Document:

Ex-10.1

 

EXECUTION COPY

 

 

$56,500,000

CREDIT AGREEMENT

among

ENTERTAINMENT DISTRIBUTION COMPANY, LLC,

as Borrower,

and

THE DOMESTIC SUBSIDIARIES OF THE BORROWER

FROM TIME TO TIME PARTIES HERETO,

as Guarantors,

and

THE LENDERS PARTIES HERETO,

and

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

Dated as of May 31, 2005

WACHOVIA CAPITAL MARKETS, LLC

as Sole Lead Arranger and Sole Book Runner

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	Section 1.1 Defined Terms
	 	 	1	 
	Section 1.2 Other Definitional Provisions
	 	 	29	 
	Section 1.3 Accounting Terms
	 	 	30	 
	Section 1.4 Exchange Rates; Currency Equivalents
	 	 	30	 
	 
	 	 	 	 
	ARTICLE II THE LOANS; AMOUNT AND TERMS
	 	 	30	 
	Section 2.1 Revolving Loans
	 	 	30	 
	Section 2.2 Term Loan Facility
	 	 	32	 
	Section 2.3 Letter of Credit Subfacility
	 	 	34	 
	Section 2.4 Swingline Loan Subfacility
	 	 	37	 
	Section 2.5 Fees
	 	 	39	 
	Section 2.6 Commitment Reductions
	 	 	40	 
	Section 2.7 Prepayments
	 	 	40	 
	Section 2.8 Minimum Principal Amount of Tranches; Lending Offices
	 	 	43	 
	Section 2.9 Default Rate and Payment Dates
	 	 	43	 
	Section 2.10 Conversion Options
	 	 	44	 
	Section 2.11 Computation of Interest and Fees
	 	 	44	 
	Section 2.12 Pro Rata Treatment and Payments
	 	 	46	 
	Section 2.13 Non-Receipt of Funds by the Administrative Agent
	 	 	48	 
	Section 2.14 Inability to Determine Interest Rate
	 	 	49	 
	Section 2.15 Illegality
	 	 	49	 
	Section 2.16 Requirements of Law
	 	 	50	 
	Section 2.17 Indemnity
	 	 	51	 
	Section 2.18 Taxes
	 	 	51	 
	Section 2.19 Indemnification; Nature of Issuing Lender’s Duties
	 	 	54	 
	Section 2.20 Parallel Debt
	 	 	55	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	57	 
	Section 3.1 Financial Condition
	 	 	57	 
	Section 3.2 No Change
	 	 	57	 
	Section 3.3 Corporate Existence; Compliance with Law
	 	 	57	 
	Section 3.4 Corporate Power; Authorization; Enforceable Obligations
	 	 	58	 
	Section 3.5 No Legal Bar; No Default
	 	 	58	 
	Section 3.6 No Material Litigation
	 	 	58	 
	Section 3.7 Investment Company Act; PUHCA; Etc.
	 	 	59	 
	Section 3.8 Margin Regulations
	 	 	59	 
	Section 3.9 ERISA
	 	 	59	 
	Section 3.10 Environmental Matters
	 	 	60	 
	Section 3.11 Use of Proceeds
	 	 	61	 
	Section 3.12 Subsidiaries
	 	 	61	 
	Section 3.13 Ownership
	 	 	61	 
	Section 3.14 Indebtedness
	 	 	61	 

 

 

	 	 	 	 	 
	 	 	Page	 
	Section 3.15 Taxes
	 	 	61	 
	Section 3.16 Intellectual Property
	 	 	62	 
	Section 3.17 Solvency
	 	 	62	 
	Section 3.18 Investments
	 	 	62	 
	Section 3.19 Location of Collateral
	 	 	62	 
	Section 3.20 No Burdensome Restrictions
	 	 	63	 
	Section 3.21 Brokers’ Fees
	 	 	63	 
	Section 3.22 Labor Matters
	 	 	63	 
	Section 3.23 Security Documents
	 	 	63	 
	Section 3.24 Accuracy and Completeness of Information
	 	 	63	 
	Section 3.25 Consummation of Acquisition; Representations and Warranties from Other
Documents
	 	 	64	 
	Section 3.26 Material Contracts
	 	 	64	 
	Section 3.27 Insurance
	 	 	64	 
	Section 3.28 Other Agreements
	 	 	64	 
	Section 3.29 Capital Structure
	 	 	65	 
	Section 3.30 Anti-Terrorism Laws
	 	 	65	 
	Section 3.31 Compliance with OFAC Rules and Regulations
	 	 	65	 
	Section 3.32 Deposit Accounts
	 	 	65	 
	Section 3.33 Rebate Payments
	 	 	65	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS PRECEDENT
	 	 	66	 
	Section 4.1 Conditions to Closing Date and Initial Extensions of Credit
	 	 	66	 
	Section 4.2 Conditions to All Extensions of Credit
	 	 	73	 
	 
	 	 	 	 
	ARTICLE V AFFIRMATIVE COVENANTS
	 	 	74	 
	Section 5.1 Financial Statements
	 	 	74	 
	Section 5.2 Certificates; Other Information
	 	 	75	 
	Section 5.3 Payment of Obligations
	 	 	77	 
	Section 5.4 Conduct of Business and Maintenance of Existence
	 	 	77	 
	Section 5.5 Maintenance of Property; Insurance
	 	 	77	 
	Section 5.6 Inspection of Property; Books and Records; Discussions
	 	 	78	 
	Section 5.7 Notices
	 	 	78	 
	Section 5.8 Environmental Laws
	 	 	79	 
	Section 5.9 Financial Covenants
	 	 	80	 
	Section 5.10 Additional Subsidiary Guarantors
	 	 	81	 
	Section 5.11 Compliance with Law
	 	 	81	 
	Section 5.12 Pledged Assets
	 	 	81	 
	Section 5.13 Covenants Regarding Patents, Trademarks and Copyrights
	 	 	82	 
	Section 5.14 Further Assurances
	 	 	83	 
	Section 5.15 Foreign Collateral Documents
	 	 	84	 
	Section 5.16 Post Closing Environmental Samples
	 	 	84	 
	 
	 	 	 	 
	ARTICLE VI NEGATIVE COVENANTS
	 	 	84	 
	Section 6.1 Indebtedness
	 	 	84	 
	Section 6.2 Liens
	 	 	86	 
	Section 6.3 Nature of Business
	 	 	86	 

 

 

	 	 	 	 	 
	 	 	Page	 
	Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc.
	 	 	86	 
	Section 6.5 Advances, Investments and Loans
	 	 	87	 
	Section 6.6 Transactions with Affiliates
	 	 	87	 
	Section 6.7 Ownership of Subsidiaries; Restrictions
	 	 	88	 
	Section 6.8 Fiscal Year; Organizational Documents; Material Contracts; Subordinated
Indebtedness
	 	 	88	 
	Section 6.9 Limitation on Restricted Actions
	 	 	88	 
	Section 6.10 Restricted Payments
	 	 	89	 
	Section 6.11 Sale Leasebacks
	 	 	89	 
	Section 6.12 No Further Negative Pledges
	 	 	89	 
	Section 6.13 Operating Lease Obligations
	 	 	90	 
	Section 6.14 Restrictions on Parent
	 	 	90	 
	Section 6.15 Deposit Account Control Agreements; Additional Bank Accounts
	 	 	90	 
	Section 6.16 Release of Funds from Pension and Employee Loans Escrow Funds
	 	 	90	 
	Section 6.17 Sale of Universal Manufacturing & Logistics GmbH Prior to Merger
	 	 	91	 
	 
	 	 	 	 
	ARTICLE VII EVENTS OF DEFAULT
	 	 	91	 
	Section 7.1 Events of Default
	 	 	91	 
	Section 7.2 Acceleration; Remedies
	 	 	93	 
	 
	 	 	 	 
	ARTICLE VIII THE ADMINISTRATIVE AGENT
	 	 	94	 
	Section 8.1 Appointment
	 	 	94	 
	Section 8.2 Delegation of Duties
	 	 	94	 
	Section 8.3 Exculpatory Provisions
	 	 	95	 
	Section 8.4 Reliance by Administrative Agent
	 	 	95	 
	Section 8.5 Notice of Default
	 	 	96	 
	Section 8.6 Non-Reliance on Administrative Agent and Other Lenders
	 	 	96	 
	Section 8.7 Indemnification
	 	 	96	 
	Section 8.8 Administrative Agent in Its Individual Capacity
	 	 	97	 
	Section 8.9 Successor Administrative Agent
	 	 	97	 
	Section 8.10 Release of Collateral or Guarantors
	 	 	97	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	98	 
	Section 9.1 Amendments, Waivers and Release of Collateral
	 	 	98	 
	Section 9.2 Notices
	 	 	101	 
	Section 9.3 No Waiver; Cumulative Remedies
	 	 	103	 
	Section 9.4 Survival of Representations and Warranties
	 	 	103	 
	Section 9.5 Payment of Expenses and Taxes
	 	 	103	 
	Section 9.6 Successors and Assigns; Participations; Purchasing Lenders
	 	 	104	 
	Section 9.7 Adjustments; Set-off
	 	 	107	 
	Section 9.8 Table of Contents and Section Headings
	 	 	108	 
	Section 9.9 Counterparts
	 	 	109	 
	Section 9.10 Effectiveness; Integration; Continuing Agreement
	 	 	109	 
	Section 9.11 Severability
	 	 	110	 
	Section 9.12 Integration
	 	 	110	 
	Section 9.13 Governing Law
	 	 	110	 
	Section 9.14 Consent to Jurisdiction and Service of Process
	 	 	110	 

 

 

	 	 	 	 	 
	 	 	Page	 
	Section 9.15 Confidentiality
	 	 	111	 
	Section 9.16 Acknowledgments
	 	 	112	 
	Section 9.17 Waivers of Jury Trial
	 	 	112	 
	Section 9.18 Patriot Act Notice
	 	 	112	 
	Section 9.19 Power of Attorney
	 	 	113	 
	 
	 	 	 	 
	ARTICLE X GUARANTY
	 	 	113	 
	Section 10.1 The Guaranty
	 	 	113	 
	Section 10.2 Bankruptcy
	 	 	114	 
	Section 10.3 Nature of Liability
	 	 	114	 
	Section 10.4 Independent Obligation
	 	 	115	 
	Section 10.5 Authorization
	 	 	115	 
	Section 10.6 Reliance
	 	 	115	 
	Section 10.7 Waiver
	 	 	115	 
	Section 10.8 Limitation on Enforcement
	 	 	117	 
	Section 10.9 Confirmation of Payment
	 	 	117	 

 

 

	 	 	 
	Schedules	 	 
	Schedule 1.1-1
	 	Account Designation Letter
	Schedule 1.1-2
	 	Permitted Investments
	Schedule 1.1-3
	 	Permitted Liens
	Schedule 1.1-4
	 	Consolidated EBITDA
	Schedule 2.1(b)(i)
	 	Form of Notice of Borrowing
	Schedule 2.1(e)
	 	Form of Revolving Note
	Schedule 2.2(d)
	 	Form of Term Note
	Schedule 2.4(d)
	 	Form of Swingline Note
	Schedule 2.10
	 	Form of Notice of Conversion/Extension
	Schedule 2.18
	 	Tax Exemption Certificate
	Schedule 3.3
	 	Qualifications
	Schedule 3.12
	 	Subsidiaries
	Schedule 3.16
	 	Intellectual Property
	Schedule 3.19(a)
	 	Location of Real Property
	Schedule 3.19(b)
	 	Location of Collateral
	Schedule 3.19(c)
	 	Chief Executive Offices
	Schedule 3.21
	 	Broker’s Fees
	Schedule 3.22
	 	Labor Matters
	Schedule 3.26
	 	Material Contracts
	Schedule 3.27
	 	Insurance
	Schedule 3.29
	 	Capital Structure
	Schedule 4.1-1
	 	Form of Secretary’s Certificate
	Schedule 4.1-2
	 	Form of Solvency Certificate
	Schedule 5.2(b)
	 	Form of Compliance Certificate
	Schedule 5.10
	 	Form of Joinder Agreement
	Schedule 6.1(b)
	 	Indebtedness
	Schedule 6.15
	 	Bank Accounts
	Schedule 9.6(c)
	 	Form of Commitment Transfer Supplement

 

 

     CREDIT AGREEMENT, dated as of May 31, 2005, among ENTERTAINMENT DISTRIBUTION COMPANY, LLC, a
Delaware limited liability company (the “Borrower”), those Domestic Subsidiaries of the
Borrower as may from time to time become a party hereto, as Guarantors, the several banks and other
financial institutions as may from time to time become parties to this Agreement (collectively, the
“Lenders”; and individually, a “Lender”), WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association, as administrative agent for the Lenders hereunder (in such capacity,
the “Administrative Agent”) and, for purposes of Section 6.14 only, GLENAYRE ELECTRONICS,
INC., a Colorado corporation (the “Parent”).

W I T N E S S E T H:

     WHEREAS, the Borrower has requested that the Lenders make loans and other financial
accommodations to the Borrower in the amount of up to $56,500,000 as more particularly described
herein; and

     WHEREAS, the Lenders have agreed to make such loans and other financial accommodations to the
Borrower on the terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein,
the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Defined Terms.

     As used in this Agreement, terms defined in the preamble to this Agreement have the meanings
therein indicated, and the following terms have the following meanings:

     “ABR Default Rate” shall have the meaning set forth in Section 2.9(b).

     “Account Designation Letter” shall mean the Notice of Account Designation Letter dated
the Closing Date from the Borrower to the Administrative Agent substantially in the form attached
hereto as Schedule 1.1-1.

     “Acquired Business” shall mean (a) certain manufacturing and distribution businesses
of the Asset Sellers, as more particularly described as the “Purchased Assets” (as such term is
defined in the Asset Purchase Agreement) and (b) the capital stock of Universal Manufacturing and
Logistics GmbH, a German limited liability company, owned by the Share Seller as more particularly
described as the “Shares” (as such term is defined in the Share Purchase Agreement).

1

 

     “Acquisition” shall mean the acquisition of the Acquired Business by the Borrower
pursuant to the Acquisition Documents.

     “Acquisition Documents” shall mean (a) the Asset Purchase Agreement, (b) the Share
Purchase Agreement, (c) the Supply Agreements and (d) any other material agreement, document or
instrument executed pursuant to the Asset Purchase Agreement or the Share Purchase Agreement
(including, without limitation, any employment agreements and any material contracts), together
with any schedules and exhibits thereto, in each case as amended, restated, modified or
supplemented from time to time.

     “Additional Credit Party” shall mean each Person that becomes a Guarantor by execution
of a Joinder Agreement in accordance with Section 5.10.

     “Administrative Agent” shall have the meaning set forth in the first paragraph of this
Agreement and any successors in such capacity.

     “Affiliate” shall mean as to any Person, any other Person (excluding any Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, a Person shall be deemed to be “controlled by” a
Person if such Person possesses, directly or indirectly, power either (a) to vote 10% or more of
the securities having ordinary voting power for the election of directors of such Person or (b) to
direct or cause the direction of the management and policies of such Person whether by contract or
otherwise.

     “Aggregate Revolving Committed Amount” shall have the meaning set forth in Section
2.1(a).

     “Agreement” or “Credit Agreement” shall mean this Credit Agreement, as
amended, restated, modified or supplemented from time to time in accordance with its terms.

     “Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: “Prime Rate” shall mean, at any time, the
rate of interest per annum publicly announced from time to time by Wachovia at its principal office
in Charlotte, North Carolina as its prime commercial lending rate. Each change in the Prime Rate
shall be effective as of the opening of business on the day such change in the Prime Rate occurs.
The parties hereto acknowledge that the rate announced publicly by Wachovia as its Prime Rate is an
index or base rate and shall not necessarily be its lowest or best rate charged to its customers or
other banks; and “Federal Funds Effective Rate” shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding
Business Day, the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing selected by it. If
for any reason the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain

2

 

the Federal Funds Effective Rate, for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the
Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such change.

     “Alternate Base Rate Loans” shall mean Loans that bear interest at an interest rate
based on the Alternate Base Rate.

     “Applicable Percentage” shall mean, for any day, the rate per annum set forth below
opposite the applicable level then in effect, it being understood that the Applicable Percentage
for (i) Loans that are Alternate Base Rate Loans shall be the percentage set forth under the column
“Alternate Base Rate Margin”, (ii) Loans that are LIBOR Rate Loans shall be the percentage set
forth under the column “LIBOR Rate Margin and Letter of Credit Fee”, (iii) Cash Collateral Term
Loans that are Alternate Base Rate Loans shall be the percentage set forth under the column
“Alternate Base Rate Margin for Cash Collateral Term Loans”, (iv) Cash Collateral Term Loans that
are LIBOR Rate Loans shall be the percentage set forth under the column “LIBOR Rate Margin for Cash
Collateral Term Loans”, (v) the Letter of Credit Fee shall be the percentage set forth under the
column “LIBOR Rate Margin and Letter of Credit Fee”, provided, however, that the Applicable
Percentage for the Letter of Credit Fee for Letters of Credit which have been collateralized with
cash held in a demand deposit account or funds contained in a money market account (other than the
demand deposit account and money market account subject to the Cash Collateral Agreement) shall be
the percentage set forth under the column “LIBOR Rate Margin for Cash Collateral Term Loans and
Cash Collateral Letter of Credit Fee, and (vi) the Commitment Fee shall be the percentage set forth
under the column “Commitment Fee”:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Alternate Base Rate	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Margin for Cash	 	 	LIBOR Rate Margin	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	LIBOR Rate	 	 	Collateral Term	 	 	for Cash Collateral	 	 	 	 
	 	 	 	 	 	 	 	Alternate	 	 	Margin and	 	 	Loans and Cash	 	 	Term Loans and Cash	 	 	 	 
	 	 	 	 	Leverage	 	 	Base Rate	 	 	Letter of	 	 	Collateral Letter	 	 	Collateral Letter	 	 	Commitment	 
	 	Level	 	 	Ratio	 	 	Margin	 	 	Credit Fee	 	 	of Credit Fee	 	 	of Credit Fee	 	 	Fee	 
	 	I	 	 	3 2.50 to 1.0	 	 	2.00%	 	 	3.00%	 	 	0.25%	 	 	1.25%	 	 	0.50%	 
	 	II	 	 	3 2.00 to 1.0
 but 
 < 2.50 to 1.0	 	 	1.75%	 	 	2.50%	 	 	0.25%	 	 	1.25%	 	 	0.50%	 
	 	III	 	 	3 1.50 to 1.0
 but 
< 2.00 to 1.0	 	 	1.50%	 	 	2.00%	 	 	0.25%	 	 	1.25%	 	 	0.50%	 
	 	IV	 	 	3 1.00 to 1.0
but 
< 1.50 to 1.0	 	 	1.25%	 	 	1.50%	 	 	0.25%	 	 	1.00%	 	 	0.50%	 
	 	V	 	 	< 1.00 to 1.0	 	 	1.00%	 	 	1.00%	 	 	0.25%	 	 	1.00%	 	 	0.50%	 
	 

3

 

     The Applicable Percentage shall, in each case, be determined and adjusted quarterly on
the date three (3) Business Days after the date on which the Administrative Agent has received from
the Borrower the financial information and certifications required to be delivered to the
Administrative Agent and the Lenders in accordance with the provisions of Sections 5.1(a) and (b)
and Section 5.2(b) (each an “Interest Determination Date”), and shall be based upon the
Leverage Ratio set forth in the certificate delivered pursuant to Section 5.2(b). Such Applicable
Percentage shall be effective from such Interest Determination Date until the next such Interest
Determination Date. The initial Applicable Percentages shall be based on Level I until the first
Interest Determination Date occurring after the delivery of the officer’s compliance certificate
pursuant to Section 5.2(b) for the quarter ended September 30, 2005.

     After the Closing Date, if the Borrower shall fail to provide the quarterly financial
information and certifications in accordance with the provisions of Sections 5.1(a) and (b) and
Section 5.2(b) the Applicable Percentage shall, commencing on the date five (5) Business Days after
the date by which the Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be based on Level I until such time as
such information and certifications are provided, whereupon the Level shall be determined by the
then current Leverage Ratio set forth in the officer’s compliance certificate delivered pursuant to
Section 5.2(b).

     “Arranger” shall mean Wachovia Capital Markets LLC, together with its successors
and/or assigns.

     “Asset Disposition” shall mean the disposition of any or all of the assets (including,
without limitation, the Capital Stock of a Subsidiary or any ownership interest in a joint venture)
of any Credit Party or any Subsidiary whether by sale, lease, transfer or otherwise. The term
“Asset Disposition” shall not include (i) the sale, lease, transfer or other disposition of assets
permitted by Section 6.4(a)(i), (ii), (iii)(A), (iv), (v), (vi), (vii) hereof, (ii) any Equity
Issuance, (iii) any issuance by any Credit Party or its Subsidiaries of shares of its Capital Stock
or warrants, options or other similar rights which are exercisable for or convertible into shares
or interests of its Capital Stock and (iv) a Recovery Event.

     “Asset Purchase Agreement” shall mean that certain Asset Purchase Agreement, dated as
of May 9, 2005, by and among Entertainment Distribution Company (USA), LLC, as purchaser and UMG
Manufacturing & Logistics, Inc. and Universal Music & Video Distribution, Corp., as sellers
together with any schedules and exhibits thereto.

     “Asset Sellers” shall mean UMG Manufacturing & Logistics, Inc. and Universal Music &
Video Distribution, Corp.

     “Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United States
Code, as amended, modified, succeeded or replaced from time to time.

     “Borrower” shall have the meaning set forth in the first paragraph of this Agreement.

     “Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.

4

 

     “Business” shall have the meaning set forth in Section 3.10(b).

     “Business Day” shall mean a day other than a Saturday, Sunday or other day on which
commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by
law to close; provided, however, that when used in connection with a rate
determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “Business Day” shall
also exclude any day on which banks in London, England are not open for dealings in Dollar deposits
in the London interbank market.

     “Capital Lease” shall mean any lease of property, real or personal, the obligations
with respect to which are required to be capitalized on a balance sheet of the lessee in accordance
with GAAP.

     “Capital Lease Obligations” shall mean at any date of determination, the amount of the
liability in respect of a Capital Lease which would on such date be required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.

     “Capital Stock” shall mean (i) in the case of a corporation, capital stock, (ii) in
the case of an association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of capital stock, (iii) in the case of a
partnership, partnership interests (whether general or limited), (iv) in the case of a limited
liability company, membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.

     “Cash Collateral” shall mean the $16,500,000 (as such amount may be reduced from time
to time in accordance with this Agreement) deposited with the Administrative Agent by the Parent on
the Closing Date pursuant to the terms of the Cash Collateral Account Agreement (it being
understood that the Cash Collateral shall be invested by the Parent and that the Parent may receive
distributions of returns on the Cash Collateral as and when earned).

     “Cash Collateral Account Agreement” shall mean that certain Cash Collateral Account
Agreement dated as of the Closing Date by and between the Parent and the Administrative Agent, as
amended, modified, restated or supplemented from time to time in accordance with its terms.

     “Cash Collateral Term Loan” shall mean that portion of the Term Loan secured by the
Cash Collateral.

     “Cash Equivalents” shall mean (i) securities issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition (“Government
Obligations”), (ii) U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of deposit of (y) any
domestic commercial bank of recognized standing having capital and surplus in excess of

5

 

$250,000,000 or (z) any bank whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof (any such bank
being an “Approved Bank”), in each case with maturities of not more than one year from the
date of acquisition, (iii) bankers acceptances issued by an Approved Bank, (iv) commercial paper
and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or
any variable rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and
maturing within 270 days of the date of acquisition, (v) repurchase agreements with a bank or trust
company (including a Lender) or a 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 of
America, (vi) obligations of any state of the United States or any political subdivision thereof
for the payment of the principal and redemption price of and interest on which there shall have
been irrevocably deposited Government Obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment, (vii) auction preferred stock rated in the
highest short-term credit rating category by S&P or Moody’s, (viii) demand deposits with any
Approved Bank, and (ix) money market accounts.

     “Change of Control” shall mean at any time the occurrence of any of the following
events: (a) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the
Exchange Act), is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have “beneficial ownership” of all securities
that such person has the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 35% or more of the then outstanding Voting
Stock of the Borrower; (b) the replacement of a majority of the Board of Directors of the Borrower
over a two-year period from the directors who constituted the Board of Directors at the beginning
of such period, and such replacement shall not have been approved by a vote of at least a majority
of the Board of Directors of the Borrower then still in office who either were members of such
Board of Directors at the beginning of such period or whose election as a member of such Board of
Directors was previously so approved or (c) the failure of the Parent to own a majority or more of
the then outstanding Voting Stock of the Borrower.

     “Closing Date” shall mean the date of this Agreement.

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

     “Collateral” shall mean a collective reference to the collateral which is identified
in, and at any time will be covered by, the Security Documents and any other collateral that may
from time to time secure the Credit Party Obligations.

     “Commitment” shall mean the Revolving Commitment, the LOC Commitment, the Swingline
Commitment and the Term Loan Commitment, individually or collectively, as appropriate.

     “Commitment Fee” shall have the meaning set forth in Section 2.5(a).

6

 

     “Commitment Percentage” shall mean the Revolving Commitment Percentage, the LOC
Commitment Percentage and/or the Term Loan Commitment Percentage, as appropriate.

     “Commitment Period” shall mean the period from and including the Closing Date to but
not including the Revolving Commitment Termination Date.

     “Commitment Transfer Supplement” shall mean a Commitment Transfer Supplement,
substantially in the form of Schedule 9.6(c).

     “Commonly Controlled Entity” shall mean an entity, whether or not incorporated, which
is under common control with the Borrower within the meaning of Section 4001(a)(14) of ERISA or is
part of a group which includes the Borrower and which is treated as a single employer under Section
414 of the Code.

     “Consolidated” means, when used with reference to financial statements or financial
statement items of the Borrower and its Subsidiaries or any other Person, such statements or items
on a Consolidated basis in accordance with the consolidation principles of GAAP.

     “Consolidated Capital Expenditures” shall mean, for any period, all capital
expenditures of the Credit Parties and their Subsidiaries on a Consolidated basis for such period,
as determined in accordance with GAAP. The term “Consolidated Capital Expenditures” shall not
include capital expenditures in respect of the reinvestment of proceeds derived from Recovery
Events received by the Credit Parties and their Subsidiaries to the extent that such reinvestment
is permitted under the Credit Documents.

     “Consolidated EBITDA” shall mean, for any period, the sum of (a) Consolidated Net
Income for such period, plus (b) an amount which, in the determination of Consolidated Net
Income for such period, has been deducted for (i) Consolidated Interest Expense, (ii) total
federal, state, local and foreign income taxes and (iii) depreciation and amortization expense, all
as determined in accordance with GAAP (except for the exclusion of Rebate Payments).
Notwithstanding the foregoing, Consolidated EBITDA for the fiscal quarters ended June 30, 2004,
September 30, 2004, December 31, 2004 and March 31, 2005 shall be the respective amounts set forth
on Schedule 1.1-4 attached hereto.

     “Consolidated Interest Expense” shall mean, for any period, all cash interest expense
of the Credit Parties and their Subsidiaries (including, without limitation, the interest component
under Capital Leases and any synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product), less interest income earned on Pension and
Employee Loans Escrow Funds not to exceed the amount of interest expense paid on German pension
liabilities or German employee loan liabilities, as determined in accordance with GAAP. For the
avoidance of doubt, no portion of the Rebate Payments shall constitute interest expense. For
purposes hereof, Consolidated Interest Expense for the first three complete fiscal quarters to
occur after the Closing Date shall be determined by annualizing Consolidated Interest Expense such
that for the first complete fiscal quarter to occur after the Closing Date such components would be
multiplied by four (4), the first two complete fiscal quarters would be multiplied by two (2) and
the first three fiscal quarters would be multiplied by one and one-third 
(1 1/3).

7

 

     “Consolidated Net Income” shall mean, for any period, net income after taxes for such
period of the Credit Parties and their Subsidiaries on a Consolidated basis, as determined in
accordance with GAAP.

     “Consolidated Working Capital” shall mean, at any time, the excess of (i) current
assets (excluding cash and Cash Equivalents) of the Credit Parties and their Subsidiaries on a
Consolidated basis at such time less (ii) current liabilities (but excluding the current portion of
any long-term Indebtedness) of the Credit Parties and their Subsidiaries on a Consolidated basis at
such time, all as determined in accordance with GAAP.

     “Contractual Obligation” shall mean, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.

     “Copyright Licenses” shall mean any written agreement naming any Credit Party as
licensor and granting any right under any Copyright including, without limitation, any thereof
referred to in Schedule 3.16.

     “Copyrights” shall mean (a) all registered United States copyrights in all Works, now
existing or hereafter created or acquired, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, registrations, recordings and
applications in the United States Copyright Office including, without limitation, any thereof
referred to in Schedule 3.16, and (b) all renewals thereof including, without limitation,
any thereof referred to in Schedule 3.16.

     “Corresponding Debt” shall have the meaning set forth in Section 2.20.

     “Credit Documents” shall mean this Agreement, each of the Notes, any Joinder
Agreement, the LOC Documents, the Security Documents and each other agreement, certificate,
document or instrument delivered in connection with any Credit Document (other than any agreement,
certificate, document or instrument related to a Hedging Agreement), whether or not specifically
mentioned herein or therein.

     “Credit Party” shall mean any of the Borrower and the Guarantors.

     “Credit Party Obligations” shall mean, without duplication, (i) all of the
obligations, indebtedness and liabilities of the Credit Parties to the Lenders (including the
Issuing Lender) and the Administrative Agent, whenever arising, under this Credit Agreement, the
Notes or any of the other Credit Documents, including principal, interest, fees, reimbursements and
indemnification obligations and other amounts (including, but not limited to, any interest accruing
after the occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code with respect
to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) solely for purposes of the Security Documents and the Guaranty, all liabilities and
obligations, whenever arising, owing from any Credit Party or any of their Subsidiaries to any
Hedging Agreement Provider arising under any Secured Hedging Agreement permitted pursuant to
Section 6.1(e).

8

 

     “Debt Issuance” shall mean the issuance of any Indebtedness for borrowed money by any
Credit Party or any of its Subsidiaries (excluding, for purposes hereof, any Indebtedness of any
Credit Party and its Subsidiaries permitted to be incurred pursuant to Section 6.1).

     “Default” shall mean any of the events specified in Section 7.1, whether or not any
requirement for the giving of notice or the lapse of time, or both, or any other condition, has
been satisfied.

     “Defaulting Lender” shall mean, at any time, any Lender that, at such time (a) has
failed to make a Loan required pursuant to the term of this Credit Agreement, including the funding
of a Participation Interest in accordance with the terms hereof, (b) has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant to the terms of this
Credit Agreement, or (c) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official.

     “Deposit Account Control Agreement” shall mean an agreement among a Credit Party, a
depository institution, and the Administrative Agent, which agreement is in a form acceptable to
the Administrative Agent and which provides for the Administrative Agent’s having “control” (as
such term is used in Article 9 of the Uniform Commercial Code) over the deposit accounts described
therein, as the same may be amended, restated, supplemented, or otherwise modified from time to
time.

     “Dollar Amount” shall mean, at any time, (a) with respect to Dollars or an amount
denominated in Dollars, such amount and (b) with respect to Euros or an amount denominated in
Euros, the equivalent amount thereof in Dollars as determined by the Administrative Agent at such
time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date).

     “Dollars” and “$” shall mean dollars in lawful currency of the United States
of America.

     “Domestic Lending Office” shall mean, initially, the office of each Lender designated
as such Lender’s Domestic Lending Office shown on the administrative detail reply form delivered by
such Lender to the Administrative Agent; and thereafter, such other office of such Lender as such
Lender may from time to time specify to the Administrative Agent and the Borrower as the office of
such Lender at which Alternate Base Rate Loans of such Lender are to be made.

     “Domestic Subsidiary” shall mean any Subsidiary that is organized and existing under
the laws of the United States or any state or commonwealth thereof or under the laws of the
District of Columbia.

     “Dutch Holding Company” shall have the meaning set forth in Section 6.7.

     “EMU” shall mean Economic and Monetary Union as contemplated in the Treaty on European
Union.

9

 

     “EMU Legislation” shall mean legislative measures of the European Council (including
without limitation European Council regulations) for the introduction of, changeover to or
operation of a single or unified European currency (whether known as the Euro or otherwise), being
in part the implementation of the third stage of EMU.

     “Environmental Laws” shall mean any and all applicable foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or other
Requirement of Law regulating, relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time be in effect during the
term of this Agreement.

     “Equity Issuance” shall mean any issuance by any Credit Party or any Subsidiary to any
Person which is not a Credit Party of (a) shares or interests of its Capital Stock, (b) any shares
or interests of its Capital Stock pursuant to the exercise of options or warrants or other similar
rights, (c) any shares or interests of its Capital Stock pursuant to the conversion of any debt
securities to equity or (d) warrants or options or other similar rights which are exercisable for
or convertible into shares or interests of its Capital Stock. The term “Equity Issuance” shall not
include (i) any Asset Disposition, (ii) any Debt Issuance, or (iii) any equity issuance to officers
or employees of any Credit Party or any Parent Consigned Employee.

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

     “Euro” shall mean the single currency of Participating Member States of the European
Union.

     “Euro Equivalent” shall mean, with respect to any amount denominated in Dollars, the
equivalent amount thereof in Euros as determined by the Administrative Agent at such time on the
basis of the Spot Rate (determined in respect of the most recent Revaluation Date).

     “Eurodollar Reserve Percentage” shall mean for any day, the percentage (expressed as a
decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for
such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum
reserve requirement (including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from
time to time, or any similar category of liabilities for a member bank of the Federal Reserve
System in New York City.

     “Event of Default” shall mean any of the events specified in Section 7.1;
provided, however, with respect to any such event, that any requirement for the
giving of notice or the lapse of time, or both, or any other condition with respect thereto, has
been satisfied.

     “Excess Cash Flow” shall mean, with respect to any fiscal year of the Borrower, for
the Borrower and its Subsidiaries on a Consolidated basis, an amount equal to (a) Consolidated
EBITDA for such period minus (b) Consolidated Capital Expenditures for such period
minus (c) Scheduled Funded Debt Payments and mandatory repayments of Funded Debt made
during such

10

 

period minus (d) Consolidated Interest Expense (excluding any Consolidated Interest Expense
associated with intercompany indebtedness) for such period minus (e) amounts paid in cash
in respect of federal, state, local and foreign income taxes of the Borrower and its Subsidiaries
during such period minus (f) increases (or plus decreases) in Consolidated Working
Capital minus (g) optional and mandatory prepayments of Revolving Loans (to the extent
accompanied by a corresponding reduction of the Revolving Commitments) minus (g) optional
prepayments of the Term Loan made during such period.

     “Excluded Assets” shall mean, cash received by the Credit Parties from the Sellers to
underwrite pension plan and employee liabilities acquired from the Sellers.

     “Extension of Credit” shall mean, as to any Lender, the making, continuation or
conversion of a Loan by such Lender or the issuance of, or participation in, a Letter of Credit by
such Lender.

     “Federal Funds Effective Rate” shall have the meaning set forth in the definition of
“Alternate Base Rate”.

     “Fee Letter” shall mean that certain letter agreement dated May 9, 2005 addressed to
the Borrower from the Administrative Agent and the Arranger, as amended, restated, modified,
supplemented or otherwise replaced from time to time.

     “Fixed Charge Coverage Ratio” shall mean, with respect to the Credit Parties and their
Subsidiaries on a Consolidated basis for the twelve (12) month period ending on the last day of any
fiscal quarter of the Borrower, the ratio of (a) the sum of Consolidated EBITDA for such period
plus the amount of the cash on the balance sheet of Universal Manufacturing & Logistics
GmbH on the Closing Date remaining as of the date of determination plus the amount applied
to the amortization payment due June 30, 2007 in accordance with the provision of Section
2.7(b)(vi)(C)(I), to (b) the sum of Consolidated Interest Expense for such period plus
Scheduled Funded Debt Payments for such period plus cash taxes paid during such period
plus Consolidated Capital Expenditures for such period.

     “Flood Hazard Property” shall have the meaning set forth in Section 4.1(f)(iv).

     “Foreign Collateral Documents” shall mean any documents entered into by any Credit
Party to grant to the Administrative Agent a security interest in, or to otherwise perfect the
security interest of the Administrative Agent in, the assets of a Credit Party (including the
Capital Stock issued or held by such Credit Party) which Credit Party or assets are located in or
otherwise subject to the laws of a jurisdiction other than the United States of America or any
State thereof, as the same may from time to time be amended, supplemented or otherwise modified in
accordance with the terms hereof and thereof, including, without limitation, pledge agreements,
parallel debt agreements and powers of attorney.

     “Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

11

 

     “Funded Debt” shall mean, with respect to any Person, without duplication, (a) all
Indebtedness of such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or other title retention agreements
relating to property purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase price of property or services
purchased by such Person (other than trade debt and accrued expenses incurred in the ordinary
course of business and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person and including, in any event, earnout obligations, (e)
the principal portion of all obligations of such Person under Capital Leases, (f) all net
obligations of such Person under Hedging Agreements (such net obligations to be equal at any time
to the termination value of such Hedging Agreements that would be payable by or to such Person at
such time), excluding any portion thereof which would be accounted for as interest expense under
GAAP, (g) the maximum available stated amount of all letters of credit issued or bankers’
acceptances facilities created for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (h) all preferred Capital Stock issued by such
Person that by the terms thereof could be (at the request of the holders thereof or otherwise)
subject to mandatory sinking fund payments, redemption or other acceleration prior to the date that
is 6 months after the Term Loan Maturity Date, (i) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product, (j) all Indebtedness of others of the type referred to in clauses (a) — (i)
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, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations secured thereby have been
assumed, with the amount of such Indebtedness limited to the value of the property secured in cases
where the obligations secured thereby have not been assumed by such Person, (k) all Guaranty
Obligations of such Person with respect to Indebtedness of the type referred to in clauses (a) -
(j) above of another Person and (l) Indebtedness of the type referred to in clauses (a) — (k) above
of any partnership or unincorporated joint venture in which such Person is legally obligated or has
a reasonable expectation of being liable with respect thereto, except to the extent such
Indebtedness is expressly non-recourse to such Person. Notwithstanding the foregoing, (i) the
Rebate Payments, including any portion thereof characterized as interest, shall be included in the
calculation of Funded Debt and (ii) to the extent that funds have been set aside in a Pension and
Employee Loans Escrow Fund or they are otherwise cash collateralized, employee loan obligations and
pension obligations shall not be included in the calculation of Funded Debt.

     “GAAP” shall mean generally accepted accounting principles in effect in the United
States of America applied on a consistent basis, subject, however, in the case of
determination of compliance with the financial covenants set forth in Section 5.9, to the
provisions of Section 1.3.

     “Government Acts” shall have the meaning set forth in Section 2.19(a).

     “Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

12

 

     “Guarantor” shall mean the Domestic Subsidiaries of the Borrower identified as
Guarantors on the signature pages hereto and the Additional Credit Parties which execute a Joinder
Agreement, together with their successors and permitted assigns, in each case to the extent such
Person has not been released from its Guaranty Obligations under the Guaranty (whether by sale or
otherwise) in accordance with the terms of this Credit Agreement.

     “Guaranty” shall mean the guaranty of the Guarantors set forth in Article X.

     “Guaranty Obligations” shall mean, with respect to any Person, without duplication,
any obligations of such Person (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any
Indebtedness of any other Person in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any
property constituting security therefor, (ii) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working capital, solvency or other
balance sheet condition of such other Person (including without limitation keep well agreements,
maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of
any holder of Indebtedness of such other Person, (iii) to lease or purchase Property, securities or
services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof.
The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth
therein, including limited recourse provisions) be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or potion thereof, in respect of which such
Guaranty Obligation is incurred or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.

     “Hedging Agreement Provider” shall mean any Person that enters into a Hedging
Agreement with a Credit Party or any of its Subsidiaries that is permitted by Section 6.1(e) to the
extent such Person is a Lender, an Affiliate of a Lender or any other Person that was a Lender (or
an Affiliate of a Lender) at the time it entered into the Hedging Agreement but has ceased to be a
Lender (or whose Affiliate has ceased to be a Lender) under the Credit Agreement.

     “Hedging Agreements” shall mean, with respect to any Person, any agreement entered
into to protect such Person against fluctuations in interest rates, or currency or raw materials
values, including, without limitation, any interest rate swap, cap or collar agreement or similar
arrangement between such Person and one or more counterparties, any foreign currency exchange
agreement, currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.

     “Indebtedness” shall mean, with respect to any Person, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or other title retention agreements
relating to property purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of business), (d) all

13

 

obligations of such Person issued or assumed as the deferred purchase price of property or services
purchased by such Person (other than trade debt and accrued expenses arising in the ordinary course
of business and due within six months of the incurrence thereof) which would appear as liabilities
on a balance sheet of such Person, (e) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements, (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed, (g) all Guaranty
Obligations of such Person with respect to Indebtedness of another Person, (h) the principal
portion of all obligations of such Person under Capital Leases, (i) all net obligations of such
Person under Hedging Agreements (such net obligations to be equal at any time to the termination
value of such Hedging Agreements that would be payable by or to such Person at such time),
excluding any portion thereof which would be accounted for as interest expense under GAAP, (j) the
maximum available stated amount of all letters of credit issued or bankers’ acceptances facilities
created for the account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (k) all preferred Capital Stock issued by such Person and which by the
terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory
sinking fund payments, redemption or other acceleration prior to the date which is six months after
the Maturity Date, (l) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any
accrued interest thereon, and (m) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is legally obligated or has a reasonable expectation of being liable
with respect thereto, except to the extent such Indebtedness is expressly non-recourse to such
Person.

     “Insolvency” shall mean, with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA.

     “Intellectual Property” shall mean, collectively, all Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses.

     “Interest Determination Date” shall have the meaning assigned thereto in the
definition of “Applicable Percentage”.

     “Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan, Swingline
Loan or fee payable pursuant to Section 2.5(a) or (b), the last Business Day of each March, June,
September and December during the term of this Agreement and on the applicable Maturity Date, (b)
as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any LIBOR Rate Loan having an Interest Period longer than three months,
each day which is three months after the first day of such Interest Period and the last day of such
Interest Period and (d) as to any Loan which is the subject of a mandatory prepayment required
pursuant to Section 2.7(b) hereof, the date of such prepayment.

     “Interest Period” shall mean, with respect to any LIBOR Rate Loan,

   (i) initially, the period commencing on the Borrowing Date or conversion date, as the
case may be, with respect to such LIBOR Rate Loan and ending one, two,

14

 

three or six months thereafter, as selected by the Borrower in the notice of borrowing or
notice of conversion given with respect thereto; and

   (ii) thereafter, each period commencing on the last day of the immediately preceding
Interest Period applicable to such LIBOR Rate Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent
not less than three Business Days prior to the last day of the then current Interest Period
with respect thereto;

      provided that the foregoing provisions are subject to the following:

      (A) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end
on a day that is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;

      (B) any Interest Period pertaining to a LIBOR Rate Loan 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 relevant calendar month;

      (C) if the Borrower shall fail to give notice as provided above, the Borrower
shall be deemed to have selected an Alternate Base Rate Loan to replace the affected
LIBOR Rate Loan;

      (D) any Interest Period in respect of any Loan that would otherwise extend
beyond the applicable Maturity Date for such Loan shall end on such Maturity Date;

      (E) with regard to the Term Loans, no Interest Period shall extend beyond any
principal amortization payment date unless the portion of the Term Loan consisting
of Alternate Base Rate Loans together with the portion of the Term Loan consisting
of LIBOR Rate Loans with Interest Periods expiring prior to or concurrently with the
date such principal amortization payment date is due, is at least equal to the
amount of such principal amortization payment due on such date; and

      (F) no more than five (5) LIBOR Rate Loans may be in effect at any time;
provided that, for purposes hereof, LIBOR Rate Loans with different Interest
Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin
on the same date and have the same duration, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new LIBOR Rate Loan with a single Interest
Period.

15

 

     “Investment” shall mean (a) the acquisition (whether for cash, property, services,
assumption of Indebtedness, securities or otherwise) of assets, shares of Capital Stock, bonds,
notes, debentures, partnership, joint ventures or other ownership interests or other securities of
any Person or (b) any deposit with, or advance, loan or other extension of credit to, such Person
(other than deposits made in connection with the purchase of equipment or other assets in the
ordinary course of business or in connection with contracts for goods and services in the ordinary
course of its business) or (c) any other capital contribution to or investment in such Person,
including, without limitation, any Guaranty Obligation (including any support for a letter of
credit issued on behalf of such Person) incurred for the benefit of such Person.

     “Issuing Lender” shall mean Wachovia.

     “Issuing Lender Fees” shall have the meaning set forth in Section 2.5(c).

     “Joinder Agreement” shall mean a Joinder Agreement substantially in the form of
Schedule 5.10, executed and delivered by an Additional Credit Party in accordance with the
provisions of Section 5.10.

     “Lender” shall have the meaning set forth in the first paragraph of this Agreement.

     “Lender Commitment Letter” shall mean, with respect to any Lender, the letter (or
other correspondence) to such Lender from the Administrative Agent notifying such Lender of its LOC
Commitment, Revolving Commitment Percentage and/or Term Loan Commitment Percentage.

     “Letter of Credit Fee” shall have the meaning set forth in Section 2.5(b).

     “Letters of Credit” shall mean any letter of credit issued by the Issuing Lender
pursuant to the terms hereof, as such letters of credit may be amended, restated, modified,
extended, renewed or replaced from time to time.

     “Leverage Ratio” shall mean, with respect to the Credit Parties and their Subsidiaries
on a Consolidated basis for the twelve month period ending on the last day of any fiscal quarter of
the Borrower, the ratio of (a) Funded Debt of the Credit Parties and their Subsidiaries on a
Consolidated basis on the last day of such period to (b) Consolidated EBITDA for such period.

     “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such rate is not
available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately
11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more than one rate
is specified on Reuters

16

 

Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%). If, for any reason, neither of such rates is
available, then “LIBOR” shall mean the rate per annum at which, as determined by the Administrative
Agent, Dollars in an amount comparable to the Loans then requested are being offered to leading
banks at approximately 11:00 A.M. London time, two (2) Business Days prior to the commencement of
the applicable Interest Period for settlement in immediately available funds by leading banks in
the London interbank market for a period equal to the Interest Period selected.

     “LIBOR Lending Office” shall mean, initially, the office of each Lender designated as
such Lender’s LIBOR Lending Office shown on the administrative detail reply form delivered by such
Lender to the Administrative Agent; and thereafter, such other office of such Lender as such Lender
may from time to time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

     “LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary, to the next
higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

	 	 	 
	LIBOR Rate =

	 	LIBOR
	

	 	 
	

	 	1.00 - Eurodollar Reserve Percentage

     “LIBOR Rate Loan” shall mean Loans the rate of interest applicable to which is based
on the LIBOR Rate.

     “Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title retention agreement
and any Capital Lease having substantially the same economic effect as any of the foregoing).

     “Loan” shall mean a Revolving Loan, a Swingline Loan and/or the Term Loan as
appropriate.

     “LOC Commitment” shall mean the commitment of the Issuing Lender to issue Letters of
Credit and with respect to each Lender, the commitment of such Lender to purchase participation
interests in the Letters of Credit up to such Lender’s LOC Committed Amount as specified in the
Lender Commitment Letter or in the Register, as such amount may be reduced from time to time in
accordance with the provisions hereof.

     “LOC Commitment Percentage” shall mean, for each Lender, the percentage identified as
its LOC Commitment Percentage in its Lender Commitment Letter or in the Commitment Transfer
Supplement pursuant to which such Revolving Lender became a Lender hereunder, as such percentage
may be modified in connection with any assignment made in accordance with the provisions of Section
9.6(c).

17

 

     “LOC Committed Amount” shall mean, collectively, the aggregate amount of all of the
LOC Commitments of the Lenders to issue and participate in Letters of Credit as referenced in
Section 2.3(c) and, individually, the amount of each Lender’s LOC Commitment as specified in its
Lender Commitment Letter or in the Commitment Transfer Supplement pursuant to which such Lender
became a Lender hereunder.

     “LOC Documents” shall mean, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith, any application
therefor, and any agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing for (i) the rights
and obligations of the parties concerned or (ii) any collateral security for such obligations.

     “LOC Obligations” shall mean, at any time, the sum of (i) the maximum Dollar Amount
which is, or at any time thereafter may become, available to be drawn under Letters of Credit then
outstanding, assuming compliance with all requirements for drawings referred to in such Letters of
Credit plus (ii) without duplication, the aggregate Dollar Amount of all drawings under
Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

     “Mandatory Borrowing” shall have the meaning set forth in Section 2.3(e) and Section
2.4(b)(ii), as the context may require.

     “Material Adverse Effect” shall mean a material adverse effect on (a) the business,
operations, property, assets or condition (financial or otherwise) of the Credit Parties and their
Subsidiaries taken as a whole, (b) the ability of the Borrower or any Guarantor to perform any of
its material obligations, when such obligations are required to be performed, under this Credit
Agreement, any of the Notes or any other Credit Document or (c) the validity or enforceability
against any Credit Party of this Credit Agreement, any of the Notes or any of the other Credit
Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder which, as a result thereof, would materially interfere with the practical realization of
the legal benefits generally intended to be conferred hereunder or thereunder.

     “Material Contract” shall mean any contract or other arrangement, whether written or
oral, to which any Credit Party or any of its Subsidiaries is a party as to which the breach,
nonperformance or cancellation by any party thereto could reasonably be expected to have a Material
Adverse Effect.

     “Materials of Environmental Concern” shall mean any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances or
wastes, defined or regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

     “Maturity Date” shall mean (a) with respect to the Term Loan, the Term Loan Maturity
Date and (b) with respect to the Revolving Loans, the Revolving Commitment Termination Date.

     “Moody’s” shall mean Moody’s Investors Service, Inc. or any successor to the rating
agency business thereof.

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     “Mortgage Instruments” shall have the meaning set forth in Section 4.1(f)(i).

     “Mortgage Policies” shall have the meaning set forth in Section 4.1(f)(iii).

     “Mortgaged Properties” shall have the meaning set forth in Section 4.1(f)(i).

     “Multiemployer Plan” shall mean a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

     “Net Cash Proceeds” shall mean the aggregate cash proceeds received by any Credit
Party or any Subsidiary in respect of any Asset Disposition, Equity Issuance, Debt Issuance, or
Recovery Event, net of (a) direct costs paid or payable as a result thereof (including, without
limitation, legal, accounting and investment banking fees, and sales commissions) and (b) taxes
paid or payable as a result thereof; it being understood that “Net Cash Proceeds” shall include,
without limitation, any cash received upon the sale or other disposition of any non-cash
consideration received by any Credit Party or any Subsidiary in respect of any Asset Disposition,
Equity Issuance, Debt Issuance, or Recovery Event and any cash released from escrow as part of the
purchase price in connection with any Asset Disposition.

     “Note” or “Notes” shall mean the Revolving Notes, the Swingline Note and/or
the Term Notes, collectively, separately or individually, as appropriate.

     “Notice of Borrowing” shall mean the written notice of borrowing as referenced and
defined in Section 2.1(b)(i) or as referenced in 2.4(b)(i), as appropriate.

     “Notice of Conversion/Extension” shall mean the written notice of extension or
conversion as referenced and defined in Section 2.10(a).

     “Obligations” shall mean, collectively, Loans and LOC Obligations.

     “Operating Lease” shall mean, as applied to any Person, any lease (including, without
limitation, leases which may be terminated by the lessee at any time) of any property (whether
real, personal or mixed) which is not a Capital Lease other than any such lease in which any Credit
Party or any Subsidiary is the lessor.

     “Parallel Debt” shall have the meaning set forth in Section 2.20.

     “Parent” shall have the meaning set forth in the first paragraph of this Agreement.

     “Parent Consigned Employees” shall mean individuals who function as employees of the
Borrower but who are technically employees of the Parent.

     “Parent Pledge Agreement” shall mean the Pledge Agreement dated as of the Closing Date
executed by the Parent in favor of the Administrative Agent, as amended, modified, restated or
supplemented from time to time.

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     “Participants” shall have the meaning set forth in Section 9.6(b).

     “Participating Member State” shall mean each country so described in any EMU
Legislation.

     “Participation Interest” shall mean the purchase by a Lender of a participation
interest in Letters of Credit as provided in Section 2.3(c) and in Swingline Loans as provided in
Section 2.4(b)(ii).

     “Patent License” shall mean all agreements, whether written or oral, providing for the
grant by or to a Credit Party of any right to manufacture, use or sell any invention covered by a
Patent, including, without limitation, any thereof referred to in Schedule 3.16.

     “Patents” shall mean (a) all letters patent of the United States or any other country
and all reissues and extensions thereof, including, without limitation, any thereof referred to in
Schedule 3.16, and (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part thereof, including,
without limitation, any thereof referred to in Schedule 3.16.

     “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.

     “Pension and Employee Loans Escrow Funds” shall mean the escrow funds established in
connection with the Acquisition to satisfy the German pension liabilities and employee loan
liabilities of Blitz 05-107 GmbH and Blitz 05-106 GmbH.

     “Permitted Investments” shall mean:

   (a) cash and Cash Equivalents;

   (b) Investments existing on the Closing Date and as forth on Schedule 1.1-2.

   (c) receivables owing to the Credit Parties or any of their Subsidiaries or any
receivables and advances to suppliers, or investments in payment intangibles, chattel
paper, notes, receivables and similar items in each case if created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with customary trade
terms;

   (d) loans or advances to, and Investments in (i) the Dutch Holding Company in an
aggregate principal amount not to exceed $100,000, (ii) any Credit Party, (iii) newly
created, formed or acquired Domestic Subsidiaries, provided that the applicable
requirements of Section 6.7 are satisfied, and (iv) newly created, formed or acquired
Foreign Subsidiaries (other than the Dutch Holding Company), provided that the
applicable requirements of Section 6.7 are satisfied;

20

 

   (e) loans and advances to employees and Affiliates in the ordinary course of business;
provided that such loans and advances made pursuant to this clause (e) shall not
exceed, as to all Credit Parties and their Subsidiaries, an aggregate amount of $1,000,000
and shall comply with all applicable Requirements of Law;

   (f) Investments (including debt obligations) received in connection with the bankruptcy
or reorganization of suppliers and customers and in settlement of delinquent obligations of,
and other disputes with, customers and suppliers arising in the ordinary course of business;

   (g) Investments, acquisitions or transactions permitted under Section 6.4(b);

   (h) Hedging Agreements permitted hereunder;

   (i) deposits in a customary fashion in the ordinary course of business;

   (j) loans or advances in existence on the Closing Date, and Investments in existence on
the Closing Date, in Foreign Subsidiaries in existence on the Closing Date;

   (k) the loan by the Borrower to Blitz 05-107 GbmH on the Closing Date in an aggregate
amount not to exceed €22,000,000 and the Investment by the Borrower on the Closing Date
of up to €15,000,000 in the equity of Blitz 05-107 GmbH in order to provide funds for the
acquisition of the shares pursuant to the Share Purchase Agreement.

“Permitted Liens” shall mean:

   (a) Liens created by or otherwise existing, under or in connection with this Credit
Agreement or the other Credit Documents in favor of the Lenders;

   (b) Liens in favor of a Hedging Agreement Provider in connection with any Secured
Hedging Agreement, provided that such Liens shall secure the Credit Party Obligations and
the obligations under such Secured Hedging Agreement Provider on a pari
passu basis;

   (c) Liens securing purchase money indebtedness and Capital Lease Obligations (and
refinancings thereof) to the extent permitted under Section 6.1(c); provided, that
(i) any such Lien attaches to such property concurrently with or within thirty (30) days
after the acquisition thereof and (ii) such Lien attaches solely to the property so acquired
in such transaction and the proceeds therefrom;

   (d) Liens for taxes, assessments, charges or other governmental levies not yet due or
as to which the period of grace (not to exceed sixty (60) days), if any, related thereto has
not expired or which are being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are maintained on the books of
the Credit Party or its Subsidiaries, as the case may be, in conformity with GAAP (or, in
the case of Foreign Subsidiaries with significant operations outside the

21

 

United States of America, generally accepted accounting principles in effect from time to
time in their respective jurisdictions of incorporation;

   (e) statutory Liens such as carriers’, warehousemen’s, landlord’s, mechanics’,
materialmen’s, processor’s, repairmen’s or other like Liens arising in the ordinary course
of business which are not overdue for a period of more than sixty (60) days or which are
being contested in good faith by appropriate proceedings;

   (f) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements incurred in the ordinary course of
business;

   (g) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of business;

   (h) any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Lien referred to in the foregoing clauses;
provided that such extension, renewal or replacement Lien shall be limited to all or
a part of the property which secured the Lien so extended, renewed or replaced;

   (i) Liens existing on the Closing Date and set forth on Schedule 1.1-3;
provided that (a) no such Lien shall at any time be extended to cover property or assets
other than the property or assets subject thereto on the Closing Date and (b) the principal
amount of the Indebtedness secured by such Liens shall not be extended, renewed, refunded or
refinanced;

   (j) easements, rights-of-way, restrictions (including zoning restrictions), minor
defects or irregularities in title and other similar charges or encumbrances not, in any
material respect, impairing the use of the encumbered Property for its intended purposes;
and

   (k) Liens on equipment arising from precautionary UCC financing statements relating to
the lease of such equipment to the extent permitted by this Credit Agreement.

   (l) Liens arising in the ordinary course of business by virtue of any contractual
statutory or common law provision relating to banker’s Liens, rights of set-off or similar
rights and remedies covering deposit or securities accounts (including funds or other
assets, credit thereto) or other funds maintained with a depository institution or
securities intermediary;

   (m) any zoning, building or similar laws or rights reserved to or vested in any
Governmental Authority;

22

 

   (n) restrictions on transfers of securities imposed by applicable securities laws;

   (o) Liens arising out of judgments or awards not resulting in an Event of Default

          (p) any interest or title of a lessor, licensor or sublessor under any lease, license
or sublease entered into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased, licensed or subleased; and

          (q) assignments of insurance or condemnation proceeds provided to landlords (or their
mortgagees) pursuant to the terms of any lease and Liens or rights reserved in any lease for
rent or for compliance with the terms of such lease.

     “Person” shall mean an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.

     “Plan” shall mean, at any particular time, any employee benefit plan which is covered
by Title IV of ERISA and in respect of which any Credit Party or a Commonly Controlled Entity is an
“employer” as defined in Section 3(5) of ERISA (or, if such Plan were terminated at such time,
would under Section 4069 of ERISA be subject to liability).

     “Pledge Agreement” shall mean the Pledge Agreement dated as of the Closing Date
executed by the Credit Parties in favor of the Administrative Agent, as amended, modified, restated
or supplemented from time to time.

     “Prime Rate” shall have the meaning set forth in the definition of Alternate Base
Rate.

     “Pro Forma Basis” shall mean, with respect to any transaction, that such transaction
shall be deemed to have occurred as of the first day of the twelve-month period ending as of the
most recent month end preceding the date of such transaction.

     “Projections” shall have the meaning set forth in Section 3.1.

     “Properties” shall have the meaning set forth in Section 3.10(a).

     “Purchasing Lenders” shall have the meaning set forth in Section 9.6(c).

     “Rebate Payments” shall mean those certain rebate and other payments due from the
Borrower to the Sellers pursuant to the Supply Agreements.

     “Recovery Event” shall mean the receipt by any Credit Party or any of its Subsidiaries
of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical
destruction or damage, taking or similar event with respect to any of their respective property or
assets.

23

 

     “Register” shall have the meaning set forth in Section 9.6(d).

     “Regulation S-X” shall mean Regulation S-X of the Securities Act or any successor
regulation thereto.

     “Related Fund” shall mean, with respect to any Lender, any fund or trust or entity
that invests in commercial bank loans in the ordinary course of business and is advised or managed
by (i) such Lender, (ii) an Affiliate of such Lender or (iii) any other Lender or any Affiliate
thereof.

     “Reorganization” shall mean, with respect to any Multiemployer Plan, the condition
that such Plan is in reorganization within the meaning of such term as used in Section 4241 of
ERISA.

     “Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty-day notice period is waived under ERISA Reg. §4043.

     “Required Lenders” shall mean, at any time, Lenders holding in the aggregate more than
50% of (i) the Commitments (and Participation Interests therein) or (ii) if the Commitments have
been terminated, the outstanding Dollar Amount (determined as of the most recent Revaluation Date)
of Loans and Participation Interests (including the Participation Interests of the Issuing Lender
in any Letters of Credit and of the Swingline Lender in Swingline Loans); provided,
however, that if any Lender shall be a Defaulting Lender at such time, then there shall be
excluded from the determination of Required Lenders, Obligations (including Participation
Interests) owing to such Defaulting Lender and such Defaulting Lender’s Commitments, or after
termination of the Commitments, the principal balance of the Obligations owing to such Defaulting
Lender.

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

     “Responsible Officer” shall mean, as to (a) the Borrower, any of the President, the
Chief Executive Officer, the Chief Financial Officer, the Treasurer, the General Counsel or any
Vice President or (b) any other Credit Party, any duly authorized officer thereof.

     “Restricted Payment” shall mean (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of Capital Stock of any Credit Party or any of its
Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, now or hereafter outstanding, (c) any
payment made to retire, or to obtain the surrender of, any outstanding

24

 

warrants, options or other rights to acquire shares of any class of Capital Stock of any
Credit Party or any of its Subsidiaries, now or hereafter outstanding, (d) any payment with respect
to any earnout obligation, (e) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement, defeasance, sinking fund or similar payment with
respect to, any Subordinated Indebtedness of any Credit Party or any of its Subsidiaries, (f) any
payment or prepayment of principal of, premium, if any, or interest on, redemption, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, any Rebate Payment, (g)
the payment by any Credit Party or any of its Subsidiaries of any management, advisory or
consulting fee to any Person or of any salary, bonus or other form of compensation to any Person
who is directly or indirectly a significant partner, shareholder, owner or executive officer of any
such Person, to the extent such salary, bonus or other form of compensation is not included in the
corporate overhead of such Credit Party or such Subsidiary. For the avoidance of doubt, the
following shall not constitute Restricted Payments: (i) payments made to the Parent to reimburse
it for the compensation paid by the Parent to Parent Consigned Employees, provided, that
such compensation is reasonable for the services performed for the Borrower by the Parent Consigned
Employees, (ii) payments made out of the Pension and Employee Loans Escrow Funds in accordance with
the terms of the documents establishing such escrow accounts, and (iii) payments of up to $350,000
in the aggregate in any fiscal year made by the German Subsidiaries of the Borrower in connection
with loans made after the Closing Date under their employee loan programs as in effect on the
Closing Date.

     “Revaluation Date” shall mean: (a) each date that a new Loan is made; (b) each date an
existing Loan is extended, converted or continued; (c) each date a Letter of Credit is issued or
renewed pursuant to Section 2.3 or amended in such a way as to modify the LOC Obligations; (d) the
date of any reduction of any of the Aggregate Revolving Committed Amount pursuant to the terms of
Section 2.6; and (e) such additional dates as the Administrative Agent or the Required Lenders
shall reasonably determine.

     “Revolving Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make Revolving Loans in an aggregate principal amount at any time outstanding up to such
Lender’s Revolving Committed Amount.

     “Revolving Commitment Percentage” shall mean, for each Lender, the percentage
identified as its Revolving Commitment Percentage in its Lender Commitment Letter or in the
Commitment Transfer Supplement pursuant to which such Revolving Lender became a Lender hereunder,
as such percentage may be modified in connection with any assignment made in accordance with the
provisions of Section 9.6(c).

     “Revolving Commitment Termination Date” shall mean the date that is 364 days after the
Closing Date.

     “Revolving Committed Amount” shall mean the amount of each Lender’s Revolving
Commitment as specified in its Lender Commitment Letter or in the Commitment Transfer Supplement
pursuant to which such Revolving Lender became a Lender hereunder, as such amount may be reduced
from time to time in accordance with the provisions hereof.

25

 

     “Revolving Lender” shall mean each Lender with a Revolving Commitment.

     “Revolving Loans” shall have the meaning set forth in Section 2.1.

     “Revolving Note” or “Revolving Notes” shall mean the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Revolving Loans provided pursuant to
Section 2.1(e), individually or collectively, as appropriate, as such promissory notes may be
amended, restated, modified, supplemented, extended, renewed or replaced from time to time.

     “S&P” shall mean Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc, or
any successor to the rating agency business thereof.

     “Scheduled Funded Debt Payments” shall mean, as of any date of determination for the
Credit Parties and their Subsidiaries, the sum of all scheduled payments on Funded Debt (but
excluding any repayments of revolving Indebtedness unless accompanied by a reduction in commitments
and excluding payments of interest and fees) for the applicable period ending on the date of
determination (including the principal component of payments due on Capital Leases during the
applicable period ending on the date of determination).

     “Secured Hedging Agreement” shall mean any Hedging Agreement between a Credit Party
and a Hedging Agreement Provider, as amended, modified, supplemented, extended or restated from
time to time.

     “Secured Obligations” shall mean, without duplication, (i) all Credit Party
Obligations and (ii) all liabilities and obligations, whenever arising, under all Secured Hedging
Agreements.

     “Securities Act” shall mean the Securities Act of 1933, together with any amendment
thereto or successor thereof and any rules or regulations promulgated thereunder.

     “Securities Exchange Act” shall mean the Securities Exchange Act of 1934, together
with any amendment thereto or successor thereof and any rules or regulations promulgated
thereunder.

     “Security Agreement” shall mean the Security Agreement dated as of the Closing Date
executed by the Credit Parties in favor of the Administrative Agent, as amended, restated, modified
or supplemented from time to time in accordance with its terms.

     “Security Documents” shall mean the Security Agreement, the Pledge Agreement, the
Parent Pledge Agreement, the Foreign Collateral Documents, the Mortgage Instruments, the Cash
Collateral Account Agreement and such other documents executed and/or delivered in connection with
the attachment and perfection of the Administrative Agent’s security interests and liens arising
thereunder, including, without limitation, UCC financing statements and any collateral
documentation (in addition to the Pledge Agreement) with respect to the pledge of 65% of the
Capital Stock of any first-tier Foreign Subsidiary.

     “Sellers” shall mean the Asset Sellers and the Share Seller.

26

 

     “Share Purchase Agreement” shall mean that certain Share Purchase Agreement, dated as
of May 9, 2005, by and among Blitz 05-107 GmbH (to be renamed Entertainment Distribution GmbH and
subsequently renamed Entertainment Distribution Holdings GmbH), as the purchaser and Universal
Manufacturing & Logistics GmbH and Universal Music GmbH, as sellers together with any schedules and
exhibits thereto.

     “Share Seller” shall mean Universal Music GmbH.

     “Single Employer Plan” shall mean any Plan which is not a Multiemployer Plan.

     “Spot Rate” shall mean the rate quoted by Wachovia as the spot rate for the purchase
by Wachovia of Dollars with Euros 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.

     “Subordinated Indebtedness” shall mean any unsecured Indebtedness incurred by any
Credit Party that is specifically subordinated in right of payment to the prior payment of the
Secured Obligations, which Indebtedness shall be in all respects on terms reasonably acceptable to
the Administrative Agent.

     “Subsidiary” shall mean, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more intermediaries, or
both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

     “Supply Agreements” shall mean those certain supply agreements entered into by and
between the Borrower and the Sellers on the Closing Date.

     “Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding up to the Swingline
Committed Amount, and the commitment of the Lenders to purchase participation interests in the
Swingline Loans as provided in Section 2.4(b)(ii), as such amounts may be reduced from time to time
in accordance with the provisions hereof.

     “Swingline Committed Amount” shall mean the amount of the Swingline Lender’s Swingline
Commitment as specified in Section 2.4(a).

     “Swingline Lender” shall mean Wachovia.

27

 

     “Swingline Loan” or “Swingline Loans” shall have the meaning set forth in
Section 2.4(a).

     “Swingline Note” shall mean the promissory note of the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.4(d), as such
promissory note may be amended, modified, supplemented, extended, renewed or replaced from time to
time.

     “Tax Exemption Certificate” shall have the meaning set forth in Section 2.18(b).

     “Taxes” shall have the meaning set forth in Section 2.18(a).

     “Term Loan” shall have the meaning set forth in Section 2.2(a).

     “Term Loan Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make its portion of the Term Loan in a principal amount equal to such Lender’s Term Loan
Commitment Percentage of the Term Loan Committed Amount (and for purposes of making determinations
of Required Lenders hereunder after the Closing Date, the principal amount outstanding on the Term
Loan).

     “Term Loan Commitment Percentage” shall mean, for any Lender, the percentage
identified as its Term Loan Commitment Percentage in its Lender Commitment Letter or in the
Commitment Transfer Supplement pursuant to which such Term Loan Lender became a Lender hereunder,
as such percentage may be modified in connection with any assignment made in accordance with the
provisions of Section 9.6.

     “Term Loan Committed Amount” shall have the meaning set forth in Section 2.2(a).

     “Term Loan Maturity Date” shall mean May 31, 2010.

     “Term Note” or “Term Notes” shall mean the promissory notes of the Borrower in
favor of each of the Lenders evidencing the portion of the Term Loan provided pursuant to Section
2.2(d), individually or collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from time to time.

     “Termination Date” shall mean the date upon which all Credit Party Obligations have
been paid in full in cash (other than indemnification obligations with respect to which no claim as
been asserted, which shall survive the termination of the Credit Documents), all Commitments have
been terminated, and all Letters of Credit have expired undrawn or been terminated.

     “Title Insurance Company” shall have the meaning set forth in Section 4.1(f)(iii).

     “Trademark License” shall means any agreement, written or oral, providing for the
grant by or to a Credit Party of any right to use any Trademark, including, without limitation, any
thereof referred to in Schedule 3.16.

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     “Trademarks” shall mean (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade dress and service marks, logos and other
source or business identifiers, and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country or any political subdivision
thereof, or otherwise, including, without limitation, any thereof referred to in Schedule
3.16, and (b) all renewals thereof, including, without limitation, any thereof referred to in
Schedule 3.16.

     “Tranche” shall mean the collective reference to LIBOR Rate Loans whose Interest
Periods begin and end on the same day. A Tranche may sometimes be referred to as a “LIBOR
Tranche”.

     “Transfer Effective Date” shall have the meaning set forth in each Commitment Transfer
Supplement.

     “Type” shall mean, as to any Loan, its nature as an Alternate Base Rate Loan or LIBOR
Rate Loan, as the case may be.

     “Voting Stock” shall mean, with respect to any Person, Capital Stock issued by such
Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for
the election of directors (or persons performing similar functions) of such Person, even though the
right so to vote may be or have been suspended by the happening of such a contingency.

     “Wachovia” shall mean Wachovia Bank, National Association, together with its
successors and/or assigns.

     “Works” shall mean all works which are subject to copyright protection pursuant to
Title 17 of the United States Code.

     Section 1.2 Other Definitional Provisions.

     (a) Unless otherwise specified therein, all terms defined in this Agreement shall have
the defined meanings when used in the Notes or other Credit Documents or any certificate or
other document made or delivered pursuant hereto.

     (b) The words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to
this Agreement unless otherwise specified.

     (c) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

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     Section 1.3 Accounting Terms.

     Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with
the most recent audited consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes to amend
any covenant in Section 5.9 to eliminate the effect of any change in GAAP on the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Section 5.9 for such purpose), then the Borrower’s compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in a manner reasonably
satisfactory to the Borrower and the Required Lenders.

     The Borrower shall deliver to the Administrative Agent and each Lender at the same time as the
delivery of any annual or quarterly financial statements given in accordance with the provisions of
Section 5.1, (i) a description in reasonable detail of any material change in the application of
accounting principles employed in the preparation of such financial statements from those applied
in the most recently preceding quarterly or annual financial statements as to which no objection
shall have been made in accordance with the provisions above and (ii) a reasonable estimate of the
effect on the financial statements on account of such changes in application.

     Section 1.4 Exchange Rates; Currency Equivalents.

     The Administrative Agent shall determine the Spot Rate as of each Revaluation Date to be used
for calculating the Dollar Amounts of Letters of Credit and amounts outstanding hereunder
denominated in Euros. Such Spot Rate shall become effective as of such Revaluation Date and shall
be the Spot Rate employed in converting any amounts between the applicable currencies until the
next Revaluation Date to occur. Except as otherwise provided herein, the applicable amount of
Euros for purposes of the Credit Documents shall be the Dollar Amount as so determined by the
Administrative Agent.

ARTICLE II

THE LOANS; AMOUNT AND TERMS

     Section 2.1 Revolving Loans.

     (a) Revolving Commitment. During the Commitment Period, subject to the terms
and conditions hereof, each Revolving Lender severally, but not jointly, agrees to make
revolving credit loans (“Revolving Loans”) to the Borrower from time to time in an
aggregate principal amount of up to TEN MILLION DOLLARS ($10,000,000) (as such aggregate
maximum amount may be reduced from time to time as provided in Section 2.7, the
“Aggregate Revolving Committed Amount”) for the purposes hereinafter set

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forth; provided, however, that (i) with regard to each Revolving Lender
individually, the sum of such Revolving Lender’s Revolving Commitment Percentage of
outstanding Revolving Loans plus such Revolving Lender’s Revolving Commitment
Percentage of outstanding Swingline Loans plus such Revolving Lender’s LOC
Commitment Percentage of the Dollar Amount (determined as of the most recent Revaluation
Date) of LOC Obligations shall not exceed such Lender’s Revolving Committed Amount and (ii)
with regard to the Revolving Lenders collectively, the sum of the outstanding Revolving
Loans plus outstanding Swingline Loans plus the Dollar Amount (determined as
of the most recent Revaluation Date) of LOC Obligations shall not exceed the Aggregate
Revolving Committed Amount. Revolving Loans may consist of Alternate Base Rate Loans or
LIBOR Rate Loans, or a combination thereof, as the Borrower may request, and may be repaid
and reborrowed in accordance with the provisions hereof; provided, however,
Revolving Loans made on any of the three Business Days following the Closing Date may only
consist of Alternate Base Rate Loans. LIBOR Rate Loans shall be made by each Revolving
Lender at its LIBOR Lending Office and Alternate Base Rate Loans shall be made by each
Revolving Lender at its Domestic Lending Office.

     (b) Revolving Loan Borrowings.

     (i) Notice of Borrowing. The Borrower shall request a Revolving Loan
borrowing by written notice (or telephone notice promptly confirmed in writing which
confirmation may be by fax) to the Administrative Agent not later than 12:00 Noon
(Charlotte, North Carolina time) on the date of the requested borrowing in the case
of Alternate Base Rate Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of LIBOR Rate Loans. Each such request for
borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which shall be a Business Day),
(C) the aggregate principal amount to be borrowed, (D) whether the borrowing shall
be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination
thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor. A
form of Notice of Borrowing (a “Notice of Borrowing”) is attached as
Schedule 2.1(b)(i). If the Borrower shall fail to specify in any such
Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate
Loan, then such notice shall be deemed to be a request for an Interest Period of one
month, or (II) the type of Revolving Loan requested, then such notice shall be
deemed to be a request for an Alternate Base Rate Loan hereunder. The
Administrative Agent shall give notice to each Revolving Lender promptly upon
receipt of each Notice of Borrowing, the contents thereof and each such Revolving
Lender’s share thereof.

     (ii) Minimum Amounts. Each Revolving Loan (A) that is an Alternate
Base Rate Loan shall be in a minimum aggregate amount of $500,000 and in integral
multiples of $100,000 in excess thereof (or the remaining amount of the Aggregate
Revolving Committed Amount, if less) and (B) that is a LIBOR Rate Loan shall be in a
minimum aggregate amount of $1,000,000 and in integral

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multiples of $200,000 in excess thereof, except for Mandatory Borrowings under
Section 2.3(e) or 2.4(b)(ii).

     (iii) Advances. Each Revolving Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent specified in Section 9.2, or at such other office as the
Administrative Agent may designate in writing, by 2:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice of Borrowing in
Dollars and in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative Agent by
crediting the account of the Borrower on the books of such office with the aggregate
of the amounts made available to the Administrative Agent by the Revolving Lenders
and in like funds as received by the Administrative Agent.

     (c) Repayment. The principal amount of all Revolving Loans shall be due and
payable in full on the Revolving Commitment Termination Date, unless accelerated sooner
pursuant to Section 7.2.

     (d) Interest. Subject to the provisions of Section 2.9, Revolving Loans shall
bear interest as follows:

     (i) Alternate Base Rate Loans. During such periods as Revolving Loans
shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan
shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate
plus the Applicable Percentage; and

     (ii) LIBOR Rate Loans. During such periods as Revolving Loans shall be
comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a
per annum rate equal to the sum of the LIBOR Rate plus the Applicable
Percentage.

     Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.

     (e) Revolving Notes. Each Revolving Lender’s Revolving Committed Amount shall
be evidenced by a duly executed promissory note of the Borrower to such Revolving Lender
requesting a promissory note in substantially the form of Schedule 2.1(e).

     Section 2.2 Term Loan Facility.

     (a) Term Loan. Subject to the terms and conditions hereof and in reliance upon
the representations and warranties set forth herein, each Lender severally, but not jointly,
agrees to make available to the Borrower on the Closing Date such Lender’s Term Loan
Commitment Percentage of a term loan in Dollars (the “Term Loan”) in the

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aggregate principal amount of FORTY-SIX MILLION FIVE HUNDRED THOUSAND DOLLARS ($46,500,000)
(the “Term Loan Committed Amount”) for the purposes hereinafter set forth. The Term
Loan may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof,
as the Borrower may request; provided, however, the Term Loan made on the
Closing Date may only consist of Alternate Base Rate Loans. Amounts repaid on the Term Loan
may not be reborrowed.

     (b) Repayment of Term Loan. The principal amount of the Term Loan shall be
repaid in six (6) installments as follows:

	 	 	 	 	 	 
	 
	 	Principal Amortization	 	 	Term Loan Principal	 
	 	Payment Date	 	 	Amortization Payment	 
	 	December 31, 2005
	 	 	$5,000,000	 
	 	June 30, 2006
	 	 	$6,500,000	 
	 	June 30, 2007
	 	 	$8,000,000	 
	 	June 30, 2008
	 	 	$9,000,000	 
	 	June 30, 2009
	 	 	$9,000,000	 
	 	Term Loan Maturity Date
	 	 	$9,000,000	 
	 

     (c) Interest on the Term Loan. Subject to the provisions of Section 2.9, the
Term Loan shall bear interest as follows:

     (i) Alternate Base Rate Loans. During such periods as the Term Loan
shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan
shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate
plus the Applicable Percentage; and

     (ii) LIBOR Rate Loans. During such periods as the Term Loan shall be
comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a
per annum rate equal to the sum of the LIBOR Rate plus the Applicable
Percentage.

     Interest on the Term Loan shall be payable in arrears on each Interest Payment Date.

     (d) Term Notes. Each Lender’s Term Loan Commitment Percentage of the Term Loan
Committed Amount shall be evidenced by a duly executed promissory note of the Borrower to
such Lender requesting a promissory note in substantially the form of Schedule
2.2(d).

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     Section 2.3 Letter of Credit Subfacility.

     (a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender may
reasonably require, during the Commitment Period the Issuing Lender shall issue, and the
Revolving Lenders shall participate in, Letters of Credit for the account of the Borrower
from time to time upon request in a form acceptable to the Issuing Lender; provided,
however, that (i) the aggregate Dollar Amount (determined as of the most recent
Revaluation Date) of LOC Obligations shall not at any time exceed FIVE MILLION DOLLARS
($5,000,000) (the “LOC Committed Amount”), (ii) the aggregate principal Dollar
Amount (determined as of the most recent Revaluation Date) of outstanding Revolving Loans
plus outstanding Swingline Loans plus LOC Obligations shall not at any time
exceed the Aggregate Revolving Committed Amount, (iii) all Letters of Credit shall be
denominated in Dollars or in Euros (provided that the aggregate principal amount of Letters
of Credit denominated in Euros shall not exceed €1,500,000) and (iv) Letters of Credit shall
be issued for lawful corporate purposes (subject to Section 3.11) and may be issued as
standby letters of credit, including in connection with workers’ compensation and other
insurance programs. Except as otherwise expressly agreed upon by all the Revolving Lenders,
no Letter of Credit shall have an original expiry date more than twelve (12) months from the
date of issuance; provided, however, so long as no Default or Event of
Default has occurred and is continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be
extended annually or periodically from time to time on the request of the Borrower or by
operation of the terms of the applicable Letter of Credit to a date not more than twelve
(12) months from the date of extension; provided, further, that no Letter of
Credit, as originally issued or as extended, shall have an expiry date extending beyond the
date which is thirty (30) days prior to the Revolving Commitment Termination Date. Each
Letter of Credit shall comply with the related LOC Documents. The issuance and expiry date
of each Letter of Credit shall be a Business Day. Any Letters of Credit issued hereunder
shall be in a minimum original face amount of $50,000 (or, in the case of Letters of Credit
denominated in Euros, the Euro Equivalent thereof (rounded to the nearest 1,000 Euros)) or
such lesser amount as the Issuing Lender may agree. Wachovia shall be the Issuing Lender on
all Letters of Credit issued on or after the Closing Date.

     (b) Notice and Reports. The request for the issuance of a Letter of Credit
shall be submitted to the Issuing Lender at least five (5) Business Days prior to the
requested date of issuance. The Issuing Lender will promptly upon request provide to the
Administrative Agent for dissemination to the Revolving Lenders a detailed report specifying
the Letters of Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of any prior report, and including therein,
among other things, the account party, the beneficiary, the face amount, expiry date as well
as any payments or expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the Letters of Credit.
The Issuing Lender will provide to the Administrative Agent promptly upon request a summary
report of the nature and extent of LOC Obligations then outstanding.

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     (c) Participations. Each Revolving Lender upon issuance of a Letter of Credit
shall be deemed to have purchased without recourse a risk participation from the Issuing
Lender in such Letter of Credit and the obligations arising thereunder and any collateral
relating thereto, in each case in an amount equal to its LOC Commitment Percentage of the
obligations under each such Letter of Credit and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the
Issuing Lender therefor and discharge when due, its LOC Commitment Percentage of the
obligations arising under each such Letter of Credit. Without limiting the scope and nature
of each Revolving Lender’s participation in any Letter of Credit, to the extent that the
Issuing Lender has not been reimbursed as required hereunder or under any LOC Document, each
such Revolving Lender shall pay to the Issuing Lender its LOC Commitment Percentage of the
Dollar Amount (determined as of the most recent Revaluation Date) of such unreimbursed
drawing in same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The obligation of
each Revolving Lender to so reimburse the Issuing Lender shall be absolute and unconditional
and shall not be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under any Letter of Credit,
together with interest as hereinafter provided.

     (d) Reimbursement. In the event of any drawing under any Letter of Credit, the
Issuing Lender will promptly notify the Borrower and the Administrative Agent. The Borrower
shall reimburse the Issuing Lender on the day of drawing under any Letter of Credit (with
the proceeds of a Revolving Loan obtained hereunder or otherwise) in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to reimburse the
Issuing Lender as provided herein, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable
Percentage for Revolving Loans that are Alternate Base Rate Loans plus two percent (2%).
Unless the Borrower shall immediately notify the Issuing Lender and the Administrative Agent
of its intent to otherwise reimburse the Issuing Lender, the Borrower shall be deemed to
have requested a Revolving Loan in the Dollar Amount (determined as of the most recent
Revaluation Date) of the drawing as provided in subsection (e) hereof, the proceeds of which
will be used to satisfy the reimbursement obligations. The Borrower’s reimbursement
obligations hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including without
limitation any defense based on any failure of the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the Revolving Lenders of the Dollar Amount (determined as of the
most recent Revaluation Date) of any unreimbursed drawing and each Revolving Lender shall
promptly pay to the Administrative Agent for the account of the Issuing Lender in Dollars
and in immediately available funds, the Dollar Amount (determined as of the most recent
Revaluation Date)

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of such Revolving Lender’s LOC Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Revolving Lender from the
Issuing Lender if such notice is received at or before 2:00 P.M. (Charlotte, North Carolina
time), otherwise such payment shall be made at or before 12:00 Noon (Charlotte, North
Carolina time) on the Business Day next succeeding the day such notice is received. If such
Revolving Lender does not pay such amount to the Issuing Lender in full upon such request,
such Revolving Lender shall, on demand, pay to the Administrative Agent for the account of
the Issuing Lender interest on the unpaid amount during the period from the date of such
drawing until such Revolving Lender pays such amount to the Issuing Lender in full at a rate
per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal
Funds Effective Rate and thereafter at a rate equal to the Alternate Base Rate. Each
Revolving Lender’s obligation to make such payment to the Issuing Lender, and the right of
the Issuing Lender to receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard to the termination of this
Agreement or the Commitments hereunder, the existence of a Default or Event of Default or
the acceleration of the Credit Party Obligations hereunder and shall be made without any
offset, abatement, withholding or reduction whatsoever.

     (e) Repayment with Revolving Loans. On any day on which the Borrower shall
have requested, or been deemed to have requested, a Revolving Loan to reimburse a drawing
under a Letter of Credit, the Administrative Agent shall give notice to the Revolving
Lenders that a Revolving Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised
entirely of Alternate Base Rate Loans (each such borrowing, a “Mandatory Borrowing”)
shall be immediately made (without giving effect to any termination of the Commitments
pursuant to Section 7.2) pro rata based on each Revolving Lender’s
respective Revolving Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC Obligations. Each
Revolving Lender hereby irrevocably agrees to make such Revolving Loans promptly upon any
such request or deemed request on account of each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the same such date
notwithstanding (i) the amount of Mandatory Borrowing may not comply with the
minimum amount for borrowings of Revolving Loans otherwise required hereunder, (ii) whether
any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an
Event of Default then exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required in Section 2.1(b), (v) the date of
such Mandatory Borrowing, or (vi) any reduction in the Aggregate Revolving Committed Amount
after any such Letter of Credit may have been drawn upon. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code), then each such Revolving Lender hereby agrees that it shall forthwith fund (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase) the Dollar

36

 

Amount (determined as of the most recent Revaluation Date) of its Participation Interests in
the LOC Obligations; provided, further, that in the event any Revolving
Lender shall fail to fund its Participation Interest on the day the Mandatory Borrowing
would otherwise have occurred, then the amount of such Revolving Lender’s unfunded
Participation Interest therein shall bear interest payable by such Revolving Lender to the
Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of
such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate
Base Rate.

     (f) Modification, Extension. The issuance of any supplement, modification,
amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be
treated in all respects the same as the issuance of a new Letter of Credit hereunder.

     (g) Uniform Customs and Practices. The Issuing Lender shall have the Letters
of Credit be subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of Commerce (the
“UCP”), in which case the UCP may be incorporated therein and deemed in all respects
to be a part thereof.

     (h) Reimbursement Payments. All payments made to the Issuing Lender to
reimburse the Issuing Lender for any drawing under a Letter of Credit from (x) the Borrower,
shall be made in the applicable currency of the relevant Letter of Credit with respect to
which the drawing was made or (y) the Revolving Lenders, shall be made in Dollars (based
upon the Dollar Amount of the applicable payment); provided that in each case the
Borrower shall be liable for any currency exchange loss (but shall be entitled to the
benefit of any currency exchange gain) related to such payments and shall promptly pay the
Issuing Lender upon receipt of notice thereof the amount of any such loss.

     (i) Conflict with LOC Documents. In the event of any conflict between the
terms hereof and any LOC Documents, the terms hereof shall control.

     Section 2.4 Swingline Loan Subfacility.

     (a) Swingline Commitment. During the Commitment Period, subject to the terms
and conditions hereof, the Swingline Lender, in its individual capacity, agrees to make
certain revolving credit loans to the Borrower (each a “Swingline Loan” and,
collectively, the “Swingline Loans”) for the purposes hereinafter set forth;
provided, however, (i) the aggregate amount of Swingline Loans outstanding
at any time shall not exceed TWO MILLION DOLLARS ($2,000,000) (the “Swingline Committed
Amount”), and (ii) the sum of the outstanding Revolving Loans plus outstanding
Swingline Loans plus the Dollar Amount (determined as of the most recent Revaluation
Date) of LOC Obligations shall not exceed the Aggregate Revolving Committed Amount.
Swingline Loans hereunder may be repaid and reborrowed in accordance with the provisions
hereof.

     (b) Swingline Loan Borrowings.

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     (i) Notice of Borrowing and Disbursement. The Swingline Lender will make
Swingline Loans available to the Borrower on any Business Day upon request made by the
Borrower not later than 2:00 P.M. (Charlotte, North Carolina time) on such Business Day. A
notice of request for Swingline Loan borrowing shall be made in the form of Schedule
2.1(b)(i) with appropriate modifications. Swingline Loan borrowings hereunder shall be
made in minimum amounts of $100,000 and in integral amounts of $50,000 in excess thereof.

     (ii) Repayment of Swingline Loans. Each Swingline Loan borrowing shall be due
and payable on the Revolving Commitment Termination Date. The Swingline Lender may, at any
time, in its sole discretion, by written notice to the Borrower and the Administrative
Agent, demand repayment of its Swingline Loans by way of a Revolving Loan borrowing, in
which case the Borrower shall be deemed to have requested a Revolving Loan borrowing
comprised entirely of Alternate Base Rate Loans in the amount of such Swingline Loans;
provided, however, that, in the following circumstances, any such demand
shall also be deemed to have been given one Business Day prior to each of (i) the Revolving
Commitment Termination Date, (ii) the occurrence of any Event of Default described in
Section 7.1(e), (iii) upon acceleration of the Credit Party Obligations hereunder, whether
on account of an Event of Default described in Section 7.1(e) or any other Event of Default,
and (iv) the exercise of remedies in accordance with the provisions of Section 7.2 hereof
(each such Revolving Loan borrowing made on account of any such deemed request therefor as
provided herein being hereinafter referred to as “Mandatory Borrowing”). Each
Revolving Lender hereby irrevocably agrees to make such Revolving Loans promptly upon any
such request or deemed request on account of each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the same such date
notwithstanding (I) the amount of Mandatory Borrowing may not comply with the
minimum amount for borrowings of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 4.2 are then satisfied, (III) whether a Default or an
Event of Default then exists, (IV) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required in Section 2.1(b)(i), (V) the date
of such Mandatory Borrowing, or (VI) any reduction in the Revolving Committed Amount or
termination of the Revolving Commitments immediately prior to such Mandatory Borrowing or
contemporaneously therewith. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code), then each Revolving
Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Swingline Lender such
participations in the outstanding Swingline Loans as shall be necessary to cause each such
Revolving Lender to share in such Swingline Loans ratably based upon its respective
Revolving Commitment Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 7.2); provided that (A) all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender until the date as of which
the respective participation is purchased, and (B) at the time any purchase of
participations pursuant to this sentence is actually made, the

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purchasing Revolving Lender shall be required to pay to the Swingline Lender interest on the
principal amount of such participation purchased for each day from and including the day
upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date
of payment for such participation, at the rate equal to, if paid within two (2) Business
Days of the date of the Mandatory Borrowing, the Federal Funds Effective Rate, and
thereafter at a rate equal to the Alternate Base Rate.

     (c) Interest on Swingline Loans. Subject to the provisions of Section 2.9,
Swingline Loans shall bear interest at a per annum rate equal to the Alternate Base Rate
plus the Applicable Percentage for Revolving Loans that are Alternate Base Rate
Loans. Interest on Swingline Loans shall be payable in arrears on each Interest Payment
Date.

     (d) Swingline Note. The Swingline Loans shall be evidenced by a duly executed
promissory note of the Borrower to the Swingline Lender in the original amount of the
Swingline Committed Amount and substantially in the form of Schedule 2.4(d).

     Section 2.5 Fees.

     (a) Commitment Fee. In consideration of the Revolving Commitments, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of the Lenders
holding Revolving Commitments a commitment fee (the “Commitment Fee”) in an amount
equal to the Applicable Percentage per annum on the average daily unused amount of the
Aggregate Revolving Committed Amount. For purposes of computation of the Commitment Fee,
LOC Obligations shall be considered usage of the Aggregate Revolving Committed Amount and
Swingline Loans shall not be considered usage of the Aggregate Revolving Committed Amount.
The Commitment Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the prior calendar quarter.

     (b) Letter of Credit Fees. In consideration of the LOC Commitments, the
Borrower agrees to pay to the Issuing Lender a fee (the “Letter of Credit Fee”)
equal to the Applicable Percentage per annum on the average daily maximum amount available
to be drawn under each Letter of Credit from the date of issuance to the date of expiration.
In addition to such Letter of Credit Fee, the Issuing Lender may charge, and retain for its
own account without sharing by the other Lenders, an additional facing fee of one-fourth of
one percent (0.25%) per annum on the average daily maximum amount available to be drawn
under each such Letter of Credit issued by it. The Issuing Lender shall promptly pay over
to the Administrative Agent for the ratable benefit of the Revolving Lenders (including the
Issuing Lender) the Letter of Credit Fee. The Letter of Credit Fee shall be payable
quarterly in arrears on the 15th day following the last day of each calendar
quarter for the prior calendar quarter.

     (c) Issuing Lender Fees. In addition to the Letter of Credit Fees payable
pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing Lender for its own
account without sharing by the other Lenders the reasonable and customary charges from time
to time of the Issuing Lender with respect to the amendment, transfer,

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administration, cancellation and conversion of, and drawings under, such Letters of Credit
(collectively, the “Issuing Lender Fees”).

     (d) Administrative Fee. The Borrower agrees to pay to the Administrative Agent
the annual administrative fee as described in the Fee Letter.

     Section 2.6 Commitment Reductions.

     (a) Voluntary Reductions. The Borrower shall have the right to terminate or
permanently reduce the unused portion of the Aggregate Revolving Committed Amount at any
time or from time to time upon not less than five Business Days’ prior notice to the
Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each
such termination or reduction, which notice shall specify the effective date thereof and the
amount of any such reduction which shall be in a minimum amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof and shall be irrevocable and effective upon receipt
by the Administrative Agent, provided that no such reduction or termination shall be
permitted if after giving effect thereto, and to any prepayments of the Loans made on the
effective date thereof, the sum of the outstanding Revolving Loans plus outstanding
Swingline Loans plus LOC Obligations would exceed the Aggregate Revolving Committed
Amount.

     (b) Mandatory Reductions. On any date that the Revolving Loans are required to
be prepaid pursuant to the terms of Section 2.7(b) (ii), (iii) and (iv), the Aggregate
Revolving Committed Amount shall be automatically permanently reduced by the amount of such
required prepayment and/or reduction.

     (c) Revolving Commitment Termination Date. The Revolving Commitment, the
Swingline Commitment and the LOC Commitment shall automatically terminate on the Revolving
Commitment Termination Date.

     Section 2.7 Prepayments.

     (a) Optional Prepayments. The Borrower shall have the right to prepay Loans in
whole or in part from time to time; provided, however, that each partial
prepayment of (i) that portion of the Term Loan that consists of Alternate Base Rate Loans
shall be in a minimum principal amount of $500,000 and integral multiples of $100,000 in
excess thereof, (ii) that portion of the Term Loan that consists of LIBOR Rate Loans shall
be in a minimum principal amount of $1,000,000 and integral multiples of $200,000 in excess
thereof and (iii) each partial prepayment of a Swingline Loan shall be in a minimum
principal amount of $100,000 and integral multiples of $50,000 in excess thereof. The
Borrower shall give three Business Days’ irrevocable notice in the case of LIBOR Rate Loans
and one Business Day’s irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as practicable).
Amounts prepaid under this Section 2.7(a) shall be applied to the outstanding Revolving
Loans or the Term Loan as the Borrower may elect; provided, that each voluntary
prepayment of the Term Loan made on or before June 30, 2006 shall be

40

 

applied as set forth in Section 2.7(b)(vi)(C)(I) and each voluntary prepayment of the Term
Loan made thereafter shall be applied as set forth in Section 2.7(b)(vi)(C)(II);
provided, further, that each Lender shall receive its pro rata share (except
with respect to prepayments of Swingline Loans) of any such prepayment based on its
Revolving Commitment Percentage or Term Loan Commitment Percentage, as applicable. All
prepayments under this Section 2.7(a) shall be subject to Section 2.17, but otherwise
without premium or penalty. Interest on the principal amount prepaid shall be payable on
the next occurring Interest Payment Date that would have occurred had such Loans not been
prepaid or, at the request of the Administrative Agent, interest on the principal amount
prepaid shall be payable on any date that a prepayment is made hereunder through the date of
prepayment. Amounts prepaid on the Revolving Loans and the Swingline Loans may be
reborrowed in accordance with the terms hereof. Amounts prepaid on the Term Loan may not be
reborrowed.

     (b) Mandatory Prepayments.

     (i) Revolving Committed Amount. If at any time after the Closing Date,
the sum of the aggregate principal amount of outstanding Revolving Loans
plus outstanding Swingline Loans plus the Dollar Amount (determined
as of the most recent Revaluation Date) of LOC Obligations shall exceed the
Revolving Committed Amount, the Borrower immediately shall prepay the Revolving
Loans and the Swingline Loans and (after all Revolving Loans and Swingline Loans
have been repaid) cash collateralize the LOC Obligations in an amount sufficient to
eliminate such excess (such prepayment to be applied as set forth in clause (vi)
below).

     (ii) Asset Dispositions. Promptly following any Asset Disposition (or
related series of Asset Dispositions), the Borrower shall prepay the Loans and cash
collateralize the LOC Obligations in an aggregate amount equal to one hundred
percent (100%) of the Net Cash Proceeds derived from such Asset Disposition (or
related series of Asset Dispositions) (such prepayment to be applied as set forth in
clause (vi) below).

     (iii) Issuances. Immediately upon receipt by any Credit Party or any
of its Subsidiaries of proceeds from (A) any Debt Issuance, the Borrower shall
prepay the Loans and cash collateralize the LOC Obligations in an aggregate amount
equal to one hundred percent (100%) of the Net Cash Proceeds of such Debt Issuance
(such prepayment to be applied as set forth in clause (v) below) or (B) any Equity
Issuance, the Borrower shall prepay the Loans and cash collateralize the LOC
Obligations in an aggregate amount equal to one hundred percent (100%) of the Net
Cash Proceeds of such Equity Issuance (such prepayment to be applied as set forth in
clause (vi) below).

     (iv) Recovery Event. To the extent Net Cash Proceeds received in
connection with any Recovery Event are not used to acquire fixed or capital assets
in replacement of the assets subject to such Recovery Event within 180 days of

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the receipt of such Net Cash Proceeds, immediately following the 180th day occurring
after the receipt of such Net Cash Proceeds, the Borrower shall prepay the Loans
and/or cash collateralize the LOC Obligations in an aggregate amount equal to one
hundred percent (100%) of such Net Cash Proceeds not so used (such prepayment to be
applied as set forth in clause (vii) below).

     (v) Excess Cash Flow. Within seventy-five (75) days after the end of
each fiscal quarter ending June 30, commencing with the fiscal quarter ending June
30, 2006, the Borrower shall prepay the Loans and cash collateralize the LOC
Obligations in an amount equal to 75% of the Excess Cash Flow earned during the
twelve-month period then ended (such prepayments to be applied as set forth in
clause (vi) below); provided, that if the Leverage Ratio is less than or
equal to 1.50 to 1.0 as of the end of any fiscal year as demonstrated by the
officer’s Compliance Certificate most recently delivered pursuant to Section 5.2(b),
the Borrower shall not be required to prepay the Loans and/or cash collateralize the
LOC Obligations on account of the Excess Cash Flow earned during such prior fiscal
year.

     (vi) Application of Mandatory Prepayments. All amounts required to be
paid pursuant to this Section 2.7(b) shall be applied as follows: (A) with respect
to all amounts prepaid pursuant to Section 2.7(b)(i), (1) first, to the outstanding
Swingline Loans, (2) second, to the outstanding Revolving Loans and (3) third (after
all Revolving Loans have been repaid), to a cash collateral account in respect of
LOC Obligations, (B) with respect to all amounts prepaid pursuant to Sections
2.7(b)(ii) through (iv), (1) first, to the Term Loan (on a pro rata basis across the
remaining amortization payments set forth in Section 2.2(b), (2) second to
outstanding Swingline Loans (with a corresponding permanent reduction in the
Revolving Committed Amount), (3) third, to the outstanding Revolving Loans (with a
corresponding permanent reduction in the Revolving Committed Amount) and (4) fourth
(after all Revolving Loans have been repaid), to a cash collateral account in
respect of LOC Obligations and (C) with respect to all amounts prepaid pursuant to
Section 2.7(b)(v), (I) with respect to the Excess Cash Flow repayment to be made for
the twelve-month period ended June 30, 2006, 100% of such amount shall be applied to
the amortization payment due hereunder pursuant to Section 2.2(b) on June 30, 2007,
with (x) 50% of the remainder, if any, to be applied to the amortization payment due
hereunder pursuant to Section 2.2(b) on June 30, 2008 and (y) 50% of the remainder
to be applied to the remaining amortization payments due hereunder pursuant to
Section 2.2(b) thereafter on a pro rata basis and (II) with respect to the Excess
Cash Flow prepayment to be made for the twelve-month period ended June 30, 2007 and
each Excess Cash Flow prepayment to be made thereafter, (w) first, 50% of such
amount to be applied to the amortization payment due hereunder pursuant to Section
2.2(b) on June 30, 2008, (x) second, 50% of such amount to be applied to the
remaining amortization payments due hereunder pursuant to Section 2.2(b) thereafter
on a pro rata basis until the Term Loan is paid in full, (y) third, to the
outstanding Revolving Loans, and (z) fourth, to cash collateralize outstanding
letters of credit.

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Within the parameters of the applications set forth above, prepayments shall be
applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct
order of Interest Period maturities. Each Lender shall receive its pro rata share
(except with respect to prepayments of Swingline Loans) of any such prepayment based
on its Revolving Commitment Percentage or Term Loan Commitment Percentage, as
applicable. All prepayments under this Section 2.7(b) shall be subject to Section
2.17 and be accompanied by interest on the principal amount prepaid through the date
of prepayment.

     (c) Hedging Obligations Unaffected. Any repayment or prepayment made pursuant
to this Section 2.7 shall not affect the Borrower’s obligation to continue to make payments
under any Secured Hedging Agreement, which shall remain in full force and effect
notwithstanding such repayment or prepayment, subject to the terms of such Secured Hedging
Agreement.

     Section 2.8 Minimum Principal Amount of Tranches; Lending Offices.

     (a) All borrowings, payments and prepayments in respect of Revolving Loans and the Term
Loan shall be in such amounts and be made pursuant to such elections so that after giving
effect thereto the aggregate principal amount of the Revolving Loans and the Term Loan
comprising any borrowing, payment or prepayment shall be (i) with respect to LIBOR Rate
Loans, $1,000,000 or a whole multiple of $200,000 in excess thereof and (ii) with respect to
Alternate Base Rate Loans, $500,000 or a whole multiple of $100,000 in excess thereof.

     (b) LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and
Alternate Base Rate Loans at its Domestic Lending Office.

     Section 2.9 Default Rate and Payment Dates.

     (a) If all or a portion of the principal amount of any Loan which is a LIBOR Rate Loan shall
not be paid when due or continued as a LIBOR Rate Loan in accordance with the provisions of Section
2.10 (whether at the stated maturity, by acceleration or otherwise), such overdue principal amount
of such Loan shall be converted to an Alternate Base Rate Loan at the end of the Interest Period
applicable thereto.

     (b) If all or a portion of the principal amount of any LIBOR Rate Loan shall not be paid when
due, such overdue amount shall bear interest at a rate per annum which is equal to the rate that
would otherwise be applicable thereto plus 2% until the end of the Interest Period
applicable thereto, and thereafter at a rate per annum which is equal to the Alternate Base Rate
plus the sum of the Applicable Percentage then in effect for Alternate Base Rate Loans and
2% (the “ABR Default Rate”) or (ii) if any interest payable on the principal amount of any
Loan or any fee or other amount, including the principal amount of any Alternate Base Rate Loan,
payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which is equal to the ABR
Default Rate, in each case from the date of such non-payment until such amount is paid in full
(after as well as before judgment). Upon

43

 

the occurrence, and during the continuance, of any other Event of Default hereunder, at the option
of the Required Lenders, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate which is (A) in the case of principal, the rate
that would otherwise be applicable thereto plus 2% or (B) in the case of interest, fees or
other amounts, the ABR Default Rate (after as well as before judgment).

     (c) Interest on each Loan shall be payable in arrears on each Interest Payment Date; provided
that interest accruing pursuant to paragraph (b) of this Section 2.9 shall be payable from time to
time on demand.

     Section 2.10 Conversion Options.

     (a) The Borrower may, in the case of Revolving Loans and the Term Loan, elect from time
to time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by giving the
Administrative Agent at least three Business Days’ prior irrevocable written notice of such
election. A form of Notice of Conversion/Extension (a “Notice of Conversion/Extension”) is
attached as Schedule 2.10. If the date upon which an Alternate Base Rate Loan is to
be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made
on the next succeeding Business Day and during the period from such last day of an Interest
Period to such succeeding Business Day such Loan shall bear interest as if it were an
Alternate Base Rate Loan. All or any part of outstanding Alternate Base Rate Loans may be
converted as provided herein, provided that (i) no Loan may be converted into a
LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (ii)
partial conversions shall be in an aggregate principal amount of (A) in the case of
Alternate Base Rate Loans $500,000 or a whole multiple of $100,000 in excess thereof and (B)
in the case of LIBOR Rate Loans, $1,000,000 or a whole multiple of $200,000 in excess
thereof.

     (b) Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest
Period with respect thereto by compliance by the Borrower with the notice provisions
contained in Section 2.10(a); provided, that no LIBOR Rate Loan may be continued as
such when any Default or Event of Default has occurred and is continuing, in which case such
Loan shall be automatically converted to an Alternate Base Rate Loan at the end of the
applicable Interest Period with respect thereto. If the Borrower shall fail to give timely
notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans
is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to
Alternate Base Rate Loans at the end of the applicable Interest Period with respect thereto.

     Section 2.11 Computation of Interest and Fees.

     (a) Interest payable hereunder with respect to Alternate Base Rate Loans based on the
Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as
applicable) for the actual days elapsed. All other fees, interest and all other amounts
payable hereunder shall be calculated on the basis of a 360 day year for the

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actual days elapsed. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of each determination of a LIBOR Rate on the Business Day of the
determination thereof. Any change in the interest rate on a Loan resulting from a change in
the Alternate Base Rate shall become effective as of the opening of business on the day on
which such change in the Alternate Base Rate shall become effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date
and the amount of each such change.

     (b) Each determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders
in the absence of manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the Borrower a statement showing the computations used by the
Administrative Agent in determining any interest rate.

     (c) It is the intent of the Lenders and the Credit Parties to conform to and contract
in strict compliance with applicable usury law from time to time in effect. All agreements
between the Lenders and the Credit Parties are hereby limited by the provisions of this
paragraph which shall override and control all such agreements, whether now existing or
hereafter arising and whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the maturity of any obligation),
shall the interest taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount permissible
under applicable law. If, from any possible construction of any of the Credit Documents or
any other document, interest would otherwise be payable in excess of the maximum nonusurious
amount, any such construction shall be subject to the provisions of this paragraph and such
interest shall be automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized as interest on the Loans
under applicable law and which would, apart from this provision, be in excess of the maximum
nonusurious amount, an amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal amount owing on the
Loans and not to the payment of interest, or refunded to the Borrower or the other payor
thereof if and to the extent such amount which would have been excessive exceeds such unpaid
principal amount of the Loans. The right to demand payment of the Loans or any other
Indebtedness evidenced by any of the Credit Documents does not include the right to receive
any interest which has not otherwise accrued on the date of such demand, and the Lenders do
not intend to charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout
the full stated term (including any renewal or extension) of this Agreement so that the
amount of interest on account of such Indebtedness does not exceed the maximum nonusurious
amount permitted by applicable law.

45

 

     Section 2.12 Pro Rata Treatment and Payments.

     (a) Each borrowing of Revolving Loans and any reduction of the Revolving Commitments
shall be made pro rata according to the respective Revolving Commitment
Percentages of the Lenders. Each payment on account of any fees pursuant to Sections 2.5(a)
and (b) shall be made pro rata in accordance with the respective amounts due
and owing. Each payment by the Borrower on account of interest on the Revolving Loans and
the Term Loan shall be made pro rata according to the respective amounts due
and owing. Each optional prepayment on account of principal of the Loans shall be applied
in accordance with Section 2.7(a) and each mandatory prepayment on account of principal of
the Loans shall be applied in accordance with Section 2.7(b). All payments (including
prepayments) to be made by the Borrower on account of principal, interest and fees shall be
made without defense, set-off or counterclaim (except as provided in Section 2.18(b)) and
shall be made to the Administrative Agent for the account of the Lenders at the
Administrative Agent’s office specified on the administrative detail reply form delivered by
such Lender to the Administrative Agent in Dollars and in immediately available funds not
later than 2:00 P.M. (Charlotte, North Carolina time) on the date when due. The
Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly
upon receipt in like funds as received. If any payment hereunder (other than payments on
the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a LIBOR Rate Loan becomes due and payable on a day other than
a Business Day, the maturity thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding Business Day.

     (b) Allocation of Payments After Event of Default. Notwithstanding any other
provision of this Credit Agreement to the contrary, after the occurrence and during the
continuance of an Event of Default, all amounts collected or received by the Administrative
Agent or any Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the Collateral shall, upon
written notice to the Borrower by the Administrative Agent (in its discretion or at the
direction of the Required Lenders) that the application thereof shall be made in accordance
with this Section 2.12(b), be paid over or applied as follows:

     FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation reasonable attorneys’ fees) of the Administrative
Agent in connection with enforcing the rights of the Lenders under the Credit
Documents and any protective advances made by the Administrative Agent with respect
to the Collateral under or pursuant to the terms of the Security Documents;

     SECOND, to payment of any fees owed to the Administrative Agent in its capacity
as Administrative Agent;

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     THIRD, to the payment of all reasonable out-of-pocket costs and expenses of
each of the Lenders (including without limitation, reasonable attorneys’ fees of one
counsel for the Lenders, collectively) in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Secured Obligations owing to
such Lender;

     FOURTH, to the payment of (1) all of the Credit Party Obligations consisting of
accrued fees and interest and (2) with respect to any Secured Hedging Agreement, all
fees, premiums and scheduled periodic payments due under such Secured Hedging
Agreement and any interest accrued thereon;

     FIFTH, to the payment of (1) the outstanding principal amount of the Credit
Party Obligations and the payment or cash collateralization of the outstanding LOC
Obligations and (2) with respect to any Secured Hedging Agreement, all breakage,
termination or other payments due under such Secured Hedging Agreement and any
interest accrued thereon;

     SIXTH, to the payment of (1) all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit Documents or
otherwise and (2) with respect to any Secured Hedging Agreement, all other
obligations under such Secured Hedging Agreement, in each case to the extent not
repaid pursuant to clauses “FIRST” through “FIFTH” above; and

     SEVENTH, to the payment of the surplus, if any, to whomever may be lawfully
entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next succeeding
category; (ii) each of the Lenders and Hedging Agreement Providers shall receive an
amount equal to its pro rata share (based on the proportion that the then
outstanding Loans and LOC Obligations held by such Lender or the outstanding
obligations payable to such Hedging Agreement Provider bears to the aggregate then
outstanding Loans, LOC Obligations and obligations payable under all Secured Hedging
Agreements) of amounts available to be applied pursuant to clauses “THIRD”,
“FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent that any amounts
available for distribution pursuant to clause “FIFTH” above are attributable to the
issued but undrawn amount of outstanding Letters of Credit, such amounts shall be
held by the Administrative Agent in a cash collateral account and applied (A) first,
to reimburse the Issuing Lender from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of Credit,
to all other obligations of the types described in clauses “FIFTH” and “SIXTH” above
in the manner provided in this Section 2.12(b). Notwithstanding the foregoing terms
of this Section 2.12(b), only Collateral proceeds and payments under the Guaranty
with respect to

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Secured Hedging Agreements shall be applied to obligations under any Secured Hedging
Agreement.

     Section 2.13 Non-Receipt of Funds by the Administrative Agent.

     (a) Unless the Administrative Agent shall have been notified in writing by a Lender
prior to the date a Loan is to be made by such Lender (which notice shall be effective upon
receipt) that such Lender does not intend to make the proceeds of such Loan available to the
Administrative Agent, the Administrative Agent may assume that such Lender has made such
proceeds available to the Administrative Agent on such date, and the Administrative Agent
may in reliance upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent, the Administrative Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent
will promptly notify the Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made available by
the Administrative Agent to the Borrower to the date such corresponding amount is recovered
by the Administrative Agent at a per annum rate equal to (i) from the Borrower at the
applicable rate for the applicable borrowing pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Effective Rate. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its Commitment hereunder or to prejudice
any rights which the Borrower may have against the Lender as a result of any default by such
Lender hereunder.

     (b) Unless the Administrative Agent shall have been notified in writing by the
Borrower, prior to the date on which any payment is due from it hereunder (which notice
shall be effective upon receipt) that the Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not be required to)
make available to each Lender on such payment date an amount equal to the portion of such
assumed payment to which such Lender is entitled hereunder, and if the Borrower has not in
fact made such payment to the Administrative Agent, such Lender shall, on demand, repay to
the Administrative Agent the amount made available to such Lender. If such amount is repaid
to the Administrative Agent on a date after the date such amount was made available to such
Lender, such Lender shall pay to the Administrative Agent on demand interest on such amount
in respect of each day from the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is recovered by the Administrative Agent at a
per annum rate equal to the Federal Funds Effective Rate.

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     (c) A certificate of the Administrative Agent submitted to the Borrower or any Lender
with respect to any amount owing under this Section 2.13 shall be conclusive in the absence
of manifest error.

     Section 2.14 Inability to Determine Interest Rate.

     Notwithstanding any other provision of this Agreement, if (i) the Administrative Agent shall
reasonably determine (which determination shall be conclusive and binding absent manifest error)
that, by reason of circumstances affecting the relevant market, reasonable and adequate means do
not exist for ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent manifest error)
that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of funding
LIBOR Rate Loans that the Borrower has requested be outstanding as a LIBOR Tranche during such
Interest Period, the Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least two Business Days
prior to the first day of such Interest Period. Unless the Borrower shall have notified the
Administrative Agent upon receipt of such telephone notice that it wishes to rescind or modify its
request regarding such LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate
Loans shall be made as Alternate Base Rate Loans and any Loans that were requested to be converted
into or continued as LIBOR Rate Loans shall remain as or be converted into Alternate Base Rate
Loans. Until any such notice has been withdrawn by the Administrative Agent, no further Loans
shall be made as, continued as, or converted into, LIBOR Rate Loans for the Interest Periods so
affected.

     Section 2.15 Illegality.

     Notwithstanding any other provision of this Agreement, if the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof by the relevant Governmental
Authority to any Lender shall make it unlawful for such Lender or its LIBOR Lending Office to make
or maintain LIBOR Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make such Loans, (a)
such Lender shall promptly notify the Administrative Agent and the Borrower thereof, (b) the
commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such
shall forthwith be suspended until such Lender shall give notice to the Administrative Agent that
the condition or situation which gave rise to the suspension shall no longer exist, and (c) such
Lender’s Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the last day of
the Interest Period for such Loans or within such earlier period as required by law to Alternate
Base Rate Loans. The Borrower hereby agrees promptly to pay any Lender, upon its demand, any
additional amounts necessary to compensate such Lender for actual and direct costs (but not
including anticipated profits) reasonably incurred by such Lender including, but not limited to,
any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or
maintain its LIBOR Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its LIBOR Lending Office) to avoid or to
minimize any

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amounts which may otherwise be payable pursuant to this Section; provided, however,
that such efforts shall not cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material. In determining
such additional amounts pursuant to this Section, each Lender shall act reasonably and in good
faith and will, to the extent the increased costs or reductions in amounts receivable relate to
such Lender’s loans in general and are not specifically attributable to a Loan hereunder, use
averaging and attribution methods which are reasonable and which cover all loans similar to the
Loans made by such Lender whether or not the loan documentation for such other loans permits the
Lender to receive increased costs of the type described in this Section.

     Section 2.16 Requirements of Law.

     (a) If the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:

     (i) shall subject such Lender to any Tax of any kind whatsoever with respect to
any Letter of Credit or any application relating thereto, any LIBOR Rate Loan made
by it, or change the basis of taxation of payments to such Lender in respect thereof
(except, if such Lender is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code), to the extent of withholding taxes that would be
avoided if such Lender provided the required forms under Section 2.18(b));

     (ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of credit
by, or any other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate hereunder; or

     (iii) shall impose on such Lender any other condition;

      and the result of any of the foregoing is to increase the cost to such Lender of making
or maintaining LIBOR Rate Loans or the Letters of Credit or to reduce any amount receivable
hereunder or under any Note, then, in any such case, the Borrower shall promptly pay such

Lender, upon its demand, any additional amounts necessary to compensate such Lender for such
additional cost or reduced amount receivable with respect to its LIBOR Rate Loans or Letters
of Credit. A certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent, to the Borrower shall be
conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office or LIBOR Lending Office,
as the case may be) to avoid or to minimize any amounts which might otherwise be payable
pursuant to this paragraph of this Section; provided, however, that such
efforts shall not cause the

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imposition on such Lender of any additional costs or legal or regulatory burdens reasonably
deemed by such Lender to be material.

     (b) If any Lender shall have reasonably determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or application
thereof or compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force of law)
from any central bank or Governmental Authority made subsequent to the date hereof does or
shall have the effect of reducing the rate of return on such Lender’s or such corporation’s
capital as a consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender’s or such corporation’s policies with respect to
capital adequacy), then from time to time, within fifteen (15) days after demand by such
Lender, the Borrower shall pay to such Lender such additional amount as shall be certified
by such Lender as being required to compensate it for such reduction. Such a certificate as
to any additional amounts payable under this Section submitted by a Lender (which
certificate shall include a description of the basis for the computation), through the
Administrative Agent, to the Borrower shall be conclusive absent manifest error.

     (c) The agreements in this Section 2.16 shall survive the termination of this Agreement
and payment of the Notes and all other amounts payable hereunder.

     Section 2.17 Indemnity.

     The Borrower hereby agrees to indemnify each Lender and to hold such Lender harmless from any
funding loss or expense which such Lender may sustain or incur as a consequence of (a) default by
the Borrower in payment of the principal amount of or interest on any Loan by such Lender in
accordance with the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by the Borrower in
making any prepayment after the Borrower has given a notice in accordance with the terms hereof,
and/or (d) the making by the Borrower of a prepayment of a Loan, or the conversion thereof, on a
day which is not the last day of the Interest Period with respect thereto, in each case including,
but not limited to, any such loss or expense arising from interest or fees payable by such Lender
to lenders of funds obtained by it in order to maintain its Loans hereunder. A certificate as to
any additional amounts payable pursuant to this Section submitted by any Lender, through the
Administrative Agent, to the Borrower (which certificate must be delivered to the Administrative
Agent within thirty days following such default, prepayment or conversion) shall be conclusive in
the absence of manifest error. The agreements in this Section shall survive termination of this
Agreement and payment of the Notes and all other amounts payable hereunder.

     Section 2.18 Taxes.

     (a) All payments made by the Borrower hereunder or under any Note will be, except as
provided in Section 2.18(b), made free and clear of, and without deduction or

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withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any Governmental Authority or
by any political subdivision or taxing authority thereof or therein with respect to such
payments (but excluding any tax imposed on or measured by the net income or profits of a
Lender (including any franchise taxes) pursuant to the laws of the jurisdiction in which it
is organized or the jurisdiction in which the principal office or applicable lending office
of such Lender is located or any subdivision thereof or therein) and all interest, penalties
or similar liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
“Taxes”). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount provided for
herein or in such Note. The Borrower will furnish to the Administrative Agent as soon as
practicable after the date the payment of any Taxes are due pursuant to applicable law
certified copies (to the extent reasonably available and required by law) of tax receipts
evidencing such payment by the Borrower; provided, however, that no
Transferee of any Lender pursuant to Section 9.6 shall be entitled to receive a greater
payment under this Section 2.18(a) than such Lender would have received with respect to the
rights assigned, sold or participated or otherwise transferred, unless such assignment,
participation or transfer shall have been made when the circumstances (including change of
law) giving rise to such payment did not exist or had not yet occurred. The Borrower agrees
to indemnify and hold harmless each Lender, and reimburse such Lender upon its written
request, for the amount of any Taxes so levied or imposed and paid by such Lender.

     (b) Each Lender that is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) agrees to deliver to the Borrower and the Administrative Agent on
or prior to the Closing Date or, in the case of a Lender that is an assignee or transferee
of an interest under this Agreement pursuant to Section 9.6(c) (unless the respective Lender
was already a Lender hereunder immediately prior to such assignment or transfer), on the
date of such assignment or transfer to such Lender, (i) if the Lender is a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN or W-8ECI or W-8IMY (or successor forms)
certifying such Lender’s entitlement to a complete exemption from United States withholding
tax with respect to payments to be made under this Agreement and under any Note, or (ii) if
the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, either
Internal Revenue Service Form W-8BEN or W-8ECI or W-8IMY as set forth in clause (i) above,
or (x) a certificate substantially in the form of Schedule 2.18 (any such
certificate, a “Tax Exemption Certificate”) and (y) two accurate and complete
original signed copies of Internal Revenue Service Form W-8BEN (or successor form)
certifying such Lender’s entitlement to an exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any Note. Each
Lender that is a United States person (as defined in Section 7701(A)(30) of the Code) and
which is not organized as a corporation for U.S. Federal income tax purposes shall deliver
to the Borrower and

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the Administrative Agent on or prior to the Closing Date or, in the case of a Lender that is
an assignee or transferee of an interest under this Agreement pursuant to Section 9.6(c)
(unless the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such Lender, an
Internal Revenue Service Form W-9 certifying such Lender’s entitlement to a complete
exemption from United States back-up withholding on all payments under this Agreement or a
Note. In addition, each Lender agrees that it will deliver upon the Borrower’s request
updated versions of the foregoing, as applicable, whenever the previous certification has
become obsolete or inaccurate in any material respect, together with such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to payments under
this Agreement and any Note. Notwithstanding anything to the contrary contained in Section
2.18(a), but subject to the immediately succeeding sentence, (x) each Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold Taxes imposed
by the United States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any Lender which
is not a United States person (as such term is defined in Section 7701(a)(30) of the Code)
for U.S. Federal income tax purposes to the extent that such Lender has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated pursuant to Section
2.18(a) hereof to gross-up payments to be made to a Lender in respect of Taxes imposed by
the United States if (I) such Lender has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section 2.18(b)(ii)
or (II) in the case of a payment, other than interest, to a Lender described in clause (ii)
above, to the extent that such Forms do not establish a complete exemption from withholding
of such Taxes. Notwithstanding anything to the contrary contained in the preceding sentence
or elsewhere in this Section 2.18, the Borrower agrees to pay additional amounts and to
indemnify each Lender in the manner set forth in Section 2.18(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described in the immediately preceding sentence as a
result of any changes after the Closing Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating to the
deducting or withholding of Taxes.

     (c) Each Lender agrees to use reasonable efforts (including reasonable efforts to
change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or
to minimize any amounts which might otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens deemed by such Lender in its
sole discretion to be material.

     (d) If the Borrower pays any additional amount pursuant to this Section 2.18 with
respect to a Lender, such Lender shall, following its receipt of a written request from the
Borrower to pursue such a refund, use commercially reasonable efforts to obtain a refund of
tax or credit against its tax liabilities on account of such payment; provided that

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such Lender shall have no obligation to use such reasonable efforts if either (i) it is in
an excess foreign tax credit position or (ii) it believes in good faith, in its sole
discretion, that claiming a refund or credit would cause adverse tax consequences to it. In
the event that such Lender receives such a refund or credit, such Lender shall pay to the
Borrower an amount that such Lender reasonably determines is equal to the net tax benefit
obtained by such Lender as a result of such payment by the Borrower, which amount shall be
net of, among other things, any costs and expenses incurred by or on behalf of such Lender
under this subsection (d). In the event that no refund or credit is obtained with respect
to the Borrower’s payments to such Lender pursuant to this Section 2.18, then such Lender
shall upon written request provide a certification that such Lender has not received a
refund or credit for such payments. Nothing contained in this Section 2.18 shall require a
Lender to disclose or detail the basis of its calculation of the amount of any tax benefit
or any other amount or the basis of its determination referred to in the proviso to the
first sentence of this Section 2.18 to the Borrower or any other party. Any and all costs
and expenses incurred by or on behalf of a Lender under this subsection (d) shall be for the
account of the Borrower.

     (e) The agreements in this Section 2.18 shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder.

       Section 2.19 Indemnification; Nature of Issuing Lender’s Duties.

     (a) In addition to its other obligations under Section 2.3, the Borrower hereby agrees
to protect, indemnify, pay and save each Issuing Lender harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys’ fees) (other than for Taxes, which shall be covered by 2.18(a)) that
the Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (i)
the issuance of any Letter of Credit, except to the extent resulting from the gross
negligence, bad faith or willful misconduct of the Issuing Lender or (ii) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions, herein called
“Government Acts”).

     (b) As between the Borrower and the Issuing Lender, the Borrower shall assume all risks
of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof. The
Issuing Lender shall not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or ineffective for any reason;
(iii) failure of the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail,

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cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (vii) any consequences arising from causes beyond the control of the
Issuing Lender, including, without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender’s rights or powers hereunder.

     (c) In furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the Issuing Lender, under or in
connection with any Letter of Credit or the related certificates, if taken or omitted in
good faith, shall not put such Issuing Lender under any resulting liability to the Borrower.
It is the intention of the parties that this Agreement shall be construed and applied to
protect and indemnify the Issuing Lender against any and all risks involved in the issuance
of the Letters of Credit, all of which risks are hereby assumed by the Borrower, including,
without limitation, any and all risks of the acts or omissions, whether rightful or
wrongful, of any Government Authority. The Issuing Lender shall not, in any way, be liable
for any failure by the Issuing Lender or anyone else to pay any drawing under any Letter of
Credit as a result of any Government Acts or any other cause beyond the control of the
Issuing Lender.

     (d) Nothing in this Section 2.19 is intended to limit the reimbursement obligation of
the Borrower contained in Section 2.3 hereof. The obligations of the Borrower under this
Section 2.19 shall survive the termination of this Agreement. No act or omissions of any
current or prior beneficiary of a Letter of Credit shall in any way affect or impair the
rights of the Issuing Lender to enforce any right, power or benefit under this Agreement.

     (e) Notwithstanding anything to the contrary contained in this Section 2.19, the
Borrower shall have no obligation to indemnify the Issuing Lender in respect of any
liability incurred by the Issuing Lender arising out of the gross negligence, bad faith or
willful misconduct of the Issuing Lender (including action not taken by an Issuing Lender),
as determined by a court of competent jurisdiction.

     Section 2.20 Parallel Debt.

     (a) Each Credit Party hereby irrevocably and unconditionally undertakes to pay to the
Administrative Agent amounts equal to any amounts owing by such Credit Party to any Lender
with respect to the Credit Party Obligations as and when those amounts become due for
payment so that the Administrative Agent shall be the obligee of such covenant to pay and
shall be entitled to claim performance thereof in its own name and on behalf of itself and
not only as trustee, agent or representative acting on behalf of the Lenders.

     (b) Each Credit Party and the Administrative Agent acknowledge that the monetary
obligations of each Credit Party to the Administrative Agent under

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Section 2.20(a) are and/or shall be several and are and/or shall be separate and
independent from, and do and/or shall not in any way affect, the corresponding monetary
obligations of such Credit Party to any Lender with respect to the Credit Party Obligations
(such Credit Party’s “Corresponding Debt”) provided that:

     (i) the amounts for which such Credit Party is liable under Section 2.20(a)
(such Credit Party’s “Parallel Debt”) shall be decreased to the extent that
such Credit Party’s Corresponding Debt has been irrevocably paid or (in the case of
any guaranty obligations) discharged;

     (ii) the Corresponding Debt of such Credit Party shall be decreased to the
extent that such Credit Party’s Parallel Debt has been irrevocably paid or (in the
case of guaranty obligations) discharged;

     (iii) the Parallel Debt of any Credit Party shall not exceed the Corresponding
Debt of such Credit Party; and

     (iv) each Credit Party shall have the same defenses against the Parallel Debt
which it has against the Corresponding Debt.

     (c) For purposes of this Section 2.20, the Administrative Agent acts in its own name
and on behalf of itself and not as a trustee, agent or representative of any party hereto,
and any claim made by the Administrative Agent in respect of the Parallel Debt shall not be
held in trust. The security interests granted under the Security Documents to the
Administrative Agent to secure the Parallel Debt is granted to the Administrative Agent in
its capacity as creditor in respect of the Parallel Debt and shall not be held in trust.

     (d) All monies received or recovered by the Administrative Agent pursuant to this
Section 2.20, and all amounts received or recovered by the Administrative Agent from or by
the enforcement of any security interests granted to secure the Parallel Debt, shall be
applied in accordance with Section 2.12.

     (e) Without limiting or affecting the Administrative Agent’s rights against the Credit
Parties (whether under this Section 2.20 or under any other provision of the Credit
Documents), each Credit Party acknowledges that:

     (i) nothing in this Section 2.20 shall impose any obligation on the
Administrative Agent to advance any sum to any Credit Party or otherwise under any
Credit Document in its capacity as Administrative Agent; and

     (ii) for the purpose of any vote taken under any Credit Document, the
Administrative Agent shall not have any participation or commitment in its capacity
as Administrative Agent.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

     To induce the Lenders to enter into this Agreement and to make the Extensions of Credit herein
provided for, the Credit Parties hereby represent and warrant to the Administrative Agent and to
each Lender that:

     Section 3.1 Financial Condition.

     The Borrower has delivered to the Administrative Agent and the Lenders (a) the final due
diligence report as prepared by KPMG, LLP with respect to the Acquired Business of the Sellers and
their Subsidiaries’ historical results for the fiscal years 2002, 2003 and 2004 which are complete
and correct and which present fairly the financial condition of the Acquired Business and its
Subsidiaries as of such dates, (b) preliminary pro forma unaudited balance sheet of the Acquired
Business as of April 30, 2005, (c) pro forma unaudited income statement of the Acquired Business
for the 3 months ended March 31, 2005, and (d) the five-year projections of the Borrower (the
“Projections”) which have been prepared in good faith based upon reasonable assumptions.
The financial statements referred to in subsection (a) above are materially complete and correct
and present fairly the financial condition of the Acquired Business and its Subsidiaries as of such
dates. The financial statements referred to in subsection (b) above present fairly the financial
condition of the Acquired Business and its Subsidiaries as of such dates and, upon delivery of
final unaudited figures within sixty (60) days following the Closing Date, will be materially
complete and correct. All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP principles (excluding footnotes and pro forma
figures) applied consistently throughout the periods involved (except as disclosed therein).

     Section 3.2 No Change.

     Since December 31, 2004 (and after delivery of annual audited financial statements in
accordance Section 5.1(a), since the date of the most recently delivered annual audited financial
statements) there has been no development or event which has had or could reasonably be expected to
have a Material Adverse Effect.

     Section 3.3 Corporate Existence; Compliance with Law.

     Each of the Credit Parties (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, (b) has the requisite power and
authority and the legal right to own and operate all its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified to conduct business and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business requires such
qualification and (d) is in compliance with all Requirements of Law. The jurisdictions in which the
Credit Parties as of the Closing Date are organized and qualified to do business are described on
Schedule 3.3.

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     Section 3.4 Corporate Power; Authorization; Enforceable Obligations.

     Each of the Parent, the Borrower and the other Credit Parties has full power and authority and
the legal right to make, deliver and perform the Credit Documents to which it is party and has
taken all necessary limited liability company or corporate action to authorize the execution,
delivery and performance by it of the Credit Documents to which it is party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings hereunder or with the
execution, delivery or performance of any Credit Document by the Borrower or the other Credit
Parties (other than those which have been obtained or made) or with the validity or enforceability
of any Credit Document against the Borrower or the other Credit Parties (except such filings as are
necessary in connection with the perfection of the Liens created by such Credit Documents). Each
Credit Document to which it is a party has been duly executed and delivered on behalf of the
Borrower or the other Credit Parties, as the case may be. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of the Borrower or the other Credit
Parties, as the case may be, enforceable against the Borrower or such other Credit Party, as the
case may be, in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).

     Section 3.5 No Legal Bar; No Default.

     The execution, delivery and performance of the Credit Documents, the borrowings thereunder and
the use of the proceeds of the Loans will not violate any Requirement of Law or any Contractual
Obligation of the Borrower or any other Credit Party (except those as to which waivers or consents
have been obtained), and will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any Requirement of Law or
Contractual Obligation other than the Liens arising under or contemplated in connection with the
Credit Documents. Neither the Borrower nor any other Credit Party is in default under or with
respect to any of its Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

     Section 3.6 No Material Litigation.

     No litigation, investigation, claim, criminal prosecution, civil investigative demand,
imposition of criminal or civil fines and penalties, or any other proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the Credit Parties,
overtly threatened by or against (a) any Credit Party or any of its Subsidiaries or against any of
its or their respective properties or revenues which, if adversely determined, has or could
reasonably be expected to have a Material Adverse Effect, or (b) with respect to the Credit
Documents or any Loan or any of the transactions contemplated hereby.

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     Section 3.7 Investment Company Act; PUHCA; Etc.

     No Credit Party (a) is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended or (b) is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935. No Credit Party is subject to regulation under the Federal
Power Act or any federal or state statute or regulation limiting its ability to incur the Credit
Parties’ Obligations.

     Section 3.8 Margin Regulations.

     No part of the proceeds of any Loan hereunder will be used directly or indirectly for any
purpose which violates, which would be inconsistent with or which would require any Lender to make
any filing in accordance with, the provisions of Regulation T, U or X of the Board of Governors of
the Federal Reserve System as now and from time to time hereafter in effect. The Credit Parties
(a) are not engaged, principally or as one of its important activities, in the business of
extending credit for the purpose of “purchasing” or “carrying” “margin stock” within the respective
meanings of each of such terms under Regulation U and (b) taken as a group do not own “margin
stock” except as identified in the financial statements referred to in Section 3.1 and the
aggregate value of all “margin stock” owned by the Credit Parties and their Subsidiaries taken as a
group does not exceed 25% of the value of their assets.

     Section 3.9 ERISA.

     Neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to
the date on which this representation is made with respect to any Plan, and each Plan has complied
in all material respects with the applicable provisions of ERISA and the Code. No termination of a
Single Employer Plan has occurred resulting in any liability that has remained underfunded, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period. The present value of
all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which this representation
is made, exceed the value of the assets of such Plan allocable to such accrued benefits by an
amount, as determined in accordance with GAAP, which has or could reasonably be expected to have a
Material Adverse Effect. Neither any Credit Party nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a Multiemployer Plan.

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     Section 3.10 Environmental Matters.

     (a) The facilities and properties owned, leased or operated by the Credit Parties or
any of their Subsidiaries (the “Properties”) do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute a violation of, or
(ii) could give rise to liability under, any Environmental Law, either of which could
reasonably be expected to have a Material Adverse Effect.

     (b) Except to an extent that could not reasonably be expected to have a Material
Adverse Effect, the Properties and all operations of the Credit Parties and/or their
Subsidiaries at the Properties are in compliance, and have in the last five (5) years been
in compliance, in all material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any Environmental Law
with respect to the Properties or the business operated by the Credit Parties or any of
their Subsidiaries (the “Business”) which could reasonably be expected to have a
Material Adverse Effect.

     (c) No Credit Party has received any written or actual notice of violation, alleged
violation, non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or the Business
which could reasonably be expected to have a Material Adverse Effect, nor do the Credit
Parties or any of their Subsidiaries have knowledge or reason to believe that any such
notice will be received or is being threatened.

     (d) Materials of Environmental Concern have not been transported or disposed of from
the Properties in violation of, or in a manner or to a location which could give rise to
liability under any Environmental Law which could reasonably be expected to have a Material
Adverse Effect, nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation of, or in a manner
that could give rise to liability under, any applicable Environmental Law which could
reasonably be expected to have a Material Adverse Effect.

     (e) No judicial proceeding or governmental or administrative action is pending or, to
the knowledge of the Credit Parties, overtly threatened, under any Environmental Law to
which any Credit Party or any Subsidiary is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the Properties or the
Business, in either case, which could reasonably be expected to have a Material Adverse
Effect.

     (f) There has been no release or threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the operations of any
Credit Party or any Subsidiary in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner

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that could give rise to any liability under Environmental Laws which could reasonably be
expected to have a Material Adverse Effect.

     Section 3.11 Use of Proceeds.

     The proceeds of the Extensions of Credit shall be used by the Borrower solely to (i) finance,
in part, the Acquisition, (ii) refinance certain existing indebtedness of the Borrower, including,
without limitation, indebtedness of the Borrower owed to the Parent, (iii) pay fees and expenses
owing in connection with this Credit Agreement and the Acquisition and (iv) provide for working
capital, capital expenditures in the ordinary course of business and other general corporate
purposes of the Borrower and its Subsidiaries.

     Section 3.12 Subsidiaries.

     Set forth on Schedule 3.12 is a complete and accurate list of all Subsidiaries of the
Credit Parties as of the Closing Date. As of the Closing Date, the information on the attached
Schedule includes, for each Subsidiary of a Credit Party, the state of incorporation or
organization; the authorized shares of each class of Capital Stock or other equity interests; the
number of shares of each class of Capital Stock or other equity interests outstanding; the name of
each equity owner of such Credit Party; the percentage of outstanding shares held by each such
equity owner; and the number and effect, if exercised, of all outstanding options, warrants, rights
of conversion or purchase and similar rights. The outstanding Capital Stock and other equity
interests of all such Subsidiaries is validly issued, fully paid and non-assessable and is owned,
free and clear of all Liens (other than those arising under or contemplated in connection with the
Credit Documents).

     Section 3.13 Ownership.

     Each Credit Party and its Subsidiaries is the owner of, and has good and marketable title to,
or a leasehold interest in or right to use, all of its respective material assets, except as may be
permitted pursuant Section 6.12 hereof, and none of such assets is subject to any Lien other than
Permitted Liens.

     Section 3.14 Indebtedness.

     Except as otherwise permitted under Section 6.1, the Credit Parties and their Subsidiaries
have no Indebtedness.

     Section 3.15 Taxes.

     Each of the Credit Parties and its Subsidiaries has filed, or caused to be filed, all income
tax returns (whether federal, state, local, foreign or otherwise) and all other material tax
returns required to be filed and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing
by it, except for such taxes (i) which are not yet delinquent or (ii) that are being contested in
good faith and by proper proceedings, and against which adequate reserves are being maintained in

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accordance with GAAP. Neither any of the Credit Parties nor any of its Subsidiaries are aware as
of the Closing Date of any proposed tax assessments against it or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.

     Section 3.16 Intellectual Property.

     Each of the Credit Parties and their Subsidiaries owns, or has the legal right to use, all
Intellectual Property, tradenames, technology, know-how and processes necessary for each of them to
conduct its business in substantially the same manner as currently conducted. Set forth on
Schedule 3.16 is a list of all Intellectual Property owned by each of the Credit Parties
and their Subsidiaries or that the Credit Parties or any of their Subsidiaries has the right to
use, other than generic or “off the shelf” intellectual property. Except as provided on
Schedule 3.16, no claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor do the Credit Parties or any of their Subsidiaries know of any such
claim, and, to the knowledge of the Credit Parties and their Subsidiaries, the use of such
Intellectual Property by the Credit Parties or any of their Subsidiaries does not infringe on the
rights of any Person in any material respect. The Borrower may update Schedule 3.16 from
time to time to add new Intellectual Property by providing a replacement Schedule 3.16 to
the Administrative Agent.

     Section 3.17 Solvency.

     After giving effect to the Transactions, the fair saleable value of each Credit Party’s
assets, measured on a going concern basis, exceeds all of its probable liabilities, including those
to be incurred pursuant to this Credit Agreement. After giving effect to the Transactions, none of
the Credit Parties (a) has unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after giving effect to
the Transactions, debts beyond its ability to pay such debts as they become due. In executing the
Credit Documents and consummating the Transactions, none of the Credit Parties intends to hinder,
delay or defraud either present or future creditors or other Persons to which one or more of the
Credit Parties is or will become indebted.

     Section 3.18 Investments.

     All Investments of each of the Credit Parties and its Subsidiaries are Permitted Investments.

     Section 3.19 Location of Collateral.

     As of the Closing Date, set forth on Schedule 3.19(a) is a list of the Properties of
the Credit Parties and their Subsidiaries with street address, county and state. As of the Closing
Date, set forth on Schedule 3.19(b) is a list of all locations where any tangible personal
property of the Credit Parties and their Subsidiaries is located, including county and state where
located. Set forth on Schedule 3.19(c) is the chief executive office and principal place
of business of each of the Credit Parties and their Subsidiaries (as of the Closing Date) and the
State of incorporation or organization of each of the Credit Parties and their Subsidiaries.
Schedule 3.19(a), 3.19(b)

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and 3.19(c) may be updated from time to time by the Borrower to include new properties or
locations by giving written notice thereof to the Administrative Agent.

     Section 3.20 No Burdensome Restrictions.

     None of the Credit Parties or any of its Subsidiaries is a party to any agreement or
instrument or subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

     Section 3.21 Brokers’ Fees.

     None of the Credit Parties or any of its Subsidiaries has any obligation to any Person in
respect of any finder’s, broker’s, investment banking or other similar fee in connection with any
of the transactions contemplated under the Credit Documents other than the fees set forth on
Schedule 3.21.

     Section 3.22 Labor Matters.

     As of the Closing Date, there are no collective bargaining agreements or Multiemployer Plans
covering the employees of any of the Credit Parties or any of its Subsidiaries, other than as set
forth in Schedule 3.22 hereto, and none of the Credit Parties or any of its Subsidiaries
(i) has suffered any material strikes, walkouts, work stoppages or other material labor difficulty
within the last three years, other than as set forth in Schedule 3.22 hereto or (ii) has
knowledge of any potential or pending strike, walkout or work stoppage. As of the Closing Date,
other than as set forth on Schedule 3.22, no material unfair labor practice complaint is
pending against any Credit Party or any of its Subsidiaries or, to the best knowledge of the Credit
Parties, before any Governmental Authority.

     Section 3.23 Security Documents.

     The Security Documents create valid security interests in, and Liens on, the Collateral
purported to be covered thereby. Except as set forth in the Security Documents, such security
interests and Liens are currently (or will be, upon (a) the filing of appropriate financing
statements with the Secretary of State of the state of incorporation for each Credit Party, the
filing of appropriate assignments or notices with the United States Patent and Trademark Office and
the United States Copyright Office, and the recordation of the applicable Mortgage Instruments, in
each case in favor of the Administrative Agent, on behalf of the Lenders, and (b) the
Administrative Agent obtaining Control (as defined in the Security Agreement) over those items of
Collateral in which a security interest is perfected through Control) perfected security interests
and Liens, prior to all other Liens other than Permitted Liens.

     Section 3.24 Accuracy and Completeness of Information.

     All factual information heretofore, contemporaneously or hereafter furnished by or on behalf
of any Credit Party or any of its Subsidiaries in writing to the Administrative Agent or any

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Lender for purposes of or in connection with this Agreement or any other Credit Document, or
any transaction contemplated hereby or thereby (other than projections), is or will be (and, solely
with respect to any such information furnished on behalf of the Borrower or any of its Subsidiaries
by a third party, to the best knowledge of the Borrower after due inquiry are and will be) true and
accurate in all material respects and not incomplete by omitting to state any material fact
necessary to make such information not misleading in any material respect at such time in light of
the circumstances under which such information was provided. There is no fact now known to the
Borrower, any other Credit Party or any of their Subsidiaries which has, or could reasonably be
expected to have, a Material Adverse Effect which fact has not been set forth herein, in the
financial statements of the Borrower and its Subsidiaries furnished to the Administrative Agent
and/or the Lenders, or in any certificate, opinion or other written statement made or furnished by
any Credit Party to the Administrative Agent and/or the Lenders.

     Section 3.25 Consummation of Acquisition; Representations and Warranties from Other
Documents.

     The Acquisition and related transactions have been consummated substantially in accordance
with the terms of the Acquisition Documents. As of the Closing Date, the Acquisition Documents
have not been altered, amended or otherwise modified or supplemented in any material respect or any
material condition thereof waived without the prior written consent of the Administrative Agent.
Each of the representations and warranties made in the Acquisition Documents by the Borrower and
its Subsidiaries or, to the best knowledge of the Borrower, made by any third party is true and
correct, except for any representation or warranty therein the failure of which to be true and
correct, does not have or could not reasonably be expected to have a Material Adverse Effect.

     Section 3.26 Material Contracts.

     Schedule 3.26 sets forth a true and correct and complete list of all Material
Contracts in effect as of the Closing Date. All of the Material Contracts are in full force and
effect and no material defaults by the Borrower or any Subsidiary or, to the best knowledge of the
Borrower, by any third party, currently exist thereunder.

     Section 3.27 Insurance.

     The present insurance coverage of the Credit Parties and their Subsidiaries is outlined as to
carrier, policy number, expiration date, type and amount on Schedule 3.27 and such
insurance coverage complies the requirements set forth in Section 5.5(b).

     Section 3.28 Other Agreements.

     No Credit Party is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument to which any Credit
Party is a party, which default has or could reasonably be expected to have a Material Adverse
Effect.

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     Section 3.29 Capital Structure.

     Schedule 3.29 sets forth the true and correct and complete list of all of the members
of the Borrower as of the Closing Date, complete with each member’s Capital Stock ownership.

     Section 3.30 Anti-Terrorism Laws.

     Neither the Parent, any Credit Party nor any of their respective Subsidiaries is an “enemy” or
an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the
United States of America (50 U.S.C. App. §§ 1 et seq.), as amended. Neither any Credit Party nor
any of its Subsidiaries is in violation of (a) the Trading with the Enemy Act, as amended, (b) any
of the foreign assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto
or (c) the Patriot Act (as defined in Section 9.18. None of the Credit Parties (i) is a blocked
person described in section 1 of the Anti-Terrorism Order or (ii) to the best of its knowledge,
engages in any dealings or transactions, or is otherwise associated, with any such blocked person.

     Section 3.31 Compliance with OFAC Rules and Regulations.

     None of the Parent, the Borrower, any Subsidiary of the Borrower or any Affiliate of the
Borrower or any Guarantor (i) is a Sanctioned Person, (ii) has more than 15% of its assets in
Sanctioned Countries, or (iii) derives more than 15% of its operating income from investments in,
or transactions with Sanctioned Persons or Sanctioned Countries. No part of the proceeds of any
Extension of Credit hereunder will be used directly or indirectly to fund any operations in,
finance any investments or activities in or make any payments to, a Sanctioned Person or a
Sanctioned Country.

     Section 3.32 Deposit Accounts.

     Schedule 6.15 sets forth a true and correct and complete list of all of the checking,
savings and other accounts of each of the Credit Parties as of the Closing Date.

     Section 3.33 Rebate Payments.

     The total Dollar Amount of the Rebate payments as of the Closing Date does not exceed
$47,000,000.

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ARTICLE IV

CONDITIONS PRECEDENT

     Section 4.1 Conditions to Closing Date and Initial Extensions of Credit.

     This Agreement shall become effective upon, and the obligation of each Lender to make the
initial Revolving Loans, the Swingline Loans and the Term Loan on the Closing Date is subject to,
the satisfaction of the following conditions precedent:

     (a) Execution of Agreement. The Administrative Agent shall have received (i)
counterparts of this Credit Agreement, executed by a duly authorized officer of each party
hereto, (ii) for the account of each Lender with a Revolving Commitment requesting a
promissory note, a Revolving Note, (iii) for the account of each Lender with a Term Loan
Commitment requesting a promissory note, a Term Loan Note, (iv) for the account of the
Swingline Lender, the Swingline Note, (v) counterparts of the Security Agreement, the Pledge
Agreement, the Cash Collateral Control Agreement and each Mortgage Instrument, and (vi)
counterparts of any other Credit Document, in each case conforming to the requirements of
this Credit Agreement and executed by a duly authorized officer of each party thereto, and
in each case in form and substance satisfactory to the Lenders.

     (b) Authority Documents. The Administrative Agent shall have received the
following:

     (i) Articles of Incorporation/Charter Documents. Copies of the
articles of incorporation or other charter documents, as applicable, of each Credit
Party certified to be true and complete as of a recent date by the appropriate
Governmental Authority of the state of its organization.

     (ii) Resolutions. Copies of resolutions of the board of directors of
each Credit Party approving and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of such Credit Party (pursuant to a secretary’s
certificate in substantially the form of Schedule 4.1-1 attached hereto) as
of the Closing Date to be true and correct and in force and effect as of such date.

     (iii) Bylaws/Operating Agreement. A copy of the bylaws or comparable
operating agreement of each Credit Party certified by a secretary or assistant
secretary of such Credit Party (pursuant to a secretary’s certificate in
substantially the form of Schedule 4.1-1 attached hereto) as of the Closing
Date to be true and correct and in force and effect as of such date.

     (iv) Good Standing. Copies of certificates of good standing, existence
or its equivalent with respect to the each Credit Party certified as of a recent
date by the appropriate Governmental Authorities of the state of incorporation or

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organization and each other state in which the failure to so qualify and be in good
standing could reasonably be expected to have a Material Adverse Effect on the
business or operations of the Credit Parties and their Subsidiaries in such state.

     (v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary (pursuant to a secretary’s
certificate in substantially the form of Schedule 4.1-1 attached hereto) to
be true and correct as of the Closing Date.

     (c) Legal Opinions of Counsel. The Administrative Agent shall have received
opinions of legal counsel (including local counsel to the extent required by the
Administrative Agent) for the Credit Parties, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, in form and substance reasonably acceptable to the
Administrative Agent.

     (d) Reports. The Administrative Agent shall have received a copy of each
material opinion, report, agreement, and other document required to be delivered pursuant to
the Acquisition Documents in connection with the Acquisition and related transactions (and
the Borrower will use reasonable efforts to obtain evidence that the Administrative Agent
and the Lenders have been authorized to rely on each such opinion), all in form and
substance reasonably satisfactory to the Administrative Agent.

     (e) Personal Property Collateral. The Administrative Agent shall have
received, in form and substance reasonably satisfactory to the Administrative Agent:

     (i) searches of Uniform Commercial Code filings in the jurisdiction of the
chief executive office of each Credit Party, the State of incorporation or
organization of each Credit Party and each jurisdiction where any Collateral is
located or where a filing would need to be made in order to perfect the
Administrative Agent’s security interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no Liens exist other than
Permitted Liens;

     (ii) UCC financing statements for each appropriate jurisdiction as is
necessary, in the Administrative Agents’ reasonable discretion, to perfect the
Administrative Agent’s security interest in the Collateral;

     (iii) duly executed consents as are necessary, in the Administrative Agent’s
reasonable discretion, to perfect the Lenders’ security interest in the Collateral;

     (iv) in the case of any warehouse, plant or other real property that is leased
by a Credit Party and is material to the Credit Parties’ business or at which
material assets are located, to the extent commercially reasonable in relation to
the value of property or assets relating thereto, such estoppel letters, consents
and waivers from the landlords on such real property as may be reasonably required

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by the Administrative Agent (it being agreed that landlord waivers shall not be
required if the Borrower has used its best efforts, but failed, to obtain such
landlord waivers prior to the Closing Date); and

     (v) original stock certificates or other certificates evidencing the Capital
Stock pledged pursuant to the Pledge Agreement, together with an undated stock power
for each such certificate duly executed in blank by the registered owner thereof.

     (f) Real Property Collateral. The Administrative Agent shall have received, in
form and substance reasonably satisfactory to the Administrative Agent:

     (i) fully executed and notarized mortgages, deeds of trust or deeds to secure
debt (each, as the same may be amended, modified, restated or supplemented from time
to time, a “Mortgage Instrument” and collectively the “Mortgage
Instruments”) encumbering the fee interest in the properties listed in
Schedule 3.19(a) as properties owned by the Credit Parties and, to the
extent required by the Administrative Agent, subject to the terms of the subject
leases and consent of the respective landlords thereto, the leasehold interest in
the properties listed in Schedule 3.19(a) as properties that are warehouses,
plants or other real properties material to the conduct of the Credit Parties’
business and are leased by the Credit Parties (each a “Mortgaged Property”
and collectively the “Mortgaged Properties”);

     (ii) a title report in respect of each of the Mortgaged Properties;

     (iii) with respect to each Mortgaged Property, an ALTA mortgagee title
insurance policies issued by a title insurance company (the “Title Insurance
Company”) selected by the Administrative Agent (the “Mortgage
Policies”), in amounts satisfactory to the Administrative Agent, assuring the
Administrative Agent that each of the Mortgage Instruments creates a valid and
enforceable first priority mortgage lien on the applicable Mortgaged Property, free
and clear of all defects and encumbrances except Permitted Liens, which Mortgage
Policies shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall provide for affirmative insurance and such
reinsurance as the Administrative Agent may reasonably request, all of the foregoing
in form and substance reasonably satisfactory to the Administrative Agent;

     (iv) evidence as to (A) whether any Mortgaged Property is in an area designated
by the Federal Emergency Management Agency as having special flood or mud slide
hazards (a “Flood Hazard Property”) and (B) if any Mortgaged Property is a
Flood Hazard Property, (1) whether the community in which such Mortgaged Property is
located is participating in the National Flood Insurance Program, (2) the applicable
Credit Party’s written acknowledgment of receipt of written notification from the
Administrative Agent (y) as to the fact that such Mortgaged Property is a Flood
Hazard Property and (z) as to whether the

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community in which each such Flood Hazard Property is located is participating in
the National Flood Insurance Program and (3) copies of insurance policies or
certificates of insurance of the Credit Parties and their Subsidiaries evidencing
flood insurance reasonably satisfactory to the Administrative Agent and naming the
Administrative Agent as loss payee on behalf of the Lenders;

     (v) maps or plats of an as-built survey of the sites of the material Mortgaged
Properties certified to the Administrative Agent and the Title Insurance Company in
a manner reasonably satisfactory to them, dated a date satisfactory to each of the
Administrative Agent and the Title Insurance Company by an independent professional
licensed land surveyor reasonably satisfactory to each of the Administrative Agent
and the Title Insurance Company, which maps or plats and the surveys on which they
are based shall be sufficient to delete any standard printed survey exception
contained in the applicable title policy and be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and adopted
by the American Land Title Association and the American Congress on Surveying and
Mapping in 1992, and, without limiting the generality of the foregoing, there shall
be surveyed and shown on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and other improvements and
the established building setback lines; (B) the lines of streets abutting the sites
and width thereof; (C) all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances affecting the
site, whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining property by
the building structures and improvements on the sites; and (F) if the site is
described as being on a filed map, a legend relating the survey to said map;

     (vi) satisfactory environmental reviews of all manufacturing facilities and all
other material real property in the United States owned by the Borrower or any of
its Domestic Subsidiaries or by the Acquired Business, including but not limited to
Phase I environmental assessments, together with reliance letters in favor of the
Lenders;

     (vii) opinions of counsel to the Credit Parties for each jurisdiction in which
the Mortgaged Properties are located; and

     (viii) to the extent available, zoning letters from each municipality or other
Governmental Authority for each jurisdiction in which the Mortgaged Properties are
located.

     (g) Insurance. The Administrative Agent shall have received a summary report
regarding the Borrower’s insurance status and coverage, with the scope and results of such
report to be reasonably acceptable to the Administrative Agent. The Administrative Agent
shall have received certificates of insurance evidencing liability

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and casualty insurance meeting the requirements set forth herein or in the Security
Documents and business interruption insurance satisfactory to the Administrative Agent. The
Administrative Agent shall be named as loss payee or mortgagee, as its interest may appear,
and/or additional insured with respect to any such insurance providing coverage in respect
of any Collateral, and each provider of any such insurance shall agree, by endorsement upon
the policy or policies issued by it or by independent instruments furnished to the
Administrative Agent, that it will give the Administrative Agent thirty (30) days prior
written notice before any such policy or policies shall be altered or canceled.

     (h) Fees. The Administrative Agent and the Lenders shall have received all
fees, if any, owing pursuant to the Fee Letter and Section 2.5.

     (i) Litigation. There shall not exist any pending or overtly threatened
litigation, investigation, bankruptcy or insolvency, injunction, order or claim affecting or
relating to any Credit Party or any of its Subsidiaries, the Acquired Business, this
Agreement and the other Credit Documents or the Acquisition, that has not been settled,
dismissed, vacated, discharged or terminated prior to the Closing Date which could
reasonably be expected to have a Material Adverse Effect.

     (j) Solvency Certificate. The Administrative Agent shall have received an
officer’s certificate executed by the chief financial officer of the Borrower as to the
financial condition, solvency and related matters of each of the Borrower and the Guarantors
in each case after giving effect to the Acquisition and the initial borrowings under the
Credit Documents, in substantially the form of Schedule 4.1-2 hereto.

     (k) Account Designation Letter. The Administrative Agent shall have received
the executed Account Designation Letter in the form of Schedule 1.1-1 hereto.

     (l) Notice of Borrowing. The Administrative Agent shall have received a Notice
of Borrowing with respect to the Revolving Loans to be made on the Closing Date.

     (m) Corporate Structure. The number of shares of each class of Capital Stock
issued and outstanding and the ownership thereof of the Credit Parties and their
Subsidiaries as of the Closing Date (after giving effect to the Acquisition) shall be as
described in Schedule 3.12 and Schedule 3.29, and shall otherwise be
reasonably satisfactory to the Administrative Agent. The Administrative Agent and the
Lenders shall be reasonably satisfied with the management of the Credit Parties and their
Subsidiaries and of the Acquired Business and with all legal, tax, accounting, business and
other matters relating to the Acquisition or to the Credit Parties and their Subsidiaries or
the Acquired Business, in each case after giving effect to the Acquisition.

     (n) Acquisition Documents. The Administrative Agent shall have reviewed and
approved in their reasonable discretion certified copies of all of the Acquisition Documents
and there shall not have been any material modification, amendment, supplement or waiver

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to the Acquisition Documents without the prior written consent of the Administrative Agent,
including, but not limited to, any modification, amendment, supplement or waiver relating to
the amount or type of consideration to be paid in connection with the Acquisition and the
contents of all disclosure schedules and exhibits, and the Acquisition shall have been
consummated in accordance with the terms of the Acquisition Documents (without waiver of any
material conditions precedent to the obligations of any party thereto) for an aggregate
purchase price not exceeding $129,500,000 (including fees and expenses payable in connection
therewith and approximately $47,000,000 in aggregate Rebate Payments).

     (o) Acquired Business Financials; Industry Report. The Administrative Agent
shall have received (i) the financial information described in Section 3.1 and an industry
report prepared by Understanding and Solutions, all of which shall be in form and substance
satisfactory to the Administrative Agent.

     (p) Consents. The Administrative Agent shall have received evidence that all
governmental, shareholder, board of director and material third party consents and approvals
necessary in connection with the financings and other transactions contemplated hereby
(including the Acquisition) have been obtained and all applicable waiting periods have
expired without any action being taken by any authority that could restrain, prevent or
impose any material adverse conditions on such transactions or that could seek or threaten
any of such transactions.

     (q) Compliance with Laws. The financings and other transactions contemplated
hereby shall be in compliance in all material respects with all applicable laws and
regulations (including all applicable securities and banking laws, rules and regulations).

     (r) Bankruptcy. There shall be no bankruptcy or insolvency proceedings with
respect to any Credit Party or any of its Subsidiaries.

     (s) Material Adverse Effect. No material adverse change shall have occurred
since December 31, 2004 in the business, properties, prospects, operations, regulatory
environment or condition (financial or otherwise) of the Credit Parties and their
Subsidiaries taken as a whole. There shall have been no event and there shall exist no
condition or state of facts that could reasonably be expected to have a Material Adverse
Effect.

     (t) [Intentionally Omitted].

     (u) Adjusted Leverage Ratio. After giving effect to the Acquisition and the
closing of this Agreement the ratio of Funded Debt to Consolidated EBITDA (as reasonably
determined by the Administrative Agent) of the Credit Parties and their Subsidiaries and the
Acquired Business shall not exceed 3.30 to 1.0 as of the Closing Date.

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     (v) Minimum Consolidated EBITDA. The Administrative Agent shall have received
evidence reasonably satisfactory thereto provided by the Borrower that Consolidated EBITDA
is not less than $29,000,000.

     (w) Cash Collateral. The Administrative Agent shall have received the Cash
Collateral in an amount and in the manner set forth in the Cash Collateral Account
Agreement.

     (x) Financial Statements. The Administrative Agent and the Lenders shall have
received copies of the financial statements and Projections referred to in Section 3.1
hereof and such financial statements and Projections shall be in form and substance
reasonably satisfactory to the Administrative Agent.

     (y) Due Diligence. The Administrative Agent shall have completed in form and
scope satisfactory thereto its business, legal and environmental due diligence on the
Borrower, the Acquired Business and their respective subsidiaries.

     (z) Termination of Existing Indebtedness. All existing Indebtedness for
borrowed money of the Credit Parties and their Subsidiaries and the Acquired Business (other
than the Indebtedness listed on Schedule 6.1(b)) shall have been repaid in full and
terminated and all Liens and guarantees relating thereto shall have been terminated.

     (aa) Officer’s Certificates. The Administrative Agent shall have received a
certificate executed by a Responsible Officer of the Borrower as of the Closing Date stating
that (i) no action, suit, investigation or proceeding is pending or, to the knowledge of any
Credit Party, threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Credit Party or the Acquisition or any other
transaction contemplated by the Credit Documents and the Acquisition Documents, if such
action, suit, investigation or proceeding could reasonably be expected to have a Material
Adverse Effect and (ii) immediately after giving effect to this Credit Agreement (including
the initial Extensions of Credit hereunder), the other Credit Documents, the Acquisition and
the Acquisition Documents and all the transactions contemplated therein or thereby to occur
on such date, (A) no Default or Event of Default exists, (B) all representations and
warranties contained herein and in the other Credit Documents are true and correct in all
material respects and (C) the Credit Parties are in pro forma compliance with each of the
initial financial covenants set forth in Section 5.9 as of March 31, 2005.

     (bb) Patriot Act Certificate. The Administrative Agent shall have received a
certificate satisfactory thereto, for benefit of itself and the Lenders, provided by the
Borrower that sets forth information required by the Patriot Act including, without
limitation, the identity of the Borrower, the name and address of the Borrower and other
information that will allow the Administrative Agent or any Lender, as applicable, to
identify such Borrower in accordance with the Patriot Act.

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     (cc) Additional Matters. All other documents and legal matters in connection
with the transactions contemplated by this Agreement shall be reasonably satisfactory in
form and substance to the Administrative Agent and its counsel.

     Section 4.2 Conditions to All Extensions of Credit.

     The obligation of each Lender to make any Extension of Credit hereunder is subject to the
satisfaction of the following conditions precedent on the date of making such Extension of Credit:

     (a) Representations and Warranties. The representations and warranties made by
the Credit Parties herein, in the Security Documents or which are contained in any
certificate furnished at any time under or in connection herewith shall be true and correct
on and as of the date of such Extension of Credit as if made on and as of such date, except
to the extent such representations and warranties are expressly made as of a specified date,
in which event such representations and warranties shall be true and correct as of such
specified date.

     (b) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Extension of Credit to
be made on such date unless such Default or Event of Default shall have been waived in
accordance with this Agreement.

     (c) Compliance with Commitments. Immediately after giving effect to the making
of any such Extension of Credit (and the application of the proceeds thereof and any
repayments or reimbursements being made contemporaneously therewith), (i) the sum of
outstanding Revolving Loans plus outstanding Swingline Loans plus LOC
Obligations shall not exceed the Aggregate Revolving Committed Amount, (ii) the LOC
Obligations shall not exceed the LOC Committed Amount and (iii) the Swingline Loans shall
not exceed the Swingline Committed Amount.

     (d) Additional Conditions to Extensions of Credit. If such Extension of Credit
is made pursuant to Sections 2.1, 2.2, 2.3 or 2.4, all conditions set forth in such Section
shall have been satisfied.

     Each request for an Extension of Credit and each acceptance by the Borrower of any such
Extension of Credit shall be deemed to constitute a representation and warranty by the Borrower as
of the date of such Extension of Credit that the applicable conditions in paragraphs (a) through
(d) of this Section have been satisfied.

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ARTICLE V

AFFIRMATIVE COVENANTS

     The Credit Parties hereby covenant and agree that on the Closing Date, and thereafter for so
long as this Agreement is in effect and until the Commitments have terminated, no Note remains
outstanding and unpaid and the Credit Party Obligations (other than contingent indemnity
obligations that expressly survive the termination of this Agreement), together with interest,
Commitment Fees and all other amounts owing to the Administrative Agent or any Lender hereunder,
are paid in full, the Credit Parties shall, and shall cause each of their Subsidiaries, to:

     Section 5.1 Financial Statements.

     Furnish to the Administrative Agent (which will furnish to each of the Lenders):

     (a) Annual Financial Statements. As soon as available, but in any event within
ninety (90) days after the end of each fiscal year of the Borrower, a copy of the
Consolidated and consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year and the related Consolidated and
consolidating statements of income and retained earnings and of cash flows of the Borrower
and its consolidated Subsidiaries for such year, audited (with respect to such Consolidated
balance sheet and statements only) by Ernst & Young, KPMG, LLP or another firm of
independent certified public accountants reasonably acceptable to the Administrative Agent,
setting forth in each case in comparative form the figures for the preceding fiscal year
(after the fiscal year ending December 31, 2005), reported on without a “going concern” or
like qualification or exception, or qualification indicating that the scope of the audit was
inadequate to permit such independent certified public accountants to certify such financial
statements without such qualification; and

     (b) Quarterly Financial Statements. As soon as available and in any event
within sixty (60) days after the end of each of the first three fiscal quarters of the
Borrower, a company-prepared Consolidated and consolidating balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such period and related company-prepared
Consolidated and consolidating statements of income and retained earnings and of cash flows
for the Borrower and its consolidated Subsidiaries for such quarterly period and for the
portion of the fiscal year ending with such period, in each case setting forth in
comparative form the figures for the corresponding period or periods of the preceding fiscal
year (subject to normal recurring year-end audit adjustments); and

     (c) Monthly Financial Statements. As soon as available and in any event within
forty-five (45) days after the end of each month of the Borrower (other than at the end of a
fiscal quarter, in which case sixty (60) days after the end thereof), a company-prepared
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end
of such period and related company-prepared consolidated statements of income for the
Borrower and its consolidated Subsidiaries for such monthly period and

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for the portion of the fiscal year ending with such period, in each case setting forth in
comparative form consolidated figures for the corresponding period or periods of the
preceding fiscal year (subject to normal recurring year-end audit adjustments);

     (d) Annual Financial Plans. As soon as practicable and in any event within
forty-five (45) days after the end of each fiscal year, a Consolidated and consolidating
budget and cash flow projections prepared on a quarterly basis of the Borrower and its
Subsidiaries for such fiscal year, in form and detail reasonably acceptable to the
Administrative Agent, such budget to be prepared by the Borrower in a manner consistent with
GAAP and to include an operating and capital budget. Such budget shall be accompanied by a
certificate of the chief financial officer of the Borrower to the effect that the budget and
other financial data are based on reasonable estimates and assumptions, all of which are
fair in light of the conditions which existed at the time the budget was made, have been
prepared on the basis of the assumptions stated therein, and reflect, as of the time so
furnished, the reasonable estimate of the Borrower and its Subsidiaries of the budgeted
results of the operations and other information budgeted therein (it being understood that
the projections contained in such budget and other financial data are subject to significant
uncertainties and contingencies, many of which are beyond the control of the Borrower and
its Subsidiaries and that no assurance is given by the Borrower and its Subsidiaries that
such projections will be realized);

     (e) June Financials. As soon as available and in any event within seventy-five
(75) days after the end of each four fiscal quarter period of the Borrower ending June 30, a
company-prepared Consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such period and related company-prepared
Consolidated and consolidating statements of income and retained earnings and of cash flows
for the Borrower and its consolidated Subsidiaries for such period, in each case setting
forth in comparative form the figures for the corresponding period or periods of the
preceding fiscal year (subject to normal recurring year-end audit adjustments);

all such financial statements to fairly present in all material respects the financial condition
and results from operations of the entities and for the periods specified and to be prepared in
reasonable detail and in accordance with GAAP (subject, in the case of interim statements, to
normal recurring year-end audit adjustments and the absence of footnotes) applied consistently
throughout the periods reflected therein.

     Section 5.2 Certificates; Other Information.

     Furnish to the Administrative Agent (which will furnish to each of the Lenders):

     (a) on the date the financial statements referred to in Section 5.1(a) above are
required to be delivered pursuant to such Section, if available and not prohibitively
expensive, a certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in such certificate;

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     (b) concurrently with the delivery of the financial statements referred to in Sections
5.1(a) and 5.1(b) above, a certificate of a Responsible Officer substantially in the form of
Schedule 5.2(b) (i) stating that (A) such financial statements present fairly the
financial position of the Borrower and its consolidated Subsidiaries for the periods
indicated in conformity with GAAP applied on a consistent basis, (B) each of the Credit
Parties during such period observed or performed in all material respects all of its
covenants and other agreements, and satisfied in all material respects every condition,
contained in this Credit Agreement to be observed, performed or satisfied by it, and (C)
such Responsible Officer has obtained no knowledge of any Default or Event of Default except
as specified in such certificate, and (ii) providing calculations in reasonable detail
required to indicate compliance with Section 5.9 as of the last day of such period;

     (c) within ninety (90) days after the end of each fiscal year of the Borrower, a
certificate containing information regarding the amount of all Asset Dispositions, Debt
Issuances, and Equity Issuances that were made during the prior fiscal year and amounts
received in connection with any Recovery Event during the prior fiscal year;

     (d) promptly upon receipt thereof, a copy of any final report or “management letter”
submitted by independent accountants to any Credit Party or any of its Subsidiaries in
connection with any annual, interim or special audit of the books of such Person, unless
such accountants object to the delivery thereof to the Administrative Agent or the Lenders;

     (e) concurrently with the delivery of the financial statements referred to in Section
5.1(a) above (or more frequently at the Borrower’s discretion), an updated copy of
Schedule 3.12 and Schedule 3.16;

     (f) promptly upon mailing thereof, copies of all reports (other than those otherwise
provided pursuant to Section 5.1 and those which are of a promotional nature) and other
financial information which the Borrower sends to its shareholders, and promptly upon the
filing thereof, copies of all financial statements and non-confidential reports which the
Borrower may make to, or file with the Securities and Exchange Commission or any successor
or analogous Governmental Authority;

     (g) promptly any regulatory reports or public filings relating to any Credit Party;

     (h) promptly, such additional financial and other information as the Administrative
Agent, on behalf of any Lender, may from time to time reasonably request; and

     (i) concurrently with the delivery of the financial statements referred to in Section
5.1(h) above, a certificate of a Responsible Officer (i) stating that (A) such financial
statements present fairly the financial position of the Borrower and its consolidated
Subsidiaries for the period indicated in conformity with GAAP applied on a

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consistent basis, and (ii) providing calculations in reasonable detail demonstrating the
Excess Cash Flow of the Borrower for the period indicated.

     Section 5.3 Payment of Obligations.

     Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, in accordance with industry practice (subject, where applicable, to specified
grace periods) all its income taxes and other material taxes (Federal, state, local and any other
taxes) and other material obligations and liabilities of whatever nature and any additional costs
that are imposed as a result of any failure to so pay, discharge or otherwise satisfy such taxes,
obligations and liabilities, except when the amount or validity of any such taxes, obligations and
liabilities is currently being contested in good faith by appropriate proceedings and reserves, if
applicable, in conformity with GAAP with respect thereto have been provided on the books of the
Credit Parties (or, in the case of Foreign Subsidiaries with significant operations outside the
United States of America, generally accepted accounting principles in effect from time to time in
their respective jurisdictions of incorporation).

     Section 5.4 Conduct of Business and Maintenance of Existence.

     Continue to engage in business of the same general type as now conducted by it on the Closing
Date and preserve, renew and keep in full force and effect its organizational existence and take
all reasonable action to maintain all rights, privileges and franchises necessary or desirable in
the normal conduct of its business except as otherwise permitted pursuant to Section 6.4; comply
with all Contractual Obligations and Requirements of Law applicable to it except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     Section 5.5 Maintenance of Property; Insurance.

     (a) Keep all material property useful and necessary in its business in good working
order and condition (ordinary wear and tear, damage by casualty and obsolescence excepted,
and subject to any actions taken pursuant to Section 6.4);

     (b) Maintain with financially sound and reputable insurance companies insurance on all
its material property (including, without limitation, its material tangible Collateral) in
at least such amounts and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or a similar business; and furnish to the
Administrative Agent, upon written request, full information as to the insurance carried;
provided, however, that the Credit Parties and their Subsidiaries may
maintain self insurance plans to the extent companies of similar size and in similar
businesses do so. The Administrative Agent shall be named as loss payee or mortgagee, as its
interest may appear, and/or additional insured with respect to any such insurance providing
coverage in respect of any Collateral, and each provider of any such insurance shall agree
(unless otherwise consented to by the Administrative Agent), by endorsement upon the policy
or policies issued by it or by independent instruments furnished to the Administrative
Agent, that it will give the Administrative Agent thirty (30) days prior

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written notice before any such policy or policies shall be altered or canceled. The
Borrower shall provide prompt written notice to the Administrative Agent of the cancellation
of any insurance maintained in accordance with this Section 5.5(b), unless such notification
has previously been provided by the applicable provider of such insurance policy; and

     (c) In case of any material loss, damage to or destruction of a material portion of the
Collateral, such Credit Party shall promptly give written notice thereof to the
Administrative Agent generally describing the nature and extent of such damage or
destruction. In case of any loss, damage to or destruction of a material portion of the
Collateral, such Credit Party, whether or not the insurance proceeds, if any, received on
account of such damage or destruction shall be sufficient for that purpose, at such Credit
Party’s cost and expense, will promptly repair or replace the Collateral of such Credit
Party so lost, damaged or destroyed unless such Credit Party takes any action permitted by
Section 6.4.

     Section 5.6 Inspection of Property; Books and Records; Discussions.

     Keep proper books of records and account in which complete entries in conformity with GAAP and
all Requirements of Law shall be made of its dealings and transactions in relation to its
businesses and activities; and permit, during regular business hours and upon reasonable prior
notice by the Administrative Agent, the Administrative Agent (which may be accompanied by any
Lender) to visit and inspect any of its properties and examine and make abstracts from any of its
books and records (other than materials protected by the attorney-client privilege and materials
which the Borrower may not disclose without violation of a confidentiality obligation binding upon
it) at any reasonable time and as often as may reasonably be desired, and to discuss the business,
operations, properties and financial and other condition of the Credit Parties and their
Subsidiaries with officers and employees of the Credit Parties and their Subsidiaries and with its
independent certified public accountants (it being acknowledged and agreed that, so long as no
Default or Event of Default shall have occurred and be continuing, the Borrower shall be afforded
the reasonable opportunity to participate in any such discussion). Prior to the occurrence and
continuance of a Default or Event of Default, the first such visit and/or inspection in each
calendar year shall be at the Borrower’s expense, with each subsequent visit and inspection in such
calendar year at the Lenders’ expense. After the occurrence and during the continuance of Default
or Event of Default, all such visits and inspections shall be at the Borrower’s expense.

     Section 5.7 Notices.

     Give notice in writing to the Administrative Agent (which shall promptly transmit such notice
to each Lender) of:

     (a) promptly, but in any event within two (2) Business Days after a Responsible Officer
of the Borrower has knowledge thereof the occurrence of any Default or Event of Default;

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     (b) promptly, any default or event of default under any Contractual Obligation of any
Credit Party or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or involve a monetary claim in excess of $1,000,000;

     (c) promptly, any litigation, or any investigation or proceeding known to a Credit
Party, affecting any Credit Party or any of its Subsidiaries (i) which could reasonably be
expected to be adversely determined and, if adversely determined, could reasonably be
expected to have a Material Adverse Effect or involve a monetary claim in excess of
$1,000,000, (ii) affecting or with respect to this Agreement or any other Credit Document or
(iii) involving an environmental claim or potential liability under Environmental Laws in
excess of $1,000,000;

     (d) as soon as possible and in any event within thirty (30) days after a Responsible
Officer of the Borrower has knowledge thereof: (i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan, a failure to make any required contribution
to a Plan, the creation of any Lien in favor of the PBGC (other than a Permitted Lien) or a
Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action
by the PBGC or any Credit Party or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the termination of any Plan or the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Multiemployer Plan;

     (e) any notice of any material violation of any Requirement of Law received by any
Credit Party or any of its Subsidiaries from any Governmental Authority (including, without
limitation, any notice of violation of Environmental Laws);

     (f) any labor controversy that has resulted in, or could reasonably be expected to
result in, a strike or other work action against any Credit Party or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse Effect; and

     (g) promptly, any other development or event which could reasonably be expected to have
a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
of the Borrower setting forth details of the occurrence referred to therein and stating what action
the Borrower proposes to take with respect thereto. In the case of any notice of a Default or
Event of Default, the Borrower shall specify that such notice is a Default or Event of Default
notice on the face thereof.

     Section 5.8 Environmental Laws.

     (a) Comply in all material respects with all applicable Environmental Laws and obtain
and comply in all material respects with and maintain any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental Laws;

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     (b) Conduct and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the same are being contested in good
faith by appropriate proceedings and the pendency of such proceedings could not reasonably
be expected to have a Material Adverse Effect; and

     (c) Defend, indemnify and hold harmless the Administrative Agent and the Lenders, and
their respective employees, agents, officers and directors and affiliates, from and against
any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Credit Party or any of its
Subsidiaries or the Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable attorney’s and
consultant’s fees, investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing arise out of the gross
negligence, bad faith or willful misconduct of the party seeking indemnification therefor.
The agreements in this paragraph shall survive repayment of the Notes and all other amounts
payable hereunder.

     Section 5.9 Financial Covenants.

     Commencing on the day immediately following the Closing Date, each of the Credit Parties
shall, and shall cause each of its Subsidiaries to, comply with the following financial covenants:

     (a) Leverage Ratio. The Leverage Ratio, as of the last day of each fiscal
quarter of the Borrower occurring during the periods indicated below, shall be less than or
equal to the following:

	 	 	 	 	 	 	 	 
	 
	 	Fiscal Quarter Ending	 	 	Required Ratio	 	 
	 	September 30, 2005
	 	 	 	3.30 to 1.00	 	 
	 	December 31, 2005
	 	 	 	2.85 to 1.00	 	 
	 	March 31, 2006
	 	 	 	2.75 to 1.00	 	 
	 	June 30, 2006 and September 30, 2006
	 	 	 	2.25 to 1.00	 	 
	 	December 31, 2006 and thereafter
	 	 	 	2.00 to 1.00	 	 
	 

     (b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as of the
last day of each fiscal quarter of the Borrower occurring during the periods indicated
below, shall be greater than or equal to the following:

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	 	Fiscal Quarter Ending	 	 	Required Ratio	 	 
	 	September 30, 2005 through December 31, 2007
	 	 	 	1.10 to 1.00	 	 
	 	Thereafter
	 	 	 	1.25 to 1.00	 	 
	 

     (c) Consolidated Capital Expenditures. Consolidated Capital Expenditures as of
the end of each period set forth below shall be less than or equal to the following:

	 	 	 	 	 	 	 	 
	 
	 	Period	 	 	Amount	 	 
	 	Closing Date through 6/30/06
	 	 	$	16,000,000	 	 
	 	7/1/06 through 6/30/07
	 	 	$	18,000,000	 	 
	 	7/1/07 through 6/30/08
	 	 	$	10,000,000	 	 
	 	7/1/08 through 6/30/09
	 	 	$	10,000,000	 	 
	 	7/1/09 through 6/30/10
	 	 	$	10,000,000	 	 
	 

     Section 5.10 Additional Subsidiary Guarantors.

     The Credit Parties will cause each of their Domestic Subsidiaries, whether newly formed, after
acquired or otherwise existing, and any other Subsidiary to become a Guarantor hereunder by way of
execution of a Joinder Agreement. The guaranty obligations of any such Additional Credit Party
shall be secured by, among other things, the Collateral of the Additional Credit Party and such
Domestic Subsidiary shall execute and deliver to the Administrative Agent such Security Documents,
legal opinions and related documents as the Administrative Agent may reasonably request with
respect to such Collateral.

     Section 5.11 Compliance with Law.

     Each Credit Party will, and will cause each of its Subsidiaries to (i) observe and remain in
compliance with all applicable Requirements of Law and maintain in full force and effect all
permits, authorizations, registrations and consents from any Governmental Authority, in each case
applicable to the conduct of its business and (ii) keep in full force and effect all licenses,
certifications or accreditations necessary for any Property to carry on its business.

     Section 5.12 Pledged Assets.

     (a) Each Credit Party will, and will cause each of its Domestic Subsidiaries to, be subject at
all times to a first priority, perfected Lien with respect to all of such Domestic Subsidiary’s
real property and tangible and intangible personal property (other than the Excluded Assets and
subject in each case to Permitted Liens) in favor of the Administrative Agent pursuant to the terms
and conditions of the Security Documents or such other security documents as the Administrative
Agent shall reasonably request; provided, that the Credit Parties shall not be required to
pledge more than 65% of the Capital Stock of their first-tier Foreign Subsidiaries.

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     (b) Each Credit Party shall cause the Cash Collateral to be pledged to the Administrative
Agent for the benefit of the Lenders from the Closing date until such Cash Collateral is released
as provided for herein. So long as no Default or Event of Default then exists or would otherwise
result therefrom and to the extent the Borrower can demonstrate compliance with the financial
covenants set forth in Section 5.9 on a pro forma basis as of any such date of determination after
giving effect to the following release, (i) from and after June 30, 2006, $8,250,000 of the Cash
Collateral shall be released by the Administrative Agent to the Parent provided (x) the first two
Rebate Payments totaling $13,955,000 have been paid to the Sellers, (y) the Administrative Agent
shall have received the final financial statements (including balance sheets) of the Acquired
Business and its subsidiaries’ historical results for the fiscal years 2004 and 2005 in each case
audited by a nationally recognized independent accounting firm and in form and substance
satisfactory to the Administrative Agent and (z) the Borrower can demonstrate that the Leverage
Ratio of the Borrower and its Subsidiaries is less than 2.00 to 1.00 for two consecutive fiscal
quarters and (ii) on June 30, 2007, the Administrative Agent shall release the remaining balance of
the Cash Collateral to the Parent.

     Section 5.13 Covenants Regarding Patents, Trademarks and Copyrights.

     (a) Notify the Administrative Agent promptly if it knows or has reason to know that any
application, letters patent or registration relating to any Patent, Patent License,
Trademark or Trademark License of the Credit Parties or any of their Subsidiaries may become
abandoned, or of any adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding in the
United States Patent and Trademark Office or any court) regarding a Credit Party’s or any of
its Subsidiary’s ownership of any Patent or Trademark, its right to patent or register the
same, or to enforce, keep and maintain the same, or its rights under any Patent License or
Trademark License.

     (b) Notify the Administrative Agent promptly after it knows or has reason to know of
any adverse determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in any court) regarding any
Copyright or Copyright License of the Credit Parties or any of their Subsidiaries, whether
(i) such Copyright or Copyright License may become invalid or unenforceable prior to its
expiration or termination, or (ii) such Credit Party’s or any of its Subsidiary’s ownership
of such Copyright, its right to register the same or to enforce, keep and maintain the same,
or its rights under such Copyright License, may become affected.

     (c) (i) Promptly notify the Administrative Agent of any filing by any Credit Party or
any of its Subsidiaries, either itself or through any agent, employee, licensee or designee
(but in no event later than the fifteenth day following such filing), of any application for
registration of any Intellectual Property with the United States Copyright Office or United
States Patent and Trademark Office or any similar office or agency in any other country or
any political subdivision thereof.

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     (ii) Concurrently with the delivery of quarterly and annual financial
statements of the Borrower pursuant to Section 5.1 hereof, provide the
Administrative Agent and its counsel a complete and correct list of all Intellectual
Property owned by or licensed to the Credit Parties or any of their Subsidiaries
other than Intellectual Property previously disclosed in writing to the
Administrative Agent and the Lenders on Schedule 3.16 or otherwise.

     (iii) Upon request of the Administrative Agent, execute and deliver any and all
agreements, instruments, documents, and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent’s security interest in the
Intellectual Property referred to in clauses (i) and (ii) and the general
intangibles relating thereto or represented thereby, including, without limitation,
the goodwill of the Credit Parties and their Subsidiaries relating thereto or
represented thereby (or such other Intellectual Property or the general intangibles
relating thereto or represented thereby as the Administrative Agent may reasonably
request).

     (d) Take all actions that are reasonably necessary (including, without limitation, in
any proceeding before the United States Patent and Trademark Office or the United States
Copyright Office) to maintain each material item of Intellectual Property of the Credit
Parties and their Subsidiaries, including, without limitation, payment of maintenance fees,
filing of applications for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings.

     (e) In the event that any Credit Party becomes aware that any Intellectual Property is
infringed, misappropriated or diluted by a third party in any material respect, notify the
Administrative Agent promptly after it learns thereof and, unless the Credit Parties shall
reasonably determine that such Intellectual Property is not material to the business of the
Credit Parties and their Subsidiaries taken as a whole, promptly sue for infringement,
misappropriation or dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and take such other actions as the Credit Parties shall
reasonably deem appropriate under the circumstances to protect such Intellectual Property.

     Section 5.14 Further Assurances.

     Upon the request of the Administrative Agent, promptly perform or cause to be performed any
and all acts and execute or cause to be executed any and all documents for filing under the
provisions of the Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Administrative Agent, for the benefit of the Lenders, Liens
on the Collateral that are duly perfected in accordance with the requirements of, or the
obligations of the Credit Parties under, the Credit Documents and all applicable Requirements of
Law.

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     Section 5.15 Foreign Collateral Documents.

     Beginning June 30, 2005, the Credit Parties shall deliver to the Administrative Agent such
Foreign Collateral Documents as the Administrative Agent deems reasonably necessary or appropriate
under the laws of each applicable jurisdiction to grant to the Administrative Agent a first
priority perfected security interest in the Capital Stock of each first-tier Foreign Subsidiary of
the Borrower and the other Credit Parties. If necessary, the parties hereto shall enter into an
amendment to this Agreement deemed reasonably necessary or appropriate by the Administrative Agent
to facilitate the granting, perfection or enforcement of the Administrative Agent’s security
interest in such Capital Stock, including, without limitation, amendments adding the concept of
parallel debt and powers of attorney.

     Section 5.16 Post Closing Environmental Samples.

     Within sixty (60) days following the Closing Date, the Borrower will deliver or cause to be
delivered to the Administrative Agent (a) an analysis of soil and groundwater samples in the area
of the 15,000-gallon underground storage tank removed in 1986 and (b) an analysis of groundwater
samples in the area of the 110,000-gallon fuel oil aboveground storage tank.

ARTICLE VI

NEGATIVE COVENANTS

     The Credit Parties hereby covenant and agree that on the Closing Date, and thereafter for so
long as this Agreement is in effect and until the Commitments have terminated, no Note remains
outstanding and unpaid and the Credit Party Obligations (other than contingent indemnity
obligations that expressly survive the termination of this Agreement), together with interest,
Commitment Fee and all other amounts owing to the Administrative Agent or any Lender hereunder, are
paid in full that:

     Section 6.1 Indebtedness.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, contract, create,
incur, assume or permit to exist any Indebtedness, except:

     (a) Indebtedness arising or existing under this Agreement and the other Credit
Documents;

     (b) Indebtedness of the Borrower and its Subsidiaries existing as of the Closing Date
set forth on Schedule 6.1(b) hereto and renewals, refinancings or extensions thereof
in a principal amount not in excess of that outstanding as of the date of such renewal,
refinancing or extension;

     (c) Indebtedness of the Borrower and its Subsidiaries incurred after the Closing Date
consisting of Capital Leases or Indebtedness incurred to provide all or a

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portion of the purchase price or cost of construction or improvement of an asset
provided that (i) such Indebtedness when incurred shall not exceed the lesser of (x) the
purchase price for such asset or cost of construction or improvement of such asset or (y)
the fair market value of the asset purchased, constructed or improved at the time of such
acquisition, construction or improvement; (ii) no such Indebtedness shall be refinanced for
a principal amount in excess of the principal balance outstanding thereon at the time of
such refinancing; and (iii) the total amount of all such Indebtedness shall not exceed
$1,000,000 at any time outstanding (provided, that the total amount of all such
Indebtedness may exceed $1,000,000 if the Borrower voluntarily prepays the Term Loan dollar
for dollar by the amount of such excess at the time of the incurrence of such Indebtedness,
with such prepayment to be applied in accordance with the provision of Section 2.7(a));

     (d) (i) Unsecured intercompany Indebtedness among the Credit Parties, provided
that any such Indebtedness shall be (x) fully subordinated to the Credit Party Obligations
hereunder on terms reasonably satisfactory to the Administrative Agent and (y) if such
Indebtedness is evidenced by promissory notes, such promissory notes shall be pledged to the
Administrative Agent as Collateral for the Credit Party Obligations, (ii) unsecured
intercompany Indebtedness among Foreign Subsidiaries and (iii) Indebtedness owed by a
Foreign Subsidiary to a Credit Party;

     (e) Indebtedness and obligations owing under Hedging Agreements entered into pursuant
to Section 5.13 and other Hedging Agreements entered into by the Credit Parties in order to
manage existing or anticipated interest rate, exchange rate or commodity price risks and not
for speculative purposes;

     (f) Indebtedness and obligations of Credit Parties owing under documentary letters of
credit for the purchase of goods or other merchandise (but not under standby, direct pay or
other letters of credit except for the Letters of Credit hereunder) generally;

     (g) Pension liabilities of the German Subsidiaries to the extent that funds have been
escrowed on the Closing Date in a Pension and Employee Loans Escrow Fund;

     (h) Employee loan obligations of the German Subsidiaries existing (i) on the Closing
Date to the extent that funds have been escrowed on the Closing Date in a Pension and
Employee Loans Escrow Fund and (ii) after the Closing Date to the extent that funds have
been escrowed at the time of the extension of the employee loans in a manner satisfactory to
the Administrative Agent, in an aggregate amount of up to $5,000,000; and

     (i) Guaranty Obligations in respect of Indebtedness of a Credit Party to the extent
such Indebtedness is permitted to exist or be incurred pursuant to this Section 6.1.

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     Section 6.2 Liens.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, contract, create,
incur, assume or permit to exist any Lien with respect to any of its property or assets of any kind
(whether real or personal, tangible or intangible), whether now owned or hereafter acquired, except
for Permitted Liens.

     Section 6.3 Nature of Business.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, alter the character
of its business in any material respect from that conducted (including substantially similar lines
of business and any incidental activities reasonably related thereto) as of the Closing Date or, if
such Subsidiary did not exist as of the Closing Date, as of the date it became a Credit Party.

     Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to,

     (a) dissolve, liquidate or wind up its affairs, consolidate or merge with another
Person, or sell, transfer, lease or otherwise dispose of its property or assets or agree to
do so at a future time except the following, without duplication, shall be expressly
permitted:

     (i) the sale, transfer, lease or other disposition of inventory and materials
in the ordinary course of business;

     (ii) the sale, transfer or other disposition of Cash Equivalents;

     (iii) (A) the disposition of property or assets as a direct result of a
Recovery Event or (B) the sale, lease, transfer or other disposition of machinery,
parts and equipment no longer used or useful in the conduct of the business of the
Borrower or any of its Subsidiaries, so long as the net proceeds therefrom are used
to replace such machinery, parts and equipment or to purchase or otherwise acquire
new assets or property within 180 days of receipt of the net proceeds or such longer
period, in the case of a Recovery Event, as may be reasonably agreed to by the
Administrative Agent;

     (iv) the sale, lease or transfer of property or assets (for fair market value)
between the Borrower and any Guarantor;

     (v) the sale, lease or transfer of property or assets from a Credit Party other
than the Borrower to another Credit Party;

     (vi) the sale, lease or transfer of property or assets not to exceed $1,000,000
in the aggregate in any fiscal year;

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     (vii) the voluntary termination of Hedging Agreements;

     (viii) the merger or consolidation of a Credit Party with and into another
Credit Party; provided that if the Borrower is a party thereto, the Borrower will be
the surviving entity; and

     (ix) the merger of Universal Manufacturing & Logistics GmbH with and into Blitz
05-106 GmbH.

provided, that, in the case of clauses (i), (ii), (iii) and (vi) above, at least 80%
of the consideration received therefor by the Borrower or any other Credit Party is in the
form of cash (or a receivable which shall result in the payment of cash) or Cash
Equivalents; provided, further, that with respect to sales of assets
permitted hereunder only, the Administrative Agent shall be entitled, without the consent of
the Required Lenders, to release its Liens relating to the particular assets sold; or

     (b) (i) purchase, lease or otherwise acquire (in a single transaction or a series of
related transactions) the property or assets of any Person (other than purchases or other
acquisitions of inventory, leases, materials, property and equipment in the ordinary course
of business, except as otherwise limited or prohibited herein) or (ii) enter into any
transaction of merger or consolidation, except for (A) investments or acquisitions permitted
pursuant to Section 6.5, (B) the merger or consolidation of a Credit Party with and into
another Credit Party; provided that if the Borrower is a party thereto, the Borrower
will be the surviving entity, and (C) the merger of Universal Manufacturing & Logistics GmbH
with and into Blitz 05-106 GmbH.

     Section 6.5 Advances, Investments and Loans.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, make any Investment
except for Permitted Investments.

     Section 6.6 Transactions with Affiliates.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, enter into any
transaction or series of transactions, whether or not in the ordinary course of business, with any
officer, director or Affiliate (other than with any Credit Party or any Subsidiary of any Credit
Party) other than on terms and conditions substantially as favorable as would be obtainable in a
comparable arm’s-length transaction with a Person other than an officer, director or Affiliate;
provided, however, that the following shall be permitted: (A) reasonable fees and
compensation paid to officers, directors, employees, agents or consultants of the Credit Parties or
any of their Subsidiaries as determined in good faith by the Borrower’s board of directors or
senior officers; and (B) reasonable indemnification provided on behalf of officers, directors,
employees, agents or consultants of the Credit Parties or any of their Subsidiaries as determined
in good faith by the Borrower’s board of directors or senior officers.

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     Section 6.7 Ownership of Subsidiaries; Restrictions.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, create, form or
acquire any Subsidiaries, except for (a) Domestic Subsidiaries which (i) engage in the same line of
business as the Borrower and its consolidated Subsidiaries as of the Closing Date and (ii) are
joined as Additional Credit Parties in accordance with the terms hereof, (b) a company owned by the
Borrower formed under the laws of The Netherlands (the “Dutch Holding Company”) to act as a
holding company for certain Foreign Subsidiaries of the Borrower and (c) other Foreign Subsidiaries
which (i) engage in the same line of business as the Borrower and its consolidated Subsidiaries as
of the Closing Date and (ii) are financed by Investments made by Subsidiaries of the Borrower which
are not Credit Parties. The Borrower will not sell, transfer, pledge or otherwise dispose of any
Capital Stock or other equity interests in any of its Subsidiaries, nor will it permit any of its
Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of any of their Capital Stock or
other equity interests, except (i) for issuances and sales of Capital Stock to the Borrower or any
other Credit Party, (ii) issuances or sales of Capital Stock by any Foreign Subsidiary to another
Foreign Subsidiary or in accordance with local law requirements and (iii) in a transaction
permitted by Section 6.4.

     Section 6.8 Fiscal Year; Organizational Documents; Material Contracts; Subordinated
Indebtedness.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, change its fiscal
year other than to a fiscal year ending December 31. Each of the Credit Parties will not, nor will
it permit any Subsidiary to, amend, modify or change its articles of incorporation (or corporate
charter or other similar organizational document) or bylaws (or other similar document) or change
its accounting method (except in accordance with GAAP) in any manner materially adverse to the
interests of the Lenders without the prior written consent of the Required Lenders. Each of the
Credit Parties will not, nor will it permit any Subsidiary to, without the prior written consent of
the Administrative Agent, amend, modify, cancel or terminate or fail to renew or extend or permit
the amendment, modification, cancellation or termination of any of the Material Contracts or
Acquisition Documents, except in the event that such amendments, modifications, cancellations or
terminations could not reasonably be expected to have a Material Adverse Effect. The Credit
Parties will not, without the prior written consent of the Required Lenders, amend, modify, waive
or extend or permit the amendment, modification, waiver or extension of any term of any
Subordinated Indebtedness or of any documentation governing or evidencing such Subordinated
Indebtedness in a manner that is adverse to the interests of the Lenders or the issuer of such
Subordinated Indebtedness.

     Section 6.9 Limitation on Restricted Actions.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Person to (a) pay dividends or make any other distributions
to any Credit Party on its Capital Stock or with respect to any other interest or participation in,
or measured by, its profits, (b) pay any Indebtedness or other obligation owed to any Credit Party,
(c) make loans or advances to any Credit Party, (d) sell, lease or transfer any of its properties
or

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assets to any Credit Party, or (e) act as a Guarantor and pledge its assets pursuant to the Credit
Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except for
such encumbrances or restrictions existing under or by reason of (i) this Agreement and the other
Credit Documents, (ii) applicable law, (iii) any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(c); provided that any such restriction contained therein
relates only to the asset or assets constructed or acquired in connection therewith, (iv) any
Permitted Lien or any document or instrument governing any Permitted Lien; provided that
any such restriction contained therein relates only to the asset or assets subject to such
Permitted Lien, and (v) any such encumbrance or restriction consisting of customary non-assignment
provisions in leases or licenses governing leasehold interests or licenses, as applicable, to the
extent such provisions restrict the transfer of the lease or license, as applicable

     Section 6.10 Restricted Payments.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted Payment, except (a)
to make dividends or other distributions payable to any Credit Party (directly or indirectly
through Subsidiaries), (b) to make the regularly scheduled Rebate Payments as set forth in the
Supply Agreements in effect as of the Closing Date and (c) to make annual distributions from the
Borrower to any member of the Borrower in accordance with the terms of the Borrower’s operating
agreement for the purpose of paying income taxes of such member equal to the product of (i) the
amount of income allocated to such member by the Borrower for federal income tax purposes,
multiplied by (ii) the rate established by the Borrower’s board of directors in accordance with the
terms of the Borrower’s operating agreement, not to exceed 45%.

     Section 6.11 Sale Leasebacks.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, directly or
indirectly become or remain liable as lessee or as guarantor or other surety with respect to any
lease, whether an operating lease or a Capital Lease, of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, (a) which any Credit Party or any Subsidiary has
sold or transferred or is to sell or transfer to a Person which is not another Credit Party or
Subsidiary or (b) which any Credit Party or any Subsidiary intends to use for substantially the
same purpose as any other property which has been sold or is to be sold or transferred by such
Credit Party or such Subsidiary to another Person which is not another Credit Party or Subsidiary
in connection with such lease.

     Section 6.12 No Further Negative Pledges.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, enter into, assume
or become subject to any agreement prohibiting or otherwise restricting the creation or assumption
of any Lien upon its properties or assets, whether now owned or hereafter acquired, or requiring
the grant of any security for such obligation if security is given for some other obligation,
except (a) pursuant to this Agreement and the other Credit Documents, (b) pursuant to any document
or instrument governing Indebtedness incurred pursuant to Section 6.1(c), provided that any
such restriction contained therein relates only to the asset or assets constructed,

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improved or acquired in connection therewith, (c) in connection with any Permitted Lien or any
document or instrument governing any Permitted Lien, provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted Lien, (d) customary
non-assignment provisions in leases or licenses governing leasehold interests or licenses, as
applicable, to the extent such provisions restrict the transfer of the lease or license, as
applicable, and (e) pursuant to any sale agreement entered into in connection with any Asset
Disposition permitted hereunder.

     Section 6.13 Operating Lease Obligations.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, enter into, assume
or permit to exist any obligations for the payment of rent under Operating Leases which in the
aggregate for all such Persons would exceed $2,000,000 in any fiscal year.

     Section 6.14 Restrictions on Parent.

     Notwithstanding any provision herein or in any other Credit Document to the contrary, the
Parent shall not (a) pay any cash dividends on its Capital Stock or (ii) consummate any acquisition
outside of the Parent’s existing lines of business (including, the messaging business and the
manufacturing and distribution businesses of the Borrower) on or before June 30, 2006.

     Section 6.15 Deposit Account Control Agreements; Additional Bank Accounts.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, open, maintain or
otherwise have any checking, savings or other accounts at any bank or other financial institution,
or any other account where money is or may be deposited or maintained with any Person, other than
(a) the accounts set forth on Schedule 6.15, (b) demand deposit accounts established after
the Closing Date that are subject to a Deposit Account Control Agreement, (c) other demand deposit
accounts established after the Closing Date solely as payroll and other zero balance accounts and
(d) other deposit accounts established after the Closing Date, so long as at any time the balance
in any such account does not exceed $100,000 and the aggregate balance in all such accounts does
not exceed $250,000. The Credit Parties shall use their best efforts to obtain Deposit Account
Control Agreements satisfactory to the Administrative Agent with respect to each account set forth
on Schedule 6.15 within thirty (30) days following the Closing Date, except the zero balance
accounts and payroll accounts set forth thereon and to the extent otherwise determined by the
Administrative Agent, and if unable to obtain such a Deposit Account Control Agreement for any
account, shall close such account.

     Section 6.16 Release of Funds from Pension and Employee Loans Escrow Funds.

     Each of the Credit Parties will not, nor will it permit any Subsidiary to, use any of the
funds in the Pension and Employee Loans Escrow Funds for any purpose other than the payment of
pension liabilities of the German Subsidiaries on the Closing Date and repayment of employee loans
in accordance with the provisions of the employee loan programs of the German Subsidiaries.

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     Section 6.17 Sale of Universal Manufacturing & Logistics GmbH Prior to Merger.

     The Borrower will not sell or permit the sale of Universal Manufacturing & Logistics GmbH
prior to the merger thereof with and into Blitz 05-106 GmbH.

ARTICLE VII

EVENTS OF DEFAULT

     Section 7.1 Events of Default.

     An Event of Default shall exist upon the occurrence of any of the following specified events
(each an “Event of Default”):

     (a) Payment Default. The Borrower shall fail to pay any principal on any Loan
when due in accordance with the terms thereof or hereof; or the Borrower shall fail to
reimburse the Issuing Lender for any LOC Obligations when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or any fee or other
amount payable hereunder when due in accordance with the terms thereof or hereof and such
failure shall continue unremedied for three (3) Business Days (or any Guarantor shall fail
to pay on the Guaranty in respect of any of the foregoing or in respect of any other
Guaranty Obligations thereunder within the aforesaid period of time); or

     (b) Misrepresentation Default. Any representation or warranty made or deemed
made herein, in the Security Documents or in any of the other Credit Documents or which is
contained in any certificate, document or financial or other written statement delivered
pursuant hereto shall prove to have been incorrect, false or misleading in any material
respect on or as of the date made or deemed made; or

     (c) Covenant Default. (i) Any Credit Party shall fail to perform, comply with
or observe any term, covenant or agreement applicable to it contained in Sections 5.1, 5.2,
5.4, 5.7, 5.9, 5.11, 5.13 or Article VI hereof; or (ii) any Credit Party shall fail to
comply with any other covenant contained in this Credit Agreement or the other Credit
Documents or any other agreement, document or instrument among any Credit Party, the
Administrative Agent and the Lenders or executed by any Credit Party in favor of the
Administrative Agent or the Lenders (other than as described in Sections 7.1(a) or 7.1(c)(i)
above), and such breach or failure to comply is not cured within thirty (30) days of its
occurrence; or

     (d) Cross Default. Any Credit Party or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any Indebtedness (other than the
Notes) in a principal amount outstanding of at least $1,000,000 in the aggregate for the
Credit Parties and their Subsidiaries beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such Indebtedness was created; or
(ii) default in the observance or performance of any other agreement or condition relating

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to any Indebtedness in a principal amount outstanding of at least $1,000,000 in the
aggregate for the Credit Parties and their Subsidiaries or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become
due prior to its stated maturity; or

     (e) Bankruptcy Default. (i) The Parent, the Borrower or any of their
Subsidiaries shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Parent, the Borrower or any Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there shall be commenced
against any of the Parent, the Borrower or any of their Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in the entry of
an order for relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against
the Parent, the Borrower or any of their Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Parent, the Borrower or any of
their Subsidiaries shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clauses (i), (ii), or (iii)
above; or (v) the Parent, the Borrower or any of their Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as they become
due; or

     (f) Judgment Default. One or more judgments or decrees shall be entered
against any Credit Party or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid when due or covered by insurance or by third party indemnification
for which funds have been deposited into escrow) of $1,000,000 or more and all such
judgments or decrees shall not have been paid and satisfied, vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or

     (g) ERISA Default. (i) Any Person shall engage in any “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii)
any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan
(other than a Permitted Lien) shall arise on the assets of any Credit Party or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with

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respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event
or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for purposes of Title
IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) any Credit Party or any of its Subsidiaries or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or Reorganization of, any
Multiemployer Plan or (vi) any other similar event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or

     (h) Change of Control Default. There shall occur a Change of Control; or

     (i) Failure of Guaranty. The Guaranty or any provision thereof shall cease to
be in full force and effect or any Guarantor or any Person acting by or on behalf of any
Guarantor shall deny or disaffirm any Guarantor’s obligations under the Guaranty; or

     (j) Failure of Credit Documents. Any other Credit Document shall fail to be in
full force and effect in accordance with the terms thereof or to give the Administrative
Agent and/or the Lenders the security interests, liens, rights, powers and privileges
purported to be created thereby (except as such documents may be terminated or no longer in
force and effect in accordance with the terms thereof, other than those indemnities and
provisions which by their terms shall survive);

     (k) Uninsured Assets Default. Any uninsured damage to or loss, theft or
destruction or any assets of the Credit Parties or any of their Subsidiaries shall occur
that is in excess of $1,000,000; or

     (l) Subordinated Indebtedness. The subordination provisions contained in the
documentation evidencing (or relating to) any Subordinated Indebtedness shall cease to be in
full force and effect or to give the Lenders the rights, powers and privileges purported to
be created thereby.

     Section 7.2 Acceleration; Remedies.

     Upon the occurrence of an Event of Default, then, and in any such event, (a) if such event is
an Event of Default specified in Section 7.1(e) above, automatically, the Commitments shall
immediately terminate and the Loans (with accrued interest thereon), and all other amounts under
the Credit Documents (including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and (b) if such event is any
other Event of Default, any or all of the following actions may be taken: (i) with the written
consent of the Required Lenders, the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by written notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments

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shall immediately terminate; (ii) the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by written notice of default to the Borrower,
declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement
and the Notes to be due and payable forthwith and direct the Borrower to pay to the Administrative
Agent cash collateral as security for the LOC Obligations for subsequent drawings under then
outstanding Letters of Credit in an amount equal to the maximum amount of which may be drawn under
Letters of Credit then outstanding, whereupon the same shall immediately become due and payable;
(iii) exercise any rights or remedies of the Administrative Agent or the Lenders under this
Agreement or any other Credit Document, including, without limitation, any rights or remedies with
respect to the Collateral; and (iv) exercise any rights or remedies available to the Administrative
Agent or Lenders under applicable law.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

     Section 8.1 Appointment.

     Each Lender hereby irrevocably designates and appoints Wachovia Bank, National Association as
the Administrative Agent of such Lender under this Agreement, and each such Lender irrevocably
authorizes Wachovia Bank, National Association, as the Administrative Agent for such Lender, to
take such action on its behalf under the provisions of this Agreement and to exercise such powers
and perform such duties as are expressly delegated to the Administrative Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent.

     Section 8.2 Delegation of Duties.

     The Administrative Agent may execute any of its duties under this Agreement by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its affiliates as its agent to
perform the functions of the Administrative Agent hereunder relating to the advancing of funds to
the Borrower and distribution of funds to the Lenders and to perform such other related functions
of the Administrative Agent hereunder as are reasonably incidental to such functions.

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     Section 8.3 Exculpatory Provisions.

     Neither the Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except for its or such
Person’s own gross negligence, bad faith or willful misconduct) or (ii) responsible in any manner
to any of the Lenders for any recitals, statements, representations or warranties made by the
Borrower or any officer thereof contained in this Agreement 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 for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Credit Documents or for any failure of the Borrower to
perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or performance by the
Borrower of any of the agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower.

     Section 8.4 Reliance by Administrative Agent.

     (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or
conversation believed by it in good faith 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,
without limitation, counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless (a) a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent and (b) the Administrative Agent shall
have received the written agreement of such assignee to be bound hereby as fully and to the same
extent as if such assignee were an original Lender party hereto, in each case in form satisfactory
to the Administrative Agent. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the 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. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under any of the Credit Documents
in accordance with a request of the Required Lenders or all of the Lenders, as may be required
under this Agreement, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and all future holders of the Notes.

     (b) For purposes of determining compliance with the conditions specified in Section 4.1, each
Lender that has signed this Credit 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.

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     Section 8.5 Notice of Default.

     The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Administrative Agent has received notice from
a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default”. In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided, however, that
unless and until the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in the best interests
of the Lenders except to the extent that this Credit Agreement expressly requires that such action
be taken, or not taken, only with the consent or upon the authorization of the Required Lenders, or
all of the Lenders, as the case may be.

     Section 8.6 Non-Reliance on Administrative Agent and Other Lenders.

     Each Lender expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representation
or warranty to it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that
it has, independently and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

     Section 8.7 Indemnification.

     The Lenders agree to indemnify the Administrative Agent in its capacity hereunder (to the
extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do
so), ratably according to their respective Commitment Percentages in effect on the date on
which indemnification is sought under this Section, from and against any and all liabilities,

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obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of any Credit Document or any documents
contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from the Agent’s gross negligence or
willful misconduct, as determined by a court of competent jurisdiction. The agreements in this
Section 8.7 shall survive the termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.

     Section 8.8 Administrative Agent in Its Individual Capacity.

     The Administrative Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though the Administrative Agent were
not the Administrative Agent hereunder. With respect to its Loans made or renewed by it and any
Note issued to it, the Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the Administrative Agent,
and the terms “Lender” and “Lenders” shall include the Administrative Agent in its individual
capacity.

     Section 8.9 Successor Administrative Agent.

     The Administrative Agent may resign as Administrative Agent upon 30 days’ prior notice to the
Borrower and the Lenders. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the Notes, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by the Borrower, whereupon
such successor agent shall succeed to the rights, powers and duties of the Administrative Agent,
and the term “Administrative Agent” shall mean such successor agent effective upon such appointment
and approval, and the former Agent’s rights, powers and duties as Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former Administrative
Agent or any of the parties to this Agreement or any holders of the Notes. After any retiring
Agent’s resignation as Administrative Agent, the provisions of this Section 8.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.

     Section 8.10 Release of Collateral or Guarantors.

     (a) Notwithstanding anything to the contrary contained herein or in any other Credit
Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required by Section
9.1) to take, and the Administrative Agent shall take or cause to be taken, at the expense
of the Borrower, any action requested by the Borrower having the
effect of releasing any Collateral or any Guarantor to the extent the sale or other

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disposition of such Collateral or such Guarantor is permitted by the terms of this Agreement
(including, without limitation, pursuant to Section 5.12).

     (b) To the extent the Required Lenders waive the provisions of the Credit Documents
with respect to the sale or other disposition of any Collateral, or any Collateral is sold
or otherwise disposed of in a manner not prohibited by the Credit Documents, such Collateral
(unless transferred to a Credit Party) shall (except as otherwise provided above) be sold or
otherwise disposed of free and clear of the Liens created by the Credit Documents and the
Administrative Agent shall take, at the expense of the Borrower, such actions as are
appropriate in connection therewith to release any such Lien.

ARTICLE IX

MISCELLANEOUS

     Section 9.1 Amendments, Waivers and Release of Collateral.

     Neither this Credit Agreement, nor any of the other Credit Documents, nor any terms hereof or
thereof may be amended, supplemented, waived or modified except in accordance with the provisions
of this Section, nor may the Borrower or any Guarantor be released except in accordance with the
provisions of this Section 9.1. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the Borrower
or any other Credit Party written amendments, supplements or modifications hereto and to the other
Credit Documents for the purpose of adding any provisions to this Credit Agreement or the other
Credit Documents or changing in any manner the rights of the Lenders or of the Borrower or any
other Credit Party hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders may specify in such instrument, any of the requirements of this Credit Agreement
or the other Credit Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, waiver, supplement,
modification or release shall:

     (i) reduce the amount or extend the scheduled date of maturity of any Loan or
Note or any installment thereon, or reduce the stated rate of any interest or fee
payable hereunder (except in connection with a waiver of interest at the increased
post-default rate) or extend the scheduled date of any payment thereof or increase
the amount or extend the expiration date of any Lender’s Commitment, in each case
without the written consent of each Lender directly affected thereby; provided that,
it is understood and agreed that no waiver, reduction or deferral of a mandatory
prepayment required pursuant to Section 2.7, nor any amendment of Section 2.12(b) or
the definitions of Asset Disposition, Debt Issuance, Equity Issuance, Excess Cash
Flow, or Recovery Event, shall

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constitute a reduction of the amount of, or an extension of the scheduled date of,
any principal installment of any Loan or Note; or

     (ii) amend, modify or waive any provision of this Section 9.1 or reduce the
percentage specified in the definition of Required Lenders, without the written
consent of all the Lenders; or

     (iii) amend, modify or waive any provision of Article VIII without the written
consent of the then Administrative Agent;

     (iv) release all or substantially all of the Guarantors from their obligations
under the Guaranty, without the written consent of all of the Lenders;

     (v) release all or substantially all of the Collateral other than as expressly
permitted herein, without the written consent of all of the Lenders and any Hedging
Agreement Provider;

     (vi) subordinate the Loans to any other Indebtedness without he written consent
of all of the Lenders;

     (vii) permit the Borrower to assign or transfer any of its rights or
obligations under this Credit Agreement or other Credit Documents;

     (viii) amend, modify or waive any provision of the Credit Documents requiring
consent, approval or request of the Required Lenders or all Lenders, without the
written consent of all of the Required Lenders or Lenders as appropriate;

     (ix) amend, modify or waive the order in which Credit Party Obligations are
paid in Section 2.12(b) or the pro rata treatment of payments in Section 2.12(a),
without the written consent of each Lender directly affected thereby; provided that,
notwithstanding the foregoing, such order or treatment may be modified without the
consent of each Lender directly affected thereby (but with the consent of the
Required Lenders) to permit additional extensions of credit constituting (A) term
loans to share ratably with the Term Loan in the application of repayment or
prepayments pursuant to Section 2.7 or Section 2.12 with the consent of the Required
Lenders, or (B) revolving loans to share ratably with the Revolving Loans in the
application of repayments or prepayments pursuant to Section 2.7 or Section 2.12;

     (x) amend, modify or waive the order in which Credit Party Obligations are paid
in Section 2.12(b) or the definition of “Credit Party Obligations” to delete or
otherwise modify the treatment of any obligations referenced in such definition
without the written consent of each Secured Party directly affected thereby;
provided that, notwithstanding the foregoing, such order may be modified without the
consent of each Secured Party directly affected

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thereby to permit additional extensions of credit approved by the Required Lenders
to share ratably with the Credit Party Obligations;

     (xi) amend, modify or waive any provision of Article XI, without the written
consent of all the Lenders (other than for purposes of curing any formal defect,
omission or ambiguity);

     (xii) permit a Letter of Credit to have an original expiry date more than
twelve (12) months from the date of issuance without the consent of each of the
Revolving Lenders; provided, that the expiry date of any Letter of Credit
may be extended in accordance with the terms of Section 2.3(a);

     (xiii) require any Lender to provide LIBOR Rate Loans with Interest Periods
having a duration of longer than six (6) months without the consent of such Lender;

     (xiv) amend, modify or waive the definition of “Secured Hedging Agreement”,
“Hedging Agreement Provider” or “Secured Party” without the consent of each Hedging
Agreement Provider: or

provided, further, that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent, the Issuing Lender or the Swingline Lender under any Credit
Document shall in any event be effective, unless in writing and signed by the Administrative Agent,
the Issuing Lender and/or the Swingline Lender, as applicable, in addition to the Lenders required
hereinabove to take such action.

     Any such waiver, any such amendment, supplement or modification and any such release shall
apply equally to each of the Lenders and shall be binding upon the Borrower, the other Credit
Parties, the Lenders, the Administrative Agent and all future holders of the Notes. In the case of
any waiver, the Borrower, the other Credit Parties, the Lenders and the Administrative Agent shall
be restored to their former position and rights hereunder and under the outstanding Loans and Notes
and other Credit Documents, and any Default or Event of Default permanently waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.

     Notwithstanding any of the foregoing to the contrary, the consent of the Borrower shall not be
required for any amendment, modification or waiver of the provisions of Article VIII (except for
(i) any amendment, modification or waiver of the provisions of Section 8.9 or (ii) any amendment,
modification or waiver of the provisions of Article VIII that would impose any new obligation on
any Credit Party); provided, however, that the Administrative Agent will provide written notice to
the Borrower of any such amendment, modification or waiver.

     Notwithstanding the fact that the consent of all the Lenders is required in certain
circumstances as set forth above, (x) each Lender is entitled to vote as such Lender sees fit on
any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the
provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions

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set forth herein and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.

     Section 9.2 Notices.

     All notices, requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy or other electronic communications as provided below),
and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made
(i) when delivered by hand, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (iii) the day following the day on which the same has been delivered prepaid
(or pursuant to an invoice arrangement) to a reputable national overnight air courier service, or
(iv) the third Business Day following the day on which the same is sent by certified or registered
mail, postage prepaid, in each case addressed as follows in the case of the Borrower, the other
Credit Parties and the Administrative Agent, and as set forth on the administrative detail reply
form delivered by such Lender to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto and any future holders
of the Notes:

	 	 	 
	The Borrower

	 	Entertainment Distribution Company, LLC
	and the other

	 	360 Madison Avenue, Suite 500
	Credit Parties:

	 	New York, New York 10017
	

	 	Attention: Chief Financial Officer
	

	 	Telecopier: (212) 869-6418
	

	 	Telephone:
(212) 981-6917
 
	With a copy to:

	 	Glenayre Electronics, Inc.
	

	 	11360 Lakefield Drive
	

	 	Duluth, Georgia 30097
	

	 	Attention: Chief Financial Officer
	

	 	Telecopier: (770) 497-3992
	

	 	Telephone:
(770) 283-2525
 
	

	 	and
 
	

	 	Kennedy Covington Lobdell & Hickman, L.L.P.
	

	 	Suite 4700
	

	 	Hearst Tower
	

	 	214 North Tryon Street
	

	 	Charlotte, North Carolina 28202
	

	 	Attention: Eugene C. Pridgen, Esq.
	

	 	Telephone: (704) 331-7476

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	The Administrative

	 	Wachovia Bank, National Association, as Administrative Agent
	Agent:

	 	Charlotte Plaza
	

	 	201 South College Street, CP-8
	

	 	Charlotte, North Carolina 28288-0680
	

	 	Attention: Syndication Agency Services
	

	 	Telecopier: (704) 383-0288
	

	 	Telephone:
(704) 374-2698
 
	

	 	with a copy to:
 
	

	 	Wachovia Bank, National Association
	

	 	3414 Peachtree Street, GA9768
	

	 	Suite 500
	

	 	Atlanta, Georgia 30326
	

	 	Attention: Samantha Jones
	

	 	Telecopier: (404) 240-2589
	

	 	Telephone: (404) 239-6503

provided, that notices given by the Borrower pursuant to Section 2.1 or Section 2.9
hereof shall be effective only upon receipt thereof by the Administrative Agent.

     Notices and other communications to the Lenders or the Administrative Agent 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, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Section 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.

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

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     Section 9.3 No Waiver; Cumulative Remedies.

     No failure to exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

     Section 9.4 Survival of Representations and Warranties.

     All representations and warranties made hereunder and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the execution and
delivery of this Credit Agreement and the Notes and the making of the Loans; provided that
all such representations and warranties shall terminate on the date upon which the Commitments have
been terminated and all Credit Party Obligations have been paid in full.

     Section 9.5 Payment of Expenses and Taxes.

     The Borrower agrees (a) to pay or reimburse the Administrative Agent and the Arranger for all
their reasonable out-of-pocket costs and expenses incurred in connection with the development,
preparation, negotiation, printing and execution of, and any amendment, supplement or modification
to, this Credit Agreement and the other Credit Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and disbursements of counsel to
the Administrative Agent and the Arranger, (b) to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Credit Agreement and the other Credit Documents, including,
without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent
and to the Lenders (including reasonable allocated costs of in-house legal counsel), and (c) on
demand, to pay, indemnify, and hold each Lender and the Administrative Agent and the Arranger
harmless from, any and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of, the Credit
Documents and any such other documents, (d) to pay, indemnify, and hold each Lender and the
Administrative Agent, the Arranger and their Affiliates and their respective officers, directors,
employees, partners, members, counsel, agents, representatives, advisors and affiliates
(collectively called the “Indemnitees”) harmless from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of the Credit Documents and any such other documents
and the use, or proposed use, of proceeds of the Loans and (e) to pay any civil penalty or fine
assessed by the U.S. Department of the Treasury’s Office of Foreign Assets Control against, and all
reasonable costs and expenses (including counsel fees and

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disbursements) incurred in connection with defense thereof by the Administrative Agent or any
Lender as a result of the funding of Loans, the issuance of Letters of Credit, the acceptance of
payments or of Collateral due under the Credit Documents (all of the foregoing, collectively, the
“indemnified liabilities”); provided, however, that the Borrower shall not
have any obligation hereunder to an Indemnitee with respect to indemnified liabilities arising from
the gross negligence or willful misconduct of an Indemnitee, as determined by a court of competent
jurisdiction pursuant to a final non-appealable judgment. The agreements in this Section 9.5 shall
survive repayment of the Loans, Notes and all other Credit Party Obligations.

       Section 9.6 Successors and Assigns; Participations; Purchasing Lenders.

     (a) This Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Credit Agreement or the other Credit Documents
without the prior written consent of each Lender.

     (b) Any Lender may, in the ordinary course of its commercial banking business and in
accordance with applicable law, at any time sell to one or more banks or other entities
(“Participants”) participating interests in any Loan owing to such Lender, any Note
held by such Lender, any Commitment of such Lender, or any other interest of such Lender
hereunder. In the event of any such sale by a Lender of participating interests to a
Participant, such Lender’s obligations under this Credit Agreement to the other parties to
this Credit Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such Note for all
purposes under this Credit Agreement, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Credit Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve any amendment to or
waiver of this Credit Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the scheduled maturity of any Loan or Note or any
installment thereon in which such Participant is participating, or reduce the stated rate or
extend the time of payment of interest or fees thereon (except in connection with a waiver
of interest at the increased post-default rate) or reduce the principal amount thereof, or
increase the amount of the Participant’s participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of such participation, and that an increase in any
Commitment or Loan shall be permitted without consent of any participant if the
Participant’s participation is not increased as a result thereof), (ii) release all or
substantially all of the Guarantors from their obligations under the Guaranty, (iii) release
all or substantially all of the Collateral, or (iv) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Credit Agreement. In the case
of any such participation, the Participant shall not have any rights under this Credit
Agreement or any of the other Credit Documents (the Participant’s rights against such Lender
in respect of such participation to be those set forth in the agreement executed by such
Lender in favor of the Participant relating

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thereto) and all amounts payable by the Borrower hereunder shall be determined as if such
Lender had not sold such participation; provided that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.5 with respect to its
participation in the Commitments and the Loans outstanding from time to time;
provided further, that no Participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would have been entitled
to receive in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.

     (c) Any Lender may, in accordance with applicable law, at any time, sell or assign to
any Lender or any Affiliate or Related Fund thereof and, with the consent of the
Administrative Agent and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower (in each case, which consent shall not be unreasonably withheld or
delayed), to one or more additional banks, insurance companies, funds or other financial
institutions or entities (each such Lender, Affiliate, Related Fund, bank, insurance
company, fund or financial institution or entity, a “Purchasing Lender”), all or any
part of its rights and obligations under this Credit Agreement and the Notes in minimum
amounts of $5,000,000 with respect to its Revolving Commitment, its Revolving Loans or its
Term Loan (or, if less, the entire amount of such Lender’s obligations), pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Lender and such transferor
Lender (and, to the extent required above, the Administrative Agent and the Borrower), and
delivered to the Administrative Agent for its acceptance and recording in the Register;
provided, however, that any sale or assignment to an existing Lender or an
Affiliate or Related Fund of an existing Lender shall not require the consent of the
Administrative Agent or the Borrower nor shall any such sale or assignment be subject to the
minimum assignment amounts specified herein. Upon such execution, delivery, acceptance and
recording, from and after the Transfer Effective Date specified in such Commitment Transfer
Supplement, (i) the Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (ii) the transferor Lender thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be released from its
obligations under this Credit Agreement (and, in the case of a Commitment Transfer
Supplement covering all or the remaining portion of a transferor Lender’s rights and
obligations under this Credit Agreement, such transferor Lender shall cease to be a party
hereto; provided, however, that such Lender shall still be entitled to any
indemnification rights that expressly survive hereunder). Such Commitment Transfer
Supplement shall be deemed to amend this Credit Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under this Credit
Agreement and the Notes. On or prior to the Transfer Effective Date specified in such
Commitment Transfer Supplement, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the Notes delivered to the Administrative Agent
pursuant to such Commitment Transfer Supplement new Notes to the order of such Purchasing
Lender in an amount equal to the Commitment assumed by

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it pursuant to such Commitment Transfer Supplement and, unless the transferor Lender has not
retained a Commitment hereunder, new Notes to the order of the transferor Lender in an
amount equal to the Commitment retained by it hereunder. Such new Notes shall be dated the
Closing Date and shall otherwise be in the form of the Notes replaced thereby. The Notes
surrendered by the transferor Lender shall be returned by the Administrative Agent to the
Borrower marked “canceled”.

     (d) The Administrative Agent shall maintain at its address referred to in Section 9.2 a
copy of each Commitment Transfer Supplement delivered to it and a register (the
“Register”) for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time to time. A
Loan (and the related Note) recorded on the Register may be assigned or sold in whole or in
part upon registration of such assignment or ale on the Register. The entries in the
Register shall be conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.

     (e) Upon its receipt of a duly executed Commitment Transfer Supplement, together with
payment to the Administrative Agent by the transferor Lender or the Purchasing Lender
(except for any assignment by a Lender to an Affiliate of such Lender), as agreed between
them, of a registration and processing fee of $3,500.00 for each Purchasing Lender listed in
such Commitment Transfer Supplement and the Notes subject to such Commitment Transfer
Supplement, the Administrative Agent shall (i) accept such Commitment Transfer Supplement,
(ii) record the information contained therein in the Register and (iii) give prompt notice
of such acceptance and recordation to the Lenders and the Borrower.

     (f) Each Credit Party authorizes each Lender to disclose to any Participant or
Purchasing Lender (each, a “Transferee”) and any prospective Transferee any and all
financial information in such Lender’s possession concerning the Credit Parties and their
Affiliates which has been delivered to such Lender by or on behalf of a Credit Party
pursuant to this Credit Agreement or which has been delivered to such Lender by or on behalf
of a Credit Party in connection with such Lender’s credit evaluation of the Credit Parties
and their Affiliates prior to becoming a party to this Credit Agreement, in each case
subject to Section 9.15.

     (g) At the time of each assignment pursuant to this Section 9.6 to a Person which is
not already a Lender hereunder and which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for federal income tax purposes, the respective
assignee Lender shall provide to the Borrower and the Administrative Agent the appropriate
Internal Revenue Service Forms (and, if applicable, a Tax Exempt Certificate) described in
Section 2.18.

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     (h) Nothing herein shall prohibit any Lender from pledging or assigning any of its
rights under this Credit Agreement (including, without limitation, any right to payment of
principal and interest under any Note) to secure obligations of such Lender, including
without limitation, (i) any pledge or assignment to secure obligations to a Federal Reserve
Bank and (ii) in the case of any Lender that is a fund or trust or entity that invests in
commercial bank loans in the ordinary course of business, any pledge or assignment to any
holders of obligations owed, or securities issued, by such Lender including to any trustee
for, or any other representative of, such holders; it being understood that the requirements
for assignments set forth in this Section 9.6 shall not apply to any such pledge or
assignment of a security interest, except with respect to any foreclosure or similar action
taken by such pledge or assignee with respect to such pledge or assignment; provided that no
such pledge or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledge or assignee for such Lender as a party
hereto and no such pledge or assignee shall have any voting rights under this Credit
Agreement unless and until the requirements for assignments set forth in this Section 9.6
are complied with in connection with any foreclosure or similar action taken by such pledge
or assignee.

     (i) The Credit Parties hereby acknowledge that the Lenders and each of their Affiliates
may sell or securitize all or any part of their respective Loans (a
“Securitization”) through the pledge of all or any part of such Loans as collateral
security for loans to such Lenders or their Affiliates or through the sale of all or any
part of the Loans or the issuance of direct or indirect interests in all or any part of the
Loans, which Loans to such Lenders or their Affiliates or direct or indirect interests may
be rated by Moody’s, S&P or one or more other rating agencies (the “Rating
Agencies”). The Credit Parties shall cooperate with such Lenders and their Affiliates,
at no cost to the Credit Parties, to effect the Securitization, including by (i) executing
such additional documents, as reasonably requested by such Lenders in connection with such
Securitization, provided such additional documents shall not affect any Credit Party’s
rights and obligations under any of the Credit Documents and (ii) providing such information
as may be reasonably requested by such Lenders in connection with the rating of the Loans or
the Securitization, provided that any Person that is provided such information by such
Lenders or their Affiliates shall agree to be bound by the provisions of Section 9.14. Any
such Lender or any of its Affiliates that enters into the Securitization shall be required
to pay the fees charged by the Rating Agencies for the issuance and the maintenance, if
applicable, of the ratings assigned in connection with the Securitization.

Section 9.7 Adjustments; Set-off.

     (a) Each Lender agrees that if any Lender (a “Benefited Lender”) shall at any
time receive any payment of all or part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7.1(e), or otherwise) in a
greater proportion than any such payment to or collateral received by any other Lender, if
any, in respect of such other Lender’s Loans, or interest thereon, such Benefited Lender
shall purchase for cash from the other Lenders a participating interest in such portion of
each

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such other Lender’s Loan, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of such recovery,
but without interest. The Borrower agrees that each Lender so purchasing a portion of
another Lender’s Loans may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.

     (b) In addition to any rights and remedies of the Lenders provided by law (including,
without limitation, other rights of set-off), each Lender shall have the right, without
prior notice to any Credit Party, any such notice being expressly waived by the Credit
Parties to the extent permitted by applicable law, upon the occurrence of any Event of
Default, to setoff and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of any Credit Party, or any part thereof in such
amounts as such Lender may elect, against and on account of the obligations and liabilities
of the Borrower and the other Credit Parties to such Lender hereunder and claims of every
nature and description of such Lender against the Borrower and the other Credit Parties, in
any currency, whether arising hereunder, under any other Credit Document or any Hedging
Agreement provided by such Lender pursuant to the terms of this Credit Agreement,, as such
Lender may elect, whether or not such Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. The aforesaid
right of set-off may be exercised by such Lender against any Credit Party or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver
or execution, judgment or attachment creditor of any such Credit Party, or against anyone
else claiming through or against any such Credit Party or any such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of set-off shall
not have been exercised by such Lender prior to the occurrence of any Event of Default.
Each Lender agrees promptly to notify the applicable Credit Party 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
set-off and application.

Section 9.8 Table of Contents and Section Headings.

     The table of contents and the Section and subsection headings herein are intended for
convenience only and shall be ignored in construing this Credit Agreement.

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     Section 9.9 Counterparts.

     This Credit Agreement may be executed by one or more of the parties to this Credit Agreement
on any number of separate counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument. A counterpart hereof (or signature page thereto) signed
and transmitted by any Person party hereto to the Administrative Agent (or its counsel) by
facsimile machine, telecopier or electronic mail is to be treated as an original. The signature of
such Person thereon, for purposes hereof, is to be considered as an original signature, and the
counterpart (or signature page thereto) so transmitted is to be considered to have the same binding
effect as an original signature on an original document. A set of the copies of this Credit
Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

     Section 9.10 Effectiveness; Integration; Continuing Agreement.

     (a) This Credit Agreement, together with the other Credit 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. In the event
of any conflict between the provisions of this Credit Agreement and those of any other
Credit Document, the provisions of this Credit Agreement shall control; provided
that the inclusion of supplemental rights or remedies in favor of the Administrative Agent
or the Lenders in any other Credit Document shall not be deemed a conflict with this Credit
Agreement. Each Credit 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.

     (b) This Credit Agreement shall become effective at such time when all of the
conditions set forth in Section 4.1 have been satisfied or waived by the Lenders and it
shall have been executed by the Borrower, the Guarantors and the Administrative Agent, and
the Administrative Agent shall have received copies hereof (telefaxed or otherwise) which,
when taken together, bear the signatures of each Lender, and thereafter this Credit
Agreement shall be binding upon and inure to the benefit of the Borrower, the Guarantors,
the Administrative Agent and each Lender and their respective successors and permitted
assigns.

     (c) This Credit Agreement shall be a continuing agreement and shall remain in full
force and effect until all Loans, LOC Obligations, interest, fees and other Credit Party
Obligations (other than those obligations that expressly survive the termination of this
Credit Agreement) have been paid in full and all Commitments and Letters of Credit have been
terminated. Upon termination, the Credit Parties shall have no further obligations (other
than those obligations that expressly survive the termination of this Credit Agreement)
under the Credit Documents and the Administrative Agent shall, at the request and expense of
the Borrower, deliver all the Collateral in its possession to the Borrower and release all
Liens on the Collateral; provided that should any payment, in whole or in part, of
the Credit Party Obligations be rescinded or otherwise required to be restored or returned
by the Administrative Agent or any Lender, whether as a result of any proceedings in
bankruptcy

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or reorganization or otherwise, then the Credit Documents shall automatically be reinstated
and all Liens of the Administrative Agent shall reattach to the Collateral and all amounts
required to be restored or returned and all costs and expenses incurred by the
Administrative Agent or any Lender in connection therewith shall be deemed included as part
of the Credit Party Obligations.

Section 9.11 Severability.

     Any provision of this Credit Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

     Section 9.12 Integration.

     This Credit Agreement and the other Credit Documents represent the agreement of the Borrower,
the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are
no promises, undertakings, representations or warranties by the Administrative Agent, the Borrower
or any Lender relative to the subject matter hereof not expressly set forth or referred to herein
or in the other Credit Documents.

     Section 9.13 Governing Law.

     This Credit Agreement and the other Credit Documents and the rights and obligations of the
parties under this Credit Agreement and the other Credit Documents shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

     Section 9.14 Consent to Jurisdiction and Service of Process.

     All judicial proceedings brought against the Borrower and/or any other Credit Party with
respect to this Credit Agreement, any Note or any of the other Credit Documents may be brought in
any state or federal court of competent jurisdiction in the State of New York, and, by execution
and delivery of this Credit Agreement, each of the Borrower and the other Credit Parties accepts,
for itself and in connection with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Credit Agreement, any Note or any other Credit Document
from which no appeal has been taken or is available. Each of the Borrower and the other Credit
Parties irrevocably agrees that all service of process in any such proceedings in any such court
may be effected by mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to it at its address set forth in Section 9.2 or at such
other address of which the Administrative Agent shall have been notified pursuant thereto, such
service being hereby acknowledged by the each of the Borrower and the other Credit Parties to be
effective and binding service in every respect. Each of the Borrower, the other Credit Parties,
the Administrative Agent and the Lenders irrevocably waives any objection, including, without
limitation, any objection to the laying of venue based on the grounds of forum

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non conveniens which it may now or hereafter have to the bringing of any such action or proceeding
in any such jurisdiction. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of any Lender to bring proceedings against the
Borrower or the other Credit Parties in the court of any other jurisdiction.

     Section 9.15 Confidentiality.

     The Administrative Agent and each of the Lenders agrees that it will use its best efforts not
to disclose without the prior consent of the Borrower (other than to its employees, affiliates,
auditors or counsel or to another Lender) any information (the “Information”) with respect
to the Credit Parties and their Subsidiaries which is furnished pursuant to this Credit Agreement,
any other Credit Document or any documents contemplated by or referred to herein or therein and
which is designated by the Borrower to the Lenders in writing as confidential or as to which it is
otherwise reasonably clear such information is not public, except that any Lender may disclose any
such Information (a) as has become generally available to the public other than by a breach of this
Section 9.15, (b) as may be required in any report, statement or testimony submitted to any
municipal, state or federal regulatory body having or claiming to have jurisdiction over such
Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or the Office
of the Comptroller of the Currency or the National Association of Insurance Commissioners or
similar organizations (whether in the United States or elsewhere) or their successors, (c) as may
be required in response to any summons or subpoena or any law, order, regulation or ruling
applicable to such Lender, (d) to any prospective Participant or assignee in connection with any
contemplated transfer pursuant to Section 9.6, provided that such prospective transferee
shall have been made aware of this Section 9.15 and shall have agreed to be bound by its provisions
as if it were a party to this Credit Agreement, (e) to Gold Sheets and other similar bank
trade publications (such information to consist of deal terms and other information regarding the
credit facilities evidenced by this Credit Agreement customarily found in such publications), (f)
in connection with any suit, action or proceeding for the purpose of defending itself, reducing its
liability, or protecting or exercising any of its claims, rights, remedies or interests under or in
connection with the Credit Documents or any Secured Hedging Agreement, (g) to any direct or
indirect contractual counterparty in swap agreements or such contractual counterparty’s
professional advisor (so long as such contractual counterparty or professional advisor to such
contractual counterparty agrees to be bound by the provisions of this Section 9.15), (h) to the
National Association of Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender’s investment portfolio
in connection with ratings issued with respect to such Lender[, (i) to a Person that is an
investor or prospective investor in a Securitization that agrees that its access to information
regarding the Borrower and the Loans is solely for purposes of evaluating an investment in such
Securitization; provided that such Person shall have been made aware of this Section 9.15 and shall
have agreed to be bound by its provisions as if it were a party to this Credit Agreement, or (j) to
a Person that is a trustee, collateral manager, servicer, noteholder or secured party in a
Securitization in connection with the administration, servicing and reporting on the assets serving
as collateral for such Securitization; provided that such Person shall have been made aware of this
Section and shall have agreed to be bound by its provisions as if it were made aware of this
Section 9.15 and shall have agreed to be bound by its provisions as if I were a party to this
Credit Agreement. For purposes of this Section “Securitization” shall mean a public

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or private offering by a Lender or any of its affiliates or their respective successors and
assigns, of securities which represent an interest in, or which are collateralized in whole or in
part by, the Loans]. Notwithstanding the foregoing, Wachovia may disclose Information, without
notice to the Borrower, to governmental regulatory authorities in connection with any regulatory
examination of Wachovia or in accordance with Wachovia’s regulatory compliance policy.

     Section 9.16 Acknowledgments.

     The Borrower and the other Credit Parties each hereby acknowledges that:

     (a) it has been advised by counsel in the negotiation, execution and delivery of each
Credit Document;

     (b) neither the Administrative Agent nor any Lender has any fiduciary relationship with
or duty to the Borrower or any other Credit Party arising out of or in connection with this
Credit Agreement and the relationship between Administrative Agent and Lenders, on one hand,
and the Borrower and the other Credit Parties, on the other hand, in connection herewith is
solely that of debtor and creditor; and

     (c) no joint venture exists among the Lenders or among the Borrower or the other Credit
Parties and the Lenders.

     Section 9.17 Waivers of Jury Trial.

     THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN. EACH OF THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE
AGENT AND THE LENDERS AGREE NOT TO ASSERT ANY CLAIM AGAINST ANY OTHER PARTY TO THIS CREDIT
AGREEMENT OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AFFILIATES OR
AGENTS, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
ARISING OUT OF OR OTHERWISE RELATING TO ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.

     Section 9.18 Patriot Act Notice.

     Each Lender and the Administrative Agent (for itself and not on behalf of any other party)
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 “Patriot 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 Patriot Act.

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     Section 9.19 Power of Attorney.

     (a) Without limiting any other authority granted to the Administrative Agent herein or in any
other Credit Document, each Lender hereby specifically authorizes the Administrative Agent to enter
into, as agent on behalf of the Lenders (with the effect that each Lender shall become a party
thereunder), and/or amend, as agent on behalf of the Lenders, (i) any pledge agreements governed by
Dutch and/or German law and (ii) any parallel debt agreement or any substantially similar agreement
that creates an obligation of the Credit Parties (as debt acknowledgement or abstraktes
Schuldanerkenntnis) in favor of the Administrative Agent under Dutch and/or German Law. The
authorization granted herein comprises any action or declaration the Administrative Agent may deem
necessary in connection with such pledge agreements (including any action or declaration that the
Administrative Agent deems to be necessary in order to create and continue a valid pledge agreement
governed by Dutch and/or German law), the parallel debt agreement or any substantially similar
agreement that creates an obligation of the Credit Parties (as debt acknowledgement or abstraktes
Schuldanerkenntnis) in favor of the Administrative Agent under Dutch and/or German law (including
any action or declaration that the Administrative Agent deems to be necessary in order to create
and continue valid obligations under such agreements governed by Dutch and/or German Law). The
Administrative Agent is explicitly exempt from any restriction to act for various parties to such
pledge agreements, parallel debt agreements or such similar agreements. The Administrative Agent
has the power to sub-delegate its powers as agent of each of the Lenders granted by this Section
9.18 to third parties.

     (b) The Credit Parties hereby specifically authorize and instruct the Borrower to enter into,
as agent on behalf of the Credit Parties (with the effect that each Credit Party shall become a
party thereunder), and/or amend, as agent of behalf of the Credit Parties, any parallel debt
agreement or any substantially similar agreement that creates an obligation of the Credit Parties
(as debt acknowledgement or abstraktes Schuldanerkenntnis) in favor of the Administrative Agent
under Dutch and/or German Law. The authorization granted herein comprises any action or
declaration the Borrower may deem necessary in connection with such agreements (including any
action or declaration that the Borrower deems to be necessary in order to create and continue valid
obligations under such agreements governed by Dutch and/or German Law). The Borrower has the power
to sub-delegate its powers as agent of each of the Credit Parties granted by this Section 9.18 to
third parties.

ARTICLE X

GUARANTY

     Section 10.1 The Guaranty.

     In order to induce the Lenders to enter into this Agreement and any Hedging Agreement Provider
to enter into any Secured Hedging Agreement and to extend credit hereunder and thereunder and in
recognition of the direct benefits to be received by the Guarantors from the Extensions of Credit
hereunder and any Secured Hedging Agreement, each of the Guarantors

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hereby agrees with the Administrative Agent and the Lenders as follows: the Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary obligor and not merely
as surety the full and prompt payment when due, whether upon maturity, by acceleration or
otherwise, of any and all Secured Obligations. If any or all of the Secured Obligations become due
and payable hereunder or under any Secured Hedging Agreement, each Guarantor unconditionally
promises to pay such Secured Obligations to the Administrative Agent and the Lenders, or order, on
demand, together with any and all reasonable out-of-pocket expenses which may be incurred by the
Administrative Agent or the Lenders in collecting any of the Secured Obligations.

     Notwithstanding any provision to the contrary contained herein or in any other of the Credit
Documents, to the extent the obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the obligations of each such
Guarantor hereunder shall be limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the Bankruptcy Code).

     Section 10.2 Bankruptcy.

     Additionally, each of the Guarantors unconditionally and irrevocably guarantees jointly and
severally the payment of any and all Secured Obligations of the Borrower to the Lenders and any
Hedging Agreement Provider whether or not due or payable by the Borrower upon the occurrence of any
of the events specified in Section 7.1(e), and unconditionally promises to pay such Secured
Obligations to the Administrative Agent for the account of the Lenders and to any such Hedging
Agreement Provider, or order, on demand, in lawful money of the United States. Each of the
Guarantors further agrees that to the extent that the Borrower or a Guarantor shall make a payment
or a transfer of an interest in any property to the Administrative Agent, any Lender or any Hedging
Agreement Provider, which payment or transfer or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to
the Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or equitable cause, then to
the extent of such avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had not been made.

     Section 10.3 Nature of Liability.

     The liability of each Guarantor hereunder is exclusive and independent of any security for or
other guaranty of the Secured Obligations of the Borrower whether executed by any such Guarantor,
any other guarantor or by any other party, and no Guarantor’s liability hereunder shall be affected
or impaired by (a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the Secured Obligations of the Borrower, or (c) any payment
on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination
or increase, decrease or change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent, the Lenders or any Hedging Agreement Provider on the

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Secured Obligations which the Administrative Agent, such Lenders or such Hedging Agreement
Provider repay the Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Guarantors waives any right to the
deferral or modification of its obligations hereunder by reason of any such proceeding.

     Section 10.4 Independent Obligation.

     The obligations of each Guarantor hereunder are independent of the obligations of any
other guarantor or the Borrower, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought against any other guarantor or the Borrower
and whether or not any other Guarantor or the Borrower is joined in any such action or actions.

     Section 10.5 Authorization.

     Each of the Guarantors authorizes the Administrative Agent, each Lender and each Hedging
Agreement Provider without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder, from time to time to
(a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Secured Obligations or any part thereof in accordance with this
Agreement and any Secured Hedging Agreement, as applicable, including any increase or decrease of
the rate of interest thereon, (b) take and hold security from any guarantor or any other party for
the payment of this Guaranty or the Secured Obligations and exchange, enforce waive and release any
such security, (c) apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine and (d) release or
substitute any one or more endorsers, guarantors, the Borrower or other obligors.

     Section 10.6 Reliance.

     It is not necessary for the Administrative Agent, the Lenders or any Hedging Agreement
Provider to inquire into the capacity or powers of the Borrower or the officers, directors,
members, partners or agents acting or purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

     Section 10.7 Waiver.

     (a) Each of the Guarantors waives any right (except as shall be required by
applicable statute and cannot be waived) to require the Administrative Agent, any Lender or
any Hedging Agreement Provider to (i) proceed against the Borrower, any other guarantor or
any other party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party, or (iii) pursue any other remedy in the Administrative
Agent’s, any Lender’s or any Hedging Agreement Provider’s power whatsoever. Each of the
Guarantors waives any defense based on or arising out of any defense of the Borrower, any
other guarantor or any other party other than payment in

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full of the Secured Obligations,
including without limitation any defense based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of the Secured
Obligations or any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower other than payment in full of the Secured Obligations. The
Administrative Agent may, at its election, foreclose on any security held by the
Administrative Agent by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Administrative Agent or any
Lender may have against the Borrower or any other party, or any security, without affecting
or impairing in any way the liability of any Guarantor hereunder except to the extent the
Secured Obligations have been paid in full. Each of the Guarantors waives any defense
arising out of any such election by the Administrative Agent, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or other right or
remedy of the Guarantors against the Borrower or any other party or any security.

     (b) Each of the Guarantors waives all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notice of protest,
notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional Secured Obligations. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower’s financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment of the
Secured Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any
Lender shall have any duty to advise such Guarantor of information known to it regarding
such circumstances or risks.

     (c) Each of the Guarantors hereby agrees it will not exercise any rights of subrogation
which it may at any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders or
any Hedging Agreement Provider against the Borrower or any other guarantor of the Secured
Obligations of the Borrower owing to the Lenders or such Hedging Agreement Provider
(collectively, the “Other Parties”) and all contractual, statutory or common law
rights of reimbursement, contribution or indemnity from any Other Party which it may at any
time otherwise have as a result of this Guaranty until such time as the Secured Obligations
shall have been paid in full and the Commitments have been terminated. Each of the
Guarantors hereby further agrees not to exercise any right to enforce any other remedy which
the Administrative Agent, the Lenders or any Hedging Agreement Provider now have or may
hereafter have against any Other Party, any endorser or any other guarantor of all or any
part of the Secured Obligations of the Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit of the Lenders and/or
the Hedging Agreement Providers to secure payment of the Secured Obligations of the Borrower
until such time as the Secured Obligations shall have been paid in full and the Commitments
have been terminated.

116

 

     Section 10.8 Limitation on Enforcement.

     The Lenders and the Hedging Agreement Providers agree that this Guaranty may be enforced
only by the action of the Administrative Agent acting upon the instructions of the Required Lenders
or such Hedging Agreement Provider (only with respect to obligations under the applicable Secured
Hedging Agreement) and that no Lender or Hedging Agreement Provider shall have any right
individually to seek to enforce or to enforce this Guaranty, it being understood and agreed that
such rights and remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Agreement and for the benefit of any Hedging Agreement Provider
under any Secured Hedging Agreement. The Lenders and the Hedging Agreement Providers further agree
that this Guaranty may not be enforced against any director, officer, employee or stockholder of
the Guarantors.

     Section 10.9 Confirmation of Payment.

     The Administrative Agent, the Lenders and any Hedging Agreement Provider will, upon
request after payment of the Secured Obligations which are the subject of this Guaranty and
termination of the Commitments relating thereto, confirm to the Borrower, the Guarantors or any
other Person that the Secured Obligations have been paid in full and the Commitments relating
thereto terminated, subject to the provisions of Section 10.2.

117

 

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

	 	 	 	 	 	 	 
	BORROWER:	 	ENTERTAINMENT DISTRIBUTION COMPANY, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ DEBRA ZIOLA	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	Debra Ziola	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	Chief Financial Officer	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	GUARANTORS:	 	ENTERTAINMENT DISTRIBUTION COMPANY	 	 
	 	 	(USA), LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ DEBRA ZIOLA	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	Debra Ziola	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	Chief Financial Officer	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PARENT:	 	GLENAYRE ELECTRONICS, INC., a signatory	 	 
	 	 	for purposes of
Section 6.14 only
 	 	 
	

	 	By:	 	/s/ DEBRA ZIOLA	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	Debra Ziola	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	Chief Financial Officer	 	 
	

	 	 	 	 	 	 

Credit Agreement

 

 

	 	 	 	 	 	 	 
	ADMINISTRATIVE AGENT
	 	 	 	 	 	 
	AND LENDERS:	 	WACHOVIA BANK, NATIONAL ASSOCIATION,	 	 
	 	 	as Administrative Agent and as a Lender	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ JOHN C. COFFIN	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	John C. Coffin	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	Senior Vice President	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[OTHER LENDERS]	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 

Credit AgreementEx-10.2

 

EXECUTION COPY

CASH COLLATERAL AGREEMENT

     THIS CASH COLLATERAL AGREEMENT (this “Agreement”) dated as of May 31, 2005 is by and
between GLENAYRE ELECTRONICS, INC., a Colorado corporation (the “Parent”) and WACHOVIA
BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders under the Credit Agreement
referred to below (the “Administrative Agent”).

RECITALS

     WHEREAS, Entertainment Distribution Company, LLC, a Delaware limited liability company (the
“Borrower”), those Domestic Subsidiaries of the Borrower as may from time to time become a
party thereto (the “Guarantors”), the lenders from time to time party thereto (the
“Lenders”), and Wachovia Bank, National Association, as administrative agent for the
Lenders, have entered into that certain Credit Agreement dated as of May 31, 2005 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

     WHEREAS, it is a condition precedent to the effectiveness of the Credit Agreement and the
obligations of the Lenders to make their respective Loans and to issue and/or acquire participation
interests in Letters of Credit under the Credit Agreement that the Parent (a) shall execute and
deliver this Agreement to the Administrative Agent and (b) shall deposit the Cash Collateral into
the Cash Collateral Account to secure the Secured Obligations, such Cash Collateral to be pledged
to the Administrative Agent for the benefit of the Lenders (the “Secured Parties”); and

     WHEREAS, the Parent, pursuant to the requirements of the Credit Agreement, seeks to grant to
the Administrative Agent for the benefit of the Secured Parties a first priority perfected security
interest in the Cash Collateral Account.

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

     1. Defined Terms. Capitalized terms used herein but not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. As used herein, the
following terms shall have the meanings specified below:

     “Cash Collateral Account” shall have the meaning assigned to such term in Section
2(a)(i).

     “Cash Collateral” shall have the meaning assigned to such term in Section 2(a).

     “Secured Obligations” means all obligations of the Borrower and the other Credit
Parties in respect of the Term Loan under the Credit Agreement including, without limitation,
principal and accrued interest.

     2. Cash Collateral.

     (a) Grant of Security Interest. To secure the prompt payment and performance
in full when due, whether by lapse of time, acceleration, or otherwise, of the Secured
Obligations, the

 

 

Parent hereby grants to the Administrative Agent a continuing security interest in, and
a right to set off against, any and all right, title and interest of the Parent in and to
the following (collectively, the “Cash Collateral”), whether now owned or existing
or owned, acquired, or arising hereafter:

     (i) that certain money market account no. 2000028669780 in the name of the
Parent maintained with Wachovia Bank, National Association, as depository (the
“Bank”), and any and all money and investment property therein, including
any and all certificates or instruments purchased with funds deposited in such
account, and all renewals of such instruments and certificates and replacements
therefor, whether in the form of certificates of deposit or other instruments,
notes, securities or accounts (including, without limitation, cash and Cash
Equivalents) and any other cash and non-cash proceeds of the principal amount of the
foregoing, including interest and dividends thereon and other property received in
respect of, or in substitution or exchange for any of the foregoing (all of the
foregoing is collectively referred to as the “Cash Collateral Account”); and

     (ii) all proceeds of the Cash Collateral Account, including, without
limitation, interest or dividends on the Cash Collateral Account or such
certificates, instruments, notes, securities or accounts; provided, that all
Liens of the Administrative Agent in amounts disbursed under clause 2(c)(ii) or
2(c)(iii) below or the Credit Agreement shall be automatically released upon such
disbursement, and such disbursements shall be made free and clear of any Lien of the
Administrative Agent or any Lender.

     (b) Amount of Cash Collateral. On the Closing Date, the Parent shall deposit
in the Cash Collateral Account an amount in Dollars equal $16,500,000.

     (c) Access to Amounts in Cash Collateral Account.

     (i) The Cash Collateral Account will be an account maintained with the Bank in
the name of the Parent for the benefit of the Administrative Agent. The amounts in
the Cash Collateral Account will be held for the sole benefit of the Administrative
Agent. Subject to clause 2(c)(ii) and 2(c)(iii) below, the Parent agrees that the
Administrative Agent is the sole party authorized to withdraw amounts from, to draw
upon, or to otherwise exercise any powers with respect to the Cash Collateral
Account, and that the Parent shall have no authority to withdraw any amounts from,
to draw upon, or to otherwise exercise any power as a depositor, owner or otherwise
with respect to the Cash Collateral Account and the funds deposited therein.

     (ii) So long as no Default or Event of Default shall have occurred and be
continuing, the Parent shall be entitled to receive distributions and dividends on
the Cash Collateral upon request free and clear of any Liens in favor of the
Administrative Agent; provided, however, that (A) the balance of
funds in the Cash Collateral Account shall at all times be greater than or equal to
$16,500,000 less the amount of Cash Collateral released by the Administrative Agent
to the Parent pursuant to Section 5.12(b) of the Credit Agreement and (B) the Parent
may request such distributions and dividends no more frequently than once per
quarter.

2

 

     (iii) The Cash Collateral shall be released to the Parent, free and clear of
any Liens in favor of the Administrative Agent, on the terms and conditions set
forth in Section 5.12(b) of the Credit Agreement.

     (d) Further Assurances. The Parent shall execute and deliver to the
Administrative Agent such documents and agreements (including, without limitation, any
account control agreements), and shall take or cause to be taken such actions, as the
Administrative Agent may, from time to time, request to carry out the terms and conditions
of this Agreement and the other Credit Documents, including, without limitation, any and all
other filings and recordings reasonably deemed necessary by the Administrative Agent to
ensure that the Administrative Agent has a first priority perfected security interest in the
Cash Collateral Account. The Parent agrees that it is obligated to pay all customary and
reasonable bank charges resulting from the Cash Collateral Account.

3. Representations and Warranties. The Parent hereby represents and warrants that:

     (a) it has the corporate right, power and authority to execute, deliver and perform
this Agreement and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement;

     (b) this Agreement constitutes the legal, valid and binding obligation of the Parent
enforceable against it in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by the availability of equitable remedies;

     (c) the execution, delivery and performance of this Agreement will not violate any
provision of any applicable law or material contractual obligation of the Parent;

     (d) no consent or authorization of, filing with, or other act by or in respect of, any
arbitrator or governmental authority and no consent of any other person or entity
(including, without limitation, any stockholder or creditor of such person or entity), is
required in connection with the execution, delivery, performance, validity or enforceability
of this Agreement; provided, it is understood and agreed that the Parent’s corporate
owner, Glenayre Technologies, Inc., is required to file this Agreement with the US
Securities and Exchange Commission; and

     (e) it is the legal and beneficial owner of the Cash Collateral, free and clear of any
adverse claims.

4. Miscellaneous.

     (a) Notices. All notices and other communications to the Administrative Agent
hereunder shall be in writing and shall be given in accordance with Section 9.2 of the
Credit Agreement. All notices and other communications to the Parent hereunder shall be in
writing and shall be given in accordance with Section 17 of the Parent Pledge Agreement.

3

 

     (b) Survival of Agreement. All covenants, agreements, representations and
warranties made by the Parent herein and in the certificates or other instruments prepared
or delivered in connection with or pursuant to this Agreement shall be considered to have
been relied upon by the Administrative Agent regardless of any investigation made by the
Administrative Agent or on its behalf, and shall continue in full force and effect as long
as any Cash Collateral remains in the Cash Collateral Account.

     (c) Binding Effect; Termination.

     (i) This Agreement shall be binding upon and inure to the benefit of the Parent
and the Administrative Agent and their respective successors and assigns;
provided that the Parent may not assign or transfer any of its rights or
obligations hereunder or any of its interests in the Cash Collateral Account without
prior written consent of the Administrative Agent.

     (ii) The term of this Agreement shall be until the earlier to occur of (a) the
indefeasible payment in full of the Secured Obligations or (b) the release of all of
the Cash Collateral as provided by Section 2(c)(iii) above.

     (d) No Waiver; Remedies Cumulative. No failure or delay on the part of the
Administrative Agent in exercising any right, power or privilege hereunder and no course of
dealing between the Parent and the Administrative Agent shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Administrative Agent would otherwise have. No notice to or
demand on the Parent in any case shall entitle the Parent to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent to any other or further action in any circumstances without notice or
demand.

     (e) Amendments, Waivers and Consents. Neither this Agreement nor any of the
terms hereof may be amended, changed, waived, discharged or terminated unless such
amendment, change, waiver, discharge or termination is in writing signed by each of the
parties hereto.

     (f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in making
proof of this Agreement to produce or account for more than one such counterpart. Delivery
of executed counterparts of this Agreement by telecopy shall be effective as an original and
shall constitute a representation that an original shall be delivered.

     (g) Headings. The headings of the sections and subsections hereof are provided
for convenience only and shall not in any way affect the meaning or construction of any
provision of this Agreement.

4

 

     (h) Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Venue.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES). The terms of Sections
9.14 and 9.17 of the Credit Agreement are incorporated herein by reference, mutatis
mutandis, and the parties hereto agree to such terms.

     (i) Severability. If any provision of this Agreement is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without giving
effect to the illegal, invalid or unenforceable provisions.

     (j) Entirety. This Agreement represents the entire agreement of the parties
hereto regarding the subject matter hereof, and supersedes all prior agreements and
understandings, oral or written, if any.

[Signature Page Follows]

5

 

     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to
be duly executed and delivered as of the date first above written.

	 	 	 	 	 	 	 
	PARENT:	 	GLENAYRE ELECTRONICS, INC.,	 	 
	 	 	a Colorado corporation	 	 
	 
	 	 	 	 	 	 
	

	 	By	 	/s/ DEBRA ZIOLA	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	Debra Ziola	 	 
	

	 	Title:	 	Chief Financial Officer	 	 

Entertainment Distribution Company, LLC

Cash Collateral Agreement

 

 

	 	 	 	 	 	 	 
	ADMINISTRATIVE AGENT:	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as	 	 
	 	 	Administrative Agent under the Credit Agreement	 	 
	 
	 	 	 	 	 	 
	

	 	By	 	/s/ JOHN C. COFFIN	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	John C. Coffin	 	 
	

	 	Title:	 	Senior Vice President	 	 

Entertainment Distribution Company, LLC

Cash Collateral Agreement

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