Document:

exv10w1

Exhibit 10.1

 

[Published CUSIP Number:                     ]

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of June 9, 2008

among

FLOW INTERNATIONAL CORPORATION,

as the Borrower,

BANK OF AMERICA, N.A.,

as Agent, Swing Line Lender

and

L/C Issuer,

U.S. BANK NATIONAL ASSOCIATION,

as Documentation Agent,

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION	 	PAGE	 
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	1.01 Defined Terms
	 	 	1	 
	1.02 Other Interpretive Provisions
	 	 	22	 
	1.03 Accounting Terms
	 	 	23	 
	1.04 Rounding
	 	 	24	 
	1.05 Times of Day
	 	 	24	 
	1.06 Letter of Credit Amounts
	 	 	24	 
	 
	 	 	 	 
	ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS
	 	 	24	 
	2.01 Revolving Loans and Term Loans
	 	 	24	 
	2.02 Borrowings, Conversions and Continuations of Loans
	 	 	25	 
	2.03 Letters of Credit
	 	 	26	 
	2.04 Swing Line Loans
	 	 	35	 
	2.05 Prepayments
	 	 	37	 
	2.06 Termination or Reduction of Commitments
	 	 	38	 
	2.07 Repayment of Loans
	 	 	39	 
	2.08 Interest
	 	 	39	 
	2.09 Fees
	 	 	40	 
	2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable
Rate
	 	 	41	 
	2.11 Evidence of Debt
	 	 	41	 
	2.12 Payments Generally; Agent’s Clawback
	 	 	42	 
	2.13 Sharing of Payments by Lenders
	 	 	44	 
	2.14 Increase in Commitments
	 	 	45	 
	 
	 	 	 	 
	ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
	 	 	46	 
	3.01 Taxes
	 	 	46	 
	3.02 Illegality
	 	 	48	 
	3.03 Inability to Determine Rates
	 	 	49	 
	3.04 Increased Costs
	 	 	49	 
	3.05 Compensation for Losses
	 	 	50	 
	3.06 Mitigation Obligations; Replacement of Lenders
	 	 	51	 
	3.07 Survival
	 	 	51	 
	 
	 	 	 	 
	ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
	 	 	51	 
	4.01 Conditions of Initial Credit Extension
	 	 	52	 
	4.02 Conditions to all Credit Extensions
	 	 	53	 
	4.03 Conditions to Term Borrowing
	 	 	54	 
	 
	 	 	 	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES
	 	 	55	 
	5.01 Existence, Qualification and Power
	 	 	55	 
	5.02 Authorization; No Contravention
	 	 	55	 

i

 

	 	 	 	 	 
	SECTION	 	PAGE	 
	5.03 Governmental Authorization; Other Consents
	 	 	55	 
	5.04 Binding Effect
	 	 	55	 
	5.05 Financial Statements; No Material Adverse Effect
	 	 	55	 
	5.06 Litigation
	 	 	56	 
	5.07 No Default
	 	 	56	 
	5.08 Ownership of Property; Liens
	 	 	56	 
	5.09 Environmental Compliance
	 	 	56	 
	5.10 Insurance
	 	 	57	 
	5.11 Taxes
	 	 	57	 
	5.12 ERISA Compliance
	 	 	57	 
	5.13 Subsidiaries; Equity Interests
	 	 	58	 
	5.14 Margin Regulations; Investment Company Act
	 	 	58	 
	5.15 Disclosure
	 	 	58	 
	5.16 Compliance with Laws
	 	 	58	 
	5.17 Taxpayer Identification Number
	 	 	59	 
	5.18
Intellectual Property; Licenses, Etc.
	 	 	59	 
	5.19 Rights in Collateral; Priority of Liens
	 	 	59	 
	 
	 	 	 	 
	ARTICLE VI. AFFIRMATIVE COVENANTS
	 	 	59	 
	6.01 Financial Statements
	 	 	59	 
	6.02 Certificates; Other Information
	 	 	60	 
	6.03 Notices
	 	 	62	 
	6.04 Payment of Obligations
	 	 	62	 
	6.05
Preservation of Existence, Etc.
	 	 	62	 
	6.06 Maintenance of Properties
	 	 	63	 
	6.07 Maintenance of Insurance
	 	 	63	 
	6.08 Compliance with Laws
	 	 	63	 
	6.09 Books and Records
	 	 	63	 
	6.10 Inspection Rights
	 	 	63	 
	6.11 Use of Proceeds
	 	 	64	 
	6.12 Additional Guarantors
	 	 	64	 
	6.13 Collateral Records
	 	 	64	 
	6.14 Security Interests
	 	 	64	 
	6.15 Swap Contracts
	 	 	65	 
	 
	 	 	 	 
	ARTICLE VII. NEGATIVE COVENANTS
	 	 	65	 
	7.01 Liens
	 	 	65	 
	7.02 Investments
	 	 	66	 
	7.03 Indebtedness
	 	 	66	 
	7.04 Fundamental Changes
	 	 	67	 
	7.05 Dispositions
	 	 	68	 
	7.06 Restricted Payments
	 	 	68	 
	7.07 Change in Nature of Business
	 	 	69	 
	7.08 Transactions With Affiliates
	 	 	69	 
	7.09 Burdensome Agreements
	 	 	69	 
	7.10 Use of Proceeds
	 	 	69	 
	7.11 Financial Covenants
	 	 	69	 

ii

 

	 	 	 	 	 
	SECTION	 	PAGE	 
	ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
	 	 	70	 
	8.01 Events of Default
	 	 	70	 
	8.02 Remedies Upon Event of Default
	 	 	72	 
	8.03 Application of Funds
	 	 	72	 
	 
	 	 	 	 
	ARTICLE IX. ADMINISTRATIVE AGENT
	 	 	73	 
	9.01 Appointment and Authorization of Administrative Agent.
	 	 	73	 
	9.02 Rights as a Lender
	 	 	74	 
	9.03 Exculpatory Provisions
	 	 	74	 
	9.04 Reliance by Administrative Agent
	 	 	75	 
	9.05 Delegation of Duties
	 	 	75	 
	9.06 Resignation of Agent
	 	 	75	 
	9.07 Non-Reliance on Agent and Other Lenders
	 	 	76	 
	9.08 No
Other Duties, Etc.
	 	 	76	 
	9.09 Administrative Agent May File Proofs of Claim
	 	 	76	 
	9.10 Collateral and Guaranty Matters
	 	 	77	 
	 
	 	 	 	 
	ARTICLE X. MISCELLANEOUS
	 	 	77	 
	10.01
Amendments, Etc.
	 	 	77	 
	10.02 Notices; Effectiveness; Electronic Communication
	 	 	79	 
	10.03 No Waiver; Cumulative Remedies
	 	 	81	 
	10.04 Expenses; Indemnity; Damage Waiver
	 	 	81	 
	10.05 Payments Set Aside
	 	 	83	 
	10.06 Successors and Assigns
	 	 	83	 
	10.07 Treatment of Certain Information; Confidentiality
	 	 	87	 
	10.08 Right of Setoff
	 	 	88	 
	10.09 Interest Rate Limitation
	 	 	89	 
	10.10 Counterparts; Integration; Effectiveness
	 	 	89	 
	10.11 Survival of Representations and Warranties
	 	 	89	 
	10.12 Severability
	 	 	89	 
	10.13 Replacement of Lenders
	 	 	90	 
	10.14
Governing Law; Jurisdiction; Etc.
	 	 	90	 
	10.15 Waiver of Jury Trial
	 	 	91	 
	10.16 No Advisory or Fiduciary Responsibility
	 	 	91	 
	10.17 Electronic Execution of Assignments and Certain Other Documents
	 	 	92	 
	10.18 USA PATRIOT Act Notice
	 	 	92	 
	10.19 Time of the Essence
	 	 	92	 
	10.20 Amendment and Restatement
	 	 	92	 
	10.21 Oral Agreements Not Enforceable
	 	 	93	 

	 	 	 
	SCHEDULES
	 	 
	1.01
	 	Special Adjustments to Consolidated Adjusted EBITDA
	2.01
	 	Commitments and Applicable Percentages
	5.06
	 	Litigation

iii

 

	 	 	 
	5.13
	 	Subsidiaries and Other Equity Investments
	7.01
	 	Existing Liens
	7.03
	 	Existing Indebtedness
	10.02
	 	Agent's Office, Certain Addresses for Notices

	 	 	 
	EXHIBITS
	 	 
	Form of
	 	 
	A
	 	Loan Notice
	B
	 	Swing Line Loan Notice
	C-1
	 	Revolving Note
	C-2
	 	Term Note
	D
	 	Compliance Certificate
	E
	 	Guaranty Agreement
	F-1
	 	Borrower Pledge Agreement
	F-2
	 	Guarantor Pledge Agreement
	G-1
	 	Borrower Security Agreement
	G-2
	 	Guarantor Security Agreement
	H-1
	 	Assignment and Assumption
	H-2
	 	Administrative Questionnaire

iv

 

AMENDED AND RESTATED CREDIT AGREEMENT

     This AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as of
June 9, 2008, among FLOW INTERNATIONAL CORPORATION, a Washington corporation (the
“Borrower”), each lender from time to time party hereto (collectively, the
“Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.

Recitals

     WHEREAS, Bank of America, N.A. and U.S. Bank National Association, as lenders, Bank of
America, N.A., as administrative agent for such lenders, swing line lender and L/C issuer, and the
Borrower are parties to that certain Credit Agreement dated as of July 8, 2005 (as amended prior to
the date hereof, the “Existing Credit Agreement”); and

     WHEREAS, the Borrower has requested that the Lenders enter into this Agreement to amend and
restate the Existing Credit Agreement (including the inclusion of additional lenders) and continue
to provide a revolving credit facility to the Borrower and to re-finance amounts owing under the
Existing Credit Agreement, and the Lenders are willing to do so on the terms and conditions set
forth herein.

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

1. 

DEFINITIONS AND ACCOUNTING TERMS

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

     “Acquisition” means the acquisition by Borrower of all or substantially all of the
Equity Interests of OMAX.

     “Acquisition Adjustment Amount” has the meaning specified in Schedule 1.01.

     “Acquisition Adjustment Calculation Date” has the meaning specified in Schedule
1.01.

     “Acquisition Closing Date” means the date of the consummation of the Acquisition.

     “Administrative Questionnaire” means an Administrative Questionnaire in substantially
the form of Exhibit H-2 or any other form approved by Agent.

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

 

 

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

     “Agent’s Office” means Agent’s address and, as appropriate, account as set forth on
Schedule 10.02, or such other address or account as Agent may from time to time notify
Borrower and Lenders.

     “Aggregate Commitments” means Aggregate Revolving Commitments and the Aggregate Term
Commitments.

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

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

     “Agreement” means this Amended and Restated Credit Agreement.

     “Applicable Percentage” means with respect to any Lender at any time, (a) the
percentage (carried out to the ninth decimal place) of the Aggregate Revolving Commitments
represented by such Lender’s Revolving Commitment at such time or (b) with respect to matters
relating to the Term Commitments and Term Loans only, the percentage (carried out to the ninth
decimal place) of the Aggregate Term Commitments represented by such Lender’s Term Commitment at
such time. If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8(b) or if the
Aggregate Revolving Commitments and/or Aggregate Term Commitments have expired, then the Applicable
Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments. The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or
in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.

     “Applicable Rate” means, from time to time, the following percentages per annum, based
upon the Leverage Ratio as set forth in the most recent Compliance Certificate received by Agent
pursuant to Section 6.02(b):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Consolidated	 	Commitment	 	 	 	 	 	 
	Pricing	 	Leverage	 	Fee/Ticking	 	Eurodollar	 	Base Rate	 	Letters of
	Level	 	Ratio	 	Fee	 	Rate +	 	+	 	Credit
	1
	 	 	32.50	 	 	 	.50	%	 	 	2.00	%	 	 	0	%	 	 	2.00	%
	2
	 	31.75:1 but <2.50	 	 	.375	%	 	 	1.75	%	 	 	0	%	 	 	1.75	%
	3
	 	31.00:1 but <1.75:1	 	 	.25	%	 	 	1.50	%	 	 	0	%	 	 	1.50	%
	4
	 	 	<1.00:1	 	 	 	.25	%	 	 	1.25	%	 	 	0	%	 	 	1.25	%

 

 

     Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated
Leverage Ratio shall become effective as of the first Business Day immediately following the date a
Compliance Certificate is required to be delivered pursuant to Section 6.02(a);
provided, however, that if a Compliance Certificate is not delivered when due in
accordance with such Section, then, at the request of Required Lenders, Pricing Level 1 shall apply
as of the first Business Day of the month following the date such Compliance Certificate was
required to have been delivered and shall remain in effect until the date on which such Compliance
Certificate is delivered. The Applicable Rate in effect as of the Closing Date shall be determined
based on the Consolidated Leverage Ratio in the certificate required under Section
4.01(a)(vii) as a condition precedent to the initial Credit Extension. Such Applicable Rate
shall remain in effect until the first Business Day immediately following the delivery of the first
Compliance Certificate required under Section 6.02(a). Thereafter, the Applicable Rate
shall be increased or decreased as set forth above based on the successive Compliance Certificates
or, as applicable, the Compliance Certificate due dates. Notwithstanding the foregoing, however,
during the period between the delivery of the Term Loan Pricing Certificate and the Compliance
Certificate required under Section 6.02(a) immediately following such Term Loan Pricing
Certificate, the Applicable Rate shall be determined based on the Consolidated Leverage Ratio in
the Term Loan Pricing Certificate.

     Notwithstanding anything to the contrary contained in this definition, the determination of
the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).

     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.

     “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger
and sole book manager.

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

     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by
Section 10(f)(ii)), and accepted by Agent, in substantially the form of Exhibit H-1
or any other form approved by Agent.

     “Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

     “Audited Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended April 30, 2007, and the related

 

 

consolidated statements of income or operations, shareholders’ equity and cash flows for such
fiscal year of the Borrower and its Subsidiaries, including the notes thereto.

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

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

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

     “Base Rate Revolving Loan” means a Revolving Loan that is a Base Rate Loan.

     “Base Rate Term Loan” means a Term Loan that is a Base Rate Loan.

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

     “Borrower Materials” has the meaning specified in Section 6(b).

     “Borrower Pledge Agreement” means the Amended and Restated Pledge Agreement in favor
of Agent dated as of June 9, 2008 made by the Borrower in substantially the form of
Exhibit F-1.

     “Borrower Security Agreement” means the Amended and Restated Security Agreement in
favor of Agent dated as of June 9, 2008 made by the Borrower in substantially the form of
Exhibit G-1.

     “Borrowing” means a Revolving Borrowing, a Term Borrowing or a Swing Line Borrowing,
as the context may require.

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

     “Cash Collateralize” has the meaning specified in Section 2(c)(vii).

     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority.

 

 

     “Change of Control” means,

     (a) with respect to Borrower, an event or series of events by which:

     (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan of
such person or its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan) becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right to
acquire, whether such right is exercisable immediately or only after the passage of
time (such right, an “option right”)), directly or indirectly, of 25% or more of the
Equity Interests of Borrower entitled to vote for members of the board of directors
or equivalent governing body of Borrower on a fully-diluted basis (and taking into
account all such securities that such person or group has the right to acquire
pursuant to any option right);

     (ii) during any period of 12 consecutive months, a majority of the members of
the board of directors or other equivalent governing body of Borrower cease to be
composed of individuals (A) who were members of that board or equivalent governing
body on the first day of such period, (B) whose election or nomination to that board
or equivalent governing body was approved by individuals referred to in clause (A)
above constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body or (C) whose election or nomination to that
board or other equivalent governing body was approved by individuals referred to in
clauses (A) and (B) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body (excluding, in the case
of both clause (B) and clause (C), any individual whose initial nomination for, or
assumption of office as, a member of that board or equivalent governing body occurs
as a result of an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf of the board
of directors); or

     (iii) any Person or two or more Persons acting in concert shall have acquired
by contract or otherwise, or shall have entered into a contract or arrangement that,
upon consummation thereof, will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence over the management or
policies of Borrower, or control over the Equity Interests of Borrower entitled to
vote for members of the board of directors or equivalent governing body of Borrower
on a fully-diluted basis (and taking into account all such securities that such
Person(s) or group has the right to acquire pursuant to any option right)
representing 25% or more of the combined voting power of such Equity Interests;

 

 

     (b) with respect to each Guarantor, an event or series of events by which Borrower
ceases to directly or indirectly own and control all of the Equity Interests of such
Guarantor.

     “Closing Date” means the first date all the conditions precedent in
Section 4(a) are satisfied or waived in accordance with Section 10(a).

     “Code” means the Internal Revenue Code of 1986.

     “Collateral” shall mean any and all assets and rights and interests in or to property
of Borrower and each of the other Loan Parties, whether real or personal, tangible or intangible,
in which a Lien is granted or purported to be granted pursuant to the Collateral Documents.

     “Collateral Documents” means, collectively, the Borrower Security Agreement, the
Guarantor Security Agreement, the Borrower Pledge Agreement, the Guarantor Pledge Agreement and all
agreements, instruments and documents now or hereafter executed and delivered in connection with
this Agreement, including without limitation the Indiana Mortgage, pursuant to which Liens are
granted or purported to be granted to Agent in Collateral securing all or part of the Obligations
each in form and substance satisfactory to Agent.

     “Commitment” means, as to each Lender, its Revolving Commitment and its Term
Commitment.

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

     “Consolidated Adjusted EBITDA” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period
plus

     (a) the following to the extent deducted in calculating such Consolidated Net Income:
(i) Consolidated Interest Charges for such period, (ii) the provision for Federal, state, local and
foreign income taxes payable by the Borrower and its Subsidiaries for such period,
(iii) depreciation and amortization expense of the Borrower and its Subsidiaries, (iv) other
non-cash expenses of the Borrower and its Subsidiaries reducing such Consolidated Net Income which
do not represent a cash item in such period or any future period, (v) in the case of any
calculation of “Consolidated Adjusted EBITDA” made as of any Flow Adjustment Calculation Date, the
Flow Add-back Adjustment Amount corresponding to such date, and (vi) in the event the Acquisition
is consummated, in the case of any calculation of “Consolidated Adjusted EBITDA” made as of any
Acquisition Adjustment Calculation Date, the Acquisition Adjustment Amount corresponding to such
date; minus

     (b) the following to the extent included in calculating such Consolidated Net Income:
(i) Federal, state, local and foreign income tax credits of the Borrower and its Subsidiaries for
such period, (ii) all non-cash items increasing Consolidated Net Income for such period, and (iii)
in the case of any calculation of “Consolidated Adjusted EBITDA” made as of any Flow Adjustment
Calculation Date, the Flow Add-away Adjustment Amount corresponding to such date.

 

 

     “Consolidated Funded Indebtedness” means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal
amount of all obligations, whether current or long-term, for borrowed money (including Obligations
hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety
bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course of business),
(e) Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations,
(f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types
specified in clauses (a) through (e) above of Persons other than the Borrower or any Subsidiary,
and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which the Borrower or a Subsidiary is a general partner or joint venturer,
unless such Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary.

     “Consolidated Interest Charges” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount,
fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed
money (including capitalized interest) or in connection with the deferred purchase price of assets,
in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent
expense of the Borrower and its Subsidiaries with respect to such period under capital leases that
is treated as interest in accordance with GAAP.

     “Consolidated Interest Coverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Adjusted EBITDA for the period of the four prior fiscal quarters ending
on such date to (b) Consolidated Interest Charges for such period.

     “Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a)
Consolidated Funded Indebtedness as of such date to (b) Consolidated Adjusted EBITDA for the period
of the four fiscal quarters most recently ended.

     “Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries
on a consolidated basis, the net income of the Borrower and its Subsidiaries for that period.

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

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

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

 

 

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

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

     “Default Rate” means (a) when used with respect to Obligations other than L/C Fees an
interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable
to Base Rate Loans plus (iii) 2% per annum; provided, however, that with
respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest
rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum,
and (b) when used with respect to L/C Fees, a rate equal to the Applicable Rate plus 2% per
annum.

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

     “Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by any Person, including
any sale, assignment, transfer or other disposal, with or without recourse, of any notes or
accounts receivable or any rights and claims associated therewith.

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

     “Domestic Material Subsidiary” means any Domestic Subsidiary that is not an Immaterial
Subsidiary.

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

     “Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 10(f)(ii)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10(f)(ii)(iii)).

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including

 

 

those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

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

     “Equity Interests” means, with respect to any Person, all of the shares of capital
stock of (or other ownership or profit interests in) such Person, all of the warrants, options or
other rights for the purchase or acquisition from such Person of shares of capital stock of (or
other ownership or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.

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

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

     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or any ERISA
Affiliate.

     “Eurodollar Base Rate” has the meaning specified in the definition of Eurodollar Rate.

 

 

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

	 	 	 	 	 
	Eurodollar Rate =

	 	Eurodollar Base Rate
 

1.00 — Eurodollar Reserve Percentage
	 	 

     Where,

     “Eurodollar Base Rate” means, for such Interest Period, the rate per annum
equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or other commercially available source providing quotations of BBA LIBOR as
designated by the Agent from time to time) at approximately 2:00 p.m., London time, two
Business Days prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the “Eurodollar
Base Rate” for such Interest Period shall be the rate per annum determined by the Agent to
be the rate at which deposits in Dollars for delivery on the first day of such Interest
Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made,
continued or converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London interbank
eurodollar market at their request at approximately 2:00 p.m. (London time) two Business
Days prior to the commencement of such Interest Period.

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

     “Eurodollar Rate Loan” means each Eurodollar Rate Revolving Loan and each Eurodollar
Rate Term Loan.

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

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

     “Event of Default” has the meaning specified in Section 8(a).

 

 

     “Excluded Taxes” means, with respect to Agent, any Lender, the L/C Issuer or any other
recipient of any payment to be made by or on account of any obligation of the Borrower hereunder,
(a) taxes imposed on or measured by its overall net income (however denominated), and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable Lending Office is located,
(b) any branch profits taxes imposed by the United States or any similar tax imposed by any other
jurisdiction in which the Borrower is located, and (c) any backup withholding tax that is required
by the Code to be withheld from amounts payable to a Lender that has failed to comply with clause
(A) of Section 3.01(e)(ii).

     “Existing Credit Agreement” has the meaning specified in the Recitals.

     “Existing Letters of Credit” means the following letters of credit issued by Bank of
America under the Existing Credit Agreement:

	 	 	 	 	 	 	 	 	 
	Letter of Credit	 	 	 	 
	No.	 	Amount	 	Expiration Date
	3077450
	 	$	1,500,000	 	 	July 8, 2008
	3090317
	 	$	381,530.46	 	 	October 23, 2008
	3090317
	 	$	286,147.85	 	 	February 22, 2009

     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by Agent.

     “Fee Letter” means the letter agreement, dated April 7, 2008, among the Borrower,
Agent and the Arranger.

     “Flow Add-away Adjustment Amount” has the meaning specified in Schedule 1.01.

     “Flow Add-back Adjustment Amount” has the meaning specified in Schedule 1.01.

     “Flow Adjustment Calculation Date” has the meaning specified in Schedule 1.01.

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

 

 

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

     “GAAP” means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied.

     “Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central
Bank).

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

     “Guarantor Pledge Agreement” means the Pledge Agreement in favor of Agent to be made
by the Guarantors in substantially the form of Exhibit F-2, and to be entered into by
additional Domestic Material Subsidiaries from time to time thereafter in accordance with this
Agreement.

     “Guarantor Security Agreement” means the Security Agreement in favor of Agent to be
made by the Guarantors in substantially the form of Exhibit G-2, and to be entered into by

 

 

additional Domestic Material Subsidiaries from time to time thereafter in accordance with this
Agreement.

     “Guarantors” means OMAX (following the consummation of the Acquisition, if the
Acquisition is consummated) and each other Domestic Material Subsidiary from time to time a party
to the Guaranty.

     “Guaranty” means the Guaranty Agreement in favor of Lenders, L/C Issuer and Agent to
be made by Guarantors in substantially the form of Exhibit E, and to be entered into by
additional Domestic Material Subsidiaries from time to time thereafter in accordance with this
Agreement.

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

     “Immaterial Subsidiary” means a Subsidiary that has assets or operations that are not
material to the assets or operations of the Borrower, taken as a whole, except that a Subsidiary
that had assets or operations that were not material to the assets or operations of the Borrower,
taken as a whole, as of the date of this Agreement but has assets or operations that are material
to the assets or operations of the Borrower, taken as a whole, at any time thereafter shall not be
deemed an Immaterial Subsidiary from and after the date it has assets or operations that are
material to the assets or operations of the Borrower, taken as a whole.

     “Indebtedness” means, as to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

     (a) all obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

     (b) all direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments;

     (c) net obligations of such Person under any Swap Contract;

     (d) all obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business and, in each
case, not past due for more than 60 days after the date on which such trade account payable
became due);

     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;

 

 

     (f) capital leases and Synthetic Lease Obligations;

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

     (h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such
date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such date.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitees” has the meaning specified in Section 10(d)(ii).

     “Indiana Mortgage” means that certain Amended and Restated Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Filing made by Borrower in favor of Agent
dated of even date herewith securing certain real property of Borrower located in Clark County,
Indiana.

     “Information” has the meaning specified in Section 10(g).

     “Intangible Assets” means assets that are considered to be intangible assets under
GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks,
patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and
capitalized research and development costs.

     “Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the
last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however,
that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates
that fall every three months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business
Day of each January, April, July and October and the Maturity Date.

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

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

 

 

     (ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and

     (iii) no Interest Period shall extend beyond the Maturity Date.

     “Investment” means, as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit. For purposes of covenant compliance,
the amount of any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

     “IP Rights” has the meaning specified in Section 5(r).

     “IRS” means the United States Internal Revenue Service.

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

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

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

     “L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

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

     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.

 

 

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

     “L/C Expiration Date” means the day that is thirty days prior to the Maturity Date
then in effect (or, if such day is not a Business Day, the next preceding Business Day).

     “L/C Fee” has the meaning specified in Section 2(c)(ix).

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

     “L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available
to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section (f). For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.

     “L/C Sublimit” means an amount equal to $25,000,000. The L/C Sublimit is part of, and
not in addition to, the Aggregate Revolving Commitments.

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

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

     “Letter of Credit” means any standby letter of credit issued hereunder and shall
include the Existing Letters of Credit.

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

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

     “Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee
Letter, each Collateral Document and the Guaranty.

 

 

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

     “Loan Parties” means, collectively, Borrower and each Person (other than Agent, the
L/C Issuer, any Swing Line Lender or any Lender) executing a Loan Document including, without
limitation, each Guarantor and each Person executing a Collateral Document.

     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual or contingent),
condition (financial or otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole; (b) an impairment of the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party if such impairment materially affects
the ability of the Loan Parties, taken as a whole, fully and timely to perform their obligations
under the Loan Documents; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document to which it is a party.

     “Maturity Date” means June 9, 2013; provided, however, that if such
date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

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

     “Note” means each Revolving Note and each Term Note.

     “Obligations” means (a) all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect
to any Loan or Letter of Credit, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or hereafter arising and
(b) all debts, liabilities, obligations, covenants and duties of the Borrower owing to any Lender
or any Affiliate of any Lender and arising under any Swap Contract permitted by
Section 7(c)(iv), whether absolute or contingent, due or to become due, now existing or
hereafter arising, and, in each case, including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any
Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding.

     “OMAX” means OMAX Corporation, a Washington corporation.

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

 

 

instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.

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

     “Outstanding Amount” means (i) with respect to Revolving Loans and Swing Line Loans on
any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings
and prepayments or repayments of Revolving Loans and Swing Line Loans, as the case may be,
occurring on such date; (ii) with respect to any L/C Obligations on any date, the amount of such
L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date
and any other changes in the aggregate amount of the L/C Obligations as of such date, including as
a result of any reimbursements by Borrower of Unreimbursed Amounts; and (iii) with respect to Term
Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any
prepayments of Term Loans occurring on such date.

     “Participant” has the meaning specified in Section 10(f)(iv).

     “PBGC” means the Pension Benefit Guaranty Corporation.

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

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

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

     “Platform” has the meaning specified in Section 6(b).

     “Post-Acquisition Adjustments” has the meaning specified in Section 7.11(a).

     “Pre-Acquisition Adjustments” has the meaning specified in Section 7.11(a).

     “Public Lender” has the meaning specified in Section 6(b).

     “Register” has the meaning specified in Section 10(f)(iii).

 

 

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

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

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

     “Required Lenders” means, as of any date of determination, the Required Revolving
Lenders and the Required Term Loan Lenders.

     “Required Revolving Lenders” means, as of any date of determination, Lenders having
more than 66 2/3% of the Aggregate Revolving Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8(b), Lenders holding in the aggregate more than 66 2/3% of the
Revolving Outstandings (with the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for
purposes of this definition); provided that the Commitment of, and the portion of the
Revolving Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes
of making a determination of Required Revolving Lenders.

     “Required Term Loan Lenders” means, as of any date of determination, Lenders having
more than 66 2/3% of the Term Outstandings; provided that the portion of the Term
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making
a determination of Required Term Loan Lenders.

     “Responsible Officer” means the chief executive officer, president, chief financial
officer, secretary, treasurer, assistant treasurer or controller of a Loan Party and, solely for
purposes of notices given pursuant to Article II, any other officer or employee of the
applicable Loan Party so designated by any of the foregoing officers in a notice to the Agent. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Loan Party.

     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity Interest of
Borrower or any Subsidiary, or any payment (whether in cash, securities or other property),
including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other Equity Interest or on
account of any return of capital to Borrower’s stockholders, partners or members (or the equivalent
Person thereof).

 

 

     “Revolving Availability Period” means the period from and including the Closing Date
to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Revolving
Commitments pursuant to Section 2(f)(a), and (c) the date of termination of the commitment
of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions
pursuant to Section 8(b).

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

     “Revolving Commitment” means, as to each Lender, its obligation to (a) make Revolving
Loans to Borrower pursuant to Section 2(a)(a), (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such Lender’s name in Part
(a) of Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

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

     “Revolving Note” means a promissory note made by Borrower in favor of a Lender
evidencing Revolving Loans made by such Lender, substantially in the form of Exhibit C-1.

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

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

     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise controlled, directly,
or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary
or Subsidiaries of Borrower.

     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master agreement, and

 

 

(b) any
and all transactions of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master Agreement.

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

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

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

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

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

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

     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance sheet of such Person
but which, upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).

     “Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

     “Term Availability Period” means the period from and including the Closing Date to and
including the earlier of (i) the date that is six (6) months after the Closing Date and (ii) the
date of the Term Borrowing pursuant to Section 2.01(b); provided, that the Term
Availability Date may be sooner terminated as of the date of termination of the Aggregate Term
Commitments pursuant to Section 2.06(b) and as of the date of termination of the commitment
of each Lender

 

 

to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions
pursuant to Section 8(b).

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

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

     “Term Loan” has the meaning given in Section 2.01(b).

     “Term Loan Pricing Certificate” has the meaning given in Section 4.03(c)(iv).

     “Term Note” means a promissory note made by Borrower in favor of a Lender evidencing a
Term Loan made by such Lender, substantially in the form of Exhibit C-2.

     “Term Outstandings” means the aggregate Outstanding Amount of all Term Loans.

     “Threshold Amount” means $1,000,000.

     “Total Outstandings” means the Revolving Outstandings plus the Term Outstandings.

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

     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan pursuant to
Section 412 of the Code for the applicable plan year.

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

     “Unreimbursed Amount” has the meaning specified in Section 2(c)(iii)(i).

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

     (i) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to
have the same meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such

 

 

agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar
import when used in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference
to any law shall include all statutory and regulatory provisions consolidating, amending, replacing
or interpreting such law and any reference to any law or regulation shall, unless otherwise
specified, refer to such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.

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

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

     (c) Accounting Terms.

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

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

     (iii) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of Borrower and its Subsidiaries or to the determination of any
amount for Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in
each case, be deemed to include each variable interest entity that Borrower is required to
consolidate

 

 

pursuant to FASB Interpretation No. 46 — Consolidation of Variable Interest Entities:
an interpretation of ARB No. 51 (January 2003) as if such variable interest entity were a
Subsidiary as defined herein.

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

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

     (f) Letter of Credit Amounts. Unless otherwise specified herein the amount of a Letter of Credit at any time shall be
deemed to be the stated amount of such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of Credit that, by its terms or the terms of any
Issuer Document related thereto, provides for one or more automatic increases in the stated amount
thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of
such Letter of Credit after giving effect to all such increases, whether or not such maximum stated
amount is in effect at such time.

2. 

THE COMMITMENTS AND CREDIT EXTENSIONS

     (a) Revolving Loans and Term Loans.

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

     (ii) Subject to the terms and conditions set forth herein, each Lender severally agrees to
make a term loan (each such loan, a “Term Loan”) to the Borrower, on any Business Day
during the Term Availability Period, in an aggregate amount not to exceed the amount of such
Lender’s Term Commitment; provided, however, that Borrower may make only one Term
Borrowing and, after giving effect to such Term Borrowing, the Term Outstandings of any Lender
shall not exceed such Lender’s Term Commitment. Term Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.

 

 

     (b) Borrowings, Conversions and Continuations of Loans.

     (i) Each Borrowing, each conversion of Revolving Loans from one Type to the other, and each
continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to
Agent, which may be given by telephone. Each such notice must be received by Agent not later than
11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to
or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate
Revolving Loans, and (ii) on the requested date of any Borrowing of Base Rate Revolving Loans.
Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to Agent of a written Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $2,500,000 or a whole multiple of $500,000
in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each
Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Revolving Borrowing, a Term Borrowing, a
conversion of Revolving Loans from one Type to the other, a conversion of Term Loans from one Type
to the other, a continuation of Eurodollar Rate Revolving Loans, or a continuation of Eurodollar
Rate Term Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case
may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed,
converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be
converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the
Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a timely
notice requesting a conversion or continuation, then the applicable Loans shall be made as, or
converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective
as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to
have specified an Interest Period of one month. If the Borrower requests a borrowing but fails to
specify whether it is a
Revolving Loan or the Term Loan, the Borrower will be deemed to have specified a Revolving
Loan.

     (ii) Following receipt of a Loan Notice, Agent shall promptly notify each Lender of the amount
of its Applicable Percentage of the applicable Loans, and if no timely notice of a conversion or
continuation is provided by Borrower, Agent shall notify each Lender of the details of any
automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a
Borrowing, each Lender shall make the amount of its Loan available to Agent in immediately
available funds at Agent’s Office not later than 1:00 p.m. on the Business Day specified in the
applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in
Section 4(b) (and, if such Borrowing is the initial Credit Extension,
Section 4(a)), Agent shall make all funds so received available to Borrower in like funds
as received by Agent either by (i) crediting the account of Borrower on the books of Bank of
America with the amount of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) Agent by Borrower;
provided, however, that if, on the date the Loan Notice with respect to such
Revolving Borrowing is given by Borrower, there are

 

 

L/C Borrowings outstanding, then the proceeds
of such Borrowing first, shall be applied, to the payment in full of any such L/C Borrowings, and
second, shall be made available to Borrower as provided above.

     (iii) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or
converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the
existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate
Loans without the consent of the Required Lenders.

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

     (v) After giving effect to all Borrowings, all conversions of Loans from one Type to the
other, and all continuations of Loans as the same Type, there shall not be more than six (6)
Interest Periods in effect with respect to Loans.

     (c) Letters of Credit.

     (i) The Letter of Credit Commitment.

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

 

 

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

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

     2.3.1.2.2 the expiry date of such requested Letter of Credit would occur more
than one year after the L/C Expiration Date, unless all the Lenders have approved
such expiry date.

     (3) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:

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

     2.3.1.3.2 the issuance of such Letter of Credit would violate one or more
policies of the L/C Issuer applicable to letters of credit generally;

     2.3.1.3.3 except as otherwise agreed by Agent and the L/C Issuer, such Letter
of Credit is in an initial stated amount less than $25,000;

     2.3.1.3.4 such Letter of Credit is to be denominated in a currency other than
Dollars; or

     2.3.1.3.5 a default of any Lender’s obligations to fund under
Section (c)(iii) exists or any Lender is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into satisfactory arrangements with
Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such
Lender.

     (4) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under the terms
hereof.

     (5) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit

 

 

in
its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit
does not accept the proposed amendment to such Letter of Credit.

     (6) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer shall have
all of the benefits and immunities (A) provided to Agent in Article IX with respect
to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such
Letters of Credit as fully as if the term “Administrative Agent” or “Agent” as used in
Article IX included the L/C Issuer with respect to such acts or omissions, and
(B) as additionally provided herein with respect to the L/C Issuer.

     (ii) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of
Credit.

     (1) Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of Borrower delivered to the L/C Issuer (with a copy to Agent) in the form of an L/C
Application, appropriately completed and signed by a Responsible Officer of Borrower. Such
L/C Application must be received by the L/C Issuer and Agent not later than 2:00 p.m. at
least two Business Days (or such later date and time as Agent and the L/C Issuer may agree
in a particular instance in their sole discretion) prior to the proposed issuance date or
date of amendment, as the case may be. In the case of a request for an initial issuance of
a Letter of Credit, such L/C Application shall specify in form and detail satisfactory to
the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name
and address of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature
of the requested Letter of Credit; and (H) such other matters as the
L/C Issuer may require. In the case of a request for an amendment of any outstanding
Letter of Credit, such L/C Application shall specify in form and detail satisfactory to the
L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and
(D) such other matters as the L/C Issuer may require. Additionally, Borrower shall furnish
to the L/C Issuer and Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C
Issuer or Agent may require.

     (2) Promptly after receipt of any L/C Application at the address set forth in
Section 10(b) for receiving L/C Applications and related correspondence, the L/C
Issuer will confirm with Agent (by telephone or in writing) that Agent has received a copy
of such L/C Application from Borrower and, if not, the L/C Issuer will provide Agent with a
copy thereof. Unless the L/C Issuer has received written notice from any Lender, Agent or
any Loan Party, at least one Business Day prior to the requested date of issuance or
amendment of the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the terms and
conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit

 

 

for
the account of Borrower (or the applicable Subsidiary) or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase
from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the
product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.

     (3) If Borrower so requests in any applicable L/C Application, the L/C Issuer may, in
its sole and absolute discretion, agree to issue a Letter of Credit that has automatic
extension provisions (each, an “Auto-Extension Letter of Credit”); provided
that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such
extension at least once in each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed
upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C
Issuer, Borrower shall not be required to make a specific request to the L/C Issuer for any
such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall
be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of
such Letter of Credit at any time to an expiry date not later than one year after the L/C
Expiration Date; provided, however, that the L/C Issuer shall not permit any
such extension if (A) the L/C Issuer has determined that it would not be permitted, or would
have no obligation, at such time to issue such Letter of Credit in its revised form (as
extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of
Section (c)(i) or otherwise), or (B) it has received notice (which may be by
telephone or in writing) on or before the day that is seven Business Days before the
Non-Extension Notice Date (1) from Agent that the Required Revolving Lenders have elected
not to permit such extension or (2) from Agent, any Lender or Borrower that one or more of
the
applicable conditions specified in Section 4(b) is not then satisfied, and in
each such case directing the L/C Issuer not to permit such extension.

     (4) If the Borrower so requests in any applicable L/C Application, the L/C Issuer may,
in its sole and absolute discretion, agree to issue a Letter of Credit that permits the
automatic reinstatement of all or a portion of the stated amount thereof after any drawing
thereunder (each, an “Auto-Reinstatement Letter of Credit”). Unless otherwise
directed by the L/C Issuer, the Borrower shall not be required to make a specific request to
the L/C Issuer to permit such reinstatement. Once an Auto-Reinstatement Letter of Credit
has been issued, except as provided in the following sentence, the Lenders shall be deemed
to have authorized (but may not require) the L/C Issuer to reinstate all or a portion of the
stated amount thereof in accordance with the provisions of such Letter of Credit.
Notwithstanding the foregoing, if such Auto-Reinstatement Letter of Credit permits the L/C
Issuer to decline to reinstate all or any portion of the stated amount thereof after a
drawing thereunder by giving notice of such non-reinstatement within a specified number of
days after such drawing (the “Non-Reinstatement Deadline”), the L/C Issuer shall not
permit such reinstatement if it has

 

 

received a notice (which may be by telephone or in
writing) on or before the day that is seven Business Days before the Non-Reinstatement
Deadline (A) from Agent that the Required Revolving Lenders have elected not to permit such
reinstatement or (B) from Agent, any Lender or the Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then satisfied (treating such
reinstatement as an L/C Credit Extension for purposes of this clause) and, in each case,
directing the L/C Issuer not to permit such reinstatement.

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

     (iii) Drawings and Reimbursements; Funding of Participations.

     (1) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify Borrower and Agent thereof.
Not later than 2:00 p.m. on the date of any payment by the L/C Issuer under a Letter of
Credit (each such date, an “Honor Date”), Borrower shall reimburse the L/C Issuer
through Agent in an amount equal to the amount of such drawing. If Borrower fails to so
reimburse the L/C Issuer by such time, Agent shall promptly notify each Lender of the Honor
Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the
amount of such Lender’s Applicable Percentage thereof. In such event, Borrower shall be
deemed to have requested a Revolving Borrowing of Base Rate Loans to be disbursed on the
Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section (b) for the principal amount of Base Rate Loans, but
subject to the amount of the unutilized portion of the Aggregate Revolving Commitments and
the conditions set forth in Section 4(b) (other than the delivery of a Loan Notice).
Any notice given by the L/C Issuer or Agent
pursuant to this Section (c)(iii)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.

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

     (3) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving
Borrowing of Base Rate Loans because the conditions set forth in Section 4(b) cannot
be satisfied or for any other reason, Borrower shall be deemed to have incurred from the L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the Default Rate. In such event,

 

 

each Lender’s payment to Agent for the
account of the L/C Issuer pursuant to Section (c)(iii)(ii) shall be deemed payment
in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under this
Section (c).

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

     (5) Each Lender’s obligation to make Revolving Loans or L/C Advances to reimburse the
L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this
Section (c)(iii), shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right
which such Lender may have against the L/C Issuer, Borrower or any other Person for any
reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Revolving Loans
pursuant to this Section (c)(iii) is subject to the conditions set forth in
Section 4(b) (other than delivery by Borrower of a Loan Notice). No such making of
an L/C Advance shall relieve or otherwise impair the obligation of Borrower to reimburse the
L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.

     (6) If any Lender fails to make available to Agent for the account of the L/C Issuer
any amount required to be paid by such Lender pursuant to the foregoing provisions of this
Section (c)(iii) by the time specified in Section (c)(iii)(ii), the L/C
Issuer shall be entitled to recover from such Lender (acting through Agent), on demand, such
amount with interest thereon for the period from the date such payment is required
to the date on which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C
Issuer in accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the L/C Issuer in
connection with the foregoing. If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Revolving Loan included in the
relevant Revolving Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the
case may be. A certificate of the L/C Issuer submitted to any Lender (through Agent) with
respect to any amounts owing under this clause (vi) shall be conclusive absent manifest
error.

     (iv) Repayment of Participations.

     (1) At any time after the L/C Issuer has made a payment under any Letter of Credit and
has received from any Lender such Lender’s L/C Advance in respect of such payment in
accordance with Section (c)(iii), if Agent receives for the account of the L/C
Issuer any payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from Borrower or otherwise, including proceeds of Cash

 

 

Collateral applied
thereto by Agent), Agent will distribute to such Lender its Applicable Percentage thereof in
the same funds as those received by Agent.

     (2) If any payment received by Agent for the account of the L/C Issuer pursuant to
Section (c)(iii)(i) is required to be returned under any of the circumstances
described in Section 10(e) (including pursuant to any settlement entered into by the
L/C Issuer in its discretion), each Lender shall pay to Agent for the account of the L/C
Issuer its Applicable Percentage thereof on demand of Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such Lender, at a rate
per annum equal to the Federal Funds Rate from time to time in effect. The obligations of
Lenders under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

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

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

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

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

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

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

Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is
delivered to it and, in the event of any claim of noncompliance with Borrower’s

 

 

instructions or
other irregularity, Borrower will immediately notify the L/C Issuer. Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents
unless such notice is given as aforesaid.

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

     (vii) Cash Collateral. Upon the request of Agent, (i) if the L/C Issuer has honored
any full or partial drawing request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing, or (ii) if, as of the L/C Expiration Date, any L/C Obligation for any reason remains
outstanding, Borrower shall, in each case, immediately Cash Collateralize the then Outstanding
Amount of all L/C Obligations. Sections 2.05 and 8(b)(iii) set forth certain
additional requirements to deliver Cash Collateral hereunder. For purposes of this
Section 2.03, Section 2.05 and Section 8.02, “Cash Collateralize”
means to pledge and deposit with or deliver to Agent, for the benefit of the L/C Issuer and the
Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to Agent and the L/C Issuer (which documents are
hereby consented to by Lenders). Derivatives of such term have corresponding meanings. Borrower
hereby grants to Agent, for the benefit of the L/C Issuer and Lenders, a security interest in all
such cash, deposit accounts and all balances

 

 

therein and all proceeds of the foregoing. Cash
collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of
America.

     (viii) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer and
Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing
Letter of Credit), the rules of the ISP shall apply to each Letter of Credit.

     (ix) L/C Fees. Borrower shall pay to Agent for the account of each Lender in
accordance with its Applicable Percentage an L/C fee (the “L/C Fee”) equal to the
Applicable Rate times the daily amount available to be drawn under such Letter of Credit. For
purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount
of such Letter of Credit shall be determined in accordance with Section 1(f). L/C Fees
shall be (i) due and payable on the first Business Day after the end of each January, April, July
and October, commencing with the first such date to occur after the issuance of such Letter of
Credit, on the L/C Expiration Date and thereafter on demand and (ii) computed on a quarterly basis
in arrears. If there is any change in the Applicable Rate during any quarter, the daily amount
available to be drawn under each Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such Applicable Rate was in
effect. Notwithstanding anything to the contrary contained herein, upon the request of the
Required Revolving Lenders, while any Event of Default exists, all L/C Fees shall accrue at the
Default Rate.

     (x) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
Borrower shall pay directly to the L/C Issuer for its own account a fronting fee equal to twelve
and one-half basis points (0.125%), computed on the daily amount available to be drawn under such
Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable
on the tenth Business Day after the end of each January, April, July and October, in respect
of the most recently-ended quarterly period (or portion thereof, in the case of the first payment),
commencing with the first such date to occur after the issuance of such Letter of Credit, on the
L/C Expiration Date and thereafter on demand. For purposes of computing the daily amount available
to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1(f). In addition, Borrower shall pay directly to the L/C Issuer
for its own account the customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to
time in effect. Such customary fees and standard costs and charges are due and payable on demand
and are nonrefundable.

     (xi) Conflict with Issuer Documents. In the event of any conflict between the terms
hereof and the terms of any Issuer Document, the terms hereof shall control.

     (xii) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or is for the account
of, a Subsidiary, Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all
drawings under such Letter of Credit. Borrower hereby acknowledges that the issuance of Letters of
Credit for the account of Subsidiaries inures to the benefit of Borrower, and that Borrower’s
business derives substantial benefits from the businesses of such Subsidiaries.

 

 

     (d) Swing Line Loans.

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

     (ii) Borrowing Procedures. Each Swing Line Borrowing shall be made upon Borrower’s
irrevocable notice to Swing Line Lender and the Agent, which may be given by
telephone. Each such notice must be received by Swing Line Lender and the Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business
Day. Each such telephonic notice must be confirmed promptly by delivery to Swing Line Lender and
the Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of Borrower. Promptly after receipt by Swing Line Lender of any telephonic Swing Line Loan
Notice, Swing Line Lender will confirm with the Agent (by telephone or in writing) that the Agent
has also received such Swing Line Loan Notice and, if not, Swing Line Lender will notify the Agent
(by telephone or in writing) of the contents thereof. Unless Swing Line Lender has received notice
(by telephone or in writing) from the Agent (including at the request of any Lender) prior to 1:00
p.m. on the date of the proposed Swing Line Borrowing (A) directing Swing Line Lender not to make
such Swing Line Loan as a result of the limitations set forth in the first proviso to the first
sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Article IV is not then satisfied, then, subject to the terms and conditions hereof,
Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line
Loan Notice, make the amount of its Swing Line Loan available to Borrower at its office by
crediting the account of Borrower on the books of Swing Line Lender in immediately available funds.

 

 

     (iii) Refinancing of Swing Line Loans.

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

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

     (3) If any Lender fails to make available to the Agent for the account of Swing Line
Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of
this Section 2.04(c) by the time specified in Section 2.04(c)(i), Swing Line
Lender shall be entitled to recover from such Lender (acting through the Agent), on demand,
such amount with interest thereon for the period from the date such payment is required to
the date on which such payment is immediately available to Swing Line Lender at a rate per
annum equal to the greater of the Federal Funds Rate and a rate determined by Swing Line
Lender in accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by Swing Line Lender in
connection with the foregoing. If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Revolving Loan included in the
relevant Revolving Borrowing or funded participation in the relevant Swing Line Loan, as the
case may be. A certificate of Swing Line Lender submitted to any Lender (through the Agent)
with respect to any amounts owing under this clause (iii) shall be conclusive absent
manifest error.

     (4) Each Lender’s obligation to make Revolving Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.04(c) shall be
absolute and unconditional and shall not be affected by any circumstance, including (A)

 

 

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

     (iv) Repayment of Participations.

     (1) At any time after any Lender has purchased and funded a risk participation in a
Swing Line Loan, if Swing Line Lender receives any payment on account of such Swing Line
Loan, Swing Line Lender will distribute to such Lender its Applicable Percentage thereof in
the same funds as those received by Swing Line Lender.

     (2) If any payment received by Swing Line Lender in respect of principal or interest on
any Swing Line Loan is required to be returned by Swing Line Lender under any of the
circumstances described in Section 10.05 (including pursuant to any settlement
entered into by Swing Line Lender in its discretion), each Lender shall pay to Swing Line
Lender its Applicable Percentage thereof on demand of the Agent, plus interest thereon from
the date of such demand to the date such amount is returned, at a rate per annum equal to
the Federal Funds Rate. The Agent will make such demand upon the request of Swing Line
Lender. The obligations of the Lenders under this clause shall survive the payment in full
of the Obligations and the termination of this Agreement.

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

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

     (e) Prepayments.

     (i) The Borrower may, upon notice to the Agent, at any time or from time to time voluntarily
prepay Loans in whole or in part without premium or penalty; provided that (i) such notice
must be received by the Agent not later than 11:00 a.m. (A) three Business Days prior to any date
of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Loans;
(ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,500,000 or a
whole multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each
case, if less, the entire principal amount thereof then outstanding. Each such notice shall
specify (i) whether the Loan to be prepaid is a Revolving Loan or a Term Loan, (ii) the date and
amount of such prepayment and (iii) the Type(s) of Loans to be prepaid and (iv) if Eurodollar Rate
Loans are to be prepaid, the Interest Period(s) of such Loans. The Agent will

 

 

promptly notify each
Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage
of such prepayment. If such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with any additional amounts required pursuant to
Section 3(e). Each such prepayment shall be applied to the Revolving Loans or Term Loans
of the Lenders, as applicable, in accordance with their respective Applicable Percentages.

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

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

     (iv) If for any reason the Term Outstandings at any time exceed the Aggregate Term Commitments
then in effect, Borrower shall immediately prepay Term Loans in an aggregate amount equal to such
excess.

     (v) Each such prepayment of the Term Outstandings (whether voluntary or mandatory) shall be
applied to the principal installments thereof in inverse order of maturity.

     (f) Termination or Reduction of Commitments.

     (i) Borrower may, upon notice to Agent, terminate the Aggregate Revolving Commitments, or from
time to time permanently reduce the Aggregate Revolving Commitments; provided that (i) any
such notice shall be received by the Agent not later than 11:00 a.m. five Business Days prior to
the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate
amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower
shall not terminate or reduce the Aggregate Revolving Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Revolving Outstandings would exceed the Aggregate
Revolving Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Revolving
Commitments, the L/C Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate
Revolving Commitments, such Sublimit shall be automatically reduced by the amount of such excess.
The Agent will promptly notify the Lenders of any such notice of termination or reduction of the
Aggregate Revolving Commitments. Any reduction of the Aggregate Revolving Commitments shall be
applied to the

 

 

Revolving Commitment of each Lender according to its Applicable Percentage. All
fees accrued until the effective date of any termination of the Aggregate Revolving Commitments
shall be paid on the effective date of such termination.

     (ii) Borrower may, upon notice to Agent, terminate the Aggregate Term Commitments, or from
time to time permanently reduce the Aggregate Term Commitments; provided that (i) any such
notice shall be received by Agent not later than 11:00 a.m. five Business Days prior to the date of
termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of
$5,000,000 or any whole multiple of $1,000,000 in excess thereof, and (iii) Borrower shall not
terminate or reduce the Aggregate Term Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Term Outstandings would exceed the Aggregate Term
Commitments. The Agent will promptly notify the Lenders of any such notice of termination or
reduction of the Aggregate Term Commitments. Any reduction of Aggregate Term Commitments shall be
applied to the Term Commitment of each Lender according to its Applicable Percentage. All fees
accrued until the effective date of any termination of the Aggregate Term Commitments shall be paid
on the effective date of such termination.

     (g) Repayment of Loans.

     (i) Borrower shall repay to Lenders on the Maturity Date the aggregate principal amount of
Revolving Loans outstanding on such date.

     (ii) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date ten
Business Days after such Loan is made and (ii) the Maturity Date.

     (iii) Borrower shall repay to Lenders the Term Loans, if any, in quarterly installments each
equal to Eight Hundred Seventy-five Thousand Dollars ($875,000) on the last Business Day of each
January, April, July and October, commencing with the first such date to occur at least 60 days
after the date of the Term Borrowing, and shall repay to Lenders on the Maturity Date the aggregate
principal amount of Term Loans outstanding on such date.

     (h) Interest.

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

     (ii) (i) If any amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount
shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 

 

     (ii) If any amount (other than principal of any Loan) payable by Borrower under any
Loan Document is not paid when due (without regard to any applicable grace periods), whether
at stated maturity, by acceleration or otherwise, then upon the request of the Required
Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

     (iii) Upon the request of the Required Lenders, while any Event of Default exists,
Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder
at a fluctuating interest rate per annum at all times equal to the Default Rate to the
fullest extent permitted by applicable Laws.

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

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

     (i) Fees. In addition to certain fees described in subsections (i) and (j) of Section (c):

     (i) Commitment Fee. Borrower shall pay to Agent for the account of each Lender in
accordance with its Applicable Percentage of the Aggregate Revolving Commitments, a commitment fee
equal to the Applicable Rate times the actual daily amount by which the Aggregate Revolving
Commitments exceed the sum of (i) the Outstanding Amount of Revolving Loans and (ii) the
Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all times during the
Revolving Availability Period, including at any time during which one or more of the conditions in
Article IV is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each January, April, July and October, commencing with the first such date to occur
after the Closing Date, and on the last day of the Revolving Availability Period. The commitment
fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate
during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in effect. For
purposes of computing the commitment fee, Swing Line Loans shall not be counted towards or
considered usage of the Aggregate Commitments.

     (ii) Ticking Fee. The Borrower shall pay to Agent for the account of each Lender in
accordance with its Applicable Percentage of the Aggregate Term Commitments, a ticking fee equal to
the Applicable Rate times the Aggregate Term Commitments. The ticking fee shall accrue at all
times during the Term Availability Period, including at any time during which one or more of the
conditions in Article IV is not met, and shall be due and payable quarterly in arrears on
the last Business Day of each January, April, July and October, commencing with the first such date
to occur after the Closing Date, and on the last day of the Term Availability Period. The ticking
fee shall be calculated quarterly in arrears, and if there is any change in the

 

 

Applicable Rate
during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in effect.

     (iii) Other Fees.

          (1) Borrower shall pay to Arranger and Agent for their own respective accounts fees in the
amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid
and shall not be refundable for any reason whatsoever.

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

     (j) Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

     (i) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank
of America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall be made on the
basis of a 360-day year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on
each Loan for the day on which the Loan is made, and shall not accrue on a Loan,
or any portion thereof, for the day on which the Loan or such portion is paid,
provided that any Loan that is repaid on the same day on which it is made shall, subject to
Section (l)(i), bear interest for one day. Each determination by Agent of an interest rate
or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

     (ii) If, as a result of any restatement of or other adjustment to the financial statements of
the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the
Consolidated Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate
and (ii) a proper calculation of the Consolidated Leverage Ratio would have resulted in higher
pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to
Agent for the account of the applicable Lenders or the L/C Issuer, as the case may be, promptly on
demand by Agent (or, after the occurrence of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code of the United States, automatically and without
further action by Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount
of interest and fees that should have been paid for such period over the amount of interest and
fees actually paid for such period. This paragraph shall not limit the rights of Agent, any Lender
or the L/C Issuer, as the case may be, under Section 2.03(c)(iii), 2.03(i) or
2.08(b) or under Article VIII. The Borrower’s obligations under this paragraph
shall survive the termination of the Aggregate Commitments and the repayment of all other
Obligations hereunder.

     (k) Evidence of Debt.

     (i) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by Agent in the ordinary course of business.

 

 

The accounts or
records maintained by Agent and each Lender shall be conclusive absent manifest error of the amount
of the Credit Extensions made by Lenders to Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not, however, limit or otherwise affect the
obligation of Borrower hereunder to pay any amount owing with respect to the Obligations. In the
event of any conflict between the accounts and records maintained by any Lender and the accounts
and records of Agent in respect of such matters, the accounts and records of Agent shall control in
the absence of manifest error. Upon the request of any Lender made through Agent, Borrower shall
execute and deliver to such Lender (through Agent) (i) a Revolving Note, with appropriate
insertions, payable to the order of such Lender, and in the face amount of such Lender’s Revolving
Commitment, which shall evidence such Lender’s Revolving Loans in addition to such accounts or
records, and (ii) a Term Note, with appropriate insertions, payable to the order of such Lender,
and in the face amount of such Lender’s Term Commitment, which shall evidence such Lender’s Term
Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and
endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

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

     (l) Payments Generally; Agent’s Clawback.

     (i) (i) General. All payments to be made by Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by Borrower hereunder shall be made to Agent, for the account of the
respective Lenders to which such payment is owed, at the Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified herein. Agent will
promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.
All payments received by Agent after 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue. If any payment to be
made by Borrower shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.

     (ii) On each date when the payment of any principal, interest or fees are due hereunder
or under any Note, Borrower agrees to maintain on deposit in an ordinary checking account
maintained by Borrower with Agent (as such account shall be designated by Borrower in a
written notice to Agent from time to time, the “Borrower Account”) an amount
sufficient to pay such principal, interest or fees in full on such date. Borrower hereby
authorizes Agent (A) to deduct automatically all principal, interest or fees when due
hereunder or under any Note from the Borrower Account, and (B) if and to the extent any
payment of principal, interest or fees under this Agreement or any Note is

 

 

not made when due
to deduct any such amount from any or all of the accounts of Borrower maintained at Agent.
Agent agrees to provide written notice to Borrower of any automatic deduction made pursuant
to this Section (l)(i)(ii) showing in reasonable detail the amounts of such
deduction. Lenders agree to reimburse Borrower based on their Applicable Percentage for any
amounts deducted from such accounts in excess of amount due hereunder and under any other
Loan Documents.

     (ii) (i) Funding by Lenders; Presumption by Agent. Unless the Agent shall have
received notice from a Lender prior to the proposed date of any Revolving Borrowing or Term
Borrowing of Eurodollar Rate Loans (or, in the case of a Borrowing of Base Rate Loans, prior to
12:00 noon on the date of such Borrowing) that such Lender will not make available to the Agent
such Lender’s share of such Revolving Borrowing or Term Borrowing, the Agent may assume that such
Lender has made such share available on such date in accordance with Section (b) (or, in
the case of a Revolving Borrowing of Base Rate Loans, that such Lender has made such share
available in accordance with and at the time required by Section (b)) and may, in reliance
upon such assumption, make available to the Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Revolving Borrowing or Term Borrowing
available to Agent, then the applicable Lender and Borrower severally agree to pay to Agent
forthwith on demand such corresponding amount in immediately available funds with interest thereon,
for each day from and including the date such amount is made available to Borrower to
but excluding the date of payment to Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by Agent in accordance with
banking industry rules on interbank compensation, plus any administrative, processing or
similar fees customarily charged by Agent in connection with the foregoing and (B) in the case of a
payment to be made by Borrower, the interest rate applicable to Base Rate Loans. If Borrower and
such Lender shall pay such interest to Agent for the same or an overlapping period, Agent shall
promptly remit to Borrower the amount of such interest paid by Borrower for such period. If such
Lender pays its share of the applicable Revolving Borrowing or Term Borrowing to Agent, then the
amount so paid shall constitute such Lender’s Revolving Loan included in such Revolving Borrowing
or Term Loan included in such Term Borrowing, as applicable. Any payment by Borrower shall be
without prejudice to any claim Borrower may have against a Lender that shall have failed to make
such payment to Agent.

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

 

 

Agent to any Lender or Borrower with
respect to any amount owing under this subsection (b) shall be conclusive, absent manifest
error.

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

     (iv) Obligations of Lenders Several. The obligations of Lenders hereunder to make
Revolving Loans, to fund participations in Letters of Credit and Swing Line Loans and to make
payments pursuant to Section 10(d)(iii) are several and not joint. The failure of any
Lender to make any Revolving Loan, to fund any such participation or to make any payment under
Section 10(d)(iii) on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be responsible for the failure
of any other Lender to so make its Revolving Loan, to purchase its participation or to make its
payment under Section 10(d)(iii):

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

     (m) Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of the Revolving Loans or Term Loans made
by it, or the participations in L/C Obligations or in Swing Line Loans held by it resulting in such
Lender’s receiving payment of a proportion of the aggregate amount of such Revolving Loans, Term
Loans or participations and accrued interest thereon greater than its pro rata share thereof as
provided herein, then the Lender receiving such greater proportion shall (a) notify Agent of such
fact, and (b) purchase (for cash at face value) participations in the Revolving Loans, Term Loans
and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such
other adjustments as shall be equitable, so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest
on their respective Revolving Loans, Term Loans and other amounts owing them, provided
that:

     (1) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and

     (2) the provisions of this Section shall not be construed to apply to (x) any payment
made by Borrower pursuant to and in accordance with the express terms of this Agreement or
(y) any payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Revolving Loans, Term Loans or subparticipations in L/C
Obligations or Swing Line Loans to any assignee or participant,

 

 

other than to Borrower or
any Subsidiary thereof (as to which the provisions of this Section shall apply).

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

     (n) Increase in Commitments.

     (i) Request for Increase. Provided there exists no Default, upon notice to the Agent
(which shall promptly notify the Lenders), the Borrower may from time to time, request an increase
in the Aggregate Revolving Commitments by an amount (for all such requests) not exceeding
$35,000,000; provided, that (i) any such request for an increase shall be in a minimum
amount of $5,000,000 and (ii) Borrower may make a maximum of two such requests. At the time of
sending such notice, the Borrower (in consultation with the Agent) shall specify the time period
within which each Lender is requested to respond (which shall in no event be less than ten Business
Days from the date of delivery of such notice to the Lenders).

     (ii) Lender Elections to Increase. Each Lender shall notify Agent within such time
period whether or not it agrees to increase its Revolving Commitment and, if so, whether by an
amount equal to, greater than, or less than its Applicable Percentage of such requested increase.
Any Lender not responding within such time period shall be deemed to have declined to increase its
Revolving Commitment.

     (iii) Notification by Agent; Additional Lenders. Agent shall notify the Borrower and
each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount
of a requested increase and subject to the approval of the Agent, the L/C Issuer and the Swing Line
Lender (which approvals shall not be unreasonably withheld), the Borrower may also invite
additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and
substance satisfactory to the Agent and its counsel.

     (iv) Effective Date and Allocations. If the Aggregate Revolving Commitments are
increased in accordance with this Section, Agent and Borrower shall determine the effective date
(the “Increase Effective Date”) and the final allocation of such increase. The Agent shall
promptly notify the Borrower and the Lenders of the final allocation of such increase and the
Increase Effective Date.

     (v) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, Borrower shall deliver to Agent a certificate of each Loan Party dated as of the Increase
Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase, and (ii) in the case of the Borrower, certifying that, before and
after giving effect to such increase, (A) the representations and warranties contained in
Article V and the other Loan Documents are true and correct on and as of the Increase
Effective Date, except to the extent that such representations and warranties specifically refer to
an earlier date, in which case they are true and correct as of such earlier date, and except that
for purposes of this Section 2.15, the representations and warranties contained in
subsections (a) and (b) of Section

 

 

5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b), respectively, of Section 6.01, and (B) no Default exists. Borrower shall
prepay any Revolving Loans outstanding on the Increase Effective Date (and pay any additional
amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding
Revolving Loans ratable with any revised Applicable Percentages arising from any nonratable
increase in the Revolving Commitments under this Section.

     (vi) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.13 or 10.01 to the contrary.

3.

TAXES, YIELD PROTECTION AND ILLEGALITY

     (a) Taxes.

     (i) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

     (1) Any and all payments by or on account of any obligation of Borrower hereunder or
under any other Loan Document shall to the extent permitted by applicable Laws be made free
and clear of and without reduction or withholding for any Taxes. If, however, applicable
Laws require Borrower or Agent to withhold or deduct any Tax, such Tax shall be withheld or
deducted in accordance with such Laws as determined by Borrower or Agent, as the case may
be, upon the basis of the information and documentation to be delivered pursuant to
subsection (e) below.

     (2) If Borrower or Agent shall be required by the Code to withhold or deduct any Taxes,
including both United States Federal backup withholding and withholding taxes, from any
payment, then (A) Agent shall withhold or make such deductions as are determined by Agent to
be required based upon the information and documentation it has received pursuant to
subsection (e) below, (B) Agent shall timely pay the full amount withheld or deducted to the
relevant Governmental Authority in accordance with the Code, and (C) to the extent that the
withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum
payable by Borrower shall be increased as necessary so that after any required withholding
or the making of all required deductions (including deductions applicable to additional sums
payable under this Section) Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such withholding or deduction been
made.

     (ii) Payment of Other Taxes by Borrower. Without limiting the provisions of subsection
(a) above, Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable Laws.

     (iii) Tax Indemnifications.

     (1) Without limiting the provisions of subsection (a) or (b) above, Borrower shall, and
does hereby, indemnify Agent, each Lender and the L/C Issuer, and shall make payment in
respect thereof within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes

 

 

imposed or asserted on or attributable to amounts payable under this Section) withheld or
deducted by Borrower or Agent or paid by Agent, such Lender or the L/C Issuer, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Borrower shall also, and
does hereby, indemnify Agent, and shall make payment in respect thereof within 10 days after
demand therefor, for any amount which a Lender or the L/C Issuer for any reason fails to pay
indefeasibly to Agent as required by clause (ii) of this subsection. A certificate as to the
amount of any such payment or liability delivered to Borrower by a Lender or the L/C Issuer
(with a copy to Agent), or by Agent on its own behalf or on behalf of a Lender or the L/C
Issuer, shall be conclusive absent manifest error.

     (2) Without limiting the provisions of subsection (a) or (b) above, each Lender and the
L/C Issuer shall, and does hereby, indemnify Borrower and Agent, and shall make payment in
respect thereof within 10 days after demand therefor, against any and all Taxes and any and
all related losses, claims, liabilities, penalties, interest and expenses (including the
fees, charges and disbursements of any counsel for Borrower or Agent) incurred by or
asserted against Borrower or Agent by any Governmental Authority as a result of the failure
by such Lender or the L/C Issuer, as the case may be, to deliver, or as a result of the
inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such
Lender or the L/C Issuer, as the case may be, to Borrower or Agent pursuant to subsection
(e). Each Lender and the L/C Issuer hereby authorizes Agent to set off and apply any and all
amounts at any time owing to such Lender or the L/C Issuer, as the case may be, under this
Agreement or any other Loan Document against any amount due to Agent under this clause (ii).
The agreements in this clause (ii) shall survive the resignation and/or replacement of
Agent, any assignment of rights by, or the replacement of, a Lender or the L/C Issuer, the
termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all
other Obligations.

     (iv) Evidence of Payments. Upon request by Borrower or Agent, as the case may be,
after any payment of Taxes by Borrower or by Agent to a Governmental Authority as provided in this
Section 3.01, Borrower shall deliver to Agent or Agent shall deliver to Borrower, as the
case may be, the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of any return required by Laws to report such payment or other
evidence of such payment reasonably satisfactory to Borrower or Agent, as the case may be.

     (v) Status of Lenders; Tax Documentation.

     (1) Each Lender shall deliver to Borrower and to Agent, at the time or times prescribed
by applicable Laws or when reasonably requested by Borrower or Agent, such properly
completed and executed documentation prescribed by applicable Laws or by the taxing
authorities of any jurisdiction and such other reasonably requested information as will
permit Borrower or Agent, as the case may be, to determine (A) whether or not payments made
hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the
required rate of withholding or deduction, and (C) such Lender’s

 

 

entitlement to any
available exemption from, or reduction of, applicable Taxes in respect
of all payments to be made to such Lender by Borrower pursuant to this Agreement or
otherwise to establish such Lender’s status for withholding tax purposes in the applicable
jurisdiction.

     (2) Without limiting the generality of the foregoing, if Borrower is resident for tax
purposes in the United States, any Lender shall deliver to Borrower and Agent executed
originals of Internal Revenue Service Form W-9 or such other documentation or information
prescribed by applicable Laws or reasonably requested by Borrower or Agent as will enable
Borrower or Agent, as the case may be, to determine whether or not such Lender is subject to
backup withholding or information reporting requirements; and

     (3) Each Lender shall promptly (A) notify Borrower and Agent of any change in
circumstances which would modify or render invalid any claimed exemption or reduction, and
(B) take such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the re-designation of
its Lending Office) to avoid any requirement of applicable Laws of any jurisdiction that
Borrower or Agent make any withholding or deduction for taxes from amounts payable to such
Lender.

     (vi) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the L/C
Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any refund of Taxes withheld
or deducted from funds paid for the account of such Lender or the L/C Issuer, as the case may be.
If Agent, any Lender or the L/C Issuer determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by Borrower or with respect
to which Borrower has paid additional amounts pursuant to this Section, it shall pay to Borrower an
amount equal to such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by Borrower under this Section with respect to the Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses incurred by Agent, such Lender or the L/C
Issuer, as the case may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that Borrower, upon the
request of Agent, such Lender or the L/C Issuer, agrees to repay the amount paid over to Borrower
(plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to
Agent, such Lender or the L/C Issuer in the event Agent, such Lender or the L/C Issuer is required
to repay such refund to such Governmental Authority. This subsection shall not be construed to
require Agent, any Lender or the L/C Issuer to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to Borrower or any other Person.

     (b) Illegality. If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates
based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to Borrower through Agent, any obligation
of such Lender to make or continue Eurodollar Rate Loans or to

 

 

convert Base Rate Revolving Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies
Agent and Borrower that the circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, Borrower shall, upon demand from such Lender (with a copy to Agent), prepay
or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, Borrower shall also
pay accrued interest on the amount so prepaid or converted and all amounts due under
Section (e) in accordance with the terms thereof due to such prepayment or conversion.

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

     (d) Increased Costs.

     (i) Increased Costs Generally. If any Change in Law shall:

     (1) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or credit extended or participated in by, any Lender (except any reserve requirement
reflected in the Eurodollar Rate) or the L/C Issuer;

     (2) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with respect
to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any
Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender
or the L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section (a) and the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender or the L/C Issuer); or

     (3) impose on any Lender or the L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such
Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan),

 

 

 or
to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining
any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer
hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or
the L/C Issuer, Borrower will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.

     (ii) Capital Requirements. If any Lender or the L/C Issuer determines that any Change
in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such
Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on
the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below
that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could
have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C
Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with
respect to capital adequacy), then from time to time Borrower will pay to such Lender or the L/C
Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the
L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.

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

     (iv) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer
to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided
that Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or reductions suffered more
than nine months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies
Borrower of the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect thereof).

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

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

 

 

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

     (iii) any assignment of a Eurodollar Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to
Section 10.13; including any loss of anticipated profits and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees
payable to terminate the deposits from which such funds were obtained. Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the foregoing. For purposes
of calculating amounts payable by Borrower to Lenders under this Section (e), each Lender
shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate
used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in
the London interbank eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan was in fact so funded.

     (f) Mitigation Obligations; Replacement of Lenders.

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

     (ii) Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower
may replace such Lender in accordance with Section 10.13.

     (g) Survival. All of Borrower’s obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations hereunder, and the
resignation of the Agent.

4.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

 

     (a) Conditions of Initial Credit Extension. The obligation of the L/C Issuer and each Lender
to make its initial Credit Extension hereunder is subject to satisfaction of the following
conditions precedent:

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

     (1) executed counterparts of this Agreement, all Collateral Documents and the Guaranty,
sufficient in number for distribution to Agent, each Lender and Borrower;

     (2) the Notes executed by Borrower in favor of each Lender requesting Notes;

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

     (4) such documents and certifications as Agent may reasonably require to evidence that
each Loan Party is duly organized or formed, and that each Loan Party is validly existing,
in good standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect;

     (5) a favorable opinion of Kirkpatrick & Lockhart Preston Gates Ellis, LLP, counsel to
the Loan Parties, acceptable to Agent, addressed to Agent and each Lender, as to the matters
set forth concerning the Loan Parties and the Loan Documents in form and substance
satisfactory to Agent;

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

     (7) a certificate signed by a Responsible Officer of Borrower certifying (A) that the
conditions specified in Sections (b)(a) and (b) have been satisfied, and
(B) that there has been no event or circumstance since the date of the Audited Financial
Statements that has had or could be reasonably expected to have, either individually or in
the aggregate, a Material Adverse Effect; and (C) a calculation of the Consolidated Leverage
Ratio based on the unaudited consolidated and consolidating financial statements of the
Borrower and its Subsidiaries for its fiscal quarter ended April 30, 2008;

 

 

     (8) evidence that all insurance required to be maintained pursuant to the Loan
Documents has been obtained and is in effect;

     (9) an ALTA extended coverage lender’s title insurance policy or unconditional
commitment therefor issued by a title insurance company acceptable to the Agent, for the
real property covered by the Indiana Mortgage in an amount equal to $1,750,000, insuring
that fee simple title to such real property is vested in Borrower, and assuring the Agent
that the Indiana Mortgage creates a valid and enforceable lien on the real property covered
thereby as security for the obligations secured by the Indiana Mortgage prior and superior
in right to any other person, subject only to exceptions approved by Agent in writing; and

     (10) such other assurances, certificates, documents, consents or opinions as Agent, the
L/C Issuer, the Swing Line Lender or the Required Lenders reasonably may require.

     (ii) Any fees required to be paid on or before the Closing Date shall have been paid.

     (iii) Unless waived by Agent, Borrower shall have paid all fees, charges and disbursements of
counsel to Agent (directly to such counsel if requested by Agent) to the extent invoiced prior to
or on the Closing Date, plus such additional amounts of such fees, charges and
disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that such estimate shall
not thereafter preclude a final settling of accounts between Borrower and Agent).

     (iv) A favorable standard flood hazard determination for the real property covered by the
Indiana Mortgage issued by LSI Flood Services.

     Without limiting the generality of the provisions of the last paragraph of Section 9.03,
for purposes of determining compliance with the conditions specified in this Section (a),
each Lender that has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to a Lender unless Agent shall have received notice
from such Lender prior to the proposed Closing Date specifying its objection thereto.

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

     (i) The representations and warranties of Borrower and each other Loan Party contained in
Article V or any other Loan Document, or which are contained in any document furnished at
any time under or in connection herewith or therewith, shall be true and correct on and as of the
date of such Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this Section (b), the representations and
warranties contained in subsections (a) and (b) of Section 5(e) shall be deemed to
refer to

 

 

the most recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6(a).

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

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

     (iv) Agent shall have received, in form and substance satisfactory to it, such other
assurances, certificates, documents or consents related to the foregoing as Agent or the Required
Lenders reasonably may require.

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

     (c) Conditions to Term Borrowing. The obligation of each Lender to make the Term Borrowing
hereunder is subject to the satisfaction of the following conditions precedent (in addition to
those set forth in Sections 4.01 and 4.02):

     (i) The Acquisition Closing Date shall occur (i) substantially contemporaneous with the Term
Borrowing and (i) prior to the end of the Term Availability Period.

     (ii) Agent shall have received each of the following:

     (i) (A) The audited consolidated balance sheet of OMAX and its Subsidiaries for its most
recent fiscal year for which such audited balance sheet has been prepared (but no earlier than the
fiscal year ended December 31, 2007); and (B) the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year (including the notes thereto),
prepared in accordance with GAAP; and

     (ii) The unaudited consolidated and consolidating financial statements of OMAX and its
Subsidiaries for their four most recent fiscal quarters and the related consolidated and
consolidating statements of income or operations, shareholder’s equity and cash flows for such
fiscal quarters, prepared in accordance with GAAP.

     (iii) Agent shall have received (i) an officer’s certificate in form and substance
satisfactory to Agent with a certified copy of the final principal Acquisition agreement, (ii)
confirmation that the final terms and conditions of the Acquisition are substantially the same as
those terms and conditions disclosed in Borrower’s Form 8-K filed with the SEC as of December 6,
2007, as determined by Agent in its discretion, or on terms and conditions otherwise acceptable to
Agent in its discretion, and (iii) a certificate (the “Term Loan Pricing Certificate”)
signed by a Responsible Officer of Borrower certifying a calculation of the pro forma Consolidated
Leverage Ratio including the Acquisition Adjustment Amount associated with the Acquisition.

 

 

5.

REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants to Agent and the Lenders that:

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

     (b) Authorization; No Contravention. The execution, delivery and performance by each Loan
Party of each Loan Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a) contravene the
terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to be made under
(i) any Contractual Obligation to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree
of any Governmental Authority or any arbitral award to which such Person or its property is
subject; or (c) violate any Law.

     (c) Governmental Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or any
other Person is necessary or required in connection with the execution, delivery or performance by,
or enforcement against, any Loan Party of this Agreement or any other Loan Document.

     (d) Binding Effect. This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.
This Agreement constitutes, and each other Loan Document when so delivered will constitute, a
legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is
party thereto in accordance with its terms.

     (e) Financial Statements; No Material Adverse Effect.

     (i) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein;
(ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted
therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of
the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Indebtedness.

 

 

     (ii) The unaudited consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries dated April 30, 2008, and the related consolidated and consolidating statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date
(i) were prepared in accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

     (iii) Since the date of Borrower’s most recent financial statements filed with the SEC prior
to the Closing Date, there has been no event or circumstance, either individually or in the
aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

     (iv) The consolidated and consolidating forecasted balance sheet and statements of income and
cash flows of the Borrower and its Subsidiaries delivered pursuant to Section 6(a)(iii)
were prepared in good faith on the basis of the assumptions stated therein, which assumptions were
fair in light of the conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Borrower’s best estimate of its future financial
condition and performance.

     (f) Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to
the knowledge of Borrower after due and diligent investigation, threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, by or against Borrower or any of
its Subsidiaries or against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) except as specifically disclosed in Schedule 5.06, either individually or in
the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse
Effect, and there has been no adverse change in the status, or financial effect on any Loan Party
or any Subsidiary thereof, of the matters described on Schedule 5.06.

     (g) No Default. Neither any Loan Party nor any Subsidiary thereof is in default under or with
respect to any Contractual Obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing
or would result from the consummation of the transactions contemplated by this Agreement or any
other Loan Document.

     (h) Ownership of Property; Liens. Each of Borrower and each Subsidiary has good record and
marketable title in fee simple to, or valid leasehold interests in, all real property necessary or
used in the ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The
property of Borrower and its Subsidiaries is subject to no Liens, other than Liens permitted by
Section 7(a).

     (i) Environmental Compliance. Borrower and its Subsidiaries conduct in the ordinary course of
business a review of the effect of existing Environmental Laws and claims alleging potential
liability or responsibility for violation of any Environmental Law on their respective businesses,
operations and properties, and as a result thereof Borrower has reasonably

 

 

concluded that such Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     (j) Insurance. The properties of Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of Borrower, in such amounts (after giving
effect to any self-insurance compatible with the following standards), with such deductibles and
covering such risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where Borrower or the applicable Subsidiary operates.

     (k) Taxes. Borrower and its Subsidiaries have filed all Federal, state and other material tax
returns and reports required to be filed, and have paid all Federal, state and other material
taxes, assessments, fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which adequate reserves have
been provided in accordance with GAAP. There is no proposed tax assessment against Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect. Neither any Loan Party nor any
Subsidiary thereof is party to any tax sharing agreement.

     (l) ERISA Compliance.

     (i) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with respect thereto and, to
the best knowledge of Borrower, nothing has occurred which would prevent, or cause the loss of,
such qualification. Borrower and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of
any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

     (ii) There are no pending or, to the best knowledge of Borrower, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan that could be
reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

     (iii) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability; (iii) neither Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) neither Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.

 

 

     (m) Subsidiaries; Equity Interests. As of the Closing Date, the Borrower has no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13, and all of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by a Loan Party in the amounts specified on Part (a) of
Schedule 5.13 free and clear of all Liens. The Borrower has no equity investments in any
other corporation or entity other than those specifically disclosed in Part (b) of
Schedule 5.13. All of the outstanding Equity Interests in the Borrower have been validly
issued and are fully paid and nonassessable.

     (n) Margin Regulations; Investment Company Act.

     (i) Borrower is not engaged and will not engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock. Following the application of the proceeds of each Borrowing or drawing under each
Letter of Credit, not more than 25% of the value of the assets (either of the Borrower only or of
the Borrower and its Subsidiaries on a consolidated basis) subject to the provisions of Section
7.01 or Section 7.05 or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any Affiliate of any Lender relating to
Indebtedness and within the scope of Section 8.01(e) will be margin stock.

     (ii) None of Borrower, any Person Controlling Borrower, or any Subsidiary is or is required to
be registered as an “investment company” under the Investment Company Act of 1940.

     (o) Disclosure. Borrower has disclosed to Agent and Lenders all agreements, instruments and
corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of any Loan Party to Agent or any Lender
in connection with the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by
other information so furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that, with respect to projected financial
information, Borrower represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.

     (p) Compliance with Laws. Each Loan Party and each Subsidiary thereof is in compliance in all
material respects with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a) such requirement of
Law or order, writ, injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted or (b) the failure to comply therewith, either individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

 

     (q) Taxpayer Identification Number. Borrower’s true and correct U.S. taxpayer identification
number is set forth on Schedule 10.02.

     (r) Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries own, or possess
the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent
rights, franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of the Borrower, no
slogan or other advertising device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Subsidiary infringes upon any
rights held by any other Person. No claim or litigation regarding any of the foregoing is pending
or, to the best knowledge of the Borrower, threatened, which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

     (s) Rights in Collateral; Priority of Liens. Borrower and each other Loan Party own the
property granted by it as Collateral under the Collateral Documents, free and clear of any and all
Liens in favor of third parties. Except as otherwise provided in Schedule 5.19, upon the
proper filing of UCC financing statements, and the taking of the other actions required by the
Required Lenders, the Liens granted pursuant to the Collateral Documents will constitute valid and
enforceable first, prior and perfected Liens on the Collateral in favor of Agent, for the ratable
benefit of Agent and Lenders.

6.

AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
Borrower shall, and shall (except in the case of the covenants set forth in Sections (a),
(b), and (c)) cause each Domestic Material Subsidiary to:

     (a) Financial Statements. Deliver to Agent a sufficient number of copies for delivery by Agent
to each Lender, in form and detail satisfactory to Agent and the Required Lenders:

     (i) as soon as available, but in any event within 90 days after the end of each fiscal year of
the Borrower, a consolidated and consolidating balance sheet of the Borrower and its Subsidiaries
as at the end of such fiscal year, and the related consolidated and consolidating statements of
income or operations, changes in shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP, such consolidated statements to be audited and
accompanied by a report and opinion of an independent certified public accountant of nationally
recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall
be prepared in accordance with generally accepted auditing standards and shall not be subject to
any “going concern” or like qualification or exception or any qualification or exception as to the
scope of such audit, and such consolidating statements to be certified by the chief executive
officer, chief financial officer, treasurer or controller of the Borrower to the effect that such
statements are fairly stated in all material respects when

 

 

considered in relation to the consolidated financial statements of the Borrower and its
Subsidiaries; and

     (ii) as soon as available, but in any event within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower a consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, the related
consolidated and consolidating statements of income or operations for such fiscal quarter and for
the portion of the Borrower’s fiscal year then ended, and the related consolidated and
consolidating statements of changes in shareholders’ equity, and cash flows for the portion of the
Borrower’s fiscal year then ended, in each case, setting forth in each case in comparative form, as
applicable, the figures for the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated
statements to be certified by the chief executive officer, chief financial officer, treasurer or
controller of the Borrower as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes; and such
consolidating statements to be certified by the chief executive officer, chief financial officer,
treasurer or controller of the Borrower to the effect that such statements are fairly stated in all
material respects when considered in relation to the consolidated financial statements of the
Borrower and its Subsidiaries; and

     (iii) as soon as available, but in any event no later than 60 days after the end of each
fiscal year of the Borrower, forecasts prepared by management of Borrower, in form satisfactory to
Agent and the Required Lenders, of consolidated balance sheets and statements of income or
operations and cash flows of the Borrower and its Subsidiaries on a quarterly basis for the
immediately following fiscal year (including the fiscal year in which the Maturity Date occurs).

     (b) Certificates; Other Information. Deliver to Agent a sufficient number of copies for
delivery by Agent to each Lender, in form and detail satisfactory to Agent and the Required
Lenders:

     (i) concurrently with the delivery of the financial statements referred to in
Sections (a)(a) and (b), a duly completed Compliance Certificate signed by the
chief executive officer, chief financial officer, treasurer or controller of the Borrower;

     (ii) promptly after any request by Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or the audit committee
of the board of directors) of the Borrower by independent accountants in connection with the
accounts or books of the Borrower or any Subsidiary, or any audit of any of them;

     (iii) promptly after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the Borrower, and copies of
all annual, regular, periodic and special reports and registration statements which the Borrower
may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange
Act of 1934, and not otherwise required to be delivered to Agent pursuant hereto;

 

 

     (iv) promptly after the furnishing thereof, copies of any statement or report furnished to any
holder of debt securities of any Loan Party or any Subsidiary thereof pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be furnished to the
Lenders pursuant to Section (a) or any other clause of this Section (b);

     (v) promptly, and in any event within five Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each notice or other correspondence received from the
SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or
possible investigation or other inquiry by such agency regarding financial or other operational
results of any Loan Party or any Subsidiary thereof; and

     (vi) promptly, such additional information regarding the business, financial or corporate
affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as
Agent or any Lender may from time to time reasonably request.

     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on
the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent); provided
that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or
any Lender that has not received an electronic copy from the Administrative Agent and requests the
Borrower to deliver such paper copies until a written request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such
documents and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the Compliance Certificates
required by Section 6.02(b) to the Administrative Agent. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have no responsibility
to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be
solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) Agent and/or Arranger will make available to the Lenders
and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or
another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material non-public
information with respect to the Borrower or its Affiliates, or the respective securities of any of
the foregoing, and who may be engaged in investment and other market-related activities with
respect to such Persons’ securities. The Borrower hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently

 

 

on the
first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to
have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat
such Borrower Materials as not containing any material non-public information with respect to the
Borrower or its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 10(g)); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Side Information;” and (z) the Administrative Agent and the Arranger shall be
entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform that is not designated “Public Side Information.”

     (c) Notices. Promptly notify Agent and each Lender:

     (i) of the occurrence of any Default;

     (ii) of any matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual
Obligation of Borrower or any Domestic Material Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between Borrower or any Domestic Material Subsidiary and
any Governmental Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting Borrower or any Domestic Material Subsidiary, including pursuant
to any applicable Environmental Laws;

     (iii) of the occurrence of any ERISA Event; and

     (iv) of any material change in accounting policies or financial reporting practices by the
Borrower or any Domestic Material Subsidiary, including any determination by the Borrower referred
to in Section 2.10(b).

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
of Borrower setting forth details of the occurrence referred to therein and stating what action
Borrower has taken and proposes to take with respect thereto. Each notice pursuant to
Section (c)(i) shall describe with particularity any and all provisions of this Agreement
and any other Loan Document that have been breached.

     (d) Payment of Obligations. Pay and discharge as the same shall become due and payable, all
its obligations and liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would
by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement evidencing such
Indebtedness.

     (e) Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect
its legal existence and good standing under the Laws of the jurisdiction of its organization except
in a transaction permitted by Section 7(d) or 7(e); (b) take all reasonable action
to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in
the

 

 

normal conduct of its business, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of which could reasonably
be expected to have a Material Adverse Effect.

     (f) Maintenance of Properties. (a) Maintain, preserve and protect all of its material
properties and equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation
and maintenance of its facilities.

     (g) Maintenance of Insurance. Maintain with financially sound and reputable insurance
companies not Affiliates of Borrower, insurance with respect to its properties and business against
loss or damage of the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts (after giving effect to any self-insurance compatible
with the following standards) as are customarily carried under similar circumstances by such other
Persons and providing for not less than 30 days’ prior notice to Agent of termination, lapse or
cancellation of such insurance.

     (h) Compliance with Laws. Comply in all material respects with the requirements of all Laws
and all orders, writs, injunctions and decrees applicable to it or to its business or property,
except in such instances in which (a) such requirement of Law or order, writ, injunction or decree
is being contested in good faith by appropriate proceedings diligently conducted; or (b) the
failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

     (i) Books and Records. (a) Maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of Borrower or such Subsidiary, as the
case may be; and (b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory jurisdiction over Borrower
or such Subsidiary, as the case may be. Borrower shall maintain at all times books and records
pertaining to the Collateral in such detail, form and scope as Agent or any Lender shall reasonably
require.

     (j) Inspection Rights. Permit representatives and independent contractors of Agent and each
Lender to visit and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public accountants, all at the
reasonable expense of Borrower and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to Borrower; provided,
however, that when an Event of Default exists Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the foregoing at the
reasonable expense of Borrower at any time during normal business hours and without advance notice.

 

 

     (k) Use of Proceeds. Use the proceeds of the Term Borrowing to finance the Acquisition and use
the proceeds of the other Credit Extensions to refinance Indebtedness arising under the Existing
Credit Agreement, and for working capital, capital expenditures and other general corporate
purposes, in each case not in contravention of any Law or of any Loan Document.

     (l) Additional Guarantors. Notify Agent at the time that any Person becomes a Domestic
Material Subsidiary, and promptly thereafter (and in any event within 30 days), cause such Person
(including, without limitation, OMAX upon the consummation of the Acquisition) to (a) become a
Guarantor by executing and delivering to Agent (i) the Guaranty or a supplement to the Guaranty in
the form attached thereto, as applicable, or such other document as Agent shall deem appropriate
for such purpose, (ii) the Guarantor Security Agreement or a supplement to the Guarantor Security
Agreement in the form attached thereto, as applicable, or such other document as Agent shall deem
appropriate for such purpose, and (iii) the Guarantor Pledge Agreement or a supplement to the
Guarantor Pledge Agreement in the form attached thereto, as applicable, or such other document as
Agent shall deem appropriate for such purpose, and (b) deliver to Agent documents of the types
referred to in clauses (iii) and (iv) of Section 4(a)(i) and favorable opinions of counsel
to such Person (which shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to in clause (a)), all in form, content and scope
reasonably satisfactory to Agent.

     (m) Collateral Records. To execute and deliver promptly, and to cause each other Loan Party to
execute and deliver promptly, to Agent, from time to time, solely for Agent’s convenience in
maintaining a record of the Collateral, such written statements and schedules as Agent may
reasonably require designating, identifying or describing the Collateral. The failure by Borrower
or any other Loan Party, however, to promptly give Agent such statements or schedules shall not
affect, diminish, modify or otherwise limit the Liens on the Collateral granted pursuant to the
Collateral Documents.

     (n) Security Interests. To, and to cause each other Loan Party to, (a) defend the Collateral
against all claims and demands of all Persons at any time claiming the same or any interest
therein, (b) comply with the requirements of all state and federal laws in order to grant to Agent
and Lenders valid and perfected first priority security interests in the Collateral, with
perfection, in the case of any investment property, deposit account or letter of credit, being
effected by giving Agent control of such investment property or deposit account or letter of
credit, rather than by the filing of a Uniform Commercial Code (“UCC”) financing statement
with respect to such investment property, and (c) do whatever Agent may reasonably request, from
time to time, to effect the purposes of this Agreement and the other Loan Documents, including
filing notices of liens, UCC financing statements, fixture filings and amendments, renewals and
continuations thereof; cooperating with Agent’s representatives; keeping stock records; if
expressly requested by Agent, making commercially reasonable efforts to obtain waivers from
landlords and mortgagees and from warehousemen and their landlords and mortgages; and, paying
claims which might, if unpaid, become a Lien on the Collateral. Agent is hereby authorized by
Borrower to file any UCC financing statements covering the Collateral whether or not Borrower’s
signatures appear thereon.

 

 

     (o) Swap Contracts. Borrower shall maintain Swap Contracts that, in the aggregate, cover not
less than fifty percent (50%) of the Term Outstandings during the period commencing sixty (60) days
after the date of the Term Borrowing pursuant to Section 2.01(b) and, provided no Default
or Event of Default has occurred and is continuing on such date, ending on the second
(2nd) anniversary of the date of such Swap Contracts.

7.

NEGATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
Borrower shall not, nor shall it permit any Domestic Material Subsidiary to, directly or
indirectly:

     (a) Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets
or revenues, whether now owned or hereafter acquired, other than the following:

     (i) Liens pursuant to any Loan Document;

     (ii) Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or
extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the
amount secured or benefited thereby is not increased except as contemplated by
Section (c)(ii), (iii) the direct or any contingent obligor with respect thereto is not
changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is
permitted by Section (c)(ii);

     (iii) Liens for taxes not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;

     (iv) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period of more than 30 days
or which are being contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the applicable Person;

     (v) pledges or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation, other than any Lien
imposed by ERISA;

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

     (vii) easements, rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;

 

 

     (viii) Liens securing judgments for the payment of money not constituting an Event of Default
under Section 8(a)(viii); and

     (ix) Liens securing Indebtedness permitted under Section (c)(v); provided that
(i) such Liens do not at any time encumber any property other than the property financed by such
Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair market
value, whichever is lower, of the property being acquired on the date of acquisition.

     (b) Investments. Make any Investments, except:

     (i) Investments held by Borrower or such Subsidiary in the form of cash equivalents or
short-term marketable debt securities;

     (ii) advances to officers, directors and employees of Borrower and Subsidiaries in an
aggregate amount not to exceed $250,000 at any time outstanding, for travel, entertainment,
relocation and analogous ordinary business purposes;

     (iii) Investments of Borrower in any wholly-owned Subsidiary and Investments of any
wholly-owned Subsidiary in Borrower or in another wholly-owned Subsidiary;

     (iv) Investments consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or limit loss;

     (v) Guarantees to the extent permitted by Section (c);

     (vi) The Acquisition, provided that the Acquisition Closing Date occurs prior to the
end of the Term Availability Period;

     (vii) in any fiscal year, acquisitions by Borrower of another Person, business or property if
Borrower’s expenditures in respect of such acquisitions in such fiscal year do not exceed
$15,000,000 in the aggregate (excluding the Acquisition) and, between the Closing Date and the
Maturity Date, do not exceed $30,000,000 in the aggregate (excluding the Acquisition);
provided, that Borrower may not enter into any such acquisition (i) if a Default or Event
of Default shall then exist or would exist after giving effect to such acquisition, or (ii) the
Consolidated Leverage would be greater than 2.5:1 after giving effect to such acquisition.

     (c) Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

     (i) Indebtedness under the Loan Documents;

     (ii) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof; provided that (i) the amount of
such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder and (ii) the terms relating to principal amount,
amortization, maturity, collateral (if any) and subordination (if any), and other material

 

 

terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and
of any agreement entered into and of any instrument issued in connection therewith, are no less
favorable in any material respect to the Loan Parties or Lenders than the terms of any agreement or
instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the
interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness
does not exceed the then applicable market interest rate;

     (iii) Guarantees of Borrower or any Subsidiary in respect of Indebtedness otherwise permitted
hereunder of Borrower or any wholly-owned Subsidiary;

     (iv) obligations (contingent or otherwise) of Borrower or any Subsidiary existing or arising
under any Swap Contract, provided that (i) such obligations are (or were) entered into by
such Person in the ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such Person, and not
for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain
any provision exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;

     (v) Indebtedness in respect of purchase money obligations for fixed or capital assets
(including those in the form of capital leases and Synthetic Lease Obligations) within the
limitations set forth in Section (a)(ix); provided, however, that the
aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $10,000,000

     (vi) Indebtedness of OMAX assumed by the Borrower as part of the Acquisition or Indebtedness
incurred by the Borrower in connection with other acquisitions to the extent permitted under
Section 7.02(g); provided, that Indebtedness incurred by the Borrower for
acquisitions permitted under Section 7.02(g) other than the Acquisition, shall not exceed
$15,000,000 in the aggregate in any fiscal year and shall not exceed $30,000,000 in the aggregate
during the period between the Closing Date and the Maturity Date.

     (d) Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person,
or Dispose of (whether in one transaction or in a series of transactions) all or substantially all
of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that,
so long as no Default exists or would result therefrom:

     (i) any Subsidiary may merge with (i) Borrower, provided that Borrower shall be the
continuing or surviving Person, or (ii) any one or more other Subsidiaries, provided that
when any wholly-owned Subsidiary is merging with another Subsidiary, the wholly-owned Subsidiary
shall be the continuing or surviving Person, and, provided further that if a
Guarantor is merging with another Subsidiary, the Guarantor shall be the surviving Person;

     (ii) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to Borrower or to another Subsidiary; provided that if the
transferor in such a transaction is a wholly-owned Subsidiary, then the transferee must either be
Borrower or a wholly-owned Subsidiary and, provided further that if the transferor
of such assets is a Guarantor, the transferee must either be Borrower or a Guarantor; and

 

 

     (iii) Borrower may consummate the Acquisition so long as the Acquisition Closing Date occurs
prior to the end of the Term Availability Period.

     (e) Dispositions. Make any Disposition or enter into any agreement to make any Disposition,
except:

     (i) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in
the ordinary course of business;

     (ii) Dispositions of inventory in the ordinary course of business;

     (iii) Dispositions of equipment or real property to the extent that (i) such property is
exchanged for credit against the purchase price of similar replacement property or (ii) the
proceeds of such Disposition are reasonably promptly applied to the purchase price of such
replacement property;

     (iv) Dispositions of property by any Subsidiary to Borrower or to a wholly-owned Subsidiary;
provided that if the transferor of such property is a Guarantor, the transferee thereof
must either be Borrower or a Guarantor;

     (v) Dispositions permitted by Section (d);

     (vi) non-exclusive licenses of IP Rights in the ordinary course of business and substantially
consistent with past practice for terms not exceeding five years;

     (g) Dispositions of the shares or assets of Immaterial Subsidiaries; and

     (h) Dispositions of the shares or assets of Subsidiaries listed on Schedule 7.05,

provided, however, that any Disposition pursuant to clauses (a) through (f) shall
be for fair market value.

     (f) Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests
(other than sales of common stock of the Borrower), except that, so long as no Default shall have
occurred and be continuing at the time of any action described below or would result therefrom:

     (i) each Subsidiary may make Restricted Payments to Borrower, Guarantors and any other Person
that owns an Equity Interest in such Subsidiary, ratably according to their respective holdings of
the type of Equity Interest in respect of which such Restricted Payment is being made;

     (ii) Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity Interests of such Person;

     (iii) Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity Interests
issued by it with the proceeds received from the substantially concurrent issue of new shares of
its common stock or other common Equity Interests; and

 

 

     (iv) Borrower may purchase up to Twenty Million Dollars ($20,000,000) of Borrower’s Equity
Interests provided that, after giving effect to any such transaction, the Consolidated Leverage
would not be greater than 2.5:1.

     (g) Change in Nature of Business. Engage in any material line of business substantially
different from those lines of business conducted by Borrower and its Subsidiaries on the date
hereof or any business substantially related or incidental thereto.

     (h) Transactions With Affiliates. Enter into any transaction of any kind with any Affiliate of
Borrower, whether or not in the ordinary course of business, other than on fair and reasonable
terms substantially as favorable to Borrower or such Subsidiary as would be obtainable by Borrower
or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an
Affiliate, provided that the foregoing restriction shall not apply to transactions between
or among Borrower and any Guarantor or between and among Guarantors.

     (i) Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement or
any other Loan Document) that (a) limits the ability (i) of any Subsidiary to make Restricted
Payments to Borrower or any Guarantor or to otherwise transfer property to Borrower or any
Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness of Borrower or (iii) of Borrower or
any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person;
provided, however, that this clause (iii) shall not prohibit any negative pledge
incurred or provided in favor of any holder of Indebtedness permitted under Section (c)(v)
solely to the extent any such negative pledge relates to the property financed by or the subject of
such Indebtedness; or (b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person.

     (j) Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly,
and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such purpose.

     (k) Financial Covenants.

     (i) Consolidated Leverage Ratio. (i) Permit the Consolidated Leverage Ratio for any
period of four fiscal quarters of the Borrower ending as of any Acquisition Adjustment Calculation
Date to be greater than 3.0:1; or (ii) permit the Consolidated Leverage Ratio for any other period
of four fiscal quarters of the Borrower to be greater than 2.5:1.

     (ii) Consolidated Adjusted EBITDA. Permit Consolidated Adjusted EBITDA, for any period
of four fiscal quarters of the Borrower measured as of the end of any fiscal quarter of the
Borrower, to be less than (a) if the Acquisition has not been consummated, Twenty Million Dollars
($20,000,000), and (b) if the Acquisition has been consummated, Twenty-Five Million Dollars
($25,000,000).

     (iii) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage
Ratio, at any time during any period of four fiscal quarters of the Borrower, to be less than
3.5:1.

 

 

8.

EVENTS OF DEFAULT AND REMEDIES

     (a) Events of Default. Any of the following shall constitute an Event of Default:

     (i) Non-Payment. Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or
(ii) within three days after the same becomes due, any interest on any Loan or on any L/C
Obligation, or any fee due hereunder, or (iii) within five days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or

     (ii) Specific Covenants. Borrower fails to perform or observe any term, covenant or
agreement contained in any of Sections 6(a), 6(b), 6(c), 6(e),
6(j), 6(k), 6(l), 6.13, 6.14, 7.01 (other than with
respect to involuntary liens), 7.02, 7.03, 7.04, 7.05,
7.06, 7.07, 7.10 or 7.11, or any Guarantor fails to perform or
observe any term, covenant or agreement contained in Section 2 of the Guaranty; or

     (iii) Other Defaults. Any Loan Party fails to perform or observe any other covenant or
agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part
to be performed or observed and such failure continues for 30 days or any default or event of
default occurs under any other Loan Document; or

     (iv) Representations and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of Borrower or any other Loan Party herein,
in any other Loan Document, or in any document delivered in connection herewith or therewith shall
be incorrect or misleading when made or deemed made; or

     (v) Cross-Default. (i) The Borrower or any Domestic Material Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness
hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to
observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee
or contained in any instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to permit the holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (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 be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there
occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract
as to which Borrower or any Domestic Material Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap
Contract as to which the Borrower or any Domestic Material Subsidiary is an Affected Party (as

 

 

so
defined) and, in either event, the Swap Termination Value owed by the Borrower or such Domestic
Material Subsidiary as a result thereof is greater than the Threshold Amount; or

     (vi) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries institutes
or consents to the institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or
for all or any material part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the application or consent of
such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any
proceeding under any Debtor Relief Law relating to any such Person or to all or any material part
of its property is instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

     (vii) Inability to Pay Debts; Attachment. (i) The Borrower or any Domestic Material
Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as
they become due, or (ii) any writ or warrant of attachment or execution or similar process is
issued or levied against all or any material part of the property of any such Person and is not
released, vacated or fully bonded within 30 days after its issue or levy; or

     (viii) Judgments. There is entered against the Borrower or any Domestic Material
Subsidiary (i) one or more final judgments or orders for the payment of money in an aggregate
amount (as to all such judgments or orders) exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there
is a period of 10 consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or

     (ix) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability of Borrower under
Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of the Threshold Amount, or (ii) Borrower or any ERISA Affiliate fails to pay when due,
after the expiration of any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount
in excess of the Threshold Amount; or

     (x) Invalidity of Loan Documents. Any Loan Document or any provision thereof, at any
time after its execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force
and effect; or any Loan Party or any other Person contests in any manner the validity or
enforceability of any Loan Document or any provision thereof; or any Loan Party denies that it has
any or further liability or obligation under any Loan Document, or purports to revoke, terminate or
rescind any Loan Document or any provision thereof; or

     (xi) Change of Control. There occurs any Change of Control with respect to the
Borrower or any Guarantor; or

 

 

     (xii) Material Adverse Effect. There occurs any event or circumstance that has a
Material Adverse Effect and such Material Adverse Effect is not removed or corrected within 30 days
after the Borrower has written notice thereof from Agent.

     (b) Remedies Upon Event of Default. If any Event of Default occurs and is continuing, Agent
shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the
following actions:

     (i) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer
to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be
terminated;

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

     (iii) require that Borrower Cash Collateralize the L/C Obligations (in an amount equal to the
then Outstanding Amount thereof); and

     (iv) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies
available to it, the Lenders and the L/C Issuer under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to Borrower under the Bankruptcy Code of the United States, the
obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and
all interest and other amounts as aforesaid shall automatically become due and payable, and the
obligation of Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically
become effective, in each case without further act of Agent or any Lender.

     (c) Application of Funds. After the exercise of remedies provided for in Section (b)
(or after the Loans have automatically become immediately due and payable and the L/C Obligations
have automatically been required to be Cash Collateralized as set forth in the proviso to
Section (b)), any amounts received on account of the Obligations shall be applied by Agent
in the following order:

     First, to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of counsel to Agent
(including fees and time charges for attorneys who may be employees of Agent) and amounts payable
under Article III) payable to Agent in its capacity as such;

     Second, to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal, interest and L/C Fees) payable to Lenders and the L/C
Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C
Issuer (including fees and time charges for attorneys who may be employees of any Lender or the L/C
Issuer) and amounts payable under Article III), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;

 

 

     Third, to payment of that portion of the Obligations constituting (i) accrued and
unpaid L/C Fees and interest on the Loans, L/C Borrowings and other Obligations and (ii) fees,
premiums and scheduled periodic payments due under any Swap Contract between the Borrower and any
Lender or any Affiliate of any Lender permitted by Section 7(c)(iv) and any interest
accrued thereon, ratably among the Lenders and the L/C Issuer in proportion to the respective
amounts described in this clause Third payable to them;

     Fourth, to payment of that portion of the Obligations constituting (i) unpaid
principal of the Loans and L/C Borrowings (which, in the case of Term Loans shall be applied to
principal payments in inverse order of maturity) and (ii) breakage, termination or other payments
due under any Swap Contract between the Borrower and any Lender or any Affiliate of any Lender
permitted by Section 7(c)(iv) and any interest accrued thereon, ratably among the Lenders
and the L/C Issuer in proportion to the respective amounts described in this clause Fourth
held by them;

     Fifth, to Agent for the account of the L/C Issuer, to Cash Collateralize that portion
of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit; and

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

Subject to Section 2(c)(iii), amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy
drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash
Collateral after all Letters of Credit have either been fully drawn or expired, such remaining
amount shall be applied to the other Obligations, if any, in the order set forth above.

9.

ADMINISTRATIVE AGENT

     (a) Appointment and Authorization of Administrative Agent.

     (i) Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act
on its behalf as Administrative Agent hereunder and under the other Loan Documents and authorizes
Agent to take such actions on its behalf and to exercise such powers as are delegated to Agent by
the terms hereof or thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of Agent, the Lenders and the
L/C Issuer, and neither Borrower nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions.

     (ii) Agent shall also act as the “collateral agent” under the Loan Documents, and each of the
Lenders and the L/C Issuer hereby irrevocably appoints and authorizes Agent to act as the
agent of such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any
and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations,
together with such powers and discretion as are reasonably incidental thereto. In this connection,
Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by Agent
pursuant to Section (e) or otherwise for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Collateral

 

 

Documents, or for exercising any
rights and remedies thereunder at the direction of Agent), shall be entitled to the benefits of all
provisions of this Article IX and Article X, as though such co-agents, sub-agents
and attorneys-in-fact were the “collateral agent” under the Loan Documents as if set forth in full
herein with respect thereto.

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

     (c) Exculpatory Provisions. Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the generality of the
foregoing, Agent:

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

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

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

     (iv) Agent shall not be liable for any action taken or not taken by it (i) with the consent or
at the request of the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary, or as Agent shall believe in good faith shall be necessary, under the circumstances
as provided in Sections 8(b) and 10(a)) or (ii) in the absence of its own gross
negligence or willful misconduct. Agent shall be deemed not to have knowledge of any Default unless
and until written notice describing such Default is given to Agent by Borrower, a Lender or the L/C
Issuer. Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any

 

 

other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to Agent.

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

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

     (f) Resignation of Agent. Agent may at any time give notice of its resignation to Lenders, the
L/C Issuer and Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall
have the right, in consultation with Borrower, to appoint a successor, which shall be a bank with
an office in the United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice of its resignation,
then the retiring Agent may on behalf of Lenders and the L/C Issuer, appoint a successor Agent
meeting the qualifications set forth above; provided that if Agent shall notify Borrower
and the Lenders that no qualifying Person has accepted such appointment, then such resignation
shall nonetheless become effective in accordance with such notice and (1) the retiring Agent shall
be discharged from its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any collateral security held by Agent on behalf of the Lenders or the L/C
Issuer under any of the Loan Documents, the retiring Agent shall continue to
hold such collateral security until such time as a successor Agent is appointed) and (2) all
payments, communications and determinations provided to be made by, to or through Agent shall
instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required
Lenders appoint a successor Agent as provided for above in this Section. Upon the acceptance of a
successor’s appointment as Agent hereunder, such successor shall succeed to and

 

 

become vested with
all of the rights, powers, privileges and duties of the retiring (or retired) Agent, and the
retiring Agent shall be discharged from all of its duties and obligations hereunder or under the
other Loan Documents (if not already discharged therefrom as provided above in this Section). The
fees payable by Borrower to a successor Agent shall be the same as those payable to its predecessor
unless otherwise agreed between Borrower and such successor. After the retiring Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article and
Section 10(d) shall continue in effect for the benefit of such retiring Agent, its sub
agents and their respective Related Parties in respect of any actions taken or omitted to be taken
by any of them while the retiring Administrative Agent was acting as Administrative Agent.

     Any resignation by Bank of America as Agent pursuant to this Section shall also constitute its
resignation as L/C Issuer and Swing Line Lender. Upon the acceptance of a successor’s appointment
as Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring
L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time
of such succession or make other arrangements satisfactory to the retiring L/C Issuer to
effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of
Credit.

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

     (h) No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the
Arrangers, Book Managers or Documentation Agents listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as Agent, a Lender or the L/C Issuer hereunder.

     (i) Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding
under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
Agent shall have made any demand on Borrower) shall be entitled and empowered, by intervention
in such proceeding or otherwise.

     (i) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid
and to file such other documents as may be necessary or advisable in order to have the

 

 

claims of
Lenders, the L/C Issuer and Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of Lenders, the L/C Issuer and Agent and their respective agents and
counsel and all other amounts due Lenders, the L/C Issuer and Agent under Sections 2(c)(i)
and (j), 2(i) and 10(d)) allowed in such judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such
payments to Agent and, in the event that Agent shall consent to the making of such payments
directly to Lenders and the L/C Issuer, to pay to Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agent and its agents and counsel, and any
other amounts due Agent under Sections 2(i) and 10(d). Nothing contained herein
shall be deemed to authorize Agent to authorize or consent to or accept or adopt on behalf of any
Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the L/C Issuer or to authorize Agent to
vote in respect of the claim of any Lender or the L/C Issuer in any such proceeding.

     (j) Collateral and Guaranty Matters. The Lenders and the L/C Issuer irrevocably authorize
Agent, at its option and in its discretion,

     (i) to release any Lien on any property granted to or held by Agent under any Loan Document
(i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other
than contingent indemnification obligations) and the expiration or termination of all Letters of
Credit (other than Letters of Credit as to which other arrangements satisfactory to Agent and the
L/C Issuer shall have been made), (ii) that is sold or to be sold as part of or in connection with
any sale permitted hereunder or under any other Loan Document, or (iii) subject to Section
10.01, if approved, authorized or ratified in writing by the Required Lenders;

     (ii) to subordinate any Lien on any property granted to or held by the Administrative Agent
under any Loan Document to the holder of any Lien on such property that is permitted by Section
7.01(i); and

     (iii) to release any Guarantor from its obligations under the Guaranty if such Person ceases
to be a Subsidiary as a result of a transaction permitted hereunder.

     Upon request by Agent at any time, the Required Lenders will confirm in writing Agent’s authority
to release or subordinate its interest in particular types or items of property, or to release any
Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

10.

MISCELLANEOUS

     (a) Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by Borrower or any other Loan Party therefrom, shall
be effective unless in writing signed by the Required Lenders and Borrower or the applicable Loan
Party, as the case may be, and acknowledged by Agent, and

 

 

each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall:

     (i) waive any condition set forth in Section 4(a)(i) without the written consent of
each Lender; provided, however, in the sole discretion of Agent, only a waiver by
Agent shall be required with respect to immaterial matters or items specified in
Section 4(a)(i)(iii) or (iv) with respect to which Borrower has given assurances
satisfactory to Agent that such items shall be delivered promptly following the Closing Date;

     (ii) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8(b)) without the written consent of such Lender;

     (iii) postpone any date fixed by this Agreement or any other Loan Document for any payment
(excluding mandatory prepayments) of principal, interest, fees or other amounts due to Lenders (or
any of them) hereunder or under any other Loan Document without the written consent of each Lender
directly affected thereby;

     (iv) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (iv) of the second proviso to this Section (a)) any fees
or other amounts payable hereunder or under any other Loan Document, without the written consent of
each Lender directly affected thereby; provided, however, that only the consent of
the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive
any obligation of Borrower to pay interest or L/C Fees at the Default Rate or (ii) to amend any
financial covenant hereunder (or any defined term used therein) even if the effect of such
amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee
payable hereunder;

     (v) change Section 2(m) or Section 8(c) in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each Lender;

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

     (vii) release any Guarantor from the Guaranty or release the Liens on all or substantially all
of the Collateral in any transaction or series of related transactions except in accordance with
the terms of any Loan Document, without the written consent of each Lender;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights
or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of
Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall,
unless in writing and signed by Agent in addition to the Lenders required above, affect the rights
or duties of Agent under this Agreement or any other Loan Document; and (iii) the Fee

 

 

Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only by the parties
thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right
to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of
such Lender may not be increased or extended without the consent of such Lender.

     (b) Notices; Effectiveness; Electronic Communication.

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

     (1) if to Borrower, Agent the L/C Issuer or the Swing Line Lender, to the address,
telecopier number, electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

     (2) if to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire.

Notices and other communications sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received; notices and other
communications sent by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient). Notices and other communications
delivered through electronic communications to the extent provided in subsection (b) below, shall
be effective as provided in such subsection (b).

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

 

 

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

     (iv) Change of Address, Etc. Each of Borrower, Agent the L/C Issuer and the Swing Line
Lender may change its address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by notice to
Borrower, Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to
notify Agent from time to time to ensure that Agent has on record (i) an effective address, contact
name, telephone number, telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each
Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at
all times have selected the “Private Side Information” or similar designation on the content
declaration screen of the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender’s compliance procedures and applicable Law, including United
States Federal and state securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of
the Platform and that may contain material non-public information with respect to the Borrower
or its securities for purposes of United States Federal or state securities laws.

     (v) Reliance by Agent, L/C Issuer and Lenders. Agent, the L/C Issuer and Lenders shall
be entitled to rely and act upon any notices (including telephonic Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. Borrower shall indemnify Agent, the L/C Issuer, each Lender and the Related
Parties of each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of

 

 

Borrower. All
telephonic notices to and other telephonic communications with Agent may be recorded by Agent, and
each of the parties hereto hereby consents to such recording.

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

     Notwithstanding anything to the contrary contained herein or in any other Loan Document, the
authority to enforce rights and remedies hereunder and under the other Loan Documents against the
Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law
in connection with such enforcement shall be instituted and maintained exclusively by, Agent in
accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer;
provided, however, that the foregoing shall not prohibit (a) Agent from exercising
on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as
Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer or the Swing Line Lender
from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C
Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c)
any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the
terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and
filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party
under any Debtor Relief Law; and provided, further, that if at any time there is no
Person acting as Agent hereunder and under the other Loan Documents, then (i) the Required Lenders
shall have the rights otherwise ascribed to Agent pursuant to Section 8.02 and (ii) in
addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject
to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any
rights and remedies available to it and as authorized by the Required Lenders.

     (d) Expenses; Indemnity; Damage Waiver.

     (i) Costs and Expenses. Borrower shall pay (i) all reasonable out of pocket expenses
incurred by Agent and its Affiliates (including the reasonable fees, charges and disbursements of
counsel for Agent), in connection with the syndication of the credit facilities provided for
herein,
the preparation, negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby shall be consummated),
(ii) all reasonable out of pocket expenses incurred by the L/C Issuer in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out of pocket expenses incurred by Agent, any Lender or the L/C Issuer
(including the fees, charges and disbursements of any counsel for Agent, any Lender or the L/C
Issuer), and shall pay all fees and time charges for attorneys who may be employees of Agent, any
Lender or the L/C Issuer, in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its rights under this
Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder,

 

 

including
all such out of pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans or Letters of Credit.

     (ii) Indemnification by Borrower. Borrower shall indemnify Agent (and any sub-agent
thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including the fees, charges
and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of
any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or
by Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or
thereby, or, in the case of Agent (and any sub-agent thereof) and its Related Parties only, the
administration of this Agreement and the other Loan Documents (including in respect of any matters
addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of
the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto,; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses (x) are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by Borrower or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if
Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.

     (iii) Reimbursement by Lenders. To the extent that Borrower for any reason fails to
indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it
to Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing,
each Lender severally agrees to pay to Agent (or any such sub-agent), the L/C Issuer or such
Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against Agent (or any such
sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the
foregoing acting for Agent (or any such sub-agent) or L/C Issuer in connection with such

 

 

capacity.
The obligations of the Lenders under this subsection (c) are subject to the provisions of
Section 2(l)(iv).

     (iv) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No
Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use
by unintended recipients of any information or other materials distributed to such unintended
recipients by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual damages resulting from
the gross negligence or willful misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent jurisdiction.

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

     (vi) Survival. The agreements in this Section shall survive the resignation of Agent,
the L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

     (e) Payments Set Aside. To the extent that any payment by or on behalf of Borrower is made to
Agent, the L/C Issuer or any Lender, or Agent, the L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant
to any settlement entered into by Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any proceeding under any
Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the
L/C Issuer severally agrees to pay to Agent upon demand its applicable share (without duplication)
of any amount so recovered from or repaid by Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders and the
L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.

     (f) Successors and Assigns.

     (i) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of Agent, the L/C Issuer and

 

 

each
Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d) of this Section,
or (iii) by way of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the
extent expressly contemplated hereby, the Related Parties of each of Agent, the L/C Issuer and the
Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

     (ii) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to it);
provided that any such assignment shall be subject to the following conditions:

     (1) Minimum Amounts.

     10.6.2.1.1 in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitments and the Loans at the time owing to it or in the case
of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund, no
minimum amount need be assigned; and

     10.6.2.1.2 in any case not described in subsection (b)(i)(A) of this Section,
the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with respect to
such assignment is delivered to Agent or, if “Trade Date” is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than (1) in the
case of a Term Commitment, Two Million Five Hundred Thousand Dollars ($2,500,000)
and (2) in the case of a Revolving Commitment, Five Million Dollars ($5,000,000)
unless, in each case, each of Agent and, so long as no Event of Default has occurred
and is continuing, Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); provided, however, that
concurrent assignments to members of an Assignee Group and concurrent assignments
from members of an Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group) will be treated as a single assignment
for purposes of determining whether such minimum amount has been met;

     (2) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned, except that

 

 

this
clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in respect of
Swing Line Loans;

     (3) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

     10.6.2.3.1 the consent of Borrower (such consent not to be unreasonably
withheld or delayed) shall be required unless (1) an Event of Default has occurred
and is continuing at the time of such assignment or (2) such assignment is to a
Lender or an Affiliate of a Lender or an Approved Fund;

     10.6.2.3.2 the consent of Agent (such consent not to be unreasonably withheld
or delayed) shall be required if such assignment is of a Term Commitment prior to
the Term Borrowing pursuant to Section 2.01(b) or of a Revolving Commitment
to a Person that is not a Lender having the applicable Commitment or an Affiliate of
such Lender or an Approved Fund with respect to such Lender;

     10.6.2.3.3 the consent of Agent (such consent not to be unreasonably withheld
or delayed) shall be required if such assignment is of a Term Commitment after the
Term Borrowing pursuant to Section 2.01(b) to a Person that is not a Lender
with a Term Commitment or an Affiliate of such Lender or an Approved Fund with
respect to such Lender;

     10.6.2.3.4 the consent of the L/C Issuer (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment of a Revolving Commitment
or a Revolving Loan; and

     10.6.2.3.5 the consent of the Swing Line Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment of a
Revolving Commitment or a Revolving Loan.

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

     (5) No Assignment to Borrower. No such assignment shall be made to Borrower or
any of Borrower’s Affiliates or Subsidiaries.

     (6) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption, the assignee
thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such

 

 

Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and
the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3(a), 3(d), 3(e), and (d) with respect to
facts and circumstances occurring prior to the effective date of such assignment. Upon request,
Borrower (at its expense) shall execute and deliver a Revolving Note and/or Term Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

     (iii) Register. Agent, acting solely for this purpose as an agent of Borrower, shall
maintain at Agent’s Office a copy of each Assignment and Assumption delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the Commitments of, and
principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be conclusive,
and Borrower, Agent and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by Borrower
and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

     (iv) Participations. Any Lender may at any time, without the consent of, or notice to,
Borrower or Agent, sell participations to any Person (other than a natural person or Borrower or
any of Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion
of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its
Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing
Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Borrower, Agent, the L/C Issuer and the
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any amendment, waiver or
other modification described in the first proviso to Section (a) that affects such
Participant. Subject to subsection (e) of this Section, Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3(a), 3(d) and 3(e) to the same
extent as if it were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section (h) as though it were a Lender, provided such
Participant agrees to be subject to Section 2(m) as though it were a Lender.

 

 

     (v) Limitations Upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3(a) or 3(d) than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with Borrower’s prior written
consent.

     (vi) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.

     (vii) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns
all of its Revolving Commitment and Revolving Loans pursuant to subsection (b) above, Bank of
America may, (i) upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or
(ii) upon 30 days’ notice to the Borrower, resign as Swing Line Lender. In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no
failure by the Borrower to appoint any such successor shall affect the resignation of Bank of
America as L/C Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as L/C
Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder
with respect to all Letters of Credit outstanding as of the effective date of its resignation as
L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Revolving Loans or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.03(c)). If Bank of America resigns as Swing Line Lender, it shall retain all the
rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it
and outstanding as of the effective date of such resignation, including the right to require the
Lenders to make Base Rate Revolving Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or
Swing Line Lender, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and duties of the
retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or make other arrangements satisfactory to Bank of America to effectively
assume the obligations of Bank of America with respect to such Letters of Credit.

     (g) Treatment of Certain Information; Confidentiality . Each of Agent, Lenders and the L/C Issuer
agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees,
advisors and representatives (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority, purporting to
have jurisdiction over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any

 

 

remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or any
Eligible Assignee invited to be a Lender pursuant to Section 2.15(c) or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction relating to
Borrower and its obligations, (g) with the consent of Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to Agent, any Lender, the L/C Issuer or any of their respective Affiliates on
a nonconfidential basis from a source other than Borrower.

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

     Each of Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may
include material non-public information concerning Borrower or a Subsidiary, as the case may be,
(b) it has developed compliance procedures regarding the use of material non-public information and
(c) it will handle such material non-public information in accordance with applicable Law,
including Federal and state securities Laws.

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

 

 

any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff
and application.

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

     (j) Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4(a), this Agreement shall become
effective when it shall have been executed by Agent and when Agent shall have received counterparts
hereof that, when taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other
electronic imaging means shall be effective as delivery of a manually executed counterpart of this
Agreement.

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

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

 

 

     (m) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01, or if any Lender is a Defaulting Lender, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such assignment),
provided that:

     (i) the Borrower shall have paid to Agent the assignment fee specified in Section
10.06(b);

     (ii) such Lender shall have received payment of an amount equal to the outstanding principal
of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder and under the other Loan Documents (including any amounts under Section
3.05) from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);

     (iii) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and

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

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

     (n) Governing Law; Jurisdiction; Etc.

     (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF WASHINGTON.

     (ii) SUBMISSION TO JURISDICTION. BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF WASHINGTON SITTING IN KING COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE DISTRICT OF WASHINGTON, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH WASHINGTON STATE
COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER

 

 

PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT,
ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.

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

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

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

     (p) No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in
connection with any amendment, waiver or other modification hereof or of any other Loan Document),
Borrower and each other Loan Party acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by
Agent and Arranger are arm’s-length commercial transactions between Borrower, each other Loan Party
and their respective Affiliates, on the one hand, and Agent and Arranger, on the other hand, (B)
each of Borrower and the other Loan Parties has consulted its own legal, accounting, regulatory and
tax

 

 

advisors to the extent it has deemed appropriate, and (C) Borrower and each other Loan Party is
capable of evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents; (ii) (A) Agent and Arranger each
is and has been acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary
for the Borrower, any other Loan Party or any of their respective Affiliates, or any other Person
and (B) neither Agent nor Arranger has any obligation to the Borrower, any other Loan Party or any
of their respective Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; and (iii) Agent and
Arranger and their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower, the other Loan Parties and their
respective Affiliates, and neither Agent nor Arranger has any obligation to disclose any of such
interests to the Borrower, any other Loan Party or any of their respective Affiliates. To the
fullest extent permitted by law, each of Borrower and the other Loan Parties hereby waives and
releases any claims that it may have against Agent and Arranger with respect
to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of
any transaction contemplated hereby.

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

     (r) USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and Agent (for itself and
not on behalf of any Lender) hereby notifies Borrower that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
it is required to obtain, verify and record information that identifies Borrower, which information
includes the name and address of Borrower and other information that will allow such Lender or
Agent, as applicable, to identify Borrower in accordance with the Act. Borrower shall, promptly
following a request by Agent or any Lender, provide all documentation and other information that
Agent or such Lender requests in order to comply with its ongoing obligations under applicable
“know your customer” and anti-money laundering rules and regulations, including the Act.

     (s) Time of the Essence. Time is of the essence of the Loan Documents.

     (t) Amendment and Restatement . To the extent this Agreement  contains provisions that are  the same as in the Existing
Credit Agreement,  those provisions shall be deemed restated in this Agreement.  To the extent
 this Agreement  contains provisions different than those is the Existing Credit Agreement, the
Existing Credit Agreement shall be deemed amended by this Agreement.

 

 

     (u) Oral Agreements Not Enforceable. ORAL AGREEMENTS AND ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

[Signature Page Follows]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.

	 	 	 	 	 	 
	 	 	FLOW INTERNATIONAL CORPORATION	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Agent	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as a Lender, L/C	 
	 	 	Issuer and Swing Line Lender	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as a	 
	 

	 	Lender	 	 	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	WELLS FARGO BANK N.A., as a Lender	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 
	 

	 	 	 	 	 

 

 

	 	 	 	 	 	 
	 	 	BANK OF THE WEST, as a Lender	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	UNION BANK OF CALIFORNIA, N.A., as a	 
	 

	 	Lender	 	 	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	COLUMBIA STATE BANK, as a Lender	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 
	 

	 	Title:exv4w1

Exhibit 4.1

CAPITAL PLAN

for the

Federal Home Loan Bank of Dallas

This capital plan is neither an offer to sell or exchange nor a solicitation of an offer to
purchase or exchange any capital stock of the Federal Home Loan Bank of Dallas.

Amended and Revised

May 28, 2008

(Approved by the Federal Housing Finance Board on June 11, 2008)

 

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

Table of Contents

	 	 	 	 	 	 	 	 	 
	Section	 	Page
	 	 	 	 	 
	 	 	 	 
	Definition of Terms	 	 	4	 
	 	 	 	 	 
	 	 	 	 
	Section 1:	 	Overview
	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	 	 	1.1	 	General
	 	 	 	 
	 	 	1.2	 	Legal Authorities
	 	 	 	 
	 	 	1.3	 	Amendments to the Capital Plan
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Section 2:	 	Capital Structure
	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	 	 	2.1	 	Authorized Class of Capital Stock
	 	 	 	 
	 	 	2.2	 	Par Value of Capital Stock
	 	 	 	 
	 	 	2.3	 	Ownership of Retained Earnings
	 	 	 	 
	 	 	2.4	 	Preference in Liquidation, Consolidation or Merger
	 	 	 	 
	 	 	2.5	 	Finance Board Authority
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Section 3:	 	Capital Stock
	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	 	 	3.1	 	Purchase of Capital Stock
	 	 	 	 
	 	 	3.2	 	Transfers of Capital Stock
	 	 	 	 
	 	 	3.3	 	Redemption of Capital Stock
	 	 	 	 
	 	 	3.4	 	Repurchase of Capital Stock
	 	 	 	 
	 	 	3.5	 	Limitations on Redemption or Repurchase of Capital Stock
	 	 	 	 
	 	 	3.6	 	Retirement of Capital Stock
	 	 	 	 
	 	 	3.7	 	Dividends on Capital Stock
	 	 	 	 
	 	 	3.8	 	Voting Rights
	 	 	 	 

2

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	 	 	 	 	 	 	 
	Section	 	Page
	 	 	 	 	 
	 	 	 	 
	Section 4:	 	Minimum Investment Requirements
	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	 	 	4.1	 	Membership Investment Requirement
	 	 	 	 
	 	 	4.2	 	Activity-Based Investment Requirement
	 	 	 	 
	 	 	4.3	 	Periodic Review of Minimum Investment Requirements
	 	 	 	 
	 	 	4.4	 	Member Compliance
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Section 5:	 	Termination of Membership
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	 	5.1	 	Voluntary Withdrawal
	 	 	 	 
	 	 	5.2	 	Involuntary Termination of Membership
	 	 	 	 
	 	 	5.3	 	Termination by Charter Dissolution
	 	 	 	 
	 	 	5.4	 	General Membership Termination Provisions
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Section 6:	 	Capital Structure Conversion
	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	 	 	6.1	 	Capital Structure Conversion Process
	 	 	 	 
	 	 	6.2	 	Transition Procedures
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	Section 7:	 	Capital Plan Reviews
	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	 	 	7.1	 	Independent Certified Public Accountant
	 	 	 	 
	 	 	7.2	 	Nationally Recognized Statistical Rating Organization
	 	 	 	 
	 	 	7.3	 	Good Faith Determination
	 	 	 	 

3

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

Definition of Terms

	1.	 	Acquired Member Assets (“AMA”) means assets that may be acquired by the Bank through
its members in accordance with the Regulations.
	 
	2.	 	Capital Plan means the plan for a new capital structure as required by Section 6(b)
of the Bank Act, 12 U.S.C. §1426(b).
	 
	3.	 	Class B Stock means capital stock held by members and issued by the Bank pursuant to
the Capital Plan, which will be redeemable by the Bank for cash at Par Value with five years
prior written notice provided by a member to the Bank.
	 
	4.	 	Conversion Date means the date upon which the Bank converts to the new capital
structure described in this Capital Plan and the existing capital stock is exchanged for Class
B Stock.
	 
	5.	 	Excess Stock means that amount of Class B Stock held by a member in excess of the
member’s minimum investment requirement as defined in this Capital Plan.
	 
	6.	 	Minimum Capital Requirement(s) means the amount of capital the Bank is required to
hold in order to comply with all statutory and regulatory capital requirements, or any other
capital requirement that may be imposed on the Bank by the Finance Board.
	 
	7.	 	Par Value means the par value specified in Section 2.2 of this Capital Plan for shares of Class B Stock issued in accordance with this Capital Plan.
	 
	8.	 	Stock Redemption means redemption of Class B Stock by the Bank pursuant to a stock
redemption notice in accordance with Section 3.3 of the Capital Plan or pursuant to a
withdrawal notice in accordance with Section 5.1 of the Capital Plan.
	 
	9.	 	Stock Repurchase means repurchase of Class B Stock by the Bank at its discretion in
accordance with the Regulations and Section 3.4 of the Capital Plan. The decision to
repurchase Class B Stock rests with the Bank and cannot be compelled by a member.

4

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	1.	 	Overview

	1.1	 	General
	 
	 	 	Pursuant to the Federal Home Loan Bank Act, as amended (12 U.S.C. §1421, et seq.) (“the Bank
Act”) and the governing Regulations (“Regulations”) of the Federal Housing Finance Board
(“Finance Board”), the Board of Directors of the Federal Home Loan Bank of Dallas (“the
Bank”) hereby establishes this Capital Plan to provide a new capital structure for the Bank,
and ensure that the Bank is able to comply with its Minimum Capital Requirements at all
times after the Conversion Date. This Capital Plan is designed to facilitate the
continuation of the Bank’s cooperative business model.
	 
	1.2	 	Legal Authorities
	 
	 	 	This document is governed by the Bank Act and the Regulations. Any action designated by
this Capital Plan as being subject to the “discretion” or “sole discretion” of the Bank or
the Board of Directors shall nevertheless be subject to the regulatory oversight of the
Finance Board.
	 
	1.3	 	Amendments to the Capital Plan
	 
	 	 	In accordance with the Regulations, any amendments to this Capital Plan must be submitted by
the Bank’s Board of Directors to the Finance Board for approval prior to implementation.

	2.	 	Capital Structure

	2.1	 	Authorized Class of Capital Stock
	 
	 	 	The Board of Directors of the Bank hereby authorizes the issuance of one class of capital
stock to be designated as Class B Stock, which will have a five year redemption notice
period.
	 
	2.2	 	Par Value of Capital Stock
	 
	 	 	All Class B Stock will have a Par Value of $100 per share. All Class B Stock will be
issued, redeemed, repurchased and transferred only at Par Value.
	 
	2.3	 	Ownership of Retained Earnings
	 
	 	 	In accordance with the Bank Act (12 U.S.C. §1426(h)(1)), the retained earnings, surplus,
undivided profits and equity reserves, if any, of the Bank are owned by the holders of Class
B Stock in proportion to each holder’s share of the total outstanding shares of Class B
Stock. Holders of Class B Stock have no right to receive any portion of the retained
earnings, surplus, undivided profits and equity reserves, if any, of the Bank except through
the declaration of a dividend or capital distribution approved by the Board of Directors, or
upon liquidation of the Bank.
	 
	2.4	 	Preference in Liquidation, Consolidation or Merger
	 
	 	 	In the event of liquidation of the Bank, the Board of Directors may authorize the pro rata
distribution of any retained earnings, surplus, undivided profits, and equity reserves of
the Bank, to holders of Class B Stock in proportion to each holder’s share of the total shares of outstanding Class B Stock, provided that all payment obligations to the Bank’s
existing creditors have been fully satisfied, and all Class B Stock has been redeemed at Par
Value.
	 
	 	 	In the event the Bank is merged or consolidated into another Federal Home Loan Bank, the
holders of the outstanding Class B Stock of the Bank will be entitled to the rights and
benefits set forth in any applicable plan of merger and/or terms established or approved by
the Finance Board. In the event another Federal Home Loan Bank is merged or consolidated
into the Bank, the

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Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	holders of the outstanding capital stock of the other Federal Home Loan
Bank will be entitled to the rights and benefits set forth in any applicable plan of merger
and/or terms established or approved by the Finance Board.
	 
	2.5	 	Finance Board Authority
	 
	 	 	No part of Section 2.4 of this Capital Plan will be construed to limit the authority granted
to the Finance Board under 12 U.S.C. §1446 to prescribe rules, regulations or orders
governing the liquidation, reorganization or merger of a Federal Home Loan Bank.

	3.	 	Capital Stock

	 	 	All members are required to purchase and redeem capital stock in accordance with the
requirements of the Bank Act, the Regulations and this Capital Plan, and the Bank will not
issue capital stock other than in accordance with the Regulations.
	 
	3.1	 	Purchase of Capital Stock
	 
	 	 	All members are required to purchase Class B Stock as a condition of
membership in accordance with the requirements of Section 4 of this
Capital Plan. The Class B Stock of the Bank may be issued only to
members of the Bank and institutions that have been approved by the
Bank to be members, and may be held only by members of the Bank,
non-member institutions that acquire Class B Stock by virtue of
acquiring member institutions, or by former members that retain Class
B Stock in accordance with this Capital Plan following termination of
membership. The Class B Stock of the Bank may be traded only between
the Bank and its members. All Class B Stock will be issued in book
entry form, and the Bank will act as its own transfer agent.
	 
	3.2	 	Transfers of Capital Stock
	 
	 	 	In accordance with the Regulations, and only with the prior approval
of the Bank as it deems appropriate, a member may transfer, at Par
Value, any Excess Stock to any other member or institution that has
satisfied all conditions for becoming a member other than the purchase
of the Class B Stock required to satisfy its minimum investment
requirement. All transfers of Class B Stock will be effective upon
being recorded on the appropriate books and records of the Bank.
Approval for all transfers is subject to the requirement that,
following the transfer, the transferring member would continue to hold
sufficient stock to meet the member’s minimum investment requirement.
Except as provided in Section 5.3 of the Capital Plan, stock
redemption notices will not transfer with Excess Stock that is
transferred.
	 
	3.3	 	Redemption of Capital Stock
	 
	 	 	Subject to the limitations in this Capital Plan, Class B Stock will be redeemable for cash
at Par Value with five (5) years prior written notice provided by the member to the Bank. A
member may request redemption of Class B Stock by providing a written stock redemption
notice to the Bank in accordance with Section 3.3.1 of this Capital Plan indicating the
number of shares of Class B Stock to be redeemed and the date(s) those shares were issued to
the member, or by submitting a membership withdrawal notice in accordance with Section 5.1
of this Capital Plan. If the redemption notice fails to properly identify the particular shares to be redeemed, the member shall be deemed to have requested redemption of the most
recently issued shares that are not already subject to a pending redemption request. The
five-year stock redemption notice period will commence upon receipt by the Bank of the written stock redemption or withdrawal notice.
A member may not have more than one stock redemption or withdrawal notice outstanding at
any one time for the same shares of Class B Stock.

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Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	The Bank will not be obligated to redeem a
member’s Class B Stock other than in
accordance with this Capital Plan. Nothing in
this section will preclude the Bank from
repurchasing Excess Stock in accordance with
Section 3.4 of this Capital Plan, including
Class B Stock for which a stock redemption
notice has been submitted.

	 	3.3.1	 	Notice of Redemption
	 
	 	 	 	Subject to the limitations in this Capital Plan, a member may request redemption of
Class B Stock by submitting five years written notice to the Bank. No member may
have more than one stock redemption notice outstanding for the same share(s) of
Class B Stock. To facilitate this limitation, no member may have one or more stock
redemption notices in effect at any one time that represent an aggregate amount of
Class B Stock that is greater than the total amount of Class B Stock the member
owns. If, subsequent to submitting a stock redemption notice, a member’s holdings of
Class B Stock fall below the amount of Class B Stock subject to outstanding stock
redemption notices, the Bank will automatically reduce the number of shares of stock
subject to stock redemption notices. If a member has more than one stock redemption
notice outstanding, this reduction will be applied first to the most recently
received stock redemption notice unless specified otherwise by the member in writing
within 30 days of the reduction in Class B Stock.
	 
	 	 	 	At the expiration of the five year period following receipt by the Bank of the stock
redemption notice, and subject to the limitations contained in Section 3.5 of this
Capital Plan, the Bank will pay the stated Par Value of the Class B Stock covered by
the stock redemption notice to the member in cash to the extent the Bank determines
that the Class B Stock is Excess Stock, as determined in accordance with the minimum
investment requirements in effect at the end of the redemption notice period.
	 
	 	 	 	Only Class B Stock that is Excess Stock at the expiration of the five year
redemption notice period will be redeemed pursuant to a stock redemption notice. A
stock redemption notice does not constitute a withdrawal notice as described in
Section 5.1 of this Capital Plan. At the expiration of the redemption notice
period, if the amount of Class B Stock subject to the stock redemption notice
exceeds the amount of Excess Stock held by the member, the Bank will redeem Class B
Stock equal to the amount of Excess Stock held by the member, and the stock
redemption notice for the remaining shares of Class B Stock subject to that notice
will be cancelled and a redemption cancellation fee will be assessed in accordance
with Section 3.3.2 of this Capital Plan. Alternatively, within five business days
of the expiration of the redemption notice period, the member may reduce its
activity with the Bank (subject to any applicable prepayment fees) to reduce its
minimum investment requirement and increase its holdings of Excess Stock which would
then be eligible for redemption.
	 
	 	3.3.2	 	Redemption Cancellation Notice
	 
	 	 	 	A member that has previously notified the Bank in writing of its intent to redeem
some or all of its Class B Stock may cancel the stock redemption notice for all or a
portion of the shares of Class B Stock subject to the stock redemption notice prior
to the expiration of the redemption notice period by providing a written redemption
cancellation notice to the Bank. A member may rescind a redemption cancellation
notice by providing written notice to the Bank within 30 days of the original
redemption cancellation notice.
	 
	 	 	 	A member that cancels a stock redemption notice more than 30 days after it is
received by the Bank and prior to its expiration will be subject to a redemption
cancellation fee calculated as a percentage of the Par Value of the shares of Class
B Stock subject to the redemption cancellation notice.

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Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	 	When a member submits a redemption cancellation notice more than 30 days after the
original redemption notice is received by the Bank but during the first year after
the Bank receives the original stock redemption notice, the redemption cancellation
fee will be 1.0 percent of the Par Value of the shares of Class B Stock subject to
the redemption cancellation notice; the fee during the second year will be 2.0
percent of the Par Value of the shares of Class B Stock subject to the redemption
cancellation notice; the fee during the third year will be 3.0 percent of the Par
Value of the shares of Class B Stock subject to the redemption cancellation notice;
the fee during the fourth year will be 4.0 percent of the Par Value of the shares of
Class B Stock subject to the redemption cancellation notice; and the fee during the
fifth year will be 5.0 percent of the Par Value of the shares of Class B Stock
subject to the redemption cancellation notice.
	 
	 	 	 	The Bank’s Board of Directors may from time to time modify the redemption
cancellation fee to any percentage(s) of the Par Value of the shares of Class B
Stock subject to the redemption cancellation notice that is not less than 0.0
percent and not more than the percentages specified in the preceding paragraph. In
the event the Board of Directors reduces the redemption cancellation fee, the Board
of Directors will also determine whether the reduced fee will apply to cancellation
of previously submitted stock redemption notices as well as those submitted in the
future. Otherwise, the fee in effect at the time the stock redemption notice was
originally received by the Bank will apply to the cancellation of that notice. The
Bank will notify members in writing at least 30 days in advance of any changes in
the redemption cancellation fee. Any change in the redemption cancellation fee will
be applied equally and without discrimination to all members.

	3.4	 	Repurchase of Capital Stock
	 
	 	 	The Bank in its sole discretion may repurchase Excess Stock from time to time without regard
to the five year redemption notice period. Excess Stock repurchases may be initiated by the
Bank or requested by members, and will be subject to the limitations contained in Section
3.5 of this Capital Plan. The decision to repurchase Excess Stock will rest with the Bank
and cannot be compelled by a member.
	 
	 	 	Upon 15 days written notice, the Bank may initiate the repurchase of any amount of members’
Excess Stock. The Bank will determine the criteria for Excess Stock repurchases from time
to time, and will apply the repurchase criteria equally and without discrimination to all
members. Pursuant to an application submitted by a member to the Bank in writing or in such
other form as the Bank may designate from time to time, the Bank may repurchase Class B
Stock that the Bank determines to be Excess Stock.
	 
	 	 	Unless the Bank is notified by a member otherwise in writing within 30 days of a Class B
Stock repurchase transaction, repurchases of Excess Stock will automatically reduce the
amount of Class B Stock subject to any outstanding stock redemption or withdrawal notices by
the amount of Class B Stock repurchased. If a member has more than one stock redemption and
/ or withdrawal notice outstanding, this reduction will be applied first to the most
recently received stock redemption or withdrawal notice.
	 
	 	 	A member’s submission of a withdrawal notice in accordance with Section 5.1 of this Capital
Plan, or its termination of membership in any other manner, will not, in and of itself,
cause any Class B Stock to be deemed Excess Stock for purposes of this section.
	 
	3.5	 	Limitations on Redemption or Repurchase of Capital Stock
	 
	 	 	The Bank will not redeem or repurchase Class B Stock without the prior
written approval of the Finance Board if the Finance Board or the
Board of Directors has determined that the Bank has

8

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	incurred, or is likely to incur, losses that result in, or are likely to result in,
charges against the capital of the Bank, as defined in the
Regulations. This prohibition will apply even if a Bank is in
compliance with its Minimum Capital Requirements, and will remain in
effect for however long the Bank continues to incur such charges or
until the Finance Board determines that such charges are not expected
to continue.
	 
	 	 	The Bank will not redeem or repurchase Class B Stock if the redemption or repurchase would
cause the Bank to be out of compliance with its Minimum Capital Requirements, or if the
redemption or repurchase would cause the member to be out of compliance with its minimum
investment requirement.
	 
	 	 	In accordance with the Regulations, the Bank’s Board of Directors may suspend redemption of
Class B Stock if the Bank reasonably believes that continued redemption of Class B Stock
would cause the Bank to fail to meet its Minimum Capital Requirements in the future, would
prevent the Bank from maintaining adequate capital against a potential risk that may not be
adequately reflected in its Minimum Capital Requirements, or would otherwise prevent the
Bank from operating in a safe and sound manner.
	 
	 	 	In accordance with the Regulations, the Bank will not repurchase any Class B Stock without
the written consent of the Finance Board during any period in which the Bank has suspended
redemptions of Class B Stock in accordance with this section. As required by the
Regulations, in the event the Bank suspends Class B Stock redemptions, the Bank will notify
the Finance Board in writing within two business days of the date of the decision to suspend
redemptions, informing the Finance Board of the reasons for the suspension and the Bank’s
strategies and time frames for addressing the conditions that led to the suspension. The
Finance Board may require the Bank to re-institute the redemption of Class B Stock.
	 
	 	 	If at any time the Bank determines that the total amount of Class B Stock subject to
outstanding stock redemption or withdrawal notices with expiration dates within the
following 12 months exceeds the amount of Class B Stock the Bank could redeem and still
comply with its Minimum Capital Requirements, the Bank will determine whether to suspend
redemption and repurchase activities altogether, to fulfill requests for redemption
sequentially in the order in which they were received, to fulfill the requests on a pro rata
basis, or to take other action deemed appropriate by the Bank.
	 
	3.6	 	Retirement of Capital Stock
	 
	 	 	All shares of Class B Stock that are acquired by the Bank pursuant to redemption or
repurchase transactions will be retired.
	 
	3.7	 	Dividends on Capital Stock
	 
	 	 	The Board of Directors may declare dividends to be paid on Class B Stock on a quarterly
basis or otherwise as it determines in its discretion. Each member will be entitled to
receive dividends on all Class B Stock held during the applicable period for the period of
time that the member owns
the Class B Stock. Dividends are non-cumulative with respect to payment obligation. A
member that has provided a withdrawal notice, or whose membership is otherwise terminated,
will continue to receive dividends on its Class B Stock as long as the institution or its
successor owns Class B Stock.
	 
	 	 	In accordance with the Bank Act and the Regulations, dividends may only be paid from current
earnings or previously retained earnings. In accordance with the Regulations, the Bank’s
Board of Directors may not declare or pay a dividend if the Bank is not in compliance with
its Minimum Capital Requirements or if the Bank would fall below its Minimum Capital
Requirements as a result of the payment of the dividend. Dividend payments may be made in
the form of cash,

9

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	additional shares of Class B Stock, or a combination thereof as determined
by the Bank’s Board of Directors.
	 
	 	 	Except as otherwise provided herein or by regulation or statute, the Bank’s Board of
Directors has sole discretion to determine the amount, form, frequency and timing of
dividend payments.
	 
	3.8	 	Voting Rights
	 
	 	 	Members’ voting rights are limited to the election of directors as provided by the Bank Act.
The voting rights of holders of the Bank’s Class B Stock are as follows:

	 	3.8.1	 	Allocation of Elected Director Seats and Votes
	 
	 	 	 	In accordance with the Bank Act and the Regulations, the Finance Board will
designate elected director seats by state annually. Each member will be entitled to
vote in the election of directors representing the state in which the member is
located. Each member will be entitled to cast one vote in the election of directors
for each share of capital stock that the member was required to hold as of the
immediately preceding December 31, except that no member may cast a number of votes
greater than the average number of shares of capital stock required to be held by
all members in the state as of the preceding December 31. Shares of capital stock
held by members that were Excess Stock as of the preceding December 31 will not
convey voting rights in the election of directors.
	 
	 	3.8.2	 	Initial Election of Directors after Conversion
	 
	 	 	 	In accordance with the Regulations, the number of votes eligible to be cast in the
initial election of directors after the Conversion Date will be based on the number
of shares of capital stock that members were required to hold as of the immediately
preceding December 31. If this Capital Plan was in effect on the preceding December
31, the minimum investment requirements of this Capital Plan will be used to
determine the number of votes; otherwise, the number of votes will be determined
based on the number of shares required to be held in accordance with the Regulations
in effect prior to the implementation of the Capital Plan.
	 
	 	 	 	If any member’s actual holdings of capital stock were less than the applicable
minimum investment requirement on the preceding December 31, the number of shares
eligible to be voted will be based on the number of shares of capital stock actually
held by that member as of the preceding December 31.

	4.	 	Minimum Investment Requirements

	 	 	The Bank requires all members to purchase Class B Stock of the Bank and to maintain a
minimum investment in Class B Stock equal to the sum of the membership investment
requirement described in Section 4.1 plus the activity-based investment requirement
described in
Section 4.2. The Bank’s Board of Directors will periodically review and may adjust these
investment requirements as described in Section 4.3.
	 
	4.1	 	Membership Investment Requirement
	 
	 	 	Beginning on the Conversion Date, each member will be required to maintain at all times a
membership investment requirement equal to 0.25 percent of the member’s total assets as of
the most recent December 31, as reported on the member’s regulatory financial report for
that date, or its audited financial statements for that date if the member does not file
regulatory financial

10

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	reports, subject to a minimum membership investment requirement of
$1,000 and a maximum membership investment requirement of $25 million.
	 
	 	 	As described in Section 4.3, the Bank’s Board of Directors may from time to time increase or
decrease the membership investment requirement to an amount not less than 0.05 percent of
each member’s total assets nor more than 0.30 percent of each member’s total assets. The
Bank’s Board of Directors may also increase or decrease the maximum membership investment
requirement to an amount not less than $10 million or more than $50 million.
	 
	 	 	The membership investment requirement will be calculated for all members at least annually
during the first calendar quarter of the year, or as soon thereafter as members’ applicable
financial data becomes available. The annual recalculation of membership investment
requirements will become effective on or within 30 days of April 1 of each year. For new
members, the membership investment requirement will be calculated based on the new member’s
total assets as of the end of the most recent calendar quarter for which financial
information is available. Members will be notified in writing of the amount of their
membership investment requirements at least 10 days in advance of the effective date.
	 
	 	 	The Bank may recalculate all members’ membership investment requirements more often than
annually if it deems appropriate, and may recalculate individual members’ membership
investment requirements more often than annually at the member’s request. In each of these
cases, membership investment requirements will be recalculated based on members’ total
assets as of the end of the most recent calendar quarter for which financial data is
available. In addition, after the end of each calendar quarter, at the time the quarterly
financial data used to calculate members’ membership investment requirements becomes
available, the Bank will recalculate the membership investment requirements for institutions
whose membership terminated during the quarter.
	 
	 	 	Notwithstanding any other provision of this Capital Plan, in the event that (a) a receiver
has been appointed for the member, and (b) the Bank has terminated the member’s membership,
then that member’s membership investment requirement shall be zero.
	 
	4.2	 	Activity-Based Investment Requirement
	 
	 	 	In addition to its membership investment requirement, each member must maintain an
activity-based investment requirement equal to the sum of the advances investment
requirement described in Section 4.2.1 and the AMA investment requirement described in
Section 4.2.2. Each member, former member, or successor to a member with applicable
activity outstanding must comply with the activity-based investment requirement for as long
as the relevant activity remains outstanding, including periods beyond the termination of
the member’s membership in the Bank.
	 
	 	 	The activity-based investment requirement for each member, former member, or successor to a
member will change whenever the institution’s activity with the Bank changes. In addition,
the Bank’s Board of Directors may periodically adjust the activity-based investment
requirements in accordance with Section 4.3 of this Capital Plan.

	 	4.2.1	 	Advances Investment Requirement
	 
	 	 	 	Beginning on the Conversion Date, each member must maintain an activity-based
investment in Class B Stock in an amount equal to 4.25 percent of the outstanding
principal balance of all advances outstanding. The Bank’s Board of Directors may
from time to time increase or decrease the advances-based investment requirement to
an amount not less than 3.5 percent of members’ advances outstanding nor more than
5.0 percent of members’ advances outstanding. The Bank’s Board of Directors may apply

11

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	 	changes to the advances investment requirement only to new advances, or to
current and new advances.
	 
	 	 	 	The advances investment requirement will be calculated daily and each time a member
enters into a new advances transaction. Complying with the advances investment
requirement at the time a new advances transaction is funded will be a condition of
funding the new transaction.
	 
	 	4.2.2	 	Acquired Member Asset (AMA) Investment Requirement
	 
	 	 	 	Beginning on the Conversion Date, each member must maintain an activity-based
investment in Class B Stock in an amount equal to 4.25 percent of the outstanding
principal balance of all Acquired Member Assets (AMA) acquired by the Bank through
the member and currently outstanding on the Bank’s balance sheet. However, this AMA
investment requirement will apply only to AMA acquired pursuant to commitments
executed after the Conversion Date, or AMA acquired pursuant to commitments executed
prior to the Conversion Date that explicitly stipulate that those AMA will be
subject to AMA investment requirements.
	 
	 	 	 	The Bank’s Board of Directors may from time to time increase or decrease the AMA
investment requirement to an amount not less than 0.0 percent of AMA outstanding on
the Bank’s balance sheet nor more than 5.0 percent of AMA outstanding on the Bank’s
balance sheet. At the discretion of the Board of Directors, any reduction in the
AMA investment requirement percentage may be applied only to AMA acquired pursuant
to commitments executed after the reduction becomes effective, or to previously
acquired and new AMA. Any increase in the AMA investment requirement will apply
only to AMA acquired pursuant to commitments executed after the effective date of
the change, or to AMA acquired pursuant to commitments executed prior to the
effective date of such change that explicitly stipulate that those AMA will be
subject to future changes in AMA investment requirements.
	 
	 	 	 	The AMA investment requirement for outstanding AMA will be calculated at least
monthly (and as often as daily at the Bank’s discretion), and for new AMA each time
new AMA are funded. Complying with the AMA investment requirement at the time
applicable AMA transactions are funded will be a condition of funding the new
transactions.

	4.3	 	Periodic Review of Minimum Investment Requirements
	 
	 	 	In accordance with the Bank Act and the Regulations, and to ensure ongoing compliance with
the Bank’s Minimum Capital Requirements, the Bank’s Board of Directors will review the
Bank’s Capital Plan at least annually, or more often as the Board of Directors deems
necessary. As part of this review, the Board of Directors will determine whether changes in
the minimum investment requirements are necessary to ensure that the Bank remains in
compliance with its Minimum Capital Requirements, or are otherwise appropriate. Adjustments
may be made to the specific percentages and the maximum amount for the membership investment
requirement as specified in Section 4.1, and the specific percentages for the activity-based
investment requirements as specified in Section 4.2. Any changes the Bank’s Board of
Directors makes to the minimum investment requirements will be communicated by written
notice (and otherwise as deemed appropriate by the Bank in its sole discretion) to be sent
to Bank members at least 30 days in advance of their effective date.

12

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	Any changes to members’ minimum investment requirement deemed appropriate by the Bank’s
Board of Directors but not authorized by this Capital Plan may be implemented only after the
Finance Board approves an amended Capital Plan reflecting such changes.
	 
	4.4	 	Member Compliance
	 
	 	 	The Bank will monitor the minimum investment requirement of each member on an ongoing basis
to ensure that the member remains in compliance with the applicable requirement. Each
member is required to comply promptly with any adjusted minimum investment requirements
established by the Board of Directors. However, members will be allowed a reasonable time
to comply, not to exceed 30 days from the effective date established by the Board of
Directors for the change in minimum investment requirement. Members may reduce their
outstanding activity with the Bank (subject to any prepayment fees applicable to the
reduction in activity) as an alternative to purchasing additional Class B Stock.
	 
	 	 	To facilitate the sale of additional stock which members are required to purchase as a
result of any changes in their minimum investment requirements, the Bank is authorized to
issue stock in the name of a member and to debit the member’s demand deposit account at the
Bank.

	5.	 	Termination of Membership

	 	 	Membership in the Bank may be terminated through voluntary withdrawal, through involuntary
termination by action of the Bank’s Board of Directors, through acquisition of a member by
another member institution, through acquisition of a member by a non-member institution, or
otherwise through dissolution of a member’s charter.
	 
	5.1	 	Voluntary Withdrawal
	 
	 	 	A member may withdraw from membership in the Bank by providing five years prior written
notice to the Bank. During the five year period following receipt by the Bank of the
member’s withdrawal notice, the member will be entitled to all the benefits and will incur
all the obligations of membership, including the obligation to comply with all minimum
investment requirements throughout the five year period. However, the Bank may limit any
new advances or AMA to terms that would mature on or before the expiration of the withdrawal
notice period. The membership of an institution that has submitted a withdrawal notice will
terminate at the expiration of the five year period following receipt by the Bank of the
withdrawal notice.
	 
	 	 	A withdrawal notice will also constitute a stock redemption notice for the amount of Class B
Stock held by the member at the time the Bank receives the withdrawal notice. At the
expiration of the five year period following receipt by the Bank of the member’s withdrawal notice, the
member’s membership in the Bank will terminate and, subject to the limitations contained in
Section 3.5 of this Capital Plan, the Bank will pay the stated Par Value of the Class B Stock
covered by the withdrawal notice to the member in cash in accordance with the following
conditions.
	 
	 	 	If the withdrawing member has no outstanding advances or AMA that require maintenance of
Class B Stock in accordance with Section 4.2 of this Capital Plan, the Bank will redeem all
of the outstanding Class B Stock subject to the withdrawal notice. If the withdrawing
member has outstanding advances or AMA that require maintenance of Class B Stock in
accordance with Section 4.2 of this Capital Plan, the Bank will redeem all the shares of
Class B Stock subject to the withdrawal notice, except those shares of Class B Stock
required to be held to comply with the activity-based investment requirement related to the
remaining advances and AMA.
	 
	 	 	During the remaining term of advances or AMA outstanding after the termination of
membership,

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Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	the former member or its successor must continue to comply with any changes in
the activity-based investment requirements related to the remaining advances or AMA. If the
withdrawing member holds any Class B Stock subject to a withdrawal notice that cannot be
redeemed at the expiration of the withdrawal notice period because it is required to meet a
continuing activity-based investment requirement, that stock will become redeemable when it
is no longer needed to comply with an activity-based investment requirement.
	 
	 	 	Nothing in this section will preclude the Bank from repurchasing Excess Stock in accordance
with Section 3.4 of this Capital Plan.

	 	5.1.1	 	Automatic Stock Redemption Notice
	 
	 	 	 	If a member has filed a withdrawal notice, that notice will also automatically
constitute a stock redemption notice for any shares of Class B Stock subsequently
acquired, with such automatic redemption notice to be effective and the redemption
notice period to begin on the date any additional Class B Stock is acquired. Such
Class B Stock will be redeemable at the end of its respective redemption notice
period in accordance with Section 3.3.1 or, if such Class B Stock is required to
comply with an ongoing activity-based investment requirement, that Class B Stock
will become redeemable when it is no longer needed to comply with an activity-based
investment requirement.
	 
	 	5.1.2	 	Withdrawal Cancellation Notice
	 
	 	 	 	A member that has previously submitted a withdrawal notice to the Bank in writing in
accordance with Section 5.1 of this Capital Plan may cancel its withdrawal notice
prior to the expiration of the withdrawal notice period by providing written notice
to the Bank. A member may also rescind a withdrawal cancellation notice by
providing written notice to the Bank within 30 days of the original withdrawal
cancellation notice and incur no redemption cancellation fee.
	 
	 	 	 	A withdrawal cancellation notice or withdrawal notice rescission will constitute a
redemption cancellation notice for the amount of Class B Stock subject to redemption
pursuant to the original withdrawal notice. The redemption cancellation fees and
conditions contained in Section 3.3.2 of this Capital Plan will also apply to a
withdrawal cancellation notice. A withdrawal cancellation notice or withdrawal
notice rescission will also cancel without fee any related automatic notices of
redemption created by the original withdrawal notice pursuant to Section 5.1.1 of
this Capital Plan, unless otherwise directed by the member.

	5.2	 	Involuntary Termination of Membership
	 
	 	 	The Bank Act and the Regulations grant the Board of Directors the authority to terminate an
institution’s membership under certain specified conditions. In the event the Board of
Directors terminates a member’s membership, that membership will terminate on the date the
Board of Directors acts to terminate the membership, and the five year stock redemption
notice period will begin on the same date.
	 
	5.3	 	Termination by Charter Dissolution
	 
	 	 	If an institution’s membership terminates by virtue of the dissolution of its charter either
through acquisition by another institution or otherwise, the membership of the disappearing
institution will terminate upon the cancellation of its charter. In the event of an
acquisition of a member, the Class B Stock held by the member will be transferred
automatically to the acquiring institution.
	 
	 	 	If the acquiring institution is a member of the Bank, the acquired Class B Stock may be
applied to the acquiring member’s minimum investment requirement, and any outstanding stock
redemption

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Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	notices will remain in effect. If the acquiring institution is not a member of
the Bank, and does not apply for membership as provided in the Regulations, the five year
stock redemption notice period will begin on the date the institution’s membership
terminates, or earlier if the Bank has received a withdrawal notice from the disappearing
member.
	 
	5.4	 	General Membership Termination Provisions
	 
	 	 	Upon the termination of an institution’s membership, or upon the conclusion of the
transition period provided in the Regulations for acquiring institutions to make application
for membership in the Bank, the Bank will determine an orderly manner for liquidating all
remaining outstanding indebtedness (including prepayment fees) owed by that member to the
Bank, and settling all other claims against the member. After the expiration of any
redemption notice periods required by this Capital Plan, the Bank will redeem any remaining
Class B Stock in accordance with the provisions of this Capital Plan and applicable Finance
Board regulations. After all remaining obligations and claims have been extinguished or
settled, the Bank will redeem the remaining shares of Class B Stock.
	 
	 	 	Nothing in this section will preclude the Bank from repurchasing any Excess Stock in
accordance with the provisions of this Capital Plan prior to the expiration of the stock
redemption notice periods, or redeeming Class B Stock in accordance with the provisions of
this Capital Plan prior to the extinguishment or settlement of all obligations and claims
against a member whose membership is being or has been terminated. However, in accordance
with the Regulations and this Capital Plan, the Bank may not redeem or repurchase any Class
B Stock required to support advances or AMA in accordance with Section 4.2 of this Capital
Plan until the respective advances or AMA have been repaid.

	6.	 	Capital Structure Conversion

	 	 	The Conversion Date for this Capital Plan will be not later than 25 months following Finance
Board approval of the Capital Plan.
	 
	6.1	 	Capital Structure Conversion Process

	 	6.1.1	 	Preliminary Estimate of Members’ New Minimum Investment Requirements
	 
	 	 	 	At least 60 days prior to the Conversion Date, the Bank will calculate an estimate
of each member’s new minimum investment requirement, with the membership investment
requirement calculated based on the member’s total assets as of the immediately
preceding December 31 for which financial information is available, and the
activity-based investment requirement calculated based on the member’s outstanding
balances of advances and applicable AMA as of the most recent month end. The Bank
will provide this preliminary minimum investment requirement to each member by
written notice.
	 
	 	6.1.2	 	Member Choice to Opt Out of Capital Plan
	 
	 	 	 	A member that chooses to opt out of this Capital Plan must notify the Bank in
writing at least 30 days prior to the Conversion Date of its decision not to
participate in the capital structure conversion process set forth herein. An opt out
notice will constitute a notice of the member’s intention to withdraw from
membership and must be submitted to the Finance Board as well as the Bank at least
30 days prior to the Conversion Date for this Capital Plan. If the Finance Board and
the Bank receive the opt out notice more than six months prior to the Conversion
Date, the notice will be governed by the six month notification requirement and the
redemption terms in effect prior to the implementation of the Capital Plan. In this
case, the member’s membership will terminate six months from the date the Finance
Board receives the opt out / withdrawal notice, and its old capital

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Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	 	stock will be redeemable on that date.
	 
	 	 	 	If the Finance Board and the Bank receive the opt out notice less than six months
but at least 30 days in advance of the Conversion Date, the member’s membership will
terminate and its old capital stock will be redeemable on the Conversion Date.
	 
	 	 	 	If the opt out notice is received less than 30 days prior to the Conversion Date,
the Bank will exchange the member’s existing shares of capital stock for an equal
number of shares of Class B Stock in accordance with Section 6.1.5 of this Capital
Plan; the member’s membership will terminate and its Class B Stock will become
redeemable five years from the date the opt out / withdrawal notice was received. A
member that elects to opt out of the Capital Plan and whose opt out notice is
received less than 30 days prior to the Conversion Date will be required to purchase
additional shares of Class B Stock to comply with the minimum investment
requirements of this Capital Plan and to support any new activity entered into by
the member after the Conversion Date until its membership terminates. Any additional shares of Class B Stock acquired after the Conversion Date by an institution that
elects to opt out of the Capital Plan will be subject to the same terms and
conditions as any other shares of Class B Stock acquired by any member after the
Conversion Date.
	 
	 	 	 	If an institution has withdrawn from membership in the Bank prior to the Conversion
Date (either through the opt out provisions of this Section of the Capital Plan or
otherwise) but still owns capital stock at the Conversion Date related to activity
that remains outstanding, that institution’s existing capital stock will be
converted to Class B Stock on the Conversion Date. The amount of Class B Stock
required to be maintained by that institution while the activity remains outstanding
will be the lesser of the amount of capital stock owned immediately prior to the
conversion date, the amount of capital stock required to be held to support that
activity immediately prior to the conversion date, or the activity-based investment
requirement specified in this Capital Plan.
	 
	 	6.1.3	 	Member Transition Period
	 
	 	 	 	In accordance with the Bank Act and the Regulations, members that joined a Federal
Home Loan Bank after November 12, 1999 must comply with the minimum investment
requirements of the Capital Plan on the Conversion Date. Any institution that
becomes a member of the Bank after the Conversion Date must comply with the minimum investment
requirements of this Capital Plan as of the date on which it becomes a member of the
Bank.
	 
	 	 	 	Members that joined a Federal Home Loan Bank on or before November 12, 1999 and for
which this Capital Plan establishes a higher minimum investment requirement than
under the requirements in effect immediately prior to implementation of this Capital
Plan will have the option to meet the additional minimum investment requirement in
four equal quarterly increments, provided, however, that members must immediately
purchase Class B Stock required to support any change in member activity subsequent
to the Conversion Date. A member must advise the Bank in writing of its intent to
exercise this option at least 30 days prior to the Conversion Date.
	 
	 	 	 	For a member eligible to elect to utilize these transition provisions and that
elects to do so, the Bank will reduce the membership investment requirement during
the first quarter following the Conversion Date by an amount equal to 100 percent of
the amount by which this Capital Plan increases the member’s total minimum
investment requirement; during the second quarter following the Conversion Date, the
Bank will reduce the membership investment requirement by 75 percent of the amount
by which the Capital

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Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	 	 	 	Plan increases the member’s total minimum investment requirement; during the third quarter following the Conversion Date, the Bank will
reduce the membership investment requirement by 50 percent of the amount by which
the Capital Plan increases the member’s total minimum investment requirement; and
during the fourth quarter following the Conversion Date, the Bank will reduce the
membership investment requirement by 25 percent of the amount by which the Capital
Plan increases the member’s total minimum investment requirement. At all times
beginning on the Conversion Date, the member must comply with all applicable
activity-based investment requirements.
	 
	 	6.1.4	 	Minimum Investment Requirements on Conversion Date
	 
	 	 	 	Each member’s minimum investment requirement at the opening of business on the
Conversion Date will be calculated as the sum of the membership investment
requirement based on the member’s total assets as of the immediately preceding
December 31 for which the applicable financial information is available (subject to
any applicable transition adjustments as described in Section 6.1.3), and the
application of the relevant activity-based investment requirements to the member’s
outstanding balances of advances and applicable AMA at the close of business on the
business day immediately prior to the Conversion Date.
	 
	 	6.1.5	 	Conversion Date Process
	 
	 	 	 	The following actions, which constitute the Bank’s Plan of Reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder, are to be taken in order to implement this Capital Plan.
	 
	 	 	 	At the opening of business on the Conversion Date, the Bank will:

	 	1.	 	Exchange the member’s existing shares of capital stock for an
equal number of shares of Class B Stock.
	 
	 	2.	 	Advise the member by written or electronic notice the details
of its new minimum investment requirement, including an explicit notation of
the member’s excess or deficit position.
	 
	 	3.	 	A member whose investment in capital stock on the Conversion
Date exceeds the new minimum investment requirement will hold Excess Stock that
the Bank may repurchase in accordance with the provisions of Section 3.4 of
this Capital Plan.
	 
	 	4.	 	A member whose actual holdings of capital stock on the
Conversion Date are less than the minimum investment requirement on the
Conversion Date must purchase sufficient additional Class B Stock to satisfy
the new minimum investment requirement. A member eligible to utilize the
transition provisions of Section 6.1.3 of this Capital Plan and that elects to
do so may purchase the additional shares of Class B Stock in four equal
quarterly installments as described in Section 6.1.3. To facilitate the
purchase of any required additional shares of Class B Stock, the Bank is
authorized to issue Class B Stock in the member’s name and debit the member’s
demand deposit account at the Bank.

	 	6.1.6	 	Post-Conversion Activity-Based Stock Purchases
	 
	 	 	 	Any member that obtains an advance or enters into any AMA transaction subject to an
activity-based investment requirement subsequent to the Conversion Date is required
to comply with the activity-based investment requirement related to that transaction
at the time the transaction occurs.

17

 

Federal Home Loan Bank of Dallas Capital Plan: Revised May 28, 2008

	6.2	 	Transition Procedures

	 	6.2.1	 	The Bank’s Transition
	 
	 	 	 	It is the Bank’s intent to be in full compliance with its Minimum Capital
Requirements on the Conversion Date.
	 
	 	6.2.2	 	Member Transition
	 
	 	 	 	For a member eligible to utilize the transition provisions of Section 6.1.3 of this
Capital Plan and that elects to do so, the membership investment requirement will
increase in even increments over four quarterly periods as specified in Section
6.1.3 of this Capital Plan. Additional purchases of Class B Stock required to
maintain compliance with the minimum investment requirements of this Capital Plan
will be made automatically by issuing stock in the member’s name and debiting the
member’s demand deposit account at the Bank.

	7.	 	Capital Plan Reviews

	 	7.1	 	Independent Certified Public Accountant
	 
	 	 	 	PricewaterhouseCoopers (PwC), an independent Certified Public Accounting (CPA) firm,
reviewed the October 22, 2001 draft of this Capital Plan and concluded, to the
extent possible, that the implementation of this Capital Plan would not result in
any write-down of the redeemable stock owned by the Bank’s members. A copy of PwC’s
review has been provided to the Finance Board. The Bank represents that no
substantive modifications have been made to the October 22, 2001 draft in this
Capital Plan that it believes would have an impact on PwC’s conclusion. A letter
from PwC confirming that conclusion for this Capital Plan will be provided following
Finance Board approval of the Capital Plan.
	 
	 	7.2	 	Nationally Recognized Statistical Rating Organization (NRSRO)
	 
	 	 	 	Standard & Poor’s (S&P), a Nationally Recognized Statistical Rating Organization
(NRSRO), reviewed the July 19, 2001 draft of this Capital Plan and determined, to
the extent possible, that the implementation of this Capital Plan would not have a
material effect on the credit rating of the Bank. A copy of S&P’s review has been
provided to the Finance Board with this Capital Plan. The Bank represents that no
substantive modifications have been made to the July 19, 2001 draft in this Capital
Plan that it believes would have an impact on the Bank’s credit rating. A letter
from S&P confirming that conclusion for this Capital Plan will be provided following
Finance Board approval of the Capital Plan.
	 
	 	7.3	 	Good Faith Determination
	 
	 	 	 	The Bank has made a good faith determination that this Capital Plan
can be implemented. The Bank has provided evidence of this determination to
the Finance Board.

18

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