Document:

ex10-3

 

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

     THIS AGREEMENT is
effective the 31st day of December, 2001 by and between
BioReliance Corporation, a Delaware corporation with principal offices located
at 14920 Broschart Road, Rockville, Maryland 20850, and all of its subsidiary
companies and its successors or assigns (the “Corporation”) and Allan J.
Darling, Ph.D. (the “Executive”).

A.     POSITION AND
EMPLOYMENT RELATIONSHIP:

	 	1.	 	The Executive is currently employed as the Vice President,
U.S. Biosafety Testing (“Vice President”). Commencing on the
effective date of this Agreement for a term of twelve (12) months,
the Corporation hereby agrees to continue to employ the Executive in
his current position or a comparable position consistent with his
qualifications and experience, and the business needs of the
Corporation, as determined by the Corporation’s President and Chief
Executive Officer (“CEO”), in consultation with the Corporation’s
Board of Directors (the “Board”).
	 
	 	2.	 	Such employment relationship is not at-will and is instead
governed by the terms and conditions set forth in this Agreement.
The Employment relationship, however, may be terminated by the
Corporation or the Executive prior to the expiration of this twelve
(12) month term pursuant to sections E, H and I respectively of this
Agreement.
	 
	 	3.	 	As Vice President, the Executive shall perform such duties as
may be assigned to the Executive from time to time by the CEO or the
Board, including, but not limited to the following: developing and
executing plans toward attainment of current and long-range
objectives, including achieving revenue, revenue growth and income
objectives, maximum return on invested capital, and quality, client
satisfaction and employee development goals; developing financial
plans and budgets; overseeing all reporting functions; coordinating
activities with other vice presidents and supporting departmental
directors; supporting Corporate activities including market
analyses, strategic planning, R&D planning and project selection,
engagement and assessments of potential partners, and the like;
supporting the evaluation and analysis of acquisition opportunities,
if any; developing and documenting novel or typical service
programs, procedures, methodologies and the like; meeting with
clients, understanding their product and production methods and
developing timely and cost-effective strategies acceptable to them
and to various national regulatory authorities; designing major
projects and, as appropriate, writing major project plans; closing
key proposals; directing

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	 	 	 	complex technical activities, in particular projects of significant scale
and scope; solving challenging technical, regulatory and service problems;
building client relationships; and anticipating follow-on client engagements.

	B.	 	LIMITATION ON OUTSIDE
ACTIVITIES: The Executive shall devote his full
employment energies, interest, abilities and time to the performance of
the obligations hereunder and shall not, without written consent of the
Corporation, through its President and CEO, render to others any service
of any kind for compensation, and in addition, shall not engage in any
activity which conflicts or interferes with the performance of the
Executive’s duties hereunder.
	 
	C.	 	COMPENSATION: For all services rendered by Executive pursuant to this
Agreement, Corporation will pay to Executive, and the Executive will
accept as full compensation hereunder, the following:

	 	1.	 	Base Salary: The Executive’s annual base salary (“salary”)
during calendar year 2001, as determined by the Compensation
Committee of the Board, shall be One Hundred and Eighty-Nine
Thousand Dollars ($189,000). The salary will be subject to all
appropriate federal, state and local withholding requirements and
will be payable in equal bi-weekly installments. The Executive’s
salary during a subsequent calendar year during the term of this
Agreement will be determined by the Compensation Committee of the
Board based upon the recommendation of the President and CEO.
	 
	 	2.	 	Performance Bonus: If the Executive remains in the employ of
the Corporation through December 31 of each year during the term of
this Agreement, the Executive shall be eligible for a performance
bonus (“bonus”) based on individual and corporate performance
factors relating to mutually acceptable objectives. Executive’s
bonus will be subject to all appropriate federal, state and local
withholding requirements. The exact amount of the bonus will be at
the discretion of the Compensation Committee of the Board. The
Corporation will be obligated to pay the Executive the bonus as
long as the Executive (a) does not resign from the Corporation
before December 31 of each year, or (b) is not terminated for Cause
(as hereinafter defined), or (c) does not fail to meet his
individual performance objectives. This bonus may also be paid out
on a quarterly basis at the discretion of the Compensation
Committee of the Board.
	 
	 	3.	 	Incentive Stock Options: As an inducement to remain in the employ of the
Corporation and as an incentive to build the Corporation’s value, the
Corporation may grant to the Executive additional Incentive Stock Options
or Nonqualified Stock Options. The number of option shares to be granted
and their timing and 

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	 	 	 	other terms will be determined by the Compensation
Committee of the Board and governed by the applicable incentive plan.

	D.	 	BENEFITS AND
PERQUISITES:

	 	1.	 	Medical and Other Insurance Coverage: The Corporation shall
provide such medical and other insurance coverage to the Executive
to the extent and on the terms that such benefits are made available
to other similarly situated employees. This provision does not
alter the Corporation’s right to modify or eliminate any employee
benefit plan from time to time and does not guarantee the
continuation of any kind or level of benefit or perquisite.
	 
	 	2.	 	Paid Personal Leave: The Executive shall receive vacation, sick and
personal holiday leave pursuant to the Corporation’s Paid Personal Leave Policy
(“PPL”) under the schedule for an Executive of the Company, which is attached
hereto as Exhibit 1 and incorporated herein by reference.
	 
	 	3.	 	Other Perquisites and Benefits: The Corporation will provide
the Executive with appropriate office space, as it deems necessary,
and will provide telephone, computer, email and internet access as required to
perform the Executive’s duties during the term of his employment.

	E.	 	TERMINATION AND RIGHTS
UPON TERMINATION: During the term of this
Agreement, Executive’s employment is not at-will and may be terminated by
the Corporation only on two bases: (1) Cause; or (2) Without Cause. As
used in this Agreement,“Cause” shall mean that the Executive:

	 	(1)	 	committed an act or acts of personal dishonesty
intended to result in the Executive’s personal enrichment at
the expense of the Corporation, and which constitute(s) fraud,
embezzlement, grand larceny or any felonious act;
	 
	 	(2)	 	failed or refused to perform the Executive’s
duties and obligations as an employee of the Corporation;
	 
	 	(3)	 	committed an act of willful misconduct;
	 
	 	(4)	 	was convicted of a criminal act;
	 
	 	(5)	 	has engaged in the unlawful use of narcotics;

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	 	(6)	 	engaged in abusive use of alcohol to a degree, or
in a manner, that would materially and adversely affect the
performance of the Executive’s assigned work or degrade the
reputation of the Corporation;
	 
	 	(7)	 	violated the terms of the Confidentiality, Trade
Secrets and Noncompetition Agreement he signed on March 1,
1999; or
	 
	 	(8)	 	violated or breached the terms of this Agreement.

		
	 	Any reason for termination other than those set forth above and in
section H below will be deemed to be Without Cause.

	F.	 	TERMINATION WITHOUT
CAUSE — EFFECT ON FUTURE COMPENSATION: In the event
Executive is terminated Without Cause, Executive will be entitled to
receive the following compensation and benefits:

	 	1.	 	Base Compensation: The Corporation shall pay the Executive
his then current salary for the remaining term of this agreement or
for a period of six (6) months, which ever period is greater. Such
compensation shall be paid in equal monthly payments and will be
subject to all appropriate federal, state and local withholding
requirements.
	 
	 	2.	 	Other Benefits: The Corporation shall continue to make available, for a
period equal to the remaining term of this agreement or for a period of
six (6) months, which ever period is greater, the same medical and other
insurance benefits made available to other similarly situated employees
and their dependents at a cost equal to the cost the Executive would have
paid if the Executive had continued to be employed by the Corporation,
provided the Executive elects to continue medical benefits coverage under COBRA.

	G.	 	TERMINATION WITH CAUSE
— EFFECT ON FUTURE COMPENSATION: In the event
Executive is terminated for Cause, Executive will be entitled to no future
compensation from the Corporation. In addition, all rights of the
Executive to future vesting of stock options terminate on the date of the
occurrence forming the basis for a “Cause” termination of the Executive
and, moreover, the Executive will not earn any additional compensation
after the effective date of such termination.
	 
	H.	 	DISABILITY: If the Executive is unable to perform the essential
functions of his position due to illness, injury, or incapacity for a
period of more than twelve weeks, the compensation otherwise payable to
him under this Agreement shall cease and the Corporation may terminate his
employment unless the Executive is able to perform the essential functions
of his position with reasonable accommodation.

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	I.	 	TERMINATION OF AGREEMENT
BY EXECUTIVE: Executive may terminate this
Agreement at any time, with or without Cause, upon thirty (30) days notice
to the President and CEO. In the event of termination by the Executive,
the Executive shall only be entitled to compensation through the last day
actually worked.
	 
	J.	 	CONFIDENTIALITY AND
NONCOMPETITION: By signing below, the Executive
acknowledges his ongoing and continuing obligation to abide by the
Confidentiality, Trade Secrets and Noncompetition Agreement that he
executed on March 1, 1999 (“Trade Secrets Agreements”), which is attached
hereto as Exhibit 2 and incorporated herein by reference.
	 
	K.	 	NO PRIOR AGREEMENTS: The Executive represents and warrants that he is
not a party or otherwise subject to or bound by the terms of any contract,
agreement or understanding which in any manner would limit or otherwise
affect his ability to perform his obligations hereunder. The Executive
further represents and warrants that his employment with the Corporation
will not require the disclosure or use of any confidential information
belonging to prior employers or to other persons or entities. The
Executive understands that the Corporation does not expect or desire and
in fact disapproves of and forbids the Executive to use or disclose, in
the performance of his duties for the Corporation, any such confidential
information belonging to prior employers or other persons or entities.
	 
	L.	 	ASSIGNMENT: This Agreement is personal to Executive and may not be
assigned in any way by Executive without prior written consent by the
Board of Directors of the Corporation. Any attempted assignment by
Executive will be void. Notwithstanding anything in this section to the
contrary, however, this Agreement may be assigned by the
Corporation to any parent, subsidiary, successor, or affiliate entity.
The rights and obligations under this Agreement will inure to the benefit
of and will be binding upon the heirs, legatees, administrators, and
personal representatives of Executive and upon the successors,
representatives, and assigns of the Corporation.
	 
	M.	 	ILLEGAL OR INVALID
PROVISION: The parties intend for all provisions of
this Agreement to be enforced and enforceable to the fullest extent
permitted by law. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws in effect
during the term hereof, however, that provision will be fully severable.
This Agreement will be construed and enforced as if such illegal, invalid,
or unenforceable provision had never comprised a part hereof, and the
remaining provisions will remain in full force and effect and will not be
affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision, there will be added automatically,

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	 	 	as a part of this Agreement, a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be legal,
valid, and enforceable.
	 
	N.	 	GOVERNING LAW: This Agreement shall be construed and governed by the
laws of the State of Maryland without regard to any conflict of laws rules
or provisions.
	 
	O.	 	ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement
between the Corporation and the Executive. This Agreement may not be
changed orally, but only by an agreement in writing signed by the parties.
This Agreement supersedes all prior agreements, discussions or statements
regarding the Executive’s employment, except for the Confidentiality,
Trade Secrets and Noncompetition Agreement attached hereto as Exhibit 2,
which will survive.
	 
	P.	 	ARBITRATION: Notwithstanding any other provision in this Agreement, any
claim or controversy relating to or arising out of this Agreement shall be
resolved exclusively by arbitration in accordance with the commercial
rules then obtaining of the American Arbitration Association. This
Arbitration provision, including any challenges to its enforceability, is
governed by the Federal Arbitration Act. The arbitration shall take place
in Montgomery County, Maryland. The Corporation and Executive shall bear
separately their respective attorney’s fees. The Corporation shall bear
the cost of the arbitration and any fees required by the commercial rules
then obtaining of the American Arbitration Association.
	 
	Q.	 	MUTUAL UNDERSTANDING: Each party has read this entire Agreement, fully
understands the contents hereof, has had the opportunity to obtain
independent advice as to its legal effect, and is under no duress or
obligation of any kind to execute it. This Agreement reflects the mutual
understanding of the parties with the respect to all subject matters
addressed herein and will be construed accordingly.

	 	 	 	 
	BioReliance Corporation	 	 
	 
	By: /s/ William J. Gedale
	 	
By: /s/  Allan J. Darling, Ph.D.

	
	 	

	 	
William J. Gedale

Chairman, Compensation Committee

Board of Directors	 	
Allan J. Darling, Ph.D.

	 	 	 
	Address: 14920 Broschart Road

Rockville, MD 20850	 	 
	 	 	 
	Date:	 	Date:
	
	 	

Page 6 of 6ex10-1

 

Exhibit 10.1

CONSENT AND FIRST AMENDMENT TO

CREDIT AGREEMENT

     This CONSENT AND FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is
dated as of May      , 2002, and is entered into by and among The Hillman Group,
Inc. (“Borrower”), Heller Financial, Inc., in its capacity as Agent for the
Lenders party to the Credit Agreement described below (“Agent”), and the
Lenders which are signatories hereto.

     WHEREAS, Agent, Lenders and Borrower are parties to a certain Credit
Agreement dated as of September 28, 2001 (as such agreement has from time to
time been amended, supplemented or otherwise modified, the “Credit Agreement”);
and

     WHEREAS, Borrower has requested that Agent and Lenders consent to (i) the
acquisition (the “Acquisition”) by Borrower of certain assets of RB
Distribution, Inc., a Pennsylvania corporation (“Seller”) related to Seller’s
accounts with Lowe’s Companies, Inc., pursuant to the terms of that certain
Asset Purchase Agreement dated of even date herewith among Borrower, Seller and
R&B, Inc., a Pennsylvania corporation (the “Purchase Agreement”), and (ii) the
consummation by Borrower of the first phase of its project to consolidate its
warehouse locations, as described in that certain Consolidation Plan Evaluation
attached as Exhibit A hereto, and the expenditure by Borrower of approximately
Nine Million Dollars ($9,000,000) in connection therewith (the “Distribution
Project”); and

     WHEREAS, to facilitate the payment of amounts due and owing by Borrower in
connection with the consummation of the Acquisition and the Distribution
Project, Borrower has further requested that Agent and Lenders agree to (a)
increase the Revolving Loan Commitment from $50,000,000 to $60,000,000, and (b)
increase the outstanding principal amount of Term Loan A from $18,500,000 to
$33,500,000; and

     WHEREAS Borrower has further requested that Agent and Lenders agree to
amend the Credit Agreement in certain respects.

     NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Credit Agreement and this Amendment, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     1.     Definitions. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such terms in the
Credit Agreement.

     2.     Consent. Subject to the conditions precedent set forth in Section 4 of
this Amendment, and in reliance on the representations and warranties set forth
in Section

 

 

5 of this Amendment, Agent and Lenders hereby consent to (i) the
consummation of the
Acquisition pursuant to the terms set forth in the Purchase Agreement
attached hereto as Exhibit B, and (ii) the consummation of the Distribution
Project, including without limitation all expenditures made by the Borrower in
connection therewith. Agent and Lenders further hereby acknowledge and agree
that notwithstanding anything set forth in Section 4.1 of the Credit Agreement
or Exhibit 4.8(C) to the Credit Agreement to the contrary, up to $9,000,000 of
expenditures made by the Borrower in connection with the Distribution Project
shall not be included in the calculation of Capital Expenditures or Unfinanced
Capital Expenditures. Except as expressly provided herein, the foregoing
consent shall not constitute (a) a modification or alteration of the terms,
conditions or covenants of the Credit Agreement or any document entered into in
connection therewith, or (b) a waiver, release or limitation upon the exercise
by Agent or Lenders of any of their rights, legal or equitable, hereunder or
under the Credit Agreement or any Loan Document.

     3.     Amendments. Subject to the conditions precedent set forth in Section 4
of this Amendment, and in reliance on the representations and warranties set
forth in Section 5 of this Amendment, Borrower, Agent and Lenders hereby agree
to amend the Credit Agreement as follows:

     (a)  To the extent necessary to make the representations and warranties
made under the Credit Agreement true, correct and complete after giving effect
to the consummation of the Acquisition, the disclosure schedules to the Credit
Agreement and the other Loan Documents identified on Exhibit C hereto are
hereby amended in the manner set forth therein.

     (b)  On the Closing Date, Lenders made Term Loan A to Borrower in the
aggregate principal amount of $20,000,000. As of the date of this Amendment,
but prior to the effectiveness of the terms hereof, the outstanding principal
balance of Term Loan A is $18,500,000. Borrower, Agent and each Lender agree
that, upon the effectiveness of this Amendment, Heller Financial, Inc., Antares
Capital Corporation, Madison Capital Funding LLC, PNC Bank, National
Association and Fifth Third Bank will advance an additional $15,000,000, in the
aggregate, to Borrower, such that the outstanding principal balance of Term
Loan A shall be $33,500,000. Term Loan A, as reconstituted hereby, shall be
repayable as set forth in subsection 1.1(A) of the Credit Agreement.

     (c)  The chart of Scheduled Installments with respect to Term Loan A set
forth in subsection 1.1(A) of the Credit Agreement is hereby amended and
restated in its entirety, as follows:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Term Loan A	 	 	 	 
	 	 	 	 	
	 	 	 	 
	 	 	 	 	Date	 	Scheduled Installment
	 	 	 	 	
	 	

	 	 	 	 	June 30, 2002	 	$	750,000	 
	 	 	 	 	September 30, 2002	 	$	1,102,941.18	 

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	 	 	 	 	Date	 	Scheduled Installment
	 	 	 	 	
	 	

	 	 	December 31, 2002
	 	$	1,415,441.18	 
	 	 	 	March 31, 2003
	 	$	2,015,441.18	 
	 	 	 	 	June 30, 2003
	 	$	2,015,441.18	 
	 	September 30, 2003
	 	$	2,015,441.18	 
	 	 	December 31, 2003
	 	$	2,015,441.18	 
	 	 	 	March 31, 2004
	 	$	2,015,441.18	 
	 	 	 	 	June 30, 2004
	 	$	2,015,441.18	 
	 	September 30, 2004
	 	$	2,015,441.18	 
	 	 	December 31, 2004
	 	$	2,015,441.18	 
	 	 	 	March 31, 2005
	 	$	2,015,441.18	 
	 	 	 	 	June 30, 2005
	 	$	2,015,441.18	 
	 	September 30, 2005
	 	$	2,015,441.18	 
	 	 	December 31, 2005
	 	$	2,015,441.18	 
	 	 	 	March 31, 2006
	 	$	2,015,441.18	 
	 	 	 	 	June 30, 2006
	 	$	2,015,441.18	 
	September 27, 2006, or if different, the then
	 	$	2,015,441.18	 
	outstanding balance of Term Loan A
	 	 	 	 

     (d)  The first sentence of subsection 1.1(B) of the Credit Agreement is
hereby amended by deleting the “$50,000,000” dollar amount set forth therein
and replacing it with “$60,000,000”.

     (e)  Subsection 4.3 of the Credit Agreement is hereby amended and restated
in its entirety, as follows:

     “4.3 Adjusted EBITDA.

     Borrower shall not permit Adjusted EBITDA for the twelve (12) month period
ending on the last day of any month set forth below to be less than the amount
set forth below for such month, plus for each Permitted Acquisition (exclusive
of the acquisition by Borrower of certain assets of RB Distribution, Inc., a
Pennsylvania corporation (“RB Distribution”) pursuant to the terms of that
certain Asset Purchase Agreement dated on or about April, 2002 among Borrower,
RB Distribution and R&B, Inc., a Pennsylvania corporation), 85% of the sum of
the Permitted Acquisition EBITDA and the Pro Forma Cost Reduction for the
target thereof, each calculated as of the closing date of such Permitted
Acquisition; provided that Permitted Acquisition EBITDA must be calculated by
Borrower and acceptable to Agent and Requisite Lenders prior to the closing of
the Permitted Acquisition.

	 	 	 	 	 
	Month Ending	 	Amount
	
	 	

	April 30, 2002
	 	$	38,631,171.50	 
	May 31, 2002
	 	$	38,631,171.50	 

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	Month Ending	 	Amount
	
	 	

	June 30, 2002
	 	$	39,631,171.50	 
	July 31, 2002
	 	$	40,131,171.50	 
	August 31, 2002
	 	$	40,131,171.50	 
	September 30, 2002
	 	$	42,631,171.50	 
	October 31, 2002
	 	$	43,131,171.50	 
	November 30, 2002
	 	$	43,631,171.50	 
	December 31, 2002
	 	$	44,131,171.50	 
	January 31, 2003
	 	$	44,131,171.50	 
	February 28, 2003
	 	$	44,131,171.50	 
	March 31, 2003
	 	$	44,131,171.50	 
	April 30, 2003
	 	$	44,131,171.50	 
	May 31, 2003
	 	$	44,131,171.50	 
	June 30, 2003
	 	$	44,131,171.50	 
	July 31, 2003
	 	$	44,131,171.50	 
	August 31, 2003
	 	$	44,131,171.50	 
	September 30, 2003
	 	$	46,131,171.50	 
	October 31, 2003
	 	$	46,131,171.50	 
	November 30, 2003
	 	$	46,131,171.50	 
	December 31, 2003
	 	$	47,131,171.50	 
	January 31, 2004
	 	$	47,131,171.50	 
	February 29, 2004
	 	$	47,131,171.50	 
	March 31, 2004
	 	$	48,131,171.50	 
	April 30, 2004
	 	$	48,131,171.50	 
	May 31, 2004
	 	$	48,131,171.50	 
	June 30, 2004
	 	$	48,131,171.50	 
	July 31, 2004
	 	$	48,131,171.50	 
	August 31, 2004
	 	$	48,131,171.50	 
	September 30, 2004
	 	$	49,131,171.50	 
	October 31, 2004
	 	$	49,131,171.50	 
	November 30, 2004
	 	$	49,131,171.50	 
	December 31, 2004
	 	$	50,131,171.50	 
	January 31, 2005
	 	$	50,131,171.50	 
	February 28, 2005
	 	$	50,131,171.50	 
	March 31, 2005
	 	$	50,131,171.50	 
	April 30, 2005
	 	$	50,131,171.50	 
	May 31, 2005
	 	$	50,131,171.50	 
	June 30, 2005
	 	$	51,131,171.50	 
	July 31, 2005
	 	$	51,131,171.50	 
	August 31, 2005
	 	$	51,131,171.50	 
	September 30, 2005 and thereafter
	 	$	52,131,171.50	 

-4-

 

     “Adjusted EBITDA” will be calculated as illustrated on Exhibit 4.8(C).
Notwithstanding the foregoing, at all times after the calculation of this
financial covenant as of June 30, 2002, this covenant will only be calculated
as of the last day of each calendar quarter, rather than as of
the last day of each month, until such time as Requisite Lenders provide the
Borrower with a written notice reinstituting monthly covenant testing.”

     (f)  Schedule 10.1(C) of the Credit Agreement is hereby amended and
restated in its entirety, as set forth on Exhibit D hereto. Upon the
effectiveness of this Amendment, Agent will reallocate the outstanding Loan
balances among the Lenders to give full effect to the revised Pro Rata Shares
and commitment amounts of Lenders set forth on Schedule 10.1(C) of the Credit
Agreement, as amended and restated pursuant to this Amendment.

     4.     Conditions. The effectiveness of this Amendment is subject to the
following conditions precedent (unless specifically waived in writing by
Agent):

     (a)  Borrower shall have executed and delivered this Amendment and such
other documents and instruments as Agent may require shall have been executed
and/or delivered to Agent;

     (b)  Borrower shall have delivered to each Lender with Term Loan A Exposure
an Amended and Restated Term Note A executed by Borrower in favor of such
Lender, in the amounts set forth on Schedule 10.1(C), as revised pursuant to
this Amendment and attached as Exhibit D hereto;

     (c)  Borrower shall have delivered to each Lender with Revolving Credit
Exposure an Amended and Restated Revolving Note executed by Borrower in favor
of such Lender, in the amounts set forth on Schedule 10.1(C), as revised
pursuant to this Amendment and attached as Exhibit D hereto;

     (d)  Agent shall have received (i) a fully-executed copy of the Purchase
Agreement (including all schedules and exhibits thereto) and each of the other
ancillary documents executed in connection therewith, and (ii) evidence that
the transactions contemplated thereby have been consummated, each in form and
substance satisfactory to Agent and Lenders, in their sole discretion, as
evidenced by Agent’s and Lenders’ execution of this Amendment;

     (e)  All proceedings taken in connection with the transactions contemplated
by this Amendment and all documents, instruments and other legal matters
incident thereto shall be satisfactory to Agent and its legal counsel;

     (f)  Agent shall have received the written consent of all Persons holding
Indebtedness evidenced by the Subordinated Loan Documents;

-5-

 

     (g)  Borrower shall have executed and delivered to Agent, or shall have
caused to be executed and delivered to Agent, each of the documents,
instruments and agreements listed on Exhibit E attached hereto, each in form
and substance satisfactory to
Agent, in Agent’s sole discretion, together with such other documents,
agreements and instruments as Agent may require or reasonably request;

     (h)  Agent shall have received a Consent and Reaffirmation of Guaranty
executed by each of First Tier Holdings and Second Tier Holdings in form and
substance satisfactory to Agent and Lenders, in their sole discretion;

     (i)  No Default or Event of Default shall have occurred and be continuing;
and

     (j)  Borrower shall have paid to Agent a fee in the amount of $129,062.50,
which fee shall be fully-earned and payable as of the date hereof, and shall be
allocated among the Lenders pursuant to each Lender’s Pro Rata Share prior to
giving effect to this Amendment.

     5.     Representations and Warranties. To induce Agent and Lenders to enter
into this Amendment, Borrower represents and warrants to Agent and Lenders:

     (a)  that the execution, delivery and performance of this Amendment has
been duly authorized by all requisite corporate action on the part of Borrower
and that this Amendment has been duly executed and delivered by Borrower;

     (b)  that each of the representations and warranties set forth in Section 5
of the Credit Agreement (other than those which, by their terms, specifically
are made as of a certain date prior to the date hereof) are true and correct in
all material respects as of the date hereof; and

     (c)  that the consummation of the Acquisition and the other transactions
contemplated thereby does not and will not violate or conflict with any laws,
rules, regulations or orders of any governmental authority or violate, conflict
with, result in a breach of, or constitute a default (with due notice or lapse
of time or both) under any Contractual Obligation (including without limitation
under the Debentures) or organizational documents of any Loan Party.

     6. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

-6-

 

     7.     References. Any reference to the Credit Agreement contained in any
document, instrument or agreement executed in connection with the Credit
Agreement shall be deemed to be a reference to the Credit Agreement as modified
by this Amendment.

     8.     Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
taken together shall be one and the same instrument.

     9.     Ratification. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions of the Credit
Agreement and shall not be deemed to be a consent to the modification or waiver
of any other term or condition of the Credit Agreement. Except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement are ratified and confirmed and shall continue in full force
and effect.

[Signature Pages Follow]

-7-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.

	 	 
	 	THE HILLMAN GROUP, INC
	 	 
	 	/s/ James P. Waters

By:     James P. Waters

Title:  Vice President-Finance

-8-

 

	 	 
	 
	 	HELLER FINANCIAL, INC., as
Agent, an 
Issuing Lender and a Lender
	 	 
	 	By:  /s/ Jacqueline Lynch
	 	

	 	Title:  Vice President
	 	

-9-

 

	 	 
	 
	 	ANTARES CAPITAL CORPORATION
	 	 
	 	By:  /s/ Illegible
	 	

	 	
Title:  Director
	 	

-10-

 

	 	 
	 
	 	MADISON CAPITAL FUNDING LLC
        
	 	 
	 	By:  K. Thomas
Klimeck
	 	

	 	
Title:  Managing Director
	 	

-11-

 

	 	 
	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION

        
	 	 
	 	By:  /s/ Michael J.
Reilly
	 	

	 	
Title:  Duly Authorized Signatory
	 	
 

-12-

 

	 	 
	 
	 	
PNC BANK, NATIONAL ASSOCIATION

        
	 	 
	 	By:  /s/ Joni Wagner
	 	
 
	 	
Title:  Assistant Vice President
	 	

-13-

 

	 	 
	 
	 	
FIFTH THIRD BANK
        
	 	 
	 	By:  /s/ K. E.
Goodpaster
	 	
 
	 	Title:  VP
	 	
 

-14-

 

	 	 
	 
	 	
        JOHN HANCOCK LIFE INSURANCE COMPANY
        
	 	 
	 	By:  /s/ Lorn C.
Davis
	 	
 
	 	
Title:  Director
	 	
 

-15-

 

	 	 
	 
	 	

        JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

        
	 	 
	 	By:  /s/ Lorn C.
Davis
	 	
 
	 	
Title:  Director
	 	
 

-16-

 

	 	 
	 
	 	

        INVESTORS PARTNER LIFE INSURANCE COMPANY
        
	 	 
	 	By:  /s/ Lorn C.
Davis
	 	
 
	 	
Title:  Authorized Signatory
	 	
 

-17-

 

	 	 
	 
	 	
        SALOMON BROTHERS HOLDING COMPANY, INC.
        
	 	 
	 	By:  /s/ Shawn
Bernet
	 	
 
	 	
Title:  Assistant Vice President
	 	
 

-18-

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