Document:

exv10w78

Exhibit 10.78

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

December 7, 2010

among

SMITH & WESSON HOLDING CORPORATION,

SMITH & WESSON CORP.,

THOMPSON/CENTER ARMS COMPANY, INC.,

UNIVERSAL SAFETY RESPONSE, INC.,

FOX RIDGE OUTFITTERS, INC.,

BEAR LAKE HOLDINGS, INC.,

K.W. THOMPSON TOOL COMPANY, INC.,

O.L. DEVELOPMENT, INC.,

THOMPSON CENTER HOLDING CORPORATION,

and SMITH & WESSON DISTRIBUTING, INC.,

as Borrowers

and

The Lenders Party Hereto,

and

TD BANK, N.A.

as Administrative Agent

and

SOVEREIGN BANK

as Syndication Agent

 

TD SECURITIES (USA) LLC

As Sole Lead Arranger and Sole Bookrunner

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	Section 1.01. Defined Terms
	 	 	2	 
	Section 1.02. Classification of Loans and Borrowings
	 	 	25	 
	Section 1.03. Terms Generally
	 	 	25	 
	Section 1.04. Accounting Terms; GAAP
	 	 	25	 
	Section 1.05. Currency Equivalents
	 	 	26	 
	ARTICLE
II THE CREDITS
	 	 	26	 
	Section 2.01. Revolving Loans
	 	 	26	 
	Section 2.02. Repayments of Loans
	 	 	26	 
	Section 2.03. Swingline Loans
	 	 	27	 
	Section 2.04. Appointment of Borrowers’ Representative
	 	 	28	 
	Section 2.05. Procedure for Borrowing
	 	 	28	 
	Section 2.06. Funding of Loans
	 	 	29	 
	Section 2.07. Interest Elections
	 	 	29	 
	Section 2.08. Interest
	 	 	30	 
	Section 2.09. Alternate Rate of Interest
	 	 	30	 
	Section 2.10. Termination and Reduction of Commitments
	 	 	31	 
	Section 2.11. Optional Prepayment of Loans
	 	 	32	 
	Section 2.12. Fees and Other Charges
	 	 	32	 
	Section 2.13. Payments Generally; Administrative Agent’s Clawback
	 	 	33	 
	Section 2.14. Letters of Credit
	 	 	35	 
	Section 2.15. Sharing Payments by Lenders
	 	 	38	 
	ARTICLE
III ILLEGALITY, INCREASED COSTS, BREAK FUNDING AND TAXES
	 	 	39	 
	Section 3.01. Illegality
	 	 	39	 
	Section 3.02. Increased Costs
	 	 	39	 

i

 

	 	 	 	 	 
	 	 	 	 
	Section 3.03. Break Funding
	 	 	40	 
	Section 3.04. Mitigation Obligations; Replacement of Lenders
	 	 	40	 
	Section 3.05. Taxes
	 	 	41	 
	ARTICLE
IV CONDITIONS
	 	 	43	 
	Section 4.01. Effective Date
	 	 	43	 
	Section 4.02. Each Revolving Loan
	 	 	47	 
	Section 4.03. Each Letter of Credit
	 	 	47	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	48	 
	Section 5.01. Existence, Qualification and Power; Compliance with Laws
	 	 	48	 
	Section 5.02. Authorization; No Contravention
	 	 	48	 
	Section 5.03. Governmental Authorization; Other Consents
	 	 	48	 
	Section 5.04. Binding Effect
	 	 	49	 
	Section 5.05. Financial Condition; No Material Adverse Change
	 	 	49	 
	Section 5.06. Properties
	 	 	49	 
	Section 5.07. Litigation and Environmental Matters
	 	 	50	 
	Section 5.08. Compliance with Laws and Agreements
	 	 	50	 
	Section 5.09. Investment Company Status
	 	 	50	 
	Section 5.10. Taxes
	 	 	50	 
	Section 5.11. ERISA
	 	 	51	 
	Section 5.12. Margin Regulations
	 	 	51	 
	Section 5.13. Disclosure
	 	 	51	 
	Section 5.14. Material Agreements
	 	 	51	 
	Section 5.15. Solvency
	 	 	51	 
	Section 5.16. Insurance
	 	 	52	 
	Section 5.17. Capitalization and Subsidiaries
	 	 	52	 
	Section 5.18. Security Interest in Collateral
	 	 	52	 
	Section 5.19. Employment Matters
	 	 	53	 

ii

 

	 	 	 	 	 
	 	 	 	 
	Section 5.20. Affiliate Transactions
	 	 	53	 
	Section 5.21. OFAC; PATRIOT Act
	 	 	53	 
	Section 5.22. Intellectual Property Matters
	 	 	53	 
	Section 5.23. Use of Proceeds
	 	 	54	 
	ARTICLE
VI AFFIRMATIVE COVENANTS
	 	 	54	 
	Section 6.01. Financial Statements and Other Information
	 	 	54	 
	Section 6.02. Notices of Material Events
	 	 	55	 
	Section 6.03. Existence; Conduct of Business
	 	 	56	 
	Section 6.04. Payment of Obligations
	 	 	56	 
	Section 6.05. Maintenance of Properties
	 	 	56	 
	Section 6.06. Books and Records; Inspection Rights
	 	 	56	 
	Section 6.07. Compliance with Laws
	 	 	57	 
	Section 6.08. Use of Proceeds and Letters of Credit
	 	 	57	 
	Section 6.09. Insurance
	 	 	57	 
	Section 6.10. Casualty and Condemnation
	 	 	58	 
	Section 6.11. Appraisals
	 	 	58	 
	Section 6.12. Depository Banks
	 	 	58	 
	Section 6.13. Additional Collateral; Further Assurances
	 	 	58	 
	ARTICLE
VII NEGATIVE COVENANTS
	 	 	59	 
	Section 7.01. Indebtedness
	 	 	59	 
	Section 7.02. Liens
	 	 	61	 
	Section 7.03. Fundamental Changes
	 	 	61	 
	Section 7.04. Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	62	 
	Section 7.05. Asset Sales
	 	 	63	 
	Section 7.06. Sale and Leaseback Transactions
	 	 	64	 
	Section 7.07. Swap Agreements
	 	 	64	 
	Section 7.08. Restricted Payments; Certain Payments of Indebtedness
	 	 	64	 

iii

 

	 	 	 	 	 
	 	 	 	 
	Section 7.09. Transactions with Affiliates
	 	 	65	 
	Section 7.10. Restrictive Agreements
	 	 	65	 
	Section 7.11. Amendment of Certain Documents
	 	 	65	 
	Section 7.12. Financial Covenants
	 	 	66	 
	ARTICLE VIII EVENTS OF DEFAULT
	 	 	66	 
	Section 8.01. Events of Default
	 	 	66	 
	Section 8.02. Remedies Upon Event of Default
	 	 	68	 
	Section 8.03. Application of Funds
	 	 	69	 
	ARTICLE IX ADMINISTRATIVE AGENT
	 	 	70	 
	Section 9.01. Appointment and Authority
	 	 	70	 
	Section 9.02. Rights as a Lender
	 	 	70	 
	Section 9.03. Exculpatory Provisions
	 	 	70	 
	Section 9.04. Reliance by Administrative Agent
	 	 	71	 
	Section 9.05. Delegation of Duties
	 	 	72	 
	Section 9.06. Resignation of Administrative Agent
	 	 	72	 
	Section 9.07. Non-Reliance on Administrative Agent and Other Lenders
	 	 	73	 
	Section 9.08.
No Other Duties, Etc.
	 	 	73	 
	Section 9.09. Administrative Agent May File Proofs of Claim
	 	 	73	 
	Section 9.10. Collateral Matters
	 	 	74	 
	ARTICLE X MISCELLANEOUS
	 	 	75	 
	Section 10.01.
Amendments, Etc.
	 	 	75	 
	Section 10.02. Notices; Effectiveness; Electronic Communication
	 	 	76	 
	Section 10.03. No Waiver; Cumulative Remedies
	 	 	79	 
	Section 10.04. Expenses; Indemnity; Damage Waiver
	 	 	79	 
	Section 10.05. Payments Set Aside
	 	 	80	 
	Section 10.06. Successors and Assigns
	 	 	81	 
	Section 10.07. Treatment of Certain Information; Confidentiality
	 	 	84	 

iv

 

	 	 	 	 	 
	 	 	 	 
	Section 10.08. Right of Setoff
	 	 	85	 
	 
	 	 	 	 
	Section 10.09. Interest Rate Limitation
	 	 	85	 
	 
	 	 	 	 
	Section 10.10. Counterparts; Integration; Effectiveness
	 	 	85	 
	 
	 	 	 	 
	Section 10.11. Survival of Representations and Warranties
	 	 	86	 
	 
	 	 	 	 
	Section 10.12. Severability
	 	 	86	 
	 
	 	 	 	 
	Section 10.13. Replacement of Lenders
	 	 	86	 
	 
	 	 	 	 
	Section 10.14. Governing Law, Jurisdiction, Etc
	 	 	86	 
	 
	 	 	 	 
	Section 10.15. Waiver of Jury Trial
	 	 	87	 
	 
	 	 	 	 
	Section 10.16. USA PATRIOT Act Notice
	 	 	88	 
	 
	 	 	 	 
	Section 10.17. Judgment Currency
	 	 	88	 
	 
	 	 	 	 
	Section 10.18. No Advisory or Fiduciary Responsibility
	 	 	88	 
	 
	 	 	 	 
	Section 10.19.
All Obligations to Constitute Joint and Several Obligations
	 	 	89	 
	 
	 	 	 	 
	ARTICLE
XI AMENDMENT AND RESTATEMENT
	 	 	91	 
	 
	 	 	 	 
	Section 11.01. Acknowledgements
	 	 	91	 
	 
	 	 	 	 
	Section 11.02. Effect of this Agreement
	 	 	91	 

	 	 	 	 	 
	Schedule 2.01
	 	Applicable Percentage	 	 
	Schedule 5.06
	 	Real Property	 	 
	Schedule 5.07
	 	Disclosed Matters	 	 
	Schedule 5.14
	 	Material Agreement	 	 
	Schedule 5.16
	 	Insurance	 	 
	Schedule 5.17
	 	Subsidiaries	 	 
	Schedule 5.20
	 	Affiliate Transactions	 	 
	Schedule 6.12
	 	Deposit and Investment Accounts	 	 
	Schedule 7.01(b)
	 	Indebtedness	 	 
	Schedule 7.02(c)
	 	Liens	 	 
	Schedule 7.04(b)
	 	Investments	 	 
	Schedule 7.06
	 	Sale and Leaseback Transactions	 	 
	Schedule 7.10
	 	Restrictive Agreements	 	 
	Schedule 10.02(a) 
	 	Lenders’ Notice Addresses	 	 
	 
	 	 	 	 
	EXHIBIT A
	 	ASSIGNMENT AND ASSUMPTION AGREEMENT	 	 
	EXHIBIT B
	 	BORROWING REQUEST	 	 
	EXHIBIT C
	 	COMPLIANCE CERTIFICATE	 	 
	EXHIBIT D
	 	CONVERSION/CONTINUATION NOTICE	 	 
	EXHIBIT E-1
	 	REVOLVING LINE NOTE	 	 
	EXHIBIT E-2
	 	SWINGLINE NOTE	 	 
	EXHIBIT F
	 	JOINDER AGREEMENT	 	 

v

 

     AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 7, 2010 (as it may be amended,
restated or modified from time to time, this “Agreement”), by and among SMITH & WESSON
HOLDING CORPORATION, a Nevada corporation (“Holdings”), SMITH & WESSON CORP., a Delaware
corporation (the “S&W Corp.”), THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire
corporation (“TCAC”), THOMPSON CENTER HOLDING CORPORATION, a Delaware corporation
(“TCHC”), UNIVERSAL SAFETY RESPONSE, INC., a Delaware corporation (“USR”), FOX
RIDGE OUTFITTERS, INC., a New Hampshire corporation (“FRO”), K.W. THOMPSON TOOL COMPANY,
INC., a New Hampshire corporation (“KWTTC”), O.L. DEVELOPMENT, INC., a New Hampshire
corporation (“OLD”), BEAR LAKE HOLDINGS, INC., a Delaware corporation (“BLH”), and
SMITH & WESSON DISTRIBUTING, INC., a Delaware corporation (“Distributing”) and such other
Persons joined hereto as a Borrower from time to time (each a “Borrower” and, together the
“Borrowers”), TD BANK N.A., a national banking association, in its capacity as agent for
itself and the other Lenders (in said capacity, the “Administrative Agent”), SOVEREIGN
BANK, a Federal savings bank, in its capacity as Syndication Agent (in said capacity, the
“Syndication Agent”), and each lender from time to time party hereto (collectively, the
“Lenders”, and individually, a “Lender”).

     The parties hereto hereby agree as follows:

     A. Certain of the Borrowers, certain of the Lenders, and the Administrative Agent are
currently party to that certain Credit Agreement dated as of November 30, 2007, as amended (as
amended, the “Existing Credit Agreement”).

     B. The Borrowers have requested that the Existing Credit Agreement be amended in certain
respects as described below to, inter alia, (i) provide for Revolving Commitments from new Lenders,
(ii) extend the maturity date and (iii) make certain additional modifications to the Existing
Credit Agreement. For the sake of clarity and convenience, the Borrowers have requested that the
Existing Credit Agreement be restated as so amended.

     C. The Borrowers have requested that certain of the Lenders continue to extend credit to it,
and those Lenders, upon the occurrence of the Effective Date and subject to the terms hereof, will
continue to lend monies and/or make advances, extensions of credit or other financial
accommodations to, on behalf of or for the benefit of the Borrowers.

     D. The parties hereto intend that this Agreement shall not constitute a novation of the
obligations and liabilities existing under the Existing Credit Agreement and the other Loan
Documents (as defined in the Existing Credit Agreement) or evidence repayment of any such
obligations and liabilities, but rather that this Agreement shall amend and restate in its entirety
the Existing Credit Agreement and re-evidence the obligations of the Borrowers (as defined in the
Existing Credit Agreement) and the other Loan Parties (as defined in the Existing Credit Agreement)
outstanding thereunder, as well as evidence of the additional obligations of the Borrowers to the
Lenders, the LC Issuer and the Administrative Agent provided for herein.

     In consideration of the mutual covenants herein contained, the parties hereto hereby agree as
follows:

1

 

ARTICLE I

Definitions

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

     “Account” means all now owned or hereafter acquired or arising accounts, as defined in
the UCC, including any rights to payment for the sale or lease of goods or rendition of services,
whether or not they have been earned by performance.

     “Accountants” means BDO Seidman, LLP or other independent certified public accountants
of nationally-recognized standing.

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

     “Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which any Borrower (a) acquires any going business
or all or substantially all of the assets of any Person, whether through purchase of assets, merger
or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of directors or other
similar management personnel of a Person (other than Equity Interests having such power only by
reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a
Person.

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

     “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

     “Alternative Currency” means each of Euro, Yen and each other currency (other than
Dollars) that is approved by the Administrative Agent and the LC Issuer.

     “Applicable Margin” means:

               (a) (i) during the period commencing on the date hereof and ending on the date of delivery of
the Compliance Certificate for the fiscal quarter ending October 31, 2010, the Applicable Margin
for all Loans and unused line fees shall be set at Level 5 on the grid below, and (ii) at all times
during each Interest Period thereafter the Applicable Margin as of any date of determination shall
be determined based upon the Consolidated Leverage Ratio as of the Determination Date immediately
preceding such date as indicated in the following table:

2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Applicable Margin	 	 	 	 
	 	 	 	 	for Revolving	 	Applicable Margin	 	 
	 	 	 	 	Loan (per annum	 	for Revolving	 	 
	 	 	Consolidated	 	rates) for Base	 	Loan (per annum	 	 
	 	 	Leverage	 	Rate Loans and	 	rates) for LIBOR	 	Unused
	 	 	Ratio	 	Swingline Loans	 	Loans	 	Revolver Fee
	Level 1

	 	Greater than
3.00:1.00
	 	 	2.50	%	 	 	3.50	%	 	 	0.75	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level 2

	 	Greater than
2.50:1.00 but less
than or equal to
3.00:1.00
	 	 	2.25	%	 	 	3.25	%	 	 	0.625	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level 3

	 	Greater than
2.00:1.00 but less
than or equal to
2.50:1.00
	 	 	2.00	%	 	 	3.00	%	 	 	0.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level 4

	 	Greater than
1.50:1.00 but less
than or equal to
2.00:1.00
	 	 	1.75	%	 	 	2.75	%	 	 	0.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level 5

	 	Greater than
1.00:1.00 but less
than or equal to
1.50:1.00
	 	 	1.50	%	 	 	2.50	%	 	 	0.375	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level 6

	 	Equal to or less
than 1.00:1.00
	 	 	1.25	%	 	 	2.25	%	 	 	0.25	%

If any Compliance Certificate has not been delivered to the Administrative Agent within the time
periods specified in Section 6.01(c), then until the Determination Date, the highest rate set forth
above shall apply

     “Applicable Percentage” means the initial Applicable Percentage of each Lender in
respect of the Revolving Commitment and the LC Commitment as set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such percentage may be adjusted from time to time in
accordance with the terms hereof.

     “Applicable Revolving Loan Percentage” means the initial Applicable Percentage of each
Lender in respect of each Revolving Loan as set forth opposite the name of such Lender on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such percentage may be adjusted from time to time in accordance
with the terms hereof.

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

3

 

     “Asset Sale” means any sale, transfer or other disposition (including a sale and
leaseback transaction) of any property or asset of any Borrower in excess of $5,000,000, other than
dispositions described in Section 7.05(a).

     “Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

     “Assignment and Assumption” means an Assignment and Assumption, substantially in the
form of Exhibit A.

     “Bank Products Documents” means all agreements entered into from time to time by any
Borrower in connection with Cash Management Obligations, Swap Obligations and Foreign Exchange
Obligations and shall include the Cash Management Agreements and Swap Agreements.

     “Base Rate” means, at any time, a fluctuating rate per annum equal to the higher of
(a) the rate published from time to time by The Wall Street Journal as the U.S. Prime Rate
(if such U.S. Prime Rate is expressed as a range, then the top of such range will be used) or, in
the event The Wall Street Journal ceases publication of such U.S. Prime Rate, the base,
reference or other rate then designated by the Administrative Agent, in its sole discretion, for
general commercial loan reference purposes or (b) the sum of (i) the Federal Funds Rate
plus (ii) one-half of one percent (1/2%). It is acknowledged by the parties to this
Agreement that the Base Rate is a reference rate, not necessarily the lowest rate of interest
charged, which serves as the basis upon which effective interest rates are calculated for loans
making reference thereto. The effective interest rate for the Revolving Loans, Swingline Loans and
LC Borrowings will change on the date of each change in the U.S. Prime Rate (as published in
The Wall Street Journal, as aforesaid) or, if such U.S. Prime Rate is not so published, on
the date of each change in the rate designated by the Administrative Agent as provided above.

     “Base Rate Basis” means a simple interest rate equal to the sum of (i) the Base Rate
and (ii) the Applicable Margin applicable to Base Rate Loans. The Base Rate Basis shall be
adjusted automatically as of the opening of business on the effective date of each change in the
Base Rate to account for such change, and shall also be adjusted to reflect changes of the
Applicable Margin applicable to Base Rate Loans.

     “Base Rate Loans” means Loans the rate of interest applicable as to which is the Base
Rate Basis.

     “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

     “Bonded Accounts” means any Account arising from a transaction in which USR’s
performance is or has been supported or secured by a performance bond, and such Account secures, or
is subject to, the claim of a bonding company, insurer or indemnitor.

     “Bonded Contract Equipment” means any Equipment of USR that is to be used by USR to
manufacture Bonded Inventory sold under government contract that is secured by a performance bond,
and that such Equipment secures, or subject to, the claim of a bonding company, insurer or
indemnitor.

     “Bonded Inventory” means any and all Inventory used or to be used by USR in a
transaction in which such USR’s performance is or has been supported or secured by a performance
bond or similar undertaking, and such Inventory secures, or is subject to, the claim of a bonding
company, insurer or indemnitor.

4

 

          “Borrower(s)” has the meaning assigned to it in the Preamble.

          “Borrower Representative” has the meaning assigned to such term in Section 2.04.

          “Borrowing(s)” means, individually and collectively as the context may require,
Revolving Borrowing(s) and/or a Swingline Loan, but does not include any LC Borrowings.

          “Borrowing Request” means a written request by the Borrower Representative for a
Revolving Borrowing in accordance with Section 2.05, which request shall be made in the form of
Exhibit B.

          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks are required or permitted by law to close in the State of New York,

          “Capital Expenditures” of any Person means, without duplication, any expenditure or
commitment to expend money for any purchase or other acquisition of any asset which would be
classified as a fixed or capital asset on a balance sheet of such Person prepared in accordance
with GAAP.

          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

          “Cash Management Bank” means (i) TD Bank or (ii) any other financial institution that,
from time to time, enters into a Deposit Account Control Agreement.

          “Cash Management Agreements” means, collectively, one or more agreements entered into
from time to time by TD Bank with any Borrower and/or the Borrower Representative relating to cash
management services regarding one or more of the Deposit Accounts, as such agreement(s) may be
amended, restated or modified from time to time.

          “Cash Management Obligations” means any and all obligations of any Borrower, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions therefor) in
connection with Cash Management Services.

          “Cash Management Services” means any treasury management services provided to any
Borrower by any Lender or any of its Affiliates including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, overdrafts and interstate
depository network services.

          “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof), of Equity Interests representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of any Borrower; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of any Borrower by
Persons who were neither (i) nominated by the board of directors of such Borrower nor (ii)
appointed by directors so nominated; (c) the acquisition of direct or indirect Control of any
Borrower by any Person or group; or (d) Holdings shall cease to own, directly or indirectly, free
and clear of all Liens or other encumbrances, at least 100% of the outstanding Equity Interests of
any Subsidiary except as may result from any merger, consolidation or other reorganization
permitted under this Agreement, including Section 7.03.

5

 

          “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by the Administrative Agent, any Lender, by any lending office of the Administrative
Agent or any Lender or by the Administrative Agent’s or any Lender’s holding company, if any with
any request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

          “Class” means, when used in reference to any Loan or Borrowing, whether such Loan or
the Loans or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

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

          “Collateral” means any and all property owned, leased or operated by a Person covered
by the Collateral Documents and any and all other property of any Borrower, now existing or
hereafter acquired, that may at any time be or become subject to a security interest or Lien in
favor of the Administrative Agent, to secure the Obligations.

          “Collateral Access Agreement” means any landlord waiver or other similar agreement
between the Administrative Agent and any third party (including any bailee or consignee) in
possession of Collateral or any landlord of any Borrower for any leased premises where Collateral
is located, as any such waiver or similar agreement may be amended, restated or otherwise modified
from time to time.

          “Collateral Documents” means, collectively, this Agreement, the Security Agreement,
the Mortgages, the Hazardous Materials Indemnity Agreement, the Environmental Reserve Account
Agreement, each Deposit Account Control Agreement and any other documents now or hereafter executed
and delivered to the Administrative Agent granting a Lien upon the Collateral as security for
payment of the Obligations, as the same may be amended, restated or otherwise modified from time to
time.

          “Commitment(s)” means each and all of the Revolving Commitments and the LC Commitment,
as each such Commitment may be changed from time to time pursuant to this Agreement.

          “Companies” means Holdings and each of its direct and indirect Subsidiaries,
including, without limitation, S&W Corp., TCAC and USR.

          “Compliance Certificate” means a certificate, signed and certified as accurate and
complete by a Financial Officer of the Borrower Representative, in substantially the form of
Exhibit C or another form which is acceptable to the Administrative Agent in its Permitted
Discretion.

          “consolidated” means the combined financial information and results of Holdings and
all its Subsidiaries taken as a whole, after netting out intercompany accounts and transactions.

          “consolidating” means the individual financial information and results of each of
Holdings and its Subsidiaries taken on a stand alone basis before making any adjustments for
intercompany accounts and transactions.

          “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period
plus (a) without duplication and to the extent deducted in determining Consolidated Net
Income for such period, the sum of (i) Consolidated Interest Expense for such period, (ii) income
tax expense (with a deduction in case of income tax benefit) for such period, (iii) all amounts
attributable to depreciation and

6

 

amortization expense for such period, (iv) any extraordinary charges for such period, (v) any
non-cash charges for such period related to stock options and restricted stock granting, and (vi)
any other nonrecurring non-cash charges for such period (but excluding any non-cash charge in
respect of an item that was included in Consolidated Net Income in a prior period), minus
(b) without duplication and to the extent included in Consolidated Net Income, any extraordinary
gains and any non-cash items of income for such period, all calculated for the Companies on a
consolidated basis in accordance with GAAP.

          Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to Permitted
Acquisitions and Asset Sales consummated at any time on or after the first day of the relevant Test
Period as if each Permitted Acquisition had been effected on the first day of such period and as if
each such Asset Sales had been consummated on the day prior to the first day of such period,
provided, that such calculation of Consolidated EBITDA shall be subject to the Administrative
Agent’s prior written approval of the pro forma calculations.

          “Consolidated Fixed Charge Coverage Ratio” means the ratio, determined as of the end
of each fiscal quarter of Holdings for the most-recently ended Test Period, of (a) Consolidated
EBITDA, plus Consolidated Rental Expense, minus the unfinanced portion of Capital
Expenditures minus cash taxes paid, minus dividends and distributions paid in cash,
to (b) Consolidated Fixed Charges, all calculated for the Companies on a consolidated basis in
accordance with GAAP.

          “Consolidated Fixed Charges” means, with reference to any period, without duplication,
cash Consolidated Interest Expense for such period, plus Consolidated Rental Expense paid
during such period, plus scheduled principal payments on Indebtedness made during such
period, plus Capital Lease Obligation payments made during such period, all calculated on a
consolidated basis for Holdings and its Subsidiaries for such period in accordance with GAAP.

          “Consolidated Interest Expense” means, with reference to any period, the interest
expense (including that attributable to Capital Lease Obligations) of Holdings and its Subsidiaries
for such period with respect to all outstanding Indebtedness of Holdings and its Subsidiaries
(including all commissions, discounts and other fees and charges owed with respect to letters of
credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest
rates to the extent such net costs are allocable to such period in accordance with GAAP),
calculated on a consolidated basis for Holdings and its Subsidiaries for such period in accordance
with GAAP.

          “Consolidated Leverage Ratio” means the ratio, determined as at the end of each fiscal
quarter of Holdings, of (a) Total Funded Debt on such date to (b) Consolidated EBITDA for the Test
Period ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the
last day of the fiscal quarter most recently ended prior to such date), provided that
solely for purposes of Section 7.12, to the extent Holdings or any Subsidiary makes any Acquisition
permitted pursuant to Section 7.04 or disposition of assets outside the ordinary course of business
that is permitted by Section 7.05 during the Test Period of Holdings most recently ended, the
Consolidated Leverage Ratio shall be calculated after giving pro forma effect thereto (including
pro forma adjustments arising out of events which are directly attributable to the acquisition or
the disposition of assets, are factually supportable and are expected to have a continuing impact,
in each case as determined on a Pro Forma Basis as certified by the Financial Officer of Holdings).

          “Consolidated Net Income” means, for any period, the consolidated net income (or loss)
of Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with Holdings or any of
its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary) in which
Holdings or any of its Subsidiaries has an

7

 

ownership interest, except to the extent that any such income is actually received by Holdings
or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed
earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.

          “Consolidated Rental Expense” means for any period, all obligations in respect of
fixed, base and contingent rent paid or due by Holdings or any of its Subsidiaries, on a
consolidated basis, during such period under any rental agreements or leases of real or personal
property (other than Capital Lease Obligations).

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

          “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

          “Conversion/Continuation Notice” means a written request by the Borrower
Representative for a conversion or continuation of the interest rate on a Loan in accordance with
Sections 2.05, 2.06 and 2.07, which notice shall be in the form of Exhibit D.

          “Convertible Notes” means the 4% Senior Convertible Notes due 2026 issued by Holdings,
as issuer.

          “Convertible Notes Documents” means the Convertible Notes, the Convertible Notes
Indenture and all other supplements, agreements and instruments executed in connection therewith,
as the same may be amended or supplemented from time to time to the extent permitted under this
Agreement.

          “Convertible Notes Indenture” means that certain Indenture dated as of December 15,
2006 between Holdings and the Convertible Notes Trustee relating to the Convertible Notes.

          “Convertible Notes Trustee” means The Bank of New York Trust Company, N.A., as trustee
under the Convertible Notes Indenture.

          “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

          “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Revolving Loans required to be funded by it hereunder within one Business Day of the date required
to be funded by it hereunder, (b) has failed to fund any portion of its participations in Swingline
Loans, (c) has otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the date when due,
unless the subject of a good faith dispute or (d) has been deemed insolvent or become the subject
of a bankruptcy, insolvency or similar proceeding.

          “Deposit Account Agreements” means, collectively, one or more agreements entered into
from time to time by TD Bank with any Borrower and/or the Borrower Representative relating to the
opening and/or establishment of one or more Deposit Accounts, as such agreement(s) may be amended,
restated or modified from time to time.

8

 

          “Deposit Accounts” means, collectively, those certain deposit accounts of any Borrower
and/or the Borrower Representative maintained with TD Bank from time to time pursuant to the
Deposit Account Agreements and described in and subject to the Cash Management Agreements.

          “Deposit Account Control Agreement” means any agreement, in form and substance
satisfactory to the Administrative Agent, providing (i) that all items received or deposited in a
deposit account on behalf of any Borrower are pledged to the Administrative Agent, and that the
bank in which such deposit account is maintained will comply with instructions originated by the
Administrative Agent directing disposition of the funds in such deposit account without further
consent by such Borrower, and (ii) such other substantially similar terms and conditions to which
the Administrative Agent in its sole discretion may consent in writing.

          “Determination Date” means the third (3rd) Business Day after the Administrative
Agent’s receipt of each Compliance Certificate in accordance with the requirements of Section
6.01(c).

          “Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 5.07.

          “Dollar” and “$” mean lawful money of the United States.

          “Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in
Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency,
the equivalent amount thereof in Dollars as determined by the Administrative Agent or the LC
Issuer, as the case may be, at such time on the basis of the Spot Rate for the purchase of Dollars
with such Alternative Currency.

          “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any
political subdivision of the United States of America.

          “Effective Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 10.01).

          “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
Representative (each such approval not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include Holdings or any of
Holdings’ Affiliates or Subsidiaries.

          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.

          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) material
violation of any Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

9

 

          “Environmental Reserve Account Agreement” means that certain Environmental Reserve
Account Agreement of even date herewith executed by the Borrowers and the Administrative Agent, the
form and substance of which shall be reasonably satisfactory to the Administrative Agent, as the
same may be amended, restated, extended, replaced or otherwise modified from time to time.

          “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.

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

          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with any Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the thirty
(30) day notice period is waived); (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by any Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any
of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from
any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from any Borrower or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of
ERISA.

          “EUR” means the official currency of the European Monetary Union.

          “Event of Default” has the meaning assigned to such term in Article VIII.

          “Excluded Taxes” means, with respect to the Administrative Agent or any Lender, or any
other recipient of any payment to be made by or on account of any obligation of any Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of the Administrative Agent or any Lender, in
which its applicable lending office is located and (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction in which any Borrower
is located.

          “Existing Letters of Credit” means the following letters of credit issued by the LC
Issuer for the account of a Borrower, as the same may be extended, renewed or amended from time to
time, as more specifically described below and based upon exchange rates in effect on the date
hereof:

10

 

	 	 	 	 	 	 	 	 	 	 	 

	Type

	 	LC Number
	 	Borrower
	 	Beneficiary
	 	Undrawn Amount as of
Effective Date
	Standby

	 	20001443	 	S&W Corp.
	 	United Casualty and
Surety Insurance
Company
	 	US $3,500,000.00
	Standby

	 	20001349	 	S&W Corp.
	 	Banque Bruxelles
Lambert S.A.
	 	EUR139,660.00

(equals US $187,800.80)
	Standby

	 	83009957	 	S&W Corp.
	 	Banque Bruxelles
Lambert S.A.
	 	EUR16,113.08

(equals US $21,667.26)
	Standby

	 	ML20003367
	 	S&W Corp.
	 	Banque

Internationale

ARABE DE TUNI
	 	US $4,662.00
	Standby

	 	ML20003737
	 	S&W Corp.
	 	Bank of Taiwan
	 	US $88,185.30
	Standby

	 	20004064	 	S&W Corp.
	 	Safety National
Casualty Corp.
	 	US $425,000.00
	Standby

	 	20002882	 	Holdings
	 	Liberty Mutual

Insurance Company
	 	US $70,000.00

          “Federal Funds Rate” means, for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing selected by it.

          “Financial Officer” means each of the chief financial officer, principal accounting
officer, treasurer or controller of the Borrowers.

          “fiscal quarter” means a three month period which commences on the day following the
end of the prior fiscal quarter and which ends on any of January 31, April 30, July 31 or October
31.

          “fiscal year” means a twelve month period of four consecutive fiscal quarters and
which ends on April 30.

          “Foreign Exchange Obligations” means any and all obligations in connection with, or
under, any foreign exchange contracts of any Borrower to any Persons who are the Administrative
Agent and/or any Lender (or any Affiliate of the Administrative Agent or any Affiliate of any
Lender) at the time such contracts were entered into (even if the respective Person subsequently
ceases to be a party to the Credit Agreement for any reason), whether absolute or contingent and
howsoever and whenever created, arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefor).

          “Foreign Lender” means a Lender that is not a U.S. Person within the meaning of
Section 7701(a)(30) of the Code.

11

 

          “Foreign Subsidiary” means a Subsidiary other than a Domestic Subsidiary.

          “Funding Account” means the principal operating account of the Borrower Representative
with TD Bank into which proceeds of the Loans are deposited pursuant to Section 2.06.

          “Funding Office” means the office of the Administrative Agent located at 6000 Atrium
Way, Mt. Laurel, NJ 08054, or such other office as Administrative Agent may specify from time to
time as its funding office by written notice to the Borrower Representative.

          “F/X Exposure” means in respect of any Person’s liability under one or more foreign
exchange contracts with any Lender, that amount, as determined by such Lender from to time to time
in its Permitted Discretion, owing to such Lender by such Person on account of the Foreign Exchange
Obligations.

          “GAAP” means generally accepted accounting principles in the United States of America.

          “German Subsidiary” means Smith & Wesson Training Centre GmbH.

          “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.

          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.

          “Hazardous Materials Indemnity Agreement” means the Amended and Restated Hazardous
Materials Indemnity Agreement of even date herewith executed by the Borrowers in favor of the
Administrative Agent, and any other Person who becomes a party thereto pursuant to the joinder
agreement attached thereto and their successors and assigns, as amended, restated or modified from
time to time.

          “Holdings” has the meaning assigned to it in the preamble.

          “Honor Date” means the date on which any LC Disbursement is made.

12

 

          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all
obligations, contingent or otherwise, of such Person as an account party in respect of letters of
credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances, (k) all obligations, contingent or otherwise, of such Person in
respect of cash management services, (l) all obligations, contingent or otherwise, of such Person
in respect of foreign exchange contracts, (m) obligations under any liquidated earn-out and (n)
obligations of such Person to purchase securities or other property arising out of or in connection
with the sale of the same or substantially similar securities or property or any other Off-Balance
Sheet Liability. The Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the extent such Person is
liable therefor as a result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such Person is not liable
therefor.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Indemnitee” has the meaning assigned to such term in Section 10.04(b).

          “Information” has the meaning assigned to such term in Section 10.07.

          “Interest Payment Date” means (a) as to any Base Rate Loan (other than a Swingline
Loan), the last day of each month while such Loan is outstanding and the final maturity date of
such Loan, (b) as to any LIBOR Loan having an Interest Period of three months or less, the last day
of such Interest Period, (c) as to any LIBOR Loan having an Interest Period longer than three
months, each day that is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period, (d) as to any Loan, the date of any
repayment or prepayment made in respect thereof, and (e) as to any Swingline Loan, the day that
such Loan is required to be repaid and on the Revolving Maturity Date.

          “Interest Period” means with respect to any LIBOR Loan, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the calendar month that
is one, two, three or six months, thereafter, as the Borrower Representative may elect,
provided, that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a
LIBOR Loan only, such next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (ii) no Interest Period
shall extend beyond the Revolving Maturity Date and (iii) any Interest Period pertaining to a LIBOR
Loan that commences on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest Period) shall end on the
last Business Day of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of
a Revolving Loan, thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

13

 

          “Inventory” means goods, other than farm products, which: (a) are leased by a Person
as lessor; (b) are held by a Person for sale or lease or to be furnished under a contract of
service; (c) are furnished by a Person under a contract of service; or (d) consist of raw materials, work in process, or
materials used or consumed in a business.

          “Joinder Agreement” has the meaning assigned to such term in Section 6.13.

          “Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or judicial
precedents, including the interpretation or administration thereof by any Governmental Authority
charged with the enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, licenses, authorizations and permits of, and agreements
with, any Governmental Authority.

          “LC Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the Honor Date.

          “LC Collateral Account” has the meaning assigned to such term in Section 2.09(h), and
includes any such account established in the name of the Administrative Agent with TD Bank to cash
collateralize LC Exposure.

          “LC Commitment” means an amount equal to the Dollar Equivalent of $5,000,000.00.

          “LC Disbursement” means a payment made by the LC Issuer pursuant to a Letter of
Credit.

          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of all (i) LC
Disbursements that have not yet been reimbursed by or on behalf of any Borrower on the Honor Date,
and (ii) all LC Borrowings. The determination of LC Exposure shall take into account the then
current Dollar Equivalent amount of all Letters of Credit issued in Alternative Currencies.

          “LC Issuer” means TD Bank in its capacity as issuer of Letters of Credit hereunder, or
any successor issuer of Letters of Credit hereunder.

          “Lead Arranger” means TD Securities (USA) LLC in its capacity as sole lead arranger
and sole bookrunner for the credit facility evidenced by this Agreement.

          “Lender” has the meaning assigned to such term in the introductory paragraph hereto,
together with any Person that subsequently becomes a Lender by way of assignment in accordance with
the terms of Section 10.06, together with their respective successors, other than any Person that
ceases to be a Lender as a result of an assignment in accordance with Section 10.06 or an amendment
of this agreement. Unless the context otherwise requires, the term “Lender” includes the Swingline
Lender and the LC Issuer.

          “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Borrower Representative and the Administrative Agent.

          “Letter of Credit” means any letter of credit issued pursuant to this Agreement, and
any Existing Letter of Credit.

14

 

          “Letter of Credit Availability Period” means the period from and including the
Effective Date and ending on the sixth Business Day before the earlier of the Revolving Maturity
Date and the date of termination of the Revolving Commitment.

          “‘Letter of Credit Documents” means collectively, any letter of credit application and
other related documents executed by any Borrower in form satisfactory to the LC Issuer in
connection with each Letter of Credit, including, without limitation, the Existing Letters of
Credit, and any letter of credit application and other related documents executed by any Borrower
in form satisfactory to the LC Issuer in connection with any Letter of Credit.

          “Letter of Credit Fee” as defined in Section 2.12(c).

          “Liabilities” of any Person shall mean and include all obligations of such Person
which in accordance with GAAP shall be classified on a balance sheet of such Person as liabilities
of such Person, and in any event shall include all (i) obligations of such Person for borrowed
money or which has been incurred in connection with the acquisition of property or assets, (ii)
obligations secured by any Lien or other charge upon property or assets owned by such Person, even
though such Person has not assumed or become liable for the payment of such obligations, (iii)
obligations created or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender, or lessor under such agreement in the event of default are limited to
repossession or sale of property, (iv) obligations under guaranties, and (v) obligations under any
capitalized lease.

          “LIBOR” means, in the case of Dollars, the rate of interest in Dollars, or in the case
of an Alternative Currency, the rate of interest in such Alternative Currency (rounded upwards, at
the Administrative Agent’s option, to the next 100th of one percent) equal to the
British Bankers’ Association LIBOR (“BBA LIBOR”) for the equivalent Interest Period as published by
Bloomberg (or such other commercially available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately 11:00 A.M. (London Time)
2 London Banking Days prior to the first day of such Interest Period; provided,
however, if more than one BBA LIBOR is specified, the applicable rate shall be the
arithmetic mean of all such rates. If, for any reason, such rate is not available, the term LIBOR
shall mean, with respect to any Interest Period, the rate of interest per annum determined by the
Administrative Agent to be the average rate per annum which deposits in Dollars or in such
Alternative Currency, as applicable, are offered for such Interest Period by major banks in London,
England at approximately 11:00 A.M. (London time) to London Banking Days prior to the reset date.
Notwithstanding the foregoing, LIBOR Loans shall be deemed to constitute eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of credits for
proration, exceptions or offsets that may be available from time to time to any Lender. LIBOR
shall be adjusted automatically on and as of the effective date of any change in the LIBOR Reserve
Percentage for each Loan comprising part of the same Borrowing (including conversions, extensions
and renewals), to a per annum interest rate determined pursuant to the following formula:

          

	Adjusted LIBOR Rate = LIBOR
1 Minus LIBOR Reserve Percentage

          “LIBOR Basis” means an interest rate equal at all time to the sum of (a) the Adjusted
LIBOR Rate, plus (b) the Applicable Margin for LIBOR Loans. The LIBOR Basis shall apply to
Interest Periods of one (1), two (2), three (3) or six (6) months, and, once determined, shall
remain unchanged during the applicable Interest Period, except for changes to reflect the
adjustments in the LIBOR Reserve Percentage and the Applicable Margin.

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          “LIBOR Loan” means any Loan the rate of interest applicable to which is based on the
LIBOR Basis.

          “LIBOR Reserve Percentage” means, for any day, that percentage (expressed as a
decimal) which is in effect from time to time under Regulation D of the Board, as such Regulation
may be amended from time to time or any successor Regulation, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency, special or marginal reserves)
applicable with respect to eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by reference to which the interest
rate of LIBOR Loans is determined), whether or not any Lender has any eurocurrency liabilities
subject to such reserve requirement at that time.

          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

          “Loan Documents” means collectively, (i) this Agreement, (ii) the Notes, (iii) the
Letters of Credit, (iv) the Letter of Credit Documents, (v) the Collateral Documents, (vi) each
Assignment and Assumption and (vii) any and all other agreements, instruments, certificates or
reports executed by any Borrower in connection with this Agreement, as amended from time to time,
including any replacements therefor.

          “Loan(s)” means any and all loans and advances made by the Lenders pursuant to this
Agreement, including, without limitation, any Revolving Loans and Swingline Loans.

          “London Banking Days” means any day on which commercial banks are open for general
business (including dealings in foreign exchange and foreign currency deposits) in London, England.

          “Master Account” means that certain deposit account (account number 8245726051) of the
Borrower Representative maintained with TD Bank and described in and subject to the Cash Management
Agreements, and such other account(s) as the Borrowers (or the Borrower Representative) and TD Bank
may, from time to time, designate as master account(s).

          “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, prospects or condition, financial or otherwise, of Holdings and the Subsidiaries taken
as a whole, (b) the ability of any Borrower to perform any of its obligations under the Loan
Documents to which it is a party, (c) a material portion of the Collateral, or the Administrative
Agent’s Liens (on behalf of itself and the Lenders) on the Collateral or the priority of such
Liens, or (d) the rights of or benefits available to the Administrative Agent and the Lenders
thereunder.

          “Material Agreement” means those agreements described on Schedule 5.14.

          “Material Foreign Subsidiary” means any Foreign Subsidiary that has aggregate assets
greater than $500,000.

          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or more of Holdings
or its Subsidiaries in an aggregate principal amount exceeding $2,000,000. For purposes of
determining Material Indebtedness, the “obligations” of Holdings or any Subsidiary in respect of
any Swap Agreement

16

 

at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that Holdings or such Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.

          “Maximum Rate” has the meaning assigned to such term in Section 10.09.

          “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.

          “Mortgages” means (i) those mortgages granted on November 30, 2007, as amended, in
favor of the Administrative Agent with respect to the Mortgaged Premises, and (ii) any mortgage,
deed of trust or other agreement which conveys or evidences a Lien in favor of the Administrative
Agent to secure the Obligations, on real property of a Borrower, including any amendment,
modification or supplement thereto.

          “Mortgaged Premises” means the parcels of land with improvements thereon located at
2100 Roosevelt Avenue, Springfield, Massachusetts 01104; 299 Page Boulevard, Springfield,
Massachusetts 01104; 19 Aviation Drive, Houlton, Maine 04730, and 400 North Main Street, Rochester,
New Hampshire.

          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.

          “Note(s)” means any and all of the Revolving Line Notes and the Swingline Note.

          “Obligations” means all unpaid principal of and accrued and unpaid interest on the
Loans, all LC Exposure, all Cash Management Obligations, all Swap Obligations, all Foreign Exchange
Obligations, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Borrowers arising under the Loan Documents to the Administrative Agent, the
Lenders, the LC Issuer, any indemnified party, any holder of Cash Management Obligations, and any
holder of Swap Obligations, including, without limitation, any Foreign Exchange Obligations.

          “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any
indebtedness, liability or obligation under any sale and leaseback transaction which is not a
Capital Lease Obligation, (c) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (d) any indebtedness, liability or
obligation arising with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the balance sheet of such
Person (other than operating leases).

          “Organization Documents” means (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with
respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.

          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

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          “Participant” has the meaning set forth in Section 10.06(d).

          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

          “Perfection Certificate” means that certain Perfection Certificate of even date
herewith substantially in the form of Exhibit 4 to the Security Agreement delivered to the
Administrative Agent by the Borrowers, as may have been amended or updated from time to time.

          “Permitted Acquisition” means any Acquisition by Holdings or any Subsidiary in a
transaction that satisfies each of the following requirements:

               (a) receipt by the Administrative Agent of an officer’s certificate of the Borrower
Representative certifying that both before and after giving effect to such Acquisition, each of the
representations and warranties in the Loan Documents is true and correct (except (i) any such
representation or warranty which relates to a specified prior date and (ii) to the extent the
Administrative Agent has been notified in writing by the Borrower Representative that any
representation or warranty is not correct and the Administrative Agent has explicitly waived in
writing compliance with such representation or warranty) and no Default or Event of Default exists,
will exist, or would result therefrom;

               (b) as soon as available, but not less than forty-five (45) days prior to the closing date of
such Acquisition, the Borrower Representative shall have provided the Administrative Agent (i)
notice of such Acquisition, specifying the purchase price and closing date, together with a general
description of the acquisition target’s business, (ii) copies of all business and financial
information reasonably requested by the Administrative Agent, from time to time, including
financial statements of the Companies on a Pro Forma Basis reflecting the financial impact of the
Acquisition, (iii) drafts of any purchase and sale agreement, together with any available schedules
and exhibits, (iv) if available, at least three (3) years of audited financial statements with
respect to the acquisition target (or, if the acquisition target is a start-up company, any
available financial statements of such acquisition target plus stand-alone projections for such
acquisition target), and (v) intentionally omitted;

               (c) if such Acquisition is an acquisition of assets or Equity Interests of any foreign Person,
such Acquisition is a Permitted Foreign Subsidiary Loan and Investment;

               (d) if such Acquisition is an acquisition of the Equity Interests of a Person, the Acquisition
is structured so that the acquired Person shall become a wholly-owned Subsidiary of Holdings, and
shall become a Borrower pursuant to the terms of this Agreement if such Subsidiary is a Domestic
Subsidiary;

               (e) if such Acquisition is an acquisition of assets, the Acquisition is structured so that a
Borrower shall acquire such assets;

               (f) if such Acquisition is an acquisition of Equity Interests, such Acquisition will not
result in any violation of Regulations T, U or X;

               (g) if such Acquisition involves a regulated business, such as firearm manufacturing, the
Borrower Representative has provided evidence reasonably satisfactory to the Administrative Agent
that acquisition target is compliant with all applicable regulations and has all licenses, permits
and governmental approvals necessary to operate its business and that the acquiring Borrower has
obtained the necessary consents to the transfer of such licenses, permits and governmental
approvals;

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               (h) no Borrower shall, as a result of or in connection with any such Acquisition, assume or
incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or
other matters) that could have a Material Adverse Effect;

               (i) in connection with an Acquisition of the Equity Interests of any Person, all Liens on
property of such Person shall be terminated unless the Administrative Agent in its Permitted
Discretion consents otherwise, and in connection with an Acquisition of the assets of any Person,
all Liens on such assets shall be terminated; and

               (j) the Financial Officer of Holdings shall certify (and provide the Administrative Agent with
a pro forma calculation in form and substance reasonably satisfactory to the Administrative Agent)
to the Administrative Agent that, immediately after giving effect to the completion of such
Acquisition, on a consolidated basis, the Companies will be in compliance with all financial
covenants set forth in Section 7.12 hereof.

          “Permitted Discretion” means a determination made in good faith and in the exercise of
reasonable (from the perspective of prudent banking practices) business judgment.

          “Permitted Encumbrances” means:

               (a) Liens imposed by law for taxes that are not yet due or are being contested in compliance
with Section 5.10;

               (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing obligations that are not
overdue by more than thirty (30) days or are being contested in compliance with Section 5.06;

               (c) pledges and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or regulations;

               (d) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course of business;

               (e) judgment liens in respect of judgments that do not constitute an Event of Default under
Section 8.01(k);

               (f) Liens granted by USR to Zurich America Insurance Company, its subsidiaries and affiliates
pursuant to an Agreement of Indemnity dated July 20, 2009, in USR’s Bonded Accounts, Bonded
Inventory and Bonded Contract Equipment; and

               (g) easements, zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of any Borrower;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness
other than provided in (f) above.

          “Permitted Foreign Subsidiary Loan and Investment” means, so long as the aggregate of
the following do not exceed $20,000,000.00 at any time outstanding:

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               (a) an investment of cash or property by a Borrower in a Foreign Subsidiary (other than the
German Subsidiary) made on or after the Effective Date;

               (b) a loan by a Borrower to a Foreign Subsidiary (other than the German Subsidiary), a
Guarantee by a Borrower of Indebtedness of a Foreign Subsidiary (other than the German Subsidiary)
or a pledge, security interest or hypothecation by a Borrower to secure Indebtedness of a Foreign
Subsidiary (other than the German Subsidiary), in each case made on or after the Effective Date;
and

               (c) an investment of cash or property by a Borrower in, or loan from a Borrower to a Foreign
Subsidiary (other than the German Subsidiary) for the purpose of making for one or more Permitted
Acquisitions.

          “Permitted Investments” means:

               (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof;

               (b) investments in commercial paper maturing within two hundred seventy (270) days from the
date of acquisition thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;

               (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing
within one hundred eighty (180) days from the date of acquisition thereof issued or guaranteed by
or placed with, and money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than $500,000,000;

               (d) fully collateralized repurchase agreements with a term of not more than thirty (30) days
for securities described in clause (a) above and entered into with a financial institution
satisfying the criteria described in clause (c) above;

               (e) money market funds that (i) comply with the criteria set forth in Securities and Exchange
Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and

               (f) Permitted Acquisitions.

          “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.

          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

          “Pro Forma Basis” means on a pro forma basis with such adjustments as would be
permitted to be reflected in pro forma financial information complying with the requirements of
GAAP and Article XI of Regulation S-X under the Securities Act.

20

 

          “Refinancing Indebtedness” means high yield indebtedness issued by Holdings in the
aggregate principal amount not to exceed $50,000,000 to the holders of the Convertible Notes,
refinancing an equal principal amount of the Convertible Notes outstanding as of the Effective
Date, provided that (A) the Borrower Representative shall notify the Administrative Agent
of the issuance of such indebtedness, and such indebtedness shall be unsecured, (B) the aggregate
combined principal amount of such indebtedness and the remaining Convertible Notes shall not, at
any time, exceed the principal amount of the Convertible Notes outstanding as of the Effective
Date, and (C) such indebtedness shall not mature or be redeemable prior to the date that is six (6)
months following the Revolving Maturity Date.

          “Refinancing Indebtedness Documents” means any indenture entered into in respect of
the Refinancing Indebtedness and all other supplements, agreements and instruments executed in
connection therewith, as the same may be amended or supplemented from time to time to the extent
permitted under this Agreement.

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

          “Report” means reports prepared by the Administrative Agent or another Person showing
the results of appraisals, field examinations or audits pertaining to the Borrowers’ assets from
information furnished by or on behalf of the Borrowers, after the Administrative Agent has
exercised its rights of inspection pursuant to this Agreement.

          “Required Lenders” means, as of any date of determination, at least two Lenders
holding more than 66.67% of all Commitments or, if the commitment of each Lender to make Loans and
the obligation of the LC Issuer to issue Letters of Credit have been terminated hereunder, at least
two Lenders holding in the aggregate more than 66.67% of all outstanding Loans and LC Exposure;
provided that the Commitments of, and the portion of all outstanding Loans and LC Exposure
held by any Defaulting Lender shall be excluded for the purposes of making a determination of
Required Lenders.

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

          “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests of Holdings or any Subsidiary,
or any payment (whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests of Holdings or any Subsidiary or any option, warrant or
other right to acquire any such Equity Interests of Holdings or any Subsidiary.

          “Revolving Availability” means, at any time, an amount equal to (a) the Revolving
Commitment minus (b) the Revolving Exposure.

          “Revolving Borrowing(s)” means Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of LIBOR Loans, as to which a single Interest Period is
in effect.

          “Revolving Commitment” means the commitment of the Lenders to make Revolving Loans and
to acquire participation in Swingline Loans hereunder, as such commitment may be reduced from time
to time pursuant to Section 2.10. The initial amount of the Lenders’ Revolving Commitment is

21

 

$115,000,000. Each Lender’s Revolving Commitment is set forth on Schedule 2.01 or in
the Assignment Assumption to which such Lender becomes a party hereto, as applicable as such amount
may be adjusted from time to time in accordance with this Agreement.

          “Revolving Credit Lender” means, at any time, any Lender that has a Revolving
Commitment at such time.

          “Revolving Exposure” means, at any time, the sum of (x) the outstanding principal
amount of Revolving Loans and (y) the Swingline Exposure at such time.

          “Revolving Line Notes” means those certain Revolving Line of Credit Notes of even date
herewith made by the Borrowers to the order of the Lenders in their respective Applicable Revolving
Loan Percentage in the original aggregate principal amount of $115,000,000, substantially in the
form of Exhibit E-1, as the same may be amended, restated, extended, replaced or otherwise
modified from time to time.

          “Revolving Loan” means a Loan made pursuant to Section 2.01 and evidenced by the
Revolving Line Notes.

          “Revolving Loan Availability Period” means the period from and including the Effective
Date to but excluding the earlier of the Revolving Maturity Date and the date of termination of the
Revolving Commitment.

          “Revolving Maturity Date” means December 7, 2014 or any earlier date on which the
Revolving Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

          “S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc. or any
successor thereto.

          “S&W Corp.” has the meaning assigned to it in the preamble.

          “Securities Act” means the Securities Act of 1933, as amended from time to time.

          “Security Agreement” means the Amended and Restated Pledge and Security Agreement of
even date herewith made by the Borrowers in favor of the Administrative Agent, as amended, restated
or modified from time to time.

          “Secured Parties” means, collectively, the Administrative Agent, the Lenders, the LC
Issuer, the Persons holding the Cash Management Obligations, the Persons holding the Swap
Obligations, the Persons holding the Foreign Exchange Obligations, each co-agent or sub-agent
appointed by the Administrative Agent from time to time pursuant to Section 9.05, and the other
Persons the Obligations to which are or are purported to be secured by the Collateral under the
terms of the Collateral Documents.

          “Spot Rate” has the meaning assigned to it in Section 1.05.

          “Subsidiary” means, of a Person, a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned by such Person or any other Person which is or is required to be
consolidated with such Person in the consolidated financial statements of such Person in accordance
with GAAP. Unless the context

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otherwise requires, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer
to a Subsidiary or Subsidiaries of Holdings.

          “Swap Agreement” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc. or
any International Foreign Exchange Master Agreement (any such master agreement, together with any
related schedules, a “Master Agreement”), including any such obligations or liabilities
under any Master Agreement; provided, that no phantom stock or similar plan providing for
payments only on account of services provided by current or former directors, officers, employees
or consultants of any Borrower or any Subsidiaries shall be deemed a Swap Agreement.

          “Swap Obligations” means any and all obligations under (a) any and all Swap
Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of
any Swap Agreement transaction, of any Borrower to Persons who are the Administrative Agent and/or
any Lender (or any Affiliate of the Administrative Agent or any Affiliate of any Lender) at the
time such contracts were entered into (even if the respective Person subsequently ceases to be a
party to the Credit Agreement for any reason), whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor).

          “Swap Termination Value” means in respect of any Borrower’s liability to any Lender or
any Affiliate of any Lender under one or more Swap Agreements, after taking into account the effect
of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on
or after the date such Swap Agreements have been closed out and termination value(s) determined in
accordance therewith, such termination value(s) that would be payable by such Person thereunder and
(b) for any date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market values for such Swap Agreements, as determined based upon one or more mid-market or
other readily available quotations provided by any recognized dealer in such Swap Agreements (which
may include a Lender or any Affiliate of a Lender).

          “Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall
be its Applicable Revolving Loan Percentage of the total Swingline Exposure at such time.

          “Swingline Lender” means TD Bank, in is capacity as lender of Swingline Loans
hereunder.

          “Swingline Loan” means a Loan made pursuant to Section 2.03.

          “Swingline Note” means that certain Swingline Note of even date herewith made by the
Borrowers to the order of the Swingline Lender in the original principal amount of $5,000,000.00,
substantially in the form of Exhibit E-2, as the same may be amended, restated, extended,
replaced or otherwise modified from time to time.

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          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

          “TCAC” has the meaning assigned to it in the preamble.

          “TCHC” has the meaning assigned to it in the preamble.

          “TD Bank” means TD Bank, N.A. (as successor-in-interest to TD Banknorth, N.A.), a
national banking association and a Lender.

          “Test Period” means, at any time, the four consecutive fiscal quarters of the
Borrowers then last ended (in each case taken as one accounting period).

          “Title Company” means any title insurance company as shall be retained by the
Borrowers and reasonably acceptable to the Administrative Agent.

          “Title Policy” means with respect to each Mortgage, a policy of title insurance (or
pro forma or marked-up title insurance commitment having the effect of a policy of title insurance)
insuring the Lien of such Mortgage as a valid first mortgage Lien on the Mortgaged Premises and
fixtures described therein subject to Permitted Encumbrances in the amount equal to not less than
100% of the fair market value of such Mortgaged Premises and fixtures, which fair market value
shall be determined by the Administrative Agent and the Borrowers in their reasonable judgment and
which policy (or such pro forma or marked-up commitment) shall (A) be issued by the Title Company,
(B) to the extent necessary, include such reinsurance arrangements as shall be reasonably
acceptable to the Administrative Agent and approved by the Borrowers, (C) have been supplemented by
such endorsements (unless endorsements are not available or are prohibitively expensive) as shall
be reasonably requested by the Administrative Agent, and (D) evidence reasonably acceptable to the
Administrative Agent of payment by the Borrowers of all Title Policy premiums, search and
examination charges, escrow charges and related charges, mortgage recording taxes, fees, charges,
costs and expenses required for the recording of the Mortgages and issuance of the Title Policies
referred to herein.

          “Total Funded Debt” means, at any date, without duplication, the aggregate principal
amount of all Indebtedness of the Companies at such date (excluding undrawn amount of Letters of
Credit, Foreign Exchange Obligations, other Swap Obligations and Cash Management Obligations),
determined on a consolidated basis in accordance with GAAP, provided, however, for purposes
of calculating the financial covenants set forth in Section 7.12, any Guarantee and Off-Balance
Sheet Liability shall be deemed to be fully funded. In the case of any Guarantee, the amount
deemed fully funded shall be the greater of (x) the amount then due on the Guarantee, or (y) the
maximum principal amount of the indebtedness then subject to such Guarantee. In the case of any
Off-Balance Sheet Liability, the amount deemed fully funded shall be the amount that would be due
if such Off-Balance Sheet Liability was due on the date of determination.

          “Total Percentage” means, with respect to any Lender, a percentage equal to a fraction
the numerator of which is the aggregate amount of such Lender’s Revolving Commitment and LC
Commitment under this Agreement and the denominator of which is the aggregate amount of all
Commitments of all Lenders. If the Commitments have terminated or expired, the Total Percentage
shall be determined based upon such Lender’s percentage share of the aggregate unpaid principal
amount of all Loans and LC Exposure on any date of determination.

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          “Transactions” means the execution, delivery and performance by the Borrowers of this
Agreement, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and
the issuance of Letters of Credit hereunder.

          “Type” when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
LIBOR Basis or the Base Rate.

          “UCC” or “Uniform Commercial Code” means unless otherwise specified, the
Uniform Commercial Code as in effect in the State of New York on the date of this Agreement, as the
same may be amended or otherwise modified.

          “Unreimbursed Amount” has the meaning assigned to it in Section 2.14(i).

          “Unused Revolver Fee” has the meaning assigned to it in Section 2.12(a).

          “Unutilized Revolving Commitment” means, at any time, the Revolving Commitment less
the outstanding principal amount of the Revolving Loans.

          “USR” means Universal Safety Response, Inc. (formerly known as SWAC-USR II, Inc.), a
Delaware corporation, successor by merger to Universal Safety Response, Inc., a New York
corporation, successor by merger to SWAC-USR I, Inc., a Delaware corporation.

          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

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

          SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower Representative notifies the
Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate
the effect of any change occurring

25

 

after the date hereof in GAAP or in the application thereof on the operation of such provision
(or if the Administrative Agent notifies the Borrower Representative that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.

     SECTION 1.05. Currency Equivalents. Any amount specified in this Agreement (other
than in Articles II, III, IX and X) or any of the other Loan Documents to be in Dollars shall also
include the equivalent of such amount in any currency other than Dollars, such equivalent amount
thereof in the applicable currency to be determined by the Administrative Agent at such time on the
basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For
purposes of this Section 1.05, the “Spot Rate” for a currency means the rate
determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity
as the spot rate for the purchase by such Person of such currency with another currency through its
principal foreign exchange trading office at approximately 11:00 a.m. on the date two (2) Business
Days prior to the date of such determination; provided that the Administrative Agent may
obtain such spot rate from another financial institution designated by the Administrative Agent if
the Person acting in such capacity does not have as of the date of determination a spot buying rate
for any such currency.

ARTICLE II

The Credits

     SECTION 2.01. Revolving Loans. Subject to the terms and conditions set forth herein,
each Revolving Credit Lender severally agrees to make Revolving Loans in Dollars to the Borrowers
from time to time during the Revolving Loan Availability Period in such amount of such Revolving
Credit Lender’s Applicable Revolving Loan Percentage in an aggregate principal amount at any one
time outstanding that will not result in the Revolving Exposure exceeding the Revolving Commitment.
During the Revolving Loan Availability Period the Borrowers may borrow, prepay and reborrow the
Revolving Loans. The Revolving Loans may from time to time be LIBOR Loans or Base Rate Loans, as
determined by the Borrowers in accordance with Section 2.07.

     SECTION 2.02. Repayments of Loans.

          (a) Maturity of Loans. The Borrowers shall pay to the Administrative Agent, for the
account of the Revolving Credit Lenders, all then outstanding principal, interest, fees and other
amounts with respect to Revolving Loans on the Revolving Maturity Date. The Borrowers shall pay to
the Administrative Agent for the account of the Swingline Lender the then unpaid principal amount
of each Swingline Loan on the earlier of the Revolving Maturity Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is at least
two (2) Business Days after such Swingline Loan is made; provided, that on each date that a
Revolving Borrowing is made, the Borrowers shall repay all Swingline Loans then outstanding.
Notwithstanding anything to the contrary in the prior sentence, the Borrowers shall repay Swingline
Loans pursuant to Section 2.02(b)(ii), below.

	 	(b)	 	Mandatory Repayments of Loans.

	 	(i)	 	The Borrowers hereby agree to promptly deposit,
or cause to be promptly deposited, into the Deposit Accounts all cash,
checks, electronic funds transfers and all other funds and payments
received by the Borrowers. All funds from time to time deposited into
the Deposit Accounts shall be

26

 

	 	 	 	subject to full cash dominion by the Administrative Agent and shall
be deemed received by the Administrative Agent in accordance with
Section 2.13(a) of the Credit Agreement. Subject to the terms and
provisions of the Deposit Account Agreements and the Cash Management
Agreements, the Administrative Agent shall determine the collected
funds in the Master Account on each Business Day. Such collected
funds shall be used to pay the fees and charges owed to TD Bank
pursuant to the Deposit Account Agreements and the Cash Management
Agreements, and then shall be used to pay checks and all other forms
of debit activity that are properly drawn on the Deposit Account(s)
and presented for payment. Subject to Section 3.03 of the Credit
Agreement, to the extent there remain excess collected funds in the
Master Account after the payment of the fees, charges and checks as
described in the previous sentence, all such excess collected funds
(the “Excess Collected Funds”) shall be automatically
applied, on each Business Day to repay Swingline Loans to the extent
then outstanding. After the application of the collected funds in
accordance with this Section 2.02(b)(i), so long as no default or
Event of Default has occurred and is continuing, any Excess Collected
Funds shall remain on deposit in the Master Account, or at the
written request of the Borrower Representative, all or a portion of
such remaining balance shall be deposited into one or more securities
and/or deposit accounts of the Borrowers maintained with the
Administrative Agent.

	 	(ii)	 	Notwithstanding anything in this Agreement to
the contrary, if at any time the Revolving Exposure exceeds the
Revolving Commitment, the Borrowers shall repay immediately the
Revolving Loans in an aggregate amount equal to such excess. All such
amounts repaid and applied to repay the Revolving Loans shall be
applied first to repay Revolving Loans that are Base Rate Loans and,
then, to repay Revolving Loans that are LIBOR Loans, in each case
without a corresponding reduction in the Revolving Commitment.

     SECTION 2.03. Swingline Loans.

          (a) To the extent there are insufficient collected funds in the Master Account as determined
on any Business Day to pay the fees and charges and other account activity described in the fourth
sentence of Section 2.06(b)(i) for such Business Day, the Borrowers shall be deemed to have given
notice to the Administrative Agent and the Swingline Lender, and automatically and irrevocably
requested, the borrowing of a Swingline Loan from the Swingline Lender in the amount of such
insufficiency (the “Insufficiency”). So long as no Default or Event of Default has
occurred and is continuing, and subject to the terms and conditions of this Agreement, the
Swingline Lender agrees to make a Swingline Loan to the Borrowers on such Business Day in the
amount of the Insufficiency; provided, however, the making of such Swingline Loan shall not result
in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $5,000,000 or (ii)
the Revolving Exposure exceeding the Revolving Commitment; provided, further, however, that the
Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding
Swingline Loan. The proceeds of each Swingline Loan shall be credited to the Master Account by the
Swingline Lender. Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrowers may borrow, prepay and reborrow Swingline Loans. Each such Swingline Loan
shall be a Base Rate Loan. Each Swingline Loan shall be

27

 

subject to all the terms and conditions applicable to Revolving Loans, except that all
payments thereon shall be payable to the Swingline Lender for its our account.

          (b) The Swingline Lender may by written notice given to the Administrative Agent not later
than 11:00 a.m., New York City time, on any Business Day require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which the Lenders will participate.
Promptly upon such notice, the Administrative Agent will give notice thereof to each Lender,
specifying in such notice such Lender’s Applicable Revolving Loan Percentage of such Swingline Loan
or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such
Lender’s Applicable Revolving Loan Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant
to this paragraph is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction or termination of
the Commitments, and that each payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner provided in Section 2.06 with respect
to Revolving Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, through the
payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the
Swingline Lender the amount so received by it from the Lenders. The Administrative Agent shall
notify the Borrower Representative of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender
from the Borrowers (or other party on behalf of the Borrowers) in respect of a Swingline Loan after
receipt by the Swingline Lender of the proceeds of a sale or participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made
their payments pursuant to this paragraph and to the Swingline Lender, as their interest may
appear; provided, however, that any such payment so remitted shall be repaid to the Swingline
Lender or to the Administrative Agent, as applicable, if and to the extent that such payment is
required to be refunded to the Borrowers for any reason. The purchase or participations in a
Swingline Loan pursuant to this paragraph shall not relieve the Borrowers of any default in the
payment thereof.

     SECTION 2.04. Appointment of Borrowers’ Representative. Each other Borrower hereby
irrevocably appoints Holdings as its representative (the “Borrower Representative”), and
Holdings shall act under this Agreement as the representative of each Borrower for all purposes,
including, without being limited to, requesting borrowings and receiving account statements and
other notices and communications to the Borrowers (or any of them) from the Administrative Agent or
any Lender. The Administrative Agent and the Lenders may rely, and shall be fully protected in
relying, on any request for borrowing, disbursement instruction, report, information or any other
notice or communication made or given by Holdings, whether in its own name, on behalf of any
Borrower, on behalf of “the Borrowers,” and neither the Administrative Agent nor any Lender shall
have any obligation to make any inquiry or request any confirmation from or on behalf of any
Borrower as to the binding effect on it of any such request, instruction, report, information,
notice or communication, nor shall the joint and several character of the Borrowers’ liability for
the Obligations be affected.

     SECTION 2.05. Procedure for Borrowing. Each Revolving Borrowing, each conversion of
Revolving Loans of one Type to the other, and each continuation of LIBOR Loans shall be made upon
delivery by the Borrower Representative of an irrevocable notice to the Administrative Agent, by
facsimile, or by electronic communication, if arrangements for doing so have been approved by the
Administrative Agent. Each Borrowing Request and Conversion/Continuation Notice must be received

28

 

by the Administrative Agent not later than 2:00 p.m. New York time (i) three (3) Business Days
prior to the requested date of any borrowing of, conversion to or continuation of LIBOR Loans, (ii)
three (3) Business Days prior to the conversion of a LIBOR Loan to a Base Rate Loan, and (iii) one
(1) Business Day prior to the requested date of any borrowing of any Base Rate Loan. Each written
notice of borrowing or conversion shall specify (i) whether the requested borrowing is to be a
Revolving Borrowing, a conversion of Revolving Loans from one Type to the other, or a continuation
of a LIBOR Loan, (ii) the requested date of the borrowing, continuation or conversion, as the case
may be (which shall be a Business Day), (iii) the principal amount of the Revolving Loan to be
borrowed, continued or converted, (iv) if applicable, the duration of the Interest Period
applicable thereto; and (vi) if applicable, the Type of Revolving Loans to be borrowed or to which
existing Revolving Loans are to be converted. Each borrowing of, conversion to or continuation of
LIBOR Loans shall be in an amount equal to $250,000 or whole multiples of $100,000 in excess
thereof. If the Borrower Representative fails to specify a Type of Revolving Loan in a Borrowing
Request or Conversion/Continuation Notice or if the Borrower Representative fails to give timely
notice requesting a conversion or continuation, then the Revolving Loans, as the case may be, shall
be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loan
shall be effective as of the last day of the Interest Period then in effect with respect to the
applicable LIBOR Loan. If the Borrower Representative requests a borrowing of, conversion to or
continuation of a LIBOR Loan in any such borrowing or conversion notice, but fails to specify an
Interest Period, the Borrower Representative will be deemed to have specified an Interest Period of
one month. Notwithstanding any contrary provision hereof, if a Default has occurred and is
continuing and the Administrative Agent so notifies the Borrower Representative, then, so long as a
Default is continuing (i) no outstanding Revolving Loan may be converted to or continued as a LIBOR
Loan and (ii) unless repaid, each LIBOR Loan shall be converted to a Base Rate Loan at the end of
the Interest Period applicable thereto. All Swingline Loans shall be made as provided in Section
2.03.

     SECTION 2.06. Funding of Loans. (a) Following receipt of a Borrowing Request or a
Conversion/Continuation Notice, subject to the terms and provisions of this Agreement, the
Administrative Agent shall promptly notify each Lender of the amount of its Applicable Revolving
Loan Percentage, under the applicable Loan or the applicable Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower Representative, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in
Section 2.05. In the case of Revolving Borrowing, (i) each appropriate Lender shall make the
amount of its Loan available to the Administrative Agent in Dollars in immediately available funds
at the Administrative Agent’s Office not later than 2:00 p.m. on the Business Day specified in the
applicable Borrowing Request or Conversion/Continuation Notice and (ii) upon satisfaction or waiver
of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial
Borrowing, Section 4.01), the Administrative Agent shall make all funds so received available to
the Borrower Representative in like funds as received by the Administrative Agent either by (A)
crediting the account of the applicable Borrower or Borrowers on the books of the Administrative
Agent with the amount of such funds or (B) wire transfer of such funds, in each case in accordance
with instructions provided to (and reasonably acceptable to) the Administrative Agent by the
Borrower Representative.

          (b) The Administrative Agent shall make each Loan to be made by it hereunder on the proposed
date thereof available to the Borrower Representative by promptly crediting the amounts in
immediately available funds, to the Funding Account.

     SECTION 2.07. Interest Elections. (a) Each borrowing of Loans initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a LIBOR Loan, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
Representative may elect to convert such Revolving Loan to a different Type or to continue a LIBOR
Loan and, in the case of converting to or continuing a LIBOR Loan, shall elect an Interest Period
therefor, all as provided in

29

 

Section 2.05. The Borrower Representative may elect different options with respect to
different portions of the affected Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. This Section shall not apply to Swingline Loans, which may not be
converted or continued.

          (b) Notwithstanding any other provision of this Agreement, (i) the Borrower Representative
shall not be entitled to request, or to elect to convert or continue any Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Maturity Date and (ii) at no
time shall the aggregate number of all LIBOR Loans then outstanding exceed five (5).

     SECTION 2.08. Interest. (a) Each Base Rate Loan (including each Swingline Loan)
shall bear interest at the Base Rate Basis.

          (b) Each LIBOR Loan shall bear interest at the LIBOR Basis for the Interest Period in effect
for such Loan.

          (c) Notwithstanding the foregoing, during the occurrence and continuance of an Event of
Default, the Administrative Agent may, at its option, or shall, at the request of the Required
Lenders, by notice to the Borrower Representative, declare that all Revolving Loans and Swingline
Loans shall bear interest at 2% above the rate otherwise applicable to such Loan. Each LC
Borrowing shall bear interest at 2% above the Base Rate Basis and be payable on demand.

          (d) Borrowers shall pay accrued interest on each Loan in arrears on each Interest Payment Date
for such Loan and upon termination of the applicable maturity date of such Loan; provided
that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in
the event of any conversion of any LIBOR Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

          (e) All interest hereunder shall be computed on the basis of a year consisting of (i) in the
case of Base Rate Loans, 365 or 366 days, as the case may be, or (ii) in the case of LIBOR Loans,
360 days; and in each instance under (i) and (ii) above, shall be payable for the actual number of
days elapsed. The applicable Base Rate or LIBOR Basis shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.

          (f) If, for any fiscal quarter, the Consolidated Leverage Ratio set forth in the Compliance
Certificate with respect to the applicable Test Period shall be determined to have been incorrectly
reported, then at the Required Lender’s election, the Applicable Margins may be retroactively
adjusted to reflect any higher rate that would have been applicable had the Consolidated Leverage
Ratio been correctly reported on such Compliance Certificate. The Borrowers shall pay on demand
the unpaid interest that should have been paid had the correct Applicable Margins been in effect
for the interest periods affected thereby.

     SECTION 2.09. Alternate Rate of Interest. (a) If prior to the commencement of any
Interest Period for a LIBOR Loan:

	 	(i)	 	any Lender determines in its Permitted
Discretion (which determination shall be conclusive absent manifest
error) that adequate and reasonable means do not exist for ascertaining
the LIBOR Basis for such Interest Period; or

30

 

	 	(ii)	 	any Lender determines in its Permitted
Discretion the LIBOR Basis for such Interest Period will not adequately
and fairly reflect the cost to such Lender of making or maintaining its
Loans included in such Borrowing for such Interest Period; or

          (b) if after the Effective Date, any Lender shall have determined that the adoption or
modification of any Change of law that has or would have the effect of making it unlawful for the
Lender to honor its obligations to make LIBOR Loans or to continue to make or maintain LIBOR Loans,

then the Administrative Agent shall give notice thereof to the Borrower Representative by telephone
or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the
Borrower Representative that the circumstances giving rise to such notice no longer exist, any
Borrowing Request that requests the borrowing of, or any Conversion/Continuation Notice that elects
a continuation of or conversion to a LIBOR Loan, shall be ineffective and such Borrowing shall be
made as, converted to or continued as a Base Rate Loan.

     SECTION 2.10. Termination and Reduction of Commitments. (a) Unless otherwise
terminated under Article VIII or clause (b) of this Section, the Revolving Commitment shall
terminate upon the expiration of the Revolving Loan Availability Period.

          (b) The Borrower Representative may at any time terminate the Revolving Commitment upon (i)
the payment in full of all outstanding Loans, together with accrued and unpaid interest thereon and
on any Letters of Credit, (ii) the payment in full of the accrued and unpaid fees with respect to
the Revolving Commitment, and (iii) the payment in full of all reimbursable expenses and other
Obligations together with accrued and unpaid interest thereon.

          (c) Intentionally Omitted.

          (d) The Borrower Representative shall notify the Administrative Agent of any election to
terminate the Revolving Commitment under paragraph (b) or (c) of this Section at least five (5)
Business Days prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Each notice delivered by the Borrower Representative
pursuant to this Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitments delivered by the Borrower Representative may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower Representative (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any termination or reduction of the
Revolving Commitment shall be permanent.

          (e) The Administrative Agent shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrowers to the Administrative Agent and the
Lenders resulting from each Loan made by the Lenders, including the amounts of principal and
interest payable and paid to the Lender from time to time hereunder.

          (f) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder the Class and Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from the
Borrowers to the Administrative Agent and the Lenders hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder.

          (g) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by

31

 

such Lender, including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.

          (h) The entries made in the accounts maintained pursuant to paragraph (e), (f) or (g) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided 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 Borrowers to repay the Loans in accordance with the terms of this Agreement.

          (i) The Loans shall be evidenced by the Notes.

     SECTION 2.11. Optional Prepayment of Loans. (a) Prepayments. The
Borrowers shall have the right at any time and from time to time, to prepay any Loan in whole or in
part, subject to: (i) as to Revolving Loans, prior notice in accordance with paragraph (c) of this
Section; and (ii) the payment of any applicable fees payable under Section 3.03.

          (b) Application of Prepayments. So long as no Default or Event of Default has
occurred and is then continuing, the Borrowers shall have the right to specify how principal
prepaid pursuant to Section 2.11(a) shall be applied. All such amounts prepaid and applied to
prepay the Revolving Loans shall be applied first to repay Revolving Loans that are Base Rate Loans
and, then, to repay Revolving Loans that are LIBOR Loans, in each case without a corresponding
reduction in the Revolving Commitment.

          (c) The Borrower Representative shall notify the Administrative Agent by telephone (confirmed
by facsimile or by electronic communication, if arrangements for doing so have been approved by the
Administrative Agent) of any prepayment hereunder (i) in the case of prepayment of a LIBOR Loan,
not later than 10:00 a.m., New York time, three (3) Business Days before the date of prepayment, or
(ii) in the case of prepayment of a Base Rate Loan not later than 10:00 a.m., New York time, the
day of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and
the principal amount of each Loan or portion thereof to be prepaid. Each partial prepayment of any
Loan shall be in an amount equal to $100,000.00 or whole multiples of $100,000.00 in excess
thereof. Prepayments shall be accompanied by accrued interest and the payment of any applicable
fees payable under Section 3.03.

     SECTION 2.12. Fees and Other Charges. (a) Unused Revolver Fee. The
Borrowers agree to pay to the Administrative Agent for the account of the Revolving Credit Lenders
in accordance with their Applicable Revolving Loan Percentage a commitment fee (the “Unused
Revolver Fee”) for the period from and including the Effective Date to the last day of the
Revolving Loan Availability Period, which shall accrue at the rate designated on the grid in the
definition “Applicable Margin” on the average daily amount of the Unutilized Revolving Commitment.
The rate of the Unused Revolver Fee shall be reset on each Determination Date. The accrued Unused
Revolver Fee shall be payable in arrears on the last day of each October, January, April and July
and on the date on which the Revolving Commitment terminates. The Unused Revolver Fee shall be
computed on the basis of a year of three hundred sixty (360) days and shall be payable for the
actual number of days elapsed.

          (b) Letter of Credit Fee. The Borrowers agree to pay to the Administrative Agent for
the account of the LC Issuer a letter of credit fee in respect of each Letter of Credit
(“Letter of Credit Fee”), at a per annum rate equal to 0.75% of the undrawn face amount of
the Letter of Credit, payable in advance (i) on the issuance date, and (ii) on each anniversary
date thereof. In addition, the Borrowers agree to pay the Administrative Agent for the account of
the LC Issuer standard fees with respect to the issuance, administration, amendment, renewal or
extension of any Letter of Credit or the processing of

32

 

any presentation or payment made thereunder. Any other fees payable under this Section
2.12(c) shall be payable within ten (10) days after demand. All Letter of Credit Fees shall be
computed on the basis of a three hundred sixty (360) day year and shall be payable for the actual
number of days elapsed.

          (c) Arrangement Fee. The Borrowers shall pay to the Administrative Agent an
arrangement fee in accordance with a certain fee letter (the “Fee Letter”) by and among the
Administrative Agent, TD Bank, the Lead Arranger and the Borrower Representative.

          (d) Agency Fee. The Borrowers shall pay to the Administrative Agent the annual agency
fee in accordance with the Fee Letter.

          (e) Upfront Fee. The Borrowers shall pay to the Administrative Agent for the accounts
of all Lenders (including TD Bank in its capacity as a Lender) the upfront fees in accordance with
the Fee Letter.

          (f) Late Charge. The Borrowers agree to pay the Administrative Agent for the account
of the Lenders holding such Obligations, with respect to any payment of principal, interest or fees
due under this Agreement that is not made within ten (10) days after its due date, a late charge
equal to six percent (6%) of the amount past due.

          (g) Non-Refundability. All fees payable under this Section 2.12 shall be paid on the
dates due, in immediately available funds, to the Administrative Agent. All fees paid under this
Section 2.12 shall not be refundable under any circumstances.

     SECTION 2.13. Payments Generally; Administrative Agent’s Clawback.

          (a) General. All payments to be made by the Borrowers shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders and/or LC Issuer to which such payment is owed, at the
Funding Office in Dollars and in immediately available funds not later than 11:00 a.m. New York
time on the date specified herein. The Administrative Agent will promptly distribute to each
Lender and the LC Issuer its Applicable Percentage of such payment in like funds as received by
wire transfer to such Lender and/or LC Issuer. All payments received by the Administrative Agent
after 11:00 a.m. New York time shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made by the Borrowers
(other than payments on the LIBOR Loans) shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day. If any payment on a LIBOR Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the immediately preceding
Business Day. In the case of any extension of any payment of principal pursuant to this paragraph,
such extension of time shall be reflected in computing interest or fees, as the case may be.

          (b) Funding Account. The Borrowers hereby irrevocably authorize the Administrative
Agent to charge to the Funding Account, or if the funds therein are insufficient, so long as the
Revolving Availability as a result thereof will be greater than $0, to advance to the Funding
Account as a Revolving Loan that is a Base Rate Loan and simultaneously charge to the Funding
Account, a sum sufficient to pay when due all scheduled payments of principal and all interest
accrued on the Obligations and to pay when due all costs, fees and expenses at any time owed by the
Borrowers to the Administrative Agent, the Lenders, the LC Issuer and/or the other Secured Parties
hereunder. The Administrative Agent

33

 

will account to the Borrower Representative monthly with a statement of Loans, charges and
payments made pursuant to this Agreement, and such account rendered by the Administrative Agent
shall be deemed final, binding and conclusive upon the Borrowers unless the Administrative Agent is
notified by the Borrower Representative in writing to the contrary within thirty (30) days of the
date each accounting is mailed to the Borrower Representative. Such notice shall only be deemed an
objection to those items specifically objected to therein.

     (c) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share
of such Borrowing, the Administrative Agent may assume that such Lender has made such share
available on such date in accordance with Section 2.06 and may, in reliance upon such assumption,
make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender agrees to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from and including the
date such amount is made available to the Borrowers to but excluding the date of payment to the
Administrative Agent at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation. If such
Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so
paid shall constitute such Lender’s Loan included in such Borrowing.

	 	(ii)	 	Payments by the Borrowers; Presumptions by
Administrative Agent. Unless the Administrative Agent shall have
received notice from the Borrower Representative prior to the date on
which any payment is due to the Administrative Agent for the account of
the Lenders or the LC Issuer hereunder that the Borrowers will not make
such payment, the Administrative Agent may assume that the Borrowers
have made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the LC
Issuer, as the case may be, the amount due. In such event, if the
Borrowers have not in fact made such payment, then each of the Lenders
or the LC Issuer, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to
such Lender or the LC Issuer in immediately available funds with
interest thereon, for each day from and including the date such amount
is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
	 
	 	(iii)	 	A notice of the Administrative Agent to any
Lender or the Borrower Representative with respect to any amount owing
under this subsection (b) shall be conclusive, absent manifest error.

     (d) Failure to Satisfy Conditions Precedent. If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to the Borrowers by the
Administrative Agent because the conditions to the Loans set forth in Article IV are not satisfied
or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in
like funds as received from such Lender) to such Lender, without interest.

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          (e) Obligations of Lenders Several. The obligations of the Lenders hereunder to make
Loans, to fund participations in Swingline Loans and to make payments pursuant to Section 10.04(c)
are several and not joint. The failure of any Lender to make any Loan, to fund any such
participation or to make any payment under Section 10.04(c) on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan, to purchase its
participation or to make its payment under Section 10.04(c).

          (f) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any particular place or
manner.

          (g) Insufficient Funds. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal, LC Disbursements, LC
Borrowings, interest and fees then due hereunder, such funds shall be applied (i) first,
toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties, and (ii)
second, toward payment of principal, LC Disbursements and LC Borrowings then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of principal, LC
Disbursements and LC Borrowings then due to such parties.

     SECTION 2.14. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, any Borrower may request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the LC Issuer at any time and from time to time during
the Letter of Credit Availability Period denominated in Dollars or in one or more Alternative
Currencies. In the event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any Letter of Credit Document, the terms and conditions of this
Agreement shall control. The Existing Letters of Credit shall be deemed Letters of Credit issued
hereunder, and subject to the terms of this Agreement. All payments applicable to the Letters of
Credit shall be payable to the LC Issuer solely for its own account.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower for whose account the Letter of Credit is to be issued shall hand deliver
or facsimile (or transmit by electronic communication, if arrangements for doing so have been
approved by the LC Issuer) to the LC Issuer (with a copy to the Administrative Agent), reasonably
in advance of the requested date of issuance, amendment, renewal or extension, a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a
Business Day), the date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the LC Issuer, the Borrower for whose account the
Letter of Credit is to be issued also shall submit a letter of credit application on the LC
Issuer’s standard form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension the LC Exposure shall not
exceed the LC Commitment.

          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in

35

 

the case of any renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is five (5) Business Days prior to the Revolving Maturity Date.

          (d) Reimbursement. The LC Issuer shall, promptly after its receipt thereof, examine
all documents purporting to represent a demand for payment under a Letter of Credit. If, after
such examination, the LC Issuer shall make any LC Disbursement in respect of a Letter of Credit,
the LC Issuer shall notify the Borrower Representative and Administrative Agent thereof. The
Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than 2:00 p.m., New York time, on the date that such LC
Disbursement is made, if the Borrower Representative shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York time, on such date, or, if such notice has not been
received by the Borrower Representative prior to such time on such date, then not later than 3:00
p.m., New York time, on (i) the Business Day that the Borrower Representative receives such notice,
if such notice is received prior to 1:00 p.m., New York time, on the day of receipt, or (ii) the
Business Day immediately following the day that the Borrower Representative receives such notice,
if such notice is not received prior to such time on the day of receipt. In the case of any
Letter of Credit denominated in an Alternative Currency, the Borrowers shall reimburse the LC
Issuer in Dollars. In each such case, the LC Issuer shall notify the Borrower Representative and
the Administrative Agent of the Dollar Equivalent amount of the drawing promptly following the
determination thereof. Any failure of the LC Issuer to furnish notice to the Borrower
Representative as described in the first sentence of this Section 2.14(d) shall not relieve the
Borrowers of their obligation to reimburse the LC Issuer with respect to any such LC Disbursement.
The liability of the Borrowers with respect to LC Disbursements and LC Borrowings shall be joint
and several.

          (e) Obligations Absolute. The Borrowers’ obligation to reimburse LC Disbursements as
provided in paragraph (d) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the LC
Issuer under a Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’
obligations hereunder. Neither the LC Issuer nor any of its Related Parties, shall have any
liability or responsibility by reason of or in connection with the issuance or transfer of any
Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from causes beyond the
control of the LC Issuer; provided that the foregoing shall not be construed to excuse the
LC Issuer from liability to the Borrowers to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent
permitted by applicable law) suffered by the Borrowers that are caused by the LC Issuer’s failure
to exercise care when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of
gross negligence or willful misconduct on the part of the LC Issuer (as finally determined by a
court of competent jurisdiction), the LC Issuer shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the LC Issuer may, in its Permitted
Discretion, either accept and make payment upon such documents without responsibility for further
investigation,

36

 

regardless of any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the terms of such Letter of
Credit.

          (f) Termination of LC Commitment. Unless otherwise terminated under Article VIII or
the next sentence, the LC Commitment shall terminate upon the expiration of the Letter of Credit
Availability Period. The Borrower Representative may at any time terminate the LC Commitment (i)
upon the cancellation and return of all outstanding Letters of Credit (or alternatively, with
respect to each such letter of Credit, the furnishing to the Administrative Agent of a cash
deposit, equal to 105% of the LC Exposure as of such date), and (ii) the payment in full of all
accrued and unpaid fees and expenses with respect to the LC Commitment.

          (g) <Intentionally omitted.>

          (h) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower Representative receives notice from the Administrative Agent
demanding that the Borrowers cash collateralize the LC Exposure, the Borrowers shall deposit in an
account with TD Bank in the name of Administrative Agent and for the benefit of the LC Issuer and
the Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the LC
Exposure as of such date plus accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately, and such deposit
shall become immediately due and payable, without demand or other notice of any kind, upon the
occurrence of any Event of Default with respect to any Borrower described in Section 8.01(h) or
(i). Such deposit shall be held by the Administrative Agent as collateral for the payment and
performance of the Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account and the Borrowers hereby
grant the Administrative Agent a security interest in the LC Collateral Account. Other than any
interest earned on the investment of such deposits, which investments shall be made at the option
and Permitted Discretion of the Administrative Agent and at the Borrowers’ joint and several risk
and expense, such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent for LC Borrowing for which have not been repaid and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for
the LC Exposure at such time or, if the maturity of the Loans has been accelerated, be applied to
satisfy other Obligations. If the Borrowers are required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrowers within three (3) Business Days after all
such Events of Defaults have been waived.

          (i) Payment. If the Borrowers fail to reimburse the LC Issuer in accordance with
Section 2.14(d) for the amount of the unreimbursed drawing (expressed in Dollars in the amount of
the Dollar Equivalent thereof, in the case of a Letter of Credit denominated in an Alternative
Currency) (the “Unreimbursed Amount”), such amount shall be deemed to have been incurred by
the Borrowers from the LC Issuer as an LC Borrowing in the amount of the Unreimbursed Amount, which
LC Borrowing shall be due and payable on demand (together with interest) and shall bear interest at
the rate set forth in Section 2.08(c).

          (j) <Intentionally omitted.>

          (k) <Intentionally omitted.>

          (l) Role of LC Issuer. The Borrowers agree that, in paying any drawing under a Letter
of Credit, the LC Issuer shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain
or inquire

37

 

as to the validity or accuracy of any such document or the authority of the Person executing
or delivering any such document. The Borrowers hereby assume all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not, preclude the Borrowers’
pursuing such rights and remedies as it may have against the beneficiary or transferee at law or
under any other agreement. None of the LC Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of the LC Issuer shall be
liable or responsible for any of the matters described in clauses (i) through (iv) of Section
2.14(e); provided, however, that anything in such clauses to the contrary
notwithstanding, a Borrower may have a claim against the LC Issuer, and the LC Issuer may be liable
to a Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by such Borrower which such Borrower proves were caused by the LC
Issuer’s willful misconduct or gross negligence or the LC Issuer’s willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the LC Issuer may accept documents that appear
on their face to be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the LC Issuer shall not be responsible for the validity
or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.

          (m) Applicability of ISP and UCP. Unless otherwise expressly agreed by the LC Issuer
and the Borrowers when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each
standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce at the time of
issuance, shall apply to each commercial Letter of Credit.

     SECTION 2.15. Sharing Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of (x) Obligations in
respect of any the Loans or LC Exposure due and payable to such Lender hereunder and under the
other Loan Documents at such time in excess of its ratable share (according to the proportion of
(i) the amount of such Obligations due and payable to such Lender at such time to (ii) the
aggregate amount of the Obligations in respect of the Loans and LC Exposure due and payable to all
Lenders hereunder and under the other Loan Documents at such time) of payments on account of the
Obligations in respect of the Loans and LC Exposure due and payable to all Lenders hereunder and
under the other Loan Documents at such time obtained by all the Lenders at such time or (y)
Obligations in respect of any of the Loans and LC Exposure owing (but not due and payable) to such
Lender hereunder and under the other Loan Documents at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing (but not due and payable)
to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Loans
and LC Exposure owing (but not due and payable) to all Lenders hereunder and under the other Loan
Documents at such time) of payment on account of the Obligations in respect of the Loans owing (but
not due and payable) to all Lenders hereunder and under the other Loan Documents at such time
obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall
(a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans and participations in LC Exposure of the other Lenders, or make such
other adjustments as shall be equitable, so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of Obligations in respect of the
Loans then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the
case may be, provided that:

	 	(i)	 	if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered,
such participations shall be

38

 

	 	 	 	rescinded and the purchase price restored to the extent of such
recovery, without interest; and
	 
	 	(ii)	 	the provisions of this section shall not be
construed to apply to (x) any payment made by any Borrower pursuant to
and in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans or subparticipations in LC
Exposure to any assignee or participant, other than to a Borrower or
any Subsidiary thereof (as to which the provisions of this section
shall apply).

     Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against such Borrower rights of setoff and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.

ARTICLE III

Illegality, Increased Costs, Break Funding and Taxes

     SECTION 3.01. Illegality. If any Change in Law has made it unlawful, or any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund LIBOR Loans, or to determine or charge interest rates based upon
the LIBOR, or any Governmental Authority has imposed material restrictions on the authority of such
Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then,
on notice thereof by such Lender to the Borrower Representative through the Administrative Agent,
any obligation of such Lender to make or continue LIBOR Loans or to convert Base Rate Loans to
LIBOR Loans shall be suspended until such Lender notifies (and each Lender agrees that it will
provide promptly such notice) the Administrative Agent and the Borrower Representative that the
circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the
Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), convert
all LIBOR Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such LIBOR Loans. Upon any such
conversion, the Borrowers shall also pay accrued interest on the amount so converted.

     SECTION 3.02. Increased Costs. (a) If any Change in Law shall:

	 	(i)	 	impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any
such reserve requirement reflected in the LIBOR Basis); or
	 
	 	(ii)	 	impose on any Lender or the London interbank
market any other condition affecting this Agreement or LIBOR Loans made
by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan) or to increase
the cost to any Lender of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by any Lender hereunder (whether of principal,
interest or otherwise),

39

 

then the Borrowers will pay to such Lender such additional amount or amounts to compensate such
Lender for such additional costs incurred or reduction suffered.

          (b) Capital Requirements. If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return on such Lender’s
capital or on the capital of such Lender’s holding company, as a consequence of this Agreement or
the Loans made or Letters of Credit issued by such Lender to a level below that which such Lender
or such Lender’s holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s policies and the policies of such Lender’s holding company with respect
to capital adequacy), then from time to time the Borrowers will pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender’s holding company for any such
reduction suffered.

          (c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower
Representative and shall be conclusive absent manifest error. The Borrowers shall pay such Lender
the amount shown as due on any such certificate within ten (10) days after receipt thereof.

          (d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to
demand such compensation; provided that the Borrowers shall not be required to compensate a
Lender pursuant to this Section for any increased costs or reductions incurred more than two
hundred seventy (270) days prior to the date that such Lender notifies the Borrower Representative
of the Change in Law giving rise to such increased costs or reductions and of such Lender’s
intention to claim compensation therefor; provided further that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the two hundred seventy
(270) day period referred to above shall be extended to include the period of retroactive effect
thereof.

     SECTION 3.03. Break Funding. In the event of (a) the payment of any principal of any
LIBOR Loan other than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default), (b) the conversion of any LIBOR Loan other than on the last day of
the Interest Period applicable thereto or (c) the failure to borrow, convert, continue or prepay
any LIBOR Loan on the date specified in any notice delivered pursuant hereto, then, in any such
event, the Borrowers shall compensate the Lenders for the loss, cost and expense attributable to
such event. In the case of a LIBOR Loan, such loss, cost or expense to any Lender shall be deemed
to include an amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such event not occurred,
at the LIBOR Basis that would have been applicable to such Loan, for the period from the date of
such event to the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the commencement of such
period, for Dollar deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of such Lender setting forth any amount or amounts that such Lender is
entitled to receive pursuant to this Section shall be delivered to the Borrower Representative and
shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as
due on any such certificate within ten (10) days after receipt thereof.

     SECTION 3.04. Mitigation Obligations; Replacement of Lenders.

40

 

          (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.02, or any Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.05, then such Lender
shall use reasonable efforts to designate a different Lending Office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 3.02 or 3.05, as the case may be, in
the future, and (ii) in each case, would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be materially disadvantageous to such Lender. The Borrowers hereby
agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

          (b) Replacement of Lenders. If any Lender requests compensation under Section 3.02,
or if any Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.05, the Borrowers may replace such
Lender in accordance with Section 10.13.

     SECTION 3.05. Taxes. (a) Payments Free of Taxes. Any and all payments by
or on account of any obligation of any Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if any Borrower
shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Administrative Agent, the
LC Issuer or the applicable Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrowers shall make such deductions
and (iii) the Borrowers shall pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law.

          (b) Payment of Other Taxes by the Borrowers. In addition, the Borrowers shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable law.

          (c) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent and each Lender (and in the case of any such party that is a pass-through
entity for purposes of the Indemnified Tax or Other Tax in question, any of the beneficial owners
of such party) within ten (10) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or any Lender on or with respect
to any payment by or on account of any obligation of any Borrower hereunder (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower Representative by the Administrative Agent shall be conclusive
absent manifest error.

          (d) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by any Borrower to a Governmental Authority, such Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

          (e) Status of Lenders. Any Lender (and, if a pass-through entity, any of its
beneficial owners) that is entitled to an exemption from or reduction of withholding tax under the
law of the jurisdiction in which any Borrower is resident for tax purposes, or any treaty to which
such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document
shall, to the

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extent it may lawfully do so, deliver to the Borrower Representative (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by
the Borrower Representative or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender (and, if a pass-through
entity, any of its beneficial owners), if requested by the Borrower Representative or the
Administrative Agent, shall, to the extent it may lawfully do so, deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower Representative or the
Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether
or not any payment made hereunder or under any other Loan Document to such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding anything to the contrary
in this subclause (e), no Lender (or, in the case of a Lender that is a pass-through entity, its
owners) will be required to provide any documentation with regard to any tax imposed by a
jurisdiction other than the United States if in such party’s good faith sole discretion, such
submission would subject it to unreimbursed expense or would otherwise be disadvantageous to such
party.

     Without limiting the generality of the foregoing, in the event that any Borrower is resident
for tax purposes in the United States, any Foreign Lender (and, if a pass-through entity, any of
its beneficial owners) shall, to the extent it may lawfully do so, deliver to the Borrower
Representative and the Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the Borrower
Representative or the Administrative Agent, but only if such Foreign Lender or beneficial owner is
legally entitled to do so), whichever of the following is applicable:

	 	(i)	 	duly completed copies of Internal Revenue
Service Form W-8BEN (or any successor thereto) claiming eligibility for
benefits of an income tax treaty to which the United States is a party,
	 
	 	(ii)	 	duly completed copies of Internal Revenue
Service Form W-8ECI (or any successor thereto),
	 
	 	(iii)	 	in the case of a Foreign Lender (or, in the
case of a pass-through entity, any of its beneficial owners) claiming
the benefits of the exemption for portfolio interest under Section
881(c) of the Code, (x) a certificate to the effect that such Foreign
Lender or beneficial owner is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any
Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C)
a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code and (y) duly completed copies of Internal Revenue Service Form
W-8BEN (or any successor thereto), and/or
	 
	 	(iv)	 	any other form prescribed by applicable law as
a basis for claiming exemption from or a reduction in United States
federal withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the
Borrowers to determine the withholding or deduction required to be
made.

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          From time to time, each Lender shall promptly notify the Administrative Agent of any change in
such Lender’s or beneficial owner’s circumstances that would modify or render invalid any claimed
exemption or reduction.

          A Lender that is a United States person within the meaning of Code section 7701(a)(30) shall
deliver a duly completed IRS Form W-9 to the Borrower Representative and the Administrative Agent
at the times described above with respect to the other withholding forms; provided,
however, that a Lender or Assignee that the Borrowers may treat as an “exempt recipient”
within the meaning of Treasury Regulations section 1.6049-4(c) (without regard to the third
sentence thereof) shall not be required to provide an IRS Form W-9, except to the extent required
under Treasury Regulations section 1.1441-1.

          (f) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its good faith sole discretion, that it has received a refund (in cash or as an
offset against other taxes otherwise then due and payable) of any Taxes or Other Taxes as to which
it has been indemnified by any Borrower or with respect to which any Borrower has paid additional
amounts pursuant to this section, it shall pay to such Borrower an amount equal to such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under
this Section 3.05 with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such
refund); provided that such Borrower, upon the request of the Administrative Agent or such Lender,
agrees to repay the amount paid over to such Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority other than penalties, interest and
other charges arising out of the willful misconduct or gross negligence of Administrative Agent or
such Lender) to the Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such amount to such Governmental Authority. This subsection shall
not be construed to require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes that it deems confidential) to any Borrower
or any other Person. Notwithstanding anything to the contrary, in no event will any Lender be
required to pay any amount to any Borrower the payment of which would place such Lender in a less
favorable net after-tax position than such Lender would have been in if the additional amounts
giving rise to such refund of any Indemnified Taxes or Other Taxes had never been paid.

          (g) Notwithstanding anything contained herein to the contrary, the provisions of Sections
3.02, 3.03 and 3.05 shall survive the expiration or termination of this Agreement and the other
Loan Documents and the payment in full of the Loans.

ARTICLE IV

Conditions

     SECTION 4.01. Effective Date. The obligations of each Lender to make Loans and the
LC Issuer to issue Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with Section 10.01):

          (a) Credit Agreement and Loan Documents. The Administrative Agent (or its counsel)
shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on
behalf of such party or (B) written evidence satisfactory to the Administrative Agent that such
party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan
Documents, including, without limitation, the Notes, and such other certificates, documents,
instruments and agreements as the Administrative Agent shall reasonably request in connection with
the transactions contemplated by this Agreement and the other Loan Documents, including a written
opinion of the

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Borrowers’ counsel, addressed to the Administrative Agent in form and substance satisfactory
to the Administrative Agent and its counsel.

          (b) Financial Projections. The Administrative Agent shall have received satisfactory
projections of consolidated financial statements of Holdings for the 2011-2013 fiscal years and
such financial statements shall not, in the reasonable judgment of the Administrative Agent,
reflect any material adverse change in the consolidated financial condition of Holdings.

          (c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of each Borrower,
dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall (A)
certify the resolutions of its Board of Directors, members or other body authorizing the execution,
delivery and performance of the Loan Documents to which it is a party, (B) identify by name and
title and bear the signatures of the Financial Officers and any other officers of such Borrower
authorized to sign the Loan Documents to which it is a party, and (C) contain appropriate
attachments, including the certificate or articles of incorporation or organization of each
Borrower certified by the relevant authority of the jurisdiction of organization of such Borrower
and a true and correct copy of its by-laws or operating, management or partnership agreement, and
(ii) a long form good standing certificate for each Borrower from its jurisdiction of organization.

          (d) No Default Certificate. The Administrative Agent shall have received a Compliance
Certificate, signed by the Financial Officer, on the Effective Date (i) stating that no Default has
occurred and is continuing, (ii) stating that the representations and warranties contained in
Article V are true and correct as of such date, (iii) demonstrating compliance with the financial
covenants set forth in Section 7.12, and (iv) certifying any other factual matters as may be
reasonably requested by the Lender.

          (e) Fees. The Administrative Agent shall have received all fees required to be paid,
and all expenses for which invoices have been presented (including the reasonable fees and expenses
of legal counsel), on or before the Effective Date.

          (f) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions where assets of the Borrowers are located, and such
search shall reveal no liens on any of the assets of the Borrowers except for liens permitted by
Section 7.02 or discharged on or prior to the Effective Date pursuant to a pay-off letter or other
documentation satisfactory to the Lender.

          (g) Personal Property Requirements. The Administrative Agent shall have received:

	 	(i)	 	satisfactory evidence that all certificates or
instruments representing or evidencing the Securities Collateral (as
defined in the Security Agreement) (other than Equity Interests in the
German Subsidiary) accompanied by instruments of transfer and stock
powers undated and endorsed in blank have been delivered to the
Administrative Agent;
	 
	 	(ii)	 	satisfactory evidence that all other
certificates, agreements, including control agreements, or instruments
necessary to perfect the Administrative Agent’s security interest in
all Chattel Paper, all Instruments, all Deposit Accounts, all
Securities Accounts, all Commodity Accounts, and all Investment
Property of each Borrower (as each such term is defined in the Security
Agreement and to the extent

44

 

	 	 	 	required by the Security Agreement) have been delivered to the
Administrative Agent;
	 
	 	(iii)	 	UCC financing statements in appropriate form
for filing under the UCC, and such other documents under applicable law
in each jurisdiction as may be necessary or appropriate or, in the
opinion of the Administrative Agent, desirable to perfect the Liens
created, or purported to be created, by the Collateral Documents (to
the extent required by the Security Agreement);
	 
	 	(iv)	 	copies of UCC, tax and judgment lien searches,
bankruptcy and pending lawsuit searches or equivalent reports or
searches, each of a recent date in each of the jurisdictions set forth
in Schedule 6(a) and Schedule 6(b) attached to the
Perfection Certificate; and
	 
	 	(v)	 	evidence reasonably acceptable to the
Administrative Agent of payment or arrangements for payment by the
Borrowers of all applicable recording taxes, fees, charges, costs and
expenses required for the recording of the Collateral Documents.

	 	(h)	 	Real Property Requirements. The Administrative Agent shall have received:

	 	(i)	 	Amendments to each Mortgage, duly executed and
acknowledged by each Borrower that is the owner of or holder of any
interest in such Mortgaged Premises, and otherwise in form for
recording in the recording office of each applicable political
subdivision where each such Mortgaged Premises is situated, together
with such certificates, affidavits, questionnaires or returns as shall
be required in connection with the recording or filing thereof to
create a lien under applicable Requirements of Law, and such financing
statements and any other instruments necessary to grant a mortgage Lien
under the laws of any applicable jurisdiction, all of which shall be in
form and substance reasonably satisfactory to Administrative Agent;
	 
	 	(ii)	 	with respect to each Mortgaged Premises, such
consents, approvals, amendments, supplements, estoppels, tenant
subordination agreements or other instruments as necessary to
consummate the Transactions or as shall reasonably be deemed necessary
by the Administrative Agent in order for the owner or holder of the fee
or leasehold interest constituting such Mortgaged Premises to grant the
Lien contemplated by the Mortgage with respect to such Mortgaged
Premise;
	 
	 	(iii)	 	with respect to each Mortgaged Premises that
is owned in fee, a Title Policy;
	 
	 	(iv)	 	with respect to each Mortgaged Premises that is
owned in fee, such affidavits, certificates, information (including
financial data) and instruments of indemnification (including a
so-called “gap” indemnification) as shall be required to induce the
Title Company to issue the Title Policy/ies and endorsements
contemplated above;

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	 	(v)	 	evidence reasonably acceptable to the
Administrative Agent of payment by Borrowers of all Title Policy
premiums, search and examination charges, escrow charges and related
charges, mortgage recording taxes, fees, charges, costs and expenses
required for the recording of the Amendments to Mortgages and issuance
of the Title Policies referred to above;
	 
	 	(vi)	 	with respect to each Mortgaged Premises, copies
of all Leases in which any Borrower holds the lessor’s interest or
other agreements relating to possessory interests, if any. Such
agreement shall be subordinate to the Lien of the Mortgage to be
recorded against such Mortgaged Premises, either expressly by its terms
or pursuant to a subordination, non-disturbance and attornment
agreement, and shall otherwise be acceptable to the Administrative
Agent;
	 
	 	(vii)	 	with respect to each Mortgaged Premises, the
Borrowers shall have made all notifications, registrations and filings,
to the extent required by, and in accordance with, all Governmental
Real Property Disclosure Requirements applicable to such Mortgaged
Premise;
	 
	 	(viii)	 	a completed Federal Emergency Management Agency Standard Flood Hazard
Determination with respect to each Mortgaged Premise;
	 
	 	(ix)	 	With respect to each location set forth on
Schedule 5.06 that is not owned in fee simple by a Borrower
(except for the Companies’ locations at 7377 E. Doubletree Ranch Road,
Suite 200, Scottsdale, Arizona and Suite 1200, 1001 19th Street North,
Arlington, Virginia 22209, Washington, D.C.), the Borrowers shall have
delivered to the Administrative Agent a fully-executed Collateral
Access Agreement.

          (i) Insurance. The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by Section 6.09 and the
applicable provisions of the Collateral Documents, each of which shall be endorsed or otherwise
amended to include a “standard” or “New York” lender’s loss payable or mortgagee endorsement (as
applicable) and shall name the Administrative Agent, on behalf of the Secured Parties, as
additional insured, in form and substance reasonably satisfactory to the Administrative Agent.

          (j) Litigation. No litigation shall be pending with respect to the Loans or the
definitive documentation in respect of the Loans. There shall not exist any judgment, order,
injunction or other restraint prohibiting the consummation of the Transactions.

          (k) Fees and Expenses. All accrued fees and expenses of the Administrative Agent and
the Lenders (including the reasonable out-of-pocket the fees and expenses of Edwards Angell Palmer
& Dodge LLP, counsel for the Administrative Agent and of local counsel for the Lenders) shall have
been paid.

          (l) PATRIOT Act. The Lenders shall have received all documentation and other
information required by regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation the PATRIOT Act.

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          (m) Field Examination, Etc. The Administrative Agent shall have completed its field
audit examinations of the Borrowers’ assets, liabilities, books and records and appraisals of the
Borrowers’ property, plant & equipment, and shall have reviewed environmental assessment reports
and studies and other related matters of the Borrowers, which results shall be reasonably
satisfactory to the Administrative Agent.

          (n) Notice to Convertible Notes Trustee. The Borrowers shall have delivered to the
Administrative Agent a copy of the notice to the Convertible Notes Trustee pursuant to, and
demonstrating, Holdings’ compliance with, Section 10.12 of the Convertible Notes Indenture.

          (o) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent or its counsel may have reasonably requested.

          (p) Escrowed Funds. The Administrative Agent shall have received satisfactory
evidence that the Borrowers have deposited $812,000 with the Administrative Agent pursuant to the
Environmental Reserve Account Agreement.

     SECTION 4.02. Each Revolving Loan. The obligation of the Lenders to make a Loan on
the occasion of any Borrowing (but excluding Revolving Loans the proceeds of which are to reimburse
the Swingline Bank for Swingline Loans), are subject to the satisfaction of the following
conditions:

          (a) Receipt by the Administrative Agent of a Borrowing Request.

          (b) The representations and warranties of the Borrowers set forth in this Agreement shall be
true and correct on and as of the date of such Borrowing.

          (c) At the time of and immediately after giving effect to such Borrowing, no Default or Event
of Default shall have occurred and be continuing.

          (d) After giving effect to any requested Revolving Borrowing, Revolving Availability is not
less than zero.

          (e) A copy of the notice to the Convertible Notes Trustee pursuant to, and demonstrating,
after giving effect to any requested Revolving Borrowing, compliance with, Section 10.12 of the
Convertible Notes Indenture; provided, however, a copy of such notice shall not be
required to be delivered with the Borrowing Request in the event that (x) after giving effect to
any requested Revolving Borrowing, the aggregate amount of the outstanding Revolving Exposure and
LC Exposure does not exceed $62,000,000, (y) the subject Borrowing Request relates to a fiscal
period as to which Holdings has previously delivered to the Administrative Agent a copy of the
appropriate notice to the Convertible Notes Trustee or (z) the Convertible Notes Indenture has been
terminated.

Each Borrowing shall be deemed to constitute a representation and warranty by the Borrowers on the
date thereof as to the matters specified in paragraphs (a), (b), (c), (d) and (e) of this Section.

     SECTION 4.03. Each Letter of Credit. The obligation of the LC Issuer to issue,
amend, renew or extend any Letter of Credit is subject to the satisfaction of the following
conditions:

          (a) Receipt by the LC Issuer and the Administrative Agent of a request in the form required
under Section 2.14(b).

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          (b) The representations and warranties of the Borrowers set forth in this Agreement shall be
true and correct on and as of the date of issuance, amendment, renewal or extension of such Letter
of Credit.

          (c) At the time of and immediately after giving effect to the issuance, amendment, renewal or
extension of such Letter of Credit, no Default or Event of Default shall have occurred and be
continuing.

          (d) After giving effect to the issuance of any requested Letter of Credit, the LC Exposure
shall not exceed the LC Commitment.

Each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute
a representation and warranty by the Borrowers on the date thereof as to the matters specified in
paragraphs (a), (b), (c) and (d) of this Section.

ARTICLE V

Representations and Warranties

     Each Borrower represents and warrants to the Administrative Agent, each Lender and the LC
Issuer that:

     SECTION 5.01. Existence, Qualification and Power; Compliance with Laws. Each Borrower
and each Subsidiary thereof (a) is duly organized or formed, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation or organization, (b) has the organizational
power and authority and all requisite governmental licenses, authorizations, consents and approvals
to (i) own its assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party and consummate the Transaction, (c) is
duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws, except in each case referred to
in clause (b) (i), (c) or (d), to the extent that failure to do so would not reasonably be expected
to have a Material Adverse Effect.

     SECTION 5.02. Authorization; No Contravention. The execution, delivery and
performance by each Borrower of each Loan Document to which such Person is party have been duly
authorized by all necessary corporate or other organizational action, and do not and will not (a)
contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under (i) any Contractual Obligation
(including, without limitation, the Convertible Note Indenture) to which such Person is a party or
affecting such Person or the properties of such Person or any of its Subsidiaries, except for
matters that would not reasonably be expected to have a Material Adverse Effect, or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person
or its property is subject, except for matters that would not reasonably be expected to have a
Material Adverse Effect, or (c) violate any Law. Each Borrower and each Subsidiary thereof is in
compliance with all Contractual Obligations referred to in clause (b)(i), except to the extent that
failure to do so would not reasonably be expected to have a Material Adverse Effect.

     SECTION 5.03. Governmental Authorization; Other Consents. No material approval,
consent, exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in connection with (a) the
execution, delivery or performance by any Borrower of this Agreement or any other Loan Document or
for the consummation of the

48

 

Transactions, (b) the grant by any Borrower of the Liens granted by it pursuant to the
Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral
Documents (including the priority thereof) or (d) the exercise by any Administrative Agent or any
Lender of its rights under the Loan Documents or the remedies in respect of the Collateral, except
for (i) filings necessary to perfect the Liens on the Collateral granted by the Borrowers in favor
of the Secured Parties, (ii) the approvals, consents, exemptions, authorizations, actions, notices
and filings which have been duly obtained, taken, given or made and are in full force, (iii) those
approvals, consents, exemptions, authorizations, actions, notices or filings described in the
Security Agreement and (iv) those approvals, consents, exemptions, authorizations, actions, notices
or filings, the failure of which to obtain or make would not reasonably be expected to have a
Material Adverse Effect. All applicable waiting periods in connection with the Transactions have
expired without any action having been taken by any Governmental Authority restraining, preventing
or imposing materially adverse conditions upon the Transactions or the rights of the Borrowers or
their Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien on, any
properties now owned or hereafter acquired by any of them.

     SECTION 5.04. Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each Borrower that is
party thereto. This Agreement constitutes, and each other Loan Document when so delivered will
constitute, a legal, valid and binding obligation of such Borrower, enforceable against each
Borrower that is party thereto in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally, and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

     SECTION 5.05. Financial Condition; No Material Adverse Change. (a) Holdings has
heretofore furnished to the Administrative Agent its consolidated balance sheet and statements of
income, stockholders equity and cash flows (i) as of and for the fiscal year ended April 30, 2010,
reported on by the Accountants, and (ii) as of and for the fiscal quarter ended July 31, 2010
certified by a Financial Officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of Holdings and its
consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to
year-end audit adjustments and the absence of footnotes in the case of the statements referred to
in clause (ii) above.

          (b) No event, change or condition has occurred that has had, or could reasonably be expected
to have, a Material Adverse Effect, since April 30, 2010.

     SECTION 5.06. Properties. (a) As of the date of this Agreement, Schedule
5.06 sets forth the address of each parcel of real property that is owned or leased by each
Borrower and each Subsidiary. Each of such leases and subleases is valid and enforceable in
accordance with its terms and is in full force and effect, and no default by any party to any such
lease or sublease exists. Each Borrower and each Subsidiary has good and indefeasible title to, or
valid leasehold interests in, all its real and personal property, free of all Liens other than
those permitted by Section 7.02 and Liens that are being contested in good faith by appropriate
proceedings and for which such Borrower or such Subsidiary, as applicable, has set aside on its
books adequate reserves.

          (b) Each Borrower and each Subsidiary owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property necessary to its business as currently
conducted and the use thereof by the Borrowers and the Subsidiaries does not infringe in any
material respect upon the rights of any other Person, and the Borrowers’ rights thereto are not
subject to any licensing agreement or similar arrangement.

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     SECTION 5.07. Litigation and Environmental Matters. (a) There are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any Borrower, threatened against or affecting the Borrowers or any of their
Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) on any Borrower or any
Subsidiary or (ii) that involve this Agreement or the Transactions.

          (b) Except for the Disclosed Matters (i) no Borrower nor any of its Subsidiaries has received
notice of any claim with respect to any material Environmental Liability or knows of any basis for
any material Environmental Liability and (ii) and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect on any Borrower or Subsidiary, no Borrower nor any of its Subsidiaries (1) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law or (2) has become subject to any Environmental
Liability.

          (c) Since the date of this Agreement, there has been no change in the status of the Disclosed
Matters that, individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.

     SECTION 5.08. Compliance with Laws and Agreements. Each Borrower and its Subsidiaries
is in compliance with all Requirements of Law applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect on any Borrower or Subsidiary. No Default has occurred and is continuing.

     SECTION 5.09. Investment Company Status. No Borrower nor any of its Subsidiaries is
an “investment company” as defined in, or subject to regulation under, the Investment Company Act
of 1940.

     SECTION 5.10. Taxes. The Borrowers and their Subsidiaries have timely filed or caused
to be filed all Federal, state, provincial, foreign and other tax returns and reports required to
be filed, and have timely paid all Federal, state, provincial, foreign and other Taxes levied or
imposed upon them or their properties, income or assets otherwise due and payable (whether or not
shown on any Tax return) including in their capacity as withholding agent, except those which are
being contested in good faith by appropriate proceedings diligently conducted and for which
adequate reserves have been provided in accordance with GAAP and which would not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse Effect. There is no
proposed Tax assessment against any Borrower or their Subsidiaries that, if made, would reasonably
be expected, individually or in the aggregate, to result in a Material Adverse Effect. Except for
gross-up provisions applicable to employee payments in the ordinary course of business or contained
in employment agreements, the agreements to acquire any option, stock or other equity interest in
any Borrower and the Loan Documents, neither any Borrower nor any Subsidiary thereof is party to
any tax sharing agreement that is currently in effect. Each Borrower and each Subsidiary has made
adequate provision in accordance with GAAP for all material taxes not yet due and payable. Neither
any Borrower nor any Subsidiary has ever been a party to any understanding or arrangement
constituting a “tax shelter” within the meaning of Section 6662(d)(2)(C)(iii) of the Code or within
the meaning of Section 6111(c) or Section 6111(d) of the Code as in effect immediately prior to the
enactment of the American Jobs Creation of 2004, or has ever “participated” in a “reportable
transaction” within the meaning of Treas. Reg. Section 1.6011-4, except as would not be reasonably
expected to, individually or in the aggregate, result in a Material Adverse Effect. Except any
liabilities for taxes of any consolidated, combined or unitary tax group of which any Borrower is
the common

50

 

parent, neither any Borrower nor any Subsidiary thereof has any liabilities for the taxes of
any Person under Treas. Reg. Section 1.1502-6 or any similar provision of state, local or foreign
law, as a transferee or successor, by contract or otherwise, except as would not result in a
Material Adverse Effect. No tax liens have been filed and no claims are being asserted with
respect to any such taxes.

     SECTION 5.11. ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. Each of
the Borrowers and its Subsidiaries is in compliance in all material respects with the presently
applicable provisions of ERISA, the Code and any other applicable Law with respect to each Plan.
The present value of all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more than $2,000,000.00 the
fair market value of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $2,000,000.00 the fair market value of the
assets of all such underfunded Plans.

     SECTION 5.12. Margin Regulations. Neither any Borrower nor any of such Borrower’s
Subsidiaries is engaged or will engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock (within the meaning of Regulations T, U or X issued
by the Board), or extending credit for the purpose of purchasing or carrying margin stock.

     SECTION 5.13. Disclosure. The Borrowers have disclosed to the Administrative Agent,
the Lenders and the LC Issuer all material agreements, instruments and corporate or other
restrictions to which it or any Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a Material Adverse
Effect on any Borrower or any Subsidiary. Neither the Perfection Certificate nor any of the other
reports, financial statements, certificates or other information furnished by or on behalf of any
Borrower to the Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information, the Borrowers
represent only that such information was prepared in good faith based upon assumptions believed to
be reasonable at the time delivered and, if such projected financial information was delivered
prior to the Effective Date, as of the Effective Date.

     SECTION 5.14. Material Agreements. All material agreements and contracts to which any
Borrower is a party or is bound as of the date of this Agreement are listed on Schedule
5.14. No Borrower is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in (i) any material agreement to which it is a party
or (ii) any agreement or instrument evidencing or governing Indebtedness.

     SECTION 5.15. Solvency. (a) Immediately after the consummation of the Transactions
to occur on the Effective Date, (i) the fair value of the assets of each Borrower, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (ii) the
present fair saleable value of the property of each Borrower will be greater than the amount that
will be required to pay the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii)
each Borrower will be able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured, and (iv)

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each Borrower will not have unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is proposed to be conducted after the
Effective Date.

          (b) No Borrower intends to, or will permit any of its Subsidiaries to, or believes that it or
any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by it or any such Subsidiary
and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary. No Borrower will permit any of its Subsidiaries to incur
debts beyond its ability to pay such debts as they mature, if, as a result of doing so, it could be
reasonably expected to have a Material Adverse Effect on any Borrower or Subsidiary.

     SECTION 5.16. Insurance. Schedule 5.16 sets forth a description of all
insurance maintained by or on behalf of the Borrowers and the Subsidiaries as of the Effective
Date. As of the Effective Date, all premiums in respect of such insurance have been paid. The
Borrowers believe that the insurance maintained by or on behalf of the Borrowers and Subsidiaries
is adequate. Each Borrower has caused its Subsidiaries to maintain with financially sound and
reputable carriers having a financial strength rating of at least A- by A.M. Best Company adequate
insurance in such amounts and for such risks where the failure to do so could be reasonably
expected to have a Material Adverse Effect on any Borrower or Subsidiary.

     SECTION 5.17. Capitalization and Subsidiaries. Schedule 5.17 sets forth (a) a
correct and complete list of the name and relationship to Holdings of each and all of Holdings’
Subsidiaries, (b) a true and complete listing of each class of each of Holdings’ and Holdings’
Subsidiaries’ authorized Equity Interests, of which all of such issued shares are validly issued,
outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons
identified on Schedule 5.17, and (c) the type of entity of Holdings and each of its
Subsidiaries. All of the issued and outstanding Equity Interests owned by any Borrower has been
(to the extent such concepts are relevant with respect to such ownership interests) duly authorized
and issued and is fully paid and non-assessable.

     SECTION 5.18. Security Interest in Collateral.

          (a) Security Agreement. The Security Agreement is effective to create in favor of the
Administrative Agent for the benefit of the Secured Parties, legal and valid Liens on, and security
interests in, the Collateral described therein and (i) when financing statements and other filings
in appropriate form are filed in the offices specified on Schedule 6 to the Perfection
Certificate, (ii) upon the taking of possession or control by the Administrative Agent of the
Collateral described therein with respect to which a security interest may be perfected only by
possession or control (which possession or control shall be given to the Administrative Agent to
the extent possession or control by the Administrative Agent is required by the Security
Agreement), (iii) upon recording by the Administrative Agent of its Lien on the certificates of
title of motor vehicles and (iv) upon compliance with the applicable perfection requirements of the
laws of jurisdictions other than the United States with respect to Collateral as to which
perfection of the Agent’s Lien thereon is not subject to the laws of the United States, the Liens
created by the Security Agreement shall (to the extent provided therein) constitute perfected first
priority Liens on, and security interests in, all right, title and interest of the grantors in the
Collateral described therein (other than such Collateral in which a security interest cannot be
perfected under the UCC as in effect at the relevant time in the relevant jurisdiction), in each
case subject to no Liens other than Permitted Encumbrances and Liens otherwise permitted by Section
7.02.

          (b) Mortgages. Each Mortgage is effective to create, in favor of the Administrative
Agent, for its benefit and the benefit of the Secured Parties, legal and valid Liens on, and
security interests in, all of the Borrowers’ right, title and interest in and to the Mortgaged
Premises thereunder and

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the proceeds thereof, subject only to Permitted Encumbrances or other Liens acceptable to the
Administrative Agent, and when the Mortgages are duly filed in the offices specified in the local
counsel opinion delivered with respect thereto in accordance with the provisions of Sections 4.01
or 6.13, the Mortgages shall (to the extent provided therein) constitute perfected first priority
Liens on, and security interests in, all right, title and interest of the Borrowers in the
Mortgaged Premises and the proceeds thereof, in each case prior in right to any other Person, other
than Liens permitted by such Mortgage.

     SECTION 5.19. Employment Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against any Borrower or any Subsidiary pending or, to the knowledge of the
Borrowers, threatened. The hours worked by and payments made to employees of the Borrowers and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters. All payments due from any Borrower
or any Subsidiary, or for which any claim may be made against any Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of such Borrower or such Subsidiary. There are no collective
bargaining agreements or Multiemployer Plans covering the employees of Holdings or any of its
Subsidiaries as of the Effective Date and neither Holdings nor any Subsidiary has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the last five years.

     SECTION 5.20. Affiliate Transactions. Except as set forth on Schedule 5.20,
as of the Effective Date, there are no existing or proposed agreements, arrangements,
understandings, or transactions between any Borrower and any of the officers, members, managers,
directors, stockholders, parents, other interest holders, employees, or Affiliates (other than
Subsidiaries) of any Borrower or any members of their respective immediate families, and none of
the foregoing Persons are directly or indirectly indebted to or have any direct or indirect
ownership, partnership, or voting interest in any Affiliate of any Borrower or any Person with
which any Borrower has a business relationship or which competes with any Borrower.

     SECTION 5.21. OFAC; PATRIOT Act.

          (a) No Borrower or Subsidiary (i) is or will become a Person whose Property or interests in
property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 24, 2001 Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages or will engage in any
dealings or transactions prohibited by Section 2 of such Executive Order, or be otherwise
associated with any such Person in any manner violative of Section 2, or (iii) will otherwise
become a Person on the list of Specifically Designated Nationals and Blocked Persons or subject to
the limitations or prohibitions under any other OFAC regulation or executive order.

          (b) The Borrowers and their Subsidiaries are in compliance in all material respects with the
Patriot Act. No part of the proceeds of the Loans hereunder will be used, directly or indirectly,
for any payments to any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

     SECTION 5.22. Intellectual Property Matters. Each Borrower owns, or is licensed to
use, all patents, patent applications, trademarks, trade names, service marks, copyrights,
technology, trade secrets, proprietary information, domain names, know-how and processes necessary
for the conduct of its business as currently conducted (the “Intellectual Property”),
except for those the failure to own or license which, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse

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Effect. To the knowledge of each Borrower, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor to the knowledge of each Borrower does the use
of such Intellectual Property by each Borrower infringe the rights of any Person, except for such
claims and infringements that, individually or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect.

     SECTION 5.23. Use of Proceeds. The Borrowers will use the proceeds of the Loans to
effect the Transactions and pay related fees and expenses and as otherwise permitted by Section
6.08.

ARTICLE VI

Affirmative Covenants

     Until the Revolving Commitments and the LC Commitment have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have been paid in full
and all Letters of Credit shall have expired or terminated and all LC Disbursements and LC
Borrowings shall have been reimbursed, each Borrower executing this Agreement covenants and agrees,
jointly and severally with all of the Borrowers, with the Administrative Agent, the Lenders and the
LC Issuer that:

     SECTION 6.01. Financial Statements and Other Information. The Borrower Representative
will furnish to the Administrative Agent (and the Administrative Agent will furnish to each Lender
promptly after the receipt thereof):

          (a) within one hundred twenty (120) days after the end of each fiscal year of Holdings, its
audited consolidated balance sheet and related statements of operations, stockholders’ equity and
cash flows and consolidating balance sheet and income statement as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous fiscal year, all
reported on by the Accountants (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the effect that such
consolidated and consolidating financial statements present fairly in all material respects the
financial condition and results of operations of Holdings and its consolidated Subsidiaries on a
consolidated and consolidating basis in accordance with GAAP consistently applied, accompanied by
any management letter prepared by said Accountants;

          (b) within forty-five (45) days after the end of each of the first three fiscal quarters of
Holdings, its consolidated balance sheet and related statements of operations, stockholders’ equity
and cash flows and consolidating balance sheet and income statement as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition and results of
operations of Holdings and its consolidated Subsidiaries on a consolidated and consolidating basis
in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

          (c) concurrently with any delivery of financial statements under clause (a) or (b) above, (i)
a Compliance Certificate (A) certifying, in the case of the financial statements delivered under
clause (a) or (b), as presenting fairly in all material respects the financial condition and
results of operations of Holdings and its Subsidiaries on a consolidated and consolidating basis in
accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, (B) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details

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thereof and any action taken or proposed to be taken with respect thereto, (C) setting forth
reasonably detailed calculations demonstrating compliance with Section 7.12, and (D) stating
whether any change in GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 5.05 and, if any such change has occurred, specifying
the effect of such change on the financial statements accompanying such certificate and (ii) so
long as (x) the aggregate amount of the outstanding Revolving Exposure and LC Exposure exceeds
$62,000,000 as of the end of such fiscal year or fiscal quarter, as applicable, and (y) the
Convertible Notes Indenture has not been terminated, a copy of a notice to the Convertible Notes
Trustee pursuant to, and demonstrating compliance, with Section 10.12 of the Convertible Notes
Indenture;

          (d) as soon as available, but in any event not later than ninety-two (92) days after the
beginning of each fiscal year of Holdings, a copy of the plan and forecast (including a projected
consolidated balance sheet, income statement and cash flow statement and a consolidating balance
sheet and income statement) of Holdings for each such fiscal year in form reasonably satisfactory
to the Administrative Agent;

          (e) promptly following the formation of any Subsidiary, information regarding such Subsidiary
so that such Subsidiary may become a Borrower;

          (f) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by Holdings or any Subsidiary with the
Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, as the case may be;

          (g) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrowers or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent may reasonably request; and

          (h) in lieu of providing hard copies of the documents Holdings is required to deliver pursuant
to paragraph (f) above, Holdings shall be deemed to have delivered the reports, proxy statements
and other material to the Administrative Agent at such time such reports, proxy statements and
other material are posted to the internet or filed with the Securities and Exchange Commission;
provided, however, access to such documents must be (i) available free of charge; (ii) exist in a
format downloadable by the Administrative Agent (as determined by the Administrative Agent); and
(iii) downloadable by the Administrative Agent or if such statements are not in a format
downloadable by the Administrative Agent then upon notice by the Administrative Agent, Holdings
will provide copies of such postings or filings.

     SECTION 6.02. Notices of Material Events. The Borrower Representative will furnish to
the Administrative Agent (and the Administrative Agent will furnish to each Lender promptly after
the receipt thereof) prompt written notice of the following:

          (a) the occurrence of any Default or Event of Default;

          (b) receipt of any notice of any governmental investigation or any litigation commenced or
threatened against any Borrower or Subsidiary that (i) seeks damages in excess of $4,000,000.00,
(ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or
its assets, (iv) alleges criminal misconduct by any Borrower or Subsidiary, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any Environmental Laws, (vi)
contests any tax, fee, assessment, or other governmental charge in excess of $2,000,000.00, or
(vii) involves any product recall;

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          (c) any Lien (other than Permitted Encumbrances) or claim made or asserted against any of the
Collateral;

          (d) any loss, damage, or destruction to the Collateral in the amount of $4,000,000.00 or more,
whether or not covered by insurance;

          (e) any and all default notices received under or with respect to any leased location or
public warehouse where Collateral is located (which shall be delivered within two (2) Business Days
after receipt thereof);

          (f) all material amendments to any Material Agreement together with a copy of each such
amendment;

          (g) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of Holdings and its Subsidiaries
in an aggregate amount exceeding $2,000,000.00; and

          (h) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower Representative setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken with respect
thereto.

     SECTION 6.03. Existence; Conduct of Business. Each Borrower will, and will cause each
Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, qualifications, licenses, permits, franchises,
governmental authorizations, intellectual property rights, licenses and permits material to the
conduct of its business, and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is presently conducted; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section
7.03 and (b) carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted.

     SECTION 6.04. Payment of Obligations. Each Borrower will, and will cause each
Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and
obligations, including Taxes, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b)
such Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto
in accordance with GAAP and (c) such liabilities would not result in aggregate liabilities in
excess of $2,000,000.00 and none of the Collateral becomes subject to forfeiture or loss as a
result of the contest.

     SECTION 6.05. Maintenance of Properties. Each Borrower will, and will cause each
Subsidiary to, keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted.

     SECTION 6.06. Books and Records; Inspection Rights. Each Borrower will, and will
cause each Subsidiary to, (i) keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its business and
activities and (ii) permit any representatives designated by the Administrative Agent (including
employees of the Administrative Agent, or any consultants, accountants, lawyers and appraisers
retained by the Administrative Agent), upon reasonable prior notice and during regular business
hours, to visit and inspect its properties, to examine and make

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extracts from its books and records, including environmental assessment reports and Phase I or
Phase II studies, and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably requested. The
Borrowers acknowledge that the Administrative Agent, after exercising its rights of inspection, may
prepare certain Reports pertaining to the Borrowers’ assets for internal use by the Administrative
Agent. Each Borrower will permit the Administrative Agent to conduct field audit examinations of
the Borrowers’ assets, liabilities, books and records at a frequency not less than once every 365
days; provided further that the Borrowers will permit the Administrative Agent to conduct such
examinations at any reasonable time and with any reasonable frequency after a Default. In
connection with such field audits, the Borrowers will permit the Administrative Agent to make test
verifications of the Accounts with the Borrowers’ customers.

     SECTION 6.07. Compliance with Laws. Each Borrower will, and will cause each
Subsidiary to, comply with all Requirements of Law applicable to it or its property.

     SECTION 6.08. Use of Proceeds and Letters of Credit. The proceeds of the Revolving
Loans will be used only for (i) general working capital purposes, (ii) the payment of fees and
expenses incurred in connection with the closing of the Loans and (iii) to purchase Convertible
Notes in the open market or in privately negotiated transactions. In addition, the proceeds of the
Revolving Loans may be used to pay the purchase price and related expenses of a tender offer for
the Convertible Notes pursuant to any registered tender offer with respect thereto so long as the
Administrative Agent has approved any and all references to this Agreement, the Lenders and the
Administrative Agent in any materials relating thereto, which approval shall not be unreasonably
withheld. No part of the proceeds of any Loan and no Letter of Credit will be used, whether
directly or indirectly, (i) for any purpose that entails a violation of any of the Regulations of
the Board, including Regulations T, U and X or (ii) to make any Acquisition other than Permitted
Acquisitions.

     SECTION 6.09. Insurance. (a) Generally. Each Borrower will, and will cause
each Subsidiary to, maintain with financially sound and reputable carriers having a financial
strength rating of at least A- by A.M. Best Company (i) insurance in such amounts (with no greater
risk retention) and against such risks (including (A) loss or damage by fire and loss in transit;
(B) theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; (C) business
interruption; (D) general liability and (E) and such other hazards), as is customarily maintained
by companies of established repute engaged in the same or similar businesses operating in the same
or similar locations and (ii) all insurance required pursuant to the Collateral Documents. The
Borrowers will furnish to the Administrative Agent information in reasonable detail as to the
insurance so maintained.

          (b) Requirements of Insurance. All such insurance shall (i) provide that no
cancellation, reduction in amount or change in coverage thereof shall be effective until at least
30 days (or 10 days for nonpayment of premiums) after receipt by the Administrative Agent of
written notice thereof, (ii) name the Administrative Agent as additional insured on behalf of the
Administrative Agent and the Secured Parties (in the case of liability insurance) or loss payee (in
the case of property insurance), as applicable, and (iii) be reasonably satisfactory in all other
respects to the Administrative Agent.

          (c) Flood Insurance. The Borrowers will, and shall cause each Subsidiary to, with
respect to each Mortgaged Premises, obtain flood insurance in such total amount as the
Administrative Agent may from time to time reasonably require, except that such total amount shall
not exceed the principal amount of the outstanding Indebtedness secured by such Mortgaged Premises,
if at any time the area in which any improvements are located on any Mortgaged Premises is
designated a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency, and otherwise comply with the National Flood Insurance Program as set forth in
the Flood Disaster Protection Act of 1973, as amended from time to time.

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     SECTION 6.10. Casualty and Condemnation. The Borrowers (a) will furnish to the
Administrative Agent prompt written notice of any casualty or other insured damage to any material
portion of the Collateral or the commencement of any action or proceeding for the taking of any
material portion of the Collateral or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the net proceeds of any such event
(whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and
applied in accordance with the applicable provisions of this Agreement and the Collateral
Documents.

     SECTION 6.11. Appraisals. At any time that the Administrative Agent requests, the
Borrowers will provide the Administrative Agent with appraisals or updates thereof of the
Inventory, equipment, intellectual property and real property from an appraiser selected and
engaged by the Administrative Agent, and prepared on a basis satisfactory to the Administrative
Agent, such appraisals and updates to include, without limitation, information required by
applicable law and regulations; provided, however, that if no Event of Default has occurred and is
continuing, the Administrative Agent may require one appraisal of each type per calendar year, each
of which shall be at the sole expense of the Borrowers.

     SECTION 6.12. Depository Banks. Each Borrower and each Domestic Subsidiary will
maintain TD Bank as a principal depository bank, including for the maintenance of operating,
administrative, cash management, collection activity, and other deposit accounts for the conduct of
its business. Schedule 6.12 sets forth the details for all deposit and investments
accounts maintained by each Borrower and each Domestic Subsidiary.

     SECTION 6.13. Additional Collateral; Further Assurances. (a) Subject to applicable
law, each Borrower and each Domestic Subsidiary that is or becomes a Borrower shall, unless the
Administrative Agent otherwise consents, cause each Domestic Subsidiary of Holdings formed or
acquired after the date of this Agreement in accordance with the terms of this Agreement to become
a Borrower by executing the Joinder Agreement set forth as Exhibit F hereto (the
“Joinder Agreement”). Upon execution and delivery thereof, each such Person (i) shall
become a Borrower and thereupon shall have all of the rights, benefits, duties, and obligations in
such capacity under the Loan Documents and (ii) will grant Liens to the Administrative Agent, in
any property of such Borrower which constitutes Collateral, including any parcel of real property
located in the U.S. owned by any Borrower by executing and delivering Collateral Documents.

          (b) The Borrowers will cause (i) 100% of the issued and outstanding Equity Interests of each
of its Domestic Subsidiaries, (ii) 65% of the issued and outstanding Equity Interests of each of
its Foreign Subsidiaries (other than the German Subsidiary) (or such greater percentage that, due
to a change in applicable law after the date hereof, (1) could not reasonably be expected to cause
the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary’s U.S. parent and (2) could
not reasonably be expected to cause any material adverse tax consequences) entitled to vote (within
the meaning of Treas. Reg. Section 1.956-2(c)(2)) and (iii) 100% of the issued and outstanding
Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in
each Foreign Subsidiary (other than the German Subsidiary) directly owned by a Borrower to be
subject at all times to a first priority, perfected Lien in favor of the Administrative Agent
pursuant to the terms and conditions of the Loan Documents or other Collateral Documents as the
Administrative Agent shall reasonably request. Notwithstanding the foregoing, at any time after an
Event of Default has occurred and is continuing, each Borrower will, upon the request of the
Administrative Agent, cause each Foreign Subsidiary to become a Borrower and to grant Liens to the
Administrative Agent on its assets and have the balance of its stock pledged to the Administrative
Agent.

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          (c) Without limiting the foregoing, each Borrower will, and will cause each Subsidiary to,
execute and deliver, or cause to be executed and delivered, to the Administrative Agent such
documents, agreements and instruments, and will take or cause to be taken such further actions
(including the filing and recording of financing statements, fixture filings, mortgages, deeds of
trust and other documents and such other actions or deliveries of the type required by Section
4.01, as applicable), which may be required by law or which the Administrative Agent may, from time
to time, reasonably request to carry out the terms and conditions of this Agreement and the other
Loan Documents and to ensure perfection and priority of the Liens created or intended to be created
by the Collateral Documents, all at the expense of the Borrowers.

          (d) If any material assets (including any Equity Interests and any real property or
improvements thereto or any interest therein) are acquired by any Borrower after the Effective Date
(other than assets constituting Collateral under any Collateral Document that become subject to the
Lien in favor of the Administrative Agent under any Collateral Document upon acquisition thereof),
the Borrower Representative will notify the Administrative Agent, and, if requested by the
Administrative Agent, the Borrowers will cause such assets to be subjected to a Lien securing the
Obligations and will take such actions as shall be necessary or reasonably requested by the
Administrative Agent to grant and perfect such Liens, including actions described in paragraph (c)
of this Section, all at the expense of the Borrowers.

          (e) If, after the date of this Agreement, any Foreign Subsidiary becomes a Material Foreign
Subsidiary, in the reasonable discretion of the Required Lenders, the Administrative Agent shall
have the right to perfect, at the Borrowers’ joint and several cost, payable upon request therefor
(including, without limitation, any foreign counsel, or foreign notary, filing, registration or
similar, fees, costs or expenses), its Lien in the Equity Interests of such Material Foreign
Subsidiary in the respective foreign jurisdiction; provided that the Required Lenders, in their
reasonable discretion and in consultation with the Borrower Representative, may waive the
requirements of this Subsection (e) with respect to the perfection of the Administrative Agent’s
Lien in any Equity Interest in any foreign jurisdiction to the extent that they determine that the
costs of perfecting such Liens in such Equity Interests are excessive in relation to the value of
the security to be afforded thereby.

ARTICLE VII

Negative Covenants

     Until the Revolving Commitments and the LC Commitment have expired or terminated and the
principal of and interest on each Loan and all fees, expenses and other amounts payable under any
Loan Document have been paid in full and all Letters of Credit have expired or terminated and all
LC Disbursements shall have been reimbursed, the Borrowers covenant and agree, jointly and
severally, with the Administrative Agent, the Lenders and the LC Issuer that:

     SECTION 7.01. Indebtedness. No Borrower will, nor will it permit any Subsidiary to,
create, incur or suffer to exist any Indebtedness, except:

          (a) the Obligations;

          (b) Indebtedness existing on the date hereof and set forth in Schedule 7.01(b) and
extensions, renewals and replacements of any such Indebtedness in accordance with clause (f)
hereof;

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          (c) Indebtedness that is unsecured and subordinated to the Obligations on terms satisfactory
to the Administrative Agent in its Permitted Discretion provided that after giving effect to the
incurrence of such Indebtedness, the Borrowers will remain in compliance with Section 7.12;

          (d) Indebtedness of any Borrower to any other Borrower; provided that (i) such
Indebtedness shall be subject to Section 6.04 and (ii) such Indebtedness shall be subordinated to
the Obligations on terms reasonably satisfactory to the Administrative Agent;

          (e) Indebtedness of any Borrower or any Subsidiary incurred to finance the acquisition of any
capital assets (constituting purchase money Indebtedness), including Capital Lease Obligations, and
extensions, renewals and replacements of any such Indebtedness in accordance with clause (f)
hereof; provided that after giving effect to the incurrence of such Indebtedness, the
Companies will remain in compliance with Section 7.12;

          (f) Indebtedness which represents an extension, refinancing, or renewal of any of the
Indebtedness described in clause (b) hereof; provided that, (i) the principal amount or interest
rate of such Indebtedness is not increased, (ii) any Liens securing such Indebtedness are not
extended to any additional property of any Borrower, (iii) no Borrower that is not originally
obligated with respect to repayment of such Indebtedness is required to become obligated with
respect thereto, (iv) such extension, refinancing or renewal does not result in a shortening of the
average weighted maturity of the Indebtedness so extended, refinanced or renewed, (v) the terms of
any such extension, refinancing, or renewal are not less favorable to the obligor thereunder than
the original terms of such Indebtedness and (iv) if the Indebtedness that is refinanced, renewed,
or extended was subordinated in right of payment to the Obligations, then the terms and conditions
of the refinancing, renewal, or extension Indebtedness must include subordination terms and
conditions that are at least as favorable to the Administrative Agent as those that were applicable
to the refinanced, renewed, or extended Indebtedness;

          (g) Indebtedness owed to any Person providing workers’ compensation, health, disability or
other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or
indemnification obligations to such Person, in each case incurred in the ordinary course of
business;

          (h) Indebtedness of any Borrower or any Subsidiary in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of
business;

          (i) Guarantees made by any Borrower on behalf of any Subsidiary (other than a Foreign
Subsidiary except to the extent permitted under the definition of “Permitted Foreign Loan
Investment”), provided that after giving effect thereto, the Companies will remain in
compliance with Section 7.12;

          (j) Indebtedness of any Borrower incurred as an account party in respect of Letter(s) of
Credit;

          (k) Indebtedness of any Borrower secured only by patents, patent applications and
registrations, trademarks, trademark applications and registrations, copyrights and copyright
applications and registrations of any Borrower, and any rights related to the foregoing;
provided, that after giving effect thereto, the Companies will remain in compliance with
Section 7.12; and

          (l) Indebtedness in respect of the Convertible Notes and any Refinancing Indebtedness.

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     SECTION 7.02. Liens. No Borrower will, nor will it permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired
by it, or assign or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:

          (a) Liens created pursuant to any Loan Document;

          (b) Permitted Encumbrances;

          (c) any Lien on any property or asset of any Borrower or any Subsidiary existing on the date
hereof and set forth in Schedule 7.02(c); provided that (i) such Lien shall not
apply to any other property or asset of any Borrower or any Subsidiary and (ii) such Lien shall
secure only those obligations which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount thereof;

          (d) Liens on capital assets acquired by any Borrower or any Subsidiary; provided that
(i) such security interests secure Indebtedness permitted by clause (e) of Section 7.01, and (ii)
such security interests shall not apply to any other property or assets of any Borrower or any
Subsidiary;

          (e) in connection with any Acquisition, any Lien on personal property of the acquisition
target with respect to Capital Lease Obligations or purchase money Indebtedness existing prior to
acquisition by Holdings or any Subsidiary, provided that (i) such Lien shall be limited to
the assets financed by such capital lease or purchase money Indebtedness, (ii) such Lien shall not
apply to the inventory, accounts and general intangibles of the acquisition target, (iii) such Lien
shall not apply or extend to any other assets or property of any Borrower, (iv) such Lien shall
secure only those obligations it secures on the date of such acquisition, including any extensions,
renewals and replacements thereof, and no future obligations, and (v) such Lien was not granted in
contemplation of or in connection with such Acquisition;

          (f) Liens of a collecting bank arising in the ordinary course of business under Section 4-208
of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being
collected upon;

          (g) Liens arising out of sale and leaseback transactions permitted by Section 7.06; and

          (h) Liens solely on patents, patent applications and registrations, trademarks, trademark
applications and registrations, copyrights and copyright applications and registrations of any
Borrower, and any rights related to the foregoing; provided, that such Liens secure only
Indebtedness permitted by clause (k) of Section 7.01.

Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 7.02 may at any
time attach to any Borrower’s (1) Accounts, other than those permitted under clause (a) of the
definition of Permitted Encumbrance and clause (a) above and (2) Inventory, other than those
permitted under clauses (a) and (b) of the definition of Permitted Encumbrance and clause (a)
above.

     SECTION 7.03. Fundamental Changes. (a) No Borrower will, nor will it permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall have occurred and be
continuing, (i) any Subsidiary of any Borrower may merge into such Borrower in a transaction in
which such Borrower is the surviving

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corporation, (ii) any Subsidiary that is not a Borrower may liquidate or dissolve if the
Borrower Representative determines in good faith that such liquidation or dissolution is in the
best interests of the Borrowers and is not materially disadvantageous to the Administrative Agent;
provided that any such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by Section 7.04, and
(iii) any Borrower or Subsidiary may merge with another Person in connection with a Permitted
Acquisition so long as such Borrower is the surviving entity in any such merger involving a
Borrower.

          (b) No Borrower will, nor will it permit any of its Subsidiaries to, engage to any material
extent in any business other than businesses of the type conducted by such Borrower or such
Subsidiary on the date of execution of this Agreement and businesses reasonably related thereto.

          (c) No Borrower will, nor will it permit any of its Subsidiaries to, form any new Subsidiary
which is a Foreign Subsidiary, except to the extent permitted under the definition of “Permitted
Foreign Subsidiary Loan and Investment”.

          (d) Holdings will not engage in any business or activity other than the ownership of all the
outstanding shares of capital stock of S&W Corp., TCHC, USR and the other Subsidiaries and
activities incidental thereto. Holdings will not own or acquire any assets (other than Equity
Interests of S&W Corp., TCHC, USR or other Subsidiaries as permitted hereunder and the cash
proceeds of any Restricted Payments permitted by Section 7.08) or incur any liabilities (other than
liabilities under the Loan Documents and liabilities reasonably incurred in connection with its
maintenance of its existence), except in accordance with this Agreement.

     SECTION 7.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Borrower
will, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any
merger with any Person that was not a Borrower and a wholly owned Subsidiary prior to such merger)
any capital stock, evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or any other interest in,
any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit (whether through purchase of assets,
merger or otherwise), except:

          (a) Permitted Investments, provided that, in the case of investments described in
clauses (a) through (e) of the definition of Permitted Investments, such investments (other than
investments in any Excluded Account (as defined in the Security Agreement)) shall be subject to
control agreements in favor of the Administrative Agent or otherwise subject to a perfected
security interest in favor of the Administrative Agent;

          (b) (i) investments in existence on the date of this Agreement by a Borrower in Equity
Interests of its Subsidiaries and (ii) other investments in existence on the date of this Agreement
as described in Schedule 7.04(b); provided, that, other than to the extent
permitted by clause (c) below, the amount in each case of (i) and (ii) is not increased after the
date of this Agreement;

          (c) investments after the date hereof by a Borrower in Equity Interests in its Domestic
Subsidiaries, provided that any such Equity Interests shall be pledged to the
Administrative Agent for the benefit of the Secured Parties in accordance with Section 6.13(b);

          (d) loans or advances made by any Borrower to any Domestic Subsidiary and made by any
Subsidiary to any Borrower or any other Domestic Subsidiary;

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          (e) guarantees constituting Indebtedness permitted by Section 7.01(i) or arising by
endorsement of items for deposit or collection received in the ordinary course of business;

          (f) investments by Holdings in any Subsidiary to the extent required to make a Permitted
Acquisition in accordance with the terms of this Agreement; provided with respect to any
Foreign Subsidiary, (i) such investment is a Permitted Foreign Subsidiary Loan and Investment, (ii)
the Equity Interests held by a Borrower in such Foreign Subsidiary shall be pledged to the
Administrative Agent for the benefit of the Secured Parties in accordance with Section 6.13(b) and
(iii) such Foreign Subsidiary must have the capacity to obtain its own financing without recourse
to any Borrower;

          (g) subject to Section 8.02 hereof, notes payable, or stock or other securities issued by
Account Debtors to a Borrower pursuant to negotiated agreements with respect to settlement of such
Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

          (h) investments in the form of Swap Agreements permitted by Section 7.07;

          (i) investments of any Person existing at the time such Person becomes a Subsidiary of
Holdings or consolidates or merges with Holdings or any of the Subsidiaries so long as such
investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

          (j) investments received in connection with the dispositions of assets permitted by Section
7.05; and

          (k) investments constituting deposits described in clauses (c) and (d) of the definition of
the term “Permitted Encumbrances”;

     SECTION 7.05. Asset Sales. No Borrower will, nor will it permit any Subsidiary to,
sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it,
nor will any Borrower permit any Subsidiary to issue any additional Equity Interest in such
Subsidiary (other than to a Borrower or another Subsidiary in compliance with Section 7.04),
except:

          (a) sales, transfers and dispositions of (i) inventory in the ordinary course of business and
(ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;

          (b) sales, transfers and dispositions to a Borrower;

          (c) sales, transfers and dispositions of accounts receivable in connection with the
compromise, settlement or collection thereof;

          (d) sales, transfers and dispositions of investments permitted by clauses (h) and (j) of
Section 7.04;

          (e) sale and leaseback transactions permitted by Section 7.06;

          (f) dispositions resulting from any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any property or asset of any
Borrower or any Subsidiary; and

          (g) sales, transfers and other dispositions of assets (other than Equity Interests in a
Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any
other paragraph of this Section, provided that the aggregate fair market value of all
assets sold, transferred or

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otherwise disposed of in reliance upon this paragraph (g) shall not exceed $5,000,000 during
any fiscal year of the Companies;

provided that all sales, transfers, leases and other dispositions permitted hereby (other
than those permitted by paragraphs (b) and (f) above) shall be made for fair value and for at least
100% cash consideration.

     SECTION 7.06. Sale and Leaseback Transactions. No Borrower will, nor will it permit
any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property that it intends to
use for substantially the same purpose or purposes as the property sold or transferred, except as
permitted by Schedule 7.06 and except for any such sale of any fixed or capital assets by
any Borrower or any Subsidiary that is made for cash consideration in an amount not less than the
fair value of such fixed or capital asset and is consummated within ninety (90) days after such
Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset.

     SECTION 7.07. Swap Agreements. No Borrower will, nor will it permit any Subsidiary
to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate
risks to which a Borrower or any Subsidiary has actual exposure (other than those in respect of
Equity Interests of any Borrower or any of its Subsidiaries), (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any interest-bearing liability
or investment of any Borrower or any Subsidiary, and (c) Foreign Exchange Obligations.

     SECTION 7.08. Restricted Payments; Certain Payments of Indebtedness. (a) No Borrower
will, nor will it permit any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except (i) the Borrowers may declare and pay dividends with respect to their common stock payable
solely in additional shares of its common stock and in cash to the extent after giving effect
thereto the Borrowers will remain in compliance with Section 7.12, and (ii) Subsidiaries may
declare and pay dividends ratably with respect to their Equity Interests.

          (b) No Borrower will, nor will it permit any Subsidiary to, make or agree to pay or make,
directly or indirectly, any payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Indebtedness, except:

	 	(i)	 	payment of Indebtedness created under the Loan
Documents;

	 	(ii)	 	with the prior written consent of the
Administrative Agent, payment of Indebtedness permitted by Section 7.01
with the proceeds of the issuance of Equity Interests;

	 	(iii)	 	payment of regularly scheduled interest and
principal payments as and when due in respect of any Indebtedness
(subject to any subordination agreements);

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	 	(iv)	 	prepayment of Indebtedness permitted by Section
7.01 provided that (A) no Default or Event of Default has occurred and
is continuing; (B) the making of such prepayment will not result in the
occurrence of a Default or Event of Default after giving effect
thereto; and (C) except as to prepayment of the Indebtedness permitted
by Section 7.01(l), the Administrative Agent has given its prior
written consent, which consent shall not be unreasonably withheld;

	 	(v)	 	refinancings of Indebtedness to the extent
permitted by Section 7.01; and

	 	(vi)	 	payment of secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness.

     SECTION 7.09. Transactions with Affiliates. No Borrower will, nor will it permit any
Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other transactions with,
any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to a Borrower or such Subsidiary
than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions
between or among a Borrower and any Subsidiary that is a Borrower not involving any other
Affiliate, (c) any loan, advance or investment permitted by Sections 7.04(c), 7.04(d) or 7.04(f),
(d) any Indebtedness permitted under Sections 7.01(d) and 7.01(i), (e) any Restricted Payment
permitted by Section 7.08, (f) loans or advances to employees permitted under Section 7.04, (g) the
payment of reasonable fees to directors of any Borrower or any Subsidiary who are not employees of
such Borrower or such Subsidiary, and compensation and employee benefit arrangements paid to, and
indemnities provided for the benefit of, directors, officers or employees of any Borrower or its
Subsidiaries in the ordinary course of business and (h) any issuances of securities or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of,
employment agreements, stock options and stock ownership plans approved by any Borrower’s board of
directors.

     SECTION 7.10. Restrictive Agreements. No Borrower will, nor will it permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such
Borrower or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or advances to any
Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other
Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 7.10 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such Indebtedness and (v)
clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof.

     SECTION 7.11. Amendment of Certain Documents. No Borrower will, nor will it permit
any Subsidiary to, amend, modify or waive (a) any of its rights under its Organization Documents,
(b) any

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term or condition of any Convertible Notes Document in any manner materially adverse to the
interests or rights of the Administrative Agent or any Lender under the Loan Documents,
provided that Holdings may agree with the holders of the Convertible Notes to amend Section
10.12 of the Convertible Notes Indenture to remove the restriction on Holdings’ ability to incur
additional indebtedness and liens and the requirement for Holdings to deliver notices as set forth
therein, or (c) any term or condition of any Refinancing Indebtedness Document in any manner
materially adverse to the interests and rights of the Administrative Agent or any Lender under the
Loan Documents.

     SECTION 7.12. Financial Covenants.

          (a) Consolidated Fixed Charge Coverage Ratio. The Companies will not permit the
Consolidated Fixed Charge Coverage Ratio, determined for any Test Period ending on October 31, 2010
and the end of each fiscal quarter thereafter, to be less than 1.50:1.00.

          (b) Consolidated Leverage Ratio. The Companies will not permit the Consolidated
Leverage Ratio, determined for any Test Period ending on October 31, 2010 and the end of each
fiscal quarter thereafter, to be greater than 3.25:1.00.

ARTICLE VIII

Events of Default

     SECTION 8.01. Events of Default. If any of the following events (“Events of
Default”) shall occur:

          (a) any Borrower shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any Letter of Credit when and as the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment thereof or otherwise, and such failure shall
continue unremedied for a period of five (5) days;

          (b) any Borrower shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under this Agreement, when
and as the same shall become due and payable, and such failure shall continue unremedied for a
period of five (5) days;

          (c) any representation or warranty made or deemed made by or on behalf of any Borrower or any
Subsidiary in or in connection with this Agreement or any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to have been materially
incorrect when made or deemed made;

          (d) any Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 6.02(a), 6.03 (with respect to a Borrower’s existence) or 6.08 or in Article
VII;

          (e) any Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those which constitute a default under another Section of
this Article), and such failure shall continue unremedied for a period of (i) five (5) Business
Days after the earlier of knowledge of such breach or notice thereof from the Administrative Agent
if such breach relates to terms or provisions of Section 6.02 (other than Section 6.02(a)), 6.03
through 6.07, 6.09, 6.10 or

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6.12 of this Agreement or (ii) thirty (30) days after the earlier of knowledge of such breach
or notice thereof from the Administrative Agent if such breach relates to terms or provisions of
any other Section of this Agreement;

          (f) any Borrower or any Subsidiary shall fail to make any payment within 10 days (whether of
principal or interest and regardless of amount) in respect of any Material Indebtedness, when and
as the same shall become due and payable;

          (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

          (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of a Borrower or any
Subsidiary, or its debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
any Borrower or any Subsidiary of any Borrower or for a substantial part of its assets, and, in any
such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order
or decree approving or ordering any of the foregoing shall be entered;

          (i) any Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for such Borrower or
Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

          (j) any Borrower or any Subsidiary shall become unable, admit in writing its inability or fail
generally to pay its debts as they become due;

          (k) one or more judgments for the payment of money in an aggregate amount of $4,000,000.00 or
more (not paid or fully covered by insurance as to which the relevant insurance company has
acknowledged coverage) shall be rendered against any Borrower or any Subsidiary or any combination
thereof and the same shall remain undischarged for a period of sixty (60) consecutive days during
which execution shall not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of any Borrower or any Subsidiary to enforce any such
judgment or any Borrower or any Subsidiary shall fail within sixty (60) days to discharge one or
more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not
stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings
diligently pursued;

          (l) an ERISA Event shall have occurred that, in the opinion of the Administrative Agent, when
taken together with all other ERISA Events that have occurred, could reasonably be

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expected to result in liability of a Borrower or any Subsidiary in an aggregate amount
exceeding $2,000,000.00;

          (m) a Change in Control shall occur;

          (n) the occurrence of any “default”, as defined in any Loan Document (other than this
Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this
Agreement), which default or breach continues beyond any period of grace therein provided;

          (o) any Collateral Document shall for any reason fail to create a valid and perfected first
priority security interest in any Collateral purported to be covered thereby, except as permitted
by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or any Borrower shall fail to comply with any of the
terms or provisions of any Collateral Document;

          (p) any material provision of any Loan Document for any reason ceases to be valid, binding and
enforceable in accordance with its terms (or any Borrower shall challenge the enforceability of any
Loan Document or shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);

          (q) any one or more material licenses, permits or authorizations now or hereafter held by any
Borrower permitting the manufacture and/or sale of firearms shall be terminated, suspended or
revoked or shall not be renewed, which terminations, suspensions, revocations or failures to renew
would, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect; or

          (r) any Borrower or any Subsidiary shall fail to make any payment (regardless of amount) in
respect of any Cash Management Obligation, Swap Obligation or Foreign Exchange Obligation, and such
failure shall continue unremedied for a period of five (5) days.

     SECTION 8.02. Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent may, and shall at the request of the Required Lenders and the
LC Issuer, as applicable, take any or all of the following actions:

          (a) declare the commitment of each Lender to make Loans and any obligation of the LC Issuer to
issue Letters of Credit to be terminated, whereupon such commitments and obligation shall be
terminated;

          (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrowers;

          (c) require that the Borrowers cash collateralize the LC Exposure as provided in Section
2.09(h); and

          (d) exercise on behalf of itself, the Lenders and the LC Issuer all rights and remedies
available to it, the Lenders, the LC Issuer and the other Secured Parties under the Loan Documents;

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provided that upon the occurrence of an actual or deemed entry of an order for relief with respect
to any Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to
make Loans and any obligation of the LC Issuer to issue Letters of Credit to be terminated shall
automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and payable and the obligations of the
Borrowers to cash collateralize the LC Exposure as aforesaid shall automatically become effective,
in each case without further act of the Administrative Agent or any Lender.

The Administrative Agent, for the benefit of the Lenders and the LC Issuer shall also have the
right of the appointment of a receiver for the assets and property of each of the Borrowers, and
each of the Borrowers consent to such rights and such appointment and hereby waive any objection
such Borrower may have thereto.

     SECTION 8.03. Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and payable and the LC
Exposure have automatically been required to be cash collateralized as set forth in the proviso to
Section 8.02), any amounts received on account of the Obligations from proceeds of Collateral shall
be applied by the Administrative Agent in the following order:

     First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest but including
fees, charges and disbursements of counsel to the Administrative Agent and amounts payable
under Article III) payable to the Administrative Agent in its capacity as such;

     Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of Credit Fees)
payable to any Lender and the LC Issuer (including fees, charges and disbursements of
counsel to the respective Lenders payable under Section 10.04 and amounts payable under
Article III), ratably among them in proportion to the amounts respectively described
in this clause Second payable to them;

     Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees, Unused Revolver Fees, interest on the Loans, LC Disbursements,
LC Borrowings and other Obligations, ratably among the Lenders and the LC Issuer in
proportion to the respective amounts described in this clause Third payable to them;

     Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, LC Disbursements, LC Borrowings, amounts owing under Cash Management
Agreements, the Swap Termination Value of Swap Agreements, including, without limitation,
Foreign Exchange Obligations, ratably among the Lenders, the LC Issuer and other Secured
Parties in proportion to the respective amounts described in this clause Fourth held
by them;

     Fifth, to the Administrative Agent for the account of the LC Issuer, to cash
collateralize that portion of LC Exposure comprised of the aggregate undrawn amount of
Letters of Credit;

     Sixth, to payment of breakage, termination, prepayment, yield maintenance or
other amounts owing in respect of any between any Borrower and any Secured Party, to the
extent such Obligations are permitted hereunder, ratably among such Secured Parties; and

     Last, the balance, if any, after all of the Obligations then due have been paid
in full, to the Borrowers or as otherwise required by Law.

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Subject to Section 2.09(h), amounts used to cash collateralize the LC Exposure pursuant to clause
Fifth above shall be applied to satisfy drawings under such Letters of Credit as they
occur. If any amount remains on deposit as cash collateral after all Letters of Credit have either
been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if
any, in the order set forth above.

     Each Borrower acknowledges the relative rights, priorities and agreements of the Secured
Parties, as set forth in this Agreement, including as set forth in this Section 8.02.

ARTICLE IX

Administrative Agent

     SECTION 9.01. Appointment and Authority.

          (a) Each of the Lenders and the LC Issuer hereby irrevocably appoints TD Bank to act on its
behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Administrative Agent, the Lenders and the LC Issuer, and no Borrower shall have
rights as a third party beneficiary of any of such provisions.

          (b) The Administrative Agent shall also act as the “collateral agent” under the Loan
Documents, and each of the Lenders (in its capacities as a Lender, potential counterparty to Swap
Agreements, including with respect to Foreign Exchange Obligations, and potential Cash Management
Bank) and the LC Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act
as the agent of such Lender and the LC Issuer for purposes of acquiring, holding and enforcing any
and all Liens on Collateral granted by any of the Borrowers to secure any of the Obligations,
together with such powers and discretion as are reasonably incidental thereto. In this connection,
the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact
appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing
any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for
exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall
be entitled to the benefits of all provisions of this Article IX and Article X including
Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral
agent” under the Loan Documents) as if set forth in full herein with respect thereto.

     SECTION 9.02. Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent and the term “Lender” or “
Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its capacity as a Lender. Such
Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or
in any other advisory capacity for and generally engage in any kind of business with the Borrowers
or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent
hereunder and without any duty to account therefor to the Lenders.

     SECTION 9.03. Exculpatory Provisions. Administrative Agent shall have no duties or
obligations except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:

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          (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;

          (b) shall not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan
Documents that Administrative Agent is required to exercise as directed in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

          (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, and shall not be liable for the failure to disclose, any information relating to
any Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as
Administrative Agent or by any of its Affiliates in any capacity.

     The Administrative Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence
of its own gross negligence or willful misconduct. The Administrative Agent shall not be deemed to
have knowledge of any Default unless and until notice describing such Default is given to the
Administrative Agent by the Borrower Representative or a Lender.

     The Administrative Agent shall not be responsible to the Lenders or any of their respective
Related Parties for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the occurrence of any
Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.

     SECTION 9.04. Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by it to be genuine
and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent may rely upon any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the LC Issuer, the
Administrative Agent may presume that such condition is satisfactory to such Lender or the LC
Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender
or the LC Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The
Administrative Agent may consult with legal counsel (who may be counsel for any Borrower),
independent accountants and other experts selected by it, and shall not be liable to the Lenders or
any of their respective Related Parties for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

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     SECTION 9.05. Delegation of Duties. The Administrative Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent
and any such sub-agent may perform any and all of its duties and exercise its rights and powers by
or through their respective Related Parties. The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as the Administrative Agent.

     SECTION 9.06. Resignation of Administrative Agent. (a) The Administrative Agent may
at any time give notice of its resignation to the Lenders, the LC Issuer and the Borrower
Representative. Upon receipt of any such notice of resignation, the Required Lenders shall have
the right, in consultation with the Borrowers, to appoint a successor Administrative Agent, which
shall be a depository institution with an office in the United States, or an Affiliate of any such
depository institution with an office in the United States. If no such successor shall have been
so appointed by the Required Lenders or such successor shall not have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may on behalf of the Lenders and the LC Issuer appoint a successor
Administrative Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrower Representative and the Lenders that no qualifying
Person has accepted such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the retiring Administrative Agent on behalf of the Lenders or the LC
Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is appointed) and
(b) all payments, communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the LC Issuer directly, until
such time as the Required Lenders appoint a successor Administrative Agent as provided for above in
this Section.

          (b) If the Administrative Agent is a Defaulting Lender, the Required Lenders may remove the
Administrative Agent from such capacity by giving written notice to the Administrative Agent and
the other Lenders, and shall have the right, in consultation with the Borrower Representative, to
appoint a successor Administrative Agent, which shall be a depository institution with an office in
the United States, or an Affiliate of any such depository institution with an office in the United
States. If no such successor shall have been so appointed by the Required Lenders or such
successor shall not have accepted such appointment by the date which is 15 days after the Required
Lenders deliver such notice of removal, the removal shall nevertheless thereupon become effective,
and (a) the removed Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any collateral security
held by the removed Administrative Agent on behalf of the Lenders or the LC Issuer under any of the
Loan Documents, the removed Administrative Agent shall continue to hold such collateral security
until such time as a successor Administrative Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the removed Administrative
Agent shall instead be made by or to each Lender and the LC Issuer directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above in this Section.

          (c) Upon the acceptance of a successor’s appointment as Administrative Agent under subsections
(a) or (b) of this Section, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring, retired or removed Administrative Agent, as
applicable, and the retiring, retired or removed Administrative Agent shall be discharged from all
of its duties and obligations hereunder or under the other Loan Documents (if not already
discharged therefrom

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as provided above in subsections (a) or (b) of this Section). The fees payable by the
Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrowers and such successor. After the Administrative Agent’s
resignation or removal pursuant to subsections (a) or (b) of this Section, the provisions of this
Article and Section 10.04 shall continue in effect for the benefit of such retiring, retired or
removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while the retiring, retired or removed
Administrative Agent was acting as Administrative Agent.

          (d) Any resignation by or removal of the Administrative Agent pursuant to subsections (a) or
(b) of this Section shall also constitute its resignation or removal as the LC Issuer. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall
succeed to and become vested with all of the rights, powers, privileges and duties of the retiring,
retired or removed LC Issuer, (ii) the retiring, retired or removed LC Issuer shall be discharged
from all of its duties and obligations hereunder or under the other Loan Documents, and (iii) the
successor LC Issuer shall issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or make other arrangements satisfactory to the
retiring, retired or removed LC Issuer to effectively assume the obligations of the retiring,
retired or removed LC Issuer with respect to such Letters of Credit.

     SECTION 9.07. Non-Reliance on Administrative Agent and Other Lenders. Each Lender and
the LC Issuer acknowledges that it has, independently and without reliance upon any Administrative
Agent or any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender and the LC Issuer also acknowledges that it will, independently and
without reliance upon any Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document furnished hereunder or
thereunder.

     SECTION 9.08. No Other Duties, Etc. Anything herein to the contrary notwithstanding,
the Administrative Agent, shall not have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as applicable, as an
Administrative Agent, a Lender or the LC Issuer hereunder. None of the Lenders or other entities
identified on the facing page of this Agreement as a “Syndication Agent”, “Sole Lead Arranger” or
“Sole Bookrunner” shall have any right, power, obligation, liability, responsibility or duty under
this Agreement or any other Loan Document other than those applicable to all Lenders as such if
such entity is also a Lender. Without limiting the foregoing, none of the Lenders or other
entities so identified shall have or be deemed to have any fiduciary relationship with any other
Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders
or other entities so identified in deciding to enter into this Agreement or any other Loan Document
or in taking or not taking action hereunder or thereunder.

     SECTION 9.09. Administrative Agent May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Borrower, any Administrative Agent
(irrespective of whether the principal of any Loan or LC Exposure shall then be due and payable as
herein expressed or by declaration or otherwise and irrespective of whether such Administrative
Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention
in such proceeding or otherwise

          (a) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, LC Exposure and all other Obligations that are owing and unpaid and

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to file such other documents as may be necessary or advisable in order to have the claims of
the Lenders, the LC Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the LC Issuer and the
Administrative Agent and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.12 and 10.04) allowed in such judicial proceeding;
and

          (b) to collect and receive any monies or other property payable or deliverable on any such
claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the LC Issuer to make such
payments to the Administrative Agent and, in the event that the Administrative Agent shall consent
to the making of such payments directly to the Lenders and the LC Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.18 and 10.04.

     Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender or the LC Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the
LC Issuer or to authorize the Administrative Agent to vote in respect of the claim of any Lender or
the LC Issuer in any such proceeding.

     SECTION 9.10. Collateral Matters. The Lenders and the LC Issuer irrevocably authorize
the Administrative Agent to, and the Administrative Agent shall, at the request of the Borrower
Representative:

          (a) release any Lien on any property granted to or held by the Administrative Agent under any
Loan Document (i) upon termination of the Revolving Commitments and LC Commitment and payment in
full of all Obligations (other than contingent indemnification obligations), (ii) that is sold or
to be sold or otherwise disposed of as part of or in connection with any sale or other disposition
permitted hereunder or under any other Loan Document, (iii) subject to Section 10.01, if approved,
authorized or ratified in writing by the Required Lenders, or (iv) owned by a Borrower upon release
of such Borrower from its obligations under this Agreement pursuant to clause (c) below;

          (b) release or subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that is permitted by
Section 7.02(d); and

          (c) release any Borrower (other than Holdings) from its obligations under this Agreement if
such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder;
provided that no such release shall occur if such Borrower continues to be a guarantor in
respect of any other Indebtedness of a Borrower unless and until such Borrower is (or is being
simultaneously) released from its guaranty with respect to such other Indebtedness.

     Upon request by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent’s, as the case may be, authority to release or subordinate its
interest in particular types or items of property, or to release any Borrower from its obligations
under this Agreement pursuant to this Section 9.10. In each case as specified in this Section
9.10, the Administrative Agent will, at the Borrowers expense and provided that the
Borrowers shall have provided the Administrative Agent such certifications or documents as the
Administrative Agent shall reasonably

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request in order to demonstrate compliance with the provisions of this Agreement described
above, execute and deliver to the applicable Borrower such documents as such Borrower may
reasonably request to evidence the release of such item of Collateral from the security interest
granted under the Collateral Documents, or to release such Borrower from its obligations under this
Agreement, in each case in accordance with the terms of the Loan Documents.

ARTICLE X

Miscellaneous

     SECTION 10.01. Amendments, Etc. Except as otherwise specified in this Agreement, no
amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent
to any departure by any Borrower therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrowers or the applicable Borrower, as the case may be, and acknowledged
by the Administrative Agent, and each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that no such
amendment, waiver or consent shall:

          (a) extend or increase any Revolving Commitment or LC Commitment of any Lender (or reinstate
any Revolving Commitment or LC Commitment terminated pursuant to Section 8.02) without the written
consent of such Lender (it being understood that no amendment, modification, termination, waiver or
consent with respect to any condition precedent, covenant or Default shall constitute an increase
in the Revolving Commitment or LC Commitment of any Lender);

          (b) (A) change the scheduled final maturity of any Loan, (B) postpone the date for payment of
any principal, interest fees or any other amount payable hereunder or under any Loan Documents,
(C) reduce the amount of, waive or excuse any such payment or (D) postpone the scheduled date of
expiration of any Revolving Commitment or LC Commitment, in any case, without the written consent
of each Lender directly affected thereby;

          (c) reduce or forgive the principal of, or the rate of interest specified herein on, any Loan
or LC Disbursement, or any fees or other amounts payable hereunder or under any other Loan Document
or change the form or currency of payment without the written consent of each Lender directly
affected thereby (it being understood that any amendment or modification to the financial
definitions in this Agreement shall not constitute a reduction in the rate of interest for purposes
of this clause (c));

          (d) change Section 2.15 or Section 8.02 in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender;

          (e) change any provision of this Section 10.01 or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;

          (f) change any provision of Section 10.06 in a manner which would restrict the ability of any
Lender to assign any of its rights or obligations hereunder without the written consent of each
Lender;

          (g) other than in a transaction permitted under Section 7.05, except as otherwise provided in
any other Loan Document, release all or substantially all of the Collateral in any transaction or
series of related transactions, without the written consent of each Lender; or

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          (h) amend or waive any provision contained in Section 2.02(b) without the consent of each
Lender.

and provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the LC Issuer in addition to the Lenders required above, affect the rights or
duties of the LC Issuer under this Agreement or any Issuer Document relating to any Letter of
Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required above, affect the rights
or duties of the Administrative Agent under this Agreement or any other Loan Document; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in
addition to the Lenders required above, affect the rights or duties of the Swingline Lender under
this Agreement or any other Loan Document; and (iv) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove
any amendment, waiver or consent hereunder, except that the Revolving Commitments and LC
Commitments, if any, of such Lender may not be increased or extended without the consent of such
Lender.

     If, in connection with any proposed change, waiver, discharge or termination of the provisions
of this Agreement as contemplated by this Section 10.01, the consent of the Required Lenders is
obtained but the consent of one or more of such other Lenders whose consent is required is not
obtained, then the Borrowers shall have the right to replace all non-consenting Lenders required to
obtain such consent with one or more Eligible Assignees in accordance with Section 10.13, so long
as at the time of such replacement each such new Lender consents to the proposed change, waiver,
discharge or termination.

     Notwithstanding anything to the contrary, without the consent of any other Person, the
applicable Borrower or Borrowers and the Administrative Agent may (in its or their respective sole
discretion, or shall, to the extent required by any Loan Document) enter into any amendment or
waiver of any Loan Document, or enter into any new agreement or instrument, to effect the granting,
perfection, protection, expansion or enhancement of any security interest in any Collateral or
additional property to become Collateral for the benefit of the Secured Parties, or as required by
local law to give effect to, or protect any security interest for the benefit of the Secured
Parties, in any property or so that the security interests therein comply with applicable law.

     SECTION 10.02. Notices; Effectiveness; Electronic Communication.

          (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b) below), all
notices and other communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or sent by electronic
mail transmission as follows, and all notices and other communications expressly permitted
hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

	 	(i)	 	if to the Administrative Agent,
Swingline Lender or LC Issuer at:

TD Bank, N.A.

1441 Main Street

Springfield, MA 01103

Attention: Maria P. Goncalves,

Regional Vice President

E-mail: maria.goncalves@tdbanknorth.com

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And

TD Bank, N.A.

1441 Main Street

Springfield, MA 01103

Attention: Joanne Lavoie

Commercial Sales Assistant

E-mail: joanne.lavoie@tdbanknorth.com

with copy to:

Edwards Angell Palmer & Dodge LLP

111 Huntington Avenue

Boston, MA 02199

Attention: James I. Rubens, Esq.

E-mail: jrubens@eapdlaw.com

	 	(ii)	 	if to any Borrower, to the Borrower Representative at:

Smith & Wesson Holding Corporation

c/o Smith & Wesson Corp.

2100 Roosevelt Avenue

Springfield, MA 01102-2208

Attention: John Dineen

E-mail: jdineen@smith-wesson.com

with a copy to:

Smith & Wesson Holding Corporation

c/o Smith & Wesson Corp.

2100 Roosevelt Avenue

Springfield, MA 01102-2208

Attention: Deana McPherson

E-mail: dmcpherson@smith-wesson.com

and with a copy to:

Greenberg Traurig, LLP

2375 E. Camelback Road

Suite 700

Phoenix, AZ 85016

Attention: Karl A. Freeburg

E-mail: Freeburgk@gtlaw.com

	 	(iii)	 	if to any other Lender, to the address,
electronic mail address or telephone number set forth for such Lender
on Schedule 10.02(a).

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received. Notices delivered through electronic mail transmission
to the extent provided in subsection (b) below, shall be effective as provided in such subsection
(b).

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          (b) Electronic Communications. (i) Notices and other communications to the Lenders
and the LC Issuer hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative
Agent; provided that the foregoing shall not apply to notices to any Lender pursuant to
Article II if such Lender or the LC Issuer, as applicable, has notified the Administrative Agent
that it is incapable of receiving notices under such Article by electronic communication.

          (ii) notices and other communications sent to an e-mail address shall be deemed received upon
the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return
receipt requested” function, as available, return e-mail or other written acknowledgement);
provided that if such notice or other communication is not sent during the normal business
hours of the recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the next business day for the recipient, and (iii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause (ii) of notification
that such notice or communication is available and identifying the website address therefor.

          (c) The Platform. THE INTRALINKS OR OTHER ELECTRONIC DOCUMENT POSTING PLATFORM THAT
MAY BE USED BY THE ADMINISTRATIVE AGENT IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES
(AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF ANY MATERIALS OR INFORMATION
REGARDING THE BORROWERS (THE “BORROWER MATERIALS”) OR THE ADEQUACY OF THE PLATFORM, AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY
OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In
no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to any Borrower or any Lender, the LC Issuer or any other Person
for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or
otherwise) arising out of any Borrower’s or the Administrative Agent’s transmission of Borrower
Materials through the Internet, except to the extent that such losses, claims, damages, liabilities
or expenses are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of any Agent Party;
provided, however, that in no event shall any Agent Party have any liability to any
Borrower, any Lender, the LC Issuer or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).

          (d) Change of Address, Etc. Each of any Borrower, the Administrative Agent and the LC
Issuer may change its address, facsimile or telephone number for notices and other communications
hereunder by notice to the other parties hereto. Each other Lender may change its address,
facsimile or telephone number for notices and other communications hereunder by notice to the
Borrower Representative, the Administrative Agent and the LC Issuer.

          (e) Reliance by Administrative Agent, the LC Issuer, the Administrative Agent and
Lenders. The Administrative Agent, the LC Issuer and the Lenders shall be entitled to rely and
act upon any notices (including telephonic Borrowing Requests or Conversion/Continuation Notices)
purportedly given by or on behalf of the Borrower Representative even if (i) such notices were not
made in a manner specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied
from any confirmation thereof. The Borrowers shall indemnify the Administrative Agent the LC
Issuer, each Lender and the Related Parties

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of each of them from all losses, costs, expenses and liabilities resulting from the reliance
by such Person on each notice purportedly given by or on behalf of the Borrower Representative.
All telephonic notices to and other telephonic communications with the Administrative Agent may be
recorded by Administrative Agent, and each of the parties hereto hereby consents to such recording.

     SECTION 10.03. No Waiver; Cumulative Remedies. No failure by the Administrative
Agent, any Lender, the LC Issuer or any other Secured Party to exercise, and no delay by any such
Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

     SECTION 10.04. Expenses; Indemnity; Damage Waiver.

          (a) Costs and Expenses. The Borrowers shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent (including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent and one local counsel per jurisdiction on
behalf of the Administrative Agent) and the Lead Arranger, in connection with the syndication of
the credit facilities provided for herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents, any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the LC Issuer
in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any
demand for payment thereunder, (iii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, any Lender or the LC Issuer (including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or the LC Issuer and one separate counsel
for all Lenders (other than the Administrative Agent)) in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other Loan Documents,
including without limitation (x) its rights under this Section 10.04 and (y) during any workout or
restructuring, or (B) in connection with the Loans made or Letters of Credit issued hereunder,
including all such reasonable out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

          (b) Indemnification by the Borrowers. The Borrowers shall jointly and severally
indemnify the Lead Arranger, Administrative Agent (and any sub-agent thereof), each Lender and the
LC Issuer and each Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements of any counsel for
any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party
or by any Borrower arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective obligations hereunder
or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by
the LC Issuer to honor a demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii)
any actual or alleged presence or release or threatened release of Hazardous Material on, at, under
or from any property owned, leased, operated or used by any Borrower or any of the Subsidiaries, or
any environmental claim related in any way to any Borrower or any of the Subsidiaries, or (iv) any
actual or threatened claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought by a third party or
by any other Borrower, and regardless of whether any Indemnitee is a party

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thereto; provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by
a court of competent jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee or its Affiliates and the respective
officers, directors, employees, attorneys, agents and advisors of such Indemnitee and its
Affiliates or (y) result from a claim brought by any Borrower against an Indemnitee for breach in
bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such
Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined
by a court of competent jurisdiction, and provided further that Article III (instead of this
Section 10.04) shall govern indemnity with respect to the matters addressed in such
Article.

          (c) Reimbursement by Lenders. To the extent that the Borrowers for any reason fail to
indefeasibly pay any amount required under subsection (a) or (b) of this Section 10.04 to be paid
by it to Administrative Agent (or any sub-agent thereof), the Swingline Lender, or any Related
Party of any of the foregoing Persons, each Lender severally agrees to pay to the Administrative
Agent (or any such sub-agent), the Swingline Lender or such Related Party, as the case may be, such
Lender’s pro rata share of the Total Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that
the unreimbursed expense or loss, claim, damage, liability or related expense, as the case may be,
was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the
Swingline Lender, in its capacity as such, or against such Related Party; provided
further that no Lender shall be liable for any loss, claim, damage, liability or related
expense required to be paid to the Administrative Agent (or any such sub-agent) or the Swingline
Lender in connection with such capacity, or to such Related Party, as the case may be, under
Section 10.04(b), if and to the extent that such loss, claim, damage, liability or related expense
is determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of the Administrative Agent (or any such
sub-agent), the Swingline Lender or such Related Party, as the case may be. The obligations of the
Lenders under this subsection (c) are subject to the provisions of Section 2.13(e).

          (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrowers shall not assert, and hereby waive, 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,
any other Loan Document or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.
No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

          (e) Payments. All amounts due under this Section 10.04 shall be payable not later
than ten Business Days after demand therefor.

          (f) Survival. The agreements in this Section 10.04 shall survive the resignation of
the Administrative Agent, the LC Issuer, the replacement of any Lender, the termination of the
Revolving Commitments and the repayment, satisfaction or discharge of all the other Obligations.

     SECTION 10.05. Payments Set Aside. To the extent that any payment by or on behalf of
any Borrower is made to the Administrative Agent, the LC Issuer or any Lender, or the
Administrative Agent, the LC Issuer or any Lender exercises its right of setoff, and such payment
or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or

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required (including pursuant to any settlement entered into by the Administrative Agent, the
LC Issuer, or such Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any debtor relief law (including, without
limitation, the US Bankruptcy Code) or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had not occurred, and (b)
each Lender, the LC Issuer and each other Secured Party severally agrees to pay to Administrative
Agent upon demand its applicable share (without duplication) of any amount so recovered from or
repaid by Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in
effect. The obligations of the Lenders, the LC Issuer and the other Secured Parties under clause
(b) of the preceding sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.

     SECTION 10.06. Successors and Assigns. (a) Successors and Assigns Generally.
The provisions of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that no Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with
the provisions of subsection (b) of this Section 10.06, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section 10.06, (iii) by way of pledge or assignment
of a security interest subject to the restrictions of subsection (f) of this Section 10.06 (and any
other attempted assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

          (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Commitment and the Loans (including for purposes of this Section 10.06(b),
participations in LC Exposure) at the time owing to it); provided that

	 	(i)	 	except in the case of an assignment of the
entire remaining amount of the assigning Lender’s Revolving Commitment
or Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund with respect to
a Lender, the aggregate amount of the Revolving Commitment or the
principal outstanding balance of the Loans of the assigning Lender
subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment, is delivered
to the Administrative Agent or, if “Trade Date” is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
the lesser of (x) $5,000,000 and (y) the Revolving Commitment and Loans
held by the assigning Lender unless, in each case, the Administrative
Agent and, so long as no Event of Default has occurred and is
continuing, the Borrowers otherwise consent (each such consent not to
be unreasonably withheld or delayed); provided,
however, that concurrent assignments to members of an Assignee
Group and concurrent assignments from members of an
Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group) will be treated as a
single

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	 	 	 	assignment for purposes of determining whether such minimum
amount has been met;

	 	(ii)	 	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 Loans or the
Revolving Commitment assigned;

	 	(iii)	 	Required Consents. No consent shall
be required for any assignment by a Lender except to the extent
required by this subsection (b)(iii):

	 	(A)	 	the consent of the Borrowers
(such consent not to be unreasonably withheld or delayed) shall
be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund;
	 
	 	(B)	 	the consent of the Administrative
Agent (such consent not to be unreasonably withheld or delayed)
shall be required for assignments in respect of any Revolving
Commitment if such assignment is to a Person that is not a
Lender with a Revolving Commitment in respect of the applicable
facility, an Affiliate of such Lender or an Approved Fund with
respect to such Lender; and
	 
	 	(C)	 	the consent of the LC Issuer
(such consent not to be unreasonably withheld or delayed) shall
be required for any assignment that increases the obligation of
the assignee to participate in exposure under one or more
Letters of Credit (whether or not then outstanding); and

	 	(iv)	 	the parties of each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee in the amount of $3,500;
provided, however, that the Administrative Agent may, in its sole
discretion, elect to waive such processing and recordation fee in the
case of any assignment. The Eligible Assignee, if it is not a Lender,
shall deliver to the Administrative Agent an Administrative
Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c)
of this Section, from and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, 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 Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption 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 3.02, 3.03, 3.05, and 10.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Upon request, the
Borrowers (at their expense) shall execute and deliver the applicable Note
to the assignee Lender. Any assignment
or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection shall be treated for purposes of this Agreement
as a

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sale by such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section 10.06.

          (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrowers, shall maintain a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Revolving
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
in the absence of manifest error, and the Borrowers, the Administrative Agent and the Lenders shall
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. The Register shall be available for inspection by
only the Borrowers and by any Lender (with respect to itself only) at any reasonable time and from
time to time upon reasonable prior notice.

          (d) Participations. Any Lender may at any time, without the consent of, or notice to,
the Borrowers, the Administrative Agent or the Swingline Lender, sell participations to any Person
(other than a natural person or the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Revolving Commitments and/or the Loans;
provided that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the LC Issuer
shall continue to deal solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement; provided that such Lender may agree that it will not,
without the consent of such Participant, agree to any amendment, modification or waiver described
Section 10.01(b) or (c), to the extent affecting such Participant.

     Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in Section 10.01(b) or
(c) that affects such Participant. Subject to subsection (e) of this Section, Borrowers agree that
each Participant shall be entitled to the benefits of Sections 3.02, 3.03 and 3.05 (subject to the
requirements of those sections) to the same extent as if it were a Lender and had acquired its
interest by assignment Pursuant to subsection (b) of this Section. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 10.08 as though it were a
Lender; provided such Participant agrees to be subject to Section 2.15 as though it were a
Lender.

          (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.02 or 3.03 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrowers’ prior written consent (not to be
unreasonably withheld or delayed); provided that, for purposes of this clause (e), entering
into this Agreement or other Loan Document shall not be construed as providing such consent, or the
right to a greater payment results from a Change in Law after the Participant becomes a Participant
with respect to such participation. The Administrative Agent, acting solely for this purpose as
an agent of the Borrowers, shall maintain a copy of each participation and each Participant to
which the Borrowers have so consented, from time to time (the “Participant Register”). The
entries in the Participant Register shall be conclusive in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is recorded
in the Participant Register pursuant to the terms hereof as a Participant hereunder for all
purposes of this Agreement. The Participant Register shall be available for inspection by only the
Borrowers and by any Lender (with respect to its participations only) at any reasonable time
and from time to time upon reasonable prior notice.

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          (f) Certain Pledges. Any Lender may, without the consent of any Borrower or the
Administrative Agent, at any time pledge or assign a security interest in all or any portion of its
rights under this Agreement (including under its Note(s), if any) to secure obligations of such
Lender, including (i) any pledge or assignment to secure obligations to a Federal Reserve Bank and
(ii) any pledge or assignment to any holders of obligations owed, or securities issued, by such
Lender as collateral security for such obligations or securities, or to any trustee for, or any
other representative of, such holders; provided that no such pledge or assignment shall
release such Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

          (g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature”
and words of like import in any Assignment and Assumption shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

     SECTION 10.07. Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the LC Issuer agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to its Affiliates and
to its and its Affiliates’ respective partners, directors, officers, trustees, employees, agents,
advisors and representatives, (b) to the extent requested by any regulatory authority purporting to
have jurisdiction over it (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; provided that the Administrative
Agent or such Lender, unless prohibited by any Law, shall use reasonable efforts to notify the
Borrowers in advance of any disclosure pursuant to this clause (c) but only to the extent
reasonably practicable under the circumstances and on the understanding that neither the
Administrative Agent nor any Lender shall incur any liability for failure to give such notice, (d)
to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Loan Document or any 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 (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any Swap
Agreement with any Borrower or any Subsidiary, (g) with the consent of the Borrowers or (h) to the
extent such Information (x) becomes publicly available other than as a result of a breach of this
Section or (y) becomes available to the Administrative Agent, any Lender, the LC Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than the Borrowers.

     For purposes of this Section, “Information” means all information received from the
Borrowers or any Subsidiary relating to any Borrower or any Subsidiary or any of their respective
businesses, other than any such information that is available to the Administrative Agent, any
Lender or the LC Issuer on a nonconfidential basis prior to disclosure by Holdings or any
Subsidiary. Any Person required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

     Each of the Administrative Agent, the Lenders and the LC Issuer acknowledges that (a) the
Information may include material non-public information concerning a Borrower or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use of material
non-public

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information and (c) it will handle such material non-public information in accordance
with applicable Law, including Federal and state securities Laws.

     Each Borrower consents to the publication by the Administrative Agent or any Lender of
advertising material relating to the financing transactions contemplated by this Agreement using
such Borrower’s name, product photographs, logo or trademark. The Administrative Agent or such
Lender shall provide a draft of any advertising material to the Borrower Representative for review
and comment prior to the publication thereof.

     SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the LC Issuer and each of their respective Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by applicable law, to set off
and apply any and all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever currency) at any time owing
by such Lender, the LC Issuer or any such Affiliate to or for the credit or the account of any
Borrower against any and all of the obligations of such Borrower now or hereafter existing under
this Agreement or any other Loan Document to such Lender or the LC Issuer, irrespective of whether
or not such Lender or the LC Issuer shall have made any demand under this Agreement or any other
Loan Document and although such obligations of such Borrower may be contingent or unmatured or are
owed to a branch or office of such Lender or the LC Issuer different from the branch or office
holding such deposit or obligated on such indebtedness. The rights of each Lender, the LC Issuer
and their respective Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, the LC Issuer or their respective Affiliates
may have. Each Lender and the LC Issuer agrees to notify the Borrowers and the Administrative
Agent promptly after any such setoff and application; provided that the failure to give
such notice shall not affect the validity of such setoff and application.

     SECTION 10.09. Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents
shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the
“Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an
amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the
Loans or, if it exceeds such unpaid principal, refunded to the Borrowers. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

     SECTION 10.10. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or
electronic mail (including, without limitation, by PDF) shall be effective as delivery of a
manually executed counterpart of this Agreement.

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     SECTION 10.11. Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the execution and delivery
hereof and thereof. Such representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by the Administrative
Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default at the time of any credit extension, and
shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

     SECTION 10.12. Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not
be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.
The invalidity of a provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     SECTION 10.13. Replacement of Lenders. If any Lender requests compensation under
Section 3.02, or if the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.05, and such amounts or
compensation do not affect Lenders generally, or if any Lender is a Defaulting Lender or a
non-consenting Lender as provided in Section 10.01, then the Borrowers may, at their sole expense
and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign
and delegate, without recourse (in accordance with and subject to the restrictions contained in,
and consents required by, Section 10.06), all of its interests, rights and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided that:

          (a) the Borrowers shall have paid to the Administrative Agent the assignment fee specified in
Section 10.06(b);

          (b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Loans and, if such Lender is also the LC Issuer, its LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 3.03) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other
amounts);

          (c) in the case of any such assignment resulting from a claim for compensation under Section
3.02 or payments required to be made pursuant to Section 3.05, such assignment will result in a
reduction in such compensation or payments thereafter; and

          (d) such assignment does not conflict with applicable Laws.

     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.

     SECTION 10.14. Governing Law, Jurisdiction, Etc.

86

 

          (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, INCLUDING, BUT NOT LIMITED TO, SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

          (b) SUBMISSION TO JURISDICTION. EACH BORROWER AND EACH OTHER PARTY HERETO IRREVOCABLY
AND UNCONDITIONALLY SUBMIT, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT
OF THE SOUTHERN DISTRICT OF SUCH STATE, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT
SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

          (c) WAIVER OF VENUE. EACH BORROWER AND EACH OTHER PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS
SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

          (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

     SECTION 10.15. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE

87

 

BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

     SECTION 10.16. USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Improvement and
Reauthorization Act, Pub.L.109-177 (signed into Law March 9, 2006) (the “Act”), it is
required to obtain, verify and record information that identifies the Borrowers, which information
includes the name and address of the Borrowers and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrowers in accordance with the Act.

     SECTION 10.17. Judgment Currency. If for the purpose of obtaining judgment in any
court it is necessary to convert an amount due hereunder in the currency in which it is due (the
“Original Currency”) into another currency (the “Second Currency”), the rate of
exchange applied shall be that at which, in accordance with normal banking procedures, the
Administrative Agent could purchase in the New York foreign exchange market, the Original
Currency with the Second Currency on the date two (2) Business Days preceding that on which
judgment is given. Each Borrower agrees that its obligation in respect of any Original Currency
due from it hereunder or under any other Loan Document to which it is party shall, notwithstanding
any judgment or payment in such other currency, be discharged only to the extent that, on the
Business Day following the date the Administrative Agent receives payment of any sum so adjudged to
be due hereunder in the Second Currency, the Administrative Agent may, in accordance with normal
banking procedures, purchase, in the New York foreign exchange market, the Original Currency with
the amount of the Second Currency so paid; and if the amount of the Original Currency so purchased
or that could have been so purchased is less than the amount originally due in the Original
Currency, each Borrower agrees as a separate obligation and notwithstanding any such payment or
judgment to indemnify the Administrative Agent and the Lenders against such loss. The term
“rate of exchange” in this Section 10.17 means the spot rate at which the Administrative
Agent, in accordance with normal practices, is able on the relevant date to purchase the Original
Currency with the Second Currency, and includes any premium and costs of exchange payable in
connection with such purchase.

     SECTION 10.18. No Advisory or Fiduciary Responsibility. In connection with all
aspects of each of the Transactions contemplated hereby, each Borrower acknowledges and agrees, and
acknowledges its Affiliates’ understanding, that: (i) the credit facility provided for hereunder
and any related arranging or other services in connection therewith (including in connection with
any amendment, waiver or other modification hereof or of any other Loan Document) are an
arm’s-length commercial transaction between the Borrowers and its Affiliates, on the one hand, and
the Lead Arranger and the Administrative Agent, on the other hand, and the Borrowers are capable of
evaluating and understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver
or other modification hereof or thereof); (ii) in connection with the process leading to such
transaction, each of the Lead Arranger and the Administrative Agent are and have been acting solely
as a principal and is not the financial advisor, agent or fiduciary, for any Borrower or any of its
Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Lead
Arranger nor the Administrative Agent has assumed and will not assume an advisory, agency or
fiduciary responsibility in favor of any Borrower with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to any amendment, waiver
or other modification hereof or of any other Loan Document (irrespective of whether the Lead
Arranger or the Administrative Agent has advised or is currently advising any Borrower or any of
its Affiliates on other matters) and the Lead Arranger and the Administrative Agent have no
obligation
to any Borrower or any of its Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Lead
Arranger and the

88

 

Administrative Agent and their Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrowers and theirs Affiliates,
and neither the Lead Arranger nor the Administrative Agent has any obligation to disclose any of
such interests by virtue of any advisory, agency or fiduciary relationship; and (v) neither the
Lead Arranger nor the Administrative Agent has provided and will not provide any legal, accounting,
regulatory or tax advice with respect to any of the transactions contemplated hereby (including any
amendment, waiver or other modification hereof or of any other Loan Document) and each of the
Borrowers has consulted its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate. Each of the Borrowers hereby waives and releases, to the fullest extent
permitted by law, any claims that it may have against the Lead Arranger and the Administrative
Agent with respect to any breach or alleged breach of agency or fiduciary duty.

     SECTION 10.19. All Obligations to Constitute Joint and Several Obligations.

          (a) All Obligations of the Borrowers shall be secured by the Administrative Agent’s Lien upon
all of the Collateral, and by all other Liens heretofore, now or at any time hereafter granted by
the Borrowers to the Administrative Agent, for the benefit of the Secured Parties, to the extent
provided in the Loan Documents or Bank Product Documents under which such Lien arises.

          (b) Each of the Borrowers expressly represents and acknowledges that it is part of a common
enterprise with the other Borrowers and that any financial accommodations by the Administrative
Agent and the other Lenders to any other Borrower hereunder and under the other Loan Documents and
the Bank Product Documents are and will be of direct and indirect interest, benefit and advantage
to the Borrowers. Each Borrower hereby agrees that such Borrower is jointly and severally liable
for, and hereby absolutely and unconditionally guarantees to the Administrative Agent and Lenders
and their respective successors and assigns, the full and prompt payment (whether at stated
maturity, by acceleration or otherwise) and performance of, all Obligations owed or hereafter owing
to the Administrative Agent and Lenders by each other Borrower. Each Borrower agrees that its
guaranty obligation hereunder is a continuing guaranty of payment and performance and not of
collection, that its obligations under this Section 10.19 shall not be discharged until payment and
performance, in full, of the Obligations has occurred, and that its obligations under this Section
10.19 shall be absolute, unconditional and irrevocable, irrespective of, and unaffected by, (i) the
genuineness, validity, regularity, enforceability or any future amendment of, or change in, this
Agreement, any other Loan Document, any Bank Product Document or any other agreement, document or
instrument to which any Borrower is or may become a party; (ii) the absence of any action to
enforce this Agreement (including this Section 10.19), any other Loan Document or any Bank Product
Document or the waiver or consent by the Administrative Agent and Lenders with respect to any of
the provisions thereof; (iii) the insolvency of any Borrower or Subsidiary; and (iv) any other
action or circumstances that might otherwise constitute a legal or equitable discharge or defense
of a surety or guarantor. Each Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.

          (c) The Borrowers acknowledge that any Borrowing Request, Conversion/Continuation Notice,
request for issuance of a Letter of Credit or other notice or request given by the Borrower
Representative to the Administrative Agent shall bind the Borrowers, and that any notice given by
the Administrative Agent or any other Lender to the Borrowers shall be effective with respect to
the Borrowers. Each of the Borrowers acknowledges and agrees that the Borrowers shall be liable,
on a joint and several basis, for all of the Loans and other Obligations, regardless of which
Borrower actually may have received the proceeds of any of the Loans or other extensions of credit
or have had Letters of Credit issued hereunder or the amount of such Loans received, Letters of
Credit issued or the manner in which the Administrative Agent or any other Lender accounts among
the Borrowers for such Loans,
Letters of Credit or other extensions of credit on its books and records, and further
acknowledges and agrees that Loans and other extensions of credit to the Borrowers inure to the
mutual benefit of all of the

89

 

Borrowers and that the Administrative Agent and the other Lenders are
relying on the joint and several liability of the Borrowers in extending the Loans and other
financial accommodations hereunder.

          (d) Each Borrower expressly waives all rights it may have now or in the future under any
statute, or at common law, or at law or in equity, or otherwise, to compel the Administrative Agent
or Lenders to marshal assets or to proceed in respect of the Obligations guaranteed hereunder
against any other Borrower, any other party or against any security for the payment and performance
of the Obligations before proceeding against, or as a condition to proceeding against, such
Borrower. Each Borrower consents and agrees that the Administrative Agent or the Lenders may, at
any time and from time to time, without notice or demand, whether before or after any actual or
purported termination, repudiation or revocation of this Agreement by any Borrower, and without
affecting the enforceability or continuing effectiveness hereof as to such Borrower: (i) with the
consent of the other Borrowers, supplement, restate, modify, amend, increase, decrease, extend,
renew or otherwise change the time for payment or the terms of this Agreement or any part thereof,
including any increase or decrease of the rate(s) of interest thereon; (ii) with the consent of the
other Borrowers, supplement, restate, modify, amend, increase, decrease, or enter into or give any
agreement with respect to, this Agreement or any part thereof, or any of the Collateral Documents;
(iii) waive, approve or consent to any action, condition, covenant, default, remedy, right,
representation or term of this Agreement or any other Loan Document; (iv) accept partial payments;
(v) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange,
substitute, transfer or enforce any security or guarantees, and apply any security and direct the
order or manner of sale thereof as the Agents or Lenders in their sole and absolute discretion may
determine; (vi) release any person from any personal liability with respect to this Agreement or
any part thereof; (vii) settle, release on terms satisfactory to the Required Lenders or by
operation of applicable laws or otherwise liquidate or enforce any security or guaranty in any
manner, consent to the transfer of any security and bid and purchase at any sale; or (viii) consent
to the merger, change or any other restructuring or termination of the corporate or partnership
existence of any Borrower or any other person, and correspondingly restructure the obligations
evidenced hereby, and any such merger, change, restructuring or termination shall not affect the
liability of any Borrower or the continuing effectiveness hereof, or the enforceability hereof with
respect to all or any part of the obligations evidenced hereby. It is agreed among each Borrower,
the Administrative Agent and Lenders that the foregoing consents and waivers are of the essence of
the transaction contemplated by this Agreement and the other Loan Documents and that, but for the
provisions of this Section 10.19 and such waivers, the Administrative Agent and Lenders would
decline to enter into this Agreement.

          (e) Notwithstanding anything to the contrary in this Agreement or in any other Loan Document,
and except as set forth in Section 10.19(f), each Borrower hereby expressly and irrevocably waives
any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor. Each Borrower acknowledges and agrees that this waiver is intended to
benefit the Administrative Agent and Lenders and shall not limit or otherwise affect such
Borrower’s liability hereunder or the enforceability of this Section 10.19, and that the
Administrative Agent, Lenders and their respective successors and assigns are intended third party
beneficiaries of the waivers and agreements set forth in this Section 10.19.

          (f) In the event any Borrower (a “Funding Borrower”) shall make any payment or payments under
this Agreement or shall suffer any loss as a result of any realization upon any collateral granted
by it to secure its obligations hereunder, such Funding Borrower shall have the right to seek
contribution payments from each other Borrower (each, a “Contributing Borrower”) to the extent
permitted by any Requirement of Law. Nothing in this Section 10.19 shall affect any Borrower’s
joint
and several liability to the Lenders for the entire amount of its Obligations. Each Borrower
covenants and agrees that its right to receive any contribution hereunder from a Contributing
Borrower shall be

90

 

subordinate and junior in right of payment to all Obligations of the Borrowers to
the Lenders Group . No Borrower will exercise any rights that it may acquire by way of subrogation
hereunder or under any other Loan Document or any Bank Product Document or at law by any payment
made hereunder or otherwise, nor shall any Borrower seek or be entitled to seek any contribution or
reimbursement from any other Borrower in respect of payments made by such Borrower hereunder or
under any other Loan Document or under any Bank Product Document, until all amounts owing to the
Lenders on account of the Obligations are paid in full in cash (or, with respect to Letters of
Credit, are either cash collateralized or supported by a letter of credit) and the Revolving Loan
Commitment and the LC Commitment are terminated. If any amounts shall be paid to any Borrower on
account of such subrogation or contribution rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by such Borrower in trust for the Lenders
segregated from other funds of such Borrower, and shall, forthwith upon receipt by such Borrower,
be turned over to the Administrative Agent in the exact form received by such Borrower (duly
endorsed by such Borrower to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, as provided for herein.

          (g) If the Administrative Agent or any Lender may, under applicable law, proceed to realize
its benefits under any of the Loan Documents, the Administrative Agent or any Lender may, at its
sole option, determine which of its remedies or rights it may pursue without affecting any of its
rights and remedies under this Section 10.19. If, in the exercise of any of its rights and
remedies, the Administrative Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Borrower or any other Person,
whether because of any applicable laws pertaining to “election of remedies” or the like, each
Borrower hereby consents to such action by the Administrative Agent or such Lender and waives any
claim based upon such action, even if such action by the Administrative Agent or such Lender shall
result in a full or partial loss of any rights of subrogation that each Borrower might otherwise
have had but for such action by the Administrative Agent or such Lender. Any election of remedies
that results in the denial or impairment of the right of the Administrative Agent or any Lender to
seek a deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to
pay the full amount of the Obligations.

ARTICLE XI

Amendment and Restatement

     SECTION 11.01. Acknowledgements. The Borrowers acknowledge and agree that,
immediately prior to the Effective Date, (a) the aggregate outstanding principal amount of the
Revolving Loans is $0.00 and (b) the aggregate outstanding face amount of the Existing Letters of
Credit is $4,297,315.36.

     SECTION 11.02. Effect of this Agreement. Upon this Agreement becoming effective
pursuant to Article 4, from and after the Effective Date: (a) all “Revolving Loans” and “Letters
of Credit” outstanding under the Existing Credit Agreement shall continue outstanding hereunder
without offset, defense, counterclaim, abatement, reduction, set off, deduction or charge of any
kind, nature or description whatsoever, and the modification effected by this Agreement shall not
be deemed to provide for or to effect a repayment and re-advance of any of the Indebtedness to the
Lenders now outstanding under the Existing Credit Agreement, it being the intention of the
Borrowers, Administrative Agent and the Lenders that a portion of the Indebtedness owing under this
Agreement be and is the same Indebtedness as that owing under the Existing Credit Agreement
immediately prior to the Effective Date; (b) all terms and conditions of the Existing Credit
Agreement and any other Loan Document (as defined in the Existing Credit Agreement), as amended and
restated by this Agreement and the other Loan Documents executed and delivered on the Effective
Date, shall be and remain in full force and effect, as
so amended and restated, and shall constitute the legal, valid, binding and enforceable
obligations of the Borrowers to the Administrative Agent and Lenders; (c) the terms and conditions
of the Existing Credit

91

 

Agreement shall be amended as set forth herein and, as so amended, shall be
restated in their entirety; (d) this Agreement shall not in any way release or impair the Liens
created pursuant to the Existing Credit Agreement or any other Loan Document (as defined in the
Existing Credit Agreement) or the rights, duties or Obligations relating thereto or affect the
relative priorities thereof, in each case to the extent in force and effect thereunder as of the
Effective Date, except as modified hereby or by documents, instruments and agreements executed and
delivered in connection herewith, and all of such rights, duties, Obligations and Liens are
assumed, ratified and affirmed by the Borrowers; (e) all indemnification obligations of the
Borrowers under the Existing Credit Agreement and any other Loan Document (as defined in the
Existing Credit Agreement) shall survive the execution and delivery of this Agreement and shall
continue in full force and effect for the benefit of the Administrative Agent, Lenders and any
other Person indemnified under the Existing Credit Agreement or any other Loan Document (as defined
in the Existing Credit Agreement) at any time prior to the Effective Date; (f) the Obligations
incurred under the Existing Credit Agreement shall, to the extent outstanding on the Effective
Date, continue outstanding under this Agreement and shall not be deemed to be paid, released,
discharged or otherwise satisfied by the execution of this Agreement, and this Agreement shall not
constitute a refinancing, substitution or novation of such Obligations or any of the other rights,
duties and obligations of the parties hereunder; (g) any and all references in the Loan Documents
to the Existing Credit Agreement shall, without further action of the parties, be deemed a
reference to the Existing Credit Agreement, as amended and restated by this Agreement, and as this
Agreement shall be further amended, amended and restated, supplemented or otherwise modified from
time to time hereafter; and (h) all security interests created under the Existing Credit Agreement
and the other Loan Document (as defined in the Existing Credit Agreement) executed and delivered on
the Effective Date continue to be in full force and effect after giving effect to the consummation
of this Agreement. Furthermore, the parties hereto acknowledge and agree that this Agreement may,
as an administrative matter, delete, amend or otherwise modify certain terms of the Existing Credit
Agreement that are not applicable as of the Effective Date or thereafter; provided,
however, that nothing in this Agreement shall affect, limit or otherwise modify the
validity or enforceability of any such term for so long as such term was effective or applicable in
accordance with the Existing Credit Agreement.

[Signature Page Follows]

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

	 	 	 	 	 	 	 

	 	 	Borrowers:	 	 
	 
	 	 	 	 	 	 
	 	 	SMITH & WESSON HOLDING CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SMITH & WESSON CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	THOMPSON/CENTER ARMS COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	UNIVERSAL SAFETY RESPONSE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	FOX RIDGE OUTFITTERS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 

93

 

	 	 	 	 	 	 	 

	 	 	BEAR LAKE HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	K.W. THOMPSON TOOL COMPANY,
INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	O.L. DEVELOPMENT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	THOMPSON CENTER HOLDING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SMITH & WESSON DISTRIBUTING, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John R. Dineen	 	 
	 

	 	Name:
	 	 

John R. Dineen
	 	 
	 

	 	Title:
	 	Interim Chief Financial Officer	 	 

94

 

	 	 	 	 	 	 	 

	 	 	Administrative Agent:
	 
	 	 	 	 	 	 
	 	 	TD BANK, NA.,
	 	 	as Administrative Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Maria P. Goncalves	 	 
	 

	 	Name:
	 	 

Maria P. Goncalves
	 	 
	 

	 	Title:
	 	Regional Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	LC Issuer
	 
	 	 	 	 	 	 
	 	 	TD BANK, N.A.,
	 	 	as LC Issuer
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Maria P. Goncalves	 	 
	 

	 	Name:
	 	 

Maria P. Goncalves
	 	 
	 

	 	Title:
	 	Regional Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Lenders
	 
	 	 	 	 	 	 
	 	 	TD BANK, N.A.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Maria P. Goncalves	 	 
	 

	 	Name:
	 	 

Maria P. Goncalves
	 	 
	 

	 	Title:
	 	Regional Vice President	 	 

95

 

	 	 	 	 	 	 	 

	 	 	SOVEREIGN BANK
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Edward S. Borden	 	 
	 

	 	Name:
	 	 

Edward S. Borden
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

96

 

	 	 	 	 	 	 	 

	 	 	BERKSHIRE BANK
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael T. Mancuso	 	 
	 

	 	Name:
	 	 

Michael T. Mancuso
	 	 
	 

	 	Title:
	 	Vice President	 	 

97

 

	 	 	 	 	 	 	 

	 	 	CHICOPEE SAVINGS BANK
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kathi L. Donahue	 	 
	 

	 	Name:
	 	 

Kathi L. Donahue
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

98

 

	 	 	 	 	 	 	 

	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Enrique Landaeta	 	 
	 

	 	Name:
	 	 

Enrique Landaeta
	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Marguerite Sutton	 	 
	 

	 	Name:
	 	 

Marguerite Sutton
	 	 
	 

	 	Title:
	 	Director	 	 

99

 

EXHIBIT A

ASSIGNMENT AND ASSUMPTION AGREEMENT

     This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert Name of Assignor] (the
“Assignor”) and [Insert Name of Assignee] (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings given to them in the Credit Agreement identified
below, receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including without limitation any letters
of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent
permitted to be assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown,
arising under or in connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the
“Assigned Interest”). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment and Assumption, without representation or warranty
by the Assignor.

	 	 	 

	1. Assignor:

	 	[_________________]
	 
	 	 
	2. Assignee:

	 	[_________________]
	 

	 	[and is an Affiliate/Approved Fund of [identify Lender]1]
	 
	 	 
	3. Borrowers:

	 	Smith & Wesson Holding Corporation, Smith & Wesson Corp., Thompson/Center Arms Company, Inc., Thompson
Center Holding Corporation, Universal Safety Response, Inc., Fox Ridge Outfitters, Inc., K.W. Thompson Tool
Company, Inc., O.L. Development, Inc., Bear Lake Holdings, Inc. and Smith & Wesson Distributing, Inc.
(collectively, the “Borrowers”)
	 
	 	 
	4. Administrative Agent:

	 	TD Bank, N.A.

 

			
	1	 	Select as applicable.

 

 

	 	 	 

	5. Credit Agreement:

	 	Amended and Restated Credit Agreement, dated as of December 7, 2010 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, the Lenders from
time to time party thereto (the “Lenders”), and TD Bank, N.A., as Administrative Agent (in such capacity,
the “Administrative Agent”)
	 
	 	 
	6. Assigned Interest:
	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Aggregate Amount of Revolving	 	 	 	 	Amount of Revolving	 	 	Percentage Assigned of	 	 	 	 
	Commitment/Loans for all Lenders	 	 	 	 	Commitment/Loans Assigned	 	 	Commitment/Loans2	 	 	CUSIP Number	 
	$		 	 	 
	 	$	 	 	 	 	 	%	 	 	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	$	 	 	 	 
	 	$	 	 	 	 	 	%	 	 	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	$	 	 	 	 
	 	$	 	 	 	 	 	%	 	 	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 	 

	 	 	 

	[7. Trade Date:

	 	]3

Effective Date: ______________, 20___ [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

	 	 	 	 	 

	 	 	ASSIGNOR
	 
	 	 	 	 
	 	 	[NAME OF ASSIGNOR]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ASSIGNEE
	 
	 	 	 	 
	 	 	[NAME OF ASSIGNEE]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

 

			
	2	 	Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.
	 
	3	 	To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of
the Trade Date.

 

 

	 	 	 	 	 

	[Consented to and]4 Accepted:	 	 
	 
	 	 	 	 
	TD BANK, N.A.,	 	 
	as Administrative Agent	 	 
	 
	 	 	 	 
	By:

	 	 
 

	 	 
	Name:
	 	 	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	[Consented to:]5	 	 
	 
	 	 	 	 
	[BORROWERS]	 	 
	 
	 	 	 	 
	By:

	 	 
 

	 	 
	Name:
	 	 	 	 
	Title:
	 	 	 	 

 

			
	4	 	To be added only if the consent of the
Administrative Agent is required by the terms of the Credit Agreement.
	 
	5	 	To be added only if the consent of the
Borrowers is required by the terms of the Credit Agreement.

 

 

ANNEX 1

TO ASSIGNMENT AND

ASSUMPTION AGREEMENT

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

     1. Representations and Warranties.

          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of any of the Borrowers, any of their Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance by any of the
Borrowers, any of their Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

          1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an assignee under the Credit Agreement (subject
to receipt of such consents as may be required under the Credit Agreement), (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without reliance on the
Lead Arranger, Administrative Agent (and any sub-agent thereof) or any other Lender, and (v) if it
is not incorporated under the laws of the United States or a State thereof, attached to the
Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms
of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it
will, independently and without reliance on the Lead Arranger, Administrative Agent (and any
sub-agent thereof), the Assignor or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to be performed by it
as a Lender.

     2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignee whether such amounts have accrued prior to, on or after the
Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments
by the Administrative Agent for periods prior to the Effective Date or with respect to the making
of this assignment directly between themselves.

     3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and

 

 

Assumption may be executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in
accordance with, the law of the State of New York applicable to contracts made and performed in
said state.

 

 

EXHIBIT B

FORM OF BORROWING REQUEST

[Date]

TD Bank, N.A.

1441 Main Street

Springfield, Massachusetts 01103

Attention: Maria P. Goncalves, Regional Vice President

Ladies and Gentlemen:

     The undersigned, as Borrower Representative, refers to that certain Amended and Restated
Credit Agreement dated as of December 7, 2010 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”, the terms defined therein being used
herein as therein defined), by and among Smith & Wesson Holding Corporation, Smith & Wesson Corp.,
Thompson/Center Arms Company, Inc., Thompson Center Holding Corporation, Universal Safety Response,
Inc., Fox Ridge Outfitters, Inc., K.W. Thompson Tool Company, Inc., O.L. Development, Inc., Bear
Lake Holdings, Inc. and Smith & Wesson Distributing, Inc., as borrowers, the Lenders from time to
time party thereto, and TD Bank, N.A., as Administrative Agent, and, pursuant to Section 2.05 of
the Credit Agreement, hereby gives irrevocable notice that the undersigned, as Borrower
Representative, hereby requests a Revolving Borrowing under the Credit Agreement, and to that end
sets forth below the information relating to such Borrowing (the “Proposed Borrowing”) as
required under Section 2.05 of the Credit Agreement:

	 	(i)	 	The Business Day of the Proposed Borrowing is __________________1
(the “Borrowing Date”).
	 
	 	(ii)	 	The aggregate principal amount of the Proposed Borrowing is
$__________________.
	 
	 	(iii)	 	The Loans comprising the Proposed Borrowing shall be initially maintained as
[Base Rate Loans] [LIBOR Loans].
	 
	 	[(iv)	 	 The initial Interest Period for each Loan made as part of the Proposed
Borrowing shall be [one/two/three or six months]]2
	 
	 	(v)	 	The Applicable Margin for the Loans made in the Proposed Borrowing will be
_____________.

     The undersigned hereby certifies that the following statements are true on and as of the date
hereof and will be true on and as of the Borrowing Date:

     (A) Each of the representations and warranties contained in Article V of the Credit Agreement
and in the other Loan Documents is and will be true and correct in all material respects before and
after giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as
though made on each such date (except to the extent any such representation or warranty relates
solely to a prior date);

 

			
	1	 	Shall be a Business Day at least (i) three (3)
Business Days after the date hereof for the borrowing of a LIBOR Loan, and (ii)
one (1) Business Day after the dated hereof for the borrowing of a Base Rate
Loan.
	 
	2	 	To be included for a Proposed Borrowing
comprised of LIBOR Loans.

 

 

     (B) No Default or Event of Default has occurred and is continuing or would result from the
Proposed Borrowing or from the application of the proceeds therefrom; and

     (C) After giving effect to the Proposed Borrowing, Revolving Availability will not be less
than zero.

	 	 	 	 	 

	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	SMITH & WESSON HOLDING CORPORATION,
	 	 	as Borrower Representative
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

 

 

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

     This Compliance Certificate is furnished pursuant to that certain Amended and Restated Credit
Agreement dated as of December 7, 2010, (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”) among Smith & Wesson Holding Corporation
(“Holdings”), Smith & Wesson Corp., Thompson/Center Arms Company, Inc., Thompson Center
Holding Corporation, Universal Safety Response, Inc., Fox Ridge Outfitters, Inc., K.W. Thompson
Tool Company, Inc., O.L. Development, Inc., Bear Lake Holdings, Inc. and Smith & Wesson
Distributing, Inc. (collectively, the “Borrowers”), the Lenders from time to time party
thereto and TD Bank, N.A., as Administrative Agent. Unless otherwise defined herein, capitalized
terms used in this Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.

     THE UNDERSIGNED HEREBY CERTIFIES, ON ITS BEHALF AND ON BEHALF OF THE BORROWERS, THAT:

     1. I am the duly elected _______________of the Borrower Representative;

     2. [The representations and warranties contained in Article V of the Credit Agreement and in
the other Loan Documents are true and correct on and as of the date hereof with the same effect as
if made on the date hereof, except for representations and warranties expressly stated to relate to
a specific earlier date, in which case such representations and warranties were true and correct in
all material respects as of such earlier date.]1

     3. [No Default or Event of Default has occurred and is continuing or could result from giving
effect to the transactions contemplated by the Credit Agreement and the other Loan Documents.]2

     4. I have reviewed the terms of the Credit Agreement and I have made, or have caused to be
made under my supervision, a review of the transactions and conditions of Holdings and its
consolidated Subsidiaries during the accounting period covered by the attached financial statements
[for quarterly financial statements add: and such financial statements present fairly in all
material respects the financial position and results of operations of Holdings and its Subsidiaries
on a consolidated and consolidating basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes];

     5. The examinations described in paragraph 2 did not disclose[, except as set forth
below],3 and I have no knowledge of (i) the existence of any condition or event which
constitutes a Default during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate or (ii) any change in GAAP or in the
application thereof that has occurred since the date of the audited financial statements referred
to in Section 6.01 of the Credit Agreement;

     6. Schedule I attached hereto sets forth reasonably detailed calculations
demonstrating the Borrowers’ compliance with the covenants in Section 7.12 of the Credit Agreement;
and

     [Describe the exceptions, if any, to paragraph 3 by listing, in detail, the (i) nature of the
condition or event, the period during which it has existed and the action which the Borrowers have
taken, are

 

			
	1	 	To be included in the Compliance Certificate
delivered at closing.
	 
	2	 	To be included in the Compliance Certificate
delivered at closing.
	 
	3	 	Include only if including bracketed paragraph
below.

 

 

taking, or propose to take with respect to each such condition or event or (ii) the change in
GAAP or the application thereof and the effect of such change on the attached financial statements:

[                                        
                    
                    
                    
                    
                    
                    
                    ]]

 

 

     The Borrower Representative hereby certifies that the above information, together with the
computations set forth in Schedule I hereto, are true and accurate. The Borrower Representative
recognizes that the Administrative Agent and the Lenders are relying on this certificate and making
credit decisions based upon the same which it might otherwise not do but for the accuracy of this
certificate.

	 	 	 	 	 

	 	 	SMITH & WESSON HOLDING CORPORATION,
	 	 	as Borrower Representative
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

 

 

SCHEDULE I

Compliance as of                     _____, 20____,

with the provisions of Section 7.12 of the Credit Agreement

Loans Outstanding

	 	 	 

	Revolving Loan(s) (including L/C Disbursements):

	 	$                    
	Swingline Loan(s):

	 	$                    
	Total Loans outstanding:

	 	$                    

I. Minimum Consolidated Fixed Charge Coverage Ratio:

	 	 	 

	The actual Fixed Charge Coverage Ratio for such period is:

	 	___ to 1.00
	The minimum Fixed Charge Coverage Ratio required for such period is:

	 	1.50 to 1.00
	In Compliance:

	 	[Yes][No]

The Fixed Charge Coverage Ratio has been calculated as follows:

	 	 	 	 	 	 	 

	A.
	 	Consolidated Net Income	 	$                    
	 
	 	 	 	 	 	 
	B.

	 	Plus:
	 	Consolidated Interest Expense
	 	$                    
	 
	 	 	 	 	 	 
	C.

	 	Plus:
	 	Income Tax Expense (with a deduction in
case of income tax benefit)
	 	$                    
	 
	 	 	 	 	 	 
	D.

	 	Plus:
	 	Depreciation and Amortization Expense
	 	$                    
	 
	 	 	 	 	 	 
	E.

	 	Plus:
	 	Extraordinary Charges
	 	$                    
	 
	 	 	 	 	 	 
	F.

	 	Plus:
	 	Non-Cash Charges for such period related to Stock Options
and Restricted Stock Grants
	 	$                    
	 
	 	 	 	 	 	 
	G.

	 	Plus:
	 	Other Nonrecurring Non-Cash Charges

(but excluding any non-cash charge included in Consolidated Net Income in a prior period)
	 	

$                    
	 
	 	 	 	 	 	 
	H.

	 	Less:
	 	Extraordinary Gains and Non-Cash Income
	 	$(                    )
	 
	 	 	 	 	 	 
	I.
	 	Consolidated EBITDA	 	$                    
	 
	 	 	 	 	 	 
	J.

	 	Plus:
	 	Consolidated Rental Expense
	 	$                    
	 
	 	 	 	 	 	 
	K.

	 	Less:
	 	Unfinanced Capital Expenditures
	 	$(                    )
	 
	 	 	 	 	 	 
	L.

	 	Less:
	 	Cash Taxes Paid
	 	$(                    )
	 
	 	 	 	 	 	 
	M.

	 	Less:
	 	Dividends and Distributions Paid in Cash
	 	$(                    )
	 
	 	 	 	 	 	 
	N.
	 	Consolidated Net Cash Available for Debt Service	 	$                    
	 
	 	 	 	 	 	 
	O.
	 	Cash Consolidated Interest Expense	 	$                    
	 
	 	 	 	 	 	 
	P.

	 	Plus:
	 	Consolidated Rental Expense Paid
	 	$                    

 

	 	 	 	 	 	 	 

	Q.

	 	Plus:
	 	Scheduled Principal Repayments on Indebtedness made
	 	$                    
	 
	 	 	 	 	 	 
	R.

	 	Plus:
	 	Capital Lease Obligation Payments Made
	 	$                    
	 
	 	 	 	 	 	 
	S.
	 	Consolidated Fixed Charges	 	$                    
	 
	 	 	 	 	 	 
	U.
	 	Consolidated Fixed Charge Coverage Ratio (N divided by S)	 	                    x
	 
	 	 	 	 	 	 
	II.	 	Maximum Consolidated Leverage Ratio:	 	 

	 	 	 

	The actual Consolidated Leverage Ratio for such period is:

	 	___ to 1.00
	The Maximum Consolidated Leverage Ratio allowed for such period is:

	 	3.25 to 1.00
	In Compliance:

	 	[Yes][No]

The Consolidated Leverage Ratio has been calculated as follows:

	 	 	 	 	 	 	 

	A.
	 	Total Loans outstanding (from above)	 	$                    
	 
	 	 	 	 	 	 
	B.

	 	Plus:
	 	Other Outstanding Indebtedness of the Companies:
	 	$                    
	 
	 	 	 	 	 	 
	C.

	 	i.
	 	Amount due on Guaranties                     
                    $                    	 	 
	 

	 	ii.
	 	Maximum Principal Amount of

Indebtedness Guaranteed                        
                    $                    	 	 
	 

	 	iii.
	 	Greater of (i) or (ii)
	 	$                    
	 

	 	iv.
	 	Off-Balance Sheet Liabilities
	 	$                    
	 

	 	v.
	 	Contingent Liabilities (Sum of iii and iv)
	 	$                    
	 
	 	 	 	 	 	 
	D.
	 	Total Funded Debt (A plus B plus C(v))	 	$                    
	 
	 	 	 	 	 	 
	E.
	 	Consolidated EBITDA (from above)	 	$                    
	 
	 	 	 	 	 	 
	F.
	 	Consolidated Leverage Ratio (D divided by E)	 	                    x

 

EXHIBIT D

FORM OF CONVERSION/CONTINUATION NOTICE

[Date]

TD Bank, N.A.

1441 Main Street

Springfield, Massachusetts 01103

Attention: Maria P. Goncalves, Regional Vice President

Ladies and Gentlemen:

     The undersigned, as Borrower Representative, refers to that certain Amended and Restated
Credit Agreement dated as of December 7, 2010 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”, the terms defined therein being used
herein as therein defined), by and among Smith & Wesson Holding Corporation, Smith & Wesson Corp.,
Thompson/Center Arms Company, Inc., Thompson Center Holding Corporation, Universal Safety Response,
Inc., Fox Ridge Outfitters, Inc., K.W. Thompson Tool Company, Inc., O.L. Development, Inc., Bear
Lake Holdings, Inc. and Smith & Wesson Distributing, Inc., as borrowers, the Lenders party from
time to time party thereto, and TD Bank, N.A., as Administrative Agent, and, pursuant to Section
2.07 of the Credit Agreement, hereby gives irrevocable notice that the undersigned, as Borrower
Representative, hereby requests a [conversion] [continuation] of Loans under the Credit Agreement,
and to that end sets forth below the information relating to such [conversion] [continuation] (the
“Proposed [Conversion] [Continuation]”) as required under Section 2.07 of the Credit
Agreement:

	 	(i)	 	The Business Day of the Proposed [Conversion] [Continuation] is
______________.1
	 
	 	(ii)	 	The Proposed [Conversion] [Continuation] involves $____________ in the
aggregate principal amount of Revolving Loans [made pursuant to a Borrowing on
___________________.]
	 
	 	(iii)	 	The Loans referred to in clause (ii) above are presently maintained as [LIBOR]
[Base Rate] Loans and are proposed hereby to be [converted into LIBOR/Base Rate Loans]
[continued as LIBOR].
	 
	 	[(iv) 	 	The initial Interest Period for each Loan being [converted into] [continued
as] a LIBOR Loan as part of the Proposed [Conversion] [Continuation] shall be
[one/two/three or six months]]2
	 
	 	[(v)]	 	 The Applicable Margin for the Loans resulting from the Proposed [Conversion]
[Continuation] will be ____________________.

 

			
	1	 	Shall be a Business Day at least (i) three (3)
Business Days after the date hereof for the conversion to or continuation of
LIBOR Loans, and (ii), three (3) Business Days after the dated hereof for the
conversion of LIBOR Loans to Base Rate Loans, and additionally, in the case of
any conversion of LIBOR Loans into Base Rate Loans, or continuation of LIBOR
Loans, shall be the last day of the Interest Period applicable thereto.
	 
	2	 	To be included in the case of any conversion
of Base Rate Loans into, or continuation of, LIBOR Loans.

 

 

     The undersigned, as Borrower Representative, hereby certifies that the following statement is
true on and as of the date hereof and will be true on and as of the effective date of the Proposed
[Conversion] [Continuation]: No Default of Event of Default has occurred and is continuing or
would result from the Proposed [Conversion] [Continuation].

	 	 	 	 	 	 	 

	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	SMITH & WESSON HOLDING CORPORATION,	 	 
	 	 	as Borrower Representative	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

 

 

EXHIBIT E-1

REVOLVING LINE OF CREDIT NOTE

			
	 	 	 
	$_______________
	 	___________ ____, 20__

     FOR VALUE RECEIVED, the undersigned, SMITH & WESSON HOLDING CORPORATION, a Nevada corporation,
SMITH & WESSON CORP., a Delaware corporation, THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire
corporation, THOMPSON CENTER HOLDING CORPORATION, a Delaware corporation, UNIVERSAL SAFETY
RESPONSE, INC., a Delaware corporation, FOX RIDGE OUTFITTERS, INC., a New Hampshire corporation,
K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire corporation, O.L. DEVELOPMENT, INC., a New
Hampshire corporation, BEAR LAKE HOLDINGS, INC., a Delaware corporation and SMITH & WESSON
DISTRIBUTING, INC., a Delaware corporation (collectively, the “Borrowers”), promise to pay
to the order of _____________________________ (the “Lender”), at the place and times
provided in the Credit Agreement referred to below the principal sum of

___________________ DOLLARS AND ____ CENTS ($_____________)

or, if less, the principal amount of, and interest accrued on, all Revolving Loans made by the
Lender from time to time pursuant to that certain Amended and Restated Credit Agreement dated
December 7, 2010 (as amended, restated or modified from time to time, the “Credit
Agreement”) by and among the Borrowers, TD Bank, N.A., in its capacity as Administrative Agent
(in said capacity, together with its successors and assigns, the “Administrative Agent”)
and the Lenders party thereto from time to time (including, without limitation, the Lender).
Capitalized terms used herein and not defined herein shall have the meanings ascribed to them in
the Credit Agreement.

     The unpaid principal amount of this Revolving Line of Credit Note from time to time
outstanding is subject to mandatory prepayment from time to time as provided in the Credit
Agreement and shall bear interest as provided in the Credit Agreement. All payments of principal
and interest on this Revolving Line of Credit Note shall be payable in lawful currency of the
United States of America in immediately available funds to the Administrative Agent.

     This Revolving Line of Credit Note is entitled to the benefits of, and evidences obligations
incurred under, the Credit Agreement, to which reference is made for a description of the
Collateral for this Revolving Line of Credit Note and for a statement of the terms and conditions
on which the Borrowers are permitted and required to make prepayments and repayments of principal
of the obligations evidenced hereby and on which such obligations may be declared to be immediately
due and payable.

     THIS REVOLVING LINE OF CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     Each and every party liable hereunder or for the indebtedness evidenced hereby whether as
maker, endorser, guarantor, surety or otherwise hereby: (a) except as may be expressly provided in
the Credit Agreement or the other Loan Documents, waives notice (including, without limitation,
notice of intention to accelerate maturity, notice of acceleration of maturity, and notice of
non-payment), presentment, demand, protest, suretyship defenses and defenses in the nature thereof
such as bringing of suit, and diligence in taking any action to collect amounts owing hereunder or
in any proceeding against any of the rights and properties securing payment hereof; (b) waives any
defenses based upon and specifically assents to any and all extensions and postponements of the
time for payment, changes in

 

 

terms and conditions and all other indulgences and forbearances which may be granted by the
holder to any party now or hereafter liable hereunder or for the indebtedness evidenced hereby; (c)
agrees to any substitution, exchange, release, surrender or other delivery of any Collateral now or
hereafter held hereunder or in connection with the Credit Agreement or any of the other Loan
Documents, and to the addition or release of any other party or person primarily or secondarily
liable; (d) agrees that if any Collateral given to secure this Revolving Line of Credit Note or the
indebtedness evidenced hereby or to secure any of the obligations set forth or referred to in the
Credit Agreement or any of the other Loan Documents shall be found to be unenforceable in full or
to any extent, or if the Administrative Agent, the Lender, any other Secured Party or any other
party shall fail to duly perfect or protect such Collateral, the same shall not relieve or release
any party liable hereon or thereon nor vitiate any other security or collateral given for any
obligations evidenced hereby or thereby; (e) agrees to pay all reasonable costs and expenses
incurred by the Administrative Agent, the Lender or any other Secured Party in connection with the
indebtedness evidenced hereby, including, without limitation, all reasonable attorneys’ fees and
costs, for the making and collection of the indebtedness evidenced hereby and the enforcement of
rights and remedies hereunder and under the Credit Agreement and the other Loan Documents, whether
or not suit is instituted; and (f) consents to all of the terms and conditions contained in this
Revolving Line of Credit Note, the Credit Agreement and the other Loan Documents.

     The liability of the Borrowers under this Revolving Line of Credit Note shall be joint and
several.

(Remainder of page intentionally left blank)

 

 

     IN WITNESS WHEREOF, the Borrowers have executed this Revolving Line of Credit Note under seal
as of the day and year first above written.

	 	 	 	 	 	 	 

	 	 	SMITH & WESSON HOLDING CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SMITH & WESSON CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THOMPSON/CENTER ARMS COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	UNIVERSAL SAFETY RESPONSE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	FOX RIDGE OUTFITTERS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	BEAR LAKE HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

 

 

	 	 	 	 	 	 	 

	 	 	K.W. THOMPSON TOOL COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	O.L. DEVELOPMENT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THOMPSON CENTER HOLDING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SMITH & WESSON DISTRIBUTING, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

 

 

EXHIBIT E-2

SWINGLINE NOTE

			
	 	 	 
	$5,000,000
	 	December 7, 2010

     FOR VALUE RECEIVED, the undersigned, SMITH & WESSON HOLDING CORPORATION, a Nevada corporation,
SMITH & WESSON CORP., a Delaware corporation, THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire
corporation, THOMPSON CENTER HOLDING CORPORATION, a Delaware corporation, UNIVERSAL SAFETY
RESPONSE, INC., a Delaware corporation, FOX RIDGE OUTFITTERS, INC., a New Hampshire corporation,
K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire corporation, O.L. DEVELOPMENT, INC., a New
Hampshire corporation, BEAR LAKE HOLDINGS, INC., a Delaware corporation and SMITH & WESSON
DISTRIBUTING, INC., a Delaware corporation (collectively, the “Borrowers”), promise to pay
to the order of TD BANK, N.A. (the “Swingline Lender”), at the place and times provided in
the Credit Agreement referred to below the principal sum of

FIVE MILLION DOLLARS AND 00 CENTS ($5,000,000)

or, if less, the principal amount of, and interest accrued on, all Swingline Loans made by the
Swingline Lender from time to time pursuant to that certain Amended and Restated Credit Agreement
dated December 7, 2010 (as amended, restated or modified from time to time, the “Credit
Agreement”) by and among the Borrowers, TD Bank, N.A., in its capacity as Administrative Agent
(in said capacity, together with its successors and assigns, the “Administrative Agent”)
and the Lenders party thereto from time to time (including, without limitation, the Swingline
Lender). Capitalized terms used herein and not defined herein shall have the meanings ascribed to
them in the Credit Agreement.

     The unpaid principal amount of this Swingline Note from time to time outstanding is subject to
mandatory prepayment from time to time as provided in the Credit Agreement and shall bear interest
as provided in the Credit Agreement. All payments of principal and interest on this Swingline Note
shall be payable in lawful currency of the United States of America in immediately available funds
to the Administrative Agent.

     This Swingline Note is entitled to the benefits of, and evidences obligations incurred under,
the Credit Agreement, to which reference is made for a description of the Collateral for this
Swingline Note and for a statement of the terms and conditions on which the Borrowers are permitted
and required to make prepayments and repayments of principal of the obligations evidenced hereby
and on which such obligations may be declared to be immediately due and payable.

     THIS SWINGLINE NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     Each and every party liable hereunder or for the indebtedness evidenced hereby whether as
maker, endorser, guarantor, surety or otherwise hereby: (a) except as may be expressly provided in
the Credit Agreement or the other Loan Documents, waives notice (including, without limitation,
notice of intention to accelerate maturity, notice of acceleration of maturity, and notice of
non-payment), presentment, demand, protest, suretyship defenses and defenses in the nature thereof
such as bringing of suit, and diligence in taking any action to collect amounts owing hereunder or
in any proceeding against any of the rights and properties securing payment hereof; (b) waives any
defenses based upon and specifically assents to any and all extensions and postponements of the
time for payment, changes in

 

 

terms and conditions and all other indulgences and forbearances which may be granted by the
holder to any party now or hereafter liable hereunder or for the indebtedness evidenced hereby; (c)
agrees to any substitution, exchange, release, surrender or other delivery of any Collateral now or
hereafter held hereunder or in connection with the Credit Agreement or any of the other Loan
Documents, and to the addition or release of any other party or person primarily or secondarily
liable; (d) agrees that if any Collateral given to secure this Swingline Note or the indebtedness
evidenced hereby or to secure any of the obligations set forth or referred to in the Credit
Agreement or any of the other Loan Documents shall be found to be unenforceable in full or to any
extent, or if the Administrative Agent, the Swingline Lender, any other Secured Party or any other
party shall fail to duly perfect or protect such Collateral, the same shall not relieve or release
any party liable hereon or thereon nor vitiate any other security or collateral given for any
obligations evidenced hereby or thereby; (e) agrees to pay all reasonable costs and expenses
incurred by the Administrative Agent, the Swingline Lender or any other Secured Party in connection
with the indebtedness evidenced hereby, including, without limitation, all reasonable attorneys’
fees and costs, for the making and collection of the indebtedness evidenced hereby and the
enforcement of rights and remedies hereunder and under the Credit Agreement and the other Loan
Documents, whether or not suit is instituted; and (f) consents to all of the terms and conditions
contained in this Swingline Note, the Credit Agreement and the other Loan Documents.

     The liability of the Borrowers under this Swingline Note shall be joint and several.

(Remainder of page intentionally left blank)

 

 

     IN WITNESS WHEREOF, the Borrowers have executed this Swingline Note under seal as of the day
and year first above written.

	 	 	 	 	 	 	 

	 	 	SMITH & WESSON HOLDING CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SMITH & WESSON CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THOMPSON/CENTER ARMS COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	UNIVERSAL SAFETY RESPONSE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	FOX RIDGE OUTFITTERS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	BEAR LAKE HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

 

 

	 	 	 	 	 	 	 

	 	 	K.W. THOMPSON TOOL COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	O.L. DEVELOPMENT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THOMPSON CENTER HOLDING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SMITH & WESSON DISTRIBUTING, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

 

 

EXHIBIT F

JOINDER AGREEMENT

     THIS JOINDER AGREEMENT (this “Agreement”), dated as of __________, ____, 20__, is entered into
between __________________, a _________________ (the “New Subsidiary”) and TD Bank, N.A.
(the “Administrative Agent”) under that certain Amended and Restated Credit Agreement,
dated as of December 7, 2010 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among Smith & Wesson Holding Corporation, Smith & Wesson
Corp., Thompson/Center Arms Company, Inc., Thompson Center Holding Corporation, Universal Safety
Response, Inc., Fox Ridge Outfitters, Inc., K.W. Thompson Tool Company, Inc., O.L. Development,
Inc., Bear Lake Holdings, Inc, and Smith & Wesson Distributing, Inc., as borrowers, the Lenders
from time to time party thereto and the Administrative Agent. All capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Credit Agreement.

     The New Subsidiary and the Administrative Agent, hereby agree as follows:

     1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this
Agreement, the New Subsidiary will be deemed to be a Borrower under the Credit Agreement for all
purposes of the Credit Agreement and shall have all of the obligations of a Borrower thereunder as
if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the
Credit Agreement, including without limitation (a) all of the representations and warranties of the
Loan Parties set forth in Article V of the Credit Agreement, and (b) all of the covenants set forth
in Articles VI and VII of the Credit Agreement and strictly in accordance with the terms thereof.
The New Subsidiary has delivered to the Administrative Agent an executed Joinder Agreement to the
Pledge and Security Agreement.

     2. If required by the Administrative Agent, the New Subsidiary is, simultaneously with the
execution of this Agreement, executing and delivering such Collateral Documents (and such other
documents and instruments) as requested by the Administrative Agent in accordance with the Credit
Agreement.

     3. The address of the New Subsidiary for purposes of Section 10.02 of the Credit Agreement is
as follows:

                                                                 

                                                                 

                                                                 

     4. This Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be an original, but all of which shall constitute one and the same
instrument.

     6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

 

     IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its
authorized officer, and the Administrative Agent, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.

	 	 	 	 	 	 	 

	 	 	[NEW SUBSIDIARY]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

Acknowledged and accepted:

TD BANK, N.A.,

as Administrative Agent

	 	 	 	 	 

	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:exv10w79

Exhibit 10.79

 

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

By

SMITH & WESSON HOLDING CORPORATION,

SMITH & WESSON CORP.,

THOMPSON/CENTER ARMS COMPANY, INC.,

UNIVERSAL SAFETY RESPONSE, INC.,

FOX RIDGE OUTFITTERS, INC.,

BEAR LAKE HOLDINGS, INC.

K.W. THOMPSON TOOL COMPANY, INC.,

O.L. DEVELOPMENT, INC.,

THOMPSON CENTER HOLDING CORPORATION,

and SMITH & WESSON DISTRIBUTING, INC.

as Pledgors

and

TD BANK, N.A.,

as Administrative Agent

Dated as of December 7, 2010

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	PREAMBLE

	 	 	 	 	1	 
	RECITALS

	 	 	 	 	1	 
	AGREEMENT

	 	 	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE I	 	 	 	 
	 
	 	 	 	 	 	 
	DEFINITIONS AND INTERPRETATION	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 1.1.

	 	Definitions
	 	 	2	 
	SECTION 1.2.

	 	Interpretation
	 	 	7	 
	SECTION 1.3.

	 	Resolution of Drafting Ambiguities
	 	 	7	 
	SECTION 1.4.

	 	Perfection Certificate
	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE II	 	 	 	 
	 
	 	 	 	 	 	 
	GRANT OF SECURITY AND OBLIGATIONS	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 2.1.

	 	Grant of Security Interest
	 	 	8	 
	SECTION 2.2.

	 	Filings
	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE III	 	 	 	 
	 
	 	 	 	 	 	 
	PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 3.1.

	 	Delivery of Certificated Securities Collateral
	 	 	9	 
	SECTION 3.2.

	 	Perfection of Uncertificated Securities Collateral
	 	 	10	 
	SECTION 3.3.

	 	Financing Statements and Other Filings; Maintenance of
Perfected Security Interest
	 	 	10	 
	SECTION 3.4.

	 	Other Actions
	 	 	10	 
	SECTION 3.5.

	 	Joinder of Additional Pledgors
	 	 	14	 
	SECTION 3.6.

	 	Supplements; Further Assurances
	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE IV	 	 	 	 
	 
	 	 	 	 	 	 
	REPRESENTATIONS, WARRANTIES AND COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 4.1.

	 	Title
	 	 	15	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 4.2.

	 	Validity of Security Interest
	 	 	15	 
	SECTION 4.3.

	 	Defense of Claims; Transferability of Pledged Collateral
	 	 	15	 
	SECTION 4.4.

	 	Other Financing Statements
	 	 	15	 
	SECTION 4.5.

	 	Chief Executive Office; Change of Name; Jurisdiction of Organization	 	 	16	 
	SECTION 4.6.

	 	Location of Inventory and Equipment
	 	 	16	 
	SECTION 4.7.

	 	Due Authorization and Issuance
	 	 	16	 
	SECTION 4.8.

	 	Consents, etc.
	 	 	17	 
	SECTION 4.9.

	 	Pledged Collateral
	 	 	17	 
	SECTION 4.10.

	 	Insurance
	 	 	17	 
	 
	 	 	 	 	 	 
	ARTICLE V	 	 	 	 
	 
	 	 	 	 	 	 
	CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 5.1.

	 	Pledge of Additional Securities Collateral
	 	 	17	 
	SECTION 5.2.

	 	Voting Rights; Distributions; etc.
	 	 	17	 
	SECTION 5.3.

	 	Defaults, etc.
	 	 	18	 
	SECTION 5.4.

	 	Certain Agreements of Pledgors As Issuers and Holders of Equity Interests
	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE VI	 	 	 	 
	 
	 	 	 	 	 	 
	 [INTENTIONALLY OMITTED]	 	 	 	 
	 
	 	 	 	 	 	 
	 ARTICLE VII	 	 	 	 
	 
	 	 	 	 	 	 
	CERTAIN PROVISIONS CONCERNING RECEIVABLES	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 7.1.

	 	Maintenance of Records
	 	 	19	 
	SECTION 7.2.

	 	Legend
	 	 	20	 
	SECTION 7.3.

	 	Modification of Terms, etc.
	 	 	20	 
	SECTION 7.4.

	 	Collection
	 	 	20	 
	SECTION 7.5.

	 	Notice of Business Activity Reports
	 	 	20	 
	SECTION 7.6.

	 	Collection of Proceeds of Receivables
	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE VIII	 	 	 	 
	 
	 	 	 	 	 	 
	TRANSFERS	 	 	 	 

- ii -

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 8.1.

	 	Transfers of Pledged Collateral
	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE IX	 	 	 	 
	 
	 	 	 	 	 	 
	REMEDIES	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 9.1.

	 	Remedies
	 	 	22	 
	SECTION 9.2.

	 	Notice of Sale
	 	 	23	 
	SECTION 9.3.

	 	Waiver of Notice and Claims
	 	 	24	 
	SECTION 9.4.

	 	Certain Sales of Pledged Collateral
	 	 	24	 
	SECTION 9.5.

	 	No Waiver; Cumulative Remedies
	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE X	 	 	 	 
	 
	 	 	 	 	 	 
	APPLICATION OF PROCEEDS	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 10.1.

	 	Application of Proceeds
	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE XI	 	 	 	 
	 
	 	 	 	 	 	 
	MISCELLANEOUS	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 11.1.

	 	Concerning Administrative Agent
	 	 	26	 
	SECTION 11.2.

	 	Administrative Agent May Perform; Administrative Agent Appointed
Attorney-in-Fact
	 	 	27	 
	SECTION 11.3.

	 	Continuing Security Interest; Assignment
	 	 	27	 
	SECTION 11.4.

	 	Termination; Release
	 	 	28	 
	SECTION 11.5.

	 	Modification in Writing
	 	 	28	 
	SECTION 11.6.

	 	Notices
	 	 	28	 
	SECTION 11.7.

	 	Governing Law, Consent to Jurisdiction and Service
of Process; Waiver of Jury Trial
	 	 	28	 
	SECTION 11.8.

	 	Severability of Provisions
	 	 	28	 
	SECTION 11.9.

	 	Execution in Counterparts
	 	 	29	 
	SECTION 11.10.

	 	Business Days
	 	 	29	 
	SECTION 11.11.

	 	No Credit for Payment of Taxes or Imposition
	 	 	29	 
	SECTION 11.12.

	 	No Claims Against Administrative Agent
	 	 	29	 
	SECTION 11.13.

	 	No Release
	 	 	29	 
	SECTION 11.14.

	 	Obligations Absolute
	 	 	29	 
	SECTION 11.15.

	 	Effect of this Agreement
	 	 	30	 

- iii -

 

	 	 	 	 	 	 	 
	EXHIBIT 1

	 	Form of Issuer’s Acknowledgment	 	 	 	 
	 	 	 	 	 	 	 
	EXHIBIT 2

	 	Form of Pledge Amendment	 	 	 	 
	 	 	 	 	 	 	 
	EXHIBIT 3

	 	Form of Joinder Agreement	 	 	 	 
	 	 	 	 	 	 	 
	EXHIBIT 4

	 	Perfection Certificate	 	 	 	 

 

 

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

          This AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, dated as of December 7, 2010 (as
amended, restated, supplemented or otherwise modified from time to time in accordance with the
provisions hereof, this “Agreement”) made by and among SMITH & WESSON HOLDING CORPORATION,
a Nevada corporation, SMITH & WESSON CORP., a Delaware corporation, THOMPSON/CENTER ARMS COMPANY,
INC., a New Hampshire corporation, THOMPSON CENTER HOLDING CORPORATION, a Delaware corporation,
UNIVERSAL SAFETY RESPONSE, INC., a Delaware corporation, FOX RIDGE OUTFITTERS, INC., a New
Hampshire corporation, K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire corporation, O.L.
DEVELOPMENT, INC., a New Hampshire corporation, BEAR LAKE HOLDINGS, INC., a Delaware corporation,
SMITH AND WESSON DISTRIBUTING, INC., a Delaware corporation, and such other Persons from time to
time party hereto by execution of a Joinder Agreement, as pledgors, assignors and debtors
(collectively, and in such capacities and together with any successors in such capacities, the
“Pledgors,” and each, a “Pledgor”), in favor of TD BANK N.A., in its capacity as
administrative agent pursuant to the Credit Agreement (as hereinafter defined), as pledgee,
assignee and secured party (in such capacities and together with any successors in such capacities,
the “Administrative Agent”).

R E C I T A L S :

          A. Certain of the Pledgors, the lenders party thereto and the Administrative Agent are
parties to that certain Credit Agreement, dated as of November 30, 2007 (as amended, the
“Existing Credit Agreement”), which is secured by, inter alia, that certain Pledge and
Security Agreement dated as of November 30, 2007 (as amended, the “Existing Security
Agreement”) among such Pledgors and the Administrative Agent.

          B. The Pledgors, the lenders party thereto (the “Lenders”), TD Bank, N.A., as
issuer of Letters of Credit thereunder (the “LC Issuer”) and the Administrative Agent are
amending and restating the Existing Credit Agreement in its entirety with an Amended and Restated
Credit Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”). Capitalized terms used and not
defined herein are used with the meanings assigned to such terms in the Credit Agreement.

          C. The Pledgors will receive substantial benefits from the execution, delivery and
performance of the Obligations under the Credit Agreement and the other Loan Documents and each is,
therefore, willing to enter into this Agreement.

          D. It is a condition to (i) the obligations of the Lenders to make the Loans and the LC
Issuer to issue Letters of Credit under the Credit Agreement and (ii) the performance of the
obligations of the Secured Parties under any and all Swap Agreements and all Cash Management
Services that constitute Obligations that the Pledgors amend and restate the Existing Security
Agreement in its entirety with this Agreement.

          E. Each Pledgor is willing and has voluntarily and freely agreed to enter into this
Agreement to secure the payment and performance of all of the Obligations as hereinafter provided.

          F. The parties hereto intend that this Agreement shall not constitute a novation of the
obligations and liabilities existing under the Existing Security Agreement, but rather that this
Agreement shall amend and restate in its entirety the Existing Security Agreement and re-evidence
the obligations of the Pledgors, the Borrowers and the Guarantors (as each term is defined in the
Existing

 

 

Security Agreement) outstanding thereunder, as well as evidence of the additional obligations
of the Pledgors to the Administrative Agent provided for herein.

A G R E E M E N T :

          NOW THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each Pledgor and the
Administrative Agent hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

          SECTION 1.1. Definitions.Unless otherwise defined herein or in the Credit Agreement, capitalized
terms used herein that are defined in the UCC shall have the meanings assigned to them in the UCC;
provided that in any event, the following terms shall have the meanings assigned to them in the
UCC:

          “Accounts”; “Bank”; “Certificated Securities”; “Chattel
Paper”; “Commercial Tort Claim”; “Commodity Account”; “Commodity
Contract”; “Commodity Intermediary”; “Documents”; “Electronic Chattel
Paper”; “Entitlement Order”; “Equipment”; “Financial Asset”;
“Fixtures”; “Goods”, “Inventory”; “Letter-of-Credit Rights”;
“Letters of Credit”; “Money”; “Payment Intangibles”; “Proceeds”;
“Records”; “Securities Account”; “Securities Intermediary”; “Security
Entitlement”; “Supporting Obligations”; “Tangible Chattel Paper”; and
“Uncertificated Security”.

          (a) Terms used but not otherwise defined herein that are defined in the Credit Agreement
shall have the meanings given to them in the Credit Agreement. Section 1.01 of the Credit
Agreement shall apply herein mutatis mutandis.

          (b) The following terms shall have the following meanings:

          “Administrative Agent” shall have the meaning assigned to such term in the Preamble
hereof.

          “Agreement” shall have the meaning assigned to such term in the Preamble hereof.

          “Collateral Support” shall mean all property (real or personal) assigned, hypothecated
or otherwise securing any Pledged Collateral and shall include any security agreement or other
agreement granting a lien or security interest in such real or personal property.

          “Commodity Account Control Agreement” shall mean a control agreement in a form that is
reasonably satisfactory to the Administrative Agent establishing the Administrative Agent’s Control
with respect to any Commodity Account.

          “Contracts” shall mean, collectively, with respect to each Pledgor, all sale, service,
performance, equipment or personal property lease contracts and agreements and all other contracts
or agreements (in each case, whether written or oral, or third party or intercompany), between such
Pledgor

- 2 -

 

and any third party, and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof.

          “Control” shall mean (i) in the case of each Deposit Account, “control,” as such term
is defined in Section 9-104 of the UCC, (ii) in the case of any Security Entitlement, “control,” as
such term is defined in Section 8-106 of the UCC, and (iii) in the case of any Commodity Contract,
“control,” as such term is defined in Section 9-106 of the UCC.

          “Control Agreements” shall mean, collectively, the Deposit Account Control Agreements,
the Securities Account Control Agreements and the Commodity Account Control Agreements.

          “Controlled Account(s)” shall have the meaning assigned to such term in Section
7.6(a) hereof.

          “Copyrights” shall mean, collectively, with respect to each Pledgor, all copyrights
(whether statutory or common law, whether established or registered in the United States or any
other country or any political subdivision thereof, whether registered or unregistered and whether
published or unpublished) and all copyright registrations and applications thereof made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or assigned to such
Pledgor, together with any and all (i) rights and privileges arising under applicable law with
respect to such Pledgor’s use of such copyrights, (ii) renewals thereof, (iii) income, fees,
royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto,
including damages and payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past, present or future
infringements thereof.

          “Core Personalty” shall mean any and all inventory of any Pledgor and the accounts
related thereto, any and all machinery and equipment of any Pledgor that is used in the production
of income of the Pledgors or necessary or material, in the commercially reasonable judgment of the
Administrative Agent, to the core operations of the Pledgors, all accessions to, substitutions for,
replacements and products of any of the foregoing, and all books and records of the Pledgors.

          “Credit Agreement” shall have the meaning assigned to such term in Recital A
hereof.

          “Deposit Account Control Agreement” shall mean a control agreement in a form that is
reasonably satisfactory to the Administrative Agent establishing the Administrative Agent’s Control
with respect to any Deposit Account.

          “Deposit Accounts” shall mean, collectively, with respect to each Pledgor, (i) all
“deposit accounts” as such term is defined in the UCC and all accounts and sub-accounts relating to
any of the foregoing accounts and (ii) all cash, funds, checks, notes and instruments from time to
time on deposit in any of the accounts or sub-accounts described in clause (i) of this definition.

          “Distributions” shall mean, collectively, with respect to each Pledgor, all dividends,
cash, options, warrants, rights, instruments, distributions, returns of capital or principal,
income, interest, profits and other property, interests (debt or equity) or proceeds, including as
a result of a split, revision, reclassification or other like change of the Pledged Securities,
from time to time received, receivable or otherwise distributed to such Pledgor in respect of or in
exchange for any or all of the Pledged Securities or Intercompany Notes.

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          “Excluded Accounts” means, collectively, (i) any Deposit Account that is used solely
for tax withholding, funds held in trust, payment of payroll or similar account for the benefit of
employees and (ii) any Deposit Account (other than any Deposit Account with TD Bank) that
customarily has a balance less than $100,000.00, in each case of (i) and (ii) as set forth in
Schedule 13(a) to the Perfection Certificate.

          “Excluded Property” shall mean

     (a) any permit or license issued by a Governmental Authority to any Pledgor or any
agreement to which any Pledgor is a party, in each case, only to the extent and for so long
as the terms of such permit, license or agreement or any Requirement of Law applicable
thereto, validly prohibit the creation by such Pledgor of a security interest in such
permit, license or agreement in favor of the Administrative Agent (after giving effect to
Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or
provisions) or any other applicable law (including the Bankruptcy Code) or principles of
equity);

     (b) any licenses, leases or other contracts of any Pledgor to the extent that the
granting of a security interest therein would constitute a breach thereof or is prohibited
thereby and such prohibition is not ineffective under Sections 9-406(d), 9-407, 9-408 or
9-409 of the UCC; provided, further (x) all Receivables arising under such licenses, leases
or other contracts shall be included in the definition of Collateral and shall constitute
Collateral and (y) the Collateral shall include all payments and other property received or
receivable in connection with any sale or other disposition of such licenses, leases or
other contracts.;

     (c) Excluded Accounts;

     (d) any Pledged Securities which are specifically excluded from the definition of
Pledged Securities by virtue of the proviso to such definition; and

     (e) Copyrights, Patents and Trademarks;

provided, however, that Excluded Property shall not include any Proceeds,
substitutions or replacements of any Excluded Property (unless such Proceeds, substitutions or
replacements would constitute Excluded Property).

          “Existing Credit Agreement” shall have the meaning assigned to such term in
Recital A hereof.

          “Existing Security Agreement” shall have the meaning assigned to such term in
Recital A hereof.

          “General Intangibles” shall mean, collectively, with respect to each Pledgor, all
“general intangibles,” as such term is defined in the UCC, of such Pledgor and, in any event, shall
include all of such Pledgor’s rights, title and interest in, to and under all (i) Contracts and
insurance policies (including all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for damages or other relief pursuant to or in
respect of any Contract), (ii) all know-how and warranties relating to any of the Pledged
Collateral or the Mortgaged Premises, (iii) any and all other rights, claims, choses-in-action and
causes of action of such Pledgor against any other Person and the benefits of any and all
collateral or other security given by any other Person in connection therewith, (iv) all
guarantees, endorsements and indemnifications on, or of, any of the Pledged Collateral or any of
the Mortgaged Premises, (v) all lists, books, records, correspondence, ledgers, printouts, files
(whether in

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printed form or stored electronically), tapes and other papers or materials containing
information relating to any of the Pledged Collateral or any of the Mortgaged Premises, including
all customer or tenant lists, identification of suppliers, data, plans, blueprints, specifications,
designs, drawings, appraisals, recorded knowledge, surveys, studies, engineering reports, test
reports, manuals, standards, processing standards, performance standards, catalogs, research data,
computer and automatic machinery software and programs and the like, field repair data, accounting
information pertaining to such Pledgor’s operations or any of the Pledged Collateral or any of the
Mortgaged Premises and all media in which or on which any of the information or knowledge or data
or records may be recorded or stored and all computer programs used for the compilation or printout
of such information, knowledge, records or data, (vi) all licenses, consents, permits, variances,
certifications, authorizations and approvals, however characterized, now or hereafter acquired or
held by such Pledgor, including building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and certificates of operation and (vii) all rights to
reserves, deferred payments, deposits, refunds, indemnification of claims and claims for tax or
other refunds against any Governmental Authority, except in each case for Excluded Property.

          “Instruments” shall mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9, rather than Article 3, of the UCC, and shall
include all promissory notes, drafts, bills of exchange or acceptances.

          “Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany notes
payable to it described in Schedule 10 to the Perfection Certificate and intercompany notes
hereafter acquired by such Pledgor and all certificates, instruments or documents evidencing such
intercompany notes, and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof to the extent permitted pursuant to the terms
hereof.

          “Investment Property” shall mean a Security, whether certificated or uncertificated,
Security Entitlement, Securities Accounts, Commodity Contract or Commodity Account, excluding,
however, the Securities Collateral.

          “Joinder Agreement” shall mean an agreement substantially in the form of Exhibit
3 hereto.

          “LC Issuer” shall have the meaning assigned to such term in Recital B hereof.

          “Lenders” shall have the meaning assigned to such term in Recital A hereof.

          “Lock Box(es)” shall have the meaning assigned to such term in Section 7.6(a)
hereof.

          “Motor Vehicles” shall mean all trucks, trailers, tractors, service vehicles,
automobiles and other registered mobile equipment of the Pledgors.

          “Patents” shall mean, collectively, with respect to each Pledgor, all patents issued
or assigned to, and all patent applications and registrations made by, such Pledgor (whether
established or registered or recorded in the United States or any other country or any political
subdivision thereof), together with any and all (i) rights and privileges arising under applicable
law with respect to such Pledgor’s use of any patents, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and amendments thereto, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable thereunder and with respect thereto including
damages and payments for past, present or future infringements thereof, (v) rights corresponding
thereto throughout the world and (vi) rights to sue for past, present or future infringements
thereof.

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          “Perfection Certificate” shall mean that certain perfection certificate dated as of
the date hereof, executed and delivered by each Pledgor in favor of the Administrative Agent for
the benefit of the Secured Parties and attached hereto as Exhibit 4, and each other
Perfection Certificate (which shall be in form reasonably acceptable to the Administrative Agent)
executed and delivered by the applicable Pledgor in favor of the Administrative Agent for the
benefit of the Secured Parties contemporaneously with the execution and delivery of each Joinder
Agreement executed in accordance with Section 3.5 hereof.

          “Pledge Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.

          “Pledged Collateral” shall have the meaning assigned to such term in Section
2.1 hereof.

          “Pledged Securities” shall mean, collectively, with respect to each Pledgor, (i) all
issued and outstanding Equity Interests of each issuer set forth on Schedule 9 to the
Perfection Certificate as being owned by such Pledgor and all options, warrants, rights, agreements
and additional Equity Interests of whatever class of any such issuer acquired by such Pledgor
(including by issuance), together with all rights, privileges, authority and powers of such Pledgor
relating to such Equity Interests in each such issuer or under any Organization Document of each
such issuer, and the certificates, instruments and agreements representing such Equity Interests
and any and all interest of such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, (ii) all Equity Interests of any issuer, which Equity
Interests are hereafter acquired by such Pledgor (including by issuance) and all options, warrants,
rights, agreements and additional Equity Interests of whatever class of any such issuer acquired by
such Pledgor (including by issuance), together with all rights, privileges, authority and powers of
such Pledgor relating to such Equity Interests or under any Organization Document of any such
issuer, and the certificates, instruments and agreements representing such Equity Interests and any
and all interest of such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, from time to time acquired by such Pledgor in any manner, and
(iii) all Equity Interests issued in respect of the Equity Interests referred to in clause (i) or
(ii) upon any consolidation or merger of any issuer of such Equity Interests; provided,
however, that with respect to the voting Equity Interests of any Foreign Subsidiary,
Pledged Securities shall not include any such voting Equity Interests to the extent in excess of
65% of the aggregate outstanding voting Equity Interests of such Foreign Subsidiary.

          “Pledgor” shall have the meaning assigned to such term in the Preamble hereof.

          “Receivables” shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment
Intangibles, (iv) General Intangibles, (v) Instruments and (vi) all other rights to payment,
whether or not earned by performance, for goods or other property sold, leased, licensed, assigned
or otherwise disposed of, or services rendered or to be rendered, regardless of how classified
under the UCC together with all of Pledgors’ rights, if any, in any goods or other personal
property giving rise to such right to payment and all Collateral Support and Supporting Obligations
related thereto and all Records relating thereto.

          “Securities Account Control Agreement” shall mean a control agreement in a form that
is reasonably satisfactory to the Administrative Agent establishing the Administrative Agent’s
Control with respect to any Securities Account.

          “Securities Collateral” shall mean, collectively, the Pledged Securities, the
Intercompany Notes and the Distributions.

          “Trademarks” shall mean, collectively, with respect to each Pledgor, all trademarks
(including service marks), slogans, logos, certification marks, trade dress, uniform resource
locations (URL’s), domain names, corporate names and trade names, whether registered or
unregistered, owned by

- 6 -

 

or assigned to such Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the United States or any other
country or any political subdivision thereof) (except for “intent-to-use” applications for
trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C.
§ 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and
1(d) of said Act has been filed), together with any and all (i) rights and privileges arising under
applicable law with respect to such Pledgor’s use of any trademarks, (ii) reissues, continuations,
extensions and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and
payments now and hereafter due and/or payable thereunder and with respect thereto, including
damages, claims and payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past, present and future
infringements thereof.

          “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York; provided, however, that, at any time, if by reason of mandatory
provisions of law, any or all of the perfection or priority of the Administrative Agent’s and the
Secured Parties’ security interest in any item or portion of the Pledged Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the
term “UCC” shall mean the Uniform Commercial Code as in effect, at such time, in such other
jurisdiction for purposes of the provisions hereof relating to such perfection or priority.

          SECTION 1.2. Interpretation. The rules of interpretation specified in the Credit Agreement
(including Section 1.01 thereof) shall be applicable to this Agreement.

          SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor acknowledges and agrees that it was
represented by counsel in connection with the execution and delivery hereof, that it and its
counsel reviewed and participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the drafting party
(i.e., the Administrative Agent) shall not be employed in the interpretation hereof.

          SECTION 1.4. Perfection Certificate. The Administrative Agent and each Pledgor agree that the
Perfection Certificate and all descriptions of Pledged Collateral and schedules thereto are and
shall at all times remain a part of this Agreement.

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ARTICLE II

GRANT OF SECURITY AND OBLIGATIONS

          SECTION 2.1. Grant of Security Interest. As collateral security for the payment and performance in
full of all the Obligations, each Pledgor hereby pledges and grants to the Administrative Agent for
the benefit of the Secured Parties, a lien on and security interest in all of the right, title and
interest of such Pledgor in, to and under the following property, wherever located, and whether now
existing or hereafter arising or acquired from time to time (collectively, the “Pledged
Collateral”):

	 	(i)	 	all Accounts;
	 
	 	(ii)	 	all Equipment, Goods, Inventory and Fixtures;
	 
	 	(iii)	 	all Documents, Instruments and Chattel Paper;
	 
	 	(iv)	 	all Letters of Credit and Letter-of-Credit Rights;
	 
	 	(v)	 	all Securities Collateral;
	 
	 	(vi)	 	all Investment Property;
	 
	 	(vii)	 	all Commercial Tort Claims;
	 
	 	(viii)	 	all General Intangibles;
	 
	 	(ix)	 	all Money and all Deposit Accounts;
	 
	 	(x)	 	all Supporting Obligations;
	 
	 	(xi)	 	all books and records relating to the Pledged
Collateral; and
	 
	 	(xii)	 	to the extent not covered by clauses (i) through (xii)
of this sentence, all other personal property of such Pledgor, whether
tangible or intangible, and all Proceeds and products of each of the
foregoing and all accessions to, substitutions and replacements for, and
rents, profits and products of, each of the foregoing, any and all Proceeds
of any insurance, indemnity, warranty or guaranty payable to such Pledgor
from time to time with respect to any of the foregoing.

          Notwithstanding anything to the contrary contained in clauses (i) through (xii) above, the
security interest created by this Agreement shall not extend to, and the term “Pledged Collateral”
shall not include, any Excluded Property, and (i) the Pledgors shall from time to time at the
reasonable request of the Administrative Agent give written notice to the Administrative Agent
identifying in reasonable detail the Excluded Property and shall provide to the Administrative
Agent such other information regarding the Excluded Property as the Administrative Agent may
reasonably request and (ii) from and after the Effective Date, no Pledgor shall permit to become
effective in any document creating, governing or providing for any material permit, license or
agreement a provision that would prohibit the creation of a Lien on such material permit, license
or agreement in favor of the Administrative Agent unless such

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Pledgor believes, in its reasonable judgment, that such prohibition is usual and customary in
transactions of such type.

          SECTION 2.2. Filings.

          (a) Each Pledgor hereby irrevocably authorizes the Administrative Agent at any time and
from time to time to file in any relevant jurisdiction any financing statements (including fixture
filings) and amendments thereto that contain the information required by Article 9 of the Uniform
Commercial Code of each applicable jurisdiction for the filing of any financing statement or
amendment relating to the Pledged Collateral, including (i) whether such Pledgor is an
organization, the type of organization and any organizational identification number issued to such
Pledgor, (ii) any financing or continuation statements or other documents without the signature of
such Pledgor where permitted by law, including the filing of a financing statement describing the
Pledged Collateral as “all assets now owned or hereafter acquired by the Pledgor or in which
Pledgor otherwise has rights” and (iii) in the case of a financing statement filed as a fixture
filing or covering Pledged Collateral constituting minerals or the like to be extracted or timber
to be cut, a sufficient description of the real property to which such Pledged Collateral relates.
Each Pledgor agrees to provide all information described in the immediately preceding sentence to
the Administrative Agent promptly upon request by the Administrative Agent.

          (b) Each Pledgor hereby ratifies its authorization for the Administrative Agent to file in
any relevant jurisdiction any financing statements of the type described in clause (a) above
relating to the Pledged Collateral if filed prior to the date hereof, with the Administrative Agent
delivering a copy of such filing to the applicable Pledgor.

ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL

          SECTION 3.1. Delivery of Certificated Securities Collateral. Each Pledgor represents and warrants
that all certificates, agreements or instruments representing or evidencing the Securities
Collateral in existence on the date hereof have been delivered to the Administrative Agent in
suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that (assuming continuing possession by the Administrative Agent of any
such Securities Collateral constituting Certificated Securities), the Administrative Agent has a
perfected security interest therein prior to all other Liens on such Securities Collateral except,
with respect to any Equity Interests of Subsidiaries, for Permitted Encumbrances which have
priority over, or are pari passu with, the security interest on such Securities Collateral by
operation of law, and with respect to any other Securities Collateral, except for Permitted
Encumbrances and Liens otherwise permitted by Section 7.02 of the Credit Agreement. Each Pledgor
hereby agrees that all certificates, agreements or instruments representing or evidencing
Securities Collateral acquired by such Pledgor after the date hereof shall promptly (but in any
event within ten (10) Business Days after receipt thereof by such Pledgor) be delivered to and held
by or on behalf of the Administrative Agent pursuant hereto. All certificated Securities
Collateral shall be in suitable form for transfer by delivery or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and substance satisfactory to
the Administrative Agent. The Administrative Agent shall have the right, at any time upon
the occurrence and during the continuance of any Event of Default, to endorse, assign or
otherwise transfer to or to register in the name of the Administrative Agent or any of its nominees
or endorse for negotiation any or all of the Securities Collateral, without any indication that
such Securities Collateral is subject to the

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security interest hereunder. In addition, upon the
occurrence and during the continuance of an Event of Default, the Administrative Agent shall have
the right at any time to exchange certificates representing or evidencing Securities Collateral for
certificates of smaller or larger denominations.

          SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each Pledgor represents and
warrants that the Administrative Agent has a perfected security interest in all uncertificated
Pledged Securities pledged by it hereunder that are in existence on the date hereof prior to all
other Liens on such Securities Collateral except, with respect to any Equity Interests of
Subsidiaries, for Permitted Encumbrances which have priority over, or are pari passu with, the
security interest on such Pledged Securities by operation of law, and with respect to any other
uncertificated Pledged Securities, except for Permitted Encumbrances and Liens otherwise permitted
by Section 7.02 of the Credit Agreement. Each Pledgor hereby agrees that if any of the Pledged
Securities are at any time not evidenced by certificates of ownership, then each applicable Pledgor
shall, to the extent permitted by applicable law, (i) cause (or, if the issuer is not a Subsidiary,
use commercially reasonable efforts to cause) the issuer to execute and deliver to the
Administrative Agent an acknowledgment of the pledge of such Pledged Securities substantially in
the form of Exhibit 1 hereto or such other form that is reasonably satisfactory to the
Administrative Agent, (ii) if necessary or desirable to perfect a security interest in such Pledged
Securities, cause (or, if the issuer is not a Subsidiary, use commercially reasonable efforts to
cause) such pledge to be recorded on the equityholder register or the books of the issuer, execute
any customary pledge forms or other documents necessary or appropriate to complete the pledge and
give the Administrative Agent the right to transfer such Pledged Securities under the terms hereof,
and (iii) after the occurrence and during the continuance of any Event of Default, upon request by
the Administrative Agent, (A) cause (or, if the issuer is not a Subsidiary, use commercially
reasonable efforts to cause) the Organization Documents of each such issuer to be amended to
provide that such Pledged Securities shall be treated as “securities” for purposes of the UCC and
(B) cause (or, if the issuer is not a Subsidiary, use commercially reasonable efforts to cause)
such Pledged Securities to become certificated and delivered to the Administrative Agent in
accordance with the provisions of Section 3.1 hereof. Each Pledgor hereby agrees that if
any of the Pledged Securities not issued by any Subsidiary of such Pledgor are at any time not
evidenced by certificates of ownership, such Pledgor shall enter agreements granting “control” to
the Administrative Agent with respect to such uncertificated Pledged Securities or take any other
action reasonably requested by the Administrative Agent in order to perfect security interest
therein prior to all other Liens on such Pledged Securities except, with respect to any Equity
Interests of Subsidiaries, for Permitted Encumbrances which have priority over, or are pari passu
with, the security interest on such Pledged Securities by operation of law, and with respect to any
other uncertificated Pledged Securities, except for Permitted Encumbrances and Liens otherwise
permitted by Section 7.02 of the Credit Agreement.

          SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected Security Interest.
Each Pledgor represents and warrants that all financing statements, agreements, instruments and
other documents necessary to perfect the security interest granted by it to the Administrative
Agent in respect of the Pledged Collateral have been delivered to the Administrative Agent in
completed and, to the extent necessary or appropriate, duly executed form for filing in each
governmental, municipal or other office specified in Schedule 6 to the Perfection
Certificate. Each Pledgor agrees that at the sole cost and expense of the Pledgors, such Pledgor
will maintain the security interest created by this Agreement in the Pledged Collateral as a
perfected security interest subject only to
Permitted Encumbrances and prior to all other Liens on such Pledged Collateral except for
Permitted Encumbrances and Liens otherwise permitted by Section 7.02 of the Credit Agreement.

          SECTION 3.4. Other Actions. In order to further ensure the attachment, perfection and priority of,
and the ability of the Administrative Agent to enforce, the Administrative Agent’s security
interest in the Pledged Collateral, each Pledgor represents and warrants (as to itself) as follows

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and agrees, in each case at such Pledgor’s own expense, to take the following actions with respect
to the following Pledged Collateral:

     (a) Instruments and Tangible Chattel Paper. As of the date hereof, no
amounts payable under or in connection with any of the Pledged Collateral are evidenced by
any Instrument or Tangible Chattel Paper other than such Instruments and Tangible Chattel
Paper listed in Schedule 10 to the Perfection Certificate. Each Instrument and each
item of Tangible Chattel Paper in excess of $500,000 listed in Schedule 10 to the
Perfection Certificate has been properly endorsed, assigned and delivered to the
Administrative Agent, accompanied by instruments of transfer or assignment duly executed in
blank. If at any time any amount in excess of $500,000 then payable under or in connection
with any of the Pledged Collateral shall be evidenced by any Instrument or Tangible Chattel
Paper, the Pledgor acquiring such Instrument or Tangible Chattel Paper shall promptly (but
in any event within five (5) Business Days after receipt thereof) endorse, assign and
deliver the same to the Administrative Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Administrative Agent may from time to time specify.

     (b) Deposit Accounts. As of the date hereof, no Pledgor has any Deposit
Accounts other than the accounts listed in Schedule 13 to the Perfection
Certificate. The Administrative Agent has a perfected security interest in each such
Deposit Account (other than any Excluded Account), which security interest is perfected by
Control. No Pledgor shall hereafter establish and maintain any Deposit Account (other than
any Excluded Account) unless (1) it shall have given the Administrative Agent ten (10) days’
prior written notice of its intention to establish such new Deposit Account with a Bank, (2)
such Bank shall be reasonably acceptable to the Administrative Agent and (3) such Bank and
such Pledgor shall have duly executed and delivered to the Administrative Agent a Deposit
Account Control Agreement with respect to each such Deposit Account concurrently with the
establishment of such Deposit Account, provided that, for purposes of administrative
convenience, the Administrative Agent may in its reasonable discretion, permit the Pledgors
from time to time to maintain one or more Deposit Accounts with one or more financial
institutions and with such maximum cash balances as the Administrative Agent deems
appropriate, and for which a Deposit Account Control Agreement will not be required. The
Administrative Agent agrees with each Pledgor that the Administrative Agent shall not give
any instructions directing the disposition of funds from time to time credited to any
Deposit Account or withhold any withdrawal rights from such Pledgor with respect to funds
from time to time credited to any Deposit Account unless an Event of Default has occurred
and is continuing. No Pledgor shall grant Control of any Deposit Account to any person
other than the Administrative Agent.

     (c) Securities Accounts and Commodity Accounts. (a) As of the date
hereof, no Pledgor has any Securities Accounts or Commodity Accounts other than those listed
in Schedule 13 to the Perfection Certificate. The Administrative Agent has a
perfected security interest in each such Securities Account and Commodity Account, which
security interest is perfected by Control. No Pledgor shall hereafter establish and
maintain any Securities Account or Commodity Account with any Securities Intermediary or
Commodity Intermediary unless (1) it shall have
given the Administrative Agent ten (10) days’ prior written notice of its intention to
establish such new Securities Account or Commodity Account with such Securities Intermediary
or Commodity Intermediary, (2) such Securities Intermediary or Commodity Intermediary shall
be reasonably acceptable to the Administrative Agent and (3) such Securities Intermediary or
Commodity Intermediary, as the case may be, and such Pledgor shall have duly executed and
delivered a Control Agreement with respect to such Securities Account or Commodity
Account, as the case may be concurrently with the establishment of such Securities Account or
Commodity

- 11 -

 

Account. Each Pledgor shall accept any cash and Investment Property in trust for
the benefit of the Administrative Agent and within five (5) Business Days of actual receipt
thereof, deposit any and all cash and Security Entitlements received by it into a Deposit
Account or Securities Account subject to Administrative Agent’s Control or, if in the
ordinary course of business, an Excluded Account. The Administrative Agent agrees with each
Pledgor that the Administrative Agent shall not give any Entitlement Orders or instructions
or directions to any issuer of uncertificated securities, Securities Intermediary or
Commodity Intermediary, and shall not withhold its consent to the exercise of any withdrawal
or dealing rights by such Pledgor, unless an Event of Default has occurred and is continuing
or, after giving effect to any such investment and withdrawal rights, would occur. No
Pledgor shall grant Control over any Investment Property to any Person other than the
Administrative Agent.

     (i) As between the Administrative Agent and the Pledgors, the Pledgors shall bear
the investment risk with respect to the Investment Property and Pledged Securities, and the
risk of loss of, damage to, or the destruction of the Investment Property and Pledged
Securities, whether in the possession of, or maintained as a Security Entitlement or deposit
by, or subject to the Control of, the Administrative Agent, a Securities Intermediary, a
Commodity Intermediary, any Pledgor or any other person.

     (d) Electronic Chattel Paper and Transferable Records. As of the date
hereof, no amount under or in connection with any of the Pledged Collateral is evidenced by
any Electronic Chattel Paper or any “transferable record” (as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction) other than such Electronic Chattel Paper and transferable records listed in
Schedule 10 to the Perfection Certificate. If any amount in excess of $500,000
payable under or in connection with any of the Pledged Collateral shall be evidenced by any
Electronic Chattel Paper or any transferable record, the Pledgor acquiring such Electronic
Chattel Paper or transferable record shall promptly (but in any event within five (5)
Business Days after acquisition thereof) notify the Administrative Agent thereof and shall
use commercially reasonable efforts to take such action as the Administrative Agent may
reasonably request to vest in the Administrative Agent control of such Electronic Chattel
Paper under Section 9-105 of the UCC or control under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as in effect in such jurisdiction, of such transferable
record. The Administrative Agent agrees with such Pledgor that the Administrative Agent
will arrange, pursuant to procedures reasonably satisfactory to the Administrative Agent,
for such Pledgor to make alterations to the Electronic Chattel Paper or transferable record
permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform
Electronic Transactions Act for a party in control to allow without loss of control, unless
an Event of Default has occurred and is continuing or would occur after taking into account
any action by such Pledgor with respect to such Electronic Chattel Paper or transferable
record.

     (e) Letter-of-Credit Rights. As of the date hereof, each Pledgor hereby
represents and warrants that it holds no Letter-of-Credit other than those listed in
Schedule 14 to the Perfection Certificate. If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued with a face amount in excess of
$500,000, such Pledgor shall promptly (and in any event within five (5) Business Days after
becoming a beneficiary thereof) notify the Administrative Agent thereof and such Pledgor
shall, at the reasonable request of the Administrative Agent, use commercially reasonable
efforts to, either (i) arrange for the issuer and any confirmer of such Letter of Credit to
consent to an assignment to the Administrative Agent of

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the proceeds of any drawing under
the Letter of Credit or (ii) arrange for the Administrative Agent to become the transferee
beneficiary of such Letter of Credit, in each case, pursuant to an agreement in form and
substance reasonably satisfactory to the Administrative Agent, and with the Administrative
Agent agreeing, in each case, that the proceeds of any drawing under the Letter of Credit
are to be applied as provided in the Credit Agreement.

     (f) Commercial Tort Claims. As of the date hereof, each Pledgor hereby
represents and warrants that it holds no Commercial Tort Claims other than those listed in
Schedule 12 to the Perfection Certificate. If any Pledgor shall at any time hold or
acquire a Commercial Tort Claim in excess of $500,000, such Pledgor shall promptly (and in
any event within five (5) Business Days after the acquisition thereof) notify the
Administrative Agent in writing signed by such Pledgor of the brief details thereof and, if
such Commercial Tort Claim is in excess of $500,000, grant to the Administrative Agent in
such writing a security interest therein and in the Proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably satisfactory to the
Administrative Agent.

     (g) Collateral Access Agreements. If, after the date of this Agreement,
any Core Personalty is located on real property leased by any Pledgor or is otherwise in the
possession of a bailee (including for purposes hereof any warehouseman, processor, or
shipper), the applicable Pledgor shall promptly deliver to the Administrative Agent a
Collateral Access Agreement or bailee letter, as applicable, in form and substance
reasonably satisfactory to the Administrative Agent; provided that no such
Collateral Access Agreement or bailee letter shall be required with respect to any Core
Personalty located on real property leased by any Pledgor or otherwise in the possession of
a bailee that could not be obtained after such Pledgor shall have used all commercially
reasonable efforts to do so.

     (h) Motor Vehicles. Upon the reasonable request of the Administrative
Agent, each Pledgor shall deliver to the Administrative Agent originals of the certificates
of title or ownership for the Motor Vehicles (and any other Equipment covered by
certificates of title or ownership) owned by it, with the Administrative Agent listed as
lienholder therein. Such requirement shall not apply to Motor Vehicles (or other Equipment)
with an aggregate fair market value of $500,000 or less.

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          SECTION 3.5. Joinder of Additional Pledgors. The Pledgors shall cause each Subsidiary of a
Pledgor which, from time to time, after the date hereof shall be required to pledge any assets to
the Administrative Agent for the benefit of the Secured Parties pursuant to the provisions of
Section 6.13 of the Credit Agreement, to execute and deliver to the Administrative Agent (i) a
Joinder Agreement substantially in the form of Exhibit 3 hereto within five (5) Business
Days of the date on which it was acquired or created and (ii) a Perfection Certificate, in each
case, within five (5) Business Days of the date on which it was acquired or created. With respect
to the foregoing in this Section 3.5, upon such execution and delivery, such Subsidiary
shall constitute a “Pledgor” for all purposes hereunder with the same force and effect as if
originally named as a Pledgor herein. The execution and delivery of such Joinder Agreement shall
not require the consent of any Pledgor hereunder. The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of any new Pledgor as
a party to this Agreement.

          SECTION 3.6. Supplements; Further Assurances. Each Pledgor shall take such further actions, and
execute and/or deliver to the Administrative Agent such additional financing statements,
amendments, assignments, agreements, supplements, powers and instruments, as the Administrative
Agent may in its reasonable judgment deem necessary or appropriate in order to create, perfect,
preserve and protect the security interest in the Pledged Collateral as a security interest having
at least the perfection and priority described in Sections 3.1 through 3.4 and to
preserve and protect the rights and interests granted to the Administrative Agent hereunder, to
carry into effect the purposes hereof or better to assure and confirm the validity, enforceability
and priority of the Administrative Agent’s security interest in the Pledged Collateral as a
security interest having at least the perfection and priority described in Sections 3.1
through 3.4 or permit the Administrative Agent to exercise and enforce its rights, powers
and remedies hereunder with respect to any Pledged Collateral, including the filing of financing
statements, continuation statements and other documents (including this Agreement) under the
Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby and the execution and delivery of Control Agreements, all in form
reasonably satisfactory to the Administrative Agent and in such offices wherever required by law to
perfect, continue and maintain the validity, enforceability and priority of the security interest
in the Pledged Collateral as a security interest having at least the perfection and priority
described in Sections 3.1 through 3.4 and to preserve the other rights and
interests granted to the Administrative Agent hereunder, as against third parties, with respect to
the Pledged Collateral. Without limiting the generality of the foregoing, each Pledgor shall make,
execute, endorse, acknowledge, file or refile and/or deliver to the Administrative Agent from time
to time upon reasonable request by the Administrative Agent such lists, schedules, descriptions and
designations of the Pledged Collateral, copies of warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, supplements, additional security agreements, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and other assurances
or instruments as the Administrative Agent shall reasonably request for such purposes. If an Event
of Default has occurred and is continuing, the Administrative Agent may institute and maintain, in
its own name or in the name of any Pledgor, such suits and proceedings as the Administrative Agent
may be advised by counsel shall be necessary or expedient to prevent any impairment of the security
interest in or the perfection thereof in the Pledged Collateral. All of the foregoing shall be at
the sole cost and expense of the Pledgors.

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ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

          Each Pledgor represents, warrants and covenants as follows:

          SECTION 4.1. Title. Except for the security interest granted to the Administrative Agent for the
ratable benefit of the Secured Parties pursuant to this Agreement and Permitted Encumbrances and
Liens otherwise permitted by Section 7.02 of the Credit Agreement, such Pledgor owns and has rights
and, as to Pledged Collateral acquired by it from time to time after the date hereof, will own and
have rights in each item of Pledged Collateral pledged by it hereunder, free and clear of any and
all Liens. In addition, no Liens exist on the Securities Collateral, other than Permitted
Encumbrances, Liens otherwise permitted by Section 7.02 of the Credit Agreement and Liens that are
being contested in good faith by appropriate proceedings and for which such Pledgor has set aside
on its books adequate reserves.

          SECTION 4.2. Validity of Security Interest. The security interest in and Lien on the Pledged
Collateral granted to the Administrative Agent for the benefit of the Secured Parties hereunder
constitutes (a) a legal and valid security interest in all the Pledged Collateral securing the
payment and performance of the Obligations, and (b) subject to the filings and other actions
described in Schedule 6 to the Perfection Certificate, the payment of all applicable fees,
the delivery to and continuing possession by the Administrative Agent of all Certificated
Securities, all Instruments, all Tangible Chattel Paper and all Documents a security interest in
which is perfected by possession, and the obtaining and maintenance of “control” (as described in
the Uniform Commercial Code as in effect in the applicable jurisdiction) by the Administrative
Agent of all Deposit Accounts, all Securities Accounts, all Commodities Accounts, all Electronic
Chattel Paper, Letter-of-Credit Rights and all Uncertificated Securities, in each case a security
interest in which is perfected by such “control”, a perfected security interest in all the Pledged
Collateral. To the extent perfection of the security interest in such Pledged Collateral is
required by this Agreement, the security interest and Lien granted to the Administrative Agent for
the benefit of the Secured Parties pursuant to this Agreement in and on such Pledged Collateral
will at all times constitute a perfected security interest and Lien prior to all other Liens on
such Pledged Collateral except for Permitted Encumbrances and Liens otherwise permitted by Section
7.02 of the Credit Agreement.

          SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral. Each Pledgor shall, at its
own cost and expense, defend title to the Pledged Collateral pledged by it hereunder and the
security interest therein and Lien thereon granted to the Administrative Agent and the priority
thereof against all claims and demands of all Persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Administrative Agent or any other Secured Party other
than Permitted Encumbrances and Liens otherwise permitted by Section 7.02 of the Credit Agreement.

          SECTION 4.4. Other Financing Statements. It has not filed, nor authorized any third party to file,
any valid or effective financing statement (or similar statement, instrument of registration or
public notice under the law of any jurisdiction) covering or purporting to cover any interest of
any kind in the Pledged Collateral, except
such as have been filed in favor of the Administrative Agent pursuant to this Agreement or in
favor of any holder of a Permitted Encumbrance and Liens otherwise permitted by Section 7.02 of the
Credit Agreement with respect to such Permitted Encumbrances and Liens otherwise permitted by
Section 7.02 of the Credit Agreement or financing statements or public notices relating to the
termination statements listed on Schedule 8 to the Perfection Certificate. No Pledgor
shall execute, authorize or permit to be filed in any public office any financing statement (or

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similar statement, instrument of registration or public notice under the law of any jurisdiction)
relating to any Pledged Collateral, except financing statements and other statements and
instruments filed or to be filed in respect of and covering the security interests granted by such
Pledgor to the Administrative Agent or to the holder of the Permitted Encumbrances and Liens
otherwise permitted by Section 7.02 of the Credit Agreement.

          SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction of Organization.

          Each Pledgor shall not effect any change (i) in any its legal name, (ii) in the location of
its chief executive office or legal domicile, (iii) in its identity or organizational structure,
(iv) in its organizational identification number, if any, or (v) in its jurisdiction of
organization (in each case, including by merging or amalgamating with or into any other entity,
reorganizing, dissolving, liquidating, reorganizing or organizing in any other jurisdiction), until
(A) it shall have given the Administrative Agent not less than thirty (30) days’ prior written
notice, or such lesser notice period agreed to by the Administrative Agent, of its intention so to
do, clearly describing such change and providing such other information in connection therewith as
the Administrative Agent may reasonably request and (B) it shall have taken all action reasonably
requested by the Administrative Agent to maintain (to the extent provided in the applicable
Collateral Document) the perfection and priority of the security interest of the Administrative
Agent for the benefit of the Secured Parties in the Collateral. Each Pledgor agrees to promptly
provide the Administrative Agent with certified Organization Documents reflecting any of the
changes described in the preceding sentence. If any Pledgor fails to provide information to the
Administrative Agent about such changes on a timely basis, the Administrative Agent shall not be
liable or responsible to any party for any failure to maintain a perfected security interest in
such Pledgor’s property constituting Pledged Collateral, for which the Administrative Agent needed
to have information relating to such changes. The Administrative Agent shall have no duty to
inquire about such changes if any Pledgor does not inform the Administrative Agent of such changes,
the parties acknowledging and agreeing that it would not be feasible or practical for the
Administrative Agent to search for information on such changes if such information is not provided
by any Pledgor.

          SECTION 4.6. Location of Inventory and Equipment. It shall not locate any Equipment or Inventory
other than any location that is listed in the relevant Schedules to the Perfection Certificate,
unless (i) it shall have given the Administrative Agent written notice thereof within thirty (30)
calendar days following such move, clearly describing such new location and providing such other
information in connection therewith as the Administrative Agent may reasonably request and (ii) to
the extent applicable with respect to such new location, such Pledgor shall have complied with
Section 3.4(g); provided that in no event shall any Equipment of any Pledgor
exceeding $1,000,000 in value in the aggregate be moved after the date hereof to any location
outside of the continental United States, unless the Pledgor executes any and all documents,
financing statements, agreements and instruments, and takes all such further actions (including the
filing and recording of financing statements, notarizations, fixture filings, mortgages, deeds of
trust and other documents and the delivery of appropriate opinions of counsel), which the
Administrative Agent may reasonably request, to grant, preserve, protect or perfect the Liens
created by Collateral Documents in such Equipment or the validity or priority of any such Lien, all
at the expense of the Pledgor.

          SECTION 4.7. Due Authorization and Issuance. All of the Pledged Securities issued by a Pledgor or
a Subsidiary of a Pledgor existing on the date hereof have been, and to the extent any such Pledged
Securities are hereafter issued, such Pledged Securities will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable to the extent applicable. There is no
amount or other obligation owing by any Pledgor to any issuer of the Pledged Securities in exchange
for

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or in connection with the issuance of such Pledged Securities or any Pledgor’s status as a
partner or a member of any issuer of such Pledged Securities.

          SECTION 4.8. Consents, etc. In the event that the Administrative Agent desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth in this Agreement and
determines it necessary to obtain any approvals or consents of any Governmental Authority or any
other Person therefor, then, upon the reasonable request of the Administrative Agent, such Pledgor
agrees to use its commercially reasonable efforts to assist and aid the Administrative Agent to
obtain as soon as practicable any necessary approvals or consents for the exercise of any such
remedies, rights and powers.

          SECTION 4.9. Pledged Collateral. All information set forth herein, including the schedules hereto,
and all information contained in any documents, schedules and lists heretofore delivered to any
Secured Party, including the Perfection Certificate and the schedules thereto, in connection with
this Agreement, in each case, relating to the Pledged Collateral, is accurate and complete in all
material respects. The description of the Pledged Collateral on the schedules to the Perfection
Certificate is accurate and complete in all material respects as to Pledged Collateral of the type
required to be described therein.

          SECTION 4.10. Insurance. In the event that the proceeds of any insurance claim are paid to any
Pledgor after the Administrative Agent has exercised its right to foreclose in accordance with the
terms of this Agreement, such proceeds shall be held in trust for the benefit of the Administrative
Agent and immediately after receipt thereof shall be paid to the Administrative Agent for
application in accordance with the Credit Agreement.

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

          SECTION 5.1. Pledge of Additional Securities Collateral. Each Pledgor shall, upon obtaining any
Pledged Securities or Intercompany Notes of any Person, accept the same in trust for the benefit of
the Administrative Agent and promptly (but in any event within five (5) Business Days after receipt
thereof) deliver to the Administrative Agent a pledge amendment, duly executed by such Pledgor, in
substantially the form of Exhibit 2 hereto (each, a “Pledge Amendment”), and the
certificates and other documents required under Section 3.1 and Section 3.2 hereof
in respect of the additional Pledged Securities or Intercompany Notes which are to be pledged
pursuant to this Agreement, and confirming the attachment of the Lien hereby created on and in
respect of such additional Pledged Securities or Intercompany Notes. Each Pledgor hereby
authorizes the Administrative
Agent to attach each Pledge Amendment to this Agreement and agrees that all Pledged Securities
or Intercompany Notes listed on any Pledge Amendment delivered to the Administrative Agent shall
for all purposes hereunder be considered Pledged Collateral.

          SECTION 5.2. Voting Rights; Distributions; etc.

          (a) So long as no Event of Default shall have occurred and be continuing and the
Administrative Agent shall not have delivered the applicable notice under Section 5.2(c):

     (i) Each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Securities Collateral or any part thereof for any
purpose not inconsistent with the terms or purposes hereof, the Credit Agreement or any
other document evidencing the

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Obligations; provided, however, that no
Pledgor shall in any event exercise such rights in any manner which would reasonably be
expected to have a Material Adverse Effect.

     (ii) Each Pledgor shall be entitled to receive and retain, and to utilize free and
clear of the Lien hereof, any and all Distributions, but only if and to the extent made in
accordance with the provisions of the Credit Agreement; provided, however,
that any and all such Distributions consisting of rights or interests in the form of
securities shall be forthwith delivered to the Administrative Agent to hold as Pledged
Collateral and shall, if received by any Pledgor, be received in trust for the benefit of
the Administrative Agent, be segregated from the other property or funds of such Pledgor and
be promptly (but in any event within five (5) Business Days after receipt thereof) delivered
to the Administrative Agent as Pledged Collateral in the same form as so received (with any
necessary endorsement).

          (b) So long as no Event of Default shall have occurred and be continuing, the
Administrative Agent shall be deemed without further action or formality to have granted to each
Pledgor all necessary consents relating to voting rights and shall, if necessary, upon written
request of any Pledgor and at the sole cost and expense of the Pledgors, from time to time execute
and deliver (or cause to be executed and delivered) to such Pledgor all such instruments as such
Pledgor may reasonably request in order to permit such Pledgor to exercise the voting and other
rights which it is entitled to exercise pursuant to Section 5.2(a)(i) hereof and to receive
the Distributions which it is authorized to receive and retain pursuant to Section
5.2(a)(ii) hereof.

          (c) Upon the occurrence and during the continuance of any Event of Default upon notice
from the Administrative Agent to the Pledgors that it is exercising its rights under Section
5.2(c)(i) and/or (ii):

     (i) All rights of each Pledgor to exercise the voting and other consensual rights
it would otherwise be entitled to exercise pursuant to Section 5.2(a)(i) hereof
shall immediately cease, and all such rights shall thereupon become vested in the
Administrative Agent, which shall thereupon have the sole right to exercise such voting and
other consensual rights.

     (ii) All rights of each Pledgor to receive Distributions which it would otherwise
be authorized to receive and retain pursuant to Section 5.2(a)(ii) hereof shall
immediately cease and all such rights shall thereupon become vested in the Administrative
Agent, which shall thereupon have the sole right to receive and hold as Pledged Collateral
such Distributions.

          (d) Each Pledgor shall, at its sole cost and expense, from time to time execute and
deliver to the Administrative Agent appropriate instruments as the Administrative Agent may
reasonably request in order to permit the Administrative Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 5.2(c)(i) hereof and to
receive all Distributions which it may be entitled to receive under Section 5.2(c)(ii)
hereof.

          (e) All Distributions which are received by any Pledgor contrary to the provisions of
Section 5.2(a)(ii) or Section 5.2(c)(ii) hereof shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from other funds of such Pledgor and shall
immediately be paid over to the Administrative Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement).

          SECTION 5.3. Defaults, etc. Each Pledgor hereby represents and warrants that (i) such Pledgor is
not in default in the payment of any portion of any mandatory capital contribution, if any,
required to be made under any agreement to which such Pledgor is a party relating to the Pledged

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Securities pledged by it and such Pledgor is not in violation of any other provisions of any such
agreement to which such Pledgor is a party, or otherwise in default or violation thereunder, (ii)
no Securities Collateral pledged by such Pledgor is subject to any defense, offset or counterclaim,
nor have any of the foregoing been asserted or alleged against such Pledgor by any Person with
respect thereto, and (iii) as of the date hereof, there are no certificates, instruments, documents
or other writings (other than the Organization Documents and certificates representing such Pledged
Securities that have been delivered to the Administrative Agent) which evidence any Pledged
Securities of such Pledgor.

          SECTION 5.4. Certain Agreements of Pledgors As Issuers and Holders of Equity Interests.

          (a) In the case of each Pledgor which is an issuer of Securities Collateral, such Pledgor
agrees to be bound by the terms of this Agreement relating to the Securities Collateral issued by
it and will comply with such terms insofar as such terms are applicable to it.

          (b) In the case of each Pledgor which is a partner, shareholder or member, as the case may
be, in a partnership, limited liability company or other entity, such Pledgor hereby consents to
the extent required by the applicable Organization Document to the pledge by each other Pledgor,
pursuant to the terms hereof, of the Pledged Securities in such partnership, limited liability
company or other entity and, upon the occurrence and during the continuance of an Event of Default,
to the transfer of such Pledged Securities to the Administrative Agent or its nominee and to the
substitution of the Administrative Agent or its nominee as a substituted partner, shareholder or
member in such partnership, limited liability company or other entity with all the rights, powers
and duties of a general partner, limited partner, shareholder or member, as the case may be.

ARTICLE VI

[INTENTIONALLY OMITTED]

ARTICLE VII

CERTAIN PROVISIONS CONCERNING RECEIVABLES

          SECTION 7.1. Maintenance of Records. Each Pledgor shall keep and maintain at its own cost and
expense complete records of each Receivable, in a manner consistent with prudent business practice,
including records of all payments received, all credits granted thereon, all merchandise returned
and all other documentation relating thereto. Each Pledgor shall, at such Pledgor’s sole cost and
expense, upon the Administrative Agent’s demand made at any time after the occurrence and during
the continuance of any Event of Default, deliver all tangible evidence of Receivables, including
all documents evidencing Receivables and any books and records relating thereto to the
Administrative Agent or to its representatives (copies of which evidence and books and records may
be retained by such Pledgor). Upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent may transfer a full and complete copy of any Pledgor’s books,
records, credit information, reports, memoranda and all other writings relating to the Receivables
to and for the use by any person that has acquired or is contemplating acquisition of an interest
in the Receivables or the Administrative Agent’s security interest therein without the consent of
any Pledgor.

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          SECTION 7.2. Legend. Each Pledgor shall legend, at the request of the Administrative Agent made at
any time during the continuance of an Event of Default and in form and manner reasonably
satisfactory to the Administrative Agent, the Receivables and the other books, records and
documents of such Pledgor evidencing or pertaining to the Receivables with an appropriate reference
to the fact that the Receivables have been assigned to the Administrative Agent for the benefit of
the Secured Parties and that the Administrative Agent has a security interest therein.

          SECTION 7.3. Modification of Terms, etc. No Pledgor shall rescind or cancel any obligations
evidenced by any Receivable or modify any term thereof or make any adjustment with respect thereto
except in the ordinary course of business or as permitted by the Credit Agreement, or extend or
renew any such obligations except in the ordinary course of business or as permitted by the Credit
Agreement, or compromise or settle any dispute, claim, suit or legal proceeding relating thereto or
sell any Receivable or interest therein except in the ordinary course of business or as permitted
by the Credit Agreement, without the prior written consent of the Administrative Agent, which shall
not be unreasonably withheld, delayed or conditioned. Each Pledgor shall timely fulfill all
obligations on its part to be fulfilled under or in connection with the Receivables.

          SECTION 7.4. Collection. Each Pledgor shall cause to be collected from the Account Debtor of each
of the Receivables, as and when due in the ordinary course of business and consistent with prudent
business
practice (including Receivables that are delinquent, such Receivables to be collected in
accordance with generally accepted commercial collection procedures), any and all amounts owing
under or on account of such Receivable, and apply forthwith upon receipt thereof all such amounts
as are so collected to the outstanding balance of such Receivable, except that any Pledgor may,
with respect to a Receivable, allow in the ordinary course of business (i) a refund or credit due
as a result of returned or damaged or defective merchandise and (ii) such extensions of time to pay
amounts due in respect of Receivables and such other modifications of payment terms or settlements
in respect of Receivables as shall be commercially reasonable in the circumstances, all in
accordance with such Pledgor’s ordinary course of business consistent with its collection practices
as in effect from time to time. The costs and expenses (including attorneys’ fees) of collection,
in any case, whether incurred by any Pledgor, the Administrative Agent or any Secured Party, shall
be paid by the Pledgors.

          SECTION 7.5. Notice of Business Activity Reports. If the Pledgors have Receivables in respect of
which the account debtor is located in Minnesota, New Jersey, Indiana, or Connecticut the Pledgors
represent and warrant that the Pledgors have filed and shall file all legally-required Notice of
Business Activities Reports and comparable reports with the appropriate government authorities or
has qualified as a foreign corporation to do business in such states.

          SECTION 7.6. Collection of Proceeds of Receivables.

          (a) The Pledgors shall (i) direct all of their account debtors to make all payments on
Receivables of the Pledgors directly to post office boxes (each a “Lock Box” and
collectively the “Lock Boxes”) under the control of a Cash Management Bank, (ii) establish
accounts (each a “Controlled Account” and collectively the “Controlled Accounts”)
in the Pledgors’ names with a Cash Management Bank, subject to Deposit Account Control Agreements,
into which all payments received in the Lock Boxes shall be deposited, and into which the Pledgors
will immediately deposit all payments made for royalties, inventory or services sold or rendered by
the Pledgors and received by the Pledgors in the identical form in which such payments were made,
whether by cash or check, and (iii) cause each Subsidiary and Affiliate, and any other Person
acting for or in concert with the Pledgors that receives any monies, checks, notes, drafts or other
payments relating to or as proceeds of Receivables or other Collateral, to receive and hold such
items in trust for, and as the sole and exclusive property of, the Administrative Agent and,
immediately upon receipt thereof, shall remit the same (or cause the same to be remitted) in

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hand to the Controlled Accounts; provided that, for purposes of administrative
convenience, the Administrative Agent may in its reasonable discretion, permit the Pledgors from
time to time to maintain one or more accounts with one or more financial institutions other than
the Cash Management Bank and with such maximum cash balances as the Administrative Agent deems
appropriate, and for which the Pledgors may, at the discretion of the Administrative Agent, be
permitted to have direct access.

          (b) The Pledgors agree to enter into such Lock Box agreements and Deposit Account Control
Agreements with a Cash Management Bank and the Administrative Agent as the Administrative Agent may
reasonably request. The Pledgors also agree to cause each financial institution other than the
Cash Management Bank with which a Lock Box and/or Controlled Account has been established to, enter
into a Lock Box agreement and/or Deposit Account Control Agreement, as applicable, confirming that
the amounts on deposit in such Lock Box and/or Controlled Account, as applicable, are under the
control of the Administrative Agent, that such financial institution has no right to setoff against
such Lock Box or Controlled Account or against any other account maintained by such financial
institution into which the contents of such Controlled Account are transferred (except as provided
in the Deposit Account Control Agreement, and that upon written notice from the Administrative
Agent, such financial institution shall
wire, or otherwise transfer in immediately available funds in a manner satisfactory to the
Administrative Agent, funds deposited in the Controlled Account on a daily basis as such funds are
collected.

          (c) All checks, drafts, instruments and other items of payment or proceeds of Collateral
delivered to the Administrative Agent in kind shall be endorsed by the Pledgors, to the
Administrative Agent, and, if that endorsement of any such item shall not be made for any reason,
the Administrative Agent is hereby irrevocably authorized to endorse the same on behalf of the
Pledgors. For the purpose of this subsection 7.6(c), each Pledgor irrevocably hereby
makes, constitutes and appoints the Administrative Agent (and all Persons designated by the
Administrative Agent for that purpose) as such Pledgor’s true and lawful attorney and agent-in-fact
(i) to endorse the name of the such Pledgor upon said items of payment and/or proceeds of
Collateral of such Pledgor and upon any chattel paper, document, instrument, invoice or similar
document or agreement relating to any account receivable of such Pledgor or goods pertaining
thereto; (ii) to take control in any manner of any item of payment or proceeds thereof; (iii) to
have access to any lock box or postal box into which any mail of such Pledgor is deposited; and
(iv) open and process all mail addressed to such Pledgor and deposited therein.

          (d) The Administrative Agent (and all Persons designated by the Administrative Agent for
such purpose) may, at any time and from time to time after the occurrence and during the
continuance of an Event of Default, whether before or after notification to any account debtor and
whether before or after the maturity of any of the Obligations, (i) enforce collection of any
Receivables or contract rights of the Pledgors by suit or otherwise; (ii) exercise all of the
rights and remedies of the Pledgors with respect to proceedings brought to collect any Receivables;
(iii) surrender, release or exchange all or any part of any Receivables of the Pledgors, or
compromise or extend or renew for any period (whether or not longer than the original period) any
indebtedness thereunder; (iv) sell or assign any account receivable of the Pledgors upon such
terms, for such amount and at such time or times as the Administrative Agent deems advisable; (v)
prepare, file and sign the names of the Pledgors on any proof of claim in bankruptcy or other
similar document against any account debtor indebted on an account receivable of the Pledgors; and
(vi) do all other acts and things which are necessary, in the Administrative Agent’s discretion, to
fulfill the Obligations of the Pledgors under this Agreement and to allow the Administrative Agent
to collect the Receivables. In addition to any other provision hereof or in any of the other Loan
Documents, the Administrative Agent may at any time on or after the occurrence of an Event of
Default, at the sole expense of the Pledgors, notify any parties obligated on any of the
Receivables of the Pledgors to make payment directly to the Administrative Agent of any amounts due
or to become due thereunder.

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ARTICLE VIII

TRANSFERS

          SECTION 8.1. Transfers of Pledged Collateral. No Pledgor shall sell, convey, assign or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral pledged by it
hereunder except as expressly permitted by the Credit Agreement.

ARTICLE IX

REMEDIES

          SECTION 9.1. Remedies. Upon the occurrence and during the continuance of any Event of Default, the
Administrative Agent may from time to time exercise in respect of the Pledged Collateral, in
addition to the other rights and remedies provided for herein or otherwise available to it, the
following remedies:

     (i) Personally, or by agents or attorneys, immediately take possession of the
Pledged Collateral or any part thereof, from any Pledgor or any other person who then has
possession of any part thereof with or (to the fullest extent permitted by applicable law)
without notice or process of law, and for that purpose may enter upon any Pledgor’s premises
where any of the Pledged Collateral is located, remove such Pledged Collateral, remain
present at such premises to receive copies of all communications and remittances relating to
the Pledged Collateral and use in connection with such removal and possession any and all
services, supplies, aids and other facilities of any Pledgor;

     (ii) Demand, sue for, collect or receive any money or property at any time payable
or receivable in respect of the Pledged Collateral including instructing the obligor or
obligors on any agreement, instrument or other obligation constituting part of the Pledged
Collateral to make any payment required by the terms of such agreement, instrument or other
obligation directly to the Administrative Agent, and in connection with any of the
foregoing, compromise, settle, extend the time for payment and make other modifications with
respect thereto; provided, however, that in the event that any such payments
are made directly to any Pledgor, prior to receipt by any such obligor of such instruction,
such Pledgor shall segregate all amounts received pursuant thereto in trust for the benefit
of the Administrative Agent and shall promptly (but in no event later than one (1) Business
Day after receipt of available funds therefor) pay such amounts to the Administrative Agent;

     (iii) Sell, assign, grant a license to use or otherwise liquidate, or direct any
Pledgor to sell, assign, grant a license to use or otherwise liquidate, any and all
investments made in whole or in part with the Pledged Collateral or any part thereof, and
take possession of the proceeds of any such sale, assignment, license or liquidation;

     (iv) Take possession of the Pledged Collateral or any part thereof, by directing
any Pledgor in writing to deliver the same to the Administrative Agent at any place or
places so designated by the Administrative Agent, in which event such Pledgor shall at its
own expense: (A) forthwith cause the same to be moved to the place or places designated by
the Administrative Agent and therewith delivered to the Administrative Agent, (B) store and
keep any Pledged Collateral so delivered to the Administrative Agent at such place or places
pending further action

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by the Administrative Agent and (C) while the Pledged Collateral
shall be so stored and kept, provide such security and maintenance services as shall be
necessary to protect the same and to preserve and maintain them in good condition. Each
Pledgor’s obligation to deliver the Pledged Collateral as contemplated in this Section
9.1(iv) is of the essence hereof. Upon application to a court of equity having
jurisdiction, the Administrative Agent shall be entitled to a decree requiring specific
performance by any Pledgor of such obligation;

     (v) Withdraw all moneys, instruments, securities and other property in any bank,
financial securities, deposit or other account of any Pledgor constituting Pledged
Collateral for application to the Obligations as provided in Article X hereof;

     (vi) Retain and apply the Distributions to the Obligations as provided in
Article X hereof;

     (vii) Exercise any and all rights as beneficial and legal owner of the Pledged
Collateral, including perfecting assignment of and exercising any and all voting, consensual
and other rights and powers with respect to any Pledged Collateral; and

     (viii) Exercise all the rights and remedies of a secured party on default under the
UCC, and the Administrative Agent may also in its sole discretion, without notice except as
specified in Section 9.2 hereof, sell, assign or grant a license to use the Pledged
Collateral or any part thereof in one or more parcels at public or private sale, at any
exchange, broker’s board or at any of the Administrative Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and at such price or prices and upon such other
terms as the Administrative Agent may deem commercially reasonable. The Administrative
Agent or any other Secured Party or any of their respective Affiliates may be the purchaser,
licensee, assignee or recipient of the Pledged Collateral or any part thereof at any such
sale and shall be entitled, for the purpose of bidding and making settlement or payment of
the purchase price for all or any portion of the Pledged Collateral sold, assigned or
licensed at such sale, to use and apply any of the Obligations owed to such person as a
credit on account of the purchase price of the Pledged Collateral or any part thereof
payable by such person at such sale. Each purchaser, assignee, licensee or recipient at any
such sale shall acquire the property sold, assigned or licensed absolutely free from any
claim or right on the part of any Pledgor, and each Pledgor hereby waives, to the fullest
extent permitted by law, all rights of redemption, stay and/or appraisal which it now has or
may at any time in the future have under any rule of law or statute now existing or
hereafter enacted. The Administrative Agent shall not be obligated to make any sale of the
Pledged Collateral or any part thereof regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Each Pledgor hereby
waives, to the fullest extent permitted by law, any claims against the Administrative Agent
arising by reason of the fact that the price at which the Pledged Collateral or any part
thereof may have been sold, assigned or licensed at such a private sale was less than the
price which might have been obtained at a public sale, even if the Administrative Agent
accepts the first offer received and does not offer such Pledged Collateral to more than one
offeree.

          SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and agrees that, to the extent notice of
sale or other disposition of the Pledged Collateral or any part thereof shall be required by law,
ten (10) days’ prior notice to such Pledgor of the time and place of any public sale or of the time
after which any private sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. To the extent permitted by applicable law, no
notification need be given to any Pledgor if it has signed, after the occurrence and during the
continuance of an Event of

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Default, a statement renouncing or modifying any right to notification
of sale or other intended disposition.

          SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby waives, to the fullest extent permitted by applicable law, notice or
judicial hearing in connection with the Administrative Agent’s taking possession or the
Administrative Agent’s disposition of the Pledged Collateral or any part thereof, including any and
all prior notice and hearing for any prejudgment remedy or remedies and any such right which such
Pledgor would otherwise have under law, and each Pledgor hereby further waives, to the fullest
extent permitted by applicable law: (i) all damages occasioned by such taking of possession, (ii)
all other requirements as to the time, place and terms of sale or other requirements with respect
to the enforcement of the Administrative Agent’s rights hereunder and (iii) all rights of
redemption, appraisal, valuation, stay, extension or moratorium now or hereafter in force under any
applicable law. The Administrative Agent shall not be liable for any incorrect or improper payment
made pursuant to this Article IX in the absence of gross negligence or willful misconduct
on the part of the Administrative Agent. To the extent permitted by applicable law, any sale of,
or the grant of options to purchase, or any other realization upon, any Pledged Collateral shall
operate to divest all right, title, interest, claim and demand, either at law or in equity, of the
applicable Pledgor therein and thereto, and shall be a perpetual bar both at law and in equity
against such Pledgor and against any and all persons claiming or attempting to claim the Pledged
Collateral so sold, optioned or realized upon, or any part thereof, from, through or under such
Pledgor.

          SECTION 9.4. Certain Sales of Pledged Collateral.

          (a) Each Pledgor recognizes that, by reason of certain prohibitions contained in law,
rules, regulations or orders of any Governmental Authority, the Administrative Agent may be
compelled, with respect to any sale of all or any part of the Pledged Collateral, to limit
purchasers to those who meet the requirements of such Governmental Authority. Each Pledgor
acknowledges that any such sales may be at prices and on terms less favorable to the Administrative
Agent than those obtainable through a public sale without such restrictions, and, notwithstanding
such circumstances, agrees that any such restricted sale shall be deemed to have been made in a
commercially reasonable manner and that, except as may be required by applicable law, the
Administrative Agent shall have no obligation to engage in public sales.

          (b) Each Pledgor recognizes that, by reason of certain prohibitions contained in the
Securities Act, and applicable state securities laws, the Administrative Agent may be compelled,
with respect to any sale of all or any part of the Securities Collateral and Investment Property,
to limit purchasers to persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable to the Administrative Agent than those obtainable through a
public sale without such restrictions (including a public offering made pursuant to a registration
statement under the Securities Act), and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable manner and that the
Administrative Agent shall have no obligation to engage in public sales and no obligation to delay
the sale of any Securities Collateral or Investment Property for the period of time necessary to
permit the issuer thereof to register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer would agree to do so.

          (c) Notwithstanding the foregoing, each Pledgor shall, upon the occurrence and during the
continuance of any Event of Default, at the reasonable request of the Administrative Agent, for the
benefit of the Administrative Agent, cause any registration, qualification under or compliance with

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any Federal or state securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of the Pledgors.
Each Pledgor will use
its commercially reasonable efforts to cause such registration to be effected (and be kept
effective) and will use its commercially reasonable efforts to cause such qualification and
compliance to be effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including registration under the
Securities Act (or any similar statute then in effect), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with all other requirements of
any Governmental Authority. Each Pledgor shall use its commercially reasonable efforts to cause
the Administrative Agent to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof, shall furnish to the
Administrative Agent such number of prospectuses, offering circulars or other documents incident
thereto as the Administrative Agent from time to time may request, and shall indemnify and shall
cause the issuer of the Securities Collateral to indemnify the Administrative Agent and all others
participating in the distribution of such Securities Collateral against all claims, losses, damages
and liabilities caused by any untrue statement (or alleged untrue statement) of a material fact
contained therein (or in any related registration statement, notification or the like) or by any
omission (or alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or necessary to make the
statements therein not misleading.

          (d) If the Administrative Agent determines to exercise its right to sell any or all of the
Securities Collateral or Investment Property, upon written request, the applicable Pledgor shall
from time to time furnish to the Administrative Agent all such information as the Administrative
Agent may request in order to determine the number of securities included in the Securities
Collateral or Investment Property which may be sold by the Administrative Agent as exempt
transactions under the Securities Act and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.

          (e) Each Pledgor further agrees that a breach of any of the covenants contained in this
Section 9.4 will cause irreparable injury to the Administrative Agent and the other Secured
Parties, that the Administrative Agent and the other Secured Parties have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant contained in this
Section 9.4 shall be specifically enforceable against such Pledgor, and to the fullest
extent permitted by applicable law such Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a defense that no Event of
Default has occurred and is continuing or that all of the Obligations shall have been paid in full.

          SECTION 9.5. No Waiver; Cumulative Remedies.

          (a) No failure on the part of the Administrative Agent to exercise, no course of dealing
with respect to, and no delay on the part of the Administrative Agent in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power, privilege or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power, privilege or remedy; nor shall the
Administrative Agent be required to look first to, enforce or exhaust any other security,
collateral or guaranties. All rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies provided by law or otherwise available.

          (b) In the event that the Administrative Agent shall have instituted any proceeding to
enforce any right, power, privilege or remedy under this Agreement or any other Loan Document by
foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Administrative Agent, then
and in every such case,

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the Pledgors, the Administrative Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged Collateral, and all
rights, remedies, privileges and powers of the Administrative Agent and the other Secured Parties
shall continue as if no such proceeding had been instituted.

ARTICLE X

APPLICATION OF PROCEEDS

          SECTION 10.1. Application of Proceeds. The proceeds received by the Administrative Agent in respect
of any sale of, collection from or other realization upon all or any part of the Pledged Collateral
pursuant to the exercise by the Administrative Agent of its remedies shall be applied, together
with any other sums then held by the Administrative Agent pursuant to this Agreement, in accordance
with the Credit Agreement.

ARTICLE XI

MISCELLANEOUS

          SECTION 11.1. Concerning Administrative Agent.

          (a) The Administrative Agent has been appointed as Administrative Agent pursuant to the
Credit Agreement. The actions of the Administrative Agent hereunder are subject to the provisions
of the Credit Agreement. The Administrative Agent shall have the right hereunder to make demands,
to give notices, to exercise or refrain from exercising any rights, and to take or refrain from
taking action (including the release or substitution of the Pledged Collateral), in accordance with
this Agreement and the Credit Agreement. The Administrative Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be liable for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it in good faith. The Administrative Agent may
resign and a successor Administrative Agent may be appointed in the manner provided in the Credit
Agreement. Upon the acceptance of any appointment as the Administrative Agent by a successor
Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Administrative Agent
under this Agreement, and the retiring Administrative Agent shall thereupon be discharged from its
duties and obligations under this Agreement (if not already discharged therefrom as provided in
Section 9.06 of the Credit Agreement). After any retiring Administrative Agent’s resignation, the
provisions hereof shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was the Administrative Agent.

          (b) The Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if such Pledged Collateral is
accorded treatment substantially equivalent to that which the Administrative Agent, in its
individual capacity, accords its own property consisting of similar instruments or interests, it
being understood that neither the Administrative Agent nor any of the Secured Parties shall have
responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral, whether or not the
Administrative Agent or any other
Secured Party has or is deemed to have knowledge of such matters or (ii) taking any necessary
steps to preserve rights against any person with respect to any Pledged Collateral.

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          (c) The Administrative Agent shall be entitled to rely upon any written notice, statement,
certificate, order or other document or any telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person, and, with respect to all
matters pertaining to this Agreement and its duties hereunder, upon advice of counsel selected by
it.

          (d) If any item of Pledged Collateral also constitutes collateral granted to the
Administrative Agent under any other deed of trust, mortgage, security agreement, pledge or
instrument of any type, in the event of any conflict between the provisions hereof and the
provisions of such other deed of trust, mortgage, security agreement, pledge or instrument of any
type in respect of such collateral, the Administrative Agent, in its sole discretion, shall select
which provision or provisions shall control.

          SECTION 11.2. Administrative Agent May Perform; Administrative Agent Appointed Attorney-in-Fact. If
any Pledgor shall fail to perform any covenants contained in this Agreement (including such
Pledgor’s covenants to (i) pay the premiums in respect of all required insurance policies
hereunder, (ii) pay and discharge any taxes, assessments and special assessments, levies, fees and
governmental charges imposed upon or assessed against, and landlords’, carriers’, mechanics’,
workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other
claims arising by operation of law against, all or any portion of the Pledged Collateral, (iii)
make repairs, (iv) discharge Liens or (v) pay or perform any obligations of such Pledgor under any
Pledged Collateral) or if any representation or warranty on the part of any Pledgor contained
herein shall be breached, the Administrative Agent may (but shall not be obligated to) do the same
or cause it to be done or remedy any such breach, and may expend funds for such purpose;
provided, however, that the Administrative Agent shall in no event be bound to
inquire into the validity of any tax, Lien, imposition or other obligation which such Pledgor fails
to pay or perform as and when required hereby and which such Pledgor does not contest in accordance
with the provisions, if any, of the Credit Agreement. Any and all reasonable amounts so expended
by the Administrative Agent shall be paid by the Pledgors in accordance with the provisions of
Section 10.04 of the Credit Agreement. Neither the provisions of this Section 11.2 nor any
action taken by the Administrative Agent pursuant to the provisions of this Section 11.2
shall prevent any such failure to observe any covenant contained in this Agreement nor any breach
of representation or warranty from constituting an Event of Default. Each Pledgor hereby appoints
the Administrative Agent its attorney-in-fact, with full power and authority in the place and stead
of such Pledgor and in the name of such Pledgor, or otherwise, from time to time in the
Administrative Agent’s discretion to take any action and to execute any instrument consistent with
the terms of the Credit Agreement, this Agreement and the other Collateral Documents which the
Administrative Agent may deem necessary or advisable to accomplish the purposes hereof (but the
Administrative Agent shall not be obligated to and shall have no liability to such Pledgor or any
third party for failure to so do or take action). The foregoing grant of authority is a power of
attorney coupled with an interest and such appointment shall be irrevocable for the term hereof.
Each Pledgor hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.

          SECTION 11.3. Continuing Security Interest; Assignment. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) be binding upon the Pledgors, their
respective successors and assigns and (ii) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Administrative Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No other
persons (including any other creditor of any Pledgor) shall have any interest herein or any
right or benefit with respect hereto. Without limiting the generality of the foregoing clause
(ii), any Secured Party may assign or otherwise transfer any indebtedness held by it secured by
this Agreement to any other person to the extent permitted by the Credit Agreement, and such other
person shall thereupon become vested with all the benefits in respect thereof granted to such
Secured Party, herein or otherwise, subject however, to the provisions of the

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Credit Agreement and, in the case of a Secured Party that is a party to a Swap Agreement or
Cash Management Services, such Swap Agreement or Cash Management Services.

          SECTION 11.4. Termination; Release (a) When all the Obligations have been paid in
full (other than contingent indemnification obligations) and the Commitments of the Lenders and the
LC Issuer under the Credit Agreement shall have expired or been sooner terminated, this Agreement
shall terminate and the Pledged Collateral shall be released from the Lien of this Agreement, all
without further delivery of any instrument or further action by any party, and all rights in the
Collateral shall revert to the applicable Pledgor. Upon such release, the Administrative Agent
shall, upon the request and at the sole cost and expense of the Pledgors, assign, transfer and
deliver to Pledgor, against receipt and without recourse to or warranty by the Administrative Agent
except as to the fact that the Administrative Agent has not encumbered the released assets, such of
the Pledged Collateral or any part thereof to be released (in the case of a release) as may be in
possession of the Administrative Agent and as shall not have been sold or otherwise applied
pursuant to the terms hereof, and, with respect to any other Pledged Collateral, proper documents
and instruments (including UCC-3 termination financing statements or releases) acknowledging the
termination hereof or the release of such Pledged Collateral, as the case may be.

          (b) If any of the Pledged Collateral is sold, transferred or otherwise disposed of by any
Pledgor in a transaction permitted by the Credit Agreement (other than any sale, transfer or
disposition to another Pledgor), then the Lien created pursuant to this Agreement in such Pledged
Collateral shall be released, and the Administrative Agent, at the request and sole expense of such
Pledgor, shall execute and deliver to such Pledgor all releases or other documents reasonably
necessary or desirable for the release of such Pledged Collateral from the security interests
created hereby; provided that the Pledgors shall provide to the Administrative Agent
evidence of such transaction’s compliance with the Credit Agreement as the Administrative Agent
shall reasonably request.

          SECTION 11.5. Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any departure by any Pledgor
therefrom, shall be effective unless the same shall be made in accordance with the terms of the
Credit Agreement and unless in writing and signed by the Administrative Agent. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision hereof in each case
shall be effective only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this Agreement or any other document
evidencing the Obligations, no notice to or demand on any Pledgor in any case shall entitle any
Pledgor to any other or further notice or demand in similar or other circumstances.

          SECTION 11.6. Notices. Unless otherwise provided herein or in the Credit Agreement,
any notice or other communication herein required or permitted to be given shall be given in the
manner and become effective as set forth in the Credit Agreement, as to any Pledgor, addressed to
it at the address of the Borrower Representative set forth in the Credit Agreement and as to the
Administrative Agent, addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written notice to the other
party complying as to delivery with the terms of this Section 11.6.

          SECTION 11.7. Governing Law, Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial. Sections 10.14 and 10.15 of the Credit Agreement are incorporated herein, mutatis
mutandis, as if a part hereof.

          SECTION 11.8. Severability of Provisions. Any provision hereof which is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of

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such invalidity, illegality or unenforceability without invalidating the remaining
provisions hereof or affecting the validity, legality or enforceability of such provision in any
other jurisdiction.

          SECTION 11.9. Execution in Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute one and the same
agreement.

          SECTION 11.10. Business Days. In the event any time period or any date provided in
this Agreement ends or falls on a day other than a Business Day, then such time period shall be
deemed to end and such date shall be deemed to fall on the next succeeding Business Day, and
performance herein may be made on such Business Day, with the same force and effect as if made on
such other day.

          SECTION 11.11. No Credit for Payment of Taxes or Imposition. Such Pledgor shall not
be entitled to any credit against the principal, premium, if any, or interest payable under the
Credit Agreement, and such Pledgor shall not be entitled to any credit against any other sums which
may become payable under the terms thereof or hereof, by reason of the payment of any Taxes on the
Pledged Collateral or any part thereof.

          SECTION 11.12. No Claims Against Administrative Agent. Nothing contained in this
Agreement shall constitute any consent or request by the Administrative Agent, express or implied,
for the performance of any labor or services or the furnishing of any materials or other property
in respect of the Pledged Collateral or any part thereof, nor as giving any Pledgor any right,
power or authority to contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit the making of any
claim against the Administrative Agent in respect thereof or any claim that any Lien based on the
performance of such labor or services or the furnishing of any such materials or other property is
prior to the Lien hereof.

          SECTION 11.13. No Release. Nothing set forth in this Agreement or any other Loan
Document, nor the exercise by the Administrative Agent of any of the rights or remedies hereunder,
shall relieve any Pledgor from the performance of any term, covenant, condition or agreement on
such Pledgor’s part to be performed or observed under or in respect of any of the Pledged
Collateral or from any liability to any Person under or
in respect of any of the Pledged Collateral or shall impose any obligation on the
Administrative Agent or any other Secured Party to perform or observe any such term, covenant,
condition or agreement on such Pledgor’s part to be so performed or observed or shall impose any
liability on the Administrative Agent or any other Secured Party for any act or omission on the
part of such Pledgor relating thereto or for any breach of any representation or warranty on the
part of such Pledgor contained in this Agreement, the Credit Agreement or the other Loan Documents,
or under or in respect of the Pledged Collateral or made in connection herewith or therewith.
Anything herein to the contrary notwithstanding, neither the Administrative Agent nor any other
Secured Party shall have any obligation or liability under any contracts, agreements and other
documents included in the Pledged Collateral by reason of this Agreement, nor shall the
Administrative Agent or any other Secured Party be obligated to perform any of the obligations or
duties of any Pledgor thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Pledged Collateral hereunder. The obligations of each
Pledgor contained in this Section 11.13 shall survive the termination hereof and the
discharge of such Pledgor’s other obligations under this Agreement, the Credit Agreement and the
other Loan Documents.

          SECTION 11.14. Obligations Absolute. To the fullest extent permitted by applicable
law, all obligations of each Pledgor hereunder shall be absolute and unconditional irrespective of:

- 29 -

 

     (i) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any other Pledgor;

     (ii) any lack of validity or enforceability of the Credit Agreement, any Swap Agreement
or Cash Management Services or any other Loan Document, or any other agreement or instrument
relating thereto;

     (iii) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any Swap Agreement, Cash Management Services or any
other Loan Document or any other agreement or instrument relating thereto;

     (iv) any pledge, exchange, release or non-perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any guarantee, for all or
any of the Obligations;

     (v) any exercise, non-exercise or waiver of any right, remedy, power or privilege under
or in respect hereof, the Credit Agreement, any Swap Agreement, Cash Management Services or
any other Loan Document except as specifically set forth in a waiver granted pursuant to the
provisions of Section 11.5 hereof; or

     (vi) any other circumstances which might otherwise constitute a defense available to,
or a discharge of, any Pledgor other than the payment in full of all Obligations.

          SECTION 11.15. Effect of this Agreement. Sections 10.19 and 11.02 of the Credit
Agreement are incorporated herein by reference mutatis mutandis, as if a part hereof.

[Signature Pages to Follow]

- 30 -

 

     IN WITNESS WHEREOF, each Pledgor and the Administrative Agent have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date first above written.

	 	 	 	 	 
	 	

PLEDGORS:

SMITH & WESSON HOLDING CORPORATION

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	SMITH & WESSON CORP.

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	THOMPSON/CENTER ARMS COMPANY, INC.

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	UNIVERSAL SAFETY RESPONSE, INC.

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	

FOX RIDGE OUTFITTERS, INC.

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 

[Signature Page to Security Agreement]

 

 

	 	 	 	 	 
	 	

BEAR LAKE HOLDINGS, INC.

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	K.W. THOMPSON TOOL COMPANY,
INC.

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	O.L. DEVELOPMENT, INC.

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	THOMPSON CENTER HOLDING
CORPORATION

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	SMITH & WESSON DISTRIBUTING, INC.

 	 
	 	By:  	/s/ John R. Dineen
 	 
	 	 	Name:  	John R. Dineen 	 
	 	 	Title:  	Interim Chief Financial Officer 	 

[Signature Page to Security Agreement]

 

 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:

TD BANK, NA.,

as Administrative Agent

 	 
	 	By:  	/s/ Maria P. Goncalves 	 
	 	 	Name: 	 Maria P. Goncalves 	 
	 	 	Title: 	Authorized Signatory 	 

[Signature Page to Security Agreement]

 

 

EXHIBIT 1

[Form of]

ISSUER’S ACKNOWLEDGMENT

     The undersigned hereby (i) acknowledges receipt of the Amended and Restated Pledge and
Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”; capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Security Agreement), dated as of ________, 2010, made by
and among SMITH & WESSON HOLDING CORPORATION, a Nevada corporation, SMITH & WESSON CORP., a
Delaware corporation, THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire corporation, THOMPSON
CENTER HOLDING CORPORATION, a Delaware corporation, UNIVERSAL SAFETY RESPONSE, INC., a Delaware
corporation, FOX RIDGE OUTFITTERS, INC., a New Hampshire corporation, K.W. THOMPSON TOOL COMPANY,
INC., a New Hampshire corporation, O.L. DEVELOPMENT, INC., a New Hampshire corporation, BEAR LAKE
HOLDINGS, INC., a Delaware corporation and SMITH AND WESSON DISTRIBUTING, INC., a Delaware
corporation (collectively, “Pledgors”; and each individually, a “Pledgor”), and TD
BANK, N.A., as administrative agent (in such capacity and together with any successors in such
capacity, the “Administrative Agent”), (ii) agrees promptly to note on its books the
security interests granted to the Administrative Agent and confirmed under the Security Agreement,
(iii) agrees that it will comply with instructions of the Administrative Agent with respect to the
applicable Securities Collateral without further consent by the applicable Pledgor, (iv) agrees to
notify the Administrative Agent upon obtaining knowledge of any interest in favor of any Person in
the applicable Securities Collateral that is adverse to the interest of the Administrative Agent
therein and (v) waives any right or requirement at any time hereafter to receive a copy of the
Security Agreement in connection with the registration of any Securities Collateral thereunder in
the name of the Administrative Agent or its nominee or the exercise of voting rights by the
Administrative Agent or its nominee.

	 	 	 	 	 
	 	[        
            
            
            
       ]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

EXHIBIT 2

[Form of]

PLEDGE AMENDMENT

     This Pledge Amendment, dated as of [     
                        ], is delivered pursuant to
Section 5.1 of the Amended and Restated Pledge and Security Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the “Security Agreement”; capitalized
terms used but not otherwise defined herein shall have the meanings assigned to such terms in the
Security Agreement), dated as of ________, 2010, made by and among SMITH & WESSON HOLDING
CORPORATION, a Nevada corporation, SMITH & WESSON CORP., a Delaware corporation, THOMPSON/CENTER
ARMS COMPANY, INC., a New Hampshire corporation, THOMPSON CENTER HOLDING CORPORATION, a Delaware
corporation, UNIVERSAL SAFETY RESPONSE, INC., a Delaware corporation, FOX RIDGE OUTFITTERS, INC., a
New Hampshire corporation, K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire corporation, O.L.
DEVELOPMENT, INC., a New Hampshire corporation, BEAR LAKE HOLDINGS, INC., a Delaware corporation
and SMITH AND WESSON DISTRIBUTING, INC., a Delaware corporation (collectively, “Pledgors”;
and each individually, a “Pledgor”), and TD BANK, N.A., as administrative agent (in such
capacity and together with any successors in such capacity, the “Administrative Agent”).
The undersigned hereby agrees that this Pledge Amendment may be attached to the Security Agreement
and that the Pledged Securities and/or Intercompany Notes listed on this Pledge Amendment shall be
deemed to be and shall become part of the Pledged Collateral and shall secure all Obligations.

PLEDGED SECURITIES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	PERCENTAGE OF	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NUMBER	 	 	ALL ISSUED	 
	 	 	 	 	CLASS	 	 	 	 	 	 	 	 	 	 	OF	 	 	CAPITAL	 
	 	 	 	 	OF STOCK	 	 	 	 	 	 	 	 	 	 	SHARES	 	 	OR OTHER EQUITY	 
	 	 	 	 	OR	 	 	PAR	 	 	CERTIFICATE	 	 	OR	 	 	INTERESTS OF	 
	ISSUER	 	 	INTERESTS	 	 	VALUE	 	 	NO(S).	 	 	INTERESTS	 	 	ISSUER	 

 

 

INTERCOMPANY NOTES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL	 	 	DATE OF	 	 	INTEREST	 	 	MATURITY	 
	ISSUER	 	AMOUNT	 	 	ISSUANCE	 	 	RATE	 	 	DATE	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 
	 	[        
            
            
            
       ],

as Pledgor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	AGREED TO AND ACCEPTED:

TD BANK, N.A.,

as Administrative Agent

 	 
	 	By:  	 	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

EXHIBIT 3

[Form of]

JOINDER AGREEMENT

[Name of New Pledgor]

[Address of New Pledgor]

[Date]

               
                        
                       
                  

               
                        
                       
                  

               
                        
                       
                  

               
                        
                       
                  

Ladies and Gentlemen:

          Reference is made to the Amended and Restated Pledge and Security Agreement (as amended,
restated, supplemented or otherwise modified from time to time, the “Security Agreement”;
capitalized terms used but not otherwise defined herein shall have the meanings assigned to such
terms in the Security Agreement), dated as of ________, 2010, made by and among SMITH & WESSON
HOLDING CORPORATION, a Nevada corporation, SMITH & WESSON CORP., a Delaware corporation,
THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire corporation, THOMPSON CENTER HOLDING
CORPORATION, a Delaware corporation, UNIVERSAL SAFETY RESPONSE, INC., a Delaware corporation, FOX
RIDGE OUTFITTERS, INC., a New Hampshire corporation, K.W. THOMPSON TOOL COMPANY, INC., a New
Hampshire corporation, O.L. DEVELOPMENT, INC., a New Hampshire corporation, BEAR LAKE HOLDINGS,
INC., a Delaware corporation, and SMITH AND WESSON DISTRIBUTING, INC., a Delaware corporation
(collectively, “Pledgors”; and each individually, a “Pledgor”), and TD BANK, N.A.,
as administrative agent (in such capacity and together with any successors in such capacity, the
“Administrative Agent”).

          This Joinder Agreement supplements the Security Agreement and is delivered by the undersigned,
[         
          
           ] (the “New Pledgor”), pursuant to Section 3.5 of the Security
Agreement. The New Pledgor hereby agrees to be bound as a Pledgor party to the Security Agreement
by all of the terms, covenants and conditions set forth in the Security Agreement to the same
extent that it would have been bound if it had been a signatory to the Security Agreement on the
execution date of the Security Agreement. Without limiting the generality of the foregoing, the
New Pledgor hereby grants and pledges to the Administrative Agent, as collateral security for the
full, prompt and complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations, a Lien on and security interest in, all of its
right, title and interest in, to and under the Pledged Collateral and expressly assumes all
obligations and liabilities of a Pledgor thereunder. The New Pledgor hereby makes each of the
representations and warranties and agrees to each of the covenants applicable to the Pledgors
contained in the Security Agreement.

          Annexed hereto are supplements to the schedules to the Security Agreement and the Credit
Agreement dated as of ________, 2010 (the “Credit Agreement”) among the Pledgors, as

 

 

borrowers, the lenders party thereto, the LC Issuer and the Administrative Agent, as
applicable, with respect to the New Pledgor. Such supplements shall be deemed to be part of the
Security Agreement or the Credit Agreement, as applicable.

          This Joinder Agreement and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.

          THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

[Signature Pages to Follow]

 

 

          IN WITNESS WHEREOF, the New Pledgor has caused this Joinder Agreement to be executed and
delivered by its duly authorized officer as of the date first above written.

	 	 	 	 	 
	 	[NEW PLEDGOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

AGREED TO AND ACCEPTED:

TD BANK, N.A.,

as Administrative Agent

	 	 	 	 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

[Schedules to be attached]

 

 

EXHIBIT 4

PERFECTION AGREEMENT

[See attached]

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