Document:

Exhibit
10.51

 

EXECUTION COPY

 

 

Published CUSIP
Number: 91068LAD3

 

AMENDED AND
RESTATED CREDIT AGREEMENT

 

Dated as of
July 30, 2004

 

among

 

UNITED INDUSTRIES
CORPORATION,

 

as the Borrower,

 

BANK OF AMERICA,
N.A.,

as Administrative Agent, Swing Line Lender

and

L/C Issuer,

 

and

 

The Other Lenders
Party Hereto

 

and

 

CITIGROUP GLOBAL
MARKETS INC., as Syndication Agent

 

and

 

JPMORGAN CHASE
BANK, as Documentation Agent

 

and

 

BANC OF AMERICA
SECURITIES LLC

 

and

 

CITIGROUP GLOBAL
MARKETS INC.,

 

as

 

Joint Lead Arrangers

 

and

 

BANC OF AMERICA
SECURITIES LLC

 

and

 

CITIGROUP GLOBAL
MARKETS INC.

 

and

 

J.P. MORGAN
SECURITIES INC.

 

as

 

Joint Book
Managers

 

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE I

  DEFINITIONS AND
  ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.01

  	
   

  	
  Defined Terms

  	
   

  
	
  1.02

  	
   

  	
  Other Interpretive
  Provisions

  	
   

  
	
  1.03

  	
   

  	
  Accounting
  Terms

  	
   

  
	
  1.04

  	
   

  	
  Rounding

  	
   

  
	
  1.05

  	
   

  	
  References
  to Agreements and Laws

  	
   

  
	
  1.06

  	
   

  	
  Times of Day

  	
   

  
	
  1.07

  	
   

  	
  Currency Equivalents
  Generally

  	
   

  
	
  1.08

  	
   

  	
  Timing
  of Performance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE II

  THE COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.01

  	
   

  	
  The Loans

  	
   

  
	
  2.02

  	
   

  	
  Borrowings, Conversions
  and Continuations of Loans

  	
   

  
	
  2.03

  	
   

  	
  Letters of
  Credit

  	
   

  
	
  2.04

  	
   

  	
  Swing Line
  Loans

  	
   

  
	
  2.05

  	
   

  	
  Prepayments

  	
   

  
	
  2.06

  	
   

  	
  Termination or
  Reduction of Commitments

  	
   

  
	
  2.07

  	
   

  	
  Repayment
  of Loans

  	
   

  
	
  2.08

  	
   

  	
  Interest

  	
   

  
	
  2.09

  	
   

  	
  Fees

  	
   

  
	
  2.10

  	
   

  	
  Computation
  of Interest and Fees

  	
   

  
	
  2.11

  	
   

  	
  Evidence
  of Indebtedness

  	
   

  
	
  2.12

  	
   

  	
  Payments
  Generally

  	
   

  
	
  2.13

  	
   

  	
  Sharing
  of Payments

  	
   

  
	
  2.14

  	
   

  	
  Increase
  in Commitments

  	
   

  
	
  2.15

  	
   

  	
  Use of Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE III

  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.01

  	
   

  	
  Taxes

  	
   

  
	
  3.02

  	
   

  	
  Illegality

  	
   

  
	
  3.03

  	
   

  	
  Inability to Determine
  Rates

  	
   

  
	
  3.04

  	
   

  	
  Increased Cost and Reduced
  Return; Capital Adequacy

  	
   

  
	
  3.05

  	
   

  	
  Compensation
  for Losses

  	
   

  
	
  3.06

  	
   

  	
  Matters
  Applicable to all Requests for Compensation

  	
   

  
	
  3.07

  	
   

  	
  Replacement
  of Lenders under Certain Circumstances

  	
   

  
	
  3.08

  	
   

  	
  Survival

  	
   

  

 

i

 

	
   

  	
   

  	
  ARTICLE IV

  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.01

  	
   

  	
  Conditions of
  Initial Credit Extension

  	
   

  
	
  4.02

  	
   

  	
  Conditions to all
  Credit Extensions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE V

  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.01

  	
   

  	
  Existence,
  Qualification and Power

  	
   

  
	
  5.02

  	
   

  	
  Capitalization

  	
   

  
	
  5.03

  	
   

  	
  Authorization; No
  Contravention

  	
   

  
	
  5.04

  	
   

  	
  Governmental Authorization;
  Other Consents

  	
   

  
	
  5.05

  	
   

  	
  Enforceability

  	
   

  
	
  5.06

  	
   

  	
  Financial
  Statements; No Material Adverse Effect

  	
   

  
	
  5.07

  	
   

  	
  Projections

  	
   

  
	
  5.08

  	
   

  	
  Accuracy
  of Information

  	
   

  
	
  5.09

  	
   

  	
  Litigation

  	
   

  
	
  5.10

  	
   

  	
  Collateral;
  Liens

  	
   

  
	
  5.11

  	
   

  	
  Intellectual
  Property

  	
   

  
	
  5.12

  	
   

  	
  Margin Stock

  	
   

  
	
  5.13

  	
   

  	
  Investment
  Company Act, Etc

  	
   

  
	
  5.14

  	
   

  	
  Solvency

  	
   

  
	
  5.15

  	
   

  	
  Labor Matters

  	
   

  
	
  5.16

  	
   

  	
  ERISA Matters

  	
   

  
	
  5.17

  	
   

  	
  Environmental
  Compliance

  	
   

  
	
  5.18

  	
   

  	
  Taxes

  	
   

  
	
  5.19

  	
   

  	
  Real Estate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VI

  AFFIRMATIVE, REPORTING AND FINANCIAL COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.01

  	
   

  	
  Compliance
  with Laws, Maintenance of Governmental Authorizations, Etc

  	
   

  
	
  6.02

  	
   

  	
  Payment of Taxes, Etc

  	
   

  
	
  6.03

  	
   

  	
  Compliance with
  Environmental Laws

  	
   

  
	
  6.04

  	
   

  	
  Maintenance of Insurance

  	
   

  
	
  6.05

  	
   

  	
  Preservation of Corporate
  Existence, Etc

  	
   

  
	
  6.06

  	
   

  	
  Visitation
  Rights

  	
   

  
	
  6.07

  	
   

  	
  Keeping of
  Books

  	
   

  
	
  6.08

  	
   

  	
  Maintenance of Properties,
  Etc

  	
   

  
	
  6.09

  	
   

  	
  Compliance with Terms of
  Leaseholds

  	
   

  
	
  6.10

  	
   

  	
  Transactions with Affiliates

  	
   

  
	
  6.11

  	
   

  	
  Covenant
  to Give Security

  	
   

  
	
  6.12

  	
   

  	
  Further
  Assurances

  	
   

  
	
  6.13

  	
   

  	
  Reporting
  Requirements

  	
   

  
	
  6.14

  	
   

  	
  Financial
  Covenants

  	
   

  
	
  6.15

  	
   

  	
  Post-Closing
  Matters

  	
   

  

 

ii

 

	
   

  	
   

  	
  ARTICLE VII

  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.01

  	
   

  	
  Liens, Etc

  	
   

  
	
  7.02

  	
   

  	
  Indebtedness

  	
   

  
	
  7.03

  	
   

  	
  Mergers, Etc

  	
   

  
	
  7.04

  	
   

  	
  Dispositions

  	
   

  
	
  7.05

  	
   

  	
  Investments
  in Other Persons

  	
   

  
	
  7.06

  	
   

  	
  Restricted
  Payments

  	
   

  
	
  7.07

  	
   

  	
  Capital Expenditures

  	
   

  
	
  7.08

  	
   

  	
  Prepayments,
  Etc. of Indebtedness

  	
   

  
	
  7.09

  	
   

  	
  Negative Pledge

  	
   

  
	
  7.10

  	
   

  	
  Dividends and
  Other Payment Restrictions Affecting Subsidiaries

  	
   

  
	
  7.11

  	
   

  	
  Change in Nature of Business

  	
   

  
	
  7.12

  	
   

  	
  Amendments to Constitutive
  Documents

  	
   

  
	
  7.13

  	
   

  	
  Accounting
  Changes, Etc

  	
   

  
	
  7.14

  	
   

  	
  Amendments, Etc. of
  UPG Acquisiton Documents

  	
   

  
	
  7.15

  	
   

  	
  Holdings

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VIII

  EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.01

  	
   

  	
  Events of
  Default.

  	
   

  
	
  8.02

  	
   

  	
  Acceleration;
  Remedies

  	
   

  
	
  8.03

  	
   

  	
  Actions in Respect
  of the Letters of Credit upon Default

  	
   

  
	
  8.04

  	
   

  	
  Application
  of Funds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IX

  ADMINISTRATIVE AGENT AND OTHER AGENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.01

  	
   

  	
  Appointment and
  Authorization of Agents

  	
   

  
	
  9.02

  	
   

  	
  Delegation
  of Duties

  	
   

  
	
  9.03

  	
   

  	
  Liability
  of Agents

  	
   

  
	
  9.04

  	
   

  	
  Reliance
  by Agents

  	
   

  
	
  9.05

  	
   

  	
  Notice of
  Default

  	
   

  
	
  9.06

  	
   

  	
  Credit
  Decision; Disclosure of Information by Agents

  	
   

  
	
  9.07

  	
   

  	
  Indemnification of Agents

  	
   

  
	
  9.08

  	
   

  	
  Agents in their
  Individual Capacities

  	
   

  
	
  9.09

  	
   

  	
  Successor
  Agents

  	
   

  
	
  9.10

  	
   

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  
	
  9.11

  	
   

  	
  Collateral and Guaranty
  Matters

  	
   

  
	
  9.12

  	
   

  	
  Other Agents;
  Arrangers and Managers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE X

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.01

  	
   

  	
  Amendments, Etc

  	
   

  

 

iii

 

	
  10.02

  	
   

  	
  Certain Rights of
  Second Lien Lenders

  	
   

  
	
  10.03

  	
   

  	
  Notices
  and Other Communications; Facsimile Copies

  	
   

  
	
  10.04

  	
   

  	
  No Waiver; Cumulative
  Remedies

  	
   

  
	
  10.05

  	
   

  	
  Attorney Costs, Expenses and Taxes

  	
   

  
	
  10.06

  	
   

  	
  Indemnification
  by the Borrower

  	
   

  
	
  10.07

  	
   

  	
  Payments
  Set Aside

  	
   

  
	
  10.08

  	
   

  	
  Successors
  and Assigns

  	
   

  
	
  10.09

  	
   

  	
  Confidentiality

  	
   

  
	
  10.10

  	
   

  	
  Setoff

  	
   

  
	
  10.11

  	
   

  	
  Interest
  Rate Limitation

  	
   

  
	
  10.12

  	
   

  	
  Counterparts

  	
   

  
	
  10.13

  	
   

  	
  Integration

  	
   

  
	
  10.14

  	
   

  	
  Survival of
  Representations and Warranties

  	
   

  
	
  10.15

  	
   

  	
  Severability

  	
   

  
	
  10.16

  	
   

  	
  Tax Forms

  	
   

  
	
  10.17

  	
   

  	
  Governing Law

  	
   

  
	
  10.18

  	
   

  	
  Waiver of
  Right to Trial by Jury

  	
   

  
	
  10.19

  	
   

  	
  Binding Effect

  	
   

  
	
  10.20

  	
   

  	
  USA
  PATRIOT Act Notice

  	
   

  
	
  10.21

  	
   

  	
  Judgment
  Currency

  	
   

  
	
  10.22

  	
   

  	
  Consent to Amendment
  of Certain Loan Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  

 

iv

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
   

  	
  1.01(a)

  	
  Existing Letters of
  Credit

  	
   

  
	
   

  	
  1.01(c)

  	
  Certain Adjustments to
  Financial Covenants

  	
   

  
	
   

  	
  1.01(d)

  	
  Applicable Basket
  Amounts/Applicable Ratios

  	
   

  
	
   

  	
  2.01

  	
  Commitments and Pro
  Rata Shares

  	
   

  
	
   

  	
  5.02

  	
  Subsidiaries

  	
   

  
	
   

  	
  5.17

  	
  Environmental Matters

  	
   

  
	
   

  	
  5.18

  	
  Open Years

  	
   

  
	
   

  	
  5.19

  	
  Owned and Leased Real
  Property

  	
   

  
	
   

  	
  6.15

  	
  Certain Post-Closing
  Matters

  	
   

  
	
   

  	
  7.01

  	
  Existing Liens

  	
   

  
	
   

  	
  7.02

  	
  Existing Indebtedness

  	
   

  
	
   

  	
  7.04

  	
  Dispositions

  	
   

  
	
   

  	
  7.05

  	
  Investments

  	
   

  
	
   

  	
  10.03

  	
  Administrative Agent’s
  Office; Certain Addresses for Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
  Form of

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A

  	
  Committed Loan Notice

  	
   

  
	
   

  	
  B

  	
  Swing Line Loan Notice

  	
   

  
	
   

  	
  C-1

  	
  Term Note

  	
   

  
	
   

  	
  C-2

  	
  Revolving Credit Note

  	
   

  
	
   

  	
  D

  	
  Compliance Certificate

  	
   

  
	
   

  	
  E

  	
  Assignment and
  Assumption

  	
   

  
	
   

  	
  F

  	
  Existing Guaranty
  Supplement

  	
   

  
	
   

  	
  G-1

  	
  Amendment and
  Supplement to the Existing Security Agreement

  	
   

  
	
   

  	
  G-2

  	
  Second Lien Security
  Agreement

  	
   

  
	
   

  	
  H-1

  	
  Amendment to the
  Existing Mortgage

  	
   

  
	
   

  	
  H-2

  	
  First Lien Mortgage

  	
   

  
	
   

  	
  H-3

  	
  Second Lien Mortgage

  	
   

  
	
   

  	
  I-1

  	
  Amendment and
  Supplement to the Existing Intellectual Property Security

  	
   

  
	
   

  	
   

  	
  Agreement

  	
   

  
	
   

  	
  I-2

  	
  Second Lien
  Intellectual Property Security Agreement

  	
   

  
	
   

  	
  J-1

  	
  Opinion Matters –
  Counsel to Loan Parties

  	
   

  
	
   

  	
  J-2

  	
  Opinion Matters – Local
  Counsel to Loan Parties in Ohio

  	
   

  
	
   

  	
  K

  	
  Holdings Joinder
  Agreement and Guaranty

  	
   

  
	
   

  	
  L

  	
  Subordination
  Provisions

  	
   

  
	
   

  	
  M

  	
  Intercreditor Agreement

  	
   

  
					

 

v

 

AMENDED AND
RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED
CREDIT AGREEMENT (“Agreement”)
is entered into as of July 30, 2004, among UNITED INDUSTRIES CORPORATION,
a Delaware corporation (the “Borrower”), each lender from time to time party hereto
(collectively, the “Lenders”
and individually, a “Lender”), CITIGROUP GLOBAL MARKETS INC., as Syndication
Agent, JPMORGAN CHASE BANK, as Documentation Agent, BANK OF AMERICA, N.A., as
Administrative Agent for the Lenders, Collateral Agent for the First Lien
Lenders, Swing Line Lender and L/C Issuer, and BANK OF AMERICA, N.A., as
Collateral Agent for the Second Lien Lenders.

 

PRELIMINARY STATEMENTS:

 

(1)                                  The
Borrower has entered into a Credit Agreement dated as of April 30, 2004
(as supplemented or otherwise modified from time to time in accordance with the
terms hereof, the “Existing
Credit Agreement”)
with certain banks, financial institutions and other institutional lenders
party thereto, and Bank of America, as administrative agent for the lenders
thereunder.

 

(2)                                  Pursuant
to the Merger Agreement dated June 14, 2004 (as amended, supplemented or
otherwise modified to the date hereof, the “UPG Merger Agreement”) among the Borrower, Saturn
MergerCo., Inc. and the sellers party thereto, the Borrower has agreed to
acquire (the “UPG Acquisition”) all of
the outstanding equity interests of United Pet Group, Inc., a Delaware
corporation (“UPG”).

 

(3)                                  The
Borrower has requested that the Lenders provide a revolving credit facility and
a term loan facility, in order to, among other things, (i) provide the Borrower
with a portion of the funds necessary to consummate the UPG Acquisition, (ii)
pay fees and expenses incurred in connection with the UPG Acquisition and (iii)
provide for the Borrower’s and its Subsidiaries’ ongoing working capital needs
and other general corporate purposes. 
The Lenders have indicated their willingness to lend and the L/C Issuer
has indicated its willingness to so issue Letters of Credit, in each case, on
the terms and subject to the conditions set forth herein.

 

In consideration of the
mutual covenants and agreements herein contained, the parties hereto covenant
and agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.01                           Defined
Terms.  As used in this
Agreement, the following terms shall have the meanings set forth below:

 

“Acceptance” means a draft drawn by a
beneficiary under a Letter of Credit, which (a) provides for payment by the L/C
Issuer on a date later than (but not more than 180 days later than) the date on
which such beneficiary presents the documents called for under such Letter of
Credit and (b) has been stamped “accepted” by the L/C Issuer.

 

“Actual Rate” has the meaning specified in Section 3.01(e).

 

 

“Administrative Agent” means Bank of America
in its capacity as administrative agent under any of the Loan Documents, or any
successor administrative agent.

 

“Administrative Agent’s Office” means the
Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.03,
or such other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.

 

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

 

“Affiliate” means, with respect to any Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.  “Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise.  “Controlling” and “Controlled” have
meanings correlative thereto.  Notwithstanding the foregoing, neither any
Agent nor any Lender shall be deemed to be an Affiliate of any Loan Party or
any Subsidiary or Affiliate of any Loan Party.

 

“Agent-Related Persons” means the
Administrative Agent, each Collateral Agent, each Arranger, each Bookrunner and
the Documentation Agent, together with their respective Affiliates (including,
in the case of Bank of America in its capacity as the Administrative Agent,
BAS), and the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.

 

“Agents” means, collectively, the
Administrative Agent, the Syndication Agent, the Documentation Agent, the First
Lien Collateral Agent, the Second Lien Collateral Agent and each co-agent or
sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.02.

 

“Agreement Currency” has the meanings specified in Section 10.21.

 

“Aggregate Commitments” means the Commitments
of all the Lenders.

 

“Aggregate Credit Exposures” means, at any
time, the sum of (i) the unused portion of the Revolving Credit Commitment then
in effect, (ii) the unused portion of each Term Commitment then in effect and
(iii) the Total Outstandings at such time.

 

“Agreement” means this Credit Agreement.

 

“Agreement Value” means, with respect to each
Swap Contract on any date of determination, an amount equal to the greater of:

 

(a)                                  (i)
in the case of any Swap Contract documented pursuant to an ISDA Master
Agreement, the amount, if any, that would be payable by any of the Loan Parties
or any of their Subsidiaries to its counterparty to such Swap Contract, as if
(A) such Swap Contract was being terminated early on such date of
determination, (B) such Loan Party or such Subsidiary, as the case may be,
was the sole Affected Party (as defined in

 

2

 

the applicable ISDA Master Agreement) and (C) the Administrative Agent
was the sole party determining such payment amount (with the Administrative
Agent making such determination pursuant to the provisions of the form of ISDA
Master Agreement); or (ii) in the case of a Swap Contract traded on an exchange,
the mark-to-market value of such Swap Contract, which will be the unrealized
loss on such Swap Contract to the Loan Party or the Subsidiary of a Loan Party
to such Swap Contract (determined by the Administrative Agent based on the
settlement price of such Swap Contract on such date); or

 

(b)                                 in
all other cases, the mark-to-market value of such Swap Contract, which will be
the unrealized loss on such Swap Contract to the Loan Party or the Subsidiary
of a Loan Party party to such Swap Contract (determined by the Administrative
Agent based on the amount, if any, by which (i) the present value of the future
cash flows to be paid by such Loan Party or such Subsidiary of a Loan Party, as
the case may be, exceeds (ii) the present value of the future cash flows to be
received by such Loan Party or such Subsidiary of a Loan Party pursuant to such
Swap Contract).

 

“Alternate Date” means
(a) in the case of the First Lien Loans, December 31, 2008 and (b) in the
case of the Second Lien Loans, January 31, 2009, in each case, if the
Senior Subordinated Notes have not by November 30, 2008 been refinanced
with replacement senior subordinated notes having a maturity date of no sooner
than the date which is 71⁄2 years after the Initial Closing Date, and otherwise
in compliance with Section 7.02(b)(x).

 

“Amendment and Restatement Closing Date” means
the first date all the conditions precedent in Section 4.01 are
satisfied or waived in accordance with Section 10.01.

 

“Applicable Basket Amount”
means, with respect to any specific provision of this Agreement, the amount set
forth on Part I of Schedule 1.01(d) opposite the reference to such
provision.

 

“Applicable Collateral Agent”
means (a) the First Lien Collateral Agent prior to the Termination Date for the
First Lien Facility and (b) thereafter, the Second Lien Collateral Agent.

 

“Applicable Rate” means (a) with respect
to First Lien Term Loans, (i) 2.50% in the case of Eurodollar Rate Loans and
Screen Rate Loans and (ii) 1.50% in the case of Base Rate Loans, (b) with
respect to Second Lien Loans, (i) 4.5% in the case of Eurodollar Rate Loans and
(ii) 3.5% in the case of Base Rate Loans and (c) with respect to Revolving
Credit Loans, (i) for the period from the Initial Closing Date through the date
which is six months after the Initial Closing Date, (A) with respect to
Eurodollar Rate Loans, 2.50% and (B) with respect to Base Rate Loans,
1.50% and (ii) from and after the date which is six months after the
Initial Closing Date, the following percentages per annum, based upon the Total
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 6.13(d):

 

3

 

	
  Pricing

  Level

  	
   

  	
  Total
  Leverage

  Ratio

  	
   

  	
  Eurodollar
  

  Rate +

  Letters of

  Credit

  	
   

  	
  Base Rate

  +

  
	
  1

  	
   

  	
  <3.25:1

  	
   

  	
  1.75

  	
   

  	
  0.75

  
	
  2

  	
   

  	
  >3.25:1 but <3.75:1

  	
   

  	
  2.00

  	
   

  	
  1.00

  
	
  3

  	
   

  	
  >3.75:1 but <4.25:1

  	
   

  	
  2.25

  	
   

  	
  1.25

  
	
  4

  	
   

  	
  >4.25:1

  	
   

  	
  2.50

  	
   

  	
  1.50

  

 

Any increase or decrease
in the Applicable Rate resulting from a change in the Total Leverage Ratio
shall become effective as of the first Business Day immediately following the
date a Compliance Certificate is delivered pursuant to Section 6.13(d);
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing Level 4 shall
apply as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered until the first Business Day
immediately following the date on which such Compliance Certificate is delivered.

 

“Applicable Ratio”
means, with respect to any specific provision of this Agreement, the ratio set
forth on Part II of Schedule 1.01(d) opposite the reference to such
provision.

 

“Appropriate Lender” means, at any time, (a) with
respect to any Term Facility or the Revolving Credit Facility, a Lender that
has a Commitment with respect to such Facility at such time, (b) with
respect to the Letter of Credit Sublimit, (i) the L/C Issuer and
(ii) if any Letters of Credit have been issued pursuant to Section 2.03(a),
the Revolving Credit Lenders and (c) with respect to the Swing Line
Facility, (i) the Swing Line Lender and (ii) if any Swing Line Loans
are outstanding pursuant to Section 2.04(a), the Revolving Credit
Lenders.

 

“Approved Fund” has the meaning specified in Section 10.08(g).

 

“Arrangers” means BAS and CGMI, in their
capacities as joint lead arrangers.

 

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

 

“Attorney Costs” means and includes all reasonable
fees, expenses and disbursements of any law firm or other external counsel.

 

“Audited Financial Statements” means the
audited consolidated balance sheet of Borrower and its Subsidiaries for the
fiscal year ended December 31, 2003, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for
such fiscal year of the Borrower and its Subsidiaries, including the notes
thereto.

 

“Auto-Extension Letter of Credit” has the
meaning specified in Section 2.03(b)(iii).

 

“Availability Period” means the period from
and including the Amendment and Restatement Closing Date to (a) in the
case of the Revolving Credit Facility, the earliest of (i) the Maturity Date
for such Facility, (ii) the date of termination of the Revolving Credit

 

4

 

Commitments pursuant to Section 2.06,
and (iii) the date of termination of the commitment of each Revolving Credit
Lender to make Revolving Credit Loans and of the obligation of the L/C Issuer
to make L/C Credit Extensions pursuant to Section 8.02, and (b) in
the case of any Term Facility, the earliest of (i) the Maturity Date for such
Facility, (ii) the date of termination of the Term Commitments pursuant to Section 2.06,
and (iii) the date of termination of the commitment of each Term Lender to make
Term Loans pursuant to Section 8.02.

 

“Backstop L/C” has the meaning specified in Section 2.03(g).

 

“Bank of America” means Bank of America, N.A.
and its successors.

 

“BAS” means Banc of America Securities LLC and
its successors.

 

“Base Rate” means, for
any day, with respect to any Loan other than a Canadian Term Loan, a
fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate
plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such
rate announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.

 

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

 

“Bookrunners” means
BAS, CGMI and JPMorgan, in their capacities as joint book managers.

 

“Borrower” has the meaning specified in the
introductory paragraph hereto.

 

“Borrowing” means a Revolving Credit
Borrowing, a Swing Line Borrowing, a Canadian Term Borrowing, a Dollar Term
Borrowing or a Second Lien Borrowing, as the context may require.

 

“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks are authorized to close
under the Laws of, or are in fact closed in, the state where the Administrative
Agent’s Office is located and, if such day relates to any (a) Eurodollar
Rate Loan, means any such day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market and
(b) Screen Rate Loan, means any day on which dealings in deposits in Canadian
Dollars are conducted by and between banks in the London interbank market for
Canadian Dollars.

 

“Canadian Dollar” and  “CD” mean lawful money
of Canada.

 

“Canadian GAAP “ means
generally accepted accounting principles in effect from time to time in Canada
and applied on a consistent basis, subject, however, to the terms
of Section 1.03.

 

5

 

“Canadian Term Borrowing”
means a borrowing consisting of simultaneous Canadian Term Loans of the same
Type and, in the case of Screen Rate Loans, having the same Interest Period,
made by the Canadian Term Lenders pursuant to Section 2.01(a).

 

“Canadian Term Commitment “
means, as to each Canadian Term Lender, its obligation to make a Canadian Term
Loan to the Borrower pursuant to Section 2.01(a) in a principal
amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Canadian Term Commitment” or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.

 

“Canadian Term Facility” means,
at any time, the aggregate Canadian Term Commitments or Canadian Term Loans, as
applicable, of all Canadian Term Lenders at such time.

 

“Canadian Term Lender”
means each of the Term Lenders with a Canadian 
Term Commitment, as set forth on Schedule 2.01 hereto.

 

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

 

“Capital Expenditures”
means, with respect to any Person for any period, all expenditures made by
such Person during such period for capital assets in accordance with GAAP; provided
however, that Capital Expenditures shall not include (a) any expenditures by
the Borrower or any of its Subsidiaries in connection with the Nu-Gro
Acquisition, the UPG Acquisition or a Permitted Acquisition or capital assets
acquired in connection with the Nu-Gro Acquisition, the UPG Acquisition or a
Permitted Acquisition or (b) any expenditures made with the proceeds of
condemnation or eminent domain proceedings affecting real property or with
insurance proceeds; provided, further that any expenditure that
is purchased with the trade-in or exchange of existing assets or the cash
proceeds of the sale or other disposition of existing assets permitted pursuant
to Section 7.04(d) or with insurance proceeds shall be included in
Capital Expenditures only to the extent of the gross amount by which such
purchase price exceeds the credit granted by the seller of such assets for the
assets being traded in, the amount of the cash proceeds of any such sale or
disposition or the amount of such insurance proceeds, as the case may be.

 

“Capitalized Lease”
means any lease with respect to which the lessee is required to recognize
concurrently the acquisition of property or an asset and the incurrence of a
liability in accordance with GAAP.

 

“Cash Collateral Account” means a blocked,
non-interest bearing deposit account at Bank of America in the name of the
Applicable Collateral Agent and under the sole dominion and control of the
Applicable Collateral Agent, and otherwise established in a manner satisfactory
to the Administrative Agent.

 

“Cash Collateralize” has the meaning specified
in Section 2.03(g).

 

6

 

“Cash Equivalents”
means any of the following types of Investments, to the extent owned by the
Borrower or any of its Subsidiaries free and clear of all Liens (other than
Liens created under the Collateral Documents):

 

(a)                                  readily
marketable obligations issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof having
maturities of not more than 360 days from the date of acquisition thereof; provided
that the full faith and credit of the United States of America is pledged in
support thereof;

 

(b)                                 time
deposits with, or insured certificates of deposit or bankers’ acceptances of,
any commercial bank that (i) (A) is a Lender or (B) is organized under the
laws of the United States of America, any state thereof or the District of
Columbia, or is the principal banking subsidiary of a bank holding company
organized under the laws of the United States of America, any state thereof or
the District of Columbia, and is a member of the Federal Reserve System, (ii)
issues (or the parent of which issues) commercial paper rated as described
below in clause (c) of this definition and (iii) has combined
capital and surplus of at least $500,000,000, in each case with a maturity of
not more than one year from the date of acquisition thereof;

 

(c)                                  commercial
paper issued by any Person organized under the laws of any state of the United
States of America and rated at least “Prime-1” (or the then equivalent
grade) by Moody’s Investors Service, Inc. or at least “A-1” (or the then
equivalent grade) by Standard & Poor’s Ratings Group, in each case
with a maturity of not more than 180 days from the date of acquisition thereof;

 

(d)                                 solely
with respect to any Foreign Subsidiary, non-Dollar denominated (i) certificates
of deposit of, bankers acceptances of, or time deposits with any commercial
bank which is organized and existing under the laws of the country in which
such Foreign Subsidiary maintains its chief executive office and principal
place of business provided such country is a member of the Organization for
Economic Cooperation and Development, and whose short-term commercial paper
rating is at least “Prime-1” (or the then equivalent grade) by Moody’s
Investors Service, Inc. or at least “A-1” (or the then equivalent
grade) by Standard & Poor’s Ratings Group (any such bank being an “Approved Foreign Bank”) and
maturing within twelve (12) months of the date of acquisition and (ii)
equivalents of demand deposit accounts which are maintained with an Approved
Foreign Bank;

 

(e)                                  repurchase
agreements entered into by any Person with a bank or trust company (including
any of the Lenders) or recognized securities dealer having capital and surplus
in excess of $500,000,000 for direct obligations issued by or fully guaranteed
by the United States in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations;

 

(f)                                    securities
with maturities of one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United States,
by any political subdivision or taxing authority of any such state,
commonwealth or

 

7

 

territory or by any foreign government, the securities or which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least “A” (or the then equivalent
grade) by Moody’s Investors Service, Inc. or at least “A” (or the then
equivalent grade) by Standard & Poor’s Ratings Group; and

 

(g)                                 Investments,
classified as Current Assets of the Borrower or any of its Subsidiaries, in
money market investment programs registered under the Investment Company Act of
1940, as amended, which are administered by financial institutions that have
capital of at least $500,000,000 and the portfolios of which are limited such
that 95% of such Investments are of the character and quality described in clauses
(a), (b), (c), (d), (e) and (f) of
this definition, in each case with a maturity of not more than one year from
the date of such Investment.

 

“CERCLA” means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980.

 

“CERCLIS” means the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.

 

“CFC” means a “controlled foreign corporation”
under Section 957 of the Code.

 

“CGMI” means Citigroup
Global Markets Inc.

 

“Change of Control”
means the earliest to occur of:

 

(a)                                  at
any time prior to the consummation of a Qualifying IPO, and prior to the
Holding Company Event, and for any reason whatsoever, (A) the Equity Investors
do not have the right to designate (or do not so designate) a majority of the
board of directors of the Borrower or (B)(1) the Equity Investors do not
own of record or beneficially, directly or indirectly, an amount of common
stock of the Borrower equal to an amount more than fifty percent (50%) of the
amount of common stock of the Borrower owned by the Equity Investors of record
or beneficially, directly or indirectly, as of the Initial Closing Date or (2)
the Equity Investors do own the percentage of common stock required by the
foregoing subclause (1), but such ownership by the Equity Investors does
not represent the largest single block of voting securities of the Borrower
held by any Person or related group for purposes of Section 13(d) of the
Securities and Exchange Act of 1934, as amended, or

 

(b)                                 at
any time prior to the consummation of a Qualifying IPO, and after the
occurrence of the Holding Company Event, and for any reason whatsoever, (A) the
Equity Investors do not have the right to designate (or do not so designate) a
majority of the board of directors of Holdings or (B)(1) the Equity
Investors do not own of record or beneficially, directly or indirectly, an
amount of common stock of Holdings equal to an amount more than fifty percent
(50%) of the amount of common stock of Holdings owned by the Equity Investors
of record or beneficially, directly or indirectly, as of the date of the
Holding Company Event or (2) the Equity Investors do own the percentage of
common stock required by the foregoing subclause (1), but such ownership
by the Equity

 

8

 

Investors does not represent the largest single block of voting
securities of Holdings held by any Person or related group for purposes of
Section 13(d) of the Securities and Exchange Act of 1934, as amended or
(C) the Borrower shall cease to be a wholly owned Subsidiary of Holdings; or

 

(c)                                  at
any time after the consummation of a Qualifying IPO, and for any reason
whatsoever, (A) any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but
excluding any employee benefit plan of such person and its Subsidiaries, and
any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan), excluding the Equity Investors,
shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5
under such Act), directly or indirectly, of more than the greater of
(x) thirty-five percent (35%) of the shares outstanding or (y) the percentage
of the then outstanding voting stock of, in each case, the Borrower (or after
the Holding Company Event, Holdings), owned beneficially by the Equity
Investors or (B) during any period of twelve (12) consecutive months, the
board of directors of the Borrower (or after the Holding Company Event,
Holdings) shall not consist of a majority of the Continuing Directors; or

 

(d)                                 a
“change of control” or any comparable term under, and as defined in, the Senior
Subordinated Notes Documents or other Indebtedness of Holdings, the Borrower or
any of the Borrower’s Subsidiaries with amounts outstanding in an aggregate
principal amount of at least $15,000,000 shall have occurred.

 

“Citigroup” means Citigroup Global Markets,
Inc. and its successors.

 

“Code” means the U.S. Internal Revenue Code of
1986.

 

“Collateral” means all of the “Collateral” and “Mortgaged Property”
referred to in the Collateral Documents and all of the other property and
assets that are or are intended under the terms of the Collateral Documents to
be subject to Liens in favor of the Administrative Agent for the benefit of the
Secured Parties.

 

“Collateral Agent”
means the First Lien Collateral Agent or the Second Lien Collateral Agent, as
applicable, and “Collateral
Agents” means both of them, together.

 

“Collateral Documents” means, collectively,
the Security Agreements, the Intellectual Property Security Agreements, the
Mortgages, each of the mortgages, collateral assignments, Security Agreement
Supplements, IP Security Agreement Supplements, security agreements, pledge
agreements or other similar agreements delivered to the Administrative Agent
and the Lenders pursuant to Section 6.11 and 6.15, and each
of the other agreements, instruments or documents that creates or purports to
create a Lien in favor of the Administrative Agent for the benefit of the
Secured Parties.

 

“Commitment” means a Term Commitment or a
Revolving Credit Commitment, as the context may require.

 

9

 

“Committed Loan Notice” means a notice of (a)
a Term Loan Borrowing, (b) a Revolving Credit Borrowing, (c) a conversion of
Loans from one Type to the other, or (d) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.

 

“Compensation Period” has the meaning
specified in Section 2.12(c)(ii).

 

“Compliance Certificate” has the meaning
specified in Section 6.13(d).

 

“Consolidated” refers
to the consolidation of accounts in accordance with GAAP.

 

“Consolidated Cash Interest Expense”
means, with respect to any Person for any period, the interest expense paid or
payable in cash on all Indebtedness of such Person and its Subsidiaries (net of
all interest income of such Person and its Subsidiaries) for such period,
determined on a Consolidated basis and in accordance with GAAP, including,
without limitation, (a) in the case of the Borrower all fees paid or
payable pursuant to Section 2.09(a), (b) the interest
component of all obligations in respect of Capitalized Leases, (c) commissions,
discounts and other fees and charges paid or payable in connection with letters
of credit (including, without limitation, the Letters of Credit) and
(d) the net payment, if any, paid or payable in connection with Swap
Contracts pertaining to interest payable in respect of Indebtedness for
borrowed money less the net
credit, if any, received in connection with Swap Contracts, but excluding
(A) any amortization of original issue discount, (B) the interest
portion of any deferred payment obligation, (C) any other interest not
payable in cash during such period, (D) fees and expenses associated with
any Investment permitted under Section 7.05, issuance of Equity
Interests or issuance or incurrence of Indebtedness permitted under Section 7.02
(whether or not consummated), as determined in accordance with GAAP, to the
extent the same are payable in cash with respect to such period, (E) fees
and expenses associated with the consummation of the Nu-Gro Transaction and the
UPG Acquisition, (F) annual agency fees paid to the Administrative Agent
and (G) costs associated with obtaining Swap Contracts.

 

“Consolidated EBITDA”
means, with respect to any Person for any period,

 

(a)                                  the
Consolidated Net Income of such Person and its Subsidiaries for such period
(excluding, in each case, extraordinary gains and extraordinary losses) plus

 

(b)                                 the
sum of each of the following expenses that have been deducted from the
determination of the Consolidated Net Income of such Person and its
Subsidiaries for such period:

 

(i)                                     all
interest expense of such Person and its Subsidiaries (net of (A) all interest
income of such Person and its Subsidiaries for such period and (B) solely to
the extent otherwise excluded from the determination of the Consolidated
interest expense of such Person and its Subsidiaries for such period in
accordance with GAAP, any unrealized gains or losses on any Swap Contracts
pertaining to interest payable in respect of Indebtedness for borrowed money of
such Person and its Subsidiaries resulting from the mark-to-market value
thereof as of the last day of such period),

 

10

 

(ii)                                  all
income, franchise or similar tax expense (whether federal, state, local,
foreign or otherwise) of such Person and its Subsidiaries for such period,

 

(iii)                               all
depreciation expense of such Person and its Subsidiaries for such period,

 

(iv)                              all
amortization expense of such Person and its Subsidiaries for such period,

 

(v)                                 (A)
all noncash losses and noncash charges otherwise deducted from the
determination of the Consolidated Net Income of such Person and its
Subsidiaries for such period (other than any such noncash losses or noncash
charges that require an accrual or reserve for cash charges or cash expenses
paid or payable (or to be paid or payable) at any time during such period and
any write-downs or write-offs of accounts receivables) less (B) all
noncash gains and noncash credits otherwise added in the determination of the
Consolidated Net Income of such Person and its Subsidiaries for such period, in
each case determined on a Consolidated basis and in accordance with GAAP for
such period,

 

(vi)                              cash
expenses or charges incurred in connection with or in contemplation of the
Nu-Gro Transaction and the UPG Acquisition or, to the extent permitted
hereunder, any Investment permitted under Section 7.05, issuance of
Equity Interests or issuance or incurrence of Indebtedness permitted under Section 7.02
(in each case, whether or not consummated),

 

(vii)                           any
losses (or minus any gains) realized upon the disposition of property outside
of the ordinary course of business,

 

(viii)                        to
the extent actually reimbursed, expenses incurred to the extent covered by
indemnification provisions in any agreement in connection with the Nu-Gro Acquisition,
the UPG Acquisition or a Permitted Acquisition,

 

(ix)                                to
the extent covered by insurance, expenses with respect to liability or casualty
events, business interruption or product recalls,

 

(x)                                   management
fees permitted under Section 6.10,

 

(xi)                                fees
and expenses (including any applicable premium) in connection with the exchange
of the Senior Subordinated Notes for registered notes with identical terms as
contemplated by the Senior Subordinated Notes Documents or exchanges,
redemptions or refinancings permitted by this Agreement,

 

(xii)                             with
respect to any Permitted Equity Issuance to the Equity Investors made to cure a
prospective Event of Default in respect of any covenant set forth in Section 6.14,
the Net Cash Proceeds of such Permitted Equity Issuance solely to the extent
that such Net Cash Proceeds (A) are actually

 

11

 

received by the Borrower (including through capital contribution of
such Net Cash Proceeds by the Equity Investors to the Borrower) no later than
fifteen Business Days after the delivery of a Notice of Intent to Cure, (B)
have not been applied to make any payment of the type described in Section 7.06
or any Investment or any prepayment of Indebtedness (other than a prepayment of
the Loans) and (C) do not exceed the aggregate amount necessary to cure such
Event of Default under Section 6.14 for any applicable period, provided
that the provisions of this subclause (b)(xii) may be relied on for
purposes of determining Consolidated EBITDA no more than two times in any
twelve-month period, it being understood that this subclause (b)(xii)
may not be relied on for purposes of calculating any financial ratios other
than as applicable to Section 6.14; and

 

(xiii)                          all
non-recurring cash restructuring charges taken within 36 months after the
Initial Closing Date not to exceed $10,000,000 in the aggregate;

 

provided,
that to the extent the receipt of any Net Cash Proceeds of any Permitted Equity
Issuance are an effective addition to Consolidated EBITDA as contemplated by,
and in accordance with, the provisions of subclause (b)(xii) above and,
as a result thereof, any Event of Default in respect of the covenants set forth
in Section 6.14 shall have been cured for any applicable period,
such cure shall be deemed to be effective as of the last day of such applicable
period; provided, further, that with respect to any Specified
Transaction, for purposes of determining (1) compliance with the covenants set
forth in Section 6.14 (but excluding for purposes of the definition
of “Applicable Rate”),
Consolidated EBITDA shall be calculated on a Pro Forma Basis for such Specified
Transaction and (2) the calculation of the “Applicable Rate,” Consolidated
EBITDA shall be calculated on a Pro Forma Basis for such Specified Transaction,
but without giving effect to estimated cost savings reduction referred to in
the definition of “Pro Forma Basis,” in each case, subject to the adjustments
set forth in Schedule 1.01(c).

 

“Consolidated Net Income”
means, for any period, the net income (or net loss) of any Person and its
Subsidiaries for such period, determined on a Consolidated basis and in
accordance with GAAP, but excluding for each such period (without duplication),
the income (or loss) of any other Person (other than a Subsidiary of such
Person) in which a Person other than such Person or any of its Subsidiaries
owns or otherwise holds an Equity Interest, except to the extent such income
(or loss) shall have been received in the form of cash dividends or other distributions
actually paid to such Person or any of its Subsidiaries by such other Person
during such period; provided that
Consolidated Net Income for any such period shall not include (A) the
cumulative effect of a change in accounting principles during such period, (B)
any net after-tax income or loss (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of Indebtedness, (C)
any non-cash charges resulting from mark-to-market accounting relating to
warrants and (D) any non-cash impairment charges resulting from the application
of Statement of Financial Accounting Standards No. 142 – Goodwill and Other
Intangibles and No. 144 – Accounting for the Impairment or Disposal of
Long-Lived Assets and the amortization of intangibles including arising
pursuant to Statement of Financial Accounting Standards No. 141 – Business
Combinations.

 

“Constitutive Documents”
means, with respect to any Person, the certificate of incorporation, formation
or registration (including, if applicable, certificate of change of name),

 

12

 

articles of incorporation
or association, memorandum of association, charter, bylaws, partnership
agreement, trust agreement, limited liability company operating or members
agreement, joint venture agreement or one or more similar agreements,
instruments or documents constituting the organization or formation of such
Person.

 

“Contingent Obligation”
means, with respect to any Person, without duplication, any obligation of such
Person to guarantee or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary
obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect
guaranty, endorsement (other 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 a primary obligor, (b) the obligation
to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or (c) any
obligation of such Person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain
working capital, equity capital, net worth or any other balance sheet condition
or any income statement condition of the primary obligor or otherwise to
maintain the solvency of the primary obligor, (iii) to purchase, lease or
otherwise acquire property, assets, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. 
The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such Person may be liable pursuant to the
terms of the agreement, instrument or other document evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof, as determined by such Person in good
faith.

 

“Continuing Directors” shall mean (a) in the
case of the Borrower, the directors of the Borrower on the Initial Closing
Date, after giving effect to the Nu-Gro Acquisition, and each other director,
if, in each case, such other directors’ nomination for election to the board of
directors is recommended by a majority of the then Continuing Directors or such
other director receives the vote of the Equity Investors in his or her election
by the stockholders of the Borrower and (b) in the case of Holdings, upon and
after the occurrence of the Holding Company Event, the directors of Holdings on
the date of the occurrence of the Holdings Company Event and each other
director, if, in each case, such other directors’ nomination for election to
the board of directors is recommended by a majority of the then Continuing
Directors or such other director receives the vote of the Equity Investors in
his or her election by the stockholders of Holdings.

 

“Control” has the meaning specified in the
definition of “Affiliate.”

 

“Credit Extension” means each of the
following:  (a) a Borrowing and (b) an
L/C Credit Extension.

 

13

 

“Cumulative Excess Cash Flow”
means the sum of Excess Cash Flow for each Fiscal Year commencing with the Fiscal
Year ended December 31, 2004 and ending with the Borrower’s most recently
ended Fiscal Year.

 

“Current Assets”
means, with respect to any Person, all assets of such Person that, in
accordance with GAAP, would be classified as current assets on the balance
sheet of a Person conducting a business the same as or similar to that of such
Person, after deducting appropriate and adequate reserves therefrom in
accordance with GAAP.

 

“Current Liabilities”
means, with respect to any Person, as of any date of determination,
(a) all Indebtedness of such Person that by its terms is payable on demand
or matures within one year after the date of determination (excluding any
Indebtedness renewable or extendible, at the option of such Person, to a date
more than one year from such date or arising under a revolving credit or
similar agreement that obligates the lender or lenders to extend credit during
a period of more than one year from such date), (b) all amounts of
Funded Indebtedness of such Person required to be paid or prepaid within one
year after such date and (c) all other items (including, without limitation,
taxes accrued as estimated and trade payables otherwise excluded from
Indebtedness under clause (b) of the definition thereof set forth
below in this Section 1.01) that, in accordance with GAAP, would be
classified on the balance sheet of such Person as current liabilities of such
Person, but excluding for all purposes the Outstanding Amount of all Revolving
Credit Loans, Swing Line Loans and L/C Credit Extensions.

 

“Debtor Relief Laws” means the Bankruptcy Code
of the United States, and all other liquidation, conservatorship, bankruptcy,
general assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.

 

“Default” means any event or condition that
constitutes an Event of Default or that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.

 

“Default Rate” means (a) when used with respect to the
First Lien Obligations or the Second Lien Obligations, as the case may be,
other than as set forth in clause (b) below, an interest rate equal to
(i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to
Base Rate Loans plus (iii) 2.0% per annum; provided, however,
that with respect to a Eurodollar Rate Loan or a Screen Rate Loan, the Default
Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2.0% per annum and (b)
when used with respect to Letter of Credit Fees, a rate equal to the Applicable
Rate plus 2% per annum, in all cases to the fullest extent permitted by
applicable Laws.

 

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

 

14

 

“Deferred Payment Obligation” means the
obligation of the L/C Issuer to make payment to a beneficiary arising under a
Letter of Credit a fixed number of calendar days after such beneficiary
presents the documents called for in such Letter of Credit and with respect to
which a draft is not drawn by the beneficiary.

 

“Disposition” or “Dispose” means the sale, transfer, license,
lease or other disposition (including any sale and leaseback transaction) of
any property by any Person, including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith (it being understood that the
abandonment of any IP Right which abandonment is otherwise not prohibited by
the terms of the Loan Documents shall not be deemed a Disposition).

 

“Documentation Agent” means JPMCB in its
capacity as documentation agent hereunder.

 

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

 

“Dollar Equivalent”
means, on any date of determination, in relation to an amount denominated in a
currency other than Dollars, the amount of Dollars which could be purchased
with such amount at the Spot Rate on such date.

 

“Dollar Term Borrowing”
means a borrowing consisting of simultaneous Dollar Term Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period,
made by the Dollar Term Lenders pursuant to Section 2.01(a).

 

“Dollar Term Commitment”
means, as to each Dollar Term Lender, its obligation to make a Dollar Term Loan
to the Borrower pursuant to Section 2.01(a) in a principal amount
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Dollar Term Commitment” or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.

 

“Dollar Term Facility” means,
at any time, the aggregate Dollar Term Commitments or Dollar Term Loans, as
applicable, of all Dollar Term Lenders at such time.

 

“Dollar Term Lenders”
means each of the Term Lenders (other than the Second Lien Lenders) whose Term
Commitment is denominated in Dollars, as set forth on Schedule 2.01
hereto.

 

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

 

“Domestic Subsidiary” means, at any time, each
of the direct and indirect Subsidiaries of the Borrower that is incorporated
under the laws of any state of the United States of America or the District of
Columbia.

 

“Eligible Assignee” has the meaning specified
in Section 10.08(g).

 

15

 

“Environmental Laws” means any and all
applicable Federal, state, local, and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.

 

“Environmental Liability” means any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of the Borrower,
any other Loan Party or any of their respective Subsidiaries resulting from or
based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing; provided, however
that Environmental Liability shall not include the routine costs of complying
with Environmental Laws and obtaining and complying with Environmental Permits
that are incurred in the ordinary course of business and for which financial
reserves are not accrued and Capital Expenditures are not budgeted.

 

“Environmental Permit” means any permit,
approval, identification number, license or other authorization required under
any Environmental Law.

 

“Equity Interests” means, with respect to any Person,
all of the shares of capital stock of (or other ownership or profit interests
in) such Person, all of the warrants, options or other rights for the purchase
or acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or options
for the purchase or acquisition from such Person of such shares (or such other
interests), and all of the other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are outstanding on any date of
determination.

 

“Equity Investors” means, at any time, the Sponsor and
the Management Shareholders.

 

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

 

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

 

“ERISA Event” means (a) a Reportable Event
with respect to a Pension Plan; (b) a withdrawal by any of the Loan Parties or
any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in

 

16

 

Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal
under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by
any of the Loan Parties or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of
a notice of intent to terminate, the treatment of an amendment to a Pension
Plan or to a Multiemployer Plan as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any of
the Loan Parties or any ERISA Affiliate.

 

“Eurodollar Rate” means for any Interest
Period with respect to a Eurodollar Rate Loan, a rate per annum determined by
the Administrative Agent pursuant to the following formula:

 

	
  Eurodollar Rate  =

  	
   

  	
  LIBO Rate

  
	
   

  	
  1.00 – Eurodollar Reserve Percentage

  

 

Where,

 

“LIBO Rate” means, for such Interest Period:

 

(a)                                  the
rate per annum equal to the rate determined by the Administrative Agent to be
the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or

 

(b)                                 if
the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service shall not be available, the rate per
annum equal to the rate determined by the Administrative Agent to be the
offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or

 

(c)                                  if
the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the
rate of interest at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America and
with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London interbank eurodollar
market at their request at approximately 4:00 p.m. (London time) two Business
Days prior to the first day of such Interest Period.

 

17

 

“Eurodollar Reserve Percentage” means, for any
day during any Interest Period, the reserve percentage (expressed as a decimal,
carried out to five decimal places) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by the FRB
for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).  The Eurodollar Rate for
each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.

 

“Eurodollar Rate Loan” means a Loan that bears
interest at a rate based on the Eurodollar Rate.

 

“Event of Default” has the meaning specified
in Section 8.01.

 

“Excess Cash Flow”
means, with respect to any Fiscal Year of the Borrower and its Subsidiaries on
a Consolidated basis, an amount equal to (a) Consolidated EBITDA minus
(b) without duplication,

 

(i)                                     the
aggregate amount of all Capital Expenditures made in cash by the Borrower and
its Subsidiaries during such period,

 

(ii)                                  the
aggregate amount of all Consolidated Cash Interest Expenses made by the
Borrower and its Subsidiaries during such period,

 

(iii)                               the
aggregate amount of all taxes, including cash payments for Federal, state and
other income and franchise tax liabilities paid by the Borrower and its
Subsidiaries during such period,

 

(iv)                              the
aggregate amount of all Scheduled Principal Payments made by the Borrower and
its Subsidiaries during such period,

 

(v)                                 the
aggregate amount of all Restricted Payments made in cash by the Borrower during
such period to the extent that such Restricted Payments are permitted to be
made under Section 7.06,

 

(vi)                              the
aggregate amount of all (A) voluntary prepayments of any Indebtedness (other
than the Obligations) and (B) mandatory payments made pursuant to Section 2.05(b)(i),
in each case, made in cash by the Borrower and its Subsidiaries during such
period; provided, that (1) such prepayments were not otherwise
prohibited hereunder and (2) in the case of clause (A), if such
Indebtedness consists of a revolving line of credit, the commitments under such
line of credit are permanently reduced by the amount of such prepayment,

 

(vii)                           non-recurring
cash charges to the extent included in determining Consolidated EBITDA,

 

(viii)                        management
fees permitted to be paid pursuant to Section 6.10;

 

18

 

(ix)                                proceeds
received by or on behalf of the Borrower and its Subsidiaries from insurance
claims with respect to casualty events, business interruption or product
recalls which reimburse prior business expenses,

 

(x)                                   cash
expenses or charges incurred in connection with or in contemplation of the
Nu-Gro Transaction and the UPG Acquisition or, to the extent permitted
hereunder, any Investment permitted under Section 7.05, issuance of
Equity Interests or issuance or incurrence of Indebtedness permitted by Section 7.02
(whether or not consummated),

 

(xi)                                fees
and expenses (including any applicable premium) in connection with the exchange
of the Senior Subordinated Notes for registered notes with identical terms as
contemplated by the Senior Subordinated Notes Documents or exchanges,
redemptions or refinancings permitted by this Agreement,

 

(xii)                             cash
indemnity payments received pursuant to indemnification provisions in any
agreement in connection with the Nu-Gro Acquisition, the UPG Acquisition or a
Permitted Acquisition (or in any similar agreement related to any other
acquisition consummated prior to the Initial Closing Date),

 

(xiii)                          expenses
incurred in connection with deferred compensation arrangements in connection
with the Nu-Gro Transaction and the UPG Acquisition,

 

(xiv)                         cash
from operations used to consummate a Permitted Acquisition and the UPG
Acquisition,

 

(xv)                            to
the extent added to Consolidated Net Income in determining Consolidated EBITDA,
Net Cash Proceeds of Permitted Equity Issuances,

 

(xvi)                         cash
expenditures made in respect of Swap Contracts during such period to the extent
not reflected in the computation of Consolidated EBITDA or Consolidated Cash
Interest Expense,

 

(xvii)                      to
the extent not deducted in the computation of Net Cash Proceeds in respect of
any Disposition or condemnation giving rise thereto, the amount of any
mandatory prepayment of Indebtedness (other than Indebtedness hereunder or
under any other Loan Document), together with any interest, premium or
penalties required to be paid (and actually paid) in connection therewith,

 

(xviii)                   Net
Cash Proceeds pending reinvestment in accordance with the provisions of Section 2.05(b),

 

(xix)                           cash
payments made in satisfaction of non-current liabilities, and

 

(xx)                              the
aggregate amount of all extraordinary cash charges made by the Borrower and its
Subsidiaries during such period,

 

19

 

plus
(c) the aggregate amount of all extraordinary cash gains received by the
Borrower and its Subsidiaries during such period plus/minus
(d) changes in Working Capital.

 

“Excess IPO Proceeds”
means the Net Cash Proceeds from a Qualifying IPO consummated prior to the
Maturity Date for the First Lien Term Facility that are not required to prepay
the First Lien Term Loans and Revolving Credit Loans pursuant to Section 2.05(b)(iii).

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time, and the
regulations promulgated and the rulings issued thereunder.

 

“Existing Credit Agreement” has the meaning
specified in the preliminary statements to this Agreement.

 

“Existing Guaranty”
means the Subsidiary Guaranty, dated as of April 30, 2004, from the
guarantors named therein in favor of the Secured Parties (defined therein).

 

“Existing Guaranty Supplement”
has the meaning specified in the definition of “Guaranty”.

 

“Existing Intellectual Property
Security Agreement” means the Intellectual Property Security
Agreement dated April 30, 2004, by the grantors named therein in favor of
Bank of America, as collateral agent for the Secured Parties (defined therein).

 

“Existing IPSA Supplement”
has the meaning specified in the definition of “First Lien Intellectual
Property Security Agreement”.

 

“Existing Letters of Credit” means the Letters
of Credit specified on Schedule 1.01(a).

 

“Existing Mortgage”
means the Open-End Mortgage, Security Agreement, Assignment of Rents and Leases
and Fixture Filing (Ohio), dated as of April 30, 2004, by and from Sylorr
Plant Corp. to Bank of America, in its capacity as administrative agent under
the Existing Credit Agreement.

 

“Existing Mortgage Supplement”
has the meaning specified in the definition of “First Lien Mortgages”.

 

“Existing Security Agreement”
means the Security Agreement, dated April 30, 2004, from the grantors
referred to therein to Bank of America, as collateral agent for the Secured
Parties (defined therein).

 

“Existing Security Agreement
Supplement” has the meaning specified in the definition of
“First Lien Security Agreement”.

 

“Facility” means any Term Facility, the
Revolving Credit Facility, the Swing Line Sublimit or the Letter of Credit
Sublimit, as the context may require.

 

20

 

“Fair Market Value”
means, with respect to any property or assets (including, without limitation,
any of the Equity Interests) of any Person on any date of determination, the
value of the consideration obtainable in a sale of such property or asset in
the open market on such date assuming an arm’s-length sale that has been
arranged without duress or compulsion between a willing seller and a willing
and knowledgeable purchaser in a commercially reasonable manner over a
reasonable period of time under all conditions necessary or desirable for a
fair sale (taking into account the nature and characteristics of such property
or asset); provided that the Fair Market Value of any of the property or
assets of any of the Loan Parties or any of their respective Subsidiaries shall
be determined in good faith by the board of directors (or the persons
performing similar functions) of such Loan Party or such Subsidiary, as the
case may be.

 

“Federal Funds 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 that (a)
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 (b) 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 (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.

 

“Fee Letter” means the letter agreement, dated
July 9, 2004, among the Borrower, the Administrative Agent, BAS, Bank of
America, CGMI, Citicorp North America, Inc., JPMCB and JPMorgan.

 

“First Lien Collateral Agent”
has the meaning specified in Section 9.01(c).

 

“First Lien Event of Default”
has the meaning specified in Section 8.02(b).

 

“First Lien Facility”
means the First Lien Term Facility and the Revolving Credit Facility.

 

“First Lien Intellectual Property Security
Agreement” means the Existing Intellectual Property Security Agreement,
as modified by the amendment and supplement in substantially the form of Exhibit
I-1 hereto (the “Existing
IPSA Supplement”), together with each other intellectual
property security agreement and intellectual property security agreement supplement
delivered pursuant to Sections 6.11 and 6.15 and evidencing a
first priority lien on and security interest in the Collateral thereunder, in
each case as amended.

 

“First Lien Lender”
means a Canadian Term Lender, a Dollar Term Lender or a Revolving Credit
Lender.

 

“First Lien Loans”
means the Dollar Term Loans, the Canadian Term Loans and the Revolving Credit
Loans.

 

21

 

“First Lien Mortgages”
means, collectively, the Existing Mortgage, as modified by the amendment in
substantially the form of Exhibit H-1 hereto (with such changes as may
be reasonably satisfactory to the Administrative Agent and its counsel to
account for local law matters) and covering the Borrower’s Orrville, Ohio
fertilizer plant (the “Existing
Mortgage Supplement”), (ii) the mortgage in substantially the
form of Exhibit H-2 hereto (with such changes as may be reasonably
satisfactory to the Administrative Agent and its counsel to account for local
law matters) and covering the Borrower’s Noblesville, Indiana plant (the “New Mortgage”) and
(iii) each other mortgage delivered pursuant to Section 6.11, in
each case as amended.

 

“First Lien Notes”
means the Notes issued to the First Lien Lenders in respect of the First Lien
Loans.

 

“First Lien Obligations”
means all Obligations owing to the First Lien Lenders under the Loan Documents.

 

“First Lien Security Agreement”
means the Existing Security Agreement, as modified by the amendment and
supplement in substantially the form of Exhibit G-1 hereto (the “Existing Security Agreement
Supplement”), together with each other security agreement and
security agreement supplement delivered pursuant to Sections 6.11 and 6.15
and evidencing a first priority lien on and security interest in the Collateral
thereunder, in each case as amended.

 

“First Lien Term Commitment”
means the Canadian Term Commitment and the Dollar Term Commitment.

 

“First Lien Term Facility”
means the Canadian Term Facility and the Dollar Term Facility.

 

“First Lien Term Loan”
means a Canadian Term Loan or a Dollar Term Loan.

 

“Fiscal Quarter”
means, with respect to Holdings, the Borrower or any of their respective
Subsidiaries, the period commencing January 1 in any Fiscal Year and
ending on or about the next succeeding March 31, the period commencing on
or about April 1 in any Fiscal Year and ending on or about the next
succeeding June 30, the period commencing on or about July 1 in any
Fiscal Year and ending on or about the next succeeding September 30 or the
period commencing on or about October 1 (such period, in each case,
determined in a manner consistent with prior practice) in any Fiscal Year and
ending on the next succeeding December 31, as the context may require, or,
if any such Subsidiary was not in existence on the first day of any such
period, the period commencing on the date on which such Subsidiary is
incorporated, organized, formed or otherwise created and ending on the last day
of such period.

 

“Fiscal Year” means,
with respect to Borrower or any of its Subsidiaries, the period commencing on
January 1 in any calendar year and ending on the next succeeding
December 31 or, if any such Subsidiary was not in existence on
January 1 in any calendar year, the period commencing on the date on which
such Subsidiary is incorporated, organized, formed or otherwise created and
ending on the next succeeding December 31; provided that with
respect to Nu-Gro and its Subsidiaries, for any period occurring prior to the
Initial Closing Date, “Fiscal

 

22

 

Year” shall mean each
period commencing on October 1 in any calendar year and ending on the next
succeeding September 30.

 

“Foreign Corporation”
means each Foreign Subsidiary that constitutes a “controlled foreign corporation” under Section 957 of
the Internal Revenue Code.

 

“Foreign Lender” has the meaning specified in Section 10.16(a)(i).

 

“Foreign Subsidiary”
means, at any time, each of the direct or indirect Subsidiaries of the Borrower
that is not a Domestic Subsidiary at such time.

 

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

 

“Fund” has the meaning specified in Section 10.08(g).

 

“Funded Indebtedness”
means, with respect to any Person (a) Indebtedness in respect of the Credit
Extensions, in the case of the Borrower, and (b) all other Indebtedness of the
types described in clauses (a), (c), (e) and (i) of the
definition of “Indebtedness” of such Person that by its terms matures more than
one year after the date of its creation or matures within one year from such
date but is renewable or extendible, at the option of such Person, to a date
more than one year after such date or arises under a revolving credit or
similar agreement that obligates the lender or lenders to extend credit during
a period of more than one year after such date.

 

“GAAP” means generally
accepted accounting principles in effect from time to time in the United States
of America and applied on a consistent basis or Canadian GAAP, as the context
may require or as otherwise applicable, subject,  however, to the terms of Section 1.03.

 

“Governmental Authority”
means any nation or government, any state, province, city, municipal entity or
other political subdivision thereof, and any governmental, executive,
legislative, judicial, administrative or regulatory agency, department,
authority, instrumentality, commission, board or similar body, whether federal,
state, territorial, local or foreign.

 

“Governmental Authorization”
means any authorization, approval, consent, franchise, license, covenant,
order, ruling, permit, certification, exemption, notice, declaration or similar
right, undertaking or other action of, to or by, or any filing, qualification
or registration with, any Governmental Authority.

 

“Granting Lender” has the meaning specified in
Section 10.08(h).

 

“Guarantee Supplement”
has the meaning specified in Section 8(b) of the Guaranty.

 

“Guarantee” means, as to any Person, (a) any
obligation, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or

 

23

 

indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other obligation
is assumed by such Person (or any right, contingent or otherwise, of any holder
of such Indebtedness to obtain any such Lien). 
The amount of any Guarantee shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding
meaning.

 

“Guarantors” means, collectively, (i) the
Domestic Subsidiaries of the Borrower listed on Schedule 5.02, (ii)
each other Subsidiary of Holdings or the Borrower, as the case may be, that
shall be required to execute and deliver a Guaranty or Guarantee Supplement
pursuant to Section 6.11 and (iii) upon delivery of the Holdings
Joinder Agreement and Guaranty pursuant to Section 6.15, Holdings.

 

“Guaranty” means, collectively, (i) the
Existing Guaranty, as modified by the affirmation, consent and supplement in
substantially the form of Exhibit G-1 hereto (the “Existing Guaranty Supplement”),
(ii) each other Guaranty and Guarantee Supplement delivered pursuant to Section 6.11
and (iii) the Holdings Joinder Agreement and Guaranty.

 

“Hazardous Materials” means all explosive or
radioactive substances or wastes and all toxic substances, wastes or other
pollutants regulated or characterized as “hazardous” or “toxic” pursuant to
Environmental Law or which would form the basis for liability under
Environmental Law due to their toxicity, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated
biphenyls and all other substances or wastes of any nature regulated pursuant
to any Environmental Law.

 

“Hedge Bank” means any Person that is a Lender or
an Affiliate of a Lender, in its capacity as a party to a Secured Hedge
Agreement.

 

“Holding Company Event” means the transactions occurring on
or after the Amendment and Restatement Closing Date pursuant to which Holdings
becomes the direct parent company of the Borrower.

 

“Holdings “ means a corporation or limited
liability company organized under the laws of a jurisdiction located within the
United States that directly owns 100% of the Equity Interests in the Borrower.

 

24

 

“Holdings Joinder Agreement and
Guaranty” has the meaning specified in Section 6.15.

 

“Holdings Total Leverage Ratio”
means, at any date of determination, the ratio of (a) (i) all Funded
Indebtedness of Holdings and its Subsidiaries (other than the aggregate
principal amount of all Revolving Credit Loans, Swing Line Loans and L/C
Advances outstanding on such date) outstanding on such date plus (ii)
the average daily aggregate principal amount of all Revolving Credit Loans,
Swing Line Loans and L/C Advances outstanding on the last day of each month
during the most recently completed Measurement Period divided by 12 less
(iii) the aggregate amount of all cash on the Consolidated balance sheet of
Holdings on the last day of each month during the most recent Measurement
Period divided by 12 to (b) Consolidated EBITDA of Holdings and its
Subsidiaries for the period of the four prior Fiscal Quarters ending on such
date.

 

“Honor Date” has the meaning specified in Section 2.03(c)(i).

 

“Increase Effective Date”
has the meaning specified in Section 2.14(b).

 

“Indebtedness” means,
with respect to any Person (without duplication):

 

(a)                                  all
indebtedness of such Person for borrowed money;

 

(b)                                 all
obligations of such Person for the deferred purchase price of property and
assets or services (other than trade payables or other accounts payable
incurred in the ordinary course of such Person’s business and not past due, by
their respective terms, for more than 90 days);

 

(c)                                  all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments;

 

(d)                                 all
obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property or assets acquired by
such Person (even though the rights and remedies of the seller or the lender
under such agreement in the event of default are limited to repossession or
sale of such property or assets);

 

(e)                                  all
obligations of such Person as lessee under Capitalized Leases;

 

(f)                                    all
obligations, contingent or otherwise, of such Person under acceptance, letter
of credit or similar facilities;

 

(g)                                 all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Redeemable Equity Interests in such Person
or any other Person, valued, in the case of Redeemable Preferred Interests, at
the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends;

 

25

 

(h)                                 all
obligations, contingent or otherwise, of such Person in respect of Swap
Contracts, in each case valued at the Agreement Value thereof;

 

(i)                                     all
obligations of such Person under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing, if the
transaction giving rise to such obligation is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease in
accordance with GAAP;

 

(j)                                     all
Contingent Obligations of such Person in respect of obligations of a type
described in clauses (a) through (i) above; and

 

(k)                                  all
Indebtedness referred to in clauses (a) through (j) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property or assets
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, valued at the lesser of (i) the aggregate unpaid amount
of such Indebtedness or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof and (ii) the Fair Market Value of such
property or assets.

 

The Indebtedness of any
Person shall include all obligations of the types described in clauses (a)
through (k) above of any partnership in which such Person is a general
partner or joint venture (other than a joint venture that is itself a corporation
or limited liability company) of which such Person is a joint venturer, unless
such Indebtedness is expressly made non-recourse to such Person.

 

“Indemnified Liabilities” has the meaning
specified in Section 10.06.

 

“Indemnitees” has the meaning specified in Section 10.06.

 

“Information” has the meaning specified in Section 10.09.

 

“Information Memorandum” means the information memorandum
dated July, 2004 used by the Arrangers in connection with the syndication
of the Commitments.

 

“Initial Closing Date”
means April 30, 2004.

 

“Intellectual Property Security
Agreement” means, collectively, the First Lien Intellectual
Property Agreement and the Second Lien Intellectual Property Security
Agreement.

 

“Intercreditor Agreement”
means the Intercreditor Agreement in substantially the form of Exhibit M
hereto, dated as of the date hereof among the Administrative Agent, the First
Lien Collateral Agent, the Second Lien Collateral Agent and the Borrower, as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with Section 10.01 and 10.02 hereof.

 

“Interest Coverage Ratio”
means, for any Measurement Period, the ratio of (a) Consolidated EBITDA of the
Borrower and its Subsidiaries for the period of the four prior Fiscal

 

26

 

Quarters ending on such
date to (b) Consolidated Cash Interest Expense of the Borrower and its
Subsidiaries for such period; provided that, solely for the purposes of
determining the Interest Coverage Ratio for the first three Measurement Periods
ending after the Initial Closing Date, the Consolidated Cash Interest Expense
of the Borrower and its Subsidiaries for such Measurement Period shall be equal
to (A) the Consolidated Cash Interest Expense for the completed Fiscal Quarters
since the Initial Closing Date multiplied  by (B) a fraction
the numerator of which is four and the denominator of which is equal to the
number of completed Fiscal Quarters since the Initial Closing Date, subject in
each case to the adjustments set forth on Schedule 1.01(c).

 

“Interest Payment Date”
means, (a) as to any Loan other than a Base Rate Loan, the last day of each
Interest Period applicable to such Loan and the Maturity Date of the Facility
under which such Loan was made; provided, however, that if any
Interest Period for a Eurodollar Rate Loan or Screen Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning
of such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan (including a Swing Line Loan), the last Business Day of each
March, June, September and December and the Maturity Date of the
Facility under which such Loan was made.

 

“Interest Period” means, as to each Eurodollar
Rate Loan and Screen Rate Loan, the period commencing on the date such Loan is
disbursed or converted to or continued as a Eurodollar Rate Loan or Screen Rate
Loan and ending on the date one, two, three or six months thereafter, as
selected by the Borrower in its Committed Loan Notice, or to the extent
available to all applicable Lenders, nine or twelve months thereafter; provided
that:

 

(i)                                     any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end
on the next preceding Business Day;

 

(ii)                                  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 end on the last Business Day of the
calendar month at the end of such Interest Period; and

 

(iii)                               no
Interest Period shall extend beyond the Maturity Date of the Facility under
which such Loan was made.

 

“Investment” means,
with respect to any Person, (a) any direct or indirect purchase or other
acquisition (whether for cash, securities, property, services or otherwise) by
such Person of, or of a beneficial interest in, any Equity Interests or
Indebtedness of any other Person, (b) any direct or indirect purchase or
other acquisition (whether for cash, securities, property, services or
otherwise) by such Person of all or substantially all of the property and assets
of any other Person or of any division, branch or other unit of operation of
any other Person and (c) the making of any direct or indirect loan,
advance, other extension of credit or capital contribution by such Person to,
or any other investment by such Person in, any other Person (including, without
limitation, any arrangement pursuant to which the investor incurs Indebtedness
of the types referred to in clause (j) or (k) of the
definition of “Indebtedness” set

 

27

 

forth above in this Section 1.01
in respect of such other Person).  The
amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment.

 

“IP Rights” has the meaning specified in Section 5.11.

 

“IP Security Agreement Supplement” has the
meaning specified in Section 1 of each Security Agreement.

 

“IRS” means the United States Internal Revenue
Service.

 

“ISDA Master Agreement” means the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc., as in effect from time to time.

 

“ISP” means, with
respect to any Letter of Credit, the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance).

 

“Issuer Documents”
means with respect to any Letter of Credit, the Letter of Credit Application,
and any other document, agreement and instrument entered into by the L/C Issuer
and the Borrower (or any of its Subsidiaries) or in favor the L/C Issuer and
relating to any such Letter of Credit.

 

“JPMCB” means JPMorgan
Chase Bank and its successors.

 

“JPMorgan” means J.P.
Morgan Securities Inc. and its successors.

 

“Judgment Currency”
has the meaning specified in Section 10.21.

 

“Laws” means, collectively, all applicable
international, foreign, Federal, state and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement, interpretation
or administration thereof, and all applicable administrative orders, directed
duties, licenses, authorizations and permits of, and settlement agreements
with, any Governmental Authority, in each case whether or not having the force
of law.

 

“L/C Advance” means, with respect to each
Revolving Credit Lender, such Lender’s funding of its participation in any L/C
Borrowing in accordance with its Pro Rata Share.

 

“L/C Borrowing” means an extension of credit
resulting from a drawing under any Letter of Credit which has not been
reimbursed as provided in Section 2.03(c) or refinanced as a
Revolving Credit Borrowing.

 

28

 

“L/C Cash Collateral Account”
means a blocked,
non-interest bearing deposit account at Bank of America in the name of the
First Lien Collateral Agent and under the sole dominion and control of the
First Lien Collateral Agent, and otherwise established in a manner satisfactory
to the Administrative Agent.

 

“L/C Credit Extension” means, with respect to
any Letter of Credit, the issuance thereof or extension of the expiry date
thereof, or the renewal or increase of the amount thereof.

 

“L/C Issuer” means Bank of America in its
capacity as issuer of Letters of Credit hereunder, or any successor issuer of
Letters of Credit hereunder.

 

“L/C Obligations” means, as at any date of
determination, the aggregate undrawn amount of all outstanding Letters of
Credit plus the aggregate of all Unreimbursed Amounts, including all L/C
Borrowings plus, without duplication, the aggregate amount of all
Acceptances and Deferred Payment Obligations.

 

“Lender” has the meaning specified in the
introductory paragraph hereto and, as the context requires, includes the L/C
Issuer and the Swing Line Lender.

 

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

 

“Letter of Credit” means any letter of credit
issued hereunder and shall include the Existing Letters of Credit.  A Letter of Credit may be a commercial
letter of credit or a standby letter of credit.

 

“Letter of Credit Application” means an
application and agreement for the issuance or amendment of a Letter of Credit
in the form from time to time in use by the L/C Issuer.

 

“Letter of Credit Expiration Date” means the
day that is seven days prior to the Maturity Date then in effect for the
Revolving Credit Facility (or, if such day is not a Business Day, the next
preceding Business Day).

 

“Letter of Credit Fee”
has the meaning specified in Section 2.03(i).

 

“Letter of Credit Sublimit” means an amount
equal to $30,000,000.  The Letter of
Credit Sublimit is part of, and not in addition to, the Revolving Credit
Facility.

 

“LIBO Rate” has the meaning set forth in the
definition of Eurodollar Rate.

 

“Lien” means any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge, or preference, priority or other security interest or
preferential arrangement in the nature of a security interest of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any financing lease having substantially the same economic effect
as any of the foregoing).

 

29

 

“Loan” means an extension of credit by a
Lender to the Borrower under Article II in the form of a Term Loan,
a Revolving Credit Loan or a Swing Line Loan.

 

“Loan Documents” means, collectively, (a) for
purposes of this Agreement and the Notes and any amendment, supplement or other
modification hereof or thereof and for all other purposes other than for
purposes of the Guaranty and the Collateral Documents, (i) this Agreement,
(ii) the Notes, (iii) the Guaranty, (iv) the Collateral Documents, (v) the Fee
Letter, (vi) each Issuer Document and (vii) the Intercreditor Agreement and (b)
for purposes of the Guaranty and the Collateral Documents, (i) this Agreement,
(ii) the Notes, (iii) the Guaranty, (iv) the Collateral Documents, (v)
each Issuer Document, (vi) the Fee Letter, (vii) each Secured Hedge Agreement
and (viii) the Intercreditor Agreement.

 

“Loan Parties” means, collectively, the
Borrower and each Guarantor.

 

“Management Shareholders”
means Robert Caulk, Daniel Johnston, Steven Schultz and David Jones.

 

“Master Agreement” has the meaning specified in the
definition of “Swap Contract.”

 

“Material Adverse Effect”
means a material adverse effect on (a) the business, condition (financial
or otherwise), operations, liabilities (actual or contingent), or properties of
the Borrower and its Subsidiaries, taken as a whole, (b) the rights and
remedies of the Administrative Agent or the Lenders under any of the Loan
Documents or (c) the ability of any of the Loan Parties to perform its
Obligations under any of the Loan Documents to which it is or is to be a party.

 

“Maturity Date” means, with respect to the (a)
Revolving Credit Facility, the earliest of (i) April 30, 2010,
(ii) the date of termination in whole of the Revolving Credit Commitments
pursuant to Section 2.06 or 8.02, and (iii) the
Alternate Date, (b) First Lien Term Facility, the earlier of (i) April 30,
2011, (ii) the date of termination in whole of the First Lien Term Commitments
pursuant to Section 2.06 or 8.02 and (iii) the
Alternate Date, and (c) Second Lien Facility, the earlier of (i)
October 31, 2011, (ii) the date of termination in whole of the Second Lien
Commitments pursuant to Section 2.06 or 8.02 and
(iii) the Alternate Date.

 

“Maximum Rate” has the meaning specified in Section 10.11.

 

“Measurement Period”
means, at any date of determination, the most recently completed four
consecutive Fiscal Quarters on or immediately prior to such date.

 

“Mortgages” means, collectively, the First Lien
Mortgages and the Second Lien Mortgages.

 

“Multiemployer Plan” means any employee
benefit plan of the type described in Section 4001(a)(3) of ERISA, to
which any of the Loan Parties or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.

 

30

 

“Net Cash Proceeds”
means, with respect to any Disposition of any property or assets, or the
incurrence or issuance of any Indebtedness, or the sale or issuance of any
Equity Interests in any Person, or any condemnation or casualty insurance proceeds
received by or paid to or for the account of any Person, as the case may be,
the aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred consideration, but
only as and when received) by or on behalf of such Person for its own account
in connection with any such transaction, after deducting therefrom only:

 

(a)                                  reasonable
brokerage commissions, underwriting fees and discounts, legal fees, finder’s
fees and other similar fees, costs and commissions and reasonable out-of-pocket
expenses incurred in connection therewith;

 

(b)                                 the
amount of taxes payable in connection with or as a result of such transaction
(including income taxes reasonably estimated to be actually payable within two
(2) years of the date of such transaction as a result of any gain recognized in
connection therewith);

 

(c)                                  in
the case of any Disposition of any property or asset (including any casualty or
condemnation of such asset), the outstanding principal amount of, the premium
or penalty, if any, on, and any accrued and unpaid interest on, any
Indebtedness (other than Indebtedness under or in respect of the Loan
Documents) that is secured by a Lien on the property and assets subject to such
Disposition and is repaid as a result of Disposition; and

 

(d)                                 in
the case of the Disposition of any property and assets (including any casualty
or condemnation of such asset) of the Borrower or any of its Subsidiaries , any
reserve for adjustment in respect of (x) the sale price of such asset or assets
established in accordance with GAAP and (y) any liabilities associated with
such asset or assets and retained by Holdings, the Borrower or any of their
respective Subsidiaries after such sale or other disposition thereof, including,
without limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction;

 

in each case to the
extent, but only to the extent, that the amounts so deducted are properly
attributable to such transaction or to the property or asset that is the
subject thereof and (i) in the case of clauses (a) and (c) of
this definition, are actually paid at the time of receipt of such cash or within
60 days thereafter to a Person that is not a Loan Party or Subsidiary of a Loan
Party, (ii) in the case of clause (b) of this definition, are actually
paid at the time of receipt of such cash or within 60 days thereafter to a
Person that is not a Loan Party or Subsidiary of a Loan Party or, so long as
such Person is not otherwise indemnified therefor, are reserved for in
accordance with GAAP, as in effect at the time of receipt of such cash (based
upon such Person’s reasonable estimate of such taxes), and paid to the
applicable taxation authority or other Governmental Authority on or before when
due and (iii) in the case of clause (d) of this definition, are actually
paid to the purchaser of the related property and assets within the period
specified for payment thereof in the applicable purchase agreement to a Person
that is not a Loan Party or Subsidiary of a Loan Party; provided,  however, that if, at the time any
such taxes or post-closing purchase price adjustments are actually paid or
otherwise satisfied, the reserve therefor or the amount

 

31

 

otherwise retained by
such Person or its applicable Subsidiary for the payment thereof exceeds the
amount paid or otherwise satisfied, then the amount of such excess reserve or
retained amount, as the case may be, shall constitute “Net Cash Proceeds” on and as of the date
of such payment or other satisfaction for all purposes of this Agreement and,
to the extent required under Sections 2.05(b) and 2.06(b), the Borrower
shall reduce the Commitments on such date in accordance with the terms of Section 2.06(b),
and shall prepay the Loans and cash collateralize the Letters of Credit
outstanding on such date in accordance with the terms of Section 2.05(b),
in an amount equal to the amount of such excess reserve or retained amount.

 

“New Mortgage” has the
meaning specified in the definition of “First Lien Mortgages”.

 

“Nonextension Notice Date” has the meaning
specified in Section 2.03(b)(iii).

 

“Note” means a Term Note or a Revolving Credit
Note, as the context may require.

 

“Notice of Intent to Cure”
has the meaning specified in Section 6.13(d)(ii).

 

“NPL” means the National Priorities List under
CERCLA.

 

“Nu-Gro” means The
Nu-Gro Corporation, an Ontario corporation.

 

“Nu-Gro Acquisition”
means the acquisition by the Borrower of all of the equity interests of Nu-Gro,
as consummated on April 30, 2004.

 

“Nu-Gro Acquisition Documents”
means, collectively, the Nu-Gro Arrangement Agreement and the Nu-Gro
Shareholders Agreement.

 

“Nu-Gro Arrangement Agreement”
means the Arrangement Agreement dated March 1, 2004 (as amended,
supplemented or otherwise modified from time to time) among the Borrower,
Jupiter Acquisition Corporation and Nu-Gro.

 

“Nu-Gro Shareholders Agreement” means the
letter agreement dated March 1, 2004 (as amended, supplemented or
otherwise modified from time to time) among the Borrower, Jupiter Acquisition
Corporation, Austin Beutel, Robert Beutel and Oakwest Corporation Limited.

 

“Nu-Gro Transaction” means
the Nu-Gro Acquisition and each of the related transactions entered into on
April 30, 2004, as permitted under and specified in the Existing Credit
Agreement.

 

“Obligations” means all advances to, and
debts, liabilities, obligations, covenants and duties of, any Loan Party
arising under any Loan Document or otherwise with respect to any Loan or Letter
of Credit, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or
against any Loan Party of any proceeding under any Debtor Relief Laws naming
such Person as the debtor in such proceeding,

 

32

 

regardless of whether
such interest and fees are allowed claims in such proceeding. Without limiting
the generality of the foregoing, the Obligations of the Loan Parties under the
Loan Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, Attorney Costs, indemnities and
other amounts payable by any Loan Party under any Loan Document and
(b) the obligation of any Loan Party to reimburse any amount in respect of
any of the foregoing that the Administrative Agent, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party upon the failure of such
Loan Party to pay such amount.

 

“Open Year” means,
with respect to any Person, any year for which United States federal income tax
returns have been filed by or on behalf of such Person and for which the
expiration of the applicable statute of limitations for assessment,
reassessment or collection has not occurred (whether by reason of extension or
otherwise).

 

“Operating Lease”
means, with respect to any Person, any lease (including, without limitation,
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capitalized Lease or a lease
under which such Person is the lessor.

 

“Other Taxes” has the meaning specified in Section 3.01(b).

 

“Outstanding Amount” means (i) with respect to
Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any borrowings
and prepayments or repayments of Term Loans, Revolving Credit Loans and Swing
Line Loans, as the case may be, occurring on such date; and (ii) with respect
to any L/C Obligations on any date, the amount of such L/C Obligations on such
date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such
date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.

 

“Parent” means a corporation or limited
liability company organized under the laws of a jurisdiction located within the
United States that, upon consummation of the Holding Company Event, directly
owns 100% of the Equity Interests of Holdings.

 

“Participant” has the meaning specified in Section 10.08(d).

 

“PBGC” means the Pension Benefit Guaranty
Corporation.

 

“Pension Plan” means any “employee pension
benefit plan” (as such term is defined in Section 3(2) of ERISA), other
than a Multiemployer Plan, that is subject to Title IV of ERISA and is
sponsored or maintained by any of the Loan Parties or any ERISA Affiliate or to
which any of the Loan Parties or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.

 

“Permitted Acquisition”
has the meaning specified in Section 7.05(h).

 

33

 

“Permitted Affiliate Investment”
means (a) any capital contributions to the Borrower (or upon consummation of
the Holding Company Event, Holdings) made directly or indirectly by one or more
of the Equity Investors (and, upon consummation of the Holding Company Event,
contributed by Holdings to the Borrower) or (b) the Net Cash Proceeds received
by the Borrower or Holdings, as the case may be, from the issuance and sale of
Equity Interests to one or more of the Equity Investors (and, upon consummation
of the Holding Company Event, contributed by Holdings to the Borrower); provided
that on the date on which any such Permitted Affiliate Investment is made, the
Borrower shall deliver to the Administrative Agent, on behalf of the Lenders, a
certificate of a Responsible Officer of the Borrower certifying that such
capital contributions or the Net Cash Proceeds received by the Borrower from
such issuance and sale are intended to constitute, and are to be used for, one
or more Investments to be made in accordance with the terms of Section 7.05(h),
or one or more Restricted Payments to be made in accordance with the terms of Section 7.06.

 

“Permitted Equity Issuance”
means any sale or issuance of any Equity Interests (other than Redeemable
Equity Interests) of Holdings to the extent (a) Holdings contributes the Net
Cash Proceeds thereof to the Borrower and (b) such Net Cash Proceeds are not
required to be applied to the prepayment of the Loans pursuant to Section 2.05(b).

 

“Permitted Holdco Debt”
has the meaning specified in Section 7.02(c)(ii).

 

“Permitted Liens”
means the following types of Liens (excluding any such Lien imposed pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA or
any such Lien relating to or imposed in connection with any Environmental
Action):

 

(a)                                  Liens
for taxes, assessments and governmental charges or levies to the extent not
otherwise required to be paid under Section 6.02;

 

(b)                                 Liens
imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s,
storage and repairmen’s Liens and other similar Liens arising in the ordinary
course of business and securing obligations (other than Indebtedness for
borrowed money) to the extent not otherwise required to be paid under Section 6.02;

 

(c)                                  Liens
incurred or pledges or deposits made to secure obligations incurred in the
ordinary course of business under workers’ compensation laws, unemployment
insurance or other similar social security legislation (other than in respect
of employee benefit plans subject to ERISA) or to secure public or statutory
obligations;

 

(d)                                 Liens
securing the performance of, or payment in respect of, bids, insurance
premiums, deductibles or co-insured amounts, tenders, government or utility
contracts (other than for the repayment of borrowed money), surety, stay,
customs and appeal bonds and other obligations of a similar nature incurred in
the ordinary course of business;

 

(e)                                  any
interest or title of a lessor or sublessor or a licensor and any restriction or
encumbrance to which the interest or title of such lessor, sublessor or
licensor may be subject that is incurred in the ordinary course of business;

 

34

 

(f)                                    Liens
arising out of judgments or awards that do not constitute an Event of Default
under Section 8.01(g);

 

(g)                                 Liens
in favor of customs and revenue authorities arising as a matter of law or
pursuant to a bond to secure payment of customs duties in connection with the
importation of goods;

 

(h)                                 customary
rights of setoff upon deposits of cash in favor of banks or other depository
institutions in which such cash is maintained in the ordinary course of
business;

 

(i)                                     easements,
rights-of-way, zoning restrictions and other encumbrances and survey
exceptions, minor defects or irregularities in title and other similar
restrictions on title to, or the use of, real property that do not, either
individually or in the aggregate, materially and adversely affect the use of
such real property for its intended purposes or the conduct of the business of
the Borrower and its Subsidiaries in the ordinary course and, in any case, that
were not incurred in connection with and do not secure Indebtedness or other
extensions of credit;

 

(j)                                     Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business and not prohibited by this
Agreement; and

 

(k)                                  Liens
encumbering reasonable customary initial deposits and margin deposits and
similar Liens attaching to commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business and not for speculative
purposes.

 

“Permitted Subordinated Indebtedness” means
any unsecured Indebtedness of the Borrower that (a) is expressly subordinated
to the prior payment in full in cash of the Obligations on terms and conditions
no less favorable to the Lenders than the terms and conditions of the Senior
Subordinated Notes, (b) will not mature prior to the date that is ninety-one
(91) days after the scheduled Maturity Date of the Second Lien Facility, (c)
has no scheduled amortization or payments of principal prior to the scheduled
Maturity Date of the Second Lien Facility, and (d) has covenant, default and
remedy provisions no more restrictive, and mandatory prepayment, repurchase or
redemption provisions no more onerous or expansive in scope, than those contained
in the Senior Subordinated Notes Documents, taken as a whole; provided
any such Indebtedness shall constitute Permitted Subordinated Indebtedness only
if (i) both before and after giving effect to the issuance or incurrence
thereof, no Default or Event of Default shall have occurred and be continuing,
and (ii) the Chief Financial Officer of the Borrower shall have delivered an
officer’s certificate demonstrating Pro Forma Compliance with the covenants set
forth in Section 6.14 in form and substance reasonably satisfactory
to the Administrative Agent, it being understood that any capitalized or
paid-in-kind interest or accreted principal on such Indebtedness shall not
constitute an issuance or incurrence of Indebtedness for purposes of this
proviso.

 

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

 

35

“Plan” means any “employee benefit plan” (as such term is
defined in Section 3(3) of ERISA), other than a Multiemployer Plan,
established by any of the Loan Parties or, with respect to any such plan that
is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Pledged Debt” has the meaning specified in Section 1
of each Security Agreement.

 

“Pledged Equity” has the meaning specified in Section 1
of each Security Agreement.

 

“Preferred
Interests” means, with respect to any Person, Equity Interests
issued by such Person that are entitled to a preference or priority over any
other Equity Interests issued by such Person upon any distribution of such
Person’s property and assets, whether by dividend or upon liquidation.

 

“primary
obligations” has the meaning specified in the definition of “Contingent Obligation” set forth above in
this Section 1.01.

 

“primary
obligor” has the meaning specified in the definition of “Contingent Obligation” set forth above in
this Section 1.01.

 

“Pro Forma Basis”, “Pro Forma Compliance” and “Pro Forma Effect” means, for purposes of
calculating compliance with each of the financial covenants set forth in Section 6.14
or Section 7.02(c)(ii), as applicable, in respect of a Specified
Transaction, that such Specified Transaction and the following transactions in
connection therewith shall be deemed to have occurred as of the first day of
the applicable Measurement Period:  (a)
income statement items (whether positive or negative) attributable to the
property or Person subject to such Specified Transaction, (i) in the case of a
Disposition of all or substantially all Equity Interests in any Subsidiary of
the Borrower or any division, product line, or facility used for operations of
the Borrower or any of its Subsidiaries, shall be excluded, and (ii) in the
case of a Permitted Acquisition or Investment described in the definition
of  “Specified Transaction”, shall be
included, (b) any retirement of Indebtedness, and (c) any Indebtedness incurred
or assumed by the Borrower or any of its Subsidiaries in connection therewith
and if such Indebtedness has a floating or formula rate, shall have an implied
rate of interest for the applicable period for purposes of this definition
determined by utilizing the rate which is or would be in effect with respect to
such Indebtedness as at the relevant date of determination.  Calculations made pursuant to this
definition shall be (i) determined in good faith by a Responsible Officer of
the Borrower and may include adjustments, in the reasonable determination of
the Borrower as set forth in an officer’s certificate, to reflect operating
expense reductions reasonably expected to result from any Specified Transaction
or Specified Disposition and (ii) reasonably acceptable to the Administrative
Agent.  With respect to any
determination of Pro Forma Compliance which is required to be made pursuant to
the terms of this Agreement on a date other than the last day of a Fiscal
Quarter, then such determination shall be made in respect of the Measurement
Period ending on the last day of the Fiscal Quarter most recently ended and for
which financial statements have been delivered to the Administrative Agent
pursuant to Section 6.13.

 

36

 

“Pro Rata Share” means, with respect to each Lender at
any time, a fraction (expressed as a percentage, carried out to the ninth
decimal place), the numerator of which is the amount of the Commitment(s) of
such Lender under the applicable Facility or Facilities at such time and the
denominator of which is the amount of the Aggregate Commitments under the
applicable Facility or Facilities at such time; provided that if the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8.02,
then the Pro Rata Share of each Lender shall be determined based on the Pro
Rata Share of such Lender immediately prior to such termination and after
giving effect to any subsequent assignments made pursuant to the terms
hereof.  The initial Pro Rata Share of
each Lender is set forth opposite the name of such Lender on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable.

 

“Professional
Services Agreement” means the Professional Services Agreement
dated as of January 20, 1999 by and among THL Equity Advisors IV, L.L.C.,
Thomas H. Lee Capital, L.L.C. and the Borrower, as such agreement may be
amended, supplemented or otherwise modified hereafter from time to time in
accordance with the terms thereof, but solely to the extent permitted under the
terms of the Loan Documents.

 

“Qualifying
IPO” means the issuance by Parent or Holdings of its common
Equity Interests in an underwritten primary public offering (other than a
public offering pursuant to a registration statement on Form S-8) pursuant to
an effective registration statement filed with the SEC in accordance with the
Securities Act of 1933, as amended (whether alone or in connection with a
secondary public offering).

 

“Redeemable” means
(a) any Equity Interest that the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within the control
of the issuer or (b) any Equity Interest that is redeemable at the option
of the holder, in each case, occurring earlier than 91 days following the
scheduled Maturity Date of any Facility.

 

“Reduction Amount” has the meaning set forth in Section 2.05(b)(vi).

 

“Register” has the meaning set forth in Section 10.08(c).

 

“Reportable Event” means any of the events set forth in
Section 4043(c) of ERISA, other than events for which the 30 day notice
period has been waived.

 

“Request for Credit Extension” means (a) with respect to
a Borrowing, conversion or continuation of Term Loans or Revolving Credit
Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a
Letter of Credit Application, and (c) with respect to a Swing Line Loan, a
Swing Line Loan Notice.

 

“Required
Financial Information” means, at any date of determination, the
Consolidated financial statements of Borrower and its Subsidiaries most
recently delivered to the Administrative Agent on or prior to such date pursuant
to, and satisfying all of the requirements of, Section 6.13(b) or 6.13(c)
and accompanied by the certificates and other information required to be
delivered therewith pursuant to Section 6.13(d).

 

37

 

“Required First Lien Lenders” means, as of any date of
determination, First Lien Lenders having more than 50% of the sum of the (a)
Total Outstandings under the First Lien Facility (with the aggregate amount of
each Lender’s risk participation and funded participation in L/C Obligations
and Swing Line Loans being deemed “held” by such Lender for purposes of this
definition), (b) aggregate unused First Lien Term Commitments and (c) aggregate
unused Revolving Credit Commitments; provided that the unused First Lien
Term Commitment, unused Revolving Credit Commitment of, and the portion of the
Total Outstandings under the First Lien Facility held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required First Lien Lenders.

 

“Required Lenders” means, as of any date of
determination, Lenders having more than 50% of the sum of the (a) Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations and Swing Line Loans being deemed
“held” by such Lender for purposes of this definition), (b) aggregate unused
Term Commitments and (c) aggregate unused Revolving Credit Commitments; provided
that the unused Term Commitment, unused Revolving Credit Commitment of, and the
portion of the Total Outstandings held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.

 

“Required Second Lien Lenders” means, as of any date of
determination, Second Lien Lenders having more than 50% of the sum of the (a)
Total Outstandings under the Second Lien Facility and (b) aggregate unused
Second Lien Commitments; provided that the unused Second Lien Commitment
of, and the portion of the Total Outstandings under the Second Lien Facility
held or deemed held by, any Defaulting Lender shall be excluded for purposes of
making a determination of Required Second Lien Lenders.

 

“Requirements
of Law” means, with respect to any Person, all laws,
constitutions, statutes, treaties, ordinances, rules and regulations, all
orders, writs, decrees, injunctions, judgments, determinations and awards of an
arbitrator, a court or any other Governmental Authority, and all Governmental
Authorizations, binding upon or applicable to such Person or any of its
Subsidiaries or to any of their property, assets or businesses.

 

“Responsible
Officer” means (i) the chief executive officer, the president,
the chief financial officer, the principal accounting officer, any vice
president, secretary or the treasurer (or the equivalent of any of the
foregoing) of the Borrower (or upon the consummation of the Holding Company
Event, Holdings) or any of its Subsidiaries and (ii) in the case of a Committed
Loan Notice or a Swing Line Loan Notice, any person authorized to sign such
Committed Loan Notice or Swing Line Loan Notice by the board of directors of
the Borrower.

 

“Restricted
Payment” has the meaning specified in Section 7.06.

 

“Restricted
Subsidiary” means (a) each of the wholly owned Domestic
Subsidiaries and each of the other Subsidiaries of the Borrower (or upon the
consummation of the Holding Company Event, Holdings) that is organized,
purchased or otherwise acquired after the Initial Closing Date, whether
pursuant to Section 7.05(h) or otherwise (other than any non-wholly
owned Domestic Subsidiary or any Foreign Subsidiary that is a CFC that is
organized, purchased or otherwise acquired pursuant to Section 7.05(i)),
or (b) each of the other

 

38

 

Subsidiaries of the Borrower (or upon the consummation
of the Holding Company Event, Holdings) that, at the option of the Borrower (i)
executes and delivers the Guaranty or a Guarantee Supplement and a Security
Agreement Supplement, (ii) in which 100% of the issued and outstanding Equity
Interests are pledged to the Applicable Collateral Agent, on behalf of the
Secured Parties, pursuant to the applicable Collateral Documents and (iii)
delivers such other agreements, opinions, certificates and other documents as
are required or requested under Section 6.11.

 

“Revolving Credit Borrowing” means a borrowing consisting
of simultaneous Revolving Credit Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by each of the
Revolving Credit Lenders pursuant to Section 2.01(b).

 

“Revolving Credit Commitment” means, as to each Revolving
Credit Lender, its obligation to (a) make Revolving Credit Loans to the
Borrower pursuant to Section 2.01(b), (b) purchase participations
in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 under the
caption “Revolving Credit Commitment” or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.

 

“Revolving Credit Facility” means, at any time, the
aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments
at such time.

 

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

 

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

 

“Revolving Credit Note” means a promissory note of the
Borrower payable to the order of any Revolving Credit Lender or its registered
assigns, in substantially the form of Exhibit C-2 hereto,
evidencing the aggregate indebtedness of the Borrower to such Revolving Credit
Lender resulting from the Revolving Credit Loans made by such Revolving Credit
Lender.

 

“Scheduled
Principal Payments” means, with respect to any Person for any
period, the sum of all regularly scheduled principal payments or repurchases, redemptions
or similar acquisitions for value of outstanding Indebtedness made or required
to be made during such period, including, without limitation, all repayments of
Loans outstanding hereunder pursuant to Section 2.07(a) or 2.07(b).

 

“Screen
Rate” means, with respect to any Canadian Term Loan for any
Interest Period:

 

(a)                                  the
rate per annum equal to the rate determined by the Administrative Agent to be
the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Canadian Dollars (for delivery on the
first day of such

 

39

 

Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period; or

 

(b)                                 if
the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service shall cease to be available, the rate
per annum equal to the rate determined by the Administrative Agent to be the
offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Canadian
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period.

 

“Screen
Rate Loan” means a Loan that bears interest at the Screen Rate.

 

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

 

“Second
Lien Borrowing” means a borrowing consisting of simultaneous
Second Lien Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period, made by the Second Lien Lenders pursuant to Section 2.01(c).

 

“Second
Lien Collateral Agent” has the meaning specified in Section 9.01(d).

 

“Second
Lien Commitment”
means, as to each Second Lien Lender, its obligation to make a Second Lien Loan
to the Borrower pursuant to Section 2.01(c) in a principal amount
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Second Lien Commitment” or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.

 

“Second
Lien Event of Default” has the meaning specified in Section 8.02(a).

 

“Second
Lien Facility”
means, at any time, the aggregate Second Lien Commitments or Second Lien Loans,
as applicable, of all Second Lien Lenders at such time.

 

“Second
Lien Intellectual Property Security Agreement” has the meaning
specified in Section 4.01(a)(viii).

 

“Second
Lien Lenders” means, at any time, all Lenders that have a Second
Lien Commitment or Second Lien Loans outstanding at such time.

 

“Second
Lien Loan” has the meaning specified in Section 2.01(c).

 

“Second
Lien Notes” means the Notes issued to Second Lien Lenders in
respect of the Second Lien Loans.

 

“Second
Lien Mortgages” has the meaning specified in Section 4.01(a)(vi).

 

40

 

“Second
Lien Obligations” means all Obligations owing to the Second Lien
Lenders under the Loan Documents.

 

“Second
Lien Security Agreement” has the meaning specified in Section 4.01(a)(iv).

 

“Secured Hedge Agreement” means any interest rate Swap Contract
permitted under Article VI or VII that is entered into by
and between the Borrower and any Hedge Bank.

 

“Secured Obligations” has the meaning specified in Section 2
of each Security Agreement.

 

“Secured Parties” means (a) in the case of the First Lien
Facility, collectively, the Administrative Agent, the First Lien Collateral
Agent, the First Lien Lenders, the Hedge Banks in respect of the First Lien
Obligations, each co-agent or sub-agent appointed by the Administrative Agent
(in respect of the First Lien Obligations) or the First Lien Collateral Agent
from time to time pursuant to Section 9.01(c) or Section 9.02,
and the other Persons the First Lien Obligations owing to which are or are
purported to be secured by the Collateral under the terms of the Collateral
Documents and (b) in the case of the Second Lien Facility, collectively, the
Administrative Agent, the Second Lien Collateral Agent, the Second Lien
Lenders, the Hedge Banks in respect of the Second Lien Obligations, each
co-agent or sub-agent appointed by the Administrative Agent (in respect of the
Second Lien Obligations) or the Second Lien Collateral Agent from time to time
pursuant to Section 9.01(d) or Section 9.02, and the
other Persons the Second Lien Obligations owing to which are or are purported
to be secured by the Collateral under the terms of the Collateral Documents.

 

“Security Agreement” means, collectively, the First Lien
Security Agreement and the Second Lien Security Agreement.

 

“Security Agreement Supplement” has the meaning specified in each
Security Agreement.

 

“Selling
Shareholders Agreement” means the Selling Shareholders Agreement
dated as of June 14, 2004 (as the same may be amended, supplemented or
otherwise modified from time to time) among the Borrower, UPG, Saturn
MergerCo., Inc., a Delaware corporation, and the other parties named therein.

 

“Senior
Financial Officer” means the chief financial officer, the
principal accounting officer or the treasurer of the Borrower.

 

“Senior
Subordinated Notes” means the senior unsecured subordinated
notes of the Borrower due 2009 in an aggregate principal amount of
$231,900,000.

 

“Senior
Subordinated Notes Documents” means all indentures, securities
purchase agreements, and other agreements, instruments and documents pursuant
to which the Senior Subordinated Notes have been issued or otherwise setting
forth the terms of the Senior Subordinated Notes, in each case as such
agreement, instrument or other document may be

 

41

 

amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof, but solely to the extent
permitted under the terms of the Loan Documents.

 

“Sight
Draft” means a draft drawn by a beneficiary under a Letter of
Credit and presented to the L/C Issuer, which draft is payable upon
presentation to the L/C Issuer together with the documents called for under
such Letter of Credit.

 

“Solvent”
and “Solvency”
mean, with respect to any Person on any date of determination, that, on such
date:

 

(a)                                  the
fair value of the property and assets of such Person is greater than the total
amount of liabilities (including, without limitation, contingent liabilities)
of such Person;

 

(b)                                 the
present fair salable value of the property and assets of such Person is not
less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured;

 

(c)                                  such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature; and

 

(d)                                 such
Person is not engaged in business or in a transaction, and is not about to
engage in business or in a transaction, for which such Person’s property and
assets would constitute an unreasonably small capital.

 

The fair value and the present fair salable value of
the property and assets of any such Person shall be computed taking into
account the aggregate amount of all payments in respect of reimbursement,
contribution and indemnification claims against any other Person that, in light
of the circumstances existing at such time, such Person reasonably believes in
good faith it will receive with reasonable promptness.  The amount of contingent liabilities of any
such Person at any time shall be computed as the amount that, in the 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.

 

“SPC” has the meaning specified in Section 10.08(h).

 

“Specified Equity Issuance” means the sale or issuance by
the Borrower (or upon consummation of the Holding Company Event, Holdings) of
any of its Equity Interests in a public offering or in a private placement or
sale that is underwritten, managed, arranged, placed or initially purchased by
an investment bank (it being understood that the Sponsor is not an investment
bank), which, for the avoidance of doubt, does not include the sale or issuance
of any such Equity Interests (a) to the Equity Investors, their Affiliates,
related funds and general partners, (b) to other Persons making additional
equity investments together with the Equity Investors after the Initial Closing
Date, (c) pursuant to stock option plans, (d) in connection with the cure of
any financial covenant and (e) in connection with Permitted Affiliate
Investments.

 

42

 

“Specified Transaction” means, for any applicable period,
the following transactions:  any
Permitted Acquisition or any Investment (or series of related Investments) made
pursuant to Section 7.05(h) or (i).

 

“Sponsor”
means the THL Entities and their Affiliates and related funds and general
partners.

 

“Spot
Rate” for a currency means the rate determined by the
Administrative Agent to be the rate quoted by the Person acting in such
capacity as the spot rate for the purchase by such Person of such currency with
another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided  that
the Administrative Agent may obtain such spot rate from another financial
institution designated by the Administrative Agent if the Person acting in such
capacity does not have as of the date of determination a spot buying rate for
any such currency.

 

“Subsidiary”
means, with respect to any Person, any corporation, partnership, joint venture,
limited liability company, unlimited liability company, trust or estate of
which (or in which) more than 50% of:

 

(a)                                  the
issued and outstanding shares of capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time shares of capital stock of any other class or classes of
such corporation shall or might have voting power upon the occurrence of any
contingency);

 

(b)                                 the
interest in the capital or profits of such partnership, joint venture, limited
liability company or unlimited liability company; or

 

(c)                                  the
beneficial interest in such trust or estate,

 

is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Swap Contract” means (a) any and all rate swap
transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether
or not any such transaction is governed by or subject to any master agreement,
and (b) any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any form of
master agreement published by the International Swaps and Derivatives
Association, Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any related
schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master Agreement.

 

43

 

“Swing Line” means the revolving credit facility made
available by the Swing Line Lender pursuant to Section 2.04.

 

“Swing Line Borrowing” means a borrowing of a Swing Line
Loan pursuant to Section 2.04.

 

“Swing Line Lender” means Bank of America in its capacity
as provider of Swing Line Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan” has the meaning specified in Section 2.04(a).

 

“Swing Line Loan Notice” means a notice of a Swing Line
Borrowing pursuant to Section 2.04(b), which, if in writing, shall
be substantially in the form of Exhibit B.

 

“Swing Line Sublimit” means an amount equal to the lesser
of (a) $10,000,000 and (b) the Revolving Credit Commitments.  The Swing Line Sublimit is part of, and not
in addition to, the Revolving Credit Facility Commitments.

 

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

 

“Term
Borrowing” means a Canadian Term Borrowing, a Dollar Term
Borrowing or a Second Lien Borrowing.

 

“Term Commitments” means, collectively, the Dollar Term
Commitments, the Canadian Term Commitments and the Second Lien Commitments.

 

“Term
Facility” means the Dollar Term Facility, the Canadian Term
Facility and the Second Lien Facility.

 

“Term
Lenders” means, collectively, the Dollar Term Lenders, the
Canadian Term Lenders and the Second Lien Lenders.

 

“Term Loans” means, collectively, the Dollar Term Loans,
the Canadian Term Loans and the Second Lien Loans.

 

“Term Note” means a promissory note of the Borrower
payable to the order of any Term Lender or its registered assigns, in
substantially the form of Exhibit C-1 hereto, evidencing the
aggregate indebtedness of the Borrower to such Term Lender resulting from the
Term Loans made by such Term Lender.

 

“Termination
Date” means (a) in the case of the First Lien Facility, the date
on which all of the Commitments of the First Lien Lenders have terminated or
expired, all of the First Lien Loans, L/C Obligations and other First Lien
Obligations of any Loan Party under or in respect of the Loan Documents
specified in clause (a) of the definition of “Loan Documents” (other than any such First Lien Obligations
of any of the Loan Parties under Section 3.01, 3.04, 10.05
or 10.06 (or other similar provisions of the other Loan Documents that
are specified under the terms thereof to survive the payment in full of such
other First Lien Obligations under or in respect of the Loan Documents) to the
extent no demand or claim thereunder has been made)

 

44

 

have been paid in full in cash and all Letters of
Credit have expired or been terminated or otherwise provided for in a manner
satisfactory to the L/C Issuer in full and (b) in the case of the Second Lien
Facility, the date on which all of the Second Lien Commitments of the Second
Lien Lenders have terminated or expired, all of the Second Lien Loans and other
Second Lien Obligations of any Loan Party under or in respect of the Loan
Documents specified in clause (a) of the definition of “Loan Documents” (other than any such
Second Lien Obligations of any of the Loan Parties under Section 3.01,
3.04, 10.05 or 10.06 (or other similar provisions of the
Loan Documents that are specified under the terms thereof to survive the
payment in full of such other Second Lien Obligations under or in respect of
the Loan Documents) to the extent no demand or claim thereunder has been made)
have been paid in full in cash.  Unless
otherwise specified herein, a reference to the “Termination Date” shall mean a
reference to the Termination Date in respect of the Second Lien Facility.

 

“THL
Entities” means, collectively, the Thomas H. Lee Equity Fund IV,
L.P. and the Thomas H. Lee Foreign Fund IV, L.P.

 

“Total
Leverage Ratio” means, at any date of determination, the ratio
of (a) (i) all Funded Indebtedness of the Borrower and its Subsidiaries
(other than the aggregate principal amount of all Revolving Credit Loans, Swing
Line Loans and L/C Advances outstanding on such date) outstanding on such date plus
(ii) the aggregate principal amount of all Revolving Credit Loans, Swing Line
Loans and L/C Advances outstanding on the last day of each month occurring
during the most recently completed Measurement Period divided by 12 less
(iii) the aggregate amount of all cash on the Consolidated balance sheet of the
Borrower on the last day of each month occurring during the most recent
Measurement Period divided by 12 to (b) Consolidated EBITDA of the Borrower and
its Subsidiaries for the period of the four prior Fiscal Quarters ending on such
date, subject in each case to the adjustments set forth on Schedule 1.01(c).

 

“Total Outstandings” means the aggregate Outstanding
Amount of all Loans and all L/C Obligations.

 

“Type” means, with respect to a Loan, its character as a
Base Rate Loan, a Eurodollar Rate Loan or a Screen Rate Loan.

 

“United States” and “U.S.” mean the United States of America.

 

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

 

“Unrestricted
Subsidiary” means, at any time, each of the Subsidiaries of the
Borrower that does not constitute a Restricted Subsidiary at such time.

 

“Unused
Revolving Credit Commitment” means, with respect to any of the
Revolving Credit Lenders at any time, (a) the Revolving Credit Commitment of
such Revolving Credit Lender at such time less
(b) the sum of:

 

(i)                                     the
aggregate principal amount of all Revolving Credit Loans, Swing Line Loans and
L/C Advances made (or deemed to have been made) by such Revolving Credit Lender
(in its capacity as a Lender) and outstanding at such time; and

 

45

 

(ii)                                  such
Revolving Credit Lender’s Pro Rata Share of (A) the aggregate Available
Amount of all Letters of Credit outstanding at such time, (B) the
aggregate principal amount of all L/C Advances made by the Issuing Bank (in its
capacity as the Issuing Bank) pursuant to Section 2.03(c)(i) and
outstanding at such time and (C) the aggregate principal amount of all
Swing Line Loans made by the Swing Line Bank (in its capacity as the Swing Line
Bank) pursuant to Section 2.04(a) and outstanding at such time.

 

“UPG”
has the meaning specified in the preliminary statements to this Agreement.

 

“UPG
Acquisition” has the meaning specified in the preliminary
statements to this Agreement.

 

“UPG
Acquisition Documents” means the UPG Merger Agreement and the
Selling Shareholders Agreement.

 

“UPG
Material Adverse Effect” means (a) a material adverse effect on
the business, operations (including results of operations), assets, properties
or condition (financial or otherwise) of UPG and its Subsidiaries, taken as a
whole (other than those resulting from (i) the UPG Merger Agreement, the UPG
Acquisition or the announcement thereof or (ii) changes in general economic or
political conditions or the securities markets in the United States (whether as
a result of acts of terrorism, war (whether or not declared), armed conflicts
or otherwise) or (b) an adverse effect on the rights and remedies of the
Administrative Agent or the Lenders under any of the Loan Documents.

 

“UPG
Merger Agreement” has the meaning specified in the preliminary
statements to this Agreement.

 

“U.S.
Lender” has the meaning set forth in Section 10.16(b).

 

“Withdrawal
Liability” has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.

 

“Working
Capital” means, with respect to any period, an amount equal to
the excess of Current Assets (other than cash and Cash Equivalents) over
Current Liabilities (excluding the current portion of any interest on any
Indebtedness which would otherwise be included therein).

 

1.02                           Other Interpretive Provisions.  With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

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

 

(b)                                 (i)  The words “herein,” “hereto,”
“hereof” and “hereunder” and words of similar import when used in
any Loan Document shall refer to such Loan Document as a whole and not to any
particular provision thereof.

 

46

 

(ii)                                  Article,
Section, Exhibit and Schedule references are to the Loan Document in which
such reference appears.

 

(iii)                               The
term “including” is by way of example and not limitation.

 

(iv)                              The
term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

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

 

(d)                                 Section headings
herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.

 

1.03                           Accounting Terms.  (a)  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied in a manner consistent with that used in
preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.

 

(b)                                 If
at any time any change in GAAP would affect the computation of any financial
ratio or requirement set forth in any Loan Document, and either the Borrower or
the Required Lenders shall so request, the Administrative Agent, the Lenders
and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that,
until so amended, (i) such ratio or requirement shall continue to be computed
in accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Administrative Agent and the Lenders financial statements
and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

(c)                                  With
respect to the time period commencing March 31, 2004 and ending on
June 30, 2004 (the “2004
Second Quarter”), and notwithstanding the actual accounting
periods for which any financial statements were prepared for the 2004 Second
Quarter, the 2004 Second Quarter shall be deemed to constitute one accounting
period and each of Consolidated Net Income and Consolidated EBITDA shall be
calculated with all applicable financing statements prepared for the 2004
Second Quarter taken as a whole.

 

1.04                           Rounding.  Any
financial ratios required to be maintained by the Borrower or Holdings pursuant
to this Agreement shall be calculated by dividing the appropriate component by
the other component, carrying the result to one place more than the number of
places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).

 

47

 

1.05                           References to Agreements and Laws.  Unless otherwise expressly provided herein,
(a) references to Constitutive Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not
prohibited by any Loan Document; and (b) references to any Law shall include
all statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting such Law.

 

1.06                           Times of Day. 
Unless otherwise specified, all references herein to times of day shall
be references to Eastern time (daylight or standard, as applicable).

 

1.07                           Currency Equivalents Generally.  Any amount specified in this Agreement
(other than in Articles II, IX and X) or any of the other
Loan Documents to be in a currency other than Dollars shall also include the
equivalent of such amount in Dollars, such equivalent amount to be determined
at the rate of exchange quoted by Bank of America in New York at the close of
business on the Business Day immediately preceding any date of determination
thereof, to prime banks in New York, New York for the spot purchase in the New
York foreign exchange market of such amount in such currency with U.S.
Dollars.  Any conversion of Dollars into
Canadian Dollars will be made by the Administrative Agent at the
then-applicable Spot Rate.

 

1.08                           Timing of Performance.  When the performance of any covenant, duty
or obligation is stated to be required on a day that is not a Business Day, the
date for such performance shall extend to the immediately succeeding Business
Day.

 

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01                           The Loans. 
(a)  The First Lien Term Borrowings.  Subject to the terms and conditions set
forth herein, (i) each Dollar Term Lender severally agrees to make a single
loan (consisting of a Dollar Term Loan pursuant to the Dollar Term Facility in
an amount equal to its Pro Rata Share of the Dollar Term Facility (each such loan
advanced by any Dollar Term Lender being a “Dollar Term Loan”) and (ii) each
Canadian Term Lender severally agrees to make a single loan (consisting of a
Canadian Term Loan pursuant to the Canadian Term Facility in an amount equal to
its Pro Rata Share of the Canadian Term Facility (each such loan advanced by a
Canadian Term Lender being a “Canadian Term Loan”), in each case, to the Borrower on
(i) the Initial Closing Date and/or the Amendment and Restatement Closing Date,
as applicable (as specified on Schedule 2.01 under the heading
“First Lien Term Commitments”), or (ii) if such Term Lender has increased its
Term Commitment pursuant to Section 2.14, the Increase Effective
Date.  Each such Borrowing shall be in
U.S. Dollars or Canadian Dollars, as applicable, and shall consist of First
Lien Term Loans made simultaneously by the Term Lenders in accordance with
their respective Pro Rata Share of the First Lien Term Facility.  Amounts borrowed under this Section 2.01(a)
and repaid or prepaid may not be reborrowed. 
First Lien Term Loans may be Base Rate Loans, Eurodollar Rate Loans or
Screen Rate Loans, as applicable, as further provided herein.

 

48

 

(b)                                 The
Revolving Credit Borrowings. 
Subject to the terms and conditions set forth herein, each Revolving
Credit Lender severally agrees to make loans (each such loan, a “Revolving Credit Loan”) to the Borrower from time to
time, on any Business Day during the Availability Period, in an aggregate
amount not to exceed at any time outstanding the amount of such Lender’s
Revolving Credit Commitment; provided, however, that after giving
effect to any Revolving Credit Borrowing, (i) the Total Outstandings shall not
exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of
the Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata
Share of the Outstanding Amount of all L/C Obligations, plus such
Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Revolving Credit Commitment.  Within the limits of each Lender’s Revolving Credit Commitment,
and subject to the other terms and conditions hereof, the Borrower may borrow
under this Section 2.01(b), prepay under Section 2.05,
and reborrow under this Section 2.01(b).  Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate
Loans, as further provided herein.

 

(c)                                  The
Second Lien Borrowings.  Subject to
the terms and conditions set forth herein, each Second Lien Lender severally
agrees to make a single loan (consisting of a Second Lien Loan pursuant to the
Second Lien Facility in an amount equal to its Pro Rata Share of the Second
Lien Facility (each such loan advanced by any Second Lien Lender being a “Second Lien Loan”)
to the Borrower on the Amendment and Restatement Closing Date.  Each such Borrowing shall be in U.S. Dollars
and shall consist of Second Lien Loans made simultaneously by the Second Lien
Lenders in accordance with their respective Pro Rata Share of the Second Lien
Facility.  Amounts borrowed under this Section 2.01(c)
and repaid or prepaid may not be reborrowed. 
Second Lien Loans may be Base Rate Loans or Eurodollar Rate Loans, as
further provided herein.

 

2.02                           Borrowings, Conversions and Continuations
of Loans.  (a)  Each Term Borrowing, each Revolving Credit
Borrowing, each conversion of Term Loans or Revolving Credit Loans from one
Type to the other, and each continuation of Screen Rate Loans or Eurodollar
Rate Loans shall be made upon the Borrower’s irrevocable notice to the
Administrative Agent, which may be given by telephone.  Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of Screen
Rate Loans or Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans, and (ii) one Business Day before the requested date
of any Borrowing of Base Rate Loans; provided, however, that if
the Borrower wishes to request Screen Rate Loans or Eurodollar Rate Loans
having an Interest Period of nine or twelve months in duration as provided in
the definition of “Interest Period”, the applicable notice must be received by
the Administrative Agent not later than 11:00 a.m. four Business Days prior to
the requested date of such Borrowing, conversion or continuation, whereupon the
Administrative Agent shall give prompt notice to the Lenders of such request
and determine whether the requested Interest Period is available.  Not later than 11:00 a.m., three Business
Days before the requested date of such Borrowing, conversion or continuation,
the Administrative Agent shall notify the Borrower (which notice may be by
telephone) whether or not the requested Interest Period has been consented to
by all the Lenders.  Each telephonic
notice by the Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible Officer
of the Borrower.  Each Borrowing of,
conversion to or

 

49

 

continuation of Screen Rate Loans or Eurodollar Rate Loans, as
applicable, shall be in a principal amount of (A) in the case of all Loans other
than Canadian Term Loans, $2,000,000 or a whole multiple of $1,000,000 in
excess thereof and (B) in the case of Canadian Term Loans, CD2,000,000 or a
whole multiple of CD1,000,000 in excess thereof.  Except as provided in Sections 2.03(c) and 2.04(c),
each Borrowing of or conversion to Base Rate Loans shall be in a principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice  (whether telephonic or written) shall
specify (A) whether the Borrower is requesting a Term Borrowing, a Revolving
Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans from one
Type to the other, or a continuation of Screen Rate Loans or Eurodollar Rate
Loans, (B) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (C) the principal amount of
Loans to be borrowed, converted or continued, (D) the Type of Loans to be
borrowed or to which existing Term Loans or Revolving Credit Loans are to be
converted, and (E) if applicable, the duration of the Interest Period with
respect thereto.  If the Borrower fails
to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails
to give a timely notice requesting a conversion or continuation, then the
applicable Term Loans or Revolving Credit Loans shall be made as, or converted
to, Base Rate Loans (except in the case of Canadian Term Loans, which shall
always be Screen Rate Loans, and upon such failure the Borrower shall be deemed
to have specified an Interest Period for Screen Rate Loans of one month).  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Committed
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

 

(b)                                 Following
receipt of a Committed Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Pro Rata Share of the applicable Term
Loans or Revolving Credit Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in Section 2.02(a). 
In the case of a Term Loan Borrowing or a Revolving Credit Borrowing,
each Appropriate Lender shall make the amount of its Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent’s Office not later than 1:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice.  Upon
satisfaction of the applicable conditions set forth in Section 4.02
(and, if such Borrowing is the initial Credit Extension, Section 4.01),
the Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent either by (i)
crediting the account of the Borrower on the books of Bank of America with the
amount of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower; provided, however, that if,
on the date the Committed Loan Notice with respect to such Borrowing is given
by the Borrower, there are L/C Borrowings outstanding, then the proceeds of
such Borrowing first shall be applied to the payment in full of any such L/C
Borrowings.

 

(c)                                  Except
as otherwise provided herein, a Screen Rate Loan or Eurodollar Rate Loan may be
continued or converted, as applicable, only on the last day of an Interest
Period for such Loan unless the Borrower pays the amount due under Section 3.05
in connection

 

50

 

therewith. 
During the existence of an Event of Default, no Loans may be requested
as, converted to or continued as Eurodollar Rate Loans without the consent of
the Required Lenders.

 

(d)                                 The
Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Screen Rate Loans or
Eurodollar Rate Loans upon determination of such interest rate.  The determination of the Screen Rate and the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error.  At any time that
Base Rate Loans are outstanding, the Administrative Agent shall notify the
Borrower and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

 

(e)                                  After
giving effect to all Term Borrowings, all Revolving Credit Borrowings, all
conversions of Term Loans or Revolving Credit Loans from one Type to the other,
and all continuations of Term Loans or Revolving Credit Loans as the same Type,
there shall not be more than fifteen Interest Periods in effect.

 

(f)                                    The
failure of any Lender to make the Loan to be made by it as part of any Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to make
its Loan on the date of such Borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Loan to be made by such other
Lender on the date of any Borrowing.

 

(g)                                 For
the avoidance of doubt, nothing in this Section 2.02 is intended to
result in, or permit, any redenomination of any Canadian Term Loan into a
Dollar Term Loan or of any Dollar Term Loan into a Canadian Term Loan.

 

2.03                           Letters of Credit.  (a)  The Letter of
Credit Commitment.  (i)  Subject to the terms and conditions set
forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the
other Revolving Credit Lenders set forth in this Section 2.03, (1)
from time to time on any Business Day during the period from the Initial
Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrower, and to amend or extend Letters of
Credit previously issued by it, in accordance with Section 2.03(b),
and (2) to honor drawings under the Letters of Credit; and (B) the Revolving
Credit Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower and any drawings thereunder (including Sight Drafts,
Acceptances and Deferred Payment Obligations); provided that after
giving effect to any L/C Credit Extension with respect to any Letter of Credit,
(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the
aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus
such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans
shall not exceed such Lender’s Revolving Credit Commitment, and (z) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit.  Each request by the Borrower
for the issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Borrower that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding
sentence.  Within the foregoing limits,
and subject to the terms and conditions hereof, the Borrower’s ability to
obtain Letters of Credit shall be fully revolving, and accordingly the Borrower
may, during the foregoing period, obtain Letters of Credit to replace Letters
of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be
deemed to have

 

51

 

been issued pursuant hereto, and from and after the Initial Closing
Date shall be subject to and governed by the terms and conditions hereof.

 

(ii)                                  The
L/C Issuer shall not issue any Letter of Credit if:

 

(A)                              Subject
to Section 2.03(b)(iii), the expiry date of such requested Letter
of Credit would occur more than twelve months after the date of issuance or
last extension, unless the Required Lenders have approved such expiry date; or

 

(B)                                the
expiry date of such requested Letter of Credit would occur after the Letter of
Credit Expiration Date, unless all the Revolving Credit Lenders (other than
Defaulting Lenders) have approved such expiry date.

 

(iii)                               The
L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

 

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

 

(B)                                the
issuance of such Letter of Credit would violate any Laws applicable to the L/C
Issuer or one or more policies of the L/C Issuer; or

 

(C)                                except
as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter
of Credit is in an initial face amount less than $50,000, in the case of a
commercial Letter of Credit, or $50,000, in the case of a standby Letter of
Credit, or is to be denominated in a currency other than Dollars or has
provisions that permit the stated face amount of such Letter of Credit to be
increased; or

 

(iv)                              The
L/C Issuer shall be under no obligation to amend any Letter of Credit if (A)
the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

 

(b)                                 Procedures
for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of
Credit.  (i)  Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower delivered to the
L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of the Borrower.  Such Letter of Credit
Application must be received by the L/C Issuer and the Administrative Agent not
later than 1:00 p.m. at least two

 

52

 

Business Days (or such later date and time as
the Administrative Agent and the L/C Issuer may agree in a particular instance
in their sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be.  In the
case of a request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail reasonably satisfactory to
the L/C Issuer:  (A) the proposed
issuance date of the requested Letter of Credit (which shall be a Business
Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and
address of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may reasonably
require.  In the case of a request for
an amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail reasonably satisfactory to the L/C
Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the L/C Issuer may reasonably
require.  Additionally, the Borrower
shall furnish to the L/C Issuer and the Administrative Agent such other documents
and information pertaining to such requested Letter of Credit issuance or
amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may require.

 

(ii)                                  Promptly
after receipt of any Letter of Credit Application, the L/C Issuer will confirm
with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof.  Unless the
L/C Issuer has received written notice from any Lender, the Administrative
Agent or any Loan Party, at least one Business Day prior to the requested date
of issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be
satisfied, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the
Borrower or enter into the applicable amendment, as the case may be.  Immediately upon the issuance of each Letter
of Credit, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of
such Lender’s Pro Rata Share times the amount of such Letter of Credit.

 

(iii)                               If
the Borrower so requests in any applicable Letter of Credit Application, the
L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of
Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit the
L/C Issuer to prevent any such renewal at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the beneficiary thereof not later than a day (the “Nonextension Notice Date”)
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued.  Unless otherwise
directed by the L/C Issuer, the Borrower shall not be required to make a
specific request to the L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the extension of such Letter of Credit at any
time to an expiry date not later than the Letter of Credit Expiration Date; provided,
however, that the L/C Issuer shall not permit any such extension if (A)
the L/C Issuer has determined that it would not be permitted, or would have no
obligation at such time to issue such Letter of Credit in its revised form
under the terms hereof (by reason of the provisions of Section 2.03(a)(ii)
or otherwise), or

 

53

 

(B) it has received notice (which may be by
telephone or in writing) on or before the day that is five Business Days before
the Nonextension Notice Date (1) from the Administrative Agent that the
Required Lenders have elected not to permit such extension, (2) from the
Administrative Agent, any Revolving Credit Lender or any Loan Party that one or
more of the applicable conditions specified in Section 4.02 is not
then satisfied, and in each such case directing the L/C Issuer not to permit
such extension or (3) from the Borrower directing the L/C Issuer not to permit
such extension.

 

(iv)                              Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
the L/C Issuer will also deliver to the Borrower and the Administrative Agent a
true and complete copy of such Letter of Credit or amendment.

 

(c)                                  Drawings
and Reimbursements; Funding of Participations.  (i)  Upon receipt from the
beneficiary of any Letter of Credit of any notice of a drawing under such
Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative
Agent thereof.  If the L/C Issuer
notifies the Borrower of such payment prior to 1:00 p.m. on the date of any
payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Borrower shall reimburse the L/C
Issuer through the Administrative Agent in an amount equal to the amount of
such drawing; provided, that if such notice is not provided to the
Borrower prior to 1:00 p.m. on the Honor Date, then the Borrower shall
reimburse the L/C Issuer through the Administrative Agent in an amount equal to
the amount of such drawing on the next succeeding Business Day and such
extension of time shall be reflected in computing fees in respect of any such
Letter of Credit.  If the Borrower fails
to so reimburse the L/C Issuer by such time, the Administrative Agent shall
promptly notify each Revolving Credit Lender of the Honor Date, the amount of
the unreimbursed drawing (the “Unreimbursed Amount”),
and the amount of such Revolving Credit Lender’s Pro Rata Share thereof.  In such event, the Borrower shall be deemed
to have requested a Revolving Credit Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Revolving Credit Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Committed Loan
Notice).  Any notice given by the L/C
Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i)
may be given by telephone if immediately confirmed in writing; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.

 

(ii)                                  Each
Revolving Credit Lender (including the Lender acting as L/C Issuer) shall upon
any notice pursuant to Section 2.03(c)(i) make funds available to
the Administrative Agent for the account of the L/C Issuer at the
Administrative Agent’s Office in an amount equal to its Pro Rata Share of the
Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in
such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.03(c)(iii), each Revolving Credit Lender that so makes
funds available shall be deemed to have made a Base Rate Loan to the Borrower
in such amount.  The Administrative
Agent shall remit the funds so received to the L/C Issuer.

 

(iii)                               With
respect to any Unreimbursed Amount that is not fully refinanced by a Revolving
Credit Borrowing of Base Rate Loans because the conditions set forth in Section

 

54

 

4.02 cannot be
satisfied or for any other reason, the Borrower shall be deemed to have
incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the Default
Rate.  In such event, each Revolving
Credit Lender’s payment to the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in
respect of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Lender in satisfaction of its participation obligation under
this Section 2.03.

 

(iv)                              Until
each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for
any amount drawn under any Letter of Credit, interest in respect of such
Lender’s Pro Rata Share of such amount shall be solely for the account of the
L/C Issuer.

 

(v)                                 Each
Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C
Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit,
as contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Lender may
have against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Credit Lender’s obligation
to make Revolving Credit Loans pursuant to this Section 2.03(c) is
subject to the conditions set forth in Section 4.02 (other than
delivery by the Borrower of a Committed Loan Notice ).  No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any Letter of
Credit, together with interest as provided herein.

 

(vi)                              If
any Revolving Credit Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the
time specified in Section 2.03(c)(ii), the L/C Issuer shall be
entitled to recover from such Lender (acting through the Administrative Agent),
on demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time
to time in effect.  A certificate of the
L/C Issuer submitted to any Revolving Credit Lender (through the Administrative
Agent) with respect to any amounts owing under this Section 2.03(c)(vi)
shall be conclusive absent manifest error.

 

(d)                                 Repayment
of Participations.  (i)  At any time after the L/C Issuer has made a
payment under any Letter of Credit and has received from any Revolving Credit
Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c),
if the Administrative Agent receives for the account of the L/C Issuer any
payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from the Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Pro Rata Share thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such

 

55

 

Lender’s L/C Advance was outstanding) in the
same funds as those received by the Administrative Agent.

 

(ii)                                  If
any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(i) is required to be returned
under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Revolving Credit Lender shall pay to the Administrative Agent
for the account of the L/C Issuer its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.

 

(e)                                  Obligations
Absolute.  The obligation of the
Borrower to reimburse the L/C Issuer for each drawing under each Letter of
Credit and to repay each L/C Borrowing shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

 

(i)                                     any
lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;

 

(ii)                                  the
existence of any claim, counterclaim, setoff, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of such
Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the L/C Issuer or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by such
Letter of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;

 

(iii)                               any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;

 

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

 

(v)                                 any
exchange, release or nonperfection of any Collateral, or any release or
amendment or waiver of or consent to departure from the Guaranty or any other
guarantee, for all or any of the Obligations of the Borrower in respect of such
Letter of Credit; or

 

56

 

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

 

The Borrower shall promptly examine a copy of each
Letter of Credit and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with the Borrower’s instructions or other
irregularity, the Borrower will promptly notify the L/C Issuer.  The Borrower shall be conclusively deemed to
have waived any such claim against the L/C Issuer and its correspondents unless
such notice is given as aforesaid.

 

(f)                                    Role
of L/C Issuer.  Each Lender and the
Borrower agree that, in paying any drawing under a Letter of Credit, the L/C
Issuer shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document.  None of the L/C Issuer, any
Agent-Related Person nor any of the respective correspondents, participants or
assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit
Application.  The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement.  None of the L/C Issuer, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the L/C Issuer, shall
be liable or responsible for any of the matters described in clauses (i)
through (v) of Section 2.03(e); provided, however,
that anything in such clauses to the contrary notwithstanding, the Borrower may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the L/C Issuer’s willful misconduct or gross negligence
or the L/C Issuer’s willful or grossly negligent failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit.  In furtherance and
not in limitation of the foregoing, the L/C Issuer may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and the
L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g)                                 Cash
Collateral.  Upon the request of the
Administrative Agent, (i) if the L/C Issuer has honored any full or partial
drawing request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing and the conditions set forth in Section 4.02 to a
Revolving Credit Borrowing cannot then be met, or (ii) if, as of the Letter of
Credit Expiration Date, any Letter of Credit for any reason remains outstanding
and partially or wholly undrawn, the Borrower shall immediately Cash
Collateralize the then Outstanding Amount of all L/C

 

57

 

Obligations (in an amount equal to such
Outstanding Amount determined as of the date of such L/C Borrowing or the
Letter of Credit Expiration Date, as the case may be).  Sections 2.05 and 8.02 set
forth certain additional requirements to deliver Cash Collateral
hereunder.  For purposes of this Section 2.03,
Section 2.05 and Section 8.02, “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for
the benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances (“Cash Collateral”)
or one or more backstop Letters of Credit in form and substance acceptable to,
and issued by financial institutions reasonably acceptable to, the L/C Issuer
(each such letter of credit, a “Backstop
L/C”) pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent and the L/C Issuer (which documents
are hereby consented to by the Lenders). 
Derivatives of such term have corresponding meanings.  The Borrower hereby grants to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, a security interest
in all such cash, deposit accounts and all balances therein and all proceeds of
the foregoing.  Cash Collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of
America.  If at any time the
Administrative Agent determines that any funds held as Cash Collateral are
subject to any right or claim of any Person other than the Administrative Agent
or that the total amount of such funds or Backstop L/Cs then held by the L/C
Issuer is less than the aggregate Outstanding Amount of all L/C Obligations,
the Borrower will, forthwith upon demand by the Administrative Agent, either
(x) deliver one or more additional Backstop L/Cs or (y) pay to the
Administrative Agent, as additional funds to be deposited and held in the
deposit accounts at Bank of America as aforesaid, an amount equal to the excess
of (a) such aggregate Outstanding Amount over (b) the total amount of
funds, if any, then held as Cash Collateral that the Administrative Agent
determines to be free and clear of any such right and claim or subject to such
existing Backstop L/Cs.  Upon the
drawing of any Letter of Credit for which funds are on deposit as Cash
Collateral, such funds shall be applied, to the extent permitted under applicable
law, to reimburse the L/C Issuer.  To
the extent the amount of any Cash Collateral exceeds the then Outstanding
Amount of such L/C Obligations and so long as no Event of Default has occurred
and is continuing, the excess shall be refunded to the Borrower.  To the extent that the aggregate amount
available to be drawn under any Backstop L/C exceeds the Outstanding Amount of
such L/C Obligations, then the L/C Issuer shall, upon request by the Borrower,
use reasonable efforts to cause the aggregate amount available to be drawn
under any Backstop L/C to be reduced by the amount of such excess.

 

(h)                                 Applicability
of ISP98 and UCP.  Unless otherwise
expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter of Credit),
(i) the rules of ISP shall apply to each standby Letter of Credit, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce at the time of
issuance shall apply to each commercial Letter of Credit.

 

(i)                                     Letter
of Credit Fees.  The Borrower shall
pay to the Administrative Agent for the account of each Revolving Credit Lender
in accordance with its Pro Rata Share a Letter of Credit fee (the “Letter of Credit Fee”)
for each outstanding Letter of Credit equal to the Applicable Rate for
Revolving Credit Loans which are Eurodollar Rate Loans times the daily
maximum amount available to be drawn under such Letter of Credit.  Such Letter of Credit Fees shall be (i) computed
on a quarterly basis in arrears and (ii) due and payable on the last Business
Day of each March, June, September and December, commencing with the first
such date to

 

58

 

occur after the issuance of such Letter of
Credit, on the Letter of Credit Expiration Date and thereafter on demand.  If there is any change in the Applicable
Rate specified in the preceding sentence during any quarter, the daily maximum
amount of each Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.

 

(j)                                     Fronting
Fee and Documentary and Processing Charges Payable to L/C Issuer.  The Borrower shall pay directly to the L/C
Issuer for its own account a fronting fee with respect to each Letter of Credit
equal to 0.125% per annum times the average daily maximum amount available to
be drawn under such Letter of Credit. 
Such fronting fee shall be computed on a quarterly basis in arrears.  Such fronting fee shall be due and payable
on the last Business Day of each of such March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter
on demand.  In addition, the Borrower
shall pay directly to the L/C Issuer for its own account the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as from time
to time in effect.  Such customary fees
and standard costs and charges are due and payable within five Business Days of
demand and are nonrefundable.

 

(k)                                  Conflict
with Issuer Documents.  In the event
of any conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.

 

2.04                           Swing Line Loans.  (a)  The Swing Line.  Subject to the terms and conditions set
forth herein, the Swing Line Lender agrees to make loans (each such loan, a “Swing Line Loan”) to
the Borrower from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,
when aggregated with the Pro Rata Share of the Outstanding Amount of Loans and
L/C Obligations of the Lender acting as Swing Line Lender, may exceed the
amount of such Lender’s Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of
the Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata
Share of the Outstanding Amount of all L/C Obligations, plus such
Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Revolving Credit Commitment, and provided  further
that the Borrower shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. 
Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.04,
prepay under Section 2.05, and reborrow under this Section 2.04.  Each Swing Line Loan shall be a Base Rate
Loan.  Immediately upon the making of a
Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender
a risk participation in such Swing Line Loan in an amount equal to the product
of such Lender’s Pro Rata Share times the amount of such Swing Line
Loan.

 

(b)                                 Borrowing
Procedures.  Each Swing Line
Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing
Line Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall

 

59

 

specify (i) the amount to be borrowed, which
shall be a minimum of $250,000, and (ii) the requested borrowing date, which
shall be a Business Day.  Each such
telephonic notice must be confirmed promptly by delivery to the Swing Line
Lender and the Administrative Agent of a written Swing Line Loan Notice,
appropriately completed and signed by a Responsible Officer of the
Borrower.  Promptly after receipt by the
Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line
Lender will confirm with the Administrative Agent (by telephone or in writing)
that the Administrative Agent has also received such Swing Line Loan Notice
and, if not, the Swing Line Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received notice (by telephone or
in writing) from the Administrative Agent (including at the request of any
Revolving Credit Lender) prior to 2:00 p.m. on the date of the proposed Swing
Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line
Loan as a result of the limitations set forth in the proviso to the first
sentence of Section 2.04(a), or (B) that one or more of the
applicable conditions specified in Section 4.02 is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender will, not later than 3:00 p.m. on the borrowing date specified in such
Swing Line Loan Notice, make the amount of its Swing Line Loan available to the
Borrower at its office by crediting the account of the Borrower on the books of
the Swing Line Lender in immediately available funds.

 

(c)                                  Refinancing
of Swing Line Loans.  (i)  The Swing Line Lender at any time in its
sole and absolute discretion may request, on behalf of the Borrower (which
hereby irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount
equal to such Lender’s Pro Rata Share of the amount of Swing Line Loans then
outstanding.  Such request shall be made
in writing (which written request shall be deemed to be a Committed Loan Notice
for purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
aggregate Revolving Credit Commitments and the conditions set forth in Section 4.02.  The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Committed Loan Notice promptly after delivering
such notice to the Administrative Agent. 
Each Revolving Credit Lender shall make an amount equal to its Pro Rata
Share of the amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m.
on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii),
each Revolving Credit Lender that so makes funds available shall be deemed to
have made a Base Rate Loan to the Borrower in such amount.  The Administrative Agent shall remit the
funds so received to the Swing Line Lender and the Swing Line Lender shall
apply such funds in repayment of the Swing Line Loan.

 

(ii)                                  If
for any reason any Swing Line Loan cannot be refinanced by such a Revolving
Credit Borrowing in accordance with Section 2.04(c)(i), the request
for Base Rate Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Revolving Credit Lenders fund its risk participation in the relevant Swing Line
Loan and each Revolving Credit Lender’s payment to the Administrative Agent for
the account of the Swing Line Lender pursuant to Section 2.04(c)(i)
shall be deemed payment in respect of such participation.

 

60

 

(iii)                               If
any Revolving Credit Lender fails to make available to the Administrative Agent
for the account of the Swing Line Lender any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.04(c)
by the time specified in Section 2.04(c)(i), the Swing Line Lender
shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the Federal Funds Rate from time to time in effect.  A certificate of the Swing Line Lender submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (iii) shall be conclusive absent manifest error.

 

(iv)                              Each
Revolving Credit Lender’s obligation to make Revolving Credit Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however,
that each Revolving Credit Lender’s obligation to make Revolving Credit Loans
pursuant to this Section 2.04(c) is subject to the conditions set
forth in Section 4.02 (other than delivery of a Committed Loan
Notice).  No such funding of risk
participations shall relieve or otherwise impair the obligation of the Borrower
to repay Swing Line Loans, together with interest as provided herein.

 

(d)                                 Repayment
of Participations.  (i)  At any time after any Revolving Credit
Lender has purchased and funded a risk participation in a Swing Line Loan, if
the Swing Line Lender receives any payment on account of such Swing Line Loan,
the Swing Line Lender will distribute to such Lender its Pro Rata Share of such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s risk participation was funded) in
the same funds as those received by the Swing Line Lender.

 

(ii)                                  If
any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Revolving Credit Lender shall pay to the Swing Line
Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such
demand upon the request of the Swing Line Lender.

 

(e)                                  Interest
for Account of Swing Line Lender. 
The Swing Line Lender shall be responsible for invoicing the Borrower
for interest on the Swing Line Loans. 
Until each Revolving Credit Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such
Lender’s Pro Rata Share of any Swing Line Loan, interest in respect of such Pro
Rata Share shall be solely for the account of the Swing Line Lender.

 

61

 

(f)                                    Payments
Directly to Swing Line Lender.  The
Borrower shall make all payments of principal and interest in respect of the
Swing Line Loans directly to the Swing Line Lender.

 

2.05                           Prepayments. 
(a)  Optional.  (i)  The Borrower may, upon notice
to the Administrative Agent, at any time or from time to time voluntarily
prepay Loans in whole or in part without premium or penalty (other than as
specified in Section 2.05(c)); provided that (1) except with
respect to Excess IPO Proceeds, no such prepayment shall be made in respect of
the Second Lien Loans prior to the payment in full in cash of all Obligations
in respect of the First Lien Term Loans, (2) such notice must be received by
the Administrative Agent not later than 1:00 p.m. (A) three Business Days prior
to any date of prepayment of Eurodollar Rate Loans or Screen Rate Loans and (B)
on the date of prepayment of Base Rate Loans; (3) any prepayment of Eurodollar
Rate Loans shall be in a minimum principal amount of $2,000,000 or a whole
multiple of $500,000 in excess thereof; (4) any prepayment of Canadian Term
Loans shall be in a principal amount of CD2,000,000 or a whole multiple of
CD500,000 in excess thereof; and (5) any prepayment of Base Rate Loans shall be
in a minimum principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding.  Each such notice
shall specify the date and amount of such prepayment and the Type(s) of Loans
to be prepaid.  The Administrative Agent
will promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Pro Rata Share of such prepayment.  If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein; provided
that the Borrower may rescind or postpone any such notice of prepayment if such
prepayment would have resulted from a refinancing of all the Loans and such
refinancing shall not be consummated or otherwise shall be delayed.  Any prepayment of a Eurodollar Rate Loan or
Screen Rate Loan shall be accompanied by all accrued interest thereon, together
with any additional amounts required pursuant to Section 3.05.  Each prepayment of the outstanding First
Lien Term Loans pursuant to this Section 2.05(a) shall be applied
ratably among the Dollar Term Facility and Canadian Term Facility, and to the
principal repayment installments of the First Lien Term Facility in such order
of maturity as the Borrower may direct and each such prepayment shall be paid
to the Lenders in accordance with their respective Pro Rata Shares (it being
understood that after such ratable allocation among the Dollar Term Facility
and Canadian Term Facility, an amount less than the applicable minimum amounts
specified in the first sentence of this Section 2.05(a) may be paid
to the applicable Lenders).  Each
prepayment of the outstanding Second Lien Loans pursuant to this Section 2.05(a)
shall be applied to the principal repayment installments of the Second Lien
Facility in such order of maturity as the Borrower may direct and each such
prepayment shall be paid to the Second Lien Lenders in accordance with their
respective Pro Rata Shares.

 

(ii)                                  The
Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided
that (1) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment,
and (2) any such prepayment shall be in a minimum principal amount of
$100,000.  Each such notice shall
specify the date and amount of such prepayment.  If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due
and payable on the date specified therein.

 

62

 

(b)                                 Mandatory.  (i)  Within five Business Days
after financial statements have been delivered pursuant to Section 6.13(c)
and the related Compliance Certificate has been delivered pursuant to Section 6.13(d),
the Borrower shall prepay an aggregate principal amount of Loans equal
to, if the Total Leverage Ratio for such Fiscal Year is (x) greater than
or equal to 4.00:1.00, 50%, (y) less than 4:00:1.00, but greater than or
equal to 3:00:1.00, 25% or (z) less than 3:00:1.00, 0%, in each case, of Excess
Cash Flow for the Fiscal Year covered by such financial statements, commencing
with the Fiscal Year ended December 31, 2004; provided, that Excess
Cash Flow for the Fiscal Year ended December 31, 2004 shall be calculated
on a pro forma basis as though
(1) the Nu-Gro Acquisition had occurred on the first day of such Fiscal Year
and (2) the UPG Acquisition had occurred on the Amendment and Restatement
Closing Date; provided  further that any calculation of Excess
Cash Flow by the Borrower may contain customary currency translation estimates,
and may further contain deductions in respect of withholding taxes that would
be otherwise payable if such funds were repatriated to the United States as
reasonably determined by a Responsible Officer of the Borrower.

 

(ii)                                  If,
in each case, Holdings, the Borrower or any of their respective Subsidiaries
Disposes of any property or assets in any single transaction or series of
related transactions (other than any Disposition of any property or assets
permitted by clauses (a), (b), (c), (d), (e),
(f), (h), (i), (m), (n), (r) or (s)
of Section 7.04) which in the aggregate results in the receipt by
Holdings, the Borrower or such Subsidiary of Net Cash Proceeds in excess of
$2,000,000 or receipt of condemnation or casualty proceeds in respect of any
asset or property, the Borrower shall prepay an aggregate principal amount of
Loans in an amount equal to 100% of all Net Cash Proceeds received therefrom
within two Business Days of receipt thereof by Holdings or such Subsidiary; provided,
however, that, with respect to any Net Cash Proceeds received in respect
of a Disposition or proceeds of insurance and condemnation awards described in
this Section 2.05(b)(ii), at the option of the Borrower (as elected
by the Borrower in writing to the Administrative Agent on or prior to the date
of the receipt of such proceeds or awards), and so long as no Event of Default
shall have occurred and be continuing, the Borrower may reinvest all or any
portion of such Net Cash Proceeds in assets useful in its business so long as
(x) within 360 days after the receipt of such Net Cash Proceeds, such purchase
or repair shall have been consummated or (y) if the Borrower or the relevant
Subsidiary has entered into a definitive agreement within 360 days after its
receipt of such Net Cash Proceeds to purchase or repair such assets within 180
days thereafter, within such 180 days after such receipt of Net Cash Proceeds
(in each case, as certified by the Borrower in writing to the Administrative
Agent); provided  further, however, that any Net Cash
Proceeds not subject to such definitive agreement or so reinvested shall be
immediately applied to the prepayment of the Loans as set forth in this Section 2.05;
and provided  still  further that any Net Cash Proceeds
received in connection with any Disposition of property or assets located
outside the United States may contain deductions in respect of withholding
taxes that would otherwise be payable if such funds were repatriated to the
United States.

 

(iii)                               Upon
each Specified Equity Issuance, the Borrower shall prepay an aggregate
principal amount of Loans in an amount equal to (x) if the Total Leverage
Ratio for the most recent Measurement Period ending on or prior to the date of
such sale is greater than or equal to 4.00:1.00, 50%, (y) if the Total Leverage
Ratio for the Measurement Period ending on or prior to the date of such sale is
less than 4.00:1.00 but greater than or equal to 3.00:1.00, 25% and (z) if
the Total Leverage Ratio for the most recent Measurement Period ending on or
prior to 

 

63

 

the date of such sale is less than 3.00:1.00,
0% of all Net Cash Proceeds received therefrom immediately upon receipt thereof
by the Borrower (or after the occurrence of the Holding Company Event,
Holdings).

 

(iv)                              Upon
the incurrence or issuance by Holdings, the Borrower or any of their respective
Subsidiaries of (A) any Indebtedness not expressly permitted to be
incurred or issued pursuant to Section 7.02, and (B) any Permitted
Subordinated Indebtedness permitted to be incurred pursuant to Section 7.02(a),
to the extent not permitted to be retained by the Borrower thereunder, the
Borrower shall prepay an aggregate principal amount of Loans in an amount equal
to 100% of all Net Cash Proceeds received therefrom immediately upon receipt
thereof by Holdings, the Borrower or such Subsidiary.

 

(v)                                 If
for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, the Borrower shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b)(v)
unless after the prepayment in full of the Loans and Swing Line Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.

 

(vi)                              Each
prepayment of Loans (A) pursuant to clause (ii) of this Section 2.05(b)
shall be applied, first, to the First
Lien Term Facilities, ratably among the Dollar Term Facility and the Canadian
Term Facility and (i) to the next four principal repayment installments of each
such Facility in direct order of maturity and (ii) to the remaining principal
repayment installments of each such Facility on a pro-rata basis based on the
number of remaining installments and, second, to the Revolving Credit
Facility (the amount of such prepayment of the Revolving Credit Facility, the  “Reduction Amount”),
in the manner set forth in clause (vii) of this Section 2.05(b),
and thereafter, subject to Section 2.05(c) below, to the Second
Lien Facility and (i) to next four principal repayment installments of the
Second Lien Facility in direct order of maturity and (ii) to the remaining
principal repayment installments of the Second Lien Facility on a pro-rata
basis based on the number of remaining installments of the Second Lien
Facility, and (B) pursuant to clauses (i), (iii), (iv) and
(v) of this Section 2.05(b) shall be applied, first, to the First Lien Term Facilities, ratably among the
Dollar Term Facility and the Canadian Term Facility and (i) to the next four
principal repayment installments of each such Facility in direct order of
maturity and (ii) to the remaining principal repayment installments of each
such Facility on a pro-rata basis based on the number of remaining installments
and, second, subject to Section 2.05(c) below, to the Second
Lien Facility and (i) to next four principal repayment installments of the
Second Lien Facility in direct order of maturity and (ii) to the remaining
principal repayment installments of the Second Lien Facility on a pro-rata
basis based on the number of remaining installments of the Second Lien
Facility, and thereafter, to the Revolving Credit Facility, in the manner set
forth in clause (vii) of this Section 2.05(b); and each such
prepayment shall be paid to the Lenders in accordance with their respective Pro
Rata Shares.

 

(vii)                           The
Revolving Credit Facility shall be permanently reduced by the Reduction Amount
on the date of the applicable prepayment and such prepayment shall be, first, applied to prepay L/C Borrowings outstanding at such time
until all such L/C Borrowings are paid in full, second, applied to prepay Swing Line Loans outstanding at such
time until all such Swing Line Loans are paid in full, third, applied to prepay Revolving Credit Loans outstanding

 

64

 

at such time until all such Revolving Credit
Loans are paid in full and, fourth, used to Cash Collateralize the L/C Obligations; and,
thereafter, the amount remaining, if any, after the prepayment in full of all
Loans and L/C Borrowings outstanding at such time and the L/C Obligations have
been Cash Collateralized in full may be retained by the Borrower for use in the
ordinary course of its business.  Upon
the drawing of any Letter of Credit which has been Cash Collateralized, such funds
shall be applied (without any further action by or notice to or from the
Borrower or any other Loan Party) to reimburse the L/C Issuer or the Revolving
Credit Lenders, as applicable.

 

(viii)                        Notwithstanding
any of the other provisions of Section 2.05(b)(i) through (vii),
the Borrower may, in its sole discretion, deposit the amount of any such
prepayment otherwise required to be made thereunder into a Cash Collateral
Account until the last day of any Interest Period pertaining to Loans being
prepaid, at which time the Administrative Agent shall be authorized (without
any further action by or notice to or from the Borrower or any other Loan
Party) to apply such amount to the prepayment of such Loans in accordance with
this Section 2.05(b).  Upon
the occurrence and during the continuance of any Event of Default, the
Administrative Agent shall also be authorized (without any further action by or
notice to or from the Borrower or any other Loan Party) to apply such amount to
the prepayment of the outstanding Loans in accordance with this Section 2.05(b).

 

(ix)                                Anything
contained in this Section 2.05(b) to the contrary notwithstanding,
(A) if, following the occurrence of any Disposition by any Loan Party or any of
its Subsidiaries, the Borrower is required to commit by a particular date (a “Commitment Date”) to
apply or cause its Subsidiaries to apply an amount equal to any of the proceeds
thereof in a particular manner, or to apply by a particular date (an “Application Date”) an
amount equal to any such proceeds in a particular manner, in either case in
order to excuse the Borrower from being required to make an offer to the
holders of any other debt or equity securities of the Borrower (an “Asset Sale Offer”) in connection
with such Disposition, and the Borrower shall have failed to so commit or to so
apply an amount equal to such proceeds on or prior to the applicable Commitment
Date or Application Date, as the case may be, or (B) if the Borrower at any
other time shall have failed to apply or commit or cause to be applied an
amount equal to any such proceeds, and, assuming no further application or
commitment of an amount equal to such proceeds the Borrower would otherwise be
required to make an Asset Sale Offer in respect thereof, then in either such
case the Borrower shall immediately pay or cause to be paid to the
Administrative Agent on or prior to the date on which the Borrower would be
required to make an Asset Sale Offer an amount equal to such proceeds to be
applied to the payment of the Loans and L/C Borrowings and to Cash
Collateralize the L/C Obligations in the manner set forth in Section 2.05(b)
in such amounts as shall excuse the Borrower from making any such Asset Sale
Offer.

 

(c)                                  Prepayment
Premium.  In the event that the
Second Lien Loans are prepaid or repaid in whole or in part prior to the second
anniversary of the Amendment and Restatement Closing Date pursuant to Section 2.05(a)
or (b), the Borrower shall pay to the Second Lien Lenders a prepayment
premium on the principal amount so prepaid or repaid as follows:

 

65

 

	
  Relevant Period

  	
   

  	
  Prepayment
  premium as a

  percentage of the principal amount

  so prepaid or repaid

  
	
  On or prior to the first
  anniversary of the Amendment and Restatement Closing Date

  	
   

  	
  2.0%

  
	
  On or prior to the second
  anniversary of the Amendment and Restatement Closing Date but after the first
  anniversary of the Amendment and Restatement Closing Date

  	
   

  	
  1.0%

  

 

2.06                           Termination or Reduction of
Commitments.  (a)  Optional.  The Borrower may, upon notice to the Administrative Agent,
terminate the portions of the Term Commitments, the Letter of Credit Sublimit
or the unused Revolving Credit Commitments, or from time to time permanently
reduce the portions of the Term Commitments, the Letter of Credit Sublimit or
the unused Revolving Credit Commitments; provided that (i) except to the
extent accompanied by a voluntary prepayment permitted pursuant to Section 2.05(a)(i),
no such reduction shall be permitted in respect of the Second Lien Commitments
(A) to the extent accompanied by a prepayment pursuant to clause (ii) of
Section 2.05(b), prior to the payment in full of all Obligations in
respect of the First Lien Loans and (B) to the extent accompanied by a
prepayment pursuant to clauses (i), (iii), (iv) or (v)
of Section 2.05(b), prior to the payment in full of the First Lien
Term Loans, (ii) any such notice shall be received by the Administrative Agent
not later than 1:00 p.m. one Business Day prior to the date of termination or
reduction, (iii) any such partial reduction shall be in an aggregate amount of
(A) in the case of all Loans other than Canadian Term Loans, $10,000,000 or any
whole multiple of $1,000,000 in excess thereof and (B) in the case of Canadian
Term Loans, CD10,000,000 or any whole multiple of CD1,000,000 in excess thereof
and (iv) the Borrower shall not terminate or reduce the Term Commitments, the
Letter of Credit Sublimit or the unused Revolving Credit Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Aggregate Commitments; provided that the
Borrower may rescind or postpone any such notice of termination of the
Revolving Credit Commitments if such termination would have resulted from a
refinancing of all the Loans and such refinancing shall not be consummated or
otherwise shall be delayed.

 

(b)                                 Mandatory.  (i)  The
Commitments under each Term Facility shall be automatically and
permanently reduced from time to time upon each repayment or prepayment of the
outstanding Term Loans by an amount equal to the amount by which (A) the
Commitments under such Term Facility immediately prior to such reduction
exceeds (B) the aggregate principal amount of all Term Loans outstanding under
such Facility at such time.

 

(ii)                                  The
Revolving Credit Facility shall be automatically and permanently reduced on
each date on which the prepayment of Revolving Credit Loans outstanding
thereunder is required to be made pursuant to Section 2.05(b)(i), (ii),
(iii) or (iv) by an amount equal to the applicable Reduction
Amount.

 

(iii)                               If
after giving effect to any reduction or termination of unused Revolving Credit
Commitments under this Section 2.06, the Letter of Credit Sublimit
or the Swing Line

 

66

 

Sublimit exceeds the amount of the aggregate
Revolving Credit Commitments, such Sublimit shall be automatically reduced by
the amount of such excess.

 

(c)                                  Application
of Commitment Reductions; Payment of Fees. 
The Administrative Agent will promptly notify the Lenders of any termination
or reduction of the Term Commitment, the Letter of Credit Sublimit, or the
unused Revolving Credit Commitment under this Section 2.06.  Each reduction of the Term Commitments
pursuant to Section 2.06(a) shall be applied to the applicable Term
Facility.  Upon any reduction of
Commitments under a Facility, the Commitment of each Lender under such Facility
shall be reduced by such Lender’s Pro Rata Share of the amount by which such
Facility is reduced (other than the termination of the Commitment of any Lender
as provided in Section 3.07). 
All commitment fees accrued until the effective date of any termination
of the Aggregate Commitments shall be paid on the effective date of such
termination.

 

2.07                           Repayment of Loans.  (a)  Dollar Term Loans.  The Borrower shall repay to the
Administrative Agent for the ratable account of the Dollar Term Lenders the
aggregate principal amount of all Dollar Term Loans outstanding on the
following dates in the respective amounts set forth opposite such dates (which
amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.05) or
increased as a result of any increase in the amount of Dollar Term Loans
pursuant to Section 2.14 (such increased amortization payments to
be calculated in the same manner (and on the same basis) as the schedules set
forth below for the Dollar Term Loans made as of the Initial Closing Date
and/or Amendment and Restatement Closing Date, as applicable).

 

	
  Date

  	
   

  	
  Dollar
  Term Loan Principal Amortization Amount

  	
   

  
	
  June 30,
  2004

  	
   

  	
  $

  	
  837,500

  	
   

  
	
  September 30,
  2004

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  December 31,
  2004

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  March 31,
  2005

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  June 30,
  2005

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  September 30,
  2005

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  December 31,
  2005

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  March 31,
  2006

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  June 30,
  2006

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  September 30,
  2006

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  March 31,
  2007

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  June 30,
  2007

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  September 30,
  2007

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  March 31,
  2008

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  June 30,
  2008

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  September 30,
  2008

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  March 31,
  2009

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  June 30,
  2009

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  March 31,
  2010

  	
   

  	
  $

  	
  1,272,906

  	
   

  
	
  June 30,
  2010

  	
   

  	
  $

  	
  119,971,414

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  119,971,414

  	
   

  
	
  December 31,
  2010

  	
   

  	
  $

  	
  119,971,414

  	
   

  
	
  March 31,
  2011

  	
   

  	
  $

  	
  119,971,420

  	
   

  

 

67

 

provided, however, that the
final principal repayment installment of the Dollar Term Loans shall be repaid
on the Maturity Date for the Facility under which such Loans were made and in
any event shall be in an amount equal to the aggregate principal amount of all
Dollar Term Loans outstanding on such date.

 

(b)                                 Canadian
Term Loans.  The Borrower shall
repay to the Administrative Agent for the ratable account of the Canadian Term
Lenders the aggregate principal amount of all Canadian Term Loans outstanding
on the following dates in the respective amounts set forth opposite such dates
(which amounts shall be reduced as a result of the application of prepayments
in accordance with the order of priority set forth in Section 2.05)
or increased as a result of any increase in the amount of Canadian Term Loans
pursuant to Section 2.14 (such increased amortization payments to
be calculated in the same manner (and on the same basis) as the schedules set
forth below for the Canadian Term Loans made as of the Initial Closing Date):

 

	
  Date

  	
   

  	
  Canadian
  Term Loan Principal Amortization Amount

  	
   

  
	
  June 30, 2004

  	
   

  	
  CD 169,250

  	
   

  
	
  September 30, 2004

  	
   

  	
  CD 169,250

  	
   

  
	
  December 31, 2004

  	
   

  	
  CD 169,250

  	
   

  
	
  March 31, 2005

  	
   

  	
  CD 169,250

  	
   

  
	
  June 30, 2005

  	
   

  	
  CD 169,250

  	
   

  
	
  September 30, 2005

  	
   

  	
  CD 169,250

  	
   

  
	
  December 31, 2005

  	
   

  	
  CD 169,250

  	
   

  
	
  March 31, 2006

  	
   

  	
  CD 169,250

  	
   

  
	
  June 30, 2006

  	
   

  	
  CD 169,250

  	
   

  
	
  September 30, 2006

  	
   

  	
  CD 169,250

  	
   

  
	
  December 31, 2006

  	
   

  	
  CD 169,250

  	
   

  
	
  March 31, 2007

  	
   

  	
  CD 169,250

  	
   

  
	
  June 30, 2007

  	
   

  	
  CD 169,250

  	
   

  
	
  September 30, 2007

  	
   

  	
  CD 169,250

  	
   

  
	
  December 31, 2007

  	
   

  	
  CD 169,250

  	
   

  
	
  March 31, 2008

  	
   

  	
  CD 169,250

  	
   

  
	
  June 30, 2008

  	
   

  	
  CD 169,250

  	
   

  
	
  September 30, 2008

  	
   

  	
  CD 169,250

  	
   

  
	
  December 31, 2008

  	
   

  	
  CD 169,250

  	
   

  
	
  March 31, 2009

  	
   

  	
  CD 169,250

  	
   

  
	
  June 30, 2009

  	
   

  	
  CD 169,250

  	
   

  
	
  September 30, 2009

  	
   

  	
  CD 169,250

  	
   

  
	
  December 31, 2009

  	
   

  	
  CD 169,250

  	
   

  
	
  March 31, 2010

  	
   

  	
  CD 169,250

  	
   

  
	
  June 30, 2010

  	
   

  	
  CD 15,909,500

  	
   

  
	
  September 30, 2010

  	
   

  	
  CD 15,909,500

  	
   

  
	
  December 31, 2010

  	
   

  	
  CD 15,909,500

  	
   

  
	
  March 31, 2011

  	
   

  	
  CD 15,909,500

  	
   

  

 

68

 

provided, however, that the
final principal repayment installment of the Canadian Term Loans shall be
repaid on the Maturity Date for the Facility under which such Loans were made
and in any event shall be in an amount equal to the aggregate principal amount
of all Canadian Term Loans outstanding on such date.

 

(c)                                  Second
Lien Loans.  The Borrower shall
repay to the Administrative Agent for the ratable account of the Second Lien
Lenders the aggregate principal amount of all Second Lien Loans outstanding on
the following dates in the respective amounts set forth opposite such dates
(which amounts shall be reduced as a result of the application of prepayments
in accordance with the order of priority set forth in Section 2.05)
or increased as a result of any increase in the amount of Second Lien Loans
pursuant to Section 2.14 (such increased amortization payments to
be calculated in the same manner (and on the same basis) as the schedules set
forth below for the Second Lien Loans made as of the Amendment and Restatement
Closing Date):

 

	
  Date

  	
   

  	
  Second
  Lien Loan Principal Amortization Amount 

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  69,750,000

  	
   

  

 

69

 

provided,
however, that the final principal repayment installment of the Second Lien
Loans shall be repaid on the Maturity Date for the Facility under which such
Loans were made and in any event shall be in an amount equal to the aggregate
principal amount of all Second Lien Loans outstanding on such date.

 

(d)                                 Revolving
Credit Loans.  The Borrower shall
repay to the Administrative Agent for the ratable account of the Revolving
Credit Lenders on the Maturity Date for the Revolving Credit Facility the
aggregate principal amount of all Revolving Credit Loans outstanding on such
date.

 

(e)                                  Swing
Line Loans.  The Borrower shall
repay each Swing Line Loan on the earlier to occur of (i) the date thirty days
after such Loan is made and (ii) the Maturity Date.

 

2.08                           Interest. 
(a)  Subject to the provisions of
Section 2.08(b), (i) each Eurodollar Rate Loan shall bear interest
on the outstanding principal amount thereof for each Interest Period at a rate
per annum equal to the Eurodollar Rate for such Interest Period plus the
Applicable Rate; (ii) each Canadian Term Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Screen Rate for such Interest Period plus the Applicable Rate; (iii)
each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the
Base Rate plus the Applicable Rate; and (iv) each Swing Line Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate.

 

(b)                                 (i)  While any Event of Default of the type
specified in Section 8.01(a) in respect of the First Lien Facility
or Section 8.01(f) exists, the Borrower shall pay interest on the
principal amount of all outstanding Obligations under the First Lien Facility
hereunder at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 

(ii)                                  While
any Event of Default of the type specified in Section 8.01(a) in
respect of the Second Lien Facility or Section 8.01(f) exists, the
Borrower shall pay interest on the principal amount of all outstanding
Obligations under the Second Lien Facility hereunder at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

 

70

 

(iii)                               Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

 

(c)                                  Interest
on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable
in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.

 

2.09                           Fees.  In addition
to certain fees described in Sections 2.03(i) and (j):

 

(a)                                  Commitment
Fee.  The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender in
accordance with its Pro Rata Share, a commitment fee equal to 0.50% per annum times
the actual daily amount by which the aggregate Revolving Credit Commitments
exceed the sum of (i) the Outstanding Amount of Revolving Credit Loans and (ii)
the Outstanding Amount of L/C Obligations; provided, however,
that any commitment fee accrued with respect to any of the Commitments of a
Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such commitment fee shall otherwise have been due and payable by the Borrower
prior to such time; and provided  further that no commitment fee
shall accrue on any of the Commitments of a Defaulting Lender so long as such
Lender shall be a Defaulting Lender. 
The commitment fee shall accrue at all times during the Availability
Period, including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with
the first such date to occur after the Amendment and Restatement Closing Date,
and on the Maturity Date for the Revolving Credit Facility.  The commitment fee shall be calculated
quarterly in arrears.

 

(b)                                 Other
Fees.  (i)  The Borrower
shall pay to Citicorp North America, Inc., Bank of America, JPMCB and the Administrative
Agent for their own respective accounts fees in the amounts and at the times
specified in the Fee Letter.  Such fees
shall be fully earned when paid and shall not be refundable for any reason
whatsoever.

 

(ii)                                  The
Borrower shall pay to the Agents such fees as shall have been separately agreed
upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid
and shall not be refundable for any reason whatsoever.

 

2.10                           Computation of Interest and Fees.  All computations of interest for Base Rate
Loans when the Base Rate is determined by Bank of America’s “prime rate” shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made

 

71

 

shall, subject to Section 2.12(a), bear interest for one
day.  Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

 

2.11                           Evidence of Indebtedness.  (a) 
The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and evidenced by one or more
entries in the Register maintained by the Administrative Agent, acting solely
for purposes of Treasury Regulation Section 5f.103-1(c), as agent for the
Borrower, in each case in the ordinary course of business.  The accounts or records maintained by the
Administrative Agent and each Lender shall be prima
facie evidence absent manifest error of the amount of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments
thereon.  In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts
and records of the Administrative Agent shall control in the absence of
manifest error.  Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note payable to
such Lender, which shall evidence such Lender’s Loans in addition to such
accounts or records.  Each Lender may
attach schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 In
addition to the accounts and records referred to in Section 2.11(a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records and, in the case of the Administrative
Agent, entries in the Register, evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the accounts
and records of any Lender in respect of such matters, the accounts and records
of the Administrative Agent shall control in the absence of manifest error.

 

(c)                                  Entries
made in good faith by the Administrative Agent in the Register pursuant to Section 2.11(a)
and (b), and by each Lender in its account or accounts pursuant to Section 2.11(a),
shall be prima facie evidence of
the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Lender and, in
the case of such account or accounts, such Lender, under this Agreement and the
other Loan Documents, absent manifest error; provided that the failure
of the Administrative Agent or such Lender to make an entry, or any finding
that an entry is incorrect, in the Register or such account or accounts shall
not limit or otherwise affect the obligations of the Borrower or any Loan Party
under this Agreement and the other Loan Documents.

 

2.12                           Payments Generally.  (a)  All payments to be
made by the Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. 
Except with respect to the Canadian Term Loans or as otherwise expressly
provided herein, all payments by the Borrower hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein.  All payments by the Borrower
hereunder with respect to the Canadian Term Loans shall be made to the
Administrative Agent, for the account of the respective Canadian Term Lenders

 

72

 

to which such payment is owed, at the Administrative Agent’s Office in
Canadian Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein.  The
Administrative Agent will promptly distribute to each Lender its Pro Rata Share
(or other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.

 

(b)                                 If
any payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be; provided, however, that, if such extension would
cause payment of interest on or principal of Eurodollar Rate Loans or Screen
Rate Loans to be made in the next succeeding calendar month, such payment shall
be made on the immediately preceding Business Day.

 

(c)                                  Unless
the Borrower or any Lender has notified the Administrative Agent, prior to the
date any payment is required to be made by it to the Administrative Agent
hereunder, that the Borrower or such Lender, as the case may be, will not make
such payment, the Administrative Agent may assume that the Borrower or such
Lender, as the case may be, has timely made such payment and may (but shall not
be so required to), in reliance thereon, make available a corresponding amount
to the Person entitled thereto.  If and
to the extent that such payment was not in fact made to the Administrative
Agent in immediately available funds, then:

 

(i)                                     if
the Borrower failed to make such payment, each Lender shall forthwith on demand
repay to the Administrative Agent the portion of such assumed payment that was
made available to such Lender in immediately available funds, together with
interest thereon in respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent in immediately available funds at
the Federal Funds Rate from time to time in effect; and

 

(ii)                                  if
any Lender failed to make such payment, such Lender shall forthwith on demand
pay to the Administrative Agent the amount thereof in immediately available
funds, together with interest thereon for the period from the date such amount
was made available by the Administrative Agent to the Borrower to the date such
amount is recovered by the Administrative Agent (the “Compensation Period”)
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  If such Lender pays such amount
to the Administrative Agent, then such amount shall constitute such Lender’s
Loan included in the applicable Borrowing. 
If such Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to
the Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to the
applicable Borrowing.  Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative Agent or the
Borrower may have against any Lender as a result of any default by such Lender
hereunder.

 

73

 

A notice of the Administrative Agent to any Lender or
the Borrower with respect to any amount owing under this Section 2.12(c)
shall be conclusive, absent manifest error.

 

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

 

(e)                                  The
obligations of the Lenders hereunder to make Loans and to fund participations
in Letters of Credit and Swing Line Loans are several and not joint.  The failure of any Lender to make any Loan
or to fund any such participation on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Loan or purchase its participation.

 

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

 

(g)                                 Whenever
any payment received by the Administrative Agent under this Agreement or any of
the other Loan Documents is insufficient to pay in full all amounts due and
payable to the Agents and the Lenders under or in respect of this Agreement and
the other Loan Documents on any date, such payment shall be distributed by the
Administrative Agent and applied by the Agents
and the Lenders in the order of priority set forth in Section 8.04.  If the Administrative Agent receives funds
for application to the Obligations of the Loan Parties under or in respect of
the Loan Documents under circumstances for which the Loan Documents do not
specify the manner in which such funds are to be applied, the Administrative
Agent may, but shall not be obligated to, and subject to Section 3.2
of the Intercreditor Agreement, elect to distribute such funds to each of the Lenders
in accordance with such Lender’s Pro Rata Share of the sum of (i) the
Outstanding Amount of all Loans outstanding at such time and (ii) the
Outstanding Amount of all L/C Obligations outstanding at such time, in
repayment or prepayment of such of the outstanding Loans or other Obligations
then owing to such Lender.

 

2.13                           Sharing of Payments.  Subject to the Intercreditor Agreement, if,
other than as expressly provided elsewhere herein, any Lender shall obtain on
account of the Loans made by it, or the participations in L/C Obligations or in
Swing Line Loans held by it, any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) in excess of its
ratable share (or other share contemplated hereunder) thereof, such Lender
shall immediately (a) notify the Administrative Agent of such fact, and (b)
purchase from the other Lenders such participations in the Loans made by them
and/or such subparticipations in the participations in L/C Obligations or Swing
Line Loans held by them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Loans or
such participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described
in Section 10.07 (including

 

74

 

pursuant to any settlement entered into by the purchasing Lender in its
discretion), such purchase shall to that extent be rescinded and each other
Lender shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender’s ratable share (according
to the proportion of (i) the amount of such paying Lender’s required repayment
to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered, without further interest thereon.  The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
setoff, but subject to Section 10.11) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation; provided  further
that, so long as the Obligations under the Loan Documents shall not have been
accelerated, any excess payment received by any Appropriate Lender shall be
shared on a pro rata basis only with other Appropriate Lenders.  The Administrative Agent will keep records
(which shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify
the Lenders following any such purchases or repayments.  Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right
to give all notices, requests, demands, directions and other communications
under this Agreement with respect to the portion of the Obligations purchased
to the same extent as though the purchasing Lender were the original owner of
the Obligations purchased.

 

2.14                           Increase in Commitments.  (a)  Provided there exists no Event of Default
after giving effect to any such increase, upon notice to the Administrative
Agent (which shall promptly notify the Lenders), the Borrower may from time to
time, request an increase in the Term Commitments or Revolving Credit
Commitments by an amount (for all such requests) not exceeding
$100,000,000.  Each such request shall
be for an increase of not less than $10,000,000.  At the time of sending such notice, the Borrower (in consultation
with the Administrative Agent) shall specify the time period within which each
Lender is requested to respond (which shall in no event be less than ten
Business Days from the date of delivery of such notice to the Lenders).  Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its Term
Commitment or Revolving Credit Commitment and, if so, whether by an amount
equal to, greater than, or less than its Pro Rata Share of such requested
increase.  Any Lender not responding
within such time period shall be deemed to have declined to increase its
Commitment.  The Administrative Agent
shall notify the Borrower and each Lender of the Lenders’ responses to each
request made hereunder.  To achieve the
full amount of a requested increase, the Borrower may also invite additional
Eligible Assignees to become Lenders pursuant to a joinder agreement in form
and substance reasonably satisfactory to the Administrative Agent and its
counsel.

 

(b)                                 If
the Term Commitments and/or Revolving Credit Commitments are increased in
accordance with this Section, the Administrative Agent and the Borrower shall
determine the closing date (the “Increase Effective Date”)
and the final allocation of such increase. 
The Administrative Agent shall promptly notify the Borrower and the
Lenders of the final allocation of such increase and the Increase Effective
Date.  As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate
of each Loan Party dated as of the Increase Effective Date signed by a
Responsible Officer of such Loan Party (i) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting

 

75

 

to such increase, and (ii) in the case of the
Borrower, certifying that, before and after giving effect to such increase, (A)
the representations and warranties contained in Article V and the
other Loan Documents are true and correct in all material respects on and as of
the Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct in all material respects as of such earlier date, and except that
for purposes of this Section 2.14, the representations and
warranties contained in Section 5.06 and 5.07 shall be
deemed to refer to the most recent statements furnished pursuant to subsections
(b) and (c), respectively, of Section 6.13, and (B) no
Event of Default exists, after giving effect to any such increase.

 

(c)                                  To
the extent the Commitment being increased on the relevant Increase Effective
Date is a Term Commitment, then each of the Lenders having a Term Loan prior to
such Increase Effective Date (the “Pre-Increase
Term Lenders”) shall assign to any lender making an additional
Term Loan on the Increase Effective Date (the “Post-Increase Term Lenders”), and such
Post-Increase Term Lenders shall purchase from each Pre-Increase Term Lender,
at the principal amount thereof, such interests in the Term Loans outstanding
on such Increase Effective Date as shall be necessary in order that, after
giving effect to all such assignments and purchases, such Term Loans will be
held by Pre-Increase Term Lenders and Post-Increase Term Lenders ratably in
accordance with the Outstanding Amount of Term Loans and increased Term
Commitments after giving effect to such increased Term Commitments.  To the extent the Commitment being increased
on the relevant Increase Effective Date is a Revolving Credit Commitment, then
each of the Lenders having a Revolving Credit Commitment prior to such Increase
Effective Date (the “Pre-Increase
Revolving Lenders”) shall assign to any lender which is
acquiring a new or additional Revolving Credit Commitment on the Increase
Effective Date (the “Post-Increase
Revolving Lenders”), and such Post-Increase Revolving Lenders
shall purchase from each Pre-Increase Revolving Lenders, at the principal
amount thereof, such interests in the Revolving Loans and participation
interests in L/C Obligations and Swing Line Loans outstanding on such Increase
Effective Date as shall be necessary in order that, after giving effect to all
such assignments and purchases, such Revolving Loans and participation
interests in L/C Obligations and Swing Line Loans will be held by Pre-Increase
Revolving Lenders and Post-Increase Revolving Lenders ratably in accordance
with their Revolving Credit Commitments after giving effect to such increased
Revolving Credit Commitments.

 

(d)                                 This
Section shall supersede any provisions in Sections 2.13 or 10.01
to the contrary.

 

2.15                           Use of Proceeds. 
The proceeds of the Loans shall be available, and the Borrower hereby
agrees that it shall use such proceeds, solely (a) to finance in part the UPG
Acquisition, (b) to pay certain fees and expenses incurred in connection with
the UPG Acquisition, (c) to refinance certain existing Indebtedness of UPG and
its Subsidiaries and (d) to provide working capital to, and for other general
purposes of, the Borrower and its Subsidiaries not otherwise prohibited under
the terms of the Loan Documents.

 

76

 

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01                           Taxes.  (a)  Except as provided in this Section 3.01,
any and all payments by the Borrower to or for the account of any Agent or any
Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities  (including additions
to tax, penalties and interest) with respect thereto, excluding, in the
case of each Agent and each Lender, taxes imposed on or measured by its overall
net income or overall gross income (including branch profits), and franchise
(and similar) taxes imposed on it in lieu of net income taxes, by the
jurisdiction (or any political subdivision thereof) under the Laws of which
such Agent or such Lender, as the case may be, is organized, has its principal
place of business or maintains a Lending Office, and all liabilities (including
additions to tax, penalties and interest) with respect thereto (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as “Taxes”).  If the Borrower shall be required by any
Laws to deduct any Taxes from or in respect of any sum payable under any Loan
Document to any Agent or any Lender, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), each of such Agent
and such Lender receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv)
within 30 days after the date of such payment, the Borrower shall furnish to
such Agent or Lender (as the case may be) the original or a certified copy of a
receipt evidencing payment thereof to the extent such a receipt is issued
therefor, or other written proof of payment thereof that is reasonably
satisfactory to the Administrative Agent.

 

(b)                                 In
addition, the Borrower agrees to pay any and all present or future stamp, court
or documentary taxes and any other excise, property, intangible or mortgage
recording taxes or charges or similar levies which arise from any payment made
under any Loan Document or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as “Other Taxes”).

 

(c)                                  The
Borrower agrees to indemnify each Agent and each Lender for (i) the full amount
of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section) paid by
such Agent and such Lender and (ii) any liability (including additions to tax,
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority; provided
such Agent or Lender, as the case may be, provides the Borrower with a written
statement thereof setting forth in reasonable detail the basis and calculation
of such amounts.  Payment under this Section 3.01(c)
shall be made within 30 days after the date such Lender or such Agent makes a
demand therefor.

 

(d)                                 The Borrower shall not be required pursuant
to this Section 3.01 to pay any additional amount to, or to
indemnify, any Lender or Agent,
as the case may be, to the extent that such Lender or such Agent becomes
subject to Taxes subsequent to the Initial Closing Date (or, if later, the date
such Lender or Agent becomes a party to this Agreement) as a result of a change
in the place of organization of such Lender or Agent or a change in the lending
office of such Lender, except to the extent that any such change is
requested or required by the Borrower

 

77

 

(and provided, that nothing in this clause (d) shall be
construed as relieving the Borrower from any obligation to make such payments
or indemnification in the event of a change that is a change in Law).

 

(e)                                  If
the forms provided by a Lender or an Agent pursuant to Section 10.16(a)
at the time such Lender or such Agent, as the case may be, first becomes a
party to this Agreement at the Borrower’s discretion pursuant to Section 10.08(g)
indicate a United States withholding tax rate in excess of zero (the “Actual Rate”),
withholding tax in excess of the Actual Rate shall be considered excluded from Taxes
unless and until such Lender or Agent, as the case may be, provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for
periods governed by such forms; provided, however, that, if at
the date of the Assignment and Acceptance pursuant to which a Lender becomes a
party to this Agreement, the Lender assignor was entitled to payments under clause (a)
of this Section 3.01 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term
Taxes shall include (in addition to withholding taxes that may be imposed in
the future or other amounts otherwise includable in Taxes) United States
withholding tax, if any, applicable with respect to the Lender assignee on such
date.

 

(f)                                    If any Lender or Agent determines that it has
received a refund in respect of any Taxes or Other Taxes as to which indemnification or additional amounts have been paid to it
by the Borrower pursuant to this Section 3.01, it shall promptly
remit such refund (including any interest included in such refund) to the
Borrower (to the extent that it determines that it can do so without
prejudice to the retention of the refund),
net of all out-of-pocket expenses of the Lender or Agent, as the case may be; provided,
however, that the Borrower, upon the request of the Lender or Agent, as
the case may be, agrees promptly to return such refund to such party in the
event such party is required to repay such refund to the relevant taxing
authority.  Such Lender or Agent,
as the case may be, shall, at the Borrower’s request, provide the Borrower with
a copy of any notice of assessment or other evidence of the requirement to
repay such refund received from the relevant taxing authority (provided,
that such Lender or Agent may delete any information therein that such Lender
or Agent deems confidential).  Nothing
herein contained shall interfere with the right of a Lender or Agent to arrange
its tax affairs in whatever manner it thinks fit nor oblige any Lender or Agent
to claim any tax refund or to disclose any information relating to its tax
affairs or any computations in respect thereof or require any Lender or Agent
to do anything that would prejudice its ability to benefit from any other
refunds, credits, reliefs, remissions or repayments to which it may be
entitled.

 

(g)                                 Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 3.01(a) or (c)
with respect to such Lender it will, if requested by the Borrower, use commercially reasonable efforts
(subject to such Lender’s overall internal policies of general application and
legal and regulatory restrictions) to avoid the consequences of such event,
including to designate another Lending Office for any Loan or Letter of Credit
affected by such event; provided, that such efforts are made on terms
that, in the reasonable judgment of such Lender, cause such Lender and its
Lending Office(s) to suffer no material economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 3.01(g)
shall affect or postpone any of the Obligations of the Borrower or the rights
of such Lender pursuant to Sections 3.01(a) and (c).

 

78

 

(h)                                 Notwithstanding
any provision contained herein to the contrary, any indemnity with respect to
taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or
similar charges imposed by any Governmental Authority, or any liabilities with
respect thereto, shall be governed solely and exclusively by this Section 3.01
and Section 10.16.

 

3.02                           Illegality. 
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans or
Screen Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate or Screen Rate, then, on notice thereof by such Lender to the
Borrower through the Administrative Agent, any obligation of such Lender to
make or continue Eurodollar Rate Loans or Screen Rate Loans or to convert Base
Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender
notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower shall, upon demand from
such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Eurodollar Rate Loans or Screen Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans or Screen Rate Loans.  Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.  Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.

 

3.03                           Inability to Determine Rates.  If the Required Lenders determine that for
any reason adequate and reasonable means do not exist for determining the LIBO
Rate or Screen Rate, as applicable, for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan or Screen Rate Loan, or that the
LIBO Rate or Screen Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan or Screen Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, or that Dollar
deposits are not being offered to banks in the London interbank eurodollar or
Canadian Dollar market for the applicable amount and the Interest Period of
such Eurodollar Rate Loan or Screen Rate Loan, the Administrative Agent will
promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Rate Loans or Screen Rate Loans, as applicable, shall be suspended
until the Administrative Agent (upon the instruction of the Required Lenders)
revokes such notice.  Upon receipt of
such notice, the Borrower may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or Screen Rate Loans or,
failing that, with respect to Eurodollar Rate Loans, will be deemed to have
converted such request into a request for a Committed Borrowing of Base Rate
Loans in the amount specified therein.

 

3.04                           Increased Cost and Reduced Return;
Capital Adequacy.  (a)  If any Lender determines that as a result of
the introduction of or any change in or in the interpretation of any Law, in
each case after the date hereof, or such Lender’s compliance therewith, there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans or Screen Rate Loan (as the case
may be) or issuing or participating in Letters of Credit, or a reduction in the
amount received or receivable by such Lender in

 

79

 

connection with any of the foregoing (excluding for purposes of this Section 3.04(a)
any such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income
(including branch profits), and franchise (and similar) taxes imposed in lieu
of net income taxes, by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which such Lender is
organized or maintains a Lending Office, and (iii) reserve requirements
utilized in the determination of the Eurodollar Rate or Screen Rate), then from
time to time upon demand of such Lender setting forth in reasonable detail such
increased costs (with a copy of such demand to the Administrative Agent given
in accordance with Section 3.06), the Borrower shall pay to such
Lender such additional amounts as will compensate such Lender for such
increased cost or reduction.

 

(b)                                 If
any Lender determines that the introduction of any Law regarding capital
adequacy or any change therein or in the interpretation thereof, in each case
after the date hereof, or compliance by such Lender (or its Lending Office)
therewith, has the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender’s obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender’s desired return on capital), then
from time to time upon demand of such Lender setting forth in reasonable detail
the charge and the calculation of such reduced rate of return (with a copy of
such demand to the Administrative Agent given in accordance with Section 3.06),
the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such reduction.

 

3.05                           Compensation for Losses.  Upon demand of any Lender (with a copy to
the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

 

(a)                                  any
continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

 

(b)                                 any
failure by the Borrower (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue or convert any Loan other than a Base
Rate Loan on the date or in the amount notified by the Borrower; or

 

(c)                                  any
assignment of a Eurodollar Rate Loan or Screen Rate Loan on a day other than
the last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 3.07;

 

including any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were
obtained.

 

For purposes of calculating amounts payable by the
Borrower to the Lenders under this Section 3.05, each Lender shall
be deemed to have funded each Eurodollar Rate Loan or Screen Rate Loan, as
applicable, made by it at the rate used in determining the Eurodollar Rate or
Screen

 

80

 

Rate for such Loan by a matching deposit or other
borrowing in the London interbank eurodollar market or Canadian Dollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan or Screen Rate Loan was in fact so funded.

 

3.06                           Matters Applicable to all Requests for
Compensation.  (a)  A certificate of any Agent or any Lender
claiming compensation under this Article III and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error.  In
determining such amount, such Agent or such Lender may use any reasonable
averaging and attribution methods.

 

(b)                                 With
respect to any Lender’s claim for compensation under Section 3.01,
3.02 or 3.04, the Borrower shall not be required to compensate such
Lender for any amount incurred more than one hundred and eighty (180) days
prior to the date that such Lender notifies the Borrower of the event that
gives rise to such claim; provided, that, if the circumstance giving
rise to such claim is retroactive, then such 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.  If any Lender requests compensation by the
Borrower under Section 3.04, the Borrower may, by notice to such
Lender (with a copy to the Administrative Agent), suspend the obligation of
such Lender to make or continue from one Interest Period to another Eurodollar
Rate Loans or Screen Rate Loans, or to convert Base Rate Loans into Eurodollar
Rate Loans, until the event or condition giving rise to such request ceases to
be in effect (in which case the provisions of Section 3.06(c) shall
be applicable); provided, that such suspension shall not affect the
right of such Lender to receive the compensation so requested.

 

(c)                                  If
the obligation of any Lender to make or continue from one Interest Period to
another any Eurodollar Rate Loan or Screen Rate Loan, or to convert Base Rate
Loans into Eurodollar Rate Loans shall be suspended pursuant to Section 3.06(b)
hereof, such Lender’s Eurodollar Rate Loans shall be automatically converted
into Base Rate Loans on the last day(s) of the then current Interest Period(s)
for such Eurodollar Rate Loans (or, in the case of an immediate conversion
required by Section 3.02, on such earlier date as required by Law)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.01, 3.02, 3.03
or 3.04 hereof that gave rise to such conversion no longer exist:

 

(i)                                     to
the extent that such Lender’s Eurodollar Rate Loans have been so converted, all
payments and prepayments of principal that would otherwise be applied to such
Lender’s Eurodollar Rate Loans shall be applied instead to its Base Rate Loans;
and

 

(ii)                                  all
Loans that would otherwise be made or continued from one Interest Period to
another by such Lender as Eurodollar Rate Loans shall be made or continued
instead as Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be converted into Eurodollar Rate Loans shall remain as Base Rate
Loans.

 

(d)                                 If
any Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.01, 3.02, 3.03
or 3.04 hereof that gave rise to the conversion of such Lender’s
Eurodollar Rate Loans pursuant to this Section 3.06 no longer exist
(which such Lender agrees to do promptly upon such circumstances ceasing to
exist) at a time when Eurodollar Rate Loans made by other Lenders are
outstanding, such Lender’s Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest

 

81

 

Period(s) for such outstanding Eurodollar
Rate Loans, to the extent necessary so that, after giving effect thereto, all
Loans held by the Lenders holding Eurodollar Rate Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.

 

3.07                           Replacement of Lenders under Certain
Circumstances.  (a)  If at any time (i) the Borrower becomes
obligated to pay additional amounts or indemnity payments described in Section 3.01
or 3.04 as a result of any condition described in such Sections or any
Lender ceases to make Eurodollar Rate Loans or Screen Rate Loans as a result of
any condition described in Section 3.02 or 3.03, (ii) any
Lender becomes a Defaulting Lender, (iii) any Lender fails to promptly execute
and deliver the assignment documents requested pursuant to Section 2.14(c)
or (iv) any Lender becomes a “Non-Consenting Lender” (as defined below in this Section 3.07),
then the Borrower may, on ten (10) Business Days’ prior written notice to the
Administrative Agent and such Lender, either (A) replace such Lender by
causing such Lender to (and such Lender shall be obligated to) assign pursuant
to Section 10.08(b) (with the assignment fee to be paid by the
Borrower in such instance) all of its rights and obligations under this
Agreement to one or more Eligible Assignees; provided, that neither the
Administrative Agent nor any Lender shall have any obligation to the Borrower
to find a replacement Lender or other such Person or (B) terminate the
Commitment of such Lender and repay all obligations of the Borrower owing to
such Lender relating to the Loans and participations held by such Lender as of
such termination date.

 

(b)                                 Any
Lender being replaced pursuant to Section 3.07(a) above shall
(i) execute and deliver an Assignment and Assumption with respect to such
Lender’s Commitment and outstanding Loans and participations in L/C Obligations
and Swing Line Loans, and (ii) deliver any Notes evidencing such Loans to
the Borrower or Administrative Agent. 
Pursuant to such Assignment and Assumption, (i) the assignee Lender
shall acquire all or a portion, as the case may be, of the assigning Lender’s
Commitment and outstanding Loans and participations in L/C Obligations and
Swing Line Loans, (ii) all obligations of the Borrower owing to the assigning
Lender relating to the Loans and participations so assigned shall be paid in
full by the assignee Lender to such assigning Lender concurrently with such
assignment and assumption and (iii) upon such payment and, if so requested
by the assignee Lender, delivery to the assignee Lender of the appropriate Note
or Notes executed by the Borrower, the assignee Lender shall become a Lender
hereunder and the assigning Lender shall cease to constitute a Lender hereunder
with respect to such assigned Loans, Commitments and participations, except
with respect to indemnification provisions under this Agreement, which shall
survive as to such assigning Lender.

 

(c)                                  Notwithstanding
anything to the contrary contained above, (i) the Lender that acts as the L/C
Issuer may not be replaced hereunder at any time that it has any Letter of
Credit outstanding hereunder unless arrangements satisfactory to such L/C
Issuer (including the furnishing of a back-up standby letter of credit in form
and substance, and issued by an issuer reasonably satisfactory to such L/C
Issuer or the depositing of cash collateral into a cash collateral account in
amounts and pursuant to arrangements reasonably satisfactory to such L/C
Issuer) have been made with respect to such outstanding Letter of Credit and
(ii) the Lender that acts as the Administrative Agent may not be replaced
hereunder except in accordance with the terms of Section 9.09.

 

82

 

(d)                                 In
the event that (i) the Borrower or the Administrative Agent has requested the
Lenders to consent to a departure or waiver of any provisions of the Loan
Documents or to agree to any amendment thereto, (ii) the consent, waiver or
amendment in question requires the agreement of all affected Lenders in
accordance with the terms of Section 10.01 or 10.02 or all
the Lenders with respect to a certain class of the Loans and (iii) the Required
Lenders, Required First Lien Lenders or Required Second Lien Lenders, as
applicable, have agreed to such consent, waiver or amendment, then any Lender
who is entitled to agree to such consent, waiver or amendment but who does not
so agree shall be deemed a “Non-Consenting Lender.”

 

3.08                           Survival.  All
of the Borrower’s obligations under this Article III shall survive
the Termination Date.

 

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01                           Conditions of Initial Credit
Extension.  The obligation of
each Lender to make its Credit Extension hereunder on the Amendment and
Restatement Closing Date is subject to satisfaction (subject to Section 6.15(b))
or waiver of the following conditions precedent:

 

(a)                                  The
Administrative Agent’s receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Amendment and Restatement Closing Date (or, in the case
of certificates of governmental officials, a recent date before the Amendment
and Restatement Closing Date) and each in form and substance reasonably
satisfactory to the Administrative Agent and each of the Lenders:

 

(i)                                     executed
counterparts of this Agreement, the Existing Guaranty Supplement in
substantially the form of Exhibit F hereto and the Intercreditor
Agreement in substantially the form of Exhibit M hereto, sufficient in
number for distribution to each Agent, each Lender and the Borrower;

 

(ii)                                  a
Note executed by the Borrower in favor of each Lender requesting a Note (provided that any Lender holding a Note
issued pursuant to the Existing Credit Agreement that requests a new Note shall
have returned its existing Note to the Administrative Agent);

 

(iii)                               the
Existing Security Agreement Supplement, duly executed by each Loan Party,
together with:

 

(A)                              certificates
(if any) representing the Pledged Interests referred to therein accompanied by
undated stock powers executed in blank and instruments evidencing the Pledged
Debt indorsed in blank, in each case, to the extent not already in the
possession of the Administrative Agent,

 

83

 

(B)                                copies
of proper financing statements, duly prepared for filing under the Uniform
Commercial Code in all jurisdictions that the Administrative Agent may deem
reasonably necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the First Lien Security
Agreement, covering the Collateral described in the First Lien Security
Agreement, and

 

(C)                                evidence
that all other actions, recordings and filings of or with respect to the First
Lien Security Agreement that the Administrative Agent may deem reasonably
necessary or desirable in order to perfect and protect the Liens created
thereby;

 

(iv)                              a
security agreement, in substantially the form of Exhibit G-2 hereto
(together with each other security agreement and security agreement supplement
delivered pursuant to Section 6.11 and 6.15 and evidencing a
second priority lien and security interest in the Collateral thereunder, in
each case as amended, the “Second
Lien Security Agreement”),
duly executed by each Loan Party, together with:

 

(A)                              copies
of proper financing statements, duly prepared for filing under the Uniform
Commercial Code in all jurisdictions that the Administrative Agent may deem
reasonably necessary or desirable in order to perfect and protect the second
priority liens and security interests created under the Second Lien Security
Agreement, covering the Collateral described in the Second Lien Security
Agreement, and

 

(B)                                evidence
that all other actions, recordings and filings of or with respect to the Second
Lien Security Agreement that the Administrative Agent may deem reasonably
necessary or desirable in order to perfect and protect the Liens created
thereby;

 

(v)                                 the
First Lien Mortgages, duly executed by the appropriate Loan Party, together
with:

 

(A)                              evidence
that a counterpart of the Existing Mortgage Supplement has been duly executed,
acknowledged and delivered and is in form suitable for filing or recording in
the applicable Ohio jurisdiction and that all applicable filing and recording
taxes and fees have been paid or otherwise provided for to the satisfaction of
the Administrative Agent,

 

(B)                                evidence
that a counterpart of the New Mortgage has been duly executed, acknowledged and
delivered and is in form suitable for filing or recording in the applicable
Indiana jurisdiction and that all applicable filing and recording taxes and
fees have been paid, and

 

(C)                                evidence
that all other action that the Administrative Agent may reasonably deem
necessary or desirable in order to create a valid first and subsisting Lien on
the Orrville, Ohio property and the Noblesville,

 

84

 

Indiana property, subject
to Liens permitted by Section 7.01, has been taken;

 

(vi)                              mortgages,
in substantially the form of Exhibit H-3 hereto (with such changes
as may be reasonably satisfactory to the Administrative Agent and its counsel
to account for local law matters) and covering the Borrower’s Orrville, Ohio
fertilizer plant and the Borrower’s Noblesville, Indiana plant (together with
each other mortgage delivered pursuant to Section 6.11, in each
case as amended, the “Second
Lien Mortgages”), duly executed by the appropriate
Loan Party, together with:

 

(A)                              evidence
that a counterpart of the Second Lien Mortgage covering the Orrville, Ohio
property has been duly executed, acknowledged and delivered and is in form
suitable for filing or recording in the applicable Ohio jurisdiction and that
all applicable filing and recording taxes and fees have been paid or otherwise
provided for to the satisfaction of the Administrative Agent,

 

(B)                                evidence
that a counterpart of the Second Lien Mortgage covering the Noblesville,
Indiana property has been duly executed, acknowledged and delivered and is in
form suitable for filing or recording in the applicable Indiana jurisdiction
and that all applicable filing and recording taxes and fees have been paid, and

 

(C)                                evidence
that all other action that the Administrative Agent may reasonably deem
necessary or desirable in order to create a valid second and subsisting Lien on
the Orrville, Ohio property and the Noblesville, Indiana property, subject to
Liens permitted by Section 7.01, has been taken;

 

(vii)                           the
Existing IPSA Supplement, duly executed by each Loan Party, together with
evidence that all action that the Administrative Agent may reasonably deem
necessary or desirable in order to perfect and protect the first priority liens
and security interests created under the First Lien Intellectual Property
Security Agreement has been taken;

 

(viii)                        an
intellectual property security agreement, in substantially the form of Exhibit I-2
hereto (together with each other intellectual property security agreement and
intellectual property security agreement supplement delivered pursuant to Section 6.11
and 6.15, in each case as amended, the “Second Lien Intellectual Property Security Agreement”), duly
executed by each Loan Party, together with evidence that all action that the
Administrative Agent may reasonably deem necessary or desirable in order to
perfect and protect the second priority liens and security interests created
under the Second Lien Intellectual Property Security Agreement has been taken;

 

85

 

(ix)                                such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to be a party;

 

(x)                                   such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Loan Party is duly organized or formed, and that each
Loan Party is validly existing and in good standing under its jurisdiction of
incorporation;

 

(xi)                                a
reasonably satisfactory opinion of Weil, Gotshal and Manges LLP, special
counsel to the Loan Parties, addressed to each Agent and each Lender, as to the
matters set forth in Exhibit J-1 and such other matters concerning the
Loan Parties and the Loan Documents as the Administrative Agent may reasonably
request;

 

(xii)                             reasonably
satisfactory opinions of local counsel to the Loan Parties, as to the matters
set forth in Exhibit J-2 and such other matters concerning the Loan
Parties and the Loan Documents as the Administrative Agent may reasonably
request;

 

(xiii)                          a
certificate of a Responsible Officer of the Borrower either (A) attaching copies
of all consents, licenses and approvals required in connection with the
execution, delivery and performance by the Borrower or any other Loan Party and
the validity against the Borrower or such Loan Party of the Loan Documents to
which it is a party, and such consents, licenses and approvals shall be in full
force and effect, or (B) stating that no such consents, licenses or approvals
are so required;

 

(xiv)                         a
certificate signed by a Responsible Officer of the Borrower certifying (A) that
the conditions specified in Sections 4.02(a) and (b) have been
satisfied, and (B) that there has been no event or circumstance since
July 9, 2004 that has had or could be reasonably expected to have, either
individually or in the aggregate, a UPG Material Adverse Effect;

 

(xv)                            certificates
attesting to the Solvency of the Borrower and its Subsidiaries taken as a
whole, after giving effect to the UPG Acquisition, from its Chief Financial
Officer;

 

(xvi)                         reasonably
satisfactory evidence that all insurance required to be maintained pursuant to
the Loan Documents has been obtained and is in effect, together with the
endorsements of insurance required by the terms of the Security Agreements;

 

86

 

(xvii)                      a
notice of borrowing or notice of letter of credit issuance, as applicable,
relating to the Credit Extension on the Amendment and Restatement Closing Date;
and

 

(xviii)                   (A)
unaudited consolidated balance sheet and income statement of UPG and its
Subsidiaries for any interim monthly periods ended since March 31, 2004
for which such statements are available, and a pro forma balance sheet, income
statement and statement of cash flows as to the Borrower and its Subsidiaries
as of the end of and for the most recent four fiscal quarter period ended at
least 45 days prior to the Amendment and Restatement Closing Date, in each case
adjusted to give effect to the consummation of the UPG Acquisition as if the
UPG Acquisition, (x) with respect to the pro forma balance sheet, had occurred
on such date, and (y) with respect to the pro forma income statement and pro
forma statement of cash flows, had occurred on the first day of such four
fiscal quarter period and (B) the forecasts prepared by management of the
Borrower of balance sheets, income statements and cash flow statements for each
month ending after the Amendment and Restatement Closing Date through
December 31, 2004 and for each year commencing with the first fiscal year
following the Amendment and Restatement Closing Date for the term of the
Facilities; and

 

(xix)                           certified
copies of the UPG Acquisition Documents duly executed by the parties thereto,
which shall be in form and substance reasonably satisfactory to the
Administrative Agent.

 

(b)                                 (i)
The UPG Acquisition shall be consummated simultaneously with the Credit
Extension on the Amendment and Restatement Closing Date in accordance with the
terms of the UPG Merger Agreement, (ii) the final UPG Merger Agreement
(including all schedules and exhibits thereto) and other material related documentation
shall be reasonably satisfactory to the Bookrunners (it being understood and agreed that the final Merger Agreement dated
June 14, 2004 among the Borrower, Saturn MergerCo., Inc. and UPG and the
related documentation reviewed by the Bookrunners as of the date thereof are
satisfactory), (iii) no provision of such documentation shall have been
waived, amended, supplemented or otherwise modified in any manner materially
adverse to the Lenders without the approval of the Bookrunners and (iv) concurrently
with, and in addition to, the Term Borrowings to be made on the Amendment and
Restatement Closing Date, the Borrower shall utilize an aggregate amount in (A)
cash equity of the Borrower and (B) cash on hand of the Borrower sufficient to
consummate the UPG Acquisition.

 

(c)                                  The
Administrative Agent shall (i) be reasonably satisfied that there has been no
material adverse change (from the standpoint of the Lenders) in the pro forma
capital and ownership structure and the shareholder arrangements of the
Borrower and each of the Guarantors since July 9, 2004 (other than as to
be effected pursuant to the UPG Acquisition) or (ii) have approved any such
change.

 

87

 

(d)                                 All
material governmental, shareholder and material third party consents and
approvals (including, without limitation, Hart-Scott-Rodino clearance, if
applicable) necessary in connection with the UPG Acquisition shall have been
obtained and shall remain in effect; all applicable waiting periods in
connection with the UPG Acquisition shall have expired, without any action
being taken by any Governmental Authority that would have the effect of (i)
making the consummation of the UPG Acquisition illegal or (ii) otherwise
prohibiting the consummation of the UPG Acquisition.

 

(e)                                  There
shall exist no action, suit, investigation or proceeding affecting any Loan
Party or any of its Subsidiaries pending or, to the knowledge of the Borrower,
threatened before any Governmental Authority or arbitrator that could be
reasonably be expected to have a UPG Material Adverse Effect.

 

(f)                                    All
Loans made by the Lenders to the Borrower shall be in full compliance with the
Federal Reserve’s margin regulations.

 

(g)                                 All
fees required to be paid on or before the Amendment and Restatement Closing
Date (including the fees and expenses of counsel to the Administrative Agent)
shall have been paid.

 

4.02                           Conditions to all Credit Extensions.  The obligation of each Lender to honor any
Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans to the other Type, or a continuation of Eurodollar
Rate Loans) is subject to the following conditions precedent:

 

(a)                                  The
representations and warranties of the Borrower and each other Loan Party contained
in Article V or any other Loan Document, shall be true and correct
in all material respects on and as of the date of such Credit Extension, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct in all material
respects as of such earlier date, and except that for purposes of this Section 4.02,
the representations and warranties contained in Section 5.06 shall
be deemed to refer to the most recent statements furnished pursuant to Sections
6.13(b) and (c).

 

(b)                                 No
Default shall exist, or would result from such proposed Credit Extension or
from the application of the proceeds therefrom.

 

(c)                                  The
Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with
the requirements hereof.

 

Each Request for Credit Extension (other than a
Committed Loan Notice requesting only a conversion of Loans to the other Type
or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be
deemed to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.

 

88

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

Representations and Warranties.  Each of Holdings and the Borrower hereby
represents and warrants as follows:

 

5.01                           Existence, Qualification and Power.  Each of the Loan Parties and each of their
Subsidiaries (a) are corporations, limited partnerships or limited liability
companies duly organized and validly existing under the laws of the
jurisdictions of their respective organization and are in good standing under
the laws of such jurisdiction and (b) are duly qualified as foreign
corporations, limited partnerships or limited liability companies and are in
good standing in each other jurisdiction in which the ownership, lease or
operation of their respective property and assets or the conduct of their
respective businesses require them to so qualify or be licensed, except, solely
in the case of this clause (b), where the failure to so qualify or be
licensed or to be in good standing, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.  Each of the Loan Parties and each of their
Subsidiaries have all of the requisite power and authority, and the legal
right, to own or lease and to operate all of the property and assets they purport
to own, lease or operate and to conduct all of their respective businesses as
now conducted.  Each of the Loan Parties
has all of the requisite power and authority, and the legal right, to execute
and deliver each of the Loan Documents to which it is a party, to perform all
of its obligations hereunder and thereunder and to consummate the UPG
Acquisition, the Holding Company Event (if and when consummated) and all of the
other transactions contemplated hereby and thereby.

 

5.02                           Capitalization. 
Set forth on Schedule 5.02 hereto is a complete and accurate
list of all of the Subsidiaries of the Borrower as of the date of this
Agreement showing, as to each such Subsidiary, the correct legal name thereof,
the type of entity, the jurisdiction of its organization, the number and type
of each class of its Equity Interests authorized and the number outstanding,
and the percentage of each such class of its Equity Interests outstanding on
such date that are owned by any of the Loan Parties.  As of the date of this Agreement, all of the outstanding Equity
Interests in each of the Subsidiaries of the Borrower are owned directly or
indirectly by one or more of the Loan Parties, free and clear of all Liens,
except those created under the Collateral Documents.  All of the outstanding Equity Interests in the Borrower and each
of its Subsidiaries have been validly issued and are fully paid and
nonassessable.

 

5.03                           Authorization; No Contravention.  The execution, delivery and performance by
each of the Loan Parties of each of the Loan Documents and the UPG Acquisition
Documents to which it is a party, and the consummation of the UPG Acquisition,
the Holding Company Event (if and when consummated) and the other transactions
contemplated hereby and thereby, have been duly authorized by all necessary
action (including, without limitation, all necessary shareholder, partner,
member or other similar action) and do not:

 

(a)                                  contravene
the Constitutive Documents of such Loan Party;

 

(b)                                 violate
any Requirement of Law;

 

89

(c)                                  conflict
with or result in the breach of, or constitute a default under, any loan
agreement, indenture, mortgage, deed of trust, lease, instrument, contract or
other agreement binding on or affecting such Loan Party or any of its
Subsidiaries or any of their respective property or assets in a manner which
could reasonably be expected to have a Material Adverse Effect; or

 

(d)                                 except
for the Liens created under the Collateral Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of the property
or assets of such Loan Party or any of its Subsidiaries.

 

Neither any of the Loan Parties nor any of their respective
Subsidiaries is in violation of any Requirement of Law or in breach of any loan
agreement, indenture, mortgage, deed of trust, lease, instrument, contract or
other agreement referred to in the immediately preceding sentence, the
violation or breach of which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

5.04                           Governmental Authorization; Other
Consents.  Each of the Loan Parties
and each of their Subsidiaries own or possess all of the Governmental
Authorizations that are necessary to own or lease and operate their respective
property and assets and to conduct their respective businesses as now
conducted, except where and to the extent that the failure to obtain or
maintain in effect any such Governmental Authorization, either individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.  Neither any of the Loan Parties
nor any of their Subsidiaries has received any notice relating to or
threatening the revocation, termination, cancellation, denial, impairment or
modification of any such Governmental Authorization, or is in violation or
contravention of, or in default under, any such Governmental Authorization that
in any case could reasonably be expected to have a Material Adverse
Effect.  No Governmental Authorization
and no consent, approval or authorization of, or notice to or filing with, or
other action by, any other Person is required for:

 

(a)                                  the
due execution, delivery or performance by any of the Loan Parties of any of the
Loan Documents or the UPG Acquisition Documents to which it is a party, or for
the consummation of any aspect of the UPG Acquisition;

 

(b)                                 the
grant by any of the Loan Parties of the Liens granted by it pursuant to the
Collateral Documents;

 

(c)                                  the
perfection or maintenance of the Liens created under the Collateral Documents
(including the priority thereof);

 

(d)                                 the
exercise by any of the Agents or any of the Lenders of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents; or

 

(e)                                  the
consummation of the Holding Company Event (if and when consummated),

 

except for the approvals, consents, exemptions, authorizations,
actions, notices and filings that have been duly obtained, taken, given or made
and are in full force and effect and, in the case of

 

90

 

the UPG Acquisition and the Holding Company Event (if and when
consummated), those approvals, consents, exemptions, authorizations or other
actions, notices or filings, the failure of which to obtain or make could not
reasonably be expected to have a Material Adverse Effect.  All applicable waiting periods in connection
with each aspect of the UPG Acquisition have expired without any action having
been taken by any competent Governmental Authority restraining, preventing or
imposing materially adverse conditions upon the Loan Parties and their
Subsidiaries or that could seek or threaten any of the foregoing in any
material respect.

 

5.05                           Enforceability. 
This Agreement has been, and each of the Notes and each of the other
Loan Documents when delivered hereunder will have been, duly executed and
delivered by each of the Loan Parties party thereto.  This Agreement is, and each of the Notes and each of the other
Loan Documents when delivered hereunder will be, the legal, valid and binding
obligations of each of the Loan Parties party thereto, enforceable against such
Loan Party in accordance with their respective terms, except to the extent such
enforceability may be limited by the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally or by general principles of equity.

 

5.06                           Financial Statements; No Material
Adverse Effect.  (a)  The
balance sheets of the Borrower as of December 31, 2001, December 31,
2002 and December 31, 2003, and the related statements of income,
stockholders’ equity and cash flow of the Borrower for the Fiscal Years then
ended, in each case including the schedules and notes thereto and accompanied
by an opinion of PricewaterhouseCoopers LLP, the independent auditors of the
Borrower, copies of all of which have been furnished to the Lenders, fairly
present in all material respects the financial condition of the Borrower as at
such dates and the results of operations and cash flow of the Borrower for the
respective periods ended on such dates.

 

(b)                                 The
balance sheets of UPG as of December 31, 2001, December 31, 2002 and
December 31, 2003, and the related statements of income, stockholders’
equity and cash flow of UPG for the Fiscal Years then ended, and the balance
sheet of UPG as of March 31, 2004, and the related statements of income,
stockholders’ equity and cash flow of UPG for the three-month period then
ended, in each case including the schedules and notes thereto (if any) and
accompanied by an opinion of Pricewaterhouse Coopers, the independent auditors
of UPG, copies of all of which have been furnished to the Lenders, fairly
present in all material respects (subject, solely in the case of such financial
statements of UPG as of and for the three-month period ended March 31,
2004, to normal year-end audit adjustments and the absence of footnotes) the
financial condition of UPG as at such dates and the results of operations and
cash flow of UPG for the respective periods ended on such dates.

 

(c)                                  All
of the financial statements referred to in clause (a) above, including
the schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the respective periods covered thereby, except
as noted therein.  As of the Amendment
and Restatement Closing Date, neither the Borrower nor UPG has any material
indebtedness or other material fixed or contingent liabilities, material
liabilities for taxes, unusual forward or long-term material commitments or
anticipated material losses from any unfavorable commitments, in each case that
are required by GAAP to be disclosed, except as otherwise permitted hereunder.

 

91

 

(d)                                 Since
July 9, 2004, there has been no event or circumstance, either individually
or in the aggregate, that has had or could reasonably be expected to have a
Material Adverse Effect.

 

5.07                           Projections.  The forecasted Consolidated balance sheets and statements of
income or operations, stockholders’ equity and cash flow of the Borrower and
its Subsidiaries delivered to the Lenders pursuant to Section 4.01(a)(xviii)
or 6.13(e) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in the light of conditions existing
at the time made, and represented, at the time of delivery thereof to the
Lenders, the Borrower’s reasonable estimate of its future financial performance
(although the actual results during the periods covered by such forecasts may
differ from the forecasted results).

 

5.08                           Accuracy of Information.  All of the written information (other than
financial projections and pro forma
information) furnished by or on behalf of any of the Loan Parties or any of
their Subsidiaries to any of the Agents or any of the Lenders or any of their
representatives or advisors in connection with the Loan Documents or the UPG
Acquisition Documents or any aspect of the UPG Acquisition or any of the other
transactions contemplated hereby or thereby, considered as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made therein, in light of the
circumstances in which any such statements were made, not materially
misleading.

 

5.09                           Litigation. 
There is no action, suit, litigation, arbitration or proceeding pending
or, to the knowledge of the Borrower, threatened (and, to the knowledge of the
Borrower, there is no investigation pending or threatened) against or affecting
any of the Loan Parties or any of their Subsidiaries or any of the property or
assets thereof in any court or before any arbitrator or by or before any
Governmental Authority of any kind that either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

5.10                           Collateral; Liens.  Each of the Loan Parties is the legal and beneficial owner of the
Collateral purported to be owned thereby under the Collateral Documents, free
and clear of all Liens, except for the liens and security interests created or
permitted under the Loan Documents.  The
Collateral Documents, together with the filing of appropriate Uniform
Commercial Code financing statements in favor of the First Lien Collateral
Agent, on behalf of the First Lien Lenders and the Second Lien Collateral
Agent, on behalf of the Second Lien Lenders, as applicable, the possession of
the certificates evidencing the Equity Interests in the Subsidiaries of the
Borrower (or upon consummation of the Holding Company Event, the Subsidiaries
of Holdings) comprising part of the Collateral and the taking of any other
actions described in the Collateral Documents, create valid and perfected first
priority liens on and security interests in the Collateral (subject to the
liens and security interests permitted under Section 7.01) in favor
of the First Lien Collateral Agent, for the benefit of the First Lien Lenders,
and valid and perfected second priority liens on and security interests in the
Collateral (subject to the liens in favor of the First Lien Lenders and to the
liens and security interests permitted under Section 7.01) in favor
of the Second Lien Collateral Agent, for the benefit of the Second Lien
Lenders, securing the payment of the respective Secured Obligations.  Certificates (if applicable as to any
Subsidiary) representing all of the Equity Interests in the Subsidiaries of the
Loan Parties that are purported to comprise part of the Collateral have been
delivered to the First Lien

 

92

 

Collateral Agent as required under the terms of the Collateral
Documents, together with undated stock powers or other appropriate powers duly
executed in blank; all filings and other actions necessary to perfect and
protect the liens and security interests of the Collateral Agents in the
Collateral have been duly made or taken and are in full force and effect or
will be duly made or taken in accordance with the terms of the Loan Documents;
and all filing fees and recording taxes have been paid in full.

 

5.11                           Intellectual Property.  Each of the Loan Parties and each of their
Subsidiaries own or have the legal right to use all of the patents, licenses,
franchises, copyrights, service marks, trademarks, trade secrets and trade
names (collectively, “IP
Rights”) that are necessary to own or lease and operate their
respective property and assets and to conduct their respective businesses as
now conducted, without known conflict with the rights of any other Person
except to the extent the failure to so own or possess any such IP Right (or
such conflict pertaining thereto) could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  No action, suit, litigation, arbitration or
proceeding is pending or, to the knowledge of the Borrower, threatened (and, to
the knowledge of the Borrower, no investigation is pending or threatened)
challenging the use by any of the Loan Parties or any of their Subsidiaries of
any such IP Right or the validity or effectiveness thereof, except for any such
action, suit, investigation, litigation, arbitration or proceeding that, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

 

5.12                           Margin Stock. 
Neither any of the Loan Parties nor any of their respective 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” (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
207)).  None of the proceeds of any
Borrowing or the drawings under any Letter of Credit will be used to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock.

 

5.13                           Investment Company Act, Etc.  Neither any of the Loan Parties nor any of
their Subsidiaries is an “investment company”
or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company” (each as defined in
the Investment Company Act of 1940, as amended).  None of the making (or deemed making) of any Borrowing, the
issuance (or deemed issuance) of any Letter of Credit or the application of the
proceeds therefrom, or the repayment of any Borrowing by the Borrower, or the
consummation of the UPG Acquisition, or the Holding Company Event (if and when
consummated) or any of the other transactions contemplated hereby, will violate
any provision of the Investment Company Act of 1940, as amended, or any rule,
regulation or order of the Securities and Exchange Commission thereunder.

 

5.14                           Solvency.  The
Borrower is, individually and together with its Subsidiaries, taken as a whole,
Solvent.

 

5.15                           Labor Matters. 
Except as, either individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect, there is (a) no unfair
labor practice complaint pending or, to the knowledge of the Borrower,
threatened against any of the Loan Parties or any of their Subsidiaries by or
before any Governmental Authority, and no

 

93

 

grievance or arbitration proceeding pending or, to the knowledge of the
Borrower, threatened against any of the Loan Parties or any of their
Subsidiaries which arises out of or under any collective bargaining agreement,
(b) no strike, labor dispute, slowdown, stoppage or similar action or
grievance pending or, to the knowledge of the Borrower, threatened against any
of the Loan Parties or any of their Subsidiaries and (c) to the knowledge of the
Borrower, no union representation question existing with respect to the
employees of any of the Loan Parties or any of their Subsidiaries and no union
organizing activity taking place with respect to any of the employees of any of
them.

 

5.16                           ERISA Matters. 
No ERISA Event has occurred or could reasonably be expected to occur
that, either individually or in the aggregate, has had or could reasonably be
expected to have, a Material Adverse Effect. 
Schedule B (Actuarial Information) to the most recent annual report
(Form 5500 series) for each of the Pension Plans, copies of which have been
filed with the Internal Revenue Service and furnished or made available to the
Lenders, is complete and accurate and fairly presents in all material respects
the funding status of such plan at such time; and, to the knowledge of the Loan
Parties, since the date of such Schedule B, there has been no material
adverse change in the funding status of such plan.  Neither any of the Loan Parties nor any of the ERISA Affiliates
(i) has incurred any Withdrawal Liability to any Multiemployer Plan in excess
of $1,000,000 or (ii) has been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and, to the best knowledge of the
Loan Parties and the ERISA Affiliates, no such Multiemployer Plan could
reasonably be expected to be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.

 

5.17                           Environmental Compliance.  (a)  The operations and properties
of each of the Loan Parties and each of their Subsidiaries comply in all
material respects with all applicable Environmental Laws and Environmental
Permits; all past noncompliance with such Environmental Laws and Environmental
Permits has been resolved without any material ongoing obligations or costs;
all Environmental Permits that are necessary for the operations or properties
of any of the Loan Parties or any of their Subsidiaries have been obtained and
are in full force and effect, except where and to the extent that the failure
to obtain or maintain in full force and effect any such Environmental Permit,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect; and no circumstances exist that, either
individually or in the aggregate, could reasonably be expected to (i) form
the basis of an Environmental Action against any of the Loan Parties or any of
their Subsidiaries or any of the properties thereof that, either individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect or (ii) cause any such property to be subject to any restrictions
on ownership, occupancy or use or on the transferability of such property that
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.

 

(b)                                 Except
as disclosed in Schedule 5.17, (i) none of the properties owned or
operated by any of the Loan Parties or any of their Subsidiaries is listed or,
to the actual knowledge of the Borrower, is proposed for listing on the NPL or
on the CERCLIS or any analogous state or local list; and (ii) except as, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, (A) there are no, and never have been any,
underground or aboveground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or have
been treated, stored or 

 

94

 

disposed of on any property owned or operated
by any of the Loan Parties or any of their Subsidiaries or, to the knowledge of
the Borrower, on any property formerly owned or operated by any of the Loan
Parties or any of their Subsidiaries, (B) there is no asbestos or
asbestos-containing material on any property owned or operated by any of the
Loan Parties or any of their Subsidiaries and (C) Hazardous Materials have
not been released, discharged or disposed of on any property owned or operated
by any of the Loan Parties or any of their Subsidiaries.

 

(c)                                  Except
as disclosed in Schedule 5.17, neither any of the Loan Parties nor
any of their Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law that,
either individually or in the aggregate, could reasonably be expected to result
in the Borrower or any of its Subsidiaries incurring Environmental Liability
that could reasonably be expected to result in a Material Adverse Effect.

 

5.18                           Taxes. 
(a)  Each of the Loan Parties and each of their Subsidiaries
have filed all federal and material state tax returns, reports and statements,
and all other material tax returns, reports and statements, required to be
filed and have paid or caused to be paid all federal and material state and
other taxes, assessments, levies, fees and other charges shown thereon (or on
any assessments received by any such Person or of which any such Person has
been notified) to be due and payable, together with applicable interest and
penalties, except for any such taxes, assessments, levies, fees and other
charges (i) the amount, applicability or validity of which is being contested
in good faith and by appropriate proceedings diligently conducted and with
respect to which the applicable Loan Party or Subsidiary or Affiliate of a Loan
Party, as the case may be, has established appropriate and adequate reserves in
accordance with GAAP or (ii) with respect to which the failure to make such
filing or payment could not reasonably be expected to have a Material Adverse
Effect.

 

(b)                                 Set
forth on Schedule 5.18 hereto is a complete and accurate list, as
of the date of this Agreement, of each of the Open Years of each of the Loan
Parties and each of their Subsidiaries. 
No issues have been raised by the Internal Revenue Service in respect of
Open Years of any of the Loan Parties or any of their Subsidiaries or by any
such foreign, state or local taxation authorities or other Governmental
Authorities that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. 
Neither any of the Loan Parties nor any of their Subsidiaries has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the assessment,
reassessment, payment or collection of taxes of any Loan Party or any such
Subsidiary, or is aware of any circumstances that would cause the taxable years
or other taxable periods of any Loan Party or any such Subsidiary to no longer
be subject to the normally applicable statute of limitations.

 

5.19                           Real Estate. 
Set forth on (i) Part A of Schedule 5.19 hereto is a
complete and accurate list as of the date of this Agreement or as of the date
of the most recent amendment, supplement or other modification to Schedule 5.19
hereto (pursuant to Section 6.13(f)) of all real

 

95

 

property owned by the Borrower or any of its Subsidiaries, showing as
of such date, the street address, county or other relevant jurisdiction, state,
record owner and book and estimated fair value thereof and (ii) Part B of Schedule 5.19
hereto is a complete and accurate list as of the date of this Agreement or as
of the date of the most recent amendment, supplement or other modification to Schedule 5.19
hereto (pursuant to Section 6.13(f)) of all leases of real property
under which any of the Loan Parties or any of their Subsidiaries is the lessee,
showing as of such date, the street address, state, lessor and lessee
thereof.  The Borrower and each of its
Subsidiaries have good and indefeasible fee simple title to all of the real
property set forth on Part A of Schedule 5.19 hereto, free and
clear of all Liens other than Liens created or permitted under the Loan
Documents, except for any such real property that has been sold, leased,
transferred or otherwise disposed of in accordance with the terms of the Loan
Documents.  All of the leases referred
to on Schedule 5.19 hereto are valid and subsisting and in full
force and effect, unless such lease has lapsed, terminated or been canceled in
accordance with the terms of the Loan Documents, except where failure of such
leases to be valid and subsisting and in full force and effect could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

ARTICLE VI

AFFIRMATIVE, REPORTING AND FINANCIAL COVENANTS

 

Until the Termination Date, each of Holdings and the
Borrower will, at all times:

 

6.01                           Compliance with Laws, Maintenance of
Governmental Authorizations, Etc. 
(a) Comply, and cause each of its Subsidiaries to comply, with all
applicable Requirements of Law, such compliance to include, without limitation,
compliance with ERISA, with the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970 and with the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Pub. L.107-57 and all other laws and
regulations relating to money laundering and terrorist activities except to the
extent the failure of such Person to comply with any of the foregoing could not
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect and (b) except as provided in Section 6.05,
obtain and maintain in effect all Governmental Authorizations that are
necessary (i) to own or lease and operate their respective property and assets
and to conduct their respective businesses as now conducted, except where and
to the extent that the failure to obtain or maintain in effect any such
Governmental Authorization, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, or (ii) for the due
execution, delivery or performance by the Borrower or any of its Subsidiaries
of any of the Loan Documents to which it is a party, or for the consummation of
any aspect of the Transaction or any of the other transactions contemplated
hereby and thereby.  This Section 6.01
shall not apply to compliance with Environmental Laws or Environmental Permits
(which are the subject of Section 6.03).

 

6.02                           Payment of Taxes, Etc.  Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, to the extent due and payable and before the
same shall become delinquent, (a) all material taxes, assessments,
reassessments, levies and other governmental charges imposed upon it or upon
its property, assets or income and (b) all lawful claims that, if unpaid,
might by law become a Lien upon its property and assets or any part

 

96

 

thereof; provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, reassessment, levy, charge or claim (i) the
amount, applicability or validity of which is being contested in good faith and
by proper proceedings diligently conducted and as to which appropriate and
adequate reserves are being maintained by the Borrower or its applicable
Subsidiary in accordance with GAAP and (ii) except, in each case, to the extent
that the failure to pay or discharge which tax, assessment, reassessment, levy,
charge or claim could not, individually or when aggregated with all other
unpaid amounts of a type referred to in this Section 6.02,
reasonably be expected to have a Material Adverse Effect.

 

6.03                           Compliance with Environmental Laws.  (a) Comply (and use commercially reasonable
efforts to require that all lessees and other Persons operating or occupying
any of the Subsidiaries’ properties to comply), and cause each of its
Subsidiaries to comply (and to use commercially reasonable efforts to require
all lessees and other Persons operating or occupying any of the Subsidiaries’
properties to comply), in all material respects, with all Environmental Laws
and the Environmental Permits applicable to such Person or its operations or
properties; (b) obtain and renew, and cause each of its Subsidiaries to obtain
and renew, all of the Environmental Permits necessary for the ownership or
operation of their respective properties or the conduct of their respective
businesses as now conducted and as proposed to be conducted; and (c) conduct,
and cause each of its Subsidiaries to conduct, any investigation, study,
sampling or testing, and undertake, and cause each of its Subsidiaries to
undertake, any cleanup, removal, remedial or other action, necessary to remove
and clean up releases of the Hazardous Materials from any of its properties in
accordance with the requirements of all applicable Environmental Laws, except,
in the case of clause (b) or (c) of this Section 6.03,
where the failure to obtain or renew any such Environmental Permit, to conduct
any such investigation, study, sampling or testing or to undertake any such
cleanup, removal, remedial or other action, either individually or in the
aggregate, could not reasonably be expected (i) to have a Material Adverse
Effect or (ii) to subject any Loan Party or any of its Subsidiaries to any
criminal penalty or liability or (iii) to subject the Administrative Agent or
any of the Lenders to any criminal penalty or liability or (except for
nonmaterial fines for which the Administrative Agent or such Lender is fully indemnified
under Section 10.05) any civil penalty or liability; provided,
however, that no Loan Party nor any of their Subsidiaries shall be
required to undertake any such cleanup, removal, remedial or other action
otherwise required under this Section 6.03 to the extent that the
amount, applicability or validity thereof is being contested in good faith and
by proper proceedings diligently conducted and appropriate and adequate
reserves are being maintained by such Loan Party or such applicable Subsidiary with
respect to such circumstances in accordance with GAAP.

 

6.04                           Maintenance of Insurance.  Maintain, and cause each of its Subsidiaries
to maintain, insurance for their respective properties, assets and businesses
with financially sound and reputable insurance companies or associations and of
such types (including, without limitation, insurance against theft and fraud
and against loss or damage by fire, explosion or hazard of or to property and
general public liability insurance), in such amounts and with such deductibles,
covering such casualties and contingencies and otherwise on such terms as are
at least as favorable as those usually carried by companies of established
reputations engaged in similar businesses and owning similar properties and
assets in the same general areas in which the Borrower or its applicable
Subsidiary operates or as may otherwise be required by applicable

 

97

 

Requirements of Law; provided, however, that
each Loan Party and their Subsidiaries may effect workers’ compensation
insurance or similar coverage with respect to their respective operations in
any particular jurisdiction through an insurance fund operated by such
jurisdiction or by meeting the self-insurance requirements of such jurisdiction
so long as the Borrower, Holdings or such Subsidiary establishes and maintains
appropriate and adequate reserves therefor in accordance with GAAP.

 

6.05                           Preservation of Corporate Existence,
Etc.  Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its legal existence,
organization, rights (statutory and pursuant to its Constitutive Documents),
permits, licenses, approvals, privileges and franchises; provided, however that the Borrower
and its Subsidiaries (i) may consummate any merger or consolidation otherwise
permitted under Section 7.03 and (ii) may amend, supplement or
otherwise modify their rights under their respective Constitutive Documents to
the extent otherwise permitted under Section 7.12; and provided  further,  however, that neither the Borrower nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if the loss thereof, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

 

6.06                           Visitation Rights.  At any reasonable time and from time to time, permit any of the
Agents or any of the Lenders, or any agents or representatives thereof (so long
as such agents or representatives are or agree to be bound by the provisions of
Section 10.08), to examine and make copies of and abstracts from
the records and books of account of, and to visit the properties of, the
Borrower and its Subsidiaries and to discuss the affairs, finances and accounts
of the Borrower and/or any of its Subsidiaries with any of their officers or
directors and with their independent auditors; provided, that, excluding
any such visits and inspections during the continuation of an Event of Default,
only the Administrative Agent on behalf of the Lenders may exercise rights
under this Section 6.06 and the Administrative Agent shall not
exercise such rights more often than two (2) times during any calendar year
absent the existence of an Event of Default and only one (1) such time shall be
at the Borrower’s expense; provided, further that when an Event
of Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time and from time to time
without limitation and without advance notice, except that any such visits
shall be done during normal business hours. 
The Administrative Agent and the Lenders shall give the Borrower the
opportunity to participate in any discussions with the Borrower’s accountants.

 

6.07                           Keeping of Books.  Keep, and cause each of its Subsidiaries to keep, proper books of
record and account in which full and accurate entries shall be made of all of
the financial transactions and the property, assets and businesses of the
Borrower and each of its Subsidiaries (including, without limitation, the
establishment and maintenance of adequate and appropriate reserves) in
accordance with GAAP.

 

6.08                           Maintenance of Properties, Etc.  (a) Maintain and preserve, and cause each of
its Subsidiaries to maintain and preserve, all of its material properties that,
either individually or in the aggregate, are necessary in the conduct of its
business in good working order and condition, ordinary wear and tear and
casualty and condemnation excepted, and (b) make, and cause each of its
Subsidiaries to make, from time to time, all repairs, renewals, additions,

 

98

 

replacements, betterments and improvements of such properties in
accordance with prudent industry practice.

 

6.09                           Compliance with Terms of Leaseholds.  Make all payments and otherwise perform all
obligations in respect of all leases of real property to which the Borrower or
any of its Subsidiaries is a party, keep such leases in full force and effect
and not allow such leases to lapse or to be terminated or any rights to renew
such leases to be forfeited or canceled, in each case except to the extent that
such nonperformance, lapse, termination, forfeiture or cancellation, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

 

6.10                           Transactions with Affiliates.  Conduct, and cause each of its Subsidiaries
to conduct, directly or indirectly, all transactions or series of related
transactions (including, without limitation, the purchase, sale, lease,
transfer or exchange of property or assets of any kind or the rendering of
services of any kind) otherwise permitted under the Loan Documents with any of
their Affiliates on terms that are fair and reasonable and no less favorable to
the Borrower (or upon consummation of the Holding Company Event, Holdings) or
any of its Subsidiaries than it would obtain in a comparable arm’s-length
transaction with a Person not an Affiliate thereof, other than:

 

(a)                                  the
performance by the Borrower and its Subsidiaries of its obligations under the
Nu-Gro Acquisition Documents, as in effect on the Initial Closing Date, and the
UPG Acquisition Documents, as in effect on the Amendment and Restatement
Closing Date or, in each case as the same may be amended pursuant to Section 7.14
and the payment of fees and expenses in connection therewith;

 

(b)                                 the
payment of management fees to the Sponsor pursuant to the terms of the
Professional Services Agreement, as in effect on the Initial Closing Date, in
an aggregate amount not to exceed $1,000,000 in any Fiscal Year;

 

(c)                                  the
payment of nonrecurring transaction fees to the Sponsor in connection with any
purchase or other acquisition of a Person, substantially all or all of the
assets of a Person or a line of business or division of a Person by any Loan
Party or any of their Subsidiaries in an amount not to exceed 1% of the total
consideration being paid by such Loan Party and its respective Subsidiaries for
such purchase or other acquisition, such fee, in each case, to be payable in
full upon the consummation of the related purchase or other acquisition;

 

(d)                                 any
transaction or series of related transactions solely between or among
(i) Holdings or the Borrower, on the one hand, and one or more of the
Restricted Subsidiaries on the other hand, (ii) one or more of the Restricted
Subsidiaries, or (iii) one or more of the Unrestricted Subsidiaries, on the one
hand, and Holdings, the Borrower or any Restricted Subsidiary, on the other
hand, in the case of this clause (iii) to the extent such transaction or
series of related transactions is not otherwise prohibited under the terms of
the Loan Documents;

 

(e)                                  equity
issuances by Holdings not prohibited by this Agreement;

 

99

 

(f)                                    customary
fees may be paid to any directors of Holdings and reimbursement may be made of
reasonable out-of-pocket costs of the directors of Holdings;

 

(g)                                 each Loan Party
and their respective Subsidiaries may enter into employment and
severance arrangements with their respective officers and employees in the
ordinary course of business;

 

(h)                                 each Loan Party
and their respective Subsidiaries may
perform obligations under any employment contract, collective bargaining
agreement, employee benefit plan, related trust agreement or any other similar
arrangement heretofore or hereafter entered into in the ordinary course of
business and not otherwise prohibited hereunder;

 

(i)                                     each Loan Party
and their respective Subsidiaries may
maintain benefit programs or arrangements for their respective employees,
officers or directors, including, without limitation, vacation plans, health
and life insurance plans, deferred compensation plans, and retirement or
savings plans and similar plans, in each case, in the ordinary course of
business and not otherwise prohibited hereunder;

 

(j)                                     each Loan Party
and their respective Subsidiaries may make payments pursuant to any
customary tax sharing arrangement among the Borrower (or upon the consummation
of the Holding Company Event, Holdings) and its Subsidiaries entered into in
the ordinary course of business; and

 

(k)                                  each
Loan Party and its respective Subsidiaries may make loans and advances to its
respective employees, officers and directors to the extent permitted under Article VII.

 

6.11                           Covenant to Give Security.  (a) 
Upon (i) the request of the Administrative Agent following the
occurrence and during the continuance of a Default under Section 8.01(a)
or 8.01(f) or an Event of Default, (ii) the formation or
acquisition of one or more new direct or indirect Subsidiaries by any Loan
Party or (iii) the purchase or other acquisition of any real property or any
personal property by any Loan Party with a value in excess of $2,500,000 in any
single transaction or series of related transactions, which property, in the
reasonable judgment of the Administrative Agent, shall not already be subject
to a valid and perfected first and second lien and security interest in favor
of the Collateral Agents, for the benefit of the relevant Secured Parties, the
Borrower shall, in each case at its own expense:

 

(A)                              within
thirty (30) days after such request or purchase or other acquisition, or such
longer period, up to an additional thirty (30) days, as the Administrative
Agent may agree, furnish to the Administrative Agent a description of such real
and personal properties of each of the Loan Parties and their respective
Subsidiaries in detail reasonably satisfactory to the Administrative Agent;

 

(B)                                in
connection with the formation or acquisition of a Subsidiary, within thirty
(30) days after such formation or acquisition or such longer period, not
to exceed an additional sixty (60) days, as the Administrative Agent may

 

100

 

agree in its sole
discretion, (1) cause each such Subsidiary that is not a Foreign Subsidiary,
and cause each direct and indirect parent of such Subsidiary (if it has not
already done so), to duly execute and deliver to the Administrative Agent a
Guaranty or Guarantee Supplement, guaranteeing the other Loan Parties’
obligations under the Loan Documents, (2) deliver (or cause such direct and
indirect parent to deliver) certificates (if any) representing the Pledged
Interests of such Subsidiary accompanied by undated stock powers or other
appropriate instruments of transfer executed in blank and instruments
evidencing the Pledged Debt of such Subsidiary indorsed in blank to the First
Lien Collateral Agent, together with, if requested by the Administrative Agent,
Security Agreement Supplements with respect to the pledge of any Equity
Interests or Indebtedness, provided, that no more than 66% of the voting
Equity Interests of any first-tier Foreign Subsidiary shall be required to be
pledged as Collateral, (3) duly execute and deliver, and cause each such
Subsidiary to duly execute and deliver, to the Administrative Agent mortgages,
collateral assignments, Security Agreement Supplements and other security
agreements, as specified by and in form and substance reasonably satisfactory
to the Administrative Agent, securing payment of all of the Obligations of the
applicable Loan Party or Subsidiary of a Loan Party, as the case may be, under
and in respect of the Loan Documents and constituting liens on and security
interests in all such real and personal properties and (4) duly execute and
deliver, and cause each such Subsidiary to duly execute and deliver, Guarantee
Supplements;

 

(C)                                within
thirty (30) days after such request or purchase or other acquisition, or such
longer period, not to exceed an additional sixty (60) days, as the
Administrative Agent may agree in its sole discretion, take, and cause each
such Subsidiary that is not a Foreign Subsidiary to take, whatever action
(including, without limitation, the recording of Mortgages, the filing of
Uniform Commercial Code financing statements and Intellectual Property Security
Agreements, the giving of notices and the endorsement of notices on title
documents) may be necessary or in the reasonable opinion of the Administrative
Agent advisable to vest in the respective Collateral Agents (or in any
co-agent, sub-agent or other representative of the such Collateral Agent
designated by it) valid and subsisting first and second Liens on the real and
personal properties purported to be subject to the Mortgages, collateral
assignments, Security Agreement Supplements and security agreements delivered
pursuant to this Section 6.11, enforceable against all third
parties in accordance with their terms;

 

(D)                               within
thirty (30) days after the request of the Administrative Agent (or such longer
period, not to exceed an additional sixty (60) days, as the Administrative
Agent in its sole discretion may permit), deliver to the Administrative Agent a
signed copy of opinions of counsel for the applicable Loan Parties, addressed
to the Administrative Agent and the other Secured Parties and reasonably
acceptable to the Administrative Agent, as to the matters contained in subclauses (A),
(B) and (C) of this Section 6.11, as to such
mortgages, collateral assignments, Security Agreement Supplements and security
agreements being legal, valid and binding obligations of each of the Loan
Parties

 

101

 

party thereto,
enforceable against such Loan Party in accordance with their terms, as to such
recordings, filings, notices, endorsements and other actions being sufficient
to create valid and perfected liens on and security interests in such real and
personal properties, and as to such other matters as the Administrative Agent
may reasonably request;

 

(E)                                 as
promptly as practicable after the reasonable request of the Administrative
Agent, deliver to the Administrative Agent with respect to each parcel of real
property owned by the Loan Party or the Subsidiary of the Loan Party (other
than a Foreign Subsidiary) that is the subject of such request, title reports,
surveys and engineering, soils and other reports, and Phase I environmental
assessment reports, each in scope, form and substance reasonably satisfactory
to the Administrative Agent, provided,however, that to the extent that any of the Loan Parties or
any of its Subsidiaries shall have otherwise received any of the foregoing
items with respect to such real property, such items shall, promptly after the
receipt thereof, be delivered to the Administrative Agent;

 

(F)                                 upon
the occurrence and during the continuance of a Default under Section 8.01(a)
or 8.01(f) or an Event of Default, promptly execute and deliver, and
cause each of its Subsidiaries to promptly execute and deliver, any and all
instruments and take, and cause each of its Subsidiaries to take, any and all
such other actions as may be necessary or as the Administrative Agent may deem
reasonably desirable in order to obtain and maintain from and after the time
any dividend or other distribution is paid or payable by any of the
Subsidiaries of any Loan Party a valid and perfected first and second priority
lien on and security interest in such dividend or other distribution; and

 

(G)                                at
any time and from time to time, promptly execute and deliver any and all
further instruments and documents and take all such other action as may be
necessary or as the Administrative Agent may deem reasonably desirable in
obtaining the full benefits of, or in perfecting and preserving the first and
second priority Liens created under, such Mortgages, collateral assignments,
Security Agreement Supplements and security agreements.

 

(b)                                 Notwithstanding
anything to the contrary in Section 6.11(a), neither the
Administrative Agent nor any Collateral Agent shall take or perfect, as the
case may be, a security interest in those assets (and shall not request the
preparation of surveys, soil reports and environmental site assessments) as to
which the Administrative Agent shall determine, in its reasonable discretion,
that the cost of obtaining or perfecting such Lien (including any mortgage,
stamp, intangibles or other tax, or of obtaining surveys, soil reports or
environmental site assessments not already available at such time) are
excessive in relation to the benefit to the Secured Parties of the security or
information afforded thereby.

 

6.12                           Further Assurances.  Promptly upon the request of the Administrative Agent, or any of
the Lenders through the Administrative Agent, at any time and from time to
time, (a) correct, and cause each of its Subsidiaries to promptly correct,
any defect or error that may be discovered in any of the Loan Documents or in
the execution, acknowledgment, filing or

 

102

 

recordation thereof and (b) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust
deeds, collateral assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments and take such further actions, and cause each
of its Subsidiaries promptly to do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust
deeds, collateral assignments, financing statements and continuations thereof,
termination statements, notices of collateral assignments, transfers,
certificates, assurances and other instruments and take such further action, as
may be necessary or as the Administrative Agent, or any of the Lenders through
the Administrative Agent, may reasonably request from time to time in order
to (i) carry out more effectively the provisions and purposes of the Loan
Documents or assure the Administrative Agent or the Lenders of their rights and
interests herein and therein, (ii) to the fullest extent permitted by
applicable law, subject any of the Loan Party’s or any of its Subsidiaries’
properties, assets, rights or interests to the first and second priority Liens
now or hereafter intended to be covered by any of the Collateral Documents,
(iii) perfect and maintain the validity, effectiveness and priority of any
of the Collateral Documents and any of the Liens intended to be created
thereunder and (iv) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Secured Parties the rights
granted or now or hereafter intended to be granted to the Secured Parties under
any of the Loan Documents or under any other instrument executed in connection
with any of the Loan Documents to which any Loan Party or any of its
Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do
so.

 

6.13                           Reporting Requirements.  Until the Termination Date, the Borrower
will furnish to the Administrative Agent:

 

(a)                                  Default
Notices.  As soon as possible and in
any event within three Business Days after the occurrence of each Default or
any event, development or occurrence that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
continuing on the date of such statement, a statement of a Responsible Officer
of the Borrower setting forth the details of such Default or such event,
development or occurrence (including, without limitation, the anticipated
effect thereof), the period of time such Default or such event, development or
occurrence has existed and been continuing and the action that the Borrower has
taken and/or proposes to take with respect thereto.

 

(b)                                 Quarterly
Financials.  As soon as available
and in any event within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, commencing with the Fiscal Quarter ending
June 30, 2004, a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and Consolidated statements
of income, stockholders’ equity and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous Fiscal
Quarter and ending with the end of such Fiscal Quarter and for the period commencing
at the end of the previous Fiscal Year and ending with the end of such Fiscal
Quarter, setting forth in comparative form, in the case of each such
Consolidated balance sheet, the corresponding figures as of the last day of the
corresponding period in the immediately

 

103

 

preceding
Fiscal Year and, in the case of each such Consolidated statement of income or
operations, stockholders’ equity and cash flows, the corresponding figures for
the corresponding period in the immediately preceding Fiscal Year, all in
reasonable detail (it being understood that such financial statements delivered
pursuant to this subsection (b) for the Fiscal Quarter ending
June 30, 2004 will not contain any information with respect to UPG and its
Subsidiaries).

 

(c)                                  Annual
Financials.  As soon as available
and in any event within 90 days after the end of each Fiscal Year, a copy of
the annual audit report for such Fiscal Year for the Borrower and its
Subsidiaries, including therein the Consolidated balance sheets of the Borrower
and its Subsidiaries as of the end of such Fiscal Year and Consolidated
statements of income or operations, stockholders’ equity and cash flows of the
Borrower and its Subsidiaries for such Fiscal Year, accompanied by an
unqualified opinion or an opinion otherwise reasonably acceptable to the
Required Lenders of PricewaterhouseCoopers LLP or other independent public
accountants of nationally recognized standing, setting forth in comparative
form, in the case of each such Consolidated balance sheet, the corresponding
figures as of the last day of the immediately preceding Fiscal Year, and, in
the case of each such Consolidated statement of income or operations,
stockholders’ equity and cash flows, the corresponding figures for the
corresponding period in the immediately preceding Fiscal Year, together with
(i) a letter from PricewaterhouseCoopers LLP or such independent public
accountants of nationally recognized standing stating that, in the course of
their regular audit of the Consolidated financial statements of the Borrower
and its Subsidiaries, which audit was conducted by such accountants in
accordance with generally accepted auditing standards, such accountants have
not obtained any knowledge that an Event of Default has occurred and is
continuing under Section 6.14 or if, in the opinion of such
accountants, an Event of Default has occurred and is continuing under Section 6.14,
a statement as to the status and nature thereof and (ii) in the event of any change
in the generally accepted accounting principles used by such accountants in the
preparation of the Consolidated financial statements of the Borrower and its
Subsidiaries referred to above in this Section 6.13(c) from GAAP,
such accountants shall also provide a reasonably detailed description of such
changes.

 

(d)                                 Compliance
Certificate.  Commencing for the
Fiscal Quarter ending on or about September 30, 2004, together with each
delivery to the Administrative Agent of the Consolidated financial statements
of the Borrower and its Subsidiaries referred to in Sections 6.13(b) and
6.13(c), a certificate in substantially the form of Exhibit D
hereto (each, a “Compliance
Certificate”) of a Senior Financial Officer, in form and
substance reasonably satisfactory to the Administrative Agent:

 

(i)                                     duly
certifying that, subject, in the case of any such Consolidated financial
statements delivered to the Administrative Agent and the Lenders pursuant to Section 6.13(b),
to the absence of footnote disclosure and normal year-end audit adjustments,
(A) the Consolidated financial statements of the Borrower and its Subsidiaries
delivered with such certificate fairly present in all material respects the
Consolidated financial condition of the Borrower and its Subsidiaries as of the
last day of such Fiscal Quarter or such Fiscal Year, as the

 

104

 

case may be,
and the Consolidated results of operations and cash flows of the Borrower and
its Subsidiaries for the Fiscal Quarter or the Fiscal Year ended on such date
and (B) the Consolidated financial statements of the Borrower and its
Subsidiaries delivered with such certificate have been prepared in accordance
with GAAP (or a reconciliation statement has been delivered together therewith
conforming such Consolidated financial statements to GAAP);

 

(ii)                                  duly
certifying that no Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature thereof, the period of
time such Default has existed and been continuing and the action that the
Borrower has taken and/or proposes to take with respect thereto; provided,
that if such Compliance Certificate demonstrates an Event of Default in respect
of any covenant contained in Section 6.14, the Equity Investors may
deliver, together with such Compliance Certificate, notice of their intent to
cure (a “Notice of Intent to Cure”)
such Event of Default through capital contributions or the purchase of Equity
Interests as contemplated pursuant to subclause (b)(xii) and the final
proviso of the definition of “Consolidated EBITDA”; provided  further,
that the delivery of a Notice of Intent to Cure shall in no way affect or alter
the occurrence, existence or continuation of any such Event of Default or the
rights, benefits, powers and remedies of the Administrative Agent and the
Lenders under any Loan Document unless and until such Event of Default has been
cured as a result of the action contemplated by such Notice of Intent to Cure
or otherwise;

 

(iii)                               setting
forth a schedule of the computations used by the Borrower in determining
compliance with the covenants contained in Sections 7.07 (to the extent
applicable) and 6.14 (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such Section,
and the calculation of the amount, ratio or percentage then in existence) and,
in the case of any such Consolidated financial statements delivered to the
Administrative Agent and the Lenders pursuant to Section 6.13(c),
the amount of Excess Cash Flow for the Fiscal Year covered thereby;

 

(iv)                              in
the case of any such Consolidated financial statements delivered to the
Administrative Agent and the Lenders pursuant to Section 6.13(b),
setting forth (A) a description in reasonable detail of all of the changes in
the generally accepted accounting principles applied in the preparation of such
financial statements from GAAP and (B) a statement of reconciliation, if and to
the extent necessary for determining whether any of the changes in the
generally accepted accounting principles applied in the preparation of such
financial statements would affect the calculation of, or compliance with,
Sections 7.07 (to the extent applicable) or 6.14, conforming such
Consolidated financial statements to GAAP; and

 

(v)                                 commencing
upon the occurrence of the Holding Company Event, setting forth a
schedule in reasonable detail of the computations used by Holdings in determining
compliance with the provisions in Section 7.02(c)(ii).

 

105

 

(e)                                  Forecasts.  As soon as available and in any event at
least 30 days after the first day of each Fiscal Year, commencing with the
Fiscal Year ending December 31, 2004, Consolidated forecasts prepared by
management of the Borrower of balance sheets and statements of income,
stockholders’ equity and cash flows on a quarterly basis for such Fiscal Year
in a form reasonably satisfactory to the Administrative Agent and setting forth
in comparative form the corresponding figures for the immediately preceding
Fiscal Year.

 

(f)                                    Schedule Updates.  Together with each Compliance Certificate
delivered pursuant to Section 6.13(d), amendments and supplements
to Schedule 5.19 to this Agreement, Schedules V and VII
to each Security Agreement and such other Schedules to any of the Loan
Documents as the Administrative Agent shall reasonably request, in each case so
as to ensure that, at the time of the delivery of such amendments and
supplements, such Schedules are accurate and complete in all material respects
as to the subject matter thereof.

 

(g)                                 Accountants’ Letters, Etc.  Promptly
upon receipt thereof, copies of all final “management
recommendation letters” submitted to any Loan Party or any of its
Subsidiaries by any independent auditors of such Loan Party or any of its
Subsidiaries in connection with each annual audit of its Consolidated financial
statements made by such auditors.

 

(h)                                 Licenses,
Etc.  Promptly and in any event
within five Business Days after receipt thereof, notice of any actual, pending
or threatened suspension, termination or revocation of any of the Governmental
Authorizations of any of the Loan Parties or any of their Subsidiaries, or any
enjoinment, barring or suspension of the ability of the or any such Loan Party
or Subsidiary to conduct any of its businesses in the ordinary course, in each
case, that could reasonably be expected to have a Material Adverse Effect.

 

(i)                                     Litigation.
 Promptly and in any event within five
Business Days after the service upon any Loan Party or any of its Subsidiaries
of a pleading, summons or other service of process notifying it of the
commencement thereof, notice of all actions, suits, investigations, litigation,
arbitrations and proceedings against or affecting such Loan Party or any of its
Subsidiaries or any of the property or assets thereof in any court or before
any arbitrator or by or before any Governmental Authority of any kind in which
there is a reasonable likelihood of an adverse determination and that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; and promptly after the occurrence thereof, notice of
any adverse change in the status, or in the reasonably anticipated financial
effect on such Loan Party or any of its Subsidiaries, of any such action, suit,
investigation, litigation, arbitration or proceeding (and, in each case, upon
the reasonable request of the Administrative Agent, any other information
available to any of the Loan Parties or any of their Subsidiaries with respect
to any of the foregoing that would enable the Administrative Agent and the
Lenders to more fully evaluate such action, suit, investigation, litigation,
arbitration or proceeding, unless the Loan Party or the applicable Subsidiary
is precluded from disclosing any such report or statement pursuant to a
confidentiality agreement with the applicable Governmental Authority).

 

106

 

(j)                                     Securities Reports, Etc.  Promptly
and in any event within five Business Days after the sending or filing thereof,
copies of all proxy statements, financial statements, change reports and other
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, partners or members (or equivalent persons thereto), and copies
of all regular, periodic and special reports and information forms, and all
registration statements, prospectuses and information memoranda, that any Loan
Party or any of its Subsidiaries files with the Securities and Exchange
Commission or any Governmental Authority that may be substituted therefor, or
with any national or international securities exchange, and copies of all
private placement or offering memoranda pursuant to which securities of such
Loan Party or Subsidiary that are exempt from registration under the Securities
Act are proposed to be issued and sold thereby.

 

(k)                                  Creditor
Reports.  Promptly after the
furnishing or receipt thereof, copies of any statement or report furnished to
or received from any other holder of the securities of any Loan Party or any of
its Subsidiaries pursuant to the terms of any indenture, loan or credit
agreement, receivables purchase agreement or similar agreement of such Loan
Party or Subsidiary with amounts outstanding or having commitments to extend
credit in an aggregate principal amount of at least $20,000,000 (including,
without limitation, any amendments, waivers or consents given or requested in
respect thereof and any notices of default, acceleration or redemption
delivered thereunder) and not otherwise required to be furnished to the
Administrative Agent (for the benefit of the Lenders) pursuant to any other
clause of this Section 6.13.

 

(l)                                     ERISA
Events and ERISA Reports; Plan Terminations, Etc.  (i) Promptly and in any event within 15 days after any of the
Loan Parties or any of the ERISA Affiliates knows or has reason to know that
any ERISA Event which could reasonably be expected to result in a material liability
has occurred, a statement of a Responsible Officer of the Borrower describing
such material ERISA Event and the action, if any, that the Borrower, such other
applicable Loan Party or such ERISA Affiliate has taken and/or proposes to take
with respect thereto, together with materials or information filed or to be
filed with any Governmental Authority or any trustee for any Plan as a result
of such material ERISA Event; (ii) on the date on which any records, documents
or other information must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA, a copy of such records, documents and
information; (iii) promptly and in any event within five (5) Business Days
after receipt thereof by any of the Loan Parties or any of the ERISA
Affiliates, copies of each notice from the PBGC stating its intention to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan; (iv) promptly following the request of the Administrative Agent,
or any of the Lenders through the Administrative Agent, therefor, a copy of the
most recent Schedule B (Actuarial Information) to the annual report (Form
5500) with respect to each of the Pension Plans; and (v) promptly and in any
event within 15 Business Days after receipt thereof by any of the Loan Parties
or any of the ERISA Affiliates from the sponsor of a Multiemployer Plan, copies
of each notice concerning (A) the imposition of Withdrawal Liability by
any such Multiemployer Plan, (B) the reorganization or termination, within
the meaning of Title IV of ERISA, of any such Multiemployer Plan or
(C) the amount of liability incurred, or that could reasonably be expected
to be incurred, by such Loan Party

 

107

 

or any such
ERISA Affiliate in connection with any event described in subclause (v)(A)
or (v)(B) of this Section 6.13(l).

 

(m)                               “Reportable Transaction” Notification.  The
Borrower shall promptly notify the Administrative Agent of any determination by
the Borrower to treat the Loans and/or the related transactions contemplated by
this Agreement as a “reportable transaction” (within the meaning of Treasury
Regulation Section 1.6011-4), and shall provide the Administrative Agent
(within five Business Days of such determination) with a duly completed copy of
IRS Form 8886 or any successor form.

 

(n)                                 Environmental
Conditions.  Promptly and in any
event within ten Business Days after the assertion or occurrence thereof:

 

(i)                                     notice
of any condition or occurrence on or arising from any property owned or
operated by the Borrower or any of its Subsidiaries that resulted or is alleged
to have resulted in noncompliance in any material respect by the Borrower or
such Subsidiary with any applicable Environmental Law or Environmental Permit;

 

(ii)                                  any
condition or occurrence on any property owned or operated by the Borrower or
any of its Subsidiaries that could reasonably be expected to cause such
property to be subject to any material restrictions on the ownership, occupancy
or use thereof or on the transferability of such property by the Borrower or
its applicable Subsidiary under any Environmental Law; and

 

(iii)                               the
taking of any removal or remedial action involving material costs or
liabilities in response to the actual or alleged presence of any Hazardous
Material on any property owned or operated by the Borrower or any of its
Subsidiaries as required by any Environmental Law, any Environmental Permit or
any Governmental Authority.

 

All such notices shall describe in reasonable detail
the nature of the condition, occurrence, removal or remedial action described
therein, the period of time such condition or circumstance has existed and been
continuing and, in the case of each such condition or occurrence, the action
that the Borrower or its applicable Subsidiary has taken and/or proposes to
take with respect thereto.

 

(o)                                 Insurance.  As soon as available and in any event within
90 days after the end of each Fiscal Year, commencing with the Fiscal Year
ending December 31, 2004, a report summarizing the insurance coverage in
effect for the Loan Parties and their respective Subsidiaries, specifying
therein the type, carrier, amount, deductibles and co-insurance requirements
and expiration dates thereof and containing such additional information as any
of the Lenders, through the Administrative Agent, may reasonably request.

 

(p)                                 Other
Information.  Such other information
respecting the business, condition (financial or otherwise), operations,
liabilities (actual or contingent), performance, properties or prospects of the
Borrower or any of its Subsidiaries as any of

 

108

 

the Lenders,
through the Administrative Agent, may from time to time reasonably request.

 

6.14                           Financial Covenants.

 

(a)                                  Total
Leverage Ratio.  Until the
Termination Date, the Borrower will maintain a Total Leverage Ratio as of the
last day of each Measurement Period set forth on Schedule 1.01(d)
of not more than the Applicable Ratio for such Measurement Period; and

 

(b)                                 Interest
Coverage Ratio.  Until the
Termination Date in respect of the First Lien Facility, the Borrower will
maintain an Interest Coverage Ratio as of the last day of each Measurement
Period set forth below of not less than the amount set forth below for each
Measurement Period set forth below:

 

	
  For Each Measurement

  Period Ending During

  the Period

  	
   

  	
  Ratio

  	
   

  
	
  From
  September 30, 2004 through Fiscal Quarter ending September 30, 2005

  	
   

  	
  2.25:1.00

  	
   

  
	
  From
  October 1, 2005 through Fiscal Quarter ending September 30, 2006

  	
   

  	
  2.50:1.00

  	
   

  
	
  From
  October 1, 2006 through Fiscal Quarter ending September 30, 2007

  	
   

  	
  2.75:1.00

  	
   

  
	
  From
  October 1, 2007 through Fiscal Quarter ending September 30, 2008

  	
   

  	
  3.00:1.00

  	
   

  
	
  Each Fiscal
  Quarter thereafter

  	
   

  	
  3.25:1.00

  	
   

  

 

6.15                           Post-Closing Matters.  (a) Upon the occurrence of the Holding
Company Event, Holdings shall (i) execute and deliver a Holdings Joinder
Agreement and Guaranty in substantially the form of Exhibit K hereto
(the “Holdings Joinder
and Guaranty”) and a Security Agreement Supplement for each of
the Security Agreements, (ii) deliver certificates representing the Pledged
Interests of Holdings in the Borrower to the Applicable Collateral Agent, and
(iii) have taken each such other action that would be required in respect of a
newly-formed Subsidiary of the Borrower under Section 6.11(a)
(without regard to any time period specified therein), including, without
limitation, delivery of an opinion of counsel to Holdings on the terms set
forth in clause (a)(D) of Section 6.11.

 

(b)                                 With
respect to certain collateral security matters, the Borrower will cause to be
furnished all documents and instruments, and cause to be performed all actions,
in each case of the type and by the “Required Date” specified therefor (or such
later date (not to exceed 45 days) as the Administrative Agent may agree), in Schedule 6.15.

 

109

 

ARTICLE VII

NEGATIVE COVENANTS

 

Until the Termination Date, neither Holdings nor the
Borrower shall, at any time:

 

7.01                           Liens, Etc. 
Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with
respect to any of its property or assets of any character (including, without
limitation, accounts), whether now owned or hereafter acquired, or sign or file
or authorize, or permit any of its Subsidiaries to sign or file or authorize,
under the Uniform Commercial Code or any similar Requirements of Law of any
jurisdiction, a financing statement (or the equivalent thereof) that names
Holdings or any of its Subsidiaries as debtor, or sign or authorize, or permit
any of its Subsidiaries to sign or authorize, any security agreement
authorizing any secured party thereunder to file any such financing statement
(or the equivalent thereof), excluding, however, from the operation of
the foregoing restrictions:

 

(a)                                  Liens
created under the Loan Documents;

 

(b)                                 Permitted
Liens;

 

(c)                                  Liens
existing on the Amendment and Restatement Closing Date and described on Schedule 7.01
hereto;

 

(d)                                 (i)
purchase money Liens upon or in real property or equipment acquired or held by
the Borrower or any of its Subsidiaries to secure the purchase price of such
real property or equipment or to secure Indebtedness incurred solely for the
purpose of financing the acquisition, construction or improvement of any such
real property or equipment to be subject to such Liens, or Liens existing on
any such real property or equipment at the time of its acquisition or the
completion of its construction or improvement (other than any such Liens
created in contemplation of such acquisition, construction or improvement that
do not secure the purchase price of such real property or equipment) and (ii)
Liens arising in connection with Capitalized Leases; provided, however, that (A) no such Lien under this subclause (d)
shall extend to or cover any property or assets other than the real property or
equipment being so acquired, constructed or improved and the products and
proceeds thereof, (B) such Liens attach concurrently or within 120 days after
the acquisition, repair, replacement or improvement (as applicable) of the
property subject to such Liens and (C) any Indebtedness secured by such Liens
shall otherwise be permitted under Section 7.02(b)(iii);

 

(e)                                  Liens
upon any of the property and assets (other than any Equity Interests in any
Person) existing at the time such property or asset is purchased or otherwise
acquired by the Borrower or any of its Subsidiaries; provided that any
such Lien was not created in contemplation of such purchase or other
acquisition and does not extend to or cover any property or assets other than
the property or asset being so purchased or otherwise acquired and the products
and proceeds thereof; and provided  further  that any Indebtedness or other obligations
secured by such Liens shall otherwise be permitted under Section 7.02;

 

110

 

(f)                                    Liens
upon any of the property and assets (other than any Equity Interests in any
Person) of a Person and its Subsidiaries existing at the time such Person is
merged into or consolidated with any of the Subsidiaries of the Borrower, or
otherwise becomes a Subsidiary of the Borrower, in accordance with the terms of
the Loan Documents; provided that any such Lien was not created in
contemplation of such merger, consolidation or acquisition and does not extend
to or cover any property or assets other than property and assets and the
products and proceeds thereof of the Person and its Subsidiaries being so
merged into or consolidated with the applicable Subsidiary of the Borrower or
being acquired by the Borrower or its applicable Subsidiary, as the case may
be; and provided  further
that any Indebtedness or other obligations secured by such Lien shall otherwise
be permitted under Section 7.02;

 

(g)                                 deposits
made, and letters of credit issued, to secure the performance of Operating
Leases of the Borrower and its Subsidiaries in the ordinary course of business;
provided that no such
Lien shall extend to or cover any property or assets other than such deposit or
such letter of credit and the property and assets subject to such Operating
Lease, as applicable;

 

(h)                                 Liens
arising solely from precautionary filings of financing statements under the
Uniform Commercial Code of the applicable jurisdictions in respect of Operating
Leases entered into by the Borrower or any of its Subsidiaries in the ordinary
course;

 

(i)                                     Liens
upon any of the property and assets of the Foreign Subsidiaries to secure
Indebtedness otherwise permitted under Section 7.02(b)(vi);

 

(j)                                     Liens
not otherwise permitted under this Section 7.01 securing
obligations of the Borrower and its Subsidiaries in an aggregate amount not to
exceed the Applicable Basket Amount at any time outstanding;

 

(k)                                  the
modification, replacement, extension or renewal of any Lien otherwise permitted
to be created or to exist under clauses (c), (e), (f) and (j)
of this Section 7.01 upon or in the same property and assets
theretofore subject thereto; provided that no such extension, renewal or
replacement shall extend to or cover any property or assets not theretofore
subject to the Lien being extended, renewed or replaced and shall not secure
any additional Indebtedness or other obligations other than (A) after acquired
property that is affixed or incorporated into the property covered by such Lien
and (B) the proceeds and products thereof; and provided  further that any Indebtedness
secured by such Liens shall otherwise be permitted under the terms of the Loan
Documents; and

 

(l)                                     deposits
made, and letters of credit issued, to secure the performance of trade
contracts of the Borrower and its Subsidiaries in the ordinary course of
business.

 

7.02                           Indebtedness. 
Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Indebtedness
other than:

 

(a)                                  in
the case of the Borrower, (i) subject to clause (ii) below, Permitted
Subordinated Indebtedness in an aggregate amount not to exceed $20,000,000 at
any time

 

111

 

outstanding
and (ii) in an aggregate amount in excess of $20,000,000 solely to the extent
that such excess amounts are applied to prepay the Loans pursuant to Section 2.05(b)(iv);
and

 

(b)                                 in
the case of the Borrower and its Subsidiaries,

 

(i)                                     Indebtedness
under the Loan Documents;

 

(ii)                                  Indebtedness
of (A) the Borrower owing to Holdings or any of the Restricted Subsidiaries,
(B) any of the Restricted Subsidiaries owing to Holdings or the Borrower or any
of the other Restricted Subsidiaries, (C) any of the Unrestricted Subsidiaries
owing to Holdings or the Borrower or any of the Restricted Subsidiaries to the
extent the Investment in such Unrestricted Subsidiary is otherwise permitted
under Section 7.05(d) and (D) any of the Unrestricted Subsidiaries
owing to any of the other Unrestricted Subsidiaries; provided that all
such intercompany Indebtedness owing by any Loan Party shall be evidenced by a
promissory note containing subordination provisions in substantially the form
of Exhibit L hereto and such other terms and conditions as shall be
reasonably acceptable to the Administrative Agent, which promissory note shall,
in each case, to the extent owing to a Loan Party, be pledged as Collateral to
the Administrative Agent, on behalf of the Secured Parties, under the
applicable Collateral Documents immediately upon the creation thereof;

 

(iii)                               Indebtedness
secured by Liens permitted under Section 7.01(d) in an aggregate
principal amount not to exceed $20,000,000 at any time outstanding;

 

(iv)                              Contingent
Obligations of Holdings, the Borrower and its Subsidiaries of Indebtedness of
the Borrower or such Subsidiary; provided  that each such obligation is not otherwise prohibited under
the terms of the Loan Documents;

 

(v)                                 Indebtedness
comprised of trade payables or other accounts payable to trade creditors
incurred in the ordinary course of business to the extent otherwise included in
the definition of “Indebtedness”
set forth in Section 1.01;

 

(vi)                              Indebtedness
of one or more Foreign Subsidiaries arising in the ordinary course of business
in an aggregate principal amount not to exceed $15,000,000 at any time
outstanding; provided  that
all such Indebtedness incurred pursuant to this subclause (b)(vi) shall
be nonrecourse in all respects to the property and assets of the Loan Parties
and their Subsidiaries (other than one or more of the Foreign Subsidiaries);

 

(vii)                           Indebtedness
existing at the time that any property or asset is purchased or otherwise
acquired by the Borrower or any of its Subsidiaries, or that any Person (other
than the Borrower or any of its Subsidiaries) is merged into or consolidated
with any of the Subsidiaries of the Borrower or otherwise becomes a Subsidiary
of the Borrower, in accordance with the terms of the Loan Documents; provided
that (x) no such Indebtedness shall be incurred in

 

112

 

contemplation
of any such purchase or other acquisition or any such merger, consolidation or
acquisition, (y) such Indebtedness shall be secured, if at all, solely by Liens
permitted under Section 7.01(e) or 7.01(f) and (z) the
Borrower and its Subsidiaries will be in Pro Forma Compliance with the covenants
set forth in Section 6.14, after giving effect to such Permitted
Acquisition and the incurrence or issuance of such Indebtedness;

 

(viii)                        Indebtedness
not otherwise permitted under this Section 7.02 in an aggregate
principal amount not to exceed $40,000,000 at any time outstanding;

 

(ix)                                endorsement
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business;

 

(x)                                   Indebtedness
extending the maturity of, or refunding, refinancing or replacing, in whole or
in part, any Indebtedness incurred under any of subclauses (b)(vii), (b)(xix)
and (c)(ii) of this Section 7.02; provided, however,
that (A) the aggregate principal amount of such extended, refunding,
refinancing or replacement Indebtedness shall not be increased above the
principal amount thereof and the premium, if any, payable thereon outstanding
immediately prior to such extension, refunding, refinancing or replacement,
except by an amount equal to a reasonable premium paid, and fees and expenses
reasonably incurred, in connection with such modification, refinancing,
refunding, renewal or extension and by an amount equal to any existing
commitments unutilized thereunder or as otherwise permitted pursuant to Section 7.02,
(B) the direct and contingent obligors therefor shall not be changed as a
result of or in connection with such extension, refunding, refinancing or
replacement, (C) such extended, refunding, refinancing or replacement
Indebtedness shall not have a stated maturity date or mandatory redemption date
prior to the stated maturity date or mandatory redemption date of the
Indebtedness being so extended, refunded, refinanced or replaced, (D) if the
Indebtedness being so extended, refunded, refinanced or replaced is
subordinated in right of payment or otherwise to the Obligations of the
Borrower or any of its Subsidiaries under and in respect of the Loan Documents,
such extended, refunding, refinancing or replacement Indebtedness shall be
subordinated to such Obligations to at least the same extent, (E) the terms of
any such extending, refunding, refinancing or replacement Indebtedness (and of
any agreement entered into and of any instrument issued in connection
therewith) shall be not be materially less favorable to the Borrower and its
Subsidiaries or to the rights or interests of the Lenders than the terms of the
Indebtedness being so extended, refunded, refinanced or replaced and (F)
immediately before and immediately after giving pro forma effect to any such extension, refunding,
refinancing or replacement, no Default shall have occurred and be continuing;

 

(xi)                                Swap
Contracts entered into in the ordinary course of business of the Borrower or
such Subsidiary for the purpose of hedging against fluctuations in the interest
rates, foreign exchange rates or commodities pricing risks; provided
that all such Swap Contracts shall be nonspeculative in nature (including,
without limitation, with respect to the term and purpose thereof);

 

113

 

(xii)                             Indebtedness
of Borrower and its Subsidiaries owed to the seller of any property acquired in
a Permitted Acquisition on an unsecured subordinated basis, in each case, so
long as both immediately prior and after giving effect thereto, (x) no
Event of Default shall exist or result therefrom, and (y) the Borrower and
its Subsidiaries will be in Pro Forma Compliance with the covenants
set forth in Section 6.14, after giving effect to such Permitted
Acquisition and the incurrence or issuance of such Indebtedness;

 

(xiii)                          Indebtedness
(other than for borrowed money) subject to Liens permitted under Section 7.01;

 

(xiv)                         Indebtedness
representing deferred compensation to employees of Holdings and its
Subsidiaries in the ordinary course of business;

 

(xv)                            Indebtedness consisting of promissory
notes issued by any Loan Party to their respective current or former officers,
directors and employees, their respective estates, spouses or former spouses to
finance the purchase or redemption of Equity Interests of Holdings permitted by
Section 7.06;

 

(xvi)                         Indebtedness
incurred by Holdings or its Subsidiaries in a Permitted Acquisition or
Disposition under agreements providing for the adjustment of the purchase price
or similar adjustments, in each case to the extent of such purchase price or
similar adjustment;

 

(xvii)                      Indebtedness
consisting of obligations of Holdings or its Subsidiaries under deferred
compensation or other similar arrangements incurred by such Person in
connection with the Nu-Gro Transaction, the UPG Acquisition and Permitted
Acquisitions;

 

(xviii)                   Indebtedness
in respect of netting services, overdraft protections and similar arrangements
in each case in connection with deposit accounts and entered into in the
ordinary course of business; and

 

(xix)                           Indebtedness
existing as of the Amendment and Restatement Closing Date and described on Schedule 7.02;

 

(c)                                  in
the case of Holdings:

 

(i)                                     Indebtedness
under the Loan Documents;

 

(ii)                                  unsecured
Indebtedness of Holdings (“Permitted Holdco Debt”) that
(A) is not subject to any Guarantee by the Borrower or any Restricted
Subsidiary, (B) will not mature prior to the date that is ninety-one (91)
days after the scheduled Maturity Date of the Second Lien Facility,
(C) has no scheduled amortization or payments of principal, (D) does
not permit any payments in cash of interest or other amounts in respect of the
principal thereof for at least five (5) years from the date of the issuance or
incurrence thereof, (E) has mandatory prepayment, repurchase or
redemption, covenant, default and remedy provisions

 

114

 

customary for
senior discount notes of an issuer that is the parent of a borrower under
senior secured credit facilities, and in any event, with respect to covenant,
default and remedy provisions, no more restrictive than those set forth in the
indenture for the Senior Subordinated Notes taken as a whole (other than
provisions customary for senior discount notes of a holding company), and (F)
contains provisions with respect to paid-in-kind interest which are reasonably
satisfactory to the Administrative Agent; provided
that any such Indebtedness shall constitute Permitted Holdco Debt only if (i)
both before and after giving effect to the issuance or incurrence thereof, no
Event of Default shall have occurred and be continuing, (ii) after giving Pro Forma Effect to the issuance or
incurrence thereof, the Holdings Total Leverage Ratio shall be less than 5.50:1
and the Total Leverage Ratio shall be less than 3.50:1, and (iii) the Chief
Financial Officer of the Borrower shall have delivered an officer’s certificate
demonstrating Pro Forma Compliance
with the covenants set forth in Section 6.14 in form and substance
reasonably satisfactory to the Administrative Agent, it being understood that
any capitalized or paid-in-kind interest or accreted principal on such
Indebtedness shall not constitute an issuance or incurrence of Indebtedness for
purposes of this proviso;

 

(iii)                               Indebtedness
permitted pursuant to clauses  (b)(ii), (iv), (xiv),
(xv), (xvi) and (xvii) above; and

 

(iv)                              Indebtedness
owed to the seller of any property acquired in a Permitted Acquisition on an
unsecured subordinated basis so long as, if applicable, Holdings complies with
the proviso in Section 7.06(g)(v) (whether or not any Restricted
Payment is made to Holdings).

 

7.03                           Mergers, Etc. 
Merge into or consolidate with any Person or permit any Person to merge
into or consolidate with it, or permit any of its Subsidiaries to do so, except
that:

 

(a)                                  any
of the Subsidiaries of the Borrower may merge into or consolidate with the
Borrower; provided that the Borrower is the surviving corporation;

 

(b)                                 any
of the Subsidiaries of the Borrower may merge into or consolidate with any of
the Restricted Subsidiaries; provided that the Person formed by such
merger or consolidation is a Restricted Subsidiary;

 

(c)                                  any
of the Unrestricted Subsidiaries may merge into or consolidate with any of the
other Unrestricted Subsidiaries;

 

(d)                                 in
connection with any Investment permitted by Section 7.05, any of
the Subsidiaries of the Borrower may merge into or consolidate with any other
Person or permit any other Person to merge into or consolidate with it; provided
that (i) if such Subsidiary of the Borrower is a Restricted Subsidiary, the
Person formed by such merger or consolidation shall be a Restricted Subsidiary,
(ii) if such Subsidiary is a non-wholly owned Domestic Subsidiary, the Person
formed by such merger or consolidation shall be a Domestic Subsidiary and (iii)
if such Subsidiary is a Foreign Subsidiary, the Person 

 

115

 

formed by such
merger or consolidation shall be a Subsidiary of the Borrower; and provided  further that the Person with which
such Subsidiary is merging or consolidating is engaged in substantially the
same line of business as one or more of the businesses engaged in by the
Borrower and its Subsidiaries on the date of this Agreement and those
reasonably related or ancillary thereto;

 

(e)                                  in
connection with any Disposition permitted under Section 7.04(h),
any of the Subsidiaries of the Borrower may merge into or consolidate with any
other Person or permit any other Person to merge into or consolidate with it;
and

 

(f)                                    the
Borrower and its Subsidiaries may consummate the UPG Acquisition;

 

(g)                                 the
Borrower may consummate the Holding Company Event; and

 

(h)                                 the
Borrower may enter into a merger for the purpose of changing its jurisdiction
of incorporation to another jurisdiction located within the United States, provided
that (i) if the Borrower is not the continuing or surviving Person, such Person
shall assume the obligations and liabilities of the Borrower under the Loan
Documents in a manner and pursuant to documents reasonably acceptable to the
Administrative Agent and (ii) the Administrative Agent shall have reasonably
determined that such merger will not materially and adversely affect the rights
and remedies of the Administrative Agent, any Secured Party or any Lender under
any of the Loan Documents.

 

In all cases under this Section 7.03,
immediately before and immediately after giving pro forma effect to such merger or consolidation, no Default
shall have occurred and be continuing. 
In addition, in the case of any merger or consolidation effected
pursuant to clause (d), (e) or (h) of this Section 7.03,
immediately after giving effect to such merger or consolidation, the Borrower
and its Subsidiaries shall be in pro forma
compliance with all of the covenants set forth in Section 6.14,
such compliance to be determined on the basis of the Required Financial
Information most recently delivered to the Administrative Agent and the Lenders
as though such merger or consolidation had been consummated as of the first day
of the fiscal period covered thereby.

 

7.04                           Dispositions. 
Dispose of, or permit any of its Subsidiaries to Dispose of, any
property or assets (including, without limitation, any Equity Interests of its
Subsidiaries), except:

 

(a)                                  the
Borrower and its Subsidiaries may sell inventory in the ordinary course of
business;

 

(b)                                 the
Borrower and its Subsidiaries may Dispose of property and assets in a
transaction otherwise permitted under Section 7.01, Section 7.03
(so long as in the case of clause (d) thereof, such Disposition is
permitted pursuant to a different subclause of this Section 7.04), 7.05
or 7.06;

 

(c)                                  (i)
the Borrower may Dispose of any of its property and assets to any of the
Restricted Subsidiaries, (ii) any of the Restricted Subsidiaries may Dispose of
any of its property and assets to the Borrower or any of the other Restricted
Subsidiaries, (iii)

 

116

 

any of the
Unrestricted Subsidiaries may Dispose of any of its property and assets for an
amount not in excess of Fair Market Value to the Borrower or any of its
Restricted Subsidiaries and (iv) any of the Unrestricted Subsidiaries may
Dispose of any of its property and assets to any of the Unrestricted
Subsidiaries;

 

(d)                                 the
Borrower and its Subsidiaries may Dispose of any obsolete, damaged or worn
out assets that are no longer useful or necessary in the conduct of their
businesses and operations in the ordinary course of business;

 

(e)                                  leases
or subleases or licenses or sublicenses of real property and equipment of the
Borrower or any of its Subsidiaries to any Person so long as each such lease or
sublease or license or sublicense, as the case may be, shall not interfere in
any material respect with the business or operations of the Borrower or any of
its Subsidiaries;

 

(f)                                    licenses
or sublicenses of IP Rights of the Borrower or any of its Subsidiaries in the
ordinary course of business;

 

(g)                                 the
Borrower and its Subsidiaries may Dispose of property and assets not otherwise
permitted to be Disposed of pursuant to this Section 7.04 so long
as the (A) aggregate net book value of all of the property and assets of the
Borrower and its Subsidiaries so Disposed of pursuant to this clause (g)
from and after the Amendment and Restatement Closing Date (x) in any single
transaction or series of related transactions does not exceed $10,000,000 and
(y) in the aggregate for all transactions pursuant to this clause (g)
does not exceed $50,000,000 and (B) the gross proceeds from any such
Disposition shall be at least equal to the Fair Market Value of the property
and assets so Disposed of, determined at the time of such Disposition;

 

(h)                                 any
Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;
provided, that if the transferor in such a transaction is a Loan Party, then
(i) the transferee must either be a Loan Party or (ii) to the extent constituting
an Investment, such Investment must be a permitted Investment in or
Indebtedness of a Subsidiary which is not a Loan Party in accordance with Sections
7.02 and 7.05, respectively;

 

(i)                                     Dispositions
of property to the extent that (i) such property is exchanged for credit
against the purchase price of similar replacement property or (ii) the proceeds
of such Disposition are promptly applied to the purchase price of such
replacement property;

 

(j)                                     Dispositions
of accounts receivable solely in connection with the collection or compromise
thereof;

 

(k)                                  transfers
of property subject to casualty or condemnation events upon receipt of the Net
Cash Proceeds of such event;

 

(l)                                     Dispositions
by the Borrower and its Subsidiaries of property pursuant to sale-leaseback
transactions are permitted; provided, that (i) the Fair Market Value of
all

 

117

 

property so
Disposed of shall not exceed $15,000,000 from and after the Amendment and
Restatement Closing Date and (ii) the purchase price for such property shall be
paid to the Borrower or such Subsidiary for not less than 75% cash
consideration; provided  further that this Section 7.04
shall not prohibit any sale-leaseback transaction resulting from the incurrence
of any lease in respect of any capital asset entered into within 180 days of
the acquisition of such capital asset for the purpose of providing permanent
financing of such capital asset;

 

(m)                               the
sale, transfer or disposition of Cash Equivalents;

 

(n)                                 consignments
or similar arrangements for the sale of assets to third parties in the ordinary
course of business consistent with past practice;

 

(o)                                 sales
or other dispositions of any minority interest in a joint venture or other
Person;

 

(p)                                 Dispositions
described on Schedule 7.04 hereto;

 

(q)                                 Dispositions
in connection with the rationalization or integration of Nu-Gro and its
Subsidiaries and UPG and its Subsidiaries, in each case, with the Borrower and
its Subsidiaries after giving effect to the Nu-Gro Acquisition and the UPG
Acquisition, in an aggregate amount not to exceed $15,000,000 and occurring
within three years after the Initial Closing Date;

 

(r)                                    intercompany
sales of property in the ordinary course of business, provided that in
the case of any such sale from Holdings, the Borrower or any Restricted
Subsidiary to an Unrestricted Subsidiary, for a purchase price less than its
net book value, then the difference between such purchase price and the net
book value shall otherwise be permitted under Section 7.02 or Section 7.05(d);
and

 

(s)                                  Dispositions
of IP Rights for consideration other than cash, so long as such Dispositions
could not reasonably be expected to have a Material Adverse Effect;

 

In connection with any Disposition of Collateral
permitted by this Section 7.04 (which for the avoidance of doubt,
shall not include a Disposition of all or substantially all of the Collateral
or a release of all or substantially all of the value of the Guaranty) the
Administrative Agent will, at the Borrower’s expense, execute and deliver such
releases of Collateral as may be reasonably necessary to evidence the release
of all Liens on such Collateral under the Loan Documents.

 

7.05                           Investments in Other Persons.  Purchase, acquire, make or hold, or permit
any of its Subsidiaries to purchase, acquire, make or hold, any Investment in
any Person, except:

 

(a)                                  Investments
existing on the Amendment and Restatement Closing Date and described on Schedule 7.05
hereto and any modification,
replacement, renewal, or extension thereof; provided that the amount of the
original Investment is not increased except by the terms of such Investment or
as otherwise permitted by this Section 7.05;

 

(b)                                 Investments
in cash and Cash Equivalents;

 

118

 

(c)                                  Investments
in respect of Swap Contracts permitted by Section 7.02(b)(xi);

 

(d)                                 Investments
by (i) the Borrower, Holdings or any Restricted Subsidiary in the Borrower,
Holdings or any Restricted Subsidiary, (ii) the Borrower, Holdings or any Restricted
Subsidiary in any Unrestricted Subsidiary in an aggregate principal amount for
all such Investments not to exceed the Applicable Basket Amount less the
aggregate amount of any Indebtedness incurred pursuant to clause (C) of Section 7.02(b)(ii),
(iii) any Unrestricted Subsidiary in Holdings or any of its Subsidiaries, and
(iv) by Holdings in the Parent (to the extent of Restricted Payments permitted
to be made by Holdings to the Parent pursuant to Section 7.06(h));

 

(e)                                  Investments
by the Borrower and its Subsidiaries in account debtors received in connection
with the bankruptcy or reorganization, or in settlement of the delinquent
obligations of financially troubled suppliers or customers, in the ordinary
course of business and in accordance with applicable collection and credit
policies established by the Borrower or such Subsidiary, as the case may be;

 

(f)                                    loans
and advances by Holdings and its Subsidiaries to their respective employees,
officers and directors in an aggregate amount not to exceed $2,500,000 at any
time outstanding;

 

(g)                                 the
acceptance of promissory notes, contingent payment obligations and other
noncash consideration received as payment of the purchase price of any property
or assets Disposed of in accordance with Section 7.04(h);

 

(h)                                 the
purchase or other acquisition of all of the Equity Interests in, or all or
substantially all of the property and assets of, any Person or of assets
constituting a business unit, line of business of or division of any Person
that, upon the consummation thereof, will be owned directly by the Borrower or
any of its Subsidiaries (including, without limitation, as a result of a merger
or consolidation with or into the Borrower or a Subsidiary of the Borrower,
except that in the case of any such acquisition by the Borrower or a Restricted
Subsidiary, the surviving entity of any such merger or consolidation shall be
the Borrower or a Restricted Subsidiary); provided that, with respect to
each purchase or other acquisition made pursuant to this clause (h) (each,
a “Permitted Acquisition”):

 

(i)                                     any
newly created or acquired Restricted Subsidiary shall comply with the
requirements of Section 6.11;

 

(ii)                                  the
lines of business of the Person to be (or the property and assets of which are
to be) so purchased or otherwise acquired shall be substantially the same lines
of business as one or more of the businesses engaged in by the Borrower and its
Subsidiaries on the date of this Agreement and those reasonably related or
ancillary thereto;

 

(iii)                               the
total cash consideration paid by or on behalf of the Borrower and its
Subsidiaries for any such purchase or other acquisition, when aggregated

 

119

 

with the total
cash consideration paid by or on behalf of the Borrower and its Subsidiaries
for all other purchases and other acquisitions made by the Borrower and its
Subsidiaries pursuant to this clause (h), shall not exceed $70,000,000
from and after the Amendment and Restatement Closing Date (it being understood
that all indemnities, earnouts and other similar contingent purchase price
payment obligations to, and the aggregate amounts paid or to be paid under
noncompete, consulting and other affiliated agreements with, the sellers
thereof, all reserves for liabilities with respect thereto and all assumptions
of Indebtedness in connection therewith shall in each case be included in
determining the amount of cash consideration expended, provided that to
the extent that any of the foregoing amounts is not known or determinable, such
amount shall be determined to be an amount reasonably estimated in good faith
to be payable at the time of the purchase or acquisition);

 

(iv)                              immediately
before and immediately after giving pro
forma effect to any such purchase or other acquisition, no Default
shall have occurred and be continuing; and

 

(v)                                 the
Borrower shall have delivered to the Administrative Agent, on behalf of the
Lenders, at least five Business Days prior to the date on which any such
purchase or other acquisition is to be consummated, a certificate of a Senior
Financial Officer, in form and substance reasonably satisfactory to the
Administrative Agent, certifying that all of the requirements set forth in this
clause (h) have been satisfied or will be satisfied on or prior to the consummation
of such purchase or other acquisition (and including a schedule that sets
forth in reasonable detail all of the computations used by the Borrower in
determining compliance with such requirements);

 

(i)                                     Investments
by the Borrower and its Subsidiaries not otherwise permitted under this Section 7.05
in an aggregate amount not to exceed the sum of (i) the Applicable Basket
Amount and (ii) (w) the portion of the Cumulative Excess Cash Flow which is not
prepaid to the Lenders pursuant to Section 2.06(b)(i) or not used
to make Restricted Payments pursuant to Section 7.06 or has not
been used to make Investments under this Section 7.05  plus
(x) the aggregate amount of Net Cash Proceeds of Permitted Holdco Debt, plus
(y) the aggregate amount of Net Cash Proceeds of Permitted Subordinated
Indebtedness permitted to be retained by the Borrower pursuant to Section 7.02(a)(i)
plus (z) the proceeds received by the Borrower from Permitted Affiliate
Investments; provided that, with respect to each Investment made
pursuant to this subsection 7.05(i):

 

(A)                              such
Investment shall be in property and assets which are part of, or in lines of
business substantially the same as one or more of the businesses engaged in by
the Borrower and its Subsidiaries on the date of this Agreement and those
reasonably related or ancillary thereto;

 

(B)                                any
determination of the amount of such Investment shall include all cash and
noncash consideration (including, without limitation, the Fair Market

 

120

 

Value of all Equity
Interests issued or transferred to the sellers thereof, all indemnities,
earnouts and other contingent payment obligations to, and the aggregate amounts
paid or to be paid under noncompete, consulting and other affiliated agreements
with, the sellers thereof, all reserves for liabilities with respect thereto
and all assumptions of Indebtedness in connection therewith, provided
that to the extent that any of the foregoing amounts are not known or
determinable, such amount shall be determined to be an amount reasonably
estimated in good faith to be payable on the date such Investment is made) paid
by or on behalf of the Borrower and its Subsidiaries in connection with such
Investment; and

 

(C)                                immediately
before and immediately after giving pro
forma effect to any such purchase or other acquisition, no Default
shall have occurred and be continuing;

 

(j)                                     the
UPG Acquisition;

 

(k)                                  Investments
in the ordinary course of business consisting of (i) endorsements for
collection or deposit and (ii) customary trade arrangements with customers
consistent with past practice;

 

(l)                                     the
licensing, sublicensing or contribution of IP Rights pursuant to joint
marketing arrangements with Persons other than Holdings and its Subsidiaries;
and

 

(m)                               To the extent the same constitute
Investments, Contingent Obligations of Holdings, the Borrower and their
respective Subsidiaries (i) (other than a Guarantee of Indebtedness) made in
the ordinary course of business that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect or (ii) permitted
by Section 7.02.

 

7.06                           Restricted Payments.  Declare or pay any dividends on, or
purchase, redeem, retire, defease or otherwise acquire for value, any of its
Equity Interests, now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof) as such,
make any distribution of property, assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent Persons
thereof) as such (any of the foregoing, a “Restricted Payment”), or permit any of its Subsidiaries to do
any of the foregoing, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests in the
Borrower (or, after the Holdings Company Event, Holdings), or to issue or sell any of its Equity
Interests in order to acquire such Equity Interests, or, in the case of
any Loan Party, issue or sell any Equity Interests to any Person that is not a
Loan Party (provided that the Borrower or, after the Holdings Company Event,
Holdings, may issue and sell Equity Interests to the extent not otherwise
prohibited hereunder), except that so
long as no Default shall have occurred and be continuing at the time of any of
the transactions described in clause (f)(iv), (g)(iv), (i)
or (j) or would occur as a result thereof:

 

(a)                                  the
Borrower may consummate the Preferred Stock Redemption;

 

121

 

(b)                                 Holdings
and each of its Subsidiaries may declare and make dividends and other
distributions on its outstanding Equity Interests payable in such Equity
Interests (other than Redeemable Equity Interests);

 

(c)                                  any
of the Subsidiaries of the Borrower may declare and pay or make dividends and
other distributions in cash or in additional Equity Interests therein to the
Borrower or any of its Subsidiaries; provided that such additional
Equity Interests issued to a Loan Party shall, to the extent required under the
terms of the applicable Collateral Documents, be pledged as Collateral
thereunder to the Administrative Agent, on behalf of the Secured Parties,
immediately upon the issuance thereof;

 

(d)                                 any
of the non-wholly owned Subsidiaries of the Borrower may declare and pay or
make dividends and other distributions to its shareholders, partners or members
(or the equivalent persons thereof) generally so long as the Borrower and each
of the Restricted Subsidiaries that own any of the Equity Interests therein
receive at least their respective proportionate shares of any such dividend or
distribution (based upon their relative holdings of the Equity Interests
therein and taking into account the relative preferences, if any, of the
various classes of the Equity Interests therein);

 

(e)                                  to
the extent constituting Restricted Payments, the Borrower and its Subsidiaries
may enter into transactions permitted by Section 6.10 or 7.03;

 

(f)                                    any
Subsidiary of Holdings may make Restricted Payments to Holdings:

 

(i)                                     the
proceeds of which will be used to pay the tax liability for the relevant
jurisdiction in respect of consolidated, combined, unitary or affiliated
returns for the relevant jurisdiction of Holdings attributable to the Borrower
and its Subsidiaries determined as if the Borrower and its Subsidiaries filed
separate returns;

 

(ii)                                  the
proceeds of which shall be used by Holdings to pay its operating expenses
incurred in the ordinary course of business and other corporate overhead costs
and expenses (including, without limitation, administrative, legal, accounting
and similar expenses provided by third parties), which are reasonable and
customary and incurred in the ordinary course of business, in an aggregate
amount not to exceed $500,000 in any Fiscal Year plus any reasonable and
customary indemnification claims made by directors or officers of Holdings
attributable to the ownership or operations of the Borrower and its
Subsidiaries;

 

(iii)                               the
proceeds of which shall be used by Holdings to pay its franchise taxes;

 

(iv)                              the
proceeds of which will be used to repurchase the Equity Interests of Holdings
from current or former directors, employees or members of management of
Holdings or any of its Subsidiaries (or their estate, family members, spouse
and/or former spouse), in an aggregate amount not in excess of $2,500,000 in
any Fiscal Year plus the proceeds of any key-man life insurance maintained by
Holdings or any of its Subsidiaries; provided, that Holdings may

 

122

 

carry-over and
make in any subsequent calendar year or years, in addition to the amount for
such calendar year, the amount not utilized in the prior calendar year or years
up to a maximum of $2,500,000; and

 

(v)                                 to
finance any Investment permitted to be made pursuant to Section 7.05;
provided, that (A) such Restricted Payment shall be made concurrently with the
closing of such Investment and (B) Holdings shall, immediately following the
closing thereof, cause (1) all property acquired (whether assets or Equity
Interests) to be contributed to the Borrower or its Subsidiaries or (2) the
merger (to the extent permitted in Section 7.04) of the Person
formed or acquired into the Borrower or its Subsidiaries in order to consummate
such Permitted Acquisition;

 

(g)                                 any
Subsidiary of Parent may make Restricted Payments to Parent:

 

(i)                                     the
proceeds of which will be used to pay the tax liability for the relevant
jurisdiction in respect of consolidated, combined, unitary or affiliated
returns for the relevant jurisdiction of Parent attributable to Holdings and
its Subsidiaries determined as if Holdings and its Subsidiaries filed separate
returns;

 

(ii)                                  the
proceeds of which shall be used by Parent to pay its operating expenses
incurred in the ordinary course of business and other corporate overhead costs
and expenses (including, without limitation, administrative, legal, accounting
and similar expenses provided by third parties), which are reasonable and
customary and incurred in the ordinary course of business, in an aggregate
amount not to exceed $500,000 in any Fiscal Year plus any reasonable and
customary indemnification claims made by directors or officers of Parent
attributable to the ownership or operations of Holdings and its Subsidiaries;

 

(iii)                               the
proceeds of which shall be used by Parent to pay its franchise taxes;

 

(iv)                              the
proceeds of which will be used to repurchase the Equity Interests of Parent
from current or former directors, employees or members of management of Parent
or any Subsidiary (or their estate, family members, spouse and/or former
spouse), in an aggregate amount not in excess of $2,500,000 in any Fiscal Year
plus the proceeds of any key-man life insurance maintained by Parent or any of
its Subsidiaries; provided, that Parent may carry-over and make in any
subsequent calendar year or years, in addition to the amount for such calendar
year, the amount not utilized in the prior calendar year or years up to a
maximum of $2,500,000; and

 

(v)                                 to
finance any Investment permitted to be made pursuant to Section 7.05;
provided, that (A) such Restricted Payment shall be made concurrently
with the closing of such Investment and (B) Parent shall, immediately following
the closing thereof, cause (1) all property acquired (whether assets or Equity
Interests) to be contributed to Holdings or its

 

123

 

Subsidiaries
or (2) the merger (to the extent permitted in Section 7.03) of the
Person formed or acquired into Holdings or its Subsidiaries in order to
consummate such Permitted Acquisition;

 

(h)                                 repurchases
of Equity Interests of Holdings deemed to occur upon the non-cash exercise of
stock options and warrants;

 

(i)                                     Holdings
may make Restricted Payments with the proceeds of Permitted Holdco Debt and
Permitted Affiliate Investments; and

 

(j)                                     in
addition to the foregoing
Restricted Payments, the Borrower may make additional Restricted Payments to
Holdings the proceeds of which may be utilized by Holdings to make additional
Restricted Payments, in an aggregate amount not to exceed the sum of (A) the
Applicable Basket Amount (such amount to be increased to (x) the Applicable
Basket Amount if the Total Leverage Ratio is, on a pro forma basis after giving
effect to such Restricted Payment, less than the Applicable Ratio and (y) the
Applicable Basket Amount if the Total Leverage Ratio is less than the
Applicable Ratio) plus (B) without duplication, the lesser of (1) 25% of
the aggregate amount of the Cumulative Excess Cash Flow and (2) the portion of
the Cumulative Excess Cash Flow which is not prepaid to the Lenders pursuant to
Section 2.05(b)(i) or not used to make Investments pursuant to Section 7.05
or has not been used to make Restricted Payments under this Section 7.06.

 

7.07                           Capital Expenditures.  Make, or permit any of its Subsidiaries to make, on or prior to
the Termination Date for the First Lien Facility, any Capital Expenditures that
would cause the aggregate amount of all such Capital Expenditures made by the
Borrower and its Subsidiaries during any Fiscal Year to exceed the amount
specified in the table below for such Fiscal Year; provided, however, that if, at the end of any Fiscal
Year, the aggregate amount of all Capital Expenditures made by the Borrower and
its Subsidiaries during such Fiscal Year is less than the amount specified in
the table below for such Fiscal Year (the amount of such difference being the “Carryover Capital Expenditure
Amount”), then, notwithstanding the foregoing provision of this Section 7.07,
the Borrower and its Subsidiaries shall be permitted to make additional Capital
Expenditures during the next succeeding Fiscal Year in an amount not to exceed
the Carryover Capital Expenditure Amount, if any, from such Fiscal Year; provided  further,
however, that any Carryover Capital Expenditure Amount carried forward
to the next succeeding Fiscal Year shall not be deemed to have been utilized to
make Capital Expenditures until after the utilization of the amount set forth
above in this Section 7.07 for Capital Expenditures permitted to be
made in such Fiscal Year, and may not be carried forward to any subsequent
Fiscal Year.

 

	
  Fiscal Year

  	
   

  	
  Amount

  	
   

  
	
  2004

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  2005

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  2006

  	
   

  	
  $

  	
  45,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  45,000,000

  	
   

  
	
  2008 (and each
  Fiscal Year thereafter

  	
   

  	
  $

  	
  50,000,000

  	
   

  

 

124

 

7.08                           Prepayments, Etc. of Indebtedness.  (a) Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner any of
the Senior Subordinated Notes, any Permitted Subordinated Indebtedness and any
Permitted Holdco Debt (collectively, “Junior Financing”) or make any payment in
violation of any subordination terms contained in any Junior Financing, except
(i) the refinancing thereof with the Net Cash Proceeds of any further
incurrence of Permitted Subordinated Indebtedness, Permitted Holdco Debt or
Permitted Equity Issuance, in each case, to the extent not required to prepay
any Loans or Facility pursuant to Section 2.05(b) and (ii) the
conversion of any Junior Financing to Equity Interests (other than Redeemable
Equity Interests), (b) amend, modify or change in any manner any term or
condition of any documentation related to any Junior Financing, except as could
not materially and adversely affect the rights or interests of the
Administrative Agent or the Lenders or (c) permit any of its Subsidiaries to do
any of the foregoing.

 

7.09                           Negative Pledge.  Enter into or suffer to exist, or permit any of its Subsidiaries
to enter into or suffer to exist, any agreement prohibiting or conditioning the
creation or assumption of any Lien upon any of its property or assets other
than:

 

(a)                                  any
such agreement with or in favor of the Secured Parties or the Administrative
Agent or the Collateral Agents, as the case may be, on behalf of the Secured
Parties;

 

(b)                                 any
such agreement with or in favor of the holders of the Senior Subordinated Notes
or the trustee for the Senior Subordinated Notes, on behalf of the holders
thereof, in each case as such agreement was in effect on the Amendment and Restatement
Closing Date (or as amended in compliance with Section 7.08(b));

 

(c)                                  in
connection with (i) any Indebtedness described on Schedule 7.02,
(ii) any Indebtedness otherwise permitted to be incurred under Section 7.02(b)(x)
and (iii) any Indebtedness outstanding on the date any Person first becomes a
Subsidiary of the Borrower; provided that such agreement was not created
in contemplation of the purchase or other acquisition of such Person and does
not extend to or cover any property or assets other than property and assets of
the Person becoming such Subsidiary (or proceeds or products thereof);

 

(d)                                 any
such agreement prohibiting other encumbrances on specific property and assets
of the Borrower or any of its Subsidiaries, which agreement secures the payment
of Indebtedness incurred solely to acquire, construct or improve such property
or assets or to finance the purchase price therefor (including, without
limitation, Capitalized Leases) and which Indebtedness is otherwise permitted
to be incurred under the terms of this Agreement;

 

(e)                                  any
such agreement with or in favor of the holders of the Indebtedness of one or
more of the Foreign Subsidiaries (or any agent for the holders of such
Indebtedness) incurred pursuant to Section 7.02(b)(vi);

 

125

 

(f)                                    any
agreement setting forth customary restrictions on the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract of similar property or assets; and

 

(g)                                 any
restriction or encumbrance imposed pursuant to an agreement that has been
entered into by the Borrower or any of its Subsidiaries for the Disposition of
any of its property or assets so long as such Disposition is otherwise
permitted to be made under Section 7.04.

 

7.10                           Dividends and Other Payment
Restrictions Affecting Subsidiaries.  Enter into, create, assume or otherwise suffer to exist or become
effective, or permit any of its Subsidiaries to enter into, create, assume or
otherwise suffer to exist or become effective, directly or indirectly, any
consensual encumbrance or restriction of any kind on the ability of any of its
Subsidiaries (a) to pay dividends or to make any other distributions on any of
the Equity Interests in such Subsidiary owned or otherwise held by the Borrower
or any of its Subsidiaries, (b) to repay or prepay or to subordinate any
Indebtedness owed to the Borrower or any of its Subsidiaries, (c) to make loans
or advances to the Borrower or any of its Subsidiaries, (d) to transfer any of
its property or assets to the Borrower or any of its Subsidiaries or (e) to
otherwise make Investments in the Borrower or any of its Subsidiaries (whether
through a covenant restricting dividends, loans, asset transfers or
investments, a financial covenant or otherwise); provided, however,
that nothing in any of clauses (a) through (e) of this Section 7.10
shall prohibit any such encumbrance or restriction contained in:

 

(a)                                  this
Agreement and the other Loan Documents;

 

(b)                                 any
agreements in effect on the Amendment and Restatement Closing Date;

 

(c)                                  in
the case of clause (d) of this Section 7.10, any
agreement setting forth customary restrictions on the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract of similar property or assets;

 

(d)                                 in
the case of clause (d) of this Section 7.10, any
agreement with the holder of a Lien otherwise permitted to exist under Section 7.01(d)
restricting on customary terms the transfer of any property or assets subject
thereto;

 

(e)                                  any
such agreement with or in favor of the holders of the Indebtedness of one or
more of the Foreign Subsidiaries (or any agent for the holders of such
Indebtedness) incurred pursuant to Section 7.02(b)(vi); provided
that any such restrictions set forth therein shall not apply to any of the Loan
Parties or any of their Subsidiaries (other than one or more of the Foreign
Subsidiaries);

 

(f)                                    any
agreement evidencing Indebtedness outstanding on the date a Person first
becomes a Subsidiary of the Borrower; provided that such agreement was
not created in contemplation of the purchase or other acquisition of such
Person by the Borrower or any of its Subsidiaries and does not extend to or
cover any property or assets other than the property or assets of the Person
becoming such Subsidiary (and proceeds and products thereof);

 

126

 

(g)                                 any
agreement evidencing or setting forth the terms of any refunding, refinancing
or replacement Indebtedness otherwise permitted to be incurred under Section 7.02(b)(x);
and

 

(h)                                 any
agreement that has been entered into by the Borrower or any of its Subsidiaries
for the Disposition of any of its property or assets so long as such
Disposition is otherwise permitted to be made under Section 7.04.

 

7.11                           Change in Nature of Business.  Make, or permit any of its Subsidiaries to
make, any change in the nature of its business that would cause the Borrower or
such Subsidiary to no longer be primarily engaged in one or more of the
businesses engaged in by the Borrower and its Subsidiaries on the date of this
Agreement and those reasonably related or ancillary thereto.

 

7.12                           Amendments to Constitutive Documents.  Amend, or permit any of its Subsidiaries to
amend, its Constitutive Documents, except where such amendment, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect or to materially and adversely affect the rights or
interests of the Lenders.

 

7.13                           Accounting Changes, Etc.  Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (a) its accounting policies or
reporting practices, except as required by GAAP in effect at the time of such
change or by applicable Requirements of Law, or (b) its Fiscal Year.

 

7.14                           Amendments, Etc. of UPG Acquisiton Documents.  Cancel or terminate any UPG Acquisiton Document or any Nu-Gro
Acquisition Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any UPG
Acquisiton Document or any Nu-Gro Acquisition Document or give any consent,
waiver or approval thereunder, waive any default under or any breach of any
term or condition of any UPG Acquisiton Document or any Nu-Gro Acquisition Document,
agree in any manner to any other amendment, modification or change of any term
or condition of any UPG Acquisiton Document or any Nu-Gro Acquisition Document,
or take any other action in connection with any UPG Acquisiton Document or any
Nu-Gro Acquisition Document that, in each of the foregoing cases under this Section 7.14,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or permit any of its Subsidiaries to do any of the
foregoing.

 

7.15                           Holdings. 
(a)  In the case of Holdings,
(i) conduct, transact or otherwise engage in any business or operations
other than those incidental to its ownership of the Equity Interests of the
Borrower, the performance of the Loan Documents and any transactions that
Holdings is permitted to enter into or consummate under this Article VII
or (ii) incur any Indebtedness other than Indebtedness permitted pursuant
to Section 7.02(c); or

 

(b)                                 From
and after the occurrence of the Holding Company Event, permit the Borrower to
be a Subsidiary that is not wholly owned by Holdings.

 

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

 

8.01                           Events of Default.  An Event of Default shall exist upon the occurrence and during
the continuance of any of the following events (each, an “Event of Default”):

 

(a)                                  (i)
the Borrower shall fail to pay any principal of any Loan when the same shall
become due and payable, whether by scheduled maturity or at a date fixed for
prepayment or by acceleration, demand or otherwise, or (ii) the Borrower shall
fail to pay any interest on any Loans, or any of the Loan Parties shall fail to
make any other payment under or in respect of any of the Loan Documents
required to have been made by it, in each case whether by scheduled maturity or
at a date fixed for prepayment or by acceleration, demand or otherwise and, in
each case under this clause (ii), such failure remains unremedied for at
least three Business Days after the same becomes due and payable; or

 

(b)                                 any
representation or warranty made by any of the Loan Parties (or any of their
respective officers) under or in connection with any of the Loan Documents
(including, without limitation, in any certificate, report, statement or other
writing at any time furnished (or deemed to have been furnished) to the
Administrative Agent or any of the Lenders by or on behalf of any of the Loan
Parties) shall prove to have been incorrect in any material respect on the date
as of which it was made or deemed made; or

 

(c)                                  (i)  the Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section 2.15, 6.05
(solely with respect to Holdings or the Borrower) or 6.10, any of subclauses
(i) through (iii) of Section 6.11(a) or Section 6.13(a),
6.14 or Article VII on its part to be performed or observed;
provided that any Event of Default under Section 6.14 is subject to
cure as contemplated by the penultimate proviso set forth in the definition of
“Consolidated EBITDA”; or

 

(d)                                 any
of the Loan Parties shall fail to perform or observe any term, covenant or
agreement contained in any of the Loan Documents on its part to be performed or
observed that is not otherwise referred to in Section 8.01(a) or (c)
if such failure shall remain unremedied for at least 30 consecutive days after
the date on which written notice thereof shall have been given to the Borrower
by the Administrative Agent; or

 

(e)                                  (i)
any of the Loan Parties or any of their Subsidiaries shall fail to pay any
principal of, premium or interest on, or any other amount payable in respect
of, one or more items of Indebtedness of the Loan Parties and their Subsidiaries
(excluding Indebtedness outstanding hereunder) that is outstanding in an
aggregate principal amount (or, in the case of any Swap Contract, having an
Agreement Value) of at least $10,000,000 at the time of such failure, when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreements or
instruments relating to all such Indebtedness; or (ii) any other event
shall occur or condition shall exist under the agreements or instruments
relating to one or more items of Indebtedness of any of the Loan Parties or any
of their

 

128

 

Subsidiaries (excluding Indebtedness outstanding hereunder) that is
outstanding in an aggregate principal amount (or, in the case of any Swap
Contract, having an Agreement Value) of at least $10,000,000 at the time of
such other event or condition, and shall continue after the applicable grace
period, if any, specified in all such agreements or instruments, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Indebtedness or otherwise to cause, or to permit the
holder thereof to cause, such Indebtedness to mature prior to its stated
maturity; or (iii) one or more items of Indebtedness of any of the Loan
Parties or any of their Subsidiaries (excluding Indebtedness outstanding
hereunder) that is outstanding (or under which one or more Persons have a
commitment to extend credit) in an aggregate principal amount (or, in the case
of any Swap Contract, having an Agreement Value) of at least the Applicable
Basket Amount shall be declared to be due and payable or required to be prepaid
or redeemed (other than by a regularly scheduled or required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Indebtedness shall be required to be made, in each case, prior to
the stated maturity thereof; or

 

(f)                                    any
of the Loan Parties or any of their Subsidiaries shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
any of the Loan Parties or any of their Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any Debtor Relief Law, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, administrator or other similar official for
it or for any substantial part of its property and assets and, in the case of
any such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of at least 60 consecutive days or
any of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any substantial part of
its property and assets) shall occur; or any event or action analogous to or
having a substantially similar effect to any of the events or actions set forth
above in this Section 8.01(f) (other than a solvent reorganization)
shall occur under the Requirements of Law of any jurisdiction applicable to any
of the Loan Parties or any of their Subsidiaries; or any of the Loan Parties or
any of their Subsidiaries shall take any corporate, partnership, limited
liability company or other similar action to authorize any of the actions set
forth above in this Section 8.01(f); or

 

(g)                                 one
or more judgments or orders for the payment of money in excess of $10,000,000
in the aggregate shall be rendered against one or more of the Loan Parties and
their Subsidiaries and shall remain unsatisfied and either (i) enforcement
proceedings shall have been commenced by any creditor upon any such judgment or
order and remain unstayed or (ii) there shall be any period of at least 60
consecutive days during which a stay of enforcement of any such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; provided, however, that any such judgment or order shall not give rise to an
Event of Default under this Section 8.01(g) if and for so long as
(A) the amount of such judgment or order which remains unsatisfied is covered
by a valid

 

129

 

and binding policy of insurance between the defendant and the insurer
covering full payment thereof (other than for deductibles) and (B) such insurer
has been notified, and has not disputed the claim made for payment, of the
amount of such judgment or order; or

 

(h)                                 any
provision of any of the Loan Documents after delivery thereof pursuant to Section 4.01,
6.11 or 6.15 shall for any reason (other than pursuant to the
terms thereof or expressly permitted hereunder (including as a result of a
transaction permitted by Section 7.03 or 7.04)) cease to be
valid and binding on or enforceable against any of the Loan Parties intended to
be a party to it, or any such Loan Party shall so state in writing; or

 

(i)                                     any
Collateral Document after delivery thereof pursuant to Section 4.01,
6.11 or 6.15 shall for any reason (other than pursuant to the
terms thereof, including as a result of a transaction permitted by Section 7.03
or 7.04) cease to create a valid and perfected first priority (subject
to the liens and security interests expressly permitted under Section 7.01)
lien on and security interest in the Collateral purported to be covered
thereby; or

 

(j)                                     any
of the following events or conditions shall have occurred and such event or
condition, when aggregated with any and all other such events or conditions set
forth in this Section 8.01(j), has resulted, or, with respect to clause
(i) of this Section 8.01(j), could reasonably be expected to
result, in liabilities of one or more of the Loan Parties and/or the ERISA
Affiliates in an aggregate amount exceeding $10,000,000 at any time:

 

(i)                                     any
ERISA Event shall have occurred or

 

(ii)                                  any
of the Loan Parties or any of the ERISA Affiliates shall have incurred
Withdrawal Liability to a Multiemployer Plan or liability in connection with
the reorganization, insolvency or termination of a Multiemployer Plan; or

 

(iii)                               any
“accumulated funding deficiency”
(as defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code), whether or not waived, shall exist with respect to one or more
of the Plans, or any Lien shall exist on the property and assets of any of the
Loan Parties or any of the ERISA Affiliates in favor of the PBGC or any Plan;
or

 

(k)                                  an
“Event of Default” (as defined in
the applicable Senior Subordinated Notes Documents) shall have occurred and be
continuing under the Senior Subordinated Notes Documents; or

 

(l)                                     a
Change of Control shall occur.

 

8.02                           Acceleration; Remedies.

 

(a)                                  (i) Upon the occurrence and during the
continuance of an Event of Default (x) pursuant to Section 8.01(a)
solely in respect of the Second Lien Loans or applicable

 

130

 

solely to the Second Lien Lenders or (y)
pursuant to Section 8.01(c), solely to the extent resulting from a
violation of an Applicable Basket Amount or Applicable Ratio pertaining solely
to the Second Lien Facility, (ii) upon the occurrence and during the
continuance of an Event of Default under Section 8.01(e)(iii) or Section 8.01(f)
or (iii) from and after the Termination Date in respect of the First Lien
Facility, upon the occurrence and during the continuance of any other Event of
Default (each of the foregoing in clause (i), (ii) and (iii),
a “Second
Lien Event of Default”), the Administrative Agent (A) shall at the request, or
may with the consent, of the Required Second Lien Lenders, by notice to the
Borrower, declare the Commitments of each of the Second Lien Lenders and the
obligation of each of the Second Lien Lenders to make Second Lien Loans to be
terminated, whereupon the same shall forthwith terminate, and (B) shall at
the request, or may with the consent, of the Required Second Lien Lenders, by
notice to the Borrower, declare the Second Lien Notes, all interest
thereon and all other amounts payable under or in respect of this Agreement and
the other Loan Documents, in each case in respect of the Second Lien Loans, to
be forthwith due and payable, whereupon the Second Lien Notes, all such
interest and all such other amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower under the United States Federal
Bankruptcy Code or a similar order or action under any other Debtor Relief Law,
(1) the Commitments of each of the Second Lien Lenders and the obligation
of each of the Second Lien Lenders to make Second Lien Loans shall
automatically be terminated and (2) the Second Lien Notes, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.

 

(b)                                 Upon the occurrence and during the
continuance of any Event of Default other than those described in Section 8.02(a)(i)
(each, a “First
Lien Event of Default”),
the Administrative Agent (i) shall at the request, or may with the
consent, of the Required First Lien Lenders, by notice to the Borrower, declare
the Commitments of each of the First Lien Lenders and the obligation of each of
the First Lien Lenders to make First Lien Loans (other than Swing Line Loans by
any of the Revolving Credit Lenders pursuant to Section 2.04(c)(ii)
and L/C Advances by the Issuing Bank or any of the Revolving Credit Lenders
pursuant to Section 2.03(c)(i)) and of the Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required First Lien Lenders, by notice to the Borrower, declare the First
Lien Notes, all interest thereon and all other amounts payable under or in
respect of this Agreement and the other Loan Documents, in each case in respect
of the First Lien Loans, to be forthwith due and payable, whereupon the First
Lien Notes, all such interest and all such other amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower under the United States Federal
Bankruptcy Code or a similar order or action under any other Debtor Relief Law,
(1) the Commitments of each of the First Lien Lenders and the obligation
of each of the First Lien Lenders to make First Lien Loans (other than Swing

 

131

 

Line Loans by any of the Revolving Credit Lenders pursuant to Section 2.04(c)(ii)
and L/C Advances by the Issuing Bank or any of the Revolving Credit Lenders
pursuant to Section 2.03(c)(i)) and of the Issuing Bank to issue
Letters of Credit shall automatically be terminated and (2) the First Lien
Notes, all such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.

 

8.03                           Actions in Respect of the Letters of
Credit upon Default  If any First
Lien Event of Default shall have occurred and be continuing, the Administrative
Agent may, or shall at the request of the Required First Lien Lenders,
irrespective of whether it is taking any of the actions described in Section 8.02
or otherwise, make demand upon the Borrower to, and forthwith upon such demand
the Borrower will, pay to the First Lien Collateral Agent, on behalf of the
First Lien Lenders, in same day funds at the First Lien Collateral Agent’s
office designated in such demand, for deposit in the L/C Cash Collateral
Account, an amount equal to the amount then available to be drawn under all outstanding
Letters of Credit (the “Available
Amount”).  If at any time
the First Lien Collateral Agent determines that any funds held in the L/C Cash
Collateral Account are subject to any right or claim of any Person other than
the Agents and the other Secured Parties or that the total amount of such funds
is less than the aggregate Available Amount of all Letters of Credit, the
Borrower will, forthwith upon demand by the First Lien Collateral Agent, pay to
the First Lien Collateral Agent, as additional funds to be deposited and held
in the L/C Cash Collateral Account, an amount equal to the excess of
(a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account.  Upon the drawing of any Letter of Credit for
which funds are on deposit in the L/C Cash Collateral Account, such funds shall
be applied to reimburse the Issuing Bank or the Revolving Credit Lenders, as
applicable, to the extent permitted under applicable law.

 

8.04                           Application of Funds.  After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in Section 8.03),
any amounts received on account of the Obligations shall be applied in
accordance with Section 3.2 of the Intercreditor Agreement.

 

ARTICLE IX

ADMINISTRATIVE AGENT AND OTHER AGENTS

 

9.01                           Appointment and Authorization of
Agents.

 

(a)                                  Each
Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent and each Collateral Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.  Each Lender
acknowledges and agrees that the Administrative Agent and each Collateral Agent
will execute and deliver the Intercreditor Agreement on the Amendment and
Restatement Closing Date and will exercise on behalf of the First Lien Lenders
and the Second Lien Lenders, as applicable, such powers and discretion as are
specified thereunder and others reasonably incidental thereto.

 

132

 

Notwithstanding
any provision to the contrary contained elsewhere herein or in any other Loan
Document, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, nor shall any Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against any Agent.  Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
the other Loan Documents with reference to any Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. 
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.

 

(b)                                 The
L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer
shall have all of the benefits and immunities (i) provided to the Agents
in this Article IX with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and the applications and agreements for letters of
credit pertaining to such Letters of Credit as fully as if the term “Agent” as
used in this Article IX and in the definition of “Agent-Related
Person” included the L/C Issuer with respect to such acts or omissions, and
(ii) as additionally provided herein with respect to the L/C Issuer.

 

(c)                                  Bank
of America shall act as the “first lien
collateral agent” under the Loan Documents (in such capacity,
together with any successor first lien collateral agent, the “First Lien Collateral Agent”),
and each of the First Lien Lenders (in its capacities as a First Lien Lender,
Swing Line Lender (if applicable), L/C Issuer (if applicable) and a potential
Hedge Bank) hereby irrevocably appoints and authorizes the First Lien
Collateral Agent to act as the agent of such Lender for purposes of acquiring,
holding and enforcing any and all Liens on Collateral granted by any of the
Loan Parties to secure any of the First Lien Obligations, together with such
powers and discretion as are reasonably incidental thereto.  In this connection, the First Lien
Collateral Agent (and any co-agents, sub-agents and attorneys-in-fact appointed
by the Administrative Agent pursuant to Section 9.02 for purposes
of holding or enforcing any Lien on the Collateral (or any portion thereof)
granted under the Collateral Documents for the benefit of the First Lien
Lenders, or for exercising any rights and remedies thereunder at the direction
of the Administrative Agent), shall be entitled to the benefits of all
provisions of this Article IX (including, without limitation, Section 9.07,
as though such co-agents, sub-agents and attorneys-in-fact were the “First Lien
Collateral Agent” under the Loan Documents) as if set forth in full herein with
respect thereto.

 

(d)                                 Bank
of America shall also act as the “second
lien collateral agent” under the Loan Documents (in such capacity,
together with any successor second lien collateral agent, the “Second Lien Collateral Agent”,
and each of the Second Lien Lenders (in its capacities as a Lender and a
potential Hedge Bank) hereby irrevocably appoints and authorizes the Second
Lien Collateral Agent to act as the agent of such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Second Lien Obligations, together with
such powers and discretion as are reasonably incidental thereto.  In this connection, the Second Lien
Collateral Agent” (and any co-agents, sub-agents and attorneys-in-fact
appointed by the Administrative Agent pursuant to Section 9.02 for

 

133

 

purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof)
granted under the Collateral Documents for the benefit of the Second Lien
Lenders, or for exercising any rights and remedies thereunder at the direction
of the Administrative Agent), shall be entitled to the benefits of all
provisions of this Article IX (including, without limitation, Section 9.07,
as though such co-agents, sub-agents and attorneys-in-fact were the “Second
Lien Collateral Agent” under the Loan Documents) as if set forth in full herein
with respect thereto.

 

9.02                           Delegation of Duties.  The Administrative Agent and each Collateral
Agent may execute any of its duties under this Agreement or any other Loan
Document (including for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Collateral Documents or
of exercising any rights and remedies thereunder) by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such
duties.  Neither the Administrative
Agent nor any Collateral Agent shall be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.

 

9.03                           Liability of Agents.  No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party or any
other party to any Loan Document to perform its obligations hereunder or
thereunder.  No Agent-Related Person
shall be under any obligation to any Lender or participant to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party or any Affiliate thereof.

 

9.04                           Reliance by Agents.

 

(a)                                  Each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, communication, signature, resolution, representation, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, electronic mail message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to any Loan Party), independent accountants
and other experts selected by such Agent. 
Each Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders, the Required First Lien Lenders or the
Required Second Lien Lenders, as applicable, as it deems appropriate under Article X
and otherwise, and, if it so requests, it

 

134

 

shall first be
indemnified to its satisfaction by the relevant Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. 
Each Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders, the Required
First Lien Lenders or the Required Second Lien Lenders, as applicable (or such
greater number of Lenders as may be expressly required hereby in any instance)
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the relevant Lenders.

 

(b)                                 For
purposes of determining compliance with the conditions specified in Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Amendment and Restatement Closing
Date specifying its objection thereto.

 

9.05                           Notice of Default.  Neither the Administrative Agent nor any Collateral Agent shall
be deemed to have knowledge or notice of the occurrence of any Default, except
with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a
Lender or the Borrower referring to this Agreement, describing such Default and
stating that such notice is a “notice of default.”  The Administrative Agent will notify the Lenders of its receipt
of any such notice.  The Administrative
Agent and each Collateral Agent shall take such action with respect to such
Default as may be directed by the Required Lenders, the Required First Lien
Lenders or the Required Second Lien Lenders in accordance with Article VIII
and Article X; provided, however, that unless and
until the Administrative Agent or such Collateral Agent has received any such
direction, the Administrative Agent and such Collateral Agent, as applicable,
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Event of Default as it shall deem advisable
or in the best interest of the Lenders.

 

9.06                           Credit Decision; Disclosure of
Information by Agents.  Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any
Loan Party or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession.  Each
Lender represents to each Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. 
Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan

 

135

 

Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by any Agent
herein, such Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Loan Parties or any of their respective Affiliates which may come into
the possession of any Agent-Related Person.

 

9.07                           Indemnification of Agents.  Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand each
Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan
Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that
no Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person’s own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the
Required Lenders, the Required First Lien Lenders or the Required Second Lien
Lenders, as applicable, shall be deemed to constitute gross negligence or
willful misconduct for purposes of this Section.  In the case of any investigation, litigation or proceeding giving
rise to any Indemnified Liabilities, this Section 9.07 applies whether
any such investigation, litigation or proceeding is brought by any Lender or
any other Person.  Without limitation of
the foregoing, each Lender shall reimburse the Administrative Agent and each
Collateral Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent or such Collateral Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Administrative Agent or such Collateral Agent is not
reimbursed for such expenses by or on behalf of the Borrower.  The undertaking in this Section shall
survive the Termination Date and the resignation of the Administrative Agent
and any Collateral Agent.

 

9.08                           Agents in their Individual Capacities.  Each of Bank of America, Citigroup, JPMCB
and their respective Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire Equity Interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Loan Parties and their respective Affiliates as
though (i) Bank of America were not the Administrative Agent, the L/C Issuer,
the Swing Line Lender, the First Lien Collateral Agent or the Second Lien
Collateral Agent hereunder, (ii) Citigroup were not the Syndication Agent and
(iii) JPMCB were not the Documentation Agent and, in each case, without notice
to or consent of the Lenders.  The
Lenders acknowledge that, pursuant to such activities, each of Bank of America,
Citigroup, JPMCB or their respective Affiliates may receive information
regarding any Loan Party or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Loan Party or such
Affiliate) and acknowledge that the Administrative Agent (in the case of Bank
of America), the Syndication Agent (in the case of Citigroup) and the
Documentation

 

136

 

Agent (in the case of
JPMCB) shall be under no obligation to provide such information to them.  With respect to its Loans, each of Bank of
America, Citigroup and JPMCB shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Administrative Agent,the L/C Issuer, the Swing Line Lender, the
First Lien Collateral Agent or the Second Lien Collateral Agent (in the case of
Bank of America), the Syndication Agent (in the case of Citigroup) or the
Documentation Agent (in the case of JPMCB), and the terms “Lender” and
“Lenders” include each of Bank of America, Citigroup and JPMCB in its
individual capacity.

 

9.09                           Successor Agents.  Each of the Administrative Agent, the First Lien Collateral Agent
and the Second Lien Collateral Agent may resign as the Administrative Agent,
the First Lien Collateral Agent or the Second Lien Collateral Agent, as the
case may be, upon 30 days’ notice to the relevant Lenders.  If the Administrative Agent resigns under
this Agreement, the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be consented to by
the Borrower at all times other than during the existence of an Event of
Default under Section 8.01(f) (which consent of the Borrower shall
not be unreasonably withheld or delayed). 
If the First Lien Collateral Agent resigns, the Required First Lien
Lenders shall appoint from among the First Lien Lenders a successor agent for
the First Lien Lenders, which successor agent shall be consented to by the
Borrower at all times other than during the existence of an Event of Default
under Section 8.01(f) (which consent of the Borrower shall not be
unreasonably withheld or delayed).  If
the Second Lien Collateral Agent resigns, the Required Second Lien Lenders
shall appoint from among the Second Lien Lenders a successor agent for the
Second Lien Lenders, which successor agent shall be consented to by the
Borrower at all times other than during the existence of an Event of Default
under Section 8.01(f) (which consent of the Borrower shall not be
unreasonably withheld or delayed).  If
no successor agent is appointed prior to the resignation of any such Agent, the
retiring Agent may appoint, after consulting with the Lenders and the Borrower,
a successor Administrative Agent, First Lien Collateral Agent or Second Lien
Collateral Agent, as the case may be, selected from among the Lenders, in the
case of the resignation of the Administrative Agent, the First Lien Lenders, in
the case of the resignation of the First Lien Collateral Agent, and the Second
Lien Lenders, in the case of the resignation of the Second Lien Collateral
Agent.  Upon the acceptance of its
appointment as successor agent hereunder, the Person acting as such successor
agent shall succeed to all the rights, powers and duties of the retiring
Administrative Agent, First Lien Collateral Agent or Second Lien Collateral
Agent, as the case may be, and the terms “Administrative Agent,” “First Lien
Collateral Agent” and “Second Lien Collateral Agent” shall mean such successor
agent, and the retiring Administrative Agent’s, First Lien Collateral Agent’s
or Second Lien Collateral Agent’s, as the case may be, appointment, powers and
duties as Administrative Agent, First Lien Collateral Agent or Second Lien
Collateral Agent shall be terminated. 
After the retiring Agent’s resignation hereunder as Agent, the
provisions of this Article IX and Sections 10.05 and 10.06
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Agent under this Agreement. 
If no successor agent has accepted appointment as Administrative Agent,
First Lien Collateral Agent or Second Lien Collateral Agent by the date that is
30 days following a retiring Administrative Agent’s, First Lien Collateral
Agent’s or Second Lien Collateral Agent’s notice of resignation, such retiring
Agent’s resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of such Agent hereunder until such
time, if any, as the Required Lenders, Required First Lien Lenders or Required
Second Lien Lenders, as applicable, appoint a

 

137

 

successor agent as
provided for above.  Upon the acceptance
of any appointment as Administrative Agent, First Lien Collateral Agent or
Second Lien Collateral Agent hereunder by a successor and upon the execution
and filing or recording of such financing statements, or amendments thereto,
and such amendments or supplements to the Mortgages, and such other instruments
or notices, as may be necessary or desirable, or as the Required Lenders,
Required First Lien Lenders or Required Second Lien Lenders, as applicable, may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Loan Documents.  After any retiring Agent’s resignation
hereunder as the Administrative Agent the First Lien Collateral Agent or the
Second Lien Collateral Agent, as the case may be, the provisions of this Article IX
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as an Agent.

 

9.10                           Administrative Agent May File Proofs
of Claim.  Subject to Section 3.1
of the Intercreditor Agreement, in the case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Loan
Party, the Administrative Agent (irrespective of whether the principal of any
Loan or L/C Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise

 

(a)                                  to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Agents
(including any claim for the reasonable compensation, expenses, disbursements
and Loans of the Lenders and the Agents and their respective agents and counsel
and all other amounts due the Lenders and the Agents under Sections 2.03(i)
and (j), 2.09 and 10.05) allowed in such judicial
proceeding; and

 

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

 

and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make
such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and Loans of the Agents and
their respective agents and counsel, and any other amounts due the Agents under
Sections 2.09 and 10.05.

 

Nothing contained herein
shall be deemed to authorize the Administrative Agent to authorize or consent
to or accept or adopt on behalf of any Lender any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or

 

138

 

to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

 

9.11                           Collateral and Guaranty Matters.  The Lenders irrevocably authorize the
Administrative Agent and each Collateral Agent, at its option and in its
discretion,

 

(a)                                  to
release any Lien on any property granted to or held by the Administrative Agent
or such Collateral Agent under any Loan Document (i) upon the relevant
Termination Date, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii)
subject to Section 10.01 and 10.02, if approved, authorized
or ratified in writing by the Required Lenders, Required First Lien Lenders or
Required Second Lien Lenders, as applicable; and

 

(b)                                 to
release any Guarantor from its obligations under the Guaranty and any other
Loan Document to which it is a party if such Person ceases to be a Subsidiary
as a result of a transaction permitted hereunder.

 

Upon request by the
Administrative Agent at any time, the Required Lenders, Required First Lien
Lenders and/or Required Second Lien Lenders, as applicable, will confirm in
writing the Administrative Agent’s or the relevant Collateral Agent’s authority
to release its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Loan Documents pursuant to this Section 9.11.  In each case as specified in this Section 9.11,
the Administrative Agent or the relevant Collateral Agent will, at the
Borrower’s expense, execute and deliver to the applicable Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents, or to release such Guarantor from its obligations
under the Loan Documents, in each case in accordance with the terms of the Loan
Documents and this Section 9.11.

 

9.12                           Other Agents; Arrangers and Managers.  None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
“documentation agent,” “joint book manager” or “joint lead arranger” shall have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such.  Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders or other Persons so identified
in deciding to enter into this Agreement or in taking or not taking action
hereunder.

 

ARTICLE X

MISCELLANEOUS

 

10.01                     Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and each such

 

139

 

waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or
consent shall:

 

(a)                                  extend
or increase the Commitment of any Lender without the written consent of each
Lender directly affected thereby (it being understood that a waiver of any
condition precedent set forth in Section 4.02 or the waiver of any
Event of Default, mandatory prepayment or mandatory reduction of the
Commitments shall not constitute an extension or increase of any Commitment of
any Lender);

 

(b)                                 postpone
any date scheduled for any payment of principal or interest under Sections
2.07 or 2.08  without the
written consent of each Lender directly affected thereby, it being understood
that the waiver of any mandatory prepayment of the Term Loans shall not
constitute a postponement of any date scheduled for the payment of principal or
interest;

 

(c)                                  reduce
the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (iii) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby, it being
understood that any change to the definition of Total Leverage Ratio or in the
component definitions thereof shall not constitute a reduction in the rate; provided,
however, that only the consent of the Required Lenders shall be
necessary to amend the definition of “Default Rate” or to waive any obligation
of the Borrower to pay interest at the Default Rate;

 

(d)                                 change
the order of application of any reduction in the Commitments or any prepayment
of Loans among the Facilities from the application thereof set forth in the
applicable provisions of Section 2.06(b) or 2.05(b),
respectively, in any manner that materially and adversely affects the Lenders
under such Facilities without the written consent of Lenders having more than
50% of the Aggregate Credit Exposures then in effect within each of the
following classes of Commitments, Loans and other Credit Extensions: (i) the
class consisting of the Revolving Credit Commitment combined on an aggregate
basis and (ii) the class consisting of the Term Commitment combined on an
aggregate basis;

 

(e)                                  change
the pro rata sharing of any reduction in the Commitments or any prepayment of
Loans between the Dollar Term Facility and the Canadian Term Facility set forth
in Section 2.05 and Section 2.06 without the written
consent of Lenders having more than 50% of the Aggregate Credit Exposures then
in effect within each of the following classes of Commitments, Loans and other
Credit Extensions: (i) the class consisting of the Dollar Term Commitment
combined on an aggregate basis and (ii) the class consisting of the Canadian
Term Commitment combined on an aggregate basis;

 

(f)                                    change
any provision of this Section 10.01 or the definition of “Required Lenders” or Section 2.06(c)
without the written consent of each Lender;

 

(g)                                 release
all or substantially all of the Collateral in any transaction or series of
related transactions, without the written consent of each Lender; or

 

140

 

(h)                                 release
all or substantially all of the value of the Guaranty, without the written
consent of each Lender;

 

and provided  further
that (i) no amendment, waiver or consent shall, unless in writing and signed by
the L/C Issuer in addition to the Lenders required above, affect the rights or
duties of the L/C Issuer under this Agreement or any Letter of Credit
Application relating to any Letter of Credit issued or to be issued by it; (ii)
no amendment, waiver or consent shall, unless in writing and signed by the
Swing Line Lender in addition to the Lenders required above, affect the rights
or duties of the Swing Line Lender under this Agreement; (iii) no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Lenders required above, affect the rights or duties
of, or any fees or other amounts payable to, the Administrative Agent under
this Agreement or any other Loan Document; (iv) Section 10.08(h)
may not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at
the time of such amendment, waiver or other modification; and (v) the Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. 
Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender (it being understood that any
Commitments or Loans held or deemed held by any Defaulting Lender shall be
excluded from a vote of the Lenders hereunder requiring any consent of the
Lenders).

 

10.02                     Certain Rights of Second Lien Lenders.  Notwithstanding anything to the contrary in Section 10.01,
each party hereto agrees that:

 

(a)                                  Except
as set forth in Section 10.02(b), (c), (d) and  (e)
below and until the Termination Date in respect of the First Lien Facility has
occurred, each Second Lien Lender shall be deemed to have consented in writing
to any amendment or waiver of, or departure from, any provision of this
Agreement or any other Loan Document that requires the consent of the Required
Lenders pursuant to Section 10.01 upon the consent of the Required
First Lien Lenders to such amendment or waiver of, or departure from, any such
provision.

 

(b)                                 Any
amendment or waiver of, or consent to departure from, this Section 10.02
shall, in addition to the approvals required under Section 10.01,
require the written approval of all of the Second Lien Lenders.  For the avoidance of doubt, any amendment or
waiver of, or consent to departure from, the provisions of Section 10.01(a)
through (h) shall require the consent of each Second Lien Lender.

 

(c)                                  Only
the consent in writing of the Required Second Lien Lenders and the Borrower
shall be required to:

 

(i)                                     amend, modify or waive any Applicable Basket
Amount or Applicable Ratio applicable solely to the Second Lien Lenders; provided,
that the consent of the Required First Lien Lenders shall be required to cause
any Applicable Basket Amount or Applicable Ratio applicable exclusively to
Second Lien Lenders to become more restrictive to the Borrower and its
Subsidiaries; or

 

141

 

(ii)                                  waive any Second Lien Event of Default or
amend, modify or waive the provisions of Section 8.02(a).

 

(d)                                 The
consent in writing of the Required Second Lien Lenders shall, in addition to
the consent in writing of the Required First Lien Lenders and the Borrower, be
required to:

 

(i)                                     amend,
modify or waive the order of priority of the security interests of the First
Lien Lenders and the Second Lien Lenders in the Collateral;

 

(ii)                                  release
Collateral (other than in the connection with (A) a sale thereof or (B) the
exercise of remedies in respect of the Collateral by the First Lien Collateral
Agent pursuant to Section 3.1 of the Intercreditor Agreement) in
any single transaction or related series of transactions representing in excess
of 20% of the aggregate value of the Collateral;

 

(iii)                               amend
the definition of “Change of Control”
or amend or waive Section 8.01(l); or

 

(iv)                              amend
or waive, or consent to any departure from, the provisions of the Intercreditor
Agreement.

 

(e)                                  Notwithstanding
anything to the contrary set forth in Section 10.01 or this Section 10.02,
it is understood and agreed that:

 

(i)                                     Except
as expressly provided in the Intercreditor Agreement, no Second Lien Lender
shall have the right to approve any extension of or increase in the Commitment
of any First Lien Lender;

 

(ii)                                  No
Second Lien Lender shall have the right to approve any postponement of any date
scheduled for any payment of principal or interest under Sections 2.07
or 2.08 to the extent the same relates to the payment of principal or
interest in respect of the First Lien Facility;

 

(iii)                               No
Second Lien Lender shall have right to approve any reduction of the principal
of, or the rate of interest specified herein on, any First Lien Loan or L/C
Borrowing or any fees or other amounts payable hereunder or under any other
Loan Document in each case in respect of the First Lien Facility; and

 

(iv)                              No
Second Lien Lender shall have the right to approve any change in the order of
application of any reduction in the Commitments or any prepayment of Loans
among the Facilities from the application thereof set forth in the applicable
provisions of Section 2.06(b) or 2.05(b), respectively (and
shall be deemed to have consented in writing to any such change or reduction),
unless such change or reduction materially and adversely affects the Second
Lien Lenders under the Second Lien Facility, in which case such change or
reduction shall be approved by the Required Second Lien Lenders.

 

142

 

10.03                     Notices and Other Communications;
Facsimile Copies.

 

(a)                                  General.  Unless otherwise expressly provided herein,
all notices and other communications provided for hereunder or any other Loan
Document shall be in writing (including by facsimile transmission).  All such written notices shall be mailed, faxed
or delivered to the applicable address, facsimile number or (subject to Section 10.03(c))
electronic mail address, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

 

(i)                                     if
to the Borrower, the Administrative Agent, any Collateral Agent, the L/C Issuer
or the Swing Line Lender, to the address, facsimile number, electronic mail
address or telephone number specified for such Person on Schedule 10.03
or to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the other
parties; and

 

(ii)                                  if
to any other Lender, to the address, facsimile number, electronic mail address
or telephone number specified in its Administrative Questionnaire or to such
other address, facsimile number, electronic mail address or telephone number as
shall be designated by such party in a notice to the Borrower, the
Administrative Agent, the L/C Issuer and the Swing Line Lender.

 

Notices sent by hand or
courier service shall be deemed to have been given when received; notices sent
by mail shall be deemed to have been given four (4) Business Days after deposit
in the mails, postage prepaid; notices sent by facsimile shall be deemed to
have been given when sent and receipt has been confirmed by telephone (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day
for the recipient).  Notices delivered
through electronic communications to the extent provided in subsection (b)
below shall be effective as provided in such subsection (b).

 

(b)                                 Electronic
Communications.  Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II
if such Lender has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

 

(c)                                  Effectiveness
of Facsimile Documents and Signatures. 
Loan Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and
signatures shall, subject to applicable Law, have the same force and effect as
manually-signed originals and shall be binding on all Loan Parties, the Agents
and the Lenders.  The Administrative
Agent may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.

 

143

 

(d)                                 Reliance
by Agents and Lenders.  The Agents
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly
given by or on behalf of the Borrower even if (i) such notices were not made in
a manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof.  The Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower in the absence of gross
negligence or willful misconduct.  All
telephonic notices to the Administrative Agent may be recorded by such Agent,
and each of the parties hereto hereby consents to such recording.

 

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

 

10.05                     Attorney Costs, Expenses and Taxes.  The Borrower agrees (a) to pay or reimburse
the Administrative Agent for all reasonable costs and expenses incurred in
connection with the development, preparation, negotiation, syndication and
execution of this Agreement and the other Loan Documents, and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs of Shearman &
Sterling LLP, and (b) to pay or reimburse the Administrative Agent, each
Collateral Agent and each Lender for all reasonable costs and expenses incurred
in connection with the enforcement of any rights or remedies under this
Agreement or the other Loan Documents applicable to such Lender (including all
such costs and expenses incurred during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs of
counsel to the Administrative Agent and each Collateral Agent).  The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges
and fees and taxes related thereto, and other out-of-pocket expenses incurred
by the Administrative Agent or any Collateral Agent.  All amounts due under this Section 10.05 shall be
paid within thirty (30) Business Days after invoiced or demand therefor.  The agreements in this Section shall
survive the Termination Date. If any Loan Party fails to pay when due any
costs, expenses or other amounts payable by it hereunder or under any Loan
Document, including, without limitation, Attorney Costs and indemnities, such
amount may be paid on behalf of such Loan Party by any Agent or any Lender, in
its sole discretion.

 

10.06                     Indemnification by the Borrower.  Whether or not the transactions contemplated
hereby are consummated, the Borrower shall indemnify and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates, directors,
officers, employees, counsel, agents and, in the case of any funds, trustees
and advisors and attorneys-in-fact (collectively the “Indemnitees”) from
and against any and all liabilities, obligations, losses,

 

144

 

damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs (which shall be limited to one (1) counsel to the
Administrative Agent and the Lenders, unless (x) the interests of the
Administrative Agent and the Lenders are sufficiently divergent, in which case
one (1) additional counsel may be appointed, and (y) if the interests of
any Lender or group of Lenders (other than all of the Lenders) are distinctly
or disproportionately affected, one (1) additional counsel for such Lender or
group of Lenders)) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Loan Document or
any other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the transactions
contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use
or proposed use of the proceeds therefrom (including any refusal by the L/C
Issuer to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (c) any actual or alleged presence or release of
Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower, any Subsidiary or any other Loan Party, or any
Environmental Liability related in any way to the Borrower, any Subsidiary or
any other Loan Party, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation
or proceeding) and regardless of whether any Indemnitee is a party thereto (all
the foregoing, collectively, the “Indemnified Liabilities”), provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to (a) have resulted
from the gross negligence or willful misconduct of such Indemnitee or breach of
any Loan Document by such Indemnitee or (b) arise from claims of any of the
Lenders solely against one or more other Lenders (and not by one or more
Lenders against the Administrative Agent or one or more of the other Agents)
that have not resulted from the action, inaction, participation or contribution
of the Borrower or its Subsidiaries or other Affiliates or any of their respective
officers, directors, stockholders, partners, members, employees, agents,
representatives or advisors.  No
Indemnitee shall be liable for any damages arising from the use by others of
any information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee or any Loan Party have any liability for any special, punitive,
indirect or consequential damages relating to this Agreement or any other Loan
Document or arising out of its activities in connection herewith or therewith
(whether before or after the Initial Closing Date).  In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 10.06 applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnitee or any other Person, whether or not any Indemnitee
is otherwise a party thereto and whether or not any of the transactions
contemplated hereunder or under any of the other Loan Documents is
consummated.  All amounts due under this
Section 10.06 shall be payable within twenty (20) Business Days
after demand therefor.  The agreements
in this Section shall survive the resignation of the Administrative Agent,
the replacement of any Lender and the Termination Date.

 

145

 

10.07                     Payments Set Aside.  To the extent that any payment by or on behalf of the Borrower is
made to any Agent or any Lender, or any Agent or any Lender exercises its right
of setoff, and such payment or the proceeds of such setoff or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by such
Agent or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief Law
or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or
repaid by any Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect.

 

10.08                     Successors and Assigns.  (a) 
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (other than as provided in Section 7.03(h) and no
Lender may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an Eligible Assignee in accordance with the provisions of Section 10.08(b),
(ii) by way of participation in accordance with the provisions of Section 10.08(d),
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 10.08(f), or (iv) to an SPC in accordance
with the provisions of Section 10.08(h) (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in subsection (d) of this Section and,
to the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Any
Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this Section 10.08(b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to
it); provided that (i) except in the case of an assignment of the entire
remaining amount of the assigning Lender’s Commitment and the Loans at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender, the aggregate amount of
the Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the applicable Commitment is not then in effect, the outstanding
principal balance of the Loan of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $2,500,000, in the case of any assignment in
respect of the Revolving Credit Facility, or $1,000,000 (or the Dollar
Equivalent thereof, if applicable), in the case of any assignment in respect of
the Term Facility, unless each of the Administrative Agent and, so long as no
Event of Default under Section 8.01(a) or 8.01(f) has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender’s

 

146

 

rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not (x) apply to rights in
respect of Swing Line Loans or (y) prohibit any Lender from assigning all or a
portion of its rights and obligations among separate Facilities on a non-pro
rata basis; (iii) any assignment of a Revolving Credit Commitment must be
approved by the Administrative Agent, the L/C Issuer and the Swing Line Lender unless
the Person that is the proposed assignee is itself a Revolving Credit Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; provided that (A) no
such fee shall be payable in the case of an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund with respect to a Lender, and (B) in
the case of contemporaneous assignments by a Lender to one or more Funds
managed by the same investment advisor (which Funds are not then Lenders
hereunder), only a single such $3,500 fee shall be payable for all such
contemporaneous assignments; and (v) the assigning Lender shall deliver
to the Administrative Agent or the Borrower any Note issued to it marked
“cancelled”.  Subject to acceptance and
recording thereof by the Administrative Agent pursuant to Section 10.08(c),
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, 10.05 and 10.06
with respect to facts and circumstances occurring prior to the effective date
of such assignment).  Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with Section 10.08(d).

 

(c)                                  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts (and related interest amounts) of the Loans, L/C Obligations
(specifying the Unreimbursed Amount), L/C Borrowings and amounts due under Section 2.03
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the Agents and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower at
any reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for
a consent for a material or other substantive change to the Loan Documents is
pending, any Lender may request and receive from the Administrative Agent a
copy of the Register.  Upon receipt of a
duly completed and executed Assignment and Assumption and compliance by the
assigning Lender and Eligible Assignee with the other applicable provisions of
this Section 10.08, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.

 

147

 

(d)                                 Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Agents and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. 
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 10.01 that directly affects such
Participant.  Subject to Section 10.08(e),
the Borrower agrees that each Participant shall be entitled to the benefits of Sections
3.01, 3.04 and 3.05  to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to Section 10.08(b).  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.10  as
though it were a Lender, provided such Participant agrees to be subject
to Section 2.13 as though it were a Lender.

 

(e)                                  A
Participant shall not be entitled to receive any greater payment under Section 3.01,
3.04 or 3.05 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent and such
Participant complies with Section 10.16 as if such Participant were
a Lender under Section 10.16. 
A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.16
as though it were a Lender.

 

(f)                                    Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Note, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

 

(g)                                 As
used herein, the following terms have the following meanings:

 

“Eligible Assignee” means (a) a Lender; (b) an
Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other
than a natural person) approved by (i) the Administrative Agent, (ii) in the
case of any assignment of a Revolving Commitment, the L/C Issuer and the Swing
Line Lender, and (iii) (A) unless an Event of Default under Section 8.01(a)
or (f) has occurred and is continuing or (B) in the case of any
assignment to any Person that would result in an increase in the amounts
payable by the Borrower under Section 3.01(a), the Borrower (each
such approval under the foregoing clauses (i),

 

148

 

(ii)
and (iii)(A), not to be unreasonably withheld or delayed; it being
understood that if the Administrative Agent does not provide either a negative
or affirmative response to an approval request within 10 days, such approval
shall be deemed to have been given); provided that notwithstanding the
foregoing, “Eligible Assignee”
shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

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

 

“Approved Fund” means any Fund that is
administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers, advises or
manages a Lender.  For the avoidance of
doubt, “Approved Fund” does not include any unaffiliated fund for which a
Lender is acting solely in a fronting capacity.

 

(h)                                 Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding
vehicle identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower (an “SPC”)
the option to provide all or any part of any Loan that such Granting Lender
would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to fund any
Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails
to make all or any part of such Loan, the Granting Lender shall be obligated to
make such Loan pursuant to the terms hereof or, if it fails to do so, to make
such payment to the Administrative Agent as is required under Section 2.12(c)(ii).  Each party hereto hereby agrees that (i)
neither the grant to any SPC nor the exercise by any SPC of such option shall
increase the costs or expenses or otherwise increase or change the obligations
of the Borrower under this Agreement (including its obligations under Section 3.01
or 3.04), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. 
The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender.  Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent and with the
payment of a processing fee of $3,500, assign all or any portion of its right
to receive payment with respect to any Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer or provider of
any surety or Guarantee or credit or liquidity enhancement to such SPC.

 

(i)                                     Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Commitments and Loans pursuant to Section 10.08(b),
Bank of America may, (i) upon 30 days’ notice to the Borrower and the Lenders,
resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrower, resign
as Swing Line Lender.  In the event of
any such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be
entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line
Lender hereunder;

 

149

 

provided,
however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as L/C Issuer or Swing Line
Lender, as the case may be.  If Bank of
America resigns as L/C Issuer, it shall retain all the rights and obligations
of the L/C Issuer hereunder with respect to all Letters of Credit outstanding
as of the effective date of its resignation as L/C Issuer and all L/C
Obligations with respect thereto (including the right to require the Lenders to
make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant
to Section 2.03(c)).  If
Bank of America resigns as Swing Line Lender, it shall retain all the rights of
the Swing Line Lender provided for hereunder with respect to Swing Line Loans
made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

 

(j)                                     With respect to each Letter of Credit, if
an L/C Issuer transfers its rights with respect to the Borrower’s
obligation to make payments to such L/C Issuer with respect to any Unreimbursed
Amounts or L/C Borrowings, such L/C Issuer shall give notice of such transfer
to the Administrative Agent for notation in the Register and no such transfer
will be effective for purposes of this Agreement unless it has been recorded in
the Register.

 

10.09                     Confidentiality.  Each of the Agents and the Lenders agrees to maintain the
confidentiality of the Information, except that Information may be disclosed
(a) to its directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it;
(c) to the extent required by applicable Laws or regulations or by any
subpoena or similar legal process; (d) to any other party to this Agreement;
(e) subject to an agreement containing provisions substantially the same as
those of this Section 10.09, to any Eligible Assignee or pledgee
(pursuant to Section 10.08(f)) of or Participant in, or any
prospective Eligible Assignee or pledgee (pursuant to Section 10.08(f))
of or Participant in, any of its rights or obligations under this Agreement;
(f) with the consent of the Borrower; (g) to the extent such Information
becomes publicly available other than as a result of a breach of this Section 10.09;
(h) to any state, Federal or foreign authority or examiner (including the
National Association of Insurance Commissioners or any other similar
organization) regulating any Lender; or (i) to any rating agency when required
by it (it being understood that, prior to any such disclosure, such rating
agency shall undertake to preserve the confidentiality of any Information
relating to the Loan Parties received by it from such Lender).  In addition, the Agents and the Lenders may
disclose the existence of this Agreement and information about this Agreement
to market data collectors, similar service providers to the lending industry,
and service providers to the Agents and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Credit Extensions. 
For the purposes of this Section, “Information” means all information received
from any Loan Party relating to any Loan Party or its business, other than any
such information that is publicly available to any Agent or any Lender prior to
disclosure by any Loan Party other than as a result of a breach of this Section 10.09;
provided that, in the case of information received from a Loan Party
after the date hereof, such information is clearly identified at the time of
delivery as confidential.  Any Person
required to maintain the confidentiality of Information as provided in this Section 10.09
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of

 

150

 

care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

10.10                     Setoff.  Subject
to the Intercreditor Agreement, in addition to any rights and remedies of the
Lenders provided by law, upon the occurrence and during the continuance of any
Event of Default and the making of the request or the granting of the consent
specified by Section 8.02 to authorize the Administrative Agent to
declare the Loans due and payable pursuant to the provisions of Section 8.02,
each Lender is authorized at any time and from time to time, without prior
notice to the Borrower or any other Loan Party, any such notice being waived by
the Borrower (on its own behalf and on behalf of each Loan Party) to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other Indebtedness at any time owing by, such Lender to or for the credit
or the account of the respective Loan Parties against any and all Obligations
owing to such Lender hereunder or under any other Loan Document, now or
hereafter existing, irrespective of whether or not such Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or Indebtedness.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such setoff and application.  The rights of the Administrative Agent and
each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) that the
Administrative Agent, such Lender and their respective Affiliates may have.

 

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

 

10.12                     Counterparts. 
This Agreement and each other Loan Document may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery by telecopier
of an executed counterpart of a signature page to this Agreement and each other
Loan Document shall be effective as delivery of an original executed
counterpart of this Agreement and such other Loan Document. The Agents may also
require that any such documents and signatures delivered by telecopier be confirmed
by a manually-signed original thereof; provided that the failure to
request or deliver the same shall not limit the effectiveness of any document
or signature delivered by telecopier.

 

151

 

10.13                     Integration. 
This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such
subject matter (including the Existing Credit Agreement).  In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion
of supplemental rights or remedies in favor of the Agents or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement.  Each Loan Document was drafted with the
joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.

 

10.14                     Survival of Representations and Warranties.  All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
each Agent and each Lender, regardless of any investigation made by any Agent
or any Lender or on their behalf and notwithstanding that any Agent or any
Lender may have had notice or knowledge of any Default at the time of any
Credit Extension, and shall continue in full force and effect until the
Termination Date.

 

10.15                     Severability. 
If any provision of this Agreement or the other Loan Documents is held
to be illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby.  The invalidity of a provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.

 

10.16                     Tax Forms. 
(a)  (i)  Each Lender and Agent that is not a
“United States person” within the meaning of Section 7701(a)(30) of the
Code (a “Foreign Lender”)
shall deliver to the Borrower and the Administrative Agent, prior to receipt of
any payment subject to withholding under the Code (or upon accepting an
assignment of an interest herein), two duly signed, properly completed copies
of either IRS Form W-8BEN or any successor thereto (relating to such Foreign
Lender and entitling it to an exemption from, or reduction of, United States
withholding tax on all payments to be made to such Foreign Lender by the
Borrower or any other Loan Party pursuant to this Agreement or any other Loan
Document) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by the Borrower or any other Loan Party
pursuant to this Agreement or any other Loan Document) or such other evidence
reasonably satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, United States
withholding tax, including any exemption pursuant to Section 881(c) of the
Code, and in the case of a Foreign Lender claiming such an exemption under
Section 881(c) of the Code, a certificate that establishes in writing to
the Borrower and the Administrative Agent that such Foreign Lender is not (i) a
“bank” as defined in Section 881(c)(3)(A) of the Code, (ii) a 10-percent
shareholder within the meaning of Section 871(h)(3)(B) of the Code, and
(iii) a controlled foreign corporation related to the Borrower with the meaning
of Section 864(d) of the Code. 
Thereafter and from time to time, each such Foreign Lender shall (A)
promptly submit to the Administrative Agent such additional duly completed and
signed copies of one or more of such forms or certificates (or such successor
forms or certificates as shall be adopted from time to time by the

 

152

 

relevant United States
taxing authorities) as may then be available under then current United States
laws and regulations to avoid, or such evidence as is reasonably satisfactory
to the Borrower and the Administrative Agent of any available exemption from,
or reduction of, United States withholding taxes in respect of all payments to
be made to such Foreign Lender by the Borrower or any other Loan Party pursuant
to this Agreement or any other Loan Document, in each case, (1) on or before
the date that any such form, certificate or other evidence expires or becomes
obsolete, (2) after the occurrence of any event requiring a change in the most
recent form, certificate or evidence previously delivered by it to the Borrower
and the Administrative Agent and (3) from time to time thereafter if reasonably
requested by the Borrower or the Administrative Agent, and (B) promptly notify
the Borrower and the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction.

 

(ii)                                  Each
Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Foreign
Lender under any of the Loan Documents (for example, in the case of a typical
participation by such Foreign Lender), shall deliver to the Borrower and the
Administrative Agent on the date when such Foreign Lender ceases to act for its
own account with respect to any portion of any such sums paid or payable, and
at such other times as may be necessary in the determination of the Borrower
and the Administrative Agent (in either case, in the reasonable exercise of its
discretion), (A) two duly signed completed copies of the forms or statements
required to be provided by such Foreign Lender as set forth above, to establish
the portion of any such sums paid or payable with respect to which such Foreign
Lender acts for its own account that is not subject to United States
withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY
(or any successor thereto), together with any information such Foreign Lender
chooses to transmit with such form, and any other certificate or statement of
exemption required under the Code, to establish that such Foreign Lender is not
acting for its own account with respect to a portion of any such sums payable
to such Foreign Lender.

 

(iii)                               The
Borrower shall not be required to pay any additional amount or any indemnity
payment under Section 3.01 to (A) any Foreign Lender with respect
to any Taxes required to be deducted or withheld on the basis of the
information, certificates or statements of exemption such Lender transmits with
an IRS Form W-8IMY pursuant to this Section 10.16(a), (B) any
Foreign Lender if such Foreign Lender shall have failed to satisfy the
foregoing provisions of this Section 10.16(a), or (C) any U.S. Lender if such U.S.
Lender shall have failed to satisfy the provisions of Section 10.16(b);
provided, that if such Lender shall have satisfied the requirement of this Section 10.16(a)
or Section 10.16(b), as the applicable, on the date such Lender
became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 10.16(a)
or Section 10.16(b) shall relieve the Borrower of its obligation to
pay any amounts pursuant to Section 3.01 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 or other Person for the account of which such Lender
receives any sums payable under any of the Loan Documents is not subject to
withholding or is subject to withholding at a reduced rate.

 

153

 

(iv)                              The
Administrative Agent may deduct and withhold any taxes required by any Laws to
be deducted and withheld from any payment under any of the Loan Documents.

 

(b)                                 Each Lender and Agent that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code
(each, a  “U.S. Lender”) shall deliver to the Administrative Agent and the Borrower
two duly signed completed copies of IRS Form W-9 on or prior to the Amendment
and Restatement Closing Date (or on or prior to the date it becomes a party to
this Agreement), certifying that such U.S. Lender is entitled to an exemption
from United States backup withholding tax, or any successor form.  If such U.S. Lender fails to deliver such
forms, then the Administrative Agent may withhold from any interest payment to
such U.S. Lender an amount equivalent to the applicable back-up withholding tax
imposed by the Code, without reduction.

 

(c)                                  If
any Governmental Authority asserts that the Borrower or the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any tax
or other amount from payments made to or for the account of any Foreign Lender
or U.S. Lender, such Foreign Lender or U.S. Lender shall indemnify the Borrower
and the Administrative Agent therefor, including all penalties and interest,
any taxes imposed by any jurisdiction on the amounts payable to the Borrower
and the Administrative Agent under this Section 10.16, and costs
and expenses (including Attorney Costs) of the Borrower and the Administrative
Agent.  The obligation of the Foreign
Lenders or U.S. Lenders, severally, under this Section 10.16 shall
survive the termination of the Aggregate Commitments, repayment of all other
Obligations hereunder and the resignation of the Administrative Agent.

 

10.17                     Governing Law. 
(a)  THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.

 

(b)                                 ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, EACH AGENT AND EACH
LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. 
THE BORROWER, EACH AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING
OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

 

10.18                     Waiver of Right to Trial by Jury.  EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO

 

154

 

ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.17
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

10.19                     Binding Effect. 
This Agreement shall become effective when it shall have been executed
by the Borrower and the Administrative Agent shall have been notified by each
Lender, Swing Line Lender and the L/C Issuer that each such Lender, Swing Line
Lender and the L/C Issuer has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, each Agent and each Lender and their
respective successors and permitted assigns, except that the Borrower shall not
have the right (other than pursuant to Section 7.03(h)) to assign
its rights hereunder or any interest herein without the prior written consent
of the Lenders.

 

10.20                     USA PATRIOT Act Notice.  Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Act.

 

10.21                     Judgment Currency.  If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder or any other Loan Document in one
currency into another currency, the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given.  The obligation of the Borrower in respect of any such sum due from
it to the Administrative Agent or the Lenders hereunder or under the other Loan
Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”)
other than that in which such sum is denominated in accordance with the
applicable provisions of this Agreement (the “Agreement Currency”), be discharged only
to the extent that on the Business Day following receipt by the Administrative
Agent of any sum adjudged to be so due in the Judgment Currency, the
Administrative Agent may in accordance with normal banking procedures purchase
the Agreement Currency with the Judgment Currency.  If the amount of the Agreement Currency so purchased is less than
the sum originally due to the Administrative Agent from the Borrower in the
Agreement Currency, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or the
Person to whom such obligation was owing against such loss.  If the amount of the Agreement Currency so
purchased is greater than the sum originally due to the Administrative Agent in
such currency, the Administrative Agent agrees to return the amount of any
excess to the Borrower (or to any other Person who may be entitled thereto
under applicable law).

 

155

 

10.22                     Consent to Amendment of Certain Loan
Documents.  The Required Lenders
hereby consent to the execution and delivery of each of the Existing Guaranty
Supplement, the Existing IPSA Supplement, Existing Mortgage Supplement and the
Existing Security Agreement Supplement, in each case on the Amendment and
Restatement Closing Date.

 

156

 

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

 

	
   

  	
  UNITED
  INDUSTRIES CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

	
   

  	
  BANK OF AMERICA, N.A.,
  as 

  Administrative Agent, First Lien Collateral Agent

  and Second Lien Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

	
   

  	
  BANK OF AMERICA, N.A.,
  as a Lender, L/C

  Issuer and Swing Line Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

	
   

  	
  CITIGROUP GLOBAL
  MARKETS INC., as

  Syndication Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

	
   

  	
  JPMORGAN CHASE BANK, as
  Documentation

  Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

	
   

  	
  CITICORP NORTH AMERICA,
  INC., as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

	
  Agreed as of the date
  first above written:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  [Please type or
  print name of Lender]

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
	
  Title:Exhibit 10.5

 

SECOND AMENDED AND RESTATED

OFFICE LEASE

 

FUND IX, FUND X, FUND XI AND REIT JOINT
VENTURE

“LANDLORD”

 

and

 

GAIAM, INC.

“TENANT”

 

 

360 Interlocken Boulevard

Broomfield, Colorado

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1
  - DEMISE

  	
   

  
	
   

  	
   

  
	
  1.1

  	
  Demise

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 - TERM

  	
   

  
	
   

  	
   

  
	
  2.1

  	
  Term

  	
   

  
	
  2.2

  	
  Landlord’s Work

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 - RENT

  	
   

  
	
   

  	
   

  
	
  3.1

  	
  Base
  Rent

  	
   

  
	
  3.2

  	
  Additional Rent

  	
   

  
	
  3.3

  	
  Interest on Late Payments and Late Payment
  Charge

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 - OPERATING EXPENSE ADJUSTMENT

  	
   

  
	
   

  	
   

  
	
  4.1

  	
  Definitions

  	
   

  
	
  4.2

  	
  Rent Adjustments

  	
   

  
	
  4.3

  	
  Reimbursement Survives Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 - BUILDING SERVICES

  	
   

  
	
   

  	
   

  
	
  5.1

  	
  Standard Services

  	
   

  
	
  5.2

  	
  Interruption of Standard Services

  	
   

  
	
  5.3

  	
  Services Paid by Tenant

  	
   

  
	
  5.4

  	
  Above-Standard Service Requirements

  	
   

  
	
  5.5

  	
  Cleaning

  	
   

  
	
  5.6

  	
  Re-Lamping

  	
   

  
	
  5.7

  	
  Fiber
  Optic

  	
   

  
	
  5.8

  	
  After Hours Access

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 - TENANT REPAIR

  	
   

  
	
   

  	
   

  
	
  6.1

  	
  Damage by Tenant

  	
   

  
	
  6.2

  	
  Maintenance

  	
   

  
	
  6.3

  	
  Good Condition

  	
   

  
	
  6.4

  	
  Surrender

  	
   

  
	
  6.5

  	
  Broken Glass

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 - ASSIGNMENT AND SUBLETTING

  	
   

  
	
   

  	
   

  
	
  7.1

  	
  Limitations

  	
   

  
	
  7.2

  	
  Acceptance of Performance

  	
   

  

 

i

 

	
  7.3

  	
  Document Review

  	
   

  
	
  7.4

  	
  Subletting

  	
   

  
	
  7.5

  	
  Affiliated Entity

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 - TRANSFER BY LANDLORD AND LIMITED LIABILITY

  	
   

  
	
   

  	
   

  
	
  8.1

  	
  Transfer of Landlord’s Interest

  	
   

  
	
  8.2

  	
  Limited Liability of Landlord

  	
   

  
	
  8.3

  	
  Limited Liability of Tenant

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 - USE OF PROCEEDS

  	
   

  
	
   

  	
   

  
	
  9.1

  	
  Use

  	
   

  
	
  9.2

  	
  Compliance with Rules and Regulations

  	
   

  
	
  9.3

  	
  Electronics Testing Lab

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 - INSURANCE

  	
   

  
	
   

  	
   

  
	
  10.1

  	
  Tenant’s Insurance

  	
   

  
	
  10.2

  	
  Landlord’s Insurance

  	
   

  
	
  10.3

  	
  Subrogation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 - OBSERVANCE OF LAW

  	
   

  
	
   

  	
   

  
	
  11.1

  	
  Law

  	
   

  
	
  11.2

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 - WASTE AND NUISANCE

  	
   

  
	
   

  	
   

  
	
  ARTICLE 13 - ENTRY BY LANDLORD

  	
   

  
	
   

  	
   

  
	
  ARTICLE 14 - INDEMNIFICATION OF
  LANDLORD

  	
   

  
	
   

  	
   

  
	
  14.1

  	
  Tenant’s Indemnity

  	
   

  
	
  14.2

  	
  Landlord’s Indemnity

  	
   

  
	
  14.3

  	
  Comparative Negligence

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15 - ALTERATIONS

  	
   

  
	
   

  	
   

  
	
  15.1

  	
  Alterations by Tenant

  	
   

  
	
  15.2

  	
  Alterations by Landlord

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16 - SIGNS AND ADVERTISING

  	
   

  
	
   

  	
   

  
	
  16.1

  	
  Sign Generally

  	
   

  
	
  16.2

  	
  Directory Signage

  	
   

  

 

ii

 

	
  16.2

  	
  Monument
  Signs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17 - SUBORDINATION TO
  MORTGAGES AND DEEDS OF TRUST

  	
   

  
	
   

  	
   

  
	
  ARTICLE 18 - ESTOPPEL
  CERTIFICATE/FINANCIAL INFORMATION

  	
   

  
	
   

  	
   

  
	
  18.1

  	
  Estoppel Certificate

  	
   

  
	
  18.2

  	
  Financial Information

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19 - QUIET ENJOYMENT

  	
   

  
	
   

  	
   

  
	
  ARTICLE 20 - FIXTURES

  	
   

  
	
   

  	
   

  
	
  ARTICLE 21 - DAMAGE OR DESTRUCTION

  	
   

  
	
   

  	
   

  
	
  21.1

  	
  Casualty

  	
   

  
	
  21.2

  	
  Casualty Caused by Tenant

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 22 - CONDEMNATION

  	
   

  
	
   

  	
   

  
	
  22.1

  	
  Eminent Domain

  	
   

  
	
  22.2

  	
  Damages

  	
   

  
	
  22.3

  	
  Restoration

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 23 - LOSS AND DAMAGE AND DELAY

  	
   

  
	
   

  	
   

  
	
  23.1

  	
  Loss and Damage

  	
   

  
	
  23.2

  	
  Delays

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 24 - DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  24.1

  	
  Default by Tenant

  	
   

  
	
  24.2

  	
  Remedies of Landlord

  	
   

  
	
  24.3

  	
  Landlord’s Default

  	
   

  
	
  24.4

  	
  Personal Property Lien. Intentionally
  Deleted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 25 - HOLDING OVER

  	
   

  
	
   

  	
   

  
	
  ARTICLE 26 - NOTICE

  	
   

  
	
   

  	
   

  
	
  26.1

  	
  Notice

  	
   

  
	
  26.2

  	
  Change of Address

  	
   

  

 

iii

 

	
  ARTICLE 27 - SECURITY DEPOSIT

  	
   

  
	
   

  	
   

  
	
  27.1

  	
  Security Deposit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 28 - MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
   

  
	
  28.1

  	
  Captions

  	
   

  
	
  28.2

  	
  Waiver

  	
   

  
	
  28.3

  	
  Entire Agreement

  	
   

  
	
  28.4

  	
  Severability

  	
   

  
	
  28.5

  	
  Modification

  	
   

  
	
  28.6

  	
  Governing Law

  	
   

  
	
  28.7

  	
  Successors and Assigns

  	
   

  
	
  28.8

  	
  Authorization to Execute

  	
   

  
	
  28.9

  	
  Approval of Documents

  	
   

  
	
  28.10

  	
  Attorneys 
  Fees

  	
   

  
	
  28.11

  	
  Use
  of Names

  	
   

  
	
  28.12

  	
  Use
  of Names

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 29 - SUBSTITUTION OF PREMISES

  	
   

  
	
   

  	
   

  
	
  29.1

  	
  Intentionally Deleted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 30 - RECORDING

  	
   

  
	
   

  	
   

  
	
  ARTICLE 31 - REAL ESTATE BROKER

  	
   

  
	
   

  	
   

  
	
  ARTICLE 32 - OPTION

  	
   

  
	
   

  	
   

  
	
  32.1

  	
  Option to Extend

  	
   

  
	
  32.3

  	
  Right of First Offer to Lease Additional
  Space in the Building

  	
   

  
	
  32.3

  	
  Generator

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 33  RATIFICATION OF RESTATEMENT

  	
   

  
	
   

  	
   

  
	
  33.1.

  	
  Ratification and Binding Effect

  	
   

  
	
  33.2.

  	
  Entire Agreement

  	
   

  
	
  33.3.

  	
  Miscellaneous

  	
   

  

 

iv

 

SECOND AMENDED AND RESTATED

OFFICE LEASE

 

360 INTERLOCKEN BOULEVARD

BROOMFIELD, COLORADO

 

THIS SECOND AMENDED AND RESTATED OFFICE LEASE (the “Second Restated
Lease” or the “Lease”) is made this
                  
day of May, 2004, to be effective as of June 1, 2004, by and between FUND
IX, FUND X, FUND XI AND REIT JOINT VENTURE, a Georgia joint venture
(“Landlord”) and GAIAM, INC., a Colorado corporation (“Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, prior to the date hereof, Landlord and Tenant entered into
that certain Amended and Restated Office Lease, dated as of February 14,
2002, as amended by that certain First Amendment to Amended and Restated Lease
Agreement, dated as of March 31, 2003, and as further amended by that
certain Second Amendment to Amended and Restated Office Lease Agreement of even
date herewith (said Amended and Restated Lease, as so amended, is herein
referred to as the “First Restated Lease”, and said Second Amendment is herein
referred to as the “Second Amendment to First Restated Lease”), pursuant to the
terms of which Landlord has leased to Tenant, and Tenant has leased from
Landlord, certain premises (the “Premises”) containing 36,159 square feet of
Rentable Area and consisting of the entire second (2nd) and third (3rd)
floors of that certain building known as the 360 Interlocken (the “Building”)
located at 360 Interlocken Boulevard, Broomfield, Colorado 80021, on that
certain real property more particularly described on Exhibit A attached
hereto and made a part hereof (the “Property”);

 

WHEREAS, Landlord and Tenant desire to extend the Lease Term as to the
existing Premises, to modify the rental rate for the existing Premises, to
provide for certain rights of first offer to lease unencumbered space on the
first floor of the Building, and to provide for certain other options and
rights all on the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, for and in consideration of the premises, the covenants
and agreements hereinafter contained, and for Ten Dollars ($10.00) and other
good and valuable consideration in hand paid by each party hereto to the other,
the receipt and sufficiency of which are hereby acknowledged, Tenant and
Landlord hereby covenant and agree to amend and restate the First Restated
Lease, as follows:

 

ARTICLE 1

 

DEMISE

 

1.1                                 Demise.  Effective as of June 1, 2004, Landlord does
hereby lease to Tenant and Tenant hereby leases from Landlord those certain
premises (the “Premises”) consisting of the entire second (2nd) and third (3rd)
floors of the Building, which Premises are generally depicted

 

1

 

on
the floor plans attached hereto as Exhibit B,
together with a non-exclusive right subject to the provisions hereof, to use
all appurtenances thereto, including, but not limited to, any plazas, common
areas, walkways or other areas in the Building or on the Property designated by
Landlord for the exclusive or non-exclusive use of the tenants of the Building,
all of which inclusive of the Building are hereinafter collectively called the
“Building Complex”.  For purposes of
this Second Restated Lease, Landlord and Tenant hereby agree that the Premises
contain a total of 36,159 square feet of Rentable Area, and that the Building
contains a total of 51,974 square feet of Rentable Area.  Such letting and hiring is
upon and subject to the terms, conditions and covenants herein set forth, and
Tenant covenants as a material part of the consideration for this Second
Restated Lease to keep and perform each and all of said terms, conditions and
covenants by it to be kept and performed and that this Second Restated Lease is
made upon the condition of such performance.

 

ARTICLE 2

 

TERM

 

2.1                                 Term.  The term of this Second Restated Lease shall
commence on June 1, 2004 (the “Commencement Date”) and shall end at 5:00
p.m. on May 31, 2008, unless extended or sooner terminated as herein provided
(the “Lease Term”).

 

2.2                                 Landlord’s Work.  Landlord shall have no obligation for making
any improvements in the Premises and Tenant hereby accepts the Premises in its
“AS IS” condition.

 

ARTICLE 3

 

RENT

 

3.1                                 Base Rent.  Beginning on the Commencement Date, Tenant
shall pay to Landlord, at P. O. Box 926040, Norcross, Georgia 30010-6040, or at
such other place as Landlord may designate in writing to Tenant, annual base
rent (“Base Rent”) in the amounts set forth below for the Premises, based on
the Premises containing 36,159 square feet of Rentable Area:

 

	
  Period

  	
   

  	
  Annual
  Rate Per Rentable

  Square Foot of Premises

  	
   

  	
  Monthly

  Installment

  	
   

  	
  Annual

  Installment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6/1/04 - 5/31/05

  	
   

  	
  $

  	
  16.25

  	
   

  	
  $

  	
  48,965.31

  	
   

  	
  $

  	
  587,583.75

  	
   

  
	
  6/1/05 - 5/31/06

  	
   

  	
  $

  	
  16.25

  	
   

  	
  $

  	
  48,965.31

  	
   

  	
  $

  	
  587,583.75

  	
   

  
	
  6/1/06 - 5/31/07

  	
   

  	
  $

  	
  17.00

  	
   

  	
  $

  	
  51,225.25

  	
   

  	
  $

  	
  614,703.00

  	
   

  
	
  6/1/07 - 5/31/08

  	
   

  	
  $

  	
  18.00

  	
   

  	
  $

  	
  54,238.50

  	
   

  	
  $

  	
  650,862.00

  	
   

  

 

The
Base Rent for each Lease Year shall be payable in equal monthly installments,
due on the first day of each calendar month, in advance, in legal tender of the
United States of America, without abatement, demand, deduction or offset
whatsoever, except as may be expressly provided in this Lease.  One full monthly installment of Base Rent
shall be due and payable on the Commencement Date by Tenant and a like monthly
installment of Base Rent shall be due and

 

2

 

payable
on or before the first day of each calendar month following the Commencement
Date during the Lease Term hereof. 
Tenant shall pay, as Additional Rent, all other sums due from Tenant
under this Lease.  The term “Rent”, as
used herein, means all Base Rent, Additional Rent and all other amounts payable
hereunder from Tenant to Landlord.  If the Lease
Term commences or terminates on a day other than the first or last day of a
calendar month respectively, then the installments of Base Rent for such month
or months shall be prorated and the installments so prorated shall be paid in
advance.  If the Premises shall be
expanded in accordance with the terms of this Second Restated Lease, then the
amount of Base Rent shall be appropriately adjusted in accordance with the
terms of this Second Restated Lease.

 

3.2                                 Additional Rent.  Any other sums of money or charges to be paid by Tenant pursuant
to the provisions of this Lease may be designated as “Additional Rent”.  A failure to pay Additional Rent shall be
treated in all events as the failure to pay Rent.

 

3.3                                 Interest on Late Payments
and Late Payment Charge.  Any Rent (whether Base Rent or Additional Rent) or other amount
due from Tenant to Landlord under this Lease not paid within five (5) days of
the date due shall bear interest from the date due until the date paid at the
rate of two percent (2%) per month (the “Default Rate”), but the payment of
such interest shall not excuse or cure any default by Tenant under this Lease.
Failure to charge or collect such interest in connection with any one or more
such late payments shall not constitute a waiver of Landlord’s right to charge
and collect such interest in connection with any other or similar or like late
payments.

 

Furthermore, in the event any rent or other amounts owing hereunder are
not paid within five (5) days after the due date, then Landlord and Tenant
agree that Landlord will incur additional administrative expenses, the amount
of which will be difficult if not impossible to determine. Accordingly, in
addition to such required payment, Tenant shall pay to Landlord an additional
one time late charge for any such late payment in the amount of five percent
(5%) of the amount of such late payment.

 

Notwithstanding the above, Landlord agrees that it shall waive such
late charge and interest twice during any calendar year provided Tenant is not
otherwise in default hereunder. Tenant shall not be deemed late if the Rent
payment is postmarked by the United States Post Office no later than the last
day of the five (5) day period set forth above, the payment is actually
received and Tenant uses all reasonable efforts to make all payments when due.

 

ARTICLE 4

 

OPERATING EXPENSE ADJUSTMENT

 

4.1                                 Definitions. The following
terms shall have the following meanings with respect to the provisions of this Section 4.1:

 

(a)                                  Tenant’s
“Prorata Share” shall mean that fraction, the numerator of which is the
Rentable Area of the Premises (36,159 rentable square feet) and the denominator
of which is 51,974 square feet being the total Rentable Area of the Building
Complex and is equal to

 

3

 

69.57%,
which calculation shall be final except as specifically set forth herein. At
such time, if ever, any space is added to or subtracted from the Premises,
Tenant’s Prorata Share shall be adjusted accordingly.

 

(b)                                 “Real Estate
Taxes” shall include (a) any form of assessment (including any so-called
“special” assessments), license tax, business license fee, business license
tax, commercial rental tax, levy, charge, penalty or tax, imposed by any
authority having the direct power to tax, including any city, county, state or
federal government, or any school, agricultural, lighting, water, drainage or
other improvement or special district thereof, against the Premises, the
Building, Property, or Building Complex or any legal or equitable interest of
Landlord therein; (b) any tax on Landlord’s right to rent or other income from
the Premises or against Landlord’s business of leasing the Premises; and (c)
any assessments, tax, fee, levy or charge in substitution, partially or
totally, of or in addition to any assessment, tax, fee, levy or charge
previously included within the definition of Real Estate Taxes which may be
imposed by governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants. It
is the intention of Landlord and Tenant that all such new and increased
assessments, taxes, fees, levies and charges be included within the definition
of Real Estate Taxes for purposes of this Lease. The following shall also be
included within the definition of Real Estate Taxes for purposes of this Lease,
provided, however, that Tenant shall pay Landlord the entire amount thereof:
(i) any tax allocable to or measured by the area of the Premises or the rental
payable hereunder, including without limitation, any gross income, privilege,
sales or excise tax levied by the State, any political subdivision thereof,
city, municipal or federal government, with respect to the receipt of such,
rental, or upon or with respect to the possession, leasing, operating,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion thereof; and (ii) any tax upon this transaction or any
document to which Tenant is a party, creating or transferring an interest or an
estate in the Premises. “Real Estate Taxes” shall not include Landlord’s federal
or state income, franchise, inheritance, or estate taxes. “Real Estate Taxes”
included in this definition mean taxes or assessments in the year assessed,
without regard to the year in which same become due or payable.

 

(c)                                  “Operating
Expenses” shall mean for all purposes and throughout the Term of this Lease all
maintenance and operating costs of any kind or nature with respect to the
operation, ownership and maintenance of the Building Complex and shall include,
but not be limited to, Real Estate Taxes, the cost of building supplies, window
cleaning, costs incurred in connection with all energy sources for the Building
such as propane, butane, natural gas, steam, electricity, solar energy and fuel
oil; the costs of water and sewer service, janitorial services, both interior
and exterior, general maintenance and repair of the Building Complex including
the heating and air conditioning systems and structural components of the
Building; landscaping, maintenance, repair and striping of all parking areas;
insurance, including fire and extended coverage and public liability insurance
and any rental insurance and all risk insurance carried by Landlord pursuant to
Section 10.2; labor costs
incurred in the operation and maintenance of the Building Complex, including
wages and other payments; costs to Landlord for worker’s compensation and
disability insurance; payroll taxes and welfare fringe benefits; professional
building management fees which shall not exceed four percent (4%) of gross
receipts for the 

 

4

 

Building
Complex [it being mutually understood and agreed that for purposes of computing
management fees, “gross receipts” of the Building Complex shall include all
base rent and all amounts paid by all tenants of the Building Complex
(including Tenant) as reimbursement for Operating Expenses and other incidental
income of the Building Complex, but shall not include property management fees
payable to any person or entity]; legal, inspection and consultation fees
incurred in connection with the Building Complex; any association fees due in
accordance with or as referenced in recorded documents; any expense
attributable to costs incurred by Landlord for any capital improvements or
structural repairs to the Building or Property required by any change in the
laws, ordinances, rules, regulations or otherwise which were not in effect on
the date Landlord obtained its building permit to construct the Building
required by any governmental or quasi-governmental authority having
jurisdiction over the Building which costs shall be amortized over the useful
life of the capital improvements or structural repair; and any costs incurred
by Landlord in making capital improvements or other modifications to the
Building or any part thereof, which costs shall be amortized over the useful
life of such improvement or modification with interest at the rate of ten
percent (10%) per annum on the unamortized amount, in accordance with such
reasonable life and amortization schedules and shall be determined by Landlord
in accordance with generally accepted accounting principles. For all purposes
and throughout the term of this Lease, Operating Expenses shall expressly
exclude costs of maintenance and repair reimbursed by insurance proceeds,
alterations or other specific costs attributable solely to other tenant’s space
in the Building which was under the respective terms of the lease such tenant’s
responsibility and thereupon billed to such tenants, and legal fees for
financing, sales of the Building Complex, preparing and enforcing leases and
any other legal fees which do not specifically relate to the operation and
maintenance of the Building Complex.

 

(d)                                 “Variable
Operating Expenses” shall mean those Operating Expenses which vary with occupancy
levels or which vary with areas serviced based upon occupied Rentable
Area.   Landlord agrees that Tenant, if
it is paying any utilities directly or performing its own janitorial services
(including light bulb replacement), shall be responsible for its Prorata Share
of such utilities and services (including light bulbs) only for the common
areas of the Building Complex.

 

(e)                                  “Base
Year” shall mean calendar year 2005.

 

4.2                                 Rent Adjustments.  Landlord and Tenant agree that the following adjustments to Rent
shall be made with respect to each calendar year (or portion thereof) within
the Term:

 

(a)                                  Payments
of Increases in Operating Expenses.  
Commencing January 1, 2006, Tenant shall pay to Landlord as
Additional Rent an amount equal to Tenant’s Prorata Share of the amount by
which the amounts paid or incurred by Landlord for Operating Expenses in any
calendar year after the Base Year exceed the amounts paid or incurred by
Landlord for Operating Expenses during the Base Year, with appropriate and
equitable adjustment for Variable Operating Expenses in the Base Year and each
subsequent year (the “Increased Operating Expenses”).   It is agreed that Tenant shall, during each calendar year after
the Base Year, pay to Landlord an estimate of Tenant’s Prorata Share of such
Increased Operating Expenses as

 

5

 

hereinafter set forth. Beginning January 1, 2006, and continuing
each calendar year (or portion thereof) during the Lease Term, Tenant shall pay
to Landlord each month on the first day of the month an amount equal to
one-twelfth (1/12) of Tenant’s Prorata Share of the Increased Operating
Expenses for such new calendar year (or portion thereof contained within Lease
Term) as reasonably estimated by Landlord, with an adjustment to be made
between the parties at a later date as hereinafter provided. Furthermore,
Landlord may from time to time but no more than three (3) times during any
Lease Year furnish Tenant with notice of a re-estimation of the Increased Operating
Expenses and Tenant shall commence paying its re-estimated Prorata Share on the
first day of the month following receipt of said notice. As soon as practicable
following the end of any calendar year but in no event later than
April 15, Landlord shall submit to Tenant a statement setting forth the
exact amount of Tenant’s Prorata Share of the Increased Operating Expenses for
the calendar year just completed and the difference, if any, between Tenant’s
actual Prorata Share of the Increased Operating Expenses for the calendar year
just completed and the estimated amount of Tenant’s Prorata Share of the
Increased Operating Expenses (which were paid in accordance with this
subparagraph) for such year.   Such
statement shall also set forth the amount of the estimated Increased Operating
Expenses reimbursement for the new calendar year computed in accordance with
the foregoing provisions.  To the extent
that Tenant’s Prorata Share of the actual Increased Operating Expenses for the
period covered by such statement are higher than the estimated payments which
Tenant previously paid during the calendar year just completed, Tenant shall
pay to Landlord the difference within thirty (30) days following receipt of
said statement from Landlord.  To the
extent that Tenant’s Prorata Share of the actual Increased Operating Expenses
for the period covered by the Statements are less than the estimated payments
which Tenant previously paid during the calendar year just completed, Landlord
may at its option either refund said amount to Tenant or credit the difference
against Tenant’s estimated reimbursement for such Increased Operating Expenses
for the current year. In addition, with respect to the monthly reimbursement,
until Tenant receives such statement, Tenant’s monthly reimbursement for the
new calendar year shall continue to be paid at the then current rate, but
Tenant shall commence payment to Landlord of the monthly installments of
reimbursement on the basis of the statement beginning on the first day of the
month following the month in which Tenant receives such statement.

 

(b)                                 Tenant’s
obligation with respect to its Prorata Share of Increased Operating Expenses
and Base Rent shall survive the expiration or early termination of this
Lease.  If Tenant occupies the Premises
for less than a full calendar year during the first or last calendar years of
the term hereof, Tenant’s Prorata Share for such partial year shall be
appropriately prorated to reflect the number of months in such year during
which Tenant occupied the Premises. 
Tenant shall pay all amounts due hereunder within thirty (30) days
following receipt of notice thereof.

 

(c)                                  Tenant
shall have the right but not more than once per annum, at any time within
thirty (30) days after a statement of actual Operating Expenses for a
particular calendar year has been rendered by Landlord as provided herein, at
Tenant’s sole cost and expense, to examine Landlord’s books and records during
normal business hours (upon reasonable prior written notice to Landlord), at
Landlord’s office relating to the determination of such Operating Expenses.
Unless Tenant objects to the statement provided by Landlord, within said thirty
(30) day period, such statement and adjustment shall be deemed conclusive.

 

6

 

4.3                                 Reimbursement Survives Termination.
In the event of the termination of this Lease by expiration of the stated term
or for any other cause or reason whatsoever prior to the determination of
rental adjustment as hereinafter set forth, 
Tenant’s agreement to reimburse Landlord up to the time of termination
shall survive termination of this Lease and Tenant shall pay any amount due to
Landlord within fifteen (15) days after being billed therefor. In the event of
the termination of this Lease by expiration of the stated term or for any other
cause or reason whatsoever, except default by Tenant of any of the terms or
provisions of this Lease, prior to the determination of rental adjustments as
hereinabove set forth, Landlord’s agreement to refund any excess additional
rental paid by Tenant up to the time of termination shall survive termination
of this Lease and Landlord shall pay the amount due to Tenant within fifteen
(15) days of Landlord’s determination of such amount. This covenant shall survive
the expiration or termination of this Lease.

 

If the last year of the term of this Lease ends on any day other than
the last day of December, any payment due to Landlord by reason of any increase
in Operating Expenses shall be prorated on the basis by which the number of
days in such partial year bears to 365.

 

Any failure of Landlord to furnish Tenant with an estimate of its
Prorata Share of Increased Operating Expenses or any statements as set forth in
this Section 4
shall not act to relieve Tenant of its liability therefor; and with respect to
any deficiencies, Tenant agrees to pay same within thirty (30) days of written
demand from Landlord.

 

ARTICLE 5

 

BUILDING SERVICES

 

5.1                                 Standard Services.  Landlord agrees to furnish to the Premises during regular
business hours from 7:00 a.m. to 6:00 p.m. Mondays through Fridays and from
8:00 a.m. to 1:00 p.m. Saturdays, except for holidays as the same are
determined by Landlord, and subject to the rules and regulations of the
Building, heat and air conditioning for the use and occupancy of the Premises,
passenger elevator service and freight elevator service, subject to scheduling
by Landlord. Landlord shall also furnish: 
(i) electric current to be supplied for lighting the Premises and
public halls, and for the operation of ordinary office equipment, exclusive of
heavy-duty equipment and computers, copying equipment which is not standard for
general offices, or comparable equipment; (ii) janitorial and cleaning
services, and (iii) domestic water in reasonable quantity. Elevator service
shall mean service either by non-attended automatic elevators or elevators with
attendants at the option of Landlord. Landlord shall also furnish, at rates set
from time to time as reasonably determined by Landlord (reflecting actual costs
of such additional HVAC), heating and air conditioning and such other items as
are not provided for herein, provided if Tenant does not have special HVAC
controls for its Premises, then Tenant shall give Landlord reasonable prior
notice of Tenant’s needs for such additional heating or air conditioning and
Landlord shall use all reasonable efforts to provide same. Landlord shall also,
at said times, maintain and keep lighted the common stairs, entries, and toilet
rooms in the Building that would reasonably be subject to use by Tenant, its
agents and employees during other than

 

7

 

regular
business hours.  Landlord also has the
right to charge Tenant for energy costs incurred because of Tenant’s above
Building average usage or by reason of usage of the Premises or the Building
during other than regular business hours. However, in no event shall Landlord
charge Tenant more for excess utilities or after hours HVAC than it charges
other tenants in the Building for such usage. Furthermore, if Landlord were to
grant any tenant longer regular business hours, then such hours shall also be
applicable to Tenant. Tenant agrees to pay for any excess HVAC within fifteen
(15) days of the billing therefor, such billing to occur no more frequently
than monthly.

 

5.2                                 Interruption of Standard Services. Tenant agrees that
Landlord shall not be liable for failure to supply any heating, air
conditioning, elevator, janitorial services, electric current, or any other
service described in Section 5.1
or Section 33.3 during any
period when Landlord uses reasonable diligence to restore or to supply such
services or electric current, it being further agreed that Landlord reserves
the right to temporarily discontinue such services or any of them, or electric
current at such times as may be necessary by reason of accident, unavailability
of employees, repairs, alterations, or improvements, or whenever by reason of
strikes, lockouts, riots, acts of God or any other happening or occurrence
beyond the reasonable control of Landlord. If Landlord is unable to furnish
such services or electric current for any reason outside of Landlord’s
reasonable control, or if such services or electric current shall be
interrupted for any reason outside of Landlord’s reasonable control, Landlord
shall not be liable for damages to persons or property for any such
discontinuance or interruption, nor shall such discontinuance or interruption
in any way be construed as a constructive or actual eviction of Tenant or cause
an abatement of rent or operate to release Tenant from any of Tenant’s
obligations hereunder. Landlord’s obligation to furnish services or electric
current shall be conditioned upon the availability of adequate energy sources
from the public utility companies presently serving the Building Complex. If
Landlord elects for any reason to temporarily discontinue services to Tenant
and/or the Building Complex, then Landlord shall give Tenant prior notice
thereof and Tenant shall have the right to approve the scheduling thereof,
which approval shall not be unreasonably withheld or delayed and in any event
Landlord shall use reasonable efforts to restore as soon as possible any
service which has been interrupted. Landlord shall have the right to reduce
heating, cooling or lighting within the Premises and in the public area in the
Building as required by any mandatory fuel or energy-saving program.
Furthermore, due to energy code design requirements as promulgated from time to
time, Tenant hereby acknowledges that it may on certain days experience
discomfort with the heating and air conditioning cycle, and Landlord shall have
no responsibility or liability therefor.

 

5.3                                 Services Paid by Tenant. Unless otherwise provided
by Landlord, Tenant shall separately arrange with the applicable local public
authorities or utilities, as the case may be, for the furnishing of and payment
for all telephone and other communications services as may be required by
Tenant in the use of the Premises. Tenant shall directly pay for such telephone
and other communications services, including the establishment and connection
thereof, at the rates charged for such services by said authority or utility,
and the failure of Tenant to obtain or to continue to receive such services for
any reason whatsoever shall not relieve Tenant of any of its obligations under
this Lease.

 

8

 

5.4                                 Above-Standard Service
Requirements. If unusual
heat-generating machines or equipment cause the temperature in the Premises, or
any part thereof, to exceed the temperatures the Building’s air conditioning
system would be able to maintain in such Premises were it not for such
heat-generating equipment, then Landlord reserves the right to install
supplementary air conditioning units in the Premises, and the cost thereof,
including the cost of installation and the cost of operation and maintenance
thereof, shall be paid by Tenant to Landlord upon demand by Landlord.

 

Tenant shall not, without the written consent of Landlord, use any
apparatus or device which will in any way increase the amount of electricity or
water which Landlord determines to be reasonable for use of the Premises as
general office space, nor connect with electric current (except through existing
electrical outlets in the Premises) or water pipes any apparatus or device for
the purposes of using electric current, other energy or water except as set
forth in Article 15 hereof. Landlord shall have the right to install one
or more separately submetered electrical circuits to serve all of Tenant’s
equipment, machinery or appliances which equipment, machinery or appliances
requires electrical current supplied to the Premises for general office
purposes as the same is determined by Landlord which costs of submetering shall
be payable by Tenant to Landlord upon demand. Tenant shall also, at its own
cost, have the right to directly meter the electric services for its Premises
in which event Landlord shall have no right to object to any equipment that uses
“above-standard” amounts of electricity. Tenant agrees to reimburse Landlord
for the submetered electrical current utilized by Tenant at the rates charged
to Landlord to purchase electrical current for the Building, such reimbursement
to be made within fifteen (15) days of the date of the billing therefor; such
billing to occur no more frequently than monthly.

 

5.5                                 Cleaning. Upon prior
written notice to Landlord, Tenant may provide its own janitorial or cleaning
services subject to supervision of Landlord, at Tenant’s sole responsibility,
and by a janitorial or cleaning contractor or employees at all times
satisfactory to Landlord. Landlord shall provide janitorial and cleaning
services, in accordance with such reasonable standards generally provided in Class
A suburban office buildings in the Denver-Boulder metropolitan area for the
common areas of the Building Complex.

 

5.6                                 Re-Lamping. Exclusive of
the Premises, Landlord shall have the exclusive right to make any replacement
of electric light bulbs, fluorescent tubes and ballasts in the Building Complex
throughout the Lease Term and any renewal thereof. Landlord may adopt a system
of relamping and reballasting periodically on a group basis in accordance with
good management practice.

 

5.7                                 Fiber Optic.  Landlord shall have no responsibility or
liability for bringing either the phone system or fiber optics to the
Premises.  Nothing herein shall prohibit
Landlord from entering into licensing or other agreements with any telecommunications
company or entity for the Building nor shall Landlord be prohibited from
installing a minimum point of entry fiber optics system and/or updating or
replacing any system from time to time in the Building.

 

5.8                                 After Hours Access. Except as specifically set
forth in Sections 15.2, 21.1 and 22.2, and subject to applicable local laws
and emergencies, Tenant shall have access to its

 

9

 

Premises
twenty-four hours a day, seven days a week. Tenant acknowledges that certain
security measures may apply during nonregular business hours or holidays,
including the use of keys for access to the Building.

 

ARTICLE 6

 

TENANT REPAIR

 

6.1                                 Damage by Tenant. If the Building Complex,
the Building, the Premises or any portion thereof including but not limited to
the elevators, boilers, engines, pipes and other apparatus, or members of
elements of the Building (or any of them) used for the purpose of climate
control of the Building or operating the elevators, or if the water pipes,
drainage pipes, electric lighting or other equipment of the Building or the
roof or outside walls of the Building or the Generator or the parking
facilities of Landlord and also the Tenant Finish including but not limited to
the carpet, wall covering, doors and woodwork, become damaged or are destroyed
through the negligence, carelessness or misuse of Tenant, its servants, agents,
employees or anyone permitted by Tenant to be in the Building, or through it or
them, then the cost of the necessary repairs, replacements or alterations shall
be borne by Tenant who shall forthwith pay the same on demand to Landlord as
Additional Rent. Landlord shall have the exclusive right, but not the
obligation, to make any repairs necessitated by such damage.

 

6.2                                 Maintenance. Tenant shall
keep the Premises in as good order, condition and repair as when they were
entered upon. If Tenant fails to keep the Premises in such good order,
condition and repair as required hereunder to the satisfaction of Landlord,
Landlord may restore the Premises to such good order and condition and make
such repairs without liability to Tenant for any loss or damage that may accrue
to Tenant’s property or business by reason thereof, and upon completion
thereof, Tenant shall pay to Landlord, as Additional Rent, upon demand, the
cost of restoring the Premises to such good order and condition and of the
making of the repairs.

 

6.3                                 Good Condition. Tenant shall
leave the Premises at the end of each Business Day in a reasonable condition
for the purpose of allowing the performance of Landlord’s cleaning services
hereinafter described.

 

6.4                                 Surrender. Tenant shall
deliver, at the expiration of the Lease Term hereof or upon sooner termination
of the Lease Term, the Premises in good repair as aforesaid and in a state of
broom cleanliness.

 

6.5                                 Broken Glass. Tenant shall
pay on demand the cost of replacement with identical quality, size and
characteristics of glass broken on the Premises, including outside windows and
doors of the perimeter of the Premises (including perimeter windows in the
exterior walls) during the continuance of this Lease, unless the glass shall be
broken by Landlord, its servants, employees or agents acting on its behalf.

 

10

 

ARTICLE 7

 

ASSIGNMENT AND SUBLETTING

 

7.1                                 Limitations. Except as
specifically set forth in Sections 7.4
and 7.5 below, Tenant shall not
assign or in any manner transfer this Lease or any estate or interest therein
the Premises or any part thereof, or grant any license, concession or other
right to occupy any portion of the Premises without the prior written consent
of Landlord which shall not be unreasonably withheld. In no event shall Tenant
have any right to assign if there exists any default under this Lease. Consent
by Landlord to one or more assignments of this Lease or of the Premises shall
not operate as a waiver of Landlord’s rights under this section. Any such
assignment or subletting without Landlord’s consent shall be deemed void and
confer no rights upon a third party. Notwithstanding any assignment, Tenant and
any guarantor of Tenant’s obligations under this Lease shall at all times
remain fully responsible and liable for the payment of the rental herein
specified and for compliance with all other terms and conditions of this Lease.
Without in any way limiting Landlord’s right to refuse to give consent,
Landlord reserves the right in the event it does give consent to impose such
conditions upon its consent as Landlord deems necessary including the
requirement of additional security which in Landlord’s business judgment shall
insure the state of the Premises and the rentals due under this Lease. Landlord
shall also have the right in the event of such proposed assignment to terminate
this Lease in which event Landlord shall have the right, but not the
obligation, to enter into a Lease with such proposed assignee.

 

Neither this Lease nor any interest therein shall be assignable as to
the interest of Tenant by operation of law, without the written consent of
Landlord. A sale by Tenant of all or substantially all of its assets or all or
substantially all of its stock, if Tenant is a publicly traded corporation, a
merger of Tenant with another corporation; or the transfer of twenty-five
percent (25%) or more of the stock of Tenant if Tenant’s stock is not publicly
traded; or the transfer of fifty percent (50%) or more of the beneficial
ownership interest in Tenant if Tenant is a partnership without the prior
written consent of Landlord, shall constitute a prohibited assignment
hereunder, subject to the limitations set forth above. Notwithstanding the
foregoing, such assignment shall not be prohibited if Tenant is not in default
hereunder and the net worth of Tenant upon such assignment is not less than ten
million dollars with not more than ten percent of such net worth attributable
to good will. Prior to such assignment being deemed effective Tenant shall
deliver to Landlord current financials prepared in accordance with GAAP by an
independent certified public accountant.

 

7.2                                 Acceptance of Performance.  If this Lease be assigned or if the Premises or any part thereof
be sublet or occupied by anybody other than Tenant, Landlord may, after default
by Tenant, collect the rent from the assignee, subtenant or occupant and apply
the net amount collected to the rent herein reserved retaining the remainder,
if any, for the account of Landlord, but no such assignment, subletting,
occupancy or collection shall be deemed an acceptance of the assignee,
subtenant or occupant as Tenant hereof, or constitute a release of Tenant from
further performance by Tenant of the covenants on the part of Tenant herein
contained.

 

11

 

7.3                                 Document Review. All documents
utilized by Tenant to evidence any subletting or assignment for which
Landlord’s consent has been requested, shall be subject to prior reasonable
approval by Landlord or its attorney.  Wherever
Landlord’s prior approval or consent to any assignment or sublease is required
pursuant to this Article 7,
then, in such event, Tenant shall submit to Landlord in writing, by notice
directed to Landlord’s Vice President of Leasing, at Landlord’s address, at
least fifteen (15) business days in advance of the date on which Tenant desires
to make such proposed assignment or sublease at least the following information
and materials (each, a “Tenant’s Request to Assign or Sublet”):  (a) all of the terms of said proposed
assignment or sublease, including the proposed effective date thereof, (b) the
name and address of each proposed assignee or subtenant, (c) the portion or
portions of the Premises as to which the requested assignment or sublease is
proposed to apply, and (d) in the case of a requested sublease, the form of
such proposed sublease.  Landlord may
require Tenant to obtain and submit current financial statements of any
proposed assignee or subtenant. 
Landlord shall then have a period of five (5) business days following
receipt of Tenant’s Request to Assign or Sublet within which to notify Tenant
in writing whether Landlord elects to (i) cancel and terminate this Lease as to
the space so affected as of the proposed effective date so specified by Tenant
in its notice, in which event Tenant will be relieved of all obligations under
the Lease as to such space as the date so specified by Tenant; (ii) permit
Tenant to assign this Lease or sublet such space for the duration specified by
Tenant in its notice; or (iii) reject the proposed assignment or sublease on
reasonable grounds.  If Landlord fails
to notify Tenant in writing of Landlord’s election within five (5) business
days of receipt from Tenant of all of the information and materials required in
this Paragraph, Landlord shall be deemed to have approved the proposed
assignment or sublease.  If Tenant
desires to assign the Lease or sublease any portion of the Premises which under
the terms of this Article 7
requires Landlord’s prior consent or approval, then Tenant shall pay Landlord’s
actual and reasonable out-of-pocket expenses (including, without limitation,
attorneys’ fees and expenses) paid to or incurred with any third party in
connection with responding to Tenant’s Request to Assign or Sublet.

 

7.4                                 Subletting. Provided that
Tenant is not in default hereunder, Tenant may from time to time sublet all or
any portion of the Premises to any subtenant without Landlord’s prior consent,
subject, however, to each of the following conditions being fully complied with
by Tenant:

 

(a)                                  The subtenant
must use the Premises in compliance with the provisions set forth in Article 9 and for no other purpose.

 

(b)                                 A fully
executed sublease shall be delivered by Tenant to Landlord within thirty (30)
days of full execution thereof. Failure by Tenant to deliver a copy thereof to
Landlord within the above time frame shall give Landlord, at its option, the
right to terminate the sublease which right of termination shall be in addition
to and not in limitation of any other right or remedy of Landlord.

 

(c)                                  Tenant, Gaiam,
Inc., shall at all times remain primarily liable under the Lease. This right to
sublet without Landlord’s prior consent shall be personal to Gaiam, Inc., and
shall terminate if Gaiam, Inc. assigns its interest in the Lease in whole or in
part.

 

12

 

(d)                                 No subtenant
may further sublease or assign its interest in the sublease without both Gaiam,
Inc.’s and Landlord’s prior written consent, which may be given or withheld in
their respective sole and absolute discretion.

 

7.5                                 Affiliated Entity. Provided Tenant is not in
default of this Lease, which default has not been cured within any applicable
cure period, Tenant may, without Landlord’s prior written consent assign the
Lease to:  (i) a subsidiary, affiliate,
division or corporation controlled or under common control with Tenant; (ii) a
successor corporation to Tenant by merger, consolidation, or nonbankruptcy
reorganization; (iii) a purchaser of substantially all of Tenant’s assets and
who continues to operate as “Tenant” in the Premises (collectively, “Permitted
Assignees”). Tenant acknowledges warrants and agrees that the Permitted
Assignee shall assume all liabilities and obligations of Tenant under the
Lease. Tenant shall notify Landlord of all Permitted Assignee(s) within thirty (30)
days of such assignment or subletting. For the purpose of this Lease, sale or
transfer of Tenant’s capital stock, including without limitation, a transfer in
reorganization of Tenant and any sale through any public exchange, shall not be
deemed an assignment, subletting, or any other transfer of the Lease or the
Premises, provided that the surviving entity in such transfer assumes the Lease
by operation of law.

 

ARTICLE 8

 

TRANSFER BY LANDLORD AND LIMITED LIABILITY

 

8.1                                 Transfer of Landlord’s Interest. In the event of a sale,
conveyance, or assignment by Landlord of Landlord’s interest in the Building
Complex (other than a transfer for security purposes only), Landlord shall be
relieved from and after the date specified in any such notice of transfer or
assignment of all of Landlord’s obligations and liabilities accruing thereafter
on the part of Landlord, and Tenant agrees to look only toward such assignee or
transferee of Landlord’s interest.

 

8.2                                 Limited Liability of Landlord. Anything contained in this
Lease to the contrary notwithstanding, Tenant agrees that Tenant shall look
solely to the estate of Landlord in the Building Complex for the collection of
any judgment (or other judicial process) requiring the payment of money by
Landlord in the event of any default or breach by Landlord with respect to any
of the terms and provisions of this Lease to be observed or performed by
Landlord, subject, however, to the prior rights of the holder of any mortgage
covering the Building Complex, and no other assets of Landlord, its partners,
agents, employees, officers, or employees or officers of any of its partners
shall be subject to levy, execution or other judicial process for the
satisfaction of Tenant’s claim and Landlord shall not be liable for any such
default or breach except to the extent of Landlord’s estate in the Building
Complex.

 

8.3                                 Limited Liability of Tenant. Landlord agrees that the
personal assets of Tenant’s employees, directors and officers shall not be
subject to levy, execution, or other judicial process for the satisfaction of
Landlord’s claim against Tenant.

 

13

 

ARTICLE 9

 

USE OF PREMISES

 

9.1                                 Use.  Except as expressly permitted
by prior written consent of Landlord, the Premises shall not be used other than
for a video production company and for other general business office purposes.
Any other use shall require Landlord’s prior written consent, which shall not
be unreasonably withheld provided that such use complies with applicable
restrictive covenants and zoning, the use is consistent with a first class
suburban office building, and does not generate, store, use, or dispose of any
hazardous, toxic or infectious substances in or from the Premises. All use of
the Premises shall comply with the terms of this Lease and all applicable laws,
ordinances, regulations or other governmental ordinances from time to time in
existence.

 

9.2                                 Compliance with Rules and
Regulations. Tenant and
employees and all persons visiting or doing business with Tenant in the
Premises shall be bound by and shall observe the reasonable Rules and
Regulations as set forth in Exhibit C
attached hereto and made a part hereof, which may, at Landlord’s sole
discretion, be promulgated, amended, or expanded from time to time during the
Lease Term by Landlord relating to the Building, the Building Complex and/or
the Premises of which notice in writing shall be given to Tenant within thirty
(30) days of such clause at which time they will become effective and all such
rules and regulations as changed from time to time shall be deemed to be
incorporated into and form a part of this Lease. Any default in the performance
or observance of such rules and regulations shall be a default hereunder and
Landlord shall have all remedies provided for in this Lease in the event of
default by Tenant.  Landlord however,
shall not be responsible to Tenant for nonobservance by any other tenant or
person of any tenant or person of any such rules and regulations.
Notwithstanding the above except as required by any governmental authority,
law, or pursuant to recorded documents, Landlord shall not adversely impose any
new rules and regulations upon Tenant without Tenant’s consent, which shall not
be unreasonably withheld.

 

9.3                                 Electronics Testing Lab. Subject to compliance with
(i) all other provisions of this Lease, (ii) applicable zoning, use and
building code restrictions, (iii) insurance requirements, and (iv) any
restrictions and requirements imposed by applicable recorded covenants and
regulations, Tenant may use a portion of the Premises for an electronics
testing lab.

 

ARTICLE 10

 

INSURANCE

 

10.1                           Tenant’s Insurance.

 

(a)                                  Tenant
further covenants and agrees that throughout the Lease Term hereof, Tenant will
carry and maintain, at its sole cost and expense, the following types of
insurance, in the amounts specified and in the form hereinafter provided for:

 

(i)                                     Commercial
General and Umbrella Liability Insurance covering the Premises and Tenant’s use
thereof against claims for personal injury or death, property damage

 

14

 

and product liability occurring upon, in or about the Premises, such
insurance to be written on an occurrence basis (not a claims made basis), with
a limit for each occurrence not less than $1,000,000 and to have general
aggregate limits of not less than $2,000,000, together with umbrella or excess
liability insurance with limits of $15,000,000 for each occurrence and in the
aggregate, for each policy year.  The
insurance coverage required under this Section 10.1(a)(i) shall, in addition,
extend to any liability of Tenant arising out of the indemnities provided for
in Section 14.1
and, if necessary, the policy shall contain a contractual endorsement to that
effect.  CGL insurance shall be written
on ISO occurrence form CG 00 01 01 96 (or a substitute form providing
equivalent or better coverage).  The
certificate of insurance evidencing the Commercial General Liability and
Umbrella Liability coverage shall specify all endorsements required herein,
shall name all additional insureds via the CG 2011 Additional
Insured-Managers/Lessors of Premises endorsement required by Section 10.1(b)
below.

 

(ii)                                  Commercial
all risk property insurance covering all of the items included in Tenant’s
leasehold improvements, heating, ventilating and air conditioning equipment
maintained by Tenant, trade fixtures, merchandise and personal property from
time to time in, on or upon the Premises, and alterations, additions or changes
made by Tenant pursuant to Section 15.1, in an amount not less
than one hundred percent (100%) of their full replacement value from time to
time during the Term, providing protection against perils included within the
ISO Special Causes of Loss –Form insurance policy (or substitute form
providing, in Landlord’s reasonable discretion, equivalent or better coverage),
together with insurance against sprinkler damage, vandalism and malicious
mischief.  Any policy proceeds from such
insurance shall be held in trust by Tenant’s insurance company for the repair,
construction and restoration or replacement of the property damaged or
destroyed unless this Lease shall cease and terminate under the provisions of Section 21.1
of this Lease.  The certificate of
insurance evidencing such coverage which is delivered by Tenant pursuant to Section 10.1(b)
below shall designate Landlord and Wells Management, Inc. as loss payee as
their interests may appear with respect to the Building, all leasehold
improvements, heating, ventilating and air-conditioning equipment and all
fixtures (other than Tenant’s trade fixtures).

 

(iii)                               Workers’
Compensation and Employer’s Liability insurance affording statutory coverage
and containing statutory limits with the Employer’s Liability portion thereof
to have minimum limits of $500,000.00.

 

(iv)                              INTENTIONALLY
DELETED.

 

(v)                                 Automobile
(and if necessary, commercial umbrella) liability insurance with a limit of not
less than $5,000,000 for each accident. 
Such insurance shall insure liability arising out of any automobiles
used in connection with Tenant’s business (including owned, hired, leased and
non-owned automobiles).

 

(b)                                 All
policies of the insurance provided for in Section 10.1(a) shall be issued in
form acceptable to Landlord by insurance companies with a rating and financial
size of not less than A-X in the most current available “Best’s Insurance
Reports”, and licensed to do business in the state in which Landlord’s Building
is located.  Landlord, in its sole
discretion,

 

15

 

shall be permitted to temporarily waive or accept alternative coverages
for Tenant’s insurance as required by the terms of this Section 10.1.  Each and every such policy:

 

(i)                                     shall
name Landlord and Wells Management, Inc., Wells Real Estate Funds, Inc. and
subsidiary and affiliated companies, officers, directors and employees as an
additional insured (as well as any mortgagee of Landlord and any other party
reasonably designated by Landlord) and the coverage in Section 10.1(a)(ii),
above, shall also name Landlord as loss payee as its interest may appear with
respect to all leasehold improvements, heating, ventilating and
air-conditioning equipment and fixtures (other than Tenant’s trade fixtures).

 

(ii)                                  shall
(and a certificate thereof shall be delivered to Landlord at or prior to the
execution of the Lease) be delivered to each of Landlord and any such other
parties in interest within thirty (30) days after delivery of possession of the
Premises to Tenant and thereafter within thirty (30) days prior to the
expiration of each such policy, and, as often as any such policy shall expire
or terminate.  Renewal or additional
policies shall be procured and maintained by Tenant in like manner and to like
extent;

 

(iii)                               shall
contain a provision that the insurer will give to Landlord and such other
parties in interest at least thirty (30) days notice in writing in advance of
any material change, cancellation, termination or lapse, or the effective date
of any reduction in the amounts of insurance; and

 

(iv)                              shall
be written as a primary policy which does not contribute to and is not in
excess of coverage which Landlord may carry.

 

(c)                                  Any
insurance provided for in Section 10.1(a) may be maintained by
means of a policy or policies of blanket insurance, covering additional items
or locations or insureds, provided, however, that:

 

(i)                                     Landlord
and any other parties in interest from time to time designated by Landlord to
Tenant shall be named as an additional insured thereunder as its interest may
appear;

 

(ii)                                  the
coverage afforded Landlord and any such other parties in interest will not be
reduced or diminished by reason of the use of such blanket policy of insurance;

 

(iii)                               any
such policy or policies [except any covering the risks referred to in Section 10.1(a)]
shall specify therein (or Tenant shall furnish Landlord with a written
statement from the insurers under such policy specifying) the amount of the
total insurance allocated to Tenant’s improvements and property more
specifically detailed in Section 22(a); and

 

(iv)                              the
requirements set forth in this Section 10.1 are otherwise satisfied.

 

16

 

(d)                                 Notwithstanding
anything to the contrary set forth hereinabove, Landlord and Tenant do hereby
waive any and all claims against one another for damage to or destruction of real
or personal property to the extent such damage or destruction can be covered by
an ISO Causes of Loss – Special Form property insurance of the type described
in Section 10.1(a)(ii)
above.  Each party shall also be
responsible for the payment of any deductible amounts required to be paid under
the applicable ISO Causes of Loss – Special Form property insurance carried by
the party whose property is damaged. 
These waivers shall apply if the damage would have been covered by a
customary ISO Causes of Loss – Special Form property insurance policy, even if
the party fails to obtain such coverage. 
The intent of this provision is that each party shall look solely to its
insurance with respect to property damage or destruction which can be covered
by ISO Causes of Loss – Special Form property insurance of the type described
in Section 10.1(a)(ii).  To further effectuate the provisions of this
Section 10.1(d),  Landlord and Tenant both agree to provide
copies of this Lease (and in particular, these waivers) to their respective
insurance carriers and to require such insurance carriers to waive all rights
of subrogation against the other party with respect to property damage covered
by the applicable ISO Causes of Loss – Special Form property insurance policy.

 

(e)                                  Tenant acknowledges and
agrees that any contractors (and subcontractors of any tier) hired by Tenant to
do work in the Premises will be required to carry sufficient insurance coverage
insuring the contractor (or subcontractor), Tenant and Landlord with terms
equivalent to those specified in this Section 10.1, and Tenant shall provide
certificates of such insurance to Landlord prior to commencing any work in the
Premises.

 

10.2                           Landlord’s Insurance.  Landlord agrees to carry or cause to be carried during the term
hereof Commercial General and Umbrella Liability Insurance coverage on the
Building Complex providing coverage against claims for personal
injury or death, property damage and product liability occurring upon, in or
about the Building Complex, such insurance to be written on an occurrence basis
(not a claims made basis), with a limit for each occurrence not less than
$1,000,000 and to have general aggregate limits of not less than $5,000,000 for
each policy year.  The insurance
coverage required under this Section 10.2
shall, in addition, extend to any liability of Landlord arising out of the
indemnities provided for in Section 14.2
and, if necessary, the policy shall contain a contractual endorsement to that
effect.  CGL insurance shall be written
on ISO occurrence form CG 00 01 01 96 (or a substitute form
providing equivalent or better coverage). 
Landlord also agrees to carry during the term hereof insurance for
fire, extended coverage, vandalism and malicious mischief, insuring the
Building Complex (excluding foundations, excavations and other non-insurable
items) for the full insurable value thereof. Landlord may, but shall not be
obligated to, take out and carry any other form or forms of insurance as it or
the mortgagees of Landlord may reasonably determine to be advisable.
Notwithstanding any contribution by Tenant to the cost of insurance premiums,
as provided in Article 4,
Tenant acknowledges that it has no right to receive any proceeds from any such
insurance policies carried by Landlord, and that such insurance will be for the
sole benefit of Landlord, with no coverage for Tenant for any risk insured
against.

 

10.3                           Subrogation. The parties hereto agree
that any and all fire, extended coverage and/or property damage insurance which
is required to be carried by either shall be endorsed with

 

17

 

a
subrogation clause, substantially as follows: “This insurance shall not be
invalidated should the insured waive, in writing prior to a loss, any and all right
of recovery against any party for any special causes of loss,” and each party
hereto waives all claims for recovery from the other party, its officers,
agents or employees for any loss or damage (whether or not such loss or damage
is caused by negligence of the other party), and notwithstanding any provisions
contained in this Lease to the contrary, to any of its real or personal
property insured under valid and collectible insurance policies to the
extent of the collectible recovery under such insurance.

 

ARTICLE 11

 

OBSERVANCE OF LAW

 

11.1                           Law.  Tenant shall comply with all provisions of
law, including without limitation, federal, state, county and city laws,
ordinances and regulations and any other governmental, quasi-governmental or
municipal regulations, which shall impose any duty upon Landlord or Tenant, and
which relate to the partitioning, equipment operation, alteration, occupancy
and use of the Premises, and to the making of any repairs, replacements,
alterations, additions, changes, substitutions or improvements of or to the
Premises. Moreover, Tenant shall comply with all police, fire and sanitary
regulations imposed by any federal, state, county or municipal authorities, or
made by insurance underwriters, and to observe and obey all governmental and
municipal regulations and other requirements governing the conduct of any
business conducted in the Premises.

 

11.2                           Taxes. Tenant shall fully and timely pay all
business and other taxes, charges, rates, duties, assessments and license fees
levied, rates imposed, charged or assessed against or in respect of Tenant’s
occupancy of the Premises or in respect of the personal property, trade
fixtures, furniture and facilities of Tenant or the business or income of
Tenant on and from the Premises, if any, as and when the same shall become due,
and to indemnify and hold Landlord harmless from and against all payment of
such taxes, charges, rates, duties, assessments and license fees and against
all loss, costs, charges and expenses occasioned by or arising from any and all
such taxes, rates, duties, assessments and license fees, and to promptly
deliver to Landlord for inspection, upon written request of Landlord, evidence
satisfactory to Landlord of any such payments.

 

18

 

ARTICLE 12

 

WASTE AND NUISANCE

 

12.1                           Tenant shall
not commit, suffer or permit any waste or damage or disfiguration or injury to
the Premises or common areas in the Building or the fixtures and equipment
located therein or thereon, or permit or suffer any overloading of the floors
thereof and shall not place therein any safe, heavy business machinery,
computers, data processing machines, or other heavy things without first
obtaining the consent in writing of Landlord and, if requested, by Landlord’s
superintending architect, and not use or permit to be used any part of the
Premises for any dangerous, noxious or offensive trade or business, and shall
not cause or permit any nuisance, noise or action in, at or on the Premises.
Tenant shall not store, produce, maintain or dispose of any materials or
substances in or about the Premises, the Building or Building Complex which is
a regulated, toxic, hazardous or infectious material or substance under any
environmental statute, rule, regulation, or ordinance of any governmental
authority.

 

ARTICLE 13

 

ENTRY BY LANDLORD

 

13.1                           Landlord and
its agents shall have the right to enter the Premises escorted by an employee
or representative of Tenant, at all reasonable times, upon prior verbal notice
to Tenant as set forth below for the purpose of examining or inspecting the
same, and any other services to be provided by Landlord to Tenant hereunder, to
show the same to prospective bona fide purchasers, lenders, investors or
tenants of the Building (collectively, “Prospect Visits”), and to make such
alterations, repairs, improvements or additions, whether structural or
otherwise, to the Premises or to the Building as Landlord may deem necessary or
desirable. Tenant shall reasonably cooperate with Landlord to permit such
access and provide an escort. Notices for entry shall be given to an officer or
supervisor of Tenant, as set forth on a written list delivered by Tenant to
Landlord. Notwithstanding the above, Landlord shall have the right (but not the
obligation) to enter unescorted and without notice for janitorial services (if
not supplied by Tenant) or if Landlord reasonably believes that there exists an
emergency.  Landlord may enter by means
of a master key without liability to Tenant except for any failure to exercise
due care for Tenant’s property and without affecting this Lease. Landlord shall
use reasonable efforts to give Tenant not less than 48 hours prior notice of
Prospect Visits and will coordinate such entry with Tenant so as to not
interfere with any of Tenant’s film production including delaying or scheduling
of such visits after business hours if reasonably requested by Tenant. If such
Prospect Visits exceed ten (10) per calendar year then Landlord will pay to
Tenant for each additional visit during such calendar year a visitation fee
equal to $50.00 per hour for each additional Prospect Visit during the
applicable calendar year, prorata for any partial hour of visitation.

 

19

 

ARTICLE 14

 

INDEMNIFICATION OF LANDLORD

 

14.1                           Tenant’s Indemnity. Subject to the provisions
of Section 10.3 of this Lease
and Section 14.3 below,
Tenant shall indemnify Landlord and save it harmless from and against any and
all loss (including loss of rentals payable by Tenant or other tenants in the
event of loss either directly or indirectly caused by any act or omission of
Tenant unless such loss is covered by Landlord’s rent abatement insurance),
claims, actions, damages, liability and expenses in connection with loss of life
and personal injury, hazardous substance or environmental claims, and damage to
property arising from any occurrence in, upon or at Premises during the term of
this Lease or any part thereof, or occasioned wholly or in part by any act or
omission of Tenant, its agents, contractors, employees, servants, licensees, or
concessionaires or invitees or by anyone permitted to be on Premises by Tenant;
however in no event shall Tenant indemnify Landlord or hold it harmless from
any negligence or misconduct of Landlord, its agents, employees or contractors
or Landlord’s invitees. In case Landlord shall be made a party to any
litigation commenced by or against Tenant (except litigation where Tenant is
seeking relief from or a remedy against Landlord, its agents, employees, or
contractors), then Tenant shall protect and hold Landlord harmless and shall
pay all costs, expenses and reasonable attorneys’ fees incurred or paid by
Landlord in connection with such litigation whether or not such action is
contested or prosecuted to judgment. All personal property on Premises shall be
at Tenant’s sole risk, and Landlord shall not be liable for any damage done to
or loss of such personal property or for damage or loss suffered by Tenant,
unless caused solely by Landlord’s negligence, subject to the provisions of Sections 10.3 and 23.1.

 

14.2                           Landlord’s Indemnity. Subject to the provisions
of Section 8.2, Section 10.3
and Section 14.3 below,
Landlord shall indemnify and hold Tenant harmless from and against any and all
loss, claims, actions or damages, liability and expenses in connection with
loss of life and personal injury, and damage to property arising from any
occurrence occasioned wholly or in part by any act or omission of Landlord, its
agents, employees or contractors, except as set forth herein; however in no
event shall Landlord indemnify Tenant or hold it harmless from any negligence
of Tenant, its agents, employees or contractors. If Landlord has any liability
pursuant to Article 23, then
this indemnity shall apply to any claims or expenses of Tenant arising in
conjunction with such liability; however this indemnity shall not change or
increase Landlord’s liability under Article 23.

 

14.3                           Comparative Negligence. Subject to the provisions
of Section 10.3 but
notwithstanding any indemnity provision or other provisions contained in this
Lease to the contrary, if both Landlord’s and Tenant’s negligence (which shall
include the agents, partners, contractors, invitees and employees of either, as
applicable) caused or contributed to any claim for damages for injury to person
or property then neither party shall indemnify the other for such negligence
and each party shall be responsible for such claims pursuant to the provisions
of C.R.S. § 13-21-111 pertaining to comparative negligence, as amended
from time to time.

 

20

 

ARTICLE 15

 

ALTERATIONS

 

15.1                           Alterations by Tenant.  Tenant shall not make, install or erect in or to the Premises any
installations, alterations, additions or partitions which require a building or
similar permit and/or affect any structural portion of the Building including
the roof or affect any of the Building systems including but not limited to
HVAC, plumbing and electrical systems, without submitting the drawings and
specifications to Landlord and obtaining Landlord’s prior written consent in
each instance, which consent may not be unreasonably withheld.  Furthermore, Tenant shall obtain Landlord’s
prior written consent to any change or changes in such drawings or
specifications submitted as aforesaid, subject to the payment of the cost to
Landlord of having its architects and/or consultants review such plans and
changes thereto prior to proceeding with any work based on such drawings or
specifications. All such work shall be performed free and clear of all
mechanics’s liens and Landlord shall have no liability for the performance of
such work, notwithstanding its consent to any plans and specifications.
PROVIDED NEVERTHELESS that Landlord may, at its option, at Tenant’s expense,
require that Landlord’s contractors be engaged for any mechanical or electrical
work. Without limiting the generality of the foregoing, any work performed by
or for Tenant shall be performed by competent workmen whose labor union affiliations
are not incompatible with those of any workmen who may be employed in the
Building Complex by Landlord, its contractors or subcontractors and all work
shall be subject to the inspection and reasonable review and approval by
Landlord and/or its consultants. In addition to the above, all contractors and
subcontractors must meet Landlord’s specifications, as solely determined by
Landlord, for minimum requirements for insurance, bonds, quality of work,
experience and such other reasonably applicable factors. Tenant shall submit to
Landlord’s supervision over construction, shall provide Landlord upon request
with financial assurances prior to the commencement of alterations, and
promptly pay to Landlord’s or Tenant’s subcontractors, as the case may be, when
due, the costs of all such work and of all materials, labor and services
involved therein and of all decoration and all changes in the Building, its
equipment or services necessitated thereby. 
Tenant covenants that Tenant will not suffer or permit during the Term
hereof any mechanics’ or other liens for work, labor, services or materials
ordered by Tenant or for the cost of which Tenant may be in any way obligated,
to attach to the Premises or to the Building Complex and that whenever and so
often as any such liens shall attach or claims therefor shall be filed, Tenant
shall, within thirty (30) days after Landlord has notice of the filing of the
claim for lien, procure the discharge thereof by payment or by giving security
or in such other manner as is or may be required or permitted by law or which
shall otherwise satisfy Landlord and/or Landlord’s lender. Tenant shall, at its
own cost and expense, take out or cause to be taken out any additional
insurance or bonds reasonably required by Landlord to protect the Landlord’s
and Tenant’s interest during the period of alteration.

 

At least five (5) days prior to the commencement of any work permitted
to be done by persons requested by Tenant on the Premises, Tenant shall notify
Landlord of the proposed work and the names and addresses of the persons
supplying labor and materials for the proposed work so that Landlord may avail
itself of the provisions of statutes such as Section 38-22-105(2) of the
Colorado Revised Statutes (1973). 
During any such work on the Premises, Landlord, or its

 

21

 

representatives, shall have the right to go upon and inspect the
Premises at all reasonable times, and shall have the right to post and keep
posted thereon notices such as those provided for by Section 38-22-105(2)
C.R.S. (1973) or to take any further action which Landlord may deem to be
proper for the protection of Landlord’s interest in the Premises.

 

15.2                           Alterations by Landlord.  Landlord hereby reserves the right at any time and from time to
time to make changes in, additions to, subtractions from or rearrangements of
the Building Complex, including, without limitation, all improvements at any
time thereof, all entrances and exits thereto, and to grant, modify and
terminate easements or other agreements pertaining to the use and maintenance
of all or parts of the Building, including, but not limited to, the entrance
foyer and lobby, and the common corridors and to make changes or additions to
the pipes, conduits, ducts, utilities and other necessary building services in
the Premises which serve other portions of the Building, provided that prior to
the Commencement Date, Landlord may alter the Premises to the extent found
necessary by Landlord to accommodate changes in construction design or
facilities including major alterations but provided always that the Premises,
as altered, shall be in all material aspects comparable to the Premises as
defined herein. Landlord shall not unreasonably obstruct or interrupt Tenant’s
access to the Premises and in such event Landlord shall provide alternative
access during all business hours. If Landlord elects to block Tenant’s access
during non-business hours for non-emergencies, then Landlord shall reasonably
coordinate same with Tenant. Notwithstanding the provision set forth above,
Landlord agrees during the initial term, provided Tenant is not in default, not
to materially change the character or configuration of the first floor lobby of
the Building without Tenant’s consent which will not be unreasonably withheld
or delayed.

 

ARTICLE 16

 

SIGNS AND ADVERTISING

 

16.1                           Signs Generally.  Tenant shall not install, paint, display, inscribe, place or
affix any sign, picture, advertisements, notice, lettering or direction on any
part of the Building Complex or in the interior of the Premises or other
portion of the Building.  Landlord will
prescribe a uniform pattern of identification signs for tenants to be placed on
the outside corridor wall which is near the door leading into the Premises and
other than such identification signs, Tenant shall not install, paint, display,
inscribe, place or affix, or otherwise attach, any sign, picture,
advertisement, notice, lettering or direction on the inside or outside of the
Premises for exterior view without the written consent of Landlord.

 

16.2                           Directory Signage.  Landlord shall at Landlord’s cost install directory signage for
Tenant in the lobby, which causes Tenant’s name “Gaiam, Inc.” to be readily
visible upon entry to the main lobby of the Building and which identifies
Tenant as being on the second and third floors.  At Tenant’s request and at Tenant’s cost, Landlord agrees to add
the name or names and corresponding suite numbers of any assignee or subtenant
of Tenant permitted or approved pursuant to Article 7
hereof to the directory signage in main lobby of the Building.

 

16.3                           Monument
Sign.  Subject expressly to all
terms, conditions, restrictions, limitations, and requirements imposed by all
applicable governmental entities having jurisdiction

 

22

 

and all private restrictions encumbering the Property (including,
without limitation, that certain Amended and Restated Master Declaration of
Covenants, Conditions and Restrictions for Interlocken, recorded January 24,
1990, under Reception No. 1025034, Boulder County, Colorado public
records, as amended) (said Amended and Restated Master Declaration, as amended,
is herein referred to as the “Master Declaration”), and so long as Tenant is
leasing and occupying more than fifty percent (50%) of the Building, and is not
in default of its obligations under this Lease (after the expiration of any
applicable notice and cure period), Tenant shall have the right, at Tenant’s
sole cost and expense, to design, manufacture, install and maintain one (1)
free-standing, internally lighted monument sign to be located within the
Building Complex; provided, however, if such a monument sign is permitted under
applicable law and all private restrictions (including, without limitation, the
Master Declaration), and if identification signs or panels for more than one
tenant are permitted on such monument sign, then and in such case, Landlord
agrees to share with Tenant in the cost of such monument sign on a prorata
basis, such prorata share to be determined based on the ratio that the number
of individual panels permitted to be displayed on such monument sign
identifying individual tenants are actually used by Landlord for tenants of the
Building other than Tenant (and its affiliates) bears to the total number of
such panels permitted on any such monument sign (including the panel or panels
used to identify Tenant or any of its affiliates), and Landlord shall be
entitled to place at its expense one or more sign panels on such monument sign
identifying the name(s) of any other tenant occupying the Building.  Tenant’s right to install such monument sign
on the Land shall be conditioned upon Tenant obtaining and delivering to
Landlord evidence satisfactory to Landlord that all necessary approvals for the
installation of such monument sign from the applicable governmental authorities
and all necessary approvals of the Interlocken architectural control committee
under the Master Declaration have been obtained.  The exact location of such monument sign, and the size, design,
color and method of illumination of such monument sign shall be subject to the
prior written approval of Landlord, which approval shall not be unreasonably
withheld.  Tenant agrees that any such
monument sign shall be designed to utilize first-class construction materials
and shall be architecturally compatible with the Building.  For so long as the Rentable Area leased by
Tenant in the Building shall exceed the Rentable Area of any other tenant of
the Building, Tenant shall have the right to place Tenant’s sign panel and
associated graphics on such monument sign in the top position on such monument
sign.  If any other tenant shall lease
more Rentable Area in the Building than is leased by Tenant, the location of
each tenant’s identification sign on such monument shall be determined on the
basis of the amount of Rentable Area in the Building leased by each such
tenant.  Tenant further agrees that
Tenant shall remove any sign panel, graphics or letters identifying Tenant (or
its affiliates) from such monument sign at Tenant’s cost upon the expiration or
earlier termination of this Lease; and if such removal causes any damage or
defacement to such monument sign, Tenant shall be responsible for the repair of
same.  Such obligations shall survive
any expiration or termination of this Lease.

 

23

ARTICLE 17

 

SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST

 

17.1                           This Lease and
the rights of Tenant hereunder shall be and are hereby made subject and
subordinate to the lien of any mortgages or deeds of trust now or hereafter
existing against the Building Complex and to all renewals, modifications,
consolidations, replacements and extensions thereof and to all advances made,
or hereafter to be made, upon the security thereof. Although such subordination
shall be self-operating, Tenant, or its successors in interest, shall upon
Landlord’s request, execute and deliver upon the demand of Landlord any and all
instruments desired by Landlord, subordinating, in the manner reasonably
requested by Landlord, this Lease to any such mortgage or deed of trust. Landlord
is hereby irrevocably appointed and authorized as agent and attorney-in-fact of
Tenant to execute all such subordination instruments in the event Tenant fails
to execute said instruments within fifteen (15) days after notice from Landlord
demanding the execution thereof.

 

Should
any mortgage or deed of trust affecting the Building Complex be foreclosed,
then:

 

(a)                                  the liability
of the mortgagee, beneficiary or purchaser at such foreclosure sale shall exist
only so long as such mortgagee, beneficiary or purchaser is the owner of the
Building Complex and such liability shall not continue or survive after further
transfer of ownership; and

 

(b)                                 Tenant shall be
deemed to have attorned, as Tenant under this Lease, to the purchaser at any
foreclosure sale thereunder, and this Lease shall continue in full force and
effect as a direct lease between and binding upon Tenant and such purchaser at
any foreclosure sale.

 

As used in this Article 17,
“mortgagee” and “beneficiary” shall include successors and assigns of any such
party, whether immediate or remote, the purchaser of any mortgage or deed of
trust, whether at foreclosure or otherwise, and the successors, assigns and
mortgagees and beneficiaries of such purchaser, whether immediate or remote.

 

Landlord, at the written request of Tenant, agrees to request any
mortgagee or beneficiary to enter into a non-disturbance agreement with Tenant,
in a form satisfactory to such mortgagee or beneficiary, stating that Tenant’s
right to the continued use and possession of the Premises shall be under the
same terms and conditions as set forth in this Lease provided that at such time
Tenant is not in default of its obligations herein. Landlord makes no
representations or warranties that such non-disturbance agreement will be entered
into by any beneficiary or mortgagee, however, the self-operative subordination
of this Lease and attornment by Tenant is in such event conditioned upon the
mortgagee or beneficiary not disturbing Tenant’s right under this Lease,
provided that Tenant is not in default hereof.

 

ARTICLE 18

 

ESTOPPEL CERTIFICATE/FINANCIAL INFORMATION

 

18.1                           Estoppel Certificate. Tenant agrees that it will
from time to time, upon request by Landlord, execute and deliver to Landlord
within ten (10) days after demand therefor an estoppel certificate on
Landlord’s reasonable form certifying that this Lease is unmodified and in full
force and effect (or if there have been modifications, that the same is in full
force and effect as so modified). Notwithstanding the above, if during such ten
(10) day period an authorized

 

24

 

representative
or officer of Tenant is not available in Colorado to execute the estoppel
certificate, then Tenant shall not be in default if it returns the executed
certificate within twenty (20) days of demand therefor.

 

18.2                           Financial Information.  Tenant shall, upon Landlord’s written request and upon Tenant’s
receipt from Landlord of a copy of a fully executed letter of interest which
evidences either a bona fide proposed sale of or refinancing with a federally
chartered lending institution, pension fund, insurance company or other source
of capital for the Building Complex, deliver to such lender or purchaser a copy
of Tenant’s most recent financial statement, which annual financial statement
shall be prepared and reviewed by an independent certified public accountant no
less often than once per year in accordance with generally accepted accounting
principals (“GAAP”), provided, however, Landlord shall not be required to
provide Tenant with written evidence of a proposed refinancing for the first
two refinancing requests made by Landlord during the term of this Lease in
conjunction with a proposed refinancing of the Building Complex. Except in the
manner specifically set forth in the preceding sentence, Landlord shall not
include Tenant’s financial statements in any attempt to obtain a purchaser for,
or refinancing on, the Building Complex. Tenant agrees that any letter of
interest shall be confidential as to the name of the lender and/or purchaser
and as to the terms, if any, contained in such letter of interest, and Tenant
agrees to execute a reasonable confidentiality agreement if requested by
Landlord. Tenant shall have the right to require a reasonable confidentiality
agreement from such lender or purchaser concerning such financials, if Tenant
is not a public company. Furthermore, such lender or purchaser may, if it has
reasonable questions about matters contained in the financials, address such
questions in writing to the president of Tenant, and the president shall
reasonably and promptly cooperate with such lender or purchaser with respect to
the responses to the questions.

 

ARTICLE 19

 

QUIET ENJOYMENT

 

19.1                           Subject to the
terms and provisions of this Lease, Landlord covenants and agrees that Tenant
shall peaceably and quietly enjoy the Premises and Tenant’s rights hereunder
during the term hereof, without hindrance by Landlord.

 

25

 

ARTICLE 20

 

FIXTURES

 

20.1                           Any or all
installations, alterations, additions, partitions and fixtures in or upon the
Premises other than Tenant’s trade fixtures, work stations with movable walls,
mounted video screens, raised platforms and cables beneath the raised
platforms, which are located upon the Premises, whether placed there by Tenant
or Landlord, shall, immediately upon such placement, become the property of
Landlord without compensation therefor to Tenant. Notwithstanding anything
herein contained, Landlord shall be under no obligation to repair, maintain or
insure such installations, alterations, additions, partitions and fixtures or
anything in the nature of a leasehold improvement made or installed by or on
behalf of Tenant. Landlord may elect that any or all installations made or
installed by or on behalf of Tenant be removed at the end of the Lease Term
and, if Landlord so elects, it shall be Tenant’s obligation to restore the
Premises to the conditions they were in previous to such alterations,
installations, partitions and fixtures on or before the termination of this
Lease. Such removal and restoration shall be at the sole expense of Tenant.

 

ARTICLE 21

 

DAMAGE OR DESTRUCTION

 

21.1                           Casualty. In the event
that the Building should be totally destroyed by fire, tornado or other
casualty, or should be so damaged that rebuilding or repairs cannot be
completed within one hundred and eighty (180) days after the date of such
damage, Landlord may, at its option, terminate this Lease in which event the
rent shall be abated during the unexpired portion of this Lease effective with
the date of such damage, or Landlord may proceed to rebuild the Building and
the Premises. If the damage prohibits Tenant’s use of the Premises, cannot be
repaired within one hundred and eighty (180) days and was not caused by Tenant,
then Tenant can elect to terminate this Lease by written notice to Landlord
received within sixty (60) days of the date of damage. In the event the
Building should be damaged by fire, tornado or other casualty, but only to such
extent that rebuilding or repairs in Landlord’s reasonable estimation can be
completed within one hundred and eighty (180) days after the date of such
damage, or if the damage cannot be repaired within such time frame but Landlord
does not elect to terminate this Lease, in either such event, Landlord shall,
within sixty (60) days after the date of such damage commence to rebuild or
repair the Building and shall proceed with reasonable diligence to restore the
Building to substantially the same condition in which it was immediately prior
to the happening of the casualty, except that Landlord shall not be required to
rebuild, repair or replace any part of the partitions, fixtures and other
improvements which may have been placed by Tenant or other tenants within the
Building and rent shall equitably abate from the date of damage until such
damage is repaired if such casualty results in damage to Tenant’s Premises or
prohibits its access to the Premises or use thereof. In the event any mortgagee
under a deed of trust, security agreement or mortgage on the Building should
require that the insurance proceeds be used to retire the mortgage debt,
Landlord shall have no obligation to rebuild and if Landlord

 

26

 

so
elects, this Lease shall terminate upon notice to Tenant. Unless otherwise
provided in this Lease, any insurance which may be carried by Landlord or
Tenant against loss or damage to the Building or to the Premises shall be for
the sole benefit of the party carrying such insurance and under its sole
control.

 

21.2                           Casualty Caused by Tenant.  If fire or other casualty causing injury to the Premises or other
parts of the Building shall have been caused by the negligence or misconduct of
Tenant, its agents, servants or employees, or by any other persons entering the
Building under express or implied invitation of Tenant, such injury may be
reasonably repaired by Landlord at the reasonable expense of Tenant.

 

ARTICLE 22

 

CONDEMNATION

 

22.1                           Eminent Domain. If any part
of the Rentable Area of the Premises is taken by eminent domain, or by
conveyance in lieu thereof then this Lease, at the option of either party
evidenced by notice to the other given within thirty (30) days from such taking
or conveyance, shall forthwith cease and terminate entirely. In the event of
such termination of this Lease, then rental shall be due and payable to the
actual date of such termination. If neither party terminates this Lease, this
Lease shall cease and terminate as to that portion of the Premises so taken as
of the date of such taking, and the rental thereafter payable under this Lease
shall be abated prorata from the date of such taking in an amount by which that
portion of the Rentable Area of the Premises so taken shall bear to the
Rentable Area of the Premises prior to such taking. If any part of the Building
Complex shall be taken by eminent domain, or by conveyance in lieu thereof, and
if such taking substantially interferes with Landlord’s ownership or use of the
Building Complex, Landlord, at its option, may upon thirty (30) days’ notice to
Tenant, terminate this Lease as of the date of such taking.

 

22.2                           Damages. All
compensation awarded for any taking (or the proceeds of private sale in lieu
thereof) of the Premises or Building Complex shall be the property of Landlord
and Tenant hereby assigns its interest in any such award to Landlord; provided,
however, Landlord shall have no interest in any award made to Tenant for the
taking of Tenant’s fixtures and other personal property or moving expenses if a
separate award for such items is made to Tenant.

 

22.3                           Restoration. If both
Landlord and Tenant elect not to terminate this Lease, Tenant shall remain in
that portion of the Premises which shall not have been appropriated or taken as
herein provided, and Landlord agrees, at Landlord’s sole cost and expense (not
to exceed the amount of condemnation proceeds received by Landlord), to, as
soon as reasonably possible, restore the remaining portion of the Premises to a
complete unit of like quality and character as existed prior to such
appropriation or taking.

 

27

 

ARTICLE 23

 

LOSS AND DAMAGE AND DELAY

 

23.1                           Loss and Damage. Landlord
shall not be liable or responsible in any way for:

 

(a)                                  any death or
injury arising from or out of any occurrence in, upon or at the Building
Complex or for damage to property of Tenant or others located on the Premises,
nor shall it be responsible in any event for damage to any property of Tenant
or others from any cause whatsoever, unless such damage, loss, injury or death
results from the intentional misconduct or sole negligence of Landlord, its
agents, servants or employees. Without limiting the generality of the
foregoing, Landlord shall not be liable for any injury or damage to persons or
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain, snow or leaks from any part of the Premises or from
the pipes, appliances, plumbing works, roof, street, or subsurface of any floor
or ceiling or from any other place or because of dampness or climatic
conditions from any other cause of whatsoever kind. Landlord shall not be
liable for any damage whatsoever caused by any other tenant or persons in or
about the Building Complex, or by an occupant of adjacent property thereto, or
the public, or construction of any private, public or quasi-public work. All
property of Tenant kept or stored on the Premises shall be kept or stored at
the risk of Tenant only and Tenant shall indemnify Landlord in the event of any
claims arising out of damages to the same, including any subrogation claim by
Tenant’s insurers;

 

(b)                                 any act or
omission (including theft, malfeasance or negligence) on the part of any agent,
contractor or person from time to time employed by Landlord to perform janitor
services or security services, or repairs or maintenance services, in or about
the Premises or the Building; or

 

(c)                                  loss or damage,
however caused, to money, securities, negotiable instruments, papers or other
valuables of Tenant.

 

23.2                           Delays.  Whenever and to the extent that Landlord
shall be unable to fulfill, or shall be delayed or restricted in the
fulfillment of, any obligation hereunder in respect to the supply of or
provision for, any service or utility or the doing of any work or the making of
any repairs by reason of being unable to obtain the material, goods, equipment,
service, utility or labor required to enable it to fulfill such obligation or
by reason of any statute, law or any regulation or order passed or made
pursuant thereto or by reason of the order or direction of any governmental or
quasi-governmental administrator, controller or board, or any governmental
department or officer or other authority, or by reason of not being able to
obtain any permission or authority required thereby, or by reason of any other
cause beyond its control, whether of the foregoing character or not, Landlord
shall be entitled to extend the time for fulfillment of such obligation by a
time equal to the duration of such delay or restriction, and Tenant shall not
be entitled to compensation for any inconvenience, nuisance or discomfort
thereby occasioned.

 

28

 

ARTICLE 24

 

DEFAULT AND REMEDIES

 

24.1                           Default by Tenant. The following events shall
be deemed to be events of default by Tenant under this Lease:

 

(a)                                  Tenant shall
fail to pay any installment of rent or any other sum due to Landlord within
five (5) days of receipt of written notice of such nonpayment.

 

(b)                                 Tenant shall
fail to comply with any term, provision or covenant of this Lease, other than
payment of rent or other sums due to Landlord, and shall not cure such failure
within fifteen (15) days after written notice thereof to Tenant or if such
default cannot reasonably be cured within fifteen (15) days then Tenant shall
not be in default so long as it has commenced to cure within fifteen (15) days
and is diligently prosecuting same to completion.

 

(c)                                  Tenant or any
guarantor of Tenant’s obligations under this Lease shall die, cease to exist as
a corporation or partnership or be otherwise dissolved or liquidated or become
insolvent, or shall make a transfer in fraud of creditors, or shall make an
assignment for the benefit of creditors, or is otherwise unable to pay its
debts as they come due.

 

(d)                                 Tenant or any
guarantor of Tenant’s obligations under this Lease shall file a petition under
any section or chapter of the national bankruptcy act as amended or under
any similar law or statute of the United States or any state thereof; or Tenant
or any guarantor of Tenant’s obligations under this Lease shall be adjudged
bankrupt or insolvent in proceedings filed against Tenant or any guarantor of
Tenant’s obligations under this Lease.

 

(e)                                  A receiver or
trustee shall be appointed for all of the Premises or for all or substantially
all of the assets of Tenant or any guarantor of Tenant’s obligations under this
Lease.

 

(f)                                    Tenant shall
abandon or vacate any portion of the Premises, in whole or in part.

 

(g)                                 Tenant assigns or
sublets in violation of the provisions of this Lease.

 

24.2                           Remedies of Landlord. Upon the occurrence of any
such events of default, Landlord shall have the option to pursue any one or
more of the following remedies without any notice or demand whatsoever except
as required by applicable law:

 

(a)                                  Terminate this
Lease, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any
other remedy which it may have for possession or arrearages in rent, enter upon
and take possession of the Premises and expel or remove Tenant and any other
person who may be occupying such Premises or any part thereof, by force if
necessary, without being liable for prosecution of any claim of damages
therefor.

 

29

 

(b)                                 Enter upon and
take possession of the Premises and expel or remove Tenant and any other person
who may be occupying such Premises or any part thereof, by force if necessary
pursuant to applicable law, without being liable for prosecution or any claim
for damages therefor (except for acts in violation of law), and relet the
Premises and receive the rent therefor.

 

(c)                                  Enter upon the
Premises, by force if necessary pursuant to applicable law, without being
liable for prosecution or any claim for damages therefor (except for acts in
violation of law), and do whatever Tenant is obligated to do under the terms of
this Lease; and Tenant agrees to reimburse Landlord on demand for any expenses which
Landlord may incur in thus effecting compliance with Tenant’s obligations under
this Lease, and Tenant further agrees that Landlord shall not be liable for any
damages resulting to Tenant from such action, whether caused by the negligence
of Landlord or otherwise.

 

(d)                                 Alter all locks
and other security devices at the Premises without terminating this Lease.

 

Exercise by Landlord of any one or more of the remedies
hereunder granted or otherwise available shall not be deemed to be an
acceptance of surrender of the Premises by Tenant, whether by agreement or by
operation of law, it being understood that such surrender can be effected only
by the written agreement of Landlord and Tenant. No such alteration of locks or
other security devices and no removal or other exercise of dominion by Landlord
over the property of Tenant or others at the Premises shall be deemed
unauthorized or constitute a conversion, Tenant hereby consenting, after any
event of default, to the aforesaid exercise of dominion over Tenant’s property
within the Premises. All claims for damages by reason of such reentry and/or
repossession and/or alteration of locks or other security devices are hereby
waived, as all claims for damages by reason of any distress warrant, forcible
detainer proceedings, sequestration proceedings or other legal process, to the
extent permitted by law. Tenant agrees that any reentry by Landlord may be
pursuant to judgment obtained in forcible detainer proceedings or other legal
proceedings or without the necessity for any legal proceedings, as Landlord may
elect, and Landlord shall not be liable in trespass or otherwise, to the extent
permitted by law.

 

In the event Landlord elects to terminate the Lease by reason of an
event of default then notwithstanding such termination, Tenant shall be liable
for and shall pay to Landlord, at the address specified for notice to Landlord
herein, the sum of all rental and other indebtedness accrued to date of such
termination, plus, as damages, an amount equal to the total rental hereunder
for the remaining portion of the Lease term (had such term not been terminated
by Landlord prior to the date of expiration as stated herein), less the
reasonable rental value thereof, plus a sum equal to any other damages incurred
by Landlord by reason of such default.

 

In
the event that Landlord elects to repossess the Premises without terminating
the Lease, then Tenant shall be liable for and shall pay to Landlord at the
address specified for notice to Landlord herein, all rental and other indebtedness
accrued to the date of such repossession, plus rent required to paid by Tenant
to Landlord during the remainder of the Lease Term until the

 

30

 

date
of expiration of the term as stated herein diminished by any net sums
thereafter received by Landlord through reletting the Premises during such
period (after deducting expenses incurred by Landlord as provided below). In no
event shall Tenant be entitled to any excess of any rental obtained by reletting
over and above the rental herein reserved. Actions to collect amounts due by
Tenant to Landlord under this subparagraph may be brought from time to time, on
one or more occasions, without the necessity of Landlord’s waiting until
expiration of the Lease term.

 

In
the event of any default or breach by Tenant, or threatened or anticipatory
breach or default, Tenant shall also be liable and shall pay to Landlord, in
addition to any sums provided to be paid above, broker’s fees incurred by
Landlord in connection with reletting the whole or any part of the Premises;
the costs of removing and storing Tenant’s or other occupants’ property; the
costs of repairing, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant or tenants; and all reasonable
expenses incurred by Landlord in enforcing or defending Landlord’s rights
and/or remedies, including reasonable attorney’s fees whether suit was actually
filed or not.

 

In
the event of termination or repossession of the Premises for an event of
default, Landlord shall not, except as set forth herein, have any obligation to
relet or attempt to relet the Premises or any portion thereof, or to collect
rental after reletting; and in the event of reletting, Landlord may relet the whole
or any portion of the Premises for any period to any tenant and for any use or
purpose. Landlord agrees to use reasonable efforts to mitigate its damages;
however, Landlord shall have no obligation to expend sums, give the Premises
priority over other vacant space nor to lease the space on less than market
terms.

 

If
Tenant shall fail to make any payment or cure any default hereunder within the
time herein permitted, Landlord, without being under any obligation to do so
and without thereby waiving such default, may make such payment and/or remedy
such other default for the account of Tenant (and enter the Premises for such
purpose), and thereupon Tenant shall be obligated to, and hereby agrees to pay
Landlord upon demand all costs, expenses and disbursements, including
reasonable attorney’s fees incurred by Landlord in taking such remedial action.

 

Landlord
is entitled to accept, receive in cash or deposit any payment made by Tenant
for any reason or purpose or in any amount whatsoever, and apply the same at
Landlord’s option to any obligation of Tenant and the same shall not constitute
payment of any amount owed except that to which Landlord has applied the same.
No endorsement or statement on any check or letter of Tenant shall be deemed an
accord and satisfaction or recognized for any purpose whatsoever. The
acceptance of any such check or payment shall be without prejudice to
Landlord’s rights to recover any and all amounts owed by Tenant hereunder and
shall not be deemed to cure any other default nor prejudice Landlord’s rights
to pursue any other available remedy.

 

24.3                           Landlord’s Default. Landlord shall not be
deemed in default hereunder unless Tenant shall have given Landlord written
notice of such default specifying such default with particularity and Landlord
shall thereupon have thirty (30) days in which to cure any default unless such
default cannot reasonably be cured within such period wherein Landlord shall
not be

 

31

 

in
default if it commences to cure the default within the thirty (30) day period
and diligently pursues completion of same. 
In the event of any default, Tenant agrees that its exclusive remedy
shall be an action for damages.

 

24.4                           Personal Property Lien.  Intentionally Deleted.

 

24.5                           No Consequential Damages.  In
any action by Landlord or Tenant against the other for damages arising from a
default under this Lease, such damages shall be limited to the actual
compensatory (as opposed to consequential) damages suffered or incurred by the
nondefaulting party, except in the case of a default arising from the gross
negligence of Landlord or Tenant.

 

ARTICLE 25

 

HOLDING OVER

 

25.1                           If Tenant shall
continue to occupy and continue to pay rent for the Premises after the
expiration of this Lease with or without the consent of Landlord, and without
any further written agreement, Tenant shall be a tenant at sufferance at a
monthly Base Rent equal to two hundred percent (200%) of the last full monthly
Base Rent payment due hereunder, and subject to all of the additional rentals,
terms and conditions herein set out except as to expiration of the Lease
Term.  The inclusion of the
preceding sentence shall not be construed as Landlord’s consent for Tenant to
hold over.  There shall be no renewal of
this Lease by operation of law.  Such holding
over may be terminated by Landlord or Tenant upon fifteen (15) days’ notice. In
the event that Tenant fails to surrender the Premises upon termination or
expiration of this Lease or such tenancy at sufferance then Tenant shall
indemnify Landlord against loss or liability resulting from any delay of Tenant
in not surrendering the Premises, including, but not limited to, any amounts
required to be paid to third parties who were to have occupied the Premises and
any attorney’s fees related thereto.

 

ARTICLE 26

 

NOTICE

 

26.1                           Notice.  Any notice, request, statement or other
writing pursuant to this Lease shall be deemed to have been given if sent by
registered, certified mail or recognized receipted overnight mail service,
postage prepaid, return receipt requested or delivered by hand to the party at
the addresses set forth below:

 

	
  TENANT:

  	
   

  	
  Gaiam,
  Inc.

  
	
   

  	
   

  	
  Suite
  300

  
	
   

  	
   

  	
  360
  Interlocken Boulevard

  
	
   

  	
   

  	
  Broomfield,
  Colorado 80021

  
	
   

  	
   

  	
  Attention:  President

  

 

32

 

	
  LANDLORD:

  	
   

  	
  Fund
  IX, Fund X, Fund XI and REIT Joint Venture

  
	
   

  	
   

  	
  c/o
  Wells Capital, Inc.

  
	
   

  	
   

  	
  6200
  The Corners Parkway

  
	
   

  	
   

  	
  Suite
  250

  
	
   

  	
   

  	
  Atlanta,
  Georgia  30092

  
	
   

  	
   

  	
  Attention:  Vice President of Asset Management

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Troutman
  Sanders LLP

  
	
   

  	
   

  	
  Bank
  of America Plaza

  
	
   

  	
   

  	
  Suite
  5200

  
	
   

  	
   

  	
  600
  Peachtree Street, N.E.

  
	
   

  	
   

  	
  Atlanta,
  GA  30308-2216

  
	
   

  	
   

  	
  Attention:  Leslie Fuller Secrest

  

 

and
such notice shall be deemed to have been received by Landlord or Tenant, as the
case may be, on the earlier of actual receipt or the second business day after
the date on which it shall have been so mailed.

 

26.2                           Change of Address. Any party may, by notice
to the other, from time to time, designate another address, which notices
mailed more than ten (10) days thereafter shall be addressed.

 

ARTICLE 27

 

SECURITY DEPOSIT

 

27.1                           Security Deposit: Landlord and Tenant
mutually acknowledge and agree that Landlord is holding the sum of Thirty-Five
Thousand Seven Hundred Sixty-Three and No/100 Dollars ($35,763.00), which sum
represents the amount previously deposited by Tenant with Landlord as a
security deposit under the First Restated Lease (the “Security Deposit”).  Landlord shall be entitled to intermingle
such deposit with its own funds and to use same for such purposes as Landlord
may determine. In the event of default by Tenant in performing any of its
obligations under this Lease, Landlord may, in addition to any other right or
remedy available to Landlord hereunder, use, apply, or retain all or any part
of said Security Deposit for the payment of any unpaid rent or for any other
amount which Landlord may be required to expend by reason of the default of
Tenant, including any damages or deficiency in the reletting of the Premises or
any attorney’s fees associated therewith, regardless of whether the accrual of
such damages or deficiency occurs before or after an eviction. If a portion of
the Security Deposit is used or applied by Landlord during the term hereof,
Tenant shall, upon five (5) days written demand, deposit with Landlord an
amount sufficient to restore the Security Deposit to its original amount (i.e.,
$35,763.00).  Landlord shall return the
Security Deposit (or that portion of the Security Deposit not previously
applied) within thirty (30) days after the later of expiration of the Lease
Term or surrender by Tenant of the Premises without default.

 

33

 

ARTICLE 28

 

MISCELLANEOUS PROVISIONS

 

28.1                           Captions. The captions
used herein are for convenience only and do not limit or amplify the provisions
hereof. Whenever the singular is used the same shall include the plural, and
words of any gender shall include the other gender.

 

28.2                           Waiver.  One or more waivers of any covenant, term or
condition of this Lease by either party should not be construed as a waiver of
a subsequent breach of the same covenant, term or condition. The consent or
approval by either party shall not be construed as a waiver of a subsequent
breach of the same covenant, term or condition. The consent or approval by
either party to or of any act by the other party requiring such consent or
approval should not be deemed to waive or render unnecessary consent to or
approval of any subsequent similar act.

 

28.3                           Entire Agreement. This Lease
contains the entire agreement between the parties and no agreement shall be
effective to change, modify or terminate this Lease in whole or in part unless
such agreement is in writing and duly signed by the parties hereto.

 

28.4                           Severability. The invalidity
or unenforceability of any provision hereof shall not affect or impair any
other provision.

 

28.5                           Modification. Should any
mortgagee or beneficiary under a deed of trust require a modification of this
Lease, which modification will not bring about any increased cost or expense to
Tenant or will in any way substantially change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified.

 

28.6                           Governing Law. This Lease
shall be governed by and construed pursuant to the laws of the State of
Colorado.

 

28.7                           Successors and Assigns. The covenants and
conditions herein contained shall inure to and bind the respective heirs,
permitted successors, executors, administrators and assigns of the parties
hereto, and the terms “Landlord” and “Tenant” shall include the permitted
successors and assigns of either such party, whether immediate or remote,
except as otherwise specifically set forth in this Lease to the contrary.

 

28.8                           Authorization to Execute. In the event Tenant
hereunder shall be a corporation, the parties executing this Lease on behalf of
Tenant hereby covenant and warrant that Tenant is a duly qualified corporation
and all steps have been taken prior to the date hereof to qualify Tenant to do
business in the State of Colorado; all franchise and corporate taxes have been
paid to date, and all future forms, reports, fees and other documents necessary
to comply with applicable laws will be filed.

 

28.9                           Approval of Documents. Landlord’s approval of
Tenant’s plans for work performed by Landlord or Tenant in the Premises shall
create no responsibility or liability on the

 

34

 

part
of Landlord for their completeness, design, sufficiency, or compliance with any
laws, rules, or regulations of governmental agencies or authorities.

 

28.10                     Attorneys  Fees.  In the event of any dispute hereunder the prevailing party in
such action shall be entitled to its reasonable attorneys and costs in such
action.

 

28.11                     Use of Names.  Landlord shall not publish, relating to this
Lease or in conjunction with the Building Complex the name “Gaiam, Inc.” or the
name of any employee, officer or director of “Gaiam, Inc.” in any newsletter or
similar publication, including press releases, without Tenant’s prior consent.
Tenant shall not publish Landlord’s name or the name of any partner or
affiliated entity or officer of such entity or use the name of the Building
Complex relating to this Lease or the Building Complex in any newsletter or
similar publication, including press releases, without Landlord’s prior
consent. In the event either party is in default hereof, such defaulting
party’s only remedy shall be an action for actual damages (not consequential)
arising from such default.  The
foregoing restrictions shall not apply to any disclosures of names by the other
party to such party’s investors or as may be required by law or any regulation
to which the disclosing party is subject or as otherwise may be required by law
or in any legal proceeding.

 

28.12                     Security Card System. 
Tenant shall continue to have the right to operate, at its  sole cost, expense and risk, Tenant’s own
security card system for the Premises. 
Tenant shall provide Landlord with a card key for emergency access to
the Premises.

 

ARTICLE 29

 

SUBSTITUTION OF PREMISES

 

29.1                           INTENTIONALLY DELETED.

 

ARTICLE 30

 

RECORDING

 

30.1                           Tenant agrees
not to place this Lease of record unless requested to execute a Memorandum of
Lease by Landlord, which may, at Landlord’s option, be placed of record. In
addition, if requested by Landlord, Tenant will execute a memorandum of lease
to be filed with the Colorado Department of Revenue on such form as may be
prescribed by said department within ten (10) days after the execution of this
Lease or any other such memorandum so that Landlord may avail itself of the
provisions of the statutes such as Section 39-22-604(7)(c) of the Colorado
Revised Statutes (1973).

 

Any
recording by Tenant without Landlord’s prior written consent shall at Landlord’s
option be deemed a default pursuant to Article 24 hereof and Landlord shall
have all of the rights and remedies set forth therein.

 

35

 

ARTICLE 31

 

REAL ESTATE BROKER

 

31.1                           Colliers
Bennett & Kahnweller, Inc., a real estate broker licensed in the State of
Colorado, has acted as agent for Landlord in this transaction and is to be paid
a commission by Landlord pursuant to a separate agreement.  Trammell Crow Services, Inc., a real estate
broker licensed in the State of Colorado, has acted as agent for Tenant in this
transaction and is to be paid a commission by Landlord pursuant to a separate
agreement.  Landlord represents that it
has dealt with no other broker other than the broker(s) identified herein.  Landlord agrees that, if any other broker
makes a claim for a commission based upon the actions of Landlord, Landlord
shall indemnify, defend and hold Tenant harmless from any such claim.  Tenant represents that it has dealt with no
broker other than the broker(s) identified herein.  Tenant agrees that, if any other broker makes a claim for a
commission based upon the actions of Tenant, Tenant shall indemnify, defend and
hold Landlord harmless from any such claim. 
Tenant will cause its broker to execute a customary lien waiver,
adequate under the law of the state where the Project is located, to extinguish
any lien claims such broker may have in connection with this Lease.

 

ARTICLE 32

 

OPTION

 

32.1                           Option to Extend.  Tenant shall have an option to extend and renew the Lease as to
all of the Premises (but not as to any portion or portions thereof) for one (1)
additional term of five (5) years.  In
order to exercise such option, Tenant shall notify Landlord in writing at least
two hundred seventy (270) days prior to the expiration of the Lease
Term (i.e., by September 4, 2007) of its election to exercise the
option.  If Tenant elects not to extend
or fails to timely exercise its option, time being of the essence, the option
shall automatically terminate and be of no further force and effect and this
Lease shall terminate upon the expiration of the initial Term.  Upon receipt of such notice from Tenant
exercising the renewal option herein granted, Landlord shall submit in writing
within thirty (30) days a proposal for the then current Market Base Rental Rate
(per rentable square foot per annum, “NNN”) for the renewal term.  Tenant shall have thirty (30) days from the
receipt of said notice from Landlord to notify Landlord in writing of (i)
Tenant’s acceptance of the proposed Market Base Rental Rate, or (ii) Tenant’s
rejection of the Market Base Rental Rate and election to initiate the appraisal
process set forth below.  If Tenant
fails to timely accept or reject the Market Base Rental Rate specified in
Landlord’s notice or to elect not to extend the term of the Lease as provided
in the immediately preceding sentence, Tenant shall be deemed to have elected
to extend the Lease Term for the period specified in Tenant’s original notice
of exercise of the renewal option at the Market Base Rental Rate specified by
Landlord in response to said exercise notice. 
Any such extension shall be upon all of the terms, conditions and
covenants of this Lease except as to (i) the amount of Base Rent, which
shall be determined as set forth herein, (ii) options to extend or to
expand, which shall not be applicable, and (iii)  Tenant shall pay
Tenant’s Prorata Share of Operating Expenses throughout the renewal term.  As used herein, and subject to the
limitations set forth in this paragraph, “Market Base Rental Rate” shall mean
as of any date the then annual net rental rate

 

36

 

(exclusive
of real estate taxes, utilities and operating expenses) per square foot of net
rentable area which a willing landlord under no compulsion would agree to
accept as of such date, and which a willing tenant under no compulsion would
agree to accept as of such date, under renewal leases (based on a five (5) year
term) of space in comparable first class multi-tenant office buildings of
comparable size, location and age in the County of Boulder, Colorado, at such
time, taking into account all relevant factors, including, without limitation,
use, location and/or floor level within the applicable building, definition of
rentable area, leasehold improvements provided, credits or allowances granted,
if any, quality, age and location of the applicable building, rental
concessions, the time the particular rate under consideration became effective,
size of tenant, credit of tenant, relative operating expenses, taxes and
utilities, relative services provided, and so forth.

 

If
Tenant, by written notice delivered no later than thirty (30) days after the
date Landlord notifies Tenant of the Market Base Rental Rate, objects to the
Market Base Rental Rate determined by Landlord and elects to submit the rate
determination to appraisal, then, within seven (7) days of the date of Tenant’s
objection, each party shall appoint a non-affiliated certified M.A.I. Appraiser
that has at least five (5) years’ full-time commercial appraisal experience in
Boulder County to determine the Market Base Rental Rate, such process to be
completed within twenty (20) days after the date of the appointment of the last
appraiser.  If a party does not appoint
a qualified appraiser within five (5) days after the other party has given
notice of the name of the appraiser, then the single appraiser shall be the
sole appraiser and shall set the Market Base Rental Rate. The appraisers
appointed by the parties shall meet promptly and attempt to set the Market Base
Rental Rate.  If they are unable to
agree on the Market Base Rental Rate within twenty (20) days after the date the
second appraiser has been appointed, they shall elect a third appraiser meeting
the qualifications stated in this paragraph within seven (7) days after the
last day the two (2) appraisers are to set the Market Base Rental Rate. If the
appraisers are unable to agree on the third appraiser, either of the parties to
this Lease, after giving five (5) days’ prior written notice to the other
party, may apply to the then president of the real estate board of Denver,
Colorado for the selection of a third appraiser who meets the qualifications
stated in this Section, which selection shall be made within three (3) days.
All determinations of Market Base Rental Rate shall be subject to the
limitations on Market Base Rental Rate set forth in the first paragraph of this
Section. Each of the parties shall pay for the appraiser appointed by it and shall
bear one-half of the cost of appointing the third appraiser and of paying the
third appraiser’s fee. The third appraiser, however selected, shall be a person
who has not previously acted in any capacity for either party. The appraisers
shall be instructed to consider the criteria above stated in determining the
Market Base Rental Rate.

 

Within
twenty (20) days after the selection of the third appraiser, the third
appraiser shall determine the Market Base Rental Rate and all three of the
appraiser’s Market Base Rental Rates shall be averaged excluding any single
Market Base Rental Rate which is either ten percent (10%) higher or lower than
the middle appraisal of Market Base Rental Rate and the remaining appraisals
shall then be averaged.

 

If
the Market Base Rental Rate is not established for the extended term prior to
its commencement, Tenant shall continue to pay the applicable Base Rent
required for the last full

 

37

 

month
of the Lease term until the appraisers have made their determination. The
Market Base Rental Rate in question, when finally determined by the appraisers,
shall be retroactive to the commencement of the extension term, and the first
Base Rent payment becoming due after the determination of the applicable Market
Base Rental Rate shall include the retroactive amounts of monthly Base Rent
installments accrued and unpaid. In no event may either Landlord or Tenant
elect not to extend the Lease based upon the Market Base Rental Rate
established in accordance herewith.

 

This
option to extend may not be exercised and the Lease shall not be extended if
Landlord has given Tenant notice of default which default is not cured within
any applicable cure periods or waived by Landlord.

 

32.2                           Right of First Offer to
Lease Additional Space in the Building.  Landlord hereby grants to Tenant the right
of first offer (the “ROFO”), exercisable at any time, to expand the Premises to
include any “Suite” (as hereinafter defined) on the first floor of the Building
which is not subject to a lease or to options of other tenant(s) and which is
not then subject to active negotiations for lease or option to other existing
or prospective tenant(s).  For purposes
hereof, a “Suite” shall mean (i) Suite 100, containing 2,910 square feet of
Rentable Area, (ii) Suite 101, contining 6,347 square feet of Rentable Area,
and/or Suite 150 containing 1,726 square feet of Rentable Area, all as depicted
on Exhibit D attached hereto
and made a part hereof.  Any such Suite
which is available for lease is herein referred to as “Option Space”.  The ROFO is subject to the following terms
and conditions:

 

(a)                                  Landlord shall give notice (the “ROFO
Notice”) to Tenant of Landlord’s desire to lease the Option Space and the terms
and conditions upon which Landlord intends to offer such space for rent.  If Tenant elects to lease the Option Space
which is the subject of Landlord’s ROFO Notice (or in response to Tenant’s
“Expansion Notice”) (as defined below), Tenant shall lease such space in “AS
IS” condition for a minimum of twenty-four (24) months and a term that is
coterminous with the expiration of the Lease Term, and otherwise on the same
terms and conditions set forth in this Second Restated Lease.

 

(b)                                 Tenant shall have ten (10) business days after
Landlord’s notice to respond as to whether Tenant desires to lease the Option
Space on the terms and conditions set forth in this Second Restated Lease.  If Tenant elects not to lease the Option
Space or fails to respond within said ten (10) business day period, then for a
period of twelve (12) months following the date of Landlord’s ROFO Notice to
Tenant as to the Option Space in question, Landlord shall be free to lease or
otherwise grant rights in the Option Space in question to any third party.  If at the expiration of said twelve-month
period, Landlord has not leased the subject Option Space or granted any options
to the Option Space to any third party and 
is not then actively engaged in lease negotiations with a third party
for the lease or option of all or any portion of the subject Option Space,
Tenant’s ROFO, as granted hereunder, shall again apply to the subject Option
Space which is not then leased or subject to an option to lease in favor of a
third party or which is not then subject to active negotiations between
Landlord and a third party.  Further, if
at any time

 

38

 

during
the Term of the Lease, Tenant shall notify Landlord in writing that it desires
to lease additional space in the Building (such notice from Tenant being herein
referred to as the “Expansion Notice”) and at the time of Landlord’s receipt of
the Expansion Notice, there is Option Space available, then Landlord agrees to
lease the Option Space to Tenant, subject to all of the terms and conditions of
this Section 32.2
to Tenant.  If Tenant elects to lease
such Option Space, Tenant shall execute an amendment to this Lease reflecting
the addition of all (and not less than all of) such space to the Premises for a
term coterminous with the term of the Lease no later than ten (10) days from
receipt of the ROFO Notice or Landlord’s response to an Expansion Notice and an
appropriate amendment to the Lease from Landlord.

 

32.3                           Generator.  Prior to the date hereof, and pursuant to
the terms of the First Restated Lease, Landlord purchased and caused to be
installed, at Landlord’s expense, an emergency back-up power generator (having
capacity of approximately 300 kW), which is located outside the Building and is
intended to serve the entire Building (the “Generator”).  In the event that at any time prior to
March 31, 2007, this Lease is terminated in whole or in part by reason of
a termination upon default or Tenant shall be in default in the payment of
Rent, Tenant shall pay to Landlord, as additional rent, the unamortized cost of
the Generator and related fuel tank, the cost of which shall be amortized on a
straight-line basis over sixty (60) months commencing on April 1, 2002 and
ending on March 31, 2007, less the residual value of the Generator and
related fuel tank, which Landlord and Tenant stipulate to be the sum of
$24,000.00.  The unamortized cost of the
Generator and related fuel tank shall equal the amount determined by
multiplying the actual cost and expense paid and incurred by Landlord in
purchasing the Generator and related fuel tank and causing the same to be
installed at the Building, not to exceed the sum of $245,000.00, multiplied by
a fraction, (a) the numerator of which shall equal the number of calendar days
elapsed from the date on which the Lease shall expire or be terminated in whole
or in part as set forth above or Tenant is in default in the payment of Rent,
and ending on March 31, 2007, and (b) the denominator of which equals the
number of calendar days elapsed between April 1, 2002 and March 31,
2007.

 

The Generator and related fuel tank shall at all times be and remain
Landlord’s property.  Landlord shall be
responsible for the maintenance, monitoring, repair, testing and operation of
the Generator, and for the purchase of fuel for the Generator.  All costs and expenses incurred by Landlord
in connection with the maintenance, monitoring, repair, testing and operation
of the Generator, together with all costs and expenses of fuel and utilities
associated with the Generator, shall be included in Operating Expenses.  Tenant agrees that the Generator shall be
used only in emergencies.  Landlord and
Tenant shall work cooperatively and in good faith to assure that the Generator
remains in good operating condition at all times.  Any actions that Landlord or Tenant may undertake or cause to be
undertaken in respect of the Generator and/or related fuel tank shall be taken
in strict accordance with all applicable federal, state and local laws, codes
and regulations, and in such a manner as not to abrogate, limit or nullify any
warranties or guaranties given or made by the equipment manufacturer or
installer.  If Tenant becomes aware of
any defective or apparently defective operation of the Generator, or of any
actual or impending shortage of fuel for the Generator, Tenant shall
immediately notify Landlord thereof in writing.

 

39

 

ARTICLE 33

 

RATIFICATION OF RESTATEMENT

 

33.1.                        Ratification
and Binding Effect. 
Tenant hereby (i) ratifies and affirms all of its obligations under
the Lease, as modified, amended and restated hereby; (ii) acknowledges,
represents and warrants that the Lease, as so modified, amended and restated is
valid and enforceable, and, as of this date, is free from any defenses, setoffs
claims, counterclaims, causes of action or any kind or nature whatsoever of
which Tenant has knowledge.  This Second
Restated Lease shall be governed by and construed in accordance with the laws
of the State of Colorado, and shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors, representatives and
permitted assigns.

 

33.2.                        Entire Agreement.  This Second Restated Lease
constitutes the entire understanding and agreement of the parties hereto with
respect to the matters discussed herein in relation to the Premises from and
after June 1, 2004 and supersedes all prior agreements, understandings or
negotiations with respect thereto.  For
all periods prior to June 1, 2004, the First Restated Lease, as modified
by the Second Amendment to the First Restated Lease, shall remain in full force
and effect according to its terms.

 

34.3.                        Miscellaneous.  This Second Restated Lease
may be executed in multiple counterparts, each of which shall be deemed an original.

 

[SIGNATURES BEGIN ON NEXT PAGE]

 

40

 

IN
WITNESS WHEREOF, the parties hereto have executed this Second Restated Lease
this       day of April, 2004.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  FUND IX, FUND X, FUND XI AND REIT

  
	
   

  	
  JOINT VENTURE, a Georgia joint venture

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wells
  Real Estate Fund IX, L.P., as

  
	
   

  	
   

  	
  Administrative
  Venturer

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Wells
  Partners, L.P., a Georgia

  
	
   

  	
   

  	
   

  	
  limited
  partnership, as General

  
	
   

  	
   

  	
   

  	
  Partner
  of Wells Real Estate Fund

  
	
   

  	
   

  	
   

  	
  IX,
  L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Wells
  Capital, Inc., as General

  
	
   

  	
   

  	
   

  	
  Partner
  of Wells Partners, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (CORPORATE SEAL)

  	
   

  
								

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

41

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GAIAM, INC., a Colorado corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (CORPORATE
  SEAL)

  	
   

  
							

 

42

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

Lot
2, Block 1,

Minor
Subdivision Interlocken Filing No. 3

City
of Broomfield,

County
of Boulder,

State
of Colorado

 

A-1

 

EXHIBIT B

 

FLOOR PLAN

 

B-1

 

EXHIBIT C

 

RULES AND REGULATIONS

 

1.                                       Tenant, by execution of this Lease and
occupancy of the Premises, agrees to comply with any covenants, conditions and
restrictions as recorded with the Clerk and Recorder of the County of Boulder,
State of Colorado (the “Covenants”), as heretofore and hereafter amended, as
applicable to Tenant’s use and enjoyment of the Premises and Building Complex.
In addition to all rights available to Landlord hereunder, in the event
Landlord is required to pay to any association referenced in such Covenants,
any fines, assessments, charges or other amounts on account of any act or
omission of Tenant, its agents, employees or invitees, Tenant shall, upon
demand, reimburse Landlord for such amounts, together with interest thereon at
the Default Rate.

 

2.                                       Tenant shall not obstruct or interfere with
the rights of other tenants of the Building Complex or of persons having
business in the Building Complex or in any way injure or annoy such tenants or
persons.

 

3.                                       Tenant shall not commit any willful act or
permit anything in or about the Building Complex which shall or might subject
Landlord to any liability or responsibility for injury to any person or
property by reason of any business or operation being carried on, in or about
the Building Complex or for any other reason, subject to and in accordance with
the terms of this Lease.

 

4.                                       Tenant shall not use the Building for lodging
or for any illegal purposes or for any purpose that will damage the Building
Complex, or the reputation of the Building as a Class A suburban office
building or for any purposes other than those specified in the Lease.

 

5.                                       Canvassing, soliciting, and peddling in the
Building Complex are prohibited, and Tenant shall cooperate to prevent such
activities.

 

6.                                       Tenant shall not bring or keep within the
Building any animal, bicycle, or motorcycle.

 

7.                                       Tenant shall not commercially prepare and/or
cook food or beverages in or about the Building without the prior written
consent of Landlord. Tenant shall not, except for de minimis amounts
(consistent with uses of a Class A suburban office building or a video
production facility and which do not require special governmental mandated
permits, storage or disposal) place, use or store any flammable, combustible,
explosive or hazardous fluid, chemical, device, substance or material in, on or
about the Premises. Tenant shall comply with the statutes, ordinances, rules,
orders, regulations and requirements imposed by governmental or
quasi-governmental authorities in connection with fire and panic safety and
fire prevention and shall not commit any act or permit any object to be brought
or kept in the Building Complex, which shall result in a change of rating of
any portion of the Building Complex by the Insurance Services Office or similar
person or entity subject to the terms of this Lease. Tenant shall not

 

C-1

 

commit
any act or permit any object to be brought or kept in the Building which shall
increase the rate of fire insurance on the Building or on property located
therein, subject to the terms of this Lease. 
In the event that Tenant’s use increases the rate of fire insurance,
then Tenant shall, if Landlord permits such use, pay to Landlord upon demand,
as Additional Rent, an amount equal to the increase in the rate.

 

8.                                       Tenant shall not occupy the Building or
permit any portion of the Building Complex to be occupied for the manufacture
or direct sale of liquor, narcotics, or tobacco in any form, or as a medical
office, barber shop, manicure shop, music or dance studio. Tenant shall not
conduct in or about the Building Complex any auction, public or private without
the prior written approval of Landlord.

 

9.                                       Tenant shall not install or use in the
Building Complex any (i) air conditioning unit, (ii) engine or boiler powered by
fuel including diesel fuel, gasoline, propane or natural gas; (iii) generator,
(iv) industrial ventilator or machinery, (v) heating unit (other than space
heaters), (vi) stove, (vii) commercial condensing unit, (viii) radiator or any
other similar apparatus without the express prior written consent of Landlord,
and then only as Landlord may reasonably direct.

 

10.                                 Any office equipment and other device of any
electrical or mechanical nature which causes in its operation vibrations, noise
or other annoyance to tenants in the Building shall be placed by Tenant in the
Premises in settings reasonably approved by Landlord, so as to absorb or
prevent any vibration, noise, or annoyance. Tenant shall not cause improper
noises, vibrations, or odors within the Building Complex.

 

11.                                 Tenant shall move all freight, supplies,
furniture, fixtures, and other personal property into, within and out of the
Building only through such entrances as may be reasonably designated by
Landlord, and such movement of such items shall be under the reasonable
supervision of Landlord. Landlord reserves the right to exclude from the
Building Complex all objects which violate any of these rules and regulations
or the provisions of the Lease. Tenant shall not move or install such objects in
or about the Building Complex in such a fashion as to unreasonably obstruct the
activities of the other tenants, and all such moving shall be at the sole
expense, risk, and responsibility of Tenant.

 

12.                                 Tenant shall not place within the Building
any objects which exceed the floor weight specifications of the Building
without the express prior written consent of Landlord. The placement and
positioning of all such objects within the Building shall be reasonably
prescribed by Landlord and such objects shall, in all cases, be placed upon
plates or footings of such size as shall be reasonably prescribed by Landlord.

 

13.                                 Tenant shall not deposit any trash, refuse,
cigarettes, or other substances of any kind within or out of the Building
except in refuse containers provided therefor. Tenant shall exercise its best
efforts to keep the sidewalks, entrances, passages, courts, lobby areas,
parking areas, vestibules, public corridors and halls in and about the Building
(hereinafter “Common Areas”) clean and free from rubbish; however Tenant is not
responsible for the trash or refuse of parties other than Tenant, its
employees, agents, contractors and invitees.

 

C-2

 

14.                                 Tenant shall use the Common Areas only as a
means of ingress and egress and other designed purposes, and Tenant shall
permit no loitering by any of Tenant’s employees upon Common Areas or elsewhere
within the Building Complex. The Common Areas and roof of the Building are not
for the use of the general public, and Landlord shall in all cases retain the
right to control or prevent access thereto by all persons whose presence in the
reasonable judgment of Landlord, shall be prejudicial to the safety, character,
reputation or interests of the Building Complex and its tenants. Tenant shall
not go upon the roof of the Building without the express prior written consent
of Landlord.

 

15.                                 Landlord reserves the right to exclude or
expel from the Building Complex any person who, in the reasonable judgment of
Landlord, is intoxicated or under the influence of liquor or drugs or who shall
in any manner act in violation of the rules and regulations of the Building
Complex.

 

16.                                 a.                                       Subject to the terms of paragraph b below.
Landlord shall have the right to reasonably designate the area or areas, if
any, in which Tenant and Tenant’s servants, employees, contractors, jobbers,
agents, licenses, invitees, guests and visitors may park vehicles, and Tenant
and its servants, employees, contractors, jobbers, agents, licensees, invitees,
guests and visitors shall observe and comply with all driving and parking signs
and markers within and about the Building Complex. All parking ramps and areas
and any pedestrian walkways, plazas or other public areas forming and part of
the Building or the land upon which the Building Complex is situated shall be
under the reasonable control of Landlord, who shall have the right to
reasonably regulate and control those areas. Landlord may promulgate rules and
regulations concerning parking from time to time, and Tenant agrees to comply
therewith. Tenant acknowledges that Landlord has reserved the right to remove
vehicles which violate parking regulations.

 

b.                                      Tenant shall have the right at any time, upon
written notice to Landlord, to have Landlord using building standard signage,
designate up to ten (10) parking spaces as being for the exclusive use of
Tenant. The cost of the signage shall be borne by Tenant and the location of
the parking so designated shall be shown on an exhibit to be attached hereto.
Tenant acknowledges that Landlord shall have no obligation to police such
designated parking; however, upon receipt of notice from Tenant specifying
vehicles that are violating its exclusive use, Landlord shall take such
reasonable actions as necessary, including towing, to protect Tenant’s
exclusive use of the parking spaces.

 

17.                                 No smoking is permitted at any time in, on or
about the Building and the Building Complex, including the lobby, the parking
lot and exterior Common Areas. Tenant shall comply herewith and cause its
employees, agents, contractors and invitees to comply herewith. Tenant may,
subject to compliance with applicable laws, permit smoking within the Premises,
provided in no event may any secondary smoke from the Premises be present in other
parts of the Building and Tenant shall be solely responsible at its own cost
and expense. Except as required by applicable law, Landlord will not modify
this rule or regulation in this Lease or any other Lease in the Building to
make it less restrictive.

 

C-3

 

18.                                 Tenant shall not use the washrooms, restrooms
and plumbing fixtures of the Building Complex, and appurtenances thereto, for
any other purpose than the purposes for which they were constructed, and Tenant
shall not deposit any sweepings, rubbish, rags or other improper substances
therein. Tenant shall not waste water by interfering or tampering with the
faucets or otherwise. If Tenant or Tenant’s servants, employees, contractors,
jobbers, agents, licensees, invitees, guests or visitors, cause any damage to
such washrooms, restrooms, plumbing fixtures or appurtenances, such damage
shall be repaired at Tenant’s reasonable expense within fifteen (15) days of
receipt of written notification from Landlord during which period Tenant may
repair same, and Landlord shall not be responsible therefor.

 

19.                                 Tenant may make alterations to the Premises
consistent with the terms of Article 15 of the Lease. Upon removal
of any wall decorations or installations or floor coverings by Tenant, any
damage to the walls or floors shall be repaired by Tenant at Tenant’s sole cost
and expense. Without limitation upon any of the provisions of the Lease, Tenant
shall refer all contractors, representatives, installation technicians, and
other mechanics, artisans and laborers rendering any service in connection with
the repair, or permanent improvements of the Premises to Landlord for
Landlord’s approval before performance of any such service. This Paragraph 19
shall apply to all work performed in the Building, including without limitation
installation of telephones, telegraph equipment, electrical devices and
attachments and installations of any nature affecting floors, walls, woodwork,
trim, windows, ceilings, equipment or any other portion of the Building
Complex. Plans and specifications for such work, prepared at Tenant’s sole
expense, shall be submitted to Landlord and shall be subject to Landlord’s
express prior written approval in each instance before the commencement of work.
All installations, alterations and additions shall be constructed by Tenant in
a good and workmanlike manner and only good grades of material shall be used in
connection therewith. The means by which telephone, telegraph and similar wires
are to be introduced to the Premises and the location of telephones, call boxes
and other office equipment affixed to the Premises shall be subject to the
express prior written approval of Landlord. Tenant shall not lay linoleum or
similar floor coverings so that the same shall come into direct contact with
the floor of the Premises and, if linoleum or other similar floor covering is
to be used, an interlining of builder’s deadening felt shall be first affixed
to the floor, by a paste or other material soluble in water. The use of cement
or other similar adhesive materials is expressly prohibited.

 

20.                                 No signs, awning, showcases, advertising
devices or other projections or obstructions shall be attached to the outside
walls of the Building Complex or attached or placed upon any Common Areas
without the express prior consent of Landlord. No blinds, drapes or other
window coverings shall be installed in the Building without the express prior
written consent of Landlord, except for “black out” drapes which have been approved
by Landlord. No promotional sign or picture, advertisement, window display or
other public display or notice in the nature of advertising or other
promotional display shall be inscribed, exhibited, painted or affixed by Tenant
upon or within any part of the Premises in such a fashion as to be seen from
the outside of the Premises or the Building without the express prior written
consent of Landlord. In the event of the violation of any of the foregoing by
Tenant, Landlord may within fifteen (15) days of written notice to Tenant
during which period Tenant may repair same, remove the articles constituting
the violation without any liability unless a loss other then said removal,
arises from

 

C-4

 

Landlord’s
willful or negligent acts or omissions, and Tenant shall reimburse Landlord for
the reasonable expenses incurred in such removal upon demand and upon
submission of applicable bills as additional rent under the Lease. Interior
signs on doors (exclusive of interiors of the Premises) and upon the Building
directory shall be subject to the express prior written approval of Landlord
and shall be inscribed, painted, or affixed by Landlord at the reasonable
expense of Tenant upon submission of applicable bills to Tenant.

 

21.                                 Tenant shall not use the name of the Building
or the name of Landlord in its business name, trademarks, signs,
advertisements, descriptive material, letterhead, insignia or any other similar
item without Landlord’s express prior written consent.

 

22.                                 The sashes, sash doors, skylights, windows,
and doors that reflect or admit light or air into the Common Areas shall not be
covered or obstructed by Tenant, through placement of objects upon windowsills
or otherwise. Tenant shall cooperate with Landlord in obtaining maximum
effectiveness of the cooling system of the Building. Tenant shall not obstruct,
alter or in any way impair the efficient operation of Landlord’s heating,
ventilating, air conditioning, electrical, fire, safety, or lighting systems.

 

23.                                 Subject to the Lease, applicable fire or
other safety regulations, all doors opening onto Common Areas and all doors
upon the perimeter of the Premises shall be kept closed and, during
non-business hours, locked, except when in use for ingress or egress. If Tenant
uses the Premises after regular business hours or on non-business days, Tenant
shall, subject to the Lease, lock any entrance doors to the Building or to the
Premises used by Tenant immediately after using such doors.

 

24.                                 Intentionally Deleted.

 

25.                                 All keys to the exterior doors of the
Premises shall be obtained by Tenant from Landlord, and Tenant shall pay to
Landlord a reasonable deposit determined by Landlord from time to time upon
written notice to Tenant for such keys. Tenant shall not make duplicate copies
of such keys. Subject to the Lease, Tenant shall have the right to install
substitute or additional locks or bolts upon any of the doors of the interior
doors of the Premises and Tenant shall notify Landlord prior to making any changes
in existing locks or the mechanisms thereof and shall give Landlord a key
therefor. Tenant shall, upon the termination of its tenancy, provide Landlord
with the combinations and keys, if any, to all combination locks on safes, safe
cabinets and vaults and deliver to Landlord all keys to the Building, the
Premises and all interior doors, cabinets, and other key-controlled mechanisms
therein, whether or not such keys were furnished to Tenant by Landlord, if any.
Tenant shall pay to Landlord the reasonable cost of replacing the same or of
changing the lock or locks opened by such lost key if Landlord shall reasonably
deem it necessary to make such a change.

 

26.                                 Landlord shall not be responsible for, and
Tenant hereby indemnifies and holds Landlord harmless from any liability in
connection with, the loss, theft, misappropriation or other disappearance of
furniture, furnishings, fixtures, machinery, equipment, money, jewelry or other
items of personal property from the Premises or other parts of the Building regardless
of whether

 

C-5

 

the
Premises or Building are locked at the time of such loss unless the loss arises
from Landlord’s willful or negligent acts or omissions.

 

27.                                 For purposes hereof, the terms “Landlord,”
“Tenant,” “Building,” and “Premises” are defined as those terms are defined in
the Lease to which these Rules and Regulations are attached. Wherever Tenant is
obligated under these Rules and Regulations to do or refrain from doing an act
or thing, such obligation shall include the exercise by Tenant of its
reasonable efforts to secure compliance with such obligation by the servants,
employees, contractors, jobbers, agents, invitees, licensees, guests and
visitors of Tenant. The term “Building” and “Building Complex” shall include
the Premises, and any obligations of Tenant hereunder with regard to the
Building and Building Complex shall apply with equal force to the Premises and
to other parts of the Building Complex.

 

28.                                 Landlord shall use reasonable efforts to
enforce rules and regulations against Tenant in a manner which is not
materially and/or adversely inconsistent with its application of the rules
against other tenants in the Building and to the extent that Landlord grants
less restrictive rules or regulations to any tenant, then Tenant shall get the
benefit therefrom. Tenant acknowledges that these rules and regulations have
been amended by Landlord and Tenant and thus some rules and regulations
applicable to other tenants in the Building may not be applicable to
Tenant.  In no event will Landlord
impose any less restrictive rules or regulations in leases with other tenants
in the Building as such rules or regulations pertain to smoking, noise,
vibrations and odors.  Furthermore,
notwithstanding any other provision to the contrary Landlord will not permit as
reserved parking for any other tenant more than fifteen percent (15%) of such
tenant’s allocated parking, nor shall Landlord permit any reserved parking for
such tenant(s) in the first parking row immediately in front of the Building.

 

C-6

 

EXHIBIT D

 

FLOOR PLAN OF FIRST FLOOR

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