Document:

Exhibit 10.1

 

 

 

AMENDED AND RESTATED
CREDIT AGREEMENT

 

among

 

DJ ORTHOPEDICS, LLC

and

CERTAIN OF ITS FOREIGN
SUBSIDIARIES PARTY HERETO FROM TIME TO TIME,

as Borrowers,

 

DJ ORTHOPEDICS, INC.,

 

THE LENDERS NAMED HEREIN,

 

WACHOVIA BANK, NATIONAL
ASSOCIATION,

as Administrative Agent,

 

BANK OF THE WEST

and

WELLS FARGO BANK,
NATIONAL ASSOCIATION,

as Syndication Agents,

 

and

 

BANK OF AMERICA, N.A.

and

UNION BANK OF CALIFORNIA,
N.A.,

as Documentation Agents

 

 

$125,000,000 Senior
Secured Credit Facilities

 

 

WACHOVIA CAPITAL MARKETS,
LLC

Sole Book Runner and Sole
Lead Arranger

 

Dated as of May 5, 2005

 

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Defined
  Terms

  	
  1

  
	
  1.2

  	
  Accounting Terms

  	
  31

  
	
  1.3

  	
  Types of Borrowings

  	
  31

  
	
  1.4

  	
  Other Terms;
  Construction

  	
  31

  
	
  1.5

  	
  Exchange
  Rates; Currency Equivalents

  	
  32

  
	
  1.6

  	
  Redenomination
  of Certain Foreign Currencies and Computation of Dollar Amounts

  	
  32

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMOUNT AND
  TERMS OF THE LOANS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Commitments

  	
  33

  
	
  2.2

  	
  Borrowings

  	
  34

  
	
  2.3

  	
  Disbursements;
  Funding Reliance; Domicile of Loans

  	
  38

  
	
  2.4

  	
  Evidence of Debt; Notes

  	
  39

  
	
  2.5

  	
  Termination
  and Reduction of Commitments and Swingline Commitment

  	
  39

  
	
  2.6

  	
  Mandatory
  Payments and Prepayments

  	
  40

  
	
  2.7

  	
  Voluntary Prepayments

  	
  44

  
	
  2.8

  	
  Interest

  	
  45

  
	
  2.9

  	
  Fees

  	
  47

  
	
  2.10

  	
  Interest Periods

  	
  48

  
	
  2.11

  	
  Conversions and
  Continuations

  	
  49

  
	
  2.12

  	
  Method of
  Payments; Computations

  	
  50

  
	
  2.13

  	
  Recovery of Payments

  	
  52

  
	
  2.14

  	
  Use of Proceeds

  	
  52

  
	
  2.15

  	
  Pro Rata Treatment

  	
  52

  
	
  2.16

  	
  Increased
  Costs; Change in Circumstances; Illegality; etc

  	
  53

  
	
  2.17

  	
  Taxes

  	
  55

  
	
  2.18

  	
  Compensation

  	
  58

  
	
  2.19

  	
  Replacement
  of Lenders; Mitigation of Costs

  	
  58

  
	
  2.20

  	
  Increase
  in Revolving Credit Commitments

  	
  60

  
	
  2.21

  	
  Incremental Term Loans

  	
  63

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  III

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LETTERS
  OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Issuance

  	
  66

  
	
  3.2

  	
  Notices

  	
  67

  
	
  3.3

  	
  Participations

  	
  67

  
	
  3.4

  	
  Reimbursement

  	
  68

  

 

i

 

	
  3.5

  	
  Payment by Revolving
  Loans

  	
  68

  
	
  3.6

  	
  Payment to
  Revolving Credit Lenders

  	
  69

  
	
  3.7

  	
  Obligations Absolute

  	
  69

  
	
  3.8

  	
  Cash Collateral Account

  	
  71

  
	
  3.9

  	
  Effectiveness

  	
  72

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  IV

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CONDITIONS
  OF BORROWING

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Conditions of
  Initial Borrowing

  	
  72

  
	
  4.2

  	
  Conditions of All
  Borrowings

  	
  75

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  V

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Corporate
  Organization and Power

  	
  76

  
	
  5.2

  	
  Authorization;
  Enforceability

  	
  76

  
	
  5.3

  	
  No Violation

  	
  76

  
	
  5.4

  	
  Governmental
  and Third-Party Authorization; Permits

  	
  77

  
	
  5.5

  	
  Litigation

  	
  77

  
	
  5.6

  	
  Taxes

  	
  77

  
	
  5.7

  	
  Subsidiaries

  	
  78

  
	
  5.8

  	
  Full Disclosure

  	
  78

  
	
  5.9

  	
  Margin Regulations

  	
  78

  
	
  5.10

  	
  No Material Adverse
  Effect

  	
  79

  
	
  5.11

  	
  Financial Matters

  	
  79

  
	
  5.12

  	
  Ownership of Properties

  	
  80

  
	
  5.13

  	
  ERISA

  	
  80

  
	
  5.14

  	
  Environmental Matters

  	
  80

  
	
  5.15

  	
  Compliance with Laws

  	
  81

  
	
  5.16

  	
  Intellectual Property

  	
  81

  
	
  5.17

  	
  Regulated Industries

  	
  81

  
	
  5.18

  	
  Insurance

  	
  81

  
	
  5.19

  	
  Material Contracts

  	
  82

  
	
  5.20

  	
  Deposit Accounts

  	
  82

  
	
  5.21

  	
  Security Documents

  	
  82

  
	
  5.22

  	
  Labor Relations

  	
  83

  
	
  5.23

  	
  No Burdensome
  Restrictions

  	
  83

  
	
  5.24

  	
  OFAC; Anti-Terrorism
  Laws

  	
  83

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  VI

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Financial Statements

  	
  84

  
	
  6.2

  	
  Other
  Business and Financial Information

  	
  84

  
	
  6.3

  	
  Existence;
  Franchises; Maintenance of Properties

  	
  86

  
	
  6.4

  	
  Compliance with Laws

  	
  87

  

 

ii

 

	
  6.5

  	
  Payment of Obligations

  	
  87

  
	
  6.6

  	
  Insurance

  	
  87

  
	
  6.7

  	
  Maintenance
  of Books and Records; Inspection

  	
  87

  
	
  6.8

  	
  [Reserved.]

  	
  88

  
	
  6.9

  	
  Permitted Acquisitions

  	
  88

  
	
  6.10

  	
  Creation
  or Acquisition of Subsidiaries

  	
  89

  
	
  6.11

  	
  Additional Security

  	
  91

  
	
  6.12

  	
  Environmental Laws

  	
  91

  
	
  6.13

  	
  OFAC, PATRIOT Act
  Compliance

  	
  91

  
	
  6.14

  	
  Further Assurances

  	
  92

  
	
  6.15

  	
  Post-Closing Matters

  	
  92

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  VII

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FINANCIAL
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Total Leverage Ratio

  	
  92

  
	
  7.2

  	
  Fixed Charge Ratio

  	
  93

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  VIII

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEGATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Merger; Consolidation

  	
  93

  
	
  8.2

  	
  Indebtedness

  	
  94

  
	
  8.3

  	
  Liens

  	
  95

  
	
  8.4

  	
  Asset Dispositions

  	
  97

  
	
  8.5

  	
  Investments

  	
  98

  
	
  8.6

  	
  Restricted Payments

  	
  100

  
	
  8.7

  	
  Transactions with
  Affiliates

  	
  101

  
	
  8.8

  	
  Lines of Business

  	
  102

  
	
  8.9

  	
  Sale-Leaseback
  Transactions

  	
  102

  
	
  8.10

  	
  Certain Amendments

  	
  102

  
	
  8.11

  	
  Limitation on
  Certain Restrictions

  	
  103

  
	
  8.12

  	
  No Other Negative
  Pledges

  	
  103

  
	
  8.13

  	
  Fiscal Year

  	
  104

  
	
  8.14

  	
  Accounting Changes

  	
  104

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  IX

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Events of Default

  	
  104

  
	
  9.2

  	
  Remedies:
  Termination of Commitments, Acceleration, etc

  	
  106

  
	
  9.3

  	
  Remedies: Set-Off

  	
  107

  

 

iii

 

	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  X

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Appointment

  	
  108

  
	
  10.2

  	
  Nature of Duties

  	
  108

  
	
  10.3

  	
  Exculpatory Provisions

  	
  108

  
	
  10.4

  	
  Reliance by
  Administrative Agent

  	
  109

  
	
  10.5

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
  109

  
	
  10.6

  	
  Notice of Default

  	
  110

  
	
  10.7

  	
  Indemnification

  	
  110

  
	
  10.8

  	
  The
  Administrative Agent in its Individual Capacity

  	
  111

  
	
  10.9

  	
  Successor
  Administrative Agent

  	
  111

  
	
  10.10

  	
  Collateral Matters

  	
  112

  
	
  10.11

  	
  Issuing
  Lender and Swingline Lender

  	
  112

  
	
  10.12

  	
  Other Agents, Managers

  	
  112

  
	
  10.13

  	
  Power
  of Attorney for German Collateral Agreements

  	
  112

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE
  XI

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Fees and Expenses

  	
  113

  
	
  11.2

  	
  Indemnification

  	
  114

  
	
  11.3

  	
  Governing
  Law; Consent to Jurisdiction

  	
  114

  
	
  11.4

  	
  Waiver of Jury Trial

  	
  115

  
	
  11.5

  	
  Notices

  	
  115

  
	
  11.6

  	
  Amendments, Waivers, etc

  	
  116

  
	
  11.7

  	
  Assignments,
  Participations

  	
  118

  
	
  11.8

  	
  No Waiver

  	
  121

  
	
  11.9

  	
  Successors and Assigns

  	
  121

  
	
  11.10

  	
  Survival

  	
  121

  
	
  11.11

  	
  Severability

  	
  122

  
	
  11.12

  	
  Construction

  	
  122

  
	
  11.13

  	
  Confidentiality

  	
  122

  
	
  11.14

  	
  Judgment Currency

  	
  122

  
	
  11.15

  	
  Counterparts;
  Effectiveness

  	
  123

  
	
  11.16

  	
  Disclosure of
  Information

  	
  123

  
	
  11.17

  	
  Entire Agreement

  	
  123

  
	
  11.18

  	
  Nature
  of Liability of Foreign Borrowers

  	
  123

  
	
  11.19

  	
  Addition of Borrowers

  	
  124

  

 

iv

 

	
   

  	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1

  	
  Form of Term Note

  	
   

  
	
  Exhibit A-2

  	
  Form of Revolving Note

  	
   

  
	
  Exhibit A-3

  	
  Form of Swingline Note

  	
   

  
	
  Exhibit B-1

  	
  Form of Notice of
  Borrowing

  	
   

  
	
  Exhibit B-2

  	
  Form of Notice of
  Swingline Borrowing

  	
   

  
	
  Exhibit B-3

  	
  Form of Notice of
  Conversion/Continuation

  	
   

  
	
  Exhibit B-4

  	
  Form of Letter of
  Credit Notice

  	
   

  
	
  Exhibit C

  	
  Form of Compliance
  Certificate

  	
   

  
	
  Exhibit D

  	
  Form of Assignment and
  Acceptance

  	
   

  
	
  Exhibit E

  	
  Form of Security
  Agreement

  	
   

  
	
  Exhibit F

  	
  Form of Pledge
  Agreement

  	
   

  
	
  Exhibit G

  	
  Form of Guaranty
  Agreement

  	
   

  
	
  Exhibit H

  	
  Form of Financial
  Condition Certificate

  	
   

  
	
  Exhibit I

  	
  Form of Joinder Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1

  	
  Commitments and Notice
  Addresses

  	
   

  
	
  Schedule 3.1

  	
  Existing Letters of
  Credit

  	
   

  
	
  Schedule 5.1

  	
  Jurisdictions of
  Organization

  	
   

  
	
  Schedule 5.4

  	
  Consents and Approvals

  	
   

  
	
  Schedule 5.5

  	
  Litigation

  	
   

  
	
  Schedule 5.7

  	
  Subsidiaries

  	
   

  
	
  Schedule 5.12

  	
  Real Property Interests

  	
   

  
	
  Schedule 5.14

  	
  Environmental Matters

  	
   

  
	
  Schedule 5.16

  	
  Intellectual Property

  	
   

  
	
  Schedule 5.18

  	
  Insurance Coverage

  	
   

  
	
  Schedule 5.19

  	
  Material Contracts

  	
   

  
	
  Schedule 5.20

  	
  Deposit Accounts

  	
   

  
	
  Schedule 8.2

  	
  Indebtedness

  	
   

  
	
  Schedule 8.3

  	
  Liens

  	
   

  
	
  Schedule 8.5

  	
  Investments

  	
   

  
	
  Schedule 8.7

  	
  Transactions with
  Affiliates

  	
   

  

 

v

 

AMENDED
AND RESTATED CREDIT AGREEMENT

 

THIS
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 5th
day of May, 2005, is made among DJ
ORTHOPEDICS, LLC, a Delaware limited liability company (the “Company”),
each Foreign Subsidiary that, pursuant to a Joinder Agreement (as hereinafter
defined), becomes a party hereto as a borrower (each, a “Foreign Borrower,”
and together with the Company, the “Borrowers”), DJ ORTHOPEDICS, INC., a Delaware
corporation (the “Parent”), the Lenders (as hereinafter defined), WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent for the Lenders, BANK OF
THE WEST and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Syndication Agents for the Lenders, and BANK OF AMERICA, N.A. and UNION BANK OF CALIFORNIA, N.A., as
Documentation Agents for the Lenders.

 

BACKGROUND
STATEMENTS

 

A.            The Company, as borrower, the Parent, the lenders party
thereto, the Administrative Agent, and the syndication agent and documentation
agents identified therein are parties to a Credit Agreement, dated as of
November 26, 2003 (as amended prior to the date hereof, the “Existing Credit
Agreement”), providing for the availability of certain credit facilities to
the Company upon the terms and conditions set forth therein.

 

B.            The Company has requested, and the Lenders and the other
parties hereto have agreed, to amend and restate the Existing Credit Agreement
on the terms and conditions hereinafter set forth.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the mutual provisions,
covenants and agreements herein contained, the parties hereto hereby agree as
follows:

 

ARTICLE I

DEFINITIONS

 

1.1           Defined
Terms.  For
purposes of this Agreement, in addition to the terms defined elsewhere herein,
the following terms shall have the meanings set forth below (such meanings to
be equally applicable to the singular and plural forms thereof):

 

“Account Designation
Letter” shall mean a letter from one or more Borrowers to the
Administrative Agent, duly completed and signed by an Authorized Officer of
each such Borrower and in form and substance reasonably satisfactory to the
Administrative Agent, listing any one or more accounts to which such Borrower
may from time to time request the Administrative Agent to forward the proceeds
of any Loans made hereunder.

 

“Acquisition”
shall mean any transaction or series of related transactions, consummated on or
after the date hereof, by which the Company directly, or indirectly through one
or more Subsidiaries, (i) acquires any going business, division thereof or
line of business, or all or substantially all of the assets, of any
Person, whether through purchase of assets, merger or

 

 

otherwise, or (ii) acquires securities or other ownership
interests of any Person having at least a majority of combined voting power of
the then outstanding securities or other ownership interests of such Person.

 

“Acquisition Amount”
shall mean, with respect to any Acquisition, the sum (without duplication) of
(i) the amount of cash paid as part of the purchase price thereof by the
Company and its Subsidiaries in connection with such Acquisition, (ii) the
value of all Capital Stock of the Parent issued or given in connection with
such Acquisition (as determined by the parties thereto under the definitive
acquisition agreement), (iii) the amount (determined by using the face
amount or the amount payable at maturity, whichever is greater) of all
Indebtedness incurred, assumed or acquired by the Company and its Subsidiaries
in connection with such Acquisition, (iv) all Contingent Purchase Price
GAAP Amounts with respect to such Acquisition, (v) all amounts paid in
respect of covenants not to compete, consulting agreements and similar
arrangements entered into in connection with such Acquisition, and
(vi) the aggregate fair market value of all other real, mixed or personal
property paid as purchase price by the Company and its Subsidiaries in
connection with such Acquisition.

 

“Additional Revolving
Credit Lender” shall have the meaning given to such term in Section 2.20(a).

 

“Additional Term
Lender” shall have the meaning given to such term in Section 2.21(a).

 

“Adjusted Base Rate”
shall mean, at any time with respect to any Base Rate Loan of any Class, a rate
per annum equal to the Base Rate as in effect at such time plus the Applicable
Percentage for Base Rate Loans of such Class as in effect at such time.

 

“Adjusted LIBOR Rate”
shall mean, at any time with respect to any LIBOR Loan of any Class, a rate per
annum equal to the LIBOR Rate as in effect at such time plus the Applicable
Percentage for LIBOR Loans of such Class as in effect at such time.

 

“Administrative Agent”
shall mean Wachovia, in its capacity as Administrative Agent appointed under Section 10.1, and its successors and
permitted assigns in such capacity.

 

“Affiliate” shall
mean, as to any Person, each other Person that directly, or indirectly through
one or more intermediaries, owns or Controls, is Controlled by or under common
Control with, such Person or is a director or officer of such Person.  Notwithstanding the foregoing, neither the
Administrative Agent nor any Lender shall be deemed an “Affiliate” of
any Credit Party.

 

“Aggregate Revolving
Credit Exposure” shall mean, at any time, the sum of (i) the aggregate
principal Dollar Amount (determined as of the most recent Revaluation Date) of
Revolving Loans outstanding at such time, (ii) the aggregate Letter of
Credit Exposure of all Revolving Credit Lenders at such time and (iii) the
aggregate principal amount of Swingline Loans outstanding at such time.

 

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

 

2

 

“Applicable Currency”
shall mean (i) in the case of Term Loans, Dollars, (ii) in the case
of Dollar Revolving Loans, Dollars, (iii) in the case of any Foreign
Currency Revolving Loans, the Foreign Currency in which such Loans are to be
made or maintained, and (iv) in the case of any Letter of Credit to be
denominated in a Foreign Currency, the Foreign Currency in which such Letter of
Credit is to be denominated, as selected pursuant to the relevant Notice of
Borrowing, Notice of Conversion/Continuation or Letter of Credit Notice.

 

“Applicable Number of
Business Days” shall mean (i) with respect to all notices and
determinations in connection with Foreign Currency Revolving Loans or any
Letter of Credit to be denominated in a Foreign Currency, four (4) Business
Days, and (ii) with respect to all notices and determinations in
connection with Dollar Revolving Loans that are LIBOR Loans or any Letter of
Credit denominated in Dollars, three (3) Business Days.

 

“Applicable Percentage”
shall mean, at any time from and after the Closing Date, the applicable
percentage (i) to be added to the Base Rate for purposes of determining
the Adjusted Base Rate, (ii) to be added to the LIBOR Rate for purposes of
determining the Adjusted LIBOR Rate and (iii) to be used in calculating
the commitment fee payable pursuant to Section 2.9(b),
in each case as determined under the following matrix with reference to the
Total Leverage Ratio (provided that the Applicable Percentage for
Swingline Loans at any time shall be equal to (i) the Applicable
Percentage at such time for Revolving Loans that are Base Rate Loans minus
(ii) 0.50% (but in no event shall the Applicable Percentage for Swingline
Loans at any time be less than 0.0%)):

 

	
   

  	
   

  	
   

  	
   

  	
  Revolving Loans and Swingline

  Loans

  	
   

  	
  Tranche A Term Loans

  	
   

  	
   

  	
   

  
	
  Level

  	
   

  	
  Total

  Leverage Ratio

  	
   

  	
  Applicable

  LIBOR

  Margin

  	
   

  	
  Applicable

  Base Rate

  Margin

  	
   

  	
  Applicable

  LIBOR

  Margin

  	
   

  	
  Applicable

  Base Rate

  Margin

  	
   

  	
  Applicable

  Commitment

  Fee Percentage

  	
   

  
	
  I

  	
   

  	
  Greater than or equal
  to 2.25 to 1.0

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  0.50

  	
  %

  
	
  II

  	
   

  	
  Less than 2.25 to 1.0
  but greater than or equal to 1.75 to 1.0

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  0.375

  	
  %

  
	
  III

  	
   

  	
  Less than 1.75 to 1.0
  but greater than or equal to 1.25 to 1.0

  	
   

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  	
  0.375

  	
  %

  
	
  IV

  	
   

  	
  Less than 1.25 to 1.0

  	
   

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  	
  0.25

  	
  %

  

 

On each Adjustment Date
(as hereinafter defined), the Applicable Percentage for all Loans and the
commitment fee payable pursuant to Section 2.9(b)
shall be adjusted effective as of such Adjustment Date (based upon the
calculation of the Total Leverage Ratio as of the last day of the Reference
Period to which such Adjustment Date relates) in accordance with the above
matrix; provided, however, that, notwithstanding the foregoing or
anything else herein to the contrary, if at any time the Company shall have
failed to deliver any of the financial statements as required by Sections 6.1(a) or 6.1(b), as the case may be, or the
Compliance Certificate as required by Section 6.2(a),
then at all times from and including the fifth (5th) Business Day following the
date on which such statements and Compliance Certificate are

 

3

 

required to have been delivered until the date on which the same shall
have been delivered, each Applicable Percentage shall be determined based on
Level I above (notwithstanding the actual Total Leverage Ratio).  For purposes of this definition, “Adjustment
Date” shall mean, with respect to any Reference Period of the Company
beginning with the Reference Period ending as of the last day of the second
fiscal quarter of fiscal year 2005, the day of (or, if such day is not a
Business Day, the next succeeding Business Day) delivery by the Company in
accordance with Section 6.1(a)
or Section 6.1(b), as the
case may be, of (i) financial statements as of the end of and for such
Reference Period and (ii) a duly completed Compliance Certificate with
respect to such Reference Period.  From
the Closing Date until the first Adjustment Date requiring a change in any
Applicable Percentage as provided herein, each Applicable Percentage shall be
based on Level III above.

 

“Approved Fund”
shall mean any Fund that is administered or managed by (i) a Lender,
(ii) an Affiliate of a Lender, or (iii) a Person that administers or
manages a Lender or an Affiliate of such Person, or any finance company,
insurance company, investment bank or other financial institution that
temporarily warehouses loans for any of the foregoing.

 

“Arranger” shall
mean Wachovia Capital Markets, LLC and its successors.

 

“Asset Disposition”
shall mean any sale, assignment, lease, conveyance, transfer or other
disposition by the Parent or any of its Subsidiaries (whether in one or a
series of transactions) of all or any of its assets, business or other
properties (including Capital Stock of Subsidiaries), other than pursuant to a
Casualty Event.

 

“Assignee” shall
have the meaning given to such term in Section 11.7(a).

 

“Assignment and
Acceptance” shall mean an Assignment and Acceptance in substantially the
form of Exhibit D.

 

“Authorized Officer”
shall mean, with respect to any action specified herein to be taken by or on
behalf of a Credit Party, any officer of such Credit Party duly authorized by
resolution of its board of directors or other governing body to take such
action on its behalf, and whose signature and incumbency shall have been
certified to the Administrative Agent by the secretary or an assistant
secretary of such Credit Party.

 

“Bankruptcy Code”
shall mean 11 U.S.C. §§ 101 et seq., as amended from time to time,
and any successor statute.

 

“Base Rate” shall
mean the higher of (i) the per annum interest rate publicly announced from
time to time by Wachovia in Charlotte, North Carolina, to be its prime rate
(which may not necessarily be its lowest or best lending rate), as adjusted to
conform to changes as of the opening of business on the date of any such change
in such prime rate, and (ii) the Federal Funds Rate plus 0.5% per annum,
as adjusted to conform to changes as of the opening of business on the date of
any such change in the Federal Funds Rate.

 

“Base Rate Loan”
shall mean, at any time, any Loan that bears interest at such time at the
applicable Adjusted Base Rate.

 

4

 

“Borrowers” shall
have the meaning given to such term in the introductory paragraph hereof.

 

“Borrowing” shall
mean the incurrence by any Borrower (including as a result of conversions and
continuations of outstanding Loans pursuant to Section 2.11) on a single date of a group of Loans of a
single Class and Type and in a single Applicable Currency (or a Swingline Loan
made by the Swingline Lender) and, in the case of LIBOR Loans, as to which a
single Interest Period is in effect.

 

“Borrowing Date”
shall mean, with respect to any Borrowing, the date upon which such Borrowing
is made.

 

“Business Day”
shall mean (i) for all purposes other than as covered by clause (ii)
or (iii) below, any day other than a Saturday or Sunday, a legal holiday or a
day on which commercial banks in Charlotte, North Carolina or New York, New
York are authorized or required by law to be closed, (ii) with respect to
all notices and determinations in connection with, and payments in respect of,
LIBOR Loans, any day described in clause (i) above that is also a day on
which trading in deposits in the relevant Applicable Currency is conducted by
banks in London, England in the London interbank market, and (iii) with
respect to all notices and determinations in connection with, and payments in respect
of, any Foreign Currency Revolving Loans and all notices and determinations in
respect of any Letter of Credit denominated in a Foreign Currency, any day
described in clauses (i) and (ii) above that is also (A) in relation
to any date for payment or purchase of a Foreign Currency other than Euro, a
day on which banks are open for general business in the country of issuance of
the Applicable Currency where the relevant disbursement or payment office of
the Administrative Agent or its applicable Correspondent is located or
(B) in relation to any date for payment or purchase of Euro, any day
described in clause (A) above that is also a TARGET Day.

 

“Capital Expenditures”
shall mean, for any period, the aggregate amount (whether paid in cash or
accrued as a liability) that would, in accordance with GAAP, be included on the
consolidated statement of cash flows of the Parent and its Subsidiaries for
such period as additions to equipment, fixed assets, real property or
improvements or other capital assets (including, without limitation, Capital
Lease Obligations); provided, however, that Capital Expenditures
shall not include any such expenditures (i) for replacements and
substitutions for capital assets, to the extent made with the proceeds of
insurance in accordance with Section 2.6(e),
(ii) for replacements and substitutions for capital assets, to the extent
made with proceeds from the sale, exchange or other disposition of assets as
permitted under Sections 8.4(iv),
8.4(ii) or 8.4(v), or (iii) included within the
Acquisition Amount of any Permitted Acquisition.

 

“Capital Lease”
shall mean, with respect to any Person, any lease of property (whether real,
personal or mixed) by such Person as lessee that is or is required to be, in
accordance with GAAP, recorded as a capital lease on such Person’s balance
sheet.

 

“Capital Lease
Obligations” shall mean, with respect to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required

 

5

 

to be classified and accounted for as Capital Leases on a balance sheet
of such Person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.

 

“Capital Stock”
shall mean (i) with respect to any Person that is a corporation, any and
all shares, interests or equivalents in capital stock (whether voting or
nonvoting, and whether common or preferred) of such corporation, and
(ii) with respect to any Person that is not a corporation, any and all
partnership, membership, limited liability company or other equity interests of
such Person; and in each case, any and all warrants, rights or options to
purchase any of the foregoing.

 

“Cash Collateral
Account” shall have the meaning given to such term in Section 3.8.

 

“Cash Equivalents”
shall mean (i) securities issued or unconditionally guaranteed or insured
by the United States of America or any agency or instrumentality thereof,
backed by the full faith and credit of the United States of America and
maturing within one year from the date of acquisition, (ii) commercial
paper issued by any Person organized under the laws of the United States of
America, maturing within 180 days from the date of acquisition and, at the time
of acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor’s Ratings Services or at least P-1 or the equivalent
thereof by Moody’s Investors Service, Inc., (iii) time deposits and
certificates of deposit maturing within 180 days from the date of issuance and
issued by a bank or trust company organized under the laws of the United States
of America or any state thereof (y) that has combined capital and surplus
of at least $500,000,000 or (z) that has (or is a subsidiary of a bank
holding company that has) a long-term unsecured debt rating of at least A or
the equivalent thereof by Standard & Poor’s Ratings Services or at least A2
or the equivalent thereof by Moody’s Investors Service, Inc.,
(iv) repurchase obligations with a term not exceeding thirty (30) days
with respect to underlying securities of the types described in clause (i)
above entered into with any bank or trust company meeting the qualifications
specified in clause (iii) above, and (v) money market funds at least
ninety-five percent (95%) of the assets of which are continuously invested in
securities of the foregoing types.

 

“Casualty Event”
shall mean, with respect to any property (including any interest in property)
of any Credit Party, any loss of, damage to, or condemnation or other taking
of, such property for which such Credit Party receives insurance proceeds,
proceeds of a condemnation award or other compensation.

 

“Class” shall have
the meaning given to such term in Section 1.3.

 

“Closing Date”
shall mean the date upon which the initial extensions of credit are made
pursuant to this Agreement, which shall be the date upon which each of the
conditions set forth in Sections 4.1
and 4.2 shall have been satisfied
or waived in accordance with the terms of this Agreement.

 

“Collateral” shall
mean all the assets, property and interests in property that shall from time to
time be pledged or be purported to be pledged as direct or indirect security
for the Obligations pursuant to any one or more of the Security Documents.

 

6

 

“Commitment” shall
mean, with respect to any Lender, such Lender’s Tranche A Term Loan Commitment,
Incremental Term Loan Commitment and/or Revolving Credit Commitment, as
applicable.

 

“Company” shall
have the meaning given to such term in the introductory paragraph hereof.

 

“Compliance
Certificate” shall mean a fully completed and duly executed certificate in
the form of Exhibit C,
together with a Covenant Compliance Worksheet.

 

“Consolidated Cash
Interest Expense” shall mean, for any Reference Period, Consolidated
Interest Expense for such Reference Period to the extent paid (or required to
be paid) in cash, but excluding (i) amounts paid in connection with the
closing of this Agreement and treated as deferred financing charges under GAAP
and (ii) interest paid with respect to the 12-5/8% Senior Subordinated
Notes due 2009 issued by the Company and DJ Orthopedics Capital Corporation
(which notes have been redeemed in full).

 

“Consolidated Current
Assets” shall mean, as of any date of determination, all assets of the
Parent and its Subsidiaries (other than cash and Cash Equivalents) that would,
in accordance with GAAP, be classified on a consolidated balance sheet of the
Parent and its Subsidiaries as current assets as of such date.

 

“Consolidated Current
Liabilities” shall mean, as of any date of determination, all liabilities
(without duplication) of the Parent and its Subsidiaries that would, in
accordance with GAAP, be classified on a consolidated balance sheet of the
Parent and its Subsidiaries as current liabilities as of such date; provided,
however, that Consolidated Current Liabilities shall not include current
maturities of any long-term Indebtedness.

 

“Consolidated EBITDA”
shall mean, for any Reference Period, the aggregate of (i) Consolidated
Net Income for such Reference Period, plus (ii) the sum (without
duplication) of (A) Consolidated Interest Expense, (B) federal,
state, local and other taxes on or determined by reference to income,
(C) depreciation and amortization, (D) noncash charges related to
Hedge Agreements, (E) noncash expenses resulting from the grant of stock options
to any director, officer or employee of any Credit Party pursuant to a written
plan or agreement, (F) nonrecurring losses, charges and expenses incurred
in connection with Permitted Acquisitions to the extent such losses, charges
and expenses are approved by the Administrative Agent, (G) other noncash
charges (excluding noncash charges relating to accounts receivable or
inventories) in an aggregate amount not to exceed $10,000,000 for any fiscal
year, and (H) restructuring charges incurred during fiscal year 2004 in
the aggregate amount of approximately $4,700,000 related to the Regeneration
business integration and relocation of certain manufacturing operations, as
described more completely in the Parent’s annual report on Form 10-K for the
2004 fiscal year, in each case under clauses (A) through (H) above to the
extent taken into account in the calculation of Consolidated Net Income for
such Reference Period and all calculated in accordance with GAAP, minus
(iii) noncash gains related to Hedge Agreements, to the extent taken into
account in the calculation of Consolidated Net Income for such Reference Period
and calculated in accordance with GAAP; provided that if the Company or
any Subsidiary has made any Permitted Acquisition or any Asset Disposition
outside the ordinary course of business

 

7

 

permitted by Section 8.4
during the relevant Reference Period for determining Consolidated EBITDA,
Consolidated EBITDA for the relevant Reference Period (1) shall be
calculated after giving pro forma effect thereto, as if such Permitted
Acquisition or Asset Disposition (and any related incurrence, repayment or
assumption of Indebtedness, with any new Indebtedness being deemed to be
amortized over the relevant period in accordance with its terms, and assuming
that any Revolving Loans borrowed in connection with such Permitted Acquisition
are repaid with excess cash balances when available) had occurred on the first
day of such Reference Period, but in the case of a Permitted Acquisition, only
so long as the results of the business being acquired are supported by
financial statements or other financial data reasonably acceptable to the
Administrative Agent, and (2) may include operating expense reductions for
such Reference Period resulting from any Permitted Acquisition that is being
given pro forma effect to the extent that such operating expense reductions
(y) would be permitted pursuant to Article XI of Regulation S-X under the
Securities Act or (z) have been approved by the Required Lenders.

 

“Consolidated Fixed
Charges” shall mean, for any Reference Period, the aggregate (without
duplication) of the following, all determined on a consolidated basis for the
Parent and its Subsidiaries in accordance with GAAP for such Reference Period:
(a) Consolidated Cash Interest Expense, (b) aggregate cash tax
expense for such Reference Period, (c) cash Capital Expenditures for such
Reference Period, (d) the aggregate (without duplication) of all scheduled
payments of principal on Funded Debt (with respect to the Tranche A Term Loans,
as set forth in Section 2.6(a))
required to have been made by the Parent and its Subsidiaries during such
Reference Period (whether or not such payments are actually made), including
scheduled principal payments with respect to any Seller Subordinated
Indebtedness, (e) the aggregate of all cash payments made by the Parent
and its Subsidiaries during such period in respect of Contingent Purchase Price
Obligations, and (f) the aggregate of all amounts paid by the Parent or any
of its Subsidiaries during such Reference Period as dividends or distributions
in respect of its Capital Stock or to purchase, redeem, retire or otherwise
acquire its Capital Stock.

 

“Consolidated Interest
Expense” shall mean, for any Reference Period, the sum (without
duplication, and net of interest income) of (i) total interest expense of
the Parent and its Subsidiaries for such Reference Period in respect of
Consolidated Total Funded Debt (including, without limitation, all such
interest expense accrued or capitalized during such Reference Period, whether
or not actually paid during such Reference Period), determined on a
consolidated basis in accordance with GAAP, (ii) all net amounts payable
under or in respect of Hedge Agreements, to the extent paid or accrued by the
Parent and its Subsidiaries during such Reference Period, and (iii) all
recurring unused commitment fees and other ongoing fees in respect of Funded
Debt (including the unused fees and letter of credit fees provided for under Section 2.9) paid, accrued or
capitalized by the Parent and its Subsidiaries during such Reference Period.

 

“Consolidated Net
Income” shall mean, for any Reference Period, net income (or loss) for the
Parent and its Subsidiaries for such Reference Period, determined on a
consolidated basis in accordance with GAAP (excluding extraordinary items and
after deduction for minority interests); provided that, in making such
determination, there shall be excluded (i) the net income of any other
Person that is not a Subsidiary of the Parent (or is accounted for by the
Parent by the equity method of accounting) except to the extent of actual
payment of cash dividends or distributions by such Person to the Parent or any
Subsidiary of the Parent during such period, (ii) the net income (or loss)
of any other Person acquired by, or merged with, the Parent or any of

 

8

 

its Subsidiaries for any period prior to the date of such acquisition,
and (iii) the net income of any Subsidiary of the Parent to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary of such net income is not at the time permitted by operation of the
terms of its charter, certificate of incorporation or formation or other constituent
document or any agreement or instrument (other than a Credit Document) or
Requirement of Law applicable to such Subsidiary.

 

“Consolidated Total
Funded Debt” shall mean, as of any date of determination, the aggregate
(without duplication) of all Funded Debt of the Parent and its Subsidiaries as
of such date, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Working
Capital” shall mean, as of any date of determination, Consolidated Current
Assets as of such date minus Consolidated Current Liabilities as of such date.

 

“Contingent Purchase
Price GAAP Amount” shall mean, at any time, the Contingent Purchase Price
Obligation liability that, in accordance with GAAP, should be recorded as a
liability on the balance sheet, or (without duplication) an expense on the
income statement, of the Parent and its Subsidiaries.

 

“Contingent Purchase
Price Obligations” shall mean any earnout obligations or similar deferred
or contingent purchase price obligations of the Company or any of its Subsidiaries
incurred or created in connection with an Acquisition.

 

“Contingent Purchase
Price Reserve Amount” shall mean, with respect to any Contingent Purchase
Price Obligation, as of any date of determination, the maximum amount payable
with respect to such Contingent Purchase Price Obligation on such date of
determination (on a pro forma basis, assuming the consummation of any
Acquisition to be consummated on such date of determination) pursuant to the
acquisition agreement and other documentation evidencing such Contingent
Purchase Price Obligation, assuming the remaining maximum performance standards
related thereto are satisfied; provided that, to the extent that any
portion of a Contingent Purchase Price Obligation becomes a fixed, matured or
earned amount (through satisfaction of performance goals or targets or
otherwise), the Contingent Purchase Price Reserve Amount for such fixed amount
shall be the Contingent Purchase Price GAAP Amount therefor; and provided
further that, to the extent the calculation of the maximum amount
payable with respect to a Contingent Purchase Price Obligation cannot be
determined on the date of such determination, such amount shall be determined
in good faith by the Administrative Agent after consultation with the Company.

 

“Control” shall
mean, with respect to any Person, (i) the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise, or (ii) the beneficial ownership of securities or other
ownership interests of such Person having 15% or more of the combined voting
power of the then outstanding securities or other ownership interests of such
Person ordinarily (and apart from rights accruing under special circumstances)
having the right to vote in the election of directors or other governing body
of such Person; and the terms “Controlled” and “Controlling” have
correlative meanings.

 

9

 

“Correspondent”
shall mean Wachovia Bank, National Association, London branch, or any other
financial institution designated by the Administrative Agent to act as its
correspondent hereunder in respect of the disbursement and payment of Foreign
Currency Revolving Loans.

 

“Covenant Compliance
Worksheet” shall mean a fully completed worksheet in the form of
Attachment A to Exhibit C.

 

“Credit Documents”
shall mean this Agreement, the Notes, the Letters of Credit, the Fee Letter,
the Security Agreement, the Pledge Agreement, the Guaranty Agreement, any
Mortgages, any other Security Documents, and all other agreements, instruments,
documents and certificates now or hereafter executed and delivered to the
Administrative Agent or any Lender by or on behalf of an Borrower or any other
Credit Party with respect to this Agreement, in each case as amended, modified,
supplemented or restated from time to time, but specifically excluding any
Hedge Agreement to which any Credit Party and any Lender or Affiliate of any
Lender are parties.

 

“Credit Parties”
shall mean the Parent, the Company, the Company’s Subsidiaries, and their
respective successors.

 

“Debt Issuance”
shall mean the issuance or sale by the Parent or any of its Subsidiaries of any
debt securities or other Indebtedness, whether in a public offering or
otherwise, except for any Indebtedness permitted under Section 8.2.

 

“Default” shall
mean any event or condition that, with the passage of time or giving of notice,
or both, would constitute an Event of Default.

 

“Defaulting Lender”
shall mean any Lender that (i) has refused to fund, or otherwise defaulted
in the funding of, its ratable share of any Borrowing requested and permitted
to be made hereunder, including the funding of a participation interest in Letters
of Credit or Swingline Loans in accordance with the terms hereof, (ii) has
failed to pay to the Administrative Agent or any Lender when due an amount owed
by such Lender pursuant to the terms of this Credit Agreement, unless such
amount is subject to a good faith dispute, or (iii) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding or to
a receiver, trustee or similar official, and such refusal has not been
withdrawn or such default has not been cured within three (3) Business Days.

 

“Disqualified Capital
Stock” shall mean, with respect to any Person, any Capital Stock of such
Person that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event or otherwise, (i) matures or is mandatorily redeemable or subject to
any mandatory repurchase requirement, pursuant to a sinking fund obligation or
otherwise (other than any required offer to repay or repurchase (x) with
asset sale proceeds pursuant to customary arrangements providing that such
Person may (in lieu of making such offer) repay Indebtedness under this
Agreement or (y) pursuant to “change of control” provisions that are no
more restrictive than the analogous provisions contained in this Agreement), or
(ii) is convertible into or exchangeable for (whether at the option of the
issuer or the holder thereof) (y) debt securities or (z) any Capital
Stock referred to in (i) or (ii) above, in each case under (i) or (ii) above at
any time on or prior to the 180th day

 

10

 

after the Tranche A Term Loan Maturity Date (or, if later, any
Incremental Loan Maturity Date); provided, however, that only the
portion of Capital Stock that so matures or is mandatorily redeemable or is so
convertible or exchangeable on or prior to such date shall be deemed to be
Disqualified Capital Stock.

 

“Documentation Agents”
shall mean Bank of America, N.A. and Union Bank of California, N.A. in their
capacity as such under Section 10.12,
and their respective successors and permitted assigns in such capacity.

 

“Dollar Amount”
shall mean (i) with respect to Dollars or an amount denominated in
Dollars, such amount, and (ii) with respect to an amount of Foreign
Currency or an amount denominated in a Foreign Currency, the equivalent of such
amount in Dollars as determined by the Administrative Agent at such time on the
basis of the Spot Rate (determined with respect to the most recent Revaluation
Date) for the purchase of Dollars with such Foreign Currency.

 

“Dollar LIBOR Loans”
shall mean, at any time, each of the LIBOR Loans made in, or then denominated
in, Dollars.

 

“Dollar Loans”
shall mean, at any time, each of the Loans made in, or then denominated in,
Dollars.

 

“Dollar Revolving
Loans” shall have the meaning given to such term in Section 2.1(b).

 

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

 

“Domestic Obligations”
shall mean all Obligations other than Foreign Obligations.

 

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

 

“Eligible Assignee”
shall mean (i) a Lender, (ii) an Affiliate of a Lender, (iii) an
Approved Fund with respect to a Lender, and (iv) any other Person (other
than a natural person) approved by (x) the Administrative Agent,
(y) in the case of any assignment of a Revolving Credit Commitment, the
Issuing Lender, and (z) unless a Default or Event of Default has occurred
and is continuing, the Company (each such approval to be evidenced by the
approving party’s counterexecution of the relevant Assignment and Acceptance
and not to be unreasonably withheld or delayed); provided, however,
that in no event shall the Company or any of its Subsidiaries or Affiliates
qualify as an Eligible Assignee.

 

“EMU” shall mean
Economic and Monetary Union as contemplated in the Treaty on European Union.

 

“EMU Legislation”
shall mean legislative measures of the European Council (including without
limitation European Council regulations) for the introduction of, changeover to
or operation of a single or unified European currency (whether known as the
Euro or otherwise), being in part the implementation of the third stage of EMU.

 

“Environmental Claims”
shall mean any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, allegations, notices of noncompliance
or

 

11

 

violation, investigations by a Governmental Authority, or proceedings
(including, without limitation, administrative, regulatory and judicial
proceedings) relating in any way to any Hazardous Substance, any actual or
alleged violation of or liability under any Environmental Law or any permit
issued, or any approval given, under any Environmental Law (collectively, “Claims”),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and
(ii) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from any Hazardous Substance or arising from alleged injury or threat of injury
to human health or the environment.

 

“Environmental Laws”
shall mean any and all federal, state and local laws, statutes, ordinances,
rules, regulations, permits, licenses, approvals, rules of common law and
orders of courts or Governmental Authorities, relating to the protection of
human health, occupational safety with respect to exposure to Hazardous
Substances, or the environment, now or hereafter in effect, and in each case as
amended from time to time, including, without limitation, requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Substances.

 

“Equity Issuance”
shall mean the issuance, sale or other disposition by any Credit Party of its
Capital Stock, any rights, warrants or options to purchase or acquire any
shares of its Capital Stock or any other security or instrument representing,
convertible into or exchangeable for an equity interest in any Credit Party; provided,
however, that the term Equity Issuance shall not include (i) the
issuance or sale of Capital Stock by any of the Subsidiaries of the Company to
the Company or any other Subsidiary of the Company, or by the Company to the
Parent, if such Capital Stock (excluding the portion of any Foreign Subsidiary’s
Capital Stock not required to be pledged hereunder) is pledged to the
Administrative Agent pursuant to the Pledge Agreement, (ii) any Capital
Stock of the Parent issued or sold in connection with any Permitted Acquisition
and constituting all or a portion of the applicable purchase price,
(iii) the issuance of any Capital Stock of the Parent, the Net Cash
Proceeds of which are used in whole to fund Permitted Acquisitions or Capital
Expenditures, or (iv) the issuance of any Capital Stock of the Parent, any
rights or options for the Parent’s Capital Stock, and the underlying shares
issued upon the exercise thereof, in each case issued, sold or granted to
directors and employees of the Credit Parties pursuant to employee benefit
plans, employment agreements or other employment arrangements approved by the
Board of Directors of the Parent.

 

“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as amended from time to
time, and any successor statute, and all rules and regulations from time to
time promulgated thereunder.

 

“ERISA Affiliate”
shall mean any Person (including any trade or business, whether or not
incorporated) deemed to be under “common control” with, or a member of
the same “controlled group” as, the Company or any of its Subsidiaries,
within the meaning of Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code or Section 4001 of ERISA.

 

12

 

“ERISA Event”
shall mean any of the following with respect to a Plan or Multiemployer Plan,
as applicable:  (i) a Reportable
Event, (ii) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by the Company or any ERISA Affiliate
of notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate
or has terminated under Section 4041A of ERISA, (iii) the
distribution by the Company or any ERISA Affiliate under Section 4041 of
ERISA of a notice of intent to terminate any Plan or the taking of any action
to terminate any Plan, (iv) the commencement of proceedings by the PBGC
under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan, or the receipt by the Company or any ERISA
Affiliate of a notice from any Multiemployer Plan that such action has been
taken by the PBGC with respect to such Multiemployer Plan, (v) the
institution of a proceeding by any fiduciary of any Multiemployer Plan against
the Company or any ERISA Affiliate to enforce Section 515 of ERISA, which
is not dismissed within thirty (30) days, (vi) the imposition upon the
Company or any ERISA Affiliate of any liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of ERISA,
or the imposition or threatened imposition of any Lien upon any assets of the
Company or any ERISA Affiliate as a result of any alleged failure to comply with
the Internal Revenue Code or ERISA in respect of any Plan, (vii) the
engaging in or otherwise becoming liable for a nonexempt Prohibited Transaction
by the Company or any ERISA Affiliate, or a violation of the applicable
requirements of Section 404 or 405 of ERISA or the exclusive benefit rule
under Section 401(a) of the Internal Revenue Code by any fiduciary of any
Plan for which the Company or any of its ERISA Affiliates may be directly or
indirectly liable, in each case under this clause (vii) which has resulted
or could reasonably be expected to result in liability of the Company and its
ERISA Affiliates in excess of $250,000, (viii) the occurrence with respect
to any Plan of any “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA and Section 412 of the Internal Revenue Code),
whether or not waived, or (ix) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Internal Revenue Code or
Section 307 of ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Company or an ERISA Affiliate fails
to timely provide security to such Plan in accordance with the provisions of
such sections.

 

“Euro” shall mean
the single currency of the European Union as constituted by the Treaty on
European Union and as referred to in the legislative measures of the European
Union for the introduction of, changeover to or operation of the Euro in one or
more member states.

 

“Euro Unit” shall
mean the currency unit of the Euro.

 

“Event of Default”
shall have the meaning given to such term in Section 9.1.

 

“Excess Cash Flow”
shall mean, for any fiscal year of the Parent, (a) the sum of
(i) Consolidated EBITDA for such fiscal year (determined by adding back
thereto, but without duplication, any amounts deducted in the calculation of
Consolidated EBITDA for such fiscal year that were paid, incurred or accrued in
violation of any of the provisions of this Agreement), (ii) an amount
equal to any decrease in Consolidated Working Capital from the first day to the
last day of such fiscal year and (iii) to the extent included in the
calculation of Consolidated EBITDA, the amount of any cash or noncash loss
recognized and included in the Net Cash

 

13

 

Proceeds of an Asset Disposition which has been applied as a prepayment
of the Loans pursuant to Section 2.6(f),
minus (b) the sum (without duplication) of
(i) Consolidated Interest Expense in respect of Indebtedness permitted
hereunder to the extent paid in cash during such fiscal year,
(ii) aggregate taxes of the Parent and its Subsidiaries to the extent paid
in cash during such fiscal year, (iii) except to the extent financed with
proceeds from the issuance of Indebtedness or equity securities, Capital Expenditures
to the extent permitted hereunder and to the extent paid in cash during such
fiscal year, (iv) scheduled payments of principal on the Term Loans made
during such fiscal year, (v) optional prepayments on the Term Loans made
during such fiscal year, (vi) optional prepayments on the Revolving Loans
made during such fiscal year that are accompanied by a corresponding permanent
reduction in the Revolving Credit Commitments, (vii) scheduled or
mandatory principal payments on Funded Debt (other than the Loans and
Reimbursement Obligations) made during such fiscal year to the extent permitted
under this Agreement (other than in respect of any revolving credit facility to
the extent not accompanied by a corresponding permanent reduction in the
commitments thereunder), (viii) except to the extent financed with
proceeds from the issuance of Indebtedness or equity securities, the amount of
any cash consideration paid during such fiscal year pursuant to Permitted
Acquisitions, (ix) to the extent included in the calculation of
Consolidated EBITDA, the amount of any cash or noncash gain recognized and
included in the Net Cash Proceeds of an Asset Disposition which has been
applied as a prepayment of the Loans pursuant to Section 2.6(f) and (x) an amount equal to any
increase in Consolidated Working Capital from the first day to the last day of
such fiscal year.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended from time to time,
and any successor statute, and all rules and regulations from time to time
promulgated thereunder.

 

“Excluded Asset
Disposition” shall mean (i) any Asset Disposition permitted under Sections 8.4(i), 8.4(ii), 8.4(iii)
and 8.4(iv) and (ii) any
other Asset Disposition the Net Cash Proceeds from which do not exceed $250,000
in any single fiscal year.

 

“Existing Credit
Agreement” shall have the meaning given to such term in the recitals
hereto.

 

“Existing Letters of
Credit” means, collectively, the letters of credit identified on Schedule 3.1 and outstanding on the
Closing Date.

 

“Federal Funds Rate”
shall mean, for any period, a fluctuating per annum interest rate (rounded
upwards, if necessary, to the nearest 1/100 of one percentage point) equal for
each day during such period to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received
by the Administrative Agent from three federal funds brokers of recognized
standing selected by the Administrative Agent.

 

14

 

“Federal Reserve Board”
shall mean the Board of Governors of the Federal Reserve System or any
successor thereto.

 

“Fee Letter” shall
mean the letter from the Administrative Agent and the Arranger to the Company,
dated March 25, 2005, relating to certain fees payable by the Company in
respect of the transactions contemplated by this Agreement, as amended,
modified, restated or supplemented from time to time.

 

“Financial Condition
Certificate” shall mean a fully completed and duly executed certificate, in
substantially the form of Exhibit H,
together with the attachments thereto.

 

“Financial Officer”
shall mean, with respect to the Parent, the chief financial officer, vice
president - finance, principal accounting officer or treasurer of the Parent.

 

“First-Tier Foreign
Subsidiary” shall mean any Foreign Subsidiary that is not a direct
Subsidiary of a Foreign Subsidiary.

 

“fiscal quarter”
or “FQ” shall mean a fiscal quarter of the Parent and its Subsidiaries.

 

“fiscal year” or “FY”
shall mean a fiscal year of the Parent and its Subsidiaries.

 

“Fixed Charge Coverage
Ratio” shall mean, as of the last day of any Reference Period ending on the
last day of a fiscal quarter, the ratio of (i) Consolidated EBITDA for
such Reference Period to (ii) Consolidated Fixed Charges for such
Reference Period.

 

“Foreign Borrower”
shall have the meaning given to such term in the introductory paragraph hereof.

 

“Foreign Currency”
shall mean each of Pounds Sterling and Euros.

 

“Foreign Currency
Equivalent” shall mean, with respect to any amount denominated in Dollars,
the equivalent amount thereof in the applicable Foreign Currency as determined
by the Administrative Agent at such time on the basis of the Spot Rate
(determined in respect of the most recent Revaluation Date) for the purchase of
such Foreign Currency with Dollars.

 

“Foreign Currency
Revolving Loan” shall have the meaning given to such term in Section 2.1(c).

 

“Foreign Currency
Subcommitment” shall mean $25,000,000 or, if less, the aggregate Revolving
Credit Commitments at the time of determination, as such amount may be reduced
at or prior to such time pursuant to the terms hereof.

 

“Foreign Obligations”
shall mean all principal of and interest (including, to the greatest extent
permitted by law, post-petition interest) on the Foreign Currency Revolving
Loans and all fees, expenses, indemnities and other obligations owing, due or
payable at any time by any Foreign Borrower to the Administrative Agent, any
Lender or any other Person entitled thereto under this Agreement or any of the
other Credit Documents.

 

15

 

“Foreign Subsidiary”
shall mean a Subsidiary of the Company that is a “controlled foreign
corporation,” as such term is defined in Section 957 of the Internal
Revenue Code.

 

“Fund” shall mean
any Person (other than a natural person) that is or will be engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

 

“Funded Debt”
shall mean, with respect to any Person, all Indebtedness of such Person (other
than Indebtedness of the types referred to in clauses (iii) (but only to
the extent letters of credit and bankers’ acceptances are not drawn upon), (ix)
and (x) of the definition of “Indebtedness”) and all Guaranty
Obligations with respect to Funded Debt of other Persons.

 

“GAAP” shall mean
generally accepted accounting principles in the United States of America, as
set forth in the statements, opinions and pronouncements of the Accounting
Principles Board, the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board, consistently applied and maintained,
as in effect from time to time (subject to the provisions of Section 1.2).

 

“German Collateral
Agreement” shall mean any of (i) the share pledge agreement referred
to in Section 6.15(b) and
(ii) any and all other pledge agreements, security transfer agreements,
assignment agreements and similar agreements or instruments pursuant to which a
pledge of or security interest in any shares, rights, property or assets of any
German Subsidiary of the Company is granted in favor of the Administrative
Agent pursuant to German law as security for all or a portion of the
Obligations, in each case as amended, modified, restated or supplemented from
time to time.

 

“Governmental
Authority” shall mean any nation or government, any state or other
political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or Controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

 

“Guarantors” shall
mean, collectively, the Parent, the Company and the Subsidiary Guarantors.

 

“Guaranty Agreement”
shall mean a guaranty agreement made by the Guarantors in favor of the
Administrative Agent and the Lenders, in substantially the form of Exhibit G, as amended, modified,
restated or supplemented from time to time.

 

“Guaranty Obligation”
shall mean, with respect to any Person, any direct or indirect liability of
such Person with respect to any Indebtedness, liability or other obligation
(the “primary obligation”) of another Person (the “primary obligor”),
whether or not contingent, (i) to purchase, repurchase or otherwise
acquire such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or provide funds (x) for the
payment or discharge of any such primary obligation or (y) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor (including, without limitation,,
keep well agreements, maintenance agreements, comfort letters or similar
agreements or

 

16

 

arrangements), (iii) to lease or purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor in respect thereof to make
payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss or failure or
inability to perform in respect thereof; provided, however, that,
with respect to the Parent and its Subsidiaries, the term Guaranty Obligation
shall not include endorsements for collection or deposit in the ordinary course
of business.  The amount of any Guaranty
Obligation of any guaranteeing Person hereunder shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made and
(b) the maximum amount for which such guaranteeing Person may be liable
pursuant to the terms of the instrument embodying such Guaranty Obligation,
unless such primary obligation and the maximum amount for which such
guaranteeing Person may be liable are not stated or determinable, in which case
the amount of such Guaranty Obligation shall be such guaranteeing Person’s
maximum reasonably anticipated liability in respect thereof as determined by
such guaranteeing Person in good faith.

 

“Hazardous Substance”
shall mean any substance or material meeting any one or more of the following
criteria:  (i) it is or contains a
substance designated as a hazardous waste, hazardous substance, hazardous
material, pollutant, contaminant or toxic substance under any Environmental
Law, (ii) it is toxic, explosive, corrosive, ignitable, infectious,
radioactive, mutagenic or otherwise hazardous to human health or the
environment and are or become regulated by any Governmental Authority,
(iii) its presence may require investigation or response under any
Environmental Law, (iv) it constitutes a nuisance, trespass or health or
safety hazard to Persons or neighboring properties, or (v) it is or
contains, without limiting the foregoing, asbestos, polychlorinated biphenyls,
urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

 

“Hedge Agreement” shall
mean any interest or foreign currency rate swap, cap, collar, option, hedge,
forward rate or other similar agreement or arrangement designed to protect
against fluctuations in interest rates or currency exchange rates.

 

“Incremental Term
Lender” shall mean any Lender having an Incremental Term Loan Commitment
with respect to any Series of Incremental Term Loans (or, after the Incremental
Term Loan Commitments with respect to such Series have terminated, any Lender
holding outstanding Incremental Term Loans of such Series).

 

“Incremental Term Loan”
shall have the meaning given to such term in Section 2.21(a).

 

“Incremental Term Loan
Amendment” shall have the meaning given to such term in Section 2.21(c).

 

“Incremental Term Loan
Commitment” shall mean, with respect to any Lender at any time, the
commitment of such Lender to make Incremental Term Loans of a particular Series
in an aggregate principal amount at any time outstanding up to the amount set
forth in the applicable Incremental Term Loan Amendment or, if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender at such time in the Register 

 

17

 

maintained by the Administrative Agent pursuant to Section 11.7(b) as such Lender’s “Incremental
Term Loan Commitment” with respect to such Series, in either case, as such
amount may be reduced at or prior to such time pursuant to the terms hereof.

 

“Incremental Term Loan
Effective Date” shall have the meaning given to such term in Section 2.21(c).

 

“Incremental Term Loan
Maturity Date” shall mean, with respect to any Series of Incremental Term
Loans, the final maturity date thereof as set forth in the applicable
Incremental Term Loan Amendment.

 

“Indebtedness” shall
mean, with respect to any Person (without duplication), (i) all
obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, or
upon which interest payments are customarily made, (iii) the maximum
stated or face amount of all letters of credit and bankers’ acceptances issued
or created for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (iv) all obligations of
such Person to pay the deferred purchase price of property or services
(excluding trade payables incurred in the ordinary course of business and not
more than 90 days past due, provided that up to $500,000 of trade
payables of the Company and its Subsidiaries that are more than 90 days past
due may be excluded from “Indebtedness” hereunder), including any
Contingent Purchase Price GAAP Amounts, (v) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, (vi) all Capital Lease
Obligations of such Person, (vii) all Disqualified Capital Stock issued by
such Person, with the amount of Indebtedness represented by such Disqualified
Capital Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any (for purposes hereof, the “maximum fixed
repurchase price” of any Disqualified Capital Stock that does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant
to this Agreement, and if such price is based upon, or measured by, the fair
market value of such Disqualified Capital Stock, such fair market value shall
be determined reasonably and in good faith by the board of directors or other
governing body of the issuer of such Disqualified Capital Stock),
(viii) the principal balance outstanding and owing by such Person under
any synthetic lease, tax retention operating lease or similar off-balance sheet
financing product, (ix) all Guaranty Obligations of such Person with respect
to Indebtedness of another Person, (x) the net termination obligations of
such Person under any Hedge Agreements, calculated as of any date as if such
agreement or arrangement were terminated as of such date, and (xi) all
indebtedness of the types referred to in clauses (i) through (x) above
(A) of any partnership or unincorporated joint venture in which such
Person is a general partner or joint venturer to the extent such Person is
liable therefor or (B) secured by any Lien on any property or asset owned
or held by such Person regardless of whether or not the indebtedness secured
thereby shall have been incurred or assumed by such Person or is nonrecourse to
the credit of such Person, the amount thereof being equal to the value of the
property or assets subject to such Lien.

 

18

 

“Intellectual Property”
shall mean (i) all inventions (whether or not patentable and whether or
not reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissues,
continuations, continuations-in-part, divisions, revisions, extensions, and
reexaminations thereof, (ii) all trademarks, service marks, trade dress,
logos, trade names, and corporate names, together with all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (iii) all copyrightable works and all copyrights (registered
and unregistered), (iv) all trade secrets and confidential information
(including, without limitation, financial, business and marketing plans and
customer and supplier lists and related information), (v) all computer
software and software systems (including, without limitation, data, databases
and related documentation), (vi) all Internet web sites and domain names,
(vii) all technology, know-how, processes and other proprietary rights,
and (viii) all licenses or other agreements to or from third parties
regarding any of the foregoing.

 

“Interest Period”
shall have the meaning given to such term in Section 2.10.

 

“Internal Revenue Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
any successor statute, and all rules and regulations from time to time
promulgated thereunder.

 

“Investments”
shall have the meaning given to such term in Section 8.5.

 

“Investor” shall
mean J.P. Morgan DJ Partners, LLC, a Delaware limited liability company.

 

“Issuing Lender”
shall mean Wachovia in its capacity as issuer of the Letters of Credit, and its
successors in such capacity.

 

“Joinder Agreement”
shall mean a Joinder Agreement in substantially the form of Exhibit I and delivered by a Foreign
Borrower in accordance with the provisions of Section 11.18.

 

“Lender” shall
mean each Person signatory hereto as a “Lender” and each other bank or other
institution that becomes a “Lender” hereunder pursuant to Section 11.7, and their respective
successors and assigns.

 

“Lending Office”
shall mean, with respect to any Lender, the office of such Lender designated as
its “Lending Office” on Schedule 1.1
or in connection with an Assignment and Acceptance, or such other office as may
be otherwise designated in writing from time to time by such Lender to the
Company and the Administrative Agent.  A
Lender may designate separate Lending Offices as provided in the foregoing
sentence for the purposes of making or maintaining different Types of Loans,
and, with respect to LIBOR Loans, such office may be a domestic or foreign
branch or Affiliate of such Lender.

 

“Letter of Credit
Exposure” shall mean, with respect to any Revolving Credit Lender at any
time, such Lender’s ratable share (based on the proportion that its Revolving
Credit Commitment bears to the aggregate Revolving Credit Commitments at such
time) of the sum of

 

19

 

(i) the aggregate Stated Amount of all Letters of Credit
outstanding at such time and (ii) the aggregate amount of all
Reimbursement Obligations outstanding at such time.

 

“Letter of Credit
Maturity Date” shall mean the seventh (7th) day prior to the
Revolving Credit Maturity Date.

 

“Letter of Credit
Notice” shall have the meaning given to such term in Section 3.2.

 

“Letter of Credit
Subcommitment” shall mean $10,000,000 or, if less, the aggregate Revolving
Credit Commitments at the time of determination, as such amount may be reduced
at or prior to such time pursuant to the terms hereof.

 

“Letters of Credit”
shall have the meaning given to such term in Section 3.1.

 

“LIBOR Loan” shall
mean, at any time, any Loan that bears interest at such time at the applicable
Adjusted LIBOR Rate.

 

“LIBOR Rate” shall
mean, with respect to each LIBOR Loan comprising part of the same Borrowing for
any Interest Period, an interest rate per annum obtained by dividing
(i) (y) the rate of interest (rounded upward, if necessary, to the
nearest 1/16 of one percentage point) appearing on, in the case of Dollars,
Telerate Page 3750 (or any successor page) and, in the case of a Foreign
Currency, the appropriate Telerate page displaying British Bankers Association
Settlement Rates for deposits in such Foreign Currency (or, in each case, any
successor page or service displaying such rates), or (z) if no such rate
is available, the rate of interest determined by the Administrative Agent to be
the rate or the arithmetic mean of rates (rounded upward, if necessary, to the
nearest 1/16 of one percentage point) at which deposits in Dollars or the
applicable Foreign Currency, as the case may be, in immediately available funds
are offered to first-tier banks in the interbank market where its Eurodollar
and foreign currency and exchange operations in respect of its LIBOR Loans are
then being conducted, in each case under (y) and (z) above at approximately
11:00 a.m., London time, two (2) Business Days prior to the first day of such
Interest Period for a period substantially equal to such Interest Period and in
an amount substantially equal to the amount of Wachovia’s LIBOR Loan comprising
part of such Borrowing, by (ii) the amount equal to 1.00 minus the Reserve
Requirement (expressed as a decimal) for such Interest Period.

 

“Lien” shall mean
any mortgage, pledge, hypothecation, assignment, security interest, lien
(statutory or otherwise), charge or other encumbrance of any nature, whether
voluntary or involuntary, including, without limitation, the interest of any
vendor or lessor under any conditional sale agreement, title retention
agreement, Capital Lease or any other lease or arrangement having substantially
the same effect as any of the foregoing.

 

“Loans” shall mean
any or all of the Term Loans, the Revolving Loans and the Swingline Loans.

 

“Local Time” shall
mean the local time in effect at the applicable Payment Office.

 

“Margin Stock”
shall have the meaning given to such term in Regulation U.

 

20

 

“Material Adverse
Effect” shall mean a material adverse effect upon (A) the condition
(financial or otherwise), operations, business, properties or prospects of the
Parent and its Subsidiaries, taken as a whole, (B) the ability of any
Material Credit Party to perform its obligations under this Agreement or any of
the other Credit Documents to which it is a party or (C) the legality,
validity or enforceability of this Agreement or any of the other Credit
Documents or the rights and remedies of the Administrative Agent and the
Lenders hereunder and thereunder.

 

“Material Contract”
shall have the meaning given to such term in Section 5.19.

 

“Material Credit Party”
shall mean the Parent, the Company, and any Subsidiary which constitutes at
least 5% (10% for any Foreign Subsidiary) of the consolidated revenues or net
income, or the total assets, of the Parent and its Subsidiaries taken as a
whole, as of the end of and for the period of four consecutive fiscal quarters
most recently ended prior to the date of determination.

 

“Material Foreign
Subsidiary” shall mean any Foreign Subsidiary which constitutes at least 5%
of the consolidated revenues or net income, or the total assets, of the Parent
and its Subsidiaries taken as a whole, as of the end of and for the period of
four consecutive fiscal quarters most recently ended prior to the date of
determination.

 

“Mortgage” shall
mean any mortgage, deed of trust, deed to secure debt, collateral assignment of
lease or similar agreement or instrument pursuant to which any Credit Party
grants in favor of the Administrative Agent, for its benefit and the benefit of
the Lenders, a security interest in and Lien upon any fee or leasehold interest
in real property owned by it, as amended, modified, restated or supplemented
from time to time.

 

“Multiemployer Plan”
shall mean any “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate
makes, is making or is obligated to make contributions.

 

“National Currency
Unit” shall mean a fraction or multiple of one Euro Unit expressed in units
of the former national currency of a Participating Member State.

 

“Net Cash Proceeds”
shall mean, in the case of any Equity Issuance, Debt Issuance, Casualty Event
or Asset Disposition, the aggregate cash proceeds received by any Credit Party
in respect thereof (including, in the case of a Casualty Event, insurance
proceeds and condemnation awards), less (A) reasonable fees and
out-of-pocket expenses payable by the Parent or any of its Subsidiaries in
connection therewith, (B) taxes paid or payable as a result thereof,
(C) in the case of a Casualty Event or an Asset Disposition, the amount
required to retire Indebtedness to the extent such Indebtedness is secured by
Liens on the subject property or is otherwise subject to mandatory prepayment,
(D) in the case of an Asset Disposition, the amount of any reserves
reasonably established in accordance with GAAP in respect of warranty or
indemnification obligations relating to the assets sold, and (E) in the
case of an Asset Disposition, the amount of any liabilities directly relating
to the assets sold that are not assumed by the purchaser thereof; it being
understood that the term “Net Cash Proceeds” shall include, as and when
received, any

 

21

 

cash received upon the sale or other disposition of any non-cash
consideration received by any Credit Party in respect of any of the foregoing
events.

 

“Non-U.S. Lender”
shall have the meaning given to such term in Section 2.17(d).

 

“Notes” shall mean
any or all of the Term Notes, the Revolving Notes and the Swingline Note.

 

“Notice of Borrowing”
shall have the meaning given to such term in Section 2.2(b).

 

“Notice of
Conversion/Continuation” shall have the meaning given to such term in Section 2.11(b).

 

“Notice of Swingline
Borrowing” shall have the meaning given to such term in Section 2.2(d).

 

“Obligations”
shall mean all principal of and interest (including, to the greatest extent
permitted by law, post-petition interest) on the Loans and Reimbursement
Obligations and all fees, expenses, indemnities and other obligations owing,
due or payable at any time by the Parent, the Company, any other Borrower or
any Subsidiary Guarantor to the Administrative Agent, any Lender, the Swingline
Lender, the Issuing Lender or any other Person entitled thereto, under this
Agreement or any of the other Credit Documents, and all payment and other
obligations owing or payable at any time by any Credit Party under or in
connection with any Hedge Agreement (which Hedge Agreement is required or
permitted by this Agreement) to any Person that is a Lender or an Affiliate of
a Lender at the time such Hedge Agreement is entered into, in each case whether
direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, and whether
existing by contract, operation of law or otherwise.

 

“OFAC” means the
U.S. Department of the Treasury’s Office of Foreign Assets Control, and any
successor thereto.

 

“Parent” shall
have the meaning given to such term in the introductory paragraph hereof.

 

“Participant”
shall have the meaning given to such term in Section 11.7(d).

 

“Participating Member
State” shall mean each country so described in any EMU Legislation.

 

“PATRIOT Act”
shall mean the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001), as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.

 

“Payment Office”
shall mean, with respect to the Administrative Agent, (i) for all purposes
other than as specified in clause (ii) below, the office of the
Administrative Agent designated as its “Payment Office for Dollar Loans”
on Schedule 1.1, and
(ii) in the case of Foreign Currency Revolving Loans, the office of the
Correspondent; or in each case, such other

 

22

 

office as the Administrative Agent may designate to the Lenders and the
Borrowers for such purpose from time to time.

 

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

 

“Permitted Acquisition”
shall mean (A) any Acquisition to which the Required Lenders (or the
Administrative Agent on their behalf) shall have given their prior written
consent (which consent may be in their sole discretion and may be given subject
to such additional terms and conditions as the Required Lenders shall
establish) and with respect to which all of the conditions and requirements set
forth in this definition and in Sections 6.9and
6.10, and in or pursuant to any
such consent, have been satisfied or waived in writing by the Required Lenders
(or the Administrative Agent on their behalf), or (B) any other
Acquisition with respect to which all of the following conditions are
satisfied:

 

(i)            each business acquired shall be
within the permitted lines of business described in Section 8.8;

 

(ii)           any Capital Stock given as
consideration in connection therewith shall be Capital Stock of the Parent;

 

(iii)          in the case of an Acquisition
involving the acquisition of control of Capital Stock of any Person, immediately
after giving effect to such Acquisition such Person (or the surviving Person,
if the Acquisition is effected through a merger or consolidation) shall be a
Subsidiary of the Company;

 

(iv)          the Person to be acquired (or its
board of directors or equivalent governing body) has not (y) announced it
will oppose such Acquisition or (z) commenced any action which alleges
that such Acquisition violates, or will violate, any Requirement of Law;

 

(v)           no Default or Event of Default shall
have occurred and be continuing at the time of the consummation of such
Permitted Acquisition or would exist immediately after giving effect thereto;

 

(vi)          so long as the Acquisition Amount with
respect thereto is greater than $10,000,000, the Person or business acquired
shall have a positive EBITDA, determined on a pro forma basis for the period of
twelve fiscal months most recently ended as if such Permitted Acquisition had
been consummated on the first day of such period and calculated in the same
manner as Consolidated EBITDA is calculated for the Company and its
Subsidiaries (which determination by the Company, together with supporting
financial statements of the acquired Person or business and a schedule of
adjustments, shall be delivered to the Lenders);

 

(vii)         after giving effect to such Permitted
Acquisition, the Company shall be in compliance with the financial covenants
contained in Article VII,
such compliance determined with regard to calculations made on a pro forma
basis for the Reference Period most recently ended, calculated in accordance
with GAAP as if each acquired

 

23

 

Person or business
had been consolidated with the Company for those periods applicable to such
covenants;

 

(viii)        the Acquisition Amount with respect thereto
(y) shall not exceed $50,000,000, and (z) together with the aggregate
of the Acquisition Amounts for all other Permitted Acquisitions consummated
during the term of this Agreement, shall not exceed $75,000,000 (including for
this purpose, without duplication, all Contingent Purchase Price Obligations
incurred by the Company or its Subsidiaries in connection with previous
Permitted Acquisitions which have been paid during such fiscal year and any
Contingent Purchase Price Reserve Amounts then outstanding); provided
that Capital Stock of the Parent shall not be included in the calculation of
the Acquisition Amount for purposes of this clause (viii);

 

(ix)           the Acquisition Amount for any
Permitted Acquisition involving assets situated outside of the United States of
America or the Capital Stock of Persons organized outside the United States of
America, together with the aggregate of the Acquisition Amounts for all such
other Permitted Acquisitions consummated during the term of this Agreement,
shall not exceed $25,000,000; provided that Capital Stock of the Parent
shall not be included in the calculation of the Acquisition Amount for purposes
of this clause (ix); and provided  further that the
Acquisition Amount with respect to that certain proposed foreign Acquisition
previously communicated to the Administrative Agent, if such Acquisition
otherwise qualifies as a Permitted Acquisition, shall not be included in the
determination of compliance with clauses (viii) and (ix); and

 

(x)            all of the conditions and requirements
of Sections 6.9 and 6.10 applicable to such Acquisition are
satisfied.

 

“Permitted Liens”
shall have the meaning given to such term in Section 8.3.

 

“Person” shall
mean any corporation, association, joint venture, partnership, limited
liability company, organization, business, individual, trust, government or
agency or political subdivision thereof or any other legal entity.

 

“Plan” shall mean
any “employee pension benefit plan” within the meaning of Section 3(2) of
ERISA that is subject to the provisions of Title IV of ERISA (other than a
Multiemployer Plan) and to which the Company or any ERISA Affiliate may have
any liability.

 

“Pledge Agreement”
shall mean a pledge agreement made by the Parent, the Company and the
Subsidiaries of the Company party thereto in favor of the Administrative Agent,
in substantially the form of Exhibit F,
as amended, modified, restated or supplemented from time to time.

 

“Pounds Sterling”
or “£” shall mean the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.

 

“Prohibited
Transaction” shall mean any transaction described in
(i) Section 406 of ERISA that is not exempt by reason of
Section 408 of ERISA or by reason of a Department of Labor prohibited
transaction individual or class exemption or (ii) Section 4975(c) of
the Internal

 

24

 

Revenue Code that is not exempt by reason of Section 4975(c)(2) or
4975(d) of the Internal Revenue Code.

 

“Projections”
shall have the meaning given to such term in Section 5.11(b).

 

“Realty” shall
mean all real property and interests in real property now or hereafter acquired
or leased by any Credit Party.

 

“Reference Period”
with respect to any date of determination, shall mean (except as may be
otherwise expressly provided herein) the period of twelve consecutive fiscal
months of the Parent immediately preceding such date or, if such date is the
last day of a fiscal quarter, the period of four consecutive fiscal quarters
ending on such date.

 

“Refunded Swingline Loans”
shall have the meaning given to such term in Section 2.2(e).

 

“Register” shall
have the meaning given to such term in Section 11.7(b).

 

“Regulations D, T, U
and X” shall mean Regulations D, T, U and X, respectively, of the Federal
Reserve Board, and any successor regulations.

 

“Reimbursement
Obligation” shall have the meaning given to such term in Section 3.4.

 

“Relevant Type”
shall have the meaning given to such term in Section 2.16(c).

 

“Reportable Event”
shall mean, with respect to any Plan, (i) any “reportable event”
within the meaning of Section 4043(c) of ERISA for which the 30-day notice
under Section 4043(a) of ERISA has not been waived by the PBGC (including,
without limitation, any failure to meet the minimum funding standard of, or
timely make any required installment under, Section 412 of the Internal
Revenue Code or Section 302 of ERISA, regardless of the issuance of any
waivers in accordance with Section 412(d) of the Internal Revenue Code),
(ii) any such “reportable event” subject to advance notice to the
PBGC under Section 4043(b)(3) of ERISA, (iii) any application for a
funding waiver or an extension of any amortization period pursuant to
Section 412 of the Internal Revenue Code, and (iv) a cessation of
operations described in Section 4062(e) of ERISA.

 

“Required Lenders”
shall mean, at any time, the Lenders holding outstanding Loans (excluding
Swingline Loans) and unutilized Commitments (or, after the termination of the
Revolving Credit Commitments, outstanding Loans, Letter of Credit Exposure and
participations in outstanding Swingline Loans) representing at least a majority
of the aggregate, at such time, of all outstanding Loans (excluding Swingline
Loans) and unutilized Commitments (or, after the termination of the Revolving
Credit Commitments, the aggregate at such time of all outstanding Loans, Letter
of Credit Exposure and participations in outstanding Swingline Loans).  For purposes of this definition, the
aggregate amount of outstanding Foreign Currency Revolving Loans and the aggregate
Stated Amount of outstanding Letters of Credit denominated in Foreign
Currencies shall be the Dollar Amount thereof determined as of the most recent
Revaluation Date.

 

25

 

“Required Revolving
Credit Lenders” shall mean, at any time, the Revolving Credit Lenders
holding outstanding Revolving Loans and Unutilized Revolving Credit Commitments
(or, after the termination of the Revolving Credit Commitments, outstanding
Revolving Loans, Letter of Credit Exposure and participations in outstanding
Swingline Loans) representing at least a majority of the aggregate, at such
time, of all outstanding Revolving Loans and Unutilized Revolving Credit
Commitments (or, after the termination of the Revolving Credit Commitments, the
aggregate at such time of all outstanding Revolving Loans, Letter of Credit
Exposure and participations in outstanding Swingline Loans).  For purposes of this definition, the
aggregate amount of outstanding Foreign Currency Revolving Loans and the
aggregate Stated Amount of outstanding Letters of Credit denominated in Foreign
Currencies shall be the Dollar Amount thereof determined as of the most recent
Revaluation Date.

 

“Requirement of Law”
shall mean, with respect to any Person, the charter, articles or certificate of
organization or incorporation and bylaws or other organizational or governing
documents of such Person, and any statute, law, treaty, rule, regulation,
order, decree, writ, injunction or determination of any arbitrator or 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 or otherwise pertaining to any or all of the transactions contemplated
by this Agreement and the other Credit Documents.

 

“Reserve Requirement”
shall mean, with respect to any Interest Period, the reserve percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) in effect from time to time during such Interest Period, as
provided by the Federal Reserve Board, applied for determining the maximum
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to Wachovia under Regulation D with
respect to “Eurocurrency liabilities” within the meaning of Regulation
D, or under any similar or successor regulation with respect to Eurocurrency
liabilities or Eurocurrency funding.

 

“Responsible Officer”
shall mean, with respect to any Credit Party, the president, the chief
executive officer, the chief financial officer, any executive officer, or any
other Financial Officer of such Credit Party, and any other officer or similar
official thereof responsible for the administration of the obligations of such
Credit Party in respect of this Agreement or any other Credit Document.

 

“Revaluation Date”
shall mean each of the following: (i) each date on which a Foreign
Currency Revolving Loan is initially made or a Letter of Credit denominated in
a Foreign Currency is issued, (ii) each date on which a Foreign Currency
Revolving Loan is continued for an additional Interest Period pursuant to Section 2.11, (iii) the last
Business Day of each calendar month, (iv) the Revolving Credit Termination
Date, and (v) such additional dates as the Administrative Agent shall
specify.

 

“Revolving Credit
Commitment” shall mean, with respect to any Lender at any time, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to the amount set forth opposite such Lender’s
name on Schedule 1.1 under
the caption “Revolving Credit Commitment” or, if such Lender has entered
into one or more Assignment and Acceptances, the amount set forth for such
Lender at such time in the Register

 

26

 

maintained by the Administrative Agent pursuant to Section 11.7(b) as such Lender’s “Revolving
Credit Commitment,” in either case, as such amount may be increased or
reduced at or prior to such time pursuant to the terms hereof.

 

“Revolving Credit
Commitment Increase” shall have the meaning given to such term in Section 2.20(a).

 

“Revolving Credit
Exposure” shall mean, with respect to any Revolving Credit Lender at any
time, the sum of (i) the aggregate principal Dollar Amount (determined as
of the most recent Revaluation Date) of all Revolving Loans made by such Lender
that are outstanding at such time, (ii) such Lender’s Letter of Credit
Exposure at such time and (iii) such Lender’s Swingline Exposure at such
time.

 

“Revolving Credit
Lender” shall mean any Lender having a Revolving Credit Commitment (or,
after the Revolving Credit Commitments have terminated, any Lender holding
outstanding Revolving Loans).

 

“Revolving Credit
Maturity Date” shall mean the fifth anniversary of the Closing Date.

 

“Revolving Credit
Termination Date” shall mean the Revolving Credit Maturity Date or such
earlier date of termination of the Revolving Credit Commitments pursuant to Section 2.5 or Section 9.2.

 

“Revolving Loans”
shall mean any or all of the Dollar Revolving Loans and the Foreign Currency
Revolving Loans, as the context may require.

 

“Revolving Note”
shall mean, with respect to any Revolving Credit Lender requesting the same,
the promissory note of the Company or other applicable Borrower in favor of
such Revolving Credit Lender evidencing the Revolving Loans made by such Lender
pursuant to Section 2.1(b),
in substantially the form of Exhibit A-2,
together with any amendments, modifications and supplements thereto, substitutions
therefor and restatements thereof.

 

“Sanctioned Country”
shall mean a country subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/-sanctions/index/html, or as otherwise
published from time to time.

 

“Sanctioned Person”
means (i) a Person named on the list of Specially Designated Nationals or
Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/-eotffc/ofac/sdn/index/html, or as otherwise
published from time to time, or (ii) (A) an agency of the government
of a Sanctioned Country, (B) an organization controlled by a Sanctioned
Country, or (C) a Person resident in a Sanctioned Country, to the extent
subject to a sanctions program administered by OFAC.

 

“Secured Party”
shall have the meaning given to such term in the Security Agreement.

 

“Securities Act”
shall mean the Securities Act of 1933, as amended from time to time, and any
successor statute, and all rules and regulations from time to time promulgated
thereunder.

 

27

 

“Security Agreement”
shall mean a security agreement made by the Parent, the Company and the
Subsidiaries of the Company party thereto in favor of the Administrative Agent,
in substantially the form of Exhibit E,
as amended, modified, restated or supplemented from time to time.

 

“Security Documents”
shall mean the Security Agreement, the Pledge Agreement and all other pledge or
security agreements, Mortgages, assignments or other similar agreements or
instruments executed and delivered by any Credit Party pursuant to Section 6.10 or 6.11 or otherwise in connection with the
transactions contemplated hereby, in each case as amended, modified, restated
or supplemented from time to time.

 

“Seller Subordinated
Indebtedness” shall have the meaning given to such term in Section 8.2(viii).

 

“Series” shall
have the meaning given to such term in Section 2.21(a).

 

“Spot Rate” shall
mean, with respect to any Foreign Currency, the rate quoted by Wachovia as the
spot rate for the purchase by Wachovia of such Foreign Currency with Dollars
through its principal foreign exchange trading office at approximately 11:00
a.m. on the date two (2) Business Days prior to the date as of which the
foreign exchange computation is made.

 

“Stated Amount”
shall mean, with respect to any Letter of Credit at any time, the aggregate
Dollar Amount available to be drawn thereunder at such time (regardless of
whether any conditions for drawing could then be met).

 

“Subordinated
Indebtedness” shall mean, collectively, (i) any Seller Subordinated
Indebtedness issued pursuant to Section 8.2(viii)
and (ii) any other unsecured Indebtedness of the Parent and its
Subsidiaries that is expressly subordinated in right of payment and performance
to the Obligations and that is evidenced by a written instrument in form and
substance (including subordination provisions) acceptable to and approved in
writing by the Administrative Agent.

 

“Subsidiary” shall
mean, with respect to any Person, any corporation or other Person of which more
than fifty percent (50%) of the outstanding Capital Stock having ordinary
voting power to elect a majority of the board of directors, board of managers
or other governing body of such Person, is at the time, directly or indirectly,
owned or controlled by such Person and one or more of its other Subsidiaries or
a combination thereof (irrespective of whether, at the time, securities of any
other class or classes of any such corporation or other Person shall or might have
voting power by reason of the happening of any contingency).  When used without reference to a parent
entity, the term “Subsidiary” shall be deemed to refer to a Subsidiary of the
Company.

 

“Subsidiary Guarantor”
shall mean any Subsidiary of the Company that is a guarantor of the Obligations
under the Guaranty Agreement (or under another guaranty agreement in form and
substance satisfactory to the Administrative Agent) and has granted to the
Administrative Agent a Lien upon and security interest in its personal property
assets pursuant to the Security Agreement.

 

28

 

“Swingline Commitment”
shall mean $5,000,000 or, if less, the aggregate Revolving Credit Commitments
at the time of determination, as such amount may be reduced at or prior to such
time pursuant to the terms hereof.

 

“Swingline Exposure”
shall mean, with respect to any Revolving Credit Lender at any time, its
maximum aggregate liability to make Refunded Swingline Loans pursuant to Section 2.2(e) to refund, or to
purchase participations pursuant to Section 2.2(f)
in, Swingline Loans that are outstanding at such time.

 

“Swingline Lender”
shall mean Wachovia in its capacity as maker of Swingline Loans, and its
successors in such capacity.

 

“Swingline Loans”
shall have the meaning given to such term in Section 2.1(d).

 

“Swingline Maturity
Date” shall mean the fifth (5th) Business Day prior to the
Revolving Credit Maturity Date.

 

“Swingline Note”
shall mean, if requested by the Swingline Lender, the promissory note of the
Company in favor of the Swingline Lender evidencing the Swingline Loans made by
the Swingline Lender pursuant to Section 2.1(d),
in substantially the form of Exhibit A-3,
together with any amendments, modifications and supplements thereto,
substitutions therefor and restatements thereof.

 

“Syndication Agents”
shall mean Bank of the West and Wells Fargo Bank, National Association, in
their capacity as such under Section 10.12,
and their respective successors and permitted assigns in such capacity.

 

“TARGET” shall
mean the Trans-European Automated Real-Time Gross Settlement Express Transfer
payment system.

 

“TARGET Day” shall
mean any day on which TARGET is open for the settlement of payments in Euro.

 

“Taxes” shall have
the meaning given to such term in Section 2.17(a).

 

“Term Lender”
shall mean any Tranche A Term Lender or Incremental Term Lender.

 

“Term Loan Commitment”
shall mean any Tranche A Term Loan Commitment and/or any Incremental Term Loan
Commitment.

 

“Term Loans” shall
mean any or all of the Tranche A Term Loans and the Incremental Term Loans, as
the context may require.

 

“Term Note” shall
mean, with respect to any Term Lender requesting the same, the promissory note
of the Company in favor of such Term Lender evidencing the Tranche A Term Loan
or Incremental Term Loan of a particular Series made by such Lender pursuant to
this Agreement, in substantially the form of Exhibit A-1,
together with any amendments, modifications and supplements thereto,
substitutions therefor and restatements thereof.

 

29

 

“Total Leverage Ratio”
shall mean, as of the last day of any Reference Period ending on the last day
of a fiscal quarter, the ratio of (i) Consolidated Total Funded Debt as of
such date to (ii) Consolidated EBITDA for such Reference Period.

 

“Total Voting Power”
shall mean, with respect to any Person, the total number of votes which may be
cast in the election of directors of such Person at any meeting of stockholders
of such Person if all securities entitled to vote in the election of directors
of such Person (on a fully diluted basis, assuming the exercise, conversion or
exchange of all rights, warrants, options and securities exercisable for,
exchangeable for or convertible into, such voting securities) were present and
voted at such meeting (other than votes that may be cast only upon the happening
of a contingency).

 

“Tranche A Term Lender”
shall mean any Lender having a Tranche A Term Loan Commitment (or, after the
Tranche A Term Loan Commitments have terminated, any Lender holding outstanding
Tranche A Term Loans).

 

“Tranche A Term Loan
Commitment” shall mean, with respect to any Lender at any time, the
commitment of such Lender to make Tranche A Term Loans in an aggregate
principal amount up to the amount set forth opposite such Lender’s name on Schedule 1.1 under the caption “Tranche
A Term Loan Commitment” or, if such Lender has entered into one or more
Assignment and Acceptances, the amount set forth for such Lender at such time
in the Register maintained by the Administrative Agent pursuant to Section 11.7(b) as such Lender’s “Tranche
A Term Loan Commitment,” as such amount may be reduced at or prior to such time
pursuant to the terms hereof.

 

“Tranche A Term Loan
Maturity Date” shall mean the fifth anniversary of the Closing Date.

 

“Tranche A Term Loans”
shall have the meaning given to such term in Section 2.1(a).

 

“Treaty on European
Union” means the Treaty of Rome of March 25, 1957, as amended by the Single
European Act 1986 and the Maastricht Treaty (which was signed at Maastricht on
February 1, 1992 and came into force on November 1, 1993), as amended from time
to time.

 

“Type” shall have
the meaning given to such term in Section 1.3.

 

“Unfunded Pension
Liability” shall mean, with respect to any Plan, the excess of its benefit
liabilities under Section 4001(a)(16) of ERISA over the current value of
its assets, determined in accordance with the applicable assumptions used for
funding under Section 412 of the Internal Revenue Code for the applicable
plan year.

 

“Unutilized Revolving
Credit Commitment” shall mean, with respect to any Revolving Credit Lender
at any time, such Lender’s Revolving Credit Commitment at such time less the
sum of (i) the aggregate principal Dollar Amount (determined as of the
most recent Revaluation Date) of all Revolving Loans made by such Lender that
are outstanding at such time, (ii) such Lender’s Letter of Credit Exposure
at such time and (iii) such Lender’s Swingline Exposure at such time.

 

30

 

“Unutilized Swingline
Commitment” shall mean, with respect to the Swingline Lender at any time,
the Swingline Commitment at such time less the aggregate principal
amount of all Swingline Loans that are outstanding at such time.

 

“Wachovia” shall
mean Wachovia Bank, National Association, and its successors and assigns.

 

“Wholly Owned”
shall mean, with respect to any Subsidiary of any Person, that 100% of the
outstanding Capital Stock of such Subsidiary (excluding any directors’
qualifying shares and shares required to be held by foreign nationals, in the
case of a Foreign Subsidiary) is owned, directly or indirectly, by such Person.

 

1.2                                 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 Company delivered to the Lenders prior to the
Closing Date; provided that if the Company notifies the Administrative
Agent that it wishes to amend any financial covenant in Article VII to eliminate the effect of
any change in GAAP on the operation of such covenant (or if the Administrative
Agent notifies the Company that the Required Lenders wish to amend Article VII for such purpose), then
the Company’s compliance with such covenant shall be determined on the basis of
GAAP as 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 Company and the Required Lenders.

 

1.3                                 Types
of Borrowings.  Borrowings and
Loans hereunder are distinguished by “Class,” “Type” and
Applicable Currency.  The “Class”
of a Loan or of a Commitment to make such a Loan or of a Borrowing comprising
such Loans refers to whether such Loan is a Tranche A Term Loan, Incremental
Term Loan of a particular Series, or Revolving Loan, each of which constitutes
a Class.  The “Type” of a Loan
refers to whether such Loan is a Base Rate Loan, Dollar LIBOR Loan, or Foreign
Currency Revolving Loan.  The term “Borrowing”
refers to the portion of the aggregate principal amount of Loans of any Class
outstanding hereunder that bears interest of a specific Type and for a common
Interest Period and that consists of Loans denominated in a common
currency.  Borrowings and Loans may (but
need not) be identified both by Class, Type and/or Applicable Currency (e.g.,
a “Base Rate Dollar Revolving Loan” is a loan that bears interest at the
Base Rate, that is a Revolving Loan and that is denominated in Dollars).

 

1.4                                 Other
Terms; Construction.

 

(a)                                  Unless
otherwise specified or unless the context otherwise requires, all references
herein to sections, annexes, schedules and exhibits are references to sections,
annexes, schedules and exhibits in and to this Agreement, and all terms defined
in this Agreement shall have the defined meanings when used in any other Credit
Document or any certificate or other document made or delivered pursuant
hereto.

 

31

 

(b)                                 All
references herein to the Lenders or any of them shall be deemed to include the
Issuing Lender and the Swingline Lender unless specifically provided otherwise
or unless the context otherwise requires.

 

(c)                                  The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.

 

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

 

1.5                                 Exchange
Rates; Currency Equivalents.

 

(a)                                  The
Administrative Agent shall determine the Spot Rates as of each Revaluation Date
to be used for calculating the Dollar Amounts of Foreign Currency Revolving
Loans and other amounts outstanding under this Agreement denominated in Foreign
Currencies.  Such Spot Rates shall become
effective as of such Revaluation Date and shall be the Spot Rates employed in
converting any amounts between the applicable currencies until the next
Revaluation Date to occur.  Except for
purposes of financial statements delivered by the Company hereunder or
calculating financial covenants in Article VII
or except as otherwise provided herein, the applicable amount of any currency
for purposes of this Agreement and the other Credit Documents shall be such
Dollar Amount as so determined by the Administrative Agent.

 

(b)                                 Wherever
in this Agreement, in connection with any Foreign Currency Revolving Loan (or
Letter of Credit denominated in a Foreign Currency) or any conversion,
continuation or prepayment thereof, an amount, such as a required minimum or
multiple amount, is expressed in Dollars, such amount shall be the relevant
Foreign Currency Equivalent of such Dollar amount (rounded as nearly as
practicable to the nearest number of whole units of such Foreign Currency), as
determined by the Administrative Agent.

 

(c)                                  Determinations
by the Administrative Agent pursuant to this Section shall be conclusive
absent manifest error.

 

1.6                                 Redenomination
of Certain Foreign Currencies and Computation of Dollar Amounts.

 

(a)                                  Each
obligation of a Borrower to make a payment denominated in the National Currency
Unit of any member state of the European Union that adopts the Euro as its
lawful currency after the date hereof shall be redenominated into Euros at the
time of such adoption (in accordance with the EMU Legislation).  If, in relation to the currency of any such
member state, the basis of accrual of interest expressed in this Agreement in
respect of that currency shall be inconsistent with any convention or practice
in the London interbank market for the basis of accrual of interest in respect
of the Euro, such expressed basis shall be replaced by such convention or
practice with effect from the date on which such member state adopts the Euro
as its lawful currency; provided that if any Foreign Currency Revolving
Loan in the currency of such member state is outstanding immediately prior to
such date, such replacement shall take effect, with respect to such Foreign
Currency Revolving Loan, at the end of the then current Interest Period.

 

32

 

(b)                                 Each
provision of this Agreement shall be subject to such reasonable changes of
construction as the Administrative Agent may from time to time specify to be
appropriate to reflect the adoption of the Euro by any member state of the
European Union and any relevant market conventions or practices relating to the
Euro.

 

(c)                                  References
herein to minimum Dollar amounts and integral multiples stated in Dollars,
where they shall also be applicable to Foreign Currency, shall be deemed to
refer to approximate Foreign Currency Equivalents.  Wherever in this Agreement an amount, such as
a minimum or maximum limitation on Indebtedness permitted to be incurred or
Investments permitted to be made hereunder, is expressed in Dollars, it shall
be deemed to refer to the Dollar Amount thereof.

 

ARTICLE II

AMOUNT AND TERMS OF THE LOANS

 

2.1                                 Commitments.

 

(a)                                  Each
Tranche A Term Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make a loan in Dollars (each, a “Tranche A
Term Loan,” and collectively, the “Tranche A Term Loans”) to the
Company on the Closing Date in a principal amount not to exceed its Tranche A
Term Loan Commitment.  No Tranche A Term
Loans shall be made at any time after the Closing Date.  To the extent repaid, Tranche A Term Loans
may not be reborrowed.

 

(b)                                 Each
Revolving Credit Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make loans in Dollars (each, a “Dollar
Revolving Loan,” and collectively, the “Dollar Revolving Loans”) to
the Company, from time to time on any Business Day during the period from and
including the Closing Date to but not including the Revolving Credit
Termination Date, provided that no Borrowing of Dollar Revolving Loans
shall be made if, immediately after giving effect thereto (and to any
concurrent repayment of Swingline Loans with proceeds of Dollar Revolving Loans
made pursuant to such Borrowing), (y) the Revolving Credit Exposure of any
Revolving Credit Lender would exceed its Revolving Credit Commitment at such
time or (z) the Aggregate Revolving Credit Exposure would exceed the
aggregate Revolving Credit Commitments at such time.  Subject to and on the terms and conditions of
this Agreement, the Company may borrow, repay and reborrow Dollar Revolving
Loans.

 

(c)                                  Each
Revolving Credit Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make loans in any Foreign Currency (each, a “Foreign
Currency Revolving Loan,” and collectively, the “Foreign Currency
Revolving Loans”) to any Borrower, from time to time on any Business Day
during the period from and including the Closing Date to but not including the
Revolving Credit Termination Date, provided that no Borrowing of Foreign
Currency Revolving Loans shall be made if, immediately after giving effect
thereto, (x) the aggregate principal outstanding Dollar Amount (determined
as of the most recent Revaluation Date) of Foreign Currency Revolving Loans
outstanding at such time would exceed the Foreign Currency Subcommitment at
such time, (y) the Revolving Credit Exposure of any Revolving

 

33

 

Credit Lender would
exceed its Revolving Credit Commitment at such time or (z) the Aggregate
Revolving Credit Exposure would exceed the aggregate Revolving Credit
Commitments at such time.  Subject to and
on the terms and conditions of this Agreement, the Borrowers may borrow, repay
and reborrow Foreign Currency Revolving Loans.

 

(d)                                 The
Swingline Lender agrees, subject to and on the terms and conditions of this
Agreement, to make loans (each, a “Swingline Loan,” and collectively,
the “Swingline Loans”) to the Company, from time to time on any Business
Day during the period from the Closing Date to but not including the Swingline
Maturity Date (or, if earlier, the Revolving Credit Termination Date), in an aggregate
principal amount at any time outstanding not exceeding the Swingline
Commitment.  Swingline Loans may be made
even if the aggregate principal amount of Swingline Loans outstanding at any
time, when added to the aggregate principal Dollar Amount (determined as of the
most recent Revaluation Date) of the Revolving Loans made by the Swingline
Lender in its capacity as a Revolving Credit Lender outstanding at such time
and its Letter of Credit Exposure at such time, would exceed the Swingline
Lender’s own Revolving Credit Commitment at such time, but provided that
no Borrowing of Swingline Loans shall be made if, immediately after giving
effect thereto, (y) the Revolving Credit Exposure of any Revolving Credit
Lender would exceed its Revolving Credit Commitment at such time or
(z) the Aggregate Revolving Credit Exposure would exceed the aggregate
Revolving Credit Commitments at such time. 
Subject to and on the terms and conditions of this Agreement, the Company
may borrow, repay (including by means of a Borrowing of Dollar Revolving Loans
pursuant to Section 2.2(e))
and reborrow Swingline Loans.

 

(e)                                  Each
Incremental Term Lender with respect to a particular Series of Incremental Term
Loans severally agrees, subject to and on the terms and conditions of this
Agreement and the applicable Incremental Term Loan Amendment, to make an
Incremental Term Loan of such Series to the Company on the applicable
Incremental Term Loan Effective Date in a principal amount not to exceed its
Incremental Term Loan Commitment with respect to such Series.  To the extent repaid, Incremental Term Loans
may not be reborrowed.

 

2.2                                 Borrowings.

 

(a)                                  The
Tranche A Term Loans, Revolving Loans and each Series of Incremental Term Loans
shall, at the option of the applicable Borrower and subject to the terms and
conditions of this Agreement, be either Base Rate Loans or LIBOR Loans, provided
that (i) all Loans comprising the same Borrowing shall, unless otherwise
specifically provided herein, be of the same Type and Applicable Currency, (ii) Foreign
Currency Revolving Loans shall be made and maintained as LIBOR Loans at all
times, and (iii) no LIBOR Loans may be borrowed at any time prior to the
third (3rd) Business Day after the Closing Date (or, with respect to
any Incremental Term Loans, the third (3rd) Business Day after the
applicable Incremental Term Loan Effective Date).  The Swingline Loans shall be made and
maintained as Base Rate Loans at all times.

 

(b)                                 In
order to make a Borrowing (other than (w) Borrowings of Swingline Loans,
which shall be made pursuant to Section 2.2(d),
(x) Borrowings for the purpose of repaying Refunded Swingline Loans, which
shall be made pursuant to Section 2.2(e),
(y) Borrowings for the purpose of paying unpaid Reimbursement Obligations,
which shall be made pursuant to

 

34

 

Section 3.5,
and (z) Borrowings involving continuations or conversions of outstanding
Loans, which shall be made pursuant to Section 2.11),
the applicable Borrower will give the Administrative Agent written notice not
later than 11:00 a.m., Charlotte time, the Applicable Number of Business Days
prior to each Borrowing to be comprised of LIBOR Loans and one (1) Business Day
prior to each Borrowing to be comprised of Base Rate Loans; provided, however,
that requests for the Borrowing of the Tranche A Term Loans and any Revolving
Loans to be made on the Closing Date may, at the discretion of the
Administrative Agent, be given with less advance notice than as specified
hereinabove.  Each such notice (each, a “Notice
of Borrowing”) shall be irrevocable, shall be given in the form of Exhibit B-1 and shall specify
(1) the applicable Borrower, (2) the aggregate principal amount,
Class and initial Type of the Loans to be made pursuant to such Borrowing,
(3) in the case of a Borrowing of LIBOR Loans, the initial Interest Period
to be applicable thereto, (4) in the case of a Borrowing of Revolving
Loans, the Applicable Currency, and (5) the requested Borrowing Date,
which shall be a Business Day.  Upon its
receipt of a Notice of Borrowing, the Administrative Agent will promptly notify
each applicable Lender of the proposed Borrowing.  Notwithstanding anything to the contrary
contained herein:

 

(i)                                     the
aggregate principal amount of the Borrowing of Tranche A Term Loans shall be in
the amount of the aggregate Tranche A Term Loan Commitments, and the aggregate
principal amount of any Borrowing of any Series of Incremental Term Loans shall
be in the amount of the aggregate Incremental Term Loan Commitments applicable
to such Series of Incremental Term Loans;

 

(ii)                                  the
aggregate principal amount of each Borrowing comprised of Base Rate Loans shall
not be less than $500,000 or, if greater, an integral multiple of $100,000 in
excess thereof (or, in the case of a Borrowing of Revolving Loans, if less, in
the amount of the aggregate Revolving Credit Commitments less the Aggregate
Revolving Credit Exposure), and the aggregate principal amount of each
Borrowing comprised of LIBOR Loans shall not be less than $1,000,000 or, if
greater, an integral multiple of $500,000 in excess thereof;

 

(iii)                               if
the applicable Borrower shall have failed to designate the Type of Loans
comprising a Borrowing, such Borrower shall be deemed to have requested a
Borrowing comprised of Base Rate Loans (unless such notice indicates that the
Borrowing is to be comprised of Foreign Currency Revolving Loans, in which case
such Borrower shall be deemed to have requested a Borrowing comprised of LIBOR
Loans);

 

(iv)                              if
the applicable Borrower shall have failed to designate the Applicable Currency
with respect to a Borrowing of Revolving Loans, such Borrower shall be deemed
to have requested (A) in the case of the Company, a Borrowing of Dollar
Revolving Loans, and (B) in the case of any Foreign Borrower, a Borrowing
of Foreign Currency Revolving Loans denominated in Euro; and

 

(v)                                 if
the applicable Borrower shall have failed to select the duration of the
Interest Period to be applicable to any Borrowing of LIBOR Loans, then such
Borrower shall be deemed to have selected an Interest Period with a duration of
one month.

 

35

 

(c)                                  In
the case of each Borrowing of Dollar Loans, not later than 1:00 p.m., Charlotte
time, on the requested Borrowing Date (which shall be the Closing Date, in the
case of the Tranche A Term Loans), each applicable Lender will make available
to the Administrative Agent at the applicable Payment Office an amount, in
Dollars and in immediately available funds, equal to the amount of the Dollar
Loan or Loans to be made by such Lender. 
To the extent such Lenders have made such amounts available to the
Administrative Agent as provided hereinabove, the Administrative Agent will
make the aggregate of such amounts available to the Company in accordance with Section 2.3(a) and in like funds as
received by the Administrative Agent.  In
the case of each Borrowing of Foreign Currency Revolving Loans, not later than
1:00 p.m., Local Time, on the requested Borrowing Date, each Revolving Credit
Lender will make available to the Administrative Agent at the applicable
Payment Office an amount, in the Applicable Currency and in immediately
available funds, equal to the amount of the Foreign Currency Revolving Loan or
Loans to be made by such Lender.  To the extent
such Lenders have made such amounts available to the Administrative Agent as
provided hereinabove, the Administrative Agent will make the aggregate of such
amounts available to the applicable Borrower in accordance with Section 2.3(a) and in like funds as
received by the Administrative Agent.

 

(d)                                 In
order to make a Borrowing of a Swingline Loan (other than borrowings pursuant
to any loan sweep product or other cash management arrangement in effect
between the Company and the Swingline Lender, which shall be effected as
provided thereunder), the Company will give the Administrative Agent (and the
Swingline Lender, if the Swingline Lender is not also the Administrative Agent)
written notice not later than 11:00 a.m., Charlotte time, on the date of such
Borrowing.  Each such notice (each, a “Notice
of Swingline Borrowing”) shall be given in the form of Exhibit B-2, shall be irrevocable and
shall specify (i) the principal amount of the Swingline Loan to be made
pursuant to such Borrowing (which shall not be less than $200,000 and, if
greater, shall be in an integral multiple of $100,000 in excess thereof (or, if
less, in the amount of the Unutilized Swingline Commitment)) and (ii) the
requested Borrowing Date, which shall be a Business Day.  Not later than 1:00 p.m., Charlotte time, on
the requested Borrowing Date, the Swingline Lender will make available to the
Administrative Agent at the Payment Office an amount, in Dollars and in
immediately available funds, equal to the amount of the requested Swingline
Loan.  To the extent the Swingline Lender
has made such amount available to the Administrative Agent as provided
hereinabove, the Administrative Agent will make such amount available to the
Company in accordance with Section 2.3(a)
and in like funds as received by the Administrative Agent.

 

(e)                                  With
respect to any outstanding Swingline Loans, the Swingline Lender may at any
time (whether or not an Event of Default has occurred and is continuing) in its
sole and absolute discretion, and is hereby authorized and empowered by the
Company to, cause a Borrowing of Dollar Revolving Loans to be made for the
purpose of repaying such Swingline Loans by delivering to the Administrative
Agent (if the Administrative Agent is not also the Swingline Lender) and each
other Revolving Credit Lender (on behalf of, and with a copy to, the Company),
not later than 11:00 a.m., Charlotte time, one (1) Business Day prior to the
proposed Borrowing Date therefor, a notice (which shall be deemed to be a
Notice of Borrowing given by the Company) requesting the Revolving Credit
Lenders to make Dollar Revolving Loans (which shall be made initially as Base
Rate Loans) on such Borrowing Date in an aggregate amount equal to the amount
of such Swingline Loans (the “Refunded Swingline Loans”) outstanding on

 

36

 

the date such notice is
given that the Swingline Lender requests to be repaid.  Not later than 1:00 p.m., Charlotte time, on
the requested Borrowing Date, each Revolving Credit Lender (other than the
Swingline Lender) will make available to the Administrative Agent at the
Payment Office an amount, in Dollars and in immediately available funds, equal
to the amount of the Dollar Revolving Loan to be made by such Lender.  To the extent the Revolving Credit Lenders
have made such amounts available to the Administrative Agent as provided
hereinabove, the Administrative Agent will make the aggregate of such amounts
available to the Swingline Lender in like funds as received by the
Administrative Agent, which shall apply such amounts in repayment of the
Refunded Swingline Loans. 
Notwithstanding any provision of this Agreement to the contrary, on the
relevant Borrowing Date, the Refunded Swingline Loans (including the Swingline
Lender’s ratable share thereof, in its capacity as a Revolving Credit Lender)
shall be deemed to be repaid with the proceeds of the Dollar Revolving Loans
made as provided above (including a Dollar Revolving Loan deemed to have been
made by the Swingline Lender), and such Refunded Swingline Loans deemed to be
so repaid shall no longer be outstanding as Swingline Loans but shall be
outstanding as Dollar Revolving Loans. 
If any portion of any such amount repaid (or deemed to be repaid) to the
Swingline Lender shall be recovered by or on behalf of the Company from the
Swingline Lender in any bankruptcy, insolvency or similar proceeding or
otherwise, the loss of the amount so recovered shall be shared ratably among
all the Revolving Credit Lenders in the manner contemplated by Section 2.15(b).

 

(f)                                    If,
as a result of any bankruptcy, insolvency or similar proceeding with respect to
the Company, Dollar Revolving Loans are not made pursuant to Section 2.2(e) in an amount sufficient
to repay any amounts owed to the Swingline Lender in respect of any outstanding
Swingline Loans, or if the Swingline Lender is otherwise precluded for any
reason from giving a notice on behalf of the Company as provided for
hereinabove, the Swingline Lender shall be deemed to have sold without
recourse, representation or warranty (except for the absence of Liens thereon
created, incurred or suffered to exist by, through or under the Swingline
Lender), and each Revolving Credit Lender shall be deemed to have purchased and
hereby agrees to purchase, a participation in such outstanding Swingline Loans
in an amount equal to its ratable share (based on the proportion that its
Revolving Credit Commitment bears to the aggregate Revolving Credit Commitments
at such time) of the unpaid amount thereof together with accrued interest
thereon.  Upon one (1) Business Day’s
prior notice from the Swingline Lender, each Revolving Credit Lender (other
than the Swingline Lender) will make available to the Administrative Agent at
the Payment Office an amount, in Dollars and in immediately available funds,
equal to its respective participation. 
To the extent the Revolving Credit Lenders have made such amounts
available to the Administrative Agent as provided hereinabove, the
Administrative Agent will make the aggregate of such amounts available to the
Swingline Lender in like funds as received by the Administrative Agent.  In the event any such Revolving Credit Lender
fails to make available to the Administrative Agent the amount of such Lender’s
participation as provided in this Section 2.2(f),
the Swingline Lender shall be entitled to recover such amount on demand from
such Lender, together with interest thereon for each day from the date such
amount is required to be made available for the account of the Swingline Lender
until the date such amount is made available to the Swingline Lender at the
Federal Funds Rate for the first three (3) Business Days and thereafter at the
Adjusted Base Rate applicable to Revolving Loans.  Promptly following its receipt of any payment
by or on behalf of the Company in respect of a Swingline Loan, the Swingline
Lender will pay to each Revolving Credit Lender that has acquired a
participation therein such Lender’s ratable share of such payment.

 

37

 

(g)                                 Notwithstanding
any provision of this Agreement to the contrary, the obligation of each
Revolving Credit Lender (other than the Swingline Lender) to make Dollar
Revolving Loans for the purpose of repaying any Refunded Swingline Loans
pursuant to Section 2.2(e)
and each such Lender’s obligation to purchase a participation in any unpaid
Swingline Loans pursuant to Section 2.2(f)
shall be absolute and unconditional and shall not be affected by any
circumstance or event whatsoever, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right that such Lender may
have against the Swingline Lender, the Administrative Agent, the Company, any
other Borrower or any other Person for any reason whatsoever, (ii) the
occurrence or continuance of any Default or Event of Default, (iii) the
failure of the amount of such Borrowing of Dollar Revolving Loans to meet the
minimum Borrowing amount specified in Section 2.2(b),
or (iv) the failure of any conditions set forth in Section 4.2 or elsewhere herein to be
satisfied.

 

2.3                                 Disbursements;
Funding Reliance; Domicile of Loans.

 

(a)                                  Each
Borrower hereby authorizes the Administrative Agent and each Correspondent to
disburse the proceeds of each Borrowing in accordance with the terms of any
written instructions from any Authorized Officer of any Borrower, provided
that neither the Administrative Agent nor any Correspondent shall be obligated
under any circumstances to forward amounts to any account not listed in an
Account Designation Letter.  Any Borrower
may at any time deliver to the Administrative Agent an Account Designation
Letter listing any additional accounts or deleting any accounts listed in a
previous Account Designation Letter.

 

(b)                                 Unless
the Administrative Agent has received, prior to 1:00 p.m., Local Time, on the
relevant Borrowing Date, written notice from a Lender that such Lender will not
make available to the Administrative Agent such Lender’s ratable portion, if
any, of the relevant Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent in
immediately available funds on such Borrowing Date in accordance with the
applicable provisions of Section 2.2,
and the Administrative Agent may, in reliance upon such assumption, but shall
not be obligated to, make a corresponding amount available to the applicable
Borrower on such Borrowing Date.  If and
to the extent that such Lender shall not have made such portion available to
the Administrative Agent, and the Administrative Agent shall have made such
corresponding amount available to the applicable Borrower, such Lender, on the
one hand, and the applicable Borrower, on the other, severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount,
together with interest thereon for each day from the date such amount is made
available to the applicable Borrower until the date such amount is repaid to
the Administrative Agent, (i) in the case of such Lender, at the Federal
Funds Rate, and (ii) in the case of the applicable Borrower, at the rate
of interest applicable at such time to the Type and Class of Loans comprising
such Borrowing, as determined under the provisions of Section 2.8.  If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Loan as part of such Borrowing for purposes of this
Agreement.  The failure of any Lender to
make any Loan required to be made by it as part of any Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its Loan
as part of such Borrowing, but no Lender shall be responsible for the failure
of any other Lender to make the Loan to be made by such other Lender as part of
any Borrowing.

 

38

 

(c)                                  Each
Lender may, at its option, make and maintain any Loan at, to or for the account
of any of its Lending Offices, provided that any exercise of such option
shall not affect the obligation of the applicable Borrower to repay such Loan
to or for the account of such Lender in accordance with the terms of this
Agreement.

 

2.4                                 Evidence
of Debt; Notes.

 

(a)                                  Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrowers to the applicable Lending
Office of such Lender resulting from each Loan made by such Lending Office of
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lending Office of such Lender from time to time under
this Agreement.

 

(b)                                 The
Administrative Agent shall maintain the Register pursuant to Section 11.7(b), and a subaccount for
each Lender, in which Register and subaccounts (taken together) shall be
recorded (i) the amount of each such Loan, the Class, Type and Applicable
Currency of each such Loan, the applicable Borrower and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the applicable Borrower to each
Lender hereunder in respect of each such Loan and (iii) the amount of any
sum received by the Administrative Agent hereunder from the applicable Borrower
in respect of each such Loan and each Lender’s share thereof.

 

(c)                                  The
entries made in the accounts, Register and subaccounts maintained pursuant to Section 2.4(b) (and, if consistent
with the entries of the Administrative Agent, Section 2.4(a))
shall, to the extent permitted by applicable law, be prima facie evidence of
the existence and amounts of the obligations of the Borrowers therein recorded;
provided, however, that the failure of any Lender or the
Administrative Agent to maintain such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of each Borrower to repay (with applicable interest) the Loans
made to such Borrower by such Lender in accordance with the terms of this
Agreement.

 

(d)                                 The
Loans of each Class made by each Lender shall, if requested by the applicable
Lender (which request shall be made to the Administrative Agent), be evidenced
(i) in the case of Term Loans, by a Term Note appropriately completed in
substantially the form of Exhibit A-1,
(ii) in the case of Revolving Loans, by a Revolving Note appropriately
completed in substantially the form of Exhibit A-2,
and (iii) in the case of the Swingline Loans, by a Swingline Note
appropriately completed in substantially the form of Exhibit A-3, in each case executed by the applicable
Borrower and payable to the order of such Lender.  Each Note shall be entitled to all of the
benefits of this Agreement and the other Credit Documents and shall be subject
to the provisions hereof and thereof.

 

2.5                                 Termination
and Reduction of Commitments and Swingline Commitment.

 

(a)                                  The
Tranche A Term Loan Commitments shall be automatically and permanently
terminated concurrently with the making of the Tranche A Term Loans on the
Closing Date (or on May 31, 2005, if the Closing Date shall not have occurred
on or prior to such date).  The Revolving
Credit Commitments shall be automatically and permanently terminated on the

 

39

 

Revolving Credit
Termination Date (or on May 31, 2005, if the Closing Date shall not have
occurred on or prior to such date), unless sooner terminated pursuant to any
other provision of this Section 2.5
or Section 9.2.  The Swingline Commitment shall be
automatically and permanently terminated on the Swingline Maturity Date (or on
May 31, 2005, if the Closing Date shall not have occurred on or prior to such
date), unless sooner terminated pursuant to any other provision of this Section 2.5 or Section 9.2.  The Incremental Term Loan Commitments
relating to any Series of Incremental Term Loans shall be automatically and
permanently terminated on the Incremental Term Loan Effective Date relating to
such Series of Incremental Term Loans, unless the Incremental Term Loans of
such Series have been made in full on or prior to such date.

 

(b)                                 At
any time and from time to time after the date hereof, upon not less than three
(3) Business Days’ prior written notice to the Administrative Agent (and in the
case of a termination or reduction of the Unutilized Swingline Commitment, the
Swingline Lender), the Company may terminate in whole or reduce in part the
aggregate Unutilized Revolving Credit Commitments or the Unutilized Swingline
Commitment, provided that any such partial reduction shall be in an
aggregate amount of not less than $1,000,000 ($200,000 in the case of the
Unutilized Swingline Commitment) or, if greater, an integral multiple of
$500,000 in excess thereof ($100,000 in the case of the Unutilized Swingline
Commitment), and provided  further that a notice of termination of
the Revolving Credit Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, a
public offering of Capital Stock of the Parent or a sale of all or
substantially all the assets or Capital Stock of the Company or the Parent
(whether by merger or otherwise), in which case such notice may be revoked by
the Company (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.  The amount of any termination or reduction
made under this Section 2.5(b)
may not thereafter be reinstated.

 

(c)                                  Each
reduction of the Revolving Credit Commitments pursuant to this Section 2.5 shall be applied ratably
among the Revolving Credit Lenders according to their respective Revolving
Credit Commitments.  Notwithstanding any
provision of this Agreement to the contrary, any reduction of the Revolving
Credit Commitments pursuant to this Section 2.5
that has the effect of reducing the aggregate Revolving Credit Commitments to
an amount less than the amount of the Swingline Commitment, the Letter of
Credit Subcommitment or the Foreign Currency Subcommitment at such time shall
result in an automatic corresponding reduction of the Swingline Commitment, the
Letter of Credit Subcommitment or the Foreign Currency Subcommitment, as the
case may be, to the amount of the aggregate Revolving Credit Commitments (as so
reduced), without any further action on the part of the Company or the
Swingline Lender.

 

2.6                                 Mandatory
Payments and Prepayments.

 

(a)                                  Except
to the extent due or paid sooner pursuant to the provisions of this Agreement,
the Company will repay the aggregate outstanding principal of the Tranche A
Term Loans on the dates and in the amounts set forth below:

 

40

 

	
  Date

  	
   

  	
  Payment Amount

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  3,125,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  3,125,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  3,125,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  3,125,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  Tranche A Term Loan Maturity Date

  	
   

  	
  $

  	
  5,000,000

  	
   

  

 

(b)                                 Except
to the extent due or paid sooner pursuant to the provisions of this Agreement,
(i) the aggregate outstanding principal of the Tranche A Term Loans shall
be due and payable in full by the Company on the Tranche A Term Loan Maturity
Date, (ii) the aggregate outstanding principal of the Dollar Revolving
Loans shall be due and payable in full by the Company on the Revolving Credit
Maturity Date, (iii) the aggregate outstanding principal of the Foreign
Currency Revolving Loans shall be due and payable in full by the applicable
Borrowers thereof on the Revolving Credit Maturity Date, and (iv) the
aggregate outstanding principal of the Swingline Loans shall be due and payable
in full by the Company on the Swingline Maturity Date.  The Company will repay the aggregate
outstanding principal of each Series of Incremental Term Loans on the dates and
in the amounts set forth in the applicable Incremental Term Loan Amendment.

 

(c)                                  In
the event that, at any time, the Aggregate Revolving Credit Exposure (excluding
the aggregate amount of any Swingline Loans to be repaid with proceeds of
Dollar Revolving Loans made on the date of determination) shall exceed the
aggregate Revolving Credit Commitments at such time (after giving effect to any
concurrent termination or reduction thereof), (i) the Company will
immediately prepay the outstanding principal amount of the Swingline Loans and
(ii) to the extent of any excess remaining after prepayment in full of
outstanding Swingline Loans, the Borrowers will (subject to Section 11.18) immediately prepay the
outstanding principal amount of the Revolving Loans in the Dollar Amount of
such excess; provided that, to the extent such excess amount is greater
than the aggregate principal Dollar Amount (determined as of the most recent
Revaluation Date) of Swingline Loans and Revolving

 

41

 

Loans outstanding
immediately prior to the application of such prepayment, the amount so prepaid
shall be retained by the Administrative Agent and held in the Cash Collateral
Account as cover for Letter of Credit Exposure, as more particularly described
in Section 3.8, and thereupon
such cash shall be deemed to reduce the aggregate Letter of Credit Exposure by
an equivalent amount.  In the event that,
at any time, the aggregate principal Dollar Amount (determined as of the most recent
Revaluation Date) of Foreign Currency Revolving Loans outstanding at such time
shall exceed 105% of the Foreign Currency Subcommitment at such time (after
giving effect to any concurrent termination or reduction thereof), the
Borrowers will (subject to Section 11.18)
prepay the outstanding principal amount of the Foreign Currency Revolving Loans
in the Dollar Amount of such excess on the last day of the first Interest
Period ending thereafter or, if sooner, within thirty (30) days (or
immediately, if an Event of Default shall then have occurred and be
continuing).

 

(d)                                 Promptly
upon (and in any event not later than one (1) Business Day after) receipt
thereof by any Credit Party, the Borrowers will (subject to Section 11.18) prepay the outstanding
principal amount of the Loans in an amount equal to 100% of the Net Cash
Proceeds from any Debt Issuance and 50% of the Net Cash Proceeds from any
Equity Issuance, and will deliver to the Administrative Agent, concurrently
with such prepayment, a certificate signed by a Financial Officer of the
Company in form and substance satisfactory to the Administrative Agent and
setting forth the calculation of such Net Cash Proceeds; provided, however,
that in the event the Total Leverage Ratio (as set forth in the Compliance Certificate
then most recently delivered to the Administrative Agent and the Lenders) is
equal to or less than 2.25 to 1.0, no prepayment shall be required under this Section 2.6(d) in respect of any
Equity Issuance.

 

(e)                                  Not
later than 180 days after receipt by any Credit Party of any proceeds of
insurance, condemnation award or other compensation in respect of any Casualty
Event (or, if earlier, upon its determination not to repair or replace any
property subject to such Casualty Event or to acquire assets used or useable in
the business of the Company and its Subsidiaries), the Borrowers will (subject
to Section 11.18) prepay the
outstanding principal amount of the Loans in an amount equal to 100% of the Net
Cash Proceeds from such Casualty Event (less any amounts theretofore applied
(or contractually committed to be applied) to the repair or replacement of
property subject to such Casualty Event or to acquire assets used or useable in
the business of the Company and its Subsidiaries) and will deliver to the
Administrative Agent, concurrently with such prepayment, a certificate signed
by a Financial Officer of the Company in form and substance satisfactory to the
Administrative Agent and setting forth the calculation of such Net Cash
Proceeds; provided, however, that, notwithstanding the foregoing,
(i) except as otherwise provided in this Agreement (including in
clause (ii) below) or in any other Credit Document, the Administrative
Agent shall turn over to the Company any such proceeds received during such 180-day
period (unless the Company has, prior to the Administrative Agent’s receipt of
such proceeds, notified the Administrative Agent of its determination not to
repair or replace the property subject to the applicable Casualty Event or to
acquire assets used or useable in the business of the Company and its
Subsidiaries), but nothing in this Section 2.6(e)
shall be deemed to limit or otherwise affect any right of the Administrative
Agent herein or in any of the other Credit Documents to receive and hold such
proceeds as loss payee and to disburse the same to the Company upon the terms
hereof or thereof, or any obligation of the Company or any of its Subsidiaries
herein or in any of the other Credit Documents to remit any such proceeds to
the Administrative Agent upon its receipt thereof, and (ii) any and all
such proceeds received or held

 

42

 

by the Administrative
Agent or any Credit Party during the continuance of an Event of Default
(regardless of any proposed or actual use thereof for repair, replacement or
reinvestment) shall be applied to prepay the outstanding principal amount of
the Loans.

 

(f)                                    Not
later than 180 days after receipt by any Credit Party of proceeds in respect of
any Asset Disposition other than an Excluded Asset Disposition (or, if earlier,
upon its determination not to apply such proceeds to the acquisition of assets
used or useable in the business of the Company and its Subsidiaries), the
Borrowers will (subject to Section 11.18)
prepay the outstanding principal amount of the Loans in an amount equal to 100%
of the Net Cash Proceeds from such Asset Disposition (less any amounts
theretofore applied (or contractually committed to be applied) to acquire
assets used or useable in the business of the Company and its Subsidiaries) and
will deliver to the Administrative Agent, concurrently with such prepayment, a
certificate signed by a Financial Officer of the Company in form and substance
satisfactory to the Administrative Agent and setting forth the calculation of
such Net Cash Proceeds; provided, however, that any such Net Cash
Proceeds not applied (or contractually committed to be applied) within 180 days
to the acquisition of other assets as provided herein shall be applied by the
Borrowers as a prepayment of the outstanding principal amount of the Loans no
later than the first (1st) Business Day immediately following such 180-day
period; and provided  further that the requirements of this Section 2.6(f) shall not apply to the
first $10,000,000 of Net Cash Proceeds from Asset Dispositions (other than
Excluded Asset Dispositions) from and after the Closing Date.  Notwithstanding the foregoing, nothing in
this Section 2.6(f) shall be
deemed to permit any Asset Disposition not expressly permitted under Section 8.4.

 

(g)                                 Concurrently
with the delivery of its annual financial statements after the end of each
fiscal year, beginning with delivery of the annual financial statements for
fiscal year 2005, and in any event not later than ninety (90) days after the
last day of each such fiscal year, the Borrowers will (subject to Section 11.18) prepay the outstanding
principal amount of the Loans in an amount equal to 50% of Excess Cash Flow, if
any, for such fiscal year and will deliver to the Administrative Agent,
concurrently with such prepayment, a certificate signed by a Financial Officer
of the Company in form and substance satisfactory to the Administrative Agent
and setting forth the calculation of such Excess Cash Flow; provided, however,
that in the event the Total Leverage Ratio is equal to or less than 2.25 to 1.0
as of the last day of any such fiscal year, no prepayment shall be required
under this Section 2.6(g) in
respect of Excess Cash Flow, if any, for such fiscal year.

 

(h)                                 Each
prepayment of the Loans made pursuant to Sections 2.6(d)
through Section 2.6(g)
shall be applied (i) first, by the Company to reduce the outstanding
principal amount of the Tranche A Term Loans and the Incremental Term Loans (if
any) on a pro rata basis, with such reduction to be applied in direct order of
maturity to the principal payments scheduled to come due within the next twelve
months and thereafter to the remaining scheduled principal payments on a pro
rata basis, (ii) second, to the extent of any excess remaining after
application as provided in clause (i) above, by the Company to reduce the
outstanding principal amount of the Swingline Loans (with a corresponding
permanent reduction of the Revolving Credit Commitments), (iii) third, to
the extent of any excess remaining after application as provided in
clauses (i) and (ii) above, by the Borrowers to reduce the outstanding
principal amount of the Revolving Loans (with a corresponding permanent
reduction of the Revolving

 

43

 

Credit Commitments), and
(iv) fourth, to the extent of any excess remaining after application as
provided in clauses (i), (ii) and (iii) above, by the Company to pay any
outstanding Reimbursement Obligations and, to the extent of any excess remaining,
to cash collateralize Letter of Credit Exposure.  Within each Class of Loans, such prepayments
shall be applied first to prepay all Base Rate Loans, and then to prepay LIBOR
Loans in direct order of Interest Period maturities.  Each payment or prepayment pursuant to the
provisions of this Section 2.6
shall be applied ratably among the Lenders holding the Loans being prepaid, in
proportion to the principal amount held by each.  Each payment or prepayment of a LIBOR Loan
made pursuant to the provisions of this Section on a day other than the
last day of the Interest Period applicable thereto shall be made together with
all amounts required under Section 2.18
to be paid as a consequence thereof.

 

(i)                                     If
any Borrower is required to make a mandatory prepayment of LIBOR Loans under
this Section 2.6, such
Borrower shall have the right, in lieu of making such prepayment in full, to
deposit an amount equal to such mandatory prepayment with the Administrative
Agent in a cash collateral account maintained (pursuant to documentation
reasonably satisfactory to the Administrative Agent) by and in the sole
dominion and control of the Administrative Agent.  Any amounts so deposited shall be held by the
Administrative Agent as collateral for the prepayment of such LIBOR Loans and
shall be applied to the prepayment of the applicable LIBOR Loans at the end of
the current Interest Periods applicable thereto.  At the request of such Borrower, amounts so
deposited shall be invested by the Administrative Agent in Cash Equivalents
maturing prior to the date or dates on which it is anticipated that such
amounts will be applied to prepay such LIBOR Loans; any interest earned on such
Cash Equivalents will be for the account of such Borrower and such Borrower
will deposit with the Administrative Agent the amount of any loss on any such
Cash Equivalents to the extent necessary in order that the amount of the
prepayment to be made with the deposited amounts may not be reduced.

 

(j)                                     In
the event the Administrative Agent receives a notice of prepayment with respect
to Sections 2.6(d) through 2.6(g), the Administrative Agent will give
prompt notice thereof to the Lenders; provided that if such notice has
also been furnished to the Lenders, the Administrative Agent shall have no
obligation to notify the Lenders with respect thereto.

 

2.7                                 Voluntary
Prepayments.

 

(a)                                  At
any time and from time to time, each Borrower shall have the right to prepay
the Loans, in whole or in part, without premium or penalty (except as provided
in clause (iii) below), upon written notice given to the Administrative
Agent not later than 11:00 a.m., Charlotte time, the Applicable Number of
Business Days prior to each intended prepayment of LIBOR Loans and one (1)
Business Day prior to each intended prepayment of Base Rate Loans (other than
Swingline Loans, which may be prepaid on a same-day basis), provided
that (i) each partial prepayment of LIBOR Loans shall be in an aggregate
principal amount of not less than $1,000,000 or, if greater, an integral
multiple of $500,000 in excess thereof, and each partial prepayment of Base
Rate Loans shall be in an aggregate principal amount of not less than $500,000
or, if greater, an integral multiple of $100,000 in excess thereof ($200,000
and $100,000, respectively, in the case of Swingline Loans), (ii) no
partial prepayment of LIBOR Loans made pursuant to any single Borrowing shall
reduce the aggregate outstanding principal amount of the remaining LIBOR Loans
under such Borrowing to less than $1,000,000 or to any

 

44

 

greater amount not an
integral multiple of $500,000 in excess thereof, and (iii) unless made
together with all amounts required under Section 2.18
to be paid as a consequence of such prepayment, a prepayment of a LIBOR Loan
may be made only on the last day of the Interest Period applicable
thereto.  Each such notice shall specify
the proposed date of such prepayment and the aggregate principal amount, Class
and Type of the Loans to be prepaid (and, in the case of LIBOR Loans, the
Interest Period of the Borrowing pursuant to which made), and shall be
irrevocable and shall bind such Borrower to make such prepayment on the terms
specified therein, provided that a notice of prepayment in full of the
Revolving Loans delivered by any Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, a public
offering of Capital Stock of the Parent or a sale of all or substantially all
the assets or Capital Stock of the Company or the Parent (whether by merger or
otherwise), in which case such notice may be revoked by such Borrower (by
notice to the Administrative Agent on or prior to the specified effective date)
if such condition is not satisfied (provided that such Borrower shall be
obligated to pay all amounts required under Section 2.18
to be paid as a consequence of the failure to make such prepayment).  Revolving Loans and Swingline Loans (but not
Term Loans) prepaid pursuant to this Section 2.7(a)
may be reborrowed, subject to the terms and conditions of this Agreement.  In the event the Administrative Agent
receives a notice of prepayment under this Section, the Administrative Agent
will give prompt notice thereof to the Lenders; provided that if such
notice has also been furnished to the Lenders, the Administrative Agent shall
have no obligation to notify the Lenders with respect thereto.

 

(b)                                 Each
prepayment of the Tranche A Term Loans or Incremental Term Loans (if any) made
pursuant to Section 2.7(a)
shall be applied to the remaining scheduled principal payments as directed by
the Company; provided that if the Company shall fail to furnish
direction, such prepayment shall be applied to reduce the outstanding principal
amount of the Tranche A Term Loans and the Incremental Term Loans (if any) on a
pro rata basis, with such reduction to be applied to the remaining scheduled
principal payments on a pro rata basis. 
Each prepayment of the Loans made pursuant to Section 2.7(a) shall be applied ratably among the Lenders
holding the Loans being prepaid, in proportion to the principal amount held by
each.

 

2.8                                 Interest.

 

(a)                                  The
Borrowers will pay interest in respect of the unpaid principal amount of each
Loan, from the date of Borrowing thereof until such principal amount shall be
paid in full, (i) at the Adjusted Base Rate, as in effect from time to
time during such periods as such Loan is a Base Rate Loan, and (ii) at the
Adjusted LIBOR Rate, as in effect from time to time during such periods as such
Loan is a LIBOR Loan.  The Company will
pay interest in respect of the unpaid principal amount of each Incremental Term
Loan, from the date of Borrowing thereof until such principal amount shall be
paid in full, at the rate or rates specified in the applicable Incremental Term
Loan Amendments.

 

(b)                                 Upon
the occurrence and during the continuance of any Event of Default involving
failure by any Borrower to pay any principal of or interest on any Loan or
Reimbursement Obligation or any fees under Sections 2.9(b)
or 2.9(c) (whether at maturity,
pursuant to acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to (i) in the case of principal of any Loan, the
interest rate applicable from time to time thereafter to such Loan (whether the
Adjusted Base Rate or the Adjusted LIBOR Rate) plus

 

45

 

2%, and (ii) in the
case of any Reimbursement Obligation or any interest or fee referred to above
for which no rate is provided hereunder, at the Adjusted Base Rate applicable
to Revolving Loans from time to time plus 2%. 
Additionally, at the election of the Required Lenders, upon the
occurrence and during the continuance of any other Event of Default, all
outstanding principal amounts of the Loans and, to the greatest extent
permitted by law, all interest accrued on the Loans, together with all other
accrued and outstanding fees and other amounts hereunder, shall bear interest
at a rate per annum equal to (i) in the case of principal of any Loan, the
interest rate applicable from time to time thereafter to such Loan (whether the
Adjusted Base Rate or the Adjusted LIBOR Rate) plus 2%, or (ii) in the
case of any Reimbursement Obligation or any interest, fee or other amounts for
which no rate is provided hereunder, at the Adjusted Base Rate applicable to
Revolving Loans from time to time plus 2%. 
All such default interest accrued hereunder shall be payable on
demand.  To the greatest extent permitted
by law, interest shall continue to accrue after the filing by or against any
Borrower of any petition seeking any relief in bankruptcy or under any law
pertaining to insolvency or debtor relief.

 

(c)                                  Accrued
(and theretofore unpaid) interest shall be payable as follows:

 

(i)                                     in
respect of each Base Rate Loan (including any Base Rate Loan or portion thereof
paid or prepaid pursuant to the provisions of Section 2.6,
except as provided hereinbelow), in arrears on the last Business Day of each
calendar quarter, beginning with the first such day to occur after the Closing
Date; provided, that in the event the Loans are repaid or prepaid in
full and the Commitments have been terminated, then accrued interest in respect
of all Base Rate Loans shall be payable together with such repayment or
prepayment on the date thereof;

 

(ii)                                  in
respect of each LIBOR Loan (including any LIBOR Loan or portion thereof paid or
prepaid pursuant to the provisions of Section 2.6,
except as provided hereinbelow), in arrears (y) on the last Business Day
of the Interest Period applicable thereto (subject to the provisions of Section 2.10(iv)) and (z) in
addition, in the case of a LIBOR Loan with an Interest Period having a duration
of six months or longer, on each date on which interest would have been payable
under clause (y) above had successive Interest Periods of three months’ duration
been applicable to such LIBOR Loan; provided, that in the event all
LIBOR Loans made pursuant to a single Borrowing are repaid or prepaid in full,
then accrued interest in respect of such LIBOR Loans shall be payable together
with such repayment or prepayment on the date thereof; and

 

(iii)                               in
respect of any Loan, at maturity (whether pursuant to acceleration or
otherwise) and, after maturity, on demand.

 

(d)                                 Nothing
contained in this Agreement or in any other Credit Document shall be deemed to
establish or require the payment of interest to any Lender at a rate in excess
of the maximum rate permitted by applicable law.  If the amount of interest payable for the
account of any Lender on any interest payment date would exceed the maximum
amount permitted by applicable law to be charged by such Lender, the amount of
interest payable for its account on such interest payment date shall be
automatically reduced to such maximum permissible amount.  In the event of any such reduction affecting
any Lender, if from time to time thereafter the amount of interest payable for
the account of such Lender on any interest payment date would be

 

46

 

less than the maximum
amount permitted by applicable law to be charged by such Lender, then the
amount of interest payable for its account on such subsequent interest payment
date shall be automatically increased to such maximum permissible amount, provided
that at no time shall the aggregate amount by which interest paid for the
account of any Lender has been increased pursuant to this sentence exceed the
aggregate amount by which interest paid for its account has theretofore been
reduced pursuant to the previous sentence.

 

(e)                                  The
Administrative Agent shall promptly notify the Company and the Lenders upon
determining the interest rate for each Borrowing of LIBOR Loans after its
receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation, and upon each change in the Base Rate; provided,
however, that the failure of the Administrative Agent to provide the
Company or the Lenders with any such notice shall neither affect any
obligations of any Borrower or the Lenders hereunder nor result in any
liability on the part of the Administrative Agent to any Borrower or any
Lender.  Each such determination
(including each determination of the Reserve Requirement) shall, absent
manifest error, be conclusive and binding on all parties hereto.

 

2.9                                 Fees.  The Company agrees to pay:

 

(a)                                  To
the Arranger and Wachovia, for their own respective accounts, on the Closing
Date, the fees required under the Fee Letter to be paid to them on the Closing
Date, in the amounts due and payable on the Closing Date as required by the
terms thereof;

 

(b)                                 To
the Administrative Agent, for the account of each Revolving Credit Lender, a
commitment fee for each calendar quarter (or portion thereof) for the period
from the date of this Agreement to the Revolving Credit Termination Date, at a
per annum rate equal to the Applicable Percentage in effect for such fee from
time to time during such quarter on such Lender’s ratable share (based on the
proportion that its Revolving Credit Commitment bears to the aggregate
Revolving Credit Commitments) of the average daily aggregate Unutilized
Revolving Credit Commitments (excluding clause (iii) of the definition
thereof for purposes of this Section 2.9(b)
only), payable in arrears (i) on the last Business Day of each calendar
quarter, beginning with the first such day to occur after the Closing Date, and
(ii) on the Revolving Credit Termination Date;

 

(c)                                  To
the Administrative Agent, for the account of each Revolving Credit Lender, a
letter of credit fee for each calendar quarter (or portion thereof) in respect
of all Letters of Credit outstanding during such quarter, at a per annum rate
equal to the Applicable Percentage in effect from time to time during such
quarter for Revolving Loans that are maintained as LIBOR Loans, on such Lender’s
ratable share (based on the proportion that its Revolving Credit Commitment
bears to the aggregate Revolving Credit Commitments) of the daily average
aggregate Stated Amount of such Letters of Credit, payable in arrears
(i) on the last Business Day of each calendar quarter, beginning with the
first such day to occur after the Closing Date, and (ii) on the later of
the Revolving Credit Termination Date and the date of termination of the last
outstanding Letter of Credit;

 

(d)                                 To
the Issuing Lender, for its own account, a facing fee for each calendar quarter
(or portion thereof) in respect of all Letters of Credit outstanding during
such quarter, at a per

 

47

 

annum rate of 0.125% on
the daily average aggregate Stated Amount of such Letters of Credit, payable in
arrears (i) on the last Business Day of each calendar quarter, beginning
with the first such day to occur after the Closing Date, and (ii) on the
later of the Revolving Credit Termination Date and the date of termination of
the last outstanding Letter of Credit;

 

(e)                                  To
the Issuing Lender, for its own account, such commissions, transfer fees and
other fees and charges incurred in connection with the issuance and
administration of each Letter of Credit as are customarily charged from time to
time by the Issuing Lender for the performance of such services in connection
with similar letters of credit, or as may be otherwise agreed to by the Issuing
Lender, but without duplication of amounts payable under Section 2.9(d); and

 

(f)                                    To
the Administrative Agent, for its own account, the annual administrative fee
described in the Fee Letter, on the terms, in the amount and at the times set
forth therein.

 

2.10                           Interest
Periods.  Concurrently with
the giving of a Notice of Borrowing or Notice of Conversion/Continuation in
respect of any Borrowing (whether in respect of Term Loans or Revolving Loans)
comprised of Base Rate Loans to be converted into, or LIBOR Loans to be
continued as, LIBOR Loans, the applicable Borrower shall have the right to
elect, pursuant to such notice, the interest period (each, an “Interest
Period”) to be applicable to such LIBOR Loans, which Interest Period shall,
at the option of such Borrower, be a one, two, three, six or (if acceptable to
all the applicable Lenders) nine or twelve-month period; provided, however,
that:

 

(i)                                     all
LIBOR Loans comprising a single Borrowing shall at all times have the same
Interest Period;

 

(ii)                                  the
initial Interest Period for any LIBOR Loan shall commence on the date of the
Borrowing of such LIBOR Loan (including the date of any continuation of, or
conversion into, such LIBOR Loan), and each successive Interest Period
applicable to such LIBOR Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires;

 

(iii)                               LIBOR
Loans may not be outstanding under more than eight (8) separate Interest
Periods at any one time (for which purpose Interest Periods shall be deemed to
be separate even if they are coterminous);

 

(iv)                              if
any Interest Period otherwise would expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day unless
such next succeeding Business Day falls in another calendar month, in which
case such Interest Period shall expire on the next preceding Business Day;

 

(v)                                 no
Interest Period may be selected with respect to Term Loans of any particular
Class that would end after a scheduled date for repayment of principal of such
Term Loans occurring on or after the first day of such Interest Period unless,
immediately after giving effect to such selection, the aggregate principal
amount of such Term Loans that are Base Rate Loans or that have Interest
Periods expiring on or before such principal repayment date equals or exceeds
the principal amount required to be paid on such principal repayment date;

 

48

 

(vi)                              the
applicable Borrower may not select any Interest Period that expires
(x) after the Tranche A Term Loan Maturity Date, with respect to Tranche A
Term Loans that are to be maintained as LIBOR Loans, (y) after the
applicable Incremental Term Loan Maturity Date for any Series of Incremental
Term Loans, with respect to Incremental Term Loans of such Series that are to
be maintained as LIBOR Loans, or (z) after the Revolving Credit Maturity
Date, with respect to Revolving Loans that are to be maintained as LIBOR Loans;

 

(vii)                           if
any Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month during which such Interest Period would
otherwise expire, such Interest Period shall expire on the last Business Day of
such calendar month; and

 

(viii)                        the
applicable Borrower may not select any Interest Period (and consequently, no
LIBOR Loans shall be made) if a Default or Event of Default shall have occurred
and be continuing at the time of such Notice of Borrowing or Notice of
Conversion/Continuation with respect to any Borrowing.

 

2.11                           Conversions
and Continuations.

 

(a)                                  The
Borrowers shall have the right, on any Business Day occurring on or after the
Closing Date, to elect (i) to convert all or a portion of the outstanding
principal amount of any Base Rate Loans of any Class into LIBOR Loans of the
same Class, or to convert any Dollar LIBOR Loans of any Class the Interest
Periods for which end on the same day into Base Rate Loans of the same Class,
or (ii) upon the expiration of any Interest Period, to continue all or a
portion of the outstanding principal amount of any LIBOR Loans of any Class the
Interest Periods for which end on the same day for an additional Interest
Period, provided that (v) any such continuation of LIBOR Loans that
are Foreign Currency Revolving Loans for an additional Interest Period shall be
in the same Foreign Currency, (w) any such conversion of LIBOR Loans into
Base Rate Loans shall involve an aggregate principal amount of not less than
$500,000 or, if greater, an integral multiple of $100,000 in excess thereof;
any such conversion of Base Rate Loans into, or continuation of, LIBOR Loans
shall involve an aggregate principal amount of not less than $1,000,000 or, if
greater, an integral multiple of $500,000 in excess thereof; and no partial
conversion of LIBOR Loans made pursuant to a single Borrowing shall reduce the
outstanding principal amount of such LIBOR Loans to less than $1,000,000 or to
any greater amount not an integral multiple of $500,000 in excess thereof,
(x) if any LIBOR Loans are converted into Base Rate Loans other than on
the last day of the Interest Period applicable thereto, the applicable Borrower
will pay, upon such conversion, all amounts required under Section 2.18 to be paid as a
consequence thereof, (y) no such conversion or continuation shall be
permitted with regard to any Base Rate Loans that are Swingline Loans, and
(z) no conversion of Base Rate Loans into LIBOR Loans or continuation of
LIBOR Loans shall be permitted during the continuance of a Default or Event of
Default.

 

(b)                                 The
applicable Borrower shall make each such election by giving the Administrative
Agent written notice not later than 11:00 a.m., Charlotte time, the Applicable
Number of Business Days prior to the intended effective date of any conversion
of Base Rate Loans into, or continuation of, LIBOR Loans and one (1) Business
Day prior to the intended

 

49

 

effective date of any
conversion of LIBOR Loans into Base Rate Loans. 
Each such notice (each, a “Notice of Conversion/Continuation”)
shall be irrevocable, shall be given in the form of Exhibit B-3 and shall specify (w) the date of such
conversion or continuation (which shall be a Business Day), (x) in the
case of a conversion into, or a continuation of, LIBOR Loans, the Interest
Period to be applicable thereto, (y) in the case of a continuation of
Foreign Currency Revolving Loans, the applicable Foreign Currency, and
(z) the aggregate amount, Class and Type of the Loans being converted or
continued.  Upon the receipt of a Notice
of Conversion/Continuation, the Administrative Agent will promptly notify each
applicable Lender of the proposed conversion or continuation.  In the event that the applicable Borrower
shall fail to deliver a Notice of Conversion/Continuation as provided herein
with respect to any outstanding LIBOR Loans, such LIBOR Loans shall
automatically be converted to Base Rate Loans upon the expiration of the then
current Interest Period applicable thereto (unless repaid pursuant to the terms
hereof).  In the event the applicable
Borrower shall have failed to select in a Notice of Conversion/Continuation the
duration of the Interest Period to be applicable to any conversion into, or
continuation of, LIBOR Loans, then such Borrower shall be deemed to have
selected an Interest Period with a duration of one month.

 

(c)                                  At
the election of the Required Revolving Credit Lenders, upon the occurrence and
during the continuance of any Event of Default, all Foreign Currency Loans then
outstanding shall be redenominated into Dollars (based on the Dollar Amount of
such Foreign Currency Loans on the date of redenomination) on the last day of
the then current Interest Periods therefor, provided that in each case
the Borrowers shall be liable for any currency exchange loss related to such
payments and shall promptly pay to each Lender, upon receipt of notice thereof
from such Lender to the Company, the amount of any such loss incurred by such
Lender.

 

2.12                           Method
of Payments; Computations.

 

(a)                                  All
payments by the Borrowers hereunder shall be made without setoff, counterclaim
or other defense and in immediately available funds to the Administrative
Agent, for the account of the Lenders entitled to such payment or the Swingline
Lender, as the case may be (except as otherwise expressly provided herein as to
payments required to be made directly to the Issuing Lender or the Lenders),
(i) in the case of payments of principal and interest with respect to any
Dollar Loan and all payments of fees, expenses and any other amounts due
hereunder or under any other Credit Document (except as set forth in
clause (ii) below with respect to amounts denominated in a Foreign Currency),
in Dollars to the Administrative Agent at the applicable Payment Office, prior
to 12:00 noon, Charlotte time, on the date payment is due, and (ii) in the
case of payments of principal and interest with respect to any Foreign Currency
Revolving Loan and any other amounts denominated in a Foreign Currency, in the
Foreign Currency in which such Foreign Currency Revolving Loan was made or in
which such other amount is denominated, to the Administrative Agent at the
applicable Payment Office, prior to 12:00 noon, Local Time, on the date payment
is due.  Any payment made as required
hereinabove, but after 12:00 noon, Charlotte time (or Local Time, as the case
may be), shall be deemed to have been made on the next succeeding Business
Day.  If any payment falls due on a day
that is not a Business Day, then such due date shall be extended to the next
succeeding Business Day (except that in the case of LIBOR Loans to which the
provisions of Section 2.10(iv)
are applicable, such due date shall be the next preceding Business Day), and

 

50

 

such extension of time
shall then be included in the computation of payment of interest, fees or other
applicable amounts.

 

(b)                                 The
Administrative Agent will distribute to the Lenders like amounts relating to
payments made to the Administrative Agent for the account of the Lenders as
follows:  (i) if the payment is
received by 12:00 noon, Charlotte time (in the case of payments denominated in
Dollars) or Local Time (in the case of payments denominated in a Foreign
Currency), in immediately available funds, the Administrative Agent will make
available to each relevant Lender on the same date, by wire transfer of
immediately available funds, such Lender’s ratable share of such payment (based
on the percentage that the amount of the relevant payment owing to such Lender
bears to the total amount of such payment owing to all of the relevant
Lenders), and (ii) if such payment is received after 12:00 noon, Charlotte
time (in the case of payments denominated in Dollars) or Local Time (in the
case of payments denominated in a Foreign Currency), or in other than
immediately available funds, the Administrative Agent will make available to
each such Lender its ratable share of such payment by wire transfer of
immediately available funds on the next succeeding Business Day (or in the case
of uncollected funds, as soon as practicable after collected).  If the Administrative Agent shall not have
made a required distribution to the appropriate Lenders as required hereinabove
after receiving a payment for the account of such Lenders, the Administrative
Agent will pay to each such Lender, on demand, its ratable share of such
payment with interest thereon at the Federal Funds Rate for each day from the date
such amount was required to be disbursed by the Administrative Agent until the
date repaid to such Lender.  The
Administrative Agent will distribute to the Issuing Lender like amounts
relating to payments made to the Administrative Agent for the account of the
Issuing Lender in the same manner, and subject to the same terms and
conditions, as set forth hereinabove with respect to distributions of amounts
to the Lenders.

 

(c)                                  Unless
the Administrative Agent shall have received written notice from the applicable
Borrower prior to the date on which any payment is due to any Lender hereunder
that such payment will not be made in full, the Administrative Agent may assume
that such Borrower has made such payment in full to the Administrative Agent on
such date, and the Administrative Agent may, in reliance on such assumption,
but shall not be obligated to, cause to be distributed to such Lender on such
due date an amount equal to the amount then due to such Lender.  If and to the extent such Borrower shall not
have so made such payment in full to the Administrative Agent, and without
limiting the obligation of such Borrower to make such payment in accordance
with the terms hereof, such Lender shall repay to the Administrative Agent
forthwith on demand such amount so distributed to such Lender, together with
interest thereon for each day from the date such amount is so distributed to
such Lender until the date repaid to the Administrative Agent, at the Federal
Funds Rate.

 

(d)                                 All
computations of interest and fees hereunder (including computations of the
Reserve Requirement) shall be made on the basis of a year consisting of
(i) in the case of interest on Base Rate Loans, 365/366 days, as the case
may be, (ii) in the case of interest on Foreign Currency Revolving Loans
denominated in Pounds Sterling, 365 days, or (iii) in all other instances,
360 days; and in each case under (i), (ii) and (iii) above, with regard to the
actual number of days (including the first day, but excluding the last day)
elapsed.

 

51

 

(e)                                  Each
payment on account of an amount due from a Borrower under this Agreement or any
other Credit Document shall be made in the Applicable Currency in which such
amount is denominated and in such funds as are customary at the place and time
of payment for the settlement of international payments in such currency.  Without limitation of the foregoing, accrued
interest on any Foreign Currency Revolving Loans shall be payable in the same
Foreign Currency as such Loan.

 

2.13                           Recovery
of Payments.

 

(a)                                  Each
Borrower agrees that to the extent such Borrower makes a payment or payments to
or for the account of the Administrative Agent, the Swingline Lender, any
Lender or the Issuing Lender, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or similar state or federal law, common law or equitable
cause (whether as a result of any demand, settlement, litigation or otherwise),
then, to the extent of such payment or repayment, the Obligation intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been received.

 

(b)                                 If
any amounts distributed by the Administrative Agent to any Lender are
subsequently returned or repaid by the Administrative Agent to any Borrower or
its representative or successor in interest, whether by court order or by
settlement approved by the Lender in question, such Lender will, promptly upon
receipt of notice thereof from the Administrative Agent, pay the Administrative
Agent such amount.  If any such amounts
are recovered by the Administrative Agent from any Borrower or its representative
or successor in interest, the Administrative Agent will redistribute such
amounts to the Lenders on the same basis as such amounts were originally
distributed.

 

2.14                           Use
of Proceeds.  The proceeds of
the Loans shall be used (i) to repay the indebtedness under the Existing
Credit Agreement in full, (ii) to pay or reimburse fees and expenses in
connection with the transactions contemplated by this Agreement, and
(iii) to provide for working capital and general corporate purposes and in
accordance with the terms and provisions of this Agreement (including, without
limitation, to finance Permitted Acquisitions in accordance with the terms and
provisions of this Agreement).

 

2.15                           Pro
Rata Treatment.

 

(a)                                  Except
in the case of Swingline Loans, all fundings, continuations and conversions of
Loans of any Class shall be made by the Lenders pro rata on the basis of their
respective Commitments to provide Loans of such Class (in the case of the
funding of Loans of such Class pursuant to Section 2.2)
or on the basis of their respective outstanding Loans of such Class (in the
case of continuations and conversions of Loans of such Class pursuant to Section 2.11, and additionally in all
cases in the event the Commitments have expired or have been terminated), as the
case may be from time to time.  All
payments on account of principal of or interest on any Loans, fees or any other
Obligations owing to or for the account of any one or more Lenders shall be
apportioned ratably among such Lenders in proportion to the amounts of such
principal, interest, fees or other Obligations owed to them respectively.

 

52

 

(b)                                 Each
Lender agrees that if it shall receive any amount hereunder (whether by
voluntary payment, realization upon security, exercise of the right of setoff
or banker’s lien, counterclaim or cross action, or otherwise, other than
pursuant to Section 2.16(a), 2.16(b), 2.16(d),
2.17, 2.18, 2.20(e) or 11.7) applicable to the payment of any of
the Obligations that exceeds its ratable share (according to the proportion of
(i) the amount of such Obligations due and payable to such Lender at such
time to (ii) the aggregate amount of such Obligations due and payable to
all Lenders at such time) of payments on account of such Obligations then or
therewith obtained by all the Lenders to which such payments are required to
have been made, such Lender shall forthwith purchase from the other Lenders
such participations in such Obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender
(whether as a result of any demand, settlement, litigation or otherwise), such
purchase from each such other Lender shall be rescinded and each such other
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery, together with an amount equal to such other Lender’s ratable
share (according to the proportion of (i) the amount of such other Lender’s
required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered.  Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to the provisions of
this Section 2.15(b) may, to
the fullest extent permitted by law, exercise any and all rights of payment
(including, without limitation, setoff, banker’s lien or counterclaim) with
respect to such participation as fully as if such participant were a direct
creditor of such Borrower in the amount of such participation.  If under any applicable bankruptcy,
insolvency or similar law, any Lender receives a secured claim in lieu of a
setoff to which this Section 2.15(b)
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this Section 2.15(b)
to share in the benefits of any recovery on such secured claim.

 

2.16                           Increased
Costs; Change in Circumstances; Illegality; etc.

 

(a)                                  If
the introduction of or any change in any applicable law, rule or regulation or
in the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, in each case after
the date hereof, or compliance by any Lender (including the Issuing Lender in
its capacity as such) with any guideline or request from any such Governmental
Authority (whether or not having the force of law) given or made after the date
hereof, shall (i) subject such Lender to any tax or other charge, or
change the basis of taxation of payments to such Lender, in respect of any of
its LIBOR Loans or any other amounts payable hereunder or its obligation to
make, fund or maintain any LIBOR Loans (other than any change in the rate or
basis of tax on or determined by reference to the overall net income or profits
of such Lender or its applicable Lending Office or franchise taxes imposed in
lieu thereof), (ii) impose, modify or deem applicable any reserve, special
deposit or similar requirement (but excluding any reserves to the extent
actually included within the Reserve Requirement in the calculation of the
LIBOR Rate) against assets of, deposits with or for the account of, or credit
extended by, such Lender or its applicable Lending Office, or (iii) impose
on such Lender or its applicable Lending Office any other condition, and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any LIBOR Loans or issuing, maintaining or participating
in Letters of Credit or to reduce the amount of any

 

53

`

sum received or
receivable by such Lender hereunder (including in respect of Letters of
Credit), the Borrowers will, promptly upon demand therefor by such Lender, pay
to such Lender such additional amounts as shall compensate such Lender for such
increase in costs or reduction in return.

 

(b)                                 If
any Lender (including the Issuing Lender in its capacity as such) shall have
reasonably determined that the introduction of or any change in any applicable
law, rule or regulation regarding capital adequacy or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, in each case after the date hereof,
or compliance by such Lender with any guideline or request from any such
Governmental Authority (whether or not having the force of law) given or made
after the date hereof, has or would have the effect, as a consequence of such
Lender’s Commitment, Loans or issuance of or participations in Letters of Credit
hereunder, of reducing the rate of return on the capital of such Lender or any
Person Controlling such Lender to a level below that which such Lender or
Controlling Person could have achieved but for such introduction, change or
compliance (taking into account such Lender’s or Controlling Person’s policies
with respect to capital adequacy), the Borrowers will, promptly upon demand
therefor by such Lender, pay to such Lender such additional amounts as will
compensate such Lender or Controlling Person for such reduction in return.

 

(c)                                  If,
on or prior to the first day of any Interest Period, (x) the
Administrative Agent or the Required Lenders shall have determined that by
reason of circumstances affecting the foreign exchange and interbank markets
generally, deposits in any Foreign Currency in the applicable amounts are not
being quoted or offered to the Administrative Agent or the Lenders for such
Interest Period, or that a fundamental change has occurred in the foreign
exchange or interbank markets with respect to any Foreign Currency (including,
without limitation, changes in national or international financial, political
or economic conditions or currency exchange rates or exchange controls),
(y) the Administrative Agent shall have determined that adequate and
reasonable means do not exist for ascertaining the applicable LIBOR Rate for
such Interest Period or (z) the Administrative Agent shall have received
written notice from the Required Lenders of their determination that the rate
of interest referred to in the definition of “LIBOR Rate” upon the basis
of which the Adjusted LIBOR Rate for LIBOR Loans for such Interest Period is to
be determined will not adequately and fairly reflect the cost to such Lenders
of making or maintaining the relevant Type of LIBOR Loans during such Interest
Period, the Administrative Agent will forthwith so notify the Company and the
Lenders.  Upon such notice, (i) all
then outstanding LIBOR Loans of each affected currency and/or Interest Period
type specified in such notice (each, a “Relevant Type”) shall
automatically, on the expiration date of the respective Interest Periods
applicable thereto (unless then repaid in full), be converted into Base Rate
Loans (provided that any affected outstanding Foreign Currency Revolving
Loan shall be repaid in full on the last day of the Interest Period therefor),
(ii) the obligation of the Lenders to make, to convert Base Rate Loans
into, or to continue, LIBOR Loans of each Relevant Type shall be suspended
(including pursuant to the Borrowing to which such Interest Period applies),
and (iii) any Notice of Borrowing or Notice of Conversion/Continuation
given at any time thereafter with respect to each Relevant Type of LIBOR Loans
shall be deemed to be a request for Base Rate Loans (provided that any
such notice with respect to any Foreign Currency Revolving Loans constituting a
Relevant Type shall be disregarded), in each case until the Administrative
Agent or the Required Lenders, as the case may be, shall have determined that

 

54

 

the circumstances giving
rise to such suspension no longer exist (and the Required Lenders, if making
such determination, shall have so notified the Administrative Agent), and the
Administrative Agent shall have so notified the Company and the Lenders.

 

(d)                                 Notwithstanding
any other provision in this Agreement, if, at any time after the date hereof
and from time to time, any Lender shall have determined in good faith that the
introduction of or any change in any applicable law, rule or regulation or in
the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance with
any guideline or request from any such Governmental Authority (whether or not
having the force of law), has or would have the effect of making it unlawful
for such Lender to make or to continue to make or maintain LIBOR Loans of any
Type, such Lender will forthwith so notify the Administrative Agent and the
Company.  Upon such notice, (i) each
of such Lender’s then outstanding LIBOR Loans of each Relevant Type shall
automatically, on the expiration date of the respective Interest Period
applicable thereto (or, to the extent any such LIBOR Loan may not lawfully be
maintained as a LIBOR Loan until such expiration date, upon such notice) and to
the extent not sooner prepaid, be converted into a Base Rate Loan (provided
that any outstanding Foreign Currency Revolving Loan shall be repaid in full on
the last day of the Interest Period therefor or, if required as provided above,
upon such notice), (ii) the obligation of such Lender to make, to convert
Base Rate Loans into, or to continue, LIBOR Loans of each Relevant Type shall
be suspended (including pursuant to any Borrowing for which the Administrative
Agent has received a Notice of Borrowing but for which the Borrowing Date has
not arrived), and (iii) any Notice of Borrowing or Notice of
Conversion/Continuation given at any time thereafter with respect to LIBOR
Loans of each Relevant Type shall, as to such Lender, be deemed to be a request
for a Base Rate Loan (provided that any such notice with respect to any
Foreign Currency Revolving Loans constituting a Relevant Type shall be
disregarded), in each case until such Lender shall have determined that the
circumstances giving rise to such suspension no longer exist and shall have so
notified the Administrative Agent, and the Administrative Agent shall have so
notified the Company.

 

(e)                                  A
certificate (which shall be in reasonable detail) showing the bases for, and
method of allocation or apportionment of, the determinations set forth in this Section 2.16 by any Lender as to any
additional amounts payable pursuant to this Section 2.16
shall be submitted by such Lender to the Company either directly or
through the Administrative Agent.  The
determinations set forth in any such certificate for purposes of this Section 2.16 of any increased costs,
reduction in return, market contingencies, illegality or any other matter
shall, absent manifest error, be conclusive, provided that such
determinations are made in good faith. 
Nothing in this Section 2.16 shall
require or be construed to require the Borrowers to pay any interest, fees,
costs or other amounts in excess of that permitted by applicable law.

 

2.17                           Taxes.

 

(a)                                  Any
and all payments by the Borrowers hereunder or under any other Credit Document
shall be made, in accordance with the terms hereof and thereof, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding branch profits taxes imposed on, and taxes imposed on or
determined by reference to the overall net income of (or franchise taxes

 

55

 

imposed on), the
Administrative Agent or any Lender, in either case by reason of any present or
former connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision thereof, other than such a connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any other
Credit Document (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as “Taxes”).  If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
other Credit Document to the Administrative Agent or any Lender, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.17), the
Administrative Agent or such Lender, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) such Borrower will make such deductions, (iii) such Borrower
will pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law and (iv) such Borrower will
deliver to the Administrative Agent or such Lender, as the case may be,
evidence of such payment.

 

(b)                                 The
Borrowers will indemnify the Administrative Agent and each Lender for the full
amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this Section 2.17)
paid by the Administrative Agent or such Lender, as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes were correctly or legally
asserted.  This indemnification shall be
made within 30 days from the date the Administrative Agent or such Lender, as
the case may be, makes written demand therefor. 
Such written demand shall set forth in reasonable detail the amount of
Taxes payable and the calculation thereof and shall be conclusive and binding
absent manifest error, provided such determination is made in good faith.

 

(c)                                  Each
of the Administrative Agent and the Lenders agrees that if it subsequently
recovers, or receives a permanent net tax benefit with respect to, any amount
of Taxes (i) previously paid by it and as to which it has been indemnified
by or on behalf of the Borrowers or (ii) previously deducted by any
Borrower (including, without limitation, any Taxes deducted from any additional
sums payable under Section 2.17(a)(i)),
the Administrative Agent or such Lender, as the case may be, shall reimburse
the Borrowers to the extent of the amount of any such recovery or permanent net
tax benefit (but only to the extent of indemnity payments made, or additional
amounts paid, by or on behalf of the Borrowers under this Section 2.17 with respect to the Taxes
giving rise to such recovery or tax benefit); provided, however,
that the Borrowers, upon the request of the Administrative Agent or such
Lender, agree to repay to the Administrative Agent or such Lender, as the case
may be, the amount paid over to the Borrowers (together with any penalties,
interest or other charges), in the event the Administrative Agent or such
Lender is required to repay such amount to the relevant taxing authority or
other Governmental Authority.  The
Administrative Agent or such Lender shall provide the Borrowers with a
certificate in reasonable detail showing the calculations of the distributions
to the Borrowers pursuant to this Section 2.17(c),
which calculations shall be conclusive and binding absent manifest error,
provided such determination is made in good faith.  Nothing in this Section 2.17 shall obligate any Lender to disclose to the
Borrowers any tax returns or other information regarding its tax affairs that
it deems in good faith to be confidential.

 

56

 

(d)                                 If
any Lender is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for federal income tax purposes (a “Non-U.S.
Lender”) and is entitled to an exemption from or a reduction of United
States withholding tax pursuant to the Internal Revenue Code, such Non-U.S.
Lender will deliver to each of the Administrative Agent and the Company, on or
prior to the Closing Date (or, in the case of a Non-U.S. Lender that becomes a
party to this Agreement as a result of an assignment after the Closing Date, on
the effective date of such assignment), (i) in the case of a Non-U.S.
Lender that is a “bank” for purposes of Section 881(c)(3)(A) of the
Internal Revenue Code, two accurate and properly completed original signed
copies of Internal Revenue Service Form W-8BEN or W-8ECI, as applicable (or
successor forms), certifying that such Non-U.S. Lender is entitled to an
exemption from or a reduction of withholding or deduction for or on account of
United States federal income taxes in connection with payments under this
Agreement or any of the other Credit Documents, or (ii) in the case of a
Non-U.S. Lender that is not a “bank” for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code, a certificate in form
and substance reasonably satisfactory to the Administrative Agent and the
Company and to the effect that (x) such Non-U.S. Lender is not a “bank”
for purposes of Section 881(c)(3)(A) of the Internal Revenue Code, is not
subject to regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental
authority, any application made to a rating agency or qualification for any
exemption from any tax, securities law or other legal requirements, (y) is
not a 10-percent shareholder for purposes of Section 881(c)(3)(B) of the
Internal Revenue Code and (z) is not a controlled foreign corporation receiving
interest from a related person for purposes of Section 881(c)(3)(C) of the
Internal Revenue Code, together with two accurate and properly completed
original signed copies of Internal Revenue Service Form W-8BEN (or successor
form).  Each such Non-U.S. Lender further
agrees to deliver to each of the Administrative Agent and the Company
additional copies of each such relevant form on or before the date that such
form expires or becomes obsolete or after the occurrence of any event
(including a change in its applicable Lending Office) requiring a change in the
most recent forms so delivered by it, in each case certifying that such
Non-U.S. Lender is entitled to an exemption from or a reduction of withholding
or deduction for or on account of United States federal income taxes in
connection with payments under this Agreement or any of the other Credit
Documents, unless an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such delivery
would otherwise be required, which event renders all such forms inapplicable or
the exemption or reduction to which such forms relate unavailable and such
Non-U.S. Lender notifies the Administrative Agent and the Company that it is
not entitled to receive payments without or at a reduced rate of deduction or
withholding of United States federal income taxes.  Each such Non-U.S. Lender will promptly
notify the Administrative Agent and the Company of any changes in circumstances
that would modify or render invalid any claimed exemption or reduction.

 

(e)                                  The
Borrowers shall not be required to indemnify any Non-U.S. Lender, or to pay any
additional amounts to any Non-U.S. Lender, in respect of United States federal
withholding tax to the extent that (i) the obligation to withhold amounts
with respect to United States federal withholding tax existed on the date such
Non-U.S. Lender became a party to this Agreement; provided, however,
that this clause (i) shall not apply to the extent that (y) the
indemnity payments or additional amounts any Lender would be entitled to
receive (without regard to this clause (i)) do not exceed the indemnity
payment or additional amounts that the person making

 

57

 

the assignment, participation
or transfer to such Lender would have been entitled to receive in the absence
of such assignment, participation or transfer, or (z) such assignment,
participation or transfer was requested by any Borrower, (ii) the
obligation to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Lender to comply with the provisions of Section 2.17(d), or (iii) any of
the representations or certifications made by a Non-U.S. Lender pursuant to Section 2.17(d) are incorrect at the
time a payment hereunder is made, other than by reason of any change in treaty,
law or regulation having effect after the date such representations or
certifications were made.

 

2.18                           Compensation.  Each Borrower will compensate each Lender
upon demand for all losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund or maintain LIBOR Loans) that such Lender may incur or sustain
(i) if for any reason (other than a default by such Lender) a Borrowing or
continuation of, or conversion into, a LIBOR Loan by or to such Borrower does
not occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, (ii) if any repayment, prepayment or conversion
of any LIBOR Loan by or to such Borrower occurs on a date other than the last
day of an Interest Period applicable thereto (including as a consequence of
acceleration of the maturity of the Loans pursuant to Section 2.9), (iii) if any
prepayment of any LIBOR Loan by such Borrower is not made on any date specified
in a notice of prepayment given by such Borrower, (iv) as a consequence of
any other failure by such Borrower to make any payments with respect to any
LIBOR Loan when due hereunder, or (v) as a consequence of any failure by
such Borrower to pay a Foreign Currency Revolving Loan in the applicable
Foreign Currency.  Calculation of all
amounts payable to a Lender under this Section 2.18
shall be made as though such Lender had actually funded its relevant LIBOR Loan
through the purchase of a Eurodollar (or other applicable Foreign Currency)
deposit bearing interest at the relevant LIBOR Rate in an amount equal to the
amount of such LIBOR Loan, having a maturity comparable to the relevant
Interest Period; provided, however, that each Lender may fund its
LIBOR Loans in any manner it sees fit and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this Section 2.18.  A certificate (which shall be in reasonable
detail) showing the bases for the determinations set forth in this Section 2.18 by any Lender as to any
additional amounts payable pursuant to this Section 2.18
shall be submitted by such Lender to such Borrower either directly or through
the Administrative Agent.  Determinations
set forth in any such certificate made in good faith for purposes of this Section 2.18 of any such losses,
expenses or liabilities shall be conclusive absent manifest error, provided
such determination was made in good faith.

 

2.19                           Replacement
of Lenders; Mitigation of Costs.

 

(a)                                  The
Company may, at any time and so long as no Default or Event of Default has then
occurred and is continuing, replace any Lender (i) that has requested
compensation from any Borrower under Section 2.16(a),
2.16(b) or 2.17, (ii) the obligation of which to
make or maintain LIBOR Loans has been suspended under Section 2.16(d) or (iii) that is
a Defaulting Lender, in any case under clauses (i) through (iii) above by
written notice to such Lender and the Administrative Agent given not more than
sixty (60) days after any such event and identifying one or more Persons each
of which shall be an Eligible Assignee and reasonably acceptable to the Administrative
Agent (each, a “Replacement Lender,” and collectively, the “Replacement

 

58

 

Lenders”)
to replace such Lender (the “Replaced Lender”), provided that
(i) the notice from the Company to the Replaced Lender and the
Administrative Agent provided for hereinabove shall specify an effective date
for such replacement (the “Replacement Effective Date”), which shall be
at least five (5) Business Days after such notice is given, (ii) as of the
relevant Replacement Effective Date, each Replacement Lender shall enter into
an Assignment and Acceptance with the Replaced Lender pursuant to Section 11.7(a) (but shall not be
required to pay the processing fee otherwise payable to the Administrative
Agent pursuant to Section 11.7(a),
which fee, for purposes hereof, shall be waived), pursuant to which such
Replacement Lenders collectively shall acquire, in such proportion among them
as they may agree with the Company and the Administrative Agent, all (but not
less than all) of the Commitments and outstanding Loans of the Replaced Lender,
and, in connection therewith, shall pay (x) to the Replaced Lender, as the
purchase price in respect thereof, an amount equal to the sum as of the
Replacement Effective Date (without duplication) of (1) the unpaid
principal amount of, and all accrued but unpaid interest on, all outstanding
Loans of the Replaced Lender and (2) the Replaced Lender’s ratable share
of all accrued but unpaid fees owing to the Replaced Lender hereunder,
(y) to the Administrative Agent, for its own account, any amounts owing to
the Administrative Agent by the Replaced Lender under Section 2.3(b), and (z) to the
Administrative Agent, for the account of the Swingline Lender, any amounts
owing to the Swingline Lender under Section 2.2(e),
and (iii) all other obligations of the Borrowers owing to the Replaced
Lender (other than those specifically described in clause (ii) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid), including, without limitation, amounts payable under Sections 2.16(a), 2.16(b) and 2.17 which give rise to the replacement of such Replaced
Lender and amounts payable under Section 2.18
as a result of the actions required to be taken under this Section 2.19, shall be paid in full by
the Borrowers to the Replaced Lender on or prior to the Replacement Effective
Date.

 

(b)                                 Any
Lender (including the Issuing Lender in such capacity) claiming any amounts
pursuant to Section 2.16(a), 2.16(b) or 2.17 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to avoid any costs, reductions or Taxes in respect of
which such amounts are claimed, including the filing of any certificate or
document reasonably requested by the Borrowers or the changing of the
jurisdiction of its Lending Office, if such efforts would avoid the need for or
reduce the amount of any such amounts which would thereafter accrue and would
not, in the sole determination of such Lender, result in any additional risks
or unreimbursed costs or expenses to such Lender or be otherwise
disadvantageous to such Lender.

 

(c)                                  No
failure by the Administrative Agent or any Lender at any time to demand payment
of any amounts payable under Sections 2.16(a),
2.16(b), 2.17 or 2.18
shall constitute a waiver of its right to demand payment of such amounts at any
later time or to demand payment of any additional amounts arising at any later
time; provided that the Borrowers shall not be required to compensate
any Lender pursuant to Sections 2.16(a),
2.16(b), 2.17 or 2.18
for any increased costs, reductions in return, Taxes or other amounts incurred
more than 180 days prior to the date that such Lender or the Administrative
Agent notifies any Borrower of the circumstances or event giving rise thereto
and of its intention to claim compensation in respect thereof; but provided
further that if any change in law (or change in interpretation or
administration thereof) or any other such event giving rise to any claim for
compensation pursuant to Sections 2.16(a),
2.16(b), 2.17 or 2.18
is retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.

 

59

 

2.20                           Increase
in Revolving Credit Commitments.

 

(a)                                  The
Company shall have the right, at any time and from time to time after the
Closing Date by written notice to and in consultation with the Administrative
Agent, to request an increase in the aggregate Revolving Credit Commitments
(each such requested increase, a “Revolving Credit Commitment Increase”),
by having one or more existing Revolving Credit Lenders increase their
respective Revolving Credit Commitments then in effect (each, an “Increasing
Lender”), by adding as a Lender with a new Revolving Credit Commitment
hereunder one or more Persons that are not already Lenders (each, an “Additional
Revolving Credit Lender”), or a combination thereof; provided that
(i) any such request for a Revolving Credit Commitment Increase shall be
in a minimum amount of $25,000,000, (ii) immediately after giving effect
to any Revolving Credit Commitment Increase, (y) the aggregate Revolving
Credit Commitments shall not exceed $125,000,000 and (z) the aggregate of
all Revolving Credit Commitment Increases effected and Incremental Term Loans
made after the Closing Date shall not exceed $50,000,000 (without regard to any
repayment of Incremental Term Loans), (iii) no Default or Event of Default
shall have occurred and be continuing on the applicable Revolving Credit Commitment
Increase Date (as hereinafter defined) or shall result from any Revolving
Credit Commitment Increase, (iv) immediately after giving effect to any
Revolving Credit Commitment Increase (including any Borrowings in connection
therewith and the application of the proceeds thereof), the Company shall be in
compliance with the financial covenants contained in Article VII, such compliance determined with regard to
calculations made on a pro forma basis for the most recently ended Reference
Period for which the Administrative Agent and the Lenders have received
financial statements and a Compliance Certificate, as if such Revolving Credit
Commitment Increase (and any Borrowings in connection therewith) had been
effected on the first day of such period, and (v) the Total Leverage Ratio
(as set forth in the Compliance Certificate then most recently delivered to the
Administrative Agent and the Lenders) is, after giving pro forma effect to such
Revolving Credit Commitment Increase (and to any Borrowings in connection
therewith and the application of the proceeds thereof), at least 0.25% below
the maximum level then permitted as set forth in Section 7.1.  Such
notice from the Company shall specify the requested amount of the Revolving
Credit Commitment Increase.

 

(b)                                 Each
Additional Revolving Credit Lender must qualify as an Eligible Assignee (the
approval of which by the Administrative Agent shall not be unreasonably
withheld or delayed) and the Borrowers and each Additional Revolving Credit
Lender shall execute a joinder agreement together with all such other
documentation as the Administrative Agent and the Company may reasonably
require, all in form and substance reasonably satisfactory to the
Administrative Agent and the Company, to evidence the Revolving Credit Commitment
of such Additional Revolving Credit Lender and its status as a Revolving Credit
Lender hereunder.

 

(c)                                  If
the aggregate Revolving Credit Commitments are increased in accordance with
this Section, the Administrative Agent and the Company shall determine the
effective date (the “Revolving Credit Commitment Increase Date,” which
shall be a Business Day not less than thirty (30) days prior to the Revolving
Credit Termination Date) and the final allocation of such increase.  The Administrative Agent shall promptly
notify the Company and the Revolving Credit Lenders of the final allocation of
such increase and the Revolving Credit Commitment Increase Date.  The Administrative Agent is hereby
authorized, on behalf of the Lenders, to enter

 

60

 

into any amendments to
this Agreement and the other Credit Documents as the Administrative Agent shall
reasonably deem appropriate to effect such Revolving Credit Commitment
Increase.

 

(d)                                 Notwithstanding
anything set forth in this Section 2.20
to the contrary, the Company shall not incur any Revolving Loans pursuant to
any Revolving Credit Commitment Increase (and no Revolving Credit Commitment
Increase shall be effective) unless the conditions set forth in Section 2.20(a) as well as the
following conditions precedent are satisfied on the applicable Revolving Credit
Commitment Increase Date:

 

(i)                                     The
Administrative Agent shall have received the following, each dated the
Revolving Credit Commitment Increase Date and in form and substance reasonably
satisfactory to the Administrative Agent:

 

(A)                              as
to each Increasing Lender, evidence of its agreement to provide a portion of
the Revolving Credit Commitment Increase, and as to each Additional Revolving
Credit Lender, a duly executed joinder agreement together with all other
documentation required by the Administrative Agent pursuant to Section 2.20(b);

 

(B)                                an
instrument, duly executed by the Company and each other Guarantor,
acknowledging and reaffirming its obligations under the Guaranty Agreement, the
Security Documents and the other Credit Documents to which it is a party and
the validity and continued effect of the Liens granted in favor of the
Administrative Agent thereunder;

 

(C)                                a
certificate of the secretary or an assistant secretary of the Company, each
other Borrower and each Guarantor, certifying to and attaching the resolutions
adopted by the board of directors (or similar governing body) of such Credit
Party approving or consenting to such Revolving Credit Commitment Increase;

 

(D)                               a
certificate of a Financial Officer of the Parent, certifying that (x) as
of the Revolving Credit Commitment Increase Date, all representations and
warranties of the Credit Parties contained in this Agreement and the other
Credit Documents qualified as to materiality are true and correct and those not
so qualified are true and correct in all material respects, both immediately
before and after giving effect to the Revolving Credit Commitment Increase and
any Borrowings in connection therewith (except to the extent any such
representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty is true and
correct (if qualified as to materiality) or true and correct in all material
respects (if not so qualified), in each case as of such date),
(y) immediately after giving effect to such Revolving Credit Commitment
Increase (including any Borrowings in connection therewith and the application
of the proceeds thereof), the Company is in compliance with the financial
covenants contained in Article VII,
such compliance determined with regard to calculations made on a pro forma
basis for the most recently ended Reference Period for which the Administrative
Agent and the Lenders have

 

61

 

received financial statements and a Compliance
Certificate, as if such Revolving Credit Commitment Increase (and any
Borrowings in connection therewith) had been effected on the first day of such
period (such calculations to be attached to the certificate), and (z) no
Default or Event of Default has occurred and is continuing, both immediately
before and after giving effect to such Revolving Credit Commitment Increase
(including any Borrowings in connection therewith and the application of the
proceeds thereof); and

 

(E)                                 an
opinion or opinions of counsel for the Credit Parties, addressed to the
Administrative Agent and the Lenders, together with such other documents,
instruments and certificates as the Administrative Agent shall have reasonably
requested;

 

(ii)                                  In
the case of any Borrowing of Revolving Loans in connection with such Revolving
Credit Commitment Increase, the conditions precedent to the making of such
Revolving Loans as set forth in Section 4.2
shall have been satisfied; and

 

(iii)                               In
the case of any Borrowing of Revolving Loans in connection with such Revolving
Credit Commitment Increase for the purpose of funding a Permitted Acquisition,
the applicable conditions set forth in this Agreement with respect to Permitted
Acquisitions shall have been satisfied.

 

(e)                                  On
the Revolving Credit Commitment Increase Date, (i) the aggregate principal
outstanding amount of the Revolving Loans (the “Initial Loans”)
immediately prior to giving effect to the Revolving Credit Commitment Increase
shall be deemed to be repaid, (ii) immediately after the effectiveness of
the Revolving Credit Commitment Increase, the Borrowers shall be deemed to have
made new Borrowings of Revolving Loans (the “Subsequent Borrowings”) in
an aggregate principal amount equal to the aggregate principal amount of the
Initial Loans and of the Types and for the Interest Periods specified in a
Notice of Borrowing delivered to the Administrative Agent in accordance with Section 2.2(b), (iii) each
Revolving Credit Lender shall pay to the Administrative Agent in immediately
available funds an amount equal to the difference, if positive, between
(y) such Lender’s pro rata percentage (calculated after giving effect to
the Revolving Credit Commitment Increase) of the Subsequent Borrowings and
(z) such Lender’s pro rata percentage (calculated without giving effect to
the Revolving Credit Commitment Increase) of the Initial Loans, (iv) after
the Administrative Agent receives the funds specified in clause (iii)
above, the Administrative Agent shall pay to each Revolving Credit Lender the
portion of such funds equal to the difference, if positive, between
(y) such Lender’s pro rata percentage (calculated without giving effect to
the Revolving Credit Commitment Increase) of the Initial Loans and
(z) such Lender’s pro rata percentage (calculated after giving effect to
the Revolving Credit Commitment Increase) of the amount of the Subsequent
Borrowings, (v) the Revolving Credit Lenders shall be deemed to hold the
Subsequent Borrowings ratably in accordance with their respective Revolving
Credit Commitments (calculated after giving effect to the Revolving Credit
Commitment Increase), (vi) each applicable Borrower shall pay all accrued
but unpaid interest on the Initial Loans to the Revolving Credit Lenders
entitled thereto, and (vii) Schedule 1.1
shall automatically be amended to reflect the Revolving Credit Commitments of
all Revolving Credit Lenders after giving effect to the Revolving Credit
Commitment Increase.  The deemed payments
made

 

62

 

pursuant to
clause (i) above in respect of each LIBOR Loan shall be subject to
indemnification by the Borrowers pursuant to the provisions of Section 2.18 if the Revolving Credit
Commitment Increase Date occurs other than on the last day of the Interest
Period relating thereto.

 

2.21                           Incremental
Term Loans.

 

(a)                                  The
Company shall have the right, at any time and from time to time after the
Closing Date by written notice to and in consultation with the Administrative
Agent, to request commitments (“Incremental Term Loan Commitments”) for
additional term loans (each, an “Incremental Term Loan,” and
collectively, the “Incremental Term Loans”) from existing Lenders, one
or more Persons that are not already Lenders (each, an “Additional Term
Lender”), or a combination thereof; provided that (i) any such
request for Incremental Term Loans shall be in a minimum amount of $25,000,000,
(ii) immediately after giving effect to the making of any Incremental Term
Loans, the aggregate of all Revolving Credit Commitment Increases effected and
Incremental Term Loans made after the Closing Date shall not exceed $50,000,000
(without regard to any repayment of Incremental Term Loans), (iii) no
Default or Event of Default shall have occurred and be continuing on the
applicable Incremental Term Loan Effective Date (as hereinafter defined) or
shall result from the making of any Incremental Term Loans,
(iv) immediately after giving effect to the making of any Incremental Term
Loans and the application of the proceeds thereof, the Company shall be in
compliance with the financial covenants contained in Article VII, such compliance determined with regard to
calculations made on a pro forma basis for the most recently ended Reference
Period for which the Administrative Agent and the Lenders have received
financial statements and a Compliance Certificate, as if such Incremental Term
Loans had been made on the first day of such period, and (v) the Total Leverage
Ratio (as set forth in the Compliance Certificate then most recently delivered
to the Administrative Agent and the Lenders) is, after giving pro forma effect
to such Incremental Term Loans and the application of the proceeds thereof, at
least 0.25% below the maximum level then permitted as set forth in Section 7.1.  Such notice from the Company shall specify
the requested amount of Incremental Term Loans. 
All Incremental Term Loans made on the same day shall be deemed to be a
separate “Series” of Incremental Term Loans.

 

(b)                                 Each
Additional Term Lender must qualify as an Eligible Assignee (the approval of
which by the Administrative Agent shall not be unreasonably withheld or
delayed) and the Company and each Additional Term Lender shall execute all such
documentation as the Administrative Agent and the Company may reasonably
require to evidence the Incremental Term Loan Commitment of such Additional
Term Lender and its status as an Incremental Term Lender hereunder.

 

(c)                                  If
Incremental Term Loan Commitments are provided in accordance with this Section,
the Administrative Agent and the Company shall determine the effective date
(each, an “Incremental Term Loan Effective Date,” which shall be a
Business Day) and the final allocation of such increase.  The Administrative Agent shall promptly
notify the Company and the Term Lenders (and Additional Term Lenders, if any)
providing the Incremental Term Loan Commitments of the final allocation of such
increase and the Incremental Term Loan Effective Date.  Incremental Term Loan Commitments shall
become Commitments under this Agreement pursuant to (i) an amendment
(each, an “Incremental Term Loan Amendment”) to this

 

63

 

Agreement executed by the Company, each Lender or Additional Term
Lender agreeing to provide such Incremental Term Loan Commitment (and no other
Lender shall be required to execute any such amendment), and the Administrative
Agent, and (ii) any amendments to the other Credit Documents (executed by
the Credit Parties party thereto and the Administrative Agent only) as the
Administrative Agent shall reasonably deem appropriate to effect such purpose
(and the Administrative Agent is hereby authorized, on behalf of the Lenders,
to enter into any Incremental Term Loan Amendment or other such amendment), in
each case under (i) and (ii) above in form and substance reasonably
satisfactory to the Administrative Agent. 
The Incremental Term Loan Commitments shall become effective on the
Incremental Term Loan Effective Date referenced in the applicable Incremental
Term Loan Amendment, and the Incremental Term Loans provided for thereunder
shall be made in accordance with the terms and subject to the conditions set forth
therein and in this Section 2.21.

 

(d)                                 The
Incremental Term Loans of any Series shall:

 

(i)                                     constitute
Obligations and Term Loans for all purposes under this Agreement and the other
Credit Documents;

 

(ii)                                  unless
otherwise specifically provided in this Agreement or in the applicable
Incremental Term Loan Amendment, be secured by the Collateral under the
Security Documents and guaranteed under the Guaranty Agreement on a pari passu
basis with all other Obligations (but in no event shall any Incremental Term
Loans rank senior in right of payment or security to any other Obligations);

 

(iii)                               have
(A) a maturity date no earlier than the later of (y) the Tranche A
Term Loan Maturity Date and (z) the final maturity date of any then
outstanding Series of Incremental Term Loans, and (B) a weighted average
life to maturity no shorter than the Tranche A Term Loans or any then
outstanding Series of Incremental Term Loans;

 

(iv)                              have
such pricing (including interest rate margins and fees) and amortization terms
as may be agreed by the Company and the Incremental Term Lenders providing such
Series of Incremental Term Loans; and

 

(v)                                 except
as specifically provided in clauses (ii) through (iv) above, otherwise
have terms and conditions substantially the same as (and in no event more
restrictive than the terms and conditions applicable to) Tranche A Term Loans
(and without limitation of the foregoing, such Incremental Term Loans shall be
entitled to the same voting rights as, and shall be entitled to receive
proceeds of voluntary and mandatory prepayments on the same basis as, the
Tranche A Term Loans).  The proceeds of
any Incremental Term Loans shall be used in accordance with Section 2.14.

 

(e)                                  Notwithstanding
anything set forth in this Section 2.21
to the contrary, the Company shall not incur any Series of Incremental Term
Loans (and no Incremental Term Loan Commitments shall be effective) unless the
conditions set forth in Section 2.21(a)
as well as the following conditions precedent are satisfied on the applicable
Incremental Term Loan Effective Date:

 

64

 

(i)                                     The
Administrative Agent shall have received the following, each dated the
Incremental Term Loan Effective Date and in form and substance reasonably
satisfactory to the Administrative Agent:

 

(A)                              an
Incremental Term Loan Amendment, duly executed by the Company and each
Incremental Term Lender providing such Incremental Term Loans;

 

(B)                                an
instrument, duly executed by the Company and each other Guarantor, acknowledging
and reaffirming its obligations under the Guaranty Agreement, the Security
Documents and the other Credit Documents to which it is a party and the
validity and continued effect of the Liens granted in favor of the
Administrative Agent thereunder;

 

(C)                                a
certificate of the secretary or an assistant secretary of the Company and each
Guarantor, certifying to and attaching the resolutions adopted by the board of
directors (or similar governing body) of such Credit Party approving or
consenting to such Incremental Term Loans;

 

(D)                               a
certificate of a Financial Officer of the Parent, certifying that (x) as
of the Incremental Term Loan Effective Date, all representations and warranties
of the Credit Parties contained in this Agreement and the other Credit Documents
qualified as to materiality are true and correct and those not so qualified are
true and correct in all material respects, both immediately before and after
giving effect to the consummation of the transactions contemplated hereby
(except to the extent any such representation or warranty is expressly stated
to have been made as of a specific date, in which case such representation or
warranty is true and correct (if qualified as to materiality) or true and
correct in all material respects (if not so qualified), in each case as of such
date), (y) immediately after giving effect to the making of such
Incremental Term Loans and the application of the proceeds thereof, the Company
is in compliance with the financial covenants contained in Article VII,
such compliance determined with regard to calculations made on a pro forma
basis for the most recently ended Reference Period for which the Administrative
Agent and the Lenders have received financial statements and a Compliance
Certificate, as if such Incremental Term Loans had been made on the first day
of such period (such calculations to be attached to the certificate), and
(z) no Default or Event of Default has occurred and is continuing, both
immediately before and after giving effect to the making of such Incremental
Term Loans and the application of the proceeds thereof; and

 

(E)                                 an
opinion or opinions of counsel for the Credit Parties, addressed to the
Administrative Agent and the Lenders, together with such other documents,
instruments and certificates as the Administrative Agent shall have reasonably
requested;

 

(ii)                                  The
conditions precedent to the making of such Incremental Term Loans set forth in Section 4.2 shall have been satisfied;

 

65

 

(iii)                               In
the case of any Borrowing of Incremental Term Loans for the purpose of funding
a Permitted Acquisition, the applicable conditions set forth in this Agreement
with respect to Permitted Acquisitions shall have been satisfied; and

 

(iv)                              Any
other conditions that may be contained in the applicable Incremental Term Loan
Amendment shall have been satisfied.

 

ARTICLE III

 

LETTERS
OF CREDIT

 

3.1                                 Issuance.  Subject to and upon the terms and conditions
herein set forth, so long as no Default or Event of Default has occurred and is
continuing, the Issuing Lender will, at any time and from time to time on and
after the Closing Date and prior to the earlier of (i) the Letter of
Credit Maturity Date and (ii) the Revolving Credit Termination Date, and
upon request by the Company in accordance with the provisions of Section 3.2, issue for the account of the Company one
or more irrevocable standby letters of credit denominated in Dollars or any
Foreign Currency and in a form customarily used or otherwise approved by the
Issuing Lender (together with all amendments, modifications and supplements
thereto, substitutions therefor and renewals and restatements thereof,
collectively, the “Letters of Credit”). 
From and after the Closing Date, the Existing Letters of Credit shall be
Letters of Credit hereunder and the fees set forth in Sections 2.9(c),
2.9(d) and 2.9(e)
shall commence with respect to such Letters of Credit on the Closing Date.  The Stated Amount of each Letter of Credit
shall not be less than such amount as may be acceptable to the Issuing
Lender.  Notwithstanding the foregoing:

 

(a)                                  No
Letter of Credit shall be issued if the Stated Amount upon issuance
(i) when added to the aggregate Letter of Credit Exposure of the Revolving
Credit Lenders at such time, would exceed the Letter of Credit Subcommitment,
(ii) when added to the aggregate Letter of Credit Exposure of the
Revolving Credit Lenders at such time with respect to Letters of Credit then
outstanding and denominated in a Foreign Currency, would exceed $3,000,000, or
(iii) when added to the Aggregate Revolving Credit Exposure, would exceed
the aggregate Revolving Credit Commitments at such time;

 

(b)                                 No
Letter of Credit shall be issued that by its terms expires later than the
Letter of Credit Maturity Date or, in any event, more than one (1) year after
its date of issuance; provided, however, that a Letter of Credit
may, if requested by the Company, provide by its terms, and on terms acceptable
to the Issuing Lender, for renewal for successive periods of one year or less
(but not beyond the Letter of Credit Maturity Date), unless and until the
Issuing Lender shall have delivered a notice of nonrenewal at least 30 days
prior to the then expiry thereof to the beneficiary of such Letter of Credit;
and

 

(c)                                  The
Issuing Lender shall be under no obligation to issue any Letter of Credit if,
at the time of such proposed issuance, (i) any order, judgment or decree
of any Governmental Authority or arbitrator shall purport by its terms to
enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or
any Requirement of Law applicable to the Issuing Lender or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuing Lender shall prohibit, or request
that the Issuing Lender refrain

 

66

 

from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Letter of Credit any restriction
or reserve or capital requirement (for which the Issuing Lender is not
otherwise compensated) not in effect on the Closing Date, or any unreimbursed
loss, cost or expense that was not applicable, in effect or known to the
Issuing Lender as of the Closing Date and that the Issuing Lender in good faith
deems material to it, or (ii) the Issuing Lender shall have actual
knowledge, or shall have received notice from any Lender, prior to the issuance
of such Letter of Credit that one or more of the conditions specified in Section 4.1 (if applicable) or Section 4.2
are not then satisfied (or have not been waived in writing as required herein)
or that the issuance of such Letter of Credit would violate the provisions of Section 3.1(a).

 

3.2                                 Notices.  Whenever the Company desires the issuance of
a Letter of Credit, the Company will give the Issuing Lender written notice
with a copy to the Administrative Agent not later than 11:00 a.m., Charlotte
time, the Applicable Number of Business Days (or such shorter period as is
acceptable to the Issuing Lender in any given case) prior to the requested date
of issuance thereof.  Each such notice
(each, a “Letter of Credit Notice”) shall be irrevocable, shall be given
in the form of Exhibit B-4 and shall specify
(i) the requested date of issuance, which shall be a Business Day,
(ii) the requested Stated Amount and expiry date of the Letter of Credit,
(iii) the Applicable Currency, and (iv) the name and address of the
requested beneficiary or beneficiaries of the Letter of Credit.  The Company will also complete any
application procedures and documents reasonably required by the Issuing Lender
in connection with the issuance of any Letter of Credit.  Upon its issuance of any Letter of Credit,
the Issuing Lender will promptly notify the Administrative Agent of such
issuance, and the Administrative Agent will give prompt notice thereof to each
Revolving Credit Lender.  The renewal or
extension of any outstanding Letter of Credit shall, for purposes of this Article III, be treated in all respects as the issuance
of a new Letter of Credit.

 

3.3                                 Participations.  Immediately upon the issuance of any Letter
of Credit (and upon the Closing Date, with respect to each Existing Letter of
Credit, and without any further action by any party to this Agreement), the
Issuing Lender shall be deemed to have sold and transferred to each Revolving
Credit Lender, and each Revolving Credit Lender shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Lender, without
recourse or warranty (except for the absence of Liens thereon created, incurred
or suffered to exist by, through or under the Issuing Lender), an undivided
interest and participation, pro rata (based on the percentage of the aggregate
Revolving Credit Commitments represented by such Revolving Credit Lender’s
Revolving Credit Commitment), in such Letter of Credit, each drawing made
thereunder and the obligations of the Company under this Agreement with respect
thereto and any Collateral or other security therefor or guaranty pertaining
thereto; provided, however, that the fee relating to Letters of
Credit described in Section 2.9(d)
shall be payable directly to the Issuing Lender as provided therein, and the
other Revolving Credit Lenders shall have no right to receive any portion
thereof.  In consideration and in
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Lender, such Lender’s pro rata share (determined as provided
above) of each Reimbursement Obligation not reimbursed by the Company on the
date due as provided in Section 3.4
or through the Borrowing of Revolving Loans as provided in Section 3.5,
or of any reimbursement payment required to be refunded to the Company for any
reason.  Upon any change in the Revolving
Credit Commitments of any of the Revolving Credit

 

67

 

Lenders pursuant to Section 11.7(a), with respect to all outstanding
Letters of Credit and Reimbursement Obligations there shall be an automatic
adjustment to the participations pursuant to this Section 3.3
to reflect the new pro rata shares of the assigning Lender and the
Assignee.  Each Revolving Lender’s obligation
to make payment to the Issuing Lender pursuant to this Section 3.4
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the termination of the Revolving Credit Commitments
or the existence of any Default or Event of Default, and each such payment
shall be made without any offset, abatement, reduction or withholding
whatsoever.

 

3.4                                 Reimbursement.
 The Company hereby agrees to
reimburse the Issuing Lender by making payment to the Administrative Agent, for
the account of the Issuing Lender, in immediately available funds, for any
payment made by the Issuing Lender under any Letter of Credit (each such amount
so paid until reimbursed, together with interest thereon payable as provided
hereinbelow, a “Reimbursement Obligation”) immediately after, and in any
event within one (1) Business Day after its receipt of notice of, such payment
(provided that any such Reimbursement Obligation shall be deemed timely
satisfied (but nevertheless subject to the payment of interest thereon as
provided hereinbelow) if satisfied pursuant to a Borrowing of Revolving Loans
made on or prior to the next Business Day following the date of the Company’s
receipt of notice of such payment, as set forth more completely in Section 3.5), together with interest on the amount so
paid by the Issuing Lender, to the extent not reimbursed prior to 2:00 p.m.,
Charlotte time, on the date of such payment or disbursement, for the period
from the date of the respective payment to the date the Reimbursement
Obligation created thereby is satisfied, at the Adjusted Base Rate applicable
to Revolving Loans as in effect from time to time during such period, such
interest also to be payable on demand. 
Such payment by the Company shall be made in the Applicable Currency of
the Letter of Credit with respect to which such payment or disbursement was
made by the Issuing Lender.  The Issuing
Lender will provide the Administrative Agent and the Company with prompt notice
of any payment or disbursement made under any Letter of Credit, although the
failure to give, or any delay in giving, any such notice shall not release,
diminish or otherwise affect the Company’s obligations under this Section 3.4 or any other provision of this
Agreement.  The Administrative Agent will
promptly pay to the Issuing Lender any such amounts received by it under this Section 3.4.

 

3.5                                 Payment
by Revolving Loans.  In the
event that the Issuing Lender makes any payment under any Letter of Credit and
the Company shall not have timely satisfied in full its Reimbursement
Obligation to the Issuing Lender pursuant to Section 3.4,
and to the extent that any amounts then held in the Cash Collateral Account
established pursuant to Section 3.8
shall be insufficient to satisfy such Reimbursement Obligation in full, the
Issuing Lender will promptly notify the Administrative Agent, and the
Administrative Agent will promptly notify each Revolving Credit Lender, of such
failure.  If the Administrative Agent
gives such notice prior to 12:00 noon, Charlotte time, on any Business Day,
each Revolving Credit Lender will make available to the Administrative Agent,
for the account of the Issuing Lender, its pro rata share (based on the
percentage of the aggregate Revolving Credit Commitments represented by such
Lender’s Revolving Credit Commitment) of the amount of such payment on such
Business Day, in the Applicable Currency of the Letter of Credit with respect
to which such payment or disbursement was made by the Issuing Lender and in
immediately available funds.  If the
Administrative Agent gives such notice after 12:00 noon, Charlotte time, on any
Business Day, each such Revolving Credit Lender shall make its pro rata share
of such amount available to the

 

68

 

Administrative Agent on
the next succeeding Business Day.  If and
to the extent any Revolving Credit Lender shall not have so made its pro rata
share of the amount of such payment available to the Administrative Agent, such
Lender agrees to pay to the Administrative Agent, for the account of the
Issuing Lender, forthwith on demand such amount, together with interest thereon
at the Federal Funds Rate for each day from such date until the date such
amount is paid to the Administrative Agent. 
The failure of any Revolving Credit Lender to make available to the
Administrative Agent its pro rata share of any payment under any Letter of
Credit shall not relieve any other Revolving Credit Lender of its obligation
hereunder to make available to the Administrative Agent its pro rata share of
any payment under any Letter of Credit on the date required, as specified
above, but no Revolving Credit Lender shall be responsible for the failure of
any other Revolving Credit Lender to make available to the Administrative Agent
such other Revolving Credit Lender’s pro rata share of any such payment.  Each such payment by a Revolving Credit
Lender under this Section 3.5
of its pro rata share of an amount paid by the Issuing Lender shall constitute
a Revolving Loan by such Revolving Credit Lender (the Company being deemed to
have given a timely Notice of Borrowing therefor) and shall be treated as such
for all purposes of this Agreement; provided that for purposes of
determining the aggregate Unutilized Revolving Credit Commitments immediately
prior to giving effect to the application of the proceeds of such Revolving
Loans, the Reimbursement Obligation being satisfied thereby shall be deemed not
to be outstanding at such time.  Each
Revolving Lender’s obligation to make Revolving Loans pursuant to this Section 3.5 shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including, without
limitation, (i) the existence of any Default or Event of Default,
(ii) the failure of the amount of such Borrowing of Revolving Loans to
meet the minimum Borrowing amount specified in Section 2.2(b),
or (iii) the failure of any conditions set forth in Section 4.2
or elsewhere herein to be satisfied.

 

3.6                                 Payment
to Revolving Credit Lenders. 
Whenever the Issuing Lender receives a payment in respect of a
Reimbursement Obligation as to which the Administrative Agent has received, for
the account of the Issuing Lender, any payments from the Revolving Credit
Lenders pursuant to Section 3.5,
the Issuing Lender will promptly pay to the Administrative Agent, and the
Administrative Agent will promptly pay to each Revolving Credit Lender that has
paid its pro rata share thereof, in immediately available funds, an amount
equal to such Revolving Credit Lender’s ratable share (based on the
proportionate amount funded by such Revolving Credit Lender to the aggregate
amount funded by all Revolving Credit Lenders) of such Reimbursement
Obligation.

 

3.7                                 Obligations
Absolute.  The Reimbursement
Obligations of the Company shall be irrevocable, shall remain in effect until
the Issuing Lender shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit, and
shall be absolute and unconditional, shall not be subject to counterclaim,
setoff or other defense or any other qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:

 

(a)                                  Any
lack of validity or enforceability of this Agreement, any of the other Credit
Documents or any documents or instruments relating to any Letter of Credit;

 

69

 

(b)                                 Any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations in respect of any Letter of Credit or any other
amendment, modification or waiver of or any consent to departure from any
Letter of Credit or any documents or instruments relating thereto, in each case
whether or not the Company has notice or knowledge thereof;

 

(c)                                  The
existence of any claim, setoff, defense or other right that the Company may
have at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such transferee
may be acting), the Administrative Agent, the Issuing Lender, any Lender or
other Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated hereby or any unrelated transactions (including
any underlying transaction between the Company and the beneficiary named in any
such Letter of Credit);

 

(d)                                 Any
draft, certificate or any other document presented under the Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect (provided
that such draft, certificate or other document appears on its face to comply
with the terms of such Letter of Credit), any errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, telecopier or
otherwise, or any errors in translation or in interpretation of technical
terms;

 

(e)                                  Any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit (provided that any draft,
certificate or other document presented pursuant to such Letter of Credit
appears on its face to comply with the terms thereof), any nonapplication or
misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit;

 

(f)                                    The
exchange, release, surrender or impairment of any Collateral or other security
for the Obligations;

 

(g)                                 The
occurrence of any Default or Event of Default; or

 

(h)                                 Any
other circumstance or event whatsoever, including, without limitation, any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, the Company or a guarantor; provided that nothing in the
foregoing shall be deemed to excuse the Issuing Lender from liability to the
Company to the extent of any damages suffered by the Company that are caused by
the Issuing Lender’s gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.

 

Any
action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Company and
each Lender and shall not create or result in any liability of the Issuing
Lender to the Company or any Lender.  It
is expressly understood and agreed that, for purposes of determining whether a
wrongful payment under a Letter of Credit resulted from the Issuing Lender’s
gross negligence or willful misconduct, (i) the Issuing Lender’s
acceptance of documents that appear on their face to comply with the terms of
such

 

70

 

Letter
of Credit, without responsibility for further investigation, regardless of any
notice or information to the contrary, (ii) the Issuing Lender’s exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit proves to be insufficient in any
respect (so long as such document appears on its face to comply with the terms
of such Letter of Credit), and whether or not any other statement or any other
document presented pursuant to such Letter of Credit proves to be forged or
invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and (iii) any noncompliance in any immaterial respect
of the documents presented under such Letter of Credit with the terms thereof
shall, in each case, be deemed not to constitute gross negligence or willful
misconduct of the Issuing Lender.

 

3.8                                 Cash
Collateral Account.  At any
time and from time to time (i) after the occurrence and during the
continuance of an Event of Default, the Administrative Agent may, and at the
direction or with the consent of the Required Revolving Lenders shall, require
the Company to deliver to the Administrative Agent such additional amount of
cash as is equal to 105% of the aggregate Letters of Credit then outstanding
(whether or not any beneficiary under any Letter of Credit shall have drawn or
be entitled at such time to draw thereunder) plus all accrued and unpaid
interest and fees thereon and (ii) in the event of a prepayment under Section 2.6(c) or Section 2.6(h),
the Administrative Agent will retain such amount as may then be required to be
retained, such amounts in each case under clauses (i) and (ii) above to be
held by the Administrative Agent in a cash collateral account (the “Cash
Collateral Account”).  The Company
hereby grants to the Administrative Agent, for the benefit of the Issuing
Lender and the Lenders, a Lien upon and security interest in the Cash
Collateral Account and all amounts held therein from time to time as security
for Letter of Credit Exposure, and for application to the Company’s
Reimbursement Obligations as and when the same shall arise.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account.  Other than any interest on the
investment of such amounts in Cash Equivalents, which investments shall be made
at the direction of the Company (unless a Default or Event of Default shall
have occurred and be continuing, in which case the determination as to investments
shall be made at the option and in the discretion of the Administrative Agent),
amounts in the Cash Collateral Account shall not bear interest.  Interest and profits, if any, on such
investments shall accumulate in such account. 
In the event of a drawing, and subsequent payment by the Issuing Lender,
under any Letter of Credit at any time during which any amounts are held in the
Cash Collateral Account, the Administrative Agent will deliver to the Issuing
Lender an amount equal to the Reimbursement Obligation created as a result of
such payment (or, if the amounts so held are less than such Reimbursement
Obligation, all of such amounts) to reimburse the Issuing Lender therefor.  Any amounts remaining in the Cash Collateral
Account (including interest) after the expiration of all Letters of Credit and
reimbursement in full of the Issuing Lender for all of its obligations
thereunder shall be held by the Administrative Agent, for the benefit of the
Company, to be applied against the Obligations in such order and manner as the
Administrative Agent may direct.  If the
Company is required to provide cash collateral pursuant to Section 2.6(c),
such amount (including interest), to the extent not applied as aforesaid, shall
be returned to the Company on demand, provided that after giving effect
to such return (i) the Aggregate Revolving Credit Exposure would not
exceed the aggregate Revolving Credit Commitments at such time and (ii) no
Default or Event of Default shall have occurred and

 

71

 

be continuing at such
time.  If the Company is required to
provide cash collateral as a result of an Event of Default, such amount (to the
extent not applied as aforesaid) shall be returned to the Company within three
(3) Business Days after all Events of Default have been cured or waived.

 

3.9                                 Effectiveness.  Notwithstanding any termination of the
Revolving Credit Commitments or repayment of the Loans, or both, the
obligations of the Company under this Article III
shall remain in full force and effect until the Issuing Lender and the
Revolving Credit Lenders shall have no further obligations to make any payments
or disbursements under any circumstances with respect to any Letter of Credit.

 

ARTICLE IV

 

CONDITIONS OF BORROWING

 

4.1                                 Conditions
of Initial Borrowing.  The
obligation of each Lender to make Loans in connection with the initial
Borrowing hereunder, and the obligation of the Issuing Lender to issue Letters
of Credit hereunder on the Closing Date, is subject to the satisfaction of the
following conditions precedent:

 

(a)                                  The
Administrative Agent shall have received the following, each dated as of the
Closing Date (unless otherwise specified) and in such number of copies as the
Administrative Agent shall have requested:

 

(i)                                     to
the extent requested by any Lender in accordance with Section 2.4(d),
a Note or Notes for such Lender, in each case duly completed in accordance with
the provisions of Section 2.4(a)
and executed by each applicable Borrower;

 

(ii)                                  the
Guaranty Agreement, duly completed and executed by the Parent, the Company and
each Subsidiary (other than any Foreign Subsidiary);

 

(iii)                               the
Security Agreement, duly completed and executed by the Parent, the Company and
each Subsidiary (other than any Foreign Subsidiary);

 

(iv)                              the
Pledge Agreement, duly completed and executed by the Parent, the Company and
each Subsidiary (other than any Foreign Subsidiary) that owns Capital Stock of
another Subsidiary, together with any certificates evidencing the Capital Stock
being pledged thereunder as of the Closing Date and undated assignments
separate from certificate for any such certificate, duly executed in blank;

 

(v)                                 short-form
security agreements for the federally registered Intellectual Property referred
to in Annexes C, D and E of the Security Agreement, in substantially the form
of Exhibits B and C (as applicable) to the Security Agreement; and

 

(vi)                              the
favorable opinions of (A) Bingham McCutchen LLP, special counsel to the
Parent and its Subsidiaries, and (B) general counsel to the Parent and its
Subsidiaries, each in form and substance reasonably satisfactory to the
Administrative Agent.

 

72

 

(b)                                 The
Administrative Agent shall have received a certificate, signed by the president,
the chief executive officer or the chief financial officer of the Parent, in
form and substance reasonably satisfactory to the Administrative Agent,
certifying that (i) as of the Closing Date, all representations and
warranties of the Credit Parties contained in this Agreement and the other
Credit Documents qualified as to materiality are true and correct and those not
so qualified are true and correct in all material respects, both immediately
before and after giving effect to the consummation of the transactions
contemplated hereby (except to the extent any such representation or warranty
is expressly stated to have been made as of a specific date, in which case such
representation or warranty is true and correct (if qualified as to materiality)
or true and correct in all material respects (if not so qualified), in each
case as of such date), (ii) no Default or Event of Default has occurred
and is continuing, both immediately before and after giving effect to the
consummation of the transactions contemplated hereby, (iii) no Material
Adverse Effect has occurred since December 31, 2004, and there exists no event,
condition or state of facts that could reasonably be expected to result in a
Material Adverse Effect, and (iv) all conditions to the initial extensions
of credit hereunder set forth in this Section 4.1
and in Section 4.2 have been satisfied or
waived as required hereunder.

 

(c)                                  The
Administrative Agent shall have received a certificate of the secretary or an
assistant secretary of each Credit Party executing any Credit Documents as of
the Closing Date, in form and substance reasonably satisfactory to the
Administrative Agent, certifying (i) that attached thereto is a true and
complete copy of the articles or certificate of incorporation, certificate of
formation or other organizational document and all amendments thereto of such
Credit Party, certified as of a recent date by the Secretary of State (or
comparable Governmental Authority) of its jurisdiction of organization, and
that the same has not been amended since the date of such certification,
(ii) that attached thereto is a true and complete copy of the bylaws,
operating agreement or similar governing document of such Credit Party, as then
in effect and as in effect at all times from the date on which the resolutions
referred to in clause (iii) below were adopted to and including the date
of such certificate, and (iii) that attached thereto is a true and
complete copy of resolutions adopted by the board of directors (or similar governing
body) of such Credit Party, authorizing the execution, delivery and performance
of this Agreement and the other Credit Documents to which it is a party, and as
to the incumbency and genuineness of the signature of each officer of such
Credit Party executing this Agreement or any of such other Credit Documents,
and attaching all such copies of the documents described above.

 

(d)                                 The
Administrative Agent shall have received (i) a certificate as of a recent
date of the good standing of each Credit Party executing any Credit Documents
as of the Closing Date, under the laws of its jurisdiction of organization,
from the Secretary of State (or comparable Governmental Authority) of such
jurisdiction, and (ii) a certificate as of a recent date of the
qualification of each Credit Party to conduct business as a foreign corporation
in each jurisdiction where it is so qualified as of the Closing Date, from the
Secretary of State (or comparable Governmental Authority) of such jurisdiction.

 

(e)                                  All
approvals, permits and consents of any Governmental Authorities or other
Persons required in connection with the execution and delivery of this
Agreement and the other Credit Documents and the consummation of the
transactions contemplated hereby and thereby shall have been obtained, without
the imposition of conditions that are not acceptable to the Administrative
Agent, and all related filings, if any, shall have been made, and all such

 

73

 

approvals, permits,
consents and filings shall be in full force and effect and the Administrative
Agent shall have received such copies thereof as it shall have reasonably
requested; all applicable waiting periods shall have expired without any
adverse action being taken or threatened by any Governmental Authority having
jurisdiction; and no action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before, and no
order, injunction or decree shall have been entered by, any court or other
Governmental Authority, in each case to enjoin, restrain or prohibit, to obtain
substantial damages in respect of, or to impose materially adverse conditions
upon, this Agreement or any of the other Credit Documents or that could
reasonably be expected to have a Material Adverse Effect.

 

(f)                                    Concurrently
with the making of the initial Loans hereunder, all principal, interest and
other amounts outstanding under the Existing Credit Agreement shall (except to
the extent held by lenders thereunder who are continuing as Lenders under this
Agreement) be repaid and satisfied in full, and the Administrative Agent shall
have received evidence of the foregoing satisfactory to it.

 

(g)                                 The
Administrative Agent shall have received certified reports from an independent
search service satisfactory to it listing any judgment or tax lien filing or
Uniform Commercial Code financing statement that names any Credit Party as
debtor in any of the jurisdictions listed beneath its name on Annex B to the
Security Agreement, as well as lien search results with respect to Foreign
Subsidiaries in their jurisdiction of organization (to the extent requested by
the Administrative Agent), and the results thereof shall be satisfactory to the
Administrative Agent.

 

(h)                                 The
Administrative Agent shall have received evidence in form and substance
satisfactory to it that all filings, recordings, registrations and other
actions (including, without limitation, the filing of duly completed UCC-1
financing statements in each jurisdiction listed on Annex A to the Security
Agreement) necessary to perfect the Liens created by the Security Documents
shall have been completed, or arrangements satisfactory to the Administrative
Agent for the completion thereof shall have been made.

 

(i)                                     Since
December 31, 2004, there shall not have occurred (i) a Material Adverse
Effect or (ii) any event, condition or state of facts that could
reasonably be expected to have a Material Adverse Effect.

 

(j)                                     The
Company shall have paid (i) to the Arranger and Wachovia, the fees
required under the Fee Letter to be paid to them on the Closing Date, in the
amounts due and payable on the Closing Date as required by the terms thereof,
(ii) to the Administrative Agent, the initial payment of the annual
administrative fee described in the Fee Letter, and (iii) all other fees
and reasonable expenses of the Arranger, the Administrative Agent and the
Lenders required hereunder or under any other Credit Document to be paid on or
prior to the Closing Date (including reasonable fees and expenses of counsel)
in connection with this Agreement and the other Credit Documents.

 

(k)                                  The
Administrative Agent shall have received (i) copies of the audited
financial statements referred to in Section 5.11(a)
and a Financial Condition Certificate, (ii) the Projections, and
(iii) unaudited consolidated financial statements of the Parent and its

 

74

 

Subsidiaries as of the
last day of the month most recently ended prior to the Closing Date for which
such financial statements are available, all of which shall be in form and
substance satisfactory to the Administrative Agent.

 

(l)                                     The
Administrative Agent shall be satisfied that Consolidated EBITDA for the
twelve-month period most recently ended prior to the Closing Date for which
financial statements are available is not less than $54,000,000, and the
Administrative Agent shall have received a certificate of a Financial Officer
of the Company as to the foregoing, together with supporting documentation, all
in form and substance satisfactory to the Administrative Agent.

 

(m)                               The
Administrative Agent shall have received evidence in form and substance
satisfactory to it that all of the requirements of Section 6.6
and those provisions of the Security Agreement relating to the maintenance of
insurance with respect to the Collateral have been satisfied, including receipt
of certificates of insurance evidencing the insurance coverages described on Schedule 5.18 and all other or additional coverages
required under the Security Agreement and naming the Administrative Agent as
loss payee or additional insured, as its interests may appear.

 

(n)                                 The
Administrative Agent shall have received an Account Designation Letter,
together with written instructions from an Authorized Officer of the Company,
including wire transfer information, directing the payment of the proceeds of
the initial Loans to be made hereunder.

 

(o)                                 Each
of the Administrative Agent and each Lender shall have received such other
documents, certificates, opinions and instruments in connection with the
transactions contemplated hereby as it shall have reasonably requested.

 

4.2                                 Conditions
of All Borrowings.  The
obligation of each Lender to make any Loans hereunder, including the initial
Loans and any Incremental Term Loans (but excluding Revolving Loans made for
the purpose of repaying Refunded Swingline Loans pursuant to Section 2.2(e)), and the obligation of the Issuing
Lender to issue any Letters of Credit hereunder, is subject to the satisfaction
of the following conditions precedent on the relevant Borrowing Date or date of
issuance:

 

(a)                                  The
Administrative Agent shall have received a Notice of Borrowing in accordance
with Section 2.2(b), or (together with
the Swingline Lender) a Notice of Swingline Borrowing in accordance with Section 2.2(d), or (together with the Issuing Lender) a
Letter of Credit Notice in accordance with Section 3.2,
as applicable;

 

(b)                                 Each
of the representations and warranties contained in Article V
and in the other Credit Documents qualified as to materiality shall be true and
correct and those not so qualified shall be true and correct in all material
respects, in each case on and as of such Borrowing Date (including the Closing
Date, in the case of the initial Loans made hereunder) or date of issuance of a
Letter of Credit with the same effect as if made on and as of such date, both
immediately before and after giving effect to the Loans to be made or Letter of
Credit to be issued on such date (except to the extent any such representation
or warranty is expressly stated to have been made as of a specific date, in
which case such representation or warranty shall be true and correct

 

75

 

(if qualified as to
materiality) or true and correct in all material respects (if not so
qualified), in each case as of such date); and

 

(c)                                  No
Default or Event of Default shall have occurred and be continuing on such date,
both immediately before and after giving effect to the Loans to be made or
Letter of Credit to be issued on such date.

 

Each
giving of a Notice of Borrowing, a Notice of Swingline Borrowing or a Letter of
Credit Notice, and the consummation of each Borrowing or issuance of a Letter
of Credit, shall be deemed to constitute a representation by the applicable Borrower
that the statements contained in Sections 4.2(b) and
4.2(c) are true, both as of the date of
such notice or request and as of the relevant Borrowing Date or date of
issuance.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

To
induce the Administrative Agent, the Issuing Lender and the Lenders to enter
into this Agreement and to induce the Lenders to extend the credit contemplated
hereby and the Issuing Lender to issue Letters of Credit, each of the Parent
and the Borrowers represents and warrants to the Administrative Agent, the
Issuing Lender and the Lenders as follows:

 

5.1                                 Corporate
Organization and Power.  Each
Credit Party (i) is a corporation or a limited liability company duly
organized or formed, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation, as the case may be (which
jurisdictions, as of the Closing Date, are set forth on Schedule 5.1),
(ii) has the full corporate or limited liability company power and
authority to execute, deliver and perform the Credit Documents to which it is
or will be a party, to own and hold its property and to engage in its business
as presently conducted, and (iii) is duly qualified to do business as a
foreign corporation or limited liability company and is in good standing in
each jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified, except where the failure to be so
qualified, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.

 

5.2                                 Authorization;
Enforceability.  Each Credit
Party has taken, or on the Closing Date will have taken, all necessary
corporate or limited liability action, as applicable, to execute, deliver and
perform each of the Credit Documents to which it is or will be a party, and
has, or on the Closing Date (or any later date of execution and delivery) will
have, validly executed and delivered each of the Credit Documents to which it
is or will be a party.  This Agreement
constitutes, and each of the other Credit Documents upon execution and delivery
will constitute, the legal, valid and binding obligation of each Credit Party
that is a party hereto or thereto, enforceable against it in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, by general equitable principles or by principles of good faith and
fair dealing (regardless of whether enforcement is sought in equity or at law).

 

5.3                                 No
Violation.  The execution,
delivery and performance by each Credit Party of each of the Credit Documents
to which it is or will be a party, and compliance by it with the

 

76

 

terms hereof and thereof, do not and will not (i) violate any
provision of its articles or certificate of incorporation or formation, its
bylaws or operating agreement, or other applicable formation or organizational
documents, (ii) contravene any other Requirement of Law applicable to it,
(iii) conflict with, result in a breach of or constitute (with notice,
lapse of time or both) a default under any indenture, agreement or other
instrument to which it is a party, by which it or any of its properties is bound
or to which it is subject, or (iv) except for the Liens granted in favor
of the Administrative Agent pursuant to the Security Documents, result in or
require the creation or imposition of any Lien upon any of its properties,
revenues or assets; except, in the case of clauses (ii) and (iii) above,
where such violations or conflicts, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

 

5.4                                 Governmental
and Third-Party Authorization; Permits.  No consent, approval, authorization or other
action by, notice to, or registration or filing with, any Governmental
Authority or other Person is or will be required as a condition to or otherwise
in connection with the due execution, delivery and performance by each Credit Party
of this Agreement or any of the other Credit Documents to which it is or will
be a party or the legality, validity or enforceability hereof or thereof, other
than (i) filings of Uniform Commercial Code financing statements and other
instruments and actions necessary to perfect the Liens created by the Security
Documents, and (ii) consents and filings the failure to obtain or make
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.  Each
Credit Party has, and is in good standing with respect to, all governmental
approvals, licenses, permits and authorizations necessary to conduct its
business as presently conducted and to own or lease and operate its properties,
except for those the failure to obtain which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

5.5                                 Litigation.
 Except as specified in Schedule 5.5, there are no actions, investigations,
suits or proceedings pending or, to the knowledge of any Borrower, threatened,
at law, in equity or in arbitration, before any court, other Governmental
Authority, arbitrator or other Person, (i) against or affecting any Credit
Party or any of their respective properties that, if adversely determined, could
reasonably be expected to have a Material Adverse Effect, or (ii) with
respect to this Agreement or any of the other Credit Documents or any of the
transactions contemplated hereby or thereby.

 

5.6                                 Taxes.  Each Credit Party has timely filed all
federal, state, local and foreign tax returns and reports required to be filed
by it and has paid, prior to the date on which penalties would attach thereto
or a Lien would attach to any of the properties of a Credit Party if unpaid,
all taxes, assessments, fees and other charges levied upon it or upon its
properties that are shown thereon as due and payable, other than those that are
not yet delinquent or that are being contested in good faith and by proper
proceedings and for which adequate reserves have been established in accordance
with GAAP.  Such returns accurately
reflect in all material respects all liability for taxes of the Credit Parties
for the periods covered thereby.  As of the
Closing Date, there is no ongoing audit or examination or, to the knowledge of
any Borrower, other investigation by any Governmental Authority of the tax
liability of any of the Credit Parties, and there is no material unresolved
claim by any Governmental Authority concerning the tax liability of any Credit
Party for any period for which tax returns have been or were required to have
been filed, other than unsecured claims for which adequate reserves have been
established in

 

77

 

accordance with
GAAP.  As of the Closing Date, no Credit
Party has waived or extended or has been requested to waive or extend the
statute of limitations relating to the payment of any taxes.  Notwithstanding the foregoing, with respect
to any state, local, or foreign sales tax returns or reports, the payment or
transfer to the applicable authority of any sales taxes, or any audits, or
examinations, or waivers or extensions of statutes of limitations with respect
thereto, the representations in this Section 5.6
are true except to the extent that the failure of any such representations to
be true could not reasonably be expected to have a Material Adverse Effect.

 

5.7                                 Subsidiaries.  Schedule 5.7
sets forth a list, as of the Closing Date, of all of the Subsidiaries of the
Parent (including the Company) and (i) as to each such Subsidiary, the
percentage ownership (direct and indirect) of the Parent in each class of its
Capital Stock and each direct owner thereof, and (ii) as to each Credit
Party (other than the Parent), the number of shares of each class of Capital
Stock outstanding, and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and similar rights.  All outstanding shares of Capital Stock of
the Company and each of its Subsidiaries are duly and validly issued, fully
paid and nonassessable.  Except for the
shares of Capital Stock and the other equity arrangements expressly indicated
on Schedule 5.7, as of the Closing
Date there are no shares of Capital Stock, warrants, rights, options or other
equity securities, or other Capital Stock of any Credit Party (other than the
Parent) outstanding or reserved for any purpose.

 

5.8                                 Full
Disclosure.  All factual
information heretofore, contemporaneously or hereafter furnished in writing to
the Administrative Agent, the Arranger or any Lender by or on behalf of any
Credit Party for purposes of or in connection with this Agreement and the
transactions contemplated hereby is or will be true and accurate in all
material respects on the date as of which such information is dated or
certified (or, if such information has been updated, amended or supplemented,
on the date as of which any such update, amendment or supplement is dated or
certified) and not made incomplete by omitting to state a material fact
necessary to make the statements contained herein and therein, in light of the
circumstances under which such information was provided, not misleading; provided
that, with respect to projections, budgets and other estimates, except as
specifically represented in Section 5.11(b),
the Parent and the Borrowers represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the
time.  As of the Closing Date, there is
no fact known to any Credit Party that has, or could reasonably be expected to
have, a Material Adverse Effect, which fact has not been set forth herein, in
the financial statements of the Parent and its Subsidiaries furnished to the
Administrative Agent and/or the Lenders, or in any certificate, opinion or other
written statement made or furnished by any Borrower to the Administrative Agent
and/or the Lenders.

 

5.9                                 Margin
Regulations.  No Credit Party
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying Margin
Stock.  No proceeds of the Loans will be
used, directly or indirectly, to purchase or carry any Margin Stock, to extend
credit for such purpose or for any other purpose, in each case that would
violate or be inconsistent with Regulations T, U or X or any provision of the
Exchange Act.

 

78

 

5.10                           No
Material Adverse Effect.  There has been no Material Adverse Effect
since December 31, 2004, and there exists no event, condition or state of facts
that could reasonably be expected to result in a Material Adverse Effect.

 

5.11                           Financial
Matters.

 

(a)                                  The
Company has heretofore furnished to the Administrative Agent copies of
(i) the audited consolidated balance sheets of the Parent and its
Subsidiaries as of December 31, 2004, 2003 and 2002, in each case with the
related statements of income, cash flows and stockholders’ equity for the
fiscal years then ended, together with the opinion of Ernst & Young LLP
thereon, and (ii) the unaudited consolidated balance sheet of the Parent
and its Subsidiaries as of the last day of the first fiscal quarter of fiscal
year 2005, and the related statements of income and cash flows for the
three-month period then ended.  Such
financial statements have been prepared in accordance with GAAP (subject, with
respect to the unaudited financial statements, to the absence of notes required
by GAAP and to normal year-end adjustments) and present fairly in all material
respects the financial condition of the Parent and its Subsidiaries (on a
consolidated basis) as of the respective dates thereof and the results of
operations of the Parent and its Subsidiaries (on a consolidated basis) for the
respective periods then ended.  Except as
fully reflected in the most recent financial statements referred to above and
the notes thereto, there are no material liabilities or obligations with
respect to the Parent and its Subsidiaries of any nature whatsoever (whether
absolute, contingent or otherwise and whether or not due) that are required in
accordance with GAAP to be reflected in such financial statements and that are
not so reflected.

 

(b)                                 The
Parent has prepared, and has heretofore furnished to the Administrative Agent a
copy of, projected consolidated balance sheets and statements of income and
cash flows of the Parent and its Subsidiaries (consisting of balance sheets and
statements of income and cash flows prepared by the Parent on a quarterly basis
through fiscal year 2005 and on an annual basis through the end of fiscal year
2010), giving effect to the initial extensions of credit made under this
Agreement, the application of the proceeds thereof and the payment of
transaction fees and expenses related to the foregoing (the “Projections”).  In the good faith opinion of management of
the Parent, the assumptions used in the preparation of the Projections were
fair, complete and reasonable when made and continue to be fair, complete and
reasonable as of the date hereof.  The
Projections have been prepared in good faith by the executive and financial
personnel of the Parent, are complete and represent a reasonable estimate of
the future performance and financial condition of the Parent and its
Subsidiaries, subject to the uncertainties and approximations inherent in any projections.

 

(c)                                  After
giving effect to the consummation of the transactions contemplated hereby, the
Company and the Credit Parties taken as a whole (i) have capital
sufficient to carry on their businesses as conducted and as proposed to be
conducted, (ii) have assets with a fair saleable value, determined on a
going concern basis, which, together with anticipated cash flows, are
(y) not less than the amount required to pay the probable liability on
their existing debts as they become absolute and matured and (z) greater
than the total amount of their liabilities (including identified contingent
liabilities, valued at the amount that can reasonably be expected to become
absolute and matured in their ordinary course), and (iii) do not intend
to, and do not believe that

 

79

 

they will, incur debts or
liabilities beyond their ability to pay such debts and liabilities as they
mature in their ordinary course.

 

5.12                           Ownership
of Properties.  Each Credit
Party (i) has good and marketable title to all real property owned by it,
(ii) holds interests as lessee under valid leases in full force and effect
with respect to all material leased real and personal property used in
connection with its business, and (iii) has good title to all of its other
material properties and assets reflected in the most recent financial
statements referred to in Section 5.11(a)
(except as sold or otherwise disposed of since the date thereof in the ordinary
course of business), in each case free and clear of all Liens other than
Permitted Liens.  Schedule 5.12(a)
lists, as of the Closing Date, all Realty of the Parent and its Domestic
Subsidiaries, indicating in each case the identity of the owner, the address of
the property, the nature of use of the premises, and whether such interest is a
leasehold or fee ownership interest.

 

5.13                           ERISA.

 

(a)                                  Each
Credit Party and its ERISA Affiliates is in compliance with the applicable
provisions of ERISA, and each Plan is and has been administered in compliance
with all applicable Requirements of Law, including, without limitation, the
applicable provisions of ERISA and the Internal Revenue Code, in each case
except where the failure so to comply, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.  No ERISA Event (i) has occurred within
the five (5) year period prior to the Closing Date, (ii) has occurred and
is continuing, or (iii) to the knowledge of any Borrower, is reasonably
expected to occur with respect to any Plan. 
No Plan has any Unfunded Pension Liability as of the most recent annual
valuation date applicable thereto that, when added to the aggregate amount of
Unfunded Pension Liabilities with respect to all other Plans, exceeds $250,000,
and no Credit Party or any of its ERISA Affiliates has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.

 

(b)                                 No
Credit Party or any of its ERISA Affiliates has any outstanding liability on
account of a complete or partial withdrawal from any Multiemployer Plan.  No Multiemployer Plan is in “reorganization”
or is “insolvent” within the meaning of such terms under ERISA.

 

5.14                           Environmental
Matters.  Except as set forth
on Schedule 5.14 and except as,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:

 

(a)                                  No
Hazardous Substances are or have been generated, used, located, released,
treated, transported, disposed of or stored, currently or in the past,
(i) by any Credit Party or (ii) to the knowledge of any Borrower, by
any other Person (including any predecessor in interest) or otherwise, in
either case in, on, about or to or from any portion of any real property,
leased, owned or operated by any Credit Party, except in compliance with all
applicable Environmental Laws; no portion of any such real property or, to the
knowledge of any Borrower, any other real property at any time leased, owned or
operated by any Credit Party is contaminated by any Hazardous Substance; and no
portion of any real property leased, owned or operated by any Credit Party is
presently or, to the knowledge of any Borrower, has ever been, the subject of
an environmental audit, assessment or remedial action.

 

80

 

(b)                                 No
portion of any real property leased, owned or operated by any Credit Party has
been used by any Credit Party or, to the knowledge of any Borrower, by any
other Person, as or for a mine, landfill, dump or other disposal facility,
gasoline service station or bulk petroleum products storage facility; and no
portion of such real property or any other real property currently or at any
time in the past leased, owned or operated by any Credit Party has, pursuant to
any Environmental Law, been placed on the “National Priorities List” or “CERCLIS
List” (or any similar federal, state or local list) of sites subject to
possible environmental problems.

 

(c)                                  All
activities and operations of the Credit Parties are in compliance with the
requirements of all applicable Environmental Laws; each Credit Party has
obtained all licenses and permits under Environmental Laws necessary to its
respective operations, all such licenses and permits are being maintained in
good standing, and each Credit Party is in compliance with all terms and
conditions of such licenses and permits; and no Credit Party is involved in any
suit, action or proceeding, or has received any notice, complaint or other
request for information from any Governmental Authority or other Person, with
respect to any actual or alleged Environmental Claims, and to the knowledge of
any Borrower, there are no threatened Environmental Claims, nor any basis
therefor.

 

5.15                           Compliance
with Laws.  Each Credit Party
has timely filed all material reports, documents and other materials required
to be filed by it under all applicable Requirements of Law with any
Governmental Authority, has retained all material records and documents
required to be retained by it under all applicable Requirements of Law, and is
otherwise in compliance with all applicable Requirements of Law in respect of
the conduct of its business and the ownership and operation of its properties,
except in each case to the extent that the failure to comply therewith,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

 

5.16                           Intellectual
Property.  Each Credit Party
owns, or has the legal right to use, all Intellectual Property necessary for it
to conduct its business as currently conducted. 
Schedule 5.16 lists, as of the
Closing Date, all registered Intellectual Property owned by any Credit
Party.  No claim has been asserted or 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 does any Borrower know of any such claim, and to the knowledge of
any Borrower, the use of such Intellectual Property by any Credit Party does
not infringe on the known rights of any Person, except for such claims and
infringements that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

5.17                           Regulated
Industries.  No Credit Party
is (i) an “investment company,” a company “controlled” by an “investment
company,” or an “investment advisor,” within the meaning of the Investment
Company Act of 1940, as amended, or (ii) a “holding company,” 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, as amended.

 

5.18                           Insurance.
 Schedule 5.18
sets forth, as of the Closing Date, an accurate and complete list and a brief
description (including the insurer, policy number, type of insurance, coverage
limits, deductibles, expiration dates and any special cancellation conditions)
of all

 

81

 

policies of property and casualty, liability (including, but not
limited to, product liability), business interruption, workers’ compensation,
and other forms of insurance owned or held by the Parent and its Subsidiaries
or pursuant to which any of their respective assets are insured.  The assets, properties and business of the
Parent and its Subsidiaries are insured against such hazards and liabilities,
under such coverages and in such amounts, as are customarily maintained by
prudent companies similarly situated and under policies issued by insurers of
recognized responsibility.

 

5.19                           Material
Contracts.  Schedule 5.19 lists, as of the Closing Date, each
contract or other agreement to which any Credit Party is a party, by which any
Credit Party or its properties is bound or to which any Credit Party is
subject, in each case the termination or cancellation of which, or default
thereunder or breach thereof by any Credit Party, could reasonably be expected
to have a Material Adverse Effect (collectively, “Material Contracts”),
and also indicates the parties thereto. 
As of the Closing Date, (i) each Material Contract is in full force
and effect and is enforceable by each Credit Party that is a party thereto in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, by general or equitable principles or by
principles of good faith and fair dealing, and (ii) no Credit Party or, to
the knowledge of any Borrower, any other party thereto is in breach of or
default under any Material Contract in any material respect or has given notice
of termination or cancellation of any Material Contract.

 

5.20                           Deposit
Accounts.  Schedule 5.20 lists, as of the Closing Date, all
deposit accounts maintained by any Credit Party at any bank or other financial
institution located in the United States, and lists in each case the name in
which the account is held, the name of the depository institution, the type of
account and the account number.

 

5.21                           Security
Documents.

 

(a)                                  The
provisions of each of the Security Documents other than the Mortgages (whether
executed and delivered prior to or on the Closing Date or thereafter) are and
will be effective to create in favor of the Administrative Agent, for its
benefit and the benefit of the Lenders, a valid and enforceable (subject, in
the case of direct enforceability against governmental payors of Accounts owing
to the Credit Parties under the federal Medicare and Medicaid Programs, to the
restrictions imposed by the federal Social Security Act and other applicable
federal and state laws) security interest in and Lien upon all right, title and
interest of each Credit Party that is a party thereto in and to the Collateral
purported to be pledged by it thereunder and described therein, and upon
(i) the initial extension of credit hereunder, (ii) the filing of
appropriately completed Uniform Commercial Code financing statements and
continuations thereof in the jurisdictions specified therein, (iii) the
filing of appropriately completed short-form assignments in the U.S. Patent and
Trademark Office and the U.S. Copyright Office, as applicable, and
(iv) the possession by the Administrative Agent of any certificates
evidencing the securities pledged thereby, duly endorsed or accompanied by duly
executed stock powers, such security interest and Lien shall constitute a fully
perfected and first priority security interest in and Lien upon such right,
title and interest of the applicable Credit Party in and to such Collateral, to
the extent that such security interest and Lien can be perfected by such
filings, actions and possession, subject only to Permitted Liens.

 

82

 

(b)                                 The
provisions of each Mortgage (whether executed and delivered prior to or on the
Closing Date or thereafter) are and will be effective to create in favor of the
Administrative Agent, for its benefit and the benefit of the Lenders, a valid
and enforceable security interest in and Lien upon all right, title and
interest of each Credit Party that is a party thereto in and to the mortgaged
premises described therein, and upon (i) the initial extension of credit
hereunder and (ii) the filing of such Mortgage in the applicable real
property recording office, such security interest and Lien shall constitute a
fully perfected and first priority security interest in and Lien upon such
right, title and interest of such Credit Party in and to such mortgaged
premises, in each case prior and superior to the rights of any other Person and
subject only to Permitted Liens.

 

5.22                           Labor
Relations.  No Credit Party is
engaged in any unfair labor practice within the meaning of the National Labor
Relations Act of 1947, as amended.  As of
the Closing Date, there is (i) no unfair labor practice complaint before
the National Labor Relations Board, or grievance or arbitration proceeding
arising out of or under any collective bargaining agreement, pending or, to the
knowledge of any Borrower, threatened, against any Credit Party, (ii) no
strike, lock-out, slowdown, stoppage, walkout or other labor dispute pending
or, to the knowledge of any Borrower, threatened, against any Credit Party, and
(iii) to the knowledge of any Borrower, no petition for certification or
union election or union organizing activities taking place with respect to any
Credit Party.  As of the Closing Date,
there are no collective bargaining agreements or Multiemployer Plans covering
the employees of the Credit Parties.

 

5.23                           No
Burdensome Restrictions.  No
Credit Party is a party to any written agreement or instrument or subject to
any other obligations or any charter or corporate restriction or any provision
of any applicable Requirement of Law that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

 

5.24                           OFAC;
Anti-Terrorism Laws.

 

(a)                                  No
Credit Party or any Affiliate of any Credit Party (i) is a Sanctioned
Person, (ii) has more than 15% of its assets in Sanctioned Countries, or
(iii) derives more than 15% of its operating income from investments in,
or transactions with, Sanctioned Persons or Sanctioned Countries.  No part of the proceeds of any Loan hereunder
will be used directly or indirectly to fund any operations in, finance any
investments or activities in or make any payments to, a Sanctioned Person or a
Sanctioned Country.

 

(b)                                 Neither
the making of the Loans hereunder nor the use of the proceeds thereof will
violate the PATRIOT Act, the Trading with the Enemy Act, as amended, or 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.  The
Credit Parties are in compliance in all material respects with the PATRIOT Act.

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

Each
of the Parent and the Borrowers covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of

 

83

 

all
principal and interest with respect to the Loans together with all other
amounts (including any Reimbursement Obligations) then due and owing hereunder:

 

6.1                                 Financial
Statements.  The Borrowers
will deliver to the Administrative Agent and to each Lender:

 

(a)                                  As
soon as available and in any event within fifty (50) days after the end of each
of the first three fiscal quarters of each fiscal year, beginning with the
second fiscal quarter of fiscal year 2005, an unaudited consolidated balance
sheet of the Parent and its Subsidiaries as of the end of such fiscal quarter
and unaudited consolidated statements of income and cash flows for the Parent
and its Subsidiaries for the fiscal quarter then ended and for that portion of
the fiscal year then ended, in each case setting forth comparative consolidated
figures as of the end of and for the corresponding period in the preceding
fiscal year together with comparative budgeted figures for the fiscal year then
ended, all in reasonable detail and prepared in accordance with GAAP (subject
to the absence of notes required by GAAP and subject to normal year-end
adjustments) applied on a basis consistent with that of the preceding quarter
or containing disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such quarter; and

 

(b)                                 As
soon as available and in any event within 100 days after the end of each fiscal
year, beginning with fiscal year 2005, an audited consolidated balance sheet of
the Parent and its Subsidiaries as of the end of such fiscal year and the
related audited consolidated statements of income, cash flows and stockholders’
equity for the Parent and its Subsidiaries for the fiscal year then ended,
including the notes thereto, in each case setting forth comparative figures as
of the end of and for the preceding fiscal year together with comparative
budgeted figures for the fiscal year then ended, all in reasonable detail and
(with respect to the audited statements) certified by Ernst & Young LLP or
another independent certified public accounting firm of recognized national
standing reasonably acceptable to the Administrative Agent, together with a
report thereon by such accountants that is not qualified as to going concern or
scope of audit and to the effect that such financial statements present fairly
in all material respects the consolidated financial condition and results of
operations of the Parent and its Subsidiaries as of the dates and for the
periods indicated in accordance with GAAP applied on a basis consistent with
that of the preceding year or containing disclosure of the effect on the
financial condition or results of operations of any change in the application
of accounting principles and practices during such year.

 

6.2                                 Other
Business and Financial Information. 
The Borrowers will deliver to the Administrative Agent and each Lender:

 

(a)                                  Concurrently
with each delivery of the financial statements described in Sections 6.1(a) and 6.1(b),
a Compliance Certificate with respect to the period covered by the financial
statements being delivered thereunder, executed by a Financial Officer of the
Parent, together with a Covenant Compliance Worksheet reflecting the
computation of the financial covenants set forth in Article VII
as of the last day of the period covered by such financial statements;

 

84

 

(b)                                 Concurrently
with each delivery of the financial statements described in Section 6.1(b), a certificate executed by a Financial
Officer of the Parent in form and substance reasonably satisfactory to the
Administrative Agent and setting forth the calculation of Excess Cash Flow for
such fiscal year (provided that such certificate shall not be required
if no Excess Cash Flow payment with respect to such fiscal year is required
under Section 2.6(g));

 

(c)                                  As
soon as available and in any event within thirty (30) days after the
commencement of each fiscal year, beginning with the 2006 fiscal year, a
consolidated operating budget for the Parent and its Subsidiaries for such
fiscal year (prepared on a quarterly basis), consisting of a consolidated
balance sheet and consolidated statements of income and cash flows, together
with a certificate of a Financial Officer of the Parent to the effect that such
budget has been prepared in good faith based on estimates and assumptions
believed to be reasonable; and as soon as available from time to time
thereafter, any modifications or revisions to or restatements of such budget;

 

(d)                                 Promptly
upon receipt thereof, copies of any “management letter” submitted to the Parent
or any of its Subsidiaries by its certified public accountants in connection
with each annual, interim or special audit, and promptly upon completion
thereof, any response reports from the Parent or any such Subsidiary in respect
thereof;

 

(e)                                  Promptly
upon the sending, filing or receipt thereof, copies of (i) all financial
statements, reports, notices and proxy statements that the Parent shall send or
make available generally to its shareholders, (ii) all regular, periodic
and special reports, registration statements and prospectuses (other than on
Form S-8) that any Credit Party shall render to or file with the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc. or
any national securities exchange, and (iii) all press releases and other
statements made available generally by the Parent to the public concerning
material developments in the business of the Parent and its Subsidiaries;

 

(f)                                    Promptly
upon (and in any event within five (5) Business Days after) any Responsible
Officer of any Credit Party obtaining knowledge thereof, written notice of any
of the following:

 

(i)                                     the
occurrence of any Default or Event of Default, together with a written
statement of a Responsible Officer of the Parent specifying the nature of such
Default or Event of Default, the period of existence thereof and the action
that the Parent has taken and proposes to take with respect thereto;

 

(ii)                                  the
institution or threatened institution of any action, suit, investigation or
proceeding against or affecting any Credit Party, including any such
investigation or proceeding by any Governmental Authority (other than routine
periodic inquiries, investigations or reviews), that, if adversely determined,
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, and any material development in any litigation or
other proceeding previously reported pursuant to Section 5.5
or this Section 6.2(f)(ii);

 

85

 

(iii)                               the
receipt by any Credit Party from any Governmental Authority of (A) any
notice asserting any failure by any Credit Party to be in compliance with
applicable Requirements of Law or that threatens the taking of any action against
any Credit Party or sets forth circumstances that, if taken or adversely
determined, could reasonably be expected to have a Material Adverse Effect, or
(B) any notice of any actual or threatened suspension, limitation or
revocation of, failure to renew, or imposition of any restraining order, escrow
or impoundment of funds in connection with, any license, permit, accreditation
or authorization of any Credit Party, where such action could reasonably be
expected to have a Material Adverse Effect;

 

(iv)                              the
occurrence of any ERISA Event, together with (x) a written statement of a
Responsible Officer of the Parent specifying the details of such ERISA Event
and the action that the applicable Credit Party has taken and proposes to take
with respect thereto, (y) a copy of any notice with respect to such ERISA
Event that may be required to be filed with the PBGC and (z) a copy of any
notice delivered by the PBGC to any Credit Party or an ERISA Affiliate with
respect to such ERISA Event;

 

(v)                                 the
occurrence of any material default under, or any proposed or threatened
termination or cancellation of, any Material Contract or other material
contract or agreement to which any Credit Party is a party, the default under
or termination or cancellation of which could reasonably be expected to have a
Material Adverse Effect;

 

(vi)                              the
occurrence of any of the following: (x) the assertion of any Environmental
Claim against or affecting any Credit Party or any real property leased,
operated or owned by any Credit Party, or any Credit Party’s discovery of a
basis for any such Environmental Claim; (y) the receipt by any Credit
Party of notice of any alleged violation of or noncompliance with any
Environmental Laws or release of any Hazardous Substance; or (z) the
taking of any investigation, remediation or other responsive action by any
Credit Party or any other Person in response to the actual or alleged violation
of any Environmental Law by any Credit Party or generation, storage, transport,
release, disposal or discharge of any Hazardous Substances on, to, upon or from
any real property leased, operated or owned by any Credit Party; but in each
case under clauses (x), (y) and (z) above, only to the extent the same
could reasonably be expected to have a Material Adverse Effect; and

 

(vii)                           any
other matter or event that has, or could reasonably be expected to have, a
Material Adverse Effect, together with a written statement of a Responsible
Officer of the Parent setting forth the nature and period of existence thereof
and the action that the affected Credit Parties have taken and propose to take
with respect thereto; and

 

(g)                                 As
promptly as reasonably possible, such other information about the business,
condition (financial or otherwise), operations or properties of any Credit
Party as the Administrative Agent or any Lender may from time to time
reasonably request.

 

6.3                                 Existence;
Franchises; Maintenance of Properties.  Each of the Parent and the Borrowers will,
and will cause each of its Subsidiaries to, (i) maintain and preserve in
full force

 

86

 

and effect its legal existence, except as expressly permitted otherwise
by Section 8.1, (ii) obtain,
maintain and preserve in full force and effect all other rights, franchises,
licenses, permits, certifications, approvals and authorizations required by
Governmental Authorities and necessary to the ownership, occupation or use of
its properties or the conduct of its business, except to the extent the failure
to do so could not reasonably be expected to have a Material Adverse Effect,
and (iii) keep all material properties in good working order and condition
(normal wear and tear and damage by casualty excepted) and from time to time
make all necessary repairs to and renewals and replacements of such properties,
except to the extent that any of such properties are obsolete or are being
replaced or, in the good faith judgment of the Company, are no longer useful or
desirable in the conduct of the business of the Credit Parties.

 

6.4                                 Compliance
with Laws.  Each of the Parent
and the Borrowers will, and will cause each of its Subsidiaries to, comply in
all respects with all Requirements of Law applicable in respect of the conduct
of its business and the ownership and operation of its properties, except to
the extent the failure so to comply could not reasonably be expected to have a
Material Adverse Effect.

 

6.5                                 Payment
of Obligations.  Each of the
Parent and the Borrowers will, and will cause each of its Subsidiaries to,
(i) pay, discharge or otherwise satisfy at or before maturity all
liabilities and obligations as and when due (subject to any applicable
subordination, grace and notice provisions), except to the extent failure to do
so could not reasonably be expected to have a Material Adverse Effect, and
(ii) pay and discharge all taxes, assessments and governmental charges or
levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, would become a Lien (other than a Permitted
Lien) upon any of the properties of any Credit Party; provided, however,
that no Credit Party shall be required to pay any such liability, obligation,
tax, assessment, charge, levy or claim that is being contested in good faith
(and by appropriate proceedings, except with respect to non-governmental claims
not exceeding $250,000 in the aggregate at any time) and as to which such
Credit Party is maintaining adequate reserves with respect thereto in accordance
with GAAP.

 

6.6                                 Insurance.  Each of the Parent and the Borrowers will,
and will cause each of its Subsidiaries to, maintain with financially sound and
reputable insurance companies insurance with respect to its assets, properties
and business, against such hazards and liabilities, of such types and in such
amounts, as is customarily maintained by companies in the same or similar
businesses similarly situated, and maintain such other or additional insurance
on such terms and subject to such conditions as may be required under any
Security Document.

 

6.7                                 Maintenance
of Books and Records; Inspection. 
Each of the Parent and the Borrowers will, and will cause each of its
Subsidiaries to, (i) maintain adequate books, accounts and records, in
which full, true and correct entries shall be made of all financial
transactions in relation to its business and properties in accordance with
sound business practices sufficient to permit the preparation of financial
statements required under this Agreement in accordance with GAAP, and in
compliance with the requirements of any Governmental Authority having
jurisdiction over it, and prepare all financial statements required under this
Agreement, in accordance with GAAP, and (ii) permit employees or agents of
the Administrative Agent or any Lender to visit and inspect its properties and
examine or audit its books, records, working papers

 

87

 

and accounts and make
copies and memoranda of them, and to discuss its affairs, finances and accounts
with its officers and employees and, upon notice to the Parent, the independent
public accountants of the Parent and its Subsidiaries (and by this provision
the Parent authorizes such accountants to discuss the finances and affairs of
the Parent and its Subsidiaries, provided that the Parent shall be
entitled to be present at any such discussions), all at such times and from
time to time, upon reasonable notice and during business hours, as may be
reasonably requested.

 

6.8                                 [Reserved.]

 

6.9                                 Permitted
Acquisitions.  In addition to
the requirements contained in the definition of Permitted Acquisition and in
the other applicable terms and conditions of this Agreement, the Borrowers
shall, with respect to any Permitted Acquisition, comply with, and cause each
other applicable Credit Party to comply with, the following covenants:

 

(a)                                  Not
less than ten (10) Business Days prior to the consummation of any
Permitted Acquisition having an Acquisition Amount of $15,000,000 or more, the
Borrowers shall have delivered to the Administrative Agent and each Lender the
following:

 

(i)                                     a
reasonably detailed description of the material terms of such Permitted
Acquisition (including, without limitation, the purchase price and method and
structure of payment) and of each Person or business that is the subject of
such Permitted Acquisition (each, a “Target”);

 

(ii)                                  historical
financial statements of the Target (or, if there are two or more Targets that
are the subject of such Permitted Acquisition and that are part of the same
consolidated group, consolidated historical financial statements for all such
Targets) for the two (2) most recent fiscal years available and, if
available, for any interim periods since the most recent fiscal year-end;

 

(iii)                               consolidated
projected income statements of the Parent and its Subsidiaries (giving effect
to such Permitted Acquisition and the consolidation of each relevant Target)
for the three-year period following the consummation of such Permitted
Acquisition, in reasonable detail, together with any appropriate statement of
assumptions and pro forma adjustments; provided that the requirements of
this clause (iii) shall not apply in the case of any Permitted Acquisition
having an Acquisition Amount of less than $25,000,000;

 

(iv)                              with
respect to any such Permitted Acquisition in which any Contingent Purchase
Price Obligations or Seller Subordinated Indebtedness shall be incurred by any
Borrower or any other Credit Party, a copy of the most recent draft of the
acquisition agreement (including schedules and exhibits thereto, to the extent
available) and other material documents (including the documentation evidencing
such Contingent Purchase Price Obligations or Seller Subordinated
Indebtedness); provided that the requirements of this clause (iv)
shall not apply in the case of any Permitted Acquisition having an Acquisition
Amount of less than $25,000,000; and

 

(v)                                 a
certificate, in form and substance reasonably satisfactory to the
Administrative Agent, executed by a Financial Officer of the Company setting
forth the

 

88

 

Acquisition Amount (including the calculation of any
Contingent Purchase Price GAAP Amount constituting part of such Acquisition
Amount and any Contingent Purchase Price Reserve Amount associated with such
Permitted Acquisition) and further to the effect that, to the best of such
Financial Officer’s knowledge the consummation of such Permitted Acquisition
will not result in a violation of any provision of this Section 6.9
or any other provision of this Agreement, and after giving effect to such
Permitted Acquisition and any Borrowings made in connection therewith, the
Company will be in compliance with the financial covenants contained in Article VII, such compliance determined with regard to
calculations made on a pro forma basis for the Reference Period most recently
ended, calculated in accordance with GAAP as if each such Target had been
consolidated with the Company for those periods applicable to such covenants
(such calculations to be attached to the certificate using the Covenant
Compliance Worksheet).

 

(b)                                 As
soon as reasonably practicable after the consummation of any Permitted
Acquisition having an Acquisition Amount of $2,500,000 or more, the Borrowers
will notify the Administrative Agent and the Lenders of such Permitted
Acquisition and will deliver (i) to the Administrative Agent and each
Lender, in the case of any Permitted Acquisition having an Acquisition Amount
of $2,500,000 or more but less than $15,000,000, the certificate and
calculations described in clause (v) of Section 6.9(a),
and (ii) to the Administrative Agent or any Lender, upon its request
therefor, true and correct copies of the fully executed acquisition agreement
(including schedules and exhibits thereto) and other material documents and
closing papers delivered in connection therewith.

 

(c)                                  The
consummation of each Permitted Acquisition shall be deemed to be a
representation and warranty by the Company that (except as shall have been
approved in writing by the Required Lenders) all conditions thereto set forth
in this Section 6.9 and in the description
furnished under Section 6.9(a)(i) have been
satisfied, that the same is permitted in accordance with the terms of this
Agreement, and that the matters certified to by the Financial Officer of the
Company in the certificate referred to in Section 6.9(a)(v)
are, to the best of such Financial Officer’s knowledge, true and correct in all
material respects as of the date such certificate is given, which representation
and warranty shall be deemed to be a representation and warranty as of the date
thereof for all purposes hereunder, including, without limitation, for purposes
of Sections 4.2 and 9.1.

 

6.10                           Creation
or Acquisition of Subsidiaries. 
Subject to the provisions of Section 8.5,
the Company may from time to time create or acquire new Wholly Owned
Subsidiaries in connection with Permitted Acquisitions or otherwise, and the
Wholly Owned Subsidiaries of the Company may create or acquire new Wholly Owned
Subsidiaries, provided that:

 

(a)                                  Concurrently
with (and in any event within ten (10) Business Days after) the creation or
direct or indirect acquisition by the Company thereof, each such new Subsidiary
will execute and deliver to the Administrative Agent (i) a joinder to the
Guaranty Agreement, pursuant to which such new Subsidiary shall become a
guarantor thereunder and shall guarantee the payment in full of the Obligations
of the Borrowers under this Agreement and the other Credit Documents, and (ii) a
joinder to the Security Agreement, pursuant to which such new Subsidiary shall
become a party thereto and shall grant to the Administrative Agent a first

 

89

 

priority Lien upon and
security interest in its accounts receivable, inventory, equipment, general
intangibles and other personal property as Collateral for its obligations under
the Guaranty Agreement, subject only to Permitted Liens;

 

(b)                                 Concurrently
with (and in any event within ten (10) Business Days after) the creation or
acquisition of any new Subsidiary all or a portion of the Capital Stock of
which is directly owned by the Company, the Company will execute and deliver to
the Administrative Agent an amendment or supplement to the Pledge Agreement pursuant
to which all of the Capital Stock of such new Subsidiary owned by the Company
shall be pledged to the Administrative Agent, together with the certificates
evidencing such Capital Stock and undated stock powers duly executed in blank;
and concurrently with (and in any event within ten (10) Business Days after)
the creation or acquisition of any new Subsidiary all or a portion of the
Capital Stock of which is directly owned by another Subsidiary, the parent
Subsidiary will execute and deliver to the Administrative Agent an appropriate
joinder, amendment or supplement to the Pledge Agreement, pursuant to which all
of the Capital Stock of such new Subsidiary owned by such parent Subsidiary
shall be pledged to the Administrative Agent, together with the certificates
evidencing such Capital Stock and undated stock powers duly executed in blank;

 

(c)                                  As
promptly as reasonably possible, the Company and its Subsidiaries will deliver
any such other documents, certificates and opinions (including opinions of
counsel, certified copies of its organizational documents, resolutions, lien
searches and other customary items), in form and substance reasonably
satisfactory to the Administrative Agent, as the Administrative Agent or the
Required Lenders may reasonably request in connection therewith and will take
such other action as the Administrative Agent may reasonably request to create
in favor of the Administrative Agent a perfected security interest in the
Collateral being pledged pursuant to the documents described above; and

 

(d)                                 Notwithstanding
the foregoing, with respect to any Foreign Subsidiary, (i) the Capital
Stock of such Foreign Subsidiary shall be required to be pledged only if such
Foreign Subsidiary is both a First-Tier Foreign Subsidiary and a Material Foreign
Subsidiary, and in any event such pledge shall not exceed sixty-five percent
(65%) of the voting Capital Stock of such Foreign Subsidiary, unless and to the
extent that the pledge of greater than sixty-five percent (65%) of the voting
Capital Stock of such Foreign Subsidiary would not cause any adverse tax
consequences to the Company (other than that which would be de minimis), and
(ii) such Foreign Subsidiary shall not be required to become a Subsidiary
Guarantor or become a party to the Security Agreement (and the documents,
certificates, opinions and other items required under Section 6.10(c)
shall not be required with respect to such Foreign Subsidiary) if (y) such
Foreign Subsidiary is not a Material Foreign Subsidiary or (z) doing so
would cause adverse tax consequences to the Company (other than that which
would be de minimis); provided that in the event any Foreign Subsidiary
that is not initially a Material Foreign Subsidiary subsequently becomes a
Material Foreign Subsidiary, such Foreign Subsidiary shall be subject to the
requirements of this Section 6.10
(subject to the limitations set forth in this Section 6.10(d));
and provided  further that if at any time all First-Tier Foreign
Subsidiaries whose Capital Stock is not pledged to the Administrative Agent
represent at such time (together with their respective direct and indirect
Subsidiaries, on a consolidated basis) 15% or more of the of the consolidated
revenues or the total assets of the Parent and its Subsidiaries taken as a
whole, then the Company

 

90

 

shall pledge or cause to
be pledged to the Administrative Agent the Capital Stock of one or more such
First-Tier Foreign Subsidiaries (irrespective of whether any such First-Tier
Foreign Subsidiary is a Material Foreign Subsidiary, but subject to the 65%
limitation set forth in this Section 6.10(d),
unless and to the extent that the pledge of greater than sixty-five percent
(65%) of the voting Capital Stock of such Foreign Subsidiary would not cause
any adverse tax consequences to the Company (other than that which would be de
minimis)) to the extent necessary to reduce such percentage below 15%.

 

6.11                           Additional
Security.  Each of the Parent
and the Borrowers will, and will cause each of its Subsidiaries to, grant to
the Administrative Agent, for the benefit of the Lenders, from time to time
security interests, mortgages and other Liens in and upon such of its assets
and properties as are not covered by the Security Documents executed and
delivered on the Closing Date or pursuant to Section 6.10
and as may be reasonably requested from time to time by the Required Lenders
(including, without limitation, a Mortgage with respect to owned interests in
real property but excluding leased real property), but subject to the proviso
at the end of Section 6.10.  Such security interests, mortgages and Liens
shall be granted pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent and shall constitute valid and
perfected security interests and Liens, subject to no Liens other than
Permitted Liens.  Without limitation of
the foregoing, in connection with the grant of any Mortgage, the Company will,
and will cause each applicable Subsidiary to, at the Company’s expense, prepare,
obtain and deliver to the Administrative Agent any environmental assessments,
appraisals, surveys, title insurance and other matters or documents as the
Administrative Agent may reasonably request or as may be required under
applicable banking laws and regulations.

 

6.12                           Environmental
Laws.  Each of the Parent and
the Borrowers will, and will cause each of its Subsidiaries to, (i) comply
in all material respects with, and use commercially reasonable efforts to
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in all
material respects with and maintain, and use commercially reasonable efforts to
ensure that all tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws, except to
the extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect, and (ii) 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 or to the extent the failure to conduct
or complete any of the foregoing could not reasonably be expected to have a
Material Adverse Effect.

 

6.13                           OFAC,
PATRIOT Act Compliance.  Each
of the Parent and the Borrowers will, and will cause each of its Subsidiaries
to, (i) refrain from doing business in a Sanctioned Country or with a
Sanctioned Person in violation of the economic sanctions of the United States
administered by OFAC, and (ii) provide, to the extent commercially
reasonable, such information and take such actions as are reasonably requested
by the Administrative Agent or any Lender in order to assist the Administrative
Agent and the Lenders in maintaining compliance with the PATRIOT Act.

 

91

 

6.14                           Further
Assurances.  Each of the
Parent and Borrowers will, and will cause each of its Subsidiaries to, make,
execute, endorse, acknowledge and deliver any amendments, modifications or
supplements hereto and restatements hereof and any other agreements,
instruments or documents, and take any and all such other actions, as may from
time to time be reasonably requested by the Administrative Agent or the
Required Lenders to perfect and maintain the validity and priority of the Liens
granted pursuant to the Security Documents and to effect, confirm or further
assure or protect and preserve the interests, rights and remedies of the
Administrative Agent and the Lenders under this Agreement and the other Credit
Documents.

 

6.15                           Post-Closing
Matters.

 

(a)                                  Unless
otherwise agreed by the Administrative Agent in writing, in the event the
Company relocates its corporate headquarters to a new leased facility, the
Company will use commercially reasonable efforts to obtain a landlord agreement
from the landlord of such facility within sixty (60) days after the Company
takes occupancy.

 

(b)                                 Unless
otherwise agreed by the Administrative Agent in writing, within ninety (90)
days after the Closing Date, the Company shall have executed and delivered to
the Administrative Agent a pledge agreement effective under German law to
pledge to the Administrative Agent 65% of the voting Capital Stock of dj
Orthopedics Deutschland GmbH, together with an opinion of German counsel and
such other documents and certificates as the Administrative Agent shall
reasonably request, all in form and substance satisfactory to the
Administrative Agent.

 

(c)                                  Unless
otherwise agreed by the Administrative Agent in writing, within ninety (90)
days after the Closing Date, the Company shall have executed and delivered to
the Administrative Agent a Pledge Agreement Without Transmission of Possession
(Contrato de Prenda sin Transmision de Posesión)
(or an amendment to the existing pledge agreement) with respect to the
equipment and inventory of the Company located in Mexico, together with an
opinion of Mexican counsel and such other documents and certificates as the Administrative
Agent shall reasonably request, all in form and substance satisfactory to the
Administrative Agent.

 

ARTICLE VII

 

FINANCIAL
COVENANTS

 

The
Company covenants and agrees that, until the termination of the Commitments,
the termination or expiration of all Letters of Credit and the payment in full
of all principal and interest with respect to the Loans together with all other
amounts (including any Reimbursement Obligations) then due and owing hereunder:

 

7.1                                 Total
Leverage Ratio.  The Company
will not permit the Total Leverage Ratio as of the last day of any fiscal
quarter, beginning with the second fiscal quarter of fiscal year 2005, to be
greater than 2.75 to 1.0.

 

92

 

7.2                                 Fixed
Charge Ratio.  The Company
will not permit the Fixed Charge Coverage Ratio as of the last day of any
fiscal quarter, beginning with the second fiscal quarter of fiscal year 2005,
to be less than 1.5 to 1.0.

 

ARTICLE VIII

 

NEGATIVE
COVENANTS

 

Each
of the Parent and the Borrowers covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to
the Loans together with all other amounts (including any Reimbursement
Obligations) then due and owing hereunder:

 

8.1                                 Merger;
Consolidation.  Each of the
Parent and the Borrowers will not, and will not permit or cause any of its
Subsidiaries to, liquidate, wind up or dissolve, or enter into any
consolidation, merger or other combination, or agree to do any of the
foregoing; provided, however, that:

 

(i)                                     any
Wholly Owned Subsidiary of the Company that is a Domestic Subsidiary may merge
or consolidate with, or be liquidated into, (x) the Company (so long as
the Company is the surviving or continuing entity), (y) any other Wholly
Owned Subsidiary that is a Domestic Subsidiary (so long as the surviving or
continuing entity is a Subsidiary Guarantor), or (z) another Person (other
than another Credit Party), so long as (A) the surviving or continuing
entity is a Subsidiary Guarantor and (B) such merger or consolidation
constitutes a Permitted Acquisition and the applicable conditions and
requirements of Sections 6.9 and 6.10 are satisfied, and in each case so long as no Default
or Event of Default has occurred and is continuing or would result therefrom;

 

(ii)                                  any
Wholly Owned Subsidiary of the Company that is a Foreign Subsidiary may merge
or consolidate with, or be liquidated into, (x) the Company (so long as
the Company is the surviving or continuing entity), (y) any other Wholly
Owned Subsidiary that is a Foreign Subsidiary (so long as, if either
constituent entity is a Foreign Borrower, the surviving or continuing entity is
a Foreign Borrower), or (z) another Person (other than another Credit
Party), so long as (A) if either constituent entity is a Foreign Borrower,
the surviving or continuing entity is a Foreign Borrower and (B) such
merger or consolidation constitutes a Permitted Acquisition and the applicable
conditions and requirements of Sections 6.9
and 6.10 are satisfied, and in each case so
long as no Default or Event of Default has occurred and is continuing or would
result therefrom;

 

(iii)                               the
Company may merge or consolidate with (y) a Wholly Owned Subsidiary of the
Company as permitted under Sections 8.1(i)
and 8.1(ii) or (z) another Person
(other than another Credit Party), so long as (A) the Company is the
surviving or continuing entity and (B) such merger or consolidation
constitutes a Permitted Acquisition and the applicable conditions and
requirements of Sections 6.9 and 6.10 are satisfied, and in each case so long as no Default
or Event of Default has occurred and is continuing or would result therefrom;
and

 

93

 

(iv)                              any
Subsidiary that is not a Subsidiary Guarantor or a Borrower may merge into or
consolidate with, or be liquidated into, any other Subsidiary that is not a
Subsidiary Guarantor or a Borrower.

 

8.2                                 Indebtedness.
 Each of the Parent and the Borrowers
will not, and will not permit or cause any of its Subsidiaries to, create,
incur, assume or suffer to exist any Indebtedness other than (without
duplication):

 

(i)                                     Indebtedness
of the Credit Parties in favor of the Administrative Agent and the Lenders
incurred under this Agreement and the other Credit Documents;

 

(ii)                                  accrued
expenses (including salaries, accrued vacation and other compensation), current
trade or other accounts payable and other current liabilities arising in the
ordinary course of business and not incurred through the borrowing of money, in
each case above to the extent constituting Indebtedness;

 

(iii)                               Indebtedness
of the Company and its Subsidiaries incurred solely to finance the acquisition,
construction or improvement of any equipment, real property or other fixed
assets in the ordinary course of business (or assumed or acquired by the
Company and its Subsidiaries in connection with a Permitted Acquisition or
other transaction permitted under this Agreement), including Indebtedness in
respect of Capital Lease Obligations, and any renewals, replacements,
refinancings or extensions thereof, provided that all such Indebtedness
shall not exceed $20,000,000 in aggregate principal amount outstanding at any
one time;

 

(iv)                              unsecured
loans and advances (A) by the Company or any Subsidiary to any Subsidiary
Guarantor, (B) by any Subsidiary to the Company, or (C) by the
Company or any Subsidiary to any Subsidiary that is not a Subsidiary Guarantor,
provided in each case that any such loan or advance is subordinated in
right and time of payment to the Obligations and is evidenced by a promissory
note, in form and substance reasonably satisfactory to the Administrative Agent
and pledged to the Administrative Agent pursuant to the Security Documents, and
provided  further that all such loans and advances made pursuant
to clause (C) above to Subsidiaries (including Foreign Subsidiaries) that
are not Subsidiary Guarantors shall be subject to the limitations on
Investments set forth in Section 8.5;

 

(v)                                 Indebtedness
of the Credit Parties under Hedge Agreements entered into in the ordinary
course of business to manage existing or anticipated interest rate or foreign
currency risks and not for speculative purposes;

 

(vi)                              Indebtedness
existing on the Closing Date and described in Schedule 8.2
and any renewals, replacements, refinancings or extensions of any such
Indebtedness that do not increase the outstanding principal amount thereof or
result in an earlier final maturity date or decreased weighted average life
thereof;

 

(vii)                           Indebtedness
consisting of Guaranty Obligations of any Credit Party incurred in the ordinary
course of business for the benefit of another Credit Party, provided
that the primary obligation being guaranteed is expressly permitted by this

 

94

 

Agreement, and provided  further that any
Guaranty Obligations of the Parent, any Borrower or any Subsidiary Guarantor of
obligations of a Subsidiary that is not a Subsidiary Guarantor shall be subject
to the limitations on Investments set forth in Section 8.5;

 

(viii)                        unsecured
Indebtedness issued after the Closing Date by the Company or any of its
Subsidiaries to sellers in connection with Permitted Acquisitions (including
Indebtedness consisting of Contingent Purchase Price Obligations), in an
aggregate principal amount not exceeding $20,000,000 outstanding at any time, provided
that such Indebtedness (A) is fully subordinated in right and time of
payment to the Obligations on terms and conditions reasonably acceptable to the
Administrative Agent, and (B) shall have covenants and undertakings that
are no more restrictive than those contained herein and shall not be
cross-defaulted to this Agreement (but may be cross-accelerated) (the Indebtedness
described in this paragraph, “Seller Subordinated Indebtedness”); and
Guaranty Obligations of the Parent in respect of Seller Subordinated
Indebtedness permitted hereunder, provided that such Guaranty
Obligations comply with clauses (A) and (B) above;

 

(ix)                                Indebtedness
that may be deemed to exist pursuant to any performance bond, surety, statutory
appeal or similar obligation entered into or incurred by the Company or any of
its Subsidiaries in the ordinary course of business;

 

(x)                                   Indebtedness
of the Parent and its Subsidiaries arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business, provided that such Indebtedness is
extinguished within five Business Days of its incurrence;

 

(xi)                                Indebtedness
of Foreign Subsidiaries of the Company under working capital and other local
credit arrangements in an aggregate principal amount outstanding at any time
not exceeding $5,000,000 for any such Foreign Subsidiary and $15,000,000 in the
aggregate for all Foreign Subsidiaries, and any Guaranty Obligations of the
Parent or the Company in respect thereof; and

 

(xii)                             other
unsecured Indebtedness of the Company and its Domestic Subsidiaries not
exceeding $20,000,000 in aggregate principal amount outstanding at any time.

 

8.3                                 Liens.  Each of the Parent and the Borrowers will
not, and will not permit or cause any of its Subsidiaries to, directly or
indirectly, make, create, incur, assume or suffer to exist, any Lien upon or
with respect to any part of its property or assets, whether now owned or
hereafter acquired, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien with
respect to any such property, asset, income or profits under the Uniform
Commercial Code of any state or under any similar recording or notice statute,
or agree to do any of the foregoing, other than the following (collectively, “Permitted
Liens”):

 

95

 

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

 

(ii)                                  Liens
in existence on the Closing Date and set forth on Schedule 8.3,
and any extensions, renewals or replacements thereof; provided that any
such extension, renewal or replacement Lien shall be limited to all or a part
of the property that secured the Lien so extended, renewed or replaced (plus
any improvements on such property) and shall secure only those obligations that
it secures on the date hereof (and any renewals, replacements, refinancings or
extensions of such obligations that do not increase the outstanding principal
amount thereof);

 

(iii)                               Liens
imposed by law, such as Liens of carriers, warehousemen, mechanics, materialmen
and landlords, incurred in the ordinary course of business for sums not
constituting borrowed money that are not overdue for a period of more than
sixty (60) days or that are being contested in good faith (and by appropriate
proceedings, except with respect to claims not exceeding $250,000 in the
aggregate at any time) and for which adequate reserves have been established in
accordance with GAAP (if so required);

 

(iv)                              Liens
(other than any Lien imposed by ERISA, the creation or incurrence of which
would result in an Event of Default under Section 9.1(j))
incurred in the ordinary course of business in connection with worker’s
compensation, unemployment insurance or other forms of governmental insurance
or benefits, or to secure the performance of letters of credit, customs bonds,
bids, tenders, statutory obligations, indemnity, surety and appeal bonds,
leases, public or statutory obligations, contracts and other similar
obligations (other than obligations for borrowed money) entered into in the
ordinary course of business;

 

(v)                                 Liens
for taxes, assessments or other governmental charges or statutory obligations
that are not delinquent or remain payable without any penalty or that are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP (if so required);

 

(vi)                              any
attachment or judgment Lien not constituting an Event of Default under Section 9.1(h);

 

(vii)                           Liens
securing the Indebtedness permitted under Section 8.2(iii),
provided that (x) any such Lien shall attach to the property being
acquired, constructed or improved with such Indebtedness concurrently with or
within one hundred eighty (180) days after the acquisition (or completion of
construction or improvement) or the refinancing thereof by the Company or such
Subsidiary, (y) the amount of the Indebtedness secured by such Lien shall
not exceed 100% of the cost to the Company or such Subsidiary of acquiring,
constructing or improving the property and any other assets then being financed
solely by the same financing source, and (z) any such Lien shall not
encumber any other property of the Company or any of its Subsidiaries except
assets then being financed solely by the same financing source and proceeds
thereof;

 

96

 

(viii)                        customary
rights of set-off, revocation, refund or chargeback under deposit agreements or
under the Uniform Commercial Code of banks or other financial institutions
where the Parent or any of its Subsidiaries maintains deposits (other than
deposits intended as cash collateral) in the ordinary course of business;

 

(ix)                                Liens
that arise in favor of banks under Article 4 of the Uniform Commercial Code on
items in collection and the documents relating thereto and proceeds thereof;

 

(x)                                   Liens
arising from the filing (for notice purposes only) of UCC-1 financing
statements (or equivalent filings, registrations or agreements in foreign
jurisdictions) in respect of true leases otherwise permitted hereunder;

 

(xi)                                with
respect to any Realty occupied by the Parent or any of its Subsidiaries,
(a) all easements, rights of way, reservations, licenses, encroachments,
variations and similar restrictions, charges and encumbrances on title that do
not secure monetary obligations and do not materially impair the use of such
property for its intended purposes or the value thereof, and (b) any other
Lien or exception to coverage described in mortgagee policies of title
insurance issued in favor of and accepted by the Administrative Agent;

 

(xii)                             any
leases, subleases, licenses or sublicenses granted by the Company or any of its
Subsidiaries to third parties in the ordinary course of business and not
interfering in any material respect with the business of the Company and its
Subsidiaries, and any interest or title of a lessor, sublessor, licensor or
sublicensor under any lease or license permitted under this Agreement;

 

(xiii)                          Liens
on the assets of Foreign Subsidiaries, securing Indebtedness of such Foreign
Subsidiaries permitted under Section 8.2(xi);
and

 

(xiv)                         other
Liens securing obligations not exceeding $1,000,000 in aggregate principal
amount outstanding at any time.

 

8.4                                 Asset
Dispositions.  Each of the
Parent and the Borrowers will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, make or agree to make any Asset
Disposition except for:

 

(i)                                     the
sale or other disposition of inventory and Cash Equivalents in the ordinary
course of business;

 

(ii)                                  the
sale, exchange or other disposition in the ordinary course of business of
equipment or other capital assets no longer used or useful in the business of
the Company and its Subsidiaries;

 

(iii)                               the
sale or other disposition of assets pursuant to any Casualty Event, provided
any Net Cash Proceeds therefrom are be reinvested or applied to the prepayment
of the Loans in accordance with the provisions of Section 2.6(e);

 

97

 

(iv)                              the
sale, lease, transfer or other disposition of assets by the Company or any
Subsidiary of the Company to the Company or to a Subsidiary Guarantor (or by
any Subsidiary that is not a Subsidiary Guarantor to another Subsidiary that is
not a Subsidiary Guarantor), in each case so long as no Event of Default shall
have occurred and be continuing or would result therefrom; and

 

(v)                                 the
sale or other disposition of assets (other than the Capital Stock of
Subsidiaries) outside the ordinary course of business for fair value and for
consideration at least 66-2/3% of which consists of cash or Cash Equivalents, provided
that (x) the aggregate amount of Net Cash Proceeds from all such sales or
dispositions that are consummated during any fiscal year shall not exceed
$5,000,000, (y) such Net Cash Proceeds shall, to the extent required
hereunder, be reinvested or applied to the prepayment of the Loans in
accordance with the provisions of Section 2.6(f),
and (z) no Default or Event of Default shall have occurred and be
continuing or would result therefrom. 
For purposes of this Section 8.4,
the following shall be deemed to be cash: 
(a) the assumption of any liabilities of the Company or any
Subsidiary Guarantor with respect to, and the release of the Company or such
Subsidiary Guarantor from all liability in respect of, any Indebtedness of the
Company or the Subsidiaries permitted hereunder (in the amount of such
Indebtedness) that is due and payable within one year of the consummation of
such disposition and (b) securities received by the Company or any
Subsidiary Guarantor from the transferee that are immediately convertible into
cash without breach of their terms or the agreement pursuant to which they were
purchased and that are promptly converted by the Company or such Subsidiary
Guarantor into cash.

 

8.5                                 Investments.  Each of the Parent and the Borrowers will
not, and will not permit or cause any of its Subsidiaries to, directly or
indirectly, purchase, own, invest in or otherwise acquire any Capital Stock,
evidence of indebtedness or other obligation or security or any interest
whatsoever in any other Person, or make or permit to exist any loans, advances
or extensions of credit to, or any investment in cash or by delivery of
property in, any other Person, or purchase or otherwise acquire (whether in one
or a series of related transactions) any portion of the assets, business or
properties of another Person (including pursuant to an Acquisition), or create
or acquire any Subsidiary, or become a partner or joint venturer in any
partnership or joint venture (collectively, “Investments”), or make a
commitment or otherwise agree to do any of the foregoing, other than:

 

(i)                                     Investments
consisting of Cash Equivalents;

 

(ii)                                  Investments
consisting of the extension of trade credit, the creation of prepaid expenses,
and the purchase of inventory, supplies, equipment and other assets, in each
case in the ordinary course of business;

 

(iii)                               Investments
consisting of loans and advances to employees, officers or directors of the
Parent and its Subsidiaries in the ordinary course of business not exceeding
$1,500,000 at any time outstanding, provided that loans for the purpose
of acquiring Capital Stock of the Parent the Net Cash Proceeds of which Equity
Issuance are contributed to the capital of the Company or used to acquire
Capital Stock of the Company shall not be subject to such limit;

 

98

 

(iv)                              Investments
(including equity securities and debt obligations) of the Company and its
Subsidiaries (a) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business or (b) constituting non-cash
proceeds of any sale, transfer or other disposition permitted by Sections 8.4(ii) or 8.4(v);

 

(v)                                 without
duplication, Investments consisting of intercompany Indebtedness permitted
under Section 8.2(iv);

 

(vi)                              Investments
existing as of the Closing Date and described in Schedule 8.5;

 

(vii)                           Investments
of the Credit Parties under Hedge Agreements entered into in the ordinary
course of business to manage existing or anticipated interest rate or foreign
currency risks and not for speculative purposes;

 

(viii)                        Investments
(y) of the Parent in the Company and (z) of the Company in its
Subsidiaries, in each case to the extent made prior to the Closing Date;

 

(ix)                                Investments
consisting of the making of capital contributions or the purchase of Capital
Stock (x) by the Parent in the Company, (y) by the Company or any
Subsidiary in any other newly created Wholly Owned Subsidiary that is (or
immediately after giving effect to such Investment will be) a Subsidiary
Guarantor, provided that the Company complies with the provisions of Section 6.10, and provided  further that
in no event shall any Foreign Subsidiary create or acquire any Domestic
Subsidiary, and (z) by any Subsidiary in the Company;

 

(x)                                   Investments
(other than Acquisitions) consisting of the making of capital contributions or
the purchase of Capital Stock by the Company in a Foreign Subsidiary, the
proceeds of which will be used to fund all or a portion of the Acquisition
Amount for a Permitted Acquisition;

 

(xi)                                other
Investments (other than Acquisitions) by the Company in Foreign Subsidiaries
(including, without limitation, capital contributions made to any Foreign
Subsidiary, loans made to any Foreign Subsidiary, and Guarantee Obligations
with respect to obligations of any such Foreign Subsidiary (other than
Guarantee Obligations under Section 8.2(xi))
made after the Closing Date in an aggregate amount not exceeding $10,000,000 at
any time outstanding for all such Investments;

 

(xii)                             Permitted
Acquisitions; and

 

(xiii)                          other
Investments of the Company and its Subsidiaries not otherwise permitted under
this Section 8.5 (including joint
ventures, but excluding Investments in Foreign Subsidiaries) in an aggregate
amount not exceeding $10,000,000 at any time outstanding for all such
Investments.

 

99

 

8.6                                 Restricted
Payments.

 

(a)                                  Each
of the Parent and the Borrowers will not, and will not permit or cause any of
its Subsidiaries to, directly or indirectly, declare or make any dividend
payment, or make any other distribution of cash, property or assets, in respect
of any of its Capital Stock or any warrants, rights or options to acquire its
Capital Stock, or purchase, redeem, retire or otherwise acquire for value any
shares of its Capital Stock or any warrants, rights or options to acquire its
Capital Stock, or set aside funds for any of the foregoing (any of the
foregoing, a “Restricted Payment”), except that:

 

(i)                                     the
Parent and any of its Subsidiaries may declare and make dividend payments or
other distributions payable solely in its Common Stock;

 

(ii)                                  the
Company may make dividend payments or other distributions to the Parent in
amounts equal to amounts required for the Parent to pay (y) United States
federal, state and local income taxes to the extent such taxes are attributable
to the income of the Company and its Subsidiaries and (z) ordinary and
reasonable holding company operating expenses;

 

(iii)                               each
Wholly Owned Subsidiary of the Company may declare and make dividend payments
or other distributions to the Company or to another Subsidiary of the Company,
in each case to the extent not prohibited under applicable Requirements of Law;

 

(iv)                              so
long as no Default or Event of Default shall have occurred and be continuing or
would result therefrom, the Company may declare and make dividend payments and
other distributions to the Parent to enable the Parent to purchase, redeem,
retire or otherwise acquire shares of its Capital Stock (or options or rights
to acquire its Capital Stock) held by former officers, directors or employees
following termination of service or employment, in an aggregate cash amount not
exceeding $2,000,000 during any fiscal year or $5,000,000 for all such
purchases, redemptions, retirements and acquisitions from and after the Closing
Date, in each case net of any proceeds received by the Parent as a result of
resales of any such Capital Stock; and

 

(v)                                 the
Company may make dividend payments or other distributions to the Parent to
enable the Parent to make any Restricted Payment in an amount that, taken
together with the aggregate of all other Restricted Payments made by the Parent
and its Subsidiaries (other than Restricted Payments permitted under Sections 8.6(a)(i), 8.6(a)(ii)
and 8.6(a)(iii), but including Restricted
Payments permitted under Section 8.6(a)(iv))
from and after the Closing Date, does not exceed 50% of the sum of
(A) Consolidated Net Income for the period (taken as one accounting
period) from the beginning of fiscal year 2005 to the end of the most recently
ended fiscal quarter for which the Company has delivered financial statements
as required by Sections 6.1(a) or 6.1(b), as the case may be, and the Compliance Certificate
as required by Section 6.2(a), and
(B) $20,000,000, so long as (y) no Default or Event of Default shall
have occurred and be continuing or would result therefrom and (z) the
Company shall be in compliance with the financial covenants contained in Article VII, such compliance determined with

 

100

 

regard to calculations made on a pro forma basis for
the Reference Period most recently ended, calculated in accordance with GAAP as
if such Restricted Payment had been made on the first day of such period (and
in the case of any Restricted Payment or series of related Restricted Payments
in an amount exceeding $5,000,000, the Company shall have furnished to the
Administrative Agent a certificate of a Financial Officer of the Company as to
such compliance, together with supporting calculations).

 

(b)                                 Each
of the Parent and the Borrowers will not, and will not permit or cause any of
its Subsidiaries to, make (or give any notice in respect of) any payment or
prepayment of principal on, or interest, fees or premium (if any) with respect
to, any Subordinated Indebtedness, or directly or indirectly make any
redemption (including pursuant to any change of control or asset disposition
provision), retirement, defeasance or other acquisition for value of any
Subordinated Indebtedness, or make any deposit or otherwise set aside funds for
any of the foregoing purposes; provided, however, that the
Company and its Subsidiaries may make scheduled principal and interest payments
on any Seller Subordinated Indebtedness incurred or issued pursuant to (and in
accordance with the terms of) Section 8.2(viii)
and any Subordinated Indebtedness existing on the Closing Date and described in
Schedule 8.2, in each case in
accordance with the terms of such Indebtedness (including any subordination
provisions thereof).

 

8.7                                 Transactions
with Affiliates.  Each of the
Parent and the Borrowers will not, and will not permit or cause any of its
Subsidiaries to, enter into any transaction (including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service)
with any officer, director, stockholder or other Affiliate of the Parent or any
of its Subsidiaries, except in the ordinary course of its business and upon
fair and reasonable terms that are no less favorable to it than it would be obtained
in a comparable arm’s length transaction with a Person other than an Affiliate
of the Parent or any of its Subsidiaries; provided, however, that
nothing contained in this Section 8.7
shall prohibit:

 

(i)                                     transactions
described on Schedule 8.7 (and any
renewals or replacements thereof on terms not materially more disadvantageous
to the applicable Credit Party) or otherwise expressly permitted under this
Agreement;

 

(ii)                                  transactions
among the Company and the Subsidiary Guarantors (provided that such transactions
shall remain subject to any other applicable limitations and restrictions set
forth in this Agreement);

 

(iii)                               the
payment and provision by the Parent and its Subsidiaries of reasonable
compensation, benefits, indemnification and loans and advances permitted by Section 8.5(iii) to their directors, officers and
employees;

 

(iv)                              Equity
Issuances with respect to the Parent’s Capital Stock to directors, officers and
employees of the Credit Parties pursuant to employee benefit plans, employment
agreements or other employment arrangements approved by the Board of Directors
of the Parent; and

 

(v)                                 any
contribution to the capital of the Company by the Parent or any purchase of
Capital Stock of the Company by the Parent.

 

101

 

8.8                                 Lines
of Business.

 

(a)                                  Each
of the Parent and the Borrowers will not, and will not permit or cause any of
its Subsidiaries to, engage in any lines of business other than the businesses
engaged in by it on the Closing Date and businesses and activities reasonably
related thereto.

 

(b)                                 Notwithstanding
the provisions of Section 8.8(a)
or any other provision of this Agreement, the Parent shall not (i) hold
any assets other than the Capital Stock of the Company, cash and Cash
Equivalents and rights under employment agreements and written employment
arrangements, (ii) have any liabilities other than (A) liabilities
under and as permitted by the Credit Documents, (B) tax liabilities in the
ordinary course of business, (C) liabilities under employment agreements
and written employment arrangements and (D) corporate, administrative and
operating expenses in the ordinary course of business, or (iii) engage in
any business other than (A) owning the Capital Stock of the Company and
activities incidental to such ownership and to its public company status, and
(B) acting as a guarantor of the Obligations hereunder and granting to the
Administrative Agent, for the benefit of the Lenders, a security interest in
and Lien upon its assets pursuant to the Security Documents to which it is a
party.

 

8.9                                 Sale-Leaseback
Transactions.  Each of the
Parent and the Borrowers will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or
as guarantor or other surety with respect to any lease, whether an operating
lease or a Capital Lease, of any property (whether real, personal or mixed, and
whether now owned or hereafter acquired) (i) that any Credit Party has
sold or transferred (or is to sell or transfer) to a Person that is not a
Credit Party or (ii) that any Credit Party intends to use for
substantially the same purpose as any other property that, in connection with
such lease, has been sold or transferred (or is to be sold or transferred) by a
Credit Party to another Person that is not a Credit Party, in each case except
for transactions otherwise expressly permitted under this Agreement and except
for any such sale or transfer (made in connection with the corresponding
leaseback of the relevant asset) by the Company or any Subsidiary of any fixed
or capital assets acquired (or the construction of which is completed) after
the Closing Date that is made for cash consideration in an amount not less than
the cost of such fixed or capital asset and is consummated within 180 days
after the Company or such Subsidiary acquires or completes the construction of
such fixed or capital asset.

 

8.10                           Certain
Amendments.  Each of the
Parent and the Borrowers will not, and will not permit or cause any of its
Subsidiaries to, (i) amend, modify or waive, or permit the amendment,
modification or waiver of, any provision of any Subordinated Indebtedness, the
effect of which would be (a) to increase the principal amount due
thereunder or provide for any mandatory prepayments not already provided for by
the terms thereof, (b) to shorten or accelerate the time of payment of any
amount due thereunder, (c) to increase the applicable interest rate or
amount of any fees or costs due thereunder, (d) to amend any of the
subordination provisions thereunder (including any of the definitions relating
thereto), (e) to make any covenant or event of default therein more
restrictive or add any new covenant or event of default, (f) to grant any
security or collateral to secure payment thereof, or (g) to effect any
change in the rights or obligations of the Credit Parties thereunder or of the
holders thereof that, in the reasonable determination of the Administrative
Agent, would be adverse in any material respect to the rights or interests of
the Lenders, (ii) breach or otherwise violate any of the subordination
provisions applicable to any

 

102

 

Subordinated
Indebtedness, including, without limitation, restrictions against payment of
principal and interest thereon, or (iii) amend, modify or change any
provision of its articles or certificate of incorporation or formation, bylaws,
operating agreement or other applicable formation or organizational documents,
as applicable, or the terms of any class or series of its Capital Stock, other
than in a manner that could not reasonably be expected to adversely affect the
Lenders in any material respect (provided that the Company shall give
the Administrative Agent and the Lenders notice of any such amendment,
modification or change, together with certified copies thereof).

 

8.11                           Limitation
on Certain Restrictions.  Each
of the Parent and the Borrowers will not, and will not permit or cause any of
its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any restriction or encumbrance on
(a) the ability of the Parent, the Company and its Subsidiaries to perform
and comply with their respective obligations under the Credit Documents or
(b) the ability of any Subsidiary of the Company to make any dividend
payment or other distribution in respect of its Capital Stock, to repay
Indebtedness owed to the Company or any other Subsidiary, to make loans or
advances to the Company or any other Subsidiary, or to transfer any of its
assets or properties to the Company or any other Subsidiary, except (in the
case of clause (b) above only) for such restrictions or encumbrances
existing under or by reason of (i) this Agreement and the other Credit
Documents, (ii) applicable Requirements of Law, (iii) customary
non-assignment provisions in leases and licenses of real or personal property
or other agreements entered into by the Company or any Subsidiary in the
ordinary course of business, restricting the assignment or transfer thereof or
of property that is the subject thereof, (iv) customary restrictions and
conditions contained in any agreement relating to the sale of assets (including
Capital Stock of a Subsidiary) pending such sale, provided that such
restrictions and conditions apply only to the assets being sold and such sale
is permitted under this Agreement, (v) customary provisions in joint
venture agreements entered into by the Company or any Subsidiary in the
ordinary course of business, and (vi) the credit arrangements permitted
under Section 8.2(xi) (but only with
respect to the Foreign Subsidiary obligors thereunder).

 

8.12                           No
Other Negative Pledges.  Each
of the Parent and the Borrowers will not, and will not permit or cause any of
its Subsidiaries to, enter into or suffer to exist any agreement or restriction
that, directly or indirectly, prohibits or conditions the creation, incurrence
or assumption of any Lien upon or with respect to any part of its property or
assets, whether now owned or hereafter acquired, or agree to do any of the
foregoing, except (in the case of clause (b) above only) for such
agreements or restrictions existing under or by reason of (i) this
Agreement and the other Credit Documents, (ii) applicable Requirements of
Law, (iii) any agreement or instrument creating a Permitted Lien,
including the credit arrangements permitted under Section 8.2(xi)
(but only to the extent such agreement or restriction applies to the assets
subject to such Permitted Lien), (iv) customary provisions in leases and
licenses of real or personal property entered into by the Company or any
Subsidiary as lessee or licensee in the ordinary course of business,
restricting the granting of Liens therein or in property that is the subject
thereof, (v) customary restrictions and conditions contained in any
agreement relating to the sale of assets (including Capital Stock of a
Subsidiary) pending such sale, provided that such restrictions and
conditions apply only to the assets being sold and such sale is permitted under
this Agreement, and (vi) customary provisions in joint venture agreements
entered into by the Company or any Subsidiary in the ordinary course of
business.

 

103

 

8.13                           Fiscal
Year.  Each of the Parent and
the Borrowers will not, and will not permit or cause any of its Subsidiaries
to, change its fiscal year or its method of determining fiscal quarters.

 

8.14                           Accounting
Changes.  Other than as
permitted pursuant to Section 1.2,
each of the Parent and the Borrowers will not, and will not permit or cause any
of its Subsidiaries to, make or permit any material change in its accounting
policies or reporting practices, except as may be required by GAAP.

 

ARTICLE IX

 

EVENTS
OF DEFAULT

 

9.1                                 Events
of Default.  The occurrence of
any one or more of the following events shall constitute an “Event of
Default”:

 

(a)                                  Any
Borrower shall fail to pay when due (i) any principal of any Loan or any
Reimbursement Obligation, or (ii) any interest on any Loan or
Reimbursement Obligation, any fee payable under this Agreement or any other
Credit Document, or (except as provided in clause (i) above) any other
Obligation (other than any Obligation under a Hedge Agreement), and (in the
case of this clause (ii) only) such failure shall continue for a period of
three (3) Business Days;

 

(b)                                 Any
Borrower or any other Credit Party shall (i) fail to observe, perform or
comply with any condition, covenant or agreement contained in any of Sections 2.14, 6.2(f)(i), 6.3(i), 6.8, 6.9 or 6.10 or in Articles VII or VIII or
(ii) fail to observe, perform or comply with any condition, covenant or
agreement contained in any of Sections 6.1
or 6.2 (other than Section 6.2(f)(i))
and (in the case of this clause (ii) only) such failure shall continue
unremedied for a period of five (5) days after the earlier of (y) the date
on which a Responsible Officer of the Company acquires knowledge thereof and
(z) the date on which written notice thereof is delivered by the
Administrative Agent or any Lender to the Company;

 

(c)                                  Any
Borrower or any other Credit Party shall fail to observe, perform or comply
with any condition, covenant or agreement contained in this Agreement or any of
the other Credit Documents other than those enumerated in Sections 9.1(a)
and 9.1(b), and such failure (i) by
the express terms of such Credit Document, constitutes an Event of Default, or
(ii) shall continue unremedied for any grace period specifically
applicable thereto or, if no such grace period is applicable, for a period of
thirty (30) days after the earlier of (y) the date on which a Responsible
Officer of the Company acquires knowledge thereof and (z) the date on
which written notice thereof is delivered by the Administrative Agent or any
Lender to the Company; or any default or event of default shall occur under any
Hedge Agreement to which any Credit Party and any Lender or Affiliate of any
Lender are parties;

 

(d)                                 Any
representation or warranty made or deemed made by or on behalf of any Borrower
or any other Credit Party in this Agreement, any of the other Credit Documents
or in any certificate, instrument, report or other document furnished at any
time in connection herewith or therewith shall prove to have been incorrect,
false or misleading in any material respect as of the time made, deemed made or
furnished;

 

104

 

(e)                                  Any
Borrower or any other Credit Party shall (i) fail to pay when due (whether
by scheduled maturity, acceleration or otherwise and after giving effect to any
applicable grace period) (y) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this Agreement
or a Hedge Agreement) having an aggregate principal amount of at least
$5,000,000 or (z) any termination or other payment under any Hedge
Agreement covering a notional amount of Indebtedness of at least $5,000,000 or
(ii) fail to observe, perform or comply with any condition, covenant or
agreement contained in any agreement or instrument evidencing or relating to
any such Indebtedness, or any other event shall occur or condition exist in
respect thereof, and the effect of such failure, event or condition is to
cause, or permit the holder or holders of such Indebtedness (or a trustee or
agent on its or their behalf) to cause (with or without the giving of notice,
lapse of time, or both), without regard to any subordination terms with respect
thereto, such Indebtedness to become due, or to be prepaid, redeemed, purchased
or defeased, prior to its stated maturity;

 

(f)                                    Any
Borrower or any other Material Credit Party shall (i) file a voluntary
petition or commence a voluntary case seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts or any other
relief under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate manner, any
petition or case of the type described in Section 9.1(g),
(iii) apply for or consent to the appointment of or taking possession by a
custodian, trustee, receiver or similar official for or of itself or all or a
substantial part of its properties or assets, (iv) fail generally, or
admit in writing its inability, to pay its debts generally as they become due,
(v) make a general assignment for the benefit of creditors or
(vi) take any corporate action to authorize or approve any of the
foregoing;

 

(g)                                 Any
involuntary petition or case shall be filed or commenced against any Borrower
or any other Material Credit Party seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts, the
appointment of a custodian, trustee, receiver or similar official for it or all
or a substantial part of its properties or any other relief under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, and such petition or case shall continue
undismissed and unstayed for a period of sixty (60) days; or an order, judgment
or decree approving or ordering any of the foregoing shall be entered in any
such proceeding;

 

(h)                                 Any
one or more money judgments, writs or warrants of attachment, executions or
similar processes involving an aggregate amount in excess of $2,500,000 shall
be entered or filed against any Borrower or any other Credit Party or any of
their respective properties and the same shall not be paid, dismissed, bonded,
vacated, stayed or discharged within a period of thirty (30) days or in any
event later than five (5) days prior to the date of any proposed sale of such
property thereunder;

 

(i)                                     Any
Security Document to which any Borrower or any other Credit Party is now or
hereafter a party shall for any reason cease to be in full force and effect or
cease to be effective to give the Administrative Agent a valid and perfected
security interest in and Lien upon Collateral purported to be covered thereby
with an aggregate value of $1,000,000 or more, subject to no Liens other than
Permitted Liens, in each case unless any such cessation occurs in accordance
with the terms thereof or is due to any act or failure to act on the part of
the

 

105

 

Administrative Agent or
any Lender, or any Borrower or any other Credit Party shall assert any of the
foregoing; or the Guaranty Agreement shall for any reason cease to be in full
force and effect as to any Guarantor, or any Guarantor or any Person acting on
its behalf shall deny or disaffirm such Guarantor’s obligations thereunder;

 

(j)                                     Any
ERISA Event shall occur or exist with respect to any Plan or Multiemployer Plan
and, as a result thereof, together with all other ERISA Events then existing,
any Credit Party and its ERISA Affiliates have incurred, or could reasonably be
expected to incur, liability (including liability to any one or more Plans or
Multiemployer Plans or to the PBGC (or to any combination thereof)) in excess
of $1,000,000;

 

(k)                                  Any
one or more licenses, permits, accreditations or authorizations of any Borrower
or any other Credit Party shall be suspended, limited or terminated or shall
not be renewed, or any other action shall be taken, by any Governmental
Authority in response to any alleged failure by any Borrower or any other
Credit Party to be in compliance with applicable Requirements of Law, and such
action, individually or in the aggregate, has or could reasonably be expected
to have a Material Adverse Effect; or

 

(l)                                     Any
of the following shall occur:

 

(i)                                     The
Company shall cease to be a direct Wholly Owned Subsidiary of the Parent;

 

(ii)                                  Any
Borrower shall cease to be a Wholly Owned Subsidiary of the Company;

 

(iii)                               Any
Person or group of Persons acting in concert as a partnership or other group
(other than Investor and its Affiliates) shall have become, as a result of a
tender or exchange offer, open market purchases, privately negotiated purchases
or otherwise, the beneficial owner (within the meaning given to such term in
Rule 13d-3 under the Exchange Act), directly or indirectly, of Capital Stock of
the Parent having 25% or more of the Total Voting Power of the Parent and at
such time Investor and its Affiliates are the beneficial owners (defined as
provided above), directly or indirectly, of Capital Stock of the Parent having
a lesser percentage of the Total Voting Power of the Parent than such other
Person or group of Persons; or

 

(iv)                              During
any period of up to twelve (12) consecutive months, individuals on the Board of
Directors of the Parent (together with any new directors whose election by such
Board of Directors was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) shall
cease to consist of a majority of the individuals who constituted the Board of
Directors at the beginning of such period.

 

9.2                                 Remedies:
Termination of Commitments, Acceleration, etc.  Upon and at any time after the occurrence and
during the continuance of any Event of Default, the Administrative Agent shall
at the direction, or may with the consent, of the Required Lenders, take any or
all of the following actions at the same or different times:

 

106

 

(a)                                  Declare
the Commitments, the Swingline Commitment, and the Issuing Lender’s obligation
to issue Letters of Credit, to be terminated, whereupon the same shall
terminate; provided that, upon the occurrence of an Event of Default
pursuant to Section 9.1(f) or Section 9.1(g), the Commitments, the Swingline
Commitment and the Issuing Lender’s obligation to issue Letters of Credit shall
automatically be terminated;

 

(b)                                 Declare
all or any part of the outstanding principal amount of the Loans to be
immediately due and payable, whereupon the principal amount so declared to be
immediately due and payable, together with all interest accrued thereon and all
other amounts payable under this Agreement and the other Credit Documents (but
excluding any amounts owing under any Hedge Agreement), shall become immediately
due and payable without presentment, demand, protest, notice of intent to
accelerate or other notice or legal process of any kind, all of which are
hereby knowingly and expressly waived by the Borrowers; provided that,
upon the occurrence of an Event of Default pursuant to Section 9.1(f)
or Section 9.1(g), all of the
outstanding principal amount of the Loans and all other amounts described in
this Section 9.2(b) shall automatically
become immediately due and payable without presentment, demand, protest, notice
of intent to accelerate or other notice or legal process of any kind, all of
which are hereby knowingly and expressly waived by the Borrowers;

 

(c)                                  Direct
the Company to deposit (and the Company hereby agrees, forthwith upon receipt
of notice of such direction from the Administrative Agent, to deposit) with the
Administrative Agent from time to time such additional amount of cash as is
equal to 105% of the aggregate Letter of Credit Exposure then outstanding
(whether or not any beneficiary under any Letter of Credit shall have drawn or
be entitled at such time to draw thereunder) plus all accrued and unpaid
interest and fees thereon, such amount to be held by the Administrative Agent
in the Cash Collateral Account as security for the Letter of Credit Exposure as
described in Section 3.8;

 

(d)                                 Appoint
or direct the appointment of a receiver for the properties and assets of the
Credit Parties, both to operate and to sell such properties and assets, and
each Borrower, for itself and on behalf of its Subsidiaries, hereby consents to
such right and such appointment and hereby waives any objection such Borrower
or any Subsidiary may have thereto or the right to have a bond or other
security posted by the Administrative Agent on behalf of the Lenders, in connection
therewith; and

 

(e)                                  Exercise
all rights and remedies available to it under this Agreement, the other Credit
Documents and applicable law.

 

9.3                                 Remedies:
Set-Off.  In addition to all
other rights and remedies available under the Credit Documents or applicable
law or otherwise, upon and at any time after the occurrence and during the
continuance of any Event of Default, each Lender or any of its Affiliates may,
and each is hereby authorized by each Borrower, at any such time and from time
to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by each Borrower (on behalf of itself and
the other Credit Parties) to set off and to apply any and all deposits (general
or special, time or demand, provisional or final) and any other property at any
time held (including at any branches or agencies, wherever located), and any
other indebtedness at any

 

107

 

time owing, by such
Lender or Affiliate to or for the credit or the account of such Borrower or any
other Credit Party against any or all of the Obligations to such Lender or
Affiliate now or hereafter existing, whether or not such Obligations may be
contingent or unmatured, each Borrower (on behalf of itself and the other
Credit Parties) hereby granting to each Lender a continuing security interest
in and Lien upon all such deposits and other property as security for such
Obligations.  Each Lender agrees promptly
to notify the Company and the Administrative Agent after any such set-off and
application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.

 

ARTICLE X

 

THE
ADMINISTRATIVE AGENT

 

10.1                           Appointment.
 Each Lender hereby irrevocably
appoints and authorizes Wachovia to act as Administrative Agent hereunder and
under the other Credit Documents and to take such actions as agent on its
behalf hereunder and under the other Credit Documents, and to exercise such
powers and to perform such duties, as are specifically delegated to the
Administrative Agent by the terms hereof or thereof, together with such other
powers and duties as are reasonably incidental thereto.  The provisions of this Article are solely for
the benefit of the Administrative Agent and the Lenders, and no Credit Party
shall have any rights as a third party beneficiary of any of such provisions.

 

10.2                           Nature
of Duties.  The Administrative
Agent shall have no duties or responsibilities other than those expressly set
forth in this Agreement and the other Credit Documents.  The Administrative Agent shall not have, by
reason of this Agreement or any other Credit Document, a fiduciary relationship
in respect of any Lender or any other Person; and nothing in this Agreement or
any other Credit Document, express or implied, is intended to or shall be so
construed as to impose upon the Administrative Agent any obligations or
liabilities in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein. 
The Administrative Agent may execute any of its duties under this
Agreement or any other Credit Document by or through agents or attorneys-in-fact
and shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact that it selects with reasonable care.  The Administrative Agent shall be entitled to
consult with legal counsel, independent public accountants and other experts
selected by it with respect to all matters pertaining to this Agreement and the
other Credit Documents and its duties hereunder and thereunder and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts.  The Lenders hereby acknowledge that the
Administrative Agent shall not be under any duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Credit Document unless it shall be requested in writing to do so
by the Required Lenders (or, where a higher percentage of the Lenders is
expressly required hereunder, such Lenders).

 

10.3                           Exculpatory
Provisions.  Neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any action taken
or omitted to be taken by it or such Person under or in connection with the
Credit Documents, except for its or such Person’s own gross negligence or
willful misconduct, (ii) responsible in any manner to any Lender or any
other Person for any recitals, statements, information,

 

108

 

representations or
warranties herein or in any other Credit Document or in any document, instrument,
certificate, report or other writing delivered in connection herewith or
therewith, for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of this Agreement or any other Credit Document,
or for the financial condition of the Company, any other Credit Party or any
other Person, or (iii) required to ascertain or make any inquiry
concerning the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Credit Document or the existence or
possible existence of any Default or Event of Default, or to inspect the
properties, books or records of the Company or any other Credit Party.

 

10.4                           Reliance
by Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any notice, statement, consent or other communication (including,
without limitation, any thereof by telephone, telecopy, telex, telegram or
cable) 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.  The Administrative Agent may deem and treat
each Lender as the owner of its interest hereunder for all purposes hereof
unless and until a written notice of the assignment, negotiation or transfer
thereof shall have been given to the Administrative Agent in accordance with
the provisions of this Agreement.  The
Administrative Agent shall be entitled to refrain from taking or omitting to
take any action in connection with this Agreement or any other Credit Document
(i) if such action or omission would, in the reasonable opinion of the
Administrative Agent, violate any applicable law or any provision of this
Agreement or any other Credit Document or (ii) unless and until it shall
have received such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first have been indemnified to its
satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action. 
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent’s acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders (or, where
a higher percentage of the Lenders is expressly required hereunder, such
Lenders), and such instructions and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders (including all subsequent
Lenders).

 

10.5                           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 or any such Person
hereinafter taken, including any review of the affairs of the Company and the
other Credit Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender.  Each Lender represents to the Administrative
Agent that (i) 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, prospects, operations, properties, financial and other condition
and creditworthiness of the Company and the other Credit Parties and made its
own decision to enter into this Agreement and extend credit to the Borrowers
hereunder, and (ii) it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and

 

109

 

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 hereunder and under the
other Credit Documents and to make such investigation as it deems necessary to
inform itself as to the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Company and the other Credit
Parties.  Except as expressly provided in
this Agreement and the other Credit Documents, the Administrative Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information concerning the
business, prospects, operations, properties, financial or other condition or
creditworthiness of the Company, the other Credit Parties or any other Person
that may at any time come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.

 

10.6                           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 unless the Administrative Agent
shall have received written notice from the Company or a Lender referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default.”  In
the event that the Administrative Agent receives such a notice, the
Administrative Agent will give notice thereof to the Lenders as soon as
reasonably practicable; provided, however, that if any such
notice has also been furnished to the Lenders, the Administrative Agent shall
have no obligation to notify the Lenders with respect thereto.  The Administrative Agent shall (subject to Sections 10.4 and 11.6) take such
action with respect to such Default or Event of Default as shall reasonably be
directed by the Required Lenders; provided 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 advisable in the best interests of the Lenders except to the extent
that this Agreement expressly requires that such action be taken, or not be
taken, only with the consent or upon the authorization of the Required Lenders
or all of the Lenders.

 

10.7                           Indemnification.  To the extent the Administrative Agent is not
reimbursed by or on behalf of the Borrowers, and without limiting the
obligation of the Borrowers to do so, the Lenders agree (i) to indemnify
the Administrative Agent and its officers, directors, employees, agents,
attorneys-in-fact and Affiliates, ratably in proportion to their respective
percentages as used in determining the Required Lenders as of the date of
determination, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including,
without limitation, reasonable attorneys’ fees and expenses) or disbursements
of any kind or nature whatsoever that may at any time (including, without
limitation, at any time following the repayment in full of the Loans and the
termination of the Letters of Credit and the Commitments) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of this Agreement or any other Credit Document or any documents
contemplated by or referred to herein 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, and (ii) to reimburse the
Administrative Agent upon demand, ratably in proportion to their respective
percentages as used in determining the Required Lenders as of the date of
determination, for any reasonable expenses incurred by the Administrative Agent
in connection with the preparation, negotiation, execution, delivery,
administration, amendment, modification, waiver or enforcement (whether through
negotiations,

 

110

 

legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any of the other Credit Documents (including, without
limitation, reasonable attorneys’ fees and expenses and compensation of agents
and employees paid for services rendered on behalf of the Administrative Agent
hereunder and/or the Lenders); provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the party to be indemnified.

 

10.8                           The
Administrative Agent in its Individual Capacity.  With respect to its Commitments, the Loans
made by it and the Letters of Credit issued or participated in by it, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers under the Credit Documents as any other
Lender and may exercise the same as though it were not performing the agency
duties specified herein; and the terms “Lenders,” “Required Lenders” and any
similar terms shall, unless the context clearly otherwise indicates, include
the Administrative Agent in its individual capacity.  The Administrative Agent and its Affiliates
may accept deposits from, lend money to, make investments in, and generally
engage in any kind of banking, trust, financial advisory or other business with
the Company, any of its Subsidiaries or any of their respective Affiliates as
if the Administrative Agent were not performing the agency duties specified
herein, and may accept fees and other consideration from any of them for
services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.

 

10.9                           Successor
Administrative Agent.  The
Administrative Agent may resign at any time upon written notice to the Company
and the Lenders.  Upon any such notice of
resignation, the Required Lenders shall, with the prior written consent of the
Company (which consent shall not be unreasonably withheld), have the right to
appoint a successor to the Administrative Agent (provided that the
Company’s consent shall not be required in the event a Default or Event of
Default shall have occurred and be continuing). 
If no successor to the Administrative Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and after consulting with the Lenders and the Company, appoint a
successor Administrative Agent, which shall be a financial institution having a
rating of not less than “A” or its equivalent by Standard & Poor’s
Ratings Services or any of the Lenders. 
Upon the acceptance of any appointment as Administrative Agent by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Credit Documents. 
After any retiring Administrative Agent’s resignation as Administrative
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative
Agent.  If no successor to the
Administrative Agent has accepted appointment as Administrative Agent by the
thirtieth (30th) day following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective, and the Lenders shall thereafter perform all of the
duties of the Administrative Agent hereunder and under the other Credit
Documents until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for hereinabove.

 

111

 

10.10                     Collateral
Matters.

 

(a)                                  The
Administrative Agent is hereby authorized on behalf of the Lenders, without the
necessity of any notice to or further consent from the Lenders, from time to
time (but without any obligation) to take any action with respect to the
Collateral and the Security Documents that may be deemed by the Administrative
Agent in its discretion to be necessary or advisable to perfect and maintain
perfected the Liens upon the Collateral granted pursuant to the Security
Documents.

 

(b)                                 The
Lenders hereby authorize the Administrative Agent, at its option and in its
discretion, to release or, in the case of clause (iii) below, subordinate
any Lien granted to or held by the Administrative Agent upon any Collateral
(i) upon termination of the Commitments, termination, expiration or cash
collateralization of all outstanding Letters of Credit and payment in full of
all of the Obligations then due and payable, (ii) constituting property
sold or to be sold or disposed of as part of or in connection with any
disposition expressly permitted hereunder or under any other Credit Document or
to which the Required Lenders have consented, (iii) constituting property
to be subject to Liens permitted by Section 8.3(vii),
or (iv) otherwise pursuant to and in accordance with the provisions of any
applicable Credit Document.  Upon request
by the Administrative Agent at any time, the Lenders will confirm in writing
the Administrative Agent’s authority to release or subordinate its Liens upon
Collateral pursuant to this Section 10.10(b).

 

10.11                     Issuing
Lender and Swingline Lender. 
The provisions of this Article X
(other than Sections 10.9 and 10.10) shall apply to the Issuing Lender and the Swingline
Lender mutatis mutandis to the same extent as such provisions apply to the
Administrative Agent.

 

10.12                     Other
Agents, Managers. 
Notwithstanding any other provision of this Agreement or any of the
other Credit Documents, any Lenders identified on the cover page of this
Agreement or elsewhere herein as a “Syndication Agent,” “Documentation Agent,” “Co-Agent,”
“Lead Manager” or in any similar capacity are named as such for recognition
purposes only, and in their respective capacities as such shall have no powers,
rights, duties, responsibilities or liabilities with respect to this Agreement
and the other Credit Documents and the transactions contemplated hereby and
thereby.  Without limitation of the
foregoing, none of the Lenders so identified shall have, by reason of this
Agreement or any other Credit Document, a fiduciary relationship in respect of
any Lender or any other Person.  Each
Lender hereby makes the same acknowledgments with respect to any Lenders so
identified as it makes in Section 10.5
with respect to the Administrative Agent.

 

10.13                     Power
of Attorney for German Collateral Agreements.

 

(a)                                  Each
Secured Party hereby authorizes the Administrative Agent to act on its behalf
and in its name and to represent it in any way whatsoever in connection with
the preparation, execution and delivery of each German Collateral Agreement and
the perfection and monitoring of each security interest granted under any
German Collateral Agreement (a “German Security Interest”), including,
but not limited to, any pledge agreement with respect to shares or partnership
interests in a German company in notarial form, as well as any other pledge,
mortgage, assignment or transfer of title for security purposes.  This power of attorney shall

 

112

 

include the power to
enter into and agree the terms of and any amendments to, any agreements which
are necessary or desirable in this context, the power to make and receive any
and all declarations and to perform any and all actions which are necessary or
appropriate in this context, whether in private written form (private Schriftform) or in notarial form.  The Administrative Agent shall have the sole
power of attorney, it shall be released from the restrictions of
Section 181 of the German Civil Code (Bürgerliches Gesetzbuch, BGB) and
shall be authorized to delegate this power of attorney, including the
restrictions of Section 181 of the German Civil Code.

 

(b)                                 The
Administrative Agent shall (i) hold such German Security Interest, if any,
which is transferred or assigned by way of security (Sicherungsübereignung/Sicherungsabtretung)
or otherwise granted under a non-accessory security right (nicht akzessorische Sicherheit) or granted to the Administrative
Agent under an accessory security right (akzessorische Sicherheit)
pursuant to a parallel debt structure as trustee (Treuhänder)
for the benefit of the Secured Parties and (ii) administer in the name and
on behalf of the Lenders such German Security Interest which is pledged (Verpfändung) or otherwise transferred under an accessory
security right (akzessorische Sicherheit) to the Administrative Agent and the
other Secured Parties other than accessory security rights set forth in
clause (i) above.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1                           Fees
and Expenses.  The Borrowers
agree (subject to Section 11.18)
(i) whether or not the transactions contemplated by this Agreement shall
be consummated, to pay upon demand all reasonable out-of-pocket costs and
expenses of the Administrative Agent and the Arranger (including, without
limitation, the reasonable fees and expenses of counsel to the Administrative
Agent and the Arranger) in connection with the preparation, negotiation,
execution, delivery and syndication of this Agreement and the other Credit
Documents and any amendment, modification or waiver hereof or thereof or
consent with respect hereto or thereto, (ii) after the occurrence and
during the continuance of an Event of Default, to pay upon demand all
reasonable out-of-pocket costs and expenses of the Administrative Agent and
each Lender (including, without limitation, reasonable attorneys’ fees and
expenses) in connection with (y) any refinancing or restructuring of the
credit arrangements provided under this Agreement, whether in the nature of a “work-out,”
in any insolvency or bankruptcy proceeding or otherwise and whether or not
consummated, and (z) the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement or any of the other
Credit Documents, whether in any action, suit or proceeding (including any
bankruptcy or insolvency proceeding) or otherwise, and (iii) to pay and
hold the Administrative Agent, the Arranger and each Lender harmless from and
against all liability for any intangibles, documentary, stamp or other similar
taxes, fees and excises, if any, including any interest and penalties, and any
finder’s or brokerage fees, commissions and expenses (other than any fees,
commissions or expenses of finders or brokers engaged by the Administrative
Agent or any Lender), that may be payable in connection with the transactions
contemplated by this Agreement and the other Credit Documents.

 

113

 

11.2                           Indemnification.
 The Borrowers agree (subject to Section 11.18), whether or not the transactions
contemplated by this Agreement shall be consummated, to indemnify and hold the
Administrative Agent, the Arranger and each Lender and each of their respective
directors, officers, employees, agents and Affiliates (each, an “Indemnified
Person”) harmless from and against any and all claims, losses, damages,
obligations, liabilities, penalties, costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses) of any kind or nature
whatsoever, whether direct, indirect or consequential (collectively, “Indemnified
Costs”), that may at any time be imposed on, incurred by or asserted
against any such Indemnified Person as a result of, arising from or in any way
relating to the preparation, execution, performance, enforcement of or
preservation of rights under this Agreement or any of the other Credit
Documents, any of the transactions contemplated herein or therein or any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Loans or Letters of Credit (including,
without limitation, in connection (i) with the actual or alleged
generation, presence, storage, treatment, disposal, transport, discharge or release
of any Hazardous Substances on, in, to or from any real property at any time
owned, operated or leased by any Credit Party, (ii) any other
Environmental Claims and (iii) any violation of or liability under any
Environmental Law), or any action, suit or proceeding (including any inquiry or
investigation) by any Person, whether threatened or initiated, related to any
of the foregoing, and in any case whether or not such Indemnified Person is a
party to any such action, proceeding or suit or a subject of any such inquiry
or investigation; provided, however, that no Indemnified Person
shall have the right to be indemnified hereunder for any Indemnified Costs to
the extent determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. 
All of the foregoing Indemnified Costs of any Indemnified Person shall
be paid or reimbursed by the Borrowers, as and when incurred and upon demand;
but shall be repaid to the Borrowers by any Indemnified Person who is finally
determined to be not entitled to indemnification hereby as provided in the
proviso to the preceding sentence.  To
the extent permitted by applicable law, the Borrowers shall not assert, and each
Borrower hereby waives, any claim against any Indemnified Person, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement or any of the other Credit Documents, any of the
transactions contemplated herein or therein or any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
any Loans or Letters of Credit.

 

11.3                           Governing
Law; Consent to Jurisdiction.  THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
SHALL (EXCEPT AS MAY BE EXPRESSLY OTHERWISE PROVIDED IN ANY CREDIT DOCUMENT) BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW
RULES); PROVIDED THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OR RULES DESIGNATED IN SUCH
LETTER OF CREDIT OR, IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL
STANDBY PRACTICES OF THE INTERNATIONAL CHAMBER OF COMMERCE, AS IN EFFECT FROM
TIME TO TIME (THE “ISP”), AND, AS TO MATTERS NOT GOVERNED BY THE ISP,
THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK

 

114

 

GENERAL OBLIGATIONS LAW,
BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).  EACH OF THE PARENT AND THE BORROWERS HEREBY
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG
COUNTY, NORTH CAROLINA, OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN
DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER
OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO
WHICH THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER, THE PARENT OR ANY
BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN
CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY
LENDER, THE PARENT OR ANY BORROWER.  EACH
OF THE PARENT AND THE BORROWERS IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY
AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY
AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION
OR IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH
PROCEEDING.  EACH OF THE PARENT AND THE
BORROWERS CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR
CERTIFIED MAIL DIRECTED TO IT AT THE ADDRESS SET FORTH IN SECTION 11.5,
AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS,
PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED. 
NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE
AGENT, THE ARRANGER OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE
PARENT OR ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

 

11.4                           Waiver
of Jury Trial.  EACH OF THE
PARTIES TO THIS AGREEMENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ITS RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS TO WHICH IT IS A PARTY.

 

11.5                           Notices.

 

(a)                                  Except
in the cases of notices and other communications expressly permitted to be
given by telephone, and except as provided in Section 11.5(b),
all notices and other communications provided for hereunder shall be in writing
(including facsimile transmission) and mailed by certified or registered mail,
sent by overnight delivery, telecopied or delivered by hand to the party to be
notified at the following addresses:

 

(i)                                     if
to the Parent, the Company or any other Borrower, to dj Orthopedics, LLC, 2985
Scott Street, Vista, California 92081, Attention: Chief Financial Officer,
Telecopy No. (760) 734-3536;

 

115

 

(ii)                                  if
to the Administrative Agent, to Wachovia Bank, National Association, Charlotte
Plaza Building, 201 South College Street, 8th Floor NC 0680,
Charlotte, North Carolina 28288, Attention: Syndication Agency Services,
Telephone No. (704) 383-3721, Telecopy No. (704) 383-0288; and

 

(iii)                               if
to any Lender, to it at the address set forth on Schedule 1.1
(or if to any Lender not a party hereto as of the date hereof, at the address
designated in or in connection with its Assignment and Acceptance);

 

or in each case, to such other address as any party
may designate for itself by like notice to all other parties hereto.  Except as provided in Section 11.5(b),
all such notices and communications shall be deemed to have been given
(i) if mailed by certified or registered mail, on the third (3rd)
Business Day after deposit in the mails, (ii) if sent by overnight
delivery service or telecopied, when delivered to the courier for overnight
delivery or transmitted by telecopier, respectively, or (iii) if delivered
by hand, upon delivery; provided that notices and communications to the
Administrative Agent shall not be effective until received by the
Administrative Agent.

 

(b)                                 Notices
and communications to the Lenders hereunder may be delivered or furnished by
electronic communication (including e-mail and internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the
Administrative Agent that it is incapable of receiving notices thereunder by
electronic communication.  The
Administrative Agent or any Credit Party may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communication pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.  Unless the
Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed to have been given
upon the sender’s receipt of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, as available, return
e-mail or other written acknowledgement), and (ii) notices or other
communications posted to an internet or intranet website shall be deemed to
have been given upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

11.6                           Amendments,
Waivers, etc.  No amendment,
modification, waiver or discharge or termination of, or consent to any
departure by any Credit Party from, any provision of this Agreement or any
other Credit Document shall be effective unless in a writing signed by the
Required Lenders (or by the Administrative Agent at the direction or with the
consent of the Required Lenders), and then the same shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, modification, waiver, discharge,
termination or consent shall:

 

(a)                                  unless
agreed to by each Lender directly affected thereby, (i) reduce or forgive
the principal amount of any Loan or Reimbursement Obligation, reduce the rate
of or forgive any interest thereon, or reduce or forgive any fees hereunder
(other than fees payable to the Administrative Agent, the Arranger or the
Issuing Lender for its own account), (ii) extend the final scheduled
maturity date or any other scheduled date for the payment of any principal of
or

 

116

 

interest on any Loan
(including any scheduled date for the mandatory reduction or termination of any
Commitments, but excluding any mandatory prepayment of the Loans pursuant to Sections 2.6(d) through 2.6(g)
or reduction or termination of the Revolving Credit Commitments in connection
therewith), extend the time of payment of any Reimbursement Obligation or any
interest thereon, extend the expiry date of any Letter of Credit beyond the
Letter of Credit Maturity Date, or extend the time of payment of any fees
hereunder (other than fees payable to the Administrative Agent, the Arranger or
the Issuing Lender for its own account), or (iii) modify the amortization
schedule set forth in Section 2.6(a)
or the amortization of any Incremental Term Loans;

 

(b)                                 unless
agreed to by all of the Lenders, (i) except as may be otherwise
specifically provided in this Agreement or in any other Credit Document,
release all or substantially all of the Collateral or release any Guarantor
from its obligations under the Guaranty Agreement, (ii) change the
percentage of the aggregate Commitments or of the aggregate unpaid principal
amount of the Loans, or the number or percentage of Lenders, that shall be
required for the Lenders or any of them to take or approve, or direct the
Administrative Agent to take, any action hereunder (including as set forth in
the definition of “Required Lenders”), (iii) change any other
provision of this Agreement or any of the other Credit Documents requiring, by
its terms, the consent or approval of all the Lenders for such amendment,
modification, waiver, discharge, termination or consent, (iv) change or
waive any provision of Section 2.15,
any other provision of this Agreement or any other Credit Document requiring
pro rata treatment of any Lenders, or this Section 11.6,
or (v) except as set forth in Sections 2.20
and 2.21, increase or extend any Commitment
of any Lender (it being understood that a waiver of any condition precedent set
forth in Section 4.2 or of any Default or
Event of Default or mandatory reduction in the Commitments, if agreed to by the
Required Lenders, Required Revolving Credit Lenders or all Lenders (as may be
required hereunder with respect to such waiver), shall not constitute such an
increase);

 

(c)                                  unless
agreed to by all of the Revolving Credit Lenders, change the percentage set
forth in the definition of “Required Revolving Credit Lenders” (it being
understood that no consent of any other Lender or the Administrative Agent is
required);

 

(d)                                 unless
agreed to by the Required Revolving Credit Lenders, (i) except for any
such changes to which Section 11.6(a)
applies, change any provision of Article III
or any terms or provisions of any Letter of Credit or any supporting
documentation relating thereto (it being understood that no consent of any
other Lender or the Administrative Agent is required), or (ii) amend,
modify or waive any condition precedent to any Borrowing of Revolving Loans or
issuance of a Letter of Credit set forth in Section 4.2
(including in connection with any waiver of an existing Default or Event of
Default) (it being understood that no consent of any other Lender or the
Administrative Agent is required); and

 

(e)                                  unless
agreed to by the Issuing Lender, the Swingline Lender or the Administrative
Agent in addition to the Lenders required as provided hereinabove to take such
action, affect the respective rights or obligations of the Issuing Lender, the
Swingline Lender or the Administrative Agent, as applicable, hereunder or under
any of the other Credit Documents;

 

117

 

and provided  further
that (i) if any amendment, modification, waiver or consent would adversely
affect the holders of Loans of a particular Class (the “affected Class”)
relative to holders of Loans of another Class (including, without limitation,
by way of reducing the relative proportion of any payments, prepayments or
Commitment reductions to be applied for the benefit of holders of Loans of the
affected Class under Sections 2.6(d)
through 2.6(g)), then such amendment,
modification, waiver or consent shall require the consent of Lenders holding at
least a majority of the aggregate outstanding principal amount of all Loans (and
unutilized Commitments, if any) of the affected Class, (ii) the Fee Letter
may only be amended or modified, and any rights thereunder waived, in a writing
signed by the parties thereto, and (iii) this Agreement and the other
Credit Documents may be amended or modified with the consent of the Company and
the Administrative Agent to give effect to any Revolving Credit Commitment
Increase or Incremental Term Loans as set forth in Sections 2.20
and 2.21.

 

11.7                           Assignments,
Participations.

 

(a)                                  Each
Lender may assign to one or more other Eligible Assignees (each, an “Assignee”)
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the outstanding Loans
made by it and its participations in Letters of Credit); provided, however,
that:

 

(i)                                     each
such assignment by a Lender of any of its interests relating to Loans of a
particular Class shall be made in such manner so that the same portion of its
Commitment, Loans and other interests under and with respect to such Class is
assigned to the relevant Assignee, including with respect to Dollar Revolving
Loans and Foreign Currency Revolving Loans (but assignments need not be pro
rata as among Classes of Loans);

 

(ii)                                  except
in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund with respect to a Lender, without the written consent (to be
evidenced by its counterexecution of the relevant Assignment and Acceptance and
not to be unreasonably withheld or delayed) of each of the Administrative Agent
and, so long as no Default or Event of Default has occurred and is continuing,
the Company, no such assignment shall be in an aggregate principal amount
(determined as of the date of the Assignment and Acceptance with respect to
such assignment) less than (x) in the case of Term Loans, $1,000,000 (or,
if less, the full amount of the assigning Lender’s outstanding Term Loans of a
particular Class), (y) in the case of Revolving Credit Commitments,
$2,500,000 (or, if less, the entire Revolving Credit Commitment of the
assigning Lender), or (z) in the case of Swingline Loans, the entire
Swingline Commitment and the full amount of the outstanding Swingline Loans;
and

 

(iii)                               the
parties to each such assignment will execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance and will pay a nonrefundable processing fee of $3,500 to the
Administrative Agent for its own account.

 

Upon such execution,
delivery, acceptance and recording of the Assignment and Acceptance, from and
after the effective date specified therein, (A) the Assignee thereunder
shall be a party

 

118

 

hereto and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of the
assigning Lender hereunder with respect thereto and (B) the assigning
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than rights under the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the effective
date of such Assignment and Acceptance) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of such assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto, except that
such assigning Lender shall continue to be entitled to the protections of Sections 2.16(a), 2.16(b), 2.17, 11.1 and 11.2 for matters arising during the periods while it was a
Lender hereunder).  The terms and
provisions of each Assignment and Acceptance shall, upon the effectiveness
thereof, be incorporated into and made a part of this Agreement, and the
covenants, agreements and obligations of each Lender set forth therein shall be
deemed made to and for the benefit of the Administrative Agent and the other
parties hereto as if set forth at length herein.

 

(b)                                 The
Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, will maintain at its address for notices referred to in Section 11.5(a)(ii) a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation
of the names and addresses of the Lenders and the Commitments of, and principal
amount of the Loans owing to, each Lender from time to time (the “Register”).  The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrowers and each Lender at any reasonable time and from
time to time upon reasonable prior notice.

 

(c)                                  Upon
its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and an Assignee and, if required, counterexecuted by the
Company and the Issuing Lender, together with the processing fee referred to in
Section 11.7(a), the
Administrative Agent will (i) accept such Assignment and Acceptance,
(ii) on or as of the effective date thereof, record the information
contained therein in the Register and (iii) give notice thereof to the
Company and the Lenders.  If requested by
or on behalf of the Assignee, each applicable Borrower, at its own expense,
will execute and deliver to the Administrative Agent a new Note or Notes to the
order of the Assignee (and, if the assigning Lender has retained any portion of
its rights and obligations hereunder, to the order of the assigning Lender),
prepared in accordance with the applicable provisions of Section 2.4
as necessary to reflect, after giving effect to the assignment, the Commitments
and/or outstanding Loans, as the case may be, of the Assignee and (to the
extent of any retained interests) the assigning Lender, in substantially the
form of Exhibits A-1, A-2
and/or A-3, as applicable.  The Administrative Agent will return canceled
Notes to each applicable Borrower.  At
the time of each assignment pursuant to this Section 11.7
to a Person that is a Non-U.S. Lender and is not already a Lender hereunder,
the assignee Lender shall provide to the Company and the Administrative Agent
the appropriate Internal Revenue Service forms described in Section 2.17.

 

119

 

(d)                                 Each
Lender may, without the consent of any Borrower, the Administrative Agent or
any other Lender, sell to one or more other Persons (each, a “Participant”)
participations in all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments,
the outstanding Loans made by it and its participations in Letters of Credit); provided,
however, that (i) such Lender’s obligations under this Agreement
shall remain unchanged and such Lender shall remain solely responsible for the
performance of such obligations, (ii) the Borrowers, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement, and no Lender shall permit any Participant to have any voting rights
or any right to control the vote of such Lender with respect to any amendment,
modification, waiver, consent or other action hereunder or under any other
Credit Document (except as to actions described in Section 11.6(a)
and clauses (i) and (ii) of Section 11.6(b)
that affect such Participant or the Lender selling the participation), and
(iii) no Participant shall have any rights under this Agreement or any of
the other Credit Documents, each Participant’s rights against the granting
Lender in respect of any participation to be those set forth in the
participation agreement, and all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not granted such participation.  Notwithstanding the foregoing, each
Participant shall have the rights of a Lender for purposes of Sections 2.16(a), 2.16(b), 2.17, 2.18 and 9.3, and shall be entitled to the benefits thereto, to the
extent that the Lender granting such participation would be entitled to such
benefits if the participation had not been made, provided that no
Participant shall be entitled to receive any greater amount pursuant to any of
such Sections than the Lender granting such participation would have been
entitled to receive in respect of the amount of the participation made by such
Lender to such Participant had such participation not been made.

 

(e)                                  Nothing
in this Agreement shall be construed to prohibit any Lender from pledging or
assigning all or any portion of its rights and interest hereunder as security
for borrowings or other obligations, including any pledge or assignment to
secure obligations to a Federal Reserve Bank or, in the case of any Lender that
is an Fund, to the trustee under any indenture to which such Fund is a party in
support of its obligations to the trustee for the benefit of the applicable trust
beneficiaries; provided, however, that no such pledge or
assignment shall release a Lender from any of its obligations hereunder; and provided
further that any foreclosure or similar action by any such trustee shall
be subject to the provisions of this Section 11.7
concerning assignments and no such trustee shall have any voting rights
hereunder solely on account of such pledge.

 

(f)                                    Any
Lender or participant may, in connection with any assignment, participation,
pledge or proposed assignment, participation or pledge pursuant to this Section 11.7, disclose to the Assignee, Participant or
pledgee or proposed Assignee, Participant or pledgee any information relating
to the Company and its Subsidiaries furnished to it by or on behalf of any
other party hereto, provided that such Assignee, Participant or pledgee
or proposed Assignee, Participant or pledgee agrees in writing to keep such
information confidential to the same extent required of the Lenders under Section 11.13.

 

(g)                                 Notwithstanding
anything to the contrary contained herein, if Wachovia assigns all of its
Commitments and Loans in accordance with this Section 11.7,
Wachovia may resign as Issuing Lender upon written notice to the Company and
the Lenders.  Upon any such notice of

 

120

 

resignation, the Company
shall have the right to appoint from among the Lenders a successor Issuing
Lender; provided that no failure by the Company to make such appointment
shall affect the resignation of Wachovia as Issuing Lender.  Wachovia shall retain all of the rights and
obligations of the Issuing Lender hereunder with respect to all Letters of
Credit issued by it and outstanding as of the effective date of its resignation
and all obligations of the Company and the Revolving Credit Lenders with
respect thereto (including the right to require the Revolving Credit Lenders to
make Revolving Loans or fund participation interests pursuant to Article III).

 

11.8                           No
Waiver.  The rights and
remedies of the Administrative Agent and the Lenders expressly set forth in
this Agreement and the other Credit Documents are cumulative and in addition
to, and not exclusive of, all other rights and remedies available at law, in
equity or otherwise.  No failure or delay
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude other or
further exercise thereof or the exercise of any other right, power or privilege
or be construed to be a waiver of any Default or Event of Default.  No course of dealing between any Credit
Party, the Administrative Agent or the Lenders or their agents or employees
shall be effective to amend, modify or discharge any provision of this
Agreement or any other Credit Document or to constitute a waiver of any Default
or Event of Default.  No notice to or
demand upon any Credit Party in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of the Administrative Agent or any Lender to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.

 

11.9                           Successors
and Assigns.  This Agreement
shall be binding upon, inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, and all references
herein to any party shall be deemed to include its successors and assigns; provided,
however, that (i) neither the Parent, the Company nor any other
Borrower shall sell, assign or transfer any of its rights, interests, duties or
obligations under this Agreement without the prior written consent of all of
the Lenders and (ii) Assignees and Participants shall have such rights and
obligations with respect to this Agreement and the other Credit Documents as
are provided for under and pursuant to the provisions of Section 11.7.

 

11.10                     Survival.  All representations, warranties and
agreements made by or on behalf of the Borrowers or any other Credit Party in
this Agreement and in the other Credit Documents shall survive the execution
and delivery hereof or thereof, the making and repayment of the Loans and the
issuance and repayment of the Letters of Credit.  In addition, notwithstanding anything herein
or under applicable law to the contrary, the provisions of this Agreement and
the other Credit Documents relating to indemnification or payment of costs and
expenses, including, without limitation, the provisions of Sections 2.16(a),
2.16(b), 2.17,
2.18, 10.7,
11.1 and 11.2,
shall survive the payment in full of all Loans and Letters of Credit, the
termination of the Commitments and all Letters of Credit, and any termination
of this Agreement or any of the other Credit Documents.  Without limiting the foregoing, no payment by
any Borrower under this Agreement, including without limitation any voluntary
or mandatory prepayment of the Loans, shall affect the obligation of any
applicable Credit Party to continue making payments under any Hedge Agreement
with any Hedge Party, which shall remain in full force and effect
notwithstanding such prepayment, subject to the terms of such Hedge Agreement.

 

121

 

11.11                     Severability.  To the extent any provision of this Agreement
is prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.

 

11.12                     Construction.  The headings of the various articles,
sections and subsections of this Agreement and the table of contents have been
inserted for convenience only and shall not in any way affect the meaning or
construction of any of the provisions hereof. 
Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.

 

11.13                     Confidentiality.  Each of the Administrative Agent and each
Lender agrees to keep confidential, pursuant to its customary procedures for
handling confidential information of a similar nature and in accordance with
safe and sound banking practices, all nonpublic information provided to it by
or on behalf of the Company or any other Credit Party in connection with this
Agreement or any other Credit Document; provided, however, that
each of the Administrative Agent and each Lender may disclose such information
(i) to its Affiliates, and to its and its Affiliates’ respective
directors, officers, partners, employees, agents, auditors, counsel and other
advisors so long such parties are informed of the confidential nature of such
information and instructed to keep such information confidential, (ii) at
the demand or request of any bank regulatory authority, court or other
Governmental Authority having or asserting jurisdiction over the Administrative
Agent or such Lender or any of their respective Affiliates, as may be required
pursuant to subpoena or other legal process, or otherwise in order to comply
with any applicable Requirement of Law, (iii) in connection with the
exercise of any remedies hereunder or under any other Credit Document or any
Hedge Agreement or any action or proceeding relating to this Agreement, any
other Credit Document or any Hedge Agreement or the enforcement of rights
hereunder or thereunder, (iv) to the Administrative Agent, the Arranger or
any other Lender, (v) to the extent the same has become available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Company or has become publicly available other than as a result
of a breach of this Agreement, (vi) subject to an agreement containing
provisions substantially the same as those in this Section, to any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Company and its obligations hereunder,
(vii) with the consent of the Company, and (viii) pursuant to and in
accordance with the provisions of Section 11.7(f).

 

11.14                     Judgment
Currency.  If, for the
purposes of obtaining judgment in any court, it is necessary to convert a sum
due hereunder or under any other Credit Document in one currency into another
currency, the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase the first
currency with such other currency on the Business Day preceding that on which
final judgment is given.  The obligation
of any Credit Party in respect of any such sum due from it to the
Administrative Agent or any Lender hereunder or under the other Credit
Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance
with the applicable provisions of this Agreement (the “Agreement Currency”),
be discharged only to the extent that on the Business Day following receipt by
the Administrative

 

122

 

Agent or such Lender of
any sum adjudged to be so due in the Judgment Currency, the Administrative
Agent or such Lender may in accordance with normal banking procedures purchase
the Agreement Currency with the Judgment Currency.  If the amount of the Agreement Currency so
purchased is less than the sum originally due to the Administrative Agent or
such Lender in the Agreement Currency, each Credit Party agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent or such Lender or the Person to whom such obligation was
owing against such loss.  If the amount
of the Agreement Currency so purchased is greater than the sum originally due
to the Administrative Agent or such Lender in such currency, the Administrative
Agent or such Lender agrees to return the amount of any excess to the
applicable Credit Party (or to any other Person who may be entitled thereto
under applicable law).

 

11.15                     Counterparts;
Effectiveness.  This Agreement
may be executed in any number of counterparts and by different parties hereto
on separate counterparts, each of which when so executed and delivered shall be
an original, but all of which shall together constitute one and the same
instrument.  This Agreement shall become
effective as of the Closing Date upon (i) the execution of a counterpart
hereof by each of the parties hereto and receipt by the Administrative Agent
and the Company of written or telephonic notification of such execution and
authorization of delivery thereof and (ii) the satisfaction of the
conditions precedent set forth in Section 4.1
(and with respect to the initial Borrowings on the Closing Date, Section 4.2). 
Each Borrower, the Administrative Agent and each Lender agrees that, at
such time as this Agreement has become effective, (i) the Existing Credit
Agreement shall automatically be deemed amended and restated in its entirety by
this Agreement, and (ii) all of the promissory notes executed pursuant to
the Existing Credit Agreement shall automatically be substituted and replaced
by the Notes executed in connection with this Agreement.

 

11.16                     Disclosure
of Information.  The Company
agrees and consents to the Administrative Agent’s and the Arranger’s disclosure
of information relating to this transaction to Gold Sheets and other similar
bank trade publications.  Such information
will consist of deal terms and other information customarily found in such
publications.

 

11.17                     Entire
Agreement.  THIS AGREEMENT AND
THE OTHER DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION
HEREWITH (A) EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
PARTIES HERETO AND THERETO RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF,
(B) SUPERSEDE ANY AND ALL PRIOR AGREEMENTS AND UNDERSTANDINGS OF SUCH
PERSONS, ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF (BUT
SPECIFICALLY EXCLUDING THE FEE LETTER), AND (C) MAY NOT BE AMENDED,
SUPPLEMENTED, CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

11.18                     Nature
of Liability of Foreign Borrowers.

 

(a)                                  None
of the Foreign Borrowers nor any Foreign Subsidiaries shall be liable (either
as obligor, indemnitor or otherwise) for any Domestic Obligations.  The Obligations of the Borrowers are
independent of each other, and a separate action or actions may be brought and

 

123

 

prosecuted against any
Borrower to enforce this Agreement, irrespective of whether any action is
brought against any other Borrower or whether any other Borrower is joined in
any such action or actions.

 

(b)                                 With
respect to the Foreign Obligations, the liability of each Borrower hereunder is
exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrowers and such Borrower’s liability hereunder shall not
be affected or impaired by (i) any direction as to application of payment
by any other Borrower or by any other party, (ii) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the indebtedness of any other Borrower, (iii) any payment on
or in reduction of any such other guaranty or undertaking, (iv) any
dissolution, termination or increase, decrease or change in personnel by any
other Borrower, or (v) any payment made to the Administrative Agent or the
Lenders on the Foreign Obligations that the Administrative Agent or such
Lenders repay to any other Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
such Borrower waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.

 

11.19                     Addition
of Borrowers.  Any Foreign
Subsidiary of the Company may join this Agreement as a Foreign Borrower
hereunder upon (i) execution and delivery by the Company, such Foreign
Subsidiary and the Administrative Agent of a Joinder Agreement providing for
such Foreign Subsidiary to become a Foreign Borrower hereunder, (ii) to
the extent requested by any Revolving Credit Lender, execution and delivery by
such Foreign Subsidiary to the Administrative Agent of a Revolving Note,
appropriately completed in favor of such Revolving Credit Lender, (iii) to
the extent required under (and as described more completely in) Section 6.10, execution and delivery by the Company and
any applicable Subsidiaries to the Administrative Agent of an amendment or
supplement to the Pledge Agreement, together with the certificates evidencing
the Capital Stock of such Foreign Subsidiary being pledged thereby and undated
stock powers duly executed in blank, and (iv) to the extent not previously
delivered pursuant to Section 6.10,
delivery to the Administrative Agent of documents and certificates with respect
to such Foreign Subsidiary of the type described in Sections 4.1(c)
and 4.1(d) and such other documents,
certificates and opinions (including opinions of local counsel in the
jurisdiction of organization of such Foreign Subsidiary) as the Administrative
Agent may reasonably request, all in form and substance reasonably satisfactory
to the Administrative Agent.  Any such
Foreign Subsidiary may be removed and released as a Foreign Borrower upon
(y) written notice from the Company to the Administrative Agent to such
effect and (z) repayment in full of all outstanding Loans of such Foreign
Borrower, together with all accrued and unpaid interest thereon and all other
fees, expenses and other Obligations owing by such Foreign Borrower in
connection therewith.

 

124

 

IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.

 

	
   

  	
  DJ ORTHOPEDICS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DJ ORTHOPEDICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

(signatures
continued)

 

S-1

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION, as
  Administrative Agent, Issuing

  Lender and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

S-2

 

	
   

  	
  BANK OF THE WEST, as
  Syndication Agent and

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

S-3

 

	
   

  	
  WELLS FARGO BANK,
  NATIONAL

  ASSOCIATION, as Syndication Agent and as a

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

S-4

 

	
   

  	
  BANK OF AMERICA, N.A.,
  as Documentation

  Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

S-5

 

	
   

  	
  UNION BANK OF
  CALIFORNIA, N.A., as

  Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

S-6

 

	
   

  	
  GENERAL ELECTRIC
  CAPITAL

  CORPORATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

S-7Exhibit
10.1

 

 

Discretionary
Option Grant Program

 

UNITED
ONLINE, INC.

2001
STOCK INCENTIVE PLAN

NOTICE OF
GRANT OF STOCK OPTION

 

 

Notice is hereby
given of the following option grant (the “Option”) to purchase shares of the
Common Stock of United Online, Inc.:

	
  Optionee:

   

  	
   

  	
  <Optionee>

  
	
  Grant Date:

   

  	
   

  	
  <Grant Date>

  
	
  Vesting Commencement Date:

   

  	
   

  	
  <Grant Date>

  
	
  Exercise Price:

   

  	
   

  	
  $<Exercise Price> per share

  
	
  Number of Option Shares:

   

  	
   

  	
  <No. of Shares> shares

  
	
  Expiration Date:

   

  	
   

  	
  <Expiration Date>

  
	
  Type of Option:

   

  	
   

  	
  <Type of Option>

  
	
  Date Exercisable:  

   

  	
   

  	
  <Exercise
  Schedule>

  

Vesting Schedule: 
[Thirty three percent (33%) of the Option Shares shall vest upon
Optionee’s completion of one year of Service measured from the Vesting
Commencement Date and the remainder of the Option Shares shall vest in a series
of twenty-four successive equal monthly installments upon Optionee’s completion
of each additional month of Service over the twenty-four month period
thereafter.] OR [Twenty-five percent (25%) of the Option Shares shall vest upon
Optionee’s completion of one year of Service measured from the Vesting
Commencement Date and the remainder of the Option Shares shall vest in a series
of thirty-six successive equal monthly installments upon Optionee’s completion
of each additional month of Service over the thirty-six month period
thereafter.]  The Option shall vest as to
one or more of the Option Shares on an accelerated basis pursuant to the terms
of the Employment Agreement between the Corporation and the Optionee in the event
the Optionee’s Service with the Corporation terminates under certain prescribed
circumstances.  Accordingly, the vesting
acceleration provisions of such Employment Agreement are hereby incorporated
into the Option Agreement for this Option and shall have the same force and
effect as if expressly set forth therein.

 

Optionee understands and agrees that the Option is
granted subject to and in accordance with the terms of the United Online, Inc.
2001 Stock Incentive Plan (the “Plan”). 
Optionee further agrees to be bound by the terms of the Plan and the
terms of the Option as set forth in the Stock Option Agreement attached hereto
as Exhibit A.  Optionee hereby
acknowledges the receipt of a copy of the official prospectus for the Plan in
the form attached hereto as Exhibit B. 
A copy of the Plan is available upon request made to the Corporate
Secretary at the Corporation’s principal offices.

 

 

Employment at Will. 
Nothing in this Notice or in the attached Stock Option Agreement or in
the Plan shall confer upon Optionee any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Parent or Subsidiary employing or
retaining Optionee) or of Optionee, which rights are hereby expressly reserved
by each, to terminate Optionee’s Service at any time for any reason, with or
without cause.

Definitions. 
All capitalized terms in this Notice shall have the meaning assigned to
them in this Notice or in the attached Stock Option Agreement.

DATED:  <Grant Date>

 

 

	
  UNITED ONLINE, INC.

  
	
   

  
	
  By:

  	
   

  
	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
  OPTIONEE

  
	
   

  
	
  Name:
  <Optionee>

  
	
   

  
	
  Signature:

  	
   

  
	
   

  
	
  Address:

  
			

 

 

 

ATTACHMENTS

Exhibit A - Stock Option
Agreement

Exhibit B — Plan Summary and
Prospectus

 

 

EXHIBIT A

 

Discretionary
Option Grant Program

 

UNITED
ONLINE, INC.

2001
STOCK INCENTIVE PLAN

STOCK
OPTION AGREEMENT

 

                A.            The Board has adopted the Plan for the purpose of
retaining the services of selected Employees, non-employee members of the Board
(or the board of directors of any Parent or Subsidiary) and independent
contractors who provide services to the Corporation (or any Parent or
Subsidiary).

                B.            Optionee is to render valuable services to the
Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in connection with
the Corporation’s grant of an option to Optionee.

                C.            All capitalized terms in this Agreement shall have the
meaning assigned to them in the attached Appendix.

NOW,
THEREFORE, it is
hereby agreed as follows:

1.     Grant of Option.  The Corporation hereby grants to Optionee, as
of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice.  The
Option Shares shall be purchasable from time to time during the option term
specified in Paragraph 2 at the Exercise Price.

2.     Option Term.  This option shall expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.

3.     Limited Transferability.

(a)   Except
as otherwise provided in this Paragraph 3, this option shall be neither
transferable nor assignable by Optionee other than by will or the laws of
inheritance following Optionee’s death and may be exercised, during Optionee’s
lifetime, only by Optionee.  However,
Optionee may designate one or more persons as the beneficiary or beneficiaries
of this option, and this option shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the Optionee’s
death while holding this option.  Such
beneficiary or beneficiaries shall take the transferred option subject to all
the terms and conditions of this Agreement, including (without limitation) the
limited time period during which this option may, pursuant to Paragraph 5, be
exercised following Optionee’s death.

(b)   If
this option is designated a Non-Statutory Option in the Grant Notice, then
(with the Plan Administrator’s consent) this option may be assigned in whole or
in part during Optionee’s lifetime to one or more members of Optionee’s family
or to a trust established for the exclusive benefit of one or more such family
members, to the extent such assignment is in connection with the Optionee’s
estate plan.  The assigned portion shall
be exercisable only by the person or persons who acquire a proprietary interest
in the option pursuant to such assignment. 
The terms applicable to the assigned portion shall be the same as those
in effect for this option immediately prior to such assignment.

4.     Dates of Exercise.  This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant
Notice.  As the option becomes
exercisable for such installments, those installments shall accumulate, and the
option shall remain exercisable for the

 

 

accumulated installments until the close of business on the
Expiration Date or sooner termination of the option term under Paragraph 5 or
6.

5.     Cessation of Service.  The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

(a)   Should
Optionee cease to remain in Service for any reason (other than death, Permanent
Disability, Misconduct or Involuntary Termination following a Corporate
Transaction or Change in Control) while this option is outstanding, then this
option shall terminate upon the earlier of (i)
the expiration of the three (3) month period measured from the date of such
cessation of Service or (ii) the close of business on the Expiration Date.

(b)   Should
Optionee die while this option is outstanding, then the personal representative
of Optionee’s estate or the person or persons to whom the option is transferred
pursuant to Optionee’s will or the laws of inheritance shall have the right to
exercise this option.  However, if
Optionee has designated one or more beneficiaries of this option, then those
persons shall have the exclusive right to exercise this option following
Optionee’s death.  Any such right to
exercise this option shall lapse, and this option shall terminate, upon the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of Optionee’s death or (ii) the close of business
on the Expiration Date.

(c)   Should
Optionee cease Service by reason of Permanent Disability while this option is
outstanding, then this option shall terminate upon the earlier
of (i) the expiration of the twelve (12) month period measured from the date of
such cessation of Service or (ii) the close of business on the Expiration Date.

(d)   Should
Optionee’s Service terminate by reason of an Involuntary Termination within
twelve (12) months following a Corporate Transaction or Change in Control while
this option is outstanding, then this option shall terminate upon the earlier of (i) the expiration of the twelve (12) month
period measured from the date of the Optionee’s Involuntary Termination or (ii)
the close of business on the Expiration Date.

(e)   During
the limited period of post-Service exercisability, this option may not be
exercised in the aggregate for more than the number of Option Shares for which
the option is exercisable at the time of Optionee’s cessation of Service.  Upon the expiration of such limited exercise
period or (if earlier) upon the Expiration Date, this option shall terminate
and cease to be outstanding for any exercisable Option Shares for which the
option has not been exercised.  However,
this option shall, immediately upon Optionee’s cessation of Service for any
reason, terminate and cease to be outstanding with respect to any Option Shares
for which this option is not otherwise at that time exercisable.

(f)    Should
Optionee’s Service be terminated for Misconduct or should Optionee otherwise
engage in any Misconduct while this option is outstanding, then this option
shall terminate immediately and cease to remain outstanding.

6.     Special
Acceleration of Option.

(a)   This option, to the extent outstanding at the
time of a Corporate Transaction but not otherwise fully exercisable, shall
automatically accelerate so that this option shall, immediately prior to the
effective date of such Corporate Transaction, become exercisable for all of the
Option Shares at the time subject to this option and may be exercised for any or
all of those Option Shares as fully vested shares of Common Stock.  No such acceleration of this option shall
occur, however, if and to the extent: (i) this option is, in connection
with the Corporate Transaction, to be assumed by the successor corporation (or
parent thereof) or (ii) this option is to be replaced with a cash incentive
program of the

 

 

successor corporation which preserves the spread existing at
the time of the Corporate Transaction on the Option Shares for which this
option is not otherwise at that time exercisable (the excess of the Fair Market
Value of those Option Shares over the aggregate Exercise Price payable for such
shares) and provides for subsequent payout in accordance with the same option
exercise/vesting schedule set forth in the Grant Notice.

(b)   Immediately
following the Corporate Transaction, this option shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation (or
parent thereof) in connection with the Corporate Transaction.

(c)   If
this option is assumed in connection with a Corporate Transaction, then this
option shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to Optionee in consummation of such Corporate Transaction had the
option been exercised immediately prior to such Corporate Transaction, and
appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same.  To the extent the holders of Common Stock
receive cash consideration for their Common Stock in consummation of the
Corporate Transaction, with the Plan Administrator’s consent prior to the
consummation of the Corporate Transaction, the successor corporation may, in
connection with the assumption of this option, substitute one or more shares of
its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Corporate Transaction.

(d)   This
option shall continue, over Optionee’s period of Service following a Corporate
Transaction in which this option is assumed, to become exercisable for the
Option Shares in one or more installments in accordance with the provisions of
this Agreement and the Grant Notice. 
However, immediately upon an Involuntary Termination of Optionee’s
Service within twelve (12) months following the effective date of that
Corporate Transaction, this option, to the extent outstanding at the time but
not otherwise fully exercisable, shall automatically accelerate as to a part of
the Option Shares so that the total number of Option Shares for which this
option shall be exercisable, after taking such acceleration into account, shall
be equal to the greater of (i) the number of
Option Shares which Optionee could have, in accordance with the normal Exercise
Schedule (after taking into account any prior exercises), exercised this option
at the time of such Involuntary Termination had Optionee completed twice the
amount of Service actually completed by him or her at the time of such
Involuntary Termination (but in no event shall the number of Option Shares for
which this option becomes exercisable on such an accelerated basis exceed the
number of Option Shares for which this option would not have otherwise been
exercisable at the time of such Involuntary Termination in accordance with the
normal Exercise Schedule) or (ii) the number of Option Shares for which the
Option would have become exercisable under the normal Exercise Schedule had the
Optionee actually completed twelve (12) months of Service prior to his or her
Involuntary Termination.

(e)   This option shall not accelerate upon the
occurrence of a Change in Control, and this option shall accordingly, over
Optionee’s period of Service following such Change in Control, continue to
become exercisable for the Option Shares in one or more installments in
accordance with the provisions of this Agreement and the Grant Notice.  However, immediately upon an Involuntary
Termination of Optionee’s Service within twelve (12) months following that
Change in Control, this option, to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically accelerate as to a part of the
Option Shares so that the total number of Option Shares for which this option
shall be exercisable, after taking such acceleration into account, shall be
equal to the greater of (i) the number of
Option Shares which Optionee could have, in accordance with the normal Exercise
Schedule (after taking into account any prior exercises), exercised this option
at the time of such Involuntary Termination had Optionee completed twice the
amount of Service actually completed by him or her at the time of such
Involuntary Termination (but in no event shall the number of Option Shares for
which this option becomes exercisable on such an accelerated basis exceed the
number of Option Shares for which

 

 

this option would not have otherwise been exercisable at the
time of such Involuntary Termination in accordance with the normal Exercise
Schedule) or (ii) the number of Option Shares for which the Option would have
become exercisable under the normal Exercise Schedule had the Optionee actually
completed twelve (12) months of Service prior to his or her Involuntary
Termination.

(f)    This
Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

7.     Adjustment
in Option Shares.  Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (a) the total number
and/or class of securities subject to this option and (b) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

8.     Stockholder Rights.  The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.

9.     Manner of Exercising Option.

(a)   In
order to exercise this option with respect to all or any part of the Option
Shares for which this option is at the time exercisable, Optionee (or any other
person or persons exercising the option) must take the following actions:

(i)            Execute and deliver to the
Corporation a Notice of Exercise (attached hereto as Exhibit I) for the Option
Shares for which the option is exercised.

(ii)           Pay the aggregate Exercise Price for
the purchased shares in one or more of the following forms:

(A)  cash or
check made payable to the Corporation;

(B)   a
promissory note payable to the Corporation, but only to the extent authorized
by the Plan Administrator in accordance with Paragraph 13;

(C)   shares of
Common Stock held by Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or

(D)  if the
option is exercised for vested shares, through a special sale and remittance
procedure pursuant to which Optionee (or any other person or persons exercising
the option) shall concurrently provide irrevocable instructions (1) to a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (2) to the Corporation to
deliver

 

 

the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.

Except to the extent the
sale and remittance procedure is utilized in connection with the option
exercise, payment of the Exercise Price must accompany the Notice of Exercise
delivered to the Corporation in connection with the option exercise.

(iii)          Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if other than
Optionee) have the right to exercise this option.

(iv)          Make appropriate arrangements with the
Corporation (or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.

(b)   As
soon as practical after the Exercise Date, the Corporation shall issue to or on
behalf of Optionee (or any other person or persons exercising this option) the
purchased Option Shares, with the appropriate legends affixed thereto.

(c)   In
no event may this option be exercised for any fractional shares.

10.   Compliance
with Laws and Regulations.

(a)   The
exercise of this option and the issuance of the Option Shares upon such
exercise shall be subject to compliance by the Corporation and Optionee with
all applicable requirements of law relating thereto and with all applicable
regulations of any applicable Stock Exchange or the Nasdaq Stock Market on
which the Common Stock may be listed for trading at the time of such exercise
and issuance.

(b)   The
inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and
sale of any Common Stock pursuant to this option shall relieve the Corporation
of any liability with respect to the non-issuance or sale of the Common Stock
as to which such approval shall not have been obtained.

11.   Successors and Assigns.  Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee’s assigns, the legal representatives, heirs and legatees of
Optionee’s estate and any beneficiaries of this option designated by Optionee.

12.   Notices.  Any notice required to be given or delivered
to the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices.  Any notice required to be given or delivered
to Optionee shall be in writing and addressed to Optionee at the address
indicated on the Corporation’s records. 
All notices shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, postage prepaid and properly addressed to the party
to be notified.

13.   Financing.  The Plan Administrator may, in its absolute
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a full-recourse
promissory note payable to the Corporation. 
The terms of any such promissory note (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.

 

 

14.   Construction.  This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects
limited by and subject to the terms of the Plan.  All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.

 

15.   Governing Law.  The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Delaware without resort to that State’s conflict-of-laws rules.

16.   Excess Shares.  If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares of Common Stock
which may without stockholder approval be issued under the Plan, then this
option shall be void with respect to those excess shares, unless stockholder
approval of an amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the provisions of
the Plan.

17.   Additional Terms Applicable to an Incentive Option.  In the event this option is designated an
Incentive Option in the Grant Notice, the following terms and conditions shall
also apply to the grant:

(a)   This
option shall cease to qualify for favorable tax treatment as an Incentive
Option if (and to the extent) this option is exercised for one or more Option
Shares: (A) more than three (3) months after the date Optionee ceases to be an
Employee for any reason other than death or Permanent Disability or (B) more
than twelve (12) months after the date Optionee ceases to be an Employee by
reason of Permanent Disability.

(b)   No
installment under this option shall qualify for favorable tax treatment as an
Incentive Option if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which such installment
first becomes exercisable hereunder would, when added to the aggregate value
(determined as of the respective date or dates of grant) of the Common Stock or
other securities for which this option or any other Incentive Options granted
to Optionee prior to the Grant Date (whether under the Plan or any other option
plan of the Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000)
in the aggregate.  Should such One
Hundred Thousand Dollar ($100,000) limitation be exceeded in any calendar year,
this option shall nevertheless become exercisable for the excess shares in such
calendar year as a Non-Statutory Option.

(c)   Should
the exercisability of this option be accelerated pursuant to the provisions of
Paragraph 6 of this Agreement, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which this option
first becomes exercisable in the calendar year in which such acceleration
occurs does not, when added to the aggregate value (determined as of the
respective date or dates of grant) of the Common Stock or other securities for
which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate.  Should the applicable One
Hundred Thousand Dollar ($100,000) limitation be exceeded in the calendar year
of such acceleration, the option may nevertheless be exercised for the excess
shares in such calendar year as a Non-Statutory Option.

(d)   Should Optionee hold, in addition to this
option, one or more other options to purchase Common Stock which become
exercisable for the first time in the same calendar year as this option, then
the foregoing limitations on the exercisability of such options as Incentive
Options shall be applied on the basis of the order in which such options are
granted.

 

 

EXHIBIT I

NOTICE OF
EXERCISE

 

FOR
EXERCISES EXECUTED THROUGH THE CORPORATION’S STOCK PLAN ADMINISTRATOR, PLEASE
SEE INSTRUCTIONS AND FORMS POSTED ON SUCH ADMINISTRATOR’S WEBSITE

 

 

I
hereby notify United Online, Inc. (the “Corporation”) that I elect to purchase                     
shares of the Corporation’s Common Stock (the “Purchased Shares”) at the option
exercise price of $                     
per share (the “Exercise Price”) pursuant to that certain option (the “Option”)
granted to me under the United Online, Inc. 2001 Stock Incentive Plan on                     ,
            .

Concurrently
with the delivery of this Exercise Notice to the Corporation, I shall hereby
pay to the Corporation the Exercise Price for the Purchased Shares in
accordance with the provisions of my agreement with the Corporation (or other
documents) evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.  Alternatively, I may utilize the special
broker-dealer sale and remittance procedure specified in my agreement to effect
payment of the Exercise Price.

 

	
   

  	
  ,

  	
   

  

Date

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Optionee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print name in exact
  manner it is to appear on the stock certificate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address to which
  certificate is to be sent, if different from address above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security Number:

  	
   

  	
   

  

 

 

APPENDIX

 

The
following definitions shall be in effect under the Agreement:

A.    Agreement
shall mean this Stock Option Agreement.

B.    Board
shall mean the Corporation’s Board of Directors.

C.    Change in
Control shall mean the event of a change in ownership or control
of the Corporation effected through either of the following transactions:

(i)            the
acquisition, directly or indirectly, by any person or related group of persons
(other than the Corporation or a person that directly or indirectly controls,
is controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation’s outstanding
securities pursuant to a tender or exchange offer made directly to the
Corporation’s stockholders, or

(ii)           a
change in the composition of the Board over a period of thirty-six (36)
consecutive months or less such that a majority of the Board members ceases, by
reason of one or more contested elections for Board membership, to be comprised
of individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time the Board approved
such election or nomination.

D.    Code
shall mean the Internal Revenue Code of 1986, as amended.

E.     Common
Stock shall mean shares of the Corporation’s common stock.

F.     Corporate
Transaction shall mean either of the following stockholder
approved transactions to which the Corporation is a party:

(i)            a merger, consolidation or
reorganization approved by the Corporation’s stockholders, unless
securities representing more than fifty percent (50%) of the total combined
voting power of the voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly and in substantially
the same proportion, by the persons who beneficially owned the Corporation’s
outstanding voting securities immediately prior to such transaction, or

(ii)           any stockholder-approved transfer or
other disposition of all or substantially all of the Corporation’s assets.

G.    Corporation
shall mean United Online, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of United
Online, Inc. which has assumed the Plan.

H.    Employee shall mean an
individual who is in the employ of the Corporation (or any Parent or
Subsidiary), subject to the control and direction of the employer entity as to
both the work to be performed and the manner and method of performance.

 

A-1

 

I.      Exercise
Date shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.

J.     Exercise
Price shall mean the exercise price per Option Share as
specified in the Grant Notice.

K.    Exercise
Schedule shall mean the installment schedule specified in the
Grant Notice pursuant to which the option is to become exercisable for the
Option Shares in a series of installments over Optionee’s period of Service.

L.     Expiration
Date shall mean the date on which the option expires as
specified in the Grant Notice.

M.   Fair
Market Value per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

(i)            If
the Common Stock is at the time traded on the Nasdaq Stock Market, then the
Fair Market Value shall be deemed equal to the closing selling price per share
of Common Stock on the date in question, as the price is reported by the
National Association of Securities Dealers on the Nasdaq Stock Market. If there
is no closing selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the last preceding
date for which such quotation exists, or

(ii)           If
the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be deemed equal to the closing selling price per share of
Common Stock on the date in question on the Stock Exchange determined by the
Plan Administrator to be the primary market for the Common Stock, as such price
is officially quoted in the composite tape of transactions on such
exchange.  If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which such
quotation exists.

N.    Grant
Date shall mean the date of grant of the option as specified in
the Grant Notice.

O.    Grant
Notice shall mean the Notice of Grant of Stock Option or the
Certificate of Stock Option Grant accompanying the Agreement or posted on a
website maintained by the Corporation’s stock plan administrator containing the
terms authorized by the Corporation, pursuant to which Optionee has been
informed of the basic terms of the option evidenced hereby.

P.     Incentive
Option shall mean an option which satisfies the requirements of
Code Section 422.

Q.    Involuntary
Termination shall mean the termination of Optionee’s Service by
reason of:

        (i)    Optionee’s involuntary dismissal or discharge by the Corporation
(or any Parent or Subsidiary) for reasons other than Misconduct, or

        (ii)   Optionee’s
voluntary resignation following (A) a material reduction in the scope of his or
her day-to-day responsibilities for the Corporation (or any Parent or
Subsidiary), it being understood that a change in Optionee’s title shall not,
in and of itself, be deemed a material reduction, (B) a reduction in Optionee’s
base salary or (C) a relocation of Optionee’s place of employment by more than
fifty (50)

 

A-2

 

miles, provided and only if such change, reduction or
relocation is effected by the Corporation (or any Parent or Subsidiary) without
Optionee’s consent.

R.    Misconduct
shall mean the commission of any act of fraud, embezzlement or dishonesty by
Optionee, any unauthorized use or disclosure by Optionee of confidential
information or trade secrets of the Corporation (or any Parent or Subsidiary),
or any other intentional misconduct by Optionee adversely affecting the
business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner.  The foregoing
definition shall not be deemed to be inclusive of all the acts or omissions
which the Corporation (or any Parent or Subsidiary) may consider as grounds for
the dismissal or discharge of Optionee or any other individual in the Service
of the Corporation (or any Parent or Subsidiary).

S.     Non-Statutory
Option shall mean an option not intended to satisfy the
requirements of Code Section 422.

T.    Notice of
Exercise shall mean the notice of exercise in the form attached
hereto as Exhibit I.

U.    Option
Shares shall mean the number of shares of Common Stock subject
to the Option as specified in the Grant Notice; provided, however, that the
Grant Notice may include only a portion of Option Shares subject to the Option
if such Option has been split between an Incentive Option and a Non-Statutory
Option.

V.    Optionee
shall mean the person to whom the option is granted as specified in the Grant
Notice.

W.   Parent
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

X.    Permanent
Disability shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or has lasted or
can be expected to last for a continuous period of twelve (12) months or more.

Y.    Plan
shall mean the United Online, Inc. 2001 Stock Incentive Plan.

Z.    Plan
Administrator shall mean either the Board or a committee of the
Board acting in its capacity as administrator of the Plan.

AA.  Service
shall mean the Optionee’s performance of services for the Corporation (or any
Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the
board of directors or an independent contractor.

BB.  Stock
Exchange shall mean the American Stock Exchange or the New York
Stock Exchange.

CC.  Subsidiary
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

 

A-3

 

EXHIBIT
B

PLAN
SUMMARY AND PROSPECTUS

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