Document:

Exhibit
10.36

 

 

 

 

CREDIT AGREEMENT

 

Dated as of August 13, 2003

 

among

 

BUILDING MATERIALS HOLDING CORPORATION,

 

BMC WEST CORPORATION

AND OTHER SUBSIDIARY GUARANTORS,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent, Co-Lead Arranger and L/C Issuer,

 

GENERAL ELECTRIC CAPITAL CORPORATION,

 

as Co-Lead Arranger,

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Syndication Agent,

 

UNION BANK OF CALIFORNIA, N.A.,

 

as Documentation Agent

 

and

 

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

 

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE
  I

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.01

  	
  Certain Defined Terms

  	
   

  
	
   

  	
  1.02

  	
  Other Interpretive Provisions

  	
   

  
	
   

  	
  1.03

  	
  Accounting Principles

  	
   

  
	
   

  	
  1.04

  	
  Treatment of
  Non-Wholly-Owned Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE CREDITS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.01

  	
  Amounts and Terms of
  Commitments

  	
   

  
	
   

  	
  2.02

  	
  Loan Accounts

  	
   

  
	
   

  	
  2.03

  	
  Procedure for Borrowing

  	
   

  
	
   

  	
  2.04

  	
  Conversion and
  Continuation Elections

  	
   

  
	
   

  	
  2.05

  	
  Voluntary Termination or
  Reduction of Commitments

  	
   

  
	
   

  	
  2.06

  	
  Swingline Loans

  	
   

  
	
   

  	
  2.07

  	
  Optional Prepayments

  	
   

  
	
   

  	
  2.08

  	
  Mandatory Prepayments of
  Loans; Mandatory Commitment Reductions

  	
   

  
	
   

  	
  2.09

  	
  Repayment

  	
   

  
	
   

  	
  2.10

  	
  Interest

  	
   

  
	
   

  	
  2.11

  	
  Fees

  	
   

  
	
   

  	
  2.12

  	
  Computation of Fees and
  Interest

  	
   

  
	
   

  	
  2.13

  	
  Payments by Holdings

  	
   

  
	
   

  	
  2.14

  	
  Payments by the Lenders
  to the Administrative Agent

  	
   

  
	
   

  	
  2.15

  	
  Sharing of Payments, Etc

  	
   

  
	
   

  	
  2.16

  	
  Security and Guaranty

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  THE LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.01

  	
  The Letter of Credit
  Subfacility

  	
   

  
	
   

  	
  3.02

  	
  Issuance, Amendment and
  Renewal of Letters of Credit

  	
   

  
	
   

  	
  3.03

  	
  Risk Participations, Drawings and Reimbursements

  	
   

  
	
   

  	
  3.04

  	
  Repayment of
  Participations

  	
   

  
	
   

  	
  3.05

  	
  Role of the L/C Issuer

  	
   

  
	
   

  	
  3.06

  	
  Obligations Absolute

  	
   

  
	
   

  	
  3.07

  	
  Cash Collateral Pledge

  	
   

  
	
   

  	
  3.08

  	
  Letter of
  Credit Fees

  	
   

  
	
   

  	
  3.09

  	
  Applicability of
  ISP98 and UCP

  	
   

  
	
   

  	
  3.10

  	
  Trade Bank as L/C Issuer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  TAXES, YIELD PROTECTION
  AND ILLEGALITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.01

  	
  Taxes

  	
   

  
	
   

  	
  4.02

  	
  Illegality

  	
   

  
	
   

  	
  4.03

  	
  Increased Costs and
  Reduction of Return

  	
   

  
	
   

  	
  4.04

  	
  Funding Losses

  	
   

  
	
   

  	
  4.05

  	
  Inability to Determine
  Rates

  	
   

  
	
   

  	
  4.06

  	
  Certificates of
  Lenders

  	
   

  
	
   

  	
  4.07

  	
  Substitution of
  Lenders

  	
   

  
	
   

  	
  4.08

  	
  Survival

  	
   

  

 

i

 

	
  ARTICLE V

  	
  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.01

  	
  Conditions to Signing
  Date

  	
   

  
	
   

  	
  5.02

  	
  Conditions to
  Effective Date

  	
   

  
	
   

  	
  5.03

  	
  Conditions to
  the Subsequent Effective Date

  	
   

  
	
   

  	
  5.04

  	
  Conditions to
  All Credit Extensions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.01

  	
  Corporate
  Existence and Power

  	
   

  
	
   

  	
  6.02

  	
  Corporate
  Authorization; No Contravention

  	
   

  
	
   

  	
  6.03

  	
  Governmental
  Authorization

  	
   

  
	
   

  	
  6.04

  	
  Binding Effect

  	
   

  
	
   

  	
  6.05

  	
  Litigation

  	
   

  
	
   

  	
  6.06

  	
  No Defaults

  	
   

  
	
   

  	
  6.07

  	
  ERISA
  Compliance

  	
   

  
	
   

  	
  6.08

  	
  Use of Proceeds;
  Margin Regulations

  	
   

  
	
   

  	
  6.09

  	
  Title to Properties; Liens

  	
   

  
	
   

  	
  6.10

  	
  Taxes

  	
   

  
	
   

  	
  6.11

  	
  Financial Condition

  	
   

  
	
   

  	
  6.12

  	
  Environmental
  Matters

  	
   

  
	
   

  	
  6.13

  	
  Collateral
  Documents

  	
   

  
	
   

  	
  6.14

  	
  Regulated
  Entities

  	
   

  
	
   

  	
  6.15

  	
  No Burdensome
  Restrictions

  	
   

  
	
   

  	
  6.16

  	
  Copyrights, Patents,
  Trademarks and Licenses, Etc

  	
   

  
	
   

  	
  6.17

  	
  Subsidiaries

  	
   

  
	
   

  	
  6.18

  	
  Insurance

  	
   

  
	
   

  	
  6.19

  	
  Swap
  Obligations

  	
   

  
	
   

  	
  6.20

  	
  Real Property

  	
   

  
	
   

  	
  6.21

  	
  Full Disclosure

  	
   

  
	
   

  	
  6.22

  	
  Internal
  Controls

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.01

  	
  Financial
  Statements

  	
   

  
	
   

  	
  7.02

  	
  Certificates; Other
  Information

  	
   

  
	
   

  	
  7.03

  	
  Notices

  	
   

  
	
   

  	
  7.04

  	
  Preservation of Corporate
  Existence, Etc.

  	
   

  
	
   

  	
  7.05

  	
  Maintenance of
  Property

  	
   

  
	
   

  	
  7.06

  	
  Insurance

  	
   

  
	
   

  	
  7.07

  	
  Payment
  of Obligations

  	
   

  
	
   

  	
  7.08

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
  7.09

  	
  Compliance
  with ERISA

  	
   

  
	
   

  	
  7.10

  	
  Inspection
  of Property and Books and Records

  	
   

  
	
   

  	
  7.11

  	
  Environmental
  Laws

  	
   

  
	
   

  	
  7.12

  	
  Use of Proceeds

  	
   

  
	
   

  	
  7.13

  	
  Additional Guarantors

  	
   

  
	
   

  	
  7.14

  	
  Additional
  Subsidiaries

  	
   

  
	
   

  	
  7.15

  	
  Environmental
  Review

  	
   

  

 

ii

 

	
   

  	
  7.16

  	
  Further
  Assurances

  	
   

  
	
   

  	
  7.17

  	
  Appraisals/Title Insurance

  	
   

  
	
   

  	
  7.18

  	
  Intercompany
  Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.01

  	
  Limitation on Liens

  	
   

  
	
   

  	
  8.02

  	
  Disposition of
  Assets

  	
   

  
	
   

  	
  8.03

  	
  Consolidations
  and Mergers

  	
   

  
	
   

  	
  8.04

  	
  Loans and Investments

  	
   

  
	
   

  	
  8.05

  	
  Limitation on Indebtedness

  	
   

  
	
   

  	
  8.06

  	
  Transactions with Affiliates

  	
   

  
	
   

  	
  8.07

  	
  Use of Proceeds

  	
   

  
	
   

  	
  8.08

  	
  Contingent
  Obligations

  	
   

  
	
   

  	
  8.09

  	
  Subsidiaries

  	
   

  
	
   

  	
  8.10

  	
  Lease
  Obligations

  	
   

  
	
   

  	
  8.11

  	
  Restricted
  Payments

  	
   

  
	
   

  	
  8.12

  	
  ERISA

  	
   

  
	
   

  	
  8.13

  	
  Capital
  Expenditures

  	
   

  
	
   

  	
  8.14

  	
  Sales
  and Leasebacks

  	
   

  
	
   

  	
  8.15

  	
  Certain
  Payments

  	
   

  
	
   

  	
  8.16

  	
  Modification of
  Subordinated Debt Documents

  	
   

  
	
   

  	
  8.17

  	
  Change in
  Business

  	
   

  
	
   

  	
  8.18

  	
  Accounting
  Changes

  	
   

  
	
   

  	
  8.19

  	
  Financial
  Covenants

  	
   

  
	
   

  	
  8.20

  	
  No Restrictions
  on Subsidiary Dividends

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.01

  	
  Event of
  Default

  	
   

  
	
   

  	
  9.02

  	
  Remedies

  	
   

  
	
   

  	
  9.03

  	
  Specified
  Swap Contract Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  THE ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.01

  	
  Appointment and
  Authorization; “Administrative Agent”

  	
   

  
	
   

  	
  10.02

  	
  Delegation of
  Duties

  	
   

  
	
   

  	
  10.03

  	
  Liability of
  Administrative Agent

  	
   

  
	
   

  	
  10.04

  	
  Reliance by Administrative
  Agent

  	
   

  
	
   

  	
  10.05

  	
  Notice of Default

  	
   

  
	
   

  	
  10.06

  	
  Credit Decision

  	
   

  
	
   

  	
  10.07

  	
  Indemnification
  of Administrative Agent

  	
   

  
	
   

  	
  10.08

  	
  Administrative
  Agent in Individual Capacity

  	
   

  
	
   

  	
  10.09

  	
  Successor Administrative
  Agent

  	
   

  
	
   

  	
  10.10

  	
  Withholding Tax

  	
   

  
	
   

  	
  10.11

  	
  Collateral
  Matters

  	
   

  
	
   

  	
  10.12

  	
  Syndication
  Agent, Documentation Agent, Co-Lead Arranger

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.01

  	
  Amendments
  and Waivers

  	
   

  
	
   

  	
  11.02

  	
  Notices

  	
   

  

 

iii

 

	
   

  	
  11.03

  	
  No Waiver; Cumulative
  Remedies

  	
   

  
	
   

  	
  11.04

  	
  Costs and Expenses

  	
   

  
	
   

  	
  11.05

  	
  Indemnification

  	
   

  
	
   

  	
  11.06

  	
  Marshalling; Payments
  Set Aside

  	
   

  
	
   

  	
  11.07

  	
  Successors and Assigns

  	
   

  
	
   

  	
  11.08

  	
  Assignments,
  Participations, Etc

  	
   

  
	
   

  	
  11.09

  	
  Confidentiality

  	
   

  
	
   

  	
  11.10

  	
  Set-off

  	
   

  
	
   

  	
  11.11

  	
  [Intentionally
  omitted.]

  	
   

  
	
   

  	
  11.12

  	
  Guaranty

  	
   

  
	
   

  	
  11.13

  	
  Notification of Addresses,
  Lending Offices, Etc

  	
   

  
	
   

  	
  11.14

  	
  Counterparts

  	
   

  
	
   

  	
  11.15

  	
  Severability

  	
   

  
	
   

  	
  11.16

  	
  No Third
  Parties Benefited

  	
   

  
	
   

  	
  11.17

  	
  Governing
  Law and Jurisdiction

  	
   

  
	
   

  	
  11.18

  	
  Waiver of Jury
  Trial

  	
   

  
	
   

  	
  11.19

  	
  Entire
  Agreement

  	
   

  
	
   

  	
  11.20

  	
  Treatment
  of Existing Credit Agreement

  	
   

  

 

iv

 

	
  ANNEXES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annex
  I

  	
  Pricing
  Grid

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2.01

  	
  Commitments and Proportionate Shares

  	
   

  
	
  Schedule 2.09

  	
  Term B Loan Amortization Schedule

  	
   

  
	
  Schedule 6.05

  	
  Litigation

  	
   

  
	
  Schedule 6.07

  	
  ERISA

  	
   

  
	
  Schedule 6.11

  	
  Permitted Liabilities

  	
   

  
	
  Schedule 6.12

  	
  Environmental Matters

  	
   

  
	
  Schedule 6.15

  	
  Burdensome Restrictions

  	
   

  
	
  Schedule 6.17

  	
  Subsidiaries and Minority Interests

  	
   

  
	
  Schedule 6.18

  	
  Insurance Matters

  	
   

  
	
  Schedule 6.20

  	
  Owned Real Property

  	
   

  
	
  Schedule 8.01

  	
  Permitted Liens

  	
   

  
	
  Schedule 8.05

  	
  Permitted Indebtedness

  	
   

  
	
  Schedule 8.08

  	
  Contingent Obligations

  	
   

  
	
  Schedule 11.02

  	
  Payment Offices; Addresses for Notices;
  Lending Offices

  	
   

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1

  	
  Form of Notice of Revolving Borrowing

  	
   

  
	
  Exhibit A-2

  	
  Form of Notice of Term B Loan Borrowing

  	
   

  
	
  Exhibit B-1

  	
  Form of Notice of Revolving Loan
  Conversion/Continuation

  	
   

  
	
  Exhibit B-2

  	
  Form of Notice of Term B Loan
  Conversion/Continuation

  	
   

  
	
  Exhibit C

  	
  Form of Compliance Certificate

  	
   

  
	
  Exhibit D

  	
  Form of Legal Opinion of Counsel to Loan Parties

  	
   

  
	
  Exhibit E

  	
  Form of Assignment and Acceptance

  	
   

  
	
  Exhibit F-1

  	
  Form of Revolving Note

  	
   

  
	
  Exhibit F-2

  	
  Form of Term B Note

  	
   

  
	
  Exhibit G

  	
  Form of Additional Guarantor Assumption Agreement

  	
   

  
	
  Exhibit H

  	
  Form of Legal Opinion of Additional Guarantor’s
  Counsel

  	
   

  
	
  Exhibit I

  	
  Form of Borrowing Base Certificate

  	
   

  
	
  Exhibit J-1

  	
  Form of Security Agreement

  	
   

  
	
  Exhibit J-2

  	
  Form of Second Amendment to Intellectual Property
  Security Agreement

  	
   

  
	
  Exhibit K

  	
  Form of Update Certificate

  	
   

  
	
  Exhibit L

  	
  Form of Second Amendment to Deeds of Trust

  	
   

  
	
   

  	
   

  	
   

  
					

 

v

 

CREDIT
AGREEMENT

 

This CREDIT AGREEMENT (this “Agreement”) is
entered into as of August 13, 2003, by and among (i) BUILDING MATERIALS HOLDING
CORPORATION, a Delaware corporation (“Holdings”), as borrower, (ii) BMC
WEST CORPORATION, a Delaware corporation (the “Company”), and certain
other affiliates of Holdings, as guarantors, (iii) the several financial
institutions from time to time party to this Agreement (individually, a “Lender”
and, collectively, the “Lenders”), (iv) GENERAL ELECTRIC CAPITAL
CORPORATION, as Co-Lead Arranger, (v) U.S. BANK NATIONAL ASSOCIATION, as
Syndication Agent, (vi) UNION BANK OF CALIFORNIA, N.A., as Documentation Agent
and (vii) WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as the
L/C Issuer (as defined herein), the Swingline Lender (as defined herein), the
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), and the Co- Lead Arranger of the credit facilities described
herein.

 

RECITALS

 

A.            WHEREAS,
Holdings previously entered into that certain Credit Agreement, dated as of November 30,
1999, which was subsequently amended and restated pursuant to that certain
Amended and Restated Credit Agreement, dated as of August 30, 2001, by and
among (i) Holdings, as borrower, (ii) the Company and certain other affiliates
of Holdings, as guarantors, (iii) the several financial institutions party
thereto, as lenders (each, an “Existing Lender” and, collectively, the “Existing
Lenders”), (iv) First Union National Bank, as syndication agent, and (v)
Wells Fargo, as letter of credit issuing bank, swingline bank, and
administrative agent for the Existing Lenders and as lead arranger of the
credit facilities provided therein (as amended and restated, and as further
amended prior to the date hereof, the “Existing Credit Agreement”).

 

B.            WHEREAS,
Holdings has requested that the Existing Credit Agreement be further amended
and restated in order to (i) decrease the Revolving Commitment initially to
$175,000,000, which amount may be subsequently increased in accordance with the
terms and conditions hereof, (ii) replace the Existing Term Commitment with a
new Term B Commitment, initially in an aggregate amount of $125,000,000, which
amount may be subsequently increased in accordance with the terms and
conditions hereof, (iii) replace certain of the Existing Lenders that do not
desire to be party to this Agreement (collectively, the “Departing Lenders”)
with new financial institutions which desire to be party to this Agreement as
Lenders (collectively, the “New Lenders”), (iv) reallocate the
outstanding Obligations among those Existing Lenders that desire to be party to
this Agreement (collectively, the “Remaining Lenders”) and the New
Lenders, and (v) make certain other changes.

 

C.            WHEREAS,
the parties hereto are willing to so amend and restate the Existing Credit
Agreement upon the terms and subject to the conditions set forth herein.

 

AGREEMENT

 

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

 

 

ARTICLE I

 

DEFINITIONS

 

1.01         Certain Defined
Terms.  The following terms have the
following meanings when used herein (including in the Recitals hereof):

 

“Account” means for purposes of this Agreement
and the Borrowing Base Certificate, any right of payment of Holdings or any
Guarantor for goods sold or leased or for services rendered in the ordinary
course of business which is not evidenced by an instrument (except as part of
chattel paper), whether or not it has been earned by performance.

 

“Account Debtor” means the Person obligated on
an Account.

 

“Acquisition” means any transaction or series
of related transactions for the purpose of or resulting, directly or
indirectly, in (i) the acquisition of all or substantially all of the assets of
a Person, or of any business or division of a Person, (ii) the acquisition
of in excess of 50% of the capital stock, partnership interests, membership
interests or equity of any Person, or otherwise causing any Person to become a
Subsidiary, or (iii) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary), provided
that Holdings or the Company, as the case may be (or the Subsidiary), is the
surviving Person.

 

“Additional Lenders” means the financial institutions
(if any) which agree to provide Additional Term B Loans and/or make Additional
Revolving Commitments to Holdings in accordance with the terms and conditions
set forth herein by becoming parties to this Agreement on the Subsequent
Effective Date.

 

“Additional Guarantor Accession Date” has the
meaning specified in Section 7.13.

 

“Additional Guarantor Assumption Agreement” has
the meaning specified in Section 7.13.

 

“Additional Revolving Commitment” has the
meaning specified in Section 2.01(d).

 

“Additional Term B Commitment” has the meaning
specified in Section 2.01(c).

 

“Additional Term B Loan” has the meaning
specified in Section 2.01(c).

 

“Administrative Agent” has the meaning
specified in the preamble, and any successor Administrative Agent arising
under Section 10.09.

 

“Administrative Agent-Related Persons” means
Wells Fargo and any successor Administrative Agent arising under Section
10.09 and any L/C Issuer hereunder, together with their respective
Affiliates (including, in the case of Wells Fargo, the Co-Lead Arranger), and
the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.

 

2

 

“Administrative Agent’s Payment Office” means
the address for payments set forth on Schedule 11.02 or such other
address as the Administrative Agent may from time to time specify.

 

“Affiliate” means, as to any Person, any other
Person which, directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. 
A Person shall be deemed to control another Person if the controlling
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the other Person, whether through
the ownership of voting securities, membership interests, by contract, or
otherwise.

 

“Aggregate Commitment” means the combined
Commitments of the Lenders, which combined Commitments shall not exceed
$300,000,000 as of the Effective Date and which amount may be increased, on the
Subsequent Effective Date, by no more than $50,000,000 pursuant to Section
2.01(c) and Section 2.01(d).

 

“Aggregate Revolving Commitment” means the
combined Revolving Commitments of the Revolving Lenders, which combined
Revolving Commitments shall not exceed $175,000,000 as of the Effective Date,
which amount includes both the L/C Commitment and the Swingline Commitment and
which amount may be increased on the Subsequent Effective Date pursuant to Section 2.01(d),
by no more than an amount equal to the difference of (i) $50,000,000 minus
(ii) the amount (if any) by which the Aggregate Term B Commitment is being
increased on the Subsequent Effective Date pursuant to Section 2.01(c).

 

“Aggregate Term B Commitment” means the
combined Term B Commitments of the Term B Lenders, which Term B Commitments
shall not exceed $125,000,000 as of the Effective Date and which amount may be
increased on the Subsequent Effective Date pursuant to Section 2.01(c),
by no more than an amount equal to the difference of (i) $50,000,000 minus
(ii) the amount (if any) by which the Aggregate Revolving Commitment is being
increased on the Subsequent Effective Date pursuant to Section 2.01(d).

 

“Agreement” means this Credit Agreement.

 

“Applicable Fee Amount” means with respect to
the Commitment Fees and Standby Letter of Credit fees payable hereunder, the
amount set forth opposite the indicated Level below the heading “Commitment
Fee” or “Letter of Credit Fee,” as applicable, in the pricing grid set forth on
Annex I in accordance with the parameters for calculations of such
amount also set forth on Annex I.

 

“Applicable Margin” means (i) with respect
to Base Rate Loans and Offshore Rate Loans which are Revolving Loans, the
amount set forth opposite the indicated Level below the heading “Base Rate
Spread or “Offshore Rate Spread” in the pricing grid set forth on Annex I
in accordance with the parameters for calculations of such amounts also set
forth on Annex I, and (ii) with respect to Term B Loans which
are Base Rate Loans, 2.50%, and with respect to Term B Loans which are
Offshore Rate Loans, 3.25%.

 

“Assignee” has the meaning specified in Section
11.08(a).

 

3

 

“Attorney Costs” means and includes all fees
and disbursements of any law firm or other external counsel, the allocated cost
of internal legal services and all disbursements of internal counsel.

 

“Available Commitment” has the meaning
specified in Section 2.11(b).

 

“Bankruptcy Code” means the Federal Bankruptcy
Reform Act of 1978 (11 U.S.C. §101, et  seq.).

 

“Base Rate” means, for any day, the higher
of:  (i) 0.50% per annum above the
latest Federal Funds Rate, and (ii) the rate of interest in effect for
such day as publicly announced from time to time by Wells Fargo at its
principal office in San Francisco as its prime rate.  (The prime rate is a rate set by Wells Fargo based upon various
factors including Wells Fargo’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.)  Any change in the prime rate announced by
Wells Fargo shall take effect at the opening of business on the day specified
in the public announcement of such change.

 

“Base Rate Loan” means a Loan that bears
interest based on the Base Rate.

 

“Borrowing” means a borrowing hereunder
consisting of (i) Loans of the same Type made to Holdings on the same day
by the Lenders under Article II, and, in the case of Offshore Rate Loans,
having the same Interest Period, (ii) a Swingline Loan (or Swingline
Loans) made to Holdings on the same day by the Swingline Lender, or
(iii) an L/C Borrowing.

 

“Borrowing Base” means, at any time, an amount
equal to the sum of: (i) 80% of the value of the Accounts measured at the
end of the most recently completed month; plus (ii) 60% of the
value of the Inventory measured at the end of the most recently completed
month.  As used in this definition, “value”
as applied to Inventory shall mean the lower of cost and market, or if there at
any time exist any other matters, events, conditions or contingencies which the
Majority Revolving Lenders reasonably believe may cause a material portion of
the Accounts to be unpaid, the Majority Revolving Lenders, in their sole
discretion, may exclude any of the Accounts or Inventory from the Borrowing
Base if the Majority Revolving Lenders reasonably determine that the inclusion
of such Account or Inventory in the Borrowing Base would have a Material
Adverse Effect.

 

“Borrowing Base Certificate” means a
certificate substantially in the form of Exhibit I.

 

“Borrowing Date” means any date on which a
Borrowing occurs under Section 2.03.

 

“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks in New York City or San
Francisco are authorized or required by law to close and, if the applicable
Business Day relates to any Offshore Rate Loan, means such a day on which
dealings are carried on in the London or other applicable offshore Dollar
interbank market.

 

“Capital Adequacy Regulation” means any
guideline, request or directive of any central bank or other Governmental
Authority, or any other law, rule or regulation, whether or not

 

4

 

 

having the force of law,
in each case, regarding capital adequacy of any bank or of any corporation
controlling a bank.

 

“Capital Expenditure Annual Limit” means, for
any fiscal year, the sum of (i) $35,000,000 plus (ii) 3.0% of the
aggregate sales reported by all Persons acquired by Holdings or its
Subsidiaries in such fiscal year pursuant to a Permitted Acquisition, as
reported by each such acquired Person in its financial statements for such
Person’s then most recent fiscal year-end, plus (iii) the amount of
proceeds of any Disposition or Event of Loss which are reinvested as Capital
Expenditures within six (6) months of Holdings’ or any Subsidiary’s receipt of
such proceeds.

 

“Capital Expenditures” means, for any period,
the aggregate of all expenditures (including the current portion of Capital
Leases) which are required to be capitalized on the consolidated balance sheet
of Holdings and its Subsidiaries during that period, in accordance with GAAP,
excluding Acquisitions permitted by Section 8.04(e).

 

“Capital Lease” means, for any Person, any
lease of property (whether real, personal or mixed) which, in accordance with
GAAP, would, at the time a determination is made, be required to be recorded as
a capital lease in respect of which such Person is liable as lessee.

 

“Cash Collateralize” means to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of the
Administrative Agent, the L/C Issuer and the Revolving Lenders, as additional
collateral for the L/C Obligations, cash or deposit account balances pursuant
to the Security Agreement.  Derivatives
of such term shall have corresponding meaning.

 

“Change of Control” means any person or group
of persons (within the meaning of section 13 or 14 of the Exchange Act)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC under the Exchange Act) of 20% or more of the
outstanding shares of common stock of Holdings; or, the replacement of a
majority of the board of directors of Holdings over a one year period from the
directors who constituted the board of directors at the beginning of such
period, and the election or nomination for election of such replacements shall
not have been approved by a vote of at least a majority of the board of
directors then still in office who either were members of such board of
directors at the beginning of such period or whose election or nomination as a
member of such board of directors was previously so approved.

 

“Co-Lead Arranger” means each of Wells Fargo
Bank and General Electric Capital Corporation, each in their respective
capacity as Co-Lead Arranger and Book Manager.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all tangible and intangible
property and interests in property and proceeds thereof now owned or hereafter
acquired by Holdings and any Guarantor in or upon which a Lien (i) existed in
favor of the administrative agent and the Existing Lenders party to the
Existing Credit Agreement immediately prior to the Effective Date, or (ii) now
or hereafter exists in favor of the Lenders, or the Administrative Agent on
behalf of the Lenders on and after the Effective Date, whether under this
Agreement or under any other Collateral Documents.

 

5

 

“Collateral Documents” mean, collectively,
(i) the Security Agreement, the Intellectual Property Security Agreements,
the Second Amendment to Intellectual Property Security Agreements, the
Mortgages and all other security agreements, mortgages, deeds of trust, patent
and trademark assignments, lease assignments and other similar agreements
between Holdings or any Guarantor and the Lenders, or the Administrative Agent
for the benefit of the Lenders, now or hereafter delivered to the Lenders or
the Administrative Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable documents now
or hereafter filed in accordance with the Uniform Commercial Code or comparable
law) against Holdings or any Guarantor as debtor in favor of the Lenders, or
the Administrative Agent for the benefit of the Lenders, as secured party, and
(ii) any amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.

 

“Commercial Letter of Credit” means a
commercial Letter of Credit Issued for the account of Holdings in respect of
the purchase of Inventory or other goods and services by Holdings or any of its
Subsidiaries in the ordinary course of business.

 

“Commitment,” as to each Lender, means the sum
of its Revolving Commitment and Term B Commitment.

 

“Commitment Fees” has the meaning specified in Section
2.11(b).

 

“Company” has the meaning specified in the preamble.

 

“Compliance Certificate” means a certificate
substantially in the form of Exhibit C.

 

“Consolidated Net Worth” means, as of the date
of determination, the consolidated shareholders’ equity of Holdings and its
Subsidiaries, as determined in accordance with GAAP.

 

“Consolidated Net Income” means, as of the date
of determination, the consolidated net income of Holdings and its Subsidiaries,
as determined in accordance with GAAP.

 

“Consolidated Total Assets” means, as of the
date of determination, the consolidated Total Assets of Holdings and its Subsidiaries,
as determined in accordance with GAAP.

 

“Contingent Obligation” means (without
duplication), as to any Person, any direct or indirect liability of that
Person, whether or not contingent, with or without recourse, (i) with
respect to any Indebtedness, lease, dividend, letter of credit or other
obligation (the “primary obligations”) of another Person (the “primary
obligor”), including any obligation of that Person (a) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (b) to advance or provide funds for the payment or discharge of
any such primary obligation, or 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, (c) to 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 to make payment of such primary obligation, (d) in
connection with any synthetic lease or other similar off balance sheet lease
transaction, or (e) otherwise to assure or hold harmless the holder of any
such primary obligation against loss in respect thereof (each a “Guaranty

 

6

 

Obligation”);
(ii) with respect to any Surety Instrument issued for the account of that
Person or as to which that Person is otherwise liable for reimbursement of
drawings or payments; (iii) to purchase any materials, supplies or other
property from, or to obtain the services of, another Person if the relevant
contract or other related document or obligation requires that payment for such
materials, supplies or other property, or for such services, shall be made
regardless of whether delivery of such materials, supplies or other property is
ever made or tendered, or such services are ever performed or tendered;
(iv) in respect of Earn-Out Obligations; (v) in respect of any Swap
Contract; and (vi) in respect of Stock Price Guaranties.  The amount of any Contingent Obligation
shall, in the case of Guaranty Obligations, be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof, and in the case of other
Contingent Obligations other than in respect of Swap Contracts, shall be equal
to the maximum reasonably anticipated liability in respect thereof and, in the
case of Contingent Obligations in respect of Swap Contracts, shall be equal to
the Swap Termination Value.

 

“Contractual Obligation” means, as to any
Person, any provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by which
it or any of its property is bound.

 

“Conversion/Continuation Date” means any date
on which, under Section 2.04, Holdings (i) converts Loans of
one Type to another Type, or (ii) continues as Loans of the same Type, but
with a new Interest Period, Loans having Interest Periods expiring on such
date.

 

“Credit Extension” means and includes
(i) the making of any Revolving Loans, Term B Loans or Swingline Loans
hereunder, and (ii) the Issuance of any Letters of Credit hereunder.

 

“Date of Acceleration” means the earlier of (i)
the termination of the Revolving Loan Commitments and (ii) the declaration by
the Administrative Agent of all or a portion of the outstanding Revolving Loans
and Term B Loans to be immediately due and payable, without presentment,
demand, protest or any other notice of any kind.

 

“Default” means any event or circumstance
which, with the giving of notice, the lapse of time, or both, would (if not
cured or otherwise remedied during such time) constitute an Event of Default.

 

“Defaulting Lender” means a Lender that has
failed to fund its portion of any Borrowing that it is required to fund under
this Agreement and has continued in such failure for three (3) Business Days
after written notice from the Administrative Agent.

 

“Departing Lender” has the meaning specified in
Recital B.

 

“Disposition” means the sale, lease, conveyance
or other disposition of property, other than sales or other dispositions
expressly permitted under Sections 8.02(a) through 8.02(g).

 

7

 

“Disposition Value” means the aggregate net
book value of all assets sold, transferred, leased or disposed of in any
transaction determined as of the date of such transfer or proposed transfer
thereof.

 

“Dollars,” “dollars” and “$” each
mean lawful money of the United States.

 

“Earn-out Obligations” means any obligations,
whether contingent or matured, to pay additional consideration in connection
with the Acquisition by Holdings or any Subsidiary of any capital stock or
assets of any Person.

 

“EBITA” means, for any period, for Holdings and
its Subsidiaries, the sum of consolidated net income of Holdings and its
Subsidiaries for such period (exclusive of extraordinary gains and losses and
exclusive of earnings from Minority Investments but including earnings from
Wholly-Owned Subsidiaries and Non-Wholly-Owned Subsidiaries (but in the case of
Non-Wholly-Owned Subsidiaries, only to the extent of the ratable portion of
ownership by Holdings or any Wholly-Owned Subsidiaries of Holdings in such
Non-Wholly-Owned Subsidiaries)) plus (to the extent deducted in
determining consolidated net income) (i) Interest Expense for such period,
(ii) income tax expense for such period, (iii) amortization expense
and other non-cash expenses for such period (other than depreciation expense)
and (iv) cash distributions in respect of Minority Investments, in each case,
measured in accordance with GAAP.

 

“EBITDA” means, for any period, for Holdings
and its Subsidiaries, the sum of consolidated net income of Holdings and its
Subsidiaries for such period (exclusive of extraordinary gains and losses and
exclusive of earnings from Minority Investments but including earnings from
Wholly-Owned Subsidiaries and Non-Wholly-Owned Subsidiaries (but in the case of
Non-Wholly-Owned Subsidiaries, only to the extent of the ratable portion of
ownership by Holdings or any Wholly-Owned Subsidiaries of Holdings in such
Non-Wholly-Owned Subsidiaries)) plus (to the extent deducted in
determining consolidated net income) (i) Interest Expense for such period,
(ii) income tax expense for such period, (iii) depreciation expense,
amortization expense and other non-cash expenses for such period and
(iv) cash distributions in respect of Minority Investments, in each case,
measured in accordance with GAAP.  For
purposes of determining the consolidated EBITDA of Holdings and its
Subsidiaries hereunder for purposes of calculating the EBITDA Ratio hereunder,
EBITDA shall be adjusted upon the Permitted Acquisition of any acquired
Subsidiary (the “Acquiree”) (A) to include the historical financial
results of such Acquiree for  the four
fiscal quarter period (“Calculation Period”) for which Holdings’
consolidated EBITDA is calculated hereunder, until such time as the first day
of any Calculation Period falls on or after the date on which the Acquisition
of such Acquiree is consummated; and (B) to exclude any specific, identifiable
expense items which are eliminated as a result of the Permitted Acquisition of
such Acquiree at the closing thereof, provided that, if available, audited
financial statements accompanied by an unqualified opinion of an Independent
Auditor are delivered to the Administrative Agent and the Lenders in respect of
such Acquiree for the then most recent fiscal year of such Acquiree, and provided
further that Holdings shall have delivered a certificate of a Responsible
Officer clearly setting forth such pro forma additions to consolidated EBITDA
resulting from the Permitted Acquisition of such Acquiree.

 

8

 

“EBITDA Ratio” means, as of the end of any
fiscal quarter, measured on a consolidated basis for Holdings and its
Subsidiaries as of such date, the ratio of (i) Total Funded Debt existing
on such date to (ii) EBITDA for the period of four fiscal quarters ending
on such date.

 

“Effective Amount” means (i) with respect
to any Revolving Loans, Term B Loans and Swingline Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Revolving Loans, Term B Loans and
Swingline Loans occurring on such date; and (ii) with respect to any
outstanding L/C Obligations on any date, the amount of such L/C Obligations on
such date after giving effect to any Issuances of Letters of Credit occurring
on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in
the maximum amount available for drawing under Letters of Credit taking effect
on such date; provided that for purposes of Section 2.08, the
Effective Amount shall be determined without giving effect to any mandatory
prepayments to be made under Section 2.08.

 

“Effective Date” means the date on which all
conditions precedent set forth in Section 5.02 are satisfied or
waived by all of the Lenders (or, in the case of Section 5.02(c), waived
by the Person entitled to receive such payment) which date shall not be later
than August 21, 2003.

 

“Eligible Assignee” means (i) a commercial
bank or licensed lending institution organized under the laws of the United
States, or any state thereof, and having a combined capital and surplus of at
least $100,000,000; (ii) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation
and Development (the “OECD”), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000, provided
that such bank is acting through a branch or agency located in the United
States; (iii) a Financial Institution, including, without limitation, a fund,
that invests in and holds bank loans and (iv) a Person that is primarily
engaged in the business of commercial lending and that is (a) a Subsidiary
of a Lender, (b) a Subsidiary of a Person of which a Lender is a
Subsidiary, or (c) a Person of which a Lender is a Subsidiary.

 

“Environmental Claims” means all claims,
however asserted, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law,
or for release or injury to the environment or threat to public health,
personal injury (including sickness, disease or death), property damage,
natural resources damage, or otherwise alleging liability or responsibility for
damages (punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental, placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from any property, whether or not owned by Holdings or any Subsidiary.

 

“Environmental Laws” means all federal, state
or local laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental

 

9

 

Authorities, in each case
relating to environmental, health, safety and land use matters; including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”),
the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid
Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the
Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, the California Hazardous Waste Control Law, the California
Solid Waste Management, Resource, Recovery and Recycling Act, the California
Water Code and the California Health and Safety Code.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974.

 

“ERISA Affiliate” means any trade or business
(whether or not incorporated) under common control with Holdings or the Company
within the meaning of section 414(b) or (c) of the Code (and sections
414(m) and (o) of the Code for purposes of provisions relating to section 412
of the Code).

 

“ERISA Event” means (i) a Reportable Event
with respect to a Pension Plan; (ii) a withdrawal by Holdings, the Company
or any ERISA Affiliate from a Pension Plan subject to section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in
section 4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under section 4062(e) of ERISA; (iii) a complete or
partial withdrawal by Holdings, the Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (iv) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (v) an event or condition which might
reasonably be expected to constitute grounds under section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (vi) the imposition of any liability under
Title IV of ERISA, other than PBGC premiums due but not delinquent under
section 4007 of ERISA, upon Holdings, the Company or any ERISA Affiliate.

 

“Estimated Remediation Costs” means all costs
associated with performing work to remediate contamination of real property or
groundwater, including engineering and other professional fees and expenses,
costs to remove, transport and dispose of contaminated soil, costs to “cap” or
otherwise contain contaminated soil, and costs to pump and treat water and
monitor water quality.

 

“Eurodollar Reserve Percentage” has the meaning
specified in the definition of “Offshore Rate.”

 

“Event of Default” means any of the events or
circumstances specified in Section 9.01.

 

“Event of Loss” means, with respect to any
property, any of the following: 
(i) any loss, destruction or damage of such property; (ii) any
pending or threatened institution of any proceedings for the condemnation or
seizure of such property or for the exercise of any right of eminent domain; or
(iii) any actual condemnation, seizure or taking, by exercise of the power
of eminent domain or otherwise, of such property, or confiscation of such
property or the requisition of the use of such property.

 

10

 

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

 

“Existing Credit Agreement” has the meaning
specified in Recital A.

 

“Existing Lender” has the meaning specified in Recital
A.

 

“Existing Term Commitment” means the “Term
Commitment” set forth in the Existing Credit Agreement.

 

“Federal Funds Rate” means, for any day, the
rate set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Bank of New York
with respect to the preceding Business Day opposite the caption “Federal Funds
(Effective)”; or, if for any relevant day such rate is not so published with
respect to any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.

 

“Fee Letter” has the meaning specified in Section
2.11(a).

 

“Financial Institution” means a Person which,
for purposes of Section 25118 of the Corporations Code of the State of California,
has the capacity to protect its own interests in connection with the
transactions contemplated by this Agreement.

 

“FRB” means the Board of Governors of the
Federal Reserve System, and any Governmental Authority succeeding to any of its
principal functions.

 

“Funded Debt” means, as of any date of
determination, all Indebtedness of Holdings and its Subsidiaries on such date,
on a consolidated basis in accordance with GAAP, including all Revolving Loans
and all Term B Loans, but excluding all L/C Obligations.

 

“Further Taxes” means any and all present or
future taxes, levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges (including net income taxes and franchise
taxes), and all liabilities with respect thereto, imposed by any jurisdiction
on account of amounts payable or paid pursuant to Section 4.01.

 

“GAAP” means generally accepted accounting
principles set forth from time to time in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination, subject to Section 1.03.

 

“Governmental Authority” means any nation or
government, any state or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, 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.

 

11

 

“Guarantor” means the Company and each other
direct or indirect U.S. Wholly-Owned Subsidiary of Holdings that currently
exists or is hereinafter acquired or created and which is a party to a Guaranty
in its capacity as a guarantor hereunder; provided, however, that
in no event shall the definition of Guarantor include BMC Insurance, Inc.

 

“Guaranty” means the guaranty of each Guarantor
made pursuant to Section 11.12 and any other guaranty under any separate
agreement executed by any Guarantor pursuant to which it guarantees the
Obligations.

 

“Guaranty Obligation” has the meaning specified
in the definition of “Contingent Obligation.”

 

“Hazardous Materials” means all those
substances that are regulated by, or which may form the basis of liability
under, any Environmental Law, including any substance identified under any
Environmental Law as a pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or toxic
substance, or petroleum or petroleum derived substance or waste.

 

“Holdings” has the meaning specified in the preamble.

 

“Honor Date” has the meaning specified in Section
3.03(b).

 

“Indebtedness” of any Person means, without
duplication, (i) all indebtedness for borrowed money; (ii) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in the ordinary
course of business on ordinary terms but including all non-contingent Earn-Out
Obligations); (iii) all reimbursement or payment obligations with respect
to Surety Instruments (contingent or otherwise); (iv) all obligations
evidenced by notes, bonds, debentures or similar instruments, including obligations
so evidenced incurred in connection with the acquisition of property, assets or
businesses; (v) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either
case with respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the event of default
are limited to repossession or sale of such property); (vi) all
obligations with respect to Capital Leases; (vii) all indebtedness
referred to in clauses (i) through (vi) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including accounts and contracts
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; (viii) all Guaranty
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (i) through (vii) above; and (ix) all Stock Price
Guaranties having a tenor of six (6) months or more or exceeding $2,000,000 in
the aggregate for all Stock Price Guaranties then outstanding.  For all purposes of this Agreement, the
Indebtedness of any Person shall include all recourse Indebtedness of any
partnership or joint venture or limited liability company in which such Person
is a general partner or a joint venturer or a member.

 

“Indemnified Liabilities” has the meaning
specified in Section 11.05(a).

 

“Indemnified Person” has the meaning specified
in Section 11.05(a).

 

12

 

“Independent Auditor” has the meaning specified
in Section 7.01(a).

 

“Insolvency Proceeding” means, with respect to
any Person, (i) any case, action or proceeding with respect to such Person
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (ii) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in either case undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.

 

“Intellectual Property Security Agreement” has
the meaning specified in the Security Agreement.

 

“Interest Expense” means, for any period, for
Holdings and its Subsidiaries in accordance with GAAP, all interest in respect
of Indebtedness accrued or capitalized during such period (whether or not
actually paid during such period).

 

“Interest Payment Date” means, (i) as to any
Offshore Rate Loan, the last day of each Interest Period applicable to such
Loan, (ii) as to any Base Rate Loan, the last Business Day of each
calendar quarter and the Revolving Loan Maturity Date (in the case of Revolving
Loans) and the Term B Loan Maturity Date (in the case of Term B Loans) and
(iii) as to any Swingline Loan, each of the last Business Day of each calendar
quarter and the Revolving Loan Maturity Date; provided, however,
that if any Interest Period for an Offshore Rate Loan exceeds three months, the
date that falls three months after the beginning of such Interest Period and
after each Interest Payment Date thereafter is also an Interest Payment Date.

 

“Interest Period” means, as to any Offshore
Rate Loan, the period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or continued
as an Offshore Rate Loan, and ending on the date one, two, three or six months
thereafter, as selected by Holdings in its Notice of Borrowing or Notice of
Conversion/Continuation; provided that:

 

(i)            if
any Interest Period would otherwise end on a day that is not a Business Day,
that Interest Period shall be extended to the following Business Day unless, in
the case of an Offshore Rate Loan, the result of such extension would be to
carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the preceding Business Day;

 

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

 

(iii)          no
Interest Period for any Term B Loan shall extend beyond the Term B Loan
Maturity Date and no Interest Period for any Revolving Loan shall extend beyond
the Revolving Loan Maturity Date; and

 

13

 

(iv)          no
Interest Period applicable to a Term B Loan or portion thereof shall extend
beyond any date upon which is due any scheduled principal payment in respect of
the Term B Loans unless the aggregate principal amount of Term B Loans
represented by Base Rate Loans or Offshore Rate Loans having Interest Periods
that will expire on or before such date, equals or exceeds the amount of such
principal payment.

 

“Inventory” means for purposes of this
Agreement and the Borrowing Base Certificate, all goods of Holdings or any
Subsidiary held for sale or lease in the ordinary course of business, work in
process and any and all raw materials used in connection with the foregoing.

 

“Investment” has the meaning specified in Section
8.04.

 

“IRS” means the Internal Revenue Service, and
any Governmental Authority succeeding to any of its principal functions under
the Code.

 

“Issuance Date” has the meaning specified in Section
3.01(a).

 

“Issue” means, with respect to any Letter of
Credit, to issue or to extend the expiry of, or to renew or increase the amount
of or otherwise amend, such Letter of Credit; and the terms “Issued,” “Issuing”
and “Issuance” have corresponding meanings.

 

“L/C Advance” means each Revolving Lender’s
participation in any L/C Borrowing in accordance with its Proportionate Share.

 

“L/C Amendment Application” means an
application form for amendment of outstanding Standby or Commercial Letters of
Credit as shall at any time be in use at the L/C Issuer, as the L/C Issuer
shall request.

 

“L/C Application” means an application form for
issuances of Standby or Commercial Letters of Credit as shall at any time be in
use at the L/C Issuer, as the L/C Issuer shall request.

 

“L/C Borrowing” means an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made nor converted into a Borrowing of Revolving
Loans under Section 3.03(c).

 

“L/C Commitment” means the commitment of the
L/C Issuer to Issue, and the commitment of the Revolving Lenders severally to
participate in, Letters of Credit from time to time Issued or outstanding under
Article III, in an aggregate amount not to exceed on any date the amount
of $30,000,000, as the same shall be reduced as a result of a reduction in the
L/C Commitment pursuant to Section 2.05 or Section 2.08; provided
that the L/C Commitment is a part of the combined Revolving Commitments of the Revolving
Lenders rather than a separate, independent commitment; and provided  further
that if as a result of any Commitment reductions hereunder the L/C Commitment
shall exceed the combined Revolving Commitments of the Revolving Lenders, the
L/C Commitment shall automatically reduce by the amount of such excess.

 

14

 

“L/C Issuer” means Wells Fargo (or Trade Bank,
as agent for Wells Fargo) in its capacity as issuer of one or more Letters of
Credit hereunder, together with any replacement letter of credit issuer arising
under Section 10.01(b) or Section 10.09.

 

“L/C Obligations” means at any time the sum of
(i) the aggregate undrawn amount of all Letters of Credit then
outstanding, plus (ii) the amount of all unreimbursed drawings
under all Letters of Credit, including all outstanding L/C Borrowings.

 

“L/C-Related Documents” means the Letters of
Credit, the L/C Applications, the L/C Amendment Applications and any other
document relating to any Letter of Credit, including any of the L/C Issuer’s
standard form documents for letter of credit issuances.

 

“Lender” has the meaning specified in the preamble,
and includes both Revolving Lenders and Term B Lenders, provided, however,
that after the Subsequent Effective Date, any Additional Lenders shall also be
deemed “Lenders” for all purposes hereunder.  References to the “Lenders” shall include Wells Fargo,
including in its capacity as L/C Issuer and Swingline Lender; for purposes of
clarification only, to the extent that Wells Fargo may have any rights or
obligations in addition to those of the Lenders due to its status as L/C Issuer
or Swingline Lender, its status as such will be specifically referenced.  Unless the context otherwise clearly
requires, “Lender” includes any such institution in its capacity as Swap
Provider.  Unless the context otherwise
clearly requires, references to any such institution as a “Lender” shall
also include any of such institution’s Affiliates that may at any time of
determination be Swap Providers.

 

“Lending Office” means, as to any Lender, the
office or offices of such Lender specified as its “Lending Office” or “Domestic
Lending Office” or “Offshore Lending Office,” as the case may be, on Schedule
11.02, or such other office or offices as such Lender may from time to time
notify to Holdings and the Administrative Agent.

 

“Letters of Credit” means any letters of credit
Issued by the L/C Issuer pursuant to Article III (which may be
Commercial Letters of Credit or Standby Letters of Credit).

 

“Lien” means any security interest, mortgage,
deed of trust, pledge, hypothecation, assignment, charge or deposit
arrangement, encumbrance, lien (statutory or other) or preferential arrangement
of any kind or nature whatsoever in respect of any property (including those
created by, arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the Uniform Commercial Code
or any comparable law) and any contingent or other agreement to provide any of
the foregoing, but not including the interest of a lessor under an Operating
Lease.

 

“Loan” means an extension of credit by a Lender
to Holdings (i) under Article II, which may be a Base Rate Loan, an
Offshore Rate Loan or a Swingline Loan (each a “Type” of Loan), and
includes a Revolving Loan or Term B Loan, or (ii) under Article III in
the form of an L/C Advance.

 

15

 

“Loan Documents” means this Agreement, any
Notes, any Guaranty, the Collateral Documents, the Fee Letter, the L/C-Related
Documents, any documents evidencing or relating to Specified Swap Contracts and
all other documents delivered to the Administrative Agent or any Lender in
connection herewith.

 

“Loan Party” means the Company, Holdings and
each other Guarantor.

 

“Majority Class Lenders” means, at any time
with respect to any action or vote, each of (i) the Majority Revolving Lenders
and (ii) the Majority Term B Lenders.

 

“Majority Lenders” means (i) prior to the Date
of Acceleration, two or more Lenders whose Revolving Proportionate Shares of
the Revolving Commitments and Term B Proportionate Shares of the outstanding
amount of Term B Loans then exceed fifty percent (50.0%) of the sum of the
Revolving Commitments at such time and the outstanding amount of Term B Loans
at such time, and (ii) from and after the Date of Acceleration, two or more
Lenders whose Revolving Proportionate Shares of the Revolving Commitments and
Term B Proportionate Shares of the outstanding amount of Term B Loans then
exceed fifty percent (50.0%) of the sum of the Revolving Commitments at such
time and the outstanding amount of all Term B Loans at such time, except, in
each case, at any time any Lender is a Defaulting Lender; provided, however,
that in each case, at any time any Lender is a Defaulting Lender, all
Defaulting Lenders shall be excluded in determining “Majority Lenders” and such
Defaulting Lenders’ Proportionate Share shall be excluded in determining the
sum of the Revolving Commitments at such time and the outstanding amount of
Term B Loans at such time, and “Majority Lenders” means two or more
non-Defaulting Lenders otherwise meeting the criteria set forth in this
definition.

 

“Majority Revolving Lenders” means two or more
Revolving Lenders whose Revolving Proportionate Shares then exceed fifty
percent (50.0%) of the Revolving Commitments (or, if the Revolving Commitments
are terminated, Revolving Lenders having in excess of 50.0% of the sum of the
Effective Amount of all Revolving Loans, L/C Obligations and all Swingline
Loans at any time outstanding); provided, however, that at any
time any Revolving Lender is a Defaulting Lender, all Defaulting Lenders shall
be excluded in determining “Majority Revolving Lenders” and such Defaulting
Lenders’ Revolving Proportionate Share shall be excluded in determining the
Revolving Commitments or sum of the Effective Amount of all Revolving Loans,
L/C Obligations and all Swingline Loans at any time outstanding, as the case
may be, and “Majority Revolving Lenders” means two or more non-Defaulting
Lenders (or if there is only one non-Defaulting Lender, such Lender) having
total Revolving Commitments exceeding 50.0% of the total Revolving Commitments
of all non-Defaulting Lenders (or, if the Revolving Commitments are terminated,
non-Defaulting Lenders having in excess of 50.0% of the sum the Effective
Amount of the total Revolving Loans, all L/C Obligations and all Swingline
Loans of all non-Defaulting Lenders at any time outstanding).

 

“Majority Term B Lenders” means two or more
Term B Lenders whose Term B Proportionate Shares then exceed fifty percent
(50.0%) of the Effective Amount of all Term B Loans, provided, however,
that any time a Term B Lender is a Defaulting Lender, all Defaulting Lenders
shall be excluded in determining “Majority Term B Lenders” and such Defaulting
Lenders’ Term B Proportionate Share shall be excluded in determining the
Effective Amount of

 

16

 

all Term B Loans, and
“Majority Term B Lenders” shall thereupon mean non-Defaulting Term B Lenders
having Term B Loans exceeding 50.0% of the total Term B Loans of all
non-Defaulting Lenders.

 

“Margin Stock” means “margin stock” as such
term is defined in Regulation T, U or X of the FRB.

 

“Material Adverse Effect” means (i) a
material adverse change in, or a material adverse effect upon, the operations,
business, properties, condition (financial or otherwise) or prospects of
Holdings or Holdings and its Subsidiaries taken as a whole; (ii) a
material impairment of the ability of any Loan Party to perform under any Loan
Document and to avoid any Event of Default; or (iii) a material adverse
effect upon (a) the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document or (b) the perfection or priority
of any Lien granted under the Collateral Documents.

 

“Minimum Amount” means (i) in respect of
any Borrowing, conversion or continuation of Loans, (a) in the case of
Base Rate Loans, an aggregate minimum amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof, (b) in the case of Offshore Rate
Loans, an aggregate minimum amount of $5,000,000 or any integral multiple of
$1,000,000 in excess thereof and (c) in the case of Swingline Loans, an
aggregate minimum amount of $100,000 or any integral multiple of $100,000 in
excess thereof (or such other amount as shall be acceptable to the Swingline
Lender), (ii) in the case of any reduction of the Commitments under Section
2.05, $5,000,000 or any multiple of $1,000,000 in excess thereof, and
(iii) in the case of any optional prepayment of Loans under Section
2.07, $5,000,000 or any multiple of $1,000,000 in excess thereof.

 

“Minority Investment” means the direct or
indirect Investment by Holdings in any Person, provided in each case
that such Person is not a Subsidiary at the time of such Investment and after
giving effect thereto.

 

“Mortgage” means any deed of trust, mortgage,
assignment of rents or other document creating a Lien on real property or any
interest in real property owned by Holdings, the Company or any Wholly-Owned
Subsidiary.

 

“Mortgaged Property” means all real property
subject to a Mortgage as set forth on Schedule 6.20 hereto.

 

“Multiemployer Plan” means a “multiemployer
plan,” within the meaning of section 4001(a)(3) of ERISA, to which Holdings,
the Company or any ERISA Affiliate makes, is making, or is obligated to make
contributions or, during the preceding three calendar years, has made, or been
obligated to make, contributions.

 

“Net Issuance Proceeds” means, as to any
issuance of debt or equity by any Person, cash proceeds received or receivable
by such Person in connection therewith, net of out-of-pocket costs and expenses
paid or incurred in connection therewith in favor of any Person not an
Affiliate of such Person.

 

17

 

“Net Proceeds” means, as to any Disposition by
a Person, proceeds in cash, checks or other cash equivalent financial
instruments as and when received by such Person, net of: (i) the direct
costs relating to such Disposition excluding amounts payable to such Person or
any Affiliate of such Person, (ii) sale, use or other transaction taxes
and capital gains taxes paid or payable by such Person as a direct result
thereof, and (iii) amounts required to be applied to repay principal,
interest and prepayment premiums and penalties on Indebtedness secured by a
purchase money security interest on any asset which is the subject of such
Disposition.  “Net Proceeds”
shall also include proceeds paid on account of any Event of Loss, net of
(a) all money actually applied to repair or reconstruct the damaged
property or property affected by the condemnation or taking, (b) all of
the costs and expenses incurred in connection with the collection of such
proceeds, award or other payments, and (c) any amounts retained by or paid
to parties having superior rights to such proceeds, awards or other
payments.  For purposes of determining
the amount of Net Proceeds in respect of any Disposition or Event of Loss,
however, the amount of proceeds calculated as provided above shall be reduced
by the amount of such proceeds that such Person has used (or intends to use
within 365 days of the date of receipt of such proceeds) to pay the purchase
price in connection with any Permitted Acquisition, Minority Investment or any
Capital Expenditures (to the extent permitted hereunder), it being understood
that any portion of such proceeds that has not been so used within such 365-day
period shall be deemed to be Net Proceeds received on the last day of such
365-day period and that all such proceeds shall be deemed to be Net Proceeds at
any time that an Event of Default exists hereunder; provided, however,
that if such Person only uses a portion of such Net Proceeds for said Permitted
Acquisition, Minority Investment or Capital Expenditure, then the amount of
proceeds calculated as provided above shall be reduced by the amount of such
proceeds so used.

 

“New Lenders” has the meaning specified in Recital
B.

 

“Non-Wholly-Owned Subsidiaries” means all
direct and indirect Subsidiaries of Holdings which are not Wholly-Owned
Subsidiaries.

 

“Notes” means, collectively, the Revolving
Notes and the Term B Notes.

 

“Notice of Borrowing” means a Notice of
Revolving Loan Borrowing or a Notice of Term B Loan Borrowing, as applicable.

 

“Notice of Conversion/Continuation” means a
Notice of Revolving Loan Conversion/Continuation or a Notice of Term B Loan
Conversion/Continuation, as applicable.

 

“Notice of Revolving Loan Borrowing” means a
notice in substantially the form of Exhibit A-1.

 

“Notice of Revolving Loan Conversion/Continuation”
means a notice in substantially the form of Exhibit B-1.

 

“Notice of Term B Loan Borrowing” means a
notice in substantially the form of Exhibit A-2.

 

18

 

“Notice of Term B Loan Conversion/Continuation”
means a notice in substantially the form of Exhibit B-2.

 

“Obligations” means the Revolving Loans, Term B
Loans, Swingline Loans, L/C Obligations and other Indebtedness arising under
any Loan Document owing by Holdings to any Lender, the Administrative Agent,
the L/C Issuer, the Swingline Lender or any Indemnified Person, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising.

 

“Offshore Rate” means, for any Interest Period,
with respect to Offshore Rate Loans comprising part of the same Borrowing, the
rate of interest per annum (rounded upward to the next 1/16th of 1%) determined
by the Administrative Agent as follows:

 

	
  Offshore Rate =

  	
   

  	
  LIBOR

  
	
   

  	
   

  	
  1.00 — Eurodollar
  Reserve Percentage

  

 

Where,

 

“Eurodollar Reserve
Percentage” means for any day for any Interest Period the maximum reserve
percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%)
in effect on such day (whether or not applicable to any Lender) under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred
to as “Eurocurrency liabilities”); and

 

“LIBOR”
means:  (i) the rate of interest
per annum determined by the Administrative Agent to be the rate of interest per
annum (rounded upward to the nearest 1/100th of 1%) appearing on Dow Jones Page
3750 (as defined below) for Dollar deposits having a maturity comparable to
such Interest Period, at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the commencement of such Interest Period, subject to
clause (ii) below; or (ii) if for any reason the rate is not
available as provided in the preceding clause (i) of this definition,
“LIBOR” instead means the rate of interest per annum determined by the
Administrative Agent to be the arithmetic mean (rounded upward to the nearest
1/16th of 1%) of the rates of interest per annum notified to the Administrative
Agent by Wells Fargo as the rate of interest at which Dollar deposits in the
approximate amount of the Offshore Rate Loan to be made, continued or converted
by Wells Fargo, and having a maturity comparable to such Interest Period, would
be offered to major banks in the London interbank market at their request at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the
commencement of such Interest Period. 
As used in this definition, “Dow Jones Page 3750” means the
display designated as “3750” on the Dow Jones Market Service (formerly known as
the Telerate Service) or any replacement page thereof or successor thereto.

 

The Offshore Rate shall
be adjusted automatically as to all Offshore Rate Loans then outstanding as of
the effective date of any change in the Eurodollar Reserve Percentage.

 

“Offshore Rate Loan” means a Loan that bears
interest based on the Offshore Rate.

 

19

 

“Operating Lease” means, for any Person, any
lease of property (whether real, personal or mixed) which, in accordance with
GAAP, would, at the time a determination is made, be required to be recorded as
an operating lease in respect of which such Person is liable as lessee.

 

“Organization Documents” means, for any Person,
the certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation, any shareholder rights agreement, any other applicable
organizational or constitutional documents and all applicable resolutions of
the board of directors (or any committee thereof) of such Person

 

“Other Taxes” means any present or future stamp,
court or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or otherwise
with respect to, this Agreement or any other Loan Documents.

 

“Outstanding Existing Term Loan” has the
meaning specified in Section 2.01(a).

 

“Participant” has the meaning specified in Section
11.08(d).

 

“PBGC” means the Pension Benefit Guaranty
Corporation, or any Governmental Authority succeeding to any of its principal
functions under ERISA.

 

“Pension Plan” means a pension plan (as defined
in section 3(2) of ERISA) subject to Title IV of ERISA which Holdings or the
Company sponsors, maintains, or to which it makes, is making, or is obligated
to make contributions, or in the case of a multiple employer plan (as described
in section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five (5) plan years.

 

“Permitted Acquisition” means any Acquisition
that conforms to the following requirements: 
(i) the assets, Person, division or line of business to be acquired
is in a substantially similar or ancillary line of business as the Company or
one of its Wholly-Owned Subsidiaries, (ii) the Administrative Agent and
the Lenders shall have received promptly, and in any event no less than ten
(10) Business Days prior to the consummation of such Acquisition, (a) financial
information regarding the assets, Person or business to be acquired, including
the most recent audited financial statements, if available, but in any case the
most recently prepared balance sheet, statement of income and statement of cash
flows for the assets, Person or business to be acquired and pro forma projected
financial statements showing the effect of the Acquisition of the assets,
Person or business on Holdings, including a balance sheet for Holdings and its
Subsidiaries as of the time of the Acquisition and projected statements of
income and cash flows for Holdings and its Subsidiaries through at least the
Revolving Loan Maturity Date, and (b) a completed worksheet in substantially
the form of Schedule 1 to the Compliance Certificate demonstrating Holdings’
pro forma compliance with the financial covenants set forth in Section 8.19,
measured as of the last day of the fiscal quarter then most recently ended,
after giving effect to such Acquisition, (iii) all transactions related to
such Acquisition shall be consummated in accordance with applicable
Requirements of Law, (iv) such Acquisition shall be non-hostile in nature,
(v) the prior, effective written consent or approval to such Acquisition
of the board of directors or equivalent governing body of the acquiree is
obtained, (vi) immediately

 

20

 

after giving effect to
such Acquisition: (a) no Default or Event of Default shall have occurred
and be continuing or would result therefrom, (b) a majority of the capital
stock or similar equity interest of any acquired or newly formed corporation, partnership,
limited liability company or other business entity is owned directly by
Holdings or a U.S. Wholly-Owned Subsidiary of Holdings, and (c) all
actions required to be taken with respect to such acquired or newly formed
Subsidiary under Section 7.13 or as otherwise required under Section
7.14 shall have been taken, and (viii) in the case of any Significant
Acquisition, the Majority Lenders shall have consented in writing to the
consummation of such Acquisition.

 

“Permitted Capital Expenditure Carry-Forward”
means, for any fiscal year, the Dollar amount equal to (i) the maximum
Dollar amount of Capital Expenditures permitted to be incurred by Holdings and
its Subsidiaries in such fiscal year under Section 8.13  minus
(ii) the Dollar amount of Capital Expenditures actually incurred by
Holdings and its Subsidiaries in such fiscal year.

 

“Permitted Equity Offering” means an offering
by Holdings of preferred stock or other equity interests of Holdings, if the
rights, preferences, privileges and use of proceeds of such equity offering
have been approved by the Majority Lenders in writing prior to issuance,
provided that no such securities shall be issued if a Default or Event of
Default exists prior to, or immediately after, such issuance.

 

“Permitted Liens” has the meaning specified in Section
8.01.

 

“Permitted Subordinated Debt” has the meaning
specified in Section 8.05(j).

 

“Permitted Swap Obligations” means all
obligations (contingent or otherwise) of Holdings or any Subsidiary existing or
arising under Swap Contracts, provided that each of the following
criteria is satisfied:  (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments or assets held or reasonably anticipated by such
Person, or changes in the value of securities issued by such Person in
conjunction with a securities repurchase program not otherwise prohibited
hereunder, and not for purposes of speculation or taking a “market view;”
(ii) such Swap Contracts do not contain (a) any provision
(“walk-away” provision) exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting
party, or (b) any provision creating or permitting the declaration of an
event of default, termination event or similar event upon the occurrence of an
Event of Default hereunder (other than an Event of Default under Section
9.01(a)).

 

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

 

“Plan” means an employee benefit plan (as
defined in section 3(3) of ERISA) which Holdings or the Company sponsors or
maintains or to which Holdings or the Company makes, is making, or is obligated
to make contributions and includes any Pension Plan.

 

21

 

“Pledged Collateral” means the “Pledged
Collateral” as defined in the Security Agreement and shall include all products
and Proceeds (as defined in the Security Agreement) of the Pledged Collateral.

 

“Proportionate Share” means, (i) with respect
to each Revolving Lender, its Revolving Proportionate Share and (ii) with
respect to each Term B Lender, its Term B Proportionate Share.

 

“Put Obligations” mean obligations of Holdings
either directly or indirectly to repurchase from any Person such Person’s
equity interest in Non-Wholly-Owned Subsidiaries or Minority Investments.

 

“Reimbursement Date” has the meaning specified
in Section 3.03(b).

 

“Remaining Lender” has the meaning specified in
Recital B.

 

“Replacement Lender” has the meaning specified
in Section 4.07.

 

“Reportable Event” means, any of the events set
forth in section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been waived
in regulations issued by the PBGC.

 

“Requirement of Law” means, as to any Person,
any law (statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable to or
binding upon the Person or any of its property or to which the Person or any of
its property is subject.

 

“Responsible Officer” means as to any Person,
the chief executive officer or the president of such Person, or any other
officer having substantially the same authority and responsibility; or, with
respect to compliance with financial covenants, the chief financial officer or
the treasurer of such Person, or any other officer having substantially the
same authority and responsibility.

 

“Revolving Commitment,” as to each Revolving
Lender, has the meaning specified in Section 2.01(b).

 

“Revolving Lender” means any Lender that has a
Revolving Commitment as set forth on Schedule 2.01.

 

“Revolving Loan” has the meaning specified in Section 2.01(b).

 

“Revolving Loan Maturity Date” means the
earlier to occur of:  (i) August
21, 2008; and (ii) the date on which the Revolving Commitments terminate
in accordance with the provisions of this Agreement.

 

“Revolving Note” means a promissory note
executed by Holdings in favor of a Revolving Lender pursuant to Section 2.02(b),
in substantially the form of Exhibit F-1.

 

22

 

“Revolving Proportionate Share” means, as to
any Revolving Lender at any time, the percentage equivalent (expressed as a
decimal, rounded to the ninth decimal place) at such time of, in the case of
the Revolving Commitments or the Revolving Loans, such Revolving Lender’s
Revolving Commitment divided by the aggregate Revolving Commitments of all
Revolving Lenders (or, if all Revolving Commitments have been terminated, the
aggregate principal amount of such Revolving Lender’s Revolving Loans divided
by the aggregate principal amount of the Revolving Loans then held by all
Revolving Lenders).  The initial
Revolving Proportionate Shares of each Revolving Lender are set forth opposite
such Revolving Lender’s name in Schedule 2.01 under the heading
“Proportionate Share (Revolving Commitments).”

 

“SEC” means the Securities and Exchange
Commission, or any Governmental Authority succeeding to any of its principal
functions.

 

“Second Amendment to Deeds of Trust” means,
collectively, those certain Second Amendments to Deeds of Trust, each dated as
of the Effective Date, among Holdings, the Guarantors party thereto and
Administrative Agent in substantially the form of Exhibit L.

 

“Second Amendment to Intellectual Property Security
Agreements” means, collectively, those certain Second Amendments to
Intellectual Property Security Agreements, each dated as of the Effective Date,
between Holdings, the Guarantors party thereto and the Administrative Agent for
the benefit of the Lenders in substantially the form of Exhibit J-2.

 

“Security Agreement” means that certain Amended
and Restated Security Agreement, dated as of the Effective Date, between
Holdings, the Guarantors and the Administrative Agent for the benefit of the Lenders
in substantially the form of Exhibit J-1.

 

“Significant Acquisition” means any Acquisition
by Holdings or any Subsidiary in respect of which the consideration therefor
constitutes cash or cash equivalents and/or assumption and/or incurrence of
Indebtedness which exceeds $25,000,000 exclusive of any Put Obligations, provided,
however, that to the extent any Put Obligations are exercised, the
amount so exercised shall be included in the definition of Significant
Acquisition during the year in which such Put Option was exercised; and provided,
further, however, that to the extent an Acquisition that would
otherwise have been a Significant Acquisition has been approved by the Majority
Lenders, any Put Obligations related to such Acquisition which are subsequently
exercised shall not constitute a Significant Acquisition.

 

“Signing Date” means the date on which all
conditions precedent set forth in Section 5.01 are satisfied or
waived by all of the Lenders.

 

“Specified Swap Contract” means any Swap
Contract made or entered into at any time, or in effect at any time (whether
heretofore or hereafter), whether directly or indirectly, and whether as a
result of assignment or transfer or otherwise, between Holdings and any Swap
Provider which Swap Contract is or was intended by Holdings to have been
entered into for purposes of mitigating interest rate or currency exchange risk
relating to any Loan (which intent shall conclusively be deemed to exist if
Holdings so represents to the Swap Provider in writing), and as to which the
final scheduled payment by Holdings is not later than the Revolving Loan
Maturity Date.

 

23

 

“Standby Letter of Credit” means a standby
Letter of Credit Issued for the account of Holdings to support obligations of
Holdings or any Subsidiary, contingent or otherwise (and excluding all
Commercial Letters of Credit).

 

“Stock Price Guaranty” means a guaranty that
(i) is issued by Holdings or an Affiliate of Holdings in connection with the
Acquisition of another Person, and (ii) is for the payment of cash or issuance
of Holdings’ common stock if the common stock issued by Holdings in connection
with such an Acquisition is sold for less than the price provided for in the
guaranty during its term, provided that for purposes of determining the
amount of any Stock Price Guaranty, the amount of such guaranty shall be equal
to (a) the guaranteed stock price multiplied by the number of shares covered by
the guaranty, minus (b) the current fair market value of one share of
Holdings’ common stock (which fair market value shall be equal to the five day
trailing average closing price for Holdings’ common stock as reported by the
Nasdaq National Stock Market) multiplied by the number of shares covered by the
guaranty, provided  further, that for purposes of determining the
amount of any Stock Price Guaranty which is payable solely in common stock of
Holdings, the amount of such Stock Price Guaranty shall equal zero.

 

“Subordinated Debt Documents” means any
documents and instruments evidencing any Permitted Subordinated Debt.

 

“Subsequent Effective Date” means the date on
which all conditions precedent set forth in Section 5.03 are satisfied
or waived by all Additional Lenders which date (if it shall occur) shall occur on
or prior to February 21, 2005 and shall occur one time only.

 

“Subsidiary” of a Person means any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which more than 50% of the voting stock, membership
interests or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.  Unless the context otherwise clearly
requires, references herein to a “Subsidiary” refer to a Subsidiary of
Holdings; provided, however, that Subsidiary shall only include
BMC Insurance, Inc. for purposes of Sections 6.01,  6.05,  6.06,
6.10,  6.11, 6.14,  6.19,  7.03(b),  7.03(c),  7.04,
7.07,  7.08,  7.10,  8.03,  9.01(b)-(g),  9.01(i)
and 9.01(j).

 

“Surety Instruments” means all letters of
credit (including standby and commercial), banker’s acceptances, bank
guaranties, shipside bonds, surety bonds and similar instruments.

 

“Swap Contract” means any agreement, whether or
not in writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap or option, bond, note or bill option, interest rate option, forward
foreign exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.

 

“Swap Provider” means any Lender, or any
Affiliate of any Lender, that is at the time of determination party to a Swap
Contract with Holdings.

 

24

 

“Swap Termination Value” means, in respect of
any one or more Swap Contracts, after taking into account the effect of any
legally enforceable netting agreement relating to such Swap Contracts,
(i) for any date on or after the date such Swap Contracts have been closed
out and termination value(s) determined in accordance therewith, such
termination value(s), and (ii) for any date prior to the date referenced
in clause (a) the amount(s) determined as the mark-to-market value(s) for
such Swap Contracts, as determined by Holdings based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).

 

“Swingline Lender” means Wells Fargo, in its
capacity as maker of Swingline Loans hereunder.  Specific reference to the Swingline Lender shall exclude the
Swingline Lender in its capacity as a Lender hereunder.

 

“Swingline Commitment” has the meaning specified
in Section 2.06(a).

 

“Swingline Loan” has the meaning specified in Section
2.06(a).

 

“Taxes” means any and all present or future
taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or
similar charges, and all liabilities with respect thereto, excluding, in the
case of each Lender and the Administrative Agent, respectively, taxes imposed
on or measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Lender or the Administrative
Agent, as the case may be, is organized or maintains a Lending Office.

 

“Term B Commitment,” as to each Term B Lender,
has the meaning specified in Section 2.01(a).

 

“Term B Lender” means any Lender that has a
Term B Commitment.

 

“Term B Loan” has the meaning specified in Section 2.01(a).

 

“Term B Loan Maturity Date” means August 21,
2010.

 

“Term B Note” means a promissory note executed
by Holdings in favor of a Lender pursuant to Section 2.02(b), in
substantially the form of Exhibit F-2.

 

“Term B Proportionate Share” means, as to any
Term B Lender at any time, in the case of the Term B Commitments or the Term B
Loans, the percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) of such Term B Lender’s Term B Commitment divided by the
aggregate Term B Commitments of all Term B Lenders (or, if all Term B
Commitments have been terminated, the aggregate principal amount of such Term B
Lender’s Term B Loans divided by the aggregate principal amount of Term B Loans
then held by all Term B Lenders).  The
initial Term B Proportionate Shares of each Term B Lender are set forth
opposite such Lender’s name on a schedule maintained with the Administrative
Agent and countersigned by Holdings.

 

25

 

“Total Assets” means for any date the net book
value of the consolidated assets of Holdings and its Subsidiaries as of the end
of the fiscal quarter ended on or most recently prior to such date.

 

“Total Funded Debt” means, as of any date of
determination, all Funded Debt of Holdings and its Subsidiaries on such date,
on a consolidated basis in accordance with GAAP.

 

“Trade Bank” means Wells Fargo HSBC Trade Bank,
N.A.

 

“Type” has the meaning specified in the
definition of “Loan.”

 

“UCC” means the Uniform Commercial Code as in
effect in the State of California.

 

“Unfunded Pension Liability” means the excess
of a Plan’s benefit liabilities under section 4001(a)(16) of ERISA, over the
current value of that Plan’s assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to section 412 of the
Code for the applicable plan year.

 

“United States” and “U.S.” each means
the United States of America.

 

“Update Certificate” means a certificate in
substantially the form of Exhibit K.

 

“U.S. Subsidiary” and “U.S. Wholly-Owned
Subsidiary” means a Subsidiary or Wholly-Owned Subsidiary, as the case may
be, that is located in and a resident of the United States.

 

“Wells Fargo” has the meaning specified in the preamble,
or any successor by merger thereto.

 

“Wholly-Owned Subsidiary” means any Person in
which (other than directors’ qualifying shares required by law) 100% of the
capital stock or similar equity interest of each class having ordinary voting
power, and 100% of the capital stock or similar equity interest of every other
class, in each case, at the time as of which any determination is being made,
is owned, beneficially and of record, by Holdings, or by one or more of the
other Wholly-Owned Subsidiaries, or both.

 

1.02         Other
Interpretive Provisions.

 

(a)           The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.

 

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

 

(c)           The term “documents” includes any and
all instruments, documents, agreements, certificates, indentures, notices and
other writings, however evidenced.

 

26

 

(d)           The term “including” is not limiting
and means “including without limitation.”

 

(e)           In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including”; the words “to” and “until” each mean “to but excluding,” and
the word “through” means “to and including.”

 

(f)            Unless otherwise expressly provided
herein, (i) references to agreements (including this Agreement) and other
contractual instruments shall be deemed to include all subsequent amendments
and other modifications thereto, but only to the extent such amendments and
other modifications are not prohibited by the terms of any Loan Document (unless
any such prohibitive term has been waived), and (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.

 

(g)           The captions and headings of this
Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.

 

(h)           This Agreement and other Loan
Documents may use several different limitations, tests or measurements to
regulate the same or similar matters. 
All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.  Unless otherwise expressly provided, any reference to any action
of the Administrative Agent or the Lenders by way of consent, approval or
waiver shall be deemed modified by the phrase “in its/their sole discretion.”

 

(i)            This Agreement and the other Loan
Documents are the result of negotiations among the Administrative Agent,
Holdings, the Company and the other parties, have been reviewed by counsel to
the Administrative Agent, Holdings, the Company and such other parties, and are
the products of all parties. 
Accordingly, they shall not be construed against the Lenders or the
Administrative Agent merely because of the Administrative Agent’s or Lenders’
involvement in their preparation.

 

1.03         Accounting
Principles.  (a)  Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied; provided, however,
that if GAAP shall have been modified after the Effective Date and the
application of such modified GAAP shall have a material effect on such
financial computations (including the computations required for the purpose of
determining compliance with the covenants set forth in Article VIII),
then such computations shall be made and such financial statements,
certificates and reports shall be prepared, and all accounting terms not
otherwise defined herein shall be construed, in accordance with GAAP as in
effect prior to such modification, unless and until the Majority Lenders and
Holdings shall have agreed upon the terms of the application of such modified
GAAP.

 

(b)           References herein to “fiscal year”
and “fiscal quarter” refer to such fiscal periods of Holdings.

 

27

 

1.04         Treatment
of Non-Wholly-Owned Subsidiaries. 
To the extent not otherwise set forth in specific definitions or
sections hereof, for purposes of determining compliance with any covenants
contained herein (i) to the extent that any covenant requires the consolidation
of Holdings and its Subsidiaries, such covenant shall be calculated by
consolidating all Non-Wholly-Owned Subsidiaries of Holdings, regardless of
whether such Non-Wholly-Owned Subsidiary would otherwise be consolidated with
Holdings for such calculation pursuant to GAAP (as well as all other Subsidiaries
of Holdings that would otherwise be consolidated pursuant to GAAP) and (ii)
with respect to the financial performance of any Non-Wholly-Owned Subsidiaries,
only the ratable portion based upon Holdings’ direct or indirect ownership
interest in such Non-Wholly-Owned Subsidiary shall be included and all Minority
Investments therein shall be excluded.

 

ARTICLE II

 

THE
CREDITS

 

2.01         Amounts
and Terms of Commitments.

 

(a)           The Term B Credit.  Holdings hereby acknowledges and agrees that
pursuant to the Existing Credit Agreement, the Existing Lenders provided to
Holdings term loans in the aggregate principal amount of $110,000,000, of which
$93,500,000 is outstanding on the date hereof (the “Outstanding Existing
Term Loan”).  On the terms and
subject to the conditions set forth herein, each Term B Lender severally agrees
that on the Effective Date it shall acquire from the Departing Lenders (and, to
the extent necessary, the Remaining Lenders) its Proportionate Share of the
Outstanding Existing Term Loan, whereupon the Outstanding Existing Term Loan
shall be deemed to be automatically converted into and become a part of a new
single loan denominated in Dollars to be advanced to Holdings pursuant to this Section
2.01(a) by the Term B Lenders and Holdings and the Guarantors shall have no
further obligations with respect to the Outstanding Existing Term Loan (i) in
an amount equal to each such Term B Lender’s Term B Commitment and (ii) in an
aggregate amount equal to the Aggregate Term B Commitment.  The parties hereto further acknowledge and
agree that on and after the Effective Date, each Remaining Lender and each New
Lender shall be a Term B Lender under this Agreement and the other Loan
Documents holding Term B Loans, with Term B Commitments and Term B
Proportionate Shares as set forth on a schedule maintained by the
Administrative Agent (each Term B Proportionate Share of such loan, a “Term
B Loan” and each Term B Proportionate Share of the Aggregate Term B
Commitment, a “Term B Commitment”) in an aggregate amount not to exceed
the Aggregate Term B Commitment, with the rights, duties and obligations of
such a Term B Lender under this Agreement and the other Loan Documents.  To effect the foregoing, on the Effective
Date the Administrative Agent shall calculate the Term B Proportionate Share of
each Remaining Lender and each New Lender of the Aggregate Term B
Commitment.  Based upon such
calculation, each New Lender and any applicable Remaining Lender shall purchase
from the Departing Lenders (and, to the extent necessary, the other Remaining
Lenders) such portion of the Outstanding Existing Term Loan as the
Administrative Agent determines is necessary (after taking into account
application of amounts advanced by each Term B Lender in connection with the
new Term B Loan) to cause each Remaining Lender and each New Lender which is a
Term B Lender to hold such Proportionate Share of the outstanding aggregate
Term B Loan in a principal amount equal to such Term B Lender’s Proportionate
Share of such

 

28

 

Aggregate Term B
Commitment.  Amounts that have been
borrowed as Term B Loans which are repaid or prepaid by Holdings may not be
reborrowed.

 

(b)           The Revolving Credit.  Holdings hereby acknowledges and agrees that
pursuant to the Existing Credit Agreement, the Existing Lenders provided to
Holdings revolving loans from time to time in an aggregate principal amount of
up to $190,000,000, of which
[$             ]
in aggregate principal amount is outstanding on the date hereof.  On the terms and subject to the conditions
set forth herein, the parties hereto hereby acknowledge and agree that on and
after the Effective Date, each Remaining Lender and each New Lender that
desires to provide a portion of the revolving credit facility shall be a
Revolving Lender under this Agreement and the other Loan Documents with
Revolving Commitments and Revolving Proportionate Shares as set forth on Schedule
2.01 attached hereto (each such commitment, a “Revolving Commitment”)
in an aggregate amount not to exceed the Aggregate Revolving Commitment, with
the rights, duties and obligations of such a Lender under this Agreement and
the other Loan Documents.  To effect the
foregoing, on the Effective Date, Administrative Agent shall calculate the
Revolving Proportionate Share of each Remaining Lender and each New Lender in
each revolving loan then outstanding (each such loan, together with all other
loans advanced from time to time pursuant to this Section 2.01(b), a “Revolving
Loan”).  Based upon such calculation,
each New Lender and any applicable Remaining Lender shall purchase from the
Departing Lenders (and, to the extent necessary, the other Remaining Lenders)
such shares in the outstanding Revolving Loans (as well as any outstanding L/C
Obligations and Swingline Loans) as Administrative Agent determines is
necessary to cause each Remaining Lender and each New Lender to hold Revolving
Loans (as well as L/C Obligations and Swingline Loans) in each outstanding
Revolving Loan Borrowing in a principal amount equal to such Remaining Lender’s
and such New Lender’s Proportionate Share of such Revolving Loan Borrowings and
Holdings, the Company and the Guarantors shall have no further obligations with
respect to the Existing Credit Facility. 
On and after the Effective Date, on the terms and subject to the
conditions of this Agreement, each Revolving Lender severally agrees to advance
to Holdings from time to time during the period beginning on the Effective Date
and ending on the Revolving Loan Maturity Date such loans in Dollars as
Holdings may request under this Section 2.01; provided, however,
that (i) after giving effect to any Borrowing of Revolving Loans,
(A) the Effective Amount of all outstanding Revolving Loans and Swingline
Loans and the Effective Amount of all L/C Obligations shall not exceed an
amount equal to the lesser of (1) the combined Revolving Commitments of
the Revolving Lenders and (2) the Borrowing Base; and (B) the
Effective Amount of the Revolving Loans of any Revolving Lender plus the
participation of such Revolving Lender in the Effective Amount of all L/C
Obligations and the Effective Amount of all Swingline Loans shall not at any
time exceed such Revolving Lender’s Revolving Commitment.  Within the limits of each Revolving Lender’s
Revolving Commitment, and subject to the other terms and conditions hereof,
Holdings may borrow under this Section 2.01, prepay under Section 2.07
and reborrow under this Section 2.01.

 

(c)           Additional
Term B Loans.  Upon Holding’s written
notice to the Administrative Agent, on the Subsequent Effective Date, one or
more Additional Lenders may become parties to this Agreement (unless already a
party to this Agreement) for the purpose of making additional Term B Loans in
an aggregate amount not to exceed the difference of (A) $50,000,000 minus (B)
the amount (if any) by which the Aggregate Revolving Commitment is being
increased on the Subsequent Effective Date pursuant to Section 2.01(d) (each
Additional

 

29

 

Lender’s Term B Proportionate Share of such amount, an “Additional Term
B Commitment”).  On the Subsequent
Effective Date, each Additional Lender holding an Additional Term B Commitment
shall make a new single loan denominated in Dollars to Holdings in the amount
of such Additional Lender’s Term B Proportionate Share of the Additional Term
Commitment (the “Additional Term B Loan”) upon the terms and subject to the
conditions contained herein, as such terms and conditions may be amended
pursuant to Section 11.01 hereof, and any Additional Lenders not already party
to this Agreement shall become parties to this Agreement by executing a
counterpart signature page to this Agreement and shall be treated as a Term B
Lender for all purposes of this Agreement from and after the Subsequent
Effective Date.  Once the Additional
Term B Loans shall have been made pursuant to this Agreement, (1) the schedule
of Term B Loans maintained by the Administrative Agent shall be deemed to have
been amended to include all Additional Lenders holding an Additional Term B
Commitment party to this Agreement together with such Additional Lenders’
respective Term B Commitment and Term B Proportionate Share, (ii) the schedule
of Term B Loans maintained by the Administrative Agent shall be deemed to have
been amended to adjust the Term B Proportionate Share of all other Term B
Lenders party hereto, (iii) Schedule 2.09 hereto shall be deemed to have been
amended to include the then applicable Term B Loan amortization schedule based
upon the percentages set forth therein, and (iv) the definitions of “Aggregate
Term B Commitment” and “Aggregate Commitment” shall be deemed to have been
amended to include the Additional Term B Commitments made by such Additional
Lenders on the Subsequent Effective Date.  The Additional Term B Loans of the Additional Lenders shall be
deemed to be Term B Loans of such Term B Lenders under this Agreement and the
other Loan Documents for all purposes.

 

(d)           Additional
Revolving Commitments.  Upon Holding’s
written notice to the Administrative Agent, on the Subsequent Effective Date
one or more Additional Lenders may provide additional Revolving Commitments in
an aggregate amount not to exceed the difference of (A) $50,000,000 minus (B)
the amount (if any) by which the Aggregate Term B Commitment is being increased
on the Subsequent Effective Date pursuant to Section 2.01(c) (each such
additional commitment, the “Additional Revolving Commitment”), which Additional
Revolving Commitment may thereafter be made available to Holdings as Revolving
Loans.  Any Additional Lenders not
already party to this Agreement shall become parties to this Agreement by
executing a counterpart signature page to this Agreement and shall be treated
as a Revolving Lenders for all purposes of this Agreement from and after the
Subsequent Effective Date.  Once such
Additional Revolving Commitments shall be deemed to have been made available
pursuant to this Agreement, (i) Schedule 2.01 hereto shall be deemed to have been
amended to include all Additional Lenders holding an Additional Revolving
Commitment as a party to this Agreement together with such Additional Lender’s
respective Revolving Commitment and Revoling Proportionate Share, (ii) Schedule
2.01 hereto shall be deemed to have been amended to adjust the Revolving
Proportionate Share of all other Revolving Lenders party hereto, and (iii) the
definitions of “Aggregate Revolving Commitment” and “Aggregate Commitment”
shall be deemed to have been amended to include the Additional Revolving
Commitments provided by such Additional Lenders on the Subsequent Effective
Date.  To effect the foregoing, on the
Subsequent Effective Date, Administrative Agent shall calculate the Revolving
Proportionate Share of each Revolving Lender and each Additional Lender holding
an Additional Revolving Commitment in each Revolving Loan, L/C Obligation and
Swingline Loan then outstanding.  Based
upon such calculation, each Additional Lender holding an Additional Revolving
Commitment shall purchase from the other Revolving Lenders such portion of the
Aggregate

 

30

 

Revolving Loans, L/C
Obligations and Swingline Loans outstanding immediately prior to the Subsequent
Effective Date as Administrative Agent determines is necessary to cause each
Revolving Lender to hold Revolving Loans, L/C Obligations and Swingline Loans
in a principal amount equal to such Revolving Lender’s Revolving Proportionate
Share of such Revolving Loan Borrowings. 
On and after the Subsequent Effective Date, after giving effect to any
Borrowing of Revolving Loans, (i) the Effective Amount of all outstanding
Revolving Loans and Swingline Loans and the Effective Amount of all L/C
Obligations shall not exceed an amount equal to the lesser of (1) the
combined Revolving Commitments of the Revolving Lenders and (2) the
Borrowing Base; and (ii) the Effective Amount of the Revolving Loans of
any Revolving Lender plus the participation of such Revolving Lender in
the Effective Amount of all L/C Obligations and the Effective Amount of all
Swingline Loans shall not at any time exceed such Revolving Lender’s Revolving
Commitment.  On and after the Subsequent
Effective Date, each Additional Lender holding an Additional Revolving
Commitment shall be a Revolving Lender under this Agreement and the other Loan
Documents for all purposes with Revolving Commitments and Revolving
Proportionate Shares as set forth on Schedule 2.01 attached hereto in an
aggregate amount not to exceed the Aggregate Revolving Commitment, with the
rights, duties and obligations of such a Revolving Lender under this Agreement
and the other Loan Documents.

 

2.02         Loan
Accounts.  (a)  The Loans made by each Lender and the
Letters of Credit Issued by the L/C Issuer shall be evidenced by one or more
accounts or records maintained by such Lender or L/C Issuer, as the case may
be, in the ordinary course of business. 
The accounts or records maintained by the Administrative Agent, the L/C
Issuer and each Lender shall be conclusive absent manifest error of the amount
of the Loans made by the Lenders to Holdings and the Letters of Credit Issued
for the account of Holdings, and the interest and payments thereon.  Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation of Holdings
hereunder to pay any amount owing with respect to the Loans or any Letter of
Credit.

 

(b)           Upon the request of any Lender made
through the Administrative Agent, the Loans made by such Lender may be
evidenced by one or more Notes, instead of or in addition to loan
accounts.  Each such Lender shall
endorse on the schedules annexed to its Note(s) the date, amount and maturity
of each Loan made by it and the amount of each payment of principal made by
Holdings with respect thereto.  Each
such Lender is irrevocably authorized by Holdings to endorse its Note(s) and
each Lender’s record shall be conclusive absent manifest error; provided,
however, that the failure of a Lender to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of Holdings hereunder or under any such Note to such Lender.

 

2.03         Procedure
for Borrowing.  (a)  Each Borrowing of Loans shall be made upon
Holdings’ irrevocable written notice delivered to the Administrative Agent in
the form of a Notice of Borrowing (which notice must be received by the
Administrative Agent (i) prior to 9:00 a.m. (San Francisco time) at
least three (3) Business Days prior to the requested Borrowing Date, in the
case of Offshore Rate Loans, except in the case of Swingline Loans, in which
case such notice must be received by 9:00 a.m. (San Francisco time) on the
requested Borrowing Date; and (ii) prior to 9:00 a.m. (San Francisco
time) on the requested Borrowing Date, in the case of Base Rate Loans,
specifying:

 

31

 

(i)            the amount of the Borrowing, which
shall be in a Minimum Amount, and whether such Borrowing shall be of Term B
Loans or Revolving Loans;

 

(ii)           the requested Borrowing Date, which
shall be a Business Day;

 

(iii)          the Type of Loans comprising the
Borrowing; and

 

(iv)          if applicable, the duration of the
Interest Period applicable to such Loans included in such notice, subject to
the provisions of the definition of “Interest Period” herein.  If the Notice of Borrowing fails to specify
the duration of the Interest Period for any Borrowing comprised of Offshore
Rate Loans, such Interest Period shall be one month;

 

provided, however, that with
respect to the Borrowing to be made on the Effective Date, the Notice of
Borrowing shall be delivered to the Administrative Agent not later than
11:00 a.m. (San Francisco time) one (1) Business Day before the Effective
Date and such Borrowing will consist of Base Rate Loans only.

 

(b)           The Administrative Agent will
promptly notify each Lender of its receipt of any Notice of Borrowing and of
the amount of such Lender’s Proportionate Share of that Borrowing.

 

(c)           Each Lender will make the amount of
its Proportionate Share of each Borrowing available to the Administrative Agent
for the account of Holdings at the Administrative Agent’s Payment Office by
11:00 a.m. (San Francisco time) on the Borrowing Date requested by
Holdings in funds immediately available to the Administrative Agent.  The proceeds of each such Borrowing will
then be made available to Holdings by the Administrative Agent at such office
by crediting the account of Holdings on the books of Wells Fargo with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent, or if
requested by Holdings, by wire transfer in accordance with written instructions
provided to the Administrative Agent by Holdings of such funds as received by
the Administrative Agent, unless on the date of the Borrowing all or any
portion of the proceeds thereof shall then be required to be applied to the
repayment of any outstanding Loans, in which case such proceeds or portion
thereof shall be applied to the payment of such Loans.

 

(d)           After giving effect to any Borrowing,
unless the Administrative Agent shall otherwise consent, there may not be more
than eight different Interest Periods in effect.

 

2.04         Conversion
and Continuation Elections. 
(a)  Holdings may, upon
irrevocable written notice to the Administrative Agent in accordance with Section
2.04(b):

 

(i)            elect, as of any Business Day, in
the case of Base Rate Loans, or as of the last day of the applicable Interest
Period, in the case of any Offshore Rate Loans, to convert any such Loans (or any
part thereof in a Minimum Amount) into Loans of any other Type; or

 

(ii)           elect, as of the last day of the
applicable Interest Period, to continue any Revolving Loans or Term B Loans
having Interest Periods expiring on such day (or any part thereof in a Minimum
Amount);

 

32

 

provided that if at any time the
aggregate amount of Offshore Rate Loans in respect of any Borrowing is reduced,
by payment, prepayment, or conversion of part thereof to be less than $5,000,000,
such Offshore Rate Loans shall automatically convert into Base Rate Loans, and
on and after such date the right of Holdings to continue such Loans as, and
convert such Loans into, Offshore Rate Loans, shall terminate.

 

(b)           Holdings shall deliver a Notice of
Conversion/Continuation to be received by the Administrative Agent (i) not
later than 9:00 a.m. (San Francisco time) at least three (3) Business Days in
advance of the Conversion/ Continuation Date, if the Loans are to be converted
into or continued as Offshore Rate Loans; and (ii) prior to 9:00 a.m.
(San Francisco time) on the Conversion/Continuation Date, if the Loans are to
be converted into Base Rate Loans, specifying:

 

(i)            the proposed Conversion/Continuation
Date;

 

(ii)           the aggregate amount of Loans to be
converted or continued;

 

(iii)          the Type of Loans resulting from the
proposed conversion or continuation; and

 

(iv)          other than in the case of conversions
into Base Rate Loans, the duration of the requested Interest Period, subject to
the provisions of the definition of “Interest Period” herein.

 

(c)           If upon the expiration of any
Interest Period applicable to Offshore Rate Loans, Holdings has failed to
select timely a new Interest Period to be applicable to such Offshore Rate
Loans, as the case may be, or if any Default or Event of Default then exists,
Holdings shall be deemed to have elected to convert such Offshore Rate Loans
into Base Rate Loans effective as of the expiration date of such Interest
Period.

 

(d)           The Administrative Agent will
promptly notify each Lender of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by Holdings, the
Administrative Agent will promptly notify each Lender of the details of any
automatic conversion.  All conversions
and continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.

 

(e)           Unless the Majority Lenders otherwise
consent, during the existence of a Default or Event of Default, Holdings may
not elect to have a Loan converted into or continued as an Offshore Rate Loan.

 

(f)            After giving effect to any
conversion or continuation of Loans, unless the Administrative Agent shall
otherwise consent, there may not be more than eight (8) different Interest
Periods in effect.

 

2.05         Voluntary
Termination or Reduction of Commitments. 
(a)  Holdings may, upon not less
than three (3) Business Days’ prior notice to the Administrative Agent,
terminate the Revolving Commitments, or permanently reduce the Revolving
Commitments, provided that the

 

33

 

aggregate amount of any
partial reduction is in a Minimum Amount; unless, after giving effect thereto
and to any prepayments of any Loans made on the effective date thereof,
(i) the Effective Amount of all Revolving Loans, Swingline Loans and L/C
Obligations together would exceed the amount of the combined Revolving
Commitments of the Revolving Lenders then in effect, or (ii) the Effective
Amount of all L/C Obligations then outstanding would exceed the L/C
Commitment.  Once reduced in accordance
with this Section 2.05, the Revolving Commitments may not be
increased.  Any reduction of the
Revolving Commitments shall be applied to each Revolving Lender according to
its Revolving Proportionate Share.  If
and to the extent specified by Holdings in the notice to the Administrative
Agent, some or all of the reduction in the Revolving Commitments shall be
applied to reduce the L/C Commitment.  All
accrued commitment and letter of credit fees to, but not including, the
effective date of any reduction or termination of Revolving Commitments, shall
be paid on the effective date of such reduction or termination.

 

(b)           At no time shall the Swingline Commitment
exceed the combined Revolving Commitments of the Revolving Lenders, and any
reduction of the Revolving Commitments which reduces combined Revolving
Commitments of the Revolving Lenders below the then-current amount of the
Swingline Commitment shall result in an automatic corresponding reduction of
the Swingline Commitment to the amount of the combined Revolving Commitments of
the Revolving Lenders, as so reduced, without any action on the part of the
Swingline Lender.

 

2.06         Swingline
Loans.  (a)  On the terms and subject to the conditions
set forth herein, the Swingline Lender agrees to make a portion of the
Revolving Commitment available to Holdings by making swingline loans
denominated in Dollars (individually, a “Swingline Loan”, and,
collectively, the “Swingline Loans”) to Holdings on any Business Day
during the period from the Effective Date to the Revolving Loan Maturity Date
in accordance with the procedures set forth in this Section 2.06 in
an aggregate principal amount at any one time outstanding not to exceed Fifteen
Million Dollars ($15,000,000), notwithstanding the fact that such Swingline
Loans, when aggregated with any other Credit Extensions made by or participated
in by the Swingline Lender, may exceed the Swingline Lender’s Revolving
Commitment (the amount of such commitment of the Swingline Lender to make
Swingline Loans to Holdings pursuant to this Section 2.06(a), as
the same shall be reduced pursuant to Section 2.05 or Section
2.08 or as a result of any assignment pursuant to Section 11.08,
the Swingline Lender’s “Swingline Commitment”); provided that at
no time shall (i) the sum of the Effective Amount of all Swingline Loans plus
the Effective Amount of all Revolving Loans plus the Effective Amount of
all L/C Obligations exceed the combined Revolving Commitments of the Revolving
Lenders, or (ii) the Effective Amount of all Swingline Loans exceed the
Swingline Commitment.  Additionally, no
more than three Swingline Loans may be outstanding at any one time, and all
Swingline Loans shall at all times accrue interest at the Base Rate plus
the Applicable Margin (for Base Rate Loans) or at such other rate as may be
agreed to by the Swingline Lender and Holdings.  Within the foregoing limits, and subject to the other terms and
conditions hereof, Holdings may borrow under this Section 2.06(a),
prepay pursuant to Section 2.07 and reborrow pursuant to this Section 2.06(a).

 

(b)           Holdings shall provide the
Administrative Agent irrevocable written notice (including notice via facsimile
confirmed immediately by a telephone call) in the form of a Notice of Borrowing
of any Swingline Loan requested hereunder (which notice must be received

 

34

 

by the Administrative
Agent prior to 9:00 a.m. (San Francisco time) on the requested Borrowing
Date) specifying (i) the amount to be borrowed, which shall be in a
Minimum Amount, and (ii) the requested Borrowing Date, which shall be a
Business Day.  Unless the Swingline
Lender has received notice prior to 9:00 a.m. (San Francisco time) on such
Borrowing Date from the Administrative Agent (including at the request of any
Revolving Lender) (A) directing the Swingline Lender not to make the
requested Swingline Loan as a result of the limitations set forth in the proviso
set forth in the first sentence of Section 2.06(a); or
(B) that one or more conditions specified in Article V are not
then satisfied; then, subject to the terms and conditions hereof, the
Swingline Lender will, not later than 12:00 noon (San Francisco time) on
the Borrowing Date specified in such Notice of Borrowing, make the amount of
its Swingline Loan available to Holdings by crediting the account of Holdings
on the books of Wells Fargo or if requested by Holdings, by wire transfer in
accordance with written instructions provided to the Administrative Agent by
Holdings.  The Administrative Agent will
notify the Revolving Lenders on a quarterly basis if any Swingline Loan
Borrowings occurred during such quarter.

 

(c)           Holdings shall repay to the Swingline
Lender in full on the Revolving Loan Maturity Date the aggregate principal
amount of the Swingline Loans outstanding on the Revolving Loan Maturity Date.

 

(d)           For one (1) Business Day during each
successive ten (10) Business Day period, the aggregate principal amount of
Swingline Loans shall be $0 (a “Clean-Up Day”); provided, however,
that such Clean-Up Day may occur on the tenth Business Day of any such period,
whether or not Swingline Loans are outstanding at 9:00 a.m. on such day as set
forth in clause (e) below.  Holdings
shall prepay the outstanding principal amount of the Swingline Loans in whole
to the extent required so that a Clean-Up Day may occur in each such ten (10)
Business Day period as provided in this Section 2.06(d) (which
Swingline Loans may not be reborrowed until such Clean-Up Day has ended).

 

(e)           If:

 

(i)            any Swingline Loans shall remain
outstanding at 9:00 a.m. (San Francisco time) on any day required to be a
Clean-Up Day (by virtue of there being Swingline Loans outstanding for ten consecutive
Business Days) and by such time on such Business Day the Administrative Agent
shall have received neither:  (A) a
Notice of Borrowing delivered pursuant to Section 2.03 requesting
that Revolving Loans be made pursuant to Section 2.01 on the Clean-Up
Day in an amount at least equal to the aggregate principal amount of such
Swingline Loans; nor (B) any other notice indicating Holdings’ intent to
repay such Swingline Loans with funds obtained from other sources; or

 

(ii)           any Swingline Loans shall remain
outstanding during the existence of an Event of Default and the Swingline
Lender shall in its sole discretion notify the Administrative Agent that the
Swingline Lender desires that such Swingline Loans be converted into Revolving
Loans;

 

then the Administrative Agent shall
be deemed to have received a Notice of Borrowing from Holdings pursuant to Section 2.03
requesting that Base Rate Loans be made pursuant to Section 2.01 on
such Clean-Up Day (in the case of the circumstances described in
clause (i)

 

35

 

above) or on the first Business Day subsequent to the
date of such notice from the Swingline Lender (in the case of the circumstances
described in clause (ii) above) in an amount equal to the aggregate amount
of such Swingline Loans, and the procedures set forth in Section 2.03(b)
and Section 2.03(c) shall be followed in making such Base Rate Loans; provided,
that such Base Rate Loans shall be made notwithstanding Holdings’ failure to
comply with Section 5.03; and provided, further, that
if a Borrowing of Revolving Loans becomes legally impracticable and if so
required by the Swingline Lender at the time such Revolving Loans are required
to be made by the Revolving Lenders in accordance with this Section 2.06(e),
each Revolving Lender agrees that in lieu of making Revolving Loans as
described in this Section 2.06(e), such Revolving Lender shall
purchase a participation from the Swingline Lender in the applicable Swingline
Loans in an amount equal to such Revolving Lender’s Revolving Proportionate
Share of such Swingline Loans, and the procedures set forth in Section 2.03(b)
and Section 2.03(c) shall be followed in connection with the purchases
of such participations.  Upon such
purchases of participations the prepayment requirements of Section 2.06(d)
shall be deemed waived with respect to such Swingline Loans.  If any Swingline Loan shall remain
outstanding in lieu of a Borrowing of Revolving Loans as provided above,
interest on such Swingline Loan shall be due and payable on demand and shall
accrue at the rate then applicable to Base Rate Loans.  The proceeds of such Base Rate Loans shall
be applied to repay such Swingline Loans. 
A copy of each notice given by the Administrative Agent to the Revolving
Lenders pursuant to this Section 2.06(e) with respect to the making
of Revolving Loans, or the purchases of participations, shall be promptly
delivered by the Administrative Agent to Holdings.  Each Revolving Lender’s obligation in accordance with this Agreement
to make the Revolving Loans, or purchase the participations, as contemplated by
this Section 2.06(e), shall be absolute and unconditional and shall
not be affected by any circumstance, including (1) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Lender
may have against the Swingline Lender, Holdings or any other Person for any
reason whatsoever; (2) the occurrence or continuance of a Default, an
Event of Default or a Material Adverse Effect; or (3) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

 

2.07         Optional
Prepayments.  Subject to Section
4.04, Holdings may, at any time or from time to time, in the case of
Offshore Rate Loans, upon not less than three (3) Business Days’ irrevocable
notice to the Administrative Agent, and in the case of Base Rate Loans, upon
irrevocable notice to the Administrative Agent provided prior to 9:00 a.m. on
the day of such prepayment (provided that in the case of Base Rate Loans, if such
prepayment is received by the Administrative Agent on or prior to
11:00 a.m. (San Francisco time) on any day, such payment shall be applied
against the outstanding Loans on the same day), ratably prepay Loans in whole
or in part, in Minimum Amounts without penalty.  Such notice of prepayment shall specify the date and amount of
such prepayment, whether such prepayment of Loans is of Term B Loans,
Revolving Loans or Swingline Loans (or a combination thereof) and the Type(s)
of Loans to be prepaid.  The Administrative
Agent will promptly notify the Term B Lenders, the Revolving Lenders or the
Swingline Lender, as applicable, of its receipt of any such notice and of such
prepayment.  If such notice is given by
Holdings, Holdings shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein, together
with (other than in the case of Base Rate Loans) accrued interest to each such
date on the amount prepaid and any amounts required pursuant to Section 4.04.  Optional prepayments of Term B Loans shall
be applied to reduce the Term B Loans with respect to each remaining

 

36

 

installment of principal pro rata in accordance with the then
remaining installments payable under Section 2.09(a).

 

2.08         Mandatory
Prepayments of Loans; Mandatory Commitment Reductions.

 

(a)           Mandatory Prepayments of Loans.

 

(i)            If at any time the Effective Amount
of Revolving Loans and Swingline Loans then outstanding plus the Effective
Amount of any L/C Obligations shall exceed the Borrowing Base, Holdings shall,
within five (5) Business Days of the earlier of (i) the date a Responsible
Officer of Holdings became aware of such excess, and (ii) notice from the
Administrative Agent informing Holdings of the existence of such excess, prepay
the outstanding principal amount of the Revolving Loans and any L/C Advances,
in an amount equal to such excess and, if necessary (after giving effect to
such prepayment), shall also Cash Collateralize outstanding Letters of Credit
in an amount equal to the excess of the maximum amount then available to be
drawn under the Letters of Credit over the Borrowing Base.

 

(ii)           If at any time the Effective Amount
of L/C Obligations exceeds the L/C Commitment, Holdings shall Cash
Collateralize on such date the outstanding Letters of Credit in an amount equal
to the excess of the maximum amount then available to be drawn under the
Letters of Credit over the L/C Commitment.

 

(iii)          If at any time (after giving effect to
any Cash Collateralization made on such date pursuant to Section 2.08(b)),
the Effective Amount of all Revolving Loans and Swingline Loans then
outstanding plus the Effective Amount of all L/C Obligations at such
time exceeds the combined Revolving Commitments of the Revolving Lenders,
Holdings shall immediately, and without notice or demand, prepay the
outstanding principal amount of the Revolving Loans, Swingline Loans and L/C
Advances by an amount equal to the applicable excess.

 

(iv)          If Holdings, the Company or any other
Subsidiary shall at any time or from time to time make or agree to make a
Disposition, then (A) Holdings shall promptly notify the Administrative
Agent in advance of such Disposition (including the amount of the estimated Net
Proceeds to be received by Holdings, the Company or such other Subsidiary in
respect thereof), and (B) if, after giving effect to such Disposition, the
Net Proceeds of all Dispositions which have occurred in such fiscal year are
greater than $10,000,000 in the aggregate, then promptly upon, and in no event
later than one (1) Business Day after, receipt by Holdings, the Company or the
other Subsidiary of the Net Proceeds of such Disposition, Holdings shall prepay
the Term B Loans in an aggregate amount equal to 100% of the amount by which
the Net Proceeds of such Disposition when added to the Net Proceeds received by
Holdings, the Company or any other Subsidiary on account of all other
Dispositions which have occurred in such fiscal year, less the amount, if any,
of Net Proceeds already so applied in such fiscal year, exceeds $10,000,000; provided,
however, that with respect to any Non-Wholly-Owned Subsidiary, such
Non-Wholly-Owned Subsidiary shall only prepay the ratable portion of the Net
Proceeds received by such Non-Wholly-Owned Subsidiary based on Holdings’ direct
or indirect interest in such Non-Wholly-Owned Subsidiary.

 

37

 

(v)           If Holdings, the Company or any other
Subsidiary shall at any time or from time to time issue any debt (other than
any Additional Revolving Commitment, Additional Term B Commitment or Additional
Term B Loan as permitted hereunder) or equity securities for cash consideration
in excess of $5,000,000 in the aggregate, then (i) Holdings shall promptly
notify the Administrative Agent in advance of the estimated Net Issuance
Proceeds of such issuance and (ii) promptly upon, and in no event later
than one (1) Business Day after, receipt by Holdings, the Company or the other
Subsidiary of the Net Issuance Proceeds of such issuance, Holdings shall prepay
the Term B Loans in an aggregate amount equal to the amount of all Net Issuance
Proceeds received by Holdings, the Company or any such other Subsidiary on
account of such issuance unless such equity securities were issued pursuant to
a Permitted Equity Offering and the Majority Class Lenders shall have approved
such other use of the Net Issuance Proceeds; provided, however,
that with respect to any Non-Wholly-Owned Subsidiary, such Non-Wholly-Owned
Subsidiary shall only prepay the ratable portion of the Net Issuance Proceeds
received by such Non-Wholly-Owned Subsidiary based on Holdings’ direct or
indirect interest in such Non-Wholly-Owned Subsidiary.

 

(vi)          Any prepayments pursuant to this Section 2.08
shall be subject to Section 4.04 and applied, first, to Swingline
Loans (only if such prepayment is pursuant to Section 2.08(a)(i)) then
outstanding, second, to any Base Rate Loans then outstanding and then to
Offshore Rate Loans with the shortest Interest Periods remaining; provided,
however, that if the amount of Swingline Loans and Base Rate Loans then
outstanding is not sufficient to satisfy the entire prepayment requirement,
Holdings may, at its option, place any amounts which it would otherwise be
required to use to prepay Offshore Rate Loans on a day other than the last day
of the Interest Period therefor into an interest-bearing account pledged to the
Administrative Agent for the benefit of the Lenders until the end of such
Interest Period at which time such pledged amounts will be applied to prepay
such Offshore Rate Loans.  Holdings
shall pay, together with each prepayment under this Section 2.08,
accrued interest on the amount of any Offshore Rate Loans prepaid and any
amounts required pursuant to Section 4.04.  Prepayments of Term B Loans pursuant to this
Section 2.08 shall be applied to reduce the Term B Loans with respect to
each remaining installment of principal thereof pro rata in accordance with the
then remaining installments payable under Section 2.09(a).

 

(b)                           Mandatory
Commitment Reductions.

 

(i)            The Aggregate Revolving Commitment
shall be automatically and permanently reduced to $0 on the Revolving Loan
Maturity Date.

 

(ii)           If, on the Effective Date, the
Aggregate Term B Commitment shall exceed the outstanding principal amount of
the Term B Loans made, such unused portion of the Aggregate Term B Commitment
shall automatically terminate on the Effective Date.

 

(c)                           Optional Waiver of
Prepayments.  Any Term B Lender may
elect, by notice to the Administrative Agent in writing (or by telephone or
telecopy promptly confirmed in writing) at least one Business Day prior to any
prepayment of the Term B Loans required to be made by Holdings for the account
of such Lender pursuant to this Section 2.08, to waive all or a portion
of such prepayment.

 

38

 

2.09         Repayment.  (a)  The
Term B Loans.  Holdings shall repay
to the Administrative Agent for the account of the Term B Lenders the aggregate
principal amount of Term B Loans in quarterly installments on the last Business
Day of each calendar quarter, commencing on September 30, 2003, in the
applicable amounts set forth on Schedule 2.09 hereto (or as such
Schedule may be amended pursuant to Section 2.01(c) hereof).

 

(b)           The Revolving Loans and Swingline
Loans.  Holdings shall repay to the
Administrative Agent for the account of the Revolving Lenders on the Revolving
Loan Maturity Date the aggregate principal amount of Revolving Loans and
Swingline Loans outstanding on such date.

 

2.10         Interest.  (a) 
(i) Subject to Section 2.10(c) below, each Revolving Loan
and Term B Loan shall bear interest on the outstanding principal amount thereof
from the applicable Borrowing Date at a rate per annum equal to the Offshore
Rate or the Base Rate, as the case may be (and subject to Holdings’ right to
convert to other Types of Loans under Section 2.04), plus the
Applicable Margin; and (ii) each Swingline Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Base Rate plus the Applicable Margin (for
Base Rate Loans), or at such other rate as may be agreed to by the Swingline
Lender.

 

(b)           Interest on each Revolving Loan, Term
B Loan and Swingline Loan shall be paid in arrears on each Interest Payment
Date.  Interest shall also be paid on
the date of any prepayment of Loans (other than Base Rate Loans) under Section
2.07 or Section 2.08 for the portion of such Loans so prepaid and
upon payment (including prepayment) in full thereof, and on the Revolving Loan
Maturity Date or Term B Loan Maturity Date, as applicable.  During the existence of any Event of
Default, interest shall be paid on demand of the Administrative Agent at the
request or with the consent of the Majority Lenders.

 

(c)           Notwithstanding Section 2.10(a),
while any Event of Default exists or after acceleration, Holdings shall pay
interest (after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all outstanding Obligations, at a
rate per annum which is determined by adding 2% per annum to the Applicable
Margin then in effect for such Loans and, in the case of Obligations not
subject to an Applicable Margin, at a rate per annum equal to the Base Rate plus
the Applicable Margin then in effect for Base Rate Loans, plus 2% per
annum; provided, however, that on and after the expiration of any
Interest Period applicable to any Offshore Rate Loan outstanding on the date of
occurrence of such Event of Default or acceleration, the principal amount of
such Loan shall, during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Base Rate, plus
the Applicable Margin then in effect for Base Rate Loans, plus 2% per
annum.

 

(d)           Anything herein to the contrary
notwithstanding, the obligations of Holdings to any Lender hereunder shall be
subject to the limitation that payments of interest shall not be required for
any period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payment by such Lender would
be contrary to the provisions of any law applicable to such Lender limiting the
highest rate of interest that may be lawfully contracted for, charged or
received by such Lender, and in such event Holdings shall pay such Lender
interest at the highest rate permitted by applicable law.

 

39

 

2.11         Fees.  In addition to certain fees described in Section
3.08:

 

(a)           Arrangement and Agency Fees.  Holdings shall pay an arrangement fee to the
Co-Lead Arrangers for the Co-Lead Arranger’s own account, and shall pay an
agency fee to the Administrative Agent for the Administrative Agent’s own account,
as required by the letter agreement (the “Fee Letter”) between Holdings,
Wells Fargo Bank, as Co-Lead Arranger and Administrative Agent dated July 14,
2003.

 

(b)           Commitment Fees.  Holdings shall pay to the Administrative
Agent for the account of each Revolving Lender a commitment fee on the actual
daily unused portion of such Revolving Lender’s Revolving Commitment (the “Available
Commitment”), computed on a quarterly basis in arrears on the last Business
Day of each calendar quarter based upon the daily utilization for that quarter
as calculated by the Administrative Agent at a rate per annum equal to the
Applicable Fee Amount (such fees, the “Commitment Fees”).  For purposes of calculating the Available
Commitment under this Section 2.11, the Revolving Commitments shall be
deemed used to the extent of the Effective Amount of Revolving Loans then
outstanding plus the Effective Amount of L/C Obligations then outstanding
(other than L/C Obligations consisting of the aggregate undrawn amount of all
Commercial Letters of Credit then outstanding).  Swingline Loans shall not constitute utilization for purposes of
calculating Available Commitment.  Such
Commitment Fees shall accrue from the Effective Date to the Revolving Loan
Maturity Date and shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter commencing on September 30, 2003, to the
Revolving Loan Maturity Date, with the final payment to be made on the
Revolving Loan Maturity Date; provided that in connection with any
termination of Commitments hereunder, the accrued Commitment Fees calculated
for the period ending on such date shall also be paid on the date of
termination.  The Commitment Fees
provided in this Section 2.11(b) shall accrue at all times after the Effective
Date, including at any time during which one or more conditions in Article V
are not met.

 

2.12         Computation
of Fees and Interest.  (a)  All computations of interest for Base Rate
Loans when the Base Rate is determined by Wells Fargo’s “prime rate” shall be
made on the basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed.  All other computations of
fees and interest shall be made on the basis of a 360-day year and actual days
elapsed.  Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.

 

(b)           Each determination of an interest
rate by the Administrative Agent shall be conclusive and binding on Holdings
and the Lenders in the absence of manifest error. The Administrative Agent
will, at the request of Holdings or any Lender, deliver to Holdings or the
Lender, as the case may be, a statement showing the quotations used by the
Administrative Agent in determining any interest rate and the resulting
interest rate.

 

2.13         Payments
by Holdings.  (a)  All payments to be made by Holdings shall be
made without set-off, recoupment or counterclaim.  Except as otherwise expressly provided herein, all payments by
Holdings shall be made to the Administrative Agent for the account of the
Lenders at the Administrative Agent’s Payment Office, and shall be made in
Dollars and in immediately available funds, no later than 11:00 a.m. (San
Francisco time) on the date specified herein. 
The Administrative Agent will promptly distribute to each Lender its
Proportionate Share (or other

 

40

 

applicable share as
expressly provided herein) of such payment in like funds as received.  Any payment received by the Administrative
Agent later than 11:00 a.m. (San Francisco time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue.

 

(b)           Subject to the provisions set forth
in the definition of “Interest Period” herein, whenever any payment is due on a
day other than a Business Day, such payment shall be made on the following
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.

 

(c)           Unless the Administrative Agent
receives notice from Holdings prior to the date on which any payment is due to
the Lenders that Holdings will not make such payment in full as and when
required, the Administrative Agent may assume that Holdings has made such
payment in full to the Administrative Agent on such date in immediately
available funds and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender.  If and to the extent Holdings has not made
such payment in full to the Administrative Agent, each Lender shall repay to
the Administrative Agent on demand such amount distributed to such Lender,
together with interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Lender until the date repaid.

 

2.14         Payments by
the Lenders to the Administrative Agent. 
(a)  Unless the Administrative
Agent receives notice from a Lender on or prior to the Effective Date or, with
respect to any Borrowing after the Effective Date, at least one (1) Business
Day prior to the date of such Borrowing, that such Lender will not make
available as and when required hereunder to the Administrative Agent for the
account of Holdings the amount of that Lender’s Proportionate Share of the
Borrowing, the Administrative Agent may assume that each Lender has made such
amount available to the Administrative Agent in immediately available funds on
the Borrowing Date and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available to Holdings on such
date a corresponding amount.  If and to
the extent any Lender shall not have made its full amount available to the Administrative
Agent in immediately available funds and the Administrative Agent in such
circumstances has made available to Holdings such amount, that Lender shall on
the Business Day following such Borrowing Date make such amount available to
the Administrative Agent, together with interest at the Federal Funds Rate for
each day during such period.  A notice
of the Administrative Agent submitted to any Lender with respect to amounts
owing under this Section 2.14(a) shall be conclusive absent
manifest error.  If such amount is so
made available, such payment to the Administrative Agent shall constitute such
Lender’s Loan on the date of Borrowing for all purposes of this Agreement.  If such amount is not made available to the
Administrative Agent on the Business Day following the Borrowing Date, the
Administrative Agent will notify Holdings of such failure to fund and, upon
demand by the Administrative Agent, Holdings shall pay such amount to the
Administrative Agent for the Administrative Agent’s account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.

 

(b)           The failure of any Lender to make any
Loan on any Borrowing Date shall not relieve any other Lender of any obligation
hereunder to make a Loan on such Borrowing Date,

 

41

 

but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on any Borrowing Date.

 

2.15         Sharing
of Payments, Etc.

 

(a)           Except as otherwise provided herein:

 

(i)            Each Revolving Loan and reduction of
the Aggregate Revolving Commitment shall be made or shared among the Revolving
Lenders pro
rata according to their respective Revolving Proportionate Shares;

 

(ii)           Each Term B Loan shall be made or
shared among the Term B Lenders pro rata according to their respective
Term B Proportionate Shares;

 

(iii)          Each payment of principal on Loans in
any Borrowing shall be shared among the Lenders which made or funded the Loans
in such Borrowing pro rata according to the respective unpaid principal
amounts of such Loans then owed to such Lenders;

 

(iv)          Each payment of interest on Loans in
any Borrowing shall be shared among the Lenders that made or funded the Loans
in such Borrowing pro rata according to (A) the respective unpaid
principal amounts of such Loans so made or funded by such Lenders and
(B) the dates on which such Lenders so made or funded such Loans;

 

(v)           Each payment of Commitment Fees
pursuant to this Agreement shall be shared among the Revolving Lenders (except
for Defaulting Lenders) pro rata according to (A) their
respective Revolving Proportionate Shares and (B) in the case of each
Revolving Lender which becomes a Revolving Lender hereunder after the date
hereof, the date upon which such Revolving Lender so became a Revolving Lender;

 

(vi)          Each payment of any fees due in
connection with any amendment hereto or any waiver of or forbearance from any
Event of Default existing hereunder shall be shared among those Lenders
consenting to such amendment, waiver or forbearance or as otherwise agreed to
by such Lenders;

 

(vii)         Each payment of interest (other than
interest on Loans) and fees (other than Commitment Fees) shall be shared among
the Lenders and the Administrative Agent owed the amount upon which such
interest accrues pro rata according to (A) the respective amounts so
owed such Lenders and the Administrative Agent and (B) the dates on which
such amounts became owing to such Lenders and the Administrative Agent; and

 

(viii)        All other payments under this Agreement
and the other Loan Documents shall be for the benefit of the Person or Persons
specified.

 

(b)           If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Lender shall immediately (i) notify the
Administrative Agent of such fact, and (ii) purchase from the other
Lenders such participations in the Loans made by

 

42

 

them as shall be
necessary to cause such purchasing Lender to share the excess payment pro rata
with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from the purchasing Lender, such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender’s ratable share (according to the proportion of
(A) the amount of such paying Lender’s required repayment to (B) 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.  Holdings agrees that any
Lender so purchasing a participation from another Lender may, to the fullest
extent permitted by law, exercise all of its rights of payment (including the
right of set-off, but subject to Section 11.10) with respect to such
participation as fully as if such Lender were the direct creditor of Holdings
in the amount of such participation. 
The Administrative Agent will keep records (which shall be conclusive
and binding in the absence of manifest error) of participations purchased under
this Section 2.15(b) and will in each case notify the Lenders following
any such purchases or repayments.

 

2.16         Security and
Guaranty.  (a)  All obligations of Holdings under this
Agreement, the Notes and all other Loan Documents shall be secured in
accordance with the Collateral Documents.

 

(b)           All obligations of Holdings under
this Agreement, each of the Notes and all other Loan Documents to which it is a
party shall be unconditionally guaranteed by each Guarantor pursuant to its
Guaranty.

 

ARTICLE III

 

THE
LETTERS OF CREDIT 

 

3.01         The Letter
of Credit Subfacility.  (a)  On the terms and subject to the conditions
set forth herein (i) the L/C Issuer agrees, (A) from time to time on
any Business Day during the period from the Effective Date to the Revolving
Loan Maturity Date to issue Letters of Credit for the account of Holdings, and
to amend or renew Letters of Credit previously issued by it, in accordance with
Section 3.02(c) and Section 3.02(d), and (B) to honor drafts
under the Letters of Credit; and (ii) the Revolving Lenders severally
agree to participate in Letters of Credit Issued for the account of Holdings; provided
that the L/C Issuer shall not be obligated to Issue, and no Revolving Lender
shall be obligated to participate in, any Letter of Credit if such Letter of
Credit is not denominated in Dollars or if as of the date of Issuance of such
Letter of Credit (the “Issuance Date”) and after giving effect thereto
(x) the Effective Amount of all L/C Obligations plus the Effective
Amount of all Revolving Loans and Swingline Loans shall exceed an amount equal
to the lesser of (1) the combined Revolving Commitments and (2) the
Borrowing Base, (y) the participation of any Revolving Lender in the
Effective Amount of all L/C Obligations and in the Effective Amount of all
Swingline Loans plus the Effective Amount of the Revolving Loans of such
Revolving Lender shall exceed such Revolving Lender’s Revolving Commitment, or
(z) the Effective Amount of L/C Obligations shall exceed the L/C
Commitment.  Within the foregoing
limits, and subject to the other terms and conditions hereof, Holdings ability
to obtain Letters of Credit shall be fully revolving, and, accordingly,
Holdings may, during the foregoing

 

43

 

period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been drawn
upon and reimbursed.

 

(b)           The L/C Issuer is under no obligation
to Issue any Letter of Credit if:

 

(i)            any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from Issuing such Letter of Credit, or any Requirement
of Law applicable to the L/C Issuer or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the
Issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Effective Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Effective Date and which the L/C Issuer in good faith deems
material to it;

 

(ii)           the L/C Issuer has received written
notice from any Revolving Lender, the Administrative Agent or Holdings, on or
prior to the Business Day prior to the requested date of Issuance of such
Letter of Credit, that one or more of the applicable conditions contained in Article
V is not then satisfied;

 

(iii)          the expiry date of any requested
Letter of Credit is (A) more than 365 days after the date of Issuance, unless
the Majority Revolving Lenders have approved such expiry date in writing, or (B)
after the Revolving Loan Maturity Date, unless all of the Revolving Lenders
have approved such expiry date in writing;

 

(iv)          the expiry date of any requested
Letter of Credit is prior to the maturity date of any financial obligation to
be supported by the requested Letter of Credit;

 

(v)           any requested Letter of Credit does
not provide for drafts, or is not otherwise in form and substance acceptable to
the L/C Issuer, or the Issuance of a Letter of Credit shall violate any
applicable policies of the L/C Issuer;

 

(vi)          any Standby Letter of Credit is for
the purpose of supporting the issuance of any letter of credit by any other
Person;

 

(vii)         any Standby Letter of Credit is in a
face amount less than $1,000,000; or

 

(viii)        any requested Letter of Credit is to be
denominated in a currency other than Dollars.

 

(c)           Letters of Credit issued under this Article III
shall be either Commercial Letters of Credit or Standby Letters of Credit.

 

3.02         Issuance,
Amendment and Renewal of Letters of Credit.  (a)  Each Letter of Credit
shall be issued upon the irrevocable written request of Holdings received by
the L/C Issuer (with a copy sent by Holdings to the Administrative Agent) at
least four (4) Business Days (or such shorter time as the L/C Issuer may agree
in a particular instance in its sole discretion)

 

44

 

prior to the proposed
date of issuance.  Each such request for
issuance of a Letter of Credit shall be by facsimile, confirmed immediately in
an original writing, in the form of an L/C Application, and shall specify in
form and detail satisfactory to the L/C Issuer: (i) the proposed date of
issuance of the Letter of Credit (which shall be a Business Day); (ii) the
face amount of the Letter of Credit; (iii) the expiry date of the Letter
of Credit; (iv) the name and address of the beneficiary thereof;
(v) the documents to be presented by the beneficiary of the Letter of
Credit in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vii) such other matters as the L/C Issuer may require.

 

(b)           At least two (2) Business Days prior
to the Issuance of any Letter of Credit, the L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of the L/C Application or L/C Amendment Application from
Holdings and, if not, the L/C Issuer will provide the Administrative Agent with
a copy thereof.  Unless the L/C Issuer
has received notice on or before the Business Day immediately preceding the
date the L/C Issuer is to issue a requested Letter of Credit from the
Administrative Agent (A) directing the L/C Issuer not to issue such Letter
of Credit because such issuance is not then permitted under Section 3.01(a) as
a result of the limitations set forth in clauses (x) through
(z) thereof or Section 3.01(b)(ii); or (B) that one or more
conditions specified in Article V are not then satisfied; then, subject
to the terms and conditions hereof, the L/C Issuer shall, on the requested
date, issue a Letter of Credit for the account of Holdings in accordance with
the L/C Issuer’s usual and customary business practices.

 

(c)           From time to time while a Letter of
Credit is outstanding and prior to the Revolving Loan Maturity Date, the L/C
Issuer will, upon the written request of Holdings received by the L/C Issuer
(with a copy sent by Holdings to the Administrative Agent) at least four (4)
Business Days (or such shorter time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed date of amendment
(including a renewal or extension thereof), amend any Letter of Credit issued
by it.  Each such request for amendment
of a Letter of Credit shall be made by facsimile, confirmed immediately in an
original writing, made in the form of an L/C Amendment Application and shall
specify in form and detail satisfactory to the L/C Issuer:  (i) the Letter of Credit to be amended;
(ii) the proposed date of amendment of the Letter of Credit (which shall
be a Business Day); (iii) the nature of the proposed amendment; and
(iv) such other matters as the L/C Issuer may require.  The L/C Issuer shall be under no obligation
to amend any Letter of Credit if: 
(A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms of this Agreement; or
(B) the beneficiary of any such Letter of Credit does not accept the
proposed amendment to the Letter of Credit. 
The Administrative Agent will promptly notify the Revolving Lenders of
the Issuance of any Standby Letter of Credit notified to it by the L/C
Issuer.  The Revolving Lenders
acknowledge and agree that the Administrative Agent will not notify them of the
receipt by the Administrative Agent of any L/C Application or L/C Amendment
Application or of the Issuance of any Commercial Letter of Credit.  From time to time the Administrative Agent
will notify the Revolving Lenders of the amount of all outstanding Letters of
Credit hereunder.

 

(d)           The L/C Issuer and the Revolving
Lenders agree that, while a Letter of Credit is outstanding and prior to the
Revolving Loan Maturity Date, the L/C Issuer shall be entitled to authorize the
renewal of any Letter of Credit issued by it. 
The L/C Issuer shall be under no

 

45

 

obligation to so renew
any Letter of Credit if: (A) the L/C Issuer would have no obligation at
such time to issue or amend such Letter of Credit in its renewed form under the
terms of this Agreement; or (B) the beneficiary of any such Letter of
Credit does not accept the proposed renewal of the Letter of Credit.  If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless the beneficiary thereof
receives notice from the L/C Issuer that such Letter of Credit shall not be
renewed, and if at the time of renewal, the L/C Issuer would be entitled to
authorize the renewal of such Letter of Credit in accordance with this Section
3.02(d) upon the request of Holdings, but the L/C Issuer shall not have
received any written direction by Holdings with respect thereto, the L/C Issuer
shall nonetheless be permitted to allow such Letter of Credit to renew, and
Holdings and the Revolving Lenders hereby authorize such renewal, and,
accordingly, the L/C Issuer shall be deemed to have received an L/C Amendment
Application from Holdings requesting such renewal.

 

(e)           The L/C Issuer may, at its election
(or as required by the Administrative Agent at the direction of the Majority
Revolving Lenders), deliver any notices of termination or other communications
to any Letter of Credit beneficiary or transferee, and take any other action as
necessary or appropriate, at any time and from time to time, in order to cause
the expiry date of such Letter of Credit to be a date not later than the
Revolving Loan Maturity Date.

 

(f)            This Agreement shall control in the
event of any conflict with any L/C-Related Document (other than any Letter of
Credit).

 

(g)           The L/C Issuer will also deliver to
the Administrative Agent, concurrently or promptly following its delivery of a
Letter of Credit, or amendment to or renewal of a Letter of Credit, to an
advising bank or a beneficiary, a true and complete copy of each such Letter of
Credit or amendment to or renewal of a Letter of Credit.

 

3.03         Risk
Participations, Drawings and Reimbursements.  (a)  Immediately upon the
Issuance of each Letter of Credit, each Revolving Lender shall be deemed to,
and hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a participation in such Letter of Credit and each drawing thereunder in
an amount equal to the product of (i) the Revolving Proportionate Share of
such Revolving Lender, times (ii) the maximum amount available to be drawn
under such Letter of Credit and the amount of such drawing, respectively.  Each Issuance of a Letter of Credit shall be
deemed to utilize the Revolving Commitment of each Revolving Lender by an
amount equal to the amount of such participation.

 

(b)           In the event of any request for a
drawing under a Letter of Credit by the beneficiary or transferee thereof, the
L/C Issuer will promptly notify Holdings and specify in such notice the date
such drawing will be honored by the L/C Issuer (the “Honor Date”).  If the L/C Issuer so notifies Holdings prior
to 9:00 a.m. (San Francisco time) on the Honor Date, Holdings, as account party
under such Letter of Credit, shall reimburse the L/C Issuer no later than 11:00
a.m. (San Francisco time) on the Honor Date for the amount paid by the L/C
Issuer under such Letter of Credit or, if the L/C Issuer shall so notify
Holdings after 9:00 a.m. (San Francisco time) on the Honor Date, Holdings, as
account party under such Letter of Credit, shall reimburse the L/C Issuer no
later than 11:00 a.m. (San Francisco time) on the next succeeding Business Day
for the amount paid by the L/C Issuer under such Letter of Credit on the Honor
Date (each such date, a “Reimbursement Date”), in each case, in an
amount equal to the amount

 

46

 

so paid by the L/C Issuer.  In
the event Holdings fails to reimburse the L/C Issuer for the full amount of any
drawing under any Letter of Credit by the required time as provided above on
the Reimbursement Date, the L/C Issuer will promptly notify the Administrative
Agent, and the Administrative Agent will promptly notify each Revolving Lender
thereof (including the amount thereof and such Revolving Lender’s Revolving
Proportionate Share thereof), and Holdings shall be deemed to have requested
that Base Rate Loans be made by the Revolving Lenders to Holdings to be
disbursed on the Reimbursement Date for such Letter of Credit, subject to the
amount of the unutilized portion of the Aggregate Commitment and subject to the
conditions set forth in Section 5.03. 
Holdings hereby directs that the proceeds of any such Loans deemed to be
made by it shall be used to pay its reimbursement obligations in respect of any
such drawing.  Solely for the purposes
of making such Loans, the Minimum Amount limitations set forth in Section 2.03
shall not be applicable.  Any notice
given by the L/C Issuer or the Administrative Agent pursuant to this Section
3.03(b) may be oral if immediately confirmed in writing (including by
facsimile); provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.  In the event that any amount of any drawing
under any Letter of Credit is not reimbursed by Holdings on the Honor Date,
such unreimbursed amount shall bear interest until it is either deemed to be an
L/C Borrowing as provided in Section 3.03(d) or deemed to be converted
to a Base Rate Loan as provided in this Section 3.03(b), at a rate per
annum equal to the Base Rate plus the Applicable Margin then in effect
for Base Rate Loans.

 

(c)           Each Revolving Lender shall, upon
receipt of any notice pursuant to Section 3.03(b), make available
to the Administrative Agent for the account of the L/C Issuer an amount in
Dollars and in immediately available funds equal to its Revolving Proportionate
Share of the amount of the drawing, whereupon such Revolving Lender shall
(subject to Section 3.03(f)) be deemed to have made a Revolving
Loan consisting of a Base Rate Loan to Holdings in that amount. The
Administrative Agent will promptly give notice of the occurrence of the
Reimbursement Date, but failure of the Administrative Agent to give any such
notice on the Reimbursement Date or in sufficient time to enable any Revolving
Lender to effect such payment on such date shall not relieve such Revolving
Lender from its obligations under this Section 3.03.

 

(d)           With respect to any unreimbursed
drawing that is not converted into Revolving Loans in whole or in part, because
of Holdings’ failure to satisfy the conditions set forth in Section 5.03
or for any other reason, Holdings shall be deemed to have incurred from the L/C
Issuer an L/C Borrowing in the amount of such drawing, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at a rate per annum equal to the Base Rate, plus the Applicable
Margin then in effect for Base Rate Loans, plus 2% per annum.  In such event, each Revolving Lender shall
upon receipt of any notice pursuant to Section 3.03(b) make available to
the Administrative Agent for the account of the L/C Issuer an amount in Dollars
and in immediately available funds equal to its Revolving Proportionate Share
of the amount of the drawing.  Each
Revolving Lender’s payment to the L/C Issuer pursuant to this Section
3.03(d) shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Revolving Lender in
satisfaction of its participation obligation under this Section 3.03.

 

47

 

(e)           If any Revolving Lender fails to make
available to the Administrative Agent for the account of the L/C Issuer the
amount of such Revolving Lender’s Revolving Proportionate Share of the amount
of any drawing by no later than 12:00 noon (San Francisco time) on the
Reimbursement Date, then interest shall accrue on such Revolving Lender’s
obligation to make such payment, from the Reimbursement Date to the date such
Revolving Lender makes such payment, at (i) the Federal Funds Rate in
effect from time to time during the period commencing on the Reimbursement Date
and ending on the date three (3) Business Days thereafter, and
(ii) thereafter at the Base Rate as in effect from time to time, payable
on demand of the Administrative Agent.

 

(f)            Each Revolving Lender’s obligation
in accordance with this Agreement to make or participate in the Revolving Loans
or L/C Advances, as contemplated by this Section 3.03, as a result
of a drawing under a Letter of Credit, shall be absolute and unconditional and
without recourse to the L/C Issuer and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other
right which such Revolving Lender may have against the L/C Issuer, Holdings or
any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided, however, that each
Revolving Lender’s obligation to make Revolving Loans under this Section
3.03 is subject to the conditions set forth in Section 5.03; and provided,
further, however, that a Revolving Lender may have recourse
against the L/C Issuer, and the L/C Issuer may be liable to a Revolving Lender,
to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by such Revolving Lender which
such Revolving Lender proves were caused by the L/C Issuer’s willful misconduct
or gross negligence or the L/C Issuer’s willful failure to pay under any Letter
of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.

 

3.04         Repayment of
Participations.  (a)  Upon (and only upon) receipt by the Administrative
Agent for the account of the L/C Issuer of immediately available funds from
Holdings (i) in reimbursement of any payment made by the L/C Issuer under
the Letter of Credit with respect to which any Revolving Lender has paid the
Administrative Agent for the account of the L/C Issuer for such Revolving
Lender’s participation in the Letter of Credit pursuant to Section 3.03
or (ii) in payment of interest thereon, the Administrative Agent will pay
to each Revolving Lender, in the same funds as those received by the
Administrative Agent for the account of the L/C Issuer, the amount of such
Revolving Lender’s Revolving Proportionate Share of such funds, and the L/C
Issuer shall receive the amount of the Revolving Proportionate Share of such
funds of any Revolving Lender that did not so pay the Administrative Agent for
the account of the L/C Issuer.

 

(b)           If the Administrative Agent or the
L/C Issuer is required at any time to return to Holdings, or to a trustee,
receiver, liquidator, custodian, or any official in any Insolvency Proceeding,
any portion of the payments made by Holdings to the Administrative Agent for
the account of the L/C Issuer pursuant to Section 3.04(a) in
reimbursement of a payment made under the Letter of Credit or interest or fee
thereon, each Revolving Lender shall, on demand of the Administrative Agent,
forthwith return to the Administrative Agent or the L/C Issuer the amount of
its Revolving Proportionate Share of any amounts so returned by the
Administrative Agent or

 

48

 

the L/C Issuer plus interest thereon from the date such demand
is made to the date such amounts are returned by such Revolving Lender to the
Administrative Agent or the L/C Issuer, at a rate per annum equal to the Federal
Funds Rate in effect from time to time.

 

3.05         Role of the
L/C Issuer.  (a)  Each Revolving Lender and Holdings agree
that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not
have any responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.

 

(b)           No Administrative Agent-Related
Person nor any of the respective correspondents, participants or assignees of
the L/C Issuer shall be liable to any Revolving Lender for: (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Revolving Lender (including the Majority Revolving Lenders, as applicable);
(ii) any action taken or omitted in the absence of gross negligence or
willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.

 

(c)           Holdings hereby assumes all risks of
the acts or omissions of any beneficiary or transferee with respect to its use
of any Letter of Credit; provided, however, that this assumption
is not intended to, and shall not, preclude Holdings pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement.  No Administrative
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.06;
provided, however, anything in such clauses to the contrary
notwithstanding, that Holdings may have a claim against the L/C Issuer, and the
L/C Issuer may be liable to Holdings, to the extent, but only to the extent, of
any direct, as opposed to consequential or exemplary, damages suffered by
Holdings which Holdings proves were caused by the L/C Issuer’s willful
misconduct or gross negligence or the L/C Issuer’s willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit.  In furtherance and
not in limitation of the foregoing: (i) the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary;
and (ii) the L/C Issuer shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.

 

3.06         Obligations
Absolute.  The obligations of
Holdings under this Agreement and any L/C-Related Document to reimburse the L/C
Issuer for a drawing under a Letter of Credit, and to repay any L/C Borrowing
and any drawing under a Letter of Credit converted into Revolving Loans, shall
be unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement and each such other L/C-Related Document under all
circumstances, including the following:

 

(i)            any lack of validity or
enforceability of this Agreement or any L/C-Related Document;

 

49

 

(ii)           any change in the time, manner or
place of payment of, or in any other term of, all or any of the obligations of
Holdings in respect of any Letter of Credit or any other amendment or waiver of
or any consent to departure from all or any of the L/C-Related Documents;

 

(iii)          the existence of any claim, set-off,
defense or other right that Holdings may have at any time against any beneficiary
or any transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the L/C-Related Documents or any unrelated
transaction;

 

(iv)          any draft, demand, certificate or
other document presented under any 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; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit;

 

(v)           any payment by the L/C Issuer under
any Letter of Credit against presentation of a draft or certificate that does
not strictly comply with the terms of any Letter of Credit; or any payment made
by the L/C Issuer under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including any arising in
connection with any Insolvency Proceeding;

 

(vi)          any exchange, release or
non-perfection of any collateral, or any release or amendment or waiver of or
consent to departure from any other guarantee, for all or any of the
obligations of Holdings in respect of any Letter of Credit; or

 

(vii)         any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, Holdings or a Guarantor.

 

3.07         Cash
Collateral Pledge.  (a) Upon
the request of the Administrative Agent, if the L/C Issuer has honored any full
or partial drawing request on any Letter of Credit and such drawing has
resulted in an L/C Borrowing hereunder, or (b) if, as of the Revolving
Loan Maturity Date, any Letters of Credit may for any reason remain outstanding
and partially or wholly undrawn, or (c) the occurrence of the
circumstances described in Section 2.08(a)(i) or Section 2.08(a)(ii)
requiring Holdings to Cash Collateralize Letters of Credit, then, Holdings
shall immediately Cash Collateralize the L/C Obligations in an amount equal to
such L/C Obligations.  Holdings shall,
to the extent necessary, make such additional pledges from time to time as
shall be necessary to ensure that all L/C Obligations remain at all times fully
Cash Collateralized.  Cash collateral
held under this Section 3.07 or Section 9.02 shall be maintained
in blocked, non-interest bearing deposit accounts at Wells Fargo pursuant to
the Security Agreement.

 

50

 

3.08         Letter of
Credit Fees.  (a)  Holdings shall pay to the Administrative
Agent for the account of each of the Revolving Lenders in accordance with its
respective Revolving Proportionate Share a letter of credit fee with respect to
the Standby Letters of Credit equal to the rate per annum equal to the
Applicable Fee Amount of the actual daily maximum amount available to be drawn
of the outstanding Standby Letters of Credit, computed on a quarterly basis in
arrears on the last Business Day of each calendar quarter based upon Standby Letters
of Credit outstanding for that quarter as calculated by the Administrative
Agent.  Such letter of credit fees shall
be due and payable quarterly in arrears on the last Business Day of each
calendar quarter during which Standby Letters of Credit are outstanding,
commencing on the first such quarterly date to occur after the Effective Date,
to the Revolving Loan Maturity Date (or such later date upon which the
outstanding Letters of Credit shall expire), with the final payment to be made
on the Revolving Loan Maturity Date (or such later expiration date).  Such fees are fully earned when due and,
once paid, are non-refundable.

 

(b)           Holdings shall pay to the L/C Issuer,
for the L/C Issuer’s sole account, a letter of credit fee with respect to the
amount from time to time available to be drawn under Commercial Letters of
Credit in such amount and on such dates as shall separately be agreed upon
between the L/C Issuer and Holdings. 
Such fees are fully earned when due and, once paid, are non-refundable.

 

(c)           Holdings shall pay to the L/C Issuer,
for the L/C Issuer’s sole account, a letter of credit fronting fee for each
Standby Letter of Credit Issued by the L/C Issuer equal to 0.125% per annum of
the actual daily maximum amount available to be drawn of the outstanding
Standby Letters of Credit, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon Standby Letters of Credit
outstanding for that quarter as calculated by the L/C Issuer.  Such letter of credit fronting fees shall be
due and payable quarterly in arrears on the last Business Day of each calendar
quarter during which Standby Letters of Credit are outstanding, commencing on
the first such quarterly date to occur after the Effective Date, to the Revolving
Loan Maturity Date (or such later date upon which the outstanding Letters of
Credit shall expire), with the final payment to be made on the Revolving Loan
Maturity Date (or such later expiration date). 
Such fees are fully earned when due and, once paid, are non-refundable.

 

(d)           Holdings shall pay to the L/C Issuer
from time to time on demand the normal issuance, presentation, transfer,
amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit as from time to time in effect.

 

(e)           Notwithstanding subsection
(a) of this Section 3.08, while any Event of Default exists or
after acceleration, Holdings shall pay a letter of credit fee (after as well as
before entry of judgment thereon to the extent permitted by law) on the actual
daily maximum amount available to be drawn of the outstanding Letters of
Credit, at a rate per annum which is determined by adding 2% per annum to the
rate otherwise then in effect hereunder for such Letters of Credit.

 

3.09         Applicability
of ISP98 and UCP.  Unless otherwise
expressly agreed by the L/C Issuer and Holdings when a Letter of Credit is
issued, (i) the rules of the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice (or such
later

 

51

 

version thereof as may be in effect at the time of issuance) shall
apply to each Standby Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits (the “UCP”), as most
recently published by the International Chamber of Commerce (the “ICC”)
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European
single currency (euro)) shall apply to each Commercial Letter of Credit.

 

3.10         Trade Bank
as L/C Issuer.  The parties hereto
acknowledge and agree that, at its option, Wells Fargo, as L/C Issuer, may
arrange for Letters of Credit to be issued by Trade Bank as agent for Wells
Fargo.  All parties hereto understand
and agree that to the extent any Letters of Credit are issued by Trade Bank as
agent for Wells Fargo, (i) Trade Bank is agent only to Wells Fargo and not to
Holdings and has no obligations to Holdings, (ii) the Letters of Credit issued
by Trade Bank will be deemed Letters of Credit issued by the L/C Issuer for all
purposes hereunder and (iii) any of the obligations performed or rights
exercised pursuant to or in connection with the issuance of any Letter of
Credit by Trade Bank shall be deemed obligations performed or rights exercised
by Wells Fargo as L/C Issuer.  To the
extent that the L/C Issuer is required to provide any notices to, or take any
other actions for the benefit of, the Administrative Agent hereunder, with
respect to any Letter of Credit issued by Trade Bank, no such notice or action
shall be required.

 

ARTICLE IV

 

TAXES,
YIELD PROTECTION AND ILLEGALITY

 

4.01         Taxes.  (a) 
Any and all payments by Holdings to each Lender or the Administrative Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes.  In addition, Holdings shall pay all Other
Taxes.

 

(b)           If Holdings shall be required by law
to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in
respect of any sum payable hereunder to any Lender or the Administrative Agent,
then:

 

(i)            the sum payable shall be increased
as necessary so that, after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this section), such Lender or the Administrative Agent, as the case may
be, receives and retains an amount equal to the sum it would have received and
retained had no such deductions or withholdings been made;

 

(ii)           Holdings shall make such deductions
and withholdings;

 

(iii)          Holdings shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and

 

(iv)          Holdings shall also pay to each Lender
or the Administrative Agent for the account of such Lender, at the time
interest is paid, Further Taxes in the amount that the respective Lender
specifies as necessary to preserve the after-tax yield such Lender would have
received if such Taxes, Other Taxes or Further Taxes had not been imposed.

 

52

 

(c)           Holdings agrees to indemnify and hold
harmless each Lender and the Administrative Agent for the full amount of
(i) Taxes, (ii) Other Taxes, and (iii) Further Taxes in the
amount that the respective Lender specifies as necessary to preserve the
after-tax yield such Lender would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly
or legally asserted.  Payment under this
indemnification shall be made within thirty (30) days after the date such
Lender or the Administrative Agent makes written demand therefor.

 

(d)           Within thirty (30) days after the
date of any payment by Holdings of Taxes, Other Taxes or Further Taxes,
Holdings shall furnish to each Lender or the Administrative Agent the original
or a certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to such Lender or the Administrative Agent.

 

(e)           If Holdings is required to pay any
amount to any Lender or the Administrative Agent pursuant to subsection (b) or
(c) of this Section, then such Lender shall use reasonable efforts (consistent
with legal and regulatory restrictions) to change the jurisdiction of its
Lending Office so as to eliminate any such additional payment by Holdings which
may thereafter accrue, if such change in the sole judgment of such Lender is
not otherwise disadvantageous to such Lender.

 

(f)            Nothing contained in this Section 4.01
shall override any term or provision of any Specified Swap Contract regarding
withholding taxes relating to Swap Contracts.

 

4.02         Illegality.  (a) 
If any Lender determines that the introduction of any Requirement of
Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make Offshore Rate Loans,
then, on notice thereof by such Lender to Holdings through the Administrative
Agent, any obligation of that Lender to make Offshore Rate Loans shall be
suspended until such Lender notifies the Administrative Agent and Holdings that
the circumstances giving rise to such determination no longer exist.

 

(b)           If a Lender determines that it is
unlawful to maintain any Offshore Rate Loan, Holdings shall, upon its receipt
of notice of such fact and demand from such Lender (with a copy to the
Administrative Agent), prepay in full such Offshore Rate Loans of that Lender then
outstanding, together with interest accrued thereon and amounts required under Section
4.04, either on the last day of the Interest Period thereof, if such Lender
may lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such Offshore
Rate Loan.  If Holdings is required to
so prepay any Offshore Rate Loan, then concurrently with such prepayment,
Holdings shall borrow from the affected Lender, in the amount of such repayment,
a Base Rate Loan.

 

(c)           If the obligation of any Lender to
make or maintain Offshore Rate Loans has been so terminated or suspended,
Holdings may elect, by giving notice to such Lender through the Administrative
Agent that all Loans which would otherwise be made by such Lender as Offshore
Rate Loans shall be instead Base Rate Loans.

 

53

 

(d)           Before giving any notice to the
Administrative Agent under this Section 4.02, the affected Lender shall
designate a different Lending Office with respect to its Offshore Rate Loans if
such designation will avoid the need for giving such notice or making such
demand and will not, in the judgment of such Lender, be illegal or otherwise
disadvantageous to such Lender.

 

4.03         Increased
Costs and Reduction of Return. 
(a)  If any Lender determines
that, due to either (i) the introduction of, or any change (other than any
change by way of imposition of or increase in reserve requirements included in
the calculation of the Offshore Rate) in, or in the interpretation of any law
or regulation or (ii) the compliance by that Lender with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining any Offshore Rate
Loans or participating in Letters of Credit, or, in the case of the L/C Issuer,
any increase in the cost to the L/C Issuer of agreeing to issue, issuing or maintaining
any Letter of Credit or of agreeing to make or making, funding or maintaining
any unpaid drawing under any Letter of Credit, then Holdings shall be liable
for, and shall from time to time, upon demand (with a copy of such demand to be
sent to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender, additional amounts as are sufficient to compensate such
Lender for such increased costs.

 

(b)           If any Lender shall have determined
that (i) the introduction of any Capital Adequacy Regulation,
(ii) any change in any Capital Adequacy Regulation, (iii) any change
in the interpretation or administration of any Capital Adequacy Regulation by
any central bank or other Governmental Authority charged with the interpretation
or administration thereof, or (iv) compliance by such Lender (or its
Lending Office) or any corporation controlling such Lender with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender and (taking into consideration such Lender’s or such corporation’s
policies with respect to capital adequacy and such Lender’s desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Lender to Holdings through the
Administrative Agent, Holdings shall pay to such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender for such increase.

 

4.04         Funding
Losses.  As a consequence of:

 

(a)           the failure of Holdings to make on a
timely basis any payment of principal of any Offshore Rate Loan;

 

(b)           the failure of Holdings to borrow,
continue or convert a Loan after Holdings has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Conversion/ Continuation;

 

(c)           the failure of Holdings to make any
prepayment in accordance with any notice delivered under Section 2.05, Section
2.07 or Section 2.08;

 

54

 

(d)           the prepayment (including pursuant to
Section 2.05, Section 2.07, Section 2.08 or Section
4.02(b)) or other payment (including after acceleration thereof) of an Offshore
Rate Loan on a day that is not the last day of the relevant Interest Period;
and

 

(e)           the conversion under Section 2.04
of any Offshore Rate Loan to a Base Rate Loan on a day that is not the last day
of the relevant Interest Period;

 

Holdings shall pay to the appropriate Lender within
five (5) Business Days after demand, a prepayment fee, failure to borrow fee or
failure to convert fee, as the case may be (determined as though 100% of the
Offshore Rate Loan had been funded in the London interbank eurodollar currency
market) equal to the sum of:

 

(i)            the amount, if any, by which (A) the
additional interest would have accrued on the amount prepaid or not borrowed at
the Offshore Rate plus the Applicable Margin for Offshore Rate Loans if
that amount had remained or been outstanding through the last day of the
applicable Interest Period exceeds (B) the interest that such Lender could
recover by placing such amount on deposit in the London interbank eurodollar
currency market for a period beginning on the date of the prepayment or failure
to borrow and ending on the last day of the applicable Interest Period (or, if
no deposit rate quotation is available for such period, for the most comparable
period for which a deposit rate quotation may be obtained); plus

 

(ii)           all out-of-pocket expenses incurred
by such Lender reasonably attributable to such payment, prepayment or failure
to borrow.

 

Each Lender’s determination
of the amount of any prepayment fee payable under this Section 4.04
shall be conclusive in the absence of manifest error.  The obligations of Holdings under this Section
4.04 shall survive the payment and performance of the Obligations and the
termination of this Agreement.

 

4.05         Inability
to Determine Rates.  If the
Administrative Agent or the Majority Lenders determine that for any reason
adequate and reasonable means do not exist for determining the Offshore Rate
for any requested Interest Period with respect to a proposed Borrowing of
Offshore Rate Loans or conversion or continuation of Offshore Rate Loans, or
that the Offshore Rate applicable pursuant to Section 2.10(a) for any
requested Interest Period with respect to a proposed Borrowing of Offshore Rate
Loans, or a conversion into or continuation of Offshore Rate Loans does not
adequately and fairly reflect the cost to such Lenders of funding such Loans,
the Administrative Agent will promptly so notify Holdings and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Offshore Rate Loans, as the case may be, hereunder shall be
suspended until the Administrative Agent upon the instruction of the Majority
Lenders revokes such notice in writing. 
Upon receipt of such notice, Holdings may revoke any Notice of Borrowing
or Notice of Conversion/Continuation then submitted by it.  If Holdings does not revoke such Notice, the
Lenders shall make, convert or continue the Loans, as proposed by Holdings, in
the amount specified in the applicable notice submitted by Holdings, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
Offshore Rate Loans, as the case may be.

 

55

 

4.06         Certificates
of Lenders.  Any Lender claiming
reimbursement or compensation under this Article IV shall deliver to
Holdings (with a copy to the Administrative Agent) a certificate setting forth
in reasonable detail the amount payable to such Lender hereunder, and the basis
for calculation of such amount, and such certificate shall be conclusive and
binding on Holdings in the absence of manifest error.

 

4.07         Substitution
of Lenders.  Upon the receipt by
Holdings from any Lender (an “Affected Lender”) of a claim for
compensation under Section 4.03, Holdings may:  (i) request one or more of the other Lenders to acquire and
assume all of such Affected Lender’s Loans and Commitment; or
(ii) designate a replacement lending institution (which shall be an
Eligible Assignee) to acquire and assume all of such Affected Lender’s Loans
and Commitment (a “Replacement Lender”); provided, however,
that Holdings shall be liable for the payment upon demand of all costs and
other amounts arising under Section 4.04 that result from the
acquisition of any Affected Lender’s Loan and/or Commitment (or any portion
thereof) by a Lender or Replacement Lender, as the case may be, on a date other
than the last day of the applicable Interest Period with respect to any
Offshore Rate Loan then outstanding. 
Any such designation of a Replacement Lender under clause
(ii) shall be effected in accordance with, and subject to the terms and
conditions of, the assignment provisions contained in Section 11.08, and
shall in any event be subject to the prior written consent of the
Administrative Agent, the L/C Issuer and the Swingline Lender (which consent
shall not be unreasonably withheld).

 

4.08         Survival.  The agreements and obligations of Holdings
in this Article IV shall survive the termination of the Commitments, the
termination or expiration of all Letters of Credit and the payment of all other
Obligations.

 

ARTICLE V

 

CONDITIONS
PRECEDENT

 

5.01         Conditions
to Signing Date.  The effectiveness
of this Agreement and the obligations of each Lender to become a party hereto
shall be subject to the condition that the Administrative Agent shall have
received on or before the Signing Date all of the following, in form and
substance reasonably satisfactory to the Administrative Agent and each Lender,
and in sufficient copies for each Lender:

 

(a)           Credit Agreement.  This Agreement executed by each party
hereto;

 

(b)           Resolutions; Incumbency.

 

(i)            Copies of the resolutions of the
board of directors of each Loan Party authorizing the transactions contemplated
hereby, certified as of the Signing Date by the Secretary or an Assistant
Secretary of such Person; and

 

(ii)           a certificate of the Secretary or
Assistant Secretary of each Loan Party, dated as of the Signing Date,
certifying the names, titles and true signatures of the officers of such Person
authorized to execute, deliver and perform, as applicable, this Agreement and
all other Loan Documents to be delivered by it hereunder; and

 

56

 

(c)           Financial Statements.

 

(i)            The audited consolidated balance
sheet of Holdings and its Subsidiaries as at December 31, 2001 and December 31,
2002, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the fiscal year then ended, certified
by a Responsible Officer of the Company;

 

(ii)           the unaudited consolidated balance
sheet of Holdings and its Subsidiaries as at June 30, 2003, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for the fiscal quarter then ended, certified by a Responsible Officer of
the Company; and

 

(iii)          such other financial information as the
Administrative Agent or any Lender may reasonably request.

 

5.02         Conditions to
Effective Date.  The obligations of
each Lender to advance its Proportionate Share of any Loan hereunder (including
the obligations of any New Lender to advance its Proportionate Share of any
Loans currently outstanding under the Existing Credit Agreement pursuant to Section
2.01 hereof and of the Term B Lenders to make the Term B Loans) shall be
subject to the condition that the Administrative Agent shall have received on
or before the Effective Date all of the following, in form and substance
reasonably satisfactory to the Administrative Agent and each Lender, and in
sufficient copies for each Lender:

 

(a)           Organization Documents; Good
Standing.  Each of the following
documents:

 

(i)            the articles or certificate of
incorporation and the bylaws of each Loan Party as in effect on the Effective
Date, certified by the Secretary or Assistant Secretary of such Person as of
the Effective Date; and

 

(ii)           a good standing certificate, as of a
recent date, for each Loan Party from the Secretary of State (or similar,
applicable Governmental Authority) of its state of incorporation and each state
where its ownership, lease or operation of property or the conduct of its
business requires such Loan Party be qualified or otherwise licensed to do
business;

 

(b)           Legal Opinion.  An opinion of Gibson, Dunn &
Crutcher LLP, counsel to the Loan Parties and addressed to the Administrative
Agent and the Lenders, dated the Effective Date, substantially in the form of Exhibit
D;

 

(c)           Payment of Fees.  Evidence of payment by Holdings of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Effective Date, together with reasonable Attorney Costs of Wells Fargo
to the extent invoiced prior to or on the Effective Date, plus such
additional amounts of reasonable Attorney Costs as shall constitute Wells
Fargo’s reasonable estimate of Attorney Costs incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between Holdings and Wells
Fargo); including any such costs, fees and expenses arising under or referenced
in Section 2.11 and Section 11.04;

 

57

 

(d)           Officer’s Certificate.  A certificate signed by a Responsible
Officer of each of Holdings and the Company, dated as of the Effective Date,
stating that:

 

(i)            the representations and warranties
contained in Article VI are true and correct on and as of such date, as
though made on and as of such date;

 

(ii)           no Default or Event of Default exists
or would result from the initial Credit Extension; and

 

(iii)          there has occurred since December 31,
2002, no event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect;

 

(e)           Borrowing Base Certificate.  A completed Borrowing Base Certificate,
certifying the Borrowing Base as of the month ended June 30, 2003, signed by a
Responsible Officer of Holdings, and dated the Effective Date;

 

(f)            Collateral Documents.  The Collateral Documents, executed by each
Loan Party, in appropriate form for recording, where necessary, together with:

 

(i)            copies of all UCC-l, UCC-2 and UCC-3
financing statements to be filed to perfect or amend the security interests of
the Administrative Agent for the benefit of the Lenders, or other evidence
satisfactory to the Administrative Agent that there have been filed, registered
or recorded all financing statements and other filings, registrations and
recordings necessary and advisable to perfect or amend the perfection of the
Liens of the Administrative Agent for the benefit of the Lenders in accordance
with applicable law, or, with respect to the Mortgaged Property, evidence
satisfactory to the Administrative Agent that the executed Mortgages with
respect to the Mortgaged Property shall have been delivered to Chicago Title
Insurance Company in recordable form on or prior to the Effective Date for
recording (or, in the case of Mortgaged Properties for which Mortgages have not
previously been delivered under the Existing Credit Agreement, within 60 days
thereafter);

 

(ii)           written advice relating to such Lien
and judgment searches as the Administrative Agent shall have requested, and
such termination statements or other documents as may be necessary to confirm
that the Collateral is subject to no other Liens in favor of any Persons (other
than Permitted Liens);

 

(iii)          to the extent not previously delivered
pursuant to the Existing Credit Agreement, receipt by the Administrative Agent
of all certificates and instruments representing the Pledged Collateral,
together with stock transfer powers executed in blank with signatures
guaranteed as the Administrative Agent may specify;

 

(iv)          funds sufficient to pay any filing or
recording tax or fee in connection with any and all UCC-1 financing statements
and the Mortgages;

 

(v)           to the extent not previously
delivered pursuant to the Existing Credit Agreement, surveys and surveyor’s
certification as to all real property and all land covered by a lease in
respect of which there is delivered a Mortgage, or as may be reasonably
required by the

 

58

 

Administrative Agent, each in form and substance satisfactory to the
Administrative Agent and the Lenders;

 

(vi)          proof of payment of all title
insurance premiums, documentary stamp or intangible taxes, recording fees and
mortgage taxes payable in connection with the recording of any Mortgage or the
issuance of the title insurance policies (whether due on the Effective Date or
in the future) including sums due in connection with any future advances;

 

(vii)         to the extent not previously delivered
pursuant to the Existing Credit Agreement, such consents, estoppels, subordination
agreements and other documents and instruments executed by landlords, tenants
and other Persons party to material contracts relating to any Collateral as to
which the Administrative Agent shall be granted a Lien for the benefit of the
Lenders, as requested by the Administrative Agent or any Lender; and

 

(viii)        evidence that all other actions
necessary or, in the reasonable opinion of the Administrative Agent or the
Lenders, desirable to perfect and protect the first priority Lien created by
the Collateral Documents, and to enhance the Administrative Agent’s ability to
preserve and protect its and the Lenders’ interests in and access to the
Collateral;

 

(g)           Insurance Policies.  Evidence that the Administrative Agent has
been named as loss payee under all policies of casualty insurance under a Form
438BFU or other standard lender’s loss payable endorsement, and as additional
insured under all policies of liability insurance, required in accordance with Section 7.06
and the Collateral Documents, together with a certificate of insurance as to
all insurance coverage on the properties of Holdings and its Subsidiaries;

 

(h)           Compliance Certificate.  A completed Compliance Certificate, as of
June 30, 2003, signed by a Responsible Officer of Holdings, and dated the
Effective Date;

 

(i)            Second Amendment to Deeds of
Trust.  The Second Amendment to
Deeds of Trust executed by each party thereto pursuant to which the
Administrative Agent shall be appointed substitute named beneficiary under all
Mortgages and the Mortgages shall be amended as provided therein;

 

(j)            Control Agreements.  Any control agreements for the perfection of
deposit accounts of Holdings and the Guarantors party hereto which have been
requested by the Administrative Agent prior to the Effective Date shall have
been executed by Holdings or such Guarantor, as applicable, and any applicable
financial institutions;

 

(k)           Assignments of Trademarks.  Such actions shall have been taken as the
Administrative Agent deems necessary to ensure the Administrative Agent’s and
the Lenders’ rights as secured party with respect to any trademarks of Holdings
or any Guarantor party hereto;

 

(l)            Notes.  Notes executed by Holdings for the Lenders
requesting Notes; and

 

(m)          Other Documents.  Such other approvals, opinions, documents or
materials as the Administrative Agent or any Lender may reasonably request.

 

59

 

5.03         Conditions
to the Subsequent Effective Date.  The obligations of each Additional Lender to become a party hereto
and of each Additional Lender to make the Additional Term B Loans and/or to
provide the Additional Revolving Commitment shall be subject to the condition
that the Administrative Agent shall have received on or before the Subsequent
Effective Date all of the following, in form and substance reasonably
satisfactory to the Administrative Agent and each Additional Lender, and in
sufficient copies for each Additional Lender:

 

(a)           Credit Agreement and Notes.  This Agreement executed by each Additional
Lender and Notes executed by Holdings for each Additional Lender requesting
Notes;

 

(b)           Secretary’s Certificate.  A certificate of the Secretary or Assistant
Secretary of each Loan Party, dated as of the Subsequent Effective Date,
certifying:

 

(i)            that the resolutions of the board of
directors of each Loan Party authorizing the transactions contemplated hereby,
as delivered on the Effective Date, are in full force and effect and have not
been amended, supplemented or modified; and

 

(ii)           the names, titles and true signatures
of the officers of such Person authorized to execute, deliver and perform, as
applicable, this Agreement and all other Loan Documents to be delivered by it
hereunder;

 

(c)           Organization Documents; Good
Standing.  Each of the following
documents:

 

(i)            the articles or certificate of
incorporation and the bylaws of each Loan Party as in effect on the Subsequent
Effective Date, certified by the Secretary or Assistant Secretary of such
Person as of the Subsequent Effective Date; and

 

(ii)           a good standing certificate, as of a
date reasonably prior to the Subsequent Effective Date as is determined by the
Administrative Agent in good faith, for each Loan Party from the Secretary of
State (or similar, applicable Governmental Authority) of its state of incorporation
and each state where its ownership, lease or operation of property or the
conduct of its business requires such Loan Party be qualified or otherwise
licensed to do business;

 

(d)           Payment of Fees.  Evidence of payment by Holdings of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Subsequent Effective Date, together with reasonable Attorney Costs of
Wells Fargo to the extent invoiced prior to or on the Subsequent Effective
Date, plus such additional amounts of reasonable Attorney Costs as shall
constitute Wells Fargo’s reasonable estimate of Attorney Costs incurred or to
be incurred by it through the closing proceedings (provided that such
estimate shall not thereafter preclude final settling of accounts between
Holdings and Wells Fargo); including any such costs, fees and expenses arising
under or referenced in Section 2.11 and Section 11.04;

 

(e)           Officer’s Certificate.  A certificate signed by a Responsible
Officer of each of Holdings and the Company, dated as of the Subsequent
Effective Date, stating that:

 

(i)            the representations and warranties
contained in Article VI are true and correct on and as of such date, as
though made on and as of such date (except to the extent such

 

60

 

representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct as of such earlier date);

 

(ii)           no Default or Event of Default exists
or would result from the Credit Extensions to be made as of the Subsequent
Effective Date; and, on a pro forma basis, if the revised Aggregate Commitment
as of the Subsequent Effective Date had been available, and the outstanding
amount of Loans on the Subsequent Effective Date were outstanding at the time the
most recently completed Compliance Certificate was delivered to the
Administrative Agent, Holdings would have been in compliance with the financial
covenants contained in Article VIII for the time period specified in
such Compliance Certificate; and

 

(iii)          there has occurred since the Effective
Date, no event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect; and

 

(f)            Other Documents.  Such other approvals, opinions, documents or
materials as the Administrative Agent or any Additional Lender may reasonably
request.

 

5.04         Conditions
to All Credit Extensions. 
The obligation of each Lender (including the Swingline Lender) to make
any Credit Extension (including its initial Credit Extension) and the obligation
of the L/C Issuer to Issue any Letter of Credit (including the initial Letter
of Credit) shall be subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or Issuance Date:

 

(a)           Notice, Application.  The Administrative Agent shall have received
a Notice of Borrowing or in the case of any Issuance of any Letter of Credit,
the L/C Issuer and the Administrative Agent shall have received an L/C
Application or L/C Amendment Application, as required under Section 3.02;

 

(b)           Continuation of Representations
and Warranties.  The representations
and warranties in Article VI shall be true and correct on and as of such
Borrowing Date or Issuance Date with the same effect as if made on and as of
such Borrowing Date or Issuance Date (except to the extent such representations
and warranties expressly refer to an earlier date, in which case they shall be
true and correct as of such earlier date and except that this
Section 5.04(b) shall be deemed instead to refer to the last day of the
most recent quarter and year for which financial statements have then been
delivered in respect of the representation and warranty made in Section 6.11(a));

 

(c)           No Existing Default.  No Default or Event of Default shall exist
or shall result from such Borrowing or Issuance;

 

(d)           No Material Adverse Effect.  There has occurred since December 31, 2002,
no event or circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect; and

 

(e)           Borrowing Base.  On any such Borrowing Date or Issuance Date,
the Administrative Agent shall be in receipt of the completed Borrowing Base
Certificate then required to be delivered by Holdings hereunder, and the
Effective Amount of all outstanding Revolving Loans and Swingline Loans and the
Effective Amount of all L/C Obligations shall not

 

61

 

exceed an amount equal to the lesser of (i) the Aggregate Revolving
Commitment and (ii) the Borrowing Base.

 

(f)            No Future Advance Notice.  Neither the Administrative Agent nor any
Lender shall have received from Holdings or any other Person any notice that
any Collateral Document will no longer secure on a first priority basis future
advances or future Loans to be made or extended under this Agreement.

 

Each Notice of Borrowing and L/C Application or L/C
Amendment Application submitted by Holdings hereunder shall constitute a
representation and warranty by Holdings hereunder, as of the date of each such
notice and as of each Borrowing Date or Issuance Date, as applicable, that
(i) the conditions in this Section 5.04 are satisfied, and
(ii) the statements contained in the most recent Borrowing Base
Certificate, if any, delivered by Holdings hereunder shall be true, correct and
complete on and as of the date of such Borrowing Date or Issuance Date, as
applicable, as though made on and as of such date, except for changes in the
information set forth in such Borrowing Base Certificate in the ordinary course
of business.

 

ARTICLE VI

 

REPRESENTATIONS
AND WARRANTIES

 

Each of Holdings and the Company represents and
warrants to the Administrative Agent and each Lender that:

 

6.01         Corporate
Existence and Power. 
Holdings and each of its Subsidiaries:

 

(a)           is a corporation, limited liability
company or partnership duly organized or formed, as the case may be, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation;

 

(b)           has the power and authority and all
governmental licenses, authorizations, consents and approvals (i) to own
its assets and carry on its business and (ii) in the case of any Loan
Party, to execute, deliver, and perform its obligations under the Loan
Documents;

 

(c)           is duly qualified, licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, license or good standing; and

 

(d)           is in compliance with all
Requirements of Law;

 

except, in each case referred to in clauses (b)(i),
(c) or (d) of this Section 6.01, to the extent that the failure to do so
would not reasonably be expected to have a Material Adverse Effect.

 

6.02         Corporate Authorization; No
Contravention.  The execution,
delivery and performance by each Loan Party of this Agreement and each other
Loan Document to which such Loan Party is party, have been duly authorized by
all necessary organizational action, and do not and will not:

 

62

 

(a)           contravene the terms of any of that Person’s
Organization Documents;

 

(b)           conflict with or result in any breach
or contravention of, or the creation of any Lien under, any document evidencing
any Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such Person
or its property is subject; or

 

(c)           violate any Requirement of Law.

 

6.03         Governmental
Authorization.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority (except for recordings or filings in
connection with the Liens granted to the Administrative Agent under the
Collateral Documents) is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any  Loan Party of this Agreement or any other
Loan Document.

 

6.04         Binding Effect.  This Agreement and each other Loan Document
to which any Loan Party is a party constitute the legal, valid and binding
obligations of such Loan Party, enforceable against any Loan Party in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors’ rights generally or by equitable principles relating to
enforceability.

 

6.05         Litigation.  Except as specifically disclosed in Schedule
6.05, there are no actions, suits, proceedings, claims or disputes pending,
or to the best knowledge of Holdings and the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against Holdings, or its Subsidiaries or any of their respective
properties which:

 

(a)           purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby or thereby; or

 

(b)           are reasonably likely to result in an
adverse result for Holdings or its Subsidiaries, which adverse result would
reasonably be expected to have a Material Adverse Effect.  No injunction, writ, temporary restraining
order or any order of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the execution, delivery
or performance of this Agreement or any other Loan Document, or directing that
the transactions provided for herein or therein not be consummated as herein or
therein provided.

 

6.06         No Defaults.  No Default or Event of Default exists or
would result from the incurring of any Obligations by any Loan Party or from
the grant or perfection of the Liens of the Administrative Agent and the
Lenders on the Collateral.  Neither
Holdings nor any Subsidiary is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect,
or that would create an Event of Default under Section 9.01(e).

 

6.07         ERISA
Compliance.  Except as
specifically disclosed in Schedule 6.07:

 

63

 

(a)           Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law.  Each Plan which
is intended to qualify under section 401(a) of the Code has received a
favorable determination letter from the IRS and to the best knowledge of
Holdings and the Company, nothing has occurred which would cause the loss of
such qualification.  Holdings, the
Company and each ERISA Affiliate have made all required contributions to any
Plan subject to section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to section 412
of the Code has been made with respect to any Plan.

 

(b)           There are no pending or, to the best
knowledge of Company, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect.  There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

(c)           (i) No ERISA Event has occurred
or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded
Pension Liability; (iii) neither Holdings nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under section 4007 of ERISA);  (iv) neither
Holdings nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
section 4219 of ERISA, would result in such liability) under section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither
Holdings nor any ERISA Affiliate has engaged in a transaction that could be
subject to section 4069 or 4212(c) of ERISA.

 

6.08         Use of
Proceeds; Margin Regulations. 
The proceeds of the Loans and the Letters of Credit are to be used
solely for the purposes set forth in and permitted by Section 7.12 and Section
8.07.  No Loan Party is generally
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.

 

6.09         Title to Properties;
Liens.  Holdings and each Subsidiary
have good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
their respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect.  The property of Holdings and its
Subsidiaries is subject to no Liens, other than Permitted Liens.

 

6.10         Taxes.  Holdings and its Subsidiaries have filed all
Federal and other material tax returns and reports required to be filed, and
have paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
Holdings or any Subsidiary that would, if made, have a Material Adverse Effect.

 

6.11         Financial
Condition.  (a)  The audited consolidated balance sheet of
Holdings and its Subsidiaries dated December 31, 2002, the unaudited
balance sheet of Holdings and its

 

64

 

Subsidiaries for the fiscal quarter ended June 30, 2003 and the related
consolidated statements of income or operations and cash flows for the fiscal
period ended on that date:

 

(i)            were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, subject to ordinary, good faith year end
audit adjustments in the case of quarterly financial statements;

 

(ii)           are complete and accurate in all
material respects and fairly present the financial condition of Holdings and
its Subsidiaries as of the date thereof and results of operations and cash
flows for the period covered thereby; and

 

(iii)          except as specifically disclosed in Schedule
6.11, show all material Indebtedness and other liabilities, direct or
contingent, of Holdings and its consolidated Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Contingent
Obligations.

 

(b)           Since December 31, 2002, there has
not been, nor is it reasonably likely that there will be, any Material Adverse
Effect.

 

(c)           Any pro forma financial statements of
Holdings and its Subsidiaries furnished by Holdings to the Lenders hereunder
were prepared in accordance with GAAP, are complete and accurate in all
material respects and fairly present the pro forma financial condition of
Holdings and its Subsidiaries as of the date thereof, and any financial
projections furnished to the Lenders hereunder represent Holdings’ best
estimates and assumptions as to future performance, which Holdings believes to
be fair and reasonable as of the time made in the light of current and
reasonably foreseeable business conditions.

 

6.12         Environmental
Matters.  Holdings
conducts in the ordinary course of business a review of the effect of existing
Environmental Laws and existing Environmental Claims on its business,
operations and properties, and as a result thereof Holdings has reasonably
concluded that, except as specifically disclosed in Schedule 6.12, such
Environmental Laws and Environmental Claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

(a)           To the best knowledge of Holdings,
except as specifically disclosed in Schedule 6.12, the ongoing
operations of Holdings and each of its Subsidiaries comply in all respects with
all Environmental Laws, except such non-compliance which would not (if enforced
in accordance with applicable law) result in liability in excess of $1,000,000
in the aggregate.

 

(b)           Except as specifically disclosed in Schedule 6.12,
Holdings and each of its Subsidiaries have obtained all licenses, permits,
authorizations and registrations required under any Environmental Law (“Environmental
Permits”) and necessary for their respective ordinary course operations, all
such Environmental Permits are in good standing, and Holdings and each of its
Subsidiaries are in compliance with all material terms and conditions of such
Environmental Permits.

 

(c)           Except as specifically disclosed in Schedule 6.12,
none of Holdings, any of its Subsidiaries or any of their respective present
property or operations, is subject to any

 

65

 

outstanding written order from or agreement with any Governmental
Authority, nor subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Material.

 

(d)           Except as specifically disclosed in Schedule 6.12,
there are no Hazardous Materials or other conditions or circumstances existing
with respect to any property of Holdings or any Subsidiary, or arising from
operations prior to the Effective Date, of Holdings or any of its Subsidiaries
that would reasonably be expected to give rise to Environmental Claims with a
potential liability of Holdings and its Subsidiaries in excess of $1,000,000 in
the aggregate for any such condition, circumstance or property.  In addition, (i) neither Holdings nor
any Subsidiary has any underground storage tanks (A) that are not properly
registered or permitted under applicable Environmental Laws, or (B) that
are leaking or disposing of Hazardous Materials off-site, and
(ii) Holdings and its Subsidiaries have notified all of their employees of
the existence, if any, of any health hazard arising from the conditions of
their employment and have met all notification requirements under Title III of
CERCLA and all other Environmental Laws.

 

6.13         Collateral
Documents.

 

(a)           (i) The provisions of each of the
Collateral Documents were, as of the closing of the Existing Credit Agreement,
and as amended, remain, effective to create in favor of the Administrative
Agent for the benefit of the Lenders, a legal, valid and enforceable first
priority Lien in all right, title and interest of Holdings, or the applicable
Wholly-Owned Subsidiary (as the case may be), in the Collateral described
therein, (ii) all filings and other actions necessary or desirable to perfect
and maintain the perfection and first priority status of such Liens have been
duly made or taken and remain in full force and effect and (iii) each
Intellectual Property Security Agreement has been filed in the U.S. Patent and
Trademark Office and the U.S. Copyright Office.

 

(b)           Each Mortgage when delivered was, and
as amended, remains, as of the Effective Date, effective to grant to the
Administrative Agent for the benefit of the Lenders a legal, valid and
enforceable deed of trust/mortgage Lien on all the right, title and interest of
the mortgagor under such Mortgage in the Mortgaged Property described therein.  Each such Mortgage was duly recorded in the
offices listed on the schedule to such Mortgage and the mortgage recording fees
and taxes in respect thereof were paid and compliance was otherwise had with
the formal requirements of state law applicable to the recording of real estate
mortgages generally.  Each such
Mortgaged Property, subject to the encumbrances and exceptions to title set
forth therein and except as noted in the title policies delivered to the
Administrative Agent pursuant to Section 5.01, is subject to a
legal, valid, enforceable and perfected first priority Lien.  In addition, financing statements have been
filed in the offices specified in such Mortgage thereby creating a legal,
valid, enforceable and perfected first Lien on all right, title and interest of
Holdings or such Subsidiary under such Mortgage in all personal property and
fixtures which is covered by such Mortgage, subject to no other Liens, except
the encumbrances and exceptions to title set forth therein and except as noted
in the title policies delivered to the Administrative Agent pursuant to Section 5.01,
and Permitted Liens.

 

66

 

(c)           All representations and warranties of
Holdings and any of its Subsidiaries party thereto contained in the Collateral
Documents are true and correct.

 

6.14         Regulated
Entities.  None of Holdings, any
Person controlling Holdings, or any Subsidiary, is an “Investment Company”
within the meaning of the Investment Company Act of 1940.  No Loan Party is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.

 

6.15         No Burdensome Restrictions.  Neither Holdings nor any Subsidiary is a
party to or bound by any Contractual Obligation, or subject to any restriction
in any Organization Document, or any Requirement of Law, which could reasonably
be expected to have a Material Adverse Effect. 
Except as set forth on Schedule 6.15, neither Holdings nor any
Subsidiary is a party to or bound by any Contractual Obligation which
restricts, limits or prohibits the payment of dividends by any Subsidiary or
the making of any other distribution in respect of such Subsidiary’s capital
stock.

 

6.16         Copyrights,
Patents, Trademarks and Licenses, Etc. 
Holdings or its Subsidiaries own or are licensed or otherwise have the
right to use all of the patents, trademarks, service marks, trade names,
copyrights, contractual franchises, authorizations and other rights that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. 
To the best knowledge of Holdings and the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by Holdings or any Subsidiary
infringes upon any rights held by any other Person.  Except as specifically disclosed in Schedule 6.05, no
claim or litigation regarding any of the foregoing is pending or, to the best
knowledge of Holdings and the Company, threatened, and no patent, invention,
device, application, principle or any statute, law, rule, regulation, standard
or code is pending or, to the best knowledge of Holdings and the Company,
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.

 

6.17         Subsidiaries.  As of the Effective Date, Holdings has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
6.17 and has no equity investments in any other Person other than those
specifically disclosed in part (b) of Schedule 6.17.  All U.S. Subsidiaries of Holdings as of the
Effective Date are identified as such on part (a) of Schedule 6.17,
as well as a denotation as to whether such Subsidiary is a Wholly-Owned
Subsidiary or Non-Wholly-Owned Subsidiary.

 

6.18         Insurance.  Except as specifically disclosed in Schedule
6.18, the properties of Holdings and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of Holdings,
in such amounts, with such deductibles and covering such risks as are deemed to
be appropriate by Holdings in the exercise of its reasonable business judgment.

 

6.19         Swap
Obligations.  (a)  Neither Holdings nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations.  In the
ordinary course of managing its business, Holdings undertakes its own
independent

 

67

 

assessment of its consolidated assets, liabilities and commitments and
considers appropriate means of mitigating and managing risks associated with
such matters, and Holdings has not relied on any swap counterparty or any
Affiliate of any swap counterparty in determining whether to enter into any
Swap Contract.

 

(b)           Neither Holdings nor any of its
Subsidiaries has entered into any master agreement relating to Swap Contracts
and under which termination values resulting from Swap contracts that are
Specified Swap Contracts are nettable against termination values resulting from
Swap Contracts that are not Specified Swap Contracts, unless only Specified
Swap Contracts are outstanding under such master agreement.

 

6.20         Real Property.  Schedule 6.20 contains a complete
listing of all real property owned by Holdings or any of its Subsidiaries as of
the Effective Date, and identifies which of such properties constitute Mortgaged
Property as of the Effective Date.

 

6.21         Full
Disclosure.  None of the
representations or warranties made by any Loan Party in the Loan Documents as
of the date such representations and warranties are made or deemed made, and
none of the statements contained in any exhibit, report, statement or
certificate furnished by or on behalf of any Loan Party in connection with the
Loan Documents (including the offering and disclosure materials delivered by or
on behalf of any Loan Party to the Lenders prior to the Effective Date),
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of the
time when made or delivered; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, such Loan Party represents only that it
acted in good faith and utilized reasonable assumptions and due care in the
preparation of such information, report, financial statement, exhibit or
schedule (it being understood that forecasts and projections by their nature
involve approximations and uncertainties).

 

6.22         Internal
Controls.  To the extent that
Holdings is a public corporation:

 

(a)           Except as set forth in the reports of
Holdings filed with the SEC under the Exchange Act, Holdings has established
and maintains disclosure controls and procedures (as such term is defined in
Rule 13a-14 under the Exchange Act), which (i) are designed to ensure that
material information relating to Holdings, including its consolidated
subsidiaries, is made known to Holdings’ principal executive officer and its
principal financial officer or persons performing similar functions by others
within those entities, particularly during the periods in which the periodic
reports required under the Exchange Act are being prepared; (ii) have been
evaluated for effectiveness as of a date within ninety (90) days prior to the
filing of Holdings’ most recent annual or quarterly report filed with the SEC;
and (iii) are effective in all material respects to perform the functions for
which they were established;

 

(b)           Except as set forth in the reports of
Holdings filed with the SEC under the Exchange Act, based on the evaluation of
its disclosure controls and procedures, Holdings is not aware of (i) any
significant deficiency in the design or operation of internal controls over
financial reporting which are reasonably likely to adversely affect Holdings’
ability to record,

 

68

 

process, summarize and report financial information or (ii) any fraud,
whether or not material, that involves management or other employees who have a
significant role in Holdings’ internal controls over financial reporting; and

 

(c)           Since the date of the most recent
evaluation of such disclosure controls and procedures, except as set forth in
the reports of Holdings filed with the SEC under the Exchange Act, there have
been no significant changes in internal controls over financial reporting or in
other factors that could materially affect internal controls over financial
reporting, including any corrective actions with regard to significant deficiencies
and material weaknesses.

 

ARTICLE VII

 

AFFIRMATIVE
COVENANTS

 

So long as any Lender shall have any Commitment
hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied,
or any Letter of Credit shall remain outstanding, unless the Majority Lenders
waive compliance in writing:

 

7.01         Financial
Statements.  Holdings shall
deliver to the Administrative Agent and each Lender, in form and detail
satisfactory to the Administrative Agent and the Majority Lenders:

 

(a)           as soon as available, but not later
than ninety (90) days after the end of each fiscal year, a copy of the audited
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
such year and the related consolidated statements of income or operations, shareholders’
equity, retained earnings and cash flows for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, and
accompanied by the unqualified opinion of PricewaterhouseCoopers LLP or another
nationally-recognized independent public accounting firm (the “Independent
Auditor”) which report shall state that such consolidated financial
statements present fairly the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years.  Such opinion shall not be qualified as to
(i) going concern or (ii) any limitation in the scope of the audit;

 

(b)           as soon as available, but not later
than forty-five (45) days after the end of each of the first three fiscal
quarters of each fiscal year, a copy of the unaudited consolidated balance
sheet of Holdings and its Subsidiaries as of the end of such quarter and the
related consolidated statements of income, shareholders’ equity and cash flows
for the period commencing on the first day and ending on the last day of such
quarter, and certified by a Responsible Officer of Holdings as being complete
and accurate in all material respects and fairly presenting, in accordance with
GAAP (subject to ordinary, good faith year-end audit adjustments), the
financial position and the results of operations and cash flows of Holdings and
the Subsidiaries; and

 

(c)           promptly, such other financial
statements and information (including financial information regarding Minority
Investments) as the Administrative Agent, at the request of any Lender, may
from time to time request.

 

69

 

As to any information contained in materials furnished
pursuant to Section 7.02(e), Holdings shall not be separately required to
furnish such information under Section 7.01(a) or Section 7.01(b)
above, but the foregoing shall not be in derogation of the obligation of
Holdings to furnish the information and materials described in Section
7.01(a) and Section 7.01(b) above at the times specified therein.

 

7.02         Certificates;
Other Information.  Holdings
shall furnish to the Administrative Agent and each Lender:

 

(a)           concurrently with the delivery of the
financial statements referred to in Section 7.01(a), a certificate of
the Independent Auditor stating that in the course of the regular examination
of the business of Holdings and its Subsidiaries, which examination was
conducted by such accounting firm in accordance with GAAP, nothing has come to
the attention of the Independent Auditor which would cause it to believe that a
Default or Event of Default has occurred and is continuing, or if, in the
opinion of the Independent Auditor, a Default or an Event of Default has
occurred and is continuing, a statement as to the nature thereof.

 

(b)           within ninety (90) days after the
close of each fiscal year, an update of the projections delivered to the
Lenders prior to the Effective Date (the “Effective Date Projections”)
for the then-current and next succeeding four fiscal years, certified by a Responsible
Officer of Holdings, together with a statement of such Responsible Officer
explaining in reasonable detail any significant variances from the Effective
Date Projections;

 

(c)           concurrently with the delivery of the
financial statements referred to in Section 7.01(a) and Section
7.01(b), a Compliance Certificate executed by a Responsible Officer of
Holdings;

 

(d)           within thirty (30) days after the end
of each calendar month, a Borrowing Base Certificate appropriately completed by
a Responsible Officer of Holdings;

 

(e)           promptly, copies of all financial
statements and reports that Holdings sends to its shareholders, and copies of
all financial statements and regular, periodical or special reports (including
Forms 10K, 10Q and 8K) that Holdings or any Subsidiary may make to, or file
with, the SEC;

 

(f)            promptly upon sending or receipt,
copies of any and all management letters and correspondence relating to
management letters, sent or received by Holdings or any of its Subsidiaries to
or from the Independent Auditor;

 

(g)           at the same time it is provided to
the holders of any Permitted Subordinated Debt, any notices and other
information provided to such holders pursuant to the reporting and notices
provisions of the Subordinated Debt Documents (without duplication of any
notices, financial statements and other information required hereunder);

 

(h)           within twenty (20) days of the
Administrative Agent’s or any Lender’s request therefor, (i) a current
list of the names, addresses and outstanding debts of all Account Debtors, and
(ii) a current list of the names, addresses and outstanding amounts due
all creditors of Holdings or any Subsidiary;

 

70

 

(i)            concurrently with the delivery of
the financial statements referred to in Section 7.01(a) and Section
7.01(b), an Update Certificate, executed by a Responsible Officer of
Holdings;

 

(j)            promptly, such additional
information regarding the business, financial or corporate affairs of Holdings
or any Subsidiary as the Administrative Agent, at the request of any Lender,
may from time to time request.

 

7.03         Notices.  Holdings shall promptly notify the
Administrative Agent:

 

(a)           of the occurrence of any Default or
Event of Default, and of the occurrence or existence of any event or
circumstance that foreseeably will become a Default or Event of Default;

 

(b)           of any matter that has resulted or
could result in a Material Adverse Effect, including (i) any breach or
non-performance of, or any default under, any Contractual Obligation of
Holdings or any of its Subsidiaries which has resulted or could result in a
Material Adverse Effect; and (ii) any dispute, litigation, investigation,
proceeding or suspension which may exist at any time between Holdings or any of
its Subsidiaries and any Governmental Authority (including under or pursuant to
any Environmental Laws) which has resulted or could result in a Material
Adverse Effect;

 

(c)           of the commencement of, or any
material development in, any litigation or proceeding affecting Holdings or any
Subsidiary (i) which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect, or (ii) in which the relief
sought is an injunction or other stay of the performance of this Agreement or
any Loan Document;

 

(d)           upon, but in no event later than ten
(10) days after, becoming aware of (i) any and all enforcement, cleanup,
removal or other governmental or regulatory actions instituted, completed or
threatened against Holdings or any Subsidiary or any of their respective
properties pursuant to any applicable Environmental Laws, (ii) all other
Environmental Claims, and (iii) any environmental or similar condition on
any real property adjoining or in the vicinity of the property of Holdings or
any Subsidiary that could reasonably be anticipated to cause such property or
any part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such property under any Environmental Laws;

 

(e)           of any other litigation or proceeding
affecting Holdings or any of its Subsidiaries which Holdings would be required
to report to the SEC pursuant to the Exchange Act, within four (4) days after
reporting the same to the SEC;

 

(f)            of the occurrence of any of the
following events affecting Holdings or any ERISA Affiliate (but in no event
more than ten (10) days after such event), and deliver to the Administrative
Agent and each Lender a copy of any notice with respect to such event that is
filed with a Governmental Authority and any notice delivered by a Governmental
Authority to Holdings or any ERISA Affiliate with respect to such event:

 

(i)            an ERISA Event;

 

71

 

(ii)           a material increase in the Unfunded
Pension Liability of any Pension Plan;

 

(iii)          the adoption of, or the commencement
of contributions to, any Plan subject to section 412 of the Code by Holdings or
any ERISA Affiliate; or

 

(iv)          the adoption of any amendment to a
Plan subject to section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension Liability;

 

(g)           of any material change in accounting
policies or financial reporting practices by Holdings or any of its
consolidated Subsidiaries;

 

(h)           upon the request from time to time of
the Administrative Agent or any Lender, the Swap Termination Values, together
with a description of the method by which such amounts were determined,
relating to any then-outstanding Swap Contracts to which Holdings or any of its
Subsidiaries is party;

 

(i)            the occurrence of any Event of Loss
exceeding $5,000,000;

 

(j)            of the entry by Holdings into any
Specified Swap Contract, together with the details thereof; and

 

(k)           of the occurrence of any default,
event of default, termination event or other event under any Specified Swap Contract
that after the giving of notice, passage of time or both, would permit either
counterparty to such Specified Swap Contract to terminate early any or all
trades relating to such contract.

 

Each notice under this Section 7.03 shall be
accompanied by a written statement by a Responsible Officer of Holdings setting
forth details of the occurrence referred to therein, and stating what action
Holdings or any affected Subsidiary proposes to take with respect thereto and
at what time.  Each notice under Section
7.03(a) shall describe with particularity any and all clauses or provisions
of this Agreement or other Loan Document that have been (or foreseeably will
be) breached or violated.

 

7.04         Preservation
of Corporate Existence, Etc. 
Holdings shall, and shall cause each Subsidiary to, except in connection
with transactions permitted by Section 8.03 and sales of assets
permitted by Section 8.02:

 

(a)           preserve and maintain in full force
and effect its (i) legal existence and (ii) good standing under the
laws of its state or jurisdiction of incorporation or formation;

 

(b)           preserve and maintain in full force
and effect all governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business;

 

(c)           use reasonable efforts, in the
ordinary course of business, to preserve its business organization and
goodwill; and

 

72

 

(d)           preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

 

7.05         Maintenance of
Property.  Holdings shall, and shall
cause each Subsidiary to, maintain, and preserve all its property which is used
or useful in its business in good repair and condition, and from time to time
make necessary repairs, renewals and replacements thereto so that its property
shall be fully and efficiently preserved and maintained consistent with
Holdings’ or such Subsidiary’s past practice.

 

7.06         Insurance.  In addition to insurance requirements set
forth in the Collateral Documents, Holdings shall maintain, and shall cause
each Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, including workers’
compensation insurance, public liability and property and casualty
insurance.  All such insurance shall
name the Administrative Agent as loss payee/mortgagee and as additional
insured, for the benefit of the Lenders, as their interests may appear.  All casualty and key man insurance
maintained by Holdings shall name the Administrative Agent as loss payee and
all liability insurance shall name the Administrative Agent as additional
insured for the benefit of the Lenders, as their interests may appear.  Upon the request of the Administrative Agent
or any Lender, Holdings shall furnish the Administrative Agent, with sufficient
copies for each Lender, at reasonable intervals (but not more than once per
calendar year) a certificate of a Responsible Officer of Holdings (and, if
requested by the Administrative Agent, any insurance broker of Holdings)
setting forth the nature and extent of all insurance maintained by Holdings and
its Subsidiaries in accordance with this Section 7.06 or any Collateral
Documents (and which, in the case of a certificate of a broker, were placed
through such broker).

 

7.07         Payment
of Obligations.  Holdings shall,
and shall cause each of its Subsidiaries to, pay and discharge as the same
shall become due and payable, all their respective obligations and liabilities,
including:

 

(a)           all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by Holdings or such
Subsidiary;

 

(b)           all lawful claims which, if unpaid,
would by law become a Lien upon its property not constituting a Permitted Lien;
and

 

(c)           all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness (except where failure to
do so would not otherwise constitute a Default or Event of Default hereunder).

 

73

 

7.08         Compliance
with Laws.  Holdings shall
comply, and shall cause each Subsidiary to comply, in all material respects
with all Requirements of Law of any Governmental Authority having jurisdiction
over it or its business (including the Federal Fair Labor Standards Act),
except such as may be contested in good faith or as to which a bona fide
dispute may exist.

 

7.09         Compliance
with ERISA.  Holdings shall, and
shall cause each of its ERISA Affiliates to: 
(a) maintain each Plan in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law;
(b) cause each Plan which is qualified under section 401(a) of the Code to
maintain such qualification; and (c) make all required contributions to
any Plan subject to section 412 of the Code.

 

7.10         Inspection
of Property and Books and Records.  (a)  Holdings shall, and
shall cause each Subsidiary to, maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of Holdings and such Subsidiary.  Holdings shall permit, and shall cause each Subsidiary to permit,
representatives and independent contractors of the Administrative Agent or any
Lender to visit and inspect any of their respective properties, to examine
their respective corporate, financial, operating and other records, and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and
independent public accountants, all at the expense of Holdings and the Company
and at such reasonable times during normal business hours and as often as may
be reasonably desired, upon reasonable advance notice to Holdings; provided,
however, when an Event of Default exists the Administrative Agent or any
Lender may do any of the foregoing at any time during normal business hours and
without advance notice.

 

(b)           Without limiting the generality of Section 7.10(a),
as frequently as the Majority Lenders may deem appropriate, each of Holdings
and the Company will provide Administrative Agent or its designee access to
Holdings’ and the Company’s records and premises and allow such auditors or
appraisers to conduct audits of Holdings’ and its Subsidiaries’ accounts,
including Accounts and Inventory. 
Holdings shall pay all reasonable fees and expenses of one such audit in
any 12—month period; provided, however, that during the existence
of any Event of Default, Holdings shall pay all reasonable fees and expenses of
each such audit.

 

7.11         Environmental
Laws.  (a)  Holdings shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.

 

(b)           Upon the written request of the
Administrative Agent or any Lender, Holdings shall submit and cause each of its
Subsidiaries to submit, to the Administrative Agent with sufficient copies for
each Lender, at Holdings’ sole cost and expense, at reasonable intervals, a
report providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to Section 7.03(d), that could, individually or
in the aggregate, result in liability in excess of $1,000,000.

 

74

 

7.12         Use of
Proceeds.  Holdings shall, directly
or indirectly, use the proceeds of the Loans (i) for Permitted Acquisitions,
(ii) for making Investments permitted under Section 8.04,
(iii) to refinance existing Indebtedness and (iv) for working capital
and other general corporate purposes not in contravention of any Requirement of
Law or of any Loan Document.

 

7.13         Additional Guarantors.  (a) 
If a Minority Investment or Subsidiary shall at any time after the
Effective Date become a  U.S.
Wholly-Owned Subsidiary, or if Holdings, or any U.S. Wholly-Owned Subsidiary of
Holdings, otherwise shall incorporate, create or acquire any U.S. Wholly-Owned
Subsidiary, Holdings shall cause such U.S. Wholly-Owned Subsidiary to furnish
promptly, but in no event more than thirty (30) days thereafter, each of the
following to the Administrative Agent, in sufficient quantities for each Lender:

 

(i)            a duly executed notice and agreement
in substantially the form of Exhibit G (an “Additional Guarantor
Assumption Agreement”);

 

(ii)           (A) copies of the resolutions of the
board of directors (or equivalent governing body) of such Subsidiary approving
and authorizing the execution, delivery and performance by such Subsidiary of
its Additional Guarantor Assumption Agreement and this Agreement, certified as
of the date of such Additional Guarantor Assumption Agreement (the “Additional
Guarantor Accession Date”) by the Secretary or an Assistant Secretary (or
other appropriate officer) of such Subsidiary; (B) a certificate of the
Secretary or Assistant Secretary (or other appropriate officer) of such
Subsidiary certifying the names and true signatures of the officers of such
Subsidiary authorized to execute and deliver and perform, as applicable, its
Additional Guarantor Assumption Agreement, this Agreement and all other Loan
Documents to be delivered hereunder; (C) copies of the articles or certificate of
incorporation and bylaws (or other applicable Organization Documents) of such
Subsidiary as in effect on the Additional Guarantor Accession Date, certified
by the Secretary or Assistant Secretary (or other appropriate officer) of such
Subsidiary as of the Additional Guarantor Accession Date; and (D) an opinion of
counsel to such Subsidiary and addressed to the Administrative Agent and the
Lenders, substantially in the form of Exhibit H; and

 

(iii)          (A) such amendments to the schedules
to the Security Agreement as shall be required in connection with the accession
of such Subsidiary thereto; (B) executed UCC-1 financing statements furnished
by the Administrative Agent in each jurisdiction in which such filing is
necessary to perfect the security interest of the Administrative Agent on
behalf of the Lenders in the Collateral of such Subsidiary and in which the
Administrative Agent requests that such filing be made, and (C) if requested by
the Administrative Agent, such Mortgages and other documents as may be required
to create and perfect a Lien in the interests of such Subsidiary in any real
property and such title insurance policies and other documents as the
Administrative Agent or the Majority Lenders may reasonably request in
connection therewith.

 

(b)           Additionally, Holdings and such
Subsidiary shall have executed and delivered to the Administrative Agent (in
sufficient quantities for each Lender) such other items as reasonably requested
by the Administrative Agent in connection with the foregoing, including
officers’ certificates, search reports and other certificates and documents.

 

75

 

7.14         Additional
Subsidiaries.  If Holdings,
directly or indirectly, incorporates, creates or acquires any additional Subsidiary,
or if any Minority Investment shall become a Subsidiary, then within ten (10)
days thereafter, Holdings shall (i) (A) pledge the capital stock of such
additional Subsidiary to the Administrative Agent pursuant to the Security
Agreement, if such stock is directly owned by Holdings, or (B) if such stock is
owned by a Wholly-Owned Subsidiary, cause such Wholly-Owned Subsidiary to
pledge the capital stock of such additional Subsidiary to the Administrative
Agent pursuant to the Security Agreement, and (ii) execute and deliver, or
cause such Wholly-Owned Subsidiary to have executed and delivered, to the
Administrative Agent stock transfer powers executed in blank with signatures
guaranteed as the Administrative Agent shall request, such UCC-1 financing statements
(as furnished by the Administrative Agent) in each jurisdiction in which such
filing is necessary to perfect the security interest of the Administrative
Agent in the Collateral with respect to Holdings or such Wholly-Owned
Subsidiary, and (iii) deliver such other items as reasonably requested by
the Administrative Agent in connection with the foregoing, including
resolutions, incumbency and officers’ certificates, opinions of counsel, search
reports and other certificates and documents; provided, however,
that if any such additional Subsidiary is not a U.S. Subsidiary, in no event
shall more than 65% of the voting capital stock (and 100% of the non-voting
stock) of any such Subsidiary be required to be so pledged.

 

7.15         Environmental
Review.  Holdings shall deliver
to the Administrative Agent, promptly upon the granting of any Lien in favor of
the Administrative Agent for the benefit of the Lenders from and after the
Effective Date, with respect to any real property, an environmental site
assessment or other environmental analysis, report or review with respect to
any such real property in form and substance reasonably satisfactory to the
Administrative Agent.  If any such
environmental site assessment or other environmental analysis, report or review
with respect to any Mortgaged Property shall indicate the presence of any
Hazardous Materials on or in the vicinity of such Mortgaged Property or
otherwise shall indicate any environmental problem with respect to such
Mortgaged Property (including any environmental problem which may give rise to
any Environmental Claim) which, in the reasonable determination of the
Administrative Agent, adversely affects the value of such Mortgaged Property or
causes the Administrative Agent to desire to exclude such Mortgaged Property
from the Collateral, then Holdings shall, and shall cause its Subsidiaries to,
enter into and deliver to the Administrative Agent one or more Mortgages in
respect of additional or replacement real property Collateral, in form and
substance reasonably satisfactory to the Administrative Agent, together with
such title insurance policies, insurance endorsements, surveys, appraisals,
consents, estoppels, subordination agreements and other documents and other
instruments as the Administrative Agent shall reasonably request.

 

7.16         Further
Assurances.  (a)  Holdings shall ensure that all written
information, exhibits and reports furnished to the Administrative Agent or the
Lenders do not and will not contain any untrue statement of a material fact and
do not and will not omit to state any material fact or any fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to the Administrative
Agent and the Lenders and correct any defect or error that may be discovered
therein or in any Loan Document or in the execution, acknowledgement or
recordation thereof.

 

76

 

(b)           If at any time, Holdings, the Company
or any other Guarantor shall become the owner of any real property that is
located in the United States, then Holdings and the Company shall (and shall
cause any of the other Guarantors to) promptly, and in any event within sixty
(60) days following acquisition of such real property, enter into and deliver
to the Administrative Agent a Mortgage in respect to such property, in form and
substance reasonably satisfactory to the Administrative Agent, together with
such title insurance policies, insurance endorsements, surveys, appraisals,
consents, estoppels, subordination agreements and other documents and other
instruments as the Administrative Agent or the Majority Lenders shall
reasonably request; provided, however, that Holdings, the Company and the
Guarantors shall only be required to provide title insurance and/or insurance
endorsements in the case of real property with an appraised value in excess of
$500,000.

 

(c)           Promptly upon request by the
Administrative Agent or the Majority Lenders, Holdings shall (and shall cause
any Guarantor to) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and
other instruments the Administrative Agent or such Lenders, as the case may be,
may reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement or any other Loan Document,
(ii) to subject to the Liens created by any of the Collateral Documents
any of the properties, rights or interests covered by any of the Collateral
Documents, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Administrative Agent and Lenders
the rights granted or now or hereafter intended to be granted to the Lenders
under any Loan Document or under any other document executed in connection
therewith.

 

7.17         Appraisals/Title
Insurance.

 

(a)           Holdings and its Subsidiaries shall
deliver, not later than three (3) years after the Effective Date, appraisals,
in form and substance satisfactory to the Administrative Agent and the Majority
Lenders, of each of the Mortgaged Properties.

 

(b)           With respect to each Mortgaged
Property for which an appraisal has been completed in accordance with clause
(a) above, if such Mortgaged Property has an appraised value in excess of
$500,000, Holdings and its Subsidiaries shall deliver to the Administrative
Agent and the Lenders an A.L.T.A. Form B (or other form acceptable to the
Administrative Agent and the Lenders) mortgagee policy of title insurance or a
binder issued by a title insurance company satisfactory to the Administrative
Agent and the Lenders insuring (or undertaking to insure, in the case of a
binder) that the Mortgage on such Mortgaged Property creates and constitutes a
valid first Lien against such Mortgaged Property in favor of the Administrative
Agent, subject only to exceptions acceptable to the Administrative Agent and
the Lenders, with such endorsements and affirmative insurance as the
Administrative Agent or any Lenders may reasonably request.

 

7.18         Intercompany
Notes.  Holdings shall use
commercially reasonable efforts (i) to deliver to the Administrative Agent,
within sixty (60) days after the Effective Date, as Collateral

 

77

 

for the Obligations, promissory notes in form and substance
satisfactory to the Administrative Agent evidencing all extensions of credit by
Holdings to any of its Non-Wholly-Owned Subsidiaries, which extensions of
credit shall be secured by a first priority Lien on all of the tangible and
intangible property of such Non-Wholly-Owned Subsidiary, and which Lien shall
have been assigned to the Administrative Agent as Collateral for the
Obligations and (ii) to ensure that any such promissory notes are demand notes
(including by way of converting any notes that are not demand notes as of the
Effective Date into demand notes by the sixtieth day thereafter).  In the event that Holdings is unable to
comply with either clause of the preceding sentence, Holdings shall not renew
or amend (including to increase the maximum available borrowings under) the
notes with respect to extensions of credit referred to in the preceding
sentence.

 

ARTICLE VIII

 

NEGATIVE
COVENANTS

 

So long as any Lender shall have any Commitment
hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied,
or any Letter of Credit shall remain outstanding, unless the Majority Lenders
waive compliance in writing:

 

8.01         Limitation on Liens.  (a) 
Holdings shall not, and shall not suffer or permit any Subsidiary to,
directly or indirectly, make, create, incur, assume or suffer to exist any Lien
upon or with respect to any part of its property, whether now owned or
hereafter acquired, other than the following (“Permitted Liens”):

 

(i)            any Lien existing on the Effective
Date and set forth in Schedule 8.01 securing Indebtedness outstanding on
such date;

 

(ii)           any Lien created under any Loan
Document;

 

(iii)          Liens for taxes, fees, assessments or
other governmental charges which are not delinquent or remain payable without
penalty, or to the extent that non-payment thereof is permitted by Section
7.07(a), provided that no notice of Lien has been filed or recorded
under the Code;

 

(iv)          carriers’, warehousemen’s, mechanics’,
landlords’, materialmen’s, repairmen’s or other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable without
penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the property subject thereto;

 

(v)           Liens (other than any Lien imposed by
ERISA and other than on the Collateral) consisting of pledges or deposits
required in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation;

 

(vi)          Liens securing (A) the
non-delinquent performance of bids, trade contracts (other than for borrowed
money), leases (other than Capital Leases), statutory obligations,

 

78

 

(B) contingent obligations on surety and appeal bonds, and
(C) other non-delinquent obligations of a like nature; in each case, incurred
in the ordinary course of business, provided all such Liens in the
aggregate would not (even if enforced) cause a Material Adverse Effect;

 

(vii)         Liens (other than Liens on the
Collateral) consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all such Liens in
the aggregate at any time outstanding for Holdings and its Subsidiaries do not
exceed $1,000,000;

 

(viii)        easements, rights-of-way, restrictions
and other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount, and which do not in any
case materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the businesses of Holdings and its
Subsidiaries;

 

(ix)           Liens on specific tangible assets
of  Persons which become Subsidiaries
after the date of this Agreement; provided, however, that
(A) such Liens existed at the time the respective Persons became
Subsidiaries and were not created in anticipation thereof, (B) any such
Lien does not by its terms cover any assets after the time such Person becomes
a Subsidiary which were not covered immediately prior thereto, (C) any
such Lien does not by its terms secure any Indebtedness other than Indebtedness
existing immediately prior to the time such Person becomes a Subsidiary, and
(D) such Indebtedness is permitted by Section 8.05(d);

 

(x)            purchase money Liens on any property
acquired or held by Holdings or its Subsidiaries in the ordinary course of
business, securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such property; provided
that (i) any such Lien attaches to such property concurrently with or
within twenty (20) days after the acquisition thereof, (ii) such Lien
attaches solely to the property so acquired in such transaction, (iii) the
principal amount of the Indebtedness secured thereby does not exceed 100% of
the cost of such property, and (iv) such Indebtedness is permitted under Section
8.05(d);

 

(xi)           Liens securing obligations in respect
of Capital Leases on assets subject to such leases, provided that such
Capital Leases are otherwise permitted hereunder;

 

(xii)          Liens arising solely by virtue of any
statutory or common law provision relating to banker’s liens, rights of set-off
or similar rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution; provided that (A) such
deposit account is not a dedicated cash collateral account and is not subject
to restrictions against access by Holdings in excess of those set forth by
regulations promulgated by the FRB, and (B) such deposit account is not
intended by Holdings or any Subsidiary to provide collateral to the depository
institution;

 

(xiii)         Liens consisting of pledges of cash
collateral or government securities to secure on a mark-to-market basis
Permitted Swap Obligations only, provided that (A) the counterparty
to any Swap Contract relating to such Permitted Swap Obligation is under a
similar requirement to deliver similar collateral from time to time to Holdings
or the Subsidiary party thereto on a mark-to-market basis; and (B) the
aggregate value of such collateral so pledged by

 

79

 

Holdings and the Subsidiaries together in favor of any counterparty
does not at any time exceed $3,000,000;

 

(xiv)        Liens not otherwise permitted hereunder
securing Indebtedness in principal amount not exceeding $5,000,000 in the
aggregate at any time outstanding; provided that (A) no such Lien
shall attach to any Collateral and (B) such Indebtedness is otherwise
permitted hereunder; and

 

(xv)         Liens on the property of direct and
indirect Non-Wholly-Owned Subsidiaries of Holdings in favor of Holdings created
in connection with extensions of credit provided by Holdings to
Non-Wholly-Owned Subsidiaries as permitted pursuant to Section 8.04(d),
which Liens have been assigned to the Administrative Agent for the benefit of
the Lenders pursuant to Section 8.04(d).

 

(b)           Holdings shall not, and shall not
permit any of its Subsidiaries to, enter into or suffer to exist any agreement
(other than this Agreement) prohibiting or conditioning the creation or
assumption of any Lien upon any of its properties, revenues or assets, whether
now owned or hereafter acquired.

 

Notwithstanding the foregoing, no other Liens may
exist at any time on or with respect to the Pledged Collateral.

 

8.02         Disposition of
Assets.  Holdings shall
not, and shall not suffer or permit any Subsidiary to, directly or indirectly,
sell, assign, lease, convey, transfer or otherwise dispose of (whether in one
or a series of transactions) any property (including accounts and notes
receivable, with or without recourse) or enter into any agreement to do any of
the foregoing, except:

 

(a)           dispositions of inventory or
equipment, all in the ordinary course of business;

 

(b)           the sale of equipment to the extent
that such equipment is exchanged for credit against the purchase price of
similar replacement equipment, or the proceeds of such sale are reasonably
promptly applied to the purchase price of such replacement equipment;

 

(c)           dispositions of inventory and
equipment by the Company or any Subsidiary to the Company or any Subsidiary
pursuant to reasonable business requirements and in the ordinary course of
business;

 

(d)           the lease or sublease of real
property by Holdings or any Subsidiary to other Persons in the ordinary course
of business;

 

(e)           the sale of cash equivalents and
other short term money market investments in the ordinary course of business
pursuant to Holdings’ usual and customary cash management policies and
procedures;

 

(f)            dispositions of inventory and
equipment (other than dispositions permitted under subsection (a)) by Holdings
or any Subsidiary to any Person in which Holdings has a Minority Investment, provided
that the aggregate amount of such dispositions in any calendar

 

80

 

year, plus the aggregate amount of Minority Investments under Section
8.04(e) in such year, does not exceed the sublimit of the Annual Limit
specified in Section 8.04(e);

 

(g)           dispositions pursuant to sales and
leaseback transactions permitted under Section 8.14; and

 

(h)           dispositions not otherwise permitted
hereunder which are made for fair market value (as determined in good faith by
Holdings or the Company); provided that (i) at the time of any
disposition, no Event of Default shall exist or shall result from such
disposition, (ii) the aggregate sales price from such disposition shall be
paid in cash, (iii) immediately after giving effect to such disposition,
the Disposition Value of all assets disposed of as permitted by this Section 8.02(h)
(but excluding the Disposition Value of any real property so disposed of,
provided that the proceeds of any such disposition are reinvested within 365
days of such disposition in similar replacement property) during the period of
365 days ending on the date of such proposed sale shall not exceed 15% of
Consolidated Total Assets determined as of the last day of the prior fiscal
year, (iv) no disposition by Holdings of any of its equity interest in the
Company shall be permitted hereunder, and (v) no dispositions of accounts
or notes receivable shall be permitted hereunder unless in connection with the
sale of all or substantially all of a business unit, division or Subsidiary of
Holdings and such sale is otherwise permitted hereunder.

 

8.03         Consolidations
and Mergers.  Holdings
shall not, and shall not suffer or permit any Subsidiary to, merge, consolidate
with or into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except:

 

(a)           any Subsidiary may merge with
Holdings, provided that Holdings shall be the continuing or surviving
Person, or with any one or more Subsidiaries, provided  that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving Person;

 

(b)           as permitted by Section 8.02;

 

(c)           any Subsidiary may sell all or
substantially all of its assets (upon voluntary liquidation or otherwise), to
Holdings or to a Wholly-Owned Subsidiary; and

 

(d)           Holdings or any Subsidiary thereof
may merge with or consolidate into any other Person, provided that
(i) (in the case of Holdings) Holdings shall be the continuing or
surviving Person, (ii) such merger or consolidation is in connection with
a Permitted Acquisition, and (iii) no such merger or consolidation shall
be made while there exists a Default or if a Default would occur as a result
thereof.

 

8.04         Loans and Investments.  Holdings shall not purchase or acquire, or
suffer or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan, extension of credit
or capital contribution to or any other investment in, any Person including any
Affiliate of Holdings (together, “Investments”) except for:

 

81

 

(a)           Investments held by Holdings or
Subsidiary in the form of cash equivalents and short term money market
investments in the ordinary course of business pursuant to Holdings’ usual and
customary cash management policies and procedures;

 

(b)           extensions of credit in the nature of
accounts receivable or notes receivable arising from the sale or lease of goods
or services in the ordinary course of business;

 

(c)           Investments in the equity securities
of Subsidiaries, provided that such equity securities are pledged to the
Administrative Agent and the Lenders as Collateral for the Obligations;

 

(d)           Extension of credit by Holdings to
any of its Subsidiaries in the ordinary course of business; provided that with
respect to extensions of credit by Holdings to any of its Non-Wholly-Owned Subsidiaries
(i) such extensions of credit are evidenced by one or more demand promissory
notes in form and substance satisfactory to the Administrative Agent, the
originals of which have been delivered to the Administrative Agent as
Collateral for the Obligations, and (ii) such extensions of credit are secured
by a first priority Lien on all of the tangible and intangible property of such
Non-Wholly-Owned Subsidiary, which Lien has been assigned to the Administrative
Agent as Collateral for the Obligations;

 

(e)           Investments constituting Minority
Investments and Investments incurred in order to consummate Permitted
Acquisitions, provided that (i) all such Investments in the
aggregate, plus the aggregate amount of dispositions under Section
8.02(f), shall not exceed $60,000,000 in any calendar year (the “Annual
Limit”), (ii) all such Investments constituting Minority Investments, plus
the aggregate amount of dispositions under Section 8.02(f), do not
exceed a sublimit of $25,000,000 in any calendar year exclusive of any Put
Obligations, provided, however, that to the extent any Put
Obligations are exercised, the amount so exercised shall be included in the
Annual Limit for the year in which such Put Obligation was exercised,
(iii) no such Investment shall be made if the Subsidiary or the Person in
which Holdings has a Minority Investment, as the case may be, that is the
subject of such Investment shall not be a U.S. Subsidiary or is located outside
the United States, and (iv) on and after the effectiveness of any Investment,
Holdings shall not be in violation of any of the financial covenants contained
in Section 8.19 hereof;

 

(f)            Investments constituting Permitted
Swap Obligations or payments or advances under Swap Contracts relating to
Permitted Swap Obligations;

 

(g)           Officer, shareholder, director and
employee loans and guarantees in accordance with Holdings’ and its
Subsidiaries’ usual and customary practices with respect thereto in aggregate
amount not exceeding $1,000,000 at any time; and

 

(h)           Investments by Holdings in BMC
Insurance, Inc. in an amount not to exceed the amount needed to satisfy
actuarial requirements as determined by the Insurance Commissioner of the State
of Hawaii and in any event which do not exceed $5,000,000 in the aggregate
after the Effective Date (and in addition to any premiums paid in accordance
with Section 8.06).

 

82

 

8.05         Limitation
on Indebtedness.  Holdings shall
not, and shall not suffer or permit any Subsidiary to, create, incur, assume,
suffer to exist, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except:

 

(a)           Indebtedness incurred pursuant to
this Agreement;

 

(b)           Indebtedness consisting of Contingent
Obligations permitted pursuant to Section 8.08;

 

(c)           Indebtedness existing on the
Effective Date and set forth in Schedule 8.05;

 

(d)           Indebtedness secured by Liens
permitted by clauses (ix), (x) and (xiv) of Section 8.01(a) in an
aggregate amount outstanding not to exceed $25,000,000;

 

(e)           Indebtedness of Holdings or
Wholly-Owned Subsidiaries of Holdings to Holdings or other Wholly-Owned
Subsidiaries of Holdings;

 

(f)            Indebtedness of the Non-Wholly Owned
Subsidiaries of Holdings to Holdings to the extent permitted pursuant to Section
8.04(d) or Indebtedness of Holdings to the Non-Wholly-Owned Subsidiaries of
Holdings;

 

(g)           Indebtedness incurred pursuant to
sales and leaseback transactions permitted under Section 8.14;

 

(h)           Indebtedness of BMC Insurance, Inc.
to Holdings or any Subsidiary of Holdings;

 

(i)            additional unsecured Indebtedness
incurred after the Effective Date in an aggregate amount not to exceed
$25,000,000, provided that (i) no such Indebtedness shall be
incurred while there exists a Default or if a Default would occur as a result
thereof, and (ii) without limiting the generality of the foregoing, as of
the end of the most recent quarter for which Holdings has delivered financial
statements under Section 7.01(a) or Section 7.01(b) and
immediately after giving effect to such incurrence, Holdings shall be in full
compliance with Section 8.19(a), Section 8.19(b) and Section
8.19(c); and

 

(j)            additional Indebtedness which by its
terms is expressly subordinated to the Obligations, provided that
(i) the terms of such subordination shall be satisfactory to the Majority
Lenders, (ii) the terms of such Indebtedness and the indenture or other
agreement evidencing such Indebtedness otherwise shall be satisfactory in all
material respects to the Majority Lenders (including terms and conditions
relating to the interest rate, fees, amortization, maturity, covenants, events
of default and remedies), (iii) no such Indebtedness shall be incurred
while there exists a Default or if a Default would occur as a result thereof,
and (iv) without limiting the generality of the foregoing, as of the end
of the most recent quarter for which Holdings has delivered financial
statements under Section 7.01(a) or Section 7.01(b) and
immediately after giving effect to such incurrence, Holdings shall be in full
compliance with Section 8.19(a) and, if then applicable, Section
8.19(b) and Section 8.19(c) (any such Indebtedness issued in
compliance with this Section 8.05(j) hereinafter “Permitted
Subordinated Debt”).

 

83

 

Notwithstanding anything to the contrary in this Section 8.05,
the Indebtedness of all Subsidiaries that are not Guarantors which is otherwise
permitted under this Section 8.05 shall not exceed $5,000,000 in the
aggregate at any time outstanding.

 

8.06         Transactions
with Affiliates.  Holdings shall
not, and shall not suffer or permit any Subsidiary to, enter into any
transaction with any Affiliate of Holdings, except upon fair and reasonable
terms no less favorable to Holdings or such Subsidiary than would obtain in a
comparable arm’s-length transaction with a Person not an Affiliate of Holdings
or such Subsidiary.

 

8.07         Use of Proceeds.  Holdings shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds or any Letter of
Credit, directly or indirectly, (i) to purchase or carry Margin Stock,
(ii) to repay or otherwise refinance indebtedness of Holdings or others
incurred to purchase or carry Margin Stock, or (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock.

 

8.08         Contingent
Obligations.  Holdings
shall not, and shall not suffer or permit any Subsidiary to, create, incur,
assume or suffer to exist any Contingent Obligations, except:

 

(a)           endorsements for collection or
deposit in the ordinary course of business;

 

(b)           Permitted Swap Obligations;

 

(c)           Contingent Obligations of Holdings in
respect of Indebtedness of any of its Wholly-Owned Subsidiaries, or Contingent
Obligations of any of its Wholly-Owned Subsidiaries in respect of Indebtedness of
another of its Wholly-Owned Subsidiaries or of Holdings, in each case to the
extent such Indebtedness is permitted hereunder;

 

(d)           Contingent Obligations of Holdings
and its Subsidiaries existing as of the Effective Date and listed in Schedule
8.08;

 

(e)           Contingent Obligations with respect
to Surety Instruments incurred in the ordinary course of business and not
exceeding at any time $5,000,000 in the aggregate in respect of Holdings and
its Subsidiaries together;

 

(f)            Contingent Obligations of Holdings with
respect to Stock Price Guaranties incurred in the ordinary course of business
and not exceeding at any time $5,000,000 in the aggregate; and

 

(g)           Contingent Obligations of Holdings
and its Subsidiaries in connection with any Put Obligations to the extent
otherwise permitted under this Agreement.

 

Notwithstanding anything to the contrary in this Section 8.08,
the Contingent Obligations of all Subsidiaries that are not Guarantors which
are otherwise permitted under this Section 8.08 shall not exceed
$5,000,000 in the aggregate at any time outstanding.

 

8.09         Subsidiaries.  Holdings shall not, and shall not suffer or
permit any Subsidiary to, incorporate, create or acquire any Subsidiary which
is not a U.S. Subsidiary.

 

84

 

8.10         Lease
Obligations.  Holdings shall
not, and shall not suffer or permit any Subsidiary to, create or suffer to
exist any obligations for the payment of rent for any property under any
Operating Lease, which exceed an aggregate amount of $20,000,000 for all
Operating Leases in any fiscal year.

 

8.11         Restricted
Payments.  Holdings shall not,
and shall not suffer or permit any Subsidiary to, declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any shares of any class of its capital stock (other
than dividends or other distributions by a Subsidiary to Holdings), or
purchase, redeem or otherwise acquire for value any shares of its capital stock
or any warrants, rights or options to acquire such shares, now or hereafter
outstanding; except that Holdings may:

 

(a)           declare and make dividend payments or
other distributions payable solely in its common stock;

 

(b)           declare and make dividend payments or
other distributions payable in cash so long as no Default has occurred and is
continuing on the date of, or will result after giving effect to, any such
payment, assuming the financial covenants set forth in Section 8.19 are
applied on a pro forma basis as of the date of any such distribution;

 

(c)           declare dividends required to be
declared or paid pursuant to the terms of any securities issued in a Permitted
Equity Offering so long as the dividend provisions of such securities were
approved by the Majority Lenders in writing prior to the issuance of such
securities;

 

(d)           purchase, redeem or otherwise acquire
shares of its common stock or warrants or options to acquire any such shares
with the proceeds received from the substantially concurrent issue of new
shares of its common stock;

 

(e)           allow any Non-Wholly-Owned Subsidiary
to make distributions to its owners (on a pro rata basis); and

 

(f)            purchase shares of Holdings’ common
stock either (1) for deposit into the 401(k) trust fund on behalf of Holdings’
employees by using funds obtained through employee payroll deductions of such
employees, or (2) to the extent necessary to provide discounts to employees in
connection with Holdings’ Employee Stock Purchase Plan.

 

8.12         ERISA.  Holdings shall not, and shall not suffer or
permit any of its ERISA Affiliates to: 
(a) engage in a prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan which has resulted or
could reasonably expected to result in liability of Holdings in an aggregate
amount in excess of $500,000; or (b) engage in a transaction that could be
subject to section 4069 or 4212(c) of ERISA.

 

8.13         Capital
Expenditures.  Holdings shall
not, and shall not permit any of its Subsidiaries to, make any Capital
Expenditures in excess of, on a consolidated basis, in any fiscal year, the sum
of (a) the Capital Expenditure Annual Limit plus (b) so long
as no Event of Default has occurred and is continuing, the Permitted Capital
Expenditure Carry-Forward for all

 

85

 

prior fiscal years (beginning with fiscal year 2003) to the extent that
any such Permitted Capital Expenditure Carry-Forward has not been previously
used.

 

8.14         Sales and
Leasebacks.  Holdings shall not,
and shall not permit any of its Subsidiaries to, become liable, directly or
indirectly, with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Holdings or such Subsidiary has sold or
transferred or is to sell or transfer to any other Person or (ii) which
Holdings or such Subsidiary intends to use for substantially the same purposes
as any other property which has been or is to be sold or transferred by Holdings
or such Subsidiary to any other Person in connection with such lease; provided
that Holdings and any of its Subsidiaries may enter into any such lease if (A)
no Default shall then exist or would occur as a result thereof, (B) as of the
end of the most recent quarter for which Holdings has delivered financial
statements under Section 7.01(a) or Section 7.01(b) and
immediately after giving effect to any such lease, Holdings shall be in full
compliance with Section 8.19(a), Section 8.19(b) and Section
8.19(c) and (C) the aggregate amount of Indebtedness incurred in connection
with all such leases shall not exceed $25,000,000 at any time outstanding.

 

8.15         Certain
Payments.  Holdings shall not,
and shall not permit any of its Subsidiaries to, (i) prepay, redeem, repurchase
or otherwise acquire for value any of the Permitted Subordinated Debt; or
(ii) make any principal, interest or other payments on any Permitted
Subordinated Debt if not permitted by the respective subordination provisions
of the Subordinated Debt Documents.

 

8.16         Modification
of Subordinated Debt Documents. 
Holdings shall not, and shall not permit any of its Subsidiaries to,
agree to or permit any amendment, modification or waiver of any provision of
any Subordinated Debt Document (including any amendment, modification or waiver
pursuant to an exchange of other securities or instruments for outstanding
Permitted Subordinated Debt) if the effect of such amendment, modification or
waiver is to (i) increase the interest rate on such Permitted Subordinated
Debt or change (to earlier dates) the dates upon which principal and interest
are due thereon; (ii) alter the redemption, prepayment or subordination
provisions thereof; (iii) alter the covenants and events of default in a
manner which would make such provisions more onerous or restrictive to Holdings
or such Subsidiary; or (iv) otherwise increase the obligations of Holdings
or such Subsidiary in respect of such Permitted Subordinated Debt or confer
additional rights upon the holders thereof which individually or in the
aggregate would be adverse to Holdings, its Subsidiaries or the Lenders.

 

8.17         Change in
Business.  Holdings shall not,
and shall not suffer or permit any Subsidiary to, engage in any material line
of business substantially different from those lines of business carried on by
Holdings and its Subsidiaries on the date hereof and lines of business
ancillary thereto.

 

8.18         Accounting
Changes.  Holdings shall not,
and shall not suffer or permit any Subsidiary to, make any significant change
in accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of Holdings or of any Subsidiary, except to change the
fiscal year of a Subsidiary to conform its fiscal year to that of Holdings.

 

86

 

8.19         Financial
Covenants.  (a)  Holdings shall not permit its Consolidated
Net Worth as of the last day of any fiscal quarter to be less than (a) 85% of
its Consolidated Net Worth on and as of the Effective Date, plus (b) 50%
of Consolidated Net Income for each fiscal quarter (without giving effect to
any net loss for any such period) ending after the Effective Date, plus
(c) 50% of all Net Issuance Proceeds completed in any fiscal quarter from and
after the Effective Date.

 

(b)           Holdings shall not permit as at the
end of any fiscal quarter, measured on a consolidated basis for Holdings and
its Subsidiaries for the period of four fiscal quarters ended on such date in
accordance with GAAP, the ratio of (i) EBITA to (ii) the sum of (A)
cash Interest Expense, plus (B) cash taxes, plus (C) scheduled
principal payments in respect of Indebtedness from and after July 1, 2003, plus
(D) cash dividend payments made (the “EBITA Ratio”) to be less than
the following amounts for the respective periods set forth below:

 

	
  Period

  	
   

  	
  EBITA Ratio

  
	
  Effective
  Date through and including September 30, 2004

  	
   

  	
  1.20:1.00

  
	
  October
  1, 2004 through and including September 30, 2005

  	
   

  	
  1.25:1.00

  
	
  October
  1, 2005 through and including September 30, 2006

  	
   

  	
  1.35:1.00

  
	
  October
  1, 2006 through and including September 30, 2007

  	
   

  	
  1.40:1.00

  
	
  October
  1, 2007 through and including the later of the Revolving Loan Maturity Date
  and the Term B Loan Maturity Date

  	
   

  	
  1.45:1.00

  

 

(c)           Holdings shall not permit the EBITDA
Ratio at any time to be greater than the following amounts for the respective
periods set forth below:

 

87

 

	
  Period

  	
   

  	
  EBITA Ratio

  
	
  Effective
  Date through and including September 30, 2005

  	
   

  	
  3.50:1.00

  
	
  October
  1, 2005 through and including September 30, 2007

  	
   

  	
  3.25:1.00

  
	
  October
  1, 2007 through and including the later of the Revolving Loan Maturity Date
  and the Term B Loan Maturity Date

  	
   

  	
  3.00:1.00

  

 

8.20         No Restrictions on Subsidiary
Dividends.  Holdings shall not,
and shall not suffer or permit any Subsidiary to, enter into or be bound by any
Contractual Obligation which restricts, limits or prohibits the payment of
dividends by any Subsidiary or the making of any other distribution in respect
of such Subsidiary’s capital stock.

 

ARTICLE IX

 

EVENTS
OF DEFAULT

 

9.01         Event of
Default.  Any of the following
shall constitute an “Event of Default”:

 

(a)           Non-Payment.  Holdings fails to make, (i) when and as
required to be made herein, payments of any amount of principal of any Loan or
of any L/C Obligation, (ii) when and as required to be paid under any
Specified Swap Contract, any payment or transfer under such Specified Swap
Contract, or (iii) within three (3) Business Days after the same becomes
due, payment of any interest, fee or any other amount payable hereunder or
under any other Loan Document (other than a Specified Swap Contract); or

 

(b)           Representation or Warranty.  Any representation or warranty by any Loan
Party made or deemed made herein, in any other Loan Document (other than a Specified
Swap Contract), or which is contained in any certificate, document or financial
or other statement by any Loan Party, or any Responsible Officer, furnished at
any time under this Agreement, or in or under any other Loan Document (other
than a Specified Swap Contract), is incorrect in any material respect on or as
of the date made or deemed made; or

 

(c)           Specific Defaults.  Holdings or the Company fails to perform or
observe any term, covenant or agreement contained in any of Section
7.04(a)(i), or Section 7.12 or in Article VIII; or

 

(d)           Other Defaults.  Any Loan Party fails to perform or observe
any other term or covenant contained in this Agreement or any other Loan
Document (other than a Specified Swap Contract), and such default shall
continue unremedied for a period of twenty (20) days after the earlier of
(i) the date upon which a Responsible Officer of Holdings or the Company
obtained

 

88

 

actual knowledge of such failure and (ii) the date upon which
written notice thereof is given to Holdings by the Administrative Agent or any
Lender; or

 

(e)           Cross-Default.  (i) Holdings or any Subsidiary
(A) fails to make any payment in respect of any Indebtedness or Contingent
Obligation (other than in respect of Swap Contracts), having an aggregate
principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $5,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure; or
(B) fails to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or instrument
relating to any such Indebtedness or Contingent Obligation, and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or Administrative Agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be due and payable
prior to its stated maturity, or such Contingent Obligation to become payable
or cash collateral in respect thereof to be demanded; or (ii) there occurs
under any Swap Contract an Early Termination Date (as defined in such Swap
Contract) resulting from (1) any event of default under such Swap Contract
as to which Holdings or any Subsidiary is the Defaulting Party (as defined in
such Swap Contract) or (2) any Termination Event (as so defined) as to
which Holdings or any Subsidiary is an Affected Party (as so defined), and, in
either event, the Swap Termination Value owed by Holdings or such Subsidiary as
a result thereof is greater than $5,000,000; or

 

(f)            Insolvency; Voluntary Proceedings.  Holdings or any Subsidiary (i) ceases
or fails to be solvent, or generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or

 

(g)           Involuntary Proceedings.  (i) Any involuntary Insolvency
Proceeding is commenced or filed against Holdings or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of Holdings’ or any Subsidiary’s
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not
be released, vacated or fully bonded within sixty (60) days after commencement,
filing or levy; (ii) Holdings or any Subsidiary admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) Holdings or any Subsidiary acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or Administrative Agent therefor), or other similar
Person for itself or a substantial portion of its property or business; or

 

89

 

(h)           ERISA.  (i) An ERISA Event shall occur with
respect to a Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of Holdings under Title IV of
ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of $500,000; the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds $500,000; or
(iii) Holdings or any ERISA Affiliate shall fail to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $500,000; or

 

(i)            Monetary Judgments.  One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against
Holdings or any Subsidiary involving in the aggregate a liability (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage) as to any single or related or unrelated series of
transactions, incidents or conditions, of $5,000,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof; or

 

(j)            Non-Monetary Judgments.  Any non-monetary judgment, order or decree
is entered against Holdings or any Subsidiary which does or would reasonably be
expected to have a Material Adverse Effect, and there shall be any period of
thirty (30) consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

 

(k)           Change of Control.  There occurs any Change of Control; or

 

(l)            Guarantor Defaults.  Any Guarantor fails in any material respect
to perform or observe any term, covenant or agreement in its Guaranty; or any
Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or such Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at subsections (f)
or (g) of this Section 9.01 occurs with respect to the Guarantor; or

 

(m)          Invalidity of Subordination
Provisions.  The subordination
provisions applicable to the Permitted Subordinated Debt shall be for any
reason revoked or invalidated, or otherwise cease to be in full force and
effect, or the holders thereof or any other Person shall contest in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder, or the Indebtedness hereunder is for any
reason subordinated or does not have the priority contemplated by this
Agreement or such subordination provisions.

 

(n)           Collateral.  (i) Any provision of any Collateral Document
shall for any reason cease to be valid and binding on or enforceable against
Holdings or any Subsidiary party thereto or Holdings or any Subsidiary shall so
state in writing or bring an action to limit its obligations or liabilities
thereunder; or (ii) any Collateral Document shall for any reason (other
than pursuant to the terms thereof) cease to create a valid security interest
in the Collateral purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first priority security interest
subject only to Permitted Liens.

 

90

 

9.02         Remedies.  At any time after the occurrence and during
the continuance of any Event of Default (other than an Event of Default
referred to in Section 9.01(f) or Section  9.01(g)):

 

(a)           the Administrative Agent may or
shall, upon instructions from the Majority Revolving Lenders, by written notice
to Holdings (i) terminate the Revolving Commitments, any obligation of the
L/C Issuer to make L/C Credit Extensions and the obligations of the Revolving
Lenders to make Loans, (ii) require that Holdings Cash Collateralize the
L/C Obligations in an amount equal to the then Effective Amount of the L/C
Obligations; and/or (iii) declare all or a portion of the outstanding
Obligations owed to the Revolving Lenders and payable by Holdings to be
immediately due and payable without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the Notes to the contrary notwithstanding; and

 

(b)           the Administrative Agent may or
shall, upon instructions from the Majority Term B Lenders, declare all or a
portion of the outstanding Obligations owed to the Term Lenders and payable by
Holdings to be immediately due and payable without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the Notes to the contrary notwithstanding.

 

Upon the occurrence or existence of any Event of
Default described in Section 9.01(f) or 9.01(g), immediately and
without notice, (1) the Revolving Commitments, any obligation of the L/C
Issuer to make L/C Credit Extensions and the obligations of the Lenders to make
Loans shall automatically terminate, (2) the obligation of Holdings to
Cash Collateralize the L/C Obligations in an amount equal to the then Effective
Amount of the L/C Obligations shall automatically become effective and
(3) all outstanding Obligations payable by Holdings hereunder shall
automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the Notes to the contrary
notwithstanding.  In addition to the
foregoing remedies, upon the occurrence or existence of any Event of Default,
the Administrative Agent may exercise any other right, power or remedy
available to it under any of the Loan Documents or otherwise by law, either by
suit in equity or by action at law, or both.

 

9.03         Specified
Swap Contract Remedies. 
Notwithstanding any other provision of this Article IX, each
Swap Provider shall have the right, with prior notice to the Administrative
Agent, but without the approval or consent of the Administrative Agent or the
other Lenders, with respect to any Specified Swap Contract of such Swap
Provider, (a) to declare an event of default, termination event or other
similar event thereunder and to create an Early Termination Date (as defined in
such Specified Swap Contract), (b) to determine net termination amounts in
accordance with the terms of such Specified Swap Contracts and to set-off
amounts between such Specified Swap Contracts, and (c) to prosecute any
legal action against Holdings to enforce net amounts owing to such Swap
Provider.

 

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ARTICLE X

 

THE
ADMINISTRATIVE AGENT

 

10.01       Appointment and
Authorization; “Administrative Agent”.  (a)  Each Lender hereby
irrevocably (subject to Section 10.09) appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. 
Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Without limiting
the generality of the foregoing sentence, the use of the term “Administrative
Agent” in this Agreement with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship
between independent contracting parties.

 

(b)           The L/C Issuer shall act on behalf of
the Lenders with respect to any Letters of Credit Issued by it and the
documents associated therewith until such time and except for so long as the
Administrative Agent may agree at the request of the Majority Lenders to act
for the L/C Issuer with respect thereto; provided, however, that
the L/C Issuer shall have all of the benefits and immunities (i) provided
to the Administrative Agent in this Article X with respect to any
acts taken or omissions suffered by the L/C Issuer in connection with Letters
of Credit Issued by it or proposed to be Issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully
as if the term “Administrative Agent,” as used in this Article X,
included the L/C Issuer with respect to such acts or omissions, and
(ii) as additionally provided in this Agreement with respect to the L/C
Issuer.

 

10.02       Delegation of Duties.  The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through
Administrative Agents, employees or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any Administrative Agent or
attorney-in-fact that it selects with reasonable care.

 

10.03       Liability of Administrative
Agent.  None of the Administrative
Agent-Related Persons shall (i) be liable for any action taken or omitted
to be taken by any of them under or in connection with this Agreement or any
other Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Lenders for any recital, statement, representation or
warranty made by Holdings or any Subsidiary or Affiliate of Holdings, or any
officer thereof, contained in this Agreement or in any other Loan Document, or
in any certificate, report, statement or other

 

92

 

document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or for the value of or title to any Collateral, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Loan Party or any other
party to any Loan Document to perform its obligations hereunder or
thereunder.  No Administrative
Agent-Related Person shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of Holdings or any of its
Subsidiaries or Affiliates.

 

10.04       Reliance
by Administrative Agent. 
(a)  The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to any Loan Party), independent accountants
and other experts selected by the Administrative Agent. The Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Lenders as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Majority Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.

 

(b)           For purposes of determining
compliance with the conditions specified in Section 5.01, each Lender
that has executed this Agreement shall be deemed to have consented to, approved
or accepted or to be satisfied with, each document or other matter either sent
(or made available) by the Administrative Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to such Lender.

 

10.05       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, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice
from a Lender or any Loan Party referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of default.”  The Administrative Agent will notify the
Lenders of its receipt of any such notice. 
The Administrative Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Majority Lenders in
accordance with Article IX; provided, however, that unless
and until the Administrative Agent has received any such request, 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 or in the best interest of the Lenders.

 

93

 

10.06       Credit Decision.  Each Lender acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by the Administrative Agent hereinafter taken, including
any review of the affairs of Holdings and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person to any Lender.  Each Lender
represents to the Administrative Agent that it has, independently and without
reliance upon any Administrative Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of Holdings and its
Subsidiaries, the value of and title to any Collateral, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to any Loan
Party hereunder.  Each Lender also
represents that it will, independently and without reliance upon any
Administrative Agent-Related Person and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of any Loan
Party.  Except for notices, reports and
other documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Holdings or any Subsidiary which may come into
the possession of any of the Administrative Agent-Related Persons.

 

10.07       Indemnification
of Administrative Agent. 
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand the Administrative Agent-Related Persons
(to the extent not reimbursed by or on behalf of the Company or Holdings and
without limiting the obligation of the Company and Holdings to do so), in accordance
with the Lenders’ Proportionate Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Lender shall
be liable for the payment to the Administrative Agent-Related Persons of any
portion of such Indemnified Liabilities to the extent they are found by a final
decision of a court of competent jurisdiction to have resulted solely from such
Person’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender shall reimburse
the Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of Holdings and the
Company.  The undertaking in this Section
10.07 shall survive the termination of the Commitments, the termination or
expiration of all Letters of Credit, the payment of all other Obligations
hereunder and the resignation or replacement of the Administrative Agent.

 

10.08       Administrative
Agent in Individual Capacity. 
Wells Fargo and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting

 

94

 

or other business with Holdings and its Subsidiaries and Affiliates as
though Wells Fargo were not the Administrative Agent or the L/C Issuer
hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to
such activities, Wells Fargo or its Affiliates may receive information
regarding Holdings or its Subsidiaries or Affiliates (including information
that may be subject to confidentiality obligations in favor of Holdings or such
Subsidiary or Affiliate) and acknowledge that the Administrative Agent shall be
under no obligation to provide such information to them.  With respect to its Loans, Wells Fargo shall
have the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not the Administrative Agent or the L/C
Issuer.

 

10.09       Successor
Administrative Agent. 
The Administrative Agent may, and at the request of the Majority Lenders
shall, resign as Administrative Agent upon thirty (30) days’ notice to the
Lenders.  If the Administrative Agent
resigns under this Agreement, the Majority Lenders shall appoint from among the
Lenders a successor Administrative Agent for the Lenders.  If no successor Administrative Agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and Holdings, a successor Administrative Agent from among the Lenders.  Upon the acceptance of its appointment as
successor Administrative Agent hereunder, such successor Administrative Agent
shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term “Administrative Agent” shall mean such
successor Administrative Agent and the retiring Administrative Agent’s appointment,
powers and duties as Administrative Agent shall be terminated. After any
retiring Administrative Agent’s resignation hereunder as Administrative Agent,
the provisions of this Article X and Section 11.04 and Section
11.05 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.  If no successor Administrative Agent has
accepted appointment as Administrative Agent by the date which is thirty (30)
days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Majority Lenders appoint a
successor Administrative Agent as provided for above.  Notwithstanding the foregoing, however, Wells Fargo may not be
removed as the Administrative Agent at the request of the Majority Lenders
unless Wells Fargo shall also simultaneously be replaced as “L/C Issuer” and
“Swingline Lender” hereunder pursuant to documentation in form and substance
reasonably satisfactory to Wells Fargo.

 

10.10       Withholding Tax.  (a) 
If any Lender is a “foreign corporation, partnership or trust” within
the meaning of the Code and such Lender claims exemption from, or a reduction
of, U.S. withholding tax under sections 1441 or 1442 of the Code, such Lender
agrees with and in favor of the Administrative Agent, to deliver to the
Administrative Agent:

 

(i)            if such Lender claims an exemption
from, or a reduction of, withholding tax under a United States tax treaty, two
properly completed and executed copies of IRS Form W-8BEN before the payment of
any interest or fees in the first calendar year and before the payment of any
interest or fees in each third succeeding calendar year during which interest
or fees may be paid under this Agreement;

 

95

 

(ii)           if such Lender claims that interest
or fees paid under this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade or business of
such Lender, two properly completed and executed copies of IRS Form W-8ECI
before the payment of any interest or fees is due in the first taxable year of
such Lender and in each succeeding taxable year of such Lender during which
interest or fees may be paid under this Agreement; and

 

(iii)          such other form or forms as may be
required under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.

 

Such Lender agrees to promptly notify the
Administrative Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.

 

(b)           If any Lender claims exemption from,
or reduction of, withholding tax under a United States tax treaty by providing
IRS Form W-8BEN and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of Holdings owing to such
Lender, such Lender agrees to notify the Administrative Agent of the percentage
amount in which it is no longer the beneficial owner of Obligations of Holdings
owing to such Lender.  To the extent of
such percentage amount, the Administrative Agent will treat such Lender’s IRS
Form W-8BEN as no longer valid.

 

(c)           If any Lender claiming exemption from
United States withholding tax by filing IRS Form W-8ECI with the Administrative
Agent sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of Holdings owing to such Lender, such Lender agrees to
undertake sole responsibility for complying with the withholding tax
requirements imposed by sections 1441 and 1442 of the Code.

 

(d)           If any Lender is entitled to a
reduction in the applicable withholding tax, the Administrative Agent may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction.  However, if the forms or other documentation
required by subsection (a) of this section are not delivered to the
Administrative Agent, then the Administrative Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax imposed by sections 1441
and 1442 of the Code, without reduction.

 

(e)           If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered or
was not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Lender shall indemnify the Administrative Agent fully for all amounts
paid, directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent under this
section, together with all costs and expenses (including reasonable Attorney
Costs).  The obligation of the Lenders

 

96

 

under this subsection shall survive the termination of the Commitments,
the termination or expiration of all Letters of Credit, the payment of all
other Obligations hereunder and the resignation or replacement of the
Administrative Agent.

 

(f)            (i) Each Lender party to this
Agreement as of the Effective Date represents and warrants to the
Administrative Agent and Holdings as of the Effective Date and (ii) each
Additional Lender party to this Agreement as of the Subsequent Effective Date
represents and warrants to the Administrative Agent and Holdings as of the
Subsequent Effective Date, that under applicable law and treaties no tax is
required to be withheld by Holdings or the Administrative Agent with respect to
any payments to be made to such Lender hereunder.

 

10.11       Collateral
Matters.

 

(a)           The Administrative Agent is
authorized on behalf of all the Lenders, without the necessity of any notice to
or further consent from the Lender, from time to time to take any action with
respect to any Collateral or the Collateral Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Collateral Documents.

 

(b)           The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any Collateral
(i) upon termination of the Commitments and payment in full of all Loans
and all other Obligations known to the Administrative Agent and payable under
this Agreement or any other Loan Document; (ii) constituting property sold
or to be sold or disposed of as part of or in connection with any disposition
permitted hereunder; (iii) constituting property in which Holdings or any
Subsidiary owned no interest at the time the Lien was granted or at any time
thereafter; (iv) constituting property leased to Holdings or any Subsidiary in
a transaction permitted under this Agreement; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; (vi) constituting real property to be
excluded from the Collateral pursuant to matters arising under Section 7.15;
or (vii) if approved, authorized or ratified in writing by the Majority
Lenders or all the Lenders, as the case may be, as provided in Section
11.01(k).  Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent’s authority to release particular types or items of
Collateral pursuant to this Section 10.11(b), provided that
the absence of any such confirmation for whatever reason shall not affect the
Administrative Agent’s rights under this Section 10.11.

 

(c)           Each Lender agrees with and in favor
of each other (which agreement shall not be for the benefit of Holdings or any
Subsidiary) that the Obligations to such Lender under this Agreement and the
other Loan Documents shall not be secured by any real property collateral now
or hereafter acquired by such Lender other than the Mortgaged Properties
described in the Mortgages.

 

10.12       Syndication
Agent, Documentation Agent, Co-Lead Arranger.  None of the Lenders identified on the facing
page or signature pages of this Agreement as a “Syndication Agent”,
“Documentation Agent” or “Co-Lead Arranger” shall have any right, power,
obligation, liability, responsibility or duty under this Agreement in such
capacity.  Without limiting the

 

97

 

foregoing, none of the Lenders so identified as a “Syndication Agent”,
“Documentation Agent” or “Co-Lead Arranger” shall have or be deemed to have any
fiduciary relationship with any Lenders. 
Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.01       Amendments
and Waivers.  Any term,
covenant, agreement or condition of this Agreement or any other Loan Document
may be amended or waived, and any consent under this Agreement or any other
Loan Document may be given, if such amendment, waiver or consent is in writing
and is signed by Holdings and the Majority Lenders (or the Administrative Agent
on behalf of the Majority Lenders with the written approval of the Majority
Lenders); provided, however, that:

 

(a)           Any amendment, waiver or consent
which would (i) amend the definition of “Majority Class Lenders”, “Majority
Lenders”, “Majority Revolving Lenders” or “Majority Term Lenders”, or modify in
any other manner the number or percentage of the Lenders required to make any
determinations or to waive any rights under, or to modify any provision of,
this Agreement, (ii) amend this Section 11.01 or Section 2.15, or
(iii) release any Guarantor, must be in writing and signed or approved in
writing by all of the Lenders;

 

(b)           Any amendment, waiver or consent
which would (i) increase the Aggregate Revolving Commitment, (ii) extend the
Revolving Loan Maturity Date, (iii) reduce the principal of, or interest rate
applicable to, any Revolving Loan or L/C Borrowing or any fees or other amounts
payable for the account of the Revolving Lenders hereunder, or (iii) extend any
date fixed for any payment of the principal of, or interest rate applicable to,
any Revolving Loans or any fees or other amounts payable for the account of the
Revolving Lenders must be in writing and signed or approved in writing by all
Revolving Lenders;

 

(c)           Any amendment, waiver or consent
which would (i) increase the Aggregate Term B Commitment, (ii) extend the Term
B Loan Maturity Date, (iii) reduce the principal of or interest rate applicable
to any Term B Loan or (iv) extend any date fixed for any payment of the
principal of or interest rate applicable to any Term B Loans, must be in
writing and signed or approved in writing by all Term B Lenders;

 

(d)           Any amendment, waiver or consent
which would (i) accelerate the Term B Loan Maturity Date, (ii) increase the
interest rate applicable to any Term B Loan, (iii) accelerate any date fixed
for any payment of the principal of or interest rate applicable to any Term B
Loans, or (iv) increase the interest rate applicable to any Revolving Loan or
L/C Obligation must be in writing and signed or approved in writing by the
Majority Class Lenders;

 

(e)           Any amendment, modification,
termination or waiver of any provision of Section 2.05(a) must be in
writing and signed by the Majority Revolving Lenders;

 

98

 

(f)            Any amendment, modification,
termination or waiver of any provision of Section 2.07 or Section
2.08 must be in writing and signed by the Majority Class Lenders;

 

(g)           Any amendment, waiver or consent
which increases or decreases the Proportionate Share of any Lender or adversely
affects the rights of such Lender under Section 11.08 hereof must
be in writing and signed by such Lender;

 

(h)           Any amendment, waiver or consent
which affects the rights or duties of the Swingline Lender under this Agreement
must be in writing and signed by the Swingline Lender;

 

(i)            Any amendment, waiver or consent
which affects the rights or duties of the L/C Issuer under this Agreement or
any L/C Application relating to any Letter of Credit issued or to be issued by
it must be in writing and signed by the L/C Issuer;

 

(j)            Any amendment, waiver or consent
which affects the rights or obligations of the Administrative Agent must be in
writing and signed by the Administrative Agent; and

 

(k)           Any amendment, waiver or consent which
releases any material portion of the Collateral must be in writing and signed
or approved in writing by all Lenders, except that (i) any release in
connection with a sale or other disposition of Collateral authorized by Section
8.02 shall not require the approval of any Lenders, and (ii) any amendment,
waiver or consent which modifies the terms of Section 8.02 (including
any modification relating to the prepayment of proceeds from any such sale or
other disposition) shall require the consent of the Majority Lenders.

 

No failure or delay by the Administrative Agent or any
Lender in exercising any right under this Agreement or any other Loan Document
shall operate as a waiver thereof or of any other right hereunder or thereunder
nor shall any single or partial exercise of any such right preclude any other
further exercise thereof or of any other right hereunder or thereunder.  Unless otherwise specified in such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.  The Lenders may condition the giving or
making of any amendment, waiver or consent of any term, covenant, agreement or
condition of this Agreement or any other Loan Document on payment of a fee by
Holdings.

 

11.02       Notices.  (a) 
All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, but excluding by electronic mail
unless accompanied by notice delivered via one of the other methods specified
herein), and mailed, faxed or delivered, to the address or facsimile number
specified for notices on Schedule 11.02; or, as directed to Holdings,
the Company or the Administrative Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to Holdings, the Company and the Administrative
Agent.

 

(b)           All such notices, requests and
communications shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery, or transmitted in
legible form by facsimile machine, respectively, or if mailed, upon the third
Business Day after the date deposited into the mails, or if delivered, upon
delivery; except that

 

99

 

notices pursuant to Article II, III or X to the
Administrative Agent shall not be effective until actually received by the
Administrative Agent, notices pursuant to Article III to the L/C Issuer
shall not be effective until actually received by the L/C Issuer at the address
specified for the “L/C Issuer” on Schedule 11.02 and notices pursuant to
Article II to the Swingline Lender shall not be effective until
actually received by the Swingline Lender, at the address specified for such
Person on Schedule 11.02.

 

(c)           Any agreement of the Administrative
Agent and the Lenders herein to receive certain notices by telephone or
facsimile is solely for the convenience and at the request of Holdings.  The Administrative Agent and the Lenders
shall be entitled to rely on the authority of any Person purporting to be a
Person authorized by Holdings to give such notice and the Administrative Agent
and the Lenders shall not have any liability to Holdings or other Person on
account of any action taken or not taken by the Administrative Agent or the
Lenders in reliance upon such telephonic or facsimile notice.  The obligation of Holdings to repay the
Loans and L/C Obligations shall not be affected in any way or to any extent by
any failure by the Administrative Agent and the Lender to receive written
confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Lenders of a confirmation which is at variance
with the terms understood by the Administrative Agent and the Lenders to be
contained in the telephonic or facsimile notice.

 

11.03       No Waiver;
Cumulative Remedies.  No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof;  nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights
provided for in this Agreement and the other Loan Documents are cumulative and
are not exclusive of any other rights, powers, privileges or remedies provided
by law or in equity, or under any other instrument, document or agreement now
existing or hereafter arising.

 

11.04       Costs and Expenses.  Holdings shall:

 

(a)           whether or not the transactions
contemplated hereby are consummated, pay or reimburse Wells Fargo (including in
its capacity as Administrative Agent and L/C Issuer) within five (5) Business
Days after demand (subject to Section 5.02(c)) for all reasonable costs
and expenses incurred by Wells Fargo (including in its capacity as
Administrative Agent and L/C Issuer) in connection with (i) the
development, due diligence, preparation, delivery, administration and execution
or enforcement of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any Loan Document and
any other documents prepared in connection herewith or therewith, (ii) the
consummation of the transactions contemplated hereby and thereby, and
(iii) the syndication and assignment following the Effective Date of all
or any part of Wells Fargo’s interest as Lender hereunder, including reasonable
Attorney Costs incurred by Wells Fargo (including in its capacity as
Administrative Agent and L/C Issuer) with respect thereto;

 

(b)           pay or reimburse the Administrative
Agent, the Co-Lead Arrangers and each Lender within five (5) Business Days
after demand (subject to Section 5.02(c)) for all invoiced (or otherwise
documented) costs and expenses (including reasonable Attorney Costs) incurred
by

 

100

 

them in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or any other Loan
Document during the existence of an Event of Default or after acceleration of
the Loans (including in connection with any “workout” or restructuring
regarding the Loans, and including in any Insolvency Proceeding or appellate
proceeding); and

 

(c)           pay or reimburse Wells Fargo
(including in its capacity as Administrative Agent) within five (5) Business
Days after demand (subject to Section 5.02(c)) for all appraisal
(including the allocated cost of internal appraisal services), audit,
environmental inspection and review (including the allocated cost of such internal
services), search and filing costs, fees and expenses, incurred or sustained by
Wells Fargo (including in its capacity as Administrative Agent) in connection
with the matters referred to under subsections (a) and (b) of this
section.

 

11.05       Indemnification.

 

(a)           Whether or not the transactions
contemplated hereby are consummated, each of Holdings and the Company shall
indemnify, defend and hold the Administrative Agent-Related Persons, and each
Lender and each of its respective officers, directors, trustees, employees,
counsel, Administrative Agents and attorneys-in-fact (each, an “Indemnified
Person”) harmless from and against any and all liabilities, claims,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
settlement costs, charges, expenses and disbursements (including reasonable
Attorney Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans, the termination of all
Specified Swap Contracts, the termination of the Letters of Credit and the
termination, resignation or replacement of the Administrative Agent or
replacement of any Lender)  be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement, the other Loan Documents or any document
contemplated by or referred to therein, or the transactions contemplated hereby
or the use of proceeds of the Loans provided hereunder, or any action taken or
omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement, the Specified Swap Contracts, the Loans or
Letters of Credit or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”); provided that neither Holdings nor the Company shall have
any obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities to the extent they are found by a final decision of a court of
competent jurisdiction to have resulted primarily from the gross negligence or
willful misconduct of such Indemnified Person. 
The agreements in this section and in Section 11.04 shall survive
the termination of the Commitments, the termination or expiration of all
Letters of Credit and the payment of all other Obligations.

 

(b)           (i) 
Each of Holdings and the Company shall indemnify, defend and hold
harmless each Indemnified Person, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including reasonable Attorney Costs and the
allocated cost of internal environmental audit or review services), which may
be incurred by or asserted against such Indemnified Person in connection with
or arising out of any pending or threatened investigation, litigation or
proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising

 

101

 

out of or related to any property subject to a Mortgage in favor of the
Administrative Agent or any Lender.  No
action taken by legal counsel chosen by the Administrative Agent or any Lender
in defending against any such investigation, litigation or proceeding or
requested remedial, removal or response action shall vitiate or any way impair
Holdings’ and the Company’s obligation and duty hereunder to indemnify and hold
harmless the Administrative Agent and each Lender.

 

(ii)           In no event shall any site visit,
observation, or testing by the Administrative Agent or any Lender (or any
contractee of the Administrative Agent or any Lender) be deemed a
representation or warranty that Hazardous Materials are or are not present in,
on, or under, the site, or that there has been or shall be compliance with any
Environmental Law.  Neither Holdings nor
any other Person is entitled to rely on any site visit, observation, or testing
by the Administrative Agent or any Lender. 
Neither the Administrative Agent nor any Lender owes any duty of care to
protect Holdings or any other Person against, or to inform Holdings or any
other Person of, any Hazardous Materials or any other adverse condition
affecting any site or property.  Neither
the Administrative Agent nor any Lender shall be obligated to disclose to
Holdings or any other Person any report or findings made as a result of, or in
connection with, any site visit, observation, or testing by the Administrative
Agent or any Lender.

 

(c)           The obligations in this
section shall survive payment of all other Obligations.  At the election of any Indemnified Person,
Holdings shall defend such Indemnified Person using legal counsel satisfactory
to such Indemnified Person in such Person’s sole discretion, at the sole cost
and expense of Holdings.  All amounts
owing under this Section 11.05(c) shall be paid within thirty (30)
days after demand.

 

11.06       Marshalling;
Payments Set Aside.  Neither the
Administrative Agent nor the Lenders shall be under any obligation to marshal
any assets in favor of Holdings or any other Person or against or in payment of
any or all of the Obligations.  To the
extent that any Loan Party makes a payment to the Administrative Agent or the
Lenders, or the Administrative Agent or the Lenders exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay
to the Administrative Agent upon demand its Proportionate Share of any amount
so recovered from or repaid by the Administrative Agent.

 

11.07       Successors and
Assigns.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that a Loan Party may not
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent and each Lender.

 

11.08       Assignments,
Participations, Etc.  (a)  Any Lender may, with the written consent of
the Administrative Agent, the L/C Issuer and the Swingline Lender, and in the
case of an

 

102

 

assignment of Revolving Loans, Holdings (which in each case shall not
be unreasonably withheld), at any time assign and delegate to one or more
Eligible Assignees (each an “Assignee”) all, or any ratable part of all,
of the Loans, the Commitment, the L/C Obligations and the other rights and
obligations of such Lender hereunder; provided, however, that
(i) no written consent of Holdings shall be required during the existence
of a Default or an Event of Default; (ii) no written consent of Holdings
or the Administrative Agent, the L/C Issuer or the Swingline Lender shall be
required in connection with any assignment and delegation by a Lender to an
Eligible Assignee that is another Lender or an Affiliate of such assigning
Lender, provided that if the proposed Assignee is another Lender, the
Lender seeking to assign its interests hereunder shall consult with Holdings
and the Administrative Agent before entering into such assignment;
(iii) except in connection with an assignment of all of a Lender’s rights
and obligations with respect to its Commitment, Loans and L/C Obligations, any
such assignment to an Eligible Assignee that is not a Lender hereunder shall be
equal to or greater than $1,000,000; and (iv) each such partial assignment
shall be of a ratable part of the Loans, the Commitment and the other
interests, rights and obligations hereunder of such assigning Lender; and provided
further, however, that Holdings and the Administrative Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (A) such Lender and its Assignee
shall have delivered to Holdings and the Administrative Agent an Assignment and
Acceptance Agreement substantially in the form of Exhibit E (“Assignment
and Acceptance”), together with any Note or Notes subject to such
assignment; (B) a written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
in substantially the form of the Notice of Assignment and Acceptance attached as
Schedule 1 to the Assignment and Acceptance, shall have been given to Holdings
and the Administrative Agent by such Lender and the Assignee; (C) the
assignor Lender or Assignee shall have paid to the Administrative Agent a
processing fee in the amount of $3,500 (it being understood that with respect
to an assignment to more than one Eligible Assignee within the same “family of
funds” or by more than one Lender within the same “family of funds” to a single
Eligible Assignee, only one such processing fee is payable for the series of
simultaneous assignments) and (D) the Administrative Agent, Holdings, the
L/C Issuer and the Swingline Lender each shall have provided any required
consent to such assignment in accordance with this Section 11.08(a).  In connection with any assignment by Wells
Fargo, its Swingline Commitment may be assigned in whole (and not part) and
only in connection with an assignment transaction involving an assignment of
all of its Commitment and Loans, and the Assignment and Acceptance may be
appropriately modified to include an assignment and delegation of its Swingline
Commitment and any outstanding Swingline Loans.

 

(b)           From and after the date that the
Administrative Agent notifies the assignor Lender that the Administrative Agent
has received (and, if required, provided its consent with respect thereto and
received any other consents required under this Section 11.08) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party 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 a Lender under the Loan Documents, (ii) this Agreement
shall be deemed to be amended to the extent, but only to the extent, necessary
to reflect the addition of the Assignee and the resulting adjustment of the
Commitments arising therefrom, and (iii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance,

 

103

 

relinquish its rights and be released from its obligations under the
Loan Documents; provided, however, that the assignor Lender shall
not relinquish its rights under Article IV or under Section 11.04
and Section 11.05 to the extent such rights relate to the time prior to
the effective date of the Assignment and Acceptance.  The Commitment allocated to each Assignee shall reduce the
Commitment of the assigning Lender pro tanto.

 

(c)           Within five (5) Business Days after
Holding’s receipt of notice by the Administrative Agent that it has received
(and, if necessary, consented to) an executed Assignment and Acceptance and
payment of the processing fee (and provided that the L/C Issuer, the
Swingline Lender and Holdings each consent to such assignment in accordance
with Section 11.08(a)), Holdings shall execute and deliver to the
Administrative Agent any new Note requested by such Assignee evidencing such
Assignee’s assigned Loans and Commitment and, if the assignor Lender has
retained a portion of its Loans and its Commitment, replacement Notes as
requested by the assignor Lender evidencing the Loans and Commitment retained
by the assignor Lender (such Note to be in exchange for, but not in payment of,
the Note held by such Lender, if any).

 

(d)           Any Lender may at any time sell to
one or more commercial banks or other Persons not Affiliates of Holdings (a “Participant”)
participating interests in any Loans, the Commitment of that Lender and the
other interests of that Lender (the “originating Lender”) hereunder and
under the other Loan Documents; provided, however, that
(i) the originating Lender’s obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for
the performance of such obligations, (iii) Holdings, the L/C Issuer and
the Administrative Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, and (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the
extent such amendment, consent or waiver would require unanimous consent of the
Lenders as described in the first proviso to Section 11.01. In the
case of any such participation, the Participant shall be entitled to the
benefit of Sections 4.01, 4.03 and 11.05 as though it were
also a Lender hereunder, and except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement.

 

(e)           Notwithstanding
any other provision in this Agreement, any Lender may at any time create a
security interest in, or pledge, all or any portion of its rights under and
interest in this Agreement and any Note held by it (other than in respect of
Swingline Loans) in favor of (i) any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 C.F.R. §203.14, and such
Federal Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law or (ii) a trustee or other representative for
the benefit of security holders of a Lender to secure obligations of such
Lender.

 

104

 

(f)            Notwithstanding any provision in
this Section 11.08 to the contrary, no registration or processing fee
shall be payable in connection with any such Assignment by Wells Fargo.

 

11.09       Confidentiality.  Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as “confidential” or
“secret” by Holdings or the Company and provided to it by Holdings, the Company
or any Subsidiary, or by the Administrative Agent on Holdings’, the Company’s
or such Subsidiary’s behalf, under this Agreement or any other Loan Document,
and neither it nor any of its Affiliates shall use any such information other
than in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with Holdings, the Company or any Subsidiary; except to the extent
such information (i) was or becomes generally available to the public
other than as a result of disclosure by such Lender, or (ii) was or
becomes available on a non-confidential basis from a source other than Holdings
or the Company, provided that such source is not bound by a
confidentiality agreement with Holdings or the Company known to such Lender; provided,
however, that any Lender may disclose such information (A) at the
request or pursuant to any requirement of any Governmental Authority to which
such Lender is subject or in connection with an examination of such Lender by
any such authority; (B) pursuant to subpoena or other court process;
(C) when required to do so in accordance with the provisions of any
applicable Requirement of Law; (D) to the extent reasonably required in
connection with any litigation or proceeding to which the Administrative Agent,
any Lender or their respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; (F) to such Lender’s independent auditors,
legal counsel and other professional advisors; (G) to any Participant or
Assignee, actual or potential, or any actual or proposed contractual
counterparty (or its advisors) to any securitization, hedge, or other
derivative transaction relating to the parties’ obligations hereunder, provided
that such Person agrees in writing to keep such information confidential to the
same extent required of the Lenders hereunder; (H) as to any Lender or its
Affiliate, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which Holdings, the Company or any
Subsidiary is party or is deemed party with such Lender or such Affiliate; and
(I) to its Affiliates and provided, further, however,
that the parties hereto (and each employee, representative or other agent
thereof) may disclose to any and all persons, without limitation of any kind,
the “structure” and “tax aspects” (in each case, within the meaning of Treasury
Regulation section 1.6011-4T) of the transactions contemplated hereby and
all materials of any kind (including opinions or other tax analyses) that are
or have been provided to such Person relating to such structure and tax
aspects, except that, with respect to any document or similar item that in
either case contains information concerning such tax structure or tax aspects
of the transactions contemplated hereby as well as other information, this
proviso shall only apply to such portions of the document or similar item that
relate to such  tax structure or tax aspects of the transactions
contemplated hereby.

 

11.10       Set-off.  In addition to any rights and remedies of
the Lenders provided by law, if an Event of Default exists or the Loans have
been accelerated, each Lender is authorized at any time and from time to time,
without prior notice to any Loan Party, any such notice being waived by such
Loan Party to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other

 

105

 

indebtedness at any time owing by, such Lender to or for the credit or
the account of such Loan Party against any and all Obligations owing to such
Lender, now or hereafter existing, irrespective of whether or not the
Administrative Agent or such Lender shall have made demand under this Agreement
or any Loan Document and although such Obligations may be contingent or
unmatured.  Each Lender agrees promptly
to notify such Loan Party and the Administrative Agent after any such set-off
and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.  NOTWITHSTANDING THE
FOREGOING, NO LENDER SHALL EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF
SET-OFF, BANKER’S LIEN, OR THE LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF
HOLDINGS OR ANY SUBSIDIARY OF HOLDINGS HELD OR MAINTAINED BY THE LENDER WITHOUT
THE UNANIMOUS PRIOR WRITTEN CONSENT OF THE LENDERS.

 

11.11       [Intentionally
omitted.]

 

11.12       Guaranty.  (a)  Guaranty.  Each of the Guarantors unconditionally and
irrevocably, jointly and severally guarantees to the Administrative Agent, the
Co-Lead Arrangers and the Lenders, and their respective successors, endorsers,
transferees and assigns (the “Guaranteed Persons”), the full and prompt
payment when due (whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise) and performance of all
indebtedness, liabilities and other obligations of Holdings to any Guaranteed
Person, whether arising out of or in connection with this Agreement, any other
Loan Document or otherwise, including all unpaid principal of the Loans, all
L/C Obligations, all interest accrued thereon, all fees due under this
Agreement and all other amounts payable by Holdings to any Guaranteed Person
thereunder or in connection therewith. 
The terms “indebtedness,” “liabilities” and “obligations” are used
herein in their most comprehensive sense and include any and all advances,
debts, obligations and liabilities, now existing or hereafter arising, whether
voluntary or involuntary and whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether recovery
upon such indebtedness, liabilities and obligations may be or hereafter become
unenforceable or shall be an allowed or disallowed claim under the Bankruptcy
Code or other applicable law.  The
foregoing indebtedness, liabilities and other obligations of Holdings shall
hereinafter be collectively referred to as the “Guaranteed Obligations.”  The Guaranteed Obligations include interest
which, but for an Insolvency Proceeding, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against Holdings for such
interest in any such Insolvency Proceeding.

 

(b)           Separate Obligation.  Each Guarantor acknowledges and agrees
(i) that the Guaranteed Obligations are separate and distinct from any
indebtedness, obligations or liabilities arising under or in connection with
any other agreement, instrument or guaranty, including under any provision of
this Agreement other than this Section 11.12, executed at any time by
such Guarantor in favor of any Guaranteed Person, and (ii) such Guarantor
shall pay and perform all of the Guaranteed Obligations as required under this Section
11.12, and each Guaranteed Person may enforce any and all of its rights and
remedies hereunder, without regard to any other agreement, instrument or
guaranty, including any provision of this Agreement other than this Section
11.12, at any time executed by such Guarantor in favor of any Guaranteed
Person, regardless of whether or not any such other agreement, instrument or
guaranty, or any provision thereof or hereof, shall for any reason become
unenforceable or any of the indebtedness,

 

106

 

obligations or liabilities thereunder shall have been discharged,
whether by performance, avoidance or otherwise.  Each Guarantor acknowledges that in providing benefits to
Holdings and such Guarantor, the Guaranteed Persons are relying upon the
enforceability of this Section 11.12 and the Guaranteed Obligations
as separate and distinct indebtedness, obligations and liabilities of such
Guarantor, and each Guarantor agrees that each Guaranteed Person would be
denied the full benefit of their bargain if at any time this Section 11.12
or the Guaranteed Obligations were treated any differently.  The fact that the Guaranty of each Guarantor
is set forth in this Agreement rather than in a separate guaranty document is
for the convenience of Holdings and the Guarantors and shall in no way impair
or adversely affect the rights or benefits of any Guaranteed Person under this Section
11.12.  Each Guarantor agrees to
execute and deliver a separate agreement, immediately upon request at any time
of any Guaranteed Person, evidencing such Guarantor’s obligations under this Section
11.12.  Upon the occurrence of any Event
of Default, a separate action or actions may be brought against each Guarantor,
whether or not Holdings or any other Guarantor or Person is joined therein or a
separate action or actions are brought against Holdings or any other Guarantor
or Person.

 

(c)           Limitation of Guaranty.  To the extent that any court of competent
jurisdiction shall impose by final judgment under applicable law (including the
California Uniform Fraudulent Transfer Act and §§544 and 548 of the Bankruptcy
Code) any limitations on the amount of any Guarantor’s liability with respect
to the Guaranteed Obligations which any Guaranteed Person can enforce under
this Section 11.12, each Guaranteed Person by its acceptance hereof
accepts such limitation on the amount of such Guarantor’s liability hereunder
to the extent needed to make this Section 11.12 fully enforceable and
nonavoidable.

 

(d)           Liability of Guarantor.  The liability of each Guarantor under this Section 11.12
shall be irrevocable, absolute, independent and unconditional, and shall not be
affected by any circumstance which might constitute a discharge of a surety or
guarantor other than the indefeasible payment and performance in full of all
Guaranteed Obligations.  In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:

 

(i)            such Guarantor’s liability hereunder
shall be the immediate, direct, and primary obligation of such Guarantor and
shall not be contingent upon any Guaranteed Person’s exercise or enforcement of
any remedy it may have against Holdings or any other Person, or against any
collateral or other security for any Guaranteed Obligations;

 

(ii)           this Guaranty is a guaranty of
payment when due and not merely of collectibility;

 

(iii)          such Guarantor’s payment of a portion,
but not all, of the Guaranteed Obligations shall in no way limit, affect,
modify or abridge such Guarantor’s liability for any portion of the Guaranteed
Obligations remaining unsatisfied; and

 

(iv)          such Guarantor’s liability with
respect to the Guaranteed Obligations shall remain in full force and effect
without regard to, and shall not be impaired or affected by, nor shall such
Guarantor be exonerated or discharged by, any of the following events:

 

107

 

(A)          any Insolvency Proceeding;

 

(B)           any limitation, discharge, or
cessation of the liability of Holdings or any other guarantor or Person for any
Guaranteed Obligations due to any statute, regulation or rule of law, or any
invalidity or unenforceability in whole or in part of any of the Guaranteed
Obligations or the Loan Documents;

 

(C)           any merger, acquisition,
consolidation or change in structure of Holdings or any other Guarantor or
Person, or any sale, lease, transfer or other disposition of any or all of the
assets or shares of Holdings or any other Guarantor or other Person;

 

(D)          any assignment or other transfer, in
whole or in part, of any Guaranteed Person’s interests in and rights under this
Guaranty or the other Loan Documents;

 

(E)           any claim, defense, counterclaim or
set-off, other than that of prior performance, that Holdings, such Guarantor,
any other guarantor or other Person may have or assert, including any defense
of incapacity or lack of corporate or other authority to execute any of the Loan
Documents;

 

(F)           any Guaranteed Person’s amendment,
modification, renewal, extension, cancellation or surrender of any Loan
Document or any Guaranteed Obligations;

 

(G)           any Guaranteed Person’s exercise or
nonexercise of any power, right or remedy with respect to any Guaranteed
Obligations or any collateral;

 

(H)          any Guaranteed Person’s vote, claim,
distribution, election, acceptance, action or inaction in any Insolvency
Proceeding; or

 

(I)            any other guaranty, whether by any
Guarantor or any other Person, of all or any part of the Guaranteed Obligations
or any other indebtedness, obligations or liabilities of any Guaranteed Person.

 

(e)           Consents of Guarantor.  Each Guarantor hereby unconditionally
consents and agrees that, without notice to or further assent from such
Guarantor:

 

(i)            the principal amount of the
Guaranteed Obligations may be increased or decreased and additional
indebtedness or obligations of Holdings under the Loan Documents may be
incurred and the time, manner, place or terms of any payment under any Loan
Document be extended or changed, by one or more amendments, modifications,
renewals or extensions of any Loan Document or otherwise;

 

(ii)           the time for Holdings’ (or any other
Person’s) performance of or compliance with any term, covenant or agreement on
its part to be performed or observed under any Loan Document may be extended,
or such performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any Guaranteed Person (or the Majority Lenders, as the case may be) may deem
proper;

 

108

 

(iii)          each Guaranteed Person may request and
accept other guarantees and may take and hold other security as collateral for
the Guaranteed Obligations, and may, from time to time, in whole or in part,
exchange, sell, surrender, release, subordinate, modify, waive, rescind,
compromise or extend such other guaranties or security and may permit or
consent to any such action or the result of any such action, and may apply such
security and direct the order or manner of sale thereof;

 

(iv)          each Guaranteed Person may exercise,
or waive or otherwise refrain from exercising, any other right, remedy, power
or privilege even if the exercise thereof affects or eliminates any right of
subrogation or any other right of such Guarantor against Holdings.

 

(f)            Guarantor’s Waivers.  Each Guarantor waives and agrees not to
assert:

 

(i)            any right to require the
Administrative Agent, the L/C Issuer or any Lender to marshal assets in favor
of Holdings, the Guarantors, any other guarantor or any other Person, to
proceed against Holdings, any other guarantor or any other Person, to proceed
against or exhaust any of the Collateral, to give notice of the terms, time and
place of any public or private sale of personal property security constituting
the Collateral or other collateral for the Guaranteed Obligations or comply
with any other provisions of Chapter 6 of Division 9 of the UCC (or any equivalent
provision of any other applicable law) or to pursue any other right, remedy,
power or privilege of the Administrative Agent, the L/C Issuer or any Lender
whatsoever;

 

(ii)           the defense of the statute of
limitations in any action hereunder or for the collection or performance of the
Guaranteed Obligations;

 

(iii)          any defense arising by reason of any
lack of corporate or other authority or any other defense of Holdings, such
Guarantor or any other Person;

 

(iv)          any defense based upon any Guaranteed
Person’s errors or omissions in the administration of the Guaranteed
Obligations;

 

(v)           any rights to set-offs and
counterclaims;

 

(vi)          without limiting the generality of the
foregoing, to the fullest extent permitted by law, any defenses or benefits
that may be derived from or afforded by applicable law limiting the liability
of or exonerating guarantors or sureties, or which may conflict with the terms
of this Section 11.12;

 

(vii)         any defense based upon an election of
remedies (including, if available, an election to proceed by nonjudicial
foreclosure) which destroys or impairs the subrogation rights of such Guarantor
or the right of such Guarantor to proceed against Holdings or any other obligor
of the Guaranteed Obligations for reimbursement;

 

(viii)        without limiting the generality of the
foregoing, to the fullest extent permitted by law, any defenses or benefits
that may be derived from or afforded by applicable law limiting the liability
of or exonerating guarantors or sureties, or which may conflict with the terms
of this Section 11.12, including any and all benefits that otherwise
might be available to

 

109

 

such Guarantor under California Civil Code §§1432, 2809, 2810, 2815,
2819, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 and California Code of Civil
Procedure §§580a, 580b, 580d and 726 or Texas Property Code §§51.003 —
51.005.  Accordingly, each Guarantor
waives all rights and defenses that such Guarantor may have because Holdings’
debt is secured by real property.  This
means, among other things:  (A) the
Administrative Agent, the L/C Issuer and the Lenders may collect from such
Guarantor without first foreclosing on any real or personal property Collateral
pledged by Holdings or such Guarantor; and (B) if the Administrative Agent
forecloses on any real property Collateral pledged by Holdings or such
Guarantor:  (1) the amount of the
debt may be reduced only by the price for which that Collateral is sold at the
foreclosure sale, even if the Collateral is worth more than the sale price, and
(2) the Administrative Agent, the L/C Issuer and the Lenders may collect
from such Guarantor even if the Administrative Agent, by foreclosing on the
real property Collateral, has destroyed any right such Guarantor may have to
collect from Holdings.  This is an
unconditional and irrevocable waiver of any rights and defenses such Guarantor
may have because Holdings’ debt is secured by real property.  These rights and defenses include, but are
not limited to, any rights of defenses based upon section 580a, 580b, 580d
or 726 of the California Code of Civil Procedure or sections 51.003 — 51.005 of
the Texas Property Code; and

 

(ix)           any and all notice of the acceptance
of this Guaranty, and any and all notice of the creation, renewal,
modification, extension or accrual of the Guaranteed Obligations, or the
reliance by any Guaranteed Person upon this Guaranty, or the exercise of any
right, power or privilege hereunder. 
The Guaranteed Obligations shall conclusively be deemed to have been
created, contracted, incurred and permitted to exist in reliance upon this
Guaranty.  Each Guarantor waives
promptness, diligence, presentment, protest, demand for payment, notice of
default, dishonor or nonpayment and all other notices to or upon Holdings, such
Guarantor or any other Person with respect to the Guaranteed Obligations.

 

(g)           Financial Condition of Holdings.  No Guarantor shall have any right to require
any Guaranteed Person to obtain or disclose any information with respect
to:  the financial condition or
character of Holdings or the ability of Holdings to pay and perform the
Guaranteed Obligations; the Guaranteed Obligations; any collateral or other
security for any or all of the Guaranteed Obligations; the existence or
nonexistence of any other guarantees of all or any part of the Guaranteed
Obligations; any action or inaction on the part of any Guaranteed Person or any
other Person; or any other matter, fact or occurrence whatsoever.  Each Guarantor hereby acknowledges that it
has undertaken its own independent investigation of the financial condition of
Holdings and the other Loan Parties and all other matters pertaining to this
Guaranty and further acknowledges that it is not relying in any manner upon any
representation or statement of any Guaranteed Person with respect thereto.

 

(h)           Subrogation.  Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, each Guarantor shall
not have, and shall not directly or indirectly exercise (i) any rights
that it may acquire by way of subrogation under this Section 11.12,
by any payment hereunder or otherwise, (ii) any rights of contribution,
indemnification, reimbursement or similar suretyship claims arising out of this
Section 11.12 or (iii) any other right which it might otherwise
have or acquire (in any way whatsoever) which could entitle it at any time to
share or participate in any right, remedy or security of any Guaranteed Person
as against Holdings or other guarantors, whether in connection with this

 

110

 

Section 11.12, any of the other Loan
Documents or otherwise.  If any amount
shall be paid to any Guarantor on account of the foregoing rights at any time
when all the Guaranteed Obligations shall not have been paid in full, such
amount shall be held in trust for the benefit of each Guaranteed Person and
shall forthwith be paid to the Administrative Agent to be credited and applied
to the Guaranteed Obligations, whether matured or unmatured, in accordance with
the terms of the Loan Documents.

 

(i)            Continuing Guaranty.  This Guaranty is a continuing guaranty and
agreement of subordination and shall continue in effect and be binding upon
each Guarantor until termination of the Commitments and payment and performance
in full of all Guaranteed Obligations, including Guaranteed Obligations which
may exist continuously or which may arise from time to time under successive
transactions, and each Guarantor expressly acknowledges that this Guaranty
shall remain in full force and effect notwithstanding that there may be periods
in which no Guaranteed Obligations exist.

 

(j)            Reinstatement.  This Guaranty shall continue to be effective
or shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of Holdings (or receipt
of any proceeds of collateral) shall be rescinded, invalidated, declared to be
fraudulent or preferential, set aside, voided or otherwise required to be
repaid to Holdings, its estate, trustee, receiver or any other Person
(including under the Bankruptcy Code or other state or federal law), or must
otherwise be restored by any Guaranteed Person, whether as a result of
Insolvency Proceedings or otherwise. 
All losses, damages, costs and expenses that any Guaranteed Person may
suffer or incur as a result of any voided or otherwise set aside payments shall
be specifically covered by the indemnity in favor of the Lenders and the
Administrative Agent contained in Section 11.05.

 

(k)           Substantial Benefits.  The funds that have been borrowed from the
Lenders by Holdings have been and are to be contemporaneously used for the
direct or indirect benefit of Holdings and each Guarantor.  It is the position, intent and expectation
of the parties that Holdings and each Guarantor have derived and will derive
significant and substantial direct or indirect benefits from the accommodations
that have been made by the Lenders under the Loan Documents.

 

(l)            Knowing and Explicit Waivers.  EACH GUARANTOR ACKNOWLEDGES THAT IT EITHER
HAS OBTAINED THE ADVICE OF LEGAL COUNSEL OR HAS HAD THE OPPORTUNITY TO OBTAIN
SUCH ADVICE IN CONNECTION WITH THE TERMS AND PROVISIONS OF THIS SECTION
11.12.  EACH GUARANTOR ACKNOWLEDGES
AND AGREES THAT EACH OF THE WAIVERS AND CONSENTS SET FORTH HEREIN ARE MADE WITH
FULL KNOWLEDGE OF THEIR SIGNIFICANCE AND CONSEQUENCES, AND THAT ALL SUCH
WAIVERS AND CONSENTS HEREIN ARE EXPLICIT AND KNOWING AND WHICH EACH GUARANTOR
EXPECTS TO BE FULLY ENFORCEABLE.

 

(m)          Release of Subsidiary Guarantors.  Holdings may at any time deliver to the
Administrative Agent a certificate from a Responsible Officer of Holdings
certifying as of the date of the certificate that, after the consummation of
the transaction or series of transactions described in such certificate (which
certification shall also state that such transactions,

 

111

 

individually or in the aggregate, will be in compliance with the terms
and conditions of this Agreement, including to the extent applicable Section
8.02 and Section 8.03, and that no Event of Default existed, exists
or will exist, as the case may be, immediately before, as a result of or
immediately after giving effect to such transaction or transactions and
termination), the Guarantor identified in such certification will no longer be
a Subsidiary of Holdings.  Effective
upon the consummation of the transaction or series of transactions described in
such certificate, the Subsidiary identified in such certification shall
thereupon automatically cease to be a Guarantor hereunder and shall cease to be
a party hereto and shall thereupon automatically be released from its
obligations under this Section 11.12 and under the Security Agreement,
and all Liens in favor of the Administrative Agent and the Lenders under the
Collateral Documents in respect of the property of such Subsidiary shall
thereupon terminate.  Holdings shall
promptly notify the Administrative Agent of the consummation of any such transaction
or series of transactions.  The
Administrative Agent, on behalf of the Lenders, shall, at Holdings’ expense,
execute and deliver such instruments as Holdings may reasonably request to
evidence such release and Lien termination.

 

11.13       Notification
of Addresses, Lending Offices, Etc.  Each Lender shall notify the Administrative Agent in writing of
any changes in the address to which notices to such Lender should be directed,
of addresses of any Lending Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative
information as the Administrative Agent shall reasonably request.

 

11.14       Counterparts.  This Agreement may be executed in any number
of separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.

 

11.15       Severability.  The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.

 

11.16       No Third
Parties Benefited.  This
Agreement is made and entered into for the sole protection and legal benefit of
Holdings, the Company, the Lenders, the Administrative Agent and the
Administrative Agent-Related Persons, the Indemnified Persons and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any of the other Loan Documents.

 

11.17       Governing Law
and Jurisdiction. 
(a)  THIS AGREEMENT AND ANY NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN
ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES SITTING IN THE STATE
OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS

 

112

 

AGREEMENT, EACH OF THE LOAN PARTIES, THE ADMINISTRATIVE AGENT AND THE
LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. 
EACH OF THE LOAN PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.  THE LOAN PARTIES, THE ADMINISTRATIVE AGENT
AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.

 

(c)           Nothing contained in this section
shall override any contrary provision contained in any Specified Swap Contract.

 

11.18       Waiver of Jury
Trial.  THE LOAN PARTIES, THE
LENDERS AND THE ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
ADMINISTRATIVE AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.  THE LOAN PARTIES, THE LENDERS AND THE
ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. 
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS
TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

 

11.19       Entire
Agreement.  This Agreement,
together with the other Loan Documents, embodies the entire agreement and
understanding among the Loan Parties, the L/C Issuer, the Swingline Lender, the
Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.

 

11.20       Treatment
of Existing Credit Agreement. 
Immediately prior to the Effective Date, all loans outstanding under the
Existing Credit Agreement shall be purchased by the Lenders in accordance with Section
2.01 and Section 2.02, and all outstanding letters of credit issued
under the Existing Credit Agreement shall be deemed to be Letters of Credit
issued and outstanding under this Agreement (and all accrued unpaid fees
thereon shall begin to accrue at

 

113

 

the rates set forth in this Agreement).  On and after the Effective Date, this Agreement and the other
Loan Documents shall amend, restate and supercede in their entirety and replace
the Existing Credit Agreement and the other documents related thereto (other
than the Mortgages, any UCC filings and any filings made with the U.S. Patent
and Trademark Office evidencing the Administrative Agent’s and Lenders’
continuing Lien on, and security interest in, any of the Collateral, which Lien
and security interest shall be deemed to continue from the date such Mortgage
or filing was recorded or filed, as applicable and maintain their priority
accordingly); provided, however, that the execution and delivery
of this Agreement and the other Loan Documents shall not (a) operate as a
waiver of any right, power or remedy of the Existing Lenders under the Existing
Credit Agreement and the other related documents, except to the extent
expressly waived in this Agreement and the other Loan Documents, (b)
extinguish, impair or constitute a novation of any obligations of Holdings or
the Guarantors under the Existing Credit Agreement or the related documents
except to the extent any such obligation is actually satisfied by Holdings or a
Guarantor thereunder or (c) extinguish or impair any indemnification or similar
rights under the Existing Credit Agreement which by their terms would survive
the termination of the Existing Credit Agreement.  Promptly upon the closing of this Agreement and the receipt by
the Lenders of their respective Notes, such Lenders that were also Existing
Lenders under the Existing Credit Agreement shall return to Holdings any Notes
delivered to such Existing Lender in connection with the Existing Credit
Agreement marked “cancelled”.

 

(remainder of page intentionally left blank)

 

114

 

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

 

	
   

  	
  BUILDING MATERIALS
  HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BMC WEST CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BMC WEST CORPORATION
  SOUTHCENTRAL

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BMCW SOUTHCENTRAL, L.P.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  BMC WEST CORPORATION

  
	
   

  	
   

  	
  SOUTHCENTRAL, its
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
										

 

 

	
   

  	
  BMCW, LLC

  
	
   

  	
   

  
	
   

  	
  By: BMC WEST
  CORPORATION, its Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BMC CONSTRUCTION, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  KNIPP BROTHERS
  INDUSTRIES, LLC

  
	
   

  	
   

  
	
   

  	
  By: BMC Framing, Inc.,
  its Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  KB INDUSTRIES LIMITED
  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By: BUILDING MATERIALS
  HOLDING CORPORATION, its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  VAUGHN ROAD, LLC

  
	
   

  	
   

  
	
   

  	
  By: BMC CONSTRUCTION,
  INC., its Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  KBI CONCRETE, LLC

  
	
   

  	
   

  
	
   

  	
  By: BMC CONSTRUCTION,
  INC., its Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  TOTAL CONCRETE, LLC

  
	
   

  	
   

  
	
   

  	
  By: KBI CONCRETE, INC.,
  its Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  WELLS FARGO BANK,
  NATIONAL ASSOCIATION,

  
	
   

  	
  as Administrative
  Agent, Co-Lead Arranger, L/C Issuer, Swingline Lender, Revolving Lender and
  Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION,

  
	
   

  	
  as Co-Lead Arranger, as
  a Revolving Lender and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION,

  
	
   

  	
  as Syndication Agent,
  as a Revolving Lender and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  UNION BANK OF
  CALIFORNIA, N.A.,

  
	
   

  	
  as Documentation Agent,
  as a Revolving Lender and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  LASALLE BUSINESS
  CREDIT, LLC,

  
	
   

  	
  as a Revolving Lender
  and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  HARRIS NESBITT,

  
	
   

  	
  as a Revolving Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  WASHINGTON MUTUAL BANK,

  
	
   

  	
  as a Revolving Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  BNP PARIBAS,

  
	
   

  	
  as a Revolving Lender
  and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  WEST COAST BANK,

  
	
   

  	
  as a Revolving Lender
  and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  GUARANTY BANK,

  
	
   

  	
  as a Revolving Lender
  and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  COMERICA WEST
  INCORPORATED,

  
	
   

  	
  as a Revolving Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  WHITNEY NATIONAL BANK,

  
	
   

  	
  as a Revolving Lender
  and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  BANK LEUMI USA,

  
	
   

  	
  as a Revolving Lender
  and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  IDB BANK,

  
	
   

  	
  as a Revolving Lender
  and as a Term B Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

SCHEDULE 2.01

 

COMMITMENTS
AND PROPORTIONATE SHARES

 

	
  Banks

  	
   

  	
  Revolving

  Commitment

  	
   

  	
  Proportionate
  Share

  (Revolving

  Commitment)

  	
   

  
	
  Wells Fargo Bank, National Association

  	
   

  	
  $

  	
  28,000,000

  	
   

  	
  16.000000000

  	
  %

  
	
  General Electric Capital Corporation

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  14.285714286

  	
  %

  
	
  U.S. Bank National Association

  	
   

  	
  $

  	
  22,000,000

  	
   

  	
  12.571428571

  	
  %

  
	
  Union Bank of California, N.A.

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  11.428571429

  	
  %

  
	
  LaSalle Business Credit, LLC

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  5.714285714

  	
  %

  
	
  Harris Nesbitt

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  8.571428571

  	
  %

  
	
  Washington Mutual Bank

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  8.571428571

  	
  %

  
	
  BNP Paribas

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  2.857142857

  	
  %

  
	
  West Coast Bank

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  2.857142857

  	
  %

  
	
  Guaranty Bank

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  2.857142857

  	
  %

  
	
  Comerica West Incorporated

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  5.714285714

  	
  %

  
	
  Whitney National Bank

  	
   

  	
  $

  	
  8,000,000

  	
   

  	
  4.571428571

  	
  %

  
	
  Bank Leumi USA

  	
   

  	
  $

  	
  3,500,000

  	
   

  	
  2.000000000

  	
  %

  
	
  IDB Bank

  	
   

  	
  $

  	
  3,500,000

  	
   

  	
  2.000000000

  	
  %

  
	
  TOTAL

  	
   

  	
  $

  	
  175,000,000

  	
   

  	
  100.000000000

  	
  %

  

 

1

 

SCHEDULE 2.09

 

TERM B LOAN
AMORTIZATION SCHEDULE

 

	
  Date

  	
   

  	
  % of Total Due

  	
   

  	
  Payment Due Based on

  Aggregate Term B

  Commitment as of

  Effective Date

  	
   

  	
  Payment Due Assuming

  Advancement of

  Maximum Allowable

  Additional Term B

  Loans as of Subsequent

  Effective Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/30/03

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  12/31/03

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/31/04

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  6/30/04

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  9/30/04

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  12/31/04

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/31/05

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  6/30/05

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  9/30/05

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  12/31/05

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/31/06

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  6/30/06

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  9/30/06

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  12/1/06

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/31/07

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  6/30/07

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  9/30/07

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  12/1/07

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/31/08

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  6/30/08

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  9/30/08

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  12/1/08

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/31/09

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  6/30/09

  	
   

  	
  0.25

  	
  %

  	
  $

  	
  312,500

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  9/30/09

  	
   

  	
  23.5

  	
  %

  	
  $

  	
  29,375,000

  	
   

  	
  $

  	
  41,125,000

  	
   

  
	
  12/1/09

  	
   

  	
  23.5

  	
  %

  	
  $

  	
  29,375,000

  	
   

  	
  $

  	
  41,125,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/31/10

  	
   

  	
  23.5

  	
  %

  	
  $

  	
  29,375,000

  	
   

  	
  $

  	
  41,125,000

  	
   

  
	
  6/30/10

  	
   

  	
  23.5

  	
  %

  	
  $

  	
  29,375,000

  	
   

  	
  $

  	
  41,125,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  100.00%

  	
   

  	
  $

  	
  125,000,000

  	
   

  	
  $

  	
  175,000,000

  	
   

  
											

 

1

 

SCHEDULE 11.02

 

PAYMENT OFFICES; ADDRESSES FOR NOTICES;

LENDING OFFICES

 

BUILDING MATERIALS HOLDING CORPORATION

 

Address for Notices:

 

Building Materials Holding Corporation

Four Embarcadero Center, Suite 3250

San Francisco, CA  94111

Attention:  Ellis C. Goebel, Senior Vice
President of Finance 

Telephone:  (415) 627-9100

Facsimile:  (415) 627-9119

Email: goebel@bmhc.com

 

With a copy to:

 

Paul S. Street, Esq.

Senior Vice President, Chief Aministrative Officer, General Counsel &
Corporate Secretary

Building Materials Holding Corporation

720 Park Boulevard, Suite 200

P.O. Box 70006

Boise, ID 83707

Telephone: (208) 331-4381

Facsimile: (208) 331-4477

Email: street@bmhc.com

 

Mark R. Kailer

Vice President and Treasurer

Building Materials Holding Corporation

Four Embarcadero Center, Suite 3250

San Francisco, CA  94111

Telephone:  (415) 627-9195

Facsimile:  (415) 627-9119

Email:  kailer@bmhc.com

 

1

 

GUARANTORS

 

Address for Notices:

 

c/o Building Materials Holding Corporation

Four Embarcadero Center, Suite 3250

San Francisco, CA  94111

Attention:  Ellis C. Goebel, Senior Vice
President of Finance 

Telephone:  (415) 627-9100

Facsimile:  (415) 627-9119

Email:  goebel@bmhc.com

 

With a copy to:

 

Paul S. Street, Esq.

Senior Vice President, Chief Aministrative Officer, General Counsel &
Corporate Secretary

Building Materials Holding Corporation

720 Park Boulevard, Suite 200

P.O. Box 70006

Boise, ID 83707

Telephone: (208) 331-4381

Facsimile: (208) 331-4477

Email: street@bmhc.com

 

Mark R. Kailer

Vice President and Treasurer

Building Materials Holding Corporation

Four Embarcadero Center, Suite 3250

San Francisco, CA  94111

Telephone:  (415) 627-9195

Facsimile:  (415) 627-9119

Email:  kailer@bmhc.com

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent

 

Notices for Borrowing, Conversions/Continuations, and Payments:

 

Wells Fargo Bank, National Association

201 Third Street, 8th Floor

MAC A0187-081

San Francisco, CA 94103

Attention:  Thomas Priftis

Telephone:  (415) 477-5443

Facsimile:  (415) 546-6353

Email:  priftist@wellsfargo.com

 

2

 

Other Notices:

 

Wells Fargo Bank, National Association

420 Montgomery Street

MAC A0101-096

San Francisco, CA 94104

Attention:  Thomas (Max) Gloger

Telephone:  (415) 396-5939

Facsimile:  (415) 421-1352

Email:  glogert@wellsfargo.com

 

Administrative Agent’s Payment Office:

 

Wells Fargo Bank, National Association

201 Third Street, 8th Floor

MAC A0187-081

San Francisco, CA 94103

Attention:  Thomas Priftis

Reference:  Building Materials
Holding

For credit to Acct. No. 
41219-02167

ABA No.  121000248

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as L/C Issuer

 

Address for Notices:

Wells Fargo Bank, National Association

420 Montgomery Street

MAC A0101-096

San Francisco, CA 94104

Attention:  Thomas Gloger

Telephone: (415) 396-5939

Facsimile:  (415) 421-1352

Email:  glogert@wellsfargo.com

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Swingline
Bank

 

Domestic and Offshore Lending Office:

 

Wells Fargo Bank, National Association

201 Third Street, 8th Floor

MAC A0187-081

San Francisco, CA 94103

Attention:  Thomas Priftis

Telephone:  (415) 477-5339

 

3

 

Facsimile:  (415) 546-6353

Email:  priftist@wellsfargo.com

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, 

as a Revolving Lender and a Term B Lender

 

Domestic and Offshore Lending Office:

 

Wells Fargo Bank, National Association

201 Third Street, 8th Floor

MAC A0187-081

San Francisco, CA 94103

Attention:  Thomas Priftis

Telephone:  (415) 477-5339

Facsimile:  (415) 546-6353

Email:  priftist@wellsfargo.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

Wells Fargo Bank, National Association

420 Montgomery Street

MAC A0101-096

San Francisco, CA 94104

Attention:  Thomas Gloger

Telephone: (415) 396-5939

Facsimile:  (415) 421-1352

Email:  glogert@wellsfargo.com

 

4

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

Domestic and Offshore Lending Office:

 

GE Capital Corporation

500 W. Monroe

Chicago, IL 60661

Attention:  Lisa Labon

Telephone: (312) 441-7000

Facsimile:  (312) 463-3842

Email: lisa.labon@ge.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

GE Capital Corporation

6130 Stoneridge Mall Rd. #300

Pleasanton, CA 94588

Attention:  Carlos Elizondo

Telephone: (925) 730-6435

Facsimile:  (925) 730-6496

Email: Carlos.elizondo@ge.com

 

U.S. BANK NATIONAL ASSOCIATION

 

Domestic and Offshore Lending Office:

101 S. Capitol Blvd., Suite 807

Boise, ID 83702

Attention:  James W. Henken

Telephone: (208) 383-7823

Facsimile:  (208) 383-7574

Email: james.henken@usbank.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

U.S. Bank National Association

101 S. Capitol Blvd., Suite 807

Boise, ID 83702

Attention:  James W. Henken

Telephone: (208) 383-7823

Facsimile:  (208) 383-7574

Email: james.henken@usbank.com

 

5

 

UNION BANK OF CALIFORNIA, N.A.

 

Domestic and Offshore Lending Office:

 

Union Bank of California, N.A.

1980 Saturn Street

Monterey Park, CA 91755

Attention:  Shirley Davis

Telephone: (323) 720-2870

Facsimile:  (323) 724-6198

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

Union Bank of California, N.A.

350 California Street, 10th Floor

San Francisco, CA 94104

Attention:  Alan J. LeClair

Telephone: (415) 705-7185

Facsimile:  (415) 705-7111

 

6

 

LASALLE BUSINESS CREDIT, LLC

 

Domestic and Offshore Lending Office:

LaSalle Business Credit, LLC

135 S. LaSalle, Suite 425

Chicago, IL 60603

Attention:  Susan Hamilton

Telephone: (312) 904-0742

Facsimile:  (312) 904-6450

Email: susan.hamilton@abnamro.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

LaSalle Business Credit, LLC

135 S. LaSalle, Suite 425

Chicago, IL 60603

Attention:  Susan Hamilton

Telephone: (312) 904-0742

Facsimile:  (312) 904-6450

Email: susan.hamilton@abnamro.com

 

7

 

HARRIS NESBITT

 

Domestic and Offshore Lending Office:

 

Harris Bank

111 W. Monroe Street

Chicago, IL 60603

Attention:  Isabella Battista

Telephone: (312) 293-8458

Facsimile:  (312) 293-5852

Email: isabella.battista@harrisnesbitt.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

Harris Bank

111 W. Monroe Street

Chicago, IL 60603

Attention:  Isabella Battista

Telephone: (312) 293-8458

Facsimile:  (312) 293-5852

Email: isabella.battista@harrisnesbitt.com

 

8

 

WASHINGTON MUTUAL BANK

 

Domestic and Offshore Lending Office:

 

Washington Mutual Bank

350 S. Grand Avenue, Suite 3400

Los Angeles, CA 90071

Attention:  Adriana Campos

Telephone: (213) 217-4055

Facsimile:  (213) 217-4160

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

Washington Mutual Bank

350 S. Grand Avenue, Suite 3400

Los Angeles, CA 90071

Attention:  Stephen Mras

Telephone: (213) 217-4043

Facsimile:  (213) 217-4160

Email: Stephen.mras@wamu.net

 

9

 

BNP PARIBAS

 

Domestic and Offshore Lending Office:

 

BNP Paribas

San Francisco Branch

One Front Street, 23rd Floor

San Francisco, CA 94111

Attention:  Patricia Boussaroque

Telephone: (415) 772-1343

Facsimile:  (415) 398-8462

Email: patricia.boussaroque@americas.bnpparibas.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

BNP Paribas

San Francisco Branch

One Front Street, 23rd Floor

San Francisco, CA 94111

Attention:  Patricia Boussaroque

Telephone: (415) 772-1343

Facsimile:  (415) 398-8462

Email: patricia.boussaroque@americas.bnpparibas.com

 

10

 

WEST COAST BANK

 

Domestic and Offshore Lending Office:

 

West Coast Bank

301 Church Street NE 

P.O. Box 428

Salem, OR 97308

Attention:  Tim Johnson

Telephone: (503) 399-2951

Facsimile:  (503) 399-3937

Email: johnsont@wcb.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

West Coast Bank

301 Church Street NE

P.O. Box 428

Salem, OR 97308

Attention:  Tim Johnson

Telephone: (503) 399-2951

Facsimile:  (503) 399-3937

Email: johnsont@wcb.com

 

11

 

GUARANTY BANK

 

Domestic and Offshore Lending Office:

 

Guaranty Bank

333 Clay, Suite 4400

Houston, TX 77002

Attention:  Scott Brewer

Telephone: (713) 890-8859

Facsimile:  (713) 759-0765

Email: Scott.brewer@guarantygroup.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

Guaranty Bank

333 Clay, Suite 4400

Houston, TX 77002

Attention:  Scott Brewer

Telephone: (713) 890-8859

Facsimile:  (713) 759-0765

Email: Scott.brewer@guarantygroup.com

 

12

 

COMERICA WEST INCORPORATED

 

Domestic and Offshore Lending Office:

 

Comerica West Incorporated

3980 Howard Hughes Pkwy, Suite 350

Las Vegas, NV 89109

Attention:  regina McGuire

Telephone: (702) 791-4804

Facsimile:  (702) 791-2371

Email: rmcguire@comerica.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

Comerica West Incorporated

1920 Main Street, Suite 1150

Irvine, CA 92614

Attention:  John D. Bonifacio

Telephone: (949) 798-7243

Facsimile:  (949) 476-1222

Email: jdbonifacio@comerica.com

 

13

 

WHITNEY NATIONAL BANK

 

Domestic and Offshore Lending Office:

 

Whitney National Bank

228 St. Charles Avenue

New Orleans, LA 70130

Attention:  Edgar Santa Cruz

Telephone: (504) 552-4760

Facsimile:  (504) 552-4622

Email: esantacruz@whitneybank.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

Whitney National Bank

228 St. Charles Avenue

New Orleans, LA 70130

Attention:  Edgar Santa Cruz

Telephone: (504) 552-4760

Facsimile:  (504) 552-4622

Email: esantacruz@whitneybank.com

 

14

 

BANK LEUMI USA

 

Domestic and Offshore Lending Office:

 

Bank Leumi USA

420 Lexington Avenue, 10th Floor

New York, NY 10170

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

Bank Leumi USA

2247 S. Beverly Drive

Beverly Hills, CA 90211

Attention:  Jacques Delvoye

Telephone: (323) 966-4727

Facsimile:  (323) 966-4248

Email: delvoyej@bankleumiusa.com

 

15

 

IDB BANK

 

Domestic and Offshore Lending Office:

 

IDB Bank

9401 Wilshire Blvd., Suite 600

Beverly Hills, CA 90212

Attention:  Don McCrink, VP

Telephone: (310) 860-8330

Facsimile:  (310) 859-1190

Email: dmccrink@idbny.com

 

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):

 

IDB Bank

9401 Wilshire Blvd., Suite 600

Beverly Hills, CA 90212

Attention:  Don McCrink, VP

Telephone: (310) 860-8330

Facsimile:  (310) 859-1190

Email: dmccrink@idbny.com

 

16

 

ANNEX I

 

PRICING GRID

 

From the Effective Date until the last day of the
second complete fiscal quarter after the Effective Date (the “Initial Period”),
the Applicable Margin for Revolving Loans and the Applicable Fee Amount shall
be at Level 4.  Thereafter, the
Applicable Margin for Revolving Loans and the Applicable Fee Amount for any day
shall be the amount per annum set forth below based on the EBITDA Ratio set
forth in the most recently delivered Compliance Certificate delivered by
Holdings pursuant to Section 7.02(c) of the Credit Agreement.  Changes in the Applicable Margin for
Revolving Loans and the Applicable Fee Amount resulting from a change in the
EBITDA Ratio shall become effective on the date of delivery by Holdings to the
Administrative Agent of a new Compliance Certificate pursuant to Section 7.02(c),
except that no such change shall take effect until the end of the Initial
Period.  If Holdings shall fail to
deliver a Compliance Certificate and accompanying financial statements within
the number of days after the end of any fiscal quarter or fiscal year as
required pursuant to Section 7.02(c), the parties agree that the
Applicable Margin and the Applicable Fee Amount shall be fixed at Level 4 until
such time as Holdings delivers such new Compliance Certificate and accompanying
financial statements pursuant to Section 7.02(c).

 

	
  Level

  	
   

  	
  EBITDA
  Ratio

  	
   

  	
  Offshore

  Rate Spread

  	
   

  	
  Base Rate

  Spread

  	
   

  	
  Letter of

  Credit Fee

  	
   

  	
  Commitment

  Fee

  	
   

  
	
  Level 5

  	
   

  	
  greater than or equal to
  3.00:1.00

  	
   

  	
  3.000

  	
  %

  	
  1.750

  	
  %

  	
  3.000

  	
  %

  	
  0.625

  	
  %

  
	
  Level 4

  	
   

  	
  greater than or equal to 2.50:1.00 but less than
  3.00:1.00

  	
   

  	
  2.500

  	
  %

  	
  1.250

  	
  %

  	
  2.500

  	
  %

  	
  0.500

  	
  %

  
	
  Level 3

  	
   

  	
  greater than or equal to 2.00:1.00 but less than
  2.50:1.00

  	
   

  	
  2.000

  	
  %

  	
  0.750

  	
  %

  	
  2.000

  	
  %

  	
  0.375

  	
  %

  
	
  Level 2

  	
   

  	
  greater than or equal to 1.50:1.00 but less than
  2.00:1.00

  	
   

  	
  1.625

  	
  %

  	
  0.375

  	
  %

  	
  1.625

  	
  %

  	
  0.375

  	
  %

  
	
  Level 1

  	
   

  	
  less than 1.50:1.00

  	
   

  	
  1.250

  	
  %

  	
  0.000

  	
  %

  	
  1.250

  	
  %

  	
  0.375

  	
  %

  

 

1Exhibit 10.41

 

FIRST AMENDMENT

 

This First Amendment is entered into this 23rd day of
February 2004, by and between Building Materials Holding Corporation, a
Delaware corporation (“Company”) and Robert E. Mellor (“Executive”).

 

RECITALS

 

A.                                   The Company and
Executive entered into an Employment Agreement dated June 1, 2002 (the
“Agreement”) which provides for the employment of Executive by the Company.

 

B.                                     The compensation
policies of the Company with respect to incentive bonuses for executive
officers has changed and the parties desire to modify the Agreement to be
consistent with the compensation policies of the Company.

 

The parties hereby agree as follows effective January 1, 2004:

 

1.                                       Section 3.3(a)
and Section 3.3(b) of the Agreement is hereby amended to provide that
bonus and compensation under the LTIP shall not exceed 200% of Base Salary
respectively.

 

2.                                       All other
provisions of the Agreement remain in full force and effect.

 

This First Amendment is effective January 1, 2004 and is dated the
date first written above.

 

	
  Company:

  	
  Executive:

  
	
   

  	
   

  
	
  Building Materials Holding Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By 

  	
  /s/  Peter S. O’Neill

  	
   

  	
  By

  	
  /s/  Robert E. Mellor

  	
   

  
	
   

  	
  Peter S. O’Neill

  	
   

  	
   

  	
  Robert E. Mellor

  	
   

  
	
   

  	
  Chair of Compensation Committee

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]