Document:

Exhibit 10.1

 

AMENDMENT NO. 2 TO CREDIT
AGREEMENT

 

THIS AMENDMENT NO. 2 TO
CREDIT AND GUARANTY AGREEMENT (this “Amendment”), dated as of April 16,
2010, is made and entered into among DOUGLAS DYNAMICS, L.L.C., a Delaware
limited liability company (the “Borrower”), and each of the Lenders (as hereinafter defined) party hereto.

 

RECITALS

 

A.            The Borrower and the Lenders party hereto are parties to
that certain Credit and Guaranty Agreement dated as of May 21, 2007 (as
amended by Amendment No. 1 to Credit and Guaranty Agreement, dated as of December 19,
2008 among the Borrower and each of the Lenders party thereto, the “Credit
Agreement”) among the Borrower, Credit Suisse AG, Cayman Islands Branch, as
Administrative Agent (in such capacity, the “Administrative Agent”) on
behalf of the Lenders, each lender from time to time party thereto (the “Lenders”)
and each of the other banks, financial institutions and other entities from
time to time party thereto.

 

B.            The Borrower has requested that the Lenders agree, subject
to the conditions and on the terms set forth in this Amendment, to amend
certain provisions of the Credit Agreement as set forth herein.

 

C.            The Lenders are willing to amend the Credit Agreement,
subject to the conditions and on the terms set forth below.

 

AGREEMENT

 

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and each of the Lenders party hereto agree as
follows:

 

1.             Definitions.           Except as otherwise expressly
provided herein, capitalized terms used in this Amendment shall have the
meanings given in the Amended Credit Agreement (as defined below), and the rules of
interpretation set forth in the Amended Credit Agreement shall apply to this
Amendment.  In addition:

 

 

“Qualifying IPO” means the consummation of the
first underwritten public offering of the Capital Stock (other than
Disqualified Capital Stock) of Holdings following the Closing Date pursuant to
a registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act.

 

“Qualifying IPO Payment” means, concurrent with
the closing of a Qualifying IPO, the one-time payment to Sponsor in connection
with the termination of the Management Services Agreement in an aggregate amount
not to exceed $6,000,000.

 

“Qualifying Preferred Stock Redemption” means,
concurrent with the closing of a Qualifying IPO, the payment of $1,000 to
Aurora Equity Partners II L.P. and $1,000 to Ares Limited Partnership in
respect of the redemption of the one share of Series B Preferred Stock and
Series C Preferred Stock held by Aurora Equity Partners II L.P. and the
Ares Limited Partnership, respectively.

 

“Qualifying Senior Notes Redemption” means,
concurrent with the closing of a Qualifying IPO, the Borrower and DD Finance (i) have
given irrevocable and unconditional notice of redemption for all of the
outstanding Senior Notes, (ii) have timely and irrevocably deposited or
caused to be deposited with the trustee under the Senior Notes Indenture
proceeds of a Qualifying IPO, proceeds of Additional Term Loans, Cash and/or
Proceeds of Revolving Loans (as defined in the Revolving Credit Facility)
sufficient to pay and discharge the entire indebtedness (including all
principal, premium, if any, and accrued interest) on all outstanding Senior
Notes and (iii) have satisfied all other conditions precedent to the
discharge of the Senior Notes Indenture set forth in Section 8.8 of the
Senior Notes Indenture.

 

2.             Consent
and Agreement.  Notwithstanding
anything to the contrary in the Credit Documents, the Lenders hereby consent to
(i) the redemption of the Senior Notes by the Borrower pursuant to a
Qualifying Senior Notes Redemption, (ii) the payment of the Qualifying IPO
Payment and (iii) the redemption by Holdings of all preferred stock of
Holdings pursuant to a Qualifying Preferred Stock Redemption.  The Borrower hereby agrees to consummate a
Qualifying Senior Notes Redemption concurrently with the consummation of a
Qualifying IPO.

 

3.             Amendment.  Concurrently with the consummation of a
Qualifying IPO, the terms and provisions of the Credit Agreement are hereby
amended by replacing such terms and provisions in their entirety with the terms
and provisions set forth in the Credit Agreement attached hereto as Exhibit A
(the “Amended Credit Agreement”).

 

4.             Representations and
Warranties.  To induce
the Lenders to agree to this Amendment, the Borrower represents to the
Administrative Agent and the Lenders that as of the date hereof:

 

(a)           the
Borrower has all power and authority to enter into this Amendment and to carry
out the transactions contemplated by, and to perform its obligations under or
in respect of, this Amendment;

 

(b)           the
execution and delivery of this Amendment and the performance of the obligations
of the Borrower hereunder have been duly authorized by all necessary action on
the part of the Borrower;

 

(c)           the
execution and delivery of this Amendment by the Borrower, and the performance
of the obligations of the Borrower hereunder do not and will not conflict with
or violate (i) any provision of the articles of incorporation or bylaws
(or similar constituent documents) of the Borrower, (ii) any applicable
provision of any material law, statute, rule, regulation, order, writ,
injunction or decree of any court or Governmental Authority or (iii) any
indenture, agreement or instrument to which the Borrower is a party or by which
the Borrower or any property of the Borrower, is bound, and do not and will not
require any consent or approval of any Person that has not been obtained;

 

2

 

(d)           this
Amendment has been duly executed and delivered by the Borrower and the Credit
Agreement and the other Credit Documents, as modified by this Amendment, are
the legal, valid and binding obligations of the Borrower, enforceable in
accordance with their 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);

 

(e)           no event
has occurred and is continuing or will result from the execution and delivery
of this Amendment or the consummation of a Qualifying IPO, the Qualifying IPO
Payment, the Qualifying Senior Notes Redemption and/or the Qualifying Preferred
Stock Redemption (in each case, after giving effect to this Amendment) that
would constitute a Default or an Event of Default;

 

(f)            since December 31,
2006, no event has occurred that has resulted, or could reasonably be expected
to result, in a Material Adverse Effect;

 

(g)           each of
the representations and warranties made by the Borrower in or pursuant to the
Credit Documents are true and correct in all material respects on and as of the
date this representation is being made, except for representations and
warranties expressly stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date;

 

(h)           the
Borrower has obtained $40 million in Additional Term Loan Commitments; and

 

(i)            after
giving effect to (i) a Qualifying IPO, (ii) the redemption of the
Senior Notes by the Borrower pursuant to the Qualifying Senior Notes
Redemption, (iii) the payment of the Qualifying IPO Payment, (iv) the
redemption by Holdings of all preferred stock of Holdings pursuant to the
Qualifying Preferred Stock Redemption and (v) the incurrence of $40
million aggregate principal amount of Additional Term Loan Commitments, the
aggregate amount of (1) Cash of the Borrower in Deposit Accounts subject
to a Blocked Account Agreement and (2) Excess Availability (as defined in
the Revolving Credit Facility) shall be at least $15,000,000; provided, that
Excess Availability will be calculated without giving effect to any Cash.

 

Each
Lender party to this Amendment represents and warrants to each Agent and each
Lender that it has made its own independent investigation of the terms of the
Credit Agreement and the Amended Credit Agreement and the facts and
circumstances surrounding this Amendment, and has not relied in any way on any
statement, advice or recommendation of any Agent or Lender in connection
herewith.  No Agent shall have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation on behalf of Lenders or to provide any Lender with any
information, advice or recommendation with respect thereto, whether coming into
its possession before the execution of this Amendment or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders relating
to any of the foregoing.

 

5.             Effectiveness of Amendments.  This Amendment (other than Section 6
hereof which shall be effective as set forth in such Section) shall be
effective as of the first date (the “Second Amendment Effective Date”)
on which all of the following conditions precedent have been satisfied:

 

(a)           The
Administrative Agent shall have received a counterpart signature page of
this Amendment duly executed by each of the Credit Parties and the Requisite
Lenders;

 

3

 

(b)           The
Administrative Agent shall have received a certificate signed by the chief
financial officer of the Borrower dated the Second Amendment Effective Date,
certifying (A) that the representations and warranties contained in Section 4
of this Amendment are true and correct as of the Second Amendment Effective
Date and (B) that no event shall have occurred and be continuing or would
result from the consummation of a Qualifying IPO, the Qualifying Senior Notes
Redemption, the Qualifying Preferred Stock Redemption and/or the Qualifying IPO
Payment (in each case, after giving effect to this Amendment) that would
constitute a Default or an Event of Default;

 

(c)           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), in connection with this Amendment (or shall
have made arrangements for the payment thereof satisfactory to the
Administrative Agent);

 

(d)           a
Qualifying IPO shall have occurred;

 

(e)           Borrower
shall have delivered or cause to be delivered any legal opinions or other
documents requested by Administrative Agent connection with the making of the
Additional Term Loans;

 

(f)            Each
Credit Party shall have delivered a solvency certificate in form and substance
satisfactory to the Administrative Agent; and

 

(g)           Borrower
shall pay, to each Lender executing this Amendment on or before April 16,
2010 by 12:00 p.m. New York City Time, an amendment fee equal to 0.25% of
such Lender’s Term Loan Exposure (before giving effect to the making of any
Additional Term Loans), which amendment fee shall be payable concurrently with
the consummation of the Qualifying IPO.

 

6.             Delivery of Financial
Statements. 
Notwithstanding the provisions set forth in Section 5.1(c) of
the Credit Agreement to the contrary, the financial statements of Holdings and
its Subsidiaries for the Fiscal Year ended December 31, 2009 that were
delivered to the Administrative Agent prior to the date hereof shall be deemed
to satisfy the requirements of Section 5.1(c) that such financial
statements be of the Company and its Subsidiaries solely with respect to the
Fiscal Year ended December 31, 2009. 
Notwithstanding the provisions set forth in Section 5.1(b) of
the Credit Agreement requiring delivery of certain financial statements of the
Company and its Subsidiaries, delivery of comparable financial statements of
Holdings and its Subsidiaries shall be deemed to satisfy such requirement
solely with respect to the Fiscal Quarters ending March 31, 2010 and June 30,
2010.  Notwithstanding the provisions of Section 5
of this Amendment, the provisions of this Section 6 shall be effective
immediately upon receipt by Administrative Agent of a counterpart signature page of
this Amendment duly executed by each of the Credit Parties and the Requisite
Lenders.

 

7.             Miscellaneous.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).  This Amendment may be executed in one or more
duplicate counterparts and when signed by all of the parties listed below shall
constitute a single binding agreement. 
Except for the amendments set forth in Section 3 hereof and the
consent set forth in Section 2 hereof, all of the provisions of the Credit
Agreement and the other Credit Documents shall remain in full force and
effect.  The foregoing amendments shall
be strictly construed in accordance with the express terms thereof.  Except with respect to the matters
specifically waived or amended thereby, Section 2 and 3 above shall not
operate as a waiver of any right, remedy, power or privilege of any Lender or
the Administrative Agent under the Credit Agreement or any other Credit
Document or of any other term or condition of the Credit Agreement or any other
Credit Document.  This Amendment shall be
deemed a “Credit Document” as defined in the Credit Agreement.  Sections 10.15 and 10.16 of the Credit
Agreement shall apply to this

 

4

 

Amendment
and all past and future amendments to the Credit Agreement and other Credit
Documents as if expressly set forth herein or therein.

 

8.             Additional
Term Loans.  Concurrent with
the occurrence of the Second Amendment Effective Date, the Persons party to a
Term Loan Joinder Agreement as lenders (each an “Additional Term Loan Lender”)
shall make Term Loans (the “Additional Term Loans”) to the Borrower in an
amount equal to the amount set forth in such Additional Term Loan Lender’s Term
Loan Joinder Agreement (the “Additional Term Loan Commitments”); provided, that
such Additional Term Loans shall be made with 1% of original issue discount,
such that the amount funded on the Second Amendment Effective Date by each
Lender in respect of its Additional Term Loans shall be 99% of its Additional
Term Loan Commitment.  The aggregate
amount of the Additional Term Loan Commitments is $40,000,000.  Such Additional Term Loan Commitments shall
be effected pursuant to one or more Term Loan Joinder Agreements executed and
delivered by Borrower, each Additional Term Loan Lender and Administrative
Agent, and each of which shall be recorded in the Register and shall be subject
to the requirements set forth in Section 2.19(c) of the Amended
Credit Agreement.  The amount of each
Additional Term Loan owing to each Additional Term Loan Lender as of the Second
Amendment Effective Date (before giving effect to any subsequent repayments)
shall be an amount equal to 100% of such Additional Term Loan Lender’s
Additional Term Loan Commitment, irrespective that the amount funded on the
Second Amendment Effective Date is 99% of such Additional Term Loan
Commitment.  The terms of the Additional
Term Loan Commitments shall be as set forth in the Amended Credit Agreement.

 

9.             Acknowledgement
and Consent.

 

Each Guarantor has
read this Amendment and consents to the terms hereof and further hereby
confirms and agrees that, notwithstanding the effectiveness of this Amendment,
the obligations of such Guarantor under, and the Liens granted by such
Guarantor as collateral security for the indebtedness, obligations and
liabilities evidenced by the Credit Agreement and the other Credit Documents
pursuant to, each of the Credit
Documents to which such Guarantor is a party shall not be impaired and
each of the Credit Documents to
which such Guarantor is a party is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.  Each of Holdings, Borrower and the Guarantor
Subsidiaries hereby acknowledges and agrees that the Secured Obligations under,
and as defined in, the Term Pledge and Security Agreement dated as of May 21,
2007, by and among Holdings, Borrower, the Guarantor Subsidiaries and Administrative
Agent (the “Pledge and Security Agreement”) and, with respect to the other
Collateral Documents, the Obligations secured by the Liens granted thereby, will
include all Obligations under, and as defined in, the Amended Credit Agreement.

 

Each
Guarantor acknowledges and agrees that (i) notwithstanding the conditions
to effectiveness set forth in this Amendment, such Guarantor is not required by
the terms of the Credit Agreement or any other Credit Document to consent to
the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing
in the Credit Agreement, this Amendment or any other Credit Document shall be
deemed to require the consent of such Guarantor to any future amendments to the
Credit Agreement.

 

10.           Consent
to ABL Amendment and Intercreditor Amendment.

 

(a)           Pursuant
to Section 5.3(a) of the Intercreditor Agreement, the Lenders party
hereto hereby consent to (i) an amendment to the ABL Credit Agreement (as
defined in the Intercreditor Agreement) in substantially the form of Exhibit B
and (ii) any amendments to the other ABL Loan Documents (as defined in the
Intercreditor Agreement) executed in connection therewith; and

 

5

 

(b)           The
Lenders party hereto hereby consent to the execution of an amendment to the
Intercreditor Agreement in substantially the form of Exhibit C (the “Intercreditor
Amendment”) and hereby authorize and instruct (i) the Administrative
Agent to execute the Intercreditor Amendment in its capacity as Term Administrative
Agent thereunder and (ii) the Collateral Agent to execute the
Intercreditor Amendment in its capacity as Term Collateral Agent thereunder.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

6

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert McCormick

  
	
   

  	
  Name:

  	
  Robert McCormick

  
	
   

  	
  Title:

  	
  VP CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS
  (for purposes of Section 9):

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert McCormick

  
	
   

  	
  Name:

  	
  Robert McCormick

  
	
   

  	
  Title:

  	
  VP CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS FINANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert McCormick

  
	
   

  	
  Name:

  	
  Robert McCormick

  
	
   

  	
  Title:

  	
  VP CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FISHER, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert McCormick

  
	
   

  	
  Name:

  	
  Robert McCormick

  
	
   

  	
  Title:

  	
  VP CFO

  

 

Amendment No. 2

 

 

	
   

  	
  Russell Investment
  Company plc, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Bishof

  
	
   

  	
  Name:

  	
  Michael Bishof

  
	
   

  	
  Title:

  	
  COO, Logan Circle
  Partners

  
				

 

Amendment No. 2

 

 

	
   

  	
  Russell
  Multi-Manager Bond Fund, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Bishof

  
	
   

  	
  Name:

  	
  Michael
  Bishof

  
	
   

  	
  Title:

  	
  COO,
  Logan Circle Partners

  

 

Amendment
No. 2

 

 

	
   

  	
  Russell
  Strategic Bond Fund, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Bishof

  
	
   

  	
  Name:

  	
  Michael
  Bishof

  
	
   

  	
  Title:

  	
  COO,
  Logan Circle Partners

  

 

Amendment
No. 2

 

 

	
   

  	
  Russell
  Institutional Funds, LLC – Russell Core Bond  Fund, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Bishof

  
	
   

  	
  Name:

  	
  Michael
  Bishof

  
	
   

  	
  Title:

  	
  COO,
  Logan Circle Partners

  

 

Amendment
No. 2

 

 

	
   

  	
  Integrys
  Energy Group, Inc. Retirement Plan Trust, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Bishof

  
	
   

  	
  Name:

  	
  Michael
  Bishof

  
	
   

  	
  Title:

  	
  COO,
  Logan Circle Partners

  

 

Amendment
No. 2

 

 

	
   

  	
  Allina
  Health System Trust, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Bishof

  
	
   

  	
  Name:

  	
  Michael
  Bishof

  
	
   

  	
  Title:

  	
  COO,
  Logan Circle Partners

  

 

Amendment
No. 2

 

 

	
   

  	
  Sunoco
  Inc Master Retirement Trust, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Bishof

  
	
   

  	
  Name:

  	
  Michael
  Bishof

  
	
   

  	
  Title:

  	
  COO,
  Logan Circle Partners

  

 

Amendment
No. 2

 

 

 

	
   

  	
  Atrium
  VI

  
	
   

  	
   

  
	
   

  	
  By:
  Credit Suisse Alternative Capital, Inc., as collateral manager

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Atrium
  IV

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Madison
  Park Funding IV, Ltd.

  By Credit Suisse Alternative Capital, Inc., as collateral manager

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Atrium
  III

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  CSAM
  Funding III

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  CSAM
  Funding IV

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Madison
  Park Funding I, Ltd,

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Madison
  Park Funding III, Ltd.

  By Credit Suisse Alternative Capital, Inc., as collateral manager

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Madison
  Park Funding VI, Ltd.

  By: Credit Suisse Alternative Capital, Inc., as collateral manager

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Credit
  Suisse Syndicated Loan Fund

  
	
   

  	
  By:
  Credit Suisse Alternative Capital, Inc., as Agent (Subadviser) for Credit
  Suisse Asset Management (Australia) Limited, the Responsible Entity for
  Credit Suisse Syndicated Loan Fund 

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Castle
  Garden Funding

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Madison
  Park Funding V, Ltd.

  
	
   

  	
  By:  Credit Suisse
  Alternative Capital, Inc., as collateral manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Atrium
  V

  
	
   

  	
  By:  Credit Suisse
  Alternative Capital, Inc., as collateral manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  Madison
  Park Funding II, Ltd.

  
	
   

  	
  By  Credit Suisse
  Alternative Capital, Inc. as collateral manager

  
	
   

  	
   

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Lerner

  
	
   

  	
  Name:

  	
  David
  H. Lerner

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Amendment
No. 2

 

 

	
   

  	
  WHITNEY
  CLO I,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John M. Casparian

  
	
   

  	
  Name:

  	
  John
  M. Casparian

  
	
   

  	
  Title:

  	
  Co-President

  
	
   

  	
   

  	
   

  
	
   

  	
  Churchill
  Pacific Asset Management LLC

  

 

 

	
   

  	
  SIERRA
  CLO II,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John M. Casparian

  
	
   

  	
  Name:

  	
  John
  M. Casparian

  
	
   

  	
  Title:

  	
  Co-President

  
	
   

  	
   

  	
   

  
	
   

  	
  Churchill
  Pacific Asset Management LLC

  

 

 

	
   

  	
  SHASTA
  CLO I,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John M. Casparian

  
	
   

  	
  Name:

  	
  John
  M. Casparian

  
	
   

  	
  Title:

  	
  Co-President

  
	
   

  	
   

  	
   

  
	
   

  	
  Churchill
  Pacific Asset Management LLC

  

 

 

	
   

  	
  SAN
  GABRIEL CLO I,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John M. Casparian

  
	
   

  	
  Name:

  	
  John
  M. Casparian

  
	
   

  	
  Title:

  	
  Co-President

  
	
   

  	
   

  	
   

  
	
   

  	
  Churchill
  Pacific Asset Management LLC

  

 

 

	
   

  	
  OLYMPIC
  CLO I,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John M. Casparian

  
	
   

  	
  Name:

  	
  John
  M. Casparian

  
	
   

  	
  Title:

  	
  Co-President

  
	
   

  	
   

  	
   

  
	
   

  	
  Churchill
  Pacific Asset Management LLC

  

 

 

	
   

  	
  KINGSLAND
  I, LTD.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kingsland
  Capital Management, LLC as Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Vincent Siino

  
	
   

  	
   

  	
  Name:

  	
  Vincent
  Siino

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Officer

  

 

Amendment
No. 2

 

 

	
   

  	
  KINGSLAND
  II, LTD.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kingsland
  Capital Management, LLC as Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Vincent Siino

  
	
   

  	
   

  	
  Name:

  	
  Vincent
  Siino

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Officer

  

 

Amendment
No. 2

 

 

	
   

  	
  KINGSLAND
  IV, LTD.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kingsland
  Capital Management, LLC as Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Vincent Siino

  
	
   

  	
   

  	
  Name:

  	
  Vincent
  Siino

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Officer

  

 

Amendment
No. 2

 

 

	
   

  	
  KINGSLAND
  V, LTD.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kingsland
  Capital Management, LLC as Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Vincent Siino

  
	
   

  	
   

  	
  Name:

  	
  Vincent
  Siino

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Officer

  

 

Amendment
No. 2

 

 

	
   

  	
  Sands
  Point Funding Ltd.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Guggenheim
  Investment Management, LLC as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kaitlin Trinh

  
	
   

  	
   

  	
  Name:

  	
  KAITLIN
  TRINH

  
	
   

  	
   

  	
  Title:

  	
  DIRECTOR

  

 

Amendment
No. 2

 

 

	
   

  	
  Green
  Lane CLO Ltd.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Guggenheim
  Investment Management, LLC as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kaitlin Trinh

  
	
   

  	
   

  	
  Name:

  	
  KAITLIN
  TRINH

  
	
   

  	
   

  	
  Title:

  	
  DIRECTOR

  

 

Amendment
No. 2

 

 

	
   

  	
  Kennecott
  Funding Ltd..,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Guggenheim
  Investment Management, LLC as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kaitlin Trinh

  
	
   

  	
   

  	
  Name:

  	
  KAITLIN
  TRINH

  
	
   

  	
   

  	
  Title:

  	
  DIRECTOR

  

 

Amendment
No. 2

 

 

	
   

  	
  1888
  Fund, Ltd.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Guggenheim
  Investment Management, LLC as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kaitlin Trinh

  
	
   

  	
   

  	
  Name:

  	
  KAITLIN
  TRINH

  
	
   

  	
   

  	
  Title:

  	
  DIRECTOR

  

 

Amendment
No. 2

 

 

	
   

  	
  Copper
  River CLO Ltd.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Guggenheim
  Investment Management, LLC as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kaitlin Trinh

  
	
   

  	
   

  	
  Name:

  	
  KAITLIN
  TRINH

  
	
   

  	
   

  	
  Title:

  	
  DIRECTOR

  

 

Amendment
No. 2

 

 

	
   

  	
  MARLBOROUGH
  STREET CLO, LTD.,

  
	
   

  	
  By
  its Collateral Manager, Massachusetts Financial Services Company, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David Cobey

  
	
   

  	
   

  	
  Name:

  	
  David
  Cobey

  
	
   

  	
   

  	
  Title:

  	
  As
  authorized representative and not individually

  

 

Amendment
No. 2

 

 

	
   

  	
  Morgan
  Stanley Investment

  
	
   

  	
  Management
  Croton, Ltd.

  
	
   

  	
  By:

  	
  Morgan
  Stanley Investment Management Inc. as  Collateral
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Robert Drobny

  
	
   

  	
   

  	
  Name:

  	
  ROBERT
  DROBNY

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Diretor

  

 

Amendment
No. 2

 

 

ARES
IIIR/IVR CLO LTD., as a Lender

ARES
VII CLO LTD., as a Lender

ARES
VIII CLO LTD., as a Lender

ARES
XI CLO LTD., as a Lender

 

 

	
  ARES
  IIIR/IVR CLO LTD.

  
	
  BY: ARES CLO MANAGEMENT IIIR/IVR, L.P., ITS ASSET
  MANAGER

  
	
   

  
	
   

  	
  BY: ARES CLO GP IIIR/IVR, LLC, ITS GENERAL PARTNER

  
	
   

  	
  BY: ARES MANAGEMENT LLC, ITS MANAGER

  
			

 

 

	
  By:

  	
  /s/ Seth Brufsky

  	
   

  
	
  Name:
  

  	
  Seth
  Brufsky

  	
   

  
	
  Title:
  

  	
  Vice
  President

  	
   

  

 

ARES
VII CLO LTD.

 

	
  BY: ARES CLO MANAGEMENT VII, L.P., ITS INVESTMENT
  MANAGER

  
	
   

  
	
   

  	
  BY: ARES CLO GP VII, LLC, ITS GENERAL PARTNER

  
	
   

  
	
   

  	
  BY: ARES MANAGEMENT LLC, ITS MANAGER

  
			

 

 

	
  By:

  	
  /s/ Seth Brufsky

  	
   

  
	
  Name:
  

  	
  Seth
  Brufsky

  	
   

  
	
  Title:
  

  	
  Vice
  President

  	
   

  

 

Amendment
No. 2

 

 

ARES
VIII CLO LTD.

 

	
  BY: ARES CLO MANAGEMENT VIII, L.P., ITS INVESTMENT
  MANAGER

  
	
   

  
	
   

  	
  BY: ARES CLO GP VIII, LLC, ITS GENERAL PARTNER

  
	
   

  
	
   

  	
  BY: ARES MANAGEMENT LLC, ITS MANAGER

  
			

 

 

	
  By:

  	
  /s/ Seth Brufsky

  	
   

  
	
  Name:
  

  	
  Seth
  Brufsky

  	
   

  
	
  Title:
  

  	
  Vice
  President

  	
   

  

 

 

ARES
XI CLO LTD.

 

	
  By: ARES CLO MANAGEMENT XI, L.P., ITS ASSET
  MANAGER

  
	
   

  
	
   

  	
  By: ARES CLO GP XI, LLC, ITS GENERAL PARTNER

  
	
   

  
	
   

  	
  By: ARES MANAGEMENT LLC, ITS MANAGER

  
			

 

 

	
  By:

  	
  /s/ Seth Brufsky

  	
   

  
	
  Name:
  

  	
  Seth
  Brufsky

  	
   

  
	
  Title:
  

  	
  Vice
  President

  	
   

  

 

Amendment
No. 2

 

 

	
   

  	
  Apidos
  CINCO CDO

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  By
  its Investment Advisor Apidos Capital Management, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Gretchen Bergstresser

  
	
   

  	
   

  	
  Name:

  	
  Gretchen
  Bergstresser

  
	
   

  	
   

  	
  Title:

  	
  Sr.
  Portfolio Manager

  

 

Amendment
No. 2

 

 

	
   

  	
  Avery
  Point CLO, Limited

  
	
   

  	
  By:

  	
  Sankaty
  Advisors LLC,

  
	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Andrew S. Viens

  
	
   

  	
   

  	
  Name:

  	
  Andrew
  S. Viens

  
	
   

  	
   

  	
  Title:

  	
  Sr.
  Vice President of Operations

  

 

Amendment
No. 2

 

 

	
   

  	
  Castle
  Hill II-Ingots, Ltd

  
	
   

  	
  By:

  	
  Sankaty
  Advisors LLC,

  
	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Andrew S. Viens

  
	
   

  	
   

  	
  Name:

  	
  Andrew
  S. Viens

  
	
   

  	
   

  	
  Title:

  	
  Sr.
  Vice President of Operations

  

 

Amendment
No. 2

 

 

	
   

  	
  Race
  Point II CLO, Limited

  
	
   

  	
  By:

  	
  Sankaty
  Advisors LLC,

  
	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Andrew S. Viens

  
	
   

  	
   

  	
  Name:

  	
  Andrew
  S. Viens

  
	
   

  	
   

  	
  Title:

  	
  Sr.
  Vice President of Operations

  

 

Amendment
No. 2

 

 

	
   

  	
  Race
  Point IV CLO, Ltd

  
	
   

  	
  By:

  	
  Sankaty
  Advisors LLC,

  
	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Andrew S. Viens

  
	
   

  	
   

  	
  Name:

  	
  Andrew
  S. Viens

  
	
   

  	
   

  	
  Title:

  	
  Sr.
  Vice President of Operations

  

 

Amendment
No. 2

 

 

	
   

  	
  SSS
  Funding II, LLC

  
	
   

  	
  By:

  	
  Sankaty
  Advisors LLC,

  
	
   

  	
  as
  Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Andrew S. Viens

  
	
   

  	
   

  	
  Name:

  	
  Andrew
  S. Viens

  
	
   

  	
   

  	
  Title:

  	
  Sr.
  Vice President of Operations

  

 

Amendment
No. 2

 

 

	
   

  	
  [The
  Prudential Insurance Company of America],

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Stephen J. Collins

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen
  J. Collins

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Prudential
  Investment Management, Inc., as investment advisor

  

 

Amendment
No. 2

 

 

ACKNOWLEDGED:

 

 

	
   

  	
  CREDIT
  SUISSE AG, CAYMAN ISLANDS BRANCH, as the Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ William O’Daly

  
	
   

  	
  Name: William O’Daly

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ilya Ivashkov

  
	
   

  	
  Name: Ilya Ivashkov

  
	
   

  	
  Title:  Associate

  
				

 

Amendment
No. 2

 

 

Exhibit A

 

Amended Credit Agreement

 

See attached.

 

Amendment No. 2

 

 

EXHIBIT A to Amendment No. 2

 

COMPOSITE CREDIT AGREEMENT

(as amended by Amendment No. 1, dated as of December 19,
2008

and Amendment No. 2, dated as of April 16,
2010)

 

 

CREDIT AND GUARANTY
AGREEMENT

 

dated as of May 21,
2007

 

among

 

DOUGLAS DYNAMICS, L.L.C.

 

as Borrower

 

DOUGLAS DYNAMICS, INC.,

DOUGLAS DYNAMICS FINANCE
COMPANY,

FISHER, LLC

 

as Guarantors,

 

THE BANKS AND FINANCIAL
INSTITUTIONS LISTED HEREIN,

as  Lenders,

 

CREDIT SUISSE SECURITIES
(USA) LLC,

as Sole Bookrunner and Sole Lead Arranger,

 

CREDIT SUISSE AG, CAYMAN
ISLANDS BRANCH,

as Collateral Agent, Administrative Agent,

Syndication Agent and Documentation Agent

 

 

Senior Secured Term Loan
Facility

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS AND
  INTERPRETATION

  	
  1

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Accounting Terms

  	
  33

  
	
  1.3

  	
  Interpretation, etc.

  	
  33

  
	
  SECTION 2.

  	
  LOANS

  	
  33

  
	
  2.1

  	
  Term Loans

  	
  33

  
	
  2.2

  	
  [RESERVED]

  	
  34

  
	
  2.3

  	
  [RESERVED]

  	
  34

  
	
  2.4

  	
  Pro Rata Shares; Availability of Funds

  	
  34

  
	
  2.5

  	
  Use of Proceeds

  	
  35

  
	
  2.6

  	
  Evidence of Debt; Register; Lenders’ Books and
  Records; Notes

  	
  35

  
	
  2.7

  	
  Interest on Loans

  	
  36

  
	
  2.8

  	
  Conversion/Continuation

  	
  37

  
	
  2.9

  	
  Default Interest

  	
  38

  
	
  2.10

  	
  Fees

  	
  38

  
	
  2.11

  	
  Scheduled Term Loan Payments

  	
  38

  
	
  2.12

  	
  Voluntary Prepayments

  	
  39

  
	
  2.13

  	
  Mandatory Prepayments

  	
  40

  
	
  2.14

  	
  Application of Prepayments/Reductions

  	
  41

  
	
  2.15

  	
  General Provisions Regarding Payments

  	
  42

  
	
  2.16

  	
  Ratable Sharing

  	
  44

  
	
  2.17

  	
  Making or Maintaining Eurodollar Rate Loans

  	
  44

  
	
  2.18

  	
  Increased Costs; Capital Adequacy

  	
  46

  
	
  2.19

  	
  Taxes; Withholding, etc.

  	
  47

  
	
  2.20

  	
  Obligation to Mitigate

  	
  49

  
	
  2.21

  	
  Call Protection

  	
  50

  
	
  2.22

  	
  Removal or Replacement of a Lender

  	
  50

  
	
  SECTION 3.

  	
  CONDITIONS PRECEDENT

  	
  51

  
	
  3.1

  	
  Closing Date

  	
  51

  
	
  3.2

  	
  Notices

  	
  54

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  54

  
	
  4.1

  	
  Organization; Requisite Power and Authority;
  Qualification

  	
  54

  
	
  4.2

  	
  Capital Stock and Ownership

  	
  55

  
	
  4.3

  	
  Due Authorization

  	
  55

  
	
  4.4

  	
  No Conflict

  	
  55

  
	
  4.5

  	
  Governmental Consents

  	
  55

  
	
  4.6

  	
  Binding Obligation

  	
  55

  
	
  4.7

  	
  Financial Condition

  	
  56

  
	
  4.8

  	
  Projections

  	
  56

  
	
  4.9

  	
  No Material Adverse Change

  	
  56

  
	
  4.10

  	
  No Restricted Payments

  	
  56

  
	
  4.11

  	
  Litigation; Adverse Facts

  	
  57

  
	
  4.12

  	
  Payment of Taxes

  	
  57

  

 

i

 

	
  4.13

  	
  Properties

  	
  57

  
	
  4.14

  	
  Environmental Matters

  	
  58

  
	
  4.15

  	
  No Defaults

  	
  59

  
	
  4.16

  	
  Governmental Regulation

  	
  59

  
	
  4.17

  	
  Margin Regulations

  	
  59

  
	
  4.18

  	
  Employee Matters

  	
  59

  
	
  4.19

  	
  Employee Benefit Plans

  	
  60

  
	
  4.20

  	
  Certain Fees

  	
  60

  
	
  4.21

  	
  Solvency

  	
  61

  
	
  4.22

  	
  Collateral

  	
  61

  
	
  4.23

  	
  Disclosure

  	
  61

  
	
  4.24

  	
  Deposit Accounts

  	
  62

  
	
  SECTION 5.

  	
  AFFIRMATIVE COVENANTS

  	
  62

  
	
  5.1

  	
  Financial Statements and Other Reports

  	
  62

  
	
  5.2

  	
  Existence

  	
  65

  
	
  5.3

  	
  Payment of Taxes and Claims

  	
  66

  
	
  5.4

  	
  Maintenance of Properties

  	
  66

  
	
  5.5

  	
  Insurance

  	
  66

  
	
  5.6

  	
  Inspections

  	
  66

  
	
  5.7

  	
  Lenders Meetings

  	
  67

  
	
  5.8

  	
  Compliance with Laws

  	
  67

  
	
  5.9

  	
  Environmental

  	
  67

  
	
  5.10

  	
  Subsidiaries

  	
  68

  
	
  5.11

  	
  Additional Real Estate Assets

  	
  69

  
	
  5.12

  	
  [Reserved]

  	
  70

  
	
  5.13

  	
  Further Assurances

  	
  70

  
	
  5.14

  	
  ERISA

  	
  70

  
	
  5.15

  	
  Maintenance of Credit Rating

  	
  70

  
	
  SECTION 6.

  	
  NEGATIVE COVENANTS

  	
  70

  
	
  6.1

  	
  Indebtedness

  	
  71

  
	
  6.2

  	
  Liens

  	
  73

  
	
  6.3

  	
  Sales and Leasebacks

  	
  75

  
	
  6.4

  	
  No Further Negative Pledges

  	
  76

  
	
  6.5

  	
  Restricted Payments

  	
  76

  
	
  6.6

  	
  Restrictions on Subsidiary Distributions

  	
  78

  
	
  6.7

  	
  Investments

  	
  78

  
	
  6.8

  	
  Calculations

  	
  80

  
	
  6.9

  	
  Fundamental Changes; Asset
  Dispositions; Acquisitions

  	
  81

  
	
  6.10

  	
  Disposal of Subsidiary Interests

  	
  82

  
	
  6.11

  	
  Fiscal Year

  	
  82

  
	
  6.12

  	
  Transactions with Shareholders and Affiliates

  	
  83

  
	
  6.13

  	
  Conduct of Business

  	
  83

  
	
  6.14

  	
  Permitted Activities of Holdings

  	
  83

  
	
  6.15

  	
  Amendments or Waivers of Certain Agreements

  	
  83

  
	
  6.16

  	
  Limitation on Payments Relating to Other Debt

  	
  84

  
	
  SECTION 7.

  	
  GUARANTY

  	
  85

  

 

ii

 

	
  7.1

  	
  Guaranty of the Obligations

  	
  85

  
	
  7.2

  	
  Contribution by Guarantors

  	
  85

  
	
  7.3

  	
  Payment by Guarantors

  	
  86

  
	
  7.4

  	
  Liability of Guarantors Absolute

  	
  86

  
	
  7.5

  	
  Waivers by Guarantors

  	
  88

  
	
  7.6

  	
  Guarantors’ Rights of Subrogation, Contribution,
  etc.

  	
  89

  
	
  7.7

  	
  Subordination of Other Obligations

  	
  90

  
	
  7.8

  	
  Continuing Guaranty

  	
  90

  
	
  7.9

  	
  Authority of Guarantors or Company

  	
  90

  
	
  7.10

  	
  Financial Condition of Company

  	
  90

  
	
  7.11

  	
  Bankruptcy, etc.

  	
  90

  
	
  7.12

  	
  Discharge of Guaranty Upon Sale of Guarantor

  	
  91

  
	
  SECTION 8.

  	
  EVENTS OF DEFAULT

  	
  91

  
	
  8.1

  	
  Events of Default

  	
  91

  
	
  SECTION 9.

  	
  AGENTS

  	
  94

  
	
  9.1

  	
  Appointment of Agents

  	
  94

  
	
  9.2

  	
  Powers and Duties

  	
  95

  
	
  9.3

  	
  General Immunity

  	
  95

  
	
  9.4

  	
  Agents Entitled to Act as Lender

  	
  96

  
	
  9.5

  	
  Lenders’ Representations, Warranties and
  Acknowledgment

  	
  96

  
	
  9.6

  	
  Right to Indemnity

  	
  97

  
	
  9.7

  	
  Successor Administrative Agent

  	
  97

  
	
  9.8

  	
  Collateral Documents and Guaranty

  	
  98

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
  98

  
	
  10.1

  	
  Notices

  	
  98

  
	
  10.2

  	
  Expenses

  	
  101

  
	
  10.3

  	
  Indemnity

  	
  101

  
	
  10.4

  	
  Set-Off

  	
  102

  
	
  10.5

  	
  Amendments and Waivers

  	
  103

  
	
  10.6

  	
  Successors and Assigns; Participations

  	
  104

  
	
  10.7

  	
  Independence of Covenants

  	
  109

  
	
  10.8

  	
  Survival of Representations, Warranties and
  Agreements

  	
  109

  
	
  10.9

  	
  No Waiver; Remedies Cumulative

  	
  109

  
	
  10.10

  	
  Marshalling; Payments Set Aside

  	
  109

  
	
  10.11

  	
  Severability

  	
  110

  
	
  10.12

  	
  Obligations Several; Independent Nature of
  Lenders’ Rights

  	
  110

  
	
  10.13

  	
  Headings

  	
  110

  
	
  10.14

  	
  APPLICABLE LAW

  	
  110

  
	
  10.15

  	
  CONSENT TO JURISDICTION

  	
  110

  
	
  10.16

  	
  WAIVER OF JURY TRIAL

  	
  111

  
	
  10.17

  	
  Confidentiality

  	
  111

  
	
  10.18

  	
  Usury Savings Clause

  	
  112

  
	
  10.19

  	
  Counterparts

  	
  113

  
	
  10.20

  	
  Effectiveness

  	
  113

  

 

iii

 

	
  APPENDICES:

  	
  A

  	
  [Reserved]

  
	
   

  	
  B

  	
  Notice Addresses

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
  4.1

  	
  Organization and
  Capital Structure

  
	
   

  	
  4.2

  	
  Capital Stock and
  Ownership

  
	
   

  	
  4.9

  	
  Absence of Certain
  Changes

  
	
   

  	
  4.11

  	
  Litigation

  
	
   

  	
  4.13

  	
  Real Estate Assets

  
	
   

  	
  4.14

  	
  Environmental

  
	
   

  	
  4.18

  	
  Employee Matters

  
	
   

  	
  4.19

  	
  Employee Benefit Plans

  
	
   

  	
  4.22

  	
  Certain Existing Liens

  
	
   

  	
  4.24

  	
  Deposit Accounts

  
	
   

  	
  6.1

  	
  Certain Indebtedness

  
	
   

  	
  6.2

  	
  Certain Liens

  
	
   

  	
  6.7

  	
  Certain Investments

  
	
   

  	
  6.12

  	
  Certain Affiliate
  Transactions

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
  A-1

  	
  Funding Notice

  
	
   

  	
  A-2

  	
  Conversion/Continuation
  Notice

  
	
   

  	
  B

  	
  Term Loan Note

  
	
   

  	
  C

  	
  Compliance Certificate

  
	
   

  	
  D

  	
  Opinion of Counsel for
  Credit Parties

  
	
   

  	
  E

  	
  Assignment Agreement

  
	
   

  	
  F

  	
  Certificate Re Non-bank
  Status

  
	
   

  	
  G

  	
  Solvency Certificate

  
	
   

  	
  H

  	
  Counterpart Agreement

  
	
   

  	
  I

  	
  Pledge and Security
  Agreement

  
	
   

  	
  J

  	
  Mortgage

  
	
   

  	
  K

  	
  Restricted Payment
  Certificate

  
	
   

  	
  L

  	
  Intercreditor Agreement

  
	
   

  	
  M

  	
  Fixed Charge Coverage Compliance Certificate

  

 

iv

 

 

CREDIT AND GUARANTY
AGREEMENT

 

CREDIT AND GUARANTY AGREEMENT, dated as of May 21, 2007 (the
“Agreement”), by and among Douglas
Dynamics, Inc., a Delaware corporation (“Holdings”), Douglas
Dynamics, L.L.C., a Delaware limited liability company and a direct
wholly-owned Subsidiary of Holdings (the “Company” or the
“Borrower”),
Fisher, LLC, a Delaware limited liability company (“Fisher”)
and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,” and together with Fisher and Holdings, each a “Guarantor” and collectively the “Guarantors”)
the banks and financial institutions listed on the signature pages hereof
(together with their respective successors and assigns, each individually
referred to herein as a “Lender” and collectively as “Lenders”),
Credit Suisse AG, Cayman Islands Branch  (“Credit
Suisse”), as sole bookrunner and sole lead arranger (the “Arranger”),
Credit Suisse, as syndication agent (“Syndication Agent”),
Credit Suisse, as  documentation agent
(the “Documentation
Agent”), Credit Suisse as collateral agent for the Lenders
(in such capacity, the “Collateral Agent”) and Credit Suisse
as administrative agent for the Lenders (in such capacity, “Administrative
Agent”).

 

RECITALS:

 

WHEREAS, the Borrower has requested, and the
Lenders have agreed, to extend certain credit facilities to the Borrower on the
terms and conditions of this Agreement.

 

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

 

SECTION 1.         DEFINITIONS AND INTERPRETATION

 

1.1          Definitions.  The following terms used herein, including in
the preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:

 

“ABL Priority Collateral”  has the meaning assigned to that term in the Intercreditor
Agreement.

 

“Accepting Lenders”
has the meaning assigned to that term in Section 2.14(d).

 

“Additional Term Loan Commitment” means the commitment of a Lender to make or otherwise
fund any Additional Term Loan and “Additional Term Loan Commitments”  means such commitments of all
Lenders in the aggregate.  The amount of
each Lender’s Additional Term Loan Commitment, if any, is set forth in the
Second Amendment or in the applicable Assignment Agreement, subject to any
adjustment or reduction pursuant to the terms and conditions hereof.

 

“Additional Term Loan Lender”
means a
Lender that becomes a party hereto pursuant to the Term Loan Joinder Agreement.

 

“Additional Term Loan
Maturity Date” means May 21, 2016.

 

1

 

“Additional Term Loans”
means the Term Loans made pursuant to the Second Amendment and the Term Loan
Joinder Agreement on the Second Amendment Effective Date.

 

“Administrative Agent” has the meaning assigned to that term in the preamble
hereto.

 

“Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with
respect to an Interest Period for a Eurodollar Rate Loan, the greater of (1) 2.00%
per annum and (2) the rate per annum obtained by dividing (i) (a) the
rate per annum determined by the Administrative Agent by reference to the
British Bankers’ Association Interest Settlement Rates for deposits (for
delivery on the first day of such period) with a term equivalent to such period
in Dollars, determined as of approximately 11:00 a.m. (London, England
time) on such Interest Rate Determination Date (as set forth by Bloomberg
Information Service or any successor thereto or any other service selected by
Administrative Agent which has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates), or (b) in the event the rate referenced in the preceding
clause (a) is not available, the rate per annum equal to the offered
quotation rate to first class banks in the London interbank market by Credit
Suisse for deposits (for delivery on the first day of the relevant period) in
Dollars of amounts in same day funds comparable to the principal amount of the
applicable Loan of Administrative Agent, in its capacity as a Lender, for which
the Adjusted Eurodollar Rate is then being determined with maturities
comparable to such period as of approximately 11:00 a.m. (London, England
time) on such Interest Rate Determination Date, by (ii) an amount equal to
(a) one minus (b) the Applicable Reserve Requirement.

 

“Adverse Proceeding” means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or,
to the knowledge of Holdings or any of its Subsidiaries, threatened against or
affecting Holdings or any of its Subsidiaries or any property of Holdings or
any of its Subsidiaries.

 

“Affected Lender” has the meaning assigned to that term in Section 2.17(b).

 

“Affected Loans” has the meaning assigned to that term in Section 2.17(b).

 

“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession, directly
or indirectly, of the power (i) to vote 10% or more of the Securities
having ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.

 

“Agent”
means each of Administrative Agent, Collateral Agent, Syndication Agent and
Documentation Agent.

 

2

 

“Aggregate Amounts Due” has the meaning assigned to that term in Section 2.16.

 

“Aggregate Payments” has the meaning assigned to that term in Section 7.2.

 

“Agreement” has the meaning assigned to that term in the preamble hereto.

 

“Applicable Margin” means a percentage, per annum, equal to:

 

	
   

  	
   

  	
  Base Rate 

  Loans

  	
   

  	
  Eurodollar Rate

  Loans

  	
   

  
	
  Term
  Loans (other than Additional Term Loans)

  	
   

  	
  3.50

  	
  %

  	
  4.50

  	
  %

  
	
  Additional
  Term Loans

  	
   

  	
  4.00

  	
  %

  	
  5.00

  	
  %

  

 

“Applicable Reserve Requirement” means, at any time, for any Eurodollar Rate Loan, the
maximum rate, expressed as a decimal, at which reserves (including, without
limitation, any basic marginal, special, supplemental, emergency or other
reserves) are required to be maintained by any member bank of the Federal
Reserve System against “Eurocurrency liabilities” (as such term is defined in
Regulation D) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System or any successor thereto.  Without limiting the effect of the foregoing,
the Applicable Reserve Requirement shall reflect any other reserves required to
be maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the applicable
Adjusted Eurodollar Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Eurodollar Rate Loans.  A Eurodollar Rate Loan shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender.  The rate of interest on Eurodollar Rate Loans
shall be adjusted automatically on and as of the effective date of any change
in the Applicable Reserve Requirement.

 

“Ares Group Investors” means  (i) the
Ares Corporate Opportunities Fund, L.P. (the “Ares Limited Partnership”),
(ii) ACOF Management, L.P., (iii) ACOF Operating Manager, L.P., (iv) Ares
Management, Inc., (v) Ares Management LLC, (vi) any limited
partners of any of the foregoing entities and (vii) partners, members,
managing directors, officers or employees of any of those entities referenced
in clauses (ii) through (v), provided that each Person set forth in
clauses (vi) and (vii) shall only constitute an Ares Group Investor
so long as it gives a proxy to, or otherwise agrees that it will vote in a
manner consistent with, the Ares Limited Partnership (except to the extent
otherwise required by ERISA or other applicable law) and the entity to which it
is required to give a proxy to or otherwise vote consistently with continues to
own Capital Stock in Parent.

 

“Arranger” has the meaning assigned to that term in the preamble hereto.

 

3

 

“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person (other than the Borrower or any Guarantor
Subsidiary), in one transaction or a series of transactions, of all or any part
of Holdings’, Company’s, or any of its Subsidiaries’ businesses, assets or
properties of any kind, whether real, personal, or mixed and whether tangible
or intangible, whether now owned or hereafter acquired, including, without
limitation, the Capital Stock of any of Holdings’ Subsidiaries, other than (i) inventory
sold or leased in the ordinary course of business (excluding any such sales by
operations or divisions discontinued or to be discontinued), (ii) equipment
that is surplus,  obsolete,
worn-out, or no longer used or useful in the business of Holdings, Company or
any of its Subsidiaries, (iii) leasehold interests that are no longer used
or useful in the business of Holdings, Company or any of its Subsidiaries, (iv) dispositions,
by means of trade-in, of equipment used in the ordinary course of business, so
long as such equipment is replaced, substantially concurrently, by like-kind
equipment in an effort to upgrade the Facilities of Company and its
Subsidiaries, (v) Cash and Cash Equivalents used in a manner not
prohibited by the Credit Documents or the Revolving Credit Documents, and (vi) sales
of other assets for aggregate consideration of less than $1,000,000  with respect to any transaction or series
of related transactions and less than $3,000,000  in the aggregate during any calendar year (provided, that for
purposes of calculating the amounts set forth in this clause (vi), any
transactions or series of related transactions involving aggregate
consideration of $50,000 or less may be excluded).

 

“Assignment Agreement” means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or
modifications as may be approved by Administrative Agent.

 

“Attributable Indebtedness” in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended.  Such present value shall be
calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.

 

“Aurora Group Investors” means (i) Aurora Equity Partners II L.P. and
Aurora Overseas Equity Partners II, L.P. (the “Limited Partnerships”),
(ii) Aurora Capital Partners II L.P. and Aurora Overseas Capital Partners
II, L.P. (the “General Partners”), (iii) Aurora
Advisors II LLC and Aurora Overseas Advisors, II, LDC (the “Ultimate
General Partners”), (iv) any limited partners of the
Limited Partnerships or any limited partners of the General Partners, provided
that such limited partner gives a proxy to, or otherwise agrees that it will
vote in a manner consistent with, the Limited Partnerships (except to the
extent otherwise required by ERISA or other applicable law) or the General
Partners, (v) any managing director or employee of Aurora Management
Partners LLC, provided that such managing director or employee gives a
proxy to, or otherwise agrees that he or she will vote in a manner consistent
with the Limited Partnerships (except to the extent otherwise required by ERISA
or other applicable law) or the General Partners, (vi) any member of the
Advisory Board of Aurora Management Partners LLC, provided that such
member gives a proxy to, or otherwise agrees that he or she will vote in a
manner consistent with, the Limited Partnerships (except to the extent
otherwise required by ERISA or other applicable law) or the General Partners, (vii) any
Affiliate of Aurora

 

4

 

Management Partners LLC,
provided that such Affiliate gives a proxy to, or otherwise agrees that it will
vote in a manner consistent with, the Limited Partnerships or the General
Partners, and (viii) any investment fund or other entity controlled by or
under common control with, any one or more of the Ultimate General Partners or
Aurora Management Partners LLC or the principals that control any one or more
of the Ultimate General Partners or Aurora Management Partners LLC; provided
that each Person set forth in clauses (iv) through (viii) shall only
constitute an Aurora Group Investor so long as the entity to which it is
required to give a proxy to or otherwise vote consistently with continues to
own Capital Stock in Parent.

 

“Authorized Officer” means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person’s chief financial officer or treasurer.

 

“Bankruptcy Code” means Title 11 of the United States Code
entitled “Bankruptcy,” as now and hereafter in effect, or any successor
statute.

 

“Base Rate” means, for any day, a rate per annum equal to the greatest of (i) the
Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in
effect on such day plus 1⁄2 of 1%, and (iii) 3.00%.

 

“Base Rate Loan” means a Loan bearing interest at a rate determined by
reference to the Base Rate.

 

“Blocked Account” means any Deposit Account subject to a
Blocked Account Agreement.

 

“Blocked Account Agreement” means an account control agreement on terms reasonably
satisfactory to the Collateral Agent.

 

“Beneficiary” means each Agent, Lender and Lender Counterparty.

 

“Borrower” has the meaning assigned to that term in the preamble hereto.

 

“Business Day” means (i) any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the States of New York or
Wisconsin or is a day on which banking institutions located in either such
state are authorized or required by law or other governmental action to close
and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate
Loans, the term “Business Day” shall mean any day
which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in Dollar deposits in the London interbank
market.

 

“Capital Lease” means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.

 

5

 

“Capital Stock” means any and all shares, interests, participations
or other equivalents  (however
designated) of capital stock of a corporation, any and all equivalent ownership
interests in a Person (other than a corporation), including, without
limitation, partnership interests and membership interests, and any and all
warrants, rights or options to purchase or other arrangements or rights to
acquire any of the foregoing.

 

“Cash”
means money, currency or a credit balance in any demand or deposit account.

 

“Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to
interest and principal by the United States Government or (b) issued by
any agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, a rating of at
least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial
paper maturing no more than one year from the date of creation thereof and
having, at the time of the acquisition thereof, a rating of at least A-1 from
S&P or at least P-1 from Moody’s; (iv) certificates of deposit, time
deposits or bankers’ acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia that (a) is at least “adequately capitalized” (as defined in the
regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (v) shares
of any money market mutual fund that (a) has substantially all of its
assets invested continuously in the types of investments referred to in clauses
(i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody’s.

 

“Certificate re Non-Bank Status” means a certificate substantially in the form of Exhibit F.

 

“Change of Control” means, at any time, (i) any
Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act) other than Sponsor beneficially owns, directly or indirectly,
more than 35%, on a fully diluted basis, of the outstanding Capital Stock (measured
only by voting power) of Holdings entitled (without regard to the occurrence of
any contingency) to vote for the election of members of the board of directors
(or similar governing body) of Holdings, unless Sponsor beneficially owns and
controls, on a fully diluted basis, more of the outstanding Capital Stock
(measured only by voting power) of Holdings entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the board
of directors (or similar governing body) of Holdings than any other Person or “group”
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act); or (ii) Holdings
shall cease to beneficially own and control 100% on a fully diluted basis of
the economic and voting interests in the Capital Stock of Company.

 

“Change in Law”
has the meaning assigned to that term in Section 2.18(a).

 

6

 

“Closing Date”  means May 21, 2007.

 

“Collateral” means, collectively, all of the real, personal and mixed property
(including Capital Stock) in which Liens are purported to be granted pursuant
to the Collateral Documents as security for the Obligations.

 

“Collateral Agent”  has the meaning assigned to that term in
the preamble hereto.

 

“Collateral Documents” means the Pledge and Security Agreement, the
Mortgages, the Blocked Account Agreements, the Intercreditor Agreement and all
other instruments, documents and agreements delivered by any Credit Party
pursuant to this Agreement or any of the other Credit Documents in order to
grant to Collateral Agent, for the benefit of Lenders, a Lien on any real,
personal or mixed property of that Credit Party as security for the Obligations
(or to perfect any Liens so granted).

 

“Commitment” means any Term Loan Commitment.

 

“Company” has the meaning assigned to that term in the preamble hereto.

 

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

 

“Consolidated Adjusted EBITDA” means, for any period, an amount determined for
Company and its Subsidiaries on a consolidated basis equal to the total of (a) Consolidated
Net Income, plus (b) the sum, without duplication, of each of the
following to the extent deducted in the calculation of Consolidated Net Income
for such period (i) Consolidated Interest Expense and non-Cash interest
expense, (ii) provisions for taxes based on income, (iii) total
depreciation expense, (iv) total amortization expense (including
amortization of goodwill, other intangibles, and financing fees and expenses), (v) non-cash
impairment charges, (vi) non-cash expenses resulting from the grant of
stock and stock options and other compensation to management personnel of
Company and its Subsidiaries pursuant to a written incentive plan or agreement,
(vii) other non-Cash items that are unusual or otherwise non-recurring
items, (viii) expenses or fees under the Management Services Agreement, as
in effect on December 16, 2004 including any payments made under the
Management Services Agreement and comprising all or any portion of the
Qualifying IPO Payment, (ix) any extraordinary losses and non-recurring
charges during any period (including severance, relocation costs, one-time
compensation charges and losses or charges associated with Interest Rate
Agreements), (x) restructuring charges or reserves (including costs
related to closure of Facilities), (xi) any transaction costs incurred in
connection with the issuance of Securities or any refinancing transaction, in
each case whether or not such transaction is consummated, (xii) any fees and
expensed related to any Permitted Acquisitions and (xiii) fees, expenses and
other transaction costs incurred by Company and its Subsidiaries during such
period in connection with the transactions contemplated by the First Amendment
to Revolving Credit Facility, the Second Amendment and the Qualifying IPO minus
(c) the sum, without duplication, of (i) non-Cash items increasing
Consolidated Net Income for such period that are unusual or otherwise
non-recurring items, (ii) cash payments made during such period reducing
reserves or liabilities for accruals made in prior periods but only to the
extent such reserves or accruals were 

 

7

 

added back to “Consolidated
Adjusted EBITDA” in a prior period pursuant to clause (b)(vii) or (b)(viii) above,
and (iii) Restricted Payments made during such period to Holdings pursuant
to Section 6.5(c)(i) (other than any such Restricted Payments made to
Holdings pursuant to Section 6.5(c)(i) for the purpose of paying fees,
expenses and other transaction costs paid in cash during such period in
connection with the transactions contemplated by the First Amendment to
Revolving Credit Facility, the Second Amendment and the Qualifying IPO).

 

“Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures of Company and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in “purchase
of property and equipment” or similar items reflected in the consolidated
statement of cash flows of Company and its Subsidiaries, but excluding
expenditures constituting the purchase price for Permitted Acquisitions and
amounts constituting Net Asset Sale Proceeds and Net Insurance/Condemnation
Proceeds which are reinvested in the business of Company and its Subsidiaries
in accordance with Section 2.13(a) or Section 2.13(b),
respectively, by Company and its Subsidiaries during such period.

 

“Consolidated
Coverage Ratio” on any date of determination (the “Transaction Date”) means the ratio, on a pro forma basis, of (a) the aggregate
amount of Consolidated Adjusted EBITDA for the Test Period to (b) the
aggregate Consolidated Fixed Charges during the Test Period; provided, that for purposes of such calculation:
(1) Permitted Acquisitions which occurred during the Test Period or
subsequent to the Test Period and on or prior to the Transaction Date shall be
assumed to have occurred on the first day of the Test Period, (2) transactions
giving rise to the need to calculate the Consolidated Coverage Ratio and the
application of the proceeds therefrom (except as otherwise provided in this
definition) shall be assumed to have occurred on the first day of the Test
Period, (3) the incurrence of any Indebtedness (including the issuance of
any Disqualified Capital Stock) during the Test Period or subsequent to the
Test Period and on or prior to the Transaction Date (and the application of the
proceeds therefrom to the extent used to refinance or retire other Indebtedness)
(other than ordinary working capital borrowings) shall be assumed to have
occurred on the first day of the Test Period, (4) the permanent repayment
of any Indebtedness (including the redemption of any Disqualified Capital
Stock) during the Test Period or subsequent to the Test Period and on or prior
to the Transaction Date (other than ordinary working capital borrowings) shall
be assumed to have occurred on the first day of the Test Period, (5) the
Consolidated Fixed Charges attributable to interest on any Indebtedness or
dividends on any Disqualified Capital Stock bearing a floating interest (or
dividend) rate shall be computed on a pro
forma basis as if the average rate in effect from the beginning of
the Test Period to the Transaction Date had been the applicable rate for the
entire period, unless Company or any of its Subsidiaries is a party to a Hedge
Agreement (which shall remain in effect for the 12-month period immediately
following the Transaction Date) that has the effect of fixing the interest rate
on the date of computation, in which case such rate (whether higher or lower)
shall be used, and (6) amounts attributable to operations or businesses
permanently discontinued or disposed of prior to the Transaction Date, shall be
excluded, except, in the case of a determination of Consolidated Fixed Charges,
only to the extent that the obligations giving rise to such Consolidated Fixed
Charges would no longer be obligations contributing to Consolidated Fixed
Charges subsequent to the Transaction Date.

 

8

 

“Consolidated Current Assets” means, as at any date of determination,
the total assets of Company and its Subsidiaries on a consolidated basis that
may properly be classified as current assets in conformity with GAAP, excluding
Cash and Cash Equivalents.

 

“Consolidated Current Liabilities” means, as at any date of determination,
the total liabilities of Company and its Subsidiaries on a consolidated basis
that may properly be classified as current liabilities in conformity with GAAP,
excluding the current portion of long term debt.

 

“Consolidated Excess Cash Flow” means, for any period, an
amount (if positive) equal to: (i) the sum, without duplication, of the amounts
for such period of (a) Consolidated Adjusted EBITDA, plus (b) the
Consolidated Working Capital Adjustment, minus (ii) the sum,
without duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Consolidated Total Debt (excluding voluntary repayments
financed with Indebtedness), (b) cash Consolidated Capital Expenditures
(net of any proceeds of (y) any related financings with respect to such
expenditures and (z) to the extent not excluded in the calculation of
Consolidated Capital Expenditures, any sales of capital assets used to finance
such expenditures), (c) Consolidated Interest Expense paid in cash for
such period, (d) the portion of taxes based on income actually paid in
cash during such period by Company or any of its Subsidiaries whether for such
period or any other period, (e) Restricted Payments made under Sections
6.5(c)(ii)-(iv) during such period, (f) Restricted Payments or
Investments made under Section 6.5(d)(i), Section 6.5(f), Section 6.7(l) and
Section 6.7(m), as applicable, and which are for any Fiscal Year, declared
(in the case of dividends or distributions) or paid in cash from June 1 of
the applicable Fiscal Year to and including May 31 of the immediately
following Fiscal Year, (g) Restricted Payments made to Holdings pursuant
to Section 6.5(c)(i) for the purpose of paying fees, expenses and
other transaction costs paid in cash during such period in connection with the
transactions contemplated by the Second Amendment, the First Amendment to
Revolving Credit Facility and the Qualifying IPO and (h) fees, expenses
and other transaction costs paid in cash by Company and its Subsidiaries during
such period in connection with the transactions contemplated by the First
Amendment to Revolving Credit Facility, the Second Amendment and the Qualifying
IPO.  Consolidated Excess Cash Flow shall
not be reduced by the amount of any Permitted Loan Purchase.

 

“Consolidated Fixed Charges” means, for any period, the sum, without duplication,
of the amounts determined for Company and its Subsidiaries on a consolidated
basis equal to (i) Consolidated Interest Expense for such period, (ii) scheduled
payments for such period of principal on Consolidated Total Debt, (iii) Consolidated
Capital Expenditures for such period other than those financed with secured
Indebtedness permitted by Sections 6.1 and 6.2 or made or incurred pursuant to Section 6.8(b)(ii) of
the Revolving Credit Facility, (iv) the portion of taxes based on income
actually paid in cash during such period by Company or any of its Subsidiaries
whether for such period or any other period and (v) Restricted Payments
permitted under Section 6.5(c)(iii) and which are paid in cash during
such period.

 

“Consolidated Interest Expense” means, for any period, (i) total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) payable in cash of Company and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Company and its Subsidiaries, including all commissions, 

 

9

 

discounts and other fees
and charges owed with respect to letters of credit and net costs under Interest
Rate Agreements, but excluding, however, any amounts referred to in Section 2.10(d) payable
on or before the Closing Date and amounts with respect to the termination of
Interest Rate Agreements entered into within 90 days of the Closing Date, minus
(ii) the aggregate amount of interest income of Company and its
Subsidiaries during such period paid in cash.

 

“Consolidated Net Income” means, for any period, (i) the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, minus
(ii) (a) the income (or loss) of any Person (other than a Subsidiary
of Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (b) the income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary of Company or
is merged into or consolidated with Company or any of its Subsidiaries or that
Person’s assets are acquired by Company or any of its Subsidiaries, (c) the
income of any Subsidiary of Company to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (d) any after-tax
gains or losses attributable to Asset Sales or returned surplus assets of any
Pension Plan, and (e) (to the extent not included in clauses (a) through
(d) above) any net extraordinary gains or net extraordinary losses.  Consolidated Net Income
shall not be increased as a result of any discount realized as a result of any
Permitted Loan Purchase.

 

“Consolidated Secured Debt” means, as at any date of determination,
the Consolidated Total Debt  of
Company and its Subsidiaries determined on a consolidated basis (and without
duplication) in accordance with GAAP that is secured by Liens on any of the
assets of the Company or any of its Subsidiaries.

 

“Consolidated Total Debt” means, as at any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP; provided,
that the amount of revolving Indebtedness to be included at the date of
determination shall be equal to the average of the balances of such revolving
Indebtedness as of the end of each of the prior four calendar quarters (except that
with respect to the first four calendar quarters after the Closing Date, the
amount of revolving Indebtedness to be included shall be based on the average
of the quarter end balances from the Closing Date through the date of
determination).

 

“Consolidated Working Capital” means, as at any date of determination,
the excess of Consolidated Current Assets over Consolidated Current
Liabilities.

 

“Consolidated Working Capital
Adjustment” means,
for any period on a consolidated basis, the amount (which may be a negative
number) by which Consolidated Working Capital as of the beginning of such
period exceeds (or is less than) Consolidated Working Capital as of the end of
such period.

 

10

 

“Contractual Obligation” means, as applied to any Person, any provision of any
indenture, mortgage, deed of trust, or other contract, undertaking, agreement
or other instrument to which that Person is a party or to which such Person or
any of its properties is subject.

 

“Contributing Guarantors”  has the meaning assigned to that term in Section 7.2.

 

“Conversion/Continuation Date” means the effective date of a continuation or
conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.

 

“Conversion/Continuation Notice” means a Conversion/Continuation Notice substantially
in the form of Exhibit A-2.

 

“Counterpart Agreement” means a Counterpart Agreement substantially in the
form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.

 

“Credit Date” means the date of a Credit Extension.

 

“Credit Document” means any of this Agreement, the Notes, if any, the
Collateral Documents, and all other documents, instruments or agreements
executed and delivered by a Credit Party for the benefit of any Agent or any
Lender in connection herewith.

 

“Credit Extension” means the making of a Loan.

 

“Credit Party” means each Person (other than any Agent or any Lender
or any other representative thereof) from time to time party to a Credit
Document.

 

“Cumulative Interest Expense”  means the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (A) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the following
sentence, interest attributable to Capital Leases and Attributable
Indebtedness) of the Company and its Subsidiaries during such period, including
(I) amortization of debt issuance costs, original issue discount, debt
discounts or premium and other financing fees and expenses and non-cash
interest payments or accruals on any Indebtedness, (II) the interest
portion of all deferred payment obligations of the Company and its
Subsidiaries, and (III) all commissions, discounts and other fees and
charges owed by the Company and its Subsidiaries with respect to bankers’
acceptances and letters of credit financings and Hedge Agreements, in each case
to the extent attributable to such period, and (B) the amount of all cash
dividends paid by the Company or any of its Subsidiaries in respect of
preferred stock (other than by Subsidiaries of the Company to the Company or
its wholly owned Subsidiaries).

 

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Holdings’ and its Subsidiaries’
operations and not for speculative purposes.

 

“DD Finance”  has the meaning assigned to that term in
the preamble.

 

11

 

“Declining Lender” has the meaning assigned to that term in Section 2.14(d).

 

“Default” means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.

 

“Deposit Account”
means each checking or other demand deposit account maintained by any of the
Credit Parties other than any Excluded Deposit Accounts.  All funds in each Deposit Account shall be conclusively
presumed to be Collateral and proceeds of Collateral and the Agents and the
Lenders shall have no duty to inquire as to the source of the amounts on
deposit in any Deposit Account.

 

“Disqualified Capital Stock” means with respect to any Person, (a) Capital
Stock of such Person that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event or the passage of time or both would be, required to be redeemed or
repurchased including at the option of the holder thereof by such Person or any
of its Subsidiaries, in whole or in part, on or prior to 91 days following the
Additional Term Loan Maturity Date and (b) any Capital Stock of any
Subsidiary of such Person other than any common equity with no preferences,
privileges, and no redemption or repayment provisions.  Notwithstanding the foregoing, any Capital
Stock of the Company that would constitute Disqualified Capital Stock solely
because the holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
shall not constitute Disqualified Capital Stock if the terms of such Capital
Stock provide that the Company may not repurchase or redeem any such Capital
Stock pursuant to such provisions prior to the prepayment of the Loans as are
required by this Agreement.

 

“Documentation Agent” has the meaning assigned to that term in the preamble
hereto.

 

“Dollars” and the sign “$” mean the lawful money of the
United States of America.

 

“Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.

 

“Eligible Assignee” means (i) any Lender, any Affiliate of any
Lender and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof), and Sponsor and any fund or
account affiliated with Sponsor (provided that, none of the Ares Limited
Partnership, the Limited Partnerships, and to the extent holding any Capital
Stock in Holdings, any other Ares Group Investor or Aurora Group Investor,
shall be deemed to be a “Lender” for purposes of voting on any matters
(including the granting of any consents or waivers) with respect to any of the
Credit Documents) and (ii) any commercial bank, insurance company,
investment or mutual fund or other entity that is an “accredited investor” (as
defined in Regulation D under the Securities Act) and which extends credit
or buys loans as one of its businesses; provided, no Affiliate of Holdings
(other than any existing Lender, Affiliate of such Lender, Sponsor or any fund
or account affiliated with Sponsor) shall be an Eligible Assignee.  Notwithstanding anything to the contrary in
the foregoing, the Borrower shall be an Eligible Assignee when Loans are
assigned pursuant to a Permitted Loan Purchase.

 

12

 

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of
ERISA which is or was sponsored, maintained or contributed to by, or required
to be contributed by, Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates.

 

“Environmental Claim” means any investigation, written notice, written
notice of violation, written claim, action, suit, proceeding, demand, abatement
order or other written order or written directive (conditional or otherwise),
by any Governmental Authority or any other Person, arising (i) pursuant to
or in connection with any actual or alleged violation of any Environmental Law;
(ii) in connection with any Hazardous Material or any actual or alleged
Hazardous Materials Activity; or (iii) in connection with any actual or
alleged damage, injury, threat or harm to health, safety, natural resources or
the environment.

 

“Environmental Laws” means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other requirements of Governmental Authorities relating to (i) environmental
matters, including those relating to any Hazardous Materials Activity; (ii) the
generation, use, storage, transportation or disposal of Hazardous Materials; or
(iii) occupational safety and health, land use or the protection of the
environment, in any manner applicable to Holdings or any of its Subsidiaries or
any Facility.

 

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

 

“ERISA Affiliate” means, as applied to any Person on or after the date
of the closing of the transactions contemplated by the Purchase Agreement, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue
Code of which that Person is a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of
the Internal Revenue Code of which that Person, any corporation described in
clause (i) above or any trade or business described in clause (ii) above
is a member.

 

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043(c) of
ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the PBGC has been
waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan; (iii) the provision by the administrator of
any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice
of intent to terminate such plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting in
liability to Holdings, any of its Subsidiaries or any of their respective
Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan; (vi) the
imposition, or the 

 

13

 

occurrence of any events
or condition that could reasonably be expected to result in the imposition, of
liability on Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason
of the application of Section 4212(c) of ERISA; (vii) the
occurrence of an act or omission which could give rise to the imposition on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
of fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Employee Benefit Plan (which
fines, penalties, taxes or related charges, for purposes of Section 4.18,
shall be material); (viii) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan or the assets
thereof, or against Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates in connection with any Employee Benefit Plan; (ix) receipt
from the Internal Revenue Service of notice of the failure of any Pension Plan
(or any other Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any Pension
Plan to qualify for exemption from taxation under Section 501(a) of
the Internal Revenue Code; or (x) the imposition of a Lien pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect
to any Pension Plan.

 

“Eurodollar Rate Loan” means a Loan bearing interest at a rate determined by
reference to the Adjusted Eurodollar Rate.

 

“Event of Default” means each of the conditions or events set forth in Section 8.1.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

 

“Excluded Deposit Accounts”
means, collectively, (a) Deposit Accounts established solely for the
purpose of funding payroll and trust accounts and funded solely with amounts
necessary to cover then outstanding payroll liabilities and amounts required to
be retained in such trust accounts, as well as minimum balance requirements; (b) Deposit
Accounts with amounts on deposit that, when aggregated with the amounts on
deposit in all other Deposit Accounts for which a Control Agreement has not
been obtained (other than those specified in clause (a) and (c)), do not
at any time exceed $4,000,000; (c) Deposit Accounts, with amounts on
deposit which in the aggregate that do not at any time exceed $1,000,000, held
at a financial institution that is not, for United Stated federal income tax
purposes (i) an individual who is a citizen or resident of the United
States or (ii) a corporation, partnership or other entity treated as a
corporation or partnership created or organized in or under the laws of the
United States, or any political subdivision thereof; (d) zero balance
disbursement accounts; and (e) Deposit Accounts, with amounts on deposit
which in the aggregate do not at any time exceed $500,000, the sole proceeds of
which are funds received by a Loan Party from credit card sales; provided that,
in each of the foregoing cases, if reasonably requested by the Collateral Agent
or the Administrative Agent, the Borrower shall provide such Agent with
periodic updates of the account numbers and names of all financial institutions
where such Deposit Accounts are maintained.

 

14

 

“Existing Credit
Agreement” means the Amended and Restated Credit and Guaranty
Agreement dated as of December 16, 2004, by and among Holdings, the
Borrower, certain subsidiaries of the Borrower as guarantors and Credit Suisse
as administrative agent, as previously amended, restated, amended and restated,
supplemental or modified prior to the Closing Date.

 

“Facility” means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.

 

“Fair Share” has the meaning assigned to that term in Section 7.2.

 

“Fair Share Contribution Amount” has the meaning assigned to that term in Section 7.2.

 

“Federal Funds Effective Rate” means for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided, (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.

 

“Financial Plan” has the meaning assigned to
that term in Section 5.1(i).

 

“First Amendment” means Amendment No. 1 to this Agreement dated as of December 19,
2008.

 

“First Amendment to Revolving Credit Facility”  means Amendment No. 1 to Revolving Credit Facility,
dated as of April 16, 2010 among Holdings, the Company,
Fisher, DD Finance and the lenders party thereto.

 

“First Offer” has the meaning assigned to that term in Section 2.14(d).

 

“First Priority” means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien
is the only Lien to which such Collateral is subject, other than any Permitted
Lien.

 

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

 

“Fiscal Year” means the fiscal year of Holdings and its Subsidiaries ending on December 31
of each calendar year.

 

“Fisher” has the
meaning assigned to that term in the preamble.

 

15

 

“Fixed Charge Coverage Compliance Certificate” means a Compliance Certificate
substantially in the form of Exhibit M.

 

“Fixed Charge Coverage Ratio” means the ratio of (a) the aggregate amount of
Consolidated Adjusted EBITDA for the Test Period to (b) the aggregate
Consolidated Fixed Charges during the Test Period.

 

“Flood Hazard Property” means any Real Estate Asset subject to a mortgage in
favor of Collateral Agent, for the benefit of the Lenders, and located in an
area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.

 

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

 

“Funding Guarantors” has the meaning assigned to that term in Section 7.2.

 

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

 

“GAAP”
means, subject to the limitations on the application thereof set forth in Section 1.2,
United States generally accepted accounting principles in effect as of the date
of determination thereof.

 

“Governmental Authority” means any federal, state, municipal, national or
other government, governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in each
case whether associated with a state of the United States, the United States,
or a foreign entity or government.

 

“Governmental Authorization” means any permit, license, authorization, plan,
directive, consent order or consent decree of or from any Governmental
Authority.

 

“Grantor” has the meaning assigned to that term in the Pledge and Security
Agreement.

 

“Guaranteed Obligations”  has the meaning assigned to that term in Section 7.1.

 

“Guarantor” means each of (i) Holdings, and (ii) each Guarantor Subsidiary
from time to time party to this Agreement.

 

“Guarantor Subsidiary” means 
(i) Fisher, (ii)  DD Finance, (iii) each Domestic
Subsidiary of Holdings (other than Borrower), and (iv) to the extent no
adverse tax consequences to Company would result therefrom, each Foreign
Subsidiary of Holdings.

 

“Guaranty” means the guaranty of each Guarantor set forth in Section 7.

 

“Hazardous Materials” means any chemical, material, waste or substance,
exposure to which is prohibited, limited or regulated by any Governmental
Authority.

 

16

 

“Hazardous Materials Activity” means any past, current or threatened activity, event
or occurrence involving any Hazardous Materials, including the use,
manufacture, possession, storage, presence, Release, threatened Release,
discharge, placement, generation, transportation, processing, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.

 

“Hedge Agreement” means an Interest Rate Agreement or a Currency
Agreement entered into with a Lender Counterparty.

 

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to any Lender which are presently in effect or, to
the extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.

 

“Holdings” has the meaning assigned to that term in the preamble hereto.

 

“Holdings Equity Proceeds”
means the proceeds of any sale of Capital Stock (other than
Disqualified Capital Stock) of Holdings following the Second Amendment
Effective Date (and excluding any proceeds of the Qualifying IPO), in each case, only to the extent that (i) such
proceeds are held by Holdings in the form of cash or Cash Equivalents, (ii) such
proceeds are not contributed  by Holdings
to the Company or any Subsidiary and (iii) the Restricted Payment Amount
is not increased in respect of such proceeds.

 

“Increased-Cost Lenders” has the meaning assigned to that term in Section 2.22.

 

“Indebtedness” as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes payable
and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money (excluding accounts payable which
are classified as current liabilities in accordance with GAAP and accrued
expenses in each case incurred in the ordinary course of business); (iv) any
obligation owed for all or any part of the deferred purchase price of property
or services (excluding any such obligations incurred under ERISA or with
respect to earn-outs incurred and paid when due in connection with Permitted
Acquisitions), which purchase price is due more than six months from the date
of incurrence of the obligation in respect thereof; (v) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person; (vi) the
face amount of any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings; (vii) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another; (viii) any
obligation of such Person the primary purpose or intent of which is to provide
assurance to an obligee that the obligation of the obligor thereof will be paid
or discharged, or any agreement relating thereto will be complied with, or the
holders thereof will be protected (in whole or in part) against loss 

 

17

 

in respect thereof; (ix) any
liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (a) to purchase, repurchase or otherwise acquire
such obligation or any security therefore, or to provide funds for the payment
or discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (b) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under subclauses (a) or
(b) of this clause (ix), the primary purpose or intent thereof is as
described in clause (viii) above; (x) all net payment obligations of
such Person in respect of any exchange traded or over the counter derivative
transaction, including, without limitation, any Interest Rate Agreement and
Currency Agreement, whether entered into for hedging or speculative purposes;
(xi) the principal balance outstanding under any synthetic lease, tax retention
lease, off-balance sheet loan or similar off-balance sheet financing product;
and (xii) the indebtedness of any partnership or Joint Venture in which such
Person is a general partner or a joint venturer except to the extent that the
terms of such indebtedness provide that such indebtedness is nonrecourse to
such Person.

 

“Indemnified Liabilities” has the meaning assigned to that term in Section 10.3(a).

 

“Indemnitee” has the meaning assigned to that term in Section 10.3(a).

 

“Installment” has the meaning assigned to that term in Section 2.11.

 

“Intellectual Property”
means all patents, trademarks, service marks, tradenames, domain names, trade
secrets, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries.

 

“Intercreditor Agreement” shall mean the Intercreditor Agreement in
the form of Exhibit L.

 

“Interest Payment Date” means with respect to (i) any Base Rate Loan,
the last Business Day in each of March, June, September and December of
each year through the final maturity date of such Loan; and (ii) any
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan; provided, in the case of each Interest Period of longer than three
months “Interest Payment Date” shall also include each date that is three
months, or an integral multiple thereof, after the commencement of such
Interest Period.

 

“Interest Period” means, in connection with a Eurodollar Rate Loan, an
interest period of one-, two-, three- or six-months, as selected by Borrower in
the applicable Funding Notice or Conversion/Continuation Notice, (i) initially,
commencing on the Credit Date or Conversion/Continuation Date thereof, as the
case may be; and (ii) thereafter, commencing on the day on which the
immediately preceding Interest Period expires; provided, (a) if an
Interest Period would otherwise expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day unless no
further Business Day occurs in such month, in which case such Interest Period
shall expire on the immediately preceding Business Day; (b) any Interest
Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (c), of this
definition, end on the last Business Day of a 

 

18

 

calendar month; (c) no
Interest Period with respect to any portion of any Term Loan (other than any
Additional Term Loan) shall extend beyond the Maturity Date and (d) no
Interest Period with respect to any portion of any Additional Term Loan shall
extend beyond the Additional Term Loan Maturity Date.

 

“Interest Rate Agreement” means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate hedging agreement
or other similar agreement or arrangement, each of which is for the purpose of
hedging the interest rate exposure associated with Holdings’ and its
Subsidiaries’ operations and not for speculative purposes.

 

“Interest Rate Determination Date” means, with respect to any Interest Period, the date
that is two (2) Business Days prior to the first day of such Interest
Period.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter, and any successor statute.

 

“Investment” means (i) any direct or indirect purchase or other acquisition by
Holdings or any of its Subsidiaries of, or of a beneficial interest in, any of
the Securities of any other Person (including any Subsidiary of Holdings); (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Holdings from any Person other than Company or any
Guarantor Subsidiary, of any Capital Stock of such Subsidiary; and (iii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Holdings or any of
its Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost
of all additions thereto minus the amount of any return of capital with respect
to such Investment, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.

 

“Investment Conditions” means (i) the
Consolidated Coverage Ratio is not less than 2.0 to 1.0 and (ii) the
Leverage Ratio is not greater than 5.0 to 1.0.

 

“Joint Venture” means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided,
in no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.

 

“Lender”
has the meaning assigned to that term in the preamble hereto, and shall include
any other Person that becomes a party hereto pursuant to an Assignment
Agreement or the Term Loan Joinder Agreement.

 

“Lender Counterparty” means each
Lender or any Affiliate of a Lender counterparty to a Hedge Agreement
(including any Person who is a Lender (and any Affiliate thereof) as of the
Closing Date but subsequently, whether before or after entering into a Hedge
Agreement, ceases to be a Lender).

 

19

 

“Leverage Ratio” means the ratio as of the date of determination of (i) Consolidated
Total Debt, less unrestricted Cash and Cash Equivalents of Company and its
Subsidiaries as of such day in excess of $1,000,000, the contents of which are
in a Blocked Account, to (ii) Consolidated Adjusted EBITDA for the Test
Period most recently ended.

 

“Lien”
means any lien, mortgage, pledge, assignment, security interest, charge or
encumbrance of any kind (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, and any lease in the
nature thereof) and any option, trust or other preferential arrangement having
the practical effect of any of the foregoing.

 

“Loan”
means a Term Loan.

 

“Loan Purchase Limit” means (a) prior to the date that
the Borrower delivers to Administrative Agent a written certification of its
Net Cash Balance as of December 31, 2008 in form reasonably satisfactory
to Administrative Agent, $45,200,000, and (b) after such date, the sum of
the Net Cash Balance as of December 31, 2008 plus the aggregate principal
balance of all Loans purchased prior to such date pursuant to Permitted Loan
Purchases plus 50% of accrued Consolidated Excess Cash Flow for Fiscal Year
2009.

 

“Management Services Agreement” means the Amended and Restated Management Services
Agreement dated April 12, 2004 between Holdings and Sponsor, as it may be
amended, supplemented or otherwise modified from time to time.

 

“Margin Stock” has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.

 

“Material Adverse Effect” means a material adverse effect upon (i) the
business, operations, properties, assets or condition (financial or otherwise)
of Holdings and its Subsidiaries taken as a whole; (ii) the ability of any
Credit Party to perform its Obligations; (iii) the legality, validity,
binding effect or enforceability against a Credit Party of a Credit Document to
which it is a party; or (iv) the rights, remedies and benefits available
to, or conferred upon, any Agent and any Lender or any Secured Party under any
Credit Document.

 

“Maturity Date”
means May 21, 2013.

 

“Maximum Restricted Payment
Amount” means, for any four Fiscal Quarter period, (1) $24,000,000,
if Consolidated Adjusted EBITDA is greater than or equal to $30,000,000 and
less than or equal to $40,000,000 for the Test Period, (2) $12,000,000, if
Consolidated Adjusted EBITDA is greater than or equal to $27,000,000 but less
than $30,000,000 for the Test Period, (3) $8,000,000, if Consolidated
Adjusted EBITDA is greater than or equal to $25,000,000 but less than
$27,000,000 for the Test Period, and (4) $0, if Consolidated Adjusted
EBITDA is less than $25,000,000 for the Test Period.

 

“Moody’s” means Moody’s Investor Services, Inc.

 

“Mortgage” means a Mortgage substantially in the form of Exhibit J, as it
may be amended, supplemented or otherwise modified from time to time.

 

20

 

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer
plan” as defined in Section 3(37) or Section 4001(a)(3) of
ERISA.

 

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount
equal to: (i) Cash payments (including any Cash received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by Holdings or any of its
Subsidiaries from such Asset Sale, minus (ii) any bona fide direct
costs incurred in connection with such Asset Sale, including, without
limitation, (a) income taxes estimated in good faith by the seller thereof
to be payable by the seller as a result of any gain recognized in connection
with such Asset Sale, (b) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Loans) that is secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset Sale, (c) brokerage
fees and legal expenses incurred directly attributable to such Asset Sale; and (d) any
reserves required to be established by the seller thereof in accordance with
GAAP against liabilities reasonably anticipated and directly attributable to
the Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under indemnification obligations associated with such
Asset Sale.

 

“Net Cash Balance” means, at any time, the (a) sum of all Cash and
Cash Equivalents held by Credit Parties minus (b) the sum of the aggregate
principal amount of loans outstanding under the Revolving Credit Facility plus
the aggregate maximum amount which may be drawn under all letters of credit
issued under the Revolving Credit Facility.

 

“Net Insurance/Condemnation Proceeds” means an amount equal to:  (i) any Cash payments or proceeds
received by Holdings or any of its Subsidiaries (a) under any casualty
insurance policy in respect of a covered loss thereunder or (b) as a
result of the taking of any assets of Holdings or any of its Subsidiaries by
any Person pursuant to the power of eminent domain, condemnation or otherwise,
or pursuant to a sale of any such assets to a purchaser with such power under
threat of such a taking, minus (ii) (a) any actual and
reasonable costs incurred by Holdings or any of its Subsidiaries in connection
with the adjustment or settlement of any claims of Holdings or such Subsidiary
in respect thereof, and (b) any bona fide direct costs incurred in
connection with any sale of such assets as referred to in clause (i)(b) of
this definition, including income taxes estimated in good faith by the seller
thereof to be payable as a result of any gain recognized in connection
therewith.

 

“Non-US Lender” has the meaning assigned to that term in Section 2.19(c).

 

“Note”
means a Term Loan Note.

 

“Notice”
means a Funding Notice or a Conversion/Continuation Notice.

 

“Obligations” means all obligations of every nature of each Credit Party from time
to time owed to the Agents (including former Agents), the Lenders or any of
them, or to any Lender Counterparties, under any Credit Document, whether for
principal, interest (including interest which, but for the filing of a petition
in bankruptcy with respect to such Credit Party, would have accrued on any
Obligation, whether or not a claim is allowed against such Credit 

 

21

 

Party for such interest
in the related bankruptcy proceeding), payments for fees, expenses,
indemnification or otherwise.

 

“Obligee Guarantor” has the meaning assigned to that term in Section 7.7.

 

“Organizational Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, and (iv) with respect to any limited liability
company, its articles of organization, as amended, and its operating agreement,
as amended.  In the event any term or
condition of this Agreement or any other Credit Document requires any
Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such “Organizational Document”
shall only be to a document of a type customarily certified by such governmental
official.

 

“PBGC”
means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Pension Plan” means any Employee Benefit Plan which is subject to Section 412
of the Internal Revenue Code or Section 302 of ERISA.

 

“Perfection
Deliverables” means, with respect to any Credit Party, or any Person
that becomes a Credit Party pursuant to Section 5.10 and to the extent
required to be delivered under such Section:

 

(i)                                     evidence satisfactory to Collateral Agent of the compliance
by such Credit Party of its obligations under the Pledge and Security Agreement
and the other Collateral Documents (including, without limitation, its
obligations (A) to execute and deliver (x) UCC financing statements, (y) originals
of securities, instruments and chattel paper and (z) any agreements
governing deposit and/or securities accounts as provided therein, and (B) to
file intellectual property security agreements with the United States Patent
and Trademark Office and the United States Copyright Office);

 

(ii)          (A) to
the extent required to be delivered by the Collateral Agent, the results of
searches, by Persons satisfactory to Collateral Agent, of all effective UCC
financing statements (or equivalent filings), fixture filings and all judgment
and tax lien filings which may have been made with respect to any personal or
mixed property of such Credit Party, and of filings with the United States
Patent and Trademark Office and the United States Copyright Office, together
with copies of all such filings disclosed by such searches, and (B) UCC
termination statements (or similar documents), releases to be filed with the
United States Patent and Trademark Office and the 

 

22

 

United States Copyright Office, and other filings duly
executed by all applicable Persons for filing in all applicable jurisdictions
and offices as may be necessary to terminate any effective UCC financing
statements (or equivalent filings) and other filings disclosed in such searches
(other than any such financing statements in respect of Permitted Liens);

 

(iii)       to the
extent required to be delivered by the Collateral Agent, opinions of counsel
(which counsel shall be reasonably satisfactory to Collateral Agent) with
respect to the creation and perfection of the security interests in favor of
Collateral Agent in the Collateral of such Credit Party and such other matters
as Collateral Agent may reasonably request, in each case in form and substance
reasonably satisfactory to Collateral Agent; and

 

(iv)      evidence
that such Credit Party shall have taken or caused to be taken any other action,
executed and delivered or caused to be executed and delivered any other
agreement, document and instrument (including without limitation, any
intercompany notes evidencing Indebtedness permitted to be incurred pursuant to
Section 6.1(b)) and made or caused to be made any other filing and
recording (other than as set forth herein) reasonably required by Collateral
Agent.

 

“Periodic Dividend Amount” means (x) $16,000,000 minus (y) the
sum of the aggregate amount of Restricted Payments made pursuant to Section 6.5(d)(i) during
the Fiscal Quarter in which the subject Restricted Payment is to be paid and
the three Fiscal Quarters most recently ended.

 

“Permitted Acquisition” means any acquisition by Company or any of its
wholly-owned Guarantor Subsidiaries, whether by purchase, merger or otherwise,
of all or substantially all of the assets of, all of the Capital Stock of, or a
business line or unit or a division of, any Person; provided, that: (i) immediately
prior to, and after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing or would result therefrom; (ii) all
transactions in connection therewith shall be consummated, in all material respects,
in accordance with all applicable laws and in conformity with all applicable
Governmental Authorizations; (iii) in the case of the acquisition of
Capital Stock, all of the Capital Stock (except for any such Securities in the
nature of directors’ qualifying shares required pursuant to applicable law)
acquired or otherwise issued by such Person or any newly formed Subsidiary of
Company in connection with such acquisition shall be owned not less than 80% by
Company or a Guarantor Subsidiary thereof, and Company shall have taken, or
caused to be taken, each of the actions (and within the time periods) set forth
in Sections 5.10 and/or 5.11, as applicable; (iv) any Person or assets or
division as acquired in accordance herewith shall be in same business or lines
of business in which Company and/or its Subsidiaries are engaged as of the
Closing Date or any business reasonably related thereto; and (v) each such
Permitted Acquisition shall be 

 

23

 

effectuated pursuant to
the terms of a consensual merger or stock purchase agreement or other
consensual acquisition agreement between the Company or the applicable
Subsidiary and the applicable seller or Person being so acquired.

 

“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

 

“Permitted Loan Purchase” means one or more purchases by the
Borrower of Loans that are not yet due and owing to any Lender; provided that (i) each
offer to purchase Loans shall be for a minimum principal amount of not less
than $5,000,000 (although the Loans actually purchased pursuant to such offer
may be less than $5,000,000 if less than that amount is submitted for sale by
Lenders in response to such purchase offer), (ii) the aggregate principal
amount of all such purchases shall not exceed the lesser of (x) $50,000,000
and (y) Loan Purchase Limit then in effect, (iii) all such purchases
shall be consummated on or before December 31, 2009, (iv) such
purchases shall be implemented pursuant to an offer in the form of Exhibit A
attached to the First Amendment, which offer is made to all Lenders; provided
that the initial Permitted Loan Purchase shall be implemented pursuant to an
offer in the form of Exhibit B attached to the First Amendment, (v) the
Borrower shall not borrow under the Revolving Credit Facility for the purpose
of funding any such Permitted Loan Purchase and (vi) the Borrower and the
assigning Lender(s) shall have executed and delivered to Administrative
Agent an Assignment Agreement pursuant to Section 10.6(d).  Notwithstanding anything to the contrary in
the foregoing, clauses (i) and (iv) of the preceding sentence will
not apply with respect to Permitted Loan Purchases of up to $5,000,000 in
aggregate principal amount purchased, provided such purchases otherwise meet
the foregoing definition of a “Permitted Loan Purchase”.

 

“Permitted Refinancing”  means, with respect to any Indebtedness,
extensions, renewals, refinancings or replacements of such Indebtedness
provided that such extensions, renewals, refinancings or replacements (i) are
on terms and conditions (including the terms and conditions of any guarantees
of or other credit support for such Indebtedness) not materially less favorable
taken as a whole to Company and its Subsidiaries, the Agents or the Lenders
than the terms and conditions of the Indebtedness being extended, renewed,
refinanced or replaced, (ii) do not add as an obligor any Person that
would not have been an obligor under the Indebtedness being extended, renewed
replaced or refinanced, (iii) do not result in a greater principal amount
or shorter remaining average life to maturity than the Indebtedness being
extended, renewed replaced or refinanced and (iv) are not effected at any
time when a Default or Event of Default has occurred and is continuing or would
result therefrom.

 

“Person”
means and includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships,
joint stock companies, Joint Ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations, whether
or not legal entities, and Governmental Authorities.

 

“Phase I Report” means, with respect to any Facility, a report that (i) conforms
to the ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process, E 1527, (ii) was conducted no more
than six months prior to the date such report is required to be delivered
hereunder, by one or more environmental consulting firms 

 

24

 

reasonably satisfactory
to Administrative Agent, (iii) includes an assessment of
asbestos-containing materials at such Facility, (iv) is accompanied by (a) an
estimate of the reasonable worst-case cost of investigating and remediating any
Hazardous Materials Activity identified in the Phase I Report as giving rise to
an actual or potential material violation of any Environmental Law or as
presenting a material risk of giving rise to a material Environmental Claim,
and (b) a current compliance audit setting forth an assessment of Holdings’,
its Subsidiaries’ and such Facility’s current and past compliance with
Environmental Laws and an estimate of the cost of rectifying any non-compliance
with current Environmental Laws identified therein and the cost of compliance
with reasonably anticipated future Environmental Laws identified therein.

 

“Pledge and Security Agreement” means the Pledge and Security Agreement dated as of
the Closing Date by Borrower and each Guarantor, substantially in the form of Exhibit I,
as it may be amended, supplemented or otherwise modified from time to time.

 

“Prepayment Amount” has the meaning assigned to that term in Section 2.14(d).

 

“Prime Rate” means the rate of interest per annum announced from time to time by
Credit Suisse as its prime commercial lending rate in effect at its principal
office in New York City.  The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer.  Credit
Suisse or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.

 

“Principal Office” means, Administrative Agent’s “Principal Office” as
set forth on Appendix B, or such other office as Administrative Agent may from
time to time designate in writing to Borrower and each Lender.

 

“Projections” has the meaning assigned to that term in Section 4.8.

 

“Pro Rata Share” means: with respect to all payments, computations and
other matters relating to the Term Loans of any Lender, the percentage obtained
by dividing (a) the Term Loan Exposure of that Lender by (b) the
aggregate Term Loan Exposure of all Lenders. 
For all other purposes with respect to each Lender, “Pro Rata Share”
means the percentage obtained by dividing (A) an amount equal to the sum
of the Term Loan Exposure of that Lender, by (B) an amount equal to the
sum of the aggregate Term Loan Exposure of all Lenders.

 

“Qualifying IPO” means the consummation of
the first underwritten public offering of the Capital Stock (other than
Disqualified Capital Stock) of Holdings following the Closing Date pursuant to
a registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act.

 

“Qualifying IPO Payment” means,
concurrent with the closing of a Qualifying IPO, the one-time payment to
Sponsor in connection with the termination of the Management Services Agreement
in an aggregate amount not to exceed $6,000,000.

 

“Qualifying Preferred Stock Redemption” means,
concurrent with the closing of a Qualifying IPO, the payment of $1,000 to
Aurora Equity Partners II L.P. and $1,000 to Ares Limited Partnership in
respect of the redemption of the one share of Series B Preferred Stock and

 

25

 

Series C
Preferred Stock held by Aurora Equity Partners II L.P. and the Ares Limited
Partnership, respectively.

 

“Qualifying Senior Notes Redemption” means,
concurrent with the closing of a Qualifying IPO, the Borrower and DD Finance (i) have
given irrevocable and unconditional notice of redemption for all of the
outstanding Senior Notes, (ii) have timely and irrevocably deposited or
caused to be deposited with the trustee under the Senior Notes Indenture proceeds
of a Qualifying IPO, proceeds of Additional Term Loans, Cash and/or proceeds of
Revolving Loans (as defined in the Revolving Credit Facility) sufficient to pay
and discharge the entire indebtedness (including all principal, premium, if
any, and accrued interest) on all outstanding Senior Notes and (iii) have
satisfied all other conditions precedent to the discharge of the Senior Notes
Indenture set forth in Section 8.8 of the Senior Notes Indenture.

 

“Real Estate Asset” means, at any time of determination, any interest
(fee, leasehold or otherwise) then owned by any Credit Party in any real
property.

 

“Real Estate Asset Deliverables” means, with
respect to any Real Estate Asset acquired by any Credit Party, or held by any
Person that becomes a Credit Party, and to the extent required to be delivered
pursuant to Section 5.11:

 

(i)             fully
executed and notarized Mortgages, in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering such Real
Estate Asset;

 

(ii)          at
the request of the Collateral Agent, an opinion of counsel (which counsel shall
be reasonably satisfactory to Collateral Agent) in each state in which such
Real Estate Asset is located with respect to the enforceability of the form(s) of
Mortgages to be recorded in such state and such other matters as Collateral
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to Collateral Agent;

 

(iii)       at the
request of the Collateral Agent, (a) ALTA mortgagee title insurance
policies or unconditional commitments therefore issued by one or more title
companies reasonably satisfactory to Collateral Agent with respect to such Real
Estate Asset, in amounts satisfactory to the Collateral Agent with respect to
such Real Estate Asset, together with a title report issued by a title company
with respect thereto (each, a “Title Policy”)
and dated as of a recent date prior to the date which such Real Estate Asset is
acquired or such Person becomes a Credit Party, as the case may be, and copies
of all recorded documents listed as exceptions to title or otherwise referred
to therein, each in form and substance reasonably satisfactory to Collateral
Agent and (b) evidence satisfactory to Collateral Agent that such Credit
Party has paid to 

 

26

 

the title company or to the appropriate governmental
authorities all expenses and premiums of the title company and all other sums
required in connection with the issuance of each Title Policy and all recording
and stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Mortgages for such Real Estate Asset in the
appropriate real estate records;

 

(iv)      evidence of
flood insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, in form and substance reasonably satisfactory to
Collateral Agent; and

 

(v)         at the
request of the Collateral Agent, ALTA surveys of such Real Estate Asset,
certified to Collateral Agent and dated as of a recent date which such Real
Estate Asset is acquired or such Person becomes a Credit Party, as the case may
be.

 

“Register” has the meaning assigned to that term in Section 2.6(b).

 

“Regulation D” means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.

 

“Related Fund” means, with respect to any Lender that is an
investment fund, any other investment fund or similar investment vehicle that
invests in commercial loans and that is managed or advised by (i) the
Lender, (ii) an Affiliate of Lender or (iii) the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

 

“Related Lender Assignment” has the meaning assigned to that term in Section 10.6(c).

 

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement
of any Hazardous Material through the air, soil, surface water or groundwater.

 

“Replacement Lender” has the meaning assigned to that term in Section 2.22.

 

“Requisite Lenders” means one or more Lenders having or holding Term Loan
Exposure and representing more than 50% of the sum of the aggregate Term Loan
Exposure of all Lenders.

 

27

 

“Restricted Payment” means (i) any dividend or other distribution
(including, for the avoidance of doubt, any payment pursuant to Section 6.5(d)),
direct or indirect, on account of any shares of any class of stock (or of any
other Capital Stock) of Holdings or Company now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock to the holders
of that class; (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock (or of any other Capital Stock) of Holdings or
Company now or hereafter outstanding; (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock (or of any other Capital Stock) of
Holdings or Company now or hereafter outstanding; (iv) management or
similar fees payable to Sponsor or any of its Affiliates; and (v) any
payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Indebtedness
permitted pursuant to Sections 6.1(b), 6.1(e) (in respect of Indebtedness
incurred under Sections 6.1(b), 6.1(k) (to the extent constituting
subordinated Indebtedness) or 6.1(m)), 6.1(k) (to the extent constituting
subordinated Indebtedness) or 6.1(m). 
Notwithstanding anything to the contrary contained herein, (i) the
redemption of the Senior Notes pursuant to the Qualifying Senior Notes
Redemption shall not be treated as a Restricted Payment for any purpose
hereunder, (ii) the Qualifying IPO Payment shall not be treated as a
Restricted Payment for any purpose hereunder, and (iii) the redemption by
Holdings of any preferred stock of Holdings pursuant to a Qualifying Preferred
Stock Redemption shall not be treated as a Restricted Payment for any purpose
hereunder.

 

“Restricted Payment Amount”  means, as of any date of determination,
an amount set forth on the Restricted Payment Certificate delivered to the
Administrative Agent no later than 10:00 a.m. (New York City time) at
least three (3) Business Days in advance of the payment date of the
transaction giving rise to a determination of the Restricted Payment Amount
(which can be less than zero), equal to (a) the difference (but not less
than zero) between (i) Restricted Payment EBITDA and (ii) the product
of 2.0 multiplied by Cumulative Interest Expense (determined, in each case, for
the period commencing on the first day of the first full Fiscal Quarter after
the Closing Date through and including the last full Fiscal Quarter (taken as
one accounting period) preceding such date of determination), plus (b) 100%
of  the aggregate net cash proceeds
received by the Company from a capital contribution or sale of Capital Stock to
Holdings after the Closing Date, plus (c) except in each case, in
order to avoid duplication, to the extent any such payment or proceeds have
been included in the calculation of Restricted Payment EBITDA, an amount equal
to the net amounts received in respect of Investments made under Section 6.7(l) or
6.7(m) in any Person resulting from cash distributions on or cash
repayments of any Investments, including payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other distributions or other
transfers of assets, in each case to Company, DD Finance, Fisher or any of
their respective Subsidiaries or from the net cash proceeds from the sale of
any such Investment, not to exceed, in each case, the amount of Investments
previously made by Company, DD Finance, Fisher or any of their respective
Subsidiaries in such Person, less the cost of disposition (and excluding
Investments in Subsidiaries), minus (d) the sum of (i) the
aggregate amount of Restricted Payments made pursuant to Sections 6.5(a)(ii) (other
than to the Company or a wholly-owned Subsidiary Guarantor) and 6.5(c)(iv); and
(ii) (without duplication) amounts applied or utilized pursuant to Section 6.5(d)(i),
Section 6.5(f), Section 6.7(l) or Section 6.7(m) or Section 6.16(d).  For 

 

28

 

purposes of this
definition, (i) the amount of any payment or Investment made or returned
hereunder, if other than in cash, shall be the fair market value thereof, as
determined in the good faith reasonable judgment of the board of directors of
the Company (or similar governing body) for such payments or Investments with a
value in excess of $1.0 million, and otherwise by an executive officer of the
Company at the time made or returned, as applicable, (ii) interest with respect
to Capital Leases shall be deemed to accrue at an interest rate reasonably
determined in good faith by the Company to be the rate of interest implicit in
such Capital Lease in accordance with GAAP and (iii) interest expense
attributable to any Indebtedness represented by the guarantee by the Company or
any of its Subsidiaries of an obligation of another Person shall be deemed to
be the interest expense attributable to the Indebtedness guaranteed.   Notwithstanding anything to the contrary
contained herein, (i) the redemption of the Senior Notes pursuant to the
Qualifying Senior Notes Redemption shall not reduce the Restricted Payment
Amount for any purpose hereunder, (ii) the Qualifying IPO Payment shall
not reduce the Restricted Payment Amount for any purpose hereunder, (iii) the
proceeds of a Qualifying IPO shall not increase the Restricted Payment Amount
for any purpose hereunder, and (iv) the redemption of preferred stock of
Holdings pursuant to the Qualifying Preferred Stock Redemption shall not reduce
the Restricted Payment Amount for any purpose hereunder.

 

“Restricted Payment
Certificate” means a Restricted Payment Certificate substantially in
the form of Exhibit K.

 

“Restricted Payment EBITDA” means, for any period and without duplication, (a) Consolidated
Adjusted EBITDA for such period, plus (b) the sum of each of the
following to the extent deducted in the calculation of Consolidated Net Income
for such period, (i) all losses which are non-recurring, (ii) interest
attributable to Attributable Indebtedness, and (iii) the amount of all
dividends accrued or payable (whether or not in cash) by the Company or any of
its Subsidiaries in respect of preferred stock (other than (A) dividends
on Capital Stock (other than Disqualified Capital Stock) of the Company or such
Subsidiary payable solely in Capital Stock (other than Disqualified Capital
Stock) of the Company or such Subsidiary, as applicable, and (B) dividends
by Subsidiaries of the Company to the Company or its wholly-owned
Subsidiaries), plus (c) the aggregate amount of interest income of
the Company and its Subsidiaries during such period paid in cash to the extent
reducing Consolidated Adjusted EBITDA minus (d) all gains which are
non-recurring (including any gain from the issuance or sale of any Capital
Stock) to the extent included in the calculation of Consolidated Net Income for
such period.

 

“Revolving Credit Document” all documents,
instruments or agreements executed and delivered by Holdings or any of its
subsidiaries for the benefit of any agent or lender in connection with the
Revolving Credit Facility.

 

“Revolving Credit Facility”
means the $60.0 million senior secured revolving credit facility pursuant to
the revolving credit agreement dated as of the Closing Date among Holdings, the
Company, Fisher, DD Finance, the lenders party thereto, Credit Suisse as
administrative agent and JPMorgan Chase Bank, N.A., as collateral agent, as it
may be amended, modified, refinanced or replaced from time to time, including
amendments increasing the principal amount of revolving loans available
thereunder.

 

29

 

“RP Conditions” means (i) the
sum of (x) the aggregate amount of Cash of the Borrower in Deposit
Accounts subject to a Blocked Account Agreement and (y) Excess
Availability (as defined in the Revolving Credit Facility) is at least
$12,000,000; provided, that Excess Availability will be calculated without
giving effect to any Cash, and (ii) the Leverage Ratio is less than 6.0 to
1.0.

 

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

 

“Second Amendment” means Amendment No. 2 to Credit and
Guaranty Agreement, dated as of April 16, 2010, among the Company and the
Lenders party thereto.

 

“Second Amendment Effective Date” means the date on which the
Second Amendment became effective in accordance with its terms.

 

“Second Offer” has the meaning assigned to that term in Section 2.14(d).

 

“Second Priority” means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien
is the only Lien to which such Collateral is subject, other than any Permitted
Lien.

 

“Secured Debt Ratio” means the ratio as of the date of
determination of (i) Consolidated Secured Debt, less unrestricted Cash and
Cash Equivalents of the Company and its Subsidiaries in excess of $1,000,000,
the contents of which are in a Blocked Account, as of such date, to (ii) Consolidated
Adjusted EBITDA for the Test Period most recently ended.

 

“Secured Parties” has the meaning assigned to that term in the Pledge
and Security Agreement.

 

“Section 6.5(d) Certificate” means a
certificate of an Authorized Officer (i) certifying that the conditions to
the making of a Restricted Payment set forth in Section 6.5(d)(i) have
been satisfied and (ii) designating the portion of such Restricted Payment
made in reliance upon (x) the Periodic Dividend Amount and (y) the
Restricted Payment Amount.  Any such
designation made pursuant to clause (ii) of the preceding sentence shall
be permanent.

 

“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended from
time to time, and any successor statute.

 

“Senior Notes”  means the Senior Notes issued pursuant to
the Senior Notes Indenture.

 

30

 

“Senior Notes Indenture”  means that certain Indenture dated as of December 16,
2004, by and among the Company, DD Finance and U.S. Bank National Association,
as Indenture Trustee, governing the Company’s 7 3⁄4% Senior Notes due 2012.

 

“Solvency Certificate”  means a Solvency Certificate of the chief
financial officer of Holdings and Borrower substantially in the form of Exhibit G.

 

“Solvent” means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (z) not
less than the amount that will be required to pay the probable liabilities on
such Person’s then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (ii) such Person’s capital is not unreasonably
small in relation to its business or any contemplated or undertaken transaction;
and (iii) such Person has not incurred and does not intend to incur, or
believe (nor should it reasonably believe) that it will incur, debts beyond its
ability to pay such debts as they become due (whether at maturity or
otherwise); and (B) such Person is “solvent” within the meaning given that
term and similar terms under applicable laws relating to fraudulent transfers
and conveyances.  For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

 

“Sponsor” means, collectively, the Aurora Group Investors, the  Ares Group Investors and the Affiliates
(without giving effect to clause (i) of the last sentence of the
definition of such term) of Aurora Management Partners LLC or Ares Management
LLC.

 

“Subject Transaction” has the meaning assigned to that term in Section 6.8(c)(i).

 

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof; provided, in determining the percentage of
ownership interests of any Person controlled by another Person, no ownership
interest in the nature of a “qualifying share” of the former Person shall be
deemed to be outstanding.

 

“Tax”
means, with respect to any Person, any present or future tax, levy, impost,
duty, assessment, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided, however, solely for
purposes of Sections 2.18 and 2.19, the foregoing shall not include (a) taxes
imposed on or measured by such Person’s overall net income (however
denominated), and franchise taxes imposed on such Person (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such Person is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office 

 

31

 

is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which Company is located and (c) in
the case of a Non-US Lender, any withholding tax that is imposed on amounts
payable to such Lender at the time such Lender becomes a party hereto (or
designates a new lending office) or is attributable to such Lender’s failure
(other than as a result of a Change in Law) to comply with Section 2.19(c),
except to the extent that such Lender (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from Company with respect to such withholding tax pursuant
to Section 2.19(a) or Section 2.19(b).

 

“Term Loan” means, collectively, the Term Loans outstanding on the Second Amendment
Effective Date (other than Additional Term Loans made pursuant to the Second
Amendment) and the Additional Term Loans.

 

“Term Loan Commitment” means the commitment of a Lender to make or otherwise
fund any Term Loan and “Term Loan Commitments”  means such commitments of all
Lenders in the aggregate.

 

“Term Loan Exposure” means, with respect to any Lender as of any date of
determination, the outstanding principal amount of the Term Loans of such
Lender; provided, at any time prior to the making of the Additional Term
Loans, the Term Loan Exposure of any Lender shall be equal to the principal
amount of the Term Loans of such Lender outstanding on the Second Amendment
Effective Date (other than Additional Term Loans) plus such Additional Lender’s
Term Loan Commitment.

 

“Term Loan Joinder
Agreement” means the Term Loan Joinder Agreement,  dated as of the Second Amendment Effective
Date, among the Company, the Administrative Agent and the Lenders party
thereto.

 

“Term Loan Note” means a promissory note in the form of Exhibit B,
as it may be amended, supplemented or otherwise modified from time to time.

 

“Term Priority Collateral”  has the meaning assigned to that term in the Intercreditor
Agreement.

 

“Terminated Lender”  has the meaning assigned to that term in Section 2.22.

 

“Test Period” means, at any time, the four Fiscal Quarters last
ended (in each case taken as one accounting period) for which financial
statements are required to have been delivered, pursuant to Section 5.1(b).

 

“Title Policy” has the meaning assigned to that term in the
definition of “Real Estate Asset Deliverables.”

 

“Type of Loan” means a Base Rate Loan or a Eurodollar Rate Loan.

 

“UCC”
means the Uniform Commercial Code (or any similar or equivalent legislation) as
in effect in any applicable jurisdiction.

 

32

 

1.2          Accounting
Terms.  Except as
otherwise expressly provided herein, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity with GAAP.  Financial statements and other information
required to be delivered by Holdings to Lenders pursuant to Section 5.1(b) and
5.1(c) shall be prepared in accordance with GAAP as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in Section 5.1(e), if applicable).  Subject to the foregoing, calculations in
connection with the definitions, covenants and other provisions hereof shall
utilize accounting principles and policies in conformity with those used to
prepare the most recent financial statements referred to in Section 4.7;
provided that, solely for purposes of calculating the Restricted Payment
Amount, the terms used in, or otherwise relating to, the definition of “Restricted
Payment Amount” shall, except as otherwise expressly provided herein, have the
meanings assigned to them in conformity with GAAP as in effect from time to
time.

 

1.3          Interpretation,
etc.  Any of the terms defined herein
may, unless the context otherwise requires, be used in the singular or the
plural, depending on the reference. 
References herein to any Section, Appendix, Schedule or Exhibit shall
be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be,
hereof unless otherwise specifically provided. 
The use herein of the word “include” or “including,” when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
no limiting language (such as “without limitation” or “but not limited to” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.

 

SECTION 2.         LOANS

 

2.1          Term
Loans.

 

(a)           Loan
Commitments.  Subject to the terms
and conditions hereof, (i) each Lender existing on the Closing Date made a
Term Loan to the Company on the Closing Date, and (ii) each Additional
Term Loan Lender has, pursuant to the Term Loan Joinder Agreement, severally
agreed to make, on the Second Amendment Effective Date, an Additional Term Loan
to the Company in an amount equal to such Lender’s Additional Term Loan
Commitment as set forth in the Term Loan Joinder Agreement.  Any amount borrowed under this Section 2.1(a) and
subsequently repaid or prepaid may not be reborrowed.  Subject to Sections 2.11, 2.12 and 2.13, (i) all
amounts owed hereunder with respect to the Term Loans (other than the
Additional Term Loans) shall be paid in full no later than the Maturity Date
and (ii) all amounts owed hereunder with respect to the Additional Term
Loans shall be paid in full no later than the Additional Term Loan Maturity
Date.  Each Lender’s Additional Term Loan
Commitment shall terminate immediately and without further action on the Second
Amendment Effective Date after giving effect to the funding of such Lender’s
Additional Term Loan Commitment pursuant to the Term Loan Joinder Agreement on
such date.

 

33

 

(b)           Borrowing
Mechanics for Term Loans.

 

(i)            In the
case of Term Loans (other than Additional Term Loans), Company shall deliver to
Administrative Agent a fully executed and delivered Funding Notice no later
than 10:00 a.m. (New York City time) at least (x) three (3) Business
Days in advance of the Closing Date in the case of a Eurodollar Rate Loan to be
made on the Closing Date or (y) one (1) Business Day in advance of
the Closing Date in the case of a Base Rate Loan to be made on the Closing
Date.  Promptly upon receipt by
Administrative Agent of such Funding Notice, Administrative Agent shall notify
each Lender of the proposed borrowing. 
In the case of Additional Term Loans, the borrowing procedures are set
forth in the Term Loan Joinder Agreement.

 

(c)           In
the case of Term Loans (other than Additional Term Loans) each Lender shall
make its Term Loan available to Administrative Agent not later than 12:00 p.m.
(New York City time) on the Closing Date by wire transfer of same day funds in
Dollars, at Administrative Agent’s Principal Office.  Except as provided herein, upon satisfaction
or waiver of the conditions precedent specified herein, Administrative Agent
shall make the proceeds of the Term Loans (other than Additional Term Loans)
available to Company on the Closing Date by causing an amount of same day funds
in Dollars equal to the proceeds of all such Loans received by Administrative
Agent from Lenders to be credited to the account of Company at Administrative
Agent’s Principal Office or to such other account as may be designated in such
Funding Notice.

 

2.2          [RESERVED]

 

2.3          [RESERVED]

 

2.4          Pro
Rata Shares; Availability of Funds.

 

(a)           Pro
Rata Shares.  All Loans shall be
made, and all participations purchased, by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being understood that
no Lender shall be responsible for any default by any other Lender in such
other Lender’s obligation to make a Loan requested hereunder or purchase a
participation required hereby nor shall any Term Loan Commitment of any Lender
be increased or decreased as a result of a default by any other Lender in such
other Lender’s obligation to make a Loan requested hereunder or purchase a
participation required hereby.

 

(b)           Availability
of Funds.  Unless Administrative
Agent shall have been notified by any Lender prior to the applicable Credit
Date that such Lender does not intend to make available to Administrative Agent
the amount of such Lender’s Loan requested on such Credit Date, Administrative
Agent may assume that such Lender has made such amount available to
Administrative Agent on such Credit Date and Administrative Agent may, in its
sole discretion, but shall not be obligated to, make available to Borrower a
corresponding amount on such Credit Date. 
If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each

 

34

 

day from such Credit Date until the date such amount is paid
to Administrative Agent, at the customary rate set by Administrative Agent for
the correction of errors among banks for three (3) Business Days and
thereafter at the Base Rate.  If such
Lender does not pay such corresponding amount forthwith upon Administrative
Agent’s demand therefor, Administrative Agent shall promptly notify Borrower
and Borrower shall immediately pay such corresponding amount to Administrative
Agent together with interest thereon, for each day from such Credit Date until
the date such amount is paid to Administrative Agent, at the rate applicable to
such Loan.  Nothing in this Section 2.4(b) shall
be deemed to relieve any Lender from its obligation to fulfill its Term Loan
Commitments hereunder or to prejudice any rights that Borrower may have against
any Lender as a result of any default by such Lender hereunder.

 

2.5          Use of
Proceeds.  The proceeds of Term Loans drawn on the
Closing Date shall be used to repay outstanding obligations under the Existing
Credit Agreement and pay transaction expenses. 
The proceeds of Additional Term Loans shall be used to repay
outstanding Senior Notes.  No portion of
the proceeds of any Credit Extension shall be used in any manner that causes or
might cause such Credit Extension or the application of such proceeds to
violate Regulation T, Regulation U or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation thereof or
to violate the Exchange Act.

 

2.6          Evidence
of Debt; Register; Lenders’ Books and Records; Notes.

 

(a)           Lenders’
Evidence of Debt.  Each Lender shall
maintain on its internal records an account or accounts evidencing the
Obligations of Borrower to such Lender, including the amounts of the Loans made
by it and each repayment and prepayment in respect thereof.  Any such recordation shall be conclusive and
binding on Borrower, absent manifest error; provided, that the failure
to make any such recordation, or any error in such recordation, shall not
affect any Borrower’s Obligations in respect of any applicable Loans; and provided
further, in the event of any inconsistency between the Register and any
Lender’s records, the recordations in the Register shall govern.

 

(b)           Register.  Administrative Agent shall maintain at its
Principal Office a register for the recordation of the names and addresses of
Lenders and Loans of each Lender from time to time (the “Register”).  In the case of a
Related Lender Assignment described in Section 10.6(e) that is not
reflected in the Register, the assigning Lender shall maintain a comparable
register, which shall be made available for inspection by Administrative Agent
at any reasonable time and from time to time upon reasonable prior notice to
such Lender.  The Register shall be
available for inspection by Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice. 
Administrative Agent shall record in the Register the Loans, and each
repayment or prepayment in respect of the principal amount of the Loans, and
any such recordation shall be conclusive and binding on Borrower and each
Lender, absent manifest error; provided, failure to make any such
recordation, or any error in such recordation, shall not affect Borrower’s
Obligations in respect of any Loan. 
Borrower hereby designates Credit Suisse to serve as Borrower’s agent
solely for purposes of maintaining the Register as provided in this Section 2.6,
and Borrower hereby agrees that, to

 

35

 

the extent Credit Suisse serves in such capacity, Credit
Suisse and its officers, directors, employees, agents and affiliates shall
constitute “Indemnitees.”

 

(c)           Notes.  If so requested by any Lender by written
notice to Borrower at least two (2) Business Days prior to the Closing
Date, or at any time thereafter, Borrower shall execute and deliver to such
Lender (and/or, if applicable and if so specified in such notice, to any Person
who is an assignee of such Lender pursuant to Section 10.6, other than an
assignee party to a Related Lender Assignment described in Section 10.6(e))
on the Closing Date (or, if such notice is delivered after the Closing Date,
promptly after Borrower’s receipt of such notice) a Note or Notes to evidence
such Lender’s Term Loan.

 

2.7          Interest
on Loans.

 

(a)           Except
as otherwise set forth herein, each Term Loan shall bear interest on the unpaid
principal amount thereof from the date made through repayment (whether by
acceleration or otherwise) thereof as follows:

 

(i)             if
a Base Rate Loan, at the Base Rate plus the Applicable Margin; or

 

(ii)          if
a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the Applicable
Margin.

 

(b)           The
basis for determining the rate of interest with respect to any Loan, and the
Interest Period with respect to any Eurodollar Rate Loan, shall be selected by
Borrower and notified to Administrative Agent and Lenders pursuant to the
applicable Funding Notice or Conversion/Continuation Notice, as the case may
be.  If on any day a Loan is outstanding
with respect to which a Conversion/Continuation Notice has not been delivered
to Administrative Agent in accordance with the terms hereof specifying the
applicable basis for determining the rate of interest, then for that day such
Loan shall be a Base Rate Loan.

 

(c)           In
connection with Eurodollar Rate Loans there shall be no more than ten (10) Interest
Periods outstanding at any time.  In the
event Borrower fails to specify between a Base Rate Loan or a Eurodollar Rate
Loan in the applicable Funding Notice or Conversion/Continuation Notice, such
Loan (if outstanding as a Eurodollar Rate Loan) will be automatically converted
into a Base Rate Loan on the last day of the then-current Interest Period for
such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan).  In the event Borrower fails to specify an
Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice
or Conversion/Continuation Notice, Borrower shall be deemed to have selected an
Interest Period of one month.  As soon as
practicable after 10:00 a.m. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall,

 

36

 

absent manifest error, be final, conclusive and binding upon
all parties) the interest rate that shall apply to the Eurodollar Rate Loans
for which an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Borrower and each Lender.

 

(d)           Interest
payable pursuant to Section 2.7(a) shall be computed (i) in the
case of Base Rate Loans at times when the Base Rate is based on the Prime Rate
on the basis of a 365-day or 366-day year, as the case may be, and (ii) in
the case of Eurodollar Rate Loans, and Base Rate Loans at times when the Base
Rate is based on the Federal Funds Effective Rate, on the basis of a 360-day
year, in each case for the actual number of days elapsed in the period during
which it accrues.  In computing interest
on any Loan, the date of the making of such Loan or the first day of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided,
if a Loan is repaid on the same day on which it is made, one day’s interest
shall be paid on that Loan.

 

(e)           Except
as otherwise set forth herein, interest on each Loan shall be payable in
arrears on and to (i) each Interest Payment Date applicable to such Loan; (ii) upon
any prepayment of such Loan that is a Eurodollar Rate Loan, whether voluntary
or mandatory, to the extent accrued on the amount being prepaid; and (iii) at
maturity, including final maturity.

 

(f)            To
the extent any other Credit Document references “Loans”, “Term Loans” or loans
made under this Agreement for purposes of determining the applicable interest
rate (excluding any reference in connection with the payment of interest on the
principal amount of the Loans) and without specifying whether such reference is
intended to mean “Term Loans” or “Additional Term Loans”, each such reference
shall be interpreted to mean “Additional Term Loans”.

 

2.8          Conversion/Continuation.

 

(a)           Subject
to Section 2.17 and so long as no Default or Event of Default shall have
occurred and then be continuing, Borrower shall have the option:

 

(i)             to
convert at any time all or any part of any Term Loan equal to $2,000,000 and
integral multiples of $500,000 in excess of that amount from one Type of Loan
to another Type of Loan; provided, a Eurodollar Rate Loan may only be
converted on the expiration of

 

37

 

the Interest Period applicable to such Eurodollar Rate Loan
unless Borrower shall pay all amounts due under Section 2.17 in connection
with any such conversion; or

 

(ii)          upon
the expiration of any Interest Period applicable to any Eurodollar Rate Loan,
to continue all or any portion of such Loan equal to $2,000,000 and integral
multiples of $500,000 in excess of that amount as a Eurodollar Rate Loan.

 

(b)           Borrower
shall deliver a Conversion/Continuation Notice to Administrative Agent no later
than 10:00 a.m. (New York City time) at least one Business Day in advance
of the proposed conversion date (in the case of a conversion to a Base Rate
Loan) and at least three (3) Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan).  Except as
otherwise provided herein, a Conversion/Continuation Notice for conversion to,
or continuation of, any Eurodollar Rate Loans (or telephonic notice in lieu
thereof) shall be irrevocable, and Borrower shall be bound to effect a
conversion or continuation in accordance therewith.

 

2.9          Default
Interest.  Upon the
occurrence and during the continuance of an Event of Default under Sections
8.1(a), 8.1(f) or 8.1(g), the principal amount of all Loans outstanding
and, to the extent permitted by applicable law, any interest payments on the
Loans not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable on demand at a rate that is 2% per annum in excess of the interest rate
otherwise payable hereunder with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable hereunder for Base Rate Loans
constituting Term Loans (other than Additional Term Loans) or Additional Term
Loans, as applicable); provided, in the case of Eurodollar Rate Loans,
upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable
upon demand at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Base Rate Loans constituting Term Loans (other
than Additional Term Loans) or Additional Term Loans, as applicable.  Payment or acceptance of the increased rates
of interest provided for in this Section 2.9 is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent, Collateral Agent or any Lender.

 

2.10        Fees.  Company agrees to pay to
Arranger and Agents such other fees and other payments in the amounts and at
the times separately agreed upon.

 

2.11        Scheduled
Term Loan Payments.  The
principal amounts of the Term Loans shall be repaid in consecutive quarterly
installments in amounts equal to 0.25% of the Term

 

38

 

Loans funded on the Closing Date or the Second Amendment Effective
Date, as applicable, on the last day of each Fiscal Quarter, with the balance of
the Term Loans (other than the Additional Term Loans) payable on the Maturity
Date and the balance of the Additional Term Loans payable on the Additional
Term Loan Maturity Date (each of such consecutive quarterly installments and
the payment of the balances on the Maturity Date and the Additional Term Loan
Maturity Date, an “Installment”).

 

Notwithstanding
the foregoing, (x) such Installments shall be reduced pro rata in
connection with any voluntary or mandatory prepayments of the Term Loans in
accordance with Sections 2.12, 2.13 and 2.14, as applicable; (y) the Term
Loans (other than the Additional Term Loans), together with all other amounts
owed hereunder with respect thereto, shall, in any event be paid in full no
later than the Maturity Date and (z) the Additional Term Loans, together
with all other amounts owed hereunder with respect thereto, shall, in any event
be paid in full no later than the Additional Term Loan Maturity Date.

 

2.12        Voluntary
Prepayments.

 

(a)           Voluntary
Prepayments.

 

(i)             Any
time and from time to time:

 

(1)       with respect
to Base Rate Loans, Borrower may prepay any such Loans on any Business Day in
whole or in part, in an aggregate minimum amount of $2,000,000 and integral
multiples of $500,000 in excess of that amount; and

 

(2)       with respect
to Eurodollar Rate Loans, Borrower may prepay any such Loans on any Business
Day in whole or in part in an aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that amount;

 

(ii)          All
such prepayments shall be made:

 

(1)       upon not less
than one (1) Business Day’s prior written or telephonic notice in the case
of Base Rate Loans; and

 

(2)       upon not less
than three (3) Business Days’ prior written or telephonic notice in the
case of Eurodollar Rate Loans;

 

in each case given to Administrative Agent by 12:00 p.m.
(New York City time) on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent (and

 

39

 

Administrative Agent will promptly notify each
Lender).  Upon the giving of any such
notice (which notice shall be irrevocable), the principal amount of the Loans
specified in such notice shall become due and payable on the prepayment date specified
therein.  Any such voluntary prepayment
shall be applied as specified in Section 2.14(a).

 

2.13        Mandatory
Prepayments.

 

(a)           Asset
Sales.  No later than the first
Business Day following the date of receipt by Holdings or any of its
Subsidiaries of any Net Asset Sale Proceeds, Company shall offer to prepay the
Loans as set forth in Sections 2.14(b) and 2.14(d) in an aggregate
amount equal to such Net Asset Sale Proceeds; provided, so long as no
Default or Event of Default shall have occurred and be continuing on or as of
such first Business Day, Company shall have the option (exercisable upon
written notice thereof to Administrative Agent on or prior to such first
Business Day), directly or through one or more of its Subsidiaries, to invest
Net Asset Sale Proceeds within three hundred and sixty five (365) days of
receipt thereof in long-term productive assets of the general type used in the
business of Company and its Subsidiaries or to make capital expenditures in
connection with improvement of capital assets of Company or any of its Subsidiaries
(it being expressly agreed that any Net Asset Sale Proceeds not so invested
shall be immediately offered to be applied as set forth in Sections 2.14(b) and
2.14(d)); provided, further, pending any such investment at any
time that Net Asset Sale Proceeds not so invested shall equal or exceed
$5,000,000 in the aggregate, an amount equal to all such Net Asset Sale
Proceeds shall be deposited by Company, unless waived by Administrative Agent
in its sole discretion, in a deposit account maintained at Administrative Agent
as part of the Collateral (it being understood that, (x) so long as no
Default or Event of Default shall have occurred and be continuing,
Administrative Agent shall release or consent to the release of such funds to
Company upon delivery to Administrative Agent of a certificate of an officer of
Company certifying that such funds shall, upon release of such funds, be
applied in accordance this Section 2.13(a) and (y) to the extent
such amounts are not applied in accordance with, and at the times required by,
this Section 2.13(a), all such funds then held by Administrative Agent
shall be immediately applied by Administrative Agent, or immediately paid over
to Administrative Agent to be applied, as set forth in Section 2.14(b)); provided,
further, that notwithstanding the foregoing, the Net Asset Sale Proceeds
from any sale leaseback transaction permitted pursuant to Section 6.1(n) hereof
shall be offered to be applied as set forth in Sections 2.15(b) and
2.14(d).

 

(b)           Insurance/Condemnation
Proceeds.  No later than the first
Business Day following the date of receipt by Holdings or any of its
Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds, Company shall offer to prepay the Loans as set
forth in Sections 2.14(b) and 2.14(d) in an aggregate amount equal to
such Net Insurance/Condemnation Proceeds; provided, so long as no
Default or Event of Default shall have occurred and be continuing on or as of
such first Business Day, Company shall have the option (exercisable upon
written notice thereof to Administrative Agent on or prior to such first
Business Day), directly or through one or more of its Subsidiaries to invest
such Net Insurance/Condemnation Proceeds within three hundred and sixty five
(365) days of receipt thereof in long-term productive assets of the general
type used in the business of Holdings and its

 

40

 

Subsidiaries, which investment may include the repair,
restoration or replacement of the applicable assets thereof (it being expressly
agreed that any Net Insurance/Condemnation Proceeds not so invested shall
immediately be offered to be applied as set forth in Sections 2.14(b) and
2.14(d)); provided, further, pending any such investment at any
time that Net Insurance/Condemnation Proceeds not so invested shall equal or
exceed $5,000,000 in the aggregate, an amount equal to all such Net
Insurance/Condemnation Proceeds shall be deposited by Company, unless waived by
Administrative Agent in its sole discretion, in a deposit account maintained at
Administrative Agent (it being understood that, (x) so long as no Default
or Event of Default shall have occurred and be continuing, Administrative Agent
shall release or consent to the release of such funds to Company upon delivery
to Administrative Agent of a certificate of an officer of Company certifying
that such funds shall, upon release of such funds, be applied in accordance
this Section 2.13(b) and (y) to the extent such amounts are not
applied in accordance with, and at the times required by, this Section 2.13(b),
all such funds then held by Administrative Agent shall be immediately applied
by Administrative Agent, or immediately paid over to Administrative Agent to be
applied, as set forth in Section 2.14(b)).

 

(c)           Issuance
of Debt.  No later than the first
Business Day following the date of receipt by Holdings or any of its
Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of
Holdings or any of its Subsidiaries (other than with respect to any
Indebtedness permitted to be incurred pursuant to Section 6.1), Company
shall offer to prepay the Loans as set forth in Sections 2.14(b) and 2.14(d) in
an aggregate amount equal to 100% of such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses.

 

(d)           Consolidated
Excess Cash Flow.  In the event that
there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing
with Fiscal Year 2008), Company shall, no later than one hundred fifty (150)
days after the end of such Fiscal Year, offer to prepay the Loans as set forth
in Sections 2.14(b) and 2.14(d) in an aggregate amount equal to 50%
of such Consolidated Excess Cash Flow.

 

(e)           Prepayment
Certificate.  Concurrently with any
prepayment of the Loans pursuant to Sections 2.13(a) through 2.13(d),
Company shall deliver to Administrative Agent a certificate of an Authorized
Officer demonstrating the calculation of the amount of the applicable net
proceeds or Consolidated Excess Cash Flow as the case may be.  In the event that Company shall subsequently
determine that the actual amount received exceeded the amount set forth in such
certificate, Company shall promptly make an additional prepayment of the Loans
and Company shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.

 

2.14        Application
of Prepayments/Reductions.

 

(a)           Application
of Voluntary Prepayments.  Any
prepayment of any Loan pursuant to Section 2.12 shall be applied to prepay
Term Loans on a pro rata basis to the remaining scheduled Installments of
principal of the Term Loans.

 

41

 

(b)           Application
of Mandatory Prepayments.  Subject to
Section 2.14(d), any prepayment of any Loan pursuant to Section 2.13
shall be applied to prepay Term Loans on a pro rata basis to the remaining
scheduled Installments of principal of the Term Loans.

 

(c)           Application
of Prepayments of Loans to Base Rate Loans and Eurodollar Rate Loans.  Considering each Class of Loans being
prepaid separately, any prepayment thereof shall be applied first to Base Rate
Loans to the full extent thereof before application to Eurodollar Rate Loans,
in each case in a manner which minimizes the amount of any payments required to
be made by Borrower pursuant to Section 2.17(c).

 

(d)           Lender
Opt-out.  With respect to any
prepayment of Term Loans pursuant to Section 2.13, any Lender, at its
option, may elect not to accept such prepayment.  Upon the dates set forth in Section 2.13
for any such prepayment of Term Loans, the Borrower shall notify the
Administrative Agent of the amount that is available to prepay the Term Loans
(the “Prepayment
Amount”). 
Promptly after the date of receipt of such notice, the Administrative
Agent shall provide written notice (the “First Offer”)
to the Lenders of the amount available to prepay the Term Loans.  Any Lender declining such prepayment (a “Declining Lender”) shall give written notice thereof to the Administrative
Agent by 11:00 a.m. no later than two (2) Business Days after the
date of such notice from the Administrative Agent.  On such date the Administrative Agent shall
then provide written notice (the “Second Offer”)
to the Lenders other than the Declining Lenders (such Lenders being the “Accepting Lenders”) of the additional amount available (due to such Declining
Lenders’ declining such prepayment) to prepay Term Loans owing to such
Accepting Lenders, such available amount to be allocated on a pro rata basis
among the Accepting Lenders that accept the Second Offer.  Any Lender declining prepayment pursuant to
such Second Offer shall give written notice thereof to the Administrative Agent
by 11:00 a.m. no later than one (1) Business Day after the date of
such notice of a Second Offer.  The
Borrower shall prepay the Loans as set forth in Section 2.13 within one
Business Day after its receipt of notice from the Administrative Agent of the
aggregate amount of such prepayment. 
Amounts remaining after the allocation of accepted amounts with respect
to the First Offer and the Second Offer to Accepting Lenders  shall
be retained by the Borrower.

 

2.15        General
Provisions Regarding Payments.

 

(a)           All
payments by Borrower of principal, interest, fees and other Obligations shall
be made in Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative Agent not
later than 12:00 p.m. (New York City time) on the date due at
Administrative Agent’s Principal Office for the account of Lenders; funds
received by Administrative Agent after that time on such due date shall be
deemed to have been paid by Borrower on the next succeeding Business Day, at
Administrative Agent’s sole discretion.

 

42

 

(b)                                 All payments in respect of the principal amount of any Loan
shall be accompanied by payment of accrued interest on the principal amount
being repaid or prepaid.

 

(c)                                  Administrative Agent shall promptly distribute to each Lender
at such address as such Lender shall indicate in writing, such Lender’s
applicable Pro Rata Share of all payments and prepayments of principal and
interest due hereunder, together with all other amounts due thereto, including,
without limitation, all fees payable with respect thereto, to the extent
received by Administrative Agent.

 

(d)                                 Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.

 

(e)                                  Subject to the provisos set forth in the definition of “Interest
Period,” whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.

 

(f)                                    Administrative Agent, at its sole discretion, shall deem any
payment by or on behalf of Borrower hereunder that is not made in same day
funds prior to 12:00 p.m. (New York City time) to be a non-conforming
payment.  Any such payment shall not be
deemed to have been received by Administrative Agent until the later of (i) the
time such funds become available funds, and (ii) the applicable next
Business Day.  Administrative Agent shall
give prompt telephonic notice to Borrower and each applicable Lender (confirmed
in writing) if any payment is non-conforming. 
Any non-conforming payment may constitute or become a Default or Event
of Default in accordance with the terms of Section 8.1(a).  Interest shall continue to accrue on any
principal as to which a non-conforming payment is made until such funds become
available funds (but in no event less than the period from the date of such
payment to the next succeeding applicable Business Day) at the rate determined
pursuant to Section 2.9 from the date such amount was due and payable
until the date such amount is paid in full.

 

(g)                                 If an Event of Default shall have occurred and not otherwise
been waived, and the maturity of the Obligations shall have been accelerated
pursuant to Section 8.1, all payments or proceeds received by Agents
hereunder in respect of any of the Obligations, shall be applied in accordance
with the application arrangements described in Section 7.2 of the Pledge
and Security Agreement.

 

(h)                                 It is confirmed and acknowledged that no Permitted Loan
Purchase (and the purchase price paid to any Lender in consideration of the
purchase of such Lender’s Loans in connection therewith) and no cancellation or
retirement of Loans acquired in any Permitted 

 

43

 

Loan Purchase shall constitute a payment or reduction of
Loans or Obligations for purposes of this Section 2.15 or any other
provision of this Agreement.

 

2.16                        Ratable Sharing.  Lenders hereby agree among themselves that,
except as otherwise provided in the Collateral Documents with respect to
amounts realized from the exercise of rights with respect to Liens on the
Collateral, if any of them shall, whether by voluntary payment (other than a
voluntary prepayment of Loans made and applied in accordance with the terms
hereof), through the exercise of any right of set-off or banker’s lien, by
counterclaim or cross action or by the enforcement of any right under the
Credit Documents or otherwise, or as adequate protection of a deposit treated
as cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to such Lender hereunder or under the other Credit
Documents (collectively, the “Aggregate Amounts Due” to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and
each other Lender of the receipt of such payment and (b) apply a portion
of such payment to purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously upon the receipt
by such seller of its portion of such payment) in the Aggregate Amounts Due to
the other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided,
if all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the bankruptcy
or reorganization of Borrower or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without
interest.  Borrower expressly consents to
the foregoing arrangement and agrees that any holder of a participation so
purchased may, so long as an Event of Default has occurred and is continuing,
exercise any and all rights of banker’s lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.

 

2.17                        Making or Maintaining Eurodollar
Rate Loans.

 

(a)                                  Inability to Determine Applicable Interest Rate.  In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Borrower and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Borrower
and Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Funding Notice or Conversion/Continuation Notice given by
Borrower with respect to the 

 

44

 

Loans in respect of which such determination was made shall
be deemed to be rescinded by Borrower.

 

(b)                                 Illegality or Impracticability of Eurodollar Rate Loans.  In the event that on
any date any Lender shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto but shall be made only after
consultation with Borrower and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful), or (ii) has become impracticable, as a result of
contingencies occurring after the date hereof which materially and adversely
affect the London interbank market or the position of such Lender in that
market, then, and in any such event, such Lender shall be an “Affected
Lender” and it
shall on that day give notice (by telefacsimile or by telephone confirmed in
writing) to Borrower and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).  Thereafter (1) the obligation of the
Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans
shall be suspended until such notice shall be withdrawn by the Affected Lender,
(2) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Borrower pursuant to a Funding
Notice or a Conversion/Continuation Notice, the Affected Lender shall make such
Loan as (or continue such Loan as or convert such Loan to, as the case may be)
a Base Rate Loan, (3) the Affected Lender’s obligation to maintain its
outstanding Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (4) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such
termination.  Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Borrower
pursuant to a Funding Notice or a Conversion/Continuation Notice, Borrower
shall have the option, subject to the provisions of Section 2.17(c), to
rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders
by giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly transmit to each other
Lender).  Except as provided in the
immediately preceding sentence, nothing in this Section 2.17(b) shall
affect the obligation of any Lender other than an Affected Lender to make or
maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance
with the terms hereof.

 

(c)                                  Compensation for Breakage or Non-Commencement of Interest
Periods. 
Borrower shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest
paid by such Lender to Lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss 

 

45

 

of anticipated profits) which such Lender may sustain: (i) if
for any reason (other than a default by such Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Funding
Notice or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Conversion/Continuation Notice or a telephonic request for
conversion or continuation; (ii) if any prepayment or other principal
payment of, or any conversion of, any of its Eurodollar Rate Loans occurs on a
date prior to the last day of an Interest Period applicable to that Loan; or (iii) if
any prepayment of any of its Eurodollar Rate Loans is not made on any date specified
in a notice of prepayment given by Borrower.

 

(d)                                 Booking of Eurodollar Rate Loans.  Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of
its branch offices or the office of an Affiliate of such Lender.

 

(e)                                  Assumptions Concerning Funding of Eurodollar Rate Loans.  Calculation of all
amounts payable to a Lender under this Section 2.17 and under Section 2.18
shall be made as though such Lender had actually funded each of its relevant
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America; provided,
however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.17 and under Section 2.18.

 

2.18                        Increased Costs; Capital
Adequacy.

 

(a)                                  Compensation For Increased Costs and Taxes.  Subject to the
provisions of Section 2.20 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
Governmental Authority, in each case that becomes effective after the Closing
Date, or compliance by such Lender with any guideline, request or directive
issued or made after the Closing Date by any central bank, other Governmental
Authority or quasi-governmental authority (whether or not having the force of
law) (any such event, a “Change in Law”): (i) subjects such Lender (or its applicable lending
office) to any additional Tax with respect to this Agreement or any of the
other Credit Documents or any of its obligations hereunder or thereunder or any
payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder; (ii) imposes,
modifies or holds applicable any reserve (including any marginal, emergency,
supplemental, special or other reserve), special deposit, compulsory loan, FDIC

 

46

 

insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Lender (other than any such reserve or other requirements with respect to
Eurodollar Rate Loans that are reflected in the definition of Adjusted
Eurodollar Rate); or (iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the London interbank market; and the
result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrower shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder.  Such Lender shall deliver to
Borrower (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts
owed to such Lender under this Section 2.18(a), which statement shall be
conclusive and binding upon all parties hereto absent manifest error.

 

(b)                                 Capital Adequacy Adjustment.  In the event that any Lender shall have
determined that any Change in Law regarding capital adequacy has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender’s Loans or participations therein or other obligations hereunder
with respect to the Loans to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five (5) Business
Days after receipt by Borrower from such Lender of the statement referred to in
the next sentence, Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Borrower (with
a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to
Lender under this Section 2.18(b), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.

 

2.19                        Taxes; Withholding, etc.

 

(a)                                  Payments to Be Free and Clear.  All sums payable by any Credit Party
hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax imposed, levied, collected, withheld or
assessed by or within the United States of America or any political subdivision
in or of the United States of America or any other jurisdiction from or to
which a payment is made by or on behalf of any Credit Party or by any
federation or 

 

47

 

organization of which the United States of America or any
such jurisdiction is a member at the time of payment.

 

(b)                                 Withholding of Taxes.  If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any Tax from
any sum paid or payable by any Credit Party to Administrative Agent or any
Lender under any of the Credit Documents: (i) Borrower shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as Borrower becomes aware of it; (ii) Borrower shall
pay any such Tax before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on any Credit Party) for
its own account or (if that liability is imposed on Administrative Agent or
such Lender, as the case may be) on behalf of and in the name of Administrative
Agent or such Lender; (iii) the sum payable by such Credit Party in
respect of which the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, Administrative Agent or such Lender, as
the case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made;
and (iv) within thirty (30) days after paying any sum from which it is
required by law to make any deduction or withholding, and within thirty (30)
days after the due date of payment of any Tax which it is required by clause (ii) above
to pay, Borrower shall deliver to Administrative Agent evidence satisfactory to
the other affected parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority; provided, no such
additional amount shall be required to be paid to any Lender under clause (iii) above
except to the extent that any change after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after
the effective date of the Assignment Agreement or Term Loan Joinder Agreement
pursuant to which such Lender became a Lender (in the case of each other
Lender) in any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Term Loan Joinder Agreement or Assignment Agreement, as the case may be,
in respect of payments to such Lender.

 

(c)                                  Evidence of Exemption From U.S. Withholding Tax.  Each Lender that is
not a United States Person (as such term is defined in Section 7701(a)(30)
of the Internal Revenue Code) for U.S. federal income tax purposes (a “Non-US
Lender”) shall
deliver to Administrative Agent for transmission to Borrower, on or prior to
the Closing Date (in the case of each Lender listed on the signature pages hereof
on the Closing Date) or on or prior to the date of the Assignment Agreement or
Term Loan Joinder Agreement pursuant to which it becomes a Lender (in the case
of each other Lender), and at such other times as may be necessary in the
determination of Borrower or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue
Service Form W-8BEN or W-8ECI (or any successor forms), properly completed
and duly executed by such Lender, and such other documentation required under
the Internal Revenue Code and reasonably requested by Borrower to establish
that such Lender is not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Credit Documents, or (ii) if
such 

 

48

 

Lender is not a “bank” or other Person described in Section 881(c)(3) of
the Internal Revenue Code and cannot deliver either Internal Revenue Service Form W-8ECI
pursuant to clause (i) above, a Certificate re Non-Bank Status together
with two original copies of Internal Revenue Service Form W-8BEN (or any
successor form), properly completed and duly executed by such Lender, and such
other documentation required under the Internal Revenue Code and reasonably
requested by Borrower to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Credit Documents.  Each Lender required to deliver any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters pursuant to this Section 2.19(c) hereby agrees,
from time to time after the initial delivery by such Lender of such forms,
certificates or other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall promptly deliver to
Administrative Agent for transmission to Borrower two new original copies of
Internal Revenue Service Form W-8BEN or W-8ECI, or a Certificate re
Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN
(or any successor form), as the case may be, properly completed and duly
executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Borrower to confirm or
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to payments to such Lender under the
Credit Documents, or notify Administrative Agent and Borrower of its inability
to deliver any such forms, certificates or other evidence.  Borrower shall not be required to pay any
additional amount to any Non-US Lender under Section 2.19(b)(iii) if
such Lender shall have failed (1) to deliver the forms, certificates or
other evidence referred to in the second sentence of this Section 2.19(c),
or (2) to notify Administrative Agent and Borrower of its inability to
deliver any such forms, certificates or other evidence, as the case may be; provided,
if such Lender shall have satisfied the requirements of the first sentence of
this Section 2.19(c) on the Closing Date, or on the date of the
Assignment Agreement or Term Loan Joinder Agreement pursuant to which it became
a Lender, as applicable, nothing in this last sentence of Section 2.19(c) shall
relieve Borrower of its obligation to pay any additional amounts pursuant this Section 2.19
in the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as
described herein.

 

2.20                        Obligation to Mitigate.  Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender to receive payments under Section 2.17,
2.18 or 2.19, it will, to the extent not inconsistent with the internal
policies of such Lender and any applicable legal or regulatory restrictions,
use reasonable efforts to (a) make, issue, fund or maintain its Credit
Extensions, including any Affected Loans, through another office of such
Lender, or (b) take such other measures as such Lender may deem reasonable,
if as a result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender pursuant to Section 2.17,
2.18 or 2.19 would be materially reduced and if, as 

 

49

 

determined by such Lender in its sole discretion, the making, issuing,
funding or maintaining of such Loans through such other office or in accordance
with such other measures, as the case may be, would not otherwise adversely
affect such Loans or the interests of such Lender; provided, such Lender
will not be obligated to utilize such other office pursuant to this Section 2.20
unless Borrower agrees to pay all incremental expenses incurred by such Lender
as a result of utilizing such other office as described in clause (i) above.  A certificate as to the amount of any such
expenses payable by Borrower pursuant to this Section 2.20 (setting forth
in reasonable detail the basis for requesting such amount) submitted by such
Lender to Borrower (with a copy to Administrative Agent) shall be conclusive
absent manifest error.

 

2.21                        Call Protection.  In the event that, after the
Second Amendment Effective Date, but on or prior to the first anniversary of
the Second Amendment Effective Date, any Lender receives (x) a prepayment
of principal of the Loans pursuant to Section 2.12 or 2.13(c) or (y) a
repayment of principal amount of the Loans as a result of the mandatory
assignment of such Loans in the circumstances described in Section 2.22
following the failure of such Lender to consent to an amendment of this
Agreement that would have the effect of reducing any of the Applicable Margin
with respect to such Loans, then in each case, at the time thereof, the
Borrower shall pay to such Lender a prepayment premium equal to 1.00 % of the
principal amount of such prepayment or repayment.

 

2.22                        Removal or Replacement of a
Lender.  Anything contained herein to
the contrary notwithstanding, in the event that: (a)(i) any Lender (an “Increased-Cost Lender”) shall give
notice to Representative that such Lender is an Affected Lender or that such
Lender is entitled to receive payments under Section 2.17, 2.18 or 2.19, (ii) the
circumstances which have caused such Lender to be an Affected Lender or which
entitle such Lender to receive such payments shall remain in effect, and (iii) such
Lender shall fail to withdraw such notice within five (5) Business Days
after Borrower’s request for such withdrawal; or (b) in connection with
any proposed amendment, modification, termination, waiver or consent with
respect to any of the provisions hereof as contemplated by Section 10.5(b),
the consent of Requisite Lenders shall have been obtained but the consent of
one or more of such other Lenders (each a “Non-Consenting Lender”) whose consent is required
shall not have been obtained; then, with respect to each such Increased-Cost
Lender or Non-Consenting Lender (the “Terminated Lender”), Borrower may, by giving
written notice to Administrative Agent and any Terminated Lender of its
election to do so, or Administrative Agent may, elect to cause such Terminated
Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Loans, if any, in full to one or more Eligible Assignees
satisfactory to Administrative Agent (each a “Replacement Lender”) in accordance with the
provisions of Section 10.6 and Terminated Lender shall pay any fees
payable thereunder in connection with such assignment; provided, (1) on
the date of such assignment, the Replacement Lender shall pay to Terminated
Lender an amount equal to the sum of (A) an amount equal to the principal
of, and all accrued interest on, all outstanding Loans of the Terminated
Lender, (B) an amount equal to all unreimbursed drawings that have been
funded by such Terminated Lender, together with all then unpaid interest with
respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.10;
(2) on the date of such assignment, Borrower shall pay any amounts payable
to such Terminated Lender pursuant to 

 

50

 

Section 2.17(c), 2.18 or 2.19, or otherwise as if it were a prepayment;
and (3) in the event such Terminated Lender is a Non-Consenting Lender,
each Replacement Lender shall consent, at the time of such assignment, to each
matter in respect of which such Terminated Lender was a Non-Consenting
Lender.  Upon the prepayment of all
amounts owing to any Terminated Lender, if any, such Terminated Lender shall no
longer constitute a “Lender” for purposes hereof; provided, any rights
of such Terminated Lender to indemnification hereunder shall survive as to such
Terminated Lender.

 

SECTION 3.                            CONDITIONS PRECEDENT

 

3.1                               Closing
Date.  The obligation of any Lender to
make a Credit Extension on the Closing Date is subject to the satisfaction, or
waiver in accordance with Section 10.5, of the following conditions on or
before the Closing Date:

 

(a)                                  Credit Documents.  Administrative Agent shall have received (i) sufficient
copies of this Agreement, executed and delivered by each applicable Credit
Party, the Agents and Lenders having Term Loan Commitments hereunder and, (ii) Notes,
if any, requested by any Lender pursuant to Section 2.6(c) in
connection with its Term Loan Commitments, executed and delivered by Borrower.

 

(b)                                 Organizational Documents; Incumbency.  Administrative Agent
shall have received (i) copies of each Organizational Document for each
Credit Party, certified as of a recent date prior to the Closing Date by the
appropriate governmental official or, as applicable, by an officer of such
Credit Party; (ii) signature and incumbency certificates of the officers
of each Credit Party executing the Credit Documents to which it is a party; (iii) resolutions
of the Board of Directors or similar governing body of each Credit Party
approving and authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents to which it is a party, certified as
of the Closing Date by its secretary or an assistant secretary as being in full
force and effect without modification or amendment; (iv) a good standing
certificate from the applicable Governmental Authority of each Credit Party’s
jurisdiction of incorporation, organization or formation and in each
jurisdiction in which it is qualified as a foreign corporation or other entity
to do business, each dated a recent date prior to the Closing Date; and (v) such
other documents as Administrative Agent may reasonably request.

 

(c)                                  Governmental Authorizations and Consents.

 

(i)             Each
Credit Party shall have obtained all Governmental Authorizations and all
consents of other Persons, in each case that are necessary or 

 

51

 

advisable in connection with the transactions contemplated
under this Agreement and each of the foregoing shall be in full force and
effect and in form and substance reasonably satisfactory to Administrative
Agent.

 

(ii)          Each
of the Lenders shall have received, at least five (5) Business Days in
advance of the Closing Date, all documentation and other information required
by Governmental Authorities under applicable “know-your-customer” and
anti-money laundering rules and regulations, including, without
limitation, as required by the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001.

 

(d)                                 Term Priority Collateral.  The Administrative Agent shall be satisfied
with the valid perfected First Priority security interest in favor of
Collateral Agent, for the benefit of Secured Parties, in the Term Priority
Collateral.

 

(e)                                  ABL Priority Collateral.  The Administrative Agent shall be satisfied
with the valid perfected Second Priority security interest in favor of
Collateral Agent, for the benefit of Secured Parties, in the ABL Priority
Collateral of each Credit Party.

 

(f)                                    Opinion of Counsel to Credit Parties.  Lenders and their respective
counsel shall have received originally executed copies of the favorable written
opinion of Gibson, Dunn & Crutcher LLP, counsel for Credit Parties, in
form and substance satisfactory to the Administrative Agent, dated as of the
Closing Date (and each Credit Party hereby instructs such counsel to deliver
such opinion to Agents and Lenders).

 

(g)                                 Fees.  Borrower shall have paid to Arranger and
Agents the fees and other amounts payable on the Closing Date referred to in Section 2.10.

 

(h)                                 Solvency Certificate.  On the Closing Date, Administrative Agent
shall have received a Solvency Certificate dated as of the Closing Date and
addressed to Administrative Agent and Lenders, in form, scope and substance
satisfactory to Administrative Agent, with appropriate attachments and
demonstrating that after giving effect to the transactions contemplated by the
Credit Documents and the Revolving Credit Documents, Borrower is and will be,
and Holdings and its Subsidiaries (on a consolidated basis) are and will be Solvent.

 

(i)                                     No Litigation.  There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any 

 

52

 

court or before any arbitrator or Governmental Authority
that, in the opinion of Administrative Agent, singly or in the aggregate, could
reasonably be expected to restrain, prevent or impose materially burdensome
conditions on the transactions contemplated by this Agreement or the other
Credit Documents.

 

(j)                                     No Material Adverse Effect. 
Since December 31, 2006, there shall not have occurred a material adverse effect upon the business, operations,
properties, assets or condition (financial or otherwise) of Company and its
Subsidiaries, taken as a whole.

 

(k)                                  Existing Credit Agreement
Prepayments.  The Administrative Agent shall be satisfied
that, concurrently with the borrowing of the Term Loans on the Closing Date,
the Existing Credit Agreement will be terminated, all Liens securing
obligations under the Existing Agreement will be released, and all obligations
under the Existing Credit Agreement repaid in full.

 

(l)                                     Completion of Proceedings.  All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent and its counsel shall be satisfactory in
form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.

 

(m)                               Revolving Credit Facility.  Borrower shall have entered into the
Revolving Credit Facility and the Revolving Credit Documents shall be
satisfactory to the Administrative Agent.

 

(n)                                 Blocked Account Agreement.  Enter into a Blocked Account Agreement with
respect to each Deposit Account of any Credit Party.

 

(o)                                 Closing Date Certificate.  The Administrative Agent shall have received
a certificate signed by the chief financial officer of the Borrower dated the
Closing Date, certifying (A) that the conditions specified in Section 3.1(a) have
been satisfied, (B) that the representations and warranties contained in Section 4
are true and correct and (C) that no event shall have occurred and be
continuing or would result from the consummation of the Credit Extensions on
the Closing Date that would constitute an Event of Default or a Default.

 

(p)                                 Funding Notice.  Administrative Agent shall have received a
fully executed and delivered Funding Notice.

 

53

 

(q)                                 Representations and Warranties.  As of the Closing Date, the representations
and warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true and correct in
all material respects on and as of such earlier date.

 

(r)                                    Event of Default or a Default.  As of the Closing Date, no event shall have
occurred and be continuing or would result from the consummation of the Credit
Extensions that would constitute an Event of Default or a Default.

 

Each Lender, by delivering
its signature page to this Agreement on the Closing Date, shall be deemed
to have acknowledged receipt of, and consented to and approved, each Credit
Document and each other document required to be approved on the Closing Date.

 

3.2                               Notices.  Any Notice shall be executed by an Authorized
Officer in a writing delivered to Administrative Agent.  In lieu of delivering a Notice, Borrower may
give Administrative Agent telephonic notice by the required time of any
proposed borrowing, conversion/continuation, as the case may be; provided
each such notice shall be promptly confirmed in writing by delivery of the
applicable Notice to Administrative Agent on or before the applicable date of
borrowing, continuation/conversion. 
Neither Administrative Agent nor any Lender shall incur any liability to
Borrower in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized on behalf of Borrower or for
otherwise acting in good faith.

 

SECTION 4.                            REPRESENTATIONS AND
WARRANTIES

 

In order to induce Lenders to enter into this
Agreement and to make each Credit Extension to be made thereby, each Credit
Party represents and warrants to each Lender, on the Closing Date and on each
Credit Date, that the following statements are true and correct:

 

4.1                               Organization;
Requisite Power and Authority; Qualification.  Each of Holdings and its Subsidiaries (a) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization as identified in Schedule 4.1 (subject to
such changes as are permitted by Section 6.9), (b) has all requisite
power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Credit
Documents to which it is a party and to carry out the transactions contemplated
thereby, and (c) is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had, and could not be reasonably expected
to have, a Material Adverse Effect.

 

54

 

4.2                               Capital
Stock and Ownership.  The Capital
Stock of each of Holdings and its Subsidiaries has been duly authorized and
validly issued and is fully paid and non-assessable.  Except as set forth on Schedule 4.2, as of
the date hereof, there is no existing option, warrant, call, right, commitment
or other agreement to which Holdings or any of its Subsidiaries is a party
requiring, and there is no membership interest or other Capital Stock of
Holdings or any of its Subsidiaries outstanding which upon conversion or
exchange would require, the issuance by Holdings or any of its Subsidiaries of
any additional membership interests or other Capital Stock of Holdings or any
of its Subsidiaries or other Securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase, a membership interest or
other Capital Stock of Holdings or any of its Subsidiaries.  Schedule 4.2 correctly sets forth the
ownership interest of Holdings and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date.

 

4.3                               Due
Authorization.  The
execution, delivery and performance of the Credit Documents have been duly
authorized by all necessary action on the part of each Credit Party that is a
party thereto.

 

4.4                               No
Conflict.  The
execution, delivery and performance by Credit Parties of the Credit Documents
to which they are parties and the consummation of the transactions contemplated
by the Credit Documents do not and will not (a) violate any provision of
any law or any governmental rule or regulation applicable to Holdings or
any of its Subsidiaries, any of the Organizational Documents of Holdings or any
of its Subsidiaries; (b) violate any order, judgment or decree of any
court or other agency of government binding on Holdings or any of its Subsidiaries
except to the extent such violation could not be reasonably expected to have a
Material Adverse Effect; (c) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Holdings or any of its Subsidiaries except to the
extent such violation could not reasonably be expected to have a Material
Adverse Effect; (d) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Holdings or any of its
Subsidiaries (other than any Liens created under any of the Credit Documents in
favor of Collateral Agent, on behalf of Secured Parties); or (e) require
any approval of stockholders, members or partners or any approval or consent of
any Person under any Contractual Obligation of Holdings or any of its
Subsidiaries, except for such approvals or consents which will be obtained on
or before the Closing Date and disclosed in writing to Lenders.

 

4.5                               Governmental
Consents.  The
execution, delivery and performance by Credit Parties of the Credit Documents
to which they are parties and the consummation of the transactions contemplated
by the Credit Documents do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
Governmental Authority except to the extent obtained on or before the Closing
Date, and except for filings and recordings with respect to the Collateral made
or to be made, or otherwise delivered to Collateral Agent for filing and/or
recordation, as of the Closing Date.

 

4.6                               Binding
Obligation.  Each Credit
Document has been duly executed and delivered by each Credit Party that is a
party thereto and is the legally valid and binding 

 

55

 

obligation of such Credit
Party, enforceable against such Credit Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability.

 

4.7                               Financial
Condition.  Holdings has
heretofore delivered to Administrative Agent (a) the audited consolidated
balance sheet of Company and its Subsidiaries for the Fiscal Years ended December 31,
2004, December 31, 2005 and December 31, 2006, and the related
audited consolidated statements of income, stockholders’ equity and cash flows
of each of such companies for each such Fiscal Year then ended, together with
all related notes and schedules thereto, and (b) the unaudited
consolidated balance sheet of Company and its Subsidiaries for the three-month
period ended March 30, 2007 and the related unaudited consolidated
statements of income, stockholders’ equity and cash flows of the Company and
its Subsidiaries for such three-month period then ended, together with all
related notes and schedules thereto.  All
such statements of Company and its Subsidiaries were prepared in conformity
with GAAP and fairly present, in all material respects, the financial position
of the entities described in such financial statements as at the respective
dates thereof and the results of operations and cash flows of the entities
described therein for each of the periods then ended, subject, in the case of such
unaudited financial statements, to changes resulting from audit and normal
year-end adjustments and the absence of footnotes.  As of the Closing Date, neither Company nor
any of its Subsidiaries has any contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not
reflected in the foregoing financial statements or the notes thereto and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
and its Subsidiaries taken as a whole.

 

4.8                               Projections.  On and as of the Closing Date, the
projections of Holdings and its Subsidiaries for (x) the period Fiscal
Year 2007 through and including Fiscal Year 2013 and (y) the Fiscal
Quarters beginning with the second Fiscal Quarter of 2007 through and including
the fourth Fiscal Quarter of 2008 (collectively, the “Projections”) previously delivered to
Administrative Agent and the Lenders are based on good faith estimates and
assumptions made by the management of Holdings, it being recognized, however,
that projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by the Projections may
differ from the projected results and that the differences may be material.

 

4.9                               No Material
Adverse Change.  Since December 31,
2006, except as set forth in Schedule 4.9, no event, circumstance or change has
occurred that has caused or evidences, or could reasonably be expected to
cause, either in any case or in the aggregate, a Material Adverse Effect.

 

4.10                        No
Restricted Payments.  Neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Payment or agreed to do so except as permitted pursuant to Section 6.5.

 

56

 

4.11                        Litigation;
Adverse Facts.  Except as
set forth in Schedule 4.11 hereto,  there
are no Adverse Proceedings, individually or in the aggregate, that could
reasonably be expected to have a Material Adverse Effect.  Neither Holdings nor any of its Subsidiaries (a) is
in violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect
to any final judgments, writs, injunctions, decrees, rules or regulations
of any court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

4.12                        Payment of
Taxes.  Except as otherwise permitted
under Section 5.3, all tax returns and reports of Holdings and its
Subsidiaries required to be filed by any of them have been timely filed, and
all taxes shown on such tax returns to be due and payable and all assessments,
fees and other governmental charges upon Holdings and its Subsidiaries and upon
their respective properties, assets, income, businesses and franchises which
are due and payable have been paid when due and payable.  Neither Holdings nor any of its Subsidiaries
knows of any proposed tax assessment against Holdings or any of its
Subsidiaries other than those which are being actively contested by Holdings or
such Subsidiary in good faith and by appropriate proceedings and for which
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.

 

4.13                        Properties.

 

(a)                                  Title.  Each of Holdings and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the most
recent financial statements delivered to the Administrative Agent, in each case
except for assets disposed of (x) since the date of such financial
statements and prior to the Closing Date in the ordinary course of business or (y) as
otherwise permitted under Section 6.9 and except for such defects that
neither individually nor in the aggregate could reasonably be expected to have
a Material Adverse Effect.  Except as
permitted by this Agreement, all such properties and assets are free and clear
of Liens.

 

(b)                                 Real Estate.  As of the Closing Date, Schedule 4.13
contains a true, accurate and complete list of (i) all Real Estate Assets,
and (ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof),
if any, affecting each Real Estate Asset of any Credit Party, regardless of
whether such Credit Party is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or
assignment.  Each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and
effect and Holdings does not have knowledge of any default that has occurred
and is continuing thereunder, and each such agreement constitutes the legally
valid and binding obligation of each applicable Credit Party, enforceable
against such Credit Party in accordance with its 

 

57

 

terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles.

 

(c)                                  Intellectual
Property.  Company and
its Subsidiaries own or have the valid right to use all material Intellectual
Property, and all Intellectual Property is free and clear of any and all Liens
other than Liens securing the Obligations and Liens permitted pursuant to Section 6.2(i).  Any registrations in respect of the
Intellectual Property are in full force and effect and are valid and
enforceable. The conduct of the business of Company and its Subsidiaries as
currently conducted, and as currently contemplated to be conducted, including,
but not limited to, all products, processes or services, made, offered or sold
by Company and its Subsidiaries, does not and will not infringe upon, violate,
misappropriate or dilute any intellectual property of any third party which
infringement, violation, misappropriation or dilution could reasonably be
expected to have a Material Adverse Effect. To the knowledge of Holdings,
Company or any of its Subsidiaries, no third party is infringing upon or
misappropriating, violating or otherwise diluting any Intellectual Property
where such infringement, misappropriation, violation or dilution could
reasonably be expected to have a Material Adverse Effect.  Neither Holdings, Company nor any of its
Subsidiaries is enjoined from using any material Intellectual Property, and
except as could reasonably be expected to have a Material Adverse Effect, there
is no pending or, to the knowledge of Holdings, Company or any of its
Subsidiaries, threatened claim or litigation contesting (i) any right of
Company or any of its Subsidiaries to own or use any Intellectual Property, or (ii) the
validity or enforceability of any Intellectual Property.

 

4.14                        Environmental
Matters.  Except as
set forth in Schedule 4.14 hereto: (i) neither Holdings nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject
to any outstanding written order, consent decree or settlement agreement with
any Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity which individually or in the aggregate would
reasonably be expected to have a Material Adverse Effect; (ii) as of the
Closing Date, or except as otherwise reported to the Administrative Agent after
the Closing Date, neither Holdings nor any of its Subsidiaries has
received within the last ten (10) years any letter or request for
information under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. § 9604), or any comparable
state law; (iii) there are and, to each of Holdings’ and its Subsidiaries’
knowledge, have been, no conditions, occurrences, or Hazardous Materials
Activities which would reasonably be expected to form the basis of an
Environmental Claim against Holdings or any of its Subsidiaries, which
individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect; and (iv) neither Holdings nor any of its
Subsidiaries nor, to any Credit Party’s knowledge, any predecessor of Holdings
or any of its Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment of Hazardous Materials at any Facility,
and none of Holdings’ or any of its Subsidiaries’ operations involves the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any state equivalent, which
individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect.  Notwithstanding
anything to the contrary in this Section 4.14, compliance with all current
or reasonably foreseeable future requirements pursuant 

 

58

 

to or under Environmental
Laws would not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect and no event or condition has occurred or
is occurring with respect to Holdings or any of its Subsidiaries relating to
any Environmental Law, any Release of Hazardous Materials, or any Hazardous
Materials Activity, including, without limitation, any matter included in
Schedule 4.14, which individually or in the aggregate has had, or would
reasonably be expected to have, a Material Adverse Effect.

 

4.15                        No
Defaults.  Neither
Holdings nor any of its Subsidiaries is in default in the performance,
observance or fulfillment of any of the obligations or covenants contained in (i) any
of its Contractual Obligations (other than the Credit Documents and the
Revolving Credit Documents), and no condition exists which, with the giving of
notice or the lapse of time or both, could constitute such a default, except
where the consequences, direct or indirect, of such default or defaults, if
any, could not reasonably be expected to have a Material Adverse Effect and (ii) any
Credit Document and any Revolving Credit Document.

 

4.16                        Governmental
Regulation.  Neither
Holdings nor any of its Subsidiaries is subject to regulation under the Federal
Power Act or the Investment Company Act of 1940 or under any other federal or
state statute or regulation which may limit its ability to incur Indebtedness
or which may otherwise render all or any portion of the Obligations
unenforceable.  Neither Holdings nor any
of its Subsidiaries is a “registered investment company” or a company
“controlled” by a “registered investment company” or a “principal underwriter”
of a “registered investment company” as such terms are defined in the
Investment Company Act of 1940.

 

4.17                        Margin
Regulations.  Neither
Holdings nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock. 
Neither the making of the Loans nor the pledge of the Collateral
pursuant to the Collateral Documents, violates Regulation T, U or X of the
Board of Governors of the Federal Reserve System.  No part of the proceeds of the Loans made to
such Credit Party will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any purpose that violates, or is inconsistent with, the
provisions of Regulation T, U or X of said Board of Governors.

 

4.18                        Employee
Matters.  Neither
Holdings nor any of its Subsidiaries is engaged in any unfair labor practice
that could reasonably be expected to have a Material Adverse Effect.  Except as set forth in Schedule 4.18, there
is (a) no unfair labor practice complaint pending against Holdings or any
of its Subsidiaries, or to the best knowledge of Holdings and Company,
threatened against any of them before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement that is so pending against Holdings or any of its
Subsidiaries or to the best knowledge of Holdings and Company, threatened
against any of them, and the hours worked by and payments made to employees of
Holdings or any of its Subsidiaries have not violated the Fair Labor Standards
Act or any other law dealing with such matters, (b) no strike or work stoppage in
existence or threatened involving Holdings or any of its Subsidiaries, and (c) to
the best knowledge of 

 

59

 

Holdings and Company, no
union representation question existing with respect to the employees of
Holdings or any of its Subsidiaries and, to the best knowledge of Holdings and
Company, no union organization activity that is taking place; which in each
case in clause (a), (b) or (c) above (including, without limitation,
any matter included in Schedule 4.18), could either individually or in the
aggregate reasonably be expected to have a Material Adverse Effect.

 

4.19                        Employee
Benefit Plans.  Holdings,
each of its Subsidiaries and each of their respective ERISA Affiliates are in
material compliance with all applicable provisions and requirements of ERISA
and the Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan in all material
respects.  Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the Internal
Revenue Service indicating that such Employee Benefit Plan is so qualified and
nothing has occurred subsequent to the issuance of such determination letter
which reasonably would be expected to cause such Employee Benefit Plan to lose
its qualified status.  No liability to
the PBGC (other than required premium payments), the Internal Revenue Service,
any Employee Benefit Plan or any trust established under Title IV of ERISA has
been or reasonably is expected to be incurred by Holdings, any of its
Subsidiaries or any of their ERISA Affiliates. 
Except as set forth in Schedule 4.19 (and except for changes in matters
identified in Schedule 4.19 that are not, individually or in the aggregate,
material), no ERISA Event has occurred or is reasonably expected to occur.  Except as set forth in Schedule 4.19, and
except to the extent required under Section 4980B of the Internal Revenue
Code or similar state laws, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates.  Except as set forth in
Schedule 4.19 (and except for changes in matters identified in Schedule 4.19
that are not, individually or in the aggregate, material), the present value of
the aggregate benefit liabilities under each Pension Plan sponsored, maintained
or contributed to by Holdings, any of its Subsidiaries or any of their ERISA
Affiliates, (determined as of the end of the most recent plan year on the basis
of the actuarial assumptions specified for funding purposes in the most recent
actuarial valuation for such Pension Plan), did not exceed the aggregate
current value of the assets of such Pension Plan.  Neither Holdings, its Subsidiaries nor their
respective ERISA Affiliates maintains, contributes to or is required to
contribute to any Multiemployer Plan.

 

4.20                        Certain
Fees.  Except as otherwise disclosed
in writing to Administrative Agent and Arranger, no broker’s or finder’s fee or
commission will be payable with respect hereto or any of the transactions
contemplated hereby, and Company hereby indemnifies Lenders, Agents and
Arranger against, and agrees that it will hold Lenders, Agents and Arranger
harmless from, any claim, demand or liability for any such broker’s or finder’s
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.

 

60

 

4.21                        Solvency.  Borrower is, and Holdings and its
Subsidiaries (on a consolidated basis), are, and, upon the incurrence of any
Obligation by any Credit Party on any date on which this representation and
warranty is made, will be, Solvent.

 

4.22                        Collateral.

 

(a)                                  Collateral
Documents. The security interests created in favor of
Collateral Agent under the Collateral Documents constitute, as security for the
obligations purported to be secured thereby, a legal, valid and enforceable
security interest in all of the Collateral referred to therein in favor of
Collateral Agent for the benefit of the Lenders.  The security interests in and Liens upon the
Collateral described in the Collateral Documents are valid and perfected First
Priority or Second Priority Liens (in accordance with the priorities set forth
in the Intercreditor Agreement) to the extent such security interests and Liens
can be perfected by such filings and recordations.  No consents, filings or recordings are
required in order to perfect (or maintain the perfection or priority of) the
security interests purported to be created by any of the Collateral Documents,
other than (i) such as have been obtained and which remain in full force
and effect, (ii) the periodic filing of UCC continuation statements in
respect of UCC financing statements filed by or on behalf of Collateral Agent,
and (iii) with respect to such items of Collateral as to which this Agreement
or the Collateral Documents do not require any consent, filing or recordation.

 

(b)                                 Absence of
Third Party Filings.  Except such
as may have been filed in favor of Collateral Agent as contemplated by Section 4.23(a) above
and except as set forth on Schedule 4.22 annexed hereto or, after the Closing
Date, as may have been filed with respect to a Lien permitted by Section 6.2,
(i) no effective UCC financing statement, fixture filing or other
instrument similar in effect covering all or any part of the Collateral is on
file in any filing or recording office and (ii) no effective filing with
respect to a Lien covering all or any part of the Collateral is on file with
the United States Patent and Trademark Office or United States Copyright Office
or any other Governmental Authority.

 

4.23                        Disclosure.  No representation or warranty of Holdings and
its Subsidiaries contained in any Credit Document or in any other documents,
certificates or written statements furnished to Lenders by or on behalf of
Holdings or any of its Subsidiaries for use in connection with the transactions
contemplated hereby or thereby contains any untrue statement of a material fact
or omits (when taken as a whole) to state a material fact (known to Holdings or
Company, in the case of any document not furnished by either of them) necessary
in order to make the statements contained herein or therein not misleading in
light of the circumstances in which the same were made.  Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by Holdings or Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results.  There is no fact known to Holdings or Company
(other than matters of a general economic nature) that, individually or in the
aggregate, has had, or could reasonably be expected to result in, a Material 

 

61

 

Adverse Effect and that has
not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.

 

4.24                        Deposit
Accounts

 

Annexed hereto as Schedule
4.24 is a list of all Deposit Accounts maintained by the Credit Parties as
of the Closing Date, which Schedule includes, with respect to each deposit
account (i) the name and address of the depository; (ii) the account
number(s) maintained with such depository; and (iii) a contact person
at such depository.

 

SECTION 5.                            AFFIRMATIVE COVENANTS

 

Each Credit Party covenants
and agrees that so long as any Commitment is in effect and until payment in
full of all Obligations, each Credit Party shall perform, and shall cause each
of its Subsidiaries to perform, all covenants in this Section 5.

 

5.1                               Financial
Statements and Other Reports.  Holdings will deliver to Administrative Agent
and Collateral Agent for each Lender:

 

(a)                                  [RESERVED]

 

(b)                                 Quarterly
Financial Statements.  Within two (2) Business
Days after the date on which Holdings files or is required to file its Form 10-Q
under the Exchange Act (but without giving effect to any extension pursuant to Rule 12b-25
under the Exchange Act (or any successor rule) or otherwise) (or, if Holdings
is not required to file a Form 10-Q under the Exchange Act, within fifty
(50) days after the end of each of the first three Fiscal Quarters of each
Fiscal Year (commencing with the Fiscal Quarter ending June 30, 2007)), (i) the
consolidated and consolidating balance sheets of Holdings and its Subsidiaries
as at the end of such Fiscal Quarter and the related consolidated (and with
respect to statements of income, consolidating) statements of income and cash
flows of Holdings and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, all prepared in accordance with GAAP and in reasonable detail and
certified by the chief financial officer, senior vice president-finance,
treasurer or controller of Company or Holdings that they fairly present, in all
material respects, the consolidated financial condition of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments and the absence of footnotes, and (ii) a
narrative report describing the financial condition and results of operations
of Holdings and its Subsidiaries for such Fiscal Quarter in form and substance
reasonably satisfactory to Administrative Agent;

 

62

 

(c)                                  Annual
Financial Statements.  Within two (2) Business
Days after the date on which the Holdings files or is required to file its Form 10-K
under the Exchange Act (but without giving effect to any extension pursuant to Rule 12b-25
under the Exchange Act (or any successor rule) or otherwise) (or, if Holdings
is not required to file a Form 10-K under the Exchange Act, within one
hundred (100) days after the end of each Fiscal Year (commencing with the
Fiscal Year ending December 31, 2007)), (i) the consolidated and
consolidating  balance sheets of
Holdings and its Subsidiaries as at the end of such Fiscal Year and the related
consolidated (and with respect to statements of income, consolidating)
statements of income, stockholder’s equity and cash flows of Holdings and its
Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, all prepared in accordance with GAAP and in
reasonable detail and certified by the chief financial officer, senior vice
president-finance, treasurer or controller of Company or Holdings that they
fairly present, in all material respects, the consolidated financial condition
of Holdings and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, and (ii) a
narrative report describing the financial condition and results of operations
of Holdings and its Subsidiaries in form and substance reasonably satisfactory
to Administrative Agent; (iii) with respect to such consolidated financial
statements a report thereon of independent certified public accountants of
recognized national standing selected by Holdings, and reasonably satisfactory
to Administrative Agent (which report shall be unqualified as to going concern
and scope of audit, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial position of
Holdings and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards) together with a
written statement by such independent certified public accountants stating (1) that
their audit examination has included a review of the terms of the Credit
Documents, and (2) whether, in connection therewith, any condition or
event that constitutes a Default or an Event of Default under Section 6.8
or otherwise with respect to accounting matters has come to their attention
and, if such a condition or event has come to their attention, specifying the
nature and period of existence thereof;

 

(d)                                 Compliance
Certificate.  Together
with each delivery of financial statements of Holdings and its Subsidiaries
pursuant to Sections 5.1(b) and 5.1(c), a duly executed and completed
Compliance Certificate;

 

(e)                                  Statements of
Reconciliation after Change in Accounting Principles.  If, as a result of any change in accounting
principles and policies from those used in the preparation of the financial
statements referred to in Section 4.7, the consolidated financial
statements of Holdings and its Subsidiaries delivered pursuant to Section 5.1(b) or
5.1(c) will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions had no
such change in accounting principles and policies been made, then, together
with the first delivery of such financial statements after such change, one or 

 

63

 

more statements of
reconciliation for all such prior financial statements in form and substance
reasonably satisfactory to Administrative Agent;

 

(f)                                    Notice of
Default, etc.  Promptly
upon, and in any event within five (5) days after, any officer of Holdings
or any of its Subsidiaries obtaining knowledge (i) of any condition or
event that constitutes a Default or an Event of Default or that notice has been
given to Holdings or any of its Subsidiaries with respect thereto; (ii) that
any Person has given any notice to Holdings or any of its Subsidiaries or taken
any other action with respect to any claimed default or event or condition of
the type referred to in Section 8.1(b); or (iii) of the occurrence of
any event or change that has caused or evidences or would reasonably be
expected to have, either in any case or in the aggregate, a Material Adverse
Effect; a certificate of its Authorized Officers specifying the nature and period
of existence of such condition, event or change, or specifying the notice given
and action taken by any such Person and the nature of such claimed Event of
Default, Default, default, event or condition, and what action Holdings or the
applicable Subsidiary has taken, is taking and proposes to take with respect
thereto;

 

(g)                                 Notice of
Litigation.  Promptly
upon, and in any event within five (5) days after, any officer of Holdings
or any of its Subsidiaries obtaining knowledge of (i) the institution of,
or non-frivolous threat of, any Adverse Proceeding not previously disclosed in
writing by Company to Lenders, or (ii) any material development in any
Adverse Proceeding that, in the case of either (i) or (ii) if
adversely determined, could be reasonably expected to have a Material Adverse
Effect, or seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated hereby, written notice thereof together with such other information
as may be reasonably available to Holdings or any of its Subsidiaries to enable
Lenders and their counsel to evaluate such matters;

 

(h)                                 ERISA.  (i) Promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto; and (ii) with reasonable promptness, copies of (1) each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates with the Internal Revenue Service with respect to each Pension
Plan and (2) copies of such other documents or governmental reports or
filings relating to any Employee Benefit Plan as Administrative Agent shall
reasonably request;

 

(i)                                     Financial Plan.  As soon as practicable and in any event no
later than 90 days after the beginning of each Fiscal Year, a monthly
consolidated and consolidating  plan
and financial forecast for such Fiscal Year (a “Financial Plan”), including a forecasted consolidated balance
sheet and forecasted consolidated and consolidating statements of income and
consolidated statement of cash flows of Holdings and its Subsidiaries for such
Fiscal Year, together with pro forma Compliance Certificates for each such
Fiscal Year and an explanation of the assumptions on which such forecasts are
based;

 

64

 

(j)                                     Insurance Report.  As soon as practicable and in any event by
the last day of each calendar year, a report in form and substance reasonably
satisfactory to Administrative Agent outlining all material insurance coverage
maintained as of the date of such report by Holdings and its Subsidiaries and
all material insurance coverage planned to be maintained by Holdings and its
Subsidiaries in the immediately succeeding calendar year;

 

(k)                                  Accountants’ Reports.  Promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Holdings or Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants, including
any comment letter submitted by such accountants to management in connection
with their annual audit;

 

(l)                                     [RESERVED]

 

(m)                               Environmental Reports and Audits.  As soon as
practicable following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Company or any of its Subsidiaries or
by independent consultants, with respect to environmental matters at any
Facility or which relate to any environmental liabilities of Holdings or its
Subsidiaries which, in any such case, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;

 

(n)                                 Other Information.  (A) Promptly upon their becoming
available, copies of (i) all financial statements, reports, notices and
proxy statements sent or made available generally by Holdings to holders of its
Indebtedness or to holders of its public equity securities or by any Subsidiary
of Holdings to its security holders other than Holdings or another Subsidiary of
Holdings, (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by Holdings or any of its
Subsidiaries with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority, (iii) all
press releases and other statements made available generally by Holdings or any
of its Subsidiaries to the public concerning material developments in the
business of Holdings or any of its Subsidiaries, and (B) such other
information and data with respect to Holdings or any of its Subsidiaries
(including, without limitation, financial statements with respect to Holdings
and its Subsidiaries) as from time to time may be reasonably requested by
Administrative Agent or any Lender;

 

5.2                               Existence.  Except as otherwise permitted under Section 6.9,
each Credit Party will, and will cause each of its Subsidiaries to, at all
times preserve and keep in full force and effect (i) its existence and (ii) all
rights and franchises, licenses and permits material to the business of
Holdings and its Subsidiaries (on a consolidated basis).

 

65

 

5.3                               Payment
of Taxes and Claims.  Each Credit
Party will, and will cause each of its Subsidiaries to, pay all Taxes imposed
upon it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty or fine accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable which, if unpaid, might become a Lien upon any
of its properties or assets; provided, no such Tax or claim need be paid
if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as adequate reserve or other
appropriate provision, as shall be required in conformity with GAAP shall have
been made therefor.  No Credit Party
will, nor will it permit any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person (other than
Holdings or any of its Subsidiaries).

 

5.4                               Maintenance
of Properties.  Each Credit
Party will, and will cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear
excepted, all material properties owned by Holdings, Company or its
Subsidiaries or used or useful in the business of Company and its Subsidiaries
(including all Intellectual Property) and from time to time will make or cause
to be made all appropriate repairs, renewals and replacements thereof.

 

5.5                               Insurance.  Each Credit Party will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained, with financially
sound and reputable insurers, such public liability insurance, third party
property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons.  Without limiting the generality
of the foregoing, each Credit Party will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained (a) flood insurance
with respect to each Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, in each case in
compliance with any applicable regulations of the Board of Governors of the
Federal Reserve System, and (b) replacement value casualty insurance on
the Collateral under such policies of insurance, with such insurance companies,
in such amounts, with such deductibles, and covering such risks as are at all
times carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses.  Each such policy of insurance shall (i) name
the Administrative Agent, the Collateral Agent and the Lenders as an additional
insured thereunder as its interests may appear and (ii) in the case of
each casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Collateral Agent, that names the
Collateral Agent, on behalf of Lenders as the loss payee thereunder and
provides for at least thirty (30) days’ prior written notice to Collateral
Agent of any modification or cancellation of such policy.

 

5.6                               Inspections.  Each Credit Party will, and
will cause each of its Subsidiaries to, permit any authorized representatives
designated by Administrative Agent, Collateral Agent or 

 

66

 

any Lender (and, in the case of any Lender, accompanied by
Administrative Agent or Collateral Agent) to visit and inspect any of the
properties of any Credit Party and any of its respective Subsidiaries, to
inspect the Collateral, or otherwise to inspect, copy and take extracts from
its and their financial and accounting records, and to discuss its and their
properties, assets, affairs, finances and accounts with its and their officers
and independent public accountants (it being understood that, prior to the
occurrence and continuance of an Event of Default, (x) any such
discussions or meetings shall be limited to Administrative Agent and (y) in
the case of discussions or meetings with the independent public accountants,
only if Company has been given the opportunity to participate in such
discussions or meetings), all upon reasonable notice and at such reasonable
times during normal business hours and as often as may reasonably be requested.

 

5.7                               Lenders
Meetings.  Holdings and
Company will, upon the request of Administrative Agent or Requisite Lenders,
participate in a meeting of Administrative Agent and Lenders once during each
calendar year to be held at Company’s corporate offices (or at such other
location as may be agreed to by Company and Administrative Agent) at such time
as may be agreed to by Company and Administrative Agent.

 

5.8                               Compliance
with Laws.  Each Credit
Party will comply, and shall cause each of its Subsidiaries to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including all Environmental Laws), noncompliance with
which could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

5.9                               Environmental.

 

(a)                                  Environmental Disclosure.  Each Credit Party will, and will cause each
of its Subsidiaries to, deliver to Administrative Agent and Lenders:

 

(i)                                     as soon as practicable following receipt thereof, copies of
all material environmental audits, investigations, analyses and reports of any
kind or character, whether prepared by personnel of Holdings or any of its
Subsidiaries or by independent consultants, governmental authorities or any
other Persons, with respect to significant environmental matters at any
Facility or with respect to any Environmental Claims; provided, however,
that this Section 5.9(a)(i) shall not apply to communications covered
by valid claims of attorney client privilege or to attorney work product
generated by legal counsel to Holdings or any of its Subsidiaries;

 

(ii)                                  promptly upon the occurrence thereof, written notice
describing in reasonable detail (1) any Release required to be reported to
any 

 

67

 

federal, state or local governmental or regulatory agency
under any applicable Environmental Laws, (2) any remedial action taken by
Holdings or any other Person in response to (A) any Hazardous Materials
Activities the existence of which has a reasonable possibility of resulting in
one or more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (B) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of resulting in
a Material Adverse Effect, and (3) Holdings or any of its Subsidiaries’
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of any Facility that could cause such Facility or any part thereof
to be subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws;

 

(iii)                               as soon as practicable following the sending or receipt
thereof by Holdings or any of its Subsidiaries, a copy of any and all written
communications to or from any Governmental Authority or any Person bringing an
Environmental Claim against Holdings or any of its Subsidiaries with respect
to: (1) any Environmental Claims that, individually or in the aggregate,
have a reasonable possibility of giving rise to a Material Adverse Effect, (2) any
Release required to be reported to any Governmental Authority, and (3) any
written request for information from any Governmental Authority stating such
Governmental Authority is investigating whether Holdings or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity; and

 

(iv)                              with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by Administrative
Agent in relation to any matters disclosed pursuant to this Section 5.9(a).

 

(b)                                 Hazardous Materials Activities, Etc.  Each Credit Party
shall promptly take, and shall cause each of its Subsidiaries promptly to take,
any and all actions necessary to (i) cure any violation of applicable
Environmental Laws by such Credit Party or its Subsidiaries that would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and (ii) make an appropriate response to any Environmental
Claim against such Credit Party or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder where failure to do so would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

5.10                        Subsidiaries.  In the event that any Person becomes a
Domestic Subsidiary of Company, Company shall (a) promptly, and in any
event within ten (10) days, cause such 

 

68

 

Domestic Subsidiary to become a Guarantor hereunder and a Grantor
under the Pledge and Security Agreement by executing and delivering to
Administrative Agent and Collateral Agent a Counterpart Agreement, and (b) take
all such actions and execute and deliver, or cause to be executed and
delivered, all Perfection Deliverables and such documents, instruments,
agreements, opinions and certificates as are similar to those described in
Sections 3.1(b) and 3.1(f), and any other actions required by the Pledge
and Security Agreement.  In the event
that any Person becomes a Foreign Subsidiary of Company, and the ownership
interests of such Foreign Subsidiary are owned by Company or by any Domestic
Subsidiary thereof, Company shall, or shall cause such Domestic Subsidiary to,
promptly, and in any event within ten (10) days, deliver all such
documents, instruments, agreements, and certificates as are similar to those
described in Section 3.1(b), and Company shall take, or shall cause such
Domestic Subsidiary to take, all of the actions referred to in clause (i) of
the definition of “Perfection Deliverables” necessary to grant and to perfect a
First Priority of Second Priority Lien (in accordance with the priorities set
forth in the Intercreditor Agreement) in favor of Collateral Agent, for the
benefit of Secured Parties, under the Pledge and Security Agreement in 66% of
such ownership interests.  With respect
to each such Subsidiary, Company shall promptly send to Administrative Agent
written notice setting forth with respect to such Person (i) the date on
which such Person became a Subsidiary of Company, and (ii) all of the data
required to be set forth in Schedules 4.1 and 4.2 with respect to all
Subsidiaries of Company; provided, such written notice upon
Administrative Agent’s approval of the contents therein shall be deemed to supplement
Schedule 4.1 and 4.2 for all purposes hereof.  Notwithstanding anything to the contrary in
this Section 5.10, the requirements of this Section 5.10 shall not
apply to any property or Subsidiary created or acquired after the Closing Date,
as to which the Collateral Agent has determined in its sole discretion that the
collateral value thereof is insufficient to justify the difficulty, time and/or
expense of obtaining a perfected security interest therein.  The Collateral Agent is hereby authorized by the
Lenders to enter into such amendments to the Collateral Documents as the
Collateral Agent deems necessary to effectuate the provisions of this Section 5.10.

 

5.11                        Additional Real Estate Assets.  In the event that any Credit Party acquires,
or any Person that becomes a Credit Party holds, a Real Estate Asset that is (a) a
fee interest with a fair market value equal to or greater than $500,000 or (b) a
leasehold interest with a value that Administrative Agent in its sole
discretion, after consultation with Company, determines is material, and such
interest has not otherwise been made subject to a perfected First Priority or
Second Priority Lien (in accordance with the priorities set forth in the
Intercreditor Agreement) of the Collateral Documents in favor of Collateral
Agent, for the benefit of Secured Parties, then such Credit Party shall,
promptly, and in any event within ten (10) days of such Credit Party
acquiring such Real Estate Asset or such Person becoming a Credit Party, take
all such actions and execute and deliver, or cause to be executed and
delivered, all Real Estate Asset Deliverables and Perfection Deliverables with
respect to each such Real Estate Asset to create in favor of Collateral Agent,
for the benefit of Secured Parties, a valid and, subject to any filing and/or
recording referred to herein, perfected First Priority or Second Priority Lien
(in accordance with the priorities set forth in the Intercreditor Agreement) in
such Real Estate Assets, and reports and other information reasonably
satisfactory to Administrative Agent regarding environmental matters
(including, without limitation, a Phase I Report) with respect to such Real
Estate Assets.  In addition to the
foregoing, Company shall, at the request of Requisite Lenders, deliver, from
time to time (but, prior to the occurrence and during the continuance of a 

 

69

 

Default or Event of Default, not more than once every two calendar
years), to Administrative Agent such appraisals of Real Estate Assets with
respect to which Collateral Agent has been granted a Lien.  Notwithstanding anything to the contrary in
this Section 5.11, the requirements of this Section 5.11 shall not
apply to any Real Estate Asset acquired after the Closing Date, as to which the
Collateral Agent has determined in its sole discretion that the collateral
value thereof is insufficient to justify the difficulty, time and/or expense of
obtaining a perfected security interest therein.  The Collateral Agent is hereby authorized by
the Lenders to enter into such amendments to the Collateral Documents as the
Collateral Agent deems necessary to effectuate the provisions of this Section 5.11.

 

5.12                        [Reserved].

 

5.13                        Further Assurances.  At any time or from time to
time upon the request of Administrative Agent or Collateral Agent, each Credit
Party will, at its expense, promptly execute, acknowledge and deliver such
further documents and do such other acts and things as Administrative Agent or
Collateral Agent may reasonably request in order to effect fully the purposes
of the Credit Documents.  In furtherance
and not in limitation of the foregoing, each Credit Party shall take such
actions as Administrative Agent or Collateral Agent may reasonably request from
time to time to ensure that the Obligations are guarantied by the Guarantors
and are secured by substantially all of the assets of Holdings, and its
Subsidiaries and all of the outstanding Capital Stock of Company and its
Subsidiaries (in each case subject to limitations contained in the Credit
Documents with respect to Foreign Subsidiaries).

 

5.14                        ERISA.  Neither Holdings, its Subsidiaries or their
respective ERISA Affiliates shall establish, maintain, contribute to, or become
required to contribute to any Multiemployer Plan.

 

5.15                        Maintenance of Credit
Rating.  Holdings shall use its
commercially reasonable efforts (including the timely payment of all customary
amounts and the timely submission of all customary documentation) to ensure
that (i) the credit facility provided for under this Agreement shall at
all times have a credit rating assigned by S&P and Moody’s and (ii) the
Borrower shall at all times have a corporate credit rating assigned by S&P
and Moody’s; provided, however, that in the event either S&P
or Moody’s ceases to exist, ceases to be in the business of issuing ratings in
respect of credit facilities, or the rating of such facilities is not otherwise
obtainable from such agencies, then Holdings shall use its commercially
reasonable efforts (including the timely payment of all customary amounts and
the timely submission of all customary documentation) to ensure that such
facilities are rated by another nationally recognized statistical rating agency
acceptable to Administrative Agent.

 

SECTION 6.                            NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long
as any Commitment is in effect and until payment in full of all Obligations,
such Credit Party shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.

 

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6.1                               Indebtedness.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or guaranty, or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness, except:

 

(a)                                  the Obligations;

 

(b)                                 Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Guarantor Subsidiaries, and any
wholly-owned Guarantor Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned Guarantor
Subsidiary of Company; provided, (i) all such Indebtedness under
this subclause (b) shall be (x) evidenced by promissory notes and all
such notes shall be subject to a First Priority or Second Priority Lien (in
accordance with the priorities set forth in the Intercreditor Agreement)
pursuant to the Pledge and Security Agreement and (y) unsecured and
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement that in any such case, is reasonably satisfactory to
Administrative Agent, and (ii) any payment by any such Subsidiary under
any guaranty of the Obligations shall result in a pro  tanto
reduction of the amount of any Indebtedness owed by such Subsidiary to Company
or to any of its Subsidiaries for whose benefit such payment is made;

 

(c)                                  [RESERVED];

 

(d)                                 Indebtedness of Company and its Subsidiaries arising in
respect of netting services or overdraft protections with deposit accounts; provided,
that such Indebtedness is extinguished within three (3) Business Days of
its incurrence;

 

(e)                                  guaranties by Company of Indebtedness of a Guarantor Subsidiary
or guaranties by a Subsidiary of Company of Indebtedness of Company or a
Guarantor Subsidiary with respect, in each case, to Indebtedness otherwise
permitted to be incurred pursuant to this Section 6.1;

 

(f)                                    Indebtedness of Company and its Subsidiaries existing on the
Closing Date and described in Schedule 6.1, but not any extensions,
renewals, refinancings or replacements of such Indebtedness except (i) renewals
and extensions expressly provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date of this Agreement and (ii) refinancings
and extensions of any such Indebtedness if the terms and conditions thereof are
not materially less favorable (taken as a whole) to the obligor thereon or to
the Lenders than the Indebtedness being refinanced or extended, and the average
life to maturity thereof is greater than or equal to that of the Indebtedness
being refinanced or extended; provided, such Indebtedness permitted
under the immediately preceding clause (i) or (ii) above shall not (A) include
Indebtedness of an obligor that was not an obligor with respect to the 

 

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Indebtedness being extended, renewed or refinanced or (B) exceed
in a principal amount the Indebtedness being renewed, extended or refinanced;

 

(g)                                 purchase money Indebtedness of Company and its Subsidiaries
and Capital Leases (other than in connection with sale-leaseback transactions)
of Company and its Subsidiaries, in each case incurred in the ordinary course
of business to provide all or a portion of the purchase price or cost of
construction of an asset or an improvement of an asset not constituting part of
the Collateral; provided, that (A) such Indebtedness when incurred
shall not exceed the purchase price or cost of improvement or construction of
such asset, (B) no such Indebtedness shall be refinanced for a principal
amount in excess of the principal balance outstanding thereon at the time of
such refinancing, (C) such Indebtedness shall be secured only by the asset
acquired, constructed or improved in connection with the incurrence of such
Indebtedness and (D) the aggregate principal amount of all such
Indebtedness shall not exceed $7,500,000 at any time outstanding;

 

(h)                                 other Indebtedness of Company and its Subsidiaries, which is
unsecured, in an aggregate principal amount not to exceed $10,000,000 at any
time outstanding;

 

(i)                                     Indebtedness of Company under any Interest Rate Agreement or
Currency Agreement entered into for hedging purposes and in form and substance
reasonably satisfactory to the Administrative Agent;

 

(j)                                     Indebtedness evidenced by the Revolving Credit Documents in
an aggregate amount not to exceed an amount equal to $60.0 million (less the
amount of all permanent reductions of the Revolving Loan Commitments (as
defined in the Revolving Credit Facility)) and any Permitted Refinancing of the
Revolving Credit Facility;

 

(k)                                  additional senior unsecured or subordinated unsecured
Indebtedness, the terms and conditions of which (i) shall provide for a
maturity date no earlier than 180 days after the Additional Term Loan Maturity
Date hereunder and with no scheduled amortization or other scheduled payments
of principal prior to such date and (ii) shall be reasonably satisfactory
to Administrative Agent; provided, that (A) after giving pro forma
effect to the incurrence of such Indebtedness (and, if applicable, giving pro
forma effect to any Subject Transaction pursuant to Section 6.8(c)), (1) the
Leverage Ratio is not greater than 4.0 to 1.0 or (2) the Consolidated
Coverage Ratio is at least 2.0 to 1.0 and (B) no Default or Event of
Default has occurred or is continuing at the time of incurrence or would result
therefrom;

 

(l)                                     Indebtedness of a Person existing at the time such Person
becomes a Subsidiary of Company following the Closing Date, which Indebtedness
is in existence at the time such Person becomes a Subsidiary and is not created
in connection with or in contemplation of such Person becoming a Subsidiary; provided
that the aggregate principal amount of all such Indebtedness in the aggregate
shall not exceed $5,000,000 at any time outstanding;

 

72

 

(m)                               Indebtedness of Holdings which is unsecured and subordinated
to the Obligations in a manner satisfactory to Administrative Agent and which
is issued in connection with the redemption or replacement of any preferred
Capital Stock of Holdings, in principal amount not to exceed the amount of such
preferred Capital Stock being redeemed or replaced, the terms and conditions of
which (i) shall provide for a maturity date at least one year after the
Additional Term Loan Maturity Date hereunder, with no scheduled amortization of
principal or mandatory prepayments prior to such date, (ii) no scheduled
or mandatory cash interest payments prior to such date, except to the extent
Holdings has sufficient cash therefor and (iii) shall otherwise be
satisfactory to Administrative Agent;

 

(n)                                 Capital Leases of Company entered into in connection with
sale-leaseback transactions permitted by Section 6.3; provided,
that (A) no such Indebtedness shall be refinanced for a principal amount
in excess of the principal balance outstanding thereon at the time of such
refinancing and (B) such Indebtedness shall be secured only by the
facility which is the subject of such Capital Lease; and

 

(o)                                 additional secured Indebtedness, the terms and conditions of
which (i) shall provide for a maturity date at least 180 days after the
Additional Term Loan Maturity Date hereunder with no scheduled amortization of
principal prior to such date, (ii) unless reasonably satisfactory to the
Administrative Agent pursuant to clause (iii) below, shall be no more
restrictive (without taking into account fees or interest rates), taken as a
whole, than those set forth in the Term Loan Documents as in effect on the
Closing Date, and (iii) shall otherwise be reasonably satisfactory to
Administrative Agent; provided, that (A) after giving pro forma
effect to the incurrence of such Indebtedness (and, if applicable, giving pro
forma effect to any Subject Transaction pursuant to Section 6.8(c)), the
Secured Debt Ratio is less than 2.5 to 1.0 and (B) no Default or Event of
Default has occurred or is continuing at the time of incurrence or would result
therefrom.

 

6.2                               Liens.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Holdings, Company or any such Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom, except:

 

(a)                                  Liens in favor of Collateral Agent for the benefit of Secured
Parties granted pursuant to any Credit Document;

 

(b)                                 Liens imposed by law for Taxes that are not yet required to
be paid pursuant to Section 5.3;

 

(c)                                  statutory Liens of landlords, banks (and rights of set-off),
of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and
other Liens imposed by 

 

73

 

law (other than any such Lien imposed pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or by ERISA), in each case incurred
in the ordinary course of business (i) for amounts not yet overdue or (ii) for
amounts that are overdue and that (in the case of any such amounts overdue for
a period in excess of five (5) days) are being contested in good faith by
appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;

 

(d)                                 deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money or other
Indebtedness), so long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on account thereof;

 

(e)                                  easements, rights-of-way, restrictions, encroachments, minor
defects or irregularities in title and other similar charges, in each case
which do not and will not interfere in any material respect with the use or
value thereof or which appear on a title report delivered to Administrative
Agent prior to the date hereof;

 

(f)                                    any interest or title of a lessor or sublessor under any
operating or true lease of real estate entered into by Company or its
Subsidiaries in the ordinary course of its business covering only the assets so
leased;

 

(g)                                 purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business;

 

(h)                                 any attachment or judgment Lien not constituting an Event of
Default under Section 8.1(h);

 

(i)                                     non-exclusive licenses of Intellectual Property granted by
Company or any of its Subsidiaries in the ordinary course of business
consistent with past practice and not interfering in any respect with the ordinary
conduct of the business of Company or such Subsidiary;

 

(j)                                     bankers liens and rights of set-off with respect to customary
depositary arrangements entered into in the ordinary course of business of
Company and its Subsidiaries;

 

(k)                                  Liens granted by Company or its Subsidiaries existing on the
Closing Date and described in Schedule 6.2; provided, that (A) no
such Lien shall at any time be extended to 

 

74

 

cover property or assets other than the property or assets
subject thereto on the Closing Date and (B) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed, refunded,
replaced or refinanced except as otherwise permitted by Section 6.1(f);

 

(l)                                     Liens securing (i) Indebtedness permitted pursuant to Section 6.1(g),
provided, any such Lien shall encumber only the asset acquired,
constructed or improved with the proceeds of such Indebtedness and (ii) Indebtedness
permitted pursuant to Section 6.1(n), provided any such Lien shall
encumber only the facility with is the subject of such Capital Lease;

 

(m)                               Liens securing Indebtedness permitted under Section 6.1(l);  provided that such Liens are of a type described in Section 6.2(l)(i) and
are not created in contemplation of or in connection with such Person becoming
a Subsidiary, such Liens will not apply to any other property of Holdings or
any of its Subsidiaries, and such Liens will secure only those obligations
secured by such Liens on the date such Person becomes a Subsidiary; and

 

(n)                                 Liens securing Indebtedness permitted under Section 6.1(j) or
6.1(o).

 

6.3                               Sales
and Leasebacks.  Each of
Holdings and Company shall not, and shall not permit any of its Subsidiaries to
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an operating lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (a) which Holdings or any of its Subsidiaries has sold
or transferred or is to sell or transfer to any other Person (other than
Holdings or any of its Subsidiaries) or (b) which Holdings or any of its
Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by such Credit Party to
any Person (other than Holdings or any of its Subsidiaries) in connection with
such lease; provided that Company and its Subsidiaries may (i) become
and remain liable as lessee, guarantor or other surety with respect to any such
lease which is a Capital Lease permitted pursuant to Section 6.1(g), and (ii) so
long as no Default or Event of Default has occurred or is continuing or shall
be caused thereby, sale-leaseback transactions in respect of up to any manufacturing
Facilities owned by Company as of the Closing Date; provided, further,
that (A) the material terms and conditions of such sale-leaseback
transaction (including any Capital Lease in connection with such transaction)
shall be reasonably satisfactory to the Administrative Agent, (B) Collateral
Agent is granted a valid First Priority or Second Priority Lien (in accordance
with the priorities set forth in the Intercreditor Agreement) in Company’s
leasehold interest in connection with such transaction, (C) the lessor (or
lenders under any Capital Lease) in connection with such transaction shall
agree to provide Collateral Agent access to the Collateral located at such
facility pursuant to an agreement reasonably satisfactory to Administrative
Agent and the Collateral Agent (the terms of which shall include subordination
and non-disturbance provisions with respect to any such Collateral, and other
terms as may be reasonably required by Administrative Agent or the Collateral
Agent), (D) the amount of consideration payable to Company or its
Subsidiaries (and the aggregate principal amount of Indebtedness in respect of
any Capital Leases) in any such transaction shall not exceed the fair market
value of any such facility (determined in good faith by the board of directors
of Company (or similar governing body)), and shall not exceed $30,000,000 in
the 

 

75

 

aggregate and (E) the Net Asset Sale Proceeds with respect to any
such Capital Lease shall be applied to repay Indebtedness to the extent
required pursuant to Section 2.14(b).

 

6.4                               No
Further Negative Pledges. 
Except (i) pursuant to this Agreement, (ii) pursuant to the
terms of Indebtedness permitted under Section 6.1(h), 6.1(j), 6.1(k) or
6.1(o), (iii) with respect to specific property encumbered to secure
payment of particular Indebtedness or to be sold pursuant to an executed
agreement with respect to a permitted Asset Sale, (iv) pursuant to
customary non-assignment or no-subletting clauses in leases, licenses or
contracts entered into in the ordinary course of business, which restrict only
the assignment of such lease, license or contract, as applicable, or (v) in
connection with purchase money financing or Capital Leases permitted under Section 6.1(g),
6.1(l) or 6.1(n) (in each case provided the prohibition applies only
to the asset being acquired or constructed, or which is the subject of such
Capital Lease), each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, enter into any agreement prohibiting the creation
or assumption of any Lien upon any of its properties or assets, whether now
owned or hereafter acquired.

 

6.5                               Restricted
Payments.  Each of
Holdings and Company shall not, and shall not permit any of its Subsidiaries or
Affiliates through any manner or means or through any other Person to, directly
or indirectly, declare, order, pay, make or set apart, or agree to declare,
order, pay, make or set apart, or agree to declare, order, pay, make or set
apart, any sum for any Restricted Payment except that:

 

(a)                                  Subsidiaries of Company may make Restricted Payments (i) to
Company or to any parent entity of such Subsidiary which is a wholly-owned
Guarantor Subsidiary and (ii) on a pro rata basis to the equity holders of
any other Guarantor Subsidiary;

 

(b)                                 (i) so long as no Default or Event of Default shall have
occurred and be continuing or shall be caused thereby, Company and its
Subsidiaries may make prepayments and regularly scheduled payments of principal
and interest in respect of any Indebtedness permitted under Sections 6.1(b), (ii) Company
and its Subsidiaries may make scheduled payments and mandatory prepayments of
principal, and regularly scheduled payments of interest in respect of and, so
long as no Default or Event of Default shall have occurred and be continuing,
voluntary repayments of, any Indebtedness permitted under Section 6.1(h), (iii) Company
and its Subsidiaries may make mandatory prepayments and regularly scheduled
payments of principal and interest in respect of any Indebtedness permitted
under Section 6.1(k) (to the extent constituting subordinated
Indebtedness) or 6.1(n), but only to the extent such payments are permitted by
the terms, and subordination provisions (if any) applicable to, such
Indebtedness, and (iv) Company and its Subsidiaries may make payments in
respect of guarantees permitted under Section 6.1(e) to the extent
the Indebtedness guaranteed thereby is permitted to be paid under this Section 6.5
(in each case under the foregoing subclauses (i), (ii) and (iii) in
accordance with the terms of, and only to the extent required by, and subject
to the subordination provisions contained in, the indenture or other agreement
pursuant to which such Indebtedness as issued);

 

76

 

(c)                                  Company may make Restricted Payments to Holdings to the
extent reasonably necessary to permit Holdings (in each case so long as
Holdings applies the amount of any such Restricted Payment for such purpose
within five (5) days of receipt of such amount) (i) to pay general
administrative and corporate overhead costs and expenses (including, without
limitation, expenses arising by virtue of Holdings’ status as a public company
(including fees and expenses related to filings with the Securities and
Exchange Commission, roadshow expenses, printing expenses and fees and expenses
of attorneys and auditors)), (ii) so long as no Default or Event of
Default, in each case, in respect of Section 8.1(a), 8.1(f) or 8.1(g) shall
have occurred and be continuing or shall be caused thereby, to pay the fees and
expenses to Sponsor required to be paid under the Management Services
Agreement, as in effect on December 16, 2004 or after giving effect to any
amendment, restatement or other modification thereto in accordance with Section 6.15(a) hereof,
(iii) to discharge the consolidated tax liabilities of Holdings and its
Subsidiaries and (iv) so long as no Default or Event of Default shall have
occurred and be continuing or shall be caused thereby, to allow Holdings to
repurchase shares of, or options to purchase shares of, Capital Stock of
Holdings from employees, officers or directors of Holdings, Company or any
Subsidiaries thereof in any aggregate amount not to exceed $1,000,000 in any
calendar year or $5,000,000 in the aggregate since the Closing Date;

 

(d)                                 (i) Company may make Restricted Payments to Holdings in
an aggregate amount not to exceed the Restricted Payment Amount (measured on
the date of such Restricted Payment); provided that, notwithstanding the
foregoing, in any four Fiscal Quarter period, the Company may make Restricted
Payments to Holdings in an amount not to exceed the Periodic Dividend Amount;
provided further, that, in any case, any Restricted Payment under this Section 6.5(d)(i) may
only be made so long as (w) no Default or Event of Default has occurred or
is continuing or shall be caused thereby after giving effect to such Restricted
Payment, (x) after giving effect to such Restricted Payment, Holdings and
its Subsidiaries shall have satisfied the RP Conditions, (y) to the extent
Consolidated Adjusted EBITDA for the Test Period most recently ended prior to
such Restricted Payment is less than or equal to $40,000,000, after giving
effect to such Restricted Payment, the total amount of Restricted Payments made
pursuant to this Section 6.5(d)(i) during the Fiscal Quarter in which
the subject Restricted Payment is to be paid and the three Fiscal Quarters most
recently ended does not exceed any applicable Maximum Restricted Payment
Amount, and (z) a Section 6.5(d) Certificate has been delivered;
and (ii) Holdings may make Restricted Payments in an amount equal to the
actual amount of Restricted Payments made by Company to Holdings pursuant to Section 6.5(d)(i) that
have not previously been distributed by Holdings, so long as no Default or
Event of Default shall have occurred and be continuing or shall be caused
thereby; provided, however, that notwithstanding anything to the contrary
contained in this Section 6.5(d), this Section 6.5(d)(ii) shall
not prohibit the payment of any dividend within 60 days after the date of
declaration of such dividend if such dividend was permitted under this Section 6.5(d)(ii) on
the date of declaration;

 

(e)                                  (i) so long as no Default or Event of Default, in each
case, in respect of Sections 8.1(a), 8.1(f) or 8.1(g) shall have
occurred and be continuing or shall be caused thereby, Holdings may make
Restricted Payments to Sponsor to the extent of Restricted Payments received by
Holdings from Company pursuant to Sections 6.5(c)(ii) and (ii) so
long as no Default or Event of Default shall have occurred and be continuing or
shall be caused thereby, Holdings 

 

77

 

may make Restricted Payments (x) as described in Section 6.5(c)(iv) and
(y) in respect of Indebtedness permitted by Section 6.1(m) and
in connection with the redemption or replacement of any preferred Capital Stock
of Holdings described in Section 6.1(m);

 

(f)                                    additional Restricted Payments in an aggregate amount not to
exceed at any time outstanding $10,000,000 (minus any Investments made pursuant
to Section 6.7(l)), if no Default or Event of Default has occurred or is
continuing or would result therefrom; provided that any Restricted Payment made
pursuant this Section 6.5(f) may not subsequently be characterized as
a Restricted Payment made pursuant to any other provision of this Agreement;
and

 

(g)                                 if no Default or Event of Default has occurred or is
continuing or would result therefrom, additional Restricted Payments in an
aggregate amount not to exceed $25,000,000, which Restricted Payments are
funded exclusively by Holdings Equity Proceeds that have not been applied to
any other purpose; provided that any Restricted Payment made pursuant this Section 6.5(g) may
not subsequently be characterized as a Restricted Payment made pursuant to any
other provision of this Agreement.

 

6.6                               Restrictions
on Subsidiary Distributions.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Company to (a) pay dividends or make any other distributions on any of
such Subsidiary’s Capital Stock owned by Company or by any other Subsidiary of
Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to
Company or to any other Subsidiary of Company, (c) make loans or advances
to Company or to any other Subsidiary of Company, or (d) transfer any of
its property or assets to Company or to any other Subsidiary of Company other
than restrictions (i) existing under this Agreement or the Revolving
Credit Documents (as in effect on the Closing Date), (ii) in agreements
evidencing Indebtedness permitted by Sections 6.1(g) and 6.1(l) that
impose restrictions on the property so acquired, (iii) by reason of
customary provisions restricting assignments, subletting or other transfers
contained in leases, licenses, Joint Venture agreements and similar agreements
entered into in the ordinary course of business, (iv) restrictions in
agreements evidencing Indebtedness secured by Liens permitted by Section 6.2(m) that
impose restrictions on the property securing such Indebtedness, (v) customary
restrictions on assets that are the subject of an Asset Sale permitted by Section 6.9
or a Capital Lease permitted by Section 6.1(n) and (vi) in
agreements evidencing Indebtedness permitted by Section 6.1(h) or
6.1(k), in each case, so long as such restrictions are not more restrictive,
taken as a whole, than the restrictions set forth in this Agreement.

 

6.7                               Investments.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, make or
own any Investment in any Person, including without limitation any Joint
Venture, except:

 

78

 

(a)                                  Investments in Cash and Cash Equivalents;

 

(b)                                 Investments by Holdings in Company;

 

(c)                                  Investments made by Company or any of its Subsidiaries in
Subsidiary Guarantors which are wholly-owned Subsidiaries of Company;

 

(d)                                 Investments received by Company or any of its Subsidiaries in
connection with the bankruptcy or reorganization of, or settlement of
delinquent accounts and disputes with, customers or suppliers of such Person,
in each case in the ordinary course of business;

 

(e)                                  accounts receivable arising, and trade credit granted, in the
ordinary course of business of Company and its Subsidiaries, and any Securities
received by Company or any of its Subsidiaries in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss, and any prepayments and
other credits to suppliers made in the ordinary course of business;

 

(f)                                    intercompany loans to the extent permitted under Section 6.1(b);

 

(g)                                 Consolidated Capital Expenditures by Company or any of its
Subsidiaries permitted by Section 6.8(b) of the Revolving Credit
Facility;

 

(h)                                 loans and advances by Company or any of its Subsidiaries to
employees of Company and its Subsidiaries made in the ordinary course of
business in an aggregate principal amount not to exceed $2,000,000 at any time
outstanding;

 

(i)                                     Investments by Company or any of its Subsidiaries made in
connection with Permitted Acquisitions permitted pursuant to Section 6.9(d);

 

(j)                                     Investments by Company or any of its Subsidiaries
constituting non-Cash consideration received by Company and its Subsidiaries in
connection with permitted Asset Sales pursuant to subsection 6.9(c);

 

(k)                                  Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date and described in
Schedule 6.7;

 

(l)                                     other Investments by Company or any of its Subsidiaries in an
aggregate amount not to exceed at any time outstanding $10,000,000 (minus any
Restricted Payments 

 

79

 

made pursuant to Section 6.5(f)), if no Default or Event
of Default has occurred or is continuing or would result therefrom; and

 

(m)                               additional Investments by Company or any of its Subsidiaries
in an aggregate amount not to exceed the Restricted Payment Amount so long as (i) no
Default or Event of Default has occurred or is continuing or shall be caused
thereby after giving effect to such Investment and (ii) after giving
effect to such Investment, the Company and its Subsidiaries shall have
satisfied the Investment Conditions.

 

Notwithstanding the foregoing, in no event shall any Credit
Party make any Investment which results in or facilitates in any manner any
Restricted Payment not otherwise permitted under the terms of Section 6.5.

 

6.8                               Calculations.

 

(a)                                  [RESERVED]

 

(b)                                 [RESERVED]

 

(c)                                  Certain Calculations.

 

(i)                                     With respect to any period during which a Permitted Acquisition
or an Asset Sale has occurred (each, a “Subject Transaction”), for purposes of determining the Leverage Ratio calculation
in Section 6.1(k), Consolidated Adjusted EBITDA and the components of
Consolidated Fixed Charges, as applicable, shall be calculated with respect to
such period on a pro forma basis (including pro forma adjustments arising out
of events which are directly attributable to a specific transaction, are
factually supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X
promulgated under the Securities Act and as interpreted by the staff of the
Securities and Exchange Commission, which would include cost savings resulting
from head count reduction, closure of Facilities and similar restructuring
charges, which pro forma adjustments shall be certified by the chief financial
officer of Company) using the historical audited financial statements of any
business so acquired or to be acquired or sold or to be sold and the
consolidated financial statements of Holdings and its Subsidiaries which shall
be reformulated as if such Subject Transaction, and any Indebtedness incurred
or repaid in connection therewith, had been consummated or incurred or repaid
at the beginning of such period.

 

80

 

(ii)                                  With respect to any period commencing prior to the Closing
Date, Consolidated Adjusted EBITDA shall be calculated with respect to the
portion of such period prior to the Closing Date based on the historical
Consolidated Adjusted EBITDA of the Company during such time, Consolidated
Capital Expenditures shall be calculated with respect to the portion of such
period prior to the Closing Date based on the historical Consolidated Capital
Expenditures of the Company during such time, and the other components of
Consolidated Fixed Charges (other than Consolidated Interest Expense) shall be
calculated with respect to the portion of such period prior to the Closing Date
on a pro forma basis as if the Closing Date occurred on the first day of such
period.

 

(iii)                               With respect to any period commencing prior to the Closing
Date, Consolidated Interest Expense shall be calculated with respect to the
portion of such period prior to the Closing Date on a pro forma basis as if the
Closing Date occurred on the first day of such period (and assuming that the
Indebtedness incurred on the Closing Date was incurred on the first day of such
period and, such Indebtedness bears interest during the portion of such period
prior to the Closing Date at the weighted average of the interest rates
applicable to outstanding Indebtedness during the portion of such period on and
after the Closing Date and that no Indebtedness was repaid during the portion
of such period prior to the Closing Date).

 

6.9                               Fundamental Changes; Asset
Dispositions; Acquisitions.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, enter into
any transaction of merger or consolidation, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease or
sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its
business, assets or property of any kind whatsoever, whether real, personal or
mixed and whether tangible or intangible, whether now owned or hereafter
acquired, or acquire by purchase or otherwise the business, or all or
substantially all of the property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business or other business unit of any Person, except:

 

(a)                                  any Subsidiary of Holdings may be merged with or into Company
or with or into any wholly-owned Guarantor Subsidiary of Company, or be
liquidated, wound up or dissolved, or all or any part of its business, property
or assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to Company or any wholly-owned
Guarantor Subsidiary of Company; provided, in the case of such a merger,
Company or such wholly-owned Guarantor Subsidiary of Company, as applicable
shall be the continuing or surviving Person;

 

81

 

(b)                                 sales or other dispositions of assets that do not constitute
Asset Sales;

 

(c)                                  Asset Sales, the proceeds of which (valued at the principal
amount thereof in the case of non-Cash proceeds consisting of notes or other debt
Securities and valued at fair market value in the case of other non-Cash
proceeds) (i) do not exceed $5,000,000 in the aggregate in any calendar
year and (ii) when aggregated with the proceeds of all other Asset Sales,
do not exceed $15,000,000 in the aggregate from the Closing Date to the date of
determination; provided (1) the consideration received for such
assets shall be in an amount at least equal to the fair market value thereof
(and in respect of a transaction of greater than $2,500,000, as determined in
good faith by the board of directors of Company (or similar governing body)), (2) no
less than 80% thereof shall be paid in Cash, and (3) the Net Asset Sale
Proceeds thereof shall be applied as required by Section 2.13(a);

 

(d)                                 Permitted Acquisitions, the consideration for which
constitutes either (i) common Capital Stock of Holdings or (ii) (x) no
more than $20,000,000 in the aggregate in any calendar year unless (and subject
to clause (y) below) before and after giving effect to any such Permitted
Acquisitions the Fixed Charge Coverage Ratio is at least 1.0 to 1.0 for the
four Fiscal Quarter period most recently ended, calculated to give effect to
such Permitted Acquisition in accordance with Section 6.8(c) as if
such Permitted Acquisition occurred on the first day of such four Fiscal
Quarter period, as demonstrated in a Fixed Charge Coverage Compliance
Certificate delivered to the Administrative Agent prior to such Permitted
Acquisition, and (y) no more than $60,000,000 in the aggregate from the Closing
Date;

 

(e)                                  Investments made in accordance with Section 6.7; and

 

(f)                                    sale and leaseback transactions permitted pursuant to Section 6.3.

 

6.10                        Disposal of Subsidiary Interests.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to (a) directly or indirectly
issue, sell, assign, pledge or otherwise encumber or dispose of any Capital
Stock of any of its Subsidiaries, except to qualify directors if required by
applicable law or (b) permit any of its Subsidiaries directly or
indirectly to issue, sell, assign, pledge or otherwise encumber or dispose of
any Capital Stock of any of its Subsidiaries, except (i) Company may issue
Capital Stock to Holdings, (ii) Subsidiaries may issue Capital Stock to
Company or to a Guarantor Subsidiary of Company (subject to the restrictions on
such disposition otherwise imposed under Section 6.9) or to qualify
directors if required by applicable law and (iii) Company or any
Subsidiary may sell or otherwise dispose of the Capital Stock of its
Subsidiaries in an Asset Sale permitted by Section 6.9.

 

6.11                        Fiscal Year.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, change its Fiscal Year-end from December 31;
provided, that the Fiscal Year-end of Holdings and its Subsidiaries may
be changed to the end of any Fiscal Quarter with the prior written consent of,
and following receipt of any information requested by, 

 

82

 

Administrative Agent (including, without limitation, reconciliation
statements for the immediately preceding three years described in Section 5.1(e)).

 

6.12                        Transactions with Shareholders
and Affiliates.  Each of
Holdings and Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service or the making of any loan) with any holder of 10% or
more of any class of Capital Stock of Holdings or any of its Subsidiaries or
with any Affiliate of Holdings or of any such holder, on terms that are less
favorable to Holdings or that Subsidiary, as the case may be, than those that
might be obtained at the time from a Person who is not such a holder or
Affiliate; provided, the foregoing restriction shall not apply to (a) any
transaction expressly permitted under this Agreement; (b) reasonable and
customary fees paid to, and customary indemnification of, members of the board
of directors (or similar governing body) of Holdings and its Subsidiaries; (c) compensation
arrangements for officers and other employees of Holdings and its Subsidiaries
entered into in the ordinary course of business; (d) transactions
described in Schedule 6.12; and (e) any transaction between Credit
Parties.

 

6.13                        Conduct of Business.  From and after the Closing Date, each of
Holdings and Company shall not, and shall not permit any of its Subsidiaries
to, engage in any business other than (i) the businesses engaged in by Company
on the Closing Date and similar or related businesses and (ii) such other
lines of business as may be consented to by Requisite Lenders.

 

6.14                        Permitted Activities of Holdings.  Holdings shall not (a) incur, directly
or indirectly, any Indebtedness other than the Indebtedness (i) under the
Credit Documents, (ii) under the Revolving Credit Documents and (iii) permitted
by Section 6.1(m); (b) create or suffer to exist any Lien upon any
property or assets now owned or hereafter acquired by it other than the Liens
created under the Collateral Documents to which it is a party; (c) engage
in any business or activity or own any assets other than (i) holding 100%
of the Capital Stock of Company; (ii) performing its obligations and
activities incidental thereto under the Credit Documents, and to the extent not
inconsistent therewith, the Revolving Credit Documents; (iii) making
Restricted Payments to the extent permitted by Section 6.5 of this
Agreement and Section 6.5 of the Revolving Credit Facility; (iv) making
Investments to the extent permitted by Section 6.7 of this Agreement and Section 6.7
of the Revolving Credit Facility; (v) issuances of its Capital Stock; (vi) conducting
activities arising by virtue of its status as a public company, including
without limitation, compliance with its reporting obligations and other
requirements applicable to public companies; and (vii) retaining Cash in a
deposit account subject to a Blocked Account Agreement in the amount of any
Restricted Payments received from the Company pursuant to Section 6.5(d)(i);
(d) consolidate with or merge with or into, or convey, transfer or lease
all or substantially all its assets to, any Person; (e) sell or otherwise
dispose of any Capital Stock of any of its Subsidiaries; (f) create or acquire
any Subsidiary or make or own any Investment in any Person other than Company;
or (g) fail to hold itself out to the public as a legal entity separate
and distinct from all other Persons.

 

6.15                        Amendments or Waivers of Certain
Agreements.

 

83

 

(a)                                  Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, terminate or agree to any amendment, restatement,
supplement or other modification to, or waiver of, any of its rights under any
Revolving Credit Document, any Organizational Document or the Management
Services Agreement, or make any payment consistent with an amendment thereof or
change thereto (which amendment or other modification, in the case of (i) an
Organizational Document or any Revolving Credit Document, is adverse in any
material respect to the rights or interests of the Lenders (provided
that with respect to any termination, amendment, restatement, supplement or
other modification to, or waiver of any Revolving Loan Document, none of the
following amendments shall be deemed adverse for purposes of this clause (i): (A) any
waiver of any default or event of default or any other waiver or amendment
permitting or increasing (or having the effect of permitting or increasing)
borrowing availability under the Borrowing Base (without increasing the
Revolving Loan Commitments (as defined in the Revolving Credit Facility)), (B) payment
of customary fees in connection with any waiver or amendment, or (C) any
amendment implementing incremental or additional loans and/or commitments under
the Revolving Loan Documents to the extent the Indebtedness in respect thereof
is permitted under Section 6.1) and (ii) the Management Services
Agreement, involves the imposition of additional fees or any increase in fees
payable thereunder (other than as set forth in this Section 6.15) or is
adverse in any respect to the rights or interests of the Lenders), without in
each case obtaining the prior written consent of Requisite Lenders to such
amendment, restatement, supplement or other modification or waiver.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to, amend or otherwise change the
terms of any Indebtedness permitted to be incurred under Section 6.1 which
is subordinated to the Obligations, or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or change
is to increase the interest rate on or fees in respect of such Indebtedness,
change (to earlier dates) any dates upon which payments of principal or
interest are due thereon, change any event of default or condition to an event
of default with respect thereto (other than to eliminate any such event of
default or increase any grace period related thereto), change the redemption,
prepayment or defeasance provisions thereof, change the subordination
provisions thereof (or of any guaranty thereof), or change any collateral
therefor (other than to release such collateral), or if the effect of such
amendment or change, together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Indebtedness (or a trustee or other
representative on their behalf) which would be adverse to Holdings or Company,
any of their Subsidiaries, or Lenders. 
Notwithstanding the foregoing, this Section 6.15 shall not apply to
any amendment to the Management Services Agreement, or the termination thereof,
executed or made in connection with a Qualifying IPO; provided, that the
payments made in connection therewith shall not exceed the Qualifying IPO
Payment.

 

6.16                        Limitation
on Payments Relating to Other Debt(a)                  . 
Each of Holdings and Company shall
not, and shall not permit any of its Subsidiaries through any manner or means
or through any other Person to, directly or indirectly, declare, order, make or
offer to make, any prepayment, repurchase or redemption of, or otherwise
defease, the Indebtedness permitted to be incurred under Section 6.1(k) (such
Indebtedness, “Other Debt”), or
segregate funds for any such prepayment, repurchase, redemption or defeasance,
or enter into any derivative or other transaction with any financial
institution, commodities or stock exchange or clearinghouse (a 

 

84

 

“Derivatives
Counterparty”)
obligating Holdings, the Company or any Subsidiary to make payments to such
Derivatives Counterparty as a result of any change in market value of Other
Debt, other than (a) any prepayment, repurchase or redemption of Other
Debt pursuant to a Permitted Refinancing thereof and (b) prepayments,
repurchases or redemptions of Other Debt in an aggregate amount not to exceed
the Restricted Payment Amount so long as (i) no Default or Event of
Default has occurred or is continuing or shall be caused thereby after giving
effect to such payment and (ii) after giving effect to such payment, the
Company and its Subsidiaries shall have satisfied the Investment
Conditions.  Notwithstanding anything to
the contrary contained in this Agreement, the Credit Parties are permitted to
redeem the Senior Notes pursuant to the Qualifying Senior Notes
Redemption.  Notwithstanding anything to
the contrary contained in this Agreement, Holdings is permitted to prepay,
repurchase or redeem Other Debt utilizing Holdings Equity Proceeds that have
not been applied to any other purpose, if no Default or Event of Default has
occurred or is continuing or would result therefrom; provided that any prepayment,
repurchase or redemption or Other Debt pursuant to this sentence may not
subsequently be characterized as having been made pursuant to any other
provision of this Agreement.

 

SECTION 7.                            GUARANTY

 

7.1                               Guaranty
of the Obligations.  Subject to
the provisions of Section 7.2, Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty to the Beneficiaries the due and
punctual payment in full of all Obligations when the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively, the “Guaranteed Obligations”).

 

7.2                               Contribution
by Guarantors.  All
Guarantors desire to allocate among themselves (collectively, the “Contributing Guarantors”), in a fair
and equitable manner, their obligations arising under this Guaranty.  Accordingly, in the event any payment or
distribution is made on any date by a Guarantor (a “Funding Guarantor”) under this Guaranty such
that its Aggregate Payments exceeds its Fair Share as of such date, such
Funding Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in an amount sufficient to cause each Contributing
Guarantor’s Aggregate Payments to equal its Fair Share as of such date.  “Fair Share” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a) the
ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share
Contribution Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed.  “Fair Share Contribution Amount” means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Guaranty
that would not render its obligations hereunder or thereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of
Title 11 of the United States Code or any comparable applicable provisions 

 

85

 

of state law; provided, solely for purposes of calculating the “Fair Share Contribution Amount” with respect
to any Contributing Guarantor for purposes of this Section 7.2, any assets
or liabilities of such Contributing Guarantor arising by virtue of any rights
to subrogation, reimbursement or indemnification or any rights to or
obligations of contribution hereunder shall not be considered as assets or
liabilities of such Contributing Guarantor. 
“Aggregate Payments” means, with
respect to a Contributing Guarantor as of any date of determination, an amount
equal to (1) the aggregate amount of all payments and distributions made
on or before such date by such Contributing Guarantor in respect of this
Guaranty (including, without limitation, in respect of this Section 7.2),
minus (2) the aggregate amount of all payments received on or before such
date by such Contributing Guarantor from the other Contributing Guarantors as
contributions under this Section 7.2. 
The amounts payable as contributions hereunder shall be determined as of
the date on which the related payment or distribution is made by the applicable
Funding Guarantor.  The allocation among
Contributing Guarantors of their obligations as set forth in this Section 7.2
shall not be construed in any way to limit the liability of any Contributing
Guarantor hereunder.  Each Guarantor is a
third party beneficiary to the contribution agreement set forth in this Section 7.2.

 

7.3                               Payment
by Guarantors.  Subject to Section 7.2,
Guarantors hereby jointly and severally agree, in furtherance of the foregoing
and not in limitation of any other right which any Beneficiary may have at law
or in equity against any Guarantor by virtue hereof, that upon the failure of
Company to pay any of the Guaranteed Obligations when and as the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. § 362(a)), Guarantors will upon
demand pay, or cause to be paid, in Cash, to Administrative Agent for the
ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid
principal amount of all Guaranteed Obligations then due as aforesaid, accrued
and unpaid interest on such Guaranteed Obligations (including interest which,
but for Company’s becoming the subject of a case under the Bankruptcy Code, would
have accrued on such Guaranteed Obligations, whether or not a claim is allowed
against Company for such interest in the related bankruptcy case) and all other
Guaranteed Obligations then owed to Beneficiaries as aforesaid.

 

7.4                               Liability
of Guarantors Absolute.  Each
Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guaranteed Obligations.  In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:

 

(a)                                  this Guaranty is a guaranty of payment when due and not of
collectability.  This Guaranty is a primary
obligation of each Guarantor and not merely a contract of surety;

 

(b)                                 Administrative Agent may enforce this Guaranty upon the
occurrence and during the continuance of an Event of Default notwithstanding
the existence of any dispute

 

86

 

between Company and any Beneficiary with respect to the existence and
continuance of such Event of Default;

 

(c)           the
obligations of each Guarantor hereunder are independent of the obligations of
Company and the obligations of any other guarantor (including any other
Guarantor) of the obligations of Company, and a separate action or actions may
be brought and prosecuted against such Guarantor whether or not any action is
brought against Company or any of such other guarantors and whether or not
Company is joined in any such action or actions;

 

(d)           payment
by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall
in no way limit, affect, modify or abridge any Guarantor’s liability for any
portion of the Guaranteed Obligations which has not been paid.  Without limiting the generality of the
foregoing, if Administrative Agent is awarded a judgment in any suit brought to
enforce any Guarantor’s covenant to pay a portion of the Guaranteed
Obligations, such judgment shall not be deemed to release such Guarantor from
its covenant to pay the portion of the Guaranteed Obligations that is not the
subject of such suit, and such judgment shall not, except to the extent
satisfied by such Guarantor, limit, affect, modify or abridge any other
Guarantor’s liability hereunder in respect of the Guaranteed Obligations;

 

(e)           any
Beneficiary, upon such terms as it deems appropriate, without notice or demand
and without affecting the validity or enforceability hereof or giving rise to
any reduction, limitation, impairment, discharge or termination of any
Guarantor’s liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for the
payment hereof or the Guaranteed Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or
modify, with or without consideration, any security for payment of the
Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or
any other obligation of any Person (including any other Guarantor) with respect
to the Guaranteed Obligations; (v) enforce and apply any security now or
hereafter held by or for the benefit of such Beneficiary in respect hereof or
the Guaranteed Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that such Beneficiary may have against any
such security, in each case as such Beneficiary in its discretion may determine
consistent herewith and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable, and even though such action operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of any Guarantor
against Company or any security for the Guaranteed Obligations; and (vi) exercise
any other rights available to it under the Credit Documents; and

 

87

 

(f)            this
Guaranty and the obligations of Guarantors hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason (other than payment in full of the
Guaranteed Obligations), including the occurrence of any of the following, whether
or not any Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce an agreement or election not to assert
or enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Credit Documents, at law, in equity
or otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guaranteed Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the
terms or provisions (including provisions relating to events of default)
hereof, any of the other Credit Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the
Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or such Credit Document or any agreement relating to such other
guaranty or security; (iii) the Guaranteed Obligations, or any agreement
relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other Credit
Documents or from the proceeds of any security for the Guaranteed Obligations,
except to the extent such security also serves as collateral for indebtedness
other than the Guaranteed Obligations) to the payment of indebtedness other
than the Guaranteed Obligations, even though any Beneficiary might have elected
to apply such payment to any part or all of the Guaranteed Obligations; (v) any
Beneficiary’s consent to the change, reorganization or termination of the
corporate structure or existence of Holdings or any of its Subsidiaries and to
any corresponding restructuring of the Guaranteed Obligations; (vi) any
failure to perfect or continue perfection of a security interest in any collateral
which secures any of the Guaranteed Obligations; (vii) any defenses,
set-offs or counterclaims which Company may allege or assert against any
Beneficiary in respect of the Guaranteed Obligations, including failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any other act
or thing or omission, or delay to do any other act or thing, which may or might
in any manner or to any extent vary the risk of any Guarantor as an obligor in
respect of the Guaranteed Obligations.

 

7.5          Waivers by
Guarantors.  Each
Guarantor hereby waives, for the benefit of Beneficiaries: (a) any right
to require any Beneficiary, as a condition of payment or performance by such
Guarantor, to (i) proceed against Company, any other guarantor (including
any other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any such other guarantor or
any other Person, (iii) proceed against or have resort to any balance of
any deposit account or credit on the books of any Beneficiary in favor of
Company or any other Person, or (iv) pursue any other remedy in the power
of any Beneficiary whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of Company or
any other Guarantor including any defense based on or arising out of the lack
of validity or the unenforceability of the Guaranteed Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of Company or any other Guarantor from any cause other than payment
in full of the Guaranteed Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in other respects more 

 

88

 

burdensome than that of the principal; (d) any defense based upon
any Beneficiary’s errors or omissions in the administration of the Guaranteed
Obligations, except behavior which amounts to bad faith; (e) (i) any
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms hereof and any legal or equitable discharge of such
Guarantor’s obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor’s liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness,
diligence and any requirement that any Beneficiary protect, secure, perfect or
insure any security interest or lien or any property subject thereto; (f) notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance hereof, notices of
default hereunder or any agreement or instrument related thereto, notices of
any renewal, extension or modification of the Guaranteed Obligations or any
agreement related thereto, notices of any extension of credit to Company and
notices of any of the matters referred to in Section 7.4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be
derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.

 

7.6          Guarantors’
Rights of Subrogation, Contribution, etc.  Until the Guaranteed Obligations shall have
been indefeasibly paid in full and the Term Loan Commitments shall have
terminated, each Guarantor hereby waives and agrees not to assert any claim,
right or remedy, direct or indirect, that such Guarantor now has or may
hereafter have against Company or any other Guarantor or any of its assets in
connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation (a) any right of subrogation, reimbursement
or indemnification that such Guarantor now has or may hereafter have against
Company with respect to the Guaranteed Obligations, (b) any right to
enforce, or to participate in, any claim, right or remedy that any Beneficiary
now has or may hereafter have against Company, and (c) any benefit of, and
any right to participate in, any collateral or security now or hereafter held
by any Beneficiary.  In addition, until
the Guaranteed Obligations shall have been indefeasibly paid in full and the
Term Loan Commitments shall have terminated, each Guarantor shall withhold
exercise of any right of contribution such Guarantor may have against any other
guarantor (including any other Guarantor) of the Guaranteed Obligations,
including, without limitation, any such right of contribution as contemplated
by Section 7.2.  Each Guarantor
further agrees that, to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor.  If any amount shall be paid to any Guarantor
on account of any such subrogation, reimbursement, indemnification or
contribution rights at any time when all Guaranteed Obligations shall not have
been finally and indefeasibly paid in full, such amount shall be held in trust
for Administrative Agent on behalf of Beneficiaries and shall forthwith be paid
over to Administrative Agent for the benefit of 

 

89

 

Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.

 

7.7          Subordination
of Other Obligations.  Any
Indebtedness of Company or any Guarantor now or hereafter held by any Guarantor
(the “Obligee Guarantor”) is hereby
subordinated in right of payment to the Guaranteed Obligations, and any such
indebtedness collected or received by the Obligee Guarantor after an Event of
Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid
over to Administrative Agent for the benefit of Beneficiaries to be credited
and applied against the Guaranteed Obligations but without affecting, impairing
or limiting in any manner the liability of the Obligee Guarantor under any
other provision hereof.

 

7.8          Continuing
Guaranty.  This
Guaranty is a continuing guaranty and shall remain in effect until all of the
Guaranteed Obligations shall have been paid in full and the Term Loan
Commitments shall have terminated.  Each
Guarantor hereby irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guaranteed Obligations.

 

7.9          Authority
of Guarantors or Company.  It is
not necessary for any Beneficiary to inquire into the capacity or powers of any
Guarantor or Company or the officers, directors or any agents acting or
purporting to act on behalf of any of them.

 

7.10        Financial
Condition of Company.  Any
Credit Extension may be made to Company or continued from time to time without
notice to or authorization from any Guarantor regardless of the financial or
other condition of Company at the time of any such grant or continuation, as
the case may be.  No Beneficiary shall
have any obligation to disclose or discuss with any Guarantor its assessment,
or any Guarantor’s assessment, of the financial condition of Company.  Each Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the
Credit Documents, and each Guarantor assumes the responsibility for being and
keeping informed of the financial condition of Company and of all circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations.  Each Guarantor hereby waives and relinquishes
any duty on the part of any Beneficiary to disclose any matter, fact or thing
relating to the business, operations or conditions of Company now known or
hereafter known by any Beneficiary.

 

7.11        Bankruptcy, etc.  So long as
any Guaranteed Obligations remain outstanding, no Guarantor shall, without the
prior written consent of Administrative Agent acting pursuant to the
instructions of Requisite Lenders, commence or join with any other Person in
commencing any bankruptcy, reorganization or insolvency case or proceeding of
or against Company or any other Guarantor. 
The obligations of Guarantors hereunder shall not be reduced, limited,
impaired, discharged, deferred, suspended or terminated by any case or proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Company or any other 

 

90

 

Guarantor or by any defense which Company or any other
Guarantor may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.

 

(b)           Each
Guarantor acknowledges and agrees that any interest on any portion of the
Guaranteed Obligations which accrues after the commencement of any case or
proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that
the Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto
should be determined without regard to any rule of law or order which may
relieve Company of any portion of such Guaranteed Obligations.  Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Administrative Agent, or allow the claim of
Administrative Agent in respect of, any such interest accruing after the date
on which such case or proceeding is commenced.

 

(c)           In
the event that all or any portion of the Guaranteed Obligations are paid by
Company, the obligations of Guarantors hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) are rescinded or recovered directly or
indirectly from any Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall
constitute Guaranteed Obligations for all purposes hereunder.

 

7.12        Discharge
of Guaranty Upon Sale of Guarantor.  If all of the Capital Stock of any Guarantor
(other than Holdings) or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in accordance
with the terms and conditions hereof, the Guaranty of such Guarantor or such
successor in interest, as the case may be, hereunder shall automatically be
discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale.

 

SECTION 8.    EVENTS OF
DEFAULT

 

8.1          Events
of Default.  If any one
or more of the following conditions or events shall occur:

 

(a)           Failure
to Make Payments When Due.  Failure
by Company to pay (i) when due any principal of any Loan, whether at
stated maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment or otherwise or (ii) any interest on any Loan or any
fee or any other amount due hereunder within five (5) days after the date
due; or

 

91

 

(b)           Default
in Other Agreements.  (i) Failure
of any Credit Party or any of their respective Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or more
items of Indebtedness (other than Indebtedness referred to in Section 8.1(a))
in an individual principal amount of $5,000,000 or more or with an aggregate
principal amount of $10,000,000 or more, in each case beyond the grace period,
if any, provided therefor; or (ii) breach or default by any Credit Party
with respect to any other term (other than Section 6.8(a) of the
Revolving Credit Facility) of (1) one or more items of such Indebtedness
or (2) any loan agreement, mortgage, indenture or other agreement relating
to such item(s) of Indebtedness, or any other event or circumstance shall
occur, in each case beyond the grace period, if any, provided therefor, if the
effect of such breach or default or event or circumstance is to cause, or to
permit the holder or holders of that Indebtedness (or a trustee on behalf of
such holder or holders), to cause, that Indebtedness to become or be declared
due and payable (or redeemable) prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be, or to require an
offer to purchase or redeem such Indebtedness be made (other than any due on
sale provision with respect to any Indebtedness permitted to be repaid
hereunder and which is so repaid in full); or

 

(c)           Breach
of Certain Covenants.  Failure of any
Credit Party to perform or comply with any term or condition contained in
Sections 2.6, 2.14, 5.1(f), 5.1(g), 5.2(i), 5.14, 5.15 or 6; or

 

(d)           Breach
of Representations, etc.  Any
representation, warranty or certification made or deemed made by any Credit
Party in any Credit Document or in any statement or certificate at any time
given by any Credit Party or any of its Subsidiaries in writing pursuant hereto
or thereto or in connection herewith or therewith shall be false in any material
respect as of the date made or deemed made; or

 

(e)           Other
Defaults Under Credit Documents.  Any
Credit Party shall default in the performance of or compliance with any term
contained herein or any of the other Credit Documents, other than any such term
referred to in any other Section of this Section 8.1, and such
default shall not have been remedied or waived within thirty (30) days after
the earlier of (i) an officer of such Credit Party becoming aware of such
default or (ii) receipt by Company of notice from Administrative Agent or
any Lender of such default; or

 

(f)            Involuntary
Bankruptcy; Appointment of Receiver, etc.. 
(i) A court of competent jurisdiction shall enter a decree or order
for relief in respect of Holdings or any of its Subsidiaries in an involuntary
case under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which decree or order is
not stayed; or any other similar relief shall be granted under any applicable
federal or state law; or (ii) an involuntary case shall be commenced
against Holdings or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Holdings or any of its Subsidiaries,
or over all or a substantial part of its 

 

92

 

property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of Holdings or any of its Subsidiaries for all or a substantial part
of its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Holdings or
any of its Subsidiaries, and any such event described in this clause (ii) shall
continue for sixty (60) days without having been dismissed, bonded or
discharged; or

 

(g)           Voluntary
Bankruptcy; Appointment of Receiver, etc.. 
(i) Holdings or any of its Subsidiaries shall have an order for
relief entered with respect to it or shall commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Holdings or any of its Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) Holdings or any
of its Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the board
of directors (or similar governing body) of Holdings or any of its Subsidiaries
(or any committee thereof) shall adopt any resolution or otherwise authorize
any action to approve any of the actions referred to in this Section 8.1(g) or
in Section 8.1(f) above; or

 

(h)           Judgments
and Attachments.  Any money judgment,
writ or warrant of attachment or similar process involving (i) in any
individual case an amount in excess of $5,000,000 or (ii) in the aggregate
at any time an amount in excess of $10,000,000 (in either case to the extent
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Holdings or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60)
days (or in any event later than five (5) days prior to the date of any
proposed sale thereunder); or

 

(i)            Dissolution.  Any order, judgment or decree shall be
entered against any Credit Party decreeing the dissolution or split up of such
Credit Party; or

 

(j)            Employee
Benefit Plans.  (i) There shall
occur one or more ERISA Events or (ii) there shall exists any fact or
circumstance that results or reasonably could be expected to result in the
imposition of a Lien or security interest with respect to any Employee Benefit
Plan under Section 412(n) of the Internal Revenue Code or under
ERISA, in either case involving or that might reasonably be expected to involve
in any individual case an amount in excess of $5,000,000 or in the aggregate at
any time an amount in excess of $10,000,000; or

 

(k)           Change
of Control.  A Change of Control
shall occur; or

 

93

 

(l)            Guaranties,
Collateral Documents and other Credit Documents.  At any time after the execution and delivery
thereof, (i) the Guaranty for any reason, other than the satisfaction in
full of all Obligations or upon the release of such Guaranty with respect to a
Subsidiary of the Company in connection with an Asset Sale permitted hereby,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void or any Guarantor shall
repudiate its obligations thereunder, (ii) this Agreement or any
Collateral Document ceases to be in full force and effect (other than by reason
of a release of Collateral in accordance with the terms hereof or thereof or
the satisfaction in full of the Obligations in accordance with the terms
hereof) or shall be declared null and void, or Collateral Agent shall not have
or shall cease to have a valid and perfected Lien in any Collateral purported
to be covered by the Collateral Documents with the priority required by the
relevant Collateral Document, in each case for any reason other than the
failure of Collateral Agent or any Secured Party to take any action within its
control, or (iii) any Credit Party shall contest the validity or
enforceability of any Credit Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Credit Document to which it is a party;

 

THEN, (1) upon the occurrence of any Event of Default
described in Section 8.1(f) or 8.1(g), automatically, and (2) upon
the occurrence of any other Event of Default, upon notice to Company by
Administrative Agent (which notice shall be given by Administrative Agent upon
the request of the Requisite Lenders), (A) the Term Loan Commitments, if
any, of each Lender having such Term Loan Commitments shall immediately
terminate; (B) each of the following shall immediately become due and
payable, in each case without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by each
Credit Party: (I) the unpaid principal amount of and accrued interest on
the Loans and (II) all other Obligations; and (C) Administrative
Agent may cause Collateral Agent to enforce any and all Liens and security
interests created pursuant to Collateral Documents.

 

SECTION 9.    AGENTS

 

9.1          Appointment
of Agents.  Credit
Suisse is hereby appointed Administrative Agent and Collateral Agent hereunder
and under the other Credit Documents and each Lender hereby authorizes
Administrative Agent and Collateral Agent to act as its agent in each such
capacity in accordance with the terms hereof and the other Credit
Documents.  Credit Suisse is hereby
appointed Syndication Agent hereunder, and each Lender hereby authorizes
Syndication Agent to act as its agent in accordance with the terms hereof and
the other Credit Documents.  Credit
Suisse is hereby appointed Documentation Agent hereunder, and each Lender
hereby authorizes Documentation Agent to act as its agent in accordance with
the terms hereof and the other Credit Documents.  Each Agent hereby agrees to act upon the
express conditions contained herein and the other Credit Documents, as
applicable.  The provisions of this Section 9
are solely for the benefit of Agents and Lenders and no Credit Party shall have
any rights as a third party beneficiary of any of the provisions thereof.  In performing its functions and duties
hereunder, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Holdings or any of its
Subsidiaries.

 

94

 

9.2          Powers
and Duties.  Each Lender
irrevocably authorizes each Agent to take such action on such Lender’s behalf
and to exercise such powers, rights and remedies hereunder and under the other
Credit Documents as are specifically delegated or granted to such Agent by the
terms hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto.  Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents.  Each Lender irrevocably authorizes each of
the Administrative Agent and the Collateral Agent to execute and deliver the
Intercreditor Agreement and agrees to be bound by the provisions therein.  Each Agent may perform any and all of their
duties and exercise their rights and powers by or through any one or more
sub-agents appointed by such Agent.  Each
Agent and any such sub-agent may perform any and all its duties and exercise
its rights and powers through their respective Affiliates, and the respective
directors, officers, employees, agents and advisors of such Agent and such
Agent’s Affiliates.  The exculpatory
provisions of the Credit Documents shall apply to any such sub-agent and to the
Affiliates, directors, officers, employees, agents and advisors of such 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 Agent.  No Agent
shall have, by reason hereof or any of the other Credit Documents, a fiduciary
relationship in respect of any Lender; and nothing herein or any of the other
Credit Documents, expressed or implied, is intended to or shall be so construed
as to impose upon any Agent any obligations in respect hereof or any of the
other Credit Documents except as expressly set forth herein or therein.

 

9.3          General
Immunity.

 

(a)           No
Responsibility for Certain Matters. 
No Agent shall be responsible to any Lender for the execution,
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency hereof or any other Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statements or in any financial or other statements, instruments,
reports or certificates or any other documents furnished or made by any Agent
to Lenders or by or on behalf of any Credit Party to any Agent or any Lender in
connection with the Credit Documents and the transactions contemplated thereby
or for the financial condition or business affairs of any Credit Party or any
other Person liable for the payment of any Obligations, nor shall any Agent be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Credit Documents or as to the use of the proceeds of the Loans or as to the
existence or possible existence of any Event of Default or Default or to make
any disclosures with respect to the foregoing. 
No Agent shall be deemed to have knowledge of any Default or Event of
Default unless and until written notice thereof is given to such Agent by the
Borrower or a Lender.  Anything contained
herein to the contrary notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding Loans or the
component amounts thereof.

 

(b)           Exculpatory
Provisions.  No Agent nor any of its
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Credit Documents except to the extent caused by 

 

95

 

such Agent’s gross negligence or willful misconduct as
determined by a final non-appealable judgment of a court of competent
jurisdiction.  Each Agent shall be
entitled to refrain from any act or the taking of any action (including the
failure to take an action) in connection herewith or any of the other Credit
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until such Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders
as may be required to give such instructions under Section 10.5) and, upon
receipt of such instructions from Requisite Lenders (or such other Lenders, as
the case may be), such Agent shall be entitled to act or (where so instructed)
refrain from acting, or to exercise such power, discretion or authority, in
accordance with such instructions. 
Without prejudice to the generality of the foregoing, (i) each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper Person or Persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Holdings and its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against
any Agent as a result of such Agent acting or (where so instructed) refraining
from acting hereunder or any of the other Credit Documents in accordance with
the instructions of Requisite Lenders (or such other Lenders as may be required
to give such instructions under Section 10.5).  Each Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon.

 

9.4          Agents
Entitled to Act as Lender.  The agency hereby created shall in no way
impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender
hereunder.  With respect to its
participation in the Loans, each Agent shall have the same rights and powers
hereunder as any other Lender and may exercise the same as if it were not
performing the duties and functions delegated to it hereunder, and the term “Lender”
shall, unless the context clearly otherwise indicates, include each Agent in
its individual capacity.  Any Agent and
its Affiliates may accept deposits from, lend money to, own securities of, and
generally engage in any kind of banking, trust, financial advisory or other
business with Holdings or any of its Affiliates as if it were not performing
the duties specified herein, and may accept fees and other consideration from
Company for services in connection herewith and otherwise without having to
account for the same to Lenders.

 

9.5          Lenders’
Representations, Warranties and Acknowledgment.

 

(a)           Each
Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Holdings and its Subsidiaries.  No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of
Lenders or to provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the making of the

 

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Loans or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.

 

(b)           Each
Lender, by delivering its signature page to this Agreement shall be deemed
to have acknowledged receipt of, and consented to and approved, each Credit
Document and each other document required to be approved by any Agent,
Requisite Lenders or Lenders, as applicable on the Closing Date.

 

9.6          Right
to Indemnity.  Each Lender,
in proportion to its Pro Rata Share, severally agrees to indemnify each Agent,
to the extent that such Agent shall not have been reimbursed by any Credit
Party, for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against such Agent in exercising its
powers, rights and remedies or performing its duties hereunder or under the
other Credit Documents or otherwise in its capacity as such Agent in any way
relating to or arising out of this Agreement or the other Credit Documents; provided,
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent’s gross negligence or willful
misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction.  If any indemnity
furnished to any Agent for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished; provided, in no event shall this
sentence require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement in excess of such Lender’s Pro Rata Share thereof; and provided
further, this sentence shall not be deemed to require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement described in the proviso in
the immediately preceding sentence.

 

9.7          Successor
Administrative Agent. 
Administrative Agent may resign at any time by giving thirty (30) days’
prior written notice thereof to Lenders and Company.  Upon any such notice of resignation,
Requisite Lenders shall have the right, upon five (5) Business Days’
notice to Company, to appoint a successor Administrative Agent.  If no successor shall have been so appointed
by the Requisite Lenders and shall have accepted such appointment within thirty
(30) days after the resigning Administrative Agent gives notice of its
resignation, then the resigning Administrative Agent may, on behalf of Agents
and Lenders, appoint a successor Administrative Agent.  Upon the acceptance of any appointment as
Administrative Agent hereunder 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 and the retiring Administrative Agent shall promptly (i) transfer
to such successor Administrative Agent all sums, Securities and other items of
Collateral held under the Collateral Documents, together with all records and
other documents necessary or appropriate in connection with the performance of
the duties of the successor Administrative Agent under the Credit Documents,
and (ii) execute and deliver to such successor Administrative Agent such 

 

97

 

amendments to financing statements, and take such other actions, as may
be necessary or appropriate in connection with the assignment to such successor
Administrative Agent of the security interests created under the Collateral
Documents, whereupon such retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. 
After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent hereunder.

 

9.8          Collateral Documents and
Guaranty.

 

(a)           Agents
under Collateral Documents and Guaranty. 
Each Lender hereby further authorizes Administrative Agent or Collateral
Agent, as applicable, on behalf of and for the benefit of Lenders, to be the
agent for and representative of Lenders with respect to the Guaranty, the
Collateral and the Collateral Documents. 
Subject to Section 10.5, without further written consent or
authorization from Lenders, Administrative Agent or Collateral Agent, as
applicable may execute any documents or instruments necessary to (i) release
any Lien encumbering any item of Collateral that is the subject of a sale or
other disposition of assets permitted hereby or to which Requisite Lenders (or
such other Lenders as may be required to give such consent under Section 10.5)
have otherwise consented or (ii) release any Guarantor from the Guaranty
pursuant to Section 7.12 or with respect to which Requisite Lenders (or
such other Lenders as may be required to give such consent under Section 10.5)
have otherwise consented.

 

(b)           Right
to Realize on Collateral and Enforce Guaranty.  Anything contained in any of the Credit
Documents to the contrary notwithstanding, Company, Administrative Agent,
Collateral Agent and each Lender hereby agree that (i) no Lender shall
have any right individually to realize upon any of the Collateral or to enforce
the Guaranty, it being understood and agreed that all powers, rights and
remedies hereunder may be exercised solely by Administrative Agent, on behalf
of Lenders in accordance with the terms hereof and all powers, rights and
remedies under the Collateral Documents may be exercised solely by Collateral
Agent, and (ii) in the event of a foreclosure by Collateral Agent on any
of the Collateral pursuant to a public or private sale, Collateral Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Collateral Agent, as agent for and representative of Secured Parties (but
not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Collateral Agent at such sale.

 

SECTION 10.       MISCELLANEOUS

 

10.1        Notices.  Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given to a Credit Party, Collateral Agent, 

 

98

 

Administrative Agent, Syndication Agent or Documentation Agent, shall
be sent to such Person’s address as set forth on Appendix B or in the other
relevant Credit Document, and in the case of any Lender, the address as
indicated on Appendix B or otherwise indicated to Administrative Agent in
writing.  Each notice hereunder shall be in
writing and may be personally served, telexed or sent by telefacsimile or
United States certified or registered mail or courier service and shall be
deemed to have been given when delivered in person or by courier service and
signed for against receipt thereof, upon receipt of telefacsimile or telex, or
three (3) Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided, no notice to any Agent
shall be effective until received by such Agent.  As agreed to among Holdings, the Borrower,
the Administrative Agent and the applicable Lenders from time to time, notices
and other communications may also be delivered by e-mail to the e-mail address
of a representative of the applicable Person provided from time to time by such
Person.

 

The Borrower hereby agrees,
unless directed otherwise by the Administrative Agent or unless the electronic
mail address referred to below has not been provided by the Administrative
Agent to the Borrower, that it will, or will cause its Subsidiaries to, provide
to the Administrative Agent all information, documents and other materials that
it is obligated to furnish to the Administrative Agent pursuant to the Credit
Documents or to the Lenders under Article 5, including all notices,
requests, financial statements, financial and other reports, certificates and
other information materials, but excluding any such communication that (i) relates
to the payment of any principal or other amount due under this Agreement prior
to the scheduled date thereof or (ii) provides notice of any Default or
Event of Default under this Agreement or any other Credit Document (all such
non-excluded communications being referred to herein collectively as “Communications”), by transmitting
the Communications in an electronic/soft medium that is properly identified in
a format acceptable to the Administrative Agent to an electronic mail address
as directed by the Administrative Agent. 
In addition, the Borrower agrees, and agrees to cause its Subsidiaries, to
continue to provide the Communications to the Administrative Agent or the
Lenders, as the case may be, in the manner specified in the Credit Documents
but only to the extent requested by the Administrative Agent.

 

The Borrower hereby acknowledges that (a) the Administrative Agent
will make available to the Lenders materials and/or information provided by or
on behalf of the Borrower hereunder (collectively, the “Borrower Materials”)
by posting the Borrower Materials on Intralinks or another similar electronic
system (the “Platform”)
and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to the
Borrower or its securities) (each, a “Public Lender”). The Borrower hereby agrees
that (w) all Borrower Materials that are to be made available to Public
Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed
to have authorized the Administrative Agent and the Lenders to treat such
Borrower Materials as not containing any material non-public information with
respect to the Borrower or its securities for purposes of United States federal
and state securities laws (provided, however, that to the extent such Borrower
Materials constitute confidential information, they shall be treated as set
forth in Section 10.17); (y) all Borrower Materials marked “PUBLIC”
are permitted to be made available 

 

99

 

through
a portion of the Platform designated as “Public Investor;” and (z) the
Administrative Agent shall be entitled to treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not marked as “Public Investor.” Notwithstanding the foregoing, the
following Borrower Materials shall be marked “PUBLIC”, unless the Borrower
notifies the Administrative Agent promptly that any such document contains
material non-public information: (1) the Credit Documents and (2) notification
of changes in the terms of the Credit Documents.

 

Each Public Lender agrees to cause at least one individual at or on
behalf of such Public Lender to at all times have selected the “Private Side
Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Lender or its delegate, in accordance
with such Public Lender’s compliance procedures and applicable law, including
United States Federal and state securities laws, to make reference to
Communications that are not made available through the “Public Side Information”
portion of the Platform and that may contain material non-public information
with respect to the Borrower or its securities for purposes of United States
Federal or state securities laws.

 

THE PLATFORM IS PROVIDED “AS
IS” AND “AS AVAILABLE”.  NEITHER THE
ADMINISTRATIVE AGENT NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR
COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND
EACH EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE
COMMUNICATIONS.  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 THE ADMINISTRATIVE AGENT
OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE
PLATFORM.  IN NO EVENT SHALL THE
ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES HAVE ANY LIABILITY TO ANY
CREDIT PARTY, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER
OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF ANY CREDIT PARTY’S OR THE ADMINISTRATIVE
AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE
EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT
OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH PERSON’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.

 

The Administrative Agent
agrees that the receipt of the Communications by the Administrative Agent at
its e-mail address set forth above shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of the Credit
Documents.  Each Lender agrees that
receipt of notice to it (as provided in the next sentence) specifying that the
Communications have been posted to the Platform shall constitute effective
delivery of the Communications to such Lender for purposes of the Credit
Documents.  Each Lender agrees to notify
the Administrative Agent in writing (including by electronic communication)
from time to time of such Lender’s e-mail address to which the foregoing notice
may be sent by electronic transmission and that the foregoing notice may be
sent to such e-mail address.

 

100

 

10.2        Expenses.  Whether or not the transactions contemplated
hereby shall be consummated, Borrower agrees to pay promptly (a) all the
actual costs and expenses incurred by Arranger and Administrative Agent and
Collateral Agent in connection with the preparation of the Credit Documents and
any consents, amendments, waivers or other modifications thereto; (b) all
the costs of furnishing all opinions by counsel for Borrower and the other
Credit Parties; (c) the reasonable fees, expenses and disbursements of counsel
to Arranger and Administrative Agent and Collateral Agent in connection with
the negotiation, preparation, execution and administration of the Credit
Documents and any consents, amendments, waivers or other modifications thereto
and any other documents or matters requested by Borrower; (d) all the
actual costs and expenses of creating and perfecting Liens in favor of
Collateral Agent, for the benefit of Lenders pursuant hereto, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search
fees, title insurance premiums and reasonable fees, expenses and disbursements
of counsel to each Agent and Arranger and of counsel providing any opinions
that Arranger, any Agent or Requisite Lenders may request in respect of the
Collateral or the Liens created pursuant to the Collateral Documents; (e) all
the actual and reasonable out-of-pocket costs and fees, expenses and
disbursements of any auditors, accountants, consultants or appraisers retained
by Administrative Agent or Collateral Agent in connection with the Credit
Documents and identified to Borrower prior to their retention; (f) all the
actual costs and expenses (including the fees, expenses and disbursements of
any appraisers, consultants, advisors and agents employed or retained by
Collateral Agent and its counsel) in connection with the custody or
preservation of any of the Collateral; (g) all other actual and reasonable
out-of-pocket costs and expenses incurred by Arranger and each Agent in
connection with the syndication of the Loans and Commitments and the
negotiation, preparation and execution of the Credit Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (h) after the occurrence of a
Default or an Event of Default, all costs and expenses, including reasonable
attorneys’ fees (including allocated costs of internal counsel) and costs of
settlement, incurred by Arranger, each and any Agent or each and any Lender in
enforcing any Obligations of or in collecting any payments due from any Credit
Party hereunder or under the other Credit Documents by reason of such Default
or Event of Default (including in connection with the sale of, collection from,
or other realization upon any of the Collateral or the enforcement of the
Guaranty) or in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a “work-out” or pursuant to
any insolvency or bankruptcy cases or proceedings.

 

10.3        Indemnity.

 

(a)           In
addition to the payment of expenses pursuant to Section 10.2, whether or
not the transactions contemplated hereby shall be consummated, each Credit
Party agrees to defend (subject to Indemnitees’ selection of counsel),
indemnify, pay and hold harmless, Arranger, each Agent, each Lender and the
officers, partners, directors, trustees, employees, agents (including advisors)
and Affiliates of Arranger, each Agent, each Lender (each, an “Indemnitee”), from and against any and all Indemnified Liabilities; provided,
no Credit Party shall have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise from the gross negligence or willful misconduct of that
Indemnitee as determined by a final non-appealable judgment of a court of 

 

101

 

competent jurisdiction. 
As used herein, “Indemnified Liabilities”  means,
collectively, any and all liabilities, obligations, losses, damages (including
natural resource damages), penalties, actions, judgments, suits, claims
(including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up
or abate any Hazardous Materials Activity), expenses and disbursements of any
kind or nature whatsoever (including the reasonable fees and disbursements of
counsel for Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto,
and any fees or expenses incurred by Indemnitees in enforcing this indemnity),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Credit Documents or the transactions contemplated hereby or thereby
(including the Lenders’ agreement to make Credit Extensions or the use or
intended use of the proceeds thereof, or any enforcement of any of the Credit
Documents (including any sale of, collection from, or other realization upon
any of the Collateral or the enforcement of the Guaranty)).

 

(b)           To
the extent that the undertakings to defend, indemnify, pay and hold harmless
set forth in this Section 10.3 may be unenforceable in whole or in part
because they are violative of any law or public policy, the applicable Credit
Party shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.

 

(c)           To
the extent permitted by applicable law, each of Holdings and Company, and its
Subsidiaries, shall not assert, and each of Holdings and Company, and its
Subsidiaries, hereby waives, any claim against Lenders, Agents and Arranger,
and their respective Affiliates, directors, employees, attorneys or agents, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) (whether or not the claim therefor is
based on contract, tort or duty imposed by any applicable legal requirement)
arising out of, in connection with, arising out of, as a result of, or in any
way related to, this Agreement or any Credit Document or any agreement or
instrument contemplated hereby or referred to herein, the transactions
contemplated hereby, any Loan or the use of the proceeds thereof or any act or
omission or event occurring in connection therewith, and each of Holdings and
Company, and its Subsidiaries, hereby waives, releases and agrees not to sue
upon any such claim or any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.

 

10.4        Set-Off.  In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default each
Agent, each Lender and each of their respective Affiliates is hereby authorized
by each Credit Party at any time or from time to time, without notice to any
Credit 

 

102

 

Party or to any other Person (other than Administrative Agent), any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by such Agent, Lender or Affiliate to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Agent, Lender or Affiliate hereunder, and under the other
Credit Documents, including all claims of any nature or description arising out
of or connected hereto, or with any other Credit Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or any other amounts due hereunder
shall have become due and payable pursuant to Section 2 and although such
obligations and liabilities, or any of them, may be contingent or unmatured.

 

10.5        Amendments and Waivers.

 

(a)           Requisite
Lenders’ Consent.  Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party
therefrom, shall in any event be effective without the written concurrence of
the Requisite Lenders.

 

(b)           Affected
Lenders’ Consent.  Without the
written consent of each Lender that would be affected thereby, no amendment,
modification, termination, or consent shall be effective if the effect thereof
would:

 

(i)             extend
the scheduled final maturity of any Loan or Note;

 

(ii)          waive,
reduce or postpone any scheduled repayment (but not prepayment);

 

(iii)       reduce the
rate of interest on any Loan (other than any waiver of any increase in the
interest rate applicable to any Loan pursuant to Section 2.9) or any fee
payable hereunder;

 

(iv)      extend the
time for payment of any such interest or fees;

 

(v)         reduce or
forgive the principal amount of any Loan;

 

(vi)      amend,
modify, terminate or waive any provision of this Section 10.5(b), Section 10.5(c) or
Section 2.16 hereof, or Section 7.2 of the Pledge and Security
Agreement;

 

103

 

(vii)                 amend
the definition of “Requisite Lenders”  or  “Pro Rata
Share”;

 

(viii)              release
all or substantially all of the Collateral or all or substantially all of the
Guarantors from the Guaranty except as expressly provided in the Credit
Documents;

 

(ix)                      consent to the assignment or transfer by any Credit Party of
any of its rights and obligations under any Credit Document; or

 

(x)           modify
the term “Interest Period” so as to permit intervals in excess of six (6) months.

 

(c)           Other
Consents.  No amendment,
modification, termination or waiver of any provision of the Credit Documents,
or consent to any departure by any Credit Party therefrom, shall:

 

(i)                           increase any Term Loan Commitment of any Lender over the
amount thereof then in effect without the consent of such Lender; provided,
no amendment, modification or waiver of any condition precedent, covenant,
Default or Event of Default shall constitute an increase in any Term Loan
Commitment of any Lender; or

 

(ii)                        amend, modify, terminate or waive any provision of Section 9
as the same applies to any Agent, or any other provision hereof as the same
applies to the rights or obligations of any Agent, in each case without the
consent of such Agent.

 

(d)           Execution
of Amendments, etc.  Administrative
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of such
Lender.  Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which it
was given.  No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.5 shall be
binding upon each Lender at the time outstanding, each future Lender and, if
signed by a Credit Party, on such Credit Party.

 

10.6        Successors and Assigns;
Participations.

 

(a)           Generally.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the 

 

104

 

successors and assigns of Lenders.  No Credit Party’s rights or obligations
hereunder nor any interest therein may be assigned or delegated by any Credit
Party without the prior written consent of all Lenders.  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 and, to the
extent expressly contemplated hereby, Affiliates of each of the Agents and
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b)           Register.  Borrower, Administrative Agent and Lenders
shall deem and treat the Persons listed as Lenders in the Register as the
holders and owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and, except as provided in Section 10.6(e), no
assignment or transfer of any such Commitment or Loan shall be effective, in
each case, unless and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been delivered to and accepted by Administrative
Agent and recorded in the Register as provided in Section 10.6(f).  In the case of a Related Lender Assignment
described in Section 10.6(e) that is not reflected in the Register,
the assigning Lender shall maintain a comparable register. Prior to such
recordation, all amounts owed with respect to the applicable Commitment or Loan
shall be owed to the Lender listed in the Register as the owner thereof, and
any request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans.

 

(c)           Right
to Assign.  Each Lender shall have
the right at any time to sell, assign or transfer all or a portion of its
rights and obligations under this Agreement, including, without limitation, all
or a portion of its Commitment or Loans owing to it or other Obligation (provided,
however, that each such assignment shall be of a uniform, and not
varying, percentage of all rights and obligations under and in respect of any
Loan and any related Commitments):

 

(i)                           to any Person meeting the criteria of clause (i) of the
definition of the term of “Eligible Assignee” (a “Related Lender Assignment”) upon the giving of notice to Borrower and Administrative
Agent and, for any assignment of a Term Loan Commitment, the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed);

 

(ii)                        to any Person meeting the criteria of clause (ii) of the
definition of the term of “Eligible Assignee” (other than a Person described in
the foregoing subclause (i)) and (except in the case of assignments made by or
to Credit Suisse) consented to by Borrower and Administrative Agent (such
consent (x) not to be unreasonably withheld or delayed or, (y) in the
case of Borrower, shall be deemed to have been provided to any such assignment
unless the Borrower shall have objected thereto by written notice to the
Administrative Agent within fifteen (15) days after having received notice of
such assignment, or  (z) in the case
of 

 

105

 

Borrower, not to be required at any time during syndication
of the Loans to persons identified by the Administrative Agent to the Borrower
on or prior to the Closing Date or at any time an Event of Default under
Sections 8.1(a), 8.1(f) or 8.1(g) shall have occurred and then be
continuing; provided, further each such assignment pursuant to this Section 10.6(c)(ii) shall
be in an aggregate amount of not less than $1,000,000 (or such lesser amount as
may be agreed to by Borrower and Administrative Agent or as shall constitute
the aggregate amount of the Term Loan Commitments and Term Loans of the
assigning Lender) with respect to the assignment of the Term Loan Commitments
and Term Loans; and

 

(iii)            to
the Borrower pursuant to a Permitted Loan Purchase upon the giving of notice to
Administrative Agent.  Any Loans acquired
by Borrower shall be deemed cancelled and retired immediately upon closing of
such Permitted Loan Purchase.  It is
confirmed and acknowledged that, upon such cancellation or retirement of Loans
pursuant to a Permitted Loan Purchase, the Loans so cancelled or retired shall
be deemed not to be outstanding and to have no principal amount for any purposes
under this Agreement.

 

(d)           Mechanics.  The assigning Lender and the assignee thereof
shall execute and deliver to Administrative Agent (i) an Assignment
Agreement (A) via an electronic settlement system acceptable to
Administrative Agent (which initially shall be ClearPar, LLC), or (B) manually
together with a processing and recordation fee of $3,500, and (ii) such
forms, certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such Assignment
Agreement may be required to deliver to Administrative Agent pursuant to Section 2.19(c);
provided, however, that should a Lender or assignee party to a
Related Lender Assignment deliver an Assignment Agreement to the Administrative
Agent for recording, such Lender or assignee shall provide the relevant
administration details and applicable tax forms with such Assignment Agreement.
The Assignment Agreement executed in connection with any Permitted Loan
Purchase shall include the following representations:

 

Each party
to this Assignment represents and warrants to each Agent and each Lender that
it has made its own independent investigation of the facts and circumstances
surrounding this Assignment and the transactions contemplated hereby, and has
not relied in any way on any statement, advice or recommendation of any Agent
or Lender in connection herewith or therewith. 
No Agent shall have any duty or responsibility to disclose information
to the parties to this Assignment in connection herewith and no Agent shall
have any responsibility with respect to the accuracy of or the completeness of
any information provided to parties to this Assignment relating to any of the
foregoing.

 

106

 

(e)           Related
Lender Assignments.  Notwithstanding
anything contained in this Section 10.6 to the contrary, a Lender may
effect a Related Lender Assignment with respect to Term Loans held by it
without delivering an Assignment Agreement to Administrative Agent or to
Company and without payment of the assignment fee referred to in Section 10.6(d);
provided, that, if and when an Assignment Agreement is delivered to
Administrative Agent, it is delivered via ClearPar, LLC, or such other
electronic settlement system acceptable to the Administrative Agent; provided,
however, that (i) Company, Administrative Agent and the other
Lenders shall continue to deal solely and directly with such assigning Lender
in connection with such Lender’s rights and obligations under this Agreement
until such Assignment Agreement has been delivered to Administrative Agent and
recorded in the Register and (ii) anything contained herein to the
contrary notwithstanding, if such Related Lender Assignment is to a Person that
is not a United States Person (as such term is defined in Section 7701(a)(30)
of the Internal Revenue Code), such assignee party to such Related Lender
Assignment shall comply with Section 2.19(c) hereof as if such
assignee party had delivered an Assignment Agreement to Administrative Agent on
the effective date of such Related Lender Assignment.  The failure of such assigning Lender to
deliver an Assignment Agreement to Administrative Agent shall not affect the
legality, validity or binding effect of such assignment.

 

(f)            Notice
of Assignment.  Upon its receipt of a
duly executed and completed Assignment Agreement, together with the processing
and recordation fee referred to in Section 10.6(d) (and any forms,
certificates or other evidence required by this Agreement in connection
therewith), Administrative Agent shall record the information contained in such
Assignment Agreement in the Register and shall maintain a copy of such
Assignment Agreement.

 

(g)           Representations
and Warranties of Assignee.  Each
Lender, upon execution and delivery hereof or upon executing and delivering an
Assignment Agreement, as the case may be, represents and warrants as of the
Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement or Term Loan Joinder Agreement) that (i) it
is an Eligible Assignee; (ii) it has experience and expertise in the
making of or investing in commitments or loans such as the applicable
Commitments or Loans, as the case may be; and (iii) it will make or invest
in, as the case may be, its Commitments or Loans for its own account in the
ordinary course of its business and without a view to distribution of such
Commitments or Loans within the meaning of the Securities Act or the Exchange
Act or other federal securities laws (it being understood that, subject to the
provisions of this Section 10.6, the disposition of such Commitments or
Loans or any interests therein shall at all times remain within its exclusive
control).

 

(h)           Effect
of Assignment.  Subject to the terms
and conditions of this Section 10.6, as of the “Effective Date” specified
in the applicable Assignment Agreement: (i) the assignee thereunder shall
have the rights and obligations of a “Lender” hereunder to the extent such
rights and obligations hereunder have been assigned to it pursuant to such
Assignment Agreement and shall thereafter be a party hereto and a “Lender” for
all purposes hereof; (ii) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned thereby pursuant
to such Assignment Agreement, relinquish its rights (other than any 

 

107

 

rights which survive the termination hereof under Section 10.8)
and be released from its obligations hereunder (and, in the case of an
Assignment Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations hereunder, such Lender shall cease to be a
party hereto; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, such assigning Lender shall continue
to be entitled to the benefit of all indemnities hereunder as specified herein
with respect to matters arising out of the prior involvement of such assigning
Lender as a Lender hereunder); (iii) the Commitments shall be modified to
reflect the Commitment of such assignee and any Term Loan Commitment of such
assigning Lender, if any; and (iv) if any such assignment occurs after the
issuance of any Note hereunder, the assigning Lender shall, upon the effectiveness
of such assignment or as promptly thereafter as practicable, surrender its
applicable Notes to Administrative Agent for cancellation or deliver a lost
note affidavit, and thereupon Borrower shall issue and deliver new Notes, if so
requested by the assignee and/or assigning Lender, to such assignee and/or to
such assigning Lender, with appropriate insertions, to reflect the new Term
Loan Commitments and/or outstanding Loans of the assignee and/or the assigning
Lender.

 

(i)            Participations.  Each Lender shall have the right at any time
to sell one or more participations to any Person (other than to a natural
person, Holdings, any of its Subsidiaries or any of its Affiliates) in all or
any part of its Commitments, Loans or in any other Obligation.  The holder of any such participation shall
not be entitled to require such Lender to take or omit to take any action
hereunder except with respect to any amendment, modification or waiver that
would (i) extend the final scheduled maturity of any Loan or Note in which
such participant is participating, or reduce the rate or extend the time of
payment of interest or fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant’s
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default or of a mandatory reduction in the
Commitment shall not constitute a change in the terms of such participation,
and that an increase in any Commitment or Loan shall be permitted without the
consent of any participant if the participant’s participation is not increased
as a result thereof), (ii) consent to the assignment or transfer by any Credit
Party of any of its rights and obligations under this Agreement or (iii) release
all or substantially all of the Collateral under the Collateral Documents
(except as expressly provided in the Credit Documents) supporting the Loans
hereunder in which such participant is participating.  Borrower agrees that each participant shall
be entitled to the benefits of Sections 2.17(c), 2.18 and 2.19 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (c) of this Section; provided, (i) a
participant shall not be entitled to receive any greater payment under Section 2.18
or 2.19 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 Borrower’s prior written consent
and (ii) a participant that would be a Non-US Lender if it were a Lender
shall not be entitled to the benefits of Section 2.19 unless Borrower is
notified of the participation sold to such participant and such participant
agrees, for the benefit of Borrower, to comply with Section 2.19 as though
it were a Lender.  To the extent
permitted by law, each participant also shall be entitled to the benefits of Section 10.4
as though it were a Lender, provided such Participant agrees to be subject to Section 2.16
as though it were a Lender.

 

108

 

(j)            Certain
Other Assignments.  In addition to
any other assignment permitted pursuant to this Section 10.6, (i) any
Lender may assign and/or pledge all or any portion of its Loans, the other
Obligations owed by or to such Lender, and its Notes, if any, to secure
obligations of such Lender including, without limitation, any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided, no Lender, as between Company and
such Lender, shall be relieved of any of its obligations hereunder as a result
of any such assignment and pledge, and provided  further, in no
event shall the applicable Federal Reserve Bank, pledgee or trustee be
considered to be a “Lender” or be entitled to require the assigning Lender to
take or omit to take any action hereunder.

 

10.7        Independence
of Covenants.  All
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
an Event of Default if such action is taken or condition exists.

 

10.8        Survival
of Representations, Warranties and Agreements.  All representations, warranties and
agreements made herein shall survive the execution and delivery hereof and the
making of any Credit Extension. 
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
Sections 2.17, 9.3(b) and 9.6 shall survive the payment of the Loans
and the termination hereof.

 

10.9        No
Waiver; Remedies Cumulative.  No failure or delay on the part of Arranger,
any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege.  The rights, powers
and remedies given to Arranger, each Agent and each Lender hereby are
cumulative and shall be in addition to and independent of all rights, powers
and remedies existing by virtue of any statute or rule of law or in any of
the other Credit Documents.  Any
forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or
be construed to be a waiver thereof, nor shall it preclude the further exercise
of any such right, power or remedy.

 

10.10      Marshalling; Payments Set Aside.  Neither any Agent nor any Lender shall be
under any obligation to marshal any assets in favor of any Credit Party or any
other Person or against or in payment of any or all of the Obligations.  To the extent that any Credit Party makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent, on behalf of Lenders), or Administrative Agent or Lenders enforce any
security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any 

 

109

 

bankruptcy law, any other state or federal law, common law or any
equitable cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.

 

10.11      Severability.  In case any provision in or obligation
hereunder or any Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

10.12      Obligations Several; Independent
Nature of Lenders’ Rights.  The obligations of Lenders hereunder are
several and no Lender shall be responsible for the obligations or Commitment of
any other Lender hereunder.  Nothing
contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and independent
debt, and each Lender shall be entitled to protect and enforce its rights
arising out hereof and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.

 

10.13      Headings.  Section headings herein
are included herein for convenience of reference only and shall not constitute
a part hereof for any other purpose or be given any substantive effect.

 

10.14      APPLICABLE LAW.  THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

 

10.15      CONSENT TO JURISDICTION.  ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR
RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK.  BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS
IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE 

 

110

 

CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE
WITH SECTION 10.1; (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY
IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT; AND (e) AGREES AGENTS AND LENDERS
RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.

 

10.16      WAIVER OF JURY TRIAL.  EACH OF
THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF
THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS
BEING ESTABLISHED.  THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS.  EACH
PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, WHICH EACH HAS ALREADY RELIED ON THIS WAIVER IN
ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS
WAIVER IN ITS RELATED FUTURE DEALINGS. 
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER.  IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

10.17      Confidentiality.  Each Lender shall hold all non-public
information regarding Holdings and its Subsidiaries and their businesses
identified as such by Borrower and obtained by such Lender pursuant to the
requirements hereof in accordance with such Lender’s customary procedures for
handling confidential information of such nature, it being understood and
agreed by Holdings that, in any event, a Lender may make disclosures: (i) to
Affiliates of such Lender and to their agents and advisors (and to other
persons authorized by a Lender or Agent to 

 

111

 

organize, present or disseminate such information in connection with
disclosures otherwise made in accordance with this Section 10.17); (ii) reasonably
required by any bona fide or potential pledgee, assignee, transferee or
participant in connection with the contemplated pledge, assignment, transfer or
participation by such Lender of any Loans or any participations therein or by
any direct or indirect contractual counterparties (or the professional advisors
thereto) in Hedge Agreements (provided, such counterparties and advisors are
advised of and agree to be bound by the provisions of this Section 10.17);
(iii) to any rating agency when required by it, provided that, prior to
any disclosure, such rating agency shall undertake in writing to preserve the
confidentiality of any confidential information relating to the Credit Parties
received by it from any of the Agents or any Lender; and (iv) required or
requested by any governmental agency or representative thereof or by The
National Association of Insurance Commissioners (and any successor thereto) or
pursuant to legal or judicial process; provided, unless specifically
prohibited by applicable law or court order, each Lender shall make reasonable
efforts to notify Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition or other routine examination of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; provided, further,
that in no event shall any Lender be obligated or required to return any
materials furnished by Holdings, Company or any of its Subsidiaries.  Notwithstanding anything to the contrary set
forth herein, each party (and each of their respective employees,
representatives or other agents) may disclose to any and all persons, without
limitations of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind
(including opinions and other tax analyses) that are provided to any such party
relating to such tax treatment and tax structure.  However, any information relating to the tax
treatment or tax structure shall remain subject to the confidentiality
provisions hereof (and the foregoing sentence shall not apply) to the extent
reasonably necessary to enable the parties hereto, their respective Affiliates,
and their and their respective Affiliates’ directors and employees to comply
with applicable securities laws.  For
this purpose, “tax structure” means any facts relevant to the federal income
tax treatment of the transactions contemplated by this Agreement but does not
include information relating to the identity of any of the parties hereto or
any of their respective Affiliates.

 

10.18      Usury Savings Clause.  Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate.  If the rate of interest (determined without
regard to the preceding sentence) under this Agreement at any time exceeds the
Highest Lawful Rate, the outstanding amount of the Loans made hereunder shall
bear interest at the Highest Lawful Rate until the total amount of interest due
hereunder equals the amount of interest which would have been due hereunder if
the stated rates of interest set forth in this Agreement had at all times been
in effect.  In addition, if when the
Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, Borrower shall pay to Administrative Agent an
amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. 
Notwithstanding the foregoing, it is the intention of Lenders and
Company 

 

112

 

to conform strictly to any applicable usury laws.  Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such Lender’s option be applied to the
outstanding amount of the Loans made hereunder or be refunded to Borrower.

 

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

 

10.20      Effectiveness.  This Agreement shall become
effective upon the execution of a counterpart hereof by each Credit Party, the
Administrative Agent, the Collateral Agent and the Lenders.

 

113

 

APPENDIX A-1

TO CREDIT AND GUARANTY AGREEMENT

 

[Reserved]

 

1

 

APPENDIX
B

TO
CREDIT AND GUARANTY AGREEMENT

 

Notice Addresses

 

DOUGLAS DYNAMICS,
INC.

DOUGLAS DYNAMICS
FINANCE COMPANY

DOUGLAS DYNAMICS,
L.L.C.

FISHER, LLC

 

7777
North 73rd Street

Milwaukee,
WI 53223

Attention:  Chief Executive Officer and President

Fax: 414-354-8448

 

with a copy to:

 

Aurora Capital
Group

10877 Wilshire
Boulevard

Suite 2100

Los Angeles, CA
90024

Attention:  Secretary

Fax: 310-824-2791

 

 

CREDIT SUISSE AG,

acting through its
Cayman Islands Branch,

as Administrative
Agent, Collateral Agent,

Syndication Agent,
Documentation Agent and a Lender

 

Principal Office of
Administrative Agent, Collateral Agent,

Syndication Agent and
Documentation Agent:

 

Eleven Madison Avenue,
OMA-2

New York, NY 10010

Attention:  Loan Services Manager

Tel: 212-538-3380

Fax: 212-325-8304

 

2

 

Exhibit B

 

Amendment to ABL Credit Agreement

 

See Exhibit 10.3 to Amendment No. 7 to the Registration Statement on
Form S-1 of Douglas Dynamics, Inc. (File No. 333-164590).

 

 

Exhibit C

 

Intercreditor Amendment

 

See attached.

 

 

 

Exhibit C

 

Intercreditor  Amendment

 

AMENDMENT
NO. 1 TO INTERCREDITOR AGREEMENT

 

This AMENDMENT NO. 1 TO INTERCREDITOR
AGREEMENT (this “Amendment”), dated as of April [    ],
2010, is made and entered into among Douglas Dynamics, L.L.C., a Delaware
limited liability company (the “Borrower”), Douglas Dynamics Finance Company,
a Delaware corporation (“DD Finance”), Fisher, LLC, as Delaware limited
liability company (“Fisher”), Douglas Dynamics, Inc., a Delaware
corporation (“Holdings”), Credit Suisse AG, Cayman Islands Branch (“Credit
Suisse”), in its capacity as administrative agent under the ABL Loan
Documents (as defined in the Intercreditor Agreement referred to below) (in
such capacity, the “ABL Administrative Agent”), JPMorgan Chase Bank, N.A,
in its capacity as collateral agent under the ABL Loan Documents (in such
capacity, the “ABL Collateral Agent”), Credit Suisse, in its capacities
as administrative agent (in such capacity, the “Term Administrative Agent”
and, together with the ABL Administrative Agent, the “Administrative Agents”)
and collateral agent (in such capacity, the “Term Collateral Agent”) under
the Term Loan Documents (as defined in the Intercreditor Agreement referred to
below).

 

RECITALS

 

A.            The Borrower, DD Finance, Fisher, Holdings, the ABL
Administrative Agent, the ABL Collateral Agent, the Term Administrative Agent
and the Term Collateral Agent entered into that certain Intercreditor Agreement
dated as of May 21, 2007 (the “Intercreditor Agreement”;  capitalized terms used but
not defined herein having the meanings set forth therein).

 

B.            Concurrently
herewith, the Term Credit Agreement and the ABL Credit Agreement have been
amended to permit the making of additional term loans under the Term Credit
Agreement in the principal amount of $40,000,000 and reflect certain other
changes.

 

C.            The ABL Required Lenders and the Term Required Lenders
have given their prior written consent to the execution of this Amendment.

 

D.            The Borrower, the Term Administrative Agent, the Term
Collateral Agent, the ABL Administrative Agent and the ABL Collateral Agent
desire to amend the Intercreditor Agreement as set forth below on and subject
to the terms of this Amendment.

 

AGREEMENT

 

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

 

1.             Amendment
to Intercreditor Agreement.

 

(a)   The
definition of “Maximum Term Principal Amount” in Section 1.1 of the
Intercreditor Agreement is hereby amended in its entirety by deleting the existing definition and
replacing it with the following:

 

“Maximum Term Principal Amount” shall mean, at
any time, (i) $125,000,000, less (ii) the aggregate principal amount
of permanent repayments or prepayments of indebtedness under the Term Credit
Agreement, other than any such reduction, repayment or prepayment made in 

 

 

connection with a Refinancing, plus (iii) for the
avoidance of doubt and without duplication, the aggregate principal amount of
any interest that has been capitalized under the Term Credit Agreement..

 

(b)   The
definition of “Maximum ABL Principal Amount” in Section 1.1 of the
Intercreditor Agreement is hereby amended in its entirety by deleting the
existing definition and replacing it with the following:

 

“Maximum ABL Principal Amount” shall mean, at
any time, (i) $60,000,000, less (ii) the aggregate permanent
reductions in the ABL Loan Commitments other than any such reduction, repayment
or prepayment made in connection with a Refinancing, plus (iii) for the
avoidance of doubt and without duplication, the aggregate principal amount of
any interest that has been capitalized under the ABL Credit Agreement.

 

2.             Effectiveness of Amendment..  This Amendment shall be effective as of the first
date (the “Amendment Effective Date”) on which all of the following
conditions precedent have been satisfied:

 

(c)   The
Administrative Agents shall have received counterparts of this Amendment
executed by the Term Administrative Agent, the Term Collateral Agent, the ABL
Administrative Agent, the ABL Collateral Agent, the Borrower, DD Finance,
Fisher and Holdings.

 

(d)   The
Administrative Agents shall have received an executed copy of Amendment No. 2
to Credit and Guaranty Agreement, dated as of the date hereof (the “Term
Amendment”), among the Borrower and each of the lenders party thereto and the
Term Amendment shall be in full force and effect.

 

(e)   The Administrative Agents shall have received an executed
copy of Amendment No. 1 to Credit and Guaranty Agreement, dated as of the
date hereof (the “ABL Amendment”), among the Borrower and each of the
lenders party thereto and the ABL Amendment shall be in full force and effect.

 

3.             Miscellaneous.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).  This Amendment may be executed in one or more
duplicate counterparts and when signed by all of the parties listed below shall
constitute a single binding agreement. 
Except for the amendments set forth in Section 1 hereof, all of the
provisions of the Intercreditor Agreement shall remain in full force and
effect.  The foregoing amendments shall
be strictly construed in accordance with the express terms thereof.  This Amendment shall be deemed a “Credit
Document” as defined in the Credit Agreement.

 

2

 

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

 

 

	
   

  	
  CREDIT PARTIES:

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS FINANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FISHER, LLC,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  ABL
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE AG, CAYMAN ISLANDS BRANCH,

  
	
   

  	
  as
  ABL Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  ABL
  COLLATERAL AGENT:

  
	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE, N.A.,

  
	
   

  	
  as ABL Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  TERM
  ADMINISTRATIVE AGENT AND TERM COLLATERAL AGENT:

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE AG, CAYMAN ISLANDS BRANCH,

  
	
   

  	
  as
  Term Administrative Agent and Term Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:Exhibit 10.2

 

EXHIBIT A-1

 

FUNDING NOTICE

 

Reference is made
to the Credit and Guaranty Agreement, dated as of May 21, 2007 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, or otherwise renewed, refinanced or replaced from time to time (including
subsequent or successive renewals, refinancings or replacements, and pursuant
to one or more agreements or facilities), the “Credit Agreement”; the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Douglas Dynamics Holdings, Inc., a Delaware
corporation (“Holdings”), Douglas Dynamics, L.L.C., a Delaware limited
liability company and a direct wholly-owned Subsidiary of Holdings (the “Company”
or the “Borrower”), Fisher, LLC, a Delaware limited liability company (“Fisher”)
and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,”
and together with Fisher and Holdings, each a “Guarantor” and
collectively the “Guarantors”), the banks and financial institutions
listed on the signature pages thereof (together with their respective
successors and assigns, each individually referred to herein as a “Lender”
and collectively as “Lenders”), Credit Suisse, Cayman Islands Branch (“Credit
Suisse”), as administrative agent for the Lenders (in such capacity, “Administrative
Agent”) and as collateral agent for the Lenders (in such capacity, “Collateral
Agent”).

 

Pursuant to Section 2.1(b) of
the Credit Agreement, Borrower desires that Lenders make the following Credit Extension[s]
to Company in accordance with the applicable terms and conditions of the Credit
Agreement on [mm/dd/yyyy] (the “Credit Date”):

 

Term Loans

 

	
  ·

  	
   

  	
  Base Rate Loans:

  	
  $[     ,     ,     ]

  
	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
  Eurodollar Rate Loans,
  with an Initial Interest Period
  of              Month(s):

  	
  $ [     ,     ,     ]

  

 

Borrower
hereby certifies that:

 

(i) the
Credit Extension[s] requested herein [comply] [complies] with the provisions of
Section 2.1; and 

 

(ii) the
conditions specified in Section 3.1 have been satisfied on and as of the
Credit Date.

 

 

	
  Date: [mm/dd/yyyy]

  	
  DOUGLAS DYNAMICS,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title:

  

 

A-1-1

 

EXHIBIT A-2

 

CONVERSION/CONTINUATION NOTICE

 

Reference is made
to the Credit and Guaranty Agreement, dated as of May 21, 2007 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, or otherwise renewed, refinanced or replaced from time to time (including
subsequent or successive renewals, refinancings or replacements, and pursuant
to one or more agreements or facilities), the “Credit Agreement”; the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Douglas Dynamics Holdings, Inc., a Delaware
corporation (“Holdings”), Douglas Dynamics, L.L.C., a Delaware limited
liability company and a direct wholly-owned Subsidiary of Holdings (the “Company”
or the “Borrower”), Fisher, LLC, a Delaware limited liability company (“Fisher”)
and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,”
and together with Fisher and Holdings, each a “Guarantor” and
collectively the “Guarantors”), the banks and financial institutions
listed on the signature pages thereof (together with their respective
successors and assigns, each individually referred to herein as a “Lender”
and collectively as “Lenders”), Credit Suisse, Cayman Islands Branch (“Credit
Suisse”), as administrative agent for the Lenders (in such capacity, “Administrative
Agent”) and as collateral agent for the Lenders (in such capacity, “Collateral
Agent”).

 

Pursuant to Section 2.8
of the Credit Agreement, Borrower desires to convert or to continue the
following Term Loans, each such conversion and/or continuation to be effective
as of [mm/dd/yyyy]:

 

	
  $[      ,     ,     ]

  	
   

  	
  Eurodollar Rate Loans
  to be continued with Interest Period of        month(s)

  
	
   

  	
   

  	
   

  
	
  $[     ,     ,     ]

  	
   

  	
  Base Rate Loans to be
  converted to Eurodollar Rate Loans with Interest Period of
           month(s)

  
	
   

  	
   

  	
   

  
	
  $[     ,     ,     ]

  	
   

  	
  Eurodollar Rate Loans
  to be converted to Base Rate Loans

  

 

Except in the case
of a conversion to Base Rate Loans, Borrower hereby certifies that as of the
date hereof, no event has occurred and is continuing or would result from the
consummation of the conversion and/or continuation contemplated hereby that
would constitute an Event of Default or a Default.

 

	
  Date: [mm/dd/yyyy]

  	
  DOUGLAS DYNAMICS,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title:

  

 

A-2-1

 

EXHIBIT B

 

TERM LOAN NOTE

 

$[Lender’s Term Loan
Commitment]

	
  [           ],
  2007

  	
   

  	
  New York, New
  York

  

 

FOR VALUE
RECEIVED, the undersigned (the “Borrower”), promises to pay [NAME OF
LENDER] (“Payee”) or its registered assigns, on or before the Maturity
Date, the lesser of (a) [AMOUNT] DOLLARS ($[      ,      ,      ])
and (b) the unpaid principal amount of all advances made by Payee to the
Borrower as Term Loans under the Credit and Guaranty Agreement, dated as of May 21,
2007 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, or otherwise renewed, refinanced or replaced from time to
time (including subsequent or successive renewals, refinancings or
replacements, and pursuant to one or more agreements or facilities), the “Credit
Agreement”; the terms defined therein and not otherwise defined herein
being used herein as therein defined), by and among Douglas Dynamics Holdings, Inc.,
a Delaware corporation, Douglas Dynamics, L.L.C., a Delaware limited liability
company, Fisher, LLC, a Delaware limited liability company, Douglas Dynamics
Finance Company, a Delaware corporation, the banks and financial institutions
listed on the signature pages thereof (together with their respective
successors and assigns, each individually referred to herein as a “Lender”
and collectively as “Lenders”), Credit Suisse, Cayman Islands Branch (“Credit
Suisse”), as administrative agent for the Lenders (in such capacity, “Administrative
Agent”) and as collateral agent for the Lenders (in such capacity, “Collateral
Agent”).

 

This Term Loan
Note (this “Note”) is one of the “Term Loan Notes” issued pursuant to
and entitled to the benefits of the Credit Agreement, to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Term Loans evidenced hereby were made and are to be repaid.

 

All payments of
principal and interest in respect of this Note shall be made in lawful money of
the United States of America in same day funds at the Principal Office of
Administrative Agent or at such other place as shall be designated in writing
for such purpose in accordance with the terms of the Credit Agreement. Unless
and until an Assignment Agreement effecting the assignment or transfer of the
obligations evidenced hereby shall have been accepted by Administrative Agent
and recorded in the Register, the Borrower, each Agent and Lenders shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
obligations evidenced hereby. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided that the failure to make a
notation of any payment made on this Note shall not limit or otherwise affect
the obligations of the Borrower hereunder with respect to payments of principal
of or interest on this Note.

 

This Note is
subject to mandatory prepayment and to prepayment at the option of the
Borrower, each as provided in the Credit Agreement.

 

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREOF.

 

Whenever possible,
each provision of this Note shall be interpreted in such manner as to be
effective and valid under applicable law, but in case any provision of or
obligation under this Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. Whenever in
this Note reference is made to Administrative Agent, Payee or the Borrower,
such reference shall be deemed to include, as applicable, a reference to their
respective successors and assigns. The provisions of this Note shall be binding
upon the Borrower and its successors and assigns, and shall inure to the
benefit of Payee and its successors and assigns.

 

B-1

 

Upon the
occurrence of an Event of Default, the unpaid balance of the principal amount
of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

 

The terms of this
Note are subject to amendment only in the manner provided in the Credit
Agreement.

 

No reference
herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of the Borrower, which are
absolute and unconditional, to pay the principal of and interest on this Note
at the place, at the respective times, and in the currency herein prescribed.

 

The Borrower
promises to pay all costs and expenses, including reasonable attorneys’ fees,
all as provided in the Credit Agreement, incurred in the collection and
enforcement of this Note. The Borrower and any endorsers of this Note hereby
consent to renewals and extensions of time at or after the maturity hereof,
without notice, and hereby waive diligence, presentment, protest, demand notice
of every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.

 

[Signature page follows]

 

B-2

 

IN WITNESS
WHEREOF, the Borrower has caused this Note to be duly executed and delivered by
its officer thereunto duly authorized as of the date and at the place first
written above.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

B-3

 

TRANSACTIONS ON 

TERM LOAN NOTE

 

	
  Date

  	
   

  	
  Amount of Loan 

  Made This Date

  	
   

  	
  Amount of Principal

  Paid This Date

  	
   

  	
  Outstanding Principal 

  Balance This Date

  	
   

  	
  Notation 

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-4

 

EXHIBIT C

 

COMPLIANCE
CERTIFICATE

 

THE UNDERSIGNED
HEREBY CERTIFIES AS FOLLOWS:

 

1.  I am the Chief Financial Officer of Douglas Dynamics,
L.L.C. (the “Company” or the “Borrower”).

 

2.  I have reviewed the terms of that certain Credit and
Guaranty Agreement, dated as of May 21, 2007 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, or otherwise
renewed, refinanced or replaced from time to time (including subsequent or
successive renewals, refinancings or replacements, and pursuant to one or more
agreements or facilities), the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among Douglas Dynamics Holdings, Inc., a Delaware corporation (“Holdings”),
the Company, Fisher, LLC, a Delaware limited liability company (“Fisher”)
and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,”
and together with Fisher and Holdings, each a “Guarantor” and
collectively the “Guarantors”) the banks and financial institutions
listed on the signature pages thereof (together with their respective
successors and assigns, each individually referred to herein as a “Lender”
and collectively as “Lenders”), Credit Suisse, Cayman Islands Branch (“Credit
Suisse”), as administrative agent for the Lenders (in such capacity, “Administrative
Agent”) and as collateral agent for the Lenders (in such capacity, “Collateral
Agent”), and I have made, or have caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of Holdings and
its Subsidiaries during the accounting period covered by the attached financial
statements.

 

3.  The examination described in paragraph 2 above did not
disclose, and I have no knowledge of, the existence of any condition or event
which constitutes an Event of Default or Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth in a separate attachment, if any,
to this Certificate, describing in detail, the nature of the condition or
event, the period during which it has existed and the action which the Company
or any of its Subsidiaries has taken, is taking, or proposes to take with
respect to each such condition or event.

 

The
foregoing certifications, together with the computations set forth in the Annex
A hereto and made a part hereof and the financial statements delivered with
this Certificate in support hereof, are made and delivered [mm/dd/yyyy] pursuant
to Section 5.1(d) or 5.1(i) of the Credit Agreement or in connection
with the making of a Permitted Acquisition under the Credit Agreement.

 

 

	
   

  	
  DOUGLAS DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

C-1

 

ANNEX A TO

COMPLIANCE CERTIFICATE

 

FOR THE FISCAL [QUARTER] [YEAR]
ENDING [mm/dd/yyyy]

 

This Annex A is attached to and made part of a
Compliance Certificate dated as of [mm/dd/yyyy] and pertains to the period
[mm/dd/yyyy] to [mm/dd/yyyy]. Subsection references herein relate to
subsections of the Credit Agreement.

 

	
  1. Consolidated
  Adjusted EBITDA:               (i) +
  (ii)(1) - (iii) (2)=

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Consolidated Net
  Income:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  (a)

  	
  Consolidated Interest
  Expense and non-Cash interest expense:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  provisions for taxes
  based on income:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  total depreciation
  expense:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
  total amortization
  expense: (3)

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
  non-cash impairment
  charges:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (f)

  	
  non-cash expenses
  resulting from the grant of stock and stock options and other compensation to
  management personnel of the Company and its Subsidiaries pursuant to a
  written incentive plan or agreement:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (g)

  	
  other non-Cash items
  that are unusual or otherwise non-recurring items:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (h)

  	
  expenses for fees under
  the Management Services Agreement:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  any extraordinary
  losses and non-recurring charges during any period:(4)

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (j)

  	
  restructuring charges
  or reserves:(5)

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (k)

  	
  any transaction costs
  incurred in connection with the issuance of Securities or any refinancing
  transaction, in each case whether or not such transaction is consummated:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  

 

(1)           Without duplication to the extent deducted in the
calculation of Consolidated Net Income for such period.

 

(2)           Without duplication.

 

(3)           Including amortization of goodwill, other intangibles,
and financing fees and expenses.

 

(4)           Including severance, relocations costs,
one-time compensation charges and losses or charges associated with Interest
Rate Agreements.

 

(5)           Including costs related to closure of Facilities.

 

C-2

 

	
   

  	
   

  	
  (1)

  	
  any fees and expenses
  related to any Permitted Acquisitions

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  (a)

  	
  non-Cash items
  increasing Consolidated Net Income for such period that are unusual or
  otherwise non-recurring items:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  cash payments made
  during such period reducing reserves or liabilities for accruals made in
  prior periods but only to the extent such reserves or accruals were added
  back to “Consolidated Adjusted EBITDA” in a prior period pursuant to clauses
  (ii)(f) or (ii)(g) above:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  Restricted Payments
  made during such period to Holdings pursuant to Section 6.5(c)(i):

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Consolidated
  Capital Expenditures:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The aggregate of all
  expenditures of the Company and its Subsidiaries during such period
  determined on a consolidated basis that, in accordance with GAAP, are or
  should be included in “purchase of property and equipment” or similar items
  reflected in the consolidated statement of cash flows of the Company and its
  Subsidiaries. (6)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Maximum: (7)

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3. Consolidated
  Current Assets:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The total assets of the
  Company and its Subsidiaries on a consolidated basis that may properly be
  classified as current assets in conformity with GAAP, excluding Cash and Cash
  Equivalents.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4. Consolidated
  Current Liabilities:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The total liabilities
  of the Company and its Subsidiaries on a consolidated basis that may properly
  be classified as current liabilities in conformity with GAAP, excluding the
  current portion of long term debt.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5. Consolidated
  Fixed Charges: (i) + (ii) + (iii) + (iv) + (v) = (8)

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Consolidated Interest
  Expense:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  scheduled payments of
  principal on Consolidated Total Debt:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  Consolidated Capital
  Expenditures: (9)

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  

 

(6)           Excluding expenditures constituting the
purchase price for Permitted Acquisitions and amounts constituting Net Asset
Sale Proceeds and Net Insurance/Condemnation Proceeds which are reinvested in
the business of Company and its Subsidiaries in accordance with Section 2.13(a) or
Section 2.13(b) of the Credit Agreement, respectively, by the Company
and its Subsidiaries during such period.

 

(7)           Maximum for calendar year.

 

(8)           Without duplication.

 

C-3

 

	
   

  	
  (iv)

  	
  the portion of taxes
  based on income actually paid in cash during such period by the Company or
  any of its Subsidiaries whether for such period or any other period:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  Restricted Payments
  permitted under Section 6.5(c)(iii) of the Credit Agreement and which
  are paid in cash during such period:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6. Consolidated
  Interest Expense: (i) - (ii) =

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)           total interest expense (including that portion
  attributable to Capital Leases in accordance with GAAP and capitalized
  interest) payable in cash of the Company and its Subsidiaries on a
  consolidated basis with respect to all outstanding Indebtedness of the
  Company and its Subsidiaries, including all commissions, discounts and other
  fees and charges owed with respect to letters of credit and net costs under
  Interest Rate Agreements: (10)

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)          the aggregate amount of interest income of the
  Company and its Subsidiaries during such period paid in cash:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7. Consolidated
  Net Income: (i) - (ii) =

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  the net income (or
  loss) of the Company and its Subsidiaries on a consolidated basis for such
  period taken as a single accounting period determined in conformity with
  GAAP:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  (a)

  	
  the income (or loss) of
  any Person (other than a Subsidiary of the Company) in which any other Person
  (other than the Company or any of its Subsidiaries) has a joint interest,
  except to the extent of the amount of dividends or other distributions
  actually paid to the Company or any of its Subsidiaries by such Person during
  such period:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  the income (or loss) of
  any Person accrued prior to the date it becomes a Subsidiary of the Company
  or is merged into or consolidated with the Company or any of its Subsidiaries
  or that Person’s assets are acquired by the Company or any of its
  Subsidiaries:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  the income of any
  Subsidiary of the Company to the extent that the declaration or payment of
  dividends or similar distributions by that Subsidiary of that income is not
  at the time permitted by operation of the terms of its charter or any
  agreement, instrument, judgment, decree, order, statute, rule or
  governmental regulation applicable

  	
   

  	
   

  	
   

  

 

(9)           Other than those financed with secured
Indebtedness permitted by Sections 6.1 and 6.2 of the Credit Agreement or made
or incurred pursuant to Section 6.8(b)(ii) of the Revolving Credit
Facility.

 

(10)         Excluding any amounts referred to in Section 2.10(d) of
the Credit Agreement payable on or before the Closing Date and amounts with
respect to the termination of Interest Rate Agreements entered into within 90
days of the Closing Date.

 

C-4

 

	
   

  	
   

  	
   

  	
  to that Subsidiary:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
  any after-tax gains or
  losses attributable to Asset Sales or returned surplus assets of any Pension
  Plan:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
  to the extent not
  included in items (a) through (d) above, any net extraordinary gains or
  net extraordinary losses:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8. Consolidated
  Total Debt:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The aggregate stated
  balance sheet amount of all Indebtedness of the Company and its Subsidiaries
  determined on a consolidated basis in accordance with GAAP; provided, that
  the amount of revolving Indebtedness to be included at the date of
  determination shall be equal to the average of the balances of such revolving
  Indebtedness as of the end of each of the prior four calendar quarters: (11) 

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9. Fixed
  Charge Coverage Ratio: (12)    (i)/(ii) =

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Consolidated Adjusted
  EBITDA for the four-Fiscal Quarter Period then ended:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Consolidated Fixed
  Charges for such four-Fiscal Quarter Period: 

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Actual: 

  	
   

  	
    .   
  :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Required:(13)

  	
   

  	
  1.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10. Leverage
  Ratio: (14),(15)   (i)/(ii) =

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Consolidated Total Debt
  less unrestricted Cash and Cash Equivalents of the Company and its
  Subsidiaries as of such day in excess of $1,000,000: 

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Consolidated Adjusted
  EBITDA for the four-Fiscal Quarter period then ended:

  	
   

  	
  $

  	
  [      ,      ,      ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Actual: 

  	
   

  	
    .  :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Required:

  	
   

  	
    .  :1.00

  	
   

  

 

(11)         Except that with respect to the first
four calendar quarters after the Closing Date, the amount of revolving Indebtedness
to be included shall be based on the average of the quarter end balances from
the Closing Date through the date of determination.

 

(12)         Calculated as of the last day of any
Fiscal Quarter.

 

(13)         If a Liquidity Event then exists.

 

(14)         Calculated as of the last day of any
Fiscal Quarter.

 

(15)         For purposes of determining the unsecured
debt basket pursuant to Section 6.1(k).

 

C-5

 

EXHIBIT D

 

OPINION OF COUNSEL FOR CREDIT
PARTIES 

 

D-1

 

May 21,
2007

 

	
  (212) 351-4000

  	
  C 22829-00009

  

 

(212) 351-4035

 

Credit Suisse, 

Cayman
Islands Branch, as

Administrative
Agent and Collateral Agent for the

Lenders
party to the Credit 

Agreement
referred to below

 

Each of the Lenders party to 

the Credit Agreement referred to below

 

Re:                               Douglas Dynamics,
L.L.C. — Credit and Guaranty Agreement dated as of May 21, 2007

 

Ladies
and Gentlemen:

 

We
have acted as counsel to Douglas Dynamics Holdings, Inc., a Delaware
corporation (“Holdings”), Douglas Dynamics, L.L.C., a Delaware limited
liability company (the “Company”, or the “Borrower”), Fisher,
LLC, a Delaware limited liability company (“Fisher”) and Douglas
Dynamics Finance Company, a Delaware corporation (“DD Finance,” and
together with Fisher and Holdings, the “Guarantors”; the Guarantors together
with Holdings and the Borrower, are referred to herein as the “Obligors”),
in connection with the Credit and Guaranty Agreement dated as of May 21,
2007 (the “Credit Agreement”) among the Obligors, certain lenders party
thereto (the “Lenders”), Credit Suisse Securities (USA) L.L.C., as Sole
Bookrunner and Sole Lead Arranger, and Credit Suisse, Cayman Islands Branch, as
Collateral Agent (the “Collateral Agent”), and as Administrative Agent
(the “Administrative Agent” and, together with the Collateral Agent and
the Lenders, the “Lender Parties”). 
Terms defined in the Credit Agreement and not otherwise defined herein
are used herein as therein defined.

 

In
rendering this opinion, we have examined originals or copies, certified or
otherwise identified to our satisfaction as being true copies, of the following
documents and instruments:

 

 

(i)            the Credit Agreement, including all
Exhibits and Schedules thereto;

 

(ii)           the Notes dated as of May 21,
2007 (the “Notes”) made by the Borrowers payable to the order of the
Lenders;

 

(iii)          the Term Pledge and Security Agreement
dated as of May 21, 2007 (the “Security Agreement”) among the
Obligors and the Collateral Agent;

 

(iv)          the Mortgage, Assignment of Leases,
Rents and Profits and Security Agreement dated as of May 21, 2007 (the “Wisconsin
Mortgage”) made by the Company for the benefit of the Collateral Agent;

 

(v)           the Mortgage, Assignment of Leases,
Rents and Profits and Security Agreement dated as of May 21, 2007 (the “Maine
Mortgage”) made by the Company for the benefit of the Collateral Agent;

 

(vi)          the Mortgage, Assignment of Leases,
Rents and Profits and Security Agreement dated as of May 21, 2007 (the “Tennessee
Mortgage” and, together with the Wisconsin Mortgage and the Maine Mortgage,
the “Real Property Collateral Documents”) made by the Company for the
benefit of the Collateral Agent;

 

(vii)         the Deposit Account Control Agreement
dated as of May 21, 2007 (the “Camden National Account Control
Agreement”) among Fisher, the Collateral Agent, Camden National Bank (“Camden”),
and the other parties thereto;

 

(viii)        the Deposit Account Control Agreement
dated as of May 21, 2007 (the “Chase Account Control Agreement”;
and together with the Camden National Account Control Agreement, the “Deposit
Account Control Agreements”) among the Company, Holdings, DD Finance, the
Collateral Agent, JP Morgan Chase Bank, N.A. (together with Camden, the “Deposit
Account Banks”), and the other parties thereto;

 

(ix)           the financing statements on Form UCC-1
naming each Obligor as debtor to be filed with the Delaware Secretary of State
(each a “Financing Statement”); and

 

(x)            the Intercreditor Agreement dated as
of May 21, 2007 (the “Intercreditor Agreement”) among the
Collateral Agent, the Administrative Agent, the Obligors and the other parties
thereto.

 

The
Credit Agreement, the Notes, the Security Agreement and the Deposit Account
Control Agreements are referred to herein collectively as the “Financing
Documents.”  The Financing Documents,
the Real Property Collateral Documents and the Intercreditor Agreement 

 

2

 

are referred to herein
collectively as the “Transaction Documents.”  Each
relevant Obligor’s right, title and interest in the personal property
collateral described in the Security Agreement is referred to herein
collectively as the “UCC Collateral.” 
The Uniform Commercial Code as enacted and in effect in the State
of New York is referred to herein as the “NYUCC.”  The Uniform Commercial Code as enacted and in
effect in the State of Delaware is referred to herein as the “Delaware UCC.”  The NYUCC and the Delaware UCC are each
referred to herein as a “UCC.” 
All references or sections or other subparts of the NYUCC include
references to the equivalent provisions of the Delaware UCC, unless the context
otherwise requires.  All terms defined in
the NYUCC are used herein as defined therein.

 

We
have assumed without independent investigation that:

 

a)              The signatures on all documents examined
by us are genuine, all individuals executing such documents had all requisite
legal capacity and competency and (except in the case of the Obligors) were
duly authorized, the documents submitted to us as originals are authentic and
the documents submitted to us as certified or reproduction copies conform to
the originals;

 

b)             Except as specifically addressed in our
opinions in paragraphs 4(i)(B) and 5, the execution and delivery of the
Transaction Documents by any Obligor and performance of its obligations
thereunder do not violate any law, regulation, order, judgment or decree
applicable to such Obligor;

 

c)              There are no agreements or understandings
between or among any of the parties to the Transaction Documents or third
parties that would expand, modify or otherwise affect the terms of the
Transaction Documents or the respective rights or obligations of the parties
thereunder or that would modify, release, terminate, subordinate or delay the
attachment of the security interest and liens granted thereunder;

 

d)             To the extent
that the ability of the Collateral Agent to enforce remedies under the
Transaction Documents in respect of UCC Collateral comprised of inventory may
be affected thereby, each
Obligor is in compliance with the Fair Labor Standards Act (see Citicorp
Industrial Credit, Inc. v. Brock, 483 U.S. 27, 107 S.Ct. 2694 (1987));
and

 

e)              Each Obligor
has, and will have at all times relevant to this opinion, rights in the UCC
Collateral within the meaning of Section 9-203(b)(2) of the NYUCC.

 

In
rendering this opinion, we have made such inquiries and examined, among other
things, originals or copies, certified or otherwise identified to our
satisfaction, of such records, 

 

3

 

agreements, certificates,
instruments and other documents as we have considered necessary or appropriate
for purposes of this opinion.  As to
certain factual matters, we have relied to the extent we deemed appropriate and
without independent investigation upon the representations and warranties of
the Obligors in the Transaction Documents, certificates of officers of the
Obligors, copies of which are attached hereto or separately delivered to the
Administrative Agent (collectively, the “Officers’ Certificate”), or
certificates obtained from public officials and others.

 

Based
on the foregoing and in reliance thereon, and subject to the assumptions,
exceptions, qualifications and limitations set forth herein, we are of the
opinion that:

 

1.     Each
Obligor is a validly existing corporation or limited liability company in good
standing under the laws the State of Delaware and has all requisite corporate
or limited liability company power to execute, deliver and perform its
obligations under the Transaction Documents to which it is a party.

 

2.     The execution
and delivery by each Obligor of the Transaction Documents to which it is a
party and the performance of its obligations under the Transaction Documents
have been duly authorized by all necessary corporate or limited liability
company action.  Each Transaction
Document has been duly executed and delivered by each Obligor party thereto.

 

3.     Each
Financing Document constitutes a legal, valid and binding obligation of each
Obligor party thereto, enforceable against it in accordance with its terms.

 

4.     The
execution and delivery of the Transaction Documents by each Obligor party
thereto, and the performance by each Obligor of the Transaction Documents to
which it is a party, do not and will not

 

(i)            violate (A) the charter or
bylaws or similar governing documents of any such Obligor, or (B) based
solely upon review of the orders, judgments or decrees identified to us in the
Officers’ Certificate as constituting all orders, judgments or decrees binding
on such Obligor, which are listed in part I of Schedule A hereto (each, a “Governmental
Order”), any Governmental Order, or

 

(ii)           based solely upon review of the
documents identified to us in the Officers’ Certificate as constituting all
material contracts of the Obligors, which are listed in part II of
Schedule A hereto (each a “Material Contract”), (A) result in a
material breach of or default under any Material Contract or (B) result in
or require the creation or imposition of any lien or encumbrance upon any
assets of such Obligor under any Material Contract, other than Permitted Liens.

 

4

 

5.     The
execution and delivery of the Transaction Documents by each Obligor party
thereto and the performance by each Obligor of the Transaction Documents to
which it is a party do not and will not violate, or require any filing with or
approval of any governmental authority or regulatory body of the State of New
York or the United States of America under, any law or regulation of the State
of New York or the United States of America applicable to such Obligor that, in
our experience, is generally applicable to transactions in the nature of those
contemplated by the Transaction Documents, or the Delaware General Corporation
Law or the Delaware Limited Liability Company Act, except for filings required
for the perfection of Liens.

 

6.     No Obligor
is required to register as an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

 

7.     Each
Obligor has granted a valid security interest in favor of the Collateral Agent,
for the benefit of the secured parties in the UCC Collateral described in the
Security Agreement, securing the payment and performance of the obligations
purported to be secured thereby, to the extent a security interest can be created
therein under Article 9 of the NYUCC. 
Upon the filing of the Financing Statements with the Delaware Secretary
of State, such security interest in the UCC Collateral of each Obligor will be
perfected to the extent security interests therein can be perfected by the
filing of UCC-1 financing statements under Article 9 of the Delaware UCC.

 

8.     Each
Deposit Account Control Agreement is effective to perfect the security
interests in the deposit accounts described therein (the “Deposit Accounts”)
by control (as defined in Section 9-104(a)(2) of the NYUCC).

 

9.     The
execution and delivery by the Obligors of the Financing Documents and the
performance of their obligations thereunder do not result in a breach or
violation of Regulation U or X of the Board of Governors of the Federal Reserve
System.   Regulation T of the Board of
Governors of the Federal Reserve System (“Regulation T”) does not apply to any
Lender that is not a “creditor” (as defined in Regulation T).  Regulation T defines “creditor” as any broker
or dealer (as defined in sections 3(a)(4) and 3(a)(5) of the
Securities Exchange Act of 1934 (the “1934 Act”)), any member of a national
securities exchange, or any person associated with a broker or dealer (as
defined in section 3(a)(18) of the 1934 Act), except for business entities
controlling or under common control with the creditor.

 

10.   Upon
delivery to the Collateral Agent in the State of New York of the certificates representing
the stock or membership interests of DD Finance and the Borrower, in each case
as described on Schedule B hereto (the “Pledged Interests”), in
accordance with the provisions of the Security Agreement, the security interest
of the Collateral Agent in the Pledged 

 

5

 

Interests will be perfected and will be prior in right to all other
security interests therein created under Article 9 of the NYUCC.

 

The foregoing opinions
are subject to the following exceptions, qualifications and limitations:

 

A.  We render no
opinion herein as to matters involving the laws of any jurisdiction other than (i) the
State of New York, (ii) the United States of America, (iii) for
purposes of paragraphs 1, 2, 4(i)(A) and 5 above, the Delaware General
Corporation Law and the Delaware Limited Liability Company Act and (iv) for
purposes of the last sentence of Paragraph 7, the Delaware UCC.  We are not engaged in practice in the State
of Delaware; however, we are generally familiar with the Delaware General
Corporation Law, the Delaware Limited Liability Company Act and the Delaware
UCC as currently in effect and have made such inquiries as we consider
necessary to render the opinions contained in Paragraphs 1, 2, 4(i)(A), 5 and
7.  We have further assumed without
independent investigation that the operating agreement of each Obligor that is
a Delaware limited liability company constitutes a legal, valid and binding
obligation of each party thereto, enforceable against it in accordance with its
terms and, to the extent our opinion in paragraph 2 is dependent on the
interpretation of such agreement, it is based on the plain meaning of the
provisions thereof in light of the Delaware Limited Liability Company Act.  Without limitation, we do not express any
opinion regarding any Delaware contract law. 
This opinion is limited to the effect of the present state of the laws
of the State of New York, the United States of America and, to the limited
extent set forth above, the laws of the State of Delaware and the facts as they
presently exist.  We assume no obligation
to revise or supplement this opinion in the event of future changes in such
laws or the interpretations thereof or such facts.  Except as expressly set forth in Paragraph 6
above, we express no opinion regarding the Securities Act  of 1933, as amended, or any other federal
or state securities laws or regulations.

 

B.  Our opinions
set forth in paragraphs 3, 7, 8 and 10 are subject to (i) the effect of
any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar
laws affecting the rights and remedies of creditors generally (including,
without limitation, the effect of statutory or other laws regarding fraudulent
transfers or preferential transfers) and (ii) general principles of
equity, including without limitation concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific
performance, injunctive relief or other equitable remedies regardless of
whether enforceability is considered in a proceeding in equity or at law.

 

C.  We express
no opinion regarding the effectiveness of (i) any waiver (whether or not
stated as such) under the Transaction Documents of, or any consent thereunder
relating to, unknown future rights or the rights of any party thereto existing,
or duties owing to it, as a matter 

 

6

 

of law; (ii) any
waiver (whether or not stated as such) contained in the Transaction Documents
of rights of any party, or duties owing to it, that is broadly or vaguely
stated or does not describe the right or duty purportedly waived with
reasonable specificity; (iii) provisions relating to indemnification,
exculpation or contribution, to the extent such provisions may be held
unenforceable as contrary to public policy or federal or state securities laws or
due to the negligence or willful misconduct of the indemnified party; (iv) any
provision in any Financing Document waiving the right to object to venue in any
court; (v) any agreement to submit to the jurisdiction of any Federal
Court; (vi) any waiver of the right to jury trial; (vii) the effect
on the enforceability of the Credit Agreement or other Transaction Documents
against, or on the ability of a secured party to realize upon collateral
security pledged or granted by, any Obligor or any other “surety” (which could
include a co-borrower jointly liable for loans extended to another co-borrower,
a hypothecator of property to secure obligations owed by another person or a
common creditor that has subordinated obligations owing to it), of any facts or
circumstances occurring after the date hereof that would constitute a defense
to the obligation of a surety, unless such defense has been waived effectively
by such Obligor or other surety; (viii) any provision purporting to
establish evidentiary standards, (ix) any provision to the effect that
every right or remedy is cumulative and may be exercised in addition to any
other right or remedy or that the election of some particular remedy does not
preclude recourse to one or more others; (x) any right of setoff to the
extent asserted by a Person other than a Lender under the Financing Documents
or (xi) the availability of damages or other remedies not specified in the
Transaction Documents in respect of breach of any covenants (other than
covenants relating to the payment of principal, interest, indemnities and
expenses).

 

D.  We express
no opinion as to (i) any waivers or variations of rights of a debtor,
including a guarantor, or duties of a secured party under provisions referred
to in Section 9-602 of the NYUCC or (ii) any provision in the
Security Agreement (A) that may be deemed to permit the Collateral Agent
or any other person to sell or otherwise foreclose upon any UCC Collateral, or
to apply the proceeds thereof, except in compliance with the NYUCC, applicable
laws of the United States and other applicable state and local laws, or (B) that
may be deemed to impose on the Collateral Agent standards for the care of the
UCC Collateral in the possession or control of the Collateral Agent that would
violate Section 9-207 or 9-208 of the NYUCC or to render such standards
inapplicable.

 

E.  Our opinion
is subject to the effect of Section 552 of the United States Bankruptcy
Code (limiting security interests in property acquired after the commencement
of a case under the United States Bankruptcy Code).  We call to your attention that under the
provisions of the NYUCC certain third parties, such as buyers and lessees of
goods in the ordinary course of business, licensees of general intangibles
(including software) in the ordinary course of business, holders in due course
of negotiable instruments, protected purchasers of securities or certain
purchasers of security entitlements or financial assets, could acquire an 

 

7

 

interest in the
UCC Collateral free of the security interests of the Lender Parties, even
though such security interests are perfected.

 

F.  We express
no opinion with respect to (i) the existence, non-existence or value of
any UCC Collateral; (ii) any part of the UCC Collateral that is or may be
such that a security interest therein is not covered by Article 9 of the
NYUCC by virtue of Section 9-109; and (iii) the perfection of the
security interests in any portion of the UCC Collateral, including deposit accounts,
goods covered by a certificate of title (such as automobiles), patents,
trademarks, copyrights, letter-of-credit rights and money, to the extent that
filing of a financing statement is not or may not be sufficient to perfect a
security interest therein (whether as a result of requirements for control or
possession of such collateral, the applicability of preemptive United States
laws or of certificate of title statutes or otherwise).  We further express no opinion as to transfers
of interests or rights in patents, trademarks or copyrights in connection with
exercise of remedies against UCC Collateral under the Security Agreement.

 

G.  We express
no opinion with respect to (i) the adequacy or accuracy of the
descriptions of the UCC Collateral contained in the Security Agreement, in any
Financing Statement or in any document prepared in connection therewith, except
for the legal adequacy of descriptions of UCC Collateral to the extent that
such descriptions consist of the collateral types defined in the NYUCC (other
than commercial tort claims); (ii) the enforceability or perfection of any
security interest in the proceeds of any UCC Collateral other than pursuant to Section 9-315
of the Delaware UCC; (iii) any security interest in consumer goods or commercial
tort claims; or (iv) perfection (or the law governing perfection) of any
security interest in timber to be cut or as-extracted collateral (including
oil, gas and other minerals).

 

H.  Except as
expressly set forth in paragraph 10 above, we express no opinion with respect
to the priority (and therefore no opinion as to the respective rights of any
creditor, encumbrancer or other third party as against the rights of the Lender
Parties) of any security interest in the UCC Collateral.

 

I.  Perfection
of the security interests generally will be terminated under the circumstances
described in Sections  9-316, 9-507, 9-508 and 9-515 of the NYUCC, unless
appropriate action is taken as provided therein.  Without limitation, (i) all the
financing statements filed must be continued at prescribed intervals by the
timely filing of continuation statements and (ii) a new or amended
financing statement may be required to be filed to retain any perfected
security interest in the event any Obligor changes its name, identity or
location (as determined under the NYUCC).

 

J.  With
reference to our opinions in paragraph 8 above, we have assumed without
independent investigation that (i) each Deposit Account Bank is and at all
times 

 

8

 

hereafter will be
the “bank” (as defined in NYUCC Section 9-102(a)(8)) with which the
respective Deposit Accounts are maintained, (ii) each of the Deposit
Accounts will at all relevant times constitute a “deposit account” within the
meaning of Section 9-102(29) of the NYUCC that is established and
maintained in accordance with the respective Deposit Account Control Agreement,
(iii) the State of New York is and at all times hereafter will be the “bank’s
jurisdiction” of each Deposit Account Bank within the meaning of Section 9-304(b) of
the NYUCC, and (iv) the Deposit Account Control Agreements will remain in
full force and effect at all relevant times.

 

K.  We express
no opinion with respect to the ownership or quantity of funds from time to time
credited to the Deposit Accounts.  In
this connection, we call to your attention that (i) a transferee of funds
from a deposit account, absent collusion, takes the funds free and clear of any
security interest, whether or not in violation of the Financing Documents or
the Deposit Account Control Agreement and (ii) the Agent’s security
interest in the Deposit Accounts may be subject to rights of recoupment or
set-off by, or a security interest in the Deposit Accounts in favor of, the
respective Deposit Account Bank, except to the extent that those rights are
validly waived.

 

L.  Our opinions
set forth in paragraphs  3, 7 and 10 are subject to the following
qualifications:  (i) the Collateral
Agent may not be entitled to vote the equity interests included in the
Collateral (the “Pledged Interests”) or to receive dividends or other
distributions directly from the issuer thereof prior to becoming the record
holder of the Pledged Interests; (ii) none of the Pledged Interests that
are securities or any interest therein may be sold or further transferred by
the Collateral Agent without registration under the Securities Act, except
pursuant to an exemption from registration contained in such Act, and
qualification or exemption from qualification under any applicable State
securities or Blue Sky laws; and (iii) compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 may be required prior to
the exercise of any remedies under the Security Agreement with respect to the
Pledged Interests.

 

M.  For purposes
of our opinion in paragraph 9, we have assumed without independent
investigation that  the
representations and warranties of the Company set forth in the first and third
sentences or Section 4.17 of the Credit Agreement are and will be true and
correct at all relevant times.  Our
opinion in paragraph 9 is subject to (and we express no opinion in respect of)
any requirement applicable to a Lender to obtain in good faith a Form FR
U-1 or FR G-3 signed by the Obligors.  Except as expressly set forth in
paragraph 9, we express no opinion with respect to Regulation T of the
Board of Governors of the Federal Reserve System.

 

N.  In rendering
our opinions expressed in paragraph 4 insofar as they require interpretation of
Material Contracts, (i) we express no opinion with respect to the
compliance by any Obligor with, or any financial calculations or data in
respect of, financial covenants included 

 

9

 

in any Material
Contract, and (ii) we have assumed that the limitation on the amount of
Indebtedness under the Credit Agreement for the Revolving Credit Facility in
clause (b) of the definition of “Borrowing Base” in such Credit Agreement
will be applied as provided therein.

 

O.  With
reference to our opinion in paragraph 10 above, we have assumed without
independent investigation that (i) the certificates representing the Pledged
Interests are indorsed to the Collateral Agent or in blank by an effective
indorsement (as such term is defined in the NYUCC), (ii) the Collateral
Agent will at all times hereafter maintain possession of the certificates
representing the Pledged Interests in the State of New York, and (iii) the
Pledged Interests are securities with the meaning of Article 8 of the UCC.

 

This
opinion is rendered as of the date hereof to the Lender Parties in connection
with the Transaction Documents and may not be relied upon by any person other
than the Lender Parties or by the Lender Parties in any other context.  The Lender Parties may not furnish this
opinion or copies hereof to any other person except (i) to bank examiners
and other regulatory authorities should they so request in connection with
their normal examinations, (ii) to the independent auditors and attorneys
of the Lender Parties, (iii) pursuant to order or legal process of any
court or governmental agency, (iv) in connection with any legal action to
which any Lender Party is a party arising out of the transactions contemplated
by the Transaction Documents, or (v) to any potential permitted assignee
or participant in the interests of any Lender Party under the Transaction
Documents for its information. 
Notwithstanding the foregoing, parties referred to in clause (v) of
the immediately preceding sentence who become Lenders after the date hereof may
rely on this opinion as if it were addressed to them (provided that such
delivery shall not constitute a re-issue or reaffirmation of this opinion as of
any date after the date hereof).  This
opinion may not be quoted without the prior written consent of the Firm.

 

Very
truly yours,

 

10

 

SCHEDULE A — GOVERNMENTAL ORDERS AND MATERIAL
CONTRACTS

 

I.

 

GOVERNMENTAL ORDERS

 

None.

 

II.

 

MATERIAL CONTRACTS

 

·                  Indenture dated as of December 16, 2004 among
Douglas Dynamics, L.L.C. and Douglas Dynamics Finance Company, as issuers,
Douglas Dynamics Holdings, Inc., as guarantor thereunder, and U.S. Bank
National Association, as trustee.

 

·                  Tax Sharing Agreement dated as of December 10,
2004 among Douglas Dynamics Holdings, Inc., Douglas Dynamics, L.L.C. and
Douglas Dynamics Finance Company.

 

·                  Amended and Restated Joint Management Services
Agreement, dated April 12, 2004, among Douglas Dynamics Holdings, Inc.,
Douglas Dynamics, L.L.C., Aurora Management Partners LLC, and ACOF Management,
L.P.

 

·                  Second Amended and Restated Securityholders Agreement
dated as of June 30, 2004 among Douglas Dynamics Holdings, Inc. and
certain of its stockholders, optionholders and warrantholders.

 

·                  Deferred Stock Unit Agreement dated as of April 1,
2004 between Douglas Dynamics Holdings, Inc. and James L. Janik, as
amended.

 

·                  Deferred Stock Unit Agreement dated as of April 1,
2004 between Douglas Dynamics Holdings, Inc. and James R. Roethle, as
amended.

 

·                  Deferred Stock Unit Agreement dated as of April 1,
2004 between Douglas Dynamics Holdings, Inc. and Flemming H. Smitsdorff,
as amended.

 

·                  Deferred Stock Unit Agreement dated as of April 1,
2004 between Douglas Dynamics Holdings, Inc. and Raymond S. Littlefield,
as amended.

 

·                  Deferred Stock Unit Agreement dated as of April 1,
2004 between Douglas Dynamics Holdings, Inc. and Ralph R. Gould, as
amended.

 

 

SCHEDULE B— PLEDGED INTERESTS

 

Stock Certificate Number 1 representing 1,000 shares of the common
stock of Douglas Dynamics Finance Company held by Douglas Dynamics, L.L.C.

 

Interest
Certificate Number 5 representing all of the outstanding membership interests
of Douglas Dynamics, L.L.C.

 

 

EXHIBIT E

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Assignment and Assumption Agreement (this “Assignment”)
is dated as of the Effective Date set forth below and is entered into by and
between [NAME OF ASSIGNOR] (the “Assignor”) and [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 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, or otherwise
renewed, refinanced or replaced from time to time (including subsequent or
successive renewals, refinancings or replacements, and pursuant to one or more
agreements or facilities), the “Credit Agreement”), 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 are hereby agreed to and
incorporated herein by reference and made a part of this Assignment 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 Administrative Agent as contemplated below,
the interest in and to all of the Assignor’s rights and obligations under the
Credit Agreement and any other documents or instruments delivered pursuant
thereto that represents the amount and percentage interest identified below of
all of the Assignor’s outstanding rights and obligations under the respective
facilities identified below (including to the extent included in any such Loans
and Letters of Credit) (the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly
provided in this Assignment and the Credit Agreement, without representation or
warranty by the Assignor.

 

	
  1.

  	
  Assignor:

  	
                                                
  

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Assignee:

  	
                                                
  [and is an Affiliate/Related Fund/Sponsor/Fund affiliated with Sponsor(1)]

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Borrower(s):

  	
  Douglas Dynamics,
  L.L.C.

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Administrative Agent:

  	
  Credit Suisse, acting
  through its Cayman Islands Branch, as the administrative agent under the
  Credit Agreement

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Credit Agreement:

  	
  The Credit and Guaranty
  Agreement, dated as of May 21, 2007, by and among Douglas Dynamics
  Holdings, Inc., a Delaware corporation (“Holdings”), Douglas
  Dynamics, L.L.C., a Delaware limited liability company and a direct
  wholly-owned Subsidiary of Holdings (the “Company” or the “Borrower”),
  Fisher, LLC, a Delaware limited liability company (“Fisher”) and
  Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance.”
  and together with Fisher and Holdings, each a “Guarantor” and
  collectively the “Guarantors”) the banks and financial institutions
  listed on the signature pages thereof (together with their respective
  successors and assigns, each individually referred to herein as a “Lender”
  and collectively as “Lenders”), Credit Suisse, Cayman Islands Branch
  (“Credit Suisse”), as administrative agent for the Lenders (in such
  capacity, “Administrative Agent”) and as collateral agent for the
  Lenders (in such capacity, “Collateral Agent”)

  

 

(1)           Select as applicable.

 

E-1

 

6.             Assigned Term Loan
Commitment:

 

	
  Aggregate Amount of

  	
   

  	
  Amount of

  	
   

  	
  Percentage Assigned

  	
   

  
	
  Commitment/Loans

  	
   

  	
  Commitment/Loans

  	
   

  	
  of

  	
   

  
	
  for all Lenders

  	
   

  	
  Assigned

  	
   

  	
  Commitment/Loans(2)

  	
   

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  

 

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

 

7.             Notice and Wire
Instructions:

 

	
  [NAME OF ASSIGNOR]

  	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Notices:

  	
   

  	
   

  	
  Notices:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  	
   

  	
   

  	
  Telecopier:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  	
   

  	
   

  	
  Telecopier:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wire
  Instructions:

  	
   

  	
  Wire Instructions:

  

 

(2)           Set forth, to at least 9 decimal
places, as a percentage of the Commitment/Loans of all Lenders thereunder.

 

E-2

 

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

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

	
  [Consented
  to and](3) Accepted:

  	
   

  
	
   

  	
   

  
	
  CREDIT SUISSE, 

  acting through its Cayman Islands Branch, 

  as Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  [Consented
  to by Borrower:](4)

  	
   

  
	
   

  	
   

  
	
  DOUGLAS
  DYNAMICS, L.L.C.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  

 

(3)           If
required pursuant to Section 10.6(c) of the Credit Agreement.

 

(4)           If
required pursuant to Section 10.6(c) of the Credit Agreement.

 

E-3

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION AGREEMENT

 

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 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 any Credit Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document delivered pursuant thereto, other
than this Assignment (herein collectively the “Credit Documents”), or
any collateral thereunder, (iii) the financial condition of Holdings, the
Company, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Credit Document or (iv) the performance or observance by
Holdings, the Company, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Credit 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 to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets
all requirements of an Eligible Assignee under the Credit Agreement, (iii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement 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 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 to purchase the Assigned Interest on the basis of which it has
made such analysis and decision, and (v) if it is a Non-US Lender,
attached to the Assignment 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 Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at that
time, continue to make its own credit decisions in taking or not taking action
under the Credit Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Credit Documents
are required to be performed by it as a Lender.

 

2.                                       Payments. From and after the Effective Date, 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 or on or after the Effective Date.
The Assignor and the Assignee shall make all appropriate adjustments in
payments by Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.

 

3.                                       Post-Default. After the occurrence and during the
continuation of an Event of Default, the Company may identify, by written to
notice to the Administrative Agent (and the Administrative Agent shall promptly
notify the Lenders), up to two banks, financial institutions or other entities
who shall not be permitted to be an Eligible Assignee during the continuation
of such Event of Default.

 

4.                                       General Provisions. This Assignment shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns. This Assignment 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 by telecopy shall be
effective as delivery of a manually executed

 

E-4

 

counterpart of
this Assignment. This Assignment shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to conflict
of laws principles thereof.

 

E-5

 

EXHIBIT F

 

CERTIFICATE RE: NON-BANK STATUS

 

Reference is made
to the Credit and Guaranty Agreement, dated as of May 21, 2007 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, or otherwise renewed, refinanced or replaced from time to time (including
subsequent or successive renewals, refinancings or replacements, and pursuant
to one or more agreements or facilities), the “Credit Agreement”; the
terms defined therein and not otherwise defined herein being used herein as therein
defined), by and among Douglas Dynamics Holdings, Inc., a Delaware
corporation (“Holdings”), Douglas Dynamics, L.L.C., a Delaware limited
liability company and a direct wholly-owned Subsidiary of Holdings (the “Company”
or the “Borrower”), Fisher, LLC, a Delaware limited liability company (“Fisher”)
and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,”
and together with Fisher and Holdings, each a “Guarantor” and
collectively the “Guarantors”) the banks and financial institutions
listed on the signature pages thereof (together with their respective
successors and assigns, each individually referred to herein as a “Lender”
and collectively as “Lenders”), Credit Suisse, Cayman Islands Branch (“Credit
Suisse”), as administrative agent for the Lenders (in such capacity, “Administrative
Agent”) and as collateral agent for the Lenders (in such capacity, “Collateral
Agent”).

 

Pursuant
to Section 2.19(c) of the Credit Agreement, the undersigned hereby
certifies that it is not a “bank” or other Person described in Section 881(c)(3) of
the Internal Revenue Code of 1986, as amended. Attached hereto are two original
copies of Internal Revenue Service Form W-8 (or its successor form)
properly completed and duly executed.

 

 

	
   

  	
  [NAME OF LENDER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

F-1

 

EXHIBIT G

 

SOLVENCY CERTIFICATE

 

THE
UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:

 

1.   I am the Chief Financial
Officer of Douglas Dynamics Holdings, Inc., a Delaware corporation (“Holdings”)
and Douglas Dynamics, L.L.C., a Delaware limited liability company (the “Company”
or the “Borrower”).

 

2.   Reference is made to the
Credit and Guaranty Agreement, dated as of May 21, 2007 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, or
otherwise renewed, refinanced or replaced from time to time (including
subsequent or successive renewals, refinancings or replacements, and pursuant
to one or more agreements or facilities), the “Credit Agreement”; the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Holdings, the Company, Fisher, LLC, a Delaware
limited liability company (“Fisher”) and Douglas Dynamics Finance
Company, a Delaware corporation (“DD Finance,” and together with Fisher
and Holdings, each a “Guarantor” and collectively the “Guarantors”)
the banks and financial institutions listed on the signature pages thereof
(together with their respective successors and assigns, each individually
referred to herein as a “Lender” and collectively as “Lenders”),
Credit Suisse, Cayman Islands Branch (“Credit Suisse”), as
administrative agent for the Lenders (in such capacity, “Administrative
Agent”) and as collateral agent for the Lenders (in such capacity, “Collateral
Agent”).

 

3.   I have reviewed the terms of
Sections 3 and 4 of the Credit Agreement and the definitions and provisions
contained in the Credit Agreement relating thereto, and, in my opinion, have
made, or have caused to be made under my supervision, such examination or
investigation as is necessary to enable me to express an informed opinion as to
the matters referred to herein.

 

4.   Based upon my review and
examination described in paragraph 3 above, I certify, solely in my capacity as
the chief financial officer of Holdings and Company, that, as of the date
hereof, after giving effect to the incurrence of the Obligations under the
Credit Documents, the borrowings under the Revolving Credit Facility and the
other transactions contemplated by the Credit Documents, (a) Holdings and
its Subsidiaries (on a consolidated basis) are and will be Solvent and (b) Borrower
is and will be Solvent.

 

The foregoing certifications are made and delivered as
of [         ], 2007.

 

	
   

  	
  DOUGLAS DYNAMICS HOLDINGS,
  INC.

  
	
   

  	
  DOUGLAS DYNAMICS,
  L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title: Chief Financial
  Officer

  

 

G-1

 

EXHIBIT H

 

COUNTERPART AGREEMENT

 

This COUNTERPART AGREEMENT,
dated [mm/dd/yyyy] (this “Counterpart Agreement”), is delivered pursuant
to that certain Credit and Guaranty Agreement, dated as of May 21, 2007
(as the same may be amended, restated, supplemented or otherwise modified from
time to time, or otherwise renewed, refinanced or replaced from time to time
(including subsequent or successive renewals, refinancings or replacements, and
pursuant to one or more agreements or facilities), the “Credit Agreement”;
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Douglas Dynamics Holdings, Inc., a Delaware
corporation (“Holdings”), Douglas Dynamics, L.L.C., a Delaware limited
liability company and a direct wholly-owned Subsidiary of Holdings (the “Company”
or the “Borrower”), Fisher, LLC, a Delaware limited liability company (“Fisher”)
and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,”
and together with Fisher and Holdings, each a “Guarantor” and
collectively the “Guarantors”) the banks and financial institutions
listed on the signature pages thereof (together with their respective
successors and assigns, each individually referred to herein as a “Lender”
and collectively as “Lenders”), Credit Suisse, Cayman Islands Branch (“Credit
Suisse”), as administrative agent for the Lenders (in such capacity, “Administrative
Agent”) and as collateral agent for the Lenders (in such capacity, “Collateral
Agent”).

 

Section 1. Pursuant
to Section 5.10 of the Credit Agreement, the undersigned hereby:

 

(a)          agrees that this Counterpart Agreement
may be attached to the Credit Agreement and that by the execution and delivery
hereof, the undersigned becomes a Guarantor under the Credit Agreement and
agrees to be bound by all of the terms thereof;

 

(b)          represents and warrants that each of the
representations and warranties set forth in the Credit Agreement and each other
Credit Document and applicable to the undersigned is true and correct both
before and after giving effect to this Counterpart Agreement, except to the
extent that any such representation and warranty relates solely to any earlier
date, in which case such representation and warranty is true and correct as of
such earlier date;

 

(c)          no event has occurred or is continuing as
of the date hereof, or will result from the transactions contemplated hereby on
the date hereof, that would constitute an Event of Default or a Default;

 

(d)          irrevocably and unconditionally
guarantees the due and punctual payment in full of all Obligations when the
same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. § 362(a)) and in accordance with Section 7
of the Credit Agreement; and

 

(e)          (i) agrees that this Counterpart
Agreement may be attached to the Pledge and Security Agreement, (ii) agrees
that the undersigned will comply with all the terms and conditions of the
Pledge and Security Agreement as if it were an original signatory thereto, (iii) grants
to Secured Parties (as such term is defined in the Pledge and Security
Agreement) a security interest in all of the undersigned’s right, title and
interest in, to and under all personal property, subject to the limited
exclusions set forth in Section 2.3 of the Pledge and Security Agreement,
of the undersigned including, but not limited to the following, in each case
whether now owned or existing or hereafter acquired or arising and wherever
located (as each of the following is defined in the Pledge and Security
Agreement and all of which being hereinafter collectively referred to as the “Collateral”):
Accounts; Chattel Paper; Documents; General Intangibles; Goods; Instruments;
Insurance; Intellectual Property; Investment Related Property; Letter of Credit
Rights; Money; Receivables and Receivable Records; Commercial Tort Claims; to
the extent not otherwise included in the foregoing, all Collateral Records,
Collateral Support and Supporting Obligations relating to any of the foregoing;
and to the extent not otherwise included in the foregoing, all Proceeds,
products, accessions, rents and profits of or in respect of any of the
foregoing, and (iv) delivers to Collateral Agent supplements to all
schedules attached to the Pledge and Security Agreement. All such Collateral
shall be deemed to be

 

H-1

 

part of the “Collateral”
and hereafter subject to each of the terms and conditions of the Pledge and
Security Agreement.

 

Section 2.
The undersigned agrees from time to time, upon request of Administrative Agent,
to take such additional actions and to execute and deliver such additional
documents and instruments as Administrative Agent may request to effect the
transactions contemplated by, and to carry out the intent of, this Counterpart
Agreement. Neither this Counterpart Agreement nor any term hereof may be
changed, waived, discharged or terminated, except by an instrument in writing
signed by the party (including, if applicable, any party required to evidence
its consent to or acceptance of this Counterpart Agreement) against whom
enforcement of such change, waiver, discharge or termination is sought. Any
notice or other communication herein required or permitted to be given shall be
given pursuant to Section 10.1 of the Credit Agreement, and all for
purposes thereof, the notice address of the undersigned shall be the address as
set forth on the signature page hereof. In case any provision in or
obligation under this Counterpart Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

 

THIS COUNTERPART AGREEMENT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF.

 

[Signature page follows]

 

H-2

 

IN WITNESS WHEREOF, the undersigned has caused this Counterpart
Agreement to be duly executed and delivered by its duly authorized officer as
of the date above first written.

 

	
   

  	
   

  	
  [NAME OF SUBSIDIARY]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  Address for Notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Telecopier

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
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  ACKNOWLEDGED AND ACCEPTED, 

  	
   

  	
   

  
	
  as of the date above first written:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CREDIT SUISSE,

  	
   

  	
   

  
	
  acting through its Cayman Islands Branch,

  	
   

  	
   

  
	
  as Administrative Agent and as Collateral Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						

 

H-3

 

EXHIBIT I

 

PLEDGE
AND SECURITY AGREEMENT

 

I-1

 

EXECUTION VERSION

 

TERM
PLEDGE AND SECURITY AGREEMENT

 

 

dated
as of May 21, 2007

 

 

among

 

 

DOUGLAS
DYNAMICS, L.L.C.

DOUGLAS DYNAMICS FINANCE COMPANY

FISHER, LLC

DOUGLAS DYNAMICS HOLDINGS, INC.

 

 

EACH
OF THE OTHER GRANTORS PARTY HERETO

 

 

and

 

CREDIT
SUISSE, CAYMAN ISLANDS BRANCH,

 

as
Collateral Agent

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  
	
  SECTION 1. DEFINITIONS

  	
  2

  
	
  1.1

  	
  General Definitions

  	
  2

  
	
  1.2

  	
  Definitions; Interpretation

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 2. GRANT OF SECURITY

  	
  9

  
	
  2.1

  	
  Grant of Security

  	
  9

  
	
  2.2

  	
  Intercreditor Agreement

  	
  10

  
	
  2.3

  	
  Certain Limited Exclusions

  	
  10

  
	
   

  	
   

  	
   

  
	
  SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS
  REMAIN LIABLE

  	
  10

  
	
  3.1

  	
  Security for Obligations

  	
  10

  
	
  3.2

  	
  Continuing Liability Under Collateral

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 4. REPRESENTATIONS AND WARRANTIES AND
  COVENANTS

  	
  11

  
	
  4.1

  	
  Generally

  	
  11

  
	
  4.2

  	
  Equipment and Inventory

  	
  13

  
	
  4.3

  	
  Receivables

  	
  14

  
	
  4.4

  	
  Investment Related Property

  	
  15

  
	
  4.5

  	
  Intellectual Property

  	
  21

  
	
  4.6

  	
  Commercial Tort Claims

  	
  24

  
	
   

  	
   

  	
   

  
	
  SECTION 5. FURTHER ASSURANCES; ADDITIONAL
  GRANTORS

  	
  24

  
	
  5.1

  	
  Further Assurances

  	
  24

  
	
  5.2

  	
  Additional Grantors

  	
  25

  
	
   

  	
   

  	
   

  
	
  SECTION 6. COLLATERAL AGENT APPOINTED
  ATTORNEY-IN-FACT

  	
  26

  
	
  6.1

  	
  Power of Attorney

  	
  26

  
	
  6.2

  	
  No Duty on the Part of Collateral
  Agent or Secured Parties

  	
  27

  
	
   

  	
   

  	
   

  
	
  SECTION 7. REMEDIES

  	
  27

  
	
  7.1

  	
  Generally

  	
  27

  
	
  7.2

  	
  Application of Proceeds

  	
  28

  
	
  7.3

  	
  Sales on Credit

  	
  29

  
	
  7.4

  	
  Deposit Accounts

  	
  29

  
	
  7.5

  	
  Investment Related Property

  	
  29

  
	
  7.6

  	
  Intellectual Property

  	
  30

  
	
  7.7

  	
  Cash Proceeds

  	
  31

  
	
   

  	
   

  	
   

  
	
  SECTION 8. COLLATERAL AGENT

  	
  32

  
	
   

  	
   

  
	
  SECTION 9. CONTINUING SECURITY INTEREST;
  TRANSFER OF LOANS

  	
  32

  
	
   

  	
   

  
	
  SECTION 10. STANDARD OF CARE; COLLATERAL
  AGENT MAY PERFORM

  	
  33

  
	
   

  	
   

  
	
  SECTION 11. MISCELLANEOUS

  	
  33

  

 

i

 

	
  SCHEDULE
  4.1 — GENERAL INFORMATION

  	
   

  
	
   

  	
   

  
	
  SCHEDULE
  4.2 — LOCATION OF EQUIPMENT AND INVENTORY

  	
   

  
	
   

  	
   

  
	
  SCHEDULE
  4.4 — INVESTMENT RELATED PROPERTY

  	
   

  
	
   

  	
   

  
	
  SCHEDULE
  4.5 — INTELLECTUAL PROPERTY — EXCEPTIONS

  	
   

  
	
   

  	
   

  
	
  SCHEDULE
  4.6 — COMMERCIAL TORT CLAIMS

  	
   

  
	
   

  	
   

  
	
  EXHIBIT
  A — PLEDGE SUPPLEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT
  B — UNCERTIFICATED SECURITIES CONTROL AGREEMENT

  	
   

  

 

ii

 

TERM  PLEDGE AND SECURITY AGREEMENT, dated as of May 21,
2007 (this “Agreement”), between EACH OF THE UNDERSIGNED, whether as an
original signatory hereto or as an Additional Grantor (as herein defined)
(each, a “Grantor”), and CREDIT SUISSE, CAYMAN ISLANDS BRANCH
(“Credit Suisse”),  as collateral agent for the Secured Parties (as herein
defined) (in such capacity as collateral agent, the “Collateral Agent”).

 

RECITALS:

 

WHEREAS, reference is
made to that certain Credit and Guaranty Agreement dated as of May 21,
2007 (as amended, restated, supplemented, refinanced or otherwise modified from
time to time in accordance with its terms, the “Credit
Agreement”), by and among Douglas Dynamics Holdings, Inc., a
Delaware corporation (“Holdings”), Douglas Dynamics,
L.L.C., a Delaware limited liability company and a direct wholly-owned
Subsidiary of Holdings (the “Company”  or
the “Borrower”),
Fisher, LLC, a Delaware limited liability company (“Fisher”)
and Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance,” and together with Fisher and Holdings, each a “Guarantor” and collectively the “Guarantors”)
the banks and financial institutions listed on the signature pages hereof
(together with their respective successors and assigns, each individually referred
to herein as a “Lender” and collectively as “Lenders”),
Credit Suisse, as administrative
agent for the Lenders (in such capacity, “Administrative Agent”)
and as collateral agent for the Lenders (in such capacity, the “Collateral
Agent”);

 

WHEREAS, pursuant to the Credit Agreement, the lenders
thereunder have extended or will extend certain Loans the Borrower, which
Obligations, to be guaranteed by Holdings, Fisher, DD Finance and future
Domestic Subsidiaries of the Company (such parties, together with Company, each
a “Credit Party,” and
collectively, the “Credit Parties”)
and, in connection therewith, each Grantor has agreed to secure such Grantor’s
obligations under the Credit Documents with a First Priority security interest
in the Term Priority Collateral and a Second Priority security interest in the
ABL Priority Collateral, each in favor of the ABL Collateral Agent;

 

WHEREAS, the Company has also entered into the
certain Credit and Guaranty Agreement dated as of May 21, 2007 (as
amended, restated, supplemented, refinanced or otherwise modified from time to
time in accordance with its terms, the “ABL  Credit Agreement”), by and among the Company, as borrower, Holdings, Fisher and DD Finance, as
guarantors, the banks and financial institutions listed on the signature pages thereof,
Credit Suisse, as administrative
agent and JPMorgan Chase Bank, N.A., as collateral agent, whereby the lenders
thereunder have extended or will extend certain loans to the Company, to be
guaranteed by Holdings and in connection therewith, each of the Company,
Holdings and the Subsidiary Guarantors thereunder have agreed to secure such
party’s obligations thereunder with a First Priority Security Interest in the
ABL Priority Collateral and a Second Priority security interest in the Term
Priority Collateral;

 

WHEREAS, concurrently herewith, the Collateral Agent
hereunder and the ABL Collateral Agent have entered into an Intercreditor
Agreement which provides for, inter alia, the relative priorities of the
security interests granted herein and in the ABL Security Agreement;

 

WHEREAS, in consideration of the extensions of
credit and other accommodations of Lenders as set forth in the Credit
Agreement, each Grantor has agreed to secure such Grantor’s obligations under
the Credit Documents as set forth herein; and

 

 

NOW, THEREFORE, in
consideration of the premises and the agreements, provisions and covenants
herein contained, each Grantor and the Collateral Agent agree as follows:

 

SECTION 1.   DEFINITIONS.

 

1.1                               General
Definitions.  In this
Agreement, the following terms shall have the following meanings:

 

“ABL Collateral Agent” means JPMorgan Chase Bank,
N.A., as collateral agent under the ABL Security Agreement, or any permitted
successor, replacement or assign.

 

“ABL Credit Agreement” shall have the meaning
assigned to such term in the recitals.

 

“ABL Credit Documents” shall mean the ABL Credit
Agreement and the other “Credit Documents” as defined in the ABL Credit
Agreement.

 

“ABL Security Agreement” means that certain ABL
Pledge and Security Agreement dated as of the date hereof, among the Company,
the other Grantors party hereto, and JPMorgan Chase Bank, N.A., as collateral
agent thereunder.

 

“Account Debtor” shall mean
each Person who is obligated on a Receivable or any Supporting Obligation
related thereto.

 

“Accounts” shall mean all
“accounts” as defined in Article 9 of the UCC.

 

“Agent” shall have the
meaning assigned to such term in the Credit Agreement.

 

“Agreement” shall have the
meaning set forth in the preamble.

 

“Additional Grantors” shall have the
meaning set forth in Section 5.3.

 

“Assigned Agreements” shall mean,
with respect to any Grantor, all agreements and contracts to which such Grantor
is a party as of the date hereof, or to which such Grantor becomes a party after
the date hereof.

 

“Bankruptcy Code” means
Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute.

 

“Cash Proceeds” shall have the
meaning assigned in Section 7.7.

 

“Chattel Paper” shall mean all
“chattel paper” as defined in Article 9 of the UCC, including, without
limitation, “electronic chattel paper” or “tangible chattel paper”, as each
term is defined in Article 9 of the UCC.

 

“Collateral” shall have the
meaning assigned in Section 2.1.

 

“Collateral Account” shall mean any
account established by the Collateral Agent.

 

“Collateral Agent” shall have the
meaning set forth in the preamble.

 

 

“Collateral Records” shall mean
books, records, ledger cards, files, correspondence, customer lists, blueprints,
technical specifications, manuals, computer software, computer printouts,
tapes, disks and related data processing software and similar items that at any
time evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon.

 

“Collateral Support” shall mean all
property (real or personal) assigned, hypothecated or otherwise securing any
Collateral and shall include any security agreement or other agreement granting
a lien or security interest in such real or personal property.

 

“Commercial Tort Claims” shall mean all
“commercial tort claims” as defined in Article 9 of the UCC, including,
without limitation, all commercial tort claims listed on Schedule 4.6 (as such
schedule may be amended or supplemented from time to time).

 

“Commodities Accounts” (i) shall
mean all “commodity accounts” as defined in Article 9 of the UCC and (ii) shall
include, without limitation, all of the accounts listed on Schedule 4.4 under
the heading “Commodities Accounts”
(as such schedule may be amended or supplemented from time to time).

 

“Company” shall have the
meaning set forth in the recitals hereto.

 

“Controlled Foreign Corporation” shall mean “controlled
foreign corporation” as defined in the Tax Code.

 

“Copyright Licenses” shall mean any
and all agreements providing for the granting of any right in or to Copyrights
(whether any Grantor is licensee or licensor thereunder) including, without
limitation, each agreement referred to in Schedule 4.5 (B) (as such schedule
may be amended or supplemented from time to time).

 

“Copyrights” shall mean all United States, and foreign
copyrights (including Community designs), including but not limited to
copyrights in software and databases, and all Mask Works (as defined under 17
U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, and,
with respect to any and all of the foregoing: (i) all registrations and
applications therefor including, without limitation, the registrations and
applications referred to in Schedule 4.5(A) (as such schedule may be amended or
supplemented from time to time), (ii) all extensions and renewals thereof,
(iii) all rights corresponding thereto throughout the world, and (iv) all
rights to sue for past, present and future infringements thereof.

 

“Credit Agreement” shall have the
meaning set forth in the recitals hereto.

 

“Credit Documents”  shall have the meaning assigned to such term
in the Credit Agreement.

 

“Deposit Accounts” (i) shall
mean all “deposit accounts” as defined in Article 9 of the UCC and (ii) shall
include, without limitation, all of the accounts listed on Schedule 4.4 under
the heading “Deposit Accounts” (as such schedule may be amended or supplemented
from time to time).

 

“Documents” shall mean all
“documents” as defined in Article 9 of the UCC.

 

 

“Equipment” shall
mean:  (i) all “equipment” as
defined in Article 9 of the UCC, (ii) all machinery, manufacturing
equipment, data processing equipment, computers, office equipment, furnishings,
furniture, appliances, fixtures and tools (in each case, regardless of whether
characterized as equipment under the UCC) and (iii) all accessions or
additions thereto, all parts thereof, whether or not at any time of
determination incorporated or installed therein or attached thereto, and all
replacements therefor, wherever located, now or hereafter existing, including
any fixtures.

 

“Event of Default” shall have the
meaning assigned to such term in the Credit Agreement.

 

“First Priority”
shall have the meaning assigned to such term in the Credit Agreement.

 

“General Intangibles” (i) shall
mean all “general intangibles” as defined in Article 9 of the UCC,
including “payment intangibles” also as defined in Article 9 of the UCC
and (ii) shall include, without limitation, all interest rate or currency
protection or hedging arrangements, all tax refunds, all licenses, permits,
concessions and authorizations, all Assigned Agreements and all Intellectual
Property (in each case, regardless of whether characterized as general
intangibles under the UCC).

 

“Goods” (i) shall
mean all “goods” as defined in Article 9 of the UCC and (ii) shall
include, without limitation, all Inventory and Equipment (in each case,
regardless of whether characterized as goods under the UCC).

 

“Grantors” shall have the
meaning set forth in the preamble.

 

“Holdings” shall have the
meaning set forth in the recitals hereto.

 

“Instruments” shall mean all
“instruments” as defined in Article 9 of the UCC.

 

“Insurance” shall mean (i) all
insurance policies covering any or all of the Collateral (regardless of whether
the Collateral Agent is the loss payee thereof) and (ii) any key man life
insurance policies.

 

“Intellectual Property” shall mean,
collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets, and the
Trade Secret Licenses.

 

“Intercreditor Agreement” shall mean the
Intercreditor Agreement dated the date hereof, among the Company, the
Collateral Agent hereunder and the ABL Collateral Agent, as amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms.

 

“Inventory” shall mean (i) all
“inventory” as defined in Article 9 of the UCC and (ii) all goods
held for sale or lease or to be furnished under contracts of service or so
leased or furnished, all raw materials, work in process, finished goods, and
materials used or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or otherwise used
or consumed in any Grantor’s business; all goods in which any Grantor has an
interest in mass or a joint or other interest or right of any kind; and all
goods which are returned to or repossessed by any Grantor, all computer
programs embedded in any 

 

 

goods and all accessions
thereto and products thereof (in each case, regardless of whether characterized
as inventory under the UCC).

 

“Investment Accounts” shall mean the
Collateral Account, Securities Accounts, Commodities Accounts and Deposit Accounts.

 

“Investment Related Property” shall
mean:  (i) all “investment property”
(as such term is defined in Article 9 of the UCC) and (ii) all of the
following (regardless of whether classified as investment property under the
UCC): all Pledged Equity Interests, Pledged Debt, the Investment Accounts and
certificates of deposit.

 

“Lender” shall have the
meaning assigned to such term in the Credit Agreement.

 

“Letter of Credit Right” shall mean “letter-of-credit
right” as defined in Article 9 of the UCC.

 

“Lien” shall have the
meaning assigned to such term in the Credit Agreement.

 

“Material Adverse Effect” shall have the
meaning assigned to such term in the Credit Agreement.

 

“Money” shall mean “money”
as defined in the UCC.

 

“Obligations” shall have the
meaning assigned to such term in the Credit Agreement.

 

“Patent Licenses” shall mean all
agreements providing for the granting of any right in or to Patents (whether
any Grantor is licensee or licensor thereunder) including, without limitation,
each agreement referred to in Schedule 4.5(D) (as such schedule may be
amended or supplemented from time to time).

 

“Patents” shall mean all United States and foreign patents
and certificates of invention, or similar industrial property rights, and
applications for any of the foregoing, including, but not limited to: (i) each
patent and patent application referred to in Schedule 4.5(C) hereto (as such
schedule may be amended or supplemented from time to time), (ii) all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and
reexaminations thereof, (ii) all rights corresponding thereto throughout the
world, (ii) all inventions and improvements described therein, and (iv) all
rights to sue for past, present and future infringements thereof, (v) all
licenses, claims, damages, and proceeds of suit arising therefrom.

 

“Permitted Lien” shall have the
meaning given to such term in the Credit Agreement.

 

“Person” means and
includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships,
joint stock companies, Joint Ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations, whether
or not legal entities, and Governmental Authorities.

 

 

“Pledge Supplement” shall mean any
supplement to this agreement in substantially the form of Exhibit A.

 

“Pledged Debt” shall mean all
Indebtedness owed to any Grantor, regardless of whether evidenced by instrument
or promissory note, including, without limitation, all Indebtedness described
on Schedule 4.4(A) under the heading “Pledged Debt” (as such schedule may
be amended or supplemented from time to time), issued by the obligors named
therein, the instruments evidencing such Indebtedness, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Indebtedness.

 

“Pledged Equity Interests” shall mean all
Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged
Trust Interests.

 

“Pledged LLC Interests” shall mean all
interests in any limited liability company including, without limitation, all
limited liability company interests listed on Schedule 4.4(A) under the
heading “Pledged LLC Interests” (as such schedule may be amended or
supplemented from time to time) and the certificates, if any, representing such
limited liability company interests and any interest of any Grantor on the
books and records of such limited liability company or on the books and records
of any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such limited
liability company interests.

 

“Pledged Partnership Interests” shall mean all
interests in any general partnership, limited partnership, limited liability
partnership or other partnership including, without limitation, all partnership
interests listed on Schedule 4.4(A) under the heading “Pledged Partnership
Interests” (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such partnership interests and any
interest of any Grantor on the books and records of such partnership or on the
books and records of any securities intermediary pertaining to such interest
and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such partnership interests.

 

“Pledged Stock” shall mean all
shares of capital stock owned by any Grantor, including, without limitation,
all shares of capital stock described on Schedule 4.4(A) under the heading
“Pledged Stock” (as such schedule may be amended or supplemented from time to
time), and the certificates, if any, representing such shares and any interest
of any Grantor in the entries on the books of the issuer of such shares or on
the books of any securities intermediary pertaining to such shares, and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares.

 

“Pledged Trust Interests” shall mean all
interests in a Delaware business trust or other trust including, without
limitation, all trust interests listed on Schedule 4.4(A) under the
heading “Pledged Trust Interests” (as such schedule may be amended or
supplemented from time to time) and the certificates, if any, representing such
trust interests and any interest of any Grantor on the books and records of
such trust or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, 

 

 

receivable or otherwise
distributed in respect of or in exchange for any or all of such trust
interests.

 

“Proceeds” shall mean:  (i) all “proceeds” as defined in Article 9
of the UCC, (ii) payments or distributions made with respect to any
Investment Related Property and (iii) whatever is receivable or received
when Collateral or proceeds are sold, leased, licensed, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.

 

“Receivables” shall mean all
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, including, without limitation all such rights
constituting or evidenced by any Account, Chattel Paper, Instrument, General
Intangible or Investment Related Property, together with all of Grantor’s
rights, if any, in any goods or other property giving rise to such right to
payment and all Collateral Support and Supporting Obligations related thereto
and all Receivables Records.

 

“Receivables Records” shall mean (i) all
original copies of all documents, instruments or other writings or electronic
records or other Records evidencing the Receivables, (ii) all books,
correspondence, credit or other files, Records, ledger sheets or cards,
invoices, and other papers relating to Receivables, including, without
limitation, all tapes, cards, computer tapes, computer discs, computer runs,
record keeping systems and other papers and documents relating to the
Receivables, whether in the possession or under the control of any Grantor or
any computer bureau or agent from time to time acting for any Grantor or
otherwise, (iii) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments,
supplements or other modifications thereto, notices to other creditors or
secured parties, and certificates, acknowledgments, or other writings,
including, without limitation, lien search reports, from filing or other
registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or nonwritten forms of
information related in any way to the foregoing or any Receivable.

 

“Record” shall have the
meaning specified in Article 9 of the UCC.

 

“Refinance” means, in
respect of any indebtedness, to refinance, extend, renew, defease, amend,
modify, supplement, restructure, replace, refund or repay, or to issue other
indebtedness, in exchange or replacement for, such indebtedness in whole or in
part.  “Refinanced”
and “Refinancing” shall have
correlative meanings.

 

“Secured Obligations” shall have the
meaning assigned in Section 3.1.

 

“Secured Parties” shall mean the
Collateral Agent, each Agent and the Lenders and shall include, without
limitation, all former Lenders to the extent that any Obligations owing to such
Persons were incurred while such Persons were Lenders and such Obligations have
not been paid or satisfied in full.

 

“Securities” shall mean any
stock, shares, partnership interests, voting trust certificates, certificates
of interest or participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as “securities” or any certificates
of interest, shares or participations in 

 

 

temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

 

“Securities Accounts” (i) shall
mean all “securities accounts” as defined in Article 8 of the UCC and (ii) shall
include, without limitation, all of the accounts listed on Schedule 4.4(A) under
the heading “Securities Accounts” (as such schedule may be amended or
supplemented from time to time).

 

“Subsidiary Guarantor” shall mean any
Subsidiary of the Company that becomes a Guarantor in accordance with Section 5.10
of the Credit Agreement.

 

“Supporting Obligation” shall mean all
“supporting obligations” as defined in Article 9 of the UCC.

 

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

 

“Trademark Licenses” shall mean any
and all agreements providing for the granting of any right in or to Trademarks
(whether any Grantor is licensee or licensor thereunder) including, without
limitation, each agreement referred to in Schedule 4.5(F) (as such
schedule may be amended or supplemented from time to time).

 

“Trademarks” shall mean all
United States, and foreign trademarks, trade names, corporate names, company
names, business names, fictitious business names, Internet domain names,
service marks, certification marks, collective marks, logos, other source or
business identifiers, designs and general intangibles of a like nature, all
registrations and applications for any of the foregoing including, but not
limited to: (i) the registrations and applications referred to in Schedule
4.5 (E) (as such schedule may be amended or supplemented from time to
time), (ii) all extensions or renewals of any of the foregoing, (iii) all
of the goodwill of the business connected with the use of and symbolized by the
foregoing, and (iv) the right to sue for past, present and future
infringement or dilution of any of the foregoing or for any injury to goodwill.

 

“Trade Secret Licenses” shall mean any
and all agreements providing for the granting of any right in or to Trade
Secrets (whether any Grantor is licensee or licensor thereunder) including,
without limitation, each agreement referred to in Schedule 4.5 (G) (as
such schedule may be amended or supplemented from time to time).

 

“Trade Secrets” shall mean all
trade secrets and all other confidential or proprietary information and
know-how whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying,
incorporating, or referring in any way to such Trade Secret, including but not
limited to the right to sue for past, present and future misappropriation or
other violation of any Trade Secret.

 

“UCC” shall mean the
Uniform Commercial Code as in effect from time to time in the State of New York
or, when the context implies, the Uniform Commercial Code as in effect from
time to time in any other applicable jurisdiction.

 

“United States” shall mean the
United States of America.

 

 

1.2          Definitions;
Interpretation.  All
capitalized terms used herein (including the preamble and recitals hereto) and
not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement or, if not defined therein, in the UCC.  References to “Sections,” “Exhibits” and
“Schedules” shall be to Sections, Exhibits and Schedules, as the case may be,
of this Agreement unless otherwise specifically provided.  Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.  Any of the terms defined herein
may, unless the context otherwise requires, be used in the singular or the
plural, depending on the reference.  The
use herein of the word “include” or “including”, when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not nonlimiting language (such
as “without limitation” or “but not limited to” or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to all other
items or matters that fall within the broadest possible scope of such general
statement, term or matter.  If any
conflict or inconsistency exists between this Agreement and the Credit
Agreement, the Credit Agreement shall govern. 
If any conflict or inconsistency exists between this Agreement, the ABL
Security Agreement and the Intercreditor Agreement with respect to the rights
and obligations of the Collateral Agent hereunder and the ABL Collateral Agent,
the Intercreditor Agreement shall control. 
All references herein to provisions of the UCC shall include all
successor provisions under any subsequent version or amendment to any
Article of the UCC.

 

SECTION 2.   GRANT
OF SECURITY.

 

2.1          Grant of
Security.  Each
Grantor hereby grants to the Collateral Agent for its benefit and for the benefit
of the other Secured Parties, a security interest in and continuing lien on all
of such Grantor’s right, title and interest in, to and under all personal
property of such Grantor including, but not limited to the following, in each
case whether now owned or existing or hereafter acquired or arising and
wherever located (all of which being hereinafter collectively referred to as
the “Collateral”):

 

(a)           Accounts;

 

(b)           Chattel Paper;

 

(c)           Documents;

 

(d)           General Intangibles;

 

(e)           Goods;

 

(f)            Instruments;

 

(g)           Insurance;

 

(h)           Intellectual Property;

 

(i)            Investment Related Property;

 

(j)            Letter of Credit Rights;

 

 

(k)           Money;

 

(l)            Receivables and Receivable Records;

 

(m)          Commercial Tort Claims;

 

(n)           to the extent not otherwise included
above, all Collateral Records, Collateral Support and Supporting Obligations
relating to any of the foregoing; and

 

to the extent not otherwise
included above, all Proceeds, products, accessions, rents and profits of or in
respect of any of the foregoing.

 

2.2                               Intercreditor
Agreement.  Notwithstanding
anything to the contrary contained in this Agreement, the priorities with
respect to all security interests granted to the Collateral Agent hereunder and
under the other Credit Documents and to the ABL Collateral Agent under the ABL
Security Agreement and the other ABL Credit Documents shall be governed by the
terms and provisions of the Intercreditor Agreement.  In the event of any conflict between the
terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern and control.

 

2.3                               Certain Limited Exclusions.  Notwithstanding anything herein to the
contrary, in no event shall the security interest granted under
Section 2.1 hereof attach to (a) any lease, license, contract,
property rights or agreement to which any Grantor is a party or any of its
rights or interests thereunder if and for so long as the grant of such security
interest shall constitute or result in (i) the abandonment, invalidation or
unenforceability of any right, title or interest of any Grantor therein or
(ii) in a breach or termination pursuant to the terms of, or a default
under, any such lease, license, contract property rights or agreement (other
than to the extent that any such term would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity), provided however that, in
the case of either (i) or (ii) above, such security interest shall
attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and to the extent severable,
shall attach immediately to any portion of such Lease, license, contract,
property rights or agreement that does not result in any of the consequences
specified in (i) or (ii) above; or (b) any of the outstanding
capital stock of a Controlled Foreign Corporation in excess of 66% of the
voting power of all classes of capital stock of such Controlled Foreign
Corporation entitled to vote; provided that immediately upon the
amendment of the Tax Code to allow the pledge of a greater percentage of the
voting power of capital stock in a Controlled Foreign Corporation without
adverse tax consequences, the Collateral shall include, and the security
interest granted by each Grantor shall attach to, such greater percentage of
capital stock of each Controlled Foreign Corporation.

 

SECTION 3.  
SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.

 

3.1                               Security for Obligations.  This Agreement secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) (and
any  successor provision thereof)), of all Obligations with respect to every
Grantor (the “Secured Obligations”).

 

 

3.2                               Continuing Liability Under Collateral.  Notwithstanding anything herein to the
contrary, (i) each  Grantor
shall remain liable for all obligations under the Collateral and nothing contained
herein is intended or shall be a delegation of duties to the Collateral Agent
or any Secured Party, (ii) each Grantor shall remain liable under each of
the agreements included in the Collateral, including, without limitation, any
agreements relating to Pledged Partnership Interests or Pledged LLC Interests,
to perform all of the obligations undertaken by it thereunder all in accordance
with and pursuant to the terms and provisions thereof and neither the
Collateral Agent nor any Secured Party shall have any obligation or liability
under any of such agreements by reason of or arising out of this Agreement or
any other document related thereto nor shall the Collateral Agent nor any
Secured Party have any obligation to make any inquiry as to the nature or
sufficiency of any payment received by it or have any obligation to take any
action to collect or enforce any rights under any agreement included in the
Collateral, including, without limitation, any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, and (iii) the exercise by
the Collateral Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral.

 

SECTION 4.  
REPRESENTATIONS AND WARRANTIES AND COVENANTS.

 

4.1                               Generally.

 

(a)                                  Representations
and Warranties.  Each
Grantor hereby represents and warrants, on the Closing Date and on each Credit
Date, that:

 

(i)                    it owns the
Collateral purported to be owned by it or otherwise has the rights it purports
to have in each item of Collateral and, as to all Collateral whether now
existing or hereafter acquired, will continue to own or have such rights in
each item of the Collateral, in each case free and clear of any and all Liens,
rights or claims of all other Persons other than Permitted Liens;

 

(ii)                   it has
indicated on Schedule 4.1(A)(as such schedule may be amended or supplemented
from time to time): (A) the type of organization of such Grantor,
(B) the jurisdiction of organization of such Grantor, (C) its
organizational identification number, if any, and (D) the jurisdiction
where the chief executive office or its sole place of business is, and for the
one-year period preceding the date hereof has been, located;

 

(iii)                  the full
legal name of such Grantor is as set forth on Schedule 4.1(A) and it has
not done in the last five (5) years, and does not do, business under any
other name (including any trade-name or fictitious business name) except for
those names set forth on Schedule 4.1(B) (as such schedule may be amended
or supplemented from time to time);

 

(iv)                  except as
provided on Schedule 4.1(C), it has not changed its name, jurisdiction of
organization, chief executive office or sole place of business (or principal
residence if such Grantor is a natural person) or its corporate structure in
any way (e.g., by merger, consolidation, change in corporate form or otherwise)
within the past five (5) years;

 

(v)                   upon the
filing of all UCC financing statements naming each Grantor as “debtor” and the
Collateral Agent as “secured party” and describing the Collateral in the filing
offices set forth opposite such Grantor’s name on Schedule 4.1(D)

 

 

hereof
(as such schedule may be amended or supplemented from time to time), upon
execution of a control agreement, in form and substance satisfactory to the
Collateral Agent, with respect to any Deposit Account, upon consent of the
issuer with respect to Letter of Credit Rights, and to the extent not subject
to Article 9 of the UCC, upon recordation of the security interests
granted hereunder in Patents, Trademarks and Copyrights in the applicable
intellectual property registries, including but not limited to the United
States Patent and Trademark Office and the United States Copyright Office, the
security interests granted to the Collateral Agent hereunder constitute valid
and perfected First Priority or Second Priority Liens (in accordance with the
Intercreditor Agreement (subject in the case of priority only to Permitted
Liens and to the rights of the United States government (including any agency
or department thereof) with respect to United States government Receivables) on
all of the Collateral;

 

(vi)                  other than
the financing statements filed in favor of the Collateral Agent, no effective
UCC financing statement, fixture filing or other instrument similar in effect
under any applicable law covering all or any part of the Collateral is on file
in any filing or recording office except for (A) financing statements for
which proper termination statements have been delivered to the Collateral Agent
for filing, (B) financing statements in favor of the ABL Collateral Agent
and (C) financing statements filed in connection with other Permitted
Liens, and other than the filings in favor of the Collateral Agent and the ABL
Collateral Agent, no effective filing with respect to a Lien covering all or
any part of the Collateral is on file with the United States Patent and
Trademark Office or United States Copyright Office or any other Governmental
Authority;

 

(vii)                 no
authorization, approval or other action by, and no notice to or filing with,
any Governmental Authority or regulatory body is required for either
(A) the pledge or grant by any Grantor of the Liens purported to be
created in favor of the Collateral Agent hereunder or (B) the exercise by
Collateral Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created hereunder or created or provided for
by applicable law), except (1) for the filings contemplated by clause
(vii) above and (2) as may be required, in connection with the
disposition of any Investment Related Property, by laws generally affecting the
offering and sale of Securities;

 

(viii)                all
information supplied by any Grantor with respect to any of the Collateral (in
each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects;

 

(ix)                   none of the
Collateral constitutes, or is the Proceeds of, “farm products” (as defined in
the UCC); and

 

(x)                    it does not
own any “as extracted collateral” (as defined in the UCC) or any timber to be
cut.

 

(b)                                 Covenants and
Agreements.  Each
Grantor hereby covenants and agrees that:

 

(i)                    except for
the security interest created by this Agreement, it shall not create or suffer
to exist any Lien upon or with respect to any of the Collateral,

 

 

except
the Lien of the ABL Collateral Agent and other Permitted Liens, and such
Grantor shall defend the Collateral against all Persons at any time claiming
any interest therein;

 

(ii)                   it shall
not change such Grantor’s name, identity, corporate structure (e.g., by merger,
consolidation, change in corporate form or otherwise), sole place of business
(or principal residence if such Grantor is a natural person), chief executive
office, type of organization or jurisdiction of organization unless it shall
have (A) contemporaneously therewith notified the Collateral Agent in writing,
by executing and delivering to the Collateral Agent a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto, and (B) taken all
actions necessary or advisable to maintain the continuous validity, perfection
and the priority of the Collateral Agent’s security interest in the Collateral
intended to be granted and agreed to hereby;

 

(iii)                  upon such
Grantor or any officer of such Grantor obtaining knowledge thereof, it shall
promptly notify the Collateral Agent in writing of any event that has had or
reasonably could be expected to materially and adversely affect the value of
the Collateral or any significant portion thereof, the ability of any Grantor
or the Collateral Agent to dispose of the Collateral or any portion thereof, or
the rights and remedies of the Collateral Agent in relation thereto, including,
without limitation, the levy of any legal process against the Collateral or any
significant portion thereof that if left unbonded or not removed would result
in an Event of Default;

 

(iv)                  it shall not
take or permit any action which could impair the Collateral Agent’s rights in
the Collateral in any material respect; and

 

(v)                   it shall not
sell, transfer or assign (by operation of law or otherwise) any Collateral
except as permitted by, and in accordance with the Credit Agreement and the ABL
Credit Agreement.

 

4.2                               Equipment and Inventory.

 

(a)                                  Representations
and Warranties.  Each
Grantor represents and warrants, on the Closing Date and on each Credit Date,
that:

 

(i)                    all of the
Equipment and Inventory (other than de minimis amounts of Equipment and
Inventory not located in such locations in the ordinary course of business,
Equipment and Inventory in transit between locations identified on Schedule 4.2
and Inventory in transit to Account Debtors) included in the Collateral is kept
for the past four (4) years only at the locations specified in
Schedule 4.2 (as such schedule may be amended or supplemented from time to
time); and

 

(ii)                   subject to
the provisions of Section 4.2(b)(iii), none of the Inventory or Equipment
is in the possession of an issuer of a negotiable document (as defined in
Section 7-104 of the UCC) therefor or otherwise in the possession of a
bailee or a warehouseman.

 

(b)                                 Covenants and
Agreements.  Each
Grantor covenants and agrees that:

 

(i)                    it shall
keep the Equipment, Inventory (other than de minimis amounts of Equipment and
Inventory not located in such locations in the

 

 

ordinary
course of business, Equipment and Inventory in transit between locations
identified on Schedule 4.2 and Inventory in transit to Account Debtors) and any
Documents evidencing any Equipment and Inventory in the locations specified on
Schedule 4.2 (as such schedule may be amended or supplemented from time to
time) unless it shall have notified the Collateral Agent in writing, by executing
and delivering to the Collateral Agent a completed Pledge Supplement,
substantially in the form of Exhibit A attached hereto, together with all
Supplements to Schedules thereto, contemporaneously with any change in
locations, identifying such new locations and providing such other information
in connection therewith as the Collateral Agent may reasonably request;

 

(ii)                   it shall
not deliver any Document evidencing any Equipment and Inventory to any Person
other than the issuer of such Document to claim the Goods evidenced therefor or
the Collateral Agent or the purchaser of such Equipment or Inventory;

 

(iii)                  if any
Equipment or Inventory with a fair market value of greater than $150,000 in the
aggregate is in the possession or under the control of any third party, each
Grantor shall join with the Collateral Agent in notifying the third party of
the Collateral Agent’s security interest and obtaining an acknowledgment from
the third party that it is holding the Equipment and Inventory for the benefit
of the Collateral Agent; provided, however, that following the occurrence and
during the continuance of an Event of Default, each Grantor shall comply with
this provision with respect to all Equipment and Inventory; and

 

(iv)                  with respect
to any item of Equipment which is covered by a certificate of title under a
statute of any jurisdiction under the law of which indication of a security
interest on such certificate is required as a condition of perfection thereof,
upon the reasonable request of the Collateral Agent, (A) provide
information with respect to any such Equipment in excess of $40,000
individually or $150,000 in the aggregate, (B) execute and file with the
registrar of motor vehicles or other appropriate authority in such jurisdiction
an application or other document requesting the notation or other indication of
the security interest created hereunder on such certificate of title,
and (C) deliver to the Collateral Agent copies of all such
applications or other documents filed during such calendar quarter and copies
of all such certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the items of Equipment
covered thereby.

 

4.3                               Receivables.

 

(a)                                  Covenants and
Agreements:  Each
Grantor hereby covenants and agrees that:

 

(i)                    it shall
keep and maintain at its own cost and expense satisfactory and complete records
of the Receivables, including, but not limited to, the originals of all
documentation with respect to all Receivables and records of all payments received
and all credits granted on the Receivables, all merchandise returned and all
other dealings therewith;

 

(ii)                   it shall
perform in all material respects all of its obligations with respect to the
Receivables;

 

 

(iii)                  it shall
not amend, modify, terminate or waive any provision of any material Receivable
in any manner which could reasonably be expected to materially and adversely
affect the value of such Receivable as Collateral other than, prior to the
occurrence and during the continuance of an Event of Default, in the ordinary
course of business as generally conducted by such Grantor.  Following an Event of Default, other than in
the ordinary course of business as generally conducted by it and except as
otherwise provided in subsection (iv) below, such Grantor shall not
(A) grant any extension or renewal of the time of payment of any
Receivable, (B) compromise or settle any dispute, claim or legal
proceeding with respect to any Receivable for less than the total unpaid
balance thereof, (C) release, wholly or partially, any Person liable for
the payment thereof, or (D) allow any credit or discount thereon; and

 

(iv)                  each Grantor
shall continue to collect all amounts due or to become due to such Grantor
under the Receivables and any Supporting Obligation and diligently exercise
each material right it may have under any Receivable any Supporting Obligation
or Collateral Support, in each case, at its own expense and consistent with
such Grantor’s reasonable business practice. 
Notwithstanding the foregoing, the Collateral Agent shall have the right
at any time to require any Grantor to notify any Account Debtor of the
Collateral Agent’s security interest in the Receivables and any Supporting
Obligation (and prior to the occurrence and continuance of an Event of Default,
such notification may be on a “no name” basis) and, in addition, at any time
following the occurrence and during the continuation of an Event of Default,
the Collateral Agent may: 
(A) notify and direct, or require any Grantor to notify and direct,
the Account Debtors under any Receivables to make payment of all amounts due or
to become due to such Grantor thereunder directly to the Collateral Agent;
(B) notify, or require any Grantor to notify, each Person maintaining a
lockbox or similar arrangement to which Account Debtors under any Receivables
have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to the Collateral
Agent; and (C) enforce, at the expense of such Grantor, collection of any
such Receivables and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done.  If the Collateral Agent notifies
any Grantor that it has elected to collect the Receivables in accordance with
the preceding sentence, any payments of Receivables received by such Grantor
shall be forthwith (and in any event within two (2) Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor to
the Collateral Agent if required, in a collateral account maintained under the
sole dominion and control of the Collateral Agent, and until so turned over,
all amounts and proceeds (including checks and other instruments) received by
such Grantor in respect of the Receivables, any Supporting Obligation or
Collateral Support shall be received in trust for the benefit of the Collateral
Agent hereunder and shall be segregated from other funds of such Grantor and
such Grantor shall not adjust, settle or compromise the amount or payment of
any Receivable, or release wholly or partly any Account Debtor or obligor
thereof, or allow any credit or discount thereon.

 

4.4                               Investment Related Property.

 

4.4.1       Investment
Related Property Generally

 

(a)           Covenants and Agreements.  Each Grantor hereby covenants and agrees
that:

 

 

(i)                    within 10 Business Days
after the end of each calendar month, in the event it acquires rights in any
Investment Related Property after the date hereof, it shall deliver to the
Collateral Agent a completed Pledge Supplement, substantially in the form of Exhibit A
attached hereto, together with all Supplements to Schedules thereto, reflecting
such new Investment Related Property and all other Investment Related
Property.  Notwithstanding the foregoing,
it is understood and agreed that the security interest of the Collateral Agent
shall attach to all Investment Related Property immediately upon any Grantor’s
acquisition of rights therein and shall not be affected by the failure of any
Grantor to deliver a supplement to Schedule 4.4 as required hereby;

 

(ii)                   except as provided in the
next sentence, in the event such Grantor receives any dividends, interest or
distributions on any Investment Related Property, or any securities or other
property upon the merger, consolidation, liquidation or dissolution of any
issuer of any Investment Related Property, then (A) such dividends,
interest or distributions and securities or other property shall be included in
the definition of Collateral without further action and (B) such Grantor
shall immediately take all steps, if any, necessary or advisable to ensure the
validity, perfection, priority and, if applicable, control, except, with
respect to control, as otherwise permitted under Sections 4.4.1(b) or
4.4.4(c)(i) below, of the Collateral Agent over such Investment Related
Property (including, without limitation, delivery thereof to the Collateral
Agent) and pending any such action such Grantor shall be deemed to hold such
dividends, interest, distributions, securities or other property in trust for
the benefit of the Collateral Agent and shall segregate such dividends,
distributions, Securities or other property from all other property of such
Grantor.  Notwithstanding the foregoing,
so long as no Event of Default shall have occurred and be continuing, the
Collateral Agent authorizes each Grantor to retain all ordinary cash dividends
and distributions paid in the normal course of the business of the issuer and
consistent with the past practice of the issuer and all scheduled payments of
interest; and

 

(iii)                  each Grantor consents to the
grant by each other Grantor of a Security Interest in all Investment Related
Property to the Collateral Agent.

 

(b)                                 Delivery and Control.  Each Grantor agrees that with respect to any
Investment Related Property in which it currently has rights it shall comply
with the provisions of this Section 4.4.1(b) on or before the Credit
Date and with respect to any Investment Related Property hereafter acquired by
such Grantor it shall comply with the provisions of this Section 4.4.1(b) promptly
upon acquiring rights therein, in each case in form and substance satisfactory
to the Collateral Agent.  With respect to
any Investment Related Property that is represented by a certificate or that is
an “instrument” (other than any Investment Related Property (i) credited
to a Securities Account or (ii) which is represented by a certificate or “instrument”
and does not exceed $50,000 individually and $200,000 in the aggregate) it
shall cause such certificate or instrument to be delivered to the Collateral
Agent, indorsed in blank by an “effective indorsement” (as defined in Section 8-107
of the UCC), regardless of whether such certificate constitutes a “certificated
security” for purposes of the UCC; provided, however, that following the
occurrence and during the continuance of an Event of Default, it shall cause
all such certificates or instruments to be delivered to the Collateral
Agent.  For the avoidance of doubt, the
Grantor shall comply with Section 4.4.1(a)(i) regardless of any
exception set forth in this Section 4.4.1(b).  With respect to any Investment Related
Property that is an “uncertificated security” for purposes of the UCC (other
than any “uncertificated securities” credited to a Securities Account), it
shall cause the issuer of such uncertificated security to either (A) register
the Collateral Agent

 

 

as the registered owner thereof on the books and records of
the issuer or (B) execute an agreement substantially in the form of Exhibit B
hereto, pursuant to which such issuer agrees to comply with the Collateral
Agent’s instructions with respect to such uncertificated security without
further consent by such Grantor.

 

(c)                                  Voting and Distributions.

 

(i)                    So long as no Event of
Default shall have occurred and be continuing:

 

(A)          except as otherwise provided under the covenants and
agreements relating to Investment Related Property in this Agreement or
elsewhere herein or in the Credit Agreement, each Grantor shall be entitled to
exercise or refrain from exercising any and all voting and other consensual rights
pertaining to the Investment Related Property or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Credit
Agreement; provided, no Grantor shall exercise or refrain from
exercising any such right if the Collateral Agent shall have notified such
Grantor that, in the Collateral Agent’s reasonable judgment, such action would
materially and adversely affect the value of the Investment Related Property or
any part thereof; it being understood, however, that neither the voting by such
Grantor of any Pledged Stock for, or such Grantor’s consent to, the election of
directors (or similar governing body) at a regularly scheduled annual or other
meeting of stockholders or with respect to incidental matters at any such meeting,
nor such Grantor’s consent to or approval of any action otherwise permitted
under this Agreement and the Credit Agreement, shall be deemed inconsistent
with the terms of this Agreement or the Credit Agreement within the meaning of
this Section 4.4(c)(i)(A); and

 

(B) the Collateral
Agent shall promptly execute and deliver (or cause to be executed and
delivered) to each Grantor all proxies, and other instruments as such Grantor
may from time to time reasonably request for the purpose of enabling such Grantor
to exercise the voting and other consensual rights when and to the extent which
it is entitled to exercise pursuant to clause (A) above;

 

(ii)                                  Upon the occurrence and during the continuation of an Event
of Default and (except with regard to an Event of Default pursuant to Section 8.1(f) or
8.1(g) of the Credit Agreement) if the Collateral Agent has given written
notice to the Grantor of its election to exercise its rights under this
Agreement:

 

(A)  all rights of each Grantor to exercise or
refrain from exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant hereto shall cease and all such
rights shall thereupon become vested in the Collateral Agent who shall
thereupon have the sole right to exercise such voting and other consensual
rights; and

 

(B)  in order to permit the Collateral Agent to
exercise the voting and other consensual rights which it may be entitled to
exercise pursuant

 

 

hereto
and to receive all dividends and other distributions which it may be entitled
to receive hereunder: (1) each Grantor shall promptly execute and deliver (or
cause to be executed and delivered) to the Collateral Agent all proxies,
dividend payment orders and other instruments as the Collateral Agent may from
time to time reasonably request and (2) each Grantor acknowledges that the
Collateral Agent may utilize the power of attorney set forth in Section 6.1.

 

4.4.2       Pledged Equity Interests

 

(a)           Representations
and Warranties.  Each Grantor hereby
represents and warrants, on the Closing Date and on each Credit Date, that:

 

(i)                    Schedule 4.4(A) (as
such schedule may be amended or supplemented from time to time) sets forth
under the headings “Pledged Stock, “Pledged LLC Interests,” “Pledged
Partnership Interests” and “Pledged Trust Interests,” respectively, all of the
Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged
Trust Interests owned by any Grantor and such Pledged Equity Interests
constitute the percentage of issued and outstanding shares of stock, percentage
of membership interests, percentage of partnership interests or percentage of
beneficial interest of the respective issuers thereof indicated on such
Schedule;

 

(ii)                   it is the record and
beneficial owner of the Pledged Equity Interests free of all Liens, rights or
claims of other Persons other than the lien of the Collateral Agent and the ABL
Collateral Agent and there are no outstanding warrants, options or other rights
to purchase, or shareholder, voting trust or similar agreements outstanding
with respect to, or property that is convertible into, or that requires the
issuance or sale of, any Pledged Equity Interests;

 

(iii)                  without limiting the
generality of Section 4.1(a)(vii), no consent of any Person including any
other general or limited partner, any other member of a limited liability
company, any other shareholder or any other trust beneficiary is necessary or
desirable in connection with the creation, perfection or First Priority or
Second Priority status, in accordance with the Intercreditor Agreement, of the
security interest of the Collateral Agent in any Pledged Equity Interests or
the exercise by the Collateral Agent of the voting or other rights provided for
in this Agreement or the exercise of remedies in respect thereof;

 

(iv)                  none of the Pledged LLC
Interests nor Pledged Partnership Interests are or represent interests in
issuers that: (A) are registered as investment companies or (B) are
dealt in or traded on securities exchanges or markets; and

 

(v)                   all of the Pledged LLC
Interests and Pledged Partnership Interests are or represent interests in
issuers that have opted to be treated as securities under the uniform
commercial code of any jurisdiction.

 

(b)           Covenants
and Agreements.  Each Grantor hereby
covenants and agrees that:

 

 

(i)                    it shall comply in all
material respects with all of its obligations under any partnership agreement
or limited liability company agreement relating to Pledged Partnership
Interests or Pledged LLC Interests and shall, except prior to the occurrence
and during the continuance of an Event of Default, to the extent the relevant
Grantor in the exercise of its reasonable business judgment otherwise
elects,  enforce all of its rights with
respect to any Investment Related Property; and

 

(ii)                   each Grantor consents to the
grant by each other Grantor of a security interest in all Investment Related
Property to the Collateral Agent and, without limiting the foregoing, consents
to the transfer of any Pledged Partnership Interest and any Pledged LLC Interest
to the Collateral Agent or its nominee following an Event of Default and to the
substitution of the Collateral Agent or its nominee as a partner in any
partnership or as a member in any limited liability company with all the rights
and powers related thereto.

 

4.4.3       Pledged Debt

 

(a)           Representations
and Warranties.  Each Grantor hereby
represents and warrants, on the Closing Date and each Credit Date, that
Schedule 4.4 (as such schedule may be amended or supplemented from time to time
in accordance with the terms set forth herein) sets forth under the heading “Pledged
Debt” all of the Pledged Debt owned by any Grantor and, to the knowledge of
such Grantor, all of such Pledged Debt has been duly authorized, authenticated
or issued, and delivered and, to such Grantor’s knowledge, is the legal, valid
and binding obligation of the issuers thereof and is not in default (other than
with respect to issuers that are not Affiliates of any Grantor) and constitutes
all of the issued and outstanding inter-company Indebtedness;

 

4.4.4       Investment Accounts

 

(a)                                  Representations and Warranties.
Each Grantor hereby represents and warrants, on the Closing Date and each
Credit Date, that:

 

(i)                    Schedule 4.4 hereto (as such
schedule may be amended or supplemented from time to time) sets forth under the
headings “Securities Accounts” and “Commodities Accounts,” respectively, all of
the Securities Accounts and Commodities Accounts in which each Grantor has an
interest.  Each Grantor is the sole
entitlement holder of each such Securities Account and Commodity Account, and
such Grantor has not consented to, and is not otherwise aware of, any Person
(other than the ABL Collateral Agent) having “control” (within the meanings of
Sections 8-106 and 9-106 of the UCC) over, or any other interest in, any such
Securities Account or Commodity Account or securities or other property
credited thereto;

 

(ii)                   Schedule 4.4 hereto (as such
schedule may be amended or supplemented from time to time) sets forth under the
headings “Deposit Accounts” all of the Deposit Accounts in which each Grantor
has an interest.  Each Grantor is the
sole account holder of each such Deposit Account and such Grantor has not
consented to, and is not otherwise aware of, any Person (other than the ABL
Collateral Agent) having either sole dominion and control (within the meaning
of common law) or “control” (within the meanings of Section 9-104 of the
UCC) over, or any other interest in, any such Deposit Account or any money or
other property deposited therein; and

 

 

(iii)                  Except as otherwise permitted
in Section 4.4.4(c) or as otherwise consented to by the Collateral
Agent, each Grantor has taken all actions necessary or desirable, including
those specified in Section 4.4.4(c), to: (A) establish Collateral Agent’s “control”
(within the meanings of Sections 8-106 and 9-106 of the UCC) over any portion
of the Investment Related Property constituting Certificated Securities,
Uncertificated Securities, Securities Accounts, Securities Entitlements or
Commodities Accounts (each as defined in the UCC); (B) establish the
Collateral Agent’s “control” (within the meaning of Section 9-104 of the
UCC) over all Deposit Accounts; and (C) deliver all Instruments, except as
otherwise permitted by Section 4.4.1(b), to the Collateral Agent.

 

(b)                                 Covenant and Agreement.  Each Grantor hereby covenants and agrees with
the Collateral Agent and each other Secured Party that it shall not close or
terminate any Investment Account unless a successor or replacement account has
been established with the consent of the Collateral Agent with respect to which
successor or replacement account a control agreement has been entered into by
the appropriate Grantor, Collateral Agent and securities intermediary or
depository institution at which such successor or replacement account is to be
maintained in accordance with the provisions of Section 4.4.4(c) (and
except as otherwise provided in Section 4.4.4(c)).

 

(c)                                  Delivery and Control

 

(i)                    With respect to any
Investment Related Property consisting of Securities Accounts or Securities
Entitlements, except for Securities Accounts or Securities Entitlements which
do not exceed $100,000 in the aggregate (such amount inclusive of any amounts
held in any Deposit Accounts that are not subject to control agreements), it shall
cause the securities intermediary maintaining such Securities Account or
Securities Entitlement to enter into an agreement ,in form and substance
satisfactory to the Collateral Agent, pursuant to which it shall agree to
comply with the Collateral Agent’s “entitlement orders” without further consent
by such Grantor.  With respect to any
Investment Related Property that is a “Deposit Account,” except for Deposit
Accounts which do not exceed $100,000 in the aggregate (such amount inclusive
of any amounts held in any Securities Accounts that are not subject to control
agreements), it shall cause the depositary institution maintaining such account
to enter into an agreement, in form and substance satisfactory to the
Collateral Agent, pursuant to which the Collateral Agent shall have both sole
dominion and control over such Deposit Account (within the meaning of the
common law) and “control” (within the meaning of Section 9-104 of the UCC)
over such Deposit Account.  Each Grantor
shall have entered into such control agreement or agreements with respect to: (A) any
Securities Accounts, Securities Entitlements or Deposit Accounts that exist on
the Credit Date, as of or prior to the Credit Date, and (B) any Securities
Accounts, Securities Entitlements or Deposit Accounts that are created or
acquired after the Credit Date, as of or prior to the deposit or transfer of
any such Securities Entitlements or funds, whether constituting moneys or
investments, into such Securities Accounts or Deposit Accounts; except that with
respect to any (A) Securities Accounts or Securities Entitlements that
exist on the Closing Date, such Grantor shall have entered into such control
agreements no later than sixty (60) days after such Closing Date and (B) Deposit
Accounts that exist on the Closing Date, such Grantor shall have entered into
such control agreements no later than the Closing Date; and

 

 

(ii)           in addition to the foregoing, if any issuer of any
Investment Related Property is located in a jurisdiction outside of the United
States, each Grantor shall take such additional actions, including, without
limitation, causing the issuer to register the pledge on its books and records
or making such filings or recordings, in each case as may be necessary or
advisable,  under the laws of such issuer’s
jurisdiction to insure the validity, perfection and priority of the security
interest of the Collateral Agent. Upon the occurrence of an Event of Default,
the Collateral Agent shall have the right, without notice to any Grantor, to
transfer all or any portion of the Investment Related Property to its name or
the name of its nominee or agent.  In
addition, upon the occurrence and during the continuation of an Event of
Default, the Collateral Agent shall have the right at any time, without notice
to any Grantor, to exchange any certificates or instruments representing any
Investment Related Property for certificates or instruments of smaller or
larger denominations.

 

4.5                               Intellectual Property.

 

(a)                                  Representations and Warranties.  Except as disclosed in Schedule 4.5(H) (as
such schedule may be amended or supplemented from time to time), each Grantor
hereby represents and warrants, on the Closing Date and on each Credit Date,
that:

 

(i)                    Schedule 4.5 (as such
schedule may be amended or supplemented from time to time) sets forth a true
and complete list of (A) all United States, state and foreign
registrations of and applications for Patents, Trademarks (including all
Internet domain names), and Copyrights owned by each Grantor and (B) all
Patent Licenses, Trademark Licenses, Trade Secret Licenses and Copyright
Licenses material to the business of such Grantor;

 

(ii)                   it is the sole and exclusive
owner of the entire right, title, and interest in and to all Intellectual
Property listed on Schedule 4.5 (as such schedule may be amended or
supplemented from time to time), and owns or has the valid right to use all
other material Intellectual Property used in or necessary to conduct its
business, and all Intellectual Property Collateral is free and clear of all
Liens, claims, encumbrances and licenses, except for Permitted Liens and the
licenses set forth on Schedule 4.5(B), (D), (F) and (G) (as each may
be amended or supplemented from time to time);

 

(iii)                  all Intellectual Property
Collateral listed on Schedule 4.5 and all other Intellectual Property
Collateral that is material to the conduct of such Grantor’s business, is
subsisting and has not been adjudged invalid or unenforceable, in whole or in
part, and each Grantor has performed all acts and has paid all renewal,
maintenance, and other fees and taxes required to maintain each and every
registration and application of Copyrights, Patents and Trademarks listed on
Schedule 4.5 in full force and effect;

 

(iv)                  all registrations for
Intellectual Property Collateral and all other Intellectual Property Collateral
that is material to the Grantor’s business is valid and enforceable (except as
set forth in Section 4.5(b)(i)); no holding, decision, or judgment has
been rendered in any action or proceeding before any court or administrative
authority challenging the validity of, such Grantor’s right to register, or
such Grantor’s rights to own or use, any such material Intellectual Property
Collateral and no such action or proceeding is pending or, to the best of such Grantor’s
knowledge, threatened, except for such actions or proceedings that could not
reasonably be expected to have a Material Adverse Effect;

 

 

(v)                   all registrations and
applications for Copyright Collateral, Patent Collateral and Trademark
Collateral are standing in the name of each Grantor, and none of the Trademark
Collateral, Patent Collateral, Copyright Collateral or Trade Secret Collateral
has been licensed by any Grantor to any Affiliate or third party, except as
disclosed in Schedule 4.5(B), (D), (F), or (G) (as each may be amended or
supplemented from time to time) and pursuant to non-exclusive licenses entered
into in the ordinary course of business;

 

(vi)                  each Grantor has been using
appropriate statutory notice of registration in connection with its use of
registered Trademarks, proper marking practices in connection with the use of
Patents, and appropriate notice of copyright in connection with the publication
of Copyrights that are, in each case, material to the business of such Grantor;

 

(vii)                 each Grantor maintains
standards of quality in the manufacture, distribution, and sale of all products
sold, and in the provision of all services rendered, under or in connection
with all Trademark Collateral that is material to the business of such Grantor
and has taken all action necessary to insure that all licensees of the
Trademark Collateral owned by such Grantor maintains such standards of quality
adequate at minimum to prevent any of the Trademark Collateral from becoming
invalid or unenforceable;

 

(viii)                the conduct of the business of
Grantor as currently conducted does not and will not infringe upon, violate,
misappropriate or dilute any intellectual property of any third party which
infringement, violation, misappropriation or dilution could reasonably be
expected to have a Material Adverse Effect; no claim is pending or threatened
that the use of any Intellectual Property owned or used by Grantor (or any of
its respective licensees) violates the rights of any third party, except for
claims that could not reasonably be expected to have a Material Adverse Effect;

 

(ix)                   to the best of each Grantor’s
knowledge, no third party is infringing upon or otherwise violating any rights
in any Intellectual Property owned or used by such Grantor, where such infringement
or violation could reasonably be expected to have a Material Adverse Effect;
and

 

(x)                    no settlements or consents,
covenants not to sue, nonassertion assurances, or releases have been entered
into by any Grantor or to which any Grantor is bound that materially and
adversely affects any Grantor’s rights to own or use any Intellectual Property
that is material to the business of such Grantor.

 

(b)                                 Covenants and Agreements.  Each Grantor hereby covenants and agrees as
follows:

 

(i)                    it shall not do any act or
omit to do any act whereby any of the Intellectual Property which is material
to the business of any Grantor may lapse, or become abandoned, dedicated to the
public or unenforceable, or which would adversely affect the validity, grant or
enforceability of the security interest granted therein;

 

(ii)                   it shall not, with respect to
any Trademarks which are material to the business of any Grantor, cease the use
of any of such Trademarks or fail to maintain the level of the quality of
products sold and services rendered under any of such

 

 

Trademark at a level at least
substantially consistent with the quality of such products and services as of
the date hereof, and each Grantor shall use commercially reasonable efforts to
insure that licensees of such Trademarks use such consistent standards of
quality;

 

(iii)                  it shall not apply to register
any Copyright in the United States Copyright Office without the prior written
notice to the Collateral Agent, and the provision of details sufficient for the
Collateral Agent to record its security interest in the United States Copyright
Office;

 

(iv)                  it shall promptly notify the
Collateral Agent if it knows or has reason to know that any item of the
Intellectual Property that is material to the business of any Grantor may
become (A) abandoned or dedicated to the public or placed in the public
domain, (B) invalid or unenforceable, or (C) subject to any adverse
determination or development (including the institution of proceedings) in any
action or proceeding in the United States Patent and Trademark Office, the
United States Copyright Office, any state registry, any foreign counterpart of
the foregoing, or any court;

 

(v)                   it shall take all reasonable
steps in the United States Patent and Trademark Office, the United States
Copyright Office, any state registry or any foreign counterpart of the
foregoing, to pursue all applications and maintain all registrations of each
Trademark, Patent, and Copyright owned by any Grantor and material to its
business which is now or shall become included in the Intellectual Property
Collateral;

 

(vi)                  in the event that any
Intellectual Property owned by or exclusively licensed to any Grantor is
infringed, misappropriated, or diluted by a third party, such Grantor shall
promptly take all actions such Grantor determines is necessary or advisable in
its reasonable business judgment to stop such infringement,
misappropriation,  or dilution and
protect its rights in such Intellectual Property including, but not limited to,
the initiation of a suit for injunctive relief and to recover damages;

 

(vii)                 it shall within ten (10) Business
days after the end of each Fiscal Quarter report to the Collateral Agent (A) the
filing of any application to register any Intellectual Property Collateral with
the United States Patent and Trademark Office, the United States Copyright
Office, or any state registry or foreign counterpart of the foregoing (whether
such application is filed by such Grantor or through any agent, employee,
licensee, or designee thereof during such Fiscal Quarter), and (B) the
registration of any Intellectual Property Collateral by any such office, in
each case by executing and delivering to the Collateral Agent a completed
Pledge Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto;

 

(viii)                it shall, promptly upon the
reasonable request of the Collateral Agent, execute and deliver to the
Collateral Agent any document required to acknowledge, confirm, register,
record, or perfect the Collateral Agent’s interest in any and all parts of the
Intellectual Property Collateral, whether now owned or hereafter acquired;

 

 

(ix)                   except with the prior written
consent of the Collateral Agent or as permitted under the Credit Agreement or
the ABL Credit Agreement, each Grantor (i) shall not execute, and there
will not be any filings with respect to a Lien on file in any public office,
any financing statement or other document or instruments, except financing
statements or other documents or instruments filed or to be filed in favor of
the Collateral Agent or in connection with any other Permitted Lien and (ii) shall
not sell, assign, transfer, grant any option, or create or suffer to exist any
Lien upon or with respect to the Intellectual Property Collateral, except for
the Lien created by and under this Agreement, the ABL Security Agreement or the
other Credit Documents;

 

(x)                    it shall hereafter use
commercially reasonable efforts so as not to permit the inclusion in any
contract to which it hereafter becomes a party of any provision that could
reasonably be expected to materially impair or prevent the creation of a
security interest in, or the assignment of, such Grantor’s rights and interests
in any Intellectual Property acquired under such contracts, except for
non-exclusive licenses entered into in the ordinary course of business which
restrict only the assignment of such license;

 

(xi)                   it shall take all steps
reasonably necessary to protect the secrecy of all Trade Secrets, including,
without limitation, entering into confidentiality agreements with employees and
labeling and restricting access to confidential information and documents; and

 

(xii)                  it shall use proper statutory
notice in connection with its use of any of the Intellectual Property that is
material to its business.

 

4.6                               Commercial Tort Claims.

 

(a)           Representations and Warranties.  Each Grantor hereby represents and warrants,
on the Closing Date and on each Credit Date, that Schedule 4.6 (as such
schedule may be amended or supplemented from time to time) sets forth all known
Commercial Tort Claims of each Grantor in excess of $250,000 individually or
$500,000 in the aggregate; and

 

(b)           Covenants and Agreements.  Each Grantor hereby covenants and agrees that
with respect to any known Commercial Tort Claim in excess of $250,000
individually or $500,000 in the aggregate hereafter arising it shall deliver to
the Collateral Agent a completed Pledge Supplement, substantially in the form
of Exhibit A attached hereto, together with all Supplements to Schedules
thereto, identifying such new Commercial Tort Claims.

 

SECTION 5.   FURTHER ASSURANCES; ADDITIONAL GRANTORS.

 

5.1                               Further
Assurances.

 

(a)           Each
Grantor agrees that from time to time, at the expense of such Grantor, that it
shall promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that the Collateral
Agent may reasonably request, in order to create and/or maintain the validity,
perfection or priority of and protect any security interest granted hereby or
to enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of
the foregoing, each Grantor shall:

 

 

(i)                    file such financing or
continuation statements, or amendments thereto, and execute and deliver such
other agreements, instruments, endorsements, powers of attorney or notices, as
may be necessary or desirable, or as the Collateral Agent may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby;

 

(ii)                   take all actions necessary to
ensure the recordation of appropriate evidence of the liens and security
interest granted hereunder in the Intellectual Property with any intellectual
property registry in which said Intellectual Property is registered or in which
an application for registration is pending including, without limitation, the
United States Patent and Trademark Office, the United States Copyright Office,
the various Secretaries of State, and the foreign counterparts on any of the
foregoing;

 

(iii)                  at any reasonable time, upon
request by the Collateral Agent, allow inspection of the Collateral by the
Collateral Agent, or persons designated by the Collateral Agent; and

 

(iv)                  at the Collateral Agent’s
request, appear in and defend any action or proceeding that may affect such
Grantor’s title to or the Collateral Agent’s security interest in all or any
part of the Collateral.

 

(b)           Each
Grantor hereby authorizes the Collateral Agent to file a Record or Records,
including, without limitation, financing or continuation statements, and amendments
thereto, in any jurisdictions and with any filing offices as the Collateral
Agent may determine, in its sole discretion, are necessary or advisable to
perfect the security interest granted to the Collateral Agent herein.  Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner
as the Collateral Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to the Collateral Agent herein, including, without
limitation, describing such property as “all assets” or “all personal property,
whether now owned or hereafter acquired.” 
Each Grantor shall furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent
may reasonably request, all in reasonable detail.

 

(c)           Each
Grantor hereby authorizes the Collateral Agent to modify this Agreement after
obtaining such Grantor’s approval of or signature to such modification by
amending Schedule 4.5 (as such schedule may be amended or supplemented from
time to time) to include reference to any right, title or interest in any
existing Intellectual Property or any Intellectual Property acquired or
developed by any Grantor after the execution hereof or to delete any reference
to any right, title or interest in any Intellectual Property in which any
Grantor no longer has or claims any right, title or interest.

 

5.2                               Additional
Grantors.  From time
to time subsequent to the date hereof, additional Persons may become parties
hereto as additional Grantors (each, an “Additional Grantor”), by executing a
Pledge Supplement in the form attached hereto as Exhibit A and a
Counterpart Agreement in accordance with the Credit Agreement.  Upon delivery of any such Pledge Supplement
to the Collateral Agent, notice of which is hereby waived by Grantors, each
Additional Grantor shall be a Grantor and shall be as fully a party hereto as
if Additional Grantor were an original signatory hereto.  Each Grantor expressly agrees that its
obligations arising

 

 

hereunder
shall not be affected or diminished by the addition or release of any other
Grantor hereunder, nor by any election of Collateral Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder.  This Agreement shall be fully effective as to
any Grantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Grantor hereunder.

 

SECTION 6.   COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.

 

6.1                               Power
of Attorney.  Each Grantor hereby irrevocably
appoints the Collateral Agent (such appointment being coupled with an interest)
as such Grantor’s attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of such Grantor, the Collateral Agent or
otherwise, from time to time in the Collateral Agent’s discretion to take any
action and to execute any instrument that the Collateral Agent may deem
reasonably necessary or advisable to allow the Collateral Agent to undertake
any action required to be undertaken by any Grantor hereunder and not so
undertaken, and otherwise to accomplish the purposes of this Agreement,
including, without limitation, the following:

 

(a)           upon the
occurrence and during the continuance of any Event of Default, to obtain and
adjust insurance required to be maintained by such Grantor or paid to the
Collateral Agent pursuant to the Credit Agreement;

 

(b)           upon the
occurrence and during the continuance of any Event of Default, to ask for,
demand, collect, sue for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of the
Collateral;

 

(c)           upon the
occurrence and during the continuance of any Event of Default, to receive,
endorse and collect any drafts or other instruments, documents and chattel
paper in connection with clause (b) above;

 

(d)           upon the
occurrence and during the continuance of any Event of Default, to file any
claims or take any action or institute any proceedings that the Collateral
Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Collateral Agent with
respect to any of the Collateral;

 

(e)           to prepare
and file any UCC financing statements against such Grantor as debtor;

 

(f)            to
prepare, sign, and file for recordation in any intellectual property registry,
appropriate evidence of the lien and security interest granted herein in the
Intellectual Property in the name of such Grantor as debtor;

 

(g)           upon the
occurrence and during the continuance of any Event of Default, to take or cause
to be taken all actions necessary to perform or comply or cause performance or
compliance with the terms of this Agreement, including, without limitation,
access to pay or discharge Taxes and all penalties and interest related thereto
or Liens (other than Permitted Liens) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the Collateral Agent in its
sole discretion, any such payments made by the Collateral Agent to become
obligations of such Grantor to the Collateral Agent, due and payable
immediately without demand; and

 

 

(h)           upon the
occurrence and during the continuance of any Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and to do, at the
Collateral Agent’s option and such Grantor’s expense, at any time or from time
to time, all acts and things that the Collateral Agent deems reasonably
necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent’s security interest therein in order to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.

 

6.2                               No Duty
on the Part of Collateral Agent or Secured Parties.  The powers conferred on the Collateral Agent
hereunder are solely to protect the interests of the Secured Parties in the
Collateral and shall not impose any duty upon the Collateral Agent or any
Secured Party to exercise any such powers. 
The Collateral Agent and the Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

 

SECTION 7.   REMEDIES.

 

7.1                               Generally.

 

(a)                                  If any Event of Default shall have occurred and be
continuing, the Collateral Agent may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it at law or in equity, all the rights and remedies of the
Collateral Agent on default under the UCC (whether or not the UCC applies to
the affected Collateral) to collect, enforce or satisfy any Secured Obligations
then owing, whether by acceleration or otherwise, and also may pursue any of
the following separately, successively or simultaneously:

 

(i)                    require any Grantor to, and
each Grantor hereby agrees that it shall at its expense and promptly upon
request of the Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it available to the
Collateral Agent at a place to be designated by the Collateral Agent that is
reasonably convenient to both parties;

 

(ii)                   enter onto the property where
any Collateral is located and take possession thereof with or without judicial
process;

 

(iii)                  prior to the disposition of
the Collateral, store, process, repair or recondition the Collateral or
otherwise prepare the Collateral for disposition in any manner to the extent
the Collateral Agent deems appropriate; and

 

(iv)                  without notice except as
specified below or under the UCC, sell, assign, lease, license (on an exclusive
or nonexclusive basis) or otherwise dispose of the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as the Collateral Agent may deem commercially reasonable.

 

 

(b)           The
Collateral Agent or any Secured Party may be the purchaser of any or all of the
Collateral at any public or private (to the extent to the portion of the
Collateral being privately sold is of a kind that is customarily sold on a recognized
market or the subject of widely distributed standard price quotations) sale in
accordance with the UCC and the Collateral Agent, as collateral agent for and
representative of the Secured Parties, shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such sale made in accordance with the
UCC, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by the Collateral Agent at such
sale.  Each purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable 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.  Each
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days notice to such Grantor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification.  The
Collateral Agent shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given.  The
Collateral 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 Grantor agrees that it
would not be commercially unreasonable for the Collateral Agent to dispose of
the Collateral or any portion thereof by using Internet sites that provide for
the auction of assets of the types included in the Collateral or that have the
reasonable capability of doing so, or that match buyers and sellers of
assets.  Each Grantor hereby waives any
claims against the Collateral Agent arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale, even if
the Collateral Agent accepts the first offer received and does not offer such
Collateral to more than one offeree.  If
the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantors shall be liable for
the deficiency and the fees of any attorneys employed by the Collateral Agent
to collect such deficiency.  Each Grantor
further agrees that a breach of any of the covenants contained in this Section will
cause irreparable injury to the Collateral Agent, that the Collateral Agent has
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no default has occurred giving rise to the
Secured Obligations becoming due and payable prior to their stated maturities
or that relate to non-waivable provisions of applicable law.  Nothing in this Section shall in any way
alter the rights of the Collateral Agent hereunder.

 

(c)           The
Collateral Agent may sell the Collateral without giving any warranties as to
the Collateral.  The Collateral Agent may
specifically disclaim or modify any warranties of title or the like.  This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

 

(d)           The
Collateral Agent shall have no obligation to marshal any of the Collateral.

 

7.2                               Application
of Proceeds.  Except as
provided in the Intercreditor Agreement, all proceeds received by the
Collateral Agent in respect of any sale, any collection from, or other
realization upon all or any part of the Collateral shall be applied in full or
in part by the Collateral Agent against, the Secured Obligations in the
following order of priority:  first, to
the payment of all costs and expenses of such sale, collection or other
realization, including reasonable

 

 

compensation
to the Collateral Agent and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by the Collateral Agent in connection
therewith, and all amounts for which the Collateral Agent is entitled to
indemnification hereunder (in its capacity as the Collateral Agent and not as a
Lender) and all advances made by the Collateral Agent hereunder for the account
of the applicable Grantor, and to the payment of all costs and expenses paid or
incurred by the Collateral Agent in connection with the exercise of any right
or remedy hereunder or under the Credit Agreement, all in accordance with the
terms hereof or thereof; second, to pay interest on and then principal of any
portion of the Term Loans that Administrative Agent may have advance on behalf
of any Lender for which Administrative Agent has not then been reimbursed by
such Lender or Company; third, to the extent of any excess of such proceeds, to
the payment of all other Secured Obligations for the ratable benefit of the
Lenders; and fourth, to the extent of any excess of such proceeds, to the
payment to or upon the order of such Grantor or to whosoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may
direct.

 

7.3                               Sales
on Credit.  If
Collateral Agent sells any of the Collateral on credit, the Secured Obligations
will be credited only with payments actually made by purchaser and received by
Collateral Agent and applied to indebtedness of the purchaser.  In the event the purchaser fails to pay for
the Collateral, Collateral Agent may resell the Collateral and the Secured Obligations
shall be credited with proceeds of the sale.

 

7.4                               Deposit Accounts.

 

If any Event of Default shall have occurred
and be continuing, the Collateral Agent may apply the balance from any Deposit
Account or instruct the bank at which any Deposit Account is maintained to pay
the balance of any Deposit Account to or for the benefit of the Collateral
Agent.

 

7.5                               Investment Related Property.

 

Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any
sale of all or any part of the Investment Related Property conducted without
prior registration or qualification of such Investment Related Property under
the Securities Act and/or such state securities laws, to limit purchasers to
those who will agree, among other things, to acquire the Investment Related
Property for their own account, for investment and not with a view to the
distribution or resale thereof.  Each
Grantor acknowledges that any such private sale may be at prices and on terms
less favorable 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,
each Grantor agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Collateral Agent shall
have no obligation to engage in public sales and no obligation to delay the
sale of any Investment Related 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, or should, agree to so register it.  If the Collateral Agent determines to
exercise its right to sell any or all of the Investment Related Property, upon
written request, each Grantor shall and shall cause each issuer of any Pledged
Stock to be sold hereunder, each partnership and each limited liability company
from time to time to furnish to the Collateral Agent all such information as
the Collateral Agent may request in order to determine the number and nature of
interest, shares or other instruments included in the Investment Related Property
which may be sold by the Collateral Agent in exempt transactions

 

 

under the Securities Act and
the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.

 

7.6                               Intellectual Property.

 

(a)                                  Anything contained herein to the contrary notwithstanding,
upon the occurrence and during the continuation of an Event of Default:

 

(i)                    the Collateral Agent shall
have the right (but not the obligation) to bring suit or otherwise commence any
action or proceeding in the name of any Grantor, the Collateral Agent or
otherwise, in the Collateral Agent’s sole discretion, to enforce any
Intellectual Property Collateral, in which event such Grantor shall, at the
request of the Collateral Agent, do any and all lawful acts and execute any and
all documents required by the Collateral Agent in aid of such enforcement and
such Grantor shall promptly, upon demand, reimburse and indemnify the
Collateral Agent as provided in Section 10 hereof in connection with the
exercise of its rights under this Section, and, to the extent that the
Collateral Agent shall elect not to bring suit to enforce any Intellectual
Property Collateral as provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement or other violation of any of such Grantor’s rights in
the Intellectual Property Collateral by others and for that purpose agrees to
diligently maintain any action, suit or proceeding against any Person so
infringing as shall be necessary to prevent such infringement or violation to
the extent required under Section 4.5(b);

 

(ii)                   upon written demand from the
Collateral Agent, each Grantor shall grant to the Collateral Agent any
licenses, assignments or rights in any of such Grantor’s right, title and
interest in and to any Intellectual Property Collateral and shall execute and
deliver to the Collateral Agent such documents as are necessary or appropriate
for the Grantor or the Collateral Agent to continue, directly or indirectly, to
produce, advertise and sell the products and services sold or delivered by such
Grantor prior to such Event of Default;

 

(iii)                  within five (5) Business
Days after written notice from the Collateral Agent, each Grantor shall use
reasonable best efforts to continue, directly or indirectly, to produce,
advertise and sell the products and services sold or delivered by such Grantor
under or in connection with the Trademarks and Trademark Licenses; and

 

(iv)                  the Collateral Agent shall
have the right to notify, or require each Grantor to notify, any obligors with
respect to amounts due or to become due to such Grantor in respect of the
Intellectual Property Collateral, of the existence of the security interest
created herein, to direct such obligors to make payment of all such amounts
directly to the Collateral Agent, and, upon such notification and at the
expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done; including

 

(1)                                  all amounts and proceeds (including checks and other
instruments) received by Grantor in respect of amounts due to such Grantor in
respect of the Intellectual Property Collateral or any portion thereof shall be
received in trust for the benefit of the Collateral Agent hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over or
delivered to the Collateral Agent in

 

 

the same form as so received (with
any necessary endorsement) to be held as cash Collateral and applied as
provided by Section 7.7 hereof; and

 

(2)                                  Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor with respect
thereto or allow any credit or discount thereon.

 

(b)           If (i) an
Event of Default shall have occurred and, by reason of cure, waiver,
modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to the Collateral Agent of any rights, title and
interests in and to the Intellectual Property Collateral shall have been
previously made and shall have become absolute and effective, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, the Collateral Agent shall promptly execute and
deliver to such Grantor, at such Grantor’s sole cost and expense, such
assignments or other transfer as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to the
Collateral Agent as aforesaid, subject to any disposition thereof that may have
been made by the Collateral Agent; provided, after giving effect to such
reassignment, the Collateral Agent’s security interest granted pursuant hereto,
as well as all other rights and remedies of the Collateral Agent granted
hereunder, shall continue to be in full force and effect; and provided
further, the rights, title and interests so reassigned shall be free and clear
of any other Liens granted by or on behalf of the Collateral Agent and the
Secured Parties.

 

(c)           Solely for
the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Section 7 and at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Collateral Agent, to the extent it has the right to do so, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to such Grantor), subject, in the case of Trademarks, to
sufficient rights to quality control and inspection in favor of such Grantor to
avoid the risk of invalidation of said Trademarks, to use, operate under,
license, or sublicense any Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located.

 

7.7                               Cash
Proceeds.  In addition
to the rights of the Collateral Agent specified in Section 4.3 with
respect to payments of Receivables, upon the occurrence and during the
continuation of an Event of Default and (except with regard to an Event of
Default pursuant to Section 8.1(f) or 8.1(g) of the Credit
Agreement) notice from the Collateral Agent of its intent to exercise its
rights under this Section 7.7, all proceeds of any Collateral received by
any Grantor consisting of cash, checks and other non-cash items (collectively, “Cash
Proceeds”) shall be held by such Grantor in trust for the
Collateral Agent, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, unless otherwise provided pursuant to Section 4.4(a)(ii),
be turned over to the Collateral Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Collateral Agent, if required) and held
by the Collateral Agent in the Collateral Account.  Any Cash Proceeds received by the Collateral
Agent (whether from a Grantor or otherwise): 
if an Event of Default shall have occurred and be continuing, may, in
the sole discretion of the Collateral Agent, (A) be held by the Collateral
Agent for the ratable benefit of the Secured Parties, as collateral security
for the Secured Obligations (whether matured or unmatured) and/or (B) then
or at any time thereafter shall be applied by the Collateral Agent against the
Secured Obligations in accordance with the terms hereof (except as otherwise
provided in the Intercreditor Agreement).

 

 

SECTION 8.   COLLATERAL AGENT.

 

The Collateral Agent has been appointed to act as Collateral
Agent hereunder by Lenders and, by their acceptance of the benefits hereof, the
other Secured Parties. The Collateral Agent shall be obligated, and 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 any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement, the Intercreditor Agreement and the
Credit Agreement.  In furtherance of the
foregoing provisions of this Section, each Secured Party, by its acceptance of
the benefits hereof, agrees that it shall have no right individually to realize
upon any of the Collateral hereunder, it being understood and agreed by such
Secured Party that all rights and remedies hereunder may be exercised solely by
the Collateral Agent for the benefit of Secured Parties in accordance with the
terms of this Section and the Intercreditor Agreement.  Collateral Agent may resign at any time by
giving thirty (30) days’ prior written notice thereof to Lenders and the
Grantors.  Upon any such notice of
resignation, Requisite Lenders shall have the right, upon five (5) Business
Days’ notice to the Collateral Agent, to appoint a successor Collateral
Agent.  If no successor shall have been
so appointed by the Requisite Lenders and shall have accepted such appointment
within thirty (30) days after the resigning Collateral Agent gives notice of
its resignation, then the resigning Collateral Agent may, on behalf of the
Secured Parties, appoint a successor Collateral Agent.  Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, that successor
Collateral Agent shall be deemed the Collateral Agent under this
Agreement.  Upon the acceptance of any
appointment as Administrative Agent under the terms of the Credit Agreement by
a successor Administrative Agent, that successor Administrative Agent shall
thereby also be deemed the successor Collateral Agent and such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent under
this Agreement, and the retiring Collateral Agent under this Agreement shall
promptly (i) transfer to such successor Collateral Agent all sums,
Securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Collateral Agent under this
Agreement, and (ii) execute and deliver to such successor Collateral Agent
such amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Collateral Agent of the security interests created hereunder, whereupon such
retiring Collateral Agent shall be discharged from its duties and obligations
under this Agreement.  After any retiring
Collateral Agent’s resignation hereunder as the Collateral Agent, the
provisions of this Agreement and the Credit Agreement (including Section 9
thereof) shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was the Collateral Agent hereunder.

 

Grantors jointly and severally agree to indemnify
the Collateral Agent and the other Secured Parties from and against any and all
claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from the Collateral
Agent’s or Secured Party’s gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.  The obligations of Grantors in this Section 8
shall survive the termination of this Agreement and the discharge of the
Secured Obligations.

 

SECTION 9.   CONTINUING SECURITY INTEREST; TRANSFER OF
LOANS.

 

This Agreement shall create a continuing security
interest in the Collateral and shall remain in full force and effect until the
payment in full of all Secured Obligations and the 

 

 

cancellation or termination
of the Commitments, be binding upon each Grantor, its successors and assigns,
and inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent and its successors,
transferees and assigns.  Without limiting
the generality of the foregoing, but subject to the terms of the Credit
Agreement, any Lender may assign or otherwise transfer any Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lenders herein or otherwise.  Upon the payment in full of all Secured
Obligations and the cancellation or termination of the Commitments, the
security interest granted hereby shall terminate hereunder and of record and
all rights to the Collateral shall revert to Grantors.  Upon any such termination the Collateral
Agent shall, at Grantors’ expense, execute and deliver to Grantors such
documents as Grantors shall reasonably request to evidence such
termination.  In addition, the Collateral
Agent shall, at Grantors’ expense, execute and deliver to Grantors any
documents or instruments necessary to release any Lien in accordance with Section 9.8
of the Credit Agreement encumbering any item of Collateral that is the subject
of a sale or other disposition of assets permitted under the Credit Agreement.

 

SECTION 10.   STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.

 

The powers conferred on the Collateral Agent
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  Except for the exercise of reasonable care in
the custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Collateral Agent shall have no duty as
to any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.  The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property.  Neither the Collateral Agent nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or otherwise.  If any Grantor fails to perform any agreement
contained herein, the Collateral Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by each Grantor under Section 10.2
of the Credit Agreement.

 

SECTION 11.   MISCELLANEOUS.

 

Any notice required or permitted to be given under
this Agreement shall be given in accordance with Section 10.1 of the
Credit Agreement.  No failure or delay on
the part of the Collateral Agent in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other power, right or privilege.  All
rights, powers and remedies existing under this Agreement and the other Credit
Documents are cumulative and shall be in addition to and independent of all
rights, powers and remedies existing by virtue of any statute or rule of
law or in any of the other Credit Document. 
Any forbearance or failure to exercise, and any delay in exercising, any
right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the
further exercise of any such right, power or remedy.  In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired 

 

 

thereby.  All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or
would otherwise be within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
condition exists.  This Agreement shall
be binding upon and inure to the benefit of the Collateral Agent and Grantors
and their respective successors and assigns. 
No Grantor shall, without the prior written consent of the Collateral
Agent given in accordance with the Credit Agreement, assign any right, duty or
obligation hereunder.  This Agreement,
the Intercreditor Agreement and the other Credit Documents embody the entire
agreement and understanding between Grantors and the Collateral Agent and
supersede all prior agreements and understandings between such parties relating
to the subject matter hereof and thereof. 
This Agreement may be executed in one or more counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.

 

THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES
THEREOF.

 

[Signatures follow on next page]

 

 

IN WITNESS WHEREOF, each
Grantor and the Collateral Agent have caused this Agreement to be duly executed
and delivered by their respective officers thereunto duly authorized as of the
date first written above.

 

 

	
   

  	
  DOUGLAS DYNAMICS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS FINANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FISHER,
  LLC,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Signature Page to Term Pledge and Security Agreement]

 

 

	
   

  	
  CREDIT
  SUISSE, CAYMAN ISLANDS BRANCH,

  
	
   

  	
  as
  Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Signature Page to Term Pledge and Security Agreement]

 

 

SCHEDULE 4.1

TO PLEDGE AND SECURITY AGREEMENT

 

GENERAL
INFORMATION

 

(A)          Full Legal Name, Type of Organization, Jurisdiction
of Organization, Chief Executive Office/Sole Place of Business (or Residence if
Grantor is a Natural Person) and Organizational Identification Number of each
Grantor:

 

	
  Full Legal

  Name

  	
   

  	
  Type of

  Organization

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Chief Executive

  Office/Sole Place of

  Business (or

  Residence if Grantor

  is a Natural Person)

  	
   

  	
  Organization I.D.#

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(B)           Other Names (including any Trade-Name or Fictitious
Business Name) under which each Grantor has conducted business for the past
five (5) years:

 

	
  Full Legal Name

  	
   

  	
  Trade Name or Fictitious Business Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

(C)           Changes in Name, Jurisdiction of Organization, Chief
Executive Office or Sole Place of Business (or Principal Residence if Grantor
is a Natural Person) and Corporate Structure within past five (5) years:

 

	
  Name of Grantor

  	
   

  	
  Date of Change

  	
   

  	
  Description of Change

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

(D)          Agreements pursuant to which
any Grantor is found as debtor within past five (5) years:

 

	
  Name of Grantor

  	
   

  	
  Description of Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

(E)           Financing Statements:

 

	
  Name of Grantor

  	
   

  	
  Filing Jurisdiction(s)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

1

 

SCHEDULE 4.2

TO PLEDGE AND SECURITY AGREEMENT

 

	
  Name of Grantor

  	
   

  	
  Location of Equipment and Inventory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

1

 

SCHEDULE 4.4

TO PLEDGE AND SECURITY AGREEMENT

 

INVESTMENT
RELATED PROPERTY

 

(A)          Pledged Stock:

 

	
  Grantor

  	
   

  	
  Stock

  Issuer

  	
   

  	
  Class of

  Stock

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Stock

  Certificate

  No.

  	
   

  	
  Par

  Value

  	
   

  	
  No. of

  Pledged

  Stock

  	
   

  	
  % of

  Outstanding

  Stock of the

  Stock Issuer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Pledged
LLC Interests:

 

	
  Grantor

  	
   

  	
  Limited

  Liability

  Company

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Certificate

  No. (if any)

  	
   

  	
  No. of

  Pledged Units

  	
   

  	
  % of

  Outstanding

  LLC

  Interests of

  the Limited

  Liability

  Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Pledged
Partnership Interests:

 

	
  Grantor

  	
   

  	
  Partnership

  	
   

  	
  Type of

  Partnership

  Interests (e.g.,

  general or

  limited)

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Certificate No.

  (if any)

  	
   

  	
  % of

  Outstanding

  Partnership

  Interests of the

  Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Pledged
Trust Interests:

 

	
  Grantor

  	
   

  	
  Trust

  	
   

  	
  Class of

  Trust

  Interests

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Certificate No.

  (if any)

  	
   

  	
  % of Outstanding

  Trust Interests of

  the Trust

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

Pledged Debt:

 

	
  Grantor

  	
   

  	
  Issuer

  	
   

  	
  Original Principal

  Amount

  	
   

  	
  Outstanding

  Principal

  Balance

  	
   

  	
  Issue Date

  	
   

  	
  Maturity Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Securities
Account:

 

	
  Grantor

  	
   

  	
  Share of

  Securities

  Intermediary

  	
   

  	
  Account Number

  	
   

  	
  Account Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Commodities
Accounts:

 

	
  Grantor

  	
   

  	
  Name of

  Commodities

  Intermediary

  	
   

  	
  Account Number

  	
   

  	
  Account Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Deposit
Accounts:

 

	
  Grantor

  	
   

  	
  Name of

  Depositary Bank

  	
   

  	
  Account Number

  	
   

  	
  Account Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(B)

 

	
  Name of Grantor

  	
   

  	
  Date of Acquisition

  	
   

  	
  Description of Acquisition

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

SCHEDULE 4.5

TO PLEDGE AND SECURITY AGREEMENT

 

Name of Grantor

 

INTELLECTUAL
PROPERTY

 

(A)          Copyrights

 

(B)           Copyright
Licenses

 

(C)           Patents

 

(D)          Patent Licenses

 

(E)           Trademarks

 

(F)           Trademark
Licenses

 

(G)           Trade Secret
Licenses

 

(H)          Intellectual
Property Exceptions

 

1

 

SCHEDULE 4.6

TO PLEDGE AND SECURITY AGREEMENT

 

COMMERCIAL
TORT CLAIMS

 

Douglas Dynamics Holdings, Inc.

 

Douglas Dynamics, L.L.C.

 

Douglas Dynamics Finance Company

 

Fisher, LLC

 

1

 

EXHIBIT A

TO PLEDGE AND SECURITY AGREEMENT

 

PLEDGE
SUPPLEMENT

 

This PLEDGE
SUPPLEMENT, dated [mm/dd/yy], is delivered by [NAME OF GRANTOR] a [NAME OF STATE OF ORGANIZATION] [Corporation] (the “Grantor”)
pursuant to the Term Pledge and Security Agreement, dated as of May 21, 2007 (as it may be from
time to time amended, restated, modified or supplemented, the “Security
Agreement”), among Douglas Dynamics Holdings, Inc., a Delaware
corporation, Douglas Dynamics, L.L.C., a Delaware limited liability company,
Fisher, LLC, a Delaware limited liability company and Douglas Dynamics Finance
Company, the other Grantors named therein, and Credit Suisse, Cayman Islands
Branch, as the Collateral Agent. 
Capitalized terms used herein not otherwise defined herein shall have
the meanings ascribed thereto in the Security Agreement.

 

Grantor hereby confirms the grant to the Collateral
Agent set forth in the Security Agreement of, and does hereby grant to the
Collateral Agent, a security interest in all of Grantor’s right, title and
interest in and to all Collateral to secure the Secured Obligations, in each
case whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located.  Grantor represents and warrants that the
attached Supplements to Schedules accurately and completely set forth all
additional information required pursuant to the Security Agreement and hereby
agrees that such Supplements to Schedules shall constitute part of the
Schedules to the Security Agreement, and agrees to be bound by all of the
provisions of the Security Agreement applicable to any “Grantor”.

 

IN WITNESS WHEREOF, Grantor has
caused this Pledge Supplement to be duly executed and delivered by its duly
authorized officer as of [mm/dd/yy].

 

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

1

 

SUPPLEMENT TO SCHEDULE 4.1

TO PLEDGE AND SECURITY AGREEMENT

 

Additional
Information:

 

(A)          Full Legal Name, Type of Organization, Jurisdiction
of Organization, Chief Executive Office/Sole Place of Business (or Residence if
Grantor is a Natural Person) and Organizational Identification Number of each
Grantor:

 

	
  Full Legal Name

  	
   

  	
  Type of Organization

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Chief Executive

  Office/Sole Place of

  Business (or

  Residence if Grantor

  is a Natural Person)

  	
   

  	
  Organization I.D.#

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(B)           Other Names (including any Trade-Name or Fictitious
Business Name) under which each Grantor has conducted business for the past
five (5) years:

 

	
  Full Legal Name

  	
   

  	
  Trade Name or Fictitious Business Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

(C)           Changes in Name, Jurisdiction of Organization, Chief
Executive Office or Sole Place of Business (or Principal Residence if Grantor
is a Natural Person) and Corporate Structure within past five (5) years:

 

	
  Name of Grantor

  	
   

  	
  Date of Change

  	
   

  	
  Description of Change

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

(D)          Agreements pursuant to which
any Grantor is found as debtor within past five (5) years:

 

	
  Name of Grantor

  	
   

  	
  Description of Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2

 

(E)           Financing Statements:

 

	
  Name of Grantor

  	
   

  	
  Filing Jurisdiction(s)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

3

 

SUPPLEMENT TO SCHEDULE 4.2

TO PLEDGE AND SECURITY AGREEMENT

 

Additional
Information:

 

	
  Name of Grantor

  	
   

  	
  Location of Equipment and Inventory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

4

 

SUPPLEMENT TO SCHEDULE 4.4

TO PLEDGE AND SECURITY AGREEMENT

 

Additional Information:

 

(A)

 

Pledged Stock:

 

Pledged Partnership Interests:

 

Pledged LLC Interests:

 

Pledged Trust Interests:

 

Pledged Debt:

 

Securities Account:

 

Commodities Accounts:

 

Deposit Accounts:

 

(B)

 

	
  Name
  of Grantor

  	
   

  	
  Date of Acquisition

  	
   

  	
  Description of Acquisition

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

5

 

SUPPLEMENT TO SCHEDULE 4.5

TO PLEDGE AND SECURITY AGREEMENT

 

Additional Information:

 

	
  (A)

  	
  Copyrights

  
	
   

  	
   

  
	
  (B)

  	
  Copyright
  Licenses

  
	
   

  	
   

  
	
  (C)

  	
  Patents

  
	
   

  	
   

  
	
  (D)

  	
  Patent
  Licenses

  
	
   

  	
   

  
	
  (E)

  	
  Trademarks

  
	
   

  	
   

  
	
  (F)

  	
  Trademark
  Licenses

  
	
   

  	
   

  
	
  (G)

  	
  Trade
  Secret Licenses

  
	
   

  	
   

  
	
  (H)

  	
  Intellectual
  Property Exceptions

  

 

6

 

SUPPLEMENT TO SCHEDULE 4.6

TO PLEDGE AND SECURITY AGREEMENT

 

COMMERCIAL
TORT CLAIMS

 

Douglas Dynamics Holdings, Inc.

 

Douglas Dynamics, L.L.C.

 

Douglas Dynamics Finance Company

 

Fisher, LLC

 

7

 

EXHIBIT B

TO PLEDGE AND SECURITY AGREEMENT

 

UNCERTIFICATED
SECURITIES CONTROL AGREEMENT

 

This Uncertificated Securities Control Agreement
dated as of
                  ,
200     among
                                
(the “Pledgor”), Credit Suisse,
Cayman Islands Branch, as collateral agent for the Secured Parties (as defined
in the Term Pledge and Security Agreement dated as of May 21, 2007, among
the Pledgor, the other Grantors party thereto and the Collateral Agent (the “Security Agreement”)) and the Secured
Parties (as defined in the ABL Pledge and Security Agreement, dated as of May 21,
2007, among the Debtor, the other Grantors party thereto and the Collateral
Agent), (the “Collateral Agent”)
and
                        ,
a
                corporation
(the “Issuer”).  Capitalized terms used but not defined herein
shall have the meaning assigned in the Security Agreement.  All references herein to the “UCC” shall mean the Uniform Commercial Code
as in effect in the State of New York.

 

Section 1.  Registered Ownership of Shares.  The Issuer hereby confirms and agrees that as
of the date hereof the Pledgor is the registered owner of
                    
shares of the Issuer’s [common] stock (the “Pledged
Shares”) and the Issuer shall not change the registered owner of the
Pledged Shares without the prior written consent of the Collateral Agent or in
connection with a disposition permitted by the Credit Agreement.

 

Section 2.  Instructions.  If at any time the Issuer shall receive
instructions originated by the Collateral Agent relating to the Pledged Shares,
the Issuer shall comply with such instructions without further consent by the
Pledgor or any other person.

 

Section 3.  Additional Representations and Warranties of
the Issuer.  The Issuer
hereby represents and warrants to the Collateral Agent:

 

(a)  It has not entered into, and until the
termination of this agreement will not enter into, any agreement with any other
person relating the Pledged Shares pursuant to which it has agreed to comply
with instructions issued by such other person; and

 

(b)  It has not entered into, and until the
termination of this agreement will not enter into, any agreement with the
Pledgor or the Collateral Agent purporting to limit or condition the obligation
of the Issuer to comply with Instructions as set forth in Section 2
hereof.

 

(c)  Except for the claims and interest of the
Collateral Agent and of the Pledgor in the Pledged Shares, the Issuer does not
know of any claim to, or interest in, the Pledged Shares.  If any person asserts any lien, encumbrance
or adverse claim (including any writ, garnishment, judgment, warrant of
attachment, execution or similar process) against the Pledged Shares, the
Issuer will promptly notify the Collateral Agent and the Pledgor thereof.

 

(d)  This Uncertificated Securities Control
Agreement is the valid and legally binding obligation of the Issuer.

 

Section 4.  Choice of Law.  This Agreement shall be governed by the laws
of the State of New York.

 

1

 

Section 5.   Conflict with Other Agreements.  In the event of any conflict between this
Agreement (or any portion thereof) and any other agreement now existing or
hereafter entered into, the terms of this Agreement shall prevail.  No amendment or modification of this Agreement
or waiver of any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by all of the parties hereto.

 

Section 6.  Voting Rights.  Until such time as the Collateral Agent shall
otherwise instruct the Issuer in writing, the Pledgor shall have the right to
vote the Pledged Shares.

 

Section 7.  Successors; Assignment.  The terms of this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who
obtain such rights solely by operation of law. 
The Collateral Agent may assign its rights hereunder only with the
express written consent of the Issuer and by sending written notice of such
assignment to the Pledgor.

 

Section 8.   Indemnification
of Issuer.  The Pledgor and
the Collateral Agent hereby agree that (a) the Issuer is released from any
and all liabilities to the Pledgor and the Collateral Agent arising from the
terms of this Agreement and the compliance of the Issuer with the terms hereof,
except to the extent that such liabilities arise from the Issuer’s gross
negligence or willful misconduct and (b) the Pledgor, its successors and
assigns shall at all times indemnify and save harmless the Issuer from and
against any and all claims, actions and suits of others arising out of the
terms of this Agreement or the compliance of the Issuer with the terms hereof,
except to the extent that such arises from the Issuer’s gross negligence or
willful misconduct, and from and against any and all liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising by reason of the same, until the termination of this
Agreement.

 

Section 9.  Notices.  Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or
registered United States mail, return receipt requested, postage prepaid,
addressed to the party at the address set forth below.

 

	
  Pledgor:

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  
	
   

  	
   

  
	
  Collateral
  Agent:

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  
	
   

  	
   

  
	
  Issuer:

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  

 

Any party may change its address for notices in the
manner set forth above.

 

Section 10.  Termination.  The obligations of the Issuer to the Collateral
Agent pursuant to this Control Agreement shall continue in effect until the
security interests of the Collateral Agent in the Pledged Shares have been
terminated pursuant to the terms of the Security Agreement and the Collateral
Agent has notified the Issuer of such termination in writing.  The 

 

2

 

Collateral Agent agrees to
provide Notice of Termination in substantially the form of Exhibit A
hereto to the Issuer upon the request of the Pledgor on or after the
termination of the Collateral Agent’s security interest in the Pledged Shares
pursuant to the terms of the Security Agreement.  The termination of this Control Agreement
shall not terminate the Pledged Shares or alter the obligations of the Issuer
to the Pledgor pursuant to any other agreement with respect to the Pledged
Shares.

 

Section 11.  Counterparts.  This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.

 

 

	
   

  	
  [NAME
  OF PLEDGOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                ]

  
	
   

  	
  as
  Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ISSUER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

3

 

Exhibit A

 

[Letterhead of Collateral Agent]

 

[Date]

 

[Name
and Address of Issuer]

 

Attention:

 

Re:  Termination
of Control Agreement

 

You are hereby notified that the Uncertificated Securities
Control Agreement between you, [the Pledgor] and the undersigned (a copy of
which is attached) is terminated and you have no further obligations to the
undersigned pursuant to such Agreement. 
Notwithstanding any previous instructions to you, you are hereby
instructed to accept all future directions with respect to Pledged Shares (as
defined in the Uncertificated Control Agreement) from [the Pledgor].  This notice terminates any obligations you
may have to the undersigned with respect to the Pledged Shares, however nothing
contained in this notice shall alter any obligations which you may otherwise
owe to [the Pledgor] pursuant to any other agreement.

 

You are instructed to deliver a copy of this notice
by facsimile transmission to [insert name of Pledgor].

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                 ],

  
	
   

  	
  as
  Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

1

 

EXHIBIT J

 

MORTGAGE

 

J-1

 

MORTGAGE,
ASSIGNMENT OF LEASES,

RENTS
AND PROFITS AND SECURITY AGREEMENT

 

 

DOUGLAS
DYNAMICS, L.L.C.

 

Mortgagor

 

to

 

CREDIT
SUISSE, CAYMAN ISLANDS BRANCH

in its capacity as
Collateral Agent for the Secured Parties

Eleven Madison
Avenue

New York, New York  10010

 

Mortgagee

 

 

DATED:  As of May 21, 2007

 

 

Premises located
in:

City of Rockland,
County of Knox, State of Maine

 

Record and Return
to:

Skadden Arps Slate
Meagher & Flom LLP

300 South Grand
Avenue

Los Angeles,
California 90071

Attn:  Eric Lee, Esq.

 

 

INDEX

 

	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Payment
  of Obligations and Performance of Covenants and Agreements

  	
  6

  
	
  2.

  	
  Title
  to Property

  	
  6

  
	
  3.

  	
  Intercreditor
  Agreement

  	
  7

  
	
  4.

  	
  Future
  Advances

  	
  7

  
	
  5.

  	
  Insurance

  	
  7

  
	
  6.

  	
  Impositions

  	
  7

  
	
  7.

  	
  Maintenance
  and Alterations

  	
  8

  
	
  8.

  	
  Leasing

  	
  8

  
	
  9.

  	
  Recording,
  Filing and Other Fees

  	
  9

  
	
  10.

  	
  Taxes Imposed on Mortgagee and the Secured Parties

  	
  9

  
	
  11.

  	
  Compliance with Laws, etc.

  	
  9

  
	
  12.

  	
  Inspection

  	
  9

  
	
  13.

  	
  Certificate of Mortgagor

  	
  9

  
	
  14.

  	
  Condemnation

  	
  10

  
	
  15.

  	
  Restoration

  	
  10

  
	
  16.

  	
  Default

  	
  11

  
	
  17.

  	
  Mortgagee’s Right to Perform Mortgagor’s Covenants

  	
  11

  
	
  18.

  	
  Contemporaneous Mortgages

  	
  11

  
	
  19.

  	
  Appointment of Receiver

  	
  11

  
	
  20.

  	
  Intentionally Deleted

  	
  12

  
	
  21.

  	
  Judicial Foreclosure

  	
  12

  
	
  22.

  	
  Sale in Parcels

  	
  12

  
	
  23.

  	
  Notice Upon Acceleration

  	
  13

  
	
  24.

  	
  Possession of Premises

  	
  13

  
	
  25.

  	
  Expenses of Mortgagee and/or the Secured Parties

  	
  13

  
	
  26.

  	
  Mortgagor’s Waivers

  	
  13

  
	
  27.

  	
  Partial Foreclosure

  	
  14

  
	
  28.

  	
  No Waiver; Rights Cumulative

  	
  14

  
	
  29.

  	
  Attorneys’ Fees

  	
  14

  
	
  30.

  	
  Interest After Maturity

  	
  15

  
	
  31.

  	
  No Credit for Taxes

  	
  15

  
	
  32.

  	
  Liens

  	
  15

  
	
  33.

  	
  Change in Taxation

  	
  15

  
	
  34.

  	
  Assignment of Leases and Rents

  	
  16

  
	
  35.

  	
  Security Agreement

  	
  17

  
	
  36.

  	
  No Release

  	
  17

  
	
  37.

  	
  Notices

  	
  18

  
	
  38.

  	
  Severability

  	
  18

  
	
  39.

  	
  Intentionally Deleted

  	
  18

  
	
  40.

  	
  Indemnification Against Liabilities

  	
  18

  
	
  41.

  	
  No Oral Changes

  	
  19

  
	
  42.

  	
  Governing Law

  	
  19

  

 

 

	
  43.

  	
  Construction

  	
  19

  
	
  44.

  	
  Headings

  	
  19

  
	
  45.

  	
  After Acquired Property

  	
  19

  
	
  46.

  	
  Further Assurances

  	
  20

  
	
  47.

  	
  Definitions

  	
  20

  
	
  48.

  	
  Successors and Assigns

  	
  20

  
	
  49.

  	
  Credit Agreement

  	
  20

  
	
  50.

  	
  State Specific Provisions

  	
  20

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Description
  of the Land

  	
   

  
	
  Exhibit B

  	
  Existing
  Liens

  	
   

  

 

3

 

MORTGAGE, ASSIGNMENT OF
LEASES, RENTS AND PROFITS

AND SECURITY AGREEMENT

 

THIS MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND PROFITS AND
SECURITY AGREEMENT
(this “Mortgage”) made as of this
21st day of May, 2007 by DOUGLAS DYNAMICS, L.L.C., a Delaware limited liability
company having an office at 7777 North 73rd Street, Milwaukee, Wisconsin  53223 (the “Mortgagor”),
to CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
a bank organized under the laws of Switzerland, acting through its Cayman
Islands Branch (“Credit Suisse”),
as collateral agent (in such capacity, and together with its successors and
assigns, the “Mortgagee”), having
an office at Eleven Madison Avenue, New York, New York 10010, for the Secured
Parties (as such term and other capitalized terms used but not otherwise
defined herein are defined in the Credit Agreement, defined below).

 

W I T N E S S E T H:

 

WHEREAS, Mortgagor is the owner of the fee interest in those certain parcels
of land lying and being situated in the City of Rockland, Knox County, Maine,
as more particularly described in Exhibit A attached hereto;

 

WHEREAS, Mortgagor, as Borrower, Fisher, LLC, a Delaware limited liability
company (“Fisher”), Douglas Dynamics Finance
Company, a Delaware corporation (“DD Finance”),
and Douglas Dynamics Holdings, Inc., a Delaware corporation (“Holdings”), as Guarantors, the banks and financial
institutions listed on the signature pages thereof (together with their
respective successors and assigns, each individually referred to herein as a “Lender”
and collectively as “Lenders”), Credit Suisse, Cayman
Islands Branch, as sole bookrunner, sole lead arranger, syndication agent,
documentation agent, administrative agent for the Lenders (“Term Administrative Agent”), and as collateral agent for the
Lenders, have entered into that certain Credit and Guaranty Agreement, dated as
of May 21, 2007 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”), pursuant to which Lenders have agreed to make, and
Mortgagee has agreed to administer, certain credit facilities in an aggregate
amount not to exceed $85,000,000, which extensions of credit shall be used for
the purposes permitted under the Credit Agreement, upon the terms and
conditions contained in the Credit Agreement; and

 

WHEREAS, Mortgagor has agreed to execute and deliver to Mortgagee this
Mortgage in order to secure Mortgagor’s performance of Mortgagor’s obligations
under the Credit Agreement and under any of the other Credit Documents;

 

NOW, THEREFORE, for and in consideration of the mutual covenants
herein contained and other good and valuable consideration, including Mortgagee’s
entering into the Credit Agreement, the receipt and legal sufficiency of which
are hereby expressly acknowledged by all parties, to secure the full and
complete payment and performance of the Obligations, including Mortgagor’s
performance of Mortgagor’s obligations pursuant to the Credit Agreement, this
Mortgage and the other Credit Documents, Mortgagor and Mortgagee hereby agree
as follows:

 

 

Mortgagor
does hereby grant, pledge, mortgage, warrant, sell, transfer, assign, and
convey unto Mortgagee subject only to the Permitted Liens and Existing Liens
(defined below), all of its right, title and interest in the following
(collectively, the “Property”):

 

A.            All that certain land located in the
City of Rockland, Knox County, Maine,  and
more particularly described in Exhibit A annexed hereto and made a part
hereof (collectively, the “Land”).

 

B.            All the buildings, structures and
improvements, now or at any time hereafter erected on the Land or any part
thereof (collectively, the “Buildings”).

 

C.            All machinery, apparatus, equipment,
personal property and fixtures of every kind and nature whatsoever now or
hereafter located in, on or about any one or more of the Buildings or upon the
Land, or attached to or used or useable in connection with the operation or
maintenance of the Land or any one or more of the Buildings, or any part
thereof, and now owned or hereafter acquired (collectively, the “Building Equipment”; the Land, the
Buildings and the Building Equipment being hereafter sometimes collectively
referred to as the “Premises”).

 

D.            All right, title and interest of
Mortgagor, whether now owned or hereafter acquired, in and to any opened or
proposed avenues, streets, roads, public places, sidewalks, alleys, strips or
gores of land, in front of or adjoining the Land or any one or more of the
Buildings and all easements, tenements, hereditament, appurtenances, rights and
rights of way, public or private, pertaining or belonging to the Land or any
one or more of the Buildings.

 

E.             All insurance proceeds and all
awards and payments, subject to applicable provisions of this Mortgage,
including interest thereon, and the right to receive the same, which may be
made in respect of all or any part of any of the Premises or any estate or
interest therein or appurtenant thereto, as a result of damage to or destruction
of all or any part of any of the Premises, the exercise of the right of
condemnation or eminent domain, the closing of, or the alteration of the grade
of, any street on or adjoining the Land, or any other injury to or decrease in
the value of all or any part of any of the Premises.

 

F.             All right, title and interest of
Mortgagor in and to any and all present and future Leases (as defined in Paragraph
47) of all or any part of the Premises, and in and to the rents, issues and
profits payable thereunder and cash or securities deposited thereunder as
lessees’ security deposits.

 

G.            All franchises, permits, licenses
and rights therein respecting the use, occupation and operation of the Premises
or the activities conducted thereon or therein.

 

H.            All right, title and interest of
Mortgagor in and to any minerals, oil or gas located on, under or appurtenant
to the Land.

 

I.              All right, title and interest of
Mortgagor in and to any tax refunds with respect to the Premises.

 

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J.             To the extent assignable, all of
Mortgagor’s interest in and to all agreements, contracts, certificates,
instruments and other documents, now or hereafter entered into, pertaining to
the construction, operation or management of the Premises and all right, title
and interest of Mortgagor therein (collectively, the “Contracts”).

 

K.            All of Mortgagor’s interest in and
to all easements, rights, licenses, privileges and appurtenances including,
without limitation, development and air rights now or hereafter belonging or in
any way appertaining to the Land.

 

L.             All of the estate and rights of
Mortgagor now or hereafter acquired in and to land lying in streets, roads,
ways and alleys, open or proposed, adjoining or contiguous to the Land.

 

M.           The rents, issues and profits of any
of the foregoing.

 

TO
HAVE AND TO HOLD the Property unto Mortgagee, its successors and assigns,
forever.  Provided, that if (i) Mortgagor
shall perform all obligations hereunder and (ii) the Obligations
(including, without limitation, certain credit facilities in an aggregate
amount not to exceed $170,000,000, all as further described in the Credit
Agreement, and any “Future Advances” and “Contingent Obligations” referred to
in Section 50 of this Mortgage) are paid in full, the Commitments are
cancelled or terminated and all outstanding Letters of Credit are cancelled or
have expired, then this Mortgage shall be released without warranty, at the
cost and request of Mortgagor.

 

AND
MORTGAGOR COVENANTS, REPRESENTS AND WARRANTS TO AND FOR THE BENEFIT OF
MORTGAGEE AND THE SECURED PARTIES AS FOLLOWS:

 

1.             Payment of Obligations and Performance of Covenants
and Agreements         Mortgagor shall pay or perform the
Obligations when due in accordance with the provisions of the Credit Agreement,
this Mortgage, and the other Credit Documents and perform the covenants and
agreements of Mortgagor set forth in the Credit Documents.

 

2.             Title to Property         Mortgagor
represents and warrants that (a) it owns good and marketable fee simple
title to the Premises, (b) it has the good and unrestricted right, full
power and lawful authority to make this Mortgage in accordance with the terms
hereof, (c) Mortgagor has obtained any and all consents and approvals
necessary or required for the making of this Mortgage, and the making of this
Mortgage will not violate any contract or agreement to which Mortgagor is a
party or by which the Property is bound, and (d) the Premises is free of
all liens, encumbrances, adverse claims and other defects of title whatsoever
except those items listed on Exhibit B annexed hereto and made a part
hereof (collectively, the “Existing Liens”)
and Permitted Liens.  Mortgagor does
hereby and shall forever warrant and defend its title to and interest in the
Property and the validity and priority of the lien of this Mortgage,
subject to the Existing Liens and the Permitted Liens, to Mortgagee and the
Secured Parties, their respective successors and assigns, against all claims
and demands whatsoever of any Person or

 

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Persons.  As of the date hereof, there are no defenses
or offsets to this Mortgage or to the Obligations.

 

3.             Intercreditor Agreement         Notwithstanding
anything herein to the contrary, and regardless of the priority of recordation
of this Mortgage, the lien and security interests granted to the Mortgagee
pursuant to this Mortgage and the exercise of any right or remedy by such
Mortgagee hereunder are subject to the provisions of that certain Intercreditor
Agreement, dated as of May 21, 2007 (the “Intercreditor
Agreement”), by and among Mortgagor, Fisher, DD Finance, Holdings,
Mortgagee, Term Administrative Agent, Credit Suisse, in its capacity as
administrative agent under the ABL Loan Documents (as defined therein), and
JPMorgan Chase Bank, N.A., in its capacity as collateral agent under the ABL
Loan Documents (together with its successors and assigns from time to time in
such capacity, the “ABL Collateral Agent”). 
In the event of any conflict between the terms of the Intercreditor
Agreement and this Mortgage, the terms of the Intercreditor Agreement shall
govern.

 

4.             Future Advances         Without
limiting the generality of any other provision hereof, or the terms and
provisions of the Credit Agreement, the Obligations shall include, without
limitation:  (a) all existing
indebtedness of Mortgagor to Mortgagee and/or any of the Secured Parties
evidenced by any of the Credit Documents; (b) all future advances that may
subsequently be made by Mortgagee and/or the Lenders as provided by any of the
Credit Documents; and (c) all other indebtedness, if any, of Mortgagor to
Mortgagee and/or any of the Secured Parties now due or to become due or
hereafter contracted pursuant to any of the Credit Documents; provided
that the maximum principal amount of all existing indebtedness, future
advances, readvances of sums repaid and all other indebtedness secured hereby
at any one time shall not exceed the total sum of $170,000,000 (exclusive of
interest thereon, attorneys’ fees and costs, taxes, insurance premiums and all
other obligations hereunder).

 

5.             Insurance

 

(a)        Mortgagor shall maintain in full force
and effect with respect to the Premises the insurance as required by Section 5.5
of the Credit Agreement.

 

(b)        In the event of a foreclosure of this
Mortgage or other action or proceeding taken by Mortgagee pursuant to this
Mortgage, the purchaser of the Premises shall succeed to all of the rights of
Mortgagor, including any right to unearned premiums, in and to all policies of
insurance which Mortgagor is required to maintain under Paragraph 5(a) and
to all proceeds of such insurance.

 

6.          Impositions

 

(a)        Mortgagor shall pay, not later than the
final delinquency date thereof, all real estate taxes, personal property taxes,
assessments, water rates and sewer rents, license fees, all charges which may
be imposed for the use of vaults, chutes, areas and other space beyond the lot
line and abutting the public sidewalks in front of or adjoining the Land, and
any other amounts which could be or become a lien upon or against the

 

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Property
or any part thereof (collectively, the “Impositions”);
provided, no such Imposition need be paid if it is being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted, so long as adequate reserve or other appropriate provision, as shall
be required in conformity with GAAP shall have been made therefor.  Notwithstanding the foregoing, Mortgagor
shall promptly, and in any event on demand, pay such contested Imposition if at
any time all or any part of the Property shall be in danger of being
foreclosed, sold, forfeited, or otherwise lost or if such contest shall be
discontinued.  During the continuance of
any Event of Default, upon demand by Mortgagee, Mortgagor will pay the whole of
any assessment (an “Assessment”)
for local improvements which may be payable in installments, notwithstanding
that such installments may not be due and payable at the time of such demand.

 

(b)        Mortgagor shall, upon request of
Mortgagee, deliver to Mortgagee, within twenty (20) days after the final
delinquency date thereof of any Imposition or Assessment, receipts evidencing
such payment or other proof of payment satisfactory to Mortgagee.

 

7.          Maintenance
and Alterations         Mortgagor will maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear
excepted, the Premises and from time to time will make or cause to made all
appropriate repairs, renewals and replacements thereof.

 

8.          Leasing  Mortgagor
represents that there are no Leases now in effect.  Mortgagor shall not enter into any Lease of
all or any part of any of the Premises without in each instance obtaining
Mortgagee’s prior written consent thereto, which consent shall not be
unreasonably withheld, conditioned or delayed. 
Mortgagor shall deliver to Mortgagee a duplicate original of each Lease
promptly after the execution thereof.  At
the option of Mortgagee, each Lease, and all renewals, replacements,
extensions, and modifications thereof, and all rights of the tenant thereunder,
shall be subject and subordinate to this Mortgage, and to each and every
advance made or thereafter made hereunder or under the other Credit Documents
and to all renewals, additions, amendments, supplements, modifications,
consolidations, spreaders, replacements, and extensions of this Mortgage and
shall contain provisions obligating the tenants thereunder to attorn to
Mortgagee or any purchaser therefrom if Mortgagee or such purchaser succeeds to
the interest of Mortgagor under such Lease. 
Mortgagor shall fully and promptly perform all of the obligations to be
performed by the lessor under any and all Leases.  Mortgagor shall enforce the performance and
observance of each and every obligation to be performed or observed by the
lessees under such Leases.  Mortgagor
shall give prompt notice to Mortgagee of (a) any notice received by
Mortgagor of any default by the lessor under any Lease, (b) the
commencement of any action or proceeding by any lessee the purpose of which
shall be the cancellation of any Lease or a diminution or abatement of the rent
payable thereunder, (c) any notice of default given by Mortgagor to the
lessee under any Lease, or (d) the interposition by any lessee of any
defense or counterclaim in any action or proceeding brought by Mortgagor
against such lessee; and Mortgagor will cause a copy of any process, pleading
or notice received or served by Mortgagor in reference to any such action,
defense or claim to be promptly delivered to

 

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Mortgagee.  Mortgagor shall hold in trust all security
deposits and advance rent given on account of any Lease, and deposit such
security in a bank or trust company and shall not mingle such funds with other
funds.  Mortgagor shall repay or apply
such funds only in accordance with the provisions of the applicable Leases.

 

9.          Recording,
Filing and Other Fees         Mortgagor shall pay all
recording and filing fees, all recording taxes, and all other costs and
expenses in connection with the preparation, execution and recordation and
other manner of perfection of this Mortgage and any other Credit Documents, and
shall reimburse Mortgagee and each of the Secured Parties on demand for all
costs and expenses of any kind incurred by Mortgagee or any of the Secured
Parties in connection therewith (including, without limitation, reasonable
attorneys’ fees and disbursements). 
Mortgagor will, at any time on request of Mortgagee, execute or cause to
be executed financing statements, continuation statements, or the like, in
respect of any Building Equipment. 
Mortgagor shall pay all filing fees, including fees for filing
continuation statements, in connection with such financing statements.

 

10.        Taxes
Imposed on Mortgagee and the Secured Parties  Mortgagor
shall pay all taxes (except income, inheritance and franchise taxes, taxes on
the receipt of debt service payments, or taxes in lieu of any of the foregoing)
imposed on Mortgagee or any of the Secured Parties by reason of its ownership
of this Mortgage or any of the other Credit Documents.

 

11.        Compliance
with Laws, etc.         Mortgagor shall comply with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including Environmental Laws), noncompliance with which
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

12.        Inspection        
Mortgagee and its authorized representatives shall have the right, at
Mortgagee’s option, at reasonable times during normal business hours and upon
reasonable prior written notice, and as often as may be reasonably requested,
to enter the Premises for the purpose of inspecting the same and any other
Collateral.

 

13.        Certificate
of Mortgagor         Mortgagor, upon request of Mortgagee
or any of the Secured Parties, shall certify to Mortgagee or to such Secured
Party or to any proposed assignee of or participant in this Mortgage, by an
instrument in form reasonably satisfactory to Mortgagee or such Secured Party,
duly acknowledged, the amount of the Obligations then owing, whether any
offsets or defenses exist against payment or performance of all or any portion
of the Obligations and anything else that Mortgagee or such Secured Party might
reasonably request, within ten (10) days if the request is made
personally, or within fifteen (15) days if the request is made by mail.  Mortgagee, Secured Parties and any actual or
proposed assignee of or participant in this Mortgage shall have the right to
rely on such certification.

 

9

 

14.        Condemnation

 

(a)        Mortgagor shall give notice to Mortgagee
upon Mortgagor receiving written notice of the commencement of any action or proceeding
to take all or any part of the Premises by exercise of the right of
condemnation or eminent domain or of any action or proceeding to close or to
alter the grade of any street on or adjoining the Land.  Mortgagee may participate in any such action
or proceeding in the name of Mortgagee or, whenever necessary, in the name of
Mortgagor, and Mortgagor shall deliver to Mortgagee such instruments as
Mortgagee shall request to permit such participation.  Mortgagor shall not settle any such action or
proceeding or agree to accept any award or payment without the prior written
consent of Mortgagee (which consent shall not be unreasonably withheld,
conditioned or delayed), and such award or payment and any interest thereon
(hereinafter collectively called the “Award”)
shall be applied in accordance with Section 2.14(b) and Section 2.15
of the Credit Agreement.

 

(b)        The application of any Award toward
payment of the Obligations shall not be deemed a waiver by Mortgagee or any of
the Secured Parties of its right to receive payment of the balance of the
Obligations in accordance with the provisions of the Credit Documents.  Mortgagee shall have the right, but shall be
under no obligation, to question the amount of the Award, and Mortgagee may
accept the same without prejudice to the rights that Mortgagee may have to
question such amount.  In any such
condemnation or eminent domain action or proceeding Mortgagee may be
represented by attorneys selected by Mortgagee, and all sums paid by Mortgagee
in connection with such action or proceeding (including, without limitation,
reasonable attorneys’ fees to the extent permitted by law) shall, on demand, be
immediately due from Mortgagor to Mortgagee and the same shall be secured by
this Mortgage.

 

(c)        Notwithstanding any taking by
condemnation or eminent domain, closing of, or alteration of the grade of, any
street or other injury to or decrease in value of the Premises by any public or
quasi-public authority or corporation, the unpaid principal portion of the
Advances shall continue to bear interest at the rate payable pursuant to the
applicable Credit Documents until the Award shall have been actually received
by Mortgagee, and any reduction in the Obligations resulting from the
application by Mortgagee of the Award shall be deemed to take effect only on
the date of such receipt.

 

15.        Restoration        
If the Buildings or the Building Equipment shall be damaged or
destroyed, in whole or in part, by fire or other casualty, or by any taking in
condemnation proceedings or the exercise of any right of eminent domain,
Mortgagor shall promptly restore, replace or rebuild the same to as nearly as
possible the value, quality and condition they were in immediately prior to
such fire or other casualty or taking, with such alterations or changes as may
be approved in writing by Mortgagee which approval shall not be unreasonably
withheld or delayed, or apply the amount of any Award or insurance proceeds
received with respect thereto, in each case in accordance with Section 2.14(b) and
Section 2.15 of the Credit Agreement.  Mortgagor shall give prompt notice to
Mortgagee of any damage or destruction to the Buildings or Building Equipment
by fire or other casualty, as well as the initiation of any condemnation or
eminent domain proceeding affecting the same.

 

10

 

16.        Default

 

(a)        Any
Event of Default under the Credit Agreement shall constitute an Event of
Default hereunder and Mortgagee shall have all of the rights of the
Administrative Agent and Collateral Agent under the Credit Agreement and all of
the remedies hereunder.

 

(b)        All
notice and cure periods provided in the Credit Agreement shall run concurrently
with any notice and cure periods provided under applicable law.

 

17.        Mortgagee’s Right to Perform Mortgagor’s Covenants        
If there shall be an Event of Default, Mortgagee may, at its option,
cure such Event of Default, and Mortgagee and its representatives shall have
the right to enter the Premises to do so, and the amounts advanced by, and the
other costs and expenses of, Mortgagee in curing such Event of Default, with
interest from the time of the advances or payments at the Base Rate plus the
Applicable Margin, shall, on demand, be immediately due from Mortgagor to
Mortgagee and shall be secured by this Mortgage.

 

18.        Contemporaneous Mortgages    THIS MORTGAGE
IS MADE CONTEMPORANEOUSLY WITH TWO (2) OTHER MORTGAGES OR DEEDS OF TRUST
OF EVEN DATE HEREWITH (as any of the same may be amended, supplemented,
restated, severed, consolidated, spread, partially released, increased or
otherwise modified from time to time, the “Contemporaneous
Mortgages”) GIVEN TO MORTGAGEE COVERING PROPERTY LOCATED IN THE
STATES OF TENNESSEE AND WISCONSIN.  The
Contemporaneous Mortgages secure the Obligations.  Upon the occurrence of an Event of Default,
Mortgagee may proceed under this Mortgage and/or the Contemporaneous Mortgages
against any of such property and/or the Property in one or more parcels and in
such manner and order as Mortgagee shall elect. 
Mortgagor hereby irrevocably waives and releases, to the extent
permitted by law, whether now or hereafter in force,  any right to have the property and/or the
Property covered by the Contemporaneous Mortgages marshalled upon any
foreclosure of this Mortgage or the Contemporaneous Mortgages.

 

19.        Appointment of Receiver         After the
occurrence and during the continuance of an Event of Default, Mortgagee may
apply for the appointment of a receiver of the Rents (as defined in Paragraph
47), issues, and profits of all or any part of the Property from whatever
source derived and thereupon it is hereby expressly covenanted and agreed that
the court shall forthwith appoint such receiver with the usual powers and
duties of receivers in like cases; and said appointment shall be made by the
court ex parte as a matter of strict right to Mortgagee, without notice to or
demand upon Mortgagor or any Person claiming through or under Mortgagor, and
Mortgagee shall be entitled to the appointment of such receiver as a matter of
right, to the extent not prohibited by applicable law, without consideration of
the value of the Property as security for the amounts due to Mortgagee or the
Secured Parties or the solvency of any Person liable for the payment of such
amounts.  Mortgagor hereby specifically
waives the right to object to the appointment of a receiver as aforesaid and
hereby expressly consents that such appointment shall be made ex parte and
without notice to Mortgagor as an

 

11

 

admitted
equity and as a matter of absolute right to Mortgagee.  In order to maintain and preserve the
Property and to prevent waste and impairment of its security, Mortgagee may, at
its option, advance monies to the appointed receiver and all such sums advanced
shall become secured obligations and shall bear interest from the date of such
advance at the rate of interest specified in Section 2.9 of the
Credit Agreement.

 

20.        Intentionally Deleted

 

21.        Judicial Foreclosure         After the
occurrence and during the continuance of an Event of Default, Mortgagee may institute
an action of foreclosure, or take such other action as the law may allow, at
law or in equity, for the enforcement hereof and realization on the Property or
any other security which is herein or elsewhere provided for, and proceed
thereon to final judgment and execution thereon for the entire principal then
outstanding under the Credit Documents, with interest thereon at the rate
stipulated in the Credit Documents to the date of default and thereafter at the
default interest rate specified in Section 2.9 of the Credit
Agreement together with all other sums secured by this Mortgage, all costs of
suit, including, without limitation, the expenses which are described in Paragraphs
25 and 29, and interest at the default interest rate specified in Section 2.9
of the Credit Agreement on any judgment obtained by Mortgagee from and after
the date of any judicial sale of any of the Property until actual payment.  Upon any sale or sales made hereunder,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee and/or any of the Secured Parties may bid for and acquire any of the
Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting against the Obligations the net
sales price after deducting therefrom the expenses of the sale and the costs of
the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage.  Except as otherwise
provided in the Credit Agreement, the proceeds of such sale shall be applied
first to the payment of the costs and charges of such sale, including, without
limitation, Mortgagee’s attorneys’ fees, (to the extent permitted by law), and
second to the payment of the Obligations, the surplus money, if any, to be paid
to the Person(s) legally entitled thereto (including Mortgagor, to the
extent so entitled, if at all).  Upon the
request of Mortgagee and to the extent not prohibited by applicable law,
Mortgagor shall execute and file with the clerk of the court a legally
sufficient waiver of any statutory waiting period with respect to the execution
of a judgment obtained by Mortgagee in connection with any foreclosure
proceedings.  The obligation of Mortgagor
to so execute and file such waiver shall survive the termination of this
Mortgage.  Following a foreclosure sale,
the sheriff shall deliver to the purchaser the sheriff’s deed (and bill of sale
as to any personalty) conveying the property so sold without any covenant or
warranty, express or implied.

 

22.        Sale in Parcels   In the event of
a foreclosure of this Mortgage or upon any sale under this Mortgage pursuant to
judicial proceedings or otherwise, the Property may be sold in one parcel and
as an entirety or in such parcels, manner or order as Mortgagee in its sole
discretion may select.

 

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23.        Notice Upon Acceleration         Whenever
Mortgagee in this Mortgage is given the option to accelerate the maturity of
all or part of the Obligations upon the occurrence of an Event of Default,
Mortgagee may, to the extent permitted by law, do so without prior notice or
demand to or upon Mortgagor except as otherwise specifically provided herein.

 

24.        Possession of Premises  To the extent
permitted by law, after the occurrence and during the continuance of an Event
of Default, Mortgagee and its agents and any receiver appointed by a court are
authorized to (a) take possession of the Premises, with or without legal
action, and by force if necessary; (b) lease the Premises or make
modifications to or cancel Leases; (c) maintain, repair, alter, and
restore the Premises; (d) with or without taking possession, collect all
Rents and profits payable under all Leases directly from the lessees thereunder
upon notice to each such lessee that an Event of Default exists under this
Mortgage accompanied by a demand on such lessee for the payment to Mortgagee of
all Rents due and to become due under its Lease, and Mortgagor FOR THE BENEFIT
OF MORTGAGEE AND EACH SUCH LESSEE hereby covenants and agrees that the lessee
shall be under no duty to question the accuracy of Mortgagee’s statement of
default and shall unequivocally be authorized to pay said Rents to Mortgagee
without regard to the truth of Mortgagee’s statement of an Event of Default and
notwithstanding notices from Mortgagor disputing the existence of an Event of
Default such that the payment of rent by the lessee to Mortgagee pursuant to
such a demand shall constitute performance in full of the lessee’s obligation
under the Lease for the payment of Rents by the lessee to Mortgagor; and (e) after
deducting all costs of collection and administration expense, apply the net
Rents and profits to the payment of Impositions, insurance premiums and all
other carrying charges (including, without limitation, agents’ compensation and
fees and reasonable costs of counsel to the extent permitted by law, and
receivers) and to the maintenance, repair or restoration of the Premises, or,
except as otherwise provided in the Credit Agreement, on account and in
reduction of the Obligations in such order and amounts as Mortgagee in
Mortgagee’s sole discretion may elect. 
Mortgagee shall be liable to account only for Rents and profits actually
received by Mortgagee.

 

25.        Expenses of Mortgagee and/or the Secured Parties        
All sums (including reasonable attorneys’ fees and disbursements, to
the extent permitted by law) paid by Mortgagee and/or any of the Secured
Parties in connection with any litigation to prosecute or defend the rights and
obligations created by this Mortgage, with interest thereon at the default
interest rate specified in Section 2.9 of the Credit Agreement from
the time of payment by Mortgagee and/or any of the Secured Parties shall, on
demand, be immediately due from Mortgagor to Mortgagee and/or any such Secured
Party and shall be added to and included in the Obligations and shall be
secured by this Mortgage.

 

26.        Mortgagor’s Waivers

 

(a)        Mortgagor,
for itself and its successors and assigns, hereby irrevocably waives and
releases, to the extent permitted by law, whether now or hereafter in force, (i) the
benefit of any and all valuation and appraisement laws, (ii) any right of
redemption whether statutory or otherwise, in respect of the Property, (iii) any
applicable

 

13

 

homestead or dower laws, (iv) all exemption laws
whatsoever and all moratoriums, extensions or stay laws or rules, or orders of
court in the nature of any one or more of them, (v) any right to have any
of the Property marshalled upon foreclosure of this Mortgage, (vi) the
right to interpose any set-off, recoupment, counterclaim or cross-claim in any
litigation in any court with respect to, in connection with, or arising out of
this Mortgage or any of the other Credit Documents unless such set-off,
recoupment, counterclaim or cross-claim could not, by reason of the applicable
Federal or State procedural laws, be interposed, pleaded or alleged in any
other action, and (vii) trial by jury in connection with any litigation
arising out of this Mortgage or any of the other Credit Documents and any right
it may have to claim or recover in any such litigation any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages.

 

(b)        Mortgagee,
for itself and its successors and assigns, hereby irrevocably waives and
releases, to the extent permitted by law, whether now or hereafter in force,
trial by jury in connection with any litigation arising out of this Mortgage or
any of the other Credit Documents.

 

27.        Partial Foreclosure         Mortgagee may
from time to time, if permitted by law, take action to recover any sums,
whether interest, principal or any other sums, required to be paid under this
Mortgage or any other Credit Document as the same become due, without prejudice
to the right of Mortgagee thereafter to bring an action of foreclosure, or any
other action, for an Event of Default by Mortgagor existing when such earlier action
was commenced.  Mortgagee may also
foreclose this Mortgage for any sums due under this Mortgage or any other
Credit Document and the lien of this Mortgage shall continue to secure the
balance of the Obligations due.

 

28.        No Waiver; Rights Cumulative  No failure or
delay on the part of Mortgagee or any of the Secured Parties in the exercise of
any power, right or privilege hereunder or under any other Credit Document
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise
of any such power, right or privilege preclude other or further exercise
thereof or of any other power, right or privilege.  The rights, powers and remedies given to
Mortgagee and each of the Secured Parties hereby are cumulative and shall be in
addition to and independent of all rights, powers and remedies existing by
virtue of any statute or rule of law or in any of the other Credit
Documents.  Any forbearance or failure to
exercise, and any delay in exercising, any right, power or remedy hereunder
shall not impair any such right, power or remedy or be construed to be a waiver
thereof, nor shall it preclude the further exercise of any such right, power or
remedy.

 

29.        Attorneys’ Fees  If this
Mortgage shall be foreclosed, or if any of the Credit Documents is placed in
the hands of an attorney for collection or is collected through any court,
including any bankruptcy court, there shall be included in the computation of
the sums secured hereby, to the extent permitted by law, the amount of a
reasonable fee for the services of the attorney retained by Mortgagee in the
foreclosure action or proceeding, and all disbursements, costs, allowances and
additional allowances provided by law.

 

14

 

30.        Interest After Maturity  The Obligations
secured by this Mortgage shall bear interest from and after maturity, whether
or not resulting from acceleration, at the default interest rate specified in Section 2.9
of the Credit Agreement, but this shall not constitute an extension of time for
payment of the Obligations.

 

31.        No Credit for Taxes         Mortgagor shall
not claim or demand or be entitled to any credit or credits on account of any
of the sums secured hereby by reason of the Impositions assessed against all or
any part of the Property or for any payments made on account thereof.  No deductions shall be made or claimed from
the taxable value of all or any part of the Premises by reason of this
Mortgage.

 

32.        Liens         This Mortgage
is and shall be maintained as a valid first lien on the Property subject only
to any encumbrances created pursuant to the Credit Documents and the Existing
Liens and the Permitted Liens, if any. 
Notwithstanding any provision in the Credit Documents to the contrary,
Mortgagor shall not, directly or indirectly, create or suffer or permit to be
created, or to stand, against the Property or any portion thereof, or against
the Rents, issues and profits therefrom, any lien, charge, mortgage, deed of
trust, adverse claim or other encumbrance (herein collectively referred to as a
“lien”), whether senior or junior
in lien to this Mortgage, other than the lien of (i) this Mortgage and (ii) the
Permitted Liens (including easements, rights-of-way, restrictions,
encroachments, minor defects or irregularities in title and other similar
charges, in each case which do not and will not interfere in any material
respect with the use or value thereof; provided, however, that
Mortgagor shall give Mortgagee at least twenty (20) days prior written notice
of any Permitted Lien described in the parenthetical to clause (ii) above
which is to be created after the date hereof together with a reasonably
detailed description thereof; and provided, further, that nothing
contained in this Paragraph shall require Mortgagor to pay any real estate
taxes or other Impositions prior to the time when same are required to be paid
under this Mortgage.  Mortgagor will keep
and maintain all of the Premises free from all liens of Persons supplying labor
or materials relating to the construction, alteration, modification or repair
of the Premises.  If any such lien shall
be filed against any of the Property, Mortgagor agrees to discharge the same of
record (by payment, bonding or otherwise) within 10 days of notice of the
filing thereof.  No financing statement,
conditional bill of sale or chattel mortgage shall be made or filed against any
Building Equipment without the prior consent of Mortgagee and if at any time
there should be any (with or without the consent of Mortgagee), then upon the
occurrence and during the continuance of an Event of Default, all right, title
and interest of Mortgagor in and to all deposits and payments made thereon are
hereby assigned to Mortgagee.

 

33.        Change in Taxation         In the event of
the enactment of or change in (including, without limitation, a change in
interpretation of) any applicable law (a) deducting or allowing Mortgagor
to deduct from the value of the Property for the purpose of taxation any lien
or security interest thereon, (b) imposing, modifying or deeming
applicable any reserve or special requirement against deposits in or for the
account of, or loans by, or other liabilities of, or other assets held by
Mortgagee or any of the Secured Parties, or (c) subjecting Mortgagee or
any of the Secured Parties to any tax or changing the basis of taxation of
mortgages, deeds of trust, or other liens or debts secured thereby,

 

15

 

or
the manner of collection of such taxes, in each such case, so as to affect this
Mortgage, the Obligations, Mortgagee or any of the Secured Parties, and the
result is to increase the taxes imposed upon or the cost to Mortgagee or any of
the Secured Parties of maintaining the Obligations, or to reduce the amount of
any payments receivable hereunder or under the other Credit Documents, then,
and in any such event, Mortgagor shall, on demand, pay to Mortgagee for the
account of Mortgagee or any of the Secured Parties, as the case may be, such
additional amounts as may be required to compensate for such increased costs or
reduced amounts, provided that if any such payment or reimbursement shall be
unlawful or would constitute usury under applicable law, then Mortgagee may, at
its option, require Mortgagor to make a partial repayment of the Obligations in
an amount equal to the then value of the Premises.

 

34.        Assignment of Leases and Rents        
Mortgagor absolutely and unconditionally assigns to Mortgagee the Rents,
issues and profits of the Premises as further security for the payment of the
Obligations and Mortgagor grants to Mortgagee during the existence of an Event
of Default the right to enter the Premises for the purpose of collecting the
same and to let the Premises, or any part thereof, and, except as otherwise
provided in the Credit Agreement, to apply said Rents, issues and profits,
after payment of all necessary charges and expenses, on account of the
Obligations.  This assignment and grant
shall continue in effect until the payment in full of the Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit.  Mortgagee hereby waives the right to enter
the Premises for the purpose of collecting said Rents, issues and profits, and
Mortgagor shall be entitled to collect, receive and use said Rents, issues and
profits, until the occurrence and during the continuance of and Event of
Default.  During the continuance of any
Event of Default, the right of Mortgagor to collect, receive and use said
Rents, issues and profits, shall be revoked forthwith.  Further, from and after delivery of written
notice of such revocation, constructive possession of the Premises shall be
vested in Mortgagee, and this assignment shall be activated and perfected.  Notwithstanding the foregoing, this
assignment shall also be activated and perfected upon Mortgagee’s exercising,
upon the occurrence and during the continuance of an Event of Default, any of
the following remedies pursuant to this Mortgage:  (i) taking actual possession of the
Premises; (ii) moving or applying for the appointment of a receiver; (iii) filing
or commencing an action to foreclose this Mortgage; or (iv) collecting the
Rents directly from the tenant(s). 
Mortgagor shall, from time to time after request by Mortgagee, execute,
acknowledge and deliver to Mortgagee, in form reasonably satisfactory to
Mortgagee, separate assignments effectuating the foregoing.  Neither Mortgagee nor the Secured Parties
shall be obligated to perform or discharge any obligation or duty to be
performed or discharged by Mortgagor under any Lease or other agreement
affecting all or any part of the Premises, and Mortgagor hereby agrees to
indemnify Mortgagee and the Secured Parties for and hold them harmless from,
any and all liability arising from any such Lease or other agreement or any
assignments thereof, and no assignment of any such Lease or other agreement
shall place the responsibility for the control, care, management or repair of
all or any part of the Premises upon Mortgagee or the Secured Parties, nor make
Mortgagee or the other Secured Parties liable for any negligence in the
management, operation, upkeep, repair or control of all or any part of the
Premises resulting in injury, death or property damage.  In addition, after the occurrence and during
the continuance of

 

16

 

an
Event of Default and following the giving of notice to Mortgagor, Mortgagor
will pay monthly in advance to Mortgagee, or to any receiver appointed to
collect said Rents, issues and profits, the fair and reasonable rental value
for the use and occupancy of the Premises or of such part thereof as may be in
the possession of Mortgagor, and upon default in any such payment will vacate
and surrender the possession thereof to Mortgagee or to such receiver, and in
default thereof may be evicted by summary or other proceedings.

 

35.        Security Agreement         It is the
intention of the parties hereto that this instrument shall constitute a
Security Agreement and a Financing Statement within the meaning of the Uniform
Commercial Code as enacted in the state in which the Land is located with
respect to the personalty and fixtures comprising a part of the Property, and
that a security interest shall attach thereto for the benefit of Mortgagee, as
secured party, to further secure the Obligations.  Mortgagor hereby authorizes Mortgagee to file
financing and continuation statements with respect to such collateral in which
Mortgagor has a mortgageable interest, without the signature of Mortgagor
whenever lawful, and upon request, Mortgagor shall promptly execute financing
and continuation statements in form satisfactory to Mortgagee to further
evidence and secure Mortgagee’s interest in such collateral, and shall pay all
filing fees in connection therewith.  In
the event of the occurrence and during the continuance of an Event of Default,
Mortgagee, pursuant to the applicable provision of the Uniform Commercial Code,
shall have the option of proceeding as to both real and personal property in
accordance with its rights and remedies in respect of the real property, in
which event the default provisions of the Uniform Commercial Code shall not
apply.  The parties agree that in the
event Mortgagee elects to proceed with respect to collateral constituting
personalty or fixtures separately from the real property, without demand,
notice or advertisement whatsoever except that where an applicable statute
requires reasonable notice of sale or the dispositions, the giving of ten (10) days’
notice by Mortgagee to Mortgagor, shall be deemed to be reasonable notice
thereof and Mortgagor waives any other notice with respect thereto.

 

36.        No Release         Neither
Mortgagor nor any other Person now or hereafter obligated for the payment or
performance of all or any portion of the Obligations shall be released from
paying such Obligations and the lien of this Mortgage shall not be affected by
reason of (a) the failure of Mortgagee or any of the Secured Parties to
comply with any request of Mortgagor, or of any other Person so obligated, to
take action to foreclose this Mortgage or otherwise enforce any of the
provisions of this Mortgage or of any of the covenants and agreements of
Mortgagor under the Credit Documents, (b) the release, regardless of
consideration, of the whole or any part of the security held for the
Obligations, (c) the release, regardless of consideration, of the
obligations of any Person or Persons liable for payment or performance of all
or any portion of the Obligations, or (d) any agreement or stipulation
extending the time of payment or modifying the terms of any of the Credit
Documents, and in the event of such agreement or stipulation, Mortgagor and all
such other Persons shall continue to be liable under the Credit Documents, as
amended by such agreement or stipulation, unless expressly released and
discharged in writing by Mortgagee and the Secured Parties.

 

17

 

37.        Notices  All notices,
consents and other communications provided for herein shall be sent to such
Person’s address as follows (or to such other address indicated in an unrevoked
written notice from such Person given in accordance the terms of this Paragraph):

 

(a)        if to
Mortgagor, Douglas Dynamics, L.L.C., 7777 North 73rd Street, Milwaukee,
WI  53223, Attention: Chief Executive
Officer and President, Telecopy No.: 
(414) 354-8448, with a copy to Aurora Capital Group, 10877 Wilshire
Boulevard, Suite 2100, Los Angeles, CA 
90024, Attention: Secretary, Douglas Dynamics Holdings, Inc.,
Telecopier No.: (310) 824-2791, with a copy to Gibson, Dunn & Crutcher
LLP, 333 S. Grand Avenue, Los Angeles, CA 
90071, Attention: Jeff R. Hudson, Esq., Telecopy No.: 213-229-6332;
and

 

(b)        if to
Mortgagee or Collateral Agent, at Credit Suisse, Cayman Islands Branch, Eleven
Madison Avenue, New York, NY  10010,
Attention:  Ian Nalitt, Telecopy No.:  (212) 325-8615, with a copy to Skadden Arps
Slate Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los
Angeles, CA  90071-3144, Attention: David
Kitchen, Esq., Telecopy No.: (213) 621-5280; and

 

(c)        if to
any of the Secured Parties, at the address set forth below such Secured Party’s
name on the signature pages of the Credit Agreement.

 

Each
notice hereunder shall be in writing and may be personally served, telexed or
sent by telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service and
signed for against receipt thereof, upon receipt of telefacsimile or telex, or
three (3) Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided, no notice to Mortgagee
shall be effective until received by Mortgagee.

 

38.        Severability         In case any
provision in or obligation hereunder shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

39.        Intentionally Deleted

 

40.        Indemnification Against Liabilities        
Mortgagor will defend, indemnify, pay and hold harmless Mortgagee and
the Secured Parties and their respective officers, partners, directors,
trustees, employees, agents and Affiliates of Mortgagee and each of the Secured
Parties from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind (including, without limitation, reasonable attorneys’ fees and
expenses) imposed upon or incurred by or asserted against Mortgagee and any of
the Secured Parties by reason of (a) ownership of a mortgagee’s or
participating lender’s interest in the Property, (b) any accident or
injury to or death of Persons or loss of or damage to or loss of the use of
property occurring on or about the Premises or any part thereof or the
adjoining sidewalks, curbs, vaults and vault spaces, if any, streets, alleys or
ways, unless

 

18

 

due
to the willful misconduct of Mortgagee or such Secured Party, (c) any use,
nonuse or condition of the Premises or any part thereof or the adjoining
sidewalks, curbs, vaults and vault spaces, if any, streets, alleys or ways, (d) any
failure on the part of Mortgagor to perform or comply with any of the terms of
this Mortgage, (e) performance of any labor or services or the furnishing
of any materials or other property in respect of the Premises or any part
thereof made or suffered to be made by or on behalf of Mortgagor, (f) any
negligence or tortious act on the part of Mortgagor or any of its agents,
contractors, lessees, licensees or invitees, or (g) any work in connection
with any alterations, changes, new construction or demolition of the
Premises.  All amounts payable to
Mortgagee and the Secured Parties under this Paragraph shall be payable
promptly on demand and shall be deemed indebtedness and Obligations secured by
this Mortgage and any such amounts shall bear interest at the default interest
rate specified in Section 2.9 of the Credit Agreement from the date
of such demand.  In case any action, suit
or proceeding is brought against Mortgagor, Mortgagee and/or any of the Secured
Parties by reason of any such occurrence, Mortgagor, upon request of Mortgagee
or any of the Secured Parties will, at Mortgagor’s expense, resist and defend
such action, suit or proceeding or cause the same to be resisted or defended by
counsel designated by Mortgagee or such Secured Party and approved by
Mortgagor.

 

41.        No Oral Changes         This Mortgage
and its provisions cannot be changed, waived, discharged or terminated orally
but only by an agreement in writing, signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.

 

42.        Governing Law  THE PROVISIONS
OF THIS MORTGAGE REGARDING THE CREATION, PERFECTION AND ENFORCEMENT OF THE
LIENS AND SECURITY INTERESTS HEREIN GRANTED SHALL BE GOVERNED BY AND CONSTRUED
UNDER THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.  ALL OTHER PROVISIONS OF THIS MORTGAGE AND THE
RIGHTS AND OBLIGATIONS OF MORTGAGOR AND MORTGAGEE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPALS THEREOF.

 

43.        Construction         This Mortgage
shall be construed without regard to any presumption or rule requiring
construction against the party causing such instrument or any portion thereof
to be drafted.

 

44.        Headings         Paragraph headings
herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive
effect.

 

45.        After Acquired Property         All property of
every kind which is hereafter acquired by Mortgagor which, by the terms hereof,
is required or intended to be subjected to the lien of this Mortgage shall,
immediately upon the acquisition thereof by Mortgagor, and without any further
giving of a deed of trust and/or mortgage, conveyance, assignment or transfer,
become subject to the lien of this Mortgage.

 

19

 

46.        Further Assurances         Mortgagor shall
execute, acknowledge and deliver to Mortgagee any documents and instruments
which Mortgagee may reasonably request from time to time for the better
assuring, conveying, assigning, transferring, confirming or perfecting of
Mortgagee’s security and rights under this Mortgage, in form and substance
reasonably satisfactory to Mortgagee.

 

47.        Definitions         The following
terms shall, for all purposes of this Mortgage, have the respective meanings
herein specified unless the context otherwise requires and such meanings shall
apply equally to the singular and plural forms of such defined terms unless a
definition is provided herein for both the singular and plural form of such
defined term:

 

(a)        “Lease” shall mean every lease or occupancy
agreement for the use or hire of all or any portion of the Premises, which
shall be in effect at the date hereof or which shall hereafter be entered into
by or on behalf of Mortgagor.

 

(b)        “Rents” shall mean all rents, rent equivalents,
moneys payable as damages or in lieu of rent or rent equivalents, royalties
(including, without limitation, all oil and gas or other mineral royalties and
bonuses), income, receivables, receipts, revenues, deposits (including, without
limitation, security, utility and other deposits), accounts, cash, issues,
profits, charges for services rendered, and other consideration of whatever
form or nature received by or paid to or for the account of or benefit of
Mortgagor or its agents or employees from any and all sources arising from or
attributable to the Land and the Building, including, without limitation, all
receivables, customer obligations, installment payment obligations and other
obligations now existing or hereafter arising or created out of the sale,
lease, sublease, license, concession or other grant of the right of the use and
occupancy of property, and proceeds, if any, from business interruption or
other loss of income insurance.

 

48.        Successors and Assigns  The terms,
covenants and provisions of this Mortgage shall apply to and be binding upon
Mortgagor and the successors and assigns of Mortgagor and shall inure to the
benefit of Mortgagee, the Secured Parties and their respective successors and
assigns.  All grants, covenants, terms,
provisions, and conditions contained herein shall run with the Land.

 

49.        Credit Agreement         In the event of
any inconsistency or conflict between the terms and provisions of the Credit
Agreement and this Mortgage, the terms and provisions of the Credit Agreement
shall control.

 

50.        State
Specific Provisions

 

(a)        Applicability
of Maine Law:         Notwithstanding
anything else contained herein to the contrary, where provisions contained in
this Section 50 conflict with other provisions of this Mortgage, these
provisions shall control.

 

(b)        Statutory
Condition:         This
Mortgage is given upon the STATUTORY CONDITION, which is incorporated herein by
reference.  To the extent that the
provisions of this Mortgage and the provisions set forth in the Statutory

 

20

 

Conditions conflict, the provisions of this Mortgage shall
control to the extent permitted by applicable law.

 

(c)        Statutory
Power of Sale:  If any Event of Default
shall occur, the Mortgagee shall have the right to foreclose this Mortgage
under any legal method of foreclosure in existence at the time or now existing,
or under any other applicable law, including, without limitation, the STATUTORY POWER OF SALE, which is expressly
incorporated herein by reference, to the extent authorized or allowed by any
present or future law of the State of Maine. 
In connection therewith, Mortgagor acknowledges that this Mortgage
secures a loan or loans for business and commercial purposes and that this
Mortgage is given primarily for a business, commercial or agricultural purpose.

 

(d)        Non-Waiver:  Mortgagor agrees for itself, its successor
and assigns, that the acceptance, before the expiration of the right of
redemption and after the commencement of foreclosure proceedings of this
Mortgage, of insurance proceeds, eminent domain awards, rents or anything else
of value to be applied on or to the Secured Obligations by the Mortgagee, the
Lenders or any person or party holding under Lender shall not constitute a waiver
of such foreclosure by the Mortgagee or waiver of the failure of performance by
the Mortgagor of any covenants or agreements contained herein, in the other
Credit Documents, or in the Credit Agreement. 
This agreement by Mortgagor shall be that agreement referred to in 14
M.R.S.A. § 6204, as amended, as necessary to prevent such waiver of
foreclosure.  This agreement by Mortgagor
is intended to apply to the acceptance and such applications of any such
insurance proceeds, eminent domain awards, rents and other sums or anything
else of value, whether the same shall be accepted from, or for the account of,
Mortgagor or from any other sources whatsoever by the Mortgagee, or by any
person or party holding under Mortgagee at any time or times in the future while
any portion of the Obligations shall remain outstanding.

 

(e)       Open-ended
Mortgage; Limitations:  This Mortgage is
an open-end mortgage, which secures existing indebtedness, “Future Advances” “Contingent
Obligations” and “Protective Advances” as such terms are defined in 33 M.R.S.A.
§ 505.  The maximum aggregate amount of
all debts or obligations secured by this Mortgage, including Future Advances
and Contingent Obligations, but excluding Protective Advances, shall not at any
time exceed the total amount of $170,000,000. 
The future advances secured hereby shall be made those advances made to
or for the account of Mortgagor and may be made under the Credit Agreement and
the Credit Documents, as the same may be amended, or may be made pursuant to
promissory notes, line of credit agreements or other instruments evidencing
such future advances which may be hereafter executed and delivered by Mortgagor
to Mortgagee.  In the event that any
notice described in subsections 5(a) and 5(b) of 33 M.R.S.A. § 505 is
recorded or is received by Mortgagee, any commitment, agreement or obligation
to make future advances to or for the benefit of Mortgagor shall immediately
cease.

 

(f)         Financing
Statement:  This instrument constitutes a
financing statement under Article 9-A of the Maine Uniform Commercial Code
covering the Building Equipment, fixtures, and the other items and types of
collateral included within

 

21

 

the Property and described in this Mortgage.  For purposes of this Section 50(f), the
debtor is Mortgagor and the secured party is the Mortgagee.  The mailing address of the secured party
(Mortgagee) from which information concerning the security interest may be
obtained and the mailing address of the debtor (Mortgagor), are set forth
below:

 

Mortgagee:

 

Credit
Suisse, Cayman Islands Branch, as Collateral Agent

Eleven
Madison Avenue

New
York, NY  10010

Attention:
Ian Nalitt

 

Mortgagor:

 

Douglas
Dynamics, L.L.C.

7777
North 73rd Street

Milwaukee,
WI  53223

Attention:
Chief Executive Officer and President

 

(g)           The employer identification number of
Mortgagor is 42-1623692.  The
organization identification number of Mortgagor is 3781861.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

22

 

IN WITNESS WHEREOF, Mortgagor has caused this
Mortgage to be executed under seal as of the day and year first above written.

 

 

	
   

  	
   

  	
  Mortgagor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DOUGLAS
  DYNAMICS, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

STATE
OF

COUNTY
OF                                               ,
ss

 

On
May         , 2007, personally
appeared before me, the above named
                            ,
as                                  of
said Douglas Dynamics, L.L.C., and acknowledged the foregoing instrument to be
his/her free act and deed in said capacity and the free act and deed of said
limited liability company.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notary
  Public

  
	
   

  	
   

  	
  Typed
  or Printed Name:

  

 

24

 

Exhibit A

 

Description of the Land

 

LEGAL DESCRIPTION

 

PARCEL 1:

 

BEGINNING at a stake and stones on Thomaston
Street and at the Northeast corner bound of land formerly of Webber; thence
generally easterly by and along said Thomaston Street, sixty (60) feet to land
now or formerly of Spicer; thence southerly and at a right angle by land of
said Spicer ninety (90) feet to other land of Spicer; thence westerly by land
of said Spicer, sixty (60) feet to land of said Webber; thence at a right angle
by land of said Webber, ninety (90) feet to said Thomaston Street and place of
beginning.

 

BEGINNING at a stake at land formerly of
Thomas Glover Wheeler; thence running westerly along Thomaston Street sixty
(60) feet to a stake; thence running South ninety (90) feet to a stake; thence
running East sixty (60) feet to a stake; thence running North ninety (90) feet
to the place of beginning.

 

BEGINNING at the Southeast corner of Parcel
1B, as described above; thence westerly one hundred seventy two (172) feet to a
line fence and land now or formerly of Prentiss Webber; thence southerly one
hundred two (102) feet, more or less, to land now or formerly of Forrest L.
Hooper and Barbara M. Hooper; thence easterly one hundred seventy two (172)
feet along line of said Hooper to a right of way; thence northerly one hundred
two (102) feet, more or less, to the place of beginning. Together with a right
of way in common with others on the easterly side of said lot on the road as
now traveled.

 

FOR REFERENCE, see deed of Mary M. Taylor to
Fisher Engineering, Inc. recorded in Book 1020, Page 233 of the Knox
County Registry of Deeds; and Rockland Tax Map #62, Lot A 5. The premises
conveyed is known as 170 Thomaston Street.

 

EXCEPTIONS:

 

a. An easement in favor of Central Maine
Power Company to erect, maintain, repair, rebuild, operate and control electric
transmission and distribution lines beginning at pole 32 112.1 and extending in
a southwesterly direction one pole, which easement is recorded in Book 390,
Page. 444 of the Knox County Registry of Deeds; and

 

b. An easement granted by Patricia C. Spicer
to Victor R. and Mary E. Malmstrom dated 30 April 1969 and recorded that
date in Book 489, Page 247 of said Registry of Deeds, The easement conveys
the right to draw water from a well located on the subject property, and to
maintain a pipeline underground for the purpose of transmitting water from the
well to the adjoining Malmstrom property. The grantor assumed no responsibility
for her operation or maintenance of the well but reserved the right to draw
water from the well sharing equally In the available supply of water.

 

PARCEL 2:

 

BEGINNING on the westerly side of a roadway
and at the Northeast corner of land of Grantor at a fence; thence westerly two
hundred thirty two (232) feet to a line fence; thence North along said line
fence one hundred fifty (150) feet to land formerly of Varnum E. Nickles and
Helen Nickles; thence easterly in a straight line and said line running at
right angles with said line fence two hundred thirty two (232) feet to a stake
on the easterly side of said roadway; thence southerly along the easterly side
of said roadway one hundred fifty (150) feet to a fence and place of beginning.
Also granting a right of way on the easterly side of the above described lot
over the road as now traveled.

 

BEGINNING at an iron post on the westerly
side of Ingraham Right of Way; so called; thence in a generally southerly
direction by and along property now or formerly owned by the City of Rockland,
a distance of fifty (50) feet to a post; thence by and along this Grantor’s line
in a westerly direction a distance of one hundred ninety (190) feet to a post;
thence northerly along said land of said Grantor’s

 

25

 

EXHIBIT A·— LEGAL DESCRIPTION

(Continued)

 

land a distance of fifty (50) feet to an iron
post; thence easterly one hundred ninety (190) feet along land now or formerly
of Hooper to place of beginning.

 

FOR REFERENCE, see deed of Forrest L. Hooper, Jr.
and Barbara M. Hooper to Fisher Engineering, Inc. recorded in .Book 1028, Page 231
of the Knox County Registry of Deeds; and Rockland Tax Map #62, Lots A7 and A8.
The property herein conveyed is known as 170 Thomaston Street (rear).

 

EXCEPTIONS:

 

a. Acknowledgment of Common Boundaries
between Forrest L. Hooper, Jr. & Barbara H, Hooper and Douglas
Dynamics, Inc. dated 28 March 1995 and recorded 12 May 1995 at
Book 1915, Page 47 of the Knox County Registry of Deeds.

 

PARCEL 3:

 

BEGINNING at the westerly line of land of
Fisher Engineering, Inc.; thence running along Thomaston Street easterly
sixty (60) feet to a stake; thence southerly ninety (90) feet to a stake;
thence running westerly sixty (60) feet to a stake; thence northerly ninety
(90) feet to the place of beginning. Being the same premises conveyed to
Prentiss Webber et ux. by Thomas Clover Wheeler by deed dated April 5,
1955, and recorded in the Knox County Registry of Deeds, Book 345,. Page 78.

 

BEGINNING at the southeast corner of land of
this Grantor, which land is situated at 170 Thomaston Street; thence westerly
along the southerly side of said land sixty (60) feet- to land of Fisher
Engineering, Inc.; thence southerly along land of Fisher Engineering, Inc,
one hundred five (105) feet, more or less, to land now or formerly of Bernice
Williams; thence easterly along land of Bernice Williams sixty (60) feet to a
stake at other land of Varnum Nickles; thence northerly along said land of
Nickles one hundred five (105) feet, more or less, to land of Avery and place
of beginning. Being the same premises conveyed to Prentiss E. Webber and Ruth
Webber by Varnum and Helen Nickles, dated August 2,1962, and recorded in
the Knox County Registry of Deeds, Book 403, Page 101.

 

BEGINNING at a stake on Thomaston Street at
land of \this Grantor; thence running East sixty (60) feet to a stake and at
land now or formerly of Howard F. Avery; thence running South by said Avf1ry
land ninety (90) feet to a stake; thence running West along land now or
formerly of Wheeler sixty (60) feet to a stake; thence running North along line
of this Grantor ninety (90) feet to a stake and place of beginning. Being a
portion of the premises conveyed to Prentiss E. Webber and Ruth Webber by
Howard F. and Emma B. Avery by deed dated August 27, 1963, and recorded in
the Knox Registry of Deeds, Book 423, Page 160.

 

BEGINNING at the easterly comer of property
formerly of Dennison; thence one hundred (100) feet, more or less, parallel
with Thomaston Street to the southwesterly comer of property of Fisher
Engineering, Inc.; thence southerly two hundred (200) feet, more or less,
to a corner of land of this grantor; thence one hundred (100) feet, more or
less, in an easterly direction to the corner of a lot formerly of Dennison;
thence northerly two hundred (200) feet, more or less, to the place of
beginning.

 

COMMENCING at the easterly corner of the land
of Grantor at land now or formerly of Hooper; thence southeasterly along the
land of Hooper approximately one hundred forty (140) feet to other land of
Hooper; thence southwesterly along the land of Hooper two hundred (200) feet to
the land now or formerly of Fisher Engineering, Inc; thence northwesterly along
land now or formerly of Fisher Engineering” Inc. one hundred forty (140) feet,
more or less, to land of this Grantor; thence northeasterly along the land of
Grantor approximately two hundred (200) feet to. the place of beginning.

 

26

 

EXHIBIT A·— LEGAL DESCRIPTION

(Continued)

 

FOR REFERENCE, see deed of Oliver J. Dennison
and Gloria J. Dennison to Fisher Engineering, Inc., recorded in Book 998, Page 121
of the Knox County Registry of Deeds; and Rockland Tax Map #62, Lot A 6. The
property herein conveyed is also known as 248 Thomaston Stre

 

EXCEPTIONS:

 

a. An easement for the erection and
maintenance of electric wires between poles 32 1/2 and 32 1/2.1 granted by A.
L. Nickles to Central Maine Power Company dated 18 November 1955, recorded
11 January 1956 In Book 348, Page 417 of the Knox County Registry of
Deeds.

 

b. An easement beginning at Pole 32 1/2.1 and
extending southwesterly one pole to be numbered 32 1/2.2 on old Thomaston Road
granted by V.E. and H.L. Nickles to Central Maine Power Company dated 6 June 1961,
recorded 19 June 1961 in Book 390, Page 444 of said Registry of
Deeds;

 

c. Easements from Homer Gilbert to Central
Maine Power Company recorded in Book 348, Page 79 and in Book 686, Page 82
of said Registry of Deeds, which mayor may not affect the subject property; and

 

d. “Certain pole rights granted to Central
Maine Power” (not more specifically Identified) referred to In the warranty
deed of Benjamin H. Nickles to E. B. Bodman recorded 30 September 1946 In
Book 293, Page 69 of said Registry of Deeds.

 

PARCEL 4:

 

BEGINNING at a granite monument at the
southeasterly corner of this Grantor, Fisher Engineering, Inc., as
recorded in the Knox County Registry of Deeds, Book 970, Page 3; thence
North 9 degrees 55 minutes 48 seconds East by land of Grantor a distance of
464.72 feet to a granite monument; thence South 85 degrees 12 minutes 20
seconds West a distance of 33.98 feet to a granite monument; thence North 9
degrees 07 minutes 30 seconds East still by land of Grantor a distance of
291.98 feet to a granite monument; thence North 23 degrees 08 minutes 18
seconds East still by land of Grantor and land now or formerly of Barbara M.
and Forrest L. Hooper, Jr., as ‘recorded in the Knox County Registry of
Deeds, Book 616, Page 246 a distance of 213.10 feet to an iron rod placed,
said iron rod being North 23 degrees 08 minutes 18 seconds East a distance of
35.38 feet from a granite monument at the southeasterly corner of said Hooper
property; thence South S5 degrees 37 minutes 12 seconds East by land of this
Grantor a distance of 267.17 feet to an iron rod in the northerly line of
Gordon Drive; thence South 84 degrees 22 minutes 48 seconds West by the
northerly line of Gordon Drive a distance of 65 feet to an iron rod placed at
the end of Gordon Drive; thence South 5 degrees 37 minutes 12 seconds East by
the end of Gordon Drive a distance of 50 feet to an iron rod placed; thence
continuing the same course South 5 degrees 37 minutes 12 seconds East by land
of this Grantor a distance of 626.58 feet to an iron rod placed; thence South
82 degrees 38 minutes 55 seconds West still by land of this Grantor a distance
of 1066.40 feet to an iron rod placed at the line of the State of Maine
property; thence North 21 degrees 10 minutes 35 seconds East by said State of
Maine property a distance of 20 feet to an iron rod; thence North 24 degrees 10
minutes 52 seconds East still by said State property a distance of 15 feet to
an iron rod; thence North 82 degrees 31 minutes 02 seconds East by said State
property a distance of 375 feet to a granite monument at the southwesterly
corner of this Grantor; thence continuing the same course North 82 degrees 31
minutes 01 second East by land of this Grantor a distance of 472.35 feet to the
place of beginning. Containing 3.018 acres.

 

All the courses described in the above
description were deduced from an observed magnetic north in the field having a
declination of 17 degrees 38 minutes 20 seconds West of true North as observed
by solar observations in the field.

 

Also conveying any rights that this Grantor
may have to that portion of the so called Ingraham Lane lying within the bounds
of the above described lot.

 

27

 

EXHIBIT A·— LEGAL DESCRIPTION

(Continued)

 

FOR REFERENCE, see deed of the Inhabitants of
the City of Rockland to Fisher Engineering, Inc. recorded in Book 991, Page 56
of the Knox County Registry of Deeds; and Plan of Industrial Park recorded In
Cabinet 5, Sheet 129 of the Knox County Registry of Deeds.

 

EXCEPTIONS:

 

a. A twenty foot right of way for the benefit
of owners of the W.E. Ingraham Lot and other adjoining owners to Main Street,
as referenced in deed of Lawrence and Portland Cement Company to Gross,
recorded in Book 282, Page 63 of said Registry of Deeds; and

 

b. An easement in favor of the City of
Rockland for utilities and drainage with the right to construct and maintain
drainage ditches on a strip of and fifteen feet wide adjacent to the line of
Gordon Drive, as recorded at Book 991, Page 56 of said Registry of Deeds.

 

PARCEL 5:

 

BEGINNING at a cement monument on the
southerly side of Thomaston Street, so called, at land conveyed by Homer K.
Gilbert to the State of Maine by deed recorded in the Knox County Registry of
Deeds, Book 786, Page 70; thence South 15 degrees 46 minutes 09 seconds
East and by said land of State of Maine, 307.24 feet to a 51B inch iron rod;
thence North 82 degrees 00 minutes 23 seconds East and still by said land of
State of Maine, 400 feet to a corner; thence South 00 degrees 37 minutes 22
seconds West, 1000 feet to a corner of land of the City of Rockland as noted in
the Knox County Registry of Deeds, Book 740, Page 212; thence North 82
degrees 31 minutes 01 seconds East and by said land of the City of Rockland,
472.35 feet to a granite monument; thence North 09 degrees 55 minutes 48
seconds East and by land of the City of Rockland as noted in the Knox County
Registry of Deeds, Book 514, Page 262, 464.72 foot to a granite monument;
thence South B5degrees 12 minutes 20 seconds West and still by said land of the
City of Rockland, 33.98 feet to corner; thence North 09 degrees 07 minutes 30
seconds East and still by said land of the City of Rockland, 291.98 feet to a
corner; thence North 23 degrees OB minutes18 seconds East 177.92 feet; thence
South 84 degrees 27 minutes 40 seconds West and by property noted in the Knox
County Registry of Deeds, Book 616, Page 246, 190 feet to a corner; thence
North 23 degrees 08 minutes 18 seconds East, 50 feet to an iron rod; thence
South 84 degrees 27 minutes 40 seconds West, 93.78 feet to a corner; thence
North 05 degrees 21 minutes 29 seconds West, 337.92 feet to the southerly side
of Thomaston Street, said point being the northwesterly corner of land now or
formerly of Dennison as noted in the Knox County Registry of Deeds, Book 604, Page 117;
thence South 84 degrees 05 minutes 21 seconds West by the southerly side of
Thomaston Street, 809.51 feet to the place of beginning. Containing
approximately 16.982 acres.

 

FOR REFERENCE, see deed of Homer K. Gilbert
to Fisher Engineering, Inc. recorded in Book 970, Page 03 of the Knox
County Registry of Deeds; and Plan showing property being conveyed to Fisher
Engineering, Inc. by Homer K. Gilbert dated July 1984 by Frederick E.
Beal.

 

EXCEPTIONS:

 

a. Guying rights conveyed by Homer Gilbert to
Central Maine Power Company in deed dated 10 June 1955, recorded 21 September 1955
in Book 348, Page 79 of said Registry of Deeds;

 

b. A right of way to the State of Maine Over
the subject property from Thomaston Street, for the passage of men, vehicles
and equipment, as described in the deed of Gilbert dated 4 June 1971,
recorded 11 June 1971 in Book 517, Page 77 of said Registry of Deeds.
This right of way mayor may not affect the subject property.

 

28

 

Exhibit B

 

Existing Liens

 

1.     All those exceptions to title set forth on Exhibit B to
Loan Policy No. M-5847(A) issued by Lawyers Title Insurance
Corporation.

 

2.     Those liens and security interests granted in favor of the ABL
Collateral Agent disclosed by the Intercreditor Agreement.

 

29

 

MORTGAGE, ASSIGNMENT OF LEASES,

RENTS AND PROFITS AND SECURITY AGREEMENT

 

 

DOUGLAS DYNAMICS, L.L.C.

 

Mortgagor

 

to

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH

in its capacity as Collateral Agent for the Secured Parties

Eleven Madison Avenue

New York, New York  10010

 

Mortgagee

 

 

DATED:  As of May 21, 2007

 

 

Premises located in:

Milwaukee, Wisconsin

 

Record and Return to:

Skadden Arps Slate Meagher & Flom LLP

300 South Grand Avenue

Los Angeles, California 90071

Attn:  Eric Lee, Esq.

 

 

INDEX

 

	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Payment of Obligations and Performance of Covenants and
  Agreements

  	
  6

  
	
  2.

  	
  Title to Property

  	
  6

  
	
  3.

  	
  Intercreditor Agreement

  	
  7

  
	
  4.

  	
  Future Advances

  	
  7

  
	
  5.

  	
  Insurance

  	
  7

  
	
  6.

  	
  Impositions

  	
  7

  
	
  7.

  	
  Maintenance and Alterations

  	
  8

  
	
  8.

  	
  Leasing

  	
  8

  
	
  9.

  	
  Recording, Filing and Other Fees

  	
  9

  
	
  10.

  	
  Taxes Imposed on Mortgagee and
  the Secured Parties

  	
  9

  
	
  11.

  	
  Compliance with Laws, etc.

  	
  9

  
	
  12.

  	
  Inspection

  	
  9

  
	
  13.

  	
  Certificate of Mortgagor

  	
  9

  
	
  14.

  	
  Condemnation

  	
  9

  
	
  15.

  	
  Restoration

  	
  10

  
	
  16.

  	
  Default

  	
  11

  
	
  17.

  	
  Mortgagee’s Right to Perform
  Mortgagor’s Covenants

  	
  11

  
	
  18.

  	
  Contemporaneous Mortgages

  	
  11

  
	
  19.

  	
  Appointment of Receiver

  	
  11

  
	
  20.

  	
  Power of Sale

  	
  12

  
	
  21.

  	
  Judicial Foreclosure

  	
  12

  
	
  22.

  	
  Sale in Parcels

  	
  12

  
	
  23.

  	
  Notice Upon Acceleration

  	
  12

  
	
  24.

  	
  Possession of Premises

  	
  13

  
	
  25.

  	
  Expenses of Mortgagee and/or the
  Secured Parties

  	
  13

  
	
  26.

  	
  Mortgagor’s Waivers

  	
  13

  
	
  27.

  	
  Partial Foreclosure

  	
  14

  
	
  28.

  	
  No Waiver; Rights Cumulative

  	
  14

  
	
  29.

  	
  Attorneys’ Fees

  	
  14

  
	
  30.

  	
  Interest After Maturity

  	
  14

  
	
  31.

  	
  No Credit for Taxes

  	
  14

  
	
  32.

  	
  Liens

  	
  15

  
	
  33.

  	
  Change in Taxation

  	
  15

  
	
  34.

  	
  Assignment of Leases and Rents

  	
  16

  
	
  35.

  	
  Security Agreement

  	
  16

  
	
  36.

  	
  No Release

  	
  17

  
	
  37.

  	
  Notices

  	
  17

  
	
  38.

  	
  Severability

  	
  18

  
	
  39.

  	
  Intentionally Deleted

  	
  18

  
	
  40.

  	
  Indemnification Against
  Liabilities

  	
  18

  
	
  41.

  	
  No Oral Changes

  	
  19

  
	
  42.

  	
  Governing Law

  	
  19

  

 

 

	
  43.

  	
  Construction

  	
  19

  
	
  44.

  	
  Headings

  	
  19

  
	
  45.

  	
  After Acquired Property

  	
  19

  
	
  46.

  	
  Further Assurances

  	
  19

  
	
  47.

  	
  Definitions

  	
  19

  
	
  48.

  	
  Successors and Assigns

  	
  20

  
	
  49.

  	
  Credit Agreement

  	
  20

  
	
  50.

  	
  WAIVER OF JURY TRIAL

  	
  20

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Description of the Land

  	
   

  
	
  Exhibit B

  	
  Existing Liens

  	
   

  

 

3

 

MORTGAGE,
ASSIGNMENT OF LEASES,  RENTS AND PROFITS

AND
SECURITY AGREEMENT

 

THIS MORTGAGE, ASSIGNMENT OF
LEASES, RENTS AND PROFITS AND SECURITY AGREEMENT (this “Mortgage”) made as of this 21st day of May, 2007 by DOUGLAS DYNAMICS, L.L.C., a Delaware limited liability
company having an office at 7777 North 73rd Street,
Milwaukee, Wisconsin 53223 (the “Mortgagor”),
to CREDIT SUISSE, CAYMAN ISLANDS BRANCH
(“Credit Suisse”), as collateral
agent (in such capacity, and together with its successors and assigns, the “Mortgagee”), having an office at Eleven
Madison Avenue, New York, New York 10010, for the Secured Parties (as such term
and other capitalized terms used but not otherwise defined herein are defined
in the Credit Agreement, defined below).

 

W I T N E S S E T H:

 

WHEREAS, Mortgagor is
the owner of the fee interest in those certain parcels of land lying and being
situated in the City of Milwaukee, Milwaukee County, Wisconsin, as more
particularly described in Exhibit A attached hereto;

 

WHEREAS, Mortgagor, as
Borrower, Fisher, LLC, a Delaware limited liability company (“Fisher”), Douglas Dynamics Finance Company, a Delaware
corporation (“DD Finance”), and Douglas Dynamics
Holdings, Inc., a Delaware corporation (“Holdings”),
as Guarantors, the banks and financial institutions listed on the signature pages thereof
(together with their respective successors and assigns, each individually
referred to herein as a “Lender” and collectively as “Lenders”),
Credit Suisse, Cayman Islands Branch, as sole bookrunner, sole lead arranger,
syndication agent, documentation agent, administrative agent for the Lenders (“Term Administrative Agent”), and as collateral agent for the
Lenders, have entered into that certain Credit and Guaranty Agreement, dated as
of May 21, 2007 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”), pursuant to which Lenders have agreed to make, and
Mortgagee has agreed to administer, certain credit facilities in an aggregate
amount not to exceed $85,000,000, which extensions of credit shall be used for
the purposes permitted under the Credit Agreement, upon the terms and
conditions contained in the Credit Agreement; and

 

WHEREAS, Mortgagor has
agreed to execute and deliver to Mortgagee this Mortgage in order to better
secure Mortgagor’s performance of Mortgagor’s obligations under the Credit
Agreement and under any of the other Credit Documents;

 

NOW,
THEREFORE, for and in consideration of the mutual covenants
herein contained and other good and valuable consideration, including Mortgagee’s
entering into the Credit Agreement, the receipt and legal sufficiency of which
are hereby expressly acknowledged by all parties, to secure the full and
complete payment and performance of the Obligations, including Mortgagor’s
performance of Mortgagor’s obligations pursuant to the Credit Agreement, this
Mortgage and the other Credit Documents, Mortgagor and Mortgagee hereby agree
as follows:

 

 

Mortgagor does hereby grant, pledge, mortgage,
warrant, sell, transfer, assign, and convey unto Mortgagee subject only to the
Permitted Liens and Existing Liens (defined below), all of its right, title and
interest in the following (collectively, the “Property”):

 

A.                                   All that certain land located in the City of Milwaukee,
Milwaukee County, Wisconsin, and more particularly described in Exhibit A
annexed hereto and made a part hereof (collectively, the “Land”).

 

B.                                     All the buildings, structures and improvements, now or at any
time hereafter erected on the Land or any part thereof (collectively, the “Buildings”).

 

C.                                     All machinery, apparatus, equipment, personal property and
fixtures of every kind and nature whatsoever now or hereafter located in, on or
about any one or more of the Buildings or upon the Land, or attached to or used
or useable in connection with the operation or maintenance of the Land or any
one or more of the Buildings, or any part thereof, and now owned or hereafter
acquired (collectively, the “Building Equipment”;
the Land, the Buildings and the Building Equipment being hereafter sometimes
collectively referred to as the “Premises”).

 

D.                                    All right, title and interest of Mortgagor, whether now owned
or hereafter acquired, in and to any opened or proposed avenues, streets,
roads, public places, sidewalks, alleys, strips or gores of land, in front of
or adjoining the Land or any one or more of the Buildings and all easements,
tenements, hereditament, appurtenances, rights and rights of way, public or
private, pertaining or belonging to the Land or any one or more of the
Buildings.

 

E.                                      All insurance proceeds and all awards and payments, subject
to applicable provisions of this Mortgage, including interest thereon, and the
right to receive the same, which may be made in respect of all or any part of
any of the Premises or any estate or interest therein or appurtenant thereto,
as a result of damage to or destruction of all or any part of any of the
Premises, the exercise of the right of condemnation or eminent domain, the
closing of, or the alteration of the grade of, any street on or adjoining the
Land, or any other injury to or decrease in the value of all or any part of any
of the Premises.

 

F.                                      All right, title and interest of Mortgagor in and to any and
all present and future Leases (as defined in Paragraph 47) of all or any
part of the Premises, and in and to the rents, issues and profits payable
thereunder and cash or securities deposited thereunder as lessees’ security
deposits.

 

G.                                     All franchises, permits, licenses and rights therein
respecting the use, occupation and operation of the Premises or the activities
conducted thereon or therein.

 

H.                                    All right, title and interest of Mortgagor in and to any
minerals, oil or gas located on, under or appurtenant to the Land.

 

I.                                         All right, title and interest of Mortgagor in and to any tax
refunds with respect to the Premises.

 

5

 

J.                                        To the extent assignable, all of Mortgagor’s interest in and
to all agreements, contracts, certificates, instruments and other documents,
now or hereafter entered into, pertaining to the construction, operation or
management of the Premises and all right, title and interest of Mortgagor
therein (collectively, the “Contracts”).

 

K.                                    All of Mortgagor’s interest in and to all easements, rights,
licenses, privileges and appurtenances including, without limitation,
development and air rights now or hereafter belonging or in any way
appertaining to the Land.

 

L.                                      All of the estate and rights of Mortgagor now or hereafter
acquired in and to land lying in streets, roads, ways and alleys, open or
proposed, adjoining or contiguous to the Land.

 

M.                                 The rents, issues and profits of any of the foregoing.

 

TO HAVE AND TO HOLD the Property unto Mortgagee, its
successors and assigns, forever. 
Provided, that if (i) Mortgagor shall perform all obligations
hereunder and (ii) the Obligations are paid in full, the Commitments are
cancelled or terminated and all outstanding Letters of Credit are cancelled or
have expired, then this Mortgage shall be released without warranty, at the
cost and request of Mortgagor.

 

AND MORTGAGOR COVENANTS, REPRESENTS AND WARRANTS TO
AND FOR THE BENEFIT OF MORTGAGEE AND THE SECURED PARTIES AS FOLLOWS:

 

1.                                       Payment of
Obligations and Performance of Covenants and Agreements            Mortgagor
shall pay or perform the Obligations when due in accordance with the provisions
of the Credit Agreement, this Mortgage, and the other Credit Documents and
perform the covenants and agreements of Mortgagor set forth in the Credit
Documents.

 

2.                                       Title to Property            Mortgagor represents and warrants that (a) it
owns good and marketable fee simple title to the Premises, (b) it has the
good and unrestricted right, full power and lawful authority to make this
Mortgage in accordance with the terms hereof, (c) Mortgagor has obtained
any and all consents and approvals necessary or required for the making of this
Mortgage, and the making of this Mortgage will not violate any contract or
agreement to which Mortgagor is a party or by which the Property is bound, and (d) the
Premises is free of all liens, encumbrances, adverse claims and other defects
of title whatsoever except those items listed on Exhibit B annexed hereto
and made a part hereof (collectively, the “Existing
Liens”) and Permitted Liens. 
Mortgagor does hereby and shall forever warrant and defend its title to
and interest in the Property and the validity and priority of the lien of this
Mortgage, subject to the Existing Liens and the Permitted Liens, to Mortgagee
and the Secured Parties, their respective successors and assigns, against all
claims and demands whatsoever of any Person or Persons.  As of the date hereof, there are no defenses
or offsets to this Mortgage or to the Obligations.

 

6

 

3.                             Intercreditor
AgreementNotwithstanding anything herein to the contrary, and
regardless of the priority of recordation of this Mortgage, the lien and
security interests granted to the Mortgagee pursuant to this Mortgage and the
exercise of any right or remedy by such Mortgagee hereunder are subject to the
provisions of that certain Intercreditor Agreement, dated as of May 21,
2007 (the “Intercreditor Agreement”), by and
among Mortgagor, Fisher, DD Finance, Holdings, Mortgagee, Term Administrative
Agent, Credit Suisse, in its capacity as administrative agent under the ABL
Loan Documents (as defined therein), and JPMorgan Chase Bank, N.A., in its
capacity as collateral agent under the ABL Loan Documents (together with its
successors and assigns from time to time in such capacity, the “ABL Collateral Agent”).  In the event of any conflict between the
terms of the Intercreditor Agreement and this Mortgage, the terms of the
Intercreditor Agreement shall govern.

 

4.                             Future Advances            Without
limiting the generality of any other provision hereof, or the terms and
provisions of the Credit Agreement, the Obligations shall include, without
limitation:  (a) all existing
indebtedness of Mortgagor to Mortgagee and/or any of the Secured Parties
evidenced by any of the Credit Documents; (b) all future advances that may
subsequently be made by Mortgagee and/or the Lenders as provided by any of the
Credit Documents; and (c) all other indebtedness, if any, of Mortgagor to
Mortgagee and/or any of the Secured Parties now due or to become due or
hereafter contracted pursuant to any of the Credit Documents; provided
that the maximum principal amount of all existing indebtedness, future
advances, readvances of sums repaid and all other indebtedness secured hereby
at any one time shall not exceed the total sum of $170,000,000 (exclusive of
interest thereon, attorneys’ fees and costs, taxes, insurance premiums and all
other obligations hereunder).

 

5.                             Insurance

 

(a)                        Mortgagor shall maintain in full force and effect with
respect to the Premises the insurance as required by Section 5.5 of the
Credit Agreement.

 

(b)                       In the event of a foreclosure of this Mortgage or other
action or proceeding taken by Mortgagee pursuant to this Mortgage, the
purchaser of the Premises shall succeed to all of the rights of Mortgagor,
including any right to unearned premiums, in and to all policies of insurance
which Mortgagor is required to maintain under Paragraph 5(a) and to
all proceeds of such insurance.

 

6.                             Impositions

 

(a)                        Mortgagor shall pay, not later than the final delinquency
date thereof (and if payable in installments, not later than the installment
final delinquency date), all real estate taxes, personal property taxes,
assessments, water rates and sewer rents, license fees, all charges which may
be imposed for the use of vaults, chutes, areas and other space beyond the lot
line and abutting the public sidewalks in front of or adjoining the Land, and
any other amounts which could be or become a lien upon or against the Property
or any part thereof (collectively, the “Impositions”);
provided, no such Imposition need be paid if it is being contested in
good faith by appropriate proceedings 

 

7

 

promptly instituted and diligently conducted, so long as
adequate reserve or other appropriate provision, as shall be required in
conformity with GAAP shall have been made therefor.  Notwithstanding the foregoing, Mortgagor shall
promptly, and in any event on demand, pay such contested Imposition if at any
time all or any part of the Property shall be in danger of being foreclosed,
sold, forfeited, or otherwise lost or if such contest shall be
discontinued.  During the continuance of
any Event of Default, upon demand by Mortgagee, Mortgagor will pay the whole of
any assessment (an “Assessment”)
for local improvements which may be payable in installments, notwithstanding
that such installments may not be due and payable at the time of such demand.

 

(b)                       Mortgagor shall, upon request of Mortgagee, deliver to
Mortgagee, within twenty (20) days after the final delinquency date thereof of
any Imposition or Assessment, receipts evidencing such payment or other proof
of payment satisfactory to Mortgagee.

 

7.                             Maintenance and
Alterations      Mortgagor will
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, the Premises and from time to time will make
or cause to made all appropriate repairs, renewals and replacements thereof.

 

8.                             Leasing Mortgagor
represents that there are no Leases now in effect.  Mortgagor shall not enter into any Lease of
all or any part of any of the Premises without in each instance obtaining
Mortgagee’s prior written consent thereto, which consent shall not be
unreasonably withheld, conditioned or delayed. 
Mortgagor shall deliver to Mortgagee a duplicate original of each Lease
promptly after the execution thereof.  At
the option of Mortgagee, each Lease, and all renewals, replacements, extensions,
and modifications thereof, and all rights of the tenant thereunder, shall be
subject and subordinate to this Mortgage, and to each and every advance made or
thereafter made hereunder or under the other Credit Documents and to all
renewals, additions, amendments, supplements, modifications, consolidations,
spreaders, replacements, and extensions of this Mortgage and shall contain
provisions obligating the tenants thereunder to attorn to Mortgagee or any
purchaser therefrom if Mortgagee or such purchaser succeeds to the interest of
Mortgagor under such Lease.  Mortgagor
shall fully and promptly perform all of the obligations to be performed by the
lessor under any and all Leases. 
Mortgagor shall enforce the performance and observance of each and every
obligation to be performed or observed by the lessees under such Leases.  Mortgagor shall give prompt notice to
Mortgagee of (a) any notice received by Mortgagor of any default by the
lessor under any Lease, (b) the commencement of any action or proceeding
by any lessee the purpose of which shall be the cancellation of any Lease or a
diminution or abatement of the rent payable thereunder, (c) any notice of
default given by Mortgagor to the lessee under any Lease, or (d) the
interposition by any lessee of any defense or counterclaim in any action or
proceeding brought by Mortgagor against such lessee; and Mortgagor will cause a
copy of any process, pleading or notice received or served by Mortgagor in
reference to any such action, defense or claim to be promptly delivered to
Mortgagee.  Mortgagor shall hold in trust
all security deposits and advance rent given on account of any Lease, and
deposit such security in a bank or trust company and shall not 

 

8

 

mingle
such funds with other funds.  Mortgagor
shall repay or apply such funds only in accordance with the provisions of the
applicable Leases.

 

9.                             Recording,
Filing and Other Fees        Mortgagor
shall pay all recording and filing fees, all recording taxes, and all other
costs and expenses in connection with the preparation, execution and
recordation and other manner of perfection of this Mortgage and any other
Credit Documents, and shall reimburse Mortgagee and each of the Secured Parties
on demand for all costs and expenses of any kind incurred by Mortgagee or any
of the Secured Parties in connection therewith (including, without limitation,
reasonable attorneys’ fees and disbursements). 
Mortgagor will, at any time on request of Mortgagee, execute or cause to
be executed financing statements, continuation statements, or the like, in
respect of any Building Equipment. 
Mortgagor shall pay all filing fees, including fees for filing
continuation statements, in connection with such financing statements.

 

10.                       Taxes Imposed
on Mortgagee and the Secured Parties Mortgagor shall pay
all taxes (except income, inheritance and franchise taxes, taxes on the receipt
of debt service payments, or taxes in lieu of any of the foregoing) imposed on
Mortgagee or any of the Secured Parties by reason of its ownership of this
Mortgage or any of the other Credit Documents.

 

11.                       Compliance with
Laws, etc.      Mortgagor shall
comply with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority (including Environmental Laws),
noncompliance with which could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.

 

12.                       Inspection        Mortgagee
and its authorized representatives shall have the right, at Mortgagee’s option,
at reasonable times during normal business hours and upon reasonable prior
written notice, and as often as may be reasonably requested, to enter the
Premises for the purpose of inspecting the same and any other Collateral.

 

13.                       Certificate of
Mortgagor        Mortgagor,
upon request of Mortgagee or any of the Secured Parties, shall certify to
Mortgagee or to such Secured Party or to any proposed assignee of or
participant in this Mortgage, by an instrument in form reasonably satisfactory
to Mortgagee or such Secured Party, duly acknowledged, the amount of the
Obligations then owing, whether any offsets or defenses exist against payment
or performance of all or any portion of the Obligations and anything else that
Mortgagee or such Secured Party might reasonably request, within ten (10) days
if the request is made personally, or within fifteen (15) days if the request
is made by mail.  Mortgagee, Secured
Parties and any actual or proposed assignee of or participant in this Mortgage
shall have the right to rely on such certification.

 

14.                       Condemnation

 

(a)                        Mortgagor shall give notice to Mortgagee upon Mortgagor
receiving written notice of the commencement of any action or proceeding to
take all or any part of the Premises by exercise of the right of condemnation
or eminent domain or of any action

 

9

 

 or proceeding to close
or to alter the grade of any street on or adjoining the Land.  Mortgagee may participate in any such action
or proceeding in the name of Mortgagee or, whenever necessary, in the name of
Mortgagor, and Mortgagor shall deliver to Mortgagee such instruments as
Mortgagee shall request to permit such participation.  Mortgagor shall not settle any such action or
proceeding or agree to accept any award or payment without the prior written
consent of Mortgagee (which consent shall not be unreasonably withheld,
conditioned or delayed), and such award or payment and any interest thereon
(hereinafter collectively called the “Award”)
shall be applied in accordance with Section 2.14(b) and Section 2.15
of the Credit Agreement.

 

(b)                       The application of any Award toward payment of the
Obligations shall not be deemed a waiver by Mortgagee or any of the Secured
Parties of its right to receive payment of the balance of the Obligations in
accordance with the provisions of the Credit Documents.  Mortgagee shall have the right, but shall be
under no obligation, to question the amount of the Award, and Mortgagee may
accept the same without prejudice to the rights that Mortgagee may have to
question such amount.  In any such
condemnation or eminent domain action or proceeding Mortgagee may be
represented by attorneys selected by Mortgagee, and all sums paid by Mortgagee
in connection with such action or proceeding (including, without limitation,
reasonable attorneys’ fees to the extent permitted by law) shall, on demand, be
immediately due from Mortgagor to Mortgagee and the same shall be secured by
this Mortgage.

 

(c)                        Notwithstanding any taking by condemnation or eminent domain,
closing of, or alteration of the grade of, any street or other injury to or
decrease in value of the Premises by any public or quasi-public authority or
corporation, the unpaid principal portion of the Advances shall continue to
bear interest at the rate payable pursuant to the applicable Credit Documents
until the Award shall have been actually received by Mortgagee, and any
reduction in the Obligations resulting from the application by Mortgagee of the
Award shall be deemed to take effect only on the date of such receipt.

 

15.                       Restoration         If
the Buildings or the Building Equipment shall be damaged or destroyed, in whole
or in part, by fire or other casualty, or by any taking in condemnation
proceedings or the exercise of any right of eminent domain, Mortgagor shall
promptly restore, replace or rebuild the same to as nearly as possible the
value, quality and condition they were in immediately prior to such fire or
other casualty or taking, with such alterations or changes as may be approved
in writing by Mortgagee which approval shall not be unreasonably withheld or
delayed, or apply the amount of any Award or insurance proceeds received with
respect thereto, in each case in accordance with Section 2.14(b) and
Section 2.15 of the Credit Agreement.  Mortgagor shall give prompt notice to
Mortgagee of any damage or destruction to the Buildings or Building Equipment
by fire or other casualty, as well as the initiation of any condemnation or
eminent domain proceeding affecting the same.

 

10

 

16.                       Default

 

(a)                        Any Event of Default under the Credit Agreement shall
constitute an Event of Default hereunder and Mortgagee shall have all of the
rights of the Administrative Agent and Collateral Agent under the Credit
Agreement and all of the remedies hereunder.

 

(b)                       All notice and cure periods provided in the Credit Agreement
shall run concurrently with any notice and cure periods provided under
applicable law.

 

17.                       Mortgagee’s
Right to Perform Mortgagor’s Covenants         If
there shall be an Event of Default, Mortgagee may, at its option, cure such
Event of Default, and Mortgagee and its representatives shall have the right to
enter the Premises to do so, and the amounts advanced by, and the other costs
and expenses of, Mortgagee in curing such Event of Default, with interest from
the time of the advances or payments at the Base Rate plus the Applicable
Margin, shall, on demand, be immediately due from Mortgagor to Mortgagee and
shall be secured by this Mortgage.

 

18.                       Contemporaneous
Mortgages    THIS MORTGAGE IS MADE
CONTEMPORANEOUSLY WITH TWO (2) OTHER MORTGAGES OR DEEDS OF TRUST OF EVEN
DATE HEREWITH (as any of the same may be amended, supplemented, restated,
severed, consolidated, spread, partially released, increased or otherwise
modified from time to time, the “Contemporaneous
Mortgages”) GIVEN TO MORTGAGEE COVERING PROPERTY LOCATED IN THE
STATES OF TENNESSEE AND MAINE.  The
Contemporaneous Mortgages secure the Obligations.  Upon the occurrence of an Event of Default,
Mortgagee may proceed under this Mortgage and/or the Contemporaneous Mortgages
against any of such property and/or the Property in one or more parcels and in
such manner and order as Mortgagee shall elect. 
Mortgagor hereby irrevocably waives and releases, to the extent
permitted by law, whether now or hereafter in force,  any right to have the property and/or the
Property covered by the Contemporaneous Mortgages marshalled upon any
foreclosure of this Mortgage or the Contemporaneous Mortgages.

 

19.                       Appointment of
Receiver         After
the occurrence and during the continuance of an Event of Default, Mortgagee may
apply for the appointment of a receiver of the Rents (as defined in Paragraph
47), issues, and profits of all or any part of the Property from whatever
source derived and thereupon it is hereby expressly covenanted and agreed that
the court shall forthwith appoint such receiver with the usual powers and
duties of receivers in like cases; and said appointment shall be made by the
court ex parte as a matter of strict right to Mortgagee, without notice to or
demand upon Mortgagor or any Person claiming through or under Mortgagor, and
Mortgagee shall be entitled to the appointment of such receiver as a matter of
right, to the extent not prohibited by applicable law, without consideration of
the value of the Property as security for the amounts due to Mortgagee or the
Secured Parties or the solvency of any Person liable for the payment of such
amounts.  Mortgagor hereby specifically
waives the right to object to the appointment of a receiver as aforesaid and
hereby expressly consents that such appointment shall be made ex parte and
without notice to Mortgagor as an admitted equity and as a matter of absolute
right to Mortgagee.  In order to maintain
and preserve the Property and to prevent waste and impairment of its security,
Mortgagee 

 

11

 

may,
at its option, advance monies to the appointed receiver and all such sums
advanced shall become secured obligations and shall bear interest from the date
of such advance at the rate of interest specified in Section 2.9 of
the Credit Agreement.

 

20.                       Power of Sale    To
the extent permitted by the laws of the State of Wisconsin, Mortgagee is hereby
granted a power of sale and may sell any of the Premises (together with the
Rents and profits and intangible personalty), or such part or parts thereof or
interests therein as Mortgagee may select.

 

21.                       Judicial
Foreclosure       After the
occurrence and during the continuance of an Event of Default, Mortgagee may
institute an action of foreclosure, or take such other action as the law may
allow, at law or in equity, for the enforcement hereof and realization on the
Property or any other security which is herein or elsewhere provided for, and
proceed thereon to final judgment and execution thereon for the entire
principal then outstanding under the Credit Documents, with interest thereon at
the rate stipulated in the Credit Documents to the date of default and
thereafter at the default interest rate specified in Section 2.9 of
the Credit Agreement together with all other sums secured by this Mortgage, all
costs of suit, including, without limitation, the expenses which are described
in Paragraphs 25 and 29, and interest at the default interest
rate specified in Section 2.9 of the Credit Agreement on any
judgment obtained by Mortgagee from and after the date of any judicial sale of
any of the Property until actual payment. 
Upon any sale or sales made hereunder, whether made under the power of
sale herein granted or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale, Mortgagee and/or any of the Secured
Parties may bid for and acquire any of the Property or any part thereof and in
lieu of paying cash therefor may make settlement for the purchase price by
crediting against the Obligations the net sales price after deducting therefrom
the expenses of the sale and the costs of the action and any other sums which
Mortgagee is authorized to deduct under this Mortgage.  Except as otherwise provided in the Credit
Agreement, the proceeds of such sale shall be applied first to the payment of
the costs and charges of such sale, including, without limitation, Mortgagee’s
attorneys’ fees, (to the extent permitted by law), and second to the payment of
the Obligations, the surplus money, if any, to be paid to the Person(s) legally
entitled thereto (including Mortgagor, to the extent so entitled, if at
all).  The obligation of Mortgagor to so
execute and file such waiver shall survive the termination of this Mortgage.  Following a foreclosure sale, the sheriff
shall deliver to the purchaser the sheriff’s deed (and bill of sale as to any
personalty) conveying the property so sold without any covenant or warranty,
express or implied.

 

22.                       Sale in Parcels    In
the event of a foreclosure of this Mortgage or upon any sale under this
Mortgage pursuant to judicial proceedings or otherwise, the Property may be
sold in one parcel and as an entirety or in such parcels, manner or order as
Mortgagee in its sole discretion may select.

 

23.                       Notice Upon
Acceleration         Whenever
Mortgagee in this Mortgage is given the option to accelerate the maturity of
all or part of the Obligations upon the occurrence of an Event of Default,
Mortgagee may, to the extent permitted by 

 

12

 

law,
do so without prior notice or demand to or upon Mortgagor except as otherwise
specifically provided herein.

 

24.                       Possession of
Premises To the extent permitted by law, after the
occurrence and during the continuance of an Event of Default, Mortgagee and its
agents and any receiver appointed by a court are authorized to (a) take
possession of the Premises, with or without legal action, and by force if
necessary; (b) lease the Premises or make modifications to or cancel
Leases; (c) maintain, repair, alter, and restore the Premises; (d) with
or without taking possession, collect all Rents and profits payable under all
Leases directly from the lessees thereunder upon notice to each such lessee
that an Event of Default exists under this Mortgage accompanied by a demand on
such lessee for the payment to Mortgagee of all Rents due and to become due
under its Lease, and Mortgagor FOR THE BENEFIT OF MORTGAGEE AND EACH SUCH
LESSEE hereby covenants and agrees that the lessee shall be under no duty to
question the accuracy of Mortgagee’s statement of default and shall
unequivocally be authorized to pay said Rents to Mortgagee without regard to
the truth of Mortgagee’s statement of an Event of Default and notwithstanding
notices from Mortgagor disputing the existence of an Event of Default such that
the payment of rent by the lessee to Mortgagee pursuant to such a demand shall
constitute performance in full of the lessee’s obligation under the Lease for
the payment of Rents by the lessee to Mortgagor; and (e) after deducting
all costs of collection and administration expense, apply the net Rents and
profits to the payment of Impositions, insurance premiums and all other
carrying charges (including, without limitation, agents’ compensation and fees
and reasonable costs of counsel  to the
extent permitted by law, and receivers) and to the maintenance, repair or
restoration of the Premises, or, except as otherwise provided in the Credit
Agreement, on account and in reduction of the Obligations in such order and
amounts as Mortgagee in Mortgagee’s sole discretion may elect.  Mortgagee shall be liable to account only for
Rents and profits actually received by Mortgagee.

 

25.                       Expenses of
Mortgagee and/or the Secured Parties       All
sums (including reasonable attorneys’ fees and disbursements, to the extent
permitted by law) paid by Mortgagee and/or any of the Secured Parties in
connection with any litigation to prosecute or defend the rights and
obligations created by this Mortgage, with interest thereon at the default
interest rate specified in Section 2.9 of the Credit Agreement from
the time of payment by Mortgagee and/or any of the Secured Parties shall, on
demand, be immediately due from Mortgagor to Mortgagee and/or any such Secured
Party and shall be added to and included in the Obligations and shall be
secured by this Mortgage.

 

26.                       Mortgagor’s
Waivers     Mortgagor, for itself and its successors
and assigns, hereby irrevocably waives and releases, to the extent permitted by
law, whether now or hereafter in force, (i) the benefit of any and all
valuation and appraisement laws, (ii) any right of redemption whether
statutory or otherwise, in respect of the Property, (iii) any applicable
homestead or dower laws, (iv) all exemption laws whatsoever and all
moratoriums, extensions or stay laws or rules, or orders of court in the nature
of any one or more of them, (v) any right to have any of the Property
marshalled upon foreclosure of this Mortgage, (vi) the right to interpose
any set-off, recoupment, counterclaim or cross-claim in any litigation in any
court with respect to, in connection with, or arising out of 

 

13

 

this
Mortgage or any of the other Credit Documents unless such set-off, recoupment,
counterclaim or cross-claim could not, by reason of the applicable Federal or
State procedural laws, be interposed, pleaded or alleged in any other action,
and (vii) any right Mortgagor may have to claim or recover in any
litigation arising out of this Mortgage or any of the other Credit Documents
any special, exemplary, punitive or consequential damages or any damages other
than, or in addition to, actual damages.

 

27.                       Partial
Foreclosure       Mortgagee
may from time to time, if permitted by law, take action to recover any sums,
whether interest, principal or any other sums, required to be paid under this
Mortgage or any other Credit Document as the same become due, without prejudice
to the right of Mortgagee thereafter to bring an action of foreclosure, or any
other action, for an Event of Default by Mortgagor existing when such earlier
action was commenced.  Mortgagee may also
foreclose this Mortgage for any sums due under this Mortgage or any other
Credit Document and the lien of this Mortgage shall continue to secure the
balance of the Obligations due.

 

28.                       No Waiver;
Rights Cumulative No failure or delay on the part of Mortgagee
or any of the Secured Parties in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power, right
or privilege.  The rights, powers and
remedies given to Mortgagee and each of the Secured Parties hereby are
cumulative and shall be in addition to and independent of all rights, powers
and remedies existing by virtue of any statute or rule of law or in any of
the other Credit Documents.  Any
forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or
be construed to be a waiver thereof, nor shall it preclude the further exercise
of any such right, power or remedy.

 

29.                       Attorneys’ Fees If this
Mortgage shall be foreclosed, or if any of the Credit Documents is placed in
the hands of an attorney for collection or is collected through any court,
including any bankruptcy court, there shall be included in the computation of
the sums secured hereby, to the extent permitted by law, the amount of a
reasonable fee for the services of the attorney retained by Mortgagee in the
foreclosure action or proceeding, and all disbursements, costs, allowances and
additional allowances provided by law.

 

30.                       Interest After
Maturity  The Obligations secured by this Mortgage
shall bear interest from and after maturity, whether or not resulting from
acceleration, at the default interest rate specified in Section 2.9
of the Credit Agreement, but this shall not constitute an extension of time for
payment of the Obligations.

 

31.                       No Credit for
Taxes      Mortgagor shall not claim or demand
or be entitled to any credit or credits on account of any of the sums secured
hereby by reason of the Impositions assessed against all or any part of the
Property or for any payments made on account thereof.  No deductions shall be made or claimed from
the taxable value of all or any part of the Premises by reason of this
Mortgage.

 

14

 

32.                       Liens      This
Mortgage is and shall be maintained as a valid first lien on the Property
subject only to any encumbrances created pursuant to the Credit Documents and
the Existing Liens and the Permitted Liens, if any.  Notwithstanding any provision in the Credit
Documents to the contrary, Mortgagor shall not, directly or indirectly, create
or suffer or permit to be created, or to stand, against the Property or any
portion thereof, or against the Rents, issues and profits therefrom, any lien,
charge, mortgage, deed of trust, adverse claim or other encumbrance (herein
collectively referred to as a “lien”),
whether senior or junior in lien to this Mortgage, other than the lien of (i) this
Mortgage and (ii) the Permitted Liens (including easements, rights-of-way,
restrictions, encroachments, minor defects or irregularities in title and other
similar charges, in each case which do not and will not interfere in any
material respect with the use or value thereof; provided, however,
that Mortgagor shall give Mortgagee at least twenty (20) days prior written
notice of any Permitted Lien described in the parenthetical to clause (ii) above
which is to be created after the date hereof together with a reasonably
detailed description thereof; and provided, further, that nothing
contained in this Paragraph shall require Mortgagor to pay any real estate
taxes or other Impositions prior to the time when same are required to be paid
under this Mortgage.  Mortgagor will keep
and maintain all of the Premises free from all liens of Persons supplying labor
or materials relating to the construction, alteration, modification or repair
of the Premises.  If any such lien shall
be filed against any of the Property, Mortgagor agrees to discharge the same of
record (by payment, bonding or otherwise) within 10 days of notice of the
filing thereof.  No financing statement,
conditional bill of sale or chattel mortgage shall be made or filed against any
Building Equipment without the prior consent of Mortgagee and if at any time
there should be any (with or without the consent of Mortgagee), then upon the
occurrence and during the continuance of an Event of Default, all right, title
and interest of Mortgagor in and to all deposits and payments made thereon are
hereby assigned to Mortgagee.

 

33.                       Change in
Taxation      In the event of
the enactment of or change in (including, without limitation, a change in
interpretation of) any applicable law (a) deducting or allowing Mortgagor
to deduct from the value of the Property for the purpose of taxation any lien
or security interest thereon, (b) imposing, modifying or deeming
applicable any reserve or special requirement against deposits in or for the
account of, or loans by, or other liabilities of, or other assets held by
Mortgagee or any of the Secured Parties, or (c) subjecting Mortgagee or
any of the Secured Parties to any tax or changing the basis of taxation of
mortgages, deeds of trust, or other liens or debts secured thereby, or the
manner of collection of such taxes, in each such case, so as to affect this
Mortgage, the Obligations, Mortgagee or any of the Secured Parties, and the
result is to increase the taxes imposed upon or the cost to Mortgagee or any of
the Secured Parties of maintaining the Obligations, or to reduce the amount of
any payments receivable hereunder or under the other Credit Documents, then,
and in any such event, Mortgagor shall, on demand, pay to Mortgagee for the
account of Mortgagee or any of the Secured Parties, as the case may be, such
additional amounts as may be required to compensate for such increased costs or
reduced amounts, provided that if any such payment or reimbursement shall be
unlawful or would constitute usury under applicable law, then Mortgagee may, at
its option, require Mortgagor to make a partial repayment of the Obligations in
an amount equal to the then value of the Premises.

 

15

 

34.                       Assignment of
Leases and Rents      Mortgagor
absolutely and unconditionally assigns to Mortgagee the Rents, issues and
profits of the Premises as further security for the payment of the Obligations
and Mortgagor grants to Mortgagee during the existence of an Event of Default
the right to enter the Premises for the purpose of collecting the same and to
let the Premises, or any part thereof, and, except as otherwise provided in the
Credit Agreement, to apply said Rents, issues and profits, after payment of all
necessary charges and expenses, on account of the Obligations.  This assignment and grant shall continue in
effect until the payment in full of the Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit.  Mortgagee
hereby waives the right to enter the Premises for the purpose of collecting
said Rents, issues and profits, and Mortgagor shall be entitled to collect,
receive and use said Rents, issues and profits, until the occurrence and during
the continuance of and Event of Default. 
During the continuance of any Event of Default, the right of Mortgagor
to collect, receive and use said Rents, issues and profits, shall be revoked
forthwith.  Further, from and after
delivery of written notice of such revocation, constructive possession of the
Premises shall be vested in Mortgagee, and this assignment shall be activated
and perfected.  Notwithstanding the
foregoing, this assignment shall also be activated and perfected upon Mortgagee’s
exercising, upon the occurrence and during the continuance of an Event of
Default, any of the following remedies pursuant to this Mortgage:  (i) taking actual possession of the
Premises; (ii) moving or applying for the appointment of a receiver; (iii) filing
or commencing an action to foreclose this Mortgage; or (iv) collecting the
Rents directly from the tenant(s). 
Mortgagor shall, from time to time after request by Mortgagee, execute,
acknowledge and deliver to Mortgagee, in form reasonably satisfactory to
Mortgagee, separate assignments effectuating the foregoing.  Neither Mortgagee nor the Secured Parties
shall be obligated to perform or discharge any obligation or duty to be
performed or discharged by Mortgagor under any Lease or other agreement
affecting all or any part of the Premises, and Mortgagor hereby agrees to
indemnify Mortgagee and the Secured Parties for and hold them harmless from,
any and all liability arising from any such Lease or other agreement or any
assignments thereof, and no assignment of any such Lease or other agreement
shall place the responsibility for the control, care, management or repair of
all or any part of the Premises upon Mortgagee or the Secured Parties, nor make
Mortgagee or the other Secured Parties liable for any negligence in the
management, operation, upkeep, repair or control of all or any part of the
Premises resulting in injury, death or property damage.  In addition, after the occurrence and during
the continuance of an Event of Default and following the giving of notice to
Mortgagor, Mortgagor will pay monthly in advance to Mortgagee, or to any
receiver appointed to collect said Rents, issues and profits, the fair and
reasonable rental value for the use and occupancy of the Premises or of such
part thereof as may be in the possession of Mortgagor, and upon default in any
such payment will vacate and surrender the possession thereof to Mortgagee or
to such receiver, and in default thereof may be evicted by summary or other
proceedings.

 

35.                       Security
Agreement      It is the
intention of the parties hereto that this instrument shall constitute a
Security Agreement and a Financing Statement within the meaning of the Uniform
Commercial Code as enacted in the state in which the Land is located with
respect to the personalty and fixtures comprising a part of the Property, 

 

16

 

and
that a security interest shall attach thereto for the benefit of Mortgagee, as
secured party, to further secure the Obligations.  Mortgagor hereby authorizes Mortgagee to file
financing and continuation statements with respect to such collateral in which
Mortgagor has a mortgageable interest, without the signature of Mortgagor
whenever lawful, and upon request, Mortgagor shall promptly execute financing
and continuation statements in form satisfactory to Mortgagee to further
evidence and secure Mortgagee’s interest in such collateral, and shall pay all
filing fees in connection therewith.  In
the event of the occurrence and during the continuance of an Event of Default,
Mortgagee, pursuant to the applicable provision of the Uniform Commercial Code,
shall have the option of proceeding as to both real and personal property in
accordance with its rights and remedies in respect of the real property, in
which event the default provisions of the Uniform Commercial Code shall not
apply.  The parties agree that in the
event Mortgagee elects to proceed with respect to collateral constituting
personalty or fixtures separately from the real property, without demand,
notice or advertisement whatsoever except that where an applicable statute
requires reasonable notice of sale or the dispositions, the giving of ten (10) days’
notice by Mortgagee to Mortgagor, shall be deemed to be reasonable notice
thereof and Mortgagor waives any other notice with respect thereto.

 

36.                       No Release      Neither
Mortgagor nor any other Person now or hereafter obligated for the payment or
performance of all or any portion of the Obligations shall be released from
paying such Obligations and the lien of this Mortgage shall not be affected by
reason of (a) the failure of Mortgagee or any of the Secured Parties to
comply with any request of Mortgagor, or of any other Person so obligated, to
take action to foreclose this Mortgage or otherwise enforce any of the
provisions of this Mortgage or of any of the covenants and agreements of
Mortgagor under the Credit Documents, (b) the release, regardless of
consideration, of the whole or any part of the security held for the
Obligations, (c) the release, regardless of consideration, of the
obligations of any Person or Persons liable for payment or performance of all
or any portion of the Obligations, or (d) any agreement or stipulation
extending the time of payment or modifying the terms of any of the Credit
Documents, and in the event of such agreement or stipulation, Mortgagor and all
such other Persons shall continue to be liable under the Credit Documents, as
amended by such agreement or stipulation, unless expressly released and
discharged in writing by Mortgagee and the Secured Parties.

 

37.                       Notices  All
notices, consents and other communications provided for herein shall be sent to
such Person’s address as follows (or to such other address indicated in an
unrevoked written notice from such Person given in accordance the terms of this
Paragraph):

 

(a)                        if to Mortgagor, Douglas Dynamics, L.L.C., 7777 North 73rd Street, Milwaukee,
WI  53223, Attention: Chief Executive
Officer and President, Telecopy No.: 
(414) 354-8448, with a copy to Aurora Capital Group, 10877 Wilshire
Boulevard, Suite 2100, Los Angeles, CA 
90024, Attention: Secretary, Douglas Dynamics Holdings, Inc.,
Telecopier No.: (310) 824-2791, with a copy to Gibson, Dunn & Crutcher
LLP, 333 S. Grand Avenue, Los Angeles, CA 
90071, Attention: Jeff R. Hudson, Esq., Telecopy No.: 213-229-6332;
and

 

17

 

(b)                       if to Mortgagee or Collateral Agent, at Credit Suisse, Cayman
Islands Branch, Eleven Madison Avenue, New York, NY  10010, Attention: Ian Nalitt, Telecopy
No.:  (212) 325-8615, with a courtesy
copy to Skadden Arps Slate Meagher & Flom LLP, 300 South Grand Avenue,
Suite 3400, Los Angeles, CA 
90071-3144, Attention: David S. Kitchen, Esq., Telecopy No.: (213)
621-5280; and

 

(c)                        if to any of the Secured Parties, at the address set forth
below such Secured Party’s name on the signature pages of the Credit
Agreement.

 

Each
notice hereunder shall be in writing and may be personally served, telexed or
sent by telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service and
signed for against receipt thereof, upon receipt of telefacsimile or telex, or
three (3) Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided, no notice to Mortgagee
shall be effective until received by Mortgagee.

 

38.                       Severability      In
case any provision in or obligation hereunder shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

 

39.                       Intentionally
Deleted

 

40.                       Indemnification
Against Liabilities      Mortgagor will
defend, indemnify, pay and hold harmless Mortgagee and the Secured Parties and
their respective officers, partners, directors, trustees, employees, agents and
Affiliates of Mortgagee and each of the Secured Parties from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind
(including, without limitation, reasonable attorneys’ fees and expenses)
imposed upon or incurred by or asserted against Mortgagee and any of the
Secured Parties by reason of (a) ownership of a mortgagee’s or
participating lender’s interest in the Property, (b) any accident or
injury to or death of Persons or loss of or damage to or loss of the use of
property occurring on or about the Premises or any part thereof or the
adjoining sidewalks, curbs, vaults and vault spaces, if any, streets, alleys or
ways, unless due to the willful misconduct of Mortgagee or such Secured Party, (c) any
use, nonuse or condition of the Premises or any part thereof or the adjoining
sidewalks, curbs, vaults and vault spaces, if any, streets, alleys or ways, (d) any
failure on the part of Mortgagor to perform or comply with any of the terms of
this Mortgage, (e) performance of any labor or services or the furnishing
of any materials or other property in respect of the Premises or any part
thereof made or suffered to be made by or on behalf of Mortgagor, (f) any
negligence or tortious act on the part of Mortgagor or any of its agents,
contractors, lessees, licensees or invitees, or (g) any work in connection
with any alterations, changes, new construction or demolition of the
Premises.  All amounts payable to
Mortgagee and the Secured Parties under this Paragraph shall be payable
promptly on demand and shall be deemed indebtedness and Obligations secured by
this Mortgage and any such amounts shall bear interest at the default interest
rate specified in Section 2.9 of the Credit Agreement from the date
of such demand.  In case any action, suit
or proceeding is 

 

18

 

brought
against Mortgagor, Mortgagee and/or any of the Secured Parties by reason of any
such occurrence, Mortgagor, upon request of Mortgagee or any of the Secured
Parties will, at Mortgagor’s expense, resist and defend such action, suit or
proceeding or cause the same to be resisted or defended by counsel designated
by Mortgagee or such Secured Party and approved by Mortgagor.

 

41.                       No Oral Changes         This
Mortgage and its provisions cannot be changed, waived, discharged or terminated
orally but only by an agreement in writing, signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.

 

42.                       Governing Law THE
PROVISIONS OF THIS MORTGAGE REGARDING THE CREATION, PERFECTION AND ENFORCEMENT
OF THE LIENS AND SECURITY INTERESTS HEREIN GRANTED SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.  ALL OTHER PROVISIONS OF THIS MORTGAGE AND THE
RIGHTS AND OBLIGATIONS OF MORTGAGOR AND MORTGAGEE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPALS THEREOF.

 

43.                       Construction       This
Mortgage shall be construed without regard to any presumption or rule requiring
construction against the party causing such instrument or any portion thereof
to be drafted.

 

44.                       Headings          Paragraph headings
herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive
effect.

 

45.                       After Acquired
Property           All
property of every kind which is hereafter acquired by Mortgagor which, by the
terms hereof, is required or intended to be subjected to the lien of this
Mortgage shall, immediately upon the acquisition thereof by Mortgagor, and
without any further giving of a deed of trust and/or mortgage, conveyance,
assignment or transfer, become subject to the lien of this Mortgage.

 

46.                       Further
Assurances        Mortgagor
shall execute, acknowledge and deliver to Mortgagee any documents and
instruments which Mortgagee may reasonably request from time to time for the
better assuring, conveying, assigning, transferring, confirming or perfecting
of Mortgagee’s security and rights under this Mortgage, in form and substance
reasonably satisfactory to Mortgagee.

 

47.                       Definitions         The
following terms shall, for all purposes of this Mortgage, have the respective
meanings herein specified unless the context otherwise requires and such
meanings shall apply equally to the singular and plural forms of such defined
terms unless a definition is provided herein for both the singular and plural
form of such defined term:

 

19

 

(a)                        “Lease”
shall mean every lease or occupancy agreement for the use or hire of all or any
portion of the Premises, which shall be in effect at the date hereof or which
shall hereafter be entered into by or on behalf of Mortgagor.

 

(b)                       “Rents”
shall mean all rents, rent equivalents, moneys payable as damages or in lieu of
rent or rent equivalents, royalties (including, without limitation, all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for
the account of or benefit of Mortgagor or its agents or employees from any and
all sources arising from or attributable to the Land and the Building,
including, without limitation, all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter
arising or created out of the sale, lease, sublease, license, concession or
other grant of the right of the use and occupancy of property, and proceeds, if
any, from business interruption or other loss of income insurance.

 

48.                       Successors and
Assigns           The
terms, covenants and provisions of this Mortgage shall apply to and be binding
upon Mortgagor and the successors and assigns of Mortgagor and shall inure to
the benefit of Mortgagee, the Secured Parties and their respective successors
and assigns.  All grants, covenants,
terms, provisions, and conditions contained herein shall run with the Land.

 

49.                       Credit
Agreement        In
the event of any inconsistency or conflict between the terms and provisions of
the Credit Agreement and this Mortgage, the terms and provisions of the Credit
Agreement shall control.

 

50.                       WAIVER OF JURY
TRIAL      MORTGAGOR AND MORTGAGEE HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS MORTGAGE AND ACKNOWLEDGE THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
RELIED ON THIS WAIVER IN ENTERING INTO THIS MORTGAGE, AND THAT EACH WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR FUTURE DEALINGS.  MORTGAGOR AND MORTGAGEE REPRESENT AND WARRANT
THAT EACH HAS HAD AN OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL
COUNSEL AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

20

 

IN WITNESS WHEREOF, Mortgagor has caused this
Mortgage to be executed under seal as of the day and year first above written.

 

 

	
   

  	
  Mortgagor:

  
	
   

  	
   

  
	
   

  	
  DOUGLAS
  DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

ACKNOWLEDGMENT

 

	
  STATE
  OF 

  	
  )

  
	
   

  	
  )ss.

  
	
  COUNTY
  OF 

  	
  )

  

 

Personally
came before me this
           day of May, 2007
the above named
                                          ,
the
                                
of Douglas Dynamics, L.L.C. to me known to be the person(s) who executed
the foregoing instrument and acknowledged the same.

 

 

 

*

 

Notary
Public, State of

My
Commission expires:

,
                .)

 

* Names of persons signing in any
capacity must be typed or printed below their signature.

 

22

 

Exhibit A

 

Description of the Land

 

A parcel of land in the Northwest One-quarter (1/4) of
Section Fifteen (15), Township Eight (8) North, Range Twenty-one (21)
East, in the City of Milwaukee, Milwaukee County, Wisconsin, more particularly
described as follows: Commencing at the Southwest corner of said 1/4 Section;
running thence North along the West line of said 1/4 Section, 1328.24 feet to a
point in the extended center line of a 20 foot sewer easement; thence North
88°54'49" East along said center line of the 20 foot sewer easement and
its extension, 468:61 feet to the point of beginning of the land to be
described; thence South 0°01'16" East, 1055.57 feet to a point; thence
North 88°57'47" East, 408.99 feet to a point in the present West line of North
73rd Street; thence North 0°02'25" West along the said present West line
of North 73rd Street, 1055.90 feet to a point; thence South 88°54'49" West
along the center line of a 20 foot sewer easement, 408.60 feet to the point of
beginning.

 

23

 

Schedule B

 

Existing Liens

 

1.               All those exceptions to
title set forth on Schedule B to Loan Policy No. 440270M issued by Lawyers
Title Insurance Corporation.

 

2.               Those liens and security
interests granted in favor of the ABL Collateral Agent disclosed by the
Intercreditor Agreement.

 

THIS
INSTRUMENT WAS DRAFTED BY:

 

Kevin
Oliver, Esq.

Skadden,
Arps, Slate, Meagher, & Flom LLP

300
South Grand Avenue

Los
Angeles, California 90071

 

24

 

Maximum principal indebtedness for 

Tennessee Recording Tax purposes 

is $7,000,000.

 

DEED OF TRUST, ASSIGNMENT OF LEASES,

RENTS AND PROFITS AND SECURITY AGREEMENT

 

 

DOUGLAS DYNAMICS, L.L.C.

 

Grantor

 

to

 

FREDERIC H. BRANDT, ESQ., 

a resident of Washington County, Tennesee

 

Trustee

 

for the benefit of

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH

in its capacity as Collateral Agent for the Secured Parties

Eleven Madison Avenue

New York, New York 10010

 

Beneficiary

 

 

DATED:  As of May 21, 2007

 

 

Premises located in:

Washington County, Johnson City, Tennessee

 

Record and Return to:

Skadden Arps Slate Meagher & Flom LLP

300 South Grand Avenue

Los Angeles, California 90071

Attn: Eric Lee, Esq.

 

 

INDEX

 

	
   

  	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Payment of Obligations and Performance of Covenants and
  Agreements

  	
  7

  
	
  2.

  	
   

  	
  Title to Property

  	
  7

  
	
  3.

  	
   

  	
  Intercreditor Agreement

  	
  7

  
	
  4.

  	
   

  	
  Future Advances

  	
  8

  
	
  5.

  	
   

  	
  Insurance

  	
  8

  
	
  6.

  	
   

  	
  Impositions

  	
  8

  
	
  7.

  	
   

  	
  Maintenance and Alterations

  	
  9

  
	
  8.

  	
   

  	
  Leasing

  	
  9

  
	
  9.

  	
   

  	
  Recording, Filing and Other Fees

  	
  9

  
	
  10.

  	
   

  	
  Taxes Imposed on Beneficiary and
  the Secured Parties

  	
  10

  
	
  11.

  	
   

  	
  Compliance with Laws, etc.

  	
  10

  
	
  12.

  	
   

  	
  Inspection

  	
  10

  
	
  13.

  	
   

  	
  Certificate of Grantor

  	
  10

  
	
  14.

  	
   

  	
  Condemnation

  	
  10

  
	
  15.

  	
   

  	
  Restoration

  	
  11

  
	
  16.

  	
   

  	
  Default

  	
  11

  
	
  17.

  	
   

  	
  Beneficiary’s Right to Perform
  Grantor’s Covenants

  	
  11

  
	
  18.

  	
   

  	
  Contemporaneous Mortgages

  	
  12

  
	
  19.

  	
   

  	
  Appointment of Attorney-in-Fact

  	
  12

  
	
  20.

  	
   

  	
  Power of Sale

  	
  13

  
	
  21.

  	
   

  	
  Application of Proceeds of
  Foreclosure and Other Remedies

  	
  14

  
	
  22.

  	
   

  	
  Waiver of Redemption Rights

  	
  14

  
	
  23.

  	
   

  	
  Judicial Foreclosure

  	
  14

  
	
  24.

  	
   

  	
  Sale in Parcels

  	
  15

  
	
  25.

  	
   

  	
  Notice Upon Acceleration

  	
  15

  
	
  26.

  	
   

  	
  Possession of Premises

  	
  15

  
	
  27.

  	
   

  	
  Expenses of Beneficiary and/or
  the Secured Parties

  	
  16

  
	
  28.

  	
   

  	
  Grantor’s Waivers

  	
  16

  
	
  29.

  	
   

  	
  Partial Foreclosure

  	
  17

  
	
  30.

  	
   

  	
  No Waiver; Rights Cumulative

  	
  17

  
	
  31.

  	
   

  	
  Attorneys’ Fees

  	
  17

  
	
  32.

  	
   

  	
  Interest After Maturity

  	
  17

  
	
  33.

  	
   

  	
  No Credit for Taxes

  	
  17

  
	
  34.

  	
   

  	
  Liens

  	
  17

  
	
  35.

  	
   

  	
  Change in Taxation

  	
  18

  
	
  36.

  	
   

  	
  Assignment of Leases and Rents

  	
  18

  
	
  37.

  	
   

  	
  Security Agreement

  	
  19

  
	
  38.

  	
   

  	
  No Release

  	
  20

  
	
  39.

  	
   

  	
  Notices

  	
  20

  
	
  40.

  	
   

  	
  Severability

  	
  21

  
	
  41.

  	
   

  	
  Intentionally Deleted

  	
  21

  
	
  42.

  	
   

  	
  Indemnification Against
  Liabilities

  	
  21

  
					

 

 

	
  43.

  	
   

  	
  No Oral Changes

  	
  22

  
	
  44.

  	
   

  	
  Governing Law

  	
  22

  
	
  45.

  	
   

  	
  Construction

  	
  22

  
	
  46.

  	
   

  	
  Headings

  	
  22

  
	
  47.

  	
   

  	
  After Acquired Property

  	
  22

  
	
  48.

  	
   

  	
  Further Assurances

  	
  22

  
	
  49.

  	
   

  	
  Definitions

  	
  22

  
	
  50.

  	
   

  	
  Successors and Assigns

  	
  23

  
	
  51.

  	
   

  	
  Credit Agreement

  	
  23

  
	
  52.

  	
   

  	
  Trustee

  	
  23

  

 

Exhibit A                Description of the Land

Exhibit B                Existing Liens

 

3

 

DEED
OF TRUST, ASSIGNMENT OF LEASES,  RENTS
AND PROFITS

AND
SECURITY AGREEMENT

 

THIS DEED OF TRUST, ASSIGNMENT OF
LEASES, RENTS AND PROFITS AND SECURITY AGREEMENT (this “Deed of Trust”) made as of this 21st day of May, 2007 by DOUGLAS DYNAMICS, L.L.C. (formerly known as New DD, LLC), a
Delaware limited liability company having an office at 7777 North 73rd Street, Milwaukee, Wisconsin 53223 (the “Grantor”), to FREDERIC H. BRANDT, a resident of Washington County,
Tennessee, whose address is c/o Brandt and Beeson, P.C., 206 Princeton Road, Suite 25,
Johnson City, TN 37601 (including any successor trustee at the time of acting
as such hereunder, the “Trustee”),
for the benefit of CREDIT SUISSE, CAYMAN
ISLANDS BRANCH (“Credit Suisse”),
as collateral agent (in such capacity, and together with its successors and
assigns, the “Beneficiary”),
having an office at Eleven Madison Avenue, New York, New York 10010, for the
Secured Parties (as such term and other capitalized terms used but not
otherwise defined herein are defined in the Credit Agreement, defined below).

 

THIS INSTRUMENT COVERS PROPERTY WHICH IS OR MAY BECOME SO AFFIXED
TO THE REAL PROPERTY AS TO BECOME FIXTURES AND ALSO CONSTITUTES A UCC FINANCING
STATEMENT FILED AS A FIXTURE FILING UNDER § 47-9-502 OF TENNESSEE CODE
ANNOTATED.

 

GRANTOR IS THE RECORD OWNER OF THE PROPERTY DESCRIBED IN EXHIBIT A.

 

THE BENEFICIARY EXPRESSLY OBJECTS TO THE PRIORITY OF ANY MECHANICS’ OR
MATERIALMEN’S LIENS IMPOSED SUBSEQUENT TO THE DATE OF THE RECORDATION OF THIS
DEED OF TRUST AS SUCH PRIORITY WOULD OTHERWISE BE ALLOWED PURSUANT TO THE TERMS
OF T.C.A. § 66-11-108.

 

NOTICE PURSUANT TO § 47-28-104 OF TENNESSEE CODE ANNOTATED:  THIS DEED OF TRUST SECURES FUTURE ADVANCES
WHICH ARE “OBLIGATORY ADVANCES” WITHIN THE MEANING OF THE AFORESAID
STATUTE.  THIS DEED OF TRUST IS FOR “COMMERCIAL
PURPOSES WITHIN THE MEANING OF SAID STATUTE.

 

W I T N E S S E T H:

 

WHEREAS, Grantor is
the owner of the fee interest in those certain parcels of land lying and being
situated in Washington County, Tennessee, as more particularly described in Exhibit A
attached hereto;

 

WHEREAS, Grantor, as
Borrower, Fisher, LLC, a Delaware limited liability company (“Fisher”), Douglas Dynamics Finance Company, a Delaware
corporation (“DD Finance”), and Douglas Dynamics
Holdings, Inc., a Delaware corporation (“Holdings”),
as Guarantors, the banks and financial institutions listed on the 

 

 

signature pages thereof
(together with their respective successors and assigns, each individually
referred to herein as a “Lender” and collectively as “Lenders”),
Credit Suisse, Cayman Islands Branch, as sole bookrunner, sole lead arranger,
syndication agent, documentation agent, administrative agent for the Lenders (“Term Administrative Agent”), and as collateral agent for the
Lenders, have entered into that certain Credit and Guaranty Agreement, dated as
of May 21, 2007 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”), pursuant to which Lenders have agreed to make, and
Beneficiary has agreed to administer, certain credit facilities in an aggregate
amount not to exceed $85,000,000, which extensions of credit shall be used for
the purposes permitted under the Credit Agreement, upon the terms and
conditions contained in the Credit Agreement; and

 

WHEREAS, Grantor has
agreed to execute and deliver to Trustee for the benefit of Beneficiary this
Deed of Trust in order to secure Grantor’s performance of Grantor’s obligations
under the Credit Agreement and under any of the other Credit Documents;

 

NOW, THEREFORE, for and in
consideration of the mutual covenants herein contained and other good and
valuable consideration, including Beneficiary’s entering into the Credit
Agreement, the receipt and legal sufficiency of which are hereby expressly
acknowledged by all parties, to secure the full and complete payment and
performance of the Obligations, including Grantor’s performance of Grantor’s
obligations pursuant to the Credit Agreement, this Deed of Trust and the other
Credit Documents, Grantor and Beneficiary hereby agree as follows:

 

Grantor does hereby irrevocably GRANT, PLEDGE,
MORTGAGE, WARRANT, SELL, TRANSFER, ASSIGN, and CONVEY unto Trustee and Trustee’s
successors, assigns and substitutes in trust hereunder, with covenants of
general warranty and WITH POWER OF SALE
and right of entry and possession, for the use and benefit of Beneficiary, as
collateral agent for the Lenders, the real and personal property, rights,
titles, interests and estates constituting the Property (defined below),
subject, however, to the Permitted Liens and Existing Liens (defined below) TO HAVE AND TO HOLD the Property unto
Trustee and Trustee’s successors, assigns and substitutes in trust hereunder,
subject to the terms and conditions of this Deed of Trust, WITH POWER OF SALE, forever, and Grantor
does hereby bind itself, its successors and assigns to WARRANT AND FOREVER
DEFEND the title to the Property unto Beneficiary against every person
whomsoever lawfully claiming or to claim the same or any part thereof other
than any person claiming by, through or under Beneficiary; provided, however,
that if Grantor (i) shall perform all obligations hereunder and (ii) the
Obligations are paid in full, the Commitments are cancelled or terminated and
all outstanding Letters of Credit are cancelled or have expired, then the
liens, security interests, estates and rights granted by this Deed of Trust
shall be terminated by Beneficiary by execution of a discharge of this Deed of
Trust in recordable form and delivery of the discharge to Grantor or Grantor’s
designee.

 

All of the foregoing being
collectively referred to as the “Property”:

 

5

 

A.            All that
certain land located in Washington County, Tennessee and more particularly
described in Exhibit A annexed hereto and made a part hereof
(collectively, the “Land”).

 

B.            All the
buildings, structures and improvements, now or at any time hereafter erected on
the Land or any part thereof (collectively, the “Buildings”).

 

C.            All
machinery, apparatus, equipment, personal property and fixtures of every kind
and nature whatsoever now or hereafter located in, on or about any one or more
of the Buildings or upon the Land, or attached to or used or useable in
connection with the operation or maintenance of the Land or any one or more of
the Buildings, or any part thereof, and now owned or hereafter acquired
(collectively, the “Building Equipment”;
the Land, the Buildings and the Building Equipment being hereafter sometimes
collectively referred to as the “Premises”).

 

D.            All right,
title and interest of Grantor, whether now owned or hereafter acquired, in and
to any opened or proposed avenues, streets, roads, public places, sidewalks,
alleys, strips or gores of land, in front of or adjoining the Land or any one
or more of the Buildings and all easements, tenements, hereditament,
appurtenances, rights and rights of way, public or private, pertaining or
belonging to the Land or any one or more of the Buildings.

 

E.             All
insurance proceeds and all awards and payments, subject to applicable
provisions of this Deed of Trust, including interest thereon, and the right to
receive the same, which may be made in respect of all or any part of any of the
Premises or any estate or interest therein or appurtenant thereto, as a result
of damage to or destruction of all or any part of any of the Premises, the exercise
of the right of condemnation or eminent domain, the closing of, or the
alteration of the grade of, any street on or adjoining the Land, or any other
injury to or decrease in the value of all or any part of any of the Premises.

 

F.             All
right, title and interest of Grantor in and to any and all present and future
Leases (as defined in Paragraph 49) of all or any part of the Premises,
and in and to the rents, issues and profits payable thereunder and cash or
securities deposited thereunder as lessees’ security deposits.

 

G.            All
franchises, permits, licenses and rights therein respecting the use, occupation
and operation of the Premises or the activities conducted thereon or therein.

 

H.            All right,
title and interest of Grantor in and to any minerals, oil or gas located on,
under or appurtenant to the Land.

 

I.              All
right, title and interest of Grantor in and to any tax refunds with respect to
the Premises.

 

J.             To the
extent assignable, all of Grantor’s interest in and to all agreements,
contracts, certificates, instruments and other documents, now or hereafter
entered into, 

 

6

 

pertaining to the construction, operation or management of
the Premises and all right, title and interest of Grantor therein (collectively,
the “Contracts”).

 

K.                                 All of Grantor’s interest in and to all easements, rights,
licenses, privileges and appurtenances including, without limitation,
development and air rights now or hereafter belonging or in any way
appertaining to the Land.

 

L.                                      All of the estate and rights of Grantor now or hereafter
acquired in and to land lying in streets, roads, ways and alleys, open or
proposed, adjoining or contiguous to the Land.

 

M.                                 The rents, issues and profits of any of the foregoing.

 

AND GRANTOR COVENANTS, REPRESENTS AND WARRANTS TO
AND FOR THE BENEFIT OF TRUSTEE, BENEFICIARY AND THE SECURED PARTIES AS FOLLOWS:

 

1.          Payment of Obligations and Performance of Covenants and
Agreements    Grantor shall pay or
perform the Obligations when due in accordance with the provisions of the
Credit Agreement, this Deed of Trust, and the other Credit Documents and
perform the covenants and agreements of Grantor set forth in the Credit
Documents.

 

2.          Title to Property      Grantor
represents and warrants that (a) it owns good and marketable fee simple
title to the Premises, (b) it has the good and unrestricted right, full
power and lawful authority to make this Deed of Trust in accordance with the
terms hereof, (c) Grantor has obtained any and all consents and approvals
necessary or required for the making of this Deed of Trust, and the making of
this Deed of Trust will not violate any contract or agreement to which Grantor
is a party or by which the Property is bound, and (d) the Premises is free
of all liens, encumbrances, adverse claims and other defects of title
whatsoever except those items listed on Exhibit B annexed hereto and made
a part hereof (collectively, the “Existing
Liens”) and Permitted Liens. 
Grantor does hereby and shall forever warrant and defend its title to
and interest in the Property and the validity and priority of the lien of this
Deed of Trust, subject to the Existing Liens and the Permitted Liens, to
Beneficiary and the Secured Parties, their respective successors and assigns,
against all claims and demands whatsoever of any Person or Persons.  As of the date hereof, there are no defenses
or offsets to this Deed of Trust or to the Obligations.

 

3.          Intercreditor Agreement         Notwithstanding anything herein to the contrary, and
regardless of the priority of recordation of this Deed of Trust, the lien and
security interests granted to the Beneficiary pursuant to this Deed of Trust
and the exercise of any right or remedy by such Beneficiary hereunder are
subject to the provisions of that certain Intercreditor Agreement, dated as of May 21,
2007 (the “Intercreditor Agreement”), by and
among Grantor, Fisher, DD Finance, Holdings, Beneficiary, Term Administrative
Agent, Credit Suisse, in its capacity as administrative agent under the ABL
Loan Documents (as defined therein), and JPMorgan Chase Bank,

 

7

 

N.A.,
in its capacity as collateral agent under the ABL Loan Documents (together with
its successors and assigns from time to time in such capacity, the “ABL Collateral Agent”).  In the event of any conflict between the
terms of the Intercreditor Agreement and this Deed of Trust, the terms of the
Intercreditor Agreement shall govern.

 

4.          Future Advances    Without
limiting the generality of any other provision hereof, or the terms and
provisions of the Credit Agreement, the Obligations shall include, without
limitation:  (a) all existing
indebtedness of Grantor to Beneficiary and/or any of the Secured Parties
evidenced by any of the Credit Documents; (b) all future advances that may
subsequently be made by Beneficiary and/or the Lenders as provided by any of
the Credit Documents; and (c) all other indebtedness, if any, of Grantor
to Beneficiary and/or any of the Secured Parties now due or to become due or
hereafter contracted pursuant to any of the Credit Documents; provided
that the maximum principal amount of all existing indebtedness, future
advances, readvances of sums repaid and all other indebtedness secured hereby
at any one time shall not exceed the total sum of $7,000,000  (exclusive of interest thereon, attorneys’ fees and costs,
taxes, insurance premiums and all other obligations hereunder).

 

5.          Insurance

 

(a)        Grantor
shall maintain in full force and effect with respect to the Premises the
insurance as required by Section 5.5 of the Credit Agreement.

 

(b)        In the
event of a foreclosure of this Deed of Trust or other action or proceeding
taken by Beneficiary pursuant to this Deed of Trust, the purchaser of the
Premises shall succeed to all of the rights of Grantor, including any right to
unearned premiums, in and to all policies of insurance which Grantor is
required to maintain under Paragraph 5(a) and to all proceeds of
such insurance.

 

6.          Impositions

 

(a)        Grantor
shall pay, not later than the final delinquency date thereof, all real estate
taxes, personal property taxes, assessments, water rates and sewer rents,
license fees, all charges which may be imposed for the use of vaults, chutes,
areas and other space beyond the lot line and abutting the public sidewalks in
front of or adjoining the Land, and any other amounts which could be or become
a lien upon or against the Property or any part thereof (collectively, the “Impositions”); provided, no such
Imposition need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as adequate reserve or
other appropriate provision, as shall be required in conformity with GAAP shall
have been made therefor.  Notwithstanding
the foregoing, Grantor shall promptly, and in any event on demand, pay such
contested Imposition if at any time all or any part of the Property shall be in
danger of being foreclosed, sold, forfeited, or otherwise lost or if such
contest shall be discontinued.  During
the continuance of any Event of Default, upon demand by Beneficiary, Grantor
will pay the whole of any assessment (an “Assessment”)
for local improvements which may be payable in installments, notwithstanding
that such installments may not be due and payable at the time of such demand.

 

8

 

(b)        Grantor
shall, upon request of Beneficiary, deliver to Beneficiary, within twenty (20)
days after the final delinquency date thereof of any Imposition or Assessment,
receipts evidencing such payment or other proof of payment satisfactory to
Beneficiary.

 

7.          Maintenance and Alterations    Grantor
will maintain or cause to be maintained in good repair, working order and
condition, ordinary wear and tear excepted, the Premises and from time to time
will make or cause to made all appropriate repairs, renewals and replacements
thereof.

 

8.          Leasing   Grantor represents that
there are no Leases now in effect. 
Grantor shall not enter into any Lease of all or any part of any of the
Premises without in each instance obtaining Beneficiary’s prior written consent
thereto, which consent shall not be unreasonably withheld, conditioned or
delayed.  Grantor shall deliver to
Beneficiary a duplicate original of each Lease promptly after the execution
thereof.  At the option of Beneficiary,
each Lease, and all renewals, replacements, extensions, and modifications
thereof, and all rights of the tenant thereunder, shall be subject and
subordinate to this Deed of Trust, and to each and every advance made or
thereafter made hereunder or under the other Credit Documents and to all
renewals, additions, amendments, supplements, modifications, consolidations,
spreaders, replacements, and extensions of this Deed of Trust and shall contain
provisions obligating the tenants thereunder to attorn to Beneficiary or any
purchaser therefrom if Beneficiary or such purchaser succeeds to the interest
of Grantor under such Lease.  Grantor
shall fully and promptly perform all of the obligations to be performed by the
lessor under any and all Leases.  Grantor
shall enforce the performance and observance of each and every obligation to be
performed or observed by the lessees under such Leases.  Grantor shall give prompt notice to
Beneficiary of (a) any notice received by Grantor of any default by the
lessor under any Lease, (b) the commencement of any action or proceeding
by any lessee the purpose of which shall be the cancellation of any Lease or a
diminution or abatement of the rent payable thereunder, (c) any notice of
default given by Grantor to the lessee under any Lease, or (d) the
interposition by any lessee of any defense or counterclaim in any action or
proceeding brought by Grantor against such lessee; and Grantor will cause a
copy of any process, pleading or notice received or served by Grantor in
reference to any such action, defense or claim to be promptly delivered to
Beneficiary.  Grantor shall hold in trust
all security deposits and advance rent given on account of any Lease, and
deposit such security in a bank or trust company and shall not mingle such
funds with other funds.  Grantor shall
repay or apply such funds only in accordance with the provisions of the
applicable Leases.

 

9.          Recording, Filing and Other Fees         Grantor shall pay all recording and
filing fees, all recording taxes, and all other costs and expenses in
connection with the preparation, execution and recordation and other manner of
perfection of this Deed of Trust and any other Credit Documents, and shall
reimburse Beneficiary and each of the Secured Parties on demand for all costs
and expenses of any kind incurred by Beneficiary or any of the Secured Parties
in connection therewith (including, without limitation, reasonable attorneys’
fees and disbursements).  Grantor will,
at any time on request of Beneficiary, execute or cause to be executed
financing

 

9

 

statements,
continuation statements, or the like, in respect of any Building
Equipment.  Grantor shall pay all filing
fees, including fees for filing continuation statements, in connection with
such financing statements.

 

10.        Taxes Imposed on Beneficiary and the Secured Parties   Grantor shall pay all taxes (except income,
inheritance and franchise taxes, taxes on the receipt of debt service payments,
or taxes in lieu of any of the foregoing) imposed on Beneficiary or any of the
Secured Parties by reason of its ownership of this Deed of Trust or any of the
other Credit Documents.

 

11.        Compliance with Laws, etc.   Grantor shall comply with the requirements of all applicable laws,
rules, regulations and orders of any Governmental Authority (including
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

12.        Inspection                Beneficiary
and its authorized representatives shall have the right, at Beneficiary’s
option, at reasonable times during normal business hours and upon reasonable
prior written notice, and as often as may be reasonably requested, to enter the
Premises for the purpose of inspecting the same and any other Collateral.

 

13.        Certificate of Grantor     Grantor,
upon request of Beneficiary or any of the Secured Parties, shall certify to
Beneficiary or to such Secured Party or to any proposed assignee of or
participant in this Deed of Trust, by an instrument in form reasonably satisfactory
to Beneficiary or such Secured Party, duly acknowledged, the amount of the
Obligations then owing, whether any offsets or defenses exist against payment
or performance of all or any portion of the Obligations and anything else that
Beneficiary or such Secured Party might reasonably request, within ten (10) days
if the request is made personally, or within fifteen (15) days if the request
is made by mail.  Beneficiary, Secured
Parties and any actual or proposed assignee of or participant in this Deed of
Trust shall have the right to rely on such certification.

 

14.        Condemnation    Grantor shall give
notice to Beneficiary upon Grantor receiving written notice of the commencement
of any action or proceeding to take all or any part of the Premises by exercise
of the right of condemnation or eminent domain or of any action or proceeding
to close or to alter the grade of any street on or adjoining the Land.  Beneficiary may participate in any such
action or proceeding in the name of Beneficiary or, whenever necessary, in the
name of Grantor, and Grantor shall deliver to Beneficiary such instruments as
Beneficiary shall request to permit such participation.  Grantor shall not settle any such action or
proceeding or agree to accept any award or payment without the prior written
consent of Beneficiary (which consent shall not be unreasonably withheld,
conditioned or delayed), and such award or payment and any interest thereon
(hereinafter collectively called the “Award”)
shall be applied in accordance with Section 2.14(b) and Section 2.15
of the Credit Agreement.

 

(a)        The
application of any Award toward payment of the Obligations shall not be deemed
a waiver by Beneficiary or any of the Secured Parties of its right to receive
payment of the balance of the Obligations in accordance with the provisions of

 

10

 

the Credit Documents. 
Beneficiary shall have the right, but shall be under no obligation, to
question the amount of the Award, and Beneficiary may accept the same without
prejudice to the rights that Beneficiary may have to question such amount.  In any such condemnation or eminent domain
action or proceeding Beneficiary may be represented by attorneys selected by
Beneficiary, and all sums paid by Beneficiary in connection with such action or
proceeding (including, without limitation, reasonable attorneys’ fees to the
extent permitted by law) shall, on demand, be immediately due from Grantor to
Beneficiary and the same shall be secured by this Deed of Trust.

 

(b)        Notwithstanding
any taking by condemnation or eminent domain, closing of, or alteration of the
grade of, any street or other injury to or decrease in value of the Premises by
any public or quasi-public authority or corporation, the unpaid principal
portion of the Advances shall continue to bear interest at the rate payable
pursuant to the applicable Credit Documents until the Award shall have been
actually received by Beneficiary, and any reduction in the Obligations
resulting from the application by Beneficiary of the Award shall be deemed to
take effect only on the date of such receipt.

 

15.        Restoration           If
the Buildings or the Building Equipment shall be damaged or destroyed, in whole
or in part, by fire or other casualty, or by any taking in condemnation
proceedings or the exercise of any right of eminent domain, Grantor shall
promptly restore, replace or rebuild the same to as nearly as possible the
value, quality and condition they were in immediately prior to such fire or
other casualty or taking, with such alterations or changes as may be approved
in writing by Beneficiary which approval shall not be unreasonably withheld or
delayed, or apply the amount of any Award or insurance proceeds received with
respect thereto, in each case in accordance with Section 2.14(b) and
Section 2.15 of the Credit Agreement.  Grantor shall give prompt notice to
Beneficiary of any damage or destruction to the Buildings or Building Equipment
by fire or other casualty, as well as the initiation of any condemnation or
eminent domain proceeding affecting the same.

 

16.        Default

 

(a)        Any
Event of Default under the Credit Agreement shall constitute an Event of
Default hereunder and Beneficiary shall have all of the rights of the
Administrative Agent and Collateral Agent under the Credit Agreement and all of
the remedies hereunder.

 

(b)        All
notice and cure periods provided in the Credit Agreement shall run concurrently
with any notice and cure periods provided under applicable law.

 

17.        Beneficiary’s Right to Perform Grantor’s Covenants    If
there shall be an Event of Default, Beneficiary may, at its option, cure such
Event of Default, and Beneficiary and its representatives shall have the right
to enter the Premises to do so, and the amounts advanced by, and the other
costs and expenses of, Beneficiary in curing such Event of Default, with
interest from the time of the advances or payments at the Base

 

11

 

Rate
plus the Applicable Margin, shall, on demand, be immediately due from Grantor
to Beneficiary and shall be secured by this Deed of Trust.

 

18.        Contemporaneous Mortgages    THIS
DEED OF TRUST IS MADE CONTEMPORANEOUSLY WITH TWO (2) OTHER MORTGAGES OR
DEEDS OF TRUST OF EVEN DATE HEREWITH (as any of the same may be amended, supplemented,
restated, severed, consolidated, spread, partially released, increased or
otherwise modified from time to time, the “Contemporaneous
Mortgages”) GIVEN TO BENEFICIARY COVERING PROPERTY LOCATED IN THE
STATES OF MAINE AND WISCONSIN.  The
Contemporaneous Mortgages secure the Obligations.  Upon the occurrence of an Event of Default,
Beneficiary may proceed under this Deed of Trust and/or the Contemporaneous
Mortgages against any of such property and/or the Property in one or more
parcels and in such manner and order as Beneficiary shall elect.  Grantor hereby irrevocably waives and
releases, to the extent permitted by law, whether now or hereafter in force,
any right to have the property and/or the Property covered by the
Contemporaneous Mortgages marshaled upon any foreclosure of this Deed of Trust
or the Contemporaneous Mortgages.

 

19.        Appointment of Attorney-in-Fact        Grantor
hereby constitutes and appoints Beneficiary the true and lawful
attorney-in-fact, coupled with an interest, of Grantor and Grantor hereby
confers upon Beneficiary the right, in the name, place and stead of Grantor,
to, demand, sue for, attach, levy, recover and receive after the occurrence and
during the continuance of an Event of Default any of the Rents (as defined in Paragraph
49) and any premium or penalty payable upon the exercise by any third Person
under any Lease of a privilege of cancellation originally provided in such
Lease and to give proper receipts, releases and acquittances therefor and,
after deducting actual out of pocket expenses of collection, to apply the net
proceeds as provided in the Credit Agreement or otherwise reasonably determined
by Beneficiary after consultation with Grantor; and Grantor does hereby
authorize and direct any such third party to deliver such payment to
Beneficiary in accordance with this Deed of Trust, and Grantor hereby ratifies
and confirms all that its said attorney-in-fact, the Beneficiary, shall do or
cause to be done by virtue of the powers granted hereby.  The foregoing appointment is irrevocable and
continuing, and such rights, powers and privileges shall be exclusive in
Beneficiary, and its successors and assigns, so long as any part of the
Obligations other than any contingent indemnity and expense reimbursement
obligations for which a claim has not been made remain unpaid or unperformed
and undischarged.

 

Upon the occurrence and
during the continuance of an Event of Default, Grantor hereby
constitutes and appoints Beneficiary
the true and lawful attorney-in-fact, coupled with an interest, of Grantor and Grantor hereby confers
upon Beneficiary the right, in the name, place and stead of Grantor, to subject and subordinate at
any time and from time to time any Lease to the lien, assignment and security
interest of this Deed of Trust, or to any other mortgage, deed of trust,
assignment or security agreement, or to any ground lease or surface lease, with
respect to all or a portion of the Property, or to request or require such
subordination, where such reservation, option or authority was reserved to Grantor under any such Lease, or in
any case where Grantor otherwise
would have the right, power or privilege so to do.  The foregoing appointment is irrevocable and

 

12

 

continuing, and such rights,
powers and privileges shall be exclusive in Beneficiary, and its successors and assigns, so long as any part
of the Obligations other than any contingent indemnity and expense
reimbursement obligations for which a claim has not been made remain unpaid or
unperformed and undischarged.

 

20.        Power of Sale     Subject to
the terms of the Credit Agreement, if an Event of Default shall occur and be
continuing, Beneficiary shall have the right and option to proceed with
foreclosure by directing Trustee, or Trustee’s successors or substitutes in
trust, to proceed with foreclosure and to sell, to the extent and in the manner
permitted by applicable law, all or any portion of the Property at one or more
sales, as an entirety or in parcels, at the door of the courthouse in
Washington County, Tennessee, at which foreclosure sales are customarily held,
at public auction, to the highest bidder for cash, free from equity of
redemption, and any statutory or common law right of redemption, homestead,
dower, marital share, and all other exemptions all of which are expressly
waived by Grantor, after giving notice of the time, place and terms of such
sale and of the Property to be sold, by advertising the sale of the property
for twenty-one (21) days by three (3) weekly notices (the first of which
must be at least twenty (20) days previous to such sale) in some newspaper
published in the county and state where the Property is situated, which notice
may be given before or after entry by the Trustee.  The Trustee shall execute a conveyance to the
purchaser in fee simple and deliver possession to the purchaser, which Grantor
warrants shall be given without obstruction, hindrance or delay.  Where the Property is situated in more than
one county, notice as above provided shall be posted and filed in all such
counties (if such notices are required by applicable law), and all such
Property may be sold in any such county and the notice of such sale shall
designate the county where such Property is to be sold.  Nothing contained in this Paragraph 20 shall
be construed so as to limit in any way Beneficiary’s rights to sell the
Property, or any portion thereof, by private sale if, and to the extent that,
such private sale is permitted under the laws of the applicable jurisdiction or
by public or private sale after entry of a judgment by any court of competent
jurisdiction so ordering.  Grantor hereby
irrevocably appoints Beneficiary to be, upon the occurrence and during the
continuance of an Event of Default, the attorney-in-fact of Grantor (coupled
with an interest) and in the name and on behalf of Grantor to execute and
deliver any deeds, transfers, conveyances, assignments, assurances and notices
which Grantor ought to execute and deliver, and to do and perform any other
acts or things which Grantor ought to do and perform under the covenants herein
contained and, generally, to use the name of Grantor in the exercise of any of
the powers hereby conferred on Beneficiary. 
At any such sale: (a) whether made under the power herein contained
or any other legal enactment, or by virtue of any judicial proceedings or any
other legal right, remedy or recourse, it shall not be necessary for
Beneficiary to have physically present, or to have constructive possession of,
the Property (Grantor hereby covenanting and agreeing to deliver to Beneficiary
any portion of the Property not actually or constructively possessed by
Beneficiary immediately upon demand by Beneficiary) and the title to and right
of possession of any such property shall pass to the purchaser thereof as
completely as if the same had been actually present and delivered to purchaser
at such sale; (b) each instrument of conveyance executed by Beneficiary
shall contain a general warranty of title, binding upon Grantor and its successors
and assigns; (c) each and every recital contained in any instrument of
conveyance made by Beneficiary shall conclusively

 

13

 

establish
the truth and accuracy of the matters recited therein, including, without
limitation, nonpayment and/or nonperformance of the Obligations and
advertisement and conduct of such sale in the manner provided herein and
otherwise required by applicable law; (d) any and all prerequisites to the
validity thereof shall be conclusively presumed to have been performed; (e) the
receipt of Beneficiary, or of such other party or officer making the sale,
shall be a sufficient discharge to the purchaser for its purchase money and
neither such purchaser nor its assigns or personal representatives shall
thereafter be obligated to see to the application of such purchase money, or be
in any way answerable for any loss, misapplication or non-application thereof; (f) to
the fullest extent permitted by applicable law, Grantor shall be completely and
irrevocably divested of all of its right, title, interest, claim and demand
whatsoever, either at law or in equity (including any statutory or common law
right of redemption, which is hereby waived to the fullest extent permitted by
applicable law), in and to the property sold in any such event, and such sale
shall be a perpetual bar, both at law and in equity, against Grantor and any
and all other persons claiming by, through or under Grantor; and (g) to
the extent and under such circumstances as are permitted by applicable law,
Beneficiary may be a purchaser at any such sale, and shall have the right,
after paying or accounting for all costs of said sale or sales, to credit the
amount of the bid upon the amount of the Obligations in lieu of cash payment.  Each remedy provided in this Deed of Trust is
distinct from and cumulative with all other rights and remedies provided
hereunder or afforded by applicable law or equity, and may be exercised
concurrently, independently or successively, in any order whatsoever.

 

21.        Application of Proceeds of Foreclosure and Other Remedies    All
amounts received by Beneficiary pursuant to the exercise of remedies hereunder
shall be applied first to expenses due Beneficiary or Trustee including, but
not limited to, expenses of foreclosure and all expenses incurred in leasing
the Property, retaining a managing agent therefor, or fulfilling Grantor’s
obligations under any Lease, including attorneys fees; second, to interest
included in the Indebtedness; third, to principal included in the Indebtedness,
in such order as Beneficiary may elect; and the surplus, if any, shall be paid
to the party or parties entitled thereto.

 

22.        Waiver of Redemption Rights     Any
sale of any or all of the Property pursuant to the power of sale or judicial
sale provided for herein or in realization of the security interest granted
herein shall be made free from the equity of redemption, statutory right of
redemption, homestead, dower, curtesy, exemption rights, and all other rights
and interests of Grantor, all of which are hereby expressly waived.

 

23.        Judicial Foreclosure      After
the occurrence and during the continuance of an Event of Default, Beneficiary
may institute an action of foreclosure, or take such other action as the law
may allow, at law or in equity, for the enforcement hereof and realization on
the Property or any other security which is herein or elsewhere provided for,
and proceed thereon to final judgment and execution thereon for the entire
principal then outstanding under the Credit Documents, with interest thereon at
the rate stipulated in the Credit Documents to the date of default and
thereafter at the default interest rate specified in Section 2.9 of
the Credit Agreement together with all other sums secured by this Deed of
Trust, all costs of suit, including, without limitation, the expenses

 

14

 

which
are described in Paragraphs 27 and 31, and interest at the
default interest rate specified in Section 2.9 of the Credit Agreement
on any judgment obtained by Beneficiary from and after the date of any judicial
sale of any of the Property until actual payment.  Upon any sale or sales made hereunder,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Beneficiary and/or any of the Secured Parties may bid for and acquire any of
the Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting against the Obligations the net
sales price after deducting therefrom the expenses of the sale and the costs of
the action and any other sums which Beneficiary is authorized to deduct under
this Deed of Trust.  Except as otherwise
provided in the Credit Agreement, the proceeds of such sale shall be applied
first to the payment of the costs and charges of such sale, including, without
limitation, Beneficiary’s attorneys’ fees, (to the extent permitted by law),
and second to the payment of the Obligations, the surplus money, if any, to be
paid to the Person(s) legally entitled thereto (including Grantor, to the
extent so entitled, if at all).  Upon the
request of Beneficiary and to the extent not prohibited by applicable law,
Grantor shall execute and file with the clerk of the court a legally sufficient
waiver of any statutory waiting period with respect to the execution of a
judgment obtained by Beneficiary in connection with any foreclosure
proceedings.  The obligation of Grantor
to so execute and file such waiver shall survive the termination of this Deed
of Trust.  Following a foreclosure sale,
the sheriff shall deliver to the purchaser the sheriff’s deed (and bill of sale
as to any personalty) conveying the property so sold without any covenant or
warranty, express or implied.

 

24.        Sale in Parcels   In the event of a
foreclosure of this Deed of Trust or upon any sale under this Deed of Trust
pursuant to judicial proceedings or otherwise, the Property may be sold in one
parcel and as an entirety or in such parcels, manner or order as Beneficiary in
its sole discretion may select.

 

25.        Notice Upon Acceleration    Whenever
Beneficiary in this Deed of Trust is given the option to accelerate the
maturity of all or part of the Obligations upon the occurrence of an Event of
Default, Beneficiary may, to the extent permitted by law, do so without prior
notice or demand to or upon Grantor except as otherwise specifically provided
herein.

 

26.        Possession of Premises    To the
extent permitted by law, after the occurrence and during the continuance of an
Event of Default, Beneficiary and its agents and any receiver appointed by a
court are authorized to (a) take possession of the Premises, with or
without legal action, and by force if necessary; (b) lease the Premises or
make modifications to or cancel Leases; (c) maintain, repair, alter, and
restore the Premises; (d) with or without taking possession, collect all
Rents and profits payable under all Leases directly from the lessees thereunder
upon notice to each such lessee that an Event of Default exists under this Deed
of Trust accompanied by a demand on such lessee for the payment to Beneficiary
of all Rents due and to become due under its Lease, and Grantor FOR THE BENEFIT
OF BENEFICIARY AND EACH SUCH LESSEE hereby covenants and agrees that the lessee
shall be under no duty to question the accuracy of Beneficiary’s statement of
default and shall unequivocally be authorized to

 

15

 

pay
said Rents to Beneficiary without regard to the truth of Beneficiary’s
statement of an Event of Default and notwithstanding notices from Grantor
disputing the existence of an Event of Default such that the payment of rent by
the lessee to Beneficiary pursuant to such a demand shall constitute
performance in full of the lessee’s obligation under the Lease for the payment
of Rents by the lessee to Grantor; and (e) after deducting all costs of
collection and administration expense, apply the net Rents and profits to the
payment of Impositions, insurance premiums and all other carrying charges
(including, without limitation, agents’ compensation and fees and reasonable
costs of counsel to the extent permitted by law, and receivers) and to the
maintenance, repair or restoration of the Premises, or, except as otherwise
provided in the Credit Agreement, on account and in reduction of the
Obligations in such order and amounts as Beneficiary in Beneficiary’s sole
discretion may elect.  Beneficiary shall
be liable to account only for Rents and profits actually received by
Beneficiary.

 

27.        Expenses of Beneficiary and/or the Secured Parties    All
sums (including reasonable attorneys’ fees and disbursements, to the extent
permitted by law) paid by Beneficiary and/or any of the Secured Parties in
connection with any litigation to prosecute or defend the rights and
obligations created by this Deed of Trust, with interest thereon at the default
interest rate specified in Section 2.9 of the Credit Agreement from
the time of payment by Beneficiary and/or any of the Secured Parties shall, on
demand, be immediately due from Grantor to Beneficiary and/or any such Secured
Party and shall be added to and included in the Obligations and shall be
secured by this Deed of Trust.

 

28.        Grantor’s Waivers

 

(a)        Grantor,
for itself and its successors and assigns, hereby irrevocably waives and
releases, to the extent permitted by law, whether now or hereafter in force, (i) the
benefit of any and all valuation and appraisement laws, (ii) any right of
redemption whether statutory or otherwise, in respect of the Property, (iii) any
applicable homestead or dower laws, (iv) all exemption laws whatsoever and
all moratoriums, extensions or stay laws or rules, or orders of court in the
nature of any one or more of them, (v) any right to have any of the Property
marshaled upon foreclosure of this Deed of Trust, (vi) the right to
interpose any set-off, recoupment, counterclaim or cross-claim in any
litigation in any court with respect to, in connection with, or arising out of
this Deed of Trust or any of the other Credit Documents unless such set-off,
recoupment, counterclaim or cross-claim could not, by reason of the applicable
Federal or State procedural laws, be interposed, pleaded or alleged in any
other action, and (vii) trial by jury in connection with any litigation
arising out of this Deed of Trust or any of the other Credit Documents and any
right it may have to claim or recover in any such litigation any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages.

 

(b)        Beneficiary,
for itself and its successors and assigns, hereby irrevocably waives and
releases, to the extent permitted by law, whether now or hereafter in force,
trial by jury in connection with any litigation arising out of this Deed of
Trust or any of the other Credit Documents.

 

16

 

29.        Partial Foreclosure       Beneficiary
may from time to time, if permitted by law, take action to recover any sums,
whether interest, principal or any other sums, required to be paid under this
Deed of Trust or any other Credit Document as the same become due, without
prejudice to the right of Beneficiary thereafter to bring an action of
foreclosure, or any other action, for an Event of Default by Grantor existing
when such earlier action was commenced. 
Beneficiary may also foreclose this Deed of Trust for any sums due under
this Deed of Trust or any other Credit Document and the lien of this Deed of
Trust shall continue to secure the balance of the Obligations due.

 

30.        No Waiver; Rights Cumulative   No
failure or delay on the part of Beneficiary or any of the Secured Parties in
the exercise of any power, right or privilege hereunder or under any other
Credit Document shall impair such power, right or privilege or be construed to
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other power, right or privilege.  The rights, powers and remedies given to
Beneficiary and each of the Secured Parties hereby are cumulative and shall be
in addition to and independent of all rights, powers and remedies existing by
virtue of any statute or rule of law or in any of the other Credit
Documents.  Any forbearance or failure to
exercise, and any delay in exercising, any right, power or remedy hereunder
shall not impair any such right, power or remedy or be construed to be a waiver
thereof, nor shall it preclude the further exercise of any such right, power or
remedy.

 

31.        Attorneys’ Fees  If this Deed of Trust shall
be foreclosed, or if any of the Credit Documents is placed in the hands of an
attorney for collection or is collected through any court, including any
bankruptcy court, there shall be included in the computation of the sums
secured hereby, to the extent permitted by law, the amount of a reasonable fee
for the services of the attorney retained by Beneficiary in the foreclosure
action or proceeding, and all disbursements, costs, allowances and additional
allowances provided by law.

 

32.        Interest After Maturity   The
Obligations secured by this Deed of Trust shall bear interest from and after
maturity, whether or not resulting from acceleration, at the default interest
rate specified in Section 2.9 of the Credit Agreement, but this
shall not constitute an extension of time for payment of the Obligations.

 

33.        No Credit for Taxes   Grantor shall not
claim or demand or be entitled to any credit or credits on account of any of
the sums secured hereby by reason of the Impositions assessed against all or
any part of the Property or for any payments made on account thereof.  No deductions shall be made or claimed from
the taxable value of all or any part of the Premises by reason of this Deed of
Trust.

 

34.        Liens          This
Deed of Trust is and shall be maintained as a valid first lien on the Property
subject only to any encumbrances created pursuant to the Credit Documents and
the Existing Liens and the Permitted Liens, if any.  Notwithstanding any provision in the Credit
Documents to the contrary, Grantor shall not, directly or indirectly, create or
suffer or permit to be created, or to stand, against the Property or any portion
thereof, or against the Rents, issues and profits therefrom, any lien, charge,
mortgage,

 

17

 

deed
of trust, adverse claim or other encumbrance (herein collectively referred to
as a “lien”), whether senior or
junior in lien to this Deed of Trust, other than the lien of (i) this Deed
of Trust and (ii) the Permitted Liens (including easements, rights-of-way,
restrictions, encroachments, minor defects or irregularities in title and other
similar charges, in each case which do not and will not interfere in any
material respect with the use or value thereof; provided, however,
that Grantor shall give Beneficiary at least twenty (20) days prior written
notice of any Permitted Lien described in the parenthetical to clause (ii) above
which is to be created after the date hereof together with a reasonably
detailed description thereof; and provided, further, that nothing
contained in this Paragraph shall require Grantor to pay any real estate taxes
or other Impositions prior to the time when same are required to be paid under
this Deed of Trust.  Grantor will keep
and maintain all of the Premises free from all liens of Persons supplying labor
or materials relating to the construction, alteration, modification or repair of
the Premises.  If any such lien shall be
filed against any of the Property, Grantor agrees to discharge the same of
record (by payment, bonding or otherwise) within 10 days of notice of the
filing thereof.  No financing statement,
conditional bill of sale or chattel mortgage shall be made or filed against any
Building Equipment without the prior consent of Beneficiary and if at any time
there should be any (with or without the consent of Beneficiary), then upon the
occurrence and during the continuance of an Event of Default, all right, title
and interest of Grantor in and to all deposits and payments made thereon are
hereby assigned to Beneficiary.

 

35.        Change in Taxation     In the
event of the enactment of or change in (including, without limitation, a change
in interpretation of) any applicable law (a) deducting or allowing Grantor
to deduct from the value of the Property for the purpose of taxation any lien
or security interest thereon, (b) imposing, modifying or deeming
applicable any reserve or special requirement against deposits in or for the
account of, or loans by, or other liabilities of, or other assets held by
Beneficiary or any of the Secured Parties, or (c) subjecting Beneficiary
or any of the Secured Parties to any tax or changing the basis of taxation of
mortgages, deeds of trust, or other liens or debts secured thereby, or the
manner of collection of such taxes, in each such case, so as to affect this
Deed of Trust, the Obligations, Beneficiary or any of the Secured Parties, and
the result is to increase the taxes imposed upon or the cost to Beneficiary or
any of the Secured Parties of maintaining the Obligations, or to reduce the
amount of any payments receivable hereunder or under the other Credit
Documents, then, and in any such event, Grantor shall, on demand, pay to
Beneficiary for the account of Beneficiary or any of the Secured Parties, as
the case may be, such additional amounts as may be required to compensate for
such increased costs or reduced amounts, provided that if any such payment or
reimbursement shall be unlawful or would constitute usury under applicable law,
then Beneficiary may, at its option, require Grantor to make a partial
repayment of the Obligations in an amount equal to the then value of the
Premises.

 

36.        Assignment of Leases and Rents       Grantor
absolutely and unconditionally assigns to Beneficiary the Rents, issues and
profits of the Premises as further security for the payment of the Obligations
and Grantor grants to Beneficiary during the existence of an Event of Default
the right to enter the Premises for the purpose of collecting the same and to
let the Premises, or any part thereof, and, except as

 

18

 

otherwise
provided in the Credit Agreement,  to
apply said Rents, issues and profits, after payment of all necessary charges
and expenses, on account of the Obligations. 
This assignment and grant shall continue in effect until the payment in
full of the Obligations, the cancellation or termination of the Commitments and
the cancellation or expiration of all outstanding Letters of Credit.  Beneficiary hereby waives the right to enter
the Premises for the purpose of collecting said Rents, issues and profits, and
Grantor shall be entitled to collect, receive and use said Rents, issues and
profits, until the occurrence and during the continuance of and Event of
Default.  During the continuance of any
Event of Default, the right of Grantor to collect, receive and use said Rents,
issues and profits, shall be revoked forthwith. 
Further, from and after delivery of written notice of such revocation,
constructive possession of the Premises shall be vested in Beneficiary, and this
assignment shall be activated and perfected. 
Notwithstanding the foregoing, this assignment shall also be activated
and perfected upon Beneficiary’s exercising, upon the occurrence and during the
continuance of an Event of Default, any of the following remedies pursuant to
this Deed of Trust:  (i) taking
actual possession of the Premises; (ii) moving or applying for the
appointment of a receiver; (iii) filing or commencing an action to
foreclose this Deed of Trust; or (iv) collecting the Rents directly from
the tenant(s).  Grantor shall, from time
to time after request by Beneficiary, execute, acknowledge and deliver to
Beneficiary, in form reasonably satisfactory to Beneficiary, separate
assignments effectuating the foregoing. 
Neither Beneficiary nor the Secured Parties shall be obligated to
perform or discharge any obligation or duty to be performed or discharged by
Grantor under any Lease or other agreement affecting all or any part of the
Premises, and Grantor hereby agrees to indemnify Beneficiary and the Secured
Parties for and hold them harmless from, any and all liability arising from any
such Lease or other agreement or any assignments thereof, and no assignment of
any such Lease or other agreement shall place the responsibility for the
control, care, management or repair of all or any part of the Premises upon
Beneficiary or the Secured Parties, nor make Beneficiary or the other Secured
Parties liable for any negligence in the management, operation, upkeep, repair
or control of all or any part of the Premises resulting in injury, death or
property damage.  In addition, after the
occurrence and during the continuance of an Event of Default and following the
giving of notice to Grantor, Grantor will pay monthly in advance to
Beneficiary, or to any receiver appointed to collect said Rents, issues and
profits, the fair and reasonable rental value for the use and occupancy of the
Premises or of such part thereof as may be in the possession of Grantor, and
upon default in any such payment will vacate and surrender the possession
thereof to Beneficiary or to such receiver, and in default thereof may be
evicted by summary or other proceedings.

 

37.                       Security
Agreement      It is the
intention of the parties hereto that this instrument shall constitute a
Security Agreement and a Financing Statement within the meaning of the Uniform
Commercial Code as enacted in the state in which the Land is located with
respect to the personalty and fixtures comprising a part of the Property, and
that a security interest shall attach thereto for the benefit of Beneficiary,
as secured party, to further secure the Obligations.  Grantor hereby authorizes Beneficiary to file
financing and continuation statements with respect to such collateral in which
Grantor has a mortgageable interest, without the signature of Grantor whenever
lawful, and upon request, Grantor shall promptly execute financing and
continuation statements in form satisfactory to Beneficiary to further evidence
and secure Beneficiary’s interest in such

 

19

 

collateral,
and shall pay all filing fees in connection therewith.  In the event of the occurrence and during the
continuance of an Event of Default, Beneficiary, pursuant to the applicable
provision of the Uniform Commercial Code, shall have the option of proceeding
as to both real and personal property in accordance with its rights and
remedies in respect of the real property, in which event the default provisions
of the Uniform Commercial Code shall not apply. 
The parties agree that in the event Beneficiary elects to proceed with
respect to collateral constituting personalty or fixtures separately from the
real property, without demand, notice or advertisement whatsoever except that
where an applicable statute requires reasonable notice of sale or the
dispositions, the giving of ten (10) days’ notice by Beneficiary to
Grantor, shall be deemed to be reasonable notice thereof and Grantor waives any
other notice with respect thereto.

 

38.                       No Release      Neither
Grantor nor any other Person now or hereafter obligated for the payment or
performance of all or any portion of the Obligations shall be released from
paying such Obligations and the lien of this Deed of Trust shall not be
affected by reason of (a) the failure of Beneficiary or any of the Secured
Parties to comply with any request of Grantor, or of any other Person so
obligated, to take action to foreclose this Deed of Trust or otherwise enforce
any of the provisions of this Deed of Trust or of any of the covenants and
agreements of Grantor under the Credit Documents, (b) the release,
regardless of consideration, of the whole or any part of the security held for
the Obligations, (c) the release, regardless of consideration, of the
obligations of any Person or Persons liable for payment or performance of all
or any portion of the Obligations, or (d) any agreement or stipulation
extending the time of payment or modifying the terms of any of the Credit
Documents, and in the event of such agreement or stipulation, Grantor and all
such other Persons shall continue to be liable under the Credit Documents, as
amended by such agreement or stipulation, unless expressly released and
discharged in writing by Beneficiary and the Secured Parties.

 

39.                       Notices  All
notices, consents and other communications provided for herein shall be sent to
such Person’s address as follows (or to such other address indicated in an
unrevoked written notice from such Person given in accordance the terms of this
Paragraph):

 

(a)                        if to Grantor, Douglas Dynamics, L.L.C., 7777 North 73rd Street, Milwaukee,
WI  53223, Attention: Chief Executive
Officer and President, Telecopy No.: 
(414) 354-8448, with a copy to Aurora Capital Group, 10877 Wilshire
Boulevard, Suite 2100, Los Angeles, CA 
90024, Attention: Secretary, Douglas Dynamics Holdings, Inc.,
Telecopier No.: (310) 824-2791, with a copy to Gibson, Dunn & Crutcher
LLP, 333 S. Grand Avenue, Los Angeles, CA 
90071, Attention: Jeff R. Hudson, Esq., Telecopy No.: 213-229-6332

 

(b)                       if to Beneficiary or Collateral Agent, at Credit Suisse,
Cayman Islands Branch, Eleven Madison Avenue, New York, NY  10010, Attention:  Ian Nalitt, Telecopy No.:  (212) 325-8615,  with
a copy to Skadden Arps Slate Meagher & Flom 

 

20

 

LLP, 300 South Grand Avenue, Suite 3400, Los Angeles,
CA  90071-3144, Attention: David Kitchen, Esq.,
Telecopy No.: (213) 621-5280; and

 

(c)                        if to any of the Secured Parties, at the address set forth
below such Secured Party’s name on the signature pages of the Credit
Agreement.

 

Each
notice hereunder shall be in writing and may be personally served, telexed or
sent by telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service and
signed for against receipt thereof, upon receipt of telefacsimile or telex, or
three (3) Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided, no notice to
Beneficiary shall be effective until received by Beneficiary.

 

40.                       Severability      In
case any provision in or obligation hereunder shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

 

41.                       Intentionally
Deleted

 

42.                       Indemnification
Against Liabilities      Grantor will
defend, indemnify, pay and hold harmless Beneficiary and the Secured Parties
and their respective officers, partners, directors, trustees, employees, agents
and Affiliates of Beneficiary and each of the Secured Parties from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind
(including, without limitation, reasonable attorneys’ fees and expenses)
imposed upon or incurred by or asserted against Beneficiary and any of the
Secured Parties by reason of (a) ownership of a mortgagee’s/beneficiary’s
or participating lender’s interest in the Property, (b) any accident or
injury to or death of Persons or loss of or damage to or loss of the use of
property occurring on or about the Premises or any part thereof or the
adjoining sidewalks, curbs, vaults and vault spaces, if any, streets, alleys or
ways, unless due to the willful misconduct of Beneficiary or such Secured
Party, (c) any use, nonuse or condition of the Premises or any part
thereof or the adjoining sidewalks, curbs, vaults and vault spaces, if any,
streets, alleys or ways, (d) any failure on the part of Grantor to perform
or comply with any of the terms of this Deed of Trust, (e) performance of
any labor or services or the furnishing of any materials or other property in
respect of the Premises or any part thereof made or suffered to be made by or
on behalf of Grantor, (f) any negligence or tortious act on the part of
Grantor or any of its agents, contractors, lessees, licensees or invitees, or (g) any
work in connection with any alterations, changes, new construction or
demolition of the Premises.  All amounts
payable to Beneficiary and the Secured Parties under this Paragraph shall be
payable promptly on demand and shall be deemed indebtedness and Obligations
secured by this Deed of Trust and any such amounts shall bear interest at the
default interest rate specified in Section 2.9 of the Credit
Agreement from the date of such demand. 
In case any action, suit or proceeding is brought against Grantor,
Beneficiary and/or any of the Secured Parties by reason of any such occurrence,
Grantor, upon request of Beneficiary or any of the Secured Parties will, at
Grantor’s expense, resist and defend such action,

 

21

 

suit
or proceeding or cause the same to be resisted or defended by counsel
designated by Beneficiary or such Secured Party and approved by Grantor.

 

43.                       No Oral Changes      This
Deed of Trust and its provisions cannot be changed, waived, discharged or
terminated orally but only by an agreement in writing, signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought.

 

44.                       Governing Law THE
PROVISIONS OF THIS DEED OF TRUST REGARDING THE CREATION, PERFECTION AND
ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN GRANTED SHALL BE
GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED.  ALL OTHER PROVISIONS OF THIS
DEED OF TRUST AND THE RIGHTS AND OBLIGATIONS OF GRANTOR AND BENEFICIARY SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPALS
THEREOF.

 

45.                       Construction      This
Deed of Trust shall be construed without regard to any presumption or rule requiring
construction against the party causing such instrument or any portion thereof
to be drafted.

 

46.                       Headings      Paragraph headings
herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive
effect.

 

47.                       After Acquired
Property      All property of
every kind which is hereafter acquired by Grantor which, by the terms hereof,
is required or intended to be subjected to the lien of this Deed of Trust
shall, immediately upon the acquisition thereof by Grantor, and without any
further giving of a deed of trust and/or mortgage, conveyance, assignment or
transfer, become subject to the lien of this Deed of Trust.

 

48.                       Further
Assurances      Grantor shall
execute, acknowledge and deliver to Beneficiary any documents and instruments
which Beneficiary may reasonably request from time to time for the better
assuring, conveying, assigning, transferring, confirming or perfecting of
Beneficiary’s security and rights under this Deed of Trust, in form and
substance reasonably satisfactory to Beneficiary.

 

49.                       Definitions      The
following terms shall, for all purposes of this Deed of Trust, have the
respective meanings herein specified unless the context otherwise requires and
such meanings shall apply equally to the singular and plural forms of such
defined terms unless a definition is provided herein for both the singular and
plural form of such defined term:

 

(a)                        “Lease”
shall mean every lease or occupancy agreement for the use or hire of all or any
portion of the Premises, which shall be in effect at the date hereof or which
shall hereafter be entered into by or on behalf of Grantor.

 

22

 

(b)                       “Rents”
shall mean all rents, rent equivalents, moneys payable as damages or in lieu of
rent or rent equivalents, royalties (including, without limitation, all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for
the account of or benefit of Grantor or its agents or employees from any and
all sources arising from or attributable to the Land and the Building,
including, without limitation, all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter
arising or created out of the sale, lease, sublease, license, concession or
other grant of the right of the use and occupancy of property, and proceeds, if
any, from business interruption or other loss of income insurance.

 

50.                       Successors and
Assigns The terms, covenants and provisions of this Deed of Trust shall
apply to and be binding upon Grantor and the successors and assigns of Grantor
and shall inure to the benefit of Beneficiary, the Secured Parties and their
respective successors and assigns.  All
grants, covenants, terms, provisions, and conditions contained herein shall run
with the Land.

 

51.                       Credit
Agreement      In the event of
any inconsistency or conflict between the terms and provisions of the Credit
Agreement and this Deed of Trust, the terms and provisions of the Credit
Agreement shall control.

 

52.                       Trustee  The
Trustee named herein shall be clothed with full power to act when action
hereunder shall be required, and to execute any conveyance of the
Property.  In the event that the
substitution of a Trustee shall become necessary for any reason, the
substitution of one trustee in the place of those or any of those named herein
shall be sufficient; however, more than one Trustee may be named.  The term “Trustee” shall be construed to mean
“Trustees” whenever the sense requires. 
Trustee is hereby released from all obligations imposed by statute which
can be waived. The necessity of the Trustee herein named, or any successor in
trust, making oath or giving bond, is expressly waived.

 

The Trustee, or any one acting in Trustee’s stead,
shall have, in Trustee’s discretion, authority to employ all proper agents and
attorneys in the execution of this Deed of Trust and/or in the conducting of
any sale made pursuant to the terms hereof, and to pay for such services
rendered out of the proceeds of the sale of the Property, should any be
realized; and if no sale be made or if the proceeds of sale be insufficient to
pay the same, then Grantor hereby undertakes and agrees to pay the cost of such
services rendered to said Trustee.  The
Trustee may rely on any document believed by him in good faith to be
genuine.  All money received by Trustee
shall, until used or applied as herein provided, be held in trust, but need not
be segregated (except to the extent required by law), and Trustee shall not be
liable for interest thereon.

 

If the Trustee shall be made a party to or shall
intervene in any action or proceeding affecting the Property or the title
thereto, or the interest of the Trustee or Beneficiary under this Deed of
Trust, the Trustee and Beneficiary shall be reimbursed by 

 

23

 

Grantor, immediately and
without demand, for all reasonable costs, charges and attorneys’ fees incurred
by Trustee or either of them in any such case, and the same shall be secured
hereby as a further charge and lien upon the Property.

 

In the event of the death, refusal, or of inability
for any cause, on the part of the Trustee named herein, or of any successor
trustee, to act at any time when action under the foregoing powers and trust
may be required, or for any other reason satisfactory to Beneficiary,
Beneficiary is authorized, either in its own name or through an attorney or
attorneys in fact appointed for that purpose, by written instrument duly
registered, to name and appoint a successor or successors to execute this Deed
of Trust, such appointment to be evidenced by writing, duly acknowledged; and
when such writing shall have been registered, the substituted trustee named
therein shall thereupon be vested with all the right and title, and clothed
with all the power of the Trustee named herein and such like power of
substitution shall continue so long as any part of the debt secured hereby
remains unpaid.

 

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LEFT BLANK]

 

24

 

IN WITNESS WHEREOF, Grantor has caused this Deed of
Trust to be executed under seal as of the day and year first above written.

 

 

	
   

  	
  Grantor:

  
	
   

  	
   

  
	
   

  	
  DOUGLAS
  DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

STATE OF
                                )

COUNTY OF
                          )

 

Before me,
                                              ,
a Notary Public of the State and County aforesaid, personally appeared                                                     ,
with whom I am personally acquainted, and who, upon oath,
acknowledged himself/herself to be
                                                  
of DOUGLAS DYNAMICS, L.L.C., a Delaware limited liability company, and that
he/she as such                                 ,
being authorized so to do, executed the this instrument on behalf of said
DOUGLAS DYNAMICS, L.L.C..

 

Witness my hand and seal, at
office in
                      ,
                      ,
this the            day of
May, 2007.

 

	
   

  	
   

  
	
   

  	
  NOTARY
  PUBLIC

  
	
   

  	
  My
  Commission Expires:

  	
   

  

 

26

 

Exhibit A

 

Description of the Land

 

SITUATE, lying and being in the 9th Civil District
of Washington County, Tennessee, and being more particularly described as
follows, to-wit:

 

BEGINNING at an iron rod in the southwesterly right
of way line of Riverview Drive (Tennessee State Route 2601), corner to City of
Johnson City (Deed Book 284, page 241); thence leaving Riverview Drive and
with the line of the City of Johnson City, S. 41° 19' 00"
W., 848.50 feet to an iron rod, corner to General Shale Products Corp. (Deed
Book 693, page 422); thence with General Shale’s line, the following six
courses and distances: N. 34° 22' 00" W.,153.40 feet
to an iron rod; N. 39° 29' 00" E.,166.20 feet to an
iron rod; N. 37° 16' W.,16.0 feet to an iron rod;
N. 47° 32' 07" W., 548.35 feet to a concrete monument;
N. 37° 10' 39" W., 378.19 feet to iron rod; and
N. 26° 38' 07" W., 334.55 feet to a concrete monument,
corner to City of Johnson City (Deed Book 703, page 113); thence with the
line of the City of Johnson City, the following two courses and distances:
N. 75° 20' 06" E., 291.24 feet to a concrete monument,
and N. 19° 11' 00" W.,175.82 feet to a concrete
monument, corner to Guy and Mae Erwin (Deed Book 469, page 25); thence
with Erwin’s line, N. 55° 25' 00" E., 309.91 feet to a
concrete monument located in the southwesterly right of way line of Riverview
Drive (Tennessee State Route 2601); thence with the southwesterly right of way
line of Riverview Drive, the following five courses and distances:
S. 37° 32' 10" E., 333.17 feet to an iron rod;
S. 41° 20' 23" E., 223.32 feet to an iron rod;
S. 36° 55' 23" E., 504.89 feet to a point;
S. 41° 05' 23" E., 97.0 feet to an iron rod and
S. 51° 46' 23" E., 174.58 feet to the point of
BEGINNING, containing 21.599 acres, more or less, according to a map entitled “E.
G. Smith Construction Products, Inc.” dated September 29, 1992,
prepared by Steven C. Lyons, TRLS No. 1608, 116 Free Hill Road, Gray, TN
37615.

 

AND
BEING the same property conveyed to New DD, LLC from Douglas Dynamics, L.L.C.
by Special Warranty Deed dated March 26, 2004, recorded in Roll 382, Image
2259, in the Register’s Office for Washington County, Tennessee, to which
reference is here made.  See Certificate
of Amendment amending the name from New DD, LLC to Douglas Dynamics, LLC of
record in Roll 423, Image 2332, in the aforesaid Register’s Office.

 

 

Schedule B

 

Existing Liens

 

1.               All those exceptions to
title set forth on Schedule B to Loan Policy No. 15341 issued by Lawyers
Title Insurance Corporation.

 

2.               Those liens and security
interests granted in favor of the ABL Collateral Agent disclosed by the
Intercreditor Agreement.

 

28

 

EXHIBIT K

 

RESTRICTED
PAYMENT CERTIFICATE

 

All calculations under this certificate shall be for
the period commencing on the first day of the first full Fiscal Quarter after
the Closing Date through and including the last full Fiscal Quarter (taken as
one accounting period) preceding the date of determination.

 

	
  I.

  	
  Restricted Payment EBITDA

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Consolidated Adjusted EBITDA 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)         to the extent deducted in the calculation of
  Consolidated Net Income for such period, all losses which are non-recurring: 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)        to the extent deducted in the calculation of
  Consolidated Net Income for such period, interest attributable to
  Attributable Indebtedness: 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)       to the extent deducted in the calculation of
  Consolidated Net Income for such period, the amount of all dividends accrued
  or payable (whether or not in cash) by the Company or any of its Subsidiaries
  in respect of preferred stock (other than (A) dividends on Capital Stock
  (other than Disqualified Capital Stock) of the Company or such Subsidiary
  payable solely in Capital Stock (other than Disqualified Capital Stock) of
  the Company or such Subsidiary, as applicable, and (B) by Subsidiaries of the
  Company to the Company or its wholly-owned Subsidiaries): 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Sum of Items (i) thru (iii) above: 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Aggregate amount of interest income of the Company
  and its Subsidiaries during such period paid in cash to the extent reducing Consolidated
  Adjusted EBITDA: 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  All gains which are non-recurring (including any
  gain from the issuance or sale of any Capital Stock) to the extent included
  in the calculation of Consolidated Net Income for such period, without duplication:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
  Sum of Items, without duplication, (a), (b) and
  (c): 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Restricted Payment
  EBITDA (Item (e) minus Item (d)):

  	
   

  	
  $

  	
   

  

 

K-1

 

	
  II.

  	
  Cumulative Interest Expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Interest expensed or capitalized, paid, accrued, or
  scheduled to be paid or accrued (including, in accordance with the following
  sentence, interest attributable to Capital Leases and Attributable
  Indebtedness) of the Company and its Subsidiaries, including
  (I) amortization of debt issuance costs, original issue discount, debt
  discounts or premium and other financing fees and expenses and non-cash
  interest payments or accruals on any Indebtedness, (II) the interest
  portion of all deferred payment obligations of the Company and its
  Subsidiaries, and (III) all commissions, discounts and other fees and
  charges owed by the Company and its Subsidiaries with respect to bankers’ acceptances
  and letters of credit financings and Hedge Agreements:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  All cash dividends paid by the Company or any of its
  Subsidiaries in respect of preferred stock (other than by Subsidiaries of the
  Company to the Company or its wholly owned Subsidiaries):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Cumulative Interest
  Expense (the aggregate amount (without duplication and determined in each
  case in accordance with GAAP) of Items (a) and (b)):

  	
   

  	
  $

  	
   

  

 

K-2

 

	
  III.

  	
  Restricted Payment Amount

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Restricted Payment EBITDA: 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  product of 2.0 multiplied by Cumulative Interest
  Expense:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Item (a) minus Item (b):(20)  

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  100% of the aggregate net cash proceeds received by
  the Company from a capital contribution or sale of Capital Stock to Holdings
  after the Closing Date:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
  An amount equal to the net amounts received in
  respect of Investments made under Section 6.7(l) or 6.7(m) of
  the Credit Agreement in any Person resulting from cash distributions on or
  cash repayments of any Investments, including payments of interest on
  Indebtedness, dividends, repayments of loans or advances, or other
  distributions or other transfers of assets, in each case to Company, DD
  Finance, Fisher or any of their respective Subsidiaries or from the net cash
  proceeds from the sale of any such Investment, not to exceed, in each case,
  the amount of Investments previously made by Company, DD Finance, Fisher or
  any of their respective Subsidiaries in such Person, less the cost of
  disposition (and excluding Investments in Subsidiaries):(21)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
  Sum of Items (c) through (e) above:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
  Aggregate amount of Restricted Payments made pursuant
  to Sections 6.5(a)(ii) and 6.5(c)(iv) of the Credit Agreement: 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (h)

  	
  Amounts required to be applied to prepay Loans
  pursuant to Section 2.13(c) of the Credit Agreement: 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
  (without duplication) amounts applied or utilized
  pursuant to Section 6.5(d), Section 6.5(f), Section 6.7(l),
  Section 6.7(m) or Section 6.16(c) of the Credit
  Agreement:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (j)

  	
  Sum of Items (g) through (i): 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Restricted
  Payment Amount (Item (f) minus Item (j)):(22)

  	
   

  	
  $

  	
   

  

 

(20)         Not to be less than zero.

(21)         Except in each case, in order to avoid
duplication, to the extent any such payment or proceeds have been included in
the calculation of Restricted Payment EBITDA.

(22)         For purposes of this definition, (i) the
amount of any payment or Investment made or returned hereunder, if other than
in cash, shall be the fair market value thereof, as determined in the good
faith reasonable judgment of the board of directors of the Company (or similar
governing body) for such payments or Investments with a value in excess of $1.0
million, and otherwise by an executive officer of the Company at the time made
or returned, as applicable, (ii) interest with respect to Capital Leases
shall be deemed to accrue at an interest rate reasonably determined in good
faith by the Company to be the rate of interest implicit in such Capital Lease
in accordance with GAAP and (iii) interest expense attributable to any Indebtedness
represented by the guarantee by the Company or any of its Subsidiaries of an
obligation of another Person shall be deemed to be the interest expense
attributable to the Indebtedness guaranteed.

 

K-3

 

EXHIBIT L

 

INTERCREDITOR AGREEMENT

 

L-1

 

EXECUTION VERSION

 

	
   

  

 

INTERCREDITOR AGREEMENT

 

by and among

 

DOUGLAS DYNAMICS, L.L.C.

DOUGLAS DYNAMICS FINANCE COMPANY

FISHER, LLC

DOUGLAS DYNAMICS HOLDINGS, INC.

 

The Grantors from Time to Time Parties Hereto,

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

 

as the Administrative Agent under the ABL Loan Documents,

as the Administrative Agent and the Collateral Agent under the Term
Loan Documents,

 

and

 

JPMORGAN CHASE BANK, N.A.,

as the Collateral Agent under the ABL Loan Documents

 

Dated as of May 21, 2007

 

	
   

  

 

Intercreditor Agreement

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS 

  	
   

  
	
   

  	
   

  
	
  SECTION 1.1

  	
  Defined Terms

  	
  2

  
	
  SECTION 1.2

  	
  Terms Generally

  	
  13

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  PRIORITY OF LIENS; ETC.

  	
   

  
	
   

  	
   

  
	
  SECTION 2.1

  	
  Subordination of Liens;
  Etc

  	
  13

  
	
  SECTION 2.2

  	
  Prohibition on Contesting
  Liens

  	
  15

  
	
  SECTION 2.3

  	
  No New Liens

  	
  15

  
	
  SECTION 2.4

  	
  Similar Liens and
  Agreements

  	
  16

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  ENFORCEMENT

  	
   

  
	
   

  	
   

  
	
  SECTION 3.1

  	
  Exercise of Remedies

  	
  16

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  PAYMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 4.1

  	
  Application of Proceeds

  	
  21

  
	
  SECTION 4.2

  	
  Payments Over

  	
  22

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  OTHER AGREEMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.1

  	
  Releases

  	
  23

  
	
  SECTION 5.2

  	
  Insurance - ABL Priority
  Collateral — Settlement Prior to Discharge of ABL Obligations

  	
  24

  
	
  SECTION 5.3

  	
  Amendments to Credit
  Documents

  	
  25

  
	
  SECTION 5.4

  	
  Amendments to Security
  Documents

  	
  26

  
	
  SECTION 5.5

  	
  Rights As Unsecured
  Creditors

  	
  28

  
	
  SECTION 5.6

  	
  Bailee for Perfection

  	
  28

  
	
  SECTION 5.7

  	
  When Discharge of
  Obligations Deemed to Not Have Occurred

  	
  30

  
	
  SECTION 5.8

  	
  Option to Purchase

  	
  31

  

 

i

 

	
  SECTION 5.9

  	
  Entry Upon Premises by the
  ABL Collateral Agent and the ABL Creditors

  	
  32

  
	
  SECTION 5.10

  	
  Rights under Permits and
  Licenses

  	
  34

  
	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  
	
  INSOLVENCY OR LIQUIDATION
  PROCEEDINGS

  	
   

  
	
   

  	
   

  
	
  SECTION 6.1

  	
  Finance and Sale Issues

  	
  34

  
	
  SECTION 6.2

  	
  Relief from the Automatic
  Stay

  	
  37

  
	
  SECTION 6.3

  	
  Adequate Protection

  	
  37

  
	
  SECTION 6.4

  	
  No Waiver; Voting Rights

  	
  38

  
	
  SECTION 6.5

  	
  Preference Issues

  	
  38

  
	
  SECTION 6.6

  	
  Post-Petition Interest

  	
  39

  
	
  SECTION 6.7

  	
  Voting for Plan of
  Reorganization

  	
  40

  
	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  
	
  RELIANCE; WAIVERS; ETC.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
  Reliance

  	
  40

  
	
  SECTION 7.2

  	
  No Warranties or Liability

  	
  40

  
	
  SECTION 7.3

  	
  No Waiver of Lien
  Priorities

  	
  41

  
	
  SECTION 7.4

  	
  Waiver of Liability;
  Indemnity

  	
  44

  
	
  SECTION 7.5

  	
  Obligations Unconditional

  	
  45

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  Conflicts

  	
  46

  
	
  SECTION 8.2

  	
  Effectiveness; Continuing
  Nature of this Agreement; Severability

  	
  46

  
	
  SECTION 8.3

  	
  Amendments; Waivers

  	
  47

  
	
  SECTION 8.4

  	
  Information Concerning
  Financial Condition of the Grantors and their Subsidiaries

  	
  48

  
	
  SECTION 8.5

  	
  Subrogation

  	
  48

  
	
  SECTION 8.6

  	
  Reserved

  	
  49

  
	
  SECTION 8.7

  	
  SUBMISSION TO
  JURISDICTION; WAIVERS

  	
  49

  
	
  SECTION 8.8

  	
  Notices

  	
  50

  
	
  SECTION 8.9

  	
  Further Assurances

  	
  50

  
	
  SECTION 8.10

  	
  APPLICABLE LAW

  	
  50

  
	
  SECTION 8.11

  	
  Binding on Successors and
  Assigns

  	
  50

  
	
  SECTION 8.12

  	
  Specific Performance

  	
  50

  
	
  SECTION 8.13

  	
  Headings

  	
  51

  
	
  SECTION 8.14

  	
  Counterparts

  	
  51

  
	
  SECTION 8.15

  	
  Authorization

  	
  51

  
	
  SECTION 8.16

  	
  No Third Party
  Beneficiaries; Effect of Agreement

  	
  51

  

 

ii

 

	
  SECTION 8.17

  	
  Provisions Solely to
  Define Relative Rights

  	
  51

  
	
  SECTION 8.18

  	
  Grantors; Additional
  Grantors

  	
  51

  

 

iii

 

INTERCREDITOR AGREEMENT

 

This
INTERCREDITOR AGREEMENT, dated as of May 21, 2007, and entered into by and
among Douglas Dynamics, L.L.C., a Delaware limited liability company (“Douglas”),
Douglas Dynamics Finance Company, a Delaware corporation (“DD Finance”)
and Fisher, LLC, a Delaware limited liability company (“Fisher”, and
collectively with Douglas and DD Finance, the “ABL Borrower”), Douglas
Dynamics Holdings, Inc., a Delaware corporation (“Holdings”), each
other Grantor (as hereinafter defined) from time to time party hereto, CREDIT
SUISSE, acting through a Cayman Island Branch (“Credit Suisse”), in its
capacity as administrative agent under the ABL Loan Documents (as defined
below) (together with its successors and assigns from time to time in such capacity
(the “ABL Administrative Agent”), JPMorgan Chase Bank, N.A. (“JPMCB”)
in its capacity as collateral agent under the ABL Loan Documents (together with
its successors and assigns from time to time in such capacity, the “ABL
Collateral Agent”), Credit Suisse, in its capacities as administrative
agent (together with its successors and assigns from time to time in such
capacity the “Term Administrative Agent”) and collateral agent under the
Term Loan Documents (as defined below) (together with its successors and
assigns from time to time in such capacity, the “Term Collateral Agent”).  Capitalized terms used herein but not
otherwise defined herein have the meanings set forth in the ABL Credit
Agreement or the Term Credit Agreement, as context requires.

 

RECITALS

 

WHEREAS,
the ABL Borrower, Holdings, the lenders party thereto, the ABL Administrative
Agent and the ABL Collateral Agent have entered into that certain Credit
Agreement, dated as of the date hereof (as amended, restated, supplemented,
modified and/or Refinanced from time to time in accordance with the terms
hereof and thereof, the “ABL Credit Agreement”);

 

WHEREAS,
Douglas (the “Term Borrower”), Holdings, the Subsidiary Guarantors, the
lenders party thereto, the Term Collateral Agent and the Term Administrative
Agent have entered into that certain Credit Agreement, dated as of the date
hereof (as amended, restated, supplemented, modified and/or Refinanced from
time to time in accordance with the terms hereof and thereof, the “Term
Credit Agreement”);

 

WHEREAS,
the obligations of the ABL Borrower and the other Grantors under the ABL Loan
Documents and all ABL Hedging Obligations will be secured by substantially all
the property and assets of the ABL Borrower and the other Grantors,
respectively, pursuant to the terms of the ABL Security Documents;

 

WHEREAS,
the obligations of the Term Borrower and the other Grantors under the Term Loan
Documents will be secured by substantially all the property and assets of the
Term Borrower and the other Grantors, respectively, pursuant to the terms of
the Term Security Documents;

 

 

WHEREAS,
the ABL Loan Documents and the Term Loan Documents provide, among other things,
that the parties thereto shall set forth in this Agreement their respective
rights and remedies with respect to the Collateral;

 

WHEREAS,
in order to induce the ABL Collateral Agent and the ABL Creditors to consent to
the Grantors incurring the Term Obligations and to induce the ABL Creditors to
extend credit and other financial accommodations and lend monies to or for the
benefit of the ABL Borrower or any other Grantor, the Term Collateral Agent on
behalf of the Term Creditors (and each Term Creditor by its acceptance of the
benefits of the Term Security Documents) has agreed to the lien subordination,
intercreditor and other provisions set forth in this Agreement;

 

WHEREAS,
in order to induce the Term Collateral Agent and the Term Creditors to consent
to the Grantors incurring the ABL Obligations and to induce the Term Creditors
to extend credit and other financial accommodations and lend monies to or for
the benefit of Douglas or any other Grantor, the ABL Collateral Agent on behalf
of the ABL Creditors (and each ABL Creditor by its acceptance of the benefits
of the ABL Security Documents) has agreed to the lien subordination,
intercreditor and other provisions set forth in this Agreement;

 

NOW,
THEREFORE, in consideration of the foregoing, the mutual covenants and
obligations herein set forth and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1                          Defined Terms.  As used in the Agreement, the following terms
shall have the following meanings:

 

“ABL
Administrative Agent” has the meaning set forth in the preamble hereto.

 

“ABL
Banking Services Agreement” shall mean any Banking Services Agreement (as
defined in the ABL Credit Agreement) entered into by a Grantor and any ABL
Banking Services Provider (or any Person who was an ABL Banking Services
Provider as of the date such Banking Services Agreement was entered into).

 

“ABL
Banking Services Provider” shall mean, with respect to any Banking Services
Agreement, any counterparty thereto that, at the time such Banking Services
Agreement was entered into or as of the date of this Agreement, was an ABL
Administrative Agent, ABL Collateral Agent or ABL Lender or an Affiliate of an
ABL Administrative Agent, ABL Collateral Agent or ABL Lender.

 

“ABL
Banking Services Obligations” of the Grantors means any and all obligations
of the Grantors, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor and the payment of interest
and other amounts that would

 

2

 

accrue and become due but
for the commencement of any Insolvency or Liquidation Proceeding at the rate
provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such Insolvency or Liquidation
Proceeding) in connection with Banking Services Agreement (as defined in the
ABL Credit Agreement).

 

“ABL
Borrower” shall mean collectively, Douglas, DD Finance and Fisher, as
borrowers under the ABL Credit Agreement.

 

“ABL
Collateral Agent” has the meaning provided in the Preamble hereto.

 

“ABL
Credit Agreement” has the meaning set forth in the recitals hereto.

 

“ABL
Creditor Post-Petition Financing” has the meaning set forth in Section 6.1(a)(i) hereto.

 

“ABL
Creditors” shall mean, at any relevant time, the holders of ABL Obligations
at such time, including, without limitation, the ABL Lenders, the ABL Banking
Services Providers, the ABL Hedge Providers, the ABL Collateral Agent, the ABL
Administrative Agent and the other agents under the ABL Credit Agreement.

 

“ABL
Documents” shall mean and include the ABL Loan Documents, the ABL Banking
Services Agreements, and the ABL Hedge Agreements.

 

“ABL
Guaranty” means the guaranty pursuant to Section VII of the ABL Credit
Agreement.

 

“ABL
Hedge Agreement” shall mean any Hedge Agreement (as defined in the ABL
Credit Agreement) entered into by a Grantor and any ABL Hedge Provider (or any
Person who was an ABL Hedge Provider as of the date such Hedge Agreement was
entered into).

 

“ABL
Hedge Provider” shall mean, with respect to any Hedge Agreement, any
counterparty thereto that, at the time such Hedge Agreement was entered into or
as of the date of this Agreement, was an ABL Administrative Agent, ABL
Collateral Agent or ABL Lender or an Affiliate of an ABL Administrative Agent,
ABL Collateral Agent or ABL Lender.

 

“ABL
Hedging Obligations” shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon and including the payment of
interest and other amounts that would accrue and become due but for the
commencement of any Insolvency or Liquidation Proceeding at the rate provided
for in the respective documentation, whether or not a claim for post-petition
interest is allowed in any such Insolvency or Liquidation Proceeding) of each
Grantor owing to the ABL Hedge Providers, now existing or hereafter incurred
under, arising out of or in connection with each ABL Hedge Agreement (including
all such obligations and indebtedness under any guarantee to which each Grantor
is a party) and (ii) the due performance and compliance by each Grantor
with the terms, conditions and agreements of each ABL Hedge Agreement.

 

3

 

“ABL
Lenders” shall mean the “Lenders” under, and as defined in, the ABL
Credit Agreement; provided that the term “ABL Lender” shall in
any event include each letter of credit issuer and each swingline lender under
the ABL Credit Agreement.

 

“ABL
Loan Commitments” shall mean the loan commitments under the ABL Credit
Agreement.

 

“ABL
Loan Documents” shall mean the ABL Credit Agreement and the Credit
Documents (as defined in the ABL Credit Agreement) and each of the other
agreements, documents and instruments executed or delivered at any time in
connection therewith (including any intercreditor or joinder agreement among
holders of ABL Obligations but excluding ABL Hedge Agreements), to the extent
such are effective at the relevant time, as each may be amended, supplemented,
restated, modified and/or replaced from time to time in accordance with the
terms hereof and thereof.

 

“ABL
Mortgages” shall mean a collective reference to each mortgage, deed of
trust and any other document or instrument under which any Lien on real
property owned or leased by any Grantor is granted to secure any ABL
Obligations or under which rights or remedies with respect to any such Liens
are governed.

 

“ABL
Obligations” shall mean (i) all Obligations outstanding under the ABL
Credit Agreement and the other ABL Loan Documents, (ii) all ABL Hedging
Obligations and (iii) all ABL Banking Services Obligations.  “ABL Obligations” shall in any event
include: (a) all interest accrued or accruing (or which would, absent
commencement of an Insolvency or Liquidation Proceeding (and the effect of
provisions such as Section 502(b)(2) of the Bankruptcy Code), accrue)
after commencement of an Insolvency or Liquidation Proceeding in accordance
with the rate specified in the relevant ABL Document, whether or not the claim
for such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding, (b) any and all fees and expenses (including attorneys’ and/or
financial consultants’ fees and expenses) incurred by the ABL Collateral Agent,
the ABL Administrative Agent and the ABL Creditors after the commencement of an
Insolvency or Liquidation Proceeding, whether or not the claim for fees and
expenses is allowed under Section 506(b) of the Bankruptcy Code or
any other provision of the Bankruptcy Code or Bankruptcy Law as a claim in such
Insolvency or Liquidation Proceeding and (c) all obligations and
liabilities of each Grantor under each ABL Document to which it is a party
which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due.  The
ABL Obligations shall not include (x) principal of Loans or stated amounts
of Letters of Credit in excess of the Maximum ABL Principal Amount as in effect
at the time incurred or (y) any amount in clauses (a) through (c) of
the preceding sentence incurred in connection with the enforcement of the
excess amounts referred to in preceding clause (x).

 

“ABL
Priority Collateral” means all Collateral consisting of the following:

 

(a) all
Accounts;

 

(b) all
Inventory;

 

4

 

(c) all
Deposit Accounts and Securities Accounts and all cash, checks and other
property held therein or credited thereto (other than identifiable cash
proceeds of Term Priority Collateral held therein);

 

(d) to
the extent evidencing, governing, securing or otherwise related to the items
referred to in the preceding clauses (a) through (c), all
General Intangibles, Chattel Paper, Instruments, and Documents, provided
that to the extent any of the foregoing also relates to Term Priority
Collateral, only that portion related to the items referred to in the preceding
clauses (a) through (c) shall be included in the ABL Priority
Collateral;

 

(e) to
the extent evidencing, governing, securing or otherwise related to the items
referred to in the preceding clauses (a) through (d), all
Supporting Obligations, provided  that to the extent any of the
foregoing also relates to Term Priority Collateral, only that portion related
to the items referred to in the preceding clauses (a) through (d) shall
be included in the ABL Priority Collateral;

 

(f) all
books and records relating to the foregoing; and

 

(g) 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 Grantor from time to time with respect to any of the
foregoing.

 

All
capitalized terms used in this definition and not defined elsewhere in this
Agreement have the meanings assigned to them in the UCC.

 

“ABL
Recovery” has the meaning set forth in Section 6.5(a) hereto.

 

“ABL
Required Lenders” shall mean the “Requisite Lenders” under, and as
defined in, the ABL Credit Agreement.

 

“ABL
Secured Parties” shall mean, at any time, the ABL Collateral Agent, the ABL
Administrative Agent, each ABL Creditor, the beneficiaries of each
indemnification obligation undertaken by any Grantor under any ABL Document and
each other holder of, or obligee in respect of, any ABL Obligations outstanding
at such time.

 

“ABL
Security Documents” shall mean the Collateral Documents (as defined in the
ABL Credit Agreement), and any other agreement, document, mortgage or
instrument pursuant to which a Lien is granted securing any ABL Obligations or
under which rights or remedies with respect to such Liens are governed, as the
same may be amended, supplemented, restated, modified and/or replaced from time
to time in accordance with the terms hereof and thereof.

 

“ABL
Security Agreement” shall mean the Pledge and Security Agreement, dated as
of the date hereof, among the Borrower, the other Grantors from time to time
party thereto and the ABL Collateral Agent, as the same may be amended,
supplemented, restated, modified and/or replaced from time to time in
accordance with the terms hereof and thereof.

 

5

 

“Affiliate”
shall mean as to any Person, any other Person that, directly or indirectly, is
in control of, is controlled by, or is under common control with, such
Person.  For purposes of this definition,
“control” of a Person means the power, directly or indirectly, either to (a) vote
50% or more of the securities having ordinary voting power for the election of
directors (or persons performing similar functions) of such Person or (b) direct
or cause the direction of the management and policies of such Person, whether
through ownership of voting securities, or contract.

 

“Agreement”
shall mean this Agreement, as amended, supplemented, restated, modified and/or
replaced from time to time in accordance with the terms hereof and thereof.

 

“Bankruptcy
Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,”
as now and hereafter in effect, or any successor statute.

 

“Bankruptcy
Court” has the meaning set forth in Section 6.1(a)(ii) hereto.

 

“Bankruptcy
Law” shall mean, collectively, the Bankruptcy Code as now and hereafter in
effect, or any successor statute, and any similar federal provincial, state or
foreign law for the relief of debtors.

 

“Borrower”
shall mean (a) with respect to each of the ABL Documents, the ABL
Borrower, and (b) with respect to the Term Loan Documents, the Term
Borrower.

 

“Business
Day” shall mean a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.

 

“Collateral”
shall mean all assets and properties upon which a Lien is granted or purported
to be granted to the ABL Collateral Agent or Term Collateral Agent under any of
the ABL Security Documents or Term Security Documents.

 

“Collateral
Agent” means, as the context requires, collectively, the ABL Collateral
Agent and/or the Term Collateral Agent.

 

“Comparable
ABL Security Document” shall mean, in relation to any ABL Priority
Collateral subject to any Lien created under any Term Security Document, that
ABL Security Document which creates a Lien on the same ABL Priority Collateral,
granted by the same Grantor.

 

“Comparable
Term Security Document” shall mean, in relation to any ABL Priority
Collateral subject to any Lien created under any ABL Security Document, that
Term Security Document which creates a Lien on the same ABL Priority
Collateral, granted by the same Grantor.

 

“Creditors”
shall mean, collectively, the ABL Creditors and the Term Creditors.

 

“Credit
Suisse” has the meaning set forth in the preamble hereto.

 

“DD
Finance” has the meaning set forth in the preamble hereto.

 

6

 

“Discharge
of ABL Obligations” shall mean, except to the extent otherwise provided in Section 5.7
(and subject to Section 6.5), (a) payment in full in cash of
the principal of and interest (including interest accruing on or after the
commencement of any Insolvency or Liquidation Proceeding, whether or not such
interest would be allowed in such Insolvency or Liquidation Proceeding) and
premium, if any, on all Indebtedness outstanding under the ABL Documents, (b) payment
in full of all other ABL Obligations that are due and payable or otherwise
accrued and owing at or prior to the time such principal and interest and
premium, if any, are paid, (c) expiration, cancellation (without any prior
demand for payment thereunder having been made or, if made, with such demand
having been fully reimbursed in cash), cash collateralization or backstopping
with a letter of credit reasonably acceptable to the Issuing Lender (in this
case, as such term is defined in the ABL Credit Agreement) of all letters of
credit issued under the ABL Credit Agreement and cash collateralization of any
Grantor’s net obligation under ABL Hedge Agreements (to the extent required
thereby with notification by the relevant ABL Hedge Providers to the ABL
Collateral Agent) and (d) termination of all other commitments of the ABL
Creditors under the ABL Loan Documents.

 

“Discharge
of Term Obligations” shall mean, except to the extent otherwise provided in
Section 5.7 (and subject to Section 6.5), (a) payment
in full in cash of the principal of and interest (including interest accruing
on or after the commencement of any Insolvency or Liquidation Proceeding,
whether or not such interest would be allowed in such Insolvency or Liquidation
Proceeding) and premium, if any, on all Indebtedness outstanding under the Term
Loan Documents, (b) payment in full of all other Term Obligations that are
due and payable or otherwise accrued and owing at or prior to the time such
principal and interest and premium, if any, are paid and (c) termination
of all other commitments of the Term Creditors under the Term Loan Documents.

 

“Documents”
shall mean, as the context requires, collectively, the ABL Documents and the
Term Loan Documents.

 

“Douglas”
has the meaning set forth in the preamble hereto.

 

“Equity
Interests” of any Person shall mean any and all shares, interests, rights
to purchase, warrants, options, participation or other equivalents of or
interest in (however designated, whether voting or nonvoting) equity of such
Person, including any common stock, preferred stock, any limited or general
partnership interest and any limited liability company membership interest and
any and all warrants, rights or options to purchase any of the foregoing.

 

“Exposure
Amount” shall mean, with respect to any ABL Creditor Post-Petition
Financing or Term Creditor Post-Petition Financing, the sum of (without
duplication) (i) the aggregate principal amount of the commitments
thereunder, (ii) any principal amount (for this purpose, including the
maximum undrawn amounts of any then outstanding letters of credit and the
aggregate amount of unpaid outstanding reimbursement obligations related
thereto, and excluding all ABL Hedging Obligations and ABL Banking Services
Obligations) outstanding pursuant to the ABL Credit Agreement as of the
commencement of the relevant Insolvency or Liquidation Proceeding, and (iii) the
aggregate principal amount of Term Obligations as of the commencement of such
Insolvency or Liquidation Proceeding.

 

7

 

“Fisher”
has the meaning set forth in the preamble hereto.

 

“Governmental
Authority” shall mean any nation or government, any state, provincial or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank), any securities exchange and any
self-regulatory organization (including the National Association of Insurance
Commissioners).

 

“Grantors”
shall mean Holdings, the ABL Borrower, the Term Borrower and each of the
Subsidiary Guarantors that have executed and delivered, or may from time to
time hereafter execute and deliver, an ABL Security Document or a Term Security
Document.

 

“Hedge
Agreement” shall mean any agreement with respect to any swap, cap, collar,
hedge, forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions; 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 the Borrower or any of its Subsidiaries shall be a “Hedge Agreement”.

 

“Holdings”
has the meaning set forth in the preamble hereto.

 

“Indebtedness”
shall mean and includes all Obligations that constitute “Indebtedness”
within the meaning of the ABL Credit Agreement or the Term Credit Agreement.

 

“Insolvency
or Liquidation Proceeding” shall mean (a) any voluntary or involuntary
case or proceeding under the Bankruptcy Code or any other Bankruptcy Law or any
other Bankruptcy Law with respect to any Grantor, (b) any other voluntary
or involuntary insolvency, reorganization, arrangement or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization, arrangement or
other similar case or proceeding with respect to any Grantor or with respect to
a material portion of its respective assets, (c) any liquidation,
dissolution, reorganization or winding up of any Grantor whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy or (d) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of any Grantor.

 

“Letters
of Credit” shall mean “Letters of Credit” under, and as defined in,
the ABL Credit Agreement.

 

“Lien”
shall mean any mortgage, pledge, security interest, encumbrance, lien or charge
of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under the UCC or any similar recording or notice
statute, and any lease having substantially the same effect as the foregoing).

 

“Loans”
shall mean “Loans” under, and as defined in, the ABL Credit Agreement.

 

8

 

“Maximum
ABL Principal Amount” shall mean, at any time, (i) $90,000,000, less (ii) the
aggregate permanent reductions in the ABL Loan Commitments other than any such
reduction, repayment or prepayment made in connection with a Refinancing, less (iii) the
aggregate principal amount of Additional Term Loans (as defined in the Term
Credit Agreement) made under the Term Credit Agreement, plus (iv) for
the avoidance of doubt and without duplication, the aggregate principal amount
of any interest that has been capitalized under the ABL Credit Agreement.

 

“Maximum
Exposure Amount” shall mean, with respect to any ABL Creditor Post-Petition
Financing or Term Creditor Post-Petition Financing, the sum of (i) the
portion of the Maximum ABL Principal Amount outstanding as of the commencement
of the relevant Insolvency or Liquidation Proceeding, (ii) the portion of
the Maximum Term Principal Amount as of the commencement of such Insolvency or
Liquidation Proceeding and (iii) $40,000,000.

 

“Maximum
Term Principal Amount” shall mean, at any time, (i) $115,000,000, less
(ii) the aggregate principal amount of permanent repayments or prepayments
of indebtedness under the Term Credit Agreement, other than any such reduction,
repayment or prepayment made in connection with a Refinancing, less (iii) the
aggregate principal amount of Additional Revolving Loan Commitments (as defined
in the ABL Credit Agreement) made under the Term Credit Agreement, plus (iv) for
the avoidance of doubt and without duplication, the aggregate principal amount
of any interest that has been capitalized under the Term Credit Agreement.

 

“New
ABL Agent” has the meaning set forth in Section 5.7(a) hereto.

 

“New
Term Agent” has the meaning set forth in Section 5.7(b) hereto.

 

“Obligations”
shall mean any and all obligations (including guaranty obligations) with
respect to the payment and performance of (a) any principal of or interest
or premium on any indebtedness, including, without limitation, any
reimbursement obligation in respect of any letter of credit, or any other
liability, including the payment of interest and other amounts that would
accrue and become due but for the commencement of any Insolvency or Liquidation
Proceeding of any Grantor at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed in
any such Insolvency or Liquidation Proceeding, (b) any fees, indemnification
obligations, expense reimbursement obligations or other liabilities payable
under the documentation governing any indebtedness (including, without
limitation, the retaking, holding, selling or otherwise disposing of or
realizing on the Collateral), (c) any obligation to post cash collateral
in respect of letters of credit or any other obligations, and (d) all
performance obligations under the documentation governing any indebtedness.

 

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

 

“Refinancing”
shall mean,

 

(a)                                  in respect of
any Indebtedness and/or, if any, commitments to extend credit under the ABL
Credit Agreement, any refinancing, extension, renewal, defeasance,

 

9

 

restructuring, replacement
or refunding of loans and/or, if any, commitments under the ABL Credit Agreement,
to the extent the aggregate principal amount of loans and commitments made in
connection with such refinancing, extension, renewal, defeasance,
restructuring, replacement or refunding does not exceed the Maximum ABL
Principal Amount; provided that any such refinancing, extension,
renewal, defeasance, restructuring, replacement or refunding (and the
Indebtedness resulting therefrom) does not (i) contravene the provisions
of this Agreement (and the holders of such refinancing Indebtedness, or an
agent on their behalf, have agreed to be bound by the terms hereof), (ii) result
in the increase in the “Applicable Margin” or similar component of the interest
or the yield on the loans thereunder by more than 1.5% per annum (exclusive,
for the avoidance of doubt, of any increases (A) resulting from
application of the pricing grid set forth in the ABL Credit Agreement as in
effect on the date hereof or (B) resulting from the accrual of interest at
the default rate), (iii) provide for dates for payment of principal,
interest, premium (if any) or fees which are earlier than such dates under the
ABL Credit Agreement, or (iv) convert the ABL Credit Agreement to, or
refinance the ABL Credit Agreement with, a term loan credit facility or a
revolving credit facility the availability of which is not subject to a
borrowing base comprised of accounts receivable and inventory.

 

(b)                                 in respect of
any Indebtedness and/or, if any, commitments to extend credit under the Term
Credit Agreement, any refinancing, extension, renewal, defeasance,
restructuring, replacement or refunding of loans and/or, if any, commitments
under the Term Credit Agreement, to the extent the aggregate principal amount
of loans and commitments made in connection with such refinancing, extension,
renewal, defeasance, restructuring, replacement or refunding does not exceed
the Maximum Term Principal Amount; provided that any such refinancing,
extension, renewal, defeasance, restructuring, replacement or refunding (and
the Indebtedness resulting therefrom) does not (i) contravene the
provisions of this Agreement (and the holders of such refinancing Indebtedness,
or an agent on their behalf, have agreed to be bound by the terms hereof), (ii) result
in an increase in the “Applicable Margin” or similar component of the
interest yield of such refinancing Indebtedness which is more than 3.0% per
annum above the “Applicable Margin” or similar component under the Term
Credit Agreement as of the date hereof (excluding increases resulting from the
accrual of interest at the default rate); and (iii) change (to earlier
dates) any dates upon which payments of principal or interest are due thereon.

 

With respect to clause
(a), the Term Administrative Agent shall be provided with written notice by
the Borrower that the Obligations arising from the refinancing, extension,
renewal, defeasance, restructuring, replacement or refunding referenced in clause
(a) are intended to constitute ABL Obligations hereunder (it being
understood that the failure of any such notice to be given shall not impair or
affect the Term Administrative Agent’s or the Term Creditor’s obligations to
the ABL Administrative Agent and the ABL Creditors, the ABL Administrative
Agent’s rights hereunder, the enforceability of this Agreement or any liens
created or granted hereby or under any ABL Loan Document).  With respect to clause (b), the ABL
Administrative Agent shall be provided with written notice that the Obligations
arising from the refinancing, extension, renewal, defeasance, restructuring,
replacement or refunding referenced in clause (b) are intended to
constitute Term Obligations hereunder (it being understood that the failure of
any such notice to be given shall not impair or affect the ABL Administrative
Agent’s or any ABL Creditor’s obligations to the Term Administrative Agent and
the Term Creditors, the Term

 

10

 

Administrative Agent’s
rights hereunder, the enforceability of this Agreement or any liens created or
granted hereby or under any Term Document).

 

“Required
ABL Creditors” shall mean at all times prior to the occurrence of the
Discharge of ABL Obligations, the ABL Required Lenders (or, to the extent
required by the ABL Credit Agreement, each of the ABL Lenders).

 

“Required
Term Creditors” shall mean at all times prior to the occurrence of the
Discharge of Term Obligations, the Term Required Lenders (or, to the extent
required by the Term Credit Agreement, each of the Term Lenders).

 

“Security
Documents” shall mean, collectively, the ABL Security Documents and the
Term Security Documents.

 

“Subsidiary
Guarantors” shall mean each Subsidiary of Holdings which enters into a
guaranty of any ABL Obligations or Term Obligations.

 

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

 

“Term
Administrative Agent” has the meaning set forth in the preamble hereto.

 

“Term
Borrower” has the meaning set forth in the preamble hereto.

 

“Term
Collateral Agent” has the meaning provided in the first paragraph of this
Agreement.

 

“Term
Credit Agreement” has the meaning set forth in the recitals hereto.

 

“Term
Creditor Post-Petition Financing” has the meaning set forth in Section 6.1(b)(i) hereto.

 

“Term
Creditors” shall mean, at any relevant time, the holders of Term
Obligations at such time, including without limitation the Term Lenders, the
Term Collateral Agent, the Term Administrative Agent and any other agents under
the Term Credit Agreement.

 

“Term
Lenders” shall mean the “Lenders” under and as defined in the Term Credit
Agreement.

 

11

 

“Term
Loan Documents” shall mean the Term Credit Agreement and the other Credit
Documents (as defined in the Term Credit Agreement) and each of the other
agreements, documents and instruments 
executed or delivered at any time in connection therewith (including any
intercreditor or joinder agreement among holders of Term Obligations), to the
extent such are effective at the relevant time, as the same may be amended,
supplemented, restated, modified and/or replaced from time to time in
accordance with the terms hereof and thereof.

 

“Term
Obligations” shall mean all Obligations outstanding under the Term Credit
Agreement and the other Term Loan Documents. 
“Term Obligations” shall in any event include: (a) all
interest accrued or accruing (or which would, absent commencement of an
Insolvency or Liquidation Proceeding (and the effect of provisions such as Section 502(b)(2) of
the Bankruptcy Code), accrue) after commencement of an Insolvency or
Liquidation Proceeding in accordance with the rate specified in the relevant
Term Loan Document whether or not the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding and (b) any and all
fees and expenses (including attorneys’ and/or financial consultants’ fees and
expenses) incurred by the Term Collateral Agent, the Term Administrative Agent
and the Term Creditors after the commencement of an Insolvency or Liquidation
Proceeding, whether or not the claim for fees and expenses is allowed under Section 506(b) of
the Bankruptcy Code or any other provision of the Bankruptcy Code or Bankruptcy
Law as a claim in such Insolvency or Liquidation Proceeding.  The Term Obligations shall not include (x) principal
in excess of the Maximum Term Principal Amount or (y) any amount in
clauses (a) through (c) of the preceding sentence incurred in
connection with the enforcement of the excess amounts referred to in preceding clause
(x).

 

“Term
Priority Collateral” shall mean any and all Collateral, other than the ABL
Priority Collateral.

 

“Term
Recovery” has the meaning set forth in Section 6.5(b) hereto.

 

“Term
Required Lenders” shall mean the “Requisite Lenders” under, and as
defined in, the Term Credit Agreement.

 

“Term
Secured Parties” shall mean, at any time, the Term Collateral Agent, the
Term Administrative Agent, each Term Creditor, the beneficiaries of each
indemnification obligation undertaken by any Grantor under any Term Document
and each other holder of, or obligee in respect of, any Term Obligations
outstanding at such time.

 

“Term
Security Documents” shall mean the Collateral Documents (as defined in the
Term Credit Agreement), and any other agreement, document, mortgage or
instrument pursuant to which a Lien is granted securing any Term Obligations or
under which rights or remedies with respect to such Liens are governed, as the
same may be amended, supplemented, restated, modified and/or replaced from time
to time in accordance with the terms hereof and thereof.

 

“Term
Security Agreement” shall mean the Pledge and Security Agreement, dated as
of the date hereof, among the Borrower, the other Grantors from time to time
party thereto and the Term Collateral Agent, as the same may be amended,
supplemented, restated, modified 

 

12

 

and/or replaced from time to
time or otherwise modified from time to time in accordance with the terms
hereof and thereof.

 

“Term
Guaranty” shall mean the guaranty pursuant to Section VII of the Term
Credit Agreement.

 

“Uniform
Commercial Code” or “UCC” means the Uniform Commercial Code as from
time to time in effect in the State of New York.

 

SECTION 1.2                          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, (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 Exhibits or Sections shall be construed to refer to
Exhibits or Sections of this Agreement, (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, (f) terms defined in the UCC but not
otherwise defined herein shall have the same meanings herein as are assigned
thereto in the UCC, (g) reference to any law means such law as amended,
modified, codified, replaced or re-enacted, in whole or in part, and in effect
on the date hereof, including rules, regulations, enforcement procedures and
any interpretations promulgated thereunder and (h) underscored references
to Sections or clauses shall refer to those portions of this Agreement, and any
underscored references to a clause shall, unless otherwise identified, refer to
the appropriate clause within the same Section in which such reference
occurs.

 

ARTICLE II

 

PRIORITY OF LIENS; ETC.

 

SECTION 2.1                          Subordination
of Liens; Etc.  (a)  ABL
Priority Collateral.  Notwithstanding
the date, manner or order of grant, attachment or perfection of (x) any
Liens securing the ABL Obligations granted on the ABL Priority Collateral or (y) any
Liens securing the Term Obligations granted on the ABL Priority Collateral and
notwithstanding any provision of the UCC, any other applicable law, the Term
Loan Documents or any other circumstance whatsoever (including any invalidity
or non-perfection of any Lien purporting to secure the ABL Obligations, and/or
the Term Obligations), the Term Collateral Agent, on behalf of itself and the
other Term Creditors, and each other Term Creditor (by its acceptance of the
benefits of the Term Loan Documents) hereby agree that:

 

13

 

(i)                                     any Lien on the
ABL Priority Collateral securing any ABL Obligations now or hereafter held by
or on behalf of the ABL Collateral Agent or any ABL Creditors or any agent or
trustee therefor, regardless of how acquired, whether by grant, possession,
statute, operation of law, subrogation or otherwise, shall be senior in all
respects and prior to any Lien on the ABL Priority Collateral securing any of
the Term Obligations;

 

(ii)                                  all Liens on
the ABL Priority Collateral securing any ABL Obligations shall be and remain
senior in all respects and prior to all Liens on the ABL Priority Collateral
securing any Term Obligations, whether or not such Liens securing any ABL
Obligations are subordinated to any Lien securing any other obligation of the
Borrower, any other Grantor or any other Person;

 

(iii)                               it is their
intent that (x) the ABL Obligations (and the security therefor) constitute
a separate and distinct class (and separate and distinct claims) from the Term
Obligations (and the security therefore) and (y) the Term Obligations (and
the security therefor) constitute a separate and distinct class (and separate and
distinct claims) from the ABL Obligations (and the security therefor).

 

(b)                                 Term Priority
Collateral. 
Notwithstanding the date, manner or order of grant, attachment or
perfection of (x) any Liens securing the Term Obligations granted on the
Term Priority Collateral or (y) any Liens securing the ABL Obligations
granted on the Term Priority Collateral and notwithstanding any provision of
the UCC, any other applicable law, the ABL Loan Documents or any other
circumstance whatsoever (including any invalidity or non-perfection of any Lien
purporting to secure the Term Obligations and/or the ABL Obligations), the ABL
Collateral Agent, on behalf of itself and the other ABL Creditors, and each
other ABL Creditor (by its acceptance of the benefits of the ABL Loan
Documents) hereby agree that:

 

(i)                                     any Lien on the
Term Priority Collateral securing any Term Obligations now or hereafter held by
or on behalf of the Term Collateral Agent or any Term Creditors or any agent or
trustee therefor, regardless of how acquired, whether by grant, possession,
statute, operation of law, subrogation or otherwise, shall be senior in all
respects and prior to any Lien on the Term Priority Collateral securing any of
the ABL Obligations;

 

(ii)                                  all Liens on
the Term Priority Collateral securing any Term Obligations shall be and remain
senior in all respects and prior to all Liens on the Term Priority Collateral
securing any ABL Obligations for all purposes, whether or not such Liens
securing any Term Obligations are subordinated to any Lien securing any other
obligation of the Borrower, any other Grantor or any other Person;

 

(iii)                               it is their
intent that (x) the Term Obligations (and the security therefor)
constitute a separate and distinct class (and separate and distinct claims)
from the ABL Obligations (and the security therefor) and (y) the ABL
Obligations (and the security therefor) constitute a separate and distinct
class (and separate and distinct claims) from the Term Obligations (and the
security therefor).

 

14

 

Notwithstanding anything to
the contrary contained above or elsewhere in this Agreement, for all purposes
of this Agreement (x) the ABL Obligations shall be deemed secured by Liens
on all ABL Priority Collateral regardless of whether a Lien or security
interest has in fact been granted (or purported to be granted) with respect
thereto and (y) the Term Obligations shall be deemed secured by Liens on
all Term Priority Collateral regardless of whether a Lien or security interest has
in fact been granted (or purported to be granted) with respect thereto.

 

SECTION 2.2                          Prohibition on
Contesting Liens.  The Term
Collateral Agent, for itself and on behalf of each Term Creditor, and the ABL
Collateral Agent, for itself and on behalf of each ABL Creditor, agrees that it
shall not (and hereby waives any right to) contest or support any other Person
in contesting, in any proceeding (including, without limitation, any Insolvency
or Liquidation Proceeding), (i) the validity or enforceability of any
Security Document or any Obligation thereunder, (ii) the validity,
perfection, priority or enforceability of the Liens, mortgages, assignments and
security interests granted (or purported to be granted) pursuant to the
Security Documents with respect to the ABL Obligations or the Term Obligations,
or (iii) the relative rights and duties of the holders of the ABL
Obligations and the Term Obligations granted and/or established in this
Agreement or any other Security Document (to the extent not inconsistent with
the terms of this Agreement) with respect to such Liens, mortgages,
assignments, and security interests; provided that nothing in this Agreement
shall be construed to prevent or impair the rights of any Collateral Agent or
any other Creditor to enforce this Agreement, including the priority of the
Liens securing the respective Obligations as provided in Section 2.1.

 

SECTION 2.3                          No New Liens.  (a)  ABL Obligation — ABL Priority
Collateral.  So long as the Discharge
of ABL Obligations has not occurred, the parties hereto agree that the Grantors
shall not, and shall not permit any of their Subsidiaries to (i) grant or
permit any additional Liens, or take any action to perfect any additional
Liens, on any ABL Priority Collateral to secure any Term Obligation unless the
Grantors and each such Subsidiary has become a Grantor hereunder and/or has
also granted a Lien on such ABL Priority Collateral to secure the ABL
Obligations in accordance with the relevant priority set forth in this
Agreement or (ii) grant or permit any additional Liens, or take any action
to perfect any additional Liens, on any ABL Priority Collateral to secure any
ABL Obligation unless the Grantors and each such Subsidiary has become a
Grantor hereunder and/or has also granted a Lien on such ABL Priority
Collateral to secure the Term Obligations in accordance with the relevant
priority set forth in this Agreement.  To
the extent that the forgoing provisions are not complied with for any reason,
without limiting any other rights and remedies available to the ABL Collateral
Agent and/or the other ABL Creditors and the Term Collateral Agent and/or the
other Term Creditors (in each case by its acceptance of the benefits of the
respective Security Documents), each of the ABL Collateral Agent and Term
Collateral Agent agrees that any amounts received by or distributed to any of
them pursuant to or as a result of any liens granted in contravention of this Section 2.3(a) shall
be subject to Section 4.2(a).

 

(b)                                 Term
Obligations — Term Priority Collateral.  So long as the Discharge of Term Obligations
has not occurred, the parties hereto agree that the Grantors shall not, and
shall not permit any of their Subsidiaries to (i) grant or permit any
additional Liens, or take any action to perfect any additional Liens, on any
Term Priority Collateral to secure any ABL Obligation unless the Grantors and
each such Subsidiary has become a Grantor hereunder and/or has also

 

15

 

granted a Lien on such Term
Priority Collateral to secure the Term Obligations in accordance with the
relevant priority set forth in this Agreement or (ii) grant or permit any
additional Liens, or take any action to perfect any additional Liens, on any
Term Priority Collateral to secure any Term Obligation unless the Grantors and
each such Subsidiary has become a Grantor hereunder and/or has also granted a
Lien on such Term Priority Collateral to secure the ABL Obligations in
accordance with the relevant priority set forth in this Agreement.  To the extent that the forgoing provisions
are not complied with for any reason, without limiting any other rights and
remedies available to the Term Collateral Agent and/or the other Term Creditors
and the ABL Collateral Agent and/or the other ABL Creditors (in each case by
its acceptance of the benefits of the respective Security Documents), each of
the ABL Collateral Agent and Term Collateral Agent agrees that any amounts
received by or distributed to any of them pursuant to or as a result of any liens
granted in contravention of this Section 2.3(b) shall be
subject to Section 4.2(c).

 

SECTION 2.4                          Similar Liens
and Agreements.  The parties
hereto agree that it is their intention that the Collateral under the ABL Loan
Documents and the Term Loan be identical. 
In furtherance of the foregoing and of Section 8.9, the
parties hereto agree, subject to the other provisions of this Agreement:

 

(a)                                  upon request by
the ABL Collateral Agent or the Term Collateral Agent, to cooperate in good
faith (and to direct their counsel to cooperate in good faith) from time to
time in order to determine the specific items included in the ABL Priority
Collateral and the Term Priority Collateral and the steps taken to perfect
their respective Liens thereon and the identity of the respective parties
obligated under the ABL Loan Documents and Term Loan Documents; and

 

(b)                                 that the ABL
Security Agreement and Term Security Agreement shall be substantially in the
same forms (except for differences relating to the subordination of the Liens
between the ABL Obligations and Term Obligations).

 

ARTICLE III

 

ENFORCEMENT

 

SECTION 3.1                          Exercise of
Remedies.  (a)  ABL
Priority Collateral — No Contest by Term Creditors.  The provisions of this clause (a) are
subject to clause (k) below. 
So long as the Discharge of ABL Obligations has not occurred, whether or
not any Insolvency or Liquidation Proceeding has been commenced by or against
the Borrower or any other Grantor: (i) the Term Collateral Agent and the
other Term Creditors will not exercise or seek to exercise any rights or
remedies (including, without limitation, setoff) with respect to any ABL
Priority Collateral (including, without limitation, the exercise of any right
under any lockbox agreement, control account agreement, landlord waiver or
bailee’s letter or similar agreement or arrangement to which any of the Term
Collateral Agent or any Term Creditor is a party) or institute or commence, or
join with any Person in commencing, any action or proceeding with respect to
such rights or remedies (including, without limitation, any action of
foreclosure, enforcement, collection or execution and any Insolvency or
Liquidation Proceeding), and will not contest, protest or object to any
foreclosure proceeding or action brought by the ABL Collateral Agent or

 

16

 

any ABL Creditor or any
other exercise by the ABL Collateral Agent or any ABL Creditor, of any rights
and remedies relating to the ABL Priority Collateral under the ABL Loan
Documents or otherwise, or object to the forbearance by the ABL Collateral
Agent or the ABL Creditors from bringing or pursuing any foreclosure proceeding
or action or any other exercise of any rights or remedies relating to the ABL
Priority Collateral; and (ii) the ABL Collateral Agent shall have the
exclusive right, and the Required ABL Creditors shall have the exclusive right
to instruct the ABL Collateral Agent, to enforce rights, exercise remedies
(including, without limitation, set-off and the right to credit bid their debt)
and make determinations regarding the release, disposition, or restrictions
with respect to the ABL Priority Collateral without any consultation with or
the consent of any of the Term Collateral Agent or any Term Creditor, all as
though the Term Obligations did not exist; provided, that (A) in
any Insolvency or Liquidation Proceeding commenced by or against the Borrower
or any Grantor, the Term Collateral Agent and, if applicable, each other Term
Creditor may file a claim or statement of interest with respect to the Term
Obligations, (B) the Term Collateral Agent may take any action (not
adverse to the prior Liens on the ABL Priority Collateral securing the ABL
Obligations, or the rights of the ABL Collateral Agent or the ABL Creditors to
exercise remedies in respect thereof) in order to preserve or protect their
respective Liens on the ABL Priority Collateral in accordance with the terms of
this Agreement and (C) the Term Creditors shall be entitled to file any
necessary responsive or defensive pleading in opposition to any motion, claim,
adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the Term Creditors.  In exercising rights and remedies with
respect to the ABL Priority Collateral, the ABL Collateral Agent and the ABL
Creditors may enforce the provisions of the ABL Loan Documents and exercise
rights and remedies thereunder, all in such order and in such manner as they
may determine in the exercise of their sole discretion.  Such exercise and enforcement shall include
the rights of an agent appointed by them to sell or otherwise dispose of ABL
Priority Collateral upon foreclosure, to incur expenses in connection with such
sale or disposition, and to exercise all the rights and remedies of a secured
creditor under the Uniform Commercial Code of any applicable jurisdiction and
of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

 

(b)                                 Term Priority
Collateral — No Contest by ABL Creditors.  The provisions of this clause (b) are
subject to clause (n) below. 
So long as the Discharge of Term Obligations has not occurred, whether
or not any Insolvency or Liquidation Proceeding has been commenced by or
against the Borrower or any other Grantor: (i) the ABL Collateral Agent
and the other ABL Creditors will not exercise or seek to exercise any rights or
remedies (including, without limitation, setoff) with respect to any Term
Priority Collateral (including, without limitation, the exercise of any right
under any lockbox agreement, control account agreement, landlord waiver or
bailee’s letter or similar agreement or arrangement to which any of  the ABL Collateral Agent or any ABL Creditor
is a party) or institute or commence, or join with any Person in commencing, any
action or proceeding with respect to such rights or remedies (including,
without limitation, any action of foreclosure, enforcement, collection or
execution and any Insolvency or Liquidation Proceeding), and will not contest,
protest or object to any foreclosure proceeding or action brought by the Term
Collateral Agent or any Term Creditor or any other exercise by the Term
Collateral Agent or any Term Creditor, of any rights and remedies relating to
the Term Priority Collateral under the Term Loan Documents or otherwise, or
object to the forbearance by the Term Collateral Agent or the Term Creditors
from bringing or pursuing any foreclosure proceeding or action or any other
exercise of any rights or remedies relating to the

 

17

 

Term Priority Collateral;
and (ii) the Term Collateral Agent shall have the exclusive right, and the
Required Term Creditors shall have the exclusive right to instruct the Term
Collateral Agent, to enforce rights, exercise remedies (including, without
limitation, set-off and the right to credit bid their debt) and make
determinations regarding the release, disposition, or restrictions with respect
to the Term Priority Collateral without any consultation with or the consent of
any of the ABL Collateral Agent or any ABL Creditor, all as though the ABL
Obligations did not exist; provided, that in any Insolvency or
Liquidation Proceeding commenced by or against the Borrower or any other
Grantor, (A) the ABL Collateral Agent and, if applicable, each other ABL
Creditor may file a claim or statement of interest with respect to the ABL
Obligations, (B) the ABL Collateral Agent may take any action (not adverse
to the prior Liens on the Term Priority Collateral securing the Term
Obligations, or the rights of the Term Collateral Agent or the Term Creditors
to exercise remedies in respect thereof) in order to preserve or protect their
respective Liens on the Term Priority Collateral in accordance with the terms
of this Agreement and (C) the ABL Creditors shall be entitled to file any
necessary responsive or defensive pleading in opposition to any motion, claim,
adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the ABL Creditors,
including any claim secured by the Term Priority Collateral, if any, in each
case in accordance with the terms of this Agreement.  In exercising rights and remedies with
respect to the Term Priority Collateral, the Term Collateral Agent and the Term
Creditors may enforce the provisions of the Term Loan Documents and exercise
rights and remedies thereunder, all in such order and in such manner as they
may determine in the exercise of their sole discretion.  Such exercise and enforcement shall include
the rights of an agent appointed by them to sell or otherwise dispose of Term
Priority Collateral upon foreclosure, to incur expenses in connection with such
sale or disposition, and to exercise all the rights and remedies of a secured
creditor under the Uniform Commercial Code of any applicable jurisdiction and
of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

 

(c)                                  [RESERVED]

 

(d)                                 [RESERVED]

 

(e)                                  Receipt of ABL
Priority Collateral by Term Creditors.  The Term Collateral Agent, on behalf of
itself and the Term Creditors, and each other Term Creditor (by its acceptance
of the benefits of the Term Loan Documents) agree that it will not take or
receive any ABL Priority Collateral or any proceeds of ABL Priority Collateral
in connection with the exercise of any right or remedy (including, without
limitation; setoff) with respect to any ABL Priority Collateral, unless and
until the Discharge of ABL Obligations has occurred.  Without limiting the generality of the
foregoing, unless and until the Discharge of ABL Obligations has occurred, the
sole right of the Term Collateral Agent and the Term Creditors with respect to
the ABL Priority Collateral is to hold a Lien on the ABL Priority Collateral
pursuant to the Term Security Documents for the period and to the extent
granted therein and to receive a share of the proceeds thereof, if any, after
the Discharge of the ABL Obligations has occurred in accordance with the terms
of Article IV hereof, the Term Loan Documents and applicable law.

 

(f)                                    Receipt of Term
Priority Collateral by ABL Creditors.  The ABL Collateral Agent, on behalf of itself
and the ABL Creditors, and each other ABL Creditor (by its acceptance of the
benefits of the ABL Loan Documents) agree that it will not take or receive any

 

18

 

Term Priority Collateral or
any proceeds of Term Priority Collateral in connection with the exercise of any
right or remedy (including, without limitation, setoff) with respect to any
Term Priority Collateral, unless and until the Discharge of Term Obligations
has occurred.  Without limiting the
generality of the foregoing, unless and until the Discharge of Term Obligations
has occurred, the sole right of the ABL Collateral Agent and the ABL Creditors
with respect to the Term Priority Collateral is to hold a Lien on the Term
Priority Collateral pursuant to the ABL Security Documents for the period and
to the extent granted therein and to receive a share of the proceeds thereof,
if any, after the Discharge of the Term Obligations has occurred in accordance
with the terms of Article IV hereof, the ABL Loan Documents and
applicable law.

 

(g)                                 ABL Priority
Collateral — Term Creditor Waiver.  (i)  The Term Collateral Agent, for
itself and on behalf of the Term Creditors, and each other Term Creditor (by
its acceptance of the benefits of the Term Loan Documents), with respect to the
ABL Priority Collateral, (x) agrees that the Term Collateral Agent and the
other Term Creditors will not take any action that would hinder, delay, limit
or prohibit any exercise of remedies under the ABL Loan Documents, including
any collection, sale, lease, exchange, transfer or other disposition of the ABL
Priority Collateral, whether by foreclosure or otherwise, or that would limit,
invalidate, avoid or set aside any Lien or ABL Security Document or subordinate
the priority of the ABL Obligations to the Term Obligations or grant the Liens
securing the Term Obligations equal ranking to the Liens securing the ABL
Obligations and (y) hereby waives any and all rights it or the Term
Creditors may have as a junior lien creditor or otherwise (whether arising
under the UCC or under any other law) to object to the manner in which the ABL
Collateral Agent or the ABL Creditors seek to enforce or collect the ABL
Obligations or the Liens granted in any of the ABL Priority Collateral,
regardless of whether any action or failure to act by or on behalf of the ABL
Collateral Agent or ABL Creditors is adverse to the interests of the Term
Creditors.

 

(ii)                                  The Term
Collateral Agent hereby acknowledges and agrees that no covenant, agreement or
restriction contained in the Term Security Documents or any other Term Loan
Document shall be deemed to restrict in any way the rights and remedies of the
ABL Collateral Agent or the ABL Creditors with respect to the ABL Priority
Collateral as set forth in this Agreement.

 

(h)                                 Term Priority
Collateral — ABL Creditor Waiver.  (i)  The ABL Collateral Agent, for
itself and on behalf of the ABL Creditors, and each other ABL Creditor (by its
acceptance of the benefits of the ABL Loan Documents), with respect to the Term
Priority Collateral, (x) agrees that the ABL Collateral Agent and the
other ABL Creditors will not take any action that would hinder, delay, limit or
prohibit any exercise of remedies under the Term Loan Documents, including any
collection, sale, lease, exchange, transfer or other disposition of the Term
Priority Collateral, whether by foreclosure or otherwise, or that would limit,
invalidate, avoid or set aside any Lien or Term Security Document or
subordinate the priority of the Term Obligations to the ABL Obligations or
grant the Liens securing the ABL Obligations equal ranking to the Liens
securing the Term Obligations and (y) hereby waives any and all rights it
or the ABL Creditors may have as a junior lien creditor or otherwise (whether
arising under the UCC or under any other law) to object to the manner in which
the Term Collateral Agent or the Term Creditors seek to enforce or collect the
Term Obligations or the Liens granted in any of the Term Priority Collateral,
regardless of whether any action or failure to act by or on behalf of the Term
Collateral Agent or Term Creditors is adverse to the interests of the ABL
Creditors.

 

19

 

(ii)                                  The ABL
Collateral Agent hereby acknowledges and agrees that no covenant, agreement or
restriction contained in the ABL Security Documents or any other ABL Loan
Document shall be deemed to restrict in any way the rights and remedies of the
Term Collateral Agent or the Term Creditors with respect to the Term Priority
Collateral as set forth in this Agreement.

 

(i)                                     [RESERVED]

 

(j)                                     [RESERVED]

 

(k)                                  ABL Priority
Collateral — Term Creditor Rights.  Notwithstanding anything to the contrary in Section 3.1(a) through
(h), with respect to the ABL Priority Collateral, at any time while a
payment default exists with respect to the Term Obligations following the final
maturity of the Term Obligations, or the acceleration by the relevant Term
Creditors of the maturity of all then outstanding Term Obligations, and in
either case so long as 120 days have elapsed after notice thereof (and
requesting that enforcement action be taken with respect to the ABL Priority
Collateral) has been received by the ABL Collateral Agent and so long as the
respective payment default shall not have been cured or waived (or the
respective acceleration rescinded), the Term Collateral Agent, for itself and
on behalf of the Term Creditors, and the other Term Creditors may, but only if
the ABL Collateral Agent or the ABL Creditors are not pursuing enforcement
proceedings with respect to the ABL Priority Collateral in a commercially
reasonable manner (with any determination of which ABL Priority Collateral to
proceed against, and in what order, to be made by the ABL Collateral Agent or
such ABL Creditors in their reasonable judgment), enforce the Liens on ABL
Priority Collateral granted pursuant to the Term Security Documents, provided
that (x) any ABL Priority Collateral or any proceeds of ABL Priority
Collateral received by the Term Collateral Agent or such other Term Creditor,
as the case may be, in connection with the enforcement of such Lien (net of
reasonable costs actually incurred in connection with such enforcement) shall
be applied in accordance with the following Article IV hereof and (y) the
ABL Collateral Agent or any other ABL Creditors may at any time take over such
enforcement proceedings, provided that the ABL Collateral Agent or such
ABL Creditors, as the case may be, pursues enforcement proceedings in respect
of the ABL Priority Collateral in a commercially reasonably manner, with any
determination of which ABL Priority Collateral to proceed against, and in what
order, to be made by the ABL Collateral Agent or such ABL Creditors in their
reasonable judgment, and provided, further that the Term
Collateral Agent or Term Creditors, as the case may be, shall only be able to
recoup (from amounts realized by the ABL Collateral Agent or any ABL Creditor(s) in
any enforcement proceeding with respect to the ABL Priority Collateral (whether
initiated by the ABL Collateral Agent or ABL Creditor(s) or taken over by
them as contemplated above) any expenses incurred by them in accordance with
the priorities set forth in following Article IV.

 

(l)                                     [RESERVED]

 

(m)                               [RESERVED]

 

(n)                                 Term Priority
Collateral — ABL Creditor Rights.  Notwithstanding anything to the contrary in Section 3.1(a) through
(h) with respect to the Term Priority Collateral, at any time while
a payment default exists with respect to the ABL Obligations following the

 

20

 

final maturity of the ABL
Obligations, or the acceleration by the relevant ABL Creditors of the maturity
of all then outstanding ABL Obligations, and in either case so long as 120 days
have elapsed after notice thereof (and requesting that enforcement action be
taken with respect to the Term Priority Collateral) has been received by the
Term Collateral Agent and so long as the respective payment default shall not
have been cured or waived (or the respective acceleration rescinded), the ABL
Collateral Agent, for itself and on behalf of the ABL Creditors, and the other
ABL Creditors may, but only if the Term Collateral Agent or the Term Creditors
are not pursuing enforcement preceding with respect to the Term Priority
Collateral in a commercially reasonable manner (with any determination of which
Term Priority Collateral to proceed against, and in what order, to be made by
the Term Collateral Agent or such Term Creditors in their reasonable judgment),
enforce the Liens on Term Priority Collateral granted pursuant to the ABL
Security Documents, provided that (x) any Term Priority Collateral
or any proceeds of Term Priority Collateral received by the ABL Collateral
Agent or such other ABL Creditor, as the case may be, in connection with the
enforcement of such Lien (net of reasonable costs actually incurred in
connection with such enforcement) shall be applied in accordance with the
following Article IV hereof and (y) the Term Collateral Agent
or any other Term Creditors or may at any time take over such enforcement
proceedings, provided that the Term Collateral Agent or such Term
Creditors, as the case may be, pursues enforcement proceedings in respect of
the Term Priority Collateral in a commercially reasonably manner, with any
determination of which Term Priority Collateral to proceed against, and in what
order, to be made by the Term Collateral Agent or such Term Creditors in their
reasonable judgment, and provided, further that the ABL
Collateral Agent or ABL Creditors, as the case may be, shall only be able to
recoup (from amounts realized by the Term Collateral Agent or any Term
Creditor(s)) in any enforcement proceeding with respect to the collateral (whether
initiated by the Term Collateral Agent or Term Creditor(s), or taken over by
them as contemplated above) any expenses incurred by them in accordance with
the priorities set forth in following Article IV.

 

ARTICLE IV

 

PAYMENTS

 

SECTION 4.1                          Application of
Proceeds.  (a)  ABL
Priority Collateral.  So long as the
Discharge of ABL Obligations has not occurred, any proceeds of any ABL Priority
Collateral pursuant to the enforcement of any Security Document or the exercise
of any remedial provision thereunder, together with all other proceeds received
by any Creditor as a result of any such enforcement or the exercise of any such
remedial provision or as a result of any distribution of or in respect of any
ABL Priority Collateral (whether or not expressly characterized as such) upon
or in any Insolvency or Liquidation Proceeding with respect to any Grantor, or
the application of any Collateral (or proceeds thereof) to the payment thereof
or any distribution of ABL Priority Collateral (or proceeds thereof) upon the
liquidation or dissolution of any Grantor, shall be applied by the ABL
Collateral Agent (or paid over to the ABL Collateral Agent and applied by it)
to the ABL Obligations in such order as specified in the relevant ABL Loan
Document.  Upon the Discharge of the ABL
Obligations and so long as Discharge of Term Obligations has not occurred, the
ABL Collateral Agent shall deliver to the Term Collateral Agent any proceeds of
ABL Priority Collateral held by it in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct.

 

21

 

(b)                                 Term Priority
Collateral.  So long as
the Discharge of Term Obligations has not occurred, any proceeds of any Term
Priority Collateral pursuant to the enforcement of any Security Document or the
exercise of any remedial provision thereunder, together with all other proceeds
received by any Creditor as a result of any such enforcement or the exercise of
any such remedial provision or as a result of any distribution of or in respect
of any Term Priority Collateral (whether or not expressly characterized as
such) upon or in any Insolvency or Liquidation Proceeding with respect to any
Grantor, or the application of any Term Priority Collateral (or proceeds
thereof) to the payment thereof or any distribution of Term Priority Collateral
(or proceeds thereof) upon the liquidation or dissolution of any Grantor, shall
be applied by the Term Collateral Agent (or paid over to the Term Collateral
Agent and applied by it) to the Term Obligations in such order as specified in
the relevant Term Loan Document.  Upon
the Discharge of the Term Obligations and so long as the Discharge of ABL
Obligations has not occurred, the Term Collateral Agent shall deliver to the
ABL Collateral Agent any proceeds of Term Priority Collateral held by it in the
same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct.

 

SECTION 4.2                          Payments Over.  (a)  ABL Priority Collateral.  Until such time as the Discharge of ABL
Obligations has occurred, any ABL Priority Collateral or proceeds thereof
(together with assets or proceeds subject to Liens referred to in the final
sentence of Section 2.3(a)) (or any distribution in respect of the
ABL Priority Collateral, whether or not expressly characterized as such)
received by any of the Term Collateral Agent or any Term Creditors in
connection with the exercise of any right or remedy (including set-off)
relating to the ABL Priority Collateral or otherwise shall be segregated and
held in trust and forthwith paid over to the ABL Collateral Agent for the
benefit of the ABL Creditors in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct.  The ABL Collateral Agent is hereby authorized
to make any such endorsements as agent for any of the Term Collateral Agent or
any such Term Creditors.  This
authorization is coupled with an interest and is irrevocable until such time as
this Agreement is terminated in accordance with its terms.

 

(b)                                 [RESERVED]

 

(c)                                  Term Priority
Collateral.  Until such time
as the Discharge of Term Obligations has occurred, any Term Priority Collateral
or proceeds thereof (together with assets or proceeds subject to Liens referred
to in the final sentence of Section 2.3(b)) (or any distribution in
respect of the Term Priority Collateral, whether or not expressly characterized
as such) received by the ABL Collateral Agent or any ABL Creditors in
connection with the exercise of any right or remedy (including set-off)
relating to the Term Priority Collateral or otherwise shall be segregated and
held in trust and forthwith paid over to the Term Collateral Agent for the
benefit of the Term Creditors in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct.  The Term Collateral Agent is hereby
authorized to make any such endorsements as agent for the ABL Collateral Agent
or any such ABL Creditors.  This
authorization is coupled with an interest and is irrevocable until such time as
this Agreement is terminated in accordance with its terms.

 

(d)                                 [RESERVED]

 

22

 

ARTICLE V

 

OTHER AGREEMENTS

 

SECTION 5.1                          Releases.

 

(a)                                  ABL Priority
Collateral.  If, in
connection with:

 

(i)                                     the exercise of
the ABL Collateral Agent’s remedies in respect of the ABL Priority Collateral
provided for in Section 3.1, including any sale, lease, exchange,
transfer or other disposition of any such ABL Priority Collateral; or

 

(ii)                                  any sale,
lease, exchange, transfer or other disposition of any ABL Priority Collateral
permitted under the terms of the ABL Loan Documents and Term Loan Documents (in
each case, as in effect on the date hereof and whether or not an “event of
default” under any of such documents has occurred and is continuing),

 

there occurs the release by
the ABL Collateral Agent, acting on its own or at the direction of the Required
ABL Creditors, of any of its Liens on any part of the ABL Priority Collateral,
or of any Grantor from its obligations under its guaranty of the ABL Obligations,
then the Liens, if any, of the Term Collateral Agent, for itself and for the
benefit of the Term Creditors and of any other Term Creditor, on such ABL
Priority Collateral, and the obligations of such Grantor under its guaranties
(if any) of the Term Obligations, shall be automatically, unconditionally and
simultaneously released, and the Term Collateral Agent, for itself and on
behalf of any such Term Creditors, promptly shall execute and deliver to the
ABL Collateral Agent or such Grantor such termination statements, releases and
other documents as the ABL Collateral Agent or such Grantor may request to
effectively confirm such release; provided, however that if an “event
of default” then exists under the Term Credit Agreement and the Discharge
of ABL Obligations occurs concurrently with the effectiveness of any such
release, the Term Collateral Agent shall be entitled to receive the residual
cash or cash equivalents (if any) remaining after giving effect to such release
and the Discharge of the ABL Obligations for application in accordance with the
provisions of Section 4 hereof.

 

(b)                                 [RESERVED]

 

(c)                                  [RESERVED]

 

(d)                                 Term Priority
Collateral.  If, in
connection with:

 

(i)                                     the exercise of
the Term Collateral Agent’s remedies in respect of the Term Priority Collateral
provided for in Section 3.1, including any sale, lease, exchange,
transfer or other disposition of any such Term Priority Collateral; or

 

(ii)                                  any sale,
lease, exchange, transfer or other disposition of any Term Priority Collateral
permitted under the terms of the Term Loan Documents and ABL Loan Documents (in
each case, as in effect on the Closing Date and whether or not an “event of
default” under any of such documents has occurred and is continuing);

 

23

 

there occurs the release by
the Term Collateral Agent, acting on its own or at the direction of the
Required Term Creditors, of any of its Liens on any part of the Term Priority
Collateral, or of any Grantor from its obligations under its guaranty of the
Term Obligations, then the Liens, if any, of the ABL Collateral Agent, for
itself and for the benefit of the ABL Creditors, and of any other ABL Creditor,
on such Collateral, and the obligations of such Grantor under its guaranties
(if any) of the ABL Obligations, shall be automatically, unconditionally and
simultaneously released, and the ABL Collateral Agent, for itself and on behalf
of any such ABL Creditors, promptly shall execute and deliver to the Term
Collateral Agent or such Grantor such termination statements, releases and
other documents as the Term Collateral Agent or such Grantor may request to
effectively confirm such release; provided, however that if an “event
of default” then exists under the ABL Credit Agreement and the Discharge of
Term Obligations occurs concurrently with the effectiveness of any such
release, the ABL Collateral Agent shall be entitled to receive the residual
cash or cash equivalents (if any) remaining after giving effect to such release
and the Discharge of the Term Obligations for application in accordance with
the provisions of Section 4 hereof.

 

(e)                                  [RESERVED]

 

(f)                                    [RESERVED]

 

SECTION 5.2                          Insurance - ABL
Priority Collateral.  (a) 
Unless and until the Discharge of ABL Obligations has occurred, the ABL
Collateral Agent (acting at the direction of the Required ABL Creditors) shall
have the sole and exclusive right, as between the ABL Collateral Agent and the
Term Collateral Agent, to adjust settlement under any insurance policy covering
the ABL Priority Collateral in the event of any loss thereunder to the extent
relating to the ABL Priority Collateral and to approve any award granted in any
condemnation or similar proceeding (or any deed in lieu of condemnation) to the
extent relating to the ABL Priority Collateral. 
Unless and until the Discharge of ABL Obligations has occurred, and
subject to the rights of the Grantors under the ABL Security Documents, all
proceeds of any such policy and any such award (or any payments with respect to
a deed in lieu of condemnation) in respect to the ABL Priority Collateral shall
be paid to the ABL Collateral Agent for the benefit of the ABL Creditors
pursuant to the terms of the ABL Loan Documents (including, without limitation,
for purposes of cash collateralization of ABL Obligations consisting of
commitments, letters of credit and ABL Hedge Agreements (to the extent required
thereby with notification by the relevant ABL Hedge Provider to the ABL
Collateral Agent)) and, after the Discharge of ABL Obligations has occurred, to
the Term Collateral Agent for the benefit of the Term Creditors to the extent
required under the Term Security Documents, and then, to the extent no Term
Obligations are outstanding, to the owner of the subject property, such other
Person as may be entitled thereto or as a court of competent jurisdiction may
otherwise direct.  If either the Term
Collateral Agent or any Term Creditors shall, at any time prior to the
Discharge of ABL Obligations, receive any proceeds of any such insurance policy
or any such award or payment in contravention of this Agreement, it shall pay
such proceeds over to the ABL Collateral Agent.

 

(b)                                 Term Priority
Collateral.  Unless and
until the Discharge of Term Obligations has occurred, the Term Collateral Agent
(acting at the direction of the Required Term Creditors) shall have the sole
and exclusive right, as between the Term Collateral Agent and the ABL
Collateral Agent, to adjust settlement under any insurance policy covering the

 

24

 

Term Priority Collateral in
the event of any loss thereunder to the extent relating to the ABL Priority
Collateral and to approve any award granted in any condemnation or similar
proceeding (or any deed in lieu of condemnation) to the extent relating to the
Term Priority Collateral.  Unless and
until the Discharge of Term Obligations has occurred, and subject to the rights
of the Grantors under the Term Security Documents, all proceeds of any such
policy and any such award (or any payments with respect to a deed in lieu of
condemnation) in respect to the Term Priority Collateral shall be paid to the
Term Collateral Agent for the benefit of the Term Creditors pursuant to the
terms of the Term Loan Documents (including, without limitation, for purposes
of cash collateralization of Term Obligations consisting of commitments and
letters of credit) and, after the Discharge of Term Obligations has occurred,
to the ABL Collateral Agent for the benefit of the ABL Creditors to the extent
required under the ABL Security Documents and then, to the extent no ABL
Obligations are outstanding, to the owner of the subject property, such other
Person as may be entitled thereto or as a court of competent jurisdiction may
otherwise direct.  If either the ABL
Collateral Agent or any ABL Creditors shall, at any time prior to the Discharge
of Term Obligations, receive any proceeds of any such insurance policy or any
such award or payment in contravention of this Agreement, it shall pay such
proceeds over to the Term Collateral Agent.

 

SECTION 5.3                          Amendments to
Credit Documents.

 

(a)                                  Amendments to
ABL Loan Documents.  Without the
prior written consent the Required Term Lenders), no ABL Loan Document may be
amended, supplemented or otherwise modified to the extent such amendment, supplement
or modification would (i) increase the then outstanding aggregate
principal amount of the loans, letters of credit and reimbursement obligations
under the ABL Credit Agreement plus, if any, any undrawn portion of any
commitment under the ABL Credit Agreement in excess of the Maximum ABL
Principal Amount, (ii) contravene the provisions of this Agreement, (iii) increase
the “Applicable Margin” or similar component of the interest or the
yield on the loans thereunder by more than 1.5% per annum (exclusive, for the
avoidance of doubt, of any (A) increases resulting from application of the
pricing grid set forth in the ABL Credit Agreement as of the date hereof or (B) increases
of up to 2.0% resulting from the accrual of interest at the default rate), (iv) provide
for scheduled dates for payment of principal, interest, premium (if any) or
fees which are earlier than such dates under the ABL Credit Agreement, or (v) convert
the ABL Credit Agreement to, or refinance the ABL Credit Agreement with, a term
loan credit facility or a revolving credit facility the availability of which
is not subject to a borrowing base comprised of accounts receivable and
inventory.

 

(b)                                 Amendments to
Term Loan Documents.  Without the
prior written consent of the Required ABL Lenders), no Term Loan Document may
be amended, supplemented or otherwise modified to the extent such amendment,
supplement or modification would (i) contravene the provisions of this
Agreement, (ii) increase the then outstanding aggregate principal amount
of the loans under the Term Credit Agreement in excess of the Maximum Term
Principal Amount, (iii) increase the “Applicable Margin” or similar
component of the interest yield of the loans thereunder by more than 3.0% per
annum from the “Applicable Margin” or similar component under the Term
Credit Agreement as in effect as of the date hereof (exclusive, for the
avoidance of doubt, of (A) increases resulting from application of the
pricing grid set forth in the Term Credit Agreement as of the date hereof or (B) increases
of up to 2.0% resulting

 

25

 

from the accrual of interest
at the default rate) or (iv) provide for scheduled dates for payment of
principal, interest, premiums (if any) or fees which are earlier than such
dates under the Term Credit Agreement.

 

SECTION 5.4                          Amendments to
Security Documents.  (a)  Amendments
to Security Documents.

 

(i)                                     Without the
prior written consent of the ABL Collateral Agent (acting at the direction of
the Required ABL Creditors), no Term Security Document may be amended,
supplemented or otherwise modified or entered into to the extent such
amendment, supplement or modification, or the terms of any new Term Security
Document, would contravene the provisions of this Agreement or any ABL Loan
Document.

 

(ii)                                  Without the
prior written consent of the Term Collateral Agent (acting at the direction of
the Required Term Creditors), no ABL Security Document may be amended,
supplemented or otherwise modified or entered into to the extent such
amendment, supplement or modification, or the terms of any new ABL Security
Document, would contravene the provisions of this Agreement.

 

(iii)                               [RESERVED]

 

(iv)                              Each Grantor
and each ABL Creditor agrees that each ABL Security Document shall include the
following language (or language of similar impact):

 

“Notwithstanding
anything herein to the contrary, the lien and security interest granted to the
ABL Collateral Agent pursuant to this Agreement and the exercise of any right
or remedy by the ABL Collateral Agent hereunder are subject to the provisions
of the Intercreditor Agreement, dated as of May 21, 2007 (as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the- terms thereof, the “Intercreditor Agreement”), by and among
Douglas Dynamics Company, L.L.C., Douglas Dynamics Holdings, Inc., Douglas
Dynamics Finance Company and Fischer, LLC, the grantors from time to time party
thereto, JPMorgan Chase Bank, N.A., as ABL Collateral Agent, and Credit Suisse,
Cayman Island Branch, as Term Collateral Agent, and certain other persons party
or that may become party thereto from time to time.  In the event of any conflict between the
terms of the Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern and control.”

 

In addition, the Borrower
agrees that each ABL Mortgage covering any Term Priority Collateral shall
contain such other language as the Term Collateral Agent may reasonably request
to reflect the subordination of such ABL Mortgage to the Term Security Document
covering such Collateral.

 

(v)                                 Each Grantor
and each Term Creditor agrees that each Term Security Document shall include
the following language (or language of similar impact):

 

26

 

“Notwithstanding
anything herein to the contrary, the lien and security interest granted to the
Term Collateral Agent pursuant to this Agreement and the exercise of any right
or remedy by the Term Collateral Agent hereunder are subject to the provisions
of the Intercreditor Agreement, dated as of May 21, 2007 (as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the- terms thereof, the “Intercreditor Agreement”), by and among
Douglas Dynamics Company, L.L.C., Douglas Dynamics Holdings, Inc., Douglas
Dynamics Finance Company and Fischer, LLC, the grantors from time to time party
thereto, JPMorgan Chase Bank, N.A., as ABL Collateral Agent, and Credit Suisse,
Cayman Island Branch, as Term Collateral Agent, and certain other persons party
or that may become party thereto from time to time.  In the event of any conflict between the
terms of the Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern and control.”

 

(b)                                 Amendment to
ABL Priority Collateral Security Documents.  With respect to the ABL Priority Collateral,
in the event that, at any time prior to the Discharge of ABL Obligations, the
ABL Collateral Agent or the ABL Creditors and the relevant Grantor(s) enter
into any amendment, waiver or consent in respect of any of the ABL Security
Documents for the purpose of adding to, or deleting from, or waiving or
consenting to any departures from any provisions of, any ABL Security Document
or changing in any manner the rights of the ABL Collateral Agent, the ABL
Creditors, the Borrower or any other Grantor thereunder, then such amendment,
waiver or consent shall apply automatically to any comparable provision of the
Comparable Term Security Document without the consent of the Term Collateral
Agent or the Term Creditors and without any action by the Term Collateral
Agent, the Borrower or any other Grantor, provided, that (A) no such
amendment, waiver or consent shall have the effect of (i) removing assets
subject to the Lien of the Term Security Documents, except to the extent that a
release of such Lien is permitted by Section 5.1 of this Agreement,
(ii) imposing additional duties on the Term Collateral Agent without its
consent, or (iii) permitting other liens on the ABL Priority Collateral
not permitted under the terms of the Term Loan Documents or Article VI
hereof and (B) notice of such amendment, waiver or consent shall have been
given to the Term Collateral Agent (although the failure to give any such
notice shall in no way affect the effectiveness of any such amendment, waiver
or consent or impair or affect the Term Collateral Agent’s or any Term Creditor’s
obligations to the ABL Collateral Agent and the ABL Lien Creditors).

 

(c)                                  Amendment to
Term Priority Collateral Security Documents.  With respect to the Term Priority Collateral,
in the event that, at any time prior to the Discharge of Term Obligations, the
Term Collateral Agent or the Term Creditors and the relevant Grantor(s) enter
into any amendment, waiver or consent in respect of any of the Term Security
Documents for the purpose of adding to, or deleting from, or waiving or
consenting to any departures from any provisions of, any Term Security Document
or changing in any manner the rights of the Term Collateral Agent, the Term
Creditors, the Borrower or any other Grantor thereunder, then such amendment,
waiver or consent shall apply automatically to any comparable provision of the
Comparable ABL Security Document without the consent of the ABL Collateral
Agent or the ABL Creditors and without any action by the ABL Collateral Agent,
the Borrower or any other Grantor, provided, that (A) no
such amendment, waiver or consent shall have the effect of (i) removing
assets subject to the ABL Security Documents, except to the extent that a
release of

 

27

 

such Lien is permitted by Section 5.1
of this Agreement, (ii) imposing additional duties on the ABL Collateral
Agent without its consent, or (iii) permitting other liens on the Term
Priority Collateral not permitted under the terms of the ABL Loan Documents, or
Article VI hereof and (B) notice of such amendment, waiver or
consent shall have been given to the ABL Collateral Agent (although the failure
to give any such notice shall in no way affect the effectiveness of any such
amendment, waiver or consent or impair or affect the ABL Collateral Agent’s or
any ABL Creditor’s obligations to the Term Collateral Agent and the Term
Creditors).

 

SECTION 5.5                          Rights As
Unsecured Creditors.  Except as
otherwise set forth in this Agreement, the ABL Collateral Agent, the ABL
Creditors, the Term Collateral Agent and the Term Creditors may exercise rights
and remedies as unsecured creditors against Holdings, Borrower or any Grantor
that has guaranteed (x) the ABL Obligations in accordance with the terms
of the ABL Loan Documents and applicable law and/or (y) the Term
Obligations in accordance with the terms of the Term Loan Documents and
applicable law.  Except as otherwise set
forth in this Agreement nothing in this Agreement shall prohibit the receipt by
(x) the ABL Collateral Agent or any ABL Creditors of the required payments
of interest and principal on the ABL Obligations or (y) the Term
Collateral Agent or any Term Creditors of the required payments of interest and
principal on the Term Obligations so long as such receipt is not the direct or
indirect result of the exercise by the ABL Collateral Agent or any ABL Lien
Creditor or the Term Collateral Agent or any Term Creditor of rights or remedies
as a secured creditor (including set-off) or enforcement of any Lien held by
any of them.  In the event the Term
Collateral Agent or any Term Creditor becomes a judgment lien creditor in
respect of ABL Priority Collateral as a result of its enforcement of its rights
as an unsecured creditor, such judgment lien shall be subordinated to the Liens
securing ABL Obligations on the same basis as the other Liens securing the Term
Obligations are so subordinated to the ABL Obligations under this Agreement.  Nothing in this Agreement impairs or
otherwise adversely affects any rights or remedies the ABL Collateral Agent or
the ABL Creditors may have with respect to the ABL Priority Collateral.  In the event the ABL Collateral Agent or any
ABL Creditor becomes a judgment lien creditor in respect of Term Priority
Collateral as a result of its enforcement of its rights as an unsecured
creditor, such judgment lien shall be subordinated to the Liens securing Term
Obligations on the same basis as the other Liens securing the ABL Obligations,
as the case may be, are so subordinated to the Term Obligations under this
Agreement.  Nothing in this Agreement
impairs or otherwise adversely affects any rights or remedies the Term Collateral
Agent or the Term Creditors may have with respect to the Term Priority
Collateral.

 

SECTION 5.6                          Bailee for
Perfection.  (a)  ABL
Priority Collateral—Perfection of Security Interest.  The ABL Collateral Agent agrees to acquire
and acknowledges it holds any ABL Priority Collateral actually in its
possession or control (or in the possession or control of its agents or
bailees) on behalf of itself and the Term Collateral Agent and any assignee
solely for the purpose of perfecting the security interest granted under the
ABL Loan Documents and the Term Loan Documents, subject to the terms and
conditions of this Section 5.6.

 

(b)                                 ABL Priority
Collateral — Exclusive Treatment.  Until the Discharge of ABL Obligations has
occurred, the ABL Collateral Agent shall be entitled to deal with the ABL
Priority Collateral in accordance with the terms of the ABL Loan Documents as
if the Liens of the Term Collateral Agent under the Term Security Documents did
not exist.  The rights of the Term
Collateral Agent shall at all times be subject to the terms of this Agreement
and, with

 

28

 

respect to the ABL Priority
Collateral, to the ABL Collateral Agent’s rights under the ABL Loan Documents.

 

(c)                                  ABL Priority
Collateral — Obligations of Collateral Agents.  (i)  The ABL Collateral Agent shall have
no obligation whatsoever to the ABL Creditors, the Term Collateral Agent or any
Term Creditor to assure that the ABL Priority Collateral is genuine or owned by
any of the Grantors or to preserve any rights or benefits of any Person except
as expressly set forth in this Section 5.6.  The duties or responsibilities of the ABL
Collateral Agent under this Section 5.6 shall be limited solely to
holding any ABL Priority Collateral actually in its possession or control as
bailee in accordance with this Section 5.6.

 

(ii)                                  After the
Discharge of ABL Obligations has occurred, the Term Collateral Agent shall have
no obligations whatsoever to the Term Creditors to assure that the ABL Priority
Collateral is genuine or owned by any of the Grantors or to preserve any rights
or benefits of any Person except as expressly set forth in this Section 5.6.  The duties or responsibilities of the Term
Collateral Agent under this Section 5.6 shall be limited solely to
holding any ABL Priority Collateral actually in its possession or control as
bailee in accordance with this Section 5.6.

 

(d)                                 ABL Priority
Collateral — Delivery of Remaining ABL Priority Collateral.  Upon the Discharge of ABL Obligations, the
ABL Collateral Agent shall deliver the remaining ABL Priority Collateral (if
any) (or proceeds thereof) in its possession, together with any necessary
endorsements, (i) to the Term Collateral Agent, unless the Discharge of
Term Obligations has occurred and (ii) if preceding clause (i) does
not apply, to the relevant Grantor (in each case, so as to allow such Person to
obtain control of such ABL Priority Collateral).  The ABL Collateral Agent further agrees to
take all other action reasonably requested by such Person in connection with
such Person’s obtaining a first-priority interest in the ABL Priority
Collateral or as a court of competent jurisdiction may otherwise direct.

 

(e)                                  Term Priority
Collateral — Perfection of Security Interest.  The Term Collateral Agent agrees to acquire
and acknowledges it holds any Term Priority Collateral actually in its
possession or control (or in the possession or control of its agents or
bailees) on behalf of itself and any assignee and the ABL Collateral Agent and
any assignee solely for the purpose of perfecting the security interest granted
under the Term Loan Documents and the ABL Loan Documents, subject to the terms
and conditions of this Section 5.6.

 

(f)                                    Term Priority
Collateral — Exclusive Treatment.  Until the Discharge of Term Obligations has
occurred, the Term Collateral Agent shall be entitled to deal with the Term
Priority Collateral in accordance with the terms of the Term Loan Documents as
if the Liens of the ABL Collateral Agent under the ABL Security Documents did
not exist.  The rights of the ABL
Collateral Agent shall at all times be subject to the terms of this Agreement
and, with respect to the Term Priority Collateral, to the Term Collateral Agent’s
rights under the Term Loan Documents.

 

(g)                                 Term Priority
Collateral—Obligations of Collateral Agents.  (i)  The Term Collateral Agent shall
have no obligation whatsoever to the Term Creditors, the ABL Collateral Agent
or any ABL Creditor to assure that the Term Priority Collateral is genuine or
owned by

 

29

 

any of the Grantors or to
preserve any rights or benefits of any Person except as expressly set forth in
this Section 5.6.  The duties
or responsibilities of the Term Collateral Agent under this Section 5.6
shall be limited solely to holding any Pledged Collateral and Term Priority
Collateral actually in its possession or control as bailee in accordance with
this Section 5.6.

 

(ii)                                  After the
Discharge of Term Obligations, the ABL Collateral Agent shall have no
obligations whatsoever to the ABL Creditors to assure that the Term Priority
Collateral is genuine or owned by any of the Grantors or to preserve any rights
or benefits of any Person except as expressly set forth in this Section 5.6.  The duties or responsibilities of the ABL
Collateral Agent under this Section 5.6 shall be limited solely to
holding any Term Priority Collateral actually in its possession or control as
bailee in accordance with this Section 5.6.

 

(h)                                 Term Priority
Collateral — Delivery of Remaining Collateral.  Upon the Discharge of Term Obligations, the
Term Collateral Agent shall deliver the remaining Term Priority Collateral (if
any) (or proceeds thereof) in its possession, together with any necessary
endorsements, (i) to the ABL Collateral Agent, unless the Discharge of ABL
Obligations has occurred and (ii) if preceding clause (i) does
not apply, to the relevant Grantor (in each case, so as to allow such Person to
obtain control of such Term Priority Collateral).  The Term Collateral Agent further agrees to
take all other action reasonably requested by such Person in connection with
such Person’s obtaining a first-priority interest in the Term Priority
Collateral or as a court of competent jurisdiction may otherwise direct.

 

(i)                                     No Fiduciary
Relationships.  No
Collateral Agent acting pursuant to this Section 5.6 shall have by
reason of the ABL Security Documents, the Term Security Documents, this
Agreement or any other document a fiduciary relationship in respect of any
other Collateral Agent, any ABL Creditor or any Term Creditor.

 

SECTION 5.7                          When Discharge
of Obligations Deemed to Not Have Occurred.  (a)  ABL Priority Collateral.  If the Borrower enters into any Refinancing
of any ABL Loan Document evidencing an ABL Obligation, then any Discharge of
ABL Obligations effected thereby shall automatically be deemed not to have
occurred for all purposes of this Agreement, and the obligations under such
Refinancing ABL Loan Document shall automatically be treated as ABL Obligations
for all purposes of this Agreement, including for purposes of the Lien
priorities and rights in respect of the ABL Priority Collateral and the Term
Priority Collateral set forth herein, and the collateral agent under such ABL
Loan Documents shall be the ABL Collateral Agent for all purposes of this
Agreement.  Upon receipt of a notice
stating that the Borrower has entered into a new ABL Loan Document (which
notice shall include the identity of the new agent, such agent, the “New ABL
Agent”), the Term Collateral Agent shall promptly enter into such documents
and agreements (including amendments or supplements to this Agreement) as the
Borrower or such New ABL Agent may reasonably request in order to provide to
the New ABL Agent the rights contemplated hereby, in each case consistent in
all material respects with the terms of this Agreement.  In addition, a Discharge of ABL Obligations
shall be deemed not to have occurred in the circumstances described in Section 6.5.

 

(b)                                 Term Priority
Collateral.  If the
Borrower enters into any Refinancing of any Term Loan Document evidencing a
Term Obligation, then any Discharge of Term

 

30

 

Obligations shall
automatically be deemed not to have occurred for all purposes of this
Agreement, and the obligations under such Refinancing Term Loan Document shall
automatically be treated as Term Obligations for all purposes of this
Agreement, including for purposes of the Lien priorities and rights in respect
of the ABL Priority Collateral and the Term Priority Collateral set forth
herein, and the collateral agent under such Term Loan Documents shall be the
Term Collateral Agent for all purposes of this Agreement.  Upon receipt of a notice stating that the
Borrower has entered into a new Term Loan Document in accordance with the
foregoing requirements (which notice shall include the identity of the new
agent, such agent, the “New Term Agent”), the ABL Collateral Agent shall
promptly enter into such documents and agreements (including amendments or
supplements to this Agreement) as the Borrower or such New Term Agent may
reasonably request in order to provide to the New Term Agent the rights
contemplated hereby, in each case consistent in all material respects with the
terms of this Agreement.  In addition, a
Discharge of Term Obligations shall be deemed not to have occurred in the
circumstances described in Section 6.5.

 

SECTION 5.8                          Option to
Purchase.  (a)  Option
to Purchase of Term Creditors.  If
all of the ABL Obligations shall have been accelerated or following the
non-payment of the ABL Obligations after the Revolving Termination Date (as
such term is defined in the ABL Credit Agreement), the Term Creditors shall
have the option at any time upon at least five (5) Business Days’ prior
written notice by the Term Administrative Agent to the ABL Administrative Agent
(with copies to the Borrower) to purchase all, and not less than all, of the
ABL Obligations from the ABL Administrative Agent and the ABL Creditors.  Such notice from the Term Administrative
Agent to the ABL Administrative Agent shall be irrevocable.

 

(b)                                 Option to
Purchase of Term Creditors — Sale Without Consent.  On the date specified by the Term
Administrative Agent in the notice described in Section 5.8(a) (which
shall not be less than five (5) Business Days, nor more than ten (10) Business
Days, after the receipt by the ABL Administrative Agent of the notice from the
Term Administrative Agent of the election by the Term Creditors to exercise
such option), the ABL Administrative Agent and the ABL Creditors shall sell to
the Term Creditors exercising such option, and such Term Creditors shall
purchase from the ABL Administrative Agent and the ABL Creditors, the ABL
Obligations without the prior written consent of the Borrower or any other
Grantor.

 

(c)                                  Option to
Purchase of Term Creditors — Procedure.  Upon the date of such purchase and sale, the
Term Creditors that have exercised such option shall, pursuant to documentation
in form and substance reasonably satisfactory to the ABL Administrative Agent, (i) pay
to the ABL Creditors as the purchase price therefor the full amount of all the
ABL Obligations then outstanding and unpaid (including principal, reimbursement
obligations in respect of, if any, letters of credit, the credit exposure of
the ABL Creditors under ABL Hedge Agreements, interest, fees and expenses,
including reasonable attorneys’ fees and legal expenses) at par, (ii) cash
collateralize any letters of credit outstanding under the ABL Credit Agreement
in an amount reasonably satisfactory to the ABL Agent but in no event greater than
103% of the aggregate undrawn face amount thereof, and (iii) agree to
reimburse the ABL Administrative Agent and the ABL Creditors for any loss,
cost, damage or expense (including reasonable attorneys’ fees and legal
expenses) in connection with any commissions, fees, costs or expenses related
to any issued and outstanding letters of credit as described above and any
checks or other payments provisionally credited to the ABL Obligations, and/or
as to which the ABL

 

31

 

Administrative Agent or any
ABL Creditor has not yet received final payment.  Such purchase price and cash collateral shall
be remitted by wire transfer in federal funds to such bank account of the ABL
Administrative Agent for the ratable account of the ABL Administrative Agent
and the ABL Creditors in New York, New York, as the ABL Administrative Agent
may designate in writing to the Term Administrative Agent for such
purpose.  Interest shall be calculated to
but excluding the Business Day on which such purchase and sale shall occur if
the amounts so paid by the Term Creditors that have exercised such option to
the bank account designated by the ABL Administrative Agent are received in
such bank account prior to 1:00 p.m., New York City time and interest shall
be calculated to and including such Business Day if the amounts so paid by such
Term Creditors to the bank account designated by the ABL Administrative Agent
are received in such bank account later than 1:00 p.m., New York City time
on such Business Day.

 

(d)                                 Option to
Purchase of Term Creditors — Without Recourse.  Such purchase shall be expressly made without
recourse, representation or warranty of any kind by the ABL Administrative
Agent or any ABL Creditors as to the ABL Obligations owed to such Person or
otherwise, except that each such Person shall represent and warrant:  (i) the amount of the ABL Obligations
being sold by it, (ii) that such Person has not created any Lien on any
ABL Obligation being sold by it and (iii) that such Person has the right
to assign ABL Obligations being assigned by it and its assignment is duly
authorized.

 

(e)                                  Option to
Purchase of Term Creditors — Foreclosure.  The ABL Administrative Agent agrees that
prior to foreclosing upon all or a material portion of the ABL Priority
Collateral, it will provide the Term Administrative Agent with at least five (5) days’
notice of its intent to commence such foreclosure.  If the Term Administrative Agent shall give
the ABL Administrative Agent written notice of any Term Creditor’s intention to
exercise the purchase option provided under this Section 5.8 prior
to the foreclosure by the ABL Administrative Agent on any ABL Priority
Collateral, the ABL Administrative Agent shall not continue such foreclosure
action or initiate any other action to sell or otherwise realize upon any of
the ABL Priority Collateral so long as the purchase and sale with respect to
the ABL Obligations provided for herein shall have closed within ten (10) Business
Days thereafter and the ABL Administrative Agent and the ABL Creditors shall
have received payment in full of the ABL Obligations as provided for herein
within such ten (10) Business Day period.

 

SECTION 5.9                          Entry Upon
Premises by the ABL Collateral Agent and the ABL Creditors.  (a)  ABL Priority Collateral —
Cooperation in Enforcement Action. If the ABL Collateral Agent takes any
enforcement action with respect to the ABL Priority Collateral, the Term
Secured Parties (i) shall cooperate with the ABL Collateral Agent (at the
sole cost and expense of the ABL Collateral Agent and subject to the condition
that the Term Secured Parties shall have no obligation or duty to take any
action or refrain from taking any action that could reasonably be expected to
result in the incurrence of any liability or damage to the Term Secured
Parties) in its efforts to enforce its security interest in the ABL Priority
Collateral and to finish any work-in-process and assemble the ABL Priority
Collateral, (ii) shall not take any action designed or intended to hinder
or restrict in any respect the ABL Collateral Agent from enforcing its security
interest in the ABL Priority Collateral or from finishing any work-in-process
or assembling the ABL Priority Collateral, and (iii) shall permit the ABL
Collateral Agent, its employees, agents, advisers and representatives, at the
sole cost and expense of the ABL Secured Parties and upon reasonable advance
notice, to enter upon and use the Term Priority Collateral

 

32

 

(including (x) equipment,
processors, computers and other machinery related to the storage or processing
of records, documents or files and (y) intellectual property), for a
period not to exceed 180 days after the taking of such enforcement action, for
purposes of (A) assembling and storing the ABL Priority Collateral and
completing the processing of and turning into finished goods of any ABL
Priority Collateral consisting of work-in-process, (B) selling any or all
of the ABL Priority Collateral located on such Term Priority Collateral,
whether in bulk, in lots or to customers in the ordinary course of business or
otherwise, (C) removing any or all of the ABL Priority Collateral located
on such Term Priority Collateral, or (D) taking reasonable actions to
protect, secure, and otherwise enforce the rights of the ABL Secured Parties in
and to the ABL Priority Collateral, and the Term Secured Parties hereby
irrevocably grant to the ABL Collateral Agent a non-exclusive license or other
right to use, for such time and without charge, such intellectual property,
equipment, processors, computers and other machinery as it pertains to the ABL
Priority Collateral in finishing, assembling, advertising for sale and/or
selling any ABL Priority Collateral; provided, however, that
nothing contained in this Agreement shall restrict the rights of the ABL
Collateral Agent from selling, assigning or otherwise transferring any ABL
Priority Collateral prior to the expiration of such 180-day period if the
purchaser, assignee or transferee thereof agrees to be bound by the provisions
of this Section 5.9.  If any
stay or other order prohibiting the exercise of remedies with respect to the
ABL Priority Collateral has been entered by a court of competent jurisdiction,
such 180-day period shall be tolled during the pendency of any such stay or
other order.  If the ABL Collateral Agent
conducts a public auction or private sale of the ABL Priority Collateral at any
of the real property included within the ABL Priority Collateral, the ABL
Collateral Agent shall provide the Term Collateral Agent with reasonable notice
and use reasonable efforts to hold such auction or sale in a manner which would
not unduly disrupt the Term Collateral Agent’s use of such real property.

 

(b)                                 ABL Priority
Collateral—Responsibilities of ABL Secured Parties with respect to Enforcement
Action.  During the period of actual
occupation, use or control by the ABL Secured Parties or their agents or
representatives of any Term Priority Collateral, the ABL Secured Parties shall (i) be
responsible for the ordinary course third party expenses related thereto,
including costs with respect to heat, light, electricity, water and real
property taxes with respect to that portion of any premises so used or
occupied, and (ii) be obligated to repair at their expense any physical
damage to such Term Priority Collateral or other assets or property resulting
from such occupancy, use or control, and to leave such Term Priority Collateral
or other assets or property in substantially the same condition as it was at
the commencement of such occupancy, use or control, ordinary wear and tear
excepted.  The ABL Secured Parties
jointly and severally agree to pay, indemnify and hold the Term Collateral
Agent and their respective officers, directors, employees and agents harmless
from and against any liability, cost, expense, loss or damages, including legal
fees and expenses, resulting from the gross negligence or willful misconduct of
the ABL Collateral Agent or any of its agents, representatives or invitees in
its or their operation of such facilities. 
Notwithstanding the foregoing, in no event shall the ABL Secured Parties
have any liability to the Term Secured Parties pursuant to this Section 5.9
as a result of any condition (including any environmental condition, claim or
liability) on or with respect to the Term Priority Collateral existing prior to
the date of the exercise by the ABL Secured Parties of their rights under this Section 5.9
and the ABL Secured Parties shall have no duty or liability to maintain the
Term Priority Collateral in a condition or manner better than that in which it
was maintained prior to the use thereof by the ABL Secured Parties, or for any
diminution in the value of the Term Priority Collateral that results solely
from ordinary wear

 

33

 

and tear resulting from the
use of the Term Priority Collateral by the ABL Secured Parties in the manner
and for the time periods specified under this Section 5.9.  Without limiting the rights granted in this
paragraph, the ABL Secured Parties shall cooperate with the Term Secured
Parties in connection with any efforts made by the Term Secured Parties to sell
the Term Priority Collateral.

 

SECTION 5.10                    Rights under
Permits and Licenses.  The Term
Collateral Agent agrees that if the ABL Collateral Agent shall require rights
available under any permit or license controlled by the Term Collateral Agent
in order to realize on any ABL Priority Collateral, the Term Collateral Agent
shall take all such actions as shall be available to it (at the sole expense of
the Grantors), consistent with applicable law and reasonably requested by the
ABL Collateral Agent to make such rights available to the ABL Collateral Agent,
subject to the Liens on the Term Priority Collateral created under the Term
Security Documents to secure the Term Obligations.  The ABL Collateral Agent agrees that if the
Term Collateral Agent shall require rights available under any permit or
license controlled by the ABL Collateral Agent in order to realize on any Term
Priority Collateral, the ABL Collateral Agent shall take all such actions as
shall be available to it (at the sole expense of the Grantors), consistent with
applicable law and reasonably requested by the Term Collateral Agent to make such
rights available to the Term Collateral Agent, subject to the Liens on the ABL
Priority Collateral created under the ABL Security Documents to secure the ABL
Obligations.

 

ARTICLE VI

 

INSOLVENCY OR LIQUIDATION PROCEEDINGS

 

SECTION 6.1                          Finance and
Sale Issues.  (a)  ABL
Creditor Post-Petition Financing.  (i) 
If the Borrower or any other Grantor shall be subject to any Insolvency or
Liquidation Proceeding and the ABL Collateral Agent (acting at the direction of
the Required ABL Creditors) shall desire to permit the Borrower or any other
Grantor to obtain financing (including on a priming basis), from the ABL
Creditors under Section 362, 363 or 364 of the Bankruptcy Code or
debtor-in-possession financing under any other Bankruptcy Law (each, an “ABL
Creditor Post-Petition Financing”), and provided that (A) the
aggregate amount of ABL Obligations outstanding as of the commencement of the
Insolvency or Liquidation Proceeding is at least $25,000,000 and (B) the
Exposure Amount does not exceed the Maximum Exposure Amount at any time during
the pendency of the Insolvency or Liquidation Proceeding, then, the Term
Collateral Agent, on behalf of itself and the Term Creditors, and each other
Term Creditor (by its acceptance of the benefits of the Term Loan Documents), each
agree that it will not oppose or raise any objection to or contest (or join
with or support any third party opposing, objecting to or contesting), on any
basis applicable solely to a secured creditor in such Insolvency or Liquidation
Proceeding, such use or provision of ABL Creditor Post-Petition Financing and
will not request adequate protection or any other relief in to which a secured
creditor may otherwise be entitled in connection therewith (except as expressly
agreed in writing by the ABL Collateral Agent or to the extent permitted by Section 6.3)
and, to the extent the Liens securing the ABL Obligations are subordinated to
or pari passu with such ABL Creditor Post-Petition Financing, its Liens on the
ABL Priority Collateral shall be deemed to be subordinated, without any further
action on the part of any Person, to the Liens securing such

 

34

 

ABL Creditor Post-Petition
Financing (and all Obligations relating thereto), and the Liens securing the
Term Obligations shall have the same priority with respect to the ABL Priority
Collateral relative to the Liens securing the ABL Obligations as if such ABL
Creditor Post-Petition Financing had not occurred and the Liens on the Term
Priority Collateral shall be deemed to be subordinated, without any further
action on the part of any Person, to the Liens securing such ABL Creditor
Post-Petition Financing (and all Obligations relating thereto).  Furthermore, and notwithstanding anything to
the contrary contained above in this Section 6.1(a), the Term
Collateral Agent and the Term Creditors may object for any reason and on any
basis (whether assertable by, or applicable to, a secured or general unsecured
creditor, and including without limitation, any objection based on the lack of
adequate protection) to any ABL Creditor Post-Petition Financing which (A) causes
the Exposure Amount to exceed the Maximum Exposure Amount, or (B) is made
or permitted to be made at any time that the Exposure Amount exceeds the
Maximum Exposure Amount.  Notwithstanding
anything herein to the contrary, and without limiting the provisions of the
immediately preceding sentence, this Section 6.1(a)(i) does
not prevent the Term Creditors from (i) objecting to any ABL Post-Petition
Financing that purports to govern or control the provisions or content of a
plan of reorganization (other than providing for satisfaction in full in cash
of the ABL Creditor Post-Petition Financing on or prior to the effective date
of such plan of reorganization) or (ii) proposing any other post-petition
financing to the Borrower or the Bankruptcy Court.

 

(ii)                                  The Term
Collateral Agent, on behalf of itself and the other Term Creditors, and each
other Term Creditor (by its acceptance of the benefits of the Term Loan Documents),
each agree that solely in its capacity as a secured creditor and not as an
unsecured creditor, it will consent to and raise no objection to, oppose or
contest (or join with or support any third party opposing, objecting to or
contesting), a sale or other disposition of any ABL Priority Collateral in the
context of an Insolvency or Liquidation Proceeding free and clear of its Liens
or other claims under Section 363 of the Bankruptcy Code or any other
court approved sale pursuant to any other Insolvency and Liquidation Proceeding
if the ABL Creditors have consented to such sale or disposition of such assets;
provided, that (i) the net cash proceeds from the sale or
disposition are applied first to the ABL Obligations and (ii) any such
sale or disposition must be approved by the bankruptcy court (or other court)
with jurisdiction over the sale (the “Bankruptcy Court”) by an order
that: (a) contains a specific finding that the sale or disposition being
approved is commercially reasonable; and (b) provides that any
consideration received in connection with such sale or disposition that exceeds
the amount of the ABL Obligations shall be used to satisfy the Term Obligations
or shall remain encumbered by the Term Obligations with the same priority and
subject to the same limitations set forth herein with respect to their Liens on
the ABL Priority Collateral.

 

(b)                                 Term Creditor
Post-Petition Financing.  (i) 
If the Borrower or any other Grantor shall be subject to any Insolvency or
Liquidation Proceeding and the Term Collateral Agent (acting at the direction
of the Required Term Creditors) shall desire to permit the Borrower or any
other Grantor to obtain financing (including on a priming basis), from the Term
Creditors under Section 362, 363 or 364 of the Bankruptcy Code or
debtor-in-possession financing under any other Bankruptcy Law (each, a “Term
Creditor Post-Petition Financing”), and provided that (A) the
aggregate amount of ABL Obligations outstanding as of the

 

35

 

commencement of the
Insolvency or Liquidation Proceeding is less than $25,000,000 and (B) the
Exposure Amount does not exceed the Maximum Exposure Amount at any time during
the pendency of the Insolvency or Liquidation Proceeding, then the ABL Collateral
Agent, on behalf of itself and the ABL Creditors, and each other ABL Creditor
(by its acceptance of the benefits of the ABL Loan Documents), each agree that
it will not oppose or raise any objection to or contest (or join with or
support any third party opposing, objecting to or contesting), on any basis
applicable solely to a secured creditor in such Insolvency or Liquidation
Proceeding, such use or provision of Term Creditor Post-Petition Financing and,
to the extent the Liens securing the Term Obligations are subordinated to or
pari passu with such Term Creditor Post-Petition Financing, its Liens on the
Term Priority Collateral shall be deemed to be subordinated, without any
further action on the part of any Person, to the Liens securing such Term Creditor
Post-Petition Financing (and all Obligations relating thereto).  Furthermore, and notwithstanding anything to
the contrary contained above in this Section 6.1(b), the ABL
Collateral Agent and the ABL Creditors may object for any reason and on any basis
(whether assertable by, or applicable to, a secured or general unsecured
creditor, and including, without limitation, any objection based on the lack of
adequate protection) to any Term Creditor Post-Petition Financing which (A) causes
the Exposure Amount to exceed the Maximum Exposure Amount or (B) is made
or permitted to be made at any time that the Exposure Amount exceeds the
Maximum Exposure Amount.  
Notwithstanding anything herein to the contrary, and without limiting
the provisions of the immediately preceding sentence, this Section 6.1(b)(i) does
not prevent the ABL Creditors from (i) objecting to any Term Post-Petition
Financing that purports to govern or control the provisions or content of a
plan of reorganization (other than providing for satisfaction in full in cash
of the Term Creditor Post-Petition Financing on or prior to the effective date
of such plan of reorganization) or (ii) proposing any other post-petition
financing to the Borrower or the Bankruptcy Court.

 

(ii)                                  The ABL
Collateral Agent, on behalf of itself and the other ABL Creditors, and each
other ABL Creditor (by its acceptance of the benefits of the ABL Loan
Documents), each agree that solely in its capacity as a secured creditor and
not as an unsecured creditor, it will consent to and raise no objection to,
oppose or contest (or join with or support any third party opposing, objecting
to or contesting), a sale or other disposition of any Term Priority Collateral
in the context of an Insolvency or Liquidation Proceeding free and clear of its
Liens or other claims under Section 363 of the Bankruptcy Code or any
court approved sale pursuant to any other Insolvency or Liquidation Proceeding
if the Term Creditors have consented to such sale or disposition of such
assets; provided that (i) the net cash proceeds from the sale or
disposition are applied first to the Term Obligations and (ii) any such
sale or disposition must be approved by the Bankruptcy Court with jurisdiction
over the sale by an order that: (a) contains a specific finding that the
sale or disposition being approved is commercially reasonable; and (b) provides
that any consideration received in connection with such sale or disposition
that exceeds the amount of the Term Obligations shall be used to satisfy the
ABL Obligations, or shall remain encumbered by the ABL Obligations, with the
same priority and subject to the same limitations set forth herein with respect
to their Liens on the Collateral.

 

36

 

SECTION 6.2                          Relief from the
Automatic Stay.

 

(a)                                  ABL Priority
Collateral.  Until the
Discharge of ABL Obligations has occurred, the Term Collateral Agent, on behalf
of itself and the Term Creditors, and each other Term Creditor (by its
acceptance of the benefits of the Term Loan Documents) agree that none of them
shall seek relief, pursuant to Section 362(d) of the Bankruptcy Code
or otherwise, from the automatic stay of Section 362(a) of the
Bankruptcy Code or from any other stay in any Insolvency or Liquidation
Proceeding in respect of the ABL Priority Collateral, without the prior written
consent of the ABL Collateral Agent.

 

(b)                                 Term Priority
Collateral.  Until the
Discharge of Term Obligations has occurred, the ABL Collateral Agent, on behalf
of itself and the ABL Creditors, and each other ABL Creditor (by its acceptance
of the benefits of the ABL Loan Documents), agree that none of them shall seek
relief, pursuant to Section 362(d) of the Bankruptcy Code or
otherwise, from the automatic stay of Section 362(a) of the Bankruptcy
Code or from any other stay in any Insolvency or Liquidation Proceeding in
respect of the Term Priority Collateral, without the prior written consent of
the Term Collateral Agent.

 

SECTION 6.3                          Adequate
Protection.  (a)  ABL
Priority Collateral.  (i)  The
Term Collateral Agent, on behalf of itself and the Term Creditors, and each
other Term Creditor (by its acceptance of the benefits of the Term Loan
Documents) each agree that, until the Discharge of ABL Obligations has occurred
or the termination of the Liens on the ABL Priority Collateral of the ABL
Collateral Agent, on behalf of the ABL Creditors, has occurred, with respect to
the ABL Priority Collateral, none of them shall oppose, object to or contest
(or join with or support any third party opposing, objecting to or contesting) (a) any
request by the ABL Collateral Agent or the ABL Creditors for adequate
protection in any Insolvency or Liquidation Proceeding (or any granting of such
request) or (b) any objection by the ABL Collateral Agent or the ABL Creditors
to any motion, relief, action or proceeding based on the ABL Collateral Agent
or the ABL Creditors claiming a lack of adequate protection.

 

(ii)                                  [RESERVED]

 

(iii)                               Except as set
forth in this Article VI, the Term Collateral Agent and the Term
Creditors shall not be limited from seeking adequate protection with respect to
their rights in the ABL Priority Collateral in an Insolvency or Liquidation
Proceeding (including adequate protection in the form of cash payments of
interest or otherwise).

 

(b)                                 Term Priority
Collateral.  (i) 
The ABL Collateral Agent, on behalf of itself and the ABL Creditors, and each
other ABL Creditor (by its acceptance of the benefits of the ABL Loan
Documents), each agree that, until the Discharge of Term Obligations has occurred
or the termination of the Liens on the Term Priority Collateral of the Term
Collateral Agent, on behalf of the Term Creditors, has occurred, with respect
to the Term Priority Collateral, none of them shall oppose, object to or
contest (or join with or support any third party opposing, objecting to or
contesting) (a) any request by the Term Collateral Agent or the Term
Creditors for adequate protection in any Insolvency or Liquidation Proceeding
(or any granting of such request) or (b) any objection by the Term
Collateral Agent or the Term Creditors to any motion, relief, action or
proceeding based on the Term Collateral Agent or the Term Creditors claiming a
lack of adequate protection.

 

37

 

(ii)                                  [RESERVED]

 

(iii)                               Except as set
forth in this Article VI, the ABL Collateral Agent and the ABL
Creditors shall not be limited from seeking adequate protection with respect to
their rights in the Term Priority Collateral in an Insolvency or Liquidation
Proceeding (including adequate protection in the form of cash payments of
interest or otherwise).

 

SECTION 6.4                          No Waiver;
Voting Rights.  (a)  ABL
Priority Collateral.  (i) 
Nothing contained herein shall prohibit or in any way limit the ABL Collateral
Agent or any ABL Creditor from objecting on any basis in any Insolvency or
Liquidation Proceeding or otherwise to any action taken with respect to the ABL
Priority Collateral by the Term Collateral Agent or any Term Creditor,
including the seeking by the Term Collateral Agent or any Term Creditor of
adequate protection or the assertion by the Term Collateral Agent or any Term
Creditor of any of its rights and remedies under the Term Loan Documents or
otherwise.  In any Insolvency or Liquidation
Proceeding, neither the Term Collateral Agent nor any other Term Creditor shall
propose or support any plan of reorganization, plan or arrangement or
disclosure statement, or join with or support any third party in doing so, to
the extent the terms of such plan or disclosure statement are inconsistent with
the terms of this Agreement as to the treatment of ABL Priority Collateral.

 

(b)                                 Term Priority
Collateral.  (i) 
Nothing contained herein shall prohibit or in any way limit the Term Collateral
Agent or any Term Creditor from objecting on any basis in any Insolvency or
Liquidation Proceeding or otherwise to any action taken with respect to the
Term Priority Collateral by the ABL Collateral Agent or any ABL Creditor,
including the seeking by the ABL Collateral Agent or any ABL Creditor of
adequate protection or the assertion by the ABL Collateral Agent or any ABL
Creditor of any of its rights and remedies under the ABL Loan Documents or
otherwise.  In any Insolvency or
Liquidation Proceeding, neither the ABL Collateral Agent nor any other ABL
Creditor shall propose or support any plan of reorganization, plan of
arrangement or disclosure statement, or join with or support any third party in
doing so, to the extent the terms of such plan or disclosure statement are
inconsistent with the terms of this Agreement as to the treatment of Term
Priority Collateral.

 

SECTION 6.5                          Preference
Issues.  (a)  Reinstatement of
ABL Obligations.  If any ABL Creditor
is required in any Insolvency or Liquidation Proceeding or otherwise to turn
over or otherwise pay to the estate of the Borrower or any other Grantor any
amount (an “ABL Recovery”), then the ABL Obligations shall be reinstated
to the extent of such ABL Recovery and the ABL Creditors shall be entitled to a
reinstatement of ABL Obligations with respect to all such recovered
amounts.  In such event, any Discharge of
ABL Obligations for all purposes of this Agreement shall be deemed to have not
occurred (unless and until same subsequently occurs with respect to the ABL
Obligations after giving effect to the provisions to this Section 6.5(a)).  If this Agreement shall have been terminated
prior to such ABL Recovery, this Agreement shall be reinstated in full force
and effect (and any prior Discharge of ABL Obligations shall be deemed not to
have occurred), and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto
from such date of reinstatement.  Any
amounts received by the Term Collateral Agent or any Term Creditor on account
of the Term Obligations from proceeds of ABL Priority Collateral, after the
termination of this

 

38

 

Agreement (or any prior
Discharge of ABL Obligations) shall, in the event of a reinstatement pursuant
to this Section 6.5(a), be held in trust for and paid over to the
ABL Collateral Agent for the benefit of the ABL Creditors, for application to
the reinstated ABL Obligations.

 

(b)                                 Reinstatement
of Term Obligations.  If any Term
Creditor is required in any Insolvency or Liquidation Proceeding or otherwise
to turn over or otherwise pay to the estate of the Borrower or any other
Grantor any amount (a “Term Recovery”), then the Term Obligations shall
be reinstated to the extent of such Term Recovery and the Term Creditors shall
be entitled to a reinstatement of Term Obligations with respect to all such
recovered amounts.  In such event, any
Discharge of Term Obligations for all purposes of this Agreement shall be
deemed to have not occurred (unless and until same subsequently occurs with
respect to the Term Obligations after giving effect to the provisions to this Section 6.5(b)).  If this Agreement shall have been terminated
prior to such Term Recovery, this Agreement shall be reinstated in full force
and effect (and any prior Discharge of Term Obligations shall be deemed not to
have occurred), and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto
from such date of reinstatement.  Any
amounts received by the ABL Collateral Agent or any ABL Creditor on account of
the ABL Obligations from proceeds of Term Priority Collateral, after the
termination of this Agreement (or any prior Discharge of Term Obligations)
shall, in the event of a reinstatement pursuant to this Section 6.5(b),
be held in trust for and paid over to the Term Collateral Agent for the benefit
of the Term Creditors, for application to the reinstated Term Obligations.

 

(c)                                  This Section 6.5
shall survive termination of this Agreement.

 

SECTION 6.6                          Post-Petition
Interest.  (a)  Claims
by ABL Creditors.  Neither the Term
Collateral Agent nor any Term Creditor shall oppose or seek to challenge any
claim by the ABL Collateral Agent or any ABL Creditor for allowance in any
Insolvency or Liquidation Proceeding of ABL Obligations consisting of
post-petition or post-filing interest, fees or expenses to the extent of the
value of the ABL Creditors’ Lien on (i) the ABL Priority Collateral
(without regard to the existence of the Term Creditors’ Lien thereon) and (ii) the
Term Priority Collateral (after taking into account the Term Creditors’ Lien
thereon).

 

(b)                                 Claims by Term
Creditors.  Neither the
ABL Collateral Agent nor the ABL Creditors shall oppose or seek to challenge
any claim by the Term Collateral Agent or any Term Creditor for allowance in
any Insolvency or Liquidation Proceeding of Term Obligations consisting of
post-petition or post-filing interest, fees or expenses to the extent of the
value of the Term Creditors’ Lien on (i) the Term Priority Collateral
(without regard to the existence of the ABL Creditors’ Lien thereon) and (ii) the
ABL Priority Collateral (after taking into account the ABL Creditors’ Lien
thereon).

 

(c)                                  [RESERVED]

 

(d)                                 Separate
Classes.  Without limiting the
foregoing, it is the intention of the parties hereto that (and to the maximum
extent permitted by law the parties hereto agree that) (x) the Term
Obligations (and the security therefor) constitute a separate and distinct
class (and separate and distinct claims) from the ABL Obligations (and the
security therefor), (y) the ABL

 

39

 

Obligations (and the
security therefor) constitute a separate and distinct class (and separate and
distinct claims) from the Term Obligations (and the security therefor).

 

SECTION 6.7                          Voting for Plan
of Reorganization.  Each of the
ABL Creditors, and the Term Creditors shall be entitled to vote as separate
classes with respect to any plan of reorganization or arrangement in connection
with any Insolvency or Liquidation Proceeding; provided, however,
that the ABL Administrative Agent, on behalf of itself and the ABL Creditors
and the Term Administrative Agent on behalf of itself and the Term Creditors
agree that neither the ABL Administrative Agent nor the Term Administrative
Agent nor any ABL Creditor nor Term Creditor shall take any action or vote in
any way which supports any plan of reorganization or arrangement that is
inconsistent with the terms of this Agreement.

 

ARTICLE VII

 

RELIANCE; WAIVERS; ETC.

 

SECTION 7.1                          Reliance.  Other than any reliance on the terms of this
Agreement, the ABL Collateral Agent, on behalf of itself and the ABL Creditors
under its ABL Loan Documents, acknowledges that it and such ABL Creditors have,
independently and without reliance on the Term Collateral Agent or any Term
Creditor, and based on documents and information deemed by them appropriate,
made their own credit analysis and decision to enter into such ABL Loan
Documents and be bound by the terms of this Agreement and they will continue to
make their own credit decision in taking or not taking any action under the ABL
Credit Agreement or this Agreement.  The
Term Collateral Agent, on behalf of itself and the Term Creditors, acknowledges
that it and the Term Creditors have, independently and without reliance on the
ABL Collateral Agent or any ABL Creditor, and based on documents and
information deemed by them appropriate, made their own credit analysis and
decision to enter into each of the Term Loan Documents and be bound by the
terms of this Agreement and they will continue to make their own credit
decision in taking or not taking any action under the Term Loan Documents or
this Agreement.

 

SECTION 7.2                          No Warranties
or Liability.  ABL
Collateral Agent, on behalf of itself and the ABL Creditors under the ABL Loan
Documents, acknowledge and agree that each of the Term Collateral Agent and the
Term Creditors have made no express or implied representation or warranty,
including with respect to the execution, validity, legality, completeness,
collectibility or enforceability of any of the Term Loan Documents, the
ownership of any Collateral or the perfection or priority of any Liens
thereon.  The Term Creditors will be
entitled to manage and supervise their respective loans and extensions of
credit under the Term Loan Documents in accordance with law and as they may
otherwise, in their sole discretion, deem appropriate. Term Collateral Agent,
on behalf of itself and the Term Creditors under the Term Loan Documents, acknowledge
and agree that each of the ABL Collateral Agent and the ABL Creditors have made
no express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectibility or enforceability
of any of the ABL Documents, the ownership of any Collateral or the perfection
or priority of any Liens thereon.  The
ABL Creditors will be entitled to manage and supervise their respective loans
and extensions of credit under their respective ABL Documents in accordance
with law and as they

 

40

 

may otherwise, in their sole
discretion, deem appropriate. The Term Collateral Agent and the Term Creditors
shall have no duty to the ABL Collateral Agent or any of the ABL Creditors, to
act or refrain from acting in a manner which allows, or results in, the
occurrence or continuance of an event of default or default under any
agreements with the Borrower or any Grantor (including the ABL Loan Documents
and the Term Loan Documents), regardless of any knowledge thereof which they
may have or be charged with.  The ABL
Collateral Agent and the ABL Creditors shall have no duty to the Term
Collateral Agent or any of the Term Creditors, to act or refrain from acting in
a manner which allows, or results in, the occurrence or continuance of an event
of default or default under any agreements with the Borrower or any Grantor
(including the ABL Loan Documents and the Term Loan Documents), regardless of
any knowledge thereof which they may have or be charged with.

 

SECTION 7.3                          No Waiver of
Lien Priorities.  (a)  Failure
to Act.  (i)  No right of the
ABL Creditors, the ABL Collateral Agent or any of them to enforce any provision
of this Agreement or any ABL Loan Document shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Borrower
or any other Grantor or by any act or failure to act by any ABL Creditor or the
ABL Collateral Agent, or by any noncompliance by any Person with the terms,
provisions and covenants of this Agreement, any of the ABL Loan Documents or
any of the Term Loan Documents, regardless of any knowledge thereof which the
ABL Collateral Agent or the ABL Creditors, or any of them, may have or be
otherwise charged with.

 

(ii)                                  No right of the
Term Creditors, the Term Collateral Agent or any of them to enforce any
provision of this Agreement or any Term Loan Document (subject to the
provisions of this Agreement) shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Borrower or any other
Grantor or by any act or failure to act by any Term Creditor or the Term
Collateral Agent, or by any noncompliance by any Person with the terms,
provisions and covenants of this Agreement, any of the Term Loan Documents or
any ABL Loan Document, regardless of any knowledge thereof which the Term
Collateral Agent or the Term Creditors, or any of them, may have or be
otherwise charged with.

 

(b)                                 Acts by ABL
Creditors.  Without in
any way limiting the generality of Section 7.3(a) (but subject
to the rights of the Borrower and the other Grantors under the ABL Loan
Documents), the ABL Creditors, the ABL Collateral Agent and any of them may, at
any time and from time to time in accordance with the ABL Loan Documents, this
Agreement (including Section 5.3) and/or applicable law, without
the consent of, or notice to, the Term Collateral Agent or any Term Creditor
without incurring any liabilities to the Term Collateral Agent or any other
Term Creditor and without impairing or releasing the Lien priorities and other
benefits provided in this Agreement (even if any right of subrogation or other
right or remedy of the Term Collateral Agent or any Term Creditor is affected,
impaired or extinguished thereby) do any one or more of the following, but
subject to the limitations set forth in this Agreement:

 

(i)                                     make loans and
advances to any Grantor or issue, guaranty or obtain letters of credit for
account of any Grantor or otherwise extend credit to any Grantor, in any amount
and on any terms, whether pursuant to a commitment or as a

 

41

 

discretionary advance and
whether or not any default or event of default or failure of condition is then
continuing;

 

(ii)                                  change the
manner, place or terms of payment or change or extend the time of payment of,
or amend, renew, exchange, increase or alter, the terms of any of the ABL
Obligations or any Lien on any ABL Priority Collateral or guaranty thereof or
any liability of the Borrower or any other Grantor, or any liability incurred
directly or indirectly in respect thereof (including any increase in or
extension of the ABL Obligations, subject to Section 5.3) or
otherwise amend, renew, exchange, extend, modify or supplement in any manner
any Liens with respect to the ABL Priority Collateral held by the ABL
Collateral Agent or any of the ABL Creditors, the ABL Obligations or any of the
ABL Loan Documents;

 

(iii)                               sell, exchange,
release, surrender, realize upon, enforce or otherwise deal with in any manner
and in any order any part of the ABL Priority Collateral or any liability of
the Borrower or any other Grantor to the ABL Creditors or the ABL Collateral
Agent, or any liability incurred directly or indirectly in respect thereof;

 

(iv)                              settle or
compromise any ABL Obligation or any other liability of the Borrower or any
other Grantor or any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever paid and however
realized to any liability (including the ABL Obligations) in any manner or
order;

 

(v)                                 exercise or
delay in or refrain from exercising any right or remedy against the Borrower or
any other Grantor or any other Person or with respect to any security, elect
any remedy and otherwise deal freely with the Borrower, any other Grantor or
any ABL Priority Collateral and any security and any guarantor or any liability
of the Borrower or any other Grantor to the ABL Creditors or any liability
incurred directly or indirectly in respect thereof; and

 

(vi)                              release or
discharge any ABL Obligation or any guaranty thereof or any agreement or
obligation of any Grantor or any other Person with respect thereto.

 

(c)                                  Waivers by the
Term Collateral Agent.  The
Term Collateral Agent, on behalf of itself and the Term Creditors, and each
other Term Creditor (by its acceptance of the benefits of the Term Loan
Documents), agrees not to assert and hereby waives, to the fullest extent
permitted by law, any right to demand, request, plead or otherwise assert or
otherwise claim the benefit of, any marshalling, appraisal, valuation or other
similar right that may otherwise be available under applicable law with respect
to the ABL Priority Collateral or any other similar rights a junior secured
creditor may have under applicable law.

 

(d)                                 Acts by Term
Creditors.  Without in
any way limiting the generality of Section 7.3(a) (but subject
to the rights of the Borrower and the other Grantors under the Term Loan
Documents), the Term Creditors, the Term Collateral Agent and any of them may,
at any time and from time to time in accordance with the Term Loan Documents,
this Agreement

 

42

 

(including Section 5.3)
and/or applicable law, without the consent of, or notice to, the ABL Collateral
Agent or any ABL Creditor without incurring any liabilities to the ABL
Collateral Agent or any ABL Creditor and without impairing or releasing the
Lien priorities and other benefits provided in this Agreement (even if any
right of subrogation or other right or remedy of the ABL Collateral Agent or
any ABL Creditor with respect to the Term Priority Collateral is affected,
impaired or extinguished thereby), do any one or more of the following, but
subject to the limitations set forth in this Agreement:

 

(i)                                     make loans and
advances to any Grantor or issue, guaranty or obtain letters of credit for
account of any Grantor or otherwise extend credit to any Grantor, in any amount
and on any terms, whether pursuant to a commitment or as a discretionary
advance and whether or not any default or event of default or failure of
condition is then continuing;

 

(ii)                                  change the
manner, place or terms of payment or change or extend the time of payment of,
or amend, renew, exchange, increase or alter, the terms of any of the Term
Obligations or any Lien on any Term Priority Collateral or guaranty thereof or
any liability of the Borrower or any other Grantor, or any liability incurred
directly or indirectly in respect thereof (including any increase in or extension
of the Term Obligations, subject to Section 5.3) or, subject to the
terms hereof (including Section 5.3), otherwise amend, renew, exchange,
extend, modify or supplement in any manner any Liens held by the Term
Collateral Agent or any of the Term Creditors, the Term Obligations or any of
the Term Loan Documents;

 

(iii)                               sell, exchange,
release, surrender, realize upon, enforce or otherwise deal with in any manner
and in any order any part of the Term Priority Collateral or any liability of
the Borrower or any other Grantor to the Term Creditors or the Term Collateral
Agent, or any liability incurred directly or indirectly in respect thereof;

 

(iv)                              settle or
compromise any Term Obligation or any other liability of the Borrower or any
other Grantor or any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever paid and however
realized to any liability (including the Term Obligations) in any manner or
order;

 

(v)                                 except or
otherwise restricted by the Agreement, including Section 5.3 and 5.4, and
by applicable law, exercise or delay in or refrain from exercising any right or
remedy against the Borrower or any other Grantor or any other Person or with
respect to any security, elect any remedy and otherwise deal freely with the
Borrower, any other Grantor or any Term Priority Collateral and any security
and any guarantor or any liability of the Borrower or any other Grantor to the
Term Creditors or any liability incurred directly or indirectly in respect
thereof; and

 

(vi)                              release or
discharge any Term Obligation or any guaranty thereof or any agreement or
obligation of any Grantor or any other Person with respect thereto.

 

43

 

(e)                                  Waivers by the
ABL Collateral Agent.  The ABL
Collateral Agent, on behalf of itself and the ABL Creditors, and each other ABL
Creditor (by its acceptance of the benefits of the ABL Loan Documents), agrees
not to assert and hereby waives, to the fullest extent permitted by law, any
right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that
may otherwise be available under applicable law with respect to the Term
Priority Collateral or any other similar rights a junior secured creditor may
have under applicable law.

 

SECTION 7.4                          Waiver of
Liability; Indemnity.  (a)  ABL
Priority Collateral.  With respect to
the ABL Priority Collateral, the Term Collateral Agent, on behalf of itself and
the Term Creditors, and each other Term Creditor (by its acceptance of the
benefits of the Term Loan Documents) each agree that the ABL Creditors and the
ABL Collateral Agent shall have no liability to any of the Term Collateral Agent
or any Term Creditors; and the Term Collateral Agent, on behalf of itself and
the Term Creditors; and each other Term Creditor (by its acceptance of the
benefits of the Term Loan Documents), each hereby waive any claim against any
ABL Creditor (or the ABL Collateral Agent), arising out of any and all actions
which the ABL Creditors or the ABL Collateral Agent may take or permit or omit
to take with respect to: (i) the ABL Loan Documents (including, without
limitation, any failure to perfect or obtain perfected security interests in
the ABL Priority Collateral), (ii) the collection of the ABL Obligations
or (iii) the foreclosure upon, or sale, liquidation or other disposition
of, any ABL Priority Collateral.  The
Term Collateral Agent, on behalf of itself and the Term Creditors and each
other Term Creditor (by its acceptance of the benefits of the Term Loan
Documents), each agree that the ABL Creditors and the ABL Collateral Agent have
no duty, express or implied, fiduciary or otherwise, to any of them in respect
of the maintenance or preservation of the ABL Priority Collateral, the ABL
Obligations or otherwise.  Neither the
ABL Collateral Agent nor any other ABL Creditor nor any of their respective
directors, officers, employees or agents will be liable for failure to demand,
collect or realize upon any of the ABL Priority Collateral or for any delay in
doing so, or will be under any obligation to sell or otherwise dispose of any
ABL Priority Collateral upon the request of any other Grantor or upon the request
of the Term Collateral Agent, any other holder of Term Obligations or any other
Person or to take any other action whatsoever with regard to the ABL Priority
Collateral or any part thereof.  Without
limiting the foregoing, the Term Collateral Agent, on behalf of itself and the
Term Creditors, and each Term Creditor (by its acceptance of the benefits of
the Term Loan Documents), each agree that neither the ABL Collateral Agent nor
any other ABL Creditor (in directing the Collateral Agent to take any action
with respect to the ABL Priority Collateral) shall have any duty or obligation
to realize first upon any type of ABL Priority Collateral or to sell, dispose
of or otherwise liquidate all or any portion of the ABL Priority Collateral in
any manner, including as a result of the application of the principles of
marshaling or otherwise, that would maximize the return to any class of
Creditors holding Obligations of any type (whether ABL Obligations or Term
Obligations), notwithstanding that the order and timing of any such
realization, sale, disposition or liquidation may affect the amount of proceeds
actually received by such class of Creditors from such realization, sale,
disposition or liquidation.

 

(b)                                 Term Priority
Collateral.  With
respect to the Term Priority Collateral, the ABL Collateral Agent, on behalf of
itself and the ABL Creditors, and each other ABL Creditor (by its acceptance of
the benefits of the ABL Loan Documents), each agree that the Term Creditors and
the Term Collateral Agent shall have no liability to the ABL Collateral Agent
or 

 

44

 

any ABL Creditors; and each
other ABL Creditor (by its acceptance of the benefits of the ABL Loan
Documents) each hereby waive any claim against any Term Creditor (or the Term
Collateral Agent), arising out of any and all actions which the Term Creditors
or the Term Collateral Agent may take or permit or omit to take with respect
to: (i) the Term Loan Documents (including, without limitation, any
failure to perfect or obtain perfected security interests in the Term
Collateral), (ii) the collection of the Term Obligations or (iii) the
foreclosure upon, or sale, liquidation or other disposition of, any Term
Priority Collateral.  The ABL Collateral
Agent, on behalf of itself and the ABL Creditors, and each other ABL Creditor
(by its acceptance of the benefits of the ABL Loan Documents), each agree that
the Term Creditors and the Term Collateral Agent have no duty, express or
implied, fiduciary or otherwise, to any of them in respect of the maintenance
or preservation of the Term Priority Collateral, the Term Obligations or
otherwise.  Neither the Term Collateral
Agent nor any other Term Creditor nor any of their respective directors,
officers, employees or agents will be liable for failure to demand, collect or
realize upon any of the Term Priority Collateral or for any delay in doing so,
or will be under any obligation to sell or otherwise dispose of any Term
Priority Collateral upon the request of any other Grantor or upon the request
of the ABL Collateral Agent, any other holder of ABL Obligations or any other
Person or to take any other action whatsoever with regard to the Term Priority
Collateral or any part thereof.  Without
limiting the foregoing, the ABL Collateral Agent, on behalf of itself and the
ABL Creditors, and each ABL Creditor (by its acceptance of the benefits of the
ABL Loan Documents), each agree that neither the Term Collateral Agent nor any
other Term Creditor (in directing the Collateral Agent to take any action with
respect to the Term Priority Collateral) shall have any duty or obligation to
realize first upon any type of Term Priority Collateral or to sell, dispose of
or otherwise liquidate all or any portion of the Term Priority Collateral in
any manner, including as a result of the application of the principles of
marshaling or otherwise, that would maximize the return to any class of
Creditors holding Obligations of any type (whether Term Obligations or ABL
Obligations), notwithstanding that the order and timing of any such
realization, sale, disposition or liquidation may affect the amount of proceeds
actually received by such class of Creditors from such realization, sale,
disposition or liquidation.

 

(c)                                  Collateral
Agent.  With respect to its share of
the Obligations, any Collateral Agent which is independently a Creditor shall
have and may exercise the same rights and powers hereunder as, and shall be
subject to the same obligations and liabilities as and to the extent set forth
herein for, any other Creditor, all as if such Collateral Agent were not a
Collateral Agent.  The term “Creditors”
or any similar term shall, unless the context clearly otherwise indicates,
include any Collateral Agent in its individual capacity as a Creditor.  Each Collateral Agent and its affiliates may
lend money to, and generally engage in any kind of business with, the Grantors
or any of their Affiliates as if such Collateral Agent were not acting as a
Collateral Agent and without any duty to account therefor to any other
Creditor.

 

SECTION 7.5                          Obligations
Unconditional. All rights, interests, agreements and obligations
of the ABL Collateral Agent and the ABL Creditors and the Term Collateral Agent
and the Term Creditors, respectively, hereunder (including the Lien priorities
established hereby) shall remain in full force and effect irrespective of:

 

(a)                                  any lack of
validity or enforceability of any ABL Loan Document or any Term Loan Document;

 

45

 

(b)                                 any change in the
time, manner or place of payment of, or in any other terms of, all or any of
the ABL Obligations or Term Obligations, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by course
of conduct or otherwise, of the terms of any ABL Loan Document or any Term Loan
Document;

 

(c)                                  any exchange of
any security interest in any Collateral or any other collateral, or any
amendment, waiver or other modification, whether in writing or by course of
conduct or otherwise, of all or any of the ABL Obligations or Term Obligations
or any guarantee thereof;

 

(d)                                 the
commencement of any Insolvency or Liquidation Proceeding in respect of the
Borrower or any other Grantor, or

 

(e)                                  any other
circumstances which otherwise might constitute a defense available to, or a
discharge of, the Borrower or any other Grantor in respect of any of the ABL
Obligations, or of the Term Collateral Agent or any Term Creditor in respect of
this Agreement.

 

ARTICLE
VIII

 

MISCELLANEOUS

 

SECTION 8.1                          Conflicts.  In the event of any conflict between the
provisions of this Agreement and the provisions of the ABL Loan Documents or
the Term Loan Documents, as between the parties other than the Grantors the
provisions of this Agreement shall govern and control.

 

SECTION 8.2                          Effectiveness;
Continuing Nature of this Agreement; Severability.  This Agreement shall become effective when
executed and delivered by the parties hereto. 
This is a continuing agreement of lien subordination and (i) the
ABL Creditors may, at any time and without notice to the Term Collateral Agent
or any Term Creditor and (ii) the Term Creditors may, at any time and
without notice to the ABL Collateral Agent or any ABL Creditor, in each case,
continue to extend credit and other financial accommodations and lend monies to
or for the benefit of the Borrower or any Grantor constituting ABL Obligations
(in the case of the ABL Creditors) or Term Obligations (in the case of the Term
Creditors) in reliance hereof.  The ABL
Collateral Agent, on behalf of itself and the ABL Creditors, and each other ABL
Creditor (by its acceptance of the benefits of the ABL Documents) and the Term
Collateral Agent, on behalf of itself and the Term Creditors, and each other
Term Creditor (by its acceptance of the benefits of the Term Loan Document),
hereby waives any right it may have under applicable law to revoke this
Agreement or any of the provisions of this Agreement.  The terms of this Agreement shall survive,
and shall continue in full force and effect, in any Insolvency or Liquidation
Proceeding.  Without limiting the
generality of the foregoing, this Agreement is intended to constitute and shall
be deemed to constitute a “subordination agreement” within the meaning
of Section 510(a) of the Bankruptcy Code and is intended to be and
shall be interpreted to be enforceable to the maximum extent permitted pursuant
to applicable nonbankruptcy law.  Any
provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall not invalidate the remaining provisions hereof, and any such prohibition
or unenforceability in 

 

46

 

any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.  All references to the Borrower
or any other Grantor shall include the Borrower or such Grantor as debtor and
debtor-in-possession and any receiver or trustee for the Borrower or any other
Grantor (as the case may be) in any Insolvency or Liquidation Proceeding.  This Agreement shall terminate and be of no
further force and effect, (i) with respect to the ABL Collateral Agent,
the ABL Creditors and the ABL Obligations, upon the Discharge of ABL
Obligations (in a manner which is not in contravention of the terms of this
Agreement), subject to the rights of the ABL Creditors and the Term Creditors
under Section 6.5, and (ii) with respect to the Term Collateral
Agent, the Term Creditors and the Term Obligations, the date of the Discharge
of Term Obligations, subject to the rights of the Term Creditors and the ABL
Creditors under Section 6.5.

 

SECTION 8.3                          Amendments;
Waivers.  No amendment, modification or
waiver of any of the provisions of this Agreement by the ABL Collateral Agent
or the Term Collateral Agent shall be made unless the same shall be in writing
signed on behalf of each party hereto; provided that

 

(a)                                  the ABL
Collateral Agent (at the direction of the Required ABL Creditors) may, without
the written consent of any other Creditor, agree to modifications of this
Agreement for the purpose of securing additional extensions of credit
(including pursuant to the ABL Credit Agreement or any Refinancing or extension
thereof) and adding new creditors as “ABL Creditors” and “Creditors”
hereunder, so long as such extensions (and resulting additions) do not
otherwise give rise to a violation of the express terms of the ABL Credit
Agreement and, without the prior written consent of the Term Collateral Agent, Section 5.3(a),

 

(b)                                 the Term
Collateral Agent (at the direction of the Required Term Creditors) may, without
the written consent of any other Creditor, agree to modifications of this
Agreement for the purpose of securing additional extensions of credit
(including pursuant to the Term Credit Agreement or any Refinancing or
extension thereof) and adding new creditors as “Term Creditors” and “Creditors”
hereunder, so long as such extensions (and resulting additions) do not
otherwise give rise to a violation of the express terms of the Term Credit
Agreement and, without the prior written consent of the ABL Collateral Agent, Section 5.3(b),

 

(c)                                  additional
Grantors may be added as parties hereto in accordance with the provisions of Section 8.18
of this Agreement.

 

Each waiver of the terms of
this Agreement, if any, shall be a waiver only with respect to the specific
instance involved and shall not impair the rights of the parties making such
waiver or the obligations of the other parties to such party in any other
respect or at any other time.  Notwithstanding
the foregoing, no Grantor shall have any right to consent to or approve any
amendment, modification or waiver of any provision of this Agreement except to
the extent its rights, interests, liabilities or privileges are directly
affected or the provisions of any of the Documents are modified by the effect
of any such amendment, modification or waiver. 
One of the Collateral Agents shall provide the Borrower with written
notice of each amendment, modification and waiver, with a true and correct copy
thereof.

 

47

 

SECTION 8.4                          Information
Concerning Financial Condition of the Grantors and their Subsidiaries.  The ABL Collateral Agent and the ABL
Creditors and the Term Collateral Agent and the Term Creditors, shall each be
responsible for keeping themselves informed of (a) the financial condition
of each Grantor and their respective Subsidiaries and all endorsers and/or
guarantors of the ABL Obligations or the Term Obligations and (b) all
other circumstances bearing upon the risk of nonpayment of the ABL Obligations
or the Term Obligations.  Except as
otherwise set forth herein, none of the Collateral Agents nor any Creditor
shall have any duty to advise any of the other Collateral Agents, or any other
Creditor, of information known to it or them regarding such condition or any
such circumstances or otherwise.  With
respect to the ABL Priority Collateral, in the event the ABL Collateral Agent
or any of the ABL Creditors, in its or their sole discretion, undertakes at any
time or from time to time to provide any such information to the Term
Collateral Agent or any Term Creditor, it or they shall be under no obligation (w) to
make, and the ABL Collateral Agent and the ABL Creditors shall not make, any
express or implied representation or warranty, including with respect to the
accuracy, completeness, truthfulness or validity of any such information so
provided, (x) to provide any additional information or to provide any such
information on any subsequent occasion, (y) to undertake any investigation
or (z) to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, such party wishes to maintain
confidential or is otherwise required to maintain confidential.  With respect to the Term Priority Collateral,
in the event the Term Collateral Agent or any of the Term Creditors, in its or
their sole discretion, undertakes at any time or from time to time to provide
any such information to the ABL Collateral Agent or any ABL Creditor, it or
they shall be under no obligation (w) to make, and the Term Collateral
Agent and the Term Creditors shall not make, any express or implied
representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of any such information so provided, (x) to
provide any additional information or to provide any such information on any
subsequent occasion, (y) to undertake any investigation or (z) to
disclose any information which, pursuant to accepted or reasonable commercial
finance practices, such party wishes to maintain confidential or is otherwise
required to maintain confidential.

 

SECTION 8.5                          Subrogation.  Subject to the Discharge of ABL Obligations,
with respect to the value of any payments or distributions in cash, property or
other assets that any of the Term Creditors or the Term Collateral Agent pay
over to the ABL Collateral Agent or ABL Creditors under the terms of this
Agreement, the respective paying Creditors shall be subrogated to the rights of
the payee Creditors; provided that, the Term Collateral Agent, on behalf
of itself and the Term Creditors, and each other Term Creditor (by its
acceptance of the benefits of the Term Loan Documents), hereby agree not to
assert or enforce all such rights of subrogation it may acquire as a result of
any payment hereunder until the Discharge of ABL Obligations has occurred.  The Borrower acknowledges and agrees that the
value of any payments or distributions in cash, property or other assets
received by any of the Term Collateral Agent or the Term Creditors and paid
over to the ABL Collateral Agent or the ABL Creditors pursuant to, and applied
in accordance with this Agreement, shall not relieve or reduce any of the
Obligations owed by the Borrower under the Term Loan Documents.

 

(b)                                 Subject to the
Discharge of Term Obligations, with respect to the value of any payments or
distributions in cash, property or other assets that any of the ABL Collateral
Agent or the ABL Creditors pay over to the Term Collateral Agent or Term
Creditors under the 

 

48

 

terms of this Agreement, the
respective paying Creditors shall be subrogated to the rights of the payee
Creditors; provided that, the Term Collateral Agent, on behalf of itself
and the Term Creditors, and each other Term Creditor (by its acceptance of the
benefits of the Term Credit Documents), and the ABL Collateral Agent, on behalf
of itself and the ABL Creditors, and each other ABL Creditor (by its acceptance
of the benefits of the ABL Credit Documents), hereby agree not to assert or
enforce all such rights of subrogation it may acquire as a result of any
payment hereunder until, the Discharge of Term Obligations has occurred.  The Borrower acknowledges and agrees that the
value of any payments or distributions in cash, property or other assets
received by the ABL Collateral Agent or the ABL Creditors and paid over to the
Term Collateral Agent or the Term Creditors pursuant to, and applied in
accordance with this Agreement, shall not relieve or reduce any of the
Obligations owed by the Borrower under the ABL Loan Documents.

 

SECTION 8.6                          Reserved.

 

SECTION 8.7                          SUBMISSION TO
JURISDICTION; WAIVERS.  (a) 
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN, CITY OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT 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.

 

(b)                                 THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY OBJECTION WHICH EACH MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT IN ANY COURT REFERRED TO IN SECTION 8.7(a).  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.

 

(c)                                  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 TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, 

 

49

 

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 BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 8.7.

 

SECTION 8.8                          Notices.  All notices to the ABL Creditors or the Term
Creditors permitted or required under this Agreement may be sent, respectively,
to the ABL Collateral Agent or the Term Collateral Agent.  Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, electronically mailed
or sent by courier service or U.S. mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of electronic mail
or four Business Days after deposit in the U.S. mail (registered or certified,
with postage prepaid and properly addressed). 
For the purposes hereof, the addresses of the parties hereto shall be as
set forth below each party’s name on the signature pages hereto, or, as to
each party, at such other address as may be designated by such party in a
written notice to all of the other parties.

 

SECTION 8.9                          Further
Assurances.  Each of (i) the
ABL Collateral Agent, on behalf of itself and the ABL Creditors, (ii) the
Term Collateral Agent, on behalf of itself and the Term Creditors and (iii) the
Borrower, agree that each of them shall take such further action and shall
execute and deliver such additional documents and instruments (in recordable
form, if requested) as any of the ABL Collateral Agent and/or the Term
Collateral Agent may reasonably request to effectuate the terms of and the lien
priorities contemplated by this Agreement. 
Each ABL Creditor, by its acceptance of the benefits of the ABL Loan
Documents, agrees to be bound by the agreements herein made by it and the ABL
Collateral Agent, on its behalf.  Each
Term Creditor, by its acceptance of the benefits of the Term Loan Documents,
agrees to be bound by the agreements herein made by it and the Term Collateral
Agent, on its behalf.

 

SECTION 8.10                    APPLICABLE LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK INCLUDING GENERAL OBLIGATIONS LAW 5-1401.

 

SECTION 8.11                    Binding on
Successors and Assigns.  This
Agreement shall be binding upon the ABL Collateral Agent, the ABL Creditors,
the Term Collateral Agent, the Term Creditors and their respective successors
and assigns, including without limitation any successor or assign to all or a
portion of the duties of any Collateral Agent (or any sub-agent or
sub-collateral agent appointed by it).

 

SECTION 8.12                    Specific
Performance.  Each of the
ABL Collateral Agent and the Term Collateral Agent may demand specific
performance of this Agreement.  Each of
the ABL Collateral Agent, on behalf of itself and the ABL Creditors and the
Term Collateral Agent, on behalf of itself and the Term Creditors, hereby
irrevocably waives any defense based on the 

 

50

 

adequacy of a remedy at law
and any other defense which might be asserted to bar the remedy of specific
performance in any action which may be brought by the ABL Collateral Agent or
the Term Collateral Agent, as the case may be.

 

SECTION 8.13                    Headings.  Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.

 

SECTION 8.14                    Counterparts.  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. 
Delivery of an executed counterpart of a signature page of this
Agreement or any document or instrument delivered in connection herewith by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement or such other document or instrument, as applicable.

 

SECTION 8.15                    Authorization.  By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.  Each ABL Creditor, by its acceptance of the
benefits of the ABL Loan Documents and each Term Creditor, by its acceptance of
the benefits of the Term Loan Documents, agrees to be bound by the agreements
made herein.

 

SECTION 8.16                    No Third Party
Beneficiaries; Effect of Agreement.  This Agreement and the rights and benefits
hereof shall inure to the benefit of each of the parties hereto and its
respective successors and assigns and shall inure to the benefit of each of the
ABL Creditors and the Term Creditors.  No
other Person shall have or be entitled to assert rights or benefits
hereunder.  Nothing in this Agreement
shall impair, as between the Borrower and the ABL Collateral Agent and the ABL
Creditors or the Borrower and the Term Collateral Agent and the Term Creditors,
the obligations of the Borrower to pay principal, interest, fees and other
amounts as provided in the ABL Loan Documents and the Term Loan Documents,
respectively.

 

SECTION 8.17                    Provisions Solely
to Define Relative Rights.  The
provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the ABL Creditors and the ABL Collateral Agent
and the Term Creditors and the Term Collateral Agent.  None of the Borrower, any other Grantor or
any other creditor thereof shall have any rights hereunder.  Nothing in this Agreement is intended to or
shall impair the obligations of the Borrower or any other Grantor, which are
absolute and unconditional, to pay the ABL Obligations and the Term Obligations
as and when the same shall become due and payable in accordance with their
terms.

 

SECTION 8.18                    Grantors;
Additional Grantors.  It is
understood and agreed that Holdings, the Borrower and each Subsidiary Guarantor
on the date of this Agreement shall constitute the original Grantors party
hereto.  The original Grantors hereby
covenant and agree to cause each Subsidiary of the Borrower which becomes a
Subsidiary Guarantor after the date hereof to contemporaneously become a party
hereto (as a Grantor) by executing and delivering a counterpart hereof to the
ABL Collateral Agent and the Term Collateral Agent or by executing and
delivering an assumption agreement in form and substance reasonably
satisfactory to the 

 

51

 

ABL Collateral Agent and the
Term Collateral Agent.  The parties
hereto further agree that, notwithstanding any failure to take the actions
required by the immediately preceding sentence, each Person which becomes a
Subsidiary Guarantor at any time (and any security granted by any such Person)
shall be subject to the provisions hereof as fully as if same constituted a
Grantor party hereto and had complied with the requirements of the immediately
preceding sentence.

 

52

 

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

 

	
   

  	
  CREDIT SUISSE CAYMAN
  ISLANDS BRANCH in its capacity as ABL Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
   

  	
  Notice Address

  
	
   

  	
   

  
	
   

  	
  Eleven Madison Avenue,
  OMA-2

  
	
   

  	
  New York, NY 10010

  
	
   

  	
  Attention: Loan Services
  Manager

  
	
   

  	
  Telecopy: 212-538-3380

  
	
   

  	
  Telephone: 212-325-8304

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Skadden, Arps, Slate,
  Meagher & Flom LLP

  
	
   

  	
  300 S. Grand Ave,
  Suite 3400

  
	
   

  	
  Attention: David Kitchen

  
	
   

  	
  Telecopy: (213) 687-5600

  
	
   

  	
  Telephone: (213) 687-5000

  
	
   

  	
  Email:
  dkitchen@skadden.com

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,
  in its capacity as ABL Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
   

  	
  Notice Address

  
	
   

  	
   

  
	
   

  	
  Michael A. Hintz

  
	
   

  	
  Account Executive – ABL

  
	
   

  	
  111 East Wisconsin Ave.,
  Floor 15

  
	
   

  	
  Milwaukee, WI 53202-4815

  
	
   

  	
   

  
	
   

  	
  Telecopy: 414-977-6652

  
	
   

  	
  Telephone: 414-977-6666

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Skadden, Arps, Slate,
  Meagher & Flom LLP

  
	
   

  	
  333 West Wacker Drive

  
	
   

  	
  Suite 2100

  
	
   

  	
  Chicago, IL 60606

  
	
   

  	
  Attn: Seth E. Jacobson

  
	
   

  	
   

  
	
   

  	
  Telecopy: 312-407-0700

  
	
   

  	
  Telephone: 312-407-0411

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
   

  	
  CREDIT SUISSE, CAYMAN
  ISLANDS BRANCH, in its capacities as Term Administrative Agent and Term
  Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
   

  	
  Notice Address

  
	
   

  	
   

  
	
   

  	
  Eleven Madison Avenue,
  OMA-2

  
	
   

  	
  New York, NY 10010

  
	
   

  	
  Attention: Loan Services
  Manager

  
	
   

  	
  Telecopy: 212-538-3380

  
	
   

  	
  Telephone: 212-325-8304

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Skadden, Arps, Slate,
  Meagher & Flom LLP

  
	
   

  	
  300 S. Grand Ave,
  Suite 3400

  
	
   

  	
  Attention: David Kitchen

  
	
   

  	
  Telecopy: (213) 687-5600

  
	
   

  	
  Telephone: (213) 687-5000

  
	
   

  	
  Email:
  dkitchen@skadden.com

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
  Notice Address:

  	
  DOUGLAS DYNAMICS HOLDINGS,
  INC.

  
	
   

  	
   

  
	
  7777 North 73rd Street

  	
   

  
	
  Milwaukee, WI 53223

  	
   

  
	
  Attention: Chief Executive
  Officer and President

  	
  By:

  	
   

  
	
  Fax: 414-354-8448

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Aurora Capital Group

  	
   

  
	
  10877 Wilshire Boulevard

  	
   

  
	
  Suite 2100

  	
   

  
	
  Los Angeles, CA 90024

  	
   

  
	
  Attention: Secretary

  	
   

  
	
  Fax: 310-824-2791

  	
   

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
  Notice Address:

  	
  DOUGLAS DYNAMICS, L.L.C.

  
	
   

  	
   

  
	
  7777 North 73rd Street

  	
   

  
	
  Milwaukee, WI 53223

  	
   

  
	
  Attention: Chief Executive
  Officer and President

  	
  By:

  	
   

  
	
  Fax: 414-354-8448

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Aurora Capital Group

  	
   

  
	
  10877 Wilshire Boulevard

  	
   

  
	
  Suite 2100

  	
   

  
	
  Los Angeles, CA 90024

  	
   

  
	
  Attention: Secretary

  	
   

  
	
  Fax: 310-824-2791

  	
   

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
  Notice Address:

  	
  DOUGLAS DYNAMICS FINANCE
  COMPANY

  
	
   

  	
   

  
	
  7777 North 73rd Street

  	
   

  
	
  Milwaukee, WI 53223

  	
   

  
	
  Attention: Chief Executive
  Officer and President

  	
  By:

  	
   

  
	
  Fax: 414-354-8448

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Aurora Capital Group

  	
   

  
	
  10877 Wilshire Boulevard

  	
   

  
	
  Suite 2100

  	
   

  
	
  Los Angeles, CA 90024

  	
   

  
	
  Attention: Secretary

  	
   

  
	
  Fax: 310-824-2791

  	
   

  

 

[Signature Page to Intercreditor Agreement]

 

 

	
  Notice Address:

  	
  FISHER, LLC

  
	
   

  	
   

  
	
  7777 North 73rd Street

  	
   

  
	
  Milwaukee, WI 53223

  	
   

  
	
  Attention: Chief Executive
  Officer and President

  	
  By:

  	
   

  
	
  Fax: 414-354-8448

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Aurora Capital Group

  	
   

  
	
  10877 Wilshire Boulevard

  	
   

  
	
  Suite 2100

  	
   

  
	
  Los Angeles, CA 90024

  	
   

  
	
  Attention: Secretary

  	
   

  
	
  Fax: 310-824-2791

  	
   

  

 

[Signature Page to Intercreditor Agreement]

 

 

EXHIBIT M

 

FIXED
CHARGE COVERAGE COMPLIANCE CERTIFICATE

 

All calculations under
this certificate shall be for the Fiscal Quarter Period preceding the date of
determination, which shall be the last day of any month.

 

	
  I.  

  	
  Consolidated Interest Expense

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  total
  interest expense (including that portion attributable to  Capital Leases in
  accordance with GAAP and capitalized  interest) payable in cash of the Company
  and its Subsidiaries on  a consolidated basis with respect to all outstanding Indebtedness  of the Company and its
  Subsidiaries, including all commissions,  discounts and other fees and charges owed
  with respect to letters of credit and  net costs under Interest Rate Agreements: (1)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  the
  aggregate amount of interest income of the Company and its Subsidiaries
  during such period paid in cash

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated
  Interest Expense (Item (a) minus Item (b))

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.  

  	
  Consolidated Adjusted EBITDA

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Consolidated
  Net Income:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)         Consolidated Interest Expense and
  non-Cash interest expense  

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)        provisions for taxes based on income 

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)       total depreciation expense  

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)       total amortization expense (2)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (v)        non-cash impairment charges  

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (vi)      
  non-cash expenses resulting from the grant of stock and stock options
  and other compensation to management personnel of the Company and its
  Subsidiaries pursuant to a written incentive plan or agreement  

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (vii)      other non-Cash items that are unusual or
  otherwise non-recurring items  

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (viii)     expenses for fees under the Management
  Services Agreement  

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ix)       any extraordinary losses and
  non-recurring charges during any period(3)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (x)        restructuring charges or reserves (4)

  	
   

  	
  $

  	
   

  	
   

  

 

(1)                                       Excluding any amounts referred to in Section 2.10
of the Credit Agreement payable on or before the Closing Date and amounts with
respect to the termination of Interest Rate Agreements entered into within 90
days of the Closing Date.

 

(2)                                       Including amortization of goodwill, other
intangibles, and financing fees and expenses.

 

(3)                                       Including severance, relocation costs,
one-time compensation charges and losses or charges associated with Interest
Rate Agreements.

 

(4)                                       Including costs related to closure of
Facilities.

 

M-1

 

	
   

  	
  (xi)      
  any transaction costs incurred in connection with the issuance of Securities
  or any refinancing transaction, in each case whether or not such transaction
  is consummated

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (xii)      any fees and expenses related to any
  Permitted Acquisitions

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (xiii)     the Financial Performance Covenant Cure
  Amount

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Sum
  of Items (i) thru (xiii)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)                               non-Cash
  items increasing Consolidated Net Income for such period that are unusual or
  otherwise non-recurring items

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)                            cash payments
  made during such period reducing reserves or liabilities for accruals made in
  prior periods but only to the extent such reserves or accruals were added
  back to “Consolidated Adjusted EBITDA” in a prior period pursuant to clauses
  (vi) or (vii) above

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)                       Restricted
  Payments made during such period to Holdings pursuant to Section 6.5(c)(i)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Sum
  of Items (i) thru (iii)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  Sum
  of Item (a) and (b)(5)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Consolidated Adjusted EBITDA (Item (d) minus
  Item (c)(6)):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  Consolidated Fixed Charges

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Consolidated
  Interest Expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  scheduled
  payments of principal on Consolidated Total Debt

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Consolidated
  Capital Expenditures (7)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  the
  portion of taxes based on income actually paid in cash during such period by
  the Company or any of its Subsidiaries whether for such period or any other period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
  Restricted
  Payments permitted under Section 6.5(c)(iii)  of the Credit Agreement
  and which are paid in cash during such period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Consolidated Fixed Charges (Sum of Items (a)-(e)(8))

  	
   

  	
  $

  	
   

  

 

(5)                                  Without
duplication to the extent deducted in the calculation of Consolidated Net
Income for such period.

 

(6)                                  Without
duplication.

 

(7)                                  The aggregate
of all expenditures of the Company and its Subsidiaries during such period determined
on a consolidated basis that, in accordance with GAAP, are or should be
included in “purchase of property and equipment” or similar items reflected in
the consolidated statement of cash flows of the Company and its Subsidiaries
(other than those financed with secured Indebtedness permitted by
Section 6.1 of the Credit Agreement or made or incurred pursuant to
Section 6.8(b)(ii) of the Credit Agreement).

 

(8)                                  Without duplication.

 

M-2

 

	
  IV.

  	
  Fixed
  Charge Coverage Ratio

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Consolidated Adjusted
  EBITDA

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Consolidated Fixed
  Charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fixed
  Charge Coverage Ratio (Item (a) divided by Item (b))

  	
   

  	
    .  
  :1.00

  

 

M-3

 

Schedule
4.1

(Organization and Capital Structure)

 

	
   

  	
   

  	
  Type of

  	
   

  	
  Jurisdiction of

  	
   

  	
   

  
	
  Full Legal Name

  	
   

  	
  Organization

  	
   

  	
  Organization

  	
   

  	
  Capital Structure

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Douglas
  Dynamics  Holdings, Inc.

  	
   

  	
  corporation

  	
   

  	
  Delaware

  	
   

  	
  1,000,000
  shares of Common Stock

   

  1
  share is designated Series B Preferred Stock and 1 share is designated
  Series C Preferred Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Douglas
  Dynamics,  L.L.C.

  	
   

  	
  limited
  liability company

  	
   

  	
  Delaware

  	
   

  	
  Percentage
  Interest of limited liability company units

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Douglas
  Dynamics  Finance
  Company

  	
   

  	
  corporation

  	
   

  	
  Delaware

  	
   

  	
  1,000
  shares of Common Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fisher,
  LLC 

  	
   

  	
  limited
  liability company

  	
   

  	
  Delaware

  	
   

  	
  Percentage
  Interest of limited liability company units

  

 

 

Schedule 4.2

(Capital Stock and Ownership)

[as of May 21, 2007]

 

	
  Entity

  	
   

  	
  Capital Structure

  	
   

  	
  Ownership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Douglas
  Dynamics Holdings, Inc.

  	
   

  	
  1,000,000
  shares of Common Stock; 606,656 shares issued and outstanding

  	
   

  	
  Douglas
  Dynamics Holdings, LLC (50.19%)

   

  Ares
  Corporate Opportunities Fund, L.P. (32.97%)

   

  General
  Electric Pension Trust (15.25%)

   

  The
  remaining stockholders own 1.58% in the aggregate (with each owning less than
  0.40% individually).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1
  share is designated Series B Preferred Stock; 1 share of Series B
  Preferred Stock issued and outstanding

  	
   

  	
  Douglas
  Dynamics Holdings, LLC (100%)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1
  share is designated Series C Preferred Stock; 1 share of Series C
  Preferred Stock issued and outstanding

  	
   

  	
  Ares
  Corporate Opportunities Fund, L.P. (100%)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Douglas
  Dynamics, L.L.C.

  	
   

  	
  Percentage
  Interest of limited liability company units

  	
   

  	
  Douglas
  Dynamics Holdings, Inc. (100%)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Douglas
  Dynamics Finance Company

  	
   

  	
  1,000
  shares of Common Stock

  	
   

  	
  Douglas
  Dynamics, L.L.C. (100%)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fisher,
  LLC

  	
   

  	
  Percentage
  Interest of limited liability company units

  	
   

  	
  Douglas
  Dynamics, L.L.C. (100%)

  

 

 

Existence of existing option, warrant, call, right, commitment
or other like agreement:

 

Douglas Dynamics Holdings, Inc.

 

	
  Grantees (as a group)

  	
   

  	
  Number of Awards Granted

  
	
   

  	
   

  	
   

  
	
  Douglas
  Management

  	
   

  	
  58,215
  options to acquire common stock

   

  8,070
  deferred stock units

  
	
   

  	
   

  	
   

  
	
  Douglas
  Independent Directors

  	
   

  	
  4,124
  options to acquire common stock

  
	
   

  	
   

  	
   

  
	
  Aurora
  Advisors

  	
   

  	
  1,500
  options to acquire common stock

  
	
   

  	
   

  	
   

  
	
  Ares
  Advisors

  	
   

  	
  857
  options to acquire common stock

  

 

*Note:
Approximately 7,800 options to acquire common stock have been reserved for
members of Douglas management, but have not been allocated/issued.

 

Douglas Dynamics, L.L.C.

 

None.

 

Douglas Dynamics Finance Company

 

None.

 

Fisher, LLC

 

None.

 

 

Schedule 4.9

(Material Adverse Changes)

 

Douglas Dynamics Holdings, Inc.

 

None.

 

Douglas Dynamics, L.L.C.

 

None.

 

Douglas Dynamics Finance Company

 

None.

 

Fisher, LLC

 

None.

 

 

Schedule
4.11

(Adverse Proceedings)

 

Douglas Dynamics
Holdings, Inc.

 

None.

 

Douglas Dynamics, L.L.C.

 

The inclusion of these items on this schedule is not
an admission by the Borrower that these items represent a Material Adverse
Effect or that such disclosure was required to be set forth as an exception to
this representation.

 

Bjork, David (Case number
MICV2005-01131, filed in Massachusetts Superior Court)

 

·                 This is a personal injury
case with a date of loss of December 16, 2002. Amount of damages is
unspecified, and the Company has not reserved any amount with respect to this
matter.

 

D’Angelo, Amy (Case number 98-3281, filed in New
York)

 

·                 This is a personal injury
case with a date of loss of February 4, 1998. Plaintiff is seeking
$10,000,000 in damages, and the Company has reserved $25,000 with respect to
this matter.

 

Employment and labor-related claims are listed in Schedule 4.18.

 

Douglas Dynamics Finance Company

 

None.

 

Fisher, LLC

 

None

 

 

Schedule
4.13

(Real
Estate Assets)

 

Douglas Dynamics Holdings, Inc.

 

None.

 

Douglas Dynamics, L.L.C.

 

4.13(i)

 

915 Riverview Drive

Johnson City, TN

 

7777 N. 73rd Street

Milwaukee, WI

 

50 Gordon Drive

Rockland, ME

 

4.13(ii)

 

None.

 

Douglas Dynamics Finance Company

 

None.

 

Fisher, LLC

 

None.

 

 

Schedule 4.14

(Environmental Matters)

 

Douglas Dynamics Holdings, Inc.

 

None.

 

Douglas Dynamics, L.L.C.

 

None.

 

Douglas Dynamics Finance Company

 

None.

 

Fisher, LLC

 

None.

 

 

Schedule 4.18

(Employee Matters)

 

Douglas Dynamics Holdings, Inc.

 

None.

 

Douglas Dynamics, L.L.C.

 

None.

 

Douglas Dynamics Finance Company

 

None.

 

Fisher, LLC

 

None.

 

 

Schedule
4.19

(Employee
Benefit Plans)

 

Douglas Dynamics Holdings, Inc.

 

None.

 

Douglas Dynamics, L.L.C.

 

Retired/Former Employee Benefit Plans

 

Douglas Dynamics L.L.C. Insurance Coverage Policy for Retirees, as
revised December 31, 2003.

 

Funding of Pension Plans

 

As of December 31, 2006, the present value of the aggregate
benefit liabilities under the Douglas Dynamics LLC Salaried Pension Plan and
the Douglas Dynamics LLC Pension Plan for Hourly Employees exceeded the
aggregate current value of the assets under such plans by approximately $5.1
million.

 

Douglas Dynamics Finance Company

 

None.

 

Fisher, LLC

 

None.

 

 

Schedule 4.22

(Certain Existing Liens)

 

See
Schedule 6.2.

 

 

Schedule 4.24

(Deposit Accounts)

 

 

	
  Description

  	
   

  	
  Bank Account

  Number

  	
   

  	
  Loan Party

  	
   

  	
  Depository Institution/

  Contact Information

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Main  Operating  Account,  Concentration Account for
  all  Controlled  Disbursement  Accounts,  Sweep  Account for  Fisher and  Western  Lockbox

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics, L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounts  Payable Controlled
  Disbursement account for all DD locations

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics, L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Flex
  Spending  Claims
  Controlled Disbursement account for all DD locations

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics,  L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Medical  Claims Controlled
  Disbursement account for all DD locations

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics, L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  Claims  Controlled
  Disbursement account for all DD locations

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics,  L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  401(k) account

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics, L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payroll  Clearing-WI

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics, L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  general  account

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics Holdings Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  general  account

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics Finance Company

  	
   

  	
   

  

 

 

	
  Description

  	
   

  	
  Bank Account

  Number

  	
   

  	
  Loan Party

  	
   

  	
  Depository Institution/

  Contact Information

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payroll
  Clearing-ME

  	
   

  	
   

  	
   

  	
  Fisher,
  LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payroll
  Clearing- TN

  	
   

  	
   

  	
   

  	
  Douglas
  Dynamics, L.L.C.

  	
   

  	
   

  

 

 

Schedule 6.1

(Certain Indebtedness)

 

None.

 

 

Schedule
6.2

(Permitted
Liens)

 

Delaware Secretary of State searched on 04/24/07. Secured Party: Hyster
Credit Company, P.O. Box 27248, Tempe, AZ 85285-7248. File no. 2197519,
07/23/2002. One Hyster Model S30XM, One Hyster Model H40XM Lift Truck together
with all attachments and accessories.

 

Delaware Secretary of State searched on 04/24/07. Secured Party: Hyster
Credit Company, P.O. Box 4366, Portland, OR 97208. File no. 2200036,
07/29/2002. One Hyster Model S30XM, One Hyster Model H40XM Lift Truck together
with all attachments and accessories.

 

Delaware
Secretary of State searched on 04/24/07. Secured Party: Bystronic Inc., 185
Commerce Drive, Hauppauge, NY, 11788. File no. 6046680, 01/27/2006. One BYSTAR
4020-2 (4400 Watt) Job No. 1803.

 

 

Schedule 6.7

(Certain Investments)

 

None.

 

 

Schedule
6.12

(Certain
Affiliate Transactions)

 

All transactions, including payments, in respect of the Amended and
Restated Joint Management Services Agreement dated as of April 12, 2004.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}]]