Document:

Exhibit
10.1

 

 

BRIDGE
LOAN AGREEMENT

 

DATED
AS OF JUNE 5, 2008,

 

AMONG

 

DG
FASTCHANNEL, INC.,

 

THE
GUARANTORS FROM TIME TO TIME PARTIES HERETO,

 

THE
LENDERS FROM TIME TO TIME PARTIES HERETO,

 

AND

 

BANK
OF MONTREAL,

AS
ADMINISTRATIVE AGENT

 

 

BMO CAPITAL MARKETS, AS SOLE LEAD ARRANGER AND  SOLE BOOK RUNNER

 

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
  HEADING

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  THE
  CREDIT FACILITIES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Commitments

  	
   

  	
  1

  
	
  Section 1.2.

  	
   

  	
  Interest Rate

  	
   

  	
  1

  
	
  Section 1.3.

  	
   

  	
  Maturity of Loan

  	
   

  	
  2

  
	
  Section 1.4.

  	
   

  	
  Prepayments

  	
   

  	
  2

  
	
  Section 1.5.

  	
   

  	
  Default Rate

  	
   

  	
  3

  
	
  Section 1.6.

  	
   

  	
  Evidence of Indebtedness

  	
   

  	
  4

  
	
  Section 1.7.

  	
   

  	
  Substitution of Lenders

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  FEE

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Fee

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  PLACE
  AND APPLICATION OF PAYMENTS

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Place and Application of Payments

  	
   

  	
  5

  
	
  Section 3.2.

  	
   

  	
  Account Debit

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  GUARANTIES

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Guaranties

  	
   

  	
  6

  
	
  Section 4.2.

  	
   

  	
  Further Assurances

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  DEFINITIONS;
  INTERPRETATION

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Definitions

  	
   

  	
  6

  
	
  Section 5.2.

  	
   

  	
  Interpretation

  	
   

  	
  17

  
	
  Section 5.3.

  	
   

  	
  Change in Accounting Principles

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Organization and Qualification

  	
   

  	
  18

  
	
  Section 6.2.

  	
   

  	
  Subsidiaries

  	
   

  	
  18

  
	
  Section 6.3.

  	
   

  	
  Authority and Validity of
  Obligations

  	
   

  	
  18

  
	
  Section 6.4.

  	
   

  	
  Use of Proceeds; Margin Stock

  	
   

  	
  19

  
	
  Section 6.5.

  	
   

  	
  Financial Reports

  	
   

  	
  19

  
	
  Section 6.6.

  	
   

  	
  No Material Adverse Change

  	
   

  	
  19

  
	
  Section 6.7.

  	
   

  	
  Full Disclosure

  	
   

  	
  19

  
	
  Section 6.8.

  	
   

  	
  Trademarks, Franchises, and Licenses

  	
   

  	
  20

  
	
  Section 6.9.

  	
   

  	
  Governmental Authority and
  Licensing

  	
   

  	
  20

  
	
  Section 6.10.

  	
   

  	
  Good Title

  	
   

  	
  20

  
	
  Section 6.11.

  	
   

  	
  Litigation and Other Controversies

  	
   

  	
  20

  
	
  Section 6.12.

  	
   

  	
  Taxes

  	
   

  	
  20

  
	
  Section 6.13.

  	
   

  	
  Approvals

  	
   

  	
  20

  

 

i

 

	
  Section 6.14.

  	
   

  	
  Affiliate Transactions

  	
   

  	
  21

  
	
  Section 6.15.

  	
   

  	
  Investment Company

  	
   

  	
  21

  
	
  Section 6.16.

  	
   

  	
  ERISA

  	
   

  	
  21

  
	
  Section 6.17.

  	
   

  	
  Compliance with Laws

  	
   

  	
  21

  
	
  Section 6.18.

  	
   

  	
  Other Agreements

  	
   

  	
  22

  
	
  Section 6.19.

  	
   

  	
  Solvency

  	
   

  	
  22

  
	
  Section 6.20.

  	
   

  	
  No Broker Fees.

  	
   

  	
  22

  
	
  Section 6.21.

  	
   

  	
  No Default

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  CONDITIONS
  PRECEDENT

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  COVENANTS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Maintenance of Business

  	
   

  	
  25

  
	
  Section 8.2.

  	
   

  	
  Maintenance of Properties

  	
   

  	
  25

  
	
  Section 8.3.

  	
   

  	
  Taxes and Assessments

  	
   

  	
  26

  
	
  Section 8.4.

  	
   

  	
  Insurance

  	
   

  	
  26

  
	
  Section 8.5.

  	
   

  	
  Financial Reports

  	
   

  	
  26

  
	
  Section 8.6.

  	
   

  	
  Inspection

  	
   

  	
  28

  
	
  Section 8.7.

  	
   

  	
  Borrowings and Guaranties

  	
   

  	
  28

  
	
  Section 8.8.

  	
   

  	
  Liens

  	
   

  	
  29

  
	
  Section 8.9.

  	
   

  	
  Investments, Acquisitions, Loans
  and Advances

  	
   

  	
  30

  
	
  Section 8.10.

  	
   

  	
  Mergers, Consolidations and Sales

  	
   

  	
  32

  
	
  Section 8.11.

  	
   

  	
  Maintenance of Subsidiaries

  	
   

  	
  32

  
	
  Section 8.12.

  	
   

  	
  Dividends and Certain Other
  Restricted Payments

  	
   

  	
  33

  
	
  Section 8.13.

  	
   

  	
  ERISA

  	
   

  	
  33

  
	
  Section 8.14.

  	
   

  	
  Compliance with Laws

  	
   

  	
  33

  
	
  Section 8.15.

  	
   

  	
  Burdensome Contracts With
  Affiliates

  	
   

  	
  34

  
	
  Section 8.16.

  	
   

  	
  No Changes in Fiscal Year

  	
   

  	
  34

  
	
  Section 8.17.

  	
   

  	
  Formation of Subsidiaries

  	
   

  	
  34

  
	
  Section 8.18.

  	
   

  	
  Change in the Nature of Business

  	
   

  	
  34

  
	
  Section 8.19.

  	
   

  	
  Use of Proceeds

  	
   

  	
  34

  
	
  Section 8.20.

  	
   

  	
  No Restrictions

  	
   

  	
  35

  
	
  Section 8.21.

  	
   

  	
  Subordinated Debt

  	
   

  	
  35

  
	
  Section 8.22.

  	
   

  	
  Financial Covenants

  	
   

  	
  35

  
	
  Section 8.23

  	
   

  	
  Equity Offering

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  EVENTS
  OF DEFAULT AND REMEDIES

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Events of Default

  	
   

  	
  36

  
	
  Section 9.2.

  	
   

  	
  Non-Bankruptcy Defaults

  	
   

  	
  38

  
	
  Section 9.3.

  	
   

  	
  Bankruptcy Defaults

  	
   

  	
  38

  
	
  Section 9.4.

  	
   

  	
  Notice of Default

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  RESERVED

  	
   

  	
  38

  

 

ii

 

	
  SECTION 11.

  	
   

  	
  THE
  ADMINISTRATIVE AGENT

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Appointment and Authorization of
  Administrative Agent

  	
   

  	
  38

  
	
  Section 11.2.

  	
   

  	
  Administrative Agent and its
  Affiliates

  	
   

  	
  39

  
	
  Section 11.3.

  	
   

  	
  Action by Administrative Agent

  	
   

  	
  39

  
	
  Section 11.4.

  	
   

  	
  Consultation with Experts

  	
   

  	
  39

  
	
  Section 11.5.

  	
   

  	
  Liability of Administrative Agent;
  Credit Decision

  	
   

  	
  40

  
	
  Section 11.6.

  	
   

  	
  Indemnity

  	
   

  	
  40

  
	
  Section 11.7.

  	
   

  	
  Resignation of Administrative Agent
  and Successor Administrative Agent

  	
   

  	
  41

  
	
  Section 11.8.

  	
   

  	
  Designation of Additional Agents

  	
   

  	
  41

  
	
  Section 11.9.

  	
   

  	
  Authorization to Enter into, and
  Enforcement of, the Subordination Agreements

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
   

  	
  THE
  GUARANTEES

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
   

  	
  The Guarantees

  	
   

  	
  42

  
	
  Section 12.2.

  	
   

  	
  Guarantee Unconditional

  	
   

  	
  42

  
	
  Section 12.3.

  	
   

  	
  Discharge Only upon Payment in
  Full; Reinstatement in Certain Circumstances

  	
   

  	
  43

  
	
  Section 12.4.

  	
   

  	
  Subrogation

  	
   

  	
  43

  
	
  Section 12.5.

  	
   

  	
  Waivers

  	
   

  	
  44

  
	
  Section 12.6.

  	
   

  	
  Limit on Recovery

  	
   

  	
  44

  
	
  Section 12.7.

  	
   

  	
  Stay of Acceleration

  	
   

  	
  44

  
	
  Section 12.8.

  	
   

  	
  Benefit to Guarantors

  	
   

  	
  44

  
	
  Section 12.9.

  	
   

  	
  Guarantor Covenants

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
   

  	
  Withholding Taxes

  	
   

  	
  44

  
	
  Section 13.2.

  	
   

  	
  No Waiver, Cumulative Remedies

  	
   

  	
  46

  
	
  Section 13.3.

  	
   

  	
  Non-Business Days

  	
   

  	
  46

  
	
  Section 13.4.

  	
   

  	
  Documentary Taxes

  	
   

  	
  46

  
	
  Section 13.5.

  	
   

  	
  Survival of Representations

  	
   

  	
  46

  
	
  Section 13.6.

  	
   

  	
  Survival of Indemnities

  	
   

  	
  46

  
	
  Section 13.7.

  	
   

  	
  Sharing of Set-Off

  	
   

  	
  46

  
	
  Section 13.8.

  	
   

  	
  Notices

  	
   

  	
  47

  
	
  Section 13.9.

  	
   

  	
  Counterparts

  	
   

  	
  47

  
	
  Section 13.10.

  	
   

  	
  Successors and Assigns

  	
   

  	
  47

  
	
  Section 13.11.

  	
   

  	
  Participants

  	
   

  	
  48

  
	
  Section 13.12.

  	
   

  	
  Assignments

  	
   

  	
  48

  
	
  Section 13.13.

  	
   

  	
  Amendments

  	
   

  	
  50

  
	
  Section 13.14.

  	
   

  	
  Headings

  	
   

  	
  50

  
	
  Section 13.15.

  	
   

  	
  Costs and Expenses; Indemnification

  	
   

  	
  50

  
	
  Section 13.16.

  	
   

  	
  Set-off

  	
   

  	
  52

  
	
  Section 13.17.

  	
   

  	
  Entire Agreement

  	
   

  	
  52

  
	
  Section 13.18.

  	
   

  	
  Governing Law

  	
   

  	
  52

  
	
  Section 13.19.

  	
   

  	
  Severability of Provisions

  	
   

  	
  52

  

 

iii

 

	
  Section 13.20.

  	
   

  	
  Excess Interest

  	
   

  	
  52

  
	
  Section 13.21.

  	
   

  	
  Construction

  	
   

  	
  53

  
	
  Section 13.22.

  	
   

  	
  Lender’s Obligations Several

  	
   

  	
  53

  
	
  Section 13.23.

  	
   

  	
  Submission to Jurisdiction; Waiver
  of Jury Trial

  	
   

  	
  53

  
	
  Section 13.24.

  	
   

  	
  USA Patriot Act

  	
   

  	
  54

  
	
  Section 13.25.

  	
   

  	
  Confidentiality

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Page

  	
   

  	
   

  	
   

  	
  S-1

  

 

	
  EXHIBIT A

  	
  —

  	
  Notice of
  Continuation/Conversion

  	
   

  	
   

  
	
  EXHIBIT B

  	
  —

  	
  Note

  	
   

  	
   

  
	
  EXHIBIT C

  	
  —

  	
  Compliance Certificate

  	
   

  	
   

  
	
  EXHIBIT D

  	
  —

  	
  Additional Guarantor
  Supplement

  	
   

  	
   

  
	
  EXHIBIT E

  	
  —

  	
  Assignment and
  Acceptance

  	
   

  	
   

  
	
  EXHIBIT F

  	
  —

  	
  Form of
  Subordination Agreement

  	
   

  	
   

  
	
  SCHEDULE 1

  	
  —

  	
  Commitments

  	
   

  	
   

  
	
  SCHEDULE 6.2

  	
  —

  	
  Subsidiaries

  	
   

  	
   

  
	
  SCHEDULE 6.11

  	
  —

  	
  Litigation

  	
   

  	
   

  
	
  SCHEDULE 6.14

  	
  —

  	
  Affiliate Transactions

  	
   

  	
   

  
	
  SCHEDULE 8.7

  	
  —

  	
  Indebtedness

  	
   

  	
   

  
	
  SCHEDULE 8.8

  	
  —

  	
  Liens

  	
   

  	
   

  
	
  SCHEDULE 8.9

  	
  —

  	
  Existing Investments

  	
   

  	
   

  

 

iv

 

BRIDGE LOAN AGREEMENT

 

This Bridge Loan Agreement is entered into as of June 5, 2008, by
and among DG FASTCHANNEL, INC., a Delaware corporation (the “Borrower”), the direct and indirect Subsidiaries of the
Borrower from time to time party to this Agreement, as Guarantors, the several
financial institutions from time to time party to this Agreement, as Lenders,
and BANK OF MONTREAL, a Canadian chartered bank acting through its Chicago
branch, as Administrative Agent as provided herein.  All capitalized terms used herein without
definition shall have the same meanings herein as such terms are defined in
Section 5.1 hereof.

 

PRELIMINARY
STATEMENT

 

(A)                              The
Borrower has requested, and the Lenders have agreed to extend a subordinated
bridge term loan on the terms and conditions of this Agreement.

 

(B)                                It
is a condition to the obligations of the Lenders and the effectiveness of this
Agreement that, among other things, the Vyvx Acquisition is consummated
pursuant to the Vyvx Asset Purchase Agreement.

 

(C)                                The
provisions of this Agreement and the Senior Credit Agreement are (as between
the Lenders and the “Lenders” under
the Senior Credit Agreement) subject to the provisions of a Subordination
Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and subject to the terms and conditions
hereof and on the basis of the representations and warranties herein set forth,
the Borrower, the Guarantors, the Lenders, and the Administrative Agent hereby
agree as follows:

 

SECTION 1.                                                 THE CREDIT FACILITIES.

 

Section 1.1.                                Commitments.  Subject to the terms and conditions hereof,
each Lender, by its acceptance hereof, severally agrees to make a loan
(individually a “Loan” and collectively for all
the Lenders the “Loans”) in U.S. Dollars to
the Borrower in the amount of such Lender’s Commitment.  The Loans shall be advanced in a single
Borrowing on the Closing Date and shall be made ratably by the Lenders in
proportion to their respective Loan Percentages, at which time the Commitments
shall expire.  No amount repaid or
prepaid on any Loan may be borrowed again.

 

Section 1.2.                                Interest
Rate.  Interest on the Loans and
Notes shall accrue at a rate per annum equal to the lesser of (i) 11% plus the Applicable Margin and (ii) the Interest Rate
Cap, payable quarterly in arrears on each Interest Payment Date, until the
Loans and Notes shall have been paid in full in cash; provided
that if the interest rate as computed shall exceed 14%, the Borrower shall have
the right to defer the payment of the accrued interest in excess of 14% (the “PIK Interest”) and add it to the principal amount of the
Loans.  The PIK Interest when so added 

 

 

to the principal amount of the Loans shall itself bear
interest and be due and payable on the Maturity Date.  Interest shall be computed on the basis of a
360-day year of twelve 30-days months.

 

Section 1.3.                                Maturity
of Loan.  The Borrower shall repay
all principal and interest not sooner paid on the Loans on the Maturity
Date.  Each principal payment shall be
applied to the Lenders holding the Loans pro rata based
upon their Loan Percentages.

 

Section 1.4.                                Prepayments.  (a) Optional.  The Borrower may prepay in whole or in part
(but, if in part, then in an amount not less than $500,000) the Loans at any
time upon three (3) Business Days prior notice by the Borrower to the
Administrative Agent (or, in any case, such shorter period of time then agreed
to by the Administrative Agent), such prepayment to be made by the payment of
the principal amount to be prepaid and accrued interest thereon to the date
fixed for prepayment.

 

(b)                                 Mandatory. 
(i) If the Borrower or any Subsidiary shall at any time or from
time to time make or agree to make a Disposition or shall suffer an Event of
Loss with respect to any Property, then the Borrower shall promptly notify the
Administrative Agent of such proposed Disposition or Event of Loss (including
the amount of the estimated Net Cash Proceeds to be received by the Borrower or
such Subsidiary in respect thereof) and, promptly upon receipt by the Borrower
or such Subsidiary of the Net Cash Proceeds of such Disposition or Event of
Loss, the Borrower shall prepay the Obligations in an aggregate amount equal to
100% of the amount of all such Net Cash Proceeds; provided
that (x) so long as no Default or Event of Default then exists, this
subsection shall not require any such prepayment with respect to Net Cash
Proceeds received on account of an Event of Loss so long as such Net Cash
Proceeds are applied to replace or restore the relevant Property, (y) this
subsection shall not require any such prepayment with respect to Net Cash
Proceeds received on account of Dispositions during any fiscal year of the
Borrower not exceeding $500,000 in the aggregate so long as no Default or Event
of Default then exists, and (z) in the case of any Disposition not covered
by clause (y) above, so long as no Default or Event of Default then
exists, if the Borrower states in its notice of such event that the Borrower or
the relevant Subsidiary intends to reinvest, within ninety (90) days of the
applicable Disposition, the Net Cash Proceeds thereof in assets similar to the
assets which were subject to such Disposition, then the Borrower shall not be
required to make a mandatory prepayment under this subsection in respect of
such Net Cash Proceeds to the extent such Net Cash Proceeds are actually
reinvested in such similar assets with such 90-day period.  Promptly after the end of such 90-day period,
the Borrower shall notify the Administrative Agent whether the Borrower or such
Subsidiary has reinvested such Net Cash Proceeds in such similar assets, and,
to the extent such Net Cash Proceeds have not been so reinvested, the Borrower
shall promptly prepay the Obligations in the amount of such Net Cash Proceeds
not so reinvested.  The amount of each
such prepayment shall be applied first to the obligations of the Borrower under
the Senior Credit Agreement in accordance with the Senior Credit Agreement and
then to the outstanding Loans hereunder.  If the Administrative Agent or the
Required Lenders so request, all proceeds of such Disposition or Event of Loss
shall be deposited with the Administrative Agent (or its agent) and held by it
in the Collateral Account.  So long as no
Default or Event of Default exists, the Administrative Agent is authorized to
disburse amounts representing such proceeds from one or more separate
collateral accounts (each such account, and the credit balances, properties,
and any 

 

2

 

investments from time to time held therein, and any
substitutions for such account, any certificate of deposit or other instrument
evidencing any of the foregoing and all proceeds of and earnings on any of the
foregoing being collectively called the “Collateral Account”)
to or at the Borrower’s direction for application to or reimbursement for the
costs of replacing, rebuilding or restoring such Property.

 

(ii)                                  If
after the Closing Date the Borrower or any Subsidiary shall issue any
Indebtedness for Borrowed Money, other than Indebtedness for Borrowed Money
permitted by Section 8.7 hereof, the Borrower shall promptly notify the
Administrative Agent of the estimated Net Cash Proceeds of such issuance to be
received by or for the account of the Borrower or such Subsidiary in respect
thereof.  Promptly upon receipt by the
Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the Borrower
shall prepay the Obligations in an aggregate amount equal to 100% of the amount
of such Net Cash Proceeds.  The amount of
each such prepayment shall be applied first to the obligations of the Borrower
under the Senior Credit Agreement in accordance with the Senior Credit
Agreement and then to the outstanding Loans hereunder.  The Borrower acknowledges that its
performance hereunder shall not limit the rights and remedies of the Lenders
for any breach of Section 8.7 hereof or any other terms of the Loan
Documents.

 

(iii)                               If
after the Closing Date the Borrower or any Subsidiary shall issue new equity
securities (whether common or preferred stock or otherwise), other than equity
securities issued in connection with the exercise of employee stock options or
issue any Subordinated Debt, the Borrower shall promptly notify the
Administrative Agent of the estimated Net Cash Proceeds of such issuance to be
received by or for the account of the Borrower or such Subsidiary in respect
thereof.  Promptly upon receipt by the
Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the Borrower
shall prepay the Obligations in an aggregate amount equal to 100% of the amount
of such Net Cash Proceeds.  The Borrower
acknowledges that its performance hereunder shall not limit the rights and
remedies of the Lenders for any breach of Section 8.11 (Maintenance of
Subsidiaries), Section 8.7 (Borrowings and Guaranties), or
Section 9.1(i) (Change of Control) hereof or any other terms of the
Loan Documents.

 

(iv)                              Each
prepayment of Loans under this Section 1.4(b) shall be made by the
payment of the principal amount to be prepaid and accrued interest thereon to
the date of prepayment.

 

(c)                                  No
amount of the Loans paid or prepaid may be reborrowed.

 

Section 1.5.                                Default
Rate.  Notwithstanding anything to
the contrary contained herein, while any Event of Default exists or after
acceleration, the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
Loans at a rate per annum equal to the sum of two percent (2%) plus the rate otherwise applicable to such Loan; provided, however, that in the absence of acceleration, any
adjustments pursuant to this Section shall be made at the election of the
Administrative Agent, acting at the request or with the consent of the Required
Lenders, with written notice to the Borrower. 
While any Event of Default exists or after acceleration, interest shall
be paid on demand of the Administrative Agent at the request or with the
consent of the Required Lenders.

 

3

 

Section 1.6.                                Evidence
of Indebtedness.  (a) Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

 

(b)                                 The
Administrative Agent shall also maintain accounts in which it will record (i) the
amount of each Loan made hereunder, the type thereof and the Interest Period
with respect thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender’s share thereof.

 

(c)                                  The
entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie
evidence of the existence and amounts of the Obligations therein recorded; provided, however, that the failure of the Administrative
Agent or any Lender to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Obligations in
accordance with their terms.

 

(d)                                 Any
Lender may request that its Loan be evidenced by a promissory note or notes in
the form of Exhibit B being hereinafter referred to collectively as the “Notes” and individually as a “Note”).  In such event, the Borrower shall prepare,
execute and deliver to such Lender a Note payable to such Lender or its
registered assigns in the amount of the Commitment.  Thereafter, the Loans evidenced by such Note
or Notes and interest thereon shall at all times (including after any
assignment pursuant to Section 13.12) be represented by one or more Notes
payable to the order of the payee named therein or any assignee pursuant to
Section 13.12, except to the extent that any such Lender or assignee
subsequently returns any such Note for cancellation and requests that such
Loans once again be evidenced as described in subsections (a) and
(b) above.

 

Section 1.7.                                Substitution
of Lenders.  In the event a Lender
fails to consent to an amendment or waiver requested under Section 13.13
hereof at a time when the Required Lenders have approved such amendment or
waiver (any such Lender being hereinafter referred to as an “Affected Lender”), the Borrower may, in addition to any
other rights the Borrower may have hereunder or under applicable law, require,
at its expense, any such Affected Lender to assign, at par, without recourse,
all of its interest, rights, and obligations hereunder (including all of its
Commitment and the Loans and other amounts at any time owing to it hereunder
and the other Loan Documents) to an Eligible Assignee specified by the
Borrower, provided that (i) such assignment
shall not conflict with or violate any law, rule or regulation or order of
any court or other governmental authority, (ii) the Borrower shall have paid
to the Affected Lender all monies other than such principal owing to it
hereunder, and (iii) the assignment is entered into in accordance with,
and subject to the consents required by, Section 13.12 hereof (provided
any assignment fees and reimbursable expenses due thereunder shall be paid by
the Borrower).

 

4

 

SECTION 2.                                                 FEE.

 

Section 2.1.                                Fee.  The Borrower shall pay to the Administrative
Agent, for its own use and benefit, the fees agreed to between the
Administrative Agent and the Borrower in a fee letter dated December 19,
2007, or as otherwise agreed to in writing between them.

 

SECTION 3.                                                 PLACE AND APPLICATION OF PAYMENTS.

 

Section 3.1.                                Place
and Application of Payments.  All
payments of principal of and interest on the Loans, and of all other
Obligations payable by the Borrower under this Agreement and the other Loan
Documents, shall be made by the Borrower to the Administrative Agent by no
later than 1:00 p.m. (Chicago time) on the due date thereof at the office
of the Administrative Agent in Chicago, Illinois (or such other location as the
Administrative Agent may designate to the Borrower), for the benefit of the
Lender(s) entitled thereto.  Any
payments received after such time shall be deemed to have been received by the
Administrative Agent on the next Business Day. 
All such payments shall be made in U.S. Dollars, in immediately
available funds at the place of payment, in each case without set-off or counterclaim.  The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest on Loans and like funds relating to the payment of any
other amount payable to any Lender to such Lender, in each case to be applied
in accordance with the terms of this Agreement. 
If the Administrative Agent causes amounts to be distributed to the
Lenders in reliance upon the assumption that the Borrower will make a scheduled
payment and such scheduled payment is not so made, each Lender shall, on demand,
repay to the Administrative Agent the amount distributed to such Lender
together with interest thereon in respect of each day during the period
commencing on the date such amount was distributed to such Lender and ending on
(but excluding) the date such Lender repays such amount to the Administrative
Agent, at a rate per annum equal to: 
(i) from the date the distribution was made to the date two
(2) Business Days after payment by such Lender is due hereunder, the
Federal Funds Rate for each such day and (ii) from the date two
(2) Business Days after the date such payment is due from such Lender to
the date such payment is made by such Lender, the Base Rate in effect for each
such day.

 

Anything contained herein to the contrary notwithstanding (including,
without limitation, Section 1.4(b) hereof), all payments and
collections received in respect of the Obligations, in each instance, by the
Administrative Agent or any of the Lenders after acceleration or the final
maturity of the Obligations or termination of the Commitments as a result of an
Event of Default shall be remitted to the Administrative Agent and distributed
as follows:

 

(a)                                  first,
to the payment of any outstanding costs and expenses incurred by the
Administrative Agent in protecting, preserving or enforcing rights under the
Loan Documents, and in any event including all costs and expenses of a
character which the Borrower has agreed to pay the Administrative Agent under
Section 13.15 hereof (such funds to be retained by the Administrative
Agent for its own account unless it has previously been reimbursed for such
costs and expenses by the Lenders, in which event such amounts shall be
remitted to the Lenders to reimburse them for payments theretofore made to the
Administrative Agent);

 

5

 

(b)                                 second,
to the payment of any outstanding interest and fees due under the Loan
Documents to be allocated pro rata in
accordance with the aggregate unpaid amounts owing to each holder thereof;

 

(c)                                  third,
to the payment of principal on the Loans; and

 

(d)                                 finally,
to the Borrower or whoever else may be lawfully entitled thereto.

 

Section 3.2.                                Account
Debit.   The Borrower hereby irrevocably authorizes the
Administrative Agent to charge any of the Borrower’s deposit accounts
maintained with the Administrative Agent for the amounts from time to time
necessary to pay any then due Obligations; provided that  the Borrower acknowledges and agrees that the
Administrative Agent shall not be under an obligation to do so and the
Administrative Agent shall not incur any liability to the Borrower or any other
Person for the Administrative Agent’s failure to do so.

 

SECTION 4.                                                 GUARANTIES.

 

Section 4.1.                                Guaranties.  The payment and performance of the
Obligations, shall at all times be guaranteed by each direct and indirect
Domestic Subsidiary of the Borrower pursuant to Section 12 hereof or
pursuant to one or more guaranty agreements in form and substance acceptable to
the Administrative Agent, as the same may be amended, modified or supplemented
from time to time (individually a “Guaranty” and
collectively the “Guaranties” and each such
Subsidiary executing and delivering this Agreement as a Guarantor (including
any Subsidiary hereafter executing and delivering an Additional Guarantor
Supplement in the form called for by Section 12 hereof) or a separate
Guaranty being referred to herein as a “Guarantor” and
collectively the “Guarantors”).

 

Section 4.2.                                Further
Assurances.  In the event the
Borrower or any Guarantor forms or acquires any other Subsidiary after the date
hereof, except as otherwise provided in Section 4.1 above, the Borrower
shall promptly upon such formation or acquisition cause such newly formed or
acquired Subsidiary to execute a Guaranty as the Administrative Agent may then
require, and the Borrower shall also deliver to the Administrative Agent, or
cause such Subsidiary to deliver to the Administrative Agent, at the Borrower’s
cost and expense, such other instruments, documents, certificates, and opinions
reasonably required by the Administrative Agent in connection therewith.

 

SECTION 5.                                                 DEFINITIONS; INTERPRETATION.

 

Section 5.1.                                Definitions.  The following terms when used herein shall
have the following meanings:

 

“Acquired Business” means the
entity or assets acquired by the Borrower or a Subsidiary in an Acquisition,
whether before or after the date hereof.

 

“Acquisition” means any
transaction or series of related transactions for the purpose of or resulting,
directly or indirectly, in (a) the acquisition of all or substantially all
of the assets of a 

 

6

 

Person, or of any business or division of a Person,
(b) the acquisition of in excess of 50% of the capital stock, partnership
interests, membership interests or equity of any Person (other than a Person
that is a Subsidiary), or otherwise causing any Person to become a Subsidiary,
or (c) a merger or consolidation or any other combination with another
Person (other than a Person that is a Subsidiary) provided that the Borrower or
the Subsidiary is the surviving entity.

 

“Adjusted EBITDA” means, with
reference to any period, Net Income for such period plus
all amounts deducted in arriving at such Net Income amount in respect of
(a) Interest Expense for such period, (b) federal, state, and local
income taxes for such period, (c) depreciation of fixed assets and
amortization of intangible assets for such period, (d) Transactions Costs,
(e) any non-recurring costs and extraordinary expenses approved by the Administrative
Agent in its sole discretion, (f) restructuring charges and any other
items approved by the Administrative Agent in its sole reasonable discretion, plus (g) synergies related to a Permitted Acquisition
approved by the Administrative Agent in its sole reasonable discretion; provided that Adjusted EBITDA shall be (i) $10,053,000  for the three months ended June 30, 2007,
(ii) $9,247,000 for the three months ended September 30, 2007,
and (iii) $10,267,000 for the three months ended
December 31, 2007; provided, further
that there shall be included in such determination for such period all such
amounts attributable to any Person acquired during such period pursuant to a
Permitted Acquisition to the extent not subsequently sold or otherwise disposed
of during such period.

 

“Administrative Agent” means Bank
of Montreal, in is capacity as Administrative Agent hereunder, and any
successor in such capacity pursuant to Section 11.7 hereof.

 

“Administrative Questionnaire” means
an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means any Person
directly or indirectly controlling or controlled by, or under direct or
indirect common control with, another Person. 
A Person shall be deemed to control another Person for purposes of this
definition if such 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, common directors,
trustees or officers, by contract or otherwise; provided
that, in any event for purposes of this definition, any Person that
owns, directly or indirectly, 5% or more of the securities having the ordinary
voting power for the election of directors or governing body of a corporation
or 5% or more of the partnership or other ownership interest of any other
Person (other than as a limited partner of such other Person) will be deemed to
control such corporation or other Person.

 

“Agreement” means this Bridge
Loan Agreement, as the same may be amended, modified, restated or supplemented
from time to time pursuant to the terms hereof.

 

7

 

“Applicable Margin” means the
rates per annum shown in accordance with the following schedule:

 

	
  FROM AND INCLUDING

  	
   

  	
  TO AND INCLUDING:

  	
   

  	
  APPLICABLE MARGIN

  SHALL BE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  the date hereof

  	
   

  	
  August 5, 2008

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 6, 2008

  	
   

  	
  September 5, 2008

  	
   

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 6, 2008

  	
   

  	
  October 5, 2008

  	
   

  	
  1.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  October 6, 2008

  	
   

  	
  November 5, 2008

  	
   

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  November 6, 2008

  	
   

  	
  December 5, 2008

  	
   

  	
  2.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 6, 2008

  	
   

  	
  January 5, 2009

  	
   

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 6, 2009

  	
   

  	
  February 5, 2009

  	
   

  	
  3.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  February 6, 2009

  	
   

  	
  March 5, 2009

  	
   

  	
  3.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 6, 2009

  	
   

  	
  and thereafter

  	
   

  	
  4.00

  	
  %

  

 

“Approved Fund” means any Fund
that is administered or managed by (a) a Lender, (b) an Affiliate of
a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

 

“Assignment and Acceptance” means
an assignment and acceptance entered into by a Lender and an Eligible Assignee
(with the consent of any party whose consent is required by Section 13.12
hereof), and accepted by the Administrative Agent, in substantially the form of
Exhibit E or any other form approved by the Administrative Agent.

 

“Base Rate” means for any day the
greater of:  (i) the rate of
interest announced or otherwise established by the Administrative Agent from
time to time as its prime commercial rate, or its equivalent, for U.S. Dollar
loans to borrowers located in the United States as in effect on such day, with
any change in the Base Rate resulting from a change in said prime commercial
rate to be effective as of the date of the relevant change in said prime
commercial rate (it being acknowledged and agreed that such rate may not be the
Administrative Agent’s best or lowest rate) and (ii) the sum of
(x) the rate determined by the Administrative Agent to be the average
(rounded upward, if necessary, to the next higher 1/100 of 1%) of the rates per
annum quoted to the Administrative Agent at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such day (or, if
such day is not a Business Day, on the immediately preceding Business Day) by
two or more Federal funds brokers selected by the Administrative Agent for sale
to the Administrative Agent at face value of Federal funds in the secondary
market in an 

 

8

 

amount equal or comparable to the principal amount for
which such rate is being determined, plus
(y) 1/2 of 1%.

 

“Borrower” is defined in the
introductory paragraph of this Agreement.

 

“Business Day” means any day
(other than a Saturday or Sunday) on which banks are not authorized or required
to close in Chicago, Illinois.

 

“Capital Expenditures” means,
with respect to any Person for any period, the aggregate amount of all
expenditures (whether paid in cash or accrued as a liability) by such Person
during that period for the acquisition or leasing (pursuant to a Capital Lease)
of fixed or capital assets or additions to property, plant, or equipment
(including replacements, capitalized repairs, and improvements) which should be
capitalized on the balance sheet of such Person in accordance with GAAP.

 

“Capital Lease” means any lease
of Property which in accordance with GAAP is required to be capitalized on the
balance sheet of the lessee.

 

“Capitalized Lease Obligation”
means, for any Person, the amount of the liability shown on the balance sheet
of such Person in respect of a Capital Lease determined in accordance with
GAAP.

 

“CERCLA” means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq., and
any future amendments.

 

“Change of Control” means any of
(a) the acquisition by any “person” or “group” (as such terms are used in
sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) at any time of beneficial ownership of 50% or more of the
outstanding capital stock or other equity interests of the Borrower on a
fully-diluted basis, other than acquisitions of such interests by Scott K.
Ginsburg, (b) the failure of individuals who are members of the board of
directors (or similar governing body) of the Borrower on the Closing Date
(together with any new or replacement directors whose initial nomination for
election was approved by a majority of the directors who were either directors
on the Closing Date or previously so approved) to constitute a majority of the board
of directors (or similar governing body) of the Borrower, or (c) any
“Change of Control” (or words of like import), as defined in any agreement or
indenture relating to any issue of Indebtedness for Borrowed Money of the
Borrower or any Subsidiary shall occur.

 

“Closing Date” means the date of
this Agreement or such later Business Day upon which each condition described
in Section 7 shall be satisfied or waived in a manner acceptable to the
Administrative Agent in its discretion.

 

“Code” means the Internal Revenue
Code of 1986, as amended, and any successor statute thereto.

 

9

 

“Collateral Account” is defined
in Section 1.4(b) hereof.

 

“Commitment” means, as to any
Lender, the obligation of such Lender to make its Loan on the Closing Date in
the principal amount not to exceed the amount set forth opposite such Lender’s
name on Schedule 1 attached hereto and made a part hereof.

 

“Controlled Group” means all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414 of the Code.

 

“Default” means any event or
condition the occurrence of which would, with the passage of time or the giving
of notice, or both, constitute an Event of Default.

 

“Disposition” means the sale,
lease, conveyance or other disposition of Property, other than sales or other
dispositions expressly permitted under  Sections 8.10(a),
8.10(b), or 8.10(d) hereof.

 

“Domestic Subsidiary” means a
Subsidiary that is not a Foreign Subsidiary.

 

“EBITDA” means, with reference to
any period, Net Income for such period, plus all
amounts deducted in arriving at such Net Income amount in respect of
(a) Interest Expense for such period, (b) federal, state, and local
income taxes for such period, and (c) depreciation of fixed assets and
amortization of intangible assets for such period.

 

“Eligible Assignee” means
(a) a Lender, (b) an Affiliate of a Lender, (c) an Approved
Fund, and (d) any other Person (other than a natural person) approved by
(i) the Administrative Agent and (ii) unless an Event of Default has
occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any Guarantor or any of the Borrower’s or such Guarantor’s
Affiliates or Subsidiaries.

 

“Eligible Line of Business” means
any business engaged in as of the date of this Agreement by the Borrower or any
of its Subsidiaries.

 

“Environmental Claim” means any
investigation, notice, violation, demand, allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, lien, proceeding or claim
(whether administrative, judicial or private in nature) arising
(a) pursuant to, or in connection with an actual or alleged violation of,
any Environmental Law, (b) in connection with any Hazardous Material,
(c) from any abatement, removal, remedial, corrective or response action
in connection with a Hazardous Material, Environmental Law or order of a
governmental authority or (d) from any actual or alleged damage, injury,
threat or harm to health, safety, natural resources or the environment.

 

“Environmental Law” means any
current or future Legal Requirement pertaining to (a) the protection of
health, safety and the indoor or outdoor environment, (b) the
conservation, management or use of natural resources and wildlife, (c) the
protection or use of surface water or 

 

10

 

groundwater, (d) the management, manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, Release, threatened Release, abatement, removal, remediation or
handling of, or exposure to, any Hazardous Material or (e) pollution
(including any Release to air, land, surface water or groundwater), and any
amendment, rule, regulation, order or directive issued thereunder.

 

“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, or any successor statute
thereto.

 

“Event of Default” means any
event or condition identified as such in Section 9.1 hereof.

 

“Event of Loss” means, with
respect to any Property, any of the following: 
(a) any loss, destruction or damage of such Property or
(b) any 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.

 

“Federal Funds Rate” means the
fluctuating interest rate per annum described in part (x) of
clause (ii) of the definition of Base Rate appearing in
Section 5.1(a) hereof.

 

“Fixed Charge Coverage Ratio”
means as of the last day of each fiscal quarter of the Borrower, the ratio of
(a) Adjusted EBITDA minus Capital
Expenditures (including any Capital Expenditures of any Acquired Business) for
the same four fiscal quarters then ended to (b) Fixed Charges for the same
four fiscal quarters then ended.

 

“Fixed Charges” means, with
reference to any period, the sum of (a) all scheduled payments of
principal made or to be made during such period with respect to Indebtedness
for Borrowed Money of the Borrower and its Subsidiaries, (b) cash Interest
Expense for such period, (c) federal, state, and local income taxes paid
or payable by the Borrower and its Subsidiaries in cash during such period,
(d) the aggregate amount of dividends paid in cash by the Borrower during
such period, and (e) the aggregate cash consideration paid by the Borrower
during such period in connection with any repurchases of its capital stock; provided (i) that for each period ending on or prior to
December 31, 2008, all amounts in clauses (a), (b) and (c) above
shall be calculated as such amounts paid from March 13, 2008 and then
annualized and (ii) for the quarterly period ending on
June 30, 2008 for purposes of clause (a) above, the
Borrower shall be deemed to have made scheduled principal payments on the “Term A Loans” (as defined in the Senior Credit Agreement)
in the amount equal to $3,250,000.

 

“Foreign Subsidiary” means each
Subsidiary which (a) is organized under the laws of a jurisdiction other
than the United States of America or any state thereof or the District of
Columbia, (b) conducts substantially all of its business outside of the
United States of America, and (c) has substantially all of its assets
outside of the United States of America.

 

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

 

11

 

“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.

 

“Guarantor” and “Guarantors” each is defined in Section 4.1 hereof.

 

“Guaranty” and “Guaranties” each is defined in Section 4.1 hereof.

 

“Hazardous Material” means any
substance, chemical, compound, product, solid, gas, liquid, waste, byproduct,
pollutant, contaminant or material which is hazardous or toxic, and includes,
without limitation, (a) asbestos, polychlorinated biphenyls and petroleum
(including crude oil or any fraction thereof) and (b) any material
classified or regulated as “hazardous” or “toxic” or words of like import
pursuant to an Environmental Law.

 

“Hazardous Material Activity”
means any activity, event or occurrence involving a Hazardous Material,
including, without limitation, the manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, Release, threatened Release,
abatement, removal, remediation, handling of or corrective or response action
to any Hazardous Material.

 

“Hostile Acquisition” means the
acquisition of the capital stock or other equity interests of a Person through
a tender offer or similar solicitation of the owners of such capital stock or
other equity interests which has not been approved (prior to such acquisition)
by resolutions of the Board of Directors of such Person or by similar action if
such Person is not a corporation, or as to which such approval has been
withdrawn.

 

“Indebtedness for Borrowed Money”
means for any Person (without duplication) (a) all indebtedness created,
assumed or incurred in any manner by such Person representing money borrowed
(including by the issuance of debt securities, including but not limited to
convertible debentures), (b) all indebtedness for the deferred purchase
price of property or services (other than trade accounts payable arising in the
ordinary course of business which are not more than thirty (30) days past due),
(c) all indebtedness secured by any Lien upon Property of such Person,
whether or not such Person has assumed or become liable for the payment of such
indebtedness, (d) all Capitalized Lease Obligations of such Person, and
(e) all obligations of such Person on or with respect to letters of
credit, bankers’ acceptances and other extensions of credit whether or not
representing obligations for borrowed money.

 

“Interest Expense” means, with
reference to any period, the sum of all interest charges (including imputed
interest charges with respect to Capitalized Lease Obligations and all
amortization of debt discount and expense) of the Borrower and its Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP.

 

“Interest Payment Date” means
each March 31, June 30, September 30 and December 31
(commencing with June 30, 2008) and the Maturity Date.

 

12

 

“Interest Rate Cap” means the
rate per annum equal to 15%.

 

“Legal Requirement” means any
treaty, convention, statute, law, regulation, ordinance, license, permit,
governmental approval, injunction, judgment, order, consent decree or other
requirement of any governmental authority, whether federal, state, or local.

 

“Lenders” means and includes the
financial institutions from time to time party to this Agreement, including
each assignee Lender pursuant to Section 13.12 hereof.

 

 “Lien” means
any mortgage, lien, security interest, pledge, charge or encumbrance of any
kind in respect of any Property, including the interests of a vendor or lessor
under any conditional sale, Capital Lease or other title retention arrangement.

 

“Loan” is defined in
Section 1.1 hereof.

 

“Loan Documents” means this
Agreement, the Notes (if any), the Guaranties, and each other instrument or
document to be delivered hereunder or thereunder or otherwise in connection
therewith.

 

 “Loan
Percentage” means, for each Lender, the percentage of the
Commitments represented by such Lender’s Commitment or, if the Commitments have
been terminated or have expired, the percentage held by such Lender of the
aggregate principal amount of all Loans then outstanding.

 

“Material Adverse Effect” means
(a) a material adverse change in, or material adverse effect upon, the
operations, business, Property, condition (financial or otherwise) or prospects
of the Borrower or of the Borrower and its Subsidiaries taken as a whole,
(b) a material impairment of the ability of the Borrower or any Subsidiary
to perform its material obligations under any Loan Document or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower or any Subsidiary of any Loan Document or
the rights and remedies of the Administrative Agent and the Lenders thereunder.

 

“Maturity Date” means
June 5, 2010.

 

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

 

“Net Cash Proceeds” means, as
applicable, (a) with respect to any Disposition by a Person, cash and cash
equivalent proceeds received by or for such Person’s account, net of
(i) reasonable costs, fees and expenses incurred in connection therewith,
(ii) income, sale, use or other transactional taxes paid or payable by
such Person as a result of such Disposition, and (iii) the principal
amount of, premium, if any, and interest on any Indebtedness for Borrowed Money
secured by a Lien on the asset (or a portion thereof) disposed of, which
Indebtedness for Borrowed Money is required to be repaid in connection with
such Disposition, (b) with respect to any Event of Loss of a Person, cash
and cash equivalent proceeds received by or for such Person’s account (whether
as a result of payments made under any applicable insurance policy therefor or
in connection with condemnation proceedings or otherwise), net of
(i) reasonable 

 

13

 

costs, fees and expenses incurred in connection with
the collection of such proceeds, awards or other payments and (ii) the
principal amount, premium, if any, and interest on any Indebtedness for
Borrowed Money secured by a Lien on the asset (or a portion thereof) subject to
such Event of Loss, which Indebtedness for Borrowed Money is required to be
repaid in connection with such Event of Loss, and (c) with respect to any
issuance of any Indebtedness for Borrowed Money by a Person,  cash and cash equivalent proceeds received by
or for such Person’s account, net of reasonable legal, underwriting, and other
fees and expenses incurred in connection therewith.

 

“Net Income” means, with
reference to any period, the net income (or net loss) of the Borrower and its
Subsidiaries for such period computed on a consolidated basis in accordance
with GAAP; provided that there shall be excluded
from Net Income (a) the net income (or net loss) of any Person accrued
prior to the date it becomes a Subsidiary of, or has merged into or
consolidated with, the Borrower or another Subsidiary, (b) the net income
(or net loss) of any Person (other than a Subsidiary) in which the Borrower or
any of its Subsidiaries has a equity interest in, except to the extent of the
amount of dividends or other distributions actually paid to the Borrower or any
of its Subsidiaries during such period, (c) any non-cash gains or non-cash
losses, (d) any other extraordinary gains or extraordinary losses,
(e) any results from discontinued operations and (f) impairment
charges with respect to any assets.

 

“Note” and “Notes”
each is defined in Section 1.6 hereof.

 

“Obligations” means all
obligations of the Borrower to pay principal and interest on the Loans, all
fees and charges payable hereunder, and all other payment obligations of the
Borrower or any of its Subsidiaries arising under or in relation to any Loan
Document, in each case whether now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired.

 

“PBGC” means the Pension Benefit
Guaranty Corporation or any Person succeeding to any or all of its functions
under ERISA.

 

“Person” means an individual,
partnership, corporation, limited liability company, association, trust,
unincorporated organization or any other entity or organization, including a
government or agency or political subdivision thereof.

 

“Plan” means any employee pension
benefit plan covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code that either (a) is
maintained by a member of the Controlled Group for employees of a member of the
Controlled Group or (b) is maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.

 

“Premises” means the real
property owned or leased by the Borrower or any Subsidiary.

 

14

 

“Property” means, as to any Person,
all types of real, personal, tangible, intangible or mixed property owned by
such Person whether or not included in the most recent balance sheet of such
Person and its subsidiaries under GAAP.

 

“RCRA” means the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§6901 et seq., and
any future amendments.

 

“Release” means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migration, dumping, or disposing into the indoor or outdoor
environment, including, without limitation, the abandonment or discarding of
barrels, drums, containers, tanks or other receptacles containing or previously
containing any Hazardous Material.

 

“Required Lenders” means, as of
the date of determination thereof, Lenders whose outstanding Loans constitute
(i) more than fifty percent (50%) of the sum of the total outstanding
Loans of the Lenders if there are more than two Lenders at such time, and
(ii) one hundred percent (100%) of the sum of the total outstanding Loans
of the Lenders if there are one or two Lenders at such time.

 

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

 

“Senior Agent” is defined in the
definition of Senior Credit Agreement set forth in this Section 5.1.

 

“Senior Credit Agreement” means
that certain Amended and Restated Credit Agreement dated as of
March 13, 2008 by and between the Borrower, the guarantors party
thereto, Bank of Montreal, as Administrative Agent for itself and the other
lenders and financial institutions party thereto (the “Senior
Agent”) and such lenders, as the same may be amended, modified,
supplemented or restated from time to time.

 

“Subordinated Debt” means
Indebtedness for Borrowed Money which is subordinated in right of payment to
the prior payment of the Obligations, Hedging Liability, and Funds Transfer and
Deposit Account Liability pursuant to subordination provisions approved in writing
by the Administrative Agent and is otherwise pursuant to documentation that is,
which is in an amount that is, and which contains interest rates, payment
terms, maturities, amortization schedules, covenants, defaults, remedies and
other material terms that are in form and substance, in each case satisfactory
to the Administrative Agent.

 

“Subordination Agreement” means
the agreement entered into by and among the Administrative Agent and the Senior
Agent in the form attached hereto as Exhibit F, and any agreement entered
into by and among the Administrative Agent and the holders of any Subordinated
Debt, in form and substance satisfactory to the Administrative Agent.

 

15

 

“Subsidiary” means, as to any
particular parent corporation or organization, any other corporation or
organization more than 50% of the outstanding Voting Stock of which is at the
time directly or indirectly owned by such parent corporation or organization or
by any one or more other entities which are themselves subsidiaries of such
parent corporation or organization. 
Unless otherwise expressly noted herein, the term “Subsidiary”
means a Subsidiary of the Borrower or of any of its direct or indirect
Subsidiaries.

 

“Total Funded Debt” means, at any
time the same is to be determined, the sum (but without duplication) of
(a) all Indebtedness for Borrowed Money of the Borrower and its
Subsidiaries at such time and (b) all Indebtedness for Borrowed Money of
any other Person which is directly or indirectly guaranteed by the Borrower or
any of its Subsidiaries or which the Borrower or any of its Subsidiaries has
agreed (contingently or otherwise) to purchase or otherwise acquire or in
respect of which the Borrower or any of its Subsidiaries has otherwise assured
a creditor against loss.

 

“Total Leverage Ratio” means, as
of the last day of any fiscal quarter of the Borrower, the ratio of Total
Funded Debt of the Borrower and its Subsidiaries as of the last day of such
fiscal quarter to Adjusted EBITDA of the Borrower and its Subsidiaries for the
period of four fiscal quarters then ended.

 

“Transaction Costs” means all
transaction fees, charges and other amounts related to this Agreement or any
Permitted Acquisitions as approved by the Administrative Agent (including,
without limitation, any financing fees, merger and acquisition fees, legal fees
and expenses, due diligence fees or any other fees and expenses in connection
therewith).

 

“Unfunded Vested Liabilities”  means,
for any Plan at any time, the amount (if any) by which the present value of all
vested nonforfeitable accrued benefits under such Plan exceeds the fair market
value of all Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the Controlled Group to
the PBGC or the Plan under Title IV of ERISA.

 

“U.S. Dollars” and “$” each means the lawful currency of the United States of
America.

 

“Voting Stock” of any Person
means capital stock or other equity interests of any class or classes (however
designated) having ordinary power for the election of directors or other
similar governing body of such Person, other than stock or other equity
interests having such power only by reason of the happening of a contingency.

 

“Vyvx” means collectively,
Level 3 Communications LLC, a Delaware limited liability company,
Wiltel Communications, LLC, a Delaware limited liability company and
Vyvx, LLC, a Delaware limited liability company.

 

“Vyvx Acquisition” means the
acquisition of substantially all of the assets of Vyvx upon satisfaction of the
conditions precedent under Section 7 hereof.

 

16

 

“Vyvx Asset Purchase Agreement” means
that certain Asset Purchase Agreement dated as of December 18, 2007, by
and among the Borrower and Vyvx, together with any amendments, modifications or
supplements thereto, in effect on the date hereof.

 

“Welfare Plan” means a “welfare
plan” as defined in Section 3(1) of ERISA.

 

“Wholly-owned Subsidiary” means a
Subsidiary of which all of the issued and outstanding shares of capital stock
(other than directors’ qualifying shares as required by law) or other equity
interests are owned by the Borrower and/or one or more Wholly-owned
Subsidiaries within the meaning of this definition.

 

Section 5.2.                                Interpretation.  The
foregoing definitions are equally applicable to both the singular and plural
forms of the terms defined.  The words “hereof”, “herein”, and “hereunder” and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  All
references to time of day herein are references to Chicago, Illinois, time
unless otherwise specifically provided. 
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP except where such
principles are inconsistent with the specific provisions of this Agreement.

 

Section 5.3.                                Change
in Accounting Principles.  If, after
the date of this Agreement, there shall occur any change in GAAP from those
used in the preparation of the financial statements referred to in
Section 6.5 hereof and such change shall result in a change in the method
of calculation of any financial covenant, standard or term found in this
Agreement, either the Borrower or the Required Lenders may by notice to the
Lenders and the Borrower, respectively, require that the Lenders and the
Borrower negotiate in good faith to amend such covenants, standards, and terms
so as equitably to reflect such change in accounting principles, with the
desired result being that the criteria for evaluating the financial condition
of the Borrower and its Subsidiaries shall be the same as if such change had
not been made.  No delay by the Borrower
or the Required Lenders in requiring such negotiation shall limit their right
to so require such a negotiation at any time after such a change in accounting
principles.  Until any such covenant,
standard, or term is amended in accordance with this Section 5.3,
financial covenants shall be computed and determined in accordance with GAAP in
effect prior to such change in accounting principles.  Without limiting the generality of the
foregoing, the Borrower shall neither be deemed to be in compliance with any financial
covenant hereunder nor out of compliance with any financial covenant hereunder
if such state of compliance or noncompliance, as the case may be, would not
exist but for the occurrence of a change in accounting principles after the
date hereof.

 

17

 

SECTION 6.                                                 REPRESENTATIONS AND WARRANTIES.

 

The Borrower represents and warrants to the Administrative Agent and
the Lenders as follows:

 

Section 6.1.                                          Organization
and Qualification.  The Borrower is
duly organized, validly existing, and in good standing as a corporation under
the laws of the State of Delaware, has full and adequate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect.

 

Section 6.2.                                          Subsidiaries.  Each Subsidiary is duly organized, validly
existing, and in good standing under the laws of the jurisdiction in which it
is organized, has full and adequate power to own its Property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the nature of the Property owned or leased by it requires such licensing
or qualifying, except where the failure to do so would not have a Material
Adverse Effect.  Schedule 6.2 hereto
identifies each Subsidiary, the jurisdiction of its organization, the
percentage of issued and outstanding shares of each class of its capital stock
or other equity interests owned by the Borrower and the other Subsidiaries and,
if such percentage is not 100% (excluding directors’ qualifying shares as
required by law), a description of each class of its authorized capital stock
and other equity interests and the number of shares of each class issued and
outstanding.  All of the outstanding
shares of capital stock and other equity interests of each Subsidiary are
validly issued and outstanding and fully paid and nonassessable, except as set
forth on Schedule 6.2, and all such shares and other equity interests
indicated on Schedule 6.2 as owned by the Borrower or another Subsidiary
are owned beneficially and of record, by the Borrower or such Subsidiary free
and clear of all Liens other than the Liens granted in favor of the Senior
Agent under and pursuant to the Senior Credit Agreement or the collateral documents
related thereto.  There are no
outstanding commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Subsidiary except as
set forth on Schedule 6.2.

 

Section 6.3.                                          Authority
and Validity of Obligations.  The
Borrower has full right and authority to enter into this Agreement and the
other Loan Documents executed by it, to make the borrowings herein provided for
and to perform all of its obligations hereunder and under the other Loan
Documents executed by it.  Each
Subsidiary has full right and authority to enter into the Loan Documents
executed by it, to guarantee the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability and to perform all of its obligations
under the Loan Documents executed by it. 
The Loan Documents delivered by the Borrower and its Subsidiaries have
been duly authorized, executed, and delivered by such Persons and constitute
valid and binding obligations of the Borrower and its Subsidiaries enforceable
against them in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors’ rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan
Documents do not, nor does the performance 

 

18

 

or observance by the Borrower or any Subsidiary of any
of the matters and things herein or therein provided for, (a) contravene
or constitute a default under any provision of the organizational documents (e.g., charter, certificate or articles of incorporation and
by-laws, certificate or articles of association and operating agreement,
partnership agreement, or other similar organizational documents) of the
Borrower or any Subsidiary, (b) contravene or constitute a default under
any provision of law, any judgment, injunction, order, decree, covenant,
indenture or agreement of binding upon or affecting the Borrower or any
Subsidiary or any of their Property, in each case where such contravention or
default, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect, or (c) result in the creation or imposition of
any Lien on any Property of the Borrower or any Subsidiary other than the Liens
granted in favor of the Senior Agent under and pursuant to the Senior Credit
Agreement or the collateral documents related thereto.

 

Section 6.4.                                          Use
of Proceeds; Margin Stock.  The
Borrower shall use the proceeds of the Loans to fund the Vyvx Acquisition and
for such other legal and proper purposes as are consistent with all applicable
laws.  Neither the Borrower nor any
Subsidiary is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System), and no part of the
proceeds of any Loan or any other extension of credit made hereunder will be
used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock.  Margin stock (as hereinabove defined)
constitutes less than 25% of the assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge or other restriction
hereunder.

 

Section 6.5.                                          Financial
Reports.   The consolidated
balance sheet of the Borrower and its Subsidiaries as at December 31, 2006
and December 31, 2007, and the related consolidated statements of income,
retained earnings and cash flows of the Borrower and its Subsidiaries for the
fiscal year then ended, and accompanying notes thereto, which financial
statements are accompanied by the audit report of KPMG LLP, independent public
accountants, heretofore furnished to the Administrative Agent and the Lenders,
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries as at said dates and the consolidated results of their operations
and cash flows for the periods then ended in conformity with GAAP applied on a
consistent basis.  Neither the Borrower
nor any Subsidiary has contingent liabilities which are material to it other
than as indicated on such financial statements or, with respect to future
periods, on the financial statements furnished pursuant to Section 8.5
hereof.

 

Section 6.6.                                          No
Material Adverse Change.  Since
December 31, 2006, there has been no change in the condition (financial or
otherwise) or business prospects of the Borrower or any Subsidiary except those
occurring in the ordinary course of business, none of which individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect.

 

Section 6.7.                                          Full
Disclosure.  The statements and
information furnished to the Administrative Agent and the Lenders in connection
with the negotiation of this Agreement and the other Loan Documents and the commitments
by the Lenders to provide all or part of the financing contemplated hereby do
not contain any untrue statements of a material fact or omit a material fact
necessary to make the material statements contained herein or therein not 

 

19

 

misleading, the Administrative Agent and the Lenders
acknowledging that as to any projections furnished to the Administrative Agent
and the Lenders, the Borrower only represents that the same were prepared on
the basis of information and estimates the Borrower believed to be reasonable
at the time.

 

Section 6.8.                                          Trademarks,
Franchises, and Licenses.  The
Borrower and its Subsidiaries own, possess, or have the right to use all
necessary patents, licenses, franchises, trademarks, trade names, trade styles,
copyrights, trade secrets, know how, and confidential commercial and
proprietary information to conduct their businesses as now conducted, without
known conflict with any patent, license, franchise, trademark, trade name,
trade style, copyright or other proprietary right of any other Person.

 

Section 6.9.                                          Governmental
Authority and Licensing.  The
Borrower and its Subsidiaries have received all licenses, permits, and
approvals of all federal, state, and local governmental authorities, if any,
necessary to conduct their businesses, in each case where the failure to obtain
or maintain the same could reasonably be expected to have a Material Adverse
Effect.  No investigation or proceeding
which, if adversely determined, could reasonably be expected to result in
revocation or denial of any material license, permit or approval is pending or,
to the knowledge of the Borrower, threatened.

 

Section 6.10.                                   Good
Title.  The Borrower and its
Subsidiaries have good and defensible title (or valid leasehold interests) to
their assets as reflected on the most recent consolidated balance sheet  of the Borrower and its Subsidiaries
furnished to the Administrative Agent and the Lenders (except for sales of
assets in the ordinary course of business), subject to no Liens other than such
thereof as are permitted by Section 8.8 hereof.

 

Section 6.11.                                   Litigation
and Other Controversies.  Except as
set forth on Schedule 6.11, there is no litigation or governmental or
arbitration proceeding or labor controversy pending, nor to the knowledge of
the Borrower threatened, against the Borrower or any Subsidiary or any of their
Property which if adversely determined, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

Section 6.12.                                   Taxes.  All tax returns required to be filed by the
Borrower or any Subsidiary in any jurisdiction have, in fact, been filed, and
all taxes, assessments, fees, and other governmental charges upon the Borrower
or any Subsidiary or upon any of its Property, income or franchises, which are
shown to be due and payable in such returns, have been paid, except such taxes,
assessments, fees and governmental charges, if any, as are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and as to which adequate reserves established in
accordance with GAAP have been provided. 
The Borrower does not know of any proposed additional tax assessment
against it or its Subsidiaries for which adequate provisions in accordance with
GAAP have not been made on their accounts. 
Adequate provisions in accordance with GAAP for taxes on the books of
the Borrower and each Subsidiary have been made for all open years, and for its
current fiscal period.

 

Section 6.13.                                   Approvals.  No authorization, consent, license or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any 

 

20

 

approval or consent of any other Person, is or will be
necessary to the valid execution, delivery or performance by the Borrower or
any Subsidiary of any Loan Document, except for such approvals which have been
obtained prior to the date of this Agreement and remain in full force and
effect.

 

Section 6.14.                                   Affiliate
Transactions.  Except as set forth on
Schedule 6.14, neither the Borrower nor any Subsidiary is a party to any
contracts or agreements with any of its Affiliates (other than with
Wholly-owned Subsidiaries) on terms and conditions which are less favorable to
the Borrower or such Subsidiary than would be usual and customary in similar
contracts or agreements between Persons not affiliated with each other.

 

Section 6.15.                                   Investment
Company.  Neither the Borrower nor
any Subsidiary is an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

 

Section 6.16.                                   ERISA.  The Borrower and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA. 
Neither the Borrower nor any Subsidiary has any contingent liabilities
with respect to any post-retirement benefits under a Welfare Plan, other than liability
for continuation coverage described in article 6 of Title I of ERISA.

 

Section 6.17.                                   Compliance
with Laws.  (a) The Borrower and
its Subsidiaries are in compliance with the requirements of all federal, state
and local laws, rules and regulations applicable to or pertaining to their
Property or business operations (including, without limitation, the
Occupational Safety and Health Act of 1970, the Americans with Disabilities Act
of 1990, and laws and regulations establishing quality criteria and standards
for air, water, land and toxic or hazardous wastes and substances), where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

(b)                                 Without
limiting the representations and warranties set forth in
Section 6.17(a) above, except for such matters, individually or in
the aggregate, which could not reasonably be expected to result in a Material
Adverse Effect, the Borrower represents and warrants that:  (i) the Borrower and its Subsidiaries,
and each of the Premises, comply in all material respects with all applicable
Environmental Laws; (ii) the Borrower and its Subsidiaries have obtained
all governmental approvals required for their operations and each of the
Premises by any applicable Environmental Law; (iii) the Borrower and its
Subsidiaries have not, and the Borrower has no knowledge of any other Person
who has, caused any Release, threatened Release or disposal of any Hazardous
Material at, on, about, or off any of the Premises in any material quantity
and, to the knowledge of the Borrower, none of the Premises are adversely
affected by any Release, threatened Release or disposal of a Hazardous Material
originating or emanating from any other property; (iv) none of the
Premises contain and have contained any: 
(1) underground storage tank, (2) material amounts of asbestos
containing building material, (3) landfills or dumps, (4) hazardous
waste management facility as defined pursuant to RCRA or any comparable state
law, or (5) site on or nominated for the National Priority List promulgated
pursuant to CERCLA 

 

21

 

or any state remedial priority list promulgated or
published pursuant to any comparable state law; (v) the Borrower and its
Subsidiaries have not used a material quantity of any Hazardous Material and
have conducted no Hazardous Material Activity at any of the Premises;
(vi) the Borrower and its Subsidiaries have no material liability for
response or corrective action, natural resource damage or other harm pursuant
to CERCLA, RCRA or any comparable state law; (vii) the Borrower and its
Subsidiaries are not subject to, have no notice or knowledge of and are not
required to give any notice of any Environmental Claim involving the Borrower
or any Subsidiary or any of the Premises, and there are no conditions or
occurrences at any of the Premises which could reasonably be anticipated to
form the basis for an Environmental Claim against the Borrower or any
Subsidiary or such Premises; (viii) none of the Premises are subject to
any, and the Borrower has no knowledge of any imminent restriction on the
ownership, occupancy, use or transferability of the Premises in connection with
any (1) Environmental Law or (2) Release, threatened Release or
disposal of a Hazardous Material; and (ix) there are no conditions or
circumstances at any of the Premises which pose an unreasonable risk to the
environment or the health or safety of Persons.

 

Section 6.18.                                   Other
Agreements.  Neither the Borrower nor
any Subsidiary is in default under the terms of any covenant, indenture or
agreement of or affecting such Person or any of its Property, which default if
uncured could reasonably be expected to have a Material Adverse Effect.

 

Section 6.19.                                   Solvency.  The Borrower and its Subsidiaries are
solvent, able to pay their debts as they become due, and have sufficient
capital to carry on their business and all businesses in which they are about
to engage.

 

Section 6.20.                                   No
Broker Fees. No broker’s or finder’s fee or commission will be payable with
respect hereto or any of the transactions contemplated thereby; and the
Borrower hereby agrees to indemnify the Administrative Agent and the Lenders
against, and agree that they will hold the Administrative Agent and the Lenders
harmless from, any claim, demand, or liability for any such broker’s or
finder’s fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable attorneys’ fees) arising in connection
with any such claim, demand, or liability.

 

Section 6.21.                                   No
Default.  No Default or Event of
Default has occurred and is continuing.

 

SECTION 7.                                                 CONDITIONS PRECEDENT.

 

The obligation of the Lenders to make the Loans hereunder is subject to
the following conditions precedent:

 

(a)   the
Administrative Agent shall have received this Agreement duly executed by the
Borrower and its Subsidiaries, as Guarantors, and the Lenders;

 

(b)   if
requested by any Lender, the Administrative Agent shall have received for such
Lender such Lender’s duly executed Notes of the Borrower dated the date hereof
and otherwise in compliance with the provisions of Section 1.6 hereof;

 

22

 

(c)   the
Administrative Agent shall have received evidence of insurance required to be
maintained hereunder;

 

(d)   the
Administrative Agent shall have received copies of the Borrower’s and each
Subsidiary’s articles of incorporation and bylaws (or comparable organizational
documents) and any amendments thereto, certified in each instance by its
Secretary or Assistant Secretary;

 

(e)   the
Administrative Agent shall have received copies of resolutions of the
Borrower’s and each Subsidiary’s Board of Directors (or similar governing body)
authorizing the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby, together with specimen signatures
of the persons authorized to execute such documents on the Borrower’s and each
Subsidiary’s behalf, all certified in each instance by its Secretary or
Assistant Secretary;

 

(f)   the
Administrative Agent shall have received copies of the certificates of good
standing for the Borrower and each Subsidiary (dated no earlier than
30 days prior to the date hereof) from the office of the secretary of the
state of its incorporation or organization and of each state in which it is
qualified to do business as a foreign corporation or organization;

 

(g)   the
Administrative Agent shall have received the initial fees called for by
Section 2 hereof;

 

(h)   the
Administrative Agent shall have received financing statement, tax, and judgment
lien search results against the Property of the Borrower and each Subsidiary evidencing
the absence of Liens on its Property except as permitted by Section 8.8
hereof;

 

(i)   the
Administrative Agent shall have received the favorable written opinion of
counsel to the Borrower and each Subsidiary, in form and substance satisfactory
to the Administrative Agent;

 

(j)   the
Administrative Agent shall have received an executed Internal Revenue Service
Form W-9 for the Borrower; and

 

(k)   the
Administrative Agent and the Senior Agent shall have entered into a
Subordination Agreement in form and substance acceptable to the Administrative
Agent and the Lenders;

 

(l)   each
of the representations and warranties set forth herein shall be and remain true
and correct in all material respects as of the Closing Date, except to the
extent the same expressly relate to an earlier date; and

 

23

 

(m)   the
Administrative Agent shall have received evidence that the Borrower has
acquired substantially all of the assets of Vyvx, including without limitation,
satisfaction of the following conditions:

 

(i)   if a
new Subsidiary is formed or acquired as a result of or in connection with the
Vyvx Acquisition, the Borrower shall have complied with the requirements of
Section 4 hereof in connection therewith and shall deliver to the
Administrative Agent (A) certified resolutions of the Board of Directors
of such new Subsidiary authorizing the actions required by Section 4
hereof, (B) articles of incorporation certified to by the Secretary of
State of such new Subsidiaries state of incorporation, (C) by-laws certified
to by an authorized officer of such new Subsidiary, (D) a good standing
certificate of such new Subsidiary from the state of incorporation, and
(E) an opinion of counsel to such new Subsidiary;

 

(ii)   the
Administrative Agent shall have received audited financial statements for Vyvx
for the fiscal years ending December 31, 2006 and December 31, 2007,
and a closing balance sheet of the Borrower adjusted to give effect to the Vyvx
Acquisition in form and substance acceptable to the Administrative Agent;

 

(iii)   no
Material Adverse Effect (as defined in the Vyvx Asset Purchase Agreement) with
respect to Vyvx shall have occurred since September 30, 2007;

 

(iv)   the
Acquisition shall have been approved by Vyvx’s directors and shareholders (if
necessary), and all necessary legal and regulatory approvals with respect to
the Vyvx Acquisition shall have been obtained. 
There shall be no injunction, temporary restraining order or other legal
action in effect which would prohibit the closing of Vyvx Acquisition or the
closing and funding of any Loan in connection therewith;

 

(v)   the
Administrative Agent shall have received certificates or other evidence
reasonably acceptable to it of the solvency of the Borrower on a consolidated
basis after giving effect to the Vyvx Acquisition;

 

(vi)   after
giving effect to the Vyvx Acquisition the Borrower shall have not less than
$5,000,000 of Excess Availability as such term is defined and used in the
Senior Credit Agreement, provided that
accounts payable are at historically normal levels reasonably acceptable to the
Administrative Agent;

 

(vii)   the
Administrative Agent shall have received evidence reasonably satisfactory to
the Administrative Agent that (A) the Borrower’s pro forma Adjusted
EBTIDA for the twelve months ending immediately prior to the Vyvx Acquisition
is at least $50,000,000 and (B) that the Total Leverage Ratio and Senior
Leverage Ratio is less 3.5 to 1.0 and 2.5 to 1.0, respectively, calculated
based on the Adjusted EBITDA for the twelve months prior ending immediately
prior to the Vyvx Acquisition (assuming the indebtedness occurred at the time
of 

 

24

 

the Vyvx Acquisition was incurred on the first day of
such twelve month period and on a pro forma basis
after giving effect to the Vyvx Acquisition); provided
that, for purposes of determining compliance with each of the aforementioned
conditions, Adjusted EBITDA shall be calculated on a pro forma
basis to include EBITDA of Vyvx and the synergies related to the Vyvx Acquisition
with any such adjustments to EBITDA to be reasonably acceptable to the
Administrative Agent;

 

(viii)   the
Administrative Agent shall have received the Vyvx Asset Purchase Agreement and
the Vyvx Acquisition shall have been consummated (A) in accordance with
the Vyvx Asset Purchase Agreement and the related disclosure schedules and
exhibits thereto, without waiver or amendment thereof (other than any such
waivers or amendments (including, without limitation, with respect to any
representations and warranties in the Vyvx Asset Purchase Agreement) as are not
materially adverse to the Lenders) unless consented to by the Administrative
Agent (which consent shall not be unreasonably withheld or delayed) or
(B) on such other terms and conditions as are reasonably satisfactory to
the Administrative Agent; and

 

(ix)   the
Administrative Agent shall have received customary lien searches on the
Property of Vyvx evidencing the absence of liens on its property except for
liens permitted hereunder.

 

SECTION 8.                                                 COVENANTS.

 

The Borrower agrees that, so long as the Loans are outstanding and any
other credit is available to or is in use by the Borrower hereunder, except to
the extent compliance in any case or cases is waived in writing pursuant to the
terms of Section 13.13 hereof:

 

Section 8.1.                                          Maintenance
of Business.  The Borrower shall, and
shall cause each Subsidiary to, preserve and maintain its existence, except as
otherwise provided in Section 8.10(c) hereof.  The Borrower shall, and shall cause each
Subsidiary to, preserve and keep in force and effect all licenses, permits,
franchises, approvals, patents, trademarks, trade names, trade styles,
copyrights, and other proprietary rights necessary to the proper conduct of its
business where the failure to do so could reasonably be expected to have a
Material Adverse  Effect.

 

Section 8.2.                                          Maintenance
of Properties.  The Borrower shall,
and shall cause each Subsidiary to, maintain, preserve, and keep its property,
plant, and equipment in good repair, working order and condition (ordinary wear
and tear excepted), and shall from time to time make all needful and proper
repairs, renewals, replacements, additions, and betterments thereto so that at
all times the efficiency thereof shall be fully preserved and maintained, except
to the extent that, in the reasonable business judgment of such Person, any
such Property is no longer necessary for the proper conduct of the business of
such Person.

 

25

 

Section 8.3.                                Taxes
and Assessments.  The Borrower shall
duly pay and discharge, and shall cause each Subsidiary to duly pay and
discharge, all taxes, rates, assessments, fees, and governmental charges upon
or against it or its Property, in each case before the same become delinquent
and before penalties accrue thereon, unless and to the extent that the same are
being contested in good faith and by appropriate proceedings which prevent
enforcement of the matter under contest and adequate reserves are provided
therefor.

 

Section 8.4.                                Insurance.  The Borrower shall insure and keep insured,
and shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Borrower shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including, without limitation, business
interruption, employers’ and public liability risks) with good and responsible
insurance companies as and to the extent usually insured by Persons similarly
situated and conducting similar businesses. 
The Borrower shall, upon the request of the Administrative Agent,
furnish to the Administrative Agent and the Lenders a certificate setting forth
in summary form the nature and extent of the insurance maintained pursuant to
this Section.

 

Section 8.5.                                Financial
Reports.  The Borrower shall, and
shall cause each Subsidiary to, maintain a standard system of accounting in
accordance with GAAP and shall furnish to the Administrative Agent, and each
Lender such information respecting the business and financial condition of the
Borrower and each Subsidiary as the Administrative Agent or such Lender may
reasonably request; and without any request, shall furnish to the
Administrative Agent, and the Lenders:

 

(a)                                  as
soon as available, and in any event no later than forty-five (45) days after
the last day of each fiscal quarter of each fiscal year of the Borrower, a copy
of the consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the last day of such fiscal quarter and the consolidated and
consolidating statements of income, retained earnings, and cash flows of the
Borrower and its Subsidiaries for the fiscal quarter and for the fiscal
year-to-date period then ended, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in the
previous fiscal year, prepared by the Borrower in accordance with GAAP (subject
to the absence of footnote disclosures and year-end audit adjustments) and
certified to by its chief financial officer or another officer of the Borrower
acceptable to the Administrative Agent;

 

(b)                                 as
soon as available, and in any event no later than ninety (90) days after the
last day of each fiscal year of the Borrower, a copy of the consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as of the last
day of the fiscal year then ended and the consolidated and consolidating
statements of income, retained earnings, and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
each in reasonable detail showing in comparative form the figures for the
previous fiscal year, accompanied in the case of the consolidated financial
statements by an unqualified opinion of KPMG LLP or another

 

26

 

firm of independent public accountants of recognized
national standing, selected by the Borrower and reasonably satisfactory to the
Administrative Agent and the Required  Lenders, to
the effect that the consolidated financial statements have been prepared in
accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Borrower and its Subsidiaries as of the
close of such fiscal year and the results of their operations and cash flows
for the fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, such examination
included such tests of the accounting records and such other auditing
procedures as were considered necessary in the circumstances;

 

(c)                                  within
the period provided in subsection (b) above, the written statement of
the accountants who certified the audit report thereby required that in the
course of their audit they have obtained no knowledge of any Default or Event
of Default, or, if such accountants have obtained knowledge of any such Default
or Event of Default, they shall disclose in such statement the nature and
period of the existence thereof;

 

(d)                                 promptly
after receipt thereof, any additional written reports, management letters or
other detailed information contained in writing concerning significant aspects
of the Borrower’s or any Subsidiary’s operations and financial affairs given to
it by its independent public accountants;

 

(e)                                  promptly
after the sending or filing thereof, copies of each financial statement,
report, notice or proxy statement sent by the Borrower or any Subsidiary to its
stockholders or other equity holders, and copies of each regular, periodic or
special report, registration statement or prospectus (including all
Form 10-K, Form 10-Q and Form 8-K reports) filed by the Borrower
or any Subsidiary with any securities exchange or the Securities and Exchange
Commission or any successor agency;

 

(f)                                    promptly
after receipt thereof, a copy of each audit made by any regulatory agency of
the books and records of the Borrower or any Subsidiary or of notice of any
material noncompliance with any applicable law, regulation or guideline
relating to the Borrower or any Subsidiary, or its business;

 

(g)                                 as
soon as available, and in any event no later than thirty (30) days after the
beginning of each fiscal year of the Borrower, a copy of the Borrower’s
consolidated and consolidating business plan for such fiscal year, such
business plan to show the Borrower’s projected consolidated and consolidating
revenues, expenses and balance sheet on a quarter-by-quarter basis, such business
plan to be in reasonable detail prepared by the Borrower and in form
satisfactory to the Administrative Agent and the Required  Lenders
(which shall include a summary of all assumptions made in preparing such
business plan);

 

(h)                                 notice
of any Change of Control;

 

27

 

(i)                                     promptly
after knowledge thereof shall have come to the attention of any responsible
officer of the Borrower, written notice of (i) any threatened or pending
litigation or governmental or arbitration proceeding or labor controversy
against the Borrower or any Subsidiary or any of their Property which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect; (ii) the occurrence of any Default or Event of Default hereunder;
or (iii) any condition exists or the occurrence of an event that would
reasonably be expected to have a Material Adverse Effect; and

 

(j)                                     with
each of the financial statements delivered pursuant to
subsections (a) and (b) above, a written certificate in the form
attached hereto as Exhibit C signed by the chief financial officer of the
Borrower or another officer of the Borrower acceptable to the Administrative
Agent to the effect that to the best of such officer’s knowledge and belief no
Default or Event of Default has occurred during the period covered by such
statements or, if any such Default or Event of Default has occurred during such
period, setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Borrower or any Subsidiary to
remedy the same.  Such certificate shall
also set forth the calculations supporting such statements in respect of
Section 8.22  hereof.

 

Section 8.6.                                     Inspection.  The Borrower shall, and shall cause each
Subsidiary to, permit the Administrative Agent, and each Lender and each of
their duly authorized representatives and agents to visit and inspect any of
its Property, corporate books, and financial records, to examine and make
copies of its books of accounts and other financial records, and to discuss its
affairs, finances, and accounts with, and to be advised as to the same by, its
officers, employees and independent public accountants (and by this provision
the Borrower hereby authorizes such accountants to discuss with the
Administrative Agent, and such Lenders, the finances and affairs of the
Borrower and its Subsidiaries) at such reasonable times and intervals during
normal business hours as the Administrative Agent or any such Lender may
designate and, so long as no Default or Event of Default exists, with
reasonable prior notice to the Borrower.

 

Section 8.7.                                     Borrowings and Guaranties.  The Borrower shall not, nor shall it permit
any Subsidiary to, issue, incur, assume, create or have outstanding any
Indebtedness for Borrowed Money, or incur liabilities for interest rate,
currency, or commodity cap, collar, swap, or similar hedging arrangements, or
be or become liable as endorser, guarantor, surety or otherwise for any debt,
obligation or undertaking of any other Person, or otherwise agree to provide
funds for payment of the obligations of another, or supply funds thereto or
invest therein or otherwise assure a creditor of another against loss, or apply
for or become liable to the issuer of a letter of credit which supports an
obligation of another, or subordinate any claim or demand it may have to the
claim or demand of any other Person; provided, however,
that the foregoing shall not restrict nor operate to prevent:

 

(a)                                  the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability of the Borrower and its Subsidiaries owing to the Administrative
Agent and the Lenders (and their Affiliates);

 

28

 

(b)                                 purchase
money indebtedness and Capitalized Lease Obligations of the Borrower and its
Subsidiaries in an amount not to exceed [$5,500,000] in
the aggregate at any one time outstanding;

 

(c)                                  obligations
of the Borrower or any Subsidiary arising out of interest rate, foreign
currency, and commodity hedging agreements entered into with financial
institutions in connection with bona fide hedging activities in the ordinary
course of business and not for speculative purposes;

 

(d)                                 endorsement
of items for deposit or collection of commercial paper received in the ordinary
course of business;

 

(e)                                  intercompany
advances from time to time owing by any Guarantor to the Borrower or another
Guarantor or by the Borrower to a Guarantor in the ordinary course of business
to finance working capital needs;

 

(f)                                    indebtedness
of the Borrower or any Subsidiary existing on March 13, 2008 and not
otherwise permitted under this Section and listed on Schedule 8.7,
and any refinancings, refundings, renewals and extensions thereof;

 

(g)                                 unsecured
Subordinated Debt issued by the Borrower the proceeds of which are used to
repay the Bridge Loan; provided that
(i) the principal amount of such Subordinated Debt shall not exceed the
principal amount outstanding under the Bridge Loan at the time of such issuance
and (ii) such Subordinated Debt shall be subject to a Subordination
Agreement; and

 

(h)                                 indebtedness
owing to the lenders under the Senior Credit Agreement in an amount not to
exceed $145,000,000 in the aggregate and Hedging Liability and Funds Transfer
and Deposit Account Liability of the Borrower and its Subsidiaries owing to the
Senior Agent and the “Lenders” (and
their Affiliates) under the Senior Credit Agreement.

 

Section 8.8.                                Liens.  The Borrower shall not, nor shall it permit
any Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; provided, however,
that the foregoing shall not apply to nor operate to prevent:

 

(a)                                  Liens
arising by statute in connection with worker’s compensation, unemployment
insurance, old age benefits, social security obligations, taxes, assessments,
statutory obligations or other similar charges (other than Liens arising under
ERISA), good faith cash deposits in connection with tenders, contracts or
leases to which the Borrower or any Subsidiary is a party or other cash
deposits required to be made in the ordinary course of business, provided in
each case that the obligation is not for borrowed money and that the obligation
secured is not overdue or, if overdue, is being contested in good faith by appropriate
proceedings which prevent enforcement of the matter under contest and adequate
reserves have been established therefor;

 

29

 

(b)                                 mechanics’,
workmen’s, materialmen’s, landlords’, carriers’ or other similar Liens arising
in the ordinary course of business with respect to obligations which are not
due or which are being contested in good faith by appropriate proceedings which
prevent enforcement of the matter under contest;

 

(c)                                  judgment
liens and judicial attachment liens not constituting an Event of Default under
Section 9.1(g) hereof and the pledge of assets for the purpose of securing
an appeal, stay or discharge in the course of any legal proceeding, provided that the aggregate amount of such judgment liens
and attachments and liabilities of the Borrower and its Subsidiaries secured by
a pledge of assets permitted under this subsection, including interest and
penalties thereon, if any, shall not be in excess of $1,750,000 at any one time
outstanding;

 

(d)                                 Liens
on equipment of the Borrower or any Subsidiary created solely for the purpose
of securing indebtedness permitted by Section 8.7(b) hereof,
representing or incurred to finance the purchase price of such Property,
provided that no such Lien shall extend to or cover other Property of the
Borrower or such Subsidiary other than the respective Property so acquired, and
the principal amount of indebtedness secured by any such Lien shall at no time
exceed the purchase price of such Property, as reduced by repayments of
principal thereon;

 

(e)                                  any
interest or title of a lessor under any operating lease;

 

(f)                                    easements,
rights-of-way, restrictions, and other similar encumbrances against real
property incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and which do not materially detract from the
value of the Property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any Subsidiary;

 

(g)                                 Liens
existing on any asset of any Person at the time such Person becomes a
Subsidiary or is merged or consolidated with or into a Subsidiary which
(i) were not created in contemplation of or in connection with such event
and (ii) do not extend to or cover any other Property or assets of the
Borrower or any Subsidiary, so long as any Indebtedness for Borrowed Money
related to any such liens is permitted under Section 8.7;

 

(h)                                 Liens
not otherwise permitted by this Section and in existence on March 13,
2008 and described on Schedule 8.8; and

 

(i)                                     Liens
granted in favor of the Senior Agent pursuant to the Senior Credit Agreement or
the collateral documents related thereto.

 

Section 8.9.                                Investments,
Acquisitions, Loans and Advances. 
The Borrower shall not, nor shall it permit any Subsidiary to, directly
or indirectly, make, retain or have outstanding any investments (whether
through purchase of stock or obligations or otherwise) in, or loans or advances
to (other than for travel advances and other similar cash advances made to employees

 

30

 

in the ordinary course of business), any other Person,
or acquire all or any substantial part of the assets or business of any other
Person or division thereof; provided, however,
that the foregoing shall not apply to nor operate to prevent:

 

(a)                                  investments
in direct obligations of the United States of America or of any agency or
instrumentality thereof whose obligations constitute full faith and credit
obligations of the United States of America, provided that any such obligations
shall mature within one year of the date of issuance thereof;

 

(b)                                 investments
in commercial paper rated at least P-1 by Moody’s and at least A-1 by S&P
maturing within one year of the date of issuance thereof;

 

(c)                                  investments
in certificates of deposit issued by any Lender or by any United States
commercial bank having capital and surplus of not less than $100,000,000 which
have a maturity of one year or less;

 

(d)                                 investments
in repurchase obligations with a term of not more than seven (7) days for
underlying securities of the types described in subsection (a) above
entered into with any bank meeting the qualifications specified in
subsection (c) above, provided all such agreements require physical
delivery of the securities securing such repurchase agreement, except those
delivered through the Federal Reserve Book Entry System;

 

(e)                                  investments
in money market funds that invest solely, and which are restricted by their
respective charters to invest solely, in investments of the type described in
the immediately preceding subsections (a), (b), (c), and (d) above;

 

(f)                                    the
Borrower’s investment existing on the date of this Agreement in its Foreign
Subsidiaries and the Borrower’s investments from time to time in its Domestic Subsidiaries,
and investments made from time to time by a Domestic Subsidiary in one or more
of its Domestic Subsidiaries;

 

(g)                                 intercompany
advances made from time to time by the Borrower or a Guarantor to another
Guarantor or by a Guarantor to the Borrower in the ordinary course of business
to finance working capital needs;

 

(h)                                 the
Vyvx Acquisition;

 

(i)                                     the
Borrower’s and Subsidiaries’ investments existing on the date of this Agreement
and listed on Schedule 8.9 hereof; and

 

(j)                                     investments
in hedges, including currency and interest rate hedges; provided
such investments shall be for non-speculative purposes;

 

(k)                                  other
investments, loans, and advances in addition to those otherwise permitted by
this Section in an amount not to exceed $5,500,000 in the aggregate at any
one time outstanding.

 

31

 

In
determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be
taken at the original cost thereof (regardless of any subsequent appreciation
or depreciation therein), and loans and advances shall be taken at the
principal amount thereof then remaining unpaid.

 

Section 8.10.                         Mergers,
Consolidations and Sales.  The
Borrower shall not, nor shall it permit any Subsidiary to, be a party to any
merger or consolidation, or sell, transfer, lease or otherwise dispose of all
or any part of its Property, including any disposition of Property as part of a
sale and leaseback transaction, or in any event sell or discount (with or
without recourse) any of its notes or accounts receivable; provided,
however, that this Section shall not apply to nor operate to
prevent:

 

(a)                                  the
sale or lease of inventory in the ordinary course of business;

 

(b)                                 the
sale, transfer, lease or other disposition of Property of the Borrower and its
Subsidiaries to one another in the ordinary course of its business;

 

(c)                                  the
merger of any Subsidiary with and into the Borrower or any other Subsidiary,
provided that, in the case of any merger involving (i) the Borrower, the
Borrower is the corporation surviving the merger and (ii) a Guarantor, a
Guarantor or the Borrower is the surviving entity;

 

(d)                                 the
sale of delinquent notes or accounts receivable in the ordinary course of business
for purposes of collection only (and not for the purpose of any bulk sale or
securitization transaction);

 

(e)                                  the
sale, transfer or other disposition of any tangible personal property that, in
the reasonable business judgment of the Borrower or its Subsidiary, has become
obsolete or worn out, and which is disposed of in the ordinary course of
business; and

 

(f)                                    the
sale, transfer, lease or other disposition of Property of the Borrower or any
Subsidiary (including any disposition of Property as part of a sale and
leaseback transaction) aggregating for the Borrower and its Subsidiaries not
more than $1,500,000 during any fiscal year of the Borrower.

 

Section 8.11.                              Maintenance
of Subsidiaries.  The Borrower shall
not assign, sell or transfer, nor shall it permit any Subsidiary to issue,
assign, sell or transfer, any shares of capital stock or other equity interests
of a Subsidiary; provided, however, that the
foregoing shall not operate to prevent (a) Liens on the capital stock or
other equity interests of Subsidiaries granted to the Senior Agent pursuant to
the Senior Credit Agreement or the collateral documents related thereto,
(b) the issuance, sale, and transfer to any person of any shares of
capital stock of a Subsidiary solely for the purpose of qualifying, and to the
extent legally necessary to qualify, such person as a director of such
Subsidiary and (c) any transaction permitted by
Section 8.10(c) above.

 

32

 

Section 8.12.                         Dividends
and Certain Other Restricted Payments. 
The Borrower shall not, nor shall it permit any Subsidiary to,
(a) declare or pay any dividends on or make any other distributions in
respect of any class or series of its capital stock or other equity interests
(other than dividends or distributions payable solely in its capital stock or
other equity interests) or (b) directly or indirectly purchase, redeem, or
otherwise acquire or retire any of its capital stock or other equity interests
or any warrants, options, or similar instruments to acquire the same
(collectively referred to herein as “Restricted Payments”);
provided, however, that the foregoing
shall not operate to prevent (i) the making of dividends or distributions
by any Subsidiary to the Borrower; and (ii) that so long as no Default or
Event of Default has occurred and is continuing or would result therefrom, the
repurchase by the Borrower of its capital stock in an aggregate amount not to
exceed $3,000,000 per fiscal year of the Borrower.

 

Section 8.13.                         ERISA.  The Borrower shall, and shall cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed could
reasonably be expected to result in the imposition of a Lien against any of its
Property.  The Borrower shall, and shall
cause each Subsidiary to, promptly notify the Administrative Agent and each
Lender of:  (a) the occurrence of
any reportable event (as defined in ERISA) with respect to a Plan,
(b) receipt of any notice from the PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor, (c) its
intention to terminate or withdraw from any Plan, and (d) the occurrence
of any event with respect to any Plan which would result in the incurrence by
the Borrower or any Subsidiary of any material liability, fine or penalty, or
any material increase in the contingent liability of the Borrower or any
Subsidiary with respect to any post-retirement Welfare Plan benefit.

 

Section 8.14.                         Compliance
with Laws.  (a) The Borrower
shall, and shall cause each Subsidiary to, comply in all respects with the
requirements of all federal, state, and local laws, rules, regulations,
ordinances and orders applicable to or pertaining to its Property or business
operations, where any such non-compliance, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect or result in a
Lien upon any of its Property.

 

(b)                            Without
limiting the agreements set forth in Section 8.14(a) above, the
Borrower shall, and shall cause each Subsidiary to, at all times, do the
following to the extent the failure to do so, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect:  (i) comply in all material respects
with, and maintain each of the Premises in compliance in all material respects
with, all applicable Environmental Laws; (ii) require that each tenant and
subtenant, if any, of any of the Premises or any part thereof comply in all
material respects with all applicable Environmental Laws; (iii) obtain and
maintain in full force and effect all material governmental approvals required
by any applicable Environmental Law for operations at each of the Premises;
(iv) cure any material violation by it or at any of the Premises of
applicable Environmental Laws; (v) not allow the presence or operation at
any of the Premises of any (1) landfill or dump or (2) hazardous
waste management facility or solid waste disposal facility as defined pursuant
to RCRA or any comparable state law; (vi) not manufacture, use, generate,
transport, treat, store, release, dispose or handle any Hazardous Material at
any of the Premises except in the ordinary course of its business and in de minimis amounts; (vii) within ten (10) Business
Days notify the Administrative Agent in writing of and provide any reasonably
requested documents upon learning of any of the following in connection with
the Borrower or

 

33

 

any Subsidiary or any of the Premises: (1) any material
liability for response or corrective action, natural resource damage or other
harm pursuant to CERCLA, RCRA or any comparable state law; (2) any
material Environmental Claim; (3) any material violation of an
Environmental Law or material Release, threatened Release or disposal of a
Hazardous Material; (4) any restriction on the ownership, occupancy, use
or transferability arising pursuant to any (x) Release, threatened Release
or disposal of a Hazardous Material or (y) Environmental Law; or
(5) any environmental, natural resource, health or safety condition, which
could reasonably be expected to have a Material Adverse Effect;
(viii) conduct at its expense any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any material Release, threatened Release
or disposal of a Hazardous Material as required by any applicable Environmental
Law, (ix) abide by and observe any restrictions on the use of the Premises
imposed by any governmental authority as set forth in a deed or other
instrument affecting the Borrower’s or any Subsidiary’s interest therein;
(x) promptly provide or otherwise make available to the Administrative
Agent any reasonably requested environmental record concerning the Premises
which the Borrower or any Subsidiary possesses or can reasonably obtain; and
(xi) perform, satisfy, and implement any operation or maintenance actions
required by any governmental authority or Environmental Law, or included in any
no further action letter or covenant not to sue issued by any governmental
authority under any Environmental Law.

 

Section 8.15.                         Burdensome
Contracts With Affiliates.  Except as
set forth on Schedule 6.14, the Borrower shall not, nor shall it permit
any Subsidiary to, enter into any contract, agreement or business arrangement
with any of its Affiliates (other than with Wholly-owned Subsidiaries)  on terms and conditions which are less favorable to the
Borrower or such Subsidiary than would be usual and customary in similar
contracts, agreements or business arrangements between Persons not affiliated
with each other.

 

Section 8.16.                         No
Changes in Fiscal Year.  The fiscal
year of the Borrower and its Subsidiaries ends on December 31 of each
year; and the Borrower shall not, nor shall it permit any Subsidiary to, change
its fiscal year from its present basis.

 

Section 8.17.                         Formation
of Subsidiaries.  Promptly upon the
formation or acquisition of any Domestic Subsidiary, the Borrower shall provide
the Administrative Agent and the Lenders notice thereof and timely comply with
the requirements of Section 4 hereof (at which time Schedule 6.2
shall be deemed amended to include reference to such Subsidiary).  Except for Foreign Subsidiaries existing on the
Closing Date and identified on Schedule 6.2 hereof, the Borrower shall
not, nor shall it permit any Subsidiary to, form or acquire any Foreign
Subsidiary.

 

Section 8.18.                         Change in
the Nature of Business.  The Borrower
shall not, nor shall it permit any Subsidiary to, engage in any business or
activity if as a result the general nature of the business of the Borrower or
any Subsidiary would be changed in any material respect from the general nature
of the business engaged in by it as of the Closing Date.

 

Section 8.19.                         Use of
Proceeds.  The Borrower shall use the
credit extended under this Agreement solely for the purposes set forth in, or
otherwise permitted by, Section 6.4 hereof.

 

34

 

Section 8.20.                         No Restrictions.  Except as provided herein, the Borrower
shall not, nor shall it permit any Subsidiary to, directly or indirectly create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Borrower or any
Subsidiary to:  (a) pay dividends or
make any other distribution on any Subsidiary’s capital stock or other equity
interests owned by the Borrower or any other Subsidiary, (b) pay any
indebtedness owed to the Borrower or any other Subsidiary, (c) make loans
or advances to the Borrower or any other Subsidiary, (d) transfer any of
its Property to the Borrower or any other Subsidiary, or (e) guarantee the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability and/or grant Liens on its assets to the Administrative Agent as
required by the Loan Documents.

 

Section 8.21.                         Subordinated
Debt.  The Borrower shall not, nor
shall it permit any Subsidiary to, (a) amend or modify any of the terms or
conditions relating to Subordinated Debt, (b) make any voluntary
prepayment of Subordinated Debt or effect any voluntary redemption thereof, or
(c) make any payment on account of Subordinated Debt which is prohibited
under the terms of any instrument or agreement subordinating the same to the
Obligations.  Notwithstanding the
foregoing, the Borrower may agree to a decrease in the interest rate applicable
thereto or to a deferral of repayment of any of the principal of or interest on
the Subordinated Debt beyond the current due dates therefor.

 

Section 8.22.                         Financial
Covenants.  (a) Total Leverage Ratio. 
As of the last day of each fiscal quarter of the Borrower ending during
the relevant period set forth below, the Borrower shall not permit the Total
Leverage Ratio to be greater than the corresponding ratio set forth opposite
such period:

 

	
  FISCAL
  QUARTER 

  ENDING ON OR ABOUT

  	
   

  	
  TOTAL LEVERAGE RATIO 

  SHALL NOT BE GREATER THAN:

  
	
  The Closing Date
  through 06/30/08

  	
   

  	
  4.25 to 1.0

  
	
  07/01/08 through
  09/30/08

  	
   

  	
  4.00 to 1.0

  
	
  10/01/08 through
  12/31/09

  	
   

  	
  3.75 to 1.0

  
	
  01/01/10 and at
  all times thereafter

  	
   

  	
  3.25 to 1.0

  

 

(b)                            Fixed Charge Coverage Ratio. 
As of the last day of each fiscal quarter of the Borrower, the Borrower
shall maintain a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00.

 

Section 8.23                            Equity
Offering.  Subject to the
requirements of applicable law, if any portion of the Loans remains outstanding
after December 5, 2009 and following consultation with the Administrative
Agent and upon written notice by the Administrative Agent (an “Equity Securities Notice”), the Borrower shall execute an
offering of Equity Securities (an “Equity Securities
Offering”) upon such terms and conditions as specified in the Equity
Securities Notice, it being understood that: 
(a) the Borrower shall engage one or more investment advisers

 

35

 

reasonably acceptable to the Administrative Agent (the
“Investment Adviser”) which shall
determine in its reasonable discretion after consultation with the Borrower
whether the Borrower shall publicly sell or privately place, in one or more
transactions, either equity securities (the “Equity
Securities”) or other securities the proceeds of which shall be
sufficient to repay the outstanding Loans; (b) such Equity Securities
Offering shall be completed without regard to the Borrower’s share price at
that time; and (c) other arrangements with respect to such Equity
Securities or other securities will be customary, taking into account the then
prevailing market conditions as determined collectively by the Administrative
Agent and the Investment Bank.

 

SECTION 9.                                                 EVENTS OF DEFAULT AND REMEDIES.

 

Section 9.1.                                Events of Default. 
Any one or more of the following shall constitute an “Event of Default” hereunder:

 

(a)                                  default
in the payment when due of all or any part of the principal of any Loan
(whether at the stated maturity thereof or at any other time provided for in
this Agreement), or default for a period of five (5) Business Days in the
payment when due of any  fee or other
Obligation payable hereunder or under any other Loan Document;

 

(b)                                 default
in the observance or performance of any covenant set forth in
Sections 8.1, 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.21, 8.22 or 8.23
hereof;

 

(c)                                  default
in the observance or performance of any other provision hereof or of any other
Loan Document which is not remedied within thirty (30) days after the earlier
of (i) the date on which such failure shall first become known to any
officer of the Borrower or (ii) written notice thereof is given to the
Borrower by the Administrative Agent;

 

(d)                                 any
representation or warranty made herein or in any other Loan Document or in any
certificate furnished to the Administrative Agent or the Lenders pursuant
hereto or thereto or in connection with any transaction contemplated hereby or
thereby proves untrue in any material respect as of the date of the issuance or
making or deemed making thereof;

 

(e)                                  any
event occurs or condition exists (other than those described in
subsections (a) through (d) above) which is specified as an
event of default under any of the other Loan Documents, or any of the Loan
Documents shall for any reason not be or shall cease to be in full force and
effect or is declared to be null and void, or any Subsidiary takes any action
for the purpose of terminating, repudiating or rescinding any Loan Document
executed by it or any of its obligations thereunder;

 

(f)                                    default
shall occur under any Indebtedness for Borrowed Money (other than the
Obligations owing under the Senior Credit Agreement) issued, assumed or
guaranteed by the Borrower or any Subsidiary aggregating in excess of
$1,250,000, or under any indenture, agreement or other instrument under which
the same may be issued, and such default shall continue for a period of time
sufficient to permit the acceleration of

 

36

 

the maturity of any such Indebtedness for Borrowed
Money (whether or not such maturity is in fact accelerated), or any such
Indebtedness for Borrowed Money shall not be paid when due (whether by demand,
lapse of time, acceleration or otherwise);

 

(g)                                 any
judgment or judgments, writ or writs or warrant or warrants of attachment, or
any similar process or processes, shall be entered or filed against the
Borrower or any Subsidiary, or against any of its Property, in an aggregate
amount in excess of $1,750,000 (except to the extent fully covered by insurance
pursuant to which the insurer has accepted liability therefor in writing), and
which remains undischarged, unvacated, unbonded or unstayed for a period of
thirty (30) days;

 

(h)                                 the
Borrower or any Subsidiary, or any member of its Controlled Group, shall fail
to pay when due an amount or amounts aggregating in excess of $1,250,000 which
it shall have become liable to pay to the PBGC or to a Plan under Title IV
of ERISA; or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in excess of $1,250,000 (collectively, a “Material Plan”) shall be filed under Title IV of ERISA
by the Borrower or any Subsidiary, or any other member of its Controlled Group,
any plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a proceeding shall
be instituted by a fiduciary of any Material Plan against the Borrower or any
Subsidiary, or any member of its Controlled Group, to enforce Section 515
or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed
within thirty (30) Days thereafter; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated;

 

(i)                                     any
Change of Control shall occur;

 

(j)                                     the
Borrower or any Subsidiary shall (i) have entered involuntarily against it
an order for relief under the United States Bankruptcy Code, as amended,
(ii) not pay, or admit in writing its inability to pay, its debts
generally as they become due, (iii) make an assignment for the benefit of
creditors, (iv) apply for, seek, consent to or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any substantial part of its Property, (v) institute any
proceeding seeking to have entered against it an order for relief under the
United States Bankruptcy Code, as amended, to adjudicate it insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (vi) take any corporate action in furtherance
of any matter described in parts (i) through (v) above, or
(vii) fail to contest in good faith any appointment or proceeding
described in Section 9.1(k) hereof; or

 

(k)                                  a
custodian, receiver, trustee, examiner, liquidator or similar official shall be
appointed for the Borrower or any Subsidiary, or any substantial part of any of
its Property, or a proceeding described in Section 9.1(j)(v) shall be
instituted against the

 

37

 

Borrower or any Subsidiary, and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of sixty (60) days; or

 

(l)                                     a
default shall occur under the Senior Credit Agreement which has resulted in the
acceleration of the maturity of any “Obligation”
under the Senior Credit Agreement; or

 

(m)                               any
Subordination Agreement shall for any reason not be or shall cease to be in
full force and effect or is declared null and void, or any party thereto (other
than the Administrative Agent) takes any action for the purpose of repudiating
or rescinding such agreement or any of its obligations thereunder.

 

Section 9.2.                                Non-Bankruptcy Defaults. 
When any Event of Default (other than those described in
subsection (j) or (k) of Section 9.1 hereof with respect to
the Borrower) has occurred and is continuing, the Administrative Agent shall,
by written notice to the Borrower: if so directed by the Required  Lenders, declare the principal of and the accrued interest
on all outstanding Loans to be forthwith due and payable and thereupon all
outstanding Loans, including both principal and interest thereon, shall be and
become immediately due and payable together with all other amounts payable
under the Loan Documents without further demand, presentment, protest or notice
of any kind; and the Borrower agrees to immediately make such payment and
acknowledges and agrees that the Lenders would not have an adequate remedy at
law for failure by the Borrower to honor any such demand and that the
Administrative Agent, for the benefit of the Lenders, shall have the right to
require the Borrower to specifically perform such undertaking.  The Administrative Agent, after giving notice
to the Borrower pursuant to Section 9.1(c) or this Section 9.2,
shall also promptly send a copy of such notice to the other Lenders, but the
failure to do so shall not impair or annul the effect of such notice.

 

Section 9.3.                                Bankruptcy
Defaults.  When any Event of Default
described in subsections (j) or (k) of Section 9.1 hereof
with respect to the Borrower has occurred and is continuing, then all
outstanding Loans shall immediately become due and payable together with all
other amounts payable under the Loan Documents without presentment, demand,
protest or notice of any kind, the Borrower acknowledging and agreeing that the
Lenders would not have an adequate remedy at law for failure by the Borrower to
honor any such demand and that the Lenders, and the Administrative Agent on
their behalf, shall have the right to require the Borrower to specifically
perform such undertaking.

 

Section 9.4.                                Notice
of Default.  The Administrative Agent
shall give notice to the Borrower under Section 9.1(c) hereof
promptly upon being requested to do so by any Lender and shall thereupon notify
all the Lenders thereof.

 

SECTION 10.                                           RESERVED.

 

SECTION 11.                                           THE ADMINISTRATIVE AGENT.

 

Section 11.1.                         Appointment
and Authorization of Administrative Agent. 
Each Lender hereby appoints  Bank of
Montreal as the Administrative Agent under the Loan Documents and

 

38

 

hereby authorizes the Administrative Agent to take
such action as Administrative Agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto.  The Lenders expressly agree
that the Administrative Agent is not acting as a fiduciary of the Lenders in
respect of the Loan Documents, the Borrower or otherwise, and nothing herein or
in any of the other Loan Documents shall result in any duties or obligations on
the Administrative Agent or any of the Lenders except as expressly set forth
herein.

 

Section 11.2.                         Administrative
Agent and its Affiliates.  The
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise or refrain
from exercising such rights and power as though it were not the Administrative
Agent, and the Administrative Agent and its affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with the
Borrower or any Affiliate of the Borrower as if it were not the Administrative
Agent under the Loan Documents.  The term
“Lender” as used herein and in all other
Loan Documents, unless the context otherwise clearly requires, includes the
Administrative Agent in its individual capacity as a Lender.  References in Section 1 hereof to the
Administrative Agent’s Loans, or to the amount owing to the Administrative
Agent for which an interest rate is being determined, refer to the
Administrative Agent in its individual capacity as a Lender.

 

Section 11.3.                         Action by
Administrative Agent.  If the
Administrative Agent receives from the Borrower a written notice of an Event of
Default pursuant to Section 8.5 hereof, the Administrative Agent shall
promptly give each of the Lenders written notice thereof.  The obligations of the Administrative Agent
under the Loan Documents are only those expressly set forth therein.  Without limiting the generality of the
foregoing, the Administrative Agent shall not be required to take any action
hereunder with respect to any Default or Event of Default, except as expressly
provided in Sections 9.2 and 9.5. 
Unless and until the Required Lenders give such direction, the
Administrative Agent may (but shall not be obligated to) take or refrain from
taking such actions as it deems appropriate and in the best interest of all the
Lenders.  In no event, however, shall the
Administrative Agent be required to take any action in violation of applicable
law or of any provision of any Loan Document, and the Administrative Agent
shall in all cases be fully justified in failing or refusing to act hereunder
or under any other Loan Document unless it first receives any further
assurances of its indemnification from the Lenders that it may require,
including prepayment of any related expenses and any other protection it
requires against any and all costs, expense, and liability which may be
incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall be entitled to
assume that no Default or Event of Default exists unless notified in writing to
the contrary by a Lender or the Borrower. 
In all cases in which the Loan Documents do not require the
Administrative Agent to take specific action, the Administrative Agent shall be
fully justified in using its discretion in failing to take or in taking any
action thereunder.  Any instructions of
the Required Lenders, or of any other group of Lenders called for under the
specific provisions of the Loan Documents, shall be binding upon all the
Lenders and the holders of the Obligations.

 

Section 11.4.                         Consultation
with Experts.  The Administrative
Agent may consult with legal counsel, independent public accountants, and other
experts selected by it and shall not be

 

39

 

liable for any action taken or omitted to be taken by
it in good faith in accordance with the advice of such counsel, accountants or
experts.

 

Section 11.5.                         Liability
of Administrative Agent; Credit Decision. 
Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or not taken by it in
connection with the Loan Documents: 
(i) with the consent or at the request of the Required Lenders or
(ii) in the absence of its own gross negligence or willful
misconduct.  Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify:  (i) any statement, warranty or
representation made in connection with this Agreement or any other Loan
Document; (ii) the performance or observance of any of the covenants or
agreements of the Borrower or any Subsidiary contained herein or in any other
Loan Document; (iii) the satisfaction of any condition specified in
Section 7 hereof, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness, genuineness,
enforceability, perfection, value, worth or collectibility hereof or of any
other Loan Document or of any other documents or writing furnished in
connection with any Loan Document; and the Administrative Agent makes no
representation of any kind or character with respect to any such matter
mentioned in this sentence.  The Administrative
Agent may execute any of its duties under any of the Loan Documents by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, the Borrower, or any other Person for the default or misconduct of
any such agents or attorneys-in-fact selected with reasonable care.  The Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate, other
document or statement (whether written or oral) believed by it to be genuine or
to be sent by the proper party or parties. 
In particular and without limiting any of the foregoing, the
Administrative Agent shall have no responsibility for confirming the accuracy
of any compliance certificate or other document or instrument received by it
under the Loan Documents.  The
Administrative Agent may treat the payee of any Obligation as the holder
thereof until written notice of transfer shall have been filed with the
Administrative Agent signed by such payee in form satisfactory to the
Administrative Agent.  Each Lender acknowledges
that it has independently and without reliance on the Administrative Agent or
any other and based upon such information, investigations and inquiries as it
deems appropriate, made its own credit analysis and decision to extend credit
to the Borrower in the manner set forth in the Loan Documents.  It shall be the responsibility of each Lender
to keep itself informed as to the creditworthiness of the Borrower and its
Subsidiaries, and the Administrative Agent shall have no liability to any
Lender with respect thereto.

 

Section 11.6.                         Indemnity.  The Lenders shall ratably, in accordance with
their respective Loan Percentages, indemnify and hold the Administrative Agent,
and its directors, officers, employees, agents, and representatives harmless
from and against any liabilities, losses, costs or expenses suffered or
incurred by it under any Loan Document or in connection with the transactions
contemplated thereby, regardless of when asserted or arising, except to the
extent they are promptly reimbursed for the same by the Borrower and except to
the extent that any event giving rise to a claim was caused by the gross
negligence or willful misconduct of the party seeking to be indemnified.  The obligations of the Lenders under this
Section shall survive termination of this Agreement.  The Administrative Agent shall be entitled to
offset amounts received for the account of a Lender under this Agreement
against unpaid amounts due from 

 

40

 

such Lender to the Administrative Agent hereunder
(whether as fundings of participations, indemnities or otherwise), but shall
not be entitled to offset against amounts owed to the Administrative Agent by
any Lender arising outside of this Agreement and the other Loan Documents.

 

Section 11.7.                         Resignation
of Administrative Agent and Successor Administrative Agent.  The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower.  Upon any such resignation of the
Administrative Agent, the Required Lenders shall have the right to appoint a
successor Administrative Agent.  If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within thirty (30) days after
the retiring Administrative Agent’s giving of notice of resignation then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which may be any Lender hereunder or any
commercial bank, or an Affiliate of a commercial bank, having an office in the
United States of America and having a combined capital and surplus of at least
$200,000,000.  Upon the acceptance of its
appointment as the Administrative Agent hereunder, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring Administrative Agent under the Loan
Documents, and the retiring Administrative Agent shall be discharged from its
duties and obligations thereunder.  After
any retiring Administrative Agent’s resignation hereunder as Administrative
Agent, the provisions of this Section 11 and all protective provisions of
the other Loan Documents shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent, but no successor
Administrative Agent shall in any event be liable or responsible for any
actions of its predecessor.  If the
Administrative Agent resigns and no successor is appointed, the rights and
obligations of such Administrative Agent shall be automatically assumed by the
Required Lenders and the Borrower shall be directed to make all payments due
each Lender hereunder directly to such Lender.

 

Section 11.8.                         Designation
of Additional Agents.  The
Administrative Agent shall have the continuing right, for purposes hereof, at
any time and from time to time to designate one or more of the Lenders (and/or
its or their Affiliates) as “syndication agents,” “documentation agents,” “book
runners,” “lead arrangers,” “arrangers,” or other designations for purposes
hereto, but such designation shall have no substantive effect, and such Lenders
and their Affiliates shall have no additional powers, duties or
responsibilities as a result thereof.

 

Section 11.9.                         Authorization
to Enter into, and Enforcement of, the Subordination Agreements.  The Administrative Agent is hereby
irrevocably authorized by each of the Lenders to execute and deliver any
Subordination Agreement on behalf of each of the Lenders and their Affiliates
and to take such action and exercise such powers under the Subordination
Agreements as the Administrative Agent considers appropriate, provided the Administrative Agent shall not amend the
Subordination Agreements unless such amendment is agreed to in writing by the
Required Lenders.  Each Lender
acknowledges and agrees that it will be bound by the terms and conditions of
the Subordination Agreements upon the execution and delivery thereof by the
Administrative Agent.

 

41

 

SECTION 12.                                           THE GUARANTEES.

 

Section 12.1.                         The
Guarantees.  To induce the Lenders to
provide the credits described herein and in consideration of benefits expected
to accrue to the Borrower by reason of the Commitments and for other good and
valuable consideration, receipt of which is hereby acknowledged, each
Subsidiary party hereto (including any Subsidiary executing an Additional
Guarantor Supplement in the form attached hereto as Exhibit D or such
other form acceptable to the Administrative Agent) hereby unconditionally and
irrevocably guarantees jointly and severally to the Administrative Agent, the
Lenders and their Affiliates, the due and punctual payment of all present and
future Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, including, but not limited to, the due and punctual payment of
principal of and interest on the Loans and the due and punctual payment of all
other Obligations now or hereafter owed by the Borrower under the Loan
Documents and the due and punctual payment of all Hedging Liability and Funds
Transfer and Deposit Account Liability, in each case as and when the same shall
become due and payable, whether at stated maturity, by acceleration, or
otherwise, according to the terms hereof and thereof (including all interest,
costs, fees, and charges after the entry of an order for relief against the
Borrower or such other obligor in a case under the United States Bankruptcy
Code or any similar proceeding, whether or not such interest, costs, fees and
charges would be an allowed claim against the Borrower or any such obligor in
any such proceeding).  In case of failure
by the Borrower or other obligor punctually to pay any Obligations, Hedging
Liability, or Funds Transfer and Deposit Account Liability guaranteed hereby,
each Guarantor hereby unconditionally agrees to make such payment or to cause
such payment to be made punctually as and when the same shall become due and
payable, whether at stated maturity, by acceleration, or otherwise, and as if
such payment were made by the Borrower or such obligor.

 

Section 12.2.                         Guarantee
Unconditional.  The obligations of
each Guarantor under this Section 12 shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged, or otherwise affected by:

 

(a)                        any
extension, renewal, settlement, compromise, waiver, or release in respect of
any obligation of the Borrower or other obligor or of any other guarantor under
this Agreement or any other Loan Document or by operation of law or otherwise;

 

(b)                       any
modification or amendment of or supplement to this Agreement or any other Loan
Document or any agreement relating to Hedging Liability or Funds Transfer and
Deposit Account Liability;

 

(c)                        any change
in the corporate existence, structure, or ownership of, or any insolvency,
bankruptcy, reorganization, or other similar proceeding affecting, the Borrower
or other obligor, any other guarantor, or any of their respective assets, or
any resulting release or discharge of any obligation of the Borrower or other
obligor or of any other guarantor contained in any Loan Document;

 

42

 

(d)                       the
existence of any claim, set-off, or other rights which the Borrower or other
obligor or any other guarantor may have at any time against the Administrative
Agent, any Lender or any other Person, whether or not arising in connection
herewith;

 

(e)                        any
failure to assert, or any assertion of, any claim or demand or any exercise of,
or failure to exercise, any rights or remedies against the Borrower or other
obligor, any other guarantor, or any other Person or Property;

 

(f)                          any
application of any sums by whomsoever paid or howsoever realized to any
obligation of the Borrower or other obligor, regardless of what obligations of
the Borrower or other obligor remain unpaid;

 

(g)                       any
invalidity or unenforceability relating to or against the Borrower or other
obligor or any other guarantor for any reason of this Agreement or of any other
Loan Document or any provision of applicable law or regulation purporting to
prohibit the payment by the Borrower or other obligor or any other guarantor of
the principal of or interest on any Loan or any other amount payable under the
Loan Documents or any agreement relating to Hedging Liability or Funds Transfer
and Deposit Account Liability; or

 

(h)                       any other
act or omission to act or delay of any kind by the Administrative Agent, any
Lender or any other Person or any other circumstance whatsoever that might, but
for the provisions of this paragraph, constitute a legal or equitable discharge
of the obligations of any Guarantor under this Section 12.

 

Section 12.3.                         Discharge
Only upon Payment in Full; Reinstatement in Certain Circumstances.  Each Guarantor’s obligations under this Section 12
shall remain in full force and effect until the Commitments are terminated and
the principal of and interest on the Loans and all other amounts payable by the
Borrower and the Guarantors under this Agreement and all other Loan Documents
shall have been paid in full.  If at any
time any payment of the principal of or interest on any Loan or any other
amount payable by the Borrower or other obligor or any Guarantor under the Loan
Documents or any agreement relating to Hedging Liability or Funds Transfer and
Deposit Account Liability is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy, or reorganization of the Borrower or
other obligor or of any guarantor, or otherwise, each Guarantor’s obligations
under this Section 12 with respect to such payment shall be reinstated at
such time as though such payment had become due but had not been made at such
time.

 

Section 12.4.                         Subrogation.  Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made
hereunder, or otherwise, until all the Obligations shall have been paid in full
subsequent to the termination of all the Commitments.  If any amount shall be paid to a Guarantor on
account of such subrogation rights at any time prior to the later of
(x) the payment in full of the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability and all other amounts payable by the
Borrower hereunder and the other Loan Documents and (y) the termination of
the Commitments, such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders (and their Affiliates) and shall 

 

43

 

forthwith be paid to the Administrative Agent for the
benefit of the Lenders (and their Affiliates) or be credited and applied upon
the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, whether matured or unmatured, in accordance with the terms of this
Agreement.

 

Section 12.5.                         Waivers.  Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein,
as well as any requirement that at any time any action be taken by the
Administrative Agent, any Lender or any other Person against the Borrower or
other obligor, another guarantor, or any other Person.

 

Section 12.6.                         Limit on
Recovery.  Notwithstanding any other
provision hereof, the right of recovery against each Guarantor under this
Section 12 shall not exceed $1.00 less than the lowest amount which would
render such Guarantor’s obligations under this Section 12 void or
avoidable under applicable law, including, without limitation, fraudulent
conveyance law.

 

Section 12.7.                         Stay of
Acceleration.  If acceleration of the
time for payment of any amount payable by the Borrower or other obligor under
this Agreement or any other Loan Document, or under any agreement relating to
Hedging Liability or Funds Transfer and Deposit Account Liability, is stayed
upon the insolvency, bankruptcy or reorganization of the Borrower or such
obligor, all such amounts otherwise subject to acceleration under the terms of
this Agreement or the other Loan Documents, or under any agreement relating to
Hedging Liability or Funds Transfer and Deposit Account Liability, shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Administrative Agent made at the request of the Required Lenders.

 

Section 12.8.                         Benefit
to Guarantors.  The Borrower and the
Guarantors are engaged in related businesses and integrated to such an extent
that the financial strength and flexibility of the Borrower has a direct impact
on the success of each Guarantor.  Each
Guarantor will derive substantial direct and indirect benefit from the
extensions of credit hereunder.

 

Section 12.9.                         Guarantor
Covenants.  Each Guarantor shall take
such action as the Borrower is required by this Agreement to cause such
Guarantor to take, and shall refrain from taking such action as the Borrower is
required by this Agreement to prohibit such Guarantor from taking.

 

SECTION 13.                                                                          MISCELLANEOUS.

 

Section 13.1.                         Withholding
Taxes.  (a) Payments
Free of Withholding.  Except
as otherwise required by law and subject to Section 13.1(b) hereof,
each payment by the Borrower and the Guarantors under this Agreement or the
other Loan Documents shall be made without withholding for or on account of any
present or future taxes (other than overall net income taxes on the recipient)
imposed by or within the jurisdiction in which the Borrower or such Guarantor
is domiciled, any jurisdiction from which the Borrower or such Guarantor makes
any payment, or (in each case) any political subdivision or taxing authority
thereof or therein.  If any such
withholding is so required, the Borrower or such Guarantor shall make the
withholding, pay the amount withheld to the appropriate governmental authority
before penalties attach thereto or 

 

44

 

interest accrues thereon, and forthwith pay such
additional amount as may be necessary to ensure that the net amount actually
received by each Lender and the Administrative Agent free and clear of such
taxes (including such taxes on such additional amount) is equal to the amount
which that Lender or the Administrative Agent (as the case may be) would have
received had such withholding not been made. 
If the Administrative Agent or any Lender pays any amount in respect of
any such taxes, penalties or interest, the Borrower or such Guarantor shall reimburse
the Administrative Agent or such Lender for that payment on demand in the
currency in which such payment was made. 
If the Borrower or such Guarantor pays any such taxes, penalties or
interest, it shall deliver official tax receipts evidencing that payment or
certified copies thereof to the Lender or Administrative Agent on whose account
such withholding was made (with a copy to the Administrative Agent if not the
recipient of the original) on or before the thirtieth (30th) day after payment.

 

(b)                                 U.S. Withholding Tax Exemptions.  Each Lender that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrower and the Administrative Agent on or before the date the
initial Credit Event is made hereunder or, if later, the date such financial
institution becomes a Lender hereunder, two (2) duly completed and
signed copies of (i) either Form W-8 BEN (relating to such
Lender and entitling it to a complete exemption from withholding under the Code
on all amounts to be received by such Lender, including fees, pursuant to the
Loan Documents and the Obligations) or Form W-8 ECI (relating to all
amounts to be received by such Lender, including fees, pursuant to the Loan
Documents and the Obligations) of the United States Internal Revenue Service or
(ii) solely if such Lender is claiming exemption from United States
withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of “portfolio interest”, a Form W-8 BEN, or any
successor form prescribed by the Internal Revenue Service, and a certificate
representing that such Lender is not a bank for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and
is not a controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Code).  Thereafter and from time to time, each Lender
shall submit to the Borrower and the Administrative Agent such additional duly
completed and signed copies of one or the other of such Forms (or such
successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) and such other certificates as may be
(i) requested by the Borrower in a written notice, directly or through the
Administrative Agent, to such Lender and (ii) required under then-current
United States law or regulations to avoid or reduce United States withholding
taxes on payments in respect of all amounts to be received by such Lender,
including fees, pursuant to the Loan Documents or the Obligations.  Upon the request of the Borrower or the
Administrative Agent, each Lender that is a United States person (as such term
is defined in Section 7701(a)(30) of the Code) shall submit to the
Borrower and the Administrative Agent a certificate to the effect that it is
such a United States person.

 

(c)                                  Inability of Lender to Submit Forms.  If any Lender determines, as a result of any
change in applicable law, regulation or treaty, or in any official application
or interpretation thereof, that it is unable to submit to the Borrower or the
Administrative Agent any form or certificate that such Lender is obligated to
submit pursuant to subsection (b) of this Section 13.1 or that
such Lender is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such 

 

45

 

Lender shall promptly notify the Borrower and
Administrative Agent of such fact and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.

 

Section 13.2.                         No
Waiver, Cumulative Remedies.  No
delay or failure on the part of the Administrative Agent or any Lender, or on
the part of the holder or holders of any of the Obligations, in the exercise of
any power or right under any Loan Document shall operate as a waiver thereof or
as an acquiescence in any default, nor shall any single or partial exercise of
any power or right preclude any other or further exercise thereof or the
exercise of any other power or right. 
The rights and remedies hereunder of the Administrative Agent, the Lenders,
and of the holder or holders of any of the Obligations are cumulative to, and
not exclusive of, any rights or remedies which any of them would otherwise
have.

 

Section 13.3.                         Non-Business
Days.  If any payment hereunder
becomes due and payable on a day which is not a Business Day, the due date of
such payment shall be extended to the next succeeding Business Day on which
date such payment shall be due and payable. 
In the case of any payment of principal falling due on a day which is
not a Business Day, interest on such principal amount shall continue to accrue
during such extension at the rate per annum then in effect, which accrued
amount shall be due and payable on the next scheduled date for the payment of
interest.

 

Section 13.4.                         Documentary
Taxes.  The Borrower agrees to pay on
demand any documentary, stamp or similar taxes payable in respect of this
Agreement or any other Loan Document, including interest and penalties, in the
event any such taxes are assessed, irrespective of when such assessment is made
and whether or not any credit is then in use or available hereunder.

 

Section 13.5.                         Survival
of Representations.  All
representations and warranties made herein or in any other Loan Document or in
certificates given pursuant hereto or thereto shall survive the execution and
delivery of this Agreement and the other Loan Documents, and shall continue in
full force and effect with respect to the date as of which they were made as
long as any credit is in use or available hereunder.

 

Section 13.6.                         Survival of Indemnities. 
All indemnities and other provisions relative to reimbursement to the
Lenders of amounts sufficient to protect the yield of the Lenders with respect
to the Loans, including, but not limited to, Sections 1.9, 10.3, and 13.15
hereof, shall survive the termination of this Agreement and the other Loan
Documents and the payment of the Obligations. 

 

Section 13.7.                         Sharing
of Set-Off.  Each Lender agrees with
each other Lender a party hereto that if such Lender shall receive and retain
any payment, whether by set-off or application of deposit balances or
otherwise, on any of the Loans in excess of its ratable share of payments on
all such Obligations then outstanding to the Lenders, then such Lender shall
purchase for cash at face value, but without recourse, ratably from each of the
other Lenders such amount of the Loans, or participations therein, held by each
such other Lenders (or interest therein) as shall be necessary to cause such
Lender to share such excess payment ratably with all the other Lenders; 

 

46

 

provided, however, that if any
such purchase is made by any Lender, and if such excess payment or part thereof
is thereafter recovered from such purchasing Lender, the related purchases from
the other Lenders shall be rescinded ratably and the purchase price restored as
to the portion of such excess payment so recovered, but without interest.

 

Section 13.8.                         Notices.  Except as otherwise specified herein, all
notices hereunder and under the other Loan Documents shall be in writing
(including, without limitation, notice by telecopy) and shall be given to the
relevant party at its address or telecopier number set forth below, or such
other address or telecopier number as such party may hereafter specify by
notice to the Administrative Agent and the Borrower given by courier, by United
States certified or registered mail, by telecopy or by other telecommunication
device capable of creating a written record of such notice and its
receipt.  Notices under the Loan
Documents to any Lender shall be addressed to its address or telecopier number
set forth on its Administrative Questionnaire; and notices under the Loans
Documents to the Borrower, any Guarantor or the Administrative Agent shall be
addressed to its respective address or telecopier number set forth below:

 

	
  to the Borrower or any
  Guarantor:

  	
   

  	
  to the Administrative
  Agent:

  
	
   

  	
   

  	
   

  
	
  750 John W. Carpenter
  Freeway

  	
   

  	
  Bank of Montreal

  
	
  Suite 700

  	
   

  	
  115 South LaSalle
  Street

  
	
  Irving, Texas 75039

  	
   

  	
  Chicago, Illinois 60603

  
	
  Attention:     Omar
  A. Choucair

  	
   

  	
  Attention:     Kathleen
  Jones

  
	
  Telephone:   972-581-2000

  	
   

  	
  Telephone:   312-461-7077

  
	
  Telecopy:     972-581-2100

  	
   

  	
  Telecopy:     312-461-4008

  

 

Each
such notice, request or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or in the relevant Administrative Questionnaire
and a confirmation of such telecopy has been received by the sender,
(ii) if given by mail, five (5) days after such communication is deposited
in the mail, certified or registered with return receipt requested, addressed
as aforesaid or (iii) if given by any other means, when delivered at the
addresses specified in this Section or in the relevant Administrative
Questionnaire; provided that  any
notice given pursuant to Section 1 hereof shall be effective only upon
receipt.

 

Section 13.9.                         Counterparts.  This Agreement may be executed in any number
of counterparts, and by the different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.

 

Section 13.10.                  Successors and
Assigns.  This Agreement shall be
binding upon the Borrower and the Guarantors and their successors and assigns,
and shall inure to the benefit of the Administrative Agent and each of the
Lenders, and the benefit of their respective successors and assigns, including
any subsequent holder of any of the Obligations.  The Borrower and the Guarantors may not
assign any of their rights or obligations under any Loan Document without the
written consent of all of the Lenders.

 

47

 

Section 13.11.                  Participants.  Each Lender shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made by such Lender at any time and
from time to time to one or more other Persons; provided that no such
participation shall relieve any Lender of any of its obligations under this
Agreement, and, provided, further that no such participant shall have any
rights under this Agreement except as provided in this Section, and the
Administrative Agent shall have no obligation or responsibility to such
participant.  Any agreement pursuant to
which such participation  is granted
shall provide that the granting Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrower under this Agreement
and the other Loan Documents including, without limitation, the right to
approve any amendment, modification or waiver of any provision of the Loan
Documents, except that such agreement may provide that such Lender will not
agree to any modification, amendment or waiver of the Loan Documents that would
reduce the amount of or postpone any fixed date for payment of any Obligation
in which such participant has an interest. 
The Borrower authorizes each Lender to disclose to any participant or
prospective participant under this Section any financial or other information
pertaining to the Borrower or any Subsidiary.

 

Section 13.12.                  Assignments.  (a) Any Lender may at any time assign to
one or more Eligible Assignees all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Loans at
the time owing to it); provided that
any such assignment shall be subject to the following conditions:

 

(i)                           Minimum Amounts. 
(A) In the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitment and the Loans or in the case of an assignment
to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount
need be assigned; and (B) in any case not described in subsection
(a)(i)(A) of this Section, the aggregate amount of the principal outstanding
balance of the Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent or, if “Effective Date” is
specified in the Assignment and Acceptance, as of the Effective Date) shall not
be less than $1,000,000, unless each of the Administrative Agent and, so long
as no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);

 

(ii)                        Proportionate Amounts. 
Each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loan or the Commitment assigned.

 

(iii)                     Required Consents.  No
consent shall be required for any assignment except to the extent required by
Section 13.12(a)(i)(B) and, in addition:

 

(a)                        the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default  has occurred and is continuing at the time of such
assignment or (y) such assignment is to a Lender, an Affiliate of a Lender
or an Approved Fund; and

 

48

 

(b)                       the consent
of the Administrative Agent (such consent not to be unreasonably withheld or
delayed) shall be required for assignments in respect of the Loans to a Person
who is not a Lender, an Affiliate of a Lender or an Approved Fund.

 

(iv)                    Assignment and Acceptance. 
The parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and the assignee, if it is not a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire; provided that the processing and recordation fee shall not
be required if the assignee is an Affiliate of the assigning Lender.

 

(v)                       No Assignment to Borrower or Affiliates.  No such assignment shall be made to the Borrower
or any of its Affiliates or Subsidiaries.

 

(vi)                    No Assignment to Natural Persons.  No such assignment shall be made to a natural
person.

 

Subject to acceptance and recording thereof by the
Administrative Agent pursuant to Section 13.12(b) hereof, from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party to this Agreement and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of
Sections 13.6 and 13.15 with respect to facts and circumstances occurring prior
to the effective date of such assignment. 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 13.11 hereof.

 

(b)                                 Register.  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Chicago, Illinois, a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(c)                                  Any
Lender may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement to secure obligations of such
Lender, including any such pledge or grant to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or 

 

49

 

grant of a security interest; provided
that no such pledge or grant of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or secured
party for such Lender as a party hereto; provided further, however,
the right of any such pledgee or grantee (other than any Federal Reserve Bank)
to further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise, shall be at all times subject to
the terms of this Agreement.

 

Section 13.13.                  Amendments.  Any provision of this Agreement or the other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Borrower, (b) the Required
Lenders, and (c) if the rights or duties of the Administrative Agent are
affected thereby, the Administrative Agent; provided that:

 

(i)                       no
amendment or waiver pursuant to this Section 13.13 shall (A) increase
any Commitment of any Lender without the consent of such Lender or
(B) reduce the amount of or postpone the date for any scheduled payment of
any principal of or interest on any Loan or of any fee payable hereunder
without the consent of the Lender to which such payment is owing or which has
committed to make such Loan hereunder;

 

(ii)                    no amendment
or waiver pursuant to this Section 13.13 shall, unless signed by each
Lender, change the definition of Required Lenders, change the provisions of
this Section 13.13, change the priority of payments contained in
Section 3.1 hereof, change the pro rata
sharing of payments contained in Section 13.7 hereof, release any material
guarantor (except as otherwise provided for in the Loan Documents), or affect
the number of Lenders required to take any action hereunder or under any other
Loan Document; and

 

(iii)                 no amendment to
Section 12 hereof shall be made without the consent of the
Guarantor(s) affected thereby.

 

Section 13.14.                  Headings.
Section headings used in this Agreement are for reference only and shall not
affect the construction of this Agreement.

 

Section 13.15.                  Costs and
Expenses; Indemnification. 
(a) The Borrower agrees to pay all reasonable costs and expenses of
the Administrative Agent in connection with the preparation, negotiation,
syndication, and administration of the Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, in connection with the preparation and execution of the
Loan Documents, and any amendment, waiver or consent related thereto, whether
or not the transactions contemplated herein are consummated, together with any
fees and charges suffered or incurred by the Administrative Agent in connection
with lien searches and with respect to any owned real property, periodic
environmental audits, fixed asset appraisals and title insurance policies.  The Borrower agrees to pay to the
Administrative Agent and each Lender, and any other holder of any Obligations
outstanding hereunder, all costs and expenses reasonably incurred or paid by
the Administrative Agent, such Lender, or any such holder, including reasonable
attorneys’ fees and disbursements and court costs, in connection with any
Default or Event of Default hereunder or in connection with the enforcement of
any of the Loan Documents (including all such costs and expenses 

 

50

 

incurred in connection with any proceeding under the
United States Bankruptcy Code involving the Borrower or any Guarantor as a
debtor thereunder).  The Borrower further
agrees to pay all reasonable costs and expenses incurred by the Administrative
Agent in protecting, preserving or enforcing rights under the Loan
Documents.  The Borrower further agrees
to indemnify the Administrative Agent, each Lender, and any security trustee
therefor, and their respective directors, officers, employees, agents,
financial advisors, and consultants (each such Person being called an “Indemnitee”) against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all reasonable fees and disbursements of counsel for any such Indemnitee and
all reasonable expenses of litigation or preparation therefor, whether or not
the Indemnitee is a party thereto, or any settlement arrangement arising from
or relating to any such litigation) which any of them may pay or incur arising
out of or relating to any Loan Document or any of the transactions contemplated
thereby or the direct or indirect application or proposed application of the
proceeds of any Loan, other than those which arise from the gross negligence or
willful misconduct of the party claiming indemnification.  The Borrower, upon demand by the
Administrative Agent or a Lender at any time, shall reimburse the
Administrative Agent or such Lender for any reasonable legal or other expenses
(including, without limitation, all reasonable fees and disbursements of
counsel for any such Indemnitee) incurred in connection with investigating or
defending against any of the foregoing (including any settlement costs relating
to the foregoing) except if the same is directly due to the gross negligence or
willful misconduct of the party to be indemnified.  To the extent permitted by applicable law, neither
the Borrower nor any Guarantor shall assert, and each such Person hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or the other Loan Documents or any agreement or instrument
contemplated hereby or thereby, the transactions contemplated hereby or
thereby, any Loan or the use of the proceeds thereof.  The obligations of the Borrower under this
Section shall survive the termination of this Agreement.

 

(b)                                 The
Borrower unconditionally agrees to forever indemnify, defend and hold harmless,
and covenants not to sue for any claim for contribution against, each
Indemnitee for any damages, costs, loss or expense, including without
limitation, response, remedial or removal costs and all fees and disbursements
of counsel for any such Indemnitee, arising out of any of the following:  (i) any presence, release, threatened
release or disposal of any hazardous or toxic substance or petroleum by the
Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), (ii) the operation or violation of any
environmental law, whether federal, state, or local, and any regulations
promulgated thereunder, by the Borrower or any Subsidiary or otherwise
occurring on or with respect to its Property (whether owned or leased),
(iii) any claim for personal injury or property damage in connection with
the Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), and (iv) the inaccuracy or breach of
any environmental representation, warranty or covenant by the Borrower or any
Subsidiary made herein or in any other Loan Document evidencing or securing any
Obligations or setting forth terms and conditions applicable thereto or
otherwise relating thereto, except for damages arising from the willful
misconduct or gross negligence of the relevant Indemnitee.  This indemnification shall survive the
payment and satisfaction of all Obligations and the termination of this
Agreement, and shall remain in force beyond the expiration of any applicable
statute of limitations and 

 

51

 

payment or satisfaction in full of any single claim
under this indemnification.  This
indemnification shall be binding upon the successors and assigns of the
Borrower and shall inure to the benefit of each Indemnitee and its successors and
assigns.

 

Section 13.16.                  Set-off.  In addition to any rights now or hereafter
granted under the Loan Documents or applicable law and not by way of limitation
of any such rights, upon the occurrence of any Event of Default, each Lender,
each subsequent holder of any Obligation, and each of their respective
affiliates, is hereby authorized by the Borrower and each Guarantor at any time
or from time to time, without notice to the Borrower, any Guarantor or to any
other Person, any such notice being hereby expressly waived, to set-off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured, and in whatever currency denominated, but not including
trust accounts) and any other indebtedness at any time held or owing by that
Lender, subsequent holder, or affiliate, to or for the credit or the account of
the Borrower or such Guarantor, whether or not matured, against and on account
of the Obligations of the Borrower or such Guarantor to that Lender or
subsequent holder under the Loan Documents, including, but not limited to, all
claims of any nature or description arising out of or connected with the Loan
Documents, irrespective of whether or not (a) that Lender or subsequent holder
shall have made any demand hereunder or (b) the principal of or the
interest on the Loans and other amounts due hereunder shall have become due and
payable pursuant to Section 9 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.

 

Section 13.17.                  Entire Agreement.  The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior agreements, whether written or oral, with respect thereto are superseded
hereby.

 

Section 13.18.                  Governing Law.  This Agreement and the other Loan Documents
(except as otherwise specified therein), and the rights and duties of the
parties hereto, shall be construed and determined in accordance with the
internal laws of the State of Illinois.

 

Section 13.19.                  Severability of
Provisions.  Any provision of any
Loan Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.  All rights, remedies and powers provided in
this Agreement and the other Loan Documents may be exercised only to the extent
that the exercise thereof does not violate any applicable mandatory provisions
of law, and all the provisions of this Agreement and other Loan Documents are
intended to be subject to all applicable mandatory provisions of law which may
be controlling and to be limited to the extent necessary so that they will not
render this Agreement or the other Loan Documents invalid or unenforceable.

 

Section 13.20.                  Excess Interest.  Notwithstanding any provision to the contrary
contained herein or in any other Loan Document, no such provision shall require
the payment or permit the collection of any amount of interest in excess of the
maximum amount of interest permitted by applicable law to be charged for the
use or detention, or the forbearance in the collection, of all or any portion
of the Loans or other obligations outstanding under this Agreement or any other

 

52

 

Loan Document (“Excess Interest”).  If any Excess Interest is provided for, or is
adjudicated to be provided for, herein or in any other Loan Document, then in
such event (a) the provisions of this Section shall govern and
control, (b) neither the Borrower nor any guarantor or endorser shall be
obligated to pay any Excess Interest, (c) any Excess Interest that the
Administrative Agent or any Lender may have received hereunder shall, at the
option of the Administrative Agent, be (i) applied as a credit against the
then outstanding principal amount of Obligations hereunder and accrued and
unpaid interest thereon (not to exceed the maximum amount permitted by
applicable law), (ii) refunded to the Borrower, or (iii) any
combination of the foregoing, (d) the interest rate payable hereunder or
under any other Loan Document shall be automatically subject to reduction to
the maximum lawful contract rate allowed under applicable usury laws (the “Maximum Rate”), and this Agreement and the other Loan
Documents shall be deemed to have been, and shall be, reformed and modified to
reflect such reduction in the relevant interest rate, and (e) neither the
Borrower nor any guarantor or endorser shall have any action against the
Administrative Agent or any Lender for any damages whatsoever arising out of
the payment or collection of any Excess Interest.  Notwithstanding the foregoing, if for any
period of time interest on any of Borrower’s Obligations is calculated at the
Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the rate of
interest payable on the Borrower’s Obligations shall remain at the Maximum Rate
until the Lenders have received the amount of interest which such Lenders would
have received during such period on the Borrower’s Obligations had the rate of
interest not been limited to the Maximum Rate during such period.

 

Section 13.21.                  Construction.  The parties acknowledge and agree that the
Loan Documents shall not be construed more favorably in favor of any party
hereto based upon which party drafted the same, it being acknowledged that all parties
hereto contributed substantially to the negotiation of the Loan Documents.  The provisions of this Agreement relating to
Subsidiaries shall only apply during such times as the Borrower has one or more
Subsidiaries.

 

Section 13.22.                  Lender’s
Obligations Several.  The obligations
of the Lenders hereunder are several and not joint.  Nothing contained in this Agreement and no
action taken by the Lenders pursuant hereto shall be deemed to constitute the
Lenders a partnership, association, joint venture or other entity.

 

Section 13.23.                  Submission to
Jurisdiction; Waiver of Jury Trial. 
The Borrower and the Guarantors hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Northern District of
Illinois and of any Illinois State court sitting in the City of Chicago  for purposes of all legal proceedings arising out of or
relating to this Agreement, the other Loan Documents or the transactions
contemplated hereby or thereby.  The
Borrower and the Guarantors irrevocably waive, to the fullest extent permitted
by law, any objection which they may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.  THE BORROWER, THE GUARANTORS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

53

 

Section 13.24.                  USA Patriot Act.  Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”)
hereby notifies the Borrower that pursuant to the requirements of the Act, it
is required to obtain, verify, and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in
accordance with the Act.

 

Section 13.25.                  Confidentiality.  Each of the Administrative Agent and the
Lenders severally agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and
its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors to the extent any such Person has
a need to know such Information (it being understood that the Persons to whom
such disclosure is made will first be informed of the confidential nature of
such Information and instructed to keep such Information confidential),
(b) to the extent requested by any regulatory authority (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies hereunder
or under any other Loan Document or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (A) any assignee of or
participant in, or any prospective assignee of or participant in, any of its
rights or obligations under this Agreement or (B) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower or any Subsidiary and its obligations, (g) with
the prior written consent of the Borrower, (h) to the extent such
Information (A) becomes publicly available other than as a result of a
breach of this Section or (B) becomes available to the Administrative
Agent or any Lender on a non-confidential basis from a source other than the
Borrower or any Subsidiary or any of their directors, officers, employees or
agents, including accountants, legal counsel and other advisors, (i) to
rating agencies if requested or required by such agencies in connection with a
rating relating to the Loans or Commitments hereunder, or (j) to entities
which compile and publish information about the syndicated loan market, provided that only basic information about the pricing and
structure of the transaction evidenced hereby may be disclosed pursuant to this
subsection (j).  For purposes of
this Section, “Information” means all
information received from the Borrower or any of the Subsidiaries or from any
other Person on behalf of the Borrower or any Subsidiary relating to the
Borrower or any Subsidiary or any of their respective businesses, other than
any such information that is available to the Administrative Agent or any
Lender on a non-confidential basis prior to disclosure by the Borrower or any
of its Subsidiaries or from any other Person on behalf of the Borrower or any
of the Subsidiaries.

 

[SIGNATURE PAGES TO FOLLOW]

 

54

 

This Bridge Loan Agreement is entered into between us
for the uses and purposes hereinabove set forth as of the date first above
written.

 

	
   

  	
  “BORROWER”

  
	
   

  	
   

  
	
   

  	
  DG FASTCHANNEL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Omar A. Choucair, Chief
  Financial Officer and Secretary

  
	
   

  	
   

  
	
   

  	
  “GUARANTOR”

  
	
   

  	
   

  
	
   

  	
  PATHFIRE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Omar A. Choucair,
  President

  

 

S-1

 

	
   

  	
  “ADMINISTRATIVE AGENT”

  
	
   

  	
   

  
	
   

  	
  BANK OF MONTREAL, as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
      Name

  	
   

  
	
   

  	
      Title

  	
   

  
					

 

S-2

 

	
   

  	
  “LENDERS”

  
	
   

  	
   

  
	
   

  	
  BANK OF MONTREAL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
      Name

  	
   

  
	
   

  	
      Title

  	
   

  
					

 

S-3EXHIBIT 10

EXHIBIT 10.1

DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT entered into as of the 30th day of September, 2005 (the “Effective Date”) by and between DEGUSSA WALL SYSTEMS, INC., a Delaware corporation ("Degussa") and JUST-RITE SUPPLY, INC., a Florida corporation (“Just-Rite”).  Degussa and Just-Rite may hereinafter be referred to individually as a “Party” or collectively as the “Parties.”

R E C I T A L S:

A.

Degussa and an affiliate of Just-Rite Supply, Inc. entered into that certain Asset Purchase Agreement as of July 25, 2005 (“Purchase Agreement”), whereby Degussa purchased certain of the assets associated with the manufacturing operations of Acrocrete, Inc. and the Acrocrete products produced in Acrocrete’s Kennesaw, Georgia manufacturing facility.

B.

Following the closing of the Purchase Agreement, Degussa will manufacture those certain Acrocrete products under the trade name “Acrocrete” as identified on Exhibit “A” hereto which were previously manufactured by Acrocrete, Inc. immediately prior to such closing (the “Products”).

C.

Degussa desires to appoint Just-Rite as its exclusive distributor of the Products in the States of Alabama, Florida, Georgia, Louisiana and Mississippi (the “Territory”) and Just-Rite has agreed to serve as the exclusive distributor of the Products in the Territory, subject to the terms and conditions hereof.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.

Recitations.  The above recitations are true and correct and are incorporated herein by this reference.

2.

Appointment.  Degussa hereby appoints Just-Rite as its exclusive distributor of the Products in the Territory.  Just-Rite shall have the exclusive right to sell to, solicit and take orders from customers within the Territory for the Products.  Just-Rite accepts such appointment and agrees to act as exclusive distributor within the Territory.  In connection therewith, Just-Rite agrees not to purchase products and supplies of other manufacturers for sale in the Territory that perform the same purpose as the Products, so long as the Products are available for purchase from Degussa.  Such exclusivity shall not impair Just-Rite’s ability to sell products which are manufactured by its affiliates.  

3.

Right of First Refusal.  During the term hereof, Degussa hereby grants to Just-Rite a Right of First Refusal to serve as the exclusive distributor in North Carolina or South Carolina, as the case may be, in the event either B&L in South Carolina or AllSouth in North Carolina ceases to be an exclusive distributor of the Products, and in the event Just-Rite, within a 

reasonable time of giving Degussa notice of its intention to do so, establishes a full service distribution facility (“New Territories”).  Just-Rite shall notify Degussa of the establishment of a new facility.  Upon such notification, and upon approval by Degussa based on the other conditions set forth in this Section 3, Just-Rite shall become the exclusive distributor for Products for the New Territories. 

4.

Just-Rite Duties.  Just-Rite agrees to use it best efforts to actively and diligently promote and sell the Products in the Territory.  Just-Rite shall purchase one hundred percent (100%) of its requirements of the Products from Degussa.  Just-Rite shall solicit and take orders from their potential customers at prices to be established from time to time by Just-Rite and on the terms and conditions specified by Just-Rite.   Decisions regarding customer credit and all matters relating to billing shall be made only by Just-Rite.  

5.

Degussa Duties.  Degussa shall use its best efforts to continuously and timely manufacture Products during the Term (as hereinafter defined) sufficient to meet the demands of Just-Rite.  Degussa shall sell to Just-Rite the Products upon the terms hereof and shall ship such Products to Just-Rite in a timely and commercially reasonable manner; provided, however, that Just-Rite shall be current under the payment terms set forth herein.  Degussa agrees that it will refer any inquiries of purchases of Products directly to Just-Rite as its exclusive distributor within the Territory.  Degussa will ship the Products FOB Degussa’s facility.  Just-Rite may give to Degussa direction for direct shipment from time to time to Just-Rite’s customers.  Upon receipt of such directions, Degussa agrees to directly ship the Products in accordance therewith and charge Just-Rite the cost of shipping.  Degussa shall provide to Just-Rite marketing materials, sales and product literature and general sales and marketing support comparable to the materials, literature and support provided by Degussa to distributors of its other product lines such as Finestone, Senergy and Sonowall Stucco Systems (the “Other Product Lines”).

6.

Trademark.  Degussa hereby grants to Just-Rite, a royalty free license to use the trademark “Acrocrete” (the “Trademark”) on and in connection with the promotion and sale of Products.  Such use shall at all times meet such commercially reasonable requirements with respect to style, appearance and quality as Degussa may establish from time to time to ensure that the standards of all products and promotions using the Trademark shall be maintained.  Just-Rite expressly agrees that it shall not have any right, title or interest in the Trademark, except as otherwise provided herein.  Nothing in this Agreement shall be construed to grant or assign to Just-Rite any additional right, title or interest in said Trademark.  Degussa makes no representation or warranty with respect to the ownership of any rights relating to the Trademark.

7.

Price of Products.  All sales of the Products by Degussa to Just-Rite shall be made at the pricing as set forth on Exhibit B.  Such pricing shall remain unchanged for a period of one year from the Effective Date.  After the one-year anniversary of the Effective Date, Degussa shall have the right to increase prices for the Products at a level commensurate with increases to Degussa’s Other Product Lines.

8.

Payment.  Payment for Products purchased by Just-Rite shall be paid two percent (2%) ten (10), net thirty (30) days.  All payments shall be paid to Degussa at the address indicated in the Notices section indicated below or such other address that Degussa shall provide to Just-Rite from time to time during the term of this Agreement.  In the event of termination of 

this Agreement all sums then unpaid shall continue to be payable on the terms and conditions set forth herein.

9.

Title and Risk of Loss.  Title and risk of loss or damage to Products shall pass from Degussa to Just-Rite upon delivery to the carrier at Degussa’s manufacturing facility.

10.

Minimum Purchase Requirements.

During the Term of this Agreement, and so long as Degussa continues to manufacture Products in sufficient quantity, Just-Rite shall purchase a minimum of Sixteen Million Dollars ($16,000,000) of Products and any other products sold or to be sold by Degussa during the Term, including Acrodry (“Degussa Products”) from Degussa (the “Purchase Requirement”).  In the event Just-Rite purchases less than the Purchase Requirement during the Term, then the following conditions shall apply: 

(a)

If Just-Rite purchases $12,000,000 in Products or less during the Term, then Just-Rite shall pay Degussa, not more than thirty (30) days after the expiration of the Term, a total of $2,300,000, representing a refund of the purchase price under the Purchase Agreement, plus thirty percent (30%) of the difference between $12,000,000 and $16,000,000. 

(b)

If Just-Rite purchases less than $16,000,000 but more than $12,000,000 in Products during the Term, then Just-Rite shall pay Degussa, not more than thirty (30) days after the expiration of the Term, an amount equal to thirty percent (30%) of the difference between $16,000,000 and the amount of Just-Rite’s purchases during the Term.  The amounts payable by Just-Rite in accordance with Sections 10(a) or (b) in the event that Just-Rite does not satisfy the Purchase Requirement shall be referred to herein as the “Shortfall Requirement.”

(c)

If Just-Rite’s purchases during the Term fall within the range contemplated in 10(b), above (i.e., more than $12,000,000, but less than $16,000,000), then Just-Rite may elect, within five business days of the expiration of the Term, to extend the Term for one additional period of two years (the “Extended Term”).  During the Extended Term, Just-Rite may “earn back” an amount up to the Shortfall Requirement owed under the calculation described in Section 10(b), above.  The “earn back” shall be earned by way of a commission (the “Commission”) of thirty percent (30%) of the amount by which Just-Rite’s purchases during the Extended Term exceeds two times the annual average of purchases during the Term.  At the end of the Extended Term, Just-Rite shall continue to be obligated to pay the difference between the Commission and the Shortfall Requirement set forth in Section 10(b), above. 

Open orders, not filled by Degussa on account of non-payment or other failures by Just-Rite to fulfill its obligations hereunder shall not be counted toward the Purchase Requirement.  Orders made by Just-Rite which are not fulfilled by Degussa when Just-Rite is not in default hereunder shall count toward the Purchase Requirement, provided that such unfilled orders shall have a thirty-day lead time and cannot represent more than four percent (4%) of the Purchase Requirement.

11.

Compliance with the Laws.  Each Party agrees to comply with all applicable laws and regulations relating to the manufacture, sale and distribution of Products.

12.

Independent Contractor.  In performing any services hereunder, Just-Rite shall operate as an independent contractor.  This Agreement shall not be deemed to create or constitute a fiduciary relationship, partnership or joint venture between Degussa and Just-Rite.  Neither party hereto shall have any authority to make contracts in the name of, or be binding on, the other party or to otherwise pledge the other party's credit.

13.

Governmental Approvals.  Each party shall be responsible for their respective governmental approvals related to the manufacture, distribution and sale of Products within the Territory.

14.

Term. 

(a)

Term.  This Agreement shall commence on the Effective Date, and shall terminate at the end of three (3) years (the “Term”), unless extended in accordance with Section 10 herein (the “Extended Term”) or otherwise terminated pursuant to the provisions hereof.

(b)

Automatic Extensions.  This Agreement shall be automatically extended for successive one (1) year periods at the end of the initial and each extended Term, unless either party provides written notice of termination to the other party at least one hundred twenty (120) days prior to the expiration of the initial or such extended term, respectively.  

(c)

Termination by Degussa.  Degussa may terminate this Agreement prior to the end of the Term hereof, upon one hundred twenty (120) days written notice for any default upon Just-Rite’s failure to cure any default of any term, provision or obligation of this Agreement within such notice periods.

(d)

Termination by Just-Rite.  Just-Rite may terminate this Agreement prior to the end of the Term hereof upon one hundred twenty (120) days written notice for any default upon Degussa’s failure to cure any default of any term, provision or obligation of this Agreement within such notice periods.

(e)

Liability upon Default.  Except as otherwise set forth in the Purchase Agreement, upon termination, the non-defaulting party shall not have any further liability to the defaulting party, except any obligations or liabilities, if any, which accrued before the termination date.

(f)

Post Termination.  Upon termination of this Agreement, all rights of Just-Rite to use the Tradename shall terminate, except for the completion of orders and contracts already made and to sell the remaining balance of Product Just-Rite has in inventory as of the date of the termination. All Degussa property in the possession of Just-Rite shall be returned to Degussa upon the effective date of such termination.  All other obligations of the parties that are intended to survive the termination of this Agreement shall remain in full force and effect.

15.

Product Standards.  Degussa agrees and acknowledges the importance of maintaining the Product standards and quality of production as exist on the date hereof.  In accordance therewith Degussa agrees to maintain the Products standards and to support the 

Tradename in a commercially reasonable manner.  Such Product standards shall include maintenance of all existing approvals of all applicable building code within the Territory and enhancing Product Standards to meet all other building codes that may arise hereafter similar to the enhancements on Other Product Lines.

16.

Claims and Warranties.

(a)

Degussa warrants to Just-Rite that the Products to be sold pursuant to the terms of this Agreement will at the time of delivery conform to the published specifications applicable to the Products (the "Specifications"). Degussa reserves the right to modify, change or alter the specifications as it deems reasonably appropriate or necessary.  Degussa warrants that the Products which are to be sold pursuant to the terms of this Agreement will be free from defects in the manufacture of material and will perform as stated by Degussa, if used in accordance with Degussa's published specifications applicable to the Product or Products sold, and the purpose for which the Products are intended to be used, if sold and used prior to their respective shelf expiration dates.  Degussa further warrants that the Products will be manufactured in accordance with applicable federal, state and local laws, regulations and orders.  Degussa disclaims all responsibility or liability with respect to, or arising from, any circumstances not related solely or principally to the manufacture of the Products.  Degussa reserves the right to have the true cause of any claimed defect determined by accepted industry test methods.  Any attempt to remedy or correct a claimed defect by persons or entities not authorized to perform such work by Degussa shall void this warranty.

(b)

THE FOREGOING WARRANTY IS GIVEN IN LIEU OF ALL OTHER WARRANTIES AND GUARANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING THE WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL DEGUSSA BE LIABLE OR OBLIGATED FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, REGARDLESS OF THE THEORY OF LIABILITY. IN NO EVENT SHALL THE LIABILITY OF DEGUSSA FOR ANY BREACH OF CONTRACT OR WARRANTY EXCEED THE PURCHASE PRICE FOR THE PRODUCTS IN QUESTION.

(c)

All claims made pursuant to this warranty must be received in writing by Degussa within a reasonable period of time after the date the defect was discovered, or through the exercise of reasonable inspection should have been discovered, but in no event shall any claim be recognized based on a claimed defect outside the time frame expressly set forth in the written warranty. 

(d)

If Just-Rite or its customer elects to use a Products in an application other than as recommended in writing by Degussa for such Products, then and in such event Degussa shall have no responsibility, obligation or liability in that regard.

(e)

Notwithstanding anything herein to the contrary, Degussa shall provide express written warranties comparable to Degussa’s warranties for its Other Product Lines.

17.

Representations.  Each Party hereby represents, warrants and covenants to the other as follows:

(a)

Right, Power and Authority.  It has full right, power and authority to enter into this Agreement and there is nothing which would prevent it from performing its obligations under the terms and conditions imposed on it by this Agreement.

(b)

Binding Obligation.  This Agreement constitutes a valid and binding obligation on it, enforceable in accordance with its terms.

(c)

No Consent of Third Parties Needed.  No consent of any trustee or holder of any of its indebtedness is or shall be required as a condition to the validity of this Agreement, 

(d)

No Proceedings Pending.  There is no action or proceeding pending or in so far as it knows or ought to know threatened against it before any court, administrative agency or other tribunal which might have a material adverse effect on its business or condition, financial or otherwise, or its operation of any business.  

(e)

Not Contravene Any Law.  Neither the execution nor the delivery of this Agreement by it nor its fulfillment of or compliance with the terms and provisions hereof shall contravene any provision of the laws of any jurisdiction, including, without limitation, any statute, rule, regulation, judgment, decree, order, franchise or permit applicable to it..

18.

Insurance.  Degussa shall, at all times during the term of this Agreement, maintain in force, at its sole expense, comprehensive public product liability insurance, including insurance against claims for property damage caused by, or occurring in conjunction with the Products.  Such insurance shall be maintained in the sum of $2,000,000 for product liability. Such insurance shall name Just-Rite as an additional insured under the policies.  Just-Rite shall, at all times during the Term of this Agreement, maintain in force, at its sole expense, commercial general liability insurance in a coverage amount equal to $2,000,000.  Such insurance shall name Degussa as an additional insured under the policy.

19.

Indemnification.

(a)

Just-Rite Indemnification.  Just-Rite shall indemnify and hold Degussa, its employees and agents harmless from and against all Damages (as hereinafter defined) arising out of or resulting of any action taken by Just-Rite its employees or agents in furtherance of this Agreement.

(b)

Degussa Indemnification. Degussa shall indemnify and hold Just-Rite, its affiliates and their respective employees and agents harmless from and against all Damages arising out of or resulting from Products sold by Just-Rite, including any claims relating to product liability or defective Products or from the action or inaction of Degussa in furtherance of this Agreement 

(c)

Damages.  Damages is defined as all actual damages, liabilities, obligations, penalties, fines, judgments, claims, deficiencies, losses, costs, expenses and assessments, including all attorneys' fees and costs, and interest accruing on such Damages incurred or suffered by the Indemnitee

(d)

Claims for Indemnification.  If a claim for Damages (a “Claim”) is to be made by any Party hereto (the “Indemnitee”), such Indemnitee shall give written notice (a “Claim Notice”) to the other Party (the “Indemnitor”) as soon as practicable after the Indemnitee becomes aware of any fact, condition or event which may give rise to Damages for which indemnification may be sought under this Agreement.  In the case of a Claim involving the assertion of a claim by a third party (whether pursuant to a lawsuit or other legal action or otherwise, a “Third-Party Claim”), (i) the Indemnitor shall be entitled, if it so elects, at its own cost, risk and expense, (A) to take control of the defense and investigation of such Third-Party Claim and (B) to pursue the defense thereof by appropriate actions or proceedings, including, without limitation, to employ and engage attorneys of its own choice reasonably acceptable to the Indemnitee to handle and defend the same, and (ii) the Indemnitor shall be entitled (but not obligated), if it so elects, to compromise or settle such claim, which compromise or settlement shall be made only with the written consent of the Indemnitee, such consent not to be unreasonably withheld.  In the event the Indemnitor elects to assume control of the defense and investigation of such lawsuit or other legal action in accordance with this Section 19, the Indemnitee may, at its own cost and expense, participate in the investigation, trial and defense of such Third-Party Claim.  If the Indemnitor fails to assume the defense of such Third-Party Claim in accordance with this Agreement within fifteen (15) calendar days after receipt of the Claim Notice, the Indemnitee shall (upon delivering notice to such effect to the Indemnitor) have the right to undertake, at the Indemnitor’s sole cost, risk and expense, the defense, compromise and settlement of such Third-Party Claim on behalf of and for the account of the Indemnitor; provided that such Third-Party Claim shall not be compromised or settled without the written consent of the Indemnitor, which consent shall not be unreasonably withheld.  In the event the Indemnitor assumes the defense of the claim, the Indemnitor shall keep the Indemnitee reasonably informed of the progress of any such defense, compromise or settlement, and in the event the Indemnitee assumes the defense of the claim, the Indemnitee shall keep the Indemnitor reasonably informed of the progress of any such defense, compromise or settlement.  The Indemnitor shall be liable for any settlement of any Third-Party Claim effected pursuant to and in accordance with this Section 19 and for any final judgment (subject to any right of appeal), and the Indemnitor agrees to indemnify and hold harmless Indemnitee from and against any and all Damages by reason of such settlement or judgment.

(e)

Suit to Enforce Rights.  If Indemnitee has not received full indemnification within thirty (30) days after making a demand and Indemnitor does not provide written notice disputing such indemnification rights, Indemnitee shall have the right to enforce its indemnification rights under this Agreement by commencing an action in any court of competent jurisdiction over the subject matter thereof and in which venue is proper, seeking an initial determination by the court or challenging a determination by the Indemnitors refusing indemnification.  The Indemnitor shall pay to the Indemnitee for all expenses including attorney's fees that are incurred by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for indemnification or payment of expenses by the Indemnitor under this Agreement.

(f)

Equitable Relief.  The parties agree and acknowledge that the indemnification provided for under this Agreement is unique, and that the parties hereto may obtain relief by way of injunction, specific performance and such other equitable relief to which they may be entitled.

20.

Confidentiality.  The provisions of this Section 20 shall survive the term hereof and shall be enforceable by the respective Parties by injunctive relief, without prejudice to the non-breaching Party’s other rights under this Agreement, by law or in equity.  In consideration for this Agreement and each Party’s performance hereunder, the parties agree as follows:

(a)

Each party may have access to certain of the other Party’s trade secrets, including but not limited to: business research, new product lines and objective strategies; sales; profits; pricing methods and other unpublished financial or pricing information; yields; facilities; methods and systems; customer and vendor lists; detailed information regarding customer requirements; customer preferences and modes of operation; key customer contracts; customer business habits and customer business plans (collectively, the “Confidential Information”).

(b)

Each Party agrees and acknowledges that they may not disclose to others or otherwise use for its own purposes, such Confidential Information of the other Party without the prior written consent of the Party who owns such Confidential Information; provided that such Party is free to use any information which is already in the public domain;

(c)

Each Party agrees that the term Confidential Information shall also apply to any trade secrets of any other company or third party with which such possessing Party has entered into a confidentiality Agreement related to such trade secrets to the extent such Party is bound thereby.

(d)

Upon termination of this Agreement, all Confidential Information shall be promptly returned to the owner of such Confidential Information, including any and all blueprints, drawings, manuals, letters, notes, notebooks,, reports and all other materials of a secret or confidential nature about the other Party’s business or their respective parents or affiliates.

21.

Full Disclosure.  All parties hereto acknowledge and agree that they and their respective counsel have had an opportunity to make detailed inquiry and investigation of all relevant facts and matters related to this Agreement and each other.  Each party agrees that they have not relied upon any representation, warranty or other information given or made by any other party hereto and has had the right and opportunity to satisfy themselves as to all matters related to the subject matter hereof.  Each party agrees that they have sufficient knowledge and experience, or have relied upon their own experts, in making the decision to enter into this Agreement.

22.

Regulatory Approval.  Each party agrees to take such further actions and execute such further instruments as may be required to obtain approval or consent of the matters 

contained herein by all federal, state and local governmental authorities, if such approval or consent is required.

23.

Force Majeure.  Each Party shall not be deemed to have defaulted or failed to perform hereunder if such Party’s inability to perform or default shall have been caused by an event or events beyond the control and without the fault of such Party, including without limitation, acts of government, embargoes, fire, flood, hurricanes, explosions, act of God or a public enemy, strikes, labor disputes, vandalism, civil riots or commotions, or the inability to procure necessary raw materials, supplies, or equipment.

24.

Severability.  In the event any provision of this Agreement or the application of such provision to any part shall be held by a court of competent jurisdiction to be contrary to any rule of law or public policy, the remaining provisions of this Agreement shall remain in full force and effect.

25.

Jurisdiction and Venue.  The parties acknowledge that a substantial portion of the negotiations, anticipated performance and execution of this Agreement occurred or shall occur in Jacksonville, Florida and that, therefore, each party irrevocably and unconditionally agree that:

(a)

any suit, action or legal proceeding arising out of or relating to this Agreement and the subject matter thereof shall be brought in the courts of record of the State of Florida in Duval County or the United States District Court Northern District of Florida,

(b)

consents to the jurisdiction of each such court in any suit, action or proceeding, and

(c)

waives any objection to the venue of any suit, action or proceeding in any such court.

26.

Further Assurances.  Each of the parties hereto agree that they will take such further action and execute all such further papers, documents and instruments as may be necessary or reasonably required by either of them to carry into effect the purposes and terms, conditions and provisions of this Agreement.

27.

Notice.  Any and all notices required or permitted to be served pursuant to the terms of this Agreement shall be in writing and shall be served (a) in person, (b) by hand delivery (c) via overnight delivery service by a nationally recognized service, (d) by facsimile, or (e) by registered or certified mail return receipt requested and postage pre-paid, as follows:

Degussa:

3550 St Johns Bluff Road

Jacksonville, Florida 32225

Telephone (904) 996-6345

Facsimile (904) 996-6061

Attention: Mr. Bill Kasik

With a copy to:

Degussa Corporation

23700 Chagrin Blvd.

Cleveland, OH 44122

Attn: Associate General Counsel

Fax No.: 216-839-8813

Just-Rite:

1259 N. W. 21st Street

Pompano Beach, Florida  33069

Telephone (954) 917-7665

Facsimile (954) 917-2775

Attention: Stephen Brown

or to such other address or facsimile number as the parties shall designate in writing.  Notice shall be deemed given three days after deposit in the United States Mail if sent registered or certified mail or upon receipt for any other form of delivery.

28.

Attorneys' Fees.  In the event of any litigation arising out of this Agreement, the prevailing parties in such suit or proceedings shall be entitled to receive from the non-prevailing parties all costs of prosecuting or defending such suit or proceedings, including, without limitation, reasonable attorneys' fees at trial and all appellate levels.

29.

Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of all parties hereto and their respective legal representatives, heirs, successors and permitted assigns.  This Agreement may not assigned whether by contract, operation of law or otherwise by either party without prior written consent of the other party, provided, however Degussa may, upon thirty (30) days' prior written notice, assign this Agreement to (a) a purchaser of substantially all of the assets or capital stock of Degussa or (b) an affiliate of Degussa, provided however in the event of an assignment to or merger with an affiliate, the surviving entity shall remain liable for performance hereunder.

30.

Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Florida.

31.

Construction of Agreement.  This Agreement shall not be construed more strictly against one Party than against the other merely by virtue of the fact that it may be prepared by counsel for one of the Parties, it being recognized that all the parties hereto have contributed substantially materially to the preparation of this Agreement.

32.

Entire Agreement.  This Agreement contains the sole and only agreement between the Parties with respect to the subject matter hereof and prior discussions, writings, proposals, letters of intent, oral representations and the like are merged herein.

33.

Execution by All Parties.  This Agreement shall have no force and effect unless and until it is executed by all of the Parties hereto.

34.

Amendments.  This Agreement may be amended only by an instrument in writing executed by the parties to be burdened hereby.

35.

Costs and Expenses.  Except as otherwise provided in this Agreement, each of the Parties to this Agreement shall bear their own expenses incurred in connection with the negotiation, preparation, execution and closing of this Agreement and the transaction contemplated hereby, including but not limited to legal fees and accounting fees.

36.

Remedies.  The right and remedies provided by this Agreement are cumulative, and the use of any one right or remedy by any Party hereto shall not preclude or constitute a waiver of its right to use any and all other remedies.  Such rights and remedies are given in addition to any other rights and remedies a party may have by law, statute or otherwise.

37.

Exhibits.  The Exhibits referred to herein are incorporated herein by this reference.

38.

Waiver.  Any forbearance, failure or delay by any of the parties hereto to exercise any right, power or remedy hereunder shall not be deemed a waiver of such right, power or remedy and any single or partial exercise of any such right, power or remedy hereunder shall not preclude the further exercise thereof and every right, power or remedy of either party shall continue in full force and effect unless waived specifically by an instrument in writing executed by such party.

39.

Counterparts.  This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

40.

Captions.  The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

DEGUSSA WALL SYSTEMS, INC., a 

Delaware corporation

By: /S/ WILLIAM R. KASIK

Name: WILLIAM R. KASIK

Title: President

JUST-RITE SUPPLY, INC., a Florida

corporation

By:/S/ HOWARD L. EHLER

Name: HOWARD L. EHLER, JR

Title: Vice President

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