Document:

exv4w1

 

EXECUTION COPY

$325,000,000

CREDIT AGREEMENT

among

NCI BUILDING SYSTEMS, INC.,

as Borrower,

ITS DOMESTIC SUBSIDIARIES

FROM TIME TO TIME PARTIES HERETO,

as Guarantors,

THE LENDERS PARTIES HERETO,

BANK OF AMERICA, N.A.,

as Syndication Agent

and

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent

Dated as of June 18, 2004

WACHOVIA CAPITAL MARKETS, LLC

and

BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arrangers and Joint Book Runners

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page

	ARTICLE I DEFINITIONS
	 	 	1	 
	Section 1.1. Defined Terms
	 	 	1	 
	Section 1.2. Other Definitional Provisions
	 	 	27	 
	Section 1.3. Accounting Terms
	 	 	27	 
	Section 1.4. Time References
	 	 	28	 
	ARTICLE II THE LOANS; AMOUNT AND TERMS
	 	 	28	 
	Section 2.1. Revolving Loans
	 	 	28	 
	Section 2.2. Tranche B Term Loan
	 	 	30	 
	Section 2.3. Letter of Credit Subfacility
	 	 	32	 
	Section 2.4. Swingline Loan Subfacility
	 	 	36	 
	Section 2.5. Incremental Facility
	 	 	38	 
	Section 2.6. Fees
	 	 	38	 
	Section 2.7. Commitment Reductions
	 	 	40	 
	Section 2.8. Prepayments
	 	 	40	 
	Section 2.9. Default Rate and Payment Dates
	 	 	43	 
	Section 2.10. Conversion Options
	 	 	44	 
	Section 2.11. Computation of Interest and Fees
	 	 	44	 
	Section 2.12. Pro Rata Treatment and Payments
	 	 	45	 
	Section 2.13. Non-Receipt of Funds by the Administrative Agent
	 	 	47	 
	Section 2.14. Inability to Determine Interest Rate
	 	 	48	 
	Section 2.15. Illegality
	 	 	49	 
	Section 2.16. Requirements of Law
	 	 	49	 
	Section 2.17. Indemnity
	 	 	51	 

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	 	 	Page

	Section 2.18. Taxes
	 	 	51	 
	Section 2.19. Indemnification; Nature of Issuing Lender’s Duties
	 	 	53	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	54	 
	Section 3.1. Financial Condition
	 	 	55	 
	Section 3.2. No Change
	 	 	55	 
	Section 3.3. Corporate Existence
	 	 	55	 
	Section 3.4. Corporate Power; Authorization; Enforceable Obligations
	 	 	56	 
	Section 3.5. Compliance with Laws; No Conflict; No Default
	 	 	56	 
	Section 3.6. No Material Litigation
	 	 	57	 
	Section 3.7. Investment Company Act; PUHCA
	 	 	57	 
	Section 3.8. Margin Regulations
	 	 	57	 
	Section 3.9. ERISA
	 	 	58	 
	Section 3.10. Environmental Matters
	 	 	58	 
	Section 3.11. Use of Proceeds
	 	 	58	 
	Section 3.12. Subsidiaries
	 	 	58	 
	Section 3.13. Ownership
	 	 	59	 
	Section 3.14. Indebtedness
	 	 	59	 
	Section 3.15. Taxes
	 	 	59	 
	Section 3.16. Intellectual Property Rights
	 	 	59	 
	Section 3.17. Solvency
	 	 	60	 
	Section 3.18. Investments
	 	 	60	 
	Section 3.19. Location of Collateral
	 	 	60	 
	Section 3.20. No Burdensome Restrictions
	 	 	61	 
	Section 3.21. Brokers’ Fees
	 	 	61	 
	Section 3.22. Labor Matters
	 	 	61	 

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	Section 3.23. Accuracy and Completeness of Information
	 	 	61	 
	Section 3.24. Material Contracts
	 	 	61	 
	Section 3.25. Insurance
	 	 	62	 
	Section 3.26. Security Documents
	 	 	62	 
	Section 3.27. Classification of Senior Indebtedness
	 	 	62	 
	Section 3.28. Foreign Assets Control Regulations, Etc.
	 	 	62	 
	ARTICLE IV CONDITIONS PRECEDENT
	 	 	62	 
	Section 4.1. Conditions to Closing Date
	 	 	62	 
	Section 4.2. Conditions to All Extensions of Credit
	 	 	67	 
	Section 4.3. Conditions to Funding of Tranche B Term Loan
	 	 	68	 
	ARTICLE V AFFIRMATIVE COVENANTS
	 	 	69	 
	Section 5.1. Financial Statements
	 	 	69	 
	Section 5.2. Certificates; Other Information
	 	 	70	 
	Section 5.3. Payment of Taxes and Other Obligations
	 	 	71	 
	Section 5.4. Conduct of Business and Maintenance of Existence
	 	 	72	 
	Section 5.5. Maintenance of Property; Insurance
	 	 	72	 
	Section 5.6. Inspection of Property; Books and Records; Discussions
	 	 	73	 
	Section 5.7. Notices
	 	 	73	 
	Section 5.8. Environmental Laws
	 	 	74	 
	Section 5.9. Financial Covenants
	 	 	74	 
	Section 5.10. Additional Guarantors
	 	 	75	 
	Section 5.11. Compliance with Law
	 	 	76	 
	Section 5.12. Pledged Assets
	 	 	76	 
	Section 5.13. Covenants Regarding Patents, Trademarks and Copyrights
	 	 	77	 
	Section 5.14. Further Assurances
	 	 	78	 

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	ARTICLE VI NEGATIVE COVENANTS
	 	 	78	 
	Section 6.1. Indebtedness
	 	 	79	 
	Section 6.2. Liens
	 	 	79	 
	Section 6.3. Guaranty Obligations
	 	 	80	 
	Section 6.4. Nature of Business
	 	 	80	 
	Section 6.5. Consolidation, Merger, Sale or Purchase of Assets, etc.
	 	 	80	 
	Section 6.6. Advances, Investments and Loans
	 	 	82	 
	Section 6.7. Transactions with Affiliates
	 	 	82	 
	Section 6.8. Ownership of Subsidiaries; Restrictions
	 	 	82	 
	Section 6.9. Fiscal Year; Organizational Documents; Subordinated Debt Documents
	 	 	82	 
	Section 6.10. Limitation on Restricted Actions
	 	 	82	 
	Section 6.11. Restricted Payments
	 	 	83	 
	Section 6.12. No Further Negative Pledges
	 	 	83	 
	ARTICLE VII EVENTS OF DEFAULT
	 	 	83	 
	Section 7.1. Events of Default
	 	 	84	 
	Section 7.2. Acceleration; Remedies
	 	 	86	 
	ARTICLE VIII THE ADMINISTRATIVE AGENT
	 	 	87	 
	Section 8.1. Appointment
	 	 	87	 
	Section 8.2. Delegation of Duties
	 	 	87	 
	Section 8.3. Exculpatory Provisions
	 	 	87	 
	Section 8.4. Reliance by Administrative Agent
	 	 	88	 
	Section 8.5. Notice of Default
	 	 	88	 
	Section 8.6. Non-Reliance on Administrative Agent and Other Lenders
	 	 	89	 
	Section 8.7. Indemnification
	 	 	89	 
	Section 8.8. The Administrative Agent in Its Individual Capacity
	 	 	90	 

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	 	 	Page

	Section 8.9. Successor Administrative Agent
	 	 	90	 
	Section 8.10. Other Agents
	 	 	90	 
	ARTICLE IX MISCELLANEOUS
	 	 	91	 
	Section 9.1. Amendments, Waivers and Release of Collateral
	 	 	91	 
	Section 9.2. Notices
	 	 	93	 
	Section 9.3. No Waiver; Cumulative Remedies
	 	 	94	 
	Section 9.4. Survival of Representations and Warranties
	 	 	94	 
	Section 9.5. Payment of Expenses and Taxes
	 	 	94	 
	Section 9.6. Successors and Assigns; Participations; Purchasing Lenders
	 	 	95	 
	Section 9.7. Adjustments; Set-off
	 	 	98	 
	Section 9.8. Table of Contents and Section Headings
	 	 	99	 
	Section 9.9. Counterparts
	 	 	100	 
	Section 9.10. Integration; Effectiveness; Continuing Agreement
	 	 	100	 
	Section 9.11. Severability
	 	 	101	 
	Section 9.12. Governing Law
	 	 	101	 
	Section 9.13. Consent to Jurisdiction and Service of Process
	 	 	101	 
	Section 9.14. Arbitration
	 	 	101	 
	Section 9.15. Confidentiality
	 	 	103	 
	Section 9.16. Acknowledgments
	 	 	103	 
	Section 9.17. Waivers of Jury Trial; Waiver of Consequential Damages
	 	 	104	 
	Section 9.18. Patriot Act Notice
	 	 	104	 
	ARTICLE X GUARANTY
	 	 	104	 
	Section 10.1. The Guaranty
	 	 	104	 
	Section 10.2. Bankruptcy
	 	 	105	 
	Section 10.3. Nature of Liability
	 	 	105	 

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	Section 10.4. Independent Obligation
	 	 	106	 
	Section 10.5. Authorization
	 	 	106	 
	Section 10.6. Reliance
	 	 	106	 
	Section 10.7. Waiver
	 	 	106	 
	Section 10.8. Limitation on Enforcement
	 	 	107	 
	Section 10.9. Confirmation of Payment
	 	 	108	 

Schedules

	 	 	 
	Schedule 1.1(a)

	 	Account Designation Letter
	Schedule 1.1(b)

	 	Existing Letters of Credit
	Schedule 1.1(c)

	 	Investments
	Schedule 1.1(d)

	 	Liens
	Schedule 2.1(a)

	 	Schedule of Lenders and Commitments
	Schedule 2.1(b)(i)

	 	Form of Notice of Borrowing
	Schedule 2.1(e)

	 	Form of Revolving Note
	Schedule 2.2(d)

	 	Form of Tranche B Term Note
	Schedule 2.4(d)

	 	Form of Swingline Note
	Schedule 2.10

	 	Form of Notice of Conversion/Extension
	Schedule 2.18

	 	Tax Exempt Certificate
	Schedule 3.3

	 	Jurisdictions of Organization and Qualification
	Schedule 3.12

	 	Subsidiaries
	Schedule 3.16

	 	Intellectual Property
	Schedule 3.19(a)

	 	Location of Real Property
	Schedule 3.19(b)

	 	Location of Collateral
	Schedule 3.19(c)

	 	Chief Executive Offices
	Schedule 3.22

	 	Labor Matters
	Schedule 3.24

	 	Material Contracts
	Schedule 3.25

	 	Insurance
	Schedule 4.1(b)

	 	Form of Secretary’s Certificate
	Schedule 4.1(i)

	 	Form of Solvency Certificate
	Schedule 5.2(b)

	 	Form of Officer’s Compliance Certificate
	Schedule 5.10

	 	Form of Joinder Agreement
	Schedule 6.1(b)

	 	Indebtedness
	Schedule 9.2

	 	Lenders’ Lending Offices
	Schedule 9.6(c)

	 	Form of Commitment Transfer Supplement

vi

 

     CREDIT AGREEMENT, dated as of June 18, 2004, among NCI BUILDING SYSTEMS,
INC., a Delaware corporation (the “Borrower”), each of those Domestic
Subsidiaries of the Borrower identified as a “Guarantor” on the signature pages
hereto and such other Domestic Subsidiaries of the Borrower as may from time to
time become a party hereto (collectively the “Guarantors” and individually a
“Guarantor”), the several banks and other financial institutions from time to
time parties to this Credit Agreement (collectively the “Lenders” and
individually a “Lender”), BANK OF AMERICA, N.A., as syndication agent (the
“Syndication Agent”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, as administrative agent for the Lenders hereunder (in such
capacity, the “Administrative Agent” or the “Agent”).

W I T N E S S E T H:

     WHEREAS, the Borrower has requested that the Lenders make loans and other
financial accommodations to the Borrower in an aggregate amount of up to
$325,000,000, as more particularly described herein; and

     WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such
parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1. Defined Terms.

     As used in this Credit Agreement, terms defined in the preamble to this
Credit Agreement have the meanings therein indicated, and the following terms
have the following meanings:

     “ABR Default Rate” shall have the meaning set forth in Section 2.9.

     “Account Designation Letter” shall mean the Notice of Account Designation
Letter dated the Closing Date from the Borrower to the Administrative Agent in
substantially the form attached hereto as Schedule 1.1(a).

     “Additional Credit Party” shall mean each Person that becomes a Guarantor
by execution of a Joinder Agreement in accordance with Section 5.10.

     “Additional Loan” shall have the meaning set forth in Section 2.5.

     “Administrative Agent” shall have the meaning set forth in the first
paragraph of this Credit Agreement and any successors in such capacity.

 

 

     “Affiliate” shall mean as to any Person, any other Person (excluding any
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
a Person shall be deemed to be “controlled by” a Person if such Person
possesses, directly or indirectly, power either (a) to vote 10% or more of the
securities having ordinary voting power for the election of directors of such
Person or (b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.

     “Agents” shall mean the Administrative Agent and the Syndication Agent,
collectively, and “Agent” shall mean either the Administrative Agent or the
Syndication Agent, individually.

     “Agreement” or “Credit Agreement” shall mean this Credit Agreement, as
amended, modified or supplemented from time to time in accordance with its
terms.

     “Alternate Base Rate” shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof: “Prime Rate” shall mean, at any time, the rate of interest per annum
publicly announced or otherwise identified from time to time by Wachovia at its
principal office in Charlotte, North Carolina as its prime rate. The parties
hereto acknowledge that the rate announced publicly by Wachovia as its Prime
Rate is an index or base rate and shall not necessarily be its lowest or best
rate charged to its customers or other banks; and “Federal Funds Effective
Rate” shall mean, for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published on
the next succeeding Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective at the opening of
business on the date of such change.

     “Alternate Base Rate Loans” shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.

     “Applicable Percentage” shall mean, for any day, the rate per annum set
forth below opposite the applicable level then in effect, it being understood
that the Applicable Percentage for (a) Revolving Loans that are LIBOR Rate
Loans shall be the percentage set forth under the column “LIBOR Rate Margin for
Revolving Loans and Letter of Credit Fee”, (b) the Letter of Credit Fee shall
be the percentage set forth under the column “LIBOR Rate Margin for Revolving
Loans and Letter of Credit Fee”, (c) Revolving Loans that are Alternate Base
Rate Loans shall be the percentage set forth under the column “Alternate Base
Rate Margin for

2

 

Revolving Loans”, (d) Tranche B Term Loans that are LIBOR Rate Loans shall
be the percentage set forth under the column “LIBOR Rate Margin for Tranche B
Term Loans”, (e) Tranche B Term Loans that are Alternate Base Rate Loans shall
be the percentage set forth under the column “Alternate Base Rate Margin for
Tranche B Term Loans”, and (f) the Commitment Fee shall be the percentage set
forth under the column “Commitment Fee”:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	LIBOR Rate	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Margin for	 	Alternate	 	 	 	 	 	Alternate	 	 
	 	 	 	 	Revolving	 	Base Rate	 	LIBOR Rate	 	Base Rate	 	 
	 	 	 	 	Loans and	 	Margin for	 	Margin for	 	Margin for	 	 
	 	 	Leverage	 	Letter of	 	Revolving	 	Tranche B	 	Tranche B	 	Commitment
	Level
	 	Ratio
	 	Credit Fee
	 	Loans
	 	Term Loans
	 	Term Loans
	 	Fee

	I	 	> 2.00 to 1.0	 	 	1.25	%	 	 	0.25	%	 	 	2.00	%	 	 	1.00	%	 	 	0.25	%
	II	 	3 2.00 to 1.0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	but < 2.50 to	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	1.0	 	 	1.50	%	 	 	0.50	%	 	 	2.00	%	 	 	1.00	%	 	 	0.375	%
	III	 	3 2.50 to 1.0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	but < 3.00 to	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	1.0	 	 	1.75	%	 	 	0.75	%	 	 	2.00	%	 	 	1.00	%	 	 	0.375	%
	IV	 	3 3.00 to 1.0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	but < 3.50 to	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	1.0	 	 	2.00	%	 	 	1.00	%	 	 	2.00	%	 	 	1.00	%	 	 	0.50	%
	V	 	3 3.50 to 1.0	 	 	2.25	%	 	 	1.25	%	 	 	2.00	%	 	 	1.00	%	 	 	0.50	%

The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the first Business Day after the date on which the Administrative
Agent has received from the Borrower the Compliance Certificate required to be
delivered to the Administrative Agent in accordance with the provisions of
Section 5.2(b) (each an “Interest Determination Date”). Subject to the last
sentence of this definition, such Applicable Percentage shall be effective from
such Interest Determination Date until the next such Interest Determination
Date. Notwithstanding the foregoing, the initial Applicable Percentages shall
be set at Level III until the first Interest Determination Date to occur after
July 31, 2004. If the Borrower shall fail to provide a Compliance Certificate
in accordance with the provisions of Section 5.2(b), the Applicable Percentage
shall, on the date five (5) Business Days after the date by which the Borrower
was so required to provide such Compliance Certificate to the Administrative
Agent, be based on Level V until such time as such information and
certifications are provided, whereupon the Level shall be determined by the
then current Leverage Ratio.

     “Approved Fund” shall mean, with respect to any Lender, any Fund that is
administered or managed by a Lender, an Affiliate of a Lender or an entity or
an Affiliate of an entity that administers or manages a Lender.

     “Arrangers” shall mean Wachovia Capital Markets, LLC and Banc of America
Securities LLC, together with their successors and assigns.

     “Asset Disposition” shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of the Borrower or any Subsidiary
whether by sale, lease, transfer or otherwise. The term “Asset Disposition”
shall not include (a) the sale, lease or transfer of assets permitted by
Section

3

 

6.5(a)(i) – (vii), (b) any Equity Issuance, (c) the sale, lease or transfer of
assets by Building Systems de Mexico, S.A. de C.V. and (d) the lease of assets
by a Credit Party to Building Systems de Mexico, S.A. de C.V.; provided that
such leases comply with the terms set forth in Section 6.5(a)(iv).

     “Attributable Indebtedness” shall mean, on any date, (a) in respect of any
Capital Lease of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP if such lease were accounted for as a Capital Lease.

     “Bank of America” shall mean Bank of America, N.A.

     “Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

     “Bankruptcy Event” shall mean any of the events described in Section
7.1(e).

     “Borrower” shall have the meaning set forth in the first paragraph of this
Credit Agreement.

     “Borrowing Date” shall mean, in respect of any Loan, the date such Loan is
made.

     "Business Day” shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; provided, however, that when used
in connection with a rate determination, borrowing or payment in respect of a
LIBOR Rate Loan, the term “Business Day” shall also exclude any day on which
banks in London, England are not open for dealings in Dollar deposits in the
London interbank market.

     “Capital Lease” shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.

     “Capital Lease Obligations” shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.

     “Capital Stock” shall mean (i) in the case of a corporation, capital stock
(whether voting or nonvoting and whether common or preferred), (ii) in the case
of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, any partnership interests (whether
general or limited) of such partnership, (iv) in the case of a limited
liability company, any membership interests of such company and (v) any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing
Person.

4

 

     “Cash Equivalents” shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition (“Government Obligations”),
(ii) U.S. dollar denominated (or foreign currency fully hedged to U.S. dollar)
time deposits, certificates of deposit, Eurodollar time deposits and Eurodollar
certificates of deposit of (y) any domestic commercial bank of recognized
standing having capital and surplus in excess of $250,000,000 or (z) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof
(any such bank being an “Approved Bank”), in each case with maturities of not
more than 364 days from the date of acquisition, (iii) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by any
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody’s and maturing within six
months of the date of acquisition, (iv) repurchase agreements with a bank or
trust company (including a Lender) or a recognized securities dealer having
capital and surplus in excess of $250,000,000 for direct obligations issued by
or fully guaranteed by the United States of America, (v) obligations of any
State of the United States or any political subdivision thereof for the payment
of the principal and redemption price of and interest on which there shall have
been irrevocably deposited Government Obligations maturing as to principal and
interest at times and in amounts sufficient to provide such payment, (vi)
auction preferred stock rated in the highest short-term credit rating category
by S&P or Moody’s, (vii) readily marketable tax-free municipal bonds of a
domestic issuer rated Aaa by Moody’s, or AAA by S&P, and maturing within one
year from the date of issuance (and investments in mutual funds investing
primarily in those bonds) and (viii) demand deposit accounts maintained in the
ordinary course of business.

     “Change of Control” shall mean the occurrence of any of the following
events: (a) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership, directly or indirectly, or shall have acquired
by contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of control
over, Voting Stock (or other securities convertible into such Voting Stock) or
economic interests of the Borrower representing 20% or more of the combined
voting power of the Voting Stock of the Borrower, or (b) Continuing Directors
shall cease for any reason to constitute a majority of the members of the board
of directors of the Borrower then in office. As used herein, “beneficial
ownership” shall have the meaning provided in Rule 13d-3 of the Securities and
Exchange Commission promulgated under the Securities Exchange Act of 1934.

     “Closing Date” shall mean the date of this Credit Agreement.

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

     “Collateral” shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents and
any other collateral that may from time to time secure the Credit Party
Obligations.

5

 

     “Commitment” shall mean the Revolving Commitment, the LOC Commitment, the
Tranche B Term Loan Commitment and the Swingline Commitment, individually or
collectively, as appropriate.

     “Commitment Fee” shall have the meaning set forth in Section 2.6(a).

     “Commitment Percentage” shall mean the Revolving Commitment Percentage
and/or the Tranche B Term Loan Commitment Percentage, as appropriate.

     “Commitment Period” shall mean (a) with respect to Revolving Loans, the
period from and including the Closing Date to but excluding the Revolving
Commitment Termination Date and (b) with respect to Letters of Credit, the
period from and including the Closing Date to but excluding the date that is 30
days prior to the Revolving Commitment Termination Date.

     “Commitment Transfer Supplement” shall mean a Commitment Transfer
Supplement, in substantially the form of Schedule 9.6(c).

     “Commonly Controlled Entity” shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code.

     “Compliance Certificate” shall have the meaning set forth in Section
5.2(b)

     “Consolidated” means, when used with reference to financial statements or
financial statement items of the Borrower and its Subsidiaries or any other
Person, such statements or items on a consolidated basis in accordance with the
consolidation principles of GAAP.

     “Consolidated Capital Expenditures” shall mean, for any period, the sum of
the aggregate of any expenditures by the Borrower or any Subsidiary during such
period for an asset which will be used in a year or years subsequent to the
year in which the expenditure is made and which asset is properly classifiable
in relevant financial statements of such Person as property, equipment or
improvements, fixed assets, or a similar type of capital asset in accordance
with GAAP, excluding, however, without duplication, (a) any such asset acquired
in a Permitted Acquisition, (b) any such expenditure, or portion thereof, to
the extent funded (i) with the cash proceeds of any Disposition made pursuant
to Section 6.5 or (ii) with the cash proceeds of a Recovery Event, and (c) with
respect to any such expenditure by Building Systems de Mexico, S.A. de C.V.,
(i) the portion thereof, if any, funded with the proceeds of a concurrent loan
or capital contribution by any shareholder of Building Systems de Mexico, S.A.
de C.V. other than Borrower or any Subsidiary of Borrower and (ii) forty-nine
percent (49%) of any such expenditure, or portion thereof, that is funded by
Building Systems de Mexico, S.A. de C.V. other than from the proceeds of
concurrent loans or capital contributions from its shareholders; provided that
the foregoing clause (c) shall be ineffective on and after the date any Credit
Party, individually or in the aggregate, owns more than 51% of the Capital
Stock of Building Systems de Mexico, S.A. de C.V.

6

 

     “Consolidated EBITDA” shall mean, for any period, for the Borrower and its
Subsidiaries, on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income for such period, plus (b) without duplication and to
the extent deducted in determining Consolidated Net Income for any period, (i)
Consolidated Interest Expense for such period, plus (ii) federal, state, local
and foreign income taxes for such period, plus (iii) depreciation and
amortization expenses for such period, plus (iv) non-cash contributions during
such period to 401(k) and other employee benefit plans, plus (v) non-cash
restructuring charges during such period plus (vi) the transaction costs and
expenses incurred in connection with this Credit Agreement plus (vii) the
premium paid with respect to the prepayment of the Senior Subordinated Notes in
an amount not to exceed $5,800,000, plus (viii) the non-cash write-off of the
remaining deferred financing costs related to the Existing Credit Agreement and
the Senior Subordinated Notes in an amount not to exceed $4,100,000; provided,
however, in no event shall the (y) non-cash contributions referred to in
subsection (b)(iv) above exceed $7,500,000 in aggregate amount during any four
consecutive fiscal quarter period and (z) non-cash charges referred to in
subsection (b)(v) above exceed $5,000,000 in an aggregate amount during any
four consecutive fiscal quarter period. Except as otherwise specified, the
applicable period shall be for the four consecutive quarters ending as of the
date of computation.

     “Consolidated Funded Debt” shall mean, on any date of calculation, Funded
Debt of the Borrower and its Subsidiaries on a Consolidated basis.

     “Consolidated Interest Expense” shall mean, for any period, for the
Borrower and its Subsidiaries, on a consolidated basis, total interest expense,
whether paid or accrued (including the interest component of Capital Leases),
including, without limitation, all commitment fees, commissions, discounts and
other fees and charges owed with respect to letters of credit and net costs
under interest rate contracts and foreign exchange contracts, but excluding,
however, amortization of debt issuance costs, all as determined in conformity
with GAAP. Except as otherwise specified, the applicable period shall be for
the four consecutive quarters ending as of the date of computation.

     “Consolidated Net Income” shall mean, for any period, the net income
(excluding extraordinary losses and gains and excluding all non-recurring
non-cash income and non-cash expense, in each case net of taxes as demonstrated
by the Borrower to the Administrative Agent in reasonable detail) of the
Borrower and its Subsidiaries on a Consolidated basis for such period. Except
as otherwise specified, the applicable period shall be for the four consecutive
quarters ending as of the date of computation.

     “Continuing Directors” shall mean the directors of the Borrower on the
Closing Date and each other director, if in each case such other director’s
nomination for election to the Board of Directors of the Borrower is
recommended by a majority of the then Continuing Directors.

     “Contractual Obligation” shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

7

 

     “Copyright Licenses” shall mean any agreement, whether written or oral,
providing for the grant by or to a Person of any right under any Copyright,
including, without limitation, any thereof referred to in Schedule 3.16 to this
Credit Agreement.

     “Copyrights” shall mean all copyrights of the Credit Parties and their
Subsidiaries in all works, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Copyright Office or in any similar
office or agency of the United States, any state thereof or any other country
or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in Schedule 3.16 and all renewals thereof.

     “Credit Documents” shall mean this Credit Agreement, each of the Notes,
any Joinder Agreement, the Letters of Credit, LOC Documents and the Security
Documents.

     “Credit Party” shall mean any of the Borrower and the Guarantors.

     “Credit Party Obligations” shall mean, without duplication, (i) all of the
obligations, indebtedness and liabilities of the Credit Parties to the Lenders
(including the Issuing Lender) and the Administrative Agent, whenever arising,
under this Credit Agreement, the Notes or any of the other Credit Documents,
including principal, interest, fees, reimbursements and indemnification
obligations and other amounts (including, but not limited to, any interest
accruing after the occurrence of a filing of a petition of bankruptcy under the
Bankruptcy Code with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (ii) solely for
purposes of the Security Documents and the Guaranty, all liabilities and
obligations, whenever arising, owing from any Credit Party or any of their
Subsidiaries to any Hedging Agreement Provider arising under any Secured
Hedging Agreement permitted pursuant to Section 6.1(d).

     “Debt Issuance” shall mean the issuance of any Indebtedness for borrowed
money by the Credit Parties or any of their Subsidiaries (excluding (i) any
Equity Issuance, (ii) any Indebtedness the proceeds of which are used as
consideration for a Permitted Acquisition and (iii) any Indebtedness of the
Credit Parties and their Subsidiaries permitted to be incurred pursuant to
Section 6.1(a)-(e), 6.1(g) and 6.1(h) hereof).

     “Default” shall mean any of the events specified in Section 7.1, whether
or not any requirement for the giving of notice or the lapse of time, or both,
or any other condition, has been satisfied.

     “Defaulting Lender” shall mean, at any time, any Lender that, at such time
(a) has failed to make a Loan required pursuant to the terms of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof and such default remains uncured, (b) has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant to
the terms of this Credit Agreement and such default remains uncured, or (c) has
been deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or to a receiver, trustee or similar official.

8

 

     “Dollars” and “$” shall mean dollars in lawful currency of the United
States of America.

     “Domestic Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s Domestic Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender (within the United States) as such
Lender may from time to time specify to the Administrative Agent and the
Borrower as the office of such Lender at which Alternate Base Rate Loans of
such Lender are to be made.

     “Domestic Subsidiary” shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.

     “Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions of, by or with any Governmental Authority relating to pollution
and the protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.

     “Equity Issuance” shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity. The term “Equity Issuance” shall
not include (i) any Asset Disposition, (ii) any Debt Issuance, (iii) or any
issuance of shares of Capital Stock of the Borrower as consideration for a
Permitted Acquisition or the proceeds of which are used as consideration for a
Permitted Acquisition within the time periods set forth in Section 2.8 or (iv)
shares of the Borrower’s Capital Stock issued as restricted stock awards or
otherwise pursuant to the exercise or fulfillment of options, warrants or
awards or pursuant to the Borrower’s Stock Option Plan, the 2003 Long-Term
Stock Incentive Plan and any similar plan adopted by the Borrower in
replacement thereof or in addition thereto, each as may be amended, modified or
supplemented from time to time.

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

     “Eurodollar Reserve Percentage” shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental or emergency
reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of
such Board as in effect from time to time, or any similar category of
liabilities for a member bank of the Federal Reserve System in New York City.

     “Event of Default” shall mean any of the events specified in Section 7.1;
provided, however, that any requirement for the giving of notice or the lapse
of time, or both, or any other condition, has been satisfied.

9

 

     “Excess Cash Flow” shall mean, for any period, for the Borrower and its
Subsidiaries, on a consolidated basis, an amount equal to (without duplication)
the sum of (a) Consolidated EBITDA for such period, minus (b) actual
Consolidated Capital Expenditures for such period, minus (c) Consolidated
Interest Expense for such period, minus (d) federal, state, local and foreign
income taxes paid in cash for such period, minus (e) scheduled payments and
voluntary prepayments of Indebtedness (excluding prepayments of the Revolving
Loans unless they result in a pro rata reduction of the Revolving Committed
Amount) during such period, minus (f) Restricted Payments made hereunder during
such period, minus (g) any increases in Working Capital for such period, plus
(h) any decreases in Working Capital for such period, minus (i) the
non-financed cash portion of the consideration paid for any Permitted
Acquisition paid during such period.

     “Existing Credit Agreement” shall mean that certain Credit Agreement dated
as of September 13, 2002, as amended, restated, supplemented or otherwise
modified, by and among the Borrower, the guarantors party thereto, Wachovia
Bank, National Association, Bank of America, N.A. and the other lenders party
thereto.

     “Existing Letter of Credit” shall mean each of the letters of credit
described by date of issuance, amount, purpose and the date of expiry on
Schedule 1.1(b) hereto.

     “Extension of Credit” shall mean, as to any Lender, the making of a Loan
by such Lender or the issuance of, or participation in, a Letter of Credit by
such Lender.

     “Federal Funds Effective Rate” shall have the meaning set forth in the
definition of “Alternate Base Rate”.

     “Fee Letter” shall mean the letter agreement dated May 5, 2004, addressed
to the Borrower from Wachovia, Bank of America and the Arrangers, as amended,
modified or otherwise supplemented.

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

     “Fronting Fee” shall have the meaning set forth in Section 2.6(b).

     “Fund” shall mean any trust, limited or general partnership, limited
liability company, corporation or other limited purpose entity that invests in
loans.

     “Funded Debt” means, as of any date of determination, for the Borrower and
its Subsidiaries on a consolidated basis, the following (without duplication):

     (a) obligations for borrowed money and all obligations evidenced by bonds,
debentures, notes, loan agreements or other similar instruments;

     (b) Attributable Indebtedness in respect of Capital Leases and Synthetic
Lease Obligations;

10

 

     (c) obligations in respect of any Redeemable Stock;

     (d) any direct or contingent obligations arising under letters of credit
(including standby and commercial), banker’s acceptances, bank guaranties,
surety bonds and similar instruments;

     (e) all obligations to pay the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of business
or accrued liabilities arising in the ordinary course of business that are not
overdue or that are being contested in good faith), and indebtedness (excluding
prepaid interest thereon) secured by a Lien on property owned or being
purchased (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have been
assumed or is limited in recourse;

     (f) net obligations under any Hedging Agreement;

     (g) Guaranty Obligations with respect to obligations of the type specified
in subsections (a) through (f) above of Persons other than the Borrower or any
of its Subsidiaries; and

     (h) all Indebtedness of the types referred to in subsections (a) through
(g) above of any partnership or joint venture (other than a joint venture that
is itself a corporation or limited liability company) in which the Borrower or
a Subsidiary is a general partner or joint venturer, unless such Indebtedness
is expressly made non-recourse to the Borrower or such Subsidiary.

     “GAAP” shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject, however,
in the case of determination of compliance with the financial covenants set out
in Section 5.9, to the provisions of Section 1.3.

     “Government Acts” shall have the meaning set forth in Section 2.19.

     “Governmental Approvals” shall mean all authorizations, consents,
approvals, permits, licenses and exemptions of, registrations and filings with,
and reports to, all Governmental Authorities.

     “Governmental Authority” shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

     “Guarantor” shall have the meaning set forth in the first paragraph of
this Credit Agreement.

     “Guaranty” shall mean the guaranty of the Guarantors set forth in Article
X.

     “Guaranty Obligations” shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any other
Person in any manner, whether direct or indirect, and including

11

 

without limitation any obligation, whether or not contingent, (i) to purchase
any such Indebtedness or any property constituting security therefor, (ii) to
advance or provide funds or other support for the payment or purchase of any
such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.

     “Hedging Agreement Provider” shall mean any Person that enters into a
Secured Hedging Agreement with a Credit Party or any of its Subsidiaries that
is permitted by Section 6.1(d) to the extent such Person is a Lender, an
Affiliate of a Lender or any other Person that was a Lender (or an Affiliate of
a Lender) at the time it entered into the Secured Hedging Agreement but has
ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under the
Credit Agreement.

     “Hedging Agreements” shall mean, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or
other interest or exchange rate hedging agreements.

     “Immaterial Subsidiary” shall mean any Domestic Subsidiary that (a) has
assets with a book value of less than or equal to $1,000,000 and (b) does not
have any Indebtedness outstanding.

     “Incremental Facility” shall have the meaning set forth in Section 2.5.

     “Indebtedness” shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered
into in the ordinary course of business), (d) all obligations of such Person
issued or assumed as the deferred purchase price of property or services
purchased by such Person (other than trade debt incurred in the ordinary course
of business and due within six months of the incurrence thereof) which would
appear as liabilities on a balance sheet of such Person, (e) all obligations of
such Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or

12

 

acquired by such Person, whether or not the obligations secured thereby have
been assumed, (g) all Guaranty Obligations of such Person with respect to
Indebtedness of another Person, (h) the principal portion of all Capital Lease
Obligations of such Person, (i) all net obligations of such Person under
Hedging Agreements, excluding any portion thereof which would be accounted for
as interest expense under GAAP, (j) the maximum amount of all letters of credit
issued or bankers’ acceptances facilities created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal portion of all Synthetic Lease Obligations of
such Person and (m) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer.

     “Insolvency” shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used
in Section 4245 of ERISA.

     “Intellectual Property” shall mean the Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses of the Credit
Parties and their Subsidiaries, all goodwill associated therewith and all
rights to sue for infringement thereof.

     “Interest Coverage Ratio” shall mean, with respect to the Borrower and its
Subsidiaries on a Consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Borrower and its Subsidiaries, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense
for such period.

     “Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan,
the last day of each March, June, September and December and on the applicable
Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three
months or less, the last day of such Interest Period, and (c) as to any LIBOR
Rate Loan having an Interest Period longer than three months, (i) each three
(3) month anniversary following the first day of such Interest Period and (ii)
the last day of such Interest Period.

     “Interest Period” shall mean, with respect to any LIBOR Rate Loan,

     (1) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR
Rate Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in the Notice of Borrowing or Notice of
Conversion given with respect thereto; and

     (2) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided that the foregoing provisions are subject to the
following:

13

 

     (A) if any Interest Period pertaining to a LIBOR Rate
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;

     (B) any Interest Period pertaining to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar
month;

     (C) if the Borrower shall fail to give notice as
provided above, the Borrower shall be deemed to have selected
an Alternate Base Rate Loan to replace the affected LIBOR
Rate Loan;

     (D) no Interest Period in respect of any Loan shall
extend beyond the applicable Maturity Date and, further with
regard to the Tranche B Term Loans, no Interest Period shall
extend beyond any principal amortization payment date unless
the portion of such Tranche B Term Loan consisting of
Alternate Base Rate Loans together with the portion of such
Tranche B Term Loan consisting of LIBOR Rate Loans with
Interest Periods expiring prior to or concurrently with the
date such principal amortization payment date is due, is at
least equal to the amount of such principal amortization
payment due on such date; and

     (E) no more than fifteen (15) LIBOR Rate Loans may be in
effect at any time. For purposes hereof, LIBOR Rate Loans
with different Interest Periods shall be considered as
separate LIBOR Rate Loans, even if they shall begin on the
same date, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at
the end of existing Interest Periods to constitute a new
LIBOR Rate Loan with a single Interest Period.

     “Investment” shall mean (a) the acquisition (whether for cash, property,
services, assumption of Indebtedness, securities or otherwise) of assets,
shares of Capital Stock, bonds, notes, debentures, partnership, joint ventures
or other ownership interests or other securities of any Person or (b) any
deposit with, or advance, loan or other extension of credit to, such Person
(other than deposits made in connection with the purchase of equipment or other
assets in the ordinary course of business or in connection with contracts for
goods and services in the ordinary course of its business) or (c) any other
capital contribution to or investment in such Person, including, without
limitation, any Guaranty Obligation (including any support for a letter of
credit issued on behalf of such Person) incurred for the benefit of such
Person.

14

 

     “Issuing Lender” shall mean (a) with respect to the Existing Letters of
Credit, Bank of America and (b) with respect to any Letter of Credit other than
the Existing Letters of Credit, Wachovia.

     “Issuing Lender Fees” shall have the meaning set forth in Section 2.6(c).

     “Joinder Agreement” shall mean a Joinder Agreement in substantially the
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.

     “Lender” shall have the meaning set forth in the first paragraph of this
Credit Agreement.

     “Letters of Credit” shall mean (a) any letter of credit issued by the
Issuing Lender pursuant to the terms hereof and (b) any Existing Letter of
Credit, in each case as such letter of credit may be amended, modified,
extended, renewed or replaced from time to time.

     “Letter of Credit Fee” shall have the meaning set forth in Section 2.6(b).

     “Leverage Ratio” shall mean the ratio of (i) Consolidated Funded Debt to
(ii) Consolidated EBITDA.

     “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%). If, for any reason,
neither of such rates is available, then “LIBOR” shall mean the rate per annum
at which, as determined by the Administrative Agent, Dollars in an amount
comparable to the Loans then requested are being offered to leading banks at
approximately 11:00 A.M. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period for settlement in immediately
available funds by leading banks in the London interbank market for a period
equal to the Interest Period selected.

     “LIBOR Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

15

 

     “LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary,
to the next higher 1/100th of 1%) determined by the Administrative Agent
pursuant to the following formula:

	 	 	 	 	 
	

	 	LIBOR Rate =
	 	LIBOR
	

	 	 	 	

	

	 	 	 	1.00 — Eurodollar Reserve Percentage

     “LIBOR Rate Loan” shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.

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

     “Loan” shall mean a Revolving Loan, a Swingline Loan and/or the Tranche B
Term Loan, as appropriate.

     “LOC Commitment” shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender that has a Revolving
Commitment, the commitment of such Lender to purchase Participation Interests
in the Letters of Credit up to such Lender’s LOC Committed Amount as specified
in Schedule 2.1(a), as such amount may be reduced from time to time in
accordance with the provisions hereof.

     “LOC Committed Amount” shall have the meaning set forth in Section 2.3(a).

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

     “LOC Obligations” shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding (including any Existing Letters of
Credit), assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings under
Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

     “Mandatory LOC Borrowing” shall have the meaning set forth in Section
2.3(e).

     “Mandatory Swingline Borrowing” shall have the meaning set forth in
Section 2.4(b)(ii).

     “Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, property, assets or condition (financial or otherwise) of
the Borrower or of the Credit Parties and their Subsidiaries taken as a whole,
(b) the ability of the Borrower or of the Credit

16

 

Parties and their Subsidiaries, taken as a whole, to perform its or their
obligations, as applicable, when such obligations are required to be performed,
under this Credit Agreement, any of the Notes or any other Credit Document or
(c) the validity or enforceability of this Credit Agreement, any of the Notes
or any of the other Credit Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.

     “Material Contract” shall mean any contract, agreement, permit or license,
written or oral, of the Credit Parties or any of their Subsidiaries the failure
to comply with which could reasonably be expected to have a Material Adverse
Effect.

     “Materials of Environmental Concern” shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

     “Maturity Date” shall mean (a) with respect to the Tranche B Term Loan,
the Tranche B Term Loan Maturity Date and (b) with respect to the Revolving
Loans and Swingline Loans, the Revolving Commitment Termination Date.

     “Mexico Acquisition” shall mean the acquisition of all of the outstanding
Voting Stock of Building Systems de Mexico, S.A. de C.V. not owned by the
Borrower on the date of this Agreement; provided that (i) no Default or Event
of Default shall then exist or would exist after giving effect thereto, (ii)
the Credit Parties shall demonstrate to the reasonable satisfaction of the
Administrative Agent that, after giving effect to the acquisition on a pro
forma basis, the Credit Parties are in compliance with each of the financial
covenants set forth in Section 5.9 and (iii) the Administrative Agent, on
behalf of the Lenders, shall have received a 65% (or such higher percentage
that would not result in a material adverse tax consequence) pledge of the
Capital Stock of Building Systems de Mexico, S.A. de C.V.

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

     “Multiemployer Plan” shall mean a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

     “Net Cash Proceeds” shall mean the aggregate cash proceeds received by the
Borrower or any Subsidiary in respect of any Asset Disposition, Equity
Issuance, Debt Issuance or Recovery Event, net of (a) direct costs (including,
without limitation, legal, accounting and investment banking fees, and sales
commissions, in each case payable to non-Affiliates) associated therewith, (b)
amounts held in escrow to be applied as part of the purchase price of any Asset
Disposition, (c) taxes paid or payable by a Credit Party as a result thereof,
(d) the amount paid or payable in respect of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness (other than
the Credit Party Obligations) that is secured by a Lien on the asset in
question, if any, to the extent required to be paid and (e) the amount of any
reserve reasonably maintained by the Borrower and its Subsidiaries with respect
to indemnification obligations owing pursuant to the definitive documentation
pursuant to which such event is consummated (with any unused portion of such
reserve to constitute Net Cash

17

 

Proceeds on the date upon which the indemnification obligations terminate or
such reserve is reduced other than in connection with a payment); it being
understood that “Net Cash Proceeds” shall include, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration
received by the Borrower or any Subsidiary in any Asset Disposition, Equity
Issuance, Debt Issuance or Recovery Event and any cash released from escrow as
part of the purchase price in connection with any Asset Disposition.

     “Note” or “Notes” shall mean the Revolving Notes, the Swingline Note
and/or the Tranche B Term Notes, collectively, separately or individually, as
appropriate.

     “Notice of Borrowing” shall mean a request for a Revolving Loan borrowing
pursuant to Section 2.1(b)(i) or a Swingline Loan borrowing pursuant to Section
2.4(b)(i), as appropriate. A Form of Notice of Borrowing is attached as
Schedule 2.1(b)(i).

     “Notice of Conversion” shall mean the written notice of extension or
conversion as referenced and defined in Section 2.10.

     “Obligations” shall mean, collectively, Loans and LOC Obligations.

     “Participant” shall have the meaning set forth in Section 9.6(b).

     “Participation Interest” shall mean a participation interest purchased by
a Revolving Lender in LOC Obligations as provided in Section 2.3(c) and in
Swingline Loans as provided in Section 2.4.

     “Patent Licenses” shall mean all agreements, whether written or oral,
providing for the grant by or to a Person of any right to manufacture, use or
sell any invention covered by a Patent, including, without limitation, any
thereof referred to in Schedule 3.16 to the Credit Agreement.

     “Patents” shall mean all letters patent of the United States or any other
country, now existing or hereafter arising, and all improvement patents,
reissues, reexaminations, patents of additions, renewals and extensions
thereof, including, without limitation, any thereof referred to in Schedule
3.16 to this Credit Agreement, and (ii) all applications for letters patent of
the United States or any other country, now existing or hereafter arising, and
all provisionals, divisions, continuations and continuations-in-part and
substitutes thereof, including, without limitation, any thereof referred to in
Schedule 3.16 to this Credit Agreement.

     “Patriot Act” shall have the meaning set forth in Section 9.18.

     “PBGC” shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

     “Permitted Acquisition” shall mean (a) the Mexico Acquisition and (b) an
acquisition or any series of related acquisitions by a Credit Party of (i) all
or substantially all of the assets or a majority of the outstanding Voting
Stock or economic interests of a Person that is incorporated, formed or
organized in the United States or (ii) any division, line of business or other
business

18

 

unit of a Person that is incorporated, formed or organized in the United
States (such Person or such division, line of business or other business unit
of such Person shall be referred to herein as the “Target”), in each case that
is a type of business (or assets used in a type of business) permitted to be
engaged in by the Credit Parties and their Subsidiaries pursuant to Section 6.4
hereof, so long as (A) no Default or Event of Default shall then exist or would
exist after giving effect thereto, (B) the Credit Parties shall demonstrate to
the reasonable satisfaction of the Administrative Agent that, after giving
effect to the acquisition on a pro forma basis, the Credit Parties are in
compliance with each of the financial covenants set forth in Section 5.9 and
(C) the Administrative Agent, on behalf of the Lenders, shall have received (or
shall receive in connection with the closing of such acquisition) a first
priority perfected security interest (subject to Permitted Liens) in all
Collateral (including, without limitation, Capital Stock) acquired with respect
to the Target in accordance with the terms of Sections 5.10 and 5.12 and the
Target, if a Person, shall have executed a Joinder Agreement in accordance with
the terms of Section 5.10.

     “Permitted Investments” shall mean:

     (1) cash and Cash Equivalents;

     (2) Investments set forth on Schedule 1.1(c);

     (3) receivables owing to the Credit Parties or
any of their Subsidiaries or any receivables and
advances to suppliers, in each case if created,
acquired or made in the ordinary course of business
and payable or dischargeable in accordance with
customary trade terms;

     (4) Investments in and loans to any Credit Party
by any other Credit Party;

     (5) loans to employees and advances to employees
and directors (to the extent such advances to
directors comply with the Sarbanes-Oxley Act of 2002)
in an aggregate amount not to exceed $1,000,000 at any
time outstanding;

     (6) Investments (including debt obligations)
received in connection with the bankruptcy or
reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the
ordinary course of business;

     (7) Investments, acquisitions or transactions
permitted under Section 6.5(b); and

     (8) additional loan advances and/or Investments
in an aggregate amount not to exceed $10,000,000 at
any time outstanding.

     “Permitted Liens” shall mean:

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     (1) Liens created by or otherwise existing under
or in connection with this Credit Agreement or the
other Credit Documents in favor of the Lenders;

     (2) Liens in favor of a Hedging Agreement
Provider in connection with a Secured Hedging
Agreement, but only if such Hedging Agreement Provider
and the Administrative Agent, on behalf of the
Lenders, shall share pari passu in the collateral
subject to such Liens;

     (3) Liens securing purchase money indebtedness
and Capital Lease Obligations (and refinancings
thereof) to the extent permitted under Section 6.1(c);
provided, that (A) any such Lien attaches to such
property concurrently with or within 30 days after the
acquisition thereof and (B) such Lien attaches solely
to the property so acquired in such transaction;

     (4) Liens for taxes, assessments, charges or
other governmental levies not yet due or as to which
the period of grace (not to exceed 60 days), if any,
related thereto has not expired or which are being
contested in good faith by appropriate proceedings;
provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with
GAAP (or, in the case of Subsidiaries with significant
operations outside of the United States of America,
generally accepted accounting principles in effect
from time to time in their respective jurisdictions of
incorporation);

     (5) statutory Liens such as carriers’,
warehousemen’s, mechanics’, materialmen’s, landlords’,
repairmen’s or other like Liens arising in the
ordinary course of business which are not overdue for
a period of more than 30 days or which are being
contested in good faith by appropriate proceedings and
for which adequate reserves are maintained on the
books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;

     (6) pledges or deposits in connection with
workers’ compensation, unemployment insurance and
other social security legislation and deposits
securing liability to insurance carriers under
insurance or self-insurance arrangements;

     (7) deposits to secure the performance of bids,
trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal
bonds, performance bonds and other

20

 

obligations of a like nature incurred in the
ordinary course of business;

     (8) easements, rights of way, restrictions and
other similar encumbrances affecting real property
which, in the aggregate, are not substantial in
amount, and which do not in any case materially
detract from the value of the property subject thereto
or materially interfere with the ordinary conduct of
the business of the applicable Person;

     (9) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in
whole or in part, of any Lien referred to in the
foregoing clauses; provided that such extension,
renewal or replacement Lien shall be limited to all or
a part of the property which secured the Lien so
extended, renewed or replaced (plus improvements on
such property);

     (10) Liens on the assets of any entity existing
at the time such assets are acquired by the Borrower
or any Subsidiary, whether by merger, consolidation,
purchase of assets or otherwise so long as (i) such
Liens (A) are not created, incurred or assumed in
contemplation of such assets being acquired by the
Borrower or any Subsidiary, and (B) do not extend to
any other assets of the Borrower or any Subsidiary;
and (ii) the amount of Indebtedness secured by all
such Liens shall not exceed $15,000,000 in aggregate
principal amount at any time; and

     (11) Liens existing on the Closing Date and set
forth on Schedule 1.1(d); provided that no such Lien
shall at any time be extended to cover property or
assets other than the property or assets subject
thereto on the Closing Date and improvements thereon
and (b) the principal amount of the Indebtedness
secured by such Lien shall not be increased.

     “Person” shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

     “Plan” shall mean, at any particular time, any employee benefit plan which
is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

     “Pledge Agreement” shall mean the Pledge Agreement dated as of the Closing
Date given by the Borrower and the Guarantors to the Administrative Agent, for
the benefit of the Lenders, as the same may from time to time be amended,
supplemented or otherwise modified in accordance with the terms hereof and
thereof.

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     “Prime Rate” shall have the meaning set forth in the definition of
Alternate Base Rate.

     “Purchasing Lenders” shall have the meaning set forth in Section 9.6(c).

     "Recovery Event” shall mean the receipt by the Credit Parties or any of
their Subsidiaries of any cash insurance proceeds or condemnation award payable
by reason of theft, loss, physical destruction or damage, taking or similar
event with respect to any of their respective property or assets other than
obsolete property or assets no longer used or useful in the business of the
Credit Parties or any of their Subsidiaries.

     “Redeemable Stock” shall mean any Capital Stock of the Borrower or any of
its Subsidiaries which prior to the date which is six months after the Tranche
B Term Loan Maturity Date may be (a) mandatorily redeemable, (b) redeemable at
the option of the holder thereof or (c) convertible into Indebtedness.

     “Register” shall have the meaning set forth in Section 9.6(d).

     “Reimbursement Obligation” shall mean the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 2.3(d) for amounts drawn under
Letters of Credit.

     “Reorganization” shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term
as used in Section 4241 of ERISA.

     “Reportable Event” shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. §4043.

     “Required Lenders” shall mean Lenders holding in the aggregate more than
50% of the sum of (i) all Revolving Loans and LOC Obligations then outstanding
at such time plus the aggregate unused Revolving Commitments at such time
(treating for purposes hereof in the case of LOC Obligations, in the case of
the Issuing Lender and the Swingline Lender, only the portion of the LOC
Obligations of the Issuing Lender and Swingline Loans of the Swingline Lender
which are not subject to the Participation Interests of the other Lenders and,
in the case of the Lenders other than the Issuing Lender and the Swingline
Lender, the Participation Interests of such Lenders in LOC Obligations and the
Swingline Loans hereunder as direct Obligations) and (ii) the principal amount
of the Tranche B Term Loan then outstanding at such time; provided, however,
that if any Lender shall be a Defaulting Lender at such time, then there shall
be excluded from the determination of Required Lenders, Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting
Lender’s Commitments, or after termination of the Commitments, the principal
balance of the Obligations owing to such Defaulting Lender.

22

 

     “Requirement of Law” shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of
such Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.

     “Responsible Officer” shall mean, as to (a) the Borrower, the chief
executive officer, president, the chief financial officer or treasurer or (b)
any other Credit Party, any duly authorized officer thereof.

     “Restricted Payment” shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of a
Credit Party, now or hereafter outstanding, (b) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of Capital Stock of the Credit
Parties or any of their Subsidiaries, now or hereafter outstanding, (c) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Credit Parties or any of their Subsidiaries, now or hereafter
outstanding (excluding any stock appreciation payments or payments in lieu of
issuance of Capital Stock made pursuant to the Borrower’s 2003 Long-Term Stock
Incentive Plan, as may be amended, modified or supplemented from time to time),
(d) any payment, prepayment, redemption or similar payment with respect to the
Subordinated Debt of any Credit Party or any of its Subsidiaries and (e) the
payment by any Credit Party of any management or consulting fee to any Person
or of any salary, bonus or other form of compensation to any Person who is
directly or indirectly a significant partner, shareholder, owner or executive
officer of any such Person, to the extent such salary, bonus or other form of
compensation is not included in the corporate overhead of such Credit Party.

     “Revolving Commitment” shall mean, with respect to each Revolving Lender,
the commitment of such Revolving Lender to make Revolving Loans in an aggregate
principal amount at any time outstanding up to an amount equal to such
Revolving Lender’s Revolving Commitment Percentage of the Revolving Committed
Amount.

     “Revolving Commitment Percentage” shall mean, for each Revolving Lender,
the percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a) or in the Register, as such percentage may be modified in connection
with any assignment made in accordance with the provisions of Section 9.6(c).

     “Revolving Commitment Termination Date” shall mean the date that is five
(5) years from the Closing Date.

     “Revolving Committed Amount” shall have the meaning set forth in Section
2.1(a).

     “Revolving Lender” shall mean, as of any date of determination, a Lender
holding a Revolving Commitment on such date.

     “Revolving Loan” shall have the meaning set forth in Section 2.1.

23

 

     “Revolving Note” or “Revolving Notes” shall mean the promissory notes of
the Borrower provided pursuant to Section 2.1(e) in favor of each of the
Revolving Lenders evidencing the Revolving Loans, individually or collectively,
as appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.

     “S&P” shall mean Standard & Poor’s Ratings Services, a division of The
McGraw Hill Companies, Inc.

     “Secured Hedging Agreement” shall mean any Hedging Agreement between a
Credit Party and a Hedging Agreement Provider, as amended, modified,
supplemented, extended or restated from time to time.

     “Security Agreement” shall mean the Security Agreement dated as of the
Closing Date given by the Borrower and the Guarantors to the Administrative
Agent, for the benefit of the Lenders, as amended, modified or supplemented
from time to time in accordance with its terms.

     “Security Documents” shall mean the Security Agreement, the Pledge
Agreement and such other documents, agreements and instruments executed and
delivered and/or filed in connection with the attachment and perfection of the
Administrative Agent’s security interests and liens arising thereunder,
including, without limitation, UCC financing statements and patent, trademark
and copyright filings.

     “Senior Funded Debt” shall mean, as of any date of determination, with
respect to any Person, all Consolidated Funded Debt (including, without
limitation, the Obligations hereunder) that is not subordinated in right of
payment to the Credit Party Obligations.

     “Senior Leverage Ratio” shall mean the ratio of (i) Senior Funded Debt to
(ii) Consolidated EBITDA.

     “Senior Subordinated Notes” shall mean the Indebtedness of the Borrower,
issued pursuant to that certain Indenture, dated as of May 5, 1999, by and
between the Borrower and The Bank of New York (as successor in interest to
Harris Trust Company of New York), and maturing May 5, 2009.

     “Single Employer Plan” shall mean any Plan that is not a Multiemployer
Plan.

     “Specified Sales” shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business and
(b) the sale, transfer or other disposition of cash or Cash Equivalents into
cash or other Cash Equivalents.

     “Subordinated Debt” shall mean any Indebtedness incurred by any Credit
Party which by its terms is specifically subordinated in right of payment to
the prior payment of the Credit Party Obligations and contains subordination
and other terms acceptable to the Administrative Agent, including, without
limitation, the debt evidenced by the Senior Subordinated Notes.

24

 

     “Subsidiary” shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of
a contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a “Subsidiary” or to “Subsidiaries” in this Credit Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.

     “Swingline Commitment” shall mean the commitment of the Swingline Lender
to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Revolving Lenders to purchase participation interests in the Swingline Loans as
provided in Section 2.4(b)(ii), as such amounts may be reduced from time to
time in accordance with the provisions hereof.

     “Swingline Committed Amount” shall mean the amount of the Swingline
Lender’s Swingline Commitment as specified in Section 2.4(a).

     “Swingline Lender” shall mean Wachovia and any successor swingline lender.

     “Swingline Loan” shall have the meaning set forth in Section 2.4(a).

     “Swingline Note” shall mean the promissory note of the Borrower in favor
of the Swingline Lender evidencing the Swingline Loans provided pursuant to
Section 2.4(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

     “Syndication Agent” shall have the meaning set forth in the first
paragraph of this Credit Agreement and any successors in such capacity.

     “Synthetic Lease Obligation” shall mean the monetary obligation of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).

     “Tax Exempt Certificate” shall have the meaning set forth in Section 2.18.

     “Taxes” shall have the meaning set forth in Section 2.18.

     “Term Loan Lender” shall mean, as of any date of determination, any Lender
that holds a portion of the outstanding Tranche B Term Loan on such date.

     “Ticking Fee” shall have the meaning set forth in Section 2.6(e).

25

 

     “Ticking Fee Payment Date” shall have the meaning set forth in Section
2.6(e).

     “Trademark License” shall mean any agreement, whether written or oral,
providing for the grant by or to a Person of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule 3.16 to this
Credit Agreement.

     “Trademarks” shall mean all trademarks, trade names, corporate names,
company names, business names, fictitious business names, service marks,
elements of package or trade dress of goods or services, logos and other source
or business identifiers, together with the goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, including, without limitation, any thereof referred to in
Schedule 3.16 to this Credit Agreement, and (ii) all renewals thereof
including, without limitation, any thereof referred to in Schedule 3.16.

     “Tranche” shall mean the collective reference to (a) LIBOR Rate Loans
whose Interest Periods begin and end on the same day and (b) Alternate Base
Rate Loans made on the same day. A Tranche with respect to LIBOR Rate Loans
may sometimes be referred to as a “Eurodollar Tranche”.

     “Tranche B Term Loan” shall have the meaning set forth in Section 2.2(a).

     “Tranche B Term Loan Commitment” shall mean, with respect to each Term
Loan Lender, the commitment of such Term Loan Lender to make its portion of the
Tranche B Term Loan in a principal amount equal to such Term Loan Lender’s
Tranche B Term Loan Commitment Percentage of the Tranche B Term Loan Committed
Amount (and for purposes of making determinations of Required Lenders hereunder
after the Closing Date, the principal amount outstanding on the Tranche B Term
Loan).

     “Tranche B Term Loan Commitment Percentage” shall mean, for any Term Loan
Lender, the percentage identified as its Tranche B Term Loan Commitment
Percentage on Schedule 2.1(a), as such percentage may be modified in connection
with any assignment made in accordance with the provisions of Section 9.6.

     “Tranche B Term Loan Committed Amount” shall have the meaning set forth in
Section 2.2(a).

     “Tranche B Term Loan Funding Date” shall mean the date upon which all the
conditions precedent to the funding of the Tranche B Term Loans (including,
without limitation, the requirements set forth in Sections 2.2, 4.1 and 4.3)
shall have been satisfied; provided, that the Tranche B Term Loan Funding Date
shall occur no later than sixty (60) days after the Closing Date.

     “Tranche B Term Loan Maturity Date” shall mean the date that is six (6)
years from the Closing Date.

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     “Tranche B Term Note” or “Tranche B Term Notes” shall mean the promissory
notes of the Borrower in favor of each of the Term Loan Lenders evidencing the
portion of the Tranche B Term Loan provided pursuant to Section 2.2(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.

     “Transfer Effective Date” shall have the meaning set forth in each
Commitment Transfer Supplement.

     “Type” shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.

     “Voting Stock” shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
may be or have been suspended by the happening of such a contingency.

     “Wachovia” shall mean Wachovia Bank, National Association, a national
banking association.

     “Working Capital” shall mean, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, the remainder of (a)
accounts receivable, inventory and prepaid expenses minus (b) accounts payable
and other accrued expenses including compensation, benefits and taxes.

     Section 1.2. Other Definitional Provisions.

     (a) Unless otherwise specified therein, all terms defined in this
Credit Agreement shall have the defined meanings when used in the Notes
or other Credit Documents or any certificate or other document made or
delivered pursuant hereto.

     (b) The words “hereof”, “herein” and “hereunder” and words of
similar import when used in this Credit Agreement shall refer to this
Credit Agreement as a whole and not to any particular provision of this
Credit Agreement, and Section, subsection, Schedule and Exhibit
references are to this Credit Agreement unless otherwise specified.

     (c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

     Section 1.3. Accounting Terms.

     Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
Consolidated financial statements of the Borrower delivered to the

27

 

Administrative Agent; provided that, if the Borrower notifies the
Administrative Agent that it wishes to amend any covenant in Section 5.9 to
eliminate the effect of any change in GAAP on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required Lenders
wish to amend Section 5.9 for such purpose), then the Borrower’s compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory
to the Borrower and the Required Lenders.

     The Borrower shall deliver to the Administrative Agent at the same time as
the delivery of any annual or quarterly financial statements given in
accordance with the provisions of Section 5.1, (i) a description in reasonable
detail of any material change in the application of accounting principles
employed in the preparation of such financial statements from those applied in
the most recently preceding quarterly or annual financial statements as to
which no objection shall have been made in accordance with the provisions above
and (ii) a reasonable estimate of the effect on the financial statements on
account of such changes in application.

     For purposes of computing the financial covenants set forth in Section 5.9
for any applicable test period, any Permitted Acquisition or permitted sale of
assets (including a stock sale) shall have been deemed to have taken place as
of the first day of such applicable test period.

     Section 1.4. Time References.

     Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).

ARTICLE II

THE LOANS; AMOUNT AND TERMS

     Section 2.1. Revolving Loans.

     (a) Revolving Commitment. During the Commitment Period, subject to
the terms and conditions hereof, each Revolving Lender severally agrees
to make revolving credit loans (“Revolving Loans”) to the Borrower from
time to time for the purposes hereinafter set forth; provided, however,
that (i) with regard to each Revolving Lender individually, the sum of
such Revolving Lender’s share of outstanding Revolving Loans plus such
Revolving Lender’s Revolving Commitment Percentage of outstanding
Swingline Loans plus such Revolving Lender’s Revolving Commitment
Percentage of outstanding LOC Obligations (after giving effect to the
concurrent reduction, if any, in outstanding Swingline Loans and/or
outstanding LOC Obligations to be effected by application of the proceeds
of Revolving Loans) shall not exceed such Revolving Lender’s Revolving
Commitment Percentage of the Revolving Committed Amount and (ii) with
regard to the Revolving Lenders collectively, the sum of the aggregate
amount of outstanding Revolving Loans plus outstanding Swingline Loans
plus outstanding LOC Obligations (after giving effect to the concurrent
reduction, if any, in outstanding Swingline Loans and/or outstanding LOC
Obligations to be effected by application of the

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proceeds of Revolving Loans) shall not exceed the Revolving
Committed Amount then in effect. For purposes hereof, the aggregate
amount available hereunder shall be ONE HUNDRED TWENTY-FIVE MILLION
DOLLARS ($125,000,000) (as such aggregate maximum amount may be reduced
from time to time as provided in Section 2.7, the “Revolving Committed
Amount”). Revolving Loans may consist of Alternate Base Rate Loans or
LIBOR Rate Loans, or a combination thereof, as the Borrower may request,
and may be repaid and reborrowed in accordance with the provisions
hereof; provided, however, the Revolving Loans made on the Closing Date
and on the two Business Days immediately following the Closing Date shall
bear interest at the Alternate Base Rate. LIBOR Rate Loans shall be made
by each Revolving Lender at its LIBOR Lending Office and Alternate Base
Rate Loans at its Domestic Lending Office.

     (b) Revolving Loan Borrowings.

     (1) Notice of Borrowing. The Borrower may request a Revolving
Loan borrowing by delivering a written Notice of Borrowing (or
telephone notice promptly confirmed in writing by delivery of a
written Notice of Borrowing, which delivery may be by fax) to the
Administrative Agent not later than 11:00 A.M. on the date of the
requested borrowing in the case of Alternate Base Rate Loans, and
on the third Business Day prior to the date of the requested
borrowing in the case of LIBOR Rate Loans. Each such Notice of
Borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed and (D) whether the borrowing shall
be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a
combination thereof, and if LIBOR Rate Loans are requested, the
Interest Period(s) therefor. If the Borrower shall fail to specify
in any such Notice of Borrowing (1) an applicable Interest Period
in the case of a LIBOR Rate Loan, then such notice shall be deemed
to be a request for an Interest Period of one month, or (2) the
type of Revolving Loan requested, then such notice shall be deemed
to be a request for an Alternate Base Rate Loan hereunder. The
Administrative Agent shall give notice to each Revolving Lender
promptly upon receipt of each Notice of Borrowing, the contents
thereof and each such Revolving Lender’s share thereof.

     (2) Minimum Amounts. Each Revolving Loan that is made as an
Alternate Base Rate Loan shall be in a minimum aggregate amount of
$500,000 and integral multiples of $100,000 in excess thereof (or
the remaining amount of the Revolving Committed Amount, if less)
other than with respect to payments of reimbursement obligations in
accordance with Section 2.3(d) and with respect to repayments of
Swingline Loans in accordance with Section 2.4(b)(ii), each of
which may be in the amount of the reimbursement obligation being
paid or of Swingline Loan being repaid. Each Revolving Loan that
is made as a LIBOR Rate Loan shall be in a minimum aggregate amount
of $5,000,000 and integral multiples of $1,000,000 in excess
thereof (or the remaining amount of the Revolving Committed Amount,
if less).

29

 

     (3) Advances. Each Revolving Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to
the Administrative Agent for the account of the Borrower at the
office of the Administrative Agent specified in Section 9.2, or at
such other office as the Administrative Agent may designate in
writing, upon reasonable advance notice by 1:00 P.M. on the date
specified in the applicable Notice of Borrowing, in Dollars and in
funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Lenders and
in like funds as received by the Administrative Agent.

     (c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Revolving Commitment Termination Date,
unless accelerated sooner pursuant to Section 7.2.

     (d) Interest. Subject to the provisions of Section 2.9(b),
Revolving Loans shall bear interest as follows:

     (1) Alternate Base Rate Loans. During such periods as
Revolving Loans shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per
annum rate equal to the sum of the Alternate Base Rate plus the
Applicable Percentage; and

     (2) LIBOR Rate Loans. During such periods as Revolving Loans
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate plus the Applicable Percentage.

Interest on Revolving Loans shall be payable in arrears on each Interest
Payment Date.

     (e) Revolving Notes. The Borrower’s obligation to pay each
Revolving Lender’s Revolving Loans shall be evidenced, upon such
Revolving Lender’s request, by a Revolving Note made payable to such
Lender in substantially the form of Schedule 2.1(e).

     Section 2.2. Tranche B Term Loan.

     (a) Tranche B Term Loan. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein,
each Term Loan Lender severally agrees to make available to the Borrower
on the Tranche B Term Loan Funding Date such Term Loan Lender’s Tranche B
Term Loan Commitment Percentage of a term loan in Dollars (the “Tranche B
Term Loan”) in the aggregate principal amount of TWO HUNDRED MILLION
DOLLARS ($200,000,000) (the “Tranche B Term Loan Committed Amount”) for
the purposes hereinafter set forth. The Tranche B Term Loan may consist
of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrower may request. LIBOR Rate Loans shall be made by
each Term

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Loan Lender at its LIBOR Lending Office and Alternate Base Rate
Loans at its Domestic Lending Office. Amounts repaid or prepaid on the
Tranche B Term Loan may not be reborrowed.

     (b) Repayment of Tranche B Term Loan. The principal amount of the
Tranche B Term Loan shall be repaid in twenty-four (24) consecutive
quarterly installments (as reduced pursuant to Section 2.8) as follows:

	 	 	 	 	 	 	 
	 	 	Principal Amortization	 	Tranche B Term Loan
	 	 	Payment Date
	 	Principal Amortization Payment

	

	 	November 1, 2004
	 	$	500,000	 
	

	 	February 1, 2005
	 	$	500,000	 
	

	 	May 1, 2005
	 	$	500,000	 
	

	 	August 1, 2005
	 	$	500,000	 
	

	 	November 1, 2005
	 	$	500,000	 
	

	 	February 1, 2006
	 	$	500,000	 
	

	 	May 1, 2006
	 	$	500,000	 
	

	 	August 1, 2006
	 	$	500,000	 
	

	 	November 1, 2006
	 	$	500,000	 
	

	 	February 1, 2007
	 	$	500,000	 
	

	 	May 1, 2007
	 	$	500,000	 
	

	 	August 1, 2007
	 	$	500,000	 
	

	 	November 1, 2007
	 	$	500,000	 
	

	 	February 1, 2008
	 	$	500,000	 
	

	 	May 1, 2008
	 	$	500,000	 
	

	 	August 1, 2008
	 	$	500,000	 
	

	 	November 1, 2008
	 	$	500,000	 
	

	 	February 1, 2009
	 	$	500,000	 
	

	 	May 1, 2009
	 	$	500,000	 
	

	 	August 1, 2009
	 	$	500,000	 
	

	 	November 1, 2009
	 	$	500,000	 
	

	 	February 1, 2010
	 	$	500,000	 
	

	 	May 1, 2010
	 	$	500,000	 
	

	 	Tranche B Term Loan Maturity Date
	 	$188,500,000 or the remaining principal

amount of the Tranche B Term Loan

     (c) Interest on the Tranche B Term Loan. Subject to the provisions
of Section 2.9, the Tranche B Term Loan shall bear interest as follows:

31

 

     (1) Alternate Base Rate Loans. During such periods as the
Tranche B Term Loan shall be comprised of Alternate Base Rate
Loans, each such Alternate Base Rate Loan shall bear interest at a
per annum rate equal to the sum of the Alternate Base Rate plus the
Applicable Percentage; and

     (2) LIBOR Rate Loans. During such periods as the Tranche B
Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR
Rate Loan shall bear interest at a per annum rate equal to the sum
of the LIBOR Rate plus the Applicable Percentage.

     Interest on the Tranche B Term Loan shall be payable in arrears on
each Interest Payment Date.

     (d) Tranche B Term Notes. The Borrower’s obligation to pay each
Term Loan Lender’s Tranche B Term Loan shall be evidenced, upon such Term
Loan Lender’s request, by a Tranche B Term Note made payable to such
Lender in substantially the form of Schedule 2.2(d).

     Section 2.3. Letter of Credit Subfacility.

     (a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require, during the Commitment Period the
Issuing Lender shall issue, and the Revolving Lenders shall participate
in, standby Letters of Credit for the account of the Borrower from time
to time upon request in a form acceptable to the Issuing Lender;
provided, however, that (i) the aggregate amount of LOC Obligations shall
not at any time exceed TWENTY MILLION DOLLARS ($20,000,000) (the “LOC
Committed Amount”), (ii) the sum of the aggregate amount of outstanding
Revolving Loans plus outstanding Swingline Loans plus outstanding LOC
Obligations shall not at any time exceed the Revolving Committed Amount
then in effect, (iii) all Letters of Credit shall be denominated in U.S.
Dollars and (iv) Letters of Credit shall be issued for any lawful
corporate purposes, including in connection with workers’ compensation
and other insurance programs. Except as otherwise expressly agreed upon
by all the Revolving Lenders, no Letter of Credit shall have an original
expiry date more than twelve (12) months from the date of issuance;
provided, however, so long as no Default or Event of Default has occurred
and is continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of
Credit (other than the Existing Letters of Credit) may be extended
annually or periodically from time to time on the request of the Borrower
or by operation of the terms of the applicable Letter of Credit to a date
not more than twelve (12) months from the date of extension; provided,
further, that no Letter of Credit, as originally issued or as extended,
shall have an expiry date extending beyond the date that is thirty (30)
days prior to the Revolving Commitment Termination Date. Each Letter of
Credit shall comply with the related LOC Documents. The issuance and
expiry date of each Letter of Credit shall be a Business Day. Any
Letters of Credit issued hereunder shall be in a minimum original face
amount of $100,000. The Borrower’s reimbursement obligations in respect
of each Existing Letter of Credit, and each Lender’s participation
obligations in connection therewith,

32

 

shall be governed by the terms of this Credit Agreement.
Notwithstanding any term in this Credit Agreement or in the LOC Documents
to the contrary, the Existing Letters of Credit shall not be renewed or
extended beyond the applicable expiration dates in effect on the Closing
Date.

     (b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least five (5)
Business Days prior to the requested date of issuance. The Issuing
Lender will promptly upon request provide to the Administrative Agent for
dissemination to the Revolving Lenders a detailed report specifying the
Letters of Credit which are then issued and outstanding and any activity
with respect thereto which may have occurred since the date of any prior
report, and including therein, among other things, the account party, the
beneficiary, the face amount, expiry date as well as any payments or
expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the
Letters of Credit. The Issuing Lender will provide to the Administrative
Agent promptly upon request a summary report of the nature and extent of
LOC Obligations then outstanding.

     (c) Participations. Each Revolving Lender, (i) on the Closing Date
with respect to each Existing Letter of Credit and (ii) upon issuance of
any other Letter of Credit (or upon a Person becoming a Revolving Lender
hereunder), shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in
each case in an amount equal to its Revolving Commitment Percentage of
the obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its Revolving Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Revolving Lender’s participation in any Letter
of Credit, to the extent that the Issuing Lender has not been reimbursed
as required hereunder or under any LOC Document, each such Revolving
Lender shall pay to the Issuing Lender its Revolving Commitment
Percentage of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant to
and in accordance with the provisions of subsection (d) hereof. The
obligation of each Revolving Lender to so reimburse the Issuing Lender
shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.

     (d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower and the
Administrative Agent. The Borrower shall reimburse the Issuing Lender on
the day of drawing under any Letter of Credit (either with the proceeds
of a Revolving Loan obtained hereunder or otherwise) in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided herein, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the ABR
Default Rate. Unless the

33

 

Borrower shall immediately notify the Issuing Lender and the
Administrative Agent of its intent to otherwise reimburse the Issuing
Lender, the Borrower shall be deemed to have requested a Mandatory LOC
Borrowing in the amount of the drawing as provided in subsection (e)
hereof, the proceeds of which will be used to satisfy the reimbursement
obligations. The Borrower’s reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of set-off, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Administrative Agent, the
Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of
the Borrower to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the other Revolving Lenders of the amount of
any unreimbursed drawing and each Revolving Lender shall promptly pay to
the Administrative Agent for the account of the Issuing Lender, in
Dollars and in immediately available funds, the amount of such Revolving
Lender’s Revolving Commitment Percentage of such unreimbursed drawing.
Such payment shall be made on the day such notice is received by such
Revolving Lender from the Issuing Lender if such notice is received at or
before 2:00 P.M., otherwise such payment shall be made at or before 12:00
Noon on the Business Day next succeeding the day such notice is received.
If such Revolving Lender does not pay such amount to the Issuing Lender
in full upon such request, such Revolving Lender shall, on demand, pay to
the Administrative Agent for the account of the Issuing Lender interest
on the unpaid amount during the period from the date of such drawing
until such Revolving Lender pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within two (2) Business Days
of the date of drawing, the Federal Funds Effective Rate and thereafter
at a rate equal to the Alternate Base Rate. Each Revolving Lender’s
obligation to make such payment to the Issuing Lender, and the right of
the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or
the acceleration of the Credit Party Obligations hereunder and shall be
made without any offset, abatement, withholding or reduction whatsoever.

     (e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Revolving Lenders that a
Revolving Loan has been requested or deemed requested in connection with
a drawing under a Letter of Credit, in which case a Revolving Loan
borrowing comprised entirely of Alternate Base Rate Loans (each such
borrowing, a “Mandatory LOC Borrowing”) shall be immediately made
(without giving effect to any termination of the Commitments pursuant to
Section 7.2) pro rata based on each Revolving Lender’s respective
Revolving Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2) and the proceeds
thereof shall be paid directly to the Issuing Lender for application to
the respective LOC Obligations. Each Revolving Lender hereby irrevocably
agrees to make such Revolving Loans on the day such notice is received by
the Revolving Lenders from the Administrative Agent if such notice is
received at or before 2:00 P.M., otherwise such payment shall be made at
or before 12:00 Noon on the Business Day next succeeding the

34

 

day such notice is received, in each case notwithstanding (i) the
amount of Mandatory LOC Borrowing may not comply with the minimum amount
for borrowings of Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Section 4.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure for
any such request or deemed request for Revolving Loan to be made by the
time otherwise required in Section 2.1(b), (v) the date of such Mandatory
LOC Borrowing, or (vi) any reduction in the Revolving Committed Amount
after any such Letter of Credit may have been drawn upon. In the event
that any Mandatory LOC Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower), then each such Revolving Lender hereby agrees
that it shall forthwith fund (as of the date the Mandatory LOC Borrowing
would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) its
Participation Interests in the outstanding LOC Obligations; provided,
further, that in the event any Revolving Lender shall fail to fund its
Participation Interest on the day the Mandatory LOC Borrowing would
otherwise have occurred, then the amount of such Revolving Lender’s
unfunded Participation Interest therein shall bear interest payable by
such Revolving Lender to the Issuing Lender upon demand, at the rate
equal to, if paid within two (2) Business Days of such date, the Federal
Funds Effective Rate, and thereafter at a rate equal to the Alternate
Base Rate.

     (f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.

     (g) Uniform Customs and Practices. The Issuing Lender shall have
the Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the “UCP”), in which case the UCP may
be incorporated therein and deemed in all respects to be a part thereof.

     (h) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Agreement, including without
limitation Section 2.3(a), a Letter of Credit issued hereunder may
contain a statement to the effect that such Letter of Credit is issued
for the account of a Subsidiary of the Borrower; provided that,
notwithstanding such statement, the Borrower shall be the actual account
party for all purposes of this Agreement for such Letter of Credit and
such statement shall not affect the Borrower’s reimbursement obligations
hereunder with respect to such Letter of Credit.

     (i) Repayment in Respect of Participation Interests. At any time
after the Issuing Lender has made a payment under any Letter of Credit
and has received from any Lender such Lender’s funded Participation
Interest in such LOC Obligations in accordance with Section 2.3(e), if
the Administrative Agent receives for the account of the Issuing Lender
from the Borrower any payment in respect of such LOC Obligations, the
Administrative Agent will distribute to such Lender its pro rata share of
such payment made by the Borrower based on such Lender’s Revolving
Commitment Percentage

35

 

thereof (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender’s payment on its
Participation Interest was outstanding) in the same funds as those
received by the Administrative Agent.

     Section 2.4. Swingline Loan Subfacility.

     (a) Swingline Commitment. During the Commitment Period, subject to
the terms and conditions hereof, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to the Borrower
(each a “Swingline Loan” and, collectively, the “Swingline Loans”) for
the purposes hereinafter set forth; provided, however, (i) the aggregate
amount of Swingline Loans outstanding at any time shall not exceed TEN
MILLION DOLLARS ($10,000,000) (the “Swingline Committed Amount”), and
(ii) the sum of the outstanding Revolving Loans plus outstanding
Swingline Loans plus outstanding LOC Obligations shall not exceed the
Revolving Committed Amount. Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.

     (b) Swingline Loan Borrowings.

     (1) Notice of Borrowing and Disbursement. The Swingline
Lender will make Swingline Loans available to the Borrower on any
Business Day upon delivery of a Notice of Borrowing by the Borrower
to the Administrative Agent not later than 2:00 P.M. on such
Business Day. Swingline Loan borrowings hereunder shall be made in
minimum amounts of $100,000 and in integral amounts of $100,000 in
excess thereof.

     (2) Repayment of Swingline Loans. Each Swingline Loan
borrowing shall be due and payable on the Revolving Commitment
Termination Date. The Swingline Lender may, at any time, in its
sole discretion, by written notice to the Borrower and the
Administrative Agent, demand repayment of its Swingline Loans by
way of a Revolving Loan borrowing, in which case the Borrower shall
be deemed to have requested a Revolving Loan borrowing comprised
entirely of Alternate Base Rate Loans in the amount of such
Swingline Loans; provided, however, that, in the following
circumstances, any such demand shall also be deemed to have been
given one Business Day prior to each of (A) the Revolving
Commitment Termination Date, (B) the occurrence of any Bankruptcy
Event, (C) upon acceleration of the Credit Party Obligations
hereunder, whether on account of a Bankruptcy Event or any other
Event of Default, and (D) the exercise of remedies in accordance
with the provisions of Section 7.2 hereof (each such Revolving Loan
borrowing made on account of any such deemed request therefor as
provided herein being hereinafter referred to as “Mandatory
Swingline Borrowing”). Each Revolving Lender hereby irrevocably
agrees to make such Revolving Loans promptly upon any such request
or deemed request on account of each Mandatory Swingline Borrowing
in the amount and in the manner specified in the preceding sentence
and on the same such date notwithstanding (1) the amount of
Mandatory Swingline Borrowing may not comply with the minimum
amount for borrowings of Revolving Loans otherwise required

36

 

hereunder, (2) whether any conditions specified in Section 4.2
are then satisfied, (3) whether a Default or an Event of Default
then exists, (4) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required in
Section 2.1(b)(i), (5) the date of such Mandatory Swingline
Borrowing, or (6) any reduction in the Revolving Committed Amount
or termination of the Revolving Commitments immediately prior to
such Mandatory Swingline Borrowing or contemporaneously therewith.
In the event that any Mandatory Swingline Borrowing cannot for any
reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code), then each Revolving Lender hereby
agrees that it shall forthwith purchase (as of the date the
Mandatory Swingline Borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) from the Swingline Lender
such participations in the outstanding Swingline Loans as shall be
necessary to cause each such Revolving Lender to share in such
Swingline Loans ratably based upon its respective Revolving
Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2); provided
that (x) all interest payable on the Swingline Loans shall be for
the account of the Swingline Lender until the date as of which the
respective participation is purchased, and (y) at the time any
purchase of participations pursuant to this sentence is actually
made, the purchasing Revolving Lender shall be required to pay to
the Swingline Lender interest on the principal amount of such
participation purchased for each day from and including the day
upon which the Mandatory Swingline Borrowing would otherwise have
occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Swingline Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate equal to the
Alternate Base Rate.

     (c) Interest on Swingline Loans. Subject to the provisions of
Section 2.9(b), Swingline Loans shall bear interest at a per annum rate
equal to the Alternate Base Rate plus the Applicable Percentage for
Revolving Loans that are Alternate Base Rate Loans. Interest on
Swingline Loans shall be payable in arrears on each Interest Payment
Date.

     (d) Swingline Note. The Swingline Loans shall be evidenced by a
duly executed promissory note of the Borrower to the Swingline Lender in
the original amount of the Swingline Committed Amount and substantially
in the form of Schedule 2.4(d).

     (e) Repayments of Participations. At any time after any Lender has
purchased and funded a risk participation in a Swingline Loan in
accordance with clause (b) above, if the Swingline Lender receives any
payment on account of such Swingline Loan, the Swingline Lender will
distribute to such Lender its pro rata share (based on its Revolving
Commitment Percentage) of such payment (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which
such Lender’s risk participation was funded) in the same funds as those
received by the Swingline Lender

37

 

     Section 2.5. Incremental Facility.

     Subject to the terms and conditions set forth herein, the Borrower shall
have the right, at any time and from time to time, to incur additional
Indebtedness under this Credit Agreement in the form of one or more additional
term loan facilities (each an “Incremental Facility”) by an aggregate amount of
up to $100,000,000. The following terms and conditions shall apply to each
Incremental Facility: (a) the loans made under any such Incremental Facility
(each an “Additional Loan”) shall constitute Credit Party Obligations and will
be secured and guaranteed with the other Loans on a pari passu basis, (b) the
interest rate margin applicable to such Incremental Facility shall be the
Applicable Percentage for the Tranche B Term Loan (c) the weighted average life
and final maturity applicable to any such Incremental Facility shall be
determined at the time such Incremental Facility is made available (provided
that (i) such Incremental Facility shall mature no earlier than the Tranche B
Term Loan Maturity Date and (ii) no greater than 5% of the Incremental Facility
shall amortize prior to the date that is one year before the Tranche B Term
Loan Maturity Date), (d) any such Incremental Facility shall be entitled to the
same voting rights as the existing Loans and shall be entitled to receive
proceeds of prepayments on the same basis as comparable Loans, (e) any such
Incremental Facility shall be obtained from existing Lenders or from other
banks, financial institutions or investment funds, in each case in accordance
with the terms set forth below, (f) any such Incremental Facility shall be in a
minimum principal amount of $25,000,000 and integral multiples of $1,000,000 in
excess thereof, (g) the proceeds of any Additional Loan will be used to finance
capital expenditures and working capital and other general corporate purposes,
including Permitted Acquisitions, (h) the conditions to Extensions of Credit in
Section 4.2 shall have been satisfied and (i) the Administrative Agent shall
have received from the Borrower updated financial projections and an officer’s
certificate, in each case in form and substance satisfactory to the
Administrative Agent, demonstrating that, after giving effect to any such
Incremental Facility, the Borrower will be in compliance with the financial
covenants set forth in Section 5.9. Participation in any such Incremental
Facility hereunder shall be offered first to each of the existing Lenders, but
each such Lender shall have no obligation to provide all or any portion of such
Incremental Facility. If the amount of the Incremental Facility requested by
the Borrower shall exceed the commitments which the existing Lenders are
willing to provide with respect to such Incremental Facility, then the Borrower
may invite other banks, financial institutions and investment funds reasonably
acceptable to the Administrative Agent to join this Credit Agreement as Lenders
hereunder for the portion of such Incremental Facility not taken by existing
Lenders, provided that such other banks, financial institutions and investment
funds shall enter into such joinder agreements to give effect thereto as the
Administrative Agent and the Borrower may reasonably request. The
Administrative Agent is authorized to enter into, on behalf of the Lenders, any
amendment to this Credit Agreement or any other Credit Document as may be
necessary to incorporate the terms of any new Incremental Facility therein.

     Section 2.6. Fees.

     (a) Commitment Fee. In consideration of the Revolving Commitment,
the Borrower agrees to pay to the Administrative Agent, for the ratable
benefit of the Revolving Lenders, a commitment fee (the “Commitment Fee”)
in an amount equal to the Applicable Percentage per annum on the average
daily unused amount of the Revolving Committed Amount. For purposes of
computation of the Commitment Fee, LOC

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Obligations shall be considered usage but Swingline Loans shall not be
considered usage of the Revolving Committed Amount. The Commitment Fee shall
be payable quarterly in arrears on the last Business Day of each calendar quarter.

     (b) Letter of Credit Fees. In consideration of the LOC Commitments,
the Borrower agrees to pay to the Administrative Agent, for the ratable
benefit of the Revolving Lenders, a fee (the “Letter of Credit Fee”)
equal to the Applicable Percentage for Revolving Loans that are LIBOR
Rate Loans per annum on the average daily maximum amount available to be
drawn under each Letter of Credit from the date of issuance to the date
of expiration. In addition to such Letter of Credit Fee, the Borrower
agrees to pay to the Issuing Lender, for its own account without sharing
by the other Lenders, an additional fronting fee (the “Fronting Fee”) of
one-eighth of one percent (0.125%) per annum on the average daily maximum
amount available to be drawn under each such Letter of Credit issued by
it. The Letter of Credit Fee and the Fronting Fee shall each be payable
quarterly in arrears on the last Business Day of each calendar quarter.

     (c) Issuing Lender Fees. In addition to the Letter of Credit Fees
and Fronting Fees payable pursuant to subsection (b) hereof, the Borrower
shall pay to the Issuing Lender for its own account without sharing by
the other Lenders the reasonable and customary charges from time to time
of the Issuing Lender with respect to the amendment, transfer,
administration, cancellation and conversion of, and drawings under, such
Letters of Credit (collectively, the “Issuing Lender Fees”).

     (d) Administrative Fee. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the
Fee Letter.

     (e) Ticking Fee. The Borrower agrees to pay to the Administrative
Agent, for the pro rata benefit of the Term Loan Lenders, a ticking fee
(the “Ticking Fee”) in an amount equal to 0.375% per annum on the
aggregate amount of the Tranche B Term Loan Committed Amount (computed on
the basis of the actual number of days elapsed over a 360-day year),
which Ticking Fee shall accrue from the Closing Date to, and shall be
payable in full to the Administrative Agent on, the earlier to occur of
(i) the Tranche B Term Loan Funding Date and (ii) sixty (60) days after
the Closing Date, regardless of whether the Tranche B Term Loan Funding
Date actually occurs (the “Ticking Fee Payment Date”). With respect to
any Person that becomes a Term Loan Lender in connection with the primary
syndication of the Tranche B Term Loan, such Term Loan Lender shall be
entitled to receive its pro rata share of the Ticking Fee for the period
(A) from the Closing Date to the Ticking Fee Payment Date if such Person
executes and delivers to the Administrative Agent a forward purchase
confirmation, in form and substance satisfactory to the Administrative
Agent, within seven (7) Business Days following the Closing Date, or (B)
from the date such Person executes and delivers to the Administrative
Agent a forward purchase confirmation (to the extent delivered on or
after the eighth (8th) Business Day following the Closing Date), in form
and substance satisfactory to the Administrative Agent, to the Ticking
Fee Payment Date.

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     Section 2.7. Commitment Reductions.

     (a) Voluntary Reductions. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Revolving
Committed Amount at any time or from time to time upon not less than five
(5) Business Days’ prior written notice to the Administrative Agent
(which shall notify the Lenders thereof as soon as practicable) of each
such termination or reduction, which notice shall specify the effective
date thereof and the amount of any such reduction which shall be in a
minimum amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and shall be irrevocable and effective upon receipt by the
Administrative Agent; provided that no such reduction or termination
shall be permitted if after giving effect thereto, and to any prepayments
of the Revolving Loans made on the effective date thereof, the sum of the
then outstanding aggregate principal amount of the outstanding Revolving
Loans plus outstanding Swingline Loans plus outstanding LOC Obligations
would exceed the Revolving Committed Amount then in effect.

     (b) Maturity Date. The Revolving Commitment, the LOC Commitment and
the Swingline Commitment shall automatically terminate on the Revolving
Commitment Termination Date, unless terminated sooner pursuant to Section
7.2.

     Section 2.8. Prepayments.

     (a) Optional Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that each partial prepayment of LIBOR Rate Loans shall be in a minimum
principal amount of $5,000,000 and integral multiples of $1,000,000 in
excess thereof, and each partial prepayment of Base Rate Loans and/or a
Swingline Loan shall be in a minimum principal amount of $500,000 and
integral multiples of $100,000 in excess thereof. The Borrower shall
give three (3) Business Days’ irrevocable notice in the case of LIBOR
Rate Loans and same-day irrevocable notice on any Business Day in the
case of Alternate Base Rate Loans, to the Administrative Agent (which
shall notify the Lenders thereof as soon as practicable). To the extent
that the Borrower elects to prepay the Tranche B Term Loans, amounts
prepaid under this Section 2.8(a) shall be applied, first, to the
immediately next-following four scheduled installments of principal
payable with respect to the Tranche B Term Loans, in the order of their
maturity, then to the remaining scheduled installments of principal
payable with respect to the Tranche B Term Loans, in the inverse order of
maturity, each such application to be made, first to Alternate Base Rate
Loans and then to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.8(a) shall be subject
to Section 2.17, but otherwise without premium or penalty. Interest on
the principal amount prepaid shall be payable on the next occurring
Interest Payment Date that would have occurred had such loan not been
prepaid or, at the request of the Administrative Agent, interest on the
principal amount prepaid shall be payable on any date that a prepayment
is made hereunder through the date of prepayment. Amounts prepaid on the
Revolving Loans and the Swingline Loans may be reborrowed in accordance
with the terms hereof. Amounts prepaid on the Tranche B Term Loan may
not be reborrowed.

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     (b) Mandatory Prepayments.

     (1) Revolving Committed Amount. If at any time after the
Closing Date, the sum of the aggregate principal amount of
outstanding Revolving Loans plus outstanding Swingline Loans plus
outstanding LOC Obligations shall exceed the Revolving Committed
Amount then in effect, the Borrower immediately shall prepay the
Revolving Loans and Swingline Loans and (after all Revolving Loans
and Swingline Loans have been repaid) cash collateralize the LOC
Obligations in an amount sufficient to eliminate such excess.

     (2) Excess Cash Flow. Within ninety (90) days after the end
of each fiscal year (commencing with the fiscal year ending October
29, 2005), the Borrower shall prepay the Loans and/or cash
collateralize the LOC Obligations in an amount equal to the sum of
(A) 50% of the Excess Cash Flow earned during such prior fiscal
year minus (B) the aggregate amount of voluntary prepayments of the
Term Loans made during such prior fiscal year pursuant to Section
2.8(a); provided, that if the Leverage Ratio is less than or equal
to 2.50 to 1.0 as of the end of any fiscal year, the Borrower shall
not be required to prepay the Loans and/or cash collateralize the
LOC Obligations on account of the Excess Cash Flow earned during
such prior fiscal year. Any payments of Excess Cash Flow shall be
applied as set forth in clause (vii) below.

     (3) Asset Dispositions. Promptly following any Asset
Disposition (or related series of Asset Dispositions), the Borrower
shall prepay the Loans and/or cash collateralize the LOC
Obligations in an aggregate amount equal to 100% of the Net Cash
Proceeds derived from such Asset Disposition (or related series of
Asset Dispositions) (such prepayment to be applied as set forth in
clause (vii) below); provided, however, that such Net Cash Proceeds
shall not be required to be so applied (A) until the aggregate
amount of Asset Dispositions in any fiscal year is equal to or
greater than $250,000 and (B) to the extent the Borrower delivers
to the Administrative Agent a certificate stating that it intends
to use such Net Cash Proceeds to acquire fixed or capital assets
(including fixed or capital assets acquired by reason of a
Permitted Acquisition) which will become Collateral in replacement
of the disposed assets within 180 days of the receipt of such Net
Cash Proceeds, it being expressly agreed that any Net Cash Proceeds
not reinvested within such 180 day period shall be applied to repay
the Loans and/or cash collateralize the LOC Obligations immediately
thereafter.

     (4) Debt Issuances. Immediately upon receipt by any Credit
Party or any of its Subsidiaries of proceeds from any Debt
Issuance, the Borrower shall prepay the Loans and/or cash
collateralize the LOC Obligations in an aggregate amount equal to
100% of the Net Cash Proceeds of such Debt Issuance (such
prepayment to be applied as set forth in clause (vii) below);
provided, however, that such Net Cash Proceeds shall not be
required to be so applied to the extent the Borrower delivers to
the Administrative Agent a certificate stating that it intends to
use such Net Cash Proceeds to finance a Permitted Acquisition
within 90 days (provided that (A) if during such 90 day period any
Credit Party enters

41

 

into a definitive purchase agreement or binding letter of
intent with respect to a Permitted Acquisition and (B) if the
Leverage Ratio as of the most recent fiscal quarter ended prior to
such Debt Issuance is less than 3.0 to 1.0, then within 180 days)
of the receipt of such Net Cash Proceeds, it being expressly agreed
that any Net Cash Proceeds not used in connection with a Permitted
Acquisition within such period shall be applied to repay the Loans
and/or cash collateralize the LOC Obligations immediately
thereafter.

     (5) Issuances of Equity. Immediately upon receipt by any
Credit Party or any of its Subsidiaries of proceeds from any Equity
Issuance, the Borrower shall prepay the Loans and/or cash
collateralize the LOC Obligations in an aggregate amount equal to
50% of the Net Cash Proceeds of such Equity Issuance (such
prepayment to be applied as set forth in clause (vii) below);
provided, however, that such Net Cash Proceeds shall not be
required to be so applied to the extent the Borrower delivers to
the Administrative Agent a certificate stating that it intends to
use such Net Cash Proceeds to finance a Permitted Acquisition
within 90 days (provided that (A) if during such 90 day period any
Credit Party enters into a definitive purchase agreement or binding
letter of intent with respect to a Permitted Acquisition and (B) if
the Leverage Ratio as of the most recent fiscal quarter ended prior
to such Equity Issuance is less than 3.0 to 1.0, then within 180
days) of the receipt of such Net Cash Proceeds, it being expressly
agreed that any Net Cash Proceeds not used in connection with a
Permitted Acquisition within such period shall be applied to repay
the Loans and/or cash collateralize the LOC Obligations immediately
thereafter.

     (6) Recovery Event. To the extent Net Cash Proceeds received
in connection with any Recovery Event are not used to acquire fixed
or capital assets in replacement of the assets subject to such
Recovery Event within 180 days of the receipt of such Net Cash
Proceeds, immediately following the 180th day occurring after the
receipt of such Net Cash Proceeds, the Borrower shall prepay the
Loans and/or cash collateralize the LOC Obligations in an aggregate
amount equal to one hundred percent (100%) of such Net Cash
Proceeds not so used (such prepayment to be applied as set forth in
clause (vii) below); provided that the Net Cash Proceeds from
Recovery Events in any fiscal year shall not be required to be so
applied until the aggregate amount of such Net Cash Proceeds is
equal to or greater than $250,000.

     (7) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.8(b) shall be
applied as follows: (A) with respect to all amounts prepaid
pursuant to Section 2.8(b)(i), (1) first to the outstanding
Swingline Loans, (2) second to the outstanding Revolving Loans and
(3) third, to a cash collateral account in respect of LOC
Obligations and (B) with respect to all amounts prepaid pursuant to
Sections 2.8(b)(ii) through (vi), (1) first to the Tranche B Term
Loan (pro rata to the remaining amortization payments set forth in
Section 2.2(b)); (2) second to outstanding Swingline Loans (without
a corresponding permanent reduction in the Revolving Committed
Amount), (3) third to the outstanding Revolving Loans (without a
corresponding permanent

42

 

reduction in the Revolving Committed Amount) and (4) fourth to
a cash collateral account in respect of LOC Obligations. Within
the parameters of the applications set forth above, prepayments
shall be applied first to Alternate Base Rate Loans and then to
LIBOR Rate Loans in direct order of Interest Period maturities.
All prepayments under this Section 2.8(b) shall be subject to
Section 2.17 and be accompanied by interest on the principal amount
prepaid through the date of prepayment.

     (c) Hedging Obligations Unaffected. Any repayment or prepayment
made pursuant to this Section 2.8 shall not affect the Borrower’s
obligation to continue to make payments under any Secured Hedging
Agreement, which shall remain in full force and effect notwithstanding
such repayment or prepayment, subject to the terms of such Secured
Hedging Agreement.

     Section 2.9. Default Rate and Payment Dates.

     (a) If all or a portion of the principal amount of any Loan which is
a LIBOR Rate Loan shall not be paid when due or continued as a LIBOR Rate
Loan in accordance with the provisions of Section 2.10 (whether at the
stated maturity, by acceleration or otherwise), such overdue principal
amount of such Loan shall be converted to an Alternate Base Rate Loan at
the end of the Interest Period applicable thereto.

     (b) (i) If all or a portion of the principal amount of any LIBOR
Rate Loan shall not be paid when due, such overdue amount shall bear
interest at a rate per annum which is equal to the rate that would
otherwise be applicable thereto plus 2%, until the end of the Interest
Period applicable thereto, and thereafter at a rate per annum which is
equal to the Alternate Base Rate plus the sum of the Applicable
Percentage then in effect for Alternate Base Rate Loans and 2% (the “ABR
Default Rate”) or (ii) if any interest payable on the principal amount of
any Loan or any fee or other amount, including the principal amount of
any Alternate Base Rate Loan, payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum which is equal to
the ABR Default Rate, in each case from the date of such non-payment
until such amount is paid in full (after as well as before judgment).
Furthermore, upon the occurrence, and during the continuance, of any
Event of Default hereunder, at the option of the Required Lenders, the
principal of and, to the extent permitted by law, interest on the Loans
and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate which is (A)
in the case of principal, the rate that would otherwise be applicable
thereto plus 2% or (B) in the case of interest, fees or other amounts,
the ABR Default Rate (after as well as before judgment).

     (c) Interest on each Loan shall be payable in arrears on each
Interest Payment Date; provided that interest accruing pursuant to
paragraph (b) of this Section 2.9 shall be payable from time to time on
demand.

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     Section 2.10. Conversion Options.

     (a) The Borrower may, in the case of the Revolving Loans and the
Tranche B Term Loan, elect from time to time to convert Alternate Base
Rate Loans to LIBOR Rate Loans by giving the Administrative Agent at
least three Business Days’ prior irrevocable written notice of such
election. In addition, the Borrower may elect from time to time to
convert LIBOR Rate Loans to Alternate Base Rate Loans by giving the
Administrative Agent irrevocable written notice by 11:00 A.M. one
Business Date prior to the proposed date of conversion. A form of Notice
of Conversion is attached as Schedule 2.10. If the date upon which an
Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a
Business Day, then such conversion shall be made on the next succeeding
Business Day. All or any part of outstanding Alternate Base Rate Loans
may be converted as provided herein; provided that (i) no Loan may be
converted into a LIBOR Rate Loan when any Default or Event of Default has
occurred and is continuing and (ii) partial conversions shall be in an
aggregate principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. LIBOR Rate Loans may only be converted to
alternate Base Rate Loans on the last day of the applicable Interest
Period. If the date upon which a LIBOR Rate Loan is to be converted to
an Alternate Base Rate Loan is not a Business Day, then such conversion
shall be made on the next succeeding Business Day and during the period
from such last day of an Interest Period to such succeeding Business Day
such Loan shall bear interest as if it were an Alternate Base Rate Loan.

     (b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
the Borrower with the notice provisions contained in Section 2.10(a);
provided, that no LIBOR Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, in which case
such Loan shall be automatically converted to an Alternate Base Rate Loan
at the end of the applicable Interest Period with respect thereto. If
the Borrower shall fail to give timely notice of an election to continue
a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not
permitted hereunder, such LIBOR Rate Loans shall be automatically
converted to Alternate Base Rate Loans at the end of the applicable
Interest Period with respect thereto.

     Section 2.11. Computation of Interest and Fees.

     (a) Interest payable hereunder with respect to any Alternate Base
Rate Loan based on the Prime Rate shall be calculated on the basis of a
year of 365 days (or 366 days, as applicable) for the actual days
elapsed. All fees, interest and all other amounts payable hereunder
shall be calculated on the basis of a 360 day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify
the Borrower and the Lenders of each determination of a LIBOR Rate on the
Business Day of the determination thereof. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such
change in the Alternate Base Rate shall become effective. The
Administrative Agent shall as soon as practicable notify the Borrower and
the Lenders of the effective date and the amount of each such change.

44

 

     (b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Credit Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the Borrower a statement showing the computations
used by the Administrative Agent in determining any interest rate.

     (c) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Lenders and the
Credit Parties are hereby limited by the provisions of this paragraph
which shall override and control all such agreements, whether now
existing or hereafter arising and whether written or oral. In no way,
nor in any event or contingency (including but not limited to prepayment
or acceleration of the maturity of any Obligation), shall the interest
taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious
amount permissible under applicable law. If, from any possible
construction of any of the Credit Documents or any other document,
interest would otherwise be payable in excess of the maximum nonusurious
amount, any such construction shall be subject to the provisions of this
paragraph and such interest shall be automatically reduced to the maximum
nonusurious amount permitted under applicable law, without the necessity
of execution of any amendment or new document. If any Lender shall ever
receive anything of value which is characterized as interest on the Loans
under applicable law and which would, apart from this provision, be in
excess of the maximum nonusurious amount, an amount equal to the amount
which would have been excessive interest shall, without penalty, be
applied to the reduction of the principal amount owing on the Loans and
not to the payment of interest, or refunded to the Borrower or other
payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right
to demand payment of the Loans or any other Indebtedness evidenced by any
of the Credit Documents does not include the right to receive any
interest which has not otherwise accrued on the date of such demand, and
the Lenders do not intend to charge or receive any unearned interest in
the event of such demand. All interest paid or agreed to be paid to the
Lenders with respect to the Loans shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout
the full stated term (including any renewal or extension) of the Loans so
that the amount of interest on account of such indebtedness does not
exceed the maximum nonusurious amount permitted by applicable law.

     Section 2.12. Pro Rata Treatment and Payments.

     (a) Allocation of Payments Before Event of Default. Each borrowing
of Revolving Loans and any reduction of the Revolving Commitments shall
be made pro rata according to the respective Revolving Commitment
Percentages of the Lenders. Each payment under this Credit Agreement or
any Note shall be applied, first, to any fees then due and owing by the
Borrower pursuant to Section 2.6, second, except as set forth in Section
2.8(a), to interest then due and owing hereunder and under the Notes and,
third, to principal then due and owing hereunder and under the Notes.
Each payment on account of any fees pursuant to Section 2.6 shall be made
pro rata in accordance with the

45

 

respective amounts due and owing (except as to the Fronting Fees and
the Issuing Lender Fees). Each payment (other than prepayments) by the
Borrower on account of principal of and interest on the Revolving Loans
and on the Tranche B Term Loan shall be applied to such Loans as directed
by the Borrower or otherwise applied in accordance with the terms of
Section 2.8(a) hereof. Each optional prepayment on account of principal
of the Loans shall be applied in accordance with Section 2.8(a);
provided, that prepayments made pursuant to Section 2.17 shall be applied
in accordance with such Section. Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section
2.8(b). All payments (including prepayments) to be made by the Borrower
on account of principal, interest and fees shall be made without defense,
set-off or counterclaim (except as provided in Section 2.18(b)) and shall
be made to the Administrative Agent for the account of the Lenders at the
Administrative Agent’s office specified on Section 9.2 in Dollars and in
immediately available funds not later than 1:00 P.M. on the date when
due. The Administrative Agent shall distribute such payments to the
Lenders entitled thereto promptly upon receipt in like funds as received.
If any payment hereunder (other than payments on the LIBOR Rate Loans)
becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Rate
Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.

     (b) Allocation of Payments After Exercise of Remedies.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the exercise of remedies (other than the invocation of
default interest pursuant to Section 2.9(b) by the Administrative Agent
or the Lenders pursuant to Section 7.2 (or after the Commitments shall
automatically terminate and the Loans (with accrued interest thereon) and
all other amounts under the Credit Documents (including without
limitation the maximum amount of all contingent liabilities under Letters
of Credit) shall automatically become due and payable in accordance with
the terms of such Section), all amounts collected or received by the
Administrative Agent or any Lender on account of the Credit Party
Obligations or any other amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered
as follows:

     FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys’ fees) of the
Administrative Agent in connection with enforcing the rights of the
Lenders under the Credit Documents and any protective advances made by
the Administrative Agent with respect to the Collateral under or pursuant
to the terms of the Collateral Documents;

     SECOND, to the payment of any fees owed to the Administrative Agent;

     THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys’ fees) of
each of the Lenders in

46

 

connection with enforcing its rights under the Credit Documents or
otherwise with respect to the Credit Party Obligations owing to such
Lender;

     FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest, including, with respect to any
Secured Hedging Agreement, any fees, premiums and scheduled periodic
payments due under such Secured Hedging Agreement and any interest
accrued thereon;

     FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations and the payment or cash collateralization of the
outstanding LOC Obligations, including, with respect to any Secured
Hedging Agreement, any breakage, termination or other payments due under
such Hedging Agreement and any interest accrued thereon;

     SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH”
above; and

     SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; (ii) each of the Lenders and any Hedging
Agreement Providers shall receive an amount equal to its pro rata share
(based on the proportion that the then outstanding Loans and LOC
Obligations held by such Lender or the outstanding obligations payable to
such Hedging Agreement Provider bears to the aggregate then outstanding
Loans, LOC Obligations and obligations payable under all Secured Hedging
Agreements) of amounts available to be applied pursuant to clauses
“THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent
that any amounts available for distribution pursuant to clause “FIFTH”
above are attributable to the issued but undrawn amount of outstanding
Letters of Credit, such amounts shall be held by the Administrative Agent
in a cash collateral account and applied (A) first, to reimburse the
Issuing Lender from time to time for any drawings under such Letters of
Credit and (B) then, following the expiration of all Letters of Credit,
to all other obligations of the types described in clauses “FIFTH” and
“SIXTH” above in the manner provided in this Section 2.12(b).
Notwithstanding the foregoing terms of this Section 2.12(b), only
Collateral proceeds and payments under the Guaranty shall be applied to
obligations under any Secured Hedging Agreement.

     Section 2.13. Non-Receipt of Funds by the Administrative Agent.

     (a) Unless the Administrative Agent shall have been notified in
writing by a Lender prior to the date a Loan is to be made by such Lender
(which notice shall be effective upon receipt) that such Lender does not
intend to make the proceeds of such Loan available to the Administrative
Agent, the Administrative Agent may assume that such Lender has made such
proceeds available to the Administrative Agent on such date, and the
Administrative Agent may in reliance upon such assumption (but shall not
be

47

 

required to) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent’s
demand therefor, the Administrative Agent will promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also
be entitled to recover from the Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is recovered
by the Administrative Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for the applicable borrowing pursuant to
the Notice of Borrowing and (ii) from a Lender at the Federal Effective
Funds Rate.

     (b) Unless the Administrative Agent shall have been notified in
writing by the Borrower, prior to the date on which any payment is due
from it hereunder (which notice shall be effective upon receipt) that the
Borrower does not intend to make such payment, the Administrative Agent
may assume that the Borrower has made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not
be required to) make available to each Lender on such payment date an
amount equal to the portion of such assumed payment to which such Lender
is entitled hereunder, and if the Borrower has not in fact made such
payment to the Administrative Agent, such Lender shall, on demand, repay
to the Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after the
date such amount was made available to such Lender, such Lender shall pay
to the Administrative Agent on demand interest on such amount in respect
of each day from the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is recovered
by the Administrative Agent at a per annum rate equal to the Federal
Funds Effective Rate.

     (c) A certificate of the Administrative Agent submitted to the
Borrower or any Lender with respect to any amount owing under this
Section 2.13 shall be conclusive in the absence of manifest error.

     Section 2.14. Inability to Determine Interest Rate.

     Notwithstanding any other provision of this Credit Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding
absent manifest error) that the LIBOR Rate does not adequately and fairly
reflect the cost to such Lenders of funding LIBOR Rate Loans that the Borrower
has requested be outstanding as a LIBOR Tranche during such Interest Period,
the Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes

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to rescind or modify its request regarding such LIBOR Rate Loans, any Loans
that were requested to be made as LIBOR Rate Loans shall be made as Alternate
Base Rate Loans and any Loans that were requested to be converted into or
continued as LIBOR Rate Loans shall remain as or be converted into Alternate
Base Rate Loans. Until any such notice has been withdrawn by the
Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the Interest Periods so affected.

     Section 2.15. Illegality.

     Notwithstanding any other provision of this Credit Agreement, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or
maintain LIBOR Rate Loans as contemplated by this Credit Agreement or to obtain
in the interbank eurodollar market through its LIBOR Lending Office the funds
with which to make such Loans, (a) such Lender shall promptly notify the
Administrative Agent and the Borrower thereof, (b) the commitment of such
Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such
shall forthwith be suspended until the Administrative Agent shall give notice
that the condition or situation which gave rise to the suspension shall no
longer exist, and (c) such Lender’s Loans then outstanding as LIBOR Rate Loans,
if any, shall be converted on the last day of the Interest Period for such
Loans or within such earlier period as required by law as Alternate Base Rate
Loans. The Borrower hereby agrees promptly to pay any Lender, upon its demand,
any additional amounts necessary to compensate such Lender for actual and
direct costs (but not including anticipated profits) reasonably incurred by
such Lender in making any repayment in accordance with this Section including,
but not limited to, any interest or fees payable by such Lender to lenders of
funds obtained by it in order to make or maintain its LIBOR Rate Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise
be payable pursuant to this Section; provided, however, that such efforts shall
not cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.

     Section 2.16. Requirements of Law.

     (a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to
the date hereof:

     (1) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any participation
therein or any application relating thereto, any LIBOR Rate Loan
made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for changes in the rate of tax on
the overall net income of such Lender);

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     (2) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate
hereunder; or

     (3) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender
of making or maintaining LIBOR Rate Loans or the Letters of Credit or the
participations therein or to reduce any amount receivable hereunder or under
any Note, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such additional cost or reduced amount receivable which such Lender reasonably
deems to be material as determined by such Lender with respect to its LIBOR
Rate Loans or Letters of Credit. A certificate as to any additional amounts
payable pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive in the absence of
manifest error; provided that the Borrower shall not be required to compensate
a Lender pursuant to this Section for any additional amounts due and owing to
the extent such Lender shall have failed to give notice to the Borrower within
90 days after such Lender became aware of the event or occurrence giving rise
to such additional amounts. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office or LIBOR
Lending Office, as the case may be) to avoid or to minimize any amounts which
might otherwise be payable pursuant to this paragraph of this Section;
provided, however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens reasonably deemed
by such Lender to be material.

     (b) If any Lender shall have reasonably determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or
in the interpretation or application thereof or compliance by such Lender
or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from
any central bank or Governmental Authority made subsequent to the date
hereof does or shall have the effect of reducing the rate of return on
such Lender’s or such corporation’s capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s
policies with respect to capital adequacy) by an amount reasonably deemed
by such Lender to be material, then from time to time, within fifteen
(15) days after demand by such Lender, the Borrower shall pay to such
Lender such additional amount as shall be certified by such Lender as
being required to compensate it for such reduction. Such a certificate
as to any additional amounts payable under this Section submitted by a
Lender (which certificate shall include a description of the basis for
the computation), through the Administrative Agent, to the Borrower shall
be conclusive absent manifest error.

     (c) The agreements in this Section 2.16 shall survive the
termination of this Credit Agreement and payment of the Notes and all
other amounts payable hereunder.

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     Section 2.17. Indemnity.

     The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) the failure by the Borrower to pay the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) the failure of the Borrower to accept a borrowing after
the Borrower has given a notice in accordance with the terms hereof, (c) the
failure of the Borrower to make any prepayment after the Borrower has given a
notice in accordance with the terms hereof, and/or (d) the making by the
Borrower of a prepayment of a Loan, or the conversion thereof, on a day which
is not the last day of the Interest Period with respect thereto, in each case
including, but not limited to, any such loss or expense arising from interest
or fees payable by such Lender to lenders of funds obtained by it in order to
maintain its Loans hereunder. A certificate as to any additional amounts
payable pursuant to this Section submitted by any Lender, through the
Administrative Agent, to the Borrower (which certificate must be delivered to
the Administrative Agent within thirty days following such default, prepayment
or conversion) shall be conclusive in the absence of manifest error. The
agreements in this Section shall survive termination of this Credit Agreement
and payment of the Notes and all other amounts payable hereunder.

     Section 2.18. Taxes.

     (a) All payments made by the Borrower hereunder or under any Note
will be, except as provided in Section 2.18(b), made free and clear of,
and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any Governmental Authority or by any
political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding any tax imposed on or measured by the net
income or profits of a Lender pursuant to the laws of the jurisdiction in
which it is organized or the jurisdiction in which the principal office
or applicable lending office of such Lender is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities
with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively
as “Taxes”). If any Taxes are so levied or imposed, the Borrower agrees
to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Credit
Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for
herein or in such Note, except that the Borrower shall not be obligated
to pay any such taxes, charges or similar levies that are incurred or
payable by any Person in connection with any assignment referred to in
Section 9.6(c), any participation referred to in Section 9.6(b) or any
pledge or security interest referred to in Section 9.6(h). The Borrower
will furnish to the Administrative Agent as soon as practicable after the
date the payment of any Taxes is due pursuant to applicable law certified
copies (to the extent reasonably available and required by law) of tax
receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Lender, and reimburse such Lender upon
its written request, for the amount of any Taxes so levied or imposed and
paid by such Lender.

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     (b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Administrative Agent on or prior to the Closing Date, or
in the case of a Lender that is an assignee or transferee of an interest
under this Credit Agreement pursuant to Section 9.6(d) (unless the
respective Lender was already a Lender hereunder immediately prior to
such assignment or transfer), on the date of such assignment or transfer
to such Lender, (i) if the Lender is a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY
(or successor forms) certifying such Lender’s entitlement to a complete
exemption from United States withholding tax with respect to payments to
be made under this Credit Agreement and under any Note, or (ii) if the
Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, either Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY as
set forth in clause (i) above, or (x) a certificate in substantially the
form of Schedule 2.18 (any such certificate, a “Tax Exempt Certificate”)
and (y) two accurate and complete original signed copies of Internal
Revenue Service Form W-8BEN (or successor form) certifying such Lender’s
entitlement to an exemption from United States withholding tax with
respect to payments of interest to be made under this Credit Agreement
and under any Note. In addition, each Lender agrees that it will deliver
upon the Borrower’s request updated versions of the foregoing, as
applicable, whenever the previous certification has become obsolete or
inaccurate in any material respect, together with such other forms as may
be required in order to confirm or establish the entitlement of such
Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Credit Agreement and
any Note. Notwithstanding anything to the contrary contained in Section
2.18(a), but subject to the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law,
to deduct or withhold Taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from
interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. federal income tax purposes to
the extent that such Lender has not provided to the Borrower U.S.
Internal Revenue Service Forms that establish a complete exemption from
such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 2.18(a) hereof to gross-up payments to be made to a
Lender in respect of Taxes imposed by the United States if (I) such
Lender has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section
2.18(b) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do
not establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.18, the Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth
in Section 2.18(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Closing Date in any
applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.

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     (c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR Lending
Office, as the case may be) to avoid or to minimize any amounts which
might otherwise be payable pursuant to this Section; provided, however,
that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in
its sole discretion to be material.

     (d) If the Borrower pays any additional amount pursuant to this
Section 2.18 with respect to a Lender, such Lender shall use reasonable
efforts to obtain a refund of tax or credit against its tax liabilities
on account of such payment; provided that such Lender shall have no
obligation to use such reasonable efforts if either (i) it is in an
excess foreign tax credit position or (ii) it believes in good faith, in
its sole discretion, that claiming a refund or credit would cause adverse
tax consequences to it. In the event that such Lender receives such a
refund or credit, such Lender shall pay to the Borrower an amount that
such Lender reasonably determines is equal to the net tax benefit
obtained by such Lender as a result of such payment by the Borrower. In
the event that no refund or credit is obtained with respect to the
Borrower’s payments to such Lender pursuant to this Section 2.18, then
such Lender shall upon request provide a certification that such Lender
has not received a refund or credit for such payments. Nothing contained
in this Section 2.18 shall require a Lender to disclose or detail the
basis of its calculation of the amount of any tax benefit or any other
amount or the basis of its determination referred to in the proviso to
the first sentence of this Section 2.18 to the Borrower or any other
party.

     (e) The agreements in this Section 2.18 shall survive the
termination of this Credit Agreement and the payment of the Notes and all
other amounts payable hereunder.

     Section 2.19. Indemnification; Nature of Issuing Lender’s Duties.

     (a) In addition to its other obligations under Section 2.3, the
Borrower hereby agrees to protect, indemnify, pay and save the Issuing
Lender and each Revolving Lender harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys’ fees) that the Issuing Lender
or such Revolving Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit or (ii)
the failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called “Government Acts”).

     (b) As between the Borrower and the Issuing Lender and each
Revolving Lender, the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary thereof.
Neither the Issuing Lender nor any Revolving Lender shall be responsible:
(i) for the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or

53

 

in part, that may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Letter of Credit to comply
fully with conditions required in order to draw upon a Letter of Credit;
(iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a
Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of the Issuing Lender
or any Revolving Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the vesting of
the Issuing Lender’s rights or powers hereunder.

     (c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender or any Revolving Lender, under or in connection with
any Letter of Credit or the related certificates, if taken or omitted in
the absence of gross negligence or willful misconduct, shall not put such
Issuing Lender or such Revolving Lender under any resulting liability to
the Borrower. It is the intention of the parties that this Credit
Agreement shall be construed and applied to protect and indemnify the
Issuing Lender and each Revolving Lender against any and all risks
involved in the issuance of the Letters of Credit, all of which risks are
hereby assumed by the Borrower, including, without limitation, any and
all risks of the acts or omissions, whether rightful or wrongful, of any
Government Authority. The Issuing Lender and the Revolving Lenders shall
not, in any way, be liable for any failure by the Issuing Lender or
anyone else to pay any drawing under any Letter of Credit as a result of
any Government Acts or any other cause beyond the control of the Issuing
Lender and the Revolving Lenders.

     (d) Nothing in this Section 2.19 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.3(d)
hereof. The obligations of the Borrower under this Section 2.19 shall
survive the termination of this Credit Agreement. No act or omissions of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender and the Revolving
Lenders to enforce any right, power or benefit under this Credit
Agreement.

     (e) Notwithstanding anything to the contrary contained in this
Section 2.19, the Borrower shall have no obligation to indemnify the
Issuing Lender or any Revolving Lender in respect of any liability
incurred by the Issuing Lender or such Revolving Lender arising out of
the gross negligence or willful misconduct of the Issuing Lender
(including action not taken by the Issuing Lender or such Revolving
Lender), as determined by a court of competent jurisdiction or pursuant
to arbitration.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

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     To induce the Lenders to enter into this Credit Agreement and to make the
Extensions of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to the Administrative Agent and to each Lender that:

     Section 3.1. Financial Condition.

     (a) (i) The audited Consolidated financial statements of the
Borrower and its Subsidiaries for the fiscal years ended 2001, 2002 and
2003, together with the related Consolidated statements of income or
operations, equity and cash flows for the fiscal years ended on such
dates, (ii) the unaudited Consolidated financial statements of the
Borrower and its Subsidiaries for the six-month period ending on the last
day of the month that ended immediately prior to the Closing Date,
together with the related Consolidated statements of income or
operations, equity and cash flows for the six-month period ending on such
date and (iii) a pro forma balance sheet of the Borrower and its
Subsidiaries, giving effect to the initial borrowings and the other
transactions contemplated to occur on the Closing Date, as of the last
day of the month that ended immediately prior to the date twenty (20)
days prior to the Closing Date:

      (A) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as
otherwise expressly noted therein;

      (B) fairly present the financial condition of the
Borrower and its Subsidiaries as of the date thereof
(subject, in the case of the unaudited financial statements,
to normal year-end adjustments and the absence of footnotes)
and results of operations for the period covered thereby; and

      (C) with respect to clause (a)(i) above, show all
material Indebtedness and other liabilities, direct or
contingent, of the Borrower and its Subsidiaries as of the
date thereof, including liabilities for taxes, material
commitments and contingent obligations.

     (b) The projections of the Borrower and its Subsidiaries delivered
to the Administrative Agent on or prior to the Closing Date (consisting
of balance sheets and statements of income and cash flows prepared on a
quarterly basis through the first four complete fiscal quarters after the
Closing Date and thereafter on an annual basis through 2010) have been
prepared in good faith based upon reasonable assumptions.

     Section 3.2. No Change.

     Since November 1, 2003, there has been no development or event which has
had or that the Borrower has reasonably concluded could be expected to have a
Material Adverse Effect.

     Section 3.3. Corporate Existence.

     Each of the Credit Parties (a) is duly organized, validly existing and, to
the extent applicable, in good standing under the laws of the jurisdiction of
its organization, (b) has the requisite power and authority and the legal right
to own and operate all its material property, to

55

 

lease the material property it operates as lessee and to conduct the business
in which it is currently engaged, and (c) is duly qualified to conduct business
and in good standing under the laws of each jurisdiction except where the
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect. The jurisdictions in which the Credit Parties as of the
Closing Date are organized and qualified to do business are described on
Schedule 3.3.

     Section 3.4. Corporate Power; Authorization; Enforceable Obligations.

     Each of the Credit Parties has full power and authority and the legal
right to make, deliver and perform the Credit Documents to which it is party
and has taken all necessary action to authorize the execution, delivery and
performance by it of the Credit Documents to which it is party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery or performance of any
Credit Document by any of the Credit Parties (other than those which have been
obtained or those with respect to which the Borrower has reasonably concluded
that the failure to obtain could not reasonably be expected to have a Material
Adverse Effect) or with the validity or enforceability of any Credit Document
against any of the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party has been duly executed and
delivered on behalf of the applicable Credit Party. Each Credit Document to
which it is a party constitutes a legal, valid and binding obligation of each
such Credit Party, enforceable against such Credit Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

     Section 3.5. Compliance with Laws; No Conflict; No Default.

     (a) The execution, delivery and performance by each Credit Party of
the Credit Documents to which such Credit Party is a party, in accordance
with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of
time, the giving of notice or otherwise, (i) require any Governmental
Approval (other than such Governmental Approvals that have been obtained
or made and not subject to suspension, revocation or termination) or
violate any Requirement of Law relating to such Credit Party, (ii)
conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws, articles of organization, partnership
agreement, operating agreement or other organizational documents of such
Credit Party, any Material Contract to which such Person is a party or by
which any of its properties may be bound or any Governmental Approval
relating to such Person, or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by such Person other than Liens arising under the
Credit Documents.

     (b) Each Credit Party (i) (x) has all Governmental Approvals
required by law for it to conduct its business, each of which is in full
force and effect, (y) each such Governmental Approval is final and not
subject to review on appeal and (z) each such Governmental Approval is
not the subject of any pending or, to the best of its knowledge,

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threatened attack by direct or collateral proceeding, and (ii) is in
compliance with each Governmental Approval applicable to it and in
compliance with all other Requirements of Law relating to it or any of
its respective properties, in each case except to the extent the failure
to obtain such Governmental Approval or failure to comply with such
Governmental Approval or Requirement of Law could not reasonably be
expected to have a Material Adverse Effect. Each Credit Party possesses
or has the right to use, all leaseholds, licenses, easements and
franchises and all authorizations and other rights that are material to
and necessary for the conduct of its business. Except to the extent
noncompliance with the foregoing leaseholds, easements and franchises
could not reasonably be expected to have a Material Adverse Effect, all
of the foregoing are in full force and effect, and the Credit Parties are
in substantial compliance with the foregoing without any known conflict
with the valid rights of others. No event has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any such Governmental Approval, leasehold, license,
easement, franchise or other right, which termination or revocation
could, individually or in the aggregate, reasonably be expected to have
Material Adverse Effect, except that certain of the leasehold interests
of the Credit Parties which, taken in the aggregate, may be material to
the Credit Parties, are tenancies at will which may be terminated by the
lessor thereunder at any time upon delivery of the requisite notice
required by state law.

     (c) None of the Credit Parties is in default under or with respect
to any of its of its Contractual Obligations, or any judgment, order or
decree to which it is a party, in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.

     Section 3.6. No Material Litigation.

     No litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the best knowledge of the Credit
Parties, threatened by or against any of them or against any of their
respective properties or revenues (a) with respect to the Credit Documents or
any Loan or any of the transactions contemplated hereby, or (b) which the
Borrower has reasonably concluded could be expected to have a Material Adverse
Effect.

     Section 3.7. Investment Company Act; PUHCA.

     None of the Credit Parties (a) is an “investment company”, or a company
“controlled” by an “investment company”, within the meaning of the Investment
Company Act of 1940, as amended or (b) is a “holding company,” or a “subsidiary
company” of a “holding company,” or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935.

     Section 3.8. Margin Regulations.

     No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Credit
Parties (a) are not engaged, principally or as one of its important

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activities, in the business of extending credit for the purpose of “purchasing”
or “carrying” “margin stock” within the respective meanings of each of such
terms under Regulation U and (b) taken as a group do not own “margin stock”
except as identified in the financial statements referred to in Section 3.1 and
the aggregate value of all “margin stock” owned by the Credit Parties taken as
a group does not exceed 25% of the value of their assets.

     Section 3.9. ERISA.

     Neither a Reportable Event nor an “accumulated funding deficiency” (within
the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code, except
to the extent that any such occurrence or failure to comply would not
reasonably be expected to have a Material Adverse Effect. No termination of a
Single Employer Plan has occurred resulting in any liability that has remained
underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period which could reasonably be expected to have a Material Adverse
Effect. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount which, as determined in accordance with
GAAP, could reasonably be expected to have a Material Adverse Effect. Neither
the Borrower, nor any Subsidiary of the Borrower nor any Commonly Controlled
Entity is currently subject to any liability for a complete or partial
withdrawal from a Multiemployer Plan that could reasonably be expected to have
a Material Adverse Effect.

     Section 3.10. Environmental Matters.

     The Borrower and its Subsidiaries conduct in the ordinary course of
business a review of the effect of existing Environmental Laws and claims
alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Borrower has reasonably concluded that such
Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     Section 3.11. Use of Proceeds.

     The proceeds of the Extensions of Credit shall be used (i) to refinance
certain existing Indebtedness of the Borrower, (ii) to pay transaction costs
and expenses associated with this Credit Agreement and (iii) for working
capital, permitted capital expenditures and other general corporate purposes.

     Section 3.12. Subsidiaries.

     Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Borrower. Information on such Schedule includes the number
of shares of each class of Capital Stock or other equity interests outstanding;
the number and percentage of outstanding shares of

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each class of stock owned by the Credit Parties or any of their Subsidiaries;
the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and similar rights. The outstanding Capital
Stock and other equity interests of all such Subsidiaries is validly issued,
fully paid and non-assessable and is owned, free and clear of all Liens (other
than those arising under or contemplated in connection with the Credit
Documents).

     Section 3.13. Ownership.

     Each of the Credit Parties is the owner of, and has good and marketable
title to, all of its respective assets, which, together with assets leased or
licensed by the Credit Parties, represents such assets individually or in the
aggregate material to the conduct of the businesses of the Credit Parties,
taken as a whole on the date hereof, and none of such assets is subject to any
Lien other than Permitted Liens. Each Credit Party enjoys peaceful and
undisturbed possession under all of its leases and all such leases are valid
and subsisting and in full force and effect. The Credit Parties have delivered
complete and accurate copies of all material leases to the Administrative
Agent.

     Section 3.14. Indebtedness.

     Except as otherwise permitted under Section 6.1, the Credit Parties have
no Indebtedness.

     Section 3.15. Taxes.

     Each of the Credit Parties has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. None of the Credit Parties is aware as of the Closing
Date of any proposed tax assessments against it or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse Effect.

     Section 3.16. Intellectual Property Rights.

     Each of the Credit Parties and their Subsidiaries owns, or has the legal
right to use, all Intellectual Property necessary for each of them to conduct
its business as currently conducted. Set forth on Schedule 3.16 is a list of
all Intellectual Property owned by each of the Credit Parties and their
Subsidiaries or that the Credit Parties or any of their Subsidiaries has the
right to use. Except as disclosed in Schedule 3.16 hereto, (a) one or more of
the Credit Parties has the right to use the Intellectual Property disclosed in
Schedule 3.16 hereto in perpetuity and without payment of royalties, (b) all
registrations with and applications to Governmental Authorities in respect of
such Intellectual Property are valid and in full force and effect and are not
subject to the payment of any taxes or maintenance fees (except for such taxes
and maintenance fees which are not yet delinquent) or the taking of any
interest therein, held by any of the Credit Parties to maintain their validity
or effectiveness, and (c) there are no restrictions on the direct or indirect
transfer of any Contractual Obligation, or any interest therein, held by any of
the Credit Parties in respect of such Intellectual Property. None of the
Credit Parties is in default (or with the giving

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of notice or lapse of time or both, would be in default) under any license to
use such Intellectual Property; no claim has been asserted and is pending by
any Person challenging or questioning the use of any such Intellectual Property
or the validity or effectiveness of any such Intellectual Property, nor do the
Credit Parties or any of their Subsidiaries know of any such claim; and, to the
knowledge of the Credit Parties or any of their Subsidiaries, the use of such
Intellectual Property by the Credit Parties or any of their Subsidiaries does
not infringe on the rights of any Person. The Credit Parties have recorded or
deposited with and paid to the United States Copyright Office, the Register of
Copyrights, the Copyrights Royalty Tribunal or other Governmental Authority,
all notices, statements of account, royalty fees and other documents and
instruments required under the terms and conditions of any Contractual
Obligation of the Credit Parties and/or under Title 17 of the United States
Code and the rules and regulations issued thereunder (collectively, the
“Copyright Act”), and are not liable to any Person for copyright infringement
under the Copyright Act or any other law, rule, regulation, contract or license
as a result of their business operations. Schedule 3.16 may be updated from
time to time by the Borrower to include new Intellectual Property by giving
written notice thereof to the Administrative Agent.

     Section 3.17. Solvency.

     The fair saleable value of the assets of the Credit Parties and their
respective Subsidiaries, taken as a whole and measured on a going concern
basis, exceeds all probable liabilities, including those to be incurred
pursuant to this Credit Agreement. None of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur
after giving effect to the transactions contemplated by this Credit Agreement,
debts beyond its ability to pay such debts as they become due. In executing
the Credit Documents and consummating the transactions contemplated thereby,
none of the Credit Parties intends to hinder, delay or defraud either present
or future creditors or other Persons to which one or more of the Credit Parties
is or will become indebted.

     Section 3.18. Investments.

     All Investments of each of the Credit Parties are Permitted Investments.

     Section 3.19. Location of Collateral.

     Set forth on Schedule 3.19(a) is a list of the properties of the Credit
Parties and their Subsidiaries with street address, county and state where
located. Set forth on Schedule 3.19(b) is a list of all locations where any
tangible personal property of the Credit Parties and their Subsidiaries is
located, including county and state where located. Set forth on Schedule
3.19(c) is the chief executive office and principal place of business of each
of the Credit Parties and their Subsidiaries. Schedule 3.19(a), 3.19(b) and
3.19(c) may be updated from time to time by the Borrower to include new
properties or locations by giving written notice thereof to the Administrative
Agent.

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     Section 3.20. No Burdensome Restrictions.

     None of the Credit Parties is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

     Section 3.21. Brokers’ Fees.

     None of the Credit Parties and their Subsidiaries has any obligation to
any Person in respect of any finder’s, broker’s, investment banking or other
similar fee in connection with any of the transactions contemplated under the
Credit Documents other than the closing and other fees payable pursuant to this
Credit Agreement and as set forth in the Fee Letter.

     Section 3.22. Labor Matters.

     There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Credit Parties as of the Closing Date, other than
as set forth in Schedule 3.22 hereto, and none of the Credit Parties has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years, other than as set forth in Schedule 3.22
hereto.

     Section 3.23. Accuracy and Completeness of Information.

     All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties in writing to the
Administrative Agent or any Lender for purposes of or in connection with this
Credit Agreement or any other Credit Document, or any transaction contemplated
hereby or thereby, is or will be true and accurate in all material respects and
not incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no fact now known to any of the Credit
Parties which has, or could reasonably be expected to have, a Material Adverse
Effect which fact has not been set forth herein (including the Schedules
attached hereto), in the financial statements of the Credit Parties furnished
to the Administrative Agent and/or the Lenders, or in any certificate, opinion
or other written statement made or furnished by or on behalf of the Credit
Parties to the Administrative Agent and/or the Lenders.

     Section 3.24. Material Contracts.

     Schedule 3.24 sets forth a complete and accurate list of all Material
Contracts of the Credit Parties and their Subsidiaries in effect as of the
Closing Date. Other than as set forth in Schedule 3.24, each such Material
Contract is, and after giving effect to the transactions contemplated by the
Credit Documents will be, in full force and effect in accordance with the terms
thereof.

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     Section 3.25. Insurance.

     The present insurance coverage of the Credit Parties and their
Subsidiaries is outlined as to carrier, policy number, expiration date, type
and amount on Schedule 3.25 and such insurance coverage complies with the
requirements set forth in Section 5.5(b).

     Section 3.26. Security Documents.

     The Security Documents create valid security interests in, and Liens on,
the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements in favor of the Administrative Agent, on behalf of the Lenders, and
on the filing of appropriate termination statements with respect to Liens
securing the obligations of the Credit Parties under the Existing Credit
Agreement) perfected security interests and Liens, prior to all other Liens
other than Permitted Liens.

     Section 3.27. Classification of Senior Indebtedness.

     The Credit Party Obligations constitute “Senior Indebtedness” and
“Designated Senior Debt” under and as defined in any agreement governing any
Subordinated Debt, including, without limitation, the Senior Subordinated
Notes, and the subordination provisions set forth in each such agreement are
legally valid and enforceable against the parties thereto.

     Section 3.28. Foreign Assets Control Regulations, Etc.

     Neither any Credit Party nor any of its Subsidiaries is an “enemy” or an
“ally of the enemy” within the meaning of Section 2 of the Trading with the
Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as
amended. Neither any Credit Party nor any of its Subsidiaries is in violation
of (a) the Trading with the Enemy Act, as amended, (b) any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto or (c) the Patriot Act. None of the Credit Parties (i)
is a blocked person described in section 1 of the Anti-Terrorism Order or (ii)
to the best of its knowledge, engages in any dealings or transactions, or is
otherwise associated, with any such blocked person.

ARTICLE IV

CONDITIONS PRECEDENT

     Section 4.1. Conditions to Closing Date.

     This Credit Agreement shall become effective upon, and the obligation of
each Lender to make the initial Revolving Loans, Tranche B Term Loan and the
Swingline Loan on the Closing Date is subject to, the satisfaction of the
following conditions precedent:

     (a) Execution of Credit Agreement and Credit Documents. The
Administrative Agent shall have received (i) counterparts of this Credit
Agreement, executed by a duly authorized officer of each party hereto,
(ii) for the account of each

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Revolving Lender requesting a promissory note, a Revolving Note,
(iii) for the account of the Swingline Lender, the Swingline Note, (iv)
counterparts of the Security Agreement and the Pledge Agreement, in each
case conforming to the requirements of this Credit Agreement and executed
by duly authorized officers of the Credit Parties or other Persons, as
applicable and (v) counterparts of any other Credit Document, executed by
the duly authorized officers of the parties thereto.

     (b) Authority Documents. The Administrative Agent shall have
received the following:

     (1) Articles of Incorporation; Partnership Agreement. Copies
of the articles or certificate of incorporation or partnership or
other charter documents, of each Credit Party certified to be true
and complete as of a recent date by the appropriate governmental
authority of the state of its organization or formation.

     (2) Resolutions. Copies of resolutions of the board of
directors or other comparable governing body of each Credit Party
approving and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by an officer, general partner or manager of
such Credit Party as of the Closing Date to be true and correct and
in force and effect as of such date.

     (3) Bylaws. A copy of the bylaws, partnership agreement or
other operating agreement of each Credit Party certified by an
officer, general partner or manager of such Credit Party as of the
Closing Date to be true and correct and in force and effect as of
such date.

     (4) Good Standing. Copies of (i) certificates of good
standing, existence or its equivalent with respect to the each
Credit Party certified as of a recent date by the appropriate
governmental authorities of the state of incorporation and each
other state in which such Credit Party is qualified to do business
and (ii) to the extent readily available, a certificate indicating
payment of all corporate and other franchise taxes certified as of
a recent date by the appropriate governmental taxing authorities.

     (5) Incumbency. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary, general
partner or manager to be true and correct as of the Closing Date.

     Each officer’s certificate delivered pursuant to this Section 4.1(b)
shall be substantially in the form of Schedule 4.1(b) hereto.

     (c) Legal Opinions of Counsel. The Administrative Agent shall have
received opinions from counsel to the Credit Parties, dated the Closing
Date and addressed to the Administrative Agent and the Lenders, in form
and substance acceptable to the Administrative Agent.

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     (d) Personal Property Collateral. The Administrative Agent shall
have received, in form and substance satisfactory to the Administrative
Agent:

     (1) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office and the jurisdiction of
formation of each Credit Party and each jurisdiction where any
Collateral is located or where a filing would need to be made in
order to perfect the Administrative Agent’s security interest in
the Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than Permitted
Liens;

     (2) UCC financing statements for each appropriate jurisdiction
as is necessary, in the Agents’ discretion, to perfect the
Administrative Agent’s security interest in the Collateral;

     (3) searches of ownership of each Credit Party’s Intellectual
Property in the appropriate governmental offices;

     (4) such patent/trademark/copyright filings as requested by
the Agents in order to perfect the Administrative Agent’s security
interest in the Credit Parties’ Intellectual Property;

     (5) all stock certificates, if any, evidencing the Capital
Stock pledged to the Administrative Agent pursuant to the Pledge
Agreement, together with duly executed in blank undated stock
powers attached thereto;

     (6) all instruments and chattel paper in the possession of any
of the Credit Parties, together with allonges or assignments as may
be necessary or appropriate to perfect the Administrative Agent’s
security interest in the Collateral;

     (7) duly executed consents as are necessary, in the Agents’
discretion, to perfect the Lenders’ security interest in the
Collateral; and

     (8) in the case of any personal property Collateral located at
premises leased by a Credit Party, such estoppel letters, consents
and waivers from the landlords of such real property that the
Borrower is able to obtain by using its commercially reasonable
efforts.

     (e) Liability and Casualty Insurance. The Administrative Agent
shall have received (i) a report from a third party acceptable to the
Administrative Agent regarding the Credit Parties’ insurance status and
coverage and (ii) copies of insurance policies or certificates of
insurance evidencing liability and casualty insurance (including, but not
limited to, business interruption insurance) meeting the requirements set
forth herein or in the Security Documents. The Administrative Agent
shall be named as loss payee on all casualty insurance policies and as
additional insured on all liability insurance policies, in each case for
the benefit of the Lenders.

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     (f) Fees. The Agents and the Lenders shall have received all fees,
if any, owing pursuant to the Fee Letter and Section 2.6.

     (g) Litigation. There shall not exist any material pending or, to
the knowledge of the Credit Parties, threatened litigation,
investigation, bankruptcy, insolvency, injunction, order or claim that
(i) seeks to enjoin, restrain, restrict, set aside or prohibit, impose
material conditions upon or obtain substantial damages in respect of the
consummation or performance of this Credit Agreement or the other Credit
Documents that has not been settled, dismissed, vacated, discharged or
terminated prior to the Closing Date or (ii) that the Borrower has
reasonably concluded could be expected to have a Material Adverse Effect.

     (h) Solvency Certificate. The Administrative Agent shall have
received an officer’s certificate prepared by the chief financial officer
of the Borrower as to the financial condition, solvency and related
matters of the Credit Parties and their Subsidiaries, after giving effect
to the initial borrowings under the Credit Documents, in substantially
the form of Schedule 4.1(h) hereto.

     (i) Account Designation Letter. The Administrative Agent shall have
received the executed Account Designation Letter in the form of Schedule
1.1(a) hereto.

     (j) Organizational Structure. The corporate or limited partnership
and capital and ownership structure of the Credit Parties shall be as
described on Schedule 3.12. The Agents shall be satisfied with the
management structure, legal structure, voting control, liquidity, total
leverage and total capitalization of the Credit Parties.

     (k) Government Consent. The Administrative Agent shall have
received evidence that all governmental, shareholder and material third
party consents and approvals necessary in connection with the financings
and other transactions contemplated hereby have been obtained and all
applicable waiting periods have expired without any action being taken by
any Governmental Authority that could restrain, prevent or impose any
material adverse conditions on such transactions or that could seek or
threaten any of the foregoing.

     (l) Compliance with Laws. The financings and other transactions
contemplated hereby shall be in compliance with all Requirements of Law.

     (m) Bankruptcy. There shall be no bankruptcy or insolvency
proceedings with respect to Credit Parties or any of their Subsidiaries.

     (n) Existing Indebtedness of the Credit Parties. All of the
existing Indebtedness for borrowed money of the Credit Parties (other
than Indebtedness permitted to exist pursuant to Section 6.1) shall be
repaid in full and all security interests related thereto shall be
terminated on the Closing Date.

     (o) Financial Statements. The Administrative Agent and the Lenders
shall have received copies of the financial statements referred to in
Section 3.1 hereof, each in form and substance satisfactory to it.

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     (p) No Material Adverse Change. Since November 1, 2003, there has
been no material adverse change in the business, properties, prospects,
operations or condition (financial or otherwise) of the Borrower or of
the Credit Parties and their Subsidiaries, taken as a whole, and there
shall not have occurred any material disruption or material adverse
change in the financial, banking or capital markets (including the loan
syndication market) that has impaired or would impair the Arrangers’
ability to syndicate the facilities.

     (q) Financial Condition Certificate. The Administrative Agent shall
have received a certificate or certificates executed by a Responsible
Officer of the Borrower as of the Closing Date stating that (i) no
action, suit, investigation or proceeding is pending, ongoing or, to the
knowledge of any Credit Party, threatened in any court or before any
other Governmental Authority that purports to affect any Credit Party or
any other transaction contemplated by the Credit Documents, which action,
suit, investigation or proceeding the Borrower has reasonably concluded
could be expected to have a Material Adverse Effect and (ii) immediately
after giving effect to this Credit Agreement, the other Credit Documents,
and all the transactions contemplated therein to occur on such date, (A)
no Default or Event of Default exists, (B) all representations and
warranties contained herein and in the other Credit Documents are true
and correct in all material respects, and (C) the Credit Parties are in
compliance with each of the financial covenants set forth in Section 5.9
(as demonstrated through detailed calculations of such financial
covenants on an exhibit to such certificate).

     (r) Leverage Ratio. The Administrative Agent shall have received
evidence that the Leverage Ratio of the Credit Parties and their
Subsidiaries on a Consolidated basis is not greater than 3.00 to 1.0,
calculated on a pro forma basis giving effect to the initial Extensions
of Credit and the transactions to occur on the Closing Date, as of the
most recently ended twelve month period as of the last day of the month
immediately preceding the Closing Date.

     (s) Consolidated EBITDA. The Administrative Agent shall have
received evidence reasonably satisfactory thereto provided by the
Borrower that Consolidated EBITDA is not less than $80,000,000,
calculated on a pro forma basis giving effect to the initial Extensions
of Credit and the transactions to occur on the Closing Date, for the
twelve month period ending as of the last day of the month most recently
preceding the Closing Date for which such statements are available.

     (t) Due Diligence. The Administrative Agent shall have completed
its legal and environmental due diligence of the Borrower and its
Subsidiaries with the scope, content and results of such due diligence to
be satisfactory to the Administrative Agent in its sole discretion.

     (u) Patriot Act Certificate. The Administrative Agent shall have
received, at least five (5) Business Days prior to the Closing Date, a
certificate satisfactory thereto, for benefit of itself and the Lenders,
provided by the Borrower that sets forth information required by the
Patriot Act, including, without limitation, the identity of the Credit
Parties, the name and address of the Credit Parties and other information
that will allow

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the Administrative Agent or any Lender, as applicable, to identify
the Credit Parties in accordance with the Patriot Act.

     (v) Credit Rating. The Borrower shall have obtained a senior
secured credit rating on the Facilities from each of Moody’s and S&P.

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

     Section 4.2. Conditions to All Extensions of Credit.

     The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date
of making such Extension of Credit:

     (a) Representations and Warranties. The representations and
warranties made by the Credit Parties herein, in the Security Documents
or which are contained in any certificate furnished at any time under or
in connection herewith (i) that contain a materiality qualification shall
be true and correct on and as of the date of such Extension of Credit as
if made on and as of such date (except to the extent such representations
and warranties expressly relate to another date in which case such
representations and warranties shall be true and correct as of such date)
and (ii) that do not contain a materiality qualification shall be true
and correct in all material respects on and as of the date of such
Extension of Credit as if made on and as of such date (except for those
that expressly related to an earlier date).

     (b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect
to the Extension of Credit to be made on such date unless such Default or
Event of Default shall have been waived in accordance with this Credit
Agreement.

     (c) Compliance with Commitments. Immediately after giving effect to
the making of any such Extension of Credit (and the application of the
proceeds thereof), (i) the sum of outstanding Revolving Loans plus
outstanding Swingline Loans plus LOC Obligations shall not exceed the
Revolving Committed Amount, (ii) the LOC Obligations shall not exceed the
LOC Committed Amount and (iii) the Swingline Loans shall not exceed the
Swingline Committed Amount.

     (d) Additional Conditions to Revolving Loans. If a Revolving Loan
is requested, all conditions set forth in Section 2.1 shall have been
satisfied.

     (e) Additional Conditions to Letters of Credit. If the issuance of
a Letter of Credit is requested, all conditions set forth in Section 2.3
shall have been satisfied.

     (f) Additional Conditions to Swingline Loans. If a Swingline Loan
is requested, all conditions set forth in Section 2.4 shall have been
satisfied.

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     (g) Additional Conditions to Incremental Facility. If an Additional
Loan is requested, all conditions set forth in Section 2.5 shall have
been satisfied.

     Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute
representations and warranties by the Credit Parties as of the date of such
Extension of Credit that the conditions set forth above in paragraphs (a)
through (c) and in paragraph (d), (e), (f) or (g), as applicable, have been
satisfied.

     Section 4.3. Conditions to Funding of Tranche B Term Loan.

     The obligation of each Term Loan Lender to make its Tranche B Term Loan
Commitment Percentage of the Tranche B Term Loan Committed Amount available to
the Borrower is subject to the satisfaction of the following conditions
precedent:

     (a) Financial Condition Certificate. The Administrative Agent shall
have received a certificate or certificates executed by a Responsible
Officer of the Borrower as of the Tranche B Term Loan Funding Date
stating that (i) no Default or Event of Default exists and (ii) all
representations and warranties made by the Credit Parties herein, in the
Security Documents or which are contained in any certificate furnished at
any time under or in connection herewith (i) that contain a materiality
qualification shall be true and correct on and as of the Tranche B Term
Loan Funding Date as if made on and as of such date (except to the extent
such representations and warranties expressly relate to another date in
which case such representations and warranties shall be true and correct
as of such date) and (ii) that do not contain a materiality qualification
shall be true and correct in all material respects on and as of the
Tranche B Term Loan Funding Date as if made on and as of such date
(except for those that expressly related to an earlier date).

     (b) Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing requesting that the Tranche B Term Loan be
funded at least three (3) Business Days prior to the proposed Tranche B
Term Loan Funding Date.

     (c) Repayment of Senior Subordinated Notes. The Administrative
Agent shall have received evidence that all Indebtedness and other
obligations of the Credit Parties and their Subsidiaries under the Senior
Subordinated Notes have been, or concurrently with the Tranche B Term
Loan Funding Date are being terminated and are being paid or satisfied in
full (it being understood that the irrevocable deposit of money
sufficient to pay the redemption price of and accrued interest on all
Senior Subordinated Notes with the trustee or with the paying agent on
the Tranche B Term Loan Funding Date shall be sufficient evidence for
this clause (c)).

     (d) Ticking Fee. The Administrative Agent shall have received the
Ticking Fee owing pursuant to Section 2.6(e).

     (e) Tranche B Term Notes. The Administrative Agent shall have
received for the account of each Lender with a Tranche B Term Loan
Commitment that has requested a promissory note at least two (2) Business
Days prior to the Tranche B Term Loan Funding Date, a Tranche B Term
Note.

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     (f) Solvency Certificate. The Administrative Agent shall have
received an officer’s certificate from the chief financial officer of the
Borrower as to the financial condition, solvency and related matters of
each Credit Party after giving effect to the current borrowings under the
Credit Documents, the funding of the Tranche B Term Loan and the other
transactions contemplated hereby, in substantially the form of Schedule
4.1(h) hereto.

ARTICLE V

AFFIRMATIVE COVENANTS

     Each Credit Party hereby covenants and agrees that on the Closing Date,
and thereafter for so long as this Credit Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, such Credit Party shall, and shall cause each of its Subsidiaries, to:

     Section 5.1.Financial Statements.

     Furnish to the Administrative Agent for distribution to the Lenders:

     (a) Annual Financial Statements. As soon as available, and in any
event no later than the earlier of (i) the date the Borrower is required
by the SEC to deliver its Form 10-K for any fiscal year of the Borrower
and (ii) ninety (90) days after the end of each fiscal year of the
Borrower, a copy of the Consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as at the end of such fiscal year and the
related Consolidated statements of income and retained earnings and of
cash flows of the Borrower and its Consolidated Subsidiaries for such
year, audited by a firm of independent certified public accountants
reasonably acceptable to the Administrative Agent, setting forth in each
case in comparative form the figures for the preceding fiscal year,
reported on without a “going concern” or like qualification or exception,
or qualification indicating that the scope of the audit was inadequate to
permit such independent certified public accountants to certify such
financial statements without such qualification; and

     (b) Quarterly Financial Statements. As soon as available, and in
any event no later than the earlier of (i) the date the Borrower is
required by the SEC to deliver its Form 10-Q for any fiscal quarter of
the Borrower and (ii) forty-five (45) days after the end of each of the
fiscal quarters of the Borrower, a company-prepared Consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such period and related company-prepared Consolidated statements of
income and retained earnings and of cash flows for the Borrower and its
consolidated Subsidiaries for such quarterly period and for the portion
of the fiscal year ending with such period, in each case setting forth in
comparative form the figures for the corresponding period or periods of
the preceding fiscal year (subject to normal recurring year-end audit
adjustments).

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     All such financial statements shall fairly present, in all material
respects, the financial condition and results from operations of the entities
for the periods specified, be prepared in reasonable detail and in accordance
with GAAP (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) applied consistently throughout the periods
reflected therein and be accompanied by a description of, and an estimation of
the effect on the financial statements on account of, a change in the
application of accounting principles as provided in Section 1.3.

     Section 5.2.Certificates; Other Information.

     Furnish to the Administrative Agent for distribution to the Lenders:

     (a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;

     (b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a
Responsible Officer substantially in the form of Schedule 5.2(b) (each, a
“Compliance Certificate”) stating that (i) such financial statements
present fairly the financial position of the Borrower and its
Consolidated Subsidiaries for the periods indicated in conformity with
GAAP applied on a consistent basis, (ii) each of the Credit Parties
during such period observed or performed in all material respects all of
its covenants and other agreements, and satisfied in all material
respects every condition, contained in this Credit Agreement to be
observed, performed or satisfied by it, and (iii) such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, and including calculations in
reasonable detail required to determine the current Applicable
Percentages and to indicate compliance with Section 5.9 as of the last
day of such period;

     (c) within thirty (30) days after the same are sent, copies of all
reports (other than those otherwise provided pursuant to Section 5.1 and
those which are of a promotional nature) and other financial information
which the Borrower sends to its shareholders;

     (d) within ninety (90) days after the end of each fiscal year of the
Borrower, a certificate containing information regarding (i) the
calculation of Excess Cash Flow and (ii) the amount of all Asset
Dispositions, Debt Issuances, and Equity Issuances that were made during
the prior fiscal year and amounts received in connection with any
Recovery Event during the prior fiscal year;

     (e) promptly upon receipt thereof, a copy or summary of any other
report, or “management letter” submitted or presented by independent
accountants to the Borrower or any of its Subsidiaries in connection with
any annual, interim or special audit of the books of such Person;

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     (f) promptly upon their becoming available, copies of (i) all press
releases and other statements made available generally by the Credit
Parties to the public concerning material developments in the business of
the Credit Parties and their Subsidiaries and (ii) any non-routine
correspondence or official notices received by the Credit Parties or any
of their Subsidiaries from any Governmental Authority which regulates the
operations of the Credit Parties and their Subsidiaries;

     (g) promptly, such additional financial and other information as the
Administrative Agent, on behalf of any Lender, may from time to time
reasonably request;

     (h) concurrently with the delivery of the financial statements
referred to in Section 5.1(b) above, the Borrower shall provide to the
Administrative Agent a supplement to Schedule 3.16 setting forth a
complete and correct list of all Intellectual Property owned by or
licensed to the Credit Parties or any of their Subsidiaries that (i) is
not set forth in Schedule 3.16, or (ii) has not been set forth in any
supplement to Schedule 3.16 previously furnished by the Borrower to the
Administrative Agent pursuant to this Section 5.2(h).

Documents required to be delivered pursuant to Section 5.1(a) or Section 5.1(b)
may be delivered electronically and if so delivered, shall be deemed to have
been delivered on the date received by the Administrative Agent by electronic
mail with all relevant attachments. The Administrative Agent may post such
documents on the Borrower’s behalf on IntraLinks/IntraAgency or another
relevant website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that the Borrower shall deliver paper
copies of such documents to the Administrative Agent upon its request until a
written request to cease delivering paper copies is given by the Administrative
Agent. Notwithstanding anything contained herein, (A) the Borrower shall be
entitled to deliver the Compliance Certificate required by Section 5.2(b) by
electronic mail and if so delivered shall be deemed to have been delivered on
the date received by the Administrative Agent by electronic mail with all
relevant attachments, and (B) whether or not delivery of any Compliance
Certificate required by Section 5.2(b) is effected pursuant to the preceding
clause (A), the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 5.2(b) to the Administrative Agent.

     Section 5.3. Payment of Taxes and Other Obligations.

     Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its taxes (Federal,
state, local and any other taxes) and other obligations and liabilities of
whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such taxes, obligations and
liabilities, except when the amount or validity of any such taxes, obligations
and liabilities is currently being contested in good faith by appropriate
proceedings and reserves, if applicable, in conformity with GAAP with respect
thereto have been provided on the books of the Credit Parties.

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     Section 5.4. Conduct of Business and Maintenance of Existence.

     Continue to engage in business of the same general type as now conducted
by it on the Closing Date and preserve, renew and keep in full force and effect
its existence and good standing; take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business and to maintain its goodwill; comply with all Contractual
Obligations and Requirements of Law applicable to it except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.

     Section 5.5. Maintenance of Property; Insurance.

     (a) Keep all material property useful and necessary in its business
in good working order and condition (ordinary wear and tear, damage by
casualty and obsolescence excepted).

     (b) Maintain with financially sound and reputable insurance
companies insurance on all its property (including without limitation its
tangible Collateral) in at least such amounts (after giving effect to any
self-insurance compatible with the following requirements) and against at
least such risks as are usually insured against in the same geographical
area by companies engaged in the same or a similar business; and furnish
to the Administrative Agent, upon written request, full information as to
the insurance carried. The Administrative Agent shall be named as lender
loss payee or mortgagee, as its interest may appear, and the
Administrative Agent shall be named as an additional insured with respect
to any such insurance providing coverage in respect of any Collateral,
and each provider of any such insurance shall agree, by endorsement upon
the policy or policies issued by it or by independent instruments
furnished to the Administrative Agent, that it will give the
Administrative Agent thirty (30) days prior written notice before any
such policy or policies shall be altered or canceled, and that no act or
default of any Credit Party or any other Person shall affect the rights
of the Administrative Agent or the Lenders under such policy or policies.

     (c) In case of any material loss, damage to or destruction of the
Collateral of any Credit Party or any material part thereof, such Credit
Party shall promptly give written notice thereof to the Administrative
Agent generally describing the nature and extent of such damage or
destruction. In case of any material loss, damage to or destruction of
the Collateral of any Credit Party or any material part thereof, such
Credit Party, whether or not the insurance proceeds, if any, received on
account of such damage or destruction shall be sufficient for that
purpose, at such Credit Party’s cost and expense, will promptly repair or
replace the Collateral of such Credit Party so lost, damaged or destroyed
unless such Credit Party shall have reasonably determined that such
repair or replacement of the affected Collateral is not economically
feasible or is not deemed in the best business interest of such Credit
Party.

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     Section 5.6. Inspection of Property; Books and Records; Discussions.

     Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice by the
Administrative Agent or any Lender (provided, no such prior notice shall be
required following the occurrence and during the continuance of any Default or
Event of Default), the Administrative Agent or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time, and as often as may reasonably be desired, and
to discuss the business, operations, properties and financial and other
condition of the Credit Parties with officers and employees of the Credit
Parties and with their independent certified public accountants; provided,
however, that other than inspections conducted during the existence and
continuance of an Event of Default, no more than two such inspections may be
conducted during any fiscal year.

     Section 5.7. Notices.

     Immediately after any Credit Party obtains actual knowledge thereof, give
written notice to the Administrative Agent (which shall transmit such notice to
each Lender as soon as practicable) of the occurrence of any Default or Event
of Default, and promptly (but in no event later than two (2) Business Days
after any Credit Party obtains actual knowledge thereof) give written notice of
the following to the Administrative Agent (which shall transmit such notice to
each Lender as soon as practicable):

     (a) the occurrence of any default or event of default under any
Contractual Obligation of any of the Credit Parties which could
reasonably be expected to have a Material Adverse Effect;

     (b) any litigation, or any investigation or proceeding affecting any
of the Credit Parties which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;

     (c) (i) the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC
(other than a Permitted Lien) or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or any Credit Party or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan;

     (d) any notice of any violation received by any Credit Party from
any Governmental Authority including, without limitation, any notice of
violation of Environmental Laws, which violation could reasonably be
expected to have a Material Adverse Effect;

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     (e) any labor controversy that has resulted in, or threatens to
result in, a strike or other work action against any Credit Party which
could reasonably be expected to have a Material Adverse Effect;

     (f) any attachment, judgment, lien, levy or order exceeding
$5,000,000 that may be assessed against or threatened against any Credit
Party other than Permitted Liens; and

any other development or event which could reasonably be expected to have a
Material Adverse Effect.

     (g) Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower
proposes to take with respect thereto. In the case of any notice of a
Default or Event of Default, the Borrower shall specify that such notice
is a Default or Event of Default notice on the face thereof.

     Section 5.8. Environmental Laws.

     (a) Comply in all material respects with all applicable
Environmental Laws and obtain and comply in all material respects with
and maintain any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws.

     (b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings and the pendency of such
proceedings could not reasonably be expected to have a Material Adverse
Effect.

     (c) Defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers and
directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever
kind or nature known or unknown, contingent or otherwise, arising out of,
or in any way relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of
the Credit Parties or any of their properties, or any orders,
requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney’s and consultant’s
fees, investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing arise
out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in this paragraph shall survive
repayment of the Notes and all other amounts payable hereunder.

     Section 5.9. Financial Covenants.

     Commencing on the day immediately following the Closing Date, the Borrower
shall , on a Consolidated basis, comply with the following financial covenants:

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     (a) Leverage Ratio. At all times, the Leverage Ratio shall be less
than or equal to 4.0 to 1.0.

     (b) Senior Leverage Ratio. At all times, the Senior Leverage Ratio
during the following periods shall be less than or equal to:

	 	 	 
	Period 
	 	Maximum Ratio

	Closing Date through April 30, 2005
	 	3.50 to 1.0
	May 1, 2005 through April 30, 2007
	 	3.25 to 1.0
	May 1, 2007 through April 30, 2008
	 	3.00 to 1.0
	May 1, 2008 and thereafter
	 	2.75 to 1.0

     (c) Interest Coverage Ratio. At all times, the Interest Coverage
Ratio during the following periods shall be greater than or equal to:

	 	 	 
	Period
	 	Minimum Ratio

	Closing Date through April 30, 2005
	 	3.50 to 1.0
	May 1, 2005 through April 30, 2007
	 	4.00 to 1.0
	May 1, 2007 through April 30, 2008
	 	4.50 to 1.0
	May 1, 2008 and thereafter
	 	5.00 to 1.0

     (d) Consolidated Capital Expenditures. Consolidated Capital
Expenditures made during the following period shall be less than or equal
to:

	 	 	 
	 	 	Maximum Consolidated
	Period
	 	Capital Expenditures

	Fiscal Year 2004
	 	$30,000,000
	Fiscal Year 2005
	 	$30,000,000
	Fiscal Year 2006
	 	$30,000,000
	Fiscal Year 2007
	 	$30,000,000
	Fiscal Year 2008
	 	$30,000,000
	Fiscal Year 2009
	 	$30,000,000
	Fiscal Year 2010
	 	$30,000,000

     The maximum amount of Consolidated Capital Expenditures permitted
may be increased in any fiscal year by carrying forward any unused amount
(up to $10,000,000) in the immediately preceding fiscal year; provided
that with respect to any fiscal year, Consolidated Capital Expenditures
made during any such fiscal year shall be deemed to be made first with
respect to the applicable limitation for such fiscal year and then with
respect to any carry forward amount to the extent applicable.

     Section 5.10. Additional Guarantors.

     The Credit Parties will cause each of their Domestic Subsidiaries that is
not an Immaterial Subsidiary, whether newly formed, after acquired or otherwise
existing, to promptly (and in any event within thirty (30) days after such
Domestic Subsidiary is formed or acquired (or such longer period of time as
agreed to by the Administrative Agent in its reasonable

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discretion)) become a Guarantor hereunder by way of execution of a Joinder
Agreement; provided that the aggregate asset value of all Immaterial
Subsidiaries at any time that are not Guarantors shall not exceed $5,000,000.
In connection therewith, the Credit Parties shall give notice to the
Administrative Agent not less than fifteen (15) days prior to creating a
Domestic Subsidiary, or acquiring the Capital Stock of any other Person. The
Credit Party Obligations shall be secured by, among other things, a first
priority perfected security interest in the Collateral of such new Guarantor
and a pledge of 100% of the Capital Stock of such new Guarantor and its
Domestic Subsidiaries and 65% (or such higher percentage that would not result
in material adverse tax consequences for such new Guarantor) of the voting
Capital Stock and 100% of the non-voting Capital Stock of its first-tier
Foreign Subsidiaries (other than Building Systems de Mexico, S.A. de C.V. to
the extent it is not a wholly-owned Subsidiary of the Credit Parties). In
connection with the foregoing, the Credit Parties shall deliver to the
Administrative Agent, with respect to each new Guarantor to the extent
applicable, substantially the same documentation required pursuant to Sections
4.1(b)-(e) and 5.12 and such other documents or agreements as the
Administrative Agent may reasonably request.

     Section 5.11. Compliance with Law.

     Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.

     Section 5.12. Pledged Assets.

     (a) Each Credit Party will cause 100% of the Capital Stock in each
of its direct or indirect Domestic Subsidiaries and 65% of the Capital
Stock in each of its Foreign Subsidiaries (other than Building Systems de
Mexico, S.A. de C.V. to the extent it is not a wholly-owned Subsidiary of
the Credit Parties) to be subject at all times to a first priority,
perfected Lien in favor of the Administrative Agent pursuant to the terms
and conditions of the Security Documents or such other security documents
as the Administrative Agent shall reasonably request.

     (b) If, subsequent to the Closing Date, a Credit Party shall acquire
any securities, instruments, chattel paper or other personal property
required for perfection to be delivered to the Administrative Agent as
Collateral hereunder or under any of the Security Documents, the Borrower
shall promptly (and in any event within three (3) Business Days) after
any Responsible Officer of a Credit Party acquires knowledge of same
notify the Administrative Agent of same. Each Credit Party shall, and
shall cause each of its Subsidiaries to, take such action at its own
expense as requested by the Administrative Agent (including, without
limitation, any of the actions described in Section 4.1(d) hereof) to
ensure that the Administrative Agent has a first priority perfected Lien
(subject to Permitted Liens) to secure the Credit Party Obligations in
(i) all personal property of the Credit Parties located in the United
States and (ii) to the extent deemed to be material by the Administrative
Agent or the Required Lenders in its or their sole reasonable discretion,
all other personal property of the Credit Parties. Each Credit

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Party shall, and shall cause each of its Subsidiaries to, adhere to
the covenants regarding the location of personal property as set forth in
the Security Documents.

     Section 5.13. Covenants Regarding Patents, Trademarks and Copyrights.

     (a) The Borrower shall notify the Administrative Agent promptly if
it knows or has reason to know that any material application, material
letters patent or registration relating to any material Patent, material
Patent License, material Trademark or material Trademark License of the
Credit Parties or any of their Subsidiaries may become abandoned, or of
any adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or any court)
regarding the Borrower’s or any of its Subsidiary’s ownership of any
material Patent or material Trademark, its right to patent or register
the same, or to enforce, keep and maintain the same, or its rights under
any material Patent License or material Trademark License.

     (b) The Borrower shall notify the Administrative Agent promptly
after it knows or has reason to know of any adverse determination or
development (including, without limitation, the institution of, or any
such determination or development in, any proceeding in any court)
regarding any material Copyright or material Copyright License of the
Credit Parties or any of their Subsidiaries, whether (i) such material
Copyright or material Copyright License may become invalid or
unenforceable prior to its expiration or termination, or (ii) the
Borrower’s or any of its Subsidiary’s ownership of such material
Copyright, its right to register the same or to enforce, keep and
maintain the same, or its rights under such material Copyright License,
may become affected.

     (c) (i) The Borrower shall promptly notify the Administrative Agent
of any filing by any Credit Party or any of its Subsidiaries, either
itself or through any agent, employee, licensee or designee (but in no
event later than the fifteenth day following such filing), of any
application for registration of any material Intellectual Property with
the United States Copyright Office or United States Patent and Trademark
Office or any similar office or agency in any other country or any
political subdivision thereof.

     (1) (i) Upon request of the Administrative Agent, the Borrower
shall execute and deliver any and all agreements, instruments,
documents, and papers as the Administrative Agent may reasonably
request to evident the Administrative Agent’s security interest in
the Intellectual Property and the general intangibles referred to
in clauses (i) and (ii), including, without limitation, the
goodwill of the Borrower or its Subsidiaries relating thereto or
represented thereby (or such other Intellectual Property or the
general intangibles relating thereto or represented thereby as the
Administrative Agent may reasonably request).

     (d) The Credit Parties and their Subsidiaries will take all
necessary actions, including, without limitation, in any proceeding
before the United States Patent and Trademark Office or the United States
Copyright Office, to maintain each item of Intellectual Property of the
Borrower and its Subsidiaries, including, without limitation,

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payment of maintenance fees, filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings unless the Borrower or the
relevant Subsidiary, as the case may be, shall reasonably determine that
such Intellectual Property is not material to the business of the Credit
Parties and their Subsidiaries taken as a whole.

     (e) In the event that any Credit Party becomes aware that any
Intellectual Property is infringed, misappropriated or diluted by a third
party in any material respect, the Borrower shall notify the
Administrative Agent promptly after it learns thereof and shall, unless
the Borrower or the relevant Subsidiary, as the case may be, shall
reasonably determine that such Intellectual Property is not material to
the business of the Credit Parties and their Subsidiaries taken as a
whole, promptly sue for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or
dilution or take such other actions as the Borrower or such Subsidiary,
as the case may be, shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property.

     Section 5.14. Further Assurances.

     (a) Upon the request of the Administrative Agent, promptly perform
or cause to be performed any and all acts and execute or cause to be
executed any and all documents for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are
necessary or advisable to maintain in favor of the Administrative Agent,
for the benefit of the Lenders, Liens on the Collateral that are duly
perfected in accordance with the requirements of, or the obligations of
the Credit Parties under, the Credit Documents and all applicable
Requirements of Law.

     (b) Within sixty (60) days following the Closing Date (as such time
may be extended at the discretion of the Administrative Agent), the
Administrative Agent shall have received in the case of any personal
property Collateral located at premises leased by a Credit Party, such
estoppel letters, consents and waivers from the landlords of such real
property that the Borrower is able to obtain by using its commercially
reasonable efforts.

ARTICLE VI

NEGATIVE COVENANTS

     Each Credit Party hereby covenants and agrees that on the Closing Date,
and thereafter for so long as this Credit Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, such Credit Party shall not, nor shall it permit any of its Subsidiaries,
to, directly or indirectly:

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     Section 6.1.Indebtedness.

     Contract, create, incur, assume or permit to exist any Indebtedness, except:

     (a) Indebtedness arising or existing under this Credit Agreement and
the other Credit Documents;

     (b) Indebtedness existing as of the Closing Date as referenced in
the financial statements referenced in Section 3.1(a) (and set out more
specifically in Schedule 6.1(b)) hereto and renewals, refinancings or
extensions thereof in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension;

     (c) Indebtedness incurred or acquired after the Closing Date
consisting of Capital Leases or Indebtedness incurred to provide all or a
portion of the purchase price or cost of construction of an asset;
provided that (i) such Indebtedness when incurred shall not exceed the
purchase price or cost of construction of such asset; (ii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
and (iii) the total amount of all such Indebtedness shall not exceed
$25,000,000 at any time outstanding;

     (d) Indebtedness and obligations owing under Secured Hedging
Agreements and other Hedging Agreements entered into in order to manage
existing or anticipated interest rate or exchange rate risks and not for
speculative purposes;

     (e) Indebtedness owed from a Credit Party to another Credit Party;

     (f) Indebtedness constituting Subordinated Debt;

     (g) other Indebtedness of Credit Parties which does not exceed
$5,000,000 in the aggregate at any time outstanding, and

     (h) so long as there exists no Default both immediately before and
immediately after giving effect to any such transaction, Indebtedness of
a Person which becomes a Subsidiary after the date hereof or Indebtedness
of a Person that is assumed by the Borrower or any Subsidiary in
connection with a Permitted Acquisition, provided that (i) such
Indebtedness existed at the time such Person became a Subsidiary or such
Permitted Acquisition was consummated, as the case may be, and, in either
case, was not created in anticipation thereof, (ii) immediately after
giving effect to such Person’s becoming a Subsidiary or to the
consummation of such Permitted Acquisition by the Borrower no Default or
Event of Default shall have occurred and be continuing, (iii) such
Indebtedness (to the extent secured) shall not exceed $15,000,000 at any
time outstanding and (iv) no more than $50,000,000 in the aggregate of
such Indebtedness shall become due before the Tranche B Term Loan
Maturity Date.

     Section 6.2. Liens.

     Contract, create, incur, assume or permit to exist any Lien with respect
to any of their respective property or assets of any kind (whether real or
personal, tangible or intangible),

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whether now owned or hereafter acquired, except for Permitted Liens.
Notwithstanding the foregoing, if a Credit Party or any of its Subsidiaries
shall grant a Lien on any of its assets in violation of this Section 6.2, then
it shall be deemed to have simultaneously granted an equal and ratable Lien on
any such assets in favor of the Administrative Agent for the benefit of the
Lenders.

     Section 6.3. Guaranty Obligations.

     Enter into or otherwise become or be liable in respect of any Guaranty
Obligations (excluding specifically therefrom endorsements in the ordinary
course of business of negotiable instruments for deposit or collection) other
than (i) those in favor of the Lenders in connection herewith, (ii) guaranties
given by the Credit Parties or any of their Subsidiaries in favor of any Credit
Party or any such Subsidiary in connection with obligations not constituting
Indebtedness including real property leases and other contracts entered into in
the ordinary course of business and (iii) Guaranty Obligations by the Credit
Parties permitted under Section 6.1 (except, as regards Indebtedness under
subsection (b) thereof, only if and to the extent such Indebtedness was
guaranteed on the Closing Date).

     Section 6.4. Nature of Business.

     Alter the character of their business in any material respect from that
conducted as of the Closing Date.

     Section 6.5. Consolidation, Merger, Sale or Purchase of Assets, etc.

     (a) Dissolve, liquidate or wind up its affairs, consolidate or merge
with another Person, or sell, transfer, lease or otherwise dispose of its
property or assets or agree to do so at a future time except the
following, without duplication, shall be expressly permitted:

     (1) Specified Sales;

     (2) the disposition of property or assets as a result of a
Recovery Event to the extent the Net Cash Proceeds therefrom are
used to repay Loans pursuant to Section 2.8(b)(vi) or repair or
replace damaged property or to purchase or otherwise acquire new
assets or property in accordance with the terms of Section
2.8(b)(vi);

     (3) the sale, lease or transfer of property or assets from a
Credit Party to another Credit Party; provided that prior to or
simultaneously with any such sale, lease or transfer, all actions
required by the Administrative Agent shall be taken to insure the
continued perfection and priority of the Administrative Agent’s
Liens on such property and assets;

     (4) the lease of property or assets with a book value (at the
time of any such lease) not to exceed $25,000,000 in the aggregate
over the term of this Agreement from a Credit Party to a Subsidiary
that is not a Guarantor; provided

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that such lease is (A) an operating lease for fair market
value and (B) the ownership rights in the property or assets are
retained by a Credit Party;

     (5) the consolidation, liquidation or merger of a Credit Party
into another Credit Party or any Subsidiary into a Credit Party;
provided that (A) prior to or simultaneously with any such
consolidation, liquidation or merger, all actions required by the
Administrative Agent shall be taken to insure the continued
perfection and priority of the Administrative Agent’s Liens on the
property and assets of each such Credit Party and (B) if such
consolidation, liquidation or merger involves the Borrower, the
Borrower shall be the surviving entity;

     (6) the consolidation, liquidation or merger of a Subsidiary
that is not a Credit Party into another Subsidiary that is not a
Credit Party;

     (7) the termination of any Hedging Agreement permitted
pursuant to Section 6.1; and

     (8) other sales, leases or transfers of property or assets in
an amount not to exceed $5,000,000 annually;

provided, that, with respect to clauses (i), (ii) and (vi) above, at least 75%
of the consideration received therefor by such Credit Party shall be in the
form of cash or Cash Equivalents; provided further, that, as to any Collateral
that is subject to a disposition (other than by way of a lease) permitted under
this Section 6.5 or under any other provision of this Agreement or of any other
Credit Document, the Borrower shall have the right to obtain the release of
such Collateral from the Liens securing the Credit Party Obligations
concurrently with the consummation of such disposition, at the Borrower’s sole
cost and expense and upon not less than twenty (20) Business Days’ prior
written notice to the Administrative Agent; and provided further, that, as to
any Guarantor that ceases to be a Subsidiary as a result of any transaction
permitted under any provision of this Agreement or any other Credit Document,
the Borrower (and such Guarantor) shall have the right to obtain the release of
such Guarantor from its obligations under the Guaranty and the release of the
property and assets of such Guarantor from the Liens securing the Credit Party
Obligations, in each case at the Borrower’s (or such Guarantor’s) sole cost and
expense and upon not less than twenty (20) Business Days’ prior written notice
to the Administrative Agent; or

     (b) Purchase, lease or otherwise acquire (in a single transaction or
a series of related transactions) the property or assets of any Person
(other than purchases or other acquisitions of inventory, leases,
materials, property and equipment in the ordinary course of business,
except as otherwise limited or prohibited herein), or enter into any
transaction of merger or consolidation, except for (i) Investments or
acquisitions permitted pursuant to Section 6.6, (ii) Permitted
Acquisitions and (iii) the merger or consolidation of the Borrower or one
of its Subsidiaries with and into a Credit Party; provided that if the
Borrower is a party thereto, the Borrower will be the surviving
corporation.

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     Section 6.6. Advances, Investments and Loans.

     Lend money or extend credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person except for Permitted Investments.

     Section 6.7. Transactions with Affiliates.

     Enter into (a) any transaction or series of transactions, other than
compensation arrangements as set forth in clause (b) below, whether or not in
the ordinary course of business, with any officer, director, shareholder or
Affiliate other than on terms and conditions substantially as favorable as
would be obtainable in a comparable arm’s-length transaction with a Person
other than an officer, director, shareholder or Affiliate, or (b) any
compensation arrangement with any officer or director other a compensation
arrangement that is in the ordinary course of business and consistent with
historical past practices of compensation for officers and directors.

     Section 6.8. Ownership of Subsidiaries; Restrictions.

     Create, form or acquire any Subsidiaries, except for (a) Domestic
Subsidiaries which are joined as Additional Credit Parties in accordance with
the terms hereof and (b) Immaterial Subsidiaries, subject to the terms of
Section 5.10. The Credit Parties will not sell, transfer, pledge or otherwise
dispose of any Capital Stock or other equity interests in any of its
Subsidiaries, nor will it permit any of its Subsidiaries to issue, sell,
transfer, pledge or otherwise dispose of any of their Capital Stock or other
equity interests, except in a transaction permitted by Section 6.5(a).

     Section 6.9. Fiscal Year; Organizational Documents; Subordinated Debt
Documents.

     Change its fiscal year other than a change in its fiscal year approved by
the Agents, which approval will not be unreasonably conditioned, withheld or
delayed. None of the Credit Parties will amend, modify or change its articles
of incorporation (or corporate charter or other similar organizational
document) or bylaws (or other similar document) or operating agreement in any
respect adverse to the Lenders without the prior written consent of the
Required Lenders. The Credit Parties will not, without the prior written
consent of the Required Lenders, amend, modify, waive or extend or permit the
amendment, modification, waiver or extension of any term of (i) the Senior
Subordinated Notes in a manner that is adverse to the interests of the Lenders
or (ii) any other Subordinated Debt in a manner that is materially adverse to
the interests of the Lenders.

     Section 6.10. Limitation on Restricted Actions.

     Create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any Indebtedness or other obligation owed to any
Credit Party,

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(c) make loans or advances to any Credit Party, (d) sell, lease or transfer any
of its properties or assets to any Credit Party, or (e) act as a Guarantor and
pledge its assets pursuant to the Credit Documents or any renewals,
refinancings, exchanges, refundings or extension thereof, except (in respect of
any of the matters referred to in clauses (a)-(d) above) for such encumbrances
or restrictions existing under or by reason of (i) this Credit Agreement and
the other Credit Documents, (ii) applicable law, (iii) any document or
instrument governing Indebtedness incurred pursuant to Section 6.1(c); provided
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, or (iv) any Permitted Lien or
any document or instrument governing any Permitted Lien; provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.

     Section 6.11. Restricted Payments.

     Declare, order, make or set apart any sum for or pay any Restricted
Payment, except (a) to make dividends payable solely in the same class of
Capital Stock of such Person, (b) to make dividends or other distributions
payable to the Borrower or a Domestic Subsidiary, (c) the Borrower may
repurchase shares of its Capital Stock in respect of employee benefit plans and
stock options in an aggregate amount not to exceed $5,000,000 during any fiscal
year, (d) so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower may make regularly scheduled
payments of interest in respect of the Senior Subordinated Notes, (e) so long
as no Default or Event of Default shall have occurred and be continuing or
would result therefrom, the Borrower may prepay the full amount of the Senior
Subordinated Notes (and any accrued and unpaid interest and prepayment premiums
with respect thereto) on the Tranche B Term Loan Funding Date, and (f) so long
as no Default or Event of Default shall have occurred and be continuing and the
Borrower demonstrates pro forma compliance with the financial covenants set
forth in Section 5.9, the Borrower may repurchase shares of its Capital Stock
and/or pay cash dividends in an aggregate amount during the term of this Credit
Agreement not to exceed $25,000,000 plus 25% of Consolidated Net Income since
the Closing Date.

     Section 6.12. No Further Negative Pledges.

     Enter into, assume or become subject to any agreement prohibiting or
otherwise restricting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, or requiring the
grant of any security for such obligation if security is given for some other
obligation, except (a) pursuant to this Credit Agreement and the other Credit
Documents and (b) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(c); provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired
in connection therewith, and (c) in connection with any Permitted Lien or any
document or instrument governing any Permitted Lien; provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.

ARTICLE VII

EVENTS OF DEFAULT

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     Section 7.1. Events of Default.

     An Event of Default shall exist upon the occurrence of any of the
following specified events (each an “Event of Default”):

     (a) Payment Default. The Borrower shall fail to pay any principal
on any Loan or Note when due (whether at maturity, by reason of
acceleration or otherwise) in accordance with the terms thereof or
hereof; or the Borrower shall fail to reimburse the Issuing Lender for
any LOC Obligations when due (whether at maturity, by reason of
acceleration or otherwise) in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Note or any fee or
other amount payable hereunder when due (whether at maturity, by reason
of acceleration or otherwise) in accordance with the terms thereof or
hereof (or any Guarantor shall fail to pay on the Guaranty in respect of
any of the foregoing or in respect of any other Guaranty Obligations
thereunder) and such failure shall continue unremedied for three (3)
Business Days.

     (b) Misrepresentation. Any representation or warranty made or
deemed made herein, in the Security Documents or in any of the other
Credit Documents or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection
with this Credit Agreement shall prove to have been incorrect, false or
misleading in any material respect on or as of the date made or deemed
made.

     (c) Covenant Default. (i) Any Credit Party shall fail to perform,
comply with or observe any term, covenant or agreement applicable to it
contained in Sections 5.1, 5.2, 5.4, 5.7, 5.9, 5.11 or Article VI hereof;
or (ii) any Credit Party shall fail to comply with any other covenant
contained in this Credit Agreement or the other Credit Documents or any
other agreement, document or instrument among any Credit Party, the
Administrative Agent and the Lenders or executed by any Credit Party in
favor of the Administrative Agent or the Lenders (other than as described
in Sections 7.1(a) or 7.1(c)(i) above), and such breach or failure to
comply is not cured within thirty (30) days of its occurrence.

     (d) Debt Cross-Default. Any Credit Party shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Loans, Reimbursement Obligations and the Guaranty) in a principal amount
outstanding of at least $2,500,000 for the Borrower and any of its
Subsidiaries in the aggregate beyond any applicable grace period (not to
exceed 30 days), if any, provided in the instrument or agreement under
which such Indebtedness was created; (ii) default in the observance or
performance of any other agreement or condition relating to any
Indebtedness (other than the Loans, Reimbursement Obligations and the
Guaranty) in a principal amount outstanding of at least $2,500,000 in the
aggregate beyond any applicable grace period (not to exceed 30 days) for
the Credit Parties and their Subsidiaries or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or beneficiary
or

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beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or (iii) breach
or default any Secured Hedging Agreement beyond any applicable grace
period (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness was created.

     (e) Bankruptcy Default. (i) The Credit Parties or any of their
Subsidiaries shall commence any case, proceeding or other action as a
debtor (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to have it judged bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of
its assets, or the Credit Parties or any of their Subsidiaries shall make
a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the any Credit Party or any of its
Subsidiaries any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Credit Party or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Credit
Parties or any of their Subsidiaries shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of
the acts set forth in clause (i), (ii) or (iii) above; or (v) the Credit
Parties or any of their Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due.

     (f) Judgment Default. One or more judgments, orders, decrees or
arbitration awards shall be entered against the Credit Parties or any of
their Subsidiaries involving in the aggregate a liability (to the extent
not paid when due or covered by insurance) of $2,500,000 or more and all
such judgments, orders, decrees or arbitration awards shall not have been
paid and satisfied, vacated, discharged, stayed or bonded pending appeal
within 30 days from the entry thereof.

     (g) ERISA Default. (i) Any Person shall engage in any “prohibited
transaction” (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any “accumulated funding deficiency” (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan (other
than a Permitted Lien) shall arise on the assets of the Borrower, any of
its Subsidiaries or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have
a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a Trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single

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Employer Plan shall terminate for purposes of Title IV of ERISA, (v)
the Borrower, any of its Subsidiaries or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders is likely to,
incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, any Multiemployer Plan or (vi) any other
similar event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could have a Material Adverse Effect.

     (h) Change of Control. A Change of Control shall have occurred.

     (i) Failure of Credit Documents. This Credit Agreement (including
the Guaranty) or any other Credit Document or any provision hereof or
thereof shall cease to be in full force and effect or to give the
Administrative Agent and/or the Lenders the security interests, liens,
rights, powers and privileges purported to be created hereby or thereby,
or any Credit Party or any Person acting by or on behalf of any Credit
Party shall deny or disaffirm such Person’s obligations under this Credit
Agreement or any other Credit Document.

     (j) Hedging Agreement. Any termination payment shall be due by a
Credit Party under any Hedging Agreement and such amount is not paid
within the later to occur of five (5) Business Days after the due date
thereof or the expiration of grace periods, if any, in such Hedging
Agreement.

     (k) Subordinated Debt. Any default (which is not waived or cured
within the applicable period of grace) or event of default shall occur
under any Subordinated Debt or the subordination provisions contained
therein shall cease to be in full force and effect or to give the Lenders
the rights, powers and privileges purported to be created thereby.

     Section 7.2. Acceleration; Remedies.

     Upon the occurrence and during the continuation of an Event of Default,
then, and in any such event, (a) if such event is a Bankruptcy Event,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and the
Borrower shall immediately pay to the Administrative Agent cash collateral as
security for the LOC Obligations for subsequent drawings under then outstanding
Letters of Credit in an amount equal to the maximum amount which may be drawn
under Letters of Credit then outstanding, and (b) if such event is any other
Event of Default, subject to the terms of Section 8.5, with the written consent
of the Required Lenders, the Administrative Agent may, or upon the written
request of the Required Lenders, the Administrative Agent shall, take any or
all of the following actions: (i) by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; (ii) by notice of default to the Borrower declare the
Loans (with accrued interest thereon) and all other amounts owing under this
Credit Agreement and the Notes to be due and payable forthwith and direct the
Borrower to pay to the Administrative Agent cash collateral as security for the
LOC Obligations for subsequent drawings under then outstanding Letters of
Credit in an amount equal to the maximum amount of

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which may be drawn under Letters of Credit then outstanding, whereupon the same
shall immediately become due and payable; and/or (iii) exercise on behalf of
the Lenders all of its other rights and remedies under this Credit Agreement,
the other Credit Documents and applicable law. Except as expressly provided
above in this Section 7.2, presentment, demand, protest and all other notices
of any kind are hereby expressly waived by the Credit Parties.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

     Section 8.1. Appointment.

     Each Lender hereby irrevocably designates and appoints Wachovia as the
Administrative Agent of such Lender under this Credit Agreement, and each such
Lender irrevocably authorizes Wachovia, as the Administrative Agent for such
Lender, to take such action on its behalf under the provisions of this Credit
Agreement and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Credit Agreement,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Credit
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or otherwise exist against the Administrative Agent.

     Section 8.2. Delegation of Duties.

     The Administrative Agent may execute any of its duties under this Credit
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
Without limiting the foregoing, the Administrative Agent may appoint one of its
affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution
of funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.

     Section 8.3. Exculpatory Provisions.

     Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Credit Agreement (except for its or
such Person’s own gross negligence or willful misconduct) or (b) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by any Credit Party or any officer thereof contained in this
Credit Agreement or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or in connection with, this Credit Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the Credit
Documents

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or for any failure of any Credit Party to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance by any
Credit Party of any of the agreements contained in, or conditions of, this
Credit Agreement, or to inspect the properties, books or records of any Credit
Party.

     Section 8.4. Reliance by Administrative Agent.

     (a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or
conversation believed by it in good faith to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without
limitation, counsel to the Credit Parties), independent accountants and
other experts selected by the Administrative Agent. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for
all purposes unless an executed Commitment Transfer Supplement has been
filed with the Administrative Agent pursuant to Section 9.6(c) with
respect to the Loans evidenced by such Note. The Administrative Agent
shall be fully justified in failing or refusing to take any action under
this Credit Agreement unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting,
under any of the Credit Documents in accordance with a request of the
Required Lenders or all of the Lenders, as may be required under this
Credit Agreement, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future
holders of the Notes.

     (b) For purposes of determining compliance with the conditions
specified in Section 4.1, each Lender that has signed this Credit
Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory to a
Lender.

     Section 8.5. Notice of Default.

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

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advisable in the best interests of the Lenders except to the extent that this
Credit Agreement expressly requires that such action be taken, or not taken,
only with the consent or upon the authorization of the Required Lenders, or all
of the Lenders, as the case may be.

     Section 8.6. Non-Reliance on Administrative Agent and Other Lenders.

     Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
any Credit Party, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower or any other Credit Party and
made its own decision to make its Loans hereunder and enter into this Credit
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Credit
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or any other Credit Party which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.

     Section 8.7. Indemnification.

     The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting
the obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes or any Reimbursement
Obligation) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of any Credit Document or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting from
the Administrative Agent’s gross negligence or willful misconduct, as
determined by a court of competent jurisdiction. The agreements in this
Section 8.7 shall survive the termination of this

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Credit Agreement and payment of the Notes, any Reimbursement Obligation and all
other amounts payable hereunder.

     Section 8.8. The Administrative Agent in Its Individual Capacity.

     The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower
and the other Credit Parties as though the Administrative Agent were not the
Administrative Agent hereunder. With respect to the Loans made or renewed by
it and any Note issued to it, the Administrative Agent shall have the same
rights and powers under this Credit Agreement as any Lender and may exercise
the same as though it were not the Administrative Agent, and the terms “Lender”
and “Lenders” shall include the Administrative Agent in its individual
capacity.

     Section 8.9. Successor Administrative Agent.

     The Administrative Agent may resign as Administrative Agent upon 30 days’
prior written notice to the Borrower and the Lenders. If the Administrative
Agent shall resign as Administrative Agent under this Credit Agreement and the
other Credit Documents, then the Required Lenders shall appoint from among the
Lenders a successor administrative agent for the Lenders, which successor agent
shall be approved by the Borrower (such approval not to be unreasonably
withheld) so long as no Default or Event of Default has occurred and is
continuing, whereupon such successor administrative agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor administrative agent effective
upon such appointment and approval, and the former Administrative Agent’s
rights, powers and duties as Administrative Agent shall be terminated, without
any other or further act or deed on the part of such former Administrative
Agent or any of the parties to this Credit Agreement or any holders of the
Notes. If no successor Administrative Agent has accepted appointment as
Administrative Agent within thirty (30) days after the retiring Administrative
Agent’s giving notice of resignation, the retiring Administrative Agent shall
have the right, on behalf of the Lenders, to appoint a successor administrative
agent, which successor shall be approved by the Borrower (such approval not to
be unreasonably withheld) so long as no Default or Event of Default has
occurred and is continuing; provided that such successor administrative agent
has minimum capital and surplus of at least $500,000,000. If no successor
administrative agent has accepted appointment as Administrative Agent within
sixty (60) days after the retiring Administrative Agent’s giving notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
become effective and the Lenders shall perform all duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor administrative agent as provided for above. After any retiring
Administrative Agent’s resignation as Administrative Agent, the indemnification
provisions of this Credit Agreement and the other Credit Documents and the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Credit Agreement.

     Section 8.10. Other Agents.

     None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a “syndication agent,” “documentation
agent,” “co–agent,” “book manager,”

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“book runner,” “lead manager,” “arranger,” “lead arranger” or
“co–arranger” shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders
or other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

ARTICLE IX

MISCELLANEOUS

     Section 9.1. Amendments, Waivers and Release of Collateral.

     Neither this Credit Agreement nor any of the other Credit Documents, nor
any terms hereof or thereof may be amended, supplemented, waived or modified
except in accordance with the provisions of this Section 9.1. The Required
Lenders may or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
or any other Credit Party written amendments, supplements or modifications
hereto and to the other Credit Documents for the purpose of adding any
provisions to this Credit Agreement or the other Credit Documents or changing
in any manner the rights of the Lenders or of the Borrower or any other Credit
Party hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders may specify in such instrument, any of the requirements of
this Credit Agreement or the other Credit Documents or any Default or Event of
Default and its consequences; provided, however, that no such amendment,
supplement, modification, release, waiver or consent shall:

     (1) reduce the amount or extend the scheduled date of maturity
of any Loan or Note or any installment thereon, or reduce the
stated rate of any interest or fee payable hereunder (except in
connection with a waiver of interest at the increased post-default
rate set forth in Section 2.9 which shall be determined by a vote
of the Required Lenders) or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration
date of any Lender’s Commitment, in each case without the written
consent of each Lender directly affected thereby; provided that, it
is understood and agreed that (A) no waiver, reduction or deferral
of a mandatory prepayment required pursuant to Section 2.8(b), nor
any amendment of Section 2.8(b) or the definitions of Asset
Disposition, Debt Issuance, Equity Issuance, Excess Cash Flow, or
Recovery Event, shall constitute a reduction of the amount of, or
an extension of the scheduled date of, the scheduled date of
maturity of, or any installment of, any Loan or Note, (B) any
reduction in the stated rate of interest on Revolving Loans shall
only require the written consent of each Revolving Lender and (C)
any reduction in the stated rate of interest on the Tranche B Term
Loan shall only require the written consent of each Term Loan
Lender; or

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     (2) amend, modify or waive any provision of this Section 9.1
or reduce the percentage specified in the definition of Required
Lenders, without the written consent of all the Lenders; or

     (3) amend, modify or waive any provision of Article VIII
without the written consent of the then Administrative Agent; or

     (4) release the Borrower or all or substantially all of the
Guarantors from their respective obligations hereunder or under the
Guaranty, without the written consent of all of the Lenders and
Hedging Agreement Providers; or

     (5) release all or substantially all of the Collateral,
without the written consent of all of the Lenders and Hedging
Agreement Providers; or

     (6) permit any Credit Party to assign or transfer any of its
rights or obligations under this Credit Agreement or other Credit
Documents without the written consent of all of the Lenders other
than in connection with a transaction permitted under Section
6.5(a)(v); or

     (7) amend, modify or waive any provision of the Credit
Documents requiring consent, approval or request of the Required
Lenders or all Lenders, without the written consent of all of the
Required Lenders or Lenders as appropriate; or

     (8) amend, modify or waive any provision of the Credit
Documents affecting the rights or duties of the Administrative
Agent, the Issuing Lender or the Swingline Lender under any Credit
Document without the written consent of the Administrative Agent,
the Issuing Lender and/or the Swingline Lender, as applicable, in
addition to the Lenders required hereinabove to take such action;
or

     (9) amend or modify the definition of Credit Party Obligations
to delete or exclude any obligation or liability described therein
without the written consent of each Lender and each Hedging
Agreement Provider directly affected thereby; or

     (10) amend, modify or waive the order in which Credit Party
Obligations are paid in Section 2.12(b) without the written consent
of each Lender and each Hedging Agreement Provider directly
affected thereby.

     Any such waiver, amendment, supplement or modification and any such
release shall apply equally to each of the Lenders and shall be binding upon
the Borrower, the other Credit Parties, the Lenders, the Administrative Agent
and all future holders of the Notes. In the case of any waiver, the Borrower,
the other Credit Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.

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     Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower and the other Credit Parties shall not be required for any amendment,
modification or waiver of the provisions of Article VIII (other than the
provisions of Section 8.9). In addition, the Credit Parties and the Lenders
hereby authorize the Administrative Agent to modify this Credit Agreement by
unilaterally amending or supplementing Schedule 2.1(a) from time to time in the
manner requested by the Credit Parties, the Administrative Agent or any Lender
in order to reflect any assignments or transfers of the Loans and Commitments
as provided for hereunder; provided, however, that the Administrative Agent
shall promptly deliver a copy of any such modification to the Borrower and each
Lender.

     Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled to
vote as such Lender sees fit on any bankruptcy reorganization plan that affects
the Loans, and each Lender acknowledges that the provisions of Section 1126(c)
of the Bankruptcy Code supersedes the unanimous consent provisions set forth
herein and (y) the Required Lenders may consent to allow a Credit Party to use
cash collateral in the context of a bankruptcy or insolvency proceeding.

     Section 9.2. Notices.

     Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand on a Business Day, (b) when transmitted via telecopy (or other facsimile
device) or electronic mail on a Business Day to the number or electronic mail
address set out herein, (c) the Business Day following the day on which the
same has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case, addressed
as follows in the case of the Borrower, the other Credit Parties and the
Administrative Agent, and as set forth on Schedule 9.2 in the case of the
Lenders, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:

	 	 	 	 	 
	

	 	The Borrower
	 	NCI Building Systems, Inc.
	

	 	and the other
	 	10943 N. Sam Houston Parkway W.
	

	 	Credit Parties:
	 	Houston, Texas 77064
	

	 	 	 	Attention: Robert J. Medlock
	

	 	 	 	
Chief Financial Officer

	

	 	 	 	Telecopier: (281) 477-9675
	

	 	 	 	Telephone: (281) 897-7765
	

	 	 	 	Email: bmedlock@ncilp.com

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	 	The Administrative	 	 
	

	 	Agent:
	 	Wachovia Bank, National Association
	

	 	 	 	201 South College Street
	

	 	 	 	NC0680/CP8
	

	 	 	 	Charlotte, North Carolina 28288-0608
	

	 	 	 	Attention: Syndication Agency Services
	

	 	 	 	Telecopier: (704) 383-3612
	

	 	 	 	Telephone: (704) 715-1093
	

	 	 	 	Email: colleen.murphy@wachovia.com
	 
	 	 	 	 
	

	 	 	 	with a copy to:
	 
	 	 	 	 
	

	 	 	 	Wachovia Bank, National Association
	

	 	 	 	One Wachovia Center, DC-5
	

	 	 	 	Charlotte, North Carolina 28288-0735
	

	 	 	 	Attention: Glenn Edwards
	

	 	 	 	Telecopier: 704-383-3300
	

	 	 	 	Telephone: 704-383-3810
	

	 	 	 	Email: glenn.edwards@wachovia.com

provided, that notices given by the Borrower pursuant to Section 2.1 or Section
2.10 hereof shall be effective only upon receipt thereof by the Administrative
Agent.

     Section 9.3. No Waiver; Cumulative Remedies.

     No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

     Section 9.4. Survival of Representations and Warranties.

     All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Credit Agreement and the Notes
and the making of the Loans; provided that all such representations and
warranties shall terminate on the date upon which the Commitments have been
terminated and all amounts owing hereunder and under any Notes have been paid
in full.

     Section 9.5. Payment of Expenses and Taxes.

     The Credit Parties agree (a) to pay or reimburse the Administrative Agent
and the Arrangers for all reasonable out-of-pocket costs and expenses incurred
in connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this Credit
Agreement and the other Credit Documents and any

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other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, together with the reasonable fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Credit Agreement, the
Notes and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent and to
the Lenders (including reasonable allocated costs of in-house legal counsel),
and (c) on demand, to pay, indemnify, and hold each Lender, the Administrative
Agent and the Arrangers harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, the Credit Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender, the Administrative Agent and the
Arrangers and their Affiliates directors, officers, employees, agents,
trustees, investment advisors and other representatives harmless from and
against, any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Credit Documents and any such other
documents and the use, or proposed use, of proceeds of the Loans (all of the
foregoing, collectively, the “indemnified liabilities”); provided, however,
that the Borrower shall not have any obligation hereunder to the Administrative
Agent, the Arrangers or any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the Administrative
Agent, the Arrangers or such Lender, as determined by a court of competent
jurisdiction. The agreements in this Section 9.5 shall survive repayment of
the Loans, Notes and all other amounts payable hereunder. Notwithstanding
anything to the contrary contained in this Section 9.5 or elsewhere in any of
the Credit Documents, neither the Borrower nor any Subsidiary shall be
obligated to pay or reimburse any Person for any costs, expenses, fees, taxes
or other charges of any nature whatsoever that are incurred or payable by any
Person in connection with any assignment referred to in Section 9.6(c), any
participation referred to in Section 9.6(b) or any pledge or security interest
referred to in Section 9.6(h).

     Section 9.6. Successors and Assigns; Participations; Purchasing Lenders.

     (a) This Credit Agreement shall be binding upon and inure to the
benefit of the Credit Parties, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and assigns,
except that none of the Credit Parties may assign or transfer any of its
rights or obligations under this Credit Agreement or the other Credit
Documents without the prior written consent of each Lender.

     (b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or
other entities (“Participants”) participating interests in any Loan owing
to such Lender, any Note held by such Lender, any Commitment of such
Lender, or any other interest of such Lender hereunder, in each case in
minimum amounts of $1,000,000 (or, if less, the entire amount of such
Lender’s Obligations, Commitments or other interests). In the event of
any such

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sale by a Lender of participating interests to a Participant, such
Lender’s obligations under this Credit Agreement to the other parties to
this Credit Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Credit Agreement,
and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Credit Agreement. No Lender shall
transfer or grant any participation under which the Participant shall
have rights to approve any amendment to or waiver of this Credit
Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the scheduled maturity of any Loan
or Note or any installment thereon in which such Participant is
participating, or reduce the stated rate or extend the time of payment of
interest or fees thereon (except in connection with a waiver of interest
at the increased post-default rate) or reduce the principal amount
thereof, or increase the amount of the Participant’s participation over
the amount thereof then in effect (it being understood that a waiver of
any Default or Event of Default shall not constitute a change in the
terms of such participation, and that an increase in any Commitment or
Loan shall be permitted without consent of a Participant if such
Participant’s participation is not increased as a result thereof), (ii)
release the Borrower or any material Guarantor from its obligations under
the Guaranty, (iii) release any material portion of the Collateral, or
(iv) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Credit Agreement. In the case of any
such participation, the Participant shall not have any rights under this
Credit Agreement or any of the other Credit Documents (the Participant’s
rights against such Lender in respect of such participation to be those
set forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation; provided that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15, 2.16, 2.17 and 9.5 with respect to its
participation in the Commitments and the Loans outstanding from time to
time; provided, that no Participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would
have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant
had no such transfer occurred.

     (c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time, sell or assign to any Lender
or any Affiliate or Approved Fund thereof and to one or more additional
banks or financial institutions or entities but neither to the Borrower
nor any Affiliate of the Borrower (“Purchasing Lenders”), all or any part
of its rights and obligations under this Credit Agreement and the Notes
in minimum amounts of (i) $2,500,000 with respect to its Revolving
Commitment and its Revolving Loans (or, if less, the entire amount of
such Lender’s Revolving Commitment and Revolving Loans) and (ii)
$1,000,000 (or any lesser amount as approved by the Administrative Agent)
with respect to its Tranche B Term Loans (or, if less, the entire amount
of such Lender’s Tranche B Term Loans), pursuant to a Commitment Transfer
Supplement, executed by such Purchasing Lender, such transferor Lender,
the Administrative Agent (to the extent required) and, so long as no
Default or Event of Default has occurred and is continuing, the Borrower,
and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided,

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however, that (A) any sale or assignment to an existing Lender, or
Affiliate or Approved Fund thereof, shall not require the consent of the
Borrower nor shall any such sale or assignment be subject to the minimum
assignment amounts specified herein and (B) any sale or assignment of a
portion of the Tranche B Term Loan and a Tranche B Term Loan Commitment
shall not require the consent of the Borrower. Upon such execution,
delivery, acceptance and recording, from and after the Transfer Effective
Date specified in such Commitment Transfer Supplement, (x) the Purchasing
Lender thereunder shall be a party hereto and, to the extent provided in
such Commitment Transfer Supplement, have the rights and obligations of a
Lender hereunder with a Commitment as set forth therein, and (y) the
transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under
this Credit Agreement (and, in the case of a Commitment Transfer
Supplement covering all or the remaining portion of a transferor Lender’s
rights and obligations under this Credit Agreement, such transferor
Lender shall cease to be a party hereto). Such Commitment Transfer
Supplement shall be deemed to amend this Credit Agreement to the extent,
and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion
of the rights and obligations of such transferor Lender under this Credit
Agreement and the Notes. On or prior to the Transfer Effective Date
specified in such Commitment Transfer Supplement, the Borrower, at its
own expense, shall execute and deliver to the Administrative Agent in
exchange for the Notes delivered to the Administrative Agent pursuant to
such Commitment Transfer Supplement new Notes to the order of such
Purchasing Lender in an amount equal to the Commitment assumed by it
pursuant to such Commitment Transfer Supplement and, unless the
transferor Lender has not retained a Commitment hereunder, new Notes to
the order of the transferor Lender in an amount equal to the Commitment
retained by it hereunder. Such new Notes shall be dated the Closing Date
and shall otherwise be in the form of the Notes replaced thereby.

     (d) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at its address referred to in
Section 9.2 a copy of each Commitment Transfer Supplement delivered to it
and a register (the “Register”) for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Credit Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.

     (e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender (except for any assignment by
a Lender to an Affiliate of such Lender), as agreed between them, of a
registration and processing fee of $3,500 for each Purchasing Lender
(except that in the case of contemporaneous assignments by a Lender to
more than one Approved Fund managed by the same investment advisor which
are not then Lenders hereunder, only a single such $3,500 fee shall be
payable for

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contemporaneous assignments) listed in such Commitment Transfer
Supplement and the Notes subject to such Commitment Transfer Supplement
(for which neither the Borrower, nor any Subsidiary shall have any
obligations for payment or reimbursement), the Administrative Agent shall
(i) accept such Commitment Transfer Supplement and (ii) record the
information contained therein in the Register.

     (f) Each Credit Party authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a “Transferee”) and any
prospective Transferee any and all financial information in such Lender’s
possession concerning the Credit Parties and their Affiliates which has
been delivered to such Lender by or on behalf of a Credit Party pursuant
to this Credit Agreement or which has been delivered to such Lender by or
on behalf of a Credit Party in connection with such Lender’s credit
evaluation of the Credit Parties and their Affiliates prior to becoming a
party to this Credit Agreement, in each case subject to Section 9.14.

     (g) At the time of each assignment pursuant to this Section 9.6 to a
Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the
Code) for federal income tax purposes, the respective assignee Lender
shall provide to the Borrower and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a 2.18
Certificate) described in Section 2.18.

     (h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Credit Agreement (including,
without limitation, any right to payment of principal and interest under
any Note) to secure obligations of such Lender, including without
limitation, (i) any pledge or assignment to secure obligations to a
Federal Reserve Bank and (ii) in the case of any Lender that is a fund or
trust or entity that invests in commercial bank loans in the ordinary
course of business, any pledge or assignment to any holders of
obligations owed, or securities issued, by such Lender including to any
trustee for, or any other representative of, such holders; it being
understood that the requirements for assignments set forth in this
Section 9.6 shall not apply to any such pledge or assignment of a
security interest, except with respect to any foreclosure or similar
action taken by such pledgee or assignee with respect to such pledge or
assignment; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto
and no such pledgee or assignee shall have any voting rights under this
Credit Agreement unless and until the requirements for assignments set
forth in this Section 9.6 are complied with in connection with any
foreclosure or similar action taken by such pledgee or assignee.

     Section 9.7. Adjustments; Set-off.

     (a) Each Lender agrees that if any Lender (a “benefited Lender”)
shall at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to a Bankruptcy Event,
or otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender’s Loans,

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or
interest thereon, such benefited Lender shall purchase for cash from
the other Lenders a participating interest in such portion of each such
other Lender’s Loan, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another
Lender’s Loans may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as
if such Lender were the direct holder of such portion.

     (b) In addition to any rights and remedies of the Lenders provided
by law (including, without limitation, other rights of set-off), each
Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon the occurrence of any Event of Default,
to setoff and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held by or owing to such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower or any other
Credit Party, or any part thereof in such amounts as such Lender may
elect, against and on account of the Loans and other Credit Party
Obligations of the Borrower and the other Credit Parties to such Lender
hereunder and claims of every nature and description of such Lender
against the Borrower and the other Credit Parties, in any currency,
whether arising hereunder, under any other Credit Document or any Hedging
Agreement provided by such Lender pursuant to the terms of this
Agreement, as such Lender may elect, whether or not such Lender has made
any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The aforesaid right of set-off
may be exercised by such Lender against the Borrower, any other Credit
Party or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver or execution, judgment or
attachment creditor of the Borrower or any other Credit Party, or against
anyone else claiming through or against the Borrower, any other Credit
Party or any such trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of set-off
shall not have been exercised by such Lender prior to the occurrence of
any Event of Default. Each Lender agrees promptly to notify the Borrower
and the Administrative Agent after any such set-off and application made
by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.

     Section 9.8. Table of Contents and Section Headings.

     The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Credit
Agreement.

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     Section 9.9. Counterparts.

     This Credit Agreement may be executed by one or more of the parties to
this Credit Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A counterpart hereof (or signature page thereto) signed and
transmitted by any Person party hereto to the Administrative Agent (or its
counsel) by facsimile machine, telecopier or electronic mail is to be treated
as an original. The signature of such Person thereon, for purposes hereof, is
to be considered as an original signature, and the counterpart (or signature
page thereto) so transmitted is to be considered to have the same binding
effect as an original signature on an original document. A set of the copies
of this Credit Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.

     Section 9.10. Integration; Effectiveness; Continuing Agreement.

     (a) This Credit Agreement, together with the other Credit Documents,
comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements,
written or oral, on such subject matter. In the event of any conflict
between the provisions of this Credit Agreement and those of any other
Credit Document, the provisions of this Credit Agreement shall control;
provided that the inclusion of supplemental rights or remedies in favor
of the Administrative Agent or the Lenders in any other Credit Document
shall not be deemed a conflict with this Credit Agreement. Each Credit
Document was drafted with the joint participation of the respective
parties thereto and shall be construed neither against nor in favor of
any party, but rather in accordance with the fair meaning thereof.

     (b) This Credit Agreement shall become effective at such time when
all of the conditions set forth in Section 4.1 have been satisfied or
waived by the Lenders and it shall have been executed by the Borrower,
the Guarantors and the Administrative Agent, and the Administrative Agent
shall have received copies hereof (telefaxed or otherwise) which, when
taken together, bear the signatures of each Lender, and thereafter this
Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Guarantors, the Administrative Agent and each Lender and
their respective successors and permitted assigns.

     (c) This Credit Agreement shall be a continuing agreement and shall
remain in full force and effect until all Loans, LOC Obligations,
interest, fees and other Credit Party Obligations (other than those
obligations that expressly survive the termination of this Credit
Agreement) have been paid in full and all Commitments and Letters of
Credit have been terminated. Upon termination, the Credit Parties shall
have no further obligations (other than those obligations that expressly
survive the termination of this Credit Agreement) under the Credit
Documents and the Administrative Agent shall, at the request and expense
of the Borrower, deliver all the Collateral in its possession to the
Borrower and release all Liens on the Collateral; provided that should
any payment, in whole or in part, of the Credit Party Obligations be
rescinded or otherwise required to be restored or returned by the
Administrative Agent or any Lender, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, then the Credit
Documents

100

 

shall automatically be reinstated and all Liens of the
Administrative Agent shall reattach to the Collateral and all amounts
required to be restored or returned and all costs and expenses incurred
by the Administrative Agent or any Lender in connection therewith shall
be deemed included as part of the Credit Party Obligations.

     Section 9.11. Severability.

     Any provision of this Credit Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     Section 9.12. Governing Law.

     This Credit Agreement and the Notes and the rights and obligations of the
parties under this Credit Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of North
Carolina.

     Section 9.13. Consent to Jurisdiction and Service of Process.

     All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Credit Agreement, any Note or any of the
other Credit Documents may be brought in any state or federal court of
competent jurisdiction in the State of North Carolina, and, by execution and
delivery of this Credit Agreement, each of the Borrower and the other Credit
Parties accepts, for itself and in connection with its properties, generally
and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Credit Agreement from which no appeal has been taken or is
available. Each of the Borrower and the other Credit Parties irrevocably
agrees that all service of process in any such proceedings in any such court
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to it at its address
set forth in Section 9.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto, such service being hereby
acknowledged by the each of the Borrower and the other Credit Parties to be
effective and binding service in every respect. Each of the Borrower, the
other Credit Parties, the Administrative Agent and the Lenders irrevocably
waives any objection, including, without limitation, any objection to the
laying of venue or based on the grounds of forum non conveniens, which it may
now or hereafter have to the bringing of any such action or proceeding in any
such jurisdiction. Nothing herein shall affect the right to serve process in
any other manner permitted by law or shall limit the right of any Lender to
bring proceedings against the Borrower or the other Credit Parties in the court
of any other jurisdiction.

     Section 9.14. Arbitration.

     (a) Notwithstanding the provisions of Section 9.13 to the contrary,
upon demand of any party hereto, whether made before or within three (3)
months after institution of any judicial proceeding, any dispute, claim
or controversy arising out of,

101

 

connected with or relating to this Credit Agreement and the other
Credit Documents (“Disputes”) between or among parties to this Credit
Agreement shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right
of that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaims, disputes as to whether a
matter is subject to arbitration, claims brought as class actions, claims
arising from Credit Documents executed in the future, or claims arising
out of or connected with the transactions reflected by this Credit
Agreement.

     Arbitration shall be conducted under and governed by the Commercial
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration
Association (the “AAA”) and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. A hearing shall begin within
90 days of demand for arbitration and all hearings shall be concluded within
120 days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then no more than a total
extension of 60 days. The expedited procedures set forth in Rule 51 et seq. of
the Arbitration Rules shall be applicable to claims of less than $1,000,000.
All applicable statutes of limitation shall apply to any Dispute. A judgment
upon the award may be entered in any court having jurisdiction. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties hereto do not waive applicable
Federal or state substantive law except as provided herein. Notwithstanding
the foregoing, this arbitration provision does not apply to disputes under or
related to Hedging Agreements.

     (b) Notwithstanding the preceding binding arbitration provisions,
the Administrative Agent, the Lenders, the Borrower and the other Credit
Parties agree to preserve, without diminution, certain remedies that the
Administrative Agent on behalf of the Lenders may employ or exercise
freely, independently or in connection with an arbitration proceeding or
after an arbitration action is brought. The Administrative Agent on
behalf of the Lenders shall have the right to proceed in any court of
proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable (i) all rights to foreclose against any
real or personal property or other security by exercising a power of sale
granted under Credit Documents or under applicable law or by judicial
foreclosure and sale, including a proceeding to confirm the sale; (ii)
all rights of self-help including peaceful occupation of real property
and collection of rents, set-off, and peaceful possession of personal
property; (iii) obtaining provisional or ancillary remedies including
injunctive relief, sequestration, garnishment, attachment, appointment of
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Preservation of these
remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute.

     (c) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now
or which may arise in the future in connection with any Dispute whether
the Dispute is resolved by arbitration or judicially.

102

 

     (d) By execution and delivery of this Credit Agreement, each of the
parties hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction relating to
any arbitration proceedings conducted under the Arbitration Rules in
Charlotte, North Carolina and irrevocably agrees to be bound by any final
judgment rendered thereby in connection with this Credit Agreement from
which no appeal has been taken or is available.

     Section 9.15. Confidentiality.

     The Administrative Agent and each of the Lenders agrees that, without the
prior consent of the Borrower, it will use its best efforts not to disclose any
information with respect to the Credit Parties which is furnished pursuant to
this Credit Agreement, any other Credit Document or any documents contemplated
by or referred to herein or therein and which is designated by the Borrower to
the Lenders in writing as confidential or as to which it is otherwise
reasonably clear such information is not public, except that any Lender may
disclose any such information (a) to its employees, Affiliates, auditors and
counsel or to another Lender, (b) as has become generally available to the
public other than by a breach of this Section 9.15, (c) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or the OCC or the NAIC or similar organizations (whether in the
United States or elsewhere) or their successors, (d) as may be required or
appropriate in response to any summons or subpoena or any law, order,
regulation or ruling applicable to such Lender, (e) to any prospective
Participant or assignee in connection with any contemplated transfer pursuant
to Section 9.6; provided that such prospective transferee shall have been made
aware of this Section 9.15 and shall have agreed to be bound by its provisions
as if it were a party to this Credit Agreement, (f) to Gold Sheets and other
similar bank trade publications; such information to consist of deal terms and
other information regarding the credit facilities evidenced by this Credit
Agreement customarily found in such publications, (g) in connection with any
suit, action or proceeding for the purpose of defending itself, reducing its
liability, or protecting or exercising any of its claims, rights, remedies or
interests under or in connection with the Credit Documents or any Secured
Hedging Agreement, (h) to any direct or indirect contractual counterparty in
swap agreements or such contractual counterparty’s professional advisor (so
long as such contractual counterparty or professional advisor to such
contractual counterparty agrees to be bound by the provisions of this Section
9.15), and (i) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender’s investment portfolio in connection with
ratings issued with respect to such Lender.

     Section 9.16.Acknowledgments.

     The Borrower and the other Credit Parties each hereby acknowledges that:

     (a) it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;

     (b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower or any other Credit
Party arising out of or in

103

 

connection with this Credit Agreement and the relationship between
Administrative Agent and Lenders, on one hand, and the Borrower and the
other Credit Parties, on the other hand, in connection herewith is solely
that of debtor and creditor; and

     (c) no joint venture exists among the Lenders or among the Borrower
or the other Credit Parties and the Lenders.

     Section 9.17. Waivers of Jury Trial; Waiver of Consequential Damages.

     THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN. Each of the Borrower, the other Credit Parties, the Administrative
Agent and the Lenders agree not to assert any claim against any other party to
this Credit Agreement or any their respective directors, officers, employees,
attorneys, Affiliates or agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise
relating to any of the transactions contemplated herein.

     Section 9.18. Patriot Act Notice.

     Each Lender and the Administrative Agent (for itself and not on behalf of
any other party) hereby notifies the Borrower that, pursuant to the
requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into
law October 26, 2001 (the “Patriot Act”), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Patriot Act.

ARTICLE X

GUARANTY

     Section 10.1. The Guaranty.

     In order to induce the Lenders to enter into this Credit Agreement and any
Hedging Agreement Provider to enter into any Secured Hedging Agreement and to
extend credit hereunder and thereunder and in recognition of the direct
benefits to be received by the Guarantors from the Extensions of Credit
hereunder and any Secured Hedging Agreement, each of the Guarantors hereby
agrees with the Administrative Agent and the Lenders as follows: the Guarantor
hereby unconditionally and irrevocably jointly and severally guarantees as
primary obligor and not merely as surety the full and prompt payment when due,
whether upon maturity, by acceleration or otherwise, of any and all Credit
Party Obligations. If any or all of the Credit Party Obligations becomes due
and payable hereunder or under any Secured Hedging Agreement, each Guarantor
unconditionally promises to pay such indebtedness to the Administrative Agent,
the Lenders, the Hedging Agreement Providers, or their respective order,

104

 

or demand, together with any and all reasonable expenses which may be incurred
by the Administrative Agent or the Lenders in collecting any of the Credit
Party Obligations.

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

     Section 10.2. Bankruptcy.

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

     Section 10.3. Nature of Liability.

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

105

 

     Section 10.4. Independent Obligation.

     The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other Guarantor or the Borrower and whether or
not any other Guarantor or the Borrower is joined in any such action or
actions.

     Section 10.5. Authorization.

     Each of the Guarantors authorizes the Administrative Agent, each Lender
and each Hedging Agreement Provider without notice or demand (except as shall
be required by applicable statute and cannot be waived), and without affecting
or impairing its liability hereunder, from time to time to (a) renew,
compromise, extend, increase, accelerate or otherwise change the time for
payment of, or otherwise change the terms of the Credit Party Obligations or
any part thereof in accordance with this Agreement and any Secured Hedging
Agreement, as applicable, including any increase or decrease of the rate of
interest thereon, (b) take and hold security from any Guarantor or any other
party for the payment of this Guaranty or the Credit Party Obligations and
exchange, enforce waive and release any such security, (c) apply such security
and direct the order or manner of sale thereof as the Administrative Agent and
the Lenders in their discretion may determine and (d) release or substitute any
one or more endorsers, Guarantors, the Borrower or other obligors.

     Section 10.6. Reliance.

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

     Section 10.7. Waiver.

     (a) Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent, any Lender or any Hedging Agreement Provider to (i)
proceed against the Borrower, any other guarantor or any other party,
(ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party, or (iii) pursue any other remedy in
the Administrative Agent’s, any Lender’s or any Hedging Agreement
Provider’s power whatsoever. Each of the Guarantors waives any defense
based on or arising out of any defense of the Borrower, any other
guarantor or any other party other than payment in full of the Credit
Party Obligations (other than contingent indemnity obligations),
including without limitation any defense based on or arising out of the
disability of the Borrower, any other guarantor or any other party, or
the unenforceability of the Credit Party Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Credit Party Obligations.
Without limiting the generality of the provisions of this Article X, each
of the Guarantors

106

 

hereby specifically waives the benefits of N.C. Gen. Stat. § 26-7
through 26-9, inclusive. The Administrative Agent may, at its election,
foreclose on any security held by the Administrative Agent by one or more
judicial or nonjudicial sales (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Administrative
Agent or any Lender may have against the Borrower or any other party, or
any security, without affecting or impairing in any way the liability of
any Guarantor hereunder except to the extent the Credit Party Obligations
have been paid in full and the Commitments have been terminated. Each of
the Guarantors waives any defense arising out of any such election by the
Administrative Agent or any of the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantors against the
Borrower or any other party or any security.

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

     (c) Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result
of this Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, or otherwise) to the claims of the Lenders or any
Hedging Agreement Provider against the Borrower or any other guarantor of
the Credit Party Obligations of the Borrower owing to the Lenders or such
Hedging Agreement Provider (collectively, the “Other Parties”) and all
contractual, statutory or common law rights of reimbursement,
contribution or indemnity from any Other Party which it may at any time
otherwise have as a result of this Guaranty until such time as the Credit
Party Obligations shall have been paid in full and the Commitments have
been terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the Administrative
Agent, the Lenders or any Hedging Agreement Provider now have or may
hereafter have against any Other Party, any endorser or any other
guarantor of all or any part of the Credit Party Obligations of the
Borrower and any benefit of, and any right to participate in, any
security or collateral given to or for the benefit of the Lenders and/or
the Hedging Agreement Providers to secure payment of the Credit Party
Obligations of the Borrower until such time as the Credit Party
Obligations (other than contingent indemnity obligations) shall have been
paid in full and the Commitments have been terminated.

     Section 10.8. Limitation on Enforcement.

     The Lenders and the Hedging Agreement Providers agree that this Guaranty
may be enforced only by the action of the Administrative Agent acting upon the
instructions of the Required Lenders or such Hedging Agreement Provider (only
with respect to obligations under

107

 

the applicable Secured Hedging Agreement) and that no Lender or Hedging
Agreement Provider shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Credit Agreement and for the benefit of any
Hedging Agreement Provider under any Secured Hedging Agreement. The Lenders
and the Hedging Agreement Providers further agree that this Guaranty may not be
enforced against any director, officer, employee or stockholder of the
Guarantors.

     Section 10.9. Confirmation of Payment.

     The Administrative Agent and the Lenders will, upon request after payment
of the Credit Party Obligations and termination of the Commitments relating
thereto, confirm to the Borrower, the Guarantors or any other Person that such
indebtedness and obligations have been paid and the Commitments relating
thereto terminated, subject to the provisions of Section 10.2.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

108

 

     IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be duly executed and delivered by its proper and duly authorized officers as
of the day and year first above written.

	 	 	 	 	 
	BORROWER:	NCI BUILDING SYSTEMS, INC.

 	 
	 	By:  	/s/ Robert J. Medlock
 	 
	 	Name:  	Robert J. Medlock 	 
	 	Title: 	Executive Vice President and

Chief Financial Officer 	 
	 

	 	 	 	 	 
	GUARANTORS:	NCI HOLDING CORP.

NCI OPERATING CORP.

METAL COATERS OF CALIFORNIA, INC.

 	 
	 	By:  	/s/ Robert J. Medlock
 	 
	 	Name:  	Robert J. Medlock 	 
	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	A & S BUILDING SYSTEMS, L.P.

NCI BUILDING SYSTEMS, L.P.

METAL BUILDING COMPONENTS, L.P.

NCI GROUP, L.P.
			 	 
			NCI OPERATING CORP.,

as General Partner

 	 
	 	By:  		/s/ Robert J. Medlock
 	 
	 	Name:  	Robert J. Medlock 	 
	 	Title:  	Executive Vice President and

Chief Financial Officer 	 

109

 

	 	 	 	 	 

	 	 	 	 	 
	ADMINISTRATIVE AGENT

AND LENDERS:	WACHOVIA BANK, NATIONAL

ASSOCIATION,

as Administrative Agent and as a Lender

 	 
	 	By:  		/s/ Glenn F. Edwards
 	 
	 	Name:  	Glenn F. Edwards 	 
	 	Title:  	Managing Director 	 

110

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Syndication Agent and as a Lender

 	 
	 	By:  		/s/ Brian D. Corum
 	 
	 	Name:  	Brian D. Corum 	 
	 	Title:  	Managing Director 	 

111

 

	 	 	 	 	 

	 	 	 	 	 
	 	ALLIED IRISH BANKS, P.L.C.,

as a Lender

 	 
	 	By:  		/s/ Margaret Brennan
 	 
	 	Name:  	Margaret Brennan 	 
	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  		                     /s/ Joseph S. Aubujois
 	 
	 	Name:  	Joseph S. Aubujois 	 
	 	Title:  	Vice President 	 

112

 

	 	 	 	 	 

	 	 	 	 	 
	 	BNP PARIBAS,

as a Lender

 	 
	 	By:  		/s/ Mike Shryock
 	 
	 	Name:  	Mike Shryock 	 
	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  		                        /s/ Aurora L. Abella
 	 
	 	Name:  	Aurora L. Abella 	 
	 	Title:  	Vice President 	 

113

 

	 	 	 	 	 

	 	 	 	 	 
	 	CREDIT INDUSTRIEL ET COMMERCIAL,

as a Lender

 	 
	 	By:  		/s/ Anthony Rock
 	 
	 	Name:  	Anthony Rock 	 
	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  		                         /s/ Marcus Edward
 	 
	 	Name:  	Marcus Edward 	 
	 	Title:  	Vice President 	 

114

 

	 	 	 	 	 

	 	 	 	 	 
	 	COOPERATIEVE CENTRALE

RAIFFEISEN-BOERENLEENBANK B.V.

“RABOBANK INTERNATIONAL”,

NEW YORK BRANCH, as a Lender

 	 
	 	By:  		/s/ Bert M. Corum
 	 
	 	Name:  	Bert M. Corum 	 
	 	Title:  	Executive Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  		                       /s/ Rebecca O. Morrow
 	 
	 	Name:  	Rebecca O. Morrow 	 
	 	Title:  	Executive Director 	 

115

 

	 	 	 	 	 

	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION, as a

Lender

 	 
	 	By:  		/s/ Brian P. Schwinn
 	 
	 	Name:  	Brian P. Schwinn 	 
	 	Title:  	Duly Authorized Signatory 	 

116

 

	 	 	 	 	 

	 	 	 	 	 
	 	GUARANTY BANK, as a Lender

 	 
	 	By:  		/s/ Scott L. Brewer
 	 
	 	Name:  	Scott L. Brewer 	 
	 	Title:  	Senior Vice President 	 

117

 

	 	 	 	 	 

	 	 	 	 	 
	 	NATIONAL CITY BANK,

as a Lender

 	 
	 	By:  		/s/ Frank Byrne
 	 
	 	Name:  	Frank Byrne 	 
	 	Title:  	Account Officer 	 

118

 

	 	 	 	 	 

	 	 	 	 	 
	 	SOUTHWEST BANK OF TEXAS, N.A.,

as a Lender

 	 
	 	By:  		/s/ Bennett D. Douglas
 	 
	 	Name:  	Bennett D. Douglas 	 
	 	Title:  	Senior Vice President 	 

119

 

	 	 	 	 	 

	 	 	 	 	 
	 	WASHINGTON MUTUAL BANK,

as a Lender

 	 
	 	By:  		/s/ Richard J. Ameny, Jr.
 	 
	 	Name:  	Richard J. Ameny, Jr. 	 
	 	Title:  	Vice President 	 
	 

DALLAS 1447622v1

120<PAGE>

                                                                    EXHIBIT 10.1

                CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

         This Contribution, Conveyance and Assumption Agreement (this
"Agreement") is entered into as of September 16, 2004, by and among Penn Octane
Corporation, a Delaware corporation ("POCC"), Rio Vista GP LLC, a Delaware
limited liability company (the "GP"), Rio Vista Energy Partners L.P., a Delaware
limited partnership (the "MLP"), Rio Vista Operating GP LLC, a Delaware limited
liability company (the "Operating GP"), and Rio Vista Operating Partnership
L.P., a Delaware limited partnership (the "Operating Partnership").

                                    RECITALS

         WHEREAS, prior to the date hereof, POCC formed the GP, as a
wholly-owned direct subsidiary, and purchased for $1,000.00 all of the limited
liability company interests in the GP;

         WHEREAS, the GP and POCC formed the MLP, with the GP purchasing a 2%
general partner interest for $20 and POCC purchasing common units representing a
98% limited partner interest for $980.00;

         WHEREAS, the MLP formed the Operating GP and purchased all of the
limited liability company interests in the Operating GP for $1,000.00;

         WHEREAS, POCC and the Operating GP formed the Operating Partnership,
with the Operating GP purchasing a 0.10% general partner interest for $1.00 and
POCC purchasing a 99.9% limited partner interest for $999.00;

         WHEREAS, each of the following transactions shall occur as of 4:58 P.M.
Eastern Time on September 30, 2004 (the "Contribution Effective Time"):

         1.       POCC will contribute all of its ownership interest in the
outstanding capital stock of its subsidiaries (the "Subsidiary Interests") set
forth on Exhibit A (the "Subsidiaries") hereto to the Operating Partnership as a
capital contribution;

         2.       POCC will contribute to the Operating Partnership the assets
set forth in the Conveyance Agreement described in Section 1.2 below (the "LPG
Assets") as an additional capital contribution; and

         3.       The GP will convey $1,000 to the MLP in exchange for the
issuance of incentive distribution rights to the GP;

         WHEREAS, each of the following transactions shall occur as of 4:59 P.M.
Eastern Time on September 30, 2004 (the "Closing Day Effective Time"):

         1. POCC will contribute all of its limited partner interest in the
Operating Partnership to the MLP as an additional capital contribution.

         NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, the parties to this Agreement undertake and agree as
follows:

                                   ARTICLE I

         CONVERSIONS, CONTRIBUTIONS AND DISTRIBUTIONS OF VARIOUS ASSETS

         SECTION 1.1 CONTRIBUTION OF THE SUBSIDIARY INTERESTS BY POCC TO THE
OPERATING PARTNERSHIP. At the Contribution Effective Time, POCC hereby grants,
contributes, transfers, assigns and conveys to the Operating Partnership, its
successors and assigns, all right, title and interest in and to the Subsidiary
Interests as a capital contribution and the Operating Partnership hereby accepts
the Subsidiary Interests.

<PAGE>

         SECTION 1.2 CONTRIBUTION OF LPG ASSETS BY POCC TO THE OPERATING
PARTNERSHIP. At the Contribution Effective Time, POCC hereby grants,
contributes, transfers, assigns and conveys to the Operating Partnership, its
successors and assigns, all right, title and interest in and to the LPG Assets
as a capital contribution, and the Operating Partnership hereby accepts the LPG
Assets. In order to give full effect to the foregoing grant, contribution,
transfer, assignment and conveyance, POCC, as grantor, and the Operating
Partnership, as grantee, shall execute a Conveyance Agreement in the form
attached hereto as Exhibit B together with such other special warranty deeds,
conveyances or other documents required to transfer the LPG Assets in the
jurisdictions in which they are located.

         SECTION 1.3 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY POCC TO
THE MLP. At the Closing Day Effective Time, POCC hereby grants, contributes,
transfers, assigns and conveys to the MLP, its successors and assigns, all
right, title and interest of POCC in and to the 99.9% limited partner interest
in the Operating Partnership as an additional capital contribution to the MLP
and the MLP hereby accepts such limited partner interest as an additional
capital contribution to the MLP.

         SECTION 1.4 CONVEYANCE BY THE GP TO THE MLP. At the Contribution
Effective Time, the GP hereby conveys to the MLP $1,000.00 in exchange for all
of the incentive distribution rights under the First Amended and Restated
Agreement of Limited Partnership of the MLP.

                                   ARTICLE II

                 RECORDATION OF EVIDENCE OF OWNERSHIP OF ASSETS

         SECTION 2.1. In connection with the conveyances that are referred to in
Article I to this Agreement, the parties to this Agreement acknowledge that
certain jurisdictions in which the assets of the applicable parties to such
conveyances are located may require that documents be recorded by such parties
resulting from such conveyances in order to evidence title to the assets owned
by such parties. All such documents shall evidence such new ownership and are
not intended to modify, and shall not modify, any of the terms, covenants and
conditions herein set forth.

                                  ARTICLE III

                        ASSUMPTION OF CERTAIN LIABILITIES

         SECTION 3.1 ASSUMPTION OF LIABILITIES AND OBLIGATIONS BY THE OPERATING
PARTNERSHIP AND THE MLP. In connection with the contributions of the LPG Assets
and the Subsidiary Interests to the Operating Partnership, the Operating
Partnership hereby assumes and agrees to duly and timely pay, perform and
discharge all obligations and liabilities associated with the Contributed
Assets, that arise from and after the Closing Day Effective Time, to the full
extent that either of the Subsidiaries or POCC would have been obligated to pay,
perform and discharge such obligations and liabilities in the future, were it
not for the execution and delivery of this Agreement; provided, however, that
said assumption and agreement to duly and timely pay, perform and discharge such
obligations and liabilities shall not increase the obligation of the Operating
Partnership with respect to such obligations and liabilities beyond that of POCC
as to the LPG Assets, or the Subsidiaries as to the assets acquired by the
Operating Partnership in such interest conveyed by any of POCC or the
Subsidiaries. For purposes of this Agreement, the term "Contributed Assets"
shall mean, collectively, the LPG Assets and the Subsidiary Interests.

                                       2
<PAGE>

                                   ARTICLE IV

                                  TITLE MATTERS

         .1 DISCLAIMER OF WARRANTIES; SUBROGATION.

         (a)      (i) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
                  AGREEMENT, THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE
                  AND AGREE THAT POCC AND THE SUBSIDIARIES HAVE NOT MADE, DO NOT
                  MAKE, AND SPECIFICALLY NEGATE AND DISCLAIM, ANY
                  REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS
                  OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
                  EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR
                  PRESENT (ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY POCC AND THE
                  SUBSIDIARIES) REGARDING (1) THE TITLE, VALUE, NATURE, QUALITY
                  OR CONDITION OF THE CONTRIBUTED ASSETS, (2) THE INCOME TO BE
                  DERIVED FROM THE CONTRIBUTED ASSETS, (3) THE SUITABILITY OF
                  THE CONTRIBUTED ASSETS FOR ANY AND ALL ACTIVITIES AND USES
                  WHICH THE MLP MAY CONDUCT THEREON, (4) THE COMPLIANCE OF OR BY
                  THE CONTRIBUTED ASSETS, OR THEIR OPERATIONS WITH ANY LAWS
                  (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL
                  PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS,
                  ORDERS OR REQUIREMENTS), OR (5) THE HABITABILITY,
                  MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A
                  PARTICULAR PURPOSE OF THE CONTRIBUTED ASSETS.

         (ii)     THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE AND AGREE
                  THAT THEY HAVE HAD THE OPPORTUNITY TO INSPECT THE CONTRIBUTED
                  ASSETS, AND THAT THEY ARE RELYING SOLELY ON THEIR OWN
                  INVESTIGATION OF THE CONTRIBUTED ASSETS, AND NOT ON ANY
                  INFORMATION PROVIDED OR TO BE PROVIDED BY POCC AND THE
                  SUBSIDIARIES, AND POCC AND THE SUBSIDIARIES ARE NOT LIABLE OR
                  BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS,
                  REPRESENTATIONS OR INFORMATION PERTAINING TO THE CONTRIBUTED
                  ASSETS, FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD
                  PARTY.

         (iii)    THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE THAT TO THE
                  MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE
                  CONTRIBUTED ASSETS, AS PROVIDED FOR HEREIN IS MADE ON AN "AS
                  IS", "WHERE IS" BASIS WITH ALL FAULTS AND THE CONTRIBUTED
                  ASSETS, ARE CONTRIBUTED OR DISTRIBUTED AND CONVEYED BY POCC
                  AND THE SUBSIDIARIES SUBJECT TO THE FOREGOING. THIS PARAGRAPH
                  SHALL SURVIVE SUCH CONTRIBUTION OR DISTRIBUTION AND CONVEYANCE
                  OR THE TERMINATION OF THIS AGREEMENT.

         (iv)     THE PROVISIONS OF THIS SECTION 4.1 HAVE BEEN NEGOTIATED BY
                  POCC, THE SUBSIDIARIES, THE MLP AND THE OPERATING PARTNERSHIP
                  AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE
                  EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES OF
                  POCC AND THE SUBSIDIARIES, WHETHER EXPRESS, IMPLIED OR
                  STATUTORY, WITH RESPECT TO THE CONTRIBUTED ASSETS, THAT MAY
                  ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR
                  OTHERWISE.

         (b)      The contributions of the Contributed Assets, made under this
                  Agreement are made with full rights of substitution and
                  subrogation of the Operating Partnership, and all persons
                  claiming by, through and under the Operating Partnership, to
                  the extent assignable, in and to all covenants and warranties
                  by the predecessors-in-title of POCC and the Subsidiaries, and
                  with full subrogation of

                                       3
<PAGE>

                  all rights accruing under applicable statutes of limitation
                  and all rights of action of warranty against all former owners
                  of the Contributed Assets.

         (c)      POCC, the Subsidiaries, the MLP, the GP, the Operating
                  Partnership and Operating GP agree that the disclaimers
                  contained in this Section 4.1 are "conspicuous" disclaimers.
                  Any covenants implied by statute or law by the use of the
                  words "grant," "convey," "bargain," "sell," "assign,"
                  "transfer," "deliver," or "set over" or any of them or any
                  other words used in this Agreement or any exhibits hereto are
                  hereby expressly disclaimed, waived or negated.

                                   ARTICLE V

                               FURTHER ASSURANCES

         .1 FURTHER ASSURANCES. From time to time after the date hereof, and
without any further consideration, POCC, the Subsidiaries, the GP, the MLP, the
Operating GP and the Operating Partnership shall execute, acknowledge and
deliver all such additional deeds, assignments, conveyances, instruments,
notices, releases, acquittances and other documents, and will do all such other
acts and things, all in accordance with applicable law, as may be necessary or
appropriate more fully and effectively to vest in the Operating Partnership and
the MLP and their successors and assigns beneficial and record title to the
Contributed Assets hereby contributed and assigned to the Operating Partnership
or intended so to be and to more fully and effectively carry out the purposes
and intent of this Agreement.

         .2 OTHER ASSURANCES. From time to time after the date hereof, and
without any further consideration, each of the parties to this Agreement shall
execute, acknowledge and deliver all such additional instruments, notices and
other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate to more fully and
effectively carry out the purposes and intent of this Agreement.

                                   ARTICLE VI

                                  MISCELLANEOUS

         .1 HEADINGS; REFERENCES; INTERPRETATION. All article and section
headings in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any of the provisions hereof.
The words "hereof," "herein" and "hereunder" and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole, including
without limitation, all exhibits attached hereto, and not to any particular
provision of this Agreement. All references herein to articles, sections, and
exhibits shall, unless the context requires a different construction, be deemed
to be references to the articles, sections and exhibits of this Agreement,
respectively, and all such Exhibits attached hereto are hereby incorporated
herein and made a part hereof for all purposes. All personal pronouns used in
this Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders, and the singular shall include the plural and vice
versa. The use herein of the word "including" following any general statement,
term or matter shall not be construed to limit such statement, term or matter to
the specific items or matters set forth immediately following such word or to
similar items or matters, whether or not non-limiting language (such as "without
limitation," "but not limited to," or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadest possible scope of such
general statement, term or matter.

         .2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties signatory hereto and their respective
successors and assigns.

         .3 NO THIRD PARTY RIGHTS. The provisions of this Agreement are intended
to bind the parties signatory hereto as to each other and are not intended to
and do not create rights in any other person or confer upon any other person any
benefits, rights or remedies and no person is or is intended to be a third party
beneficiary of any of the provisions of this Agreement.

                                       4
<PAGE>

         .4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.

         .5 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas applicable to contracts made and
to be performed wholly within such state without giving effect to conflict of
law principles thereof, except to the extent that it is mandatory that the law
of some other jurisdiction, shall apply.

         .6 SEVERABILITY. If any of the provisions of this Agreement are held by
any court of competent jurisdiction to contravene, or to be invalid under, the
laws of any political body having jurisdiction over the subject matter hereof,
such contravention or invalidity shall not invalidate the entire Agreement.
Instead, this Agreement shall be construed as if it did not contain the
particular provision or provisions held to be invalid, and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Agreement at the time of
execution of this Agreement.

         .7 AMENDMENT OR MODIFICATION. This Agreement may be amended or modified
from time to time only by the written agreement of all the parties hereto.

         .8 INTEGRATION. This Agreement, together with that certain Omnibus
Agreement dated of even date herewith, to be entered into by and among POCC,
certain of POCC's subsidiaries, the MLP, the GP, the Operating Partnership and
the Operating GP (the "Omnibus Agreement"), supersedes all previous
understandings or agreements between the parties, whether oral or written, with
respect to its subject matter. This document is an integrated agreement which
contains the entire understanding of the parties. No understanding,
representation, promise or agreement, whether oral or written, other than those
contained in the Omnibus Agreement, is intended to be or shall be included in or
form part of this Agreement unless it is contained in a written amendment hereto
executed by the parties hereto after the date of this Agreement.

                         (Signatures on following page)

                                       5
<PAGE>

         IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.

                            PENN OCTANE CORPORATION

                            By: /s/ RICHARD SHORE, JR.
                                ----------------------------------------
                            Name: Richard Shore, Jr.,
                                  --------------------------------------
                            Title: President
                                   -------------------------------------

                            RIO VISTA GP LLC

                            By: /s/ RICHARD SHORE, JR.
                                ----------------------------------------
                            Name: Richard Shore, Jr.,
                                  --------------------------------------
                            Title: President
                                   -------------------------------------

                            RIO VISTA ENERGY PARTNERS L.P.

                            By: RIO VISTA GP LLC,
                                its General Partner

                                By: /s/ RICHARD SHORE, JR.
                                    ------------------------------------
                                Name: Richard Shore, Jr.,
                                      ----------------------------------
                                Title: President
                                       ---------------------------------

                            RIO VISTA OPERATING GP LLC

                            By: /s/ RICHARD SHORE, JR.
                                ----------------------------------------
                            Name: Richard Shore, Jr.,
                                  --------------------------------------
                            Title: President
                                   -------------------------------------

                            RIO VISTA OPERATING PARTNERSHIP L.P.

                            By: Rio Vista Operating GP LLC, its General Partner

                                By: Rio Vista Energy Partners L.P.,
                                    its sole member

                                    By: Rio Vista GP LLC,
                                        its General Partner

                                        By: /s/ RICHARD SHORE, JR.
                                            ----------------------------
                                        Name: Richard Shore, Jr.,
                                              --------------------------
                                        Title: President
                                               -------------------------

                                       6
<PAGE>

                                    EXHIBIT A

                              LIST OF SUBSIDIARIES

         Penn-Octane de Mexico, S. de R.L. de C.V.

         Termatsal, S. de R.L. de C.V.

         Penn Octane International LLC

<PAGE>

                                    EXHIBIT B

<PAGE>

                              CONVEYANCE AGREEMENT

         Recording Requested by and When Recorded Return to: Fulbright &
Jaworski L.L.P., 300 Convent St., Suite 2200, San Antonio, Texas, Attn:
Christian G. Herff.

                              CONVEYANCE AGREEMENT

         This Conveyance Agreement (this "Conveyance"), effective as of 4:58
P.M. Eastern Time on September 30, 2004 (the "Effective Date"), is from PENN
OCTANE CORPORATION, a Delaware corporation (herein called "Grantor"), and in
favor of RIO VISTA OPERATING PARTNERSHIP L.P., whose mailing address is 820
Gessner Road, Suite 1285, Houston, TX 77024 (herein called "Grantee").

                                    ARTICLE I

                                 GRANTING CLAUSE

         1.1      GRANTING CLAUSES. Grantor hereby contributes, conveys,
assigns, transfers, delivers, and sets over unto Grantee, its successors and
assigns, all right, title, interests and estate of Grantor in and to the
following described property, to-wit:

         ALL OF THE ASSETS SET FORTH ON SCHEDULE A ATTACHED HERETO

         The property described in this Section 1.1 shall be referred to herein
collectively as the "Subject Property".

         TO HAVE AND TO HOLD the Subject Property, subject to the terms and
conditions hereof, unto Grantee, its successors and assigns, forever.

                                   ARTICLE II

                      ENCUMBRANCES AND WARRANTY DISCLAIMERS

         2.1      PERMITTED ENCUMBRANCES. This Conveyance is made and accepted
expressly subject to (a) all liens, charges, encumbrances, contracts,
agreements, instruments, obligations, defects, restrictions, security interests,
options or preferential rights to purchase, adverse claims, reservations,
exceptions, easements, rights-of-way, conditions, leases, other matters
affecting the Subject Property or to which it is subject; and (b) to all matters
that a current on the ground survey or visual inspection would reflect.

         2.2      CONTRIBUTION AGREEMENT. This Conveyance is expressly made
subject to the terms and conditions of that certain Contribution, Conveyance and
Assumption Agreement dated as of September 16, 2004, among Grantor, Grantee and
the other parties thereto (the "Contribution Agreement"). All capitalized terms
used herein shall have the meanings given to such terms in the Contribution
Agreement, unless otherwise defined herein. Nothing contained in this Conveyance
shall in any way affect the provisions set forth in the Contribution Agreement
nor shall this Conveyance expand or contract any rights or remedies under the
Contribution Agreement. This Conveyance is intended only to effect the transfer
of the Subject Property to Grantee as provided for in the Contribution Agreement
and shall be governed entirely in accordance with the terms and conditions of
the Contribution Agreement. In the event of a conflict between the terms of this
Conveyance and the terms of the Contribution Agreement, the terms of the
Contribution Agreement shall prevail.

         2.3      DISCLAIMER OF WARRANTIES; SUBROGATION. Except as expressly
provided herein or in the Contribution Agreement, this Conveyance is made, and
is accepted by Grantee, without warranty of title, express, implied or
statutory, and without recourse, but with full substitution and subrogation of
Grantee, and all persons claiming by, through, and under Grantee, to the extent
assignable, in and to all covenants and warranties by the predecessors in title
of Grantor and with full subrogation of all rights accruing under applicable
statutes of limitation or prescription and all rights of action of warranty
against all former owners of the Subject Property. Except as

                                      D-1
<PAGE>

expressly provided herein or in the Contribution Agreement, any covenants
implied by statute or by the use of the words "convey", "sell", "assign",
"transfer", "deliver", or "set over" or any of them or any other words used in
this Conveyance, are hereby expressly disclaimed, waived and negated.

                                   ARTICLE III

                                  MISCELLANEOUS

         3.1      FURTHER ASSURANCES. Grantor and Grantee agree to take all such
further actions and to execute, acknowledge and deliver all such further
documents that are necessary or useful in carrying out the purposes of this
Conveyance. So long as authorized by applicable law so to do, Grantor agrees to
execute, acknowledge and deliver to Grantee all such other additional
instruments, notices, affidavits, deeds, conveyances, assignments and other
documents and to do all such other and further acts and things as may be
necessary or useful to more fully and effectively grant, assign, convey,
transfer and deliver to Grantee the Subject Property conveyed hereby or intended
so to be conveyed.

         3.2      SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARY. This
Conveyance shall be binding upon, and shall inure to the benefit of, Grantor and
Grantee and their successors and assigns. The provisions of this Conveyance are
not intended to and do not create rights in any other person or entity or confer
upon any other person or entity any benefits, rights or remedies and no person
or entity is or is intended to be a third party beneficiary of any of the
provisions of this Conveyance.

         3.3      GOVERNING LAW. This Conveyance and the legal relations between
the parties shall be governed by, and construed in accordance with, the laws of
the State of Texas, excluding any conflict of law rule which would refer any
issue to the laws of another jurisdiction, except when it is mandatory that the
law of the jurisdiction wherein the Subject Property is located shall apply.

         3.4      HEADINGS; REFERENCES; DEFINED TERMS. All Section headings in
this Conveyance are for convenience only and shall not be deemed to control or
affect the meaning or construction of any of the provisions hereof. The words
"hereof", "herein" and "hereunder" and words of similar import, when used in
this Conveyance, shall refer to this Conveyance as a whole, including, without
limitation, all Schedules and Exhibits attached hereto, and not to any
particular provision of this Conveyance.

         3.5      COUNTERPARTS. This Conveyance may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.

         3.6      SEVERABILITY. If any of the provisions of this Conveyance are
held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity shall not invalidate the entire
agreement. Instead, this Conveyance shall be construed as if it did not contain
the particular provision or provisions held to be invalid and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Conveyance at the time of
execution of this Conveyance.

                                      D-2
<PAGE>

         IN WITNESS WHEREOF, this Conveyance has been duly executed by the
parties hereto on the dates of the acknowledgments set forth below, to be
effective, however, as of the Effective Date.

                        GRANTOR:

                        PENN OCTANE CORPORATION

                        By: __________________________________________
                        Name: Richard Shore, Jr.
                        Title: President

                        GRANTEE:

                        RIO VISTA OPERATING PARTNERSHIP L.P.

                        By: Rio Vista Operating GP LLC, its General Partner

                            By: Rio Vista Energy Partners L.P.,
                                its sole member

                                By: Rio Vista GP LLC,
                                    its General Partner

                                    By: ______________________________
                                    Name: Richard Shore, Jr.
                                    Title: President

                                      D-3
<PAGE>

THE STATE OF TEXAS       )
                         )
COUNTY OF _________      )

         This instrument was acknowledged before me on the ____ day of
___________, 2004, by ______________, ______________ of
________________________, on behalf of and in [HIS/HER] capacity as __________
of_____________________

                                       ___________________________________
                                       NOTARY PUBLIC

My Commission Expires: _______________________

                                      D-4
<PAGE>

                                   SCHEDULE A

                                      D-5

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