot be required if an Event of Default has occurred and is continuing. Subjectto acceptance and recording pursuant to paragraph (e) of this Section9.04, from and after the effective date specified in each Assignment andAcceptance, which effective date shall be at least five Business Days after theexecution thereof (unless otherwise determined by the Administrative Agent),(A) the assignee thereunder shall be a party hereto and, to the extent ofthe interest assigned by such Assignment and Acceptance, have the rights andobligations of a Lender under this Agreement, and (B) the assigning Lenderthereunder shall, 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, 2.15, 2.16, 2.17 and 9.05 with respect to factsand circumstances occurring prior to the effective date of such assignment, aswell as to any Fees accrued for its account and not yet paid). Any assignmentor transfer by a Lender of rights or obligations under this Agreement that doesnot comply with this paragraph shall be treated for purposes of this Agreementas a sale by such Lender of a participation in such rights and obligations inaccordance with paragraph (f) of this Section.

###  

### (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 Lender warrants that it is the legal and beneficialowner of the interest being assigned thereby free and clear of any adverseclaim and that its Commitment, and the outstanding balances of its Loans andparticipations in Swingline Loans, in each case without giving effect toassignments thereof 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 other Loan Document orany other instrument or document furnished pursuant hereto, or the financialcondition of the Borrower or any Subsidiary or the performance or observance bythe Borrower or any Subsidiary of any of its obligations under this Agreement,any other Loan Document or any other instrument or document furnished pursuanthereto; (iii) such

###  

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### assignee representsand warrants that it is legally authorized to enter into such Assignment andAcceptance; (iv) such assignee confirms that it has received a copy ofthis Agreement, together with copies of the most recent financial statements,if any, delivered pursuant to Section 5.01 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) such assigneewill independently and without reliance upon either Agent, such assigningLender or any other Lender and based on such documents and information as itshall deem appropriate at the time, continue to make its own credit decisionsin taking or not taking action under this Agreement; (vi) such assigneeappoints and authorizes each Agent to take such action as agent on its behalfand to exercise such powers under this Agreement as are delegated to such Agentby the terms hereof, together with such powers as are reasonably incidentalthereto; (vii) such assignee agrees that it will perform in accordancewith their terms all the obligations which by the terms of this Agreement arerequired to be performed by it as a Lender; and (viii) Schedule 2.01shall be deemed to be amended to reflect the assigning Lender thereunder andthe assignee thereunder after giving effect thereto.

###  

### (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 and LC Disbursements, and participations in Swingline Loans, owing to,each Lender pursuant to the terms hereof from time to time (the “Register”).Except to the extent inconsistent with Section 2.07(d), the entries in theRegister shall be conclusive and the Borrower, the Agents, the Issuing Bank andthe Lenders may treat each Person whose name is recorded in the Registerpursuant to the terms hereof as a Lender hereunder for all purposes of thisAgreement, notwithstanding notice to the contrary. The Register shall beavailable for inspection by the Borrower, the Issuing Bank and any Lender, atany reasonable time and from time to time 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), the processing andrecordation fee referred to in paragraph (b) above and, if required, thewritten consent of the Borrower, the Issuing Bank, the Swingline Lender and theAdministrative Agent to such assignment, the Administrative Agent shall(i) accept such Assignment and Acceptance, (ii) record theinformation contained therein in the Register and (iii) give prompt noticethereof to the Lenders. No assignment shall be effective unless it has beenrecorded in the Register as provided in this paragraph (e).

###  

### (f)            Each Lender maywithout the consent of the Borrower, the Swingline Lender, the Issuing Bank orthe Administrative Agent, sell participations to any Person (other than anatural person or the Borrower or any of the Borrower’s Affiliates orSubsidiaries) (each, a “Participant”) in all or a portion of its rightsand obligations under this Agreement (including all or a portion of itsCommitment and the Loans owing to it); provided, however, that(i) such Lender’s obligations under this Agreement shall remain unchanged,(ii) such Lender shall remain solely responsible to the other partieshereto for the performance of such obligations, (iii) each Participantshall be entitled to the benefit of the cost protection provisions contained inSections 2.14, 2.15, 2.16 and 2.17 and the provisions of Section 5.01to the same extent as if it were a Lender and had acquired its interest byassignment pursuant to paragraph (b) of this Section 9.04 (providedthat no participant shall be entitled to receive any greater amount pursuant tosuch Sections than the Lender would have been entitled to receive inrespect of the interest transferred unless either (x) such transfer tosuch Participant is made with the Borrower’s prior written consent (not to beunreasonably withheld) or (y) a Default or an Event of Default hasoccurred and is continuing at the time of such participation), and(iv) the Borrower, the Agents, the Issuing Bank and the Lenders shallcontinue to deal solely and directly with such Lender in connection with suchLender’s rights and obligations under

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### thisAgreement, and such Lender shall retain the sole right (which each Lenderagrees will not be limited by the terms of any participation agreement or otheragreement with a participant) to enforce the Loan Documents and to approve anyamendment, modification or waiver of any provision of the Loan Documents (otherthan, without the consent of the Participant, amendments, modifications orwaivers described in clauses (i), (iv) and (v) of Section 9.08(c) that affectsuch Participant). To the extent permitted by law, each Participant also shallbe entitled to the benefits of Section 9.06 as though it were a Lender,provided such Participant agrees to be subject to Section 2.20 as thoughit were a Lender.

###  

### (g)           Any Lender orparticipant may, in connection with any assignment, pledge or participation orproposed assignment or participation pursuant to this Section 9.04, disclose tothe assignee or participant or proposed assignee or participant any informationrelating to Borrower and its Subsidiaries furnished to such Lender by or onbehalf of any of the Loan Parties; provided that, prior to any suchdisclosure of information designated by the Borrower as confidential, each suchassignee, pledgee or participant or proposed assignee, pledgee or participantshall execute a confidentiality agreement in form and substance consistent withprovisions of Section 9.16.

###  

### (h)           Any Lender, without theconsent of or notice to the Borrower or the Administrative Agent, may at anytime pledge or assign a security interest in all or any portion of its rightsunder this Agreement to secure obligations of such Lender, including any pledgeor assignment to secure obligations to a Federal Reserve Bank and this Section9.04 shall not apply to any such pledge or assignment of a security interest; providedthat (x) no such pledge or assignment of a security interest shall releasea Lender from any of its obligations hereunder or substitute any such pledgeeor assignee for such Lender as a party hereto and (y) any foreclosure orsimilar action shall be subject to the provisions of this Section 9.04(b)concerning assignments and shall not be effective to transfer any rights underthis Agreement or in any Loan, Note or other instrument evidencing the rightsof a Lender under this Agreement until the requirements of Section 9.04(b)concerning assignments are fully satisfied. In order to facilitate such apledge or assignment, the Borrower shall, at the request of the assigningLender, duly execute and deliver to the assigning Lender a promissory note ornotes evidencing the Loans made to the Borrower by the assigning Lender hereunder.

###  

### (i)            The Borrower shall notassign or delegate any of its rights or duties hereunder without the priorwritten consent of the Administrative Agent and each Lender, and any attemptedassignment without such consent shall be null and void.

###  

SECTION 9.05.              Expenses;Indemnity.  (a)  The Borrower agrees to pay (i) allreasonable out-of-pocket expenses incurred by the Administrative Agent, theCollateral Agent, CGMI and their Affiliates, including the reasonable fees,charges and disbursements of Cahill Gordon & Reindel LLP,counsel for the Administrative Agent, in connection with the syndication of thecredit facilities provided for herein, the preparation and administration ofthis Agreement and the other Loan Documents or in connection with any amendments,modifications or waivers of the provisions hereof or thereof (whether or notthe transactions hereby contemplated shall be consummated), (ii) allreasonable out-of-pocket expenses incurred by the Issuing Bank in connectionwith the issuance, amendment, renewal or extension of any Letter of Credit orany demand for payment thereunder and (iii) all reasonable out-of-pocketexpenses incurred by the Lead Arranger, the Administrative Agent, theCollateral Agent, the Issuing Bank or any Lender in connection with theenforcement or protection of its rights in connection with this Agreement(including its rights under this Section), the other Loan Documents or theLoans made or Letters of Credit issued hereunder, including all suchout-of-pocket expenses incurred during any workout, restructuring ornegotiations in respect of such Loans or Letters of Credit, and, in connectionwith any such enforcement or protection, the fees, charges and disbursements ofany other counsel for the Administrative Agent, the Collateral Agent, the LeadArranger, the Issuing Bank or any Lender; provided, however, thatthe Borrower

 

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shall not be obligated to payfor expenses incurred by a Lender in connection with the assignment of Loans toan assignee Lender (except pursuant to Section 2.20) or the sale of Loansto a participant pursuant to Section 9.04.

 

### (b)           The Borrower agrees toindemnify the Administrative Agent, the Collateral Agent, the SyndicationAgent, the Documentation Agent, the Lead Arranger, the Issuing Bank, eachLender, each Affiliate of any of the foregoing Persons and each of theirrespective Related Parties (each such Person being called an “Indemnitee”)against, and to hold each Indemnitee harmless from, any and all losses, claims,damages, liabilities and related reasonable expenses, including reasonablecounsel fees, charges and disbursements, incurred by or asserted against anyIndemnitee arising out of, in any way connected with, or as a result of(i) the execution or delivery of this Agreement or any other Loan Documentor any agreement or instrument contemplated thereby, the performance by theparties hereto or thereto of their respective obligations thereunder or theconsummation of the Transactions and the other transactions contemplatedthereby, (ii) the use of the proceeds of the Loans or Letters of Credit(including any refusal by the Issuing Bank to honor a demand for payment undera Letter of Credit if the documents presented in connection with such demand donot strictly comply with the terms of such Letter of Credit), (iii) anyclaim, litigation, investigation or proceeding relating to any of theforegoing, whether or not any Indemnitee is a party thereto, or (iv) anyactual or alleged presence or Release of Hazardous Materials at, on, under orfrom any property owned or operated by the Borrower or any of the Subsidiaries,or any Environmental Liability or Environmental Claim related in any way to theBorrower or the Subsidiaries; provided that such indemnity shall not, asto any Indemnitee, be available to the extent that such losses, claims,damages, liabilities or related reasonable expenses are finally judicially determinedto have arisen by reason of the Indemnitee’s gross negligence or willfulmisconduct.

###  

### (c)           To the extent that theBorrower fails to promptly pay any amount to be paid by it to any Agent, theLead Arranger, the Issuing Bank or the Swingline Lender underparagraph (a) or (b) of this Section, each Lender severally agrees to payto such Agent, the Lead Arranger, the Issuing Bank or the Swingline Lender, asthe case may be, such Lender’s pro ratashare (determined as of the time that the applicable unreimbursed expense orindemnity payment is sought) of such unpaid amount (other than syndicationexpenses); provided that the unreimbursed expense or indemnified loss,claim, damage, liability or related expense, as the case may be, was incurredby or asserted against the applicable Agent, the Lead Arranger, the IssuingBank or the Swingline Lender in its capacity as such; provided further,however, that to the extent any Issuing Bank or Swingline Lender is entitled toindemnification under this Section 9.05, to the extent such indemnificationrelates solely to such Issuing Bank’s or such Swingline Lender’s acting in suchcapacity the indemnification provided for in this Section 9.05 will be theobligation solely of the Revolving Lenders. For purposes hereof, a Lender’s “pro rata share” shall be determined based uponits share of the sum of the total Revolving Credit Exposures, outstanding TermLoans and unused Commitments at the time.

###  

### (d)           To the extent permittedby applicable law, the Borrower shall not assert, and hereby waives, any claimagainst any Indemnitee, on any theory of liability, for special, indirect, consequentialor punitive damages (as opposed to direct or actual damages) arising out of, inconnection with, or as a result of, this Agreement, any other Loan Document orany other agreement or instrument contemplated hereby, the Transactions, anyLoan or Letter of Credit or the use of the proceeds thereof.

###  

### (e)           The provisions of thisSection 9.05 shall remain operative and in full force and effect regardless ofthe expiration of the term of this Agreement, the consummation of thetransactions contemplated hereby, the repayment of any of the Loans, theexpiration of the Commitments, the invalidity or unenforceability of any termor provision of this Agreement or any other Loan Document, or any

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### investigationmade by or on behalf of the Administrative Agent or any Lender. All amounts dueunder this Section 9.05 shall be payable on written demand therefor.

###  

SECTION 9.06.              Rightof Setoff.  If an Event of Default orEvent of Termination shall have occurred and be continuing, each Lender ishereby authorized at any time and from time to time, to the fullest extentpermitted by law, to set off and apply any and all deposits (general or special,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 of anyLoan Party against any of and all the obligations of such Loan Party now orhereafter existing under this Agreement and other Loan Documents held by suchLender, irrespective of whether or not such Lender shall have made any demandunder this Agreement or such other Loan Document and although such obligationsmay be unmatured. In connection with exercising its rights pursuant to theprevious sentence, a Lender may at any time use any Loan Party’s creditbalances with the Lender to purchase at the Lender’s applicable spot rate ofexchange any other currency or currencies which the Lender considers necessaryto reduce or discharge any amount due by such Loan Party to the Lender, and mayapply that currency or those currencies in or towards payment of those amounts.The rights of each Lender under this Section are in addition to otherrights and remedies (including other rights of setoff) which such Lender mayhave. Each Lender agrees promptly to notify the Borrower and the AdministrativeAgent after making any such setoff.

 

SECTION 9.07.              ApplicableLaw.  THIS AGREEMENT AND THE OTHERLOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS)SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OFNEW YORK.

 

SECTION 9.08.              Waivers;Amendment.  (a)  No failure or delay of any Agent, the IssuingBank or any Lender in exercising any power or right hereunder or under any LoanDocument shall operate as a waiver thereof, nor shall any single or partialexercise of any such right or power, or any abandonment or discontinuance ofsteps to enforce such a right or power, preclude any other or further exercisethereof or the exercise of any other right or power. The rights and remedies ofthe Agents, the Issuing Bank and the Lenders hereunder and under the other LoanDocuments are cumulative and are not exclusive of any rights or remedies whichthey would otherwise have. No waiver of any provision of this Agreement or anyother Loan Document or consent to any departure by the Borrower therefrom shallin any event be effective unless the same shall be permitted byparagraph (b) below, and then such waiver or consent shall be effectiveonly in the specific instance and for the purpose for which given. Without limitingthe generality of the foregoing, the making of a Loan or issuance of a Letterof Credit shall not be construed as a waiver of any Default or Event of Defaultregardless of whether an Agent, any Lender or the Issuing Bank may have hadnotice or knowledge of such Default or Event of Default at the time. No noticeor demand on the Borrower in any case shall entitle the Borrower to any otheror further notice or demand in similar or other circumstances.

 

### (b)           Subject to Sections9.08(c) and 9.08(d) no amendment, modification, termination or waiver of anyprovision of any Loan Document, or consent to any departure by any Loan Partytherefrom, shall in any event be effective without the written concurrence ofthe Requisite Lenders.

###  

### (c)           Without the writtenconsent of each Lender that would be directly adversely affected thereby (whoseconsent shall be sufficient therefor without the consent of the RequisiteLenders), no amendment, modification, termination, waiver or consent shall beeffective if the effect thereof would:

###  

#### (i)            extendthe scheduled final maturity of any Loan or Note;

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#### (ii)           extendthe stated expiration date of any Letter of Credit beyond the Revolving CreditMaturity Date;

####  

#### (iii)          reduceor forgive the rate of interest on any Loan (other than any waiver of anyincrease in the interest rate applicable to any Loan pursuant to Section 2.08)or any fee payable hereunder, it being understood that any amendment or modificationto the financial definitions in this Agreement shall not constitute a reductionin the rate of interest for purposes of this clause (iii);

####  

#### (iv)          extendthe time for payment of any such interest or fees;

####  

#### (v)           reduceor forgive the principal amount of any Loan or any reimbursement obligation inrespect of any Letter of Credit or waive, reduce or postpone any scheduledrepayment pursuant to Section 2.05(d);

####  

#### (vi)          amend,modify, terminate or waive any provision of Section 9.08 (except for technicalamendments with respect to additional extensions of credit pursuant to thisAgreement consented to by the Requisite Lenders which afford the protections tosuch additional extensions of credit of the type provided to the RevolvingCredit Commitments and/or the relevant Class of Term Loans on the EffectiveDate);

####  

#### (vii)         amendthe definition of “Requisite Lenders” or “Pro Rata Percentage”; provided,with the consent of the Requisite Lenders, additional extensions of creditpursuant hereto may be included in the determination of “Requisite Lenders” or “ProRata Percentage” on substantially the same basis as the Revolving CreditCommitments, Revolving Loans, Term Commitments and/or Term Loans are includedon the Effective Date;

####  

#### (viii)        exceptas expressly provided in the Loan Documents, release all or substantially allof the Collateral or all or substantially all of the Subsidiary Loan Partiesfrom the Guarantee or subordinate the Liens under any Security Document;

####  

#### (ix)           consentto the assignment or transfer by any Loan Party of any of its rights and obligationsunder any Loan Document;

####  

#### (x)            waive,amend or modify the provisions of Section 9.08(g); or

####  

#### (xi)           amendthe indemnification obligations of the Lenders set forth in Section 9.05(c) oramend Sections 2.02(c), 2.02(d), 2.13(a) or 2.19 (only to the extent relatingto pro rata treatment of Lenders).

####  

### (d)           Subject to Section9.08(e), no amendment, modification, termination, waiver or consent withrespect to any provision of the Loan Documents, or consent to any departure byany Loan Party therefrom, shall:

###  

#### (i)            increaseany Commitment of any Lender over the amount thereof then in effect without theconsent of such Lender; provided no amendment, modification,termination, waiver or consent with respect to any condition precedent, covenant,Default or Event of Default shall constitute an increase in any Commitment ofany Lender;

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####  

#### (ii)           amend,modify, terminate or waive any provision hereof relating to the SwinglineSublimit or the Swingline Loans without the consent of Swingline Lender;

####  

#### (iii)          amendthe definition of “Requisite Class Lenders” without the consent of RequisiteClass Lenders of each Class; provided, with the consent of the RequisiteLenders, additional extensions of credit pursuant hereto may be included in thedetermination of such “Requisite Class Lenders” on substantially the same basisas the Revolving Credit Commitments, Revolving Loans, Term Commitments and/orTerm Loans are included on the Effective Date;

####  

#### (iv)          alterthe required application of any repayments or prepayments as between Classespursuant to Section 2.05 or Section 2.11 without the consent of Requisite ClassLenders of each Class, in any case which is being allocated a differentrepayment or prepayment as a result thereof; provided the RequisiteLenders may waive, in whole or in part, any prepayment so long as theapplication, as between Classes, of any portion of such prepayment is stillrequired to be made is not altered and, if additional extensions of term creditunder this Agreement consented to by the Requisite Lenders are made, such newterm loans may be included on a prorata basis in the variousprepayments required pursuant to Section 2.05 subject to the ordering ofprepayments set forth in 2.05(e);

####  

#### (v)           amend,modify, terminate or waive any obligation of the Revolving Lenders relating tothe issuance of or purchase of participations in Letters of Credit without thewritten consent of Administrative Agent and of Issuing Bank;

####  

#### (vi)          amend,modify, terminate or waive any provision of Section 8 as the same applies toany Agent, or any other provision hereof as the same applies to the rights orobligations of any Agent, in each case without the consent of such Agent;

####  

#### (vii)         amend,modify, terminate or waive any provision of any Loan Document specifying thenumber or percentage of Lenders (or Lenders of any Class) required to waive,amend or modify any rights thereunder or make any determination to grant anyconsent thereunder without the written consent of each Lender (or each Lenderof such Class, as the case may be);

####  

#### (viii)        expresslyamend, modify, supplement or waive any condition precedent in Section 4.02 toany Revolving Credit Borrowing without the written consent of the Requisite RevolvingLenders; or

####  

#### (ix)           increasethe maximum duration of Interest Periods hereunder without the consent of allLenders.

####  

### (e)           If, in connection withany proposed change, waiver, discharge or termination of or to any of theprovisions of this Agreement (other than as contemplated by Section 9.08(c)(i),(iv) and (v) above), the consent of the Requisite Lenders is obtained but theconsent of one or more of such other Lenders whose consent is required is notobtained, then the Borrower shall have the right, so long as all Non-ConsentingLenders whose individual consent is required are treated as described in eitherclause (i) or (ii) below, to either (i) replace each such Non-ConsentingLender or Lenders (or, at the option of the Borrower if the respective Lender’sconsent is required with respect to less than all Classes of Loans (or relatedCommitments), to replace only the Commitments and/or Loans of the respectiveNon-Consenting Lender that gave rise to the need to obtain such Lender’sindividual consent) with one or more assignees

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### pursuant to,and with the effect of an assignment under, Section 2.20 so long as at the timeof such replacement, each such assignee consents to the proposed change,waiver, discharge or termination or (ii) terminate such Non-ConsentingLender’s Commitment (if such Lender’s consent is required as a result of itsCommitment) and/or repay each Class of outstanding Loans of such Lender thatgave rise to the need to obtain such Lender’s consent and/or cash collateralizeits LC Exposure in accordance with this Agreement; provided that,unless the Commitments that are terminated and Loans that are repaid pursuantto the preceding clause (ii) are immediately replaced in full at such time throughthe addition of new Lenders or the increase of the Commitments and/or outstandingLoans of existing Lenders (who in each case must specifically consent thereto),then in the case of any action pursuant to the preceding clause (ii), theRequisite Lenders (determined after giving effect to the proposed action) shallspecifically consent thereto. In addition, any waiver, amendment ormodification of this Agreement that by its terms affects the rights or dutiesunder this Agreement of any Class of Lenders (but not any other Class of Lenders)may be effected by an agreement or agreements in writing entered into by theBorrower and the requisite percentage in interest of the affected Class ofLenders that would be required to consent thereto under this Section 9.08 ifsuch Class of Lenders were the only Class of Lenders hereunder at the time.

###  

### (f)            Without the consent ofany other Person, the Loan Parties and the Administrative Agent and/orCollateral Agent may (in their respective sole discretion, or shall, to theextent required by any Loan Document) enter into any amendment, modification orwaiver of any Loan Document, or enter into any new agreement or instrument, toeffect the granting, perfection, protection, expansion or enhancement of anysecurity interest in any Collateral or additional property to become Collateralfor the benefit of the Secured Parties, or as required by local law to giveeffect to, or protect any security interest for the benefit of the Secured Parties,in any property or so that the security interests therein comply withapplicable law.

###  

### (g)           Notwithstandinganything in Section 9.08 to the contrary, this Agreement and the other LoanDocuments may be amended at any time, and from time to time, after the ClosingDate to increase the aggregate Revolving Credit Commitments and/or to establishadditional Term Loans under this Agreement, at the discretion of the Borrowerand the Lead Arranger (the “Greenshoe Option”), by an agreement inwriting entered into by the Borrower, the Administrative Agent, the CollateralAgent, the Lead Arranger and each Person (including any Lender) that shallagree to provide such Commitment and/or make a Term Loan (and each such Personthat shall not already be a Lender shall, at the time such agreement becomes effective,become a Lender with the same effect as if it had originally been a Lenderunder this Agreement with the Commitment and/or Term Loans set forth in suchagreement); providedthat (i) the aggregate principal amount of the additional Term Loans and thenew Revolving Credit Commitments established pursuant to this paragraph shallnot exceed $100,000,000 in the aggregate or a lesser amount in integralmultiples of $10.0 million, (ii) no Default or Event of Default shall have occurred and be continuing at the time ofsuch increase, (iii) after giving effect to such increase, the Borrower shallbe in compliance with the Financial Covenants, (iv) no Commitment of any Lendershall be increased without the consent of such Lender and (v) if theTerm Loans are increased pursuant to the Greenshoe Option, the remainingscheduled payments set forth in Section 2.05(d) shall be increased pro rata andthe maturity of such additional Term Loans shall not be any earlier than thethen existing Term Loans and (vi) any such additional Term Loans shall beentitled to share in any mandatory or optional prepayments ratably (and notmore than ratably) with then existing Term Loans (although any additional TermLoans may be created as a separate tranche). The Loans and Commitmentsestablished pursuant to this paragraph shall constitute Loans and Commitmentsunder, and shall be entitled to all the benefits afforded by, this Agreementand the other Loan Documents, and shall, without limiting the foregoing,benefit equally and ratably from the Guarantees and security interests createdby the Security Documents.

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SECTION 9.09.              InterestRate Limitation.  Notwithstandinganything herein to the contrary, if at any time the interest rate applicable toany Loan, together with all fees, charges and other amounts which are treatedas interest on such Loan under applicable law (collectively, the “Charges”),shall exceed the maximum lawful rate (the “Maximum Rate”) which may becontracted for, charged, taken, received or reserved by the Lender holding suchLoan or participation in accordance with applicable law, the rate of interestpayable in respect of such Loan or participation hereunder, together with allCharges payable in respect thereof, shall be limited to the Maximum Rate and,to the extent lawful, the interest and Charges that would have been payable inrespect of such Loan or participation but were not payable as a result of theoperation of this Section shall be cumulated and the interest and Chargespayable to such Lender in respect of other Loans or participations or periodsshall 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.              EntireAgreement.  This Agreement and theother Loan Documents constitute the entire contract between the partiesrelative to the subject matter hereof. Any previous agreement among the partieswith respect to the subject matter hereof is superseded by this Agreement andthe other Loan Documents; provided that any letter agreement relating tothe subject matter hereof between the Borrower and a Lender shall remaineffective in accordance with its terms. Nothing in this Agreement or in theother Loan Documents, expressed or implied, is intended to confer upon anyparty other than the parties hereto and thereto any rights, remedies, obligationsor liabilities under or by reason of this Agreement or the other LoanDocuments.

 

SECTION 9.11.              WAIVEROF JURY TRIAL.  EACH PARTY HERETOHEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT ITMAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDEROR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACHPARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OFANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTYWOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TOENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

 

SECTION 9.12.              Severability.  In the event any one or more of theprovisions contained in this Agreement or in any other Loan Document should beheld invalid, illegal or unenforceable in any respect, the validity, legalityand enforceability of the remaining provisions contained herein and thereinshall not in any way be affected or impaired thereby. 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. This Agreement may be executed incounterparts (and by different parties hereto on different counterparts), eachof which shall constitute an original but all of which when taken togethershall constitute a single contract, and shall become effective as provided inSection 9.03. Delivery of an executed signature page to this Agreement by facsimiletransmission shall be as effective as delivery of a manually signed counterpartof this Agreement.

 

SECTION 9.14.              Headings. Article and Section headingsand the Table of Contents used herein are for convenience of reference only,are not part of this Agreement and are not to affect the construction of, or tobe taken into consideration in interpreting, this Agreement.

 

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SECTION 9.15.              Jurisdiction;Consent to Service of Process.  (a)  The Borrower hereby irrevocably and unconditionallysubmits, for itself and its property, to the nonexclusive jurisdiction of anyNew York State court or Federal court of the United States of Americasitting in New York City, and any appellate court from any thereof, in anyaction or proceeding arising out of or relating to this Agreement or the otherLoan Documents, or for recognition or enforcement of any judgment, and each ofthe parties hereto hereby irrevocably and unconditionally agrees that allclaims in respect of any such action or proceeding may be heard and determinedin such New York State or, to the extent permitted by law, in such Federalcourt. Each of the parties hereto agrees that a final judgment in any suchaction or proceeding shall be conclusive and may be enforced in otherjurisdictions by suit on the judgment or in any other manner provided by law. Nothingin this Agreement shall affect any right that the Administrative Agent, theCollateral Agent, the Issuing Bank or any Lender may otherwise have to bringany action or proceeding relating to this Agreement or the other Loan Documentsagainst the Borrower or its properties in the courts of any jurisdiction.

 

### (b)           The Borrower herebyirrevocably and unconditionally waives, to the fullest extent it may legallyand effectively do so, any objection which it may now or hereafter have to thelaying of venue of any suit, action or proceeding arising out of or relating tothis Agreement or the other Loan Documents in any New York State orFederal court referred to in paragraph (a) of this Section. Each of theparties hereto hereby irrevocably waives, to the fullest extent permitted bylaw, the defense of an inconvenient forum to the maintenance of such action orproceeding 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 or any other Loan Documentwill affect the right of any party to this Agreement to serve process in anyother manner permitted by law.

###  

SECTION 9.16.              Confidentiality. No Agent or any Lender may disclose toany Person any confidential, proprietary or non-public information of the LoanParties furnished to the Agents or the Lenders by the Loan Parties (suchinformation being referred to collectively herein as the “Loan PartyInformation”), except that each of the Agents and the Lenders may discloseLoan Party Information (i) to its and its Affiliates’ employees, officers,directors, agents, accountants, attorneys, trustees and other advisors (itbeing understood that the Persons to whom such disclosure is made will beinformed of the confidential nature of such Loan Party Information andinstructed to keep such Loan Party Information confidential on substantiallythe same terms as provided herein), (ii) to the extent requested by anyregulatory authority, (iii) to the extent required by applicable laws orregulations or by any subpoena or similar legal process, (iv) to any otherparty to this Agreement, (v) in connection with the exercise of anyremedies hereunder or under any other Loan Document or any suit, action orproceeding relating to this Agreement or any other Loan Document or theenforcement of rights hereunder or thereunder, (vi) subject to anagreement containing provisions substantially the same as those of this Section9.16, to any assignee of or Participant in, or any prospective assignee of orParticipant in, any of its rights or obligations under this Agreement, (vii) tothe extent such Loan Party Information (A) is or becomes generally available tothe public on a nonconfidential basis other than as a result of a breach ofthis Section 9.16 by such Agent or such Lender, or (B) is or becomes availableto such Agent or such Lender on a nonconfidential basis from a source otherthan the Loan Parties and (viii) with the consent of the Loan Parties. Nothingin this provision shall imply that any party has waived any privilege it mayhave with respect to advice it has received.

 

SECTION 9.17.              CitigroupDirect Website Communications.

 

### (a)           Delivery.(i)  Each Loan Party hereby agrees thatit will provide to the Administrative Agent all information, documents andother materials that it is obligated to furnish to the Administrative Agentpursuant to this Agreement and any other Loan Document, including, without limitation,all 

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### 98

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### notices, requests, financial statements, financial and other reports,certificates and other information materials, but excluding any such communicationthat (A) relates to a request for a new, or a conversion of an existing,Borrowing or other extension of credit (including any election of an interestrate or interest period relating thereto), (B) relates to the payment ofany principal or other amount due under this Agreement prior to the scheduleddate therefor, (C) provides notice of any Default or Event of Defaultunder this Agreement or (D) is required to be delivered to satisfy anycondition precedent to the effectiveness of this Agreement and/or any borrowingor other extension of credit hereunder (all such non-excluded communicationscollectively, the “Communications”), by transmitting the Communicationsin an electronic/soft medium in a format reasonably acceptable to theAdministrative Agent to oploanswebadmin@citigroup.com. In addition, each LoanParty agrees to continue to provide the Communications to the AdministrativeAgent in the manner specified in this Agreement or any other Loan Document butonly to the extent reasonably requested by the Administrative Agent. Nothing inthis Section 9.17 shall prejudice the right of the Agents, Syndication Agent,the Documentation Agent, the Lead Arranger or any Lender or any Loan Party togive any notice or other communication pursuant to this Agreement or any other LoanDocument in any other manner specified in this Agreement or any other LoanDocument.

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(ii)             TheAdministrative Agent agrees that receipt of the Communications by theAdministrative Agent at its e-mail address set forth above shall constituteeffective delivery of the Communications to the Administrative Agent forpurposes of the Loan Documents. Each Lender agrees that notice to it (as providedin the next sentence) specifying that the Communications have been posted tothe Platform (as defined below) shall constitute effective delivery of theCommunications to such Lender for purposes of the Loan Documents. Each Lenderagrees (A) to notify the Administrative Agent in writing (including byelectronic communication) from time to time of such Lender’s e-mail address towhich the foregoing notice may be sent by electronic transmission and(B) that the foregoing notice may be sent to such e-mail address.

 

### (b)           Posting. EachLoan Party further agrees that the Administrative Agent may make theCommunications available to the Lenders by posting the Communications onIntralinks or a substantially similar electronic transmission system (the “Platform”).

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### (c)           The Platform isprovided “as is” and “as available.”  TheAgent Parties (as defined below) do not warrant the accuracy or completeness ofthe Communications, or the adequacy of the Platform and expressly disclaimliability for errors or omissions in the communications. No warranty of anykind, express, implied or statutory, including, without limitation, any warrantyof merchantability, fitness for a particular purpose, non-infringement of thirdparty rights or freedom from viruses or other code defects, is made by anyAgent Party (as defined below) in connection with the Communications or thePlatform. In no event shall the Administrative Agent or any of its affiliatesor any of their respective officers, directors, employees, agents advisors orrepresentatives (collectively, “Agent Parties”) have any liability tothe Loan Parties, any Lender or any other person or entity for damages of anykind, including, without limitation, direct or indirect, special, incidental orconsequential damages, losses or expenses (whether in tort, contract orotherwise) arising out of any Loan Party’s or the Administrative Agent’s transmissionof communications through the internet, except to the extent the liability ofany Agent Party is found in a final non-appealable judgment by a court ofcompetent jurisdiction to have resulted from such Agent Party’s grossnegligence or willful misconduct.

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[SignaturePages Follow]

 

99

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beduly executed by their respective authorized officers as of the day and yearfirst above written.

 
|   | POLYMER  GROUP, INC., |
|--------|-----------------------|
|   | as  Borrower          |
|   |                  |
|   |                  |
|   | By:                   |   |
|   |                  | Name: |
|   |                  | Title: |

 

S-1

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|   | CITICORP NORTH AMERICA,  INC.,                 |
|--------|------------------------------------------------|
|   | as  Administrative Agent, Documentation Agent, |
|   | Collateral  Agent and Syndication Agent        |
|   |                                           |
|   |                                           |
|   | By:                                            |   |
|   |                                           | Name: |
|   |                                           | Title: |

 

S-2

----

 
|   | CITIGROUP GLOBAL MARKETS  INC., |
|--------|---------------------------------|
|   | as  Lead Arranger               |
|   |                            |
|   |                            |
|   | By:                             |   |
|   |                            | Name: |
|   |                            | Title |

 

S-3

----

 
|   | [LENDER], as Lender |
|--------|---------------------|
|   |                |
|   |                |
|   | By:                 |   |
|   |                | Name: |
|   |                | Title: |

 

S-4

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